Document of The World Bank
FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 47196-YE
EMERGENCY PROJECT PAPER
ON A
PROPOSED ADDITIONAL FINANCING GRANT
Public Disclosure Authorized IN THE AMOUNT OF SDR 23.2 MILLION (US$35.0 MILLION EQUIVALENT)
TO THE REPUBLIC OF YEMEN
FOR A
FLOOD PROTECTION AND EMERGENCY RECONSTRUCTION PROJECT Public Disclosure Authorized
March 6,2009
Sustainable Development Department Middle East and North Africa Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective January 28,2009) Currency Unit = Yemeni Rial (YR) US$ 1 = 200.75
FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS APL Adaptable Programmatic Loan MOLA Ministry of Local Administration CAS Country Assistance Strategy MOPIC Ministry of Planning and CoA Chart of Accounts International Cooperation CQS Consultant Qualifications Selection MOPWH Ministry of Public Works and DA Designated Account Highways DLNA Damage, Loss and Needs Assessment MOWE Ministry of Water and DRM Disaster Risk Management Environment EA Environmental Assessment NCB National Competitive Bidding EMP Environmental Management Plan NGO Non Governmental Organization ESSAF Environmental and Social Screening O&M Operations and Maintenance and Assessment Framework PCU Project Coordination Unit FM Financial Management PIU Project Implementation Unit GALSUP General Authority for Land, Survey and PMU Project Management Unit Urban Planning PDO Project Development Objectives GCRB General Corporation for Roads and PAD Project Appraisal Document Bridges QCBS Quality-Cost-Based-Selection GDP Gross Domestic Product RMF Road Maintenance Fund GFDRR Global Facility for Disaster Reduction RPF Resettlement Policy Framework and Recovery RRF Reconstructionand Recovery GNI Gross National Income Fund GOY Government of Yemen SBD Standard Bidding Documents GPN General Procurement Notice SDR Statement of Expenditures HTB High Tender Board SOE Special Drawing Rights ICB International Competitive Bidding STC Short Term Consultant IDA International Development Association SWF Social Welfare Fund IFRCC International Federation of Red Cross TMDFPP Taiz Municipal Development & and Crescent Flood Protection Project IFR Interim Financial Report UN United Nations LCS Least Cost Selection UN-ISDR United Nations International M&E Monitoring and Evaluation Strategy for Disaster Reduction MENA Middle East and North Africa YR Yemeni Rial MOA1 Ministry of Agriculture and Irrigation MOF Ministry of Finance
Vice President: Daniela Gressani Country Director: Emmanuel Mbi Country Manager: Benson Ateng Sector Director: Laszlo Lovei Sector Manager: Anna Bjerde Task Team Leader: Sameh Naguib Wahba FOR OFFICIAL USE ONLY
EPP Table of Contents
A. INTRODUCTION .... , ...... ,...... 1 B. EMERGENCY CHALLENGE: Country Context, Recovery Strategy, and Rationale for Proposed Bank Emergency Project...... , ...... ,.... ,...... 2 C. BANK RESPONSE: THE PROJECT ...... 5 1. Brief description of Bank’s strategy of emergency support ...... 5 2. Project development objectives ...... 7 3. Summary of project components ...... 7 4. Readiness for implementation...... , . , ...... 8 5. Eligibility for processing under OP/BP 8.00 ...... 9 6. Consistency with country strategy (CAS or ISN) ...... 9 7. Expected outcomes ...... 9 D. APPRAISAL OF PROJECT ACTIVITIES.,...... ,. . ..,. , , ,lo E. IMPLEMENTATION ARRANGEMENTS AND FINANCING PLAN...... 16 F. PROJECT RISKS AND MITIGATING MEASURES ...... 18 G. TERMS AND CONDITIONS FOR PROJECT FINANCING .... . , ...... 19
Annexes Annex 1, Detailed Description of Project Components 20 Annex 2. Results Framework and Monitoring 26 Annex 3. Summary of Estimated Project Costs 32 Annex 4. Financial Management and Disbursement Arrangements 36 Annex 5. Procurement Arrangements and Plan 47 Annex 6. Implementation and Monitoring Arrangements 54 Annex 7. Project Preparation and Appraisal Team Members 59 Annex 8. Environmental and Social Safeguards 60 Annex 9. Economic and Financial Analysis 63 Annex 10. Documents in Project Files 69 Annex 11. Statement of Loans and Credits 70 Annex 12. Country at a Glance 71 Annex 13. Map 73
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.
EMERGENCY OPERATION PROJECT PAPER DATA SHEET
Republic of Yemen
Flood Protection and Emergency Reconstruction Project
Additional Financing
Middle East and North Africa Region
Date: March 6, 2009 Team Leader: Sameh Naguib Wahba Country Director: Emmanuel Mbi Sectors: Roads and Highways (50%), flood Sector ManagedDirector: Anna protection (50%) Bjerde/Laszlo Lovei Themes: Natural disaster management (P), and Project ID: P115178 Municipal Governance (S). Environmental Category: B
Borrower: Republic of Yemen Responsible Agency: Ministry of Public Works and Highways
Total amount: US$35 million Expected implementation period: 4 years Expected effectiveness date: May 15, 2009 Expectedhevised closing date: May 15, 2013
Short description: The proposed grant will finance the reconstruction or rehabilitation of selected key infrastructure destroyed or damaged by the level-three tropical storm and floods that hit Yemen in October 2008. The proposed support will respond to the emergency situation by providing, under OP8.0, a second additional financing to, with a restructuring of the existing Taiz Municipal Development and Flood Protection Project (TMDFPP) to repair and rebuild, to adequate flood-proof standards, selected priority damaged infrastructure in the disaster-affected areas in Hadramout and Al-Mahara Governorates in the aim of protecting residents, property, economic activities and infrastructure from the effects of future flooding. The original TMDFPP project was signed by the Government of Yemen (GOY) and the International Development Association (IDA) on November 26, 2001, and was declared effective on February 26, 2002. By the closing date of June 30, 2008, the project has exceeded its flood protection structure and associated infrastructure delivery targets due in part to cost savings on works contracts and currency gains resulting from the SDR appreciation against the US Dollar. On February 25, 2008, an additional credit for US$20 million was signed by the GOY and IDA to provide support for a scale-up of activities to enhance the development impact ofthis well-performing project in Taiz. i The restructuring is intended to enable the TMDFPP to evolve from its current single city (Taiz) focus into a national flood protection and post-disaster infrastructure reconstruction program, in line with the Government’s stated objectives. The restructuring comprises modifications to the Project name (to become “Flood Protection and Emergency Reconstruction Project”) as well as to the development objectives, description, outcome indicators and implementation arrangements in reflection of the expanded geographic scope. The Project will finance the rehabilitation and reconstruction of priority damaged segments ofthe regional road network and the flood protection systems in Hadramout and Al-Mahara governorates. The Project will also finance selected institutional and technical assistance activities which will help strengthen the government’s capacity in disaster preparedness, mitigation and response at the local level.
Financing plan (US$m.) Source Local 1 Foreign Total Borrower 4.4 1.6 6.0 Total IBRD/IDA 24.8 10.2 35.0 Trust funds Others Total 29.2 11.8 41 .O Estimated disbursements (Bank FY/US$m.) 2009 2010 201 1 2012 2013 2014 Total IBRD/IDA 0.2 8.8 11.9 10.3 3.8 -- Trust funds Does the emergency operation require any exceptions from Bank policies? Yes [ X ] No [ ] Have these been approved by Bank management? Yes [XI No [ ] Are any critical risks rated “substantial” or “high”? Yes[X] No [ ]
What safeguard policies are triggered, if any? Ref. Annex 8. Environmental Assessment (OP4.12); Natural Habitats (OP4.04) and; Involuntary Resettlement (OP4.12)
.. 11 A. INTRODUCTION
1. This Project Paper seeks the approval of the Executive Directors to provide an additional financing grant in the amount of SDR 23.2 million to the Republic of Yemen for the Flood Protection and Emergency Reconstruction Project.
2. The proposed grant will help finance the costs associated with the reconstruction and rehabilitation of selected key infrastructure destroyed or damaged by the level-three tropical storm and floods that hit Yemen in October 2008. The proposed support will respond to the emergency situation by providing, under OP8.0, a second additional financing with restructuring of the existing Taiz Municipal Development,and Flood Protection Project (TMDFPP) to repair and rebuild, to adequate flood-proof standards, selected priority damaged infrastructure in the disaster-affected areas in Hadramout and Al-Mahara Governorates in the aim of rehabilitating this critical infrastructure to enable the restoration of livelihoods affected by the disaster, and protecting residents, property, economic activities and infrastructure from the effects of future flooding. These include the rehabilitation and reconstruction of priority damaged segments of the regional road network and the flood protection systems in Hadramout and Al-Mahara governorates. The project will also finance selected institutional and technical assistance activities which will help strengthen the government’s capacity in disaster preparedness, mitigation and response at the local level.
3. A waiver from the Managing Director was secured on February 11, 2009, to waive the requirement under OP 13.20 for the completion of activities under an Additional Financing within three years from the closing date of the original project. This allows for the extension of the closing date to May 15, 2013, to enable the satisfactory implementation of activities envisaged under this additional financing.
4. The Project is co-financed by the Government of Yemen’s Ministry of Public Works and Highways to the amount of US$6.0 million equivalent. The proposed project is not co-financed by other multilateral or bilateral agencies. Project activities, however, have been closely coordinated with other donors within the scope of the joint Damage, Loss and Needs Assessment (DLNA) of the aftermath of the disaster, prepared by the Government of Yemen (GOY) and a team from the international community led by the World Bank, and including the United Nations International Strategy for Disaster Reduction (UN-ISDR) and the International Federation for the Red Crescent and Cross (IFRCC), with support from the Global Facility for Disaster Reduction and Recovery (GFDRR). The GOY requested the United Nations (UN) to coordinate the emergency relief effort and the World Bank to support the coordination of the reconstruction and recovery effort. Some pledges were already made by the Kingdom of Saudi Arabia (US$lOO million for recovery), the Arab Fund for Social and Economic Development (US$135 million for reconstruction) and the United Arab Emirates (US$3 5 million for shelter) to the reconstruction and recovery efforts, in addition to the support to the emergency relief works. The World Bank is providing with the GFDRR technical assistance to the GOY in structuring the “Reconstruction and Recovery Fund (RRF) of the disaster affected areas in Hadramout and Al-Mahara,” which was created by Republican Decree No. 365 on December 30, 2008, to coordinate and support reconstruction and recovery activities. B. EMERGENCY CHALLENGE: Country Context, Recovery Strategy, and Rationale for Proposed Bank Emergency Project.
5. Yemen represents the single largest development challenge in the Middle East and North Africa (MENA) Region. With a population of 22 million, low human development indicators, and a per capita GNI of about US$770 in 2006, Yemen is the poorest country in the MENA region and the only IDA country amidst the rich Gulf region. Despite modest economic improvements in the past decade due to the oil price windfall, the country has a very high incidence of poverty, with 34.8% of the total population living in poverty in 2006. Between 1998 and 2006, the unemployment rate has doubled to reach 16.1% of the labor force. The country is also endowed with limited natural resources: it is one of the most water scarce countries in the world (available water stocks in highland areas are already at crisis level), its oil reserves are rapidly declining and are expected to be depleted within the next decade, and its arable land is limited. The country’s development challenges are further compounded by rapid population growth of over 3% per annum and rapid urbanization. Indeed, Yemen’s estimated average annual urban population growth rate over the past decade of 5.1% is the highest in the MENA Region and one ofthe highest in the world.
6. Yemen is also a disaster-prone country that has become increasingly vulnerable to natural hazards in recent years. Disasters such as floods, earthquakes and landslides are estimated to affect an average of 100,000 persons annually according to the Emergency Events Database. Floods are the most important and recurring disaster in the country. Over the last two decades, due to high rates of population growth and urbanization, unplanned and unregulated urban development, and lack of environmental controls, Yemen has become increasingly vulnerable to natural disasters. Increased concentration of physical assets and vulnerable population in high-risk areas are leading to increased exposure to adverse natural events.
7. The institutional framework for disaster risk management/reduction in Yemen needs strengthening. The institutional arrangements for disaster risk management in Yemen are still at an early stage, lack coordination, and need further strengthening. The Ministry of Interior’s Directorate for Civil Defense prepared in 2006 a draft national disaster management framework governing the roles and responsibilities of concerned entities under the Civil Defense Law of 1997 and is currently working on operationalizing this framework. The Ministry of Water and Environment’s Directorate of Environmental Emergency is undertaking some parallel initiatives, but coordination has been lacking. And despite the devolution to local authorities of major policymaking, planning, implementation and service delivery responsibilities under Law No. 4 of 2000 including in the area of disaster risk management and reduction, many constraints prevent local governments from effectively fulfilling their responsibilities.
8. Despite numerous challenges hindering the implementation of Yemen’s decentralization policy, a renewed momentum and the imperative of increased disaster vulnerability call for local governments to play a more important role in disaster risk management and reduction. Initially, implementation of decentralization was not commensurate with the provisions of the law for several reasons including lack of resources, continued control by the central line ministries through their branch offices, and weak capacity at the local level. Yet, since 2007, there has been increasing momentum in support of greater decentralization; the Ministry of Local Administration completed a decentralization strategy and proposed revisions to the Law allowing
2 for greater fiscal and political decentralization, and for the first time in Yemen Governors were elected in May 2008. As such, there needs to be greater involvement at the local government level in disaster risk management and reduction to align with Yemen’s decentralization policy and ensure that plans and policies are formulated at the level that is closest to the communities and thus can have a realistic chance of being implemented.
9. The October 2008 storm and floods that hit Hadramout and AI-Mahara Governorates had a devastating impact. Between October 23-25, 2008, a level-three tropical storm caused heavy rain for over 30 hours and widespread flooding in several locations in Hadramout and Al- Mahara Governorates in Yemen. The disaster caused the death of 73 persons, scores of injured, destruction of 2,826 houses and huts and partial damage to another 3,679 houses, and the displacement of about 25,000 people who sought temporary shelter in public buildings or with host families. In response, the two Governorates were declared by the Government as disaster areas.
10. The overall damages and losses from the flood disaster are estimated to amount to 6% of Yemen s GDP in 2007. The total effects of this disaster (both the damages to infrastructure and physical assets and the ensuing economic losses) were estimated at YR 327,551 million (US$1,638 million). Hadramout Governorate was significantly more affected (96.1% ofthe total disaster effects, including 94.1% of total damages and 98.4% of total losses) relative to Al- Mahara Governorate (with 3.9% ofthe total disaster effects, including 5.9% oftotal damages and 1.6% of total losses). Wadi Hadramout was the worst hit region (67.5% of the total disaster effects, comprised of 63.3% of total damages and 72.2% of total losses), followed by the coastal areas, known as Sahel Hadramout (with 28.6% of the total disaster effects, comprised of 30.8% of total damages and 26% of total losses).
1 1. The disaster caused extensive damage to infrastructure, especially roads, power, water and wastewater, and irrigation and flood protection systems. The regional road network in Hadramout and Al-Mahara was badly affected with 59 km destroyed or sustaining heavy damage. This led to the interruption of traffic for over two weeks until the Ministry of Public Works and Highways (M0PWH)’s General Corporation for Roads and Bridges (GCRB) opened temporary bypasses. The interruption of traffic was particularly detrimental in delaying access of emergency relief efforts to many affected areas, especially in Wadi Hadramout.
12. The impact on agricultural land and people )s livelihoods has been devastating. A total of 22,902 Feddans (acres) of cultivated agricultural land and 5 1,455 Feddans of uncultivated land were damaged in both Governorates due to soil erosion. Public and private flood protection and irrigation infrastructure also sustained significant damage. In addition, about 550,000 palm trees and 160,000 fruit trees were uprooted. Some 58,500 livestock heads (sheep, goats, camels and cattle) died due to the water surge, and as much as 309,103 honey beehive cells were washed away. Overall, about 700,000 persons-over 50% of the total population in the affected areas- have had their livelihoods destroyed or significantly affected, of which two-thirds live in Wadi Hadramout.
13. The Government of Yemen requested emergency World Bank support to address the effects of this disaster. The GOY, represented by the Ministry of Planning and International Cooperation (MOPIC), has formally requested the World Bank’s support to prepare an emergency operation to reconstructhehabilitate selected priority infrastructure damaged by the
3 storm and floods in Hadramout and Al-Mahara Governorates. Since the disaster, Yemen has received some US$270 million in pledges from the Kingdom of Saudi Arabia, the Arab Fund for Social and Economic Development and the United Arab Emirates. Yet, the magnitude of the disaster effects to an already fragile IDA country and the extent of reconstruction and recovery needs (See Figure 1) call for a much larger support from the donor community and the use of the rapid response to crises and emergencies policy OP8.0.
I ure 1 Reconstruction and recovery needs in the affected areas by sector (2008 prict
600 1 - __I"I I _.-_ I .-I- - _._" III I I-1
......
......
......
......
......
