Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD3411 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT PAPER ON A PROPOSED ADDITIONAL GRANT IN THE AMOUNT OF SDR 80.4 MILLION (US$110 MILLION EQUIVALENT) INCLUDING US$90 MILLION FROM THE IDA CRISIS RESPONSE WINDOW TO THE REPUBLIC OF MOZAMBIQUE FOR THE INTEGRATED FEEDER ROAD DEVELOPMENT PROJECT September 17, 2019 Transport Global Practice Infrastructure Practice Group Africa Region 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 August 31, 2019 Currency Unit = New Mozambique Metical (MZN) MZN 62.12 = US$1 SDR 0.73081252 = US$1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ABMS Area-Based Maintenance System ADT Average Daily Traffic AF Additional Financing AHP Analytic Hierarchy Process ANE Administração Nacional de Estradas (National Roads Administration) CERC Contingent Emergency Response Component CESMP Contractor’s Environmental and Social Management Plan CoC Code of Conduct CPF Country Partnership Framework CRPT Climate Resilience Planning Tool CRW Crisis Response Window ESHS Environmental, Social, Health, and Safety ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan EU European Union FM Financial Management GBV Gender-based Violence GoM Government of Mozambique GRM Grievance Redress Mechanism GRS Grievance Redress Service IFR Interim Financial Report IFRDP Integrated Feeder Road Development Project IPF Investment Project Financing IRM Immediate Response Mechanism IRR Internal Rate of Return MCA Multicriteria Analysis MGCSA Ministry of Gender, Children and Social Action MZN New Mozambique Metical NGO Nongovernmental Organization NPV Net Present Value OHS Occupational Health and Safety OPRC Output and Performance-based Road Contract PDO Project Development Objective PDNA Post-disaster Needs Assessment POM Project Operations Manual PPSD Project Procurement Strategy for Development RAMS Road Asset Management System RAP Resettlement Action Plan RBMMP Roads and Bridges Management and Maintenance Program RPF Resettlement Policy Framework RUC Road User Cost SDR Special Drawing Rights SEA Sexual Exploitation and Abuse SH Sexual Harassment UGEA Unidade Gestora Executora das Aquisições (Central Unit in Charge of Procurement Functions) UN United Nations UNFPA United Nations Population Fund Regional Vice President: Hafez M. H. Ghanem Country Director: Mark R. Lundell Regional Director: Riccardo Puliti Practice Manager: Maria Marcela Silva Task Team Leaders: Rakesh Tripathi, Nargis Ryskulova Mozambique Additional Financing for Integrated Feeder Road Development Project TABLE OF CONTENTS I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ........................................ 1 A. INTRODUCTION .............................................................................................................. 1 B. RATIONALE FOR ADDITIONAL FINANCING FROM THE IDA CRISIS RESPONSE WINDOW .... 1 C. COUNTRY CONTEXT ........................................................................................................ 2 D. SECTOR CONTEXT/KEY CHALLENGES ............................................................................... 3 E. LESSONS LEARNED AND REFLECTED IN THE PROJECT DESIGN .......................................... 3 F. CURRENT STATUS OF THE PARENT PROJECT .................................................................... 5 II. DESCRIPTION OF ADDITIONAL FINANCING ...................................................................... 7 III. KEY RISKS ..................................................................................................................... 10 IV. APPRAISAL SUMMARY .................................................................................................. 14 V. WORLD BANK GRIEVANCE REDRESS .............................................................................. 23 VI SUMMARY TABLE OF CHANGES ..................................................................................... 24 VII DETAILED CHANGE(S) .................................................................................................... 24 VIII. RESULTS FRAMEWORK AND MONITORING ................................................................... 28 ANNEX 1. ECONOMIC ANALYSIS........................................................................................... 41 ANNEX 2: PRIORITIZATION AND SELECTION OF AF PROJECT ROADS ..................................... 50 ANNEX 3. MAP .................................................................................................................... 54 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) BASIC INFORMATION – PARENT (Integrated Feeder Road Development Project - P158231) Country Product Line Team Leader(s) Mozambique IBRD/IDA Rakesh Tripathi Project ID Financing Instrument Resp CC Req CC Practice Area (Lead) P158231 Investment Project IAFT2 (9538) AFCS2 (5547) Transport Financing Implementing Agency: Road Fund, National Roads Administration (Administração Nacional de Estradas, ANE) ADD FIN TBL1 Is this a regionally tagged project? Bank/IFC Collaboration No Original Environmental Approval Date Closing Date Current EA Category Assessment Category 08-May-2018 31-Dec-2024 Partial Assessment (B) Partial Assessment (B) Financing & Implementation Modalities Parent [ ] Multiphase Programmatic Approach [MPA] [ ] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [ ] Fragile State(s) [ ] Disbursement-Linked Indicators (DLIs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made disaster [ ] Alternate Procurement Arrangements (APA) Development Objective(s) i The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) The Project Development Objective is to enhance road access in selected rural areas in support of livelihoods of local communities and to provide immediate response to an eligible crisis or emergency as needed. Ratings (from Parent ISR) RATING_DRAFT_YES Implementation 26-Feb-2019 Progress towards achievement of PDO S Overall Implementation Progress (IP) S Overall Safeguards Rating S Overall Risk S BASIC INFORMATION – ADDITIONAL FINANCING (Additional Financing for Integrated Feeder Road Development Project - P171093) ADDFIN_TABLE Urgent Need or Capacity Project ID Project Name Additional Financing Type Constraints P171093 Additional Financing for Cost Overrun, Restructuring, Yes Integrated Feeder Road Scale Up Development Project Financing instrument Product line Approval Date Investment Project IBRD/IDA 30-Sep-2019 Financing Projected Date of Full Bank/IFC Collaboration Disbursement 30-Apr-2026 No Is this a regionally tagged project? No Financing & Implementation Modalities Child [ ] Series of Projects (SOP) [ ] Fragile State(s) [ ] Disbursement-Linked Indicators (DLIs) [ ] Small State(s) ii The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) [ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [✓] Responding to Natural or Man-made disaster [ ] Alternate Procurement Arrangements (APA) [✓] Contingent Emergency Response Component (CERC) Disbursement Summary (from Parent ISR) Net Source of Funds Total Disbursed Remaining Balance Disbursed Commitments IBRD % IDA 150.00 35.00 112.37 24 % Grants % PROJECT FINANCING DATA – ADDITIONAL FINANCING (Additional Financing for Integrated Feeder Road Development Project - P171093) PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFi n1 SUMMARY (Total Financing) Proposed Additional Total Proposed Current Financing Financing Financing Total Project Cost 185.00 132.00 317.00 Total Financing 185.00 132.00 317.00 of which IBRD/IDA 150.00 110.00 260.00 Financing Gap 0.00 0.00 0.00 DETAILS - Additional Financing NewFinEnh1 World Bank Group Financing International Development Association (IDA) 110.00 IDA Grant 110.00 iii The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Non-World Bank Group Financing Counterpart Funding 22.00 Borrower/Recipient 22.00 IDA Resources (in US$, Millions) Credit Amount Grant Amount Guarantee Amount Total Amount Mozambique 0.00 110.00 0.00 110.00 National PBA 0.00 20.00 0.00 20.00 Crisis Response Window 0.00 90.00 0.00 90.00 (CRW) Total 0.00 110.00 0.00 110.00 COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [ ✔ ] No Does the project require any other Policy waiver(s)? [ ] Yes [ ✔ ] No INSTITUTIONAL DATA Practice Area (Lead) Transport Contributing Practice Areas Agriculture and Food Climate Change Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks iv The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF Yes b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment Yes c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes PROJECT TEAM Bank Staff Name Role Specialization Unit Team Leader (ADM Rakesh Tripathi Transport IAFT2 Responsible) Nargis Ryskulova Team Leader Transport IAFT2 Procurement Specialist (ADM Amos Martinho Malate Procurement EA1RU Responsible) Antonio Laquene Chamuco Procurement Specialist Procurement EA1RU Financial Management Eldio Venancio Mapoissa Financial Management GGOAC Specialist (ADM Responsible) Social Specialist (ADM Eden Gabriel Vieira Dava Social SAFS1 Responsible) Environmental Specialist (ADM Paulo Jorge Temba Sithoe Environmental SAFE3 Responsible) Atsushi Iimi Team Member Economics IAFT2 Desta Wolde Woldearegay Team Member Administration IAFT2 Emerson John Vasco Team Member Administration AFCS2 Siquice Disbursement and Financial George Ferreira Da Silva Team Member WFACS Management Karla Dominguez Gonzalez Team Member Gender IAFT4 Norman Bentley Piccioni Team Member Agriculture SAFA2 v The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Xavier Espinet Alegre Team Member Climate Change SEAU1 Extended Team Name Title Organization Location vi The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING A. Introduction 1. This Project Paper seeks the approval of the Executive Directors to provide an Additional Financing (AF) in the amount of SDR 80 million (US$110 million equivalent) from the International Development Association (IDA) to the Republic of Mozambique for the Integrated Feeder Road Development Project (IFRDP). The proposed financing includes US$90 million from the IDA Crisis Response Window (CRW) and US$20 million from the national IDA allocation. The proposed AF will also have counterpart financing in the amount of US$22 million. This AF is part of the World Bank’s broader regional package which comprises a set of operations totaling about US$700 million in IDA resources— including up to US$545 million from the IDA CRW—to support cyclone response in Malawi, Mozambique, and Zimbabwe. 2. The proposed AF is prepared under paragraph 12 of the World Bank Investment Project Financing (IPF) Policy: Projects in Situations of Urgent Need of Assistance or Capacity Constraints to support the country’s post-disaster recovery needs in the roads subsector by increasing the scope of the project through (a) financing the reconstruction/rehabilitation of rural roads and bridges in the four additional provinces of Sofala, Manica, Tete, and Cabo Delgado, affected by Cyclones Idai and Kenneth, as well as related designs and supervision services, gender-based violence (GBV) prevention and management in the same four provinces, and a pilot on routine maintenance through microenterprises (US$70 million); (b) replenishing the project financing that was reallocated toward the Contingent Emergency Response Component (CERC), activated post disaster under the parent project1 (US$35 million); and (c) financing additional technical assistance on the climate resilience planning tool (CRPT), Road Network Preservation Strategy and Action Plan (including road reclassification), and project management and capacity-building activities (US$5 million). 3. The project is proposed to be restructured (Level 2 restructuring) to (a) revise costs of Components 1 and 4 to reflect the increased scope of these components; (b) extend the closing date of the project by one year to December 31, 2025; and (c) modify the Results Framework by adjusting selected targets to reflect the scaled-up investments, the extended closing date of the project, and introduction of two new intermediate indicators. The Project Development Objective (PDO), the safeguards category, and the implementation arrangements of the project will remain the same. B. Rationale for Additional Financing from the IDA Crisis Response Window 4. In the spring of 2019, Mozambique was hit by two cyclones: Idai in March and Kenneth in April. These cyclones affected over 1.7 million people, killed 644 people, and destroyed partially or totally around 275,000 houses. 2 Cyclone Idai with heavy rains (more than 200 mm in 24 hours), winds (180 to 220 km per h), and flooding severely affected the central and northern regions of the country from March 4 to 17, 2019. On March 19, 2019, the Government of Mozambique (GoM) declared a national emergency, triggering major emergency response interventions. On April 25, 2019, Cyclone Kenneth hit the northern region of the country. Cyclone winds and floods destroyed or damaged critical infrastructure such as roads 1 Integrated Feeder Road Development Project (P158231). 2 As of May 2, 2019. 1 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) and bridges, as well as buildings used to facilitate trade, such as warehouses, and caused trade disruptions. The GoM, the United Nations (UN), the African Development Bank, the European Union (EU) and the World Bank led a Post-disaster Needs Assessment (PDNA) identifying US$1.5 billion of damages and US$3 billion of needs, with road sector needs estimated at nearly US$500 million. 5. For the poor, the rural roads are the only connection to essential medical services, schools, social objects, and broader economic opportunities. Large communities were cut off for weeks and failure of bridges meant large detours and alternative routes, adding in some cases more than 50 km to the commute. A road system in shambles has direct repercussion on the health, education, and livelihood of the residents and has large post-disaster implications as damaged roads make emergency recovery and reconstruction efforts difficult in every other sector of the economy. 6. The Immediate Response Mechanism (IRM)-CERC was activated in April 2019. Due to Mozambique’s high vulnerability to natural disasters, the country’s investment portfolio, including the IFRDP, uses an IRM CERC approach, which allows IDA countries to rapidly access up to 5 percent of the undisbursed IDA investment project balances to cope with the consequences of natural disasters or eligible emergency. Upon the activation of IRM-CERC, US$35 million was reallocated to the CERC of the parent project to address immediate emergency activities to restore basic road connectivity affected by Cyclone Idai. The National Directorate for Monitoring and Evaluation of the Ministry of Economy and Finance is the IRM Coordination Authority, responsible for coordinating the implementation of cyclone response emergency activities, while the National Road Agency (Administração Nacional de Estradas, ANE) acts as a Special Implementation Unit and is responsible for fiduciary management and implementation of activities. 7. Alignment with the Country Partnership Framework (CPF). The AF is fully aligned with the Mozambique CPF 2017–2021. 3 The framework’s three focus areas include (a) promoting diversified growth and enhanced productivity; (b) investing in human capital; and (c) enhancing sustainability and resilience. The project addresses the first and third focus areas directly. The project responds to Objective 2 of the first focus area, which calls for increasing agricultural growth by improving road conditions. On the third focus area, the project addresses Objective 11, improving management of climate risk and natural resources by integrating climate resilience into road investment planning and designs. C. Country Context 8. Mozambique is highly exposed to extreme rainfall and flooding that may become even more frequent because of global climate change. Mozambique’s geography and long coastline and the impacts of climate change, mean that it is regularly affected by extreme weather events, principally flooding. Catastrophic flooding occurs almost annually during the rainy season and is largely influenced by La Niña and the Intertropical Convergence Zone. Before the most recent cyclones, Idai and Kenneth, devastating floods in 2015 affected 326,000 people, killed 140, and caused damages estimated at US$371 million in parts of Zambezia, Nampula, and Niassa Province, another northern province. In 2013, a flood affecting the Limpopo lower basin killed 113 people, displaced more than 200,000, and ruined nearly 89,000 ha of 3 Report No. 104733-MZ, March 30, 2017. 