Document of The World Bank
FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 3 1465-RU
PROJECT APPRAISAL DOCUMENT
ONA Public Disclosure Authorized PROPOSED LOAN
IN THE AMOUNT OF USD 80 MILLION
TO THE
RUSSIAN FEDERATION
FOR A
Public Disclosure Authorized NATIONAL HYDROMET MODERNIZATION PROJECT
February 16,2005
Environmentally and Socially Sustainable Development Unit (ECSSD) Russian Federation Country Unit Europe and Central Asia Region
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Public Disclosure Authorized Bank authorization. CURRENCY EQUIVALENTS
(Exchange Rate Effective January 3 1,2005)
Currency Unit = Ruble Ruble28.0665 = US$1
FISCAL YEAR January 1 - December31
ABBREVIATIONS AND ACRONYMS AVHRR Advanced Very High Resolution Radiometer BEA Bureau ofEconomic Analysis BSRN Baseline Surface Radiation Network CAS Country Assistance Strategy CQS Selection Based on Consultant’s Qualifications FMR Financial Management Report GGO Main Geophysical Observatory named after A.I.Voeikov GoR Government ofthe Russian Federation GTS Global Telecommunication System GEF Global Environmental Facility HRPT High Rate Picture Transmission LAN Local Area Network LCS Least Cost Selection LIB Limited International Bidding MoF Ministry ofFinance ofthe Russian Federation MSC Meteorological Service ofCanada MTN Main Telecommunication Network NCB National Competitive Bidding NOAA National Oceanographic and Atmospheric Administration (U.S.) NWS National Weather Service (U.S.) NWSRFS National Weather Service River Forecast System OCR Optical Character Recognition OPRC Operational Procurement Review Committee PIU Project Implementation Unit PMC Project Management Committee QCBS Quality and Cost-Based Selection RHMC RosHydromet Center RMC Regional Meteorological Center RHM RosH ydrome t RosHydromet Federal Service on Hydrometeorology and Environmental Monitoring ofthe Russian Federation SA Special Account SBD Standard Bidding Documents SOE Statement ofExpenditure TOVS TROS Operational Vertical Sounder VNIIGMI- All Russian Research Institute ofHydrometeorological Information - World FOR OFFICIAL, USE ONLY
WDC Data Center WMC World Meteorological Center WMO World Meteorological Organization UTC Coordinated Universal Time (formerly known as Greenwich Mean Time)
Vice President: Shigeo Katsu Country Director: Kristalina Georgieva Sector Director: Laura Tuck Task Team Leader: Vladimir Tsirkunov
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. RUSSIAN FEDERATION NATIONAL HYDROMET MODERNIZATION PROJECT
CONTENTS
Page
A . STRATEGIC CONTEXT AND RATIONALE ...... 10 1. Country and sector issues...... 10 2 . Rationale for Bank involvement ...... 12 3 . Higher level objectives to which the project contributes ...... 12 B. PROJECT DESCRIPTION...... 13 1. Lending instrument ...... 13 2 . Project development objective and key indicators...... 13 3 . Project components ...... 13 4 . Lessons learned and reflected in the project design...... 16 5 . Alternatives considered and reasons for rejection ...... 17
C. IMPLEMENTATION ...... 18 1. Partnership arrangements ...... 18 2 . Institutional and implementation arrangements ...... 19 3 . Monitoring and evaluation of outcomesh-esults ...... 20 ... 4 . Sustainability...... 21 5. Critical risks and possible controversial aspects ...... 22 .. 6 . Loadcredit conditions and covenants ...... 23
D. APPRAISAL SUMMARY ...... 24 1. Economic and financial analyses ...... 24 2 . Technical ...... 25 3 . Fiduciary ...... 25 4 . Social...... 27 5 . Environment ...... 28 6 . Safeguard policies ...... 28 7 . Policy exceptions and readiness ...... 29
Annex 1: Country and Sector or Program Background ...... 31 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ...... 49 Annex 3: Results Framework and Monitoring ...... 50 Annex 4: Detailed Project Description...... 56 Annex 5: Project Costs ...... 66 Annex 6: Implementation Arrangements ...... 67 Annex 7: Financial Management and Disbursement Arrangements...... 69 Annex 8: Procurement...... 75 Annex 9: Economic Analysis ...... :...... 85 Annex 10: Safeguard Policy Issues ...... 90 Annex 11: Project Preparation and Supervision ...... 91 Annex 12: Documents in the Project File ...... 92 Annex 13: Statement of Loans and Credits ...... 95 Annex 14: Country at a Glance ...... 98
Map: IBRD No. 33836 RUSSIAN FEDERATION
HYDROMET MODERNIZATION PROJECT
PROJECT APPRAISAL DOCUMENT
EUROPE AND CENTRAL ASIA
ECSSD
Date: February 16,2005 Team Leader: Vladimir V. Tsirkunov Country Director: Kristalina I.Georgieva Sectors: General water, sanitation and flood Sector Director: Laura Tuck protection sector (60%);Irrigation and drainage (30%);Information technology (10%) Themes: Water resource management (P);Climate change (S) Project ID: PO82239 Environmental screening category: Not Required Lending Instrument: Specific Investment Loan Safeguard screening category: Project Financing Data [XI Loan [ 3 Credit [ ]Grant [ ]Guarantee [ ]Other:
For Loans/Credits/Others: Total Bank financing (US$m.): 80.00 Pronosed terms: VSL
Source Local Foreign Total BORROWER 33.30 20.04 53.33 INTERNATIONAL BANK FOR 49.94 30.06 80.00 RECONSTRUCTION AND DEVELOPMENT Total: 83.24 50.09 133.33
Borrower: Ministry ofFinance ofthe Russian Federation 9, Ilyinka street Moscow Russian Federation 103097 Tel: +7-(095)913-4406 Fax: +7-(099-913-43 15'4308 [email protected]
Responsible Agency: RosHydromet 12, Novovagan'kovsky pereulok Moscow
6 Russian Federation 123995 Tel: +7-(095)-205-4813 Fax: +7-(095)-252-1158 3edrBmecom.ru
Project implementation period: Start June 17,2005 End: September 30,2010 Expected effectiveness date: June 17, 2005 Expected closing date: September 30,2010 Does the project depart from the CAS in content or other significant respects? [ ]Yes [XINO ??e$ PAD A.3 Does the project require any exceptions from Bank policies? Re$ PAD D. 7 [XIYes [ ]No Have these been approved by Bank management? [XIYes [ ]No [s approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated “substantial” or “high”? [XIYes [ ]No Ref:~~ PAD C.5 Does the project meet the Regional criteria for readiness for implementation? [XlYes [ ]No Ref:~~~ PAD D. 7 Project development objective Re$ PAD B.2, Technical Annex 3 The main development objective ofthe project is to increase the accuracy offorecasts provided to the Russian people and economy by modernizing key elements ofRosHydromet’s technical base and strengthening its institutional arrangements. This would enable enterprise and household adjustments to protect lives and support economic growth.
Project description [one-sentence summary of each component] Re$ PAD B.3.a, Technical Annex 4 Component A: Modernization ofComputing, Archiving and Telecommunications Facilities (US$46.1 million baseline excluding contingencies and taxes, US$62.1 million estimated project costs).
A. 1: Modernization ofthe Moscow WMC and Obninsk Archiving Facility (US$30.5 million excluding contingencies and taxes, US$4 1.O million estimated project costs). This subcomponent will support capacity upgrade at RosHydromet’s Main Computing Center and at the main facility for archiving and retrieval ofhydrometeorological data at Obninsk.
A.2: Restructuring at Novosibirsk and Khabarovsk RMCs and Modernization ofVoeikov GGO (US$7.9 million baseline excluding contingencies and taxes, US$10.7 million estimated project costs). This subcomponent will upgrade regional specialized forecast centers at Novosibirsk and Khabarovsk, and Voeikov Main Geophysical Observatory in St. Petersburg.
A.3: Modernization of the Communications and Data Transmission System (US$7.7 million
7 baseline excluding contingencies and taxes, US$10.4 million estimated project costs). The aim of this subcomponent is to facilitate efficient and timely aggregation and dissemination ofdata and analyses.
Component B: Upgrading ofthe Observation Networks (US$42.3 million baseline excluding contingencies and taxes, US$56.9 million estimated project costs)
B 1. Surface Observation Network (US$17.4 million excluding contingencies and taxes, US$23.3 million estimated project costs). This subcomponent aims to upgrade the instrumentation at 900-1000 ofRosHydromet's surface observing stations.
B2. Aerological (Upper Air) Network (US$4.9 million baseline excluding contingencies and taxes, US$6.6 million estimated project costs).This subcomponent will upgrade the upper-air network. About 45 MeteoritIAVK aerological radars may be replaced, and a further 40 AVK stations supplied with new computing and radar supply sets.
B3. Meteorological Radars and Lightning Detection. (US$8.5 million baseline excluding contingencies and taxes, US$11.4 million estimated project costs). This subcomponent will improve storm warning to heavily-populated urban areas and to vulnerable coastal zone.
B4. Regional Hydrometeorological Centers (US$5.3 million excluding contingencies and taxes, US$7.2 million estimated project costs). This subcomponent will finance upgraded capacity at 20-30 regional hydromet centers, addressing four issues: satellite data reception, visualization systems, hydrological forecasting, and atmospheric pollution monitoring.
B5. Hydrological Network (US$6.2 million baseline excluding contingencies and taxes, US$8.4 million estimated project costs). This sub-component will finance upgrade ofabout 600- 800 hydroposts. The upgrade will focus on critical locations for flow measurements indicating the state ofthe river systems, locations critical for the purpose offlood warning, and full re- equipment ofthree flood-prone sub-basins to pilot the transition to automatic monitoring.
Component C: Institutional Strengthening, Improvement in Output Dissemination, and Emergency Preparedness (US$5.9 million baseline excluding contingencies and taxes, US$7.9 million estimated project costs).
C. 1. Institutional Strengthening (US$2.7 million baseline excluding contingencies and taxes, US$3.6 million estimated project costs). This subcomponent will comprise a modest institutional strengthening program.
C2. Client Service System (US$1.4 million baseline excluding contingencies and taxes, US$1.9 million estimated project costs). A Client Service System will be designed and implemented to facilitate dissemination ofdata and information from RosHydromet centers. .
C3. Emergency Preparedness and Response (US$1.8 million baseline excluding contingencies and taxes, US$2.4 million estimated project costs). This subcomponent is aimed to improve emergency response preparedness, via implementation ofseveral pilots with the goal of
8 developing replicable models.
Component D: Project Management, Training, and Monitoring and Evaluation (US$4.7 million baseline excluding contingencies and taxes, US$6.4 million estimated project costs). This component would support RosHydromet in project implementation, training, monitoring and evaluation ofthe project impact. It will support operation ofthe Project Management Committee (PMC) and overall project management, as well as technical assistance in such areas as contract administration, installation and construction supervision, procurement and financial management.
Which safeguard policies are triggered, if any? Re$ PAD 0.6, Technical Annex 10 Environmental Assessment (OP/BP/GP 4.01)
Significant, non-standard conditions, if any, for:
Board presentation: Adoption ofRosHydromet Administrative Order on the Capacity Building Program. Re$ PAD Annex 6
Loadcredit effectiveness: Execution ofAgency Agreement between MOF, RosHydromet and BEA. Re$ PAD C.6
Covenants applicable to project implementation: The Borrower to carry out the Capacity Building Program activities in accordance with a manual to be adopted by RosHydromet satisfactory to the Bank. Re$ PAD Annex 6
9 A. STRATEGIC CONTEXT AND RATIONALE
1. Country and sector issues
The Russian Federal Service for Hydrometeorology and Environmental Monitoring (RosHydromet) is charged by law with reducing loss oflife and damage to the environment and economy that arises from weather events and climate. To meet its charter, RosHydromet monitors meteorological variables, hydrological variables, air and water quality and soil characteristics. It produces daily weather forecasts, flood and storm warnings, seasonal forecasts, drought monitoring reports, agrometeorological forecasts, projections of climate change, general ocean circulation models, and records ofambient pollution, among other products.
RosHydromet is also responsible for the Russian Federation’s compliance with treaty obligations inherited from the Soviet Union. In international agreements forged in the 1960s, the USSR accepted responsibility for a central role in the world network ofmeteorology that is coordinated by the United Nations’ World Meteorological Organization. As a result, the Moscow World Meteorological Center is one of three worldwide centers that are charged with computing and distributing daily global forecasts to initialize the world’s regional weather models, as well as developing new techniques in support of worldwide forecasting. In addition, the All-Russian Research Institute ofHydrometeorological Information (VNIIGMI) archive located in Obninsk is a World Data Center, RosHydromet’s regional centers at Khabarovsk and Novosibirsk are charged with global leadership in specific areas of forecasting, and Voeikov Main Geophysical Observatory is a World Data Center maintaining globally significant solar radiation databases. Finally, because weather processes are intrinsically global, the data supplied from Russia’s vast land mass is essential to forecasters worldwide; in fact, it comprises about 10 percent of worldwide data supplied via the World Meteorological Organization (WMO) network as the basis for the world’s daily weather forecasts.
The capacity of RosHydromet to provide services to Russia and globally has steadily declined since the economic transition began. RosHydromet’s decline was associated with the overall deterioration of public sector performance, but was exacerbated even in that context, as RosHydromet found itself at the margin of Government interest, inadequately funded for staff salaries and unfunded for maintenance or new investments. From 1994-2000, funding from the national budget ranged from 28 percent to 41 percent of what would be required for regular operations. As a result, RosHydromet’s capacity to help prevent economic and human losses has deteriorated. To take one measure, the number of dangerous weather events not predicted by RosHydromet, as a share of the number of dangerous weather events that actually occurred, increased from 6.1 percent in 1993 to 23.1 percent in 2001.
The decline has affected all elements of the RosHydromet system: observational networks; data transmission, archiving and processing facilities; research and development facilities. Since 1987, RosHydromet has closed about 30 percent of its surface data collection stations. The stations that remain open record a more limited set of parameters, less frequently, using instruments that are aging and failing. The performance ofthe hydrological monitoring network has seriously deteriorated as well: the timeliness and density of stream gauge data is in many areas insufficient to provide a basis for accurate and timely flood forecasts. Of its former
10 network of 130 upper-air stations (the data underlying large-scale weather modeling), RosHydromet has closed about thirty stations and scaled back launches at others because the cost of regular launches is beyond the system’s budget. Communications equipment and the technologies used are obsolete, unreliable, labor-intensive and expensive. Russia’s meteorological satellites are either lost or not well-functioning. Only a few of RosHydromet’s satellite ground receiving stations are capable of receiving data available from intemational satellites. Few urban areas have radar protection to monitor oncoming storms, and none have Doppler-capable radar that can track storms. RosHydromet’s computing center depends, at present, on an eight-year-old Cray supercomputer. While the agency has made an outstanding effort to make the best possible use of available computing resources through software and modeling improvements, today the agency’s computing capacity is out-powered by comparable international centers by a factor ofabout 1000 to 1. The long-term safety ofdata in the very large archive ofthe World Data Center in Obninsk is uncertain. Data may be lost if records now held on paper, reels ofmagnetic tape and microfiche are not converted to electronic media soon.
As a result of long-term underfunding, RosHydromet’s capacity to offer forecasts that help mitigate weather-related losses has fallen behind the standards set by other equivalent national services, and as such, the standard needed to keep the economy competitive. Aviation, shipping, agriculture, water resources management, forestry, fuel transport and construction, to name a few sectors, are at a competitive disadvantage, wasting resources because they do not receive best quality, timely weather forecasts allowing them to optimize weather-related decisions. .
Beyond the hardware issues is the fact that RosHydromet, which has been working for the last decade in a “survival mode,” is still missing a long-term institutional development perspective and strategy for adjustment to the realities of a market economy. Such a perspective is required to ensure RosHydromet’s sustainable functioning and to lay a basis for re-negotiated relationships with sectoral and governmental clients on the federal, regional and municipal levels. At present, RosHydromet collects about 25 percent of its income from services provided to a wide range of clients. Many of them, particularly federal agencies, have doubts that such semi-commercial arrangements are indeed optimal from the national perspective.
Despite these issues, RosHydromet has managed to maintain its basic monitoring infrastructure in functioning condition, retain core technical expertise and staff, and protect its institutional integrity and traditions. RosHydromet currently functions as a single, vertically-integrated national agency organized around several nationwide observational networks designed and operated in accordance with unified principles compatible with international standards. RosHydromet and its key specialists have high reputations among their peers globally. An important manifestation of this was the election in 2003 of Mr. A. Bedritsky, the Head of RosHydromet, as President of the United Nations World Meteorological Organization (WMO). RosHydromet demonstrates a strong commitment to technical innovation and readiness to embark on long-term institutional reforms to improve the quality of its services and its client orientation.
In the last few years, the Government has made a renewed commitment to improve RosHydromet’s performance. The Government is concerned that the deterioration of RosHydromet’s infrastructure increases losses to the Russian economy and limits the Russian
11 Federation’s capacity to meet its commitments to world meteorology. The Government of the Russian Federation’s Resolution #94 ofFebruary 8,2002, “On measures to fulfill the obligations of the Russian Federation in international exchange of hydrometeorological observational data and implementation ofthe functions ofthe World Meteorological Center in the city ofMoscow,” confirms those commitments and specifies that RosHydromet is responsible for fulfillment ofthe obligations ofthe Russian Federation under the WMO convention. In addition, the Government has undertaken a targeted federal program, “Environment and Natural Resources of Russia (2002-20 lo),” with a sub-program “Hydrometeorological Support for Safe Vital Activities and Rational Nature Management” that aims to improve the hydrometeorological service. The recent major restructuring of the Government re-established RosHydromet as a specialized federal service providing weather, hydrological and environmental monitoring services to society (Decree ofthe President N649 dated May 20,2004). Unlike most institutions in the new Russian Government, which report to the ministries, RosHydromet will report directly to the Government, a decision underscoring its important interagency functions and the broad demand for its services.
2. Rationale for Bank involvement
One ofthe Bank’s key objectives is improvement of public service delivery, and the provision of weather and hydrological forecasts is a traditional area of such public service. The Bank is well- placed among financiers to support re-investment in the Russian Federation’s hydrometeorological capacity. Skilled, accurate weather forecasting depends on high technology and on an international cooperative effort. The Bank is supporting related investments in ECA, such as those in Romania, Turkey, Poland and to a limited extent in Central Asia. The Bank’s ability to promote international cooperation in the public sector and to coordinate international procurement provides useful support to the client’s development goals.
3. Higher level objectives to which the project contributes
The project supports the higher-level objective ofreducing the risk to life and the economy from unfavorable weather conditions. The total annual direct losses in Russia associated with dangerous weather and hydrological events are estimated to be USD 1-2 billion. Recent massive economic losses and human casualties resulting from floods, avalanches and torrential storms in the North Caucasus, Siberia and the Far East have showed how vulnerable the Russian Federation is today with respect to weather hazards. The project is intended to diminish not only the damage to the economy that arises from avoidable weather damage, but also that which results from the high degree of uncertainty about weather risk, which adds to the cost of doing business and limits the competitiveness of Russian agriculture and other enterprises. The proposed project would build RosHydromet’s capacity and strengthen it as an institution, and in this way strengthen the ability ofthe public sector to meet public needs.
The proposed project supports two strategic pillars ofRussia’s 2002 Country Assistance Strategy (CAS). (i)It will strengthen public sector management by improving the efficiency and quality of public service delivery critical for improving the investment climate and supporting long-term growth. Improved efficiency and quality in weather forecasting will reduce risks to the economy and support investment, mitigating the risks of natural disaster that currently affect
12 important infrastructure, agricultural and industrial areas. (ii)It will mitigate environmental risks by addressing environmental hazards and improving environmental management. Improved forecasting will mitigate the risks of floods, drought and fire, winds and extreme weather events and will support emergency preparedness associated with the potential damage resulting from industrial and other accidents. As well, the project will reduce social risk, by improving security through measures to improve emergency warnings to the population.
B. PROJECT DESCRIPTION
1. Lending instrument
The proposed project will be financed through a Specific Investment Loan (SIL) of US$SO.O million requested by the Borrower, and by a Government investment contribution of US$29 million (net of taxes). The total cost of the project is currently estimated at US$133.3 million. The proposed loan will enable the Beneficiary (RosHydromet) to finance the modernization of the most important elements of the hydrometeorological system in Russia. Regular national budget funding, which is usually limited to commitments of no more than one year, is not suitable for financing such a major sectoral investment where is single contract may require sustained funding over several years. The proposed project, over its five-year lifetime, will provide RosHydromet with the required investment capital and technical assistance to ensure that the organization can adequately fulfill its national and international mandate. Emphasis will be placed on strengthening computing resources, strengthening the measurement and transmission of hydrometeorological data, and institutional capacity building to support and sustain the investments made. The Government will finance approximately 40 percent of the identified investment costs, recurrent operating costs, taxes and duties.
2. Project development objective and key indicators
The main development objective of the project is to increase the accuracy of forecasts provided to the Russian people and economy by modernizing key elements of the technical base and strengthening RosHydromet's institutional arrangements. All Russian citizens would then receive weather forecasts of higher quality. This would enable enterprise and household adjustments to protect lives and support economic growth.
The success of the proposed project would be measured in terms of improvements in the accuracy and spatial resolution of forecasting, improved transmission of data within the RosHydromet network and beyond, increased accessibility ofthe RosHydromet archive records, higher density of data networks, more-timely emergency alerts to mitigate weather damage, and progress toward a modernized concept of operations. The latter should comprise the organizational changes needed to improve technical capacity through modernized methods, a sustainable approach to human resources issues, and progress toward financial sustainability.
3. Project components
The investments RosHydromet has proposed address priority needs that are indicated under all reasonable strategies for the agency's future development. Investments have been selected
13 according to several principles: (1) RosHydromet’s core hnctions should not be compromised; (2) RosHydromet’s capacity to forecast hazardous weather events in a timely manner should be restored and improved; (3) RosHydromet’s institutional and economic viability should be strengthened; and (4) RosHydromet should ensure that Russia is able to comply with its national obligations to WMO.
Component A. Modernization of Computing, Archiving and Telecommunications Facilities (US$46.1 million baseline excluding contingencies and taxes, US$62.1 million estimated project costs) aims to upgrade computing capacity and capacity for transmission, archiving and retrieval ofdata through three subcomponents.
Modernization of the Moscow WMC and Obninsk Archiving Facility will finance procurement of a supercomputer for the WMC in Moscow, and will modernize the RosHydromet archiving facilities in VNIIGMI-WDC (Obninsk) through the upgrading existing archiving facilities with support for data rescue ofinformation currently stored on deteriorating media.
Restructuring of Novosibirsk and Khabarovsk RMCs and Modernization of Main Geophysical observatory (GGO) will upgrade computing facilities at the Russian Federation’s two WMO Regional Specialized Meteorological Centers, the forecast centers at Novosibirsk and Khabarovsk, through procurement of two supercomputers (smaller than that to be procured for MOSCOW~SWMC). This subcomponent will also support upgrading at the World Radiation Data Center maintained by RosHydromet for the WMO at Voiekov Main Geophysical Observatory in St. Petersburg. The latter undertakes long-term prediction and climate change forecasts. In these tasks, Voeikov Observatory is constrained at present by the low resolution of models that it can use, by impossibility of ensemble forecasts. Informational resources are considerably limited by weak telecoms connecting it to the WMC Moscow and to the global community.
Modernization of the Communications and Data Transmission System will address RosHydromet’s communications system as a whole. This will include the modernization of communications among RosHydromet’s principal facilities and also communications with selected high-priority measurement stations and with remote stations. Communications and infrastructure required to support the modernized computer centers will be financed, including equipment to assure continuous power supply, investments in local and wide area networks and the supply of required peripheral equipment. Taken together, investments under this component are expected to significantly improve the timeliness and effectiveness ofweather forecasts and to support data availability and sharing both within Russia and globally.
Component B. Upgrading of the Observational Networks (US$42.3 million baseline excluding contingencies and taxes, US$56.9 million estimated project costs) is intended to modernize key components of RosHydromet’s meteorological and hydrological observational networks. There are five sub-components.