14. The October 2008flood disaster in Yemen compounds the macroeconomic problems. The overall damages and losses from the flood disaster-estimated at US $1.6 billion in 2008 prices or about 6% of GDP-are comparable to annual development expenditure of the government. The cost of rebuilding damaged public infrastructure alone, estimated at US$ 375 million (based on damage values) in the two governorates, is nearly twice as much as the average annual net flow of all aid that Yemen receives at US $200 million, while the total estimated recovery and reconstruction needs exceed 4.5 times the total annual net flow of aid received by the country. In the absence of reconstruction and recovery efforts, overall GDP growth rate in 2009 will decrease by 0.5 percent compared to the baseline estimates and the non-oil growth rate will diminish by 0.7 percent. Given that the two affected governorates were home to only 5 percent of the population and contributed about 6 percent of non-oil incomes, the impact on the national GDP reflects the magnitude of the disaster's effect. Moreover, the disaster will trigger significant localized poverty effects and greatly increase poverty in the affected governorates, particularly the poorer Hadramout governorate.
15. Without intervention, the number of poor people in Yemen will increase by 265,000 or I.1 percent, while the incidence of poverty would nearly double in Hadramout Governorate. In Hadramout governorate (estimated population of 1.3 million in 2008), the number of poor could
4 nearly double from 3 10,000 to 585,000 in 2009-the year of peak disaster impact-rendering 51% of the population poor (See Figure 2). This is attributed to the fact that the areas worst affected by the disaster housed between 70 and 75 percent of the poor in Hadramout and Al- Mahara Governorates. The poverty gap would increase threefold to 12 percent in 2009 implying that to return the population to pre-disaster poverty levels would require, under perfect targeting, cash transfer equivalent to the entire annual Social Welfare Fund (SWF) budget for the whole country.
Figure 2 Poverty Increases L Hadramout Governorate Percentage of Poor The number of Door
60 700 3 50 600___ 4 500 ; 40 - 0 I 400 0 30 ., 300 vB kl 20 2 200
10 100
0 0 2008 2009 2010 2011 2012 2008 2009 2010 201 1 201 2
Iffl Re-disaster IPost-disaster 1 1 Pr+daarlw Post-disaster 1
Source: Joint DLI 1, January 2009
C. BANK RESPONSE: THE PROJECT
1. Brief description of Bank’s strategy of emergency support
16. The World Bank has articulated a comprehensive response to the storm and floods disaster in Hadramout and Al-Mahara that encompassed contributions to the initial needs assessment phase and the ongoing reconstruction, recovery and vulnerability reduction efforts. Specifically, the response included: (a) an important contribution to the joint Damage, Loss and Needs Assessment ofthe aftermath ofthe disaster; (b) ongoing support to the GOY in structuring the reconstruction and recovery effort and leveraging needed donor support; (c) exceptional IDA funds in the form of a Grant to contribute to the reconstruction, recovery and vulnerability reduction effort, under the present project as an Additional Financing with Restructuring to the TMDFPP, processed under OP8.0; (d) an ongoing assessment of the feasibility of restructuring or (re)allocating funds in ongoing IDA projects in the pipeline to address the emergency; and (e) ongoing support to the GOY in strengthening Disaster Risk Management and Reduction systems and instruments.
17. In response to the GOY’S request, three days after the storm and floods struck Hadramout and Al-Mahara, the World Bank redeployed an existing IDA supervision mission to carry out a
5 rapid scoping of the disaster effects between October 28 and November 2, 2008. The GOY also requested the World Bank to lead the coordination effort with the donor community to undertake the damage, loss and needs assessment of the aftermath of the disaster, while the UN was asked to coordinate emergency relief efforts. The Bank initiated discussions with the donor community and leveraged US$200,000 from the GFDRR in support to the assessment. Between November 22-December 3, 2008, a large multi-sectoral mission from IDA, joined by representatives of UN- ISDR, IFRCC and GFDRR, worked jointly with the GOY to prepare the joint DLNA, whose findings were presented to the Council of Ministers on December 2, 2008. The report was completed on January 6, 2009 and is currently being processed for publication.
18. The IDA management has also availed exceptional IDA funds in the form of a US$35 million equivalent Grant to contribute to the reconstruction, recovery and vulnerability reduction effort, under the present project as a second Additional Financing with Restructuring to the TMDFPP, processed under OP8.0. The project will rebuildhehabilitate priority infrastructure damaged by the floods in two key sectors-roads and flood protection systems. The restructuring of the TMDFPP will enable it to evolve from its current single city (Taiz) focus into a national flood protection and post-disaster infrastructure reconstruction program, in line with the GOY’S stated objectives.
19. The rationale for choosing additional financing as opposed to a stand-alone emergency operation were due the following reasons: (a) Additional financing allows for the fastest option for streamlined processing, building on existing capacity and systems; (b) Relative to the other Project Management Units (PMUs) in related work areas, the TMDFPP PMU implementation option entails the least risk of overburdening existing implementation capacity with a rapidly expanding work program; (c) The PMU is most aligned and familiar with the nature ofproposed works and has the best capacity in terms of procurement and supervision of comparable activities and of similar scale and; (d) such scaling-up is already envisaged by GOY. The proposed project will involve the restructuring of an existing well performing project, TMDFPP, where a first Additional Financing is currently under implementation. The original TMDFPP closed on June 30, 2008 following successful completion of activities. Table 1 provides the background information on the closing dates for the original TMDFPP, the first Additional Financing, and the proposed second Additional Financing with a restructuring ofthe project.
Project Closing Date Revised Closing Date
Taiz Municipal Development and Flood June 30,2005 June 30,2008 Protection Project
Taiz Municipal Development and Flood October 3 1,201 0 Protection Additional Financing Project (first additional financing)
Yemen Flood Protection and Emergency June 30,201 1 May 15,2013 Reconstruction Additional Financing project (second additional financing)
6 20. World Bank and GFDRR support to the GOY is underway to structure the reconstruction and recovery efforts for the affected areas. The GOY has established the “Reconstruction and Recovery Fund of the Reconstruction and Recovery Fund (RRF) of the disaster affected areas in Hadramout and Al-Mahara,” by Republican Decree No. 365 on December 30, 2008 to implement and coordinate reconstruction and recovery efforts in the disaster affected areas. The recovery and reconstruction effort will be guided by the findings and priorities established in the joint DLNA. To support the GOY in this effort, the World Bank leveraged GFDRR support to finance consultancies (US$230,000, already underway) to: (a) carry out a comprehensive hydrological/ hydraulic study of Wadi Hadramout-the worst affected area-including climate change adaptation needs, to inform reconstruction designs and policymaking on relocation of affected human settlements and shelter reconstruction; and (b) to support the GOY in structuring the Reconstruction and Recovery Fund and efforts, and in leveraging needed support.
21. In addition, the World Bank and the GFDRR are currently supporting an important Disaster Risk Management and Reduction program in Yemen, estimated at about US$1 million. This includes undertaking a national risk assessment and natural disaster vulnerability mapping, strengthening the national disaster risk management system and building institutional capacity, and pilot activities to build and mainstream Disaster Risk Management (DRM) capacity at the local government level, starting with Sana’a Municipality.
22. In addition, an assessment is ongoing of the feasibility of restructuring or (re)allocating funds in ongoing IDA projects in the pipeline to address this emergency. The Yemen Port Cities Development Project (IDA Credit 3729-YEM) undertook a third order restructuring to reallocate US$300,000 to finance the consultancy study for the preparation of the road rehabilitation package for Hadramout, the region in which the port city of Mukalla is located. Other IDA- supported projects including the Rural Access Roads, the Urban Water Supply and Sanitation Project, the Social Fund for Development and the Public Works Project are currently assessing potential interventions in the affected areas, in an amount of about US$5 million.
2. Project development objectives
23. The project’s development objectives are to assist the GOY in: (i)protecting residents, economic activities and infrastructure from the destructive effects of seasonal flooding in Taiz, Hadramout and Al-Mahara; (ii)restoring access to critical road infrastructure damaged by the floods and; (iii)strengthening the capacity of local governments and supporting decentralization.
24. The original project development objectives of the TMDFPP project are to assist the GOY in: (a) strengthening the institutional capacity of the local government in the Taiz Governorate to carry out its mandate under the Local Authorities Law, and (b) protecting the residents and businesses of the city of Taiz, as well as the city’s infrastructure, from seasonal destructive flooding.
3. Summary of project components
25. The Additional Financing will finance activities under two components, as detailed below. These align with the existing TMDFPP first and third components, covering respectively
7 flood protection and infrastructure, and capacity building. No investments will be allocated for the second component of TMDFPP covering resettlement activities.
26. Component 1. Flood Protection and Infrastructure Rehabilitation (US$3 8.5 million equivalent, of which IDA share US$32.8 million equivalent). The objective of this component is to rebuild selected critically damaged infrastructure in the affected areas to adequate standards that could withstand future flooding events. The component has been revised from the TMDFPP project to include a sub-component on rehabilitation and reconstruction of priority damaged segments of regional road network. The project will finance two additional sub-components focusing on the rehabilitation and reconstruction of priority damaged segments of (a) the regional road network and (b) the flood protection system, respectively for US$ 24.3 million for roads and US$ 14.2 million for flood protection systems (IDA’S share being respectively US$20.6 million and US$12.2 million).
27. Component 2. Resettlement of Affected Persons (US$O.O million): The restructured project is not expected to finance any activities under this component (which under the original TMDFPP financed a large-scale resettlement program of 244 households), as no resettlement activities are expected under the emergency operation. If any resettlement is to occur, it will be governed under the Resettlement Policy Framework (RPF) and financed under Component 1.
28. Component 3. Capacity Building (US$2.5 million equivalent. of which IDA share US$2.2 million equivalent). The objective of this component is to strengthen the capacity of local governments in disaster risk management and reduction including preparation of a flood protection plan for the critically damaged and vulnerable areas of Wadi Hadramout; a storm water drainage master plan for Mukalla city; and setting up local government capacity in disaster preparedness, mitigation and response; and provision of support to the PMU through financing the cost of consultancy services for design and construction supervision, other short term consultancy services, and independent annual audits of project financial management activities; and covering Project Management expenses over the three-year implementation period. The original TMDFPP financed activities in Taiz focused on improving local government planning and service delivery including completion of an updated 20 year master plan at the city level for the first time and development of service delivery and planning tools (data-enhanced GIs) and preparation of a solid waste management strategy.
4. Readiness for implementation.
29. Preparation for the emergency reconstruction of critical road infrastructure is under way. A consultancy assignment-carried out through a variation order to an existing contract under the IDA-financed Port Cities Development Program-is preparing the detailed designs and tender documents of the road rehabilitation sub-component, including the study of feasibility of the two sections that may require further improvements. It is expected that the design and tender documents of the road rehabilitation sub-component, with the exception of the segments requiring feasibility studies, will be completed by the Board date, and that the procurement process will be completed by effectiveness.
30. Another consultancy contract-carried out through a variation order to an existing Bank- executed contract financed by the GFDRR-is preparing a comprehensive hydrological/hydraulic study of Wadi Hadramout, which will serve as the basis to inform policy
8 decisions related to the reconstruction of infrastructure and resettlement of housing and human settlements, as may be needed. This study will also serve to inform the design of the needed rehabilitation of the flood protection system in the most affected area, namely Wadi Hadramout. The preparation of designs and tender documents for the rehabilitation of the flood protection system in the other affected areas will be undertaken during project implementation.
5. Eligibility for processing under OPBP 8.00
31. The GOY formally made to the World Bank’s Country Director in a letter dated October 27, 2008, from the Deputy Prime Minister for Economic AffairdMinister of Planning and International Cooperation for financial and technical assistance. The project scope and implementation mechanisms were subsequently confirmed in a letter dated January 29, 2009.
32. Within the scope of OP 8.0 and consistent with OP13.2, the conditions under which the Bank may provide additional financing are all currently met by TMDFPP as follows:
Such scaling up, even if in this case it is a post-disaster response, aligns with the GOY’s objective of mainstreaming disaster risk management and flood protection works in Yemen, as noted in the Poverty Reduction Strategy Paper (reducing risks is a prerequisite to achieving the GOY’s poverty reduction objectives).
0 The project ensures a rapid response to the disaster and infrastructure reconstruction needs, and contributes to mainstreaming disaster risk management capacity at the local government level;
0 All project activities are being implemented by an effective and well performing Project Management Unit (PMU). In the last three Implementation Status Reports (ISRs), the TMDFPP had a “Highly Satisfactory” implementation rating that was recently confirmed by the Quality Assurance Group (QAG). Relative to other PMUs in related work areas, the TMDFPP PMU implementation option entails the least risk of overburdening existing implementation capacity with a rapidly expanding work program;
0 The project management unit is most aligned and familiar with the nature ofthe proposed works and has the best capacity in terms of procurement and supervision of comparable activities and of similar scale; and
The project has no unresolved fiduciary, environmental, social or other safeguard issues.
6. Consistency with country strategy (CAS or ISN)
33. The proposed additional financing is consistent with the objectives of the May 2006 Country Assistance Strategy (CAS) for Yemen. The project objectives align with the second pillar (improving public service delivery) and fourth (water resource management) pillars of the CAS.
7. Expected outcomes
9 34. The proposed outcome indicators and the overall results framework (See Annex 11) reflect new indicators that will monitor the activities of both the proposed project-Flood Protection and Emergency Reconstruction (the second Additional Financing to TMDFPPFand the ongoing first Additional Financing to TMDFPP. Some of the selected indicators were used under the ongoing TMDFPP AF and have thus been revised to reflect the geographic scaling up of activities, while others have been developed for the proposed project. The output indicators are presented only for the proposed project.
35. Key output indicators include:
0 Length of road sections that have been repaired or consolidated with satisfactory technical standards;
0 Number offlood protection works completed with satisfactory technical standards;
0 Completion of the Flood Protection Master Plan for Wadi Hadramout and the Storm Water Drainage Plan for Mukalla city; and
0 Disaster Risk Management responsibilities established in local governments.
3 6. Key outcomehmpact indicators include:
0 Area protected from flooding in Hadramout, Al-Mahara and Taiz;
0 Reduction in loss of crops due to flooding in Hadramout and Al-Mahara;
0 Reduction in the percentage of businesses affected by floods in Taiz;
0 Reduction in the annual expenditures of emergency repairs to infrastructure damaged by floods in Hadramout, Al-Mahara and Taiz;
0 Reduced travel time in affected areas in Hadramout and Al-Mahara;
0 Increase in locally generated revenues in Taiz; and
0 Implementation of disaster preparedness plans in Hadramout and Al-Mahara.
D. APPRAISAL OF PROJECT ACTIVITIES
37. Economic benefits and beneficiaries. Overall, the project is expected to have significant economic benefits. In the short term, restoring access and rehabilitating flood protection works will contribute to (i)improving emergency response effectiveness; (ii)restoring livelihoods affected by the damage and losses to the agriculture and shelter sectors, including through temporary construction work generated from the use of labor-intensive flood protection works as feasible and through the restoration of flood risk resilience capacity, thereby enabling the reconstruction of shelter and resumption of economic activities. In the short term, as much as 39,396 work-months of unskilled construction work could be created from labor-intensive flood protection rehabilitation works, which would allow to provide support to 3,283 households (some 23,000 individuals) that lost their livelihoods for a one-year period, not an insignificant effect. In the longer term, the economic benefits will include preserving the road network and flood protection public infrastructure assets by enhancing their resilience to future flooding events. Overall, the population of Hadramout and Al-Mahara Governorates, estimated at 1.4 million, will benefit from the project, especially the population of Wadi Hadramout, which was the worst affected area by the disaster.
10 38. An economic analysis of project interventions was carried out for the road rehabilitation sub-component (estimated at US$24.3 million, or 59% of total funds), estimating the economic benefits and costs with and without the project, calculated over a 10-year period. The analysis was based on the detailed assessment of operational and time losses due to the disaster’s effect on damaged roads, which was undertaken as part of the DLNA. Using a discount rate of lo%, the result shows a Net Present Value (NPV) of US$21.57 million and an Economic Internal Rate of Return (EIRR) of 38%, well in excess of the standard 12% EIRR used as a threshold for road transport projects and in excess of the average EIRR of 20% in the Rural Access Roads in Yemen. Annex 9 provides the detailed analysis.
39. Technical. The initial inclination of GOY officials after the Hadramout and Al-Mahara storm and floods was to replace the destroyed Irish crossings in the regional road network with elevated flyoversbridges to avoid a repeat of the disaster. This will have been an expensive and cost-ineffective solution. With limited funds and many competing reconstruction and recovery priorities, this could result in the temporary emergency bypasses becoming permanent until financing for such upgrade is arranged, which will lead road users to incur significant vehicle operating cost and time losses. The IDA team’s inspection of damaged roads during the DLNA has revealed that on many destroyed sections, poor construction and/or inadequate design have contributed to the extent of damages. The presence of effective debris traps upstream could have prevented or significantly reduced clogging of culverts and the use of well designed Irish crossings with adequate side protection could have prevented much road damages. The Project will finance the reconstruction of damaged sections of the regional road network in Wadi Hadramout following appropriate, cost effective flood-proof design standards based on sound technical designs and on the assessment of hydrological/hydraulic flows in the Wadi by qualified engineering firms. This coupled with a provision for the recruitment of qualified construction supervision firms will ensure that the rebuilt roads can sustain future flooding events without over-designing them or incurring unnecessary costs that are not corroborated by the storm water flows or road usage.
