Document of The World Bank Public Disclosure Authorized ReportNo: 19362 AM
PROJECT APPRAISAL DOCUMENT
Public Disclosure Authorized ONNA
PROPOSED CREDIT
IN THE AMOUNT OF US$SDR 19.7 MILLION (US$ 26.6 MILLION EQUIVALENT)
TO THE
GOVERNMENT OF ARMENIA
FOR Public Disclosure Authorized DAM SAFETY PROJECT
MAY 25, 1999
Public Disclosure Authorized Environmentally and Socially Sustainable Development Unit Armenia and Georgia Country Unit Europe and Central Asia Region CURRENCY EQUIVALENTS
(Exchange Rate Effective as of May 1999)
Currency Unit = SDR LC = AMD US$1 = LC 536.26
FISCAL YEAR 1999
ABBREVIATIONS AND ACRONYMS
BP Bank Procedures IP Implementation Progress CAS Country Assistance Strategy IS International Shopping CQ Consultants' Qualifications MW Minor Works DO Development Objective NA Not Applicable DME Dam Maintenance Enterprises NCB National Competitive Bidding DSP Dam Safety Project NGO Non-Governmental Organization ECA Europe and Central Asia NS National Shopping EMA Emergency Management Agency O&M Operation and Maintenance EPP Emergency Preparedness Plans OME Operation Maintenance Enterprises ERR Economic Rate of Return OP Operations Policy EWS Early Warning Systems PAD Project Appraisal Document FAO Food and Agriculture Organization of the PAR Population at Risk United Nations PIU Project Implementation Unit IBRD International Bank for Reconstruction and PMB Project Management Board Development PMR Project Monitoring Report IC Individual Consultant PMF Portable Maximum Flood ICB International Competitive Bidding QCBS Quality and Cost Based Selection IDA International Development Association RFP Request for Proposals IDP Irrigation Development Project SOE Statement of Expense IFAD International Fund for Agricultural TA Technical Assistance Development TOR Terms of Reference WUAs Water Users Associations
Vice President: Johannes Linn Country Director: Judy O'Connor Sector Director: Kevin M. Cleaver Team Leader: Salem Gafsi iii
REPUPBLIC OF ARMENIA DAM SAFETY PROJECT
CONTENTS
A. Project Development Objective...... 2
1. Project development objective and key performance indicators .2
B. Strategic Context .2
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project .2 2. Main sector issues and Government strategy.2 3. Sector issues to be addressed by the project and strategic choices .3
C. Project Description Summary .4
1. Project components .4 2. Key policy and institutional reforms to be sought .5 3. Benefits and target population.5 4. Institutional and implementation arrangements .5
D. Project Rationale .7
1. Project alternatives considered and reasons for rejection .7 2. Major related projects financed by the Bank and/or other development agencies .9 3. Lessons learned and reflected in the project design .9 4. Indications of borrower commitment and ownership .10 5. Value added of Bank support in this project .10
E. Summary Project Analysis .10
1. Economic .10 2. Financial .11 3. Technical.11 4. Institutional. 1 5. Social .12 6. Environmental .12 7. Participatory approach .13 8. Checklist of Bank Policies .14
F. Sustainability and Risks.14
1. Sustainability.14 2. Critical Risks.15 3. Possible Controversial Aspects . 15 iv
G. Main Credit Conditions ...... 15
1. Effectiveness Conditions ...... 15 2. Other ...... 15
H. Readiness for Implementation ...... 17
I. Compliance with IDA Policies...... 17
Annexes
Annex 1. Project Design Summary Annex 2. Project Description Annex 3. Estimated Project Costs Annex 4. Economic Analysis Annex 5. Financial Summary Annex 6. Procurement and Disbursement Arrangements Table A. Thresholds for Procurement Methods and Prior Review Table B. Procurement Arrangements Table C. Procurement Plan Table D. Allocation of Loan Proceeds Table E. Withdrawal of the Proceeds of the Credit Annex 7. Project Processing Budget and Schedule Annex 8. Documents in Project File Annex 9. Statement of Loans and Credits Annex 10. Armenia at a Glance
Map U - ARMENIA Dam Safety Project (DSP) Project Appraisal Document
Europe and Central Asia Regional Office ECCO3
Date: 5/25/99 Task Team Leader: Salem Gafsi Country Director: Judy O'Connor Sector Director: Kevin Cleaver Project ID: 64879-AM Sector: Agriculture Program Objective Category: Environmentally Sustainable Development Lending Instrument: SIL Program of Targeted Intervention: [] Yes [X] No
Project Financing Data [ Loan [X] Credit [] Guarantee [ Other [Specify]
For Loans/Credits/Others:
Amount SDR 19.7 million (US$26.6 million equivalent):
f ng Plan (US S M): Source Local Foreign Total Government 37 0.0 3.7 Co-financiers IBRD IDA 8.8 17.8 26.6 Other Total 12.5 17.8 30.3
Borrower: Government of Armenia Guarantor: N/A Responsible Agency: Ministry of Agriculture Project implementation period: October 1999-September 2004
Est!-Ated Disbursement (Bank FY/USSM)
-- Y | 2000 2001 2002 2003 2004 2005 Annual 4.0 5.8 5.0 4.5 4 3.3 Cumulative 4.0 9.8 14.8 19.3 23.3 26.6
For Guarantees Proposed coverage: Project sponsor: Nature of underlying financing: Terms of financing: Principal amount (USSM): Final maturity: Amortization profile: Financing available without guarantee: [ Yes [ No If yes, estimated cost or maturity: Estimated financing cost or maturity with guarantee:
OSD PCD Form: July 30, 1997 I Armenia Dam Safety Project (DSP) Project Appraisal Document
Europe and Central Asia Regional Office ECCO3
Date: 5/25/99 Task Team Leader: Salem Gafsi Country Director: Judy O 'Connor Sector Director: Kevin Cleaver Project ID: 64879-AM Sector. Agriculture Program Objective Category: EntvirotntenttallivSustainable Developnent Lending Instrument. ERL Program of Targeted Intervention: [] Yes [X] No ProjectFinancing Data [] Loan [XI Credit [] Guarantee [] Other [Specify'
For Loans/Credits/Others:
Amount SDR 19.7 million (US$26.6 million equivalent):
Financingplan (US $ m): Source Local Foreign Total Government 3.7 0.0 3. 7 Co-financiers IBRD IDA 8.8 17.8 26.6 Other (specify) Total 12.5 17.8 30.3
Borrower: The Government ofArmenia Guarantor: N/A Responsible agency: The Ministry of Agriculture Project implementation period. October 1999-September 2004
For Guarantees Proposed coverage: Project sponsor: Nature of underlyingfinancing: Ternis of financing: Principal amount (US$in) Final m1aturity Amortization profile Financing available without guarantee: [] Yes [] No If yes, estimated cost or maturity: Estimatedfinancing cost or maturity with guarantee:
OSD PCD Form: July 30. 1997 Page 2
A: Project Development Objective 1. Project development objective and key performance indicators (see Annex 1): Three complete dam failures occurred in Armenia in 1974, 1979 and 1994 respectively. Considering the approximate number of dams existing in Armenia in those years, the percentage of failures (number of failures/ number of existing dams) can be estimated in the order of 2.1% (1974), 3.5% (1979' md 3.9% (1994). Two aspects are of concern: (a) the values are considerably higher than the world-average value of 0.5% for dams built after 1951 (ICOLD); (b) the percentage values show an increasing trend. From 1994 to 1998, six significant dam-related accidents occurred that might have as well led to complete dam failure. All reported accidents could have been avoided if proper surveillance and O&M were in place. Such observations suggest that other failures cannot be ruled out if the situation of dam safety in Armenia is allowed to remain out of control. Considering that no dam is reported to have a functioning instrumentation system and that country-wide around 460,000 people are at risk, the situation should be regarded as an emergency.
In light of this situation, the primary objective of the project is to protect the population and thesocio- economic infrastructure down- stream of the dams facing the highest risk of failure. Achieving this objective will also enhance the sustainability of darn-based economic activities in Armenia. Progress towards the project objective would be measured in terms of: (i) the reduction of the risk, related to dam failure, to socially acceptable levels for 360,000 people currently living under threat of high probability of failure of the riskiest 20 dams; and (ii) the improvement of the risk profile for the totality of the dam system in Armenia (as indicated in annex 2).
B: Strategic Context 1. Sector-related Country Assistance Strategy fCAS) goal supported by the project (see Annex 1).
CAS document number. 16988-AM Date of lates! CAS discussion. August 26, 1997
The Bank's main country assistance goal in the agricultural sector as indicated in the CAS is to facilitate private sector development by helping the Government address basic infrastructure and institutional constraints. This goal translates into supporting critical investments to (i) rehabilitate the irrigation infrastructure; and (ii) create the enabling conditions for greater private sector participation in the management, maintenance, and further development of that infrastructure. With dams supplying over 25% of the irrigation water, 10% of the domestic water supply, and 20% of the power generation, their structural integrity is of great importance to the well being of the population as a whole, and of critical importance to those people living downstream of unsafe dams.
2. Main sector issues and Government strategy:
Because of its heavy reliance on irrigation, many important issues facing Armenian agriculture are water related. These include: (i) irrigation system inefficiency due to deterioration of the water storage and conveyance infrastructure; (ii) high cost of irrigation due to heavy reliance on energy intensive pumping; (iii) excessive reliance of the system on limited budgetary allocations for O&M combined with limited user participation in the management of the system and in contributing to financing the cost of required O&M, and (iv) ineffective institutional set-up for operating and maintaining the system. The persistence of these issues over time led to extensive deterioration of the irrigation, drainage and dam infrastructure. While continuing attempts are being made by Government to address these issues, limited success has been achieved to-date due to limited expenditures on system maintenance compounded by, as yet, an inconsistent strategy for adapting the institutions responsible for managing the water supply- system to Page3
the realities and requirementsof a private sector controlled agriculture. Recently the Government initiated the preparationof a Water ResourcesManiagement Plan to help assessthese other cross-sector issues.
To addressthese issues,the Governmentadopted a strategyaimied at the rehabilitation of' the irrigation systemalong with the creationof the necessaryconditions to ensureits susatinahility. [his strategyis at an early stageof implementation,and some of its critical elements,particularly on the instititiollal side are still being defined. 'I'he approachto the physical rehabilitationof the infrastructureand to reducinig the cost of irrigation water delivery has beenclearly detined in the context of' thc on-goinigIrrigation RehabilitationiProject. A serious and successfulattempt is also underway to create hliecnabling conditionisfor user participation in the managemiientot' thc irrigationi inf'rastrtictureal the tertiary lcvcl. T'he Governmentis yet to decide,however, on the appropriateinstitutional arrangemilenit for operatingand mainitaininigthe infrastructureabove the tertiary level. An institutional review of tlie system-wi(le( )&M function (including dams, water conveyanicesystem. and drainage)is underway. 'I'lic (iovcrilmcnt has alsoadopted a plan for completeO&M cost recoveryby 2,005.
3. &'ectorissues lo he addresse(dhy theproject candsia wlegcchoices.:
'I'heproject was initially definiedas a componcintof 'a more compreihensiveprogramii aimied at a(ldressinlg all issueslisted abovc in the context of the Irrigation DevelopmentProject (DP). 13ecaLIseof' potential. catastrophiicconsequenices of dam failtire, however, the Governimentdecided to give priority to addressingthe dam safe'ty issulCby proceedinigwith thlc dam compoilenitas a separatepr'oject on anl cmergeincybasis. 'this decision docs not, howevcr, a'lect the(iGovernment's inteiitioni to addressthe above issuesin theconitext ol'thc IP)l', withi I;il provision hbeiigniade for addressingall issuesrclatcd to dam rchabilitation, operationland maintcnanceunlder the l )am Sallty ProJect(I)SP). In partiCUlarthIC DSP' will provide for upgradinLgthe institutional capability lfor moiioitoringilic state of' all dams and lofo cnstirinigpreparedness and timely iniervcitionis to allow Fortheir sustainableand safc uscin conniLiIction witlh other in frastruicturcto be rehahilitate(land othier (O)&M institutions to he strengthienicdunider the I1)'.
Durinig project preparation,preliminary investigationiswere undertaken on all dams to assessthe actual stateof dam structuresand the associatedlevel of risk of' failurc. On that basis,and keeping inl miid the resourccconstraints, the Governmentmade the strategicchioice to conccitrate immediatcefforts on 20 priority irrigation dams identified as potentially most dangerous. The remaininlg54 irrigation damills (generally of smaller size) and 6 cncrgy dams will not, however, be neglected in the coursc of' implementationiof thel)SP. 'I'lhy will be the subject of'close monitorinlg,firtlher technical investigations as required,and possibleintcrvenitioni in caseof cmergenicy.Imcrgency preparednessplans will also bc developedand adoptedas an integral part ol' thc operationand maiiteinanceplan for each dam. larly warning systems will be provided in thiose situations whele traditional warning methods may he inefficient.
The DSP will also provide for strcngthelningthe instituitionialcapability of the Dam Maintenance Enterprise(DME) to meet the safety rcquiremeicntsof' all dams, including the energy dams. A specific programwas agreedwith Governmlientoni lhow to strengthieniDME in the courseof the implementationof the DSP. In addition, it was agreedthat this programiiwill he reviewedand adjusted,as required, in light of the findings of the overall institutionial reforml program to be defined and agreed between the Governmenitand the Bank in the contextof the institutional audit of the O&M function which is expected to be completedby September,1999. This institutional strengtheningwill include the developmentof an effective national systemfor monitoring dam safety,and for maintaininga constantstate of preparedness which will allow a timely responseto potentialemergencies. Page 4
C: Project DescriptionSummary
1. Project components (see Annex 2for detailed description ):
The project will constitute a five-year program for improving the safety of 20 priority dams, and for establishing an effective system for monitoring the safety of all dams in Armienia. Thieproject is based on an optimized implementation program composed of a mix of both structural and non-structural measures. Structural measures are the rehabilitation works proper. Such works require relatively long construction times and represent the greatest part of the cost of the program. Non-structural dam safety measures include: (a) instrumentation and monitoring devices, (b) Operation and Maintenianice(O&M) Plans; (c) Emergency Preparedness Plans (EPP): (d) Early Warning Systems: and (e) Telecommunications. The technique used for optimizing the implementationi program is the Risk Reduction Profile which is described in annex 2. Non-structural measures can be implemented more rapidly and at a much lower cost than the structural ones. The former are not a substitute for the latter. rather it is through the balancing of the two types of measures that a souLid dam safety program is implemented. Non-structural measures also play a fundamental role in assurinig sustainiahility of the rehabilitation works. The project will have three comilponienlts:
Component Category Costs,including 2( IDA % of IDA contingenciesand Total financing financinsg taves (USSM) (USSM)
A. Rehabilitationof 20 irrigation dams:
A.1. Designand supervisionof works Consulting 1.3 4. 1.3 /00 Servtces
A.2. Rehabilitation Works C(ivilWorks 20.7 68.3 /7.6 85
B. Damsafety sustainabilitv:
B1. Dam SafetyPlans (Consulting 0.2 0. 7 0.2 / 00 Services
B2. DarnSafety Site Installations Equipmnent 1 7 5.5 1.6 93 Civil Works
B3. SirengtheningDME Equipmtent 3.0 2.3 76 Rec urrent Cost
B4. Investigationand EmergencY Civil Works 2.4 8.1 2.2 90 Repair Fund Consulling Services
C. Projectmanagement: Equipment 1.0 3.3 0.9 85 Consulting Services
______Total 30.3 100.0 26.7 87.9 Page 5
2. Key policy and institutional reforms to be sought:
Provisions are made under the project in support of measures that would (i) directly enhance the capability of the DME to allow it to effectivelyassume responsibilityfor the operationand maintenance of the dams rehabilitated under the project, as well as to monitor the safety status of all dams in the country; and (ii) ensure adequate funding for required O&M activities during the project period and thereafter. In addition,the project will enhancethe effectivenessof policy and institutionalinterventions initiated under other projects to promote the sustainabilityof irrigated agriculture and the institutions serving it. In the context of the preparation of the proposed IDP, the Government is undertakinga comprehensivereview of the current arrangementsfor O&M of the irrigationsystem, including the dams. The findings of that review will provide the basis for strengthening/amending,if proven necessary. the measuresto be undertakenunder this project to strengthen the DME. In this manner, all O&M reform measures under the DSP will be closely coordinated with those to be introduced under the IDP to strengthenthe O&M function for the totalityof the water conveyanceand drainageinfrastructure.
