Document of The World Bank

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No: 3474 1-JM

PROJECT APPRAISAL DOCUMENT

FOR A

PROPOSED LOAN Public Disclosure Authorized

IN THE AMOUNT OF US$29.3 MILLION

TO

JAMAICA

FOR AN

INNER CITY BASIC SERVICES FOR THE POOR PROJECT

March 3,2006 Public Disclosure Authorized

Finance, Private Sector and Infrastructure Caribbean Country Management Unit Latin America and the Caribbean Region

Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the perfonnance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective February 28,2006) Currency Unit = Jamaica Dollars (J$) 65.12J$ = US$1

FISCAL, YEAR January 1 - December 31

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance Strategy CBA Cost-Benefit Analysis CBC Community-Based Contracting CBO Community-Based Organization CDB Caribbean Development Bank CDC Community Development Committees CDD Community-Driven Development CDO Community Development Officer CEM Country Economic Memorandum CFA Country Financial Accountability Assessment CIDA Canadian International Development Agency CLO Community Liaison Officer CPAR Country Procurement Assessment Report CPTED Crime Prevention Through Environmental Design CSI Community Security Initiative DFID Department for International Development (UK) DIME Development Impact Evaluation EDCo Estate Development Company EIA Environment a1 Impact Assessment EMF Environmental Management Framework EMP Environmental Management Plan EU European Union FAU Finance and Administration Unit FOSIS Fond0 de Solidaridady Inversidn Social (Social Investment and Solidarity Fund) GoJ Government of Jamaica IADB Inter-American Development Bank ICBSP Inner Cities Basic Services for the Poor (Project) IRR Internal Rate ofReturn JBIC Japan Bank for International Cooperation JICA Japan International Cooperation Agency JPS Co. Jamaica Public Services Company JSIF Jamaica Social Investment Fund JSLC Jamaica Survey of Living Conditions KMA Kingston Metropolitan Area LAMP Land Administration and Management Program LARPF Land Acquisition and Resettlement Policy Framework M&E Monitoring and Evaluation MDG Millennium Development Goal MFI Microfinance Institution MIS Management Information System MTSEPF Medium-Term Socio-Economic Policy Framework NCDP National Community Development Project NEPA National Environment and Planning Agency NHDC National Housing Development Corporation NHT National Housing Trust NLA National Land Agency NSWMA National Solid Waste Management Agency NWA National Works Agency NWC National Water Commission PCA Procurement Capacity Assessment PDC Parish Development Committees PIOJ Planning Institute ofJamaica PMI Peace Management Initiative PPI Peace and Prosperity Initiative PRA Participatory Rapid Appraisals REP Rural Electrification Programme SDC Social Development Commission SME Small and Medium Enterprise STATIN Statistical Institute ofJamaica UNDP United Nations Development Programme USAID United Sates Agency for International Development WTP Willingness to Pay

Vice President: Pamela Cox Country Director: Caroline D. Anstey Sector Director Makhtar Diop Sector Manager: John Henry Stein Task Team Leader: Abhas K. Jha FOR OFFICIAL USE ONLY 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. JAMAICA Inner City Basic Services for the Poor Project

CONTENTS

Page

A . STRATEGIC CONTEXT AND RATIONALE ...... 1 1. Country and sector issues...... 1 2 . Rationale for Bank involvement ...... 3 3 . Use of Borrower Systems ...... 4 4 . Higher level objectives to which the project contributes ...... 4 B. PROJECT DESCRIPTION ...... 5 1. Lending instrument ...... 5 2 . Project development objective and key indicators...... 5 3 . Project components ...... 7 4 . Community consultations ...... 17 5 . Lessons learned and reflected in the project design ...... 17 6 . Alternatives considered and reasons for rejection ...... 19 C. IMPLEMENTATION ...... 20 1. Partnership arrangements ...... 20 2 . Institutional and implementation arrangements ...... 20 3 . Monitoring and evaluation of outcomes/results ...... 22 * .. 4 . Sustainablllty...... 23 5 . Critical risks and possible controversial aspects ...... 24 6 . Loadcredit conditions and covenants ...... 25 D. APPRAISAL SUMMARY ...... 26 1. Economic and financial analyses ...... 26 2 . Technical...... 26 3 . Fiduciary ...... 27 4 . Social...... 28 5. Environment ...... 28 6 . Safeguard policies ...... 28 7 . Policy Exceptions and Readiness ...... 30 Annex 1: Country and Sector Background ...... 31 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ...... 35 Annex 3: Results Framework and Monitoring ...... 37 Annex 4: Detailed Project Description...... 43 Annex 5: Project Costs ...... 61 Annex 6: Implementation Arrangements ...... 62 Annex 7: Safeguards Policy Issues ...... 65 Annex 8: Summary of Environment Management Framework...... 71 Annex 9: Summary of Land Acquisition & Resettlement Policy Framework ...... 74 Annex 10: Financial Management and Disbursement Arrangements ...... 79 Annex 11: Procurement Arrangements ...... 86 Annex 12: Economic and Financial Analysis ...... 91 Annex 13: Public Safety Diagnosis and Component Strategy ...... 102 Annex 14: Community Consultations ...... 112 Annex 15: IS014000 Certification .Environmental Management System ...... 118 Annex 16: Related Donor, Government and Non-Governmental Programs ...... 122 Annex 17: Documents in Project Files ...... 124 Annex 18: Project Preparation and Supervision ...... 125 Annex 19: Statement of Loans and Credits ...... 126 Annex 20: Country at a Glance ...... 127 Annex 21: Map IBRD# 34379 ...... 129 JAMAICA

INNER CITY BASIC SERVICES FOR THE POOR PROJECT

PROJECT APPRAISAL DOCUMENT

LATIN AMERICA AND CARIBBEAN

LCSFU

Date: March 3, 2006 Team Leader: Abhas K. Jha Country Director: Caroline D. Anstey Sectors: Water supply (30%); Sanitation (30%); Director: Makhtar Diop Other social services (30%); Micro- and SME Sector Manager: John Henry Stein finance (10%) Themes: Access to urban services and housing (P); Other urban development (S) Project ID: PO91299 Environmental screening category: Partial Assessment Lending Instrument: Specific Investment Loan Safeguard screening category: Limited impact

For LoandCredits/Others : Total Bank financing (US$m): 29.3

Borrower: Jamaica

Responsible Agency: Jamaica Social Investment Fund (JSIF) 2"d Floor, IC-1F Pawsey Road Kingston 5, Jamaica Tel: (876) 926-2825

Expected effectiveness date: May 1, 2006 Expected closing date: December 3 1,20 11 Does the project depart from the CAS in content or other significant respects? Re$ [ ]Yes [XINO PAD- - __ A.3.-. - Does the project require any exceptions from Bank policies? [ ]Yes [XINO Re$ PAD D. 7 Have these been approved by Bank management? [ ]Yes [XINO Is approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated ‘substantial’ or ‘high’? [XIYes [ ]No Re$ PAD C.5 Does the project meet the Regional criteria for readiness for implementation? Re$ [XIYes [ ]No PAD D.0.7 7

Project development objective Re$ PAD B.2, Technical Annex 3 The project development objective is to improve quality of life in 12 Jamaican inner-city areas and poor urban informal settlements through improved access to basic urban infrastructure, financial services, land tenure regularization, enhanced community capacity and improvements in public safety. Specifically, the project will: (a) increase access and improve the quality of water, sanitation, solid waste collection systems, electricity, roads, drainage and related community infrastructure for over 60,000 residents of poor urban informal settlements through capital investments and innovative arrangements for operations and maintenance; (b) facilitate access to microfinance for enterprise development and incremental home improvement for entrepreneurs and residents in project areas; (c) increase security of tenure for eligible households in project areas; and (d) enhance public safety through mediation services, community capacity building, skills training and related social services.

Project description Re$ PAD B.3, Technical Annex 4

The Project is structured with three components. For a detailed Project description see Annex 4.

Component 1: Access to Sewices (US$ 21.85 million of Bank financing) will include three key subcomponents:

Subcomponent 1.1; Basic Infrastructure (US$ 20.00 million): This subcomponent will finance: (i) integrated network infrastructure in project areas for water, sanitation, drainage, and secondary and tertiary roads; (ii)community centers; (iii)community-based infrastructure including the construction and rehabilitation of recreational facilities, installation ofcommunity garbage receptacles, replacement ofzinc fencing with alternative perimeter fencing and the installation of in-house water and sanitation connections; (iv) street lighting and the regularization of illegal electricity connections; (v) the rehabilitation and construction of complimentary offsite network infrastructure; (vi) strengthening solid waste collection systems through the procurement of compactor trucks to be operated by NSWMA and the analysis of waste collection systems; and (vii) technical assistance to parish councils to strengthen operations and maintenance capacity.

Subcomponent 1.2: Access to Financial Sewices (US$1.25 million): This subcomponent will facilitate access to microfinance services in project areas for productive purposes and incremental home improvements through performance-based service contracts aimed at creating incentives for existing Financial Institutions (FIs) to provide microfinance services in project areas. Specifically, the subcomponent will finance three activities: (i)a performance-based mechanism for the extension of microfinance loans and technical assistance in project areas; (ii)consultant services for the orientation of potential bidders and the technical evaluation of bids; and (iii)an independent technical audit of F1 portfolios. Subcomponent 1.3: Land Tenure Regularization (US$ 0.60 million) : This subcomponent will finance the implementation of a pilot land titling initiative and technical assistance to the Government of Jamaica for the preparation of a national policy on squatter management and informal urban settlements.

Component 2: Public Safety Enhancement and Capacity Building (US$ 3.90 million, all from Bank financing) will finance integrated packages of consultant services, training and technical assistance focused on both short-term mitigation and conflict resolution and medium-term social prevention and capacity enhancement interventions. In particular, the component will finance the delivery of violence prevention services in five core social prevention areas including: (i)mediation and conflict resolution; (ii)alternative livelihoods and skills development; (iii)family support programs; (iv) youth education and recreation; and (v) CBO capacity building. The component will also finance the mobilization of community liaison officers in project areas to serve as facilitators.

Component 3: Project Management (US$ 6.33 million, with US$2.83 million in Bankfinancing) will finance consultant services, * training, goods and operating costs for project management and administration.

Which safeguard policies are triggered, if any? Re$ PAD D. 6, Technical Annex 7

The project will trigger the ‘Piloting the Use ofBorrower Systems to Address Environmental and Social Safeguard Issues in Bank-Supported Projects’ (OP.4.00) safeguard policy.

Significant, non-standard conditions, if any, for: Re$ PAD C. 6

Loadcredit effectiveness:

0 Signing and adoption ofSubsidiary Loan Agreement between the Ministry ofFinance and the Jamaica Social Investment Fund (JSIF) Covenants applicable to project implementation:

0 Training ofJSIF staff designated to apply the EMF and LARPF in environmental management, resettlement, and land acquisition is a condition for disbursement for subcomponent 1.1 : Basic Infrastructure 0 The securing by each community concerned ofat least one public or private sponsor willing to cover at minimum 50 percent ofoperating costs, for at least one year, for its community center prior to the initiation ofconstruction ofany particular community center under subcomponent 1.1 0 The finalization ofsubproject agreements between JSIF and respective community organizations is a condition for the execution ofcommunity infrastructure subprojects by project communities under subcomponent 1.1 using community-based contracting methods A. STRATEGIC CONTEXT AND RATIONALE

1. Country and sector issues Country Background Jamaica’s economic performance has improved in recent years. Real annual GDP growth accelerated from 1.5 percent in 2001 to 2.3 percent in 2003 and is estimated at 1.8 percent for 2005. The recent improvement in economic performance follows an extended period of stagnation during 1991-2000. The improvement in growth is led by relatively strong performance in tourism, mining, agriculture and the recovery in the manufacturing sector. At the same time the Jamaican economy has been undergoing a gradual structural transformation. Between 1989 and 2002 the manufacturing sector declined from 20.0 percent of GDP to 13.9 percent while service sectors increased to 67.1 percent of GDP. A driving force behind this transformation is the growing importance of the tourism sector, including the impact this has on the construction and transportation sectors.

These changes in the economy have had an impact on the spatial organization of cities and towns. Business and industrial activity - particularly in the capital of Kingston - has gradually left city centers resulting in high levels of unemployment and declining investment in basic inner-city services.’ While, the overall poverty rate fell from 19.1 percent in 2003 to 16.9 percent in 2004, it is estimated that pockets of urban poverty persist.2 There is also a strong gender dimension to poverty. Female-headed households account for about two-thirds of the households in poverty and generally show a higher incidence of poverty in all surveys since 1989.3 The gender dimension of urban poverty in Jamaica is particularly acute. Of 57 cities surveyed by the UN-Habitat, two Jamaican cities (Montego Bay and Kingston) reported the highest difference in general poverty incidence and poverty amongst female-headed household^.^

Jamaica’s inner cities are also at the center of the country’s growing crime and violence problem. A record 1,650 killings were reported in 2005. This amounts to 60.4 murders per 100,000 ofthe population. Approximately 12.1 percent of all households in the 2002 the Jamaica Survey of Living Conditions (JSLC) were victims of crime in 200 1 and 1.2 percent of all households reported that a family member had been murdered in the past 12 months5 High levels of violent crime can be linked to a pattern of politically motivated violence established in the 1970s and 1980s, and to the emergence of Jamaica as a major point for the transshipment of drugs from South America to the US and Europe. The economic stagnation during the 1990s contributed to high levels of unemployment and social deprivation. It also drove many qualified and professional people, particularly from the healthcare sector, to migrate abroad. This weakened the social infrastructure further. A complex relationship has evolved in recent years between organized crime and inner-city communities. By the 1970s, many such communities had become ‘garrisoned’ or segregated along political lines through intimidation and patronage, under the control of a local leader or ‘don’ with links to one of the main political parties. However, by the 1990s, the role of politics had diminished, and major criminal gangs - often involved in illegal narcotics and

The GoJ refers to ‘inner city communities’ as the neighborhoods in the central area ofthe city in or bordering the historic core and central business district. These inner city neighborhoods suffer from decaying physical infrastructure, poor service provision, high population densities and sometimes considerable environmental hazards. More generally, the term ‘inner city’ is also used to describe slum settlements on the periphery of towns that suffer the similar lack ofaccess to services and social fragmentation. ’PIOJ data. World Bank. Country Economic Memorandum (2004) h~:llwww.unchs.oraluublicationlAnal~sis-Final.udf,page 21 Jamaica Survey ofLiving Conditions (2002).

1 extortion - controlled many neighborhoods, under the command of a new breed of dons. These major gangs have weakened in recent years, and many of the recent deaths are apparently due to intensifying conflict between smaller local groups. See Annex 13 for greater detail on crime and violence in Jamaica.

Crime and violence - coupled with growing poverty - has further exacerbated social fragmentation and the weakness ofcivic organizing in inner-city communities. A 1997 World Bank study ofUrban Poverty and Violence concluded that violence in poor urban communities erodes the two key assets vital to poverty reduction - labor and social capital. The report recommended projects that integrate the delivery of services with the development of civic institutions. The Government is also increasingly cognizant of the economic impact of crime and violence in terms of a worsening investment climate and diminished tourism sector revenues.

Jamaica has identified inner-city renewal - with a focus on crime and violence prevention - as a key priority. In 2002, GoJ developed a comprehensive inner-city renewal program which aims to ‘provide a general framework for integrating the dimensions of human, social, economic and environmental development’ of inner-city communities in Jamaicaa6 The Government’s Medium-Term Socio- Economic Policy Framework (MTSEPF) identifies inner-city renewal as a key priority.’ In 2000, the Prime Minister ofJamaica established a committee of senior officials to oversee and coordinate all inner- city renewal interventions in the country. This proposed project’s focus on sustainable water and sanitation provision, crime and violence prevention and improved mobility and safety complements the GoJ program. Additionally, the Government has requested Bank assistance in parallel to Inner Cities Basic Services for the Poor (ICBSP) implementation for the preparation of a policy and program for the regularization and management ofinner city, urban and peri-urban informal settlements.

The Government has demonstrated a commitment to civic participation and strong performance in community-based service provision. The Social Development Commission of the GoJ has formulated a framework to enhance civil society participation through a three-tiered system ofpublic-civic committees. Community Development Committees (CDC) and Development Area Clusters are being formed at the neighborhood and neighborhood cluster levels, while Parish Development Committees (PDC) have already been established in every parish in the country. Additionally, the Jamaica Social Investment Fund (JSIF) was established in 1996 to reduce poverty and help create an environment for sustainable development. JSIF is currently executing the National Community Development Project (NCDP), financed by the World Bank and the Government of Jamaica. JSIF has considerable experience in financing community infrastructure projects in inner city communities - including those for critically needed water and sanitation, education, health and transport services. JSIF has also supported a range of community-based capacity building initiatives in inner-city neighborhoods to build social capital. The Government is committed to building upon the successful JSIF experience by deepening interventions in inner-cities in the areas ofwater, sanitation, crime and violence prevention and traffic management.

Sector Background Precise data on the quality of basic services in inner-city areas is not readily available. However, an analysis of aggregate data and recent studies suggests that the quality and coverage of basic services in inner-city communities is poor, with pockets of extreme deprivation in particular neighborhoods. Additionally, a Public Expenditure Review for inner city areas (currently in draft) was conducted during preparation to assess the quality and magnitude of public expenditure on inner city areas. Overall performance and service quality in key basic infrastructure sectors are poor and, in many cases, worsening. In particular:

6 httu:iiwww.uioi .gov.imluioidocs/suecial/finalWHOLEDOC,htm 7 hm:/iwww.oioi .gov.im/uioidocs/suecialih.lediumterm.udf, page 44

2 0 Water Supply: In 2004 approximately 80 percent of households had access to potable water through either piped household connections or public standpipes. However, in 2002, only 59 percent of the poorest quintile had access to a reliable source of water supply.8 For the water sector there is a lack of enforcement ofpayments leading to a lack of investment (including even ordinary maintenance) programs. Many target households either do not have a piped water connection in their homes or suffer from a lack of adequate water pressure. Improved provision of these services is high on all the communities’ priority lists.

Sanitation: For the sanitation sector, the sewerage system in all project communities either does not exist or is due for a major renewal. The household gray water is often separated from toilet waste and allowed to flow into storm drainage, where this exists, or otherwise allowed to flow along the sides ofroads, thus polluting adjacent properties on an intermittent basis during heavy rainfall. Where sewer networks do exist, they are badly maintained and in a very poor state; in some cases they have been decommissioned without immediate replacement.

e Drainage: For storm water drainage, the accumulation of solid waste still remains the number one problem concerning flooding during periods of heavy rainfall. This can be ofparticular concern in poorer communities where solid waste is not segregated by the community. The heavy metal constituents (from batteries, petroleum products, cans etc) tend to accumulate on the ground after local flooding subsides, which can lead to direct or indirect ingestion by humans, with obvious long term health implications, particularly where there are public standpipes.

e Solid Waste: Solid waste collection is a major area of concern in all the communities. The associated health implications oflimited and irregular solid waste collection are far reaching.

0 Electricitv: In the electricity sector, unaccounted-for net generation during the past 10 years is between 15 and 20 percent, most of which is attributable directly to theft of power (generally through illegal connections).’ Some inner-city communities have as many as two to three connections per house. Illegal connections are also a major safety issue in some of these communities.

2. Rationale for Bank involvement The Bank is well positioned to support the proposed operation. First, in August 2004 Jamaica formally requested the assistance of the Bank to prepare and finance an urban infrastructure and public safety enhancement operation targeting inner-city and informal urban communities. The proposed project has been formulated in the context of the GoJ inner-city renewal program, formulated in 2002. A commitment to inner-city renewal was reinforced in the Government’s Medium-Term Socio-Economic Policy Framework (MTSEPF) in 2004.

Second, the World Bank Group Country Assistance Strategy (CAS)’ for Jamaica is closely aligned with the MTSEPF and focuses on three key pillars: (1) accelerating inclusive economic growth; (ii)improving human development and opportunity; and (iii)crime prevention and reduction. The proposed operation is closely aligned with all the pillars of the CAS and is specifically referenced in the strategy. In particular, the ICBSP project will reinforce the first CAS pillar through investments to improve the quality ofbasic infrastructure services for the poor. Additionally, the project is closely linked to the third CAS pillar on crime violence prevention. In this regard, the project designed infrastructure investments in a manner that

JSLC (2002). Discussed by the Board on April 20,2005.

3 reinforces public safety. The public safety component will also finance technical assistance to support mediation activities and multi-purpose community centers that would support youth and adult skills training, homework classes and related community capacity-building initiatives. The proposed project also reinforces the conclusions of the Country Economic Memorandum (CEM) which emphasized the importance of reducing crime and violence as this has a major impact on the investment climate, the competitiveness of Jamaican firms, and worker and firm productivity.

Third, the Bank will leverage its global experience in the preparation and implementation of integrated urban infrastructure projects and its increasing experience and knowledge base on crime and violence prevention.

Finally, the project will build upon the experience ofthe ongoing and successful Bank-supported National Community Development Project (NCDP) - being implemented by JSIF. JSIF has successfully implemented community infrastructure projects under NCDP in inner-city communities and has developed an effective mechanism for community-based contracting that will be replicated in the ICBSP project.

3. Use of Borrower Systems GoJ and the Bank have agreed to prepare this project as a pilot for using Borrower environmental and social safeguard systems, under the provision of OP/BP 4.00 on Piloting the Use of Borrower Systems to Address Environmental and Social Safeguard Issues in Bank-Supported Projects. In the case of this particular pilot, the Borrower systems refer to those the Jamaica Social Investment Fund (JSIF). As part of project preparation, the Bank has carried out a safeguards diagnostic review and has prepared an equivalence and acceptability assessment report. Based on the findings of this assessment, GoJ and the Bank have agreed to the use of Jamaican environmental and social safeguard systems for two policy areas: environmental assessment and involuntary resettlement. As part ofthis process, the Bank and GoJ will work closely with other development partners such as USAID, DFID, IADB, EU and CIDA who are active in the sector, to move tobards harmonization ofrequirements.

A final report on the safeguards diagnostic review has been reviewed by the Bank and has been disclosed in-country and by the Bank on February 17, 2006." Greater detail on the Use of Borrower Systems Pilot is provided in Annex 7.'

4. Higher level objectives to which the project contributes The project will contribute to four key higher-level objectives:

Achievement of Millennium Development Goal (MDG) targets. The project will help achieve MDG target 10 for improvements in the coverage and quality ofwater and sanitation services, and target 11 for improvements in the quality of life for slum dwellers through improved infrastructure services, access to secure tenure and reductions in levels ofcrime and violence.

Poverty Reduction. The percentage ofurban residents living in poverty in Jamaica was estimated at 18.7 percent in 2002 - a sharp rise from 13.3 percent in the previous year. While specific disaggregated data is not available, it is estimated that urban poverty is largely concentrated in inner city and urban informal settlements. The project will directly contribute to the reduction of poverty in these areas through improved basic service provision, access to microfinance and job skills training. loSee http://isif.or~/disclosuredocs.aspfor mher in-country disclosure information. l1This section on Use of Borrower Systems will be updated following the Regional Operations Committee meeting and the full disclosure ofall related documentation.

4 Crime and Violence Prevention. The project will also contribute to Jamaica’s efforts to reduce levels of crime and violence through a package of community strengthening, mediation, social infrastructure, youth training and skills development interventions.

Health. The project will have a medium-term impact on the health outcomes of poor urban residents through better quality water and sanitation services, enhanced solid waste collection systems and reduced incidence offlooding through improved drainage infrastructure. Support for the GoJ’s Medium-Term Socio-Economic Policv Framework. The project will foster social stability and cohesion, the promotion ofwhich is a central pillar of the MTSEPF.

B. PROJECT DESCRIPTION

1. Lending instrument The proposed operation will be structured as a Specific Investment Loan (SIL). The loan will finance investments in basic infrastructure including water, sanitation, drainage, roads and related community infrastructure. The loan will support through technical assistance and consultant services a series of innovative initiatives to enhance public safety in project areas, facilitate access to microfinance, increase the security oftenure and build the capacity ofcommunity and local government institutions.

2. Project development objective and key indicators The project development objective is to improve quality of life in 12 Jamaican inner-city areas and poor urban informal settlements through improved access to basic urban infrastructure, financial services, land tenure regularization, enhanced community capacity and improvements in public safety. Specifically, the project will: (a) increase access and improve the quality of water, sanitation, solid waste collection systems, electricity, roads, drainage and related community infrastructure for over 60,000 residents of poor urban informal settlements through capital investment and innovative arrangements for operation and maintenance; (b) facilitate access to microfinance for enterprise development and incremental home improvement for entrepreneurs and residents in project areas; (c) increase security of tenure for eligible households in project areas; and (d) enhance public safety through mediation services, community capacity building, skills training and related social services.

Eligibility Criteria and Selection of Beneficiaries The selection of project communities was led by the Planning Institute of Jamaica (PIOJ) and involved the Ministry ofNational Security, the Social Development Commission (SDC) and JSIF. The availability of reliable and disaggregated quantitative data on poverty, access to basic infrastructure services and the incidence ofcrime and violence for inner-city and urban informal settlements is limited in Jamaica. This made it difficult for the GoJ to develop selection criteria solely on objective quantitative measures. Additionally, the Government noted a preference to explicitly include certain qualitative measures to ensure that areas of high priority with respect to public security were included and to avoid the perception of political interference in selection.

The selection process involved as a first step the formulation ofa shortlist of 32 settlements, including all inner-city and peri-urban informal settlements with estimated populations of over 7,500 residents, based on the Government’s preference to implement the ICBSP project in larger inner-city communities. The shortlist was then analyzed and ranked based on two available quantitative measures: (i)% ofhouseholds in the community in lowest poverty quintile; and (ii)% of households without access to piped water. A combined ranking was formulated based on data for both indicators. The GoJ then applied a series of

5 qualitative criteria to this ranking to arrive at the final project selection. Qualitative criteria for selection included:

0 Include at least one settlement from five parishes with large urban centers - Kingston, St. Andrews, St. James, Clarendon and St. Catherine - to ensure that all parish councils develop capacity in urban upgrading under the project. Based on poverty and access to water criteria alone - the project would have selected project areas in only Kingston and St. Andrews.

0 Ensure that the final selection does not disproportionately favor communities allied with the ruling political party to avoid accusations ofpreferential treatment based on political alliances.

0 Select communities that are ofhigh priority based on Ministry ofNational Security public safety criteria. The Ministry ranked for PIOJ the 32 settlements on the shortlist and indicated certain high priority settlements that represented a significant security risk or had demonstrated efforts to maintain peace. The final selection reflects, to the extent possible, Ministry ofNational Security rankings.

0 The GoJ also excluded from final selection project areas that were either subject to major land disputes or located on environmentally sensitive land.

Based on the above criteria, a draft selection was made using an estimated budget of US$500 per capita including both project and administrative costs. This draft selection was further refined after field assessment to focus in on discrete sub-communities where poverty, poor service levels and crime were concentrated.12 Based on this methodology, a final selection of project areas was conducted and is reflected in Table 1 below.

Table 1: ICBSP Project Selection

l2For example, the draft selection included Trench Town with an estimated population of over 24,000 residents. After field assessment, final project selection included only Federal Garden (a subset of Trench Town with over 2,300 residents) where access to basic services and crime and violence conditions are disproportionately poor. l3The project will be implemented in the Central Village communities of Andrews Lane, Big Lane, Detroit and Little Lane. For the purposes of the remainder of this document, the use of the term ‘Central Village’ will refer to these four communities.

6 3. Project components The Project is structured with three components. For a detailed Project description see Annex 4.

Component 1: Access to Services (US$ 21.85 million of Bank financing) will include three key subcomponents.

Subcomponent 1.1: Basic Infrastructure (US$ 20.00 million): The subcomponent will finance: (i) integrated network infrastructure in project areas for water, sanitation, drainage, and secondary and tertiary roads; (ii)community centers; (iii)community-based infrastructure including the construction and rehabilitation ofrecreational facilities, installation of community garbage receptacles, replacement ofzinc fencing with alternative perimeter fencing and the installation of in-house water and sanitation connections; (iv) street lighting and the regularization of illegal electricity connections; (v) the rehabilitation and construction of complimentary offsite network infrastructure; (vi) strengthening solid waste collection systems through the procurement of compactor trucks to be operated by NSWMA and the analysis of waste collection systems; and (vii) technical assistance to parish councils to strengthen operations and maintenance capacity.

Investments for the 12 eligible and selected project areas have been identified through an extensive consultation process to prioritize infrastructure needs (see Annex 14) and detailed technical feasibility work. Integrated Neighborhood Infrastructure Plans were prepared for each project area based on this process. Each infrastructure plan outlines a series of investments and specific contract packages for integrated network infrastructure, small community-based infrastructure works, community centers, electrification and street lighting. During the process ofproject preparation, the need for a series of off- site or complementary investments was identified to ensure the sustainability ofnetwork and community infrastructure proposed in project areas. Table 2 below provides a summary of the areas of estimated expenditure under subcomponent 1.1.

Table 2: Estimated Costs by Activity Subcomponent 1.1 - Basic Infrastructure Estimated Investment Activity cost (US$)

~~ 1. Integrated Network Infrastructure 11,350,508 2. Community Centers 2,579,229 3. Community Basic Infrastructure 1,821,171 4. Street Lighting and Electricity 1,303,450 5. Offsite Network Infrastructure 2,035,000 6. Solid Waste Collection Capacity Enhancement 567,800 7. Parish Council Support 300,000 TOTAL (US%) 19,957,158

(i) Integrated Network Infrastructure: This subcomponent will finance a demand-driven bundle ofbasic tertiary network infrastructure investments for construction and maintenance of water, sewerage, communal sanitation, roads and drainage infrastructure. Due to the integrated and sequenced nature of these investments - i.e. sewerage systems and water networks will be installed followed by the paving of roads and installation of curbside or submerged drains - they will be packaged together under one contract for each community. Table 3 below outlines the estimated cost and the proposed areas of investment by sector for each of each investment package. Further design and technical considerations for each infrastructure area are outlined in Annex 4 below.

7 Table 3: Estimated Integrated Network Infrastructure Costs by Project Area

Investment Costs Community ~ectors'~ (US$) Whitfield Town TRAN, DRAIN and DMAIN 1,780,419 Federal Gardens WAT, SAN, TRAN, DMAIN and CSAN 650,162 Passmore 505,262 TowdBrowns Town (Dunkirk) SAN, DRAIN, DMAIN and CSAN Jones Town WAT, SAN and DMAIN 313,991 Tawes Pen WAT, SAN, DRAIN, TRAN and DMAIN 543,263 March Pen 1,s 11,195 (Africa) WAT, DMAIN, TRAN and DRAIN Central Village WAT, TRAN, DRAIN and DMAIN 2,155,876 Dempshne Ped 1,223,872 Jones Pen (Shelter Rock) WAT, TUN, DRAIN and DMAIN Lauriston TRAN, DRAIN and DMAIN 646,096 Bog Walk WAT, TRAN, DRAIN and DMAIN 813,714 Bucknor WAT, TRAN, DRAIN and DMAIN 518,152 Flankers TRAN, DRAIN and DMAIN 688,507 Total 11,350,508

(io Community Centers: The Project will finance basic multi-purpose community centers in seven project areas. Adequate community facilities in other project areas have been identified. The community centers will host conflict mitigation and mediation, youth education, skills development, recreation and related capacity building programs financed under Component 2 of the operation as well as additional programs run by external agencies when required. Arrangements for the operation and maintenance of community centers and conditions for construction are described in Annex 4. The estimated costs and locations for the seven community centers are outlined below in Table 4.

Table 4: Estimated Costs - Community Centers I Community I Estimated Investment Cost (Us$) I 1. Federal Gardens 364,639 2. Tawes Pen 364,639 3. Central Village 544,900 4. Lauriston 277,886 5. Bog Walk 277,886 6. Bucknor 364,639 7. Flankers 364,639 8. Site Preparation 20,000 TOTAL (US$) 2,579,229

l4 WAT = Water, SAN = Sewerage and Sanitation, TRAN = Road Paving or Rehabilitation, CSAN = Communal Sanitation Facilities, DRAIN = Drainage, and DMAIN = Deferred maintenance on existing drainage and community infrastructure.

8 (iii) Community Basic Infrastructure: This subcomponent will finance community basic infrastructure investments for: (i)household water and sanitation connections; (ii)zinc fence replacement with alternative perimeter fencing; (iii)neighborhood improvement and recreational facilities; and (iv) the installation ofbins for solid waste collection. These small infrastructure investments complement broader network infrastructure investments described above and will be implemented through community-based contracting methods in order to strengthen CBO capacity, ensure demand-responsiveness, efficiencies and achieve greater community involvement in implementation. Table 5 below outlines estimated costs for the activity and further detail on the nature ofeach investment and implementation arrangements are outlined below.

Estimated Community Investment Cost (US$) 1. Household Water and Sanitation Connections 414,811 2. Zinc Fence Removal and Substitution 1,200,000 3. Neighborhood Improvement and Recreation Facilities 133,000 4. Waste Bin Installation 73,360 TOTAL (US$) 1,303,450

Household Water and Sanitation Connections: This subcomponent will finance the extension ofwater and sanitation connections to households from rehabilitated or newly constructed street water and sanitation mains located in project areas. Under a small works contract supervised by the CBO, households without adequate water and sanitation connections will receive one connection from mains to taps or sanitary facilities located within the residential unit or yard.

Zinc Fencing Removal and Substitution: This subcomponent will finance a community-based program for the replacement of zinc fencing with alternative perimeter fencing. JSIF will prepare during implementation a menu ofeligible and cost-effective design alternatives for the new fences and through a consultative process communities will select the desired alternative. CBOs will procure materials based on design specifications prepared by JSIF. Labor for the replacement of zinc fencing with alternative perimeter fencing will be provided by resident beneficiaries and CBO members in the form of in-kind community contributions. The program is designed to cover approximately 50 percent of all households in project areas. The JSIF Operations Manual included in the project files includes additional details on the administration ofthe program.

Neighborhood Improvements and Recreational Facilities: This subcomponent will finance small works through CBC contracts for demand-driven minor neighborhood improvements and the rehabilitation and installation of small recreation facilities and playgrounds. These small works contracts will be implemented in the implementation cycle in each area. Further details on the eligible investments are included in the JSIF Operations Manual.

Waste Bin Installation: This subcomponent will finance the installation of waste bins in project areas. The specifications and recommended locations for all waste bins have been identified in the Neighborhood Basic Infrastructure Plans in coordination with community representatives and NSWMA in order to ensure an efficient waste collection system.

(iv) Street Lighting and EZectricity: This subcomponent will finance the installation of street lighting, the extension of the electricity network and the regularization of illegal connections. Works for the installation of street lights and network extension will be executed under one umbrella contract for all

9 project areas in order to benefit from economies of scale in implementation. The location and specifications for street lights have been identified in the infrastructure and public safety plans based on feedback from community focus groups during preparation. In agreement with JPS Co., network expansion investments will involve the incremental extension of existing network infrastructure as required in areas where consumers agree to regularize illegal connections and pay regular utility bills.

The Project will work with the Rural Electrification Programmme (REP) to regularize illegal connections. REP currently operates a regularization program in rural areas and will adapt and replicate the program in ICBSP communities. The program is voluntary and requires consumers to repay through electricity bills the full cost of installation of legal connections over a 48-month period. The component will finance both the procurement of materials and capital costs for the installation of legal connections. Procurement will be managed by JSIF with the involvement of REP in the definition of technical specifications and the evaluation ofbids. Further detail on the operating arrangements for the electricity regularization program is included in the JSIF Operations Manual. The Project will also finance REP administrative costs associated with implementation including the cost of work supervision, site preparation, technical supervision and approvals through Force Account. An MoU between JSIF and REP establishing these operating arrangements in greater detail has been negotiated and will be signed as part of implementation. Annex 4 includes further details on the electricity program.