40. The procurement of the consultancy assignment for the preparation of detailed design and tender documents of the road rehabilitation package has been completed under the IDA-financed Port Cities Development Program. The contract is undergoing High Tender Board (HTB) review and clearance and it is expected to be signed and the assignment launched in early February. The designs and tender documents will be expected to be ready and the procurement process underway before effectiveness, in the aim of launching implementation as soon as possible after effectiveness. The study will also confirm a package of urgent road repairhehabilitation works which could not afford to wait for design and competitive tender due to concerns about the safety of motorists. Implementation of these works, estimated at US$2.4 million, will be initiated immediately on the basis of established design and construction standards. A force account procedure will be used in favor of the MOPWH General Corporation for Roads and Bridges (GCRB), which will operate under a performance-based contract based on existing established unit rates as used with the Road Maintenance Fund (RMF). A construction supervision assignment is currently being prepared for tender to recruit qualified consulting firm(s) to ensure quality control of GCRB’s work. This will allow for prompt launch of project implementation activities and disbursement during the period in which the rest of the road rehabilitation package is being tendered. In addition, in order to reduce delays in launching construction work, reliance will be on simplified designs using line diagram (as opposed to the typical plan and profile drawings) and standard technical drawings for retaining walls, protection works, Irish crossings and box culverts, etc.
41, The procurement of a consultancy assignment for the preparation of a comprehensive hydrological/hydraulic study for Wadi Hadramout has also been completed under a GFDRR- financed Bank-executed contract and the assignment has been launched. This study will serve as the foundation to inform Government’s decisions over the relocation of human settlements and shelter reconstruction, as well as identify priority flood protection interventions needed and the design of infrastructure reconstruction works.
42. To ensure sustainability of the investments under the proposed project, arrangements for operation and maintenance of the rehabilitated infrastructure have been put in place. The Road Maintenance Fund (RMF), under the MOPWH, will assume responsibility for the periodic maintenance of the rehabilitated regional road network. The Hadramout and Al-Mahara local councils (including the branch offices of the Ministry of Agriculture and Irrigation and the MOPWH) will each assume the responsibility for the maintenance of the flood protection infrastructure within their jurisdiction; the budgeting needed for operation and maintenance will be assessed and integrated in their annual budgets.
43. Institutional. As a second Additional Financing to the TMDFPP, this project will also be under the supervision of MOPWH and will be implemented by the same PMU that is currently implementing the first TMDFPP AF (which became effective on June 18, 2008 and closes on October 31, 2010). The TMDFPP PMU has over 15 years experience and a proven track record in implementing IDA-financed projects, with a current project implementation rating of Highly Satisfactory. For it to be able to cater to an extended mandate and cover more than one geographic area, the PMU will be restructured into a Project Coordination Unit (PCU), based in Sana’a and comprised of the existing, experienced Project Director and fiduciary (procurement and financial management) staff complemented by a newly hired Monitoring and Evaluation (M&E) specialist and a second procurement officer. The PCU will be complemented by two branches or areas-based Project Implementation Units (PIUs) in Taiz-to be headed by the existing TMDFPP Deputy Director and include existing engineering and safeguards staff- and a new PIU to be established in the affected areas (Seiyun). The new PIU’s role is to implement and supervise the second AF project activities in Hadramout and Al-Mahara, coordinate with the Local Council and stakeholders, and oversee compliance with environmental and social safeguards in the project areadsites It will be headed by a PIU manager (engineer), supported by a senior civilhoads engineer, a senior agricultural engineer (specialized in flood protection), an environmental engineer, and a number of support staff, all of which will be recruited competitively.
44. Fiduciary-Financial Management. Financial Management (FM) activities under the proposed Project will be carried out by a Project Coordination Unit (PCU) based in Sana’a that is staffed with the existing, experienced Project Director and fiduciary staff of the TMDFPP PMU. There is an existing satisfactory Financial Management (FM) system in place in the TMDFPP PMU, which is responsible for the overall coordination, monitoring and evaluation of the TMDFPP. The scope of the responsibilities ofthe TMDFPP FM unit will be increased under the proposed restructure to TMDFPP to include managing the financial activities of the proposed project. The financial management of the new restructured project will be dOne centrally from the PCU in Sana’a which is consistent with the structure of the existing project (TMDFPP). This
12 is to say that, the impact of the restructure of the project and increase in scope will be limited to having the same FM unit in Sana'a manage the additional activities, as the project's expansion geographically to Hadramout and Al-Mahara will be managed centrally from FM perspective. The financial management unit in the PCU will be comprised ofthe qualified Financial Manager of TMDFPP and will be supported by a qualified accountant who was recently recruited to the PMU. The hiring of the accountant was done to ensure appropriate segregation of duties and responsibilities of staff and to build up the capacity of the FM unit to be able to manage the Additional Financing projects. The current FM staffing is deemed adequate and has capacity to manage both the ongoing Additional Financing and the proposed Additional Financing under the emergency operation. As implementation begins, further assessment will take place to ensure that the existing staffing arrangements continue to be acceptable and to review the implementation of the agreed upon actions as described in the FM Annex. Additionally, the PCU has two financial representatives assigned by the Ministry of Finance (MOF) to ensure that the GOY contributions are properly accounted for, in accordance with the objectives of the project. The MOF representatives verify that all payments relating to Government contributions are consistent with the Financing Agreement between IDA and GOY. The new project will go through the same procedures. The GOY contribution will be reviewed and overseen by the MOF representatives who work under the project's Financial Manager.
45. The TMDFPP PMU has been submitting project audit reports on time. The latest audit report for year 2007 was also unqualified and received by the World Bank with no major findings.
46. Intensive supervision of the early phase of project implementation will be carried out to ensure adequate FM arrangements continue to be in place and the capacity of the FM unit is adequate for the ongoing and additional funding. Subsequently, supervision practices will remain the same as for the TMDFPP, with two supervision missions a year; this is to monitor regularly the financial management arrangements.
47. The overall FM risk is considered Moderate. The successful implementation of the existing FM arrangements in addition to other mitigating measures which will be closely monitored during implementation will ensure that the residual FM risk remains as Moderate. The FM arrangements under this project are further detailed in the FM Annex 4.
48. Fiduciary-Procurement. Procurement activities will be carried out by a Project Coordination Unit (PCU) based in Sana'a that is staffed with the existing, experienced Project Director and fiduciary staff of the TMDFPP PMU. Further support in procurement will be provided to the PCU in light of the short implementation timeframe and the expanded workload. A procurement officer will be competitively recruited from the local market to support procurement and contract management activities. An international procurement specialist will also be recruited under a short term consultant (STC) contract to provide technical assistance in fiduciary, contract management and technical responsibilities and strengthen the procurement capacity within the PMU. 49. All procurement activities for the proposed project will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, Revised October 1, 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 Revised October 1, 2006, and the provisions stipulated
13 in the Grant Agreement. The procurement plan (see Annex 5) presents the procurement packages and tendering methods agreed between the IDA and the Borrower on January 24,2009. The procurement plan will be updated in agreement with the IDA Project team annually or as needed to reflect the actual project implementation needs. Given the emergency nature of the operation, exceptional procedures will be used during implementation phase, consistent with Bank Guidelines as provided for under OP 8.0.
50. Procurement of works consists of contracts for: (a) regional road rehabilitation (US$24.3 million); and (b) flood protection rehabilitatiodconstruction works for the protection of shelter and agricultural land (US$14.7 million). Contracts will be tendered in accordance with the International Competitive Bidding (ICB) and the National Competitive Bidding (NCB) procedures, except for one contract (US$2.4 million) concerning the urgent repair of scattered road segments, which will be carried out under Force Account contract procedures. Selection of consulting firms will follow Quality and Cost-Based-Selection (QCBS), Fixed Budget Selection (FBS), Consultant Qualification Selection (CQS) and Least Cost Selection (LCS) procedures. Selection of individual consultants will be in accordance with Bank Guidelines for the selection of Individual Consultants (IC). Equipment and furniture will be procured locally following NCB and shopping procedures, as required. Bidding documents developed for similar procurement under the ongoing TMDFPP project, acceptable to the IDA, will be adopted for related tenders.
5 1. Intensive supervision of the early phase of project implementation will be carried out to ensure adequate procurement capacity and arrangements are in place. Two supervision missions per year will review project implementation activities including procurement. The procurement and technical staff based in the Bank’s Yemen country office will also be able to address any assistance needs ofthe PCU.
52. Based on the Procurement assessment conducted for this project, the overall residual procurement risk after the mitigation measures is rated as Moderate.
53. EnvironmentaVSocial. This project was classified under Environmental Category B. In light of the scope of works, which comprise rehabilitation of existing damaged sections of regional roads and flood protection works, the risks of triggering negative environmental and social impacts in the project areas are minimal. The TMDFPP is also very experienced in IDA’S environmental and social safeguards compliance, including implementation of a highly satisfactory resettlement village where 244 households from a marginalized community that squatted in flood paths were resettled to a new resettlement village, where they enjoyed secure property tenure, improved shelter conditions, a range of amenities and services, and community development activities. 54. Ofthe 10 existing safeguard policies, one-OP/BP 4.01 on Environmental Assessment- is triggered while two other safeguard policies-OP4.12 on Involuntary Resettlement and OP4.04 on Natural Habitats-remain to be determined and will thus have to be assessed during the course of project implementation. In accordance with OP8.0, an Environmental and Social Screening and Assessment Framework (ESSAF) was prepared that will govern safeguards screening and compliance activities during implementation, which was discussed and agreed with the PCU. In addition, the PCU prepared for this project a Resettlement Policy Framework (RPF), which has been cleared by IDA. In addition, an environmental specialist will be recruited competitively for the newly established PIU in Seiyun to oversee safeguards compliance of
14 project activities. In light of the limited risk of triggering OP4.12, the existing and highly experienced TMDFPP social and resettlement officer, who oversaw the resettlement component under the original project and who will continue being based in the Taiz PIU, will be called upon as may be needed for social safeguards issues. Finally, concerning OP 4.1 1 on physical cultural resources, vigilance will be ensured during the construction stage for chance find procedure.
55. Lessons learned and reflected in the project design. The proposed project design takes into account lessons learned from previous operations in Yemen as well as from global disaster risk management and emergency reconstruction operational experience:
SirnpliJied project design: While the post-disaster reconstruction and recovery needs come close to US$ 1 billion distributed over many productive, infrastructure and social sectors that extend beyond just transport and flood protection, the reality is that complex multi-sectoral projects are difficult to implement in an environment with limited capacity such as Yemen, particularly under emergency conditions. Therefore, the project focuses on only two priority areas of reconstruction needs, i.e. road rehabilitation (as the worst hit infrastructure sector) and flood protection works (in support of agriculture and shelter, which were the two most affected sectors by the disaster). Use of existing implementing agencies: Given that the project design, appraisal and implementation timeframes are shorter than regular investment projects, it is essential that existing implementation mechanisms be utilized to the extent possible and strengthened as may be needed. The project is utilizing an existing well-performing PMU which has over 15 years experience managing IDA-financed projects, and which has maintained a Highly Satisfactory implementation rating over the past 18 months. The PMU staff members are knowledgeable of World Bank processes and guidelines for lending. Particularly, in light of the significant capacity limitations - the acute shortage of staff familiar with the implementation of IDA projects and fiduciary responsibilities (procurement and financial management), the option of setting up a new PMU was not deemed practical, especially in the context of an emergency operation where implementation efficiency is critical. Additionally, existing concern over Yemen’s absorptive capacity of donor funds, which have increased fourfold since the 2006 London donor meeting, further supports the concept of relying on effective and tested arrangements. In a context with limited capacity and little incentives due to poor civil servant pay scale, PMUs are particularly effective and relied on in Yemen due to their ability to recruit and retain qualified and motivated professionals for effective implementation. Finally, continued capacity building and technical support will be provided by the Bank to further strengthen implementation capacity. Intensive supervision. Since emergency projects are put together over a much shorter time period, as a result many details are left to be defined during project implementation. Flexibility will be required to deal with changing post-disaster conditions, therefore more IDA supervision effort will be applied to this project. The presence of a robust urban sector portfolio in Yemen allows for four different missions per year alternating between preparation and supervision (two missions each). Thus, two formal supervision missions will be planned per year, but will be coupled with two informal follow-up missions in between. Additionally, short missions in-between may be planned as needed due to the presence of several Sana’a-based IDA team members.
15 Technical standards utilized should reflect the affected area s natural hazards risk profile. Previous projects have shown that upstream (design phase) consideration of technical standards in order to rebuild to adequate standards that factor in hazard risks is important. Technical assistance and international expertise in areas like flood protection master plan and hydraulic studies will be provided as necessary to ensure enhanced understanding and compliance.
Emergency operations shouldfocus on measurable results and outcomes tied to the short implementation timeframe. The results framework under the proposed Project will follow this approach.
56. The proposed project involves one exception to Bank policies. This concerns the requirement under OP 13.20 -Additional Financing for Investment Lending, that the activities under an Additional Financing be completed within three years from the closing date of the original project. The closing date of June 30,2008, ofthe original TMDFPP implies a maximum closing date of June 30, 201 1 for completion of activities under the proposed second additional financing, which will leave slightly over two years from the expected effectiveness date. In light of capacity limitations and to ensure satisfactory completion of the activities envisaged under the proposed second additional financing, the Rapid Response Committee meeting recommended a four-year implementation period. As such, a waiver was requested and signed by the Managing Director on February 1 1, 2009, to waive the above requirement under OP 13 -20. This allows to extend the closing date to May 15, 2013, to enable the satisfactory implementation of activities envisaged under this additional financing.
E. IMPLEMENTATION ARRANGEMENTS AND FINANCING PLAN
57. Institutional arrangements. The MOPWH will be responsible for the implementation of the Project, which will be executed by the existing PMU implementing the TMDFPP. The PMU has completed the implementation of the original TMDFPP project and currently engaged in the implementation of the first AF to the TMDFPP. The PMU implementation rating was rated highly satisfactory over the last three Implementation Status Reports and this rating was confirmed internally by the Bank’s Quality Assurance Group (QAG).
58. A modification to the existing TMDFPP PMU setup is introduced to accommodate the expanded mandate and the geographical coverage which includes in addition to Taiz the two disaster-affected governorates of Hadramout and Al-Mahara. The PMU will be restructured to become a Project Coordination Unit (PCU) and it will assume the overall project management, fiduciary and Monitoring and Evaluation (M&E) functions for the TMDFPP. The PCU will be headed by the current TMDFPP PMU Director and will comprise of a core staff consisting of two procurement officers, a financial and administration officer (supported by an accountant and a payment expeditor), an M&E specialist, and a bilingual executive secretary. These positions will be occupied by the same respective staff of the existing TMDFPP PMU, except for the M&E specialist and a second procurement officer which will be competitively hired from the local market to further strengthen the PCU. The PCU will report directly to the MOPWH. The PCU will be responsible for overall project management, fiduciary and M&E functions. It will be located in Sana’a and will be supported by two field-based Project Implementation Units (PIUs). The first in Taiz retains the same existing PMU staff in engineering, urban planning, safeguards, local government strengthening and support staff and will be responsible for all the
16 activities related to the implementation of the ongoing TMDFPP AF. The second PIU will be newly established in Seiyun and will be responsible for the implementation of the proposed second AF, and will require the recruitment of a PIU manager, roads and agricultural engineers, and an environmental engineer. The proposed project will be implemented over a four-year period from the expected date of effectiveness. Construction supervision and design consultants will be retained to support implementation.
59. Alternative implementation arrangements considered. To process the proposed operation, several operational instruments and implementation arrangements were assessed within the scope of the OP 8.0 emergency policy. In terms of instruments, the two options of a standalone emergency recovery operation and additional financing to an existing well- performing project were considered. In terms of implementation arrangements, the reliance on an existing PMU, whether within the scope of the same project through an additional financing or under a new operation, were considered as opposed to setting up a new PMU. In this context, it is important to note that the recommended mandate for the GOY’S newly-established Reconstruction and Recovery Fund is to only focus on the planning, fiduciary and coordination aspects while leaving implementation to other existing entities. In light of the significant capacity limitations, particularly the acute shortage of staff familiar with the implementation of IDA projects and fiduciary responsibilities (procurement and financial management), the option of setting up a new PMU is not deemed practical, especially in the context of an emergency operation where implementation efficiency is critical. Existing concern over Yemen’s absorptive capacity of donor funds, which have increased fourfold since the 2006 London donor meeting, further supports the concept of relying on effective and tested arrangement. Implementation through an existing, well performing PMUwas therefore deemed the preferred arrangement.
