Sierra Leone

Language: English Original: English

PROJECT: MATOTOKA – SEFADU ROAD REHABILITATION PROJECT SECTION I: MATOTOKA – YIYE COUNTRY: SIERRA LEONE

PROJECT APPRAISAL REPORT

Date: NOVEMBER 2011

Team Leader: Mr. Richard Malinga (Transport Engineer, OITC.1) Team Members: Mr. Manuel Bernard (Transport Economist, OITC.1) Ms. Mariehellen Minja (Transport Engineer, OITC.1) Mr. Patrick Musa (Transport Engineer, OITC.2) Mr. Ibrahim Wilson (Infrastructure Specialist, SLFO) Appraisal Team Mr. Jonathan Nyamukapa (Reg. Fin. Mgt. Coord., ORPF.2) Mr. Shiaka Momoh (Procurement Assistant, SLFO) Ms. Kelello Ntoampe (Environmentalist, ONEC.3) Mr. Noel Kulemeka (Socio-Economist, ONEC.3) Ms. Brenda A. Aluoch (Legal Counsel, GECL.1) Sector Director: Mr. G. Mbesherubusa, OITC Regional Director: Mr. F. Perrault, ORWB

Sector Manager: Mr. J. Kizito Kabanguka, OITC.1 Country Res. Rep. Mr. Y. Baldeh, SLFO

Mr. Aymen Ali,Transport Engineer, OITC.2 Mr. Augustin Karanga, Transport Economist, OITC.1 Peer Reviewers Ms. Rachel Aron, Social Development Specialist, ONEC.3 Mr. Tom Mugoya, Water and Sanitation Engineer, OWAS.1 Mr. Moctar Mbodj, Consultant, OITC

TABLE OF CONTENTS I – STRATEGIC THRUST & RATIONALE ...... 1 1.1. Project linkages with country strategy and objectives ...... 1 1.2. Rationale for Bank’s involvement ...... 1 1.3. Donors coordination...... 2 II – PROJECT DESCRIPTION ...... 3 2.1. Project components ...... 3 2.2. Technical solution retained and other alternatives explored ...... 3 2.3. Project type ...... 4 2.4. Project cost and financing arrangements ...... 4 2.5. Project’s target area and population ...... 6 2.6. Participatory process for project identification, design and implementation ...... 6 2.7. Bank Group experience, lessons reflected in project design ...... 7 2.8. Key performance indicators ...... 8 III – PROJECT FEASIBILITY ...... 8 3.1. Economic and financial performance ...... 8 3.2. Environmental and Social impacts ...... 9 IV – IMPLEMENTATION ...... 12 4.1. Implementation arrangements ...... 12 4.2. Monitoring ...... 13 4.3. Governance ...... 14 4.4. Sustainability...... 15 4.5. Risk management ...... 16 4.6. Knowledge building ...... 17 V – LEGAL INSTRUMENTS AND AUTHORITY...... 18 5.1. Legal instrument ...... 18 5.2. Conditions associated with Bank’s intervention ...... 18 5.3. Compliance with Bank Policies ...... 19 VI – RECOMMENDATION ...... 19 Appendix I. Country’s comparative socio-economic indicators...... 20 Appendix II. Table of ADB’s portfolio in the country ...... 21 Appendix III. Key related projects financed by the Bank and other development partners in the country ...... 22 Appendix IV. Map of the Project Area ...... 23

ANNEXES (Summarised Technical Annexes) A. Country’s Development Agenda, Sector Brief and Donor’s Support B1. Lessons Learned B2. Project Costs B3. Implementation Arrangements B4. Financial Management and Disbursement Arrangements B5. Procurement Arrangements B6. Audit Arrangements B7. Economic and Financial Analysis B8. Environmental and Social Analysis B9. Project Preparation and Supervision

Currency Equivalents As of October 2011

UA 1 = SLL 6998.5032 UA 1 = US $ 1.56162 US $ 1 = SLL 4481.56607

Fiscal Year 1st January – 31 st December

Weights and Measures

1metric tonne = 2204 pounds (lbs) 1 kilogramme (kg) = 2.200 lbs 1 metre (m) = 3.28 feet (ft) 1 millimetre (mm) = 0.03937 inch (“) 1 kilometre (km) = 0.62 mile 1 hectare (ha) = 2.471 acres

Acronyms and Abbreviations

AADT Average Annual Daily Traffic NTSIP National Transport Strategy Investment Plan ADB African Development Bank OFID OPEC Fund for International Development ADF African Development Fund OITC Transport and ICT Department AIDS Acquired Immune Deficiency Syndrome ONEC Energy, Environment and Climate Change Dept AOI Area of Influence ORQR Quality Assurance & Results Department CBO Community Based Organization PAP Project Affected Persons CPIP Country Portfolio Improvement Plan PBA Performance Based Allocation EA Executing Agency PCN Project Concept Note ESIA Environmental and Social Impact Assessment PCR Project Completion Report EPA Environment Protection Agency PIT Project Implementation Team ESMP Environmental and Social management Plan PIU Project Implementation Unit EU The Commission of European Union PRSP Poverty Reduction Strategic Paper FSF Fragile States Facility RAP Resettlement Action Plan GDP Gross Domestic Product QPR Quarterly Progress Report GHG Green House Gas SLFO Sierra Leone Field Office GOSL Government of Sierra Leone SLL Sierra Leonean Leone HIV Human Immunodeficiency Virus SLRA Sierra Leone Roads Authority HDM Highway Development and Maintenance SLRTA Sierra Leone Road Transport Authority IRI International Roughness Index STI Sexually Transmitted Infection JAS Joint Assistance Strategy TB Tuberculosis M&E Monitoring and Evaluation UA Units of Account MDG Millennium Development Goals USD United States Dollar MTS Medium Term Strategy VOC Vehicle Operating Costs NGO Non-Governmental Organisation WB World Bank

Loan & Grant Information

Client’s information

BORROWER: Republic of Sierra Leone EXECUTING AGENCY: Sierra Leone Roads Authority (SLRA)

Financing plan

Source Amount (UA) Instrument Million FSF 12.00 Grant - (FSF Pillar I)

ADF 6.82 Grant ADF 3.18 Loan OFID 6.40 Loan** GOSL 1.38 PAP Compensation & Resettlement TOTAL COST 29.78

ADB’s key financing information Interest type* Not Applicable Interest rate spread* Not Applicable Commitment fee* 0.5% per annum on the un- disbursed loan balance Service Charge 0.75% on the amount disbursed and outstanding Other fees* Not Applicable Tenor 50 years Grace period 10 years FIRR, NPV (base case) Not Applicable EIRR (base case) 19.5%, USD 18.93 million *if applicable **OFID Loan conditions Maturity 20 years Grace Period 5 years Interest Rate 1% p.a *** Service Charge 1% p.a *** *** on amounts withdrawn and outstanding Timeframe - Main Milestones (expected) Project approval March, 2012 Effectiveness July, 2012 Last Disbursement June, 2016 Completion November, 2015 Last repayment July, 2062

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Project Summary Project Overview The Matotoka to Sefadu road (120 km) is a strategic road link connecting the administrative districts of Tonkolili and Kono in Sierra Leone. The road, which is of bituminous standard, was constructed about 40 years ago and is now in a deplorable condition having deteriorated, and hence the need for rehabilitation recognised. The beneficiaries of the road rehabilitation include the communities served by the project road who will benefit from the improved access to economic opportunities and social services. Both passenger and freight transport services will benefit from lower vehicle operating costs, time savings, and improved road safety. The cost for the rehabilitation of the Matotoka – Sefadu road is estimated at UA 47.55 million. In consideration of the allocated Bank funding for the project under ADF-12 and FSF pillar I, the implementation of the Matotoka – Sefadu is to be phased as; Section I: Matotoka – Yiye (70 km), estimated to cost UA 28.40 million and Section II: Yiye – Sefadu (50 km), costing UA 19.15 million. The Bank’s funding is proposed for the support of the implementation of Section I that provides continuity with the recently rehabilitated (under WB financing) Makeni – Matotoka (37 km) that adjoins the (EU financed section) Masiaka – Makeni (107 km). Section I is to be financed by the Bank Group (UA 22 million) and, OFID (USD 10 million, equivalent to UA 6.4 million). The compensation costs (estimated at UA 1.38 million) for both Sections is to be financed by the GoSL. The overall project implementation time for Section I is four years including two years for the civil works. Following studies financed by the World Bank under the Road Rehabilitation and Maintenance Project for the Matotoka to Sefadu Road, the GoSL requested the Bank to finance the road rehabilitation. The project appraisal report was submitted to the Bank’s Board in 1993. However due to civil strife, the terminal point of the road became inaccessible and the funds thus reserved for the road rehabilitation were redirected towards completion of the Bumbuna Hydropower Project in the Country. Needs Assessment The movement of goods and people in the northern and eastern provinces of Sierra Leone has been impeded by the bad state of its road network, with a lot of difficulty presently being experienced in the movement of agricultural goods and passengers between, and within the two districts. The poor state of the road has contributed to the increased vehicle operating costs with increased travel time. Additional challenges include poor accessibility to social centres in the project area Bank’s Added Value The feasibility and detailed design studies for the Matotoka to Sefadu road were completed in 2010 with Bank financing. The proposed project will ensure the Bank’s continued involvement and support to the transport sector as part of the GoSL’s poverty reduction strategy. In addition, the project design has drawn on the lessons learned from the Bank’s and other development partners’ extensive experience in Sierra Leone, especially in the road transport sector. Knowledge Management The project includes two main knowledge enhancing activities: i) Sensitisation of local community and construction workers on HIV/AIDS/ STIs, TB, malaria, water related diseases, and road safety; as well as environmental protection, and ii) monitoring and evaluation for project impacts.

Country and project name: SIERRA LEONE: MATOTOKA – SEFADU ROAD REHABILITATION PROJECT SECTION I: MATOTOKA - YIYE Purpose of the project : Improved accessibility and road transport services for the population in the zone of influence of the Matotoka – Sefadu road corridor PERFORMANCE INDICATO RS RESULTS CHAIN MEANS OF RISKS/MITIGATION MEASURES Indicator Baseline Target VERIFICATION (including CSI) Impact 1 Rate of GDP growth GDP growth of GDP growth of 6% in National Statistics, Development Risks Contribute to economic 5% in 2011 2014 as per GOSL Reports Lack of Good Governance growth through facilitating projections. Lack (or discontinuity) of Political commitment the movement of people and Ministry of Finance and goods; and to improved National incidence of Poverty level: Persons living below the Economic Development Mitigation Measures livelihoods of people in the poverty 70% persons poverty line reduced by Support for Good governance, the engagement of an external project AOI living below the 8% to less than 62% in UNDP Reports auditor, Use of ICB, and Information disclosure policy at IMPACT poverty line in 2014 various stages of project implementation. 2011 Government continued commitment to delivery of services of implementation of the Poverty Reduction Strategy. Outcome 1 National Statistics, Statistics Risks Road network in fair to Sierra Leone Lack of axle load control resulting in accelerated failure of Improved Road network and good condition between 195 km (62%) in 265 km (84%) in 2014 rehabilitated road network. access between Freetown Freetown and Koidu/ 2011 Ministry of Transport and In adequate budget provisions by GoSL for road and Koidu/ Sefadu Sefadu Aviation maintenance. Outcome 2 Vehicle operating costs VOC for cars of VOC reduced by at least Level of fuel levy for road maintenance fund is reduced USD 0.532/km in 25% from 2011 levels by Travel Time and Cost Surveys Improved level of Road 2011 (IRI =10) 2014 to USD 0.391/km Transport between Matotoka (IRI < 4.0) Road Condition surveys and Yiye Mitigation Measures Travel time Average Travel Average travel time GOSL implementing axle load control measures on the road time between between Matotoka and Executing Agency Reports corridor by establishment of weighbridges/deployment of OUTCOMES OUTCOMES Matotoka and Yiye reduced by at least mobile weighbridges. Yiye of 2.0 hrs in 30% in 2014, to 1.4 hrs Post-completion M & E Report Provisions for road maintenance being made through the 2011 Road Fund that is now independent of the SLRA. Outcome 3 Road surface condition 12% in good 100% in good condition in Progress reports Road Fund reforms being concluded to allow donor Improved road condition between Matotoka - Yiye condition 2014 participation in road maintenance. between Matotoka - Yiye Continued sector dialogue through the development partners Outcome 4 and the GoSL in the provisions of road maintenance fund Jobs generated with road Employment generated 0 At least 300 skilled and revenues (fuel, licence fees, etc)

construction during construction unskilled jobs created, about 30 % women.

Output 1.2 Number of persons with 0 persons At least 500 persons along Mitigation Measures Sensitisation of local focus on females sensitised project road sensitised by Executing Agency to designate a Project Management Team community and construction sensitised in identified 2014. Contractor performance in similar assignments to be workers on HIV/AIDS/ STIs, aspects; (At least 50% female, considered in the procurement process (post-qualification) malaria, water related focus on training of Engagement of well qualified and experienced personnel, diseases, and road safety; as trainers for multiplier Executing Agency Quarterly and involvement of various stakeholders (NGOs, CBOs) in well as environmental effect and sustainability of Reports carrying out the various sensitisation exercises. protection. the sensitisation) Well co-ordinated project formulation and processing.

