Document of The World Bank Report No: 22914-UG PROJECT APPRAISAL DOCUMENT ONA PROPOSED CREDIT IN THE AMOUNT OF SDR 21.7 MILLION (US$27.0 MILLION EQUIVALENT) AND A PROPOSED GEF GRANT IN THE AMOUNT OF SDR 6.4 MILLION (US$8.0 MILLION EQUIVALENT) TO THE REPUBLIC OF UGANDA FOR A PROTECTED AREAS MANAGEMENT AND SUSTAINABLE USE PROJECT June 4, 2002 Environment and Social Development Unit Africa Regional Office CURRENCY EQUIVALENTS (Exchange Rate Effective November 26, 2001) Currency Unit = Shillings UShs I = US$0.00058 US$1 = UShs 1737 FISCAL YEAR July I -- June 30 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CAST Conservation and Sustainable Tourism CBD Convention on Biological Diversity CBO Community Based Organization CFAA Country Financial Accountability Assessment CITES Convention on International Trade in Endangered Species COP Conference of Parties DAM Department of Antiquities and Museums EC European Commission EOP End of Project EFMP II Second Economic and Financial Management Project GEF Global Environment Fund GOU Government of Uganda IA Implementing Agency ICB-PAMSU Institutional Capacity Building for Protected Areas Management and Sustainable Use IDA International Development Association ITMP Integrated Tourism Master Plan KD Kidepo National Park LGDP Local Government Development Project MF Murchison Falls National Park MTTI Ministry of Tourism, Trade and Industry NGO Non-Governmental Organization NP National Parks PA Protected Area PAMSU Protected Areas Management and Sustainable Use PASP Protected Areas System Plan PAWS Protected Areas and Wildlife Service PCU Project Coordination Unit PEAP Poverty Eradication Action Plan PRSC Poverty Reduction Support Credit PRSP Poverty Reduction Support Paper QE Queen Elizabeth National Park SWAP Sector Wide Action Plan TA Technical Assistance TOR Term of Reference UMMvA Uganda Museums and Monuments Agency UTB Uganda Tourist Board UWA Uganda Wildlife Authority UWEC Uganda Wildlife Education Centre UWS Uganda Wildlife Statute WCE Wildlife Conservation Education WD Wildlife Department WR Wildlife Resources Vice President: Callisto E. Madavo Country Director: Judy M. O'Connor Sector Manager: Richard G. Scobey Team Leader: Nathalie W. Johnson UGANDA PROTECTED AREAS MANAGEMENT AND SUSTAINABLE USE PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 3 2. Global objective 5 3. Key performance indicators 5 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 6 2. Main sector issues and Government strategy 8 3. Sector issues to be addressed by the project and strategic choices 8 C. Project Description Summary 1. Project components 9 2. Key policy and institutional reforms supported by the project 12 3. Benefits and target population 13 4. Institutional and implementation arrangements 14 D. Project Rationale 1. Project alternatives considered and reasons for rejection 16 2. Major related projects financed by the Bank and other development agencies 17 3. Lessons learned and reflected in the project design 17 4. Indications of borrower commitment and ownership 18 5. Value added of Bank support in this project 18 E. Summary Project Analysis 1. Economic 19 2. Financial 19 3. Technical 20 4. Institutional 20 5. Environmental 22 6. Social 22 7. Safeguard Policies 23 F. Sustainability and Risks 1. Sustainability 24 2. Critical risks 25 3. Possible controversial aspects 26 G. Main Credit/Grant Conditions 1. Effectiveness Condition 26 2. Other 27 H. Readiness for Implementation 27 I. Compliance with Bank Policies 27 Annexes Annex 1: Project Design Summary 28 Annex 2: Detailed Project Description 34 Annex 3: Estimated Project Costs 39 Annex 4: Incremental Costs and Global Enviromnental Benefits 40 Annex 5: Financial Summary 48 Annex 6: Procurement and Disbursement Anangements 65 Annex 7: Project Processing Schedule 74 Annex 8: Documents in the Project File 75 Annex 9: Statement of Loans and Credits 76 Annex 10: Country at a Glance 78 Annex 11: Threats and Root Causes of Biodiversity Loss and Mitigating Actions 80 Annex 12: STAP Technical Review 83 Annex 13: Response to the STAP Technical Review 85 Annex 14: Letter of Endorsement 86 MAP(S) IBRD 29597 UGANDA Protected Areas Management and Sustainable Use Project Project Appraisal Document Africa Regional Office AFTES Dat.: June 4, 2002 Team Leader: Nathalie Weier Johnson Cot ntry Director: Judy M. O'Connor Sector Manager: Richard G. Scobey Pro lect ID: P065437 Sector(s): VY - Other Environment Lending Instrument: Specific Investment Loan (SIL) Theme(s): Environment Poverty Targeted Intervention: N Global Supplemental ID: P075932 Team Leader: Nathalie Weier Johnson Foc l Area: B - Biodiversity Sector Manager/Director: Richard G. Scobey Supplement Fully Blended? Yes Sector(s): VY - Other Environment HetFinancing' Dat' ' - - - - -- - - - -- - - - ----- -- -.. 1)Loan [XI Credit [XI Grant [ 1 Guarantee [ Other: Foi Loans/CredltslOthers: Amount (US$m): 35.0 million Proposed Terms (IDA): Standard Credit Gr3ce period (years): 10 Years to maturity: 40 Commitment fee: 0.5 Service charge: 0.75% Finahcing Plan (USSm): Source Local Foreign Total BORROWERIRECIPIENT 3.00 0.00 3.00 IDA 18.90 8.10 27.00 GLOBAL ENVIRONMENT FACILITY 6.10 1.90 8.00 Tolal: 28.00 10.00 38.00 Bicrrower/Recipient: THE REPUBLIC OF UGANDA Responsible agency: MINISTRY OF TOURISM, TRADE AND INDUSTRY Project Coordination Unit Acdress: Plot 6/8, 5th Floor Farmers House, P.O. Box 21957, Kampala, Uganda Ccntact Person: Mr. David Abura-Ogwang, Project Director Tel: 256-41-254827/W Fax: 256-41-342011 Email: pamsu@pamsu.org Ot'ier Agency(ies): Uganda Wildlife Authority Address: Plot 3 Kintu Road, Nakasero, P.O. Box 3530, Kampala, Uganda Contact Person: Dr. Arthur R Mugisha, Executive Director Tel: 256-41-346287 Fax: 256-41-346291 Email: uwa@uwa.or.ug Uganda Wildlife Education Centre Address: P.O. Box 369, Entebbe, Uganda Contact Person: Ms. Beti 0. Kamya, Executive Director Tel: 256-41-320520 Fax: 256-41-320073 Email: P065437 Estimated Disbursements (Bank FYIUS$m): FY- - 2003 2004 2005 2006 2007 Annual 8.80 6.00 4.20 4.20 3.80 Cumulative 8.80 14.80 19.00 23.20 27.00 P075932 (GEF) Estimated Disbursements ( Bank FY/US$m): FY [ 2003 - 2004 - -2005- 2006 2007- Annual 2.30 2.40 1.60 0.90 0.80 I Cumulative 2.30 4.70 6.30 7.20 8.00 l Project Implementation period: 5 years Expected effectiveness date: 09/03/2002 Expected closing date: 03/31/2008 -2- A. Project Development Objective 1. Project development objective: (see Annex 1) Background Tourism and Wildlife Sector in Uganda Due to its location in a zone of overlap between the dry East African savannah and the West African rain forest, Uganda possesses a rich natural endowment of forests, mountains, and waterways, as well as some of the richest assemblages of biological diversity in Africa. Its wide geographical and altitudinal range, spanning from 600 meters to 5100 meters, has resulted in a unique diversity of ecosystems and species. These include extensive wetlands and swamp areas, grass and woodland savannahs, tropical high forests, and Afro-alpine forest areas. For its size, Uganda is one of the most species-rich countries in Africa. For example, Uganda has more than 11% of the world's bird species and more than 7% of total world mammals. This biological diversity is protected through a system of protected areas, currently undergoing a process of rationalization. After revision the area of national parks, wildlife reserves and animal sanctuaries will amount to 22,000 km2. The protected areas are managed by the Uganda Wildlife Authority (UWA), a parastatal formed in 1996 by merging Uganda National Parks and the Game Department. Initially, the new UWA suffered from an unstable management regime, and has only since early 1999 been able to focus on building its organizational and management capacity. Before Uganda's period of civil unrest starting in the early 1970s, Uganda was, based on its wildlife, the premier tourism destination in East Africa. Its national parks and cultural heritage still have the potential for forming the basis of a competitive tourism product. Currently Uganda is the only country where tourists can view mountain gorillas. Also competitive internationally are two or three of its savannah parks, the Ruwenzori Mountains, and opportunities for chimpanzee viewing. The country has placed considerable emphasis on developing its tourism product. However, development targets have consistently failed in recent years to meet expectations for a range of internal and external reasons: continuing insecurity in a number of parts of the country in which prime tourism destinations are located; low capacity in the private sector to develop tourism products and provide related services; problems with the concessioning process for lodges and activities in National Parks; and the low volumes leading to diseconomies of scale - current international arrivals of leisure tourists are estimated to be approximately 5,000 per annum. The focus of the proposed Protected Areas Management and Sustainable Use (PAMSU) project is on the rehabilitation and sustainable management of the natural resources The "Conservation and Sustainable Tourism" (CAST) program is the GOU's umbrella program to support conservation of the country's wildlife and cultural heritage and assets and to implement the Integrated Tourism Master Plan (ITMP). ITMP is based on Protected Areas (PAs) as the primary attraction, with a secondary emphasis on cultural assets. It emphasizes that growth in the sector must follow a modest pace corresponding to the rate of recovery of the underlying natural assets and the rehabilitation and expansion of the supporting Infrastructure. The proposed PAMSU Project is a follow-on project to the Institutional Capacity Building for Protected Areas Management and Sustainable Use project (ICB-PAMSU), scheduled to close December 2002. PAMSU represents the World Bank's second phase of support to the GOUs CAST program. The broad objectives of the ICB-PAMSU project have been achieved, which provides the necessary capacity to - 3- proceed with the PAMSU phase of support Those achievements include the following: (1) an effective and efficient overall institutional framework for the wildlife/protected areas management sector has been established, with roles and capabilities of the vanous institutions well coordinated including the relationships between public and private sector and NGOs; (2) the planning, management and implementation capacity of the individual sectoral institutions to ensure sustainability and accountability has been strengthened, and (3) the overall human resource capacity and professionalism in the sector has been improved. During the project design and appraisal of the ICB-PAMSU project, benchmark indicators were established to determine readiness for moving on to the PAMSU phase of support. While work on some of the indicators is still in progress, the benchmarks have been satisfactorily met Project Development Objective The development objective of the PAMSU is the "Sustainable and cost-effective management of Uganda's wildlife and cultural resources". Sustainability is promoted through a combination of (1) providing funds for improving Uganda's ability to attract tourists to its wildlife and cultural heritage while, (2) encouraging cost-effective management strategies so as to reduce overall operating costs of the institutions managing these resources. The project consists of four components, each the responsibility of one of the four implementing agencies: 1. Uganda Wildlife Authority: Maintain cost-effective and efficient wildlife management inside & outside Protected Areas 2. Uganda Wildlife Education Center (UWEC): Public awareness and knowledge in environmental and conservation issues created 3. Ministry of Tourism, Trade and Industry (MTI): Develop the framework for the tourism sector of the economy to the maximum extent possible, consistent with the protection of environmental and cultural values 4. Department of Antiquities and Museums (DAM): The Cultural Heritage of Uganda preserved The project also finances the Project Coordination Unit (PCU). The role of the PCU is to promote effective coordination and proactive management of the project, and capacity building which serves to develop other agencies. Indicators of effective management have been set for the PCU to recognize this important role. The prior project - ICB-PAMSU - financed the institutional strengthening of the implementing agencies retained under PAMSU. PAMSU provides moderate amount of financing to each agency for equipment, training, vehicles, and incremental recurrent costs, along with those consultancies, primarily international, to encourage cost-effective implementation of plans devised under ICB-PAMSU. -4 - 2. Global objective: (see Annex 1) The global environmental objective is to ensure the effective, long-term conservation of Uganda's biodiversity in the face of competing economic pressures. Protection will be ensured over a wide range of ecosystem types, including wetlands, swamps, tropical high forests, Afroalpine forests, grass and woodland savannahs, and internationally important lakes and rivers. Uganda is the fourth most densely populated country in Africa, 89% rural, with 85 people per square kilometer, largely dependent on smallholder agriculture for sustenance, and with a steep population growth rate. At the same time, Uganda ranks in the top ten nations in Africa in terms of species numbers for all major taxa, and among the top ten in the world for mammals, including over half of the known world population of mountain gorilla. Its concentration of biological wealth offers exceptional opportunities to achieve global biodiversity conservation objectives cost-effectively. The project design is consistent with guidance from the Conference of the Parties as it addresses in situ conservation as it includes: (i) capacity building; (ii) strengthening the conservation, management, and sustainable use of ecosystems and habitats; (iii) strengthening the involvement of local and indigenous people; and (iv) integrating social dimensions including those related to poverty. 3. Key performance indicators: (see Annex 1) Progress in achieving the project development objective will be evaluated on the basis of key performance indicators. These indicators, along with an indication of their means of assessment are: 1. Revenue generation at UWA increases to UShs 6.Obn by the 5th year, to be assessed through review of UWA's financial records. 2. Poaching of key species in patrol area reduced from initial baseline. Poaching incidents are to be assessed through field visits and review of UWA staff reports during the annual monitoring review and included in the Annual Review report 3. Population number of key mrnmmal species in Queen Elizabeth (QE), Murchison Falls (MF), Kidepo (KD) conservation areas increase by 5% within 5 years. An aerial survey, along with ground verification of key mammal species is to be conducted in the 5th year of the project within Parks for which baseline data exists from 1993 and 1999/2000. 4. Communities are satisfied with UWA response to problem animals. Assessments are to be conducted of those communities near Queen Elizabeth and Kibale National Parks that have reported significant number of problem animal incidents in the past 5. Approximately 120,000 visitors/year including 80,000 students visit Uganda Wildlife Education Centre. Gate records from UWEC provide accurate records of attendance. 6. Ministry of Education adopts Wildlife Conservation Education (WCE) into primary school education in Uganda by End of Project (EOP). This objective can be assessed by review of curriculum. 7. 40% of primary schools receive Wildlife Conservation Education material by EOP The Ministry of Education's records, along with those of UWEC provide the means of verifying this indicator. 8. Accurate and reliable information (statistics, market analysis, etc) about Uganda's tourist potential is established. Implementation effectiveness is assessed through Indicators of Performance for each of the components and the agency which implement those components. Organized according to the component's implementing agency, significant of these are: -5 - Uganda Wildlife Agency: 1. Implementation of the Protected Area Systems Plan. This is to be assessed by the demarcation of boundaries 2. The development of cost-effective strategies for managing the existing Park Assets. This will be assessed by the completion and implementation of General Management Plans for the Protected Areas as well as the integration of specific Annual Operating Plans toward achieving those objectives. 3. Improvements in financial sustainability of the systems is encouraged by developing, over the 5 years, detailed analysis of the costs of PA operations and, from that, criteria from whence the PA can be managed more effectively. 4. Crucial for both immediate and long-term sustainability is improving the revenue base of UWA. Targets for this include substantial improvements in collection of gate and concession revenue as well as developing a more stable revenue base through encouraging more visitations by Ugandan nationals. Uganda Wildlife Education Centre: 1. Efforts towards creating public awareness and knowledge in environmental and conservation issues will be assessed through achievement of a wildlife conservation curriculum integrated into primary school education. Regular visitation will be increased through expanding the day-trip and overnight programs for school child education. 