60. Several existing PMUs implementing IDA projects and operational instruments were considered for the proposed emergency project. The outcome of the assessment was in support of Additional Financing to the TMDFPP, to be processed under OP8.0, with a first-order restructuring to evolve it into a national flood protection and post-disaster infrastructure reconstruction program, in line with the GOY’S stated objectives. Particularly important factors were the TMDFPP’s proven experience in flood protection and infrastructure works and in the implementation of IDA projects including large scale procurement packages and the fact that it had the most scope for expansion for activities, at least relative to other PMUs such as the Public Works Program or the Social Fund for Development whose responsibilities greatly expanded over the past few years.
61, Supervision, Monitoring and Evaluation. Two supervision missions will be conducted annually to review project implementation activities including but not limited to procurement, financial management and disbursement, and compliance with the environmental and social safeguard issues recommended in the Environmental Management Plan (EMP) in line with the Environmental and Social Screening and Assessment Framework (ESSAF). In light of the robust IDA urban portfolio in Yemen, significant implementation follow-up will also be undertaken by the entire IDA task team in two additional missions for preparation of lending projects, thus rendering the supervision frequency a quarterly basis. In the first implementation phase, supervision will be particularly intensive to ensure that preparation and implementation activities are performed effectively and address any issues that may arise. In addition, technical and fiduciary staff based in the World Bank’s Yemen country office will also regularly follow up on implementation and provide support to the Borrower for any assistance needed. As for M&E,
17 a new position will be established in the PCU to monitor project performance and progress on the outcome and output indicators. A special M&E section will be part of the Borrower’s Progress Reports.
62. Closing date and implementation schedule. The implementation period of the proposed project is four years, requiring an extension of the closing date of the ongoing first Additional Financing to the TMDFPP from October 3 1, 20 10, to May 15 , 20 13. This extended closing date was made possible by a waiver from the Managing Director approved on February 11, 2009, which waived requirement under OP 13.20 that the activities under an Additional Financing be completed within three years from the closing date of the original project.
F. PROJECT RISKS AND MITIGATING MEASURES
Risk Risk Mitigation Measure@) Residual risk rating Overall Country Risk Moderate Current fiscal crisis affects the Strong MOPWH commitment to the Project Moderate project’s local Government including already confirming the first year’s contribution local contribution. desDite budget cuts
Limited ownership of Disaster 0 Strong existing GOY commitment Moderate/ Risk Management agenda or Bank and GFDRR engagement with the GOY Substantial institutional infighting over 0 Ongoing technical assistance to strengthen the mandate DRM institutional framework and instruments (risk and vulnerability mapping, etc) Implementation affected by 0 Expansion and restructuring of the PMU into a Moderate large PMU work burden and/or PCU with two area-based PIUs and recruitment delays in implementation and of additional staff to support the expanded disbursement mandate 0 Reliance on simplified designs to ensure timely launch of procurement and implementation 0 Reliance on force account procedure to immediatelv launch urgent reDair works Limited inter- 0 MOPWH coordination with other agencies Moderate ministerial/agency within the RRF Board of Directors coordination Bank engagement with the GOY Limited donor coordination 0 Ongoing technical assistance to the GOY to Moderate and fragmentation of structure the RRF reconstruction and recovery Reconstruction and recovery plan based on the efforts joint DLNA priorities and recommendations 0 Continuation of active donor coordination efforts by the IDA and GFDRR (underway since the early stages) jointly with the MOPIC Procurement capacity issues 0 Recruitment of a full-time procurement Moderate specialist and international procurement specialist as STC to support procurement and contract management
0 IDA supervision Financial management Newly recruited qualified accountant has Moderate capacity issues ensured segregation of duties and led to
18 strengthening PMU FM capacity 0 IDA supervision
Safeguards capacity issues 0 Recruitment of environmental engineer to Moderate supervise safeguards implementation 0 Consultant support for the preparation of EA and EMP Intensive IDA safeguards supervision
Poor implementation of urgent 0 Recruitment of qualified construction Moderate repairs by the GCRJ3 supervision consultant Overall Risk Rating Moderate
G. TERMS AND CONDITIONS FOR PROJECT FINANCING
63. The proposed project will be financed through a US$35 million equivalent IDA Grant. These funds were drawn from IDA 15 on an exceptional basis to support disaster reconstruction and recovery in the affected areas, as well as risk reduction in Yemen, following GOY’S official request for financial support.
19 Annex 1. Detailed Description of Project Components
1. The Additional Financing will finance activities under two components, as detailed below. These align with the existing TMDFPP first and third components, covering respectively flood protection and infrastructure, and capacity building. No investments will be allocated for the second component of TMDFPP covering resettlement activities.
2. Component 1-Flood protection and infrastructure rehabilitation (US$38.5 million equivalent, ofwhich IDA share US$ 32.8 million equivalent). This component comprises of two sub-components. The first sub-component will carry out works for rehabilitating and reconstructing selected priority regional roads where critical segments have been destroyed by the flooding to adequate flood-proof standards, and retrofitting with adequate storm water drainage systems that could withstand future flooding events. The second sub-component will carry out works for rehabilitating and constructing selected priority components of the flood protection system in the affected areas of Wadi Hadramout, Hadramout Sahel and Al-Mahara which were damaged or affected by the storm and floods, and which served to protect human settlements and agricultural lands, including: (a) stone works; (b) flood protection works using gabions; (c) dredging and filling works; (d) rehabilitation of Wadi beds; and (e) removal of the Sayssaban trees that block the flow offlood and storm water in Wadi beds.
3, Regional road rehabilitation sub-component (USs24.3 million equivalent, of which IDA share US$20.6 million equivalent) I Interventions under this sub-component include rehabilitating and reconstructing selected priority regional roads where critical segments have been destroyed by the flooding, and retrofitting with adequate storm water drainage systems. According to the DLNA, the magnitude of destruction to the transport sector (mainly on account of roads) is estimated at YR 12 billion (US$60 million), making it the most affected of all infrastructure sectors, and the third most important sector in terms ofreconstruction and recovery needs after agriculture and housing. Restoring the functioning of the main regional roads to a flood resistant standard is a key priority to restore the uninterrupted movement of goods and people and enable access to jobs and public services. It is important to note that the destruction ofregional roads greatly hindered post-disaster emergency relief efforts especially in the Wadi.
4. The identification ofrehabilitation investments and the design ofthe road sub-component are in alignment with the Yemen Rural Access Roads Project-an IDA-supported Adaptable Programmatic Loan (APL) currently under implementation-in terms of technical issues, and institutional, operation and maintenance (O&M) arrangements. In particular, the rehabilitation investments complement those of the Rural Access Roads project. Institutionally, the MOPWH’s Roads Sector will oversee the design and implementation of the works. The O&M ofthese regional roads will be the responsibility ofthe RMF.
5. This sub-component will finance the repairs of damages over the entire regional road network in the Wadi Hadramout area (the worst affected by the disaster) as well as the Riyan- Ben Aifan regional road in Sahel Hadramout (one of two road connections between Wadi Hadramout and the rest of Yemen, the other being Ben Aifan-Al-Abr). The flood-related damages to be tackled under the project include: (i)washout/erosion of one or both sides of the road caused by inadequate slope protection structures including some instances where the whole road has been damaged and traffic rerouted; (ii)damages to and blockages of single or multi-cell box culverts and pipe culverts causing consequential local damages to the road; (iii)partly or
20 fully damaged Irish crossings (cement concrete drifts across river beds); (iv) damages to bridges and bridge abutments; (v) minor damages to road pavement and shoulders due to soaking of the pavement and subsequent loss of load bearing capacity requiring asphalt patching and shoulder rehabilitation; and (vi) damages and blockages of roads due to rock fall and slides caused by extensive rain and which led to subsequent damages to road pavements and side drains.
6. In total, 12 regional roads will be covered under this sub-component, totaling 40km in damage length (See Table 1). The preparation of designs and tender documents is currently underway including the feasibility studies for two specific segments. The cost of repairs, at US$24.3 million equivalent, will allow building back the damaged sections along the same footprint and alignment, but with adequate flood-proof standards. Of these, some US$2.4 million equivalent are estimated to be needed for urgent repairs of segments that cause serious risks to motorists, which from a safety point of view is not advisable to wait for competitive contracting. These are the instances of 7-meter wide highways, where one lane collapsed and the other is threatening collapse due to erosion, but where the road remains in use. For this purpose, an allowance for retroactive financing and the use of force account to the benefit of GCRB (via a performance-based contract based on existing established unit rates as those used with the RMF) will be introduced while ensuring adequate quality control.
Table 1. Investments in regional road rehabilitatiodreconstruction I I Total 1 Damage I Damage restoration cost I Regional roads length length (million (,OOO US$) (km) (m) YR)
Algharf-Sah 53 4,800 388.9 1,944.3 Alaleeb-Rahaba 23 400 40.7 203.7 Total 861 39,990 4,858.2 24,290.8
7. Additional protection works and realignment of the roads’ right-of-way are needed for segments in two of the abovementioned regional roads, namely Riyan-Ben Aifan and Al-Gharf- Sah. These works could cost up to an additional US$13.8 million, subject to feasibility studies that are currently underway. The first segment is a 6 km long section of the Al-Riyan - Ben Aifan highway located in a wadi that was totally washed away by the floods. The possibility of relocating this segment ofthe road away from the wadi, partially or fully, is being investigated to determine technical and economic viability, and to minimize environmental impact (the impact on resettlement will also be examined, although the fact that the adjoining lands are uninhabited
21 publicly-controlled desert land makes it unlikely). The second segment is a shorter section on the important 53 km long road link to Sah from A1 Gharf located between Seiyun and Tarim. This road serves several large towns and on one location the old Irish crossing was washed away at a bend in the river posing a threat to the approach road. There is also a depression and small lake in the location of the old crossing, and it does not seem to be the ideal location for a new crossing, whether bridge or improved concrete drift. Relocating the crossing away from the current location is also being investigated to determine economic and technical viability and to minimize environmental impacts before reconstruction can start. There is also an urgent need to improve the detours now offered to trucks and light vehicles as only 4-wheel drive vehicles can use the short direct detour close to the old crossing. Finally, the decision of whether to include these two additional improvements will hinge on the outcomes of the feasibility study and the availability of funds, whether through cost savings and/or through additional funds being made available by the GOY, the RRF or other donors.
8. Flood protection system rehabilitation sub-component (US$I4.2 million equivalent, of which IDA share US$ 12.1 million equivalent). Interventions under this sub-component include rehabilitating and reconstructing selected priority components of the flood protection system in the affected areas, which were damaged or affected by the storm and floods, and which served to protect human settlements and agricultural lands. According to the DLNA, the magnitude of destruction to the agriculture, livestock and fisheries sector is estimated at YR 109.9 billion (US$550 million), making it by and large the most affected sector by the disaster. It is followed by the housing sector, where the damages are estimated at YR 32.2 billion (US$ 161 million). Restoring the functioning of the main elements of the flood protection system is thus a key priority to protect agricultural land and shelterhuman settlements, and thus facilitate post- disaster economic recovery and safeguard any future reconstruction from the effects of future flooding events. Flood protection works that are both effective and labor-intensive (such as the use of Gabion walls) will be relied upon where feasible to enable the creation of temporary job opportunities for the affected communities to partly support the households that lost their income and livelihoods in the disaster, for the duration of the reconstruction and recovery period. Viable O&M arrangements will be introduced involving Local Councils (including branch offices of MOPWH and the Ministry of Agriculture and Irrigation) and beneficiary communities.
9. This sub-component will finance the following investments, presented below for each of the affected areas-Wadi Hadramout (US$6.7 1 million), Sahel Hadramout (US$ 2.56 million) and Al-Mahara (US$5.00 million):
In the Wadi Hadramout region, the works will be carried out in 11 Wadis: Daw’an, Al-Ein, Ammad and Qassam, Heynun, Hathyah, Ser, Bin Ali, the main Wadi running from Kaoda to the west to Haid Qassim bridge to the east, Addam, Massila running from Haid Qassim bridge to the east to Sena west of Al-Soum, and Thabi. The investments include stone works (US$ 1.24 million), flood protection works using gabions (US$0.97 million), dredging and filling works (respectively US$0.85 million and US$1.98 million), rehabilitation of Wadi beds (US$O. 16 million), and removal of the Sayssaban trees that block flood and storm water flow in Wadi beds (US$1.51 million). The total estimated cost amounts to US$6.71 million, as detailed in Table 2.
22 Sayssaban Stone Gabion Wadi Bed Tree Total Works Works Dredging Filling Rehabilitation Removal cost Name of Wadi (US$) (US$) (US$) (US%) (US$) (US$) (US$) Dawan 22,500 0 5,000 42,000 0 0 69,500 A1 Ein 2 1 1,500 0 2,500 90,500 0 0 304,500 Ammad & Qassam 123,500 94,000 0 212,500 90,500 0 520,500
0 In the Hadramout Sahel region, the works encompass a total of 30 discrete activities in eight different districts as follows: Daw’an, Ghail Binyamin, Aryaf Mukalla, Hajar, Al-Shihr, Raydah and Al-Qosseir, Yabooth, and Al-Diss Al-Sharkiya. The works include the rehabilitation and construction of new small flood protection structures to protect agricultural land and shelter and the rehabilitation of irrigation canals, ditches and diversion structureddykes damaged by the floods. The total estimated cost amounts to US$2.56 million, as detailed in Table 3.
Al-Diss Al-Sharkiya 2 1,099 20,400 4 1,499 Total 1,556,943 707,123 293,080 2,557,147
0 In Al-Mahara, the works encompass flood protection works (retaining walls and protection structures made of gabion walls) in 36 different sites in 12 different Wadis located in three districts-Al-Ghaida, Haswain and Al-Massila. The estimated cost of the works in 13 sites in three Wadis in Al-Ghaida district amount to US$0.75 million. The estimated cost of the works in four sites in two Wadis in Haswain district amount to US$1.54 million. The estimated cost of the works in 19 sites in seven Wadis in Al-Massila district amount to US$2.71 million. The total estimated
23 cost of the flood protection works in affected areas in Al-Mahara Governorate thus amounts to US$5.00 million as detailed in Table 4.
Stone works Gabion Works Dredging Filling Total Cost Name of District (US$) (US$) (US$) (US$) (US$) Al-Ghaida (3 Wadis) 246,810 457,007 32,904 8,409 745,130 Haswain District (4 Wadis) 483,975 987,096 58,345 13,911 1,543,327 Al-Massila (7 Wadis) 912,560 1,640,503 92,165 64,924 2,710,152 Total 1,643,345 3,084,606 183,413 87,244 4,998,608
10. Component 2-Resettlement of Affected Persons (US$O.O million equivalent). The restructured project is not expected to finance any activities under this component (which under the original TMDFPP financed a large-scale resettlement program of 244 households), as no resettlement activities are expected under the emergency operation. If any resettlement is to occur, it will be governed under the RPF and financed under Component 1.
1 1. Component 3-Capacity Building (US$2.5 million equivalent, of which IDA share US$ 2.2 million equivalent). The objective of this component is to strengthen the capacity of local governments in disaster risk management and reduction including the preparation of flood protection plan for Wadi Hadramout and a storm water drainage master plan for Mukalla city and setting up local government capacity in disaster preparedness, mitigation and response, and provide support to project management through financing the cost of consultancy services for design and construction supervision, other short term consultancy services in procurement and environmental safeguards, and independent annual audits of project financial management activities; and cover Project Management expenses (salaries, incremental operating cost, and goods) over the four-year implementation period.