2 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) cultivated land. Other major floods (in 2000 and 2007) and cyclones (in 2008, 2012, and 2017) caused fatalities and severe damage in different parts of the country. D. Sector Context/Key Challenges 9. Due to recurrent climatic events and the lack of maintenance, the road and rail networks have suffered extensive damage over the last 20 years, with substantial sums being diverted from network improvement to the repair of flood-related damage. Because the Mozambican road network has a low redundancy, those disruptions sometimes isolate communities for extended periods of time and thus have a significant detrimental impact on their local economics. Following the devastation due to Cyclones Idai and Kenneth, the GoM, the UN, World Bank, and the African Development Bank in partnership conducted a PDNA. The PDNA process identified over US$3 billion worth of damages, with road sector needs estimated at nearly half a billion dollars. The PDNA process documented the severe damage and loss due to this disaster on the road system of the country. The damages caused by the cyclone and heavy rains in the central region affected roadways the most: about 1,968 km of roads, 142 culverts, 29 bridges, and 35 drifts were damaged, resulting in the impassability of 6,142 km. This situation resulted in reduction of the transit ability in Sofala, Manica, Tete and Cabo Delgado by about 24 percent for the network of the central region and 7 percent for the national classified network. Table 1. Damages Caused by Cyclones Idai and Kenneth Total Total Culverts Bridges Drifts Extension Extension Provinces Damaged Damaged Damaged Affected Damaged (No) (No) (km) (km) SOFALA 55 1 0 1,450 1,011 MANICA 8 5 4 667 69 TETE 10 4 8 1,003 89 ZAMBEZIA 17 5 12 1,493 783 NAMPULA 11 7 6 939 9 CABO DELGADO 41 7 5 590 7 Total 142 29 35 6,142 1,968 E. Lessons Learned and Reflected in the Project Design 10. Sustainability of public investments in the road sector. The GoM acknowledges that prioritizing road expenditure to ad hoc emergency and urgent rehabilitation needs at the expense of routine and periodic maintenance outside of systematic asset management system is not a sustainable way forward. To address shortage of resources for maintenance, the Road Fund and ANE have started paying more attention to the contract modalities that would address the need for better maintenance as well as invest resources toward better road asset management. The proposed AF will support government efforts in improving the sustainability of public investments by reflecting some of the lessons learned through 3 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) previous operations in Mozambique as well as internationally through piloting routine maintenance through microenterprises, improving road asset management planning by developing a Road Network Preservation Strategy and Action Plan, and enhancing the road asset management system (RAMS) with systematic climate data. 11. Piloting routine maintenance through microenterprises. Performance-based contracting is now a default contract modality for primary roads (as under Component 2 of the parent project). ANE is also adopting area-based multiyear rehabilitation and maintenance contracts for secondary and feeder roads. There is no single model to ensure more efficient maintenance contracts for the whole network and low- cost solutions are particularly needed given limited resources. Some innovative approaches, such as routine maintenance by microenterprises, have been successfully implemented in Latin America and adapted in Africa and South Asia in recent years. The use of microenterprises for routine maintenance, which is proposed to be piloted under the AF, can ensure that basic routine maintenance, involving grass cutting and culvert cleaning, is performed at a very minimal cost, which would be appealing for feeder roads. This approach can also increase entrepreneurship, community involvement, and ownership of lifeline roads, especially engaging and empowering women. 12. Road network preservation strategy and action plan. Addressing the issue of sufficient maintenance would require better assessment of the needs and options for financing of the road sector. Moving toward road asset management, which will be financed through the parent project, would further improve the sustainability of public investments. International best practice shows that road maintenance and network improvements can be more efficiently implemented by determining priorities through the use of an RAMS. Prioritization of expenditures through the proper monitoring, planning, and programming of maintenance and rehabilitation works through RAMS limits less-productive expenditures and redirects funds to higher-priority projects, which yield greater economic return. A modernized RAMS ensures that initial public investments are more efficiently spent. It also helps prevent underfunding and deferred maintenance as it considers life cycle cost of roads. Such a system exists in Mozambique; however, in its current form it does not support decision making and budget planning and its use is limited due to the absence of a strategic planning and updated information on the network. While the parent project will address the software and data part, the proposed AF will finance preparation of a Road Network Preservation Strategy and Action Plan (including road reclassification). 13. Implementation of Sexual Exploitation and Abuse (SEA) provisions. The AF is following on the good practices identified by the parent project to design its SEA/Sexual Harassment (SH) mitigation and response strategy, including the active linkage with organizations with GBV programming experience on the ground. The activities are coordinated with UNFPA, which, together with the Ministry of Gender, Children and Social Action (MGCSA), is in charge of the GBV Sub-Cluster in Mozambique. The GBV Sub- Cluster activates in humanitarian situations. It leads GBV programming to address GBV risks, including coordination, prevention and response with a multi-sectoral approach. Among the proposed mitigation and response activities carried out by the Sub-Cluster are integration and coordination of the complementary mapping of service providers for survivors of GBV in Sofala, Zambezia and Cabo Delgado provinces, and a needs assessment of services for survivors as well as capacity building for the government agencies. Under the project, an NGO specialized on GBV is being hired. The contracting of the NGO has taken longer than expected due to the humanitarian situation following the cyclones and the need to expand the TORs of this NGO to include the four new provinces of Sofala, Manica, Tete, and Cabo Delgado, and to ensure coordinated protection/collaboration with other entities for potential survivors of SEA, who 4 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) might be suffering additional risks because of the natural disasters. Coordination and capacity building are critical under the current circumstances for effective implementation and supervision. ANE is reviewing the technical and financial proposal, and it will ensure that the SEA Prevention and Response Action Plan is finalized before commencement of works. With the hiring of the NGO, the supervision costs will increase; however, such support to ANE is essential until enough capacity is built and coordination with other government entities working on the matter, such as the MGCSA, is systematized and consolidated. 14. Expansion of the CRPT and its integration with RAMS. With significant resources being diverted annually toward ad hoc emergency recovery needs, the parent project developed a CRPT. The objective of the CRPT is to identify vulnerable areas and protect road assets by designing resilient interventions to manage the resources in a more predictable and systematic way. The tool allows consideration of economic losses from extreme flooding and rainfall and the benefits of climate resilience in the assessment and prioritization. The analysis assessed flood risks based on (a) flood likelihood maps under various climate change scenarios and (b) vulnerability functions for bridges, culverts, and road surface. Recurrent cyclones and the devastation they bring emphasize the urgent need to adapt RAMS to changing climatic conditions and make it an integral part of preventing the loss of assets and planning the limited resources. The CRPT is currently limited to the two provinces of the parent project (Nampula and Zambezia). The proposed AF will finance the expansion of the CRPT to cover the entire country and will integrate the tool with RAMS, allowing for better flood disruption risk management. F. Current Status of the Parent Project 15. The IFRDP was approved on May 8, 2018, in the amount of US$185 million equivalent, including an US$150 million IDA grant and US$35 million in counterpart funding. The project became effective on November 29, 2018. The PDO is to enhance road access in selected rural areas in support of livelihoods of local communities and to provide immediate response to an eligible crisis or emergency as needed. The project is on track to meet its PDO, and both the progress toward achievement of the PDO and the implementation progress are currently rated Satisfactory. The project is compliant with the legal covenants, including environmental and social safeguards, audit and financial management (FM), and other provisions of the legal documents under the project. 16. To date, the project has disbursed US$35 million, which is 24 percent of the total IDA grant. The majority of the disbursed amount was the reallocation to the CERC to address immediate disaster needs, following Cyclones Idai and Kenneth upon the activation of the CERC of the project through a Level 2 restructuring of the project. 17. Detailed progress of the parent project by component is as follows: • Component 1: Rehabilitation and Maintenance of Feeder Roads. Consultancy services are under way for a feasibility study to identify feeder road segments using a multicriteria prioritization tool emphasizing resilience and to prepare detailed designs, packaging, and bidding documents. The bid packages for the prioritized roads in Zambezia and Nampula Province are expected to be prepared by November 2019 and the civil works worth US$70 million expected to commence by early 2020. The consultancy services also include the design of transport pilot that is part of Component 3: Pilot Rural Transport Services. 5 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) • Component 2: Rehabilitation of Primary Road Network. Bidding documents for the 70 km of roadways identified were prepared (rehabilitation of part of road N10 from Quelimane to Nicodala and part of road N1 from Nicodala to Namacurra in Zambezia Province) and the procurement process is ongoing. The bidding documents for this road section incorporated clauses related to sexual exploitation and abuse (SEA) and sexual harassment (SH) in the workplace prevention and response, including the requirement for development of a GBV action plan with a response and accountability framework and the requirement for bidders to submit a Code of Conduct (CoC) with their proposals. The Environmental and Social Management Plan (ESMP) for this road section includes the basis for the GBV action plan to be adopted by the contractor under the Contractor’s Environmental and Social Management Plan (CESMP). Rehabilitation of these road sections are proposed under an Output and Performance-based Road Contract (OPRC) modality to ensure long-term sustainability of the road asset. The Client is expected to complete the procurement process and sign the contracts in the autumn of 2019. In parallel, the Client has also initiated the procurement of consultancy services for the technical supervision of the OPRC civil work contracts. A consultant to implement the Resettlement Action Plan (RAP) has been procured in late August 2019, with an expected contract completion date in March 2020. Terms of references for service provision for mitigation and response to SEA and SH in the workplace under the IFRDP have been prepared and shared with the United Nations Population Fund (UNFPA), which is the UN Agency in charge of leading the GBV-Sub-Cluster 4 in Mozambique. • Component 4: Capacity Building and Project Administration. The Client has initiated procurement of the consultancy services to upgrade the existing Mozambique Road Management System to a comprehensive web and geographic information system-based RAMS to be used by ANE to maintain, prioritize, and manage the road network and assets in its control. In parallel, the Client is preparing terms of reference for road condition data collection. In terms of capacity-building activities, the Client’s representatives participated in a performance-based contract training conducted by the International Road Federation. The Client has identified the GBV nongovernmental organization (NGO) to support in the mitigation and response to the risks of SEA and SH in the workplace that may result from the implementation of the infrastructure activities, as well as to complement the monitoring activities to be carried out by the supervision consultant. Given the natural disasters, the terms of references had to be extended to incorporate the affected areas. The SEA/SH mitigation and response strategy will be put into place before the commencement of construction works. ANE has a GRM in place, which will be improved with the help of the consultant, hired in August 2019. The consultant will identify weak areas in the GRM, recommend improvements and train ANE, both at the central and provincial levels on 4 UNFPA is leading, in coordination with the Ministry of Gender, Children and Social Action, the GBV Sub-Cluster in Mozambique, which was activated after the natural disasters in Sofala, Cabo Delgado, Tete and Zambezia. The role of the GBV Sub-Cluster is to facilitate at the field level rapid implementation of GBV programming in an acute humanitarian emergency setting, including liaison and coordination with other organizations (coalition-building), training and sensitization, strategic planning, monitoring and evaluation. The members of the Sub-Cluster are also building capacity to lead the humanitarian response on GBV to ensure sustainability and accountability among actors. One of the main activities of the Sub-Cluster is to map available GBV response services on the referral pathway in each of the affected districts. In coordination with UNFPA, the Government has set up social service hubs that will serve as entry points for vulnerable community members to confidentially engage with social workers about child protection and GBV issues. 6 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) managing the GRM system. In addition, the TORS of the GBV NGO specifically require assessing the capacity of ANE to register and refer SEA specific cases to service providers and, through the mapping of services, identify entry points for survivors to place complaints in a confidential manner. The feedback from the GBV NGO will be reflected in the GRM, and this NGO will support ANE in GRM monitoring and implementation throughout the entire project duration. • Component 5: Contingent Emergency Response. Following the declaration of emergency by the GoM in the aftermath of Cyclones Idai and Kenneth, the project underwent a Level 2 project restructuring to reallocate US$35 million from Component 1 to Component 5. This component finances emergency works to restore road connectivity. Emergency works included repairs/replacements to the drainage system, structures (bridges, drifts), and pavement. The emergency works financed out of the IFRDP followed a number of principles agreed between ANE and the World Bank, including the following: (a) emergency works form part of a long-term strategy, that is, all drainage and structural repairs follow proper design standards considering hydrological and topographical considerations; if the completion of these works cannot be fully funded, only those works that have a phased design should be considered for financing under the project; and (b) roads must be improved to a maintainable level. Table 2. CERC Civil Works Implementation Plan (US$, millions) Implementation Plan for CERC-funded Civil Works (Total: US$35 million) Actual and Planned Disbursements September October November December January July 2019 August 2019 2019 2019 2019 2019 2020 4,377,648 4,227,488 2,761,966 5,411,029 5,411,029 8,116,544 4,705,515 Cumulative Total 35,011,219 II. DESCRIPTION OF ADDITIONAL FINANCING 18. PDO and Results Framework. The PDO will not change. The Results Framework and monitoring indicators are proposed to be revised to reflect the increased scope of the project in relation to Components 1 and 4 and the proposed new closing date. End target dates for most of the indicators, even for those components that remain unchanged, will be revised to reflect the proposed new closing date of December 31, 2025. 