(v) OffiSite Network Infrastructure: The component will finance the construction and rehabilitation of off-site infrastructure critical to maintaining adequate service levels in project areas. Planned off-site infrastructure works include the: (i)rehabilitation of a water reservoir and trunk mains in Kingston bordering Federal Gardens and Jones Town communities; and (ii)the upgrading and rehabilitation of a wastewater treatment facility in Tawes Pen. The rehabilitation of off-site water infrastructure in the Kingston area will have a direct impact in improving water pressure and the continuity of service in Federal Gardens and Jones Town. The rehabilitation ofthe wastewater treatment plant in Tawes Pen will enable the treatment of wastewater generated from the proposed sewerage network investments planned for the area. The proposed investments will be procured by JSIF and linked to immediate improvements in the quality of service provision in project areas.

(vi) Solid Waste Collection Systems: This subcomponent will strengthen solid waste collection systems by financing the procurement of compactor trucks and providing technical assistance for the analysis of the waste collection systems in project areas.15 The procurement of compactor trucks will be done by JSIF for operation by the National Solid Waste Management Agency (NSWMA) or local service providers that have entered into service contracts with NSWMA to operate waste collection systems in project areas. The responsibility for operation and maintenance of the trucks will be vested in NSWMA and JSIF will enter into an MoUwith NSWMA to ensure that the trucks will be mobilized in project areas for the duration of the investment. Additionally, the component will finance a study of the collection system in ICBSP areas to assist NSWMA in the more efficient design and management of waste collection systems.

(vi) Parish Council Support: The responsibility for the operation of secondary and tertiary roads, drainage infrastructure, community recreation facilities and other basic infrastructure will lie with parish councils. However, councils lack adequate management and O&M capacity to adequately maintain community infrastructure. The component will support the procurement of basic equipment and the provision of technical assistance to strengthen management, operations and maintenance capacity at the parish council level. Equipment to be procured will include computers, software, maintenance equipment and basic office supplies. The JSIF Operations Manual specifies in greater detail the areas of eligible expenditure for the procurement of goods for parish council support. Additionally, the Project will

l5 It is estimated that at least 3, but no more than 4 compactor trucks will be procured under the component,

10 support the training of parish council staff directly associated with the maintenance of community infrastructure financed under the Project in management and technical skills to enhance basic O&M capacity.

Subcomponent 1.2: Access to Financial Services (US$1.25m): This subcomponent will facilitate access to microfinance services in project areas for productive purposes and incremental home improvements through performance-based service contracts aimed to create incentives for existing Financial Institutions (FIs) to provide microfinance services in project areas. Specifically, the subcomponent will finance three activities: (i)a performance-based mechanism for the extension of microfinance loans and technical assistance in project areas; (ii)consultant services for the orientation ofpotential bidders and the technical evaluation ofbids; and (iii)an independent technical audit of FIportfolios.

Desim: Through the use of performance-based service contracts JSIF will award contracts to those FIs that require the least-cost subsidies as a percentage of loan amount to reach a minimum target of consumers specified for each bid. FIs will participate in a competitive tendering process and winning firms will agree to disburse, service and collect a predetermined number of loans or dollars lent. The awards to FIs will be structured as performance-based contracts and the contracts will disburse against an agreed fixed payment for each loan. The design and operating procedures for the subcomponent have been finalized and are reflected in the JSIF Operations Manual. The subcomponent has been designed to maximize desired outputs and minimize market distortions. Additional key design features are outlined in Annex 4.

The subcomponent is designed to include up to seven tender processes over a three to four year period. The use of multiple tenders was selected given that the use of a performance-based least cost subsidy contract for microfinance is new to Jamaica and follow-on tenders will enable JSIF to build on lessons from initial awards and will also enhance competition amongst potential bidders and drive down subsidy levels as FIs begin to understand the market. Follow-on tenders will also aim to encourage the provision of microfinance loans for incremental home improvement.

Each performance-based service contract will also include a small package of technical assistance services to be provided by the FI to clients. Technical assistance services will include credit counseling, assistance in the preparation of business plans, financial management and related business support services.

Subcomponent Management, Monitoring and Administration: Awards under the performance-based contracts will be made through a competitive tender process in accordance with Bank policies and procedures. A Microfinance Management Committee (MMC)16 has been formed. The committee will have responsibility for reviewing the tender process and the selection of applicants, as well as approving contracts. It will also review periodically results of the process and oversee changes to the follow-on tenders and oversight mechanisms. Additional steps and procedures include:

0 Selection Criteria: Simple and transparent selection criteria for the bidding process will be applied and the criteria will be adapted as the objectives of subsequent tender processes evolve. The first tender will evaluate bids based on cost (40 percent), experience in and capacity to service ICBSP communities (30 percent) and financial conditions of FIs (30 percent).

l6 The proposed Microfinance Management Committee will be formed as a subcommittee to the JSIF Board and would report directly to the Board. The' Committee will be constituted by Board members and experienced professionals in the commercial banking sector and government who do not have a direct interest in any of the potential FIs eligible to access resources through the component.

11 Disbursement: Performance-based disbursement is the most effective when spread over the term of the loan. Disbursement for the first tender will be as follows - 50 percent upon the presentation of a list of qualified and approved loans from the FIs, 30 percent after three months provided that the loan is not over 30 days past due, and 20 percent when the client is approved for a second loan. Reporting Requirements: A simplified reporting system has been outlined for participating FIs and is summarized in Annex 4.

Audit and Verification: JSIF will conduct on-site visits to winning FIs to ensure that information provided in the bid is accurate. After awards - on a semi-annual basis - JSIF will verify loan reports by reviewing a sample of loans to assess performance. JSIF will also use independent auditors to verify loan portfolio claims by FIs.

Subcomponent 1.3: Land Tenure Regularization (US$ 0.60m): This subcomponent will finance the implementation ofa pilot land titling initiative and technical assistance to the Government ofJamaica for the preparation of a national policy on squatter management and informal urban settlements. The initiative will target residents ofICBSP communities on public land only - given the lack ofa clear, cost- effective and expeditious legal framework for private land acquisition for the regularization of informal occupants on private parcels.” The component will not finance land acquisition or the actual payment of the fee to receive a title - but rather only technical assistance and services. Implementation of the pilot component will involve four activities:

Inventory of Land Ownership. JSIF will conduct - based on cadastral data obtained from the National Lands Agency (NLA) - a cadastral audit for all ICBSP communities. The audit will analyze approximately 13,000 parcels which will be overlaid on an aerial map of each community and combined with attribute data (i.e. ownership and title details). The audit will enable JSIF and partners to quantify the exact number ofparcels eligible for titling and assess requirements for the transfer ofownership ofpublic lands. Development of a Titling Strategy and Program. A clear and transparent strategy and program for titling will be developed based on the results ofthe complete cadastral audit. Key activities will include the: - development ofinformation campaigns and mechanisms for public consultations; - formal verification offield, legal and administrative procedures for transfer and costs; - clarification of operating arrangements between JSIF and partner agencies; and - extensive public communication to ensure the benefits and costs oftitling are well understood. Technical Assistance for Squatter Management Policy. Upon the request ofthe Government of Jamaica, the project will also support technical assistance for the development of a broader policy and program for the regularization ofurban and peri-urban squatter areas. Titling Program. The implementation ofthe program will involve four key activities: - completion ofregister and cadastral searches; - completion ofland surveys;

” During preparation the National Lands Agency conducted a cadastral analysis for a sample of ICBSP communities - Jones Town, Tawes Pen and Bucknor. The analysis found that both Tawes Pen and Bucknor were located on single, non-subdivided public parcels while Jones Town is located on private land with detailed cadastral data available on ownership for all parcels. A rapid analysis ofthis data, overlaid on aerial maps, suggests that these parcels have been subdivided informally.

12 - verification ofoccupancy information including names, addresses, leasing and sub- leasing arrangements; and - the provision oftechnical assistance to eligible beneficiaries in the processing oftitle applications

Component 2: Public Safety Enhancement and Capacity Building (US$ 3.90 million, all from Bank financing) The component aims to enhance public safety in project communities by financing integrated packages of consultant services, training and technical assistance focused on both short-term mitigation and conflict resolution and medium-term social prevention and capacity enhancement interventions. In particular, the component will finance the delivery of violence prevention services in five core social prevention areas including: (i)mediation and conflict resolution; (ii)alternative livelihoods and skills development; (iii) family support programs; (iv) youth education and recreation; and (v) CBO capacity building. The component will also finance the mobilization of community liaison officers in project areas to serve as facilitators.

Social prevention services in each of the five core areas will be procured through three to four contracts each covering a group of project areas. Each contract will be designed and scoped to the specific crime and violence prevention needs in project areas, as identified by diagnostic analysis conducted during preparation and verified during implementation. Eligible providers oftechnical assistance services in each of the five social prevention areas may be pre-qualified or short-listed on the basis of demonstrated experience and a track record of good quality service provision at reasonable costs. The agencies will be subject to an organizational assessment by JSIF to confirm their capacity to deliver one or more social violence prevention services under the project. Specific service contract packages in the five social prevention areas will include:

(i) Mediation and Conflict Resolution: The component will finance technical assistance services that initiate and manage mediation initiatives in communities that experience chronic or periodic gang conflict or intra-community feuding. This will support tested mediation and conflict management interventions currently being implemented in Jamaica to broker ceasefires and build confidence between rival gang factions such as actions to:

0 establish a community code ofconduct; 0 form and supervise conflict mediation groups; 0 conduct peace-building meetings with inter-community groups; 0 obtain signed peace agreements between local area gangs in all relevant communities; 0 train and certify community residents as mediators to resolve interpersonal conflicts; 0 conduct conflict resolution and anger management sessions with each community (individually and collectively); and 0 Train and build capacity in mediation, dispute resolution, and intra-personal conflict management at the community level.

(io Alternative Livelihoods and Skills Development: The component will finance technical assistance services that respond to high levels of youth unemployment and of dropping out of the formal education system, as well as limited access to vocational skills development and apprenticing opportunities, as noted during the public safety audits ofICBSP communities. Specifically, the component will finance:

0 vocational training (carpentry, cosmetology, service industry, information technology, etc); 0 job skills development (basic literacy, personal presentation, etc.); and 0 related job placement programs.

13 (iii) Family Support Programs: The component will finance technical assistance services that respond to the needs of children, youth, and heads of household from the most vulnerable segments of ICBSP communities - with a particular focus on single-parent households. In particular, the component will provide access to:

0 life skills programs; 0 good parenting programs; 0 family mediation services; 0 interventions that address gender-based, sexual, and domestic violence; 0 drug abuse and alcoholism prevention and rehabilitation; 0 reproductive health services; and 0 early childhood development and education and daycare services.

(iv) Youth Education and Recreation: The component will finance technical assistance services that will deliver demand-driven and tested youth and adolescent educational and recreational programs through the community centers and other community locations. Specific interventions may include:

0 after-school homework programs; 0 summer camps; 0 community libraries; 0 computer slulls training; 0 guidance counseling; 0 sports programs and competitions; and 0 cultural programs such as in music, arts, and theater.

(v) Community Capacity Building and Public Awareness: The component will finance a series of capacity-building activities for community-based organizations in project areas. Technical assistance services for CBO capacity-building will include training in: the objectives, goals and mechanisms of social participation; financial management skills; fundraising; community-based contracting; community-based crime and violence prevention; situational crime and violence prevention; monitoring and evaluation; and training to perform routine operation and maintenance ofbasic infrastructure.

Additionally, the component will finance a series of social marketing and public awareness campaigns aimed at improving awareness of the importance of sustainable use and management of public services and infrastructure, informing community residents on project activities and fostering participation and cooperation.

Lastly, the component will support the mobilization of community liaison officers (CLOs) assigned full- time to each ICBSP community for the duration of the project. CLOs will staff the Community Centers and will have expertise in community organization, basic infrastructure, and crime and violence prevention. Specifically they will:

0 lead community consultations; 0 monitor the incidence ofcrime and violence in project areas;

14 0 update community safety plans and strategies; 0 coordinate the provision oftechnical assistance through external agencies; 0 coordinate project activities with relevant agencies and associations active in the community including public schools, health clinics, social programs, Community Development Councils and relevant security agencies; 0 facilitate the work of contractors of the infrastructure works to ensure integration of Crime Prevention Through Environmental Design (CPTED) principles; 0 identify and work closely with youth at-risk in the community; 0 organize and mobilize the community members around public safety campaigns; and 0 facilitate the implementation of additional social programs in the Community Centers such as summer camps for at-risk youth, etc.

The implementation of component two will take place in the context of a broader preventive, multi- sectoral, and community-based approach to crime and violence prevention described in greater detail in Annex 4.

Component 3: Project Management (US$6.33m, of which US$2.83m is Bank financing) The component will finance consultant services, goods, training and operating costs for the project management and administration. In particular, the component will include two subcomponents: (i)project management, monitoring and evaluation; and (ii)operating costs and other services.

Subcomponent 3.1 - Project Management, Monitoring and Evaluation (US$ 4.73m, of which US$ 2.83m is Bank financing) will finance goods, services and training for program management. In particular, the component will finance services for technical and financial audits, citizen report cards, mid-term and end-of-project evaluation, IS0 14000 certification and related external consultant services for project administration. The subcomponent will also finance JSIF core professional and technical staff for project management including a Program Manager, Supervision Engineers and specialists in the areas of crime and violence prevention, social development, microfinance, safeguards compliance, finance, procurement and related project management areas. Core staff will be recruited on time-bound contracts not exceeding the life of the proposed Project. Lastly, the component will finance the procurement of vehicles, office equipment and furniture.

Subcomponent 3.2 - Operating Costs and Other Services (US$ 1.60~2,all counterpartfinanced) will be financed 100 percent by the Government and will support operating costs and minor services. In particular, with respect to operating costs, the subcomponent will finance office rental costs, utility fees, stationary, vehicle maintenance and petrol, travel and per diem and the salaries of administrative staff in addition to other basic operating expenses. Additionally, the subcomponent will finance the provision of core CBO training services by the Social Development Commission.''

Operations, Maintenance and Cost Recovery Two distinct strategies for operation and maintenance (O&M) are proposed under the project accounting for differences between inner-city and peri-urban project areas. First, a strategy of community-led O&M is proposed for smaller and more unified project areas that also have demonstrated CBO capacity. Second, in larger, fragmented communities the project will develop with responsible agencies

'' The Social Development Commission (SDC) is a non-autonomous Government agency that cannot participate in a competitive selection process for consultant services contracts for CBO capacity building under Component 2 ofthe project. Nonetheless, the Government has requested that the SDC be incorporated into the project design and, given limitations imposed by Bank procurement guidelines, has agreed to finance this activity in its entirety.

15 arrangements for adequate O&M. Under both O&M arrangements both community and service agencies will have distinct responsibilities outlined in a series of Memoranda ofUnderstanding (MoU).

Communitv-managed O&M: Under the first strategy for O&M in smaller and/or unified communities the Project will support the formation of Community Committees and build the capacity of these committees to perform routine maintenance tasks including drain cleaning, street sweeping, clearance of brush and weeds and the maintenance ofgarbage bin sites. These committees will also liaise with service providers to ensure that more substantial and technical periodic O&M requirements and service quality issues are addressed. Project areas where a community-led O&M strategy is possible includes:

0 TawesPen 0 Central Village 0 Lauriston 0 Bog Walk 0 Bucknor 0 Flankers

O&M led bv Service Providers: In larger and/or more fragmented inner-city areas with weaker community institutions the project will support a strategy for O&M that relies to a greater extent on service providers and parish councils while gradually building community capacity over time. MoUhave been negotiated with primary service providers to outline roles and responsibilities and will be finalized and signed as part of implementation arrangements. Table 6 below identifies responsible agencies for O&M in key sectors.

Table 6: O&M Responsibilities by Sectors

Project areas where the service provider-led O&M arrangements will be employed include:

0 Dempshire PedJones Pen (Shelter Rock)

0 WhitfieldTown 0 Passmore Town/Browns Town (Dunkirk) Jones Town 0 March Pen (Africa)

Cost Recoverv: The project recognizes that cost recovery is critical to the sustainability of project investments. A strategy for cost recovery is being formulated. This aims to develop mechanisms for community contributions towards: (i)the cost of initial capital investments for basic infrastructure; and (ii)ongoing user fees for the provision of water, solid waste, electricity and related services. The approach of mobilizing community contributions towards initial capital investments builds on JSIF experience under NCDP, in which communities have been required to provide up to 20 percent of project costs in cash or in kind. JSIF has developed a methodology for valuing in-kind contributions and this has been reflected in its Operations Manual.

16 Economic analysis conducted for this project (see Annex 12) found that certain infrashcture investments were not economically feasible or affordable based on willingness-to-pay data at an estimated community contribution of20 percent. This finding was confirmed by JSIF experience with community contributions under NCDP projects in inner city areas where the purchasing power of residents is particularly low. Based on this analysis the ICBSP has determined a level of 5 to 10 percent for community contributions towards capital costs.

4. Community consultations An extensive process ofcommunity consultation and focus groups has informed project identification and design. The consultation process was led by JSIF and consultants to the agency to ensure that the selection of project investments was both demand-driven and the most appropriate and least-cost among technical alternatives. The consultation process engaged over 1,000 community members through over 120 formal meetings and focus group discussions. Additional outreach has taken place though frequent informal dialogue between JSIF community liaison officers (CLO), technical consultants and community leaders and residents. Feedback from communities was also solicited through a rapid voluntary questionnaire to which over 34 percent ofhouseholds responded.

The community consultations provided a rich foundation of diagnostic information, needs assessment feedback and public safety audit data upon which project planning and design were developed. Four key phases of consultation took place during preparation: (i)public awareness-building, diagnosis and needs assessment; (ii)participatory public safety audits and planning; (iii)infrastructure planning focus groups; and (iv) focus group discussions in integrated neighborhood ~1ans.l~The extensive consultation process proved critical in building trust and confidence between JSIF and communities and also within project areas - many of which are deeply fragmented according to political and gang affiliations. The dialogue process was also partially successful in aiding community leaders to negotiate truces between rival gangs. JSIF did encounter real limits to the extent to which communities and residents were willing to communicate openly regarding crime and violence patterns; residents often did not feel comfortable sharing information and data on the incidence and root causes of violent crime. Annex 14 provides a more detailed discussion ofthe consultation process.

5. Lessons learned and reflected in the project design The project design reflects important lessons from international best practice and Bank experience in urban upgrading, crime and violence prevention, tenure regularization, microfinance, monitoring and evaluation and environmental management. The project also builds upon lessons from the preparation and implementation of the Bank-financed NCDP and other ongoing or recently implemented donor- financed and Government urban infrastructure and crime and violence prevention programs. Key lessons incorporated include:

0 Collaboration with local governments and service providers for effective technical solutions and O&M arrangements. International experience with urban infrastructure interventions targeting the poor has found that involving local governments and service providers in the planning, design and negotiation of O&M arrangements is critical for the delivery and sustainability of basic services. Extensive discussions with parish councils, NWC, NSWMA, JPS Co., NWA and other agencies took place during preparation and both operating and maintenance agreements with key agencies have been negotiated and will be formalized in signed MoU as part of implementation. In the

'' A further scientific Household Baseline Survey was conducted under the project and has also provided valuable information on levels and access to services and preferences and perceptions of residents. The final report is included in the project files.

17 course of these discussions with service providers an agreement was reached to pilot innovative, low-cost solutions for service provision in poor informal settlements.

0 Community engagement in urban upgrading proiects. Bank and donor experience with integrated urban upgrading programs points to the need for extensive and continuous community consultation in preparation, implementation and monitoring. Extensive community consultation has informed project design (see section B.4 and Annex 14) as residents have articulated and jointly negotiated investment priorities, arrangements for O&M and mechanisms for the collection of community contributions. The project also aims to build the capacity of weak CBOs in project areas to assume a broader role in operations and maintenance and the execution of community infrastructure projects through community-based contracting.

0 Comprehensive approach to public safety enhancement. The project builds on lessons from successful urban crime and violence prevention programs in Jamaica, South Africa, Brazil and elsewhere in Latin America. Project design reflects principles of the CPTED approach to public safety enhancement through improved physical planning. Based on this methodology, a diagnosis of crime and violence patterns in all project areas was conducted to identify violent and gang activity hotspots and physical characteristics correlated with higher crime, i.e. zinc fencing, lack of street lighting and poor traffic management infrastructure. Findings are reflected in the design of infrastructure investments. Additionally, the component aims to replicate mediation, CBO capacity building, skill training early-childhood intervention, and recreational activities that have proven successful in parallel crime prevention programs in Jamaica.

0 Clear, transparent mechanism to create incentives for microfinance. Project beneficiaries identified a lack ofaccess to capital as a key constraint to small firm growth and job creation. The Bank evaluated two design alternatives to create incentives for microfinance institutions (MFIs) to lend in project areas - a guarantee fund and a performance-based disbursement mechanism. A review of international experience found that partial guarantee funds for microfinance had frequently failed due to difficulties with complex fund administration and monitoring, the lack of a direct incentive for lenders to increase exposure and the inherent disincentives to rigorous client evaluation and loan servicing arising from the availability of a partial guarantee to offset default. The Bank and the Government agreed on the use of a performance-based design for the subcomponent. The use of a performance-based mechanism in the microfinance sector is a recent innovation and has been tested successfully under the FOSIS2' program in Chile. The design for the component enables MFIs to bid on transparent, declining and time-bound subsidies to meet certain lending and portfolio quality targets in project areas. This approach is much easier to administer than a guarantee fund and rewards MFIs for increased lending and strong portfolio performance. See section D.3 and Annex 4 for greater detail on component design and the benefits ofa performance-based approach.

0 Improved environmental management through IS0 14000. The project builds upon the growing international experience of public sector agencies seeking IS0 14000 certification for environmental management as a means to strengthen environmental performance, increase efficiencies in operations and achieve international management standards. It also aims to increase client satisfaction and attract international donor support. JSIF initiated the process of IS0 14000 certification during project preparation and plans to secure the IS0 14001 Environmental Management Standard in 2008.

0 Participation and communication in tenure regularization. A pilot tenure regularization program has been developed under the project building on lessons from international experience with urban land titling programs and Jamaican initiatives with rural and urban land titling through the LAMP

2o Fondo de Solidaridad y Inversidn Social (FOSIS).

18 and NHDC programs. Key lessons incorporated into the pilot include the need to link titling with urban upgrading programs, engage communities actively in the process and provide information through innovative campaigns on the benefits oftitling amongst others. Rigorous impact evaluation to measure results. The project incorporates best practice in impact evaluation building on ongoing experience in Bank operations in Brazil, Indonesia, Swaziland, Tanzania and Iran. The impact evaluation is also linked to a broader World Bank initiative, Development Impact Evaluation (DIME), which is aimed at increasing the number of Bank projects with impact evaluation components in particular strategic areas and themes, and building a process of systematic learning on effective development interventions based on lessons learned from solid evaluations. During preparation a household sample baseline survey was conducted in 12 project areas and four control group communities thereby enabling the Government to conduct scientific impact evaluation at project mid-term, completion and five years after completion. The use of best practice impact evaluation methodologies will allow Jamaica and the Bank to more effectively measure results, identify successful components, chronicle unintended impacts and provide concrete guidance for the design offuture operations.

6. Alternatives considered and reasons for rejection A range of instruments was considered during identification and preparation prior to reaching agreement with the Government on the current SIL. Alternatives were evaluated with respect to the technical appropriateness of the instrument for meeting the Government’s strategic priority of reducing poverty, mitigating violent crime and reducing social isolation in poor urban neighborhoods. Alternatives considered included: (i) A sector-specific standard investment loan (SIL) for water and sanitation, solid waste or transportation was considered as a way to address important sector investment and reform priorities that could have a direct impact on poor urban neighborhoods. A key limitation for such an operation would have been the inability to address service deprivations faced by poor urban residents across multiple sectors - water, sanitation, solid waste, drainage, roads and electricity and the associated need for territorial planning and crime and violence mitigation initiatives. (ii) A communitv infrastructure SIL building more closely on the successful NCDP design would have enabled JSIF to leverage existing expertise, systems and procedures. NCDP relies heavily on the capacity of community-based organizations (CBOs) to identify, prepare and implement community infrastructure projects. Preliminary scoping for this operation, however, found that CBO capacity in poor urban areas is extremely weak with many communities sharply divided internally based on gang or political party affiliations. (iii)A municipal develoument SIL with poverty-focused urban infrastructure investments and parish council capacity-building was also considered given that parish councils have legal responsibility for providing basic services to inner city and poor urban areas. However, central government agencies have either failed to transfer responsibility for some decentralized public services or have assumed this subsequently, due to poor management. Central government agencies - NWC, NWA and NSWMA - are the primary providers of water and sanitation, solid waste, drainage and transport infrastructure services. Additionally, parish councils lack access to adequate revenue sources, and do not have tariff setting authority to ensure cost recovery. (iv) A dedicated crime and violence prevention SIL, LIL or TAL to finance technical assistance and consultant services to support mediation, community capacity-building, job skills training, recreational activities and other public safety initiatives was considered during identification. However, community consultations conducted during preparation revealed a strong demand for improved basic infrastructure services and highlighted the strong correlation between inadequate infrastructure services (poor street lighting, informal zinc fencing and traffic management

19 infrastructure) and vulnerability. Parallel USAID, DFID and IADB supported crime prevention programs in Jamaica have also emphasized the importance of reinforcing public safety enhancement initiatives with the provision ofbasic services. (v) An APL focusing; on integrated inner citv and urban develoument similar in scope and design to the current project was considered. An APL would have enabled the Bank to support the development of a Government policy framework and medium-term program to regularize, upgrade and increase public safety in informal urban settlements. During preparation the Bank provided advisory assistance to the Government toward initiating a process for policy and program development in this area. However, the Government has indicated that it would prefer to proceed with the development of a policy or program on urban informal settlements on a parallel but separate track from proposed operation.

C. IMPLEMENTATION

1. Partnership arrangements The project builds on important partnerships with international development partners, including the Government of Japan, USAID, the United Nations Development Programme (UNDP) and DFID. The project has been prepared with a US$650,000 PHRD grant from the Government of Japan. The Government engaged both USAID and DFID in the process of establishing criteria for the selection of ICBSP project areas. CIDA has committed to assist with IS0 14000 activities and facilitate a partnership between JSIF and a comparable Canadian agency.

Close cooperation will be maintained throughout the project period to maximize synergies with complementary programs, particularly in the area of crime and violence prevention. The Ministry of National Security has established a convergence group, to be chaired by the Managing Director of JSIF, to promote communication and collaboration among crime and violence prevention programs, including the ICBSP and the DFID-funded Community Security Initiative (CSI). USAID is currently preparing a second phase of the successful Peace and Prosperity Initiative (PPI) and has agreed in principle to coordinate investments in at least two of the 12 selected ICBSP project areas. The second phase of the PPI will complement ICBSP interventions in these areas by implementing community policing and CBO capacity building activities based on existing successful methodologies used in Grants Pen and other areas. USAID has also expressed interest in exploring how its Healthy Lifestyles program- which includes an element ofcrime and violence prevention among youth - could work with the ICBSP.

Similarly, the Bank and JSIF have collaborated closely with the UNDP-financed Civil Dialogue for Democratic Governance Program. UNDP has also committed to mobilizing the dialogue initiative in ICBSP to support community leaders to build advocacy, communications and partnership skills. Efforts are also underway to promote complementarity among infrastructure investments.

Further details ofrelated programs financed by Jamaica’s international development partners are provided in Annex 2.

2. Institutional and implementation arrangements The JSIF serves as the implementing agency for the ICBSP project. JSIF has an established track record in implementing GoJ poverty alleviation projects including the ongoing Bank-financed NCDP. Through the implementation of NCDP, JSIF has developed a core competence in Bank safeguard policies and financial management and procurement procedures. JSIF is also currently implementing OPEC, CDB and EU-financed social investment programs along the lines of the NCDP initiative. JSIF has a well

20 established management structure that aims to ensure efficiency, effectiveness and innovation in implementation. The Board of Directors, which meets on a monthly basis, will provide general oversight and policy direction during project implementation and will review the results ofperiodic monitoring and evaluation activities. During preparation a Steering Committee was formed. This includes representatives from PIOJ, Cabinet Office, NSWMA, NHT, NHDC and the Ministries of Land and Environment, Water and Housing and Local Government and other agencies. The Steering Committee has met on a bimonthly basis to review progress in preparation. Upon effectiveness, the terms ofreference and the composition of the committee will be reviewed and possibly reformulated to ensure the involvement of all relevant Government agencies and ministries to ensure effective oversight in implementation.

JSIF internal management will participate in internal management reviews and bid evaluation committees and will give guidance to implementation activities. Management review and committee meetings are held on a weekly basis. The ICBSP unit within JSIF will be led by a Project Manager and will oversee daily implementation. The project will recruit a full staff of supervision engineers, finance specialists, procurement specialists, community liaison officers, crime and violence specialists, social specialists, environmental and safeguards specialists and other administrative staff. During recruitment the project will consider the possibility of transitioning staff currently working on NCDP to ensure continuity and staff capacity development. The two projects will overlap for approximately one year. The ICBSP project will rely upon core or shared JSIF staff for MIS, human resources and finance and administration functions.

Key management, monitoring and evaluation reports will include: Monthly internal reports to JSIF Management and Board Monthly Community Contribution Reports Quarterly FMR to the World Bank and the Jamaican government Bi-annual Reports on Gap Filling Measures with respect to Use of Borrower Systems compliance Biannual reports based on Citizen Report Card JSIF Annual Report to shareholders, also circulated to relevant stakeholders Annual audit reports based on financial audit ofthe JSIF by external auditors Technical Audit of quality of infrastructure at mid-term and end of project Mid-term evaluation ofICBSP interventions End-of-project evaluation

Operations Manual: Relevant amendments including the Environment Management and Land Acquisition and Resettlement Policy Frameworks to the JSIF Operations Manual have been reviewed by the Bank and adopted by the JSIF Board on February 22,2006.

Coordination in Implementation: Due to the multi-sectoral nature ofthe project, a range ofpartner public agencies, donors and external institutions will be associated with the implementation of project components. The project will rely on cooperation agreements - or MoU- with key project partners. MoU have been prepared and negotiated and signed versions of the agreements will be finalized as part of implementation.. MoUJSIF and the following key agencies have been prepared: National Water Commission (NWC) National Solid Waste Management Authority (NSWMA) Rural Electrification Programme (REP) Jamaica Public Services Company (JPS Co.) Parish councils

21 Implementation ofElectricity Connection Regularization through a Public Agency: Under Component 1.1 the Project will support the provision of legal electricity connections through the Rural Electrification Programme (REP), a limited liability company and an agency of the Ministry of Commerce, Science and Technology. In this case a competitive process for selection is not feasible given that the regularization of electricity connections can only be done by REP. The JSIF Operations Manual and the MoU between JSIF and REP outline in detail specific activities, unit costs and arrangements of execution. A majority of expenditures for the implementation of the activity will be procured through a competitive process from contractors with the involvement of REP in the definition of specifications and the evaluation of bids. Additionally, REP will have access to a Force Account for the administration of the activity to finance administrative costs associated with implementation including the cost of work supervision, site preparation, technical supervision and approvals.

Partnership arrangements with international donor Droaams: The project will include formal collaboration with ongoing and planned USAID and UNDP interventions. USAID is currently preparing a second phase of the successful Peace and Prosperity Initiative (PPI) and has agreed in principle to coordinate investments in at least two of the 12 selected ICBSP project areas. The second phase of the PPI will complement ICBSP interventions in these areas by implementing community policing and CBO capacity building activities based on existing successful methodologies used in Grants Pen and other areas. Similarly, the Bank and JSIF have collaborated closely with UNDP-financed Civil Dialogue for Democratic Governance Program. UNDP has also committed to mobilizing the dialogue initiative in ICBSP to support community leaders to build advocacy, communications and partnership skills.

Stakeholder coordination: Given the broad spectrum of agencies that will be involved in the project it is envisioned that quarterly review meetings will be held with all partner agencies involved in implementation. These include - but are not limited to - NWC, NSWMA, SDC, USAID, CSI, Parish councils and the Ministry ofNational Security.

3. Monitoring and evaluation of outcomes/results A monitoring and evaluation framework has been developed for the project to effectively track progress in implementation, measure intermediate outcomes and evaluate project impacts. The framework incorporates and integrates mechanisms for ongoing process and operational monitoring, annual citizen report card surveys and scientific impact evaluation. Annex 3 outlines the framework in detail including key performance indicators, data collection methods, a timetable for collection, responsible agencies and mechanisms for institutional review and feedback. Key elements ofthe M&E framework include:

0 Process Monitoring and Evaluation: A system of continuous project monitoring has been developed based on inputs recorded in a Management Information System (MIS) and through bi- annual participatory rapid appraisals (PRA) and focus group discussions. Results will be presented formally through bi-annual Project Progress Reports. These will measure progress against a series of key indicators summarized in the results framework in Annex 3 and other key management and operational indicators.

0 Biannual Citizen Report Cards: The project will measure consumer perceptions and satisfaction with the project and the quality of basic services through citizen report cards - building on international best practice with this instrument - biannually at the end of years one and three of project implementation.

0 Baseline Survey and Impact Evaluation: A baseline sample household survey was conducted during preparation in the 12 project communities and four control communities to serve as the basis for impact evaluation and to establish quantitative targets for implementation. The project aims to conduct a mid-term impact evaluation that will analyze through quarterly monitoring

22 information and involve a sample household survey focused on key performance indicators. An end-of-project impact evaluation is also planned. Lastly, GoJ has agreed in principle to finance a third impact evaluation five years after project completion to measure the sustainability ofproject interventions.

The framework also outlines clear mechanisms for the review of monitoring and evaluation results and feedback into management decision making. Results fi-om operational monitoring activities will be discussed in bi-weekly CLO meetings, monthly JSIF management reviews and quarterly ICBSP steering committee meetings. Each level of review will be able to take appropriate decisions on adjusting operating practices or adapting program strategies. JSIF will be responsible for overall management of the monitoring mechanisms while PIOJ will provide technical supervision for impact evaluation.

4. Sustainability The main factors associated with the sustainability ofproject interventions can be organized around three key areas:

Basic Infrastructure Services: The sustainability ofbasic infrastructure investments and services provided under the project will depend to a great degree on the quality and effectiveness of arrangements for operations and maintenance, cost recovery and beneficiary involvement in the delivery and management of community infrastructure. A key constraint in the Jamaican context is the poor track record of service providers for water, sanitation, roads, solid waste and electricity in developing innovative mechanisms to reach and service the urban poor. NWC, for example, declined to service inner city communities in the near-term with metered individual connections due to crime and violence concerns and the unwillingness of some consumers to pay tariffs and fees. Similar concerns were expressed by JPS Co. - the national electricity utility.

The project is negotiating detailed arrangements for operation and maintenance ofpublic services with the utilities and local governments concerned. These arrangements aim to build confidence between service providers and communities through innovative - and often interim - arrangements for maintenance and cost recovery. In the case ofwater, the NWC has agreed to service ‘high-risk’ ICBSP communities with bulk water at a flat-rate tariff. Individual consumers will assume responsibility for paying their own bills. Community-based organizations will also work to facilitate cost recovery from households through community awareness and education campaigns. Based on a track record of solid repayment, NWC will consider extending individual metered connections to consumers on a demand-driven basis. Similar arrangements have been negotiated with NSWMA. Under these, the project will finance the purchase of disposal trucks to be operated by the agency or subsequently be leased to private operators who secure service contracts for ICBSP communities. Parish councils and CBOs will again work collaboratively to ensure cost-recovery. Final arrangements for operations and maintenance and cost recovery are reflected in the JSIF Operations Manual and in the MoUwith each service provider.

