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Language: English Original: English PROJECT: KAZUNGULA BRIDGE PROJECT (SADC NORTH – SOUTH TRANSPORT CORRIDOR IMPROVEMENT) MULTINATIONAL: REPUBLIC OF ZAMBIA and REPUBLIC OF BOTSWANA PROJECT APPRAISAL REPORT Date: October 2011 Team Leader: P. Opoku-Darkwa, Transport Engineer, OITC.2 Team Members: M T Wadda-Senghore, Transport Engineer, OITC.2 N Kulemeka, Chief Social Development Specialist,ONEC3 K Ntoampe, Principal Environmentalist, ONEC.3 M Ayiemba, Chief Procurement Specialist, ZAFO N Jere, Procurement Specialist, ZMFO O M Agyei, Financial Management Specialist, GHFO Preparation Team Sector Director: G. Mbesherubusa Regional Director (ORSA): E. Faal Regional Director (ORSB): C. Ojukwu Sector Manager: A. Oumarou Mr. J Tihngang, Senior Investment Officer. OPSM.3 Mr. M. Chirwa, Principal PPP Infrastructure Specialist, ONRI.1 Peer Reviewers Mr. M Bernard, Principal Transport Economist, OITC.1 TABLE OF CONTENTS 1 STRATEGIC THRUST & RATIONALE .................................................................................................... 1 1.1 PROJECT LINKAGES WITH COUNTRIES STRATEGIES AND OBJECTIVES ................................... 1 1.2 RATIONALE FOR BANK’S INVOLVEMENT............................................................................... 1 1.3 DONORS COORDINATION ....................................................................................................... 1 2 PROJECT DESCRIPTION ........................................................................................................................... 2 2.1 PROJECT COMPONENTS ......................................................................................................... 2 2.2 TECHNICAL SOLUTION RETAINED AND OTHER ALTERNATIVES EXPLORED ........................... 3 2.3 PROJECT TYPE ........................................................................................................................ 4 2.4 PROJECT COST AND FINANCING ARRANGEMENTS ................................................................. 4 2.5 PROJECT’S TARGET AREA AND BENEFICIARIES ..................................................................... 6 2.6 PARTICIPATORY PROCESS FOR PROJECT DESIGN AND IMPLEMENTATION .............................. 7 2.7 BANK GROUP EXPERIENCE, LESSONS REFLECTED IN PROJECT DESIGN ................................. 7 2.8 KEY PERFORMANCE INDICATORS .......................................................................................... 7 3 PROJECT FEASIBILITY ............................................................................................................................. 8 3.1 ECONOMIC AND FINANCIAL PERFORMANCE .......................................................................... 8 3.2 ENVIRONMENTAL AND SOCIAL IMPACTS............................................................................... 9 4 IMPLEMENTATION ................................................................................................................................. 12 4.1 IMPLEMENTATION ARRANGEMENTS ................................................................................... 12 PROCUREMENT ................................................................................................................................. 13 4.2 MONITORING ....................................................................................................................... 14 4.3 GOVERNANCE ...................................................................................................................... 14 4.4 SUSTAINABILITY .................................................................................................................. 15 4.5 RISK MANAGEMENT ............................................................................................................. 16 4.6 KNOWLEDGE BUILDING ....................................................................................................... 17 5 LEGAL INSTRUMENTS AND AUTHORITY ......................................................................................... 18 5.1 LEGAL INSTRUMENT ............................................................................................................ 18 5.2 CONDITIONS ASSOCIATED WITH BANK’S INTERVENTION .................................................... 18 6 RECOMMENDATION .............................................................................................................................. 19 ANNEX 1: TRADE FACILITATION AND REGIONAL INTEGRATION ....................................................... 2 ANNEX 2: PROJECT DETAIL COSTS ..................................................................................................... 2 ANNEX 3: INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS ................................................ 