Document of The World Bank

FOR OFFICIAL USE ONLY Public Disclosure Authorized Report NO: 53 152-TZ

PROJECT APPRAISAL DOCUMENT

ON A

Public Disclosure Authorized PROPOSED CREDIT

IN THE AMOUNT OF SDR 177.9 MILLION (US$270 MILLION EQUIVALENT)

INCLUDING SDR 10 MILLION (US$15 MILLION EQUIVALENT) IN PILOT CRISIS RESPONSE WINDOW RESOURCES

TO THE

UNITED REPUBLIC OF

Public Disclosure Authorized FOR THE

TRANSPORT SECTOR SUPPORT PROJECT

May 4,2010

Transport Sector Country Department AFCEl Africa Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS

(Exchange Rate Effective March 3 1,2010)

Currency Unit = Tanzania Shillings (TSh) TSh 1,357.50 = US$1 SDR 1 = US$1.51824

FISCAL YEAR July 1 - June30

ABBREVIATIONS AND ACRONYMS

AfDB APL Adaptable Program Loan ATR Air Transport Regional BADEA Banque Arabe pour le Diveloppement Economique en Afrique (Arab Bank for Economic Development in Africa) BPR Bi-annual Progress Reports CRW Crisis Response Window CTCP Central Transport Corridor Project CTCP-2 Second Central Transport Corridor Project DA Designated Account DANIDA Danish International Development Agency DBST Double Bituminous Surface Treatment DFID Department for International Development DP Development Partner DPP Division of Policy and Planning DSE Division of Safety and Environment DSM DVELA Drivers and Vehicle Examination and Licensing Agency EC European Commission EIRR Economic Internal Rate of Return EMP Environmental Management Plan ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan FM Financial Management GDP Gross Domestic Product GOT Government of Tanzania GoZ Govement of HDM-4 Highway Development and Management Model (forth version) HIV/AIDS Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding IDA International Development Association FOR OFFICIAL USE ONLY

IFC International Finance Corporation IFR Interim Financial Report IRP-2 Second Integrated Roads Project JICA Japan International Cooperation Agency JISR Joint Infiastructure Sector Review KADCO Kilimanjaro Airport Development Company Limited LGA Local Government Authority LGTP Local Government Transport Program LGR Local Government Roads MDA Ministries Departments and Agencies MKUKUTA Mkakati wa Kukuza Uchumi na Kuondoa Umasikini Tanzania (National Strategy for Growth and Reduction of Poverty 2005- 10) MoFEA Ministry of Finance and Economic Affairs MoID Ministry of Infrastructure Development NAO National Audit Office NCB National Competitive Bidding NEMC National Environmental Management Council NGO Non-governmental Organization NMT Non-motorized Transport NORAD Norwegian Agency for Development Cooperation NPV Net Present Value NRSA National Road Safety Agency NRSP National Road Safety Policy NTP National Transport Policy OPBP Operations Policy/Bank Procedures PAD Project Appraisal Document PAP Project Affected People PCN Project Concept Note PEFAR Public Expenditure and Financial Assessment Review PFM Public Financial Management PID Project Information Document PIP Project Implementation Plan PMO-RALG Prime Minister’s Office - Regional Administration and Local Government PMU Procurement Management Unit PMMR Performance based Management and Maintenance of Roads PPZAF Public-Private Infiastructure Advisory Facility PPP Public-Private Partnership PPRA Public Procurement Regulatory Authority PRSC Poverty Reduction Support Credit PS Private Sector QCBS Quality and Cost-Based Selection RAHCO Reli Asset Holding Company RAIS Road Accident Information System RAP Resettlement Action Plan RFB Road Fund Board RPF Resettlement Policy Framework

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. RUC Road User Cost SIL Specific Investment Loan sss Single Source Selection STI Sexually Transmitted Infections STSIP Short Transport Sector Investment Plan SUMATRA Surface and Marine Transport Authority SWAP Sector-wide Approach TA Technical Assistance TAA Tanzanian Airports Authority TANROADS Tanzania National Roads Agency TANZAM Tanzania Highway TAZARA Tanzania-Zambia Railway Authority TCAA Tanzania Civil Aviation Authority TEU Twenty-foot equivalent unit TICTS Tanzania International Container Terminal Services TOR Terms of Reference TPA TRC Tanzania Railway Corporation . TRL Tanzania Railways Limited TSIP Transport Sector Investment Program TSSP Transport Sector Support Project TSh Tanzanian Shillings UK United Kingdom VAT Value Added Tax voc Vehicle Operating Cost

Vice President: Obiageli K. Ezekwezili Country ManagerDirector: John Murray McIntire Sector Director: Inger Andersen Sector Manager C. Sanjivi Rajasingham Task Team Leader: Dieter E. Schelling TANZANIA TRANSPORT SECTOR SUPPORT PROJECT

CONTENTS

Page I. STRATEGIC CONTEXT AND RATIONALE ...... 1 A . Country and sector issues...... 1 B . Rationale for Bank involvement ...... 6 C . Higher level objectives to which the project contributes...... 6 I1. PROJECT DESCRIPTION ...... 6 A . Lending instrument ...... 6 B . Project development objective and key indicators...... 7 C . Project components ...... 7 D . Lessons learned and reflected in the project design...... 8 E . Alternatives considered and reasons for rejection ...... 9 I11 . IMPLEMENTATION ...... 10 A . Partnership arrangements ...... 10 B . Institutional and implementation arrangements ...... 10 C . Monitoring and evaluation of outcomes/results...... 11 ... D . Sustainability...... 11 E . Critical risks and possible controversial aspects...... 11 F . Credit conditions and covenants ...... 12

Iv . APPRAISAL SUMMARY ...... 13 A . Economic and financial analyses ...... 13 B . Technical ...... 14 C . Fiduciary ...... 16 D . Environment ...... 17 E . Social...... 18 F . Safeguard policies triggered ...... 20 G . Policy Exceptions and Readiness ...... 20 Annex 1: Country and Sector Background ...... 21 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ...... 29 Annex 3: Results Framework and Monitoring ...... 33 Annex 4: Detailed Project Description ...... 35 Annex 5: Project Costs (US$ million. including contingencies)...... 46 Annex 6: Implementation Arrangements ...... 47 Annex 7: Financial Management and Disbursement Arrangements ...... 52 Annex 8: Procurement Arrangements ...... 65 Annex 9: Economic and Financial Analysis ...... 77 Annex 10: Safeguards Policy Issues ...... 93 Annex 11: Project Preparation and Supervision ...... 103 Annex 12: Documents in the Project File ...... 105 Annex 13: Statement of Loans and Credits ...... 106 Annex 14: Country at a Glance ...... "...... 108 Annex 15: Map ...... 110 IBRD Map 37214 TANZANIA

TRANSPORT SECTOR SUPPORT PROJECT

PROJECT APPRAISAL DOCUMENT

AFRICA

AFTTR

Date: May 4,2010 Team Leader: Dieter E. Schelling Country Director: John Murray McIntire Sectors: Roads and highways (62%); Aviation Sector ManagerAIirector: C. Sanjivi (24%); Agricultural markets and trade (1 0%); RajasinghdInger Andersen General transportation sector (4%) Themes: Rural services and infrastructure (72%); Infrastructure services for private sector development (26%); Other public sector governance (2%) Project ID: PO55120 Environmental category: Category B - Partial Assessment Lending Instrument: Specific Investment Loan Project Financing Data [ ]Loan [XI Credit [ 3 Grant [ ]Guarantee [ ]Other:

Source Local Foreign Total BORROWERRECIPIENT 11.7 0.0 11.7 International Development Association 40.0 230.0 270.0 (IDA) Total: 51.7 230.0 281.7 Borrower: United Republic of Tanzania, Ministry of Finance and Economic Affairs P.O. Box 91 11 Dar es Salaam, Tanzania Tanzania Tel: +255 22 21 12854Fax: +255 22 21 17090 / 21 10326 www .mof.go. tz

Responsible Agencies: Tanzania National Roads Agency (TANROADS) Tanzania Airports Authority (TAA) Ministry of Infrastructure Development (MoID)

1 ;Y 2011 2012 2013 2014 2015 !innual 50 85 85 35 15 hnulative 50 135 220 255 270

bridges damaged by recent floods at approximately one hundred locations throughout Tanzania. Which safeguard policies are triggered, if any? Ref: PAD IK F., Technical Annex 10 Following safeguard policies are triggered: Environmental Assessment (OP/BP/GP 4.01); Cultural Property (OP 4.1 1); and Involuntary Resettlement (OP/BP 4.12) Significant, non-standard conditions, if any, for: Ref: PAD III.F. ii Board presentation: none Credit effectiveness: (a) The Subsidiary Agreement has been duly executed on behalf of the Recipient and TANROADS. (b) The Subsidiary Agreement has been duly executed on behalf of the Recipient and TAA. (c) TANROADS, TAA and MODhave adopted the Project Implementation Plan, in a form and substance satisfactory to the Association. (d) TANROADS has recruited three procurement specialists with terms of reference satisfactory to the Association.

The Additional Legal Matter shall be that the Subsidiary Agreements have been duly authorized or ratified by the Recipient, TANROADS and TAA, as the case may be, and are legally binding upon the Recipient, TANROADS and TAA in accordance with their respective terms.

Retroactive financing is allowed for Component E, Emergency Road and Bridge Repair, of this project. For eligible expenditures under this Component withdrawals up to an aggregate amount not to exceed US$6 million equivalent may be made for payments made within one year prior to the signing date of the Financing Agreement but not earlier than on or after November 15,2009.

... 111

I. STRATEGIC CONTEXT AND RATIONALE

A. Country and sector issues

1. Tanzania's Economy. From 2002 to 2008 Tanzania has experienced sustained growth of around seven percent thanks to the implementation, since the mid nineties, of a comprehensive economic reform program that has produced good macroeconomic performance and stability characterized by relatively high economic growth and low inflation. One of the country's main challenges remains to translate economic growth into poverty reduction, with the country registering only a small decline in poverty incidence from 35.7 percent in 2001 to 33.5 percent in 2007. Key growth sectors are mining, construction, manufacturing, and tourism - all sectors that strongly depend on and generate transport. Poor transport infrastructure is a major bottleneck and increased and sustained investment is needed. Past finance has been insufficient to cope with growth and to ensure an appropriate infrastructure platfonn to achieve the Millennium Development Goals or the National Development Vision 2025.

2. The global financial crisis is estimated to result in a decline in gross domestic product (GDP) growth from 7.4 percent in 2008 to 6 percent in 2009.' The main sectors affected by the slowdown are the cash crop sectors (cotton and coffee), mineral sector, tourism sector, and manufacturing sector (mainly textile and leather industries), which underpin exports. Capital flows, both foreign assistance and private investment flows, have also declined. The economy is only expected to return to growth rates of around seven percent in 2012. If the adverse social impact is uniformly distributed, the number of poor is estimated to increase by one percent. Initial information indicates that the transport sector is only marginally affected by the global crisis. Throughputs at the ports and airports have been steady and the fuel consumption has increase close to the predicted amount.

3. Transport System. The current transport system consists of roads, railways, aviation, water transport and pipelines. The road network length on the mainland of Tanzania is 86,472 kilometers (Zanzibar has about 1,600 kilometers of roads). This includes trunk and regional roads (29,847 kilometers), which are managed by the Tanzania National Roads Agency (TANROADS) and the urban, district, and feeder roads with a total length of 56,625 kilometers managed by the 132 Local Government Authorities (LGA). The Tanzania railways system has a total length of 3,681 kilometers of which 2,706 kilometers are operated by Tanzania Railways Limited (TRL), and 975 kilometers by the Tanzania-Zambia Railway Authority (TAZARA). The Tanzania Port Authority (TPA) is responsible for all ocean and lake ports. The most important ports are Dar es Salaam (DSM), Tanga and on the mainland shore, and , and Itungi on the inland lakes. There are a total of 368 aerodromes, 59 of which are owned, managed and operated by the Tanzania Airports Authority (TAA), and the others by a variety of entities including national park authorities and the private sector. There are four international airports namely the Julius Nyerere, Kilimanjaro, Mwanza and Zanzibar airports. The Zanzibar International Airport is managed by the Government of Zanzibar (GoZ) as is the case for the Zanzibar and Pemba ports and roads. The Tanzania - Zambia (TANZAM) pipeline provides oil for the refinery in Lusaka, Zambia, via the DSM port.

' Economic Survey 2009, Ministry of Finance and Economic Affairs. 1 4. Institutional Reforms Achieved. Tanzania has, for about ten years, embarked on fundamental reform of transport sector management. These reforms include the delegation of regulatory and executive functions to autonomous authorities such as the Tanzania Civil Aviation Authority (TCAA), the Surface and Marine Transport Authority (SUMATRA), TANROADS, TPA and TAA, the creation of an independent user financed funding mechanism for road maintenance - the Road Fund, the concessioning of the operations of transport entities to private operators such as the container terminal in the Dar es Salaam Port (TICTS), and the focusing of the Ministry of Infrastructure Development (MoID) - the Ministry responsible for transport - on policy setting and sector oversight.

5. National Transport Policy. The National Transport Policy (NTP) was formally approved by the Government of Tanzania (GOT) in 2003. The over-riding goal of NTP is to facilitate the achievement of the National Development Vision 2025, the Millennium Development Goals (2015), and the National Strategy for Growth and Reduction of Poverty 2005-10 (known as MKUKUTA). The key objectives of the NTP are as follows: (i) ensure optimal use of resources by investing in improved infrastructure in all modes of transport, promote modal efficiency and enhance competition; (ii) recover some of the cost from users and support the overall socio-economic development in a most cost effective manner; (iii) promote public-private partnership (PPP) in the development of transport infrastructure, where the private sector can easily invest alone; (iv) attract private sector for investments in seaports, airports and railways, whereas the roads will remain the responsibility of the GOTand development partners.

6. Transport Sector Investment Program. GOT has prepared a 10-year (2007/08 to 2016/17) Transport Sector Investment Program (TSIP). The first phase of TSIP (2007/08 to 201 1/12) was estimated to cost US$6.2 billion (see table 1 below).

Table 1: Summary of the TSIP Phase 1 - 2007/08 - 2011/12 (US$ million) I 2007/08 2008/09 2009/10 I 2010/11 I 2011/2012 Total

Source: MID, April 2008 *Cross cutting issues include safety and security, environmental, HIV/AIDS and gender mainstreaming.

7. After commencement of the implementation of TSIP it was realized that there is a need to bring it in line with the government’s Medium Term Expenditure Framework (MTEF). On this basis, three year rolling plans or Short Transport Sector Investment Plans (STSIP) will now be prepared and updated annually. The first STSIP for the years 2010/11 to 2012/13, which would be supported by the Transport Sector Support Project (TSSP), as well as the actual expenditures during the financial years 2007/08 and 2008/09 and the budget for 2009/10 are shown in Table 2 below.

2 Table 2: Planned Expenditures under STSIP 2010/11 to 2012/13, and Actual and Budgeted

8. STSIP is still very ambitious with investments nearly planned to double in 2010/11 and almost triple in 2012/13 as compared to the budget of 2009/10. However, starting 2010/11 it is expected that important development partner (DP) funding (mainly the Millennium Challenge Corporation and International Development Association (IDA)) will commence to disburse. Also, GOThas recently awarded paving and rehabilitation contracts on about 1,200 kilometers of roads for a total amount of almost US$l billion equivalent and disbursement for these contracts will peak in 2011/12 and 2012/13 (if GOT can allocate sufficient resources starting FY10/11). Details of the investment plans are shown in Table A1 -7 and A1 -8 of Annex 1.

9. Support from Development Partners. A large number of DPs including the African Development Bank (AfDB), the Japan International Cooperation Agency (JICA), the European Commission (EC), the Danish International Development Agency (DANIDA), the Millennium Challenge Corporation (MCC), the Department for International Development (DFID), the World Bank, as well as Korea, Kuwait, Abu Dhabi, the Arab Bank for Economic Development in Africa (BADEA) and OPEC are supporting the TSIP. DPs are well coordinated in a Transport Sector Development Partner group whose secretariat is provided by the EC. Annual Joint Infrastructure Sector Review (JISR) meetings are being held where the implementation of TSIP is being reviewed and progress monitored through a joint Performance Assessment Framework linked to the growth cluster (cluster I) of the poverty eradication program (MKUKUTA). Joint (GOT-DP) Technical Committee meetings are held quarterly to review progress of the implementation of the action program agreed during the JISR meetings.

10. The Roads Sub-sector. The roads sub-sector has been fundamentally reformed over the past ten years and substantial improvements have been achieved. After the establishment of TANROADS in 2000 the condition of the national road network improved from 50 percent in poor condition to only five percent in poor condition (June 2009). The road fund’s annual collection is now above US$200 million per annum, one of the largest in Africa, and is the main contributor to the improved condition of roads. Local governments (who manage 66 percent of the total network and get 30 percent of the road fund) are increasingly performing better (the condition of local government roads has improved from 50 percent in good and fair condition in 2005 to 55.5 percent in 2009) and a strong private road construction industry has been created, which started from scratch and is now executing the entire road maintenance program funded by the road fund. Still there is a backlog of rehabilitation of paved trunk roads of which about 1,200 kilometers are in urgent need of rehabilitation.

3 11. Local Government Roads (LGR). There are 56,625 kilometers of gazetted LGR in mainland Tanzania. Of these 5,897 kilometers are urban roads and the balance of 50,728 kilometers are rural roads. These are managed by 132 Local Government Authorities (LGA). Total funding for LGR in FY2008/09 was about TSh 75 billion (US$% million equivalent of which about 78 percent for maintenance and 22 percent for development). This amounts to approximately US$0.4 million on average per district or US$971 per km of LGR per annum. The government has prepared a Local Government Transport Program (LGTP) and it is planned to increase funding for LGR over the coming years to about TSh 110 billion (about US$80 million equivalent) per annum from FY2009/10 onwards. GOTbudget for development needs to grow from the TSh 10 billion budgeted in FY09/10 to at least TSh 35 billion to cover the projected growing funding gap due to increased needs. Another matter is urban local government roads. There are huge funding needs which are not fully taken into account in LGTP. Here, IDA’S Strategic Cities Project plans to finance about US$130 million for the construction of 135 kilometers of urban roads in seven regional cities, and a follow-on project exclusively for Dar es Salaam is being envisaged. Since the demand for urban roads is huge and growing, cities will have to develop their own tax base for this purpose (mainly the property tax). Furthermore, there is an urgent need for the development of urban transport management capacity (see also Annex 1, paragraph 13).

12. Road Safety. The road safety situation in the country is dire with 2,905 road accident deaths and 17,861 injuries in 2008 and an average annual increase of causalities of six percent since 2000. A National Road Safety Policy (NRSP) has been approved in February 2009. NRSP proposes to create a National Road Safety Agency (NRSA) and a Driver and Vehicle Examination and Licensing Agency (DVELA). As part of its restructuring MODhas established a Division of Safety and Environment (DSE) by merging the Road Safety Unit and Environmental Unit.

13. Railway Sub-sector. The Tanzania-Zambia Railway Authority (TAZARA) and TRL are performing poorly. Currently they only transport about five percent of the total freight (about 500,000 tons annually each) in their respective corridors. The balance is transported by road, and this has a devastating effect on the corridor roadsS2The central railway (TRC) was concessioned to TRL in September 2007. However, the railway has failed to increase its share of freight in the corridor, substantial operating losses have been incurred, and the private operator has decided to pull out and is selling its shares to GOT. TAZARA is performing equally poor. At a conference for the revival of the East African railways in Dar es Salaam in March 2010 a consensus emerged regarding: (i) the undercapitalization of the existing railways; (ii) the shortcomings of the existing concession model; and (iii) the absence of a regulatory framework that would ensure a level playing field for competition between rail and road transport. Given the corrections of these shortcomings, IDA and other DP have indicated that they would be ready to assist the revival of the existing railway system with their various financial instruments. More workkonsultations are needed to define and agree on investment plans. Studies are on-going in respect of the East African governments’ desired expansion of the rail network and change to

’Generally it is expected that the life span of roads will be reduced by half, from about twenty years to ten years, due to impact of the additional heavy freight traffic (and not due to overloading of trucks, which is another matter, but is under relatively good control by TANROADS, with only about six percent incidences of overloaded trucks). 4 standard gauge. It remains to be seen if this will be viable and if the private sector will be willing to contribute.

14. Air Transport Sub-sector. Both domestic and international scheduled air transport traffic has grown significantly between 2001 and 2008, having nearly doubled domestically and more than doubled internationally. However, Tanzania’s air transport infrastructure is facing significant deficiencies which are becoming a hindrance for further growth. Scheduled traffic to one regional airport, Bukoba, has already been cancelled by Tanzania’s most important domestic carrier due to inadequate runway conditions, though solid demand for scheduled traffic has been proven to exist. Also, Tanzania’s main international gateway, Julius Nyerere International Airport in DSM, is facing shortage of capacity at its main terminal. Since tourism is one of Tanzania’s revenue sources, facing a decline in air transport capacity or potential for growth, on both of which tourism depends heavily, would have large economic implications.

15. Ports Sub-sector. Until recently the poor performance of the DSM port was a key impediment to trade and consequently to the improved performance of the Tanzanian economy. The dwell time (for imported containers) has been consistently above 20 days over the past decade. Recently, however, thanks to recent pertinent measures taken, the dwell time was reduced to 12 days at the beginning of 2010. With such dwell time DSM port is now performing at par with Mombasa and might be able to attract back some of the transit trade to the landlocked countries that was lost to Mombasa. One of the key requirements for further improved port performance is that the TPA assumes its role as a landlord, as is required by law, and focuses on port performance rather than on operations. A Port Master Plan has been prepared with funding from IDA’S East African Trade and Transport Facilitation Project. The port master plan sets out the long term port development plan for ocean and inland water ports under the responsibility of TPA. Studies are currently on-going to investigate the feasibility of some of the proposals made in the master plan. Based on these studies important strategic choices will have to be made in respect of the next step of port development. One potentially attractive solution for enhanced port capacity is the creation of a container freight station near DSM, where containers would be hauled to via a dedicated and bonded rail line immediately after arrival. A pre-feasibility study on this is currently being conducted with Public-Private Infrastructure Advisory Facility (PPIAF) funding.

16. Public-Private Partnerships in the Transport Sector. Experience with PPP in the transport sector is mixed. The container terminal concession in the port of DSM has been controversial for some time, but was recently successfully renegotiated with the operator giving up exclusivity (which stood at 650,000 twenty-foot equivalent unit (TEU)) for increased port space. The central railway concession (see paragraph 13 above) failed and the railway reverted back to government. Also, in the case of the Kilimanjaro International Airport concession, recently the private partner pulled out and government took over. Important lessons need to be learned from these ventures. However, the government is still eager to proceed with new PPPs in the sector. An appropriate PPP policy has been prepared and approved by cabinet. The policy puts emphasis on competitive bidding ’for all PPP ventures and sets rules as to how to deal with unsolicited bids. It also proposes the establishment of a central PPP unit at the Ministry of Finance and Economic Affairs (MoFEA) and sub-units in the relevant ministries and agencies.

5 B. Rationale for Bank involvement

17. Generally, the rationale for Bank involvement is the substantial development impact of the planned interventions and their high economic benefit.

18. TSSP was originally planned as a FY04 project jointly with other DPs to assist the Tanzania transport sector in a sector wide framework. However, due to lack of an agreed sector investment plan at that time, it was determined to postpone TSSP and prepare a follow-on project to the Central Transport Corridor Project (CTCP), the Second Central Transport Corridor Project (CTCP-2), to implement some of the components prepared under CTCP, while working on the framework necessary for a sector wide project. Meanwhile a comprehensive sector investment plan, the TSIP, has been developed. Despite support to TSIP by the various DPs, important funding gaps persist, and it is important that IDA remains active in the sector.

19. An important source of value added by Bank support is its comparative worldwide experience in the preparation and implementation of major transport reform and development programs. In particular the Bank has benefited from its management of the sub-Saharan African Transport Policy Program over the past fifteen years which has provided opportunities to create and disseminate transport sector knowledge to the benefit of sub-Saharan African countries including Tanzania.

C. Higher level objectives to which the project contributes

20. This project contributes to GOT’SGrowth and Poverty Reduction Strategy (known as MKUKUTA) and particularly to its “Growth Cluster”. This second poverty reduction strategy covers the years 2005-2010. The strategy identifies three clusters of broad outcomes: (i) growth of the economy and reduction of income poverty; (ii) improvement of quality of life and social well-being; and (iii) governance and accountability. The World Bank jointly with the other DPs has prepared a FY07- FY 10 Joint Assistance Strategy for Tanzania (currently being extended to cover also FY11) in support of MKUKUTA. Within that strategy TSIP, and therefore TSSP, would support cluster I of MKUKUTA which strives “to further improve prospects of growth, especially improvement of the investment climate, through better informed choices and better financed progams in agriculture, forestry, environment, and mining; reduced infrastructure bottlenecks, notably in transport and energy; a stronger focus on improving labor force skills; deepening reforms in the financial sector and enabling environment for private sector activities; and increased regional integration.”

11. PROJECT DESCRIPTION

A. Lending instrument

21. TSSP is proposed to be a Specific Investment Loan (SIL). It will support a three year slice of the government’s 10-year TSIP. If implemented successfully, it is envisaged to be followed by similar successor projects that will support the implementation of further three year slices of TSIP. A SIL was chosen rather than an Adaptable Program Loan (APL) for the following reasons. First, this project can build on existing reforms that were achieved with the

6 support of past Bank projects, and select high priority and high return investments that are ready to be implemented. Second, although there is a clear need for long term engagement, the government still needs to make important strategic choices, particularly regarding railway and port development, before concrete investment plans can be agreed. Given the uncertainty of the timing and content of such decisions, it is difficult to set APL triggers for a multi-phased program. Therefore this SIL focuses on clearly identified priorities in the road and aviation sub- sectors, while it is possible that follow-on SILs would focus on the railways and/or ports sub- sectors once respective strategic choices are made and investment needs are clearly identified.

22. Total estimated project cost is US$28 1.7 million of which IDA US$270 million and GOT US$11.7 million equivalent (for the airport component). The IDA amount includes US$15 million fiom the IDA Crisis Response Window (CRW), for which OP/BP 8.00, Rapid Response to Crises and Emergencies Guidelines are applied. The proposed use of funds is aligned with the CRW objectives in the following ways. First, the project will protect core spending on priority pro-growth investments in transport infiastructure that would otherwise be delayed due to financing constraints caused by the global crisis. The government has preserved expenditures as budgeted in an effort to mitigate the impact of the global financial crisis, providing a de facto fiscal stimulus. As a result, the budget deficit after grants for FY08/09 increased to 4.5 percent of GDP fiom 1.6 percent in the previous year, and is projected to further worsen to 6.1 percent in FY09/10. The floods in December 2009 and January 2010 occurred under the already strained fiscal conditions. Second, investments will contribute to mitigate the impacts of the global financial crisis on the poor by ensuring accessibility in rural areas and by reducing transport cost. The Component E will support repairs of critical national trunk roads on which many parts of the country depend for transport of goods and passengers. Third, the CRW resources will be used rapidly. The emergency repair works have already commenced and will be retroactively financed up to the limit of eligibility for retroactive financing (40 percent of US$15 million). It is expected that all CRW funds will be used in the 2010 calendar year.