Public Safetv: The ability to enhance public safety in project areas will have a strong impact on the sustainability of project investments. Violence and insecurity in inner city communities disrupts the provision of water and sanitation service, regular solid waste collection and the delivery of other basic services. Periods of extended street violence - in addition to causing indiscriminate injury and death - limit freedom of movement causing children to miss school and residents to lose out on earning opportunities through missed work or the lack of access to markets in the case ofthe self-employed. The project will finance a series of crime and violence prevention interventions including mediation services, youth and adult skills development and education, and recreation facilities as a means to ‘secure and maintain the peace’ in the short term. However, the extent to which enhanced public safety is achieved and sustained beyond project implementation will depend to a large degree on the strength of community

23 organizations and their ability to mediate conflicts, advocate on behalf of communities and facilitate access to services over time. The project will also finance an intensive program of capacity-building initiatives for community organizations that aim to build these core mediation, advocacy and partnership skills.

Microfinance: A key project objective is to catalyze a deeper and broader engagement of financial institutions (FIs) in urban informal settlements. Microfinance institutions are currently unwilling to service inner-city areas broadly due to high levels of crime and violence and the associated risks that potential clients encounter - e.g. extortion and regular market closures. The component will pilot a declining performance-based subsidy mechanism to create incentives in the short-term for FIs to seek and service clients in the short-term. It is anticipated that a core group of FIs will develop during implementation methodologies and practical experience in servicing inner city and poor urban clients that will lead to the deepening ofengagement in this market segment.

Risk Mitigation

Overall Risk Rating: Moderate Increased crime and violence in project areas (High): In The project has developed a detailed methodology for recent years ICBSP project areas have to varying community participation and CBO cauacitv building that degrees experienced waves ofstreet violence driven aims to strengthen the role oflocal citizen groups in largely by turf wars between rival gangs. During these mitigating and mediating an upsurge in violence. JSIF periods - which can last for weeks and months - citizens community organizers have worked with local ‘area are at the risk ofphysical injury, unable to move freely leaders’ and community volunteers during project and have difficulty traveling to jobs, markets or school. preparation to attempt to ensure that periodic violence Similarly, parish councils and utilities are unable to does not escalate or interfere with preparation activities. provide basic services, respond to complaints or collect In the event that violence escalates beyond the control of fees or charges. community leaders, the project has an understanding Periods ofstreet violence in project areas could: (i) with the Ministry ofNational Security under which interrupt the implementation ofcapital works, social and security agencies will intervene to quell periods of microfinance activities; (ii)threaten the safety ofJSIF aggressive street violence and commit police officers to project staff; and (iii)limit the possibility ofregular patrol areas. maintenance andor the provision ofbasic services (e.g. Additionally, the project incorporates a series ofshort- water, solid waste collection). term and medium-term initiatives that have a demonstrated track record in mitigating crime and violence in Jamaica and internationally. These include: (i)public-safety-sensitive physical planning; (ii) mediation initiatives; and (iii)job training and skills development targeting vulnerable groups. It is important to note that given the highly unpredictable nature ofgang-related crime and violence outbursts, a residual risk will remain even after the implementation ofthe above-stated mitigation measures. Unsatisfactorv use ofborrower svstems (Moderate): Environmental Management and Involuntary This is one ofthe first and few pilot projects for the use Resettlement Frameworks acceptable to the Bank have ofcountry systems for environment and involuntary been approved by the JSIF Board and publicly disclosed resettlement safeguards. Although the potential impacts and incorporated into the JSIF Operations Manual. The related to the environment and involuntary resettlement frameworks update JSIF procedures for the management are expected to be relatively minor, there is some risk ofenvironmental and social safeguards. Additionally, that JSIF as the implementing agency may not be able to staff has been designated to supervise safeguard sustain its past good performance in dealing with implementation and will be trained in Bank safeguards environmental and social safeguard issues. This may be policies early in implementation.

24 brought about by changes in management or key staff, or through insufficient government oversight and JSIF has initiated a program to achieve IS0 14000 monitoring. certification over the next two to three years. Adoption by JSIF of an internationally recognized environmental management system specifically designed for organizations will contribute to good environmental performance bv both management and staff. Inabilitv to establish cultures ofcommunity engagement, The project aims to strengthen the cauacity of ownershiu and uavment (Moderate-High): Citizens in community organizations to assume greater ICBSP communities are largely disaffected with and responsibility in mobilizing local residents and distrustful ofpublic agencies. Levels ofcommunity maintaining basic services in collaboration with service mobilization and participation in civic groups are agencies. Additionally, residents will be required to extremely low. A large proportion ofresidents also provide a 5 to 10 uercent community contribution either argue that they should not pay for basic services, citing in cash or in kind for the provision ofa bundle of political promises, histories ofnon-payment, and the infrastructure services. The project - through JSIF perception that middle-income neighborhoods receive CLOs and education campaigns - will aim to increase higher levels of service while also avoiding payment. awareness ofcitizens about participating in construction and provision, as well as maintaining and paying for basic services. Breakdown in cooueration agreements with service During preparation JSIF has had extensive consultations providers. local governments and security agencies with service uroviders. uarish councils and security JModerate): The project aims to develop MoUs with agencies to ensure that clear and realistic arrangements NSWMA, NWC, NWA, JPS Co., REP and parish were reflected in MoU. MoUalso express and reiterate councils under which each agency agrees to provide agency responsibilities under the law to adequate service certain levels ofservice, implement a maintenance communities. In order to reinforce the MoUwith the program and undertake other mutual commitments. NSWMA- and given limited capacity in the agency - MoU, however, are not legally binding and service the project will finance the purchase ofgarbage disposal providers andor local governments may fail to honor trucks that will be operated by NSWMA or leased to agreements with respect to ICBSP project areas resulting private operators who are awarded service contracts for in a poor quality of service, inadequately maintained the project areas. Similarly, as a means to create assets and an increase in street violence. incentives for NWC, the project will finance selective off-site water and sanitation infrastructure that is both part ofthe NWC capital investment program and necessary to improve service levels in project areas. Limited demand for microfinance and tenure Results from the baseline survey indicate a high level of regularization sub-components (Moderate): The project demand for microfinance services - 62 percent of aims to pilot microfinance and tenure regularization sub- respondents expressed a demand for credit. Similarly, components in ICBSP communities that have had preliminary estimates suggest that 60 to 70 percent of limited exposure to such instruments. There is a residents are without clear access to tenure. potential risk that beneficiaries will not access Information and communication camuaigns will be microfinance services given expectations that the project developed and conducted in association with both will mobilize below-market interest rates. Similarly, components to clearly communicate the benefits to project beneficiaries may not seek land titling given participation and the terms and conditions ofeach perceptions ofde facto tenure in many areas and the cost subcomponent. of processing such applications.

6. Loadcredit conditions and covenants The following conditions and covenants have been determined: Loadcredit effectiveness:

0 Signing and adoption ofSubsidiary Loan Agreement between the Ministry ofFinance and the Jamaica Social Investment Fund (JSIF)

25 Covenants applicable to project implementation:

0 Training ofJSIF staff designated to apply the EMF and LARPF in environmental management, resettlement, and land acquisition is a condition for disbursement for subcomponent 1.1: Basic Infrastructure 0 The securing by each community concerned ofat least one public or private sponsor willing to cover at minimum 50 percent ofoperating costs, for at least one year, for its community center prior to the initiation ofconstruction of any particular community center under subcomponent 1.1 0 The finalization of subproject agreements between JSIF and respective community organizations is a condition for the execution of community infkastructure subprojects by project communities under subcomponent 1.1 using community-based contracting methods

Additionally, the project will have standard financial management requirements in legal agreements. These include the requirements to maintain sound financial management system, for annual audits ofJSIF statutory financial statements and the consolidated projects financial statements, submission of FMRs to the Bank on a quarterly basis no longer than 45 days after the end of each quarter.

D. APPRAISAL SUMMARY

1. Economic and financial analyses An economic and financial analysis of the project has been undertaken to assess whether project investments are in fact economically feasible. Results are presented in Annex 12. The approach for economic analysis of the ICBSP was to conduct detailed cost-benefit analysis (CBA) for water and sewerage services. A CBA for water supply was conducted for the Tawes Pen area. However, a number ofadditional physical and social investments financed under the project did not lend themselves to a cost- benefit analysis given the cost of carrying out such analyses for small projects of this nature and the inherent difficulty in estimating the benefits from these investments. Therefore, willingness to pay data was not collected for these variables through the Baseline Survey in order to avoid ‘respondent fatigue’. In such cases, a ‘reverse’ economic analysis was carried out for project investments unsuitable for CBA. This analysis aims to determine what the WTP would have to be to provide a 12 percent economic rate of return.

The Baseline Survey field tested a WTP question for enhanced security. However, the results of the field testing were inconclusive and it was decided not to apply such a question more widely. A similar ‘reverse’ economic analysis exercise has been conducted for all areas. Results are included below and in Annex 12. Lastly, the project includes pilot investments for microfinance and land titling. Due to the small-scale, pilot nature of such investments - and the difficulty in quantifying the economic impact of these investments - an economic analysis will not be attempted for these sub-components. The economic analysis ofthe project found that that investment in water supply and sewerage are economically feasible and details of these findings can be found in Annex 12. Additionally, the ‘reverse’ economic analysis found that, for most additional services that could not be subjected to CBA, the estimated WTP values were in reasonable and affordable ranges.

2. Technical A detailed technical review ofproposed infrastructure investments was conducted during preparation by a team of international consultants supervised by JSIF. The technical assessment involved an analysis of the feasibility of different technical alternatives for the menu of eligible investments including water, sanitation, sewerage, roads, drainage, electricity, solid waste collection, street lighting, community centers and the replacement of zinc fencing with alternative perimeter fencing (see Annex 4). Detailed feasibility

26 studies for the selected investments were prepared in the form ofNeighborhood Basic Infrastructure and Public Safety Plans for each of the 12 selected project areas. Consultants to JSIF have also prepared detailed engineering designs and bidding documentation for the tender of all work planned under the operation. The detailed designs and bidding documentation have been reviewed by the Bank. A committee of key service agencies - including NWC, NSWMA, JPS Co. and Parish councils - will also review and approve the designs.

3. Fiduciary Financial Management: The Bank conducted a Country Financial Accountability Assessment (CFAA) in Jamaica in 2001 and a joint CFPrAICountry Procurement Assessment Report (CPAR) in 2005, the results for which are currently being finalized. Both documents find that Jamaica has relatively well-established traditions of institutions and adequate rules for efficient management of public resources, as well as a relatively comprehensive framework for financial control and legislative oversight. In addition, Jamaica has implemented several reforms to modernize its public financial management. While these reforms are expected to result in increased efficiency and accountability in the use of public resources, a number of weaknesses have been identified. However, as far as the ICBSP is concerned, the impact of these weaknesses and risks is very limited given that the implementing entity, JSIF, has developed its own financial management system. As a result the overall country risk israted moderate.

The major inherent risks for the project relate to the CBC activity for the Basic Infrastructure subcomponent and the performance-based disbursement mechanism for the Access to Financial Services subcomponent. CBC activities are usually associated with greater risk because of the higher number of low value transactions and weaker capacity of the communities in charge of managing the resources. In the case ofthe ICBSP, the risk is mitigated by JSIF’s long experience in dealing with this type of activity. The project has made provision for capacity-building which will address weaknesses identified at the communities’ level. Although the FM capacity of the targeted communities has not been assessed yet, their limited number and the current estimated amount for the CBC activities (US$l.Om) will be mitigating factors. The assessment of the community FM capacity and subsequent capacity building is part ofJSIF’s standard approach in dealing with communities. Regarding the performance-based contract, detailed procedures have already been developed. The other activities do not present specific risks given their nature and JSIF’s experience in project management. Based on the above, the project fiduciary risk is rated moderate.

JSIF already has in place an adequate financial management system which will not require much adaptation to accommodate the needs of the ICBSP. The system already meets the Bank’s financial management requirements. For the ongoing NCDP, JSIF is up to date on the submission of the quarterly FMR and the annual audit reports. The quarterly FMR are of good quality. The audit reports have not raised any accountability issue or any significant internal control weakness. The main issue raised by the auditors which can still affect the ICBSP is the fact that the cost ofthe communities’ contributions in sub- project activities are only partially accounted for in JSIF’s financial statements. This issue has been addressed as part ofthe MIS and the operations manual revisions.

Procurement: A procurement capacity assessment (PCA) of JSIF has been updated. JSIF is currently rated ‘average’ with procurement ex-post review missions required every six months. Procurement staff has remained stable over the past two years and the procurement team consists of one Procurement/Legal Officer and two Contracts Officers. The updated PCA focuses on JSIF’s ability to manage an increased project load, larger contract packages and the range ofcontracting activities that are envisioned under the ICBSP. Infrastructure works under the project will be procured primarily through one oftwo mechanisms - larger formal contracting packages for network and off-site infrastructure and community-based contracting for small works. Procurement oflarger contracting packages for works and goods will be the

27 responsibility of JSIF but will involve in the definition of technical specifications key sector agencies with appropriate expertise including the NWC, NSWMA, JPS Co., REP and parish councils. JSIF has considerable experience in the use of CBC under NCDP and will build on existing systems and procedures. An assessment of CBO capacity to implement CBC has been included in the PCA.

The project will also contract NGOs and other providers of technical assistance to provide training and technical assistance services in association with the public safety and community capacity building component. Annex 11 details procurement procedures that will be followed for the project in addition to agreed institutional strengthening requirements.

4. Social The project will have a strong positive impact on over 60,000 residents of disproportionately poor inner- city and urban informal settlements. The subproject selection is aimed to target interventions to beneficiaries who are poor, lack adequate basic services and are disproportionately vulnerable to crime and violence. Results from the Baseline Survey demonstrate that selection targeting has been successful as only 43.2 percent of respondents in project areas reported having access to reliable water supply and only 5 1.1 percent reported access to in-house sanitation facilities. The process ofproject preparation was highly participatory and aimed to take into account views from a broad cross-section of community members (see Annex 14 for greater detail on the community consultation process). Women participated more than men in the consultative process and disproportionately emphasized the need for preventative counseling and livelihood-based strategies focused on youth to enhance public safety. JSIF will adapt and replicate this intensive consultative methodology for project implementation and the preparation of investment programs in new project areas where applicable.

Crime and violence in project areas was identified as a major cause of fatalities, mortality, loss of property and livelihoods, disruption to youth education and high levels of vulnerability for marginal groups - particularly women and youth. The project design aims to increase public safety through a series of infrastructure and social investments. The design of infrastructure investments has followed a participatory methodology by which community members assessed the relationship between their physical environment and levels of insecurity. Based on these consultations, physical investments in community centers, street lighting, replacement of zinc fencing with alternative perimeter fencing and traffic management measures were incorporated into project design. Additionally, the project has identified a series of investments in mediation and conflict management, youth livelihood and life skills development and education and recreation services that aim to enhance public safety in the medium term.

5. Environment The full range ofinfrastructure investments proposed under the project focus on basic service provision to poor communities for water and sanitation, drainage, street lighting, fencing etc., all ofwhich are aimed at improving living conditions within these poor neighborhoods and should in general have extremely positive environmental impacts. It is, however, possible that some investments could result in minor adverse environmental impacts unless appropriate design, construction and operational practices are followed. These impacts would be few and site-specific and are reversible in nature. In all such cases appropriate mitigating measures will be integrated as part of the technical designs of the respective investments.

6. Safeguard policies The Equivalence and Acceptability Assessment was carried out by a multidisciplinary team ofBank Staff and consultants, in co-operation with NEPA and JSIF staff members, and consultants. The results of the assessment indicate that the operational principles of EA policy (as stated in Table A1 of OP 4.00) and

28 the Jamaican EIA system (NRCA Act of 1991, and subsidiary legislation) are compatible in several aspects. The differencedgaps that are pertinent to the proposed ICBSP are minimal (see Annex 7) and are primarily due to a lack of clarity on EMP implementation arrangements. However, there are significant differences between Jamaican law pertaining to land acquisition, and the operational principles set out in Table A1 of OP 4.00. For example, the Land Acquisition Act of 1947 does not require the Government to provide replacement land or housing, nor does it require it to provide economic rehabilitation assistance to enable displaced persons to reestablish their livelihoods and incomes. And, cash compensation applies only to those project affected persons who can produce either a registered certificate oftitle or some other means of legal ownership, although there is a provision for Government to enter into equitable arrangements other than payment of cash compensation with persons having a limited interest in the land that is acquired.

JSIF Capacity for Implementation of Safeguard Policies: JSIF has a reasonably good track record for implementing its current environmental guidelines, and has specified a set of actions for its staff to address environmental concerns at every stage of project cycle. JSIF has recently recruited a full-time environmental and resettlement officer and has access to the services ofexperienced senior environmental consultants on a retainer basis. This combination of in-house staff, complemented by outside expertise that can deal with more complex issues, is working well. On the other hand, there is no precedent for land acquisition and involuntary resettlement in projects implemented by JSIF. However, it appears from a review ofJSIF’s documentation and a site visit that the consultation and planning procedures followed for infrastructure improvements in the target communities do indeed include consideration ofland acquisition and of alternatives to avoid such impacts. It is recognized that there is a need to clarify and document the consultation process and how it is sequenced with, and integrated into, the community planning process with indications of how and where in this process land acquisition is assessed, alternatives considered, and possible acquisition methods and compensation agreements agreed.

EnvironmentalAssessment: JSIF has prepared an Environmental Management Framework (EMF) and a Land Acquisition and Resettlement Policy Framework (LARPF) to address the differences (discussed above) between the Jamaican systems and the applicable operational principles as stated in Table A1 of OP 4.00. The EMF and LARPF were adopted by JSIF’s Board on January 25,2006, and has been integrated as a core part ofthe JSIF Operations Manual which was adopted with amendments by the JSIF Board on February 22, 2006. Thereafter these Frameworks will be applicable to all JISF projects, irrespective of the funding sources. In addition, as described in Annex 7, specific actions related to training, monitoring and reporting have been agreed with JSIF to achieve and sustain equivalence and acceptability. The Planning Institute of Jamaica (PIOJ) and NEPA have expressed interest in obtaining support from the Bank and other development partners to go beyond the pilot and upgrade their national EA system in line with the operational principles ofEA policy as stated in OP 4.00.

29 Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.0 1) 11 [XI Natural Habitats (OP/BP 4.04) [I Pest Management (OP 4.09) [I Cultural Property (OPN 11.03, being revised as OP 4.1 1) [I Involuntary Resettlement (OP/BP 4.12) [*I Indigenous Peoples (OD 4.20, being revised as OP 4.10) 11 Forests (OP/BP 4.36) [I Safety ofDams (OP/BP 4.37) [I Projects in Disputed Areas (OP/BP/GP 7.60)* [I Projects on International Waterways (OP/BP/GP 7.50) [I Piloting the Use ofBorrower Systems to Address Environmental and Social Safeguard Issues in Bank-Supported Projects (OP/BP [XI 4.00)

Cultural Property: The small-scale civil works sub-projects undertaken under the proposed project may lead to chance finds in one of the project areas (Spanish Town / St. Catherine), and simple procedures to assist identification and protection of such chance finds are described in JSIF Operations Manual, and will constitute standard provisions in construction contracts.

Consultations: A public consultation workshop was organized to discuss the draft version of the equivalence and acceptability assessment report in Kingston on November 1, 2005. A separate consultation workshop with community members and government representatives was held January 13, 2006 to discuss the draft Resettlement Policy Framework and Environmental Management Framework. Over 60 people attended each workshop. Participants expressed overall support for the pilot and agreed with the findings and gap filling actions proposed to achieve and sustain equivalence. The final version of the is full report and the final versions of EMF and LARF'F have been disclosed in the following places: (a) JSIF website; (b) the World Bank office in Kingston; and (c) the World Bank Infoshop in Washington DC.

7. Policy Exceptions and Readiness No policy exceptions are envisioned for the project.

At this stage of project preparation the team confirms that the implementing agency - JSIF - has taken appropriate measures to strengthen technical, environmental and fiduciary capacity. A series of further capacity-strengthening measures in the areas of environmental and social safeguards, procurement and financial management were implemented or programmed and are outlined in this project document. The task team also confirms that JSIF has taken appropriate measures to ensure the technical readiness of the operation.

* By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas

30 Annex 1: Country and Sector Background JAMAICA: Inner City Basic Services for the Poor Project

Country Background Jamaica’s economic performance has improved in recent years. Real annual GDP growth accelerated from 1.5 percent in 2001 to 2.3 percent in 2003 and is estimated at 1.5 percent for 2005. The recent improvement in economic performance follows an extended period of stagnation during 1991-2000. The improvement in growth is led by relatively strong performance in tourism, mining, agriculture and the recovery in the manufacturing sector. At the same time the Jamaican economy has been undergoing a gradual structural transformation. Between 1989 and 2002 the manufacturing sector declined from 20.0 percent of GDP to 15.4 percent while service sectors increased to 55.8 percent of GDP. A driving force behind this transformation is the growing importance of the tourism sector, including the impact this has on the construction and transportation sectors.

These changes in the economy have had an impact on the spatial organization of cities and towns. Business and industrial activity - particularly in the capital of Kingston - has gradually left city centers resulting in high levels of unemployment and declining investment in basic inner-city services.21 While, the overall poverty rate fell from 19.1 percent in 2003 to 16.9 percent in 2004, it is estimated that pockets ofurban poverty persist.22There is also a strong gender dimension to poverty. Female-headed households account for about two-thirds of the households in poverty and generally show a higher incidence of poverty in all surveys since 1989.23 The gender dimension of urban poverty in Jamaica is particularly acute. Of 57 cities surveyed by the UN-Habitat, two Jamaican cities (Montego Bay and Kingston) reported the highest difference in general poverty incidence and poverty amongst female-headed household^.^^

Jamaica’s inner cities are also at the center of the country’s growing crime and violence problem. A record 1,650 killings were reported in 2005. This amounts to 60.4 murders per 100,000 ofthe population. Approximately 12.1 percent of all households in the 2002 the Jamaica Survey of Living Conditions (JSLC) were victims of crime in 2001 and 1.2 percent of all households reported that a family member had been murdered in the past 12 months.25 High levels of violent crime can be linked to a pattern of politically motivated violence established in the 1970s and 1980s, and to the emergence of Jamaica as a major point for the transshipment of drugs from South America to the US and Europe. The economic stagnation during the 1990s contributed to high levels of unemployment and social deprivation. It also drove many qualified and professional people, particularly from the healthcare sector, to migrate abroad. This weakened the social infrastructure further. A complex relationship has evolved in recent years between organized crime and inner-city communities. By the 1970s, many such communities had become ‘garrisoned’ or segregated along political lines through intimidation and patronage, under the control of a local leader or ‘don’ with links to one of the main political parties. However, by the 1990s, the role of politics had diminished, and major criminal gangs - often involved in illegal narcotics and

2’ The GoJ refers to ‘inner city communities’ as the neighborhoods in the central area ofthe city in or bordering the historic core and central business district. These inner city neighborhoods suffer from decaying physical infrastructure, poor service provision, high population densities and sometimes considerable environmental hazards. More generally, the term ‘inner city’ is also used to describe slum settlements on the periphery of towns that suffer the similar lack ofaccess to services and social fragmentation. 22 PIOJ data. 23 World Bank. Country Economic Memorandum (2004) 24 hm>:iiwww.unchs.ornipublicationiAnalvsis-Final.pdf,page 2 1 25 Jamaica Survey of Living Conditions (2002).

31 extortion - controlled many neighborhoods, under the command of a new breed of dons. These major gangs have weakened in recent years, and many of the recent deaths are apparently due to intensifying conflict between smaller local groups. See Annex 13 for greater detail on crime and violence in Jamaica.

Crime and violence - coupled with growing poverty - has further exacerbated social fragmentation and the weakness ofcivic organizing in inner-city communities. A 1997 World Bank study ofUrban Poverty and Violence concluded that violence in poor urban communities erodes the two key assets vital to poverty reduction - labor and social capital. The report recommended projects that integrate the delivery of services with the development of civic institutions. The Government is also increasingly cognizant of the economic impact of crime and violence in terms of a worsening investment climate and diminished tourism sector revenues.

Jamaica has identified inner-city renewal - with a focus on crime and violence prevention - as a key priority. In 2002, GoJ developed a comprehensive inner-city renewal program which aims to ‘provide a general framework for integrating the dimensions of human, social, economic and environmental development’ of inner-city communities in Jamaica.26 The Government’s Medium-Term Socio- Economic Policy Framework (MTSEPF) identifies inner-city renewal as a key priority.27 In 2000, the Prime Minister of Jamaica established a committee ofsenior officials to oversee and coordinate all inner- city renewal interventions in the country. This proposed project’s focus on sustainable water and sanitation provision, crime and violence prevention and improved mobility and safety complements the GoJ program. Additionally, the Government has requested Bank assistance in parallel to Inner Cities Basic Services for the Poor (ICBSP) implementation for the preparation of a policy and program for the regularization and management ofinner city, urban and peri-urban informal settlements.

The Government has demonstrated a commitment to civic participation and strong performance in community-based service provision. The Social Development Commission of the GoJ has formulated a framework to enhance civil society participation through a three-tiered system ofpublic-civic committees. Community Development Committees (CDC) and Development Area Clusters are being formed at the neighborhood and neighborhood cluster levels, while Parish Development Committees (PDC) have already been established in every parish in the country. Additionally, the Jamaica Social Investment Fund (JSIF) was established in 1996 to reduce poverty and help create an environment for sustainable development. JSIF is currently executing the National Community Development Project (NCDP), financed by the World Bank and the Government of Jamaica. JSIF has considerable experience in financing community infrastructure projects in inner city communities - including those for critically needed water and sanitation, education, health and transport services. JSIF has also supported a range of community-based capacity building initiatives in inner-city neighborhoods to build social capital. The Government is committed to building upon the successful JSIF experience by deepening interventions in inner-cities in the areas ofwater, sanitation, crime and violence prevention and traffic management.

Sector Background Precise data on the quality of basic services in inner-city areas is not readily available. However, an analysis of aggregate data and recent studies suggests that the quality and coverage of basic services in inner-city communities is poor, with pockets of extreme deprivation in particular neighborhoods. Additionally, a Public Expenditure Review for inner city areas (currently in draft) was conducted during preparation to assess the quality and magnitude of public expenditure on inner city areas. Overall performance and service quality in key basic infrastructure sectors are poor and, in many cases, worsening. In particular:

26 ht~:llwww.pioi.~ov.jm/pioidocs/speciallfinalWHOLEDOC.htm 27 h~:llwww.uioi.~ov.i~uioidocslsueciallMediumterm.~df,page 44

32 0 Water Supply: In 2004 approximately 80 percent of consumers had access to potable water through either piped household connections or public standpipes, a decline from 84 percent in 2001.28 However, only 59 percent of the poorest quintile had access to a reliable source of water supply. For the water sector there is a lack of enforcement of payments leading to a lack of investment (including even ordinary maintenance) programs. Many target households either do not have a piped water connection in their homes or suffer from a lack of adequate water pressure. Improved provision ofthese services is high on all the communities’ priority lists.

0 Sanitation: For the sanitation sector, the sewerage system in all project communities either does not exist or is due for a major renewal. The household gray water is often separated from toilet waste and allowed to flow into storm drainage, where this exists, or otherwise allowed to flow along the sides ofroads, thus polluting adjacent properties on an intermittent basis during heavy rainfall. Where sewer networks do exist, they are badly maintained and in a very poor state; in some cases they have been decommissioned without immediate replacement.

0 Drainage: For storm water drainage, the accumulation of solid waste still remains the number one problem concerning flooding during periods of heavy rainfall. This can be ofparticular concern in poorer communities where solid waste is not segregated by the community. The heavy metal constituents (from batteries, petroleum products, cans etc) tend to accumulate on the ground after local flooding subsides, which can lead to direct or indirect ingestion by humans, with obvious long term health implications, particularly where there are public standpipes.

0 Solid Waste: Solid waste collection is a major area of concern in all the communities. The associated health implications oflimited and irregular solid waste collection are far reaching.

0 Electricitv: In the electricity sector, unaccounted-for net generation during the past 10 years is between 15 and 20 percent, most of which is attributable directly to theft of power (generally through illegal connections). Some inner-city communities have as many as 2-3 connections per house. Illegal connections are also a major safety issue in some ofthese communities.

Rationale for Bank Involvement The Bank is well positioned to support the proposed operation. First, in August 2004 Jamaica formally requested the assistance of the Bank to prepare and finance an urban infrastructure and public safety enhancement operation targeting inner-city and informal urban communities. The proposed project has been formulated in the context of the GoJ inner-city renewal program, formulated in 2002. A commitment to inner-city renewal was reinforced in the Government’s Medium-Term Socio-Economic Policy Framework (MTSEPF) in 2004.

Second, the World Bank Group Country Assistance Strategy (CAS)29 for Jamaica is closely aligned with the MTSEPF and focuses on three key pillars: (i)accelerating inclusive economic growth; (ii)improving human development and opportunity; and (iii)crime prevention and reduction. The proposed operation is closely aligned with all the pillars of the CAS and is specifically referenced in the strategy. In particular, the ICBSP project will reinforce the first CAS pillar through investments to improve the quality ofbasic infrastructure services for the poor. Additionally, the project is closely linked to the third CAS pillar on crime violence prevention. In this regard, the project has designed infrastructure investments in a manner that reinforces public safety. The public safety component will also finance technical assistance to

28 JSLC (2002). 29 Discussed by the Board on April 20,2005.

33 support mediation activities and multi-purpose community centers that would support youth and adult skills training, homework classes and related community capacity-building initiatives. The proposed project also reinforces the conclusions ofthe Country Economic Memorandum (CEM) which emphasized the importance of reducing crime and violence as this has a major impact on the investment climate, the competitiveness ofJamaican firms, and worker and firm productivity.

Third, the Bank will leverage its global experience in the preparation and implementation of integrated urban infrastructure projects and its increasing experience and knowledge base on crime and violence prevention.

Finally, the project will build upon the experience ofthe ongoing and successful Bank-supported National Community Development Project (NCDP) - being implemented by JSIF. JSIF has successfully implemented community infrastructure projects under NCDP in inner-city communities and has developed an effective mechanism for community-based contracting that will be replicated in the ICBSP project.

34 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies JAMAICA: Inner City Basic Services for the Poor Project

IP/DO Prqject Name Amount Ratings Focus National Community Development US$15.0m IP - S Other social services; water, sanitation and (P076837) DO - S flood; general education, health; and roads and highways Social Investment Fund (P039029) US$20.0m IP - S Central government administration; health; DO - S roads and highways; water, sanitation and flood prevention; community capacity- building; and other social services

Social Safety Net (P067774) US$40.0m IP - S Other social services, and central government DO-S administration Reform of Secondary Education I1 US$39.8m IP - U Secondary education (PO7 15 89) DO-S I I I

Project name Amount Lender I Donor Focus

Poverty Reduction Program 6.0m Euro EU Community-driven infrastructure projects

Jamaica Urban Poverty da DFID Small community projects and policing for the Program (JUPP) Inner City Development plan, of which the 1994 Jones Town Development Plan was a pilot project

Basic Needs Trust Fund US$2.8m CIDA Funds projects implemented by JSIF

Parish Infrastructure US$50.0m IADB Institutional strengthening, technical assistance Development and improving project management for parish based infrastructure.

Kingston Urban Renewal US$lSm IADB Urban upgrading, CBO building and economic development and training in the Tel Aviv and South side areas ofdowntown Kingston.

Project Name Amount Lender I Focus Donor Northern Jamaica Development US$ JBIC Port expansion at Ocho Rios; Northern Coastal Project 86.0m Highways improvement; Montego Bay drainage and flood control; and the Lucea - Negri1 water supply system. Kingston Metropolitan Area US$6.0m JBIC Improvement of sewerage system in KSA and Water Supply and Rehab Portmore. National Road Services US$ IADB Modernization and strengthening ofroad sector Imtxovement 18.5m administration.

35 Northern Coastal Highway US$ llOm IADB Rehabilitation and reconstruction ofapproximately Improvement Projec (SEGI1)t 97 KM ofMontego Bay - Ocho Rios highway

Northern Coastal Highway US$ EU Construction, rehabilitation and maintenance of Improvement Projec (SEGII1)t 97.8m highway between Ocho Rios and Fair Prospect (Portland) Rural Water Supply project US$ EU Improving rural water supply 13.0m Flood Rehabilitation US$ CDB Rehabilitation ofroad infrastrustructure island-wide 35.0m to facilitate the restoration ofproductive capacity and growth Emergency Reconstruction US$ IADB Reconstruction and rehabilitation offlood-damaged Facility 20.0m infrastructure

revention, judicial strengthening Project Name Amount Lender I Focus Donor Peace and Prosperity Initiative US$ 3.0m USAID Crime and violence mevention Budget Support to Justice and US$4.0m EU Judicial strengthening National Security Ministries Community Security Initiative GBP 3.15 DFID UK Key GoJ policy program to link police modernization program and social development by working with youths, communities etc. as well as with police force to restore a sense ofpeace and order in crime-ridden communities. Operation Kingfish da DFID UK Highprofile GoJ program. Targets drug trafficking and aims to disband major criminal gangs Citizen's Security and Justice US$ IADB Enhancing citizen security and justice through an Program 18.5m integrated national crime and violence prevention strategy and building capacity ofsecurity agencies and the criminal justice system. Civil Dialogue for Democratic US$ 3.5m UNDP Encouraging CBOs to work together and with Governance national interest groups, to find ways to tackle crime, violence and corruption and create jobs Budget Support to the Ministry US$4m EU Building law courts, providing technical assistance ofJustice and Ministry of and implementing the nationwide Safe School National Security Program, which aims to reduce crime and violence Human Rights Information nla EU Country-wide program focusing on access to Assistance Program information and assistance to prison inmates Youth at Risk I da I EU Youth programs in St. Catherine Various programs nia Other US Training for the Jamaica Constabulary Force and Govt. armed forces, and other initiatives vs. crime, agencies violence, drug trafficking, coastal water monitoring.