3. Benefits and target population:
Project Area:
The project is practicallynational in scope as the 20 dams to be rehabilitatedare located in 9 out of the 10 Marzes (Regions). In fact the geographicalscope of the project impact extends beyondthe territory of Armenia as 3 of these dams are close to the border with Azerbaijan. The area which could potentiallybe affected by floodsresulting from dam failure is estimatedat close to 680sqkm.Irrigation of up to 68,000 ha (34 per cent of the irrigated area in Armenia) could be partly or wholly underminedin case of dam failure and would directly benefit from the rehabilitation of the dams as a result of a more reliable irrigationwater supply.
Target Population:
On the Armenia side alone, about 360,000 people living downstreamof the 20 dams to be rehabilitated under the projectface the risk of dam failure. The numberof people who could potentiallybe affected in Azerbaijanis not known, but is thought to be substantial,particularly in the case of the dams located near the border.
Project Benefits: This is an emergency type project aimed at addressingsevere safety risks for a population of close to 360,000 people living downstreamof major dams. The primary direct benefits from project intervention will be the reduction in the risk of dam failure - currently considered to be very high by international standards- that would affect the populationand economic assets downstream. In addition,the project will contribute to building an institutional capability for operation and maintenance of the irrigation infrastructure. The project will also have secondarybenefits which are importantto the economy. It will help securethe dams' productivefunction in improvingthe reliabilityof water supply for over 68,000 ha of irrigatedagriculture, for fisheries,and for domesticwater supplyto about 170,000people.
4. Institutional and implementation arrangements: Implementation Period:
Project implementationis anticipatedto take five years (from October 1, 1999 to September30, 2004). On that basis, the credit closing date is expectedto be March 31, 2005. Page 6
Executing Agencies and Implementation Arrangements.
Overall project management will be the responsibility of the existing Project Implementation Unit (PIU), currently in charge of the Irrigation Rehabilitation Project. Specifically, the PIU will be responsible for the co-ordination of all project interventions, and for providing the necessary support services (procurement of goods and services, financial control, monitoring of project activities, preparation of annual work plans, and reporting on status of project implementation). While PIU will, at the onset of the project, be responsible for the supervision of construction activities, this function will be progressively taken over by the DME, as the latter develops the capability to manage that function. To that end, the project provides for strengthening the institutional capability of DME and for equipping its central and field offices to allow them to take over, by the third year of the project, full responsibility for overseeing the actual implementation of project activities contracted out, performing quality control, developing and executing dam specific monitoring, operation, and maintenance plans, and ensuring that emergency warning systems are operational. The project will finance the incremental cost of operation of the PIU and the DME, including the required institutional and manpower strengthening. In addition, the PIU will retain the services of an experienced internationally recruited dam safety specialist who will work with PIU supervision engineers to undertake, twice a year, an independent review of the scope and quality of the dam safety programs, and on that basis, advise PIU, DME and IDA on any necessary improvements. Another international expert in dam design management will assist the PIU in the initial part of the project to ensure compliance with the design schedule.
Project Oversight.
The PIU will continue to work under the leadership of the existing Project Management Board (PMB) chaired by the Minister of Agriculture.
Accounting, Financial Reporting, and Auditing Arrangements.
The Finance Division of PIU was reviewed by a Bank-accredited Financial Management Specialist who concluded that the PIU has adequate and competent staff, satisfactory accounting systems and software supported by a simple but functional operational manual and that the internal control procedures in place are generally satisfactory. The PIU will need one additional staff to help handle the increased volume of transactions when the operations under the new Dam Safety Project commence towards the end of 1999. The PIU management is fully aware of the need to keep the Finance Division adequately staffed; it has recently added a junior accountant to the Division and provided the assurance that the additional staff will be recruited in time to provide the necessary support under the Dam Safety Project.
The appraisal mission has discussed and explained in detail to the financial staff of the PIU and its auditors, the Bank's new procedures for disbursements against the quarterly Project Monitoring Reports (PMRs), as required under the LACI Handbook and Project Financial Management Manual of February 1999. The PIU has the required capabilities to generate the PMRs in the format and with the contents as required by the Bank. However, in order to make the transition to the new systems as smooth as possible, the PIU has requested: (i) that the DSP commence disbursements under the traditional method (i.e., periodic replenishments of Special Account via SOEs) and remain on this method for the first three to four quarters after the project becomes effective; (ii) Commencing with the quarter ended June 30, 1999 and essentially as a learning exercise for preparing PMRs, the PIU will begin submitting the PMRs for the ongoing Irrigation Rehabilitation project, for review, comments and further modifications as agreed between the Bank and the PIU. It is expected that with this plan of action, and assuming the Dam Safety Project becomes effective during the last quarter of 1999, the Dam Safety Project should be able to switch to PMR-based disbursements at the latest by October 1, 2000 based on the PMRs for the quarter ended Page 7
September 30, 2000. The financial staff of the PIU (and the auditors) have fully understood the 12 Tables (6 for financial control, 4 for Procurement Management and two for Physical Project Progress), which will constitute the quarterly PMRs. The financial unit of PIU will need to coordinate with the procurement unit to complete the four Procurement Tables. The Bank Project Team will assist the PIU in designing an appropriate format for the Output Monitoring Report (in line with the Table 2-A and/or 2-B of the Bank's Project Financial Management Manual of February 1999).
As part of the review of financial management of the PIU. the mission reviewed the 1997 audit of IRP (by HIYAUDIT). While the auditors provided an unqualified opinion and raised no significant financial management issues, the quality of the audit report was poor as it failed to cover important areas such as adequacy of internal controls and did not provide clear recommendations on improvements of systems and procedures. The PIU has since changed its auditors for IRP (for 1998 and 1999 audits) to be executed by an international firm, Amyot Exco Armenia (part of the Grant Thornton International Group). The firm had audited the 1995 and 1996 accounts of IRP and is also the present auditors of about eight other Bank financed projects in Armenia.
The Ministry of Agriculture indicated their intention to appoint the auditors of the Dam Safety Project by December 31, 1999. The Bank would agree to this when the PIU management makes a formal request in this regard, under audit TORs acceptable to the Bank. All other usual arrangements regarding audit will continue to apply to this project (i.e., audit report to be submitted within six months of end of each fiscal year, the cost of audits to be financed under the Credit).
Monitoring and Evaluation Arrangements and Reporting.
The Monitoring and Evaluation Unit established under the IRP and reporting to the PMB will be responsible for monitoring project inputs, outputs, and impact. This unit will prepare quarterly progress reports which will include information, analysis, and recommendations on: (i) progress in the execution of various elements of the agreed work program, including institutional development; (ii) procurement; (iii) expenditures; (iv) difficulties encountered in the course of project implementation, proposed solutions or required assistance; (v) updated project cost estimates, procurement plan, and implementation schedule; and (vi) updated estimates of performance indicators. An annual work plan and the associated budget will be prepared and agreed with IDA at the beginning of each project year. A project implementation completion report will be prepared within six months of project completion.
D: Project Rationale 1. Project alternatives considered and reasons for rejection. The project was initially conceived as a component of a proposed Irrigation Development Project. As a result of the initial field investigations, however, the Government came to the conclusion that enhancement of the safety of dams should be addressed urgently because: (i) many dams have deteriorated to the point where dam safety enhancement has become a prerequisite for any sustainable intervention in the development of water resources where water supply depends on the performance of dams; and (ii) under the current state of many dams, there is a real threat for major loss of life and economic assets in case of dam failure. Accordingly, the Government decided to advance the implementation of the dam safety component as a stand-alone emergency type project to precede complementary interventions under the proposed Irrigation Development Project, currently under preparation. Page8
The following technical alternatives have been considered:
* The option of basing the design of dam safety enhancement interventions on the basis of the Probable Maximum Flood (PMF) standard was rejected. The return period of the floods for sizing the spillways has been fixed at 1:10,000 years. This is considered acceptable in view of the fact that Armenian reservoirs are at their full capacity level for less than a month each year and much of the run-off is from snow melting. The PMF option would not be socially equitable either, as it would lead to a concentration of all potentially available resources on two or three dams, thus leaving most of the vulnerable population completely unprotected. The solution adopted by the Government will, thus, extend a high level of protection to the people currently most exposed to a high risk of dam failure.
* Initial stability analysis under seismic loading was based on the pseudo-static approach which is internationally considered to be no longer acceptable. This prompted the preparation team to undertake further refinement of the stability analysis using a more representative dynamic approach based on the Krasnikov method (FSU version of the Newmark method). Based on the period of record and on the past performance of dams, the seismic coefficients fixed by Armenian norms are believed to provide an adequate safety level.
* The alternative of limiting project interventions to the rehabilitation of 20 priority dams only was rejected in favour of providing for a program for monitoring the safety of all 80 dams (including the energy dams) along with the provision for a reserve fund (component B.4) to ensure timely and effective intervention in case of emergency on any dam other than the 20 being rehabilitated. Page 9
2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing andplanned): Sector issue Project Latest Supervision Ratings (Bank- financedprojects only) Implementation Development Progress (IP) Objective (DO) Bank-financed Deteriorating Irrigation Infrastructure Irrigation S S and ineffective water managenment Rehabilitation Project
Irrigation Development NA NA Project
Lack of credit resources for agro- Enterprise S S industry Development Projeci
Weak agricultural support services. Agricultural Reform S S including ruralfinance Suppori Project
Weak land market. Land Titling and NA NA Registration Project
Other development agencies Weak agricultural support services Northwest Agricultural NA NA Services Project (IFAD).
Lack of budgetary resources to fund Food Security priority programs in agriculture Programs (EU) NA NA
IP/DO Ratings. HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)
3. Lessons learned and reflected in proposed project design:
The main lesson learnt from the Bank supported program in Armenia and in the other FSU countries relates to the importancethat must be given to institutionaldevelopment as a prerequisite for achieving sustainabilityin the developmentand managementof irrigationand drainage infrastructures. Experience gained in the implementationof successfuldam safety projects aroundthe world points to the need for (i) proper documentationof the pre-projectstatus of dam safety; (ii) careful attention to both structuraland non-structuralremedial measures; and (iii) putting in place effective mechanismsfor maintaining the level of safety achievedat the end of the project. Dams and related structuresrequire relativelylong lead times for the preparationand the implementationof rehabilitationworks. At the other end, a dam safety program is, by definition, of an emergencynature and this is particularly true in the case of Armenia. Banksupported projects have also demonstratedthat long timesmay be necessary for reachingagreement Page 10 on key design criteria (e.g., design floods or design earthquake). Another important lesson from these projects is that, at the start of the project, design for remedial works for at least the first year should be completed. These lessons have been fu!0y reflected in the design of the DSP in Armenia.
4. Indications of borrower comntitment and ownership:
Senior officials expressed on several occasions Government interest in this project because of the high risk many dams pose to the population downstream, and because of the grave disruption to socio- economic conditions a dam failure would cause in the affected area. Government commitment is reflected in their decision to give implementation of dam safety measures top priority among all interventions being planned for implementation under a proposed Irrigation Development Project. The Ministry of Agriculture has allocated the necessary resources for preparation of the DSP and initiated the process to introduce it as a line item in the Government budget. Another indicator of Government commitment to the project is their pledge to finance up to 15% of project costs from internal budgetary resources.
5. Value added of Bank support in this project: There are not very many stand alone dam safety projects in developing countries world-wide and the Bank is involved in some of the most important ones (India, Indonesia). The Bank is also involved in a number of projects which include, to a higher or lower extent, a dam safety component (Aral Sea basin, Albania, Tarim Basin 11and Guangzhong in China, Kyrgyz Republic, Mexico, Vietnam, Ecuador). Bank support will help in identifying and introducing best practices in: (i) assessing the hazards of dam failure, prioritising dams for rehabilitation, and selecting appropriate approaches to the actual rehabilitation of dams; (ii) monitoring of dam safety and establishing a system for emergency preparedness; (iii) the development and introduction of sustainable O&M systems; and (iv) the creation of the necessary conditions for increasing beneficiaries' interest and participation in securing the safety of dams.
E: Summary of Project Analysis 1. Economic [] Summarize issues below (e.g.,fiscal impact, pricing distortions) []To be defined (indicate how issues will be identified) [x] None Economnicevaluation methodology: [X1 Cost-benefit [ ICost effectiveness [ Other [specify] It is difficult to estimate the probability of failure of any given dam. The historical probability of failure of dams in Armenia was examined for the past forty years. The conclusion was that, during any twenty year period, one in twenty dams has failed. More importantly, the probability of failure has doubled over the past twenty years. On that basis, the following potential losses resulting from dam breaks on each of the twenty dams covered by the project were calculated: reduction in net farm income as a result of loss of access to irrigation water, flood damages to household structures and other household assets, and flood damages to other non-household assets (roads, irrigation structures, other public infrastructure and enterprises).
The total value of these potential losses is then weighted by the reduction in the annual probability for dam failure in the system as a whole on a yearly basis to yield a stream of values over a twenty year period. Since the project is designed to reduce the risk level of dam failure to socially acceptable levels (ten times less than current levels), the forestalled losses are then accordingly treated as project benefits, without inclusion of human life at risk. The benefits are set off against the project investment costs, and Page I 1 the economic rate of return is then calculated. The base level ERR for the project is 32% (further detail in Annex 4). Sensitivity analysis was performed which showed that the threshold level of ERR of 15% is met when the probability of dam break in the system over twenty years is set at 3.6% (which is well below historically observed levels). 2. Financial f] Summarize issues below [] To be defined (indicate how issues wvillbe identified) [x ] None
3. Technical [X] Summarize issues below (e.g., appropriate technology, costing) []To be defined (indicate how issues will be identified) []None Most of the 20 dams proposed for rehabilitation were visited by FAO/CP preparation and IDA pre- appraisal teams. The urgency of the proposed repair and rehabilitation works was confirmed. During project preparation, emphasis was placed on ensuring that the limited resources available for remedial works are used in the most efficient manner possible and on dams which present, the highest risk of failure. Hazard and risk classification, including flood handling capability, and a group order ranking of dam safety was undertaken for all large dams. Similar investigations will be continued on other dams during project implementation. In addition. physical simulation will be done to ensure proper reconstruction of spillways and effective monitoring of the operation of structures. Well defined operational and management plans will also be introduced for all rehabilitated dams. While detailed designs are ready for the structures to be rehabilitated during the first year, detailed designs for other structures will be done in the course of project implementation following detailed investigations for which provision is made under the project. Cost estimates were done on the basis of actual civil works contracts awarded by PIU at the time of project preparation. Physical contingencies of 5 - 15 per cent were included in the cost estimates for civil works and 5 per cent for equipment. Price contingencies were based on annual inflation rates as estimated by the Bank ( 6.0 - 9.6 for local costs and 2.5 per cent for foreign cost). In addition, given the level of uncertainty associated with dam rehabilitation, project implementation has to be approached with a reasonable level of flexibility to be able to adjust for any possible cost overruns or under-runs by respectively reducing or increasing the number of dams considered for rehabilitation.