Suvface Observation Network will provide equipment for about 900 surface meteorological stations which are important for regional and local forecasts. It will also support the creation of about 10 pilot sub-regional meteorological networks, which will be established following a comprehensive analysis ofthe existing system and user needs.
14 Aerological (Upper-Air) Network will re-equip selected upper-air sounding stations. While the aerological network is important locally and regionally, it is the most important network investment in support of global forecasting: these stations collect the three-dimensional datasets ofkey meteorological variables that constitute the principal input to global weather models.
Meteorological Radars and Lightning Detection will improve storm waming to heavily- populated urban areas and to vulnerable coastal zones.
Regional Hydrometeorological Centers will equip regional centers with hardware and software to improve weather and flood forecasts. It will provide equipment for visualization of data, downloading of satellite data and improvement of communications capacity. It will also include workstations and software for operational archiving. These upgrades will improve prediction from the local level to the global level, and will also support forest fire identification and environmental monitoring.
Hydrological Network will upgrade 700-800 hydrological posts. About half would be priority sites distributed nationally: sites that are flood-prone, or where time series are long, or that are crucial to the hydrology of major rivers. The other half would comprise upgrade of the entire hydrological network in three high priority river basins, currently foreseen as the Kuban, Ussury and Oka, with automatic and semi-automatic stations. Hydrological data to be collected would complement meteorological forecasts to enable flood wamings and support water resources management.
Component C. Institutional Strengthening, Improvement in Output Dissemination and Emergency Preparedness (US$5.9 million baseline excluding contingencies and taxes, US$7.9 million estimated project costs) is intended to formulate, develop and test new operational principles drawn from worldwide experience, improve emergency wamings of dangerous weather conditions leading to emergency situations and improve provision of information to the clients. The work will be undertaken under three subcomponents.
Institutional Strengthening would support development and testing of new principles and approaches aimed at institutional strengthening to make RosHydromet a viable, modern and client-oriented agency. This subcomponent will formulate new requirements for the modemized RosHydromet system based on the client’s needs and projected trends in funding, undertake detailed design of a new system and test it in selected regional RosHydromet branches. This would help to modify the agency’s current planning and budgeting techniques, and operational and maintenance procedures. It would help define proper configuration ofthe main elements of the system; including, for example, automated monitoring, new forecast techniques, and modernization ofmanagement.
Client Service System will include design of a system (databases, networks and software) that will improve data availability, presentation and dissemination to ensure that information is supplied in useful formats to RosHydromet’s clients. Under this subcomponent a number of activities will be carried out specifically aimed at soliciting client needs and views and later ensuring that clients are informed ofthe various developments at RosHydromet.
15 Emergency Preparedness and Response will undertake development of improved emergency waming procedures. This subcomponent would examine how information from RosHydromet is used for emergency preparedness, aiming to improve cooperation with local and regional authorities, the Ministry ofEmergency and other concerned agencies during emergencies and for emergency preparedness planning. Principal investments would include technical assistance to define gaps in the system, procurement ofequipment for emergency preparedness and resources for pilot testing in a few areas.
Component D. Project Management, Monitoring and Evaluation (US$4.7 million baseline excluding contingencies and taxes, US$6.4 million estimated project costs) will finance project management, supervision, and monitoring and evaluation of project impact. Progress monitoring will include periodic surveys tracking achievement ofproject development objectives and identifying improvements or actions necessary for the project’s success. Implementation arrangements for the project have been discussed with RosHydromet and the Ministry of Finance, and it was agreed that RosHydromet staff will be responsible for overall and technical project implementation issues. A small Project Implementation Unit (PIU) will provide assistance to RosHydromet in such areas as procurement, financial management and disbursement. A key consultant, the design integrator would assist RosHydromet during detailed project preparation and then later during implementation to ensure that a fully integrated national weather service is maintained.
4. Lessons learned and reflected in the project design
A number of Bank operations undertaken elsewhere as well as within ECA have highlighted the importance of institutional strengthening for ensuring sustainability of project results. Unsatisfactory completion of the technical assistance components of the Environmental Management Project in Russia showed that institutional strengthening is a prerequisite for the achievement ofproject development objectives. Based on this understanding a small but targeted institutional strengthening component has been designed and agreed with RosHydromet.
One of the key lessons learned from the Emergency Flood Recovery Project (EFRP) in Poland, which included a substantial component for hydrometeorological monitoring and early waming offlood events, was that ofthe significance ofa design and systems integrator involved from the very early stages of detailed project design and subsequently during implementation. In order to ensure coherent development it is essential that a “system” view ofdevelopments be maintained. The importance of this was underestimated during the implementation of the hydrometeorological component of the EFRP with the result that the hydrometeorological warning and monitoring system was implemented under a number of self-standing subcomponents. It is already apparent that some opportunities for cost savings were missed and, more importantly, there is a risk that the final system may not emerge as a seamlessly integrated entity. There were instances of sub-systems that when formally complete were not integrated, because the item that would close the gap had not been procured by either sub-system contractor. The existence of a systems integrator at the design and early implementation stages could have prevented such occurrences and would have ensured, for example, that a single visualization system was developed and integrated with all individual sub-systems. Accordingly, it has been
16 decided to engage a design integrator to ensure that all investments are coherent and are prepared so as to be efficiently and effectively integrated.
The value of emergency warnings cannot be measured in terms of technical accuracy only (Tajikistan - Lake Sarez). Their format and means of delivery clearly affect their usefulness. Moreover, what is an emergency in one community may not be in another, depending on local circumstances. For these reasons, translation of meteorological and hydrological data into degrees ofwaming to people at risk is best undertaken by agencies that have corresponding local knowledge and sociological expertise. The views ofthe ultimate recipients should be considered. For this reason, project monitoring will include not merely indicators of what information has been delivered by RosHydromet to its clients, but also ofwhat information has been received by citizens and how useful it is perceived to be.
Although any project with a high proportion of information technology investment will be driven by advances in technology, it is essential to maintain a systems design approach and to ensure that the choices made are the most appropriate and match the real requirements of the end user. There should be a consideration of future sustainability, primarily operation and maintenance costs. The modernized system should be affordable in light of the resources available for operation and maintenance so that systems are not over-specified, unsustainable in the long term.
5. Alternatives considered and reasons for rejection
A project focusing on upgrade of the observational network and down-scaling proposed improvements in computing capability was considered, but was rejected in light of global analyses that have demonstrated the preponderant importance of computing capacity, given a basic observational network such as that which the Russian Federation already has. A balance needs to be drawn between increasing computing resources and improving data availability.
An investment limited to the system's major computing and archiving facilities (those in Moscow, Novosibirsk, Khabarovsk, Obninsk and regional centers) was considered. This was rejected following discussions with RosHydromet and meetings with users' groups, who emphasized the great need to improve the quality of local forecasts, emergency warnings and specialized services. All of these are critically dependent on a strengthened observational network.
A project focusing essentially on computers and the observational network, but not including institutional strengthening, was considered. However, the Bank consensus is that to promote the sustainability of hardware investments and to assure that all their benefits were fully realized, it would be critically important to focus on institutional strengthening.
An investment designed as a simultaneous upgrade of all key elements of RosHydromet was considered, with the aim ofmeeting all the basic needs ofthe system for the near term, including rehabilitation of facilities at each key meteorological station and hydropost. This vision was rejected as beyond the Government's financial commitment to the project. It was agreed that project investments which raise the value of special services will enable a more comprehensive investment program to be undertaken by the RosHydromet. The project will, rather, provide a
17 “package” ofurgent investments useful virtually under any future development scenario and, in parallel, provide a means for experimentation with new, modern approaches that will contribute to identification ofa future, more holistic and comprehensive system design.
C. IMPLEMENTATION
1. Partnership arrangements.
The proposed project will be supported by bilateral arrangements with the National Oceanographic and Atmospheric Administration ofthe United States and possibly by a proposed GEF Project. These partnerships are at the design stage. The latter would influence detailed implementation ofthe Project.
Bilateral technical assistance. The US National Oceanographic and Atmospheric Administration (NOAA) has expressed interest in in cooperation with RosHydromet alongside project implementation, highlighting the importance of the Russian Federation in the global meteorological effort. In the course of project preparation, a joint Memorandum of Understanding between NOAA and RosHydromet has been developed to provide a framework for a range of activities, including among others some that are complementary to the activities proposed under this Project.
NOAA/NWS has experience and may provide assistance in technical support to development of hydrometeorological networks, data rescue of archived data, training of staff, and other issues. NOAA’s National Weather Service River Forecasting System (NWSRFS) is a software suite that ingests available information about a watershed (data from satellites, radars, river gauges, topography, snowpack, water content of snow) to produce hydrological forecasts under various assumptions, accompanied by probabilistic information and formatted for the requirements of several different kinds of decision makers. The NWSRFS is freely available; however, training in calibration and initialization ofthe system would be necessary.
For its part, NOAA is interested in joint work with RosHydromet on researching and improving the hydrological and meteorological models underlying the NWSRFS. In addition, NOAA is interested in the contribution of the Russian Federation to polar research; in particular, to the upcoming International Polar Year. RosHydromet’s monitoring of hydrological and meteorological variables in the Russian Arctic provides important support to worldwide weather forecasting and also to worldwide climate change adaptation. NOAA is also interested in working with RosHydromet on developing economic valuation methods applicable to meteorological services.
First, a set ofproposed investments would support RosHydromet’s efforts to take on a program of climate monitoring necessary for development of climate change forecasts. Due to Russia’s large size and history of scientific investigation, its data is indispensable for development of climate change forecasts accurate enough to support adaptation worldwide.
18 Second, a further second set of investments proposed for the GEF project would complement ongoing activities to promote adaptation for climate change. Issues that would be addressed may include the severe floods in the Russian Far East and North Caucasus in the last decade, permafrost weakening in Yakutia, and risk of drought in agricultural areas. During project preparation a few areas which are particularly vulnerable were visited, and preliminary discussions with local stakeholders and RosHydromet were held. For instance, in Yakutsk, discussions were held with the regional RosHydromet Department and Permafrost Institute, confirming that ongoing softening ofthe permafrost is a danger to the region's infrastructure, all of it designed on the assumption that the permafrost would remain solid.
RosHydromet aims to design investments in this proposed IBRD project to support and dovetail into the objectives of the possible GEF project. Among other contributions, the proposed IBRD project would invest in access to supercomputers for the institutes that carry out seasonal/climate forecasting, in data rescue and archiving to make historical data fully available, and in radiation balance measurements.
2. Institutional and implementation arrangements
Project implementation will be undertaken by RosHydromet. This approach reflects lessons from experience regarding project ownership and sustainability. There is a need for the immediate beneficiary to be actively engaged at all stages ofdesign and implementation. To achieve this, it is important that RosHydromet be prepared to commit an adequate share ofthe time ofrelevant staff solely to the project. It is intended that RosHydromet staff will be supplemented only by a small PIU and consultants in areas where the needed experience is missing or where an external objective view would clearly benefit the Project.
As part of the detail preparation a key consultant who will advise RosHydromet will be the design integrator. As noted in Section B.4, one of the important lessons leamed from other projects is that an experienced systems integrator may prove to be invaluable both during detailed design of the system and later in implementation. It is intended that such an integrator, with experience in modemizing national hydrometeorological organizations, would assist RosHydromet during detailed project preparation and then later during implementation to ensure that a fully integrated national weather service is maintained.
By Order #74 (dated April 23, 2004), RosHydromet established a Project Coordinating Council (PCC) for completion of the project preparation and its future implementation. In October 2004 by Order #137 (dated October 11,2004) this council was effectively transformed into the Project Management Committee (PMC). The Committee is headed by Mr. Bedritsky, the Head of RosHydromet, who is supported by two Deputy Chairman and by technical coordinators, senior officials from RosHydromet and other entities. The Chairman of the Committee has overall responsibility for project management, including approval of action plans, major activities and budgets. However, the Deputy Chairmen and technical Project Coordinators are responsible for making operational decisions, including management ofequipment procurement and installation, technical reviews, resolution of issues and supervision of activities. The Coordinators would jointly play a lead role during the final stages of project preparation, in particular development of technical designs in consultation with the technical staff. They will be directly supported by
19 Project Component Managers, members ofthe staff ofthe Bureau of Economic Analysis (BEA, see below) and by the design integrator.
During project implementation, there will be firther specification of the PMC’s functions, responsibilities and composition.
The PMC will be supported by the Bureau of Economic Analysis (BEA), an independent non- commercial legal entity that will serve as Project Implementation Unit (PIU) during the project’s implementation stage. This entity has extensive experience gained from managing several World Bank projects in Russia including those with large information technology procurements. BEA was competitively selected by RosHydromet and the Ministry of Finance (MoF) among existing PIUs in Russia for providing assistance to RosHydromet in the detailed preparation of the project. BEA assisted RosHydromet in detailed preparation of the Project. This work has been financed from a part ofthe resources (USD 1.3 million) ofEnvironmental Management Project, WB loan (3806-RU).
BEA has modified its Operating and Financial Manuals to adjust its administrative, operational, procurement and financial management procedures to meet project requirements. BEA employs qualified administrative, procurement, financial management and disbursement specialists, and has passed the Bank’s capacity assessment review. Both MoF and RosHydromet believe that the practical experience gained by BEA in detailed preparation of the Hydromet project is likely to render it well-suited for the role of PIU for the project implementation phase. Alternative implementation mechanisms - e.g., delegating implementation responsibilities directly to one of the existing RosHydromet entities - seem too risky at this stage and would inevitably lead to lengthy delays. None of the RosHydromet entities have the relevant experience to manage implementation of a World Bank project. However, the role of the PIU will be limited to procurement, financial and disbursement aspects of implementation, including operation of the Special Account, preparation and submission to the World Bank of claims for Special Account replenishment, and claims for disbursements of loan proceeds directly from the World Bank. All substantive decisions will be undertaken by the RosHydromet Project Coordinating Council and ,.other dedicated staff. To oversee and coordinate regional project implementation activities, Project Coordinators (additional to the Technical Project Coordinators described above) would be based in Obninsk, Novosibirsk, Khabarovsk and possibly in other regional implementation centers. These Project Coordinators will be members of RosHydromet staff or external individual consultants hired by BEA. In the latter case, salaries of the consultants will be financed from project finds.
3. Monitoring and evaluation of outcomes/results
Indicators of project success have been discussed with RosHydromet, which filly supports development of specific performance benchmarks to evaluate achievement of the project objective. Achievement of the project development objective would be measured principally in terms of improvement in the accuracy offorecasts, using a suite of statistical indicators standard in the meteorological community.
Achievement ofintermediate results would be measured in several ways:
20 Upgraded Computing and Archiving Capacity. RosHydromet’s computing centers would be able to run ensemble forecasts and forecasts at higher spatial resolution, on an operational basis. The principal infrastructure bottlenecks that constrain information transmission would be released. The response time for delivery ofinformation from RosHydromet archives would drop.
Increased Quality and Availability of Hydromet Data. Measurement networks would become more dense, and transmission ofdata to forecasts centers would become more certain. Sharing of data with the worldwide meteorological network would improve.
Improved Delivery of Forecasts and Warnings. Project success would also be measured by indicators of improved delivery of forecasts and warnings to the authorized authorities and the public. The project would monitor (a) the lead time provided to the Ministry ofEmergencies and other competent authorities notified by RosHydromet of dangerous conditions, and (b) the lead time ultimately provided to the general public.
Institutional Development and Financial Sustainability. The project would monitor indicators of implementation of an institutional strategy that should address operational management, growth in technical capacity, human resources management, compliance with applicable mandates, and financial management.
4. Sustainability
As noted in Section A.l, it is the policy ofthe Government to revitalize its contribution to world meteorology and to raise the level ofprotection from negative weather events for its own citizens and economy. The proposed project is similar to a concept set out by RosHydromet in 2003 to address this Government mandate. The present concept developed from the original mentioned above as the RosHydrometBank preparation team met with regional technical teams, international experts, the Ministry of Emergencies, various branches of the executive, users’ groups, and other stakeholders. It is our understanding that the revised project still hlly supports implementation of Government policies, having been adapted with the participation and agreement ofRosHydromet to the needs ofprincipal stakeholders.
Sustainability of project investments depends on adequate operation and maintenance of the whole of the RosHydromet infrastructure, new and old. It should initially be noted that, at whatever its level of funding in the past decade, RosHydromet has skillfully and effectively maintained its technical infrastructure, limited essentially by availability of parts and materials, as evidenced by the fact that equipment has lasted to the end of its depreciation cycle and far beyond. It appears that RosHydromet’s repair facilities can ensure that equipment will be maintained so as to reach the end of its potential lifetime, at least in the case of equipment that can be repaired domestically. Equipment that cannot be repaired domestically would, of course, not be sustainable unless financial resources are made available for maintenance and repairs. Sustainability of equipment and systems will be promoted when RosHydromet can systematically undertake life cycle management, including replacement of equipment within projected life expectancy.
21 As for public funding, we believe that public support for accurate prediction of weather and extreme events will be stronger in the hture than it has been in the past, because there is a better understanding in the Russian Federation today than there was in the 1990s of the importance of this function. It is also hoped that results ofthe joint RosHydromet-World Bank economic study to assess the economic benefits of reliable hydrometeorological services will adequately justify additional reallocation of public hnds into this sector. As for private funding, project investments will make RosHydromet’s contracted services more valuable. The project strategy is, therefore, to raise the economic value of RosHydromet’s contributions to the public and private sectors, to strengthen it in negotiations with both sectors for a level offunding that would secure not only operations and maintenance, but also a program ofongoing re-investment.
5. Critical risks and possible controversial aspects
The project’s overall risk is rated Moderate (M), according to the following considerations.
Risks Risk Mitigation Measures Risk Rating I With Mitigation To project development ot ective RosHydromet will be Clearly formulate the need for institutional L reluctant to embark on strengthening and communicate its benefits and large scale institutional risks to RosHydromet management
changes 0 Design a phased strategy for changes and initiate pilot testing to minimize risks and resistance to reforms
Strengthen RosHydromet capacity to effectively L RosHydromet will decline communicate to the government the economic I benefits ofhigh quality hydrometeorological services 0 Build broad partnerships, facilitate interagency and legislature support for the project
Deficient uptake of 0 Engagement ofcritical institutional stakeholders M warnings and forecasts: (such as the Ministry ofEmergencies and Ministry People, agencies and ofAgriculture) in project development tends to enterprises may not assure that the improved level ofinformation is respond appropriately to that which these agencies are prepared to act weather information upon. supplied to them. In pilot areas, the team will seek opportunities to increase benefits by enhancing the understanding ofpeople and enterprises, and disseminate lessons learned.
Information supplied by 0 Monitoring in pilot areas will aim to uncover M RosHydromet may not be bottlenecks and to test regulatory approaches or
22 passed onward as warnings changes in the charter ofentities as needed to in the most effective way clear them. Complexity ofupgrade 0 Condition project on availability ofRosHydromet M may result in missing links staff to assure integration ofnew equipment and in final system systems. 0 Engage system integrator
Lack ofRosHydromet 0 RosHydromet staff will be complemented by M experience in small PIU qualified in procurement, financial implementing WB project management and disbursement may lead to large delays 0 Ensure RosHydromet staff receive maximum training possible
Operation and maintenance 0 Detailed design and procurement specifications M ofnew equipment will not will take into account hture O&M costs over a be affordable time horizon and ensure these are matched with available funding
Procurement oflarge 0 Team includes IT and procurement specialists to H computer systems and address this issue other IT components will be slow or deficient Risk ratings: L - low, M - moder: :, H -high
6. Loadcredit conditions and covenants
Conditions of Negotiations: (a) Chairman ofPMC, Deputy Chairmen, Technical Project Coordinators are nominated by RosHydromet and functioning as Project Management Committee (PMC); (b) Procurement Plan has been agreed for the first 18 month ofimplementation; (c) Operational PIU at the Bureau ofEconomic Analysis; (d) Modifications made to parts ofthe BEA (PIU) Operational Manual that are relevant to the project implementation have been finalized according to the standards ofthe Bank; (e) A financial management system has been set up and is operational at the PIU in accordance with Guidelines acceptable to the Bank.
Conditions of Board Presentation: (a) Bidding documents for procurement ofsupercomputers and RFP for design documents for refurbishment for the first year ofthe project implementation are designed and cleared. (b) Project Operational Manual is adopted by the Project Management Committee. (c) RosHydromet Order concerning the Capacity Building Program is issued and provided to the Bank.
Condition of Effectiveness: The Agency Agreement has been entered into between the MOF, RHM, and BEA.
23 Condition of Disbursement under Category 5: RosHydromet shall approve a Capacity Building Program Manual acceptable to the Bank for managing the Capacity Building Program.
Financial Covenants: The PIU will maintain a financial management system acceptable to the Bank; The project financial statements, Statements of Expenditure (SOEs) and SA will be audited by independent auditors acceptable to the Bank and on terms of reference acceptable to the Bank; The audited annual statements and audit report will be provided to the bank within six months ofthe end ofeach fiscal year.
D. APPRAISAL SUMMARY
1. Economic and financial analyses The Bank and RosHydromet have completed the first phase of a pilot study aimed at evaluation of economic benefits of the project and of hydrometeorological information in general for Russia's people and economy. The study was undertaken with the participation of experts from the principal weather-dependent sectors of the economy of the Russian Federation. The Chief Economist of NOAA contributed to the development of the methodology for the study and participated in the workshop with stakeholders. Preliminary results ofthe study indicated that the improvement in the quality and lead time of the weather forecast that is reasonably expected to follow project implementation will have a very substantial positive economic and social impact, one that may be estimated in light ofthe following:
0 Direct losses caused by unfavorable weather and hydrological conditions and disasters annually would decrease by 8.5 percent on average. The sector that is most sensitive to quality ofweather forkasts and wamings is that ofmunicipal services and city economy, where annual losses caused by unfavorable weather would be expected to decrease by 12 percent over the lifetime ofthe project.
0 The project team undertook a critical review of the validity of available estimates of losses to Russia's national economy due to extreme weather events, collecting additional information on sectoral losses, flood losses and undertaking cross-country comparisons. The team concluded that direct average annual economic losses are likely to be in the range USD 1 - 2 billion.
0 The total annual economic effect of the project, according to these estimates, would be USD 70-150 million. If similar economic effects were sustained over seven years (a conservative estimate in light ofthe assumptions made), the near-term economic effect of the project could be in the range of USD 480-1,000 million, far exceeding project costs. This means that the economic viability (economic efficiency) of the project (at the investment project cost ofaround US$llO million) stands at 1:4.5 - 1:lo. In other words, every US dollar used towards RosHydromet's modernization will help to avoid from US$5 to US$lO losses to Russian economy. Though substantial, this level of expected
24 benefit is in line with recent estimates that for every $1 spent for mitigation in natural hazards there is an $8 reduction in economic losses (Worldwatch Institute, 2001).
No financial analysis was carried out for this public sector investment; it is not expected that RosHydromet entities will generate profit from the project investments.
2. Technical
The design of the proposed project supports the Government strategy for reestablishment of RosHydromet. (i)It supports the goal of re-establishing RosHydromet as one of the premier national weather forecasting services providing accurate and timely weather forecasts at global, regional and local scales. (ii)It supports the Government’s objective of assuring that RosHydromet deliver on the Russian Federation’s obligations resulting from membership in WMO as well as other relevant international treaties signed and ratified by the Government. (iii) It will help to reduce economic losses caused by extreme weather events, by providing forecasts that can be used in decision support to mitigate risks and damage. (iv) It will likewise help to prevent avoidable loss oflife.
As weather prediction is a shared global enterprise, international standards for meteorological services are relatively well-established. These include standards for the quality of data gathered by the national instrument network, standards for the format and timely delivery of data to the global data-sharing system, treaties defining the minimal role of various nations within the overall system, and widely-used definitions of accurate forecasting. Project investments will be guided by these standards, however they will also take into account the specificity ofthe Russian weather forecasting and monitoring system. A significant portion of loan funds will procure meteorological and hydrological instruments that will be compliant or at least compatible with WMO standards. The loan funds will also support the Russian Federation in assuring that data collected by its network are formatted and delivered in as timely a manner as possible, first to the national authorities and the public to help avert economic losses, and also to the international data-sharing system in accordance with international conventions. The overall priority of project investments, including supercomputer procurement, has been defined with the specific aim of measurably improving forecasting accuracy. Internationally recognized measures of hydrometeorological system performance will be used as monitoring indicators of project success.