24 Contract Description US$ Million Eauivalent Flood Protection Consultancy services to develop a flood protection $0.400 Plan for vulnerable plan for the critically damaged and vulnerable areas areas of Wadi of Wadi Hadramout. Key outputs include identifying Hadramout priority flood protection measures for vulnerable areas; setting construction standards in flood-prone areas; strengthening capacity for flood risk reduction; and proposing an implementation strategy Mukalla Storm Consultancy services to develop a master plan for 0.300 Water Drainage storm water drainage in Mukalla city. The master Master Plan plan will map vulnerable areas and reflect them in a proposed land use plan, identify priority drainage works and needed interventions (structural and non- structural); and propose an implementation strategy. Local Government Consultancy services to prepare a strategy and action 0.040 Capacity Building plan to strengthen local governments in disaster preparedness, mitigation and response. Procurement of goods (priority equipment needs) to 0.060 support local governments’ capacity in disaster preparedness. Design and Consultancy services for the supervision of 0.730 construction construction works related to all works undertaken and supervision under the project (roads and flood protection 0.420 respectively) and design related to the flood Drotection sub-comnonent. Procurement support Short-term consultancy services to provide upstream 0.030 procurement support at critical stages of implementation Environmental Short-term consultancy services to provide support in 0.025 Assessment support preparation of environmental assessment and environment management plan for the different works Audit Independent annual audit of the Project’s financial 0.15 management activities Project Management Consultancy services, goods and incremental 0.444 operating cost to cover the Project Management Unit (PMU) staff and activities over the implementation period
25 Annex 2. Results Framework and Monitoring
PDO Project Outcome Indicators Use of Project Outcome Information i)protect residents, In case of flooding: Evaluate improved resilience economic activities and Area protected from of repaired and maintained infrastructure from seasonal flooding in Taiz, flood protection works flooding in Taiz, Hadramout Hadramout and Al-Mahara and Al-Mahara Reduction in loss of crops due to flooding in Hadramout and Al-Mahara Reduction in the percentage of businesses affected by floods in Taiz Reduction in annual expenditures of emergency repairs to infrastructure damaged by floods in Hadramout, Al-Mahara and Tai- z ii)restore access to critical Evaluate improved resilience 0 Reduced travel time in road infrastructure damaged affected areas in Hadramout ofrebuilt roads by floods in Hadramout and and Al-Mahara; Al-Mahara iii)strengthen capacity of 0 Increase in locally Assess improved institutional local government in Taiz generated revenues in Taiz capacity for local service and support Yemen’s 0 Taiz Local Councils delivery and efficient disaster decentralization program function effectively and crisis management in local provide client-oriented government services
0 Increase in direct solid waste collection in Taiz (average tons per month) Number ofcitizen services provided by Taiz local administration at the Local Council buildings
0 Implementation of disaster preparedness plans in Hadramout and Al-Mahara
Intermediate Outcomes Intermediate Outcome Use of Intermediate Indicators Outcome Monitoring Component 1 : Flood Protection and Length ofroad sections that Verify timeliness and
26 Infrastructure have been repaired or relevance of emergency Rehabilitation consolidated with response satisfactory technical standards in Hadramout and Assess effectiveness of road Al-Mahara reconstruction program
0 Number offlood protection works completed with Assess effectiveness of flood satisfactory technical protection structures repair standards in Taiz, and maintenance program Hadramout and Al-Mahara Component 2:
Resettlement of Affected 0 Number ofhouseholds with Assess effectiveness of the persons improved housing and resettlement activities infrastructure in Taiz Number ofhouseholds possessing titles for their DroDertv in Taiz Component 3 : Capacity Building 0 Increase in the revenues for Assess effectiveness of Taiz Local Council institutional strengthening at 0 Increase in training to local the local level councils in Taiz
0 Increase in Solid Waste equipment to local council in Taiz
0 Completion ofthe flood protection master plan for Wadi Hadramout
0 Completion of Storm water drainage master plan for Mukalla
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m2 ;eSP 3 Tr Annex 4. Financial Management and Disbursement Arrangements
Background
1. The proposed Additional Financing with restructuring to the TMDFPP, processed under OP8.0, will finance activities that align with the existing TMDFPP first and third components, covering respectively flood protection and infrastructure, and capacity building. No investments have been allocated for the second TMDFPP component which covers resettlement activities as none are anticipated under this component. If there are any resettlement activities, they will be carried out under Component 1. The project will rebuild selected critically damaged road and flood protection infrastructure in the affected areas to adequate standards that could withstand future flooding events and will build local government’s capacity in disaster risk management and reduction through a series of activities including preparation a flood protection plan for key vulnerable areas of Wadi Hadramout and a storm water drainage master plan for Mukalla city among other activities as well as cover project management expenses over the three-year implementation period. The project will be implemented by the same TMDFPP PMU, which will be restructured into a Project Coordination Unit (PCU) and two area-based Project Implementation Units (PIUs) in Taiz and Seiyun to reflect the project’s expanded coverage to more than one geographic area.
2. As a result of the restructuring of TMDFPP, the scope of the responsibilities of the TMDFPP FM unit will be increased to include managing the financial activities of the proposed Additional Financing. Financial management of the new restructured project will be done centrally from the PCU in Sana’a which is consistent with the structure of the existing project (TMDFPP). This is to say that, the impact on the FM arrangements as a result of the restructuring of the project will be limited to having the same FM unit in Sana’a manage the additional activities, as the project’s expansion geographically to Hadramout and Al-Mahara will be managed centrally from FM perspective.
3. The table below summarizes the financial management performance under the existing project and the arrangements and risk as a result ofthe new AF:
36 =$c '$ .d Y 00 m FINANCIALMANAGEMENT ARRANGEMENTS
4. An assessment of the financial management arrangements of the TMDFPP was conducted in January 2009 with special attention made to the impact on the FM arrangements as a result of the restructuring of TMDFPP. The purpose of the review of existing systems and internal controls of the TMDFPP PMU was to assess the adequacy of accounting system, staffing, procedures and controls, and determine how these can continuously be used and relied upon under the proposed Additional Financing. The appraisal assessed any weaknesses in the FM arrangements and provided measures to mitigate these and to ensure that the Additional Financing will have built-in safeguards to successfully achieve its project development objectives. Overall, based on the assessment, the project's financial management arrangements were determined to be Satisfactoq. Note: The PCU should ensure proper implementation of the agreed upon plan to maintain satisfactory FM arrangements.
Organization and Staffing
5. Financial Management (FM) activities under the proposed Project will be carried out by a Project Coordination Unit (PCU) based in Sana'a that is staffed with the existing, experienced Project Director and fiduciary staff of the TMDFPP PMU. The PCU as with the PMU is under the Ministry of Public Works and Highways (MOPWH). The Financial Manager is supported by an accountant who was recently recruited to the PMU to ensure appropriate segregation of duties and responsibilities of staff and to build up the capacity of the FM unit to be able to manage the Additional Financing projects. The current FM staffing is deemed adequate to manage both the ongoing activities and the proposed Additional Financing under the emergency operation. The staffing of FM unit will be further assessed during implementation to ensure that the existing staffing arrangement is sufficient. Additionally, the PMU has two financial representatives assigned by the Ministry of Finance (MOF) to ensure that the Government contributions are properly accounted for, in accordance with the objectives of the project, under the supervision of the Project Director and Financial Manager.
Accounting System & Internal Controls
6. A computerized accounting system has been in operation since 2002, and a financial management system is in place. The project has been preparing and submitting comprehensive IFRs in a timely manner. Under the new AF project, the PCU will modify the current accounting system to add a new system code dedicated to accounting; and reporting; for the new project. The accounting system for the new project should be operational by effectiveness. The PCU will utilize the accounting system to prepare and submit quarterly IFRs, consistent in format with the IFRs under the existing project and in accordance with the Financing Agreement of the new project. Every quarter, the PCU will submit the IFRs to IDA after external auditor review. These IFRs will provide the necessary explanation between the planned and actual figures of the report. The project will also submit to IDA on a monthly basis the commitment tracking sheet that illustrates all the commitments under the project. Copies of the IFRs will be included in the project files.
39 7. Chart of Accounts (COA). The PMU’s COA has been set up and installed in the computerized accounting system under the original project. The COA was developed under the original project, and included in the OM to enable data to be captured and classified by budget, project components and disbursement categories. It has a logical structure for recording financial transactions and the capacity to classify and sub-classify accounting data. Under the new project, the COA will be set up and installed in the modified accounting system to reflect the related activities and would continue to follow cash-basis accounting. The set up of the CoA will be done in coniunction with the modification of the accounting system.
8. Operational Manual. An existing satisfactory OM is in place. The OM includes accounting system, internal control mechanisms, organization and staffing for FM functions, procedures for cash and asset management, budgeting, etc. The PCU will update the OM to reflect the increased scope of activities as a result of the proposed Additional Financing. IDA will review the OMafter effectiveness to ensure the OMis updated accordingly.
9. Accounting Policies and Procedures. The OM describes in detail the applicable accounting policies and procedures. The books of account will continue to be maintained on cash basis using double-entry bookkeeping principles.
10. Internal Controls. The OMincludes internal controls with clearly written administrative, accounting, and operational procedures that define the levels of authority and responsibilities, and properly record and safeguard project related assets and resources. The internal controls in place have been working effectively and they include:
. A budgeting system with regular monitoring of financial performance; . A suitable authorization process for the award of contracts and purchase of equipment and supplies, including documentation procedures, which are in compliance with World Bank policies; . An appropriate segregation of duties and responsibilities, including invoice processing, accounting duties and payment functions; . The design and use of standard forms for recording and controlling financial transactions; . Arrangements for storing project documents and restricting access to authorized personnel only.
1 1. Overall, the internal control procedures ensures proper and consistent control over project funds and expenditures, permits the recording of financial transactions in a timely manner and supports presenting an accurate picture of project finances. To minimize any risks with the Financial Manager handling all transactions, an additional accountant was recently recruited to replace the previous staff who was unqualified to fill this position. This measure will serve to sharpen internal controls.
12. The PMU maintains a fixed assets register for the assets financed by IDA. The fixed assets register accounts for the assets by sources of financing and issue a summary report of the assets register on a regular basis. The PCU will maintain a separate fixed assets register for the assets financed by the new Additional Financing.
40 13. Bank reconciliations are prepared monthly by the accountant, which are then reviewed by the Finance Manager. The PMU also maintains monthly reconciliation between IDA records and the project records. The same procedures will apply to the bank accounts of the new Additional Financing;.
Flow of Funds and Disbursement Arrangements
14. Counterpart Funding. The government counterpart financing will be in cash and in kind, i.e. the Project Management Unit’s office. The PCU will maintain a local currency account at the CBY, where the MOF will deposit the Government contribution for the project.
15. Designated Account. For smooth project implementation, the PCU will maintain and operate a Designated Account in US dollars in the Central Bank of Yemen (CBY) under conditions acceptable to the IDA. This new Designated Account will be unique to this additional financing. The Project Director, with the assistance of the Financial Manager, will be responsible for administration of the Designated Account and all disbursements related transactions for the project. Only two signatures are required on any withdrawal application - that of the Project Director and Financial Manager. A copy of the signed WA is sent to the MOPWH for their records. The same procedure will apply under the new AF where the PCU will manage the project’s DA under conditions acceptable to IDA. Other accounts will not be combined with IDA funds in the Designated Account and funds for each AF will be maintained separately.
16. Flow of Funds. The PCU will prepare Withdrawal Applications (WAS) with the related SOEs and supporting documents and send them to MOPIC and MOF for the signature of authorized officials. SOEs will be used for expenditures on works contracts costing less than USD 1,000,000; goods contracts costing less than USD 200,000; consultant firm contracts costing less than USD 100,000; individual consultant contracts costing less than USD 50,000 and for any training or operating costs, if applicable. The PCU will collect the authorized WASand submit them to the IDA. IDA will deposit replenishment of the Designated Account at the CBY for the account of the PCU. The PCU will maintain two bank accounts at the Central Bank of Yemen as follows:
IDA Desimated Account: Disbursements from the account will be made through requests for bank transfers to beneficiaries.
1) Payments related to Civil Works, Consultants’ services, Operation cost (except for salaries), and Goods and Equipment: (a) payment certificates will be reviewed and signed by the Project Director and Finance Manager; and (b) sent to the MOF for approval by the authorized officials in the MOF.
2) Payments related to salary and wages will be (a) signed by the Project Director and Finance Manager; (b) sent to MOPIC for approval of the authorized officials; and (c) to MOF for approval by the authorized officials in the MOF.
m Government Contribution Account: The Government of Yemen (GOY) via the project executing agency (MOPWH) has already committed US$6.0 million, which is planned to
41 cover the gap in financing that are not covered by IDA. The PCU will maintain a local currency account at the CBY, where the MOF will deposit the Government contribution for the project. Disbursements from the account will be made by checks signed by the Project Director, Finance Manager and MOF representative.
The project will also manage petty cash of YR200,OOO at the PCU in Sana’a, YR300,OOO at the PIU in Taiz, and YR300,OOO at the PIU in Seiyun. These amounts will be financed from the local contribution and kept by the project cash custodian at each location. They are used to finance small payments of operating expenditures. The PCU will record the petty cash amounts in the PIUs as advances and replenished upon settlement of amounts disbursed. Before replenishment of the petty cash, a memo together with the supporting documents will be submitted by the cash custodian to the Project Director, Finance Manager and the MOF representative, for review and approval.
Direct Payment Payments related to Civil Works, Consultants’ services, Goods and Equipment are made by preparing a Withdrawal Application signed by the Project Director and the Finance Manager and sent to the MOPWH for approval and signature by the Minister or the First Deputy Minister. Then, the Application is sent to MoF ,for approval of the authorized officials and a request to IDA to transfer the funds to the beneficiary account as specified in the WA.
Expenditure Category Amount in Financing Percentage USD% million 1. Works 32.755 85% 2. Goods & Equipment 0.088 65% 3. Consultancy Services 1.868 100% for international consultants and 80% for local consultants 4. Project Management Costs .299 80% Total 35.000
17. The GOY via the Project executing agency (MOPWH) has already committed US$6.0 million, which will allow it to cover the financing percentages noted above that are not covered by the IDA agreement. Confirmation was received from the MOPWH that YR 90 million (US$450,000) is available as Government contribution for the remainder of calendar year 2009 and that YR 400 million (US$2 million) will be budgeted for the following calendar year 201 0.
18. Chart below summarize the flow of funds:
42 US$ SA - Central Bank of Yemen Central Bank of
Note: The chart below applies to payments for the project's US$ DA for civil works and goods & equipment expenditures, consultants' services, and operating cost (note: salaries and wages require an additional approval from MOPIC before MOF).
by PCU __+ Acct Apv.
CBY Pymt
Reporting Requirements r
19. Financial Reporting. The PCU will continue to coordinate the activities of the project, be responsible for consolidating and processing all reimbursement claims, as well as the submission of quarterly IFRs which will be specific for the new AF. The Finance Manager will maintain the same responsibility for producing a full range of interim financial reports, including sources and uses of funds, and the Designated Account Reconciliation Statement. The PCU will continue sending a full set of quarterly IFRs generated from the computerized accounting system to the World Bank.
43 20. Quarterly IFRs should correspond with the annual financial statements that will be audited and submitted to World Bank. Separate IFRs will be submitted for the proposed AF.
Auditing Arrangements, Accounting and Auditing Standards
21. The accounts and financial statements of the project will be subject to annual audits, under terms of reference and condition acceptable to IDA. Annual audits of the Project will be submitted to IDA within six months following the end of the project’s calendar year (January- December) - every June 30 ofeach year.
22. Terms of Reference (TORS) for the external auditor are included in the OM. It includes both an annual audit of financial transactions, and a “management letter” - an assessment of the financial management system, including the adequacy of internal controls. The PCU will provide the auditor with access to project-related documents and records, as required by the auditor.
23. The TMDFPP PMU has been submitting project’s audit reports on time. The World Bank received the 2007 Audit Report on time; the review indicates the auditor’s opinion to be unqualified and there were no major findings.
Risk Analysis
24. Financial Risks. The recruitment and retention of local qualified finance staff is an area of risk. To mitigate this, IDA’SFinancial Management Specialist will keep close supervision to detect issues ahead of time and the PCU will continue to provide training on the computerized accounting system and IFRs to reduce the overall risk. Another risk is the project’s plan to have retroactive financing for a portion of the activities which will take place prior to effectiveness. Such expenditures may not be eligible for Bank financing and this requires a clear traininghcreening of expenditures and involvement of Bank procurement specialist.
Strengths and Weaknesses
25. Strengths. The proposed Additional Financing will have the following strengths in the area of financial management: (i)the Finance Manager, who is experienced and familiar with the World Bank’s policies and procedures, has strong commitment to manage the PMU-FM in accordance with Financing Agreement; (ii)there is an existing project financial management manual which details the funds flow process, the accounting arrangements, financial reporting, auditing, information system, etc. which requires updating to reflect the new AF, and (iii)a computerized accounting system already exists, which requires modification to reflect the new AF. The manual and accounting systems are considered strengths ofthe project even though they need updating as the PCU will be starting from solid grounds.
26. Weakness. The country suffers from an extremely limited number of Certified Public Accountants, Accountants, and Auditors, which could adversely affect the financial management and accounting systems of the PCU, should there be staff turnover. This risk is mitigated by recruiting qualified accountants who receive competitive compensation and are provided
44 opportunities for training on international accounting and auditing standards via Bank's workshops and training events.
Readiness for Implementation
27. There is an existing satisfactory financial management system in place in the PMU and upon implementation of the agreed upon actions noted above, the PCU should have satisfactory financial management arrangements.
Supervision Plan
28. The supervision practices will be focused more heavily on the early phase of the project to ensure proper FM arrangements are in place and the capacity of the FM unit is appropriate. Subsequently, two supervision missions a year. This will ensure that the financial management system in place will be maintained.
29. Supervision missions will evaluate the financial management arrangements of the PCU, i.e. updating of the Financial Management Manual, Designated Account, internal control, work and document flow, follow-up on audits, etc. The mission will conduct a random review of the Designated Account, IFRs, compliance with the financial covenants, disbursements, physical progress vs. financial disbursements, and financial record management.