4. Institutional [X] Summarize issues below (e.g., project management, ME capacity, administrative regulations) [] To be defined (indicate how issues will be identified) [ None
Although no major issue is foreseen with regard to the local capacity to design, implement, manage, monitor and evaluate the project interventions and their impact, executing agencies are handicapped by very low salaries, limited operational budgets, inadequate mobility, and very limited exposure to international experience. The project provides for filling these gaps during the project period and for the creation of the enabling conditions for Government to ensure proper operation of the dam infrastructure thereafter. The institutional reforms needed to improve the longer term O&M of the infrastructure supported by the project will be part of the project and the necessary reforms for the DME will be introduced on the basis of the institutional review of the management and O&M arrangements for the irrigation infrastructure as a whole. Training activities and study tours planned under the project will help expose project staff to international experience and, thus, enhance their knowledge and infrastructure management skills. Exposure to international practice will also be available through the interaction with the 2 international dam specialists who will be recruited as independent experts during the course of the project. Page 12
5. Social [] Summarize issues below (e.g., significant social risks, and ability to target low income and other vulnerable groups) []To be defined (indicate how issues will be identified) [l xNone
No negative social impact is foreseen. Enhancing the safety of dams will have a favorable impact on the population as a whole. Preparation of the Emergency Preparedness Plans will entail public participation together with the training to support the introduction of the project funded early warning systems. This will contribute to increase awareness and participation in the population. 6. Environmental a. Environmental issues. fX] Summarize issues below (distinguishbetween major issues and less important ones) [] To be defined (indicate how issues will be identified) f] None Major: None
The nature of the works to be supported under the project are primarily of the delayed O&M type. In addition, some work will be needed to correct the design of spillways and outlets and to stabilize the slopes of a few dams to make them safer. These works will not alter the original capacity of the dams, nor the quantity and quality of the water flow. In those cases where safety considerations will call for enlarging the discharge facilities, the peak flood downstream will remain lower than the flood intensity in the natural conditions of the rivers (without the dams), and lower than the flood flows with the dams in their current state.
Other: The only foreseeable environmental issues faced by the project are the ones associated with the management and disposal of excavated materials and construction concrete rubble and debris and the use of quarries.
The positive impacts of the project are expected to be significant. Over 350,000 persons (not including riparians) will benefit from better protection and safety after completion of the project. The water resource and dam-based socio-economic activities and infrastructures downstream will also be better protected. Existing erosion will be reduced and sedimentation will be analyzed, controlled and managed. Dam operations will be better managed and sustained (reducing the need for new dams and for more impacts on the environment). Emergency warning systems will be improved and the O&M function will be strengthened.
A preliminary Environmental Management Plan (EMP) specifying the mitigation measures required has been prepared and agreed between Government and IDA. All works contracts envisaged under the project will conform to the requirements under this plan. In addition, the Government agreed to fully take into consideration the recommendations of the IDP Environmental Assessment (expected to be ready in September/October, 1999) in dealing with any DSP environmental issues. The EMP will be finalized in the light of the IDP Environmental Assessment. b. Environmental category: [] A [XI B [] C c. Justification/Rationale for category rating: The project has been rated as environmental category "B" taking into account the nature of the works (rehabilitation/reconstruction of existing infrastructures), the expected environmental benefits, and the need for appropriate disposal of excavated materials and construction rubbles/debris, and for appropriate use of quarries. The physical works supported by the project are all remedial works resulting in limited local physical disturbance, in contrast with new large- Page 13 scale construction. The only foreseeableenvironmental issue faced by the project is the one associatedwith the disposal of the ;epair constructionmaterials/debris. An EnvironmentalManagement Plan specifying the mitigation measures required has been prepared and agreed between Government and IDA. All works contracts envisaged underthe projectwill conformto the requirementsunder this plan. d. Status of Category A assessment: EA start-up date: N/A Date offirst EA draft: Current status: e. Proposed actions: f Status of any other environmental studies: g. Local groups and NGOs consulted. (List names). h. Resettlement [] Summarize issues below (e.g., resettlement planning, and compensation) [ITo be defined (indicate how issues will be identified) [x]N/A
Remedialworks on the dams are not expectedto necessitatethe acquisitionof additionalland for new rights-of-way,and thereforethe issue of resettlementof people is not expectedto arise. i. Borrower permission to release EA: [] Yes f] No [X] N/A j. Other remarks: 7. Participatory Approach: a. Primary beneficiaries and other affected groups: [ IName and describe groups, how involved, and what they have influenced [X] Not applicable (describe why participatory approach not applicable with these groups) The plannedrehabilitation program addresses safety concernsknown to the beneficiariesas a result of the failure of three dams over the past twenty-fiveyears. The program is, therefore,demand driven. The people downstreamare aware of the potential safety hazard many dams pose to their physical well being and to their livelihood. They are aware of project objectives and implementation arrangements. Representativesof local communitieshave been and will continue to be informed and consulted, as appropriate, during project implementation. Priority was given to the design of an Emergency Preparedness Plan, including an early warning system. Beneficiaries will be informed about the proceduresto follow in case of threat of dam failure and clearly instructedin what to do and where to go in case of emergency. Provisionis also made underthe project for a series of workshopsto be organized to facilitate the sharingof ideas between beneficiaries,central and local Governmentrepresentatives, and contractors.In addition,water users servedthrough the dams are expectedto actively participatethrough the Water Users Associations(WUAs) in: (i) organizationof WUAs; (ii) the managementof water at the community level (includingcollection of water fees); and (iii) the design and actual rehabilitationof the tertiary and quaternaryirrigation networks supplied by the dams. b. Other key stakeholders: [] Name and describe groups, how involved, and what they have influenced [XI Not applicable (describe why participatory approach not applicable with these groups) Page 14
8. Checklist of Bank Policies a This project involves (check applicable items):
f]/ Indigenous peoples (OD 4.20) [X] Riparian water rightsl (OP 7.50) (BP 7.50) 'GP7.50) [I Cultural property (OPN 11. 03) [XI Financial management (OP 10.02) (BP 10. 02) [XI Environmental impacts {X] Financing of recurrent costs (OMS 1.21) (OP 4.01) (BP 4.01) (GP 4.01) [] Natural habitats [X] Local cost sharing (OP 4.01) (BP 4.01) (GP 4.01) (OP 6.30) (BP 6.30) (GP 6.30) [I Gender issues (OP 4.20) [ Cost-sharing above country three-year average (GP 6.30) (OP 6.30) (BP 6.30j [] Involuntary resettlement (OD 4.30) [ Retroactive financing above normal limit (OP 12.10) (GP 12.10) [] NGO involvemnent(GP 14.70) [ Disputed territory (OP 7.60) (BP 7.60) (GP 7.60) [XI Other (provide necessary details) Dam Safety (OP 4.37)
F: Sustainability and Risks 1. Sustainability Adequate and regular maintenance of the rehabilitated dams is critical for the sustainability of project benefits. Such maintenance will require sufficient institutional and financial resources which have not been readily available over the last few years. The Dam Maintenance Enterprise is responsible for the operation and maintenance of dams. Their capacity to perform their job depends on allocations from the state budget and on the revenues they generate from selling water to the Operation and Maintenance Enterprise which is responsible for the supply of irrigation water to farmers. Arrangements will be agreed with Government on effective modalities for the DME to be paid by OME at a rate that will ensure that the maintenance requirements of dams are met, or that any underpayment by OME is met from the state budget. Provision is also made under the project for strengthening the DME to ensure that they acquire and maintain the necessary technical and management capability to effectively operate and maintain the rehabilitated dams. An agreement has been reached with Government under the IRP to achieve full O&M cost recovery by the year 2005. Assurances to the effect that Government intends to abide by this time table will be obtained during credit negotiations. To ensure adequate O&M financing for the dams in the interim period, the project will finance the expected deficit.
'All the darns to be rehabilitatedunder the project are on internationalwaterways, as defined in OP 7.50. The Bank has determined,however, that the projectwould not cause any adverseimpact on the quantityand quality of water to downstreamreparians. On that basis the projectwas exemptedfrom the notificationrequirement. Page 15
2. Critical Risks (reflecting assumptions in the fourth column of Annex I) Risk Risk Rating Risk Minimization Measure
From Output to Objective Inadequate resources for O&M S Governmentcommitted itself tofull O&Mcost recoveryby 2005. The project willfinance incremental costs on a declining basis. From Components to Outputs Cost overruns during implementation M Cost estimates were based on careful survey work and on actual contract cost data. In addition project design is keptflexible to allow for the project scope to be adjusted to the available budget.
Limited in-country construction capability M Civil works contractsfor many of the dams are expected to be large enough to attract international bidders.
Insufficient management and construction The project provides for the supervision capability in DME institutional strengthening of DME. In the interim period PIU will assume responsibility for overall project management andfor construction supervision. DME will lake over this responsibility progressively. Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk)
3. Possible Controversial Aspects (Project Alert System): None
G: Main Credit Conditions
1. Effectiveness Conditions
I. PIU will select a dam safety specialist with proven international experience, under terms of reference acceptable to IDA, for a cumulative assignment of about 6 months over the five-year project period to undertake periodic visits of about two weeks each to (i) undertake reviews of the rehabilitation program twice a year; (ii) participate in the continued reassessment of the project methodologies and approach; and (iii) identify any implementation issues and develop concrete and practical recommendations to be proposed for consideration by PIU, DME and IDA to address those issues.
11. PIU shall: (a) open a Project Account in a Commercial Bank with an initial deposit in local currency equivalent to at least $250,000.
2. Other [classify according to covenant types used in the Legal Agreements]: Page 16
Condition of credit negotiations ( it has been fulfilled):
Selection by PIU of an internationally selected design management specialist, under terms of reference acceptable to IDA, for a period of 5 months to help (i) oversee the design of the first seven dams; (ii) prepare a detailed plan for design of the other 13 dams to be rehabilitated, including dam-specific terms of reference and other documentation required in the bidding process; and (iii) prepare a detailed plan for technical investigations on the 60 dams which are not the subject of rehabilitation under the project.
Project imiplementation
1. The PIU will be maintained within the Ministry of Agriculture.
I. At the onset of each project year (September 15), the PIU will prepare and submit to IDA for review an annual work plan and the associated budget.
Ill. Government will finalize by October 1. 1999 the Environmental Management Plan in respect of mitigating measures for the disposal of construction debris and the opening of quarries at dam sites in the light of the Environmental Assessment expected to be completed in September 1999 and will iicorporate the recommendations in all civil works contracts.
IV. On the basis of the findings of the social assessment, the social unit of the PIU will organize information campaigns to ensure that beneficiaries (i) are given ample opportunity to be involved in the design and introduction of the Early Warning Systems and the associated Emergency Evacuation Plans; and (ii) can communicate with DME and contractors in the course of planning rehabilitation works to minimize the interruption of the flow of irrigation water.
V. The Project Account will maintain a minimum balance, through quarterly replenishments equivalent to $100,000, or such amount as may be agreed by the Association from time to time. The use of the funds of said Project Account will exclusively be for financing the implementation of the project.
VI. A Dam Safety Expert will be maintained for all the life of the Project and his recommendations will be implemented.
VII. Government will monitor and evaluate project implementation and achievement, on an ongoing basis, in accordance with indicators satisfactory to IDA (Annex 1).
VIII. Government will prepare by December 31, 2001, under terms of reference satisfactory to IDA, a mid-term progress report integrating the results of the monitoring and evaluation activities and setting out a strategy for the timely completion of project implementation. This report will be discussed with IDA by March 31, 2002 with the aim to agree on any necessary changes in project design and implementation strategy.
IX. By December 31, 1999, the Government will establish an independent Technical Consultative Commission on O&M of dams to provide every three years an independent assessment of the state of the dams and their O&M requirements. This assessment, along with the revenues effectively received by DME from the sale of irrigation water, will be used as the basis for budgetary allocations to DME over the following three years. The recommendations of the State Expert Commission will be binding and fully reflected in the O&M budget of DME. Page 17
H. Readiness for Implementation
[X] The engineeringdesigndocumentsare beingfinalized forthefirsttwodamsand thosefor an additionalfive dams are expected to be ready in Jutly, 1999. This will allow PIU to float the tenders in August, 1999for all the civil works expected to be initiated during thefirst year of the project.
[XJ The bidding documentsfor the first year 's rehabilitation program are under preparation and are expected to he ready,in July, 1999. [X] The Project Implementation Plan was appraised in March, 1999.
L Compliance with IDA Policies
[X] This project complies wvithall applicable IDA policies with particular reference to OP4.37 (Dam SafetyV). fX] The following excepnon to IDA policies was recommended and approved: Excepnon to the requirement under OP 7. *0 that the other riparian States he notified of projects on international water ways. This was done on the basis that this project meets the criteria for exemption specified in para. 7 of BP 7.50.
Task Team Leader: Salem Gafti
Sector Director: Kevin Cleaver
Country Direc Page 18
Annex ]
Project Design Summary Armenia: Dam Safety Project
Narrative Summary Key Performance Monitoring and CriticalAssumptions Indicators Evaluation Sector related CAS goal: (Goal to Bank Mission)
1. Accelerate the growth 1. 1 Decreased 1. 1 Ministry of Consistent with Bank andseor infastructure bottlenecks Economic Reforms Mission sector
Project Development (Objective to Goal) Objective.
To protect the population 1.1 Achievement of the 1.] Ministry of Government remains and the socio-economic Risk Reduction Profile Agriculture committed to the infrastructure down- envisaged under the rehabilitation of stream of the dams facing project (Annex 2) infrastructure and to its the highest risk offailure. effective operation and maintenance.
1.2 Number of people 1.2 Statistics of Other IDA supported protected downstream of Cabinet projects (IRP, IDP) are each rehabilitated dam. department of successfully Emergency implemented. Situations Page 19
Outputs: (Outputs to Objective)
1. Safety and operation of 1.1 Timing of risk 1.1 Risk Reduction DME gets paidfor dams improved reduction of 20 dams Profile Tabulated water delivered progressively reduced as by PIU through the dams. planned Government makes up 1.2 Summary risk 1.2 PIU and DME for any shortfall in the coefficientfor each of the monitoring reports O&M budget required 20 targeted is for the sustained substantially reduced operation of dams (constructed ion the basis of main sub-indicators)
1.3 Number of Dams for 1.3 DME reports which Safety equipment is fully installed
1.4 Number of villages 1.4 Cabinet between those under Departmentfor threat of inundationfor emergency which emergency warning situations system is installed
2. DME strengthened in 2.1 DME equipped with 2.1 PIU and DME DME properly dam safety monitoring, dam safety monitoring monitoring reports equipped, it hires and construction supervision, equipment and with plant retains qualified and dam operation and for emergency repair. personnel and gets a maintenance full set of information 2.2 Number of dams for 2.2 DME on the state of which program and monitoring report. remaining dams.. schedule of inspection and evaluation (executed by consultants) isformulated and implemented
2.3 Number of DME staff 2.3 DME who have undergone monitoring report. training in emergency preparedness and dam operationprocedures. Page 20
Project Components/Sub- Inputs: (budget/or each (Components to components: component) Outputs)
.. Rehabilitation of 20 1. US$ 22 million Progress reports, No cost overrun during primary irrigation dams: procurement implementation. 1.1 Rehabilitation works 1.1 USS 20.7 million reports, 1.2 Designand supervision 1.2 US$1.3 million disbursement Necessary budget reports prepared by allocation by 2. Dam safety sustainability.- 2. US$ 7.4 million PIU. Government.
2.1 Dam Safety Plans 2.1 US$ 0.2 million Project works will 2.2 Dam Safety Site 2.2 US$ 1.7 million aract wores wll Installations attract the interest of 2.3 Strengthening DME 2.3 US$ 3. 0 million sufficient local and 2.4 Investigation and 2.4 US$ 2.5 million foreign contractors. Emergency Repair PIU and DME will 3. Project management 3. US$ 1.0 million retain qualified staff Page 21
Annex 2
Dam Safety Project Project Description
General
There is a total of 80 existingdams in the Republicof Armeniawith a total capacityof about 1400Mm 3. Three additional dams are under construction.The operating dams can be divided in the following categories:(i) 20 priority irrigationdams; (ii) 50 other irrigationdams; (iii) 6 hydropowerdams; (iv) 3 irrigation/domestic water supply dams, and (v) one irrigation recreation dam. The seventy three dams used for irrigation have a capacity of about 1250 Mm3 .