2. The center's message and appeal will be expanded through development of three major exhibits (Rhino, and both Kidepo and Lake Mburo ecological zones). An indicator of its rehabilitation efforts will be completion and population of a new Chimpanzee rehabilitation site. Ministry of Tourism, Trade and Industry: The Ministry's role in creating an effective tourism framework will be assessed by the adoption of a Tourism Policy and enabling legislation; along with licensing and registration of major service providers, and the completion of an extensive data base to provide accurate and reliable information to the industry. Department of Antiquities and Museums: The Uganda Museums and Monuments Agency (UMMA) will be established as a semi-autonomous body to conserve and promote awareness of Uganda's cultural heritage. Indicators of performance that this objective is being achieved are: (1) the identification and development in a sustainable way of two antiquarian sites outside of Kampala; and (2) steady increase in visitation to the National Museum in Kampala from its early post renovation baseline. B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: IDA/R2000-187 (IFC/R2000-202) Date of latest CAS discussion: 11/16/2000 The Bank discussed the Poverty Reduction Support Paper (PRSP) on May 2, 2000 (Document Number: IDA/SecM2000-0145) and the PRSP Progress Report was discussed on May 31, 2001 (Document Number IDA/SecM2001-0219). -6 - Government's strategy for economic transformation is spelled out in the Poverty Eradication Action Plan (PEAP) 2000. The PEAP provides a framework for Government planning and guides the fonnulation of Sector Wide Action Plans (SWAPs). The prirnary objective of the PEAP is to develop policies and resource allocations aimed at improving the welfare of all Ugandans and reducing the incidence of poverty to 10% or less by the year 2017. Government envisages that the following tbree conditions are pre-requisite for economic growth to eradicate poverty: * Structural transfornation (agricultural modemization, industrialization, institutional reforms and capacity development). * The poor must participate in economic growth by expanding smallholder agriculture and employment in the industry and services sectors as well as expansion of the rural based non-farm enterprises. * Economic growth must be sustainable. In particular, the modernization of agriculture will need to ensure that renewable natural resources are conserved and not "mined" in the pursuit of short-term growth. Therefore, judicious management of land, forests, wetlands, rangelands, rivers, lakes and the environment is essential for sustaining any gains in poverty eradication that are made possible by pursuing the above two conditions. The primary goal of the joint IDA/IFC CAS is also substantial reduction of poverty in Uganda. The Bank is committed to supporting Uganda's economic transformation and poverty reduction strategy as spelled out in the PEAP. To achieve this objective, work to maintain macroeconomic stability will continue, but the Bank's assistance will increasingly shift to the sector level and to cross-cutfing public sector management issues. One of these cross-cutting issues is environmental management. As stated in the CAS, an overarching consideration of the economic transformation is that development and growth must occur in an environmentally sustainable manner, given that 90 percent of Uganda's population is directly dependent on the country's natural resource base. The activities financed under PAMSU represent a key part of the Government's overall sector wide action plan on environment and are consistent with objectives of the CAS. To help realize the sector-related CAS objectives, PAMSU will provide resources for ensuring conservation of biodiversity and historical heritage assets which wil lead to overall environrnental protection and sustainable development la. Global Operational strategy/Program objective addressed by the project: The Government of Uganda ratified the Convention on Biological Diversity in September 1993. In addition, it has ratified the CITES and the Ramsar Convention on wetlands. The Government's commitmnent to environmental protection and sustainable natural resource conservation and management is laid out in the National Environmental Action Plan (NEAP) approved by Parliament in June 1994, and in the Uganda Biodiversity Country Study. In the NEAP, the Government makes a comnmitment to conserving biodiversity both inside and outside protected areas. The activities proposed under the project are in accordance with the GEF Operational Strategy for Biodiversity. The project is Uganda's major initiative to effectively integrate the conservation of biodiversity into national development It focuses on a range of ecosystems representative of Uganda's biodiversity, including savannals, mountains and forests. It will therefore contribute to the GEF operational progams for Arid and Semi-arid Ecosysterns, Mountain Ecosystems and Forest Ecosystems. As called for by these programs and in support of Article 8 of the CBD the project focuses on in situ conservation in designated areas of biodiversity importance. The project is also consistent with guidance from the COP of the Convention of Biological Diversity as it addresses in situ conservation and sustainable use and includes (i) capacity building; (ii) strengthening the conservation, management, and sustainable use - 7 - of ecosystems and habitats and endemic species; (iii) strengthening the involvement of local and indigenous people; and (iv) integrating social dimensions including those related to poverty. It responds to COP3 guidance by: providing capacity building, especially to local and indigenous communities through innovation mechanisms to involve them in protected area and wildlife management; providing support to activities that relate to other international conventions; creating economic incentives for the conservation of biodiversity; promoting conservation awareness and infornation dissemination. 2. Main sector issues and Government strategy: Government Strategy to Address the Wildlife and Tourism Sector Issues and Constraints Rehabilitation and management of the wildlife and conservation areas, revitalization of the tourism industry, and empowerment of local governments and communities to manage and benefit from the sustainable use of natural resources, are high priorities for the Government of Uganda as demonstrated by a number of actions and policy and institutional reforms it has taken over the past few years. The GOU has established a number of parastatal and mixed public/private sector entities responsible for different facets of the conservation and tourism sectors, many of which were previously the direct responsibility of Government departments. These include the Uganda Wildlife Authority, the Uganda Wildlife Education Centre, the Uganda Tourist Board (UTB), and the Department of Antiquities and Museums. A major objective of transferring these traditionally government functions to semi-autonomous entities was to enhance their sustainability through generation and retention of revenues, mainly from tourism related activities. This is consistent with a growing trend around the world to reduce the dependence of such bodies on increasingly stretched national budgets. They are also intended to provide a synergetic linkage between the public and private sectors, to facilitate the development and growth of the tourism industry. Thus they represent an important model of public/private cooperation for private sector development, also an important element of the Uganda CAS. 3. Sector issues to be addressed by the project and strategic choices: The primary development issue to be addressed by the project is the rehabilitation of the wildlife and cultural resources of Uganda, both from a biological and institutional perspective. The project seeks to build on commitment by Government and other ongoing environment sector reform projects to change attitudes and create an awareness of the economic and ecological significance of wildlife and cultural assets, both for the present and future generations of Ugandans. Capacity Building and Institutional Framework Development There is still a recognized lack of capacity in the wildlife/tourism sector in Uganda which the PAMSU projects aims to address. Under ICB-PAMSU progress has been made towards building the necessary capacity, both institutional and policy related, however, more work needs to be done. The focus of the PAMSU project is more concentrated, Uganda Wildlife Authority and the Ministry of Tourism, Trade and Industry are the two principal organizations through which this project aims to achieve its central objective. The project will continue to provide resources to carry out reform, rehabilitation and effective strategic planring and management This will be achieved through the complementary activities envisaged in the Tourism Policy and Strategic Plan, which is focused on creating a sustainable tourism industry which supports wildlife and cultural assets as well as creative and cost-effective public/private sector partnership solutions. -8 - Sustainability Sustainability of the institutions and'agencies charged with managing and protecting the natural resource base upon which the nature-based tourism is based is a major concernL The project seeks to contribute to this at the macro level by supporting cross-cutting legislation review, increased sector coordination and the promotion of appropriate investment from stakeholders. At the organizational level, cost-effective management and increased cost-sharing partnerships will be sought. Regulation, Legislation and the Custody of Assets This project seeks to support the implementation of a framework of legislation that regulates and monitors the industry development whilst securing the integrity of the assets on which the industry is based. The protection of assets require formal legislation, currently absent, and a regulatory mechanism. This applies from the delineation of PA boundaries to the licensing of tour operators and hotels and training standards within the industry. Security Whilst not an issue to be directly addressed by the project, security is a significant sector issue that the project does address indirectly through the development of cross-cutting legislation review, continued dissemination of the message that the viability of PAs depends on tourism which in turn depends on security and the facilitation of improved coordination and advocacy within, and for the sector. Weakness of the Private Sector The weakness of the private sector with respect to tourism is a legacy of the years of civil unrest The private sector is currently a weak partner, lacking financial resources and professionalism, all of which hinders the viability of the fundamental objective of this project It is expected that the policy development process and subsequent legislation will capture and address prohibitive issues flagged by the private sector. The project will also contribute to the improved institutional arrangements within the private sector, improving their lobby with government and other stakeholders. C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The project has four components, each implemented by agencies supported under the prior ICB-PAMSU. ICB-PAMSU provided funds for capacity building, especially strategic planning and organizational establishment PAMSU provides logistical fumds, equipment, and civil works for sustaining the agencies developed under ICB-PAMSU and to implement cost-effective strategies for achieving objectives identified within those strategic plans. GEF resources are proposed to finance two out of the four components, sustainable wildlife management and environmental conservation education. Component 1: Sustainable Wildlife Management Agency: Uganda Wildlife Authority The ICB-PAMSU project provided funding for establishing the Uganda Wildlife Authority and developing its internal systems, management team and governance structure. Also developed was the Strategic Plan 9 for the agency, along with methodologies for facilitating development of Annual Operating Plans for each of the PAs that would implement the general strategies. PAMSU will provide logistical support, and fund equipment and civil works for UWA to implement elements of that strategic plan. With these fimds UWA will implement the Protected Areas System Plan to rationalize and demarcate the boundaries of the national asset. The project supports the cost-effective management of these assets at the field level through logistical support, equipment and modest targeted civil works for the Parks and Reserves. Civil works will target staff accommodations in order to improve moral, effectiveness and reduce rent as burden on ovemll agency operating costs. At headquarters, the project will provide operating support and equipment for ongoing operations and refurbish the existing headquarters building in order to save rent costs. The GEF share of this component reflects the incremental cost of establishing and administering a protected area system that contributes to protection of global biodiversity but is larger than economically justified in the face of competing land uses and the basic needs of a large and relatively poor rural population. Financial sustainability of this higher central Govemment commitment may be built up over the project period through reform of park entrance and other user fees. The GEF funding is focused on field operations because of the additional level of effort required to maintain a PA system that ensures a comprehensive conservation and sustainable use of a fillly representative set of Uganda's biodiversity. This effort is focused on maintaining infrastructure, supporting surveillance and monitoring, and providing ongoing training in remote but biological important areas typically not benefiting sufficiently from ecotourism. Protected Areas System Plan (PASP) UWA, with support from the EU, and the ICB-PAMSU Project, initiated a process of assessing the current status of the PA system with the aim of rationalizing it. The rationalization process involved revising and re-aligning the PA system to ensure that it (i) protects a high-quality, representative sample of the country's biodiversity heritage and ecosystems, (ii) is manageable in the long term, and (iii) provides a suitable basis for a sustainable tourism sector. The assessment process took about 24 months; it included ecological/biodiversity, economic and social criteria and involved participation of national and local governments and potentially affected communities. The GEF is called upon to support this activity in its implementation phase, to ensure inclusion of areas of globally significant biodiversity. Before the assessment was undertaken, comprehensive knowledge of the coverage of Uganda's protected areas and the nation's biodiversity represented in those areas (i.e.degree of replication, inclusion of all major ecosystem types, etc.) was not known. The PASP includes definition of appropriate boundaries, resolution of disputes outstanding and arising from the process, and identification of areas for pilot community conservation activities. Implementation of the plan is identified as part of an expensive process of "capitalization" of the change towards an improved PA system in Uganda. Because of Uganda's commitments under the Biodiversity Convention, this is a much more comprehensive effort than would be warranted to meet Uganda's more limited objectives of maintaining only the most affordable of the existing PAs. Resettlement During the course of the development of the PASP, substantial community consultation and redrawing of boundaries enabled the new proposed PASP to avoid significant issues of resettlement in 22 of the 25 protected areas. However three potential significant issues remain in Mt. Elgon National Park, Katonga Game Reserve, and Pian Upe Wildlife Reserve. - 10- The World Bank and GOU have already engaged in discussions relating to establishing national protocols and policies that wiU ensure compliance with the Bank's Safeguard policies across all sectors. These discussions involve multi-sector consultations and are being driven by the need to comply with World Bank Safeguard policies in connection with the PRSC Program; this program provides direct budgetary support to Uganda. The urgency of addressing the identified resettlement issues inside protected aras is a further indication of the need for national commitment to these safeguards. The project wil provide funds to engage a team of consultants to review and design appropriate plans to address the specific issues of people resident in the protected areas, or using the protected area resources. This activity wil be limited to the design of options for addressing the specific issues, all options will be fully consistent with the World Bank Safeguard policies. The imnplementation of the plans will not be part of the PAMSU project, but rather, will be financed separately. Component 2: Environmental Conservation Education Agency: Uganda Wildlife Education Centre UWEC's activities will create public awareness and knowledge about Uganda's wildlife as well as broader environmental and conservation issues. The project will provide logistical support, some equipment and construction funds for establishing new programs for visitor education especially school children. UWEC will reach out to school children around Uganda by funding both day time visits for nearby schools and an overnight residency program for children living more distant New exhibits construction and