45 IO1 n 13. El Annex 5. Procurement Arrangements and Plan
A. General 1. A Country Procurement Assessment Report (CPAR) for Yemen carried out in 2000 concluded that the procurement legislation, Law No. 3 of 1997 concerning Government Tenders, Auctions and Stores, and corresponding Regulations introduced by Decree No. 234 of 1997, was a significant improvement over previous legislation for public procurement but nonetheless not yet up to acceptable international standards.
2. The CPAR recommended a set of comprehensive National Procurement Manual (NPM) to support capacity building of the GOY'S procurement management at all levels together with a national Standard Bid Documents (SBDs) for goods, works and services. The NPM and SBDs for works, goods and consultancy services were endorsed by the Cabinet in April 2006, and preparation and capacity building efforts led by the Technical Committee of the High Tender Board had been in 2007 till now for broad dissemination of these country procurement documents.
3. In addition, to the credit of the GOY as part of the National Reform Agenda adopted in early 2006, a new reform oriented public procurement law reflecting international best practice has been prepared with Bank and USAID support which was ratified by Parliament on July 24, 2007.
B. Procurement Arrangements 4. All procurement activities for the proposed project will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, Revised October 1, 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 Revised October 1, 2006, and the provisions stipulated in the Grant Agreement. The various items under different expenditure categories are described in the sections below. The attached simplified procurement plan presents the procurement packages and tendering methods agreed between the IDA and the Borrower on January 24,2009. The procurement plan will be updated in agreement with the IDA Project team annually or as needed to reflect the actual project implementation needs. Given the emergency nature of the operation, exceptional procedures will be used during implementation phase, consistent with Bank Guidelines as provided for under OP 8.0.
5. Procurement of Works: Procurement of works consists of contracts for: (a) regional road rehabilitation (US$24.3 million); and (b) flood protection rehabilitatiodconstruction works for the protection of shelter and agricultural land (US$14.7 million). Contracts will be tendered in accordance with the International Competitive Bidding (ICB) and the National Competitive Bidding (NCB) procedures, except for one contract (US$2.4 million) concerning the urgent repair of scattered road segments, which will be carried out under Force Account contract procedures. ICB and NCB procurement will be carried out using the Bank's Standard Bidding Documents (SBD) for smaller contracts. Contracts for works costing less than or equal to US$l.O million equivalent will be procured under NCB. The Bank's Standard Prequalification Documents are to be used when prequalification of contractors is required.
47 6. Procurement of Goods: Goods procured under this project will include: (i)Equipment and furniture in support of Local Councils and Project Management; and (ii)Vehicles in support of Project Management. The procurement of goods will be implemented using the Bank’s SBD for goods for all ICB and using bidding documents acceptable to the Bank for NCB and shopping procedures, as required. Contracts for Goods costing less than US$0.5 million equivalent will be procured under NCB.
7. The procedures to be followed for NCB under this paragraph shall be those set forth in Law No. 23 for 2007 concerning Government Tenders, Auctions and Stores, and its Regulations, with the following additional procedures:
a Recipient-owned enterprise in the Republic of Yemen shall be eligible to bid only if it can establish that it is legally and financially autonomous, operates under commercial law, and is not a dependent agency ofthe Recipient; bidding (or pre-qualification, if required) shall not be restricted to any particular class of contractors or suppliers, and non-registered contractors and suppliers shall also be eligible to participate; tenders shall be advertised for at least two (2) consecutive days in two (2) local newspapers of wide circulation; prospective bidders shall be allowed a minimum of thirty (30) days for the preparation and submission of bids, such thirty (30) days to begin with the availability of the bidding documents or the advertisement, whichever is later; until national standard bidding documents acceptable to the Association are available, bidding documents approved by the Association shall be used, and may be prepared in Arabic; registration shall not be used to assess bidders’ qualifications; qualification criteria (in case pre-qualification was not carried out) and the method of evaluating the qualification of each bidder shall be stated in the bidding documents, and before contract award the bidder having submitted the lowest evaluated responsive bid shall be subject to post- qualification; a foreign bidder shall not be required to register or to appoint an agent as a condition for submitting its bid and, if determined to be the lowest evaluated responsive bidder, shall be given reasonable opportunity to register, without let or hindrance; the registration process shall not be applicable to sub-contractors; all bids shall be submitted in sealed envelopes and may be submitted, at the bidder’s option, in person or by courier service; all bids shall be opened at the same time in a public bid opening which bidders shall be allowed to attend and which shall follow immediately after the deadline for submission of bids; evaluation of bids shall be carried out in strict adherence to the criteria declared in the bidding documents and contracts shall be awarded to the lowest evaluated responsive bidder, without resorting to the rejection of bids above or below a certain percentage of the pre-bid estimate (bid price bracketing);
48 (xi) no bidder shall be requested or permitted to modify its bid after the bid closing date shall have elapsed and bids submitted after the deadline for submission of bids shall be returned to the bidder unopened; (xii) post-bidding negotiations with the lowest or any other bidder shall not be permitted; (xiii) under exceptional circumstances, the procuring entity may, before the expiration of bid validity, request all bidders in writing to extend the validity of their bids, in which case bidders shall not be requested nor permitted to amend the price or any other condition of their bids; a bidder shall have the right to refuse to grant such an extension without forfeiting its bid security, but any bidder granting such extension shall be required to provide a corresponding extension of its bid security; (xiv) price adjustment provisions may be included in contracts for works with a duration of more than eighteen months;
(XV) rejection of all bids isjustified when there is lack of effective competition, or bids are not substantially responsive, however, lack of competition shall not be determined solely on the basis ofthe number ofbidders; and (xvi) each contract financed from the proceeds of the Grant shall provide that the contractor or supplier shall permit the Association, at its request, to inspect their accounts and records relating to the performance ofthe contract and to have such accounts and records audited by auditors appointed by the Association.
8. Selection of Consultants: Selection of consultant firms will follow Quality-Cost-Based- Selection (QCBS), Fixed Budget Selection (FBS) and Consultant Qualification Selection (CQS), and Least Cost Selection (LCS) procedures and Sole Source (SS) selection procedures. Selection of individual consultants will be in accordance with Bank guidelines for the selection of Individual Consultants (IC), including SS selection. Financing of consultancy services will include but is not limited to the following:
1. Roads rehabilitation works supervision; 2. Flood protection design; 3. Flood protection works supervision; 4. Flood protection master plan for Wadi Hadramout; 5. Storm water drainage plan for Mukalla; 6. Support in the preparation of Environmental Assessment and Environment Management Plans; 7. Procurement support; 8. Audits.
9. Short lists of consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions ofparagraph 2.7 ofthe Consultant Guidelines.
C. Assessment of the Agency’s Capacity to Implement Procurement 10. Procurement activities will be carried out by a Project Coordination Unit (PCU) based in Sana’a that is staffed with the existing, experienced Project Director and fiduciary staff of the
49 TMDFPP PMU. The PMU has a proven record in handling technical, fiduciary, and contract management responsibilities. All procurement related activities under the ongoing Additional Financing are handled efficiency. For the proposed AF project, this arrangement will be revised and further procurement support will be provided to the PCU in light ofthe short implementation timeframe and the expanded workload. A full-time procurement officer will be competitively recruited from the local market to support procurement and contract management activities. An international procurement specialist will also be recruited under a short term consultant (STC) contract to provide technical assistance in fiduciary, contract management and technical responsibilities and strengthen the procurement capacity within the PCU.
1 1. During appraisal of the proposed project, the IDA Procurement Specialist determined that the overall residual procurement risk, after implementation of the mitigation measures, is considered Moderate for the following reasons: (i)the PMU has become over the years more experienced with IDA procurement guidelines and procedures and will be further strengthened to enhance contract management; (ii)the PMU has taken into account in the design and bidding documents the lessons learned in the original TMDFPP and the ongoing AF, which consist of similar type and size of contracts; and (iii)the PMU procurement experience is satisfactory and within the overall status of country procurement practice and accompanying risks in contract management.
D. Procurement Plan 12. A Simplified Procurement Plan was prepared by the borrower, at appraisal, detailing all procurement activities and procurement methods envisaged under the proposed AF. This plan has been agreed between the Borrower and IDA in January 2009. The Procurement Plan will be updated annually or as required to reflect the actual implementation needs and submitted to IDA for review and no objection.
E. Frequency of Procurement Supervision 13. The PMU’s capacity to implement flood protection and infrastructure works has improved significantly under the original project and ongoing AF. Implementation of the capacity building component will require more attention from the IDA team. Intensive supervision of the early phase of project implementation will be carried out to ensure adequate procurement capacity and arrangements are in place. Two supervision missions per year will review project implementation activities including procurement. The procurement and technical staff based in the Bank’s Yemen country office will also be able to address any assistance needs of the PCU.
F. Thresholds for Prior Review 14. The Prior Review Thresholds are as follows:
Prior Review Thresholds: Works Above US$ 1,000,000 plus the first contract. Goods Above US$ 200,000 plus the first contract. Services Above US$ 50,000 for individual and US$lOO,OOO for firms, TORS, EOI, short-list, and all single source selection.
50 15. Post Review: All contracts that were not subject to prior review shall be subject to post review. IDA will conduct post review of one in five contracts, selected on a sample basis.
G. Use of Statement of Expenditures (SOEs) 16. Withdrawals from the credit account may be made on the basis of Statements of Expenses for the following expenditures:
1. Works contracts costing less than US$l,OOO,OOO million; 2. Contracts for goods and equipment costing less than US$200,000; 3. Contracts for consulting firms costing less than US$lOO,OOO; 4. Contracts for individual consultants costing less than US$50,000; and 5. PMU Operating expenses.
51 Simplified Procurement Plan agreed with the Borrower
1. Works contracts
works 101 WorkslNCBl July 2009 Dawan Valley 70 NCB Post WBl2009 1 WorkslNCBl July 2009 11 AI-Ein Valley 305 NCB Post WB12009 121 WorkslNCBl July 2009 Ammad & Qassam Valley 521 NCB Post WB12009 131 WorkslNCBl July 2009 Heynun Valley 45 NCB Post WB12009 141 WorkslNCBI Aug 2009 Hathyah Valley 362 NCB Post WB12009 151 WorkslNCBI Ser Valley 447 NCB Post Aug 2009 WB12009 161 WorkslNCBl Aug 2009 Bin Ali Valley 263 NCB Post WB12009 171 WorksIICBl Main Wadi (Kaoda west-Haid Qassim bridge east) 2857 ICB Prior WBl2009 Oct 2009 181 Works/NCBl Addam Valley 465 NCB Post Se 2o09 WBl2009 191 WorkslICB1 Massila (Haid bridge east-Sena west of Soum) 1321 ICB Prior WBl2009 Sep 2009 WorkslNCB1 Sep 2009 201 Thabi Valley 60 NCB Post WBl2009 2 1I Works/NCB/ Oct 2009 Dawan - Hadramout Coast Area 774 NCB Post WBl2009 221 WorkslNCBl Ghail Binyamin -Hadramout Coast Area 577 NCB Post Oct 2009 WBl2009
52 cost Procurem Estimat Bank Estimated Bid # Location/ Description ent e contract Review method OOO,US$ start date
Component-3-Capacity Building NS1 Project management office equipment (* 1St contract) Shopping 15 Prior * May2009 WB/2009 21WBl2009 NCB/ Project management vehicles NCB 6o May 2009 31 NCB/ Local government capacity building goods NCB WBi2009 6o Mar 20 10
Prior Review Thresholds: Works Above US$ 1,000,000 plus the first contract Goods Above US$200,000 plus the first contract. Services Above US$ 50,000 for individual and US$lOO,OOO for firms, TORS, EOI, short-list, and all single source selection.
53 Annex 6: Implementation and Monitoring Arrangements
1. In its letter dated January 27, 2009, the GOY has confirmed that this emergency operation will be implemented in the form of a second Additional Financing (AF), processed under OP8.0, to the Taiz Municipal Development and Flood Protection Project (TMDFPP). The GOY also requested that the TMDFPP be restructured to allow it to evolve from a single city (Taiz) focus in infrastructure building into a national flood protection and post-disaster infrastructure reconstruction program, in line with the Government’s stated policy objectives. The restructuring under this emergency operation, which will be called Flood Protection and Emergency Reconstruction AF Project, will affect implementation arrangements. As with the TMDFPP, the project will be under the supervision of the Minister of Public Works and Highways (MOPWH), and it will be implemented by the same TMDFPP Project Management Unit (PMU) that is currently implementing the first AF to the TMDFPP (whose financing agreement was signed by the GOY and IDA on February 25, 2008, and which became effective on June 18, 2008). In addition to implementing the first AF to the TMDFPP, the PMU is also currently engaged in the preparation of the proposed Integrated Urban Development Project (IUDP), including executing a Policy and Human Resources Development (PHRD) preparation grant (implementation arrangements ofthe IUDP have not yet been confirmed)’.
2. To be able to cater for such an extended mandate and responsibilities and cover more than one geographic area, the PMU will be restructured and expanded in term of staffing and oversight functions to ensure that it will be able to maintain at a satisfactory level its current tasks (TMDFPP AF implementation and IUDP preparation) and the new activities it is being entrusted with (the current operation, or second AF). These expanded mandate and responsibilities require the PMU to extend its presence beyond Taiz (where it implements the TMDFPP first AF and prepares IUDP) to also include presence in one of the disaster affected areas (Seiyun) for the second AF, in addition to presence in Sana’a (to coordinate the flood protection program activities at the national level and also prepare IUDP). Presence in these project areas will allow the PMU to coordinate closely and effectively with the local governments to rapidly attend to issues related to implementation and hence reduce the time that will be taken for decision making process during the project implementation period.
3. The existing Steering Committee overseeing the Additional Financing to the TMDFPP, headed by the Minister of Public Works and Highways and including representatives of MOPIC, MOLA, the Ministry of Water and Environment (MOWE), Taiz Governorate and the General Authority for Land, Survey and Urban Planning (GALSUP), will be expanded to reflect the stakeholders concerned with the new activities under the current project. The Steering Committee membership will include representatives from the Ministry of Agriculture and Irrigation (MOAI), Hadramout and Al-Mahara Governorate, and the director of the Reconstruction and Recovery Fund for the flood-affected areas.
’ The IUDP is under the supervision of the Ministry of Planning and International Cooperation (MOPIC) on account of a multi-city (Sana’a and Taiz) and multi-sector (urban upgrading, solid waste management, and local government capacity building) scope. It is expected to come into effect by the close of TMDFPP AF implementation activities.
54 Revised Organization of Proiect Management and Implementation:
4. Project Coordination Unit: The existing TMDFPP-PMU will be restructured to become a Project Coordination Unit (PCU) that assumes overall project management, fiduciary and Monitoring and Evaluation (M&E) functions for the overall project (TMDFPP AF and Flood Protection and Emergency Reconstruction second AF). The PCU will be headed by the current and experienced TMDFPP-PMU Director and will comprise of a core staff consisting of a procurement officer, a financial and administration officer (supported by an accountant), an M&E officer, and a bilingual executive secretary. These positions will be occupied by the same respective staff of the existing TMDFPP-PMU, except for the M&E officer which is a new position; in this respect, an individual will competitively be hired from the local market. Experienced short-term consultants in such areas as procurement and environmental safeguards will assist the PCU in project implementation, as well as other support staff (driver, janitor, and payment expeditor).
5. The PCU will report directly to the Minister of Public Works and Highways and will be overseen by the existing and expanded Steering Committee, which includes in its membership the director of the Reconstruction and Recovery Fund (RRF) for the affected areas (created by Republican Decree). The Minister of Public Works and Highways is also a member ofthe Board of Directors of the RRF, and as such will ensure via the Board of Directors full inter-ministerial/ inter-sectoral coordination and policymaking.
6. The PCU will be located in Sana’a. It will be supported by two field-based branch offices or Project Implementation Units (PIUs). In Taiz, the existing office will serve as the PIU, managed by the current Deputy PMU Director and staffed with the other staff that have not transferred to Sana’a, and will be responsible for all the activities related to the implementation of the ongoing TMDFPP-AF. The second PIU will be established in Seiyun (alternatively in Mukalla) and will be responsible for the implementation of the FPER second AF in the affected areas in Hadramout and Al-Mahara Governorates.
7. The preliminary responsibilities ofthe PCU include:
0 Overall project management and implementation supervision on behalf of MOPWH; 0 Monitoring project performance indicators; 0 Procuring and appointing consultants for specific assignments, including engineering and construction supervision, and for technical assistance studies; 0 Procuring and entering into contracts for goods and civil works; . 0 Procuring and entering into and terminating contracts with staff; 0 Preparing procurement plans, bidding documents for procurement packages and executing bidding process; 0 Preparing Terms of Reference (TOR) for technical assistance support activities; 0 Maintaining all project files (reports, drawings, correspondence, contractor invoices, etc); 0 Preparing and submitting progress reports to IDA and MOPWH , as required; 0 Carrying out the project’s financial management and disbursement aspects (review of payment invoices, approval ofpayments, management of disbursement processes, follow- up payments with the different agencies including the Ministry of Finance until they are deposited to beneficiary’s account, etc); Preparing and submitting Financial Management Reports (FMRs) and disbursement forecasts to IDA; and 0 Organizing external yearly audits of Project Accounts, including expenditures made through the Designated Accounts and Statement of Expenditures and implementation of auditor’s notes/ recommendations.
