Document of The World Bank Public Disclosure Authorized
Report No: 23040-LE Public Disclosure Authorized
PROJECT APPRAISAL DOCUMENT
ONA
PROPOSED LOAN
IN THE AMOUNT OF US$43.53 MILLION
TO THE
LEBANESE REPUBLIC
Public Disclosure Authorized FOR A
BA'ALBECK WATER AND WASTEWATER PROJECT
May 6, 2002
Finance, Private Sector and Infrastructure Group Middle East and North Africa Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective ) Currency Unit = Lebanese Pound or Lyre Libanaise (LL) LL 1.00 = US$0.000664 US$1 = LL 1,500 FISCAL YEAR January I -- December 31
ABREVIATIONS AND ACRONYMS
BHWIA = Ba'albeck Hermel Water and MOEW = Ministry of Energy and Water Irrigation Authority BNC = Baa'lbeck/Nabi-Chit area MOF = Ministry of Finance BRWIA = Beka'a Regional Water and NCB = National Competitive Bidding Irrigation Authority BWWP = Ba'albeck Water and Wastewater NGO = Non-Governmental Project Organization CAS = Country Assistance Strategy NPV = Net Present Value CDR = Council for Development and O&M = Operation and Maintenance Reconstruction CPPR = Country Portfolio Performance PAD = Project Appraisal Document Review CWA = Chamsine Water Authority PFS = Project Financial Statements EA = Environmental Assessment PMR = Project Management Report EMP = Environmental Management Plan RFP = Request for Proposal ERR = Economic Rate of Retum SA = Special Account ERRP = Emergency Rehabilitation and SC = Service Contract(s) Reconstruction Project FM = Financial Management SOE = Statement of Expenditures FMR = Financial Monitoring Reports SRMC = Short-run Marginal Cost GOL = Govemment of Lebanon TA = Technical Assistance IBRD = Intemational Bank for TOR = Terms of Reference Reconstruction and Development ICB = Intemational Competitive Bidding TSU = Technical Support Unit ISA = Intemational Standards on Auditing UFW = Un-accounted for Water LACI = Loan Administration Change VAT = Value Added Tax Initiative LAP = Land Acquisition Plan WA = Water Authorities LRMC = Long-run Marginal Cost WHO = World Health Organization MC = Management Contract / Management ZWA = Zahle Water Authority Contractor
Vice President: Jean-Louis Sarbib Country Director: Joseph Saba Sector Director: Emmanuel Forestier Sector Manager Fran,oise Clottes Task Team Leader: Mohanmmed Benouahi LEBANESE REPUBLIC BA'ALBECK WATER AND WASTEWATER PROJECT
CONTENTS
A. Project Development Objective Page 1. Project development objective ...... 2 2. Key performance indicators ...... 2
B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project ...... 2 2. Main sector issues and Government strategy ...... 3 3. Sector issues to be addressed by the project and strategic choices ...... 3
C. Project Description Summary 1. Project components ...... 4 2. Key policy and institutional reforms supported by the project 4 3. Benefits and target population ...... 4 4. Institutional and implementation arrangements ...... 5
D. Project Rationale 1. Project alternatives considered and reasons for rejection ...... 9 2. Major related projects financed by the Bank and other development agencies ...... 10 3. Lessons learned and reflected in the project design ...... 11 4. Indications of borrower commitment and ownership ...... 11 5. Value added of Bank support in this project ...... 11
E. Summary Project Analysis 1. Economic ...... 12 2. Financial ...... 12 3. Technical ...... 19 4. Institutional ...... 19 5. Environmental ...... 20 6. Social ...... 24 7. Safeguard Policies ...... 26
F. Sustainability and Risks 1. Sustainability ...... 29 2. Critical risks ...... 29 3. Possible controversial aspects ...... 30
G. Main Condition 1. Condition of Disbursement ...... 30 2. Condition of Effectiveness ...... 30
H. Readiness for Implementation ...... 30
I. Compliance with Bank Policies ...... 30 Annexes
Annex 1: Project Design Summary ...... 31 Annex 2: Detailed Project Description ...... 33 Annex 3: Estimated Project Costs ...... 38 Annex 4: Cost Benefit Analysis Summary ...... 41 Annex 5: Financial Summary ...... 57 Annex (5a): Tariff Policy and Structure .71 Annex 6: Procurement and Disbursement Arrangements .76 Annex 6(a): Financial Management .98 Annex 7: Project Processing Schedule .1...... 1 Annex 8: Documents in the Project File ...... 112 Annex 9: Statement of Loans and Credits ...... 113 Annex 10: Country at a Glance ...... 114 Annex 11: Guidelines for the Preparation of Tender Documentation for a Service Contract(s) ...... 116 Annex 12: Institutional and Implementation Arrangement (Organigram) ...... 119 Annex 13: Technical Support Unit ...... 120 Annex 14: Key Performance Indicators ...... 121 Annex 15: Training to the Water Authorities - Ba'albeck, Zahle, and Chamsine ...... 122 Annex 16: Environmental Assessment ...... 124
MAP(S) Map of Lebanon (IBRD No. 24699) Map of Caza Ba'albeck Map of Ba'albeck and Nabi Chit Area LEBANESE REPUBLIC LB-BA'ALBECK WATER AND WASTEWATER PROJECT
Project Appraisal Document Middle East and North Africa Region Finance, Private Sector and Infrastructure Group
Date: May 6, 2002 Team Leader: Mohammed Benouahi Country Director: Joseph Saba Sector Director: Emmanuel Forestier Project ID: P074042 Sector(s): WY - Other Water Supply & Sanitation Lending Instrument: Specific Investment Loan (SIL) Theme(s): Water Poverty Targeted Intervention: Y
Project Financing Data [XI Loan [ I Credit Il Grant I I Guarantee I I Other:
For Loans/Credits/Others: Amount (US$m): US$43.53 million
Proposed Terms (IBRD): Fixed-Spread Loan (FSL) Grace Period (years): 7 Years to Maturity: 13 Commitment fee: 0.85% and 0.75% Front-end fee on Bank loan: 1% -MqPb(Ua MU'(U BORROWER 2.77 3.3333 IB3RD 20.52 22.58 43.1 Total: 23.29 25.91 49.2 Borrower: LEBANESE REPUBLIC Responsible agency: CDR/BHWIA Contact Person: Mr. Jamal A.R. Itani Tel: 961-1-981431 Fax: 961-1-981252 Email: [email protected]
Estimated disbursements ( Bank FY/US$m):
Annual 12.98 20.93 3.63 3.43 2.56 Cumulative 12.98 33.91 37.54 40.97 43.53 Project implementation period: Five (5) years Expected effectiveness date: January 1, 2003 Expected closing date: December 31, 2007
OCSPAD FP- R. MI 2D A. Project Development Objective 1. Project development objective: (see Annex 1) The major development objectives of the proposed Ba'albeck Water and Wastewater Project-BWWP (the project) include: (a) developing and strengthening the capacity of the Ba'albeck Hermel Water and Irrigation Authority (BHWIA) and the Zahle and Chamsine Water Authorities (ZWA and CWA); (b) improving the access of the customers of the BHWIA to satisfactory water supply and wastewater services; (c) involving the private sector in the operation and maintenance (O&M) of the water and wastewater facilities; and (d) rationalizing the use of water through the introduction of water meters. 2. Key performance indicators: (see Annex 1 and 14) These include: (a) Population coverage and access to water supply (96%) and wastewater services (67%) by end of project implementation. (b) Number of water supply (24,000 subscriptions) and wastewater connections (12,000 subscriptions) to be installed by end of project implementation. (c) Reduction in Un-accounted For Water (UFW) from currently estimated 50% to 30% by end of project implementation.
B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (See Annex 1) Document number: R97-256 Date of latest CAS discussion: 12/04/97 The earlier CAS emphasizes the following strategic Government objectives: (i) the rehabilitation and expansion of the country's infrastructure and institutional development; (ii) achieving environmentally sustainable development; and (iii) upgrading the human resource base and addressing poverty. The proposed project supports the Government's strategic objectives of sustainable development in the water supply and wastewater sector through improving access and coverage and introducing the private sector for operation and maintenance. Public investments in infrastructure, enviromnent and human resources and concurrent strengthening of public institutions would enable private sector participation in various functions.
2 2. Main sector issues and Government strategy:
The main sector issues are: (a)- Technical: Despite the availability of water resources in Lebanon, the water supply and wastewater sector is unable to provide satisfactory services to the majority of the population. Almost half of all water produced is unaccounted for because of losses and billing deficiencies, while leaking or overflowing wastewater collection systems cause severe sanitary conditions and contaminate surface and groundwater resources. The service deficiencies are caused both from neglect of infrastructure operation and maintenance, and from more fundamental structural problems in the sector.
(b)- Financial: Weak financial resources exist because of inadequate cost recovery and because of unclear and non-transparent regulatory arrangements for setting tariffs. Significant investments in the sector have taken place in recent years but without concurrent improvements in operation and maintenance capacity, or introduction of adequate tariff structure and levels. (c)- Institutional: The weak institutional capacity of the water utilities adversely affects operational efficiency and prevents joint planning, prioritization of investments and private sector participation in the sector. However, a number of key sector reforms have been already put in place by the Govenmment. A new water sector law (Water Law 221 and its amendments) was promulgated by Parliament in May 2000. It limits the role of the Ministry of Energy and Water (MOEW) to policy, bulk water supply (both for potable and irrigation use), strategic planning and regulatory functions, while it consolidates the number of water servicing authorities from the current twenty one (21) to four (4) in order to improve efficiency. An amendment to the water sector law stipulating the reallocation of the wastewater sector responsibilities to the MOEW and the water servicing authorities has been ratified by Parliament in December 2001. Also, a Board of Directors was appointed in December 2001 for the newly created Beka'a Regional Water and Irrigation Authority (BRWIA). However, the new sector law does not cater for the need for the newly created regional water authorities to serve as fully autonomous.
Major reforms are still required in order to render the sector more efficient and self-sustaining. The sector reforms mentioned above are not stated as the main objective for this project, but they are actively pursued in parallel. 3. Sector issues to be addressed by the project and strategic choices:
The project, in addressing the sector issues, will focus on:
(a) Strengthening the capacity of the BHWIA, ZWA and CWA, as well as the newly created BRWIA.
(b) Improving the access of the BHWIA customers to satisfactory water supply and wastewater services through house connections and extension of network.
(c) Improving efficiency by involving the private sector in O&M, and delivery of water and wastewater services in BHWIA service area through a Service Contract(s) (SC).
3 C. Project Description Summary
1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The project would consist of the following five (5) components:
Indicative Bank- % of Component Sector Costs % of financing Bank- (US$M) Total (US$M) financing 1. Institutional Development Institutional 4.55 9 4.25 10 2. Improving and Increasing Service Physical 14.91 30 12.67 29 Coverage for Water Supply 3. Improving and Increasing Service Physical 18.65 38 15.63 36 Coverage for Wastewater Collection 4. Service Contract(s) Operational 7.44 15 7.07 16 5. Consulting Services Institutional 3.66 7 3.48 8 Total Project Costs 49.20 100 43.10 100 Interest during Construction - Front-End Fee - 0.43 Total Financing Required 49.20 43.53
2. Key policy and institutional reforms supported by the project:
The project, in addressing the sector issues, will focus on:
(a) The full utilization of investments already made by increasing water supply, distribution and wastewater collection coverage, and by providing service connections in the Ba'albeck and Nabi Chit area. (b) Achieving the highest practical efficiency in O&M and in the delivery of water supply and wastewater collection services (water quality and quantity, UFW, etc.).
(c) Introduction of customer water metering and subscriber payment for water and wastewater service connections inside property line.
3. Benefits and target population:
The expected project benefits include: (a) Improved quality of water supply and wastewater services in Ba'albeck and Nabi Chit, particularly in areas inhabited by lower income groups, from private sector participation in the delivery of water and wastewater services. (b) The continuous and safe use of present ground water sources for water supply. (c) Ensuring optimum utilization of investments already made.
(d) Ensuring water conservation through the introduction of customer water metering and of appropriate tariffs.
4 Although the project does not, specifically, target any population group, it does however address the priority needs of a region in Lebanon with the lowest income levels in the country. Similarly, by improving the quality and quantity of water supply and wastewater services, lower income groups stand to benefit as a result of lower expenditure on the purchase of water and health services (see Annexes 4 and 5).
4. Institutional and implementation arrangements (See Annex 12)
Institutional Arrangements. As mentioned earlier, and based on the Water Law 221 and its amendments, the existing twenty one (21) water authorities in Lebanon will be consolidated into four (4) regional authorities with one of these covering the Beka'a region. The water authorities to be consolidated in that area include Ba'albeck-Hermel, Zahle, and Chamsine. An amendment to the Water Law on the integration of wastewater into the regional water authorities has been ratified by Parliament and will enable the transfer of the responsibility for wastewater collection and disposal from the municipalities to the MOEW.
A Board of Directors for the BRWIA has been appointed and will establish, in due course, a secretariat to be responsible mainly for investment planning, the execution of new works, and monitoring the performance of the private sector for O&M. The MOEW will continue to oversee the sector but will require further strengthening so as to assist the regional authorities in their establishment, to monitor their performance and to act as a regulator awaiting further developments.
Implementation Framework
A detailed institutional review of the BHWIA, ZWA and CWA is presented in the Project File and the relevant institutional responsibilities under the BWWP are detailed as follows:
(a) Ministry of Ener2Y and Water:
The MOEW will be overseeing the BHWIA activities and will follow up on the sector reforms. It will also approve proposals made by the BHWIA regarding the tariffs.
(b) The Council for Development and Reconstruction:
CDR, being the project's funding and implementing agency for the Emergency Rehabilitation and Reconstruction Project (ERRP), will remain responsible for the operation and maintenance of the built facilities until these are gradually handed-over to the BHWIA. CDR will also secure funding during the transition phase (prior to loan effectiveness) particularly for financing the first phase of house connections, studies and for technical assistance (TA) to the BHWIA, ZWA, CWA and the MOEW.
(c) The BHWIA. ZWA. CWA. CDR and the MOEW
The BHWIA, ZWA, CWA, CDR and the MOEW will all benefit from TA to be financed under the project in areas such as: (i) financial, administrative and technical management; (ii) improved technical capabilities for the supervision of preventive maintenance and reactive repair procedures; (iii) efficient operations of the assets; and (iv) establishing efficient billing and revenue collection systems. All the above assistance will aim at streamlining the operations of the newly created BRWIA that will benefit also from TA to prepare for the Management Contract (MC).
5 (d) The World Bank: The World Bank will assist in the preparation of the Request for Proposal (RFP) for consulting services for the preparation of tender documents related to both SCs (refer to Annex 11) to be implemented under the BWWP and the MC that would be implemented under a separate project.
Financial Management (FM). CDR, throughout the project, will be responsible for project implementation, and for managing the project funds and all related financial transactions. An assessment was performed based on the new Financial Monitoring Reports (FMR) Guidelines to CDR's financial management system, including the accounting system, accounting policies and procedures, budgeting system, reporting, staffing, intemal controls policies and procedures, internal auditing and external auditing arrangements. This assessment showed that the system in place at CDR is based on principles and procedures defined by the legal framework and operational decrees applicable to CDR. The control environment at CDR was found to be adequate. However, the financial system lacks the support of a budgeting module and requires enhancement to become capable of generating timely project reports. CDR, being aware of the system's shortcomings, has worked on upgrading it by unifying the different database platforns, to make communication between its systems and the generation of management reporting easier. At present, CDR is revising the project targets and adjusting the plans for the completion of the tasks in order to bring the upgraded system into operation by end of calendar year 2002. Meanwhile, following the Bank's recommnendations during the 2001 Country Portfolio Performance Review (CPPR), CDR is implementing interim accounting arrangements to enable its accounting department to generate periodical reports for projects financed by the Bank and other international donors. For this purpose, CDR has engaged a full time financial officer to work within CDR's Finance Department. These interim arrangements will follow CDR's control policies and procedures but will be based on a parallel accounting system which will image CDR's ledger for internationally financed projects, using a different chart of accounts and an accounting software that is capable of generating timely and reliable project reports. These reports are to include cash flow statements, project expenditure statements comparing actual figures to the project's budget, and a progress report linking key performance indicators to project expenditures. In order to institute this parallel system, CDR's management will introduce a new activity, being monthly reconciliation of the data of the two accounting systems. In addition, CDR's Finance Department will prepare an annex to the manual of procedures detailing the tasks and procedures of this interim system. Based on the activities performed, this interim system is expected to be operational by April 2002, thus CDR will be able to generate, quarterly the required reports. CDR will submit to the Bank, quarterly and within 45 days from the end of the quarter, FMRs, the proposed form and content of which was agreed upon during negotiations, copy attached to Annex 6(a).
During negotiations, the Borrower confirmed his option to replenish the Special Account (SA) using traditional methods of disbursements by means of Statements of Expenditures (SOEs), using the SA for those expenditures below the threshold, and by direct payments accompanied by supporting documentation for the balance. The project's financial statements, including SOEs and the SA will be audited annually by an external independent auditor, acceptable to the Bank, in accordance with internationally accepted auditing standards. CDR will subrnit the audit report to the Bank no later than six months following the closing of the fiscal year subject to the audit. The audit's Terms of Reference (TOR) will be prepared and submitted for the Bank's no-objection, no later than nine months prior to the end of each fiscal year. Audit costs will not be financed by the Bank Loan.
To ensure that funds are readily available for project implementation, a SA in US dollars will be opened at the Central Bank and will be operated by CDR. CDR will use the SA to honor payments under the project to contractors, suppliers, and consultants.
6 Although the BHWIA will not be directly involved in the project implementation, nor in the financial management of the project, it is envisaged that its managerial capacity will be strengthened in all aspects including FM. Resources will be made available from the project, so that the BHWIA will acquire and install a parallel accounting system to manage more efficiently its financial resources and day-to-day operations. This system should take into consideration the future responsibilities regarding sanitation, thus the authority should be able to segregate costs along water, sanitation, irrigation and other activities. Implementation Schedule. This is proposed to cover a period of 5 years, or from 2003-2007, and to take into account specific considerations/assumptions as summarized below:
(a) The strengthening of the BHWIA, ZWA, CWA, CDR and the MOEW through the provision of TA in areas such as finance, administration and technical management.
(b) The Service Contract(s), for an initial period of two years renewable for additional two and a half years. The SC will be entered with CDR and the BHWIA will be part of the signatories of the SC.
(c) The construction of additional water distribution mains in the Ba'albeck and Nabi Chit areas with the provision of service connections is proposed to start with a first component to be contracted by end of August 2002, and could be eligible for retroactive financing. This will be followed by subsequent packages to be executed sequentially for completion during 2003 and 2004.
(d) The contract on wastewater collection system for Ba'albeck and surrounding villages could start by January 2003 for completion during 2004, to enable early connections to be made and utilization of available wastewater treatment capacity.
This would conclude that investments in civil works under the project would mainly be all completed by 2005, or during the first three years of project implementation, in order to optimize utilization of works previously constructed. Procurement. All procurement will be carried out by CDR Consultants will be recruited to assist CDR in the preparation of major bidding documents. The following procurement arrangements are envisaged for each component of the project:
(i) Institutional Development. This component includes the provision of services of individual consultants that will support Ba'albeck and Herrnel, Chamsine and Zahle Water Authorities (WA) and CDR There will be eleven professionals and two project assistants to be recruited for the life of the project. The TORs for the first three consultants have been prepared and an advertisement was placed in local newspapers in September 2001. Selection of these three consultants is in process and award of contracts is expected by end of May 2002. The loan will also allocate an amount of US$540,000 under this component for the provision of software packages, information technology equipment, office equipment, office furniture and vehicles that are necessary for the work of these individual consultants. One of the tasks of these consultants is to draft the TORs for specialized training packages for staff of the three water authorities in the Beka'a area. This training will be funded from the loan at an estimated budget of US$510,000
(ii) Improving and Increasing Service Coverage for Water Supply. Under this component, two main contracts will be awarded using National Competitive Bidding (NCB) and International Competitive Bidding (ICB) procedures. The first is the construction of distribution lines, house connections for Phase-I area (US$2,992,000), and the second is the construction of distribution lines and house connections for Phase U1-area (US$11,916,000). The bidding documents for these packages are under preparation by a consulting firm recruited under the ERRP loan. The bidding documents for the first package are already prepared. This package will be launched in May. 2002 under an NCB procedure and expected award of contract is in August 2002. The second
7 package will be launched in September 2002 under an ICB procedure with expected award of contract in January 2003.
(iii) Improving and Increasing Service Coverage for Wastewater Colection. The bidding documents for the construction of the wastewater network has been prepared by a consultant and are expected to be ready for launching by September 2002. This is the main package under this component estimated at US$16,176,000 and will be procured under ICB procedures. Contract award is expected in January 2003. This component has other packages that are related to the existing wastewater treatment plant. These works will be mainly executed from 2003-2005. The estimated amount for these packages is US$2,210,000 and will be procured using NCB procedures. One of these packages is the extension of the effluent discharge pipe estimated at US$350,000. CDR has decided to go with direct award of this package to the contractor who has constructed the treatment plant, as there is an urgent need to proceed with this work and there will be no advantages in conducting a bidding process.
Prior to launching the bidding documents under ICB procedure, a pre-qualification will be conducted by CDR to determine the qualified contractors that will be invited to participate in these two procurement processes. (iv) Service Contract(s): Pre-qualification will be carried out for the SC assignments to determine qualified firms. The preparation of the pre-qualification and bidding documents will be done by a consulting firm that will be recruited by CDR The procurement process for the selection of the SC for the water supply and sewerage network will be launched in June 2002, with an estimated award of contract by January 2003. The duration of this SC will be initially for two years subject to a renewal of another two and half years. The value of this contract is estimated at US$5,766,000. The procurement process for the Service Contract for the wastewater treatment plant will be launched in January 2003 with expected award of contract by January 2004 (after the expiration of the O&M arrangement under the ERRP). The period for the SC will be two years from the date of contract effectiveness, subject to an extension of an additional one and a half years. The expected value of this contract is US$1,672,000.
(v) Consulting Services. This component includes the following: * Supervision assignments for works: these services are estimated at US$1,362,000 for three contracts that will be awarded under components (ii) and (iii) above. Launching of each RFP will be synchronized with the related works. * Supervision of the SCs: the services of a consulting firm will be required for supervising the SCs. The selection process of this firm will be synchronized with the progress in the selection process of the SC firms. The TOR/RFP for this assignment is expected to be ready by June 2002. The estimated contract value is US$185,000. * Studies in the wastewater sector: this will focus on updating a master plan for the wastewater management in the project area at a total budget of US$510,000. * Environmental Management Plan (EMP): this entails the provision of technical assistance to implement the EMP prepared for the project. The budget for this activity is US$369,000. * Other consultancy services: CDR will require the services of several consultants to assist in the preparation of TORs or bidding documents, including the preparation of pre- qualification and bidding documents for a Management Contract for a new project. The total allocation for this component is US$1,311,000.
8 The amount of retroactive financing eligible under the loan is US$4,353,000. The contracts that are eligible for retroactive financing will be: (i) construction of distribution lines and house connections for Phase-I area; (ii) construction of distribution lines and house connections for Phase-fl area; (iii) construction of the wastewater network; (iv) the services of three consulting firms to conduct supervision for the above three contracts; (v) the works for the extension of the effluent discharge at the wastewater treatment plant; (vi) the preparation of the bidding documents for the Service Contract(s); and (vii) the first three consultants that will be recruited under the Institutional Development component; and (viii) O0the CDR coordinator for the project. The cost estimates are based on most recent actual prices. Estimates include physical contingencies of 10% for goods and works that have final designs and 15% for others. Price contingencies have used official forecasts during the life of the project for both national and international inflation.
Project Supervision. The project is technically sound. The requirements on Bank supervision will initially be significant, but would be less demanding during the latter years of project execution. The bulk of the works would be carried out by the Bank's resident mission with specific inputs to be provided by headquarters, particularly regarding capacity building and institutional development. Total inputs would be estimated at 95 staff-weeks with about 25 staff-weeks annually during the first two years and 15 staff- weeks annually during the succeeding three years.
Monitoring and Evaluation Arrangements. Performance indicators will be established for the Service Contract(s) and these will form part of the contractual agreements with the SC. Key performance indicators will be established for project implementation (see Annex 14), including additional population coverage and extension of water supply and wastewater services. The monitoring will also cover specific environmental requirements regarding compliance with standards set on wastewater effluents and their use for agricultural purposes. D. Project Rationale
1. Project alternatives considered and reasons for rejection:
The project is a logical continuation of the ERRP and of the sector reformns that were initiated about seven years ago. The ERRP has been extended in scope and time and its final closing date was March 1, 2002. Any remaining works beyond this date had to be covered by a subsequent lending operation.
The distribution networks in the Ba'albeck and Nabi Chit area were included in the original design service connections to individual property lines, but these were later excluded because of financial constraints. For the same reason, the extension of the distribution networks was curtailed. Any later additions to the contract were not feasible, since a re-allocation of funds under the ERRP loan of required magnitude was not possible. Since local funds are not available for the financing of an extension of the distribution networks and for the provision of service connections, these works constituted a major justification for initiating this project. Because of severe sanitary conditions in the city of Ba'albeck with untreated wastewater being discharged indiscriminately in surface water canals and being used by the farmers for irrigation, it was concluded under the ERRP to urgently extend wastewater treatment facilities. This also took into account the status of Ba'albeck in view of its highly acclaimed cultural heritage sites. The treatment works, including secondary treatment with chlorination to enable the safe use of treated effluents for agricultural purposes, were commnissioned in early 2002. The treatment works have been constructed and designed for extension in phases with the capacity to cover all the population of Ba'albeck and five surrounding villages. Existing extension of the wastewater collection system, including 23 km of pipes laid under the Ba'albeck and Nabi Chit contract, covers only a small portion of the present population implying initial under-utilization of the treatment capacity unless further extensions are to be made. It was thus concluded to further extend the collection system for a large coverage, which would be more economical
9 than to extend in phases with the need for concurrent provision of on-site facilities. Furthermore, in view of the severe water scarcity and the high demand for irrigation water in the project area, there is a great possibility that wastewater effluent be re-used for irrigation purposes.
The proposed Service Contract(s) for the operation and maintenance of the water supply, sewerage and wastewater treatment plant are necessitated by the lack of capacity of the BHWIA to take over these works. That capacity was not developed, since undue delays occurred in proposed institutional restructuring. A full range of options for Private Sector Participation were considered, including outright sale, concession, lease or affermage, management contract, service contract and technical assistance. The proposed solution of Service Contract(s) for operations and maintenance allows a level of private sector participation that is consistent with the constraints imnposed by the current environment, namely: (i) lack of clarity of sector organization; (ii) Government control over tariffs; (iii) Government ownership of the infrastructure; and (iv) weak institutional capacity within the sector to operate and maintain service delivery.
The primary advantages of the above is that it is a relatively short-term solution (4-5 years) that allows the BHWIA to attract either a management contractor, a concessionaire or lessee on more advantageous termns, during or at the end of the SCs.
2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned).
Latest Supervision Sector Issue Project (PSR) Ratings (Bank-flnanced projects only) Implementation Development Bank-financed Progress (IP) Objective (DO) Deficiency in basic infrastructure damaged Emergency Reconstruction and Rehabilitation S S or neglected during the civil war. Project (Loan 3562-LE, ongoing) Other development agencies Water Supply * Japan Rehabilitation/extension of Water Supply in Greater Beirut * Japan Kesrouan coastal area water supply * Italy Rehabilitation/extension of water systems in Greater Beirut * Saudi Fund for Development Rehabilitation/extension of water systems in other areas * France Management of Tripoli water supplies
facilities ______Wastewater * France Protection of water resources, South Lebanon * France Protection of coastal area - areas to be defined * Japan Construction of teatment plant and collector * France Construction of treatment plant and collector * France Batroun treatment plant construction and operations * France lbeil treatment plant construction and 3 years operafions * Italy Treatment plants & networks in 10 regions * IDB Protection of water resources in the Beka'a * EIB Treatment plant and networks in Tripoli IP/Do Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)
10 3. Lessons learned and reflected in the project design:
The ERRP concentrated on rehabilitation and reconstruction of works, which were executed as emergency measures. This should now be followed by the execution of works to take place concurrently with institutional restructuring and capacity building. Lessons learned under the ERRP, that have been taken into account in the design of this project, could be summarized as follows:
(a) Unless institutional restructuring and capacity building urgently takes place, there is a severe risk that assets already rehabilitated or created will deteriorate and adversely affect level and standard of services. Also, because of inadequate tariff levels, financial viability has not been achieved, and thus sufficient funds have not been made available to ensure satisfactory operation and maintenance. (b) Project preparation during the emergency stage followed a "fast track" approach which, in many cases, adversely affected the design and necessitated subsequent revisions to be made. This often lengthened the construction period and eliminated any possible time savings achieved during the planning and design phase. (c) In case of funding constraints, any reduction in scope of works should be made without jeopardizing the possibility of full utilization of facilities to be commissioned to avoid the need for complementary investments. (d) As the qualifications and experience of current staff are inadequate for present needs, focused training and/or TA will be provided under this project, in addition to the involvement of the private sector. (e) Land expropriation has taken much longer than anticipated, and there is a need for better forward planning and for ensuring the availability of land, being critical for works execution, already at contract award. 4. Indications of borrower commitment and ownership:
Borrower commitment and ownership is reflected through: (i) its request to the Bank for continued support to the sector; (ii) the urgency expressed for complementary funding to secure full utilization of investments already made; (iii) the ratification by Parliament of the Water Law 221 on sector reforms with an amendment for integration of water supply and wastewater collection and disposal under one institutional structure; (iv) willingness to fund urgent operation prior to the proposed project implementation; (v) the introduction with the support of the "French Agency for Development" of a Management Contract for the water sector in Tripoli; (vi) nomination of the Board of Directors of the BRWIA; and (vii) the request for additional Bank involvement in the water and wastewater sector both in the whole Beka'a (preparation of an MC) and in South-Lebanon.
5. Value added of Bank support in this project: (a) The country and, in particular, sector experience gained by the Bank during its long-term involvement under the ERRP.
(b) The assistance provided by the Bank to the Government in its preparation of a sector strategy paper as a base document for sector reforms and its following-up by the drafting of a Water Law. In this context, the Bank is TA to the MOEW on institutional aspects.
(c) The Bank's experience from other countries, particularly in the region, on areas related to institutional development and the preparation and implementation of service and management contracts. (d) Providing long-term financing and the potential for resource mobilization from other donors.
(e) Bank review and analysis of the country's tariff system and proposal of a new tariff scheme for the Government's consideration.
E. Summary Project Analysis
1. Economic (see Annex 4):
* Cost benefit NPV=US$ million; ERR= % O Cost effectiveness O Other (specify) The economic rate of return of the water supply component is estimated to be about 8-10%. This estimate is based on projections of costs and benefits over the lifetime of the project. Both current and future subscribers will benefit because they will use larger volumes of water with better quality and pay lower prices than in the current situation without the project. This rate is somewhat low because of the long delay in establishing service connections after the wells, reservoirs and main distribution pipes were completed. It is however important to emphasize that this rate applies to the whole water project, which includes both the investments envisaged in this project and those already undertaken in the prior project under completion. If the latter investments are considered as sunk costs, as they should be, the rate of return rises to almost 70%, which provides ample justification for the water component of the project.
Economic benefits of the sanitation component have not been fully assessed, mainly due to difficulties to quantify the health and environmental benefits. They have beer, approached indirectly through a demand analysis of the expected increase in households' welfare and an assessment of the likely benefits for agriculture. Total quantifiable benefits in 2005 are estimated at US$1.3 million, including US$0.5 million in net benefits for agriculture due to the increased quantity of treated wastewater available for irrigation, and US$0.8 million as an estimate of the increase in households' welfare. Given these benefits and the projected cost of the wastewater component of the project, the rate of return is estimated at about 4% if the investment made under ERRP is included as cost and at 8% if the latter is excluded. These rates may be low but take into account only partially at best the substantial environmental and health benefits that are likely to be generated by the project. These include the reduction of the emptying of sewage tankers in unsuitable locations, the termination of the discharge of raw sewage into open canals, the prevention of the overflow of some on-site sanitation systems, as the current use of untreated sewerage for irrigation, and the protection of groundwater resources from contamination through seepage from cesspits.
2. Financial (see Annex 5): NPV=US$ million; FRR = %
Past and Current Financial Performance
The WAs in Lebanon are public agencies established with mandate to manage the water resources of the geographical area they operate in by establishing sources of water, distributing and connecting new subscribers, maintaining the network and fees collection. The Ministry of Energy and Water (MOEW) finances all capital investments, which after completion, are handed over to the respective WA for operation and maintenance. Excess cash between the revenues and expenses generated by the WA, if any, should be transferred to the Ministry of Finance (MOF) while any shortfall is financed through the
12 MOEW budget. The WA's financial records do not disclose any operational assets and do not account for depreciation expense or allowance. The tariffs are proposed by the WA and authorized by the MOEW and the MOF.
In an effort to increase the efficiency of managing the water sector in the country, the Govermment has issued Water Law 221 and its amendments, proposing the merger of the 21 Water Authorities operating in Lebanon into 4 regional authorities, one of which is intended to service the Beka'a region. Presently there are three water authorities that operate in the Beka'a: Zahle, Chamsine, and the BHWIA. The review of the unaudited financial statements of revenues and expenditures of the three authorities, reveals low collection rate resulting in non-sufficient cash generation to cover the cost of operations. This shortfall is reflected in the balance of the payable budget account which shows long outstanding arrears due to non payment of the electricity bills, the National Social Security Fund contributions and the Municipalities. A summary of the last three years perfornance for each of the three WA of the Beka'a is presented in Annex 5.
Financial projections were made to reflect the future performance of the BHWLA and their impact on the project. The financial analysis projections concentrate on the BHWIA being responsible for the water resources, the sewerage network and the wastewater treatment plant financed under the project.
Water: The present water tariff charged to consumers is based on a fixed fee. Each household connected is supposed to get one cubic meter of potable water per day. However, given the intermittence of water supply, households are receiving less then the quarter of this quantity without any fee reduction. This fixed fee is calculated by each authority separately depending on the area it serves, the level of income of the population served and whether water is delivered by gravity or power consuming pumps. At present, the water fee in the country varies between US$42 for Deneyeh and US$180 for the Metn area. For the BHWIA the fee charged is US$90 per household per year. Annex 5 shows the list of water tariffs by region.
Wastewater & Sanitation: Currently, there is no sanitation tariff in Lebanon. A proposal is made to introduce a sanitation tariff in order to allow the utility to recover part of its O&M costs. Detailed analysis is shown in Annex 5(a).
Future Financial Performance
Projections to assess the BHWIA's future financial position and performance was carried out for the period 2002-2012. This analysis was performed for the water and wastewater, separately and on a consolidated basis. These projections were prepared on the basis of assumptions detailed in Annex 5. The financial projections will be used as the basis for monitoring the financial impact on the project.
The sustainability of the new system will depend mainly on the increase in the collection rate, the introduction of metering, and on the introduction of volumetric tariffs set at a level sufficient to recover at least O&M for water activities by the end of the project. However, the stability of the local currency is a risk element as some of the costs may be incurred in foreign currency while the collected fees are all in Lebanese Pounds. The volumetric tariff would replace gradually the current flat-rate tariff of US$90 per subscriber per year.
A sensitivity analysis has been carried out to test the BHWIA's financial capacity to pay for its projected costs. The critical variables of the project were found to be related to the water tariff, collection efficiency and the willingness of subscribers to pay the proposed water and wastewater tariff. The analysis considered four scenarios. The summary of the projected financial statements for each of the scenarios is presented in Table 1. Detailed analysis of the projections are in Annex 5 and the Project File.
13 Under the four scenarios, it is estimated that by year 2004, 24,000 new subscribers will be connected to the water network, and 12,000 new subscribers connected to the sewer network. The consumption per capita is estimated at an average of 100 I/c/d. Upon connecting new subscribers or installing a volumetric meter to the old subscribers a connection fee of US$80 is collected by the BHWIA, for the part within the subscriber's property, with the bulk collected during 2004. Depreciation is calculated at 50% for year 2002, 75% for year 2003 and at 100% thereafter. During the transition period towards metering, the tariff for non-metered households is assumed to remain at the same level of US$90 per year. The volumetric tariff is initially proposed at a level of US$0.45 per cubic meter resulting in an average annual bill of about US$90. The tariff is proposed to be increased in year two of the project to US$0.60 per cubic meter. The IBRD loan is not expected to be on-lent to the BHWIA, thus any debt service would be the responsibility of the Central Government.
The following table and the attached graph, for the base scenario, summarizes the financial perfornance of the BHWIA. The findings under each scenario are detailed in Annex 5 and the Project File.
14 LEBANESE REPUBLIC: BA'ALBECK WATER AND WASTEWATER PROJECT Table 1
Sumnnay of Financial Projections
2000 2001/Base 2002 2003 2004 2005 2006 2007 2008 Actual Estimate Projected! Proected ProJected Protected Proect Proteeted Projected_ Base Scenario Water Surplus (Deficit) ($1,025,407) ($984,3121 ($387,014 ($662,294 $1,313,131 $754,79( $794,07 $440,254 $641,783 Wastewater Surplus (Deficit) -_,15,29 _ _ SI ,504,82 _ _(1,185,655 (SI,136,687 S 5 $ ,383,606 Surplus (Deficit) before Depreciation (S1,025,407) (S984,312) ($387,014 (S1,812,723 ($191,688 ($430,860 ($342,615 ($910,505 ($741,823 Depreciation $650,00( $1,567,50( $2,090, $2,090, $2,090,00 $900( $2,090,00 Surplus (Deficit) after Depreciation ($1,025,407' ($984,312) ($1,037,014 ($3,380,223 ($2,281,688) ($2,520,860 ($2,432,615 ($3,000,505 ($2,831,823 Scenario Two Water Surplus (Deficit) ($1,025,407 ($984,312) ($387,014) ($662,294 $1,313,13 $1,066,32 $1,896,865 $2,014,168 $2,082,14 Wastewater Surplus (Deficit) _$1,150,429 . . . . C ($1,504,827 - ($,185,655' _ $975,853 ($1,178,506 $1,205,817 Surplus (Deficit) before Depreciation ($1,025,407) ($984,312) ($387,014) ($1,812,723 ($191,688) ($119,327 $921,011 $835,662 $876,323 Depreciation S487,5 $1,175,625 $51,567,5 $1,567,50C $1,567,501 $1,567,50( $1,567,500 Surplus (Deficit) after Depreciation ($1,025,407 $984,312' ($874,514 ($2,988,348 ($1,759,188 (Sl,686,827 ($646,489 ($731,838 ($691,177 cenaro Three Water Surplus (Deficit) ($1,025,407) ($984,312) ($387,014 ($662,294 $721,838 ($24,036j ($ 161,584 $277,398 $300,44
Wastewater Surplus (Deficit) _ _$1,032,169_...... ($1,307,727 - ($929,425 . $875,332 _ (1,070,848 _. _ ($796,031 Surplus (Deficit) before Depreciation ($1,025,4 ($984,312) ($387,014 ($1,694,463 ($585,888 ($953,461 ($1,036,916 ($793,450 ($495,588 Depreciation $487,50C $1,175,625 $1,567,50 $1,567,50( S1,567,50 S1,567,50 $1,567,500 Surplus (Deficit) after Depreciation (1,025,407 ($984,312 ($874,514 ($2,870,088 ($2,153,388 ($2,520,961 ($2,604,416 ($2,360,950 ($2,063,088 enarlo Four Water Surplus (Deficit) ($1,025,407 ($984,312) ($387,014 ($662,294 $1,313,138 $1,883,238 $1,999,003 $1,670,243 $1,965,609 Wastewater Surplus (Deficit) ………($1,032,169 ($q,159,902- ($239,575 ($91,269 ($317,242 $(249,937 Surplus (Deficit) before Depreciation ($1,025,40 ($984,312) ($387,014) ($1,694,463 $153,237 $1,643,663 S1,907,734 $1,353,001 $1,715,672
Depreciation _ $487,500 $1,175,625 $1,567,500 $1,567,500 $1,567,500 $1,567,50 $1,567,500 Surplus (Deficit) after Depreciation ($1,025,40 ($984,312 ($874,514) ($2,870,088 ($1,414,263 $76,163 $340,234 ($214,499 $148,17
15 Surplus (deficit) after depreciation - Depreciation Surplus (deficit) before Depreciation -c- Wastewater Surplus (deficit) -- Water Surplus (deficit)
3,000,000
2,000,000 A
1,000,000 -
| (1,000,000) *
(2,000,000) , =
(3,000,000)
(4,000,000)
(5,000,000) X ,
(6,000,000)
It should be emphasized that the expected increased revenues (base scenario) will not be due to an increase in tariffs. Indeed, the water bill for poor households is expected to decline due to the introduction of volumetric metering - Annex 5 and 5(a). The increase in revenue is expected to come through the increase in the number of service connections and in the increase in billing efficiency.
16 Tariff Policy and Structure
The Objectives of Tariff Policy
There are three main objectives that need to be taken into account when designing a tariff policy for water and sanitation: efficiency, equity and cost recovery. Since water resources are scarce and their mobilization is costly, they need to be used efficiently. The levels of tariffs should, therefore, be such that users are encouraged not to waste these resources and to consume quantities that are commensurate with cost.
The first objective is the efficiency incentive that requires pricing water at its long-run marginal cost (LRMC), i.e., at the additional cost required to increase water supply, including capital cost. Under this pricing scheme, no one will use any volume of water if it does not procure him a benefit that is at least as equal as the supply cost. Two measures of marginal cost may be used, the short-run marginal cost (SRMC) and the LRMC. SRMC is more or less equal to the unit operating and maintenance cost (O&M cost) whereas LRMC includes, in addition to the latter cost, the cost of capital.
The second objective is that of equity. A unique tariff applied to all households and users may result in an excessive burden of the water and sanitation bill for low-income households. Theoretically, the latter's consumption can be subsidized through appropriate schemes. In Chile, for instance, low-income households, which are identified at the municipal level, receive subsidies proportionately to their water bill up to a certain volume and pay the full unique tariff for any consumption above that volume. Ideally, this is a first best policy to deal with both objectives. However, its efficient implementation requires a strong institutional capacity that is lacking in most developing countries.
The third objective is cost recovery. With tight budget constraints for the public sector, the provision of public utilities such as water and sanitation can be sustainable only if costs are recovered, at least in their operating and maintenance components. Otherwise, new facilities would easily fall in neglect and be quickly run down, leading to the recurrence of problems that have become all too familiar under the existing system.
The Existing Tariff System
As mentioned above, the BHWIA has been applying a flat fee equal to US$90 for the delivery of Icum per day to each subscriber. However, the existing system supplies water intermittently and actually delivers far less than the promised quantity, no more than a third of the latter. With the completion of investment under ERRP and the house connections planned under the envisaged new project, it is expected that water will be available on a continuous basis and that metering will allow to charge users according to quantities consumed.
It is important to stress that the current system does not serve any of the objectives mentioned above. It works against efficiency since the water bill is independent of the quantity used. The problem would be worse with the new network since it allows subscribers to access supply on a continuous basis. It does not serve equity since households are charged the same bill regardless of their income and their ability to pay. Finally, it does not allow to recover cost so as to ensure the sustainability of water supply, particularly if billing efficiency remains at its very current level (less than 35%).
17 The Recommended Tariff Policy and Structure
In view of these general objectives and the inadequacy of the existing system, the following guidelines are proposed:
- Revenues should cover all O&M costs for water by the year 2007. Average tariffs will be initially set at less than O&M and gradually increased so as to reach full O&M cost recovery by 2007. Capital cost (depreciation) should be gradually added thereafter. For sanitation, revenues should cover two-thirds of O&M costs by the year 2007 and increased thereafter so as to reach full cost recovery in later years, whereas capital cost will continue to be mostly borne by national budget.
- Alternative options may be envisaged for the tariff structure: a volumetric linear tariff, a bloc- tariff structure, etc. Ideally, users should be charged the same efficiency price, which is the long-run marginal cost and low-income households should be subsidized up to a certain volume of water consumption. However, in the absence of an efficient and fair subsidy scheme, a progressive block tariff scheme, which is recommended here, would address the equity concern while helping to minimize inefficient use of water.
- Billing should be done jointly for both water and sanitation on the basis of the quantity of fresh water used, which is the practice found in most countries.
- Bills should consist of two components, a fixed component and a variable one that will depend on the quantity of water used. The fixed component should not be too high so as not to penalize low-income users and offset the distribution effect of the increasing block tariff structure.
- The within property line component of the cost of house connections (estimated at approximately US$80) should be charged to the user and paid in installments added to the quarterly water and sanitation bill.
The above conclusions can be sustained if the proposed tariff structure and levels are implemented at least for the base scenario. During negotiations, financial projections and tariff proposals were discussed in detail with the Lebanese counterparts. Although no conditionality is requested for the project due to its urgency, the MOEW has agreed, in principle, to consider the implementation of the above Bank's recommendation regarding tariffs - Annex 5(a).
Fiscal Impact: The fiscal impact of the project consists of incremental revenues from value-added tax, reduced subsidies to the BHWIA and debt service on the IBRD loan.