maintenance highlighting Ugandan wildlife will be funded by the project to increase the range of educational messages of interest. Support wiUl also be provided for improved animal holding and veterinary facilities for both the needs of UWEC and the Wildlife Department Under ICB-PAMSU the GEF heavily supported the UWEC activities. Under this component, GEF resources would continue to support conservation education awareness programs. The high proportion of GEF assistance to this component recognizes that, in- the very long term, better public awareness of Uganda's unique national biological heritage and the economic benefits of biodiversity conservation wil build support and wiUingness to pay for conservation of these resources in the face of competing land-use and other development pressures. Component 3: Tourism Framework Agency: Ministry of Tourism. Trade and Industry MTH'ls mission and efforts within the project focus upon developing the tourism sector of the economy to the maximum extent possible, consistent with the protection of environmental and cultural values. The project will provide funding for logistics and equipment that will (1) establish a sustainable tourism framework based on policy development and enabling legislation; (2) provide for licensing and registration of operators within the sector to ensure quality; (3) develop accurate statistics on the sector; and (4) facilitate the improvement in human resource training. In addition to funding these activities the project will provide substantial funds for construction of a building for the MTTI. Under this component, support will also be provided for the Wildlife Department in the MTII. This support includes training, equipment, management support and technical capacity building to enable the Wildlife Department to carry out Uganda's responsibilities under relevant international treaties, and in particular to function effectively as the Management Authority for the Convention on International Trade in Endangered Species (CITES). Component 4: Cultural Heritage Agency: Department ofAntiquities and Museums The project provides moderate operational funds, some equipment and civil works to continue the establishment of UMMA. These funds will finaize the former Department's transition to a sustainable semi-autonomous agency and facilitate expansion of the offerings at the Museum and the identification and development of remote antiquarian sites of significant importance to Uganda's cultural heritage. Project Coordination Agency: Project Coordination Unit (PCU) The Project Coordination Unit which was established under ICB-PAMSU will continue to function as the PCU for the implementation of PAMSU project for two and a half years. The role of the PCU will be to build the capacity of the implementing agencies to take over the responsibility for project managetnent including procurement and reporting. Indicative Bank % of GEF % of Component Sector Costs % ot financing Bank financtng GEF ._________________________ (USSM) Total (USSM) financing (USSM) financlng. Sustainable Wildlife Enviromnental 30.60 80.5 23.90 88.5 4.10 51.3 Management Institutions Enviromnental Conservation Enviromnental 4.00 10.5 0.00 0.0 3.90 48.8 Education Institutions Tourism Framework Environmental 1.70 4.5 1.60 5.9 0.00 0.0 Institutions Cultural Heritage Enviromnental 0.80 2.1 0.70 2.6 0.00 0.0 Institutions Project Coordination Unit Environmental 0.90 2.4 0.80 3.0 0.00 0.0 Institutions I_ I Total ProJect Costs 38.00 100.0 27.00 100.0 8.00 100.0 0.00 0.0 0.00 0.0 0.00 0.0 Total Financing Required 38.00 100.0 27.00 100.0 8.00 100.0 2. Key policy and institutional reforms supported by the project: Since the mid 1990s, the government has been pursuing refonm of the tourism and wildlife sector. PAMSU, building on ICB-PAMSU, is designed to consolidate the reforms that have already taken place and to support the completion of those that are in progress. The key changes are as follows: * A new wildlife policy in November 1995 led to the enactment of the Uganda Wildlife Statute 1996. This formed the Uganda Wildlife Authority, a semi autonomous body from the merger of Uganda National Parks and the Game Departnent. UWA was slow to take advantage of the new anrangements, but has benefited from investments made since January 1999. It now faces challenges of financial sustainability given lower than hoped for growth in its tourism revenue. PAMSU will support reforms seeking cost efficiency and the implementation of its strategic plan developed in 2000. * At the same time a new small Wildlife Department was formed in the Ministry of Tourism, Wildlife and Antiquities vith responsibility for coordinating policy development and implementation and Uganda's adherence to intemational wildlife treaties. Development of the WD under ICB-PAMSU -12 - was constrained by vacancies in the staffing of the WD. These have now been filled and PAMSU supports further WD development * A review of tourism policy is being undertaken with support from the European Commission. PAMSU will support the development and enactment of any necessary enabling legislation. * In 1994 the moribund Entebbe Zoo was transformed into the Uganda Wildlife Education Centre, a trust. UWEC no longer functions as a zoo, but rather as the countries institution for conservation education. It is now an important resource for wildlife and conservation education. PAMSU supports its further development and will establish a franework for raising an endowment to meet its financing gap. * A number of refonns of tourism sector institutions have taken place since 1996. These include the establishment and development of the Uganda Tourist Board as an autonomous agency. ICB-PAMSU supported these, but PAMSU does not because either the reforns have been completed, or support is being provided under the EC financed project. PAMSU does support further reformns building the MTTI's supervisory and regulatory function. The Department of Antiquities and Museums responsible for museums, cultural sites and antiquities, is currently being transformed into the Uganda Museums and Monuments Agency. PAMSU provides modest support for operating costs while the new agency is established. 3. Benefits and target population: The main benefits of the project are two fold: (1) the improved conservation and management of the protected area estate in Uganda; and (2) institutional and policy reform which will contribute to the establishment of an enabling environment for greater investment in the tourism sector. The global benefits of this project lie in the inherent value of ecosystems in Uganda to world-wide biological diversity. There may also be regional benefits to maintaining the integrity of PAs along the borders with Rwanda and the DR Congo because they are contiguous with PAs in those countries. This may be a very valuable collective asset in the future when regional politics allow better cooperation. At a national level this project's development objectives directly target stakeholders involved with the public and private sectors in the conservation, management and growth of wildlife and tourism assets and indirectly much of civil society through education and awareness building about sector issues. These target groups and the benefits that will accrue are: * Central Government agencies involved with regulation, planning and monitoring macro development within the sector. These will benefit through increased capacity and training, greater employment security and satisfaction, and, increased ownership and pride in the sector. * Government agencies involved with the implementation of strategic objectives defined by policy and planning. These will benefit from the project through increased capacity and training, improved employment security and tenns, increased job satisfaction and improved intemally generated revenues allowing greater autonomy. * Local Government officers responsible for sector coordination and policy dissemination and implementation will benefit from participation in capacity building and training programs. -13 - * Communities living in and around protected areas and other natural and cultunal resources will benefit from greater exposure to income generation opportunities, particularly for women's groups who can sell crafts and cultural experiences, education opportunities, improved infrastructure, improved advocacy in local decision making processes (which will be facilitated by the policy and legislation review), increased access to resources from NGOs and CBOs who are development partners encouraged by this project. * The private sector involved with the promotion and sale of natural and cultural assets will benefit from greater commercial opportunities, access to taining and enhanced advocacy through the policy and legislation review process. 4. Insttutional and implementation arrangements: Policy, Institutional and Legislative Frameworkfor Project Implementation PAMSU operates within the legislative framework established by the Uganda Wildlife Statute 1996 and supports the development of enabling legislation following revision of the tourism policy currently in progress. Implementation will be the responsibility of 4 main implementing agencies, one for each component: Uganda Wildlife Authority, Ministry of Tourism, Trade and Industry, Uganda Wildlife Education Centre and Department of Antiquities and Museums. Uganda Wildlife Authority Uganda Wildlife Authority was established in 1996 with the mandate of ensuring the sustainable management of wildlife conservation areas; and establishing policies and procedures to manage and regulate the use of wildlife outside protected areas. UWA is responsible for 10 National Parks, 13 Wildlife Reserves and technical oversight of 5 Community Wildlife Areas. UWA is under the general supervision of the Minister of Tourism, Trade and Industry. The governing body is the Board of Trustees appointed by the Minister in accordance with the Schedule to the Uganda Wildlife Statute. ICB-PAMSU supported board development through preparation of formal TORs which have been adopted by the ministry and a procedures manual to guide Board work. This work resulted in recommendations to reforn the composition of the board to make it more appropriate to its TORs. This required an amendment to the Schedule to the Statute which has been approved by Cabinet. The term of the present Board has expired and it is expected that a new Board will be in place by project commencement ICB-PAMSU supported a number of measures to strengthen the institutional capacity of UWA. These included: the appointment of an internationally recruited Executive Director on a three year contract to oversee UWA's development; the provision of an institutional contractor to develop financial management systems; the development of a training plan and the development of a strategic plan. Under the USAID supported Action Plan for the Environment project, UWA has been developing capacity for protected area systems planning and is currently improving its ability to prepare, implement and monitor annual operations plans at HQ and field level. - 14 - Uganda Wildlife Education Centre The Uganda Wildlife Education Centre is legally established as a Trust with a 9 member Board appointed by the Minister, and registered in Uganda. UWEC has been successful at attracting a number of private sector donors. These donations are generally restricted to the development of new exhibits rather than running costs, which have been met by GOU subvention, self-generated funds (mostly admission fees) and ICB-PAMSU. Until 2000, UWEC had an expatriate Director funded by USAID. He is now acting as a technical advisor. Ministry of Tourism, Trade and Industry Three Departments, all falling under the Commission of Tourism, Wildlife and Antiquities are supported by the project These are: Tourism Development, Registration and Licensing, and Wildlife. Department ofAntiquities and Museums A decision to transform the Department of Antiquities and Museums into a semi-autonomous agency was taken by the Ministry of Public Services in July 2001 (after several years of discussion as to whether to transform it into an autonomous authority by act of Parliament). The GOU has engaged consultants to assist in the transformation, including the preparation of strategic and business plans. DAM will be seen by a representative 8 member advisory board and managed by a chief executive. PCU The Project Coordination Unit (PCU) of the MTTI has been responsible for coordination and oversight of ICB-PAMSU and for the preparation of PAMSU. Its responsibilities include donor liaison, program identification, procurement of goods and services and contract management. Under the PAMSU project, the PCU will continue for two and a half years playing more of a supporting role to the Implementing Agencies which will eventually take full responsibility for procurement and project implementation. The intention is to move from a model where the PCU is responsible for disbursement and procurement of IDA/GEF funds to a support and! capacity building role. The PCU team will provide guidance and support to the implementing agencies, while the agencies will be responsible for preparing the necessary documentation (i.e. terms of reference, requests for no objection, withdrawal applications, annual work plan submissions and any reporting requirements). The new implementation arrangements for PAMSU include establishing separate special accounts for each implementing agency. UWA and UWEC will manage their own special accounts from the inception of the project The DAM and MTT] components will be managed under special accounts for which the PCU will be responsible for the first two and a half years. Once the PCU has been phased out the Ministry will take responsibility for implementation. The project will support TA, equipment and other operating costs for the PCU. Under the TA category, the project will support the positions of Project Coordinator, Procurement Specialist and Project Accountant. Support staff include two secretaries, five drivers, an accounts assistant, and an office attendant. The PCU will assume responsibility for all'MITI vehicles purchased under ICB-PAMSU, including their registration, logbooks, and maintenance. Vehicle operations for MMTI activities will be funded from the activity budgets. -15 - D. Project Rationale 1. Project alternatives considered and reasons for rejection: Alternatives considered during design were as follows: * Not following ICB-PAMSU with a further project. The rationale for this would have been that institutional reform, particularly of UWA has been disappointing, and the potential for developing tourism is proving to be less strong than expected. This approach would have been consistent with IDA strategy for Uganda of moving to budgetary support Reasonsfor rejection: While institutional reform has been slower than might have been hoped, it is appreciated that the three years of ICB-PAMSU are not sufficient to consolidate the gains that have been made and a further period is appropriate. The Government of Uganda remains committed to the development of tourism and is directly addressing security concerns in tourism areas. Not continuing with project support would have left several institutions exposed at an awkward stage of transition and undernined the investments made to date. * Varying funding levels. At the beginning of project design, a number of beneficiary institutions were hoping for a total project budget of around US$80 million. This figure derived in part from an exercise carried out in eariy 1996 that identified all the potential investments that might be made in Uganda's wildlife sector. This was never a concrete proposal. Reasonsfor rejection: Apart from the fact that such a total would have far exceeded available IDA resources, an investment on that scale would have exceeded capacity for implementation and led to a wholly unsustainable level of recurrent cost commitmnents and other operational costs. * Endowment based funding for UWEC. Consideration was given to providing an endowment of approximately $4 million to meet operating costs of UWEC. UWEC has become an effective, well run organization that serves a clear conservation education mandate. It has an established record of implementing programs in a highly cost effective manner. It meets a number of criteria normally used for endowment funding: it is an established organization with effective governance structures and it has support from a number of other donors. Reasonsfor rejection: A number of investments are still needed to improve UWEC's own income generating potential and priority was given to these. No other body has yet made a commitment to provide counterpart funding for an endowment. Nevertheless, the idea still merits attention. PAMSU will provide for a study to establish the legal and institutional framework for an endowment in anticipation that one will be established at a later date. * Endowment funding for UWA. Earlier hopes that UWA would be able to generate sufficient revenue to meet the gap between operational requirements and GOU subventions were probably never realistic but it is now quite clear that there will be a substantial gap for the foreseeable future. Given the importance of Uganda's biodiversity this suggests an endowment would be appropriate. Reasonsfor rejection: Several strong reasons ruled this alternative out. UWA has had a checkered history since fonnation. Until, as an absolute minimum, the new Board of Trustees is in place providing effective governance and the succession of the interim Executive Director has taken place satisfactorily, UWA cannot be said to be sufficiently stable to support in this manner. UWA is not yet sufficiently cost conscious and too great a proportion of operating costs is absorbed by headquarters. A number of strategic questions involving outsourcing still needs to be resolved. There is a substantial risk that an endowment at this stage will simply relieve the pressure to make the necessary reforms. - 16 - * Direct support to protected areas. Consideration was given to providing support more directly to a number of key protected areas. This model has been used in the Murchison Falls National Park. This would circumvent the high proportion of costs absorbed by HQ. Reasons for rejection: There is a substantial number of operational policies that need to be resolved at HQ level. The mismatch between biodiversity importance and revenue generating potential of the various PAs suggests that a national approach is needed. All PAs need HQ support for planning and monitoring functions. UWA is strongly antipathetic to this approach. * Additional support for tourism within UWA. Given the need for UWA to expand its revenue base and the relative weakness of its efforts to develop and diversify its tourism base consideration was given to providing technical assistance to the relatively new tourism department and to providing support for promotion. Reasons for rejection: Promotion of Uganda's tourism is the responsibility of the Uganda Tourism Board which is benefiting from EC funding. PAMSU was designed to avoid duplication in this regard. There is a number of strategic issues regarding the way tourism is managed in UWA including the extent to which it is appropriate to develop capacity in house as opposed to outsourcing it. Until these are resolved, technical assistance (beyond supporting development of strategy) is inappropriate. 