B. Project development objective and key indicators

23. The development objectives of the project are: to improve the condition of the national paved road network, to lower transport cost on selected roads, and to expand the capacity of selected regional airports. The project outcome indicators are the following: (i) average vehicle operating costs on Korogwe - Same and - Minjingu roads; (ii) roads in good and fair condition as a share of total classified roads (Core Indicator); and (iii) passenger volumes at Bukoba, Kigoma and airports. There are an estimated 5.15 million direct beneficiaries (users of the transport facilities) and a further 11.1 million indirect beneficiaries who will gain from the reduced transport costs in the affected regions. The Results Framework including key performance indicators, baseline data and arrangements for the results monitoring is shown in Annex 3.

C. Project components

24. Component A: Rehabilitation and preparation of designs for the rehabilitation of paved trunk roads (US$186.5 million, 100 percent IDA fmanced): this component will be implemented by TANROADS and will finance, out of the rehabilitation backlog of about 1,200

7 kilometers of paved trunk roads: (i) rehabilitation of the Korogwe - Same road (1 72 kilometers); (ii) rehabilitation of the Arusha - Minjingu road (98 kilometers); and (iii) the preparation of design and bidding documents for future rehabilitation of 91 1 kilometers of paved trunk roads. The Korogwe-Same road forms part of the North East Corridor (T2), which is a major link between the east coast and the popular tourist destinations in the north of Tanzania. It is also the main road link between DSM and Nairobi, the major trading centers of Tanzania and respectively. The Arusha - Minjingu road is part of the great African North - South axis f?om Cairo to Cape Town, and also it connects Arusha with the important northern Tanzanian national parks including Serengeti.

25. Component B: Improvement of regional airports (US$69.2 million of which IDA US$57.5 million and GoT US$11.7 million): this component will be implemented by the TAA. Under this component the paving and rehabilitation of the runway at , the rehabilitation of the main runway at , as well as the extension, rehabilitation, and resurfacing of the runway at , with the replacement of the current apron, terminal, car parking, and other facilities, will be financed. Out of the thirteen high priority commercial airports identified under the TSIP for immediate improvement, design and bidding documents have been prepared for seven airports. Among them, these three airports have been selected due to their high economic returns and the low likelihood to get other financing.

26. Component C: Improvement of road safety (US$6.0 million, 100% IDA fmanced): this component will be implemented by MoID. It will support the establishment of the National Road Safety Agency (NRSA), the Driver and Vehicle Examination and Licensing Agency (DVELA), and the development of a Road Accident Information System (RAIS), as proposed in the recently adopted National Road Safety Policy (NRSP).

27. Component D: Promotion of Public-Private Partnerships: (US$5.0 million, 100% IDA fmanced): the implementation of this component will be overseen by MoID, while actual contracts for feasibility studies and transaction advisors would be procured by the concerned entities (TANROADS, TAA, TPA, PMO-MLG, RAHCO). This component would include: (i) capacity building for the implementation of PPP projects; (ii) feasibility studies of potential PPP projects; and (iii) transaction advisors for projects that were found feasible.

28. Component E: Emergency Road and Bridge Repair: (US$15 million, 100% IDA fmanced): this component will be implemented by TANROADS. Emergency repair of parts of national roads and bridges damaged by recent floods at approximately one hundred locations throughout Tanzania will be executed under this component. Rapid Response to Crises and Emergencies Guidelines of the World Bank (OP 8.00) apply. This includes retroactive financing (of 40 percent of the component amount) and accelerated, consolidated, and simplified procedures under streamlined ex-ante procurement and safeguards requirement, as outlined in Annex 8, paragraph 4, and Annex 10, paragraph 25 of this document.

D. Lessons learned and reflected in the project design

8 29. The lessons learned from the implementation experience of the closed Second Integrated Roads Project (IRP-2) (closed on December 31, 2006) and CTCP (closed on December 31, 2009), as well as from the on-going CTCP-2, have been reflected in the design of TSSP and these lessons are discussed in the paragraphs below.

30. The key lesson from IRP-2, whose outcome was rated as moderately unsatisfactory and which took twelve years to implement, was that it is essential that appropriate institutions must be put in place before the support can be scaled up. Meanwhile the creation of institutions such as TANROADS, the Road Fund Board, SUMATRA, TAA, TCAA, TPA, etc. has substantially increased sector capacity and time is ripe for scaling up our support in the sector.

3 1. The ICR of CTCP which supported both rail and road development is under preparation. The final supervision report rated the roads component satisfactory and the rail component unsatisfactory. However, there is a link between the two components and it is feared that the shift of freight from rail to road will have a negative impact on the central corridor road. As elaborated in paragraphs 13 and 33 of this document, efforts are being made to revive the railways in and to re-establish a balance between road and rail transport. Such efforts could be supported under a future follow-on project to TSSP.

32. CTCP-2 is under implementation and is being considered for restructuring as elaborated in the paragraph below. CTCP-2 has been affected by the construction cost increase in recent years. TSSP has taken the new cost levels into account. However, market observations have shown that the construction costs are now relatively stable and that competition for works contracts has improved.

E. Alternatives considered and reasons for rejection 33. At the Project Concept Note (PCN) stage the design of TSSP included eight components for national roads, local government roads, rail, aviation, ports, capacity building components as well as filling the financing gaps of CTCP-2. This was because each sub-sector plays an important role in the transport system, and requires support as part of the comprehensive sector investment program. Nonetheless, to minimize complexity of the project and focus on sub- sectors that are ready for immediate investments, several components have been dropped or simplified.

(i) Local Government Roads (LGR): At PCN stage a capacity building component for the Prime Minister’s Office - Regional Administration and Local Government (PMO- RALG) was proposed. However, it was felt that support is still available from other DP and that capacity of local governments to manage their networks has substantially increased. This is primarily a result of the ever increasing allocation from the road fund that local governments receive which is now about 80 percent of the total funding for local government roads. (ii) Railways: Originally TSSP contained a rail infiastructure investment component for TRL. Meanwhile, however, the TRL concession has failed and the rail reverted back to government (see paragraph 13). The GOTnow needs to develop a rescue plan and a longer term strategy for TRL before new investments can be justified. Also, it has

9 become clear that a substantial sum of funding will be required to revive the railway (in the range of US$400 million). Future support for railways will be considered once a conducive framework is in place. (iii) Ports: As explained in paragraph 15, studies are on-going to the feasibility of some of the port capacity expansion proposals made (in the port master plan). None of them are ready for investment. Also, operational improvements at the port and the international financial crisis have decreased the pressure for port expansion. Under the PPP component of this project, however, it is planned to promote feasible PPP arrangements and the residual investments needs (that cannot be borne by the private sector) could be financed under a future project. (iv) Capacity Enhancement of MdD: In terms of capacity building at the MoID there is currently substantial support being provided jointly by DANIDA, EC and DFID. Therefore, it was decided that IDA will focus on two specific areas where no other support is available, namely, road safety (component C) and promotion of PPP (component D). (v) Financing Gap of CTCP-2. To avoid having to close the financing gap of multiple components of CTCP-2, it was decided to restructure CTCP-2 by transferring one of its components (the rehabilitation of the’Korogwe- Same road3) to TSSP and thereby closing the financing gap of the remaining two components (the Zanzibar airport and bus rapid transit components) entirely. 111. IMPLEMENTATION

A. Partnership arrangements

34. In Tanzania there is good partnership between the transport sector DPs. A Transport Sector Development Partner group has been formed chaired by the EC. All DPs have agreed to move jointly with GOT towards a sector-wide approach (SWAP). While some donors have moved towards budget support (EC and DFID), the majority of the sector funding will continue to be parallel financing for the time being, but with a single agreed investment program (TSIP) in support of the country’s poverty reduction program (MKUKUTA). There is an annual Joint Infrastructure Sector Review (JISR) where the status of the sector is discussed between stakeholders, and implementation plans of TSIP are reviewed and updated. Furthermore, there are quarterly Joint Technical Committee meetings where progress on the implementation of the annual plans is reviewed. Also, an Infrastructure Roundtable is held twice a year between GOT decision makers and DPs on strategic challenges in the sector and ways to overcome them.

B. Institutional and implementation arrangements

35. TANROADS, MoID and TAA will be the implementing agencies of the project and will manage the procurement of contracts under their respective components. MoID and TAA will not manage IDA funds and will therefore not open any Bank account. TANROADS will effect payments for all procurement made by MoID and TAA. Moreover, TANROADS will constitute

Bidding for Korogwe - Same road works was launched in mid 2008 but resulted in the lowest bid price being 100 percent above engineer’s estimate. Thereafter, it was decided to reject this bid, to rescope and to re-launch. Due to this delay, commencement of works on this road is now in line with the expected effectiveness of TSSP.

10 the operational link to the IDA and GOT on matters related to the implementation, accounting and reporting for the project. This arrangement will make demands on TANROADS’ ability to coordinate the activities of MoID and TAA. TANROADS has a track record of managing Bank financed projects and has in the recent past implemented CTCP and CTCP-2 satisfactorily. TANROADS will therefore be able to coordinate the activities of this project. The details of the implementation arrangements will be captured in the Project Implementation Plan (PIP) whose submission in a form and substance satisfactory to IDA is a condition of effectiveness of this credit.

C. Monitoring and evaluation of outcomes/results

36. The overall responsibility for monitoring and evaluation of outcomes of this project will be with MoID. TANROADS will prepare bi-annual progress reports (BPR) that will include reports produced by TAA and MOLD. The BPR will report on physical progress of the various subprojects and on the progress of the project monitoring indicators as per the project’s results framework (see Annex 3). The BPR will also contain a summary of the status of the implementation of the Environmental and Social Management Plans (ESMPs). TANROADS will submit the BPR not later than one month after the report period to MoFEA, MoID and IDA.

D. Sustainability

37. Crucial for the sustainability of the transport sector program is that MoID enhances its policy setting, strategic planning, oversight and monitoring capacity and assists the various executing entities to perform their duties. Various DPs (EC, DFID, JICA and DANIDA) are assisting MoID to enhance its performance and it was found not necessary for IDA to engage itself other than in respect to the capacity to prepare and implement PPP and assistance to implement the road safety policy.

E. Critical risks and possible controversial aspects 38. The overall risk rating for this project after mitigation is assessed as moderate. The critical risks and the proposed mitigation measures are set out in Table 3 below. No controversial aspects are foreseen.

Table 3: Critical Risks

11 Critical Risks Rating Mitigation Measures Residual Risk Financial management risks substantial TANROADS (entity responsible for Moderate There are some country level risks (e.g. financial management has a good stretched capacity of the National Audit track record in managing bank funded Office, see Annex 7). projects. Procurement risks substantial A plan to mitigate these risks is shown Moderate MoID and TAA have hitherto not been in Annex 8. In particular executing Bank projects and TANROADS will employ three TANROADs lacks staff to deal with its additional procurement staff prior to hugely increased program (see Annex 8) effectiveness of this credit.

Governance risks substantial TANROADs has subscribed to the Moderate Perceived and actual corruption in the DFID and IDA supported COST sector. (Construction Sector Transparency) initiative which is also supported by the Prevention and Combating of Corruption Bureau (PCCB) Safeguard risks (environmental)) substantial Emshave been prepared for each Moderate Large works contracts are being individual contract and the team will executed under this project which have ensure proper implementation during potentially substantial environmental supervision. impacts. Safeguard risks (animal migration) substantial The particular EMP requires strict Moderate The Arusha to Minjingu road leads measures to reduce speed (signaling, through an animal migration corridor speed pumps and rumble strips) in the between two national parks. corridor (about 50 km). Safeguard risks (social) substantial A RPF satisfactory to IDA has been Moderate Sub-projects financed under this credit prepared and disclosed. Required require resettlement. resettlement action at Bukoba airport has already been executed satisfactory to IDA. Cost risks: substantial Unit costs have been aligned with Moderate Costs of works may exceed estimates as those of recent bids and substantial has happened often in the recent past. contingencies (15%) have been added. Risks related to road safety component: Substantial The sector team plans to focus on this Moderate Political will to implement road safety issue with relevant sector work and policy and strategy might be lacking. information campaigns with the press and parliament. Risks related to PPP component: substantial Moderate Government entities may be reluctant to Government has adopted a conductive apply good practice approaches to PPPs. PPP policy and the World Bank Public opinion is not favorable to PPP through its various teams is ready to due to some failed PPPs in the recent assist implementing it and to support Dast in Tanzania. outreach activities.

The overall risk rating for this project is Moderate.

F. Credit conditions and covenants 39. The Additional Conditions of Effectiveness consist of the following: Ci) The Subsidiary Agreement has been duly executed on behalf of the Recipient and TANROADS.

12 (ii) The Subsidiary Agreement has been duly executed on behalf of the Recipient and TAA. (iii) TANROADS, TAA and MoID have adopted the PIP, in a form and substance satisfactory to the Association. (iv) TANROADS has recruited three procurement specialists with terms of reference satisfactory to the Association. 40. The Additional Legal Matter shall be that the Subsidiary Agreements have been duly authorized or ratified by the Recipient, TANROADS and TAA, as the case may be, and are legally binding upon the Recipient, TANROADS and TAA in accordance with their respective terms.

41. Retroactive financing is allowed for Component E, Emergency Road and Bridge Repair, of this project. For eligible expenditures under this Component withdrawals up to an aggregate amount not to exceed US$6 million equivalent may be made for payments made within one year prior to the signing date of the Financing Agreement but not earlier than on or after November 15,2009.

IV. APPRAISAL SUMMARY

A. Economic and financial analyses

Economic

42. Roads: the Arusha -Minjingu (98 km) and Korogwe-Same (172 km) roads have been studied and an economic evaluation of the proposed rehabilitation and upgrading on the two roads has been completed. The economic internal rates of return (EIRR), calculated using the Highway Development Management Model (HDM-4) version 4, vary from about 9 to 27 percent for the Arusha-Minjingu road with an average of 15.2 percent. At the same time the average EIRR values for Korogwe-Same road were 19 and 19.9 percent for Korogwe - Mkumbara and Mkumbara - Same sections respectively. The estimated net present value (NPV) at a 12 percent discount rate is about US$21.5 million for Arusha-Minjingu; US$19.5 million for the Korogwe- Mkumbara and US$27.7 million for Mkumbara-Same road sections. The road works cost are estimated to be US$72 million for Arusha - Minjingu and US$101.4 million for Korogwe - Same. The economic returns are robust to changes in costs and traffic with the worst case scenario of increases in construction costs for 30 percent with a 20 percent decline in traffic growth rates yielding an EIRR of 12, 12.5, and 11.5 percent for Arusha - Minjingu, Korogwe - Mkumbara and Mkumbara - Same respectively.

43. Airports: investments at Bukoba, Kigoma and Tabora airports include the paving and rehabilitation of the runway at Kigoma airport, the rehabilitation of the main runway at Tabora airport, as well as the extension, rehabilitation, and resurfacing of the runway at Bukoba airport, with the replacement of the current apron, terminal, car parking, and other facilities. Beyond overall increase in aviation safety, benefits of the proposed investments of about US$69.2 million are estimated from projected increases in tourist traffic and spillover benefits to the local economy (which account for the majority of the total benefits). The three airports show returns

13 of 15 percent, 23 percent and 15 percent each. Further, the upgrading of the three airports has safety and security related benefits which have not been quantified and captured in the analysis.

Financial

44. The total estimated project cost is US$281.7 million, including contingencies, of which IDA is expected to fund 96 percent and the GOT four percent (US$ll.7 million). All costs include indirect taxes and direct taxes such as import duties and value added tax (VAT). IDA will finance 100 percent of all expenditures related to civil works in the roads component (including taxes), 100 percent of expenditures for purchase of goods, and consultant services, and 83 percent of the investments in the airports component (component B). The budget impact of the GOTcontribution will be minimal representing less than one percent of the transport sector budget.

B. Technical

45. The proposed rehabilitation of the Korogwe - Same road (172 kilometers) aims at strengthening the existing pavement and widening of the carriageway and shoulders to trunk road standards. Other interventions include improvements to the existing geometric alignment to increase the radius of some bends, raising the road in identified areas to protect it against flooding, and enhancement of drainage structures. The cross-section is 6.5 meters carriageway with 1.5 meter shoulders (up from 6 m carriageway and 1 m shoulders). Surfacing will be 50 millimeter asphalt concrete for the carriageway and double bituminous surface treatment (DBST) for the shoulders. All these works will be done within the existing right of way (ROW) which is not encroached.

46. Works are being procured in two separate construction packages with the possibility of a qualified firm executing the two works simultaneously under a slice-and-package arrangement. The procurement for the works is expected to commence in April 20 10 and works to commence in October 2010. The works, with duration of 30 months, are expected to be completed in April 2013. The estimated cost of the works is US$ 10 1.4 million (including 15 percent contingencies). The estimates have been updated to take into account recent increases in construction costs. One supervision consultant has been appointed to supervise both packages and the effectiveness of the consultant’s contract is subject to signing of the contractor’s contract. The cost for supervision is estimated to be US$3.5 million.

47. The proposed rehabilitation of the Arusha - Minjingu road (98 kilometers) aims at strengthening the existing pavement and improvement of road safety aspects. Generally, the current base course will be re-worked, stabilized and used as sub-base, then a new crushed rock base course of 300 mm will be placed and covered with a 50 mm asphalt concrete wearing course, including for the shoulders. The cross-section is 6.5 meters carriageway with 1.5 meter shoulders. Procurement for works has commenced and it is expected a contract can be signed by effectiveness of this project. Contract duration is 30 months, and works are hence expected to be completed by the beginning of 2013. Estimated cost (including contingencies) is US$72.0 million. The estimates have been updated to take into account recent increases in construction costs. A supervision consultant will be employed for an estimated US$2.6 million.

14 48. The proposed rehabilitation of Bukoba airport will make it capable of being served by the French built Air Transport Regional (ATR) 42, a commuter turboprop aircraft, with the runway having an expected lifetime of 20 years. The current runway surface is murram, with a length of 1,280 m x 28 m. Since Bukoba receives substantial rainfall, the runway deteriorates quickly. In addition, the runway is short and uneven. Since the apron area is too close to the runway to meet International Civil Aviation Organization standards, and the terminal buildings are adjacent to the apron area, a complete reconstruction of the airport is required to address any of the runway shortcomings. The project includes extending the runway from 1,280 m to 1,400 m, with a new width of 30 m and 3 m shoulders, a flexible pavement surface of 180 mm thickness, and improved drainage. Additionally, the current apron would be replaced with a new, expandable apron on the other side of the runway, along with new terminal facilities and a control tower. The terminal is designed to accommodate about 140 arriving and departing passengers per hour. Since the overall dimensions of the airport are changing, 1,250 m of new security fencing is included in the project. Also, the component includes 2,005 m2 of access road and car parking surfaces. The recently updated estimated cost for the complete rehabilitation of the airport is US$20.4 million, with an estimated completion time of 18 months.

49. Kigoma airport has a single murram runway of 1,767 x 30 meters. The touchdown areas of the runway have been paved, with the first 280 m of the northwestern tip of the runway having a thin surface dressing, as well as 350 m on the other end, both being in poor condition. Currently the airport’s largest passenger aircraft servicing the airport is the ATR 72 (a larger version of the ATR 42 mentioned previously), however, larger United Nations air freighters use the airport as well. Traffic projections have made the Boeing 737-800 the design aircraft for the rehabilitated airport and a larger project extending the runway and constructing new terminal facilities is planned for the fbture. In this project, the entire existing length of the runway would be reconstructed and resurfaced with a flexible asphalt pavement of 350 mm thickness, with an expected 20 year life span. In addition, drainage systems for the runway would be implemented as part of the project. The estimated cost for the rehabilitation of the runway is US$26.7 million, with an 1%month completion time.

50. Tabora airport has a primary murram runway of 1,900 m x 45 m, and a secondary runway of similar construction and 1,555 m in length. There are deformations in the profiles of the runways; low areas result in pooling of water in wet weather, and rutting in less structurally sound areas. The terminal resides by the secondary runway, which must double-duty as a taxiway to the apron for all traffic arriving on the primary runway. As in Kigoma, a.larger project has been designed for the future expansion of the airport, with the design aircraft being the ATR 72. Within this project it is proposed that the main runway of 1,900 meters be paved with a 320 mm thick flexible pavement surface, including the necessary drainage systems. The expected lifetime of the improvements would be 20 years. The cost of the improvements is US$l9.1 million, with an estimated 18 months to completion.

5 1. Also it is planned to employ one consultant to supervise the three works contracts. This should ensure consistent quality of works. The estimated cost of the supervision consultant’s contract is US$3 million

15 C. Fiduciary

52. Financial Management. The review took into consideration the FM performance of the IDA projects, CTCP 1 and CTCP I1 currently being implemented by TANROADS. A review of the TANROADS’ latest available unqualified audit reports for the years ended 30th June 2008 and 2009 were found to be satisfactory. The FM assessment drew on the 2008 Tanzania Public Expenditure and Financial Accountability Review (PEFAR) which highlights that Tanzania is still one of the top performers in PFM in Sub Saharan Afiica but progress has been slow in recent years with several outstanding challenges. However, government has implemented measures to reduce fiduciary risks, including: the approval and application of new public finance, audit, and procurement acts; the full rollout of IFMS; recruitment of qualified accountants and internal and external auditors; strengthening of the National Audit Office (NAO); and reform of the public procurement system. Due to the above measures, both the quality and timeliness of financial reporting have improved and there is more accurate and timely information available regarding financial flows. All ministries are now submitting their annual financial statements within the statutory period.

53. Despite these achievements, fiduciary risks in the areas of internal controls, oversight functions, and procurement remain weak. Nevertheless, appropriate risk mitigation measures were identified and incorporated in the project design. These include: (a) adequate FM. supervision during project supervision; (b) strengthened internal audit and audit committees; (c) annual fiduciary assessments through PEFARs; and (d) adequate supervision and quality assurance of the project by the oversight agencies. Programs such as the Public Financial Management Reform Program and Local Government Reform Program are being used by government to fund these mitigation measures at central and local government levels. Details of the financial management assessment are included in Annex 7.

54. In order to ensure that the project is effectively implemented, TANROADS, MoID and TAA will ensure that appropriate staffing arrangements are maintained throughout the life of the project.

55. The conclusion of the assessment is that the financial management arrangements have an overall residual risk rating of moderate. They satisfl the Bank’s minimum requirements under OP/BP10.02 and therefore are adequate to provide, with reasonable assurance, accurate and timely information on the status of the project required by IDA.

56. Procurement. Public procurement in Tanzania is governed by the Tanzania Public Procurement Act (CAP 410, R.E, 2004). The Act has been reviewed by the World Bank and found to be satisfactory and consistent with Bank Procurement Guidelines except the provisions of Clause 49 that permits the application of national preference in bid evaluation for National Competitive Bidding (NCB). Following the Act, the Public Procurement Regulatory Authority (PPRA) was established and the procurement function was fully decentralized to procuring entities. Since its establishment in May 2005, PPRA has made tremendous progress towards building a robust procurement system as recommended by the 2003 Country Procurement Assessment Report.

16 57. PPRA has developed various instruments for implementing the Act including: (i) preparation and distribution of Procurement Regulations for Goods, Works and Non-Consultant Services, and Regulations for Employment and Selection of Consultants; (ii) standard bidding documents for the procurement of goods, works and non consultant services, as well as for the employment and selection of consultants; (iii) guidelines for use of the Standard Bidding Documents; (iv) guidelines for preparing responsive bids and for evaluation of bids; (v) capacity building strategy including organization of regular training courses; (vi) proposals for structures of Procurement Management Units (PMUs) in procurement entities, staffing levels of PMUs and Scheme of Service for procurement experts; (vii) system for checking and monitoring procurement activities in the country and development of performance indicators for the same; and (viii) development of a Procurement Information Management System. The major tasks of PPRA at the national level are to:

(i) implement the above strategies and use the tools that have been developed; and (ii) implement other reforms that will ensure that the system is more efficient, transparent and it delivers value for money.

58. Procurement for the project will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, revised October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, revised October 2006, Guidelines on Preventing and Combating Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants, dated October, 2006 and the provisions stipulated in the Legal Agreement. The procurement capacity of the three implementing agencies has been assessed. The overall project procurement risk was assessed as substantial with mitigation measures put in place to have a moderate residual risk.

D. Environment 59. Environmental and Social Impact Assessments (ESIAs) have been prepared for each of the sub-projects of Components A and B being rehabilitation of two trunk roads and paving of three regional airport runways and these were publicly disclosed in country and through the Bank's external website on January 26,2010. A generic Sector Environmental Assessment exists since 2006 (financed under CTCP) and is still relevant. Based on this, MoID has prepared and published Road Sector Environmental Protection Regulations, in February 2009, which are now binding for all road sector works. The ESIAs prepared for this project took these regulations and guidelines into account.

60. Prior to appraisal, Component E, emergency repairs of roads and bridges, was added to the project under application of OP8.00, which allows for streamlined ex-ante procedures. These works are exclusively to restore the prior condition of flood affected parts of roads and bridges. It will be ensured that the contract documents used for the particular works will contain appropriate environmental clauses aiming at minimizing negative environmental impacts of the works.

61. According to the ESIAs, all impacts can be mitigated through implementation of respective Environmental and Social Management Plans (ESMPs). The responsibility for

17 implementation of ESMPs lies with implementing agencies and, in turn, the Borrower. The National Environment Management Council (NEMC) has the responsibility of making sure that this happens. The Bank, on the other hand, will ensure implementation of pertinent safeguard policies through supervision missions and advise as appropriate. The main impacts identified by ESIAs are outlined below.

62. Component A: rehabilitation of paved trunk roads. The main impacts of this component include: (i) noise, vibration and air pollution from operating vehicles/equipment/machinery along the roads, borrow pits and material mixing sites during construction and (ii) increased interference with wildlife movements especially across the Kwa Kuchinja Wildlife Corridor between Lake Manyara National Park and (in the case of the Arusha - Minjingu road). However, these are not new impacts as the roads in question are existing roads. Nevertheless, ESMPs have been prepared to ensure any associated impacts can be overcome. TANROADS is responsible for implementation of ESMPs under the guidance of the Department for Environment and Safety in the MoID. Also, NEMC and the Bank will play their respective roles as described in paragraph 59 above.

63. Component B: improvement of regional airports. The main potential negative impacts of this component include: (i) impairment of air quality due to dust and noise pollution during construction; (ii) contaminatiordimpairent of quality of receiving bodies from fuels, oils, and lubricate spillages/leakages and/or damagelerosion of exposed surfaces; (iii) effects of vibrations from heavy aircrafts to nearby buildings; (iv) destruction of vegetation cover/loss of local biodiversity from vegetation clearance; (v) exploitation of borrow pitdquarries and other natural resources; and (vi) land take or demolition of properties and consequent need for relocatiordresettlement and compensation. Most of these impacts are of minimal significance and can be mitigated through proposed measures in respective ESMP which are incorporated into the works contracts.

64. Construction activities might affect potential physical culturalhistorical sites of national importance. During appraisal it was agreed with TANROADs that they will employ (with finding from the credit) an archeologist who will draw up guidelines for the application of OP4.11 (Cultural Property) in the case of road constructionhehabilitation, including typology of finds in Tanzania and actions in case of finds. Such application could eventually be extended to other sub-sectors of transport through the Division of Safety and Environment (DSE) of MoID. Meanwhile ESMP of the various work contracts include simple guidelines and actions to be taken in case of chance finds. The supervising consultant will ensure that the contractor will implement appropriate measures accordingly. The consultant/contractor will report such finds to the local authorities and to the National Museum.