36 Annex 3: Results Framework and Monitoring JAMAICA: Inner City Basic Services for the Poor Project

Monitoring and Evaluation Framework A monitoring and evaluation (M&E) framework has been developed for the ICBSP project to track progress in implementation, measure intermediate outcomes and evaluate project impacts. The framework outlines key performance indicators, data collection methods, a timetable for collection, and responsible agencies. It is reflected in detail in the revised JSIF Operations Manual. This framework forms part of a project management and evaluation system that will be used to supervise and monitor the implementation ofthe ICBSP project. Methodology and Objectives The M&E framework for the ICBSP aims to integrate process monitoring and both medium- and longer- term project impact evaluation, utilizing in the results framework a mixture of outcome and process indicators, The framework aims to capture direct social, physical and human capital benefits in the selected communities. Monitoring will be carried out on a regular basis in all 12 ICBSP communities through a combination of technical supervision, participatory focus group discussions, consumer satisfaction surveys and ongoing project information management. The JSIF MIS will be the central vehicle through which the project will track key operational and process monitoring indicators. A sample household baseline survey has been conducted in the 12 project areas and three control communities to serve as a basis for effective impact evaluation. Mid-term and end-of-project impact evaluations planned under the project will enable Jamaica to effectively assess the overall success of the project and that of discrete components. These lessons will be valuable in aiding the Government to identify critical investments and reforms that reduce poverty, build community capacity and increase public safety in inner-city and peri-urban communities. Baseline Household Survey: A socio-economic household baseline survey has been carried out in a representative sample of households in the 12 ICBSP communities and in four control communities with characteristics similar to the project communities. The survey measures the beneficiaries’ current status and perception ofthe availability and use ofinfrastructure services and utilities, level ofsocial and human capital, income (by proxy) and perceptions and incidence of crime and violence in their community. Results from the survey are reflected in this project document and a complete report included in the project files. Control communities were selected and surveyed based upon five key factors of similarity with ICBSP communities including: (i)form and type of housing; (ii)population density; (iii)location and location type (e.g. urban, peri-urban, rural); (iv) level of basic services available; and (v) prevailing socio-economic conditions. The control communities for the ICBSP are Hayes (Clarendon), Ellerslie Pen (St. Catherine), Delacree and Swallowfield (Kingston and St. Andrew). The baseline survey in project and control areas enables the effective measurement of impact. Process Monitoring and Evaluation: Continuous project monitoring will be based primarily on inputs recorded in a Management Information System (MIS) and through quarterly participatory rapid appraisals (PRA), focus group discussions and annual sample consumer satisfaction surveys ofbeneficiaries through Community Committees and JSIF Liaison Officers. Results will be formally presented in Bi-annual Project Progress Reports. These will measure progress against a series of key indicators summarized in the results framework below and other key management and operational indicators to be identified between JSIF and critical external stakeholders. Mid-Term Evaluation: The mid-term evaluation will include an audit of the bi-annual Project Progress Reports and a sample household survey in ICBSP communities. Progress and primary data will be analyzed against key indicators in the results framework. In an effort to minimize costs, the mid-term household survey will utilize a reduced survey instrument - as compared with that used for the baseline

37 study -focusing on key impact indicators. Additionally, the evaluation will be conducted in a reduced sample ofICBSP communities. Impact Evaluation: The Government aims to conduct two impact evaluations - at project completion and five years after completion - to assess project impacts on beneficiary households and communities over time. The end-of-project impact evaluation will be conducted in all 12 project areas and the control groups. This survey will form the basis of an ICBSP impact evaluation and will be supplemented by a mix of data sources including focus group discussions with beneficiaries and selected secondary sources such as reported crime statistics, hospital admittance for violence-related injury in project areas. Jamaica also aims to conduct a second impact evaluation five years after project completion to measure the sustainability of project outcomes. A methodology for this impact evaluation will be developed during project implementation. Assessing Impact on the Incidence of Crime and Violence: The Project does not explicitly include as a development objective the reduction of crime and violence in project areas given the complexity ofcausal factors that influence crime and violence trends. Nonetheless, the Government does aim to measure the impact ofpublic safety enhancement activities under Component 2 of the Project on the incidence crime and violence in project areas through the system of process monitoring and impact evaluation methods described above. The baseline survey conducted during preparation did collect data on the incidence of crime and violence in project and control areas thereby enabling subsequent evaluations to estimate the real impact of project interventions that aim to enhance public safety. Additionally, the Project will aim to develop during implementation a community-based system for monitoring the incidence of crime and violence in project areas. This data could then be triangulated with official statistics and findings from household sample surveys.

Data Collection Instruments The key data resources to be used for monitoring and evaluation are outlined below: MIS. JSIF currently uses a project MIS for the NCDP. This system will be updated and developed further for the ICBSP project. The system will include complete information on disbursements, material inputs, number ofbeneficiaries, numbers of CBOs involved with the project and a range of additional operational indicators to track project status. This information system will be available on a current basis and will feed into the process monitoring and evaluation system. Focus Group Discussions. As part ofprocess monitoring and evaluation, focus group discussions will be held with beneficiaries in project communities (who may not be part of the Community Committees) to build a profile ofproject impact. Bi-annual focus group discussions will take place in each ICBSP community. Citizen Report Cards. JSIF will implement Citizen Report Cards to monitor beneficiary perceptions of project implementation. The report cards will be implemented at the end of years one and three of project implementation - years in which either mid-term or end-of-project evaluation will not be conducted. The report cards will serve as a bridge between the ongoing monitoring and impact evaluation exercises. JSIF will develop during project implementation a methodology for conducting citizen report card surveys based on international experience with the instrument. Household Baseline and Impact Evaluation Surveys. A socio-economic household baseline survey has been carried out for representative sample households in ICBSP communities and four control communities as described above. A limited module or survey will be conducted at the mid-term. Complete surveys to assess impact will be conducted at the end of the project and five years after project completion. Secondary Data. Existing data from the National Census, PIOJ, police records and other agencies will

38 be used to supplement the primary data collected from ICBSP communities and control communities for process monitoring and impact evaluation.

Indicators A set ofindicators for process and impact monitoring have been outlined in the results framework below. Additional key management indicators will be integrated into the MIS. The impact evaluation framework also includes a series ofindicators organized into the following areas:

Impact Indicator Areas Household Composition

I Education Social Capital and Community Participation Employment, Income and Access to Financial Services Crime. Violence and Public Safetv

Institutional Arrangements JSIF will be responsible for the overall management and implementation of the Monitoring and Evaluation framework. This will include ensuring field teams provide timely monitoring reports with operational data. JSIF Community Liaison Officers will be responsible for carrying out periodic focus group and participatory exercises and the citizen report card surveys. Technical supervision for the mid- term and end-of-project evaluations will be conducted by the Social Development and Research Department of the Planning Institute of Jamaica (PIOJ) with support from consultants to be financed under the ICBSP project. PIOJ will assume the role of technical supervision for project evaluation in order to ensure the independence ofthe impact evaluation process. PIOJ will coordinate with and involve STATIN on design and technical issues associated with the evaluations. Mechanisms for Feedback: Results from ongoing process monitoring, focus group discussions, citizen report cards and impact evaluations will be discussed at three levels. First, results from ongoing operational monitoring and focus group exercises will be discussed at bi-weekly Community Organizer meetings held with JSIF management and community liaison officers. At this stage key lessons from monitoring will be reflected in revised work programs or special initiatives to address identified operational weaknesses. Important results from ongoing operational monitoring and focus group discussions will also be discussed during monthly JSIF management meetings, involving the ICBSP Project Manager, key senior project staff and other JSIF management. The meetings will reflect lessons from monitoring exercises in revised monthly work programs for the project and staff. Lastly, findings from citizen report card surveys, impact evaluations and key lessons from ongoing operational monitoring will be discussed at quarterly ICBSP Steering Committee meetings. The steering committee will include JSIF management, notable figures and representatives from key agencies including PIOJ, Ministry of Land and Environment, Ministry ofNational Security, National Lands Agency, Ministry of Housing and Water, NWC, NSWMA, NWA and Parish councils. The Steering Committee will take decisions on project implementation strategy based on findings from operational monitoring and impact evaluations.

39 Results Framework PDO Project Outcome Indicators Use of Project Outcome Information Improve quality oflife in inner 1. Provide access to improved basic Adapting and developing public cities and poor urban informal infrastructure and financial services and expenditures, programs and policies settlements through improved security oftenure for 60,000 inner city targeting inner city and peri-urban access to basic services, residents areas to reflect lessons from the enhanced community capacity 2. % ofbeneficiaries that feel safe or very ICBSP project and improvements in public safe (differentiated between inside and safety. outside the home)

Intermediate Outcomes Intermediate Outcome Indicators Use of Intermediate Outcome Monitoring Component One: Access to Services Increase access and improve 3. % ofhouseholds that report access to Measure effectiveness ofphysical the quality ofbasic water with ‘good’ pressure infrastructure sub-component and infrastructure services for inner 4. % ofbeneficiaries satisfied with the adapt implementation strategy city residents in project areas quality and pressure ofwater service accordingly 5. % ofhouseholds in project areas with access to in-house sanitation facilities Measure the sustainability of 6. % ofhouseholds satisfied with quality of project investments and adapt sanitation facility arrangements for O&M developed 7. % beneficiaries receiving solid waste in collaboration with NWA, collection service at least once per week NSWMA, NWC, JPS Co., Parish 8. Km ofpaved road surface rehabilitated councils and other related service and maintained providers. 9. % ofstreet lights constructed under the project in working order over time Inform GoJ strategy and parallel 10. Increase in levels ofcommunity efforts onbest practice in providing satisfaction with community and basic infrastructure services in recreational facilities inner city areas Improve access for formal 11. # offormal microfinance loans Develop improved strategies to financial services for disbursed in project communities provide financial services in inner productive, incremental 12. # of beneficiaries having opened bank city areas housing improvements and accounts community infrastructure 13. # ofrepeater loans provided in project investments areas Increase tenure security in 14. Number oftitles provided to project Design tenure regularization project areas beneficiaries programs targeting inner city and urban informal settlements Component Two: Public Safety Improve the perceptions of 15. % ofbeneficiaries who feel safe or very Inform Jamaican government public safety among safe (differentiated between inside and programs that aim to enhance beneficiaries through outside the home) public safety in inner city areas strengthening human and 16. % increase in CBO membership social capital Component Three: Project Management JSIF, parish councils and 17. JSIF obtains and adheres to IS0 14000 Identify actions and measures to community organizations certification strengthen JSIF management and increase capacity and 18. CBOs effectively implement quality control systems effectively implement and community-based subprojects Adapt and improve approach to supervise project interventions strengthening CBO capacity

40 s

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Annex 4: Detailed Project Description JAMAICA: Inner City Basic Services for the Poor Project

Project Development Objectives The project development objective is to improve quality of life in 12 Jamaican inner-city areas and poor urban informal settlements through improved access to basic urban infrastructure, financial services, land tenure regularization, enhanced community capacity and improvements in public safety. The project will: (a) increase access and improve the quality of water, sanitation, solid waste collection systems, electricity, roads, drainage and related community infrastructure for over 60,000 residents of poor urban informal settlements through capital investment and innovative arrangements for operation and maintenance; (b) facilitate access to microfinance for enterprise development and incremental home improvement for entrepreneurs and residents; (c) increase security of tenure for inner-city residents in project areas; and (d) enhance public safety through mediation services, community capacity-building, skills training and related social services. A results framework is included in Annex 3 with additional key performance indicators.

Eligibility Criteria and Selection of Beneficiaries The selection of project communities was led by the Planning Institute of Jamaica (PIOJ) and involved the Ministry of National Security, the Social Development Commission (SDC) and JSIF. The availability ofreliable and disaggregated quantitative data on poverty, access to basic infrastructure services and the incidence of crime and violence for inner-city and urban informal settlements is limited in Jamaica. This made it difficult for the GoJ to develop selection criteria solely on objective quantitative measures. Additionally, the Government noted a preference to explicitly include certain qualitative measures to ensure that areas ofhigh priority with respect to public security were included and to avoid the perception ofpolitical interference in selection.

The selection process involved as a first step the formulation of a shortlist of 32 settlements including all inner-city and peri-urban informal settlements with estimated populations of over 7,500 residents based on the Government’s preference to implement the ICBSP project in larger inner-city communities. The shortlist was then analyzed and ranked based on two available quantitative measures: (i)% of households in the community in lowest poverty quintile; and (ii) % of households without access to piped water. A combined ranking was formulated based on data for both indicators. The GoJ then applied a series of qualitative criteria to this ranking to arrive at the final project selection. Qualitative criteria for selection specified that this should:

0 Include at least one settlement from all five urban parishes - Kingston, St. Andrews, St. James, Clarendon and St. Catherine - to ensure that all parish councils develop capacity in urban upgrading under the project. Based on poverty and access to water criteria alone the project would have selected project areas in only Kingston and St. Andrews.

0 Ensure that the final selection does not disproportionately favor communities allied with the ruling political party to avoid accusations ofpreferential treatment based on political alliances.

0 Select communities that are of high priority based on Ministry of National Security public safety criteria. The Ministry ranked for PIOJ the 32 settlements on the shortlist and indicated certain high priority settlements that represented a significant security risk or had either maintained fragile ceasefires. The final selection reflects, to the extent possible, Ministry ofNational Security rankings.

43 0 The GoJ also excluded from final selection project areas that were either subject to major land disputes or located on environmentally sensitive land.

Based on the above criteria, a draft selection was made using an estimated budget of US$500 per capita including both project and administrative costs. This draft selection was further refined after field assessment to focus in on discrete sub-communities where poverty, poor service levels and crime were ~oncentrated.~~Based on this methodology, a final selection of project areas was conducted and is reflected in Table 1 below.

Table 1: ICBSP Project Selection

Parish Community Population Households (ha) (Per! Kingston Whitfield Town 2 1,650 4,330 126 172 gnrl Ct Passmore Town/Browns Town (Dunkirk) 5,982 1,196 29 20 1 Federal Gardens (in Trench Town) 2,391 478 14 171 Jones Town 13,011 2,602 38 342 St. Tawes Pen 1,822 364 11 166 Catherine March Pen (Africa) 3,254 65 1 26 125

Project Components The project is structured with three components:

Component 1: Access to Services (US21.85 million of Bankfinancing) will include three key subcomponents.

Subcomponent 1.1: Basic Infrastructure (US$ 20. OOm): This subcomponent will primarily finance the upgrading of basic tertiary network and community urban infrastructure in project areas. Additional financing under the subcomponent will support the enhanced capacity ofparish councils and community organizations to adequately operate and maintain community infrastructure.

Specifically, the subcomponent will support investments in seven areas: (i)integrated network infrastructure in project areas for water, sanitation, drainage, and secondary and tertiary roads; (ii) community centers; (iii)community-based infrastructure including the construction and rehabilitation of recreational facilities, installation of community garbage receptacles,

33 For example, the draft selection included Trench Town with an estimated population of over 24,000 residents. After field assessment, final project selection included only Federal Garden (a subset of Trench Town with over 2,300 residents) where access to basic services and crime and violence conditions are disproportionately poor.

44 replacement of zinc fencing with alternative perimeter fencing and the installation of in-house water and sanitation connections; (iv) street lighting and the regularization of illegal electricity connections; (v) the rehabilitation and construction of complimentary offsite network infrastructure; (vi) strengthening solid waste collection systems through the procurement of compactor trucks to be operated by NSWMA and the analysis of waste collection systems; and (vii) technical assistance to parish councils to strengthen operations and maintenance capacity.

The component is structured to finance a demand-driven bundle of infrastructure services in each project area. Investments for the 12 eligible and selected project areas have been identified through an extensive consultation process to prioritize infrastructure needs (see Annex 14) and detailed feasibility work has been prepared and reviewed by the Bank. The table also summarizes key considerations reviewed during the technical assessment for each investment priority.

Integrated Neighborhood Infrastructure Plans were prepared for each project area based on demands articulated by community members and the technical assessment process outlined above. Each infrastructure plan outlines a series ofinvestments and specific contract packages for integrated network infrastructure, small community-based infrastructure works, community centers, electrification and street lighting. During the process of project preparation, the need for a series of off-site or complementary investments was identified to ensure the sustainability of network and community infrastructure proposed in project areas. Table 2 below provides a summary of the areas of estimated expenditure under subcomponent 1.1. The sections below describe each ofthese investments in greater detail.

Table 2: Estimated Costs by Activity Subcomponent 1.1 - Basic Infrastructure Estimated Investment Activity cost (US$) 1. Integrated Network Infrastructure 11,350,508 2. Community Centers 2,579,229 3. Communitv Basic Infrastructure 1.82 1.171

(0 Integrated Network Infrastructure: The component will finance a demand-driven bundle of basic tertiary network infrastructure investments for construction and maintenance of water, sewerage, communal sanitation, roads and drainage infrastructure. Due to the integrated and sequenced nature of these investments - i.e. sewerage systems and water networks would be installed followed by the paving ofroads and installation of curbside or submerged drains - they will be packaged together under one contract for each community. Table 3 below outlines the estimated cost and the proposed areas of investment by sector for each investment package. Further design and technical considerations are outlined below for the principal infrastructure sectors.

Water Suuulv: The diagnosis of the water supply situation in each project area found specific deficiencies in pressure, availability and condition ofthe piped network and the lack of complete access to household connections. Investments in water supply planned under the Project were

45 designed to achieve a minimum level of service of 190 liters per day per person (Lpdpp) at a 5m head and a optimal level of service of 250 Lpdpp at 10m head on lOOmm diameter mains on every street. Specific interventions proposed include the replacement of damaged water pipes, installation of new lines, submerging of exposed water lines and the installation of pumping systems. National Water Commission (NWC) will charge a flat rate to all households based on actual levels of services in each project area. Each household will enter an individual consumer contract with NWC for water service and will assume responsibility for repayment directly to the utility. A memoranda of understanding (MoU) between NWC and JSIF outlining these responsibilities and agreements has been prepared, finalized and signed.

Table 3: Estimated Integrated Network Infrastructure Costs by Project Area

(Shelter Rock) WAT, TRAN, DRAIN and DMAIN 442 Lauriston TRAN, DRAIN and DMAIN 646,096 1815 Bog Walk WAT, TRAN, DRAIN and DMAIN 813,714 727 Bucknor WAT, TRAN, DRAIN and DMAIN 5 18,152 45 1 Flankers TUN, DRAIN and DMAIN 688,507 96 Total 11,350,508 171

Sanitation and Sewerage: The subcomponent will finance across project areas a combination of the following: installation and rehabilitation of gravity sewerage systems, VIP or individual septic tanks, household sanitary cores and communal sanitation facilities. An assessment of sanitary infrastructure in project areas found a range of sanitation systems in place including full or partial sewerage, septic tanks, communal washing facilities, VIP latrines and pit latrines. The quality ofexisting infrastructure varied considerably. Other project areas or neighborhoods lacked access to any form of sanitation system. Technical analysis during preparation examined the feasibility of installing full gravity flow sewerage systems in all areas.

34 WAT = Water, SAN = Sewerage and Sanitation, TRAN = Road Paving or Rehabilitation, CSAN = Communal Sanitation Facilities, DRAIN = Drainage, and DMAIN = Deferred maintenance on existing drainage and community infrastructure. 35 Variations in investment costs per capita are considerable and are explained by population density and variations in initial infrastructure endowments. Communities in Kingston and St. Andrew benefit from increased access to basic infrastructure services - albeit of poor quality - and are also far more densely populated on average. Conversely, settlements such as Lauriston are remotely located, sparsely populated and have only modest prior infrastructure endowments.

46 In the Kingston and St. Andrew project areas sewer systems are in place but waste is not currently being treated by the KMC. In these areas, the Project will finance rehabilitation and maintenance of existing sewerage mains where required. Project areas of Central Village, March Pen (Africa) and Bog Walk do not have sewerage networks. However, it was determined these areas would require prohibitively deep excavation with pumping in order to bring discharge to water courses. Specific technical limitations also made full sewerage ofLauriston and Dempshire PedJones Pen (Shelter Rock) not feasible. In these communities the Project will finance the rehabilitation and installation of VIP or individual septic tanks where required. The Project will finance the installation of sewerage networks in Bucknor and Tawes Pen. The maintenance of sewerage networks installed and rehabilitated under the Project will be assumed by NWC and these responsibilities will be outlined in the MoU with the agency. Additional sanitation investments under the component will include sanitary cores and communal sanitation and washing facilities. Sanitary cores will be installed for households without access to a washbasin, toilet and kitchen but have access to available space for the cores. Communal sanitation facilities will be installed where residents lack access to adequate available space for individual sanitation facilities.

Roads: The component will finance the widening, rehabilitation and paving of existing roads, access tracks or footpaths. During preparation the possibility of widening all internal roads to 20 feet with curb and channel drains on both sides was examined in order to comply with Jamaican guidelines to enable passage for fire engines, the largest public service vehicles that would require access. Road investments under the Project will ensure 20 feet clearance for all roads with a fire hydrant. In order to avoid extensive resettlement in project areas, all other internal lanes and footpaths would be widened to ensure at least 15 and 5 feet of clearance respectively. Road investments in project areas planned under the Project will enable the collection of solid waste from all households as the 15 feet lanes are ofadequate width to permit the passage of solid waste min-compactor trucks used by NSWMA.36 Further detail on road sector investments in each community is provided in the Neighborhood Basic Infrastructure Plans included in the project files.

Drainage: The component will finance the rehabilitation and construction of drainage infrastructure in project areas. Improved drainage in project areas will have the effect of increasing the longevity of the road network, reduce the loss of solid waste at collection points, mitigate the possibility of transporting contaminants from existing pit latrines and reduce the possibility ofthe spread of disease through the buildup of solid waste deposits in and around the water supply system. Specifically, rehabilitation ofexisting drains will include the clearance local blockages and repair of permeable surfaces. Additionally, the component will finance the construction of system ofblock and concrete wall open channel drains linked to curb and channel drainage on road surfaces. Open channel drains were selected because of their relatively lower cost, the ease by which communities and parish councils could maintain them and ease of connection to roadside curb and channel runoff. Where open channel drains are not feasible, the project will finance the underground pipe drains with surface road runoff connected to them through gullies and manhole inlets.

(ii) Community Centers: The project will finance basic multi-purpose community centers in seven project areas. Adequate community facilities in other project areas have been identified. The community centers will host conflict mitigation and mediation, youth education, skills development, recreation and related capacity building programs financed under Component 2 of

36 In order to accommodate households that only have access to lanes, the Project has identified locations convenient for these households to place community garbage receptacles from which trash can be collected by compactor trucks.

47 the operation and additional programs run by external agencies when required. Construction of the centers has not been bundled into the contracts for integrated network infrastructure (described above) in order to enable the involvement of highly qualified contractors with specific experience in the construction ofcommunity facilities.

Operation and maintenance of community facilities will be the responsibility of community organizations and external partners, with partial and time-bound financing available under the Project. A minimum requirement for the construction of community centers will be that community organizations secure an agreement with at least one external public or private entity (e.g. post office, library, convenience store, etc.) to house parallel facilities and cover at least 50 percent of operating and maintenance costs for a period of at minimum one year. In order to ensure that this requirement has been met the construction of all community centers will be subject to Bank prior review. Prior review in these cases will include verification that JSIF and communities have secured ‘third-party’ commitments for the operations and maintenance of centers as described aboven3’

Based on these arrangements, the Project will subsequently finance a portion ofthe remaining 50 percent in estimated operating costs on a declining scale for no longer than two years or until project closing - whichever date comes first. Communities will also solicit additional contributions from residents through donations or fees to finance operations of the center. Arrangements and conditions governing the construction and operations and maintenance of community centers are outlined in greater detail in the JSIF Operations Manual included in the project files. A breakdown of the estimated costs for the seven community centers is outlined below in Table 4.

Table 4: Estimated Costs - Community Centers Estimated Community Investment Cost (US$) 1. Federal Gardens 364,639 I 2.TawesPen I 364,639 I 3. Central Village 544,900 4. Lauriston 277,886 5. Bog Walk 277,886 6. Bucknor 364,639 7. Flankers 364,639 8. Site Preparation 20,000 TOTAL (US$) 2,579,229

(iii) Community Basic Infrastructure: The subcomponent will finance community basic infrastructure investments for: (i)household water and sanitation connections; (ii)zinc fence removal and substitution; (iii)neighborhood improvement and recreational facilities; and (iv) installation of community garbage receptacles for solid waste collection. These small infrastructure investments complement broader network infrastructure investments described above and will be implemented through community-based contracting methods in order to

37 The Bank project team has proposed requiring prior review of the works contracts for all community centers as an alternative to including as a disbursement condition for each of the proposed community centers the condition that third-party commitment to cover operations maintenance has been secured. This proposal is still under the consideration the team’s procurement specialist and management.

48 strengthen CBO capacity, ensure demand-responsiveness, promote efficiency and achieve greater community involvement in implementation. Table 5 below outlines estimated costs for the activity. Further detail on the nature of each investment as well as on implementation arrangements is given below.

Estimated Community Investment Cost (US$) 1. Household Water and Sanitation Connections 414,811 2. Zinc Fence Removal and Substitution 1,200,000 3, Neighborhood Improvement and Recreation Facilities 133,000 4. Waste Bin Installation 73,360 TOTAL fUS!D 1.303.450

Household Water and Sanitation Connections: The component will finance the extension ofwater and sanitation connections to households from rehabilitated or newly constructed street water and sanitation mains located in project areas. Under a small works contract supervised by a CBO, households without adequate water and sanitation connections would receive one connection from mains to taps or sanitary facilities located within the residential unit or yard.

Zinc Fencing Removal and Substitution: The importance of replacing zinc fencing with appropriate permanent structures was noted during preparation by community members as a means to enhance public safety and to overcome the perception that the community is informal or ‘blighted’ area. The component will finance a community-based program for the replacement of zinc fencing with alternative perimeter fencing. JSIF will prepare during implementation a menu of eligible and cost-effective design alternatives for the new fences and through a consultative process communities will select the desired alternative. It was estimated during preparation that materials will account for approximately 70 percent of total program costs, with labor costs accounting for the remaining 30 percent. Under the program, CBOs will procure materials based on the design specifications prepared by JSIF for the selected alternative. Labor for the replacement of zinc fencing with alternative perimeter fencing be provided by resident beneficiaries and CBO members in the form ofin-kind community contribution. The program is designed to cover approximately 50 percent of all households in project areas. The JSIF Operations Manual included in the project files includes additional details on the administration ofthe program.

Neighborhood Improvements and Recreational Facilities: The component will finance small works through CBC contracts for demand-driven minor neighborhood improvements and the rehabilitation and installation of small recreation facilities and playgrounds. These small works contracts will be implemented in the implementation cycle in each area. Further details on the eligible investments are included in the JSIF Operations Manual.

Waste Bin Installation: The component will finance the installation ofwaste bins in project areas. The specifications and recommended locations for all waste bins have been identified in the Neighborhood Basic Infrastructure Plans in coordination with community representatives and NSWMA in order to ensure an efficient waste collection system.

(iv) Street Lighting and Electricity: The component will finance the installation of street lighting, extension of the electricity network and the regularization of illegal connections, Works for the

49 installation of street lights and network extension will be executed under one umbrella contract for all project areas in order to benefit from economies of scale in implementation. The location and specifications for street lights have been identified in the infrastructure and public safety plans based on feedback from community focus groups during preparation. In agreement with JPS Co., network expansion investments will involve the incremental extension of existing network infrastructure as required in areas where consumers agree to regularize illegal connections and pay regular utility bills.

The Project will work with the Rural Electrification Program (REP) to regularize illegal connections. REP currently operates a regularization program in rural areas and will adapt and replicate the program in ICBSP communities. The program is voluntary and requires consumers to repay through electricity bills the full cost of installation oflegal connections over a 48-month period. It was estimated through a baseline survey conducted during preparation that approximately 49 percent of households have illegal connections. Given the voluntary and full- cost recovery nature of the program, however, the Project estimates that 60 percent of all households with illegal connections will participate in the program. The component will subsequently finance both the procurement of materials and capital costs for the installation of legal connections. Procurement will be managed by JSIF with the involvement of REP in the definition oftechnical specifications and the evaluation ofbids. The component will involve three installation phases over a three year period. Each installation phase will aim to reach 1000 households. The Project will finance 100 percent of the capital cost requirement in the first phase. However, in phases two and three the Project will finance the capital costs for a percentage of 1000 legal connections. The gap in capital cost requirements will be financed directly by REP through the reflow of resources received from billing and collection in ICBSP project areas. A specific target for installation of legal connections financed 100 percent by REP in phases two and three has been specified in the JSIF Operations Manual and in an MoUto be signed between JSIF and REP. The Project will only finance capital costs in phases two and three once REP can demonstrate that it has financed and installed this target number of legal connections.

Additionally, the Project will finance through Force Account REP administrative costs associated with implementation including the cost of work supervision, site preparation, technical supervision and approvals. Detailed unit cost information is specified in the JSIF Operations Manual. An MoU between JSIF and REP has been prepared and negotiated specifying in greater detail these implementation arrangements.

(v) Off-Site Network Infrastructure: The component will finance the construction and rehabilitation ofoff-site infrastructure critical to maintain adequate service levels in project areas. Planned off-site infrastructure includes the: (i)rehabilitation of a water reservoir and trunk mains in Kingston bordering Federal Gardens and Jones Town communities; and (ii)the upgrading and rehabilitation of a wastewater treatment facility in Tawes Pen. The rehabilitation ofoff-site water infrastructure in the Kingston area will have a direct impact in improving water pressure and the continuity of service in Federal Gardens and Jones Town. The rehabilitation of the wastewater treatment plant in Tawes Pen will enable the treatment of wastewater generated from the proposed sewerage network investments planned for the area. The proposed investments will be procured by JSIF and linked to immediate improvements in the quality of service provision in project areas.

(vi) Solid waste collection systems: The component will finance the procurement of compactor trucks and the technical assistance for the analysis of the waste collection systems in project

50 areas.38 The procurement ofcompactor trucks will be done by JSIF for operation by the National Solid Waste Management Agency (NSWMA) or local service providers that have entered into service contracts with NSWMA to operate waste collection systems in project areas. The responsibility for operation and maintenance of the trucks will be vested in NSWMA and the JSIF will enter into an MoUwith NSWMA to ensure that the trucks will be mobilized in project areas for the duration of the investment. Additionally, the component will finance a study ofthe collection system in ICBSP areas to assist NSWMA in the more efficient design and management ofwaste collection systems.

(vi) Parish council Support: The responsibility for the operations ofsecondary and tertiary roads, drainage infrastructure, community recreation facilities and other basic infrastructure will lie with parish councils. However, councils lack the management and O&M capacity to adequately maintain community infrastructure. The component will support the procurement of basic equipment and the provision of technical assistance to strengthen management, operations and maintenance capacity at the parish council level, Equipment to be procured will include computers, software, maintenance equipment and basic office supplies. The JSIF Operations Manual specifies in greater detail the areas of eligible expenditure for the procurement of goods for parish council support. Additionally, the project will support the training of parish council staff directly associated with the maintenance of community infrastructure financed under the Project, in management and technical skills to enhance basic O&M capacity.

Subcomponent 1.2 - Access to Financial Services (US$1.25m): Objectives: This subcomponent will facilitate access to microfinance services in project areas for productive purposes and incremental home improvements through performance-based service contracts aimed at creating incentives for existing Financial Institutions (FIs) to provide microfinance services in project areas. Specifically, the component will finance three activities: (i)a performance-based mechanism for the extension of microfinance loans and technical assistance in project areas; (ii)consultant services for the orientation ofpotential bidders and the technical evaluation ofbids; and (iii)an independent technical audit ofFI portfolios.

Instrument Design and Key Features: Under the subcomponent, JSIF will award performance- based service contracts to those FIs that require the least subsidies as a percentage of total loan amount to reach the minimum target ofconsumers specified for each bid. The FIs will participate in a competitive tendering process and winning firms will agree to disburse, service and collect a predetermined number of loans or dollars lent. The awards to FIs will be structured as performance-based contracts and the contracts will disburse against an agreed fixed payment for each loan. The design and operating procedures for the subcomponent have been finalized and are reflected in the JSIF Operations Manual. The component has being designed to maximize desired outputs and minimize market distortions. In this regard, key features of the contract design include:

0 only new clients are counted as qualified loans eligible for performance-based aid; 0 follow-on subsidies to the same institutions will require a lower subsidy rate; performance-based contracts will be awarded through a competitive tender process with interested and qualified clients submitting bids for the amounts of units (clients andor dollars) and the desired percentage ofsubsidy;

38 It is estimated that at least three, but no more than four compactor trucks will be procured under the component.

51 0 subsidies are awarded to lowest bidder up to a pre-determined amount with any remaining funds carrying over to the next auction period; 0 a third party (audit firm or similarly qualified institution) verifies a sample of the portfolio claimed by participating FIs; 0 limited restrictions are placed on how the subsidies are used by FIs; and 0 the mechanism may be made available to non-financial services (e.g. Building Societies and NGOs) active in home improvements.

The subcomponent is designed to include up to seven tender processes over a three to four year period. The use ofmultiple tenders was selected given that the use of a performance-based least cost subsidy contract for microfinance is new to Jamaica and follow-on tenders will enable JSIF to build on lessons from initial awards and will also enhance competition amongst potential bidders and drive down subsidy levels as FIs begin to understand the market. Follow-on tenders will also aim to encourage the provision of microfinance loans for incremental home improvement.

Each performance-based service contract will also include a small package oftechnical assistance services to be provided by the FI to clients. Technical assistance services will include credit counseling, assistance in the preparation of business plans, financial management and related business support services.

SubcomDonent Management, Monitoring; and Administration: Awards under the subcomponent will be made through a competitive tender process in accordance with Bank policies and procedures. A Microfinance Management Committee (MMC)39 has been formed. The committee will have responsibility for reviewing the tender process and the selection of applicants, as well as approving contracts. It will also review periodically results of the process and oversee changes to the follow-on tenders and oversight mechanisms. Additional steps and procedures include:

0 Selection Criteria: Simple and transparent selection criteria will be applied for the bidding process. These criteria will be adapted as the objectives of subsequent tender processes evolve. The first tender will evaluate bids based on cost (40 percent), experience in and capacity to service ICBSP communities (30 percent) and financial conditions ofFIs (30 percent).

0 Disbursement: Performance-based disbursement is the most effective when spread over the term ofthe loan. Disbursement for the first tender will be as follows: 50 percent upon the presentation of a list of qualified and approved loans from the FIs, 30 percent after three months provided that the loan is not over 30 days past due, and 20 percent when the client is approved for a second loan.

0 Reporting Requirements: A simplified reporting system has been outlined for participating FIs, which is summarized in the table below:

39 The proposed Microfinance Management Committee will be formed as a subcommittee to the JSIF Board and will report directly to the Board. The Committee will be constituted by JSIF management, Board members and experienced professionals in the commercial banking sector who do not have a direct interest in any of the potential FIs eligible to access resources through the component.

52 Review financial condition

0 Audit and Verzjkation: JSIF will conduct on-site visits to winning FIs to ensure that information provided in the bid is accurate. After awards - on a semi-annual basis - JSIF will verify loan reports by reviewing a sample of loans to assess performance. JSIF will also use independent auditors to verify loan portfolio claims by FIs.

Subcomponent 1.3 - Land Tenure Regularization (US$ 0.60m): This subcomponent will finance the implementation of a pilot land titling initiative and technical assistance to the Government of Jamaica for the preparation of a national policy on squatter management and informal urban settlements. This will target residents ofICBSP communities on public land only - given the lack of a clear, cost-effective and expeditious legal framework for private land acquisition for the regularization of informal occupants on private parcels.40 The project will investigate with specialized agencies of the Government alternatives or interim methods to increase tenure security on private land inclusive or short of formal titling.41The subcomponent will not finance land acquisition or the actual payment of the fee to receive a title - but rather only technical assistance and services. Implementation of the pilot component will involve three activities:

(0 Inventory of Land Ownership. JSIF will conduct, based on cadastral data obtained from the National Lands Agency (NLA), a cadastral audit for all ICBSP communities. The audit will analyze approximately 13,000 parcels which will be overlaid on an aerial map of each community and combined with attribute data (Le. ownership and title details). The audit will enable JSIF and partners to quantify the exact number of parcels eligible for titling and assess requirements for the transfer ofownership ofpublic lands.

(ii) Development of a Titling Strategy and Program. A clear and transparent strategy and program for titling will be developed based on the results ofthe complete cadastral audit. Key activities will include the:

40 During preparation the National Lands Agency conducted a cadastral analysis for a sample of ICBSP communities: Jones Town, Tawes Pen and Bucknor. The analysis found that both Tawes Pen and Bucknor are located on single, non-subdivided public parcels while Jones Town is located on private land with detailed cadastral data available on ownership for all parcels. A rapid analysis if this data, overlaid on aerial maps, suggests that these parcels have been subdivided informally.

41 A complete assessment ofthe legal framework for regularization on public lands will take place during implementation and prior to disbursements under the component.

53 - development ofinformation campaigns and mechanisms for public consultations; - formal verification of field, legal and administrative procedures for transfer and costs; - clarification ofoperating arrangements between JSIF and partner agencies; and - extensive public communication to ensure the benefits and costs oftitling are well understood.

Upon the request of the Government of Jamaica, the project will also support technical assistance for the development of a broader policy and program for the regularization of urban and peri-urban squatter areas.

(iii) Technical Assistance for Squatter Management Policy. Upon the request of the Government of Jamaica, the project will also support technical assistance for the development of a broader policy and program for the regularization of urban and peri- urban squatter areas.

(iv) Titling Program. The implementation ofthe program will involve four key activities:

- completion ofregister and cadastral searches; - completion ofland surveys; - verification ofoccupancy information including names, addresses, leasing and sub-leasing arrangements; and - the provision oftechnical assistance to eligible beneficiaries in the processing of title applications.