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). L atest Supervision Sector Issue Project (PSR) Ratings (Bank-financed projects only) ImplementbUon Development Bank-financed Progress (JP) Objective (Do) Wildlife and Tourism Institutional Capacity Building S S for Protected Area Management and Sustainable Use _ Other development agencies European Union - Tourism and Wildlife Uganda Sustainable Tourism Development Project _ IP/DO Ratings: HS (Highly Satisfactbry), S (Satisfactory), U (Unsatisfactory). HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: Lessons from ICB-PAMSU ICB-PAMSU was intended to provide sufficient institutional capacity for implementing PAMSU. Experience with capacity building under ICB-PAMSU suggests implementing agencies have not yet developed the capacity necessary to effectively absorb a substantial investment program. This was in part a result of the relatively short timefrarile allowed. Although PAMSU makes limited new initiatives in capacity building, it anticipates that the implementing organizations will continue to put effort into developing capacity and adapting their plans to current circumstances. Much of the 'strategic' planning undertaken in ICB-PAMSU has taken the implementing organizations further from, rather than closer to financial sustainability. In part, this is a consequence of lhe circumstances under which the plans were prepared - as conditionalities for a follow-on investment project. The plans prepared have focused on operational efficiency more than on strategic issues. Genuinely - 17 - strategic decisions have not resulted from the participatory processes used to prepare the plans. As an example, one of the more successful inputs to UWA was the contracting out of the financial management fimction. This was decided on as part of ICB-PAMSU design. This kind of decision needs to be taken at the most senior level in the face of extemal pressure. PAMSU places limited emphasis on the preparation of further strategic plans - the principle exception being the 'business plan' proposed for UWA. Careful consideration will be given to the process used to prepare this plan to avoid the pitfalls described. PAMSU places emphasis on translating plans into operations, improving cost effectiveness, and monitoring implementation. Lessons from Bank projects in Kenya's tourism and wildlife sector The experience with comparable Bank supported wildlife sector reforms in Kenya was drawn upon in the formulation of ICB-PAMSU and is.still relevant The sector received assistance from the Bank under the Wildlife and Tourism Project (1976-1986) and the "Protected Areas and Wildlife Service" (PAWS) Project (1992-2000). The Implementation Completion Report and Project Audit attributed the failure of the earlier project primarily to an inadequate policy framework, institutional failures and a lack of Government commitment to the project's objectives, as well as to the Bank's failure to hold firm on the agreed conditionalities. By contrast, the success of the PAWS project, which has had a major positive impact in reducing commercial poaching and improving the infrastructure and management of Kenya's PAs, demonstrates the benefits of ensuring that these issues are addressed up front At the same time, the slow progress of the parastatal Kenya Wildlife Service in moving toward a business-like organizational culture and financial sustainability holds important lessons for the Uganda Wildlife Authority which started from a similar situation and is aiming for similar objectives. PAWS showed that a major investment in infrastructure does place substantial demands on scarce management time and suggested that relatively modest investments are more appropriate. Other lessons from Bank tourism and wildlife projects Other lessons from Bank-assisted projects and other experiences around the world include the importance of building support for conservation at a political level and among communities adjacent to PAs, and the need to encourage collaboration among institutions rather than building parallel capacity in each. 4. Indications of borrower and recipient commitment and ownership: The Government of Uganda is committed to sustainable environmental management and the conservation of biodiversity as expressed in the PEAP. Preparation for the PAMSU project began in 1995 through Bank and GOU collaboration with funding provided through a PPF and by the GEF. The outcome of that preparation was a proposal for a phased approach, the first phase being the ICB-PAMSU project, and the next phase the PAMSU project During the implementation of the ICB-PAMSU project, GOU made available all the counterpart fumds needed for the project implementation, including partial payment of the salaries of UWA. The GOU has also allocated a special budget for security in the Protected Areas during this financial year. 5. Value added of Bank and Global support in this project: The World Bank has provided leadership and support for activities in the wildlife/tourism sector since the 1990's. The PAMSU project is a follow-on project from the ICB-PAMSU project which established the institutional capacity and the policy framework for more effective protected area management and nature-based and cultural tourism. Continued Bank support for the sector, through the PAMSU project, will consolidate the achievements made so far, and support the policy and institutional reforms that have - 18 - been established over the past three years. Given the reduced state of the country's wildlife resources and the persistent problems of insecurity, growth in tourism, and its ability to support conservation, is likely to be slow. The conservation and improved management of Uganda's biological resources will only be possible if the Bank and other donors provide the necessary support to protect the resource base in the short term and to gradually restore and improve it in the longer term. As one the GEF implementing agencies, the Bank can also access the GEF resources to support the conservation and management of globally significant biodiversity. E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): O Cost benefit NPV=US$ million; ERR = % (see Annex 4) O Cost effectiveness * Incremental Cost O Other (specify) Incremental Expenditures. The total expenditure under the Baseline Scenario is estimated to be US$22.0 million while the total expenditure under the GEF Alternative is estimated to be US$37.9 million. The incremental expenditures under the GEF Alternative are therefore US$15.9 million. The majority of expenditures (76%) is attributable to decentralized activities of UWA, while 24% is attributable to enhanced conservation education efforts. Incremental Costs. The incremental expenditures of US$15.9 million are partially offset by an incremental domestic benefit of US$7.9 million. This benefit would not have been realized in the Baseline Scenario, and is primarily associated with sustainable direct uses, distributional benefits, protection of ecological functions, and preservation of domestically significant option values. The net result is that the incremental cost of the GEF Alternative is US$8.0 million, for which GEF assistance is requested. The allocation of these amounts, and the resultant financing structure for the GEF Alternative as a whole, is summarized in Table Al.2. Cost-effectiveness. While no complete monetization of the global benefits of a GEF intervention has been completed, it is possible to provide some indication of its cost-effectiveness of such a GEF intervention. It is estimated that the intervention translates to an annualized cost of US$144/km2/yr of effective protection; this reflects the basic hypothesis that improved decentralized measures will ensure protection of a wider range of species and habitats (approx. 1.3 million ha phased in over 30 years) than otherwise would be the case. The literature indicates that typical conservation expenditures around the world reflect international interventions corresponding to approximately US$20/km2/yr to US$2,000/kmn2/yr of protection. In the case of Uganda, therefore, the substantial investmnents in the Baseline Scenario, which are targeted to meet domestic development priorities, provide an opportunity for the international community to obtain high efficiency for its conservation expenditures. 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = % (see Annex 4) In recent years, significant improvements in public sector accounting and reporting have been achieved. Most notably, the annual public accounts of Government have been produced within the statutory period of four months after the end of the financial year for each of the past four years. Nevertheless, recent assessments undertaken by Government jointly with donors, such as the Country Financial Accountability Assessment (CFAA) with IDA, have identified a number of areas that need to be strengthened to enhance financial management. - 19 - The Country Financial Accountability Assessment carried out by IDA in collaboration with Government, indicates that inadequate financial accounting and auditing systems both at the center and in the districts pose a major fiduciary risk. While Uganda has a relatively good budgeting system, accounting for public expenditure using the present manual system is weak, largely because of disregard for timely and regular recording of transactions, side-stepping of controls, and lack of financial discipline. Similarly, findings of audit reports are not regularly followed up, and public accounts contain a number of material non-reconciled balances. There is an acute shortage of qualified accountants in the public sector because the current pay levels are only about 20-30 percent of those in the private sector. Reforms in financial management are urgent and satisfactory progress in their implementation needs to precede the approval of PRSC II that will increasingly involve district and sub-county governments. With the support of a number of donor assisted initiatives, such as the Second Economic and Financial Management Project (EFMP II) and the Local Government Development Project (LGDP) supported by IDA, and the Financial Accountability and Decentralization Support Project funded by DEID, Government is seeking to rapidly enhance the financial accountability framework in pursuit of the following objectives: * mitigate fiduciary risk in public expenditure management for both taxpayers and donors; * achieve economy, efficiency and effectiveness in the use of public funds; * enhance transparency and accountability; and * establish an appropriate enabling environment for private sector development and regulation. As an initial measure, the Ministry of Finance, Planning and Economic Development has expanded the mandate of the coordinating mechanism in place for guiding and monitoring all reform programs in financial management throughout Government using the existing structures under EFMP II. Fiscal Impact: 3. Technical: N/A 4. Institutional: 4.1 Executing agencies: Ministry of Tourism, Trade and Industry, Uganda Wildlife Authority, Uganda Wildlife Education Centre, Department of Antiquities and Museums. 4.2 Project management: The Project Coordination Unit (PCU) of the MTTI has been responsible for coordination and oversight of ICB-PAMSU and for the preparation of PAMSU. Its responsibilities include donor liaison, program identification, procurement of goods and services and contract management Under the PAMSU project, the PCU will continue for two and a half years playing more a supporting role to the Implementing Agencies which will eventually take full responsibility for procurement and project implementation. - 20 - The intention is to move from a model where the PCU is responsible for disbursement and procurement of IDA/GEF funds to a support and capacity building role. The PCU team will provide guidance and support to the implementing agencies, while the agencies will be responsible for preparing the necessary documentation (i.e. terms of reference, requests for no objection, withdrawal applications, annual work plan submissions and any M&E reporting requirements). The new implementation arrangements for PAMSU include establishing separate special accounts for each implementing agency. UWA and UWEC will manage their own special accounts from the inception of the project The DAM and MTTT components will be managed under special accounts for which the PCU will be responsible for the first two and a half.years. Once the PCU has been phased out the Ministry will take responsibility for implementation. The project will support TA, equipment and other operating costs for the PCU. Under the TA category, the project will support the positions of Project Coordinator, Procurement Specialist and Project Accountant. Support staff will include two secretaries, five drivers, an accounts assistant, and an office attendant. The PCU will assume responsibility forlall MTTI vehicles purchased under ICB-PAMSU, including their registration, logbooks, and maintenance. Vehicle operations for MTTI activities will be funded from the activity budgets. 4.3 Procurement issues: Because of the limited procurement capacity in the implementing agencies, for the first one and a half years of the project, the procurement officer in the PCU for the closed ICB-PAMSU will be contracted under PAMSU to (a) guide and supervise the implementing agencies in all aspects of procurement implementation, (b) train relevant staff of the agencies in Bank procurement procedures, (c) assist them in the timely production of agreed procurement reports, and (d) set up good procurement records and monitoring systems. The Bank will, as part of its project supervision, assess periodically the progress of the capacity building in the implementing agencies and will share its findings and recommendations with the management of the agencies. UWA has no in-house capacity to effectively supervise the works activities. To assist UWA in the supervision, coordination and monitoring of the works activities (i.e. demarcation of park boundaries, construction of rangers' houses, outposts in the parks, office blocks, and rehabilitation of roads in the parks), UWA will deploy qualified personnel for a specified period. 4.4 Financial management issues: Financial Management and Auditing. The Finance departments of the implementing agencies will be responsible for ensuring that financial management and reporting procedures for the project are acceptable to the World Bank and Govemment of Uganda. T'he financial management systems in the PCU, UWA and UWEC support management in their deployment of limited resources with the purpose of ensuring economy, efficiency and effectiveness in the delivery of outputs required to achieve desired outcomes. Specifically, the systems are capable of producing timely, understandable, relevant and reliable financial information that enables management to plan, implement, monitor and appraise the project's'overall progress towards the achievement of its objectives. Details of the current financial management arrangements are included in Appendix 5 to the PAD. These indicate that the financial management arrangements in the implementing agencies satisfy the Bank's minimum requirements under OP/BP1O.02. The arrangements for UWA and the PCU will enable them to adopt the report-based disbursement method, while UWEC have to implement improvements in their - 21 - financial management system to enable them to provide, with reasonable assurance, accurate and timely information on the status of the Project as required by the IDA for report-based disbursements. The arrangements currently in place in respect of UWEC do not yet fully satisfy the requirements for FMR-based disbursement, as outlined in the World Bank's guidelines on Financial Monitoring Reports. The actions required to be undertaken by the project, the completion of which will allow its implementing agencies to be strengthened or to qualify for the IDA credit to be disbursed on the basis of FMRs, are set out in Annex 5 and in the Financial Management Assessment Report. 