8. Project Implementation Units (PIUS): A branch office or a Project Implementation Unit (PIU) will be established in each of the two project areas to implement and supervise Project activities, liaise closely with the Local Council and coordinate with the different local agencies and stakeholders, and oversee compliance with environmental and social safeguards in the respective cities. Each PIU will be headed by a Manager at the Deputy Director level, who will be responsible for overseeing and coordinating project implementation activities in the concerned area. In Taiz, the current Deputy Director will serve as the Manager of the PIU, which will comprise of the remainder of the existing staff, including civil engineers, an environmental engineer, a social development and resettlement officer, and a local government support officer.
9. A new PIU will be established in Seiyun/Mukalla to implement and supervise the second AF project implementation activities in Hadramout and Al-Mahara governorates, coordinate with the Local Council and stakeholders, and oversee compliance with environmental and social safeguards in the targeted areas/ sites. The PIU will be headed by a manager (a engineer) and will be supported by a senior civil/roads engineer, a senior agricultural engineer (specialized in flood protection), an environmental engineer, and a number of support and professional staff (including a junior engineer, executive secretary, two drivers, and a janitor) who will all be recruited using time-based contracts. The PIU Manager will be recruited competitively from the local market following an announcement in the local newspapers. The selection process is expected to be completed by April 15,2009.
10. In particular, the responsibilities ofthe PIU include: 0 Implementing and overseeing implementation of project activities in the affected areas in Hadramout and Al-Mahara governorates; 0 Preparing monthly reports for each sub-component or activity including project title, total cost, components, name of the contractor/consultant, start and completion dates, amount spent, percentage of works/assignment completed, and percentage of time elapsed comparing to the original contract period; 0 Preparing and/or reviewing the detailed designs and technical specifications for flood protection rehabilitation and reconstruction activities, and recommending the use of labor-intensive measures to the benefit of the population of the affected areas, where feasible; 0 Ensuring compliance with the Project environmental and social safeguards in line with the procedures Environmental and Social Screening and Assessment Framework (ESSAF), including site identification and screening in coordination with Local Councils, preparation and/or review and clearance of the Environmental Assessment (EA), and implementation and/or oversight of implementation of the Environmental Management Plan (EMP); 0 Ensuring that works/contracts are implemented in accordance with the contract documents in terms of quality, cost and delivery;
56 0 Monitoring performance of the contractors and consultants against the indicators; Maintaining second copies all related project files (reports, drawings, correspondence, contractor invoices, etc); and
0 Reviewing and endorsing contractors’ and consultants’ invoices.
11. The PIU will be supported by consultants who will be appointed to assist in the supervision of investment activities over the entire duration of the project. Consulting engineering firms will be hired to assist the Seiyun PIU in the implementation supervision of the regional road rehabilitation sub-component (estimated cost US$24.3 million). For the flood protection system rehabilitation sub-component (estimated cost US$14.7 million), local consulting firms and/or individuals will be hired to support the PIU in the engineering designs of flood protection systems, preparation of the bidding documents, and supervision of the local contractors on behalf ofthe PIU to carry out the rehabilitation works.
Organization of Implementation ...... Steering Committee i
I I I I I ...... ’...... *
......
...... Projec ...... oordination Unit i
I Taiz Local Council I Mahara Local I -I
I
...... pzizq
57 Monitoring and Evaluation:
12. The PCU will submit quarterly progress reports for all project components, following the same reporting format of the TMDFPP. The progress report will include details on the key M&E indicators most of which will be monitored on an annual basis. These are included in the Annex I11 which includes baseline data and agreed targets for each of the future years.
58 Annex 7. Project Preparation and Appraisal Team Members
Bank staff and consultants who worked on the project included:
Name Title Unit Sameh Naguib Wahba Sr. Urban Development Specialist, TTL LCSUW Naji Abu-Hatim Sr. Rural Development Specialist MNSSD Ali Khamis Implementation Specialist MNSSD Madhu Raghunath Urban Specialist MNSSD Ayman El-Guindy Procurement Specialist MNAPR Moad M. Alrubaidi Financial Management Specialist MNAFM Maged Mahmoud Hamed Sr. Environmental Specialist MNSSD Ghada Youness Sr. Counsel LEGEM Laila Al-Hamad Social Development Specialist MNSSD Terje Wolden Consultant, Transport MNSSD Mario Zelaya Consultant, Environment and Infrastructure MNSSD Corazon Centeno Program Assistant MNSSD Azeb Yideru Program Assistant MNSSD Nagwan Ahmed Sharhan Program Assistant MNCYE
Advisors and Quality Assurance:
Name Title Unit
' Stephen Karam Sr. Urban Economist, Peer Reviewer FEU Francis Ghesquiere Lead Urban Specialist, Disaster Risk LCSUW Management Coordinator, Peer Reviewer Alison Cave Sr. Urban Specialist, Peer Reviewer ECSSD Anna Maria Bjerde Sector Manager MNSSD Xavier Devictor Country Program Coordinator MNCA3 Hoveida Nobakht Sr. Program Officer MNADE Hocine Chalal Regional Safeguards Advisor MNACS Kanta Kumari Rigaud Sr. Environmental Specialist MNSSD Knut Omal Sr. Social Scientist MNSSD
59 Annex 8. Environmental and Social Safeguards Framework
Introduction 1. The project will finance the rehabilitation and reconstruction of regional roads and flood protection infrastructure in selected flood damaged areas of Hadramout and Al-Mahara Governorates in Yemen. Twelve regional roads in Wadi Hadramout and some 77 different sites of flood protection works in Wadi Hadramout, Hadramout Sahel and Al-Mahara governorates have been identified for rehabilitation and reconstruction under the project.
Potential Environmental Impacts 2. Since all of the sub-projects to be financed are for replacement of existing structures located at the same place and within the same alignments and right-of-ways, the incremental adverse impact of the project is expected to be small. Many adverse impacts have already been caused by the storm and flood disaster such as substantial erosion and change in alignment of natural drainage courses including damaged infrastructure. However, these impacts will be mitigated through the rehabilitation and reconstruction of damaged infrastructure and protection of drainage courses from further erosion particularly at places where populated and important agricultural areas are at great risk of flood damage. Typical sites and project interventions are shown in the photos in Annex 1.
3. Expected environmental impacts from the project are those typically associated with road reconstruction and infrastructure rehabilitation. Among other potential impacts, these include:
Temporary site disturbance associated with demolition of damaged infrastructure; Temporary erosion and sedimentation in streams from reconstruction of road foundations and associated increases in sediment loads and turbidity during construction; In stream temporary disturbances from blasting or excavation works for removal of damaged foundation; Dust and noise from operation ofheavy equipment during construction; Handling, storage and disposal of waste materials; and Traffic congestion or temporary re-routing and interruption of traffic around the construction zones.
4. All of these impacts can be managed during construction with known mitigation measures included in the contracts and capacity building of supervising organizations. It should be noted that each construction site, whether for road reconstruction or flood protection works, will be located at existing streams and crossings and at confined sites so as to limit and avoid incremental damage. In this way the potential impacts will be very localized. None of the sub- projects, therefore, will have large scale or regional environmental impacts.
5. There are two road segments at critical stream crossings under the roads sub-component that have been washed away and which may require realignment to prevent future damage. At this stage, there is insufficient information on the nature of such potential realignment as the technical and feasibility studies for these two road segments are underway and have not yet been completed. The environmental impacts from such potential realignments, however, would be expected to be small because the rehabilitation works will be limited in scope, both from a
60 financial and technical perspective. Consequently. it was agreed that the environmental category per OP 4.01 will be “B”. In addition, the possibility of a realignment ofthese two road segments may entail land acquisition. In which case, the provisions ofthe Resettlement Policy Framework (RPF) prepared under this project will apply. A disbursement covenant has been included in the grant agreement requiring Environmental Management Plan (EMP) and a Resettlement Action Plan (RAP) to be prepared prior to implementation of the investments that will be found to require such instruments.
Approach to Environmental and Social Assessment
6. To guide the environmental assessment and mitigation process, an Environmental and Social Screening and Assessment Framework (ESSAF) has been developed for the project. Recognizing the emergency nature of the proposed emergency reconstruction operations and the related need for providing immediate assistance, while at the same time ensuring due diligence in managing potential environmental and social risks, the ESSAF is based on the following principles:
0 The proposed operations will support multiple subprojects, the detailed designs of which were not completed at appraisal. To ensure effective application of the World Bank’s safeguard policies, the ESSAF provides guidance on the approach to be taken during project implementation for the screening for selection and design of sub-projects and the planning ofmitigation measures;
0 No resettlement issues are expected in any of the proposed sub-projects under the emergency Project. If any do occur, Abbreviated Resettlement Plans (ARPs) and/or Resettlement Action Plans (RAPS), as may be applicable, will be prepared for specific sub-projects in accordance with the project’s Resettlement Policy Framework (RPF), which has been prepared by the PCU and cleared by IDA. These RAPs if needed will be prepared during implementation upon the completion ofthe detailed design studies;
0 The proposed emergency reconstruction operation will finance feasibility and detailed design studies for these subsequent investments, which will include environmental assessments and social studies as required by World Bank safeguard policies; Project design and sub-project selection will aim at maintaining regional balance and equity among the different social groups, considering variations in population density. Employment opportunities within the sub-project areas will be available on an equal basis to all, on the basis of professional competence, irrespective of gender or ethnic or religious group. The use of labor-intensive flood protection measures will be relied upon, where feasible, to enable the creation of temporary job opportunities, which will be targeted at the affected communities and households that lost their livelihoods as a result of the disaster. In all sub-projects which require consultations with local communities or beneficiaries, consultations will be conducted to elicit the views of the male and female population; and Consultation and disclosure requirements will be simplified to meet the special needs of these operations. The ESSAF and the RPF have both been disclosed in the concerned
61 sector ministry and other public places in Yemen and in the affected areas and in the World Bank InfoShop on February 5,2009.
Institutional Responsibilities 7. The agency responsible for environmental matters in Yemen is the Environmental Protection Authority (EPA). EPA has a limited capacity in following up environmental projects. However, this is a non-issue as the environmental mitigation and monitoring plans will be carried out by the PCU, which includes a full-time Environmental and Safety Officer (ESO) in the Taiz office and will recruit a new Environmental Officer for the to-be-established PIU in Seiyun. The environmental officer will implement the EMP and the environmental aspects included in the Project’s Operations Manual. The ESO was in charge of supervising similar work under the original TMDFPP and the ongoing AF. The environmental officer will continue to act in the same capacity for the proposed additional financing.
8. In addition, given the limited possibilities of triggering OP4.12 in light of the project scope, the TMDFPP PMU’s highly experienced social and resettlement officer, who will be based in Taiz, will be relied upon as may be needed to address social and resettlement issues that may arise. Should such instances arise, which will likely be of a very small scale based on a prior assessment of the sites by several experts, a draft ARP, satisfactory to IDA, will be prepared as a condition of disbursement. Monitoring day-to-day construction activities to ensure that no resettlement issues will be triggered will be the responsibility of the other PIU staff in Seiy un .
9. The project cost tables (see Annex 3) includes the budget needed to finance the recruitment of the environmental staff and to accommodate for the increased work load of the social and resettlement staff, as well as resources (US$25,000) for the PCU to recruit an environmental specialist to support as may be needed in the preparation of the ENEMP and/or close monitoring duration project implementation.
62 Annex 9. Economic and Financial Analysis
1. The preparation of the proposed emergency response project did not include carrying out a formal comprehensive economic and financial analysis. An economic analysis was carried out only for the road rehabilitation sub-component (US$24.3 million, or 59% of the total project) by calculating the economic benefits and costs with and without the project over a 10-year period. The analysis was based on the assessment of operational and time losses due to the disaster’s effect on damaged roads, which was undertaken as part of the DLNA. Using a discount rate of lo%, the result shows a Net Present Value (NPV) ofUS$2 1.57 million and an Economic Internal Rate of Return (EIRR) of 38%, well in excess of the standard 12% EIRR used as a threshold for road transport projects and in excess of the average EIRR of 20% in the Rural Access Roads in Yemen.
2. Overall, the project is expected to have significant economic benefits. In the short term, the project’s economic benefit will be to contribute to restoring access to road network connectivity in the areas affected by the damage to selected critical segments of Hadramout Governorate’s regional road network. Similarly, the flood protection works will contribute to rehabilitating and reconstructing selected priority components of the flood protection system to protect human settlements and agricultural lands. In the short term, restoring access and rehabilitating flood protection works will contribute to (i)improving emergency response effectiveness; (ii)restoring livelihoods affected by the damage and losses to the agriculture and shelter sectors, including through temporary construction work generated from the use of labor- intensive flood protection works as feasible and through the restoration of flood risk resilience capacity, thereby enabling the reconstruction of shelter and resumption of economic activities. As much as 39,396 work-months of unskilled construction work could be created from labor- intensive flood protection rehabilitation works, which will allow to provide support to 3,283 households (some 23,000 individuals) that lost their livelihoods for a one-year period, not an insignificant effect. In the longer term, the economic benefits will include preserving the road network and flood protection public infrastructure assets by enhancing their resilience to future flooding events. Overall, the population of Hadramout and Al-Mahara Governorates, estimated at 1.4 million, will benefit from the project, especially the population of Wadi Hadramout, which was the worst affected area by the disaster.
Economic analysis of the road rehabilitation sub-component
3. As a result of the disaster and the damages to the regional road network, losses are accruing mainly to road users in the form ofhigher vehicle operating costs and time losses (delay costs). Under a “without project” scenario, these losses are estimated to occur over a 10-year timeframe, whereas under a “with project” scenario, these losses are estimated to occur over a 3- year timeframe on a declining basis in line with construction progress until road services have been restored to the pre-disaster functionality level. Construction progress is assumed at 20% in year one (reflecting the start of urgent priority repairs that will start immediately under a force account procedure and at the same time the time needed to prepare design and bid documents and complete the tender process for the other packages), followed by 40% in year two, and 40% in year three.
63 4. The average annual daily traffic (AADT)2 on the key road links in the network has been estimated based on various studies in the area undertaken by international consultants (traffic surveys by Dar A1 Handasah under the Mukalla Master Plan in 2007 and Africon for the Mukalla to Seiyun highway maintenance study). GCRB and local MOPWH offices have assisted in providing traffic data on links not covered by studies. Table 1 has the average AADT for each road link and the affected road lengths where road roughness has increased as a result of the storm, as well as the summary of the time and operational losses over a two-year period. The AADT has been split into various vehicle categories (cars, utility vehicles, buses and trucks) based on experience and classified traffic counts from road feasibility studies in Yemen.
Table 1. Characteristics ofregional roads and estimated losses due to the disaster
5. Table 2 provides other basic characteristics and economic costs related to the road vehicle fleet in Yemen. These parameters were used in computing the average vehicle operating cost (VOC) for the pre-disaster situation as well as for the current conditions where long sections have high road roughness causing increased fuel consumption, wear and tear on the vehicles and slower vehicle speeds. The various detour roads and sections of roads with temporary gravel surfacing on key highways affected by the flood have been given an average road roughness as for gravel roads with poor standards. This is because of the lack of regular maintenance of gravel and earth roads. The classified traffic (see Table 3 for details) and a road roughness index3 of 3 were used for the pre-disaster situation (paved road in good condition) and an index of 12 was used for the current road condition comparable to a poor (rough) rural road. The above assumptions compares well with data used in pre-feasibility studies for rural roads in Yemen.
2 Annual Average Daily Traffic (AADT), the total volume of vehicle traffic in both directions of a highway or road for a year divided by 365 days; is a useful and simple measurement of how busy a road is. International Roughness Index (IRI), measures the “bumpiness” of a road-the total anticipated vertical movement a vehicle will experience over a given stretch of road, usually expressed in meters/kilometer; the lower the value, the smoother the ride.
64 6. Road users are currently also suffering time losses as the average travel speed across damaged roads is slow. In many places the road is following the river bed at a speed of no more than 10 km/h. An average of 20 km/h was used for the current condition on the 51.5 km of damaged sections, a travel time of about 2 hours and 34 minutes compared to 5 1.5 minutes for an average speed of 60 km per hour, a total delay of 154-51.5=1 hour 42.5 minutes per vehicle. With an average AADT of 2000 vehicles and two years (750 days) before restoration of services, road user will suffer delays of about 1,500,000* loo= 150 million minutes or 2.5 million hours per vehicle. With an average occupancy of 2 per vehicle including driver, time cost of US$0.25 per hour (Table 2), the total time delay cost will be about US$1.395 million for the entire affected road network in Hadramout and Al-Mahara. For the 12 roads slated for rehabilitation under the project, the total time losses over a 2-year period areUS$0.978 million.