The peak decade for construction of the main irrigation dams was 1960 to 1970 although several were constructed between 1970 and 1990. The break-up of the Former Soviet Union in 1991 resulted in a serious reduction in budget which basically stopped the maintenance activities of the irrigation infrastructure. This has resulted in the deterioration of the irrigation dams and related safety problems. In addition to the maintenance related safety issues, several dams suffer from design deficiencies, such as inadequate spillway capacities. A further concern is the stability of the dams under seismic conditions since the Republic of Armenia is prone to sizeable earthquakes (the Spitak earthquake in December 1988 had a magnitude of 6.9 resulted in about 25,000 victims).
Prior to 1982, the operation and maintenance of all reservoirs was the responsibility of regional Operation and Maintenance Enterprises (OME). For both institutional and budgetary reasons, these OMEs were unable to maintain the technical integrity of the dams. As a result, the Government decided in 1993 to establish a Dam Maintenance Enterprise (DME) to be responsible for the operation and maintenance of the 14 biggest (and potentially most dangerous) irrigation reservoirs. In 1998, responsibility for the fifty four other irrigation reservoirs was transferred to DME. This left the four biggest reservoirs (Akhuryan, Aparan, Azat, and Jogaz) under the responsibility of a separate specialized enterprise, while the Ketchut reservoir remains the responsibility of the Arpa-Sevan Tunnel regional OME. Technical inspections carried out in 1994 by international experts on 18 dams revealed that most of these dams pose a serious safety hazard to the populations downstream. Subsequent technical investigations revealed that, by international standards, most dams in Armenia do not meet acceptable safety norms.
Project components The project will have three components: (i) Rehabilitation of 20 primary irrigation dams; (ii) Dam safety sustainability; and (iii). Project management, which are described in detail in the present annex, following a presentation of the basic project criteria.
Emergency nature of the project
The safety conditions of the dams involved in the project are very serious, probably alarming. The reported deficiencies (i) insufficient stability of dam bodies; (ii) inadequate spillway capacities; (iii) inadequate bottom outlet capacities; (iv) leakage and internal erosion of dam bodies; (v) settlements of dam crests] represent the most dangerous limit states in the case histories of failures of embankment dams2. All dams included in the project are embankment dams.
2 Re: ICOLD(International Commission on LargeDams) Bulletin 99 "Dam Failures-Statistical Analysis" Page 22
Three significant dam failures have already occurred in Armenia as detailed in table 1.
Table 1: RECENT DAM FAILURES IN ARMENIA
Dam Type Failureyear Age of dam Cause offailure and consequences Agarak Earthfil 1974 20years Leakage, sloughing, crest settlement and overtopping. One villageflooded Marmarik Earthfill 1978 End of Excessive pore pressure build-up construction Reservoir empty. Artik Earthfill 1994 15 years Progressive failure of u/s slope and consequent overtopping. Two villages flooded, 2 casualties, many losses.
Considering the years in which the failures occurred and the number of dams existing in Armenia in those periods, the percentage of failures (number of failures/number of existing dams) can be estimated in the order of 2.1% (1974), 3.5% (1978) and 3.9% (1994). Two aspects are of concern:
(i) the percentage values show an increasing trend; (ii) the values are considerably higher than the value of 0.5% found by ICOLD3 worldwide for dams built after 1951; (iii) in all cases, a proper surveillance could have detected the incipient distress in time to avoid failure.
In addition to complete failures, several significant accidents have been reported at dam sites at an accelerated rate in very recent periods. Table 2 lists them.
Table 2: SIGNIFICANT ACCIDENTS ASSOCIATED WITH DAMS
Year Dam Age Location Of Description Of Accident | Consequences And RemedialActions (Years) Distress __ | 1989 Sovietashen 24 Dam body |Leakagefrom dam body at Spillway capacity increased by Ihigh level. demolition offront wall. Reservoir , I '. ~~~~~~~~~~~~~~lowered. [1991 Sarnarpur 24 Conduit IErosionof dam body inside Irrigation stopped 2 months. Repaired underneath conduit by backfilling conduit with concrete. I ______x______jdambody 'I _ _ 1991 Spandaryan 2 Pressure tunnel 1 Water outburst > 5Om3/s Town of Sisian partly flooded 1993 lKarnout 20 !Dam body Crest settlement 1.2 m Spillway capacity increased by demolition offront wali. Reservoir
1994 Aparan 28 Bottom outlet Steel lining dislocation loegateon stopped I mond tunnel because of poor steel- Rehabilitated under !RP. concrete contact 1996 Joghaz 30 Conduit Erosion of dam body inside Irrigation stopped. Repaired by underneath (conduit grouting. dam body 1997 David-Bek 7 Irrigation Outlet valve destroyed by Irrigation stopped I month. Repaired. intake Iice swelling inside steel pipelineI 1998 Hazat 22 Bottom outlet tErosion of in situ soil inside iRepaired by grouting. tunnel jtunnel, tunnel lining locally ldestroyed
Re: Bulletin99 (1995)"Dam Failures- Statistical Analysis" Page 23
1998 Sovietashen 33 (Spillway Soil erosion into drainage Underpinningby grouting operations. gallery underneath spillway IConcrete cover to eroded channel channel. Progressive lwaterway. settlement of channel lining on clayfoundations. I 1998 Aygezor 24 Conduit Erosion ofdam body inside Repaired by grouting. D/s population underneath Iconduit levacuatedfor I month. ,______dam body
Evidence suggests that other failures cannot be ruled out if the situation of dam safety in Armenia is allowed to remain out of control. Considering that no dam is reported to have a functioning instrumentation system and that around 460,000 people are at risk, the situatioki should be regarded as an emergency.
Matching Emergency with Lead Times
Dams are special structures, each of them requiring ad hoc consideration. Rehabilitation of dams which have been in operation for several years poses the additional difficulty of accessing design and operation records that are often lost or not available in sufficient detail. All this leads to relatively long lead times for the preparation and the implementation of rehabilitation works. At the other end, a dam safety program is, by definition, of an emergency nature and this is particularly true in the case of Armenia. Bank's experience with dam safety programs in other countries4 has shown that this disconnect is constantly present. Therefore matching emergency with the relatively long lead times required for rehabilitation works is a key issue in dam safety programs.
International experience has shown that this problem can be efficiently mitigated by the optimization of an implementationprogram based on a mix of both structural and non-structural measures.
Structural measures are the rehabilitation works proper. They include works on the dam body such as rehabilitation or enlargement of the water discharge facilities, and sealing. Non-structural dam safety measures include5: a) Instrumentation and monitoring devices b) Operation and Maintenance (O&M) Plan c) Emergency Preparedness Plan (EPP) d) Early Waming System e) Telecommunications
The technique used for optimizing the implementation program is the Risk Reduction Profile which is described later. Non-structural measures can be implemented more rapidly and at a much lower cost than the structural ones. The former are not a substitute for the latter, rather it is through the balancing of the two type of measures that a sound dam safety program is implemented. Non-structural measures also play a fundamental role in assuring sustainability of the rehabilitation works.
4 Notably India (Credit.....) and Indonesia (Loan. 5 In the ArmeniaDSP, servicebuildings, workshopsand emergencyenergy supplyhave also been includedunder the non-structural measures. Page 24
Structural measures
Most of the dams in Armenia are of the embankment type and Armneniais a seismically active territory. These two circumstances draw the attention on two main safety aspects6:
i. discharge capacity of the spillway7 , ii. embankment stability under dynamic loading.
Return period of the floods for sizing the spillways has been fixed in 1:10,000 years. This is considered acceptable in consideration of the fact that Armenian reservoirs are at their full capacity level for less than a month each year and much of the run-off is from snow melting.
Data on seismicity in Armenia are available over a period of about 2,000 years. The territory is divided in zones with values of horizontal ground acceleration (kH) varying from 0.2 to 0.4 g. There are three dam failures on record in Armenia, as shown in Table 1. It is important to note that the three dams were of the earthfill type and, in all cases, failure was unrelated to dynamic loading. Also none of the other dam- related accidents (Table 2), can be attributed to seismic actions.
In international practice, annual probabilities ofexceedance in the range of 1:1,000to 1:10,000 have been used. Such probabilities are selected in such a way to provide a safety level consistent with the global past performance of existing dams, acceptable to the regulator and the public. Based on the record period and on the past performance of dams, the kH values fixed by Armenian norms are believed to provide an adequate safety level.
Dynamic stability analysis are carried out by the Krasnikov method8, using kH values giveui by the norms. Cumulated deformation are compared with the available freeboard9. The analysis will also be carried out using higher kH values (next category in the norns) to assess sensitivity of associated deformations. Dams with higher incremental deformnationswill be equipped with strong motion, recording accelerographs. This will permit to ascertain the response of the structure during heavy shaking and review the design hypothesis correspondingly.
Risk reduction profile
As the basis for starting the process of upgrading the safety of dams, the rehabilitation requirements of 20 primary irrigation dams have been identified and prioritized. For this purpose the Risk Reduction Profile (RRP) approach has been used in which the overall risk of the whole portfolio of dams is progressively reduced towards an acceptable, final level. A summary picture of the RRP is presented in Figure 1.
On the vertical axis, the number of dams (DAMS) and the population at risk (PAR) are shown using different scales. The implementation period is represented on the horizontal axis.
The progressive reduction of the number of risky dams from the initial situation to the end of the project implementation is shown. The effectiveness of a program in improving dam safety levels can be judged by the shape of the RRP. Concave profiles are preferred in the sake of early safety improvement, but
6 Othersafety aspects addressed by structuralmeasures involve hydraulic steel structures and sealingof zonesof excessive leakage. 7 Overtoppingis, by large,the mostcritical failure mechanism for embankmentdams. ' The Krasnikovmethod is understoodto be equivalentto the Newmarkmethod which is commonlyused for this kindof analysisin internationalpractice. 9 The procedureis suitablein the absenceof earthquake-inducedliquefaction. This is the case for all dams,except Tavshuddam, for whicha liquefaction-potentialanalysis is warranted. Page25 lead times play against this aim. The effect of non-structural measures is evident by comparing the two profiles shown in Figure 1. The selected program (solid line), based on the anticipation of non-structural measures, present substantial advantages with respect to the rejected alternative. The latter addressed structural measures without prioritization of the non-structural ones. It must be pointed out that the selected implementation plan involves a substantial coordination effort of design activities in the initial period. To mitigate the risk of non-performance of PIU in this task, an international dam design specialist will provide technical assistance to PIU over a period of 5 months.
The left-most profile represents the progressive reduction of the total population at risk (PAR). The fast plunging of the profile reflects the choice to anticipate the rehabilitation of Aparan dam (PAR-I 85,000 people).
Figure 1: RISK REDUCTION PROFILE
1< . m ~--% _.~~ v~ era 19 ...... I klM.1rehabilitated
300000 11
200000' 10 . . , x X i. 14 13-8~~Selectedprogram: 1,...,. ,< 127 |Populationat Risk(PAR) -i X
IV1111PI I11111II ll i11IT 111-PIfl1i19 ' F.'VI' I I I I II I IV L1 X m 2003 200
Program sustainability and Performance Indicators
Sustainability of a successful dam safety programs depends on the ability to maintain the level of safety achieved at the end of the program. Component B of the DSP is entirely devoted to such a purpose. Four instruments have been used in the design of component B:
(a) dam safety plans, i.e. Operation and Maintenance Plan and Emergency Preparedness Plan; (b) an international expert on Dam Safety Programs will advise the PIU during the implementation of the project, he/she will make at least 2 visit each year; (c) strengthening of the Dam Management Enterprise (DME) to put it in the conditions to take over the O&M of the rehabilitated dams; (d) periodicall0 dam safety inspections by an independent technical Consultative Commission to be established by Government resolution.
0 Thefrequency of inspectionsdepends on the consequencecategory of the dam. Tentatively:very high = 5 years; high = 7 y; low= 10 y. Page 26
In addition to the above, provision has been made for DME to carry out surveys of reservoir sedimentation in order to assess the current active storage. Based on visual observations during reservoir drawdown, and on visual investigations of erosion, accumulation of sediments was recognized as a problem in at least 6 reservoirs (Tavshud, Khalavar, Sevaberd, Tavouch, Vardakar and Aigedzar). Procurement of equipment for survey of sediments is foreseen within the DSP. With such equipment, measurements can be made by surveillance staff on regular basis. Surveys will start at the above mentioned reservoirs and progressively extended to the others. The operational rules of the reservoirs should be revised taking into account the residual capacity (after deduction of the silted portion). Reservoir conservation measureslI may be identified during the implementation of the DSP and planned for future implementation.
Indicators will be used during supervision to monitor performance in DSP management. The same indicators should be retained by the DME for long term O&M of the dams.
Table 3. PERFORMANCE INDICATORS
Performanceindicator Measuredby Maintain an updated inventory and hazard classification of all Number of dams inspected with data 80 dams included in the inventory Establish a program of inspectionsand evaluations of all existing Program availability, supervision reports dams and on-going construction (20 dams) Implementation of rehabilitation works on 20 irrigation dams. Progress of works compared to construction program Risk Reduction Profile Comparison of planned and achieved profile Maintain O&M Plans including documentation of rehabilitation Number of O&Mplans available. activities (20 dams). Maintain a training and awarenessprogram for operation and Number of dams with trained staff surveillance personnel (20 dams). Maintain Emergency Preparedness Plans (20 dams) Number of EPPs prepared.
Project Component A - Rehabilitation of 20 Primary Irrigation Dams ($ 22 million, including contingencies)
This component will support repair works on critical parts affecting dam safety. 20 primary irrigationi dams, listed in Table 4, will be rehabilitated including: design and supervision, field tests, civil works, hydraulic steel structures. All the 20 dams are of the embankment type (either earthfill or rockfill).
Table 4: MAIN IRRIGATION DAMS
Reservoir Catchment Population Dam Volume Irrigated Area Hazard Area at Risk Height Category 2 3 _____ (Km ) (x 1000) (m) (Mm ) (ha x 1, 000) I Arpilich 220 6.2 16 105 19 High 2 Aygedzor 152 0.4 36 3.55 0.9 High 3 Khalavar 40 1.9 31 5.5 0.6 High 4 Azat 526 88.2 77 70 2.7 High 5 Vardakar 363 11.6 16.2 5 1.1 High 6 Tavshud 17 1.6 37 6 1.5 Very High 7 Sovietashen 31 0.6 42 1.4 0.4 Very High 8 David-Beck 56 0.7 41.2 3.2 0.6 Very High 9 Sevaberd 64 8.4 42 6 1.2 High
Interventions in the catchment area, debris dams, by-passing, flushing, dredging, etc. Page 27
10 Aparan 6S6 185.6 50.6 90 7.5 Medium 11 Karnout 93 11.5 34.5 22.62 7 High 12 Mantash 21 14.6 30.4 8.2 3. 7 Medium 13 Sarnskhpiur 68 7.7 29.2 1.1 High 14 Hakhoum 211 0.3 46 12 2.4 High 15 Tavoush 154 0.2 42.4 5 1.2 High 16 Gegardalich 2 2.7 13.8 3.4 0.2 Very High 17 Gegarkounik2 0.7 2.9 16.5 0.33 0.1 High 18 Kakavadzor2 3 0.7 33.4 1 0.5 High 19 W. Bazmaberd 0.5 0.7 8 0.22 0.1 High 20 Her-Her 160 8.0 71.5 26 1.1 High TOTALS 354.55 2.9 Note: Populationfigures exclude persons living outside Armenia
The method used by PIU to arrive at a risk classification of the dams is considered satisfactory and representative of the national appreciation of dam safety. The nature of the dam's foundations is taken into account (in terms of strength parameters) in the calculation of the factor of safety of the dam which is one of the classification parameters. It must be pointed out that there yet are no internationally recognized risk classification methods which can be considered comprehensivel2 . An elementary method, based on 4 parameters only, has been proposed by ICOLD in relation to the selection of seismic parameters for large dams13 (re: Bulletin 72).