5. Environmental: Environmental Category: C (Not Required) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. N/A 5.2 What are the main features of the EMP and are they adequate? N/A 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: N/A N/A 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? N/A 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? N/A 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. The social development outcomes of the project relate to the conservation and environmental services which will be secured for the populations living near the protected areas. The vast majority of Uganda's population is rural and therefore dependent on natural resources for their livelihoods. The conservation objective of the project will provide benefits to the local populations in two ways: (i) secure the environmental services provided by intact and well functioning ecosystems, e.g. clean and dependable water, medicinal plants, etc; and (ii) conservation and rehabilitation of the protected areas system and the nature-based/cultural heritage tourism industry will provide local communities opportunities for involvement in small scale tourism operations when the industry recovers. Another important social development outcome of the project is awareness raising. Through continued support to the UWEC, the project will promote better appreciation and understanding of the importance of strong environmental management and conservation. The implementation of the Protected Areas System Plan will also have a positive impact on the communities living in and around protected areas. The objective of the rationalization of the protected areas system are two-fold: to ensure that a representative sample of each of the country unique ecosystems are gazetted and conserved; reduce the conflicts between the parks authority and local communities over - 22 - boundaries and resource use. Through the implementation of the Protected Areas System Plan, the project aims to establish the Parliamentary approved and agreed boundaries for the protected areas estate. This process will clearly mark all protected areas boundaries as well as the redesignation of certain highly encroached areas in protected areas to allow for legitimate resource utilization by the population living in the areas. 6.2 Participatory Approach: How are key stakeholders participating in the project? The project preparation included activities aimed at rationalizing the protected areas estate in Uganda. The design for the new system was developed through a highly participatory process involving all the stakeholders from the national, district and local level. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? The project is working directly to support one of Uganda's main conservation NGO, the Uganda Wildlife Education Centre (UWEC). Other national and international NGO's are also partners in the conservation effort. For example, through regional, and park or species specific programs, Uganda Wildlife Authority is collaborating with NGO's such as the International Gorilla Conservation Program in Bwindi and Mgahinga National Parks, IUCN and WWF in the Mt. Elgon and Rwenzori National Parks, and AWF for development of training plans. The project also supports a collaborative management component for working directly with communities to include them in the decision making process for park management. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? Direct support is being provided to:UWEC as the main NGO working on conservation education. A department for community conservation has been established in UWA and the pilot programs for collaborative management will be funded under the project. 6.5 How will the project monitor performance in terms of social development outcomes? Social development outcomes will be monitored as a regular part of the project supervision process. 7. Safeguard Policies: 7.1 Do any of the following safeguard policies apply to the proiect? Policy Applicability Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) 0 Yes 0 No Natural Habitats (OP 4.04, BP 4.04, GP 4.04) 0 Yes 0 No Forestry (OP 4.36, GP 4.36) 0 Yes * No Pest Management (OP 4.09) 0 Yes * No Cultural Property (OPN 11.03). 0 Yes 0 No Indigenous Peoples (OD 4.20) 0 Yes * No Involuntary Resettlement (OP/BP 4.12) 0 Yes * No Safety of Dams (OP 4.37, BP 4.37) 0 Yes 0 No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) 0 Yes 0 No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* 0 Yes 0 No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. N/A -23 - F. Sustainability and Risks 1. Sustainability: The project is designed to ensure sustainability of the institutions developed under ICB-PAMSU by providing modest operating finances to continue operations and to implement plans designed. The result of this strategy will be a more cost-effective and sustainable management of Uganda's wildlife resource; one able to prioritize management of the existing PA system, operate that system efficiently and take full advantage of any tourism growth that might emerge from promotion of Uganda's wildlife heritage. The project promotes sustainability in three ways: 1. Designed to ensure institutional sustainability: The GOU has established UWA, UWEC, and soon UMMA as semi-autonomous agencies in order to reduce their dependence on government subventions and thereby promote their financial sustainabiity. ICB-PAMSU provided funding for the initial steps required by these organizations: institutional "culture" change, strategic and business planning, and development of appropriate management systems and staff with the skills and incentives to inplement them. PAMSU, by assisting these institutions to institutionalize and solidify gains made under the previous project will contribute directly to their sustainability. 2. Designed to move towards financial sustainability: A new macro-economic operating environment has emerged since the design, in 1996, of PAMSU; tourism return has been and is likely to be slower than anticipated while, though the government's overall economic condition has improved, its financial allocations are attuned to protection of national boundaries and economic growth. The insfitutions included within PAMSU must realign their strategic objectives, focusing upon cost-effective management of resources and sustainable investment strategies. The project is designed to encourage continued development of tourism opportunities, policy and infrastrucure as a necessary condition for tourism-supported growth. At the same time it recognizes that this process may be long and the period prior to substantial tourist return may be one of limited resources. The UWA will be encouraged, though with minimal and focused funding, to develop the most cost effective strategies for sustainable fulfilling its role as the manager of the wildlife resource. Key to this effort is a yearly monitoring mission tasked to support the management to achieve its objectives in developing and implementing cost effective strategies. 3. Designed to support environmental sustainab3lity: The future of PAs and wildlife resources and of the tourism industry are inter-dependent, as the PAs and wildlife provide the main basis for tourism. As the guardian of Uganda's natural and wildlife heritage, UWA must sustain the wildlife resources as a necessary condition for any recovery of tourism. Ensuring effective management of these resources is essential to achieve both conservation and economic growth objectives. -The project will also contribute to long-term sustainability by supporting an ongoing process of assessment and rationalization of the existing PA system, aimed at increasing operational efficiency and reducing costs. Under ICB-PAMSU, the management of some adjacent Parks and Reserves has been consolidated into Zone management systems for both ecological and cost-saving reasons. PAMSU funding is necessary to continue the initiative and to consider how existing wildlife resources might most effectively be managed. - 24 - 2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1): Risk Risk Rating Rlsk Mitigation Measure From Outputs to Objective Security. Publicized events (the Bwindi S The GOU has allocated funds for improving massacre, the Ebola outbreak, and most security in the National Parks. However, all recently the shootings in Murchison Falls publicized incursions whether rebuked or not NP) have negatively impacted tourist negatively irnpact the sector. With respect to travel to Uganda. The USA and UK tourism potential, this risk rerains. govermments recently advised citizens not to travel to the Country. For tourists to The project focuses on cost-effective return, violence and terrorist events must sustainability of the institutions rather than decrease in frequency and severity and revenue generation as a means of reducing the stay low for a period of time. risk of security incidents to the viability of the institutions. Competition. There is a risk that, S The risk limits likely tourist revenue. The comparatively, Uganda will never become project addresses this in two ways: (1) by an attractive tourist destination. The developing accurate statistics it will inform wildlife and the infrastructure present in decision makers (politicians, bureaucrats, and the 50s and 60s when it was among the private sector) about realistic prospects for premier destinations of Africa will take tourist based economic development; and (2) by decades to return. During that time focusing on cost effectiveness it intends to market leaders - Kenya and South Africa - develop management strategies that can work are likely to solidify their positions, and with a limited financial resource. new entrants - eg. Zambia, Zimbabwe, and Namibia - are likely to increase competition. Weak private sector. There is a risk that N The project includes a component of provider relatively weak private sector service registration and licensing. There is evidence providers will be unable to provide that normal market forces are at work and appropriate services and that these will service quality is improving within niches of the discourage return of those who do come. market with adequate return. From Components to Outputs Institutional strength developed under S The project is designed to provide sufficient ICB-PAMSU remains fragile. coverage of operating costs and ongoing activity funding to allow developments under ICB-PAMSU to be institutionalized. The external review and monitoring mission proposed for UWA should help protect and build on gains. Institutional structure and cooperation. M Institutional structure and cooperation: Roles Roles and duties of the institutions within and duties of the institutions within the sector the sector have not been entirely have not been entirely rationalized. rationalized. ICB-PAMSU suffered from ICB-PAMSU suffered from a lack of - 25 - lack of coordination and attempts by coordination and attempts by institutions to institutions to expand their role. expand their role. Duplication of roles increases Duplication of roles increases costs and costs and hinders sustainability hinders sustainability. Budgetary constraints of GOU. The GOU M PAMSU will focus upon improving may be unable to meet its funding cost-effectiveness in all agencies as means to obligations within PAMSU causing costs operate within very limited budgets. to rise and the project to conclude early. Limited Infiastructure Development may S The project funds limited infrastructure prolong decline in wildlife resources development in line with the goal of cost-effectiveness. Critical levels necessary for making Uganda an attractive tourist destination is unknown, but the project's limited contribution is clearly insufficient UWA specific risks: The UWA S The business planning exercise will address bureaucracy has grown in anticipation of these issues. the larger PAMSU and with a focus upon revenue growth. In retrospect these were inappropriate strategies. The BoT of UWA remains large, A new Board Structure has been approved and a The BoT of UWA remains large, new Board will be appointed before project politically motivated, and problematic; commencement capturing significant time and energy of the ED and failing to provide an appropriate management framework for UWA management staff. Overall Risk Rating Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) 3. Possible Controversial Aspects: N/A G. Main Credit/Grant Conditions 1. Effectiveness Condition (a) The Subsidiary Agreement has been executed on behalf of the Borrower and UWA; (b) All conditions precedent to the effectiveness of the GEF Trust Fund Grant Agreement have been fulfilled; (c) The Borrower has established an adequate financial management and accounting system for the Project in form and substance satisfactory to the Association; (d) The Borrower has employed the independent auditors; (e) The Borrower has furnished to the Association the PIP including a financial management plan, in form and substance satisfactory to the Association; - 26 - (f) The Borrower has established a management infornation system, in form and substance satisfactory to the Association; (g) The Borrower and UWA have each appointed, for Project implementation, the Financial Manager and Accountant; (h) The Borrower has opened the Project Account and has deposited therein the Initial Deposit; (i) The Borrower and UWA have each established the procurement unit and appointed thereto staff having qualifications and experience satisfactory to the Association; and (1) The Borrower has renewed contracts of the Project Coordination Unit staff of the Institutional Capacity Building for Protected Areas Management and Sustainable Use Project, under terms and conditions satisfactory to the Association. 2. Other [classify according to covenant types used in the Legal Agreements.] H. Readiness for Implementation 0 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. 1 1. b) Not applicable. Ol 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. 1 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. O 4. The following items are lacking and are discussed under loan conditions (Section G): 1. Compliance with Bank Policies 1 1. This project complies with all applicable Bank policies. C1 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. Nathalie Weier Jo o Richard G. Scobe udy M. O'Connor Team Leader Sector Manager Country Director -27 - Annex 1: Project Design Summary UGANDA: Protected Areas Management and Sustainable Use Project Key Perfornance Data Collection Strategy Hierarchy of Objectlves Indicators Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) Reducing poverty and Tourism investment and Foreign investment statistics Security in the region will generating wealth, foreign tourism related revenue improve and awareness and earnings, employment, and increased appreciation of the natural public awareness within the assets will increase international community of Visitation to protected areas Entrance statistics the wildlife and cultural and culturl sites increased attributes of Uganda GEF Operational Program: Arid and Semi-arid Poaching of key species is Monitoring reports from Government maintains Ecosystems, Mountain reduced Uganda Wildlife Authority commitment to principle of Ecosystems, and Forest Biodiversity Convention Ecosystems Promoting in-situ Population numbers of key Aerial surveys conservation by relying on mammal species in 3 most better management and important national parks involvement of communities increases Project Development Outcome I Impact Project reports: (from Objective to Goal) Objective: Indicators: Sustainable and 1. Revenue generation at 1. Financial records Uganda will be unable to cost-effective management UWA increases to UShs close the lead held by of Uganda's wildlife and 6.Obn by the 5th year existing African tourists culturl resources destinations and face 2. Poaching of key species 2. Annual Review reports, competition from emerging in patrol area reduced from field visit tourist markets initial baseline 3. Population number of 3. Patrol pattems w/ aerial key mammal species in QE, survey MF, KV conservation areas increase by 5% within 5 years 4. Community satisfied 4. Assess communities in with UWA response to target areas (QE, KNP) problem animals 5. Approx 120,000 5. Gate records visitors/year including 80,000 students to UWEC - 28 - 6. MoE adopts Wildlife 6. Review of curriculum Conservation Education (WCE) into primary school education in Uganda by EOP 7. 