MUNICIPALITY OF VELES World Bank PROJECT APPRAISAL DOCUMENT FOR CONSTRUCTION OF CITY MARKET VELES Municipal Services Project Improvement Municipal Skopje April 2021 Table of Content Summary ....................................................................................................................................................... 8 1 Project description .............................................................................................................................. 11 1.1 General Information on the municipality of Veles ..................................................................... 12 1.2 Demographic and economic profile ............................................................................................ 13 1.2.1 Demographic table .............................................................................................................. 13 1.2.2 Gender and age ................................................................................................................... 14 1.2.3 Minority repartition ............................................................................................................ 15 1.2.4 Economy and employment ................................................................................................. 15 1.2.5 Relevant extracts of the municipality’s documents about the project .............................. 17 1.3 General description of the Project .............................................................................................. 17 1.3.1 General description ............................................................................................................. 17 1.3.2 Area concerned by the project ........................................................................................... 17 1.3.3 Current situation ................................................................................................................. 18 1.3.4 Project goals ........................................................................................................................ 21 1.3.5 Project beneficiaries ........................................................................................................... 21 1.3.6 Knowledge and experience of the municipality of Veles .................................................... 21 1.3.7 Conclusions ......................................................................................................................... 23 2 Social assessment ............................................................................................................................... 24 2.1 Social study ................................................................................................................................. 25 2.1.1 Social diversity and gender ................................................................................................. 25 2.1.2 Institutions, rules, and behavior ......................................................................................... 26 2.1.3 Stakeholders........................................................................................................................ 27 2.1.4 Citizens engagement ........................................................................................................... 27 2.1.5 Social risks ........................................................................................................................... 29 2.2 Other fields of consideration ...................................................................................................... 29 2.3 Resettlement issues .................................................................................................................... 29 2.4 Conclusion on the project potential success and recommendation .......................................... 30 3 Environmental Impact ......................................................................................................................... 31 3.1 LOCATION OF PROJECT SITE ............................................................................................................... 32 3.2 MAIN PROJECT ACTIVITIES WITH ENVIRONMENTAL IMPACT ..................................................................... 34 3.3 MAIN ENVIRONMENTAL IMPACT AND SENSITIVE RECEPTORS .................................................................... 34 3.4 ENVIRONMENTAL MITIGATION PLAN FOR THE PROJECT: CONSTRUCTION OF CITY MARKET AREA IN MUNICIPALITY OF VELES .................................................................................................................................................... 38 2 3.5 ENVIRONMENTAL MONITORING PLAN FOR THE PROJECT: CONSTRUCTION OF CITY MARKET AREA IN MUNICIPALITY OF VELES .................................................................................................................................................... 41 4 Technical solutions .............................................................................................................................. 47 4.1 Description .................................................................................................................................. 48 4.1.1 Structure of the construction.............................................................................................. 51 4.1.2 Walls .................................................................................................................................... 54 4.1.3 Floors ................................................................................................................................... 54 4.1.4 Doors and windows ............................................................................................................. 55 4.1.5 Water supply and sewerage ............................................................................................... 55 4.1.6 Electrical installations ......................................................................................................... 55 4.2 Analysis and evaluation .............................................................................................................. 55 4.3 Conclusions and recommendations ............................................................................................ 55 4.4 Alternative solutions ................................................................................................................... 56 5 Financial analysis ................................................................................................................................. 57 5.1 Project cost ................................................................................................................................. 58 5.2 Credit capacity ............................................................................................................................ 60 5.3 Loan repayment .......................................................................................................................... 61 5.4 Review of the municipal account ................................................................................................ 62 5.5 Review of accounts of the Municipal Public Enterprise “Derven” .............................................. 65 5.6 Analysis of the financial feasibility of the project ............................................................................. 67 5.6.1 Time horizon .............................................................................................................................. 67 5.6.2 Limitations of the analysis ......................................................................................................... 67 5.6.3 Initial investment ....................................................................................................................... 67 5.6.4 Inflation ...................................................................................................................................... 67 5.6.5 Discount rate .............................................................................................................................. 67 5.6.7 Projection of operating cash flows ............................................................................................ 68 5.6.8 Projection of Benefits ................................................................................................................ 68 5.6.9 Projection of Costs ..................................................................................................................... 69 5.6.10 Sensitivity analysis ................................................................................................................... 71 Conclusions ............................................................................................................................................. 71 6 Cost-benefit analysis ........................................................................................................................... 72 6.1 General information.......................................................................................................................... 73 6.1.1 Framework of the analysis ......................................................................................................... 73 6.1.2 Limitations and constraints of the study ................................................................................... 73 3 6.1.3 Scope .........................................................................................................................................