JSIF will recruit staff in-house to assist in finalizing the cadastral audit and in designing the titling program. Two types of competitive contracts are envisioned under the subcomponent. First, the Project will finance land surveys of eligible project areas. Second, the Project will finance technical assistance to eligible beneficiaries in the preparation of titling applications.

Component 2: Public Safety Enhancement and Capacity-Building (US$3.90 million, all from Bank financing) The component aims to enhance public safety by financing integrated packages of consultant services, training and technical assistance in project communities. The component focuses on supporting both immediate mitigation and conflict resolution activities in addition to other preventive and capacity enhancement interventions that will have a medium-term impact on levels of public safety. In particular, the component will finance the delivery of violence prevention services by NGOs and other eligible institutes and agencies in five core social prevention areas, as well as the recruitment of community liaison officers. Social prevention services in each of the five core areas will be procured under three to four umbrella contracts covering a geographically contiguous set of areas. Each contract will be designed and scoped to the specific crime and violence prevention needs in the project area as identified by diagnostic analysis conducted during preparation and verified during implementation.

Eligible providers of technical assistance services in each of the five social prevention areas may be pre-qualified or short-listed on the basis ofdemonstrated experience and a track record ofgood quality service provision at a reasonable cost. The agencies will be subject to an organizational assessment to confirm their capacity to deliver one or more social violence prevention services under the project. A series of organizations was evaluated during preparation. These groups have developed experience in this area through programs such as the IDB-financed Citizen Security

54 and Justice Programme and the USAID-financed Grant’s Pen project. They include: the Dispute Resolution Foundation (mediation and conflict resolution); PALS (conflict resolution in schools); HEART (skills development); Addiction Alert Organization; Youth opportunities Unlimited (family support programs); AWOJA (domestic violence); Kingston Restoration Company; and SISTREN Theatre Collective. Selected agencies will be expected to:

0 Work closely with the Community Liaison Officers and the Community Development Councils/Community Action Committee; 0 Formulate a detailed plan of action outlining: objectives; activities; number of participants; expected outcomes; methodology ofdelivery; time-table and deadlines; and the person(s) responsible for each activity; 0 Identify and mobilize participants from the community; 0 Identify and outline a strategy to mobilize the ‘most-at-risk’ groups and individuals in the communities; and 0 Produce a monthly progress report and attend meetings with JSIF and/or other parties involved in the project.

Specific service contract packages in the five social prevention areas will include:

(0 Mediation and Conflict Resolution: The component will finance technical assistance services that initiate and manage mediation initiatives in communities that experience chronic or periodic gang conflict or intra-community feuding. This will support tested mediation and conflict management interventions currently being implemented in Jamaica to broker ceasefires and build confidence between rival gang factions such as:

0 establishing a community code ofconduct; 0 forming and supervising conflict mediation groups; 0 conducting peace-building meetings with inter-community groups; 0 obtaining signed peace agreements between local area gangs in all relevant communities; 0 training and certifying community residents as mediators to resolve interpersonal conflicts; 0 conducting weekly conflict resolution and anger management sessions with each community (individually and collectively). 0 Training and capacity building in mediation, dispute resolution, and intra- personal conflict management. This is often a key variable in the escalation of reprisal-driven community disputes and violence for community leaders and CBOs.

(io Alternative Livelihoods and Skills Development: The component will finance technical assistance services that respond to the high levels of youth unemployment and dropout from the formal education system, and limited access to vocational skills development and apprenticing opportunities, as noted during the public safety audits of ICBSP communities. The NGO services will deliver tested skills development and job training initiatives targeted to male and female youth particularly those susceptible to or already engaged in local gang culture, as a means of providing access to alternative livelihood opportunities. Specifically, the component will finance:

0 vocational training (carpentry, cosmetology, service industry, information technology, etc); 0 job skills development (basic literacy, personal presentation, etc.); and

55 0 related job placement programs.

(iii) Family Support Programs: The component will finance technical assistance services that respond to the needs of children, youth, and their families (parentdguardians) in the most vulnerable households in the communities with a particular focus on single-parent ho~seholds.~~ The selected agency, NGO or firm will deliver tested services that may include:

0 life-skills programs; good parenting programs; 0 family mediation (therapy) services; interventions that address gender-based; sexual, and domestic violence; drug abuse and alcoholism prevention and rehabilitation; reproductive health services; and 0 early childhood development and education and daycare services.

(iv) Youth Education and Recreation: The sub-component will finance technical assistance services that will deliver demand-driven and tested youth and adolescent educational and recreational programs through the community centers and other community locations. Specific interventions may include:

0 after-school homework programs; 0 summer camps; 0 community libraries; 0 computer skills training; 0 guidance counseling; 0 sports programs and competitions; and 0 cultural programs such as in music, arts, and theater.

(v) Community Capacity Building and Public Awareness: The component will finance a series of capacity-building activities for community-based organizations in project areas. Technical assistance services for CBO capacity-building will include training in: the objectives, goals and mechanisms ofsocial participation; financial management skills; fundraising; community-based contracting; community-based crime and violence prevention; situational crime and violence prevention; monitoring and evaluation; and training to perform routine operation and maintenance of basic infrastructure,

Additionally, the component will finance a series of social marketing and public awareness campaigns aimed at improving awareness of the importance of sustainable use and management of public services and infrastructure, informing community residents on project activities and fostering participation and cooperation.

42 Many recent reviews ofimpact evalutions emphasize that some ofthe most effective violence prevention initiatives take place within the family. (Tolan. 2001, goes further, arguing that violence prevention initiatives that do not include interventions at the family level run the risk offailure.)

56 Lastly, the component will support the mobilization of community liaison officers (CLOs) assigned full-time to each ICBSP community for the duration of the project. CLOs will staff the Community Centers and will have expertise in community organization, basic infrastructure, and crime and violence prevention. Specifically they will: lead community consultations; monitor the incidence ofcrime and violence in project areas; update community safety plans and strategies; coordinate the provision oftechnical assistance through external agencies; coordinate project activities with relevant agencies and associations active in the community including public schools, health clinics, social programs, Community Development Councils and relevant security agencies; facilitate the work of contractors ofthe infrastructure works to ensure integration ofCrime Prevention Through Environmental Design (CPTED) principles; identify and work closely with youth at-risk in the community; organize and mobilize the community members around public safety campaigns; and facilitate the implementation of additional social programs in the Community Centers such as summer camps for at-risk youth, etc.

Overall Component Implementation Approach: The above activities will be implemented in the context of a broader implementation approach. The component adopts a preventive, multi- sectoral, and community-based approach to crime and violence prevention that is complementary to, but goes beyond, traditional police responses. Particularly important are the synergies between the infrastructure, upgrading, and the ‘situational prevention’ - Crime Prevention Through Environmental Design (CPTED) - and the community-based ‘social prevention’ activities. The overall objective is a comprehensive intervention at the neighborhood level that is also closely coordinated with other relevant government and non-governmental programs addressing crime and violence and their associated risk factors in these neighborhoods. In addition to the multi-sectoral social prevention activities and community organizers financed under the component, the following elements supported throughout the ICBSP project will complement the implementation ofthe public safety interventions:

Diagnostics: Crime and violence mapping of the project areas using police statistics and where possible using GIS systems; the victimization section in the baseline surveys, and; community based and situational diagnostics. The first round of diagnostics was carried out during project preparation. However, this is an iterative process that will continue throughout project implementation and will be conducted through the coordination of community liaison officers and CBOs.

Situational Prevention: Measures that reduce opportunities for particular crime and violence problems through spatial interventions such as the CPTED methodology. The component will coordinate with and take advantage of the project’s infrastructure investments through a series of physical investments in public safety based on the community diagnostics and ‘hot-spot’ mapping: recreational facilities, street lighting, traffic management and the replacement of zinc fencing with alternative perimeter fencing (financed under component 1).

Community Centers: Rehabilitation of existing structures or construction of new buildings for community centers. The centers will serve as community multi-purpose facilities that host the community organizers, community events, training programs,

57 youth education classes and recreational activities, etc. To ensure the sustainability ofthe community centers the project will identify public and private sector ‘sponsors’ (e.g. other government agencies such as the library service, non- and for-profit organizations) that will also utilize the centers. The construction and rehabilitation of centers will be financed under component 1 ofthe project.

(viii) Monitoring and Evaluation: As this is a relatively new area, good evaluation of the sub- component is critical in order to learn from the various activities financed under this component. Evaluation of this component is included in the overall project M&E framework.

The component is designed with sufficient flexibility to enable community groups and JSJF to respond to relevant additional needs as they emerge during implementation. The component aims to build linkages with existing government and non-governmental programs where applicable and feasible - particularly in areas where a core competency does not exist or cannot be cost- effectively developed within JSJF. In addition to building on established programs, the component aims to foster innovation by supporting on a pilot basis non-governmental initiatives that aim to enhance public safety.

Component 3: Project Management (US$6.33m9 of which US$2.83m is BankJinancing) This component will finance consultant services, goods, training and operating costs for project management and administration. It will include two subcomponents: (i)project management, monitoring and evaluation; and (ii)operating costs and other services.

Subcomponent 3.1 - Project Management, Monitoring and Evaluation (US$ 4.73m, of which US$2.83m is Bankfinancing). This subcomponent will finance goods, services and training for program management. This will include financing services for technical and financial audits, citizen report cards, mid-term and end-of-project evaluation, IS0 14000 certification and related external consultant services for project administration. The subcomponent will also finance JSIF core professional and technical staff for project management, including a Program Manager, Supervision Engineers and specialists in the areas of crime and violence prevention, microfinance, safeguards compliance, finance, procurement and related project management areas. Core staff will be recruited on time-bound contracts not exceeding the life ofthe proposed Project. Lastly, the component will finance the procurement of vehicles, office equipment and furniture.

Subcomponent 3.2 - Operating Costs and Other Services (US$ 1.60m) all counterpart financed). This subcomponent will support operating costs and minor services. Among operating costs, the subcomponent will finance office rental costs, utility fees, stationery, vehicle maintenance and gasoline, travel, per diems and salaries of administrative staff in addition to other basic operating expenses. Additionally, the subcomponent will finance the provision of core CBO training services by the Social Development Commi~sion.~~

Operations, Maintenance and Cost Recovery

43 The Social Development Commission (SDC) is a non-autonomous Government agency that cannot participate in a competitive selection process for consultant services contracts for CBO capacity building under Component 2 ofthe project. Nonetheless, the Government has requested that the SDC be incorporated into the project design and, given limitations imposed by Bank procurement guidelines, has agreed to fiance this activity in its entirety.

58 Two distinct strategies for operation and maintenance (O&M) are proposed under the project accounting for differences between inner-city and peri-urban project areas. First, a strategy of community-led O&M is proposed for smaller and more unified project areas that also have demonstrated CBO capacity. Second, in larger, fragmented communities the project will develop with responsible agencies arrangements for adequate O&M. Under both O&M arrangements both community and service agencies will have distinct responsibilities outlined in a series of Memoranda ofUnderstanding (MoU).

Community-managed O&M: Under the first strategy for O&M in smaller and/or unified communities the Project will support the formation of Community Committees and build the capacity of these committees to perform routine maintenance tasks including drain cleaning, street sweeping, clearance of brush and weeds and the maintenance of garbage bin sites. These committees will also liaise with service providers to ensure that more substantial and technical periodic O&M requirements and service quality issues are addressed. Project areas where a community-led O&M strategy is possible include:

0 TawesPen 0 Central Village 0 Lauriston 0 Bog Walk 0 Bucknor 0 Flankers

O&M led bv Service Providers: In larger and/or more fragmented inner-city areas with weaker community institutions the project will support a strategy for O&M that relies to greater extent on service providers and parish councils while gradually building community capacity over time. MoU have been negotiated with primary service providers to outline roles and responsibilities and will be finalized and signed as part of implementation arrangements. Table 6 below identifies responsible agencies for O&M in key sectors.

Table 6: O&M Responsibilities by Sectors Minor and estate roads Parish councils Water supply National Water Commission (NWC) Sewerage and sewage disposal National Water Commission (NWC) Main drainage (structures) I National Works Agency (NWA) Main drainage (clearing) I National Solid Waste Management Authority (NSWMA) Solidwaste collection National Solid Waste Management Authority (NSWMA) Electricity supply Jamaica Public Services Company JPS Co. and Rural Electrification Programme

Project areas where the service provider-led O&M arrangements will be employed include:

0 WhitfieldTom 0 Passmore Town/Browns Town (Dunkirk) 0 Jones Town 0 March Pen (Africa) 0 Dempshire PedJones Pen (Shelter Rock)

59 Cost Recoverv: The project recognizes that cost recovery is critical to the sustainability of project investments. A strategy for cost recovery is being formulated. This aims to develop mechanisms for community contributions towards: (i)the cost of initial capital investments for basic infrastructure; and (ii)ongoing user fees for the provision of water, solid waste, electricity and related services. The approach of mobilizing community contributions towards initial capital investments builds on JSIF experience under NCDP, in which communities have been required to provide up to 20 percent of project costs in cash or in kind. JSIF has developed a methodology for valuing in-kind contributions and this has been reflected in its Operations Manual.

Economic analysis conducted for this project (see Annex 12) found that certain infrastructure investments were not economically feasible or affordable based on willingness-to-pay data at an estimated community contribution of20 percent. This finding was confirmed by JSIF experience with community contributions under NCDP projects in inner city areas where the purchasing power of residents is particularly low. Based on this analysis the ICBSP has determined a level of5 to 10 percent for community contributions towards capital costs.

60 Annex 5: Project Costs JAMAICA: Inner City Basic Services for the Poor Project

Bank Counterpart Total Financing Financing Project Cost By Component and/or Activity US $million US $million US $million

Component 1: Access to Services 2 1.85 21.85 0.00 1.1 Community Basic Infrastructure 20.00 20.00 0.00 1.2 Access to Financial Services 1.25 1.25 0.00 1.3 Tenure Regularization 0.60 0.60 0.00

Component 2: Public Safety Enhancement and 3.90 3.90 0.00 Capacity Building

Component 3: Project Management44 6.33 2.83 3.50 3.1 Project Management, Monitoring and Evaluation 4.73 2.83 1.90 3.2 Operating Costs and Other Services 1.60 0.00 1.60 Total Baseline Cost' 32.13 28.58 3.50 PPF Cost 0.65 0.65 0.00 Total Project Costs 32.73 29.23 3.50 Front-end Fee (0.25%)45 0.07 0.07 0.00 Total Financing Required 32.80 29.30 3.50

* Includes price and physical contingencies

44 The estimated total cost for this component is US$ 6,326,750 and the estimated Bank financing requirement is US$ 2,826,750. For the purposes of presentation these figures have been rounded to US$ 6.33m and US$2.83m, respectively. 45 The exact front-end-fee is calculated at US$ 73,250 and for the purposes ofpresentation has been rounded to US$ 0.07m here.

61 Annex 6: Implementation Arrangements JAMAICA: Inner City Basic Services for the Poor Project

Background The Government of Jamaica has designated the Jamaica Social Investment Fund (JSIF) to serve as the implementing agency for the ICBSP project. JSIF has an established track record in implementing GoJ poverty alleviation projects including the ongoing Bank-financed National Community Development Project (NCDP). Through the implementation of NCDP, JSIF has developed a core competence in Bank safeguard policies, financial management and procurement procedures. JSIF performance in NCDP implementation has been sufficiently strong to the extent that it is currently estimated that the project will successfully close prior to the scheduled closing date. JSIF is also currently implementing OPEC, CDB and EU-financed social investment programs along the lines ofNCDP.

JSIF Governance and Management Structure for the ICBSP JSIF has a well established management structure that aims to ensure efficiency, effectiveness and innovation in implementation. A Board of Directors will provide general oversight and policy direction during project implementation. The Board is comprised of senior public and private sector representatives and includes three working sub-committees: (i)Procurement and Contracts Committee; (ii)Project Committee; and (iii)Finance & Audit Committee. The Board will meet on a monthly basis and will review the results of periodic monitoring and evaluation activities. During preparation a Steering Committee was formed. It includes representatives fiom PIOJ, NWA, NSWMA, NHT, NHDC and the Ministries of Land and Environment, Water and Housing and Local Government and other relevant agencies. The Steering Committee has met on a bimonthly basis to review progress in preparation. Upon effectiveness, the terms of reference and the composition of the committee will be reviewed and possibly reformulated to ensure the involvement of all relevant Government agencies and ministries to ensure effective oversight in implementation.

JSIF internal management will participate in internal management reviews and bid evaluation committees and will give guidance to the implementation of project activities. Management review and committee meetings are held on a weekly basis. The ICBSP unit within JSIF will be led by a Project Manager and will oversee daily implementation. The project will recruit a full staff of supervision engineers, finance specialists, procurement specialists, community liaison officers, crime and violence specialists, social specialists, environmental and safeguards specialists and other administrative staff. During recruitment the project will consider the possibility of transitioning staff currently working on NCDP to ensure continuity and staff capacity development. The two projects will overlap for approximately a year. The ICBSP project will rely upon core or shared JSIF staff for MIS, human resources and finance and administration functions.

The project will also procure the services of a range of consultants to support core program management functions. Consultants will be recruited for the independent supervision of works, technical and financial audits and impact evaluation amongst other key activities. The Government will finance 100 percent of operating costs and core CBO training in organizational management and record-keeping to be implemented through the Social Development Commission.

62 Key management, monitoring and evaluation reports will include: Monthly internal reports to JSIF Management and Board Monthly Community Contribution Reports Quarterly FMR to the World Bank and the Jamaican government Biannual reports based on Citizen Report Card JSIF Annual Report to shareholders, also circulated to relevant stakeholders Annual audit reports based on financial audit ofthe JSIF by external auditors Technical Audit ofquality ofinfrastructure at mid-term and end ofproject Mid-term evaluation of ICBSP interventions End-of-proj ect evaluation

Operations Manual Relevant amendments including the Environment Management and Land Acquisition and Resettlement Policy Frameworks to the JSIF Operations Manual have been reviewed by the Bank and were adopted by the JSIF Board on February 22,2006.

Coordination in Implementation JSIF will assume responsibility for all procurement under the ICBSP project. However, Due to the multi-sectoral nature of the project, a range of partner public agencies, donors and external institutions will be associated with the implementation of project components. The project will rely on cooperation agreements - or MoU- with key project partners. MoUhave been prepared and negotiated and signed versions ofthe agreements will be finalized as part ofimplementation. MoUbetween JSIF and the following key agencies have been prepared: National Water Commission (NWC): Through its MoU with JSIF, NWC agrees to provide sufficient bulk water supply in project areas. The MoUalso reflects an agreement that NWC will promptly service and maintain water supply and sewerage networks in project areas. The MoUalso specifies that ICBSP communities agree to pay user fees for water and sanitation services in a timely manner. National Solid Waste Management Authority (NSWMA): An MoUbetween JSIF and the NSWMA reflects the agreement that the agency will service ICBSP communities at least once a week by implementing two to three different garbage collection systems. Under the agreement, NSWMA will replace and/or repair primary collection receptacles. The MoU also outlines arrangements for the procurement and operation of compactor trucks to be procured under the Project. Conversely, communities entering into MoU with NSWMA agree to deposit solid waste in primary receptacles and ensure access to waste collection sites. Rural Electrification Promamme: An MoU with REP specifies arrangements for the implementation of the program to regularize illegal electricity connections in ICBSP communities. In particular, the MoU specifies the contracts for works and the procurement of goods to be financed under the Project. The agreement also outlines annual targets for regularization of illegal connections to be financed by REP through revenue fiom bill collection in project areas. Jamaica Public Services ComDanv UPS Co.): Under an MoUwith JPS Co. the company agrees to approve designs for the installation of street lights and ensure a regular supply ofelectricity to Project areas that have received regular electricity connections.

63 0 Parish councils: MoU with parish councils focus on coordination arrangements and maintenance roles that councils will assume in the provision of basic services under the project. Key parish council responsibilities will include the review and approval of infrastructure plans, operating and maintaining minor roads, footpaths and drainage structures and paying energy charges to JPS Co. for street lighting services.

The project will also enter a series of contractual arrangements for services with specialized agencies. For example, under the microfinance component JSIF will contract a commercial bank or similarly competent institution to serve as technical auditors ofFI bidders and bids. Similarly, a competent external commercial entity will be contracted to monitor the progress in implementation of MFIs that have secured the bids. Under the public safety enhancement component external organizations that have demonstrated a competence in crime and violence mediation, skills development, capacity-building for CBOs and educational services will be contracted to provide mediation and social prevention services.

Imulementation of Electricity Connection Regularization through a Public Agency: Under Component 1.1 the Project will support the provision of legal electricity connections through the Rural Electrification Programme (REP), a limited liability company and an agency of the Ministry of Commerce, Science and Technology. In this case a competitive process for selection is not feasible given that the regularization of electricity connections can only be done by REP. The JSIF Operations Manual and the MoU between JSIF and REP outline in detail specific activities, unit costs and arrangements of execution. A majority of expenditures for the implementation of the activity will be procured through a competitive process from contractors with the involvement of REP in the definition of specifications and the evaluation of bids. Additionally, REP will have access to a Force Account for the administration of the activity to finance administrative costs associated with implementation including the cost of work supervision, site preparation, technical supervision and approvals.

Partnership arrangements with international donor uromams: The project will include formal collaboration with ongoing and planned USAID and UNDP interventions. USAID is currently preparing a second phase ofthe successful Peace and Prosperity Initiative (PPI) and has agreed in principle to coordinate investments in at least two of the 12 selected ICBSP project areas. The second phase of the PPI will complement ICBSP interventions in these areas by implementing community policing and CBO capacity building activities based on existing successful methodologies used in Grants Pen and other areas. Similarly, the Bank and JSIF have collaborated closely with UNDP-financed Civil Dialogue for Democratic Governance Program. UNDP has also committed to mobilizing the dialogue initiative in ICBSP to support community leaders to build advocacy, communications and partnership skills.

Stakeholder coordination: Given the broad spectrum of agencies that will be involved in the project it is envisioned that quarterly review meetings will be held with all partner agencies involved in implementation. These include - but are not limited to - NWC, NSWMA, SDC, USAID, CSI, parish councils and the Ministry ofNational Security.

64 Annex 7: Safeguards Policy Issues JAMAICA: Inner City Basic Services for the Poor Project

A. Use of Country Systems Pilot Starting in 2005 and extending over the next two years the Bank will be supporting a limited number of pilot projects in which lending operations will be prepared using the borrowing country’s systems46 for selected environmental and social safeguards, rather than the Bank’s operational policies and procedures on safeguards. The rationale for using country systems is to scale up development impact, increase country ownership, build institutional capacity, facilitate harmonization and increase cost effectiveness. These pilot operations are governed by a new operational policy (OP/BP 4.00) ‘Piloting the Use of Borrower Systems to Address Environmental and Social Safeguard Issues in Bank-Supported Projects’. This Policy elaborates on the approach, enumerates the criteria for assessing country systems, and specifies documentation and disclosure requirements and respective roles of the client country and the Bank.

Under the pilot process the Bank considers a Borrower’s environmental and social safeguard system to be equivalent to the Bank’s if the Borrower’s system is designed to achieve the objectives and adhere to the applicable operational principles set out in Table A1 of OP 4.00. Since equivalence is determined on a policy-by-policy basis in accordance with Table Al, the Bank may conclude that the Borrower’s system is equivalent to the Bank’s in specific environmental or social safeguard areas in particular pilot projects, and not in other areas4’. Before deciding on the use of Borrower systems, the Bank also assesses the acceptability of the Borrower’s implementation practices, track record, and institutional capacity. The above approach and criteria for assessment were developed with inputs from external stakeholders such as representatives of governments, bilateral and multilateral development institutions, civil society organizations, and the private sector and are consistent with commitments made by the development community in the Paris Declaration on Aid Effectiveness in March 2005.

Jamaica is one of the initial countries that have been identified for piloting the use of country systems, specifically in the Inner City Basic Services for the Poor project (ICBSP). The engagement with Jamaica on the use of country systems dates back to activities undertaken prior to the High Level Forum on Harmonization (Rome 2003) where Jamaica volunteered to pilot harmonization offiduciary and safeguard requirements. As part ofthis harmonization process, the Bank initiated a dialogue with the Government of Jamaica and financed a comparative review4* ofJamaican, Bank and other key donors’ safeguard policies. The proposed ICBSP is designed on the basis of a Community Driven Development (CDD) approach and would be financing small and medium scale infrastructure projects. Therefore, experience from this pilot operation would be relevant to the Bank’s growing portfolio in this sector, particularly in case of projects financed in Caribbean nations and other small countries. The proposed pilot is expected to bring the added benefit of moving towards harmonization of environmental and social safeguards requirements among the Government of Jamaica (through JSIF), the World Bank and other development

46 Country systems is defined as the country’s legal and institutional framework, consisting of its national, subnational, or sectoral implementing institutions and relevant laws, regulations, rules, and procedures that are applicable to the proposed pilot project. 47 The Bank’s environmental and social safeguard policies will apply to the areas which the Bank has determined not to be equivalent and will continue to apply to all projects that are not part of the pilot program. 48 James R. Newman, Report on Jamaican Harmonization Analysis (2003).

65 partners, such as the USAID, DFID, IDB, EU and CIDA who also work in the sector. It is also consistent with the guidance of the Board to include a small island state in the pilot program.

B. Environmental and Social Aspects The project will support improvements in basic local infrastructure, services and facilities in target inner-city communities and will finance the following types of investments:

Drinking water supply - public and household connections; Sewerage or on-site sanitation, including small package treatment plants, if needed; Sanitary cores for unserviceable housing stock; Storm drainage; Solid waste system improvements, such as collection points and pick-up service; Small roads, within the participating communities; Sidewalks; Street lighting; Replacement ofzinc fencing with alternative perimeter fencing; and Community centers and recreation facilities.

The above investment^^^ are expected to have generally positive environmental impacts, although some could result in minor adverse environmental impacts that would be mostly local and reversible. Site and project screening, appropriate design, environmental permitting, construction and operational practices using environmental management plans (EMPs) are expected to adequately address the environmental impacts ofthis project.

The proposed ICBSP is not expected to have any impacts on physical cultural property and the areas and communities selected in the historic Spanish Town are away from historic buildings and other monuments. However, there could be some chance finds of culturally important artifacts, particularly in the Spanish town/ St. Catherine area.

At this stage ofthe planning process, the proposed interventions are not expected to result in any involuntary land acquisition under eminent domain or in any major involuntary resettlement (displacement of families or individuals). However, it is possible that smaller pieces ofland may be required for certain infrastructure components, or construction activities may infringe temporarily on residential plots, structures, or businesses. Moreover, if land is required for activities planned under sub-projects, it appears that it may be acquired from the municipal authorities (vacant public land) or through sale/exchange by willing seller to willing buyer5'. An additional option is land donations, which would need to be properly documented and verified. Involuntary land acquisition under eminent domain will only be used as a last option. Thus, a Resettlement Policy Framework is required to ensure that land acquisition impacts are mitigated in accordance with the objectives and operational principles stated in OP 4.00.

~ ~ 49 No adverse impacts are anticipated from the investments proposed under the microfinance subcomponent. Neighborhood Basic Infrastructure and Public Safety Plans - Volume 7: St. Catherine: Central Village (Andrews Lane, Little Lane, Detroit, Big Lane). JSIF, October 2005, p. 4, 37

66 C. Equivalence and Acceptability Assessment The following sections describe the diagnostic review and the resulting equivalence and acceptability assessments, carried out by an interdisciplinary team ofBank staff’ in co-operation with the National Environment and Planning Agency (NEPA), as well as JSIF staff, local environmental legal specialist and consultants. The respective assessments were done for two Bank policy areas (Environmental Assessment and Involuntary Resettlement) and their scope was limited to the requirements ofthis specific operation.

Equivalence Assessment The review of Jamaican laws and regulations that govern environmental assessment showed that there are some gaps, but except for the budgeting and staffing for environmental management plans, the gaps are not relevant to the types ofactivities to be supported by this project. Moreover, the environmental aspects of the proposed ICBSP will be addressed by JSIF’s internal environmental procedures. JSIF’s environmental guidelines have been expanded and enhanced into an Environmental Management Framework (EMF) to meet the requirements of Jamaican laws and the objectives and operational principles stated in OP 4.00.

As stated before, the proposed ICBSP is not expected to have any impacts on known physical cultural property. However, procedures for dealing with chance finds of culturally significant artifacts have been incorporated into the EMF.

As far as land acquisition (and any involuntary resettlement) is concerned, there is no applicable policy in Jamaica (although a draft policy had been prepared some years ago). Therefore, JSIF assisted by their project preparation consultants has prepared a Resettlement Policy Framework (LARPF) for the proposed ICBSP incorporating the objectives and operational principles of the Draft Green Paper and the Bank OP 4.00. The draft LARPF includes:

An entitlement matrix ofeligibility criteridtype of loss, definition ofentitled persons, and entitlements; Consultation arrangements that includes integration into the community planning process with indications of how and where in this process land acquisition is assessed, alternatives considered, and possible acquisition methods and compensation arrangements agreed; Valuation methods for compensation for lost assets; Institutional arrangements and coordination with other agencies; Compensation for assets lost by squatters; Linkages between the proposed project (or specific sub-projects) and other activities, Disclosure arrangements for land acquisition and resettlement plans including the community consultation process; Grievance redress procedures; and Monitoring indicators and arrangements.

The gaps identified in the equivalence assessments will be filled by (i)expanding and upgrading JSIF’s environmental guidelines into an EMF, and (ii)preparing a LARPF, to deal with voluntary and involuntary land acquisition under ICBSP. Both frameworks are being incorporated into

5’ Asger Christensen (Lead Social Development Specialist, EASSD); Hanneke van Tilburg (Senior Counsel, LEGEN); Heinz Unger (Environmental Specialist, World Bank consultant) and L. Panneer Selvam (Senior Environmental Specialist, ESDQCIQACU)

67 JSIF’s Operations Manual (OM) and have been adopted as a corporate policy by JSIF’s Board. JSIF will apply the OM to all its projects, irrespective the source of financing.

Acceptability Assessment JSIF has, to a great extent, fully integrated environmental analysis and management actions into its sub-project processing procedures. JSIF’s responsibility for good environmental management extends to all types of sub-projects, including those to be implemented by other agencies, such as the National Water Commission or the National Works Agency. As part of JSIF’s monitoring and evaluation program, the environmental performance of 37 randomly selected sub-projects was reviewed in early 2005 by independent environmental consultants: only minor problems were found with 6 of these sub-projectsS2. Also, in the recent past JSIF had taken some positive steps to improve its environmental performance. More specifically, JSIF has already: (i)conducted staff training focusing on environmental management of projects; (ii)recruited a full time environmental specialist and designated an alternate; and (iii)trained additional staff and retained environmental consultants as needed to improve its performance. JSIF is also in the process of extending its management information system (MIS) to cover environmental land / resettlement aspects as well. JSIF has incorporated the Environmental Management Plans (EMP) into the contract documents, and will under ICBSP, apply the appropriate remedies for non-compliance by contractors with the requirements of the EMP. JSLF has also started the process for obtaining IS0 14000 Environmental Management Systems certification. The latter action is expected to enhance JSIF’s capacity and ability to take appropriate actions over the medium term, and to make acceptability sustainable.

JSIF has not previously been dealing with land acquisition in the projects it has managed and it does not at present have staff dedicated to the planning, implementation, and monitoring of land acquisition and resettlement. However, JSIF has several field-based, qualified community organizers who have extensive experience in organizing community consultations and participation. JSIF is committed to strengthening its capacity in this area, by designating a minimum of two staff members to manage land acquisition and resettlement and training them, possibly at the World Bank combined with exposure visits to projects in the region with well- functioning ongoing resettlement activities. Their role would be to ensure that land acquisition is adequately addressed in project preparation and the implementation process, while also serving as trainers for the JSIF Community Liaison Officers and for field staff from the Social Development Commission (SDC) involved in the proposed project.

Based on the assessments summarized above, some gap-filling actions by JSIF are still required to achieve and sustain acceptability. Table 1 provides a summary ofactions agreed with JSIF.

52 Examples of identified minor problems are: an uncovered manhole, missing garbage disposal facility at basic school, eroding gravel road surface, dust nuisance during construction.

68 Table 1: Summary of Agreed Actions and Timetable

Actions To Be Taken By Whom Target Date To Achieve Equivalence JSIF Board to approve the new EMF and LARPF. JSIF Completed Disclose the approved EMF and LARPF locally and in Bank infoshop JSIF and Completed Bank Draft amendment to JSIF’s OM to include: JSIF Completed (i) the new EMF and LARPF; and (ii) EMF provisions in contract bid documents, including remedial measures to address non-compliance ofEMPs. JSIF Board to approve the draft amendment to OM JSIF Completed To Achieve and Sustain Acceptability Appoint a permanent environmental specialist and designate alternate JSIF Completed staff members to work on environmental issues. Appoint a permanent resettlement specialist and designate alternate JSIF Completed staff members to work on resettlement issues. JSIF to include acknowledgement ofthe requirements ofthe EMF JSIF Completed

Incorporate the monitoring requirements for EMF and LARPF in the I JSIF Completed MIS Provide training to JSIF environmental and resettlement specialists JSIF Before and their alternates. disbursement under sub- component 1.1. Provide periodic training and refresher courses for JSIF staff JSIF Periodically, as and others in environmental management and resettlement. needed to ensure adequate capacity as assessed by the Bank Conduct annual audit of sample projects to learn lessons from JSIF/NEPA Once every year application ofEMF and LARPF and introduce corrective measures assisted by for sustaining the improved processes independent consultants Start implementation ofplan and program for achieving JSIF by September IS0 14001certification 2006

D. Consultation and Disclosure JSIF, NEPA and the Bank jointly organized a public consultation workshop on November 1,2005 to discuss the draft Equivalence and Acceptability Assessment report prepared by the Bank team. Apart from sending personal invitations (along with a copy ofthe draft report) to a large number of relevant agencies and individuals, JSIF had placed the draft report and an open invitation to the workshop in its web site. Over 60 people, representing NGOs, consultants, donor agencies, and other Government departments attended this workshop. While most of the questions and discussions were on the project design and criteria for selecting communities, the participants expressed their support for the proposed pilot approach and endorsed the proposed gap-filling measures. Representatives of the National Environmental Protection Agency (NEPA) clarified the environmental permitting requirements for activities that are likely to be financed under ICBSP. The Planning Institute of Jamaica (PIOJ) expressed its strong interest in expanding the scope of the proposed pilot beyond JSIF and sought Bank assistance to support its efforts to harmonize NEPA’s laws and regulations with those of key donors active in Jamaica, as well as

69 improving its overall environmental performance standards. The draft equivalence and acceptability assessment report has been disclosed both in Kingston (JSIF’s website and in their office) and in Washington (on the Bank’s external website on the use of country systems. It is also being posted in the Bank’s Infoshop).

E. Supervision and Monitoring JSIF will assist the Bank in monitoring the implementation status of the gap-filling measures and their impacts on achievement and sustenance of equivalence and acceptability. More specifically, JSIF will be required to prepare quarterly monitoring reports on the implementation status of each of the above-mentioned gap-filling measures and their outcomes as agreed with the Bank. JSIF will also perform, and report on, annual audits of a sample of project investments to assess the effectiveness of the application of the EMF and LARF’F. In addition, the NEPA will remain responsible for screening and processing applications by JSIF for environmental permits, and for annual spot checkdaudits of JSIF’s compliance with Jamaican environmental laws and regulations.

The Bank will be responsible for monitoring the implementation status of gap-filling measures and environmental performance of activities financed under the ICBSP. Apart from reviewing the bi-annual reports and environmental audits prepared by JSIF, the Bank will carry out bi-annual supervision and agree to any remedial actions by JSIF and/or NEPA that may be needed to sustain the equivalence and acceptability as described above. In addition, the Bank will commission an independent evaluation ofimplementation experiences after two years.