2 ANNEX 4: FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS .................................. 1 ANNEX 5: PROCUREMENT ARRANGEMENTS ...................................................................................... 1 ANNEX 6: ECONOMIC ANALYSIS ....................................................................................................... 2 i Currency Equivalents As of 01.08.2011 1 UA = 1.6 USD Botswana 1 UA = 10.4604 BWP Zambia 1 UA = 7605 ZMK Fiscal Year Botswana: 01 April – 31 March Zambia: 01 January – 31 December Weights and Measures 1 metric tonne = 2204 pounds (lbs) 1 kilogram (kg) = 2.200 lbs 1 meter (m) = 3.28 feet (ft) 1 millimeter (mm) = 0.03937 inch (“) 1 kilometer (km) = 0.62 mile 1 hectare (ha) = 2.471 acres ii LIST OF ABBREVIATIONS ADB African Development Bank MDG Millennium Development Goals ADF African Development Fund MIC Middle Income Country Accelerated Co-financing Facility for ACFA MTP Medium Term Plan Africa ARAP Abbreviated Resettlement Action Plan MTS Medium Term Strategy CBO Community Based Organization NAPA National Adaptation Programme of Action Common Market for Eastern and COMESA NDP National Development Plan Southern Africa Country Policy and Institutional CPIA NEPAD New Partnership for Africa’s Development Assessment Development Bank for Southern DBSA NSC North South Transport Corridor Africa DDR Detailed Design Report O&M Operation & Maintenance DoR Department of Roads (Botswana) OSBP One Stop Border Post Department of Environmental Affairs, DEA PAP Project Affected People Botswana EAC East African Community PAR Project Appraisal Report EC European Commission PCN Project Concept Note PDR Preliminary Design Report EIB European Investment Bank PIT Project Implementation Team EPC Engineering Procurement Construction PRSP Poverty Reduction Strategy Paper ERP Emergency Response Plan QCBS Quality and Cost Based Selection Environmental and Social Assessment ESAP QPR Quarterly Progress Report Procedures Environmental and Social Impact ESIA RAP Resettlement Action Plan Assessment Environmental and Social ESMP RBCSP Results-Based Country Strategy Paper Management Plan Environmental and Social ESMU RDA Road Development Agency (Zambia) Management Unit EU European Union REC Regional Economic Community FS Feasibility Study RISP Regional Integration Strategy Paper Government of the Republic of GRB RMC Regional Member Country Botswana Government of the Republic of GRZ SADC Southern African Development Community Zambia Information Communication ICT SNDP Sixth National Development Plan Technology IPM Interim Project Manager STAP Short Term Action Plan Infrastructure Project Preparation IPPF STI Sexually Transmitted Infection Facility Sub-Saharan Africa Transport Policy ITF Infrastructure Trust Fund SSATP Program JAS Joint Assistance Strategy TAF Technical Assistance Fund Japanese International Cooperation JICA TOR Terms of Reference Agency JSC Joint Steering Committee UA Units of Account UNCTAD United Nations Conference On Trade And KBA Kazungula Bridge Authority D Development Zambia Environmental Management KBP Kazungula Bridge Project ZEMA Agency iii Loan Information Client’s information BORROWER: REPUBLIC OF ZAMBIA EXECUTING AGENCY(S): ROADS DEVELOPMENT AGENCY (ZAMBIA) &TRANSPORT HUB (BOTSWANA) Financing plan UA million % Total SOURCE GRZ GRB Total Cost Instrument PBA 17.00 ADF 51.00 - 51.00 RO 34.00 31.5% Loan ADB - 0.00 0.00 0.0% Loan JICA 23.20 70.05 93.25 57.5% Loan ITF * 1.49 1.49 2.98 1.8% Grant GRZ 8.41 - 8.41 5.2% Counterpart GRB - 6.42 6.42 4.0% Counterpart Total 84.10 77.96 162.06 100.0% * EU-Africa Infrastructure Trust Fund Bank Group key financing information ADF (ZAMBIA) Loan currency Unit of Account (UA) Interest type Not Applicable Interest rate spread Not Applicable Service Charge 0.75% on amount disbursed and outstanding Commitment fee 0.50% on the un-disbursed loan amount Tenor 50 years Grace period 10 years NPV (base case) US$ 172million @ 12% EIRR (base case) 23.0 % Timeframe - Main Milestones (expected) Concept Note approval July, 2011 Project approval December, 2011 Effectiveness January, 2012 Last Disbursement December, 2018 Completion December, 2017 Last repayment December, 2061 iv PROJECT SUMMARY Project Overview 1. The Kazungula Bridge Project (KBP) is a multi-national project on the North-South Corridor (NSC) within the SADC region and part of a corridor-long infrastructure improvement programme. The project scope includes a bridge linking Botswana and Zambia over the Zambezi River to replace the existing ferry and juxtaposed one-stop border facilities at Kazungula. The expected outcomes include: (i) reduced border transit time; (ii) improved procedures on trade facilitation; (iii) improved border management operations, and consequently (iv) increased traffic
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