3. Fiduciary
The financial management assessment concentrated on BEA (PIU) and the link between RosHydromet and BEA. Cooperation between RosHydromet, experienced in operating issues, with the PIU, experienced in the World Bank procedures, will significantly mitigate fiduciary risks because the strengths of one organization overlap with the weaknesses of the other. All operating issues will be under the control of RosHydromet, while BEA will be responsible for the hlfillment ofWorld Bank procedures.
Taking into consideration the assessment ofthe financial management systems and processes and the assessment of risks and mitigating measures, the financial management arrangements for BEA as an Entity and for the Project, BEA is considered capable of satisfactorily recording all
25 transactions and reconciling balances, supporting the preparation ofregular and reliable financial statements, safeguarding the entities’ assets, and is subject to auditing arrangements acceptable to the Bank. BEA has a financial management system that is being adjusted to meet the project peculiarities. The financial management arrangements for the Project will meet Bank requirements. This would be easy to achieve taking into account that these arrangements are being tested now in the implementation of preparation stage of the Project financed from the Environmental Management Project (RU-3 806).
BEA has implemented Bank projects in the past. It is currently implementing two projects, and has well-developed internal control procedures, accounting and reporting systems in place. The cash flow arrangements are in place for Project fund inflows, which will include inflows from IBRD and from the Federal Government. BEA is ready to start the Project.
The arrangements for procurement have been defined and agreed. A Procurement Plan has been developed and agreed between the Borrower and the Bank.
Internal policies related to IBRD and federal funds have been drafted by BEA. The project will be staffed by existing BEA financial management staff. BEA staff is experienced with Bank procedures. The format ofthe FMRs has been developed, discussed between the Bank and BEA and agreed upon.
The financial part of the quarterly FMRs for the National Hydromet Modernization Project Preparation Component financed out ofthe Environmental Management Project Loan 38060-RU (in the amount ofUSD 1.3 million) will include:
(a) Project sources and uses offinds statement, (b) Statement ofexpenditure detail, and (c) Notes to the FMRs.
The financial part of the annual FMRs for the National Hydromet Modernization Project Preparation Component financed out ofthe Environmental Management Project Loan 38060-RU (in the amount of USD 1.3 million), which will be subject to audit by independent auditors acceptable to the Bank and according to the Terms of Reference acceptable to the Bank, will include:
(a) Project sources and uses of funds statement, (b) Statement ofexpenditure detail, (c) Special account statement, (d) Statement ofExpenses (SOE) withdrawal schedule, and (e) Notes to the FMRs.
The financial part of the quarterly FMRs for the National Hydromet Modernization Project will include:
(a) Project sources and uses offunds statement, (b) Statement ofexpenditure detail,
26 (c) Physical Implementation Progress Report (contract management), and (d) Notes to the FMRs.
The financial part of the annual FMRs for Hydromet project, which will be subject to audit by independent auditors acceptable to the Bank and according to the Terms ofReference acceptable to the Bank, will include:
(a) Project sources and uses offunds statement, (b) Statement ofexpenditure detail, (c) Special account statement, (d) Statement ofExpenses (SOE) withdrawal schedule, and (e) Notes to the FMRs.
BEA will supply the Bank with quarterly FMRs and annual audited FMRs. In addition to FMRs, BEA will submit to the Bank annual audited Entity IFRS reporting.
Disbursement ofIBRD funds will be through the traditional disbursement mechanisms, including Special Account, Summary Sheets and SOEs, direct payments, Special Commitments covering Letters of Credit, and guarantees. The federal funds will be disbursed through a co-financed account managed by the BEA (PIU). The project will not use the FMR-based disbursement.
4. Social
The project aims to increase the protection from extreme weather events to people living in vulnerable areas through improved forecasting by RosHydromet. It aims to do this by technical measures that will improve lead time and accuracy of forecasts, flood prediction, and also through adoption of streamlined information delivery techniques that will close the gap between technical information delivered by the agency versus information assimilated by users.
In terms of non-emergency services, the project will provide an opportunity for RosHydromet to undertake a revision of its user-services strategy. At present, RosHydromet services are largely governed by the requirements of Government users, companies large enough to define their own weather risk (and pay for special services to limit it), audiences of the Government’s media outlets, and populations perceived to be at risk. In addition, existing stations serve a valuable social purpose, especially in the remote areas of the Russian Federation, though possibly at an unsustainably high cost. Future benefits should clearly be aimed at a combination of free services, paid services, and services financed by cost-sharing with local and regional governments. Achieving an equitable balance among these services should be an issue addressed by RosHydromet within the scope of the project, through its dialog with the Government and with other stakeholders. A clear message that emerged from meetings with a range of stakeholders is that the proposed investments will increase the value of services to a broad range ofpublic and private users.
27 5. Environment
The project poses minimum environmental risks. The proposed project does not involve any new construction or major refurbishment works; all facilities where works will occur are currently used by RosHydromet. Moreover, the project will provide great environmental benefits, since it will support in mitigating natural hazard risks and in improving of observations for environmental management. A comprehensive hydrometeorological system coupled with a strong agency responsible for its operation and maintenance will lay a foundation for reducing the risks associated with floods, drought and fire, winds, extreme weather events and even industrial accidents. It is expected that the project implementation will have a significant effect on enhancing the livelihoods particularly of the poor fractions of population by reducing vulnerability to environmental change, flooding and also routine weather contingencies that can affect marginal livelihoods such as small enterprises and farms.
6. Safeguard policies
Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.0 1) [XI [I Natural Habitats (OP/BP 4.04) [I Pest Management (OP 4.09) [I Cultural Property (OPN 11.03, being revised as OP 4.1 1) [I Involuntary Resettlement (OP/BP 4.12) [I Indigenous Peoples (OD 4.20, being revised as OP 4.10) [I Forests (OP/BP 4.36) [I Safety ofDams (OP/BP 4.37) [I Projects in Disputed Areas (OP/BP/GP 7.60)* [I Projects on International Waterways (OP/BP/GP 7.50) [I
Safeguard Policies Classification: [ 3 S1 [XI S2 [IS3 [ ] SF [ 3 TBD (to be determined)
Environmental Assessment Category: [ ] A [ 7 B [XI C [ ] FI [ 3 TBD (to be determined)
Attention will be given to inclusion of relevant standard environmental guidelines in bidding packages for the civil works associated with the refurbishing of existing buildings as well as for the installation of new equipment. Likewise, attention will be given to ensuring safe handling and disposal of construction solid waste, debris and dysfunctional IT equipment. The standard environmental guidelines dictated by the Russian EA procedures have been incorporated in the BEA (PIU) Operational Manual. A full understanding is reached with RosHydromet officials and BEA on the importance to deal with environmental issues and the need for their mitigation should they be identified in the course ofproject implementation.
* By supporting the proposed project, the Bank does not intend to prejudice the$nal determination ofthe parties' claims on the disputed areas
28 7. Policy exceptions and readiness
The project has requested and received one exception from Bank policy (see below), and excepting this complies with all applicable World Bank policies. The Project Team has requested and received a blanket waiver prior to the start ofthe project concerning eligibility requirements for hiring of Government-owned enterprises or institutions in the Borrower’s country and institutions partially funded by the Beneficiary (relating to para. 1.11 of the May 2004 Guidelines). OPRC discussed and agreed with the proposal for a period ofthe first two years of the Loan, subject to close monitoring of the procurement process and supervision of contract implementation. A recommendation was made that the first few contracts procured based on this waiver should, in fact, be subject to Prior Review. The basis for the waiver would be reviewed two years after Project effectiveness.
HIRING OF GOVERNMENT-OWNED ORGANISATIONS, ORGANISATIONS and INDIVIDUALS AFFILIATED WITH OR PARTIALLY FUNDED BY THE BENEFICIARY. Many of the Consultancy assignments related to the success of the project are dealing with highly specialized fields of expertise related to hydrometeorology and weather forecasting and their success and relevance will depend not only on an in depth knowledge and experience ofthe field concerned but also on an understanding ofthe situation in the Russian Federation. As such, these are specialized areas where various research institutes and entities, subordinate or reporting to the Beneficiary (RosHydromet), and partially funded by the Beneficiary, Federal, or regional budgets, possess unique qualifications and experience. Private sector is not well developed in this field due to lack of a market and the fact that the bulk of available funding for this work comes either directly from the Beneficiary or from federal and regional budgets on a non- competitive basis. At appraisal, an initial non-exhaustive list ofInstitutes whose elimination from participation as government-owned or funded entities would undermine the chances for achievement of the overall project development objective, seriously decrease the quality of the project implementation and threaten its entire success. Following is the initial list of entities that have been identified within the “system” of RosHydromet although the formal relationships, legal status and level offunding vary. The list may be added to, as appropriate, during the course Implementation: Scientific-Industrial Company “Typhoon”; Main Geophysical Observatory “named after A.I. Voeikov”; Institute for Applied Geophysics named after Academician Ye.K. Fedorov ; State Hydrological Institute; Central Aerological Observatory; Mountain Geophysical Institute; Arctic and Antarctic Scientific-Research Institute; All Russian Scientific-Research Institute ofHydrometeorological Information (World Data Centre; Institute for Global Climate and Ecology of RosHydromet and Russian Academy of Sciences; Scientific-Research Centre ofSpace Hydrometeorology “Planeta” Hydrometeorological Scientific-Research Center ofthe Russian Federation; RosHydromet Main Computing Center; RosHydromet Main RadioMeteorological Center.
29 The following assignments have been identified which would benefit from the services of these entities or individuals employed by these entities on the understanding that no entity (or individual) will appear on a shortlist for any assignment where it is the direct beneficiary of the outputs ofthe assignment. Detailed design ofpilot hydrological networks; Detailed design ofpilot meteorological networks; Support to defining detailed technical specifications; Development ofa regulatory framework for RosHydromet; Development ofinnovative approaches and institutional alternatives; Development (and porting) of specialized software for weather an hydrological modeling and forecasting; Development (and porting) of specialized software for archiving ofhydrometeorological data; Specialized training activities. Consultants for assignments under above mentioned activities will be selected using QBS or CQS methods or as Individual Consultants put forward by these Institutes. Short lists will be composed on the basis of expressions of interest submitted in response to advertisement of each such assignment in the national press. As the assignments will each be below the threshold of US$200,000 short lists will comprise only these national entities or individuals from the agreed list of entities. In justifiable cases, with the prior agreement ofthe Bank, single source selection will be used. As it is hoped a private sector will emerge and develop over the course of the Project it is expected to review this arrangement after the first two years of Project Implementation.
30 Annex 1: Country and Sector or Program Background RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
The Russian Federal Service for Hydrometeorology and Environmental Monitoring (RosHydromet), celebrating its 170-year anniversary this year, is one of the world’s oldest meteorological organizations. Since its creation, this agency has traditionally played the role of principal provider of public services to Russia in protecting lives and property from dangerous weather events.
In addition, RosHydromet has important global responsibilities. The first is for data: because of Russia’s size, its observational networks supply a significant share of the meteorological data used as the basis for the world’s daily weather forecasts. The second is for research and computation: the Moscow World Meteorological Center is one of three worldwide centers that are charged with computing and distributing daily global forecasts to initialize the world’s regional weather models; the Russian Federation’s Obninsk archive is a World Data Center; RosHydromet’s regional centers at Khabarovsk and Novosibirsk are charged by the WMO with world leadership in specific areas of forecasting; the Main Geophysical Observatory is a World Radiation Data Center. The third area of responsibility is communications infrastructure: the system that supports national forecasters worldwide incorporates Moscow as a hub.
The realities of economic transition from central planning to a market economy in Russia have brought new challenges to the functioning and, at times, even survival ofthe agency. As a result, the capacity of RosHydromet to provide services to Russia and globally has steadily declined. The main objective ofthe project is to restore this capacity by modemizing key elements ofthe RosHydromet technical base and strengthening its institutional arrangements. A brief description of the sector and its issues is presented below.
RosHydromet’s mandate, major functions and structure
RosHydromet is the public service charged by law with reducing danger to life and damage to the economy resulting from weather and climate-related events. The main objectives of the agency, according to the Federal Law on Hydrometeorological Service (#113-FZ dated July 19, 1998) and govemment regulations, are formulated by RosHydromet in the following manner:
Timely and high-quality provision to the govemment authorities, the population, armed forces and industries with hydrometeorological, solar and geophysical information, as well as data on environmental pollution; Development of the public system of observation, assessment and forecasts of pollution levels ofair, inland surface water, inland seas, the shelf, and outer space; Stimulation ofa higher efficiency of economic activities in weather-dependent industries (aviation, marine and river transport, energy, agriculture, etc.) by means of providing broader meteorological and climatic products and custom-tailored services; Development of avalanche-management and hail-prevention services, and technologies ofactive impact on meteorological and geophysical processes;
31 0 Support and development ofresearch in the fields ofmeteorology, hydrology, solar and geophysics, environmental pollution monitoring, active impact on meteorological and geophysical processes; 0 Evaluation and forecast of climatic change and climatic (agro-climatic, surface water, wind and solar energy, etc.) resources in Russia; 0 Maintenance of a Unified State Fund ofhydrometeorological, oceanographic and geophysical data on the environment and its pollution, and improvement in data archiving technologies; 0 Active participation in the global international exchange ofhydrometeorological data and support to the functions ofthe Global Meteorological Center ofthe World Weather Watch in Moscow and Regional Meteorological Centers in the cities ofNovosibirsk and Khabarovsk.
RosHydromet monitors atmospheric variables, including air quality; hydrological variables and water quality; and soil characteristics. It produces daily weather forecasts, flood and storm warnings, seasonal forecasts, drought monitoring reports, agrometeorological forecasts, projections of climate change, general ocean circulation models, ambient pollution variables. In line with its mandate RosHydromet disseminates basic hydrometeorological data, weather forecasts and emergency warnings to all agencies and the public. RosHydromet’s financing reflects a European approach, in which government agencies engaged in weather forecasts are allowed to sell their products to the clients. This process is regulated by the Government Resolution “On Information Services in Hydrometeorology and Monitoring of Environmental Pollution” (#1425 dated November 15, 1997).
RosHydromet was established and currently functions as a single, vertically-integrated national agency built around nationwide observation networks designed and operated in accordance with unified principles. Data from observation sites is usually collected in RosHydromet centers in the 89 administrative units of Russia (Subjects of the Russian Federation). These centers are subordinate to 23 regional RosHydromet branches (UGMS) providing a full range of hydrometeorological , services to regional clients. An organizational chart showing the main RosHydromet entities is presented as Figure 1.
RosHydromet has its Headquarters in Moscow. Its lead research institutions such as the Main Geophysical Observatory and the State Hydrological Institute in St. Petersburg and, the World Data Center in Obninsk are collecting, generalizing and submitting data and forecasts on a national basis. Jointly with RosHydromet, research institutes are responsible for methodological guidance ofnetwork operation, including monitoring principles, site selection, the observational program and its frequency, reporting formats, procedures and timing. There are established procedures for data submission to concerned authorities in case of dangerous weather conditions and emergency situations.
During the transition period, the number of RosHydromet staff dropped considerably (from 58,800 in 1992 to about 36,000 in 2003); however, it is still the second largest meteorological organization in the world after the Chinese meteorological service. The large number of employees corresponds to the fact that the area area of Russia is 17 mln km2 (China - 9 mln h2),and all measurements are made by observers; almost no operational data are collected by
32 automatic stations. RosHydromet research institutions employ over 5,000 people at present. These research institutions have historically been very strong, and their traditions have been maintained to the extent possible during the transition. Nevertheless, the research capacity of RosHydromet has considerably degraded due particularly to severe underfunding and migration ofthe most qualified workforce to better-paid sectors.
RosHydromet’s 2003 budget was 2.22 billion rubles (US$76.6 million) including 1.53 billion rubles (US$52.8 million) from the federal budget. The Federal budget allocation for hydrometeorological services, which was 0.29 percent of the total federal budget in 1993, was only 0.09 percent in 2002. Over 74 percent of overall funding was spent on remuneration of staff. In 2003 the salary was increased by 40 percent, but even after that increase the average monthly salary is not reaching US$150. Communications costs, communal payments, fuel, consumables and food supplies for remote stations consume a further 21 percent oftotal funding, leaving about 5 percent for all other items, including construction and procurement of new equipment. In order to compensate for the deficit of federal funding, from 1992 onward the government has allowed RosHydromet to charge clients for “specialized services.” At present, the share of RosHydromet’s income derived from provision of specialized services to federal, regional, municipal and sectoral clients, media and private companies is about 25 percent. These eamings are a crucial source offunding for RosHydromet’s continued operations.
The main issue that RosHydromet now faces is that its capacity to provide hydrometeorological services in Russia and globally has been steadily deteriorating. This deterioration is primarily the result of lack of investment in modem technology, together with ongoing degradation of the observational networks. From 1994-2000 the budget funding received by the agency varied from 28 percent to 41 percent of the funding needed for regular operation, a shortfall that eventually required the closure of about 30 percent ofRosHydromet’s surface data collection stations. The stations that are still open record a more limited set of parameters, less frequently, using instruments that are aging and failing. Of its former network of 130 upper-air stations, RosHydromet has been forced to close about thirty and scale back launches at others, because the daily launches are beyond the system’s budget. The overall design of hydrometeorological system and its main observation networks, as well as its main principles of operation, were developed by the mid-1970s and have not changed much since then. Nearly all observations are made manually by staff located and living in the field. Automatic and semi-automatic devices are very rare and virtually unused in routine data collection. Poor communications capability is a universal problem for the system. In general, communication of data from monitoring stations is expensive, unreliable and labor- intensive. The ability to communicate products to clients is also an issue, due to the lack of high- speed transmission capabilities where they are most needed. Other infrastructure (e.g., buildings) is in very poor condition throughout the country. The working conditions of staff in the operational programs are poor and have an effect on RosHydromet’s ability to hire and retain staff at these locations.
33 Figure 1: ROSHYDROMET STRUCTURE
Central Apparatus - I Science-Research Institutions
Military Services
Scientific-Industrial Company Skills Upgrading Institute for “Typhoon” RosHydromet Leading Employees
Main Geophysical Observatory Hydrometeorological Technical n.a. Voeikov Schools and Moscow Hydrometeorological College Institute for Applied Geophysics
State Hydrological Institute “Hydrometeoizdat’’
Middle-Siberian Hydro-Chemical Institute Publishing Center “Meteorology and
State Oceanographic Institute Federal State Unitary Enterprise Central Aerological Observatory “Hydrometpostavka”
Mountain Geophysical Institute Federal State Unitary Enterprise
Arctic&Antarctic Scientific- Research Institute Federal State Unitary Enterprise “Offset Printing Factory” All-Russian Scientific-Research Institute of Hydrometeorological Federal State Unitary Enterprise Information -World Data Center “Zonde-Postavka”
All-Russian Scientific-Research Day-to-Day Production Center for Institute for Agncultural Meteorology Information Technologies
Institute for Global Climate and Ecology of RosHydromet and Russian Academy of Sciences
Far-East Regional Scientific- Research Hydrometeorological Institute “Hydrometeoflot”
Siberian Regional Scientific- Research Hydrometeorological Institute
Scientific-ResearchCenter of Autonomous Non-Commercial Space Hydrometeorology - Enterprise “Center for Climate “Planeta” Projects ofJoint Implementation”
Central Design Bureau of Central Design Autonomous Non-Commercial Hydrometeorological Instruments Bureau Branch - Enterprise ”Agency of Atmosphere i Technologies ” Caspian Sea Scientfic-Research Russian State Museum of Arctic and Center Antarctic
Hydrometeorology and Environmental Environmental Observatories RosHydromet has made an outstanding effort to make best use ofavailable computing resources, but today it is greatly out-powered by analogous international centers. As a result, protection against weather hazards afforded to Russian citizens is significantly less than that technically possible given the capabilities and achievements of Russia’s forecasters. For instance, the percentage ofdangerous weather events not predicted by RosHydromet compared to all recorded dangerous weather events increased from 6.1 percent in 1994 to 23.1 percent in 2001. The net effect of the lack of investment has been a gradual falling-behind of the Russian Federation compared to other comparable economies in capacity to provide usefil prognoses of weather hazards with adequate lead time to allow mitigation of risks. Weather forecasts are too short; seasonal forecasts too uncertain; drought monitoring and flood monitoring are weak.
Beyond hardware issues is the fact that RosHydromet, which has been working for the last decade in “survival mode,” still lacks a long-term institutional development perspective and strategy for adjustment to the realities ofa market economy. Such a strategy is required to ensure RosHydromet’s sustainable fimctioning and to lay a basis for renegotiated relationships with sectoral and governmental clients on the federal, regional and municipal levels.
Data collection
The state hydrometeorological observation network forms the backbone of the hydrometeorological service of Russia. RosHydromet operates several thousand meteorological, agro-meteorological and hydrological stations, a radar network, air and water quality monitoring, climate change research, and so on. As of January 2004, the hydrometeorological network comprised 1626 meteorological stations, 3044 hydrological posts and stations, 104 upper air stations, 1049 agrometeorological stations, 233 evaporation stations, 627 urban air pollution monitoring stations, 2208 surface water pollution monitoring sites, 534 snow pollution sites and a number of other more specialized networks. Hydrometeorological observations are carried out in accordance with national regulatory technical documents, which in turn are consistent with the WMO regulatory documents (specifically, WMO Manual No. 8 on Meteorological Instruments and Observation Methods). Compliance with national metrological requirements as formulated in the Federal Law on Uniformity of Measurements is ensured by the Central Methodology Commission of RosHydromet, which is responsible for issuing certificates authorizing the use of instruments, technical means, technologies and methods in hydrometeorology.
The hydrometeorological network is currently equipped with about 48,000 measuring instruments of 66 different types, and 335 standards are in use for periodic calibration and verification of instruments. However, a major proportion of these instruments and standards are already not meeting routine requirements for data collection because regular replacement of most part of equipment and instrumentation has not taken place in the last 10-12 years. More than 80 percent of the instruments have been in operation for more than eight years, the nominal service life of the majority ofthe instrumentation.
Surface stations. Surface meteorological and hydrological stations are important inter alia for local weather forecasts, flood forecasts and regulation of water resources. According to their specializations, the stations record precipitation, temperature, pressure, humidity, wind velocity,
35 solar radiation and other elements ofthe radiation balance, soil moisture, evapotranspiration, and other elements ofthe water balance, snow depth, water content of snow, water levels and river flow, water quality and other hydrological variables, and so on. From the mid-1970s to the end of 1980s the surface network was stable, though as noted above, since 1987 it has declined (in the last ten years alone by about 30 percent) due to financial difficulties. Currently the network is broadly divided into several categories. Baseline meteorological stations (about 900 stations) participate in global daily data exchange. Additional specialized networks are in some cases partially co-financed by Subjects of Federation or other RosHydromet clients. While the station distribution remains somewhat dynamic, an indicative distribution of meteorological stations is provided as Figure 2.
Figure 2. Distribution of Surface Meteorological Stations (indicative).
Empty circles represent stations of international exchange, solid circles represent stations reporting on climate change.
As noted above, the observational networks and operational procedures developed in the 1970s are based on use of observers located in the field. The existing equipment is old, obsolete, and labor-intensive to use and maintain. In some cases the prescribed equipment is no longer procurable (e.g., mercury barometers). In many countries, the type of equipment used by RosHydromet has been phased out and replaced with more modem and flexible equipment (e.g., electronic digital barometers) that allows for the continuous monitoring and recording of data. Automatic and semi-automatic devices are very rare in the RosHydromet due to their high cost, and barely contribute to routine data collection. The few attempts made so far to employ automatic equipment in the networks ofvarious regional branches have not been very successful, due to the high operating and maintenance costs, lack ofcompatibility with the existing network
36 design and established operational procedures, the system’s poor communication channels, and destruction ofequipment by intruders.