Needed repairs are classified in four categories: (i) upstream protection works; (ii) spillway structural repairs, (iii) leakage reduction; and (iv) irrigation/bottom outlet repair. Within each category, repair works were allocated a priority ranking from I to 4. Because of resource constraints, only works ranked as priority I and 2 along with some of priority 3 have been included in the project. Cost estimates for these high priority works are given in Table 5. At eleven of the dams (Arpilich, Khalavar, Vardakar, Sovietashen, David Beck, Aparan, Kamout, Mantash, Sarnakhpiur, Kakavadzor2 and Her-Her ) provision is made for increasing the capacity of the spillway to allow the safe passage of the flood with a return period of 10,000 years. At seven of the dams (Aparan, Tavshud, Sovietashen, Kamout, Sarnakhpiur, Gegardalich and W.Bazmaberd) provision is made for improving the stability of the dams under earthquake loading.
Table 5: REHABILITATION WORKS AT MAIN IRRIGATION DAMS (INCLUDING DESIGN - EXCLUDING SAFETY EQUIPMENT)
Reservoir Rehabilitation Works Cost Estimate (incL Contingencies) USS I Arpilich Increase spillway capacity and reinstate M&E equipment 381,181 2 Aygedzor Repair irrigation outlet and reinstate M&E equipment 1,170,545 3 Khalavar Increase spillway capacity and reinstate M&E equipment 894,648 4 Azat Reduce leakage and reinstate M&E Equipment 720,057 5 Vardakar Increase spillway capacity and reinstate M&E equipment 1,290,241 6 Tavshud Repairs to dam and spillway and M&E equipment 3,154,137 7 Sovietashen Increase spillway capacity, rectify leakage, repair outlet and 1,912,707 ______repair M&E equipment 8 David-Beck Increase spillway capacity and reinstate M&E equipment 1,599,396 9 Sevaberd Reinstate M&E equipment and repair irrigation outlet 596,089 10 Aparan Increase spillway capacity and repair spillway and outlet 1,705,540 11 Karnout Increase spillway capacity and repair dam 884,868
22 However,an ICOLDCommittee is at work on the subjectand its recommendationsare expectedwithin 1999. '3 Bulletin72 (1989)"Selecting seismic parameters for large dams" Page 28
12 Mantash Increase spillway capacity 805,059 13 Sarnskhpiur Improve dam stability and increase spillway capacity 1,056,367 14 Hakhoum Rectify leakage, repair outlet and reinstate M&E plant 2,147,424 15 Tavoush Repair irrigation outlet and M&Eplant 526,495 16 Gegardalich Repair dam and improve stability 1,044,181 17 Gegarkounik2 Repair dam and rectify lea/cage 332,489 18 Kakavadzor2 Increase spillway capacity and rectify leakage 239,462 19 W. Bazmaberd Improve dam stability 224,633 20 Her-Her Increase spillway capacity and reinstate M&E equipment 1,309,720 =___ TOTAL 21,995,239
Project Component B - Dam Safety Sustainability ( US S 7.2 million including contingencies)
Bl. Dam Safety Plans for O&M and Emergency Preparedness (EPP) ( US S 0.2 million including contingencies)
This sub-component refers to two, strictly non-structural.,safety measures: A plan (the O&M Plan) shall be prepared, documenting operation, maintenance and surveillance for each of the 20 dams. The plan shall contain suitable and sufficient information to allow operators to operate the dam in a safe manner, maintain it in a safe condition, and monitor its performance well enough to provide early warnings of any distress. The plan shall include, in a specific section, the Instrumentation Plan. The O&M plan shall be implemented, followed, and updated at appropriate intervals.
An Emergency Preparedness Plan (EPP) shall be prepared, tested, issued and maintained for any darn whose failure could be expected to result in loss of life as well as for any dam for which advanced warning would reduce upstream or downstream damage. A notification process should be initiated, as specified in the EPP, immediately upon finding a hazardous condition that could lead to a dam breach, or upon discovering a potential dam breach or dam breach in progress. The dam owner, or operator shall assess whether dam breach warnings should be issued directly to inhabitants in areas immediately downstream of the dam, due to the short period of time before the anticipated arrival of a flood wave. Where preventive actions are needed and feasible, these actions shall be initiated, as appropriate, to prevent failure or to limit damages where failure is inevitable.
B2. Dam Safety Site Installations (US $ 1.7 million including contingencies)
Under this headings those site installations are included, which are necessary to make the dam safety plans operative. Although they could not strictly be classified as non-structural, it is general practice to include them under such category. This is justified by the fact that the associated costs are far lower than those for the rehabilitation works proper.
Dam safety site installations include:
1. Instruments and monitoring devices to keep dam behavior under control during operation 2. Early warning systems at selected dams, composed of danger signals (sirens) to be activated following a dam breach warning; table 6 shows the number of sirens to be installed, the list has been agreed with the Armenian Emergency Management Agency (EMA) 14.
'4 EMAhas the samestatus of a ministryand, as such, it reportsdirectly to the primeminister. The function of EMA,together with those of otherdifferent actors (local governments, municipalities, minister of interior),is describedin the law 1998/265on "Civil protectionin case of emergencysituation" approved by the Parliamienton 2 December1998. The lawclassifies dam-related hazards as "technologicalcatastrophes", as opposedto "natural catastrophes". Page 29
3. Energy supply, in the case of emergency, will be secured by building-in redundancy in the system; stand-by generators will be installed and connected to the system. 4. Small buildings for generators, watchman houses and workshops. 5. Short wave radio stations.
Table 6: EARLY WARNING SYSTEMS (EWS)
Dam fPopulationat risk 1Numberof sirens Aparan - 185631 88 Azat 88186 44 Mantash 14654 47 Karnut 11467 _ 6
Sarnapur i 7722 _ 4
Sewaberd 8407 ! __-4 Her-Her 793 4 Arpalich 6250 3 Gegarkun r 2900 t 3 Gegardalich -6-02650 - Kalawar 1871 i 2 Vardakar 11590 2 Tawshut 1564 1 | Sowetashen 600 11
Note: The list includes 14 of the 20 dams. According to EMA, there is no need for EWS downstream of Bazmabert and Kakav dams because population is low and mostly not permanent in the potential inundation area. In the case of Ahum, Tawush, Aygedzor and David-Beck, it is not possible to install EWS because those dams are located on the border with Azerbaijan.
B3. Capacity Building: Strengthening the institutional capacity of the Dam Maintenance Enterprise (US $3 million including contingencies)
The project provides for the operation and maintenance of rehabilitated dams. The incremental O&M costs include DME incremental staff, central and regional offices, transport, and utilities. In view of Government current budgetary constraints, and to ensure timely performance of O&M activities, funding will be provided for O&M under the IDA credit on a sliding scale, thus ensuring that full O&M requirements are reflected in the Government budget by the last year of the project period.
The Dam Maintenance Enterprise 'Jrambar' will be responsible for the 20 primary irrigation dams being rehabilitated under the project. It will also assume direct responsibility for the monitoring of the 54 remaining irrigation dams, and will coordinate the monitoring of the other dams with the agencies operating them. To enable DME to assume this responsibility, the project will provide for DME to acquire the necessary survey, communication, and monitoring equipment, as well as the necessary plant and vehicles to ensure that it has the capacity to remain fully informed about the current safety status of all dams, and that it has the means to intervene in case of emergency.
In addition to this, provision has been made, in the project budget, for the realization of 2 or 3 pilot mini- hydro power plants 1 5 (installed capacity of a few lOOs kW). Such facilities generate income or, at least, reduce costs associated with power supply from the grid for the operation of the dams.
15A study on the hydropower potential in Armenia was carried out for the Ministry of Energy by Lahameyer Int. (Germany) and a national consultant in 1993. The study identified about 350 possible sites for small hydropower plants (less than 3 MW) and 6 for large plants (the largest being about 100 MW). Page 30
B4. Investigations and Emergency Interventions on 54 Irrigation Dams and 6 Energy Dams (US $2.5 million including contingencies)
This component will support safety investigations into all remaining dams in Armenia. The 54 remaining irrigation dams16 are listed in Table 7. The first 3 dams (Joghaz,Akurian and Kechout) were originally included in the rehabilitation list of the DSP. They have subsequently been removed based on the assessment of project preparedness and their relatively higher safety conditions. The rest of the dams are generally of smaller size than the main irrigation dams. They range in height from 1.5 meters to 20 meters. The impounded reservoirs range in volume from 10,000 cubic meters to 5.4 million cubic meters. Many of these dams have one or more villages located downstream. In nearly all cases, it is thought that loss of life would result from failure of any of these dams. Based on the limited infornation available, most are thought to be in poor conditions. Because of lack of resources, however, no allocation is included under this project for the rehabilitation of these dams. Instead, provision is made for their close monitoring, along with detailed technical investigations to clarify the safety state of each dam. In addition, a limited provision is made to create an emergency fund to allow DME to intervene in cases where further deterioration of any of these dams poses an imminent threat to human life.
Table 7: REMAINING IRRIGATION DAMS
Reservoir Reservoir Dam name Height Capacity Dam name Height (m) Capacity (Mm3)
I ______(m) (Mm3) I Joghaz 65 4S 28 Marmarik 6.0 0.40 2 Akhurian 59 525 29 Ors 6.3 0.10 3 Kechout 48 23 30 Karahundj 6.0 1.30 4 Karagloukh 20.0 0.18 31 Landjaghbiur-2 5.9 0.12 5 Gndevaz 19.0 0.20 32 Irind 5.6 0.06 6 Shenik 18.0 0.80 33 Djili-litch 5.5 0.70 7 Aghavnadzor 18.0 0.30 34 Ashnak-l 5.2 0.11 8 N. Sasnashen 17.4 1.20 35 N. Talin 5.0 0.04 9 Landjaghbiur-2 16.7 0.40 36 V. Talin-2 5.0 0.03 10 Gegharkounik-l 14.5 0.30 37 Aknalitch 4.5 3.90 11 Djadjour 13.0 0.30 38 V. Sasnashen 4.5 0.06 12 Tsilkar 13.0 1.20 39 Bazmaberd 4.5 0.02 13 Katnaghbiur-l 10.4 0.40 40 Aragatsh 4.0 0.59 14 Aghakchi 10.3 0.09 41 Mastara 4.0 0.08 15 Kosh 9.0 0.50 42 Katnaghbiur-2 4.0 0.01 16 Agarak 8.0 0.20 43 Kakavadzor-I 3.8 0.02 17 Talish 8.0 0.05 44 Martiros-2 3.5 0.04 18 Varisrouni 8.0 0.09 45 Saralitch 3.0 0.21 19 V. Talin-1 7.5 0.30 46 Eghnik -3.0 0.01 20 Hatsashen 7.3 1.10 47 Khashtarak-I 2.5 0.12 21 Metsavan 7.0 5.40 48 Khashtarak-2 2.0 0.08 22 Brnakot 7.0 0.90 49 V Karmir 2.0 0.04 23 Ashnak-2 7.0 0.30 50 Artavan 2.0 0.03 24 Vosketas 7.0 0.11 51 Aghkghlou 1.5 0.01 25 Davidashen 7.0 0.30 52 Martiros-l 1.5 0.12 26 Hovit 7.0 0.30 53 Gazigel 1.5 0.21 27 Shgharshik 7.0 0.10 54 Marmarik 60.0 22.00 Note: Marmarik is presently kept empty because of high pore pressures and possible cracking of the core.
16 Out of these,3 damshave dual purpose(irrigation and domesticwater supply), another one is for environmental (lake Sevanlevels) and recreationalpurposes. Page 31
The sub-component also includes an allocation of $ 0.2 million to support technical investigations on the 6 Hydropower Dams for which details are given in Table 8. These dams were built betweeln 1953 and 1989.
Table 8: ENERGY DAMS
iCatchmenJarea Height [ Storage capacit | Reservoir area (km-') (in) ('Mm3) (/7a) Spandaryan 5507 83 | '5 7 1025 Achparin .60 !4.5 5.6 170 Argel 12?(0 24.8 ! I I|5
Angechakot _8 35 3 4 _54 Tolors 380 69 l 96,Y 480 .Shamh 1600 41 13.6 112 |TOT.4L 3717.4
Project Component C - Project Management (S I million including contlingen7cies)
This component will provide for the incremental operating cost of the existing Project Implementation Unit throughout the duration of the Project. Page 32
Annex 3
DamnSaeftv Project Estimated Project (Cost.
Project Component Local Foreign Total ------US S million------
Rehabilitation of 20 primary irriggationdams 8.8 10.4 18.5 Dam Safety Suslainability 2.5 4.0 6.5 Project management 0.4 0.5 0.9
Total Baseline Cost il 14.9 25.9 Physical Contingencies 1.4 1.9 3.3 Price Contingencies 0.1 1.0 1.1
Total Project Cost 12.5 17.8 30.3 Page 33
Annex 4
Dam Safety Project Economic Analysis
Benefits
(a) Severe safety risk reduced for 360,000 people living downstream of 20 highly risky dams. The number of population at risk per dam varies from 1,000 to 157,000.
(b) Risk reduced for potential flooding and loss of 34% of total irrigated area in Armenia, through the guaranteeing of water supply to an area of 68,000 hectares. which produces annual farm net income of $35 million.
(c) Risk reduced of potential destruction of 78,000 homes and damage to over $2 billion worth of roads, irrigation structures, and other public infrastructure and enterprises (especially the inundation area of the Azat dam with over $800 million in infrastructure at risk).
Cost-Benefit Indicators:
Base level of economic rate of return (ERR) of 32%, with sensitivity analysis showing a range of values from 15% to 36%. Counting potential losses only of agricultural income and household assets, the values of the ERR range from 14-24%. See Table XX in this Annex.
The methodology usedfor estimating the ERR is as follows:
The potential losses of farm net income are derived using the average net income data revealed in the 1998 study executed by the Bank "Armenia's Private Agriculture: 1998 Farm Survey" and the value of 49,000 hectares of agricultural area which would loss access to water from dams and therefore be unable to withstand the summer period, thereby going out of agricultural production. Roughly 19,000 of the 68,000 hectares of agricultural land in the inundation area of the 20 dams covered under the project have access to alternative water sources (though they would not be completely supplementary). With average annual net farm income per hectare of $515. the total potential losses associated with 49,000 hectares of agricultural area going out of production are $25 million, or $500 million over the twenty year period considered under the project.
Potential losses of household assets were estimated by taking the average size of rural households (100 sq. meters) at a replacement cost of $250 per sq. meter, adding another roughly $5000 of household and farm assets (consumer durables, livestock, etc.). Losses from flooding were taken at 60% of the household total of $30,000 in dwelling and other assets, and then multiplied by the number of households expected to be affected in each dam's inundation area.
Potential losses of non-household assets was estimated by taking an inventory of the various structures in each dam's inundation zone and estimating the replacement cost of roads and irrigation structures (per km) and other infrastructure. Given the rough estimate that was reached, a 30% damage rate was used for estimating the potential value of losses from dam breaks. This is reasonable, as structures such as roads and canals which would be damaged are likely to be damaged to a degree greater than 30% of replacement value. Page 34
The potential losses were summed across all dam inundation areas for the three categories and then integrated into a 20 year calculation considering benefits of foregoing these losses by reducing the rates of expected dam failure. The reductions of dam failure rates are expected to be on the order of 90%, from 7.5% to .75%, for the 20 year period. This amounts to reducing the dam failure rate for a single dam in a singe year by an order of magnitude, but to a rate which is still above the internationally observed rate of 0.5% for dams built since 1951 ("Dam Failures Statistical Analysis", International Commission for Large Dams, Bulletin 99, 1995).
