Document of The World Bank Public Disclosure Authorized Report No: 20443-EGT PROJECT APPRAISAL DOCUMENT ON A Public Disclosure Authorized PROPOSED LOAN IN THE AMOUNT OF US$50.0 MILLION EQUIVALENT TO THE ARAB REPUBLIC OF EGYPT FOR A SECOND NATIONAL DRAINAGE PROJECT Public Disclosure Authorized May 15, 2000 Public Disclosure Authorized Rural Development,Water and Environment Group Middle East & North Africa Region CURRENCYEQUIVALENTS (Exchange Rate As of end February 2000) Currency Unit Egyptian Pound LE 1.0 USS0.29 USs 1.0 = LE 3.40 LE = 100 Piasters (PT) GOVERNMENTOF THE ARAB REPUBLIC OF EGYPT FISCAL YEAR July I - June 30 WEIGHTS AND MEASURES Egvptian and/or Metric Unit English/US Unit I feddan (fd) = 1.038 acres(ac) I feddan (fd) = 0.420 hectares I hectare (ha) = 2.380 feddan (fd) I kilometer (km) = 0.621 rmiles (mi) I meter (m) = 3.281 feet (ft) I metric ton (mt) = 0.984 long ton (ton) ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CAP Compliance Action Plan CUA Collector Users Association DAS Drainage Advisory Service DRI Drainage Research Institute DUA Drainage Users Association ECRI Environmental and Climatic Research Institute EEAA Egyptian Environmental Affairs Agency EIA Environmental Impact Assessment EMP Environmental Management Plan EPADP Egyptian Public Authority for Drainage Projects ERR Economic Rate of Return EU European Union FAO Food and Agriculture Organization of the United Nations FARAH Financial, Accounting, Reporting and Auditing Handbook FMS Financial Management System FMPM Financial Management Procedures Manual GD General Directorate GDAFA General Directorate of Administrative and Finance Affairs GIS Geographic Information System GDP Gross Domestic Product GOE Government of Egypt IAS Irrigation Advisory Services IBRD International Bank for Reconstruction and Development llP Irrigation Improvement Project [CB International Competitive Bidding INTESP The Netherlands-funded Institutional and Technical Support Program IS Intemational Shopping IUA Irrigation Users Associations Vice President Jean-Louis Sarbib Country Director Khalid Ikram Sector Director Doris Koehn Task Team Leader Nejdet Al-Salihi Co-Task Team Leader Tijan Sailah ABBREVIATIONSAND ACRONYNIS(cont'd) KfW Kreditanstaltfir Wiederautbau(German Bank for InternationalDevelopment Financing) LIB LimitedInternational Bidding MADWQ The Monitoringand Analysisof DrainageWater Quality Project M&E Monitoringand Evaluation MED The Mechanicaland ElectricalDepartment of MWRI MIS ManagementInformation System CMRI ChannelMaintenance Research Institute of theMWRI MOIC Ministryof InternationalCooperation MWRI TheMinistry of WaterResources and Irrigation NAWQAM Canadian-fundedNational Water Quality and Availability Management Project NCB NationalCompetitive Bidding NDP NationalDrainage Project NGO Non-GovernmentalOrganization NPV Net PresentValue NS NationalShopping O&M Operationsand Maintenance PEGD Planningand EvaluationGeneral Directorate PIP ProjectImplementation Plan PMT ProjectManagement Team PMR ProjectManagement Report PVC PolyvinylChloride RIGW The ResearchInstitute for Groundwater SADAS SectorAffairs and DrainageAdvisory Service SOEs Statementof Expenditures TA TechnicalAssistance USAID UnitedStates Agency for InternationalDevelopment USEPA UnitedStates Environmental Protection Agency WRC WaterResearch Center WUA WaterUsers Association ArabRepublic of Egypt The SecondNational Drainage Project CONTENTS Page No. A. Project Development Objectives................................................................. 2 1. Project development objective................................................................. 2 2. Key performance indicators................................................................. 2 B. Strategic Context................................................................. 2 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project......... 2 2. Main sector issues and Govemment strategy................................................................. 3 3. Sector issues to be addressed by the project and strategic choices................................. 3 C. Project Description Summary ................................................................. 5 1. Project components................................................................. 5 2. Key policy and institutional reforms supported by the project .......................................5 3. Benefits and target population ................... .............................................. 7 4. Institutional and implementation arrangements.............................................................. 7 D. Project Rationale................................................................ 10 1. Project altematives considered and reasons for rejection............................................. 