Support of observations at remote or “difficult-to-access” stations is a particular problem for RosHydromet. There are about 290 remote stations located in northern, eastern and mountainous regions, most ofwhich are critically important for weather forecasts. In certain regional branches (e.g., Chukotka and Yakutsk) more than a third ofsurface stations are in this “difficult-to-access” category. About 1,400 observers live year-round at these remote stations, whom RosHydromet is obliged to fully support if observations are to be continued. For comparison, only one station based on a similar ‘‘full support” principle is operated by the Meteorological Service of Canada (MSC). Other remote stations use automatic equipment that is periodically maintained and calibrated. MSC also has partnership arrangements with other organizations to sustain a “hll support” operation.
The hydrological network of Russia needs a massive modernization. In every region visited by the project preparation team, flooding and associated damages were top priorities of regional stakeholders and RosHydromet authorities. They said that the performance of the hydrological monitoring network was low and declining, and that the timeliness and density of stream gauge data was insufficient to provide a basis for accurate and timely flood forecasts using current methods. Automatic gauges, sensors and data loggers are very rare. In many river basins, a significant number of hydrological posts have been closed. In addition, in some flood-prone basins hydrological posts destroyed by major floods have not been restored (Fig.3).
In most areas, and particularly in mountainous regions, the timeliness arid density of stream-level data are insufficient to provide useful flood forecasts. The manual method ofdetermining stream height that is universally used by RosHydromet is error-prone at best (besides posing occupational safety issues for staff who make the measurements). The lack of reliable 24 hour communications for the existing programs seriously constrains the timely availability of data in potential flood situations.
These issues should be addressed as priorities, especially when it is taken into account that economic losses from floods in Russia presently average USD 1-1.4 billion annually (Cherepansky 2000, Vorob’ev, et. al, 2003). Like RosHydromet’s other programs, the hydrological network needs to be reviewed as a whole and a strategy developed to modernize the basic observing infrastructure. Investing in the status quo is not a sustainable long-term solution. Modern stream level gauges and data loggers will open the door to a variety of communications options and can provide much more data quickly and accurately.
37 Figure 3. Hydrological Network - North Caucasus Btack triangles are existing hydrological posts, white triangles -posts destroyed by thefloods
Upper Air Radiosonde Stations. Data from balloon-borne radiosondes that probe the upper atmosphere is an important input to numerical weather forecasting. A cooperative international network comprising about 1000 stations launches weather balloons daily. The international standard is for twice-daily launches, one at 0:OO Coordinated Universal Time (UTC) and another at 12:OO UTC. Over a period of about 90 minutes, each balloon rises to about 30 km above the surface of the earth, carrying a package of instruments that measure temperature, relative humidity, and sometimes pressure. At about 30 km above the earth’s surface, atmospheric pressure is so low that the balloons - now greatly inflated - burst, and the packages fall to the ground. Data from all stations participating in the worldwide simultaneous launch is then promptly exchanged, via a relay that has been organized by the WMO. Russia is one of three countries in the hub of hubs of this relay, the other two being the United States and Australia (Figure 4). Positional information on the moving balloons yields an estimate of wind speed. Receivers on the ground stations communicate with the balloon-borne sensors to record meteorological variables and balloon locatiodwind speed.
38 GTS Main Telecommunication Network
Figure 4. Schema of the topology of the worldwide meteorological data-sharing network
Radiosonde data serves as one of the principal inputs to global weather forecasts, which in turn serve as the starting point for nested regional and local forecasts. As a result, the density of this network is a potential limitation on the value of forecasts. Russia has historically maintained such a network, operating about 130 of the world's 1000 stations. Since the transition began, Russia has made an immense effort to maintain its network ofsounding stations. The difficulty is that each launch costs about US$lOO in expendables alone, ofwhich about US$50 is the cost of the radiosonde (the rest covers the balloon, the hydrogen and the power consumed by the receiver). To save money, RosHydromet has closed or conserved about 30 stations, most located in remote northern areas, and has reduced the number of daily launches from two to one at some stations. The upper air network as it stands today is shown in Figure 5.
Figure 5: Upper-Air Sounding Network of the Russian Federation
39 Most ofthe receivers now used in Russia are now well beyond their nominal lifetimes. The aging receivers are expensive to maintain, and some spare parts are supplied today only by cannibalization of the already-closed stations. The techniques of hydrogen generation used for balloon inflation are also obsolete, labor-intensive, unsafe for the staff, and characterized by a tendency to pollute the environment. In the short term, RosHydromet’s chief concern is to keep down operating costs. The priority is the high cost ofmaintaining the existing stations, which are energy- and labor-intensive, filly depreciated, and for which spare parts are no longer manufactured. In future, RosHydromet would like to replace about 10- 12 receivers per year. The proposed investment would jump-start this reinvestment program by replacing about 30-40 receivers.
Radar. Russia currently has an array of about 60 meteorological radars dedicated to storm detection. The radar array is concentrated; for example, the Moscow region alone is protected by three radars. The radars in the national array belong to an older generation, detecting clouds but not measuring wind speed as Doppler-capable radars do. The lack of meteorological Doppler radar seriously limits the capacity for detection of convective storms with precipitation. Real- time observations of the approach of such storms would offer very useful protection, allowing RosHydromet to issue needed warnings. In addition, conventional radar can give the hydrologist quantitative precipitation data that could vastly improve the ability to forecast flooding. RosHydromet’s radar deployment strategy focuses on densely populated areas affected by convective storms. There is a need to protect the other large urban areas, as well as populated coastal areas in the Black and Japan Seas that regularly suffer from intensive convective storms
Satellite ground stations. RosHydromet operates several major ground stations that download data from the Russian Meteor system and NOAA’s TIROS-n satellites, from the Advanced Very High Resolution Radiometer (AVHRR) and TIROS Operational Vertical Sounder (TOVS) sensors. Satellite data have the potential to fill in some of the gaps in the surface network. The major problem to be resolved at RosHydromet’s receiving stations is that they are unable to download the growing volume ofrelevant satellite imagery, mainly because the receivers belong to an older type that cannot download digital data. Satellite images are already valuable for fire- spotting, pollution monitoring and drought monitoring, and are becoming increasingly more valuable as work is done to calibrate satellite images with field data and use of modeling techniques allows sub-pixel accuracy to be established. The calibration will never be perfect; for example, the weather satellites transmit images that are in general resolved at twenty five hectares per pixel. However, methods of making the most of available data are under development.
Data processing, archiving and forecasting
Data collected at hydrometeorological observation stations is transmitted to district or oblast centers which are responsible for sending data to 23 RosHydromet regional branches. These branches are the focal institutions where most routine meteorological and hydrological data are collected, verified, processed, incorporated into forecasts and supplied to regional and local clients. Operational upper air and meteorological data are transmitted several times a day to RosHydrometCenter and the Main Computing Center in Moscow, for forecasting and for onward transmission to the WMO. Protocols governing the procedure and frequency ofdata transmission
40 vary for different types of data and under different conditions. For example, the frequency of transmission of stream stage readings from hydrological posts is usually once a day, but in high- flood periods the required frequency increases to 6-12 times a day.
One ofthe prime concerns in all parts ofRosHydromet system is poor communication capability. It is not uncommon, particularly at remote stations, that data are still transmitted by telegram and Morse code signals, which have not been used by the more advanced meteorological services since the 1960s. The methods by which data are communicated from monitoring stations are not only obsolete, expensive and labor-intensive, but also unreliable. Sometimes equipment is physically worn out.
A significant share of field data is collected but is not reported in time for inclusion in numerical models and decision support because of communications difficulties. This issue particularly affects remote and Arctic areas. For example, 7 percent of the stations reporting to Yakutsk Branch on the day the project team visited failed to report on time for inclusion in forecasting models because communications had failed during an ongoing geomagnetic storm. There have been cases in Prymorsky and Krasnodar Krai recently when data from hydroposts that indicated a dangerous rise in stream levels was not communicated to the authorities in a timely manner because of poor communication channels. These failures led to significant economic losses. Besides being unacceptably failure-prone, regular communication channels are expensive, consuming in 2002 about 9 percent of RosHydromet’s budget. It is evident that the present communications system needs to be significantly upgraded to allow Russia to meet international standards and to deliver timely data and forecasts.
Data processing capability at all elements ofRosHydromet system is also poor. Most observation posts and stations are not equipped with automatic data loggers or PCs. Paper loggers are the primary recording media used by observers, though a few stations (about 500) are equipped with PCs that keep routine data records and handle simple processing routines. Oblast offices and regional branches ofRosHydromet are equipped with older generation PCs sometimes connected in local networks. Plotters, copying machines and other items ofoffice equipment are rare. Some regional branches have old mainframe computers that are difficult and expensive to maintain and often unable to run more-modern software. Many branches do not have easy access to their own data records: most data are stored on paper, and access to data in the archive is a complex procedure. Overall, data management is a labor-intensive and cumbersome process throughout the system. Many paper records are stored in uncontrolled environments, putting data access at risk.
In order to get the maximum benefit from new and improved modeling capabilities, the regional branches of RosHydromet should be upgraded. These branches provide the interface between RosHydromet and its userdclients. Currently, they do not have the access to products and data that they need to do their job effectively. Direct real-time satellite data are available only in certain centers. Other centers can access data only over the internet, a source that is often not current. Receiving stations at all regional centers, or alternatively a capability to access real-time satellite data through high-speed communications, would improve the effectiveness of these offices. The addition ofmodem computers and better software would improve the lead times for warnings ofsevere weather and flood conditions.
41 Traditionally, RosHydromet’s lead research institutions were responsible for design ofthe whole chain of specialized data collection, storage, processing, dissemination, and in some cases database maintenance routines and standards. For example, the State Hydrological Institute is responsible for the whole hydrological data chain; the Main Voeikov Geophysical Observatory handles meteorological data; the State Oceanographic Institute is responsible for marine data. All data flows are accumulated and archived in the All-Russian Research Institute of Hydrometeorological Information - World Data Center (VNIIGMI-WDC), in Obninsk. The main functions ofthe Obninsk WDC are: (i)to collect, process, and archive all types ofdata and forecast information; (ii)to prepare and disseminate information related to climate; and (iii)to support and regularly update catalogs of information resources, data bases and information, supplying data upon request. According to the VNIIGMI-WDC inventory, the archive contains about 50,000 magnetic tapes with data on climate, hydrology, environment, etc.; 2,356,000 paper documents with information from 1734 - 2003; 719,000 photo documents containing satellite data; and 288,000 microfilms. Archived data are deteriorating rapidly and will soon become inaccessible if data rescue is not undertaken. The only option to avoid data loss seems to be near- term conversion of paper data, reel magnetic data and microfiche data to electronic media. The conversion will be a challenge because of the limited technology available and the cost of conversion. However, protection and restoration of access to this unique data has intemational
’ importance.
Forecast capability and forecast preparation. The process of development of global and national weather forecasts, which are among the most important and frequently-used RosHydromet products, is described below in more detail.
In intemational agreements made in the 1960s, the USSR accepted responsibility for a central role in the world network of meteorology coordinated by the WMO. The agencies tasked with global responsibilities in those agreements are Russian today, and the Russian Federation has accepted responsibility for fulfillment of their role. The Moscow WMC is one of three worldwide centers that are charged with computing and distributing daily global forecasts to initialize a number of the world’s regional weather models. In addition, the Moscow World Meteorological Center (WMC) is charged with responsibility for developing new techniques in support of worldwide forecasting; the Obninsk archive is a World Data Center (WDC); the regional centers at Khabarovsk and Novosibirsk are specified as sources of global leadership in specific areas of forecasting. Despite the work of newer agencies such as those of Europe and Japan, that supply some forecasting support to the world community, it remains the case that the communications infrastructure that supports national forecasters worldwide incorporates Moscow as a hub and designates it a major provider of global modeling, data provision and methods development.
The Moscow WMC (whose functions are carried out by Hydrometeorological Science-Research Center of the RF and the Main Computer Center of RosHydromet) has basically sustained its global contribution during the transition period. Faced with severe budget constraints, RosHydromet has made an outstanding effort to make the best use of available computing resources through improvement in physical modeling and algorithm implementation. That strategy has reached its limit, however. At present the Moscow WMC is out-powered by a factor of about 1000 to 1 (in operations per second) by comparable intemational centers.
42 As a result, accuracy and lead time in forecasting is falling behind that available in competing economies, despite the excellent skills available in RosHydromet. Of far greater significance is the consequence that protection against weather hazards is significantly less than what would be technically possible given the capabilities and achievements ofRussia's forecasters. Specifically, weather forecasts could be more accurate for given lead times and in any case would benefit from better probabilistic information delineating the uncertainty ofresults.
The importance ofcomputing power compared to additional observation data is highlighted by a study undertaken in the 1990s, in which the data that supported US. forecasting of world weather from 1958-1997 were re-analyzed using the methods of 1995. The re-analysis showed that if the methods of 1995 had been in use, forecasting skill would have been almost as good in 1958 as it was in 1997; improved observational techniques and data availability made much less difference. That is, most of the improvement in US. weather forecasting is improvement in methods/computers, not improvement in observations. See Figure 6.
Figure 6. Comparison of the Northern Hemisphere anomaly correlation from operational and re-analysis forecasts (scale on the left). Presented in Kalnay et al., Bulletin of the American Meteorological Society, Vol. 79 (No. 12), 1998.
RosHydromet's forecast system initiates model runs when data from the worldwide balloon launches at 0O:OO UTC and 12:OO UTC becomes available. These forecasts are based on data including:
0 Data from the Russian Federation's 104 upper-air stations, transmitted to regional centers by shortwave radio, cell phone, satellite, telephone or telegram, and forwarded from regional centers to Moscow by modem, as well as data from other stations in the worldwide simultaneous balloon launch made available for download on the Global Telecommunications System (GTS);
43 Data from about 1300 meteorological stations of the Russian Federation, those in the “operational” category, transmitted to regional centers once per three hours, and from there onward to Moscow, as well as data from the worldwide network of reporting meteorological stations, available on the GTS.
Altogether, model initiation is based on hundreds ofthousands ofweather observations received daily at the Moscow WMC. Table 1 below lists the number of observations received on January 25,2002. Note that each observation may comprise values for several variables.
Surface stations 40,433 Ships and drifting buoys 21,916 Aircraft 26,075 Radiosondes 5,875 Satellites 250,000
Global forecasts at the Moscow WMC are made from Oh UTC for 85 hours, and from 12h UTC for the following ten days (240 hours). The global model currently employed by Hydrometcenter, the lead weather forecast institution, uses 85 spherical harmonics and has resolution 1.4 degrees x 1.4 degrees (150 km x 150 km). Its output is transmitted to the GTS and to the regional centers in Novosibirsk and Khabarovsk. This output is then used to drive nested regional models at resolution 70 km x 70 km. The Moscow and Novosibirsk centers then use the Moscow global model to initialize regional models, but the Khabarovsk center at present cannot, because Moscow’s model run is not available in time for the daily forecast in Khabarovsk. Instead, Khabarovsk Regional Meteorological Center undertakes its regional model run based on output from Bracknell and Japan. The three regional models (Moscow, Khabarovsk, Novosibirsk) incorporate regional data, knowledge and techniques additional to that used in the global forecasts. The regional models are complete about 1.5 hours after initiation, and are distributed to Region VI countries per the responsibilities of the Russian Federation (see Figure 4), as well as to the 23 RosHydromet regional branches within the Russian Federation. Each regional branch then forwards the regional forecast to the RosHydromet offices of the Subjects of the Federation that are in its area of responsibility. Some offices of RosHydromet in the Subjects of the Federation may run local models (resolution 10 km x 10 km) nested within the regional models, additionally incorporating local radar data, satellite data when available, and archived data from which analogues to past weather and/or correlations among datasets are drawn. Local knowledge is the final input at this level. Local prognoses are then issued, providing a three-day outlook.
Interaction with clients and provision of services
The values ofhydrometeorological parameters collected by the RosHydromet network - such as the temperature and humidity ofthe air, wind velocity, water temperature, precipitations, clouds, visibility, ice, the salinity and density of sea water, concentrations ofpollutants, radiation flows and soil moisture, form a baseline for development of information products. If these data are further processed and analyzed by RosHydromet institutions, the output is then classified as
44 generalized information or as information products. This information, in tum, falls into the “predictive” category (forecasts of all types at various lead times, storm warnings, forecast updates, recommendations and consultations) or else is “regimen-reference” data (monthly summaries, bulletins, annuals, reference manuals and books, monographs, atlases, regulations, etc.).
Global services. As noted above, the global weather community is a principal beneficiary of RosHydromet’s output, via the World Meteorological Organization. RosHydromet actively participates in all WMO systems: the Global Observation System, the Global Telecommunications System (GTS), data management, and the Global Data Processing System. RosHydromet provides data from 104 upper air stations (as of 2002, about 10 percent of the WMO system’s 1050 reporting stations globally) and about 900 surface stations (as of 2002, about 8.2 percent of the 10952 stations reporting to the WMO).
In addition, the long-term stations and time series obtained in Russia by consistent methods over many decades form an important component ofthe world’s meteorological database. It would be in the best interests ofthe research community if Russia were to continue to finance operation of these stations in exactly the same way. However, as noted above, current methods are expensive. If Russia opts to automate these stations, it would be best for the research community if observations by both methods were undertaken during an overlap/calibration period (Canada’s experience suggests two years) to assure comparability ofthe time series.
Domestic services. Of course, RosHydromet also faces toward a domestic base of clients and beneficiaries. The main information products of RosHydromet and certain protocols for interaction with clients are regulated by the Government Resolution “On Information Services in Hydrometeorology and Environmental Pollution” (N1425 dated November 15, 1997). All hydrometeorological information is divided into two broad categories distinguished by data availability, processing and the means ofdata transmission to the user: standard information, and specialized information. Standard information is that obtained and processed according to RosHydromet’s federally-set requirements and, in compliance with the above Resolution, made available to all users free of charge. The Resolution specifies the detailed list ofproducts which constitute standard information. These free products include for instance all emergency warnings, data on extreme pollution events, basic weather forecasts for each territory of the Subjects of Federation with a lead time from 1 to 3 days, etc. Specialized information is user- tailored data. Users pay for this information in accordance with the terms of agreements struck between the user and a RosHydromet entity.
Information on all types of emergency situations is among the mandatory free information provided to specially-authorized government bodies, mass media and the public. There is a special procedure for the provision of data to the government authorities in case of hydrometeorological disasters and emergency situations. It is regulated by “The order of activities of RosHydromet’s organizations and institutions in case of emergencies” (2000), and the “Guiding Document 52.04.563-2002. Instructions. Criteria ofdangerous hydrometeorological phenomena and order of initiation ofstorm alarms” (2002). However, the overall degradation of all major elements of RosHydromet network has inevitably led to a negative impact on its capacity to predict dangerous weather events. RosHydromet data shows that the percentage of dangerous weather events not predicted by RosHydromet as a share of all recorded dangerous
45 weather events which caused economic damages, increased from 6.1 percent in 1993 to 23.1
Box 1: Cases of no warning on weather hazards
9 On May 29,2003, in Volgograd Region (Alekseyevsky Settlement) the weather forecast was silent as to huge hail (50 mm in diameter). The results were 1680 houses damaged and 3,300 hectares of farmland destroyed, or a total loss of 12.5 million rubles. 9 On the night of June 20-21, 1998, Moscow witnessed a heavy thunderstorm accompanied by heavy rain and strong wind. Meteorological stations recorded wind up to 26 mps; however, weather radar data and the nature of destructions put wind speeds at over 30 mps. This thunderstorm was not predicted in a timely way. Damages included:
* 173 people injured, including 129 hospitalized, * 86 trolleybus and 37 tramway lines blocked, * 1400 roofs destroyed, * Several ships sank in the river port, * 67.5 thousand trees were broken or uprooted.
It took several months to fix this damage. Cleaning streets from the broken trees alone cost the city an additional 30 million rubles (in prices of July 1998). 9 As the result of a strong wind (up to 30-34 mps) unforeseen in the weather forecast for April 6,2003, the city ofNazran (Republic of Ingushetia) had several electric and communications lines damaged and several houses unroofed. percent in 200 1. A few cases of losses due to poor forecasts are presented in Box 1.
It would be important to note that overall weather dependency ofthe Russian Federation is high, particularly in the North, Far East and North Caucasus regions, which are exposed to extreme weather conditions and events. The number of dangerous weather events is growing, as RosHydromet statistics show (Figure 7); the damages are high and have a tendency to increase as well.
300
250
200
150
100
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Figure 7. Number of dangerous weather event recorded in Russia
46 Two specific sectoral cases of long-term trends in economic losses caused by negative weather events, those for the agriculture and forestry sectors, are presented in Figure 8.
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Figure 8. Economic losses from unfavorable weather events in agriculture and forestry. All losses in Bln. Rubles (2003 Diamonds - losses in agriculture. Squares -forestry.
The overall magnitude of losses for the economy, estimated based on a range of studies (Ragozin, 2001; Natural Hazards in Russia. Hydrometeorological Hazards, 2001; Natural Hazards in Russia. Assessment and Management of Natural Risks, 2003, Catastrophic Floods of the Beginning of 2Ist Century, 2003) and cross-country comparisons, appears likely to be in the range USD 1-2 billion annually (see Annex 9). The largest share of these losses is associated with flood damage, the result of floods ofmany kinds - tsunamis and monsoons in the Far East, storm surges in the estuaries ofthe seas, ice damming ofnorth-flowing rivers including the Lena, flood waves during spring snowmelt, and summer and autumn rainfall. The Far East and North Caucasus are the most affected regions; agriculture and infrastructure are the most affected sectors.
In the process of project preparation, a range of consultations with sectoral and regional stakeholders was organized. The conclusion reached was that client satisfaction is not high. All parties noted the degradation ofbasic network, deteriorating data quality and the discontinuation of measurements. Specific cases of poor forecasts in water resources management, forestry, shipping, power supply and municipal sector that had led to economic losses were described by clients. Many clients, particularly representatives of federal, regional and municipal governments, complained about prices charged by RosHydromet for services which in their view should have been provided as free public goods.
47 Unlike USA National Weather Service, which offers free weather forecasts to all those who want them, as noted above RosHydromet charges its clients for a broad category of products. This approach is similar to the general European approach that allows government agencies engaged in weather forecasts to sell their products as do private weather bureaus. Russia’s hydrometeorological market is now represented by over 300 private and government entities. It demonstrates a healthy 15-20 percent client growth annually, despite some competition with the private sector. According to RosHydromet, until 2000 the number of such clients grew about 5 percent a year, but in 2001-2003 the annual growth was 35 percent, 26 percent and 15 percent. RosHydromet currently has 36,000 clients nationwide, with 29,000 clients buying specialized information. The energy sector is the most active new client including RAO UES and GAZPROM companies. Altogether, annual turnover in this sector is about USD 30 million, though it has a potential capacity of USD 200-300 million. The year 2002 saw a 25 percent increase in the energy sector clients, where estimated economic benefits of applying weather information was Rb12.4 billion (USD 80 million). In 2003, RosHydromet earned Rbl. 1.1 billion (from all client categories), with a total estimated economic benefits over Rbl. 10 billion ($330 million). According to the RosHydromet MeteoAgency, only 1 percent of all the organizations whose activity is weather dependent buy detailed specialized forecasts. The gap is due more to the fact that not many users are aware of the importance of accurate weather forecasts to their activities, than to cost-saving considerations. What the sector is most interested in is seasonal weather forecasts to allow an accurate estimate of the requirements of the heating season and development ofthe best fuel-supply schedule.
48 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
Sector Issue: Need for a long-term institutional development perspective and strategy for adjustment of environmental management to the market economy. The Environmental Management Project (1994) financed technical assistance (TA) for institutional and policy strengthening to support incorporation of environmental and resource management concerns into the economic, social and political adjustment process occurring in the post-Soviet period.
Relevant lessons: (1) In any future large-scale technical assistance initiatives in the sector, demand for this kind ofTA on the part ofthe borrower should be better defined. Ideally, a track record ofundertaking and accepting this kind of assistance on a more modest scale should exist. (2) Institutional technical assistance requires a sustaining client. This is obtained only where the client organization has bought into and has ownership ofthe TA initiative from the outset. There should. be provision for timely restructuring of counterpart relationships during supervision if ownership degrades or changes in institutional structure occur.