A 10% value-added tax (VAT) was introduced in Lebanon on February 1, 2002. It is understood that the VAT will be levied on water and sewerage tariffs and that it will replace the current 10% municipal tax levied on water tariffs. The incremental revenues from VAT due to the project are estimated at an equivalent of US$3.4 million (US$4.1 mnillion with project and US$0.7 million without project) for water and US$0.5 million for wastewater (no taxes without project) over the next 10 years (2003-2012), valued at the current exchange rate. The annual incremental tax revenue from both water and sanitation is estimated to reach more than US$0.4 million, once all connections are completed.
18 The BHWIA has been subsidized at the tune of about US$0.9 million per year to cover the shortfall between recurrent expenditures (mainly salaries) and cash revenues. This drain on the government budget would be eliminated through the introduction of new tariffs, an effective billing and collection system and increased willingness to pay due to improved services.
The debt service payrnents depend on the type of IBRD loan product. The payments on IBRD loans are lower than payments on debt contracted by the Lebanese government on the capital market.
3. Technical:
The project is technically sound. The design is based on applicable international standards/guidelines and on demand projections that are acceptable, with relevant project components representing least cost solutions. Although the wastewater treatment works for Ba'albeck and surrounding villages are financed under the ERRP, they form an integral part of the proposed investments to be made under the project. The quality of treated effluents is expected to be maintained, since the selected treatment process would be able to handle potential variations in the quality of incoming wastewater. A survey has also been carried out on industrial effluents in Ba'albeck with the conclusions that there is no current need for on- site pre-treatment facilities, and that relevant effluents will not be harmful to the treatment process.
4. Institutional:
4.1 Executing agencies: CDR will be the executing agency under this project. CDR will be in charge of financial and procurement matters. CDR will prepare tender documents and contracts, issue payments, manage the SA, undertake audits of project account and SA and coordinate with the MOEW, the WAs and the Bank. 4.2 Project management:
Project management will be the responsibility of CDR as shown in Annex 12. The SCs will be responsible for O&M and will be accountable to CDR for implementing their contracts. However, the BHWIA will be closely involved in the daily O&M with the SC.
Both CDR and the BHWIA will supervise the SCs for operational aspects and will be assisted by the TSU as detailed in the Project File. Technical assistance and training (see Annex 15) will also be provided to the ZWA and CWA. The BHWIA will supervise the TSU and carry-out studies of the proposed tariffs. 4.3 Procurement issues:
The two main procurement issues in the project are: (i) the two SCs estimated at US$7,439,000; and (ii) the status of preparation for the three main packages for the water and wastewater works, estimated at a combined value of US$31,000,000. Together, these five packages represent around 80% of the project amount. To address the special requirements for the procurement of the SCs, CDR will retain the services of consultants to prepare the bidding documents for these processes. These documents will take into consideration the requirements of the assignments while adhering to the Bank Guidelines. The activity for the preparation of SC for the water supply and sewerage network will be financed retroactively from the loan if needed. As for the procurement of the three main works packages, CDR has retained the services of a consulting firm under a contract financed by the ERRP loan for the design and preparation of bidding documents for: (i) the construction of the water distribution lines and house connections; and (ii) the construction of the wastewater network. The package for the wastewater network and the first package for the water works have already been submitted to the Bank. A pre-qualification process will be conducted by CDR to determine the qualified contractors that will be invited to participate in the two ICB
19 procurement biddings. This process should proceed as soon as possible. It is expected that the bulk of the procurement activities will be launched during the first year. In general, the status of the preparation of these packages is satisfactory. However, there is a need to expedite the process of selecting a firm to prepare the bidding documents for the SC for the water supply and sewerage network. It is also important to maintain the current momentum in the preparation of the remaining works packages and the supervision and monitoring consultancies. Another critical issue is the need of resource allocation from CDR for the management of these contracts. For this purpose, the project has provided allocations for technical assistance for the preparation of bidding documents and supervision services.
4.4 Financial management issues:
The financial management assessment showed that the accounting and financial management system in place at CDR is based on principles and procedures defined by the legal framework and operational decrees applicable to CDR. This system was found to lack the support of a budgeting module and needs enhancement to become capable of generating timely project reports. Meanwhile, CDR is implementing interim accounting arrangements to enable its accounting department to generate periodical reports for project management and decision making. For this purpose, CDR has recruited a full-time financial officer and is in the process of acquiring an accounting software capable of generating timely reports for project management.
To mitigate the risk of CDR not having the accounting software in place and operational by the effectiveness date, and given the disbursement level during year one of the project, CDR will use spread sheet application to follow on the project accounts during this period. In addition, the Bank through its Country Office will perform intensive supervision and assist CDR to achieve the objectives of the interim arrangements. Financial management arrangements are detailed in Annex 6(a).
5. Environmental: Environmental Category: B
5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. The project has been classified as Category B as per the Bank's Operational Policy 4.01, Annex C on Environmental Assessment, indicating that there are reversible environmental issues that can be mitigated. Thus, the project requires an environmental assessment to identify potential negative environmental impacts and propose mitigation and monitoring measures where needed.
The project consists of the following components:
- Water supply pipelines and house connections - Wastewater collection pipelines Moreover, a wastewater treatment plant to treat municipal water was constructed under the ERRP. The wastewater treatment plant is based on the sludge activated process plus chlorination. The capacity of the WWTP is 12,500 cu.m/day with the possibility of extension to 25,000 cu.m/day after the year 2008. The treatment plant is designed to give a treated effluent that would conform to the Lebanese standards with BOD = 35 mg/l and suspended solids= 30 mg/l. A full Environmental Assessment (EA) was not performed prior to the construction of the wastewater treatment plant. Instead, during project preparation, a post review was undertaken with respect to the sitting, engineering design, technical and environmental performance as well as any potential risks related to the construction or operation of the WWTP (see Annex 16 - attachment A7). The EA and the EMP are detailed in Annex 16.
20 The project will not entail any expansion of existing structures or construction of new structures. Civil works will predominantly entail laying of water and wastewater pipelines, which include pavement demolition, trench excavation, pipe laying, trench filling and pavement reinstatement. Whenever the execution of works will be conducted in private lands, it would follow the Land Acquisition Plan (LAP), details of which are in the Project File - see also section 7.2 below. The project will not affect any known archeological or historical site or any critical natural habitats, nor will it affect indigenous people.
The activities to be executed under the project aim at improving water supply and wastewater collection and treatment. The main benefit of the project would be better provision of controlled water supply connections to the households and reduction in the overdraft from the aquifer. The project would also provide proper collection of wastewater thus reducing groundwater contamination. It will also result in environmental and health benefits because: (i) operation and maintenance of the water resources will assure the provision of good quality drinking water; (ii) operation and maintenance of the wastewater treatment plant will provide potential treated wastewater and sludge to be used for agricultural purposes; (iii) improvement in operations will contribute to better day-to-day environmental management (treatment plant wastewater management, handling of chemicals, improvement in operation and maintenance of the water and wastewater networks, including better emergency response, better compliance with environmental regulations); and (iv) water conservation through supply management and re-use of treated effluent for irrigation. Potential environmental issues that require mitigation measures relate to: (i) disturbance during construction including dust, noise, vibration, access restriction, closure of roads and increased traffic; (ii) safety hazard from construction activities; and (iii) inappropriate disposal of excavated materials and construction debris. These environmental issues will be minimized through appropriate mitigation measures, which are nornal construction operation practices. Requirements for the works to be performed following specific provisions in the EMP and good construction practices are included in the contract documents for civil works. Other issues that will require proper monitoring during the operation of the project are: (i) monitoring and control of the water quality source being used for water supply; (ii) monitoring and control of the operation of the wastewater collection and of the existing treatment facility; (iii) monitoring the re-use of the treated effluent and sludge from the treatment plant; and (iv) adopting adequate guidelines for the re- use of treated effluent for irrigation purposes.
5.2 What are the main features of the EMP and are they adequate?
The EA includes a description of the project, the national legal and regulatory framework, identification of main impacts, evaluation of alternatives to the project, as well as an EMP covering specific mitigation measures with implementation and monitoring responsibilities, and the estimated budget. The provisions of the EMP are adequate to minimize potential negative environmental impacts associated with the project activities.
During the construction phase, the EMP requires the contractor responsible for the civil works to address the environmental concerns. The contractor would be required to keep work sites clean, minimize noise and dust, and restore the site to the original state after construction. The contractor would be also requested to apply chance find procedures in case unknown archeological materials are encountered during the course of the construction activities (see Annex 16 - Attachment A6). The BHWIA will have to supervise the contractor and to ensure that he is implementing the mitigation measures adequately. Prior to contracting civil works, the Bank will review the tender documents to ensure that all necessary mitigation measures are incorporated in the contract documents.
21 During the operation phase, a series of environmental mitigation and monitoring activities (see Annex 16) will be executed by the Service Contract(s) and the BHWIA, which include:
Quality and Quantity of Water Supply: the laboratory analyses of the various water sources that were conducted in November 2001 confirmed the adequacy of these sources for drinling water supply. The likelihood of water quality degradation and the provision of poor quality water are very small. However, water quality testing should be conducted regularly at the water sources (springs and wells), the reservoirs, and in the distribution network. It would be the responsibility of the Service Contract to provide the necessary laboratory equipment, to take samples and conduct the necessary analyses. The Service Contract should also conduct regular maintenance of the system to avoid any contamination, over abstraction of ground water, leakage and illegal connections. Training workshops will be provided to the Service Contract, BHWIA and Municipalities on water quality testing and analysis. Municipalities will be also trained to alert BHWIA and the Service Contract of any changes in water quality, which would trigger an immediate water test. The water supply sources consist of six water springs (Ain Dardara, Nabaa loujouj, Chaghour, Ed Delbe, Sbah and Sbat) and 23 wells. The water balance for the study area was prepared on the basis of the population figures (246,000 for the year 2000 and 403,000 for the year 2015), the water demand 34,452cum/d and 54,173 cum/d for the years 2000 and 2015 respectively) and the yield of springs and wells (ref. Annex 16 - Attachment A4). The water balance indicates that the total available resources (springs and wells) exceed the water supply demand of the project area for the year 2015. The Service Contract will conduct regular control and monitoring of the quantities of water being extracted.
Dischargeof Treated Effluent: treated effluent will be either discharged into an open ditch or re-used for irrigation purposes. The existing outfall from the treatment plant, an 800 mm diameter pipeline in which treated wastewater flows by gravity around 1.2 Iam, discharges into an open ditch. Manholes have been installed along the outfall to enable pumping of the treated effluent for irrigation purposes. To avoid any environmental and health impacts that might arise from the discharge of the treated effluent, the outfall will be extended 1.5 km and will discharge into a drainage channel that leads to Al-Assi River. However, as the river is located around 25km from the discharge point into the drainage channel, the treated effluent will not reach Al-Assi River as it will be used for irrigating the agricultural lands. Moreover, the water quality in the drainage channel will be continuously monitored by the Service Contract to ensure that no pollution is arising from the discharge of treated effluent. TreatedEffluent Quality: the design of the existing wastewater treatment plant allows the production of a good quality treated effluent that complies with World Bank standards (Pollution Prevention and Abatement Handbook) for discharge into receiving water bodies. However, in view of the availability of water for municipal use and not for irrigation, and considering the high demand for irrigation water in the project area, there is a great possibility that treated effluent would be re-used for irrigation purposes. To avoid any health impacts that might arise from the re-use of treated effluent, the following activities will be implemented: (i) continuous monitoring of the treated effluent to ensure that it complies with World Bank and World Health Organization (WHO) standards (i.e., the World Bank Pollution Prevention and Abatement Handbook, and WHO guidelines for the Re-use of Wastewater until national guidelines are developed) will be conducted by the Service Contract; (ii) guidelines for the re-use of treated wastewater will be developed with the assistance of a consultant and in close coordination with concemed ministries, the guidelines will be complemented with soil analysis to identify the type of crops that can be cultivated and irrigated with treated effluent; (iii) training workshops on treated effluent re-use will be provided to all concemed stakeholders; (iv) awareness campaigns will be conducted and Arabic pamphlets will be distributed to all farmers highlighting the adverse health and public safety impacts resulting from the use of treated effluent; and (v) filters for the removal of nematodes will be installed in case monitoring of the treated effluent indicate the presence of nematodes.
22 Use of Dried Sludge: dried sludge will be used by farmers as soil conditioner or fertilizer. Before distributing or selling the sludge, regular analysis will be carried out to ensure that it complies with Food and Agriculture Organization (FAO), and WHO guidelines for the use of sludge in agriculture, including the limit of less than one intestinal nematode egg per 100 gm of dry solids. In addition to the sludge treatment processes that have been included in the existing treatment plan (thickening, aerobic digestion, sludge dewatering and lime stabilization), the project will finance the construction of sludge drying beds for a one-year storage period to ensure that the sludge will be free of nematodes. Moreover, national guidelines for sludge re-use would be developed in coordination with line ministries and concerned stakeholders, taking into consideration the results of the soil analysis that will be conducted under the proposed project, and the identified types of crops that could be cultivated and irrigated with treated effluent. These guidelines would set out good standards of practice and monitoring and defne roles and responsibilities. Training workshops on re-use of treated sludge will also be provided to all concerned stakeholders.
Measures to Improve the EngineeringDesign of the Treatment Plant: the assessment of the wastewater treatment plant indicated that no major risks or hazards will arise from the operation of the treatment plant. However, minor modifications will be implemented to mitigate possible negative impacts that might arise (ref. Annex 16 - Attachment A7). Among these measure are upgrading of the control and monitoring of the plant process units upgrading (variable speed blowers, residual chlorine analyzer, and dewatered sludge flow meters); a guardhouse for providing accommodation to the guard at the entrance of the treatment plant; improvement of health and safety provisions (first aid provisions in the administration room, chlorine gas detector, proper storage provisions for chlorine as well as proper storage provisions for lime and polymer for use in the dewatering facility); provisions of a telephone system on site; and provision of heating and air conditioning in the administration building. 5.3 For Category A and B projects, timeline and status of EA:
Date of receipt of final draft: EMP - November 2001 Environmental review of the existing wastewater treatment plant - November 2001
The EA including the EMP and the environmental review of the existing wastewater treatment plant were disclosed prior to appraisal in the BHWIA, the Bank's Country Office in Lebanon, the library of CDR, the Ministry of Enviromnent, and the Bank's Infoshop.
5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted?
Throughout the preparation of the project, the technical, financial, environmental and social issues associated with the project were discussed in meetings attended by design consultants, contractors, representatives of the municipalities, BHWIA and various other stakeholders. The common view held was that the project should be implemented as soon as possible without further delays. The farmers of the project area emphasized the need to provide proper irrigation storage and distribution of the treated effluent. They welcomed the use of treated sludge as soil conditioner.
Following the preparation of the project and the draft EA, a public meeting was held in Ba'albeck on November 2, 2001 and was attended by the environmental committee of the Municipality and representatives of environmental NGOs. The primary concern was that the project should be implemented in an environmentally acceptable way. High quality construction, the need to minimize environmental impacts that could arise during the construction phase, and the proper maintenance of the water and wastewater networks were expressed by all attendants. The re-use of treated effluent for irrigation purposes was also requested. Representatives of environmental NGOs indicated that the
23 provision of wastewater collection will greatly improve the environmental conditions, yet at present a large area of agricultural lands is being irrigated with raw sewage and will loose its source of irrigation once the wastewater collection network is constructed. Therefore, it would be necessary to provide these agricultural lands with treated effluent as an alternative source of irrigation.
What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP?
Responsibilities for daily monitoring of construction activities and compliance with the EMP will be part of the construction supervision activities. Monitoring of the environmental impacts during the operation of the project will be undertaken by the SC, which will be supervised by the BHWIA. The Bank will receive regular reports from the BHWIA on the progress of the project including the status of the EMP. The project provides clear monitoring indicators (Annex 14) to be used for monitoring and evaluation purposes during project supervision.
6. Social:
6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes.
A Bank social scientist reviewed project materials, visited a representative sample of villages and held discussions with residents, project staff and water authority. These visits were sufficient to identify the four main social issues and expected outcomes. It is recommended that a formal social assessment not be undertaken as part of this project preparation, on the grounds that it could risk provoking a negative reaction. The population have been consulted on many occasions by many different agencies about their needs and their expectations on many issues have been disappointed. The prevailing attitude is a strong wish to see actual implementation of development projects rather than to be further consulted.
The first central social issue is the urgent need to address one unsatisfied basic need, namely the long awaited completion of domestic connections to remedy the inadequate coverage of domestic piped water supply in Ba'albeck and surrounding communities. The best time to undertake social assessment work would be at the time of implementation.
The region demonstrates a high incidence of indicators of poor quality of life, including a low incidence of domestic connections, absence or irregularity of potable water supply, together with the inconvenience and additional burden of costs or reduced consumption borne by poor farmilies in meeting domestic water requirements from private sources. Collectively, the people of the region consider their water situation to be desperate. The severely deteriorated state of sewerage in Ba'albeck also poses health risks directly, and indirectly through the use of untreated contaminated water for market gardening, as well as constituting a public nuisance during summer months. This project, by directly remedying these unpleasant conditions for the households in the respective targeted areas, will directly alleviate these conditions of poverty, increasing consumption of an essential good while reducing unit costs.
The second issue is the need to build citizen confidence in government institutions and civic processes. Due to the unstable conditions that prevailed for several years, the collapse of civic controls enabled the creation of thousands of illegal connections; while the irregularity of water supply coupled with the use of gauges and a fixed annual subscription meant that many people just refused to pay for water on the grounds that they were already paying heavily for tanker deliveries. The ERRP was originally intended to rehabilitate the water supply to the level of domestic connections and was warmly welcomed by the intended beneficiaries as meeting a priority need. However, its restructuring during implementation resulted in dropping the domestic connections component in favor of enhancing sources of supply in
24 order to ensure a sufficiency for future populations to 2015. This measure caused some loss of confidence that the region would really share in the process of national recovery. This project would result in the long-awaited and popularly desired completion of domestic connections and so would contribute to public confidence that the region's population is finally benefiting from public investment. No administrative or policing action is required in respect of the thousands of illegal private connections to the old network, which would simply become useless when the old network supply stops and the new network connections are activated. By establishing a system of metered connections and regular billing based on actual consumption, the project would help restore a culture of civic responsibility and husbanding of an essential resource.
Willingness and ability to pay (except for the highly vulnerable discussed below) is not an issue. People look forward to individual domestic connections, which adds value to their property and gives them a certain status and dignity. Little purpose would be served by trying to estimate ability to pay in advance. Household incomes derive not primarily from agriculture but from a wide variety of sources and ancillary activities, including remittances, employment in the military and government, cross border trade, and domestic artisanal activities.
The third issue is the need to ensure protection of the highly vulnerable, both in respect of connection fees and in respect of tariffs. Families would have to pay all or most of the cost of connection works within the property line. With a high home ownership level (over 60%), many poor families stand to benefit from their investment in water and sewerage connections through enhanced property values. Up-front government funding, plus provision for repayment of the connection costs in installments should be sufficient to avoid exclusion for the vast majority, despite their difficult economic circumstances. However a small number of extremely vulnerable might require some social protection and appropriate financing scheme which will be monitored.
The fourth issue is the situation of the BHWIA employees at the onset of the SC. No retrenchment of BHWIA employees will be required under this project, as this issue will be addressed as follows:
* Government to maintain the freeze on new recruitment at the BHWIA. * It is estimated that around 20% of the BHWIA employees will reach retirement age within the project implementation period. * It is assumed that around 33% of the current employees will be recruited by the Service Contractor. * It is assumed that the remaining 40% will be engaged on activities in the irrigation sector and would provide support to the strengthened BHWIA in areas such as the supervision of the Service Contract, as well as administration and financial management.
Participatory Approach: How are key stakeholders participating in the project?
The project will introduce participatory elements after it has provided to the first beneficiaries access to the benefit stream. To introduce participatory methods in advance of public certainty of access to benefits would be to court popular skepticism. During implementation, a participatory approach will be incorporated into the monitoring and evaluation beneficiary assessment (see para. 6.5 below).
6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations?
The identification and preparation of this project has involved closed consultations with local stakeholders that included the municipalities and a number of active NGOs in the area. A public
25 consultation meeting was carried-out and was attended by a number of representatives of the civil society in the area.
6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes?
The citizen confidence outcome will be ensured by the Water Authority through: (i) a consultant management contract during the life of this project; (ii) public education; (iii) the implementation of an equitable standard tariff against consumption; and (iv) institutional arrangements to handle customer relations, ensure maintenance and deal with complaints. The MOEW will have national responsibility for ensuring that the Water Authority meets service standards.
6.5 How will the project monitor performance in terms of social development outcomes?
Immediately after loan effectiveness, a rapid social assessment report will be prepared in conjunction with the feasibility study. It will investigate, report and make necessary recommendations on: (a) the incidence and costs to subscribers for completion of individual household connections in relation to similar projects in the Ba'albeck area, assessing factors that positively or negatively affect the incidence of connections along newly-constructed distribution lines; (b) the incidence of deprivation or poverty in the project area that is sufficiently severe so as to inhibit households from obtaining physical connections without additional assistance; (c) the estimated actual costs to consumers of private provision of water; and (d) actual consumption levels by major category of use, with attention to the extent to which costs or availability of supplementary private sources of water have resulted in reduced domestic consumption.
During implementation, a social assessment will be conducted in conjunction with the implementation of works, and reported before mid-term review. It will cover three main topics: (a) the actual incidence and costs to households of domestic connections completed under the present project; (b) the impact on households of the actual cost of water in relation to the pre-project baseline; and (c) the project impact on domestic water consumption levels. A retrospective participatory survey of customer satisfaction with the project, institutional arrangements, service standards, consumer attitudes and practices in respect of wastewater disposal and the impact of metering on household water use may also be included. The detailed terms of reference will be prepared at the start of the project.
The poverty reduction outcome is ensured by the number, distribution and proportion of completed household connections which is therefore a key project output indicator.
7. Safeguard Policies:
7.1 Do any of the following safeguard policies apply to the project?
Policy Applicability Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) Yes Natural Habitats (OP 4.04, BP 4.04, GP 4.04) No Forestry (OP 4.36, GP 4.36) No Pest Management (OP 4.09) No Cultural Property (OPN 11.03) Yes Indigenous Peoples (OD 4.20) No Involuntary Resettlement (OD 4.30) Yes Safety of Dams (OP 4.37, BP 4.37) No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60) No
26 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. Environmental Assessment. (See above and Annex 16) Cultural Property. The construction of sewerage lines within the Ba'albeck Municipality, a World Heritage archaeological site, raises the possibility of chance archaeological finds. The extent of the area of the old Roman town that would be most likely to be affected has recently been mapped by Italian technical assistance. During project preparation, archeological surveys were conducted to investigate potential risks to known archeological sites and to identify areas where there is potential for finding archeological remains. The survey indicated that no water or wastewater pipelines are intersecting visible archeological remains. However, there is possibility that archeological remains be discovered during excavation. Areas with archeological potential were delineated and will be included in the contract documents. Moreover, chance finding procedures were developed to address the management of unknown archeological materials that may be encountered during the course of the construction activities and will be incorporated in the construction contracts. The Department of Antiquities will be notified in advance of the schedule of works, an archeologist of the Department of Antiquities will be present during construction in areas with archeological potential and the contractor will be explicitly bound by the chance finding clauses that have been prepared (Annex 16 - attachment A6). This work has been carried out according to World Bank Guidelines related to cultural property.
Involuntary Resettlement. The preceding ERRP involved land expropriation by CDR of portions of some 200 properties, of which all that were under private ownership have been fully compensated according to the provisions of the Lebanese law of expropriation. In some individually identified cases (because of the death of the owner, owner's absence from the country, failure to respond to notification, or failure to provide satisfactory evidence of title) some owners have not yet collected their compensation. No physical relocation or economic activities were involved. The sites were physically visited and the documentary evidence was reviewed by a Bank social scientist in July 2001 and the expropriation was considered to have generally conformed to Bank standards.
In the present project, wherever possible the proposed works have been located (and exact location adjusted as necessary) to maximize siting on public land and minimize the impact on private property. One hundred and six plots will be partially expropriated under this project through the excision of 3m strips totaling 24,456m2 of land for sewage lines or 0.76% of total plot areas, to allow the gravity sewerage network to be laid. Expropriation would be by Ministerial Decree. The Consultant submitted the relevant expropriation files to CDR in December 2001 and the latter is expected to review and process the files by June 2002. The Council of Ministers' approval, the issuing of the Ministerial Decree (expected by June 2002), and provision to the Bank with the evidence that the Borrower has identified the owners of the properties concerned and has assessed, for the purposes of compensation, the value of the private assets that will be expropriated (scheduled to be completed in August 2002) is a condition of disbursement of the related component.
Lebanese law provides explicitly for the following: (i) identification of all owners of and right holders in properties to be expropriated; (ii) independent judicial and professional assessment of all material losses; (iii) full and prior compensation before expropriation is effected; and (iv) the right of appeal against compensation awarded.
The expected socio-economic impact of acquisition can be projected from comparable works already undertaken in the region, and is minimal. Where private property will have to be expropriated, it is almost invariably barren and uncultivable land away from immediate settlement, and does not involve any relocation of residences or displacement of economic activities. No physical displacement of persons or
27 businesses is expected. On this basis the effects are judged minor and are the subject of an abbreviated Resettlement Action Plan, which, for the purposes of this project, is termed a Land Acquisition Plan.
The LAP includes a detailed list of plots to be expropriated, the existence of structures, as well as the size and location of the area to be expropriated. In addition, a plot by plot schedule of all expected expropriations in Baalbeck, Aln Bourdai, laat and Dourris, with plot numbers, areas, and areas to be expropriated on a standard form approved by the World Bank has also been prepared. These forms will be used to summarize information and monitor the process of expropriation and the award of compensation, and wi!l be made available to the Bank. Once the expropriation process is completed and compensation is paid, the Bank would give no objection for disbursement for actual works to commence.
Land compensation amounts and rates cannot be known in advance of the expropriation process, because judges have absolute discretion. By law, the Expropriation Commissions are required to account individually for all factors that might affect the value of the property or any other assets involved such as land, buildings, businesses and agricultural produce (trees etc.). Land is valued according to current local market rates considering shape, size, location, available amenities etc. Buildings are valued per square meter of construction taking age, condition, quality of materials, purpose etc. into consideration. Businesses are valued based on type, accounts, and evaluated through an onsite inspection that provides for loss of clientele, productive time and other expenses. Agricultural produce is valued according to market value. Trees are valued by type, age etc. Currently, an average market price of LL9,000 per square meter is being used to estimate the average value of compensation. The total estimated budget for the expropriation of 24,456 m2 of land is LL220,104,000 (around US$146,736) and will be provided by CDR. The availability of funds is now a prior requirement for CDR to initiate the process of expropriation.
The LAP was submitted to the InfoShop on February 21, 2002, thus fulfilling Bank requirements for international disclosure. Local disclosure will take place in several ways. A copy of the LAP has been placed in the public Library of CDR and the Bank's country office prior to the issuing of the Ministerial Decree currently scheduled for June 2002. Following the publication of the decree in the official gazette, which includes - (i) a sketch of the proposed project and a detailed plan of all properties to be expropriated in part or in full; (ii) a list showing the registration number of each property, its location, the names of all the owners and right holders in the Land Registry; (iii) the names of the apparent owner(s), as well as the property limits and the opinion of the local mayor; and (iv) a detailed list of the content of the land whose expropriation is proposed, before the date of publication of the decree in the government gazette - all interested parties may consult and obtain copies of these documents at government offices. The expropriations committee is also required to notify the relevant municipalities, mayors, ministries, and the Directorate of Urban Planning in Beirut and the Beka'a. Public notices, which include a copy of the decree and the list of properties to be expropriated, must also be listed in local newspapers, in the municipality and other central public places.
These provisions ensure the compliance of the project with the requirements outlined in OP/BP 4.12.
The project meets the guidelines outlined in OPN 11.03 on the management of Cultural Property in Bank financed projects (See above, Cultural Heritage, Section 7.2, Annex 16, Section 3.06, and Attachment A6).
28 F. Sustainability and Risks 1. Sustainability:
The sustainability of the project will only be ensured provided:
* connections are made to water supply distribution mains and to wastewater collection systems. This should be paid for by the subscribers (particularly inside property lines), which could possibly be arranged through installments to be paid with the water bills. Special arrangements will be made for the poor; * installation of water meters take place as envisaged, which will ensure water conservation and water availability throughout the distribution systems; * the Service Contract(s) materializes as planned; and * the proposed tariff structure is implemented.
2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1):
Risk Risk Rating Risk Mitigation Measure
From Outputs to Objective That a qualified service contractor will S Stringent post-qualification criteria will be be contracted and that the BHWIA will specified with specific requirements on prior generate sufficient funds. experience. The counterpart funding should represent revenue generation with guarantees to be given by the Government to supplement any shortcomings. That the demand for connections will N The first phase of connections has already materialize. started. The beneficiaries will cover only a portion of the connection costs, which will be affordable. That proper arrangements will be found M Consultants are being recruited prior to loan for the appointment of staff and technical effectiveness to assist the BHWIA. assistance services. That consulting firms of adequate M All local consulting firms will have the competence will be interested in bidding possibility to strengthen their capacity by associating with international firms From Components to Outputs That local funding will be made M* Local funding requirement is modest and available as needed and that there will be GoL is committed to complete this project. proper response at tendering for the Service Contract(s). * Tendering for O&M already in process Overall Risk Rating M to S
Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)
29 3. Possible Controversial Aspects:
(a) timely implementation of the SC; (b) timely implementation of the proposed tariff; and (c) availability of counterpart funds;
G. Main Loan Conditions
I. Condition of Disbursement: Issue of the Ministerial Decree of Expropriation for the wastewater component, and provision to the Bank with the evidence that the Borrower has identified the owners of the properties concerned and has assessed, for the purposes of compensation, the value of the private assets that will be expropriated.
2. Condition of Effectiveness: The Subsidiary Agreement has been executed on behalf of the Borrower and CDR.
H. Readiness for Implementation
E 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. 1. b) Not applicable. if 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation.
Et 3. The Project Implementation Plan (PIP) has been appraised and found to be realistic and of satisfactory quality. The PIP was updated at negotiations.
E 4. The following items are lacking and are discussed under loan conditions (Section G):
I. Compliance with Bank Policies
I 1. This project complies with all applicable Bank policies. El 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies.
t f Cf 2K.A.
Moham ned Benouahi Emmanuel Forestier t- Joseph Saba Team IJader Sector Director Country Director
30 Annex 1: Project Design Summary
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Rlensg"* otOZbv er X _ .:-A ; ; Sector-related CAS Goal: Sector Indicators: Sector/Country reports: (from Goal to Bank Mission)
1. To rehabilitate and expand -increase in service CDR/MOEW statistics and -the proposed institutional infrastructure and institutional coverage for (i) water annual reports strengthening and capacity development, supply; and (ii) wastewater. building will be implemented.
2. To achieve environmentally sustainable -maintaining satisfactory -funding will be made development. groundwater quantity and available and that priorities quality; will be established for -assuring satisfactory investments to be made. wastewater treatment 3. To upgrade the human resources base -progress under established and to address poverty. training programs; -private sector involvement -increase in population served mainly in poor areas
Project Development Objective Outcome/lmpact Project reports: (from Objective to Goal) Indicators:
1. Developing and strengthening the -improve in collection rate - progress and monitoring -that Govemment is committed capacity of the BHWIA, ZWA and CWA; -reduction in UFW reports to sector capacity building
- audits 2. Improving the access of the customers - population served with (i) -progress and monitoring reports -that people are willing to of the Ba'albeck Hermel Water and water supply; and (ii) -audits contribute to connection costs. Irrigation Authority to satisfactory water sanitation supply and wastewater services. 3. Involving the private sector in the - implementation of Service - progress and monitoring - that adequately qualified operation and maintenance of the water and Contract(s) reports service contractors will be wastewater facilities; and - audits interested in bidding.
4. Rationalizing the use of water through - number of water meters - that water meters will be the introduction of water meters. installed maintained and properly read.
31 ~~~~~~~~~,*.t, - . ,- - ...... , e4Dac...... , , , ;,,.: - 1W4erariy of Objectivu , Indlywr,- MQDJdMIR,& lvalupUo. . ,d A _ _ - Output from each Component: Output Indicators: Project reports: (from Outputs to Objective)
1. Institutional Development. -appointment of the -progress and monitoring -that staff with adequate technical support unit for reports. competence will be found for BHWIA, ZWA, CWA and the establishment of the TSU. CDR 2. Improving and increasing service - length of network -progress and monitoring - that the demand for coverage for water supply. implemented reports connections will materialize.
- number of water connections made
-number of water meters installed
- Implementation of training program 3. Irnproving and increasing service - length of network - progress and nonitoring - that the demand for coverage for wastewater collection. implemented reports connections will materialize
-number of connections made
4. Service Contract(s) - signing of a Service - progress and monitoring - that a qualified Service Contract(s) reports Contractor will be appointed and that adequate counterpart funding will be made available
5. Consulting Services - award of consultant -progress and monitoring that consulting firms of contracts for: reports adequate competence will be (a)-preparation of tender interested in bidding documents (b)- studies (c)- monitoring and supervision Project Components/Sub-components: Inputs: (budget for each Project reports: (from Components to component) Outputs)
1. Institutional Development US$4.55 million - project implementation and - that local sources of financing disbursement reports. will be allocated as needed. 2. Improving and increasing service US$14.91million coverage for water supply 3. Improving and increasing service US$18.65million coverage for wastewater collection. 4. Service Contract(s) US$7.44million
5. Consulting Services US$3.66million
32 Annex 2: Detailed Project Description
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
The project consists of the following five (5) components:
1. Institutional Development (US$4.55 million)
This includes the establishment of a Technical Support Unit (TSU) that will assist in strengthening existing water authorities in the Beka'a region and in preparing for their consolidation under one regional authority with the integration of wastewater. This will include the implementation of a comprehensive training program.
1.1 Capacity Building
Technical Support Unit (TSU) for the BHWIA, ZWA, CWA and CDR
The Technical Support Unit will be made of eleven (11) professional staff, including the CDR Coordinator, and two (2) project assistants. The team will be divided into two units with one team providing support to the BHWIA and another assisting ZWA and CWA. The Team Leader will be responsible for supervising both units and will be located initially at the BHWIA. The CDR Coordinator will follow up on the project's activities, and prepare and consolidate periodic reports for the project.
The TSU will consist of a Team Leader, senior and junior sanitary engineers, financial analysts, administrative officers and executive secretaries. The TSU will build institutional capacity and manage the training activities across the three water authorities. It will coordinate with the MOEW, CDR and the private operator and supervise the timely implementation of the TA activities and assist in developing more reliable information systems (technical and financial). The TSU will be equipped with office utilities, supplies and vehicles and will include office automation and information technology.
1.2 Trainin!
Training will aim at improving the capabilities of the water authorities to design, develop and implement public-private partnership in the water and wastewater sectors. The training will provide the appropriate means to the three Water Authorities to increase operational efficiency and reduce un-accounted for water and other system losses. It will be mainly directed towards the officials, engineers, and legal staff of BHWIA, ZWA and CWA and also at the officials from the central government responsible for planning and developing public and private partnerships in water and wastewater projects. A number of experts will provide the training in areas such as sector reform, legal and regulatory matters, procurement, financial management and contract monitoring.
2. Improving and Increasing Service Coverage for Water Supply (US$14.91 million)
As a supplement to the recently completed Ba'albeck Nabi Chit contract for the construction of water supply and distribution systems covering the Ba'albeck urban area and thirty four (34) surrounding villages, the project will include a further extension of 83 km of distribution mains and 16,000 house connections. This will provide for close to 100 percent service coverage. This component will be executed in two phases, the works conceming the first phase are scheduled for July 1, 2002. This component consists of the following activities (detailed cost estimates are in the Project File).
33 Activity Description
(a)- Construction of - Implernentation of 2,900 service connections at US$485.20 per service connections in connection. The Phase-I service connections serve about 4,500 Phase-I area including consumers for the following villages: Nabi chit, Serrain Fawka, Serrain additional water Tahta, Serrain Gharbieh, Hellaniye, Chhimiye, Sifri, Haouch Nabi, Al distribution lines Khodr and Khraibeh. Physical contingencies represent 10% of the indicated baseline value. Installation of additional water distribution lines that represent 21 Km of HDPE pipes with all their related fittings and accessories including the connections to the already executed network for the same villages as above. The average price of the meter is US$60. Physical contingencies represent 10%/0 of the indicated baseline value. Note: A pipe network equal to 65km has been already installed under the ERRP and 21km remain outstandingin order to cover a total of 2,900 service connections.
(b)- Construction of - Implementation of 13,100 service connections at US$485.20 per (b)-Construction of connection for all villages which are not included in Phase-I. The Phase- service connections m II service connections serve about 19,500 consumers. Physical Phase-iil area including contingencies represent 15% of the indicated baseline value. additional water distribution lines Installation of 62 km of secondary and tertiary HDPE distribution lines. The total cost is based on the average price per meter equal to US$60 for the supply and installation of 90mm or 100mm HDPE pipes, including the necessary fittings, excavation and reinstatement works and all related civil works. Physical contingencies represent 15% of the indicated baseline value.
Note: A pipe network equal to 138km has been already installedunder the ERRP and 62km remain outstandingin orderto cover a total of 13,100 service connections.
3. Improving and Increasing Service Coverage for the Wastewater Collection and Treatment (US$18.65 million)
The wastewater collection systems under the project will cover the Ba'albeck urban area and four (4) surrounding villages. It complements the already existing collection systems and wastewater treatment plant. The wastewater collection and treatment would provide treated effluents and sludge suitable for agricultural reuse. This component consists of the following activities (detailed cost estimates are in the Project File):
34 Activity Description
SEWERAGE NETWORK: (a)- Construction of - Construction of wastewater network to cover Ba'albeck city and the sewerage network surround, i.e, Douris, Ain Bordai, Iaat, Tel Abiad at a cost of US$90 per meter with a total length of 160km of pipeline with diameters varying from 150mm to 600mm. WASTEWATER TREATMENT PLANT (b)- Extension of the effluent - Pipe extension (1.5km) of 700mm diameter. discharge pipe (c)- Physical Improvements - Additional works necessary for the proper operation of the WWTP. to the WWTP (d)- Preparation of a storage - Preparation of a storage area for the sludge effluent at the WWTP: area for the sludge effluent at Engineered concrete structure (5000 sq.m.) for a flow of 12,500 the WWTP cu.m./day that includes proper drainage, access road and comprises concrete bays (4100 sq.m.) separated by walls to avoid contamination and wetting of the deposited sludge with new applied sludge. (e)- Tertiary Treatment at the - Filters for a flow of 12,500 cu.m./day. WWTP EXPROPRIATION - About 100-150 plots at an average of US$1,667 per plot. Relevant expropriation files already submitted to CDR are expected to be approved by the Council of Ministers with the Ministerial Decree issued
______in June 2002.
4. Service Contracts (US$7.44 million)
To secure satisfactory operation and maintenance of the water supply and distribution facilities and of the wastewater collection systems in the Ba'albeck Nabi Chit areas. The project will include Service Contract(s) that will initially cover a two-year period with provisions to be made for another two-and-a- half-year extension in case the management contract which is being prepared separately would not be ready to take over. Another SC will be initiated for the wastewater treatment works once the initial contract expires end-2003.
(a)- The first Service Contract covers the water and sewerage networks and the water supply facilities. This was estimated based on the value of the physical investments made in the region under past, on-going and planned projects. The Service Contractor will be responsible for operating and maintaining the sewerage network and all water facilities such as transmission pipelines, boreholes, reservoirs electromechanical works such as pumping and chlorination stations. The assumptions used for estimating the value of the Service Contract(s) include the economies of scale that could be achieved and the new condition of the infi-astructure to be maintained.
(b)- The second Service Contract covers the O&M of the wastewater treatment plant. The estimated cost reflects the past experience of CDR for the Operations and Maintenance of the Ghadir Wastewater Treatment Plant. The SC will be responsible for the O&M of the WWTP and for implementing the wastewater quality monitoring programme.
The cost estimated for the Service Contracts are included in the Project File. 35 5. Consulting Services (US$3.66 million)
This component includes: supervision of construction works and Service Contract; and some specific studies. The studies would include: preparation of tender documents for Service Contracts and for a subsequent management contract; preparation for and implementation of an environmental management plan; and preparation of development programs for the future extension of water supply and wastewater services in the Beka'a region.
5.1 Preparation of Tender Documents and RFPs
(a) For the Service Contract for water supply and sewerage (including physical improvements to the WWTP); (b) For the Service Contract for the wastewater treatment plant; (c) For the Management Contract for the whole of the Beka'a region (BHWIA, ZWA and CWA) and possibly MCs for other regional water authorities; and (d) For the storage area of the sludge effluent and the tertiary treatment at the WWTP. 5.2. Studies in the Wastewater Sector
This consists of a number of studies in the wastewater sector that include updating the masterplan and the preparation of development programs for water supply and wastewater services in the Beka'a region.
5.3 Construction Supervision
(a) House connections and distribution lines in Phase-I and Phase-lI areas; (b) Wastewater network to cover Ba'albeck city and the surround, i.e, Douris, Ain Bordai, Iaat, Tel Abiad; (c) Extension of the effluent discharge pipe. Assumed to be equal to 4.6% of the estimated construction cost; (d) Storage area for the sludge effluent and the tertiary treatment at the WWTP; and (e) For the supervision of the two (2) Service Contracts for water supply and wastewater collection and treatment.
5.4 Environmental Monitoring: Environmental Management Plan (EMP)
This component consists of the following activities:
(a) BHWIA - Selection of short-term environmental specialist. - Laboratory Testing and Monitoring.
36 (b) Studies, Training and Workshops - Preparation of re-use guidelines for treated wastewater and sludge. - Soil analysis to identify the type of crops that can be cultivated and irrigated with treated effluent. - Two days training workshop for BHWIA, Municipalities and line ministries on re-use of treated wastewater and sludge. - Three days training workshop for water authority, municipalities and management contract on environmental monitoring, sampling and analysis. - Public awareness workshop for NGOs, community and farmers on re-use of treated wastewater and sludge. - Awareness campaigns and arabic pamphlets highlighting the adverse health and public safety impacts resulting from the use of untreated effluent. - Monitoring and evaluation at the project level. - Operation materials and supplies.
37 Annex 3: Estimated Project Costs
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Project Cost By Component Local Foreign Total US$ (000) US$ (000) US$ (000) 1. Institutional Development 3,998 384 4,382 2. Improving and Increasing Service Coverage for Water Supply 5,097 7,646 12,743 3. Improving and Increasing Service Coverage for Wastewater Collection 6,721 9,707 16,428 4. Service Contract(s) 2,904 4,356 7,260 5. Consulting Services 2,552 1,000 3,552
Total Baseline Cost 21,273 23,093 44,365 Physical Contingencies 1,406 2,132 3,538 Price Contingencies 618 684 1,298 Total Project Costs 23,291 25,909 49,201 Total Financing Required (excl. front end fee) 20,520 22,575 43,095
Project Cost By Category US$ 00 Foreign Total U$(O 0) u$(O 0) u$(O0)
Works 13,581 19,977 33,558 Goods, Equipment and Vehicles 108 432 540 Services and Training 6,318 1,038 7,356 Service Contract 2,975 4,463 7,439 Incremental Operating Costs 309 0 309 Total Project Costs 23,291 25,910 49,201 Total Financing Required 20,520 22,575 43,095
Note: Totals may differ due to rounding.