70 Annex 8: Summary of Environment Management Framework JAMAICA: Inner City Basic Services for the Poor Project

A. Introduction The Jamaica Social Investment Fund (JSIF) finances and implements a variety of small-scale community level projects in rural, peri-urban and urban areas. These projects are expected to have generally positive environmental impacts, although some could result in minor adverse environmental impacts that would be mostly local and reversible. Occasionally, there may be a need for involuntary land acquisition under eminent domain to meet the requirements of land for a project. In the past JSIF has used a set of Environmental Guidelines that were appended to its Operations Manual (OM).

For the purposes of this project and for all its future operations, JSIF has developed an Environmental Management Framework (EMF) to manage any potential adverse environmental impacts in a more structured and systematic manner. Preparation and adoption of an EMF is also one of the gap-filling actions required to meet the requirements of using JSIF’s procedures under the Use of Country Systems pilot. The EMF ensures that JSIF meets Jamaican environmental laws and regulations and also the relevant policies of its major funding agencies like Caribbean Development Bank, European Union, Inter-American Development Bank, World Bank and other development partners.

The EMF has been reviewed and found acceptable by the Bank and approved by the JSIF Board on January 25,2006. The EMF was also disclosed by the Bank though the InfoShop on February 6, 2006 and has been made publicly available in-country by the client.53 The final EMF is also included as part of the JSIF Operations Manual.

One ofthe guiding operational principles ofJSIF is that projects funded by JSIF must conform to the Government of Jamaica’s environmental regulations and have minimum impacts on the natural and cultural environment. Therefore, the EMF is an integral part of JSIF’s Operations Manual (OM) and is applicable to all investments financed by JSIF, regardless of its funding source or implementing agency. The main objectives ofthe EMF are to:

0 establish procedures for screening all proposed projects for potential adverse environmental impacts and land requirements/acquisition; 0 specify measures for managing, mitigating and monitoring environmental impacts during project implementation and operation; and outline the training and capacity-building arrangements needed to successfully implement the provisions ofthe EMF.

B. Projects Financed by JSIF JSIF finances only small-scale projects that are aimed at improving the livelihood of small communities and their access to basic services, and supporting income generating activities through micro credit funding etc. These projects can be classified into three broad groups: (a) Infrastructure; (b) Social Services; and (c) Capacity-building. Some ofthe infrastructure projects funded by JSIF are likely to have localized minor adverse impacts, mainly during construction, and therefore provisions ofthis EMF will be applicable to them.

53 In-country disclosure has been made through publication on the JSIF website: (http://www.jsif,org/inner_city_basic_serv.asp).

71 Because of their size/magnitude and significant potential environmental and social impacts, some types of projects are ineligible for JSIF financing. The EMF provides a ‘negative list’ of such projects.

C. Screening Procedures Jamaican national environmental regulatory requirements are prescribed by the environmental Permit & License System (P&L) which is administered by the National Environment and Planning Agency (NEPA). It is a mechanism to ensure that all Jamaican facilities and development projects meet the relevant standards and procedures to minimize adverse environmental impacts during construction and operation of a facility. The specific national regulatory requirements are (i)an environmental permit to construct and/or (ii)a license to discharge. NEPA has confirmed that some of the JSIF projects would require an environmental permit. NEPA will either grant an environmental permit, sometimes with terms & conditions, or may require the preparation of a full Environmental Impact Assessment (EIA) prior to granting the environmental permit. Projects and facilities that discharge a substance to the atmosphere, to the ground or into surface waters may require a license to discharge. This license is also issued by NEPA after review of an application which is submitted together with the application for an environmental permit to construct. Among the projects eligible for JSIF financing, only small (package) sewage treatment facilities would fall into the category requiring a license to discharge.

The Safeguards Diagnostic Review report has found that the main difference between Jamaican national environmental requirements for the types of infrastructure projects financed by JSIF and those ofthe World Bank and other international development partners is the preparation and use of an Environmental Management Plan (EMP). An EMP sets out project specific mitigation measures and corresponding monitoring requirements. The use of generic EMPs for small-scale infrastructure projects with minor adverse environmental impacts has become internationally accepted good practice.

The EMF provides a matrix to assist with screening JSIF projects and determine, depending on category and type of project, whether a permit application to NEPA, or an EMP, including mitigation actions, is required. The detailed screening process by JSIF is set out in the EMF, and a checklist is provided to guide the technical and environmental officerss4. The screening and implementation ofmitigation measures are fully integrated with the JSIF project cycle.

D. Implementation Arrangements The EMF describes in detail the steps for implementing the NEPA requirements. In addition to a permit, terms & conditions, or a full EIA, NEPA may also require special monitoring and reporting actions, and normally will carry out periodic monitoring of the implementation of the project to make sure the its requirements are being met.

To assist JSIF officers with implementing EMP requirements, standard generic EMPs have been prepared for each of the main project categories, based on the expected likely environmental impacts during the construction phase”; these generic EMPs are appended to the EMF. The EMF

s4 Some site-specific issues may present serious environmental risks and / or impacts. Therefore, the EMF prescribes a site screening mechanism to identify sites that are potentially unsuitable due to site-specific environmental conditions. In addition, the land on which a project is to be located must comply with the zoning requirements ofNEPA and relevant local planning legislation. 55 Some projects may have additional requirements for mitigation and monitoring in response to issues identified during site screening, which shall also be specified in the contract documents.

72 also prescribes how the applicable EMP(s) are to be incorporated into the bidding and contract documents to enforce compliance by the contractor. An annex to the EMF contains additional guidance for detailed steps and actions in good environmental management, specifically for the design and operational phases.

Another specific potential impact may be chance finds of physical cultural property, especially because some of the ICBSP communities are in the vicinity of the central area of Spanish Town in St. Catherine Parish which is a declared Historic District. The EMF provides procedures and sets out the required actions to comply with the requirements of the Jamaica National Heritage Trust (JNHT) Act to protect any chance finds of cultural propertys6.

The implementation of projects, including all environmental aspects, is under the overall responsibility of JSIF. JSIF may employ a construction contractor or use community-based contracting, or projects may be implemented by agreement with and through partner agencies, such as the local parish councils, the National Water Commission (NWC), or the Jamaica Public Service Company (JPS).

The provisions of the EMF will apply regardless ofthe implementing agency, and JSIF will retain ultimate responsibility for the good environmental management of all its projects.

E. Consultation and Disclosure It is JSIF’s mission to empower communities to effectively implement community-based programs aimed at social development. JSIF’s Operational Manual (OM) prescribes a project preparation and implementation process that involves participation of the project community at all key steps. This participatory process facilitates the consideration of environmental aspects as it integrates into the project cycle disclosure of project information to, and consultation with, the community.

The EMF prescribes the key environment-related consultation and disclosure actions during project preparation and implementation and stresses the importance of JSIF, its partner agencies and especially the communities, following and participating in the process.

F. Monitoring, Reporting and Capacity-Building The EMF sets out the requirements and responsibilities for monitoring and reporting; which will be facilitated by JSIF’s new MIS. Copies ofthe bi-annual and annual EM monitoring reports will also be sent to NEPA and to the World Bank for review during the periodic supervision missions.

Lastly, the EMF also has provisions for capacity-building within JSIF, especially for the key officers, i.e. the Environment and Resettlement Officer (ERO) and the alternate. They in turn, are to provide training to project officers and community liaison officers.

56 This provision will also satisfy the requirements of the policies on cultural property of international development partners, such as the World Bank, as set out in the draft OP 4.1 1 on Physical Cultural Property.

73 Annex 9: Summary of Land Acquisition & Resettlement Policy Framework JAMAICA: Inner City Basic Services for the Poor Project

A. Introduction The Land Acquisition and Resettlement Policy Framework summarized below will apply to all JSIF-funded community projects including the Inner City Basic Services for the Poor Project. For JSIF-funded community projects, the Policy Framework will supplement existing Jamaican law pertaining to land acquisition and resettlement (the Land Acquisition Act of 1947) by introducing additional compensation measures to achieve compensation at replacement cost and income restoration together with implementation and consultation arrangements to minimize land acquisition impacts and obtain the informed consent ofthose affected by land acquisition.

JSIF has prepared a Land Acquisition and Resettlement Policy Framework (LARPF), which establishes equivalence with the objectives and operational principles in OP 4.00 and OPiBP 4.12. The LARPF has been reviewed and found acceptable by the Bank and was approved by the JSIF Board on January 25, 2006. The framework was also disclosed by the Bank though the InfoShop on February 6, 2006 and has been made publicly available in-country by the The final EMF is also included as part of the JSIF Operations Manual. A complete Policy Framework has been incorporated into the JSIF Operations Manual.

JSIF-funded community projects comprise a range of infrastructure investments including drinking water supply, sewerage, sanitation, storm drainage, small roads, school buildings, and community and recreation facilities.

Since the land acquisition impacts deriving from these community projects will be minor, the appropriate instrument to manage such impacts shall be an Abbreviated Resettlement Plan attached as an annex to the project proposal/plan agreed between the community and JSIF. If land acquisition under a community project causes displacement, the Abbreviated Resettlement Plan shall include economic rehabilitation measures.

B. Means of Obtaining Land The infrastructure investments undertaken in JSIF-financed community based projects are for the most part located within and identified by the beneficiary communities, which implies that access to land may be obtained through other means than just land acquisition through eminent domain. Thus, land for different investment components in a community project could be obtained though one or a combination ofthe different means listed below. While all of these means of obtaining land would require documentation, not all would necessitate payment of compensation and/or provision of relocation and rehabilitation assistance. However, in all cases, care shall be taken to ensure that the persons involved are fully informed about the project, about the avenues for grievance redress, and confirm that the donation or long-term lease is voluntary. This information is provided during the consultations that take place as part of the participatory community project preparation process.

57 In-country disclosure has been done through publication on the JSIF website (http://www.jsif,org/inner-city-basic-serv.asp).

74 Means of obtaining land Requirements

~ Voluntary donation or long term lease of Attached to the community project proposayplan must private land be Proof of Ownership and Documentation of Donation ofAssets or Documentation of Long Term Lease Donation of community land Attached to the community project proposaliplan must be Proof of Ownership and Documentation of Donation of Assets. Willing-seller-willing-buyer transaction Attached to the community project proposayplan must be Proof of Ownership and Documentation of Sale of Assets. Transfer of public land without squatters or Attached to the community project proposayplan must other encumbrances be permission from the Government Agency holding the land or from the Commissioner of Lands. Transfer of public land with squatters or other Attached to the community project proposaUplan must I encumbrances

squatters. Involuntary land acquisition based on eminent Abbreviated Resettlement Plan attached as an annex to domain with or without associated the community project proposayplan displacement

C. Community Project Preparation, Consultation, and Land Acquisition Planning Given that the persons potentially affected by land acquisition and displacement in JSIF-financed community-based projects are in most cases also project beneficiaries with a voice in decision making on both the type of investments and technical alternatives, there is a strong incentive to seek solutions that avoid or reduce adverse impacts fi-om land acquisition. During the community-based participatory project preparation process, consultation on technical options will involve a concurrent assessment of potential associated land acquisition impacts as described in the table below. This will facilitate an early and ongoing identification of feasible technical design alternatives to avoid or minimize such impacts, and will also enable consultation with persons affected by land acquisition to obtain their consent regarding mitigation measures.

Community Project Actions on Land Acquisition Responsible Preparation- 1. Promotion Information dissemination on: JSIF Environment (mformation dissemination 0 project eligibility (< 10 families to be resettled); & Resettlement on JSIF funding of need to avoid or minimize land acquisition in Officer and community projects and rules project planning; Community Liaison of the game) acceptable means of obtaining land; and Officers compensation options for PAPS. 2. Project Application Indicate: Community/CB 0 0 expected need for land for specific investment components; means ofobtaining such land; and need for land acquisition and assessment of impacts. 3. Review of Application Reject application and return for revision if 10 JSIF Environment or more families are planned to be resettled as a & Resettlement result of envisaged land acquisition. Officer

75 Include preparation ofAbbreviated Resettlement Plan in TOR for design consultant if required. 4. Project Concept Preliminary Site Screening and Community JSIF Environment Development Consultations to: & Resettlement verify need for land for specific investment Officer and components; Technical Appraisal confirm information on voluntary land Officers donations and availability ofunused government land; assess options for avoiding or minimizing land acquisition; ensure that potentially affected persons and land donors are involved in the consultation and informed ofoptions; if squatters have to be resettled, attempt to find secure alternative accommodation for these in the community; and conduct census ofPAPs. 5. JSIF Technical & Social 0 Assist community in obtaining permission to JSIF Environment Review use available government land from the Agency & Resettlement holding the land or from the Commissioner of Officer and Lands; Technical Appraisal Obtain documentation on land donations from Officers community and private donors; Review technical options to avoid or minimize land acquisition; 0 Compile inventory ofassets lost by PAPs; Design Consultant 0 Draft Abbreviated Resettlement Plan; and Review/approve Abbreviated Resettlement JSIF Resettlement Plan. Officer 6. Project Design Present Abbreviated Resettlement Plan in a JSIF Environment community consultation to obtain endorsement & Resettlement from PAP’S and community. Officer and Community Liaison Officers 7. Project Approval For World Bank assisted projects: JSIF submit Abbreviated Resettlement Plan for review and approval; and disclose the Abbreviated Resettlement Plan at a dace accessible to PAPs and NGOs.

D. Institutional Arrangements The overall responsibility for the implementation and enforcement of the Land Acquisition & Resettlement Policy Framework rests with JSIF. Within JSIF, there shall be an Environment & Resettlement Officer and a Legal Officer.

Acquisition of the land required for a particular community project will be undertaken by the Commissioner of Land based on information and documentation provided by JSLF. Valuation of the assets to be acquired will be conducted by the Land Valuation Division ofthe National Land Agency.

76 Grievance redress will be pursued at different levels (community, JSIF, specialized arbitration institutions) with recourse to the courts as the last option for the aggrieved party.

E. Monitoring Arrangements For each community project, information on land requirements and the means of obtaining any land required by a particular project component will be recorded in the MIS for different stages of the project cycle:

Community Project Cycle Data for MIS

Review of Application-_ I Approva1;or Rej'ection (> 10 families to be resettled) Project Concept Development and Community consultations (date, # of participants JSIF Technical & Social Review including potential PAPs, issues); and Documentation provided on voluntary land donations and transfer ofunused government land. Abbreviated Resettlement Plan Data from census with inventory of assets lost by PAPs, entitlements, and socio-economic data; Dates of receipt, review, and approval by JSIF of ARP; Dates ofsubmission and approval by Bank ofARP (for Bank assisted projects); and Date of disclosure ofARP. Implementation Delivery of compensation and rehabilitation entitlements as per ARP; and I Data on grievance redress Post-implementation I Evaluation including assessment of economic rehabilitatiodincome restoration.

Each Abbreviated Resettlement Plan will establish a baseline through the census of PAPs which will comprise socio-economic data, the inventory of assets lost, and the compensation and resettlement benefits awarded to the PAPS. Progress monitoring by JSIF will record the timely provision of compensation to PAPS (whether provided before or after possession was taken ofthe asset), and the timely provision of resettlement assistance. The data will be entered into JSIF's MIS together with information on land provided through voluntary donations, nominal long-term leases, and vacant government land. An evaluation will be undertaken to establish whether the objective of the measures to mitigate the land acquisition and resettlement impacts have been achieved, namely, whether PAPs affected by land acquisition and resettlement have been able to improve, or at least restore, their livelihoods and standards of living to pre-displacement levels. Data on gnevance redress will also be entered in the MIS and summarized in status reports.

For projects assisted by the World Bank, periodic supervision will assess whether the implementation is in compliance with the provisions in approved Abbreviated Resettlement Plans.

77 F. Land requirements under Community Projects For the 12 community projects under the Inner City Basic Services for the Poor Project, consultations were conducted during project preparation on the need for land and means to obtain such land. 58 Land required for specific project components will be obtained as listed in the table below. The table was updated in a consultation on JSIF’s Land Acquisition & Resettlement Policy Framework with representatives of all the 12 target communities on January 13,2006.

Method of obtaining land

Project 1 Communities Parish Community Project Component requiring Seller- land Willing-

Whitfield Town Kingston-St.Andrew None I Federal Gardens Kingston-St.Andrew Community Center Yes Passmore Town/Browns Town (D~nkirk)~~ Kingston- St .Andre w None Jones Town Kingston-St.Andrew None Tawes Pen St. Catherine Community Center6’ Yes I I March Pen (Africa) St. Catherine None I I Central Village St. Catherine - Community Center To be decided - New drain from Central To be decided Dempshire Ped Jones Pen St. Catherine - Off-site drain (Shelter Rock) extensions Lauriston St. Catherine - - Community Centerb’ Bog Walk Bucknor Flankers

- Road (Hog Citv)66 To be decided

58 Final Neighborhood Basic Infrastructure &Public Buildings Safety Plans -Community Specific Plans, JSIF, Dec. 2005. 59 The project will refurbish the existing sewer network, which will be connected to a sewage treatment facility to be funded from other sources. Since the two activities are linked, the access to land for the treatment facility needs to be clarified. 60 Upgrading of existing structure. 61 Upgrading of existing structure. 62 The land was previously bought by a neighborhood CBO with its own funds. 63 The Community Center will be located on a piece of land presently used in part as a community sports/play-ground, and in part as residential area by squatters. At the consultation on JSIF’s Policy Framework on January 13,2006, community members were of the opinion that the Community Center could be constructed on the site without disturbing the squatter settlement or the sportsiplay-ground. 64 Upgrading of existing structure. 65 During a Bank team field visit to the Flankers’ neighborhood on January 12, 2006, it was found that the planned rehabilitation and extension of a storm drain from Providence Heights in Hog City would require at least temporary relocation of 3 squatter houses built on the bank and partly over the gully. An assessment of the need for temporary or permanent relocation needs to be made as part of the finalization of the community plan for Flankers, and if required, the plan needs to be amended with resettlement mitigation measures. 66 Road rehabilitation will require minor realignment and shifting of a fence.

78 Annex 10: Financial Management and Disbursement Arrangements JAMAICA: Inner City Basic Services for the Poor Project

Background This report summarizes the findings of the financial management capacity assessment for the Jamaica Inner-City Basic Services Project. The objective of the assessment is to determine whether the project’s implementing entities have acceptable financial management arrangements including the accounting system, reporting, auditing, and internal controls. The entity’s arrangements are assessed in terms of being capable of recording correctly all transactions and balances, supporting the preparation ofregular and reliable financial statements, safeguarding the entity’s assets and addressing inherent fiduciary risks, and are subject to auditing arrangements acceptable to the Bank. The specific activities and circumstances of the ICBSP were factored in to ensure that the entities’ financial management system is not only acceptable in general terms but it is also commensurate with the needs and the unique nature of the project. In doing so, due consideration was given to the objective of building on JSIF experience rather than having parallel systems for the project. The ICBSP institutional and implementation arrangements will be based on those ofthe JSIF, an already exiting entity that has implemented two World Bank-financed projects. As the ICBSP follows to a large extent the model of these two previous projects, the ICBSP can be considered as a repeat project with minor changes to the financial management arrangements. This assessment has taken into consideration the adjustments necessary to deal with aspects that are specific to ICBSP and which are not adequately covered by the current financial management system. Country Issues The impact ofthe Jamaican public financial management system on the project is discussed in the Risk Analysis section. Beside this impact, one of the major issues affecting project implementation is the country’s fiscal situation. Both counterpart funds and loan funds must be included in the budget. Given the high debt level and the Government objective ofbalancing the budget, project funds are usually cut to meet fiscal targets. Although JSIF has received all the funds requested during the current fiscal year, this issue may affect the implementation of the ICBSP. Another country issue is related to the use of designated accounts in Jamaica. According to Government regulations, loan funds have to be disbursed from the Government Consolidated Fund in order to be recognized as Government debts and subsequently paid by the Accountant General when due. Because of this requirement, many projects have suffered from cash flow problems as the designated account funds could not be used to make payments directly. Instead, the payments have to be made first from the Government Consolidated Fund Account which is then reimbursed from the designated account. JSIF has not suffered from this issue because ofthe flexibility offered by the Project Agreement. The Bank is currently discussing how to address the issue with the Ministry of Finance and Planning. In the meantime, the provisions of the NCDP project agreement should be followed for the ICBSP, to avoid cash flow problems. Financial management and disbursement arrangements Key features affecting financial management and disbursement arrangements Given the similarities of the ICBSP activities with the NCDP currently being implemented by JSIF, the same financial management arrangements will be followed to a large extent. Except for the activities related to the Access to Financial Services subcomponent, the implementation arrangements for all the other activities, including financial management aspects are already

79 covered by the JSIF operations manual. The implementation arrangements including financial management for the microfinance activities are described in the Microfinance manual that was developed during project preparation. For financial management purposes, the activities of the project can be grouped under the following categories: - Basic infrastructure activities imdemented directly by JSIF or in association with other agencies: This category of activities will follow the JSIF model of community subprojects described in its operations manual. Under this model, JSIF handles all procurement and disbursement as well as accounting and reporting. - Basic infrastructure activities implemented directly by the communities. The JSIF model of community-based contracting will be followed for this category of activities. Under this model, JSIF disburses funds to community-based organizations on the basis of a financing agreement. The CBOs manage these funds directly including procurement and payments to suppliers ofgoods and services, as well as accounting and reporting. - Performance-based mechanism for the extension of microfinance loans: JSIF awards least-cost subsidies through a competitive tendering process to FIs which agree to disburse, service and collect a predetermined number of loans or dollars lent. The awards to FIs will be structured as performance-based contracts and the contracts would disburse against an agreed fixed payment for each loan. The end use ofthe subsidies by the FIs is not relevant here. The major financial management implication is the need to ensure compliance with the criteria for the selection of the FIs and reliability of the information provided by the FIs as the basis for disbursement. Based on the above, the financial management arrangements ofthe project will mainly use JSIF’s current system with some amendments as necessary to address specific aspects such as those related to the performance-based mechanism. Implementing Entity The overall responsibility for the project’s financial management will lie with the JSIF. JSIF is a temporary, autonomous Government-sponsored institution primarily designed to channel resources to small-scale community-based projects. JSIF was established in 1995 as part of Jamaica’s National Poverty Eradication Program (NF’EP). The Jamaican Cabinet gave its approval in December 1995, to JSIF’s incorporation as a limited liability company conforming to the definition of a Government Company within the Financial Administration and Audit Act. A loan to fund operations of the JSIF was subsequently negotiated between the Government of Jamaica and the World Bank, to implement the Jamaica Social Investment Fund project. Subsequently further loans were negotiated with other International Funding Agencies, including the World Bank (the National Community Development Project). Under these projects, JSIF has developed a core competence in financial management procedures, and in dealing with CDD subprojects, including financial management capacity-building for the community-based organizations. The project’s financial management will be handled by JSIF’s Finance and Administration Unit (FAU). As a government registered company, JSIF is subject to the Jamaica Financial Administration and Audit Act, the Public Bodies Management and Accountability Act and the Company Act. As such JSIF is required to meet detailed financial management requirements. Accordingly, it has developed a financial management system that encompasses procedures, accounting system, staffing and both internal control and external auditing. The financial management arrangements proposed for the ICBSP are compatible with these acts. JSIF’s Finance and Administration Unit is considered to be fully staffed. It is headed by a Finance and Administration Manager, and also includes a Financial Analyst, Financial Accountant,

80 Financial Officer and Accounting Clerk. All staff have sufficient background and experience for their duties. The financial staff is considered capable of absorbing the duties of the proposed project to the degree that it is implemented in a manner similar to current JSIF operations. The requirements of the community based contracting system will require some additional preparation ofthe staff and this will be done after the community-based contracting system is developed. Accounting System For the purpose of the ICBSP, JSIF will essentially use its existing financial management systems and procedures which will be adapted as necessary to reflect the specific needs ofthe project. The already existing accounting software (ACCPAC) can cope with several projects at a time. It will be customized to include a separate 'entity' to separately monitor the accounts of and reports on the ICBSP. ACCPAC is fully functioning. The software has a multi- currency feature, but this is limited in that it only allows for the translation ofbalances, which is sufficient for asset and liability accounts, but for sources or uses of funds, the average or weighted average exchange rates must be manually calculated. In order to facilitate the preparation of the financial reports, it will be necessary to change the structure of the chart of accounts. Currently, the chart ofaccounts is based on the source offunding and not necessarily on the project or program being funded. As a result, preparing financial reports by project requires for GoJ-financed expenditures assigning manually individual expenditures. Financial Management Procedures. The updated JSIF Operational Manual, approved by the JSIF Board on February 22, 2006, contains the key financial procedures that cover the needs of the project, including for the community subprojects. Procedures associated with the implementation of the microfinance subcomponent have been adequately developed in a microfinance annex to the Operations Manual. Further improvements, including on budgeting, reporting and internal control procedures are included in the financial management chapter. Reporting and Monitoring. JSIF produces a number of internal financial reports, while also having to create reports for the various donors. The reporting requirements for the ICBSP will be similar to those of the ongoing NCDP. Two main financial reports will be submitted to the Bank. The annual financial statements will be prepared and audited as part ofthe JSIF regular audit, which is an overall report incorporating the specific information related to various projects implemented by JSIF. In addition to the audit report, JSIF will prepare a quarterly Financial Monitoring Report (FMR), which includes information on financial, physical, and procurement progress. These reports are normally linked by reporting by project components and activities. The information from ACCPAC, along with that contained in the JSIF MIS, will be used not only to generate FMRs, but more generally, to provide better information for JSIF managers and other stakeholders. Flow offunds. Funds would be managed through a process similar to that used for the ongoing Bank-financed NCDP. A Designated account will be maintained in US dollars, and payments will be made to local contractors via a local currency account. All funds would be first budgeted via the Government's normal budget processes, with counterpart funds made available on a quarterly basis via the Government's warrant system. Internal Audit JSIF has a position of internal auditor which reports directly to the JSIF Board of Directors. In addition to the internal audit, JSIF has a Finance and Audit Committee that functions and meets monthly. External Audit Due to its legal status, JSIF must have its financial statements regularly audited. This is done every year by a private sector auditor appointed by the JSIF Board. In addition to the statutory audit of JSIF financial statements, the auditor also issues a consolidated audit report on all the projects being implemented by JSIF with a separate opinion on the financial statements of each. The quality of the audit report is found to be good. The main qualification in the audit

81 opinion has been related to the cost of the Beneficiaries/Sponsors contributions in sub-project activities which has only been partially accounted for in these financial statements. This is a recurrent problem that is being addressed as part of the MIS and the operations manual revision. The current auditors were appointed for a one-year contract renewal. These auditors are acceptable to the Bank, as they have produced well-organized, informative audit reports and management letters in previous years. The terms of reference largely reflect the requirements of the Bank and are still appropriate, given the characteristics ofthe ICBSP. JSIF will be required to submit no later than four months after the end of its fiscal year its statutory audit report and the consolidated report ofall the projects implemented. Disbursement arrangements The project will be implemented over a five year period, from May 2006 to April 201 1. Procurement will be completed by January 201 1. The proposed allocation of the loan is shown in Table 1. Table 1: Allocation of Loan Proceeds Expenditure Category

Use of report-based disbursement Report-based disbursement will be used for the project. JSIF will submit quarterly Financial Monitoring Reports (FMRs) consistent with the agreed form and content within 45 days of the end of each reporting period. To support disbursement, the FMR will be accompanied by the following additional information: Designated account (SA) Activity Statement, SA Bank

67 The estimated total cost for this disbursement category is US$4,726,750 and the estimated Bank financing requirement is US$2,826,750. For the purposes ofpresentation these figures have been rounded to US$ 4.73m and US$ 2.83m, respectively. The category for operating costs and other services will be 100 percent financed by the Government and hence is not a disbursement category for the Project. Nonetheless, it is reflected here to demonstrate how co-financing for arrangements as they apply to fill project costs. 69 The exact front-end-fee is calculated at US$ 73,250 and for the purposes ofpresentation has been rounded to US$ 0.07m here.

82 Statements, Summary Statement of SA Expenditures for Contracts subject to Prior Review, Summary Statement of SA Expenditures not subject to Prior Review. Designated account: The initial deposit into the Designated account will be made upon submission of an FMR with a detailed forecast. Since the PCU has extensive experience with financial management of Bank projects and the preparation of FMRs, disbursements will be made based on FMRs to be submitted to the Bank quarterly, along with a withdrawal application. Risk Analysis The following matrix details the financial management risk assessment for the project.

H S M N I Comments

H - High S - Substantial M - Moderate N - Negligible or Low

Country risks A joint CFMCPAR was undertaken recently for Jamaica. Although the report is not final yet, it constitutes a solid basis to assess the overall performance of Jamaica public financial management (PFM). Overall, the legal and institutional framework in Jamaica and its established institutions and procedures, including external oversight provide for a solid foundation for PFM. Government accounts are regularly produced and audited. The report of the Auditor General is public. Parliament oversight is very active. The Government of Jamaica has also undertaken several initiatives during the past few years aimed at modernizing its public financial management systems. In spite of these efforts, the CFMCPAR identified some issues that continue to affect overall PFM performance. The main ones are as follows: Slow implementation of the underlying accountability and business processes to accompany the evolution of the legal and institutional framework for PFM, creating a risk ofweakened control over the Executive Agencies.

0 Major weaknesses in the implementation of the new business processes (information system, accrual accounting, and audit committees) undermining timeliness and quality of financial reporting.

83 0 Weak link between government priorities, planning and budget, and the lack of timely information reflecting actual budget appropriations. This contributes substantially to inefficiency in public spending and weaknesses in budget monitoring that would otherwise facilitate better fiscal control and parliamentary oversight.

0 Effectiveness of internal audit function is still being affected by the methodologies and tools used, shortages in budget and staff, and staff resistance to changes in focus and procedures.

0 Parliament's overall effectiveness as an oversight body is still limited by the lack of reliable enforcement mechanisms to follow up Public Accounts Committee findings. On the basis ofthe CFAA findings, the country fiduciary risk is rated moderate. But because the project will not be implemented through the central government system, the risk of the CFAA findings in terms ofimpact on the project is considered low. Project risk The greatest risks are posed by CBO-executed subprojects and the microfinance activities with FIs due to the capacity ofthe community groups in the inner cities, the risk ofleadership capture, the lack of previous experience in Jamaica in general and for JSIF in particular in the performance-based mechanisms. These inherent risks are mitigated in part by the arrangements that have been put in place in JSIF in recent years and the implementation of the performance- based mechanisms as defined in the microfinance manual. Summary of Strengths and Weaknesses of FM Arrangements Primary strengths and weaknesses of the financial management system, including actions required to address weaknesses. Key strengths ofthe project's FM arrangements are:

0 The entity's experience with prior Bank-financed projects

0 Sufficiently staffed financial function

0 Effective external oversight with a functioning Finance and Audit Committee and an adequate external audit arrangement and a record of understandable, informative audit reports and management letters

0 Functioning accounting system The key improvement required is to:

0 Revise the segment coding of ACCPAC so that it is primarily based on projects and secondly on the source of funding. This will facilitate preparation of project financial reports without having to reprocess the data, which is time consuming and a source of error and does not allow ready availability offinancial reports.

84 Action Plan The following financial management system has been agreed upon between the Bank and GoJ: Action Operations Manual Administrative Manager Revise the financial management chapter of the operations manual to document the budgeting processes (panning and monitoring), and the controls executed by JSIF ACCPAC Finance and March 3 1, 2006 Administrative Manager Revise the chart of accounts based primarily on the projects being funded and secondly on the source of hnding. Financial Monitoring Reports Finance and Negotiation Administrative Manager Finalize the format of the FMR for the ICBSP, including the additional statements required for disbursement purposes

85 Annex 11: Procurement Arrangements JAMAICA: Inner City Basic Services for the Poor Project

A. General Procurement for the proposed project would be carried out in accordance with the World Bank’s ‘Guidelines: Procurement Under IBRD Loans and IDA Credits’ dated May 2004; and ‘Guidelines: Selection and Employment of Consultants by World Bank Borrowers’ dated May 2004, and 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 Loan the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and timeframe are agreed between the Borrower 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.

Procurement of Works: Works procured under this project will consist of several civil works contracts. Packages for integrated network infrastructure are estimated at approximately US$ 1 million on average, which would include access to potable water, sanitation, solid waste collection systems and roads. It is expected that a couple of packages will be under US$2 million, but given volatile area conditions, it is not envisioned that these will attract foreign contractors. The infrastructure program also consists of building community centers for the sites identified. Contracts above US$1.5 million will be procured following International Competitive Bidding (ICB). Contracts below US$1.5 million, and above US$150,000 will be procured under National Competitive Bidding (NCB) procedures. Small Works contracts below US$150,000 equivalent will be procured on the basis of comparing at least three quotations received from qualified contractors in response to a written invitation, which will include a detailed scope of work, specifications and relevant drawings as well as a form of agreement acceptable to the Bank. The procurement will be done using the Bank’s Standard Bidding Documents (SBD) for all ICB and National SBD agreed with the Bank.

Procurement of Goods: Goods procured under this project would include compactor trucks for waste consolidation and disposal, vehicles, office furniture and equipment, computer hardware and software, fencing and security systems, as well as goods required for the neighborhood improvement program. Goods contracts will be grouped into bidding packages of more than US$150,000 equivalent and procured following ICB procedures; contracts below US$150,000 but above US$50,000 will follow NCB procedures and contracts below US$50,000 will be procured under shopping procedures. The procurement will be done using the Bank’s SBD for all ICB and National SBD agreed with or satisfactory to the Bank.

Community Participation: The implementation of minor or simple infrastructure neighborhood improvements, small works required for installation of waste bins, as well as the purchase of goods such as fencing or miscellaneous security equipment, will be contracted by local communities, in accordance with guidelines set out in the Operational Manual and taking into account the lessons learned under Community Contracting under the NCDP project. Direct contracting may be followed for small works, goods or services in high risk areas and where few contractors or suppliers can be identified, with prior Bank review.

86 Procurement of Non-Consulting Services: will consist of cadastre land surveys and other site preparation activities which will be contracted following shopping or NCB procedures.

Force Account: The administration ofthe electrification program, estimated to cost less than US$200,000, will be by the direct labor of the Rural Electrification Program, following section 3.8 ofthe Guidelines, given the difficulty in identifying contractors for such areas and the efficiency gained if the works are done directly through its own departmental forces.

Selection of Consultants: Consultants’ services consists oftechnical assistance services for public safety enhancement; assessment of available financial services to the poor as well as providing those services; squatter management policy; mediation and conflict resolution; alternative livelihoods and skills development; family support services; youth education; capacity building; IS0 14000 accreditation as well as engineering and design services as required as well as the technical assistance needed for ICBSP project management. Shortlists of consultants for services estimated to cost less than $200,000 equivalent per contract may be composed entirely ofnational consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Individual consultant services will be required for community liaison officer positions as well as project management staff required to administer the different components ofthe project.

Financial Institutions that will provide access to credit in the project areas will be competitively selected following the least-cost selection (LCS) method, in accordance with paragraph 3.6 ofthe Consultant Guidelines. It is envisioned that several contracts, totaling an estimated US$1.2 million will be allocated for the execution ofthese services.

Training: Skills training will be made available to selected communities and parish councils. Specific programs for each community are listed in the Neighborhood Basic Infrastructure and Public Safety Plans included in the project files. The loan will finance eligible expenditures for study tours, workshops and seminars as described in the annual training programs submitted by JSIF for the Bank’s review.

Operating Costs consisting of services for CBO training, office space, utilities, and supplies as well as support staff and operation and maintenance of the community centers once built will be financed by the Government ofJamaica.

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

Procurement activities will be carried out under the responsibility and oversight of JSIF and CBOs that meet the criteria in selected communities. A first assessment of JSIF’s capacity was completed in 2002, for the National Community Development Project. An update ofthe capacity of the Jamaica Social Investment Fund was carried out in January 2006, by the Caribbean Procurement Coordinator and the risk was determined as ‘average.’