Project Completion Report Number of schools to Sensitization carried out in

OUTPUTS OUTPUTS have received road safety at least five (5) schools

campaigns and awareness along project road by

on TB, HIV/AIDS/ STIs, 2014. malaria, water related diseases. Output 1.3 No. of markets 0 Rehabilitated 1 No. market rehabilitated Rehabilitated Social rehabilitated/ improved 3 No. primary schools and Infrastructure. No. of schools improved 1 No. health centre No. of health centres provided with improved improved facilities for water and sanitation COMPONENTS INPUTS Component 1: Civil Works ADF Grant/Loan : UA 22.00 million • Rehabilitation of 70 km of road between Matotoka and Yiye OFID UA 6.40 million • Rehabilitation of feeder roads, 20 km GoSL UA 1.38 million (Compensation KEY • Rehabilitation of Social Infrastructure, Environmental and social impact mitigation measures. and resettlement costs) Component 1

ACTIVITIES UA 25.30 million

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Project Timeframe

REPORT AND RECOMMENDATION OF THE MANAGEMENT OF THE ADB GROUP TO THE BOARD OF DIRECTORS ON A PROPOSED LOAN & GRANT TO SIERRA LEONE FOR THE MATOTOKA-SEFADU ROAD REHABILITATION PROJECT, SECTION I: MATOTOKA-YIYE

Management submits the following Report and Recommendation on a proposed ADF loan and grant for UA 22 million (FSF Pillar I UA 12 million and PBA UA 10 million) to the Republic of Sierra Leone to finance the Matotoka-Sefadu Road Rehabilitation Project, Section I: Matotoka-Yiye.

I – STRATEGIC THRUST & RATIONALE

1.1. Project linkages with country strategy and objectives 1.1.1. Sierra Leone has been through a ten year civil war that ended in 2002. In this respect Sierra Leone is considered as a Fragile State as it strives to recover from the conflict. The process of rebuilding the country’s basic infrastructure that was destroyed or damaged during the conflict in order to help in its effort to attain long-term sustainable economic growth is ongoing. The Government has prepared the second generation of Poverty Reduction Strategy Paper (PRSP II) covering the period 2008-2012, under the title “Agenda for Change”. The strategy draws on lessons learnt from implementing PRSP I; nationwide consultations and priority-setting exercise; and the growth diagnostic analysis for Sierra Leone. The focus of the PRSP II is to reduce poverty through economic growth, with an emphasis on the private sector. The PRSP II identifies four key priorities of which Priority (iii) is geared towards developing a national transportation network to enable the movement of goods and people and thereby facilitate increases in investment and economic activity. The Matotoka – Sefadu road is also included under this priority. 1.1.2. The Bank and the World Bank Group have launched a Joint Assistance Strategy (JAS) for Sierra Leone for the period 2009 – 2012. The Bank’s focus in the JAS is on infrastructure and governance, and furthermore the project falls under the current Bank Medium Term Strategy (MTS) priorities whereby infrastructure development has been identified as one of the operational priorities. Infrastructure is also a priority in the FSF which partially finances this project with UA 12 million. 1.1.3. The Bank shall contribute to the poverty reduction strategy by supporting the implementation of this project, which would also enhance regional integration between Sierra Leone and the neighbouring countries of Guinea and Liberia. The development objectives of the project are to improve the road transport service along the Matotoka - Sefadu route by reducing vehicle operating costs and travel time, whilst improving accessibility to the hinterland, and fostering national and regional integration.

1.2. Rationale for Bank’s involvement 1.2.1. The rationale for Bank’s intervention includes: a) the Matotoka - Sefadu road feasibility and detailed design studies which were financed by the Bank demonstrated high economic viability, b) the main objective of the proposed project which is to contribute to economic growth through infrastructure development is fully in line with the Sierra Leone’s priorities in PRSP II and the Bank’s MTS (2008 – 2012), c) the proposed project lies in the Country’s key area for mining and agriculture activities, therefore the rehabilitation of the road will be beneficial for the development of the Eastern region of Sierra Leone as the current road condition affects the full exploitation of the economic potential of the area, d)

the road rehabilitation will also specifically enhance regional integration and cooperation between Sierra Leone and Guinea by facilitating cross border international traffic. 1.2.2. Additionally, the Matotoka – Sefadu road forms part of Sierra Leone’s core road network and it connects the northern Tonkolili and eastern Kono Districts. The Matotoka – Sefadu road is identified as a priority road and is included in the JAS; 2009- 2012 (Outcome 2 of Pillar I of the JAS is: Maintain and extend key transport infrastructure) and PRSP II priorities therefore the Bank’s involvement in supporting the project is timely. The proposed intervention is also in line with the Bank’s support to Fragile States. Furthermore, the rehabilitation of the Matotoka to Sefadu Road forms an integral part of the current National Transport Strategy Investment Plan (NTSIP), complementary to other development partners’ support in providing unhindered access from Freetown to Kono District.

1.3. Donor coordination 1.3.1. The key donors active in the transport sector in Sierra Leone include the EU, WB and the Bank. Other donors include Kuwait Fund, OFID, BADEA and Islamic Development Bank. The Bank is actively engaging with the Government and other development partners in harmonising project prioritization and implementation in the Country in line with the PRSP. The harmonisation of Project Implementation Unit (PIU) activities is one of the aspects being addressed through coordination, as well as knowledge sharing on lessons learned. 1.3.2. The level of donor coordination in Sierra Leone is strong with the Development Assistance Coordination Office (DACO) in the Ministry of Finance and Economic Development (MoFED) being the main link between government and development partners. The African Development Bank has been working together with government and other development partners with a view to making development assistance more efficient and effective in the country. The frameworks for donor coordination include Consultative Group (CG) meetings, Development Partners Committee (DEPAC), Sector Working Groups and United Nations Country Team (UNCT) meetings and Multi-lateral Development Banks (MDB) partners which focus on budget support to Government. The Bank’s participation in the Sector Working Groups has been enhanced with the recruitment of an Infrastructure Specialist in the Field Office. Further details are included in Technical Annex A. Size Sector or subsector* GDP Exports Labor Force Transport [6.7%] [N/A] [N/A] Players - Public Annual Expenditure (average)** Government Donors EU [91.04%] [UA 41.57 m] [UA 15.68 m] AfDB [2.63%] [72.61%] [27.39 %] OFID [2.51%] IsDB [2.04%] BADEA [1.76%] US Embassy [0.02%] Level of Donor Coordination Existence of Thematic Working Groups Y Existence of SWAPs or Integrated Sector Approaches [Y/N] ADB's Involvement in donors coordination*** M**** * as most appropriate ** Years [2008- 2010] *** for this sector or sub-sector **** L: leader, M: member but not leader, none: no involvement

II – PROJECT DESCRIPTION

2.1. Project components The project objective is to improve accessibility and road transport services along the Matotoka – Yiye road and its zone of influence. This shall be through reducing vehicle operating costs (VOC) and travel time, whilst improving accessibility to the hinterland, and to foster national and regional integration. The project consists of the following components: Component 1 : Civil Works This component includes the rehabilitation works for the 70 km inter-urban road between Matotoka and Yiye to a bituminous standard. The rehabilitation works also cover environmental and social mitigation measures as well as some complementary initiatives (works) encompassing social infrastructure. These include the rehabilitation of 20 km of feeder roads; rehabilitation of three primary schools (provision of classroom blocks, sanitation and water facilities) in Masingbi, Makali and Ngo town/Yiye; rehabilitation of a health centre in Masingbi; and improvements to one market in Matotoka. The details for the complementary initiatives are included in the Technical Annex B11. Component 2 : Consultancy Services This component includes the supervision services for the construction of the civil works under Component 1; and the services for the monitoring and evaluation of the project impacts. The component also includes sensitisation of project area inhabitants on HIV/AIDS, TB and STIs; malaria and water related diseases; ownership and environmental protection, as well as sensitisation of project area inhabitants on road safety. Component 3 : Project Audit This component includes the Financial and Technical Audits for the project . Table 2.1: project components

nr. Component name Est. cost Component description (UA) million 1 Civil Works 25.30 Rehabilitation of Section I, 70 km of road between Matotoka and Yiye Rehabilitation of feeder roads, 20 km Rehabilitation of Social Infrastructure Environmental and social impact mitigation measures 2 Consultancy 2.64 Supervision of Construction works; Services Monitoring and Evaluation of project impacts. Sensitisation of project area inhabitants on TB, HIV/AIDS and STIs; malaria and water related diseases; ownership and environmental protection. Sensitisation of project area inhabitants on road safety. 3 Project Audit 0.46 Project Audits; Financial and Technical

2.2. Technical solution retained and other alternatives explored 2.2.1. In the choice of the technical solution, the consideration of transport mode options was restricted to road that is presently the only existing transport mode between Matotoka and Sefadu. Having determined the appropriate mode type, the next consideration was the road alignment. The existing road alignment was noted to be generally suitable for the terrain.

2.2.2. A number of alternatives were considered for the various elements (carriageway, shoulders and drainage) in the proposed road rehabilitation works. The solution retained for the pavement is an Asphaltic Concrete (AC) wearing course for both the carriageway (6.7m wide) and the shoulders (1.5m wide), on a graded crushed stone (GCS) base supported by a natural gravel sub-base. The adjoining section that was rehabilitated under WB financing also comprises of an AC wearing course for the carriageway. The retained solution took due cognizance of the pavement residual strength/existing condition, hence sections identified for either strengthening or reconstruction. Three intervention strategies were identified as: • Treatment A: Road base repairs with minimum 150 mm GCS to existing road level plus 50mm AC overlay. • Treatment B: Scarification of existing road base to form new sub-base; 150 mm GCS road base and 50 mm AC wearing course. • Treatment C: 150 mm Capping layer; 250 mm pioneer layer; 200 mm natural gravel sub-base, 150mm GCS road base and 50mm AC Wearing course. The road rehabilitation is to generally follow the existing alignment with minor realignments.

Table 2.2: project alternatives considered and reasons for rejection Alternative name Brief description Reasons for rejection Double Use of double surface dressing for GOSL new policy for use of AC as Bituminous the wearing course – this presents wearing course for all trunk roads. (The Surface Treatment lower initial unit costs for ongoing Bank financed road project wearing course construction. shall also have an AC wearing course) The adjoining Makeni – Matotoka section has an AC wearing course for the carriageway. An AC wearing course presents comparatively less maintenance requirements compared to DBST. Major road re- Major departures from the existing Optimisation of earthworks, including alignment alignment (horizontal) and vertical retention of existing stable cut slopes. grade adjustments.

2.3. Project type The project has been designed as a standalone operation. This has been chosen in consideration of the Bank’s experience, as well as the practice being adopted in the Country by other development partners in the Transport sector. The Bank has not been involved in Sector Wide Approach (SWAP) in the transport sector, and likewise there is no experience from other development partners to be drawn on in this respect. The monitoring and evaluation of project outputs as well as impacts is also better facilitated with a standalone project. The choice of the project type is further supported by the assessment of the public financial management performance carried out in the Country.

2.4. Project cost and financing arrangements 2.4.1. The estimated total project cost for Section I (net of taxes and duties) is USD 44.35 million, equivalent to about UA 28.40 million excluding resettlement/ compensation costs. The resettlement and compensation costs are estimated at USD 2.16 million (equivalent to UA 1.38 million) for the entire 120 km of the Matotoka - Sefadu Road. The project cost details are presented in Tables 2.3, 2.4, 2.5 and 2.6 below, with further details included in Annex B2.

2.4.2. The Bank financing is provided as a mix of an ADF Grant through the FSF Instrument of UA 12 million, an ADF Grant under the PBA Instrument of UA 6.82 million and an ADF loan under the PBA Instrument of UA 3.18 million; a total of UA 22 million for the project. Sierra Leone is categorised in the yellow band under the Debt Sustainability Framework (DSF) and hence qualifies for both loans and grants. The financing is from the Country’s ADF-12 allocation (PBA UA 10 million and FSF UA 12 million). 2.4.3. The Bank will be the lead financier and will provide an ADF loan and grant amounting to UA 22.00 million (equivalent to USD 34.36) that is about 77.46% of total project cost excluding the resettlement and compensation costs. The GOSL has requested and received project co-financing from OFID that is to contribute USD 10 million (equivalent to UA 6.40 million) that represents 22.54% of the project costs excluding resettlement and compensation costs The Bank shall manage the OFID loan based on a joint financing for the civil works. GoSL will fund the resettlement and compensation costs of USD 2.16 million (equivalent to UA 1.38 million) for the entire 120 km stretch of the Matotoka-Sefadu Road. 2.4.4. The GoSL contribution for Section I, (Matotoka – Yiye) is less than 10%, however GoSL is financing the resettlement costs, and shall also finance the implementation of Section II, (Yiye – Sefadu) that completes the Matotoka – Sefadu road. Sierra Leone as a country is still yet to transit from fragility with relatively high debt level, and also making substantial provisions for infrastructure development through the development budget. On the basis of the foregoing, the minimised counterpart funding requirement for the project is supported. Details on the justification for minimisation of counterpart fund contribution are included given in Technical Annex B12. Table 2.3: Project cost estimates by component [amounts in million UA equivalents] Components Foreign currency Local currency Total Costs % costs costs foreign Civil Works 17.23 4.31 21.54 80.0 Consultancy Services 1.79 0.45 2.24 80.0 Project Audit 0.31 0.08 0.39 80.0 Compensation & resettlement* 0.00 1.38 1.38 0.00 Total base cost 19.34 6.21 25.55 75.69 Physical contingency 1.93 0.48 2.42 Price Contingency 1.45 0.36 1.81 Total project cost 22.72 7.06 29.78 76.29 Note: Exchange rates are provided in the introduction of this report (page (i)). * For Section I and Section II

Table 2.4: Sources of financing [amounts in million UA equivalents] Sources of financing Foreign. Local currency Total Costs % total currency costs costs ADB Group 17.60 4.40 22.00 73.88 OFID 5.12 1.28 6.40 21.49 GOSL 0.00 1.38 1.38 4.63 Total project cost 22.72 7.06 29.78 100