Sector Issue: Communications and IT infrastructure base are obsolete and cannot support the high volume, transparent supply of information that would be optimal in the market economy. The Customs Development Project (2003) aims to modernize the information technology structure of the State Customs Committee and institute e-Government facilities for information and interaction with the trade community. The project aims to overhaul the informatics infrastructure of Customs through provision of systems, computers, telecommunications, and other technological infrastructure. The project is still in an early stage.
Sector Issue: Obsolete information technology: capacity to offer forecasts and data products in support of the economy has fallen behind the standard set by equivalent services, and as such, the standard needed to keep the economy competitive. The Development of the State Statistical System Project (1999) aims to address the economy’s growing requirement for statistical data. Data needs for policy and business decisions are emerging at a higher pace than the statistical system can develop and deliver. Transformation of the statistical system will require introduction of new survey methods, improvement of management ofthe statistical system to systematically cope with the new requirements, training and retraining ofstaff to obtain a new skill mix, and procurement ofequipment to process, store, share and disseminate information efficiently to meet the needs ofthe users.
Sector Issue: As a result of under-funding, loss of capacity to monitor remote areas for threats to environment, human health and economic damage. The proposed GEF Fire Management in High Biodiversity Value Forests of Amur-Sikhote - Alin Ecoregion Project (2006, Pipeline) would aim to support programs for improved management, monitoring and prevention of fires, and public awareness campaigns for fire prevention, in order to conserve these economically vulnerable forest ecosystems. The project is in the pipeline.
49 Annex 3: Results Framework and Monitoring RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT Results Framework
PDO Outcome Indicators Use of Outcome Information
Increase the accuracy of forecasts Lead time increases for national If forecasts do not improve, find the provided to the Russian people and regional weather forecasts critical gaps in data collection, and economy by modernizing computing or telecoms and remove key elements ofRosHydromet’s them. technical base and strengthening its institutional arrangements.
Intermediate Results Results Indicators for Each Use of Results Monitoring One per Component Component Component A: Component A: Component A: Upgrade computing capacity and Computing centers obtain If forecast centers unable to capacity for transmission, operational forecasts at higher undertake these methods, revise archiving and retrieval of data resolution and using ensemble computing system design and/or methods. upgrade capacity. Data collected and transmitted Make sure that telecoms are (including processed effective; if telecoms not effective, information) within Russia or reconfigure system and/or make globally does not encounter further upgrade. infrastructure bottlenecks in RosHydromet telecoms If archiving system remains unable , Response time drops for to respond to questions set by requests for archived data modelers and synopticians, identify capacity gap. Component B: Component B : Component B: Modernize key components of Availability and quality of data Ifnew systems do not make data RosHydromet ’s observation that contributes to forecasting available to forecasters, reconsider network is secured and improved. the applicability of the technological solutions used.
~~ ~ Component C: Component C: Component C: Pilot new operational principles Development and pilot testing If a concept ofoperations does not drawn from worldwide of a RosHydromet concept of emerge, seek world experience for experience, improving operations applicable lessons and promote emergency warnings and their introduction. supporting development of a new Improvement in lead time for concept of operations. wamings delivered to Analyze bottlenecks in warning population in case of delivery (data collection, analysis, hazardous weather events delivery or presentation) and resolve them.
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The proposed project has four components: (a) modernization of computing, archiving and telecommunications facilities; (b) upgrade of observation networks; (c) institutional strengthening, improvement of information dissemination and emergency preparedness; and (d) project management, monitoring and evaluation.
Component A: Modernization of Computing, Archiving and Telecommunications Facilities (US$46.1 million baseline excluding contingencies and taxes, US$62.1 million estimated project costs)
This component would upgrade the computing capacity of five key facilities of RosHydromet and overall communications throughout the national network. This would include upgrade to supporting infrastructure; that is, the system's capacity for transmission, archiving and retrieval of data. The hydrometeorological centers concerned contribute critically to Russia's forecasting capability and also to its contribution to the United Nations World Meteorological Organization's global meteorological system. The five are: (a) the Moscow World Meteorological Center (Moscow WMC), which produces and distributes global forecasts, develops new forecasting methods, and coordinates forecasting in RosHydromet; (b) Obninsk All-Russia Research Institute of Hydrometeorological Information (VNIIGMI) - World Data Centre (Obninsk Archiving Facility), which is responsible for archiving and distribution of hydrological and meteorological data; (c and d) Novosibirsk and Khabarovsk Regional Meteorological Centers (RMCs), which have been designated WMO Regional Specialized Meteorological Centers, producing and distributing regional forecasts and developing new methods of regional forecasting; and (e) Voeikov Main Geophysical Observatory (Voeikov GGO) in St. Petersburg, a World Radiation Data Center. As for the national network, the component would upgrade overall communications and transmission capability throughout the national forecasting network, focusing on the 30 oblast centers, 24 regional telecommunication centers, 40 regional forecasting centers, and about 400 observation stations, focusing especially on those situated in sparsely populated or difficult-of-access regions.
A.l: Modernization of the Moscow WMC and Obninsk Archiving Facility (US$30.5 million excluding contingencies and taxes, US$41.0 million estimated project costs) The principal aim of this sub-component is to upgrade the computing capacity of the Moscow WMC through investment at RosHydromet's main Moscow center, as well as the capacity for archiving and retrieval ofhydrometeorological data ofthe Obninsk Archiving Facility.
Modernization of Main Computer Center. The largest single investment would be through the procurement of a supercomputer (and operating system environment) for the Moscow WMC, a high priority in light ofinternational analyses showing that global gains in forecast lead times in recent decades have been largely driven by improvements in numerical forecast methods. It is expected that the proposed supercomputer would have a processing power of at least four teraflops (one teraflop is 10l2 floating point operations per second). The system architecture and configuration will depend on the results of the procurement process. This would bring RosHydromet's basic computing power broadly into line with other globally important
56 meteorological centers. It would enable RosHydromet to make full use of its own models, implement recent advances in modeling worldwide, and continue development of new algorithms as the WMO has mandated. The new supercomputer will facilitate measurable gains in the lead time over which forecasts are considered useful, enabling use of improving parameterizations of physical processes in the global model through the introduction of model elements that have already been developed by RosHydromet but have not been introduced operationally due to the lack of computing resources. In addition, it will enable an increase in the spatial resolution ofglobal models.
The new computer will require significant adaptation of software in use on the current supercomputer, especially the forecast models themselves. The component would therefore also include support to for this task.
The local area network (LAN) supporting the supercomputer would be upgraded to at least 1 Gb capacity along the backbone controlling access to the supercomputer. The remaining parts ofthe LAN in the main computing center would also be upgraded to a standard such as a lOObaseT network of approximately 400-450 nodes. The network would also provide access to authorized externalhemote users. For example, the LAN may be divided into two main segments, ofwhich the user access segment will be further divided into a sub-segment structure mirroring the departmental structure of the Moscow WMC. The upgrade would also include hardware and software for network analysis and protection, including a firewall, anti-virus software, and equipment for physical protection of the network from electrical surges such as lightning, including unintemptible power supply systems. A limited upgrade of workplaces is envisaged, comprising computers and associated peripherals for about 75 workstations. The computing centre itself would obtain equipment for visualization and display, including wall-sized projector
~ panels, large format plotters and printers.
Limited refurbishment may be undertaken of the area housing the supercomputer complex (on the order of 400-600 m2 ), related office space (about 300 m2), and the control room for WMC computer operations. Refurbishment would include, inter alia, strengthening the floor of the supercomputer room and upgrade of air-conditioning and fire-safety systems. Upgraded power supply arrangements would likely include refurbishment of three transformers and upgrade of low-voltage electrical equipment ofthe internal substation and power network to ensure a stable environment, upgrade ofthe fire protection system, and new cabling.
Modernization of Archiving System. Obninsk All-Russia Research Institute of Hydrometeorological Information - World Data Centre (VNIIGMI) has housed the Russian Hydrometeorological Data Fund since 1957. The total volume ofinformation held at the Obninsk archive is estimated at 150-180 Tb. Most is held on magnetic tapes (1200 and 6250 bpi density tapes) that are degrading. The current estimate is that only about 90 percent of the data held on each tape is recoverable, despite regular maintenance of the tape archive. In addition, a large archive oforiginal satellite data is held (as photographic negatives) and a large volume ofpaper records is held as well. VNIIGMI is undertaking a program to digitize all data and transfer the archive to more-stable media. This subcomponent will support development of an up-to-date computerized archive. Currently, on-line storage of about 40 Tb and disk space of about 100 Tb - 200Tb is envisaged. The center will be able to receive and store a further 2 Tb ofdata per year. Under this subcomponent, VNIIGMI will obtain high-capacity servers, software and storage
57 space for the data and operational archives. It is anticipated that this will include the provision of disk archive servers, virtual tape servers with larger-capacity tape libraries, a tape driver and greater disk space. At the same time, automated and semi-automated facilities for storage of paper records, magnetic media and a modem automated library will be established. The task of mass digitization will be supported through the provision of equipment for archiving of paper records. Industrial document scanners with OCR readers and other specialized equipment for work with paper records will be procured, as will equipment for the modernization of existing photo-offset printers to digital technology, and software for data collation and archiving. To facilitate adequate access to the data, hardware and software will be provided for data organization (database software and servers), visualization (GIs software), and web access. The archive’s LAN will also be brought up to date, with data transfer rates increased to at least the standard of fast Ethernet (such as 100BaseT) for the key parts of the archive, and at least to Gigabit Ethernet for the main backbone. It is envisaged that some 120 upgraded workplaces may be procured, possibly including additional equipment (printers, plotters, wall panels) for data presentation.
There will be limited rehabilitation and reconstruction of space for the archive and supporting equipment, addressing inter alia issues of guaranteed power supply and modernizing the local substation. There is also a need to renovate office space. Altogether, it is estimated that 2000- 3000 m2 ofspace will undergo rehabilitation.
Substantial training of staff in new equipment and new methods will be supported, as will the task ofthe porting existing software and systems to the new computing facilities.
A.2: Restructuring at Novosibirsk and Khabarovsk RMCs and Modernization at Voeikov GGO (US$7.9 million baseline excluding contingencies and taxes, US$10.7 million estimated project costs). This subcomponent will upgrade facilities at the Novosibirsk and Khabarovsk RMCs and at Voiekov GGO in St. Petersburg. The investments of the RMCs are similar to those at the Moscow WMC, although at a smaller scale as these centers are responsible for regional rather than global forecasting. Processing power will be increased to raise capacity for regional forecasts and research. To that end, each centre will be provided with a supercomputer with capacity likely to be at least 400 Gflops. Each center would also be equipped with about 25 upgraded forecasters’ workstations. Minor refurbishment would also be undertaken, about 200m2 at each center, putting systems in place to protect the new hardware such as air conditioning, fire safety and power stabilization. Additional workstations and equipment will be procured to support data collection and local archiving. This will include modernized data collection systems, among which the collection of data from data transmission satellites. Training will be provided for the staff of the centres.Some. rehabilitation work will be undertaken to support maintenance of regional data archives housed at the centers, such as minor reconstruction and provision of air conditioning and humidity control. The computing resources at Voeikov GGO will also be modemized, mainly through the provision ofa data server with a processing capacity likely to be at least 300 Gflops. In addition minor investments will be made in the LAN and telecommunications resources, and in limited renovation of facilities to house the computing resources. The most significant outcome of this investment will be the ability of GGO to run ensemble forecasts ofclimate change. In addition, it is planned to procure specialized equipment
58 in support of climate change study. Procurement ofequipment to set up a station for the WMO Baseline Surface Radiation Network is planned.
A.3: Modernization of the Communications and Data Transmission System (US$7.7 million baseline excluding contingencies and taxes, US$10.4 million estimated project costs). The aim of this subcomponent is to ensure efficient and timely collection of data and dissemination of results. The Moscow WMC is the central node in the Russian Federation’s domestic hydrometeorological service. All meteorological data from operational meteorological stations in the Russian Federation is passed to Moscow WMC to support production of global forecasts. In turn, the global forecasts are passed outward to the regional centers where they are used input to regional forecasting. Because production of daily forecasts depends on the inward and outward transmission of data, the effectiveness of the national network is critical to the overall lead time provided by Hydromet’s forecasts. Upgrade of the communications network that connects the Moscow WMC to the regional centers will be a cost-effective means of improving the Hydromet’s forecasts.
This subcomponent will provide an upgrade of telecommunications facilities to the Moscow WMC, the Khabarovsk and Novosibirsk RMCs, Voeikov GGO, the Obninsk Archive Facility, and throughout the regional RosHydromet network. The Moscow WMC at present receives about 220 Mb/day from the WMO’s Global Telecommunications System. Outgoing data from the Moscow WMC is about 700 Mb/day (upload of data from Russia’s land mass, forecasts, etc.). Transmission between the Hydromet’s various centers and Moscow is on the order of 310,000 messages (560 Mb) per day inbound and more than 670,000 messages (740 Mb) outbound. These volumes are expanding annually. To provide for future needs, it is proposed to raise capacity at the Moscow WMC to at least 30-50 Gb ofincoming traffic and at least 150-200 Gb of outgoing traffic. A modern message switching system (MSS) will be implemented both centrally and at the regional centers. The LAN serving the Moscow WMC’s communications center will be modernized and control and measurement equipment installed. Communications lines will be upgraded, e.g., to fiber optic channels where appropriate, and connection to the main Russian communications backbone will be ensured. International links will also be examined to determine the scope for increasing the data transmission speed between the WMC and the countries that it serves with global and regional forecasts. Telephone and telegraph facilities, where they are currently analog, will be converted to digital. Some necessary refkbishment work will be carried out in each facility, in the areas where communications facilities are housed.
An important element ofthe work will be related to modernization ofthe overall data collection system and ensuring that measurement data get from measurement stations to the national regional and data centers. This will comprise supply and installation of servers and MSS equipment for 30 oblast centers and 24 national regional centers, network equipment for 70 oblast and national regional centers, and the supply and installation of telecommunications equipment for 400 key or remote stations. The latter will include appropriate equipment for the northern stations that are not adequately served by traditional means of communications, and radio and satellite communications for some stations. The subcomponent will also equip backup communication centers.
59 Component B: Upgrading of the Observational Networks (US$42.3 million baseline excluding contingencies and taxes, US$56.9 million estimated project costs)
This component would upgrade the instrumentation of RosHydromet's data gathering facilities: surface observation stations, upper-air sounding stations, meteorological radars, satellite receiving stations, hydrometeorological centres and hydrological stations. Data from the observational networks form the basis for RosHydromet's weather forecasts at global, regional and local scales, seasonal forecasts, aviation forecasts, agricultural meteorology, support to water resources management, emergency warnings, and all other services.
B1. Surface Observation Network (US$17.4 million excluding contingencies and taxes, US$23.3 million estimated project costs) RosHydromet currently operates 1626 meteorological stations that measure surface values of basic meteorological variables: temperature, pressure, humidity, wind speed and direction, precipitation. Some stations maintain time series of actinometric variables: hours of sunlight, total solar irradiance, direct solar irradiance, diffuse solar irradiance, and/or UV irradiance. Some add measures of cloud height and present weather; some measure pollution; some undertake specialized observations in support of agriculture, such as evapotranspiration, soil moisture, soil temperature at a range ofdepths, frost thickness, snow cover, and water content of snow. At present, network equipment is in many cases nearing full depreciation, threatening capacity for various functions.
This subcomponent aims to upgradeheplace instrument sets at about 900 of RosHydromet's observing stations. The subcomponent would identify and procure standard instrumentation sets of several types and varying complexity. Basic sets would measure standard meteorological parameters; another type of set would recording in addition actinometric variables; another type of set would also measure visibility and present weather. Some set designs would incorporate semi-automatic measurement and recording capabilities, thus reducing the need for staffing at some stations. In the selection of sites to be upgraded, one possibility is a selection among the federal baseline network of stations -(comprising 1346 stations of RosHydromet's 1626 total). Another criterion for focus might be the WMO-reporting subset of stations, which partly overlap with the federal baseline network. In any case, the whole ofthe federal baseline network should be assessed, as the configuration may need revision in light of changing priorities and climate trends. The subcomponent may also support a more systematic approach to meteorological measurements through the design and implementation of up to ten sub-regional meteorological networks. This initiative would be directly related to and result from the work undertaken under Component C (see below). As a result of the analysis and re-evaluation of RosHydromet's methods of work, a new approach to the establishment and maintenance of meteorological measurement networks may be undertaken. This will include the establishment ofautomated and semi-automated networks, improved integration with hydrological network and specialized networks, co-financing ofnetworks, and possibly other issues.
B2. Aerological (Upper-Air) Network (US$4.9 million baseline excluding contingencies and taxes, US$6.6 million estimated project costs) RosHydromet operates 104 atmospheric sounders to obtain the three-dimensional data that are the input to global forecast models. These sounders contribute to a worldwide network spaced to
60 capture the scale of atmospheric motions that contribute to development ofglobal weather in the near term. Balloons are launched twice a day at 00:OOh and at 12:OOh UTC. The Russian Federation has in the past contributed about 15 percent of the total data in the global network (which has about 1000 stations). However, budget considerations gradually forced closures, as the network that once comprised 127 stations now comprises 104. The dropoff in data availability has affected forecast quality, particularly the quality ofaviation forecasts.
RosHydromet’s present network uses three proprietary systems, all based on secondary radar: Meteorit; the AVK, and in a few places, Russia’s new MARL-A system. The older systems are energy-intensive, relatively dangerous (because ofthe radiation they emit, and because methods for filling of ballons are hazardous), depend on voltages different from those received from the grid (thus requiring dedicated transformers), and are designed to broadcast at frequencies that modem conventions have specified as reserved for civilian use. Their single-dish antenna design is not as robust nor as flexible as MARL-A’s phased array. Maintenance is becoming extremely expensive, as spare parts are becoming impossible to procure.
The project aims to upgrade this network by replacing about 45 MeteoriUAVK aerological radars with MARL-A tracking stations and upgrading 40 other AVK stations with new computing and radar supply sets.
B3. Meteorological Radars and Lightning Detection (US$8.5 million baseline excluding contingencies and taxes, US$11.4 million estimated project costs) RosHydromet’s weather radar network consists at present of about 50 radars. Moscow is protected by a network comprising five radars, but other large urban centers do not have a similar level ofprotection. None ofthe radars in RosHydromet’s system are Doppler-capable; as a result, they can monitor precipitation but cannot track storms or measure wind. To increase capacity, the project would procure eight Doppler-capable radars, prioritizing deployment in the largest urban areas and areas at risk of convective storms, such as Black Sea and Japan Sea coastal areas. The subcomponent would also finance retrofitting of about 20 additional radars in the network with computer upgrades to improve analysis ofobservations. In addition, about five lightning detection systems would be implemented to improve storm detection, providing coverage over an area on the order of 150,000 km2.
B4. Regional Hydrometeorological Centers (US$5.3 million excluding contingencies and taxes, US$7.2 million estimated project costs). This subcomponent will finance works at 20-30 regional RosHydromet centers to address the following critical issues: satellite data reception, visualization systems, hydrological forecasting, operational archiving and atmospheric pollution monitoring.
Satellite Data Reception Systems. International satellites provide very useful set of weather- related digital imagery. The Aqua satellite, for example, provides data that can make up for some of the data gaps in the radiosonde network: it obtains atmospheric temperature profiles to the nearest 1°K for every 1 km layer in the troposphere and 1°K for every 4 km layer in the stratosphere up to 40 km, as well as humidity to an accuracy of 10 percent in the troposphere. Other derived satellite products include among others geopotential height at 20 atmospheric pressure levels, cloud mask, rainfall, snow-water equivalent on land, vegetation cover, surfacekloud temperature, calibrated radiances in many spectral bands, at resolutions from 250
61 m to 10 km. Applicatons of satellite data include monitoring of pollution, forest fires and drought. Methods already exist to incorporate some ofthis data, such as radiances, into forecast models, and development offurther methods is an active area ofresearch globally.
Therefore, this subcomponent would procure about 20 ground receiving stations. The distribution of receiving capacity by data format is not fixed. However, notionally, the project could obtain ten stations equipped to receive High Rate Picture Transmission (HRPT) images, at present the format for NOAA AVHRR and TOVS data. Six stations could be procured capable of receiving medium-resolution data in the format used by the Aqua, Terra and Meteor 3M satellites and the future satellites to be launched that will use this format. An additional station could be procured to receive data from the EUMETSAT, Meteosat 2"d generation satellites that are to be launched. Other satellite data receiving stations may be procured as well, such as a Radarsat station that may be supplied to the Arctic and Antarctic Institute in St Petersburg.
Visualization Systems. There are a number of visualization systems that have been developed specifically for the collation, visualization and analysis of meteorological information and data. Under this component, such systems/licenses would be procured and software upgraded at key hydrometeorological centers, in light of the utility of a national standard for analysis, visualization and presentation of data. Although some work may be undertaken to adapt software to the local environment, it is not intended to carry out any major software development work under this task.
Computerization of Hydrological Forecasting. A number of the main regional hydrometeorological centers would benefit from major upgrades to their computing resources. Upgrade of workstations and software at five to ten hydrometeorological centers would be undertaken in order to ensure they can make best use ofhydrological forecasting methods and to enable further development.
Creation of Operational Archives. RosHydromet regional branches usually do not maintain archives on the most modem technical media, a fact considerably limiting their data management capability and opportunities to respond promptly to information requests from regional and local clients. This subcomponent includes provision of about 220 workstations equipped with standard archiving software to the regional RosHydonnet Branches. Development and installation ofspecialized software and training ofstaff would also be financed. This activity will be undertaken under overall guidance from VNIIGMI -WDC.
Atmospheric Pollution Monitoring. In light of the growing body of information concerning the health risks of air pollution, the project would invest in up-to-date monitoring equipment. It is anticipated that up to ten sites would be instrumented for ongoing monitoring, comprising a mix ofindustrial sites and urban centers.
B5. Hydrological Network (US$6.2 million baseline excluding contingencies and taxes, US$8.4 million estimated project costs). RosHydromet has undertaken the long-term task of restoring an adequate network of hydrological measurement sites. This task was launched in 2002, following the Caucasus floods of that year, following which RosHydromet initiated re-investment in hydroposts there. However, the initial strategy was limited to restoration ofstations and hydroposts, rather than to
62 consideration of networks. A more-strategic approach would be financed under this project. This subcomponent will finance upgrade ofabout 700-800 hydroposts. It would focus in part on critical locations for flow measurements indicating the state of the river systems and locations critical for the purpose of flood warning. It would also undertake a focus on three priority river basins, likely including the Kuban, the Ussury (a tributary of the Amur), and the Upper Oka (a tributary of the Volga). The Upper Lena is also under consideration. All candidate river basins suffer from flooding. The Kuban basin is particularly notable for flash floods originating in heavy precipitation in the mountains. The Ussury River basin also experiences heavy flooding, but of a different kind: concentration of monsoon rains that fall over a very large territory. A more-dense network that improved forecasting would be the first step to mitigation of these floods. As for the Upper Okay it is frequently flooded in spring due to snow melting. Snow pack measurement network has to be re-established in this basin. In these pilot areas, complete hydrological networks would be designed and installed. Hydrological forecasting solutions that worked in these basins would thus be broadly useful. Design of the new networks would take into consideration recent developments in sensors and networks, including the use of semi- automatic and fully-automatic stations.
Modernization of hydrological network will be combined with the improvement of meteorological and other elements of RosHydromet. The focus on the Kuban Basin will allow follow-up to recent Bank work on the safety ofthe Krasnodar Dam. In addition, RosHydromet is considering a joint effort with US NOAA in which RosHydromet would undertake a prototype application ofthe River Forecast System (a modelinglforecast suite developed by NOMWS), in those three basins.
Component C: Institutional Strengthening, Improvements in Output Dissemination, and Emergency Preparedness (US$5.9 million baseline excluding contingencies and taxes, US$7.9 million estimated project costs)
This component is to improve delivery of services, responsiveness to natural disasters, and institutional strengthening to make RosHydromet a more viable, vibrant and client-oriented agency. Three subcomponents are envisaged: institutional strengthening, client service improvement and emergency planning and preparedness.