19. Revised PDO indicators. Rural accessibility index (percentage of rural population within 5 and 2 km of good condition roads) in the project areas was revised for both baseline and target values, reflecting the currently higher accessibility levels but the relatively small number of beneficiaries in the additional four provinces (from a baseline of 12 percent to 22 percent for within 5 km and from 7 percent to 12 percent for within 2 km, and a target of 52 percent to 45 percent for within 5 km and from 32 percent to 26 percent for within 2 km). The indicator on access to markets from land with high agriculture potential is proposed to be limited to the two original provinces of Nampula and Zambezia only. This is done to reflect the emergency nature of the project. 7 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) • Revised intermediate results indicators. The text of the indicator on lengths of unpaved feeder roads under performance-based contracts is revised to read ‘lengths of unpaved feeder roads under area-based rehabilitation and maintenance contracts. This is to accurately reflect contracting arrangements under the project. The target value of this indicator is increased. The two indicators on grievances are proposed to be combined into one. Currently, the grievance related indicators are: 1) Grievances registered related to delivery of project benefits that are addressed (Percentage); and 2) Grievances responded and/or resolved within the stipulated service standards (Percentage). The revised combined indicator is proposed as “Grievances registered that are responded / resolved within the stipulated service standards (percentage)”. The target value is proposed to be increased from 90 percent to 100 percent, to ensure that every officially received and registered complaint is responded to. • New intermediate results indicators. Pilot for routine maintenance through microenterprises designed, implemented, and evaluated and development of a Strategic Network Preservation Plan on rehabilitation and maintenance are the new indicators. 20. Project components and costs. The IFRDP will continue to have the same five components. Component 1: Rehabilitation and Maintenance of Feeder Roads and Component 4: Capacity Building and Project Administration will be scaled up to incorporate new activities as part of the proposed AF. No changes will be introduced to other components. The project will use the AF in the amount of US$35 million for Component 1, to replenish the amount that was reallocated toward CERC, triggered following the declaration of emergency by the GoM. The increased scope of the project and the proposed restructuring will be reflected in the project components as described in the following paragraphs. 21. Component 1: Rehabilitation and Maintenance of Feeder Roads (Total cost: US$126.00 million; IDA: US$105.00 million equivalent; US$21.00 million counterpart financing). Overall, the nature of civil works/interventions envisaged under this component will not change from the originally designed works under Component 1 of the parent project. The changes are related to the expansion of the geographic coverage of the project, as well as to reflect some of the newly proposed activities supporting the sustainability of public investments, specifically a pilot for routine maintenance through microenterprises. The parent project was limited to the two provinces of Zambezia and Nampula. With the proposed AF, the financing under this component will be extended to include rehabilitation and maintenance works, as well as consultancy services for prioritization of road network and design studies, supervision activities, in four additional provinces that were affected by Cyclones Idai and Kenneth: Sofala, Manica, Tete, and Cabo Delgado. 22. Pilot for routine maintenance through microenterprises. Component 1 will also finance design and implementation of a pilot for routine maintenance through microenterprises, including consultancy services to design the pilot as well as all operation-related expenses for services from two microenterprises in two provinces for at least two years. The pilot will be designed during the first year of implementation after the approval of the AF. Selection of provinces for the pilot will be done at the pilot design stage. 8 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Box 1: Routine Maintenance through Microenterprises There is significant evidence in Latin America that routine maintenance is more efficiently performed when it is done by local entrepreneurs (microenterprises or local maintenance teams), who can see the benefit of keeping a road in good condition and receive pressure from other users of rural transport. Routine maintenance is labor intensive and does not require advanced skills. It can generate employment opportunities for the rural poor, including women. Microenterprises typically consist of between 10 and 15 workers (usually people living along the road to be maintained), who use labor-based methods and hand tools in carrying out different activities aimed at improving and maintaining the standard of a stretch of road between 15 and 50 km, depending on topography and climate characteristics. Performance-based contracts between a microenterprise and a local community authority are used, in which payments are made based on the achievement of a set of performance indicators, rather than on the amount of inputs, greatly facilitating contract administration and motivating the microenterprise to improve their efficiency and effectiveness. Microenterprises generally have little capital and most of their earnings go toward paying salaries of the workers. 23. Component 4: Capacity Building and Project Administration (Total cost: US$6.00 million; IDA US$5.00 million equivalent; US$1.00 million counterpart financing). This component will be scaled up to include the following additional activity: consultancy services to expand the existing CRPT from two provinces of Nampula and Zambezia to cover the entire country. The expanded tool will need to allow for technical solutions to be integrated with RAMS and related training and capacity building of ANE and the Road Fund in using the tool. This component will also finance training and capacity building of various stakeholders in dissimilation and application of the nine design manuals that were developed under the recently closed Roads and Bridges Project. The component will also finance consultancy services to develop the Road Network Preservation Strategy and Action Plan (including road reclassification). Finally, this component will also finance additional consultants to be hired by ANE to support project implementation as described in the below para on implementation arrangements. Table 3. Project Financing for AF (US$, millions) IDA Counterpart Total Project Components Financing Financing Financing Component 1: Rehabilitation and Maintenance of Feeder Roads 105.00 21.00 126.00 - Prioritization and Detailed Designs 3.50 0.70 4.20 - Supervision 7.00 1.40 8.40 - Civil Works 58.00 11.60 69.60 - Routine Maintenance through Microenterprises Pilot 0.50 0.10 0.60 - Replenishment for CERC (Component 1 parent project) 35.00 7.00 42.00 - Contingencies 1.00 0.20 1.20 Component 2: Rehabilitation of Primary Road Network 0.00 0.00 0.00 Component 3: Pilot Rural Transport Services 0.00 0.00 0.00 Component 4: Capacity Building and Project Administration 5.00 1.00 6.00 - Climate Resilience Planning Tool and Capacity Building (inc. for design manuals) 0.40 0.08 0.48 - Road Network Preservation Strategy and Action Plan (inc. road reclassification) 1.00 0.20 1.20 - GBV Prevention and Management 1.00 0.20 1.20 - Operating Costs, Goods, Training, Audit of Project Accounts 2.60 0.52 3.12 Component 5: Contingent Emergency Response 0.00 0.00 0.00 Total Financing 110.00 22.00 132.00 9 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) 24. Implementation arrangements. Implementation arrangements will remain the same. ANE and the Road Fund will continue to be responsible for day-to-day implementation of the project. ANE will hire additional staff to support with project implementation, including technical, environmental, and social oversight of civil works, and review and implementation of technical assistance activities. The following specialists will be hired: sr. transport specialist (international), road engineers, procurement specialists, and environmental and social specialists (local). These additional specialists will be paid from the operating costs of the project and will be hired on terms of references and qualifications, satisfactory to the World Bank. 25. Closing date of the project. The closing date of the project is proposed to be extended by 12 months to December 30, 2025, to account for the execution of the work following the cyclones. III. KEY RISKS 26. With the allocation of the proposed AF, the overall risk rating of the project continues to be rated Substantial. Three risks are assessed as High: macroeconomic, climate and environmental and social; five risks are assessed as Substantial: political and governance, institutional capacity for implementation, counterpart financing and sustainability, fiduciary, and stakeholders. • Macroeconomic risk is assessed and rated as High. The economic slowdown triggered by the debt crisis is contributing to macroeconomic risk as monetary and fiscal tightening continues; the business environment remains increasingly restrictive and private sector expectations weaken. Vulnerabilities in the financial sector have also grown with a notable deterioration in asset quality and the failure, and subsequent restructuring, of the fourth largest bank. Mozambique’s budget has contended with reduced fiscal space since the onset of the crisis as external funding levels dropped and debt service costs increased. While currency appreciation has contributed to a reduction in debt levels, Mozambique remains in debt distress and debt restructuring is key to bring much-needed fiscal respite. This economic vulnerability could affect counterpart financing; the government contribution may not materialize on time. The legal agreements incorporate minimum counterpart contributions under flexible pari passu terms. Proposed counterpart funding is roughly equal to the taxes collected by the Government on the project plus the maintenance funds that it might spend on parts of the network under the project in normal circumstances. • Environmental and social. The combined environmental and social risk, after mitigation measures, is rated High. Activities are expected to have a comparatively moderate impact on the biophysical environment. The project’s civil works focus on rehabilitating or upgrading the existing roads in six provinces, and activities are not expected to have long- term negative environmental or social impacts. Potentially adverse environmental and social impacts are expected to relate mainly to construction activities during project implementation and will occur contemporaneously. The expected environmental and social impacts will be localized, and adequate mitigation measures will be in place. Given that the project will operate in cyclone environmentally degraded areas the focus of the safeguard instruments will be to avoid or mitigate further impacts. The potential adverse environmental impacts may include degradation of topography and physical features; 10 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) degradation of productive land due to soil erosion and compaction from construction vehicles and machinery; soil and water body contamination due to oil spills which could lead to decreased water quality, loss of vegetation, fauna disturbance, solid waste generation, dust, and noise emissions; and potential risks to the community health and safety and also occupational health and safety (OHS) risks to construction workers/artisans. Contractors will be required to prepare and adequately implement an OHS Plan in compliance with OHSAS 18001:2007 (now ISO 45001) and recruit OHSAS 18001:2007 certified personnel for this purpose. • The risk for GBV, specifically SEA and SH in the workplace, is considered High based on the World Bank GBV risk assessment tool and additional analysis. The risk analysis considered context-related risk factors for SEA and project-related risks. According to the Demographic and Health Survey 2015, one-fourth of 15-year-old adolescents surveyed declared they were survivors of physical violence at one point in their lives; 6 percent of women declared themselves survivors of sexual violence (being more frequent in Zambezia District with 11 percent of prevalence); and 24 percent of women said they were survivors of physical, sexual, or emotional violence from their partners. The country has a high prevalence of child marriage (above regional average) and data from the Demographic and Health Survey 2011 show the existence of gender social norms that condone GBV. In this context, by bringing in expatriate workers or providing local workers with additional purchasing power in an area of high vulnerability (increased after the natural disasters), there can be additional risks for women and girls in the project area. Experience shows that sexual violence is common in humanitarian settings, when women and girls are more exposed as a consequence of the crisis, when, for instance, they are separated from their families/communities and/or carry out additional roles that expose them to risks such as foraging for food. Based on the risk level, the project will put into place measures to mitigate and respond to SEA/SH risks. • The project will undertake the following specific measures to further mitigate the risks related to SEA and SH: (a) The implementing agency will incorporate the requirements for the SEA Prevention and Response Action Plan in the ESMPs to be reflected in the contractors’ ESMPs. The contractors’ action plans will include specific arrangements for the project by which SEA risks will be addressed, including an awareness raising strategy and a response and accountability framework. (b) The bidding documents will include specific requirements that minimize the use of expatriate workers and encourage workers to be hired locally—thereby minimizing labor influx. This approach was used successfully on the recently closed World Bank- financed project (Roads and Bridges Management and Maintenance Program, Phase II - RBMMP II), where local labor is estimated to account for 90 percent of the workforce. (c) Contractors will be required to submit ‘CoCs’ and a draft contract for workers along with their bids. The codes will set clear boundaries for acceptable and unacceptable behaviors of all individuals and companies (including the contractor, subcontractors, and their workforces) and specify sanctions, including for any incidents of GBV or SEA. 11 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) All project consulting firms will also be required to submit CoCs with their proposals. All workers will obtain a valid contract. (d) ANE is currently procuring a GBV NGO, which will enhance service provision for SEA survivors (specifically the health sector) under Component 4; train project workers and local communities on GBV and SEA awareness, contents of the CoCs, outreach, and prevention; and provide case-specific support. The NGO will coordinate/complement its efforts with UNFPA, for instance the additional mapping of service providers, quality assessment and referrals of survivors in the additional Provinces where it has active presence. (e) A Grievance Redress Mechanism (GRM), which has specific survivor-centered protocol for ethically recording and addressing SEA complaints will be implemented. This will include appropriate mechanisms for referral to enhanced service providers under Component 4. (f) A Steering Committee will meet quarterly and include community representation and the