Table 2.5: Project cost by category of expenditure [amounts in million UA equivalents] Categories of expenditure Foreign currency Local currency Total Costs % costs costs foreign Works 20.24 5.06 25.30 80.0 Services 2.48 0.62 3.10 80.0 Compensation & resettlement* 1.38 1.38 0.00 Total project cost 22.72 7.06 29.78 76.29 * For Section I and Section II

Table 2.6: Expenditure schedule by component [amounts in million UA equivalents] Components 2012 2013 2014 2015 Total Civil Works 6.33 7.59 10.12 1.26 25.30 Consultancy Services 0.53 1.19 0.79 0.13 2.64 Project Audit - 0.14 0.18 0.14 0.46 Compensation & Resettlement 1.38 - - - 1.38 Total base cost 8.24 8.92 11.09 1.53 29.78

2.5. Project’s target area and population 2.5.1. The 70 km long Matotoka to Yiye is a continuation of the World Bank financed, Makeni – Matotoka road section (37 km). The road traverses the main towns of (from West to East): Matotoka, Makali, Makoni, and Masingbi, up to Ngo town/Yiye The immediate area of influence (AOI) of the road is 3,500 sq-km, with a population of approximately 604,871 persons (Kono district) and 355,740 (Tonkolili district). 2.5.2. The rehabilitation of the Matotoka – Yiye road that is expected to reduce VOC and transport costs in general, as well as reduction in travel time could play an important role in the development of the area. The current road condition severely hampers mobility of the people in the AOI who shall benefit from the intervention. 2.5.3. Many people in the AOI are engaged in subsistence agriculture and mining activities. The road traverses an area that is noted for its production of diamonds, timber, as well as cash and food crops for consumption and exports. Animal husbandry is the largest and virtually every household in the project area engages in some form of agriculture. The most common crops cultivated are watermelon, maize, cassava, coco yam, oil palm, cocoa, cola, garden eggs, okra, pepper, tomatoes, beans, cabbage and lettuce. Production of these crops is mostly on small peasant holdings, ranging between 0.5 to 1.5 ha. Diamond is the main mineral mined in Kono district, others include gold. Poor state of roads has slowed down growth and development in the area. The proposed rehabilitation of the road will boost the mining and agricultural activities in the AOI. 2.5.4. Given the dire needs of the population along the project road in terms of access to and quality of socio-economic infrastructure, rehabilitation of schools and a health center which is included as part of the project activities (complementary initiatives) shall also contribute to the improvement of livelihoods in the AOI.

2.6. Participatory process for project identification, design and implementation 2.6.1. An all-inclusive participatory approach was adopted in the design of the project. The various stakeholders that included the local community, NGOs, CBOs, women groups, youth groups, transporters and other road users were met and views sought to assist in the development of the project solutions. The same stakeholders shall be engaged during implementation of the project, through the briefings and during the community sensitisation process. 2.6.2. Systematic consultations with persons directly affected by the project and other key stakeholders were conducted as part of the study. A total of 25 consultative meetings were held with a cross section of communities likely to be affected by the project. The issues raised in these meetings, e.g. the need for speed control measures in the built-up centres and schools have as appropriate been integrated into the project design.

2.6.3. In addition, during the Project Preparation Mission, three consultative meetings were also held at Matotoka, Masingbi and Koidu/Sefadu which were attended by a cross section of participants that included; the local administration authorities; local communities; government officials; the police; teachers representatives; civil society groups, cultural leaders, private sector representatives and development partners to ensure that their inputs are incorporated into the project. The mission’s consultative meetings with the communities and the participatory process for project identification and design were attended by a total of about 200 participants. The inclusion of the complementary initiatives reflects some of the needs of the communities which were identified through participatory approach. Details of selected complementary initiatives are included in Technical Annex B11. 2.6.4. As part of the GoSL public disclosure process for the Environmental and Social Impact Assessment (ESIA) held between 29 th October and 03 rd November 2011 (in Freetown, Matotoka, Masingbi and Koidu), stakeholders were further briefed and had opportunity to better understand how their concerns have been addressed.

2.7. Bank Group experience, lessons reflected in project design 2.7.1. The Bank’s operations in Sierra Leone commenced in 1973. The Bank has as at end of September 2011 made a total commitment of UA 342.7 million, net of cancellations to Sierra Leone. There are seven on-going operations in the current portfolio at different stages of implementation with a total approved amount of UA 102.47 million. Infrastructure presently has the largest number of projects and commitments in the country’s portfolio, accounting for 61% (UA 66.56m) of the portfolio at the end of 2010. The portfolio includes an on-going transport sector project, Lungi – Port Loko Road Upgrading (62 km, Bank financing UA 26.26 million) for which implementation commenced in January 2011. Challenges were faced during the procurement of the Works, necessitating a re-launch of the process, arising from non-adherence to the Bank’s procurement guidelines by the Executing Agency. The Performance ratings of on-going projects are included in Appendix II. Whereas the Country Portfolio Performance Assessment Report prepared in 2010, indicated that 50% of the portfolio was at risk (this however being an improvement from the past), the ratings for the ongoing portfolio do not indicate any project at risk. 2.7.2. Lessons learned from Bank Group operations in the Country and Sector, as per PCRs as applicable have been integrated in the project design. The key areas are: (i) Institutional Capacity - the project shall benefit from the recent Bank-financed Institutional Support to the Transport Sector, under the Matotoka – Sefadu Road Studies, that included training to SLRA staff (numbering 142 persons) in various aspects including procurement, contract and financial management, network planning, quality control and Labour intensive road maintenance. The delays in procurement activities experienced in the past due to lack of capacity are thus expected to be minimised with the improved capacity of the Executing Agency (EA). The institutional support also included the establishment of a data bank system for documents at SLRA, which shall also be used in supporting the project. Through the improved documentation retrieval system the knowledge management has been greatly improved; (ii) Loan and Grant Conditions structuring - the conditions need to be structured in due regard to not impeding project implementation. This aspect has been carefully considered for this project; (iii) Project Support Benefits - the field office supports all existing projects to develop and revise their annual procurement plans in order to manage procurement processes more efficiently and reduce delays; this support shall be extended to this project; furthermore through the Bank’s decentralisation process the skill mix in the Field Office (FO) is proposed to be enhanced to further strengthen its support to operations in the country; (iv) Community Benefits – the project includes social infrastructure that would enhance direct benefits to the community. The sensitisation of persons in the AOI is to be focussed on training of trainers to

impart a multiplier effect in the sensitisation to improve sustainability; (v) Procurement arrangements of project activities - The project components have been packaged for simplicity of procurement process; (vi) Project Implementation - The executing agency has designated a project coordinator for Bank funded projects that was involved with the project design and has also identified key members of the Project Implementation Team (PIT). Lessons learned are summarised in Technical Annex B1 while ratings for on-going projects are provided in Appendix II. 2.7.3. In due regard to the poor portfolio performance in Sierra Leone (as noted in paragraph 2.7.1 above) specific measures have been put in place to improve the performance of the portfolio. The Bank and GoSL developed and are implementing a Country Portfolio Improvement Plan (CPIP). The details of this are included in the separately bound Technical Annex (Annex B1). 2.8. Key performance indicators 2.8.1. The key performance indicators for the project are presented in the results-based log- frame. The indicators identified for the purposes of measuring the outcomes are: (i) Road network in fair to good condition between Freetown and Koidu/ Sefadu; (ii) Vehicle Operating Costs; (iii) Travel Time; (iv) Road surface condition between Matotoka and Yiye. For the purposes of measuring output the following indicators have been identified (i) Length of inter-urban road rehabilitated; (ii) Length of feeder road rehabilitated; (iii) Number of persons with focus on females sensitised on TB, HIV/AIDS/ STIs, malaria, water related diseases; (iv) Number of schools to have received road safety campaigns and awareness on TB, HIV/AIDS/ STIs, malaria, water related diseases. 2.8.2. The project includes a Monitoring and Evaluation of Project Impacts under the Consultancy Services component. Under this arrangement, additional baseline data shall be collected/ updated and the project impacts recorded progressively; during implementation and post implementation. III – PROJECT FEASIBILITY 3.1. Economic and financial performance 3.1.1. The economic analysis for the project road has been assessed on Cost Benefit Analysis using the Roads Economic Decision (RED) model. The economic benefits considered for the evaluation are: (i) Savings in VOC for normal and generated traffic; (ii) Savings in road maintenance costs; (iii) Passenger time savings; and (iv) Other benefits comprising surplus agricultural production and residual value of the road’s pavement and structures. The traffic on the Matotoka – Yiye section is estimated as an average of 523 vehicles per day in 2011. The section of the road is of an asphalt surface, of fair to poor condition due to inadequate maintenance, soil conditions and inadequate drainage provisions. The section has the characteristics of a national road and has been considered as such in the economic evaluation as carried by the RED model. The transport costs were calculated through the VOC by using the HDM-4 sub-model and an estimate of the passenger travel time value. The VOC of a light truck on a good road is 31.9 US cent/km and 52.8 US cent/km on a bad road, thus the savings on VOC are 40% after rehabilitating the road. Agricultural production surplus in the AOI was computed over the project life cycle. The most direct impact after the project implementation is a reduction of VOC, it is anticipated that after the project completion, agriculture producers will have access to cheaper farm inputs and easier access to the markets. Another benefit is on the access time by the population and social services. This will bring greater value added to farmers. Benefits from agricultural surplus production as a result of the project road rehabilitation were estimated as USD 1.05 million in 2011.

3.1.2. Based on the costs and benefits related to the project, the evaluation of the investment, at 2011 prices, resulted in a 19.5 % economic internal rate of return for the project. A sensitivity analysis on a simultaneous rise in investment costs by 20% and a 20% decrease in the benefits (most unfavourable scenario) gives a 13.47% internal rate of return. On the basis of the economic analysis the chosen option for the project road is economically viable. The economic analysis for the project is summarized in Table 3.1 below, with the details presented in Annex B7. Table 3.1: Summary of Economic Analysis Net Present Value (NPV) in US$ Million 18.93 Economic rate of return (ERR) in % 19.51% Sensitivity of the ERR (20% increase in costs) 16.6% Sensitivity of the ERR (20% decrease in benefits) 16.0% Discount rate 12% Residual value of investment after 20 years 25%

3.2. Environmental and Social impacts Environment 3.2.1. The project is classified as a category 1 by the Bank’s ORQR department because it is considered to be a major road rehabilitation project and affects densely populated areas and will lead to loss of land and result in the project affecting 2,487 people. The ESIA for this project was prepared in September 2010 and an update was done in July 2011. The July 2011 assessment revealed that there was need for preparation of the RAP. The ESIA and RAP were then finalised in September 2011 and have been disclosed in the Country in accordance with the National Environmental Protection Act of 2008 and EIA Regulations. The ESIA and RAP Summary were posted on the Bank’s website on 31 st October 2011. 3.2.2. Negative impacts associated with the project include permanent land and property expropriation which will impact on crops and structures. This can be mitigated through adequate, fair and prompt compensation and also encouraging Project Affected Persons (PAPs) to replant lost crops in the new areas, as the livelihood of most people in the project area is derived from selling crops at markets and on the streets. Additional impacts shall be on existing water sources in close proximity of the road that shall be affected by the construction works. The potential reduction in water availability as a result of the relocation of about 29 roadside public water sources during construction will be mitigated by ensuring that the water points are moved or replaced well before construction. Where the water availability impact is temporary the people will be notified well in advance and water tankers will be available to provide drinking water. Dust and air emissions impacts will be mitigated through routine sprinkling of water on construction areas; conducting scheduled maintenance on equipment; adhering to standard operating procedures and controls and raising awareness for both the employees and the communities. Impacts on land will include soil erosion, degradation in quality, land uptake and changes in land use which can end up in surface runoff and general loss of vegetation. This will be mitigated by ensuring that cleared areas are timely re-vegetated, while materials sites will be landscaped and where possible rehabilitated in agreement with the landlords for agricultural purpose. Vegetation clearance will also be limited to bushes rather than trees and where roadside fruit trees are to be cleared, they will be compensated in financial terms but the people will be encouraged to re-plant. Public health & STI impacts will be mitigated through awareness and training. Spoil and waste management impacts will be mitigated through adhering to a waste management plan, applying the waste hierarchy and using approved sites.

3.2.3. The project will result in benefits such as employment, capacity building of existing structures such as NGOs or CBOs, renovation of three schools (located in Makali, Masingbi and Ngo Town/ Yiye) and ensuring sustainable supply of water at the schools and the health centre at Masingbi. The benefits will be enhanced through training and awareness programs that will target people in the communities who will be trained to train communities on an on- going basis through existing structures supported through the local government structures. Climate Change 3.2.4. There will be potential impacts on climate change caused by equipment, machines and vehicular exhaust emissions (that contribute to GHG) both during construction and post implementation. Nevertheless, mitigation measures will be put in place and among others, including ensuring the regular routine maintenance of construction equipment to ensure that machine emissions are minimised. 3.2.5. The National Adaptation Programme of Action (2007) for Sierra Leone shows that the country’s rainfall and temperature patterns have been changing over the years. The dry dusty cool air causes lowest daily country average temperature of 16 oC with a range of 10 oC-22 0C. The country’s wet season (May-October) averages about 2,746mm though variable across the country. Heavy rainfall accompanying dry spells often results in extensive flooding in many parts of the country. The effects of these climatic variability on infrastructure and others sectors of the economy are now evident in various parts of the country. 3.2.6. The proposed road design incorporates various considerations, supported by lessons learned, aimed at adapting to climate change especially to extreme events such as droughts and high rainfall scenarios in the project area: (i) selection of appropriate type of pavement; (ii) proper design and rehabilitation of drainage facilities; (iii) proper level of road embankment; (iv) provision of off-shoots for run-off where appropriate.