C.l. Institutional Strengthening (US$2.7 million baseline excluding contingencies and taxes, US$3.6 million estimated project costs) This subcomponent will comprise a modest institutional strengthening program. In discussions with RosHydromet senior management, it was agreed that a step-by-step approach would be prudent for the process of institutional reform. The process will start with comprehensive evaluation of the entire RosHydromet system, to include a detailed institutional and regulatory review and an assessment ofRosHydromet's economic and financial system, including inventory of its assets, assessment of operation and maintenance needs. This evaluation will lead to preparation of institutional development and system design alternatives aligned with the client's needs and funding trends, to be developed based on clarified system objectives and international lessons learned, together with the assessment ofRosHydromet's strengths and weaknesses.
63 Institutional alternatives would be tested in three or four RosHydromet regional branches: new network designs and operational procedures would be tested by branches that are committed to change, representing different physiogeographic, administrative and economic conditions. Modernization of the meteorological and hydrological networks in these regional branches (funded from Component B) will likely be relatively higher than in other braches in order to provide a critical mass of infrastructure changes to stimulate introduction of reforms. The process of institutional reform will be supported by a package of training, study tours and collaboration with international and national hydrometeorologic institutions. Taken together, it is hoped that the injection of modern equipment and software, training of staff, and transfer of relevant foreign experience will make the proposed institutional transition feasible. Individual consultants would be hired to support project development activities.
The task would also include development ofarrangements for interaction between RosHydromet and the administrations of the Subjects of Federation, providing for more-specific delineation of responsibilities and funding agreements. Activities may be carried out with the aim of streamlining RosHydromet and increasing commercialization of products. Steps leading to improvements in forecasting techniques will be identified, comprising both statutorily-required operational products and specialized projects with outputs aimed towards identified end users.
C2. Client Service System (US$1.4 million baseline excluding contingencies and taxes, US$1.9 million estimated project costs). An important factor in the success of the project will be improvement of data presentation to ensure that data are made available in required and common formats that are also clearly understandable to users. Dissemination arrangements for the data and information products from the RosHydromet centers therefore need to be reviewed. To this end, a client service system will be designed and implemented. Here, the word “clients” encompasses both statutory clients (such as the federal and regional govemments, authorities responsible for emergency preparedness, sectoral authorities and the general public) and commercial clients (such as aviation companies and airports, power companies, television stations, etc).
Solutions such as those based on web application servers may be used to access data stored at RosHydromet; and, for some clients, to shift from a data delivery model in terms of RosHydromet’s obligation to send out information, toward a data delivery models where users are enabled to fetch information. A web-based interface to RosHydromet data and information could be implemented. Access to data and information can be limited in accordance with statutory responsibilities and authorizations: users may have different authorizations and access to different levels of data and information; for example, permitting varied levels of spatial and temporal resolution or varying lead times. Dissemination can include notification of data availability to categories of user. Other solutions may also be considered to improve dissemination ofinformation from RosHydromet.
This subcomponent also envisages a sizable activity related to client outreach. RosHydromet aims to better understand and serve its clients, looking beyond its statutory responsibilities. To this end it intends to survey the data needs of its RosHydromet clients and to improve the user interface. Following development ofan appropriate methodology for client survey, several client workshops and an outreach campaign are envisaged.
64 C3. Emergency Preparedness and Response (US$ 1.8 million baseline excluding contingencies and taxes, US$2.4 million estimated project costs). This component will address emergency preparedness. Activities will comprise the following elements among others: an examination of how RosHydromet information could and should be used for emergency preparedness; development of cooperation with local and regional authorities, the Ministry of Emergency and other concerned agencies to be undertaken during emergency situations; emergency preparedness planning; plans for interaction with communities; and development of publicity and information materials. Several pilots would be undertakento develop models that could be replicated and expanded to other areas in the country. One or two ofthese pilots might be undertaken at the pilot river basins selected for comprehensive upgrade ofhydrological and meteorological networks.
Component D: Project Management, Training, and Monitoring and Evaluation (US$4.7 million baseline excluding contingencies and taxes, US$6.4 million estimated project costs)
This component would support RosHydromet in project implementation, training, monitoring and evaluation of the project impact. It would include support for the operation of the Project Management Committee (PMC) and financing of overall project management, as well as technical assistance in such areas as contract administration, installation and construction supervision, procurement and financial management. The project management and implementation arrangements are further described in Annex 6.
The PMC staff would consist of senior officials and technical staff from RosHydromet who would be supported in the area ofprocurement and financial management by the specialist staff ofthe PIU. In addition, specialized technical consultants would be provided to PMC through the PIU to support component and sub-component technical directors. Project coordination offices would be maintained by RosHydromet in Moscow, Novosibirsk, Khabarovsk and Obninsk, and possibly in other regional implementation centers. These Project Coordinators will be members ofRosHydromet staff or else external individual consultants hired by the PIU. In the latter case, salaries ofthe consultants would be financed from project funds.
65 Annex 5: Project Costs RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
Local (US$) Foreign (US$) Total (US$) Component A: Modernization of Computing, Archiving and Telecommunications Facilities Al. Modernization ofthe Moscow WMC and Obninsk 21,356,444 16,535,834 37,892,278 Archiving Facility A2. Restructuring of Novosibirsk and Khabarovsk RMCs 3,951,682 5,927,522 9,879,204 and Modernization ofVoeikov GGO A3. Modemization of the Communications and Data 8,186,099 1,406,094 9,592,193 Transmission System Subtotal Component A 33,494,225 23,869,450 57,363,675 Component B: Upgrading of the Observational Networks B1. Surface Observation Network 19,477,020 2,128,105 2 1,605,125 B2. Aerological (Upper-Air) Network 5,000,000 1,110,000 6,110,000 B3. Meteorological Radars and Lightning Detection 1,05 1,000 9,500,000 10,55 1,000 B4. Regional Hydrometeorological Centers 3,644,575 2,981,925 6,626,500 B5. Hydrological Network 3,479,395 4,292,480 7,771,875 Subtotal Component B 32,651,990 20,012,510 52,664,500 Component C: Institutional Strengthening, Improvements in Output Dissemination, and Emergency Preparedness C1. Institutional Strengthening 2,904,375 5 12,500 3,4 16,875 C2. Client Service System 1,343,435 4473 15 1,791,250 C3. Emergency Preparedness and Response 1,795,670 477,330 2,273,000 Subtotal Component C 6,043,480 1,437,645 7,481,125 Component D: Project Management, Training, and Monitoring and Evaluation Subtotal Component D 5,342,789 780,000 6,122,789 TOTAL BASELINE COSTS' 77,532,484 46,099,605 123,632,089 Physical and Price Contingencies 5,708,072 3,992,839 9,700,911 TOTAL FINANCING REQUIRED 83,240,556 50,092,444 133,333,000
'Identifiable taxes and duties are US$24.0 million, and the total project cost, net oftaxes, is US$109.4 million. Therefore, the share ofproject cost net oftaxes is 73 percent.
66 Annex 6: Implementation Arrangements RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
Project implementation will be undertaken by RosHydromet, the federal agency which is responsible for delivery of the full range of hydrometeorological services to the Government and the public. This approach reflects lessons regarding project ownership and sustainability: There is a need for the immediate beneficiary to be actively engaged at all stages of design and implementation. To achieve this, it is important for the Government to be prepared to commit adequate time of relevant staff to the project and not to burden them unduly by insisting they carry out all of their usual duties in addition to working on the Project. It is intended that RosHydromet staff will be supplemented only by a small PIU providing services in areas where the required experience is missing or where an extemal, objective view would clearly benefit the Project.
A key consultant who will advise RosHydromet will be the design integrator. As noted in Section B.4, one of the important lessons leamed from other projects is that an experienced systems integrator may prove to be invaluable during system detailed design and in implementation. It is intended that such an integrator, with experience in modernizing national hydrometeorological organizations, would assist RosHydromet during detailed project preparation and during implementation to ensure that a fully integrated national weather service is maintained.
By Order #74 (dated April 23, 2004), RosHydromet established a Project Coordinating Council (PCC) to undertake project preparation and, later, implementation. In October 2004, by Order #137 (dated October 11, 2004), the PCC was effectively transformed into the Project Management Committee (PMC). The Committee Chairman is Mr. Bedritsky, the Head of RosHydromet, supported by two Deputy Chairmen, technical coordinators, and senior officials from RosHydromet and other entities. The Chairman has overall responsibility for project management, including approval of action plans, major activities and budgets. However, the Deputy Chairmen and technical Project Coordinators are responsible for operational decisions, including management of equipment procurement and installation, technical reviews, resolution of issues and supervision of activities. The Coordinators jointly play a lead role during the final stages of project preparation, in particular development oftechnical designs in consultation with the technical staff. They will be directly supported by Project Component Managers, members ofthe staff ofthe Bureau of Economic Analysis and by the design integrator.
During project implementation and following revision, there will be further specification of the PMC’s functions, responsibilities and composition.
The PMC is supported by the Bureau of Economic Analysis (BEA), an independent non- commercial legal entity that will serve as Project Implementation Unit. BEA has extensive experience gained from managing several World Bank projects in Russia, including several with large information technology procurements. BEA was competitively selected by RosHydromet and the Ministry of Finance (MoF) from among existing PIUs in Russia to assist RosHydromet in the detailed preparation of the Project. It has done so. Its work was financed from the resources (USD 1.3 million) of the Environmental Management Project, IBRD Loan 3806-RU, re-allocated by MOF specifically for the preparation of the the National Hydromet Modernization Project; in particular, development of detailed design and bidding documents. BEA has modified its Operating and Financial Manuals to adjust its administrative, operational, procurement and financial management procedures in line with the Project requirements. BEA employs qualified administrative, procurement, financial
67 management and disbursement specialists, and successfully passed the Bank’s capacity assessment review. MOF and RosHydromet believe that the practical experience gained by BEA in detailed preparation ofthe Project is likely to render it well-suited for the role ofPIU during Project implementation. Alternative implementation mechanisms - such as delegating implementation responsibilities directly to one of the existing RosHydromet entities - seem risky and likely to lead to significant delays. None of the RosHydromet entities have the relevant experience to deal with World Bank projects. However, the role of PIU will be limited to the procurement, financial and disbursement aspects of implementation - including operation of the Special Account, preparation and submission to the World Bank of claims for Special Account replenishment, and claims for disbursements of loan proceeds directly from the World Bank. Substantive decisions, meanwhile, will be undertaken by RosHydromet Project Management Committee (PMC) and other dedicated staff. To oversee and coordinate regional project implementation activities, additional Project Coordinators would be based in Obninsk, Novosibirsk and Khabarovsk, and possibly in other regional implementation centers. These Project Coordinators will be members of RosHydromet staff or external individual consultants hired by BEA. In the latter case, salaries of the consultants will be financed from project funds.
Operation of the Capacity Building Program. It was noted during appraisal that the services of certain RosHydromet employees (who are not civil servants) would be uniquely well-suited both on economic and technical grounds for the task of porting highly specialized software to be used on the new “high end” computers (supercomputers and powerful servers) provided under the project. The full benefit of high-end parallel processing is very much dependent on the way that programs use the resources that the parallel processors afford. To secure that benefit, software that uses such processors should be parallelized; that is divided into segments of code that are processed in parallel and those processed sequentially, in a way that makes most efficient use of the processors. Efficient management of processing power is key to the successful implementation of the high-end computers that will be procured under the project to assure improvements in weather forecasts. Although it would, in theory, be feasible to hire the services of external consultants to carry out this work, it is believed that this would be impractical: first, the cost of such highly-specialized and experienced consultants would be prohibitively expensive; second, the software that requires parallelization has been developed internally by RosHydromet and is to a large degree proprietary. Moreover, RosHydromet will be required to further develop this software in the course of their day-to-day work in the future and would therefore benefit from familiarity with the way the software is re-coded coded to use the parallel processors. It is also believed that specific staff of RosHydromet already familiar with the current implementation of the software would be best placed to recode and optimize it for the new systems. But this work would require a significant effort on the part of staff, beyond their current day-to-day duties. Therefore, a Capacity Building Program will be established under the project and adopted by RosHydromet through an Administrative Order for the purpose ofproviding expertise to the Project for the porting of software required in relation to the commissioning ofnew high-end computers provided under the Project. The allocation for the Program will be used in accordance with a “Capacity Building Program Manual” and will be disbursed as operating costs under the arrangements prescribed by the Program Manual and endorsed by RosHydromet. It is expected that some 125-150 individuals (who are not civil servants) may participate under Fund activities over the lifetime ofthe Project.
68 Annex 7: Financial Management and Disbursement Arrangements RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
A financial management capacity assessment was performed by the World Bank’s financial management specialist. Below is the summary report of the assessment.
Executive Summary.
As of July 2004, BEA has acceptable financial management arrangements in place to meet the current Bank requirements in respect of the quality of accounting, reporting and internal controls system and also in respect of the audit arrangements, and is ready to start both the National Hydromet Modernization Project Preparation Component of the Environmental Management Project and the National Hydromet Modernization Project as such.
Country Issues
The last CFAA conducted in the Russian Federation was in January 2001, and its results have been finalized.
Pending the graduation of the government’s financial management and procurement capacity and infrastructure to a level ofperformance that would allow the World Bank to rely on those systems, the CFAA recommended that fiduciary functions (disbursement, procurement, accounting and reporting, and operational reviews) continue to be outsourced to specialized agencies. Such agencies (possibly the successors of today’s Foundations) present the advantage of using skilled consultants and reliable, suitable, and stand-alone computerized information systems.
Based on the Bank’s current audit policy, the CFAA recommends maintaining current arrangements for the annual audit of Bank-assisted projects, which involve audit by private sector audit firms competitively appointed among those pre-selected by the Bank, in consultation with MinFin . In addition, the work performed by the Accounts Chamber should also be reviewed by the Bank on a regular basis and taken into consideration in project ’ preparation and supervision. The Accounts Chamber routinely performs documentary reviews ofBank projects because they involve intemational borrowing and the use ofbudget funds in the form of counterpart financing. These reviews are geared mostly towards assessing the efficiency and cost-effectiveness of project expenditure and the prevention and/or detection ofpossible waste ofresources and abuses.
Risk Analysis
The summary risk analysis is presented below. It should be noted that the project’s financial management risks are not considered to be significant enough to warrant inclusion in section C5 “Critical risks and possible controversial aspects” ofthe PAD.
Rating Comments Inherent risk
1. Country inherent risk Medium See CFAA
69 2. Sector inherent risk The sector (Hydromet), whch is inexperienced in Bank Medium Projects but expert in the hydrometeorology is the decision maker, whereas financial management functions (disbursement, accounting, reporting) will be performed by BEA, which has sigmficant experience in Bank Project implementation. Therefore strengths of one Entity cover weaknesses of another. 3. Project inherent risk Low
Control risk
Non-for-profit organization, which has an experience of implementation ofseveral Bank Projects. Funds Flow arrangements are acceptable for the Bank 3. Staffing Low Existing BEA staff will do the job Accounting policies have been developed and Procedures 5. Intemal Audit NIA No intemal audit function is in BEA
6. Extemal Audit Audit arrangements are adequate Format of reporting has been developed
8. Information Systems Medium The existing accounting software - Innotec - might need to be replaced during the first year(s) ofthe project implementation. OVERALLFINANCIAL MANA CEMENT RATING
Strengths and Weaknesses
The significant strengths that provide a basis of reliance on the project financial management system include: (i)the experience of the PIU and its financial management staff of implementing similar Bank-financed projects and satisfying Bank financial management requirements; (ii)the unqualified audit reports and positive management letters issued by the auditors both for BEA as an entity, and for projects implemented by it; (iii)the sound internal control system within BEA, (iv) the positive results of the Bank financial management supervisions ofBEA.
The main remaining weakness at the final stage of the financial management assessment of the project is that some of the fine details of interaction between Hydromet and BEA in respect ofproject implementation are not yet defined. The mitigating factor for this weakness is that these interaction details will not affect the basics of financial management arrangements anyway, because the functions of financial management will be fully imposed on BEA
Implementation Arrangements
Project implementation arrangements are described in detail in Section C2 of PAD.
70 Funds Flow
Disbursement of IBRD funds will be through the traditional disbursement mechanisms, including Special Account, Summary Sheets and SOE, direct payments, Special Commitments covering Letters of Credit, and guarantees. The federal funds will be disbursed through a co-financed account managed by the BEA (PIU). The project will not use the FMR-based disbursement.
Staffing
The financial department of BEA includes six accounting, disbursement and FM specialists. There is no allocation of accountants to specific Projects, instead, there is horizontal segregation of duties, where one specialist is obliged to prepare all WA, another is responsible for RAP accounting, etc.
The education and work experience of the all existing staff is adequate to the TORS for the positions.
Accounting Policies and Procedures
The BEA perform accounting in RUR for statutory reporting in accounting information system Innotec on accrual basis. Then data from Innotec is transferred to MS Excel for preparation ofthe Project’s and BEA’s (Entity’s) financial reporting.
BEA has well-developed and approved procedures for accounting, internal control and document turnover in the Operational Manual. The Operational Manual is being adjusted to the peculiarities of the National Hydromet Modernization Project
BEA will also report to Ministry of Finance, RosHydromet, and Federal Center for Project Finance and will produce financial reporting required by tax authorities. All these reports will have different formats and therefore the BEA Chart of Accounts must be sufficiently detailed to produce these reports.
Internal Audit
There is no Internal Audit function in BEA
External Audit
Annual audits for the project accounts will be carried out in accordance with the Guidelines for Financial Reporting and Auditing of Projects Financed by the World Bank.
The audit ofthe National Hydromet Modernization Project will be conducted by independent private auditors acceptable to the Bank, on standard ECA terms ofreference, and procured by BEA in accordance with the Bank procurement guidelines, followed by issuance of “No Objection” by the Bank Procurement department and/or Task Team Leader. One Auditor will audit all BEA Projects and BEA as an Entity. The audited financial statements will be sent to the Bank within six (6) months of the end of the Government’s fiscal year. The cost of the audit will be financed from the proceeds ofthe loan.
The project will involve a significant amount of equipment procurement for RosHydromet offices spread over a significant amount of locations in the Russian Federation. Therefore, an
71 annual project audit will include checks on a sample basis to ensure that the equipment has been installed and in operation in its intended facilities.
BEA and Project statutory reporting and operating activities are also expected to be audited by Accounts Chamber, KRU (regional audit body) and tax authorities.
Reporting and Monitoring
The financial part of the quarterly FMRs for the National Hydromet Modemization Project Preparation Component financed out ofthe Environmental Management Project Loan 38060- RU (in the amount ofUSD 1.3 million) will include:
(a) Project sources and uses of funds statement, (b) Statement ofexpenditure detail, and. (c) Notes to the FMRs.
The financial part of the annual FMRs for the National Hydromet Modernization Project Preparation Component financed out ofthe Environmental Management Project Loan 3 8060- RU (in the amount of USD 1.3 million), which will be subject to audit by independent auditors acceptable to the Bank and according to the Terms of Reference acceptable to the Bank, will include:
(a) Project sources and uses of funds statement, (b) Statement ofexpenditure detail, (c) Special account statement, (d) Statement ofExpenses (SOE) withdrawal schedule and (e) Notes to the FMRs.
The financial part of the quarterly FMRs for the National Hydromet Modemization Project will include:
(a) Project sources and uses of funds statement, (b) Statement ofexpenditure detail, (c) Physical Implementation Progress Report (contract management), and (d) Notes to the FMRs.
The financial part of the annual FMRs for the Project, which will be subject to audit by independent auditors acceptable to the Bank and according to the Terms of Reference acceptable to the Bank, will include:
(a) Project sources and uses of funds statement, (b) Statement ofexpenditure detail, (c) Special account statement, (d) Statement ofExpenses (SOE) withdrawal schedule and (0 Notes to the FMRs.
BEA will supply the Bank with quarterly FMRs and annual audited FMRs. In addition to FMRs, BEA will submit to the Bank annual audited Entity IFRS reporting.
72 Information Systems
The BEA information system includes Innotec software package and MS Excel. The Innotec is used for statutory and project accounting, whereas MS Excel is used for preparation ofthe Project reporting for the Bank and IFRS reporting. The data is transferred from Innotec to Excel manually.
As ofthe time of this assessment, the servicing ofInnotec has become not as convenient as it was previously, due to relocation of servicing company to Saint Petersburg. Therefore, it was recommended to BEA to consider the need for change ofthe accounting software, depending on the successfulness of resolution of two main issues: (i)convenience in servicing of the program, and (ii)capacity of the program to maintain the sufficient level of detail of the Chart of Accounts (that means, the sufficient number of sub-accounts). Should BEA decide to change the software, the relevant expenditure must be included in the procurement plan on a timely basis.
Disbursement
Disbursement of IBRD funds will be through the traditional disbursement mechanisms, including Special Account, Summary Sheets and SOE, direct payments, Special Commitments covering Letters of Credit, and guarantees. The federal funds will be disbursed through a co-financed account managed by the BEA (PIU). The project will not use the FMR-based disbursement.
BEA will be solely responsible for all disbursement aspects, including operation of the Special Account, preparation and submitting to the World Bank claims for Special Account replenishment, and claims for disbursements of loan proceeds directly from the World Bank. BEA will also be solely responsible for operation of the Project Co-financing account in Roubles, and of all other related (transit) accounts. Authorized signatories for the payment documents will be BEA General Director/BEA Deputy General Director (Project Director), and Chief Accountant/Deputy Chief Accountant.
It is suggested that the authorized allocation of the Special Account be set at USD 2.0 million, and that the initial deposit into the Special Account be USD 1.0 million, until total disbursement reaches half of the loan amount. Applications for the replenishment of the Special Account will be submitted by BEA on a regular basis, with the minimum frequency ofonce per quarter.
Loan proceeds could be disbursed against certified statements of expenditures (SOEs) for: (a) payments from Capacity Building Program; (b) civil works contracts costing less than US$lOO,OOO equivalent; (c) goods and equipment contracts costing less than US$lOO,OOO; (d) consulting firm contracts costing less than US$100,000; (e) individual consultant contracts for less than US$50,000; (0 training contracts not subject to the Bank’s prior review; and (g) incremental operating expenditures. All other contracts would be fully documented. Disbursement requests for SOEs should be submitted to the Bank monthly. Supporting documentation for SOEs would be retained by the PKJ and made available to World Bank staff during supervision missions and to external auditors.
Action Plan
Not required.
73 Supervision Plan
During project implementation, the Bank will supervise the project’s financial management arrangements in two main ways: (i)review the financial part of project’s FMRs as well as the project’s annual audited financial statements and auditor’s management letter; and (ii)during the Bank’s supervision missions, review the project’s financial management and disbursement arrangements to ensure compliance with the Bank’s minimum requirements. A Bank-accredited Moscow-based Financial Management Specialist will visit the project at least once a year.
74 Annex 8: Procurement RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
A. General
Procurement for the proposed Project would be carried out in accordance with the World Bank’s “Guidelines: Procurement Under IBRD Loans and IDA Credits” dated May 2004; and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated May 2004; and also in agreement with the provisions stipulated in the Legal Agreement. A general description of various expenditure categories is given below. For each contract to be financed by the Loan, the different procurement or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame will be agreed between the Borrower and the Bank in the form of a procurement plan. The plan will be agreed before negotiations and then updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. The most recent plan will be made publicly available through the Bank project portal and the Borrower project site.
Procurement of Works: Works procured under this Project would include rehabilitation and reconstruction of building and facilities presently in poor condition. Completion of all reconstruction works for facilities will be required a precondition to the procurement of any new equipment to be installed in those facilities.
Procurement of Goods: Goods procured under this project would include the following major investments: one large (estimated cost US$17 million) and two smaller (estimated cost US$1.6 million) supercomputers to be delivered and installed at the World Meteorological Center in Moscow and in two national regional meteorological centers (RMC) in Novosibirsk and Khabarovsk; a large server for GGO (US$0.5 million); equipment comprising data servers for operational and backup archives for the facilities at Obninsk (estimated cost US$ 5 million);. equipment permitting the establishments of local and wide area networks for all RosHydromet facilities; systems for reading and archiving paper, photographic and records on traditional magnetic media and archiving equipment will be procured for the facilities at Obninsk. Telecommunications equipment will also be procured to improve and facilitate communications between various meteorological centers, this will include substantial investment in communications equipment for data collection from remote measurement stations and from national regional and oblast centres; considerable quantities of workstations, small servers, printers, copiers and other office equipment.