NGO. (g) Risk related to communities and workers health and safety will be addressed by the contractor through a robust CESMP which will include specific measures to minimize the number of work-related accidents during subproject implementation. All these mitigation measures will be reflected in the safeguards instruments for the project and are part of the Project Operations Manual (POM). • Political and governance risk is assessed Substantial. The country remains susceptible to further outbreaks of political and social conflict, though a return to full-scale civil war is seen as unlikely. Governance indicators for Mozambique reflect a gradual decline of government effectiveness, control of corruption, the rule of law and voice and accountability over the past several years. Perceptions of corruption within the public service are given credence by civil society organizations, which have voiced concerns with regards to the absence of sufficient public accountability in the use of state revenues. Mitigation measures include supporting the project implementing entity to improve transparency and accountability in the project and sector by joining the Construction Sector Transparency Initiative (CoST), a global initiative improving transparency and accountability in public infrastructure. Discussions are underway with the CoST Secretariat on how to implement the Initiative under the IFRDP, including adoption of tools, standards and TA that can be applied to drive transparency and stakeholder involvement in planning and implementing infrastructure projects and promoting more robust accountability mechanisms. • Institutional capacity for implementation and sustainability is rated Substantial. Provincial road sector institutions’ capacity for managing workloads, efficiency, and quality is relatively inadequate, although hiring consultants and service providers to support provincial delegations will mitigate the risk. Responsibility for implementation of Component 1 will continue to be partially handed over to the provincial delegations of ANE in Zambezia and Nampula, and similar arrangements will be applied for the additional four provinces. The 12 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) provincial delegations of ANE will be responsible for procurement, supervision, and monitoring of rural roadworks under Component 1 with an oversight from the ANE central unit. All other procurement under the project will be handled by the ANE central unit. Training of ANE provincial delegations’ staff will be ensured before handing over those responsibilities. This arrangement will promote decentralization and build capacity in local government entities, improving the long‐term sustainability of the project. Inclusion of long‐ term maintenance under Component 1 (three years) and Component 2 (seven years) also helps reduce sustainability risks over the project life cycle. At the central level, ANE’s capacity is proposed to be strengthened through hiring of the project management consultant. • Fiduciary risk. The assessment of the fiduciary risk that is rated Substantial, includes the FM risk, which is rated Moderate, and the procurement risk, which is rated Substantial. The project implementing agency, the Road Fund, has been working to ensure compliance with FM requirements for World Bank-financed operations. The FM arrangements in place for the ongoing project will also apply for this operation, and changes in those arrangements are not expected. No changes are expected for procurement arrangements either. The procurement risk is assessed as Substantial for the following reasons: (a) The procurement of goods, works, non-consulting services, and consulting services under the proposed AF will be governed by the new Procurement Regulations for IPF Borrowers. While some staff in the ANE central unit in charge of procurement functions (Unidade Gestora Executora das Aquisições, UGEA) received training on the New Procurement Framework and continues on-the-job guidance from the World Bank staff, those are new concepts and ANE and UGEA need time and more guidance to advance their knowledge and practical skills. The proposed AF will envisage incremental funding to continue ANE’s capacity building and (b) UGEA’s filing system is not satisfactory. ANE and UGEA will hire a consultant with extensive experience in hard and electronic filing systems to organize all hard copies and introduce electronic filing and allocate office space to allow UGEA to maintain properly the records and have the files labeled and numbered in chronological order as per the consultant’s recommendations. • Stakeholder risk is rated Substantial. Local stakeholders, civil society, and local governments may seek changes in road selection and interventions under Component 1. Stakeholder engagement throughout the project implementation will mitigate the risk. The district road councils, chaired by the governors (usually represented by the district administrator) and on which all stakeholders have a seat, will be the natural platform to facilitate stakeholder engagement. Consultations were conducted in new provinces during project preparation. Consultation will continue throughout implementation of both Components 1 and 2. • Climate and disaster risk is rated High. The World Bank Climate and Disaster Risk screening tool was used to complete the project climate screening. As the project is located in flood- and cyclone-prone areas, strong winds, extreme precipitation, and flooding are the primary 13 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) hazards that climate change poses to investments under this financing. Adaptation measures incorporated into the project design include the adoption of climate resilient construction designs for the rehabilitation of roads and bridges under Component 1, together with climate resilience technical assistance under Component 4. • Counterpart co-financing. Counterpart co-financing risk is assessed as Substantial. The proposed AF will have a counterpart co-financing in the amount of 20 percent, which is the same arrangement as in the parent project. This amount represents tax obligations. The risk has been partially mitigated by the yearly project disbursement schedule, which will be reflected in the Financing Agreement as a covenant. IV. APPRAISAL SUMMARY A. Economic Analysis 27. This AF will finance road network recovery and rehabilitation efforts in four additional provinces that were affected by Cyclones Idai and Kenneth: Sofala, Manica, Tete, and Cabo Delgado. The initial PDNA identified 45 road sections as damaged and critical, of which the total length is about 3,600 km. 5 Similar to the parent project, the AF is only focused on non-primary road connectivity, including secondary, tertiary, vicinal, and non-classified roads. To select priority roads, the same principles as the parent project are applied: (a) criticality of road network; (b) current agricultural production; (c) agroclimatic potential; (d) poverty incidence; and (e) flood risk. While the last is given a weightage of 0.5, other criteria are equally weighted. 28. The project will finance the road segments based on the above criteria. Although the final list of roads to be rehabilitated needs to be updated with more accurate data and project readiness considered, the top nine ranked roads totaling nearly 900 km would likely cost about US$74 million (see the full list of priority roads in annex 1: Economic Analysis). Based on the traditional consumer surplus approach, which compares road rehabilitation and maintenance costs and savings of road user costs (RUC), such as vehicle operating costs and time costs, the average rate of return is estimated at about 18.0 percent with a wide variation from −4.9 percent 6 to 62.7 percent, highly depending on expected traffic and investment costs. Net present values (NPVs) are also estimated to vary significantly from negative US$21 million to US$58 million, with an average of US$3.9 million at a discount rate of 6 percent. 29. The project could benefit a large number of people along the road to be rehabilitated in the cyclone-affected areas. If the top nine priority roads are selected according to the preliminary ranking, it is estimated that about 60,000 and 150,000 people could benefit based on a 2 km and 5 km threshold, respectively. From the environment point of view, carbon dioxide emissions could also be reduced by about 304 tons over the 20-year project life. Gross emissions are estimated at about 3,542 tons and 3,239 tons without and with the project, respectively. 5 These roads include roads beyond the network managed by ANE. 6 The prioritization process is expected to select projects of highest economic internal rate of return among other multicriteria. 14 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) B. Technical 30. Build Back Better Approach. Much of the deterioration of the road network is attributed to environmental factors and exacerbated by poor drainage design and maintenance practice. Road designs under the proposed AF will follow climate-resilient design standards developed under a previous World Bank operation (Roads and Bridges Management and Maintenance Program Project, P083325). Nine comprehensive climate resilient manuals were developed: Geometric Design Manual, Site Investigations Manual, Pavement Design Manual, Rehabilitation Design Manual, Hydrology and Drainage Design Manual, Specification for bridge loads, Standard Specifications for Roads and Bridge Works, Standard Details for Roads and Bridges, and Guidelines for Performance Specifications. These design standards are sensitive to the topography, climate change risks, primarily flooding, and recurrent climatic events and drought, among other considerations of resilience. The practical effect of these standards can be seen from the emergency works designed and implemented in Gaza and completed in late 2018. The resilient build back better ensures that the replacement hydraulic structures account for frequent and much severe flood events, through wider openings, better rip-rap, higher bridge profile, higher vertical profile of the road, and more effective cross and side drainage structures. The civil works proposed in this operation will be designed using the resilient design and will be prepared to better withstand any future climatic event. 31. Other wider principles to safeguard the investments in the medium and long term are (a) an effective RAMS in place and functioning and (b) sufficient funding for road maintenance. Insufficient road maintenance is a major contributor to flood damage, undermining road infrastructure resilience to extreme conditions. These principles are an integral part of the parent project, which will continue to be emphasized through the proposed AF. 32. Contract modality, payment, and duration. For non-emergency works, roads to be rehabilitated under the proposed AF are those that are in very poor condition (post cyclone) and in need of rehabilitation or reconstruction. Similar to the parent project, civil works under Component 1: Rehabilitation and Maintenance of Feeder Roads will be organized in rehabilitation and maintenance contracts in the four additional provinces of Cabo Delgado, Manica, Sofala, and Tete. No widening, upgrading of surface type, or improvement of geometric characteristics is included in rehabilitation works. Reconstruction will include roadworks designed to replace sub-base, base, and surface layers that are in very poor condition with new ones and improvement of drainage structures. No widening, upgrading of surface type, or improvement of geometric characteristics is included in reconstruction works. 33. Typical construction period will be 12–18 months, followed by three-year maintenance period, including an initial 12 months of defect liability period. The works will be tendered as a National Competitive Bidding. The packaging will be done on an area-based approach. The rural road network is divided into ‘Rehabilitation and Maintenance Areas’, each area encompassing between 150 and 300 km of road, which can be effectively managed by a single contractor. 34. Rehabilitation/reconstruction works. The civil works will include reconstruction and/or rehabilitation of sections of feeder roads to a standard profile and condition which can be properly maintained under the Area-Based Maintenance System (ABMS). Contracts will be packaged to include several road sections in the same area. The works will also include improvement to the drainage 15 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) characteristics of the roads which with the application of regular routine maintenance will improve the overall flood resilience of the roads. These works include the following: • Standardization of the road profile to a 5 m width and construction with appropriate side drains and meter drains. The pavement will be either earth or gravel depending on in situ material quality, traffic, and material availability. • Repair and/or improvement of relief and small stream crossings using culverts and smaller structures along roads—where necessary replacement or construction of additional structures. • Repair of existing larger structures including reinstatement of approaches and installation of appropriate protection works • Construction of necessary additional medium-size structures. • Clearing of verges and installation of signage. 35. Maintenance. Similar to the parent project, the maintenance part of contracts will use elements of the ABMS. The ABMS is a routine road maintenance system for low/medium trafficked rural gravel roads (5–90 vpd). The ‘Maintenance Area Base Camp’ is located centrally within each maintenance area which provides accommodation, offices, storage, and equipment workshop facilities. During the maintenance part of the rehabilitation and maintenance contracts, a contractor is permanently based within the maintenance area from where he provides the maintenance services throughout the three- year period. This is an essential part of the ABMS—the maintenance contractor is permanently established within the maintenance area from where he carries out the stipulated activities and is expected to react to any road-related issues expeditiously within his maintenance area. 36. Typical ABMS maintenance activities. The main activities can be broken into two main categories: • Equipment-intensive pavement activities. The equipment activities use an agricultural tractor with towed grader to smooth the carriageway surface and to restore the road profile (using the existing surface material) and tyre drags for a dry season activity that retards the formation of corrugations, helping to keep the running surface smooth. • Labor-intensive drainage and verge maintenance activities. These activities include clearing, cleaning, or repairing of side drains, drainage channels, structures, and culverts; verge clearing; patch gravelling pothole filling; and road furniture or signage maintenance. 37. The routine maintenance activities are carried out according to a schedule of work cycles which are determined for each road by considering the road type, condition, traffic usage, and terrain. The number of equipment-based cycles are stipulated for each road in the annual maintenance plan and are to be performed according to this schedule. The road condition depends on regular inputs either as tyre dragging or towed grading. The level of service measure for these equipment-based activities is the number of cycles performed. The number of labor-based activity cycles are planned for but will be scheduled by monitoring of the verge and drainage systems according to the agreed levels of service. 16 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) 38. Supervision. A supervision consultant will be procured for each province. This will comprise the normal supervisory setup of project management and teams to oversee the works. Bearing in mind the quantity of structures, large numbers of smaller work sites and spread-out nature of works will require a relatively high level of monitoring with suitable support staff to monitor and control activities. Key staff will include a project coordinator, bridge structures engineer, materials engineer, social and environmental specialist and site engineers. 