3.2.7. Although there is no baseline data on CO 2 emission in the project area, it is expected that in the long run, CO 2 emission into the atmosphere will increase due to an increase in traffic along the road. However, it is likely that a considerable amount of CO 2 emission will be reduced due to the fact that vehicles will reduce average driving time hence emission duration by half (taking 2hrs as opposed to the current 4hrs). Measures aimed at mitigating climate change include: (i) planting of grass (32 ha) and approximately 1,500 trees made of various indigenous species; (ii) proper reinstatement of borrow pits; (iii) proper waste management to avoid methane emissions; (iii) minimizing of bush clearing during the construction works; (iv) sensitization of communities and youth on climate change related topics such as bush fires and conservation agriculture. Gender 3.2.8. There are no direct negative impacts on gender anticipated as a result of project implementation. Moreover, once rehabilitated, the project road will boost small businesses undertaken by women in both urban areas and market centres, and the income generated from these businesses will facilitate improvement in the welfare of women and children at the household levels. It is anticipated that, the number of women operating market stalls and their overall involvement in project works will be more than that of men. In addition, to ensure that women receive equal opportunity in employment, a target of 30% of unskilled jobs has been set in the project to encourage contractors to employ as many women as would be willing and able to work on the project. 3.2.9. However, the likely influx of workers to the project areas and their interaction with local communities could increase the incidence of HIV/AIDS and STDs in the project areas which can have impacts on women. To address such concerns, it is proposed that, the contractor and Supervising Consultant should consider employment of the local communities

11 in order to limit the number of new people who are likely to find new partners and destabilise families. Moreover, the employment of Environmental/Social Scientists in both the Contractor and Consultant’s team to oversee effective mainstreaming of gender concerns and the implementation of the Environment and Social Management Plan (ESMP) in the project is provided for. Among the activities of the social scientists will be to sensitise and re-orient communities on gender mainstreaming and avoidance of violence against women. The work environment shall ensure that adequate facilities are made available for both men and women such as rest places and toilets. Social 3.2.10. The project will generate considerable socio-economic benefits at all layers of the rural communities, including youth, women and other vulnerable groups, in the respective project areas and in the national economy as a whole. The project is further expected to create at least 300 direct jobs accessible by the local communities; and indirect jobs that will emanate from the supply of goods and services to the project and its employees. These include setting up of food stalls, restaurants, offer of accommodation and hospitality, etc. Improved access will lead to expansion of production and enhanced marketing and household incomes as well as new businesses and general economic development along the rehabilitated road. It is expected that at least 30% of the jobs created shall target women. This aspect is to be supported through insertion of relevant clauses in the works contract. Implementation of the project will also lead to improved transportation services that are expected to drive an increase in the volume of trade and commercial activities in the two districts and in the regions. Improved transportation services are also expected to result in better access to health care, improved delivery of social services particularly in the health, agriculture and education sectors, and increased school enrolment rates. Other social benefits will include: opening up regional markets to local players, thus encouraging the sharing of formal and informal business practices, increasing exposure and connectivity to communities in neighbouring regions and countries, thus promoting cultural, social, and economic linkages. 3.2.11. The influx of people seeking jobs and economic activities coming to the area will have social implications including TB, HIV/AIDS and related STI diseases as well as impacts on the girl child education through workers luring girls to sex relations leading to higher school drop- out rates. As part of the ESMP mitigation measures, TB, HIV/AIDS and Malaria awareness programs and gender sensitization campaigns among communities, also targeting the school going population in the project area have been included. 3.2.12. The coordination and monitoring of the environmental, gender and social issues on the project shall be the responsibility of the Environmental unit of SLRA. Further details are included in ESIA and RAP summary and in the Technical Annex B8. Involuntary resettlement 3.2.13. A full RAP for the project was prepared. The project will trigger involuntary resettlement as a result of its activities. It is estimated that a total of 2,487 persons for the entire road are to be affected. The PAPs for Section I, (Matotoka – Yiye) is estimated at 1,186 persons and that for Section II, (Yiye – Sefadu) is 1,301 persons. The assets to be affected include about 4,863 trees (fruit and other), 42.97 ha of farmland, 498 housing structures, 29 community pumps, 14 mosques, 1 church, 1 community centre and 1 court barry (local court building). 3.2.14. The road rehabilitation will generally follow existing right-of-way, requiring only short horizontal adjustments without any major changes; however there have been encroachments/ settlements in the right-of-way for which GoSL would now want to clear. The total cost for compensation and resettlement is estimated at USD 2.16 million for both

Section I and Section II. This is equivalent to UA 1.38 million. The table 3.2 below shows total PAPs for each Section disaggregated by gender. Table 3.2: Summary of Project Affected Persons All PAPs Section I Section II Male 625 278 347 Female 553 252 301 Children 1,309 656 653 Total 2,487 1,186 1,301

IV – IMPLEMENTATION

4.1. Implementation arrangements 4.1.1. SLRA under the Ministry of Works, Housing and Infrastructure, that plays an oversight role, will be the executing agency for the project. The SLRA was established by an Act of Parliament in 1992 as a semi-autonomous government owned authority responsible for the administrative control, planning, development and maintenance of all roads and related structures. The SLRA was divested in 2003 under the first schedule of the National Commission for Privatisation Act 2002. It has the mandate and responsibility to maintain and develop the core road network. The SLRA is the implementing agency for all the AfDB funded road projects and it also has significant experience in implementing other donor funded road projects including those financed by World Bank, European Union, OFID and BADEA. 4.1.2. The Director General of SLRA has designated a project coordinator, overseeing Bank funded road projects including the Matotoka – Sefadu Road Rehabilitation project. The Director General shall also designate a Project Manager, acceptable to the Bank, for the day- to-day management of the project. The Project Manager shall be assisted by a Project Engineer both of whom shall be based at the SLRA headquarters. Additionally, the Chief Regional Engineers for the regions under which the project road falls (Makeni and Kenema Regions) shall provide oversight support, young graduate engineers within SLRA shall also be attached to the project. The SLRA staff shall all report to the Director of Development. SLRA is conversant with Bank procedures and has implemented donor financed projects; including the on-going Bank funded Lungi – Port Loko Road Upgrading Project. 4.1.3. All procurement of works and procurement of consulting services financed by the Bank will be in accordance with the Bank's Rules and Procedures for Procurement of Goods and Works or, as appropriate, Rules and Procedures for the Use of Consultants, using the relevant Bank Standard Bidding Documents. The SLRA will be responsible for the procurement of works and consulting services. 4.1.4. The civil works contract will be packaged as a single Works contract to be procured on the basis of International Competitive Bidding (ICB) without pre-qualification. The consultancy services of the project will be acquired on the basis of a short-list of qualified consulting firms. 4.1.5. SLRA will have a day-to-day direct responsibility for project management (including procurement, safeguards management, financial management, and M&E). SLRA has a clearly defined and well established authority structure, and staff with the requisite skills that have managed other Bank financed projects. A good number of SLRA staff have been trained in Bank disbursement, procurement, and financial reporting procedures. It is expected that the prior training and experience in critical Bank procedures will positively contribute to the speedy and timely financial implementation of the proposed project. An assessment of the

Financial Management (FM) capacity of SLRA concluded that with incorporation of the items listed in the FM Action Plan (presented in Annex B4), SLRA has adequate capacity to manage the FM (inclusive of disbursement and audit) for the proposed Bank project. The Sierra Leone Roads Authority (SLRA) that will manage the project including responsibility for financial management has sufficient capacity to meet the accounting and reporting requirements of the proposed project without the need for additional Financial Management staff, nor a separate accounting software for use by the project. The residual FM Risk as noted in the detailed assessment is moderate. The FM details are presented in Annex B4 and B6. 4.1.6. Implementation of the ESMP during construction is the responsibility of the contractor. SLRA through the Resident Engineer will supervise all environmental and social aspects on the site. Compliance with environmental laws and regulations will be ensured by the Environmental Protection Agency (EPA) both at national and district levels. As stipulated in the ESMP and RAP, implementation of the project shall involve a number of stakeholders and provisional sums and budgets have been included in the ESMP (and correspondingly in the works contract) for this purpose. It will be the role of SLRA to ensure that all stakeholders fulfil their requirements in the implementation of the road project. Various sectoral ministries, agencies and NGOs shall be involved in supervising and monitoring through their participation in the various fora. SLRA will take the overall responsibility to facilitate the involvement of all stakeholders in the supervision and monitoring of this project. 4.1.7. Direct Disbursement will be used for all payments of goods, works, services. The Bank will not contribute to operational costs nor the costs of resettlement associated with the project (to be borne by the GoSL). All disbursement will follow the procedures outlined in the Bank’s Disbursement Handbook. The SLRA is managing other road projects (financed primarily by the Arab funds and the EU) using direct payments as well. The selected disbursement modality for the proposed project is therefore fully aligned with those of other existing donors working with the institution, taking into account the institution’s own preferences (for this modality) and as well as its available capacity. 4.1.8. The project will be audited annually in line with the Bank’s Guidelines for Financial Reporting and Auditing of Projects. While the Auditor Service Sierra Leone (ASSL) is the statutory auditor for the SLRA, due to capacity constraints within the ASSL office, donor projects managed by the SLRA and by other entities are audited by private audit firms. Thus an auditor for the project will be selected based on TORs to be agreed with the Bank. The SLRA will ensure that the audited project financial statements, inclusive of the accompanying audit management letter, will be submitted to the Bank annually within 6 months of the end of the year audited.

4.2. Monitoring 4.2.1. The SLRA shall monitor the project through active participation in the monthly progress meetings, and any coordination meetings as shall be necessary as well as any required Special Meetings as the situation may demand. The meetings shall involve the Borrower, the Contractor and the Supervision Consultant, as well as other stakeholders that are contributory to the achievement of the project objectives. A specific Consultant (firm) shall be procured for the M&E aspect of the project in relation to the project impact and outcomes. The monitoring and evaluation shall include as an initial activity the derivation and establishment of the defined baseline indicators (prior to commencement of civil works) and subsequent periodic assessment and monitoring; up to and including post-construction (upon completion of civil works within the defects liability period). An Audit firm shall also be engaged to carry out project Financial Audits on an annual basis. Technical Audits shall also

14 be carried out by the audit firm. The Bank shall conduct Supervision Missions as part of its role in project management. The presence of an Infrastructure Specialist in the SLFO shall further strengthen the Bank’s supervisory role through provision of closer monitoring of the project. The key planned Bank monitoring activities are summarized in Table 4.1 below. Table 4.1 Key Monitoring Activities Timeframe Milestone Monitoring process / feedback loop Q2 - 2012 Project Launching Supervision and Progress Report Q4 - 2012 Procurement of Civil Works Completed Procurement Plan/Progress Report Q4 - 2013 50% of Civil Works completed Midterm Review & Progress Report Q4 - 2014 Substantial completion of civil works Supervision and Progress Report Q4 - 2015 End of Defects Liability period Supervision and Progress Report Q4 - 2015 Project Completion Project Completion Report

4.2.2. The Environmental Unit in SLRA will have a stake in the monitoring of the road activities during construction as well as during its operational stage. SLRA shall regularly provide the Bank with quarterly progress reports for the project including monitoring of environmental and social impacts as well as updates on the status of implementation of the ESMP and the RAP. The supervising consultant will ensure full compliance with ESMP and RAP mitigation measures and in conjunction with SLRA, provide as part of the quarterly progress reports (QPR), project implementation updates encompassing physical and financial progress of the project. 4.2.3. The project also includes the execution of technical audits that shall be carried out annually. The technical audit shall encompass the independent verification of the implementation of the works, to ensure due compliance with the technical requirements.

4.3. Governance 4.3.1. GoSL recognizes that good governance, including rule of law, human rights, and peace and security are essential pre-requisites in attaining the PRSP 2008 – 2012 for sustainable economic growth and development. In this regard, GoSL is committed to ensuring peace building and consolidation, improving national security, reforming the public sector, enforcing the National Anti-Corruption Strategy, improving access to justice and human rights; and promoting positive attitudinal change. 4.3.2. The Government recognized that the institutional framework wherein the Road Fund was domiciled within the SLRA was not conducive to the sustainability of the road network. Consequently, the Government embarked on institutional and road sector reforms intended to have an autonomous Road Maintenance Fund - phase out of the Road Fund within SLRA The Road Maintenance Fund is predominantly financed through user fees to support programmed periodic and routine road maintenance, based on prioritized maintenance plans. This will ensure that all the resources collected and targeted for road maintenance is accordingly appropriated for that purpose. The autonomous Road Maintenance Fund is now operational. 4.3.3. SLRA’s role is now limited to planning and monitoring, whereas the private sector will implement road maintenance works that shall be entirely outsourced. The project has included in its design specific governance risk mitigation measures to ensure that funds are used efficiently and for the intended purposes. In this regard, the project provides for independent Auditors to carry out both Financial and Technical Audits. Additionally the Bank’s prior review and approval of all project procurement activities will be required.