E. Social

65. Component A: rehabilitation ofpaved trunk road. The social benefits of this component will include: (i) reduced vehicle operating costs and travel time due to improved road condition; (ii) improved access to project areas, which will lead to expanding trade, creation of jobs and income; and (iii) income generation to local communities during construction due to availability of temporary jobs and selling of food and services to workforce. On the negative side

18 resettlement is triggered by the road construction, there is an increased risk of Human Immunodeficiency VirudAcquired Immunodeficiency Syndrome (HIV/AIDS) transmission, and an increased risk of accidents due to excessive speed triggered by the improved road surface.

66. Road rehabilitation works are being done on existing alignments with limited widening, and in the existing right of way which is not encroached. The MoID has prepared Road Sector Compensation and Resettlement Guidelines of February 2009 which were vetted by the Bank and found in line with the requirements of OP4.12. These guidelines were disclosed in-country in February 2009 (and are now to be applied for all road works) and were disclosed at the Bank’s Info shop on February 2, 2010, in lieu of a Resettlement Policy Framework (RPF). Should any resettlement become necessary (for example for the establishment of the contractor’s camp) these guidelines would apply.

67. Potential HIV/AIDS infections may increase in the project area with the influx of people during the road construction. As part of their contract, the construction companies will establish an HIV/AIDS education and sensitization plan and implement it in collaboration with the district health officers.

68. To mitigate against the risk of increased road accidents due to higher speed road safety measures have been incorporated in the design of the roads, including: (i) appropriate road signing and signaling; (ii) speed humps preceded by rumble strips at village entries with the purpose to reduce vehicle speed to the legal limit of 50km/h in built up areas; (iii) elevated and marked pedestrian crossings within villages, preceded by rumble strips; and (iv) widening of the roads within villages to provide appropriate sidewalk space for pedestrians.

69. Component B: improvement of regional airports. Under this component the following potential positive social and economic impacts are anticipated as a result of construction of the runways: (i) stimulating investment opportunities in the area; (ii) jobs creation and thus enhancing income levels; (iii) boosting commerce and trade with neighboring areadcountries; (iv) boosting tourism; and (v) increased social and economic interactions at the airport with additional jobs created and services provided. Negative impacts include resettlements and increased risk of HIV/AIDS transmission.

70. RAPS were prepared for the three airports in July 2008 for the original designs which included extension of the runways. However, subsequently it was decided not to extend the Kigoma and Tabora airports runways but only to pave the existing ones due to funding shortage. Consequently there will be no resettlement requirement at these two airports. At the Bukoba airport it was decided to maintain the small extension of the runway by 120 meters, and therefore seven households were affected. TAA implemented the respective RAP in April 2009 and people were resettled. A review of these resettlements by the Bank’s Resettlement Specialist confirmed that this was done in conformity with OP4.12. The Bukoba RAP was disclosed in-country in April 2009 and at the Info shop on March 22,2010.

19 F. Safeguard policies triggered

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) [XI [I Natural Habitats (OPBP 4.04) [I [X 1 Pest Management (OP 4.09) [I [XI Cultural Property (OP 4.1 1) [XI [I Involuntary Resettlement (OP/BP 4.12) [XI [I Indigenous Peoples (OD 4.20, being revised as OP 4.10) [I [XI Forests (OP/BP 4.36) [I [XI Safety of Dams (OP/BP 4.37) 11 [XI Projects in Disputed Areas (OP/BP/GP 7.60)* 11 [XI Projects on International Waterways (OP/BP/GP 7.50) [XI

G. Policy Exceptions and Readiness

71. This project complies with all applicable Bank policies.

72. The engineering design and bidding documents for the works to be financed under Components A and B of this credit have been completed and procurement for works and services is on-going. Emergency works under Component E are already on-going and it is expected that a portion of these can be retroactively financed at project effectiveness.

73. There are four conditions of effectiveness (see paragraph 39). The client has made good progress towards fblfilling these conditions. Draft Subsidiary Agreements between the Recipient and TANROADS as well as TAA have already been prepared. The Project Coordinator at TANROADS is preparing the Project Implementation Plan (PIP) based on previous PIPS prepared for past projects. The three procurement specialists to be recruited by TANROADS will be sought on the local market through local advertizing. TANROADS has already submitted TOR for such specialists to IDA and these TOR have been found satisfactory. The financing of the procurement specialists will be done initially under an on-going transport sector project (CTCP-2) that has a provision for technical assistance for TANROADS.

* By supporting theproposedproject, the Bank does not intend to prejudice thefinal determination of theparties’ claims on the disputed areas 20 Annex 1: Country and Sector Background TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

A. Transport and Poverty

1. Inadequate transport infrastructure and facilities have been identified as a key inhibitor of economic and social development, with transport improvements seen as a key factor in attaining the Millennium Development Goals for poverty reduction. Effective and efficient transport infrastructures allow for greater access to distribution networks and hence access to markets and essential services such as health and education.

B. The Transport System in Tanzania. 2. Tanzania’s recent growth is a result of a decade of reforms since 1995 in all sectors of the economy, including the transport sector. Tanzania has embarked on a fundamental reform of transport sector management and governance, including the following key reforms: (i) in 1998, the creation of a second generation road fund, the Road Fund Board (RFB), an independent user- financed mechanism for road maintenance; (ii) in 2000, creation of Tanzania National Roads Agency (TANROADS), a road agency that is responsible for the management of main roads (trunk and regional roads) in the country (29,847 kilometers); (iii) 2003, creation of Surface and Marine Transport Regulatory Authority (SUMATRA), as well as the Tanzanian Civil Aviation Authority (TCAA); (iv) 2004, transformation of the Tanzania Harbor Authority to the Tanzania Port Authority (TPA) a “landlord” port organization that is responsible for all marine and inland ports; (v) 2005, merging of the former Ministry of Works and the Ministry of Communication and Transport (mainland) into the Ministry of Infrastructure Development (MoID); (vi) 2006, preparation of a Transport Sector Investment Program (TSIP) and broad agreement between GOT and DPs to move towards a sector-wide approach; and (vii) in 2007, increase of road user charges for the funding of maintenance from US$0.08 to US$O. 16 equivalent per liter of fuel.

3. Private sector involvement in the transport sector is strong with practically all works executed by private sector contractors (100 percent of maintenance works are done by local contractors) and practically all transport services are provided by private sector operators (the current exception is Corporation). Infrastructure finance through PPPs is still modest but important potentials exist. The following PPPs in the transport sector have been established or are evolving: (i) in 1998, the management of the container terminal of the DSM port was concessioned to a private operator called Tanzania International Container Terminal Services (TICTS) until 2010; in 2005 the concession was extended to 2025; in 2009 the concession was renegotiated and the exclusivity clause (pegged at 650,000 TEU) was dropped; (ii) also in 1998, the Kilimanjaro International Airport was concessioned to Kilimanjaro Airport Development Company Limited (KADCO), however in 2009 TAA took over again; (iii) the port of Kigoma at the lake of has been managed by a private operator since 1995; (iv) the agreement for the concession of the Tanzania Railway Corporation (TRC) to a private operator, Tanzania Railways Limited (TRL) was signed on September 3, 2007, and a rail asset holding company (RAHCO) was created; however in 2009 the concession failed and RITES pulled out; and (v) in October 2007 TANROADS commenced implementation of performance-based

21 management and maintenance (PMMR) contracts on about 1,000 km of important rural roads in three regions on a pilot basis.

C. Roads

4. The road network of (mainland) Tanzania extends to 86,472 kilometers. Of these 6,615 kilometers or 7.6 percent are paved. The national road network (trunk and regional roads) amounts to 29,847 kilometers and the local government roads to 56,625 kilometers (see Table Al.l below). National roads are managed by the Tanzania National Roads Agency (TANROADS) and local government roads by the 132 Local Government Authorities. Thanks to considerable and stable funding fiom the road fund the condition of the network has greatly improved over the past ten years. The condition of the national roads has improved fiom 50 percent in poor condition in 2000 to five percent in poor condition in 2009. Of the local government roads currently about 44.5 percent are in poor condition. This means that these roads are impassable during the rainy season and leaving an estimated 22 percent (or about 6.5 million people) of the rural population without all season access.

Type of road Length Of which paved Of which in poor condition (km) h % km % Trunk 10,601 5,123 48.3 . 318 3.0 Regional 19,246 702 3.6 1,154 6.0 National Roads 29,847 5,825 19.5 1,472 4.9 District 29,537 11 10,792 36.5 Feeder 21,191 11,697 55.2 Urban 5,897 779 13.2 2,710 46.0 Local Government Roads 56.625 790 1.4 25.I99 44.5

5. With only about 7.6 percent of the network paved and about 6,364 people per paved road kilometer and 133 square kilometer of land area per kilometer of paved roads Tanzania compares poorly with most of its neighbors, justifying persistent high levels of investment in the road network (see Table A1-2 below).

Table A1-2: Paved Roads per Population and Land Area in Eastern and Southern African Countries

22 D. Road Fund 6. In 1998 a second generation road fund, the RFB, was created based on a specific act, with a Board of Directors, a Secretariat, and dedicated funding. From FYOO/Ol to FY08/09 the total revenue of the RFB increased from TSh 47.3 billion (US$53 million equivalent) to TSh 255.5 billion (US$197 million equivalent), the large majority of it accrued from a fuel levy. The amounts collected are allocated as follows: 63 percent to TANROADS for maintenance, seven percent to MoID for development, and 30 percent to Prime Minister's Office-Regional Administration and Local Government (PMO-RALG), which allocates its share to the 132 LGAs based on network length, road type and maintenance needs. In the budget of FY07/08 GOT decided to increase the fuel levy two-fold from US$0.08 to US$O. 16 equivalent per liter of petrol and diesel. Table A1-3 below gives an overview of fuel prices, and fuel levy information for the past 10 years.

Table A1-3: Tanzania Road Fund

08/09 I 1,469 I 1,542 1 -0.7% I 200 I 16.9 I 13.2% I 12.0 I 246.1 I 208.0 09/10* I n/a I n/a I n/a I 200 I 16.6 I n/a 7.7 I 283.9 I 218.3 *projections **year average exchange rate used I

E. Aviation 7. Tanzania's aviation sector is a vital link to the external world, and is also, due to the thin road network, a vital source of transportation to more remote regions within the country. Total system traffic for Tanzania has been 3.3 million in 2008, with 3.1 million passengers traveling through airports operated by the Tanzania Airports Authority (TAA). The three major airports, Julius Nyerere International Airport, Kilimanjaro International Airport, and Zanzibar International Airport carried about 2.7 million of those passengers. About 66 percent of all international arrivals are tourists that must then, in many cases, travel domestically by air to reach their final destination. In addition, major components of domestic travel are business and government related.

8. Institutionally, the system consists of one main oversight and regulatory body, the Tanzania Civil Aviation Authority (TCAA), the Tanzania Airports Authority with its 59 airports,

23 and an additional regional body to assist in technical matters of oversight, the East Afiican Civil Aviation Safety and Security Oversight Agency based in Arusha. Two additional important bodies are the Revolutionary Governnient of Zanzibar, which operates the international airport in Zanzibar, and the Kilimanjaro Airport Development Company Ltd. (KADCO), a partnership formerly with private interests, that operates Kilimanjaro International Airport, another important international gateway for tourism in the North of the country. An additional estimated 309 airstrips are operated by the private sector and other government entities, both for tourist and business interests.

9. Domestic service providers are numerous, with several scheduled carriers, many charter operators, and officially non-scheduled carriers that in effect operate as scheduled carriers and provide essential connectivity within the country. The two main scheduled carriers are Air Tanzania, the government-owned that has had to go through several unsuccesshl attempts at becoming financially sustainable, and , which has partial Kenyan Airways ownership and has flourished in the services gap caused by the near collapse of Air Tanzania. An example of a carrier that has both like charter services but also acts like a scheduled carrier is Coastal Air, an airline that flies general aviation, predominantly single- turbine propeller aircraft to many destinations on a scheduled basis, such as every half hour between Zanzibar and Dar es Salaam (DSM).

10. Overall and domestic travel has been growing at a high rate, compared with worldwide averages and other countries in Afiica. Yet even as domestic travel volume has grown, routes have become more concentrated, with less destinations receiving service. While this can be caused by many factors, in at least one case, the city of Bukoba in the northwest, the shifting of services can be directly linked to infrastructure deficiencies. The runway in Bukoba is unpaved, and Precision Air stopped scheduled services to the airport since the only transport-quality aircraft capable of servicing the airport became too uneconomical to fly. According to the Afiica Infrastructure Country Diagnostic study, Tanzania has at least five unpaved runways receiving regularly scheduled services, as found in global databanks for airline schedules. This makes Tanzania the country with the highest number of unpaved runways receiving regularly scheduled services of all non post-conflict countries in Afiica.

F. Railways

11. The railway system in Tanzania has a total track length of 3,681 km, out of which 2,706 km were operated by TRC until August 2007, and are now owned by RAHCO and operated by TRL. The remaining 975 km are operated by the Tanzania-Zambia Railway Authority (TAZARA). The railway system serves mainly the East West corridors and provides links to the neighboring countries. Apart from the TAZARA system which was constructed in the 1970s,

24 most of the Tanzanian railway system was constructed at the beginning of the last century. In general, the railway system is in a decrepit state, suffering from lack of maintenance which also poses a safety hazard. Further challenges faced by the railway system are: long travel time, poor state of wagons and locomotives; and low level of capitalization. Priority should be on the rehabilitation and improvement of the existing rail system. Replacement of the existing railway with standard gauge is prohibitive in cost, and should be considered a long-term goal only.

2003 2004 2005 2006 2007 2008 2009 TRL 1443 1333 1129 775 545 505 408 TAZARA 602 58 1 625 60 1 539 527 383

G. Ports

12. Maritime is concentrated at sea ports and lake ports, operated by Tanzania Ports Authority (TPA). The total traffic handled at the three major sea ports has been increasing on average by eight percent annually, from 4.684 million tons of cargo handled in 2001 to 7.291 million tons handled in 2006 (Table A1-5). One of the major challenges facing the Tanzanian marine transport sector is the current congestion crisis at DSM port, which handles over 90 percent of all import and export volume on the mainland coast. The port’s capacity of 250,000 TEU per annum was exceeded in the 2007 fiscal year by 8.7 percent. With increased competition for transit cargo arising from the availability of alternative routes to landlocked countries, Tanzania may face declining throughput if capacity and efficiency remains laggard (almost 30 percent of total DSM port throughput is transit cargo). In fact, the balance of trans- shipment and container trade has declined over the past few years due to congestion. In order to combat this congestion crisis, TPA needs to take up its role as landlord and concession the operations of the various port activities under its responsibility to private operators.

Table A1-6: Tanzania Ports Authority Throughput 2001-2009 (000 tons) I 2001 I 2002 I 2003 I 2004 I 2005 2006 I 2007 I 2008 I 2009 1 Imports 3,684 3,809 4,242 4,958 5,067 I 5,548 5,676 5,807 6,629 Exports 907 993 1,158 1,214 1,322 1,314 1,316 1,242 1,260 Transshipment 93 169 245 375 404 428 433 354 213 & Bunkers Grand Total 4,684 4,971 5,645 6,547 6,793 7,290 7,425 7,403 8,102

H. Urban Transport and Transport Regulator

13. Urban growth in Tanzania has led to increasing congestion in urban areas. Rapidly growing motorization (though still low at about 30 vehicles per 1,000 population) combined with population growth, triggered by both in-migration and natural growth, has led to major congestion on DSM’s main roads (and also in Arusha, Mwanza and ) in recent years. International experience shows that urban congestion cannot be tackled through the expansion of the urban road network alone, but must be addressed through the provision of attractive mass transit combined with intelligent traffic management measures, as well as the creation of capacity to manage the urban transport system. Under financing from the Second Central Transport Corridor Project (CTCP-2), the implementation of phase 1 of the DSM Rapid Transit 25 system (DART) based on buses operating on separate bus ways is underway. The Surface and Marine Transport Regulator (SUMATRA), an autonomous body with a broad-based Board of Directors, plays a key role in the efforts to improve urban transport. Efforts to create urban transport authorities (commencing with DSM) which would be responsible for both urban transport regulation and urban transport infrastructure are underway.

I. Transport Sector Investment Program (TSIP)

14. As shown in Table 1 in section LA. of the main text, the original devised TSIP proved not to be realistic and actual expenditures very much below target during the first years of its implementation. For the purpose of this project, therefore, jointly with government, an adjusted short term TSIP (STSIP) was prepared essentially reflecting on-going projects or projects which are at an advanced level of preparation and where the financing is secured. Table A.l-7 below shows the detailed short term TSIP for FY10/11 - FY12/13, including financier and status for each project in the various sub-sectors of transport.

Table A1-7 TSIP for FY10/11- FY12/13 (US% million) Length Total Unit Plan Plan Plan 1 oun) I Cost I Cost I FYlOil 1 FY11/12 1 FY12/13 I Financier 1 Status I

26 15. Table A1-8 below shows the summary of the above table. Total planned expenditure over the three financial years 2010/1 1 until 2012/13 is US$3,445 million of which 74 percent for roads and the balance for the rail, airports, ports sub-sectors, as well as for institutional development and cross cutting issues. Of the overall forecasted investment expenditure GOT plans to finance about 48 percent and Development Partners 52 percent. It is still unclear if during this period there will be any substantial investment from the private sector for transport infrastructure (but investments are expected for transport services - such as the BRT busses).

27 28 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

A. World Bank Fun !d Proiects

Project Sector Issue Implementation Development Progress Objectives (DO) Second Central Support Tanzania’s economic growth by providing Satisfactory Satisfactory Transport Comdor enhanced transport facilities that are reliable and Project (IDA cost effective, in line with MKUKUTA and the I 44550--US$190m). National Transport Policy and Strategy. Closing by December 20 11 Central Transport Support the National Transport Policy by focusing Comdor Project on the improved performance of the Central (IDA 38880- Transport Comdor through (i) upgrading strategic US$122m). Closed road links, (ii) enhancing road management December 2009 capacity, and (iii) improving operations ,of Tanzanian railways Integrated Road Support Tanzania’s economic recovery program by Completed Unsatisfactory Project I restoring trunk and regional road networks that have (IDA 21490- been obstacles to the sustainability of Tanzania’s US$180.4m). economic recovery program, and develop Mow’s institutional capacity for properly managing road networks Integrated Road Support Tanzania’s economic recovery program by Completed Moderately Project I1 reducing transportation costs, improving Unsatisfactory (IDA 2598A, 25980, accessibility to economically productive areas, P7941, and P7940, strengthening overall sector administration, and totaling strengthening organizational and financing US$171.7m). Closed arrangements in the road sector December 2006. Port Modernization Support the expansion project to expand the Completed Satisfactory (IDA 20950- physical, managerial, and operational capabilities of US$37m). Closed THA to meet the traffic volume expected in the June 2000 1990s and to provide a more reliable and cost effective link with the neighboring landlocked countries Transport Support a comprehensive restructuring program for Completed Unsatisfactory Rehabilitation TRC comprising of (i) strengthen the organization Project (railway of TRC, eliminate regulatory bottlenecks to its restructuring) effective operations, and set it on a path of a (IDA 22670- commercially viable entity; and (ii) rehabilitate US$76m). Closed infi-astructural assets, replace obsolete and June 2002 uneconomic operational assets, and provide limited new investments consistent with the prospects for growth in domestic traffic Highway Project Support Tanzania’s economy by helping reduce (06) transport as a constraint through rehabilitation of the (IDA 16880- most important sections of the highway network. US$5Om). Closed The project comprises several components: (i) a June 2002 road rehabilitation program consisting of the

29 rehabilitation of several high-priority sections of the Tanzania-Zambia (TANZAM) highway, amounting to about 295 km, and 700-1000 km of primary gravel roads; (ii) a highway equipment rehabilitation program; (iii) a maintenance spares supply program for the trucking industry; (iv) technical assistance (TA) for the local contracting industry; (v) TA and consulting services for construction supervision, and agricultural feeder roads study, feasibility studies, and detailed engineering; and (vi) training

B. Other DP Funded Projects Project Action Development Status Partner Singida-Minjingu Upgrading to bituminous standard AfDB Works ongoing (US$154m) Kagoma-Lusahunga Upgrading of the road to bituminous standard AfDB Works ongoing (US$147.3m) Zanzibar 5 roads Upgrading of the road to bituminous standard AfDB Works ongoing (US$17.5m) Arus ha-Namanga Rehabilitation, paving and widening of Arusha- AfDB/JICA Works ongoing (US$62.9m) Namanga road Chalinze-Segera-Tanga Rehabilitation of the road DANIDA Works ongoing (US$32.7m) Rehabilitation of some sections of TANZAM DANIDA Works ongoing (US$98.2m) highway National roads Periodic maintenance of regional roads DANIDA Works ongoing US$12.5m) Ilule-Tinde- Upgrading of the road to bituminous standard EC Completed but (USrS50.8m) awaiting

~ -&sure Mandela Road Rehabilitation of Mandela Road EC Works ongoing (US$3 lm) STABEX (US$6.4m) Rehabilitation of regional roads in coffee- EC Completed growing regions Zanzibar Port Reconstruction of the berths at Zanzibar harbor EC Comdeted

Local Government Support of National Rural Transport Policy

Road ($US20m - tentative)

30 Tunduma- Paving of trunk roads MCC Under (US$200m ) Procurement Tanga-Horo Horo Paving of roads trunk MCC Being.~ procured (us%N~) Songea-Mbinga and Paving of trunk roads MCC Under planning Songea-Nantumbo (US$7Om) (US$6m) Rehabilitation and upgrading MCC Under planning Pemba Rural roads ImDrovements to rural roads in Zanzibar MCC Under Dlanning- (US$Sm) (Pemba) Rehabilitation of Lindi Rehabilitation of regional roads to gravel OPEC Works ongoing Regional roads standard (US$4.9m) Rehabilitation of Rehabilitation of regional roads to gravel OPEC Completed Kigoma Regional roads standard (US$2.9m) Malagarasi Bridge Detailed Engineering Design of the Malagarasi KOREAN Govt. Design in (US$65m) Bridge progress Upgrading of Ndundu - Upgrading of Ndundu - Somanga to bituminous KUWAIT Works ongoing Somanga road (US$ Standards OPEC 45m) Mikumi - Ifakara road Paving of sections of the road SDC Works ongoing (US$2m) Rombo Mkuu - Upgrading of the road to bituminous standard BADEA Works ongoing Tarakea US%12.2m)

C. GOTFunded Projects (updated from MoID Budget 09/10) I Action I Status

I UnityBridne I Construction I Works on-going Sumbawanga - Mpanda - Nyakanazi Upgrading to DBSD Contract awarded Mbeya - Makongolosi (US$2 lm) Upgrading to DBSD Works on-going Geita - Sengerema (US$3Om) Upgrading to DBSD Works on-going Manyoni - Isuna (US$27m) Upgrading to DBSD Works on-going Sengerema - Usagara (US$27.5m) Upgrading to DBSD Works on-going Kigoma - Kidahwe (US$25m) Unmading to DBSD Works on-going I Sam Nujoma road (US$lOm) I Upgrading to four lane I Works completed

31 32 Annex 3: Results Framework and Monitoring TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

Results Framework Development Objective Project Outcome Indicators Use of Project Outcome I Information The development objectives of the 1. Average vehicle operating costs project are: (i) to improve the on (a) Korogwe-Same and (b) To assess sector performance. condition of the national paved road Arusha - Minjingu roads; network; (ii) to lower transport cost 2. Roads in good and fair condition on selected roads; and (iii) to as a share of total classified roads expand the capacity of selected (Core Indicator); regional airports. 3. Passenger volume at (a) Bukoba, (b) Kigoma and (c) Tabora airports; 3. Direct and indirect beneficiaries. Intermediate Outcomes Intermediate Outcome Indicators Use of Intermediate Outcome I Monitoring Component A: Rehabilitation and A. 1 Roads rehabilitated (km)(Core preparation of design for the Indicator). To assess project performance. rehabilitation of paved trunk roads. (a) Korogwe - Same (172 km) (non- rural). (b) Arusha - Minjingu (98 km) (non-rural). A.2 Design and bidding documents for rehabilitation prepared (9 11 km). Component B: Improvement of B. 1 Kigoma runway paved regional airports. B.2 Tabora runway paved To assess project performauce B.3 Bukoba runway paved, terminal building as well as new access road and car parking constructed. Component C: Improvement of C.l National Road Safety Agency road safety management. (NRSA) established and operational To assess project performance C.2 Driver and Vehicle Examination and Licensing Agency (DVELA) established and operational C.3 Road Accident Information System (MS)established and operational. Component D: Promotion of public D. Number of transport sector PPP I private partnerships. transactions which have reached To assess project performance bidding stage. Component E: Emergency Roads E. Number of national roadhridge To assess project performance and Bridge Repairs. sections improved.

33 T l-

3 4 3 @ I

7-

'I' U E 0 22c1

8 8 34;3s g z

-L 34; Annex 4: Detailed Project Description TANZANIA: TRANSPORT SECTOR SUPPORT PROGRAM

Component A: Rehabilitation and Preparation of Designs for Rehabilitation of Paved Trunk Roads (US$186.5 million)

1. From the mid 1960s to late 1980~~the government with the assistance of the bilateral and multilateral donors embarked on a major program to upgrade emgravel roads to bituminous standards in the important transport corridors, in order to meet the transportation demand of the growing economy. These roads which constitute nearly half of the total paved road network were designed for a life of 15 to 20 years and have been deteriorating to varying degrees due to combination of inadequate maintenance, increased traffic loading and pavement aging. Some of them have already received or are undergoing major interventions like rehabilitation and upgrading to Asphalt Concrete standard under different road sector programs such as the past Bank financed Sixth Highway and the Integrated Roads Projects. 2. Under the Transport Sector Support Project (TSSP) IDA, in line with the government priority to preserve the road investment as spelt out in the Transport Sector Investment Plan, will support financing of civil works and supervision consultancy services for the rehabilitation of Korogwe - Same road (172 km) and Arusha-Minjingu road (98 km) which are ready for implementation. The International Development Association (IDA) will also finance the consultancy services for the detailed design and preparation of tender documents of about 91 1 km of key trunk roads sections which needs rehabilitation but for which such documents are not yet available.

Rehabilitatiodupgrading of the Korogwe - Same Road (172 km)

3. The Korogwe-Mkumbara-Same road forms part of the North East Corridor (T2), which is a major link between the east coast and the popular tourist destinations in the north of Tanzania. It is also the main road link between Dar es Salaam (DSM) and Nairobi, the major trading centers of Tanzania and Kenya respectively, and the road also serves as an important link between important centers of commerce and industry located in Tanga, Arusha, Moshi, and DSM.

4. The road is approximately 172 km long; the first 100 km is in Korogwe district, Tanga region, and the remaining 72 km is located in Same district, Kilimanjaro region. Tanga and Kilimanjaro regions have a combined area of approximately 40,500 sq. km (4.4 percent of Tanzania’s area) and a population of three million (8.8 percent) of the total population based on 2002 census. Key activities in this area include agriculture, mining, tourism, and ranching.

5. Korogwe - Mkumbara road section (76 km) was last rehabilitated in 1991-94. The Mkumbara - Same section (96 km) received its last periodic maintenance in 1989-91. The sections have mixed traffic and annual average daily traffic varies from 920 to 1,756 vehicles (2008 traffic census). The road is currently in a fair to poor condition; it is narrow with carriageway and shoulder width below specifications for trunk roads.

35 6. Both sections have a bituminous double-surface-dressed carriageway with varying degrees of deterioration.