40% of primary schools 7. MoE, UWEC records receive WCE material by EOP 8. Accurate and reliable 8. Review Dbase; USTDP information (statistics, (EU) data market analysis, etc) about Uganda's tourist potential is established by EOP Output from each Output Indicators: Project reports: (from Outputs to Objective) Component: Uganda Wildlife 1. All NP and WR have 1. Site visits, PA records Insecurity events must Authirity: Maintain boundaries marked and all decrease in frequency and cost-effective and efficient. genuine land titles identified severity wildlife mgt. inside & are compensated by EOP outside Protected Areas 2. CM piloted in at least 2 2. Annual Review reports CWAs; 10 resource in relevant year programs; and 3 wildlife utilization schemes running by EOP 3. Management plans 3. Annual Review Reports developed and under implementation for NP and WR by BoP + 3yrs 4. AOP developed and 4. Annual Review Reports implemented every year within each PA 5. Cost-structure criteria 5. Annual Review Reports of PA completed and accepted by YR1; evidence of PA management according to criteria by EO .YR2' 6. At least 1 conservation 6. Annual Review Reports supported project each for another 5 PA initiated by -29 - end of 5 years 7. Tourism concession 7. Financial system revenue improves 50% over baseline 2000/2001 then to grow 10% yearly 8. Tourism# and revenue 8. Financial reports of Ugandan nationals increases over 2000/2001 baseline 9. Gate revenue increases 9. Financial reports 50% over 2000/2001 stats by EO lyr and increases 5% (real tems) per year after that 10. Revenue sharing 10. Financial reports scheme implemented in each revenue generating PA by 2 nd yr 11. By end of 2nd year no 11. Review staff files and staff retained with three HR reports consecutive warnings of non-performance. 12. A annual review of the 12. Annual review report. contribution of operational initiatives to UWA strategic objectives. 13, New cost-effective 13. Annual Review report management criteria/ strategies (eg. Hdqtr/Field cost ratio; RoA, Cost Margins, etc.) devised and adopted over 5 years Uganda Wildlife 1. Wildlife Conservation 1. Review of Curriculum, Education Centre: Public Education (WCE) materials and MoE records awareness and knowledge in curriculum and materials environmental and developed with MoE by Yr conservation issues created. 2 and integrated into Primary education 2. School child residential 2. Receipts and records of education program program - 30 - completed and operational by Yr 3 3. Three major exhibits 3. Observation (Rhino, Kidepo and Lake Mburo eco zone) and 5 minor exhibits completed by EO Yr 4 4. Second Chimpanzee 4. Observation rehabilitation site established and populated 5. Funding from new 5. UWEC financials sources increases over 5 years 6. Partnerships with 6. Review ofjoint agencies (NEMA) and programs donor program established UMinistry of Tourism 1. Tourism Policy adopted 1. Document review Insecurity events must Trade and Industry: and enabling legislation decrease in frequency and ])evelop the framework for enacted by EO 3yr severity. ihe tourism sector of the oconomy to the maximum 2. Reliable and valid 2. EU advisor and MoF Reasonable improvements extent possible, consistent statistics on tourism in private sector with the protection of onvironmental and cultural 3. Licensing and 3. MTTI records review Walues registration of all major and UTA service providers by Yr 3 4. Higher quality graduates 4. Employer review from tourism training institutes 5. Compilation of statistics 5. Records of attendance and obligatory presentation of those to treaty conference ]Department of Antiquities 1. At least two important 1. Site inspection ,md Museums: The antiquarian sites outside of Cultural heritage of Uganda Kampala developed for preserved visitation 2. Continued growth of 2. Museum Records visitation over baseline establish post-renovation - 31 - Project Coordination 1. Decrease in # of action 1. TM supervision reports Unit: Effective and items returned from TM due proactive management of to inadequacy project 2. All monitoring missions 2. TM supervision reports adequately prepared; Quarterly reports to TM. within 2 weeks of quarter close 3. # of complaints from 3. Interviews and TM project IA's decreases over supervision 5 years Project Components I Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) Uganda Wildlife Authority US$30.60 PAS Plan approved by Parliament within 2 years Implementation of the Protected Area Systems Plan Cost Effective management of the park/assets within the PA Effective management of UWA Monitoring of project impact and implementation Uganda Wildlife US$4.00 Education Centre Education programs developed and delivered Animals maintained and rehabilitated Effective Management of UWEC Ministry of Tourism, US$1.70 USTDP (EU) implemented Trade and Industry effectively Establish and maintain of an operational tourism - 32 - database Regulate tourist industry service providers Ratify tourism policy into legislation and disseminate Standardize and improve tourism training (eg. private sector training institutes; HTTI) Comply with Uganda's obligation under CITES, Lusaka, CMS Department of Antiquities US$0.80 and Museums Identify and sustainably develop antiquarian sites outside of Kampala Institutionalize DAM as a sustainable independent Agency Project Coordination Unit US$0.90 Review and improve new terms of reference, rationalizing and clarify staff roles Clarify roles between PCU and IA's Prepare quarterly and unique reports - 33 - Annex 2: Detailed Project Description UGANDA Protected Areas Management and Sustainable Use Project By Component: Project Component I - US$30.60 million GEF (US$4.1 million) Component 1: Sustainable Wildlife Management Agency: Uganda Wildlife Authority The ICB-PAMSU project provided funding for establishing the Uganda Wildlife Authority and developing its internal systems, management team and governance structure. Also developed was the Strategic Plan for the agency, along with methodologies for facilitating development of Annual Operating Plans for each of the PAs that would implement the general strategies. PAMSU will provide logistical support, and fund equipment, vehicles, training, and civil works for UWA to implement elements of that strategic plan. The main focus of this component is support to field based operations for better management and conservation of the PA systemL The activities financed under this component include the following: implementation of the Protected Areas System Plan including boundary demarcation and community sensitization; community conservation and co-management; development and implementation of park management plans; park patrols, monitoring and training; park infrastructure; road maintenance and rehabilitation; problem animal control program; renovation of Head Quarters offices and overhead; project management and monitoring. Civil works will target staff accommodations in order to improve moral, effectiveness and reduce rent as burden on overall agency operating costs. At headquarters, the project will provide operating support and equipment for ongoing operations and refurbish the existing headquarters building in order to save rent costs. GEF support is sought to finance the following aspects of this component: Field operations - Park Patrols and General Management Plans: At the field level the project will provide support for increased patrols and monitoring of the protected areas, and the development and implementation of park management plans and annual operations plans for each protected area. This will be achieved through the provision of training, short and long-term TA, operational funds for the implementation of park management plans including logistical support, urgently needed vehicles, equipment and incremental operating costs. UWA Community Management Program: UWA's community conservation program will focus on "collaborative management" of PAs and collaboration with district and local government and communities on wildlife management outside PAs. Community involvement in the protection and management of PAs is on going and will be expanded as part of the UWA mandate. Support for the community conservation directorate and program will include funds for technical assistance and program support to enable UWA to develop and implement programs for. (i) collaborative management of PAs (involving adjacent communities) and (ii) addressing wildlife management issues outside PAs, including aspects such as 'problem animals control', and the establishment of community wildlife management areas, and encouraging and assisting local communities to make use of wildlife resources, (including medicinal plants) in a sustainable way. For the latter, UWA will collaborate with and assist district and local governments and community-based organizations, which have been given extensive authority and responsibilities under the new wildlife act - 34 - ProtectedAreas System Plan (PASP): UWA, with support from the EU, and the ICB-PAMSU Project, initiated a process of assessing the current status of the PA system with the aim of rationalizing it The rationalization process involved revising and re-aligning the PA system to ensure that it (i) protects a high-quality, representative sample of the country's biodiversity heritage and ecosystems, (ii) is manageable in the long term, and (iii) provides a suitable basis for a sustainable tourism sector. The assessment process took about 24 months; it included ecologicallbiodiversity, economic and social criteria and involved participation of national and local governments and potentially affected communities. The objective of the PASP is to rationalize and demarcate the boundaries of the protected areas estate in Uganda. The PASP was developed through a consultative process which involved a detailed negotiation with local communities to agree on PA changes. Negotiations were effected through the 'Local Council' system, beginning at village level, up through sub-counties to Districts. Many workshops were held to facilitate the involvement of all stakeholders. The PASP includes no new acquisition of land or extensions of any of the PAs. All significant changes to boundaries represent excision of heavily encroached areas in the PAs. Where it was agreed that a settled area should be excised entirely from a PA, agreements were reached with local councils on new boundaries. Boundary agreements were also reached in instances where long-established fishing villages within protected areas (e.g. Queen Elizabeth NP) were to be demarcated as 'wildlife sanctuaries', a PA category under UWA which permitted settlement, but with restrictions on developments harmful to wildlife. Implementation of the plan will include demarcation of all the PA boundaries. To minimize the costs of establishing and maintaining the boundaries special efforts were made to ensure that boundaries followed natural features where possible (e.g. rivers, roads, hilltops etc). Where boundaries are unclear or contentious, concrete pillars will be installed every 150 meters. Another option for marking boundaries is to plant trees along the boundaries. GEF support will be used specifically to carry out the final review and demarcation of the boundaries, including the surveying and installment of boundary markers. Follow-up consultations for newly designated areas (i.e. wildlife sanctuaries) will also be undertaken to establish the modalities of the new structure and relationship to the parks and surrounding communities. A program of sensitization and outreach for the affected communities will be combined with the demarcation exercise. The aim is to increase awareness about the parks and specifically the boundaries especially in disputed areas. The GEF share of this component reflects the incremental cost of establishing and administering a protected area system that contributes to protection of global biodiversity but is larger than economically justified in the face of competing land uses and the basic needs of a large and relatively poor rural population. Financial sustainability of this higher central Government commitment may be built up over the project period through reform of park entrance and other user fees. The GEF funding is requested for field operation activities only and not headquarters activities because the additional level of effort to maintain a PA system that ensures a comprehensive conservation and sustainable use of a fully representative set of Uganda's biodiversity is concentrated at the decentralized field level. This effort is focused on maintaining infrastructure, supporting surveillance and monitoring, and providing ongoing training in remote but biological important areas typically not benefiting sufficiently from ecotourism. Resettlement: During the course of the development of the Protected Areas System Plan, substantial community consultation and redrawing of boundaries enabled the new proposed PASP to avoid significant issues of resettlement in 22 of the 25 protected areas. However three potential significant issues remain in Mt. Elgon National Park, Katonga Game Reserve, and Pian Upe Wildlife Reserve. - 35 - The World Bank and GOU have already engaged in discussions relating to establishing national protocols and policies that will ensure compliance with the Bank's Safeguard policies across all sectors. These discussions involve multi-sector consultations and are being driven by the need to comply with World Bank Safeguard policies in connection with the PRSC Program; this program provides direct budgetary support to Uganda. The urgency of addressing the identified resettlement issues inside protected areas is a further indication of the need for national commitment to these safeguards. The project will provide fimds to engage a team of consultants to review and design appropriate plans to address the specific issues of people resident in the protected areas, or using the protected area resources. This activity will be limited to the design of options for addressing the specific issues, all options will be fully consistent with the World Bank Safeguard policies. The implementation of the plans will not be part of the PAMSU project, but rather, will be financed separately. Project Component 2 - US$4.00 million GEF (US$3.9 million) Component 2: Environmental Conservation Education Agency: Uganda Wildlife Education Centre UWEC was established as a Trust, with USAID assistance, to transform the run-down Entebbe Zoo into a positive and effective center for conservation education, aimed at both the local population and tourists. Under the leadership of a dynamic and committed staff and Board, UWEC has made substantial progress in developing all aspects of its operations including its management team and staff, the physical infrastructure and the educational and outreach program. Support from ICB-PAMSU provided for strategic and business planning and feasibility studies aimed at identifying a realistic and sustainable larger scale development plan. ICB-PAMSU also provided for modest expansion of existing facilities and educational exhubits. UWEC plays a critical role in Uganda as the primary provider of outreach and public awareness programs in the area of wildlife conservation. For many school children in Uganda, UWEC provides the only opportunity to see and learn about the wildlife of their country. Most school children and many adults have never visited a protected area in Uganda. UWEC provides the public with a place to see first hand chimpanzees, lions, and even rhinos which were once plentiful in Uganda but are now extinct. They also learn about the valuable resource they have and the reasons to conserve them. UWEC's activities create public awareness and knowledge about Uganda's wildlife as well as broader environmental and conservation issues. PAMSU will provide resources to build on the investment made under ICB-PAMSU and to implement the strategic business plan and development program established through that process. Specific activities include the following: teacher education program and conservation education material development; awareness campaign; infrastructure development including natural open air exhibits of the three major ecosystems of Uganda (rainforest, savannah, and wetland), access road and staff accommodation, child discovery center, animal welfare and rehabilitation program including receipt and care for confiscated wildlife species under CITES. UWEC will reach out to school children around Uganda by funding both day time visits for nearby schools and an ovemight residency program for children living more distant New exhibits construction and maintenance highlighting Ugandan wildlife will be funded by the project to increase the range of educational messages of interest Support will also be provided for improved animal holding and veterinary facilities for both the needs of UWEC and the Wildlife Departnent Funds will also be provided to investigate and establish a plan for the appropriate institutional structure, management, and capitalization of the UWEC Trust. - 36 - GEF resources are requested to support this component The high proportion of GEF assistance to this component recognizes that, in the very long term, better public awareness of Uganda's unique national biological heritage and the economic benefits of biodiversity conservation will build support and willingness to pay for conservation of these resources in the face of competing land-use and other development pressures. Project Component 3 - US$ 1.70 million GEF (US$0 million) Component 3: Tourism Framework Agency: Ministry of Tourism, Trade and Industry MMTI's mission and efforts within the project focus upon developing the tourism sector of the economy to the maximum extent possible, consistent with the protection of environmnental and cultural values. The project will provide funding for logistics and equipment that will (1) establish a sustainable tourism framework based on policy development and enabling legislation; (2) provide for licensing and registration of operators within the sector to ensure quality; (3) develop accurate statistics on the sector, and (4) facilitate the improvement in human resource training. Under this component, support will also be provided for the Wildlife