39. Absorption capacity of the road construction industry. Due to a significant increase in the project size, an analysis of the road construction industry in the four additional provinces was conducted to assess its absorption capacity. Overall, the analysis concluded that there is sufficient capacity in each of the provinces. Thus, for the restoration of some of the vital roads damaged by Cyclone Idai that hit the provinces of Sofala, Manica, Tete, and Zambezia, the public works sector mobilized about 36 local contractors, with experience and technical capacity demonstrated in previous contracts with ANE. In addition, competition was high, with around 30 contractors per bid with competitive prices. Out of these 36 contractors, two-thirds were of national representation and one-third were local companies, with only a fraction being companies of foreign origin. In addition, according to ANE estimates, in each province there are about 10 local contractors that do not have contracts, indicating adequate capacity to competitively absorb the future works. C. Financial Management 40. The Road Fund will continue to have fiduciary responsibility for the implementation of the proposed AF. The recent review of the ongoing IFRDP FM arrangements concluded that the Road Fund has been working to ensure compliance with FM requirements of World Bank-financed operations. The first disbursement under this operation was on April 18, 2019. There are no outstanding unaudited interim financial reports (IFRs) or audit report under the project. 41. The FM and disbursement arrangements in place under the ongoing IFRDP will also apply for the proposed AF, and these arrangements are not proposed to be changed. The project funds, expenditures, and resources will be accounted for using the existing automated accounting software (Primavera), which is adequate as it can produce reliable financial reports required to monitor and manage the project progress effectively. Disbursement of IDA funds will be done on report-based procedures (IFRs). The proposed AF will make use of advances, direct payments, reimbursement, and special commitment methods for disbursements. The Road Fund will prepare quarterly IFRs and provide such reports to the World Bank within 45 days of the end of each calendar quarter. The project financial statements will be audited annually by the independent auditor (a private audit firm) in accordance with International Standards on Auditing as issued by the International Auditing and Assurance Standards Board within the International Federation of Accountants. 42. A Segregated Designated Account denominated in U.S. dollars will be opened at Bank of Mozambique and managed by the Road Fund. 43. The overall FM risk of the project is Moderate. 17 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) D. Procurement 44. Procurement procedures. The procurement of goods, works, non-consulting services, and consulting services for the proposed AF will be governed by the World Bank’s Procurement Regulations for IPF Borrowers, dated July 2016, revised November 2017 and August 2018 under the New Procurement Framework and the provisions stipulated in the Financing Agreement. Further, the Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants, dated October 15, 2006, and revised January 2011, will apply. 45. National procurement procedures. National open competitive procurement procedures may be used while approaching the national market. National open competitive procurement will observe the requirements stipulated in the Procurement Regulations for IPF Borrowers on National Procurement Procedures. Other national procurement arrangements (other than national open competitive procurement) that may be applied by the Recipient (such as limited/restricted competitive bidding, request for quotations/shopping, direct selection) shall be consistent with the World Bank’s Core Procurement Principles and ensure that the World Bank’s Anti-Corruption Guidelines and Sanctions Framework and contractual remedies set out in the Financing Agreement apply. 46. Project Procurement Strategy for Development (PPSD). The Recipient will update the PPSD, identifying optimum procurement strategies for meeting the development objectives of the project, based on which the Procurement Plan for the first 18 months will be prepared, setting the selection methods to be used by the Recipient in the procurement of goods, works, non-consulting services, and consulting services under the project. Given that the proposed AF is prepared under emergency response procedures, the deadline for updating the PPSD is deferred to the implementation. The Procurement Plan will be updated at least every 12 months, or as required, to reflect the actual project implementation needs. Each update shall require World Bank approval and will be publicly disclosed in accordance with the World Bank disclosure policy. 47. Procurement capacity and implementation arrangements. The overall procurement implementation arrangements of the project will remain the same under UGEA of ANE. The provincial delegations will be involved in the procurement of civil works and supervision consultant under Component 1, with oversight from the ANE central unit. Overall, the capacity of staff in the UGEA is satisfactory. There has been high turnover of ANE and UGEA senior managerial staff: two heads of ANE and two heads of UGEA have been replaced in less than three years. To date, the technical staff remain unchanged, with UGEA having sufficient technical expertise as well as physical resources to ensure that procurement under the proposed AF will be executed with adequate levels of transparency, efficiency, and fairness and considering all principles of value for money and fit for purpose. However, with the increased scope of the project, ANE will need to pay more attention to contract management. 48. Record keeping. The filing system is an issue that needs to be resolved. Files are not kept in a safe place that would prevent vandalism, theft, and breach of confidentiality of procurement processes. 49. Review by the World Bank of procurement decisions. Table 4 indicates the initial values for prior review by the World Bank. All activities estimated to cost below these amounts shall be treated as post review and will be reviewed by the World Bank during the implementation support missions under a post procurement review exercise. Direct contracting/single source will be subject to prior review only above 18 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) the amounts given in the below table. The World Bank may, from time to time, review the amounts based on the performance of the implementing agency. Table 4. Prior Review Thresholds Procurement Type Prior Review (US$) Works 10,000,000 Goods and Non-Consulting Services 2,000,000 Consultants (Firms) 1,000,000 Individual Consultants 300,000 Note: a. These thresholds are higher than those of the parent project due to the application of mandatory risk-based approach. 50. POM. The POM will be updated to conform with the requirements of the AF before effectiveness. E. Environmental and Social (including Safeguards) 51. In accordance with the World Bank Guidelines for AFs, the proposed AF will continue to be governed by the earlier Environmental and Social Safeguard Policies as the proposed project activities do not warrant a change in project categorization or triggering new safeguards policies. The parent project was classified as environmental category ‘B’ due to the nature and scale of the investments which are similar to the ones being proposed under the AF. Hence, the environmental category will remain unchanged for the AF. Because the project activities in the four new provinces will focus on the rehabilitation/reconstruction of damaged roads and bridges, a preliminary assessment indicates that none of the proposed roads will affect the biodiversity or cultural heritage sites; does not pass through a conservation/protected area; or will result in economic or physical displacement of people. Although the GBV/SEA risks are considered high in cyclone-affected areas, the risk assessment on GBV remains the same as the parent project and the same adequate mitigation measures through increase in scope of the GBV/SEA service provider to cover the six provinces will be designed and implemented. The safeguards policies triggered for the AF are the same as those under the parent project: OP 4.01 (Environmental Assessment), OP 4.04 (Natural Habitats), OP 4.11 (Physical Cultural Resources), and OP 4.12 (Involuntary Resettlement). The inclusion of new project areas requires an update of the original safeguard instruments (including Environmental and Social Management Framework [ESMF] and Resettlement Policy Framework [RPF]) through an environmental and social baseline assessment and public consultations in each of the four new provinces. These documents have been updated, consulted upon in each province, and redisclosed in-country and through the World Bank website on September 9, 2019. Site-specific ESMPs and RAPs (as needed) will be prepared once targeted roads are selected. The gathered information, which also included gender and GBV/SEA risks in the new areas, community health and safety risks, and risks associated to labor influx, among others, is part of the addendum for existing safeguards instruments. In addition, a set of community consultation and stakeholders’ engagement were carried out and the feedback gathered was subsequently incorporated in the final versions of the safeguard documents. 19 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) 52. The environmental and social risks of the AF are the same as those under the parent project and are maintained High. Potential adverse environmental and social impacts brought about by the road rehabilitation investments are expected to be manageable with adequate use of the safeguard tools. As in the parent project, proposed investments in four new provinces would be located within the Mozambique national territory, the scope of the activities/works remains the same, and no works are expected on international roads and bridges. The IFRDP AF will not finance new road construction (greenfield, including village/city bypasses) or any high-risk investment from an environmental/social safeguards perspective. 53. Environmental and social implementation arrangements. Both the Road Fund and ANE have extensive experience in successfully implementing similar World Bank-financed projects through the implementation of ESMFs/ESIAs/ESMPs and RPFs/RAPs/Abbreviated Resettlement Action Plans. ANE’s central monitoring unit is staffed with four environmental and social specialists, who are well-versed in both national regulations and World Bank safeguards requirements and will be responsible for the overall safeguards’ implementation of the proposed AF. In addition, ANE has environmental, social, health, and safety (ESHS) focal points in their provincial offices, who will also be involved in day-to-day project implementation. ANE will ensure that site-specific ESMPs and RAPs for individual roads rehabilitated under the project are incorporated into the civil work contracts and supervision contracts and that reporting on safeguards implementation is timely and detailed enough to be useful for project monitoring and supervision. Site-specific ESMPs will include OHS plans and the requirement to hire certified OHS staff (see also above). Budget provisions for implementation of ESHS and capacity building is included the ESMFs. Gender 54. This AF will contribute to closing the gender gaps on employment in the construction sector. Data show that women’s employment participation was 69 percent in 2016 while men was 81 percent among low-income populations. In the middle-income population, the gap increases to 30 percent (46 percent for women and 76 percent for men). The female workforce participation rate in construction is about 3 percent in Mozambique. Data from the recently closed World Bank RBMMP II project illustrate that women constitute only about 10 percent of the total workforce of the contractor and very few are employed as skilled workers. The project will promote women’s employment in road rehabilitation and maintenance in the geographical areas of intervention, and in collaboration with the Client, a Gender Action Plan will be prepared to address recruitment and retention barriers that women face. While this AF will not provide further funding for the component to pilot rural transport services under the parent project (Component 2), this component remains highly relevant to understand women’s mobility barriers and inform the design of transport services that address their particular needs. 55. Managing sexual exploitation and abuse risks. Similar to the parent project, a World Bank GBV risk assessment 7 was conducted to evaluate risk factors in the proposed new project areas. The risk is assessed as High using the World Bank GBV risk assessment tool and additional context/project analysis. In addition to the risks identified for the parent project, additional risks for SEA can be present in the new 7 This risk assessment considers context (including prevalence of different forms of GBV and child marriage, existence of a legal framework, care-seeking behaviors) and project-related risks (including labor influx and absorption capacity, supervision capacity, and poverty levels). 20 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) areas, derived from the humanitarian situation, including women and girls getting separated from their communities; protection systems, such as health services, broken down by the disasters; and destroyed livelihoods, which make them vulnerable to people with relatively more purchasing power (including construction workers). 56. Mitigation measures. The GoM is keen to take all necessary measures to address the risks of HIV/AIDs, SEA, and SH in the workplace. Following the parent project’s mitigation and response strategy and the recommendations of the Good Practice Note Addressing Gender Based Violence in IPF involving Major Civil Works, measures will be put in place for the new interventions such as a complementary mapping of service providers (including analysis of the quality of services) for SEA survivors as needed; enhanced contractual obligations in the bidding documents, including the submission by the contractor of a CoC defining obligations on SEA (to be signed by all workers); regular training on the contents of the CoC; the development by the contractor of an SEA Prevention and Response Action Plan with a response and an accountability framework; and a GRM with different entry points to register SEA complaints and where confidentiality will be kept for survivors and rights respected at all times of the process. 57. The TOR for the NGO GBV were being prepared under the parent project, when the Cyclones Idai and Kenneth hit Mozambique. ANE has revised the TOR by increasing the scope to include four additional provinces of Sofala, Manica, Tete, and Cabo Delgado. The NGO was identified, and the procurement process is ongoing. The NGO will support the design, implementation, and coordination of the mitigation, response, and monitoring activities to cases of SEA that may be brought about through the project. The terms of references for the services of the GBV NGO emphasize the importance of coordinating and complementing project efforts with the activities of the GBV Sub-Cluster under the leadership of UNFPA, to ensure that its mitigation and response activities for GBV risks are well coordinated. The GBV Sub - Cluster’s overall objective at the field level is to facilitate rapid implementation of GBV programming in an acute humanitarian emergency setting, including liaison and coordination with other clusters/organizations (coalition-building), training and sensitization, strategic planning, and monitoring and evaluation. 58. The project will also learn from the experience of the Mozambique’s Gender Coordination Group, which brings together most of the multilateral and bilateral donors as well as civil society organizations. The project will actively coordinate with the development partners and their ongoing programs addressing SEA in Mozambique, such as the UNFPA - Spotlight Project, the United States Agency for International Development, and the Swedish International Development Cooperation Agency. The project will also consider the experience of the GBV initiative on community strategies to raise awareness on GBV, including SEA, which could also further inform design of the project reporting mechanisms. 