38 ±n.nT 19; nr CnGU%xO TV C39nG amu vv aA.VV tn f ,
L!- Caocitv Building ______. _f _ (a)-Technical Support Unit for the BH{WIA, CWA end ZWIA 651 633 630 636 636 3,1I86 3,1 S6 0o/0 (b)-Operating cost of the TSU 63 61 62 62 62 309 309 - 0% (c)-Office automation, fumiture, information technology md vehicles for the TSU 267 274 _ f 540 108 432 80%io 1.-Taning _
i progmmne 128 127 ___ 12S 511 5_ _ 0%
______-___s______* ] *- --1 kSh r ____ _ Jv 9%tF
1(a)-Construction of service connections in Phase-I area including additienal distribution lines 2,992 [ -| 2,992 |1,197 J 1,795 1 60% (b)-Construction of service connections in Phase-I1 area including edditional distnbution lines | 3,546 8,371 = 19r47
, ___ ... - . - - __.- 9 |94,:|767 -; 7,0Si 596%
(ayConsrucinon Of v!asif waicnecv!or; _ 4,813 11,363 _ . _. 16,177 6,,171 >,705r9 60°o (b)-Extension of the effluent discharge pipe at the WWTP 352 - 352 141 211 600 (c)-Physical improvements to the WWTP - 285 285 114 171 60o (d)-Preparation of a storage area for the sludge effluent at the WWTP - 449 301 - 750 300 450 600% (e)-Tertiary treatment at the WWTP - - 411 412 - 823 494 ;329 600 (f)-Land expropriation 263 - - 3263 0% Sub-Total 5,428 1,648 860 713 8,649 L59%|11,032,67 4 &SenlCoutr6s) -_ _ _ _ _ (a)-Forthe water supply and sewerage network 689 1,278 1,263 168_1,268 15,766 2,30613,4601 60% (b)-For the wastewater treatment plant - 244 475 477 477 1,672 669|1,0031 60% Sub-Total 699 1,522 ( ,3 1,7451 1,745 7,439 2,975 4,6 60
5. 1- Preparation of Tender Documents (a)-For the storage area,tertiaiytreatment and Service Contracts 84 18 95 - - 197 197 - 0% (b)-For the Management Contrat 414 624 - | - 1,038 - 1,038 100|
5.2- Studies in the wastewater sector - - 254 256 - 510 510 - 0I 5.3- Supervision 553 809 72 72 41 1,547 1,547 - I % 5.4- Environmental Monitornn 45 8 1 80 8 1 81 368 368 - 0%/ Sub-Total 1,096 1,532 501 409 122 3,660 2,622 1,038 28% TOTAL PROJECT COST 14,732 24,168 3,917 3,692 2,692 49,201 23,291 25,909 53%
39 Annex 3: Table A1(a) - Estimated Project Cost (US$ thousands) LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Proiect Component 2003 2004 2005 2006 2007 Total Local Foreign %I Foreign
I~~~~ - D e I P q ' - = ;.-, t F-,* ..._1*.- ._,.,X$-7-
I . - Cavacity Building . . __ * _,_,, (a)-Technical Support Unit for dhe BHWIA, CWA and ZWA 620 620 620 620 620 3,102 3,102 - 0% (b)-Operating cost of the TSU 60 60 60 60 60 300 300 - 0% (c)-Office automation, furniture, infonnation technology and vehicles for the TSU 240 240 - - - 480 96 384 80% 1.2- lTlini"n (a)-Training progranunme- 125 125 125 125 500 500 - 0% Sub-Total 920 1,045 805 805 805 4,382 3,998 384 9%
(a)Construcnon of servce connections in Phase-I area including additional distnbution lines 2,667 .*| 2,667 1,067 1,600 60°o% (b)-Construction of service connections in Phase-Il area including additional distribution lines 3,023 7,053 - | 10,076 4,030 6,046 60% Sub-Total 5,690 7,053 - |12,743 5,097 7,646 600/o
_ffyA ~ _ _ _ t, , . . . - - . (a-Construction of wastewater network 4,290 10,010 - - - 14,300 5,720 8,580 60%0/ (b)-Extension of the effluent discharge pipe at the WWTP 300 - 300 120 180 60% (c)-Physical improvements to the WWTP - 240 - | - 240 96 144 60%Yo (d)-Preparation of a storage area for the sludge effluent at the WWTP | - 383 255 - 638 255 383 60% (e)-Tertiary treatment at the WWTP - - 350 350 - 700 280 420 60% (f)-Land expropriation 250 - - - - 250 250 - 0% Sub-Total 4,840 10,250 733 605 - 16,428 6,721 9,707| 59%
(a)-For the water supply and sewerage network 675 1,238 1,238 1,238 1,238 5,627 2,251 3,376 1 60% (b)-For the wastewater treatment plant - 237 465 465 465 1,633 653 980 60% Sub-Total 675 1,475 1,703 1,703 1,703 7,260 2,904 4,356 60%
* >k-; ! . _' . , . ., _-. _- _ .. 5. 1- Preparation of Tender Docum_ents ______(a)-For the storage area,tertiary treatment and Service Contracts 79 18 94 - - 190 190 - 0% (b)-For the Management Contract 400 600 - - - 1,000 - 1,000 100%/0
5.2- Studies in the wastewater sector - - 250 250 - 500 500 - 0% 5.3- Supervision 526 794 71 71 39 1,501 1,501 - 0% 5.4- Environmental Monitoring 43 79 79 791 79 360 | 360 - 0% Sub-Total 1,049 1,491 494 400 119 3,552 2,552 1,000 28% Total Basel}ne Cost 13,174 21,314 3,735 3,514 2,627 44,365 21,273 23,093 52% Physical Contingencies I I II I__ 10% for equipment and works 720 1,025 - - - 1,745 688 1,056 600/% 15% for 2(b), 3(b),3(c),3(d) and 3(e) 498 1,094 110 91 - 1,793 717 1,076 60% Price Contingencies 339 735 72 87 65 1,298 613 684 52% Sub-Total Contingencies 1,557 2,854 182 178 65 4,836 2,019 | 2,816 58% Total ProJect Cost 14,732 24,168 3,917 3,692 2,692 49,201 23,291 25,909 53% 40 Annex 4: Cost-Benefit Analysis Summary
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
1. Brief Description of the Methodology Used
The economic analysis of the project assesses its economic costs and benefits using a with-without methodology, analyzing the water supply and sanitation components separately. Costs and benefits are shadow-priced as appropriate. The economic viability of the project is assessed by calculating the Net Present Value (NPV) and Economic Rate of Return (ERR). The analysis is carried out at constant 2000 prices. Since substantial technically related investments have been undertaken under the ERRP, these costs have been included in the base case in order to assess whether the investments would have been economically feasible in retrospect. In the sensitivity analysis, these costs are considered as sunk costs, which is a more appropriate approach for the economic assessment of the new project. Taxes and duties on goods, which are estimated at an average rate of 15%, have been deducted from the financial investment costs for the purpose of this assessment because, unlike in the financial analysis, they are considered as real costs involving the use of real resources. Labor costs for unskilled labor used for works have been shadow-priced at 80% of financial costs, in order to reflect labor market distortions and capture the opportunity cost of labor. In addition, the economic costs of labor for operation and maintenance only take into account the estimated number of staff needed, excluding surplus staff. The salaries for the staff at efficient staffing levels are set 60% higher than the current salaries, based on estimates for salary levels needed in order to attract and motivate skilled staff. No shadow pricing for energy costs was undertaken. A more detailed description of this methodology can be found in the sections on water and sanitation below.
The costs of institutional strengthening (about US$4 million) for the whole Beka'a Region have not been included in the project costs in the base case. Since the population in the project area accounts for about 25% of the population of the Beka'a Region, the cost share corresponding to the project area is estimated at US$1 million for both water and sanitation.
2. Spatial Scope of the Analysis, Population Estimates and Service Coverage The economic analysis covers only the Baa'lbeck/Nabi-Chit area (BNC), because this is the area in which investments are supported by the project. The financial analysis covers the whole Northern Beka'a, since this is the service area of the BHWIA. Economic analysis thus covers an area with about 54% of the population of the area covered in financial analysis (see Table 2).
The reliability of projections of volumes of water used and discharged depends on the degree of accuracy in estimating the size of the population living in the project area. The engineering study, conducted for this project by the consultant, has provided an estimate of 245,875 for the year 2000, based on extrapolations of estimates available in a previous study for the year 1995. This figure turns out to be unusually high when compared to two other estimates, the first based on a 1997 national survey on living conditions and the second on the nunber of subscribers expected under the new project. In the national survey the total population of the Beka'a in 1997 was estimated at 539,448 inhabitants . Based on population shares in each Caza used for a national survey by the Ministry of Social Affairs, CDR estimates the population of the Northern Beka'a for the same year at about 252,000, including 202,000 in
' Republique Libanaise: Etudes Statistiques No. 9, "Conditions de Vie des menages en 1997", February 1998, p. 19. The total population for Lebanon given in the report quoted above is 4.05 million for 1997.
41 the Caza of Ba'albeck and 50,000 in the Caza of Hermel. Table I shows the estimates for 1997 and for 2000, assuming an annual growth rate of 2%.
Table 1: Estimated Population in the Beka'a
1997 2000 Caza of Ba'albeck 202,000 214,000 Caza of Hermel 50,000 53,000 Sub-Total Northern Beka 'a 252,000 267,000 Southern Beka 'a 287,000 305,000 Total Beka'a 539,000 572,000
The Caza of Ba'albeck is larger than the project area (see map attached). In particular the villages located in the West and North of Ba'albeck are part of the Caza of Ba'albeck, but not of the project area. No separate estimate for these villages is available. Accurate estimates are made more difficult by considerable seasonal migration between the city of Ba'albeck and some villages, as well as by substantial double residency in Ba'albeck city and villages. The estimate is based on the number of total subscribers expected to be served in the project area. According to the engineering study, water supply coverage will be universal after the project, with a total of 24,000 subscribers. There is considerable disagreement about the average size of a household in the project area. According to the 1997 household survey carried out by the Ministry of Social Affairs, the average household size in the project area is 5.2. Other estimates give a household size of up to eight. An intermediate size of six is assumed in the present analysis. Table 2 summarizes the estimates of the population in the service area of BHWIA, including the project area of the BNC.
Table 2: Estimated Population for the Service Area of the BHWIA in 2000
l______| Share (%/.) Ba'albeckWNabi Chit 144,000 54 North+West Caza Ba'albeck 70,000 26 Caza Hermel 53,000 20 Total 267,000 100
3. Water Supply With regard to water there are two categories of households in the project area, the households which are connected to the old system and those that are not yet connected and get their water supply either from private vendors or through other means. There are roughly 10,000 subscribers of the first category and 14,000 households of the second. Coverage with piped water supply in the project area is expected to increase from a proportion of 38% to nearly universal coverage. Under the old system connected households are supposed to be provided one cubic meter of potable water a day at an annual cost of LL135,000 (US$90). However, given the intermittence of water supply, they get in fact no more than a third of that quantity, or approximately 55 liter per capita per day, which means that they are billed expensively for the water they actually buy from the water authority (at the implicit tariff of US$0.75 per cubic meter)2. As for non-connected households, estimates indicate that they consume much less water (34 liter per capita per day), sometimes of poorer quality, and incur even higher costs than those connected. It is estimated that water use is costing them, in terms of disbursement to vendors or alternatively in terms of their own time and effort to get the water, about US$2.5 per cubic meter.
2 Not all subscribers actually pay their bills, one main reason being the unreliability of promised water supply. However, for those who pay the cost of a cubic meter is US$0.75.
42 Overall, water consumption in this area is very low by comparison with levels observed in other countries with similar income levels. It is against this background that the new system is economically evaluated. When completed, this system will be able to serve by the year 2005 a total of about 24,000 subscribers. Mobilized water resources will enable the population of the BNC region to get sufficient supply until at least the year 2015.
Each household will use a volume of water that will depend on his income and on the price that he will be charged. If only operating and maintenance costs are recovered (recovery of capital costs is deferred to a later future), the average tariff is estimated, in real terms, at about US$0.55 per cubic meter. This tariff is lower than the effective price currently charged by the water authority or by private vendors. The advantage of the new network will be a steady supply that will be available to almost the whole population living in the project area. It is projected that households will not be charged the full O&M costs in the first year of the project, but only about US$0.4 per cubic meter. At this price, it is estimated that they will use approximately 100 liter per capita per day (an average of all use in the project area), which is significantly higher than the current volume, both for connected households (55 UIc/d) and non- connected ones (34 IVc/d). The quantity used would decline when the price is increased to US$0.55 per cubic meter, but it is expected to rise again at 1% per year due to per capita income growth. The average quantity thus projected over the time horizon of the analysis (2001-2023) will be 100 liter per capita per day. Based on these estimates the average water bill will initially remain roughly the same for the households connected under the old system at US$0.4 per cubic meter. It will increase after the tariff is increased to US$0.55 per cubic meter. For non-connected households, it is estimated to be only 45% of the costs that they used to incur if the tariff is set at US$0.4 per cubic meter (65% of previous costs after the tariff increase). The benefits that the additional quantities of water will provide to both categories of households, particularly to those not yet connected, will exceed their cost. By the year 2005 estimated gross incremental economic benefits will be US$3.1 million for newly connected households and US$0.6 million for the already subscribed, which yields a total amount of benefits of US$3.7 million. This amount is expected to grow over the lifetime of the project (taken to be 22 years) due to the projected increase in the standard of living and to population growth. Figure-I below illustrates the methodology used in estimating these benefits for households already connected to the network. The benefits for new subscribers are estimated using the same methodology.
The alternative to the project would be the continuation of the existing situation with the bulk of the population remaining outside of the system and provided with very little water while those who have been lucky to be connected under the old system will suffer from intermittence of supply. Even this system will be run down and some additional investment, estimated at US$10 million in year 2006, will have to be carried out. Thus, if the new project is not implemented, not only the benefits of the new system would be foregone but the existing flows of services would not be sustainable unless some replacement investment is done in the near future. Taking all these factors into account the water component of the overall project yields a rate of return of about 90/o. This includes the investments in main lines and wells under ERRP, totaling US$30 million. The main reasons for the relatively low rate of return are: (i) the long delay in the completion of service connections, of which the last ones are expected to be completed only six years after the first investments were undertaken; and (ii) the relatively high investment cost of US$1,700 per subscriber (US$280 per capita), most of which has already been incurred under the ERRP. If the costs in the wells, mains and the distribution network (US$30 million) are regarded as sunk costs, as they should be, and all the benefits are attributed to the new investments envisaged under the proposed project, which are mainly the house connections (about US$13 million), the economic return on the new project rises to almost 70%, which shows that the water supply component of the project is largely justified on economic grounds.
43 A standard set of sensitivity analyses was not undertaken, since the rate of return is very robust when the investments already undertaken are considered as sunk costs. The attached tables A5-1-3 and A5-7 and A-5-8 show the economic cost and benefit streams for the water component with the project, without the project, the differences between the two situations, and a summary of the parameters used. 4. Sanitation Analysis is based on a comparison between the situation with a centralized sanitation system and a situation without such as system, but with increased water flows. The sewerage system will only cover the city of Ba'albeck itself and the two small neighboring villages of Dourris and Iaat. During the project, 12,500 sewerage connections will be laid, increasing the total number of sewerage connections to 15,500. The other villages of the Northern Beka'a are expected to continue to rely on on-site sanitation systems, some of which may be improved outside the scope of the project from cesspits to septic tanks, in order to better deal with increased water flows. The installation of the sewerage system in Ba'albeck city is justified on the basis of the following: (i) some on-site sanitation systems may not be able to properly deal with the expected increased water flows, thus leading to cesspit or septic tank overflows, having a negative impact on amenity and public health; unlike in less densely populated areas it is not possible in Ba'albeck city to build additional septic tanks for lack of space; (ii) some houses currently discharge raw sewerage into open canals, posing a public health risk; and (iii) there may be negative environmnental impacts on groundwater quality, especially concerning nitrates, although no data are available on the level of contamination. However, some bacteriological contamination was found in wells serving Ba'albeck, and this may be due to seepage from on-site sanitation systems that will be replaced under the project. Analysts have used various approaches to assess benefits that may new sewage networks may procure. One approach is to estimate the increase in property value that would result from improvements in the environment. A second approach is to estimate the effects on health in terms of the cost of medical care and time of work lost because of the diseases that may have been caused by the current system of wastewater discharge. There is of course some overlap between these two approaches since property value depends, among other factors, on the quality and salubrity of both the property itself and its surroundings. Neither of these two methods can be applied here because required data are not available. A third approach, which is used to evaluate this project, is to assess the increase in households' welfare resulting from the project, based on estimates of the quantities of water used, of the costs of wastewater discharge under the current system without the project and under the project and on assumptions concerning the demand for sanitation services in the with and without project scenarios. Figure-2 shows how this methodology is applied. The initial demand curve for sanitation services is dd (assumed to be linear). Without the project the situation is described by on-site sanitation at an estimated cost of US$0.5 per cubic meter. The quantity of water discharged is proportional to that of fresh water used, representing about 80% of the latter. This quantity has been estimated at about 96 cum per household per year (80% of 120 cum of fresh water)for the households that are currently subscribed to the existing water network. The value of welfare derived form these sanitation services, which is approximated by the area ABCO, is estimated at about US$60. With the new project there is an outward shift in the demand curve for sanitation services, from dd to d'd', since the amenity benefits of sewerage are superior to those of on-site sanitation. The cost of sanitation declines form US$0.55 to $0.30 per cum and the quantity of water discharged in the network will increase to approximately 176 cum (80% of the 220 cum estimated volume of fresh water used per household). The value of welfare, measured with respect to the new demand curve, d'd', is equal to the area A'B'C'0 which is estimated at about an average of US$141 for each household. The net welfare change due to the project is measured by the difference between the levels of welfare for sanitation with and without the project, estimated at about US$81 per household.
44 A second type of benefit of the project is the reuse of treated water in irrigation. The construction of the Ba'albeck wastewater treatment plant is necessitated by the increase of sewerage flows from currently 0.3 MCM / year to about 3.2 MCM / year in 2010. The untreated wastewater is currently being reused during the summer months for irrigation of about 20 hectares of fruit and vegetable gardens in the city of Ba'albeck. This type of reuse poses health risks. Due to lack of land it will not be possible to treat or reuse the increased wastewater flows in the same location. Thus the wastewater treatment plant has been built further to the west of the city. Part of the treated effluent will be reused in agriculture during the summer irrigation season mainly to irrigate cereals and sugar beet. According to EA estimates, the irrigated area may be 225 hectares. When water is available in the irrigation ditch reclaimed water is expected to be blended with freshwater, thus allowing the irrigation of a somewhat larger area with blended water. However, some farmers may substitute reclaimed water for the use of groundwater, which is overexploited in the area near the treatment plant. In that case, the irrigated area may be less than estimated. Reuse has not been integrated into the sanitation scheme during the planning stage, but the design has been modified to take reuse concerns into account (see the environmental assessment). Total quantifiable benefits in 2005 are estimated at US$1.3 million, including: (i) US$0.5 million in net benefits for agriculture due to the increased quantity of treated wastewater available for irrigation (consisting of US$0.6 million in benefits for farmers downstream of the treatment plant and US$0.1million of potential losses for farmers that currently irrigate with treated wastewater), using a value of US$0.4 per cubic meter of water substituted and assuming that 50°/o of the quantity available is reused; and (ii) US$0.8 million in benefits from improved services for newly connected users. No benefits from the reuse of sludge in agriculture have been included, since it is not proven that the quality of the sludge delivered by the treatment plants will be accepted by farmers and that they will be ready to pay the cost of transporting sludge to their fields. Likewise, no costs for transporting sludge to fields or - alternatively - for the disposal of sludge in landfills have been included. The investment in sanitation during the project is estimated at US$24.6 million, including US$16.2 million for sewerage network, US$6.5 million for wastewater treatment (ERRP financing), US$1.6 million for investments to be undertaken as part of the Environmental Management Plan (EMP), and US$0.3 million for land expropriation. The costs of tertiary treatment by sand filters (US$0.7 million), which may or may not have to be incurred based on whether unacceptable pathogen levels will be present in the reclaimed water, and the costs of capacity building, public awareness and monitoring as part of the EMP (US$0.4 million) are not included in the economic analysis. No environmental costs have been included, since the EA has shown that the water availability in the source area is sufficient and that no negative environmental and health impacts are to be expected from the reuse of reclaimed water, if all measures recommended by the EMP are implemented. Based on these benefits and costs, the rate of return is estimated at approximately 4%. If the investments in the wastewater treatment plant under the ERRP (US$6.5 million) are excluded as sunk costs, the rate of return increases to about 8%. A sensitivity analysis was done based on the case under which the treatment plant is considered as sunk cost and non-quantifiable benefits are not included. A 10%/o decline in benefits leads to a decline in the rate of return from 8% to 7%, while a 10% increase in investment costs leads to a decline to 6.5%. The attached tables A5-4-6 and A-5-9 show the economic cost and benefit streams for the sanitation component with the project, without the project, and the differences between the two situations, as well as a summary of the parameters used.
These rates may be low but they underestimate the true return because the expected environmental and health benefits, many of which are considered externalities, are larger than what could be captured by shifts in the demand schedule of sanitation services. They should be considered as minimum estimates of the rate of return to the sewage component of the project. The end to practices such as the emptying of tanker trucks in unsuitable locations, the discharge of raw sewerage into open canals, the overflow of on- site sanitation systems, the use of untreated sewerage for irrigation, and the risk posed to groundwater resources through seepage from cesspits, these are all important benefits that should yield higher economic returns than those which have been quantified and provide justification for the project.
45 p
ALi
Po-0.7S
pi-o.5s
______Q
(120) (220)
Figure 1- Economic Beneflts of the Water Component of the Project (Benefits to Current Subscribers)
Without the project current subscribers are provided 120 cum per year at the cost of US$0.75 per cum. The resulting value of welfare is measured by the area ABCO.
With the project subscribers are provided 220 cum per year at an estirated cost of US$0.55 per cum. Welfare increases to the area AB'C'O.
The difference between the two areas (BB'C'C) measures the increase in welfare that will be generated by the project. The same methodology is also applied to the household category of new subscribers.
46 p
A' d'd'A'\ b
° Ic \ c - Q i 96) N(1176
Figure-2- Estimates for households' willingness to pay for improved sanitation in the BNC area
- The initial demand curve for sanitation services is dd, the cost of on-site sanitation is US$0.55 and the quantity of water discharged per household is 96 cum (80% of 120 cum of fresh water). The welfare derived from these services is estimated by the area ABCO.
- The new demand curve with the project is d'd', the cost charged to users is US$0.3 and the quantity of water discharged in the network is 176 cum (800/o of 220 cum of fresh water). The value of welfare rises to the area A'B'C'O.
- The difference between the two areas measures the increase in welfare due to the project.
47 ThsA51-EconwMic Analysis of Raalbeck Prelect Water SuecclyWithout thmProlec
Yeaw 1909 2000 2001 2002 2003 2004 2005 2006 2007 2008 2000 2010 Nottse Connections andWater tse Group A. Currant Subsc,bers SubscrIbers 9838 0897 10095 10095 10095 10095 10095 10297 10503 10713 10927 11146 PoputatbonC;onnerted 59028 59382 60670 60570 80570 60570 80570 81782 83018 84278 85582 88878 Phasingof NewSupply 0 0 0 0 0 0 0 0 0 Ouanlty (cum/dyear/subscriber) 120 120 120 121.2 122.4 123.8 124.9 M26A 127.4 128.7 129.9 131.2 Ouattiy (cmlVday) 3234.4 3253.8 3318.9 3352.1 3385.8 3419.5 3453.7 3558.0 3665.5 3776.1 3890.1 4007.7 QurantityfUncd) 64.5 94.8 54.8 55.3 55.9 56,5 57.0 57.6 58.2 56.7 59.3 59.9 Ouanlty (MCMI5r 1.2 1.2 1.2 1.2 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.5 Tkfl4tg 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Benefits(Us5m/vywa Group B: New SubscrIbers Potential StubsolbrerIn Group 8 0.0 0.0 0.0 0.0 0.0 0.0 0,0 0.0 0.0 0.0 0.0 0.0 Sutzscrber 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Guantty (cunVyurftlusehrold)fromnvendlors 75.0 75.2 75.0 75.8 76.5 77.3 78.0 78.8 79.6 80.4 81.2 82.0 Quantity (cumday) fron vendor 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TotalBenefits (USSm) Groups Aend B: TOtWWatarUse MCNyWar. Ind. Venors 1.2 1.2 1.2 1.2 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.5 PlYSlCalftoses (esftiMed atS%ofEUFW) 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 Total Water Pumped (MCMIyear) 0.0 0.0 -0.1I -0.1I -0.1I -0.1I -0.1I 0.1 0.1 -0.2 -0.2 -0.2 water (USSm) 0.0 0.0 0.0 0.0 10.0 0.0 0.0 0.0 0.0 New Subscribers due to pop.growth (numberfyear') 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1 Total Investinenl Costa(USSm. Ain.) 0.0 0.0 0.0 0.0 10.1 0.1 0.1 0.1 0.11 Totalinvestment Costs (US$m.Econ.) 0.0 0.0 0.0 0.0 8.5 0.1 0.11 0.1 0.1 SalarIesand Benefits (Ecmonorrc) 0.0 0.0 0.0 0.0 10.1 10.1 10.2 10.2 10.3 EnergyUse (kwehmorion) 0.0 0.0 0.0 0.0 0.3 0.3 0.3 0.3 0.3 EnergyCost (USSms) 0.0 0.0 0.0 0.0 9.7 9.3 9.0 8.8 8.3 Clienbats (USSMr) 0.0 0.0 0.0 0.0 8.11 7.9 7.6 7.3 7.0 NoewSubsolbesa dueto pop.gbowrfi (number/year) 0.0 0.0 0.0 0.0 202.0 206.0 210.0 214.0 219.0 TotlatSub,scrlr 6638.0 6979.0 10095.0 10995.0 110095.0 10095.0 10095.0 10297.0 10503.0 10713.0 10927.0 11146.0 0&M Costs (USSMr) staff 29.5 20.7 30.3 30.3 30.3 30.3 30.3 30.9 31.5 32.1 32.8 33.4 SalaIes andBnefits (Financial) 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3 Salai andBeneit (Econortc) 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Energ Use (kwhOmElon) 0.0 0.9 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 .0.2 -0.2 -0.2 -0.2 Erewy Cost(USSm) 0.0 0.D 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Cotntlcats 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TotalOperatin Costs 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Malttenanos 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.2 0.2 0.2 CenealMExpenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total UtiIty O&M Coals 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.4 0.4 0.4 0.4 0.4 0&M Costs ofWater Dstitct(USS/cum bl9e) 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.3 0.3 0.3 0.3 0.3 Non-UOtiycoats WWateSuppllby Vendors(MCMIOr 1.1 1.1 1.1 1.2 11.2 1.2 1.3 1.3 1.3 1.4 1.4 1.5 OAMCosts of vendors(USS m. OinancIal 2.8 2.8 2.8 2.9 3.0 3.1 3.2 3.3 3.4 3.5 3.8 3.7 ReplacemenCost of Root Turks (eacnA&fin.) 0.0 0.0 0.0 0.0 0.0 0.0 0.7 0.0 0.0 0.0 0.0 0.0 0&M Costs ofvendors(ULS$ m.econondc 1.4 1.4 1.4 1.4 11.5 1.5 1.6 1.6 1.7 1.7 1.8 11.8 Total Non-Utlity Costs(eownomrlc) 1.4 1.4 1.4 1.4 1.5 1.5 2.3 1.6 1.7 1.7 1.8 1.:8 lTotal Costs (USSaM) 1.6 1.6 1.6 1.6 1.7 11.7 2.5 10.5 2.1 2.2 2.2 2.
48 Table .A.8.2 EconomnicAnalysis oflBa'albecl Prolect: Waftr SAZOOIyWith Me. Protect
Year ~~~~~ ~~~~~200 ~~~~~2001 ~~19992002 2003 2004 2005 200 2007 2000 2009 2010 House COEMUOSand Water Use Group A: Current SubscriIomS Subscribers 9.838 9,897 10095 10095 10095 10095 10095 10297 10503 10713 10927 11148 Population Connected 59028 5938 60570 60570 60570 60570 60570 61781 63017 64277 65563 66874 ClJBntltY (cumtyear/subscriber) 120 120 120 220 222 224 212 214 216 218 220 222 Quwntfty(cum/lday) 3234 3254 3319 6085 6145 0207 5854 6031 6213 8401 6594 6793 Quantity (V(cld) 55 55 55 100 101 102 97 98 99 100 101 102 Owantity (MCMiyr) 1.18 1.19 1.21 2.22 2.24 2.27 2.14 2.2 2.27 2.34 2.41 2.48 Timing 21% 57% 86% 100% 100% 100% 100% 100% 100% Group II: Now Subscriber Potential Subsorlbeis in Group B 14000 14000 14000 14000 14000 14000 14000 14260 14566 14857 15154 15457 New Subsaliotis (Year) 3000 5000 4000 2000 Subsonbers 3000 8000 12000 14000 14280 14566 14857 15154 16457 Population Connected 18000 48000 72000 54000 8568 87394 89141 90924 92743 Phasing of New Connectios 21% 57% 86% 100% 100% 100% 100% 100% 10 CQuantly (cum/dyearflhousehold).inct. vendors 75 75 75 220 222 224 212 214 216 218 220 222 Quantity (cumfday), inct. Vendors 2877 2877 2877 4088 6103 7789 8119 8384 8616 8877 9145 9421 Quantity (Ydcd),Ind. Vendors 34 34 34 48 73 93 97 95 99 100 101 102 Quantity (MCMJyr),inid. Vendors 1.05 1.06 1.05 1.49 2.23 2.54 2.96 3.05 3.15 3.24 3.34 3.44 Groups A and B: Total Water Use (MCM'year, Ind. Vendors 2.23 2.24 2.26 3.71 4.47 5.11 5.1 5.25 5.41 5.58 5.74 5.92 Water Use fomVendors (MCMIywar) 1.05 1.55 1.05 0.83 0.45 0.15 0 0 0 0 0 0 Water Use fomtNetwork (MCMWyear) 1.18 1.19 1.21 2.88 4.02 4.96 6.4 6.25 5.41 5.58 6.74 5.92 Physical Losse (estiffated at 50% of UFW) 25% 25% 25% 25% 20% 20% 20% 20% 20% 20% 20% 20% Total Water Pumped (MCMtyear) 1.57 1.58 1.62 3.84 5.03 6.2 6.38 6.57 6.77 6,97 7.18 7.4
Water (US$m) 10 10 7.7 2.44 4.07 3.26 1.63 0 0 0 0 0 Now Connectons due to pop. Growth (US$ni) 0 0 0 0 0 0 0 0.14 0.15 0.15 0.15 0.16 Total lnvesftwetCosts (US$mi,Fin.) 10 10 7.7 2.44 4.07 3.20 1.83 0.14 0.15 0.15 0.15 0.16 TotlatlnvestmetCosts (US$Fn.Eoon.) 8.42 8.42 6.48 2.06 3.43 2.74 1.37 0.12 0.12 0.13 0.13 0.13 New Subscribers dueto pop. growth (number/year) 0 0 0 0 482 492 501 511 522 Total Subscribers 9638 9897 10095 13095 18095 22095 24095 24677 25068 28870 26081 26603 O&M costs (US$M1) Salaries and Benerits(Economic) 0.22 0.22 0.23 0.29 0.41 0.5 0.54 0.55 0.86 0.55 0.89 0.6 Energy Use(kwh millon) 1.97 1.95 2.02 4.8 8.28 7.75 7.97 8.21 8.46 8.71 8.98 9.25 Energy Cost (USSnm) 0.17 0.17 0.17 0.41 0.53 0.66 0.68 0.7 0.72 0.74 0.76 0.79 Chemicals (US$mi) 0 0 0 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 Total Operaflng Costs (USSnt) 0.39 0.39 0.4 0.71 0.95 1.16 1.23 1.26 1.29 1.32 1.36 1.39 Maintenance (US$m1) 0.1 0.2 0.28 0.3 0.34 0.37 0.39 0.39 0.79 0.79 0.79 0.8 General Expenses (US$ln) 0.06 0.07 0.07 0.08 0.08 0.13 0.13 0.13 0.13 0.114 0.14 0.14 Service Contract (US$41) 0.95 0.95 0.95 0.95 0.97 1 1.02 1.86 Total Utiity OSMCosts (USSnM) 0.55 0.66 0.75 1.08 2.32 261 2.89 2.73 3aig 3.25 3.31 3.38 Niln-Utility Costs Water Supplled by Vendoi(MCMIyr) 1.13 1.13 1.13 0.9 0.83 0.23 0 0 0 0 0 0 Reptacatent Cost of Roof Tanks (econA&fin.) 0 0 0 0 0 0 0 0 0 0 0 0 O&M Costs ofvenldors (US$ li.economic) 1.41 1.41 1.41 1.13 0.66 0.28 0 0 0 0 0 0 Total Non.lIly Costs(e001`10mic) 1.41 1.41 1.41 1.13 0.68 0.28 0 0 0 0 0 0 'Total Coats(US$m4, Ecmomnid) 10.38 10.49 8.64 4.27 6.4 5.63 4.06 2.85 3.31 3.38 3.4 3.51
49 TaltIe,A.5.3 Economic Analysi of BlaealbecliPrjojd: kIncremeta Benefts anidCoats of the Wate Componenit
Year 100 2000 2001 280 2003 2004 26005 2008 2007 2008 2000 2010
Group A.,Currfen Subectibers Subsctiirbers 0 0 0 0 0 0 0 0 0 Populatin Corstcted 0 0 0 0 0 0 0 0 0 Phasing of NewSuipply 0.214 0.571 0.857 1.000 1.000 1.000 1.000 1.000 1.000 Quantt (cumtyearlsubacriber) 00.8 00.0 100.8 00.0 87.7 88.5 89.4 90.3 91.2 Quantty (cun-iday) 2732.5 2759.9 2787.5 2400.5 2473.0 2547.7 2024.0 2703.9 2785.5 Quantit(UlJd) 45.1 4568 48.0 39.8 40.0 40.4 40.8 41.2 41.7 Quanit (MCMiyr) 1.0 1.0 1.0 0.0 0.9 0.9 1.0 1.0 1.0 TIirrng 0.2 0.0 0.0 1.0 1.0 1.0 1.0 1.0 1.0 Beefits Group A (UJSmnbVa4:(1) 0.7 0.7 0.6 a.6 0.0 0.6 0.6 0.7 0.7 Group B: Now Subseabers Numberof Usiersin Grou B -28.0 -566.6 480.9 -1164.1 -1177.1 -1200.7 -1224.7 .1249.2 -1274.2 Subscrlbem 3000.0 8000.0 1200.0 14000.0 14280.0 14585.6 14868.0 15154.1 15457.1 Quanity (curn"yarlconmectin). Md.Veno~rs 144.3 145.7 147.1 133.8 135.0 130.3 137.7 120.0 140.4 QuWaniy(caxsiday). Ind. Vendors 1104.9 3049.9 4803.9 4878.4 5025.8 5177.5 5333.9 5495.0 5800.9 Quantity(Idco, lned.Vendors 13.8 37.7 57.4 81.0 81.8 82.2 82.9 83.5 84.1 Quantity (MCM/yr).Md. Vendoms 0.4 1.1 1.7 1.8 1.8 1.9 1.9 2.0 2.1 Benefit G-ou B(US$m): (2) 0.7 1.8 2.7 &.1 1.2 1.2 M. 3. 3. Beaefits Groups A andB (USfim):j3M)-1M42 1.3 3.4 33 3.7 3.8 3.8 30 4.0 4.1 Told water use (MCMtyea) IA4 2.1 2.7 2.7 2.7 2.8 2.9 3.0 3.1
Totldwater Pumpe (MCM/sem) 2.2 3A 45A 4.7 4.8 5.0 5.1 5.3 5A4
wow(USSM) ~~~~~~~1010 7.7 2.4 4.1 3.3 1.8 -10.0 0.0 0.0 0.0 0.0 New Cannecliom duieto pop. Grow8h (US$m) 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1 TotalrNvesbtmanCoest(USSmn.Fin.) 10 10 7.7 2.4 4.1 3.3 1.8 -9.9 0.1 0.1 0.1 0.1 Totld nvsalnernt Coals(UJSSm. EODn.) 8.4 8.41 8.5 2.1 3A4 2.7 IA -8.3 0.1 0.1 0.1 0.1 Aisnet (USSm.Fin) 10.0 20.0 27.7 30.11 34.2 37.5 39.1 29.2 29.3 20.4 20.4 29.5 Deprecalon (US$m,.Fin.,.over 30years) 0.3 0.7 0.9 1.0 1.1 12 1.3 1.0 1.0 1.0 1.0 1.0 ReskdudValue of Assets[USSms. Fin.) 9.7 19.0 25.8 272 30.1 322 32.5 21.5 20.5 19.8 18.6 17.0 Reskidal Vuie of Assets PSSm, Eoon.) 8. 18.0L 21.7 22.9 25.4 27.1 27.3 18.1 17.3 18.5 15.8 14.8 New Subscilbem duieIDpop. growth (nwnbertyser) 0.0 0.0 0.0 0.0 280.0 2056. 291.3 297.1 303.1 TOWdS..*aalbo 3000.0 8000.0 12000.0 14000.0 14280.0 14565.8 14858.9 15154.1 15457.1 Q8U Costs(tJSSrs) Staf 0.0 0.0 0.0 9.0 24.0 30.0 42.0 42.8 43,7 44.8 45.5 48.4 SdwleaandBeneflls(Firmcla!) 0.8 0.8 0.5 0.5 02 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Sawltes andBaeriels (ScorTnc) 0.1 02 0.3 0OA 0.4 0.4 0.4 0.4 0.4 Energy Use(kwh adIos) 2.8 4.2 5.7 5.9 6.0 62 &A 8.8 8.8 Enegy Cost 02 0O4 0.5 0.5 0.5 0.5 0.5 0.6 0.6 Chtanilcals 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Tota OpferaIn coals 0.3 0.8 0.8 0.9 0.9 0.9 0.9 1.0 1.0 Mnteance 0.3 0.3 0.4 0.4 0.2 0.8 0.6 0.6 0.0 GeneralExpenses 0.0 000.1 0.1 0.1 0.1 0.1 0.1 0.1 ServiceContract 0.0 0.9 0.9 0.9 0.9 1.0 1.0 1.0 1.0 ToldiUtilty 0814Coals 0.7 1.9 22 2.3 2.1 2.8 2.8 2.7 2.7 NMAOWUitCoast Water Suppliedby Vendors (MCM/yr) -0.3 -0.7 -1.0 .1.3 -1.3 -1.3 -IA4 -1.4 -1.5 0854 Coalsof vendors(UJS$ Sr.financIa) .08 -1.7 -2.5 .32 -3.3 -3.4 -3.5 -3.6 -37 ReptacserndnCostof RoofTanksa (eoa.llftn) 0.0 0.0 0.0 -0.7 0.0 0.0 0.0 0.0 0.0 085MColsb of vendors(US$ M. economic) -0.3 -0.8 -1.3 -1.6 -1.6 -1.7 -1.7 -1.8 -1.8 TOWaN"on-lt8t Coals(eownwmi) -0.3 -0.8 -1.3 -2.3 -1.6 -1.7 -1.7 -1.8 -1.8 T0tfom oe(sts041104 8.6 87 U24 45 LT7 1A -7.0 1.0 1.0 0.0 1.0 *Benaflta. .8.6~~~~~~~~~~~~448. 01-. G ± 1633± LO. 3.1
50 T111444- Economic Anatvs of da'aMbecProlet: S8nltBtn Wlout the Pr t
Year 2000 20301 2002 2003 2004 2005 2006 2007- 2008 2009 2010 Nous Co *cdnndVokdwo dW& Dbhadud GrouAk Cunent Subscrte Substbes 3000 3000 3000 3060 3121.2 3183.6 3247.3 3312.2 3378.5 3446.1 3515.0 Popubatn Connectod 18000 18000 18000 18360 18727.2 19101.7 19483.8 19873.5 20270.9 20676.3 21089.9 Phasing of New Supply Quanrity(cunfyeubscrber) 98 96 97.0 97.9 98.9 99.9 100.9 101.9 102.9 104.0 105.0 uantdty(cumIday) 789.0 789.0 796.9 821.0 845.8 871.3 897.7 924.8 962.7 981.5 1011.1 Ouantity (Vcdd) 43.8 43.8 44.3 44.7 45.2 45.6 46.1 46.5 47.0 47.5 47.9 Quantity (MCMtyr) 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 Bene (USIm/year) Group B: Now Subsculer to Sewe8g Numwyr of Users hIGrup B 12500.0 12500.0 12800.0 12750.0 13006.0 13265.1 13530.4 13801.0 14077.0 14356.6 14645.7 Subsaters 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 QuOtty(cumyear(=-usehold) 60.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Quantty (cunvday) 2054.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Quantlty(Vcd) 27.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Gmups A and 8: Quantty (MCMINr)seepage 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Tote WasAtewter g ad (MCMtyear) 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 WaterQuanatyRewsed( MCAyear) 0.1 0.1 0.1 0.1 0.2 02 0.2 02 0.2 0.2 0.2 senefitafromReuseInAgricufture(USSm) 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Toted InvetmetColsts(US$m,Fin.) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 New Connoa# due to pop. Growth (USSm) Total Investment Costs (USm, Fin.) Total Invment Costa (USm, Econ.) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Undepecated Assets (USSm. Fin.) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Depredation (USSm.Fin.. over 30 yeam) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Reidat Value of Assets (USStT,Fn.) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Resikat VakueofAssets (US$m, Eoon.) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 New Subascuteradue to pop. growh (numbrtyear) 80.0 61.2 62.4 63.7 64.9 88.2 67.6 88.9 TotalSubslbem 3000.0 3000.0 3000.0 3120.0 3182.4 3246.0 3311.0 3377.2 3444.7 3513.6 3583.9 O&M Costs (USSm) Staff 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Salres and Bnefts (FrJanca) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Salaes ad Benefits (EcownoIc) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Energy Cost (USSm) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Chwnicat (USSm) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TOtaOperatng Costs (USSm) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 tbb#ntnce (USSm) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 General Expenses(US$m) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Utity O&M Coats(US$m) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Non-Ut5ty Coats Sepic Tank Emptiqg (times/year) 4125.0 4125.0 4125.0 4207.6 4291.7 4377.5 4466.0 4554.3 4645.4 4738.3 4833.1 O&M Costs of saepictank svice (USS m, flnndal) 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.7 Cost ofNowSep6icTanks(US$m.econ.&fin.) 0.0 0.0 0.0 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 O&M Costs of septic tank service (USSm, economic) 0.4 0.4 0.4 0.4 0. 0.4 0.4 0.5 0.5 0.5 0.5 Total Nonm-ULtyCosts (economic) 0.4 0.4 0.4 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.8 Total Costs (USSm,Ecmonic) 0.4 0.4 0.4 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.8
51 Tabe-A.B.Eoonomlo antsif Basireck Proict. SanBattenWilh the Pfotec
Yewr 200 *00 2002 20OS 2004 2005 2000 2007 200 -2000 2010 Hsue Connecftonand oas.0 WaterOtectiaed GroupA. CunrentSubsrhr Subscribers 3000 3000 3000 3000 3121 3184 3247 3312 3378 34.48A 3515.0 POP84lsnCorstcted 1800 1800 18000 18380 18727 19102 18484 18873 20271 20878.3 21089.8 Plwstrgof NowSuppy Chantllty(Ofalfyesrlt ctrat80%Rebtm~ FIDW 88 80 90 176 177.8 179.5 188.3 171.0 172.7 174.5 17082 Osrfty (cseVda) 789.0 789.0 789.0 1475,5 1520.1 1588.0 1506.5 1552.0 1598.9 1641.2 1686.8 tusaf88(8C/M 43.8 43.8 43.8 80.4 81.2 82.0 77.3 78.1 78.9 79.7 80.5 aflRiy (0MILyl3 0.3 0.3 0.3 0.5 0.8 0.8 0.5 0.8 0.8 0.8 0.e OrOupB: NowSubact.rot to Somnea Morbor of Liner fIsGrot 6 12500 12500 12500 12750 1200 13285 13530 13801 14077 14359 14840 Subnosciers 0 3000 6000 1200D 12300 12806 12918 13238 12581 Quailt (aMYasteafouutnes) 80.0 178.0 177.8 179.5 189.3 171.0 172.7 174.5 170.2 OUn8lt (aorlday) 0.0 1448.6 292. 1 5902.8 5700.3 5908.7 6113.5 6328.8 8648.9 Qmwt88(OeM) 0.0 WAR 81.2 62.0 77.3 78.1 78.9 79.7 80.5 Qurtoy (MCM"' 0.9 2.2 2.3 2.4 2.3 2.4 2.4 2.5 2.8 GunItky CWyt) 0.0 0.5 1.1 2.2 2.1 2.2 2.2 2.3 2A 5epIc Tanks(MCMtyV 0.8 i.7 1.2 0.2 0.2 0.2 0.2 0.2 0.2 GroupsA 8408: TotalWastowatorter stedm(McmIyOO) 0.3 0.3 0.3 1.1 1.6 2.7 2.8 2.7 2.8 2.9 3.0 Clarftty Reused)EMXVyt)f50% of geneattd 0.1 0.1 0.1 0.5 0.8 1.4 1.3 IA4 I4 1.5 1.5 eeft fro*mReuse In Alcukxxe (US$m) 0.1 0.1 0.1 0.2 0.3 0.5 0.5 0.5 0.8 0.8 0.8 lOwavesintCosts (LhSo% FIn.) 6.5 4.3 4.3 4.3 4.3 0.0 0.0 0.0 0.0 0.0 NowCorwodlos fLinto pop, GOthwr(IS Totalinvestment Costs (WSnM Fin) InvosboratCosts (LWSo Eosn.) 5.5 3.0 3.6 3.6 3.8 0.0 0.0 0.0 5.0 0.0 xl.tepreciatoj oAsstsWtStm, FIn.) 8.5 10.6 15,A 19.4 23.7 23.7 23.7 23.7 23.7 23.7 Detsudlston (USSm.Finl., ovew 20 years) 0.2 OR4 0,5 0.6 0.8 0.8 0.8 0.8 0.8 9.81 RestojaVak,e of Assets (US$.S5 Fin.) 6.3 10.4 14. 18.8 22.9 22.6 22.9 22.9 22.9 22.9 riveysSlnwfCosas (USStt ftr NowCorrowdors 0.0 0.0 0.0 0.1 0.1 0.1 0.1 5.1 Totalltroosrwrl Costs(WOrn Econ.) 5.5 3.6 3.6 3.6 3.8 0.1 0.1 0.1 0.1 0.1 NowSdLsalbers dti topop, gswth (ntoot,tyer so 61 62 329 335 342 349 356 TOWaStbeal5r8x 3000 3000 3000 6120 9182 15248 15878 16254 lam3 17032 17432
SW.0 35.4 43.9 44.4 44.8 Sheis andBoneflt 0.3 0.3 0.3 0.3 Satsso 8r0 Beefits (Econeni) 0.2 0.3 0.3 0.3 Energ cost WOtoS) 0.1 0.1 0.2 0.2 0.2 0.2 0.3 0.3 Cftmofii (WUOM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TOWtOpetnr Costs(uJOns 0.1 0.2 0.3 0.3 0.5 0.8 0.6 0.6 Mintenltance(IS$m) 0.1 0.2 0.2 0.2 OR4 0.4 OR4 0.4 GenersEoporoe MalS) 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 SerAIceContor Sewrage (UJSSm) 0.4 0.4 OR4 O4 Servicecorts WWTP(LSSnO 02 0.2 0.2 0.2 TOtaLAhty 0804 costs (Us$"o 0.8 0.9 1.0 1.0 0.9 1.1 1.1 1.1 NOM-tiMtCost Septic Tar* Ean~*Ig Pners"re) 4125 4125 4125 3218 2312 417 406 394 382 370 358 08M CostsofSeptic ts* rltvlce (LaESnm8rowts 0.6 0.6 0.6 0.5 0.3 0.1 0.1 0.1 0.1 0.1 0.1 Costof NowSeiflC Toots (tBSo ecoRnAfr) 0.0 0.0 0.0 0,0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0&M Cosftofseptic taftservlcoWSnrkeconetmc) 0.4 OR4 0.4 0.3 0.2 0.5 0.0 0.0 0.0 0.00. TOtaNonIJI11y CoSts (economic) 0.4 OR4 OR4 0.3 0.2 0.0 0.0 0.0 0.0 0.0 :0.0 Tool Coests(US$M,Economitc) 0.4 8.8 4.0 4.7 4.7 4.7 1.0 1.0 1.1 1.1 1.1
52 year- 2001 2002 2002 2004 2005 2600 2007 2006 2008 2010
Giuip A. Cuwtw Subsc*wsu SLilsalbebs 0 0 0 0 0 0 0 0 PopiistnCo..te 0 0 0 0 0 0 0 0 Plos5t of NewSL4pt 0 0 0 0 0 0 0 0 Orur6t (curYVyearlsstsalber) 78.1 76.9 70.6 68.4 60.1 89.8 70.5 71.2 Q-or45 (-sIday) 954.5 674.3 604.6 608.9 627.2 646.2 665.7 695.8 Qumtl5y(llcJd) 35.6 38.0 36.4 31.2 31.6 31.9 32-2 32.5 Qua"8t (Mc04) 0.2 0.2 0.3 0.2 0.2 0.2 0.2 0.3
Orsup B: NewSubseuseu to Sewesop NulTewof UsersIn Gmzot 6 0 0 0 0 0 0 0 0 Ssttsatbes 3000 600 12000 12300 12600 12916 13236 135e1 Osoft4y(mcNtyr) 0.5 1.1 2.2 2.1 2.2 2.2 2.3 2.4 GmsLpsA ard B: TotalWastewater severed (MCMIyesr) 0.6 1.3 2.4 2.3 2.4 2.5 2.6 2.6 krcrwfutol WattareBeneThs frcsr Sutssaltefs WTP(UJSS0m:(I) 0.2 0.9 1.0 1.0 1.2 1.3 1.2 1.2 ksssrflss Oewfts fr-e ReuseIn Aorlcrlur (tJSSm)(2) 0.2 0.3 0.9 0.5 6.5 0.5 0.5 0.5 Benerltt(USSen) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TotalBlufttl (USSms) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Totallrwsstnurg Costs (USSm. FIn) 6.5 4.3 4.3 4.3 4.3 0.1 0.1 0.1 0.1 0.1 NewConwaortsr dLte tD pop.Growth (USSrn) 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TotalInvesSise CoSta (USSes.FIt) 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.0 Totaltnvesin-w Costs (USSin.Ecros) 5.5 3.6 3.8 3.6 3.6 0.1 0.1 0.1 0.1 0.1 UrntepetedoAsset (U.S$nmFIta) 6.5 10.6 15.1 19.4 23.7 23.7 23.7 23.7 23.7 23.7 D3epreciaton(USSnff FMm, over 30 yesrs) 0.2 0.4 0.5 0.6 0.8 0.6 0.6 0.8 0.8 0.8 Reos"eVakn of Assets(USSrn, Fin) 6.3 10.4 14.6 18.8 22.9 22.9 22.0 22.9 22.9 22.9 NewStirseibeSs dLm tD POP. geswth (rn.erteyes) 0 0 0 265 271 276 282 287 TotalSntrscgbers 3000 6000 12000 12505 12877 13194 13518 13868
Staff 0.0 0.0 0.0 0.0 0.0 0.0 35.4 43.9 44.4 44.8 S4wes ardtBeuflts (Fbrsrds 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.3 0.3 Sa1os ard Beroffts(EcoriDrFc) 0.0 0.0 0.0 0.0 0.2 0.3 0.3 0.3 Erseg Cost(USrni) 0.1 0.1 0.2 0.2 0.2 0.2 0.3 0.3 Chfsr4cab(USSnm) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Totd OpemraflgCosts (USSen) 0.1 0.2 0.3 0.3 0.5 0.6 0.6 0.6 mairteronce(US$m1) 0.1 0.2 0.2 0.2 0.4 0.4 0.4 0.4 GferursExpesse (US$mn) 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 SwAvi ConracstSewag (USSem) OR4 0.4 0.4 0.4 SowIo ConradWlWTP (USSm) 0.2 0.2 0.2 0.2 TotalLUshy OWM Costg (USSnm) 0.8 0.9 1.0 1.0 0.9 1.1 1.1 1I.1 Nos4Uty Costs SepocTard EnlIylg (tnwesIyar -98 -1900 -3960 -4059 -4160 -4263 -4368 -4475 OWMCosts of septicta-dr service (USSesi. ftvirsnO -0.1 -0.3 -0.6 .0.6 -0.6 -0.6 -0.7 -0.7 Costof NewSeptic Tafta (USSr.eeon&fIn) -0.3 .0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 OAJMCosts of septictart sevirrc(USS mn. eceranrO) -0.1 -0.2 -0.4 -0.4 404 -0.4 -0.4 -0.4 TotalNoWflts Costs(ewnomic) -0.3 405 0.07 .0.7 407 -0.7 -0.7 -0.7 TedaICoSSt(US$fl1.Ec6u1011*H) £115 la 4.1 .0 4LO 0.3 0.3 OA40. OA, ______E______4.5 4 6 47 -33 5 1.1 IA 1S A I
53 Table-A-5-7- Values of Parameters Used In the Economic Analysis of the Water ComPonent of the Proiect
Parameter Value Population Growth 2% Per capita Income Growth 1% Income Elasticity I Household Size 6 Labor Cost Conversion Factor 0.8 Share of Labor in Investment Costs 0.4 Exchange Rate Conversion Factor 1 Taxes and Duties 0.15 Cost per subscriber for new connection (US$) 300 Staff per 1000 subscribers (efficient level) 3 Average Salary and Benefits (US$/yr), current 7500 Average Salary and Benefits (US$/yr), economic 12000 Energy Price (US$/kwh) 0.085 Energy Use (kwh/cum) 1.25 Chlorine Cost (US$/cum) 0.0015 Physical Leakage (Initial; estimated at 50% of UFW) 0.25 Maintenance Costs/investment Costs 0.02 General Expenses/Operating Costs 10% Depreciation Period for Assests (Linear, in years) 30 Investment Costs (US$m) 11.4 Costs of Vendors (US$/cum) 2.5 Cost of Rooftank (US$/tank) 50 Number of households in group not initially connected 14000
54 TableA-548- Water Economic Benefits Estimates
Households with Connections in the Current Situation Implicit Tariff without the project (US$/cum) 0.75 Expected tariff with the project 0.55 Change in tariff -0.20
Water Use without (cum/hh/yr) 120 Water Use with (cum/hh/yr) 220 Incremental Water Use (cum/hh/yr) 100 Water Use without (Vc/d) 55.00 Water Use with (I/c/d) 100.00 Incremental Water Use (Vc/d) 45.00 Incremental Benefits per subscriber (In US$) 65 Average Water Bill (US$/hh/year) without 90 Average Water Bill (US$/hh/year) with 121 Change in Water Bill (US$/hh/year) -31
Households with new connections under the Prolect Price without (US$/cum) 2.5 Tariff with 0.55 Change in tarif -1.95 Water Use without (cum/hh/yr) 75 Water Use with (cum/hh/yr) 220 Incremental Water Use (cum/hh/yr) 145 Water Use without (Vc/d) 34.00 Water Use with (Uc/d) 100.00 Incremental Water Use (I/c/d) 66.00 Incremental Benefits per subscriber (In USS) 221.00 Water Costs (US$/hh/year) without 187.5 Water Bill (US$/hhlyear) with 121
55 Table-A-5-9- Values of Parameters and Economic Benefits of the Wastewater Component of the Project
Cost Components with the Prolect Operating costs Average Salary and Benefits (US$/year), current 7500 Share of Major Maintenance in Inv. 2% Sewerage StaffrOOO conn. 1.5 Electricity Cost(US$/cum) 0.088 Chemicals Cost(US$/cum) 0.011 Retum Flow Coefficient 80%
Total Investment Costs (US$ m) 23.7 Total Investment Costs under ERRP (US$ m) 6.5 Total Investment Costs under BWSP (US$m) 17.2 (Connection Cost (US$/conn.)) 250 General Parameters Population Growth Rate 2% Family Size 6 Septic Tank Emptying (times/year) 0.33 Septic Tank Emptying Costs (US$Itime) 150 Economic Price of Septic Tank Emptying 100 Cost of Septic Tank Construction (US$) 1000 Connection Rate (Share San. C. in Water C.) 30% Implicit Cost of Emptying of Septic Tanks (US$/cum) 0.5 Quantity of water discharged without the project (cum) 96 Quantity of water discharged with the project (cum) 176 Effects of the Proiect Proposed Sewerage Tariff (US$/cum) 0.3 Change in Tariff (US$/cum) 0.04375 Incremental Quantity (cum) 80 Incremental Benefits (USS/year/connection) 81.1 Benefits from Reuse In Agriculture (USS/cum) 0.4 Estimated Share of Wastewater Reused 0.5
56 Annex 5: Financial Summary
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Ba'albeck Hermel Water and Irrieation Authority
I. General
BHWIA is one of the three authorities servicing the area of the Beka'a, the other two being Zahle and Chamseen Water Authorities. In an effort to increase the efficiency of managing the water sector in the country, the Govermment has issued Water Law 221 and its amendments merging the 21 water authorities across the country into 4 geographical agencies. For the Beka'a, the new structure will merge the three authorities into one. The final structure of the merger has not been finalized but within the scope of this assessment we will present a snapshot of the financial status of the authorities during the past three years.