7. The current condition varies from fair to poor. The carriageway is 6 meters wide with 1 meter shoulders. The pavement contains extensive surface cracking, stripping of the aggregates from the surface dressing, rutting, and occasional base failures and potholes. The Mkumbara- Same section was constructed in early 1960 and has received regular routine maintenance. No major rehabilitation and pavement strengthening has been provided since its construction. The condition of the surface has deteriorated due to increased traffic and ageing. The surface condition varies but includes problems of stripping of surface aggregates and localized potholes and rutting.

8. Proposed interventions include the following: (i) The existing road has a 6 meter wide carriageway with 1 meter shoulders, which is less than the minimum standard for trunk roads. It is therefore proposed to widen the road over its entire length by 1.5 meters to provide for a 6.5 meter wide carriageway with 1.5 meter wide shoulders. (ii) Improve drainage by replacing or extending the existing structures, depending on their structural condition and hydraulic capacity. (iii) Strengthen pavement and surfacing of both sections with a 50 millimeter layer of asphalt concrete. (iv) Improve the existing geometric alignment to increase radius of some bends and in some areas raise the road to protect it against flooding. (v) Replace the Mombo bridge deck. (vi) Widen an existing railway bridge over the Tanga railway line.

9. A summary of the economic appraisal for the road is presented in Annex 9. The evaluation was carried out at a 12 percent discount rate over the analysis period of 2009-29 and yielded a robust economic internal rate of return (EIRR) of 19 and 19.9 percent for the two sections of Korogwe - Mkumbara and Mkumbara - Same. Also the NPVs of US$19.5 million and US$27.7 million were obtained for the respective sections for the proposed 50 millimeter AC surfacing over the rehabilitated base and double bituminous surface treatment (DBST) for the shoulders.

10. Implementation of the works component will comprise two separate construction packages with the possibility of a qualified firm executing the two simultaneously under a slice- and-package arrangement. The contract duration is 30 months with an estimated works cost of US$101.4 million.

Rehabilitation of the Arusha - Minjingu Road (98 km) 11. The Arusha-Minjingu road is approximately 98 km long; the first 90 km are within and only 8 km are located in Manyara Region. Key activities in these regions include agriculture, mining, tourism and hunting. The road in particular serves as the main

36 gateway to the Northern Tourist Circuit consisting of Manyara, Ngorongoro Crater, Serengeti and Tarangire National Parks. Approximately 90 percent of tourists to Tanzania use this road.

12. The construction of the road in its present alignment was completed in 1992 with a double bituminous surface dressing (DBSD) on the 6.5 meter wide carriageway and with 1.5 meter wide shoulders each side, with about 1.00 meter with single bituminous surface dressing (SBSD). The current traffic volume varies from an average daily traffic (ADT) of more than 14,000 near the starting point in Arusha City, declining to around 2,000 between Kisongo (km 12) and Monduli junction (km 25) and 1,400 at Makuyuni (km 75) where after it drops to around 700 between Makuyuni and Minjingu.

13. Various maintenance interventions have been carried out but since 1994 it became apparent that the applied DBSD had started raveling and since then several resealing or shallow overlay have been executed but they are now becoming uneconomical due to aging of the pavement. Furthermore at various locations the alignment needs improvement to meet safety requirements.

14. The proposed project will consist of rehabilitation and upgrading to AC standard, both the carriageway and shoulders for the entire length of approximately 98 km from Arusha to Minjingu, as follows: (i) rehabilitation of 98 km by re-working and stabilizing the existing pavement, placing new crushed aggregate base and 5Omm asphalt concrete surfacing; (ii) improvement of drainage by replacing some old culverts with new larger size ones, extending some to cover the dual carriageway and excavation of a flood diversion channel; and (iii) appropriate road safety measures to slow down traffic in villages and to allow save pedestrian crossing.

15. A summary of the economic appraisal for the road is presented in Annex 9. The evaluation was carried out at a 12 percent discount rate over the analysis period of 20 years and yielded an EIRR of 14.5 percent and net present value (NPV) of US$9.5 million for the proposed 50 mm AC surfacing over the rehabilitated bases for 20 years design life.

16. Works will be carried out in a single package. The contract duration is 30 months with an estimated works cost of US$72 million. There will also be a supervision contract.

Preparation of Detailed Design and Bidding Documents for the Rehabilitation of about 911 kilometers of Paved Trunk Roads 17. The Same - Him0 (80 kilometers) road is located in the northern part of Tanzania in Kilimanjaro region and forms part of the north eastern trunk road corridor. The road is about 80 km long starting at Same town and ends at Himo Junction where it branches off towards Moshi town centre in one direction and Holili (TZKenya Border) in another direction. This road is an international route and it connects DSM and Tanga port with neighboring countries of Kenya through Namanga and Holili borders. This road was upgraded to bitumen standard in 1992 and now it is due for rehabilitation due to pavement aging.

37 18. The Mtwara - Masasi road (200 kilometers) is located in Mtwara and Lindi regions in the southern part of Tanzania. The road has a total length of about 200 km out of which 110.5 km are located in and 89.5 km are in Lindi region. This section is part of the Mtwara Development Corridor which links Mtwara port with Mbamba Bay port along Lake Nyasa. This route links Southern part of Tanzania with neighbouring countries of , Malawi and Zambia.

19. The Makambako - Songea road (295 kilometers) is located in and Ruvuma regions. The road links Songea town with the TANZAM Highway at Makambako town centre in Njombe District. The road was first paved in 1986 and because of pavement aging it is due for rehabilitation.

20. The Mafmga-Makambako-Igawa road (142 kilometers) is located in Mbeya and Iringa regions. The road is part of the TANZAM Highway which links the port of DSM with the landlocked countries Zambia and Malawi, as well as Democratic Republic of Congo (DRC) through Zambia. The TANZAM Highway links national and international tourist destinations located along the corridor. These include Mikumi National Park, Udzungwa Mountain and Ruaha National Park. Most of the road sections along the corridor were paved in mid 1970s.

21. The Lusahunga - Rusumo road (91 kilometers) is located in the south western part of region in north western part of Tanzania. The road is part of the Central Corridor road which links the landlocked neighboring countries of , , DRC and to the port of DSM.

22. Marangu - Him0 road (13 kilometers) is a trunk road in Kilimanjaro region connecting Moshi to Tarakea at the border of Tanzania with Kenya.

23. Kobero - Nyakasanza (58 kilometers) is a section of the central corridor trunk road branching off at Nyakasanza and connecting the central corridor to Burundi through the Tanzania/Burundi border at Kobero.

24. Mombo - Lushoto (32 kilometers) is an essential paved regional road branching off from the Dar es Salaam - Arusha trunk road corridor at Mombo to Lushoto within the .

Component B: Improvement of Regional Airports (US$69.2 million) 25. Under Phase 1 of the National Transport Sector Investment Program (TSIP, 2006), thirteen high priority commercial airports across the country were identified for immediate improvement. Out of these, design and bidding documents have been prepared (under CTCP financing) for the improvementhpgrade of the following seven airports: Arusha, Bukoba, Kigoma, Mafia, , Sumbawanga and Tabora. The total estimated costs for these works are US$212m, the bulk of which is for runway improvements. Out of these Bukoba, Kigoma and Tabora have been selected for joint IDNGoT financing, due to their high economic return and due to the low likelihood for them to get other financing, be it from the private sector through PPP arrangements, GOT budget or other DP. To promote PPP arrangements and private sector finance for the viable airports (Dar es Salaam, Arusha and Mwanza) it is proposed to finance the 38 services of airport transaction advisors under this component. This is pressing for DSM’s Julius Nyerere International Airport, where Terminal 2 (the main terminal) is now operating beyond its design capacity.

26. All three of the selected airports (Bukoba, Kigoma and Tabora) are currently unpaved and would receive tarmac runway surfaces through the IDNGoT financing. Table A4-1 below shows the overall structure of this component.

Bukoba 16.9 3.5 20.4 Kigoma 22.2 4.5 26.7 Tabora 15.9 3.2 19.1 Supervision 2.5 0.5 3.0 Total 57.5 11.7 69.2

Bukoba Airport

Location and Characteristics

27. Bukoba Airport is located on the edge of on Tanzania’s most northwest corner of the lake by the town of Bukoba. The runway extends to the lake’s edge, and is unpaved. During the rainy season the runway becomes soft and soggy, making it risky for some aircraft to fly into.

28. The airport has the following facilities and characteristics: (i) Single runway of murram construction, 1,280 m long x 18-3Om, with variable width (ii) A small apron, located to close to the runway itself that parked aircraft make the runway unusable (iii) a security fence in reasonable condition (iv) Terminal building and annex, with the terminal building being considered too small for predicted future usage (v) Lack of control tower (vi) Access road and car parking facilities (vii) Rescue and fire fighting facilities to Category 4 (for aircraft up to 24m in length) (viii) Lack of fuelling facilities at the airport

29. The current layout of the airport have several shortcomings: (i) The area around the runway is swamp, attracting birds, which pose a hazard to aviation safety. (ii) There are obstructions in the near vicinity that need addressing for any expansion. (iii) The terminal and apron today are too close to the runway - any runway works would require the demolishing of current structures and complete rearrangement of the terminal area.

39 30. The existing surfaces of the runway, taxiway and aprons are very poor, with deformation of the overall runway profile. On the runway, low areas result in water pooling in wet weather, there are irregular edges, and the development of rutting is seen in less structurally sound areas.

Trafic Growth 31. The past decade has seen Bukoba Airport experiencing traffic growth, despite the shortcomings outlined above. The historical passenger and aircraft movements, as shown in the table below, shows the importance of the airport.

32. Precision Air, Tanzania’s leading private scheduled air carrier, used to provide service to Bukoba Airport, but after discontinuing the use of the LET 41 0 (the only turbine aircraft with the right capacity/performance mix to fly into the airport) the route was dropped. It can be reasonably speculated that with a paved runway Precision Air would resume scheduled services to the airport.

Interventions and Estimated Costs 33. Since the apron with the associated buildings area need to be moved to properly improve the runway, it proposed to rehabilitate the entire airport. The items financed are listed in the table below. Total estimated cost is US$20.4 million of which IDA would fhd US$16.9 million and TAA US$3.5 million. The estimated time for completion of the project is 18 months.

Item us $ Preliminaries 1,999,422 Site Clearance and Earth Works 5,030,975 Drainage 716,906 Works to Existing Runway 4,239,414 Runway Extension 477,680 New Taxiway and Apron 1,253,911 Environmental 204.912 Perimeter Security Fencing 135,459 Access Roads and Car Parks 279,541 Buildings - Terminal 2,246,594 Sub-Station 600,881 Sewage Treatment Package 33 5,24 1 Day works (all provisional) 1 95,414 Subtotal 17,716,350 Contingencies 2,657,452 Total Bukoba Airport 20,373,802

40 Kigoma Airport

Location and Characteristics 34. Kigoma Airport lies on the edge of close to the northwest border to Burundi. The airport serves as an important gateway for relief flights by the United Nations (U.N.) into the Democratic Republic of Congo (DRC). Consequently the airport must accommodate large cargo aircraft bringing relief efforts into the DRC. In addition, the town of Kigoma is 15 km south of Gombe Stream National park, a renowned reserve for Chimpanzees and other primates. The airport has also seen an increase in domestic travel, and is perhaps the most important if not only air transport access point to the long shores of Lake Tanganyika.

35. The airport has the following facilities and characteristics: Two runways of M&am construction, the longer of which has bituminous surfaces at each touch-down area Two taxiway links Aircraft parking apron Small Terminal building Control tower building and offices Fuel farm (two facilities - one commercial and one for the U.N.) RFF facilities Meteorological Authority compound and MET Stations U.N. Compound Access road and car parking facilities

36. The airport is a relatively large installation with two unpaved runways. The existing main runway is 1,767 m long x 30 m wide and has a predominantly murram surface with a deteriorated paved bitumen surface of 280 m in length at Threshold 16 and 350 m in length at Threshold 34. All surface conditions could be described as marginal at best. Arriving and departing aircraft on the main runway have a rough transition from the paved areas to the murram surfaces, the latter of which are subject again to marginal performance under wet conditions, common in the rainy season As with Bukoba, the conditions are so poor they cause deformation of the runway profiles, show areas of pooling water in rain, exhibit irregular edges, and show the development of rutting in less structurally sound areas. The taxiways and apron are in a similar condition.

Trafic Growth 37. Kigoma Airport has seen fairly steady traffic growth, as shown in the table below. The cargo figures reflect UN relief efforts, as Kigoma is an entryway into the Democratic Republic of Congo.

Table A4-4: Traffic Growth at Kigoma AirDort 1999 - 2008

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Passengers 7,169 16,007 14,389 13,398 16,789 21,191 25,229 25,994 27,751 28,859 Cargo (kg) 12,090 51,367 12,324 39,311 1,739,751 4,258,988 4,068,453 3,480,806 3,309,878 2,337,153 Movements 1,525 1,638 1,948 1,382 2,192 2,596 2,690 2,444 2,614 3,123

41 Interventions and Estimated Costs

38. The items financed consist of resurfacing the main runway, and are itemized below. Total estimated cost is US$26.7 million of which IDA would fimd US$22.2 million and TAA US$4.5 million. The estimated time for completion of the project is 18 months.

~ ~~ ~~ ~ Preliminaries 3,026,605 Site Clearance and Earth Works 5,023,583 Drainage 1,687,961 Works to Existing Runway 13,140,428 Environmental 184,790 Dayworks (all provisional) 140,608 Subtotal 23,203,975 Contingencies 3,480,596 Total Kigoma Airport 26,6a4,m

Tabora Airport

Location and Characteristics

39. Tabora Airport is located about 8 km from the town center of Tabora. The is central, about 280 km south of Lake Victoria, 360 km distance from Mwanza, and about 1,080 km from DSM. The region's output is mostly agricultural, however, it does export tobacco, and the airport is a gateway for foreign tobacco purchasers. Road access to Tabora is poor, and the only effective way of arriving in Tabora is either by Tanzania's aged railway system, or by air.

40. The airport has the following facilities and characteristics: (i) Two predominantly murram surfaced runways with a concrete surface area located at the intersection of the two runways. The main runway is 1786m long x 45m wide. The second runway is 1555m long x 30m wide. (ii) The secondary runway is also used as a taxiway to the apron area. (iii) Short taxiway link between apron and secondary runway (iv) The apron consists of poor quality gravel/tarmac material surface. (v) Limited (almost none) airport security fencing. (vi) Terminal building with outlying offices (vii) Control Tower building (viii) Access road and car parking facilities (ix) Fuel Farm (x) RFF facilities to Category 4 (xi) A decommissioned aircraft maintenance hangar

41. The main runway, which intersects with the secondary runway, is of murram construction. However, a portion of the center of the runway has at some point been surfaced with concrete. Arrivals and departures on both runways, which require aircraft to roll over the

42 transition from murram to concrete, are very hard on equipment. As with Bukoba and Kigoma, the conditions of the murram runway surfaces are so poor they cause deformation of the runway profiles, show areas of pooling water in rain, exhibit irregular edges, and show the development of rutting in less structurally sound areas.

Trafic Growth

42. Tabora airport has shown strong growth. Over nine years (1999 through 2008) passenger figures have more than tripled. Tabora also serves as an important gateway to commercial tobacco farming, as bulk buyers use air transport to arrive in Tabora for their transactions.

Table A4-6: Traffic Growth at Tabora Airport 1999 - 2008

Interventions and Estimated Cost

43. The items financed consist of resurfacing the main runway, and are itemized below. Total estimated cost is about US$l9.1 million of which IDA would finance US$15.8 million and TAA US$3.2 million. The estimated time for completion of the project is 18 months.

Table A4-7: Tabora AirDort ProDosed Interventions and Cost I Item I us fi I Preliminaries 2,773,813 Site Clearance and Earth Works 3,13 1,152 Drainage 2,108,707 Works to Existing Runway 8,303,809 Environmental 184,790 Dayworks (all provisional) 140,608 Subtotal 16,642,880 Contingencies 2,496,432 Total Tabora Airport 19,139,312 Component C: Enhancement of Road Safety (US$6 million)

44. The road safety situation in the country is dire with 2,905 road accident deaths and 17,861 injuries in 2008 and an average annual increase of six percent since 2000. A National Road Safety Policy (NRSP) has been approved in February 2009. NRSP proposes to create a National Road Safety Agency (NRSA) and a Driver and Vehicle Examination and Licensing Agency (DVELA). TSSP is proposing to assist GOT to put in place NRSA and DVELA and by providing start up assistance for these agencies, as well as to put in place a Road Accident Information System (MIS).

43 45. MoID intends to create NRSA in 2010 by executive order, under the Executive Agencies Act. MoID will also appoint consultants to prepare a Road Safety Bill which will amongst other things repeal the section of the Road Traffic Act providing for the National Road Safety Council and will create instead NRSA, as well as the transfer of vehicle registration and vehicle inspection and driving tests from the Ministry of Finance and the Police to DVELA, which will also be an executive agency under MoID. DVELA is planned to be in place by 201 1/12. The Road Accident Information System

46. Following is the planned allocation of the available IDA funding: (i) road safety equipment, furniture, and office equipment for DSE, NRSA and DVELA US$1.5 million; (ii) an estimated US$l .O million for the establishment of MIS; (iii) TA for DSE, NRSA and DVELA US$1.5 million; (iv) training for DSE, NRSA and DVELA US$l.O million; and (v) initial operating cost for NRSA and DVELA of US$l .O million. Component D: Promotion of Public Private Partnerships (PPP) (US$5 million)

47. PPPs in the transport sector in Tanzania are still few and experience with them is mixed (i) in 1998, the management of the container terminal of the DSM port was concessioned to a private operator called Tanzania International Container Terminal Services (TICTS); (ii) also in 1998, the Kilimanjaro International Airport was concessioned to Kilimanjaro Airport Development Company Limited (KADCO) - however in 2009 the TAA purchased the shares of the previous owners of KADCO; (iii) the port of Kigoma at the lake of Tanganyika has been managed by a private operator since 1995; (iv) the agreement for the concession of the Tanzania Railway Corporation (TRC) to a private operator, Tanzania Railways Limited (TRL) was signed on September 3, 2007, and a reli asset holding company (RAHCO) was created - however in March 2010 RITES pulled out of the agreement and GOT took over; and (v) in October 2007 TANROADS commenced implementation of performance-based management and maintenance (PMMR) contracts on about 1,000 km of important rural roads in three regions on a pilot basis.

48. The following are potential PPPs in the transport sector for support under this component: (i) TAA intends to concession the management of viable airports (such as the DSM, Kilimanjaro, and Mwanza international airports) to a single or various private operators; it is intended to finance a Civil Aviation. Master Plan, with a related DSM Airport Master Plan subcomponent, as well as related feasibility component for PPPs and if found feasible, transaction advisors; (ii) the establishment of a container freight station outside DSM that would be connected to the port with a dedicated railway; a pre-feasibility on such proposal is currently being conducted with PPIAF finance; if found feasible component D would be used to finance transaction advisors; (iii) PMO-RALG intends to prepare design and build contracts for the construction of high priority missing bridges on the network of rural local government roads; (iv) assistance to RAHCO to prepare a bankable central rail upgrading program including PPP options; (v) other potential PPPs in the transport sector, such as: (a) highly trafficked roads and bridges such as the Kigamboni bridge and planned expressways in DSM; (b) the construction and operation of new berths in the port of DSM; (c) the management and operation of the various secondary maritime ports and lake ports; etc.

44 49. The implementation of this component will be overseen by MoID, while actual contracts for feasibility studies and transaction advice would be procured and signed by the concerned entities (TANROADS, TAA, and TPA). This component would include: (i) a Civil Aviation Master Plan and related DSM Airport Master Plan with PPP feasibility assessments for airports under the TAA (US$0.7 million); (ii) Kisarawe Freight Centre feasibility study and transaction advice (US$0.8m); (iii) a study for the removal of bottleneck on local government roads using a design and build approach (US$0.5 million); (iv) assistance to RAHCO to prepare a bankable central rail project (US$0.5 million); (v) other feasibility studies and transaction advisors for viable projects (US$1.7 million); (iv) TA for the Division of Policy and Planning (DPP) of MoID (US$0.3 million); and (v) training related to PPP for staff of MoID, TANROADS, TAA, TPA, and other relevant transport sector agencies (US$0.5 million).

Component E: Emergency Road and Bridge Repair (US$15 million)

50. Heavy rains hit large part of Tanzania during the month of December 2009 and January 20 10 causing floods in several regions and severely damaging roads and railways infrastructures. Regions mostly hit included , , Kilimanjaro and other fourteen regions and the railway services of the TRL railway had to be suspended because of damages to the railway infrastructure between Kilosa in Morogoro and Mpwapwa in Dodoma regions. The suspension of railway services between Dodoma and Dar es Salaam has also attracted more heavy freight to the paved roads between the cities thereby inflicting further damage. This component was added to this project under preparation based on OP 8.00 (Rapid Response to Crises and Emergencies) to support the efforts by the government to respond to the emergency after receiving their request to that effect in February 201 0.

51. Under this component washed away and severely damaged sections of both trunk and regional roads will be repaired in 19 out of 2 1 regions. The roads are located in Arusha, Dodoma, Iringa, Kagera, Kigoma, Kilimanjaro, Lindi, Manyara, Mara, Mbeya, Morogoro, Mtwara, Mwanza, Rukwa, Ruvuma, Shinyanga, Singida, Tabora and Tanga regions.

52. Damages to be rectified under the project will include replacement of culverts, spot improvement of washed-out gravel roads sections, repair and reconstruction of small bridges and culverts and spot improvement (potholes patching and resealing) of damaged paved roads sections.

53. The economic and financial analysis for the proposed works was not conducted because of the urgent nature of works. The works will be done on national roads which were in good to fair condition before the abnormal rains that has caused the road condition on the selected sections to be in poor and/or impassable. The proposed repairs will restore the original fair to good condition to enable the roads contribute to the economy therefore the economic rate of return of the proposed investments is assumed to be high.

54. The works will be implemented using emergency procedures and the implementing agency will be TANROADS through its regional offices. The TANROADS Regional Manager’s office, under the overall guidance of TANROADS headquarters, will procure the contractor for the works and supervise the implementation with its own engineering staff.

45 Annex 5: Project Costs (US$ million, including contingencies) TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

A.6 Office equipment for TANROADS 0.5 0.5 A*7 Training for TANROADS and TAA 1.3 1.3 A*8 I Additional operating cost for TANROADS 0.5 0.5

B. improvement ofr@end &port8 69.2 94 11.7 20.4 16.9 3.5 B. 1 Works at Bukoba Airport 26.7 22.2 4.5 B.2 Works at Kigoma Airport 19.1 15.9 3.2 B.3 Works at Tabora Airport

D.3 Study for the removal of bottlenecks on local government roads with PPP 0.5 0.5 D.4 Assistance to RAHCO to develop bankable central rail upgrading program 0.5 0.5 D.5 Other feasibility studies and transaction advise 1.7 1.7 D.6 TA for DPP of MoID 0.3 0.3

46 Annex 6: Implementation Arrangements TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

A. Responsibility for Overall Project Implementation

1. It is proposed to proceed with the arrangements as already used for the implementation of the past and on-going transport sector projects in Tanzania which have established the Tanzania National Roads Agency (TANROADS) as the main project implementing entity with overall fiduciary responsibility for project execution, while the other implementing entities are responsible for the implementation of their respective components. Hence TANROADS will implement component A and E, TAA component B and MoID component C. For Component D, MoID will oversee its implementation, while actual PPP related services contracts will be procured by the respective agencies and authorities (TANROADS, TAA and TPA). MoID will also coordinate with the proposed PPP unit at MoFEA.

2. The responsibilities of TANROADS will include: (i) the management of the designated account (DA); (ii) financial management and reporting of the overall project; (iii) ensuring the execution of the audit of the project; (iv) preparation of quarterly financial and bi-annual progress reports (with inputs from TAA and MoID); and (v) oversight of the procurement and contract management activities of the other executing agencies.

3. Project implementation arrangements are fully mainstreamed within the existing organizational structures of TANROADS, TAA and MoID as shown in figures A6.1, A6.2 and A6.3 below. However, Project Coordinators have been nominated by each implementing agency, who will take primary responsibility for the timely implementation of the component(s) under their responsibility. Prior to effectiveness the client will prepare a Project Implementation Plan (PIP) within which the detailed implementation arrangements are described. Such PIP will contain detailed arrangements and procedures for: (i) institutional coordination and day-to-day execution of the project; (ii) budgeting, disbursement and financial management; (iii) the procurement plan; (iv) environmental and social safeguard guidelines; (v) monitoring, evaluation, reporting and communication including, in respect of environmental and social safeguard matters as well as in respect of key performance indicators; and (vi) such other administrative, financial, technical and organizational arrangements and procedures as shall be required for the project.

B. Implementation Arrangements for Components A and E: Rehabilitation and Preparation of Designs for Rehabilitation of Paved Trunk Roads and Emergency Road and Bridge Repair

4. Components A and E will be implemented by TANROADS. The Directorate of Planning includes the projects in its multi-annual programs. For component A, the Directorate of Procurement thereafter procures the related works and services based on the project’s procurement.plan. It will also adjust the procurement plan whenever required. For component E, the Directorate of Procurement will have overall responsibility but delegate its functions to the regional manager’s offices (RMOs) for all procurement under component E. Once procured the responsibility for the implementation of the contracts under component A is handed over to the

47 Multi-lateral Department of the Directorate of Projects which implements the contracts, except for design studies which will be implemented by the Directorate of Planning. All contracts under component E are to be implemented by the RMOs. The Finance Department of the Directorate of Management Services manages the project accounts. The Project Coordinator ensures timely implementation of the (TANROADS) components and ensures, jointly with the Project Coordinators of TAA and MOD, the timely preparation and submission of the Bi-annual Progress Reports (BPR) and the IFRs.

C. Implementation Arrangements for Component B: Improvement of Regional Airports

5. Component B will be implemented by the Engineering and Technical Services Department of TAA headed by a Director through the nominated Project Coordinator who reports directly to the head of department. The procurement of Contractors and Consultant shall be done jointly by Department of Engineering and Technical Services; and Procurement Management Unit (PMU) of TAA. This Unit is headed by the Head Procurement Unit (HPMU) who reports to TAA Director General. For each of the three airports, the respective Airport Managers will assist the Project Coordinator to ensure smooth coordination with local authorities and other important stakeholders in the respective regions. The Project Coordinator of TAA will liaise with the Project Coordinator of TANROADS to ensure the timely preparation of project reports.

D. Implementation Arrangements for Component C: Improvement of Road Safety Management

6. Component C will be implemented by the MoID, Division of Safety and Environment (DSE). DSE will prepare the respective terms of reference and procurement documents and will channel these through the Procurement Management Unit of MoID for the procurement process. DSE has nominated a Project Coordinator who will be responsible for the day-to-day implementation of Component C and who will liaise with the Project Coordinator TANROADS for the preparation of project reports.

E. Implementation Arrangements for Component D: Promotion of Public Private Partnerships

7. Component D will be implemented by MoID, Division of Policy and Planning (DPP). DPP has nominated a Project Coordinator responsible for the day-to-day implementation of Component D. DPP will hold a dialogue with the agenciedauthorities in the transport sector that have the potential for PPPs (TANROADS, TU,TPA, RAHCO, PMO-RALG) and will jointly with these agencies promote studies and support for PPP. Actual sub-sector feasibility studies and, if feasible, transaction advisors would be procured and employed by the respective entities under guidance of DPP. For that purpose it is planned that DPP would employ a PPP advisor to assist them to implement component D and to provide training to staff involved in the development of PPPs.