In accordance with the design of the Project, a systems approach will be adopted in the grouping of contracts so as to reduce to a minimum the number of procurement actions and avoid risks associated with subsequent systems integration. Most procurements will be undertaken as single packages comprising several lots. Nearly all procurement comprising about 20 packages will be under done ICB using Bank’s SBDs for Information Systems (in most cases 2 stage procurement) or the new Harmonized Goods documents. A few contracts representing less than USD 1 million equivalent will be done under shopping procedures.
75 There will be no goods procurement under NCB. LIB may be considered for some very speciliased hardware and software for which only a few suppliers are known, although it is not likely that this would offer a significant time advantage.
Procurement of non-consulting services: There will be one large contract estimated at about US$l.7million for technical services to procure and customize software for archiving at the storage facilities in Obninsk.
Selection of Consultants: Consulting services will be required to support the operations of the Project. A systems design integrator will be hired during detailed project preparation using a QCBS procedure with an option to have the contract extended into the implementation phase subject to satisfactory performance once the Project is approved and becomes effective. There will be several relatively large and complex QCBS assignments mainly related to Component B and C of the project. These will comprise the preparation of institutional development alternatives and rationalization of the Hydromet system design and the improvement ofhydrological and meteorological monitoring networks.
Individual consultants will be hired to provide technical support for managers. Other assignments requiring the services of more that one individual will follow under CQS selection method. LCS procedures are foreseen for the hiring of a Project auditing firm. In view of the nature of the Project, most contract opportunities irrespective of estimated amount will be advertised intemationally.
Training: Approximately US$ 2.6 million equivalent will be expended for various training activities including study tours in accordance with procedures acceptable to the Bank, based on agreed procedures (AP) and the submission ofannual training plans.
Operational Costs: These costs are estimated at about USD 4.5 million dollars equivalent (including duries and taxes) out of a total project cost of 132.4 million USD, or 3.4 percent. Detailed itemized budges for PIU expenses will be reviewed by the Bank and will be spent in accordance with procedures acceptable to the Bank.
B. Assessment of the Agency’s (BEA’s) Capacitv to Implement Procurement ,-
Procurement activities will be carried out by the RosHydromet supported by the Bureau of Economic Analysis (BEA); a non-commercial legal entity which has implemented several projects in the past and is deemed to have sufficient expertise capacity for the procurement tasks under the Project. BEA is presently drafting amendments to the current BEA Operational Manual which would include a new part dealing specifically with the RosHydromet Modernization Project. This amended Manual will include a section on the procurement arrangements and procedures to be followed by the Project and will form the basis of a specific Project Operational Manual. The Project Operational Manual will also include a special section on the Capacity Building Program.
In view of the fact that BEA has successfully implemented World bank projects in the past acting in the role of a PIU it was determined that a more in-depth assessment of the capacity of the BEA to implement procurement actions for the Project is not necessary. The organizational structure for implementing the Project and the interaction between the project’s staff responsible for procurement and the RosHydromet relevant units for administration and finance has been assessed and found to be satisfactory. Any corrective
76 measures required will be addressed as they become apparent. At present a mutually satisfactory arrangement has been arrived at..
The issueshisks concerning the procurement component for implementation of the project has been identified and a procurement plan developed, designed as far as possible to mitigate these. Still the general level of risk connected with the procurement activity in Russia is still considered to be high. Due to the nature of the procurements foreseen for the project a high degree of supervision and cooperation with Bank accredited procurement staff is foreseen,
C. Procurement Plan
A Procurement Plan for project implementation which provides the basis for the procurement methods was discussed and agreed upon. Once the Project is approved, the procurement plan will be updated annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.
D. Frequency of Procurement Supervision
In addition to the prior review supervision to be carried out from Bank’s Moscow Offices, supervision missions every six months to visit the field to carry out post review of procurement actions is recommended.
77 PROCUREMENT PLAN
I. General
Scheduling of Procurement. Prior to the issuance of any invitation for bidding, the proposed procurement plan for the project will be updated by the PIU and approved by the Project Management Committee. Procurement of goods and services for the project will be carried out in accordance with the agreed procurement plan, which will be regularly updated and included in the FMRs subject to Bank's review.
(a) Agreed Date of the Procurement Plan Original: July 9,2004 Revision 1 : November 23,2004 Revision 2: ......
(b) Date of General Procurement Notice: estimated December 2004
11. Goods and technical (non-consulting) services.
(a) All contracts for goods and technical services will - to the extent practicable - be grouped in packages estimated at not less than USD 0.1 million equivalent:
(b) Prior Review Threshold: All ICB Contracts (adding up to about USD 110 million equivalent out of a total allocation of USD 133.3 million or 82.5 percent) will be subject to prior review by the Bank as stated in Appendix 1 to the Guidelines for Procurement :
(c) Pre-qualification: Bidders, if required, shall be pre-qualified in accordance with the provisions of paragraphs 2.9 and 2.10 of the Guidelines - It is envisaged that pre- qualification may be employed for the procurement of large computers and other highly specialized equipment;
(d) Any Other Special Procurement Arrangements: Direct Contracting may be used for the procurement of highly specialized equipment, however, at this time no such items have been identified in the Procurement Plan;
It is recognized that Russian authorities require equipment to be certified for use in Russia. To this end any special arrangements that need to be undertaken by companies wishing to participate in bidding and offer goods that have not so been registered in Russia will be indicated in the GPN. Foreign companies will not be prevented from participation based on non-certification of goods at time of Bidding and adequate time will be given to these companies for arranging any required formalities. All reasonable assistance in completion of such formalities will be afforded to winning Bidders.
Procurement Prior Review Comments Method Threshold ICB and LIB > $100,000 All subject to Prior Review NCB (Goods) < $100,000 NoNCB for Goods envisaged NCB (Works) < 500,000 First (1) Works subject to Prior Review NCB (Works) > 500,000 All subject to Prior Review Shopping (Goods) < $100,000 First 2 Goods contracts subject to prior review
78 Direct Contracting* - All subject to Prior Review and justification
111. Consulting Services.
(a) The list of consulting assignments comprises about 25 individual consultants contracts and about a dozen consulting assignments to be carried out by firms.
(b) All consulting assignments for firms estimate to cost above USD 0.1 million equivalent per contract and all consulting contracts for individuals estimated at about USD 0.05 million per contract (USD 4 million out of a total allocation of USD 5.6 or 70 about percent) will be subject to prior review by the Bank as stated in Appendix 1 to the Guidelines Selection and Employment ofConsultants.
(c) Short list comprising entirely of national consultants: Short list of consultants for services, estimated to cost less than US$ 200,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.
(d) Any Other Special Selection Arrangements:
The Project Team has requested and received a blanket waiver prior to the start ofthe project concerning eligibility requirements for hiring of Govemment-owned enterprises or institutions in the Borrower’s country and institutions partially funded by the Beneficiary (relating to para. 1.1 1 of the May 2004 Guidelines). OPRC discussed and agreed with the proposal for a period of the first two years of the Loan, subject to close monitoring of the procurement process and supervision of contract implementation. A recommendation was made that the first few contracts procured based on this waiver should, in fact, be subject to Prior Review. The basis for the waiver would be reviewed 2 years after Project effectiveness.
HIRING OF GOVERNMENT-OWNED OKGANISATIONS, ORGANISATIONS and INDIVIDUALS AFFILIATED WITH OR PARTIALLY FUNDED BY THE BENEFICIARY. Many of the Consultancy assignments related to the success of the project are dealing with highly specialized fields of expertise related to hydrometeorology and weather forecasting and their success and relevance will depend not only on an in depth knowledge and experience of the field concerned but also on an understanding ofthe situation in the Russian Federation. As such, these are specialized areas where various research institutes and entities, subordinate or reporting to the Beneficiary (RosHydromet), and partially funded by the Beneficiary, Federal, or regional budgets, possess unique qualifications and experience. Private sector is not well developed in this field due to lack of a market and the fact that the bulk of available funding for this work comes either directly from the Beneficiary or from federal and regional budgets on a non-competitive basis. At appraisal, an initial non- exhaustive list of Institutes whose elimination from participation as government-owned or funded entities would undermine the chances for achievement of the overall project development objective, seriously decrease the quality of the project implementation and threaten its entire success. Following is the initial list of entities that have been identified within the “system” of RosHydromet although the formal relationships, legal status and level of funding vary. The list may be added to, as appropriate, during the course of Project Implementation: a) Scientific-Industria1 Company “Typhoon”; b) Main Geophysical Observatory “named after A.I. Voeikov”;
79 Institute for Applied Geophysics named after Academician Ye.K. Fedorov ; State Hydrological Institute; Central Aerological Observatory; Mountain Geophysical Institute; Arctic and Antarctic Scientific-Research Institute; All Russian Scientific-Research Institute of Hydrometeorological Information (World Data Centre; Institute for Global Climate and Ecology of RosHydromet and Russian Academy of Sciences; Scientific-Research Centre ofSpace Hydrometeorology “Planeta” Hydrometeorological Scientific-Research Center ofthe Russian Federation; RosHydromet Main Computing Center; m) RosHydromet Main RadioMeteorological Center.
The following assignments have been identified which would benefit from the services of these entities or individuals employed by these entities on the understanding that no entity (or individual) will appear on a shortlist for any assignment where it is the direct beneficiary of the outputs ofthe assignment. a) Detailed design ofpilot hydrological networks; b) Detailed design ofpilot meteorological networks; c) Support to defining detailed technical specifications; d) Development ofa regulatory framework for RosHydromet; e) Development ofinnovative approaches and institutional alternatives; f) Development (and porting) of specialized software for weather and hydrological modeling and forecasting; g) Development (and porting) of specialized software for archiving of hydrometeorological data; h) Specialized training activities. Consultants for assignments under above mentioned activities will be selected using QBS or CQS methods or as Individual Consultants put forward by these Institutes. Short lists will be composed on the basis of expressions of interest submitted in response to advertisement of each such assignment in the national press. As the assignments will each be below the threshold of US$200,000 short lists will comprise only these national entities or individuals from the agreed list of entities. In justifiable cases, with the prior agreement of the Bank, single source selection will be used. As it is hoped a private sector will emerge and develop over the course of the Project it is expected to review this arrangement after the first two years ofProject Implementation.
Selection Method Prior Review Comments Threshold Competitive Methods (Firms) > $200,000 All subject to prior review QCBS Competitive Methods (Firms) Any amount First contract subject to prior LCS review
80 Competitive Methods (Firms) < $100,000 First 2 contract subject to prior CQS review Individual Consultants (IC) > $50,000 All Individual Consultants (IC) < $50,000 First 2 contract subject to prior review Single-Source All subject to prior review and (Firms and Individuals) justification TORSfor Consulting Contracts All All subject to prior review methodshalues
IV. Other
(a) Ex-Post Review: All other contracts below Banks prior review threshold are subject to Bank’s selective ex-post review. Periodic ex-post review by the Bank will be undertaken during regular supervision missions. Procurement documents, such as bidding documents, requests for proposals (RFP), bids, tenders, bid evaluation reports and correspondence related to bids and contracts will be kept readily available for Bank’s ex-post review during supervision missions or at any other points in time.
(b) Capacity Building Program: A Capacity Building Program will be established under the project and adopted by RosHydromet through an Administrative Order solely for the purpose of providing expertise to the Project for the adaptation of software required in relation to the commissioning of new high-end computers provided under the Project. The allocation for the Program will be used in accordance with a “Program Handbook” and will be disbursed as operating costs under arrangement prescribed by the Program Handbook and endorsed by RosHydromet. It is expected that some 125-150 individuals (who are not civil servants) may participate under Program activities over the lifetime of the Project.
Record Keeping: The PIU will maintain complete procurement files which will be reviewed by Bank supervision missions. All procurement related documentation that requires Bank prior review will be cleared by Procurement Accredited Staff (PAS) and relevant technical staff. A total of 3 packages above mandatory review thresholds by RPA are anticipated., of these one is above the OCPR threshold. Procurement information will be recorded by the PIUs and submitted to Bank as part of the quarterly (FMRs) and annual progress reports. A simple management information system with a procurement module would be established to assist the PIU procurement specialists to monitor all procurement information.
81
n L Annex 9: Economic Analysis RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
Introduction. In the past three decades, more than 150 journal articles, books and reports have assessed the economic benefits associated with use of hydrometeorological information and weather forecasts. These studies have addressed a range of weather-sensitive economic sectors and a wide variety offorecast types. The common result ofall these studies is that use ofweather forecasts generates positive economic effects relative to the “naive” or no-forecast case. In addition, studies comparing the aggregate benefits of forecasts (i.e., summed over all economic sectors) to the aggregate costs of monitoring, data analysis and dissemination of forecasts indicate that these weather products yield benefits in excess ofcosts.
Historically, assessment of the economic efficiency of hydrometeorological information in Russia has been confined to isolated studies of fragmentary aspects ofRosHydromet’s activities and theoretical studies on valuation of benefits. Studies in Russia normally employed an approach based on the natural integration of losses. These aimed at generalization of losses in different sectorshranches ofthe economy caused by one ofthe hydrometeorological phenomena (e.g. drought, flood or strong wind), or focused on investigation of a specific area ofRussia (e.g. European Russia, etc.). In the course of preparation of the National Hydromet Modernization Project, the project team jointly with RosHydromet staff revised and extended this approach in an effort to evaluate the economic benefits of the proposed project and estimate the value of hydrometeorological information to the weather-dependent sectors of the Russian economy.
Methodology. The authors ofthe study aimed to analyze the immediate impact of improvement in the quality and the increased lead time of weather forecasts on the level of economic losses. Assessment of the project’s economic efficiency was performed by comparing potentially preventable losses in main weather dependent sectors of economy with the cost of their prevention together with the cost of upgrading RosHydromet’s system as under the IBRD modernization project. Sectoral experts from agriculture, the power and gas industry, aviation, forestry, inland water transport, communications, water resources, and the municipal sector participated in the study, providing baseline information and sectoral assessments. Chief Economist ofNOAA contributed to the development ofthe methodology and participated in the workshop with sectoral stakeholders.
The methodological approach was based on the following principal assumptions: 0 Modernization ofthe hydrometeorological service as proposed by the project will enable Hydromet to significantly improve the quality and lead time of forecasts. Increased quality and lead time will, in tum, help to avoid some or all preventable losses that would otherwise be incurred. This important assumption was verified by an experts’ survey (i.e., by interviewing experts in weather-dependent sectors of economy). Specific estimates of projected improvements in lead time of forecasts (agreed with RosHydromet) were furnished for sectoral experts’ consideration. 0 The costs of carrying out specific measures for prevention of losses given current forecasts (i.e., in the without-modernization case) are assumed to be incurred in full. In other words, it was assumed that there were enough funds to carry out necessary preventive measures and, consequently, the incurred potentially-preventable-losses only
85 correlate with the quality and lead time of forecasts. It was also assumed that users possess some modem protective technology, whose cost of application will grow proportionally to the growth ofintensity ofa hazardous weather events.
A sectoral questionnaire and a unified format for report on experts' evaluation results was developed and agreed with sectoral experts. Each expert put together a summary including:
0 a characterization ofhydrometeorological information used in the industry, including the spectrum ofgeneral information and its current level ofaccuracy and lead time;
e an assessment of the economic efficiency of utilization of hydrometeorological information including: (i)evaluation of the profit share derived through the use of hydrometeorological information; (ii)evaluation ofthe amount ofavoided and prevented damage attributable to access to hydrometeorological information; (iii)cost ofacquisition ofhydrometeorological information (if any), and its share oftotal costs; e an assessment ofthe economic effects ofthe implementation ofthe National Hydrometeorological Modernization Project.
The following formulas were used to quantify potential benefits based on sectoral data:
E = (El + G)/PC, where El = V(CRiSi- CZAi)/n;
m G = R-S.Pd*zGDP,,*( 1 + r)". (3) 0
where PC are the project costs; Ri, Si are the average percentage values of potentially preventable losses and the proportion ofpotentially preventable losses that could be avoided due to modernization of RosHydromet as envisaged in the project; V is the average annual level of losses from weather hazards (hydrometeorological cataclysms) for the economy at the existing forecasting quality level; Ai is the proportion of change in the level of expenditures for activities necessary for prevention of the impact of weather hazards and unfavorable weather conditions resulting from improvement in the accuracy and increased lead time of hydrometeorological information; Ci are the average annual expenditures for protective measures for a sector; R, S are the coefficients determining the proportion of saved lives as a result of project implementation; n - number of sectoidindustries reviewed in the study; Pd is the number of human losses from weather hazards; GDP,, is the per capita gross domestic product in 2002 (at market prices); m is the average duration of economic activity per human victim (years); r is the average annual long-term growth rate of real GDP.
Assessment of overall losses from hazardous weather events in Russia. The overall vulnerability of the Russian Federation to weather conditions is high, particularly in the North, Far East and North Caucasus regions, which are the most exposed to the extreme weather conditions and events. The number of dangerous weather events is growing, and damages are high and have a tendency to grow further (see Figure 8, Annex 1). According to the first major attempt to assess the average level of total economic losses from all natural hazards and unfavorable weather conditions, undertaken by the Russian Academy of Sciences in 1990, total 86 losses averaged Rub 15.5-19 billion annually during the 1980 (1990 Rub). Taking this analysis as a starting point, an updated estimate was produced in “Assessment and Management of Natural Risks” (2003) for the current average level of total annual losses from natural hazardous phenomena (floods, earthquakes, mudslides, strong winds, erosion, cold and heat waves, etc.), which increased the range oftotal losses to USD 20 - 26 billion annually finding the range of total losses at present USD 20 - 26 billion annually. This estimate includes both direct and indirect losses. The increase of losses is attributable to aging infrastructure, lack of investment in preventive and protection activities and an increased number of extreme events, among other factors.
The Ministry of Emergencies (MOE) regularly records all casualties and economic losses resulted from man-made and natural disasters. This data is presented in annual State Reports on the Status of Protection of the Public and the Russian Territories from Man-made and Natural Emergencies. A record of major natural disasters that have taken place on Russian territory in recent years is presented below as Table 3. The MOE State Report, 2001, estimates the amount of direct reported economic losses from all natural hazards in 2001 at Rub 33.1 bln (USD1.l bln).
Table 3. Major Natural Disasters on the Territory of Russia, 1990-2002
Direct Losses Social Date Disaster Type and Location Economic, Death-Roll Affected $ mln. People
June 18 - July 5,2002 Flood in the South of Russia 484 114 389,752 Ice Jam Flood in Sakha Republic More than May 12 - May 24,2001 (Yakutia) on Lena, Nyuya, Vitim 240 7 50,000
- . . .. - --- I Landslides inFhecnG and - .- 1 I ~~___Morethan.._..__ I March - April, 1YY8 I40 - I In I 12,000 I Typhoon with floods in Primorsky More than More than August, 1996’ 4 ,’ Krai 170 100,000 Neftegorsk Earthquake, Sakhalin More than More than May25, 1995 240 Island 2000 240 Far East, Primorsky Krai. Typhoon. September, 1994 140 13 18 1 84 settlements are flooded 1 1 1 1 Flood downstream Volga-Kama Dam 1991 318 Cascade Far East, Primorsky Krai. Flood 1990 472,8 16,000 caused by typhoon “Robin” Chita oblast. The largest flood in the - August, 1990 oblasthistory 746,4 April, 1990 Flood in Bashkortostan Republic 250 12
The data shows a predominance of effects from weather-related disasters among the various types ofnatural disasters. The large impact of floods has been estimated in several studies. The MOE State Report for 2002 estimates average annual losses from flooding at Rub 100 bln. (over
87 USD 3 bln). The “Concept on Development of State Water Resources and Water Sector Management” developed by the Russian Ministry of Natural Resources in 2002 estimates average annual economic loss from floods at Rub 41.6 billion (USD 1.43 bln). An earlier study of economic losses from floods in Russia undertaken by M. Cherepansky (2000) estimates this value at about USD 1 bln. a year.
Taking all weather-related losses together, an independent assessment derived from the reviews undertaken for the study by sectoral experts estimates direct annual economic losses at Rub. 58,2 billion (USD1.93 billion), and yields a distribution of direct losses by sector as in the table below:
Average annual Sector/Industry economic losses (billion Rub.) Power Communications 0.1 1 Water resources I 20,o Municipal services 2.58-
Inland water transport I 10,o** Civil aviation
* - assessmentfor municipal services was conductenfor MOSCOW city and scaled upfor all major cities; ** - direct economic losses for civil aviation are insignifcant .;*e - direct economic losses estimated for the period of 1996-2002 lttt - direct economic losses estimated for the period of 1996-2003
Comparison of data from the available studies suggests that that the most likely range of direct economic losses from hazardous weather events in Russia is USD 1-2 billion per year. This range is comparable with the losses reported in other large countries. For example, in the US, average annual losses from extreme weather and water events are reported to be USD 11 billion (NOAA, “National Weather Service Strategic Plan for FY 2003-2008,” 2003), while damages from individual catastrophes may reach USD 20-30 billion (Hurricane Andrew in 1992, Midwest flooding in 1993). In Canada, annual losses from natural hazards are over USD 1 billion (“An Assessment ofNatural Hazards and Disasters in Canada,” 2003) with maximum losses reaching USD 5.4 billion (Ice Storm in 1998). Estimated benefits of the project. Project implementation will affect the level of the material cost of preventive measures for different branches and sectors of the economy to varying degrees. While in some sectors, such as water management, civil aviation and communications, a significant reduction (from 7.5 to 25 per cent) of the cost ofprotective measures is projected, in other sectors, including the power industry, gas industry and municipal services, the cost of preventive measures is expected to increase. The most sensitive sector here is municipal services, where the cost of preventive measures is expected to increase by more than 100 percent. This will have an appreciable effect on the cost of preventive measures integrated over the entire
88 economy: it is estimated that the cost of protective measures will increase on average by 7.9 percent .
It is anticipated that project implementation will help to reduce the loss of human life from weather hazards. Available estimates indicate that the economic effect ofsaving human lives as a result of improvement of the quality and, particularly, lead time of forecasts, will exceed US$7 million per annum. This is the most conservative estimate; it is based solely on assessment ofthe impact of human losses on GDP dynamics and does not take into account the social and other damages. Hence, it represents the lower level of potential economic benefits, since it is based solely on assessment ofthe impact ofhuman losses on the GDP dynamics and does not take into account the value ofa human lifeper se.
Preliminary results ofthe study indicate that the improvement in the quality and lead time ofthe weather forecast that is expected to follow project implementation will have a large positive economic and social impact, which may be quantified making use ofthe following estimates:
e Direct losses caused by unfavorable weather and hydrological conditions and disasters would decrease by 8.5 percent on average. The most sensitive sector to the improved quality ofweather forecasts and warnings would be the sector of municipal services and city economy, where annual losses are expected to decrease by 12 percent.
e Annual direct economic losses in Russia are at present in the range ofUSD 1 to 2 billion with the largest share oflosses caused by floods.
e The total annual economic effect of the project, based on the above range of current direct losses, would amount to USD 68.3-153.3 million. If similar economic effects are sustained over seven years (a conservative estimate in light ofthe assumptions made), the near-term economic effect ofthe project could be in the range ofUSD 478- 1,073 million, far exceeding project costs. This means that the economic viability (economic efficiency) ofthe project (at the investment cost ofaround US$110 million) stands at 1:4.5 - 1:lo. In other words, every US dollar used towards RosHydromet's modernization would help to avoid from US$5 to US$10 losses to the Russian economy. Though substantial, this level of expected benefit is in line with recent estimates that for every $1 spent for mitigating natural hazards there is an $8 reduction in economic losses (Worldwatch Institute, 2001).