7. Only those damaged sections were included where the road users are relocated to temporary roads, the shoulder or into the wadi. On many road sections damages are not affecting travel speed or incurring higher VOC, and the lengths of these road sections have not been included in the calculation ofroad user losses due to delays or increased VOC. The average daily wage for workers as presented in Table 2 has been used as basis for calculating the actual delay costs using also the actual traffic volumes on each damaged section rather than the average. The delays were computed from the road roughness levels and their effects on speed rather than the simplified assumptions above. Table 3 shows the details of the calculations for the entire road network, which were calculated using the Roads Economic Decision (RED) model4: over a 2- year period, the time costs or losses add up to US$ 1.395 million, and the total VOC costs or losses amount to US$ 19.365 million. For the 12 roads under consideration in this project, the time costs add up to US$ 1.395 million, and the total VOC costs or losses amount to US$ 19.365 million. For the 12 roads under consideration in this project, the time losses over a 2-year period add up to US$0.978 million, while the total operational or VOC losses add up to US$14.782 million.
8. The annual estimated losses in a “without project” scenario were calculated over a 10- year period. Following the first two years, an average annual increase in the AADT of 5% per year was assumed for each of the following five years (years 3-7) in line with existing trends over the past five years, followed by a decline in the annual rate of AADT increase to 3% for years 8-10. Under the “with project” scenario, the losses were expected to occur over a three year period in which construction is substantially completed (by the fourth year where construction is completed, losses would equal zero). Tables 4 and 5 present the without and with project scenarios. Using a discount rate of IO%, the result shows a Net Present Value (NPV) of US$21.57 million and an Economic Internal Rate of Return (EIRR) of 38%, well in excess ofthe standard 12% EIRR used as a threshold for road transport projects and in excess of the average EIRR of 20% in the Rural Access Roads in Yemen.
The Roads Economic Decision Model (RED), developed by the World Bank, is setup on a series of Excel workbooks and performs an economic evaluation of road investments options using the consumer surplus approach. It is customized to the characteristics of low-volume roads where: a) there is high uncertainty of the assessment of the model inputs, particularly the traffic and condition of unpaved roads; and b) the importance of vehicle speeds for model validation.
65 Table 2. Basic Characteristics and Economic Costs of Road Vehicle Fleet
Table 3. Calculations of Losses to Road Users using
66 Year Year Year Year Year Year Year Year Year Year Name of road 1 2 3 4 5 6 7 8 9 10
Total operational 7.391 7.391 7.761 8.149 8.556 8.984 9.433 9.716 10.007 10.308 and time losses PV losses (@lo%) 6.719 6.108 5.831 5.566 5.313 5.071 4.841 4.533 4.244 3.974 Total PV losses 52.199
67 Flood protection rehabilitation sub-component
9. In addition to the many benefits anticipated from the rehabilitation or construction of flood protection works, reliance will be made to the extent possible on labor-intensive measures (e.g. Gabion walls, etc) as these can create temporary unskilled employment opportunities for the affected communities and households that lost their livelihoods.
10. On the basis of the following assumptions: (a) a labor wage content of40% in such labor- intensive reconstruction work; (b) a ratio of four unskilled works to one skilled worker; and (c) relying on the same daily wage rates used in the labor intensive workfare program which is currently being implemented by the Social Fund for Development in response to the food crisis (YR4,OOO for skilled workers and YR2,OOO for unskilled workers), the estimated works of US$14.7 million could if well targeted create as much as US$3.93 million in wages to unskilled workers and US$1.940 million in wages for skilled workers. The unskilled worker wages will be enough to create 39,396 work-months on the basis of YR20,OOO (US$200) per month. This in turn will provide support to 3,283 households (or 22,981 individuals based on an average household size of seven) that lost their livelihoods for a one-year period, not an insignificant effect.
68 Annex 10. Documents in Project Files
Damage, Losses and Needs Assessment (DLNA): October 2008 Tropical Storm and Floods, Hadramout and Al-Mahara, Republic of Yemen. A Joint Assessment of the Government of Yemen, the World Bank, the United Nations International Strategy for Disaster Reduction, the International Federation for the Red Crescent and Cross, supported by the Global Facility for Disaster Risk Reduction. January 2009 (216 pages, English, with Executive Summary in 1 Arabic). Aide Memoire of the October 29-November 2, 2008, Rapid Scoping Mission of the Flood Damage Assessment in Hadramout and Al-Mahara and Scope for an Emergency Recovery Operation. Powerpoint presentation with the preliminary findings of the October 29-November 2, 2008 Rapid Scoping Mission presented on November 6, 2008, to representatives of the GOY and the donor community (English and Arabic). Powerpoint presentation with the preliminary findings of the November 22-December 3, 2008 Damage, Losses and Needs Assessment Mission, presented on December 2, 2008, to the Council of Ministers ofthe Republic of Yemen (English and Arabic). Republican Decree No. 365-2008 issued on December 30, 2008, Establishing the Reconstruction and Recovery Fund (RRF) for the Flood Affected Areas in Hadramout and Al-Mahara Governorates (Arabic, with unofficial English translation). Consultant Report on Technical Assistance to the GOY for the Hadramout and Al-Mahara Flood Reconstruction and Recovery Effort, The World Bank and GFDRR, January 2009 (Gianni Brizzi) Letters from the Deputy Prime Minister for Economic AffairdMinister of Planning and International Development to the World Bank Country Director dated October 27, 2008 (requesting World Bank support to prepare the DLNA and an emergency operation) and January 27,2009 (confirming the scope and implementationmechanisms of the emergency operation). Letter from the Minister of Public Works and Highways confirming the allocation of YR 90 million (US$450,000) in GOY local contribution to the Flood Protection and Emergency Reconstruction Project for Calendar Year 2009 and budgeting YR 400 million (US$2 million) for Calendar Year 2010. Procurement Capacity Assessment Report.
69 Annex 11: Statement of Loans and Credits
Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm Rev’d PI01453 2008 RY-INSTITUTIONAL REFORM CREDIT 0.00 50.93 0.00 0.00 0.00 26.99 -26.99 0.00 (DPL) PO89761 2008 Sec. Educ. Dev. and Girls Access Project 0.00 20.00 0.00 0.00 0.00 19.05 0.55 0.00 PO86308 2007 RY-Second Vocational Training Project 0.00 15.00 0.00 0.00 0.00 15.97 1.so 0.00 PO89259 2007 RY Rainfed Agriculture and Livestock 0.00 20.00 0.00 0.00 0.00 16.39 3.88 -0.52 PO86886 2006 RY-Fisheries Res. Mngmnt & Conservation 0.00 25.00 0.00 0.00 0.00 24.36 7.09 0.00 PO86865 2006 RY-POWER SECTOR 0.00 50.00 0.00 0.00 0.00 52.07 40.08 0.00 PO85231 2006 RY- SECOND RURAL ACCESS 0.00 40.00 0.00 0.00 0.00 20.71 2.19 0.00 PO76185 2005 RY-Basic Education Development Program 0.00 65.00 0.00 0.00 0.00 36.69 19.28 1.85 PO82976 2004 RY-THIRD PUBLIC WORKS 0.00 74.84 0.00 0.00 0.00 32.3 I -1.64 -2.94 PO82498 2004 RY-SOCIAL FUND FOR 0.00 75.00 0.00 0.00 0.00 5.75 -1 1.63 -3.86 DEVELOPMENT I11 PO74413 2004 RY-Groundwater & Soil Conserv Proj 0.00 70.00 0.00 0.00 0.00 40.22 11.41 0.00 PO57602 2003 RY URBAN WTR SUPPLY & 0.00 130.00 0.00 0.00 4.74 50.28 37.26 -7.03 SANITATION APL PO64981 2003 RY-SANA’A BASIN WATER MGMNT 0.00 24.00 0.00 0.00 0.00 12.99 9.13 0.00 PO65111 2003 RY-PORT CITIES DEVELOPMENT 0.00 23.40 0.00 0.00 0.00 7.80 4.51 4.5 1 PROGRAM PO70092 2002 RY TAIZ MUNICIPAL DEV & FLOOD 0.00 65.20 0.00 0.00 0.00 14.94 -10.81 -5.80 PROTEC PO43254 2002 RY-Health Reform Support Proj (HRSP) 0.00 27.53 0.00 0.00 0.00 3.95 -2.29 -6.24 PO05906 2001 RY-RURAL WATER SUPPLY & 0.00 40.00 0.00 0.00 0.00 15.95 -6.21 -6.21 SANITATION PO50706 2000 RY-CIVIL SERVICE MODERN 0.00 44.00 0.00 0.00 0.00 21.73 4.17 4.17 Total: 0.00 859.90 0.00 0.00 4.74 418.15 81.78 - 22.07
STATEMENT OF IFC’s Held and Disbursed Portfolio In Millions of US Dollars
Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic 1999 ACSM 6.37 0.00 0.00 0.00 6.37 0.00 0.00 0.00 2002 Ahlia Water 1.36 0.00 0.00 0.00 1.36 0.00 0.00 0.00 2006 NCC Yemen 35.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total portfolio: 42.73 0.00 0.00 0.00 7.73 0.00 0.00 0.00
Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 2006 HSA 0.00 0.00 0.00 0.00 2006 Ras lssa 0.05 0.00 0.00 0.17 Total pending commitment: 0.05 0.00 0.00 0.17
70 Annex 12: Country at a Glance
M. East POVERTY and SOCIAL &North Low- Development dlamond' Yemen Africa income 2007 Population, mid-year (millions) 22.4 313 1296 Life expectancy GNI percapita (Atlasmethod, US$) 670 2,794 578 GNi (Atlas method, US$ billions) 19.4 876 749 I Average annual growth, 2001.07 Population (Yd 3.0 18 22 GNI Gross Laborforce (%) 4.2 36 27 per primary Most recent estimate (latest year available, 2001-07) capita enrollment Poverty (%of population below nationaipovefiyline) Urban population (%of totalpopulation) 30 57 32 Life expectancyat birth (pars) 62 70 57 infant modality (per lOOOlive biiihs) 75 34 65 Child malnutrition (%of children under5) 41 29 Access to improvedwatersource Access to an improved water source (%o fpopulation) 66 69 68 Literacy (%of population age Is+) 54 73 61 Gross primary enro llment (%of school-age population) 67 '05 94 a ye men, Rep Male 00 'D6 '00 I--Low-incomegroup Female 74 03 89 I KEY ECONOMIC RATiOS and LONG-TERM TRENDS
1987 1997 2006 2007 tconomic ratios. GDP (US$ billions) .. 6.9 191 22 5 Gross capital formation1GDP .. 24.7 Trade Exports of goods and services1GDP .. 35.8 Gross domestic savingsIGDP .. 6.0 Gross national savings1GDP .. 25.0 Current account balance1GDP .. 0.3 Domestic Capital Interest payments1GDP .. 0.4 03 savings formation Total debt1GDP 55.6 292 Total debt servicelexports .. 2.6 Present value of debtlGDP 195 Present value of debtlexports Indebtedness 1987-97 1997-07 2006 2007 2007-11 (average annual gmMh) GDP 6.0 4.1 3.2 36 --Yemen, Rep GDP percapita 15 10 0.1 06 Low-income omup Exports of goods andservices 27.2 8.6
STRUCTURE of the ECONOMY
1987 1997 2o06 2007 \Growth of capital and GDP (%J (%of GDP) I Agnculture 63 20 Industry 43 2 15 M anufactunng 03 10 Services 40 5 5 0 Household final consumption expenditure 710 02 03 04 05 06 General gov't final consumption expenditure DO ': I -0CF -GDP O7 Imports of goods andservices 44 5 I
1987-97 1997-07 IGrowth exports and imports (average annual gmvdh) 2o06 2007 of (%J Agnculture 47 33 20 T Industry 64 45 10 M anufactunng 50 99 Services 54 43 0 7 Household final consumption expenditure 30 15 .IO General gov t final consumption expenditure -01 87 1-20 1 Gross capital formation 146 06 Imports of goods and services 159 30
Note 2007 data are preliminaryestirnates This table was producedfrom the Development Economics LDB database 'Thediamonds showfourkeyindicators inthecountry(inbold)comparedwithits income-groupaverage If dataaremissing thediamondmll be incomplete
71 Yemen. Reo.
PRICES and GOVERNMENT FINANCE 1987 1997 2006 2007 lnflatlon Domestic prices (%change) I Consumer pnces Implicit GDP deflator
Government finance (%of GDP,includes current grants) Current revenue 32 0 1 02 03 04 05 OB Current budget balance 48 .----GDPdeflator &CPI Overall surplusldeficit -15
TRADE I9O7 /Export and Import levels (US$ mlll.) (US$ millions) I Totaleports (fob) 2,274 CNde oil (government share) IOQ.- I C Nde oil (company s hare) 933 6 000 Manufactures 26 Totalimports (cif) 2 407 4 000 Food 992 2 000 Fuel and energy 231 Capital goods 440 0 03 04 05 07 E~ortpnoe index (2000=WO) 71 I 01 02 OB I Import price index (2000-WO) 1)7 ~8Exports aimports Terms of trade (2OOO=WO) 67
BALANCE of PAYMENTS 1987 1997 2006 2007 Current account balance to GDP (Oh) (US$ millions) Exports of goods and services 2 482 67 Imports of goods and services 3,084 Resource balance -602 Net income -501 Net current transfers 1,226 Current account balance 22
Financing items (net) -50 01 02 03 04 05 06 07 Changes in net reserves 28 Il2 I Memo: i Reserves including gold (US$ millions) 1222 Conversion rate (DEC local/US$) 1293 1971 1990
EXTERNAL DEBT and RESOURCE FLOWS lgE7lgg7 Composltlon of 2006 debt (US$ mill.) (US$ millions) Total debt outstanding and disbursed 4585 3,874 5563 IBRD 0 0 0 0 IDA 473 934 1894 2,058 Totaldebt service 268 98 226 IBRD 0 0 0 0 IDA 6 l5 45 49 Composition of net resource flows Official grants 241 03 139 Official creditors 94 87 245 Pnvate creditors 74 0 7 Foreign direct investment (net inflows) 1 -139 I121 Portfolio equity(net inflows) 0 0 0 I D 6t? World Bank program Commitments 66 I49 98 E- Bilslm-al Disbursements 41 89 Principal repayments 1 1) Net flows 39 79 129 88 Interest payments 4 7 15 15 Net transfers 35 72 115 73
Note This table was producedfrom the Development Economics LDB database 9/24/08
72 46E 48E 50E 52E 54E This map was produced by the Map Design Unit of The World Bank. REPUBLIC OF The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any YEMEN endorsement or acceptance of such boundaries. 20N SELECTED CITIES AND TOWNS 20N GOVERNORATE CAPITALS REP. OF SAUDI ARABIA NATIONAL CAPITAL YEMEN RIVERS MAIN ROADS GOVERNORATE BOUNDARIES INTERNATIONAL BOUNDARIES OMAN 18N 42ETo Abha 44E
SanawSanaw To Thamarit AL-A L - HADRAMOUTH A D R A M O U T HabarutHabarut ThamudThamud MAHRAHMMAHRATA H R A H M SAADAHS A A D A H a h r To Mirbat SaadahSaadah n a t hu M k t a n s i M . ad AL-JOWFA L - J O W F W ZamakhZamakh Damqawt - adi Al Jiz Maydi HuthH¸uth W AlAl HazmHazm ert eesers Wa Mar’aytMar’ayt Al Ghaydah W D di 16N HAJJAHHAJJAH AMRANAMRAN ad n D Ha 16N i Ja y dr wf ta AlAl GhurafGhuraf am 'a o Nishtun Al Luhayyah HajjahHajjah ab'ataab ut S AmranAmran as HawraHawra latlat MARIBM A R I B am Salif AlAl MahwitMahwit R ShabwahShabwah MaribMarib Qishn AL- SANAASANAA tt ao uw MAHWIT SANA'ASANA'A SHABWAS H A B WA m Sayhut Red Sea a Al Hodeidah NuqubNuqub r Dhamar HaribHarib d DHAMARDHAMAR a Shihr HODEIDAHDAHDAH (3199(3199 mm)) NisabNisab AtaqAtaq H RAIMHRAIMH DhamarDhamar RidaRida Al Mukalla
W bid adi Za AL-BEIDAA L - B E I D A 14N IBBI B B AL-AL- AlAl BeidaBeida AlAl HuwaymiHuwaymi 14N IbbIbb DHALE'EDHALE'E Bir Ali (3227(3227 mm)) AlAl Dhale'eDhale'e W TaizTaiz a ABYANA B YA N d i B a
n Ahwar Mocha a TAIZTA I Z Shaqra AtAt TurbahTurbah ERITREA LahejLahej Zinjibar Gulf of Aden At LAHEJL A H E J Turbah Aden Qalansiyah Qadub ADEN Socotra
'Abd al Kuri Samha
OCTOBER 2005 Darsa 0 50 100 150 Kilometers IBRD 33513 12N DJIBOUTI The Brothers 12N
0 50 100 Miles 42E 44E 46E 48E 50E 52E 54E