Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report NO: 53 152-TZ PROJECT APPRAISAL DOCUMENT ON A Public Disclosure Authorized PROPOSED CREDIT IN THE AMOUNT OF SDR 177.9 MILLION (US$270 MILLION EQUIVALENT) INCLUDING SDR 10 MILLION (US$15 MILLION EQUIVALENT) IN PILOT CRISIS RESPONSE WINDOW RESOURCES TO THE UNITED REPUBLIC OF TANZANIA Public Disclosure Authorized FOR THE TRANSPORT SECTOR SUPPORT PROJECT May 4,2010 Transport Sector Country Department AFCEl Africa Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective March 3 1,2010) Currency Unit = Tanzania Shillings (TSh) TSh 1,357.50 = US$1 SDR 1 = US$1.51824 FISCAL YEAR July 1 - June30 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank APL Adaptable Program Loan ATR Air Transport Regional BADEA Banque Arabe pour le Diveloppement Economique en Afrique (Arab Bank for Economic Development in Africa) BPR Bi-annual Progress Reports CRW Crisis Response Window CTCP Central Transport Corridor Project CTCP-2 Second Central Transport Corridor Project DA Designated Account DANIDA Danish International Development Agency DBST Double Bituminous Surface Treatment DFID Department for International Development DP Development Partner DPP Division of Policy and Planning DSE Division of Safety and Environment DSM Dar es Salaam DVELA Drivers and Vehicle Examination and Licensing Agency EC European Commission EIRR Economic Internal Rate of Return EMP Environmental Management Plan ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan FM Financial Management GDP Gross Domestic Product GOT Government of Tanzania GoZ Govement of Zanzibar HDM-4 Highway Development and Management Model (forth version) HIV/AIDS Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding IDA International Development Association FOR OFFICIAL USE ONLY IFC International Finance Corporation IFR Interim Financial Report IRP-2 Second Integrated Roads Project JICA Japan International Cooperation Agency JISR Joint Infiastructure Sector Review KADCO Kilimanjaro Airport Development Company Limited LGA Local Government Authority LGTP Local Government Transport Program LGR Local Government Roads MDA Ministries Departments and Agencies MKUKUTA Mkakati wa Kukuza Uchumi na Kuondoa Umasikini Tanzania (National Strategy for Growth and Reduction of Poverty 2005- 10) MoFEA Ministry of Finance and Economic Affairs MoID Ministry of Infrastructure Development NAO National Audit Office NCB National Competitive Bidding NEMC National Environmental Management Council NGO Non-governmental Organization NMT Non-motorized Transport NORAD Norwegian Agency for Development Cooperation NPV Net Present Value NRSA National Road Safety Agency NRSP National Road Safety Policy NTP National Transport Policy OPBP Operations Policy/Bank Procedures PAD Project Appraisal Document PAP Project Affected People PCN Project Concept Note PEFAR Public Expenditure and Financial Assessment Review PFM Public Financial Management PID Project Information Document PIP Project Implementation Plan PMO-RALG Prime Minister’s Office - Regional Administration and Local Government PMU Procurement Management Unit PMMR Performance based Management and Maintenance of Roads PPZAF Public-Private Infiastructure Advisory Facility PPP Public-Private Partnership PPRA Public Procurement Regulatory Authority PRSC Poverty Reduction Support Credit PS Private Sector QCBS Quality and Cost-Based Selection RAHCO Reli Asset Holding Company RAIS Road Accident Information System RAP Resettlement Action Plan RFB Road Fund Board RPF Resettlement Policy Framework This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. RUC Road User Cost SIL Specific Investment Loan sss Single Source Selection STI Sexually Transmitted Infections STSIP Short Transport Sector Investment Plan SUMATRA Surface and Marine Transport Authority SWAP Sector-wide Approach TA Technical Assistance TAA Tanzanian Airports Authority TANROADS Tanzania National Roads Agency TANZAM Tanzania Zambia Highway TAZARA Tanzania-Zambia Railway Authority TCAA Tanzania Civil Aviation Authority TEU Twenty-foot equivalent unit TICTS Tanzania International Container Terminal Services TOR Terms of Reference TPA Tanzania Ports Authority TRC Tanzania Railway Corporation . TRL Tanzania Railways Limited TSIP Transport Sector Investment Program TSSP Transport Sector Support Project TSh Tanzanian Shillings UK United Kingdom VAT Value Added Tax voc Vehicle Operating Cost Vice President: Obiageli K. Ezekwezili Country ManagerDirector: John Murray McIntire Sector Director: Inger Andersen Sector Manager C. Sanjivi Rajasingham Task Team Leader: Dieter E. Schelling TANZANIA TRANSPORT SECTOR SUPPORT PROJECT CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ............................................................. 1 A . Country and sector issues.................................................................................................... 1 B . Rationale for Bank involvement ......................................................................................... 6 C . Higher level objectives to which the project contributes.................................................... 6 I1. PROJECT DESCRIPTION ............................................................................................. 6 A . Lending instrument ............................................................................................................. 6 B . Project development objective and key indicators.............................................................. 7 C . Project components ............................................................................................................. 7 D . Lessons learned and reflected in the project design............................................................ 8 E . Alternatives considered and reasons for rejection .............................................................. 9 I11 . IMPLEMENTATION .................................................................................................... 10 A . Partnership arrangements .................................................................................................. 10 B . Institutional and implementation arrangements ................................................................ 10 C . Monitoring and evaluation of outcomes/results................................................................ 11 ... D . Sustainability..................................................................................................................... 11 E . Critical risks and possible controversial aspects............................................................... 11 F . Credit conditions and covenants ....................................................................................... 12 Iv . APPRAISAL SUMMARY ............................................................................................. 13 A . Economic and financial analyses ...................................................................................... 13 B . Technical ........................................................................................................................... 14 C . Fiduciary ........................................................................................................................... 16 D . Environment ...................................................................................................................... 17 E . Social................................................................................................................................. 18 F . Safeguard policies triggered ............................................................................................. 20 G . Policy Exceptions and Readiness ...................................................................................... 20 Annex 1: Country and Sector Background .............................................................................. 21 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 29 Annex 3: Results Framework and Monitoring ........................................................................ 33 Annex 4: Detailed Project Description ...................................................................................... 35 Annex 5: Project Costs (US$ million. including contingencies).............................................. 46 Annex 6: Implementation Arrangements ................................................................................. 47 Annex 7: Financial Management and Disbursement Arrangements ..................................... 52 Annex 8: Procurement Arrangements ...................................................................................... 65 Annex 9: Economic and Financial Analysis ............................................................................. 77 Annex 10: Safeguards Policy Issues ......................................................................................... 93 Annex 11: Project Preparation and Supervision