4.4. Sustainability 4.4.1. The sustainability of the project is predominantly hinged on road maintenance. The SLRA is responsible for the maintenance of the core road network in Sierra Leone. Routine maintenance funding mechanism is through the Road Fund that was previously under the SLRA. The restructuring of the Road Fund under an autonomous body, the Road Maintenance Fund Administration is one of the road sector reform commitments. The SLRA has also piloted the Performance-Based Management and Maintenance of Roads, which entails the engagement of contractors on a road corridor to execute routine maintenance over an agreed period, renewal of which is based on performance. The pilot phase of the Performance-based Management and Maintenance of Roads (PMMR) has been completed. Lessons learnt from the pilot phase, for example in the optimisation of contractor’s timely interventions for keeping the roads functional have been integrated in the post-pilot phase (2011 – 2013). This has enhanced private sector participation in road maintenance. 4.4.2. The sustainability of the project is a critical aspect for the derivation of project benefits. A large proportion of the benefits, reduction of vehicle operating costs (VOC), depend on the condition of the road, which in turn depends on the quality of construction as well as GOSL’s capacity to carry out scheduled routine and periodic maintenance. As part of the Road Sector Reform Commitments by GoSL, the formation of the Sierra Leone Road Fund Management Administration, an autonomous Government agency to manage the Road Fund is seen by development partners as a step in the right direction for maintenance activities in the country. This shall allow for the country to benefit from donor participation in road maintenance. The Road Fund Management has been operational since 1 st October 2011. 4.4.3. The road sector reforms outlined are (i) reform of the SLRA and reduce operational costs (operational costs reduced to target of 15% in the 2012 budget against projected Road Fund income); (ii) separation of the road fund from SLRA and establishment of an independent board for the road fund (this has been achieved) ; (iii) strengthening of the national road maintenance monitoring system unit; (iv) increase of the sources of funding for the road fund (the EU has committed funds to kick start this with other donors to also be formally approached); (v) pursue of the on-going decentralization process (the Feeder Roads Policy has been formulated and launched in June 2011). 4.4.4. The creation of an autonomous road fund management as part of road sector reforms is a positive move in the sustainability and road maintenance in particular. Timely and dedicated road maintenance is better assured through having the road fund managing dedicated funds for road maintenance. SLRA is now required to prepare work plans covering road maintenance activities for the road network (under their mandate) and submit to the Road Fund Administration for approval. In this case, road maintenance needs as identified by SLRA are timely met considering that the Fund is dedicated to road maintenance. 4.4.5. The revenue for the road maintenance fund as specified in Article 16 of the Road Maintenance Fund and Administration Act, 2010; shall include: (i) road user charges levied on fuel (currently at SLL 700/ltr equivalent to USD 0.175/ltr); (ii) vehicle license fees; (iii) vehicle registration fees; (iv) other fees collected under the road traffic act; (v) any capital gains or profits made from investments; (vi) donations or grants made in respect of any road related project or activity of the administration and (vii) any other road user charges that may be allocated to the fund under any other enactment. Article 17 of the Act further defines that the Fund shall be used to defray the cost of maintenance of the core road network. Fuel levy shall be directly paid to the Road Maintenance Fund account. This mitigates the risk of funds misappropriation.

4.4.6. Actual collection from the fuel levy averaged SLL 32.45 billion in 2007, SLL 43.59 billion in 2008, SLL 47.06 billion in 2009 and SLL 49.17 billion in 2010 (average of USD 13.5 million equivalent over the four years). The government is getting financial assistance from the donors in reducing the backlog but the financing is still inadequate. Therefore the government has adopted a maintenance policy whereby they allocate funds on the roads that are paved and in good condition, as a matter of priority over all other roads. The Matotoka - Sefadu road when completed will fall under this priority class. 4.4.7. Based on the financial statements of SLRA, the average expenditure on road maintenance in the last four years (2007-2010) is USD 10 million. Matotoka-Sefadu road is part of the 2,140 km class-A core road network, which is duly maintained, as a priority over the rest of the network. In the 5-Year Road Management and Maintenance Plan (2008-2012), USD 2,382/km is earmarked for maintenance of Matotoka-Sefadu road, which is more than the minimum required USD 1, 200 per km for other paved roads in Sierra Leone. The annual road maintenance needs indicated in the SLRA Strategy and Investment Plan (2009-2012) is presented in Technical Annex A. Donor participation in road maintenance enabled by road sector reforms as discussed earlier shall assist GoSL in addressing the gap in road maintenance needs. 4.4.8. Vehicle overloading has been identified as one of the project risks that could result in early pavement failures. In this respect GoSL needs to institute axle load control for the project road corridor, and indeed for the road network. The Bank through the Institutional Support under the Matotoka Sefadu Road Studies supported the GOSL in obtaining mobile weighbridges, which shall be deployed upon completion of the works, at strategic locations as a measure towards axle load control. 4.4.9. The Bank supported GoSL in the development of a Vehicle Overload Control policy. It is imperative that this is effected and implemented. With due regard to sustainability, whilst it is recognised that road failures may solely result from environmental conditions (unabated moisture ingress, material degradation and such other phenomena), axle overload is a major contributory factor to premature pavement failure underpinned by the principle of cumulative loading. The implementation of (effective) axle load control on the Sierra Leone road network would have a twofold benefit; provision of a source of revenue for the Road Fund through statutory fines set for non-compliance with axle load limits, and with compliance the roads are protected – this reducing the maintenance needs. In both cases the effecting and implementing of axle load control supports sustainability. A condition for the loan has therefore been included to support this. 4.5. Risk management 4.5.1. The potential risks to the project have been identified at the various levels of the Impacts, Outcomes and Outputs, and mitigation measures have accordingly been suggested. 4.5.2. The project risks at the Impact Level include; Lack of good governance, and lack of (or discontinuity of) political commitment. In as much as the potential risks would have a severe impact (Severity High), the likeliness is considered to be medium in consideration of the good governance mechanism put in place with continued government’s efforts towards realisation of the Poverty Reduction Strategy, and the present level of donor participation in the country. Moreover, the engagement of an external auditor, procurement method to be deployed, i.e. the use of ICB, and information disclosure policy at various stages of project implementation shall help in mitigating the risks at the project impact level. 4.5.3. The project risks at the Outcome level have been identified to include, lack of effective axle load control, and inadequate provisions for road maintenance. The mitigation measures at this level of risk include: GoSL to implement axle load control measures along

17 the road corridor by establishment of weighbridges/deployment of mobile weighbridges; Provisions for road maintenance being made through the Road Fund that has now been established independent of the SLRA through the Road Maintenance Fund Administration Act, 2010. Moreover, lack of adequate budget provisions for road maintenance is another risk. Continued sector dialogue through the development partners and the GoSL in the provisions of road maintenance fund revenues, (including mitigating the reduction in fuel levy) to ensure that road fund revenue is sustained in pace with the road maintenance needs, in addition the road maintenance support from donors following GoSL implementation on the road sector reforms. In this aspect, the EU has committed to provide direct budget support to the road fund effective 2012. 4.5.4. The project risks at the Output level include; project implementation delays, poor performance by the selected contractor, and supervision consultant, and poor delivery of the project sensitisation programmes. The mitigation measures at this level of risk include; (i) Executing Agency to designate a Project Management Team with a clear structure and mandate on their project implementation and monitoring role (ii) Definition and establishment of appropriate criteria for the selection of a contractor. Contractors’ satisfactory performance in similar assignments shall be considered in the procurement process, (iii) Engagement of well qualified and experienced personnel, and involvement of various stakeholders (NGOs, CBOs) in carrying out the various sensitisation programmes. 4.5.5. There is also a level of risk in GoSL delaying to finalize all matters of resettlement and compensation in accordance with Bank Policy. Disbursement of grant/loan funds will be conditional upon completion of the compensation and the resettlement of identified PAPs in the tranches as shall be agreed in consideration of works implementation.

4.6. Knowledge building 4.6.1. The implementation of this project will increase knowledge in preparation and management of road infrastructure projects in difficult conditions (high rainfall and sensitive environment). The consultancy for Monitoring and Evaluation will collect additional baseline data as well as monitoring data during project implementation which will be used to evaluate the performance of the project and analysed to improve future projects. Additional data (disaggregated by gender) shall be collected to measure the outcomes of the road on socio- economic development and its impact on poverty levels of the people living within the zone of influence and its contribution to the attainment of Millennium Development Goals (MDG). The data will become part of the national monitoring and evaluation data system that SLRA has developed over the years which are being used to track road development impacts. 4.6.2. The emphasis placed on project impact assessment is mainly aimed at responding to the need for knowledge development. Indeed, the establishment of a baseline situation prior to project activity start-up will provide a basis for comparison with a view to realistically assessing the level of achievement of the project development objectives. The comparative data will be obtained from the outcomes of the project impact assessment to be carried throughout the implementation phase. 4.6.3. The principal knowledge base and lessons drawn will be managed on the basis of a database created within SLRA. The database was set up under Bank financed Study for the Matotoka-Sefadu road. This shall effectively facilitate the management of all knowledge accumulated on the activities, the outputs and principal outcomes and lessons drawn from the project.

V – LEGAL INSTRUMENTS AND AUTHORITY

5.1. Legal instrument The Bank instruments to finance this operation shall be from ADF-12 Fragile States Facility of UA 12 million and ADF 12 PBA of UA 10 million, comprising of a concessionary loan amounting to UA 3.18 million, and a Grant of UA 6.82 million. The standard ADF loan terms and conditions are applicable to the loan, whilst the ADF and the FSF grant conditions shall apply to the grant.

5.2. Conditions associated with Bank’s intervention A. Conditions Precedent to the Entry into Force of the ADF Loan Agreement The entry into force of the Loan Agreement shall be subject to the fulfilment by the Borrower of the provisions of Section 12.01 of the General Conditions Applicable to Loan Agreements and Guarantee Agreements of the Fund. B. Conditions Precedent to the Entry into Force of the ADF and FSF Grant Agreements The entry into force of the Grant Agreements shall be upon signature by the Recipient and the Fund. C. Conditions Precedent to First Disbursement of the Loan and Grant Agreements The obligation of the Fund to make the first disbursement of the Loan and Grants shall be conditional upon entry into force of the Agreements, and the provision by the Borrower/Recipient of evidence of fulfilment of the following conditions in form and substance acceptable to the Fund: (i) OFID has committed to finance the Project and the Borrower/Recipient has made appropriate arrangements to cover any financing gap resulting from the failure to obtain OFID’s commitment (ii) having developed and delivered to the Fund a Resettlement Action Plan (RAP) together with a schedule (the “Works and Compensation Schedule”) detailing (A) the sections into which the civil works will be divided and (B) a timeframe for the compensation of Project Affected Persons (PAP) in respect of each section; [para 2.4.3 & 3.21] and (iii) having compensated and/or resettled in accordance with the RAP and the Works and Compensation Schedule, all Project Affected Persons in respect of the civil works under Section I of the Project. [para 2.4.3] D. Other Conditions (i) Within three (3) months of the date of signature of the Agreements, an implementation manual agreed upon between the Borrower/Recipient, the Fund and OFID for common implementation arrangements (institutional, procurement, disbursement, financial management, environmental and social measures, monitoring and evaluation, and reporting arrangements) for the execution of the Project ; and (ii) The submission of an implementation programme within twelve (12) months of the date of signature of the Agreements, for the effecting and implementation of the Vehicle Overload Control Policy and execution of axle load control on the national road network.[para 4.4.9 & 4.5.3]

E. Undertaking (i) The Borrower/Recipient hereby undertakes to implement and report on the implementation of the Environment and Social Management Plan, Environment and Social Impact Assessment, and the RAP on a quarterly basis in form acceptable to the Fund.

5.3. Compliance with Bank Policies This project complies with all applicable Bank policies.

VI – RECOMMENDATION Management recommends that the Board of Directors approve the proposed FSF grant of UA 12.00 million (from the FSF pillar I), ADF grant of UA 6.82 million and ADF loan of UA 3.18 million to the Government of Sierra Leone subject to the conditions stipulated for the rehabilitation of the Matotoka – Yiye road, Section I of the Matotoka – Sefadu Road.

Appendix I. Country’s comparative socio-economic indicators Develo- Develo- Sierra Year Africa ping ped Leone Countrie Countrie Basic Indicators Area ( '000 Km²) 72 30 323 80 976 54 658 GNI per capita US $ Total Population (millions) 2011 6.0 1,044.3 5,732 1,123 1800 Urban Population (% of Total) 1600 2010 38.2 39.9 45.1 77.3 1400 Population Density (per Km²) 2011 83.6 34.0 59.9 33.2 1200 1000 GNI per Capita (US $) 2010 338 1 565 3 304 38 657 800 Labor Force Participation - Total (%) 2011 37.3 40.1 65.6 60.7 600 Labor Force Participation - Female (%) 400 2011 51.2 41.0 51.7 52.2 200 Gender -Related Dev elopment Index Value 0

2007 0.354 0.433 0.694 0.911 2 002 2 003 2 004 2 005 2 006 2 007 2 008 2 009 2 010 Human Dev elop. Index (Rank among 187 countries) 2011 180 n.a n.a n.a Popul. Liv ing Below $ 1 a Day (% of Population) 2007-09 … 42.3 25.2 … Sierra Leone Africa Demographic Indicators Population Grow th Rate - Total (%) 2011 2.2 2.3 1.3 0.6 Population Grow th Rate - Urban (%) 2010 3.3 3.4 2.4 1.0 Population < 15 y ears (%) 2011 42.9 40.3 29.0 17.5 Population >= 65 y ears (%) 2011 1.9 3.8 6.0 15.4 Population Growth Rate (%) Dependency Ratio (%) 2011 86.3 77.6 55.4 49.2 Sex Ratio (per 100 female) 6.0 2011 95.6 99.5 93.5 94.8 5.0 Female Population 15-49 y ears (% of total population) 2011 24.8 24.4 49.4 50.6 4.0 Life Ex pectancy at Birth - Total (y ears) 2011 48.5 56.0 67.1 79.8 3.0 Life Ex pectancy at Birth - Female (y ears) 2011 44.4 57.1 69.1 82.7 2.0 Crude Birth Rate (per 1,000) 2011 39.1 34.2 21.4 11.8 1.0 0.0 Crude Death Rate (per 1,000) 2011 14.8 12.6 8.2 8.4 2 003 2 004 2 005 2 006 2 007 2 008 2 009 2 010 2 011 Infant Mortality Rate (per 1,000) 2011 100.6 78.6 46.9 5.8 Child Mortality Rate (per 1,000) 2011 141.2 127.2 66.5 6.9 Total Fertility Rate (per w oman) 2011 5.1 4.4 2.7 1.7 Sierra Leone Africa Maternal Mortality Rate (per 100,000) 2008 970.0 530.2 290.0 15.2 Women Using Contraception (%) 2007-09 … … 61.0 …