48 I I, I I I I I I I ,I

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ee k% a 4 4 0k $H Ccl 0 i 0 i

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LEGAL SERVICES &

INTERNAL AUDIT

RESCUE & FIRE SERVICES UNIT

FINANCE & RESOURCES DEVELOPMENT & DEPARTMENT ADMIN. DEW

PLANNING. AIRPORTS I OPERATIONS & OPERATIONS HUMAN PLANNING AND DESIGNING & SECURITY __ FACILITATION RESOURCES STATISTICS EVALUATION DIVISION TRAINING & DIVISION DIVISION DEVELOPMENT TECHNICAL SERVICES i DIVISION COMMERCIAL & N DIVISION n DIVISION SAFETY & MAINTENANCE SECURITY DIVISION HI HUMAN INFORMATION AIRPORT AIRPORT RESOURCES FINANCE TECHNOLOGY EtZR MANAGER MANAGER FIGHTING MANAGEMENT MANAGEMENT DIVISION SERVICES DIVISION DIVISION 1-1 1-1 DIVISION FINANCE 1 MANAGEMENT RESOURCES AND ADMIN. DIVISION

COMMERCIAL &

50 Figure A6-3 - Organization Chart of MoID

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II

II I -I =? I

51 Annex 7: Financial Management and Disbursement Arrangements TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

Country Issues

1. The FM assessment drew on the 2008 Tanzania Public Expenditure and Financial Accountability Review (PEFAR) which highlights that Tanzania is still one of the top performers in PFM in sub-Saharan Africa but progress has been slow in recent years with several outstanding challenges. However, government has implemented measures to reduce fiduciary risks, including: the approval and application of new public finance, audit, and procurement acts; the full rollout of IFMS; recruitment of qualified accountants and internal and external auditors; strengthening of the National Audit Office (NAO); and reform of the public procurement system. Due to the above measures, both the quality and timeliness of financial reporting have improved and there is more accurate and timely information available regarding financial flows. All ministries are now submitting their annual financial statements within the statutory period.

2. Despite these achievements, fiduciary risks in the areas of internal controls, oversight functions, and procurement remain weak. Nevertheless, appropriate risk mitigation measures were identified and incorporated in the project design. These include: (a) adequate FM supervision during project supervision; (b) strengthened internal audit and audit committees; (c) annual fiduciary assessments through PEFARs; and (d) adequate supervision and quality assurance of the project by the oversight agencies. Programs such as the Public Financial Management Reform Program and Local Government Reform Program are being used by government to fund these mitigation measures at central and local government levels.

3. On public procurement reform, after the enactment of the 2004 Act that is largely consistent with Bank’s procurement guidelines and the establishment of the Public Procurement Regulatory Authority (PPRA) in 2005, the government took further steps by establishing complaint mechanisms including Public Procurement Appeals Authority (PPAA), and established a Procurement Policy Unit within the MoFEA.

4. There are ongoing efforts to strengthen NAO by way of independence and capacity building through a newly enacted Public Audit Act approved in June 2008. All these efforts aim at enabling the NAO to use modernized audit techniques and to focus more on value for money audit. In addition, new audit manuals and procedures have been developed and Value for Money audits are now conducted. Starting from 2006/07 the NAO is now responsible for producing three separate audit reports for (a) ministries, departments, agencies and regional administration, (b) local government and (c) public organizations including parastatal. As a result of these enhancements, in the last four years (FY 05,06,07 and 08) NAO was able to submit the GOTaudit reports within the statutory period.

Risk Assessment and Mitigation

5. The objectives of the project’s financial management system are:

52 (i) to ensure that funds are used only for their intended purposes in an efficient and economical way; (ii) to ensure that funds are properly managed and flow smoothly, adequately, regularly and predictably in order to meet the objectives of the project; (iii) to enable the preparation of accurate and timely financial reports; (iv) to enable project management to monitor the efficient implementation of the project; and (v) to safeguard the project assets and resources.

6. Furthermore, the following are necessary features of a strong financial management system: an adequate number and mix of skilled and experienced staff; a sound financial management and procurem-ent system maintained throughout the life of a project an internal control system that ensures the conduct of an orderly and efficient payment and procurement process, proper recording and safeguarding of assets and resources; an accounting system that supports a project’s requests for funding and meet its reporting obligations to fund providers including GOT,IDA, other donors, and local communities; a system capable of providing financial data to measure performance when linked to the output of the project; and an independent, qualified auditor appointed to audit the project’s financial statements

7. The table below identifies the key risks that the project management may face in achieving these objectives and provides a basis for determining how management should address these risks.

53 Residual Type of Description of risk Risk Risk Mitigating Measures Risk Risk Rating ent in wh h ro’ect is situated Country Weak capacity in public accounting The Bank will continue to assist in I Level systems,weak internal and external improving Tanzania PFM system auditing capacity. particularly in the area of budget M S formulation.Annua1 accounts are now complikt with Intenational Public Sector Accounting Standards (IPSAS).Progress has also been made in the quality and timeliness of external audit

Measures will be taken to facilitate the establishment of a secretariat institute for internal auditors; about 103 members of NAO have been recently trained in IPSAS.

Entity Level The annual work program will have A comprehensive timetable will be to be approved by Ministry working prepared and circulated to all relevant group; there may be a risk that the M authorities early so that the Annual L kual Work -Plan will not be Work Plan will be approved on time. approved on time.

Project The Project accounting function is It has been proposed that the same team Level staffed by only four people. The working on the CTCP I1 will implement M ideal headcount is seven. There may this new project as well. These Project be delays in accounting and financial fiduciary staffs are adequately qualified reporting. Also there could be exit of and experienced, and will be maintained exDerienced staff from TANROADS throughout the life of the project. on various grounds fiom time to An additional three staff will be time. recruited. TANROADS has successfully implemented CTCP I and CTCP I1 and has the capacity to handle this project. Overall M In herent Risk

economically and efficiently fo; intended purpose) - Budgeting The budgeting process at I TANROADS has a dedicated TANROADS is fairly complex. Directorate of Planning. The Bank team Inputs are required fiom both M and project staff will work closely to L Regional offices, Departments and establish comprehensive project cost from the MoID itself. This could tables, detailed work projects, and result in delays in the preparation of quarterly budgeting for the first 12 the budget. months of the project. The budget will provide funding for additional training for project staff in

54 preparing budgets consistent with disbursement plans. Training will be provided to the fiduciary staff in financial planning and budget preparation by the Bank team. Regular review /monitoring of project budget performance including timely release of project funds will be part of the quarterly IF& to be reviewed by the WB and Project Implementation Team. Accounting Staff in the accounting department M Four accounts staff at the Head Office I L need to be increased in order to be have been assigned to handle project adequate for the project accounts. It was noted that there was a headcount shortfall and an additional two staff members will be recruited to help with accounting and financial reporting during project implementation.

Moreover, the project staff will be trained continaously during the life of the project An additional two (2) staff will be recruited. Internal The internal audit departments may M TANROADS has a Directorate of L Control not review the activities of the Internal Audit headed by an experienced project. In some cases, there may be Director of Internal Audit. A five man lack of clear follow up on internal (of which two members axe external) control weaknesses. audit committee is in place. There will be adequate World Bank financial management supervision during the project implementation; strengthened internal audit and audit committees; annual fiduciary assessments through Public Expenditure Financial Assessment Reviews. Staffing of the Internal Audit Directorate comprise of 10 of which all are degree holders. However three members also hold the CPA qualification. The Internal Auditor will include the project in their audit plan and their work will be monitored and reviewed by TANROADS’ Audit Committee as part of implementation support to ensure internal control systems are functioning adequately and that issues raised in the internal and external auditor’s reports are properly addressed by Management. I Funds Flow Disbursement of IDA funds has been S The arrangements for the flow of funds I M slow. In particular, Bank-financed as detailed in the PAD are acceptable to projects have experienced low the Bank. A designated account will be disbursement rates compared to the opened at the . sub-region. The report based disbursement method

55 six months funding to be made available in the Designated Account. Use of direct payments will be encouraged in order to enhance disbursements. Training of staff processing disbursements is also being done e.g. the recent training jointly done with the Loans, FM and Procurement Departments of the Bank. Financial The Software used by TANROADS M The IFR guidelines will be used by the L Reporting may not be configured to produce project management team over the life interim fmancial reports for projects of the project. Training will be provided and this may lead to delays in the to financial, accounting and M&E staff. submission of unaudited interim The format, content, and periodicity of financial reports (IFRs) IFR has been agreed with the Bank

Auditing There may be delays in submission M Under the Public Finance Act- the NAO L of the annual external audit reports will be appointed the external auditors. In the recent past, the NAO has submitted its audit reports on schedule. TANROADS has agreed the Audit TOR with the Bank. A review of the latest internal audit report (July 2008) and external audit report (June 2009) did not indicate any significant financial management issues OVERALL M RISK S Risk ratings: H = High, S = Substantial, M = Moderate, and L = Low

8. Given the mitigation measures in place, residual risk will reduce to moderate in order to ensure the Financial Management arrangements are acceptable to the Bank. Strengths and Weaknesses of the Project Management Unit

9. The project financial management is strengthened by the following salient features: (i) TANROADS has the capacity to prepare the project’s budget. (ii) The finance unit in TANROADS has qualified and experienced accountants to account for the project’s funds comprising 33 staff of which three are CPA holders. (iii) TANROADS has a well manned and experienced Internal Audit Directorate, comprising of 10 staff of which three are CPA holders.

10. The project financial management is weakened by the following salient features: (i) The Projects unit within the Finance function is manned by only four staff members. This unit is understaffed and the ideal staff complement is seven staff members. (ii) The TANROADS computerized system, Epicor, cannot be fully used for projects. The interim financial reports (IFRs) will need to be prepared in a specially designed excel spread sheet.

56 Institutional and Implementation Arrangements

11. TANROADS, MoID and TAA will be the implementing agencies of the project and will manage the procurement of contracts under their respective components. However, TANROADS will constitute the operational link to the IDA and Government of Tanzania on matters related to the implementation, accounting and reporting for the project.

12. TANROADS will be responsible for the overall implementation of the project. During project execution TANROADS shall coordinate project implementation and manage: (i) project reporting; and (ii) Financial management and record keeping, accounts and disbursements.

Budgeting Arrangements

13. The overall project budget and a disbursement schedule will be included in the TANROADS, TAA and MoID’s annual budget. The Annual Work Plans and Budgets will be prepared and approved based on the policy guidelines as per the Public Finance Regulations of 2001 and the Strategy of Planning and Budgetary Manual issued by the Ministry of Finance in 2005.

14. Preparation of the Annual Work Plans and Budgets will be participatory, and will follow TANROADS’, TAA and MoID budgetary process. Budgets will need to be approved before the new financial year begins ‘and monitored during project implementation using unaudited interim financial reports. TANROADS is staffed with competent persons to proceed with the reviewand consolidation of the annual work program. Budget will be prepared using EPICOR.

Accounting Arrangements

15. Books of Accounts and List of Accounting Codes: TANROADS will maintain similar books of accounts to those for other IDA funded projects. The books of accounts to be maintained specifically for the project should thus be set up and should include: a Cash Book, ledgers, journal vouchers, fixed asset register and a contracts register. A list of accounts codes (Chart of Accounts) for the project should be drawn up. This should match with the classification of expenditures and sources and application of hnds indicated in the Financing Agreement. The Chart of accounts should be developed in a way that allows project costs to be directly related to specific work activities and outputs of the project. It has been agreed that all records and vouchers will be kept for a minimum of five years.

16. Staffing Arrangements: TANROADS has appointed a Project Coordinator. The Director - Directorate of Management Services will oversee the Projects finances and will be supported by a Project Accountant.

57 17. All the project accounting staff shall be trained on the more recent World Bank Financial Management and Disbursement Guidelines. This will be arranged in consultation with the Country Financial Management Specialist.

18. The key staff members in the TANROADS accounting section that will be responsible for the accountability of the project funds are experienced and qualified with either the CPA or MBA qualification.

19. Information Systems: The books of accounts will be maintained on the government?s IFMS computerized accounting system Sohare namely Epicor. The program accounting arrangements shall comply with IDA Financing Agreement and government financial laws and regulations and specifically, in accordance with Public Finance Regulations of July 2005. However, the IFRs will be produced from specially designed excel spreadsheets since Epicor is not yet customized to prepare IFRs.

Internal Controls and Internal Auditing

20. Internal Controls and Financial Management Manual: Internal control systems of TANROADS indicated satisfactory levels of segregation of duties and controls. The government?s regular financial rules and procedure stated in Public Financial Act 2001 article six that apply to TANROADS operations will be used in this project. This includes regular post audits by the Internal Audit Directorate of the TANROADS on regular basis. The internal control environment revolves around the internal audit function which reviews day to day operations of TANROADS and donor funds including adequacy and effectiveness of the internal controls. TANROADS? Audit Committee will provide an oversight role over financial matters affecting the project. Its major role will include following up on implementation of internal and external audit queries.

21. TANROADS has a Financial Accounting Procedural Manual that describe the accounting system: funds flow processes; the accounting records, supporting documents, computer files and specific accounts in the financial statements involved in the processing of transactions; the list of accounting codes used to group transactions (chart of accounts); the accounting processes from the initiation of a transaction to its inclusion in the financial statements; authorization procedures for transactions; the financial reporting process used to prepare the financial statements and interim financial reports, including significant accounting estimates and disclosures; financial and accounting policies for the Project; budgeting procedures; financial forecasting procedures; procedures undertaken for the replenishment of the Designated Account (DA); and auditing arrangements.

22. Internal Audit: The Directorate is independent and is headed by the Director- Internal Audit who reports directly to the Audit Committee and the Chief Executive Officer. The Directorate has an audit strategy and plan. They are currently working on the implementation of a risk based approach. The Audit Committee is in place and functioning, they review the internal audit report, internal control issues and also follow up external audit report recommendations. The Audit Committee has five members of which two are external members. The Internal Auditor?s

58 work related to the TANROADS will be monitored and reviewed by TANROADS’ Audit Committee as part of implementation support to ensure internal control systems are functioning adequately and that issues raised in the internal auditor’s report are addressed by Management. The Internal Audit Directorate comprised of 10 staff who are all accounting degree holders of which three are also CPA holders. The Directorate issues out reports on a quarterly basis that is based on their review of the internal control system of the TANROADS and the management at the TANROADS takes action on the report.

Funds Flow Arrangements

23. Bank Accounts: The following bank accounts will be maintained in Bank of Tanzania for the purposes of implementing the project:

(i) Designated Account (DA): Denominated in US dollars, disbursements from the IDA Credit will be deposited in this account. (ii) The TANROADS will also open an account which will receive Government of Tanzania counterpart contribution.

24. The signatories for all these accounts will be documented in the Financial Procedural Manual.

25. Flow of Funds: Upon effectiveness, TANROADS will prepare six months cash flow forecast for the project based on an approved work plan and budget and thereafter submit the Withdrawal Application to the Bank. The Bank (IDA) will process the withdrawal application and deposit an advance in the project’s DA. Subsequent withdrawal applications will be made six monthly following approval of progress and accountability reports, work plans and budgets. Funds from the DAs can be utilized to pay project expenditure if denominated in foreign currency.

26. It is expected that TSSP will use a disbursement mechanism in which six-monthly advance or replanishment of the credit would be disbursed based on project cash flow forecast. After the initial advance is made, the World Bank will need to receive IFRs with respective justification of how the funds have been spent before approving subsequent disbursement (replenishment). The IFRs will show the accountability of funds utilized during the period, it will be submitted to the Bank within 45 days after the end of the quarter.

27. The continuous use of this disbursement mechanism will depend on having a satisfactory low or moderate risk financial management system assessed throughout the life of the project.

59 Figure A7-2: TSSP Fund Flow Chart

IDA Direct Payments on behalf of TANROADS

r . Designated Account Project GOT (USD) with the BOT Operations (Counter- I Account (TShs) part funds) in TShs I- I- c / Transactions paid in either foreign currency or I Tanzania Shillings (TShs) t

Table A7-3: Allocation of Credit Proceeds

Category Amount of the credit Percentage of allocate (in US$ million) expenditures to be financed (inclusive of taxes)

(1) Works, consultants services, goods, training and 186.5 100% operational costs under component A of the project.

(2) Works and consultants services under 57.5 83% component B of the project.

(3) Goods, consultant services, training and 11.0 100% operating costs under component C and D of the project

(4) Works under component E of the project 15.0 100%

Total 270.0

60 Disbursement Arrangements

28. TANROADS has established a financial management and accounting systems, which will facilitate report based disbursement-i.e., six-month cash flow forecasts based on work plans and the project budget will be prepared to withdraw funds every six months, while submitting an unaudited IFR within 45 days after the end of each calendar year quarter. In compliance with the report based guidelines, we will expect the project to: (i) achieve and sustain satisfactory financial management rating during project supervision; (ii) submit IFRs consistent with the agreed form and content within 45 days after every calendar quarter, and (iii) submit a project audit report by the due date. Other methods of disbursement include the use of direct payments to suppliers and special commitments. Details will be spelt out in the Disbursement Letter.

29. If ineligible expenditures are found to have been made from the DAYthe Borrower will be obligated to refund the same. If the DA remains inactive for more than six months, the Borrower may be requested to refund to IDA amounts advanced to the DA.

30. IDA will have the right, as reflected in the Financing Agreement, to suspend disbursement of the Funds if reporting requirements are not complied with.

3 1. TANROADS will provide a quarterly Interim Financial Report (45 days after the end of the period end) and annual Financial Report (within six months after the year end) to the Bank in order to monitor the utilization of funds for the project. Formats for these reports should be generated from the financial management system of the TANROADS. There will be clear linkages between the information in these reports and the Chart of Accounts.

32. The following quarterly IFRs and annual Financial Report will be produced by TANROADS for the project: (i) a statement of sources and uses of funds for the reported quarter and cumulative period (from project inception) reconciled to opening and closing bank balances; and (ii) a statement of uses of funds (expenditure) by project activity/component comparing actual expenditure against the budget, with explanations for significant variances for the quarter and cumulative period.

33. In addition to the above IFRs and annual Financial Reports, TANROADS will also have to submit to the Bank the following information in order to support report-based disbursement: (i) Designated US$ Account Activity Statement. (ii) Designated US$ Account Bank Statements. (iii) Summary Statement of Designated US$ Account Expenditures for Contracts subject to Prior Review. (iv) Summary Statement of Designated US$ Account- Expenditures not subject to Prior Review. (v) Projected cash flow forecast requirements for the next two reporting quarters (6 months period).

61 34. The financial statements should be prepared in accordance with International Public Sector Accounting Standards (which inter alia includes the application of the cash basis of recognition of transactions). The IDA Financing Agreement will require the submission of audited financial statements to the Bank within six months after the financial year end.

35. These Annual Financial Statements will comprise: A Statement of Sources and Uses ofFunds (Cash Receipts and Payments) which recognizes all cash receipts, cash payments and cash balances controlled by the entity; and separately identifies payments by third parties on behalf of the entity. A Statement of Affairs/ Balance Sheet as at the end of the financial year showing all the assets and liabilities of the project. The Accounting Policies Adopted and Explanatory Notes. The explanatory notes should be presented in a systematic manner with items on the Statement of Sources and Uses of Funds being cross referenced to any related information in the notes. Examples of this information include a summary of operating (fixed) assets by category of assets, and a summary of Withdrawal Schedule, listing individual withdrawal applications. A Management Assertion that Bank hdshave been expended in accordance with the intended purposes as specified in the relevant World Bank legal agreement.

36. Indicative formats of these statements will be developed in accordance with IDA requirements and agreed with the Country Financial Management Specialist.

External Auditing Arrangements

37. As per Public Finance Act, 2001, the NAO has the responsibility for the audit of all government organizations including local authorities and public corporations and donor funds. The Controller and Auditor General (CAG) has the power to authorize any person registered as an auditor under the Auditors and Accountants Act of 1972 and approved by the CAG to conduct an audit on his behalf. The private external auditor has to be acceptable to the Bank.

38. TANROADS annual external audit will be carried out by the NAO or such other person registered as an auditor and approved by the Controller and Auditor General. The Auditors will provide a single audit report on the project financial statements (which includes the DA). The review of External Audit report conducted by the NAO for IDA financed projects (CTCP and CTCP-2) in the TANROADS during the last years was found to be satisfactory with no major accountability and internal control issues raised that would impact on this project.

39. The audit will be done based on International Standards on Auditing (IFAC/INTOSAI pronouncements) and the audit report will be submitted within six months after the end of the financial year. In addition, the Auditors will provide a detailed management letter containing the auditor’s assessment of the internal controls, accounting system and compliance with financial covenants in the Financing Agreement. Audit terms of reference (TOR) have been agreed with the Bank before negotiations. The Bank encourages the disclosure of the project’s audited accounts to the public in the spirit of transparency. 62 Table A7-4: Audit Report Opinion I Audit Report Opinion I Due Date I Project’s annual fmancial statements audit By December 3 1 each year (within six months after end of opinion and management letter. The audited the FY which is June 30th of every year during project accounts should have adequate disclosures that implementation) include the reconciliation of the Designated Account.

Financial Management Action Plan

Action Date due by Responsible 1. Prepare formats of unaudited interim fmancial reports Done TANROADS (IFRs) that will be used for the project and agree the formats with IDA. 2 Agreement of terms of reference for external auditors. Done TANROADS and IDA 3. Recruitment of additional two staff for the accounts Withinthreemonthsof TANROADS project unit. project’s effectiveness

Effectiveness Conditions and Financial Covenants

41. Effectiveness Conditions: there are no financial management effectiveness conditions.

42. Financial Covenants: Financial covenants are the standard ones as stated in the Financing Agreement on Financial Management, Financial Reports and Audits and Section 4.09 of the General Conditions.

43. The Standard financial covenants include the following to IDA:

(i) Maintenance of a satisfactory financial management system for the project. (ii) Submission of audited project financial statements within six months after the end of the financial year. (iii) Submission of unaudited IFRs within 45 days after each calendar year quarterly period.

44. A supervision mission will be conducted at least twice a year based on the risk assessment of the project. The supervision missions’ objective will also include, ensuring that strong financial management systems are maintained for the project throughout its life. Reviews will also be carried out regularly through the review of IFRs to ensure that expenditures incurred by the project remain eligible for IDA funding. The Implementation Status and Resultes Report (ISR) will include a

63 financial management rating for the components. This will be produced by the Bank’s Country Financial Management Specialist after an appropriate review.

45. Based on the outcome of the financial management risk assessment, the following implementation support plan is proposed:

Table A7-6: Implementation Support Plan FM Activity Frequency

Desk reviews Interim financial reports review (IFRs) Quarterly Project audit report review Annually Review of other relevant information such as systems audit reports As these become available On site visits Review of overall operation of the FM system Half-yearly based on the substantial risk rating. Monitoring of actions taken on issues highlighted in audit reports, As needed auditors’ management letters, systems audit report and other reviews Transaction reviews As needed CaDacitv building SUDDOrt FM training sessions As needed

Conclusion of the Assessment

46. A description of the TANROADS’ financial management arrangements above assesses the financial management risk as substantial but given the mitigation measures to be undertaken, the risk will be reduced to moderate which satisfies the Bank’s minimum requirements under OPiBP10.02.

64 Annex 8: Procurement Arrangements TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

A. General

1. Procurement for the proposed project will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, revised October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, revised October 2006; Guidelines on Preventing and Combating Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants, dated October, 2006; and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Credit, the different procurement methods or consultant selection methods, the need for pre- qualification, estimated costs, prior review requirements, and time frame are agreed between the Recipient and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually, or as required, to reflect the actual project implementation needs and improvements in institutional capacity. All Procurement Plans will be publicly disclosed in accordance with the Bank's disclosure policy. The Procurement Plan includes procurement for the emergency works taking into account the methods and thresholds applicable to the streamlined procurement and consultants' selection procedures in accordance with the Guidance to OP/BP 8 .OO, Rapid Response to Crises-and Emergencies.

2. Bank's Standard Bidding Documents will be used for procurement of works and goods under International Competitive Bidding. However National Bidding Documents may be used for procurement of works and goods under National Competitive Bidding subject to the exceptions indicated below. Furthermore, in accordance with para. 1.14 (e) of the Procurement Guidelines each bidding document and contract financed out of the proceeds of the Financing shall provide that: (i) the bidders, suppliers, contractors and subcontractors shall permit the Association, at its request, to inspect their accounts and records relating to the bid submission and performance of the contract, and to have said accounts and records audited by auditors appointed by the Association; and (ii) the deliberate and material violation by the bidder, supplier, contractor or subcontractor, of such provision may amount to an obstructive practice as defined in paragraphs 1.14(a)(v) of the Procurement Guidelines.

3. Procurement of Works: Works estimated to cost US$254.6 million will be procured under the project. This will include: (i) rehabilitation and upgrading of Korogwe - Mkumbara - Same road (172 km); (ii) rehabilitation of Arusha - Minjingu road (98 km); (iii) rehabilitatiodpaving of Bukoba, Kigoma and Tabora airports runways and construction of other facilities at Bukoba; and (iv) emergency road and bridge repair. Contracts under (i), (ii), and (iii) will be procured under international competitive bidding (ICB) procedures. Bank standard bidding documents and standard bid evaluation forms will be used and prior review procedures will apply to all contracts. Contracts under (iv) will be procured in accordance with the Guidance to OPBP 8.00, ,Rapid Response to Crises and Emergencies, as detailed in the paragraph below.

65 4. Emergency repair works will be procured following simplified procurement and consultants’ selection procedures in accordance with the Guidance to OP/BP 8.00, Rapid Response to Crises and Emergencies. In particular, following methods will be used for procurement of contracts related to emergency operations: (i) International Competitive Bidding (ICB) procedures with accelerated bidding period of 21 days; (ii) National Competitive Bidding (NCB) procedures with accelerated bidding period of 10 days; (iii) Shopping; and (iv) Direct Contracting. In the cases of ICB and NCB, the borrower may prefer to use Bid Securing Declaration instead of bank guarantee for the bid security. Similarly, a performance security may not be required in accordance with paragraph 2.40 of the Procurement Guidelines. However, retention money may be retained during the liability period. Bidding periods shorter than days specified above will require prior Bank’s approval, taking into consideration the capacity of firms (local and international) to prepare responsive bids in a short period. The threshold for the shopping method is up to US$l,OOO,OOO equivalent per contract. Direct contracting as per paragraph 3.6 (a) and (e) may be used to extend existing contracts (for contractors who are working in the locality of emergency and are performing well) or award new contracts provided prices are reasonable, and that no advantage could be obtained by further competition. The Borrower should provide all relevant documentation confirming the continued good performance of the selected contractors and provide evidence to show that the prices are reasonable and that no advantage could be obtained by further competition. Such documentation, rationale and evidence shall be reviewed by the Bank prior to giving its no objection either under the proposed retroactive component (see para below) or under new contracts. The borrower may also use a standing list of prequalified civil works contractors kept by the Contractors’ Registration Board. Before inviting any contractor, the borrower should seek advice and confirmation from Contractors’ Registration Board on the competence and track records of the contractors to be invited. All bidding documents, enquiry documents and contracts, regardless of the procurement method, shall include the Bank standard provisions of fraud and corruption and the Bank’s Audit Rights. Contracts that do not include such provisions or not amended to include such provisions will not be financed by this Credit. 5. Up to US$6 million worth of emergency contracts can be financed retroactively at effectiveness of the project provided they were procured based on above described procedures and payment for such works were done not more than 12 months prior to effectiveness. Prior to retroactive financing a post procurement audit will be conducted for the contracts submitted for retroactive financing. Such review would establish: (i) acceptability of the procurement procedure; (ii) reasonableness of prices; (iii) whether the contract has beedis implemented according to the contract terms. It is important that all contracts include a fraud and corruption and right to audit clause. In case such clause is missing the contracts should be amended to add such clauses. Additionally, it is planned to conduct a post procurement audit of a reasonable sample of all emergency contracts (except for those which have been already considered under retroactive financing). Also, it is planned to conduct a training workshop not later than by May 2010 for the procurement officers of the concerned regional offices of TANROADS to ensure that the procurement methods described in paragraph 4 above are well understood.