The financial performance of the three authorities during the previous years has been unsatisfactory. The key reasons for this status include:
- The present available water resources have been inadequate to supply the needs of all subscribers. However, if additional water resources are identified, the capacities of the available networks are limited and are incapable of servicing additional subscribers.
- The unavailability of continuous power supply has reduced the quantities available for distribution.
- Leakage of considerable volume of water due to the age of the present network and lack of O&M.
- The 17 years of war during which no maintenance or investments were done in the region for the water sector.
- Subscribers receiving limited water supply are seeking other expensive sources to provide water such as buying it from third parties. In turn, many subscribers are refusing to pay, for their water utility resulting in low collection rate by the authorities.
A summary of the collection rates for each of the three authorities and the expenditures and cash shortfall during the past three years is attached. This shortfall have created an accumulated payable accounts mainly to the power company, the National Social Security Fund and the Municipalities. All figures are extracted from unaudited financial statements provided by the authorities.
Upgrading the capacity of the BHWIA will allow efficient management of the new networks financed under the ERRP loan and will significantly improve collection rate.
II. Objective
The main objective of the financial analysis is to deternine the financial viability of the BHWIA by: (i) analyzing the O&M cost of the water supply system including the cost of introducing a Service Contract; (ii) determining the level of tariff needed to recover the O&M cost and the Service Contract fees; and (iii) determining the main risk factors and sensitivity of these factors to the overall future viability of the authority.
57 III. Methodology
To assess the viability of the project to generate enough revenues to cover the SC cost and the O&M of the BHWIA, a simplified revenue expenditure model was conducted and projections applied until year 2012. The model consisted of proposed tariff targets, estimated water demand forecasts, population served, the O&M and the ongoing BHWIA costs. We conducted a sensitivity analysis, using current prices, to determine the effect of the different assumptions on the financial viability of the project. The data used in our estimates is based on the operational and service targets discussed with the BHWIA, consultants and other sector professionals. However, limited information was provided with respect to the Yamouneh project and the Hermel WWTP which are financed by other donors.
IV. Assumptions
The main assumptions for preparing the financial projections are as follows:
Investment Cost. The Ministry of Energy and Water (MOEW) through CDR finances most of capital investments. Any cash surplus between the revenues and expenditures of the WA have to be transferred to the Ministry of Finance. The costs of this project as well as the investments financed under the ERRP loan do not appear in the BHWIA accounts.
Connectionfees. The project will finance all connection fees excluding the connection cost within the subscribers property which will be financed by the project and collected from subscribers over a period of two to three years. The latter is estimated at US$80/subscriber. The bulk of this connection fee will be collected during 2004.
Costs. The main costs considered include the cost of the SC, maintenance of the network and the on going salaries and administrative cost of the BHWIA.
Current andprojectedpopulation. Population growth is estimated at 2% per year.
Per Capita Water consumption. The consumption over the projected period is estimated at an average of 100 lI/d/c. This level was kept constant over the project life considering that the introduction of volumetric tariffs will be reflected in the population economical use of water.
Water billing. Non-metered customers are charged a flat fee, while metered customers are charged by volume of water consumed based on a proposed tariff structure to be introduced within the project life. It is expected that most connections will be metered by the end of the project. Collection rate, presently 35% will reach 60% once water delivery and service is improved.
Inflation. A uniform rate of 2.5% per year.
BHWL4 administrative costs. This will be based on retirement of 20% of BHWIA by the end of the project at a rate of 5% per year, with no new hiring to take place. TA in the TSU to assist in O&M and administration will be paid by the project.
Energy Cost. Assumed to be 1.25 kwh/cum at a cost of US$0.085/kwh.
Major maintenance. Calculated at 1% of capital cost during the project life and at 2% of capital cost adjusted as per the inflation rate thereafter.
58 Other assumptions. It is estimated that by year 2004, 23,000 subscribers would have been connected to the water network and 6,000 new subscribers connected to the sewer network. Depreciation is calculated at 50% for year 2002, and 75% for year 2003 and at 100% thereafter. The SC is to be effective starting year 2003.
The assumptions used for each scenario are summarized as follows:
Assumptions per scenario Base Scenario Water tariff at US$0.45 for the first 18 months of the project then increased to US$0.60 and adjusted to inflation rate each two years thereafter. Sanitation tariff introduced at US$0.25 then increased to US$0.32 and adjusted to inflation rate each two years, collection efficiency increases from 45% in year one to 60% by year three of the project for water and sanitation. Depreciation of assets over 30 years. Scenario two Water tariff increased by 10% starting year 2005 and by additional 10% by year 2007, collection efficiency increases to 75% by year 2006 and remains at this level thereafter. Sanitation tariff remains at the same levels as in the base scenario with a collection efficiency equals that of water. Depreciation of assets over 40 years. Scenario Three Water tariff is at US$0.45 until year 2006 and then increases to US$0.60 thereafter with no inflation adjustment, collection efficiency for water and wastewater at the same level as in the base scenario. Depreciation of assets over 40 years, sanitation tariff assumed at US$0.45 and starting year 2008 and over four years 20,000 additional new subscribers will be connected to the sewerage network. Scenario Four Same as base scenario except that the water and sanitation tariff are at the same level with a collection efficiency of 80% by year 2005. Depreciation of assets over 40 years.
V. Projections
The financial projections prepared for the project are built on assumptions stated in part TV above. Four scenarios have been developed. Details of these scenarios are found in the Project File, while graphs and the consolidated statements are attached. However, the summary of the finances, over the project life, related to the base scenario is presented in the table below.
Proiected Revenues and O&M Costs for BHWIA Under Base Scenario (US$ M)
2000 2001 2002 2003 2004 2005 2006 2007 2008 Revenues 0.59 0.6 1.1 2.5 4.5 4.3 4.3 4.5 4.8 O&M Costs including SC if where applicable 1.6 1.6 1.5 4.3 4.7 4.7 4.7 5.0 5.1 Surplus/Deficit before (1.01) (1) (0.4) (1.8) (0.2) (0.4) (0.3) (1) (1) depreciation Billing Efficiency 33% 35% 35% 45% 50% 60% 60% 60% 60% Tariff per cu.m. 0.75 * 0.75 * 0.45 0.45 0.60 0.60 0.60 0.60 0.60
* The flat rate of US$90 per subscriber per year is equivalent to US$0.75 per cubic meter at the actual consumption of about 120 cubic meter per year in the Ba'albeck/Nabi Chit area. In areas with good pressure and continuous supply within the BHWIA the consumption can be as high as 360 cubic meter, equivalent to a tariff of only US$0.25 per cubic meter.
59 Analysis of the different scenarios The Base Scenario: Assumes that by year 2004, collection efficiency increases to 50%/o and by year 2005 to 600/o, the average volumetric tariff starting year 2004 is estimated at US$0.60/cum for water and US$0.25 for sanitation and the system assets are depreciated over 30 years. The water net revenues of the BHWIA, before depreciation but after O&M and the SC are estimated to show a modest surplus starting year 2004 compared to an actual loss of US$1.025 million in 2000. This surplus will not be able to clear the accumulated deficits and pay for the main arrears of electricity, Social Security dues and reimburse the Municipalities taxes. Wastewater revenues during the project life and beyond year 2012 will not be able to generate any cash surplus. The water operations and the Government have to subsidize the wastewater for O&M. Consolidating the operations of the services the BHWIA will continue to need the support of the Government to finance the gap between collections and expenditures including the SC and major maintenance. The annual volumetric average water bill under this scenario will be about US$135 with an increase of US$45 over today's fixed charge while the sanitation bill will be for US$70.
Scenario 2: Assumes that the water rate increases by 10% starting year 2005 and by another 10% by year 2007 with a collection efficiency of 75% and depreciation base, for the system assets, of 40 years. All other variables of the base scenario remain unchanged. The projections of the water operations indicate that BHWIA will be able by year 2005 to generate a positive operational surplus and to pay all arrears carried forward and to cover the yearly depreciation expense by year 2008. The annual volumetric average consumer bill under this scenario will be about US$145 with an increase of US$55 over today's fixed charge while the sanitation bill will be US$70. However, wastewater income during the project life and beyond year 2012 will be constantly in deficit and the Government would have to subsidize the O&M as in the previous scenario. The overall performance of the WA including sanitation will show a modest surplus by year 2006 before depreciation.
Scenario 3: Assumes that the volumetric tariff for water is at US$0.45 while sanitation tariff is introduced at US$0.45/cum, the collection efficiency for water and sanitation increases to reach 60% by year 2005 and 20000 new subscribers will be added to the sanitation network starting year 2008 over a period of four years. All other variables of scenario 2 remains unchanged. The projections under this scenario reveals that the BHWIA will have a modest positive surplus, from the water operations, after O&M costs starting year 2007. The WA will not be able to pay all arrears carried forward by year 2012. In addition, the wastewater revenues during project life and beyond year 2012 will, as in the other scenarios, be at a deficit after depreciation. The Consolidated operations of the BHWIA will continue to need the support of the Government to finance the capital cost of the project. The average annual volumetric consumer bill under this scenario will be about US$99 or at the same present level. The wastewater annual bill will be for US$99.
Scenario 4: Assumes that the same tariff is charged for water and sanitation with a collection rate of 80% by year 2005. All other variables under base scenario remains unchanged except for the asset depreciation period. The projections indicate that the WA will be able to generate a surplus, from the water operations, after O&M and depreciation starting year 2005 and thereafter, but will be able to pay all arrears and generate a surplus by year 2007. While the wastewater revenues will continue to be in deficit and unable to cover O&M costs. The consolidated operations of the BHWIA will generate a surplus before depreciation. The water operations will cover the shortfall from the wastewater operations. This scenario, although follows the actual costs, may not be acceptable to the Government and consumers. The annual volumetric water and wastewater bills may represent more than 10% of the income for the poor. The average consumer bills, for water and wastewater, under this scenario will be about US$135 with an increase of US$45 over today's fixed charge for water and an increase of US$135 for the wastewater.
60 The following table shows the change in the BHWIA operational ratio including and excluding depreciation over the life of the project:
Operational 2002 2003 2004 2005 2006 2007 Ratio % Estimate Projected Projected Projected Projected Projected Including 192.75% 234.14% 150.23% 157.92% 155.480/c 166.57% Base depreciation Scenario Excluding 134.61% 171.93% 104.22% 109.89% 107.810/ 120.20%
deoreciation ______Including 178.22% 218.58% 138.73% 136.16% 111.44% 111.700/o Scenario 2 depreciation Excluding 134.61% 171.93% 104.22% 102.55% 83.69% 86.63%
depreciation ______depreciation 178.22% 208.79%/o 151.92% 165.83% 170.58% 151.06% Scenario 3 dExcluding 134.62% 164.23% 114.13% 124.90% 128.10% 117.16%
depreciation ______Including 178.22% 208.79% 128.94% 98.81% 94.87% 103.17%
Scenario 4 depreciaiondEprc iationg 135.66% __164.87% _ __ 97.26%_ ___I__ 74.50%/o 71.22% 80.56%
Analysis of the current financial situation of the BHWIA as well as the projections until year 2012 can be summarized as follows:
- The water operations would be viable and would generate surpluses to cover, over time, the O&M and contribute to capital expenditures, on condition that the Government will write-off the arrears carried forward by the BHWIA. - The wastewater operations will have structural deficits and will need to be subsidized by the government for both O&M and capital expenditures. - The surplus that may be generated from operations will be transferred to the MOF. - The above conclusions can be sustained if the proposed tariff structure and levels are implemented at least for the base scenario. During negotiations, financial projections and tariff proposals were discussed in detail with the Lebanese counterparts. The proposed tariff scheme is designed with the objective of recovering O&M costs of water and wastewater (before depreciation) by end of the project implementation.
The Recommended Tariff Policy and Structure
In view of the principle and objective of cost recovery discussed above, the following is proposed:
- Revenues should cover all O&M costs for water by the year 2007. Average tariffs will be initially set at less than O&M and gradually increased so as to reach full O&M cost recovery by 2007. Capital cost (depreciation) should be gradually added thereafter. For sanitation, revenues should cover two-thirds of O&M costs by the year 2007 and increased thereafter so as to reach full cost recovery in later years, whereas capital cost will continue to be mostly borne by national budget.
61 - Alternative options may be envisaged for the tariff structure: a volumetric linear tariff, a bloc- tariff structure, etc. Ideally, users should be charged the same efficiency price, which is the long-run marginal cost and low-income households should be subsidized up to a certain volume of water consumption. However, in the absence of an efficient and fair subsidy scheme, a progressive block tariff scheme, which is recommended here, would address the equity concern while helping to minimize inefficient use of water.
- Billing should be done jointly for both water and sanitation on the basis of the quantity of fresh water used, which is the practice found in most countries.
- Bills should consist of two components, a fixed component and a variable one that will depend on the quantity of water used. The fixed component should not be too high so as not to penalize low-income users and offset the distribution effect of the increasing block tariff structure.
- The within property line component of the cost of house connections (estimated at approximately US$80) should be charged to the user and paid in installments added to the quarterly water and sanitation bill.
The above conclusions can be sustained if the proposed tariff structure and levels are implemented at least for the base scenario. During negotiations, financial projections and tariff proposals were discussed in detail with the Lebanese counterparts. Although no conditionality is requested for the project due to its urgency, the MOEW has agreed, in principle, to consider the implementation of the above Bank's recommendation regarding tariffs - Annex 5(a).
62 Regional Tariffs Evolution des Tarifs des Abonnements d'Eau Potable
LEBANESE REPUBLIC: LB-BEKA'A WATER AND WASTEWATER PROJECT
Office 1996 1997 1998 1999 2000
Qobayat 100,000 100,000 134,100 134,100 160,100
Akkar 100,000 125,000 125,000 151,000 151,000
Deniy6 75,000 75,000 75,000 75,000 75,000
Becharre 65,000 65,000 65,000 65,000 65,000
Zghorta 141,000 141,000 141,000 141,000 141,000
Tripoli 132,000 132,000 132,000 132,000 165,000
Koura 120,000 120,000 120,000 150,000 150,000
Batroun 130,000 140,000 150,000 150,000 160,000
Jbeil 110,000 134,100 134,100 180,100 180,100
Kesrouan 160,000 160,000 160,000 160,000 198,000
Metn 127,000 152,800 180,600 210,100 231,100
Beyrouth 158,000 158,400 182,160 200,500 230,500
Ain El Delbe 110,000 132,000 132,000 165,000 165,000
Barouk 110,000 110,000 121,000 152,000 152,000
Saida 99,000 115,000 147,000 148,600 148,600
Nabeh El Tasseh 90,000 110,000 110,000 130,000 130,000
Tyr 99,000 121,000 121,000 121,000 143,000
Jabal Amel 99,000 99,000 130,000 130,100 130,100
Ba'albeck-Hermel 110,000 132,000 132,000 132,000 132,000
Zahle 110,000 110,000 130,000 130,000 130,000
Chamssin 110,000 110,000 110,000 132,000 132,000
N.B.: Les chiffres indiques sont en livres libanaises I dollar (US$1) = LL1507,5
63 Subscribers and Collection Data For Period Ending December 31, 1998-2000
LEBANESE REPUBLIC: LB-BEKA'A WATER AND WASTEWATER PROJECT
Water Authority Balbeck Hermel Zahle Chamseen 1998 1999 2000 1998 1999 2000 19 1999 2000
Number of Subscribers 18,205 18,456: 18,566 20,928 N/A N/A 15,301 15,570 15,612
Fixed Fee per Subscriber (USS) 90.00 90.00 90.00 87.00, 87.00' 87.00 73.00 88.00 88.00
Expected Revenue (USS) 1,638,469 1,661,077: 1,670,947 1,625,714: N/A N/A 1,116,949: 1,370,202: 1,373,851
Actual collections (USS) 568,796 649,231 552,342 590,611 N/A N/A 652,888 576,152 480,282
*/ of Collections 35%0 39% 33% 360/' N/A N/A 58%0/ 420/o 35%
For Zahle, during 1998 the sum of US$440,283 was collected from previous years dues in addition to the above figure.
Expenditures for Period Ending December 31
Water Authority _ Ba'albeck Hermel Zable Chamseen 1998 1999 2000 1998 1999 2000 1998 1999 2000 Expenditures us$ US$ US$ US$ US$ US$ US$ Salaries and benefits 1,353,000 1,531,000 1,549,026 811,000 N/A N/A 463,800 498,650 444,300 &M Expense 60,100 67,993 69,000 800,000 N/A N/A 324,100 350,000- 372,000 apital expenditure 902 728 15,806 59,000 N/A N/A 18,435 13,495 900 otal expenditures * 1,414,002 1,599,721 1,633,832 1,670,000 N/A N/A 806,335 862,145 817,200
* The shortfall between revenues and expenditures is shown as payable to the Power Cormpany, the municipality and the NSSF. NB: All figures extracted from budgeted statement of revenues and expenditures prepared by each authority. Certain figures were estimated for one year. 64 Base Scenario
- Surplus (deficit) after depreciation - Depreciation Surplus (deficit) befbre Depreciation -u- Wastewater Surplus (deficit) _ Water Surplus (deficit)
3,000,000 2,000,000 1,000,000
0 (1,000,000) l M (2,000,000) (3,000,000) (4,000,000) (5,000,000) WNOMP (6,000,000) Years
Scenario Two
x Surplus (deficit) after depreciation - Depreciation Surplus (deficit) before Depreciation --- Wastewater Surplus (deficit) + Water Surplus (deficit)
4,000,000
2,000,000
(0 120001 200 1 !E 002 s2003 2004 2005 - 2006 i07 120 (2,000,000)
(4,000,000)
(6,000,000) Years
65 Scenario Three
- Surplus (deficit) after depreciation - Depreciation Surplus (deficit) before Depreciation -- Wastewater Surplus (deficit) _ Water Surplus (deficit)
2,000,000 1,000,000
, (1,000,000) - e (2,000,000) : (3,000,000) (4,000,000) _A- (5,000,000) (6,000,000) Years
Scenario Four
. Surplus (deficit) after depreciation - Depreciation Surplus (deficit) before Depreciation --- Wastewater Surplus (deficit) _ Water Surplus (deficit)
8,000,000 6,000,000 4,000,000 2,000,000
(2,000,000) (4,000,000) (6,000,000) Years
66 LBANESE PREP(JUC eanibeck Water and W_stawate Pr0)88t Flsnrcat PrjedonsB: Biaewk &Hamel Watr a k4gxt00n A.O rttytw_$Weott War and Waw e (uss)
Esntt 10ne 10m 20D 2001 2002 2003 2004 2005 20 2007 200 2000 2010 2011 2012 nd An",$a, at EaS9ae Eat Esina9t Estm ate d P d P Pehd a rm d e d P* F d P P bRoM 2/1311007
Fm WaterS _lltm $ 678J042 N02,082 s 006593 s s40,00 s s1 17.008 s 2J72.184 S 4,205,338 s 3.721.491 $ 3.741.017 $ 3.817.010 s 4.105.578 s 4.180.102 s 4.480,320 s 4.57.579 S 4881.180 839,034 8500343 FPm W eW 0Sbsollmsem (E.s..am.) 147082 240,375 e0.720 e43,n34 esso011 711.158 761.05 783.412 Total Revenues S s7er42 S 02.s82 s 100,3 S 640s.6es S1117,000 s 2,520.000 s 4.41,713 S 4,2,5m.1 s 4,324,351 S 4.0,so,27 s 4,016.730 I 41,500.82 $ s.24s738 s 5..0 S .7211,0M22
1s.8315 Rral edtowerOpeawtor S 1,413,100 s 1.58.0023 s 1,82,000 $ 1,025,00 ss1.505000 s 1,511.0D s 1,5082520 s1.570,733 s 1.555,020 s 1.590,402 $ 1.e2s.312 S 1,0,770 $ 1.733.78 s 1.777,384 s 848,875 873,847 8890103 014.023 041 040 Re to aedtorel 0and nlonOp t . - . . . 744,00 700es 837,822 000,010 824.2E8 TotalCotffrornOpratoson s 1.413,100 s 1.50.903 s 1Si22.0D s 1s25,000 0 ,505,oo0 S 2.25500 s 2.3200 s 2.414.555 s 2.55.044 s 2.420.070 s 2.487.187 s 25u.1e s 2.s22.e2 s 2.892,3C0 S 2.772,014
Sotce r _6~ War N/A N/A WA WA N/A $1,102478 $1.0035679 $90903 S1,001.9190 o1,000.so 51025.004 01.051,633 51.077.924 01.1D4.872 $1,132.294 0297.749 W _0to0lf WA N/A WA WA N/A S17.2U4 S200.801 $205,0123 #20,333 #202,168 0209,746 0270,489 0202.401 0290.487 T _ea0ooPIF N/A N/A WA NWA N/A WA 401,721 0475,741 0476,671 s478.232 0490,294 $502,551 $515,115 s527,993 $541,193 Majo Makter u WSWer * * * * 30,000 3s0,0D 390.000 30.000 780.000 700,500 810,400 83,9075 800,074 882.498 440 022207 530.287 Was rW - - - - - 227000 227.000 227,000 2270W 4740W 405 050 4070W 510 TotatS. wco atmsctAn,alnmeca to s0 00 so s0 #2,077,732 #2,369,201 #2,N08,516 #2,371,923 $200.462 $3,071,373 03,148,157 3,222,801 03207,52 s5,0s2 Total Costs 1.413.100 1.50800 1.02Z,00W 102sx00 1.005.010 4,322,75 4,22401 4.703.071 4,72800n7 5,417,131 s,5se,s0 0,702,774 0,040,04 5,000.1130 0.102I2SS (803220) (441313) Cash Surplus (Defitt) after S. contract &Op. MaInt. (t2,00,000o (4S4A8) (08411) (1.025,407) 04312) (357.014) 11.512.722) (101.6 (430.6s0) (342.015) (910.505) (741.823) (701.042) (600.100) (11.2319.75) (11,91.80,14) 12(I2. ) (12.964.403) CumeillW Coht Oaph (0.0) olr S. ontradt Op. Matt. (2,8234458) (3,74000) K4.700.270 (5,7500580) (0,127,02) (7.0.225) (8.142,01) (0.572.873) (5.015.400) (0,125,003) (10,007A.16)
2,00,WO 200,00W Depreclation . . . . eso,oo 1,1750( 2,090,000 2,0000 2,0so,0oo2J0J00 200000 2 ,00 00000 (2.841.042) (2.000.100) (2.3.228) (2,031.31) SmpODUs(DeOteit) aftwr Depreclataon (1V,02 14) (3,280.222) (2.211.611) (2,520,0 (2,422.15) (.0WD,50D) (2.021.823) Cunvotative Surplus (Defictt after depreciation (01,027,O4) ($4,417,207) (t6.000.825) (00.218.705) (11.82.400) (814,652.905)(S17.484,8) (20.28670) (023.010.778)(020,7108002) (028.241.315)
67 LEBANESE REPUBUC Ba'absck Waler and Wast-ster Poed Fiualr P 0j.dons Baalbe4 S Hsnorl Wate &Irogaon Authodt tWs_)watrl Water and WastewAeu (US$)
Scenado Two
IEsgmatd 19e 10ow 2D00 2001 2002 2003 2004 2005 20o0 2007 2008 2009 2010 2011 2012 Anwars at Ead-ft EstimateF Es0500 E_aOl6 Pte1edW P c*d Plt d PloIeGled PMlcd PllKd Pnthcled Prtce cted Plec1d P ecd P d
Fen War Susets S 578.042 S Wa.502 S 590,593 $ 40.688 S 1,117,958 $ 2.372.184 S 4295.338 S 4,033.024 S 4,843.810 S 5.391,530 $ 5.545,935 S 5.91753 $S 039,725 S 6,440875 S 0.W5.285 Fnm Walewater Subsalb (Esotimale) - - - 147.825 240,375 830,720 804,158 0012e4 888.947 95X2083 979284 1,048,792 1.075.428
Total Revenues S 575.642 S 9292 $ 56.20 S d,5 S 1.117.908 S 2.20.009 S 4,541.713 S 4.602.744 S 5,047.978 S 822794 S 6,434.053 S 6,80.61 $ 7,010,909 S7,495,088 S 7.655.008
R_al to,aerOp wten S 1.413.10D $ 159893 $1.,2t000 S 1,825.000 $1,55,.000 1,51.000 S 1,598.520 $ 1.578,733 S 1,555.028 S 1,596,402 S 1,38.312 $ 1.680,770 S 1U733.789 S .777,34 $ 1831.565 Rola todwa10erater,d s0000o0 OponoSm - . 744.000 75,80 837,822 800,018 824265 848,875 873,847 889,193 514,23 941,048 Total Cost fron Operations S 1.413.100 S 1.588.993 $1.2.W S 1.525.000 S 1,505.000 S 2.255.00 S 2.3e4200 S Z414.555 $ 2.55.044 S 2420a675 S 2,487,187 $ 2.554.810 S 2.422.982 S 2.652.a2 S 2.772.614
Salce con00aa Water MA WA WA WA NA 81.193.478 $1.052,679 $999.98, 51.001,919 $1.605650 $15025 954 $1,081632 $51,077,924 $1,104,872 S1.132494 WallleWr MIA WA NIA NrA N/A $17.254 8268.001 $265,813 S206.3a3 252.18 52859.74 5276.489 85283,401 5250.487 8297.749 Tlentme Plao NWA WA WA WA WA WA 5481,721 5475.741 547N.671 8478.38 8480.294 8502,551 5515,115 8527.523 541.195
water - . . - - 30.0 380,060 590,600 39D.000 780.000 7998500 819.488 839,875 060,874 052,498 w5wew - - - . . 237.000 227-000 257000 227.000 474.000 4a55650 4978998 510.446 523207 53828. TotalS. conhact S mamlnatance So tOS 0 S0 S0 S2t077.732 $2.305.20 $2.308,516 $22371,923 82.998.452 3.071.373 82.148 157 53228.851 $3227.533 $3.255_
Total CostS 1.413.100 1.S995 3 1.=.0W0 1,525.085 1,505.000 4,332.7a2 4.7T33451 4.782.071 4,720,097 5,417,131 5,558,560 5,702,774 5,848,842 5.99908.0 8,102.835
Cash Surplus (Defctit) after S. conract &Op. &MNlnt. IXoo,o.00o) 8s458) (/0411) (1.025,4n7) (84,312) 2387.014) 11,012,723) (11.611) (1189.37) 021,011 835,682 878.322 1,156,042 1,109.148 1.495,820 1.492.553 Cuwultloe CahSurpts (Dfc) 008w5. contract Op. &Maini (.854.458) (3.740,869) (4,780270) (5,750,598) (8,137.02) (7=.85.25) (t.142M013) (0,281.340) (7.340,320) (6.504,666) (5,528.343) (4,401.501) (3202,355) (1.709,526) (203.074)
Depreciation * . . - 487soo 1,175.825 1,587.500 1.587,500 1,587,00 1,57,500 1,507.5o 1,567,500 1,597,500 1.867.s50 1,5817,50 Surp(us (DefcitQ after DeprecIaton (874,514) (2.988.348) (1.759.188) (1,869s27 (6,8.489) (731,8138) (001.177) (400.658) (398,254) (71,871) (74.047) Cunulattve Surplus (Deficit) after depreciation (0874,514) ($3,002.852) (.922050) (7.08.77) 7.9553.30) ($8,687.203) ($8,370,358) ($987798,38) (810,177.292) (810,2489,03) ($10,323.711
68 LEBANESEREPUBUC Ba'albeck Whter and aW_war Pojed Finarcall Proc4ona Ba'albeck &Hmnrol Vaher* In tisOnAmhority (Wastwat Watar nd VhW_War(US'S)
Scemalo Threo
Ea ed 1 1999 19m8 2000 2001 2002 2003 2004 2005 2006 2007 200s 2009 20,10 2011 2012 Raven ~~~~~~~~~~~~An-n.s al } Eb Em Esfirnme Es*, Proiechd Piroetd Pmhot Pbooid Pmj,d PrrXchd Prrs P-,bd Paewtd Projctd P whq
Frm WatWerSLsbes $ 578.n42 S e2.582 $ 600.503 S 0400008 $t117 980 S 2,372.154 S 3,7040038 S 2.942.000 5 z785,382 5 3.654,760 S 3,784,23 S 3.840.200 S 3,17.096 S 3,900.734 $ 4.077,353 Fom W aste Sr sbe (Esmate) - 2s0,035 443a475 MAO.660 204,a88 W0.=23 1.295.733 1j715 378 2.057.501 2.525.351 2.575.857
Total Revenues S s70,842 $ 98.582 $ 5986.s3 S 640.688 81117.0 S 2.608,2b 8 4,147.513 $3.M801 $ 38(,51 $ 4.023,002 S 5.M,872 $ s.550,586 S 5.975,195 II,22.035S $S0.6,188
Relartsowater Opeten $1,413.100 S 1588,993 S 1.22.0 S 14275400 $18,505,000 S 1.511.000 S 1.58.520 S 1578,733 S 1555,028 S 15904032 S 1538,312 S 100.770 S 1.733.789 $ 1.M.384 $ 1.83158 Retattdto Wastarteroard n8a8onOprons . - - 744,000 7656080 837,s82 8w0018 024,208 848,870 873.847 089.193 914.923 841.040 Totab Cost from Operafons S 1413.100 S 1,598,93 S 1.022000 $ I025.004 s 1.505o000 S z.255000 S 2,304,200 2.414.555 5 2.355.044 S 2,420,070 S 2487.187 $ 2 554,010 S 2.022,093 S 2,082,300 S 2.772,314
0.tvice r68onh Woter N/A A WA WA N/A $1,193,478 $1,003,070 $999.983 $1.00D.919 $1,000.900 $1,025.94 $1,051,833 $1,077,824 $1.104.872 $1,132,44 Wa55 r9 N/A N/A N/A N/A N/A $317,254 $208,801 s266.913 s2$033 $203,10 $2889.740 $278.489 $283.401 $285,487 $297,748 TnabnortPlatl N/A N/A N/A N/A A N/A 5481,721 $475.741 $47,0071 $478,338 $466,204 $502,551 5515,tI5 $527,983 5541.103 MalorMaltnanrc Water . . - . 330,00D 380,OD 380,000 390,000 780,000 798.500 019,488 039,875 000,974 802.408 Wast0roser - . . 237.000 237.000 237,000 237.000 474,000 485,950 497,990 510.440 523.207 530.207 Total coStra &maIrternamce = 0 so S050 5 7D2.077,732 s2388921 52,308.5s1 $2,371,023 $2,s98,402 53,071,373 $3,148,157 $32260891 5337,533 53.390,221
Total Costs 1.413.100 1.589 392 1.022,000 1,028,000 1,05,000 4,332,732 4.722,401 4,78071 4,720,987 5,417,131 5.5s0,880 5.702.774 5.049.843 5.899.839 0.102.02
Cash Surplus (Defcit) after S. contrsct &Op. &alnIL ($2,000,00)o W45)34l (90n.411) (1.0125.407) (984.312) (387,014) (1,094.483) (0598118) (9t53,41) (1.038,919) (793,450) (48,588) (15.188) 125,354 522.196 490,324 Cuulatatv CaSu SLPlas (Dfehl) aftr,S ontrmct S Op. &MaM. (2,B4458) (3,740.89) (4.786.278) (5.750,588) (6.137,802) (7,82,005) (8,417,953) (9,371.415) (18,408.331) (11,201,0) (11,097,2081 (11.849,8 (11.724,202) (11,82.006) (10.711.692)
Depreciation . * .* 407,50 1,1775,25 1,5675D00 1,507.10 1.507.500 17,5001,#157,500 1,007.500 1,587,500 1,587,840 1,57,500 Surplus (Deflct after D0p0( ta0n (T74,514) (5.870,.01I) 2183,381 (2.529901) (2.004,410) (2,340,9501 (2,053,0801 (1,719.681) (1.442.149) (1.045.2D4) (1.077,176) Cumubasve Surplus (Def(ctt) aftr depclafUon ($874,514) (53,744.M02) (55.897,910) (S8.411.YI2) ($11.023,M8 ($12,584,`17) ($15,447,405) ($17,167,062)(518.809.238) (19.854.543) (520.731,719)
69 LESAE RtEPUBUC 8~1.oO ,s0Ws Pro(4o Prm,&. P.0K0. B*Oibft* & .... s Ww, Irriga1ion Aotha1 fts00rtW)_t WWarms w01w0w (US$"
Scku0o Fowr
E00JItamd IM00 1000 20 20 2002 2003 204 2000 2000 2007 20 00 2000 2010 1t1 2012 Arma as at ESUMM EsrI00 eadwal 00000 PVE00n fronar P10(00.d rPbd- P011. Prdr 40 dP P,o400 P . P04.90ddd ftvftod PmIUd Rr ^~~~~~~~~~~~~~~~~~~~5t1211007
Mm WaterSusclbel S 57.042 S 602.582 S 595.593 S 040.6s0 $1.117.90 5 2.372,14 S 4.2.330 S 4,040.934 S 4.545,940 $ 5.047,050S ,420404 S 5540,302 S 5,909.403 S e.030,560 S 6.434,J7 f lmWaOle5tSbSCbm(EOstm ) - - . * 20000 501,300 1.576,050 1,66.0753 1.722.028 1,44.827 1.831124 2015.328 2.055s633 2.01,583
Total Revenues s 742 $ 02.S2 S 20.5059 SI 6400. S1117.94 S t2.03.209 I 4,t.0 3 S e,45.7534 S 00,4.701 S 60M123 $ 7,.232 $ 7,422.150 S 7,924,720 $ 0,084,1193 S .030,420
ReloWtowalrOpOwaeono $ 1,41M.100 S tSesS93 $ 1,=0220o0 1.25.0 St1505.X00 S 1,S11.000 S 1,598.520 $ 1.570,733 S 1.555.020 S 1.590.402 S 1,030,212 S 1,000,770 0 1,733.709 S 1,777,384 S 1,231.568 ROIOdGlw l ard sf1t0ooCnOome . . . . . 744,000 750060 037.022 800.50 824.268 a48.875 073.047 M-0.103 s14E23 041.040 Tolol Cost frm Operaions $1,413,100 $1,5s3,9a3 S 1i02.00 $ 1025.000 S 1.0,00 $ 2.255.000 S 2,384.20 $ 2.414.555 S Z355.044 S Z420870 $2487,187 S 2554,018 S 2.a22,982 S 2,002300 5 2.772.14
Wow N4A WA WA WA WA $1,1930478 $1,003.070 $0090, $1,001.90 $1,000,090 31,5550A4 1.0510633 51,507.024 $1.104.72 $1.132.404 Wasewater WA tA WA N/A WA $317,254 U520801 $2305.13 0260.333 s203,t10 5209.740 $278,4a0 52s3.401 $200,487 $207,740 TresDn51.4P03 NPA WA WA WA WA WA 5481,721 $475,741 $470,071 5478,336 $400,204 S202.501 0510.115 0527.002 5541,13 Mail Ml0de0 WsWer - - - - 330,000 380,000 3S0.000 390,000 7E0.000 799,0500 19,400 839.975 000,074 082,498 Waste e r - 237,an 237 237,00 2371000 414,00D 405A050 4749 0 510444 25207 5320267 7e0alS. -WoI iDlts oo0 -5 00S s0 30 52 077,732 S25_0201 !2.3L .514 52,371,023 s2,s0s,402 432071U73 $3.140,107 3,26.01 03,307,533 3,,390.221 06.182.35 Total Costb 1.41&100 1.598.903 1.032.000 1,a23,000 1.505,090 4,332,732 4.733.401 4.7ns.,7t 4.721,907 5.417.131 5,550.560 5.702,774 5.040,043 5,Oo,8
Cash SurplkUa (0cl4 a0fter S. contraictP Op. Loialnt. (02.000.000) (ta4.45se (00,4111) (1.025.407) (J.3121 (307,014) (1.004.480) 15332 1,003.0 1.001.4 1.3.021 1.715,072 1.719,332 2,074.080 2,000.3s4 2.473,504 CuOaII CashOSur1410 (DeSdt) a r56,S00itt0d0O0. ILMaho (2.034.450) (3,740.011) (4.10.216) (5.750,54) 10,313.02) (T,032.0S00 (7.070,20 (0.025.10) (4.127.431) (2,T74.430) (1,050,701) 000,574 2710.4s0 421,844 7.235,3s
DoprecotIton 407,500 1,175.035 1.507,500 1Sar.5100 1.507.sm0 1,007,500 1,507,500 1,57,500 1,55,50,1 1,57,5w0 1,507,500 Surplus (OeSeltitafter Depreclaton tnt ,514) (2,870.1188) (1.414,2a) 78.183 340,234 JM.4490) 148,inZ ,632g SaTt3s7 nss,s W6a,06s Cumulative Surplus (Oof(c)t after doprecltaon ($04,514) (3,744.0A2) (51510,00) (55,M702) (40,742.440) (04,958.907) (04.000.175) ($4,0550,03) ($4,149.,175 (03,030,723) (42.724,039)
70 Annex 5(a): Tariff Policy and Structure
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
The Objectives of Tariff Policy
There are three main objectives that need to be taken into account when designing a tariff policy for water and sanitation: efficiency, equity and cost recovery. Since water resources are scarce and their mobilization is costly, they need to be used efficiently. The levels of tariffs should therefore be such that users are encouraged not to waste these resources and to consume quantities that are commensurate with cost.