Health & Nutrition Indicators Phy sicians (per 100,000 people) 2008 2.0 58.3 109.5 286.0 Life Expectancy at Birth Nurses (per 100,000 people)* 2008 15.8 113.3 204.0 786.5 (years) Births attended by Trained Health Personnel (%) 2007-09 43.2 50.2 64.1 … Access to Safe Water (% of Population) 2008 49.0 64.5 84.3 99.6 71 61 Access to Health Serv ices (% of Population) 2007-09 … 65.4 80.0 100.0 51 Access to Sanitation (% of Population) 2008 13.0 41.0 53.6 99.5 41 31 Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2007 1.7 4.9 0.9 0.3 21 Incidence of Tuberculosis (per 100,000) 2010 682.0 294.9 161.0 14.0 11 1 Child Immunization Against Tuberculosis (%) 2010 99.0 85.3 81.0 95.1 2 003 2 004 2 005 2 006 2 007 2 008 2 009 2 010 2 011 Child Immunization Against Measles (%) 2010 82.0 77.9 80.7 93.0 Underw eight Children (% of children under 5 y ears) 2007-09 28.3 30.9 22.4 … Sierra Leone Daily Calorie Supply per Capita 2007 2 170 2 465 2 675 3 285 Africa Public Ex penditure on Health (as % of GDP) 2008 4.2 5.7 2.9 7.4

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2007-09 … 100.4 107.2 101.3 Primary School - Female Infant Mortality Rate 2007-09 … 90.0 109.2 101.1 ( Per 1000 ) Secondary School - Total 2007-09 … 37.7 62.9 100.1 Secondary School - Female 2007-09 … 33.7 61.3 99.6 120 Primary School Female Teaching Staff (% of Total) 2007 25.7 41.4 60.5 81.4 100 Adult literacy Rate - Total (%) 80 2009 40.9 65.1 80.3 98.4 60 Adult literacy Rate - Male (%) 2009 52.7 74.3 86.0 98.7 40 Adult literacy Rate - Female (%) 2009 30.1 56.2 74.8 98.1 20 0 Percentage of GDP Spent on Education 2009 4.3 4.7 3.8 5.0 2 003 2 004 2 005 2 006 2 007 2 008 2 009 2 010 2 011

Environmental Indicators

Land Use (Arable Land as % of Total Land Area) 2008 25.1 7.8 10.6 10.9 Sierra Leone Africa Annual Rate of Deforestation (%) 2007-09 … 0.7 0.4 -0.2 Annual Rate of Reforestation (%) 2007-09 … 10.9 … … Per Capita CO2 Emissions (metric tons) 2009 0.2 1.1 2.9 12.5

Sources : ADB Statistics Department Databases; World Bank: World Development Indicators; UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports. last update : October 2011 Note : n.a. : Not Applicable ; … : Data Not Available.

Appendix II. Table of ADB’s portfolio in the country List of active projects (loans and grants) by Sector:

Sector: Transport Name Type 1 Rating Amount (UA Date approved Disbursement (IP/DO) million) Rate*

Port Loko - Lungi Road G 2.08/2.67 26.26 June, 2009 23.27% Upgrading TOTAL APPROVALS 26.26

Sector: Agriculture Name Type 1 Rating Amount (UA) Date approved Disbursement (IP/DO) Rate*

Agriculture Sector G 1.29/1.75 12.00 February, 2005 23.48% Rehabilitation Nerica Dissemination G 1.86/1.75 2.85 September, 2003 88.04% Project TOTAL APPROVALS 11.35

Sector: Energy Name Type 1 Rating Amount (UA) Date approved Disbursement (IP/DO) Rate*

Bumbuna Project – Add L 2.08/2.50 0.71 September, 2010 94.61% Financing ADDAX Bio Energy L 0.00/0.00 21.50 April 8, 2011 0% TOTAL APPROVALS 22.21

Sector: Health Name Type 1 Rating Amount (UA) Date approved Disbursement (IP/DO) Rate*

Strengthening District G 1.93/1.75 17.00 September, 2005 43.02% Health Services TOTAL APPROVALS 17.00

Sector: Water Supply & Sanitation Name Type 1 Rating Amount Date approved Disbursement (IP/DO) (Million UA) Rate*

Three Towns Water G/L 0.00/0.00 28.50 October, 2010 0.23% Supply Project TOTAL APPROVALS 28.50 1- L:loan, G:grant * As of February 2012

Appendix III. Key related projects financed by the Bank and other development partners in the country

Project Title Donor Province Cost (USD Million) Port Loko – Lungi Road Upgrading AfDB Northern 41.65 Tokeh – Lumley Road Upgrading Kuwait Fund/ Western 16.60 OFID Freetown Hillside Bypass Road BADEA/OFID Western 13.00 Construction Kenema – Pendenbu Road BADEA/IDB/ Eastern 60.27 OFID Rural and Private Sector Development World Bank Countrywide 14.50 Project – Feeder Roads Component Freetown – Conakry Road (Rogbere – EU Northern 25.32 Panlap Section) Priority Infrastructure Works EU Countrywide 34.66 Highway Phase 2 EU Countrywide 29.93

Appendix IV. Map of the Project Area

Mat

Makeni

Matotoka Sefadu/ Masiaka Koidu

Yiye

Project Road

Section I Matotoka Yiye

Larger scale map included in the separately bound Technical Annex B13

TECHNICAL ANNEX A COUNTRY’S DEVELOPMENT AGENDA, OVERVIEW OF THE TRANSPORT SECTOR & DONOR’S SUPPORT A1 The third pillar of the PRSP – Agenda for Change 2008 – 2012 is geared towards development of a national transportation network to enable the movement of goods and people and thereby facilitate increased investment and economic activity. Improving road, river and air transport will be a priority for the next few years. This is geared in developing and implementing projects that focus on the rehabilitation of 2,055 km of feeder roads and of 160 km of roads in major provincial towns. This will be coordinated to ensure that the agriculturally productive regions have the feeder roads that will enable farmers to market their produce in a timely manner and increase their income through significant reduction in post-harvest losses. To facilitate the movement of people, goods and services, rehabilitation and construction of highways between the major urban centres in Sierra Leone as well as highways between Sierra Leone and neighbouring countries is envisaged. In the medium to long term, it is anticipated to construct a ring road in Freetown which will transform the capital city into the marvel of the sub-region, with circles of coastal roads linking up with hillside roads to give the capital a 21 st century road network. The possibility of constructing a ring road that will connect all the major cities shall be explored. A2 The transit between the International Airport at Lungi and the capital is currently very problematic and discourages potential international investors and tourists alike, resulting in significant economic losses. The immediate priority is to upgrade the link, through a combination of public and private investment in jetties, ferries and roads to allow access by water, road and air. In the medium to long term, it is planned to upgrade the International Airport and other domestic air fields. The country has good potential for sea and river transport. However, the jetties are derelict, ferries irregular, and many of boats unsafe. The Government will reconstruct ten jetties and install navigational aids and communication equipment. In addition, the Government will provide new ferries that will facilitate the movement of people from the international airport to the capital city, and thereby enhancing tourism, which has the potential to provide quality jobs especially for the youth. A3 The Bank’s Vision for development of the transport sector in Sierra Leone is reflected in its Joint Assistance Strategy (JAS), (for the Bank and the World Bank Group), which focuses on infrastructure and governance. Furthermore, one of the current Bank’s Medium Term Strategy priorities focuses on infrastructure. A4 All the transport sub-sectors have continuously experienced inadequate financial resources for sustainability of the infrastructure network. This lack of sustainability often necessitates reconstruction and replacement that contribute to high cost and environmental degradation. Aside from sustainability, Sierra Leone’s transport system lacks integration and inter-modal coordination. A5 The current state of the Road Network shows that about 42% of the National Road System, (NRS) is currently in poor condition (including the Matotoka – Sefadu Road) whilst only about 25% can be assessed as in Good to Excellent condition. The Table on the current state of the road network included in Annex A of the separately bound Technical Annexes also shows that the NRS is comprised of a total of about 19% Class A (Primary) Roads; only about 7.6% of Roads in the NRS are paved. A6 The composition of the Classified Roads in the NRS in poor condition shows that urban Roads constitute the highest percentage of roads in poor condition - about 39% followed by the Feeder Roads (Tertiary Class F) – about 33%.

Donor Support and Co-ordination A7 The Donor Support framework in Sierra Leone includes Consultative Group (CG) meetings, Development Partners Committee (DEPAC), Sector Working Groups and United Nations Country Team (UNCT) meetings.

A8 The Consultative Group (CG) meeting provides broader consultations between government and development partners and it is the forum where the Government usually presents its Poverty Reduction Strategy Paper (PRSP). The DEPAC meetings provide the forum for coordinating external assistance as well as assessing the implementation of the PRSP and these are co-chaired by the Minister of Finance and Economic Development, the Executive Representative of the Secretary General of the United Nations and the Country Manager of the World Bank every quarter. Following the adoption of the Sierra Leone Aid Policy at the London Consultative Group Meeting held in November 2009, the President now co-chairs DEPAC meetings once in a year. The UNCT meeting is a forum involving all the UN Agencies, the African Development Bank, World Bank and the International Monetary Fund and it is held every Thursday. A9 Dialogue at Sector Working Groups is mixed. While the cooperation and collaboration among donor partners as well as between government and donor partners in some sectors is strong, the level of coordination in other sectors is still weak. The Multi-Donor Budget Support (MDBS) framework is one that demonstrates strong donor coordination. In this case, budget support assistance to Government has been provided by four key donors including the African Development Bank (AfDB), World Bank (WB), UK Department for International Development (DFID) and European Commission (EC). The framework sets out clear goals, monitorable progress indicators and areas of responsibility for government and for each donor. A10 The EU is active in the road sector in Sierra Leone with the transport portfolio estimated at EUR 95 million. The EU has funded the rehabilitation and resurfacing of 406 km of primary and secondary roads, and 650 km of feeder roads. The EU intervention priority has been the rehabilitation or improvement of international connections including the road linking Freetown to Conakry, and the rehabilitation of other sections of the Trans West-African Highway. The World Bank participation in the transport sector in Sierra Leone includes the recently financed the rehabilitation of the Makeni – Matotoka road section (37 km) and the Bo – Kenema highway (69 km). The Matotoka – Sefadu Road adjoins this section

Sierra Leone Development Agenda and Donor’s Support

PRSP Donor's Support Challenges & Contraints Country's Development Agenda Pillars by Sector by Aid Modality Poverty with low growth rate Second PRSP - "Agenda for Change Low level of agriculture productivity & output Macroeconomic DBS Low level of economic diversification Enhancing National Electricity & Governance Unexplioted fishery & marine resources Enhancing Productivity in Agric & Fisheryes Poor national transportation network - quantity & value-added prod. In agric & fishery 11.7% 22.20% Macroeconomic stability - promote diversified commercial agriculture Unpredicted budget support - improved agricultural research & services Weak revenue performance - efficient & effective resource mgt system Infrastructure & External shock & high domestic debt burden - manage & exploit fishery & marine resources Road Network Financial & Private Sector Development National Transportation Network Development: Project Support Low level of private sector participartion - improved road, river and air transport 25.70% (Road Network Poor management of Natural Resources - developing the Freetown Ports only) Poor mining, tourism & land management - reintroducing rail transportation Economic& Infrastructure Development

Unexploited and poor management of agricultural production Governance Sustainable Human Development Human Capital Improved Delivery of Social Services 13.00% Low level of lives - helathcare, education, gender 31.70% Poor education Human Capital - water & sanitation, social protection Poor health systems - promoting employment

Principles

Managing Natural Macroeconomic Financial Sector & Private Sector Good Governance Resources Stability Development

TECHNICAL ANNEX B1 LESSONS LEARNED

Date & Intervention Project Rating /1 Lessons Learned /2 Amount Areas

Road **** Challenges were faced during the rehabilitation procurement of the Works, Social *** necessitating a re-launch of the Lungi – Port infrastructure 2009 process, arising from non- Loko Road 26.26UA Upgrading Consultancy *** adherence to the Bank’s million Project procurement guidelines by the Executing Agency. Relevant Audit *** training to SLRA staff was conducted.