The assessment reviewed the organizational structure of JSIF, and particularly the procurement staffing and routing and approval of procurement actions. JSIF is composed of four management divisions: Human Resources, Finance & Administration, Information Systems and Operations Management. The procurement function falls under the managerial responsibility of the Finance & Administration Manager, who reports to the Managing Director of JSIF. The existing procurement staff, comprised of one ProcurementlLegal Officer and two Contracting Officers, work with several international funding agencies, including the World Bank and the IADB. The project will finance two additional

87 procurement officers specifically for the ICBSP procurement activities strengthening the experience gained by the NCDP team.

All procurement is done in keeping with the Government of Jamaica (GoJ) Handbook of Public Sector Procurement Procedures and any additional specific provisions as agreed with external funding agencies.

Transparency in the process and confidentiality are emphasized. No conflicts with Bank guidelines are noted. However, it is important to note that GoJ requires that local firms demonstrate tax compliance in order to participate in any bidding opportunities involving government procurement.

The key issues and risks concerning procurement for implementation of the project relate mostly to the capacity ofCommunity-Based Organizations (CBO). There is a limited number ofcommunities that have existing CBOs with the capacity to carry out procurement activities, and the time invested to train CBO members has been a factor that has slowed implementation under NCDP. JSIF Procurement staff experience has been dealing primarily with civil works under shopping or National Competitive Bidding and the value of the contracts is not large. For the ICBSP, although contracts have been packaged and identified in the Procurement Plan, they will generate the need for hiring the required staff (procurement, financial, engineering and administrative) for proper management of the project. Coordination between the procurement officers and other departments of JSIF is essential for the successful implementation ofthe project.

It is recommended that ICBSP procurement officers receive additional training to handle the different procurement activities under the project. JSIF now has electronic access to the latest WB bidding documents available, to update its library. A project launch seminar, with a session on the changes in the Guidelines and procurement methods used under the project, is scheduled for May 2006. The Operations Manual includes an updated section reflecting all procurement procedures under this project.

C. Procurement Plan

The Borrower, at appraisal, developed a procurement plan for’ project implementation which provides the basis for the procurement methods. This plan was agreed between the Borrower and the Project Team on February 28, 2006 and is available at JSIF headquarters. It will also be available in the project’s database and on 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.

D. Frequency of Procurement Supervision

In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment ofthe Implementing Agency has recommended one supervision mission every 12 months to carry out post review ofprocurement actions and hands-on training.

88 E. Details of the Procurement Arrangements Involving International Competition

1. Goods, Works, and Non Consulting Services

(a) List ofcontract packages to be procured following ICB and direct contracting:

Ref. Contract Est. Proc. P-Q Domestic Review Expected Comments No. Cost Method Preference by Bank Bid- (yedno) (Prior / Opening Post) Date CW Whitfield $1.7m ICB nla no Prior Jan 08 National firms will participate CW Central $1.8m ICB nla no Prior June 09 National Village firms will participate CW Africa $1.5m ICB da no Prior Feb. 07 National firms will participate GDS Compactor $0.29m ICB nla no Prior July 06 National Trucks firms will participate

2. Consulting Services

(a) List ofconsulting assignments with shortlist of international firms.

Ref. No. Description Estimated Selection Review Expected Comments of cost Method by Bank Proposals Assignment (Prior / Submission

cs- Impact US$300,000 National 3.0.IMPAC.EVAL Evaluation and international firms eligible cs- IS0 14000 US$150,000 National 3.0.ISO. 14000 and international firms eligible

All prior review packages are identified in the Procurement Plan agreed during appraisal and negotiations.

89 Thresholds for Procurement Methods and Prior Review

Expenditure Contract Value Procurement Contracts Subject to Category (Threshold) Method Prior Review US $ thousands

~ 1. Works >1,500 ICB All 150- 1,500 NCB First 2 contracts 450 Shopping First contract 12. Goods I >150 I ICB 1 Refer to Proc. Plan I ~ 50-150 NCB First contract <5 0 Shopping None Regardless ofvalue Direct Contracting All 3. Consulting Services -3.A Firms >loo QCBS,QBS,FBS,LCS,C Refer to Proc. Plan QS

90 Annex 12: Economic and Financial Analysis JAMAICA: Inner City Basic Services for the Poor Project 1. Introduction The purpose of the project is to improve access in targeted poor inner-city communities to basic services, including reliable potable water, sanitation, solid waste collection, road infrastructure and related community-based services. Additional objectives are to strengthen community capacity to develop, manage and maintain basic infrastructure and to facilitate a reduction in the incidence of crime and violence in targeted inner city communities. This is aimed to be through providing the most socially, economically and technically appropriate basic infrastructure services, This report will focus on the economic aspects ofthe program.

A diagnostic study and needs assessment was carried out by external consultants to JSIF that included discussions with Community Leaders and members of Community Based Organizations (CBOs) to draw out their opinions on the major problems suffered by their community in the sectors under study and their needs and aspirations for improvements to be made. Additionally, a preliminary house to house survey targeted all households within each of the 12 communities to elicit residents’ opinions, experiences, aspirations for basic infrastructure improvement, reducing levels of crime and violence and community capacity building. Qualitative observations gained by multiple site visits and walkthroughs in each community also provided first hand information on the situation prevailing within each community with regard to social conditions and physical infrastructure.

These actions provided the basis for the selection of 12 communities and the designs of infrastructure works. Information is weak for operating and maintenance costs of any infrastructure component and there is no information of any kind for electricity. Based on results of preliminary economic analysis, the project design reduced required community contribution from 20 percent to a range of 5 to 10 percent.

Cost benefit analysis was carried out individually for all communities receiving potable water and sanitation investments. To determine the benefits, a contingency valuation approach was taken in which a survey that asked potential beneficiaries about their willingness to pay for improved water supply and sanitation was completed. A number of the infrastructure components for this program do not lend themselves well to cost-benefit analysis because of the cost of carrying out such analyses for small projects of this nature and for example, the inherent difficulty in estimating the benefits from community centers. Measures were taken by the consulting firm to ensure that least-cost alternatives were selected.

2. Economic Analysis by Subsector

Potable Water and Sanitation (Sewerage)

Benefits and Willingness to Pay (WTP) A survey was conducted to ask potential beneficiaries their WTP for an improved water supply. The method used in this contingency valuation (CV) approach was the referendum or discrete choice model that has become the presumptive approach for modeling the outcomes of contingent valuation surveys. This CV approach should be more reliable than using a demand curve or consumer surplus approach as it is more comprehensive in taking in factors relating to program benefits.

91 In order to estimate the WTP, the survey asked interviewees who were not receiving piped water:

IF YOU COULD HAVE A SYSTEM THAT WOULD PROVIDE PIPED WATER TO YOUR HOME INDIVIDUALLY AND WITH ADEQUATE PRESSURE, WOULD YOU BE WILLING TO PAY? J$ PER MONTH.70

If the respondent answered “no,” the interviewer was instructed to go to a second lower predetermined value. If the interviewee again answered “no,” then the interviewer records that (s)he would prefer to continue to use the current system. If “yes” is answered to either of the predetermined values, that value is recorded and the interviewer goes to the next question. There were four different versions ofthe questionnaire that had a relatively high value two intermediate values and a low set. The range was from J$200 to J$2,00071 for both the potable water and sanitation question.’*

From the data thus collected, estimates may be made of the mean WTP for the service. Various methods exist for determining this value-notably the econometric or probit method and three non-parametric appro ache^.^^ The method used here is the intermediate non-parametric Kristom measure.

The table below shows the raw values obtained and their standard errors. For water, in the cases of the communities of Dempshire PedJones Pen (Shelter Rock), Passmore TodBrowns Town (Dunkirk) and Central Village, the values obtained were questionable. In Central Village field work was suspended for three days due to internal gang feuding, in Shelter Rock field work was suspended for two days due to a turf feud within the area and the start date for field work in Dunkirk was interrupted due to excessive violence.74 In the application of the WTP values for water for these communities, the overall community-weighted average was applied. The actual values were used for all the communities that receive investments in sanitation. These WTP values were used as the per family benefit measure for both water and sanitation. The values should be corrected to take into consideration distortion in the economy, but they were not because ofproblems in getting timely data and the fact that it was believed that the impact would not be significant.

70 A similarly phrased question was asked for the sanitation WTP. 71 Exchange rate: US$1.OO = J$61. 72 In Jamaica the charges for sanitation and water are identical. 73 As described by Vaughan, et.al, “Investing in Water Quality” , p. 295: “there are three nonparametric estimators of the mean: (a) a lower bound measure that understates mean ‘WTP (the Turnbull mean; see Haab and McConnell, 1997a), (b) an intermediate measure (Kristom’s mean; see Kristom, 1990, and Boman et al., 1999), and (c) an upper bound measure that overstates mean WTP (the Paasche mean; see Boman et al., 1999). The logic behind all three nonparametric estimators is the same. The proportion of “no” answers at each bid level b, provides a discrete stepwise approximation to the cumulative distribution function. 74 Baseline Survey report, p. 10 and Appendix A of same, p. 6.

92 Potable Water Sanitation Community WTP (US$) I Standard Error WTP (US%) '1 Standard Error DemDshire Pen/Jones Pen (Shelter Rock) $8.51 I Knollis I $7.03 I 8.93 I N.A. 1 N.A. I

costs Investment costs were estimated by the consulting firm, HTSPE in accordance with least-cost practices and accepted practices in Jamaica.77 . Investment costs are in international prices and taxes and other transfers are not included. Following the HTSPE norm, a 15% physical contingency was included.

Considerable difficulty was encountered in obtaining maintenance and operating costs. To date satisfactory information has not been provided. In the case of water, estimates were obtained based on the tariff rates. In the case of sewerage, the operations and maintenance cost were taken to be the direct sewerage charges applied by NWC. The values for these per family or per connection per month are US$10.39 and US$6.62 respectively for water and sewerage.78

Summary of Economic Results The results below show considerable variability. From the benefit side (WTP), there was a remarkable consistency except in the communities where it was not possible to reliably conduct the surveys. There was considerable variation on the cost side, however, which is why we observe markedly different results. Clearly from an economic standpoint, given the high costs, Tawes Pen stands out as the least attractive investment, principally due to the high investment cost in sanitation.

~~ Average weighted as function ofcommunity population across communities with investment in sector. 76 Average includes communities that receive investments. 77 HTSPE, Overview and Summary Final, table 5.2, p. 60. '*Specifically these are the charges for the less than 14m3 category. For water the service charge was included.

93 Table 2 '' I Values in US$

Infrastructure1 Tawes Pen Bucknorl Federal Africa Total $Fk I I I ttg I Dunkirk 1 1 1 I 1 Water $30,524 $95,721 $87,856 $217,676 $95,721 0 $122,519 $92,241 $76,161 $943,373 Invest. Cost IRR(%) 50.0% 8.7% 7.6% 1.7% 42.5% NA -1.5% 70.8% 19.4% N.A. NPV $65,745 414,266 417,672 495,421 $374,132 NA -$67,508 $320,442 $28,222 $593,675 @, 12% (US$) Sanitation $0 $1,253,885 $0 $0 $6,452 $279,700 $0 $146,852 $0 $1,686,890 Invest. Cost

@, 12%NPV (US$ 1 N.A. 1-$1,295,1261 N.A. 1 N.A. 1$977,0141-$126,2861 N.A. 1$649,0301 N.A. 1 $204,632 I

Two factors should be borne in mind when interpreting the results:

1. On the cost side there is considerable uncertainty with regard to the real costs of operation. This has to do with the costs of delivery of water per cubic meter, including delivery and treatment and the costs oftreatment and disposal ofthe sewerage; and 2. The surveys were conducted in an environment in which it is not common to pay for services. This would probably tend to bias the answers to the WTP questions down, although reasonable consistency was observed across communities.

Water and Sanitation Overview and Risk Analysis Although it is not meaningful in guiding investment decisions at the community level, it may be illustrative to look at the overall results for all the communities." The costs and benefits were aggregated across all communities in which investments occurred. For both the water and sanitation projects, the overall mean NFV @ 12% is positive or close to positive.

In this analysis a risk analysis was carried out using Crystal Ball. The table below summarizes the results:

Mean IF2R Mean NPV @ 12% Discount Rate Potable Water 12.7% $4,382 Sanitation 11% -$69,272

Loolung at the program as a whole it can be observed that both programs have reasonable economic returns. The probability that the IRR lies below 12% is about 50% for both programs. Normal distributions were assumed for the investment costs and triangular for the WTP and costs of operation. For water the costs of operation were skewed lower as the costs appeared high to this analyst and there was considerable uncertainty with regard to the actual value.

'' See the table in Appendix 2 for more detail and a summary of the costs. Since the projects are independent, the technically correct approach is that taken in 2.1.1 and 2.1.2 where they are analyzed independently.

94 Table 4

monthly household costs parameters: U""^ I Minimum 335.uu-- Likeliest US$10.39 I Maximum US$l1.43

/f4065821 @16l,4811 $43.811 12667l2 $483,614 87% 15 5% 21 3% 27 0% $US %

The above charts show the frequency distribution of the outcomes from the Monte Carlo simulations. For example, of the 1,000 trials, there were about 4 outcomes at 3.9% IRR and roughly 26 at 10%. In the case of sewerage the operating costs were skewed higher again because of a lack of reliable information and the possible complications in treatment and disposal.

Likeliest USs6.62 I Maximum I US$10.00 I

Fwssp: Smitdbn NW@lZ% FM~:SmiMbn RR

1,OMTrlds FleqMCYrn WDWWfJ 27

20 25

135 CI2 CD 678 9

0

(11.Cd2.891) (6573.928) (6104,964) 1314002 1832.967 I% 4% 11% 17% 23% US$ %

Of the outcomes for sewerage, 75 percent showed the NPV to above minus US$305,600 and the IRR to be above 8 percent.

Other Infrastructure Works Other infrastructure works that will be discussed in the section are Solid Waste, Community Centers, Street Lighting, Drainage, and Roads. As mentioned, it is not cost-effective or practical to carry out individual cost benefit analyses for these types of projects. Methods do exist and analyses are often carried out, but for these relatively small works, it is more important to ensure

95 that least-cost approaches are being applied. When practical, a common approach for the above types of works is to estimate the WTP of the beneficiaries. This was considered but it would not have been effective to include a question for each of these items on a questionnaire as the interviewee would quickly lose interest and render the survey useless.

Least-Cost Alternatives The engineering and the determining of the least-cost alternatives were carried out by the consulting firm, HTSPE, and are described in detail in their final report.’l The following is excerpted from that report:

Selection of Infrastructure Designs This design section, in conjunction with the design summary, illustrates the technical, social and practical parameters used for the design of the infrastructure components of the ICBSP; which are: water supply, sanitation (and sewerage), roads, drainage, street lighting, electricity and some building construction.

The designs have been based upon the premise of reducing the complexity of operation and maintenance, increasing the sustainability of assets, ensuring transparency in the design decision making and using, wherever possible, Jamaican standards updated to best global practice. This was then standardized across the communities based upon ensuring:

0 An equitable level of service for all the residents in a given community; 0 A comparable level of service among all 15 communities; 0 Different levels of service (minimum, acceptable and ideal) for each type of infrastructure with its respective technical requirements; and 0 Linkages between the various types of infrastructure proposed for each community so as to ensure the proposed infrastructure’s sustainability.

Site visits were carried out in every street, road and lane of all the communities. Linkages between the technical requirements for a given proposed infrastructure intervention and the proposed level ofservice were established for each community and presented.

These levels of service, defined in terms ofminimum, acceptable and ideal, can be quantified by the technical parameters between Jamaican standards and specifications and accepted best practice. Other factors, such as environmental impacts during construction and operation, along with the future operational and maintenance burden and relative financial merits were also taken into account in the design.

The limitations ofproposed infrastructure are based upon the responsible agency’s ownership and operation and maintenance requirements. The Consultants received these requirements from each applicable agency, authority or council between the months of August and November 2005. During this time alternative arrangements to their current operation and maintenance (O&M) were also investigated. These are summarized in the table in Appendix 1 of this Annex.

Examining these Works from a Different Perspective Although an economic analysis was not performed for these infrastructure projects, one can get a sense of the reasonableness of the works in an economic context, by carrying out a “reverse”

81 Overview and Summary of the final document, p.8.

96 economic analysis, estimating what the WTP would have to be to pay back the original investment at a 12% discount rate.”

The results below demonstrate the relatively high cost of roads, but also of drainage and the community centers in comparison with water and street lighting.

Annual WTPlFamily for Economic Feasibility (All Communities)

$70 $60 $50

v) $40 3 - $30 $20 $10 $0 Water Sanitation Roads Drainage Street Lighting Comm. Centre Solid Waste Investment Iniestment Investment Invsstment Investment Investment Investment costs costs costs costs costs costs costs Sector

While the above is a theoretical exercise that raises questions about the costs of some of the works, it may be more to the point to calculate the 10 percent cash or in-kind contribution that a family will have to contribute prior to initiation or execution of the works. There is a risk that these contributions may not be realizable for Bog Walk and Tawes Pen. (See Chart 2 below and Appendix 2) Again, one must also take into consideration that the communities are not accustomed to paying for their infrastructure and services. Including water and sanitation charges for services, a family will be paying a total of the order ofover $600 the first year.83

Operation and maintenance costs were not available for these components. The calculation will therefore underestimate the WTP for economic feasibility ofthe works involved. 83 While it is true that the consultants discussed the requirement for payments with the communities, it is not clear that the amount was ever discussed. The Baseline Survey report prepared by HTSPE, p.56, shows household incomes to average of J$ 26,000, equivalent to US$400 per month. This US$4,800 per annum may be compared with Jamaica’s Gross National Income per capita of $2,900 in 2004.

97 First year 10% Total Contribution per Family (all projects) S600

S400 v, 3 H s200

$0

Community

3. Conclusions Economic concerns raised during earlier economic analysis have been addressed in the project design. Although the information, especially with regard to operating costs remains weak, this is not atypical in these types of programs.

Potable Water: While some of the water projects appear marginal-especially Central Village and Dempshire PedJones Pen (Shelter Rock), to some extent this may be a result of the lack of reliable information on the costs ofdelivery and treatment ofthe water. A 10% reduction ofthese costs for Bucknor and Tawes Pen raises the IRR to above 12% and raises the sub-marginal Central Village (1-7%) to almost 11%. A similar argument might be made for the WTP estimates, although the results ofthese estimates appear to be reasonably solid.

Sanitation: Two ofthe four projects have reasonable returns, but Tawes Pen has an extremely low return. It is important to note, however, that sanitation investments in Tawes Pen include the rehabilitation of a waste water treatment facility that will have a broad economic impact in neighboring project areas. When factored in, the analysis finds that investments in Tawes Pen are economically viable.

Roads: The investment in roads is by far the greatest cost in the project. It is more than double the cost ofany other component and represents over a third ofthe program infrastructure costs. It was not clear from a reading ofthe engineering reports what the unit costs for these residential roads are, but the document does say the asphalt concrete material has been selected as opposed to a double surface treatment that is often used in such situations.

98 a 2 a

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F Annex 13: Public Safety Diagnosis and Component Strategy JAMAICA: Inner City Basic Services for the Poor Project

Crime and Violence in Jamaica: An Overview

Jamaica has among the highest rates of violent crimes and drug offenses in the world. In 2000, according to a United Nations survey85, Jamaica had the fourth highest murder rate out of 67 countries, and placed fourth out of48 for major assaults and seventh out of 70 for rapess6. In that year, for every 100,000 people, the country recorded 33.7 murders, 214.6 major assaults and 49.5 rapes. For drug offenses, Jamaica placed fifth out of 65, with 451.8 per 100,000. The island compared more favorably for total recorded thefts (49th out of 65) and burglaries (41” out of 54), with respective rates of 187.5 and 92.1. Figure 1: Total number of reported murders

1800 1600 1400 1200 1000 800 600 400 200 0 I 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Violent crime has been increasing sharply over the last 15 years, and intentional homicides are currently at record levels. (See Figure 1). In 2005, there were 1,650 murders - or 60.4 per 100,000. By early November 2005, 77 per cent of the year’s killings had involved guns, 15 per cent knives and 3 percent machetes. The great majority of those killed - 88 percent - were men. And most of these crimes were committed by young men. In 2004, the most recent period for which data is available, 97 percent ofknown perpetrators were men, and 72 percent of those were between 16 and 30 years old”.

Not only is violent crime on the rise in absolute terms, but crime is apparently becoming more violent. Crime statistics over time indicate that less-violent crimes, such as robbery, have actually been decreasing (See Table 1).88Indeed, statistics published by the Statistical Institute of

*’The Seventh United Nations Survey on Crime Trends and Operations for Criminal Justice Systems, by the Office on Drugs and Crime, Division for Policy Analysis and Public Affairs g6 These figures must be treated with some caution as they omit many, especially poorer, countries for which data was not provided or was not available. In addition, the data represents only reported crimes, and may significantly under-represent the true total, especially for less serious crimes. 87 Source: Economic and Social Survey of Jamaica, 2000,2001,2002 and 2004. Planning Institute of Jamaica. Haniott 2000, P. 12; Haniott in Barrow and Reddock 2001, Pp. 516-8; Haniott in Haniott et al. 2004, P. 242. This last source has data for 1998 but not for 1997.

102 Jamaica (STATIN) indicate that total number of crimes reported in Jamaica has been declining, from a peak of56,888 in 1996 to 35,837 in 2003.

Table 1: Jamaica’s rates of murder, shooting and robbery per 100,000 people, 1990-2004

Source: For 1990-98fiom Harriott 2000, P. 12, and 2004, P. 242 with data on general election years added; for 1999- 2004 own calculationsfrom major crime statistics furnished by Ministry of National Security (the same source as Harriott S for earlier years).

Among the parishes, Kingston and St. Andrew-which include most ICBSP communities-have the highest levels ofserious crimes. (See Table 2 below). In 2004, these two combined accounted for the highest number of reported rapes and carnal abuse (481 or 38 percent), murder (651 or 44.3 percent), shooting (819 or 48.9 percent) and robbery (736 or 35 percent). In 2004, St. Catherine had 140 rapehama1 abuse cases (1 1 percent of the total), 376 murders (25.6 percent of the total), 366 shooting incidents (21.9 percent) and 394 robberies (18.7 percent). In 2004, Clarendon had 122 rapehama1 abuse cases (9.6 percent of the total), 93 murders (6.3 percent of the total), 127 shooting incidents (7.6 percent) and 232 robberies (1 1 percent). St. James, in 2004 had 146 rapehama1 abuse cases (11.5 percent of the total), 132 murders (9 percent of the total), 155 shooting incidences (9.4 percent) and 235 robberies (1 1.1 percent).

103 Table 2: Major Crimes in 2004 by Parish

Source: Economic and Social Survey of Jamaica, 2000, 2001, 2002 and 2004. Planning Institute of Jamaica.

From Garrison Politics to Area Dons: the changing face of inner-city crime Violent crime in Jamaica is concentrated in the inner cities, and recent crime patterns largely reflect developments in those areas, especially concerning gangs and extra-legal power structures. Between 1998 and 2000, according to police reports, drug and gang related murders accounted for 22 percent of the total murders nationwide. However, domestic violence still represented a greater share, at about 30 percent.

Inner-city violence has apparently become less politically motivated. ‘Garrison politics’, through which inner-city neighborhoods became segregated along political lines”, had begun in the 1940s and was widespread three decades later. To influence the vote in a community, suspected opposition supporters were often intimidated and driven away, while government housing was awarded mostly to supporters of the party in power. Powerful local figures or ‘dons’ played a central role, usually acting as agents of the political parties, maintaining political control on behalf of the party and distributing the favors which were part of the pork barrel politics.g0 However, structural adjustment from 1977 onwards, the JLP victory in 1980 brought a sharp reduction in public spending, and in governing party largesse for supporters in garrison communities. As a source ofmoney and power for the dons, party politics has become much less important.

The moderating of garrison politics is evident from the relative normality of crime rates in recent election years. (Table 1) This contrasts with 1974-1980, the period of the greatest violence between supporters ofthe two parties, particularly around the elections of 1976, won by the PNP, and 1980, won by the JLP. In the run-up to the 1980 election there were over 800 deaths.

89 This refers to the two major parties that have alternated in government since elections under universal suffrage were established in 1944: Jamaican Labour Party (JLP) and People’s National Party (PNP). The first-past-the-post system and political tribalism leave little room for third parties. See for instance Hamott in Barrow & Reddock 2001 P. 515. 90 Charles 2002, P. 30.

104 On the other hand, the gradual increase in the murder rate in the 1990s was apparently driven by growth in the distribution and trans-shipment of drugs, which intensified existing gang rivalries. In the 1980s and 1990s the major dons - those who were in control of whole communities - turned increasingly to crime, in particular drug trafficking as well as the extortion rackets which had already existed. Their connections with political parties and corrupt connections with local authorities including the police enabled them to avoid prosecution and to continue to exercise control ofinner-city areas. Major dons did not live in the communities, but used them as a shelter for criminal activities and as a source for gang recruitment.

The sharp rise in killings since 1999 is attributable to the loss ofcontrol by major criminal gangs over some areas, giving rise to conflicts among smaller neighborhood gangs, under the command of ‘area dons’. Area dons are a relatively new but widespread phenomenon in Jamaica’s inner cities. Often referred to as ‘area leaders’ (because their groups are less connected with hard drugs), these typically exercise control over just a few blocks around a particular street or housing project.

The power ofthe major dons has waned largely due to greater success in drug interdiction against Jamaican gangs in the drug-consuming countries where they operate (US, UK and Canada), and in the tightening of controls preventing drug movement through Jamaica. The Jamaican authorities have had some success with Operation Kingfish, an initiative to combat drug- trafficking and dismantle major criminal networks, launched in November 2004. In December 2005, the police estimated that, of around 13 major gangs in the country, it had dismantled one, severely disrupted the activities of five more and impacted all the others in some waysg’

The violence among area gangs-the main problem for the communities today-is apparently more about feuding than financial or territorial gains. The extent to which these groups are involved in crimes for gain (other than from drugs) is not clear, and the reasons for gang membership therefore apparently have more to do with pursuing status in an environment in which conventional routes to this may be limited (Box 1). Violence is usually a reprisal for a wrong or a slight committed by the other side. A code of honor is involved, and the main targets are members of the opposing gang, although too often reprisals are made against any resident of the opposing area. And gangs sometimes kill other non-members, particularly those suspected of being informers to the police or to the other side.

9 1http://www.jis.gov.j~securitylhtm1/2005 1204T080000- 0500-75 15_JIS_OPERATION_KINGFISH_ACHIEVING_MAJOR_OBJECTIVE.asp

105 Box 1: The psychology of gang membership If the gangs are no longer really motivated by politics, and at least some of them are apparently not motivated by gain, from drug sales or extortion, then what is drawing boys into them? It seems to be a matter of pursuing status through an alternative channel, in an environment in which conventional routes to success and status may be difficult. The handling and ownership of a gun can give status in the eyes of other boys and of girls, with shooting the ‘enemy’ in the ‘war’ giving prestige, and scars from fights giving notoriety. Those boys who do well at school, and remain there, are more likely to pursue regular career paths and less likely to join gangs. However, success at school depends on many factors, including family support, teaching methods, classroom discipline, and the attention and encouragement pupils receive from teachers. Poor, inner-city children at schools with few resources are likely to be at a disadvantage. And even if inner city boys do continue in education, they may still find few opportunities open afterwards. Formal employment is very low within such areas, and the lack of economic and social advantages and the stigma of an inner city address make it more difficult to find employment elsewhere. With the perceived impossibility of getting a decent job by the route approved by wider society, a boy may well calculate that he has a better chance of making something of himself through gang membership. He knows there is a very strong risk to his life, but life appears to be worth little, as evident from the gang expression ‘bom fi dead’ 92 (‘Born but to die’ in Jamaican patois). This attitude goes hand in hand with the rationalization that since society is unfair in not providing decent opportunities to everyone (especially to those from the inner cities and poor urban areas) it is justified to reject the norms of that society. Wider society is perceived not just as withholding opportunities, but as acting to limit the ability of poor inner- city dwellers to fend for themselves, such as through trying to enforce stricter laws against street vending and gambling. This rationalization is reinforced by the perception that those who are successful in the socially approved wider arena have advanced through corruption. Furthermore, the gangs operate in a context in which many people believe it is acceptable to act together to overcome regulations, and not pay rent or utility bills - and in general to get what one can from the state because one is due more. Thus gangs are perceived as performing a service to the residents if they help them avoid such paymentsg3. The prevalence of this attitude varies throughout the ICBSP communities. Different opinions were expressed in focus group meetings, regarding a community’s willingness to pay for utility and other services.

While the political element is now a minor factor in violence in inner-city communities, at least between elections, many community residents do retain a strong ‘tribal’ allegiance to the party dominating the local area where they grew up. Any hostility to a gang said to represent the other political party can easily create tensions.

Crime and Public Safety in the Project Communities

The central organizational feature of most of the ICBSP communities is ‘donmanship’ - the system of power and authority exercised within communities by neighborhood dons and their lieutenants. Their power rests on the clear and present threat of lethal force, but their authority comes from the considerable support they receive from community residents. Donmanship is present in all the selected communities in Kingston and Spanish Town (though with qualification in the case ofTawes Pen). Politics continues to be a dividing factor, although to a lesser degree, and intimidation and patronage apparently continue in these Kingston and Spanish Town communities94. The other communities - Flankers in Montego Bay, Lauriston, Bucknor in May Pen, and Bog Walk - are not characterized by either donmanship or garrisoning.

In addition to targeting major gangs through Operation Kingfish (discussed above) the Government launched the Community Security Initiative (CSI) in September 2005, with DFID funding. The CSI aims to establish partnerships between local people and the police in areas

92 Stewart 2002 among other sources. 93 Early waming system exist against prosecution for using illegal utility connections; they involve all residents, including children, in some cases with observation posts with cell phones or, in extremis, gangs firing at patrol cars [Haniott, Police.. ., 1081 94 Altogether, some 10 or 11 constituencies are garrisoned, as demonstrated by highly homogenous voting within wards. Figueroa and Sives in Harriott, ed., 2003, Pp. 63-9. The Project communities in Kingston are all PNP garrison areas, while those in Spanish Town tend to be JLP.

106 where gang violence is a problem, to consolidate and preserve community development, while strengthening the role of legal governance structures. The design of this program is not yet complete, but a number of communities in Kingston have been identified for possible implementation. These include Matthews Lane, August Town, Mudd Town in Papine, and Dunkirk in Eastern Kingston. The St. Catherine communities ofMarch Pen, Tawes Pen, Ellerslie Pen and Homestead have also been selected. The ICBSP fits into this policy as an element of better delivery of state services.

In the ICBSP communities, a series ofcrime and violence diagnostics (see Annex 14: Community Consultations) were undertaken to discover the common patterns of crimes and contributing social factors, as well as identifying perceptions and concerns related to public security in specific communities. An example is attached as an appendix to this annex. The general discussion below is informed by the findings ofthese diagnostics.

The crime problem in the ICBSP communities is overwhelmingly one of serious, violent crime: particularly gun-related violence between feuding gangs. The proliferation of guns has emerged through discussions as a prime concern in ICBSP communities. Rape is also a serious problem. On the other hand, petty crime tends to be suppressed within the communities by area gangs, some ofwhom may extort payments in return. Indeed, Harriott relates the nation-wide reduction in robbery and petty crime to an expansion in extortion rackets in Kingston, particularly during 1996-199gg5.There is a general disregard for laws against acts regarded as victimless, such as smoking ganja or gambling. The use ofhard drugs within communities has been diminishing in the last decade, according to national experts on gangs and crime.

Geographically, the ‘no man’s land’ plots of unoccupied land between communities are considered to be among the most dangerous areas. In the period of greatest political violence, between 1974 and 1980, entire swathes of houses in inner-city areas of Kingston were directly destroyed in the fighting or were razed to the ground for being too dangerous, because they were on the frontline between opposing strongholds. This applied to major parts of Jones Town and Federal Gardens, and Trench Town among the ICBSP communities. These areas, now covered with undergrowth and remnants of buildings, are still regarded as dangerous, which is why squatters do not build on them. The shift in the nature of inner and inter community violence away from old political enemy communities to local wars within the same broad community has not shifted the use ofthese patches of land. They still serve as a hiding place for gang members (in particular gunmen) and the frontline for conflict.

Crossing gang boundaries even within a community is generally avoided as men might be thought to be ‘invading’ and women might be suspected of being informers. This means that the small local areas are to a greater extent the arena for a person’s life than is generally the case in urban communities. Added to this is unemployment, which means that people do not go outside the community to work, or for entertainment either since they have little money. Most people have lived in the same area all their lives if young, or for more than 20 years if olderg6. In this sense communities are very close-knit and people tend to know one another well. This implies that there is a complex history of interactions between people, rather than a simple contrast between criminal and law-abiding types.

During hostile periods of inter-community war the main danger for residents is from indiscriminate firing into their area (typically from the gang boundaries), drive-by shootings

95 Hamott in Hamott et al. 2004, Pp. 241,254. 96 According to preliminary analysis of the house to house survey.

107 whereby someone will drive into the community deliberately to kill indiscriminately or for a reprisal, and close-quarter murder for which a member ofan opposing gang may risk walking into the community. Also, there is the danger, already mentioned, of being killed as an informer because one goes into ‘enemy territory’ (demarcations are not always visible, with community members simply knowing where invisible boundaries are).

Aside from community members living with the fear of reprisal or indiscriminate attack, gang hostilities impact on every aspect of daily living. To guard against surprise drive-by shootings, physical barriers are frequently erected at entrances to roads, making access to communities difficult for vehicles from other gangs, as well as utility services, fire brigades, ambulances and the police. The outbreaks of shooting mean that there are periods when residents have to stay at home, forgoing the chance to earn money, go to school or visit friends or relations.

108 a, 5 e .rC C C s c ..c { 7 e c a ! i I: +i rn L e c P m Annex 14: Community Consultations JAMAICA: Inner City Basic Services for the Poor Project Background and Objectives An extensive community consultation process and focus groups have informed project identification and design. The consultation process was led by the Jamaica Social Investment Fund (JSIF) and consultants to the agency to ensure that the selection of project investments was both demand-driven and the most appropriate and least-cost among technical alternatives. The consultation process engaged over 1,000 community members through over 120 formal meetings and focus group discussions. Additional outreach has taken place though frequent informal dialogue between JSIF community liaison officers (CLOs), technical consultants and community leaders and residents. Feedback from communities was also solicited through a rapid voluntary questionnaire, to which over 34 percent ofhouseholds responded.

Four key phases of consultation took place during preparation: (i)public awareness-building, diagnosis and needs assessment; (ii)infrastructure planning focus groups; (iii)participatory public safety audits and planning; and (iv) focus group discussions on integrated neighborhood plans.97 The extensive consultation process proved critical in building trust and confidence between JSIF and communities and also within project areas, many of which are deeply fragmented according to political and gang affiliations. The dialogue process was also partially successful aiding community leaders to negotiate fragile yet important truces between rival gangs, to enable preparation to continue. Nonetheless, JSIF did encounter real limits to the extent to which communities and residents were willing to communicate openly. This was particularly the case with respect to the crime and violence situation where residents often did not feel comfortable sharing information and data on the incidence and root causes of violent crime. This annex outlines the consultation proves in greater detail and presents in summary findings from the process.

Phase 1 - Public Awareness-Building, Diagnosis and Needs Assessment A first phase of engagement in project areas involved four key activities: (i)initial orientation meetings; (ii)technical ‘walk-throughs’ with community leaders; (ii)detailed focus group meetings on community needs; and (iv) a rapid voluntary questionnaire. The primary objectives for this phase of consultation was to identify and establish contacts with local leaders, raise awareness of the ICBSP project and solicit preliminary feedback on perceived and observed community needs. The project considered a range of media to communicate information on the project before settling on the use of direct engagement with community leaders, an informational flyer and the use on a selective basis of a ‘town crier’ - a traditional means of local communication in Jamaica combining musical entertainment and the delivery of informational messages.