6. Procurement of Goods: Goods procured under this project will include furniture, vehicles and office equipment for TANROADS, NRSA and DVELA estimated to cost a total of US$2 million. Goods estimated to cost US$500,000 and above per contract will be procured through ICB

66 using Bank’s Standard Bidding Documents. Contracts estimated to cost less than US$500,000 may be procured using NCB. Contracts estimated to cost US$50,000 and below may be procured using the Shopping method or United Nations Office Project Services (UNOPS). Direct contracting may be used for exceptional cases, such as for the extension of an existing contract, standardization, proprietary items, spare parts for existing equipment and emergency situations, in accordance with paragraphs 3.6 and 3.7 of the Guidelines.

7. Selection of Consultants: Services procured under this project would include the supervision of road and airport runway rehabilitation works; design and preparation of bidding documents for the rehabilitation of paved roads; study for the establishment of a road accident information system; a feasibility study for the proposed Kisarawe Freight Centre; a study for the design of a program for the removal of bottlenecks on local government roads; and other studies yet to be decided. Furthermore, individual technical assistant services will be required for the implementation of Components C and D. Consulting firms for services estimated to cost US$200,000 and above would be selected through QCBS. Consulting firms for services estimated to cost less than US$200,000 may be selected using the consultant’s qualification method (CQS). Individual consultants will be selected on the basis of their qualifications in accordance with Section V of the Consultant Guidelines. Consulting services for audits and other services of a standard nature or routine nature may be procured using the Least Cost Selection method. Single source selection may be used where it can be justified with the Bank’s prior approval. Short lists of consultants for services estimated to cost less than $200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

8. Operating Costs: The financing of additional operating costs of TANROADS (due to the management of the project) and initial operating costs of NRSA and DVELA is planned to be financed up to a total of US$1.5 million.

9. Training: The project will finance training courses on Procurement, Financial Management and Contract Management to TANROADS and TAA up to US$lm million and US$0.3 million respectively, road safety training courses through MoID (US$1 million) and Transport Sector PPP courses through MoID (US$O.S million). Each implementing agency will formulate an annual training plan and budget which will be submitted to the Bank for its prior review and approval. The annual training plan will identify, inter alia: (i) the training envisaged; (ii) the justification for the training, how it will lead to effective performance and implementation of the project and or sectors; (iii) the personnel to be trained; (iv) the duration of such training; and (v) the estimated cost of the training. Upon completion of training, the trainees shall be required to prepare and submit a report on the training received.

B. Assessment of the agency’s capacity to implement procurement

10. Capacity Assessment was carried out for the three Implementing Agencies of the TSSP: TANROADS, TAA, and MoID. TANROADS was the Implementing Agency for three previous projects including IRP-2, CTCP and CTCP-2. The Project will use Bank Procurement Procedures for all GoodsNorks ICB contracts and all consultancy contracts that require international

67 participation. The Tanzania Public Procurement Act (CAP 410, R.E. 2004) and relevant Regulations will be used for all other contracts. The Act has been reviewed and found consistent with the Bank Procurement Guidelines except in the application of domestic preference where the Act allows domestic preference for non-ICB contracts. This provision of the Act will not be applicable in this Project.

11. The assessment focused on the following aspects: overall institutional set-up as well as organizational set-up of the procurement function; staffing in terms of numbers and qualifications; procurement cycle management; records keeping; and presence of controls in the procurement processes. A brief summary of the Mission’s findings and recommendations for the three institutions is presented below:

Ministry of Infrastructure Development (MoID)

12. General: The MoID will be responsible for the implementation of the Component for the Enhancement of Road Safety. The Ministry was in the past involved with implementation of World Bank projects including IRP and IRP 11. However, most of the staff who were involved in the implementation of the projects were absorbed by TANROADS which was established in July 2000 and took over the responsibilities for implementation of road development and maintenance programmes. The assessment was aimed at establishing whether there was any residual capacity for implementation of this component of the project.

13. Organization Structure: The Ministry has recently been reorganized with the establishment of the Department of Safety and Environment which will be responsible for the implementation of the Component for Improvement of Road Safety. The procurement function is under the Procurement Management Unit (PMU) which was established in 2005 in line with the Public Procurement Act, (CAP 410, R.E, 2004). The PMU is headed by a qualified Supplies Officer with CSP who reports directly to the Permanent Secretary. There are three Sections which include: (i) Stores Management; (ii) Procurement; and (iii) Procurement of Vehicles. The sections are headed by qualified Supplies Officers who report to the Head of PMU.

14. Staffing: Based on the establishment, the PMU has ten staff positions out of which nine have been filled, all of whom are from the supplies chain with some of them highly qualified Supplies Officers. The positions include: Head of PMU; three principal supplies officers; two procurement officers; three supplies officers; and a technical expert. The technical expert position was vacant at the time of the assessment. Over and above these staff, the Department of Safety and Environment has a seasoned procurement specialist (currently in the Safety Section) with long experience in Bank procurement procedures that could be used in the procurement process for the project. If this specialist who has an engineering background is employed, the procurement risk would be reduced substantially. The PMU is also having a Records Management Officer as one of the staff who would be very useful in the records keeping. The Ministry was advised to transfer a procurement staff with engineering background to fill the vacant technical expert position. The engineer would bring required knowledge to the Unit with regard to the procurement of consultancy services. In addition, the Director of the Safety and Environment Department agreed to the proposal to involve the seasoned procurement specialist in the procurement processes for the project.

68 15. Training: The Staff of the Procurement Management Unit do not have experience in World Bank procurement procedures and therefore they will require basic and advanced training in Bank procurement procedures to enable them implement the project. MoID will also need to prepare a Procurement Manual to provide guidance in the procurement processes in line with the Public Procurement Act, (CAP 410, R.E, 2004) and its Regulations.

16. Records Keeping: With regards to records keeping, the Mission noted that the PMU is keeping records for the procurement activities carried out. However, a system for proper keeping of records is yet to be developed and therefore one would need to search through several files to get records of a particular contract. Training in records keeping will be required to ensure proper keeping of records. It was agreed that the Bank will provide an expert to assist with the training in records keeping. Storage space for procurement documents is also a serious problem in the MoID.

17. Risk Rating: Considering the residual capacity after most of the staff who were involved in the implementation of the past World Bank projects having been absorbed by TANROADS, the MODrisk with regards to procurement is considered substantial but can be reduced to moderate through appropriate measures as outlined in Table A8-1 below.

TANROADS HQ

18. Since the procurement capacity assessment for TANROADS was carried out recently, in 2007, under CTCP2, this assessment under TSSP is an update of the one carried out in 2007.

19. Organization Structure: TANROADS has been reorganized since the last assessment. Following the re-organization exercise that took place in August 2007, the new Organization Structure was eventually approved by the Board of Directors in April 2009. In the new structure, five directorates were established, with the procurement functions under the Directorate of Procurement and Contracts (DP&C) which is reporting directly to the Chief Executive. The Board approved the organization structure and job descriptions of the directorates but not the proposed staffing levels. The DP&C has three Departments for Goods and Works; Consultancy Services; and Contracts Control.

20. Staffing: A staffing level of 17 has been proposed in the current organization structure consisting of three Quantity Surveyors, 12 Engineers, one Supplies Officer and one Secretary. The Board will not approve the proposed staffing levels for TANROADS until a Job Evaluation has been carried out. TANROADS is in the process of doing so. Out of the 17 proposed positions, 11 positions have been filled and six positions are vacant. Currently, the staffing levels recognized by Public Service Management are based on figures established in 2000 which are much lower. TANROADS will discuss with the Government regarding the additional positions but this will be after carrying out the Job Evaluation to justify the proposed additional staffing requirements. Short of getting staff to fill the six vacant positions, TANROADS is proposing to recruit three staff to support the implementation of TSSP.

21. Training: Training in basic and advance procurement will be required in order to ensure that all procurement staff in the Directorate are knowledgeable on the Bank and Government

69 procurement procedures. TANROADS also need to prepare a Procurement Manual to provide guidance in the procurement processes in line with the Public Procurement Act, (CAP 410, R.E. 2004) and its Regulations

22. Record Keeping: Procurement records in TANROADS are kept in files separately for each contract. TANROADS is facing an acute shortage of space for keeping records resulting into piles of documents and reports in the offices of procurement staff. There is an urgent need for TANROADS to look for space for archiving documents and reports which are not in use but must be kept in accordance with the legal requirements. It is also necessary to think of electronic filing so as to minimize space for physical documents. As a start, TANROADS has requested for a heavy duty scanner/copier to be included in this project. 23. Recent Litigation: Currently TANROADS is handling several disputes arising from termination of Contracts. Disputes for three major Works Contracts and one consultancy Contract could not be resolved at lower dispute resolution mechanism And are currently at Arbitration process and the implementaion of the works had to be retendered. These posses a risk of delivering the projects timely and within costs.

TANROADS Regional Offices

24. TANROADS Regional Offices are part of the TANROADS establishment charged with the responsibility for maintenance of the road network under TANROADS in the respective regions. The Regional Managers’ Offices will be responsible for the implementation of the emergency component of the project. A desk study was carried out to get a general understanding of the Regional Managers’ Offices and its staffing which was followed by a capacity assessment of the Coast Region as a representative region to establish the capacity of the regions to implement the project component. The assessment focused on the following aspects: the organizational set up of the Regional Managers’ offices in general and in particular the procurement function including staffing in terms of numbers and qualifications; procurement cycle management; records keeping; and presence of controls in the procurement processes. A summary of the findings and recommendations are presented below.

25. Organization Structure: TANROADS Regional Offices are headed by Regional Managers. There are five units reporting directly to the Regional Manager, namely, Accounts and Administration; Engineering; Procurement Management; Planning; and Weigh Bridge Units. The Regional Managers have been delegated to carry out procurement up to US$2,000,000 equivalent per contract for works; US$250,000 equivalent per contract for goods and US$150,000 equivalent per contract for consultancy services. In line with the Public Procurement Act (CAP 410, R.E. 2004), the Chief Executive has established a Delegated Tender Board with at least five members including the Chairperson and Secretary and a Delegated Procurement Management Unit headed by an engineer and supported by a technician in each region to handle all procurements up to the set limits and any contracts beyond the limits are referred to the headquarters.

26. Staffing: As discussed above the Procurement Unit has only two staff including an engineer and a technician. The two staff from the core team for the procurement activities in the regions. The

70 Engineering and Planning Units provide support in the procurement processes by providing inputs to bidding and proposal documents as well as in the evaluation of bids and proposals. The Engineering Unit is also involved in contract management. Most of the staff in the regions are not familiar with the Bank Procurement Guidelines and Procedures implying that training will be required for the key staff to be involved in the implementation of the project.

27. Records Keeping: The assessment revealed that there is no proper system for filing and keeping of records established in the regions. Most of the records are scattered in different files and within the units responsible for implementation. The training to be organized for the key staff will also have to cover aspects of records keeping.

28. Risk Rating: In 2007 the procurement was assessed as Average. Given the above issues, the mission considers the risk substantid before mitigation and moderate after mitigation.

Tanzania Airports Authority (TAA)

29. TAA has not managed a Bank financed project on their own but have staff who are familiar with Bank procurement procedures having processed two contracts funded by the Bank under IFW I1 and CTCP. However, they have implemented major airports rehabilitation and upgrading contracts under the funding of the government and other bilateral and multilateral donor agencies. Under TSSP, TAA will be responsible for the implementation of the Improvement of Regional Airports components for which the airports of Bukoba, Kigoma and Tabora have been selected for upgrading. Due to limitations in the resources, there will be a need of re-scoping the works for Kigoma and Tabora Airports to match with the available resources.

30. The estimated cost of all the seven airports is US$212 while TSSP is providing only US$69.2 million for the three airports. TAA proposes to assign the re-scoping exercise to the Consultant who carried out the design, through an addendum to the design contract. The mission advised TAA to submit a request for extending the existing contract. TAA also urgently needs to start the selection process of a Transaction Adviser to assist in the process of PPP for developing Mwalimu Julius Nyerere International Airport. They were not sure about the source of funding for the Adviser but possibilities exist for using available TA under the ongoing CTCP-2.

31. Organization Structure: TAA is headed by a Director General who reports directly to the Permanent Secretary, Ministry of Infrastructure Development. TAA has five Departments including: Engineering and Technical Services; Regional Airport; Mwalimu Julius Nyerere International Airport; Human Resources Development and Administration; and Finance and Business. In addition there are five Units including the Procurement Management Unit (PMU) which reports directly to the Chief Executive. In TAA, procurement functions are managed by the Procurement Management Unit though some of the activities are still carried out by the User Departments. This is due to inadequate capacity within the PMU to manage the procurement of major works and consultancy services contracts.

32. Staffing: The Procurement Management Unit is currently having six staff all of whom are from the supplies chain with some of them highly qualified Supplies Officers. Three other staff has

71 been recruited of whom, two shall be based at TAA HQ. TAA is urged to consider recruiting at least one engineer for those positions in order to ensure that there is capacity in the procurement of works and consultancy services.

33. Training: Most of the staff lack training in procurement of works and consultancy services and therefore are highly recommended for basic training in procurement. TAA will also need to prepare a Procurement Manual to provide guidance in the procurement processes in line with the Public Procurement Act, 2004 and its Regulations.

34. Record Keeping: With regards to record keeping, the Mission noted that TAA have just started a proper record filing system. Training in records keeping will be required to ensure proper keeping of records. The Mission advised TAA to start thinking of electronic filing so as to minimize space for physical documents.

35. Risk Rating: The procurement risk of the TAA is considered moderate.

Action Plan to Mitigate the Procurement Risks

36. A summary of Actions to mitigate the above risks is presented in the Table below:

Table AS-1: Action Plan to Mitigate the Procurement Risks

Implementing Agency Risk Action to Mitigate Risk Timing - Latest Date MoID Shortfall of Transfer to PMU one Engineer with By October 1, procurement staff experience in procurement to 2010 support with procurement of consultancy services Provide basic and advanced procurement training in works and By October 1, consultancy services to PMU staff 2010 who will work on the project Involve the current procurement specialist in the Safety Section in Throughout the the procurement process for the project. project Inappropriate record World Bank staff to provide training- During project keeping system to MoID staff in record keeping implementation Establish a proper procurement During project filing system implementation Obtain additional storage space for By June 30,201 1 procurement documents Lack of Procurement Prepare a Procurement Manual By October 20 10 Manual TANROADS Lack of approved Carry Out Job Evaluation and By July 2010 staff establishment obtain approval for staff establishment from TANROADS Board and Public Service

72 Management

Shortfall Employ 3 individual consultants to procurement staff make up for shortfall Insufficient Carry out training in procurement of knowledge in works for Regional Managers’ staff procurement under Bank funded projects for Regional staff Inadequate storage Rent additional space for storing By July 20 10 facilities for records archived documents IDuring project Introduce electronic filing system Inappropriate provide training to Regional records keeping Managers’ staff in record keeping system in the Assist Regional Managers to During project regions establish a proper procurement Implementation filing system

Inadequate Contract Provide intensive contract During project Management skills management to contract implementation management staff Lack of Prepare Procurement Manual Procurement Manual Lack of familiarity Conduct training course for By May 2010 with emergency procurement officers fiom Regional procurement Engineers’ Offices. procedures TAA I Shortfall of Provide basic and advanced works after project qualified and consultancy services training to effectiveness procurement staff procurement staff Inadequate system Train staff in record keeping During project I for record keeping Lack of Prepare a Procurement Manual Procurement Manual

C. Procurement Plan

37. The Recipient has prepared a procurement plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Recipient and the Project Team on March 30, 2010 and is available at TANROADS, Headquarters in Dar es Salaam. It will also be available in the project’s database and in the Bank’s external website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

73 D. Frequency of Procurement Supervision

38. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended two supervision missions to visit the field to carry out post review of procurement actions.

E. Details of the Procurement Arrangements Involving International Competition

1. Works, Goods and Non Consulting Services

1 2 3 4 5 6 I 8 9 Estimated Review Ref. Contract Cost (including Procurement P-Q Domestic by Bank Expected Comments No. (Description)-. contingencies) Method Preference (Prior / Bid-Opening u&m (YedNo) Post) Date - 1 Civil Works contract for 101.4 ICB N N Prior July 15,2010 Komgwe - Same - Mkumbara in two lots; ( 172km) 2 Civil works contract for 72.0 ICB N N Prior July 15,2010 Arusha town border - Minjingu (98 km) 3 Civil works contract for 20.4 ICB N N Prior July 15,2010 Bukoba airport 4 Civil works contract for 26.1 ICB N N Prior July 15,2010 Kigoma airport 5 Civil works contract for Tabora 19.1 ICB N N Prior July 15,2010

(i) All above contracts and all direct contracting will be subject to prior review by the Bank.

74 2. Consulting Services

AS-3: List of consulting assignments with short-list of international firms Ill 2 I 3 I 4 I 5 I 6 I I 1

Description of Assignment

(ii) All above consultancy services and all single source selection of consultants (firms) will be subject to prior review by the Bank. (iii) Short lists composed entirely of national consultants: Short lists of consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

75 AS-4: Thresholds for Procurement Methods and Prior Review for Both Non Emergence and Emergence Operations

All, Cost Reasonableness Only

Consulting Services L100,000 IC - Qualification None (Post review) unless - Individuals (IC) specified in the PP3 <100,000 IC - Qualification None (Post review) All Values IC - sss All

NOTES:

General - Terms of Reference for all contracts shall be cleared by the Bank

1. Shortlists for consultancy services for contracts estimated to be less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

2. QBS,FBS, and LCS for assignments meeting requirements of paragraphs 3.2, 3.5, and 3.6 respectively of the Consultant Guidelines.

76 Annex 9: Economic and Financial Analysis TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

Component A: Rehabilitation and Preparation of Designs for Rehabilitation of Paved Trunk Roads

Sub-component (a): Rehabilitation and Upgrading of the Korogwe - Same road (172km) 1. The estimated cost of the rehabilitation of the road is US$104.9 million (includes works and supervision), which averages to approximately US$609,884 per kilometer. The design life is 20 years. The proposed works include base repairs and reprocessing, widening of the whole road from the current 6 meter carriageway and 1.0 meter wide shoulders to 6.5 meters and 1.5 meters carriageway and shoulders respectively. An economic appraisal of the road was carried out as part of the preparatory design activities to determine whether the proposed investments are economically viable and the methodology and results are summarized below. The results demonstrate that, at a discount rate of 12 percent, the economic internal rate of return (EIRR)for the Korogwe - Mkumbara section was 19 percent and the net present value (NPV) was US$19.5 million while for the Mkumbara - Same section the EIRR of 19.9 and NPV of US$27.7 million therefore the investment is viable. The proposed rehabilitation of Korogwe-Mkumbara-Same road is in line with the National Transport Policy goals of population integration, increased regional and international trade, and regional equity improvement.

A. Methodology

2. The methodology adopted for evaluation is based on the Highway Development and Management (HDM-4) model guidelines. The model evaluates year-by-year Road Agency Costs (RAC) and Road User Cost (RUC). The RAC costs comprise capital, maintenance, and other special costs. Data collected was therefore aimed at facilitating the running of the model.

B. Data Collection

3. Population. Population projections were based on the 2002 census report in which the population of the two regions is as follows: Tanga 1,642,015 and Kilimanjaro 1,381,149. The population growth in the two regions between 1988 and 2002 was 1.7 percent therefore for purposes of evaluation of the road, the overall annual growth rate of 1.7 percent was adopted and this growth rate was assumed to remain constant for the analysis period.

4. Gross domestic product (GDP) growth. The values of GDP were obtained from “The National Account of Tanzania mainland 1998 - 2007 as shown in table A9-1 below:

Table A9-1: Historical Growth of Real GDP (GDPNear) Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Tanga 4.2 3.2 4.0 4.7 6.2 8.4 6.1 Kilimanjaro 4.2 3.3 3.8 4.7 3.5 5.7 6.1 Natinnal 4.2 3.3 4.0 4.7 4.9 6 7.2 6.9 7.8 7.4 6.7 7.1 7.4

5. The table gives real GDP growth for the Tanga and Kilimanjaro regions between 1996 and 2002 and Tanzania as a whole for the whole period. The values show that there is no 77 significant difference in GDP growth between the two regions and the nation. The national GDP values can therefore be used as a basis for evaluation in this appraisal. For the country as a whole the average annual real GDP growth rate from 1996 to 2000 was 4.2 percent and from 2001 to 2008 it was 7.

6. Future GDP growth scenarios. The historical GDP growth from 1990s sets the practical growth scenarios for the future as follows. Low growth: With economic performance of the country similar to that between 1990 and 2000, when the average annual growth rate of GDP in real terms was 3.25 percent. This is projected to continue to year 2025. Medium growth: This is taken as the realistic growth for the economy and reflects the long-term objectives of the government. The annual average growth rate is taken to be seven percent under medium growth scenario. High growth: This is based on the objective set out in the Ten Year Road Sector Development Program (2002) and general economic review based on the Economic Survey (2004). The average annual growth rate under this scenario is assumed to be nine percent.

7. Traffic forecasting. Traffic forecasting is essentially limited to two types of traffic: normal, and generated or suppressed traffic. Diverted traffic has not been considered because within the study area, there are very few significant alternatives to the project road over any part of its length or over the road as a whole.

8. Based on analysis of historic traffic growth, government projections, and GDP growth, traffic growth for the two periods 2009-18 and 2019-29 has been determined and is presented in the table below.

Table A9-2: Annual Traffic Growth (YO) Car Pickup Minibus Light Medium Heavy Articulated Bus truck truck truck truck 2009-18 9.0 8.5 8.5 7.0 7.0 6.0 5.0 7.0 20 19-29 7.0 8.0 8.5 6.0 4.0 6.0 4.0 5.0

9. The growth projections are based on the following: The growth rate for buses will decline as passengers shift to the private car as a result of increased incomes, reduced travel time and cost, and improved safety. Pickups and light trucks will grow at a rate greater than average. Growth beyond 2018 is extremely speculative; therefore the rates beyond 2018 will be lower.

C. Evaluation Framework

10. Overall Objective. The objective with regard to economic analysis is to establish the economic viability of the road rehabilitation alternatives. For the analysis, the road has been divided into two sections: Korogwe-Mkumbara (chainage 0.00-76.00 km) and Mkumbara-Same (chainage 76.00-172.00 km). This division is based on the pavement construction history, current condition, and maintenance requirements. The earliest year for construction to commence has been taken as 2010 and the road will be fully opened to traffic in 2013.

11. The following benefits were considered against the investment costs: 0 reduction in vehicle operating costs (VOC) as a result of the improved road 78 reduction in maintenance costs road user time savings resulting fiom quicker journeys 0 benefits to generated traffic, which will be encouraged to use the road as a result of the improved road condition

12. The traffic analysis indicates that there are no benefits fiom diverted traffic. Also due to lack of data to establish road accident costs as well as a methodology for predicting changes in accidents as a result of specific improvements, the benefits fiom reduced accidents were not computed. Observations are that accidents increase with road improvement in Tanzania because of speeding.

13. Do minimum. Based on current and projected road maintenance funding, this level of maintenance will be insufficient to arrest further deterioration in the condition of the road, particularly during the rainy season. Without major interventions, the road would become increasingly rough each successive year and ultimately become prohibitively expensive to operate on.

14. Evaluation model. Evaluation was carried out using HDM-4. The following were major inputs into the model: road characteristics 0 VOC data 0 project residual values work standards and maintenance criteria definition of alternatives

15. Road characteristics for the two homogeneous sections were derived from materials investigations and study of the topography and alignment.

16. Vehicle operating cost data: TANROADS retains vehicle fleet characteristic data of eight types of vehicles (cars; pickups; minibuses; light trucks; medium, heavy, and articulated trucks, and buses) and these were applied.

17. Residual values: The estimation of the residual value of the project assumes the following levels at the end of 20 years project cycle. Earthworks will be satisfactory and have 100 percent residual value. Pavement materials can be reused as sub-base and therefore have 25 percent residual value. Some of the minor drainage structures will be damaged and also all pipes of 600 millimeters diameter will be removed and hence will have a residual value of approximately 50 percent. Bridges and box culverts will have many years of life leR and their residual value will be approximately 70 percent. Other project costs such as preliminaries, design and supervision and so forth, will be sunk costs with no residual value. Based on these assumptions, 30 percent of the initial capital cost is taken as the residual value of the road at the end of the analysis period.

18. Maintenance options. Two maintenance work standards were considered: the “DO Minimum” and the “Do Something Alternative.” The “DO minimum” reflects the ongoing maintenance works and forms the base case against which rehabilitation works are compared. The current maintenance includes routine, periodic, and spot improvement. Pothole patching, crack sealing, and routine drainage maintenance are included for this scenario. In the “DO 79 minimum” case, the cost of maintenance will increase in future as the road deteriorates. The “Do Something Alternative” scenario focuses on pavement maintenance after rehabilitation, assuming accepted standards for the type of construction. The post-rehabilitation maintenance works are mainly routine maintenance on the carriageway and drainage maintenance and include the following: routine works including drainage maintenance every year, pothole repair when potholes exceed three per kilometer, crack sealing when wide structural cracks exceed three percent, edge repair when edge break exceeds 500 square meters per kilometer, and single bituminous surface treatment when total damaged area exceeds 30 percent.

D. Construction Costs

19. Table A9-3 summarizes the estimated construction costs (2009 prices) for the four improvement alternatives considered, namely: (i) pavement strengthening, 50 millimeters AC surfacing including shoulders and providing four railway bridges overpasses along Korogwe - Mkumbara section, (ii) pavement strengthening, 50 millimeters AC surfacing including shoulders with no railway bridges overpasses, (iii) pavement strengthening, 50 millimeters AC surfacing to carriageway and DBST shoulders, and (iv) pavement strengthening, 50 millimeters AC surfacing to carriageway, DBST shoulders, and exclusion of railway bridge overpasses.

20. Under these alternatives, the proposed railway bridge overpasses are only in Korogwe - Mkumbara section. The construction costs were updated by TANROADS through adopting the average unit rates of three similar contracts awarded in 2009 for all major items. (The exchange rate used is US$l to 1,300 TSh).