When new policies and procedures are introduced there Civil Works **** should be transitional 1990- arrangements for existing projects. Bumbuna 2010 Hydro- UA Electric Electrical 64.85 **** Project Installations million Transmission *** Line Overall ****

Quality Project design should ensure that Improvement 1991- project activities are focused and for Basic 2006 packaged in a manageable Education, UA Overall *** Technical & manner. The project had many 14.54 Vocational activities in all the sub-sectors of million Training the education system thus causing Project a strain during implementation

STATUS OF PCRs Title Date completed/ Status* Quality Improvement for Basic Education, Technical and April 2010 Vocational Training Project (Education II) - Project Completion Report Third Economic Rehabilitation And Recovery Programme September 2008 ERRL II Health Services Rehabilitation Project August 2008 Second Economic Rehabilitation And Recovery January 2006 Programme - ERRL II Structural Adjustment Loan - Sal I Project November 2005 Economic Rehabilitation and Recovery Programme November 2005 Bumbuna Hydro-electric Project In the approval stage Matotoka Sefadu Road Studies and Institutional Support At preparation stage * As of December 2011

TECHNICAL ANNEX B2 MATOTOKA – YIYE ROAD REHABILITATION PROJECT COST TABLES BY PROJECT COMPONENT

No. PROJECT COMPONENTS COST USD UA 1 Civil Works Road Works 32,082,124 20,544,130 Complementary Initiatives 1,550,000 992,559 2 Consultancy Services Supervision of Works 2,186,088 1,399,885 Monitoring and Evaluation 1,015,053 650,000 Sensitisation and awareness on HIV/AIDS,STIs, TB, malaria and 200,000 128,072 water related diseases Road Safety Campaigns 100,000 64,036 3 Project Audit Technical/Financial 611,423 391,531 Base Cost 37,744,688 24,170,213 Contingencies Physical (10%) 3,774,469 2,417,021 Financial (7.5%) 2,830,852 1,812,766 Total Project Cost 44,350,008 28,400,000

BY SOURCE OF FINANCE Amount (million UA) Source Road Rehabilitation 22.00 AfDB Road Rehabilitation 6.40 OFID Compensation & Resettlement 1.38 GoSL

Project Items ADF Loan/Grant OFID GOSL Total (Million UA) (Million UA) (Million UA) (Million UA) Local Forex Total Local Forex Total Local Forex Total Local Forex Total 1.Civil Works 3.78 15.12 18.90 1.28 5.12 6.40 5.06 20.24 25.30 2. Services 0.53 2.11 2.63 0.53 2.11 2.64 3.Project Audit 0.09 0.37 0.46 0.09 0.37 0.46 4.Compensation & 1.38 1.38 1.38 1.38 Resettlement Total Project Cost 4.40 17.60 22.00 1.28 5.12 6.40 1.38 1.38 7.06 22.72 29.78

EXPENDITURE SCHEDULE BY COMPONENT in million UA Components 2012 2013 2014 2015 Total Civil Works 6.33 7.59 10.12 1.27 25.30 Consultancy Services 0.53 1.19 0.79 0.13 2.64 Project Audit - 0.14 0.18 0.14 0.46 Compensation & Resettlement 1.38 - - - 1.38 Total base cost 8.23 8.92 11.10 1.54 29.78

EXPENDITURE SCHEDULE BY SOURCE OF FINANCE in million UA Source 2012 2013 2014 2015 Total AfDB 5.27 7.01 8.56 1.22 22.06 OFID 1.59 1.90 2.54 0.32 6.34 GOSL 1.38 1.38 Total base cost 8.23 8.92 11.10 1.54 29.78

Component ADF Financing Loan Grant FSF Total Civil Works 3.18 6.82 8.90 18.90 Supervision 1.64 1.64 Monitoring and Evaluation 0.76 0.76 Sensitisation HIV/AIDS, 0.15 0.15 Road Safety Campaigns 0.08 0.08 Audit 0.46 0.46 3.18 6.82 12.00 22.00

TECHNICAL ANNEX B3 IMPLEMENTATION ARRANGEMENT Grant Recipient B3-1 The Ministry of Finance, on behalf of the GoSL will be the beneficiary of the Grant and Loan. Executing Agency B3-2 SLRA will be the EA of the project. SLRA was established in 1992 by an Act of Parliament and is responsible for the design, development and maintenance of all the national roads including provincial and urban roads. In general SLRA has competent staff who have participated in the implementation of similar projects financed by the Bank and other multilateral financing institutions. Moreover, training to SLRA has been provided under institutional support from the Technical Assistance within the Matotoka – Sefadu road study/design project that the Bank has funded under a grant given to the Government. Institutional Arrangements B3-3 The Matotoka – Yiye road works will be undertaken by a civil engineering works contractor. The supervision of the works will be undertaken by an engineering consulting firm.. Furthermore, in conjunction with the Sierra Leone Environmental Protection Agency; the supervision consultant will monitor the implementation of the environment and social mitigating measures. Project technical and financial audit will be executed by an independent firm of auditors. Another consultant will undertake monitoring and impact assessment of the project and will commence by taking base line studies and collect the initial project impact data on the first year upon project completion. B3-4 SLRA acting in the capacity of the executing agency will supervise the contractor and all the consultants and monitor all the aspects of project implementation, and report the implementation progress to the Bank on a quarterly basis. Upon completion of the project, SLRA will continue to undertake the monitoring and evaluation of the project impact.

Simplified Implementation Schedule TASK NAME START FINISH MATOTOKA-SEFADU ROAD PROJECT (SECTION I) 28-Mar-12 16-Nov-15 Project Approval 28-Mar-12 28-Mar-12 CIVIL WORKS 3-Apr-12 12-Nov-15 Launching of Tenders 8-May-12 8-May-12 Bidding, Bid Evaluation and Approval 9-May-12 5-Oct-12 Contract Award 6-Oct-12 19-Oct-12 Contract Implementation 13-Nov-12 12-Nov-14 Defects Liability Period 13-Nov-14 12-Nov-15 SUPERVISION 28-Mar-12 16-Nov-15 Bank Approval of RfP and Shortlist 28-Mar-12 26-Apr-12 Launching of RFP 25-Apr-12 25-Apr-12 Bidding, Bid Evaluation and Approval 26-Apr-12 12-Aug-12 Award of Contract 18-Aug-12 18-Aug-12 Contract Implementation 19-Aug-12 16-Nov-15 AUDIT 13-Nov-12 31-Mar-15 Bank Approval of Bidding Document 13-Nov-12 25-Jan-13 Launching of Tenders 25-Jan-13 25-Jan-13 Bidding, Bid Evaluation and Approval 26-Jan-13 22-May-13 Signature of Contract 29-May-13 29-May-13 Realisation of Audit 2013 13-Nov-13 12-Dec-13 Realisation of Audit 2014 2-Jun-14 30-Jun-14 Realisation of Audit 2015 1-Mar-15 31-Mar-15

TECHNICAL ANNEX B4 FINANCIAL MANAGEMENT & DISBURSEMENT ARRANGEMENT I. Sierra Leone Country Public Financial Management Assessment B4.1 The Bank has not yet conducted its own fiduciary risk assessment of Sierra Leone, but two PEFAs were recently completed on the country by the development partners; one on central government, and the other at sub national government level. Both reviews point towards sustained improvement in the country’s PFM performance, but material gaps and weaknesses still exist which currently preclude the development partners from fully utilizing the national financial management system for project execution: i) The budget formulation process is generally weak and in need of a complete overhaul if it is to link policy and planning to expenditures. ii) A Single Treasury Account (the Consolidated Revenue Fund) has now been operating for some time. The sub-accounts within the Treasury Account are treated as a consolidation of cash balances within the Bank of Sierra Leone (BoSL) which is reconciled on a regular basis. However, the consolidation process only applies to the Single Treasury Account maintained at the BoSL and therefore excludes a significant number of departmental bank accounts, mainly for externally assisted projects and sub-vented agencies which are held elsewhere. Consolidation of many of these balances into the treasury system would be a major improvement in the present cash management arrangements and make the Single Treasury Account a reality in practice. iii) While there has been a significant increase in timeliness of the finalization of the Financial Statements, GoSL prepares accounts which are not in line with IPSAS (cash) and neither is the full set of statements required by statute produced. iv) Regarding external oversight, the Audit Service Sierra Leone (ASSL) audit work performed in 2009 covered 69.3% of the total national actual expenditure of central government for the fiscal year 2008, and included some performance audits. However, a lot more needs to be done to develop audit approach and methodology and to enhance skills in specialist audit areas such as value for money, technical, and environmental audits.

B.4.2 The overall picture is therefore of general improvement, but with a number of key areas still to be addressed. For the proposed project, in line with government thinking on the management of roads, as well as the practice of other donors, both project management and finances will be managed outside central government, by the SLRA.

Summary of proposed FM arrangements Budgeting; Accounting System; Internal Controls and Procedures (including Internal Audit); Disbursement and Funds Flow; Financial Reporting and Monitoring; External Oversight arrangements. Further details of the FM Arrangement and Capacity Assessment, are included in the separately bound Technical Annexes of the PAR TECHNICAL ANNEX B5 PROCUREMENT ARRANGEMENTS Executing Agency B5-1 The receiver of the Bank Grant and Loan will be the Ministry of Finance. The Executing Agency for the project will be the Sierra Leone Road Authority (SLRA). SLRA is the legal entity, established by an act of parliament, responsible for the planning and implementation of all road projects in the country. A Project’s Coordinator has already been appointed from among SLRA engineers to be directly responsible for the project implementation and the Bank has approved the same. A Project Manager acceptable to the Bank shall be appointed for the day to day management of the project. B5-2 The Sierra Leone Roads Authority will be responsible for the procurement of works and consulting services. The resources, capacity, expertise and experience of SLRA have been reviewed and are determined to be adequate, with support of the technical assistance funded by the Bank under the Matotoka-Sefadu road study, to carry out the procurement activities required for the project/study. Summary of Procurement Arrangements Project Categories [ in millions UA] ICB NCB Other* Short List Non-Bank- Total Funded** 1. Civil Works 1.1. Rehabilitation of 70 km of Trunk 25.30 25.30 Road and Complementary Initiatives [18.90] [18.90] Sub-Total 25.30 25.30 [18.90] [18.90] 2. Consulting Services 2.1. Supervision of Construction of 1.64 1.64 Works [1.64] [1.64] 2.2. Monitoring & Evaluation 0.76 0.76 [0.76 ] [0.76 ] 2.3 Technical & Financial Audit 0.46 0.46 [0.46 ] [0.46] 2.4 Sensitisation and awareness of 0.15 0.15 HIV/AIDS, STIs, TB, Malaria and other [0.15] [0.15] diseases 2.5 Road Safety Campaigns 0.08 0.08 [0.08] [0.08] Sub-Total [3.10] [3.10] TOTAL 25.30 3.10 28.40 [18.90] [3.10] [22.00]

+Figures in brackets [ ] are amounts financed by the Bank Group.

Civil Works B5-3 Procurement of civil works including rehabilitation of 70 Km of trunk road and 20 km of feeder roads and other Complementary Initiatives such as improvements to schools and markets all located in the Tonkolili and Kono districts of the Northern and Eastern provinces of Sierra Leone totalling UA 25.30 million to be awarded as one contract will be carried out under International Competitive Bidding (ICB) procedures.

Consulting Services B5-4 Procurement of consulting services includes supervision of construction work valued at UA 1.64 Million, Monitoring & Evaluation valued at UA 0.76 million and project technical & financial audit valued at UA 0.46 million. The process for selecting firms for these services shall be through Short List and the method for evaluation is the Q uality and Cost Based selection method . The selection of firms to carry out the Sensitisation and Awareness for HIV/AIDS, STIs, TB, Malaria and other diseases valued at UA 0.15 million; and Road Safety Campaigns valued at UA 0.08 million shall be based on Least Cost Selection through the shortlist of firms/ NGOs . All the procurement under services shall be carried out by the SLRA. For contract amounts valued at less than UA 200, 000; the Borrower may limit advertisement of the procurement to national or regional newspapers. However, all eligible consultants, who wish to provide the required services, may express their interest to be short-listed. For contracts valued at more than UA200, 000 for Firms, advertisement of the procurement must be placed on the UNDB online and the Bank’s website.

General Procurement Notice B5-5 The text of a General Procurement Notice (GPN) will be agreed with the Sierra Leone Roads Authority and it will be issued for publication in UN Development Business online and on the Bank’s web site, upon approval by the Board of Directors of the Loan and Grant Proposal.

Review Procedures B5-6 The following documents are subject to review and approval by the Bank before promulgation: General Procurement Notice, Specific Procurement Notices, Tender Documents or Requests for Proposals from Consultants, Tender Evaluation Reports, including recommendations for Contract Award (works), or Reports on Evaluation of Consultants' Proposals, , Draft contracts (works), if these have been amended and differ from the drafts included in the tender documents, Reports on Evaluation of Consultants' Financial Proposals, including recommendations for Contract award, minutes of negotiations and duly initialled contracts documents.

National Law and Regulations B5-7 The national procurement Laws and Regulation governing public procurement in Sierra Leone were reviewed and found to comply with the Bank procedures except for the deviations on NCB, Shopping and Sole Sourcing procedures which do not meet the Bank’s standards. The Act does not mention conditions under which Parastatals would be allowed to bid and provision for advance contracting and retroactive financing. In addition, the Act permits margin of domestic preference under NCB but the provision does not elaborate how the margin shall be applied. The GoSL should revise and modify the deviations identified. In the interim, procurement under Bank financing will be in accordance with the Bank’s rules and procedures.

Procurement Plan B5-8 The Bank shall review the procurement arrangements proposed by the Borrower in the Procurement Plan for its conformity with the Loan and Grant Agreements and its Rules. The Procurement Plan shall cover an initial period of at least 18 months. The Borrower shall update the Procurement Plan on an annual basis or as needed always covering the next 18 months period of

32 project implementation. Any revisions proposed to the Procurement Plan shall be furnished to the Bank for its prior approval (the procurement plan is included in the separately bound Technical Annex, Annex B5).

TECHNICAL ANNEX B6 AUDIT ARRANGEMENTS

B6-1 The Audit Service Sierra Leone (ASSL) is the primary auditor of all government funds. However, due to capacity constraints, the ASSL currently outsources the audit of donor financed projects to private audit firms. Therefore, a private audit firm will be hired to carry out the audit of the project. The audit firm will be hired on TORs that are acceptable to the Bank. The SLRA will ensure that the audited project financial statements, inclusive of the accompanying audit management letter, will be submitted to the Bank annually within 6 months of the end of the year audited.

TECHNICAL ANNEX B7 ECONOMIC AND FINANCIAL ANALYSIS

Traffic Analysis B7-1 The base year 2011 weighted average motorized traffic for the road project was estimated to be 523 Annual Average Daily Traffic (AADT). The vehicular composition of the traffic indicated that small cars and light good vehicles account for about 56%, buses for 4 % and freight vehicles for the remaining 40%.There is no diverted traffic to the project road. The motorized passenger traffic projections for normal and generated traffic have been estimated to increase annually by 4.9 % between 2012 and 2025 and 2.5 % thereafter. During the same period freight vehicles are projected to increase by 7.4 and 2.5 % respectively. Thus the weighted average traffic is projected to be 2037 vpd by year 2034.