When the reduction of the dam failure rate is distributed over the twenty years and multiplied out by the three different types of losses, a stream of benefits is generated to compare with the stream of project investments. The base level of ERR for the project is 32%, using an average dam failure rate of 7.5%, which corresponds to a reduction of 6.75% in the dam failure rate to 0.75% owing to project investments. Sensitivity analysis shows that for an average dam failure rate of 5%, the ERR is 25%, and even if all benefits from foregoing damage to non-household assets are excluded, the ERR still reaches a level of 13%. If the average dam failure rate is as high as 10%, then the ERR reaches 36%. Sensitivity analysis performed also shows that the threshold level of ERR of 15% is met when the probability of dam break in the system over twenty years is set at 3.6% (and when the foregone damages to non-household assets are included in the benefit stream). This 3.6% rate is below historically observed levels. Page 35
Republic of Armenia - Dam Safety Project: Economic Crop Budgets (1998 constant drams and $US)
Irrigated Wheat per hectare basis Total INCOME quantity price Drams Expected yield (kg/ha) 2,520 Economic Import Parity Farmgate price/kg 80 Income (Dram/ha) 201,600 EXPENDITURES Inputs Seed (kg/ha x price/kg) 200 125 25,000 Equiv. of-Urea,KCL,TSP(kg/ha x price/kg) 175 142 24,850 Pesticides(kg/ha x price/kg) 2 3,500 7,000 Mechanized Work (rental basis) Ploughing 15,000 Cultivation 7,500 Levelling 7,000 Ridging 7,000 Combining 15,000 Fuel costs (0.15 L/hp/hr x 82hp x 10hrs) 123 2002 24,600 On-farmtransport and Miscellaneous [|20,000 Total Expenditures 76% 152,950
GROSS MARGIN (excluding labor, cost of 24% 48,650 water & taxes) USD 122 equiv.
Irrigated Vegetables per hectare basis Total INCOME quantity price Drams Expectedyield (kg/ha) 9,760 Estimated Average Farrngate price/kg 50 Income (Dram/ha) 488,000 EXPENDITURES Inputs Seed (kg/hax price/kg) [77 1 5000 5,000 Equiv. of-Urea,KCL,TSP(kg/ha x price/kg) 300 142 42,600 Pesticides (kg/ha x price/kg) 7 3,500 24,500 Mechanized Work Ploughing (rental) 5,0001 Cultivation (rental) | ,00| Fuel costs (0.15 L/hp/hr x 82hp x 7hrs) | 86 200 17,200 On-farmnMisc. (spraying, transport etc) F150,000 Total Expenditures 54% 261,800
GROSS MARGIN (excluding labor, cost of 46% 226,200 water & taxes) USD 566 equiv. Page 36
Irrigated Forage Crops per hectare basis Total INCOME quantity price Drams Expected yield - hay equivalent (kg/ha) 8,000 Estimated Average Farmgate price/kg 18 Income (Dram/ha) 144,000 EXPENDITURES Inputs Seed (kg/ha x price/kg) 351 200 7,000 Equiv. of-Urea,KCL,TSP(kg/ha x price/kg) 100| 1421 14,200 Mechanized Work Mowing and Raking 18,000 Baling 35,000 Baling Twine 10,000 On-farm transport 45,000 Total Expenditures 90% 129,200
GROSS MARGIN (excluding labor, cost of 10% 14,800 water & taxes) USD 37 equiv.
Irrigated Fruit per hectare basis Total INCOME quantity price Drams Expected yield (kg/ha) 10,155 Estimated Average Farmgate price/kg 90 Income (Dram/ha) 913,950
EXPENDITURES Inputs Planting materials (replanting) 3,0001 Equiv. of-Urea,KCL.TSP(kg/ha x price/kg) | 3001 142| 42,600 Pesticides (kg/ha x price/kg) | 71 3,500 24,500 Mechanized Work Spraying I I75,000 On-farm transport and Miscellaneous | 0,0pj Total Expenditures 25% 225,100
GROSS MARGIN (excluding labor, cost of 75% 688,850 water & taxes) USD 1,722 equiv. Irrigated Vineyard (grapes) per hectare basis Total INCOME quantity price Drams Expected yield (kg/ha) 4,800 Estimated Average Farmgate price/kg 72 Income (Dram/ha) 345,600 EXPENDITURES Inputs Planting materials 3,000 Equiv. of-Urea,KCL,TSP(kg/ha x price/kg) 1 3001 142 42,600 Page 37
Pesticides (kg/ha x price/kg) 71 3,500 24,500 Mechanized Work Spraying 75,000 On-farm transport and Miscellaneous 70.0 Total Expenditures 62% 215.100
GROSS MARGIN (excluding labor, cost of 38% 130,500 water & taxes) USD 326 equiv.
Republic of Armenia Dam Safety Project Major Assumptions for Economic Cost and Benefit Analysis
Gross farmgate Base Cropping Pattern Margins under Blockade from crop price Yield budgets USD USD/ton ton/ha Wheat 122 2001 2.5 30% Vegetables 566 125 9.8 26% Forage 37 45 8.0 17% Fruit 1,722 225 10.2 17% Grapes 326 1801 4.8 10% 100% Average Gross Margin Per Hectare $ 515
300 This parameter reflects that 30% of the value of non-farm assets (roads, irrigation structures, and other infrastructure) that would be lost as a result of the dam breaks and consequent flooding
$ This parameter reflects the costs of repair or replacement for the 60% of 18,144 homes and household assets in households damaged as a result of the dam breaks and consequent flooding
4.6 This is the average number of inhabitants per household Page 38
Summary of Potential Losses from Dam Breaks - Agricultural Areas, Associated Incomes, Homes and Household Assets, and Other Non-Household Assets
PotentialAnnual Potential Potential Poltential I ost Farm i Number if l.ossesof I.ossesfrom llectaresl.ost Net Inconme Households hlouseholds Other Assets Damaged lDams (ThousandSt Hlhotsarudsi t I housand S) (ihousand S) Arpilich 19 S 1.348 S $ 9,789 24.455 360 Aygedzor 0.9 S .391 S S 464 25,244 633 Khalavar 0.6 S 0.413 $ $ 309 7,494 1.881 Azat 2.7 S 19.174 $ $ 1.391 347.891 259.500 Vardakar 1.! s 2.522 S $ 567 45,754 450 Tavshud 1.5 S 0.348 $ $ 773 6,311 - Sovietashen 0.4 $ 0.130 $ S 206 2.367 60 David-Beck 0.6 $ 0.152 $ $ 309 2,761 27,210 Sevaberd 1.2 $ 1.826 $ $ 618 33,133 3,420 Aparan 3.5 $ 40.348 $ S 1,803 732,071 429,900 Karnout 7 $ 2.500 $ $ 3,606 45,360 24,060 Mantash 3.7 $ 3.174 $ $ 1,906 57,587 30,000 Sarhakhpiur I.] s 1.674 $ 567 30,371 Hakhoum 2.4 $ 0.065 $ $ 1,236 1,183 120 Tavoush 1.2 $ 0.043 S $ 618 789 810 Gegardalich 0.2 $ 0.587 $ $ 103 10,650 3,090 Gegharkounik2 0.1 $ 0.587 $ $ 52 10,650 222 Kakavadzor2 0.5 $ 0.152 $ $ 258 2,761 420 W. Bazmaberd 0.1 $ 0.152 S $ 52 2,761 180 Her-Her 1.1 $ 1.739 S $ 567 31,555 30,000 Totals 48.9 $ 78.3 $ $ 25,193 1,421,149 812,256 Page 39
Reduction of Losses from Investments under the Dam Safety Project - Calculations of Net Benefits and Economic Rates of Return
Reduction of Reduction of Reduction of Reduction of 4% Probability Loss of Loss of Losses of Other Investment Net Benefits Costs of Loss Farm Income hlousehold Assets Assets Damaged 2000 0.23% $ $ $ $ $ - - - 6,700 (6,700) 2001 0.23% $ $ $ S $ 59 3.328 1.902 7.200 (1,911) 2002 0.24% $ $ $ $ $ 120 3,463 1,979 5,700 (137) 2003 0.25% $ $ $ $ $ 184 3.604 2,060 5,700 148 2004 0.26% $ s $ $ $ 251 3,751 2,144 5,100 1,045 2005 0.27% $ $ $ $ 320 3,903 2,231 6,454 2006 0.29% $ $ $ $ 392 4,062 2,322 6,775 2007 0.30% $ $ $ $ 467 4,227 2,416 7,110 2008 0.31% S $ $ $ 545 4,399 2,514 7,458 2009 0.32% $ $ $ $ 626 4,578 2,617 7,821 2010 0.34% $ $ $ $ 710 4.764 2,723 8,198 2011 0.35% $ $ $ $ 798 4,958 2,834 8,590 2012 0.36% $ $ $ $ 890 5,160 2,949 8,999 2013 0.38% $ $ $ $ 985 5,370 3,069 9,424 2014 0.39% $ $ $ $ 1,084 5,588 3,194 9,866 2015 0.41% $ $ $ $ 1,187 5,815 3,324 10,326 2016 0.43% $ $ $ $ 1,294 6,052 3,459 10,805 2017 0.44% $ $ $ $ 1,406 6,298 3,600 11,304 2018 0.46% $ $ $ $ 1,522 6,554 3,746 11,823 2019 0.48% $ $ $ $ 1,643 6,821 3,899 12,363 6.75% $ $ $ ERR 32% 14,485 92,695 52,980
NPV $25,234 Page 40
Summary of Sensitivity House and Farm Losses Only House, Farm, and 30% of Other Analysis Considered Assets Lost ERR NPV ERR NPV
Current Dam Break 113% 1283 25% 13302 Probability - 5% over 20 Years
Probability of Dam Break 19% 9128 32% 25234 - 7.5% over 20 Years
Probability of Dam Break - 23% 16358 36% 36251 10% over 20 Years
With 3.6% Dam Break probability, the ERR minimum threshold of 15% is met when losses of non-farm assets are included with household and farm income losses. This level is below the historical level observed over the past fortv years in Armenia (which is 5% and increasing). Page 41
Annex 5
Dam Safety Project Financial Summary
Project Years 1-5 (US$ million. PY October] to September 30)
Implementation Period PYI PY2 PY3 PY4 PY5 Project Costs Investment Costs 6.6 7.1 5.5 5.3 4. 7 Recurrent Costs 0.0 0.1 0.2 0.4 0.4 Total 6.6 7.2 5.7 5.7 5.1
Financing Sources IDA 5.9 6.5 5.1 4.9 4.3 Government 0 7 0.7 0.6 0.8 0.8 Total 6.6 7.2 5.7 5.7 5.1 Page 42
Annex 6
Dam Safety Project Procurement and Disbursement Arrangements
Procurement
Procurement methods.
Procurement of works and goods would be in accordance with the "Guidelines - Procurement under IBRD Loans and IDA Credits," (January 1995, revised January, 1999). The Borrower would use the Bank's standard bidding documents for goods and works for ICB contracts and ECA regional sample NCB documents for NCB and Minor works. Selection of consultants would be in accordance with the "Guidelines - Selection and Employment of Consultants by World Bank Borrowers," (January 1997, revised January 1999). For the consulting assignments the Borrower would use the relevant World Bank standard forms of contract.
Implementation:
The responsibility for all procurement will rest with the PIU presently in charge of the Irrigation Rehabilitation Project in the Ministry of Agriculture. The Procurement Unit at the PIU is headed by a Procurement Specialist who is assisted by two junior procurement engineers. A formal assessment of the PIU procurement capacity was undertaken by the Bank. The major findings and action plan were discussed with Government and were incorporated in the Project Implementation Plan. While the present procurement capacity at the PIU was adequate to meet the initial startup procurement activities of the Dam Safety Project, it will be necessary to add an additional procurement specialist to the Procurement Unit to cope with the additional volume of procurement work resulting from the proposed project. The new procurement specialist should have at least 2-3 years of experience in Bank-financed procurement. The new procurement specialist should be selected as soon as possible (before project start-up). In addition the new specialist along with the existing two junior specialists should receive training in Bank procurement procedures. Information regarding procurement administration would be collected and recorded to serve as the basis for quarterly progress reportsl7 to be submitted to the IDA. These reports should indicate: (i) revised cost estimates for individual contracts and for the total project; (ii) revised timing of procurement actions and completion time; (iii) an updated procurement plan; and (iv) compliance with aggregate limits on specified methods of procurement.
Local Design and Construction Capacity and Capability.
A review of the engineering consulting industry, particularly in the field of hydraulic structures, indicates generally acceptable technical capacity and capability in the country to meet project requirements. However, the design organizations somewhat lack the management skills needed to organize and coordinate design work to meet the requirements of the tight project procurement schedule. This deficiency may hamper the timely delivery of the designs for undertaking the most urgent rehabilitation works during the first year of the dam safety program. To bridge this gap, the services of an international design management specialist are required to assist PIU in overseeing the design activities and to provide on the job training over the first phase of design activity. It is expected that after this on-the-job training, the design management capacity will reach acceptable standards. Regarding the construction industry, the
'' Semi-annualreports after two years. Page 43
Bank assessment indicates generally adequate capacity and capability for handling small value civil works contracts of up to $1.0 million each. The General Procurement Notice has been published in the UN Development Business of 30 April, 1999. A Notice for Pre-qualification of Contractors has been published in the UN Development Business of 18 May. 1999. A project launch workshop is planned for September 1999.
Procurement arrangements:
These are summarized in tables A and B. The Procurement Plan is presented in table C Details are as follows:
Works: Contracts for dam safety works valued at above US$0.518 million and above per contract would be procured through ICB for an estimated aggregate amount of US$20.3 million. Contracts valued at or below US$0.5 million would be procured through NCB up to an aggregate amount of US$2.2 million. Contractors for civil works both under ICB and NCB procedures would be pre-qualified in accordance with Bank Guidelines. The domestic contractors will be eligible for a 7 1/2% domestic preference under the ICB procurement of civil works in accordance with Bank Guidelines. Works were grouped into larger packages to the extent feasible to take advantage of geographical proximity and implementation schedules.
Goods: ICB procedures would be used for contracts valued at US$200.00019 and higher (procurement packages for maintenance equipment and machinery) up to an aggregate amount of US$2.8 million. International Shopping procedure (IS) will be used for contracts (vehicles, snowmobiles, and equipment to be financed under ERF) estimated to cost less than US$200,000 up to an aggregate amount of US$600,000. National shopping (NS) would be used for small items, estimated to cost less than US$50,000 per contract, up to an aggregate amount of US$50,000 on the basis of at least three quotations from at least three qualified suppliers.
Consultant Services (US$2.7 Million): The proposed IDA Credit would finance (i) technical assistance and consulting services for design work related to rehabilitation work and safety equipment installation, dam safety studies, supervision of civil works, audit services; (ii) TA for design coordination and management and preparation of technical specifications for civil works; and (iii) the services of an international dam specialist to periodically provide advisory services to the PIU during the life of the project on dam safety aspects. The procurement of TA and consulting services would be in conformity with the Bank's Consulting Guidelines. Procurement methods for consulting packages are summarized below:
(i) QCBS ($2.3 Million): This method will be used to contract the services for design work on the technical investigations on all dams and the audit services for a period of five years. For contracts estimated to cost less than $200,000 each, the short-listing may be restricted to qualified eligible Armenian consulting firms and eligible design institutes.
(ii) Individual Consultants(US$0.5 Million): The services for design management and coordination, and the services of an international dam specialist will be contracted on an individual basis in view of their short duration and specialized nature. The total aggregate amount for the two consultants would be about $239,000. In addition, the services of a Sociologist would be contracted for one year on an intermittent basis (US$2,000). the PIU would also require the services of additional consultants to meet the incremental staff requirements resulting from the Dam Safety Project. The total aggregate for these
18 If afterone year of operation,the numberof foreignfirns participatingin the biddingprocess is non-existing, then the Bankwill considerincreasing the threshholdto US$1.0million. '9 Set at this high leveldue to the emergencynature of the project. Page 44 consultants would be in the order of $215,000, including an additional procurement specialist, a financial management specialist and two engineers. The selection of the individual consultants shall be based on comparison of qualifications among those expressing interest in the assignment. The selection of the international experts shall be based on consultant's qualifications and on the basis of comparison of at least three CVs.