The first objective is the efficiency incentive that requires pricing water at its long-run marginal cost, i.e., at the additional cost required to increase water supply, including capital cost. Under this pricing scheme, no one will use any volume of water if it does not procure him a benefit that is at least as equal as the supply cost. Two measures of marginal cost may be used, the short-run marginal cost (SRMC) and the long-run marginal cost (LRMC). SRMC is more or less equal to the unit operating and maintenance cost (O&M cost) whereas LRMC includes, in addition to the latter cost, the cost of capital.
The second objective is that of equity. A unique tariff applied to all households and users may result in an excessive burden of the water and sanitation bill for low-income households. Theoretically, the latter's consumption can be subsidized through appropriate schemes. In Chile, for instance, low-income households, which are identified at the municipal level, receive subsidies proportionately to their water bill up to a certain volume and pay the full unique tariff for any consumption above that volume. Ideally, this is a first best policy to deal with both objectives. However, its efficient implementation requires a strong institutional capacity that is lacking in most developing countries.
The third objective is cost recovery. With tight budget constraints for the public sector, the provision of public utilities such as water and sanitation can be sustainable only if costs are recovered, at least in their operating and maintenance components. Otherwise, new facilities would easily fall in neglect and be quickly run down, leading to the recurrence of problems that have become all too familiar under the existing system.
The Existing Tariff System
As mentioned above, the Ba'albeck-Hermel Water Authority (BHWA) has been applying a flat fee equal to US$90 for the delivery of lcum per day to each subscriber. However, the existing system supplies water intermittently and actually delivers far less than the promised quantity, no more than a third of the latter. With the completion of investment under ERRP and the house connections planned under the envisaged new project, it is expected that water will be available on a continuous basis and that metering will allow to charge users according to quantities consumed.
It is important to stress that the current system does not serve any of the objectives mentioned above. It works against efficiency since the water bill is independent of the quantity used. The problem would be worse with the new network since it allows subscribers to access supply on a continuous basis. It does not serve equity since households are charged the same bill regardless of their income and their ability to pay. Finally, it does not allow to recover cost so as to ensure the sustainability of water supply, particularly if billing efficiency remains at its very current level (less than 35%).
71 Proposed Block Tariff Structure
This scheme is based on estimated O&M costs of US$0.55 and US$0.3 per cum respectively for water and wastewater and on some reasonable assumptions for distribution weights and for the distribution of water use across income brackets.
The scheme does not make the distinction between "households" and other users of water because no such breakdown of water use is available. The technical study makes the assumption that 800/% goes to household use and 20% to other types of use by public institutions, private services, industry and tourism. Based on the structure of water demand in other comparable countries, a more reasonable estimate for the share of "household" demand would be 70%. This share would include the demand of both households and of private services other than hotels, such as restaurants, shops, etc. The remaining 30% would be shared by public institutions, industry and tourism3.
How many blocks should there be? With a large number of blocks the incentive content of the system is lost because users would find it hard to understand bills and interpret how the latter change when they vary their water consumption. With a very small number of blocks it is the distribution objective that becomes inadequately addressed. In the extreme case of one single block the equity concern will be completely left out. A proper trade-off would be to design a scheme of four to five blocks, where the first block corresponds to the income bracket of low-income households. The tariff structure described below is based on five blocks.
This structure is based on reasonable assumptions concerning distribution weights and on the structure of income distribution given in a national survey on living conditions in Lebanon, including in the Ba'albeck-Hermel region4. The basic distribution assumption underlying the proposed tariff structure is that households spend the same share of their income on water and sanitation. This means that block tariffs should verify the following conditions5:
Ei E =LL=
Ei is the water (sanitation) bill for households (i) with income yi.
Bills will be
El = PIWI
E2 = PIWI + P2(W2-WI)
E3 = PlWl + P2(W2-WI) + P3(W3-W2)
E4 = PIWI + P2(W2-WI) + P3(W3-W2) + P4(W4-W3)
3 In Tunisia, for instance, water use in the whole country breaks down into 68% for what is labeled domestic use, 15% for collective use, 11% for the industry and 6% for tourism (See Etude Economique sur l'Eau Potable en Tunisie, Societe Nationale d'Exploitation et de Distribution de l'Eau "SONEDE", 1994). Since the area of Ba'albeck-Nabi-Chit has little industrial and tourist activity, proportions of 80-20% for domestic and other type of use are a reasonable assumption for this area. 4 1R6publique Libanaise, ( Conditions de vie des m6nages dans la r6gion de Ba'albeck-Hermel en 1997 )>,Etudes Statistiques N° 7, Administration Centrale de la Statistique, Novembre 1997 5 Income shares are not equalized in the proposed tariff scheme due to the fixed component. 72 The block tariffs vary from the lowest level, PI, applying to the lowest block to the highest level, P4, applying to the highest one.
In addition these prices should be such that the total cost O&M costs be covered, i.e. that
El +E2+E3+E4=c.W where c is the unit cost and W is the total volume of water used.
For the design of such a scheme data on water consumption across income brackets or blocks is needed. Since this information is not available some assumptions have to be made. As the new network and the metering system go into effect, this information will quickly become available and the actual tariff structure will be based on real figures. The following block tariffs should therefore be considered as only illustrative of the way tariff policy should be designed. The distribution of water use across income brackets is derived on the basis of the estimated average volume used per household (220 cum per year2 and a reasonable assumption on the sensitivity (elasticity) of water consumption to changes in income . Estimates for other countries have found values for this elasticity in the range of 0.2-0.8. Two values have been used in this analysis, 0.6 and 0.3.
These values imply that when income increases by 10% water consumption increases respectively by 6% and 3%. Tables 2 and 3 show the respective structures of consumption across blocks (income brackets). Under the first assumption the five blocks vary from 0-25 cum to more than 60 cum per quarter and average consumption would vary from 21 cum or the first block to 88 cum for the highest block (Table 2- a). Under the second assumption the first block is wider than under the first assumption and average consumption would vary from 32 to 74 cum per quarter.
The tariff structure is derived under the conditions that the water and sanitation bills represent the same share of income across income brackets (the variable components) and that O&M cost is recovered, and given the structure of consumption under one of the two assumptions of income elasticity. Tables 2-a-c show block tariffs and annual bills for water and wastewater under the first assumption of elasticity. Tables 3-a-c show the values of these variables under the second assumption. In the first case tariffs would be increasing from US$0.21 in the first block to US$0.80 in the highest block, with an average tariff (variable component) of US$0.50. Under the second assumption tariffs would vary between US$0.11 and US$1.16. For both water and wastewater the annual bill is estimated, under the assumption of US$0.6 for the income elasticity, at US$43 for the lowest bracket against US$452 for the highest, with an average across blocks of US$187. The lower value of US$0.3 for the elasticity yields a lower bill for the first bracket and a higher bill for the highest bracket of water consumption. More details can be found in the tables below.
The proposed scheme takes into account the three main objectives previously mentioned: efficiency, equity and cost recovery. It is important to stress that the equity concern is properly addressed since low- income households (the first block of water consumption) will pay less than what they would be paying under the current system of the flat annual rate.
6 In designing the tariff structure for implementation the distinction should also be made between households and other users of water. 73 Table-i-a-Water Tariff Structure and Bill by Block (with a quarterly flxed component of US$2.5)*
Water volume/ quarter 0-25 25-40 40-50 50-60 60+ Average Average volume of the 21 34 46 58 88 55 block/quarter Block rate (US$/cum) 0.21 0.42 0.54 0.64 0.80 0.5 Average annual bill fixed part inc. (US$) 28 67 109 158 292 120 * Based on the income distribution of table 3, an income elasticity equal to US$0.6 and a unit O&M cost equal to US$0.55
Table-1-b-Wastewater Tariff Structure and Bill by Block (with a quarterly flxed component of US$1.25)*
Water volume/ quarter | 0-25 25-40 40-50 50-60 60+ Average Average volume of the 21 34 46 58 88 55 block/quarter Block rate (US$/cum) 0.12 0.23 0.29 0.35 0.44 0.28 Average annual bill fixed part inc. (US$) 15 36 63 86 160 67
* Based on the income distribution of table 3, an income elasticity equal to US$0.6 and a unit O&M cost equal to US$0.3
Table-i-c-Water and Wastewater Tariff Structure and Bill by Block (with a quarterly fixed component of US$3.75)*
Water volume/ quarter 0-25 25-40 40-50 50-60 60+ Average Average volume of the block/quarter 21 34 46 58 88 55 Block rate (US$/cum) 0.33 0.65 0.83 0.99 1.24 0.78 Average annual bill fixed part inc. (US$) 43 103 172 244 452 187
* Based on the income distribution of table 3, an income elasticity equal to US$0.6
Table-2-a-Water Tariff Structure and Bili by Block (with a quarterly fixed component of US$2.5)*
Water volume/ quarter 0-35 35-45 45-55 55-60 60+ Average Average volume of the block/quarter 32 43 50 58 74 55 Block rate (US$/cum) 0.11 0.41 0.61 0.81 1.16 0.50 Average annual bill fixed part inc. (US$) 24 80 132 198 353 120
* Based on the income distribution of table 3, an income elasticity equal to US$0.3 and a unit O&M cost equal to US$0.55
74 Table-2-b-Wastewater Tariff Structure and bill by block (with a quarterly flxed component of US$1.25)*
Water volume/ quarter 0-35 35-45 45-55 55-60 60+ Average Average volurne of the block/quarter 32 43 50 58 74 55 Block rate (US$/cum) 0.06 0.22 0.34 0.44 0.64 0.28 Average annual bill fixed part inc. (US$) 13 43 73 107 195 67 * Based on the income distribution of table 3, an income elasticity equal to US$0.6 and a unit O&M cost equal to US$0.3
Table-2-c-Water and Wastewater Tariff Structure and bill by block (with a quarterly fixed component of US$3.75)*
Water volume/ quarter 0-35 35-45 45-55 55-60 60+ Average Average volume of the block/quarter 32 43 50 58 74 55 Block rate (US$/cum) 0.17 0.63 0.95 1.25 1.8 0.78 Average annual bill fixed part inc. (US$) 37 123 205 305 548 187 * Based on the income distribution of table 3, an income elasticity equal to US$0.3
Table-3- Income Distribution in the Ba'albeck-Hermel Area
Income bracket (in US$ 0- 2700- 4500- 7200- 10000- 20700 + per year) 2700 4500 7200 10000 20700
Average annual income 1750 3900 6270 9300 18700 - in 2001 (in US$) Share in total number of households (%) 11.4 14.2 26.5 22.8 19.1 6.0 Source: Republique Libanaise, <(Conditions de vie des menages dans la r6gion de Ba'albeck-Hermel en 1997 >),Etudes Statistiques N° 7, Administration Centrale de la Statistique, Novembre 1997
Alternative Tariff Structures and Affordability
A new tariff policy is analyzed and proposed to the Government to replace the existing flat tariff of US$90. It is based on a balance between three objectives, efficiency so that scarce resources will not be wasted, cost recovery so as to ensure the sustainability of services, and equity requiring a tariff structure such that the cost for low-income users is commensurate with their ability to pay. The proposed scheme is an increasing block tariff structure, with a fixed component, which would allow the recovery of O&M cost for water and equalize the income shares of the water and sanitation bills across income brackets. In this new scheme the burden for low-income users would be less than under the existing flat tariff system.
75 Annex 6: Procurement and Disbursement Arrangements
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
General
1. The current procurement system in Lebanon is governed by the Public Accounting Law (1963) and the Decree for Public Procurement (1959). The system is heavily centralized whereby procurement for more than LBP 100,000,000 (approximately US$66,000) has to go to the Board of Tenders which is the central procurement body. The Council for Development and Reconstruction (CDR) has financial autonomy which allows it to have more flexible procurement procedures. For International Competitive Bidding (ICB), CDR follows Bank Guidelines and uses the Bank's Standard Bidding Documents (SBD). For National Competitive Bidding (NCB), CDR will use the SBDs for ICB modified in a form acceptable to the Bank.
2. The efforts to reform the public procurement system in Lebanon have been ongoing for several years now. Currently, the Government has established a committee to review a draft for a new public procurement law and to provide recommendations on decentralization of public procurement. In the interim, the applicable provisions of the Loan Agreement would govern procurement decisions by CDR under this Project. All procurement under the project will be carried out by CDR.
Use of Bank Guidelines and Standard Bidding Documents
3. For works and goods, procurement will be carried out in accordance with the Guidelines for Procurement under IBRD Loans and IDA Credits (World Bank, January 1995, Revised January and August 1996, September 1997 and January 1999). The bulk of the procurement of works will be carried under ICB using the Bank Standard documents' for the "Procurement of Works" and the "Procurement of Works: Smaller Contracts." For NCB, CDR uses modified versions of the "Procurement of Works: Smaller Contracts". As the value of goods that will be procured under this project will be relatively small, it is not expected to procure any goods under ICB or NCB methods. The procurement of goods will be mainly under shopping procedures. In case of an ICB for goods, the Bank SBD for the "Procurement of Goods" will be used. For NCB, the CDR uses a modified version of the samne SBD, while for shopping the CDR uses simplified documents and procedures that are acceptable to the Bank. For all evaluation reports under ICB and NCB methods, the standard bid evaluation form for the "Procurement of Goods or Works" will be used.
4. The procurement of services will be carried out in accordance with the Guidelines for the Selection and Employment of Consultants by World Bank Borrowers (World Bank, January 1997 Revised September 1997 and January 1999). The standard Request for Proposal (RFP) for Selection of Consultants and the standard forms of contracts will be used for all contracts above US$200,000 equivalent. A simplified version of the standard RFP and contracts will be used for contracts below US$200,000 equivalent and short term assignments. Selection of individual consultants will be carried by comparison of CV's and using simplified contracts, acceptable to the Bank. For the selection process of firms, the Sample Form of Evaluation Report for Selection of Consultants will be used.
'All references to SBDs or SRFPs refer to the latest editions as issued by the Bank at the time of preparation of the bidding docunent or Request for Proposals by CDR. 76 5. The procurement of the two Service Contracts (SC) will follow Bank Guidelines using bidding documents that will be drafted by consulting firms to be retained by CDR for this purpose. This activity will benefit from similar experiences of the Bank projects in the region. Pre-qualification will be conducted to determine the lists of qualified firms that will be invited for the two bidding processes. The pre-qualification and bidding documents will be cleared by the Bank prior to issuance.
Advertising
6. A General Procurement Notice (GPN) will be published in the United Nations Development Business (UNDB) and at least in two local newspapers. The GPN will provide a description of the Project and will list all contracts for the works that will be procured under ICB, SCs and consultants services estimated at more than US$200,000. The GPN will be updated annually for all outstanding procurement.
Procurement Capacity
7. As Lebanon's central projects implementation agency, CDR has gained substantial experience in procurement under World Bank loans. Its staff have adequate capacity and skills in procurement and contracts management. The Bank will be able to better assess CDR's procurement capacity once the ex- post procurement review and the "Independent Procurement Review" (IPR) are carried out in Lebanon. Furthermore, once CDR completes its current re-organization and recruitment efforts, the Bank will conduct a procurement capacity assessment. As for the current project, the preparation of bidding documents for the major works contracts is already under preparation by a consultant recruited under a contract financed by the Emergency Reconstruction and Rehabilitation Project (ERRP), Loan no. 3562- LE. Consulting firms will be selected to prepare the bidding documents for the SCs assignments and will assist CDR in the selection and contract negotiation process.
Procurement Plan
8. The procurement plan is attached to this Annex. This plan has been discussed, finalized and agreed upon during negotiations. It includes details for all activities prior to loan effectiveness as well as for the life of the project. CDR will be responsible for the regular update of the procurement plan for the Project in each progress report. Procurement of all works, goods and services will be undertaken in accordance with this plan as approved by the Bank.
Procurement Implementation Arrangements
9. Procurement of Works. The bulk of the procurement of works under the project are grouped under a few large contracts. The following is the status of preparation of these packages:
i. Construction of distribution lines & house connections for Phase-I area, estimated at US$2,992,000.2 The bidding documents have already been prepared by the Consultant recruited under the ERRP Loan. It is expected to be launched under an NCB process in April 2002. The Bank has already provided its no-objection to this package. The contract award is estimated to be in August 2002.
ii. Construction of distribution lines & house connections for Phase II - area, estimated at US$11,916,000. The bidding documents for this package are currently under preparation by the same consultant under (i) above and is expected to be ready by July 2002.
2 All cost estimates for bidding packages include contingencies and are based on last known actual prices. 77 This package is expected to be launched in September 2002 under an ICB process. The contract is expected to be ready for award by January 2003.
iii Construction of the wastewater network, estimated at US$16,176,000. The bidding documents for this package have been prepared by the same consultant under (i) above and have already been submitted to the Bank for no-objection. This package is expected to be launched in September 2002 under an ICB process. The contract is expected to be ready for award by January 2003.
During negotiations, CDR and the Bank assessed the need to carry out a pre-qualification process of contractors for the two contracts under (ii) and (iii) above. CDR decided to conduct a pre-qualification process.
There will be also four other packages relating to the WWTP. The first one is extending the effluent discharge pipe at an estimated value of US$352,000. The CDR has decided to proceed with direct award of this package to the contractor who has constructed the treatment plant, as there is an urgent need to proceed with this work and there will be no advantages in conducting a bidding process. The works for improving the design of the WWTP are estimated at US$285,000. Implementation is scheduled during 2004. The packages for the tertiary treatment and the storage area for the sludge effluent will be implemented in 2005. These packages are estimated at US$823,000 and US$750,000, respectively. These packages will be procured using NCB procedures.
10. Service Contracts. There will be mainly two service contracts under the project. These two packages are critical for the project. Drafting the bidding documents and selecting the SCs will require specialized expertise. For this purpose, the CDR will recruit consulting firns to draft the bidding documents. These firms will also assist CDR in the selection process and in negotiating and drafting the final contract with the SCs finns. The bidding documents, and in particular the model contract, will be drafted to satisfy the specific requirements of the assignments while adhering to the Bank procurement Guidelines. The details for these two contracts are as follows:
i. Service Contract for the water supply and sewerage network: the most critical activity for this package is selecting a consultant to draft the bidding documents for the SC. For this purpose, the Bank recommends proceeding quickly with this activity using the Consultant Qualifications (CQ) method of selection or extending the scope of work of the firm recruited by CDR to prepare the MC for Ba'albeck area. The procurement process for the selection of the firm for the SC will be launched in June 2002. The first phase will be a pre-qualification process to select the firms that will be invited to submit proposals. Expected award of contract is by January 2003. The period for the SC will be two years from date of contract effectiveness, subject to an extension of an additional two and a half years. The expected value of this contract is US$5,766,000.
ii. Service Contract for the wastewater treatment plant: the first activity will be selecting a firm to prepare the bidding documents for this SC. This process will be launched in January 2003 . The Expected award of contract for this SC is by January 2004. The period for the SC will be two years from date of contract effectiveness, subject to an extension of an additional one and a half years. The expected value of this contract is US$1,672,000.
11. Preparation of Management Contracts. This is required for a future project in the Beka'a region, and possibly for another regional water authority in the country. Technical assistance will be needed for drafting the Request for Proposals and selection of the MCs. The budgeted allocation for these activities is US$1,000,000.
78 12. Consulting Services, Technical Assistance and Training. The main packages under this component are as follows: i. Institutional Building: this sub-component entails the provision of services of individual consultants that will support Baalback and Hermel, Chamsine, Zahle Water Authorities and CDR at a total budget of US$3,185,000. There are eleven professionals and two project assistants who will be recruited for the life of the project. The Terms of Reference (TORs) for the first three consultants have been prepared and an advertisement was placed in local newspapers in September 2001. The selection of these three consultants is in process and award of contracts is expected by May 2002. The selection process for these consultants will be in accordance with Bank procedures for the selection of individual consultants. An estimated amount of US$50,000 may have to be financed retroactively for contracts that will be awarded prior to Loan effectiveness.
ii Studies in the Wastewater Sector: this sub-component will focus on conducting a master plan for the wastewater management in the project area. The budget for these studies is US$510,000 and the method of procurement will be QCBS. It is expected that these will be mainly under one contract.
iii. Supervision Services: the services of three consulting firms to conduct supervision for the contractors of the water works, wastewater works and other works related to the treatment plant will be required at an estimated budget of US$1,362,000. The method of selection to be used will be the Least Cost Selection (LCS) method. Launching each RFP will be synchronized with the related works.
Supervision of the SCs: the TORIRFP for this assignment are expected to be ready by June 2002. Its launching will be synchronized with progress in the selection process of the SC firm for the water supply and sewerage network. It will also cover the SC for the treatment plant. The estimated contract value is US$185,000 using the QCBS as a selection method.
iv. Other Consultancy Services: CDR will require the services of several consultants to assist in the preparation of TOR's or bidding documents as follows: (a) CDR will launch by May 2002 a procurement process to select a firm that will prepare the bidding documents for the first SC. The budget for this assignment is US$75,000. This contract will be financed retroactively if needed. Alternatively, CDR may wish to assess the feasibility of extending the scope of work of the firm that was recruited to prepare the bidding documents for the MC for the Baalbeck area to prepare this SC bidding documents. (b) Another activity under this sub-component is the provision of technical assistance in the preparation and implementation of an Environmental Management Plan. The budget for this activity is US$369,000. The method of selection to be used is the Quality and Cost Based Selection (QCBS). (c) Other technical assistance will be required for design and supervision services as the project progresses. The value of these consultancies are estimated at US$175,000.
v. Training: this sub-component includes several specialized training activities for the three water authorities and other agencies in the sector. TORs for these activities will be prepared by the individual experts recruited under the institutional strengthening component. The methods of selection to be used will be LCS and CQ. The estimated budget for these training activities is US$510,000.
79 13. Goods for BHWIA. This component will include the provision of software packages, information technology equipment, office equipment, office furniture and vehicles that are necessary for the work of the individual consultants that will be recruited to support the three water authorities. The estimated aggregate cost for this component is US$540,000 and will be procured using mainly international and national shopping methods in accordance with the provisions of paragraphs 3.5 & 3.6 of the Guidelines.
14. Retroactive Financing. The amount of retroactive financing eligible under the loan is US$4,353,000. The contracts that are eligible for retroactive financing will be: (i) construction of distribution lines and house connections for Phase-I area; (ii) construction of distribution lines and house connections for Phase-lI area; (iii) construction of the wastewater network; (iv) the services of three consulting firms to conduct supervision for the above three contracts; (v) the works for the extension of the effluent discharge at the wastewater treatment plant; (vi) the preparation of the bidding documents for the Service Contract(s); and (vii) the first three consultants that will be recruited under the Institutional Building component and CDR's coordinator for the project. The procurement process has to be in accordance with the Bank Guidelines and procedures so that these contracts will be eligible for retroactive financing.
Procurement Methods (Table A)
15. Goods and Works. Procurement of goods and works will be carried out using the following methods:
i. International Competitive Bidding will be used for contracts of works estimated at US$3,000,000 and above, and for contracts of goods estimated at US$250,000 and above.
ii. National Competitive Bidding, including national advertisements, bidding documents that are acceptable to the Bank, and public bid openings will be used for contracts of works estimated to cost less than US$3,000,000 equivalent per contract, and for contracts of goods estimated to cost less than US$250,000 equivalent per contract. The aggregate value of contracts that will be awarded under this procedure will not exceed US$10,000,000 equivalent for works, and US$2,000,000 equivalent for goods.
iii. International Shopping may be used for goods estimated to cost less than US$150,000 equivalent per contract. The request for quotations shall be in writing and addressed to at least three suppliers in two different countries. The request for quotations will contain the following: technical specifications, delivery time, payment conditions and any other information that may assist the suppliers in preparing competitive offers. The aggregate value of contracts that will be awarded under this procedure shall not exceed US$1,500,000 equivalent.
iv. National Shopping may be used for goods estimated to cost less than US$50,000 equivalent per contract. The request for quotations shall be in writing and addressed to at least three suppliers. The request for quotations will contain the following: technical specifications, delivery time, payment conditions and any other information that may assist the suppliers in preparing competitive offers. The aggregate value of contracts that will be awarded under this procedure shall not exceed US$750,000 equivalent.
v. Direct Contracting will be used for the specialized procurement of goods when NCB and Shopping methods would not be efficient and economical, and the works for the contract for the extending the effluent discharge pipe at the WWTP. Direct Contracting would follow the requirements in paragraph 3.7 of the Guidelines for Procurement under IBRD Loans and IDA 80 Credits. The aggregate value of contracts that will be awarded under Direct Contracting shall not exceed US$500,000 equivalent for contracts of works and US$200,000 for contracts of goods.
16. Consultant Services. The following procurement methods for selection of consultants will be used: (i) Quality-and Cost-Based Selection (QCBS) will be used for selection of consultant services with value of contracts estimated at more than US$100,000 equivalent for the assignments under the institutional building, studies in the wastewater sector, supervision of the SC and assignments under other consultancies; (ii) Least-Cost Selection (LCS) will be used for supervision services and training; (iii) Selection Based on Consultant's Qualifications (CQ) will be used for assignments estimated at less than US$100,000 equivalent per contract for the institutional building, training and assignments under other consultancies; and (iv) Selection of Individual Consultants will be used in accordance with paragraphs 5.1 to 5.3 of the Guidelines.
17. For assignments for consultant firns estimated at less than US$100,000 equivalent, the short list may be comprised entirely of national firms, provided at least three qualified local firms are available and competition including foreign consultants is not justified. However, international firms will not be excluded from consideration, if they have expressed interest.
18. The thresholds for procurement methods and prior review are indicated in Table B. The total value of contracts subject to prior review is estimated at US$44 million. All other contracts will be subject to post-review and procurement audit on a random basis by the Bank. Procurement files will be maintained for review by the Bank's supervision missions.
Overall Procurement Risk Assessment
19. Based on the existing information and the procurement capacity assessment of CDR, the overall procurement risk assessment is average. The main procurement packages for the works are under preparation. The three large contracts for water, wastewater and the SCs will account for the bulk of the procurement activities in the project. The firm that will draft the RFP documents to select the first SC firm will be awarded the contract by CDR by May 2002. It is important to keep the current momentum in the preparation of bidding docurnents, TORs and RFPs for the remaining project activities, and in particular for supervision services in the first year. The majority of the procurement packages will be launched during the first year, and will thus require considerable time allocation from CDR staff assigned to this project. After the award of contracts, the critical issue would be management of the awarded contracts.
Frequency of Procurement Supervision
20. Bank supervision missions will be carried out every four months for the first year and every six months thereafter. However, the World Bank Office in Lebanon will carry out procurement and financial supervision, as often as required, including post-review audits on a random basis.
81 Table A: Project Costs by Procurement Arrangements (US$ million equivalent) Procurement Methods Total Cost Expenditure Category ICB NCB | Other | N.B.F. (%e) 1. Works
Water Works 11.92 2.99 0.00 _ 14.91 (10.13) (2.54) 0.00 (12.67) Wastewater Networks 16.18 1.86 0.35 0.26 18.65 (13.75) (1.58) (0.30) (15.63) Sub-Total Works 28.09 4.85 0.35 0.26 33.56 (23.88) (4.12) (0.30) 0.00 (28.30) 2. Goods Support to the BHWIA 0.00 | 0.00 0.54 0.00 0.54 0.00 0.00 (0.46) _ (0.46) 3.Service Contract(s) Service Contract For the Water and 57 .000 .057 Wastewater Network 5.77 0.00 0.00 0.00 5.77 (5.48) 0.00 0.00 (5.48) Service Contract for the WWTP 1.67 0.00 0.00 0.00 1.67 (1.59) 0.00 0.00 (1.59) Sub- Total Service Contracs 7.44 0.00 0.00 0.00 7.44 (7.07) 0.00 0.00 (7.07) 4. Services Institutional Building 0.00 0.00 3.19 0.00 3.19 0.00 0.00 (3.03) (3.03) Studies in the Wastewater Sector 0.00 0.00 0.51 0.00 0.51 0.00 0.00 (0.48) (0.48) Supervision 0.00 0.00 1.55 0.00 1.55 0.00 0.00 (1.47) (1.47) Preparation of Management Contracts 0.00 0.00 1.04 0.00 1.04 0.00 0.00 (0.99) (0.99) Training 0.00 0.00 0.51 0.00 0.51 0.00 0.00 (0.49) (0.49) Other Consultancy Services 0.00 0.00 0.57 0.00 0.57 0.00 0.00 (0.54) (0.54) Sub-Total Servlc 0.00 0.00 7.36 0.00 7.36 0.00 0.00 (699) (6.99) 5. Miscellanous Operating Cost of the TSU 0.00 0.00 0.31 0.00 0.31 0.00 0.00 (0.28) (0.28) Total 35.53 4.85 8.56 0.26 49.20 1 (30.95) (4.12) (8.02) 0.00 (43.09) Note: ICB: International Competitive Bidding NCB: National Competitive Bidding Other: International Shopping, National Shopping, Direct Contracting NBF: Not Bank Financed Figures inparenthesis are the amounts to be financed by Bank Loan The total value of the project inthis table differs slightly from the detailed project cost figures due to rounding.
82 Table Al: Consultant Selection Arrangements (US$ million equivalent) Consultants' Services Expenditure Category Selection Method Total Cost (Induding contlnwendes) QCBS QBS SFB LCS CQ Other NBF Studies in the Wastewater Sector 0.51 0.51 Supervision Services 1.36 1.36 Supervision of the Service Contract(s) 0.19 0.19 Preparation of Management Contracts 1.04 1.04 Training 0.26 0.26 0.51 Other Consultancy Services 0.49 0.08 0.57 Individual Consultants 3.19 3.19 Total 2.22 0.00 0.00 1.62 033 3.19 0.00 7.36 Note: QCBS: Quality and Cost Based Selection; QBS: Quality Based Selection; SFB: Selection under a Fixed Budget; LCS: Least Cost Selection CQ: Selection Based on Consultant's Qualifications; Other: Selection of individual consultants; N.B.F: Not Bank Financed Table B: Thresholds for Procurement Methods and Prior Review (all values in USS) Expenditure Contract Value Procurement Contracts Subject to Category Threshold Method Prior Review 1. Works >3,000,000 ICB All Contracts <3,000,000 NCB All Contracts prior to Loan effectiveness. All Contracts above US$1,000,000 equiv. First contract to be awarded regardless of value. Direct Award All Direct Award Contracts. Number of contracts subject to pr or review are 4 with an estimated cost of USS31,000,000 2. Goods > 250,000 ICB All Contracts < 250,000 NCB All Contracts prior to Loan effectiveness. All Contracts above US$200,000 equiv. First contract to be awarded regardless of value. * 150,000 IS All Contracts prior to Loan effectiveness. * 50,000 NS All Contracts prior to Loan effectiveness. Direct Award All Direct Award Contracts. Number of contracts subject to prior review are 2 with an estimated cost of US$200,000. 3. Service [|Two contracts at an est. cost of US$7,400,000 Contracts II I 4. Services, Consultant Services, Training Firms > 200,000 QCBS, LCS, All TORs, short lists, RFPs and contracts. <200,000 QCBS, LCS & All TORs. CQ All contracts prior to Loan effectiveness. For contracts for consulting firms less than US$200,000 equiv. and more than US$100,000 equiv., the procedures set in paras. 1.2 (other than the second subpara. of para. 2a) and 5 of Appendix I to the Consultants Guidelines shall apply. Individual Individual All TORs. Consultants consultants Short List, selection report and contract for all selected prior to Loan effectiveness. selection Short List, selection report and contract for all consultants exceeding US$50,000 equiv., Direct Award All Direct Award Contracts. Number of contracts subject to prior review are 20 with an est. cost of US$5,500,000.