According to RosHydromet data, total economic benefits gained as a result of provision of its services were Rub 10 billion (USD 330 million) in 2003. The largest share ofthose benefits was received by the fuel and energy sector (36 percent), followed by agriculture, the marine sector (including sea transport and fishing), the municipal sector and motor transport (7-10 percent each). The share of inland water transport and construction in total benefits amounted to about 4- 6 percent. Estimating that the minimum economic effect of the project following its completion will be a benefit of USD 68 million annually, the total economic benefit ofRosHydromet's work (the amount of avoided losses attributable to it) is expected to grow at least by 20 percent in comparison to its current overall level, to USD 330 million.
89 Annex 10: Safeguard Policy Issues RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
The project poses minimum environmental risks. The proposed project does not involve any new construction or major refurbishment works, all facilities are currently used by RosHydromet. Moreover, the project will provide great environmental benefits, since it will support in mitigating natural hazard risks and in improving environmental management. A comprehensive hydrometerological system coupled with a strong agency responsible for its operation and maintenance will set the foundation for reducing the risks associated with floods, drought and fire, winds, extreme weather events and even industrial accidents. It is expected that the project will have a significant effect on enhancing the livelihoods particularly of the poor fractions of population by reducing vulnerability to environmental change, flooding and also routine weather contingencies that can affect marginal livelihoods such as small enterprises and farms. Overall, the project does not trigger any major safeguard policies, therefore, in terms of environmental impact, the project is rated as an EA category C project.
Attention will be given to include relevant standard environmental guidelines in bidding packages for civil works associated with the refurbishing of existing buildings as well as for the installation of new equipment. Another reference will be made to ensure safe handling and disposal of construction solid waste, debris and dysfunctional IT equipment. The standard environmental guidelines dictated by the Russian EA procedures are incorporated in the BEA (PW) Operational Manual. A full understanding with Hydromet officials and BEA is reached on the importance to deal with environmental issues and the need for their mitigation should they be identified in the course ofproject implementation.
90 Annex 11: Project Preparation and Supervision RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
Planned Actual PCN review 10/15/2003 9/12/2003 Initial PID to PIC - 10/08/2003 Initial ISDS to PIC - 10/08/2003 Appraisal 6/20/2004 6/2 0/2 004 Negotiations 91’1 0/2004 11/22/2004 BoardRVP approval 12/16/2004 3/17/2005 Planned date of effectiveness June 2005 Planned date ofmid-tenn review April 2008 Planned closing date Septkmber 2010
Key institutions responsible for preparation of the project: 3 Federal Service for Hydrometeorology and Environmental Monitoring (RosHydromet) k Bureau ofEconomic Analysis
Bank staff and consultants who worked on the project included: Name Title Unit Vladimir Tsirkunov Sr. Environmental Spec., TTL ECSSD Jonathan Pavluk Sr. Counsel LEGEC Hannah Koilpillai Finance Officer LOAGl Masood Ahmad Lead Water Resource Spec. ECSSD Anna Wielogorska Sr. Procurement Spec. ECSPS Lucy Hancock Operations Analyst ECSSD Karl Skansing Sr. Procurement Spec. ECSPS Sergei Ulatov Economist ECSPE Tatyana Shadrunova Program Assistant ECCUl Anna-Maria Bogdanova Program Assistant ECCUl David Law Consultant NA Terry Allsopp Consultant NA Marina Smetanina Consultant NA Alessandro Palmieri Lead Dam Specialist ESDQC Rita Cestti Sr. Water Resources Econ. ECSSD Glenn Morgan Lead Environmental Spec EASEN Ajay Mathur Team Leader Climate Change ENV Alexander Mizgunov Financial Management Spec. ECSPS Ekaterina Arsenyeva Financial Management Spec. ECSPS Galina Kuznetsova Sr. Financial Mgt Spec. ECSPS Bank funds expended to date on project preparation: 1. Bank resources: US$335,492.94 2. Trust funds: US$ 18,672.80 3. Total: US$ 354,165.74
Estimated Approval and Supervision costs: 1. Remaining costs to approval: US$14,289 2. Estimated annual supervision cost: US$113,000 91 Annex 12: Documents in the Project File RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
Assessment and Management of Natural Risks. Volume 6 of the Series “Natural Hazards in Russia”. Moscow, 2003
Cherepansky, M.M. Characteristics ofFlood Risk in the Russian Federation. Minsk, 2000.
Colgan, Charles S., and Rodney Weiher. Linking Economic and Environmental Goals in NOAA’s Strategic Planning. Draft, September 26,2002.
Concept on Development of State Water Resources and Water Sector Management. Ministry of Natural Resources of the Russian Federation, 2002.
Etkin, D., Haque, E., Bellisario, L., and I.Burton. An Assessment ofNatural Hazards and Disasters in Canada - A Report for Decision-Makers and Practitioners. 1SBN:O-9735436-0-4
Federal Law “On Hydrometeorological Service” #113-FZ dated July 19, 1998.
Governmental Resolution “On Information Services in Hydrometeorology and Monitoring of Environmental Pollution”, # 1425 dated November 15, 1997.
Houston, Laurie L., Adams Richard M., and Rodney F. Weiher. The Economic Benefits of Weather Forecasts: Implications for Investments in Rushydromet Services. Report Prepared for NOAA and the World Bank under NOMContract OG 1330-04-SE-0052. May, 2004.
Hydrometeorological Hazards. Volume 5 ofthe Series “Natural Hazards in Russia”. Moscow, 2001.
Information Brief on Equipment for Observations and the Observational Network of
RosH ydrome t . %~
Instructions. Criteria of Dangerous Hydrometeorological Phenomena and Order OfInitiation of Storm Alarms. Guiding Document 52.04.5 63 -2002.
Manual #8 on Meteorological Instruments and Observation Methods. WMO.
National Weather Service Strategic Plan fir FY 2003-2008. NOM, 2003.
Order “ Activities ofRosHydromet’s Organizations and Institutions in case ofEmergency”. 2000.
Ragozin A.L. Federal Assessment of Natural Hazards Risk - A Strategic Foundation for Reduction of Losses from Natural Disasters and Man-Caused Calamities on the territory of Russia. Proceeding ofthe 6th Scientific Conference “Emergency Situations Risk Management”. Moscow, 2001.
92 Ragozin, A.L. Assessment of Economic Losses from Hazardous Natural and Man-Caused Processes on the territory ofRussia. 2004.
RosHydromet Annual Review 2002. Russian Federal Service for Hydrometeorology and Environmental Monitoring, Moscow, 2003.
RosHydromet Annual Review 2003. Russian Federal Service for Hydrometeorology and Environmental Monitoring, Moscow, 2004.
Scheme ofTransmission of Hydrometeorological Information to the RUT in Novosibirsk.
Smith, Douglas A., and Keith Vodden. Valuing Meteorological Products and Services: Discussion Paper. Prepared for Meteorological Service of Canada. N0594, April 2003.
State Report “On the Status of Defence of Population and Territories of the Russian Federation from the Natural and Man-Caused Disasters in the Year of 2001”. RF Ministry for Civil Defense Matters, Emergency situation and Elimination of Consequences ofNatural Disasters. Moscow, 2002.
State Report “On the Status of Defence of Population and Territories of the Russian Federation from the Natural and Man-Caused Disasters in the Year of 2002”. RF Ministry for Civil Defense Matters, Emergency situation and Elimination of Consequences of Natural Disasters. Moscow, 2003.
Vorobiev, J.L., Akimov V.A., and J.I. Sokolov. Catastrophic Floods ofthe 21StCentury. Lessons and Conclusions. Moscow, 2003.
Extracts from Web site of RosHydromet 0 System of obtaining information. www .mecom.droshvdro/pub/rus/book/poluchenie.htm. e System for processing information. www.mecom.ru/roshvdro/pub/rus/book/obrabot.htm. 0 System for providing information to users. www.mecom.ru/roshvdro/pub/rus/book/dovedenie.htni. e System for providing information to users. www.mecom.ru/roshvdro/pub/rus/book/dovedenie. htm. e Active measures. www .mecom.droshvdro/pub/rus/book/vozd.htm.
Forecasting gains expected
Table: The development of MRF system in Hydrometcenter ofRussia.
Table: Error S1,2002 and forecast for 2006, at DWD, ECMWF, RosHydromet Center, for forecast times from 24 to 168 hours.
Further information on some RosHydromet programs
System ofobservations of the level and temperature ofthe Caspian Sea.
93 About the center for drought monitoring - Intergovernmental Council on Hydrometeorology - SNG [which is CIS?].
List ofpresentations by users ofhydrometeorology at the meeting with the mission ofthe World Bank. (Novosibirsk)
Estimation of ecological future of urban and industrial regions (Novosibirsk)
Output examples
Prognosis ofweather for August 2003 for Novosibirsk oblast.
Bulletin from the Hydrometeorological Center, No. 8. Forecast ofweather for August 2003 (Novosibirsk)
Weather bulletin - Novosibirsk city and oblast, 14 May 2003.
Weather bulletin - Novosibirsk city and oblast, 15 July 2003.
Agrometeorological bulletin for Novosibirsk oblast, No. 18, 3rd dec., June 2003
Hydrological bulletin for Altaisk krai, Republic of Altai, Kemerovsk, Tomsk and Novosibirsk oblast, 17 July 2003.
Documents pertaining to the mission or the project
Technology Development in Regional Hydro-meteorological Centers and Rosgidromet Observation Networks: An Indicative Cost Estimate. (versions of July 15 and July 27,2003, the latter in English and Russian).
Short summary ofmeetings with the World Bank (Novosibirsk)
Program for the mission ofthe World Bank (Novosibirsk)
94 Annex 13: Statement of Loans and Credits RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
~~~ Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d PO75387 2004 E-LRN SUPRT (APL #1) 100.00 0.00 0.00 0.00 0.00 100.00 6.24 0.00 PO64237 2003 TBIAIDS CONTROL 150.00 0.00 0.00 0.00 0.00 148.49 35.14 1.96 PO46497 2003 HEALTH REF IMP 30.00 0.00 0.00 0.00 0.00 29.15 10.78 0.57 PO66155 2003 TAX ADM 2 100.00 0.00 0.00 0.00 0.38 87.83 25.55 2.21 PO72960 2003 CUSTOMS DEVT 140.00 0.00 0.00 0.00 0.00 127.83 21.06 2.77 PO69063 2003 ST. PETERSBURG ECON DEVT 161.10 0.00 0.00 0.00 0.00 159.49 -1.61 0.00 PO64508 2002 TREASURY DEVT 23 1.OO 0.00 0.00 0.00 0.00 227.45 14.95 0.00 PO64238 2001 N RESTRUCT 80.00 0.00 0.00 0.00 0.00 67.80 59.59 2.13 PO38551 2001 MUN HEATING 85.00 0.00 0.00 0.00 0.00 59.22 38.21 35.03 PO50474 2001 EDUC REFORM 50.00 0.00 0.00 0.00 3.00 32.83 29.53 2.30 PO46061 2001 MOSC URB TRANS 60.00 0.00 0.00 0.00 0.00 33.23 31.35 0.00 PO08832 2001 MUN WATER & WW 122.50 0.00 0.00 0.00 0.00 111.20 88.74 24.34 PO58587 2000 REG FISC TA 30.00 0.00 0.00 0.00 0.00 12.37 12.37 2.70 PO53830 2000 SUST FORESTRY PILOT 60.00 0.00 0.00 0.00 0.00 54.16 54.16 30.52 PO50487 1999 STATE STATS SYST 30.00 0.00 0.00 0.00 0.00 4.13 4.13 4.13 PO50891 1997 ELEC SECTR REF 40.00 0.00 0.00 0.00 1.52 13.21 14.73 14.73 PO44200 1997 BUREAU OF ECON POL 22.60 0.00 0.00 0.00 0.00 0.26 0.26 -0.04 PO08831 1996 LEGAL REFORM 58.00 0.00 0.00 0.00 0.50 19.92 20.41 19.92 PO42622 1996 CAP MRKT DEV 89.00 0.00 0.00 0.00 33.75 15.38 49.13 15.38 PO08821 1995 ENV MGMT 1 10.00 0.00 0.00 0.00 0.00 36.85 36.85 0.57 PO08828 1994 FIN INSTS 200.00 0.00 0.00 0.00 115.12 3.83 118.95 47.05 Total: 1,949.20 0.00 0.00 0.00 154.27 1,344.63 670.52 206.27
95 RUSSIAN FEDERATION STATEMENT OF IFC’s Held and Disbursed Portfolio In Millions ofUS Dollars
Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2002 AgroIndFinC 5.00 0.50 0.00 10.00 3.83 0.50 0.00 7.67 2003 BCEN Eurobank 100.00 0.00 0.00 0.00 100.00 0.00 0.00 0.00 2004 BSGV 75.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2004 BSGV Leasing 21.62 0.00 0.00 0.00 11.03 0.00 0.00 0.00 2001 BVF 0.00 12.62 0.00 0.00 0.00 8.89 0.00 0.00 2002 Baltiski Leasing 0.44 0.00 0.00 0.00 0.44 0.00 0.00 0.00 2004 Bauxite Timana 45.00 0.00 0.00 30.00 0.00 0.00 0.00 0.00 2002 Borsteklo 14.48 0.00 0.00 0.00 14.48 0.00 0.00 0.00 2002105 Cen ter-Invest 0.00 0.00 5.00 0.00 0.00 0.00 5.00 0.00 2002/03 Delta Credit 24.00 0.00 6.00 0.00 24.00 0.00 6.00 0.00 2004 Delta Leasing 4.00 0.00 0.00 0.00 3.00 0.00 0.00 0.00 2002 Egar Technology 0.00 1.50 0.00 0.00 0.00 1.oo 0.00 0.00 2002 IBS 0.00 0.00 8.00 0.00 0.00 0.00 8.00 0.00 2002 ICB 8.57 0.00 0.00 0.00 8.57 0.00 0.00 0.00 2004 INTH 0.00 3.50 7.00 0.00 0.00 0.00 5.00 0.00 2000 Ikea MOS 15.00 0.00 0.00 0.00 15.00 0.00 0.00 0.00 2002 KMB Bank 6.29 0.00 0.00 0.00 6.29 0.00 0.00 0.00 2004 Krono Swiss 50.00 0.00 0.00 58.51 50.00 0.00 0.00 58.51 2004 Kronospan Russia 57.15 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2004 Kulon 0.00 0.00 7.47 0.00 0.00 0.00 5.87 0.00 2004 Lebedyansky 35.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2005 Moscow Credit Bk 10.00 0.00 0.00 0.00 1.oo 0.00 0.00 0.00 2003 Moscow Narodn... 100.00 0.00 0.00 0.00 100.00 0.00 0.00 0.00 1998 Mosenergo 11.24 0.00 0.00 0.00 11.24 0.00 0.00 0.00 2002/03 NBD 5.00 0.00 2.00 0.00 5.00 0.00 2.00 0.00 2001 NMC 2.21 0.00 0.00 0.00 2.21 0.00 0.00 0.00 2001 OMGC 0.00 0.00 1.50 0.00 0.00 0.00 I.50 0.00 2004 Pilkington Rus 57.83 0.00 0.00 0.00 17.35 0.00 0.00 0.00 2001 Probusiness Bank 0.00 0.00 5.00 0.00 0.00 0.00 5.00 0.00 2004 RZB Leasing Russ 20.00 0.00 0.00 0.00 6.50 0.00 0.00 0.00 2003104 RZB Russia 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00 1998/01/02 Ramstore 27.86 0.00 10.00 26.25 27.86 0.00 10.00 26.25 2003 Ru-Net 0.00 3.00 3.00 0.00 0.00 3 .oo 2.00 0.00 200 1/03/04 Ruscam 17.50 0.00 0.00 0.00 17.50 0.00 0.00 0.00 2002/04 Russ Smdard Bnk 41.06 0.00 0.00 0.00 29.06 0.00 0.00 0.00 1995 Russ Tech Fnd 0.00 0.91 0.00 0.00 0.00 0.91 0.00 0.00 2005 RussiaPartnersII 0.00 10.00 0.00 0.00 0.00 0.50 0.00 0.00 2004 Russkiy Mir 13.93 0.00 0.00 0.00 13.93 0.00 0.00 0.00 SCF Restructured 0.00 0.60 0.00 0.00 0.00 0.60 0.00 0.00 2004 Severstaltrans 40.00 0.00 0.00 0.00 15.00 0.00 0.00 0.00 2004 Sibakadembank 7 .OO 0.00 0.00 0.00 3 .oo 0.00 0.00 0.00
96 2004 Siberia Airlines 20.00 0.00 5.00 0.00 0.00 0.00 0.00 0.00 2002 Sonic Duo 0.00 0.00 6.00 0.00 0.00 0.00 6.00 0.00 2003 Stav. Broiler 15.00 0.00 0.00 0.00 12.50 0.00 0.00 0.00 2004 Sveza 40.50 0.00 0.00 0.00 20.00 0.00 0.00 0.00 2002 Swedwood Tichvin 7.37 0.00 0.00 0.00 7.37 0.00 0.00 0.00 2003 UralTransBank 10.00 0.00 0.00 0.00 5.00 0.00 0.00 0.00 2001 Volga-Dnepr 14.00 0.00 2.90 13.00 14.00 0.00 2.90 13.00 2002 ZAO Europlan 7.14 0.00 0.00 0.00 7.14 0.00 0.00 0.00 1998102 ZAO Storaenso 5.60 0.00 0.00 0.00 5.60 0.00 0.00 0.00 Total portfolio: 944.79 32.63 68.87 137.76 567.90 15.40 59.27 105.43
Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 1999 DLV 0.00 0.00 0.00 0.00 2003 Deltacredit Bank 0.03 0 01 0.00 0.00 2003 Intercell Russia 0.00 0.00 0.00 0.00 2004 NWSC 0.02 0.00 0.00 0.02 2003 Quadriga Capital 0.00 0.02 0.00 0.00 2002 RSB I1 0.00 0.00 0.00 0.00 2004 RSB 111 0.02 0.00 0.00 0.00 2004 vsc 0.03 0.00 0.00 0.02 2003 Vneshtorgbank 0.00 0.00 0.20 0.00 Total pending commitment: 0.10 0.03 0.20 0.04
97 Annex 14: Country at a Glance RUSSIAN FEDERATION: NATIONAL HYDROMET MODERNIZATION PROJECT
Europe B Lower- POVERTY and SOCIAL Russian Central middle- Federation Asia income Developmentdiamond' 2003 Population, mid-year (millions) 143.4 473 2,655 Life expectancy GNI per capita (Atlas method, US$) 2,610 2,570 1,480 GNI (Atlas method, US$ billions) 374.8 1,217 3,934 - I Average annual growth, 199703 Population(%) -0.4 0.0 0.9 Labor force (%) 0.9 0.2 1.2 GNI Gross per pnmaly Most recent estimate (latest year available, 199703) capita enrollment Poverty (% ofpopulation below national poverty line) 21 Urban population (% of total population) 73 63 50 Life expectancy at birth (years) 65 69 69 -, Infant morlality (per 1,000 live bifihs) 12 31 32 Chiid malnutrition (99 of children under 5) 6 11 Access to improved water source Access to an improved water source (% ofpopulation) 99 91 81 Illiteracy (% ofpopulation age 15+) 0 3 10 Gross primary enrollment (% of school-age population) 114 103 112 -Russian Federation
Male 114 104 113 ~ Lowermiddleincome group Female 113 102 111
KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1983 1993 2002 2003 Economic ratios' GDP (US$ billions) 435.1 345.6 432.9 Gross domestic investmentlGDP 27.0 20.2 20.6 Exports of goods and services/GDP 38.2 35.0 35.0 I Trade Gross domestic savings/GDP 34.7 30.7 32.0 Gross national savingsiGDP 33.7 28.6 28.9 Current account balance/GDP 0.6 8.4 8.3 Domestic - Interest paymentslGDP 2.7 2.4 - Investment Total debffGDP 26.0 43.2 39.1 savings Total debt service/exports 4.3 24.2 18.2 Present value of debffGDP 18.0 43.0 Present value of debffexports 119.1 117.2 I Indebtedness 198343 'I99303 2002 2003 200307 (average annual growth) GDP .. 1.4 4.7 7.3 5.0 ~ Russian Federation GDP per capita 1.8 .. 5.2 7.8 5.4 ~ Lowermiddle-income group Exports of goods and services .. 6.6 9.6 13.7 2.8
STRUCTURE of the ECONOMY
Igg32o02 2003 zthof Investment and GDP (Oh) (% of GDP) Agnculture 83 57 52 Industry 446 340 343 1 50 Manufactunng 0 Services 47 1 603 605 -50-
Pnvate consumption 452 51 6 51 1 -100- General government consumption 200 177 169 Imports of goods and services 305 244 236 -GDI -GDp
~__ 1983-93 199303 2o02 2003 Growth of expo- and imports (%) (average annual growth) Agnculture 08 29 27 Industry 14 38 Manufacturing 85 20 Services 16 55 71 0 Pnvate consumption 21 87 78 General government consumption 07 48 26 -20 Gross domestic investment -46 -22 135 1 Eqrts +inports Imports of goods and services 43 146 195 1 -
Note 2003 data are preliminary estimates *The diamonds show four key indicators in the country (in bold) compared wlth tts incomegroup average If data are missing. the dlamond w~ll be incomplete
98 Russian Federation
PRICES and GOVERNMENT FINANCE 1983 1993 2002 2003 Inflation (%) Domestic prices 100 - (% change) I Consumer prices .. 874.6 15.8 13.7 implicit GDP deflator .. 887.8 15.7 14.2 Government finance (% of GDP, includes current grants) I 0- Current revenue .. 38.6 37.9 37.2 , 98 99 00 01 02 03 Current budget balance .. -4.1 2.5 2.0 -----GDPdeflatw +CPI Overall surpius/deficit .. -8.7 0.0 2.1
TRADE 1983 1993 2002 2003 Export and import levels (US$ mill.) (US$ millions) Total exports (fob) .. 58,422 107,301 135,929 150,000 - Crude oil .. 10,621 28,772 38,843 I Natural gas .. 10,347 15,897 19,981 100 000 Manufactures .. 3,100 10,900 12,800 Total imports (cif) 63,828 78,539 Food 10,300 12,100 50 000 Fuel and energy 1,000 1,300 I Capital goods 16,700 21,400 O 97 98 99 00 01 02 03 Export price index (20OO=fOO) 97 113 Import price index (2000=100) 111 103 EF* Elnpwts Terms of trade (200O=fOO) 87 109 I
BALANCE of PAYMENTS 1983 1993 2002 2003 ~ ~~ - . ._-. - Current account balance to GDP (Yo) (US$ millions) Exports of goods and services _. 65,244 120,912 151,959 20 - Imports of goods and services .. 58,110 84,463 102,558 Resource balance .. 7,134 36,449 49,401 Net income .. -4,459 -6,583 -13,171 Net current transfers -750 -364 Current account balance .. 2,675 29,116 35,866 202 Financing items (net) .. -16,450 -4,823 97 98 99 w 01 02 03 Changes in net reserves _. -2,877 -12,666 -31,043 -5 - Memo: Reserves including gold (US$ millions) .. 8,914 47,790 76,936 Conversion rate (DEC, local/US$) .. 0.4 31.4 30.7
EXTERNAL DEBT and RESOURCE FLOWS 1983 1993 2002 2003 - (US$ millions) Composition of 2003 debt (US$ mill ) Total debt outstanding and disbursed .. 112,940 149,362 169,057 I IBRD .. 367 6,599 6,289 A 6.269 IDA 0 0 0 G 16,976 C 5.082 I Total debt service .. 2,800 30,734 29,791 IBRD 11 764 894 IDA 0 0 0 Composition of net resource flows Official grants .. 2,497 Official creditors .. 1,038 -4,075 -3,817 Private creditors .. 1,291 20,500 Foreign direct investment .. 1,069 398 -2,408 Porlfolio equity 0 2,947 -5,045 Wotld Bank program Commitments .. 700 608 320 A - lBm E - Bilateral Disbursements .. 371 229 233 B - IDA D - other mrhlateral F - Pnwte Principal repayments 0 526 719 C - IMF G - Short-term Net flows .. 371 -296 486 I Interest payments 11 238 175 Net transfers .. 360 -535 -661
Development Economics 9/17/04
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MAP SECTION