10 2. Major related projects financed by the Bank and/or other development agencies ....... 10 3. Lessons learned and reflected in the project design...................................................... 10 4. Indications of borrower commitment and ownership ............................... ....................11 5. Value added of Bank support in this project................................................................ 11 E. Summary Project Analysis ................................................................ 12 1. Economic................................................................ 12 2. Financial ................................................................ 12 3. Technical ................................................................ 13 4. Institutional................................................................ 13 5. Social................................................................ 14 6. Environmental Assessment................................................................ 15 7. Participatory approach ................................................................ 16 F. Sustainability and Risks................................... 17 1. Sustainability............................ 17 2. Critical Risks ............................ 17 3. Possible Controversial Aspects............................ 18 G. Main Loan Conditions......................... 18 1. Effectiveness Conditions ......................... 18 2. Other ......................... 18 H. Readinessfor Implementation......................... 18 I. Compliancewith Bank Policies........................................................... 19 ANNEXES Annex 1 Project Design Summary Annex 2 Project Description Annex 3 Estimated Project Costs Annex 4 Economic Analysis Annex 5 Financial Analysis Annex 6 Procurement and Disbursement Arrangements Table A Procurement Methods Table B Prior Review Thresholds Table C Project Costs by Procurement Arrangements Table 1 Tentative Tendering and Disbursement Schedule for Contracts to be financed by the World Bank Table 2 Tentative Tendering and Disbursement Schedule for Contracts to be financed by the EIB Table 3 Tentative Tendering and Disbursement Schedule for Contracts to be financed by the KfW Table 4 Tentative Financial Arrangementsand Disbursement Categories (All amounts in '000 US$) Annex 7 Institutional Aspects Annex 7A Sunmmaryof Social Assessment Annex 8 Environmental Management Plan Annex 9 Project Processing Budget and Schedule Annex 10 Documents in Project File Annex 11 Statement of Loans and Credits Annex 12 Country at a Glance MAPS: IBRD Nos. 30870 and 30871 Arab Republicof Egypt Second NationalDrainage Project Project Appraisal Document Middle East and North Africa Regional Office Rural Development Water and Environment Department Date: May 15, 2000 Team Leader : Nejdet Al-Salihi Country Manager/Director: Khalid Ikram Sector Manager: Salah Darghouth Project ID: EG-PE-45499 Sector Director : Doris Koehn Lending Instrument: SIL Sector Theme(s) : Rural Development Poverty Targeted Intervention: [ ] Yes [X] No Project Financing Data [X] Loan [ ] Credit [ Grant [] Guarantee [] Other [Specify] For Loans/Credits/Others: Amount (US$m): US$50.0 Proposed terms: [] To be defined [ Multicurrency [x] Single currency [] Standard Variable [ Fixed [x] LIBOR-based Grace period (years): 5 years Years to maturity: 20 years Commitment fee: 0.75% Service charge: % Front-end fee on Bank loan: 1.0% finacig plait (US$mn): Government 134.8 0.0 134.8 KfW (Germany) 0.4 39.6 40.0 EIB 0.0 50.0 50.0 Netherlands 0.6 3.0 3.6 IBRD 0.0 50.0 50.0 Total 135.8 142.6 278.4 Borrower: The Arab Republic of Egypt Guarantor: N/A Responsible agency: The Egyptian Public Authority for Drainage Projects (EPADP) of the Ministry of Water Resources and Irrigation (MWRI). Estimated disbursements (Bank FY/US$M): -F: - 01 2002 2003 2004E Annual 3.0 9.0 10.0 10.0 8.0 6.0 4.0 Cumulative 3.0 12.0 22.0 32.0 40.0 46.0 50.0 Project implementation period: 6 years Expected effectiveness date: January 1, 2001 Expected closing date: June 30, 2007 Implementing agency: The Egyptian Public Authority for Drainage Projects (EPADP) Contact person: Eng. Mohammed Fathi A. Hassan, Chairnan Address: 13 Giza Street, Giza P.O. Box 12211, Egypt Tel: 20-2-573-8039 Fax: 20-2-573-8647 E-mail: cpadp Lcoidsc.gov.eg p:\egypt\re\45499\BOARD\PADBOARDMAY152000.doc A: Project DevelopmentObjectives 1. Projectdevelopment objective: (see Annex 1) The proposed project would be the second time slice of the Government's National Drainage Program of which the first phase (consisting of about 0.7 million feddans of subsurface drainage) is currently being completed under the World Bank-financed National Drainage Project (Ln.