83 Ba'albeck Water and Wastewater Project Attachment to Annex 6 Procurement Plan 2001 12002 2003 12004 12005 12006 12007 ID 0Q Task Name Duraton Start Finish Hi H2 Hi H2 HHi H2i Hi I H2 Hi I H2 H Hi !H2 I GENERAL 237 days Mon 2/4/02 Wed 1/1103 2 !i3 Appraisal 2 wks Mon 2/4/02 Fri 2/15/02 L
3 Negotiations 1 wk Mon 4/1/02 Fri 4/5/02 - 4 Board approval 0 wks Thu 5/30/02 Thu 5/30/02 0 5 3 Effectiveness 0 days Wed 1/1/03 Wed 1/1/031 .ll 6 General procurement notce 0 days Wed 5/1/02 Wed 5/1/02 + 1 7 8 Construction of house connections & distribution lines phase 420 days Wed 9126t01 Tue U6/03_ I (NCB) 9i Preparaton of technical / bidding document 16 wks Wed 9/26/01 Tue 1/15/02 10 WB review of final bidding document 4 wks Wed 1/16/02 Tue 21/V02 11 . WB no-objecfion Odays Tue 2/12/02 Tue 2/12/02| 2 12 !i Special procurement notce 1 wk Tue 4/30/02 Mon 5/61021 Issue of bidding documentsi bids submission 6wks Tue 517/02 Mon 6117/021 14 Bid opening Odays Mon 6/17/02 Mon 6117/02 !/17 15 Bids evaluation 4wks Tue6/18/02 Mon7/15/02| 16 WB review of evaluation report 2 wks Tue 7/16/02 Mon 7/29/02 17 WB no-objection for contract award 0 days Mon 7/29/O2 Mon 7M902 18 Award contracti intemal processing 4 wks Tue 7/30/02 Mon 8/26/02 19 Effectiveness of contract 0 days Mon 8/26t02 Mon 8/26102 : /26 20 i Commencement of Contract execution 1 day Tue 8/27/02 Tue 8/27/02 8/27 21 !Contract execution 36 wks Wed 8/28/02 Tue 5/6103 22 1 23 SupervisIon for constuction of house connections& 281 days T 4301021ue Tue 5v27/03 I distribution lines phase I (LCS) 24 Special procurement notce I wk Tue 4/30/02 Mon 5/6102 6. 25 Submission of expressions of Interest 3 wks Tue 5/7/02 Mon 5/27/02 26 Preparaton of short list 2 wks Tue 5/28/02 Mon 6110/02 27 WB review of shoft Ust 1 wk Tue 6t1 i/02 Mon 6/17/02 28 |WB no-objection for short list Odays Mon 6117/02 Mon7617/02 i /17 29 Preparaton of TOR & RFP 2 wks Tue 5/7/02 Mon 5/20/021 30 WWBreview of RFP 1 wk Tue 5/1/0i2 Mon 5/27/02 31 | WB no-objecton for RFP 0 days Mon 5/27/02 Mon 5/27/02 |.27
84 Ba'albeck Water and Wastewater Project Anachment to Annex 6 Procurement Plan T 1 2001 2002 2003 2004 2005 12006 12007 ID O Task Name Duration Start Finish Hi H2 Hi H2 I HI H2 I HZ HI 2 I H H2 Hi I H2 32 Issuance of RFP 3 wks Tue 6/18/02 Mon 7/8/02 33 Submission date / bids opening 0 days Mon 7/8/02 Mon 7/8/02 7/8 34 Technical evaluation (TE) & TE report 2 wks Tue 7/9102 Mon 7/22/02 35 WB na-objection 1 wk Tue 7/23/02 Mon 7/29/02 36 Finandal envelopes opening 2 wks Tue 7/30/02 Mon 8/12/02 37 Financial evaluation & final bid report 1 wk Tue 8/13/02 Mon 8/19/02 38 WB review of final report 1 wk Tue 8/20/02 Mon 8/26/02 39 WB no-objecton 0 days Mon 8/26/02 Mon 8/26/02 8i26 40 Negotiation & preparation of contract award 1 wk Tue 8/27/02 Mon 9/2/02 41 WB review of contract 1 wk Tue 9/3/02 Mon 9/9/02 42 WB no-objecdon for contract award 0 days Mon 9/9/02 Mon 9/9/02 9/9 43 Award contractfintemal processing 1 wk Tue 9/10/02 Mon 9/16/02 44 Effecdveness of contract 0 days Mon 9/16/02 Mon 9/16/02 9/16 45 i3 Contract execution 36 wks Wed 9/15/02 Tue 5127/031 46 i 47 I Pre-quallflaction of Contractors (for house connection Pll & W; 95 days Wed 5/1/02 Tue 9/10/02
48 Preparaton of pre-qualification document 4 wks Wed 5/1/02 Tue 5/28/02 . 49 WB review of pre-qualification document 2 wks Wed 5/29/02 Tue 6111/02 50 { WB no-objecton 0 days Tue 6/11/02 Tue 6/11/02 611 51 Special procurement notice 1wk Wed 6/12/02 Tue 6118/02 52 Issue of pre-qualification document 6 wks Wed 6/19/02 Tue 7/30/02 53 1 Receipt of pre-quallfication documents of contractors 0 days Tue 7/30/02 Tue 7/30/02 4&;7130 54 Evaluation of pre-qualification documents 4 wks Wed 7/31/02 Tue 8/27/02 55 WB review of evaluation report 2 wks Wed 8/28/02 Tue 9/10/02 56 WB no-objection for pre-qualification report 0 days Tue 9/10/02 Tue 9/10/02 9/10 57 58 59 Construction of house connections & distributlon lines Phase 637 days Mon 2/11/02 Tue 7/20/04 I 11(ICB) 60 3 Preparation of technical / bidding document 20 wks Mon 2/11/02 Fri 6/28/02 61 WB review of final bidding document 3 wks Mon 7/1/02 Fri 7/19/02 62 WB no-objection 0 days Fri 7/19/02 Fri 7/19/02 419
85 Ba'albeck Water and Wastewater Project Attachment to Annex 6 Procurement Plan 2001 12002 2003 12004 12005 2006 2007 ID O Task Name Duration Start Finish HI H2 HI I H2 HIH I H2 HI H2 Hi Hi H2 |H H2 63 Special procurement notice 1 wk Wed 9/11/02 Tue 9/17/021 64 Issue of bidding documents/ bids submission 6 wks Wed 9/18102 Tue 10129/02 65 Bid opening 0 days Tue 10/29/02 Tue 10129/02 10129 66 Bids evaluation 4wks Wed 10/30/02 Tue 11/26/02 67 WB review of evaluaton report 2 wks Wed 11/27/02 Tue 12/10/02 1 68 WB no-objection for contract award 0 days Tue 12/10/02 Tue 12/10/02 1 12/10 69 Award contractl Intemal processing 4 wks Wed 12/11/02 Tue 1,7/031 70 Effeciveness of contract 0 days Tue 1/7/03 Tue 1/7i03 'n1/7 71 Commencement of contract execution 80 wks Wed 1/8/03 Tue 7/20/04 72 73 Supervision for construction of house connections & 559 days Thu 5/30102 Tue 7/20/041 distribution lines phase 11(LCS) ! 74 i3 Special procurement notice 2 wks Thu S/30/02 Wed 6/12/021 75 Submission of expressions of Interest 3 wks Thu 6/13/02 Wed 7/3/021 76 Preparation of short list 2 wks Thu 7/4/02 Wed 7117/021 77 WB review of short Ust 1 wk Thu 7/18/02 Wed 7124/02, 78 WB no-objection for short list 0 days Wed 7/24/02 Wed 7124/02 79 @i Preparation of TOR & RFP 2 wks Thu 6/13/02 Wed 6/26/021 80 WBreviewof RFP I wk Thu 6/27/02 Wed 7/3/021 81 WB no-objedion for RFP 0 days Wed 7/3/02 Wed 7/3/021 3 82 Issuance of RFP 4 wks Thu 7/25/02 Wed 8/21/02 83 Submission date i bids opening 0 days Wed 8/21/02 Wed 8/21/02 . 21 84 Technical evaluation (TE) & TE report 2 wks Thu 8/22/02 Wed 9/4/02 85 WB no-objection 1 wk Thu 9/5/02 Wed 9/111i02 . 86 Financial envelopes opening 2 wks Thu 9/12/02 Wed 9/25/02 87 Financiai evaluatbon &final bid report 1 wk Thu 9/26/02 Wed 10/2/02 | 88 WB review of final report 1 wk Thu 10/3/02 Wed 10/9/02 89 WB no-objecdton 0 days Wed 109/02 Wed 10/9/02 10/9 90 Negotiation & preparaton of contract award I wk Thu 10/10/02 Wed 10/16/02 91 WB review of contract I wk Thu 10/17/02 Wed 10/23/02 92 WB no-objedctin-for contract award 0 days Wed 10/23/02 Wed 10/2302 1023 93 Award contract/intemal processing 2 wks Thu 10/24/02 Wed 11/6/02
86 Ba'albeck Water and Wastewater Project Attachment to Annex 6 Procurement Plan _ I I I12001 12002 2003 12004 2005 2006 2007 ID O Task Name I Duration Start Finish Hi H2 HI H2 i H 2 H2 H 2 Hi H2 HI H2 94 Effectiveness of contract 0 days Wed 1116102 Wed 11161021 1116 95 M3 Contract execution 80 wks Wed 1/8/03 Tue 7/20/04 9-6 97 Construction of the wastewater network (ICB) 721 days TUe 1116101 Tue V/10/04 _ 98 Preparation of technical / bidding document 20 wks Tue 11/6101 Mon 3125/02 99 WB review of final bidding document 6 wks Tue 3/26102 Mon 516102 100 WB no-objection 0 days Mon 5/6102 Mon 5/6102 | 6 101 Spedal procurement notice 1wk Wed 9/11/02 Tue 9/17/02 L 102 Issue of bidding documents/ bids submission 8 wks Wed 9/18/02 Tue 11/12/02 103 Bid opening Odays Tue 11/12/02 Tue 11/12/02 11/12 104 Bids evaluation 4wks Wed 11/13/02 Tue 12/10/02 105 WB review of evaluation report 3 wks Wed 12/11/02 Tue 12131/02 106 WB no-objection for contract award 0 days Tue 12/31/02 Tue 12t31/02 |i12/31 107 | Award contrac/ intemal processing 4 wks Wed 1/1/03 Tue 1/28/031 108 j 3 Effeciveness of contract 0 days Tue 1/2803 Tue 1/28/03 1/28 109 Commencement of contract execution 80 wks Wed 1/29/03 Tue 8/10/04| 110 11 111 | Supervision services for construcUon of the wastewater 576 days Thu 5/30102 Wed 8/111/04 network (LCS) 112 Spedal procurement notice 1 wk Thu 5/30/02 Wed 615/02 113 Submission of expressions of interest 4 wxs Thu 616102 Wed 7/3/02 114 i Preparation of short list 2 wks Thu 7/4/02 Wed 7/7/02 115 WB review of short List 1 wk Thu 7/18102 Wed 7/24/02 116 WB no-objection for short list 0 days Wed 7/24/02 Wed 7/24/02 7t24 117 Preparaton of TOR & RFP 2 wks Thu 616102 Wed 6119/021 118 l WiBreviewofRFP 2vwks Thu 6120/02 Wed 7/ 119 |WB no-objection for RFP 0 days Wed 7/3/02 Wed 7/3/02 | -i F/3 120 Issuance of RFP 6 wks Thu 7/25102 Wed 9/4/021 . ij; 121 Submission date i bids opening 0 days Wed 9/4/02 Wed 9/4/02 9/4 122 Technical evaluation (TE) &TE report 2 wks Thu 9/5102 Wed 918/02 123 WBno-objection 2 wks Thu 9/19/02 Wed 10/2/02 7I . 124 RFinancial envelopes opening 2 wks Thu 10/3/02 Wed 10/16102
87 Ba'albeck Water and Wastewater Project Attachment to Annex 6 Procurement Plan 2001 - 2002 12003 12004 12005 12006 12007 ID 0 Task Name Start FinishFiDuratn Hi H2 Hi H2 Hi I H2 Hi H2 Hi H2 Hi H2 Hi H2 125 Financial evaluation & final bid report 1 wk Thu 10/17/02 Wed 10/23/02 126 WB review of final report 2 wks Thu 10/24/02 Wed 11/6/02 127 WB no-objection O days Wed 11/6/02 Wed 11/6/02 128 Negotiaton & preparation of contract award 1 wk Thu 11/7/02 Wed 11/13/021 129 WB review of contract 2wks Thu 11/14102 Wed 11/27/02 130 WB no-objection for contract award 0 days Wed 11/27/02 Wed 11/27/02 11/27 131 Award contractintemal processing 2 wks Thu 11/28/02 Wed 12/11/02 132 | Effeciveness of contract Odays Wed 12/11/02 Wed 12/11/02 12/l -- 3 Contrwks adThu execution801/30/03 Wed 8/11/04 133 Contract execution 134. 135 Extension of Effluent Discharge Pipel at the WWTP (Direct 120 days Mon 4/15/02 Fri 9127102 Award) 136 B Preparation of contract extension 4 wks Mon 4/15/02 Fri 5/10/02 137 WB no- objection for contract award 2 wks Mon 5/13/02 Fri 5124/02 138 | Award contract / intemal processing 2 wks Mon 5/27/02 Fri 6/7/02 139 Effectiveness of contract 0 days Fri 6/7/02 Fri 6/7/02 *,6/7 140 Contract execution 16 wks Mon 6/10/02 Fri 9/27/02 141: 142 Design and Supervision for additional works to the WWTP 465 days Thu 1/1/04 Wed 1QI12/051 (QCBS) 143 Submission of expression of Interest 2 wks Thu 1/1/04 Wed 1/14/04 144 Preparation of short list 2 wks Thu 1/15/04 Wed 1/28/04 145 Preparation of TOR & RFP 3 wks Thu 1/1/04 Wed 1/21/04 146 WB review of TOR 2 wks Thu 1/22/04 Wed 214/04 147 WB no-objection for TOR 0 days Wed 2/4/04 Wed 2/4/04 214 148 Issuance of RFP 4 wks Thu 2/5/04 Wed 3/3/04 149 Submission date / bids opening 0 days Wed 3/3/04 Wed 3/3/04 413 150 Technical evaluation (TE) &TE report 2 wkks Thu 3/4/04 Wed 3/17/04 151 Finandal envelopes opening 2 wks Thu 3/18/04 Wed 3/31/04 152 Financdai evaluation & final bid report I wk Thu 4/1/04 Wed 4/7/04 153 Negotiatbon & preparaton of contract award 2 wks Thu 4/8104 Wed 4/21/04 154 Award contract/intrmal processing 2 wks Thu 4/22/04 Wed 5/5104 155 Effectveness of contract Odays Wed 51504 Wed 5/5/04 UStS
88 Ba'albeck Water and Wastewater Project Attachment to Annex 6 Procurement Plan [2001 2002 2003 2004 2005 2006 2007 ID 0 Task Name Duration Start I Finish [HI H2 Hi H2 Hi H2 HI I H2 HI H2 Hi H2 HI H2 156 I Design Serices 16 wks Thu 5/6104 Wed 8251041 157 3 Supervision Services 40 wks Thu 1/6/05 Wed 10112105 i 158 159 Storage area for the sludge effluent at the WWTP (NCB) 275 days Thu 8/26/04 Wed 9114/05
160 Review of bidding document by CDR 4 wks Thu B/26J04 Wed 9t22t041 161 Spedal procurement notice I wk Thu 9/23104 Wed 9/29/04 162 Issue of bidding documents/ bids submission 6 wks Thu 9/30/04 Wed 11/10104 163 Bid opening Odays Wed 11/10/04 Wed 11/10/04 1/10 164 Bids evaluaton 4wkcs Thu 11/i 1/04 Wed 12N8/04
165 - WB no- objection for contract award Odays Wed 12/8/04 Wedi2/04 .=12/8 166 Award contract / internal processing 4 wkcs Thu 12/9/04 Wed 1/5/05 167 Effecivness of contract Odays Wed 1/5/05 Wed 1/5/05 1/5 168 Contract execution 36 wks Thu 1/6/05 Wed 914105 169 170 Tertiarytreametn atthe WWTP(NCB) 275days Thu/i16tO4 Wed 1105105
171 Review of bidding document by CDR 4 wks Thu 9/16/04 Wed 10/13/04 172 Special procurement notice 1 wk Thu 10/14/04 Wed 10/20/04 173 Issue of bidding documents/ bids submission 6 wks Thu 10t21/04 Wed 12/1/04 174 Bid opening 0 days Wed 12/11/04 Wed 12/11/04 + 12t1 175 Bids evaluation 4wks Thu 12/2/04 Wed 1229/04 176 WB no- objection for contract award 0 days Wed 12/29t04 Wed 1229/04 1229 177 Award contract / intemal processing 4 wks Thu 12/30/04 Wed 1/26/05 178 |Eifectiveness of contract 0 days Wed 1t26/05 Wed 1/26/05 1126 179 M3 Contract execubon 36Iwks Thu 1t27/05 Wed 10/5105 180 181 Preparation of the RFP for the Management Contrc 394 days Fri 7113101 Wed 1/15103 Baalbeck area (QCBS) 182 @ Special procurement notice 0 days Ff 7/13/01 Fri 7/13/01 ,7113 183 Submission of expressions of Interest 4 wks Fri 7/13/01 Thu 8J9t01 184 Preparation of short list 2 wks Ffi 8110/01 Thu 8/23/01 185 WB review of short Ust 2 wks Ff 8/24/O1 Thu 9/6/01 1i-86- Mi WB no-objection for short list 0 days Fri 7/27/01 Ffi 7t27/01 - 727:
89 Ba'albeck Water and Wastewater Project Attachment to Annex 6 Procurement Plan 2001 12002 12003 12004 2005 2006 2007 ID | Task Name I Duration Start Fish Hi2 H H2 I HIH H2 Hi H2 I HI I H2 H H2 I HIH H2 187 Preparaton of TOR & RFP 3 wks Fri 7/27/01 Thu 8/161011 Ir 188 WB revew of RFP 2 wks Fri 8/17/01 Thu 8130/01i 189 WB no-objection for RFF 0 days Thu 9/6/01 Thu 9/6/01 /6* 190 Issuance of RFP 6wks Frl9/7/01 Thu10/18/01 SL 191 B Submission date / bids opening 0 days Thu 10/18/01 Thu 10/18/01 018 192 Technical evaluation (TE) &TE report 2 wks Fri 10/19/01 Thu 11/1/01 b; 193 WB no-objection I wk Fri 1112/01 Thu 11/8/01 194 Financial envelopes opening I wk Fi 1/9i01 Thu i1/15/01 195 Financial evaluation & final bid report 1 wk Fn 11/16/01 Thu 1112/01 h 196 WB review of final report 1 wk Fr 1/23/01 Thu /29/01 197 WBno-objecton 1 wk Fri 11/30/01 Thu 12/6/01 198 Negotiation & preparatin of contract award 1 wk Fri 12V7/01 Thu 12/13/01 199 WB review of contract 0 days Thu W113/01 Thu 12V13/01 | 1213 200 j WB no-objection for contract award 1 wk Fd 12/14/01 Thu 12/20/01 201 Award contractintemal proceIsing 1 wk Fn 12/21/01 Thu 12127/01 I 202 Effectiveness of contract 0 days Wed 1/30/02 Wed 1/30/02 1/30 203 Contract executon 50wks Thu 1/31/02 Wed 1/15103 204... 205 PreparatIon of the RFP for the Service Contract (extensIon 215 days Tue 4/23/02 Mon 2/17/03 ofcontract) 206 Negotation pp of contract award 4ws Tue 4/23/02 Mon 5/20/02 207 Award contractintemai processing 2 wks Tue 5/21/02 Mon 6/302 208 WB no-objection 1 wk Tue 6/4/02 Mon 6/10/02 Contract execuAion 36 wks Tue 6/11/02 Mon 217/03 210 211 Sevice Contract 1336 days Mon 6/302 Mon 7116107
212 Special procurement notce 1 wk Mon 6/3/02 Fri 6/7/02 213 Submission of pro-ualification 4 wks Mon 6/10/02 Fri 7/5/02 4Preparaton of pre-qualified firms 2 wks Mon 7/8102 Fri 7/19/02 215H WB review of pre-qualifiacton report 2 wks Mon 7/22/02 Fri 8W202 216 WBno-objection for pre-qualificaton report 0 days Fri 8/2/02 Fri 8202 812 217 t CDR review of RFP 2 wks Tue 8/6/02 Mon 8/19/02
90 Ba'albeck Water and Wastewater Project AttachmenttoAnnex6 Procurement Plan 1 ~~~~~ ~~~~~12002 ~~~~~2003 ~~~~~12004 ~~~~~12005 ~~~~~~~~200112006 -20-07 ID | TaskNa raton Start Finish HlaI H2 Hi H2 1 HI I H2 Hi H2 Hi I H2 HI H2 I Hi H2 218 j WB review of RFP 2 wks Tue 8/20/02 Mon 9/2102 219 i3 WB no-objecton for RFP 0 days Mon 9/2/02 Mom 9/2/021 220 Issuance of RFP 8wks Tue 9/3/02 Mon 10/28/02 221 Submson date / bids opening 0 days Mon 10/28/02 Mon 10/28/02 *1O28 222 Technical evaluation (TE)&TE report 2wks Tue 10/29/02 Mon11/11/02 223 WB no-objecton 1wk Tue11/12t02 Mon11/18/02 h 224 Finandal envelopes opening 2 wks Tue 11/19/02 Mon 12/2/02 225 Financial evaluatin & final bid report 1 wk Tue 12/3/02 Mon 12/9/02 226 WB review of final report 2wks Tue 12110/02 Mon 12123/02 227 I WB no-obJecon 0 days Mon 12/23/02 Mon 12i23/02 123 228 Negottaion &preparaton of contract award 2 wks Tue 12/24102 Mon 1/6/03 229 WB review of contract 1 wk Tue 1/7/03 Mon 1/131031 230 WB no-objecdon for contract award 0 days Mon 1/13/03 Mon 1/13/03 *113 231 Award contract/intemal processing 2 wks Tue 1/14/03 Mon 1/27/03 232 Effectveness of contract 0days Mon 1/27/03 Mon 1/27/03 1127 233 3 Contract execution-first two years 104 wks Tue 1/28/03 Mon 1/24/05 234 Contract execution- extension for remaining 2.5 years 129 wks Tue 1/25/05 Mon 7/16/07 235 236 Preparation of the RFP for the Service Contract for the 260 days Wed 1/1/03 Tue 12130/03 tratmnent plant (QCBS) 237 Preparation of short list 2 wks Wed i1//03 Tue 1/14/03 238 WB review of short Ust 1 wk Wed 1/15/03 Tue 1/21/03 239 WB no-objection for short list 0 days Tue 1/21/03 Tue 1/21/03 240 Preparation of TOR & RFP 2 wks Wed 1/1/03 Tue 1/14/03 241 3 WB review of RFP I wk Wed 1/15/03 Tue 1/21/03 242 WB no-objecton for RFP 0 days Tue 1/21/03 Tue 1/21/03 . 1/21 243 Issuance of RFP 4 wks Wed 1/22/03 Tue 2/18/03 244 Submission date / bids opening 0 days Tue 2/18/03 Tue 2/18/03 .J18 245 Technical evaluation (TE) & TE report 2 wks Wed 2/19/03 Tue 3/4/03 246 WB noobJeclion 1 wk Wed 3/5/03 Tue 3/11/03 247 Financial evaluation & final bid report 1 wk Wed 3/12/03 Tue 3/18/03 248 WB no-obJeCion 1 wk Wed 3/19/03 Tue 3/25/03 91~~~~~~~~ Ba'albeck Water and Wastewater Project Attachment to Annex 6 Procurement Plan 2001 12002 12003 .2004 2005 2008 2007 0 Task Name Duraton Start Finish Hi H2 Hi H2 H1 I H2 H1 I H2 I Hi LH2 HI I H2 I HI H2 9 Negotiation & preparaton of contract award 1 wk Wed 3/26/03 Tue 4/1/03 0 Award contractrinternal processing 1 wk Wed 4/2/03 Tue 4i8/03
1I Effectiveness of contract 0 days Wed 4N2/03 Wed 42/0O3 L AI2 23 Contract execution 39 wks Wed 4/2/03 Tue 12/30/03
4 Service Contract for the beatmnent plant 1147 days Mon 23/03 Tue 6l28107
5 Specal procurement notice 0 wks Mon 2/3/03 Mon 2/3/03 2)3 6 Submission of pre-qualification 4 wks Mon 2/3/03 Fri 2/28/03 Preparation of pre-qualified firms 2 wks Mon 3/3/03 Fri 3/14/03: 8 ; WB review of pre-qualifiaction report 2 wks Mon 3/17/03 Fri 3/28/03 . WB no-objecdon for pre-qualification report 0 days Fri 3/28/03 Fri 3/28/03. 3/28 0 CDR review of RFP I wk Wed 6/11/03 Tue 6/17/03': I W8 review of RFP 2 wks Wed 6/18/03 Tue i1/03. 2 WB no-objection for RFP 0 days Tue 7/1/03 Tue 7/1/03 3 Issuance of RFP 6 wks Wed 7N03 Tue 8/12/03! 4 . Submission date / bids opening 0 days Tue 8/12/03 Tue 8/12/03 8112 5 Technical evaluation (TE) & TE report 2 wks Wed 8/13/03 Tue 8/26/03: 6 WB no-objection 1 wk Wed 8/27/03 Tue 9/2/03 1 L 7 I Finandal envelopes opening 2 wks Wed 9/3/03 Tue 9/16/03 81 Financai eviluition &final bid report 1 wk Wed 9/17/03 Tue 9/23/03 9 WB review of final report 2 wks Wed 9/24/03 Tue 10'7/03!
O1 - - WB no-objection 0 days Tue 10/7/03 Tue 10/7/03 r10r7 1 Negotiation 8 preparation of contract award 2 wks Wed 10/8/03 Tue 10/21/03 2-l WB review of contract I wk Wed 10/22/03 Tue 10/28/03 3 WB no-objection for contract award 0 days Tue 10/28/03 Tue 10/28/03 10/28 Award contract/intemal processing 2 wks Wed 10/29/03 Tue 11/11/03 Effectiveness of contract 0 days Wed 12/31/03 Wed 12/31/03u Contract execution 104 wks Wed 12/31/03 Tue 12/27/05. 7 i Contract executbon 78 wks Wed 12/28/05 Tue 6/26/07;
92 Ba'albeck Water and Wastewater Project Attachmnent to Annex 6 Procurement Plan I______I 2001 12002 12003 12004 12005 12006 12007 Task Name Duration Start Finish Hi H2 Hi H2 1 HI H2 HI H2 I Hi H2 I HI I H2 Hi H2 9 Supervision of the Service Contract (QCBS) 1341 days Mon 63/02 Mon 7123107 _
0 Special procurement notice 2 wks Mon 6/3/02 Fri 6/14/02 1 Submission of expressions of Interest 4 wks Mon 6/17/02 Fri 7/12/02 2 Preparation of short list 2 wks Mon 7/15/02 Fri 7/26/02 3 WB review of short Ust 1 wk Mon 7/29/02 Fri W02 4 WB no-objecton for short list 0 days Fri 8/202 Fri 8/202 B/2 5 Preparation of TOR & RFP 2 wks Mon 6/17/02 Fri 6/28/02 6 WB review of RFP 2 wks Mon 7/1/02 Fri 7/12/02 7 WB no-objection for RFP 0 days Fri 7/12/02 Fri 7/12/02 /12 8 Issuance of RFP 6 wks Mon 8/5/02 Fri 9/13/02 Submission date / bids opening 0 days Fri 9/13102 Fri 9/13/02 9/13 0 Technical evaluation (TE) &TE report 2 wks Mon 9/11602 Fri 9/27/02 1 WB no-objecton 2 wks Mon 9/30/02 Fri10/11/02 2 Financial envelopes opening 2 wks Mon 10/14/02 Fri 10/25/02 3 Financial evaluation &final bid report I wk Mon 10/28/02 Fri 11/1/02 4 WB review of final report 2wks Mon 11/4/02 Fri 11/15/02 5 WB no-objection Odays Fri 11/15/02 Fri 11/15/02 11/15 6 Negotiation &preparation of contract award 1 wk Mon 11/18102 Fri 11/22/02 7 WB review of contract 2 wks Mon 11/25102 Fri 12/6/021 8 WB no-objection for contract award 0 days Fri 12/6102 Fri 12/6/02 1216 9 I Award contractfintemal processing 1 wk Mon 12/9102 Fri 12/13102 0 Effeciveness of contract Odays Fri 12/13/02 Fri 12t13/02 12/13 1 Contract execution 234 wks Tue 1/28/03 Mon 723/07
Technical assistance for Environmental Management Plan 661 days Mon 7/1/02 Mon 1/10/051 (QCBS) 4 B Special procurement notice 2 wks Mon 7/1/02 Fri 7/12/02 5 : Submission of expressions of Interest 4 wks Mon 7/15/02 Fri 8/9/02 6H Preparation of short list 2 wks Mon 8/12/02 Ffi 8/23/02; WB review of short List 1 wk Mon 8/26102 Fri 8/30/02 WB no-objecton for short list 0 days Fri 8/30102 Fri 8/30/02 8/30 PreparationC i3 of TOR & RFP 2 wks Mon 7/15102 Fri 7/26/02 ;
93 Ba'albeck Water and Wastewater Project Attachment to Annex 6 Procurement Plan _ ! I - 12001 2002 !2003 12004 12005 12006 12007 e0 Task Name Duraton Start Finish Hi H2 HI | H2 H H2 I Hi H H H2 I HI H2 HI H2 0 WB review of RFP 2 wks Mon 7/29/02 Fri 819/02 1 WB no-objecUon for RFP 0 days Ff1819/02 Ffi 8/9/02 2 Issuanoc of RFP 6 wks Mon 9202 Fri 10i11i/02 [j- 3 Submission date / bids opening 0 days Fri 10/11/02 Fri 10/11/02! + o1/11 4 Technical evaluaton (TE) & TE report 2 wks Mon 10/14/02 Fri 10/25/02' 5 WB no-objection 2 wks Mon 10/28/02 Fri 11/8/02 Financial envelopes opening 2wks Mon 11/11/02 Fri11122/021 71 Finandal evaluabon &final bid report I wk Mon 11/25/02 Ffi 1i/29/02 8 WB review of final report 2 wks Mon 12W2/02 Fri 12/13102 WB no-objection Odays Fri 12/1302 Fri 12/13/02 i12/13 Negoiation &preparation of contract award I wk Mon 12/16/02 Ffi 12/20/02 * I. WB review of contract 2 wks Mon 12/23/02 Fr 1/03 2 WB no-objecion for contract award 0 days Fri 1/3/03 Fri 1/3/031 Award contract/intemal processing 1 wk Mon 1/6/03 Ffi 1/10/03 . k Effeciveness of contract 0 days Fri 1/10iO3 Fri 1/10/03 .I 1/10 5 C ontract execution 164wks Tue 1/14/03 Mon i/10/05 L ... - - 6-. 7 StudIes In tie Wastewater Sector (QCBS) 401 days Mon M/20 Mon 12/13/04. 8 JM Special procurement nobte 2 wks Mon 6/2/03 Ffi 6/13/03 9 Submission of expressions of interest 4 wks Mon 6/16/03 Ff 7/11/03 0 Preparation of short list 2 wks Mon 7/14/03 Ff17/25/03! WB review of short List 1 wk Mon 7/28/03 Fri U1/03 | b1 2 WB no-objecton for short Ibst 0 days Ffi 811/03 Ffi 8/1/03! 81 3 I Preparation of TOR &RFP 2 wks Mon 6/16/03 Ffi 6127/031 WB review of RFP 2wks Mon 6/30/03 Ff17/11/03|
WB no-objecion for RFP 0 days Frii7/11/03 n 1 Issuance of RFP 6 wks Mon 8/4/03 Ff 9/12103| Subrnission date / bids opening O days Ffi 9/12/03 Ff 19/12/03* Technical evaluation (TE) & TE report 2 wks Mon 9/15103 Ff 9/26/031 WB no-objection 2 wks Mon 9/29/03 Ffri10/10/03i Financial envelopes opening 2 wks Mon 10/13/03 Ffi 10/24/03 1l Financial evaluabon &final bid report 1 wk Mon 10/27/03 Fri 10313/03
94 Ba'albeck Water and Wastewater Project Atachment to Anex 6 Procurement Plan 2001 2002 12003 2004 12005 12006 12007 0 ! Task Name Duration Start Finish HI H2 Hi I H2 Hi H2 I HI I H2 Hi H2 I HI H2 I HI H2 2 WB review of final report 2wks Mon11/3/03 Fri 11/14/03. 3 WB no-objecton Odays Fri 11/14/03 Fri 11/14/03 .+ 11I14 4 Negotiation & preparation of contract award 1 wk Mon 11/17/03 Fri 11/21/031 5 WB review of contract 2wks Mon11/24/03 Ffi12/5/03 6 WB no-objection for contract award 0 days Fri 12/5/03 Fri 12/5/03 11&,1215 Award contractintemal processing 1 wk Mon 12/8/03 Fri 12/12/03 I . 8 Effeciveness of contract 0 days Fri 12/12/03 Fri 12112103 r 112/12 9 dContract execution 52wks Tue 12/16/03 Mon 12/13/04
1 institutional Buliding -TSU (lndlivdual Consultints) 1680 days Wed 8U1/01 Tue 1/8108 2 First 3 Experts 1680 days Wed 811/01 Tue 1/8/08 3 3 Preparation of TOR 4 wks Wed 8/1/01 Tue 8/28/01 4 WB no-objecion 1 wk Wed 8/29/01 Tue 9/4/01 5 Spedal procurement notice 2 wks Wed 9/5101 Tue 9/18/01 6 Submission of Cvs 8wks Wed 9/19/01 Tue 11/13/01 7 Evaluation and selection 25 wks Wed 11/14/01 Tue 517/02 8 WB no-objecion 0 days Tue 5/7/02 Tue 5s7/02 9 Preparation of contract award 4 wks Wed 5/8/02 Tue 6/4/02 0 Effeciveness of contract 0 days Tue 6/4/02 Tue 6/4/02 6/4 1- Remaining Expert 1460 days Wed 6/5102 Tue 1/808 2 Preparatbon of TOR 4 wks Mon 7/1/02 Fri 7/26/02 3 WB no-objecton I wk Mon 7/29/02 Fri 8/2/02 4 i3 Special procurement notice 2wks Mon 8/5/02 Fri 8/16/02 5 Submission of CV's 4 wks Mon 8/19/02 Fri 9/13/02 6-- Evaluation and selection 2 wks Mon 9/16/02 Fri 9/27/02 WB no-objecion 0 days Fri 9/27/02 Fri 9/27/02 . 27 Preparation of contract award 2 wks Mon 9/30/02 Fri 10/11/02 9 {3 Effeciveness of contract 0 days Fri 11/29/02 Fri 11/29102 . 11/29 0 Contract execution 292 wks Wed 6/5/02 Tue 1/8/08
2 Training ActivItts for Water Authorities (QC & LCS) 861 days Fri 1/3/0i Fri 4/21/06 7 Equlpment Pacdages for TSU (i S1&1NS) 275 days Wedii;W Tue 120/04 .
95 Disbursement The Loan for US$43.53 million will be disbursed during Project implementation over an expected period of five years. Managing the project funds and all related financial transactions, including preparation and submission of disbursement applications throughout the project will be the responsibility of CDR However, payments made for eligible expenditures prior to the Loan signature date but after March 2002, in an aggregate amount not to exceed the equivalent of US$4,353,000 will be reimbursed to the Government upon presentation of a withdrawal application.
The allocation of Loan proceeds by expenditure category are summarized in Table C.
Table C: Allocation of Loan Proceeds
Category ALoount of the % of Expenditures to be Financed (US$) (1) Works (i) Water 11,160,000 85% (ii) Wastewater 14,175,000 (2) Goods, Equipments & Vehicles 100% of foreign expenditures, 100% of local expenditures (ex-factory 418,000 cost) and 85% of local expenditures for items procured locally (3) Service Contract(s) Fees 95% of local expenditures for services of consultants domiciled 7,067,000 within the territory of the borrower 7,067,000 and 92.5% of foreign expenditures for services of other consultants
(4)Consultante_r_v_ic`'sand traininig - 95% of local expenditures for services of consultants domiciled 6,990,000 within the territory of the borrower 6,990,000 and 92.5% of foreign expenditures for services of other consultants (5) Incremental operating Cost 278,000 90% (6) Front End fee 435,300 Amount due under Section 2.04 of 435,30 _the Loan Agreement (7) Premia for interest rate caps and interest O Amount due under Section 2.09 (c) rate collars of the Loan Agreement (8) Unallocated 3,006,700 Total 43,530,000
Documents for Withdrawals
The borrower has indicated that the traditional method of disbursement will be used for this project. This position was confirmed during negotiations. This method includes the use of Statements of Expenditures (SOEs) and the replenishment of SAs will be based on receipt of appropriate documentation.
96 Use of Statements of Expenditures (SOEs)
During implementation, SOEs will be used for all expenditures for: (i) works under contracts costing less than US$1,000,000 equivalent each; (ii) goods under contracts costing less than US$200,000; (iii) services under consultant firms contracts costing less than US$100,000 equivalent each and under individual consultant contracts costing less than US$50,000 equivalent each; and (iv) training under contracts costing less than US$25,000 equivalent each, under such terms and conditions as the Bank shall specify by notice to the Borrower. The supporting documentation would be maintained by CDR and made available for review by Bank supervision missions upon request, documentation relating to SOEs would be retained for up to one year from the date the Bank receives the audit report for the fiscal year in which the last withdrawal from the loan account was made.
Special Account (SA) To facilitate project implementation and make timely payments of the Bank's share of eligible expenditures to contractors, suppliers, consultants and others, CDR will open a US Dollars SA at the Central Bank of Lebanon with authorized allocation of US$3 million and an initial deposit of US$1 million, and the full allocation could be claimed when disbursements reach US$5 million. Replenishment of the SA would follow Bank's procedures, and a Bank's statement of SA transactions would support all replenishment applications. The minimum amount for applications regarding direct payments and special commitments would be 20% of the respective authorized allocations to the SA. Requests for replenishment of the SA will be submitted on a monthly basis. The SA would be audited annually by independent auditors acceptable to the Bank and the audit report should be submitted to the Bank for review no later than six months after the end of each project fiscal year.
97 Annex 6(a): Financial Management
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
I. Current Financial Management Practices
Financial Management at CDR
1. CDR, throughout the project, will be responsible for managing the project funds and all related financial transactions. CDR is a public authority established to be the Government's arm for planning and implementing projects for economic development and for rehabilitation and reconstruction of public infrastructure. To bypass the Government's administrative routine, CDR was granted exceptional authority and was exempted from laws and regulations applicable to the public administration. This authority has and is still allowing CDR to implement projects within shorter time frames than other Government agencies and ministries.
2. CDR's financial system was assessed, based on the Bank's new FMR (Financial Monitoring Reports) Guidelines, by examining the accounting system, accounting policies and procedures, budgeting system, reporting, staffing, internal controls policies and procedures, internal auditing and external auditing arrangements. This assessment showed that the system in place at CDR is based on principles and procedures defined by the legal framework and operational decrees applicable to CDR. The control environment at CDR was found to be adequate; however, the financial system lacks the support of a budgeting module and requires enhancement to become capable of generating timely project reports.
3. An effective organization and financial structure characterize the control environment at CDR Segregation of duties and responsibilities such as invoice processing, accounting duties and issuance of payments is well observed in the day-to-day transactions. CDR records are subject to post audit by the Government Court of Accounts, and an external independent auditor performs the annual audit to its financial statements. CDR's accounting policies follow fund accounting on cash basis principles, and the consolidation of the 7 funds created by CDR generates the Council's financial statements. Bank-financed projects and other international donors are accounted for under funds 1 and 4 being the "Revenues et Comptabilite des Projets" funds. CDR's financial system uses the signed contracts as cost allocation centers, without any link to the financing source or activity. However, and in order to prepare the year- end Project Financial Statements (PFS), CDR links manually the expenditures under ongoing contracts to the funding source. For every new project, a separate ledger account is created in order to monitor the source of fumds and to reconcile the project SA opened at the Central Bank of Lebanon. All Bank- financed projects implemented by CDR have been based on traditional methods of disbursements using SOEs and direct payments.
4. During 1998, CDR embarked on the implementation of a comprehensive plan to modernize its Financial Management and Contract Monitoring systems and integrate them with project management and other information systems. This plan was supported in part by a Bank IDF grant in the amount of US$150,000. This grant partially financed the strengthening of the management information system to allow an interface between the various infornation systems of the finance, procurement and project physical progress. Among other outputs, CDR should produce a new chart of accounts that would have allowed adequate financial data for reporting that replies to project management requirements. Presently, CDR is revising the project targets and adjusting the plans for the completion of the tasks in order to bring the upgraded system into operation by end of year 2002. Meanwhile, and until the new system is fully operational, CDR is implementing interim arrangements capable of generating reliable project reports.
98 II. CDR's Interim System 5. CDR's system is capable to follow on financial transactions; however, to avoid the risk of CDR not being able to generate timely reports for project management and monitoring purposes, interim arrangements are being implemented to overcome this shortcoming in the system. Until CDR's upgraded system is fully operational, accounting and reporting activities related to Bank-financed projects and other international donors will be undertaken separately but in conjunction with CDR's control procedures and controls. To that end, CDR has appointed a full time Financial Officer who reports directly to CDR's Controller with a specific mandate to establish and operate this interim system. Presently, this officer is assessing the available accounting softwares in the Lebanese market, and softwares used by other Bank- financed projects implemented by other sector ministries, in order to draft the system TORs and proceed with the installation and configuration. The system should be able to account separately for each of the projects financed by international donors and implemented by CDR. This interim system is expected to be operational by mid 2002, thus CDR will be able to generate, quarterly, the project reports required under the project for monitoring and decision making. However, if this target date is not met and given the disbursement level during year one of the project, CDR will use, during this period, spreadsheet applications to follow on the project accounts and to generate project reports.
6. As the procedures of the above interim solution are not reflected in CDR's legal framework or operational decrees and in order to ensure the accuracy and completeness of the interim system data, CDR's management will introduce a new activity requesting the monthly reconciliation between CDR's main accounting system and the interim one. This will ensure the mirroring of all transactions in both systems. In addition, CDR's Finance Department will prepare an annex to CDR's manual of procedures outlining the interim system and detailing: - the Financial Officer's responsibilities within the Finance Department; - the chart of account which should reflect the classification of the main chart, where applicable, for easy reconciliation; - the budgeting process; - the reconciliation procedures, timing and output between the two systems; - the document flow; - the frequency and forms of the financial reports; and - others.
III. Flow of Funds and Controls 7. All invoices for advance payments or for incurred expenses will be subject to CDR's controls and procedures, which are considered adequate, and will be honored through payments issued by CDR. CDR's Finance Department will be responsible for the project funds and for the management of the SA, as is the case in other Bank-financed projects implemented by CDR. CDR will transfer funds from the loan account to the project's SA, opened at the Central Bank. Deposits into and payments out of the SA, to pay contractors/consultants, will be made in accordance with the provision of the Loan Agreement.
IV. Project Reports
8. Quarterly: CDR will generate Financial Monitoring Reports and submit them to the Bank as part of the project progress report, or separately. These reports are made up of:
99 * Financial Reports: to include a cash flow statement, beginning and ending project cash balances and an expenditure report comparing actual and planned expenditures in addition to the SA reconciliation statement. In addition, a narrative report explaining all variances that exceed 15% when compared to plan, and the proposed corrective actions, should be included as an annex to the financial reports.
* Physical Progress Reports: to include narrative information and output indicators linking financial information with physical progress.
* Procurement Reports: providing information on the procurement of the Service Contract(s), goods, works, services, training and selection of consultants showing procurement performance against plan, including information on all authorized contract variations. These reports should be remitted to the Bank within 45 days from the end of the quarter. The proposed format of reports is attached and was agreed upon with the Borrower during negotiations.
9. Annually. Audited Project Financial Statements will be submitted to the Bank. PFS, will include: (i) Statement of sources and utilization of funds, indicating funds received from various sources, project expenditures. (ii) Appropriate schedules classifying project expenditures by component, showing yearly and cumulative balances. (iii) Special Account Reconciliation Statement.
V. Auditing Arrangements 10. CDR will remit to the Bank not later than six months after the end of each year the audit report of the project. The extenal audit report shall encompass all the project's activities and shall be in accordance with internationally accepted auditing standards e.g., International Standards on Auditing (ISA). The annual audit report of the project accounts shall include a separate opinion as to whether the SOEs submitted during such fiscal year, together with the procedures of internal controls involved in their preparation, can be relied upon to support related withdrawals. Also, the audit report shall include a separate opinion on the SA reconciling opening and year-end balances. In addition to the audit reports, the auditor will prepare a "management letter" identifying any observations, comments and deficiencies, in the system and controls, that the auditor considers pertinent, and shall provide recommendations for their improvements. The external independent auditor should be acceptable to the Bank and his TOR will be prepared and submitted for the Bank's no-objection, at least nine months prior to the end of the project fiscal year. VI. Disbursement Arrangements 11. To ensure that funds are readily available for project implementation, a SA in US Dollars will be opened at the Central Bank of Lebanon and will be operated by CDR Initially, an advance for the equivalent of about six months' expenditures will be transferred to the SA upon effectiveness of the Loan and receipt of a signed withdrawal application. The maximum amount of this initial advance is estimated at US$1,000,000 equivalent. Replenishment applications will be prepared and submitted to the Bank by CDR. Authorized signatories, names and corresponding specimens of their signatures will also be submitted to the Bank.
100 12. During negotiations, the Borrower opted to replenish the SA using traditional methods of disbursements by means of SOEs and using the SA for those expenditures below the threshold, and direct payments accompanied by supporting documentation for the balance.
VII. Bank Supervision
The requirements on Bank supervision will initially intensify to ensure that the interim system is implemented and integrated with CDR's Finance Department. The first supervision mission after effectiveness will then take the form of a launch workshop where a seminar on Bank rules, regulations and guidelines will be presented. The project will be supervised every four months for the first eighteen months, then every six months thereafter. Bank supervision missions will consist of visits to CDR to review financial management practices, procurement methods, payment procedures and documentation, in addition to field visits to the project site and other agencies concerned.
101 Financial Monitoring Reports (FMR) Quarterly Reports
Table of Contents
Financial Report
1-A Project Sources and Uses of Funds
l-B Uses of Funds by Project Activity
1-C Special Account Reconciliation Statement
Progress Reports
2-A Output Monitoring Report (Unit of Output by Project Activity)
Procurement Reports
3-A Procurement of goods (Not subject to prior review)
3-B Procurement of Works (Not subject to prior review)
3-C Selection of Consultants (Not subject to prior review)
102 Report l-A Financial Monitoring Report (FMR) LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Project Sources and Uses of Funds For the Quarter Ending xxxx Currency Unit (US$)_ Period Cumulative Receipts Government Funds IBRD Funds Total Less Payments by Project Component Civi Works Construction of house connections & distribution lines in Phase-I area (incl. O&M) Construction of house connections in Phase-Il area Construction of wastewater network Land expropriation Physical improvement to the WWTP Preparation of a storage area for the sludge effluent at the WWTP Tertiary treatment at the WWTP Extension of the effluent discharge pipe at the WWTP Measures to improve the engineering design of WWTP O&M for Transition Phase Goods Office automation, fumiture, information technology and vehicles Service Contrawds) Service Contrct for the water facilities Service Contract for the wastewater facilities Consultantsand Trainin, Preparation of tender documents Studies in the wastewater sector (updating masterplan and new design) Training programme Technical Support Unit (TSU) for the BHWIA, CWA and ZWA Environmental Management Plan Supervision For construction of house connections & distribution lines in Phase-I area For O&M of house connections and distribution lines in Phase-I area For O&M of Transition Phase For construction of house connections in Phase-Il area For construction of wastewater network For extension of the effluent discharge pipe For storage area of the sludge For the service contracts Operating Cost of the TSU & CDR Coordinator FrontEnd Interest or Charses- (Sumls) Deficit Total Payments Opening Cash Balance Project Account IBRD Special Account Closing Cash Balances Conmrising Project Account IBRD Special Account 103 Report 1-B (1/2) Financial Monitoring Report (FMR) LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Project Sources and Uses of Funds For the Quarter Ending xxxx Currency Unit (US$)
Period Cumulative PAD
Actual Planned Variance Actual Planned Variance Project Life
1.1- Capacity Building
(a)- Technical Support Unit for the BHWIA, CWA, ZWA and CDR Coordinator 3,185,754 (b)- Operating cost of the TSU 308,100 (c)- Office automation, furniture, information technology and vehicles for the TSU 540,144 1.2- Trainin (a)- Training programmne 510,625
(a)- Construction of house connections & 2,992,4 distribution lines in Phase-l area (incl O&M)2,946 (b)- Construction of house connections in Phase- 11,916,624
(a)- Construction of wastewater network 16,176,732
(b)- Preparation of a storage area for the sludge 749,841 effluent at the WWTP (c)- Tertiary treatnent at the WWTP 823,032 (d)- Extension of the effluent discharge pipe at the WWTP 351,900 (e)- Measures to improve the engineering design 284,832 of WWTP 8,3 (f- Land expropriation 262,500
4. 1- PcrepaJaton of Tender Docurnents (a)- For the storage area of the sludge effluent at the WWTP (b)- For Service contract for water supply and 75,390 sewerage (c)- For WWTP service contract 25,725 (d)- For the Management Contract 1,0 00
104 Report 1-B (2/2) Financial Monitoring Report (FMR) LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Project Sources and Uses of Funds For the Quarter Ending xxxx Currency Unit (US$)
Period Cumulative PAD Actual Planned Variance Actual Planned Variance Project Life 4.2- Studies (a)-Studies in the wastewater sector 510,000 4.3- Monitoring and Suoervision 1,546,836 (a)- For construction of house connections & distribution lines in Phase-I area (b)- For construction of house connections in Phase-Il area (c)- For construction of wastewater network (d)- For the storage area of the sludge effluent at the WWTP (e)- For the tertiary treatment at the WWTP (f0- For the extension of the effluent discharge pipe at the WWTP (g)- For the measures to improve the engineering design of WWTP (h)- Environmental Management Plan 368,892 5- Service Contracts(s) (a)- For the water facilities 5,766,266 (b)-For the wastewater facilities 1,672,468
Total I_49,201,000
105 Report 1-C Financial Monitoring Report (FMR)
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Special Account (SA) Statement as at xxxxx in US$......
I. Opening balance as at xx/x/yy
2. Add:
3. IBRD advance during the period (xx/llyy-xx/l/yy)
Withdrawal #
Withdrawal #
4. Less: Refund to IBRD from SA during the period (xx/lI/yy-xx/0l/yy)
5. Present outstanding amount advance to SA
6. SA closing balance as at xx/01/yy caried forward to next period
7. Add: Amount of eligible expenditures paid during quarter
8. Service charges (if debited into SA)
9. Less: Interest earned (if credited into SA)
10. Total advance accounted for.
11. Discrepancy (5) - (10) to be explained
Notes: Assuming SA currency is US dollars The discrepancy, which should be explained in a separate note, may comprise eligible expenditures paid out of SA but not yet entered by the SA bank, amount advanced by the Bank but not yet credited by the SA bank, etc.