(iii) Training (US$1 16,000):The IDA credit would also finance some training activities, including study tours. These activities will be procured in accordance with Bank Consultant Guidelines. A detailed training program will be submitted by the Borrower to IDA for its prior approval.
Emergency Repair Fund ($2.0 million): This fund is being createdfor the following purposes:
(i) Emergency interventions which may become necessary as a result of the investigation work on the 60 dams, which are not scheduled for rehabilitation under the project. For each case the Borrower will obtain prior IDA approval before drawing upon this fund.
(ii) To finance two or three pilot mini-hydro stations at a total cost of about $100,000. The procurement of goods, works, and services, for the proposed pilot stations would be governed by the same procurement and prior review thresholds as for goods, civil works and consulting services for the Dam Safety Project. The Borrower shall submit to the IDA a detailed procurement plan before undertaking the work for the two pilot mini-hydro stations
Civil works under the Emergency Repair Fund valued at above US$ 50,000 would be procured through NCB procedures. Works estimated to cost less than US$ 50,000 would be procured through Minor Works procedure. Equipment procured under the Emergency Fund is expected to be procured under IS procedure.
Incremental Operating Costs($1.2 million): The IDA Credit would finance on declining basis the incremental operating costs for the Dam Maintenance Agency (DME), an organization which will eventually assume the responsibility for overseeing the dam maintenance in Armenia, and the Project PIU. The incremental operating costs include fuel, utilities, supplies, and staff salaries of DME from the date this organization takes over responsibility for rehabilitated dams. These costs will be reimbursed on the basis of annual budgets to be approved by IDA
Prior Review by IDA:
The following procurement documentation will be subject to prior IDA review:
(i) Goods and Civil Works: All ICB contracts for goods and works; all NCB contracts for civil works estimated to cost $200,000 and more, including bidding documents, evaluation reports; and first two contracts and bidding documents for civil works under NCB, and first two contracts for goods under iS .
(ii) With regard to services contracts, prior IDA review would be required for all Terms of Reference (TOR), irrespective of the contract value. Contracts with consulting firms estimated to cost more than US$50,000 would be subject to IDA's prior review (the IDA would, in addition to the TOR, review the Request for Proposals (RFP) and the short-list). For each contract with a consulting firm ,estimated to cost US$50,000 or more, after the technical proposal has been evaluated, the technical evaluation report would be submitted to the IDA for its review prior to the opening of the financial proposals. For contracts estimated to cost between US$ 25,000 and US$ 50,000 the IDA would be notified of the results of the technical and financial evaluations. For contracts with individual consultants costing US$ 20,000 Page 45 or more, in addition to the TORs, the corresponding individual qualifications, experience and terms of employment shall be furnished to the IDA for its prior review and approval.
All works, goods and services contracts and contract items not subject to prior review would be subject to ex-post review by the IDA on a random basis of one in five contracts.
Retroactive Financing: In view of the urgent need to start up implementation of the project, the PIU initiated the procurement process for the first year dam rehabilitation program in consultation with the Bank. The total amount for retroactive financing shall not exceed the equivalent of US$1.0 million for expenditures incurred after April 1, 1999. provided the procurement of goods, works, and consulting services, was in accordance with the Bank Guidelines and specifically cleared by IDA.
The proposed IDA Credit of US$ 26.0 million equivalent would be disbursed over a period of five years, and the expected closing date of the Credit would be March 31. 2005. It is estimated, based on experience with ongoing IDA operations in Armenia. that the country's ability to implement the project over a five-year period is reasonable. especially given that the PIU is well established and experienced, and that many national design and construction firms are now generally familiar with similar IDA supported project requirements. The allocation of the proceeds of the IDA credit is summarized in table D.
Use of Statements of Expenditures (SOEs)
The following disbursements would be made against certified Statements of Expenditures (SOEs): (a) goods under contracts costing less than US$200,000 each; (b) works under contracts costing less than US$ 200,000 each; (c) maintenance costs; and (d) services under contracts less than US$50,000 each for consulting firms, and less than US$20,000 each for individual consultants, under such terms and conditions as the IDA shall specify. Supporting documentation for SOEs would be retained by the Borrower and made available to the IDA during supervision.
Special Account (SA)
To facilitate disbursements against eligible expenditures, the Government would establish in a commercial bank, acceptable to IDA, a Special Account (SA) to be operated by the PIU under terms and conditions satisfactory to the IDA. The IDA would, upon request, make an authorized allocation of US$2.6 million. Initially the allocation would be limited to US$ 1.3 million until disbursements have reached US$ 5.0 million (SDR 3,700), at which time the full authorized allocation could be claimed. Applications for the replenishment of the SA would be submitted monthly (or when 20 percent of the initial deposit has been utilized, whichever occurs earlier). The replenishment application would be supported by the necessary documentation, the SA bank statement and a reconciliation of this bank statement. The SA would be audited annually by independent auditors acceptable to the IDA. Page 46
Armenia: Dam Safety Project Annex 6 - Table A - Thresholds for Procurement Methods and Prior Review
Section 1: Procurement Review Goods/Works ICB NCB Is NS Othermetlhods I Procurement Works \k orks I Works: Works: Minor works: method thresholds >S50000000 <$500 nonie none <$50.000 Goods: Goods: Goods: Goods: Goods: >$200.000 none NoIIe <$50.000 none 2. Prior Review All ICB and All First ' goods each contract >SN00.000 corn,t for goods and and first tuo X works above NCB $0.2 million contracts for
______w orks ConsultanltServices QCBS QBS Sole Sourcitg: Consultanit s Otlhermetllods qualification Individual l s Consultants 3. Procurement $1.9 million nonet none I$015 $0.5 million imethiodand l million aggregates 4. Prior Review >S50,000 >$50,000 All >$50,000 >$20,000 5. Ex-post Review Explain briefly the ex-post review mechaniism: The Bank will monitor procurement activities, contract management and project record keeping during periodic supervision missions. Roughly 10% of contracts will be ex-post reviewed. Section 2. Capacity of the Implementing Agency in Procurement and Technical Assistance requirements The current PIU has a Procurement Unit which is headed by a Procurement Specialist. In addition there are two junior procurement engineers who assist in the routine work pertaining to bidding and in the evaluation process. In view of the urgent nature of procurement requirements of the Dam Safety Project, the volume of the procurementwork and its complexity will require an additional experienced procurementspecialist who should be thoroughly familiar with the Bank's procurement guidelines and procedures and should preferably have 2-3 years of experience in Bank-financed procurement. In addition, the two junior procurement engineers could be provided further procurement training and be used to cope with the increasing volume of procurement work relating to the DSP. There is also a critical need for urgent technical assistance for overseeing the design of dam rehabilitation works and preparation of technical specifications for the ICB process for civil works. This will be met by a short-term international dam design management consultant. In addition, the PIU would have at its disposal, during the life of the project, the expert advisory services of an international dam expert who would periodically review the ongoing dam rehabilitation program and provide appropriate advice to PIU.
6. Brief statement: Primary responsibility for overseeing implementation of procurement procedures will rest with the staff of the Project Implementation Unit. The prime responsibility for procurement work at the PIU would rest upon the Project Manager. He will be supported by a Procurement Unit consisting of two experienced Procurement Specialists and two junior procurement engineers. Page 47
7. Country Procurement Assessment Report or Country Procurement Strategy 8 Are the bidding Paper status: documents for the A country procurement note was prepared in 1997 based on a procuremenit procurement actions of decree (N.577 dated 12/15/1994). The decree was replaced by two decrees in the first year ready by 1997 and a draft procurement law is currently before the Armenian Parliament. negotiationis? Partially Section 3. Training, Information and Development on Procurement The two junior procurement engineers at the PIU should be provided extensive procurement training especially in Civil Works. 9. Estimated start date 10. Estimated date of 1 1I Indicate if 12. 13. Domestic of Project General Procurement contracts are subject to Domestic Preference for October 1. 1999 Notice publication. mandatorN SPN in Preference Constiltanit: April 30, 1999 Development for Works: IBusiiness: Yes Yes Yes 14. Retroactive financinigYes 15. Advanced up to US$ 1.0 millioll ProcuremeitNo 16. Explain briefly the Procurement MonitorinigSystem and InformiationiSystem: The PIU will submit PMRs on quarterly basis starting Oct 1. 2000. Section 4. Procurement Staffing 17 Indicate name of Procurement Staff as part of Project Team: SnezaniaMitrovic Division: ECSSD Ext. 32182 18. Explain briefly the expected role of the Field Office in Procurement: None foreseen at the present time. Page 48
Armenia: Dam Safety Project Annex 6 -Table B - Procurement Arrangements
ProcurementArrangements (US$ '000) International National Competitive Competitive Bidding Bidding Other N.B.F. Total
A. Civil Works 20,279.4 1,198.4 - - 21,477.8 (17.237.5) (1.018.6) (18,256.1) B. Emergency Repair Fund ((a) - 802.4 1,203.8(d) - 2,006.2 (852.6) (852.6) (1,705.3) C. Equipment 2,987.6 - 45.7 - 3,033.3 (2,987.6) (45.7) (3,033.3) D. Consulting Services (b) - 2,678.6 - 2,678.6 (2,588.9) (2,588.9) E. Operation and Maintenance costs of Dam - - 1,053.1 - 1,053.1 Maintenance Enterprise (c) (349.1) (349.1) F. Operation and Maintenance costs of Project - - 81.1 9.5 90.6 Implementation Unit (36.9) (36.9) Total 23,266.9 2,201.5 4,861.6 9.5 30,339.6 (20,225.0) (1,871.3) (3,873.2) - (25,969.5)
Note: Figures in parenthesis are the respective amounts financed by IDA
(a) with prior approval and in accordance with procedures approved by the Bank (b) in accordance with Bank's consultant guidelines (c) Reimbursement on the basis of annual budgets, approved by the Bank (d) Following procedures for minor works Page 49
Armenia: Dam Safety Project Annex 6 - Table C - Procurement Plan (US$)
Description Type No. of Cost Procurement Document Invitation Contract Contract Contracts Incl. Cont. Method Preparation to bid signing completion ConsultingServices Firms 2,022.027 Design rehabilitation and design safetyequip. installation Kamut' CF I - CQ Nov-98 Dec-98 Jan-99 Jun-99 Designrehabilitation and safety equipmentinstallation Aparan * I - CQ Nov-98 Dec-98 Jan-99 JUn-99
I Designrehabilitation works Gegardalich.Bazmaberd CF 3 146,643 CQ Mar-99 Apr-99 May-99 Jul-99 Tavshud,Khalavar, Arpitich 2 RapidDam Appraisal Cl' 1 46.414 QCBS Mar-99 Apr-99 Jun-99 Nov-99 3 Designof equipmentInstallation works Gegardalich.Bazmaberd. CF t 50.020 QCBS Mar-99 Apr-99 Jun-99 Sep-99 Tavshud, Khalavar,Arpilich 9 4 Supervisionrehab and safety equip. inst. works Karnut. Aparan CF t 160.341 QCBS Jun-99 Jul-99 Sep- 9 Oct-00 to D)ec-
Gegardalich,Bazmaberd, Khalavar, Arpilich, Tavshud 5 Technical Investigationremaining 60 dams(DB) CIl 1 419.033 QCBS Jul-99 Aug-99 Oct-99 Oct-0)l 6 Audit I CF 1 113.963 QCBS Jul-99 Sep-99 Dec-99 Apr-01