Table A9-3: Construction Costs (US$) I Alternative Option Korogwe - Mkumbara Mkumbara - Same Pavement strengthening, AC surfacing 43,482,204 46,061,824 including shoulders and railway bridge overpasses Pavement strengthening, AC surfacing 40,124,752 46,061,824 including shoulders and no railway bridge overpasses Pavement strengthening, AC surfacing to 4 1 ,128,456 43,021,397 carriageway, DBST surfacing shoulders

37,771,004 43,021,397 carriageway, DBST surfacing shoulders E. Economic Costs

21. The construction costs above are financial costs of the project. However, for economic evaluation the capital costs used in the analysis are the economic costs. They are a reflection of the actual use of national resources in the construction of the project. To estimate economic costs, an economic conversion factor for the project has been derived as demonstrated in Table A9-4. This factor has been derived by deducting taxes from materials and adjusting market wages to reflect opportunity costs. An overall conversion factor of 77.68 percent was adopted to convert capital financial costs to economic costs. The same factor has been applied to convert

80 financial maintenance cost to economic costs. The foreign and local components of construction costs have been estimated at 61.47 percent and 38.53 percent respectively. Table A9-4: Economic Conversion Factors 1 y;:tyrt; 1 Approximate I Percent of total conversion factor I

Y

F. Results

22. Summary of benefits and costs. Evaluation was carried out at the 12 percent discount rate over the analysis period (2009-29). Results in terms of NPV and EIRR for. the different alternative treatments are summarized in Table A9-5:

Table A9-5: Economic Results of 6.5 Meter Carriageway and 1.5 Meter Shoulders

cmg camageway, DBST surfacing shoulders and no railways bridge ovemass

23. Based on the results, the pavement rehabilitation with 50 millimeter AC overlay to the carriageway, DBST surfacing to shoulders, and without railway bridges overpass offers the better alternative.

G. Sensitivity Analysis

24. Four different sensitivity analyses were carried out to test the impact of the variation in some of the most important inputs to the recommended alternative. These inputs are the construction costs, the base traffic volumes, traffic growth rates and the worst scenario with combination of all the above. The results are summarised in Table A9-6.

81 Sensitivity case Korogwe - Mkumbara, EIRF2 ('YO) Mkumbara - Same, EIRR (YO) Cost increase by 30% 15.3 16.3 . Base traffic decreased by 20% 16.7 16.6 Traffic growth decreased by 20% 16.3 16.8 Combination of the above 12.5 11.5

25. The sensitivity analysis demonstrates that the proposed investment is economically viable except for the combination of severe cases whereby Mkumbara - Same road is marginally viable.

Sub-Component (b): Rehabilitation of the Arusha - Minjingu road (98 km) 26. The estimated cost of the rehabilitation of the road is US$74.6 million (includes works and supervision), which averages to approximately US$761,225 per kilometer and the design life is 20 years. The proposed works mainly includes reprocessing of existing base and surfacing materials and stabilize for use as sub-base, provide new base and surfacing structure for the 6.5 meters carriageway and 1.5 meters shoulders. An economic appraisal of the road was carried out as part of the preparatory design activities to determine whether the proposed investments are economically viable and the methodology and results are summarized below. The results for medium traffic growth rate demonstrate that with an EIRR of 15.2 percent and an NPV of US$21.5 million, the investment is viable. The proposed rehabilitation of Arusha - Minjingu road is in line with the National Transport Policy goals of population integration, increased regional and international trade, and regional equity improvement

A. Methodology

27. The economic analysis has been performed using the HDM-4 model - version 2.04. The model analyses the total transport costs of the road improvement and maintenance options that have been identified for the project. The identified options are compared with a "without project" or reference base case where a minimum of road maintenance and possibly, deferred rehabilitation required to keep the road in existence.

28. The costs and benefits taken into consideration by the model are for both vehicular and non-vehicular traffic, namely: 0 Costs of road rehabilitatiodconstruction (incl. cost of design, supervision, land acquisition and resettlement where required and environmental mitigation measures) 0 Residual value of the road at the end of the evaluation period 0 Maintenance costs VOCs and savings 0 Travel time costshavings to passengers and freight

29. Other exogenous costs and benefits, which are normally less quantifiable, are not analyzed by the model but have been considered separately where relevant. These exogenous costs and benefits include: Impact on the number and severity of road accidents. Due to insufficient data on the number and type of accidents on the project road, the Consultant has tried to address

82 separately, the critical issues related to the impacts on accidents from road upgrading as the relationship is not always unique and should be assessed from case to case. Induced economic development in the project areas and region, such as industrial, agricultural, tourist activities that were previously constraints. Direct employment effect from road upgrading and associated services during construction. Social benefits arising from the increased mobility of the population surrounding the project area including improved accessibility to health, education and other services.

30. Benefits such as reductions in the value of goods on transit and accident costs showed an insignificant contribution to the total benefits.

31. For the purpose of the economic evaluation, all costs and benefits are expressed in real resource values to the economy. Taxes, duties and most other transfer payments are deducted from market prices and costs and subsidies added back in.

32. The main future economic benefits expected from the improvement of existing roads are savings in economic vehicle operating and passenger time costs for normal traffic and diverted traffic.

33. The results of the economic evaluation are expressed in terms of EIRR, NPV discounted at 12 percent, Net Present Value over Cost Ratio (NPV/C) and First Year Rate of Return.

B. Data Collection

34. Input for the HDM model consist of a number of data ranging from technical road specification to economic cost prices on investments and maintenance, VOCs, time cost etc. Further, the cost of maintenance labor, crew wages and passenger time value are representing estimates from cities in the project area. Costs are expressed in economic terms based on financial prices expressed as market prices. The financial costs are converted to economic costs by subtracting taxes, levies and duties. The data has been obtained from TANROADS.

35. Vehicle Fleet Characteristics: The vehicle fleet characteristics presented in Table A9-7 are based on data obtained from TANROADS but updated based on experience from recent studies and on site visual verification of the vehicle fleet on the project road. The vehicle fleet characteristics are used as technical input to the HDM-4 modeling.

83 Table A9-7: The vehicle fleet characteristics

36. Road User Costs: TANROADS have established a standard RUC for the HDM-4 model for the various vehicle categories. In this evaluation, the vehicle fleet comprised of characteristic data for nine types of vehicles (cars; vans and pickups; small buses, large buses; small trucks; medium trucks, heavy trucks, articulated trucks and trucks & trailers) and these were applied.

37. Vehicle and tire prices: Prices on new vehicles have been presented for the nine vehicle categories and are based on information from dealers and importers as also verified from recent road studies.

38. Maintenance labor and crew costs: The Consultant collected information on the level of salaries for maintenance and crew in Tanzania in order to assess the likely unit costs for those categories. Verification has been obtained from recent studies carried out in the country and in neighboring counties. Generally the cost of maintenance is generally found about 60 percent higher for pick-ups, buses and trucks than for cars.

39. Value of time for passengers and freight: The value of time of passengers and freight used for the analysis is reflecting the average income levels of the owners of the vehicles which are substantially higher than the average. The time values being considered are reflecting also the salary levels in the project region of typical vehicle owners e.g. 4WD and cars, whereas the value of time for bus passengers is regarded considerable lower to reflect the average income level of the local population. The value of time for freight is reflecting the value of goods in transit.

40. Road Sections: For analysis purposes, the Arusha - Minjingu road is divided into five sections with relatively homogeneous road condition and geometic characteristics as shown in Table A9-8. The roughness measurements are based on bump integrator measurements carried out by the Consultant in September 2007.

84 Table A9-8: Characteristics of road sections

C. Rehabilitation and Maintenance options

41. Rehabilitation Options: From the engineering studies of the Arusha - Minjingu road, two rehabilitation options were identified for the economic evaluation and comparison, as follows: Option 1: Overlay with strengthening by crushed stone base (CRR) and 50 mm AC, 20 year design life Option 2: Reprocessing of the existing base course and bituminous surfacing plus new CRR & 5Omm AC, 20 year design life

D. Construction Costs

42. Quantities of major materials for each rehabilitation option were computed and are summarized in Table A9-9.

Option 1 Option 2 Overlay, 20 year design life Reconstruction, 20 year design life New AC thickness, mm 50 50 New AC total quantity, m’ 61,640 61,640 New CRR quantity, m’ 376,700 265,200 New CM subbase quantity, m3 19,000 19,000 Stabilized existing Davement. m3 0 131 .OOO

85 43. Table A9-10 summarizes the estimated construction costs (2007 prices) for the two alternatives considered:

Table A9-10: Construction Costs Option 1 Option 2 Overlay, 20 year design life Reconstruction, 20 year

Section 1 (km 0 - 6) 520,483 503,288 Section 2 (km 6 -17) 490,739 479,735 Section 3 (km 17 - 19) 470,969 467,978 Section 4 (km 19 - 69) 520,223 473,623 Section 5 (km 69 - 98) 396,196 358,487 All sections 517,015 481,406

44. Implementation Period: The implementation of the rehabilitation options on the project road is assumed to start in 2010 and last for 2.5 years to be completed by year 2013. The period prior to construction start will be for preparatory activities such as design, preparation of tender materials, and tendering and selection process for both supervision and construction. The economic period for analysis is total 20 years from end of construction in year 201 3.

45. Maintenance Strategies: The HDM model has been provided with estimated maintenance requirements and costs on the existing and the upgrade options. The maintenance strategies and corresponding annual costs have been estimated based on the deterioration of the road segments over time as described by the model, as a result of the impacts by traffic. Consideration for maintenance is based on updated information on unit cost estimates.

46. The maintenance works strategies include pothole patching and overlay and is in the HDM model set to be responsive maintenance works initiated according to set criteria of level of deterioration of the pavement. The maintenance strategies on the road segments are found adequate according to the HDM-4 generated roughness development on the segments.

47. Evaluation Approach: The economic evaluation is carried out based on the HDM-4 model (version 2.04) which compares costs of benefits for the various investment options over a period of time by comparing the "investment options" with the "base case", which basically only include maintenance that will be sufficient to keep the condition of the existing road at present standard.

48. A discount rate of 12 percent has been applied for the calculation of the NPV and all costs are measured in economic prices and expressed in US$.

49. Results of Economic Evaluation: The economic analysis is carried out for the road sections 1 - 7 on the Arusha - Minjingu road. In overall, the two options produced the EIRRs of 14.3 and 15.2 for Overlay and Reconstruction options respectively.

86 50. The results of the HDM-4 analysis are expressed in terms of Economic Internal Rate of Return (EIRR) using a discount rate of 12 percent, for a projection of medium traffic growth are presented in Table A9-11 below for all investment alternatives.

Table A9-11: EIRR Results for all investment alternatives Option 1 Option 2 EIRR (%) Reconstruction, 20 years Overlay, 20 years design life design life Section 1 17.4 18 Section 2 11.5 11.8 Section 3 11.2 11.3 Section 4 9 10.1 Section 5 8.7 9.9

51. From the above, Option 2 on pavement reconstructions for a 20-year design life was considered more advantageous, technically and economically.

52. The results of HDM-4 analysis, in terms of EIRR, NPV, NPVK and FYRR are presented in Table A9-12 below of medium traffic growth projection for all investment alternatives.

Table A9-12: Results of HDM-4 analysis, all indicators

G. Sensitivity and Risk Analysis:

53. Three different sensitivity analyses carried out to test the impact of the variation in some of the most important inputs resulted to positive results for the preferred option. These inputs are the construction costs, the traffic growth rates and VOC. Firstly, with cost increases of up to 30 percent, the preferred option had an acceptable EIRR of 12 percent while the decrease in cost by 30 percent resulted to an EIRR of 22 percent. Secondly, a similar scenario was observed with increased and decreased traffic of 20 percent in which EIRRs of 18.5 percent and 13.2 percent were obtained. Finally, the increase and decrease of VOC by 30 percent produced an EIRR of 18.5 percent and 12 percent respectively.

54. The sensitivity analysis demonstrates that the proposed investment is economically viable.

87 Component B: Improvement of Regional Airports (Bukoba, Kigoma, Tabora)

A. Background 55. An economic analysis was conducted for the three regional airports at Bukoba, Kigoma and Tabora, for their rehabilitation and upgrading to bituminous paved runways. The model for the analysis is the "Airport ERR Spreadsheet Model" (AESS), developed by Benjamin Dennis, Lead Economist at the Millennium Challenge Corporation in 2007.

B. Methodology 56. Growth for traffic was projected until 2027. Different growth rates for each airport were assigned as follows: (i) Bukoba: Bukoba is forecast to carry over 1.5 million passengers in total over the time period between 2008 and 2027. An initial growth rate of nine percent per annum is assumed, tapering off to four percent by 2027. (ii) Kigoma: The airport is forecast to carry roughly 1.1 million passengers over the entire period, with an initial assumed growth rate of 40 percent falling to the 3 - 8 percent range between 201 3 and 2027. (iii) Tabora: The total forecast number of passengers is less than 0.5 million, with an initial growth rate of 30 percent tapering off to three percent - five percent between 2013 and 2027.

57. Modal switches were not addressed in the model, and can be considered of lesser importance, since all three locations are relatively remote. Tabora has very difficult road access, and Kigoma is difficult to reach from the east. Bukoba has road and ferry access to Mwanza, however, over greater distances, such as the straight line distance of over 630 miles to DSM (and over 800 miles if measured by roadway), the only realistic mode of transportation is by air.

58. Categories of visitors were divided up into four groups, namely Business travelers, Tourists, visitors to friends and families, and govemment-related. Though surveys find much longer stays on average in Tanzania, a conservative seven days was assumed for each visit by tourists. For all airports, those visiting friends and family were expected to stay for five days, and business travelers for three. Using a 2001 survey, the passenger trips by purpose to each airport were allocated as shown in the table below:

Table A9-13: Traveler Categories Traveler Category Bukoba Kigoma Tabora Business 40% 35% 35% Tourist 3 0% 35% 35% Visiting friends and family 3% 1% 2% Government 22% 29% 22% Other 5yo 0% 6% Total 100% 100% 100%

59. The distribution was then refined and attached to a daily spending figure for 2008 as shown below, with an annual increase of two percent:

88 Table A9-14: Daily spending figures for 2008 Traveler Category Average expenditure Average length of per person per night stay Business $86.00 3 days Leisure & Holiday (tourist) $101.00 7 days Leisure & Holiday (package) $1 14.50 3 days Leisure & Holiday (non-package) $101.00 2 days Visiting friends and family $86.00 5 days Government $0.0 2 davs Other $86.00 0 days

60. In addition, an annual increase of two percent in freight tonnage have been assumed, with the following dollar values attached:

Table A9-15: Freight type Freight type US$ per ton International 24.00 Domestic commercial flight 18.00 Domestic non-commercial flight 29.00

61. The AESS also makes assumptions about new job creation and economic output as an added benefit. These have been valued at US$200 per annum per job, US$370 per ton of additional produce, both of which have a five percent annual growth rate. The following was observed:

(i) Bukoba has excellent potential for expansion of agricultural and business activities; however the highest potential for growth is in fishing.resources.

(ii) Kigoma has limited potential for expansion of business or industrial activities but has good infrastructure for the development of its agriculture and fishing

(iii) Tabora has good scope for the development of business and industry, but has small potential for major expansion in agriculture or fishing.

62. For Bukoba, a new terminal building is proposed as part of the project. Additional revenue stream allowances per passenger are assumed as follows:

89 Table A9-16: Revenue streams Revenue streams towards US$ per passenger Fuel Sumliers 2.0

Retailing 2.0 Food service 4.0 Parkine 0.3 Storage 0.2 Total 12.5

63. In estimating economic benefits, in general the ‘pessimistic’ scenarios where adopted [e.g. underestimating average length of visitor stay and amount of spending] so as to not overstate the benefits resulting from individual projects. Thus, conservative assumptions were adopted throughout the analysis.

64. Scheme costs were included, such as: works construction; scheme preparation and supervision costs; and maintenance costs over the 20 year lifetime of the schemes. Given the volatility of raw material prices, with recent large increases and subsequent large decreases, coupled with a general down turn in construction activity associated with the current global economic situation, it is difficult to predict general civil engineering costs over the next few years. Estimated costs are thus considered to be ‘appropriate’, and based on the current cost of similar works tendered in December 2008 on a fluctuating price basis.

65. The proposed interventions for the three airports are summarized in the table below.

90 Bukoba Kigoma Tabora

Preliminaries 2,037,147 3,083,711 2,826,149 Site Clearance and Earth Works 5,125,898 Drainage I 730,432 I 1,719,809 I 2,148,493 Works to Existing Runway I 3,609,721 I 13,388,361 I 8,460,485 ~ ~_____ ~~~ Runway Extension 1,325,445 New Taxiway and Apron 1,244,807 Environmental I 208,778 I 188,276 I 188,276 ~~ ~ ~ Perimeter Security Fencing 138,O 14 Access Roads and Car Parks 188,508 Buildings - Terminal I 2,288,983 I I Sub-station 6 12,2 19 Sewage Treatment Package 34 1,566 Dayworks (all provisional) I 199,101 I 143,261 I 143,261 Subtotal 18,050,619 18,523,418 13,766,664 Contingency 15% 2,707,593 2,778,513 2,065,000 Total 20,758,212 2 1,301,93 1 15,83 1,664

C. Results 66. The sources of economic benefits (visitor spending; freight; terminal facilities; fishing, agriculture, industry and business), at a 12.0 percent discount rate, are summarized in the table below. Table A9-18: Sources of economic benefits

Return measure Bukoba Kigoma Tabora EIRR 15% 23% 15% Benefit-Cost (BK) ratio 2.17 3.07 2.41 Net Present Value US$20.6 mil US$42.1 mil US$22.2 mil

67. As seen in the breakdown of benefits below, the major benefits at all locations are derived from visitor expenditure, generally greater than 80 percent of the total. The other significant factor is economic growth. Increased revenues from freight movements and terminal facilities contribute smaller proportions of overall benefits.

91 Table A9-19: Breakdown of economic benefits

Visitor spending 80.1% I 81.2% I 88.8% Freight 0.1% 1.3% 0.1% Terminal facilities 6.7% 0.0% 0.0% Fishing, agriculture, industry and business 13.1% 17.5% 11.1% Total 100% 100% 100%

92 Annex 10: Safeguards Policy Issues TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

1. The potential negative environmental and social impacts associated with this project include: dust pollution, noise/vibration, soil and water pollution, creation of water-borne vectors, migration of animals across the roads, an increase in the spread of Human Immunodeficiency VirudAcquired Immunodeficiency Syndrome (HIV/AIDS) and Sexually Transmitted Infections (STIs), loss of vegetation, waste production, resettlement and loss of employment and income. The Borrower has prepared several safeguards instruments to address the potential impacts, including a sector, as well as sub-component level environmental assessments (EAs) as outlined below.

2. At the sector level, the Borrower has prepared a Sector Environmental Assessment for the Transport Sector Investment Program, as well as Environmental Guidelines that help to: (i) Introduce environmental considerations into decision making early, before project location and scale decisions have been made; (ii) Allow decision makers to focus on the environmental effects of strategic choices, before specific projects are considered; thus allowing the Borrower to consider a broader range of alternative proposals and mitigation measures as opposed to project- level EA; (iii) Allow for the systematic consideration of cumulative and broad-scale (regional and global) environmental effects; and (iv) Provide a mechanism to incorporate into decision making considerations related to sustainable development.

3. At component level, the Borrower has prepared Environmental and Social Impact Assessments (ESIAs) for the respective sub-projects which are the rehabilitation of the Korogwe- -Same and Arusha-Minjingu roads, as well for the improvement of the Bukoba, Kigoma and Tabora airports. These have been reviewed and approved by the Bank for disclosure in-country and at the Bank’s Infoshop. This was done on January 26, 2010. Furthermore, a Resettlement Policy Framework (RPF) called Resettlement and Compensation Guidelines of February 2009 of the Ministry of Infrastructure Development (MoID) was disclosed on February 2, 2010 at the Infoshop of the Bank. All Resettlement Action Plans (RAPS) will follow these guidelines.

4. Overall responsibility for implementation of environmental and social impact mitigation measures lies with Tanzania National Roads Agency (TANROADS) and Tanzanian Airports Authority (TAA). TANROADS has an experienced social and environmental unit being part of its Directorate of Planning; whereas TAA is in the process of establishing one. These units will be required to report twice a year on progress of the implementation of the Environmental and Social Management Plan (ESMPs) throughout the project period. The ESMP implementation reports will be part of the bi-annual project progress reports (BPR). MoID has a Division of Safety and Environment (DSE) which is responsible for sector policy setting and oversight in respect of environmental and safety matters.

93 5. Below is the component level summary of the environmental and social issues and respective proposed mitigation measures for each.

Component A: Rehabilitation of Paved Trunk Roads

6. The ESIAs conducted for each of the two trunk roads outline the potential positive and negative impacts arising from the proposed,interventions. However, the ESIAs also state that all impacts can be mitigated through appropriate actions as outlined in respective ESMPs.

Korogwe-Mkumbara-Same Road

7. Stakeholder impacts: The ESIA of the sub-project followed a consultation process that involved various stakeholders at national, regional, district, and community levels. The important stakeholders included professionals from relevant institutions such as the National Environmental Management Council (NEMC), TANROADS, and District Councils. Others were Ward Executive Officers and local community members in project affected areas. Local non- governmental organizations (NGOs) such as the Same Agriculture Improvement Programme and Same-Mwanga Environmental Conservation Advisory Office were also consulted. The professionals consulted provided their views about the project and helped the consulting team with secondary data. The public consultation process identified a number of issues raised by various stakeholders and the local community members fkom some selected wards. The majority of the people appreciated that the project will have some benefit to them in terms of employment creation and income generation. Other positive benefits of the project are reduced vehicle maintenance and operation costs due to improved road condition and increased tourism activities, as well as faster and more comfortable journeys.

8. There were also negative impacts identified during the assessment. Issues of major concern to this project that were identified are soil erosion and sedimentation of road pavement, road safety issues, and HIV/AIDS transmission. Although the project is going to have a number of negative impacts, most of them are going to be mitigated through good engineering practice, and have been taken into account in design and bidding documents. The ESIA was cleared and disclosed on July 30,2007.

9. Implementation and monitoring: implementation of impact mitigation measures is the responsibility of TANROADS, the contractor, and the supervising engineer in collaboration with other stakeholders as indicated in the ESMP. The contractor will be responsible for implementation of environmental and social mitigation measures under the supervision of the Resident Environmental Officer from TANROADS. This is to ensure that technical and environmental guidelines, as well as plans are followed and implemented by the contractor as required by the Borrower’s laws and guidelines, as well as Bank Safeguards Policies.

10. Resettlement Action Plan: No resettlement was identified in the ESIA. Though the road is widened, all such widening takes place within the existing right of way and no encroachment as encountered. Any resettlement that may be required (for example, for the contractor’s camp) will follow the established Resettlement and Compensation Guidelines of MOD.

94 Arusha-Minjingu Road

11. Stakeholders and Impacts: The ESIA study involved identifylng and classifylng different categories of interested and affected parties and application of appropriate consultation methodology for each category to obtain information about impacts. Important stakeholders included the proponent (TANROADS), the Central Government and environmental regulators, the local government authorities including the district councils of Arusha, Arumeru, Monduli and Babati Rural, as well as the Arusha Municipal Council and affected communities.

12. One of the particular issues that was raised in the ESIA was the migration of animals across the road between the Tarangire and the Lake Manyara National Parks. A number of special measures are proposed in the respective EMP that will reduce the risk of collisions between vehicles and animals, including signing and speed reduction measures.

13. No resettlement is required on this road.

Component B: Improvement of Regional Airports (Bukoba, Kigoma, Tabora)

14. The Environmental and Social Impact Assessments (ESIAs) conducted for each of the three airports, viz. Bukoba, Kigoma and Tabora, outline the potential positive and negative impacts arising from proposed respective interventions and recommend measures to mitigate those impacts. All three ESIAs state that all impacts can be mitigated through appropriate actions as outlined in respective ESMPs. Below are outlines of individual airport project impacts, mitigation measures and ESMPs.

Bukoba Airport

15. Stakeholders and Impact: consultations were held with a wide variety of stakeholders. The key stakeholders identified included central Government Ministries, Departments and Agencies, Tanzania Airports Authority (TAA), Kagera Regional Secretariat and Bukoba District Commissioner’s Office, local government authorities (Bukoba Municipal council), and local stakeholders affected by the project including residents of Miembeni, Pepsi and Nyamukazi sub- Wards. These consultations included meetings as well as a public assembly in the project area.

16. The main potential negative impacts of the project include: water drainage into airport grounds; land take which will require demolition of properties and the need for relocationhesettlement, raises issues of faidtimely compensation; blocked access to roads due to airport expansion; potential pollution of Lake Victoria from construction waste; and degradation at point sources of construction materials. Potential positive impacts of the project include: reduced air transport costs due to increased competition; increased goods and services to BukobaKagera from neighboring regions; reduced waiting times at both Bukoba and Mwanza airports; employment and income opportunities to local employees and service providers during airport construction and operation; increased tourism to Bukoba and Kagera region; and induced developments and spin-offs from increased investment in the region. The majority of stakeholders accepted the project.

17. Due to the small extension of the airport (by 120 meters) seven households needed to be resettled. A RAP was prepared and was disclosed in-country in April 2009 and at the Infoshop 95 on March 22, 2010. The RAP was implemented in May 2009. The Bank social specialist has verified that this was done in line with OP4.12. Kigoma Airport

18. Stakeholders and impacts: consultations were held with a wide variety of stakeholders. The key stakeholders identified included central Government Ministries, Departments and Agencies, TAA, Kigoma Regional Secretariat and Kigoma District Commissioner’s Office, local Government authorities (Kigoma- Municipal council), and local communities that are likely to be affected by the project including residents of Businde, Machinjioni and Mejengo sub- wards. These consultations included one-to-one discussions, stakeholder consultation meetings, opinions and information solicited through public notices posted at strategic points, as well as a public assembly in the project area.

19. The main negative impacts associated with the airport project include: effects of vibrations from heavy aircrafts to nearby buildings; relocation of a burial site. However, the positive impacts of the project are also identified, generally as a boost to stimulate investment and opportunities in the region. Overall, the majority of the stakeholders expressed support for the project.

20. Resettlement Action Plan: No resettlement was identified in the ESIA. Any resettlement that may be required will follow the established Resettlement and Compensation Guidelines of MoID.

Tabora Airport

21. Stakeholders and impacts: consultations were held with a wide variety of stakeholders. The key stakeholders identified included central Government Ministries, Departments and Agencies, TAA, Tabora Regional Secretariat and Tabora District Commissioner’s Office, Tabora Municipal council (Municipal Chairperson and Municipal Committees - Environment and HIV/AIDS). These consultations included meetings as well as a public assembly in the project area.

22. The potential negative impacts of the project were identified as: conflict over land and airport boundaries (52 families claim to rightfully own land which has been designated for airport expansion, and this dispute is still pending); clearance of natural bush-land; and impacts to the railway line through storm water drainage from the airport. Potential positive impacts identified include expected benefits such as reduced air travel fare and contribution to the economic development of Tabora region. The majority of stakeholders expressed support for the project.

23. Resettlement Action Plan: No resettlement was identified in the ESIA. Any resettlement that may be required will follow the established Resettlement and Compensation Guidelines of MoID.

Component E: Emergency Road and Bridge Repair

24. Prior to appraisal, Component E, emergency repairs of roads and bridges, was added to the project under application of OP8.00, which allows for streamlined ex-ante procedures. These 96 works are exclusively to restore the ex-ante condition of flood affected parts of roads and bridges. It will be ensured that the contract documents used for the particular works will contain appropriate environmental clauses aiming at minimizing negative environmental impacts of the works. During supervision the Bank’s environmental specialist will visit some of the site to ensure that these clauses are applied appropriately.

Impacts and Proposed Mitigation Measures

25. The ESMPs have been prepared for the implementation of mitigation measures for each of the works contracts. In each case, the ESMP shall involve two main actors: TANROADS or TAA and the respective contractor. A summary of expected impacts and proposed mitigation measures is presented in Table A10-1 below.

Table A10-1: Environmental and Social Management Plan (ESMP) ENVIRONMENTAL MITIGATION MEASURES ISSUESLMPACT

1. Dust pollution residential areas to minimize dust.

Vehicles delivering construction materials should be covered to avoid spillage.