Department in the MTTI. This support includes training, equipment, management support and technical capacity building to enable the Wildlife Department to carry out Uganda's responsibilities under relevant international treaties, and in particular to function effectively as the Management Authority for the Convention on International Trade in Endangered Species (CITES). Project Component 4 - US$0.80 million GEF (US$0 million) Component 4: Cultural Heritage Agency: Department ofAntiquilies and Museums Uganda has a rich vein of cultural heritage that has to date been closeted in the Uganda Museum and spread around the country in increasingly dilapidated and uncared-for monuments and sites. While the interpretation of cultural history and practices is educational and interesting to both Ugandan citizens and foreign visitors, its potential as an educational tool and revenue generator has been neglected in Uganda. The newly established UMMA is an attempt by the Govemment of Uganda to concentrate some resources on a renaissance of cultural heritage and create a focal point for this very important ambition. The strategy for achieving this renaissance necessitates a multiple stakeholder effort rather than an institutional directive from DAM as this would not be sustainable, given the resources available from Government and the seed funding being proposed through PAMSU. The stakeholders include the Kingdom custodians themselves, Local Government, and, in the case of small sites and monuments, the communities where they lie. DAM will seek partnership anrangements with these stakeholder groups and proceed gradually. The re-instatement of the traditional Kingdoms (abolished under Obote's rule in the 1960s) and their property was a clear signal from this Government that cultural heritage was important for Ugandans. Inevitably that move has taken some time to precipitate through the kingdom hierarchy and result in the reestablishment of working structures that are not in conflict with each other (as was the case initially). DAM is perceived as the correct institution to lead this effort. It also has the credibility with the respective Kingdoms who have actually been requesting a central agency with the right expertise to help them preserve and bring to life their cultures. - 37 - The objective of supporting DAM under the PAMSU project is to strengthen DAM with capital support for renovation and improvement, to provide maintenance costs to maintain its current base, and to develop public/private partnerships for sustainability. PAMSU would support the following activities: museum refurbishment; establishment of a heritage trail in Fort Portal; development of a cultural center in Kabale; development of a country-wide cultural historic sites register and database; pilot cultural site development; operating expenses and training. Project Coordination - US$0.90 million GEF (US$O million) Agency: Project Coordination Unit The Project Coordination Unit (PCU) of the MTTI has been responsible for coordination and oversight of ICB-PAMSU and for the preparation of PAMSU. Its responsibilities include donor liaison, program identification, procurement of goods and services and contract management Under the PAMSU project, the PCU will continue for two and a half years playing more of a supporting role to the Implementing Agencies which will eventually take full responsibility for procurement and project implementation. The intention is to move from a model where the PCU is responsible for disbursement and procurement of IDA/GEF funds to a support and capacity building role. The PCU team will provide guidance and support to the implementing agencies, while the agencies will be responsible for preparing the necessary. documentation (i.e. terms of reference, requests for no objection, withdrawal applications, annual work plan submissions and any M&E reporting requirements). The new implementation arrangements for PAMSU include establishing separate special accounts for each implementing agency. UWA and UWEC will manage their own special accounts from the inception of the project The DAM and MITI components will be managed under special accounts for which the PCU will be responsible for the first two and a half years. Once the PCU has been phased out the Ministry will take responsibility for implementation. The project will support TA, equipment and other operating costs for the PCU. Under the TA category, the project will support the positions of Project Coordinator, Procurement Specialist and Project Accountant. Support staff include two secretaries, five drivers, an accounts assistant, and an office attendant The PCU will assume responsibility for all MTTI vehicles purchased under ICB-PAMSU, including their registration, logbooks, and maintenance. Vehicle operations for MTI activities will be funded from the activity budgets. - 38 - Annex 3: Estimated Project Costs UGANDA. Protected Areas Management and Sustainable Use Project Local Foreign Total Project Cost-By Component US $million US $million US $nillion Sustainable Wildlife Management 21.50 7.30 28.80 Environmental Conservation Education 2.70 0.90 3.60 Tourism Framework 1.20 0.40 1.60 Cultural Heritage 0.60 0.20 0.80 Project Coordination 0.70 0.20 0.90 Total Baseline Cost 26.70 9.00 35.70 Physical Contingencies 1.30 1.00 2.30 Price Contingencies 0.00 0.00 0.00 Total Project Costs' 28.00 10.00 38.00 Total Financing Required 28.00 10.00 38.00 Local Foreign Total Project Cost By Category US $milfion US $million US $mifllion Civil Works 14.13 0.00 14.13 Goods, Equipment and Vehicles 0.63 4.20 4.83 Services 2.79 0.60 3.39 Training 1.35 0.00 1.35 Operating Costs 6.30 4.20 10.50 Unallocated 2.80 1.00 3.80 Total Project Costs 28.00 10.00 38.00 Total Financing Required 28.00 10.00 38.00 IdeAtifiable taxes and duties are 0 (USSm) and the total project cost, net of taxes, is 30 (US$m). Therefore, the project cost sharing ratio is 90% of total prject cost net of taxes. - 39 - Annex 4: Incremental Costs and Global Environmental Benefits UGANDA. Protected Areas Management and Sustainable Use Project Context and Broad Development Goals 1. Context. Uganda possesses a rich natural endowment of forests, mountains, and waterways, as well as some of the richest assemblages of biological diversity in Africa. Harboring l 1% of the world's bird species and more than 7% of total world mammals, Uganda has pursued an ambitious program of protection and conservation that has resulted in an extensive system of protected areas. This system includes ten national parks, and twenty-nine game reserves, sanctuaries, and controlled hunting areas; it is complemented by an extensive forest reserve estate that is also potentially imnportant to biodiversity maintenance. Until the early 1970s, Uganda's protected areas served as the basis for a well-established tourism industry that was the country's third largest foreign exchange eamer. Subsequent political strife resulted in the deterioration of a significant proportion of the country's protected area system; wildlife poaching, encroachment in protected areas for foodcrop production and livestock grazing, and land clearing for human settlement have all taken a heavy toll on the natural resource base. A concomitant degradation in physical infriastructure, which previously supported a vital tourism industry, exacerbated the overall sustainability of the protected area system. Wildlife disappeared, tourism revenues fell, habitat became degraded, and local populations - through poverty and economic necessity - reverted to further non-sustainable use of local resources. Notwithstanding these historical trends, the rather extensive system of protected areas remains in good enough condition that, if properly managed, it will provide substantial opportunities for renewed economic growth, contributing positively to social goals of local poverty alleviation as well as to ecological goals such as the maintenance of globally important biodiversity. 2. General Development Goals. The war years also took a heavy toll on Uganda's physical infrastructure, economic competitiveness, social conditions, and public sector institutional capacity. To address these areas, Uganda has followed an aggressive program of reforns and interventions that are aimed at laying the groundwork for accelerated future economic growth. Spending on physical infrastructure has been resumed, with a view to providing an economically efficient system of transportation, energy and other services that will improve overall competitiveness. Economic policy reforms in the context of general domestic and international trade liberalization have created renewed incentives for private sector investments. Increased social sector spending in health, education and basic water and sanitation requirements is targeted to ameliorating poverty. In the political field, institutional reforms are stream-lining existing government institutions and decentralizing decision-making authority to local and District governments; this policy is entrenched in the Decentralization Act, and it has also required, in many cases, strengthening of central institutions to provide the requisite technical support to decentralized authorities. All of these development goals - economic infrastructure improvements, economic liberalization, poverty alleviation, and decentralization of authority and decision-making - are being actively supported by multilateral and bilateral agencies, as well as international NGOs. Although such activities have been pursued aggressively for just a decade, progress in all of these areas is promising. 3. The Role of Biodiversity Maintenance in Uganda's Development. Uganda recognizes that maintenance of its biodiversity - the individual species as well as the habitat that supports them - is an important building block in its overall development strategy. GOU has reiterated this in a number of official domestic policies and programs (such as the National Environmental Action Plan and the Integrated Tourism Master Plan) as well as through its global commitments relating to conventions on Biological Diversity, Endangered Species (CITES), and Wetlands (Ramsar). Specifically, biodiversity maintenance is expected to contribute to overall development goals as follows: (i) the natural resource base provides for renewed economic opportunities for tourism development; (ii) protected areas that are managed for their -40 - tourism benefits and local sustainable uses will contribute positively to local poverty alleviation; (iii) infrastructure improvements linked to protected areas will contribute to a liberalized economic climate that provides incentives for private sector and community-level investment; and, (iv) improved decision-making and management related to protected areas will be encouraged through increased local stakeholder involvement - including NGOs, community groups, local enterprises, and local government agencies. Baseline Scenario 4. General Scope. In the absence of GEF assistance, it is expected that the GOU would nonetheless pursue some program of protected areas management to meet domestic development objectives. Some of this was instituted and made possible as a result of the prior World Bank/GEF supported ICB-PAMSU project, and some comes as a natural consequence of promulgating the revised Protected Area System Plan before parliament in December 2001. The Baseline has been defined to include those activities that are either directly or indirectly intended to support the protected areas system. Conceptually, there is some level of Baseline expenditures that would be required in each of the five subcomponents of the PAMSU project. 5. Costs. The total expenditures associated with the Baseline Scenario are estimated to be US$22.0 million. These can be described as follows: * Uganda Wildlife Authoritv. (US$18.515 million) Targeted support is provided to UWA for protected areas and wildlife management. Under the Baseline, this amount is directed primarily to some institutional strengthening at the central level (i.e., UWA headquarters construction) and for infrastructure associated with decentralized operations (i.e., staff housing, park offices, road maintenance equipment). * Tourism Framework and Wildlife Division. (US$ 1.700 million) The GOU would provide ongoing public sector support to tourism initiatives that place government in a facilitating role in terms of its interactions with the private sector and other stakeholders. It also would provide support to selected planning functions that include the generation of statistical information that would be of interest to tourism planning. These activities are undertaken in parallel with support to be provided by the EU to the private sector and decentralized government initiatives relating to tourism planning in the districts (as this EU program involves parallel activities and is not a co-financing initiative its monetary value has not been specifically appraised and it is regarded as extemal to the project). In addition, the GOU will - under the Baseline - honor its domestic and intemational wildlife policy obligations and will provide funding to the Wildlife Division for undertaking required policy activities (e.g., recording information relating to CITES listed species, attending international meetings associated with Conventions, etc). * Cultural Heritage. (US$780,000) The GOU under the Baseline will provide resources for the Department of Antiquities and Museums to improve the museum exhibits and to implement decentralized projects that enhance cultural awareness and provide an additional node for long-term tourism development. * Conservation Education. (US$100,000) GOU would, under the Baseline, provide some targeted support to the Uganda Wildlife Education Center (UWEC) to complement information dissemination and education in support of various economically justifiable tourism activities and in line with some of its intemational obligations for animal protection. This level of support, however, would not permit dissemination of information that may be of a higher international priority. -41 - * Project Administrative Support (US$910,000) This includes selected administrative support for the above Baseline activities, especially those relating to the Tourism Framework and Cultural Heritage development 6. Benefits. It is anticipated that the PAMSU project will significantly impact Uganda's ability to undertake the conservation and protection of its biodiversity and environmental assets. Under the Baseline Scenario, institutional capacity and human resources will be developed to enable management and conservation of biodiversity, including improved capacity for management, research and policy development, planning and monitoring of Uganda's protected area system, as well as improved and rehabilitated facilities and infrastructure. These benefits, along with improved maintenance and management of Uganda's cultural assets, will contribute to both conservation and tourism development, will provide a foundation for longer-term benefits of returns from a significantly increased level of tourism, and will contribute to GOU goals of strengthened institutional capacity at all levels of government, improved fiscal sustainability, and a supportive environment for private sector development. Other components of the project will support the primary focus of protecting and managing biodiversity, by providing essential staff training, public education, community participation, local capacity, accessible information, and efficient project coordination. In addition to domestic benefits, the Baseline Scenario will contribute to effective conservation and protection of globally significant biodiversity and environmental assets. 