59. Governing frameworks. The implementation of the project shall be undertaken in line with an overall situational analysis of GBV in Mozambique and the project areas and within the current national legal and policy framework, including the Law Nr. 29/2009 on Domestic Violence Committed against Women and the National Plan of Action for the Fight and Prevention of Violence against Women (2008– 2012); provisions in the Constitution; the Law for the Prevention and Combat of Trafficking in Persons; the Multisectoral Mechanism on Integrated Response for Women Victims of Violence (Mecanismo Multisectorial de Atendimiento Integrado A Mulher Vitima de Violencia); and other additional relevant normative, policies, and programs. 21 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) 60. This assessment will be complemented with a broader assessment through the ESMF and ESMPs to ensure adequate implementation and monitoring of mitigation measures take place throughout the life of the project. Climate Change 61. Mozambique has been exposed to high risks of climate change impacts and natural disaster. The country has a long history of catastrophic flooding, which occurs almost annually during the rainy season, experiencing the highest impact of weather‐related shocks in the past 20 years, including Cyclones Idai in March and Kenneth in April 2019, in terms of fatalities and economic losses. Although the number of tropical cyclones globally is expected to be reduced in the future, the number of most intense tropical cyclones (Category 4 and 5), associated with more rainfall, will increase in a warming climate. 8 Hydrological modeling indicates that some areas in the north will experience floods more frequently. The coastal areas were identified to be more vulnerable to sea-level rise and there is high confidence that extremes in sea level will increase with mean sea-level rise, which will exacerbate the impact of storm surge on coastal regions and raise flooding and landfall concerns. The low-lying city of Beira was inundated by Cyclones Idai and Kenneth, which interrupted the Beira trade corridor, damaging roads and bridges. This will be supported and rehabilitated by the AF (Component 1). 62. The parent project incorporated climate resilience into the project design using an innovative ‘decision making under uncertainty’ (DMU) methodology. The methodology uses a transport network model to estimate network‐level climate adaptation co‐benefits and is based on a robust decision‐making framework that properly deals with a large range of plausible future scenarios. Traditional planning approaches do not account for the benefits of building climate resilience in the network and often lead to suboptimal investment decisions. The parent project piloted this innovative methodology to incorporate the benefits of flood disaster resilience into project prioritization and economic evaluation on two provinces of Nampula and Zambezia. Using a CRPT, flood risk is assessed based on flood likelihood maps under various climate change scenarios and on vulnerability functions for bridges, culverts, and road surfaces. The proposed AF will finance the expansion of the CRPT to cover the entire country and will integrate the tool with RAMS, allowing for better flood disruption risk management. 63. Greenhouse gas emission reduction. If the top nine priority roads are rehabilitated, carbon dioxide emissions are estimated to be reduced by about 304 tons over the 20-year project life. Gross emissions are estimated at about 3,542 tons and 3,239 tons without and with the project, respectively (the detailed analysis is described in annex 1). Citizen Engagement 64. To enhance project monitoring, transparency, and social accountability, the project will use and further deepen earlier initiatives undertaken under IDA‐funded projects. Already, smartphone‐based geospatial applications are being used by agencies in low‐capacity regions for monitoring of work sites and receiving citizens' feedback and grievances. The project will incorporate these mechanisms and 8 https://news.un.org/en/story/2019/05/1039381. 22 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) provide training on different aspects of filing, receiving, and responding effectively to stakeholders’ grievances. 65. The project will continue supporting citizen engagement activities, including, among others, (a) developing a grievance redress policy for the road sector; (b) developing detailed procedures for redress of grievances, including pinpointing grievance redressal roles and responsibilities among government officials; (c) designing a web‐based grievance registration system; (d) creating a mechanism for providing feedback to complainants and monitoring the status of resolution of grievances; (e) undertaking campaigns for sensitizing the general public on the opportunity of registering grievances, including the use of billboards and radio broadcasting; and (f) providing support to the road sector for establishment of an institutional mechanism for the registration, processing, management, and resolution of grievances. The Results Framework contains the following citizen engagement indicators reflecting these efforts: (a) grievances registered and responded and/or resolved within the stipulated service standards (percentage), and (b) project-supported organization(s) publishing periodic reports on GRM and how issues were resolved (including resolution rates and percentage). 66. The citizens’ engagement component will be implemented through the following arrangements: (a) building upon and empowering ‘Project Liaison Committees’, as described in annex 2; (b) establishing the use of a dedicated administrator, who will manage the tollfree number and web-based grievance registration system at the backend; (c) collaborating with the National Communication Institute of Mozambique (Instituto Nacional de Comunicação de Moçambique) for support on mobile communication regulatory aspects; (d) launching citizen‐centric public relations campaigns; and (e) specifying up front, in construction companies’ contracts, that the web‐based grievance registration system needs to be applied to depict resolution of all citizens’ issues. The project has earmarked about US$350,000 for this activity. V. WORLD BANK GRIEVANCE REDRESS 67. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. 23 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) VI SUMMARY TABLE OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Safeguard Policies Triggered ✔ Implementing Agency ✔ Project's Development Objectives ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ VII DETAILED CHANGE(S) COMPONENTS Current Component Name Current Cost Action Proposed Component Proposed Cost (US$, (US$, millions) Name millions) Rehabilitation and 95.00 Revised Rehabilitation and 221.00 Maintenance of Feeder Maintenance of Feeder Roads Roads Rehabilitation of Primary 80.00 Rehabilitation of 80.00 Road Network Primary Road Network Pilot Rural Transport 2.50 Pilot Rural Transport 2.50 Services Services 24 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Capacity Building and 7.50 Revised Capacity Building and 13.50 Project Administration Project Administration Contingency Emergency 0.00 Revised Contingency Emergency 0.00 Responce Responce TOTAL 185.00 317.00 LOAN CLOSING DATE(S) Ln/Cr/Tf Status Original Closing Current Proposed Proposed Deadline Closing(s) Closing for Withdrawal Applications IDA-D2490 Effective 31-Dec-2024 31-Dec-2024 31-Dec-2025 30-Apr-2026 Expected Disbursements (in US$) DISBURSTBL Fiscal Year Annual Cumulative 2018 0.00 0.00 2019 35,000,000.00 35,000,000.00 2020 35,000,000.00 70,000,000.00 2021 40,000,000.00 110,000,000.00 2022 40,000,000.00 150,000,000.00 2023 40,000,000.00 190,000,000.00 2024 40,000,000.00 230,000,000.00 2025 30,000,000.00 260,000,000.00 SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Latest ISR Rating Current Rating Political and Governance  Substantial  Substantial Macroeconomic  High  High Sector Strategies and Policies  Moderate  Moderate Technical Design of Project or Program  Moderate  Moderate Institutional Capacity for Implementation and  Substantial  Substantial Sustainability Fiduciary  Substantial  Substantial 25 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Environment and Social  High  High Stakeholders  Substantial  Substantial Other  High Overall  Substantial  Substantial Safguard_Table COMPLIANCE Change in Safeguard Policies Triggered Yes Safeguard Policies Triggered Current Proposed Environmental Assessment OP/BP Yes Yes 4.01 Performance Standards for Private No No Sector Activities OP/BP 4.03 Natural Habitats OP/BP 4.04 Yes Yes Forests OP/BP 4.36 No No Pest Management OP 4.09 No No Physical Cultural Resources OP/BP Yes Yes 4.11 Indigenous Peoples OP/BP 4.10 No No Involuntary Resettlement OP/BP 4.12 Yes Yes Safety of Dams OP/BP 4.37 No No Projects on International Waterways No No OP/BP 7.50 Projects in Disputed Areas OP/BP 7.60 No No 26 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) LEGAL COVENANTS2 LEGAL COVENANTS – Additional Financing for Integrated Feeder Road Development Project (P171093) Sections and Description Notwithstanding the provision of Section I.A.2 above, the Recipient, through ANE, not later than three (3) months after the Effective Date, shall appoint and thereafter maintain throughout Project implementation, a senior transport specialist, four road engineers, four procurement specialists, and five environmental and social specialists, all under terms of reference acceptable to the Association and included in the Operations Manual. Conditions Type Description Effectiveness The Recipient and the Project Implementation Entity have updated the Project Operations Manual in a manner satisfactory to the Association. Type Description Effectiveness The Subsidiary Agreement has been amended in a manner satisfactory to the Association and executed on behalf of the Recipient and the Project Implementing Entity. Type Description Effectiveness The Project Agreement has been executed between the Association and the Project Implementation Entity. Type Description Effectiveness The Cooperation Agreements between the Project Implementing Entity and ANE and INATTER respectively, have been amended and executed in a manner satisfactory to the Association. 27 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) VIII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Mozambique RESULT NO PDO Additional Financing for Integrated Feeder Road Development Project Project Development Objective(s) The Project Development Objective is to enhance road access in selected rural areas in support of livelihoods of local communities and to provide immediate response to an eligible crisis or emergency as needed. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Enhance road access in selected rural areas Rural accessibility (% of rural population within 5 kilometers of good 22.04 25.00 27.00 30.00 35.00 40.00 45.00 condition roads) in the project areas (Percentage) Action: This indicator has been Revised RAI (Rural Accessibility Index calculated as % of rural population 12.00 15.00 18.00 20.00 23.00 23.00 26.00 within 2 km of good condition roads) in the project areas 28 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 (Percentage) Action: This indicator has been Revised Road conditions measured as roads in good and fair condition as a share of total road 40.00 0.00 0.00 40.00 55.00 80.00 80.00 80.00 80.00 network in project areas (Percentage) Action: This indicator has been Revised Access to markets from land with high agriculture potential in 9,300.00 9,300.00 10,300.00 12,000.00 14,000.00 14,000.00 14,000.00 14,000.00 14,000.00 Nampula and Zambezia provinces (Square kilometer(km2)) Action: This indicator has been Revised PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Rehabilitation and Maintenance of Feeder Roads 29 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Length of unpaved feeder roads under area-based rehabilitation and 0.00 0.00 0.00 800.00 1,200.00 2,000.00 2,200.00 2,400.00 2,400.00 maintenance contracts (Kilometers) Action: This indicator has been Revised Bridges, drifts, and culverts selected for rehabilitation or reconstruction on 0.00 0.00 0.00 0.00 40.00 50.00 65.00 85.00 100.00 feeder roads in the project areas (Percentage) Action: This indicator has been Revised Pilot for Routine Maintenance through Pilot is under Pilot is second Microenterprises Pilot has been Pilot has been Pilot has been No pilot No pilot first year year designed, designed evaluated evaluated implemented, and implementation implementation evaluated (Text) Action: This indicator is New Rehabilitation of Primary Road Network Roads Rehabilitated (Percentage) 0.00 0.00 0.00 20.00 30.00 50.00 60.00 80.00 100.00 Action: This indicator has been Revised 30 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Roads Rehabilitated - rural (Percentage) 0.00 0.00 0.00 40.00 60.00 80.00 100.00 100.00 100.00 Action: This indicator has been Revised Roads rehabilitated - nonrural 0.00 0.00 0.00 50.00 50.00 50.00 50.00 50.00 100.00 (Percentage) Action: This indicator has been Revised Length of primary roads with road safety assessment 0.00 0.00 0.00 30.00 70.00 70.00 70.00 70.00 70.00 (Kilometers) Action: This indicator has been Revised Pilot Rural Transport Services Endorsement of PPP strategy for the road No No No No No Yes Yes Yes Yes sector (Yes/No) Action: This indicator has been Revised Launch of pilot for improved transport No No No Yes Yes Yes Yes Yes Yes services (Yes/No) Action: This indicator has been Revised Road asset No No No No No Yes Yes Yes Yes management system 31 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 used to inform annual implementation plan (Yes/No) Action: This indicator has been Revised Road condition data update (Yes/No) No No No No Yes Yes Yes Yes Yes Capacity Building and Project Administration Percent of women employed in feeder road rehabilitation and 0.00 0.00 0.00 5.00 15.00 20.00 20.00 20.00 20.00 maintenance contracts under the project (Percentage) Action: This indicator has been Revised Gender sensitive recruitment and communication guidelines developed No Yes for contractors and firms hired under the project. (Yes/No) Action: This indicator has been Revised Awareness of the GRM among women in 0.00 0.00 0.00 60.00 95.00 95.00 95.00 95.00 95.00 project area (Percentage) Action: This indicator has been Revised 32 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Grievances registered related to delivery of project benefits that 0.00 0.00 50.00 70.00 80.00 80.00 80.00 100.00 100.00 are addressed (Percentage) Action: This indicator has been Marked for Deletion Grievances registered that are responded / resolved within the stipulated service 0.00 30.00 60.00 100.00 100.00 100.00 100.00 100.00 standards (percentage (Percentage) Action: This indicator has been Revised Publishing periodic reports on GRM and how issues were No No Yes Yes Yes Yes Yes Yes resolved including resolution rates (Yes/No) Action: This indicator has been Revised Geospatial Climate Resilience Tool used to inform annual No No No No No Yes Yes Yes implementation plan (Yes/No) Action: This indicator has been Revised 33 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Number of ANE/RF staff trained in the 0.00 4.00 6.00 8.00 8.00 8.00 8.00 8.00 8.00 Geospatial Tool (Number) Development of a Strategic Network Preservation Plan on No No No Yes Yes Yes Yes Rehabilitation and Maintenance (Yes/No) Action: This indicator is New Contingency Emergency Responce Rapid Response to Govt's request after No Yes declared emergency (Yes/No) Action: This indicator has been Revised IO Table SPACE Monitoring & Evaluation Plan: PDO Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection The percentage of the rural Gridded Rural accessibility (% of rural population population living within 5 population Annual ANE within 5 kilometers of good condition kilometers of a road in and road roads) in the project areas good condition in the condition project areas. datasets. 34 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Gridded The percentage of the RAI (Rural Accessibility Index population population in the project calculated as % of rural population Annual and road ANE area living within 2 within 2 km of good condition roads) condition kilometers of a road in in the project areas datasets. good condition. ANE project implementati Road conditions measured as roads in on reports Annual ANE good and fair condition as a share of total and road road network in project areas condition survey reports Agriculture potential comes from Access to markets from land with high SPAM model Annual ANE agriculture potential in Nampula and developed by Zambezia provinces IFPRI and commodity prices. ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Length of unpaved feeder roads under Length of non-primary Annual ANE Project ANE area-based rehabilitation and unpaved classified roads in Implementati 35 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) maintenance contracts the ten selected districts. on Reports End target number of cross-drainage structures will be identified in year ANE project Bridges, drifts, and culverts selected for one of project Yearly. implementati ANE. rehabilitation or reconstruction on feeder implementation. Target is on reports. roads in the project areas expressed as the percentage of the project investment completed. The pilot will consist of ANE project Pilot for Routine Maintenance through creating two Yearly implementati ANE Microenterprises designed, implemented, microenterprises in two on reports and evaluated difference provinces and run them for two years. The number of kilometers of road to be rehabilitated will be determined in the ANE project first year of project Yearly. implementati ANE Roads Rehabilitated implementation. The target on reports is measured as the percentage of the rehabilitation program financed by the project. The number of kilometers of road to be rehabilitated will be determined in the ANE project first year of project Yearly. implementati ANE. Roads Rehabilitated - rural implementation. The target on reports. is expressed as a percentage of the rehabilitation program 36 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) financed by the project. The number of kilometers of road to be rehabilitated will be determined in the ANE project first year of project Yearly. implementati ANE. Roads rehabilitated - nonrural implementation. The target on reports. is expressed as a percentage of the rehabilitation program financed by the project. The project is piloting a ANE Project Length of primary roads with road safety new automated road safety Annual Implementati ANE assessment assessment technology on Reports using image recognition. A PPP strategy to RF Endorsement of PPP strategy for the road mainstream private sector Annual Implementati Road Fund sector financing in the road on Reports sector. The pilot will incorporate ANE Project actions to address some of Launch of pilot for improved transport Annual Implementati ANE the recommendations from services on Reports. . the analysis of women’s mobility barriers. Road Fund Road asset management system used to Annual Implementati Road Fund inform annual implementation plan on Reports Road condition data update Percent of women employed in feeder The indicator will be Annual ANE Project ANE road rehabilitation and maintenance tracked by comparing the Implementati 37 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) contracts under the project person-days worked by on gender. Reports. Indic ator will be tracked using information provided by the contractor on a monthly basis. Achieveme nt of the Gender sensitive recruitment and indicator communication guidelines developed for ANE reports. ANE will be contractors and firms hired under the reported project. yearly. The project The percentage of women will conduct in project communities surveys to Awareness of the GRM among women in who know how to report Annual establish ANE project area cases of sexual exploitation baseline data and abuse related to the and measure project. progress. The report provide The Project Operation d by the Grievances registered related to delivery Manual shall include Annual ANE project liaison of project benefits that are addressed incidence reporting and committees response protocol. and a newly developed 38 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) citizen engagement system. The report provide d by the project liaison Grievances registered that are responded The project shall adopt committees Annual ANE / resolved within the stipulated service incident reporting and and a newly standards (percentage response protocol. developed citizen engagement system. Publishing periodic reports on GRM and The resolution rates will be Annual GRM reports ANE how issues were resolved including published on the ANE resolution rates website. This tool will upgraded / Road Fund enhanced to include the Geospatial Climate Resilience Tool used to Annual Implementati Road Fund entire country before it can inform annual implementation plan on Reports. be run to inform annual implementation plans. RF annual report. 4 staff in ANE/RF HQ and 2 staff in Number of ANE/RF staff trained in the Annual Road Fund each ANE/RF Geospatial Tool provincial delegation will be trained 39 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) ANE project Development of a Strategic Network Yearly implementati ANE Preservation Plan on Rehabilitation and on reports Maintenance Administrative Rapid Response to Govt's request after Administrative ANE Calendar declared emergency ME IO Table SPACE 40 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Annex 1. Economic Analysis Overall Selection Framework 1. This AF aims at facilitating road network recovery and rehabilitation in four additional provinces that were affected by Cyclones Idai and Kenneth: Sofala, Manica, Tete, and Cabo Delgado. The two consecutive cyclones damaged the road network in significantly large areas of the four AF provinces. The initial PDNA identified 45 road sections as damaged and critical, of which the total length is about 3,600 km. Particularly, about 2,600 km are considered to require urgent repairs (table 1.1). Enormous financial resources are estimated to be required for immediate repair works as well as resilience improvement works. Given the currently available resources, strategic prioritization or sequencing is a must. 2. Similar to the parent project, the AF is only focused on nonprimary road connectivity, including secondary, tertiary, vicinal, and non-classified roads. Five sections of the primary roads, of which the total length is about 400 km, will be excluded from the following prioritization framework. Table 1.1. Length of Damaged Roads by Province Province Length (km) Estimated Costs (US$, millions) All Damaged Immediate Needs Immediate Works Resilience Works Manica 691 507 4.7 24.1 Sofala 1,345 955 19.1 124.2 Tete 1,203 913 12.4 109.8 Cabo Delgado 354 262 1.8 22.1 Total 3,593 2,637 38.0 280.2 3. To select priority roads in the provinces, the same principles as Component 1 of the parent project, which supports Nampula and Zambezia, are applied. The parent project selected its project areas based on the following socioeconomic and climatic characteristics: (a) criticality of road network; (b) current agricultural production; (c) agroclimatic potential of crop production; (d) poverty incidence; and (e) flood risk. While the criticality is measured by the difference in road user costs between the lowest cost route and the second-best route, the flood risk is measured by the potential flood damages to roads and structures. 4. The same criteria and weights are tentatively applied to select project roads in the additional four provinces: (a) criticality (0.125); (b) current agricultural production (0.125); (c) agricultural potential (0.125); (d) poverty (0.125); and (e) flood risk (0.5). The current ranking should be considered as tentative because some of the underlying data may not be accurate or not updated. Particularly, the criticality and flood risk indices should have been recalculated carefully given the recent cyclones. The final project roads will be determined during the project implementation once the underlying parameters are updated and the selection method is refined with the actual project needs and readiness considered. 41 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) 5. The provisional list of priority roads is shown in table 1.2. The table only includes the top 15 priority roads, while the full list is attached to this annex. The total cost of the top 15 priority roads is already estimated at US$205 million, well above the currently available budget. The top nine priority roads would cost about US$74 million, close to the available budget. Notably, the required investment costs vary significantly among the road sections. Some roads were damaged worse than others. Depending on available resources, the project will finance priority roads with the ranking as well as project readiness taken into account. Table 1.2. Summary of Top 15 Priority Roads Investment Road Priority Prelim Province Road District (US$, Type Length ADT Score (0 Rank millions) (km) to 1) 1 Sofala R564 Gorongosa-Piro Piro 9.01 Tertiary 71 342 0.670 Chifunde/Maravia/ 2 Tete N303 Bene-Zumbo 34.28 Secondary 350 92 0.498 Zumbo 3 Sofala N283:Caia / Marromeu Marromeu 10.24 Secondary 95 236 0.436 Crz N280/ Crz N1-Buzi/ 4 Sofala Buzi 0.72 Secondary 76 200 0.386 Casa Nova R1001 Casa Banana- Casa Banana/ 5 Sofala 7.19 Vicinal 90 70 0.381 Inhaminga Inhaminga 6 Sofala N281-Guara Guara/ Buzi Buzi 1.04 Secondary 13 141 0.375 Chifunde/ 7 Tete R603 Daca- Furancungo 4.65 Tertiary 66 110 0.352 Macanga N261, Macossa sede/ 8 Manica Limite com sofala (Km Macossa 0.35 Secondary 45 187 0.331 00+800) Cidade de Tete/ 9 Tete R1051 Tete-Boroma 6.32 Vicinal 67 2553 0.318 Marara Muaza/ 10 Sofala N282 Dondo - Matondo 48.59 Secondary 200 131 0.310 Cheringoma N280/281-Tica/ Nova 11 Sofala Nhamatanda/Buzi 0.21 Secondary 100 60 0.305 Sofala R441, Espungabera/ Rio 12 Manica Mossurize 6.52 Tertiary 110 70 0.295 Mossurize N302 Matema - Moatize/ Chiuta/ 13 Tete Furancungo-Vila 30.41 Secondary 290 265 0.292 Macanga/Chifunde Mualadzi R565 Maringue / Maríngue / 14 Sofala 9.72 Tertiary 135 100 0.287 Chemba Chemba N322 Madamba- Moatize/ DOA/ 15 Tete 36.55 Secondary 257 115 0.264 Mutarara Mutarara 42 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Economic Efficiency 6. The above multicriteria analysis (MCA) generally aims at balancing various socioeconomic benefits from road investment but may not ensure economic efficiency of investments. Detailed feasibility assessment needs to be carried out during the project implementation once the project roads are finally decided and detailed design and cost parameters are collected. 7. In the current assessment, a simplified cost-benefit analysis is carried out to broadly understand the economic viability of the project. The conventional consumer surplus approach is used, which compares road rehabilitation and maintenance costs and savings of RUC, such as vehicle operating costs and time costs. The underlying assumptions and parameters are largely generated from the Mozambique database but also rely on regional model data in Africa if country-specific data are not available. For simplicity purposes, the following assumptions are made: • Project life. The reconstruction works are assumed to be implemented in the first 2 years, with a project life of following 20 years. • Investment costs. The investment cost estimates follow the PDNA, which was carried out in April 2019. The cost is equally allocated to the first 2 years. • Maintenance costs. Different maintenance activities are assumed depending on type of road (table 1.3). While primary roads are generally paved, secondary and tertiary roads are normally unpaved. The unit costs are based on recent experience in Mozambique. Table 1.3. Maintenance Costs and Schedule Primary Other Roads Cost (US$ per km) Frequency Cost (US$ per km) Frequency Periodic 8,500 4 years 571 4 years Routine 1,500 1 years 300 1 years • Traffic. Recent traffic count data are available at ANE. Using the nationwide data, the vehicle type composition is assumed depending on average daily traffic (ADT). Roads with heavy traffic (that is, greater ADT), such as primary roads, normally carry more heavy vehicles and trucks (table 1.4). In each category, traffic is assumed to grow linearly at an annual growth rate of 3 percent. Table 1.4. Vehicle Type Composition Small Light Goods Mini Medium Light Medium Heavy Car Vehicle Bus Bus Truck Truck Truck ADT > 200 0.246 0.154 0.155 0.028 0.197 0.093 0.123 ADT < 200 0.265 0.259 0.120 0.031 0.164 0.072 0.063 • Road user benefit. The project is expected to contribute to reducing RUC, which varies considerably across types of vehicles. Due to the project, RUC are expected to decline by 20– 30 percent (table 1.5). 43 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Table 1.5. Road-User Costs (US$/vehicle-km) Light Goods Mini Heavy Small Car Vehicle bus Medium Bus Light Truck Medium Truck truck After project 0.10 0.23 0.20 0.50 0.23 0.35 0.55 Before project 0.13 0.31 0.26 0.71 0.31 0.46 0.72 8. Economic efficiency of investment is found to differ significantly across the long-listed roads (figure 1.4). While average Internal Rate of Return (IRR) is 56.6 percent among all 45 damaged roads, the median is 12.4 percent. NPVs at a discount rate of 6 percent vary from −US$36 million to US$107 million, with a mean of US$6.2 mission and a median of US$0.6 million. 9. The individual results for the top 15 priority roads are presented in table 1.2. 9 In some cases (for example, N280 and N261), investment efficiency is very high because of their relatively small investment requirements. On the other hand, investment efficiency can be low or even negative when investment requirements are large and traffic is limited, for instance, less than 100 vehicles per day, although, their socioeconomic importance is still considered to be high according to the MCA. Figure 1.1. Distribution of IRR Estimates .04 .03 Density .02 .01 0 0 50 100 150 200 250 IRR (%) Table 1.6. Summary of Economic Efficiency 5-km beneficiaries (US$, millions) (US$, millions) Prelim. Rank Road Length Investment (thousand) NPV (6%) Province IRR (%) District Road Type (km) ADT 1 Sofala R564 Gorongosa-Piro Piro 9.01 Tertiary 71 342 10.9 6.8 0.6 Chifunde/ 2 Tete N303 Bene-Zumbo Maravia/ 34.28 Secondary 350 92 31.0 −4.1 −21.8 Zumbo 3 Sofala N283:Caia / Marromeu Marromeu 10.24 Secondary 95 236 26.1 4.4 −1.3 4 Sofala Crz N280/Crz N1-Buzi/ Buzi 0.72 Secondary 76 200 20.2 45.7 4.3 9 See the full results in table 1.9. 44 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) 5-km beneficiaries (US$, millions) (US$, millions) Prelim. Rank Road Length Investment (thousand) NPV (6%) Province IRR (%) District Road Type (km) ADT Casa Nova R1001 Casa Banana- Casa Banana/ 5 Sofala 7.19 Vicinal 90 70 13.7 −4.9 −4.8 Inhaminga Inhaminga 6 Sofala N281-Guara Guara/Buzi Buzi 1.04 Secondary 13 141 3.4 1.3 −0.4 Chifunde/ 7 Tete R603 Daca- Furancungo 4.65 Tertiary 66 110 13.1 0.0 −2.0 Macanga N261, Macossa 8 Manica sede/Limite com sofala Macossa 0.35 Secondary 45 187 2.0 50.5 2.4 (Km 00+800) Cidade de 9 Tete R1051 Tete-Boroma 6.32 Vicinal 67 2553 30.6 62.7 58.6 Tete/ Marara Muaza/ 10 Sofala N282 Dondo - Matondo 48.59 Secondary 200 131 12.2 −7.5 −36.3 Cheringoma N280/281-Tica/Nova Nhamatanda/ 11 Sofala 0.21 Secondary 100 60 41.8 48.7 1.4 Sofala Buzi R441, Espungabera/Rio 12 Manica Mossurize 6.52 Tertiary 110 70 58.6 −2.8 −3.8 Mossurize N302 Matema - Moatize/Chiut 13 Tete Furancungo-Vila a/ Macanga/ 30.41 Secondary 290 265 67.5 6.0 −0.1 Mualadzi Chifunde R565 Maringue / Maríngue / 14 Sofala 9.72 Tertiary 135 100 23.3 −1.0 −4.8 Chemba Chemba Moatize/ N322 Madamba- 15 Tete DOA/ 36.55 Secondary 257 115 103.3 −4.9 −24.4 Mutarara Mutarara Potential Beneficiaries 10. Project beneficiaries are defined by the number of populations who live within 2 km or 5 km distance from a project road to be improved. This follows a conventional global indicator in the road sector. Since some of the damaged roads have not been geo-referenced properly yet, the population distribution is assumed to be uniform in each district. Using district-level population density, the number of beneficiaries is calculated for each road. 11. If all 45 long-listed roads were rehabilitated, a total of 735,000 and 1.8 million people could benefit from the project based on the 2 km and 5 km thresholds, respectively. If the top nine priority roads are selected based on the abovementioned preliminary ranking (table 1.6), about 60,000 and 150,000 people could benefit from these roads being restored. 