Methodology B7-2 The economic analysis for the project road has been assessed on Cost Benefit Analysis using the RED model. All appraisal components have been inputted into the model in USD and output values are also in USD. Investment costs have been distributed over three years of construction period in line with the projected implementation schedules at 25, 50 and 25 percent of costs assumed to be incurred in the first, second and third year respectively. The project implementation / construction are to commence in August 2012. With a construction period of 24 months, the first year of opening the road sections to traffic is assumed to be August 2014 and the analysis period goes up to 2034. B7-3 All analysis components have been entered into the model in USD at the rate of exchange prevailing in October 2011 (1 USD=SLL 4,482). For economic analysis, financial construction and maintenance costs have been converted into economic costs by applying a standard conversion factor of 0.85, in order to exclude transfer payments within the economy and correct for distortions between international and domestic prices caused by applications of duties and taxes on traded items. The measures of project worth used are the Economic Internal Rate of Return (EIRR) and Net Present Value (NPV) at 12% discount rate, given the opportunity cost of capital of 12% in Sierra Leone.

Assumptions B7-4 Selection of the maintenance strategy, in the “without project” case follows the historic maintenance pattern. The strategies incorporated into the appraisal and fitted in the model are incorporated into the economic evaluation are as follows:

“Without project” do minimum: this is essentially the historic routine maintenance practice comprising edge repairs, cleaning of culverts, crack resealing/patching or grading, maintenance of road signs and road markings, drainage clearance, etc; and periodic maintenance of re-gravelling the gravel section every 5 years and resealing with single bituminous surface treatment (SBST) every 8 years for the paved section. “With project” paved standard: involves routine maintenance, patching 5 percent of the surface area each year, and periodic maintenance of overlay/resealing every 8 years. B7-5 Residual values are likely to have analytical significance and have been assumed as 25% of the initial capital investment; thus credited to the project in the final evaluation year of 2034. B7-6 The economic costs taken into account are the Road Agency costs in the “with” and “without” project scenarios, which include both the cost of maintenance, and the investment cost of rehabilitation of the project road. These costs take into account the base cost for civil works plus the physical contingencies, consulting services for supervision of works and for project audit. The financial contingencies and compensation costs paid to people whose properties are affected are not included. Construction cost were revised in October 2011 to take into consideration the latest design cost estimates and the recent tender offers. B7-7 The economic benefits considered for the evaluation are: (i) Savings in VOC for normal and generated traffic; (ii) Savings in maintenance costs; (iii) Passenger time savings; and (iv) Other benefits comprising surplus agricultural production and residual value of the road’s pavement and structures. Accident cost savings are not quantified and valued due to incomplete documentation and therefore not taken into account in the estimation of project benefits. Benefits from agricultural surplus production as a result of the project road was derived from a farm survey analysis which estimated agricultural production in the Zone of Influence of the project road as USD 17.94 million and 10% of this was assumed as the agricultural production surplus after project implementation. For the analysis period, agricultural surplus production was assumed to grow at 5% approximately in line with GDP growth for the first 10 years and to reduce to 2% thereafter.

Result of Cost – Benefit Analysis B7.8 The economic evaluation using the measures of investment worth based on most likely traffic forecast scenario resulted in an Economic Internal Rate of Return of 19.5% which is higher than the current opportunity cost of capital of 12.0%. Another measure of project investment worth in the base case scenario indicates a NPV of USD 160.2 million at 12.0% discount rate. The result of the analysis confirms the viability of the project. Sensitivity Analysis and switching values B7.9 Sensitivity testing has been made on the result of the base case scenario with respect to all measures of investment worth for the project road and the results indicated in the Table below confirm the project viability. Switching value for capital works costs indicated that the costs would have to go up by more than 68% before project viability is threatened and while the result with respect to benefits indicated that benefits would have to drop by over 41% before the project economic rate of return fall below the 12.0% opportunity cost of capital.

Table B7-1 - Cost Benefit Analysis Results and Sensitivity Tests

Scenario Change EIRR NPV (%) (%) (USD million) Base Case - 19.5 18.93 Capital Costs +20.0 16.6 13.40 Benefits -20.0 16.0 9.61 Costs &Benefits +20.0/-20.0 13.5 4.08

TECHNICAL ANNEX B8 ENVIRONMENTAL & SOCIAL ANALYSIS

B8.1 The environmental review process B8.1.1 The environmental review process in Sierra Leone is based on national environmental legislation drawing from the 1994 National Environment Policy (NEP) whose overall goal is to achieve sustainable development. The Environment Protection Agency Act of 2008 establishes the Environment Protection Agency (EPA) with the overall mandate of effectively protecting the environment and other related matters. Section 23 (1) of the Act provides for the preparation of an ESIA for projects that are in its First Schedule (which includes roads construction and rehabilitation). The ESIA process in Sierra Leone involves writing a formal application letter to the EPA who responds by issuing the TOR’s for the ESIA process. Once completed, the ESIA report is then submitted and the EPA and the proponent agree on disclosure process. Disclosure is normally local, regional and sometimes national. In addition to the general disclosure, the EPA shares the report with all relevant government departments. Once the disclosure process is completed a disclosure report entailing the process, comments and responses is submitted to the EPA where the application is then considered complete and then decided upon by the EPA Board.

B8.1.2 The ESIA report and approval thereof in Sierra Leone does not contradict any of the Bank’s procedures. However as the environmental legislation stand in Sierra Leone, there is no requirement for a resettlement action plan to be compiled where there are resettlement issues. The gap is being addressed in the mining regulations which are intended to apply to various developments in addition to mining. For the purpose of this project a RAP and ESIA were prepared in September 2011 and are going through the national approval process. The EPA is the body responsible for monitoring ESMP compliance and has the necessary manpower to carry out this task. Environment and social benefits of the projects are included in the ESMP and their monitoring will be done at three levels; SLRA environment division, EPA annual reports and the Bank’s supervision missions.

B8.2 Stakeholders B8.2.1 Stakeholders consulted during the ESIA included: district technical officials; the NGOs and CBOs in Tonkolili and Kono districts; EPA Sierra Leone; Chiefdom authorities and their representatives; representatives of transport operators such as drivers of long distance trucks and the Okadas (motorbike riders), women and youth groups amongst others. Community consultative meetings were conducted through local languages such as Creole, Temne and Kono. The collection of field information also involved the use of questionnaires. A total of 25 consultative meetings were held with a cross section of communities between September 2007 and June 2008 for areas likely to be affected by the project. The meetings were held in the areas of Matotoka, Njaiama, Sewafe, Masingbi, Giema south, Mano and in Sefadu/Koidu. Further consultations with the communities were done in June –July 2011 during the compilation of the RAP. In September- October 2011 further consultations were held with government departments such as the Environmental Protection Agency, Ministry of Social Welfare, Gender and Children Affairs and the Road Transport Authority (SLRTA).

B8.2.2 The main issues raised during the consultative meetings included: the need for speed control measures in the built-up/trading centres and schools to reduce accidents; good communication, respect and cooperation between the contractor and the communities; community consultation with regard to identification and access to construction materials; sensitisation of the road workers so as to avoid luring school girls and married women to sex relations as this brews conflict etc. These issues are part of the ESMP and some form the core of the training and awareness program.

B8.2.3 As part of obtaining the environmental authorisation, SLRA will submit eighteen (18) hard copies and a soft copy of the ESIA report to the EPA for circulation to its Board members and professional bodies for review and comments. At the same time SLRA will disclose the ESIA summary to all affected and interested parties as per specifications given to them by EPA. SLRA will also disclose the ESIA report through publication of the summary in the newspapers; it will also make announcements over the media in the local languages regarding the project and the ESIA report. Furthermore, SLRA under the guidance and the supervision of the EPA will hold public hearings in the project areas for purposes of soliciting public views on the project. In addition, the EPA will also place the ESIA report in specific public places accessible to the general public to enable the affected and interested persons make comments on the impacts of project and such comments will be sent directly to the EPA. The Board of the EPA is vested with the powers to approve or reject the project based on the outcomes of the above processes. In addition to the national disclosure requirements, the ESIA summary with an annexed RAP summary (Annex 1) have been disclosed on the ADB’s website on 31 st October 2011 1 in line with the ESAP.

B8.3 Gender analysis B8.3.1 The GoSL National Gender Policy has the overall goal of mainstreaming gender concerns in the national development process in order to improve the social, legal/civic, political, economic and cultural conditions of the Sierra Leoneans and in particular, the women. Thus, during the implementation of rehabilitation works for Section I of the Matotoka-Sefadu road project, sensitisation will be undertaken with due attention to addressing the inherent gender inequalities and imbalances in the communities thus, the project will seek to promote the equitable participation of both women and men in all the stages of the project cycle. Of the target minimum of 500 people to be sensitised and trained, at least 50% will be women.

B8.3.2 A meeting with the Ministry of Gender revealed that the standard operational tendency is 50 50 but this is not always easy to achieve especially in projects such as the Matotoka Road project due to heavy loads. There is a national gender strategy plan sponsored by the World Bank but it has encountered roll out challenges due to lack of funding. The Ministry showed that women empowerment area is a priority and they have compiled a school gender related violence report. In this regard Matotoka project has ensured that toilets for boys and girls to be improved/built as part of the complementary initiatives are significantly far apart. The Ministry further mentioned that there is a national security action plan, a national women advancement policy and a gender mainstreaming policy that needs updating. They were advised by the Bank to link some of these activities with the EPA to ensure that gender mainstreaming becomes part of the ESIA process.

B8.3.3 There is a Domestic Violence Act to provide protection for the victims who are vulnerable to domestic violence (physical or sexual abuse; economic abuse (deprivation of economic/financial means); emotional, verbal or psychological abuse, including sexual harassment and intimidation). An offence under subsection (1) shall be punishable by a fine not exceeding Le 5,000,000 (USD 1,200) or by a term of imprisonment not exceeding 2 years or by both such fine and imprisonment. From the Gender perspective, the Act mainstreams measures that serve to guarantee women and other vulnerable groups in road works.

B8.4 Social analysis B8.4.1 As part of Government's overall social and development strategy, the National HIV/AIDS Policy for Sierra Leone, 2002 was put in place to establish HIV/AIDS prevention and control programmes. Despite the fact that SL HIV/AIDS infections are lower than the average for the continent, the Matotoka - Sefadu road project will have HIV/AIDS awareness programmes that will include Tuberculosis as it is more of a challenge in terms of infections. Furthermore, the Ministry of Health and Sanitation launched the National Health Policy 2002 which is aimed at managing the

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36 spread of HIV/AIDS, the escalating of TB and malaria, as well as the more general problems associated with the epidemiological and demographic transition.

B8.4.2 The Local Government Act 2004 establishes the local councils made up of several Wards. Each ward establishes a Ward Committee, which consists of; Councillor, the Paramount Chief of the Chiefdom and not more than ten others, at least five of whom shall be women, and a resident in the ward elected by the ward residents. The Ward Committees are responsible for mobilizing residents in their wards to implement the self-help and development projects; they also provide focal points for discussion of local problems and needs and take remedial action where necessary. The local and town councils will equally be of use to the project in undertakings such as mobilizing the communities to participate in project activities. Since they have women representatives, they provide windows of opportunities for mainstreaming gender into the project. Furthermore, these committees can assist contractors to access construction materials from the communities through lease agreements.

B8.4.3 There is a strong NGO sector in Sierra Leone responsible for creating public interest in a number of public affairs such as environment and development. With regard to the Road project, the CSOs can take a role in some aspects such as such tree planting along the roadside

TECHNICAL ANNEX B9 PROJECT PREPARATION AND SUPERVISION Project Processing Milestones

Activity Date Preparation May/June 2011 PCN Review by OpsCom 21 September 2011 Appraisal October 2011 Readiness Review and Country Team Clearance December 2011 Sector VP clearance February 2012 Negotiations March 2012 Board Approval 28 March 2012 Planned Date of Effectiveness July 2012 Planned Date of Mid-term Review September 2013 Planned Closing date December 2015

Bank Staff or Consultants who participated in the Project Preparation and Appraisal

Name Title Unit R. Malinga Transport Engineer OITC.1 M. Minja Transport Engineer OITC.1 M. Benard Transport Economist OITC.1 P. Musa Transport Engineer OITC.2 K. Ntoampe Environmentalist ONEC.3 N. Kulemeka Socio-Economist ONEC.3 I. Wilson Infrastructure Specialist SLFO J. Nyamukapa Financial Management Specialist ORPF.2 S. Kamara Financial Management Officer SLFO S. Momoh Procurement Officer SLFO S. Sesay Macro Economist SLFO A. Savage Transport Economist Consultant N. Omagor Environmentalist Consultant E. Mibey Social Economist Consultant

Key Institutions Consulted during Project Preparation and Appraisal Ministry of Finance and Economic Development Ministry of Works, Housing and Infrastructure Sierra Leone Environmental Protection Authority Ministry of Gender, Social Welfare and Children Affairs Sierra Leone Road Authority Sierra Leone Ports Authority Sierra Leone Road Transport Authority Sierra Leone Road Maintenance Fund Administration Statistics Sierra Leone Central Bank of Sierra Leone (Research Unit), Ministry of Health and Sanitation, Ministry of Education, Youth and Sports Delegation of the European Commission OPEC Fund for International Development. Stakeholders – Local leaders, Police, Transporters, Road users, Local communities, NGO, Women groups, Youth groups among others