Focus Groups and ‘walk-throurrhs’: Over 50 orientation and focus meetings and a number of technical ‘walk-throughs’ were held over a six-week period during this phase. Through these discussions with residents and community leaders JSIF was able to develop a strong base of information on the quality of basic infrastructure and social services, the presence and capacity of community organizations and - to a degree - the magnitude and scope of crime and violence in the each project area. Minutes from all community meetings have been recorded and are included in the project file. The table below summarizes findings and needs perceptions for a sample of four project areas in Kingston and St. Andrews parish: Federal Gardens, Whitfield Town, Dunkirk and Jones Town:

97A further scientific Household Baseline Survey was conducted under the project and has also provided valuable information on levels and access to services and preferences and perceptions of residents. The survey is included in the project files.

112 Community I Current situation Perceived and observed needs FEDERALGARDENS Crime and No tensions between internal gangs, but between upper part Reduction of inter-gang violence is a felt need violence (around 5'h St.) and Rema across road from project area; (among top four priorities). lower part (around 1" and 2"d streets) now quiet. Community Reading Room and Culture Yard are within project area, Capacity-building in existing CBOs institutions other institutions in wider Trench Town, but all show low activity. Infrastructure Housing structurally unsound Water Low water pressure Youth & activity center Localized inappropriate solid waste disposal. Street lighting Localized drainage & sewerage blockages on 1'' street Housing improvements Water & sanitation facilities Proper maintenance of drainage

Crime and Nine gangs in areas of different sizes: two smallest gangs Reduction of inter-gang violence is a felt violence cover just one street each, largest covers a dozen streets. need (among top four priorities). Two or three different current disputes between gangs. AS Inter-gangviolence is ofparamount of late August 2005, police are patrolling in two places importance, the greatest need is for a between gang areas to prevent further outbreaks of fighting. lasting ceasefire and peace. Community CDC unites 24 CBOs out oftotal of c. 40. CDC is Additional capacity building for CDC institutions counterpart of EU sanitation project, and has received particularly in resource management. management training. Most active NGO: S-Comer Clinic Infrastructure Mostly formalized areas in old houses with septic tanks. Youth & activity center - Upper Adequate road & drainage system. Good solid waste Community center Whitfield collection. Adequate delivery of water to community Little space for playing fields. Provide playing field area Very low water pressure - some roads have only water Provide access to community center in during night-time. lower Whitfield Infrastructure Many informal settlement areas in narrow lanes without Remove zinc fencing, widen lanes -Lower street lighting and any road surfaces. Place street light poles. Whitfield Low water pressure and a lot of solid waste disposal in Surface roads & lanes. open lots. Provide sewerage disposal. Many vacant lots used as playing fielddmeeting place Solid waste collection process. PASSMORE TOWN/BROWNS TOWN I UNKIRK) Crime and Seven active local gangs. Tensions and violence has been Prevention of gang violence, reduction in Violence high since February 2005. A recent ceasefire broke down the proliferation of guns. three weeks later. Primary need is a ceasefire and some stability. Community No overall organization. Only McIntyre Villa has a Capacity building required from very low institutions Management Committee and a Citizens' Association. base Infrastructure Few available playng fields areas. Community and skills training center Some structural unsound houses. Better water pressure. Very irregular solid waste collection. A sewerage system Peak time low water pressure. Demolish houses that are about to collapse Localized drainage blocked on Upper Elletson Road and & address vacant lots for use as playing Victoria Avenue. field areas Ensure regular solid waste collection Local repairs for drainage system Community sanitation facilities Crime and Three main areas; current lethal dispute started between two Reduction of violence is main felt need after Violence local gangs on lastreet but has widened. As of early jobs September 2005, many police are deployed to prevent Inter-gang violence is of paramount outbreaks of fighting importance, the greatest need is a lasting ceasefire and peace.

113 Community Current situation Perceived and observed needs

Crime and Three main areas; current lethal dispute started between two Reduction of violence is main felt need after Violence local gangs on 1 street but has widened. As of early jobs September 2005, many police are deployed to prevent Inter-gang violence is of paramount outbreaks of fighting importance, the greatest need is a lasting ceasefire and peace. Community Jones Town Area Council; youth groups; also Project Hope There are two or three highly articulate institutions (NGO). social leaders. Further capacity building required, possibly through these leaders. Infrastructure Localized drainage blocked Asquith street. Community and skills training center Water leaking on some roads. Increased water pressure Solid waste deposited in gully and in open spaces. Water mains replacement and new mains in Informal playing field area in No Man’s Land. informal area More regular waste collection in inner part of community Localized pavement repair and road patching Regularize informal playing field

Rapid voluntarv questionnaire: During preparation a rapid and voluntary questionnaire was distributed in project communities to solicit feedback from residents on project priorities. Mobilizing the questionnaire also served the purpose of involving CBOs in project preparation and developing working linkages between CLOs and CBOs. The questionnaire was mobilized concurrently with the first round of focus group discussions held in project areas and enabled JSIF to verify findings from the focus group discussions. JSIF involved church and youth groups, community development committees, the Peace Management Initiative (PMI) and school teachers in the collection exercise. JISF received over 1,800 responses to the short questionnaire.

In the interest of collecting and rapidly analyzing the information, the exercise was not conducted using a scientific sampling and survey methodology. It is recognized, therefore, that there will be a bias in the results, skewed towards those residents willing to voluntarily fill out the questionnaire. Results from the exercise were not relied on for establishing baseline figures or targets for implementation. The questionnaire did, however, provide JSIF a ‘ballpark’ idea of community priorities and perceptions of the quality ofbasic services. These findings have been subsequently confirmed and cross-referenced through focus group discussions and results fi-om the Household Sample Baseline Survey. Some important findings with respect to community priorities included:

0 a large percentage ofrespondents identified employment creation as a need; 0 communities supported the need for youth recreational activities, skills training and community activity centers; 0 all communities expressed a need for crime mitigation measures; and 0 female respondents placed a greater emphasis than males on youth activities, skills training and crime mitigation measures and less emphasis on new construction and/or works

Findings from phase 1 of the consultation process were used to inform the design of the public safety audits and planning methodology and the content for the infrastructure planning focus groups.

114 Phase 2 - Infrastructure Planning Focus Groups A series of focus groups on infrastructure planning were held subsequent to the initial diagnostic and needs assessment consultations. The primary objectives for these planning meetings were to confirm the results of the initial needs assessment and - based on this confirmation - discuss with community members technical options for the improvement ofbasic services. A first set of 33 focus groups was held across the 12 participating communities. In some communities multiple meetings were held due to internal divisions within the settlement. In each focus group, communities were presented with an ordered ranking of the five most important infrastructure services as identified during the needs assessment phase. The groups discussed the ranking in detail and finalized the ranking through negotiation and consensus building. JISF noted that in most cases communities confirmed the results of the needs assessment with only minor adjustments in the order ofthe ranking ofinfrastructure investments.

The next stage was to translate the ranking of preferences into project proposals including the layout of a suggested matrix of services, including water supply, roads and footpaths, surface water drainage, sanitation services and community buildings. These were shown, for ease and clarity of understanding, on aerial photographs of the project areas, enlarged for display purposes. The information shown on these maps was augmented by details, sketches and perspectives to show, to a non-technical audience what was intended in the proposed design.

These maps and technical project proposals were shared with communities during a separate round of Technical Focus Groups. These focus groups discussed the proposed plans and the technical consultants to JSIF reflected in the final proposals modifications recommended by focus group participants. An important set ofmodifications had to do with the precise location and width ofrights ofway to avoid to the extent possible disturbance to private land and need for compensation and relocation. Community members also provided valuable guidance on appropriate and available sites for community centers. The technical focus groups enabled the JSIF consultants to prepare Draft Plans for the infrastructure sub- component ofthe project.

Phase 3 - Participatory Public Safety Audits The preliminary diagnostic and needs assessment exercise identified certain public safety concerns of residents in project neighborhoods. Many community members, however, were hesitant to provide information on crime and violence patterns early in the diagnostic process. A more detailed and intensive participatory public safety audit was conducted to better understand the nature and causes of crime and violence in ICBSP communities. Specifically, the public safety audit methodology included analysis of:

0 a typology ofprevalent crimes - major forms ofcrime and when they occur; 0 the spatial distribution ofcrime represented on community maps; 0 victim and vulnerable group characteristics; 0 offender characteristics; and 0 transport safety

The approach to conducting public safety audits was to use the community maps as a basis for dialogue and discussion. Secondary data obtained from police records and a Ministry ofHealth GIs-based database on crime and violence trends and primary data from the earlier diagnostic exercise were mapped onto maps

115 where possible.98These maps served as the basis for a series ofpublic safety focus group discussions. The discussions aimed to solicit more detailed information on crime and violence patterns and causes. A team of four participatory action researchers and JSIF CLOs were mobilized to lead the focus groups in which over 780 male and female participants were involved in three separate focus group discussions in each community. Group participants were organized according to age cohorts - youth and young adults (1 3-30 years), adults (30-60 years) and the elderly (over 60 years) - in order to focus in on specific problems and concerns. The analytical framework for the focus group discussions is presented in the table below.

Infrastructural Root Causes of Psychological Community Solutions issues Crime and Violence Impact of Crime Participation and ,Violence 1. Draw a map of 1. How do you 1. How do men, 1. What are the things 1. If you could the community define crime and women, boys and that you need for take action to showing types of violence? girls react to crime your social well solve the problems housing structures and violence? being? of crime and 2. What experiences and community violence what come to your mind 2. What effects are 2. What do you lack? facilities that are would you do? when you think about crime and violence now in place 3. Have you been crime and violence? having on men, 2. What are the personally affected 2. List and rank women, girls and community’s 3. How do men, by crime and problems with the boys in your assets? women, boys and violence? physical community? girls think and react 3. What are the infrastructure of the 4. How? to crime and 3. What do people do community’s community violence? to make themselves 5. What support resources? 3. Do any ofthe feel better about their institutions help you? 4. What, in your 4. Which acts ofcrime and injuries, pain and opinion, is the root individuals and violence discussed losses? cause of the institutions are have anything to do community’s 4. What needs to be doing things to with the physical problems? done to ensure that help or hinder the environment? people get the support community to 5. What acts of crime that they need? solve crime and and violence were violence committed against 5. What are the problems? other persons in your challenges to meeting community in the these needs? 5. What exactly past year? are they doing? 6. Indicate events 6. What needs to associated with crime be done to make and violence in people feel safe? identified locations on the map

Despite growing trust between JSIF staff and consultants and community members during preparation, the willingness ofresidents to openly report on crime trends and causes through focus groups was constrained against the backdrop of almost daily shootings and killings within ICBSP communities. Some of the factors that influenced the unwillingness ofcommunities to share information openly included:

0 concern that disclosing information which gang leaders did want to be public would put respondents in danger;

’*It is important to note that serious difficulties were encountered in the collection ofaccurate secondary information on actual incidence and location of crime and violence in ICBSP communities due to the lack of reliability of police records and other secondary sources.

116 0 unwillingness to speak ofextra-judicial killings or ‘community justice’ in that it may compromise members ofthe community who participated in illegal acts; 0 a lack oftrust regarding the use to which the crime and violence information will be put; and 0 gathering highly sensitive information on crime and violence in fiagmented inner-city communities may require a longer timeframe than what was available during project preparation to build trust and demonstrate the intention ofJSIF to remain engaged.

Nonetheless, the JSIF team was able to assemble relatively good information on crime and violence trends, community perceptions ofthe root causes violence and recommendations regarding appropriate mitigation measures. These inputs informed the preparation of public safetv plans for each area. The findings of public safety audits and the development of associated plans are discussed in greater detail in Annex 13, and presented in their entirety in the Neighborhood Basic Infrastructure and Public Safety Plans report available in the project files.

Phase 4 - Focus Group Discussions on Integrated Neighborhood Plans The integrated Neighborhood Infrastructure and Public Safety Plans were developed based on these consultations and subsequent technical work. The plans aim to integrate both the infrastructure and public safety prevention activities under a unified program of interventions for each neighborhood. A final stage of consultation is currently underway, through which these integrated plans are being presented to and vetted by community representatives prior to finalization.

117 Annex 15: IS0 14000 Certification - Environmental Management System JAMAICA: Inner City Basic Services for the Poor Project

The Jamaica Social Investment Fund (JSJF) aims to seek IS0 14000 certification as a means to strengthen overall environmental management procedures, achieve improved environmental performance and demonstrate a commitment to continuous management and process improvement. The certification process involves a series of target setting and system development processes that will need to be verified by internationally certified and independent evaluators. JSIF plans to achieve certification by December 2008. This annex describes in detail the IS0 14000 system and methodology and outlines an action plan for JSLF certification.

Background IS0 14000 is the world’s first series of internationally accepted standards for environmental management. The standards were originally established for industry and are increasingly being applied to governments and public agencies. IS0 14000 provides a management framework under which organizations or companies identify, achieve and control environmental performance standards. IS0 14000 is a voluntary series of standards that enable organizations to comply with national laws and regulations while continually supporting new ideas and opportunities for preventing pollution and reducing environmental compliance costs. In this regard the standard does not dictate specific solutions, but rather outlines a management approach for continuous problem identification, improvements in environmental practices, reporting ofresults and overall performance monitoring.

The driving philosophy behind IS0 14000 is that better management will deliver better results. The IS0 14000 series of standards is comprised of several ‘guideline’ standards and one ‘compliance’ standard, i.e. IS0 14001 Environmental Management Systems (EMS).” The EMS compliance standard helps organizations: (i)recognize the interactions that its activities, services and products have with the environment; and (ii)achieve continuous improvements in performance levels.

The Public Sector and IS014001 Obtaining IS0 14000 certification can have numerous benefits for public sector agencies. Public institutions work towards IS0 14000 certification for a range ofobjectives including: developing a model for an Environmental Management System; achieving compliance with local legislation and donor expectations; obtaining local customers and international donor recognition; demonstrating commitment to good environmental management; increasing efficiency ofresource use; 0 achieving a greater ability to adapt to changing circumstances; and 0 serving as a valuable motivational factor for management and staff.

Recent experience from local authorities and government agencies in Europe, North America and Japan highlights a clear relationship between establishing an EMS and improved service delivery. The scope of implementation of an EMS can cover direct and indirect effects arising from policies, decisions,

99 The better known IS0 9000 series of Quality Management standards, with over 100,000 registrations around the world, is used by businesses and organizations as a model for a quality management system. It is aimed at meeting clients’ requirements, as well as seeking control of the process and continuous improvement. IS0 14000 is aimed at these, and more: ‘clients’ requirements’ has expanded to include regulatory and other mandatory environmental requirements; and ‘continuous improvement’ is not only driven by customer expectations but also by priorities and objectives generated internally by the organization.

118 ordinances, services and other actions by public sector agencies. A comprehensive EMS, as adopted through IS0 14001 certification, should improve an organization’s overall environmental performance, especially over the medium and longer term.

When managing daily operations, an EMS is expected to create a structured mechanism for: Ensuring compliance with national and local environmental laws, statutes and regulations; Providing the evidence ofdue diligence when an environmental incident occurs; Reducing both corporate and employee liabilities, in particular insurance claims; Improving employee health and safety and therefore reducing lost time and insurable risk; Increasing employee morale by creating a focused direction for the organization; Spreading environmental responsibility throughout the organization, in particular to those personnel directly associated with the identified environmental impacts; Identifying potential operational improvements and efficiencies and associated financial savings; Improving the efficiency ofservice delivery by creating a cycle ofcontinuous improvement; and Creating the evidence that the clients’ environmental issues of concern are being identified and controlled in the delivery ofthe services.

The EMS also needs to be owned by the organization’s staff. Therefore the staff who will be responsible for implementation and maintenance should direct the development of the EMS and, if possible, be involved in its development. However, external, specialized assistance may be required, especially in the early stages.

IS014001 CertificationMethodology, Implementation and Maintenance IS0 14001 methodology is based on the ‘plan-do-check-act’ (PDCA) approach which also serves as the basis for more widely used IS0 9000 standards for Total Quality Management Systems. The table below outlines the methodology for implementing an IS0 14001 process:

Stage 1: Identify clear 0 Senior management should lead the effort and strongly articulate the ‘champions’ within organizational commitment to the process management and 0 Orient staff to the EMS process demonstrating how the EMS process articulate a clear will help achieve better quality and client satisfaction mission statement 0 Create opportunities for all staff to participate

Stage 2: Review 0 Carry out gap analysis to identify major limitations program and identify 0 Outline a process for addressing gaps and bringing existing potential environmental procedures and processes into the IS0 1400 1 structure impacts Stage 3: Set 0 Communicate to the clients how the organization intends to address environmental environmental issues and concerns objectives and targets 0 Measure and report on achievements 0 Develop annual and capital works programs 0 Link operations and activities to the goals ofthe mission statement.

Stage 4: Establish and 0 Develop a corporate EMS manual to guide EMS implementation (to clarify responsibilities, be reviewed and updated periodically) policies, procedures and 0 Establish implementation groups for different areas ofactivities records 0 Review and confirm arrangements for service delivery, environmental impacts and applicable legal requirements 0 Identify which mechanisms, such as standard operating procedures, technological changes, inspection and monitoring, staff training and

119 capital improvements currently exist or are being implemented for controlling the environmental impacts and maintaining regulatory compliance Restructure existing systems as needed to meet the requirements of the corporate EMS manual Develop an environmental management plan to address the objectives and targets Stage 5: Create systems Review procedures and systems developed by implementation teams for regular evaluation Prepare an action plan, as part ofthe annual budget process, for and improvement ofthe achieving the agreed objectives and targets management system Conduct training and awareness programs about the EMS requirements for all personnel Establish an internal management system audit process Implement an annual management review ofEMS effectiveness

The IS0 14000 mom-am must be led bv senior management. Management would need to send a clear message on the importance ofthe process by defining and communicating the organizations environmental policy to staff and clients and designate personnel and resources towards the task. The organization and agency will require specialized external assistance. However, external consultants should not be seen as driving the process. The organization’s environmental policy should affirm organizational commitment to continuous improvement, prevention ofpollution and compliance with existing legislation and regulations.

The review of the environmental impacts of the promam must consider all applicable environmental regulations, existing processes, documentation, work practices and effects ofcurrent operations. The focus of this review - an ongoing updating of this assessment - would be rooted in a thorough evaluation of potential environmental impacts including noise, emissions, waste reduction and energy use and then identify those impacts that can be controlled or influenced. The evaluation serves as a basis for setting goals and objectives and a strategic implementation plan would be developed based on this review outlining targets, objectives, steps and roles and responsibilities for actors within the organization. Objectives and standards are set by the organization itself - and are not based on global IS0 14001 standards.

Maintaining an IS0 14000 Environmental Management System: A clear regime for monitoring, evaluation and continuous improvement once the EMS is in place will be critical. Both environmental and management procedures should be audited regularly. Issue-specific environmental audits may be conducted externally by regulators and consultants or internally by environmental engineers or other qualified personnel. Periodic Environmental Management System audits are needed to determine if the Environmental Management System conforms to the requirements of IS0 14001, and that the program is implemented and is continuously improving. Management needs to regularly review monitoring and evaluation results and reflect these findings in corrective action, revised management and environmental practices, new policies and other related actions.

JSIF and IS014000 JSIF provides an excellent opportunity for initiating the use of structured EMS within Jamaican government agencies. Several businesses in Jamaica already have IS0 14000 certification, and the National Airport Authority has initiated the process. JSIF’s service delivery aspects fit well with an EMS. The Project intends to use an Operating Manual as the basis for EMS development. The EMS will be aligned with the use of country systems (see Annex 7) and will provide a secondary review mechanism,

120 with third party verification, which is part of the auditing process of IS0 14000 certification. JSIF has developed an Action Plan (see below) for the IS0 14000 certification process

The project will assist JSIF to define and document all operational programs: a local consulting company and a designated JSIF employee will complete this within the first year of the project (estimated consultancy contract of $75,000). A ‘fast track’ approach is proposed so that the project can reinforce the certification process, provide funds for auditing requirements, and the IS0 14000 certification process can provide independent verification ofproject requirements and integrate with the use ofcountry systems.

During project preparation the Jamaica Standards Association (managers of Jamaica’s adherence to IS0 standards, including IS0 14000), local consulting firms (including those with third party auditing capabilities), and other Jamaica agencies currently seeking or already awarded IS0 14000 certification, were consulted. JSIF is expected to be the government’s pilot agency, with more agencies expected to follow as local capacity is developed. Meetings were also held with Canadian municipalities and government agencies - Ontario Power Generation, the municipalities ofDurham, York, Ajax, Kitchener, as well as the Canadian International Development Agency and the Canadian Standards Association - including those that have IS0 9000 or IS0 14000 certification. Several municipalities expressed a willingness to partner with JSIF through development of their IS0 14000 documentation and EMS certification. The project would support this partnering through both the local services consultant contract and direct links between JSIF staff and municipal practitioners. An agreement for the municipality of Ajax, Ontario to provide assistance to JSIF in the IS0 14000 process was reached in principle during preparation.

JSIF IS014000 Certification Action Plan I 1, Identify a key staff member to manage the process and establish I Completed a management committee 2. Hire a local consulting firm to assist with documenting all JSIF Within 12 months of activities within an IS0management system framework, and Effectiveness consistent with the project operating manual 3. Partner with local governments outside Jamaica that have IS0 Within 6 months of 14000 experience Effectiveness 4. Have the operating system (EMS) audited by third party Within 21 months from Effectiveness 5, Seek IS0 14000 certification within 24 months from Effectiveness, annually thereafter

121 Annex 16: Related Donor, Government and Non-Governmental Programs Jamaica: Inner City Basic Services for the Poor Project

The Jamaica Social Investment Fund (JSIF) is a GoJ-owned autonomous company which was incorporated in 1995 and which started operations in 1996. JSIF receives most ofits funds from international donors via the GoJ and aims to eradicate poverty by empowering communities to carry out their own projects. Communities formulate projects to be submitted to JSIF for funding. JSIF uses pre-determined and publicly announced selection criteria to select which projects to fund. Base data is usually obtained by contracting out to the Social Development Commission (SDC) to obtain social data on the communities, using survey questionnaires etc.

Once funding has been agreed, the targeted beneficiaries are required to co-invest in their own project and agree to receive training on its operation, maintenance and fee collection (if applicable). JSIF often contracts SDC to carry out the required training to run in parallel with the project construction.

Community Based Contracting (CBC) procedures have been used for some infrastructure work. JSIF has a simple illustrated booklet to enable the less educated members ofthe community to understand the process, the possible contracting arrangements and the roles and responsibilities ofdifferent actors.

JSIF has implemented a total of 619 projects totaling US$ 52 million. During the financial year to 3lSt March 2004 a total of 63 sub-projects were approved with a value of approximately US $8 million and 58 projects at an approximate cost ofUS $3.4 million were completed.

For the year 2003/04 the Fund received approximately US$8.4 million from the following sources: 0 30 percent through a loan from the Caribbean Development Bank (CDB) 0 25 percent as a grant from the GoJ 0 20 percent from the EU grant funded Poverty Reduction Program (PRP) 0 12 percent through a loan from the Bank for its NCDP project 0 10 percent in the form ofcommunity contribution

JSIF has also received funding from a number of other sources in the past, including OPEC, DFID, IADB and CIDA.

JSIF projects are implemented in four main sectors: 0 Social infrastructure, including rehabilitation of schools, health clinics and community based water supply projects 0 Economic infrastructure, such as road upgrading 0 Social services, for example conflict resolution and skills training 0 Organizational strengthening for the CBOs themselves

The table below provides details of projects that JSIF has implemented in the proposed ICBSP communities.

122 Table 1: JSIF-implemented projects in ICBSP communities for 2003-04 Name of I Donor funded project I Project title 1 community Trench Town WB funded NCDP project Boys Town Basic School rehabilitation & expansion (note: not GoJ Rehabilitation of the Arnett Gardens and Communitv

Source: JSIF

123 Annex 17: Documents in Project Files JAMAICA: Inner City Basic Services for the Poor Project

The following key documents can be found in the project files:

1. Assessment of JSIF Safeguards Compliance Capacity, Environment and Resettlement - Final Report (February 2006) 2. ICBSP Community Infrastructure and Public Safety Diagnostic Report (August 2005) 3. ICBSP Neighborhood Basic Infrastructure and Public Safety Plans (December 2005) 4. JSIF Environmental Management Framework (January 2006) 5. JSIF Land Acquisition and Involuntary Resettlement Framework (January 2006) 6. ICBSP Household Baseline Survey Report (December 2005)

7. JSIF Operations Manual - Draft (January 2006) 8, ICBSP Basic Infrastructure Investments Detailed Engineering Designs and Bidding Documents - Draft (January 2006) 9. Microfinance Component Operations Manual (January 2006) 10. Microfinance Component Request for Proposal Model (January 2006)

124 Annex 18: Project Preparation and Supervision JAMAICA: Inner City Basic Services for the Poor Project

Planned Actual PCNreview 911 3/04 10/6/04 Initial PID to PIC 911 3/04 10113/04 Initial ISDS to PIC 911 3/04 10113/04 Appraisal 2/27/06 2/27/06 Negotiations 2/27/06 2/27/06 BoardRVP approval 3/30/06 Planned date of effectiveness 511 5/06 Planned date ofmid-term review 313 1/09 Planned closing date 12/31/11

Key institutions responsible for preparation ofthe project:

The Project was prepared by the Jamaica Social Investment Fund (JSIF) with the assistance of international and local consultants and the technical guidance provided by the Bank task team.

Bank staff and consultants who worked on the project included:

125 Annex 19: Statement of Loans and Credits JAMAICA: Inner City Basic Services for the Poor Project

Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD I IDA I SF 1 GEF Cancel. Undisb. Orig. 1 Frm. Rev’d I PO71589 I 2003 I JM-ReformofSecondaryEd. (ROSEII) 1 39.80 1 0.00 1 0.00 1 0.00 I 0.00 I 38.26 1 25.21 I 0.00 I PO76837 2003 JM National Community Devt. Project 15.00 0.00 0.00 0.00 0.00 10.39 0.39 0.00 PO67774 2002 JM- Social Safety Net Project 40.00 0.00 0.00 0.00 0.00 27.93 -12.07 0.00 PO74641 2002 JM 2ndAPL HIV/AIDS PREV.AND 15.00 0.00 0.00 0.00 0.00 11.83 -3.17 0.00 ’ CONTROL DOC I II Total: 1 109.80 1 0.00 1 0.00 I 0.00 1 0.00 1 88.41 I 10.36 I 0.00 I

JAMAICA STATEMENT OF IFC’s Held and Disbursed Portfolio In Millions ofUS Dollars

Committed Disbursed IFC IFC FY Approval Company Loan 1 Equity I Quasi Partic. Loan I Equity 1 Quasi Partic. bo03 I JPS Co. I 0.00 1 0.00 I 45.00 I 0.00 1 0.00 I 0.00 I 45.00 I 0.00 1 1995 Jam Energy Prtnr 7.10 0.00 0.00 14.86 7.10 0.00 0.00 14.86 2002 MBJA Limited 20.00 0.00 0.00 25.00 19.11 0.00 0.00 23.89 Total portfolio: 27.10 0.00 45.00 39.86 26.21 0.00 45.00 38.75

Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic.

Total pending commitment: 0.00 0.00 0.00 0.00

126 Annex 20: Country at a Glance JAMAICA: Inner City Basic Services for the Poor Project Latin Lower- POVERTY and SOCIAL America middle- Jarnalca 8 Carib. income Development diamond' 2004 Population, mid-year (millions) 2.7 534 2,655 I Life expectancy GNI per capita (Atlas method, US$) 3,150 3,260 1,480 GNI (Atlas method, US$ billions) 8.4 1,741 3,934 T Average annual growth, 1998-04 I Population (%) 0.8 1.5 0.9 Labor force 1%) 1.4 2.1 1.2 GNI Gross per primary Most recent estimate (latest year available, 1998-04) capita enrollment Poverty (% of population below national poverty line) 19 Urban population (% of total population) 58 77 50 Life expectancy at birth (years) 76 71 69 Infant mortality (per 1,000 live births) 17 28 32 Child malnutrition (% of children under 5) 4 11 Access to an improved water source (% of population) 93 86 81 Illiteracy (% ofpopulation age f5+) 12 11 10 Gross primary enrollment (% of school-age population) 101 129 112 -Jamaica Male 101 131 113 ~ Lower-middle-income grow I Female 100 126 111

KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1984 1994 2003 2004 Economic ratios' GDP (US$ billions) 2.4 4.9 0.2 8.9 Gross domestic investmenffGDP 23.1 26.8 29.5 31.3 Trade Exports of goods and servicedGDP 55.6 51.3 40.2 40.6 Gross domestic savings/GDP 17.1 20.7 11.8 14.1 T Gross national savingdGDP 10.4 24.8 10.7 22.4 Current account baiance/GDP -10.7 -0.5 -11.8 -5.8 Interest payments/GDP 8.2 3.6 3.6 3.5 Total debffGDP 152.4 93.2 67.8 71.0 Total debt service/exporls 31.2 19.1 21.8 13.7 Present value of debffGDP 74.6 Present value of debffexports 162.6 indebtedness 1984-94 1994-04 2003 2004 2004-08 I (average annual growth) GDP 3.9 0.6 2.3 0.9 2.9 -Jamaica GDP per capita 3.2 -0.2 1.4 0.1 1.9 Exports of goods and services

STRUCTURE of the ECONOMY 1984 1994 2003 2004 [Growth of Investment and GDP (Oh) (% of GDP) h Agriculture Industry 37.75.8 33.98.1 29.05.0 ii% Manufacturing 18.5 15.7 12.3 Services 56.5 50.5 57.7 56.8 .: Private consumption 66.4 69.3 72.8 71.6 .zy!Lm 16.5 10.1 15.3 14.4 General government consumption -GDI *GDP Imports of goods and services

1984-94 1994-04 Growth of exports and Imports (Oh) (average annual growth) Agriculture 4.3 -2.9 4.8 Industry 3.9 -0.1 1.4 Manufacturing 2.2 -1.5 -0.9 Services 3.8 1.5 2.4 Private consumption General government consumption 99 00 01 02 03 04 Gross domestic investment -Exports elmports Imports of goods and services

Note: 2004 data are preliminaryestimates. Group data are for 2003. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete.

127 Jamaica

PRICES and GOVERNMENT FINANCE 1984 1994 2003 2004 Domestic prices (% change) Consumer prices 27.8 35.1 10.3 13.6 Implicit GDP deflator 35.9 32.3 12.4 12.6 Government finance (% of GDP, includes current grants) Current revenue 26.4 25.2 28.2 30.2 ~ O' 99 00 61 02 03 Current budget balance -2.5 5.1 -6.5 -3.8 rlII -GDP deflator 'OICPI Overall surplus/deRcit -8.0 1.7 -7.7 -5.5 I

TRADE 1984 1994 2003 2004 Export and import levels (US$ mill.) (US$ millionsj Total exports (fob) 740 1,548 1,368 1,601 4500 Alumina 284 537 688 823 4,000 Bauxite 160 72 90 79 3,500 3,000 Manufactures 91 340 108 137 2,500 Total imports (cif) 1,183 2,177 3,813 4,093 2.000 Food 99 126 282 287 1,500 1,000 Fuel and energy 349 328 829 912 500 Capital goods 287 361 558 603 0 98 99 00 01 02 03 04 Export price index (1995=100) import price index (1995=100) Exports Imports Terms of trade (1995=1001

BALANCE of PAYMENTS 1984 1994 2003 2004 Current account balance to GDP (%) (US$ millions) 1 Exports of goods and sewices 1,321 2,877 3,469 3,898 0 Imports of goods and services 1,422 3,060 4,947 5,271 2 -101 -183 -1.478 -1,373 Resource balance 4

Net income -273 -318 -632 -583 6 Net current transfers 121 475 1,135 1,446 8

Current account balance -253 -26 -975 -510 -10 Financing items (net) 28 47 542 1,204 -12 Changes in net reserves 226 -21 432 -694 -14 Memo: Reserves including goid (US$ millions) 736 1,196 1,682 Conversion rate (DEC, loca//US$) 3.9 33.1 58.1 61.3

EXTERNAL DEBT and RESOURCE FLOWS 1984 1994 2003 2004 (US$ millions) Composition of 2004 debt (US$ mill.) Total debt outstanding and disbursed 3,616 4,601 5,583 6,296 IBRD 326 595 476 439 iDA 0 0 0 0 G: 1,017 A: 43%: 1 Total debt service 442 584 824 805 IBRD 50 124 66 65 iDA 0 0 0 0 Composition of net resource flows Official grants 27 91 29 0 Official creditors 282 -132 -71 -87 Private creditors 41 6 -208 697 Foreign direct investment 12 130 721 0 Portfolio equity 0 0 0 0 World Bank program

Commitments 100 48 0 0 A ~ IBRD E. Bilateral Disbursements 49 22 15 6 B - IDA D - Other multilateral F - Private Principal repayments 18 76 46 47 C - IMF G - Short-term Net flows 31 -54 -31 -41 Interest payments 31 49 20 18 Net transfers 0 -102 -52 -59

Development Economics 12/19/05

128 Annex 21: Map

JAMAICA: Inner City Basic Services for the Poor Project

129

CENTRAL VILLAGE Little Lane JAMAICA 77°W 19°N TAWES PEN 19°N SHELTER Detroit ROCK INNER CITY BASIC SERVICES Homestead Andrews SPANISH TOWN Lane FOR THE POOR PROJECT Big Lane AFRICA PROJECT AREAS Caribbean Sea SELECTED CITIES AND TOWNS PARISH CAPITALS NATIONAL CAPITAL MAIN ROADS Parish: St. James RAILROADS Community: Flankers Parish St. Catherine PARISH BOUNDARIES Population: 7,148 Community: Bogwalk INTERNATIONAL BOUNDARIES Population: 1,120 Parish St. Catherine Community: Tawes Pen Africa Central Shelter Lauriston Village* Rock Montego Falmouth Montego Bay Discovery Bay Population: 1,822 3,254 5,816 2,772 356 Lucea Bay St. Anns Bay Central Village* includes Andrews Lane, Little Lane, Big Lane, Detroit G r e SAINT a HANOVER t Ocho Rios Montpelier Oracabessa Port Maria JAMES TRELAWNY SAINT SAINT Negril ANN MARY Annotto Bay WESTMORELAND Moneague

Savanna Port Antonio La Mar Christiana Frankfield Bluefield Linstead PORTLAND Bay Bog Walk ck Chapelton SAINT la B Mandeville SAINT ANDREW Black River SAINT CLARENDON CATHERINE Halfway Tree 18°N MANCHESTER 18°N Spanish Town SAINT ELIZABETH May Pen For detail, see KINGSTON

M inset above. For detail, see THOMAS

0 5 10 15 20 25 Kilometers i n inset below. h Port Esquivel Port Morant o Alligator Pond KINGSTON Rocky Point 0 5 10 15 20 Miles Lionel Town Portland Parish: Clarendon New Kingston Bight Richmond Park Community: Bucknor Kencot Three Mile Population: 1,150 Eden Gardens Long WHITFIELD TOWN Cross Roads Kingston and St. Andrews JONES TOWN Mountain Community: Whitfield Dunkirk Federal Jones Vineyard Greenwich Town JAMAICA Town Gardens Town Town FEDERAL Rollington Town Population: 21,650 5,982 2,391 13,011 GARDENS FEBRUARY 2006

Bournemouth Gardens IBRD 34379 DUNKIRK

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information KINGSTON shown on this map do not imply, on the part of The World Bank Caribbean Sea Group, any judgment on the legal status of any territory, or any 78°W endorsement or acceptance of such boundaries.