7 Design rehabilitation and safetyequipment inst. - all superv. CF i 70.949 QCBS Jun-99 Jul-99 Sept99 Apr-00*0 Sarnapur 8 Design rehabilitation and safetyequipment inst. + all superv. CF t 135.888 QCBS Aug-99 Sept-99 Dec-99 Jun-00)* Sovetashen 9 Design rehabilitation and safety eq. inst. + all superv.Sewaberd & Cl' 1 103.909 QCBS Oct-99 Dec-99 Mar-00 Oct-00' Kakavdz t0 Design reh. and saf Eq. Inst. + all superv. David-Beck. CF I 224.994 QCBS Apr-00 Jun-00 Sept-00 Apr-01** Gegarkunik,Azat 11 Design rehab. and saf Eq. Inst.+ all supervision Mantash,Her 1icr ClF 1 193,242 QCBS Jan-01 Mar-01 Jun-01 Jan-02-* 12 Design rehab. and saf. Eq. Inst.+ all supervisions Hakum.Tavush CF 1 193.616 QCBS Mar-01 May-01 Aug-01 Mar-02** 13 Design rehabilitation and safety equipmentinst. - all superv. CF i 84.521 QCBS May-01 Jul-01 Nov-01 Jun-02** Vardakar 14 Design rehabilitation and safety equipment inst. + all superv. CF: 1 78.594 QCBS Sept-01 Nov-01 Feb-02 Oct-02*- Aygedzor Note * Design financed under IRP Note: ** date of completionof design work. Supervisionwill be carried out until the end of the construction period. ConsultingServices Individuals 450,574 1 Short term internationalassistance for design Mngmt and Cl 1 106.313 IC Apr-99 Apr-99 May-99 Sep-99 Technical Specifications 2 Long term internationaldam specialist Cl 1 133.025 IC May-99 Jun-99 Aug-99 Sep-04 3 Local consultant.Sociologist Cl I 1.852 IC Jun-99 Jul-99 Aug-99 Oct-0)2 4 Consultantsfor PIU Cl 10 209.384 IC Jul-99 Aug-99 Sept-99 Sept-()4 Civil Works CW 21,477,795 IRehabilitation worksGegardalich, Bazmaberd. Khalavar, Arpilich. CW I 7.982.364 ICB Apr-99 Jun-99 Oct-99 Oct -00 to Oct- Kamut, Aparan, Tavshud 01 2 Safety equipmentinstallations works Kamut. Aparan.Gegardalich. CW I 197.261 NCB Jun-99 Aug-99 Oct-99 Sept00 to Sept Bazmaberd,Khalavar. Arpilich. (I 3 Safetyequipment installationsworks Tavshut CW I 51,183 NCB Nov-00 Dec-00 Feb-00 Aug-00 4 Rehabilitationand safety equipmentinst. Works Samapur CW I 1.025,832 ICB Feb-00 Apr-00 Aug-00 Feb-02 5 Rehabilitationand safety equipmentinst. Works Sovetashen CW I 1.855.495 ICB May-00 Jul-00 Nov-00 Nov-02 6 Rehabilitationand safety eq. inst. works Sewaberd& Kakavdz CW I 781.637 ICB Oct-00 Dec-00 Feb-01 Jul 02 to Jan03 7 Rehab.and saf.Eq. Inst. Works David-Beck CW 1 1,571,743 ICB Dec-00 Feb-01 Jun-01 Apr-03 8 Rehab.and saf. Eq. Inst. Works Gegarkunik CW I 301.583 NCB Mar-01 Apr-01 Jun-01 Feb-03 9 Rehab.and saf Eq. Inst. Works Azat CW I 699,586 ICB Mar-01 Apr-01 Jun-01 Feb-04 10 Rehab.and saf Eq. Inst. Works Mantash CW 1 820.772 ICB Dec-02 Jan-02 Mar-02 Oct-03 1I Rehab.and saf. Eq. Inst. Works Tavush Cw I 484.045 NCB Jan-02 Feb-02 Apr-02 Jul-04 t2 Rehab.and saf Eq. Inst. Works Her Her CW I 1,250,174 ICB Aug-01 Oct-01 Feb-02 Sep-04 13 Rehab.and saf Eq. Inst. Works Hakum CW I 2,093,581 ICB Dec-01 Feb-02 Jun-02 Sep-04 14 Rehab.and saf Eq.lnst. Works Vardakar CW I 1,243,602 ICB May-02 Jul-02 Nov-02 Sep-04 15 Rehab.and saf Eq.lnst. Works Aygedzor CW I 1,118.937 ICB Aug-02 Oct-02 Feb-03 Sep-04 Page 50
TOT ICB 20.443,723 TOT NCB 1.034.072 Goods 2.993.303 Deliver I ComputerEquipment PIU and softwarefor Dam BreakAnalysis G 1 40.399 NS Mar-99 Apr-99 May-99 Jun-99 2 PortableMonitoring Equipmentfor DME G 1 690.878 ICB Apr-99 Jun-99 Sep-99 Oct-99 TelecommunicationEquipment for DME Safety EquipmentAparan, Karnut. Gegardalich,Arpilich. Kalawar. Bazmaberd,Tawshud, Sarnapur. Sovetashen, Sewaberd. Kakavadzor 3 Cars and snowmobiles G 1 192.872 IS Jul-99 Aug-99 Sep-99 Oct-99 4 Fumiture PIU G 1 5.316 NS Mar-00 Apr-00 5 Excavators,Tractors, bulldozers,trailer, mech.Workshop. G I 1.577.232 ICB Jul-00 Aug-00 Sep-00 Oct-00 compressorsand welding machines 6 Control CenterDME Equipment G i 487.606 lCB Mar-00 Apr-00 May-00 Jutt-0l Safety equipmentDavid-Beck, Gegarkunik.Azat. Mantash,Her Her, Hakum. Tavush, Vardakar.Aygedzor TOT ICB 2.754,71h TOT IS 192.872 TOT NS 45.715 Training 116.253 Training in procurementand study tour in dam safety management 116,253 are foreseen.All activities haveto be agreedwith the Bank. OperatingCosts 1.143.781 IncrementalOperation - DME (Vehicle and equipmentmaintenance and sparc 1.053,148 parts, fuel, utilities, office supply and incrementalsalaries) Operation- PIU (Vehicle spareparts and maintenance,fuei, 90.583 Communicationand utilities. stationeryand printing services. wvorkshop conferenceexpenses, bank services) Fund 2,006.185Y EmergencyRepair Fund (use to be agreedand with prior approval 2.006,185 by IDA) including about US$ 100,000to pilot 2 minihydro stations. Other 89.736 Social SecurityContributions for PIU consultants 89.736 GRAND TOTAL 30.299,645
Legend: ICB=lnternational Competitive Bidding: NCB=National Competitive Bidding; IC=lndividual consultant: IS=lntemational Shopping: NS=National Shopping: CQ=Consultants'Qualifications; QCBS=Quality and Cost Based Selection: MW=Minor Works *=The procurementunder the EmergencyRepair Fund shall be asper provisionsof the DCA (NCB-US$802,400;MW-US$802,400: and IS- US$401,200) Page 51
Armenia: Dam Safety Project Annex 6 - Table D - Allocation Of Loan Proceeds
Suggested Allocation of Loan Proceeds IDA (US$ '000) Total Project Cost Average Disbursement % l Loan Amount Disbursement Total Local Foreign Total Local Foreign
l. Operating and 325.4 33.21 1E053.1 1.053.1 - 33.2 332 - maintenance costs DME 2. Civil Works 17,970.3 88.0 23,484.0 9.105.6 14,378.4 88.0 69.1 100.0 3. Equipment 2.850.9 100.0 2,993.3 - 2.993.3 100.0 - 100.0 4. Consultant Services 2,465.6 96.6 2.678.6 2,209.0 469.6 96.6 95.9 100.0 5. Operating and 33.5 40.7 90.6 90.6 - 40.7 40.7 - Maintenance Costs of PIU Unallocated 2,988.5 - - - Total 26,634.5 87.91 30,299.7 12,458.4 17.841.31
IDA Loan Amounts (US$ '000) IDA (USS '000) Unallocated Allocated Total Total Local Foreign Total Local Foreign 1. Operating and 349.1 23.7 23.7 - 325.4 325.4 - maintenance costs DME 2. Civil Works 20,665.9 2.695.6 820.1 1,875.4 17,970.3 5,467.4 12,502.9 3. Equipment 2,993.4 142.5 - 142.5 2,850.9 - 2,850.9 4. Consultant Services 2,588.9 123.3 100.9 22.4 2,465.6 2,018.4 447.2 5. Operating and 36.9 3.4 3.4 - 33.5 33.5 - Maintenance Costs of PIU Unallocated ------Total 26,634.2 2,988.5 948.1 2,040.3 23,645.7 7,844.7 15,801.0 Loan amounts financed by IDA Page 52
Armenia:Dam Safety Project Annex 6 - Table E - Withdrawal of the Proceeds of the Credit
Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) To be Financed
(1) Goods, equipment 2,110,000 100% of foreign expenditures, 100% of local and vehicles expenditures (ex-factory cost) and 80% of local expenditures for other items procured locally
(2) Works 13,270,000 88%
(3) Consultants' 1,830,000 100% services and training
(4) Operation and 240,000 90% of expenditures incurred prior to maintenance costs of September 30, 2000, 70% for expenditures DME incurred prior to September 30, 2001, 50% for expenditures incurred prior to September 30, 2002, 30% for expenditures incurred prior to September 30, 2003 and 10% for expenditures incurred thereafter
(5) Operating Costs 30,000 90% of expenditures incurred prior to of the PIU September 30, 2000, 70% for expenditures incurred prior to September 30, 2001, 50% for expenditures incurred prior to September 30, 2002, 30% for expenditures incurred prior to September 30, 2003, and 10% for expenditures incurred thereafter (6) Unallocated 2,220,000
TOTAL 19,700,000 Page 53
Annex 7
Dam Safety Project Project Processing Budget and Schedule
A. Project Budget Planned Actual (Atfinal PCD stage) S 70.000 S 70,000
B. Project Schedule Planned Actual (Atfinal PCD stage)
Time taken to prepare the project (moonths) 6 6 First Bank mission departure (identification) 11/09/99 11/09/99 Appraisal mission departure 3/22/1999 3/22/1999 Negotiations 05/17/1999 05/13/1999 Planned Date of Effectiveness 10/01/1999 10/01/1999
Prepared by: Preparation Team of the Project Imiplementation Unitfor the Irrigation Rehabilitation Project under the Ministry ofAgriculture. Manager. Adibek Kazarian
Preparation assistance: PHRD TF027096-AM
Bank staff who worked on the project included: Name Specialty Salem Gafsi Team Leader Joseph Goldberg Sector Leader Alessandro Palmieri Dam safety Mark Lundell Economics Giuseppe Fantozzi Financial analysis, Social issues Ezedine Hadj-Mabrouk Environmental issues Jagdish Jassal Procurement Abdul Haji Financial management Sharifa Kalala Team assistant David Bontempo Team assistant
This project was initially a component of a larger project (Irrigation Development Project), the preparation of which is still underway. Page 54
Annex 8
Dam Safeny Project Documents in the Project File*
Ministry ofAgriculture - Preparation Report: Deam.Safetv Project - Januarl, 1998 Ministry ofAgriculture - Project Implementation Plan - .4pril. 1999 Page 55
Annex 9
Statement of Loans and Credits
Difference between exp. and actual Project Fiscal Original Amount in US$ Millions disburs. a/ Cancellati Undisb ID Year Borrower Purpose IBRDIDA ons ursed Orig Frn Rev'd
Number of Closed Projects: 5 Active Projects AM-PE-51171 1999 REPUBLIC OF SAC III 0.00 65.00 0.00 49.95 6.39 0.00 ARMENIA GOVERNMENT TITLE AM-PE-57560 1999 OFEAMENI REGISTRATIO 0.00 8.00 0.00 8.40 0.00 0.00
AM-PE-35805 1998 REPUBLIC OF MUNICIPAL 0.00 30.00 0.00 29.12 -.28 0.00 ARMENIA DEVELOP. AM-PE-35806 1998 REPUBLIC OF AGRIC. 0 00 14.50 0.00 13.69 3.75 0.00 ARMENIA REFORM SUPP. AM-PE-50140 1998 REPUBLIC OF HEALTH 0.00 10.00 0.00 9.63 2.74 ARMENIA 0.00 AM-PE-51026 1998 REPUBLIC OF SATAC II 0.00 5.00 0.00 3.80 3.45 0.00 ARMENIA AM-PE-8281 1998 REPUBLIC OF EDUCATION 0.00 15.00 0.00 13.22 -.03 0.00 ARMENIA AM-PE-8279 1997 REPUBLIC OF ENTERPRISE 0.00 16.75 ARMENIA DEVELOP. 0.00 10.88 6.38 0.00 AM-PE-35765 1996 REPUBLIC OF HIGHWAY 0.00 31.00 0.00 10.75 -4.85 4.38 ARMENIA AM-PE-35768 1996 REPUBLIC OF SOCIAL 0 00 12.00 0.00 2.70 .11 0.00 ARMENIA INVEST. FUND AM-PE-44387 1996 ARMENIA ADJUST. TA 0.00 3.80 0.00 1.50 1.67 0.00
AM-PE-35757 1995 GOVT. OF POrER 0 00 13.70 0.00 .24 .60 0.00 ARMENIA MAINTENANC AM-PE-8277 1995 GOVTAOF IRRIGATION 0.00 43.00 0.00 19.88 16.09 0.00 ARMENIA REHAB. Total 0.00 267.75 0.00 173.76 36.02 4.38 Active Projects Closed Projects Total Total Disbursed (IBRD and IDA) 91.97 221.81 313.78 of which has been repaid: 0.00 .19 .19 Total now held by IBRD and IDA 267.75 218.51 486.26 Amount sold 0.00 0.00 0.00 of which repaid 0.00 0.00 0.00 Total Undisbursed 173.76 0.00 173.76 a. Actual disbursements to date minus intended disbursements to date as projected at appraisal Page 56
Annex 10 Armenia at a glance
Europe & POVERTY andSOCIAL Central Low. _ Armenis Asia income Developmentdlamond- 1997 Population,mid-year (millions) 3.8 476 2,048 Lifeexpectancy GNPper capita(Atlas method, USS) 530 2,320 360 GNP (Atlasmethod, USS billions) 2.0 1,106 722 Average annualgrowth, 1991-97 Population(%) 0.8 0.2 2.1 Laborforce (0.6 0.5 2.3 GNP . Gros per -~~~~~-----' primary Most recent estimate(latest year available, 1991.97) capita enrollment
Poverty(% of populationbelow natonal poveruy line) .. Urbanpopulation (% of totalpopulaton) 89 67 28 Life expectancyat birth (years) 73 69 59 Infantmortality (per 1,000live bliths) 14 26 78 Childmalnutrition (% of childrenunder 6) .. .. 61 Accessto safewater Access to safe water (% of population) 71 Illiteracy (% of population age 15+) .. . 47 Grossprimary enrollment (% of school-agepopulation) 85 92 DArmenla91 Male .. .. 100 Low-incomegroup Female .. .. 81 KEYECONOMIC RATIOS and LONG-TERMTRENDS 1976 1986 1996 1997 Economic ratlos- GOP(US$ billions) 2.5 1.6 1.6 Grossdomestic investment/GDP .. 32.7 7.7 10.7 Exportsof goods and services/GOP .. .. 23.1 20.3 Trade Grossdomestic savings/GDP .. 36.9 -25.1 -27.9 Grossnational savings/GOP .. .. -7.9 -8.8
Current account balance/GDP .. .. -26.8 -29.0 DomestIc Investment Interestpayments/GDP ,. 1.3 1.5 Savings Total debt/GDP .. .. 38.6 49.8 Total debt service/exports ., ,, 17.7 11.9 Present value of debtGDP .. .. 24.4 Presentvalue of debt/exports .. .. 91.7 Indebtedness
1976-86 1987.97 1996 1997 1998-02 (averageannual growth) GDP 5.8 -14.5 5.8 3.1 5.9 Armenia GNPper capita 4.1 -12.9 8.0 5.4 5.7 --- Low-income group Exportsof goodsand services .. -4.2 14.6 1.2 7.8
STRUCTUREof the ECONOMY `1976 1988 1998 1997 Growthrates of output and Investment (%) (% of GDP) s Agriculture 19.8 44.6 44.7 1 Industry .. 55.4 35.6 35.7 0 _d*_ Manufacturing .. 25.2 25.4.. . 97 Services .. 24.8 19.8 19.6 t50o
Private consumption 45.7 113.1 114.9 .100- Generalgovernment consumption 17.4 12.1 13.0 _GDI - DP Imports of goods and services .. .. 55.9 58.9 G-I .G.P
1976-86 1987-97 1996 1997 Growth rates of exports andImports (% (averageannual growth) Agriculture 0.8 -5.2 1.0 2.7 75- Industry 5.5 -21.4 1.2 3.0 to - Manufacturing 5.6 -14.3 1.4 3.3 25 Services 7.6 -15.3 8.3 20.8 2sc - - - go -7 2 Privateconsumption 4.2 -13.1 6.5 0.3 26 . ' k w ss s6 Generalgovemment consumption 3.5 -2.2 14.1 6.2 so Grossdomestic investment 7.3 -16.2 -17.4 40.9 7 - Importsof goodsand services .. -4.4 8.1 2.8 Exports * imports Grossnational product 5.8 -12.0 8.4 5.6
Note:1997 data are preliminaryestimates. The diamondsshow four key indicatorsin the country(in bold)compared with its income-groupaverage. If data are missing,the diamondwill be incomplete. Page 57
PRICES and GOVERNMENT FINANCE 1976 1986 1996 1997 Iinfitlorn(%j) Domesticpricesi (% change) Consumer prices 18.6 14.0 4,000 ImplicitGDP deflator o.6 1.1 19.5 17.3 13,00 12,000t Government finance 11.0o (% of GDP, includes cufrent grants) - - Current revenue 16.2 17.8 92 93 94 9s 05 97 Current budget balance , -3.5 -3.0 i -GDP deflator O CPI Overall surplus/deficit -10.1 .8.0
TRADE
(USSmillions) 1976 1986 1996 1997 F ExportandImport levels(USS milions) Total exports (fob) 290 234 1so00 Gold, jewelry, and other precious stones 126 102 T Mineral products and metals , 55 47 t Manufactures 45 36 13000t Total imports(cif) 758 793 Food .. 259 270 Fuel andenergy 220 226 ' _ Capital goods 32 34 0 _ _ _ _ _ 91 92 93 94 90 go 97 Export price index (1995-100) .. .. 1O5 93 j Import price index (1995=100) 104 109 U Exports U Imports Terms of trade (1995=100) .. .. 102 86
BALANCE of PAYMENTS
(US$ millions) 1986 1996 1997 [Current account balance to GDP ratlo (%) Exports of goods and services 368 330 ° Imports of goods and services 892 959 91 _ _ m m m m Resource balance -524 4e28 .10 l.
Net income 22 95 Net current transfers 74 61 -20
Current account balance -428 -472 -30 flE E Financing items (net) 438 528 Changes in net reserves , -10 -56 401 Memo: Reserves including gold (US$ millions) .. .. 168 247 Conversion rate (DEC, locaUS$) .. 1.62E-2 414.0 491.0
EXTERNAL DEBT and RESOURCE FLOWS 1976 1916 199I 1997 (USS millions) Compositionof total debt, 1996 (USSmillIons) Total debt outstanding and disbursed e1s 810 IBRD 10 12 G:62 A: 10 IDA . .. 174 240
Total debt service 75 55 B:174 IBRD 0 1 IDA 1 1 Composition of net resource flows E:200 Official grants , , 179 154 Official creditors 173 185 Private creditors `1 2 Foreign direct investment 18 51 C 117 Portfolio equity 1 2 D:46 World Bank program Commitments 64 107 .ISRD E - Bilaterat Disbursements 92 77 B DA D - Othermultilateral F - Private Prncipal repayments 0 0 - IMF G - Short-ter Net flows 92 77 Interest payments 1 2 Net transfers 91 76
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