106 Report 2-A Financial Monitoring Report (FMR)
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Output Monitoring Report as at xxxx Currency Unit (US$)
Project Activity Physical Progress Costs Physical Progress to Plan To Completion to date (Actual) date Planned Varance Revised Original Units Percentage Actual Planned Units Percentage Costs Total Completion Total Completion ______~~~~~ ~~~~~date ~~~~~cost ~~~~~costdate Sector development: -No. of Water Connections Phase One Phase Two -No. of Wastewater Connections -Length of Wastewater network -Length effluent discharge pipe _ Service Contract(s) -Water -Wastewater Training Program Consulting services - Preparation of Tender documnents -Supervision Contract XX Contract YY Contract ZZ ______Major Maintenance -Water - Wastewater _
107 Procurement of Goods (not subject to prior review) Report 3-A
Schedule (Date and Time)
No. Description REF # Estimate Pr. Start doe. Adverts Bid Bid Evaluat. # of bids Contract Contract Final Original Final Supplier (USS) Method Prep. Invitation Opening Completed submitted Signed End Date Delivery Contract Contract Name Amount US$ Value
= ______Plan = =____= Actual =_
_ _ _ _ Ian _ _ _ _ _Pla
Plan .. _ __cW~~ Actual
_ _ _ Ian ______Pla
__ __Actual _ _ _ _ _ I~~~~Pan ______
=_= Actua =_ P l_an ______
A ctua
Total Cost
108 Procurement of Works (not subject to prior review) Report 3-B
Schedule (Date and Time) No. Description REF # Estimate Pr. Start doc. Advertis. Bid Bid Evaluat. # of bids Contract Contract Complete Orinal Final Cont. Name. (US$) Method Prep. InvItatIon Opening Completed submdited Signed. End Date Constructn Contract Contract Amiount Amiount USS Value
= ______Plan Actual
Plan ______Actual
IPan Actual
Plan Actual
Plan _ _ =___=_= lActuLal
Plan =__=Pn_- Actual _
Plan______Actual
Plan______
Actual ___
Totald Costl_ I I X
109 Selection of Consultants (not subject to prior review) Report 3-C
Schedule (Date and Time)
No. Description REF # Estimate Selection AdvertiLs. Preparation Stat RFP Send out Proposal T. Eval. Evaluat. Contract Contract Final Original Final Consult. Nrse (US$) Method of Short List doc. Prep. RFP Opening Completed Completed Signed End Date deflvery. Contract Contract Amount Amount us$ US$
Plan Actual
Plan Actual
Plan Actual
______~~~~~~~Plan _ __ Actual
Plan Actual
Plan Actual
Plan Actual
______~~~~~~~Plan______Actual Total Cost
110 Annex 7: Project Processing Schedule LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Project Schedule Planned Actual Time taken to prepare the project (months) 8 First Bank mission (identification) 04/05/2001 04/05/2001 Appraisal mission departure 01/07/2002 02/01/2002 Negotiations 03/18/2002 04/01/2002 Planned date of effectiveness 01/01/2003 Prepared by: Council for Development and Reconstruction / Ministry of Energy and Water / Water Authority Preparation assistance: - BTD studies, ERRP studies, and Consultants. Bank staff who worked on the project included: Name Specialty Mohammed Benouahi, MNSIF Task Team Leader Richard Verspyck, AFTU2 Lead Water and Sanitation Specialist Alexander Bakalian, LCSFW Senior Water Supply Specialist Dominique Bichara, LEGMS Sr. Counsel Nawaf Al-Mahamel, LEGMS Counsel Andrina Ambrose, LOAGI Sr. Financial Management Specialist Nadjib Sefta, MNACS Procurement Adviser Amir Al-Khafaji, MNSIF Lead Operations Specialist Manuel Schiffler, MNSIF Sr. Economist Suhail Jme'An, MNSIF Private Sector Specialist Sherif Kamel Arif, MNSRE Regional Environmental Coordinator John Keith Rennie, MNSRE Sr. Social Scientist Robert Bou Jaoude, MNACS Financial Management Specialist Imad Saleh, MNACS Procurement Specialist Sati' Arnaout, MNSIF Institutional Specialist (Consultant) Randa Nemer, MNSIF Environmental Specialist (Consultant) Lars Rasmusson, MNSIF Sanitary Engineer (Consultant) Mohammed Lahouel Economist (Consultant) Maha Yahya Urban/Community Development Specialist (Consultant) Mouna Couzi, MNCLB Program Assistant Afifa Alia Achsien, MNSHD Program Assistant Thouria Nana-Sinkam, MNSIF Language Program Assistant Tuyet N. Chuppe, MNSRE Program Assistant
111 Annex 8: Documents in the Project File
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
A. Project Implementation Plan
Project Implementation Plan (PIP) available
B. Bank Staff Assessments
* Infrastructure Notes October 2000 * Social Assessment Report to Measure the Outcomes of Beneficiary Participation and Learning across proposed Subprojects * Lebanon Social Protection Note
C. Other
* Ba'albeck Wastewater Treatment Works, Design Improvement, May 2001 * Study and Design for the Implementation of Service Distribution Connections and Distribution Networks, September 2001 * EA Update, November 2001 * Archeological Survey and Chance Find Procedures * Environmental Review of the Water Supply System of Ba'albeck and Nabi Chit Area * Environmental Review of Wastewater Treatment Plant * Detailed Project Description and Cost Estimates * Service Contract(s) - Cost Estimates * Detailed Institutional Review * Detailed Financial Projections * Detailed TSU TORs * Land Acquisition Plan
112 Annex 9: Statement of Loans and Credits LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project 02-Apr-2002
Difference between expected Original Amount in and actual USS Millions disbursements Prject ID FY Purpose IBRD IDA Cancel. Undlsb. Orig FrmnRevd P071113 2001 Le-COMMUNrTY DEVELOPMENT PROJECT 20.00 0.00 0.00 20.00 0.25 0.00 P045174 2000 LB-GENERAL EDUCATION 56.57 0.00 0.00 55.39 15.49 0.00 P050544 2000 LB-FIRST MUNICIPAL INFRASTRUCTURE 80.00 0.00 0.00 74.05 19.55 0.00 P038687 1998 VOCATIONAL &TECH.ED 83.00 0.00 34.00 28.38 47.58 1.00 P038674 1997 LB-NATIONAL ROADS 42.00 0.00 0.00 28.55 28.35 2.95 P034037 1997 AGRI.INFRA.DEVEL. 31.00 0.00 7.00 14.82 17.52 0.00 P034035 1990 LB-ADMIN. REHAB. 20.00 0.00 0.00 4.74 4.74 3.24 P005345 1995 SOLID WASTEtENVIRONMENT 55.00 0.00 30.00 18.90 48.90 40.01 P034004 1995 HEALTHPROJECT 35.70 0.00 000 23.88 23.88 21.18 P005344 1994 LB-IRRIGATION 57.20 0.00 0.00 18.20 18.20 0.00 P005340 1994 LB-TA FOR REVENUE ENHAN 19.90 0.00 0.00 8.43 8.43 9.43 Total: 480.37 0.00 71.00 293.34 230.87 34.78
LEBANON STATEMENT OF IFC's Held and Disbursed Portfolio Jan-2001 In Millions US Dollars Commied Disbursed IFC IFC FY Apprval Company Loan Equtty Quasi Parlic Loan Equty Quasi Panic 1997 ADC 3.33 0.00 000 000 3.33 0.00 0a00 oo 1993/96 BBAC 2.81 0.00 0.00 3.59 2.81 0.00 0.00 3.59 Bank ofn eint 8.31 0.00 0.00 0.00 6.31 0.00 0.00 0.00 1997 Banque Audi 9.81 0.00 0.00 0.00 9.81 0.00 0.00 0.00 1993196/98 Banqur8Saradar 0.00 11.00 000 0.00 0.00 11.00 0.00 0.00 1997/99 Bybks Bank 22.83 0.00 0.00 19.96 22.83 0.00 0.00 19.98 1993/96/99 CimernterieNatl 4.40 0.00 0.00 5.80 4.40 0.00 0.00 5.60 1995 FTML Servlces 0.00 0.00 100 0.00 000 000 1000 000 1997 Fransabank 2.70 0.00 0.00 3.42 2.70 0.00 0.00 3.42 1993/94/99 Idart 5.00 1.50 0.00 0.00 5.00 1.50 0.00 0.00 1998 Idarat SW 3.00 0.00 0.00 0o00 300 0.00 0.00 0.00 1938 Leb. Credlt Ins. 0.00 0.50 0.00 0.00 0.00 0.50 0.00 0.00 2000 Lebanese Leasing 6.00 0.00 0.00 0.00 6.00 0.00 0.00 0.00 1995/9901 Ub8no-Francelse 5.83 0.00 0.00 7.89 5.83 0.00 0.00 7.69 1994J96 SGLEB 422 000 00o 589 4.22 000 0.00 5.89 1994/96 UnLicemmic 0.00 0.00 0.80 0.00 0.00 0.00 0.80 0.00 1993 Total Poutfoigo: 76.04 13.00 10.80 46.15 76.04 13.00 10.80 46815
Approvals Pending Commitmren FY Aproval Conmpany Loan Equity Quasi Partic
Total Pending Commitment: 0.00 0.00 2.00 0.00
113 Annex 10: Country at a Glance LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project M East Upper- POVERTY and SOCIAL s North middle. Lebanon Africa Income Development dlamond 2000 Population. mid-year (millions) 4.3 296 647 Life expectancy GNI per capita (Atlas method, USS) 4.010 2.040 4 .f20 GN I (Atlas method, USS bIlIons) 17.4 802 2.986 Average annual growth, 109440 Population (X) 1.6 2.0 1.3 Labor force (IX) 2.7 2.8 2.0 GNI Gross per primary Most recent stimate (latest year available, 109440) capita enrollment Poverty (%of populstion below national poverly llne) Urban populatin (9 of total populetIon) 90 59 76 Life expectancy at birth (years) 70 88 69 Infant mortality (per 1,000 live births) 2f 44 28 Child malnutrition (96 of children under 5) 3 Access to improved water source Access to an Improved water source (X ofpopulatIon) 100 89 87 illiteracy (X of populatIon age 15+) 14 35 10 Gross primary enrollment (9 of school-age popultIon) 111 95 107 Lebanon Male 113 102 106 Upper-middle-income group Female 108 88 105 KEY ECONOMIC RATIOS and LONO-TERM TRENDS 16O0 1000 1999 2000 Economic raUos' GDP (USS billions) .. 2.8 16.5 1 6.5 Grossdomesttc investmentUGDP 17.8 21.8 18.1 Exports of goods and services/GDP . 18.0 11.6 13.0 Trade Gross domestic savings/GDP -64.1 -4.4 4.7 Gross national savings/GDP 21.8 1.5 -0.5 Current account balance/GDP 4.0 -20.1 -18.6 Domestic Ie/ Interest payments/GDP 0.4 1.3 18 savingS Investment Total debt/GDP 62.7 50.2 61.3 Total debt service/exports 3.3 10.6 14.6 Present value of debt/GDP 5 1.6 Present value of debUexports 305.1 Indebtedness 1Ss0-90 109040 1909 2000 200044 (average annual growth) GDP 6.0 1.0 0.0 3.1 Lebanon GOP per capita 4.2 4.4 -1.3 1.3 Upper-middte-income group Exports of goods and services 9.7 1.0 12.4 11.0
STRUCTURE of the ECONOMY 1080 1090 1990 2000 Growth of Investment and GOP I%) (%of GDP) 1. Agriculture 11.9 1.`19 Industry 22.0 22.0 2 _ Manufacturing 10.3 10.3 Services 66.1 66.1 - 0 _ I o 5 Private consumption 139.6 89.9 87.8 o4 General government consumption 24.6 14.4 18.9 Imports of goods and services 99.9 37.5 37.8 GDI CGDP
1080490 100040 1900 2000 Growth of exports and Imports (%) /average annual grovwth) Agriculture 1.8 1.1 1.1 " T Industry -1.6 1.1 1.1 o4-+ Manufacturing -4.3 1.1 1.1 Services 4.1 1.1' ' 20; Private consumptlon 3.2 -0.3 -2.4 o General govemment consumption 4.3 24.6 31 5 Gross domestic investment 8. -25.0 -1i63 Exports lmports Imports of goods and services 1.4 -12.9 0.7
Note: 2000 data are preliminary estimates. The diamonds show four key indicators In the country (in bold) compared with Its Income-group average if data are missing, the diamond will be incomplete.
114 Lebanon
PRiCES and GOVERNMENT FINANCE 1980 10W 1f9f 2000 tdbton I%) DrsneSOc prkes 1 (9Cchange) Is Consumer prices .. 68.9 0.3 -0.4 ImplIcit GDP deflator .. 15.6 0.2 -0.4
Government finnce o (%of GOP, indldes cunnt grants) 0 5 go 97 9s cs Current revenue .. 8.4 19.6 18.7 - Current budget balance .. -31.3 -9.9 -19.6 - GDPdoestor : CP1 Overall surplus/deficIt .. -33.0 -16.5 -21.7
TRADE 1980 1990 1m 2000 Export and knport lveI (USSmIll.) (US$ mSllons) Total exports (fb) .. .. 895 712 IZ,o. Uvestock, animal, and vegetable products . 230 248 Fats and ogs . .. 112 117 15*0D Mamufactures ...... 7,0* Total Imports (cn (d,207 6,22S s,000 Food . Fuel and energy .. .. 2.*00 Capital goods ......
Export price Index (1995=100) .. .. 103 105 t4 t5 ts as got lmport price Index (1995=100) .. .. 104 107 MExpros EIniorts Terms of trade (1995-100) .. .. 99 99
BALANCE of PAYMENTS 1980 1900 1999 2000 Currant account balance to GOP (%\ (US$ n7g1hns) Exports o goods and servyces .. 511 1.912 2,141 0 Imports of goods and services .. 2.836 8,207 6,228 - _i Resounre balance .. -2,326 -4.295 -4,087 - Net Income . 22 ass 932 -20 Net current transfers .. 1,818 90 90 Current account batance .. 115 -3,317 -3,065 FInancIng Items (net) .. -412 3,678 2,776 40 Changes In net neserves 297 -251 289 _
Reserves including gold (USS mnlons) 10,405 8,420 Conversion rate (DEC. b=aWSS) 695.1 1,507.8 1,507.5
EXTERNAL DEST and RESOURCE FLOWS 1980 190 1e0 2000 (USS mSilns) Compoiton of 2eoo debt (US mll.) Total debt outstanding and disbursed 610 1,779 8,304 10,112 IBRD 27 34 234 248 24S :20 IDA 0 0 0 0 G: 2,541 E: 459 Total dewt service 63 90 298 448 IBRD 5 11 25 31 IDA 0 0 0 0 ComposIIon of net resource flows Oftilca grants 199 213 III 63 Official creditors 43 -22 118 98 Prvate crditors 70 6 1,129 Foreign direct Investtent 0 6 740 888 Poriloequlty 0 0 129 67 F:d244 World Bank pogram Commitments 0 0 0 137 A -[ORD E -Blatersl Disbursements 8 0 49 42 8 -IDA D -Otwerrmtlaterl F -Private Principal repayments 3 7 12 17 CC-IMF G- Sho-term Net lOWs 5 -7 36 28 lnterest payments 2 4 13 14 Nettransfers 3 -11 24 12
Development Economics 9/5101
115 Annex 11: Guidelines for the Preparation of Tender Documentation for a Service Contract(s)
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
1. Background
The proposed Ba'albeck Water and Wastewater Project (the project) provides a continuation of the Emergency Recovery and Reconstruction Project (ERRP) that has now come to completion. The project will also be a forerunner for the establishment of a Beka'a regional water supply and wastewater authority for which a management contract on regional basis is envisaged.
The project will complement works completed under the ERRP on the provision of water supply facilities in the Ba'albeck Nabi Chit area by including additional distribution mains and service connections. The project will also include the extension of waste water collection systems for Ba'albeck and surrounding villages with the waste water to be discharged to the newly completed Ba'albeck wastewater treatment works.
The project will include a service contract for operation and maintenance of existing and proposed water production and distribution facilities in the Ba'albeck and Nabi Chit area and for existing and proposed wastewater collection systems for Ba'albeck and surrounding villages. The SC should be entered into at an early stage with the scope of works to be extended in pace with the completion of additional works. The existing water supply systems with relevant data are summarized in Annex 1 and the scheduling for and the specifics of new facilities to be added are shown in Annex 2. The existing and proposed wastewater collection systems, including a schedule for their extensions, are described and shown on Annex 3.
The Ba'albeck wastewater treatment works will be operated and maintained by the contractor during a 12-month period. Since the treatment works for various reasons might not be commissioned before end 2002, the contractor would remain responsible for operation and maintenance until end 2003. Thereafter, it should be considered whether to continue with ongoing arrangement or to possibly include the treatment works under the SC referred to under paragraph 3. This matter is for later consideration and no specific provisions would be made for the SC (paragraph 3) to be entered into at this stage.
2. Scope of Works
The consultant services to be included under these terms of reference are summarized as follows: (a) the preparation of tender documentation for a SC to cover water production and distribution facilities for the Ba'albeck Nabi Chit area and the waste water collection system for Ba'albeck and surrounding villages; (b) assistance to be provided in the evaluation of bids and in the preparation of an evaluation report; and (c) assistance to be provided in the preparation of contract documentation.
The preparation of tender documentation should be based on the following assumptions: (a) Appropriate World Bank standard bidding documents. (b) The SC should include all activities relevant to operation and maintenance but to exclude billing and collection, which will be handled by existing water authority. However, the monthly reading of consumer water meters should be included under the SC. 116 (c) The SC will initially be entered into for a period of two years with the possibility for an extension of another two years. (d) The SC should take into account the inclusion of additional facilities as they are completed. (e) Since no water authority staff is presently working on water supply and wastewater collection systems to be included under the SC, the service contractor will not be obliged to taking over any staff from the water authority.
The remuneration of the SC should be considered to be based on: (a) A fixed fee covering water and wastewater services that could either be based on individual water supply systems or on total systems. The fixed fee could be stated on a 6-month basis, for a 4-year period, to take into account additional works to be added. (b) An adjustable fee in order to create sufficient incentive for the Service Contractor. (c) The fixed and adjustable fees should be subject to cost adjustments based on relevant formulas to be prepared. (d) The cost for electricity from the grid should be paid for directly by the water authority, while the costs for operating the generators should be included in the fixed and/or adjustable fees.
The service contractors will be subject to post-qualification with relevant criteria to be given in the tender documentation.
The following is an indication of what should be attached to the tender documentation: (a) Lists of mechanical and electrical equipment and of different kind of works to be included for operation and maintenance under the SC including any information provided by respective equipment supplier. (b) The results from guarantee tests for commissioning and any outstanding liabilities for the contractor. (c) Projections to be made through 2006 on water to be delivered to consumers under various water supply systems. (d) Projections to be made on the length of wastewater collection mains to be added on a monthly basis to be included for operation and maintenance. (e) Information on existing workshops, storage areas, and office facilities that could be utilized by the service contractor. Anything additionally required by the service contractor including transportation would be at his expense to be recovered under the fees.
117 The preparation of the tender documentation should, inter alia, take into account and cover as appropriate: (a) The preparation of a condition assessment report at the beginning and at the end of the contract period. (b) The repetition of guarantee tests, as prepared at the completion of previous contract, at the end of the SC based on which functional guarantees and penalty clauses should be established. (c) At the taking over and thereafter every 12-month period the measurement of un-accounted for water, for individual water supply systems, by comparing quantities of water produced and delivered. This should serve as a basis for establishing requirements to be made on maintaining un-accounted for water within acceptable limnits and the possible introduction of relevant incentives. (d) The reporting to be needed for handing over at the conclusion of the SC. (e) Inspections to be made at the end of the period for liquidated damages with corrections, if any, to be carried out under the responsibility of previous contractor. (f) The submission by the bidders of a general operation and maintenance concept paper including proposals to be made on staffing deployment and relevant qualifications. This should serve as a basis for assessments to be made on the adequacy of bidders' understanding of services to be provided and the sufficiency of proposed staffing. (g) The service contractor would prepare operation and maintenance and equipment manuals to be updated as experience will be gained. (h) The service contractor would develop and implement a computerized maintenance program that could include equipment record cards, conditional and scheduled maintenance, standard maintenance procedures, and spare parts. (i) The service contractor should introduce applicable procedures and policies on health and safety taking into account the hazards in operating chlorination plants. (j) The service contractor should develop appropriate strategies to reduce energy demand with proper records to be maintained on energy consumption. (k) The service contractor shall develop a comprehensive water quality and quantity monitoring program including routine flow monitoring, sampling and laboratory analysis. Standards should be set on water disinfections and residual chlorine content. (I) The service contractor shall provide all equipment, materials and any other items as required for operation, maintenance or repair of various facilities and for calibration of water meters. This implies the maintenance of a stock of spare parts and consumables. A preliminary spare part management plan, to be provided with the bid, should be developed in line with alterations to be agreed during contract execution. At handing over, a complete set of spare parts and consumables should be provided on site in compliance with the approved spare part management plan. (m)The service contractor shall provide general and special tools necessary for the maintenance works, which should be handed over at the end of the contract period. (n) The service contractor should prepare regular progress reports, asset management report, condition assessment report, and hand over report.
3. Implementation of the Consultant Services
The consulting firm should submit draft tender documentation to CDR for review six weeks after signing of the consultant contract. Comments on the draft should be submitted within two weeks with final tender documentation to be submitted three weeks thereafter.
118 Annex 12: Institutional and Implementation Arrangement LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Project Finance Legal Dept. Dept. Dept. SC W
CDR TSU WB * Implementing Agency Advises WA and MOEW on: * Provide no objection * Signs contract with SC * Technical * Review and monitor execution of contracts * Procurement * Financial/tariff * Supervise the Project with specific attention to * Prepare contracts * Administration capacity building * Issue payments * TA and training program * Monitor procurement and disbursements * Manages special account * Legal * Review annual audits * Audits of project account and SA * Coordinates with WB WA SC MOEW * Supervises contracts (O&M) * Execute SC * Responsible for sector oversight and reform * Studies and proposes tariffs * Reports to WA and CDR * Approve tariff proposals * Manages TSU * Oversees WA * Prepares investments programs * Coordinates with Municipalities, MOEW and NGOs MOF * Countersigns the SC and supervision contracts * Borrower * Bills and collects * Approves tariffs with MOEW
119 Annex 13: Technical Support Unit
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Technical Support Unit
COR& MOEW
Team Leader..
| Senior Sallt Eee.ucr. |l.- -Senio.r Sai4ear . . -
-Senior Financial Analyst,, -,SeniorFinanca Aua-yst.
,.junlor Fl anacl -AiA a______
-SeAiofr . - OfIcem, IJunlor Ad,mllnis ve lcerl ef
Note: TORs for TSU senior staff are in the Project File
120 Annex 14: Key Performance Indicators
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
Component Unit 2002 2003 2004 2005 2006 2007 (Baseline)
A,SECTOR DEVELOPMENT INDICATORS 1-Inrrease inservice woverage: (a)Water % 41 48 70 92 96 96 (b)Wastewater % 13 26 40 66 67 67 2-UFW % 50 40 30 30 30 30
E PROJECT DEVELOPMENT INDICATORS 1-Population served: (a) Water (Cumulatve) no. 78,570 108,570 132,570 144,570 147,462 150,408 (b) Wastewater (Cumulative) no. 18,000 36,000 54,000 90,000 91,800 93,638 2-Length of network implemented under this project (a) Water (Cumulive) km 21 56 83 83 83 (b) Wastewater (Cumulative) km * 32 128 160 160 160 3-Number of subscribers: (a) Water (Cumuative) no. 13,095 18,095 22,095 24,000 24,577 25,068 (b- Wastewater (Cumulative) no. 3,000 6,000 9,000 15,000 15,300 15,606
4-Number of water metem installed under this no. 4,000 12,000 21,000 24,000 24,480 24,970 projectCumulative 5-Number of water meters Installed overall (Cumulabive) no. 4,000 16,000 36,000 39,515 40,405 41,313 5-BHWIA staffing no. 200 190 180 170 160 160
C-FINANCIAL INDICATORS (Water &wastewater) * 1-Revenue generated (forecasted) USS 1.1 2.37 4.29 3.72 3.74 3.81 million/year 2-Tariffs Fee (water) US$Iau.m. 90 90 90 90 90 90 Rate (water) USS/cu.m. 0.45 0.45 0.6 0.6 0.63 0.63 Rate (wastewater) USS/cum n/a 0.25 0.25 0.32 0.32 0.34 3-Coliction rats % 35 45 50 60 60 60
D.ENVIRONMENTAL INDICATORS 1-water supplied under this project (Cumulatve) cu.miyear - 2,628,000 4,599,000 5,256,000 5,361,120 5,468,430
2-wastewatercollected under this prject cu.m./year - 1,051,200 1,576,800 2,628,000 2,680,560 2,734,171
3-Wastewater eated Cum/year - 840,960 1,261,440 2,102,400 2,144,448 2,187,337
For infomnation purposes only 121 Annex 15: Training to the Water Authorities of Ba'albeck, Zahle and Chamsine
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
The three water authorities of Ba'albeck Zahle and Chamsine are facing significant challenges including unacceptable high levels of unaccounted for water (UFW), inefficient metering and billing systems and inadequate collection and payment rates.
Collecting, storing and regulating the supply of water throughout the year are also among the key issues facing the three water authorities in the Beka'a. Furthermore, declining rainfall and over-exploitation of underground resources coupled with the continuous discharging of untreated wastewater are all depleting the quality and quantity of the water resources in the region.
With the implementation of Service Contracts and the preparation of a Management Contract, private sector technical and financial resources would be harnessed to assist the three water utilities to reduce losses, improve financial management, recover operating and investment costs, and provide a higher quality and more reliable level of service. However, the above techniques require specialised financial, technical and environmental capabilities. A greater understanding of future challenges and a new set of human skills must be developed.
The proposed training shall address the above issues while improving the water authorities capabilities to design, develop, and implement public-private partnership in the water and wastewater sectors. The training would aim at providing the appropriate means to the three water authorities to increase operational efficiency and reduce UFW and other system losses. It will be mainly directed towards the officials, engineers, and legal staff of BHWIA, ZWA and ZWA and also at the officials from the newly established BRWIA and the MOEW that are responsible for planning, analysing and developing public and private water and wastewater projects.
The Technical Support Unit (TSU) shall identify appropriate training programmes provided by international water and wastewater utilities that could be solicited to provide support to the three water authorities in the Beka'a. The TSU would design also a programme of study tours that would include a series of site visits and technical briefings with international water industry and government officials responsible for water and wastewater infrastructure development, services, and regulation.
The maximum budget available for the training component under this project (including equipment, consumables, training facilities, hiring local and international experts and study tours is estimated at US$0.50 million. An indicative list of topics to be covered by the training is included in the table below:
122 Training to BHWIA, ZWA and CWA: Indicative List A- Reform In the Water and Wastewater Sector Measuring performance and standards of service delivery (benchmnarking) Examining technical and non-technical losses in the system Evaluating the management performance of the three water authorities through metering, billing, and collection Reviewing and assessing the financial capability of the three water utilities to rehabilitate existing assets, add new capacity, and cover operational and maintenance expenses Introducing models of water tariff reform that are essential prerequisites for service delivery improvements
B- Balancing Social and Economic PolIcy Goals In the Water Sector Determining the hidden cost of inadequate service Measuring and calculating the levels of affordability in urban and rural areas Introducing models and methods of cross-subsidisation Establishing minimum standards of quality, accessibility, and affordability which are key criteria for policy-making
C- Decentrallsing Operational Functions Promoting improved service delivery through citizen/customer-focused initiatives Introducing methods to change from a bureaucratic to an entrepreneurial organisation
D- Preparing the Legal and Regulatory Framework for Public-Private Partnerships Introducing enforcement mechanisms: minimum/maximum standards, tariff collections, etc.
E- Understanding the Appropriate Technique for Private Participation Service contracts and management contracts Operations and managenment contracts Performance contracts Concessions and lease agreements Build-Own-Operate (BOO), Build-Operate-Transfer (BOT) and Rehabilitate-Operate-Transfer (ROT) models
F- Methods of Effective "Unbundling" and Structuring of Water and Wastewater Projects Reducing technical and non-technical losses through structuring incentive contracts Techniques to improve metering and billing using service contracting techniques
G- Preparing Effective Bid Documentation Developing appropriate pre-qualification standards for national and intemational firms Preparing Request for Qualificatons (RFQ) Preparing the Request for Proposal (RFP) and defining the project scope, implementation requirements, evaluation criteria, and procurement processes
H- Designing Transparent and Innovative Evaluation Criteria Methods of evaluating price and non-price factors Quantitative models for developing evaluation systems Evaluating and comparing reasonable rates of return and price per unit
1- Negotiation and Award Understanding the key elements to a successful agreement/contract Introduce strategies for developing effective negotiating parameters and schedules
J- Effective Project Monitoring Procedures The role of the water three authorities as a contract monitor Developing key monitoring elements: Written reports, progress meetings, visual site visits, and audits Establishing performance criteria and enforcement procedures Developing an overall contract monitoring system for water and wastewater projects
K- Financial Management Budgeting General accounting Management accounting Intemal controls Resource mobilisation Administrative procedures Auditing (intemal and extemal)
123 Annex 16 :Environmental Assessment
LEBANESE REPUBLIC: Ba'albeck Water and Wastewater Project
INTRODUCTION
1.1 Background As part of the National Emergency Reconstruction Program (NERP), the design and construction of a water supply and distribution network for Ba'albeck was implemented under the ERRP that was funded through a World Bank loan. The water supply network was designed to meet the demands up to the year 2015 and to cover all villages falling between Ba'albeck and El Nabi Chit. The present population of the villages benefiting from the water network is approximately 250,000 inhabitants. Under the ERRP, the construction of the water supply and distribution network was implemented and covered all components (boreholes, transmission lines, reservoirs, chlorination station, distribution pipelines) except the house connections. Also, the operation and maintenance of the system was not included in the construction contract. Similarly to the water supply and distribution network, considerable efforts have been made to improve the wastewater system in Ba'albeck and the surrounding villages. Under the ERRP, around 20 km of wastewater pipelines were laid in the city of Ba'albeck, mainly in replacement of damaged or very old existing pipelines. Later on, the Council of Development and Reconstruction (CDR) initiated a new contract that included: (i) the construction of a wastewater treatment plant with a capacity of 12,500 cum/day to serve Ba'albeck and the surrounding villages up to the year 2008, (ii) the provision of approximately 7.4 km of trunk lines; and (iii) the operation and maintenance of the wastewater treatment plant for one year.
1.2 Project Objectives The major development objectives of the proposed Ba'albeck Water and Wastewater Project-BWWP (the project) include: (a) developing and strengthening the capacity of the Ba'albeck Hermel Water and Irrigation Authority (BHWIA) and the Zahle and Chamsine Water Authorities (ZWA and CWA);
(b) improving the access of the customers of the BHWIA to satisfactory water supply and wastewater services;
(c) involving the private sector in the operation and maintenance (O&M) of the water and wastewater facilities; and (d) rationalizing the use of water through the introduction of water meters.
124 1.3 Project components:
1. Institutional Development including: (i) Technical Support Unit (TSU) for the BHWIA, ZWA and CWA
(ii) Training for improving the capabilities of the water authorities to design, develop and implement public-private partnership in the water and wastewater sectors.
2. Improving and Increasing Service Coverage for Water Supply including:
(i) Implementation of 2,900 service connections to serve about 4,500 consumers and installation of 21 km additional water distribution lines with all their related fittings and accessories including the connections to the already executed network
(ii) Implementation of 13,100 service connections for all villages which are not included in Phase I to serve about 19,500 consumers and installation of 62 km of secondary and tertiary distribution lines.
3. Improving and Increasing Service Coverage for Wastewater Collection including:
(i) Construction of wastewater network to cover Ba'albeck city and the surround. (ii) Facilities and a Service Contract which covers the O&M of the wastewater treatment plant. (iii) Extension of the effluent discharge pipe. (iv) Physical Improvements to the operation WWTP. (v) Preparation of a storage area for the sludge effluent at the WWTP. (vi) Tertiary Treatment at the WWTP.
4. Service Contract including: a SC covers the water and sewerage networks and the water supply.
5. Consulting Services including:
(i) Preparation of Tender Documents and RFPs - For the storage area of the sludge effluent and the tertiary treatment at the WWTP (7%) - For the Service Contract for water supply and sewerage (including physical improvements to the WWTP) - For the Service Contract for the wastewater treatment plant - For the Management Contract for the whole of the Beka'a region (BHWIA, ZWA and CWA) (ii) Preparation of a development program for the future extension of the water supply and wastewater services (iii) Construction Supervision (iv) Environmental Management Plan (EMP)
125 1.4 Project Environmental Category: The proposed project has been reviewed and environmentally screened. The project has been classified as Category B, consistent with the provision of the World Bank Operational Policy 4.01, Annex C on Environmental Assessment (January 1999). The project focuses on the provision of water supply house connections and wastewater collection networks. The project does not finance construction of new facilities for water production, water treatment or wastewater treatment. Potential adverse environmental impacts during both construction and operation are restricted in magnitude and severity. The proposed project is expected to have major beneficial impacts on the environment, as it would provide proper collection of wastewater thus reducing surface and groundwater contamination. The project will also provide controlled water supply connections to the households and will reduce overdraft of the aquifer. It will also improve health conditions of the rural population by providing them with good quality domestic water from storage facilities. These potential benefits should outweigh the magnitude of the adverse environmental impacts arising from the construction of the water distribution and wastewater collection networks. 2. LEGAL AND REGULATORY FRAMEWORK
2.1 Regulatory Framework for Environmental Impact Assessment: Presently, the environmental framework of Lebanon is managed and supervised by the Ministry of Environment (MOE) that was created by law 216 of April 2, 1993 to be the Government institution responsible for the development of a national strategy for sustainable development. The MOE is undergoing several review procedures to up-date the country's environmental policies and regulations including the preparation of a code de l'Environnement, an Environmental Impact Assessment (EIA) decree, as well as norms and standards for environrnental protection.
The Environmental Impact Assessment (EIA) decree that was prepared by the MOE will require that an EIA be initiated during the planning process of both public and private development projects in Lebanon. As part of the EIA decree, two annexes have been prepared. Annex 1 lists the projects that are classified as Category A and would require a full environmental assessment study, while Annex 2 lists the projects that are classified as Category B. According to the draft EIA decree, water and wastewater projects are classified as follows:
(i) Water Supply:
Construction of dams and reservoirs: Category A Construction of a complete water supply system: Category A Construction of water supply treatment plants: Category B
(iu) Wastewater:
Construction of wastewater treatment plants: Category A Construction of sea outfalls: Category A Construction of a complete wastewater system: Category A Construction of wastewater collection network: Category B
126 The proposed project includes water supply house connections and wastewater collection networks and will therefore be classified as Category B. Although the EIA decree has not been passed by the Lebanese Government, EIA studies are being undertaken for most projects especially those that are being funded by International Organizations and Lending Agencies. EIA are being conducted based on the procedures developed in the draft EIA decree, which comply with the World Bank EA requirements.
2.2 Existing Environmental Legislation
Existing laws and regulations for environmental protection in Lebanon date as back as 1925. Ground and surface water resources have been protected since the introduction of Order No. 144 dated June 1925, which covered the major springs that supply the country's potable and irrigation needs. Protection against pollution was first addressed by Decree No. 8735 of October 1974 that prohibited the digging of wells for the disposal of raw sewage, banned infiltration from cesspits, and the use of sewage for the irrigation of vegetables and some fruits. A list of the most significant existing environmental legislation is given in Attachment Al of this Annex.
Decision No. 52/1 of July 1996 introduced measures to deal with the pollution of the air, water and soil, including national standards for drinking water, bathing waters and wastewater quality. Recently, Decision No. 8/1 dated March 2001 reviewed the previously issued wastewater standards to cover the discharge of wastewater to the sea, to surface water and to sewerage systems. However, standards for the re-use of treated effluents have not being addressed. Moreover for both drinking water and treated wastewater the Government did not develop any requirements with respect to sampling methods, locations, and frequency of analyses. Details of available standards for drinking water and wastewater discharges are given respectively in Attachments A2 and A3 of this Annex. Comparing the wastewater discharge standards used by the Government of Lebanon with the ones in the Pollution Prevention and Abatement Handbook, some important differences could be noted. For instance around forty different parameters are included in the Lebanese standards including almost all heavy metals. The maximum limit values required by the Govenmment of Lebanon for some parameters such as BOD and COD are more stringent than the ones specified in the Pollution Prevention and Abatement Handbook. The same does not apply to coliform counts where the Lebanese standards are 2000 MPN/ml compared with less than 400 MPN/ml in the Pollution Prevention and Abatement Handbook. Also the limit values of a number of heavy metals are much higher than the requirements of the Pollution Prevention and Abatement Handbook.
3. ANALYSIS OF THE ENVIRONMENTAL ISSUES
The project is designed to improve the quality and security of water supply and the collection and disposal of wastewater. Consequently, the impact especially on the social environment should be on the whole positive.
Once operational, most of the impacts of the project will be positive. The project will lead to better services to the population through the Management Contract and an improved environment as a result of the water supply house connections and wastewater collection network. A significant improvement in the chemical, biological and microbiological quality of the surface and ground water resources is expected. This will lead to considerable public health benefits for the residents of the area. In particular it is expected to result in a reduction in the incidences of water born diseases.
The wastewater treatment plant to treat municipal water was constructed under the ERRP. The wastewater treatment plant consists of secondary treatment using sludge activated process plus chlorination. The capacity of the WWTP is 12 500 cu.m/day with the possibility of extension to 25 000 cu.m/day after the year 2008. The treatment plant is designed to give a treated effluent that would 127 conform to the Lebanese standards with BOD = 35 mg/l and suspended solids = 30 mg/l. A full EA was not performed prior to the construction of the wastewater treatment plant. Instead, during project preparation, a post review was undertaken with respect to the sitting, engineering design, technical and environmental performance as well as any potential risks related to the construction or operation of the WWTP (see Attachment A7). In addition, an assessment of negative impacts that might arise from the water resources that are under construction and from the components of the proposed project was conducted. It was found that minor negative impacts are expected to arise especially during the construction of the proposed project. A summary of the expected impacts is given in the following sections.
3.1 Discharge of Treated Effluent Treated effluent will be either discharged into an open ditch or will be re-used for irrigation purposes. The existing outfall from the treatment plant, an 800 mm diameter pipeline in which treated wastewater flows by gravity around 1.2 km, discharges into an open ditch. Manholes have been installed along the outfall to enable pumping of the treated effluent for irrigation purposes. A major concern about the discharge of the treated wastewater is to avoid pollution of the ground water and soil, and public health risk. Another important issue is to ensure that the open ditch will have the capacity to take the additional flow and discharge it in an appropriate water body. An allocation for extending the outfall from the treatment plant and discharging the treated effluent into a drainage channel with suitable capacity has been made.
3.2 Effluent Quality
During project preparation, sampling and laboratory analyses of raw wastewater were also conducted to ensure that the existing WWTP is capable of treating the influent to the required standards. The projected loads for the design of the WWTP were found to be reasonable and sound. The design and performance of the WWTP were also reviewed and were found adequate for the production of a good quality treated effluent that complies with the World Bank standards (Pollution Prevention and Abatement Handbook) for discharge into receiving water bodies. In view of the water scarcity and the high demand for irrigation water in the project area, there is a great possibility that treated effluent would be re-used for irrigation purposes. A study on the potential re-use of treated wastewater was conducted. It was found that at present, raw wastewater is being used by farmers for the irrigation of around 20 hectares of agricultural lands specially during the dry months of the year. Once operational, the WWTP will provide treated effluent that could be re-used for irrigating about 225 hectares. Consequently, the effluent should be of acceptable quality so that it can be safely re-used for agriculture irrigation. In the absence of national standards for treated wastewater re-use, the effluent will have to meet the WHO quality guidelines for use in agriculture. One of the major parameter of concern is the level of nematodes, which should be less than one egg per liter for water used in agriculture. The other major concem is the concentration of toxics such as cadmium, lead, etc.
The existing treatment plant can ensure the removal of nematodes to less than one percent of the concentration in the raw wastewater entering the treatment plant. Therefore the presence of nematodes in the treated effluent will be directly related to their concentration in the raw wastewater. As soon as the wastewater treatment plant start operating monitoring of nematodes in the influent and effluent will be conducted. An allocation for the installation of filters for the removal of nematodes has been made in case the treated effluent does not meet the required standards with respect to nematodes.
128 3.3 Sludge Quality The sludge treatment processes of the existing treatment plan include: thickening, aerobic digestion, sludge dewatering and lime stabilization. These processes will ensure the elimination of toxics and pollutants in the sludge. However, dried sludge could be used by farmers as soil conditioner or fertilizer. In such case the sludge quality will have to comply with Food and Agriculture Organization (FAO), and WHO guidelines for the use of sludge in agriculture including the limit of less than one intestinal nematode egg per 100 gm of dry solids.
In the existing wastewater treatment plant, the adopted sludge process is classified as PSRP (Process to significantly reduce pathogens) and may not guarantee the un-restricted re-use of the sludge for all types of agriculture products. Consequently, it would be necessary to adopt an additional process to further reduce pathogens below detection limits.
Therefore, in addition to the sludge treatment processes that have been included in the existing treatment plan, the proposed project will finance the construction of sludge drying beds for one-year storage period. Moreover, national guidelines for sludge re-use policy would be developed in coordination with line ministries (Ministry of Water and Energy, Ministry of Environment, Ministry of Agriculture, Ministry of health, etc.) and concerned stakeholders. These guidelines would set out good standards of practice and monitoring and define roles and responsibilities. Training workshops on re-use of treated sludge will be also provided to all concerned stakeholders. 3.4 Engineering Design of the Wastewater Treatment Plant
The assessment of the wastewater treatment plant indicated that no major risks or hazards will arise from the operation of the treatment plant. However, minor modifications would be required to mitigate possible negative impacts that might arise (ref. Attachment A7). Among these measure are upgrading of the control and monitoring of the plant process units upgrading (variable speed blowers, residual chlorine analyze, and dewatered sludge flow meters); a guardhouse for providing accommodation to the guard at the entrance of the treatment plant; improvement of health and safety provisions (first aid provisions in the administration room, chlorine gas detector, proper storage provisions for chlorine as well as proper storage provisions for lime and polymer for use in the dewatering facility); provisions of a telephone system on site; and provision of heating and air conditioning in the administration building.
3.5 Water Quantity and Quality The availability of sufficient good quality water to the residents is an important consideration in the design and operation of water supply projects. Under the ERRP, extensive geological and hydrogeological studies, geophysical logging, test pumping and water analyses including bacteriological and chemical testing of the various water sources were undertaken to assess the water quantity and quality that can be obtained. Based on these studies, it was possible to identify the water resources for the study areas. These sources consist of six water springs (Ain Dardara, Nabaa loujouj, Chaghour, Ed Delbe, Sbah and Sbat) and 23 wells.
The water balance for the study area was prepared on the basis of the population figures (246,000 for the year 2000 and 403,000 for the year 2015), the water demand 34,452cum/d and 54,173 cum/d for the years 2000 and 2015 respectively) and the yield of springs and wells (ref Attachment A4). The water balance indicates that the total available resources (springs and wells) exceed the water supply demand of the project area for the year 2015.
129 The water quality analyses of the various resources are summarized in Attachment A5 to this Annex. The analyses indicate that the water quality is excellent chemically. The concentrations of all chemical parameters are below the maximum allowable standards set by the Lebanese Government, the WHO and the CEE. However, the bacteriological results show the presence of fecal coliforms and streptococcus, which indicates that the water resources are contaminated bacteriologically. Among the major causes of contamination is the absence of proper wastewater collection network. The provision of chlorination at the water supply head works and the implementation of a wastewater network for collecting and diverting the generated wastewater to a treatment plant will certainly improve water quality by eliminating its bacteriological contamination. Chlorination units were provided under the ERRP while the collection of wastewater will be provided under the present proposed project. In addition, the proposed project will finance the operation and maintenance of the water supply system including the regular monitoring of the water quantity and quality.
3.6 Archeological and Historical Sites
Ba'albeck has many recorded archeological and historical sites. The laying of water and wastewater pipelines will not require the demolishing of any known historical sites, nor will directly affect any known archeological sites. On the contrary, the project will have a positive environmental impact as it will eliminate the uncontrolled flows and discharges of wastewater into the water channels flowing along and through the archeological Roman Temples of Ba'albeck.
The original design of the water supply and wastewater networks was conducted in close coordination with the General Directorate of Antiquities and following several site visits so as to ensure that all pipelines are carefully aligned away from the archeological and historical sites. During project preparation, archeological surveys were conducted to investigate potential risks to known archeological sites and to identify areas where there is potential for finding archeological remains. The survey indicated that no water or wastewater pipelines are intersecting visible archeological remains. However, there is possibility that archeological remains be discovered during excavation. Areas with archeological potential were delineated and will be included in the contract documents. Moreover, chance finding procedures were developed (ref attachment A6 of this Annex) to address the management of unknown archeological materials that may be encountered during the course of the construction activities and will be incorporated in the construction contracts.
During construction, there are potential indirect impact on existing archeological sites due to vibration from drilling and compacting equipment; and loss of amenity due to dust, noise and visual intrusion. Good construction practices, including those described in Section 5 below, would mitigate most impacts to acceptable levels. The long term permanent impact of the project on the existing archeological sites will be positive due to proper collection of wastewater, reduced incidence of flooding, improved amenity and aesthetic quality of the city which would outweigh any temporary adverse impacts
3.7 Other Impacts Adverse environmental impacts during construction might not be negligible yet they are only temporary. Typical impacts for pipe laying are dust, noise, traffic congestion, and disturbance to the residents of the area but these are expected to be within acceptable limits.
4. ANALYSIS OF ALTERNATIVES The only option to the proposed project is the "do nothing" option which means continuing with current methods of water supply from limited existing water sources and private wells and the use of the present wastewater collection and disposal methods, without providing controlled house connections and 130 wastewater collection network. Although this option would avoid the temporary environmental impacts of installing pipelines, this option is rejected on the ground of economic cost and adverse long-term effect. The "do nothing" option would mean a whole Ba'albeck city without water supply and wastewater collection and treatment. Under such conditions adverse environmental impacts such as pollution, flooding, and poor health conditions would increase and the prevailing environmental conditions will further deteriorate.
The no action would also mean a complete loss of about 40 million US dollars that were invested on the water resources, distribution networks and wastewater treatment plants (under ERRP). Moreover, the economic benefits of the proposed project are greater than the cost of not implementing it; taling into account revenues from charges for water supply, wastewater, and treated effluent as an irrigation source, and the cost of the degradation of surface and ground water resources; lost working days due to water related diseases; cost of medical treatment; the over-abstraction of groundwater resources for irrigation purposes instead of treated wastewater; and the use of commercial fertilizer instead of treated sludge.
5. ENVIRONMENTAL MANAGEMENT PLAN (EMP)
5.1 Objectives and Structure of the EMP The objectives of the EMP are to identify feasible, cost effective measures that may be used to mitigate any adverse environmental impacts that might occur during the construction and operation of the project. The EMP will consist of three kinds of activities:
- Implementation of mitigation measures; - Monitoring and evaluation of mitigation measures; and - Strengthening the capacities of BHWIA, Municipalities and communities. 5.2 Implementation of Mitigation Measures
Mitigation measures have been identified to ensure that the defined objectives of the project are achieved whilst preventing and reducing any adverse environmental impacts. The mitigation measures are to be executed by the Construction Contractor and the Service Contractor with supervision by the BHWIA.
5.2.1 Construction Phase
Construction mitigation measures will be required to minimized inconveniences to the public. Such mitigation measures are standard and widely used in construction practices properly supervised for achievement of international standards of quality. Table 5.1 sumnmarizes the major adverse environmental impacts during construction and their mitigation measures.
The general disruption during construction will be mitigated by coordinated planning of construction activities. This will include coordination with all concerned authorities prior to the start of the construction activities. Other adverse construction activities will be mitigated through the adoption of Good Practice Environmental Procedures. For instance noisy construction activities can be limited to nornal working hours and providing muffler to minimize noise nuisance. Dust emissions can be avoided by using dust suppression measures such as periodically sprinkling water in certain areas, providing appropriate covers and removal of excess material from the site. Dangerous activities in public areas will be controlled to reduce risk to the public, traffic and warning signs will be placed at construction sites, trenches will be provided by fences, or railings. The contract with the contractor will incorporate all requirements to minimize disturbance from construction activities and will be monitored by the Supervision Engineer and the BHWIA to ensure compliance with the contract. 131 The cost of the mitigation measures during construction will be incorporated in the contract cost of the contractor. Moreover, the Bank will review all civil works contracts to ensure that the required mitigation measures have been incorporated in the tender documents. Table 5.1: Potential Environmental Impacts During Construction and Proposed Mitigation Measures
Potential Impacts Mitigation Measures Responsibllty Noise generation Restrict work to normal working hours; Contractor monitored by Use equipment with appropriate silencers; Supervision Engineer Only run equipment when required.
Generation of dust Employ dust suppression measures such as Contractor mnonitored by wetting and dust enclosures. Supervision Engineer
Traffic congestion Restrict movement of construction vehicles to Contractor monitored by and from the sites to normal working hours; Supervision Engineer Diversion of traffic through suitable roads to the expected traffic loading; Provision of adequate diversion signs; Minimizing lengths of open trench; Expeditious completion of backfill and reinstatement.
Damage to access roads and Site access roads will be inspected regularly Contractor monitored by streets and repairs made where necessary; Supervision Engineer All roads and streets used for laying pipes will be covered and paved.
Water pollution Collect and dispose wastes, demolition and Contractor monitored by excavated materials at appropriate locations; Supervision Engineer Restrict surface runoff from the site.
Public safety and site security Control access of unauthorized personnel; Contractor monitored by Provide pedestrian access; Supervision Engineer Provide safety barriers and signs.
