Document of The World Bank Public Disclosure Authorized FOR OFFICIAL USE ONLY Report No: 39308 - ML PROJECT APPRAISAL DOCUMENT ON A Public Disclosure Authorized PROPOSED CREDIT IN THE AMOUNT OF SDR59.5 MILLION (US$90.0 MILLIONEQUIVALENT) TO THE REPUBLIC OF MALI FOR A Public Disclosure Authorized SECOND TRANSPORT SECTOR PROJECT April 30,2007 This document has a restricted distribution and may be used by recipients only in the Public Disclosure Authorized performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective March 3 1,2007) Currency Unit = Franc CFA CFAF 495 = US$1 US$1.51326 = SDR 1 US$1= SDR 0.660825 FISCAL YEAR January 1-December 3 1 *. 11 - ABBREVIATIONS AND ACRONYMS ACDP Agricultural Competitiveness and Diversification Project AFD Agence Franqaise de Dheloppement (French Agency for Development) AfDB African Development Bank AGEROUTE Agence d’extcution d’Entretien des Travaux Routiers (Road Works Execution Agency) AGETIER Agence d’extcution des Travaux d’hfiastructure et d’Equipements Ruraux (Infrastructure and Rural Equipment Works Execution Agency) ASPEN Africa Safeguards Policy Enhancement BOAD Banque Ouest Afhcaine de DCveloppement CAS Country Assistance Strategy CDD Community Driven Development CETAC Technical Committee of Support to Towns CFAA Country Financial Accountability Assessment CFAF Franc ofthe French Community ofAfhca CMDT Compagnie Malienne pour le Ddveloppement des Textiles (Malian Textile Development Company) CMOD Convention de Maitrise d’Ouvrage DelkguCe (Delegated Works Management Contracts) CPAR Country Procurement Assessment Report CSLP Cadre Stratdgique de Lutte contre la Pauvretd (Strategc fiamework to fight poverty) DAF Division Administrative et Financidre (Administrative and Financial Department in each Ministry) DGMP Direction Gdndrale des Marclids Publics (Procurement Department) DNR Direction Nationale des Routes (National Roads Directorate) DNTTMF Direction Nationale des Transports Terrestres et Fluviaux (National Transportation Directorate) DRCTU Direction de la Rdgulation et du Contr6le du Transport Urbain (Bamako District’s Traffic Regulation and Urban Transport Directorate) ECOWAS Economic Community ofWest African States ESIA Environmental and Social Impact Assessment ESW Economic and Sector Work EU European Union ESMF Environmental and Social Management Framework FARAH Financial Accounting, Reporting and Auditing Handbook FM Financial Management FMR Financial Monitoring Reports FMS Financial Management System GDP Gross Domestic Product GNP Gross National Product GPRSF Growth and Poverty Reduction Strategy Framework (the 2ndPRSF) ... 111 - HIVIAIDS Human Immunodeficiency VirudAcquired Immune Deficiency Syndrome IBD Inter-American Development Bank ICAO International Civil Aviation Organization WSO Inter-Agency Procurement Services Office IBRD International Bank for Reconstruction and Development IDA International Development Association IF Integrated Framework IFC International Finance Corporation IMF International Monetary Fund IRR Internal Rate ofReturn km Kilometers km2 Square Kilometers MA MinistBre de 1 'Agriculture (Ministry of Agriculture) MDG Millennium Development Goals MDRE MinistBre du Ddveloppement Rural et de 1'Environnement (Ministry of Environment and Rural Development) M&E Monitoring and Evaluation MEF Ministry ofEconomy and Finance NCU National Coordination Unit NGO Nongovernmental Organization NPV Net Present Value NRIP National Rural Infrastructure Project NRTS National Rural Transport Strategy ONAP Office National des Produits PCtroliers OHADA Organization for the Harmonization ofBusiness Law in Africa OHVN Office de la Haute Vallte du Niger (Upper Niger hver Valley program) PACR Projet d 'Appui aux Communautds Rurales (Rural Community Development Project) PACT Project for the Improvement ofTransport Corridors PCU Project Coordination Unit PHRD Japan Policy and Human Resources Development Trust Fund PPF Project Preparation Facilities PNIR Programme National d'lnfrastructures Rurales (National Rural Infrastructure Project) PO Producer Organization PRGF Poverty Reduction and Growth Facility PRSC Poverty Reduction Support Credit PRSF Poverty Reduction Strategy Framework PRSP Poverty Reduction Strategy Paper RAP Resettlement Action Plan RPF Resettlement Policy Framework SAC Structural Adjustment Credit SDR Special Drawing Rights SFD SystBme Financier Ddcentralisd (Decentralized financial system) SMEs Small and Medium-Size Enterprises SOE Statement ofExpenses SSA Sub-Sahara Africa TCIP Transport Corridor Improvement Project TRIE Transit Routier Inter-Etats (Interstate Road Transit Facilitation System) iv - TSP2 Second Transport Sector Project UNDP United Nations Development Program USAID U.S. Agency for International Development UEMOA Union Economique et MonCtaire Ouest Africaine (West Afiican Economic and Monetary Union) Vice President: Obiageli K. Ezekwesili Country Director: James P. Bond Sector Manager: C. Sanjivi Rajasingham Task Team Leader: SiClC Sild V- MALI Second Transport Sector Project TABLE OF CONTENTS Page STRATEGIC CONTEXT AND RA TIONALE ............................................................... 3 1. Country and sector issues ..................................................................................... 3 2 . Rationale for World Bank involvement................................................................ 5 3 . Higher-level objectives to which the project contributes ..................................... 5 A . PROJECT DESCRIPTION..................................................................................... 6 1. Lending instrument ............................................................................................... 6 2 . Project objectives and costing .............................................................................. 6 3 . Project development objective and key indicators ............................................... 6 4 . Project components ............................................................................................... 7 5 . Lessons learned and reflected in the project design ............................................. 8 6 . Alternatives considered and reasons for rejection ................................................ 8 B. IMPLEMENTA TION.............................................................................................. 9 1. Partnership arrangements ...................................................................................... 9 2 . Institutional and implementation arrangements .................................................... 9 3 . Monitoring and evaluation of outcomes/results ................................................. 10 4 . Sustainability ...................................................................................................... 11 5 . Critical risks and possible controversial aspects ................................................ 11 Overall Risk Rating .................................................................................................... 11 6 . Credit conditions and covenants ......................................................................... 12 C. APPRAISAL SUMMARY...................................................................................... 12 1. Economic and financial analysis ........................................................................ 12 2 . Technical............................................................................................................. 13 3 . Fiduciary ............................................................................................................. 14 4 . Social .................................................................................................................. 15 5 . Environment ....................................................................................................... 16 6 . Safeguard policies ............................................................................................... 17 7 . Policy exceptions and readiness ......................................................................... 17 vi . Annex 1: Country and Sector or Program Background .............................................. 18 1. Overview ............................................................................................................. 18 2 . Key issues and remaining challenges ................................................................. 22 3 . Government actions and medium-term objectives ............................................. 23 4 . The proposed PRSC- 1 actions supporting the government's medium-term program ....................................................................................................................... 25 Annex 2: Major Related Projects Financed by the Bank and/or Other Agencies ...... 27 1. Transport related Bank-funded projects ............................................................. 27 2 . Links and complementarities between TSP2 and other related Bank-funded projects ........................................................................................................................ 29 3 . Coordination with other donors' programs ......................................................... 30 Annex 3: Results Framework and Monitoring............................................................. 32 Annex 4: Detailed Project Description ........................................................................