45 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Emission Reductions 12. In theory, road improvement can generally help increase vehicle speed and enhance fuel efficiency, thus reducing carbon emissions. For instance, a Highway Development Model (HDM) for RUC model for Africa shows that carbon dioxide emission can be reduced by about 10 percent to 20 percent for most types of vehicles (table 1.7). Although the magnitude of reduction varies depending on not only vehicle type but also vehicle speed and road condition, this normal emission reduction is linearly applied to the above traffic forecasts by vehicle type. 13. If the top nine priority roads are rehabilitated, carbon dioxide emissions are estimated to be reduced by about 304 tons over the 20-year project life. Gross emissions are estimated at about 3,542 tons and 3,239 tons without and with the project, respectively (table 1.8). Other types of pollutants are also expected to be reduced, but the expected changes are relatively small. As far as carbon dioxide emissions are concerned, the social value of emission reduction is estimated at about US$9,100 when the World Bank’s recommended social value of carbon, that is, US$30 per ton, is used. 10 On the other hand, if all 45 long-listed roads were rehabilitated, more emissions could be reduced—the net reduction would be about 1,600 tons. Table 1.7. Normal Carbon Dioxide Emissions (g/km) by Vehicle Type Motor- Medium Pick- Light Medium Heavy Articulated Small Medium Large cycle car up truck truck truck truck bus bus bus Damaged 60.9 283.5 284.5 356.2 602.1 1,439.5 1,800.8 296.7 402.2 843.8 Recovered 75.5 221.4 235.6 358.9 599.1 1,279.8 1,592.4 310.5 432.7 765.0 Reduction (%) 24.0 −21.9 −17.2 0.8 −0.5 −11.1 −11.6 4.7 7.6 -9.3 Table 1.8. Estimated Emission Reduction Top 9 Roads All 45 Roads Emission (tons) Gross (without project) 3,542 19,506 Gross (with project) 3,239 17,852 Net change 304 1,654 Carbon price (US$ per ton) 30 30 Value of emission reduction (US$) 9,105 49,605 10 World Bank. 2014. Social Value of Carbon in Project Appraisal: Guidance Note to the World Bank Group Staff. 46 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Table 1.9. Full List of Damaged Roads in Sofala, Manica, Tete and Cabo Delgado (US$, millions) (US$, millions) (US$, millions) 5 km Benefits Priority Score Prelim. Rank AG potential Road Length Headcount Flood Risk Criticality AG Prod. Province Poverty (1–100) (1–100) (0 to 1) District (1000) (1000) (1000) Road Type (km) (6%) NPV ADT US$ IRR MT (%) Sofala N6 Beira / Inchope Beira/ 510,455 7,976 Primary 135 2,353 13 770 0.38 11.32 9.15 — — 254 81.4 107.8 Nhamatanda Sofala N280/281-Tica/Nova Sofala Nhamatanda/ 13,455 210 Secondary 100 60 8 616 0.67 0.00 3.23 0.305 11 42 48.7 1.4 Buzi Sofala N281-Guara Guara/ Buzi Buzi 66,623 1,041 Secondary 13 141 1 160 0.66 0.00 5.10 0.375 6 3 1.3 −0.4 Sofala Crz N280/Crz N1- Buzi/ Casa Buzi 45,976 718 Secondary 76 200 8 934 0.66 0.00 4.55 0.386 4 20 45.7 4.3 Nova Sofala N1 Save - Ripempe Machanga/ 331,645 5,182 Primary 55 708 3 362 0.69 18.03 5.91 — — 9 19.0 7.9 Chibabava Sofala N282 Dondo - Matondo Muaza/ 3,109,621 48,588 Secondary 200 131 11 4084 0.79 5.58 0.14 0.310 10 12 −7.5 −36.3 Cheringoma Sofala N283:Caia / Marromeu Marromeu 655,240 10,238 Secondary 95 236 52 2806 0.65 7.86 1.43 0.436 3 26 4.4 −1.3 Sofala R1000 Ponte sobre o Rio Nhamatanda 678,824 10,607 Vicinal 30 70 7 371 0.67 0.00 0.00 0.120 35 21 −13.9 −9.1 Metuchira Sofala N283 Caia - Sena Caia 70,955 1,109 Secondary 60 236 9 885 0.71 1.00 0.00 0.154 31 25 32.9 4.1 Sofala N283 Caia - Chemba Chemba/ 568,534 8,883 Secondary 100 65 4 843 0.82 0.00 0.00 0.153 32 16 −6.2 -6.3 Tambara Sofala N283 Sena - Chemba Sena 29,248 457 Secondary 40 65 6 590 0.71 0.00 2.00 0.240 20 17 12.4 0.3 Sofala R565 Maringue / Chemba Maríngue / 622,233 9,722 Tertiary 135 100 7 1457 0.82 0.00 2.00 0.287 14 23 −1.0 −4.8 Chemba Sofala R529 Chemba- Tambara Chemba/ 288,709 4,511 Tertiary 58 70 3 489 0.82 0.00 2.00 0.246 18 9 −4.7 −3.0 Tambara Sofala N261 Nhamapaza- Macossa Nhamapaza- 222,163 3,471 Secondary 47 69 2 574 0.77 0.00 2.00 0.240 19 7 −4.5 −2.3 Macossa Sofala R564 Gorongosa- Piro Piro 576,515 9,008 Tertiary 71 342 8 1850 0.82 0.00 8.75 0.670 1 11 6.8 0.6 Sofala R1001 Casa Banana- Casa Banana/ 460,320 7,193 Vicinal 90 70 3 1072 0.76 0.00 4.30 0.381 5 14 −4.9 −4.8 Inhaminga Inhaminga Sofala R1002 Inhamitanga- Cheringoma/ 24,224 379 Vicinal 47 100 7 899 0.70 0.00 0.47 0.165 29 8 27.6 1.1 Lacerdonia Marromeu Sofala R1003 Crz N6- Savane Beira 95,616 1,494 Vicinal 32 70 2 262 0.09 0.00 1.00 0.059 39 299 −0.9 −0.7 Sofala N/C Crz R1003- Sengo Beira 84,586 1,322 N/C 38 200 2 311 0.09 — — 0.007 40 355 14.9 1.3 Sofala N/C Crz N282-Maciamboboza Buzi 19,586 306 N/C 38 200 4 467 0.66 — — 0.113 37 10 51.8 2.2 47 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) (US$, millions) (US$, millions) (US$, millions) 5 km Benefits Priority Score Prelim. Rank AG potential Road Length Headcount Flood Risk Criticality AG Prod. Province Poverty (1–100) (1–100) (0 to 1) District (1000) (1000) (1000) Road Type (km) (6%) NPV ADT US$ IRR MT (%) Manica N6 Inchope- Chimoio Gondola 3,750 59 Primary 88 2,756 14 2,339 0.67 3.00 0.00 — 53 1,423.7 88.4 Manica N260, Cruz N6- Espungabera Mossurize/ 533,725 8,339 Secondary 109 864 8 758 0.74 6.60 0.83 0.236 21 39 30.9 27.5 Sussundega Manica NC Sussundenga/ Cadeado Sussundenga 56,625 885 N/C 117 200 12 1,148 0.76 0.170 27 27 54.5 6.8 Manica R968 Cruz. N6 / Gondola 61,200 956 Vicinal 45 70 7 1,196 0.67 0.00 0.00 0.144 34 27 6.2 0.0 Chipindaumue Manica R969 Cruz. N6 (Zonue)/ Manica 40,800 638 Vicinal 100 70 10 977 0.53 0.00 0.91 0.170 26 64 23.3 1.4 Cadeado -Rotanda Manica R520, Cruz. N1/Dombe Sussundenga 33,300 520 Tertiary 55 91 6 540 0.76 0.00 0.50 0.163 30 13 21.9 1.0 Manica R964, Moha/Rotanda Sussundenga 330,000 5,156 Vicinal 35 101 4 343 0.76 3.24 0.00 0.147 33 8 −6.2 −3.7 Manica N261, Macossa sede/ Limite Macossa 22,300 348 Secondary 45 187 3 1,361 0.83 0.00 3.00 0.331 8 2 50.5 2.4 com sofala (Km 00+800) Manica N261, Cruz. N7/Rio dos Macossa 25,000 391 Secondary 45 187 3 1,361 0.83 0.00 0.00 0.167 28 2 46.1 2.4 elefantes Manica R441, Espungabera /Rio Mossurize 417,150 6,518 Tertiary 110 70 27 2,416 0.72 0.00 1.00 0.295 12 59 −2.8 −3.8 Mossurize Manica N7, Guro/Km30 Guro 133,875 2,092 Primary 30 2,159 2 361 0.84 2.00 0.00 — — 4 67.0 21.5 Tete N303 Bene-Zumbo Chifunde/ 2,193,921 34,280 Secondary 350 92 7 3,346 0.80 0.00 4.82 0.498 2 31 −4.1 −21.8 Maravia/ Zumbo Tete N322 Madamba- Mutarara Moatize/ DOA/ 2,339,331 36,552 Secondary 257 115 9 688 0.73 1.00 2.07 0.264 15 103 −4.9 −24.4 Mutarara Tete N302 Matema - Furancungo- Moatize/ Chiuta/ 1,946,000 30,406 Secondary 290 265 5 1,213 0.74 0.00 2.55 0.292 13 68 6.0 −0.1 Vila Mualadzi Macanga/ Chifunde Tete R1051 Tete- Boroma Cidade de Tete/ 404,700 6,323 Vicinal 67 2,553 2 280 0.38 15.00 2.90 0.318 9 31 62.7 58.6 Marara Tete R603 Daca- Furancungo Chifunde/ 297,540 4,649 Tertiary 66 110 4 712 0.75 0.00 3.96 0.352 7 13 0.0 −2.0 Macanga Tete R609 Cruz (Bene) / Chifunde Chifunde 1,275 20 Tertiary 76 70 4 1,841 0.76 0.00 1.00 0.229 23 12 248.4 1.5 Tete NC-Zóbuè/Wiriamu Moatize 83,631 1,307 N/C 29.5 50 2 389 0.63 0.099 38 11 −3.7 −0.8 Cabo N 380 MACOMIA - OASSE MACOMIA 61,450 960 Secondary 102 400 13 1,775 0.62 2.10 0.00 0.183 24 20 86.4 14.1 Delgado (KM 10+000) Cabo R 760 MUXARA - MECUFI MECUFI 244,000 3,813 Tertiary 35 691 5 125 0.67 0.00 0.18 0.117 36 18 18.6 5.5 Delgado 48 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) (US$, millions) (US$, millions) (US$, millions) 5 km Benefits Priority Score Prelim. Rank AG potential Road Length Headcount Flood Risk Criticality AG Prod. Province Poverty (1–100) (1–100) (0 to 1) District (1000) (1000) (1000) Road Type (km) (6%) NPV ADT US$ IRR MT (%) Cabo N 1 PEMBA - METORO Pemba 128,000 2,000 Primary 92 1,800 12 1,164 0.61 7.48 0.13 — — 15 136.8 57.4 Delgado Cabo R 767 CRZ N 380 UNGUIA - Meluco 480,400 7,506 Tertiary 56 43 3 1,501 0.69 0.00 2.00 0.257 16 3 −11.9 −6.3 Delgado MELUCO Cabo R 762 CRZ N 1 ALDEIA METUGE 150,200 2,347 Tertiary 23 496 4 243 0.55 0.00 3.00 0.253 17 13 14.3 2.1 Delgado MUEPANE - METUGE SEDE Cabo R 766 MACOMIA - MUCOJO MACOMIA 415,400 6,491 Tertiary 46 100 6 800 0.62 0.00 2.00 0.229 22 9 −6.0 −4.6 Delgado Cabo R767 19 Outubro- Quissanga Quissanga 300,900 4,702 Tertiary 46 30 7 809 0.64 0.00 1.00 0.181 25 12 −13.3 −4.0 Delgado 49 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Annex 2: Prioritization and Selection of AF Project Roads Introduction 1. Thoughtful and data-driven prioritization process is critical for rational development of the rural network, for optimization of scarce resources, and for addressing the most climatically prudent method to make the network resilient. This is not a one-time exercise but a continuous way of optimizing interventions to keep the rural network in the best condition possible in the funding envelope available. The Road Prioritization Process 2. The economic analysis for additional funding for Component 1 will be carried out in the following two phases: (a) identify the priority roads in each province and (b) complete a cost-benefit analysis of road interventions in the priority list of roads. 3. Road interventions will be selected from a set of five alternatives in each selected province using a transport network model to estimate network-level climate adaptation co-benefits, with a large range of plausible future scenarios. 4. The prioritization of roads in each province will be based on two pillars: (a) socioeconomic criticality and (b) current and future flood risk to the roads. Socioeconomic criticality values will be composed of the following five attributes: (a) lack of network redundancies; (b) proximity to high agriculture potential areas; (c) proximity to high fishery potential areas; (d) current agricultural production; and (e) the district poverty rate. The second pillar, flood risk, is calculated using flood maps of current flood risk and future climate change scenarios combined with vulnerability functions for bridges, culverts, and road surfaces. The flood risk is calculated as expected annual damage to infrastructure using 10 different return periods and four climate scenarios (current, low, medium, and high climate change). 5. Additionally, five different investment options already identified in each of the selected provinces, based on structured interactions with stakeholders in the previous phase: (a) upgrade to surface treatment; (b) upgrade to gravel road; (c) rehabilitation of earth roads; (d) cleaning and repairing of bridges; and (e) replacement of culverts. Each of these solutions leads to four kinds of cost-savings: (a) reduction of flood risk for users; (b) reduction of flood risk for road agency (lower repair and construction costs after flood events); (c) reduction of RUCs due to improvement of road conditions; and (d) reduction of maintenance expenditure due to improvement of road conditions. 6. Main criteria are defined as the following three points of sustainable development (with more detailed sub criteria presented in brackets): (a) economic aspects (road rehabilitation costs, road maintenance costs, vehicle operation cost-savings, accident costs); (b) social aspects (agricultural production along each road, population served per kilometre of rehabilitated road, access to schools, health centres, markets, administration centres, and so on); and (c) environmental impact/risks (possibility of land degradation (erosion, risk of flooding, landslides), encroachment onto historical or protected areas (monuments, parks, reserves, and so on), disturbance to the natural environment (trees to be felled along each road and so on). 7. Prioritization methodology. Having defined the objectives, the main criteria, and sub criteria, the 50 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) consultant selected the Analytic Hierarchy Process (AHP) method for processing and comparing the data sets collected under the various defined criteria. This considers a methodology that takes into account sustainability and inputs from stakeholders and also encompasses the philosophy of MCA for decision making. The model utilizes the principle of pairwise comparisons among all criteria and sub criteria. Each criterion is compared with all other criteria to determine relative weights. The relative criteria weights to be used are developed through stakeholder participation in rating their judgment of the significance of each of the criteria. This is different from the parent project, which uses disaster resilience analysis with the decision making under uncertainty methodology. This methodology was found unsuitable for the AF, as the specific disaster has taken place and an inventory of damages already compiled. 8. The AHP methodology has a number of advantages: it provides a framework for dealing with multiple criteria decision making. It can be used to rank alternative options based on different criteria regardless of their unit of measurements, that is, economic, social, and environmental parameters can be used in their original units of measurement to synthesize the ranking of alternatives. It allows for inputs from stakeholders who are given an opportunity to express their preferences among the given criteria. It provides a scale to measure intangibles, that is, people’s judgments can be measured and used to give weights to competing criteria. The AHP is able to handle both quantitative and qualitative data at the same time. 9. Information and data collection. The data or information for the sub criteria was obtained as follows: • Road rehabilitation costs. Bills of quantities and estimate costs will be prepared for each road from the survey data. • Road maintenance costs. Average maintenance costs will be obtained using theoretically derived costs and comparing with current provincial maintenance projects and adjusted for inflation. • Vehicle operation cost savings. Calculations will be done using the HDM4 model. Expected vehicle volumes were estimated from surplus produce projections for each road. Produce data were obtained from the respective districts. • Accident costs. Calculations will be done using statistical data for Mozambique and information from literature review. • Agricultural production along each road. Information will be obtained from the respective districts. • Population served per kilometre of rehabilitated road. Number of inhabitants within 5 km on either side of each road will be obtained from the respective districts. Calculations will then be made to get the required input measurement. • Access to schools, health centres, markets, administration centres, and so on. Apart from the information recorded by the survey team, additional information will be also be obtained from the respective districts. 51 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) • Possibility of land degradation (erosion, risk of flooding, and landslides). Portions of road susceptible to erosion, flood risk, and/or landslides were noted and recorded by the survey team. The total lengths of such sections will be measured as input for this sub criterion. • Encroachment onto historical or protected areas (monuments, parks, reserves, and so on). This information will be captured by the survey team and recorded as number of such sites on each road. • Disturbance to the natural environment (trees to be felled along each road and so on). Number of trees to be felled from the road way will be physically counted on each road by the survey team. • Stakeholder preferences ratings for the chosen criteria. Questionnaires will be designed, printed, and issued to relevant stakeholders (district administration personnel, ANE provincial engineers, and community leaders) to rate the selected criteria. 10. Data processing summaries and presentation. Given that the district road network comprises roads of varying lengths from as little as 1 km to over 40 km, it was deemed necessary to combine or group some of these roads according to their locations. This will be done to avoid a scenario whereby the ranking process will be distorted if very short road sections are compared against very long sections. The grouping process will be carried out in liaison with the ANE provincial engineers. 11. The data for each road group will be processed using Excel spreadsheets. A ranking score for each row will be calculated using the same spreadsheets and the results presented in tabular form with the highest ranked road in first position and the lowest ranked road in the final position. 12. These ranked lists then form the basis for preparing the rehabilitation and/or maintenance implementation programs in the four provinces. 52 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Figure 2.1. Project Road Prioritization Process 53 The World Bank Additional Financing for Integrated Feeder Road Development Project (P171093) Annex 3. Map 54