Damage to archeological remains Cease construction on discovery of objects of Contractor monitored by cultural value and notify relevant authorities. Supervision Engineer and Use chance finding procedures General Directorate of Anti uities Air pollution Do not bum wastes on site; Contractor monitored by Routine maintenance of construction equipment Supervision Engineer and vehicles to minimize exhaust emissions
Generation of wastes Minimize wastes generated during construction Contractor monitored by and reuse construction wastes where Supervision Engineer practicable; Use appropriate methods for the storage of waste materials; Dispose of wastes to an appropriate site.
132 5.2.2 Operation Phase The operation of the water and wastewater networks can create adverse impacts, which need to be avoided through the implementation of mitigation measures. Table 5.2 summarizes the potential impacts and the proposed mitigation measures. Table 5.2: Potential Environmental Impacts during Operation and Proposed Mitigation Measures
Project Potential Environmental Mitigation Measures Responsibility Component Impacts
Wastewater * Health and environmental * Regular monitoring of treated * Service Contract supervised risks associated with wastewater effluent; by BHWIA discharge and re-use of treated effluent for * Extension of outfall from treatment * Contractor supervised by irrigation plant to ensure safe disposal of treated BHWIA wastewater into a receiving water body
* Development of re-use guidelines for * BHWIA in coordination treated effluent; with line ministries with the support of local or * Capacity building, training and international consultant. awareness.
* Drying beds for one-year storage will * Contractor supervised by be provided to dry and store sludge BHWIA following de-watering, digestion and lime stabilization. Sludge quality and the risk of public and farmers * Monitoring of nematodes, coliforms * Service Contract supervised acquiring infection and heavy metal content of treated by BHWIA sludge. * BHWIA in coordination * Capacity building, training and with line ministries with awareness. the support of local or international consultant.
Water * Degradation of water * Continuous monitoring of water quality * Service Contract supervised Supply quality at various locations within the water by BHWIA supply system; avoid cross contamination with sewage; control extraction of underground water.
* Reduction in available * Prohibit illegal connections to the * Service Contract supervised water supply network; avoid leakage in the network; by BHWIA ensure proper maintenance of the network including pumping stations, pipelines and house connections.
5.3 Environmental Monitoring Compliance monitoring during construction will be the responsibility of the contractor who will be supervised by an Engineer on behalf of BHWLA. Environmental monitoring of significant impacts during the operation of the project will be among the responsibilities of the Service Contract(s). A strategic monitoring plan will be developed by the SC and periodic review reports will be produced and submitted to BHWIA
133 The BHWIA will have the overall responsibility to ensure that the adverse impacts from the project are maintained to acceptable levels and corrective measures are undertaken when required. The Environmental specialist of the BHWIA will also conduct periodic monitoring by visiting the project site at least twice a year. BHWIA will produce periodic review reports for the Ministry of Water and Energy and the Bank. Monitoring of construction activities will have to ensure that mitigation measures of construction impacts are being implemented properly, while the monitoring of operation is to ensure that no unforeseen negative impacts are arising. Tables 5.3, 5.4, and 5.5 give the proposed monitoring requirements during the operational phase. Table 5.3: Monitoring Program during the Operation of the Water Supply System
Location of Parameters to be monitored Frequency Standard Monitoring Points
Water Sources PH 6.5-8.5 (wells and springs) Salinity Alkalinity Conductivity 400 pS/cm Ammonium 0.05 - 0.5 mg/I Nitrates 25 - 50 mg/l Nitrites Every Month 0 mg/I Chlorides EeyMnh25 -200 mg/I Phosphates Calcium 100 mg/I Magnesium 30 - 50 mg/l Sodium 20- 150 mg/I Potassium 10 -12 mg/I Sulfates 250 mg/I Iron 50 - 200 mg/I Herbicide and Pesticides 0.1 igl Coliforms 0/100 ml
Water Sources Total coliforms Ev d 0/100 ml (wells and springs) Fecal coliforms ery ay 0/100 ml Fecal sbeptocoques 0/100 ml
Water Reservoirs Ammonium 0.05 - 0.5 mg/l Phosphates Eveiy day Nitrites 0 mg Chlorides 25 - 200 mg/l Residual chlorine Total coliforms 0/100 ml Fecal coliforms 0/100 ml Fecal stetocoques 0/100 ml Distribution Total coliforms 0/100 ml network Fecal coliforms Every day 0/100 ml Fecal streptocoques 0/100 ml Residual chlorine
134 Table 5.4: Monitoring Program during the Operation of the Wastewater Treatment Plant (WWTP)
Location of Parameters to be monitored Frequency Standard Monitoring Points BOD 25 mg/I WWTP COD 125mg/I PH 6- 9 Oil and grease 10 mg/I TSS Every day 50 mg/l Nematode eggs S I egg/liter Fecal coliform. 200 MPN/100 ml
Heavy metals 10 mg/I WWVTP Phosphate 5 mg/I Ammonia 10 mg/I Nitrate Every week 90 mg/l Fluoride 20 mg/I Sulfate 500 mg/I Sulfide I mg/I Chlorine, total residual 0.2 mg/I Phenols 0.5 mg/li WWTP Arsenic nmg/ WWTP ~~~~Cadmium 0.1I Mg/I Chromium 0.1 mg/I Copper 0.5 mg/I Iron Every month 3.5 mg/I Lead 0.1 mg/I Selenium 0.1 mg/I Silver 0.5 mg/I Zinc 2.0 mg/I At the discharge Chlorine Every week 0.2 mg/I from the outfall or at 1 km from the WWTP
Table 5.5: Monitoring Program for the Treated Sludge
Location of Parameters to be monitored Frequency Standard Monitoring Points Nematodes eggs S I egg/100 gm At the WWTP Fecal coliform 200 MPN/100 ml Heavy metals: Arsenic Every batch 1 mg/kg Cadmium 20 mg/kg Chromium 1000 mg/kg Lead 750 mg/kg
5.4 Institutional Strengthening
The institutional arrangement and capacities of the organizations in-charge with the implementation and management of the proposed project were reviewed with the intention of providing technical assistance and reinforcement. Environmental expertise will be strengthened through: (i) the provision of an environmental expert to assist the BHWIA in supervising the implementation of the EMP; (ii) the development of re-use guidelines for treated effluent and sludge; (iii) the implementation of soil analysis 135 and the identification of the types of crops that can be irrigated with treated effluent; and (iv) the provision of training programs that will be designed and implemented with the assistance of a local or international expert and will include:
(i) BHWLA, Ministry of Energy and Water, Service Contract(s) and Municipalities: At the initiation of the project, a training workshop will be provided to the staff of the BHWIA, Ministry of Water and Energy, Service Contract and Municipalities to raise environmental awareness and to clarify the specific enviromnental requirements related to the project.
A two days workshop will then be provided to the BHWIA, Service Contract(s), Ministry of Water and Energy and Municipalities and will cover the following topics:
- Effective implementation of mitigation measures - Project supervision - Sampling and analysis - Monitoring and evaluation
(ii) BHWA, Municipalities and Line Ministries: A two days workshop will be provided to the staff of BHWIA, Municipalities, and representatives of line ministries to strengthen capacities in the application of treated wastewater and sludge re-use guidelines.
(iii) Local NGOs, communities and farmers: Training would be provided through I or 2 days workshop for local NGOs, communities and farners, focusing on public awareness and on re-use of treated wastewater and sludge for agricultural purposes.
(iv) Awareness campaign andpamphlets: two awareness campaigns will be conducted and Arabic pamphlets will be distributed to all farners highlighting the adverse health and public safety impacts resulting from the use of untreated effluent.
5.5 Cost Estimates
The cost of the Environmental Management Plan (mitigation measures and monitoring) will be borne mostly by the contractor (construction phase) and the Service Contract(s) (operational phase) who will make the necessary provision as part of their contracts. All these have been included in the project costs.
The cost of the institutional strengthening requirements and the required measures to mitigate the impacts of the wastewater treatment plant will be included as part of the proposed project components No.4 "Consulting Services" and No.3 "Improving and Increasing Service Coverage for the Wastewater System", respectively. An estimated amount of US$2,238,000 will be allocated for meeting the environmental requirements of the proposed project as detailed in Table 5.6 and in accordance with the schedule given in Table 5.7. It should be noted that the total cost does not include the cost of mitigating negative construction impacts as these are included in the cost of the construction contract with the contractor. Similarly, the cost of monitoring water and wastewater quality during operation will be included in the cost of the Service Contract(s).
136 Table 5.6: Cost Estimates
Component Quantity Unit Rate Total Cost in USS Thousands USS BHWIA Short term environmental specialist 10 MM 6000/month 60 Laboratory Testing and Monitoring 100 Subtotal 160 Studies, Trainine and Workshons: Preparation of re-use guidelines for treated wastewater and sludge Soil analysis to identify the type of crops that can be cultivated and 40 irrigated with treated effluent Two days training workshop for BHWIA, Municipalities and line 2 workshops 8000/workshop 16 ministries on re-use of treated wastewater and sludge Three days training workshop for water authority, municipalities and management contract on environmental monitoring, sampling 2 workshops 8000/workshop 16 and analysis Public awareness workshop for NGOs, community and farmers on 3 workshops 5000/workshop 15 re-use of treated wastewater and sludge Awareness campaigns and arabic pamphlets highlighting the 15 adverse health and public safety impacts resulting from the use of untreated effuent Subtotal 162 Measures to miteate the impacts of the wastewater treatment nlant 638 Sludge drying beds for a one-year storage period 300 Extension of outfall from treatment plant
Tertiary treatment (filters) 700
Improvement of the engineering design of the wastewater 240 treatment plant
Subtotal 1878 Monitoring and evaluation at the project level 2.5 MM 8000/month 20 Operation materials and supplies 18 TOTAL 2238
137 Table 5.7: Schedule of Implementation
Year 1 Year 2 Year 3 Year 4 Year 5 I) Environmental specialist _ 2) Preparation of Re-use guidelines 3) Soil analysis to identify the type of crops that can be cultivated and irrigated with treated effluent
4) Laboratory testing and Monitoring ______5) Training -Training workshop on re- _ use of treated wastewater and sludge
-Training workshop on environmental monitoring, _ _ sampling and analysis
-Public awareness workshop on re-use of treated wastewater and sludge _ _
- Awareness campaigns and arabic pamphlets highlighting the adverse health and public safety impacts from the use of untreated effluent 6) Improvement of the enginensing design of thefr wastewater treatment plant 7) Measures to mnitigate the impacts of the wastewater treatment plant - Sludge drying beds for a_. one-year storage period
- Extension of outfall from treatment plant_.
-Tertiary treatment (filters) _
8) Monitoring and evaluation at project level f
138 A¶ITACHMENT Al Existing Environmental Protection Legislation in Lebanon
Pollution and Protection of Water Resources Document Date Subject Responsible Ministry Order No. 144 10.06.1925 Protection of Surface and Ground Energy and Water Water Resources Order No. 320/26 26.05.1926 Protection of Catchment Areas Energy and Water Decree No. 639 26.03.1942 Protection of Nabaa Al Assal Energy and Water Spring, Faraya Decree No. 10276 07.10.1962 Protection Zones for Water Energy and Water Sources and Recharge Areas Decree No. 14438 02.05.1970 Restrictions on the Depth of Energy and Water Unlicensed Boreholes Decree No. 8735 23.08.1974 Pollution from Solid and Liquid Industry/Environment Wastes Law No. 64 18.08.1988 Pollution from Hazardous Wastes Industry/Environment Decision No. 2528/C 28.05.1996 Protection of Ground Water at El Energy and Water Kneisse Decree No. 680 15.09.1998 The Preservation and Protection Energy and Water of Boreholes
Protection Through Planning, Land Use and General Exploitation
Document Date Subject Responsible Ministry Decree No. 113 09.08.1933 Mining Exploitation Interior Decree No. 253 08.11.1935 Quarry Exploitation Interior Law No. 07.01.1949 Forest Protection Agriculture/Environment Law No. 09.11.1951 Soil Preservation Agriculture Law No. 60 09.09.1983 Excavation in Public Streets Public Works Order No. 69 09.09.1983 Urban Development Public Works Order No. 2/89 05.01.1989 Urban Development Public Works Law No. 98 09.09.1989 Excavation in Public Streets Public Works Law No. 58 29.05.1991 Land Expropriation Public Works Law No. 85 07.09/1991 Flora and Fauna Protection Agriculture/Environment Decree No. 10121 1992 Excavation of Sand from the Interior Foreshore Decision No. 1/42 01.03.1993 Tree Cutting and Felling Agriculture/Environment Decree No. 2/93 20.06.1993 Quarries, Sand Pits and Coating Environment Plants Law No.360 01.08.1994 International Convention on Environment Biodiversity Decree No. 5616 06.09.1994 Quarry Exploitation Interior/Environment PMO Circular 6/95 13.03.1995 Excavation in Public Streets Public Works Law No. 558 24.07.1996 Forest Protection AgriculturelEnvironment Decision No. 185/1 07.11.1997 Marble Quarries and Concrete Interior Block Works
139 Protection from Pollution
Document Date Subject Responsible Ministry Decree No. 8735 23.08.1974 Pollution from Solid and Liquid Indusby/Environment Wastes Law No. 64 18.08.1988 Pollution from Hazardous Wastes Industry/Environment Decision No. 52/1 29.07.1996 Air, Water and Soil Pollution Energy and I______I______I______Water/Environm ent
Protection of Archaeological and Historic Sites
Document Date Subject Responsible Ministry Law No. 166 07.11.1933 Historic and Archaeological Sites Interior/Culture Order No. 08.07.1939 Cultural Heritage Sites Interior/Culture Decree No. 14.04.1943 Cultural Heritage Sites Interior/Culture Law No. 30/82 14.09.1982 World Heritage Sites Environment/Culture Law No. 19 30.10.1990 World Heritage Sites Environment/Culture
140 ATTACHMENT A2 Standards for Drinking Water - Lebanese Ministry of Environment - Decision 52/1, 1996
ORGANOLEPTIC, PHYSICAL AND CHEMICAL PARAMETERS GUIDELINE MAXIMUM PARAMETER VALUE ADMISSIBLE UNIT CONCENTRATION Color 1 15 ALPHA Turbidity 0.4 4 JTU
Taste 0 @ 25C0 2 @ 25C0 ______~~0@,25 C 3 25 C _ _ _ _ Odor 0 120C 2 12°C Odor~~~~~~~~~ ~O 25°C ~~~~~3i)250C Temperature 12 25 °C 0 Electrical Conductivity (@20 C) 400 -S/cm Hydrogen Ion Activity 6.5 - 8.5 9 pH units Calcium 100 -mgl Magnesium 30 50 mg/ Sodium 20 150 mg/l Potassium 10 12 mg/l Chloride 25 200 mg/] Nitrate (NO3) 25 50 mg/l Nitrite (NO2 ) 0O_MO Iron 50 200 ug/l Ammonium (NH4) 0.05 0.5 mg/l Kieldahl Nitrogen _ I mg/l Total Solids (@180'C) 1500 mg/l Oxidability 2 5 mg/l
Fluoride Oi.5 -30°C0 mg/I ______0.7 @_25-30 C _ _ _ _ _
HEAVY METALS AND TRACE ELEMENTS
GUIDELINE MAXIMUM PARAMETER VALUE ADMISSIBLE UNIT CONCENTRATION Aluminum 0.05 0.2 mg/i Arsenic _ _50 ug/0 Barium I ug__/l Cadmium _ _5 u_g/l Chromium _ _50 u_g/0 Copper 0.1 I mg/l Cyanide _ _50 ug/l Lead __ _ _ - _5 50 Manganese 20 50 u8/1 Mercury __I__ Ig Nickel __50 i Wl. Phosphorous (as P205) 0.4 5 mgl Selenium _ _I 1glo_ Silver 10 ug/l Antimony __ I__1g0l Zinc 0.1 5 mgil
141 HYDROCARBONS AND PESTICIDES
Maximum Parameter Guideline Value Admissible Unit Concentration Chlorinated Organic Pesticides 0.1 lg/ Other Chlorinated Organic Compounds I gl Phosphated Organic Pesticide 0.1 P. Carbamides _g/0 0.1 Herbicides 0.1 Fungicides 0.1 g PCB 0.1.1 PCT __g/0 0.1 Phenols 0.5 ggg/ Surface Agents 0.2 lg/l Dissolved Hydrocarbons 10 t8/1 Aldrin 0.03 pg/ Dieldrin __g/l 0.03 Hexachloro-Benzene 0.1 gA 3,4 Benzopyrene _1__0 0.01 11,12 Benzofluoranthene _ _g__ 0.2 3,4 Benzopyrene 0.01 9g/l
Total Measured Substances __0.5
BACTERIOLOGICAL PARAMETERS
Maximum Parameter Guideline Value Admissible Sample Volume Concentration Total Coliforms 0 0 100 ml Faecal Streptococcus 0 0 100 ml Sporlutaed Sulphite-Reducing Bacteria 0 1 20 ml Faecal Coliforms 0 0 100 ml Salmonella 0 0 5 litres Thermotolerant Coliforms 0 0 100 ml Pathogenic Staphylococcus 0 0 100 ml Faecal Bacteriophagus 0 0 50 ml Intestinal Virus 0 0 10 litres
142 ATITACHMENT A3 Standards for Wastewater - Lebanese Ministry of Environment - Decision 8/1, 2001 Environmental Limit Values (ELV) for waste water discharged into surface water
Parameter ELV for existing ELV for new facilities facilities PH 5 -9 6-9 Temperature 30 0C 300C BOD5 mgO 2/L 100 25 COD mgO2 /L 250 125 Total Phosphorous mgP/L 16 10 Total Nitrogen, mgN/L' 40 30 Suspended Solids mg/L 200 60 AOX 5 5 Detergents mg/L 3 3 Coliform Bacteria 370C in 100 mlz 2,000 2,000 Salmonellae absence absence Hydrocarbons mg/L 20 20 Phenol index mg/L 0.3 0.3 Oil and Grease mg/L 30 30 Total Organic Carbon (TOC) mg/L 75 75 Ammonia (NH4 ) mg/L 10 10 Silver (Ag) mg/L 0.1 0.1 Aluminum (Al) mg/L 10 10 Arsenic (As) mg/L 0.1 0.1 Barium (Ba) mg/L 2 2 Cadmium (Cd) mg/L 0.2 0.2 Cobalt (Co) mg/L 0.5 0.5 Chromium total (Cr) mg/L 2 2 Hexavalent Chromium (Cry') mg/L 0.5 0.2 Copper total (Cu) mg/L 1.5 0.5 Iron total (Fe) mg/L 5 5 Mercury total (Hg) mg/L 0.05 0.05 Manganese (Mn) mg/L I 1 Nickel total (Ni) mg/L 2 0.5 Lead total (Pb) mg/L 0.5 0.5 Antimony (Sb) mg/L 0.3 0.3 Tin total (Sn) mg/L 2 2 Zinc total (Zn) mg/L 5 5 Active Cl2 mg/L I_I Cyanides (CN)mg/L 0.1 0.1 Fluoride (F ) mg/L 25 25 Nitrate (NO3) mg/L 90 90 Phosphate (PO4 ") mg/L 5 5 Sulphate (SO4"-) mg/L 1,000 1,000 Sulphide (S )mg/L I
Sum of Kjeldah1-N (organic N + NH3), N0 3-N, N0 2-N 2 For discharges in close distance to bathing water a more strict ELV could be necessary. 143 ATTACHMENT A4 Water Balance Table A4-1: Present and future population of the project area System System NUMBER OF INHABITANTS No. Name VILLAGE 1995 1999 2000 2005 2010 2015 2020
_____ Baalbek Baalbek 91,000 100,447 102,958 116,488 131,795 149,114 168,709 _ Baalbek Nahle 6,760 7,462 7,648 8,653 9,790 11,077 12,533 1 Baalbek Maqne 6,240 6,888 7,060 7,988 9,037 10,225 11,569 Baalbek Younine 7,800 8,610 8,825 9,985 11,297 12,781 14,461 I Baalbek Loujouj 98 108 111 125 142 161 182 Baalbek laat 8,255 9,112 9,340 10,567 11,956 13,527 15,304 1 Baalbek Ain Bourdai 600 662 679 768 869 983 1,112 I Baalbek Douris 2,000 2,208 2,263 2,560 2,897 3,277 3,708 I Baalbek Amchaki 1,105 1,220 1,250 1,414 1,600 1,811 2,049 Total 123,85 136,716 140,134 158,549 179,383 202,956 229,626 ______8 ______2 Et Taibe Main road of 2,260 2,495 2,557 2,893 3,273 3,703 4,190 Baalbek - Chouab _ _ ~~~~~Jalouq_ ___ _ 2 Et Taibe Maidaloun 650 717 735 832 941 1,065 1,205 2 Et Taibe Haouch ed Dahab 10 11 11 13 141 16 19 2 Et Taibe Haouch tell Safiye 650 717 735 832 9411 1,065 1,205 2 Et Taibe Haouch Barada 625 690 707 800 905 1,024 1,159 2 Et Taibe Et Taibe 780 861 882 998 1,130 1,278 1,446 2 Et Taibe El Ansar 1,800 1,987 2,037 2,304 2,607 2,950 3,337 Total 6,775 7,478 7,664 8,672 9,811 11,101 12,561 3 Britel Bntel 20,000 22,076 22,628 25,602 28,966 32,772 37,079 3 Britel Hizzine 2,015 2,224 2,280 2,579 2,918 3,302 3,736 3 Britel Talia 2,275 2,511 2,574 2,912 3,295 3,728 4,218 3 Britel Hourtaala 7,605 8,394 8,604 9,735 11,014 12,462 14,099 3 Britel Biyada 455 502 515 582 659 746 844 3 Britel El hammoudiye 350 386 396 448 507 574 649 Total 32,700 36,093 36,997 41,858 47,359 53,584 60,625 4 NabiChit Nabi Chit 27,950 30,852 31,623 35,778 40,480 45,799 51,818 4 NabiChit Serraain el Faouqa 5,005 5,525 5,663 6,407 7,249 8,201 9,279 Total 32,955 36,377 37,286 42,185 47,7291 54,0 61,0 5 Siraain Et Tahta Haouch en Nabi 1,625 1,794 1,839 2,080 2 353 2,663 3 013 5 SiraainEtTahta Sifriandmainroad 720 795 815 922 1,043 1,180 1,335 5 Siraain Et Tahta Serraain el Gharbiye 2,800 3,091 3,168 3,584 4,055 4,588 5,191 5 Siraain Et Tahta El Helleniye 1,600 1,766 1,810 2,048 2,317 2,622 2,966 5 Siraain Et Tahta Chhiniiye 400 442 453 512 579 655 742 5 Siraain Et Tahta Serraain et Tahta 3,350 3,698 3,790 4,288 4,852 5,489 6,211 Total 10,495 11,586 11,875 13,434 15,19 17,1 19,45 6 El Khodr El Khodr 5,135 5,668 5,810 6,573 7,437 8,414 9,520 Total 5,135 5,668 5,810 6,573 7,437 8,414 9,520 7 Ham Maaraboun 1,500 1,656 1,697 1,920 2,172 2,458 2,781 7 Ham Ham 1,000 1,104 1,131 1,280 1,448 1,639 1,854 Total 2.500 2,760 2,828 3,200 3 620 4,097 4,635 8 El Khraibe El Khraibe - - 1,584 1,792 2,027 2,294 2,5961 1Total .- - 1,584 1,792 2,027 2,294 2,596 9 Tfail Tfail 1,500 1,656 1,6971 1,920 2,172 2,458 2,781 1_XTotal 1,500 1,65 1697 1,920 2,17 2458 2,781 GRAND TOTAL 215,918 238,334* 245,875 278,183 314,737 356,101 402,89
*These figures do not include Khreibe population.
144 Table A4-2: Daily Water Demand in the Project Area
Daily Water Demand (Including losses) System System Village water demand for Daity water demand No. Name the year 2000 (m3) for the year 2015 (m3 ) 1 Ba'albeck Ba'albeck 15,459 24,260 1 Ba'albeck Nahle 1,148 1,802 ______Ba'albeck Maqne 1,060 1,664 ______Ba'albeck Younine 1,325 2,079 I Ba'albeck Loujouj 17 26 I~ Ba'albeck laat 1,402 2,201 ______Ba'albeck Ain Bourdai 102 160 1 Ba'albeck Douris 340 533 ___ Ba'albeck Amchaki 188 295 .______.______Total 21,041 33,020 2 Et Taibe Main road of 345 406 Ba'albeck - Chouab Jalouq 2 Et Taibe Majdaloun 99 156 2 Et Taibe Haouch ed Dahab 2 2 2 Et Taibe Haouch Tell Safiye 99 156 2 Et Taibe Haouch Barada 96 150 2 Et Taibe Et Taibe 119 187 2 Et Taibe Al Ansar 275 432 Total 45,117 69,544 3 Britel Britel 2,140 3,599 3 Britel Hizzine 308 483 3 Britel Talia 348 546 3 Britel Hortaala 1,163 1,825 3 Britel Biyada 70 109 3 Britel El Hammoudiyc 54 84 Total 94317 145,734 4___ NabiChit Nabi Chit 4,273 6,706 4 NabiChit Siraain el Faouga 765 1,201 Total 193,672 299,375 5 Siraain Et Tahta Haouch en Nabi 248 390 5 Siraain Et Tahta Siraain et Tahta 512 804 5 Siraain Et Tahta Sifri + Main road 110 173 5 Siraain Et Tahta Siraain el Gharbiye 428 672 5 Siraain Et Tahta El Hillaniye 245 384 5 Siraain Et Tahta Chehaymie 61 96 Total 388,948 601,269 6 El Khodr El Khodr 785 1,232 Total 785 1,232 7 Ham Maaraboun 229 360 7 Ham Ham 153 240 Total 779,848 1,205,602 8 El Khraibe El Khraibe 255 400 .______Total 255 400 9 Tfail Tfail 229 360 I_ Total 229 360 Gener I Total 34,452 54,173
145 Table A4-3: Population Estimates, Available Resources and Water Balance Population Water Needs Water Balance System Town 2000 2015 2000 2015 Estimated water quantity 2000 2015 No. (m3/d) (m/d) (summer) (m'3d) (mn/dl BIa'albeck I Ba'albeck 102958 149114 15459 24260 I Loujouj III 161 17 26 20550m'/d from 7 1 laat 9340 13527 1402 2201 boreholes += 2000 m3/d I Ain Bourdai 679 9831 102 160 from loujouj spring I Douris 2263 3277 340 533 = 22550 m'/d Total 115351 167062 17320 27180 5230 -4630 I Younine 8825 12781 1325 2079 3024 m3/d from borehole (Reh.) 1699 945 1 Nahle 7648 11077 114T8 80 150m3 d fTom Ioujouj ad 352 *302*0 ______~~~~~Chaghour I |Maqne 7060 1022 1060 166 3024m 3 /d from one borehole 1964 1360 1 Amchaki 1250 1811i 188 29 500 m3/d from ain Dardara spring 312 205 Et Taibe 2 EtTaibe 882 1278 119 187 2 Main road:Ba'albeck
2 Chouab Jaloug 2556 3701 345 406 1944 m3/d from boreholes 2 Al Ansar 2037 2950 275 432 + 120 m3/d from ed Delbe spring 2 Majdaloun 735 1065 99 156 =2064 m3/d 1029 575 2 1Haouch Ed Dahab II 16 2 2 2 _ Haouch Tell Safiye 735 1065 99 156 2 Haouch Barada 707 1024 961 150 Total 7663 11099 1035 1489' _ Britel ____ 3 Britel+Main Road 22628 32772 2140 3599 4234 m3/d from 2 boreholes 3 Hizzine 2280 30 308 483 ( Britel I + Britel 2 ) 3 HoTtaala 8604 12462 1163 1825 +2000 m3/d from Sbat spring 2569 243 El Hammoudiye 396 574 54 8 =6234 m3/d Total 33908 491101 3665 59911 Nabi Chit 4 NChitbi |316231 457991 4 67061 1 4 [Simain El Faou a |56631 82011 765 1201 1145m 3/d from 3 boreholes Total | 372861 540001 503817907 | 6107 3238 Siraain Et Tahta 5 |SiraainEtTahta 3790 5489 512 804 5 |Siaain El Gharbiye 3168 4588 428 672 5 El[Hilaniye | 1810 2622 245 384 2765 m3/d from oneborehole S Chehaymie 453 655 61 96 5 Haouch en Nabi 1839 2663 248 390 5 Sifri Road 815 1180 110 173 Total | 118751 171971 16041 2519, | 1161 246 El Khodr 6 |ElKhodr | 58101 84141 785 12321 2851 m/dfromoneborehole 2066 1619 Ham 7 IHam I 1131 1531 2401 7 |Maaraboun | 16971 24581 2291 3601 1900 m3td from one borehole Total | 28281 40971 3821 6001 1518 1300 El Khraibe 81 El Khraibe 15841 22941 2551 4001 648 m3/d from existing borehole 393 248 |(B.T.D.count) (to be equipped) Tfai_ 9 |Tfail |16971 24581 2291 3601 605 m3/d from one borehole 1376 245
* This deficit can be overcome by reducing the level of service from 122 ld/cap as supposed to be in year 2015 to 101 Vd/cap for the year 2015. ** deficit can be overcome by allocating additional potable water flow from Chaghour spring to Nahle village. 146 ATTACHMENT A5 Chemical and Bacteriological Analysis of the Water Resources
Table A5-1 Chemical and Bacteriological Analysis of the Newly Drilled Water Wells - October 2001
Analysis B56 B54 B68 B72 B77 B73 B74 B69 B70 B87 B89 B76 B58 B57 B59 B80 B61 B62 B51 B60 B48 Standards Conductivity 438 446 304 386 231 368 383 316 376 432 346 492 530 609 443 418 372 377 428 354 324 WHO 400 Dry residue - - 212 234.6 193 252.1 262.5 540 259 - 232 343 378 - 306 - 254 255 - 249 - WHO 1000 PH 7.44 7.55 7.56 7.55 7.29 7.29 7.24 7.49 7.48 7.49 7.32 7.36 7.35 7.22 7.42 7.15 7.39 7.18 7.62 7.75 7.51 CEE 6.5 - 8.5 Calcium 55.3 55.2 45.5 40.5 36.7 40.5 41.7 46.2 46.9 51.6 35.1 63.6 64.2 67.5 69.3 64.9 50.5 51.4 52.5 54.6 43 WHO 100 Magnesium 15.2 16.8 10.7 17.6 9.75 15.9 16.5 11.1 11.9 15.3 16.8 16.9 19.4 26.5 8.8 11 11.9 10.8 15.9 16.4 7.6 CEE 30 Sodium 14.55 10.7 19.1 7.6 10.1 9.6 15.6 20 20.1 8.4 9.9 15.5 14.5 18.1 13.1 10.9 11.1 2 14.7 16.8 14.4 WHO 200 Potassium 1.73 2 1.5 0.56 0.95 1.2 1.4 1.6 1.4 1.1 1.2 1.7 1.26 1.7 1.7 0.91 0.95 0.98 1.4 1.4 1.2 CEE 12 Chlorides 31.9 21.3 28.4 14.2 14.2 21.3 29.8 28.6 27.6 14.2 16.3 31.9 27.1 39.4 28.4 21.3 21.3 21.6 28.4 32.4 20.6 WHO 250 Sulfates 14.5 9.2 2.2 14.6 2.3 4.2 2.6 3.1 3.2 4.5 13.3 5.8 3.7 0 3.4 17.1 4.9 5 10.5 11.8 2.5 WHO 250 Nitrates 0.31 0.12 0.29 0.31 0.35 0.21 0.29 0.35 0.2 0.09 0.05 0.16 0.24 0.44 0.32 0.11 0.11 0.15 0.12 0.27 0.15 WHO 50 Bicarbonates 195 135 105 215 135 145 150 112 115 195 149 227 245 265 195 235 185 190 145 175 95 Iron (pg/1) 0 85 ------0 38 78 84 WHO 300 Fecal 5 6 0 4 11 1 0 0 0 0 0 4 0 16 8 0 0 0 3 16 3 CEEO Coliforms/100 ml -- _ 0_ _I2 Fecal 1 0 0 2 8 3 0 0 0 0 0 0 1 5 2 0 0 1 0 0 CEEO Streptococcus 1/100 ml _____1
147 Table A5-1: Chemical and Bacteriological Analysis of the Springs - October 2001
Analysis Ras El Ain Loujoj Ain Dardara Delbe Sbat Sbah Jouzeh
Conductivity 286 290 240 263 253 279 329 Dry residue 195 210 165 195 180 205 240 Total alkalinity 120 115 105 100 105 125 150 pH 7.99 7.64 7.61 7.68 7.89 7.51 7.65 Calcium 37 37.5 30.8 33.4 34.2 41.4 54.9 Magnesium 9.1 6.63 8.05 4.4 5.4 6.6 7.6 Sodium 10.6 12.2 6.8 8.4 4.5 4.7 10.7 Potassium 1.3 1.8 0.92 1.1 0.6 0.4 1.8 Chlorides 17.7 22.5 10.9 13.9 7.4 7.1 17.7 Sulfates 8.2 2.9 1.6 1.3 2.1 5.6 17.4 Nitrates 0.55 0.26 0.23 0.09 0.07 0.05 0.27 Bicarbonates ------Iron (Pg/l) 0 0 0 0 0 0 0 Fecal Coliforns/100 ml >80 12 24 7 3 0 5 Fecal Streptococcus /100 nm >80 I 13 2 0 02
148 ATrACHMENT A6
Chance Finding Procedures
The following chance finding procedures were developed by the Archeologist in coordination with the official representative of the General Directorate of Antiquities in the region of Ba'albeck, Mr. Riffaii, and in accordance with the Lebanese regulations, and the World Bank Guidelines - OP 4.11 of August 1999.
The procedures will be included as standard provisions in construction contracts to ensure the protection of cultural heritages. The procedures should be directly executed whenever new archeological remains, antiquity or any other object of cultural or archeological importance are encountered during construction. The required steps are:
1. Stop construction activities.
2. Delineate the discovered site area.
3. Secure the site to prevent any damage or loss of removable objects. In case of removable antiquities or sensitive remains, a night guard should be present until the responsible authority takes over.
4. Notify the responsible foreman/archeologist, who in turn should notify the responsible authorities, the General Directorate of Antiquities and the local authorities (within less than 24 hours). 5. Responsible authorities would be in charge of protecting and preserving the site before deciding on the proper procedures to be carried out.
6. An evaluation of the finding will be performed by the General Directorate of Antiquities. The significance and importance of the findings will be assessed according to various criteria relevant to cultural heritage including aesthetic, historic, scientific or research, social and economic values.
7. Decision on how to handle the finding will be reached based on the above assessment and could include changes in the project layout (in case of finding an irremovable remain of cultural or archeological importance), conservation, preservation, restoration or salvage.
8. Implementation of the authority decision concerning the management of the finding.
9. Construction work could resume only when permission is given from the General Directorate of Antiquities after the decision concerning the safeguard of the heritage is fully executed.
149 ATTACHMENT A7
Executive Summary of the Environmental Review of the Treatment Plant
During project preparation, an environmental assessment of the existing wastewater treatment plant was conducted. The objectives of the study are to evaluate the treatment plant site, the environmental performance and engineer design of the plant, as well as the potential re-use of treated effluent and sludge.
The wastewater treatment plant is located in Iaat plain, about 2 km to the north west of Ba'albeck city in the northern Beka'a valley. The wastewater treatment facility is intended to treat domestic wastewater generated by inhabitants of Ba'albeck city, and the towns of laat, Douris and Ain Bourdai to secondary treatment level. The first stage capacity of the plant, currently under construction, is 12,500 m3/day.
An appraisalof the treatznent plant site revealed that it was appropriately selected. The main advantage of locating the site in its present location is the opportunity it offers for effluent and sludge reuse in agriculture. Furthermore, negative impacts resulting from the plant operation are kept far away from the city of Ba'albeck and its historical monuments. The disadvantages of the site include odour nuisance and visual impact. These disadvantages can be described as minor and localized to the site. Mitigation measures include perimeter tree planting.
A review of the treatmentplant engineeringdesign revealed thefollowing:
* The power distribution scheme was checked and was found to be acceptable. The monitoring system specified in the tender documents allows remote monitoring, however the parameters monitored should be expanded to cover other recommended variables stated below. Data processing of these variables should be addressed in the operation and management. * The provisions included in the tender documents for control and monitoring of the plant process units require some upgrading. As a minimum, the following should be incorporated:
- Control of aeration quantity in the oxidation ditch by interlocking the blowers to the DO meters. Blowers should be variable speed for that purpose. This mode of operation will ensure that the correct oxygen levels are maintained and will result in a reduction of the electrical power consumption. - Effluent flow meter or a residual chlorine analyzer should be incorporated to facilitate adjustment of the chlorine dosing rate. In the interim period the chlorine dosing rate can be adjusted manually based by taking measurements of the chlorine residual manually three times a day. - Dewatered sludge flow meters should be included as part of the dewatered sludge pumping system, once the proposed storage bays are constructed for monitoring of the final dewatered sludge quantities. In the interim period dewatered sludge can be measured by recording the final quantities in the sludge skips.
The estimated cost of the above additional equipment and instrumentation is US$35,000, assuming an incremental cost of US$20,000 is applied for upgrading the blower starters to variable speed.
* The Operation and Maintenance provisions included in the tender documents are not sufficiently developed to allow proper supervision and management of the operational phase. The operation
150 and maintenance of the plant should be properly performed and controlled to ensure minimum acceptable standards.
* The tender documents do not include a guardhouse. This facility is required for providing accommodation to the guard and should be located at the entrance of the treatment plant. The total area of the guardhouse is 50 m2 and its estimated cost is US$35,000.
* The current design of the internal access roads is adequate.
* Provision for landscaping is well documented in the tender documents.
* With regard to design flexibility and reliability, the current process design allows a wide variation of the treatment plant loads and has the capability for treating limited shock loads. Duplication of key process units is provided, and where necessary standby units are included. The provision for future expansion is considered for certain parts of the plant. The following needs to be addressed / implemented by the Contractor: - A tie in point for the future stream should be constructed either at the last manhole of the incoming sewer upstream of the screenings plant, or following the mechanical screening channel depending on the final design. - A tie in point should be provided on the final effluent line for the extension stream. - The contractor has to clarify his design concept for the future expansion of the dewatering facilities. It is recommended that the present layout be rearranged to accommodate a future filter press unit. It is preferable that the tie-in points be constructed prior to completion of construction as construction after commissioning will result in plant stoppage for one or two days.
* Odor control provisions have not been included in this project. The review for potential odor emissions revealed that the preliminary treatment facilities, sludge thickening, and sludge storage tanks are potential emission sources. Based on the plant location and the prevailing wind direction, the impact of odor emissions will remain localized to the treatment site, and therefore odor removal units are not required. Proper house keeping and plant management will reduce potential emissions.
* Provision of noise control is well documented in the tender documents.
* A review of the health and safety provisions revealed the following: - The requirements of firefighting, safety equipment for confined spaces, and safety provisions for power transmission, are well covered in the tender documents. It is recommended that first aid provisions be included in the administration room. - The available chlorination room drawing doesn't include the standard safety provisions normally included in such facilities. These requirements are stated in the General Mechanical Specifications and include emergency shower, chlorine safety kit, and firefighting water outlet. The provision of a chlorine gas detector is specified in the contract document as "when deemed necessary". The current Contractor chlorination equipment list does not include this item. It is recommended that this be added. The estimated cost of this chlorine gas detector is US$3000.
151 - The available project drawings do not show proper storage provisions for chlorine. It is recommended that the current dimensions of the chlorination room be revised to allow an additional space of 10 rn2. The estimated construction cost for this modification is USD 9,000 based on the current rates of the Contractor. - The available project drawings do not show proper storage provisions for lime and polymner for use in the dewatering facility. It is recommended that a storage space of 30 m2 be provided. This space should be well ventilated and provided also with emergency eyewash and shower facility. The estimated construction cost for this facility is USD 14,000 based on the current rates of the Contractor. * The civil engineering specifications have been reviewed and were in general found to be adequate and conform to the specifications normally used for such facilities.
* The power supply room is adequately sized for housing the electrical switch gear of the project. However a partitioning wall is required for separating the power generators from the main control panel.
* The power generator is slightly undersized as the available calculations do not account for HVAC, specified internal and external illumination levels, and applicable power factors. The treatment plant performance will not be affected, however standby power will not be available for all the plant facilities.
* Requirements for internal and external lighting are well covered by the specifications.
* The available project documents do not show provisions for including a telephone system on site. The estimated cost for providing a telephone system in the administration building and the guardhouse is US$4,000.
* Provision for heating and air conditioning is not included in the particular specifications for the administration building. It is recommended that split type air conditioning units be installed in the offices, control room and the laboratory. The estimated cost of these units is US$15,000.
* The provision of potable water supply system and drainage (storm water and sewerage) is included in this project.
* The provision of site security system included in the project documents was checked and was found to be adequate.
A review of the treatrnentplantdesign basis and the project conditions revealedthefollowing:
* The projected loads used for developing the design were found to be reasonable and sound. However the present forecast for load progression indicates that lower flows will be reaching the plant. For the first stage design year 2005, the projected flow is 8470 m3/day.
* The present effluent discharge point is not appropriate, as it will lead to pond formation and eventually to contamination of the ground water. It is recommended that the discharge point be moved 1.5 km to the west of the current location to discharge in an existing water course. The estimated cost for extending the 800mm effluent pipe is US$700,000 based on current market rates.
152 * The effluent quality criteria specified in the contract documents are based on WHO standards for effluent reuse; however no microbiological standard was specified. It is proposed that WHO standards for restricted irrigation reuse be adopted considering the agricultural practices in the area. It is recommended that effluent reuse in agriculture be restricted to localized irrigation methods for selected crops.
* The treatment plant design efficiency was checked and found to be suitable for restricted irrigation reuse. It is recommended that effluent monitoring requirements include selected heavy metals and nematodes to ensure that the appropriate standards for reuse are met.
* Substantial data for influent nematode concentration is required to ascertain the treatment plant capability of achieving the WHO effluent standard for nematodes. It is recommended that funds be made available for constructing tertiary filters, pending the evaluation of the acquired data and establishing the need for tertiary treatment. The estimated construction cost of tertiary filters is USD 500,000 for the year 2005 projected flow, and US$750,000 for the design flow of 12,500 m3/day.
* The flow investigations carried out revealed that the initial flows reaching the plant are well below the minimum flows of 2000 m3/day required for proper plant operation. It is recommended that minor modifications be affected to operate the plant in primary treatment mode. The operation of the plant in this mode would reduce the environmental impact during the initial year of operation.
* It is anticipated that the initial flows will remain below 2000 m3/day until December year 2003. In order to accelerate the build up of flows to exceed the minimum flow required, it is recommended to proceed immediately with the construction of side manholes and lateral lines. In this instance the anticipated date for proper operation would be brought forward to January 2003. The estimated cost of these works is US$500,000
* The quantities of residual solids generated by the treatment process have been verified and were found to be reasonable.
* The proposed solids treatment scheme is adequately designed to treat the sludge generated by the treatment process for restricted reuse in agriculture. The reuse should be subject to a management and application program that should include monitoring, recommended application rates, and crop selection.
* The provision of long term storage is required for compliance with WHO microbial standards for nematodes and for proper sludge application management. The construction cost of the sludge storage facility is estimated at US$455,000 based on the revised projected flows for the year 2005. It is recommended that the storage facility be initially constructed to handle the present projected flows, for the year 2005.
* Altemative sludge disposal methods have been assessed. Sludge disposal by incineration and landfilling is very costly. Application of sludge in agriculture as a fertilizer is the preferred method due to the sludge agronomic value and the economic savings in disposal
153 A study of the potentialforeffluent and sludge reuse in agriculturerevealed thefollowing:
* The treatment plant is located in the middle of Iaat plain, which extends over 2,800 ha of arable land.
* The agro climatic conditions studied revealed that there is an acute irrigation water shortage. It is estimated that less than 270 ha are irrigated each year.
* Presently the predominant crop cultivated is tobacco, and few cereals. Traditionally however, other crops are cultivated. These include wheat, barely, potato, eggplants, cucurbitacaes, and other vegetables.
* The most commonly used method for irrigation is furrow. Sprinkler irrigation and drip system are used in some instances.
* The reuse of effluent in irrigation would provide a valuable irrigation water source. It is estimated that 120 ha could be irrigated in the year 2005, and 225 ha in the year 2015.
* It is recommended to adopt localized irrigation techniques, such as bubbler system, to minimize the risk of effluent contact with edible parts and to prevent deep water percolation.
* Irrigation with treated effluent should be performed on a daily basis to satisfy crop water demand during the irrigation period. Crop rotation should exclude raw eaten crops.
* The nitrogen content of sludge was estimated at 25 kg/ton. Based on nitrogen application limit of 100 kg/ha, it is recommended that sludge be initially applied at 4 ton/ha basis.
* Based on the projected sludge production quantities, it is estimated that the sludge can be applied to 400 ha for the year 2005, and 750 ha for the year 2015.
* Considering that the cost of applying commercial fertilizers is more economnical and has more agronomic value, it is recommended that the sludge be provided to the farmers at no cost initially.
* It is recommnended that sludge be applied on areas that are not irrigated with the effluent to avoid accumulation of contaminants.
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