Concrete mixing equipment should be well sealed, and vibrating equipment should be equipped with dust-removal device.

Operators should pay attention to their health by wearing dust protection masks. 2. Noiselvibration Workers in vicinity of strong noise should wear earplugs and helmets and their working time should be limited. In construction sites within residential areas, noisy construction should be stopped during the night hours (6 pm-6 am).

Maintenance of machinery and vehicles should be enhanced to keep their noise at a minimum.

Contractor must follow procedures for noise abatement as prescribed in the Standard Specifications for Road Works (Section 1709). 3. Soil and water Measures must be taken at construction sites I borrow pits and quarry sites by providing pollution solid waste collection I garbage tanks and sanitation facilities.

Garbage should be collected in a tank and disposed of periodically. Avoid construction of workers camp site facilities close to surface water sources.

Borrow pit / quarry sites and camp sites, including temporary work places must be provided with sanitary facilities (toilets) and must be located far from water sources.

The facilities must be properly maintained and satisfactorily decommissioned after the project.

Solid and liquid waste must be handled as prescribed in the Standard Specification for Road Works (Section 1713)

Solid waste resulting from road construction works could be disposed of as prescribed in the Standard Specification of Road Works (Section 1713) 97 ENVIRONMENTAL MITIGATION MEASURES ISSUESlIMPACT 1. Destruction of Use a water pump to haul water from the river / stream at a distance of not less than 50 m stream / river bank from the river / stream bank. vegetation Contractor must minimize destruction of stream / river bank vegetations by avoiding unnecessary cuttings / excavations during construction.

Bare areas around the stream / river banks must be planted with grass / shrubs immediately after construction 5. Creation of Drain and restore all borrow pits before abandonment. breeding sites for water borne vectors Get the views of the local communities to determine whether a borrow pit should be (e.g. mosquitoes) retained for use as source of water, especially in drought stricken areas. In case they are to be retained they should be properly designed for the intended purpose and that should be included in to the Contract conditions for contractors. 6. Destruction of Avoid damage to existing infrastructure and social service utilities. But in case damage infrastructure / cannot be avoided it is important to carry out survey and notify the general public of any social service possible interruptionsprior to commencement of works. Arrangement must be made utilities with responsible authorities before moving or altering the existing infrastructure and/ or service utilities.

The damaged infrastructure/ service utilities must be restored immediately to avoid inconveniences to the public. The contractor must follow the prescribed procedures in the Standard Specification for Road Works (Section 1202) 7. Disruption of Identify potential location of passageways for pedestrians and NMT and designed them to pedestrians and meet the needs of pedestrians and NMT. NMT 8. Increased Locate the construction camp site far from human settlements and employ a large incidence of number of unskilled laborers from within the local communities to minimize number of HIV/AIDS and STIs newcomers.

Involve the local NGOs and government agencies already active in the project area in awareness creation and educating the local communities on HIV / AIDS and STIs prevention.

Some funds must be provided by TANROADS during project implementationto reinforce the effort being done by local NGOs and government agencies in the project area on HIV / AIDS campaigns. The funds should also help the local NGOs to create awareness and educate the contractor’s workforce on HIV / AIDS and STIs prevention. 9. Construction Safety signal devices should be installed to ensure safety during construction. related accidental risks Effective safety and warning measures should be taken to reduce accidents.

Construction workers must be equipped with helmets and other safety gears.

The management and use of blasting materials should be done by contractor in strict conformity with the safety requirements for public security as stipulated in the Mining Act of 1998 and Mining (Safety and Occupational Health) Regulation of 1999. The Contractor must follow procedures for handling explosives as prescribed in the Standard Specificationsfor Road Works (Section 1222) 10. Disruption of Traffic jam during construction should be minimized through traffic management plan traffic flow during and use of road signs. Contractor should deploy personnel at crucial points to guide :onsmction traffic movement.

Involvement of Traffic Officers should also help to ensure smooth movement of traffic during construction.

98 ENVIRONMENTAL I MITIGATION MEASURES

B. ConstructiodOperationPhase 1. Destruction of In slopes and suitable places along the roadside, grass must be planted, and retaining wall, adjacent land use and water intercepting ditches, and masonry rubbles must be built to prevent damage to properties due to adjacent properties. increased runoff, flooding and soil Temporary and permanent drainage systems must be designed to minimize the impact on erosion adjacent properties during construction and operation, respectively. 2. Soil erosion and Problem of soil erosion due to community activities can be mitigated through sedimentation of construction of dam on the upstream side beyond the road pavement and planting of road pavement along vegetation. Hedaru-Chekelei road section Other measures are to educate local communities on good cultivation practice such as agro-forestry and contour farming. This will require provision of some funds to finance involvement of local NGOs that are active in the area. These NGOs should help to educate the local communities on environmental protection and conservation measures such as tree planting, agro-forestry, and contour farming. They will also educate them on alternative source of house construction materials, which do not use wood fuel.

Funds should also be provided to finance on the job training for Road Inspector from TANROADS to participate in the environmentalprotection and soil conservation activities and general environmental monitoring. 3. Soil erosion and Road run off must be channeled to natural water course through side drains in which sedimentation of baffles and rip rap are placed to check water velocity. watercourses Drains must be included at short intervals to cope with runoff.

Adequate number of culverts must be designed and placed in such a way that storm water does not damage adjacent land use below the road bed. 4. Traffic related Put road signs to warn motorists of crossing livestock and pedestrians. accidents Whenever possible use box culverts as road underpass in appropriate locations for use by crossing livestock.

Provide clearly displayed name boards for each village at entrance and exits.

Impose speed limits and reinforced by rumble strips at the entrance in village centers.

Speed humps should be used sparingly, since they constitute hazards for road users. However, they could be justified near schools and dispensaries but should be clearly marked as pedestrian crossings.

Allocate some funds to finance involvement of local communities residing along the road alignment to participate in road safety campaigns during project implementation. 5.Risk of accidents All borrow pits and quarry sites must be fenced off during construction to prevent access to livestock and by livestock and people. people in borrow pit and quarry sites All borrow pits must be restored by refilling with overburden before abandonment.

Operations of borrow pits and quany sites must be done as prescribed in the Standard Specificationsfor Road Works (Section 3400) and Mining Regulation4

C. Decommissioning Stage I. Restoration of I In some areas, especially in dry areas the borrow pits could be used a source of water

99 ENVIRONMENTAL MITIGATION MEASURES ISSUES/IMPACT borrow supply for the local communities and their livestock. In this case the contractor should design the borrow pits to suit the purpose.

Some times the borrow pits could be retained for future use as source of road rehabilitation I construction materials. These borrow pits should be fenced off to prevent access by people, especially children and livestock

In case no future use is expected of the borrow pits should be restored by backfilling and planting with trees I shrubs. ?.Construction All construction equipment I vehicles and machinery should be removed immediately equipment I from the site at the end of defects liability period. vehicles I machinery 5. Workers’ The workers’ campsite and other facilities should be removed at the end of defect liability campsite, period. workshops and other associated The removed materials should be transported and kept in safe place for use by the facilities. Contractor in other works.

However, in some cases the workers’ campsite can be retained for use by the local communities as a school or dispensary as the case may be. 1. Site clearing All debris, oils, grease and solid waste should be removed from construction sites

The area should be cleaned and all domestic wastes, debris I waste metals, grease and oils must be cleaned up and disposed of in a manner approved by the Resident Engineer.

100 nvironmental and Social Impacts and Measures that are Specific to the Road Projects

dam should be constructed on the upstream side beyond the road pavement anc

ad pavement along Hedaru- hekelei road section

tree planting, agro-forestry, contour farming and alternative source of house nstruction materials.

also be provided to finance on the job training for Road Inspector

igratory routes and increased estrict intensity of construction works close to Tarangire.

mit construction activity to outside migratory period.

out a road safety education campaign during and after the project; targeting

officers should maintain surveillance to control careless driving and

26. Costs for the mitigation measures are estimated at about 3 percent of total construction costs. All respective activitiedworks are part of the bill of quantity.

Implementation and Monitoring

27. The ESIAs include Environmental and Social Monitoring Plans, which provide for mitigation of identified environmental impacts, as well as dealing with ad hoc or unforeseen issues which will need to be mitigated. The responsibility for their implementation and monitoring will be shared between TANROADWTAA, the contractor, and the Local Governments throughout the project stages. NEMC has the responsibility to ensure that this 101 happens by ensuring that ESMPs and Monitoring Plans provide for adequate and sustainable mitigation of environmental and social impacts, and environmental audits are subsequently carried out to that effect. However, TANROADWTAA shall be responsible for overall implementation of the ESMP for each contract.

Application of Operational Policy for Cultural Property (OP4.11)

28. It has been decided that in particular major roads works contracts should routinely trigger the above policy. Construction activities might affect potential physical culturalhistorical sites of national importance. During appraisal it was agreed that the DSE of MoID (with funding from the credit) will hire an archeologist who will draw up guidelines for the application of OP4.11 (Cultural Property) for the transport sector in Tanzania, including typology of finds in Tanzania and actions in case of finds. Meanwhile ESMP of the various work contracts include simple guidelines and actions to be taken in case of chance finds. The supervising consultant will ensure that the contractor will implement appropriate measures accordingly. The consultant/contractor will report such finds to the local authorities and to the National Museum.

102 Annex 11: Project Preparation and Supervision TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

Planned Actual PCN review 06/25/2009 06/25/09 Initial PID to Infoshop 06/25/2009 07/20/2009 Initial ISDS to Infoshop 06/25/2009 10/07/2009 Appraisal 03/08/2010 03/08/20 10 Negotiations 03/22/2010 03/30/20 10 Board/RVP approval 05/27/2010 Planned date of effectiveness 09/27/2010 Planned closing date 06/30/2015

Key institutions responsible for preparation of the project:

TANROADS Tanzania Airports Authority Ministry of Infrastructure Development

Bank staff and consultants who worked on the project included:

Name Title Unit Dieter Schelling Lead Transport Specialist AFTTR Yonas Mchomvu Transport Specialist AFTTR Grace Mayala Team Assistant AFCE 1 Kavita Sethi Sr. Transport Economist AFTTR Ani1 S. Bhandari Sr. Adviser AFTTR Juan Gaviria Sector Leader (Peer Reviewer) AFTTR Andreas Schliessler Sr. Transport Economist ECSS5 Ann Raynal May Information Specialist AFTTR Luis M. Schwarz Sr. Finance Officer CTRFC Heinrich Bofinger Consultant AFTTR Gisbert Kinyero Procurement Specialist AFTPC Donald Mneney Sr. Procurement Specialist AFTPC Alexander Birikorang Financial Management AFTFM Bella Lelouma Diallo Sr Financial Management Specialist AFTFM Philip Beauregard Sr. Counsel LEGAF Naima Hasci Sr. Social Scientist ECSS4 Helen Shahriari Sr. Social Scientist AFTCS Lungiswa Thandiwe Gxaba Sr. Environmental Specialist AFTEN Theonestina Kaizaboshe Consultant AFTTR Godfiey Kamukala Consultant AFTTR Francis Tsoxo Marmo Consultant AFTTR Nina Jones Program Assistant AFTTR Farida Khan Operations Analyst AFTTR

103 Bank funds expended to date on project preparation: 1. Bank resources: 1549k 2. Trust funds: 57k 3. Total: 1607k

Estimated Approval and Supervision costs: 1. Remaining costs to approval: 45k 2. Estimated annual supervision cost: 110k

104 Annex 12: Documents in the Project File TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

Analytical and consultative reports on the basis of which this project wasprepared

e MoID - 10 Year TSIP Phase I, 2007/08 - 201 1/12 e MoID - Short TSIP (3-year rolling plan FY09/10 - 201 1/12) e MoID - National Road Safety Policy, September 2009 e TANROADs - Engineering Design Report Korogwe - Same Road e TANROADs - Engineering Design Report Arusha - Minjingu Road e TANROADs - ESIA Report Korogwe - Same e TANROADs - ESIA Report Arusha - Minjingu e TAA - Initial Findings on Project Preparation Mission for the Rehabilitation of Three Airports (Bofinger, May 20091 e TAA - Feasibility Study and Detailed Design for the Rehabilitation and Upgrading of Seven Airports - Engineering Design Report - Financial and Economic Analysis (Jan 09) e TAA - Engineering Design Report - Tabora Airport e TAA - Engineering Design Report - Kigoma Airport e TAA - Engineering Design Report - Bukoba Airport e TAA - ESIA Report - Tabora Airport e TAA - EIA Report - Kigoma Airport e TAA - EIA Report - Bukoba Airport e TAA - Resettlement Action Plan - Bukoba Airport e PMORALG - Local Government Transport Program Phase 1, 2007-20 12 Official Project Documents 0 Procurement Capacity Assessment TANROADS 0 Procurement Capacity Assessment TAA 0 Procurement Capacity Assessment MoID 0 Financial Management Assessment, TSSP, March 23,2010 0 Minutes of the PCN Meeting of June 25,2009 0 Minutes of the Quality Enhancement Review Meeting of January 27,201 0 0 Minutes of the Decision Meeting of March 1,201 0 0 Integrated Safeguard Data Sheet (final), March 30,2010 0 Letter of Development Policy of April 1 201 0 0 Minutes of Negotiations of April 1 201 0

Relevant By-laws 0 TANROADS Establishment Order 0 TAA Establishment Order

105 Annex 13: Statement of Loans and Credits TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT

Difference between expected and actual Original Amount in US$ Millions disbursements ProjectID FY Purpose mm IDA SF GEF Cancel. Undisb. Orig. Fm. Rev?d PO87256 2006 TZ-PRSC 3 DPL (FY06) 0.00 150.00 0.00 0.00 0.00 153.77 0.00 0.00 PO82492 2006 TZ-Marine 62 Coastal Env Mgmt SIL 0.00 51.00 0.00 0.00 0.00 49.68 0.00 0.00 (FYW PO70736 2005 TZ-Loc Govt Supt SIL (FYOS) 0.00 52.00 0.00 0.00 0.00 50.63 10.56 0.00 PO85786 2005 TZ-SOCAction Fund 2 SIL (FYOS) 0.00 129.00 0.00 0.00 0.00 137.39 -0.33 0.00 PO71014 2004 TZ-HIV/AIDS APL (FY04) 0.00 0.00 0.00 0.00 0.00 66.65 19.01 0.00 PO74624 2004 TZ-Emergency Power Supply (FY04) 0.00 43.80 0.00 0.00 0.00 0.00 -30.40 0.00 PO57234 2004 TZ-GEF Eastern Arc Forests SIL (FY04) 0.00 0.00 0.00 7.00 0.00 7.00 3.33 0.00 PO78387 2004 TZ-Central Transp Comdor Prj (-04) 0.00 122.00 0.00 0.00 0.00 106.72 51.08 0.00 PO82335 2004 TZ-Health Sec Dev 2 (FY04) 0.00 40.00 0.00 0.00 0.00 28.56 29.94 0.00 PO83080 2004 TZ-Sec Edu Dev Prj (FY04) 0.00 123.60 0.00 0.00 0.00 97.62 -0.13 0.00 PO59073 2003 TZ-Dar Water Suply L Sanitation (FY03) 0.00 61.50 0.00 0.00 0.00 42.34 10.43 0.00 PO67103 2003 TZ-Partic Agr Dev L Empwrmnt SIL 0.00 56.58 0.00 0.00 0.00 49.27 6.49 0.00 0-03) PO73397 2002 TZ-Lower Kihansi Env Mgmt TAL 0.00 6.30 0.00 0.00 0.00 2.95 1.26 0.00 (FY02) PO02797 2002 TZ-Songo Gas Dev &Power Gen (FY02) 0.00 183.00 0.00 0.00 0.00 98.67 71.18 0.00 PO58706 2002 TZ-FOWt CO~S~~V62 Mgmt SJL (FY02) 0.00 31.10 0.00 0.00 0.00 29.76 15.77 0.00 PO47762 2002 TZ-Rural Water Sply (FY02) 0.00 26.00 0.00 0.00 0.00 22.05 12.54 0.00 PO69982 2001 Regional Trade Fac. hj.- Tanzania 0.00 15.00 0.00 0.00 0.00 8.84 7.35 0.00 PO49838 2000 TZ-Privitization L Priv Sec Dev (FYOO) 0.00 45.90 0.00 0.00 0.00 27.32 26.15 0.00 PO57187 2000 TZ-FIDP 2 (FYOO) 0.00 27.50 0.00 0.00 0.00 9.59 8.38 1.56 PO60833 2000 TZ-Pub Sec Reform Prgm (FYOO) 0.00 41.20 0.00 0.00 0.00 12.23 -30.66 0.00 PO47761 1999 TZ-Tax Administration (FY99) 0.00 40.00 0.00 0.00 0.00 10.70 6.31 -0.54 PO02789 1998 TZ-H~rnanRe DW 1 (FY98) 0.00 20.90 0.00 0.00 0.00 0.46 0.55 0.00 PO46837 1997 TZ-Lake Victoria Env (FY97) 0.00 10.10 0.00 0.00 0.00 1.85 -6.50 1.26 PO02770 1994 TZ-Roads 2 (FY94) 0.00 170.20 0.00 0.00 63.53 13.44 81.87 36.28 Total: 0.00 1,446.68 0.00 7.00 63.53 1,027.49 294.18 38.56

106 TANZANIA STATEMENT OF IFC's Held and Disbursed Portfolio In Millions of US Dollars

Committed Disbursed IFC IFC

FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 1997 AEF Aquva Ginner 0.68 0.00 0.00 0.00 0.68 0.00 0.00 0.00 200 1 AEF Boundary Hi1 0.20 0.00 0.00 0.00 0.20 0.00 0.00 0.00 1998 AEF Maji Masafi 0.04 0.00 0.00 0.00 0.04 0.00 0.00 0.00 200s BBL 10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2002/0s Exim Bank 0.00 0.00 3 .OO 0.00 0.00 0.00 0.00 0.00 1996 Mp 0.12 0.00 0.00 0.00 0.12 0.00 0.00 0.00 2000 IOH 2.10 0.00 0.00 0.00 2.10 0.00 0.00 0.00 2000 NBC 0.00 10.00 0.00 0.00 0.00 3.63 0.00 0.00 1993 TF'S (Tanzania) 3.06 0.00 0.00 0.00 3.06 0.00 0.00 0.00 1991 TF'S Zanzibar 0.18 0.00 0.00 0.00 0.18 0.00 0.00 0.00 1994 Tanzania Brewery 0.00 3.43 0.00 0.00 0.00 3.43 0.00 0.00 Totalmrtfolio: 16.38 13.43 3 .OO 0.00 6.38 7.06 0.00 0.00

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic.

Total pending commitment: 0.00 0.00 0.00 0.00

107 Annex 14: Country at a Glance TANZANIA: TRANSPORT SECTOR SUPPORT PROJECT Sub- POVERTY and SOCIAL. Saharan Low Development diamond. Tanzanla Africa income 2004 Population,mid-year (millions) 36.6 78 2,338 Life expectancy I GNI per capita (Atlas method, US$) 330 600 50 GNI (Atlas method, US$ billions) P.1 432 184 I Average annual growth, 1998-04

Population (%) 2.2 22 18 Laborforce (%) 2.3 10 2.1 Most recent estlmate (latest year available, 1998-04) Poverty (%of population below nationalPO vertyline) 36 Urban population(%of totalpopulatlon) 36 37 31 Life expectancy at birth (pars) 43 46 58 hfant mortallty(per 7,OOOlive births) a4 01 79 Child malnutrition (%ofchildren under5) 29 44 Access to improvedwatersource Access to an improvedwatersource(%of population) 73 58 75 Literacy (%of populationege 259 69 65 61 Gro ss primary enro llment (%of scho ol-age populetio n) a4 95 94 -Tanzania Male 66 02 01 Female 63 88 88 KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1984 1994 2003 2004 Economlc ratlos' GDP (US$ bHlions) 4.5 0.3 0.9 Gross capital fonationlGDP 24.6 8.6 82 Trade Exports ofgoods andservkeslGDP 20.6 8.3 8.6 Gross domestlc savingslGDP 16 9.5 8.6 Gross nationalsavingslGDP 6.5 9.3 8.5

Current account balance1GDP .. -23.6 -9.9 -0.3 Domestic Capital hterest paymentslGDP 14 0.3 0.6 savings formation Total debtlGDP .. M.6 73.0 72.8 Total debt SeNiCeleXpOrtS 26.5 215 5.2' P2 1 Present value of debUGDP 210 Present value of debUexports Pi7 Indebtedness 1984-94 1994-04 2003 2004 2004-08 (average annuel growth) -Tanzania GDP 2.6 5.0 7.1 6.3 6.7 GDP percapita -0.5 25 5.0 4.3 4.9 I-Lowincome group

STRUCTURE of the ECONOMY lsg4 2003 Growth of capltal and GDP (X) (%ofGDP) Agriculture .. 45.0 45.0 44.6 2o hdustry .. 8.1. 8.4 Manufacturing .. 7.4 7.2 services .. 39.9 36.6 36.6 o Household final consumption expenditure .. 812 79.1 77.6 General gov't final consumptionexpenditure .. n.1 n4 D A -,, Imports ofgoods andservices .. 43.6 27.4 28.9 . -GCF -GDP

1984-94 1994-04 2003 (average annual growth) Agriculture .. 3.9 4.0 hdustry .. 7.3 0.2 Manufacturing .. 5.7 8.6 services .. 4.9 5.6 6 A Householdfinal consumptionexpenditure 17 4.7 -0.9 General gov't final consumptionexpenditure .. 14.6 28.1 24.4 Gross capnalformation .. 4.9 4.6 9.1 hnports of goods end sewices .. ' 2.1 1.1 22

108 Tanzania

PRICES and GOVERNMENT FINANCE 1984 1994 2003 2004 Inflation (%) Domestic prices I (%change) Consumer prices 36.1 33.1 4.4 5.0 Implicit GDP deflator 322 5.7 4.0 Government finance (%of GDP, includes current grants) Current revenue 0.5 114 12.2 Current budget balance -18 -2.5 -3.6 -GDP Overall surplusldeficit -5.1 -8.0 -9.7 deflator --%&PI

TRADE 1984 1994 2003 2004 Export and import levels mill.) (US$ millions) u(US$ Totalexports (fob) 388 486 995 1208 Coffee 154 18 40 47 bm T I Cotton 50 05 40 47 Manufactures 33 77 72 79 .m Total imports (cif) 856 1344 2,04 2,425 Food 83 97 186 25 Fuel and energy 230 124 375 470 Capital goods 336 597 855 975 0 g8 99 00 01 02 03 Export price index (2000=WO) 85 88 09 VI import price index (2000=WO) 04 145 I13 135 Exports B Inports Terms of trade (2000-WO) 82 61 94 90 I

BALANCE of PAYMENTS 1984 1994 2003 2004 Current account balance to GDP (%) (US$millions) Exports of goods andservices 491 855 1691 1961 Imports ofgoods andservices 920 2242 2,682 3,038 Resource balance -429 -1367 -991 -1078

Net income -73 -154 -54 -50 Net current transfers 41 465 29 12 Current account balance -460 -1076 -1013 -115 Financing items (net) 495 a183 1447 1347 Changes in net reserves -35 -07 -431 -231 Memo: Reserves including gold (US$ millions) Conversion rate (DEC, /ocal/US$) 15.3 509.6 1038.4 1089.3

EXTERNAL DEBT and RESOURCE FLOWS 1994 2003 2004 1984 :omposition of 2004 debt (US$ mill. (US$millions) Total debt outstandingand disbursed 7,225 7246 7,513 7,901 IBRD 206 114 3 0 G: 838 IDA 518 1998 3,474 3,913

Total debt service 130 184 92 250 IBRD 31 42 3 3 IDA 5 25 29 89 Composition of net resourceflows Official grants 291 585 929 Official creditors 324 132 459 326 Private creditors 36 2 13 13 Foreign direct investment (net inflows) -8 50 248 Portfolio equity(net inflows) 0 0 0 C: 423 World Bank program Commitments 0 183 2s 393 \ - IBRD Bilateral Disbursements 74 183 397 343 E- !- IDA D - 0th dtilatsal F- Rivate Principalrepayments I7 43 P 63 ;-IMF G - Short-ter

109

MAP SECTION

IBRD 37214 TANZANIA TRANSPORT SECTOR SUPPORT PROJECT

CIVIL WORKS & SUPERVISION OF MAIN CITIES AND TOWNS MAIN ROADS REHABILITATION/UPGRADING OF ROADS PROVINCE CAPITALS RAILROADS REHABILITATION/PAVING OF AIRPORT RUNWAYS AND APRONS NATIONAL CAPITAL PROVINCE BOUNDARIES DETAILED DESIGN OF REHABILITATION INTERNATIONAL BOUNDARIES OF PAVED ROADS

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information UGANDAUGANDA shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any To endorsement or acceptance of such boundaries. Tororo To Kampala Lake To Kampala Victoria

To K ag er Nakuru a BukobaBukoba MusomaMusoma To KENYAK E N Y A Mara Nakuru BuoenBuoen RWANDARWANDA KAGERAKAGERA MARAM A R A

Lake MwanzaMwanza Natron

To yu Kama MWANZAM WA N Z A Simi ARUSHAA R U S H A MoshiMoshi M ArushaArusha To Lake BURUNDIBURUNDI o YalovaYalova y Malindi o Eyasi P w Lake a o n KibondoKibondo s g O SHINYANGAS H I N YA N G A i Manyara a

ShinyangaShinyanga MinjinguMinjingu n i

G KahamaKahama KILIMANJAROKILIMANJARO

N NzegaNzega BabatiBabati SameSame O KIGOMAK I G O M A PEMBAPEMBA C

MkumbaraMkumbara NORTHNORTH KasuluKasulu F SingidaSingida KondoaKondoa MANYARAMANYARA O KigomaKigoma KaliuaKaliua PEMBAPEMBA TaboraTabora WeteWete

. SINGIDASINGIDA SOUTHSOUTH KorogweKorogwe TangaTanga P

E MkoaniMkoani ZANZIBARZANZIBAR

R TANGATA N G A U ManyoniManyoni NORTHNORTH Lake galla . Tanganyika TABORATA B O R A MkokotoniMkokotoni ZANZIBARZANZIBAR M SOUTHSOUTH & DODOMADODOMA KoaniKoani E ZanzibarZanzibar CENTRALCENTRAL

MpandaMpanda Wami DEM. REP. OF CONGO DEM. REP. D ZANZIBARZANZIBAR DODOMAD O D O M A WESTWEST MorogoroMorogoro KibahaKibaha RUKWAR U K W A DarDar eses SalaamSalaam

gwa Grea DARDAR ESES SALAAMSALAAM Run t MOROGOROMOROGORO

Ru ah a PWANIP WA N I Lake IringaIringa SumbawangaSumbawanga Rukwa MBEYAM B E Y A IRINGAI R I N G A UteteUtete

ji fi u MpuiMpui o INDIAN r R e b

m o l KilwaKilwa i

K MbeyaMbeya KivinjeKivinje du an at M OCEAN TundumaTunduma NjombeNjombe LINDIL I N D I

To ru ku Kasama m be M LindiLindi MtwaraMtwara To ZAMBIAZAMBIA Kasama MasasiMasasi To SongeaSongea TANZANIA Kasungu MTWARAMTWARA Lake RUVUMAR U V U M A a TunduruTunduru um uv Malawi R

To Chiúre To Marrupa To MOZAMBIQUEMOZAMBIQUE Lichinga 0 50 100 150 200 Kilometers

0 50 100 150 Miles

APRIL 2010