7. Domestic Opportunity Costs and Potential Offsets. Considerable debate exists over the level of opportunity costs incurred by placing land into a protected area system. It is generally acknowledged that the protected area system does impose some losses on the country, although there is substantial uncertainty and disagreement arnong analysts regarding the level of these costs. First, farmers near protected area boundaries suffer crop and stock losses which can be attributed to wildlife in the protected areas. These losses have been valued as high as US$75 million annually; however, this value is based on unreliably low samples and considerable uncertainty about losses further from protected areas. One of the interventions in the PAMSU project will reduce such losses and conflicts through targeted animal control programs in boundary communities. Second, the opportunity costs of land may be a significant long run consideration. While not all arable land in Uganda has yet been taken up for agriculture and grazing, local land constraints in the region of some protected areas already exist, and will intensify as population increases. It is projected that land availability will become a binding constraint in 15 to 30 years; at that point, economic pressures to convert land to non-protected uses will become difficult to resist for any domestic government Depending upon assumptions relating to the timing and extent of land constraints, the opportunity costs of retaining protected areas for biodiversity conservation are estimated by various sources at a net present value of from US$200 million to US$1,100 million. Third, offsetting these concerns, however, estimates of local benefits associated with tourism, improved functioning of watersheds for water supply, and maintenance of other ecological functions are of a similar order of magnitude; some aggregated estimates of these (also uncertain) amounts are well in excess of US$1,000 million. Analytically, all of these opportunity costs (and benefits) accrue to the Baseline Scenario. The Baseline Scenario project design does, however, provide some mitigative programs to limit losses. The potentially high estimates for future opportunity costs underline, however, how essential it is for the global community to provide GEF assistance now to conserve biodiversity. -42 - Global Environmental Objective 8. The global environmental objective of the GEF Alternative is to ensure the effective, long-term conservation of Uganda's biodiversity in the face of competing economic pressures. Protection will be ensured over a wide range,of ecosystem types, including wetlands, swamps, tropical high forests, Afroalpine forests, grass and woodland savannahs, and internationally important lakes and rivers. Uganda is the fourth most densely populated country in Africa, 86% rural, with 357 rural people per square kilometer of arable land, largely dependent on smallholder agriculture for sustenance, and with a steep population growth rate. At the same time, Uganda ranks in the top ten nations in Africa in terms of species numbers for all major groups, and among the top ten in the world for mammals, including over half of the known world population of mountain gorilla. Its concentration of biological wealth offers exceptional opportunities to achieve global biodiversity conservation objectives cost-effectively. The project design is consistent with guidance from the Conference of the Parties as it addresses in situ conservation as it includes: (i) ongoing capacity building; (ii) strengthening the conservation, management, and sustainable use of ecosystems and habitats; (iii) strengthening the involvement of local and indigenous people; and, (iv) integrating social dimensions including those related to poverty. GEF Alternative 9. Scope. With GEF assistance for addressing the global biodiversity objectives outlined above, the GOU would be able to undertake a more effective program that would generate both national and global benefits. The major thrust of the incremental activities would be to address a number of targeted initiatives that improve management of the complete PA system. As noted previously, the Baseline Scenario concentrates supportive infrastructure and on centralized institutional strengthening that is a prerequisite for eventual support to management structures and projects throughout the parks system. Also some of the programs supported under the Baseline relate to activities that generate long-term financial returns in the tourism sector. Under the GEF Alternative, GOU can provide more support to a broader range of activities that support clear demarcation of the entire system and provide for effective patrolling and management of the entire system. It also, thereby, includes those habitats that may be of high priority from a global perspective but which do not yield substantial domestic benefits. The GEF Alternative also provides substantial strengthening of conservation education initiatives necessary for long-term sustainability of the protected area estate. 10. Costs. The total expenditures associated with the GEF Alternative are estimated to be US$37.9 million. Under the GEF Alternative, the program would still comprise the following Baseline components with no changes or additions to them: (i) Tourism Framework (US$1.700 million); (ii) Cultural Heritage (US$780,000); and, (iii) Project Administration (US$910,000). In addition, the program would involve expanded components relating to UWA activities and to UWEC as follows: * Uganda Wildlife Authority. (US$30.615 million) In addition to the Baseline activities, substantially higher support would be given to the management for all PAs. Specifically, this would include activities such as: physical demarcation of the complete PA system after ratification by Parliament; comprehensive park planning through management plans and annual operating plans; provision of specialized equipment, training and uniforms to all park staff, development of community conservation programs in boundary areas of the parks; improved management systems for financial controls; development of monitoring systems for wildlife (through MIST); and, implementation of selected long-term monitoring programs. -43 - * Conservation Education. (US$3.9 million) An expanded program would permit an order of magnitude increase in the scale of conservation education activities in Uganda. Support would be given to UWEC to permit dissemination of information of international importance. Specific support will be given for the following activities: (i) Conservation education through teacher education, infrastructure support for Lakeshore and fish pond development, a Child's Discovery Centre, a residence programme and associated materials and displays; (ii) Animal husbandry through Animal welfare and rehabilitation programs coupled with enhanced displays and interpretive exhibits, veterinary expenses, maintenance and repairs; (iii) Development of Trust Fund models to provide a basis for sustainable funding of UWEC beyond this project; (iv) financial and management controls; (v) support infrastructure including a short access road and upgraded staff accommodation; and, (vi) operational support for ongoing operational expenses including staff training. 11. Benefits. The GEF Altemative incorporates the substantial benefits (and implicit opportunity costs) of the Baseline Scenario, and will enable further beneficial outcomes beyond those already specified. In addition to the Baseline benefits, incremental benefits to the global community include the ability to sustain a comprehensive protected area system which is capable of conserving and sustaining globally significant and representative biodiversity, despite competing economic pressures on the land base. GEF assistance will enable Uganda to protect and to utilize sustainably the country's biodiversity beyond a nationally justified and affordable level. Improved revenue generation from sustainable ecotourism, a project goal, is not anticipated to be sufficient to protect areas of lower tourism potential containing critical biodiversity resources. GEF investment in conservation education will lead to long-term willingness to pay for conservation benefits due to improved public awareness. Global benefits will include enhanced monitoring and information exchange through improved record-keeping, and effective capacity to preserve endangered species through the ability to fulfill intemational biodiversity conservation treaty obligations under CITES. Continued protection of many additional ecological functions, and of option and existence values, is an unquantified but large benefit to the global community. 12. It is estimated that incremental domestic benefits of US$7.918 million will be realized in the GEF Altemative case. This amount excludes potential domestic benefits from game harvesting, some of which may occur in any event in the Baseline Scenario. The incremental potential, over the long term, involves a potential gross revenue of US$250,000 annually once game levels recover. Net revenues would be less than this, and incremental revenues with respect to the Baseline would decrease the amount further. At most, it is expected to have a domestic net present value of about US$0.73 million; because this benefit is highly uncertain and not of a high priority, however, it is effectively zero-weighted and excluded from the benefit adjustment These benefits include incremental local sustainable direct uses, distributional benefits, incremental protection of ecological functions, and preservation of domestically significant option values. While some direct uses of forests, such as pit-sawing timber extraction, were at unsustainable levels prior to inclusion in the protected area system, and some traditional uses are incompatible with biodiversity conservation, others, such as honey production, have been enhanced by protection of the environment Overall, the incremental portion of local direct use of natural products of protected areas is valued at US$2.244 million. Some domestic incremental distributional benefits are realized from conservation employment, which has offset the loss of previous unsustainable economic activities in the areas now protected, these benefits are valued at US$0. 165 million. Maintenance of domestic fisheries through the watershed protection afforded by the intact forests of the protected area system is valued at US$1.061 million. Additionally, enhanced maintenance of water sources and local rainfall for agriculture may also be attributed to watershed protection, but these benefits have not been adequately demonstrated and have therefore not been quantified. Finally, the domestic coffee industry benefits from the option value afforded by conservation of wild genetic stocks, valued at US$4.448 million. - 44 - Incremental Cosls 13. Incremental Expenditures. The total expenditure under the Baseline Scenario is estimated to be US$22.0 million while the total expenditure under the GEF Alternative is estimated to be US$37.9 million. The incremental expenditures under the GEF Alternative are therefore US$15.9 million. The majority of expenditures (76%) is attnbutable to decentralized activities of UWA, while 24% is attributable to enhanced conservation education efforts. 14. Incremental Costs. The incremental expenditures of US$15.9 million are partially offset by an incremental domestic benefit of US$7.9 million. This benefit would not have been realized in the Baseline Scenario, and is primarily associated' with sustainable direct uses, distributional benefits, protection of ecological functions, and preservation of domestically significant option values. The net result is that the Incremental cost of the GEF Alternative is US$8.0 million, for which GEF assistance is requested. The allocation of these amounts, and the resultant financing structure for the GEF Alternative as a whole, is sumarized in Table A1.2. 15. Cost-effectiveness. While no complete monetization of the global benefits of a GEF intervention has been completed, it is possible to provide some indication of its cost-effectiveness. It is estimated that the intervention translates to an annualized cost of US$144/km2/yr of effective protection; this reflects the basic hypothesis that improved decentralized measures will ensure protection of a wider range of species and habitats (approx. 1.3 million ha phased in over 30 years) than otherwise would be the case. The literature indicates that typical conservation expenditures around the world reflect international interventions corresponding to approximately US$20/kn2/yr to US$2,000/kn2/yr of protection. In the case of Uganda, therefore, the investments in the Baseline Scenario, which are targeted to meet domestic development priorities, provide an opportunity for the international community to obtain high efficiency for its conservation expenditures. -45 - Table A1.1 - PAMSU Incremental Cost Determination (US $ million) 12001$I Component Category Expendhture Domestic Benefit Global Benefit 1. Sustainable Baseline USS18.515 Conservation and protection of Supportof better management and Wildlife nationally important biodiversity protection of biodiversity. Management and environmental assets through provision of basic infrastructure and equipment forpark personnel. With GEF US$30.615 Improved sustainable direct use of Establishment, demarcation and Altemative forest products, enhanced maintenance of a oomprehensive and maintenance of water quality and representative protected area system local rainfall for agnrculture and capable of sustainably conserving fisheres, option value from globally significant biodiversity conservation of genetic stocks of despite competing economic domestically significant species. pressures. Protection of species Community participation in within these demarcated areas. conservation leading to domestic economic development and poverty alleviation. Incremental USS12.100 USS7.900 nI. Tourism Baseline US$1.700 Promotion of public & private Preservation of globally significant Framework (includes sector partnerships in enhanced natural assets. Capacity to carry out support to Wildlife conservation and tourism biodiversity conservation policy, Division) development; increased tourism planning & monitoring; fulfill CITES returns. obligations. With GEF US$1.700 As above. As above. Alternative Incremental USSO.000 USSO.000 Ill. Cultural Baseline US$0.780 Improved maintenance & Preservation of globally significant Heritage management of cultural assets; culural assets. increased tourism retums. With GEF US$0.780 As above. As above. Altemative Incremental US$0.00O US$0.000 IV. Environmental Baseline USS0.100 Fulfillment of domestic Improved biodiversity conservation Conservation conservation education needs. through education. Education With GEF US$3.900 As above. Higher levels of conservation; Alternative enhanced monitoring and information exchange through improved record-keeping, improved animal welfare and protection of endangered species. reInemental USS3.800 USSO.000 V. Project Baseline US$0.9 10 Efficient administration of project Adminishation & funds, coordination of Support ("PCU") implementing institutions, and evaluation of progress. With GEF US$0.9 10 As above. Alternative Incremental USSO.000 USSO.000 Baseline US$22.005 Totals With GEF US$37.905 Altemative Incremental US$15.900 US$7.900 _ Incremental Expenditure US$15-9 _ Summary Incremental Domestic Benefit (USS7.9) _ Calculation for GEF Eligibility Incremental Cost US$aO _ Note: This Is an updated Incremental Cost calculatIon based on a similar calcultion undertaken at the Ume of ICB-PAMSU project desgn (1997). Notable differences are that this revised project exdudes expenditures for the Forestry Department and a ramining nstitute. The benefit adjustments have been escalated to reflect foreign exchange and inflationary adjustments. -46 - Table A1.2 -- PAMSU Financing (US$million) 12001$1 GEF IDA GOU Total 1. Sustainable Wildlife Maragement (4.158) (23.908) (2.549) (30.615) a. nfrastructure - Boundary Demarcation 2.500 0.000 0.200 2.700 b. Infrastructure-Parks 0.000 15.780 1.500 17.280 c. UWA Headquarters Construction and Operations 0.000 1.770 0.180 1.950 d. Field Operations - Park Plans and Patrols 0.558 5.080 0.449 6.087 e. UWA Community Programrs 0.100 0.680 0.050 0.830 f Management,TrainingandMonitoring 1.000 0.598 0.170 1.768 11. Tourism Frarnework (0.000) (1.556) (0.144) (1.700) a. Policy, Statistics and Institutional Support Activities 0.000 1.414 0.131 1.545 b. Wildlife Division 0.000 0.142 0.013 0.155 111 Cultural Heritage 0.000 0.728 0.052 0.780 [V. Environmental Conservation Education 3.842 0.000 0.058 3.900 V. Pmject Administration & Support ("PCU") 0.000 0.819 0.091 0.910 Total Finandng Requirements 8.000 27.010 2.894 37.905 -47 - Annex 5: Financial Summary UGANDA: Protected Areas Management and Sustainable Use Project Years Ending June 30 Year 1| Year 2 Year 3 | Year 4 | Year 5 | Year 6 | Year 7 Total Financing Required Project Costs Investment Costs 12.0 9.1 6.3 5.5 5.0 0.0 0.0 Recurrent Costs 0.0 0.0 Total Project Costs 12.0 9.1 6.3 5.5 5.0 0.0 0.0 Total Financing 12.0 9.1 6.3 5.5 5.0 0.0 0.0 Financing lBRD/IDA 73.0 66.0 67.0 75.0 76.0 0.0 0.0 Govemment 8.0 8.0 8.0 8.0 8.0 0.0 0.0 Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiers GEF 19.0 26.0 25.0 17.0 16.0 0.0 0.0 User Fees/Beneficiaries 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 100.0 100.0 100.0 100.0 100.0 0.0 0.0 Main assumptions: Financial Management Assessment Summary Assessment As shown below, the current financial management arrangements satisfy IDA's minimum requirements under OP/BP10.02. However, with respect to the UWEC, they are not adequate to provide, with reasonable assurance, accurate and timely information on the status of the Project as required by the IDA for report-based disbursements. UWEC is therefore not yet ready for report-based disbursements, as outlined in the World Bank's Guidelines on Financial Monitoring Reports. A plan of actions for UWEC is outlined below, the completion of which will allow for the credit to be disbursed on the basis of FMR's. With respect to the PCU and UWA, the financial management arrangements are strong enough to allow for report based disbursements. The Action Plan for UWEC is set out on page 63 while those for UWA and PCU are set out on pages 61 and 58. Institutional and Implementation arrangements The project will be imnplemented by the following agencies: The Project Coordination Unit (PCU) of the MTTI Uganda Wildlife Authority Uganda Wildlife Education Centre Ministry of Tourism, Trade and Industry Department of Antiquities and Museums -48 - The roles of these institutions are detailed in the PAD. During the initial two and a half years of the project, the PCU will manage the Special Account through which funds for activities carried out by the DAM and the MTTI will be chamneled as outlined below. Project Description Summary A detailed description of the project is contained in the Project Appraisal Document The project has four components: * Component 1: Sustainable Wildlife Management (Agency: Uganda Wildlife Authority) * Component 2: Environmental Conservation Education (Agency: Uganda Wildlife Education Center) * Component 3: Tourism Framework (Agency: Ministry of Tourism, Trade and Industry (MTTI)) Component 4: Cultural Heritage (Agency: Department of Antiquities and Museums (DAM)) Generic Issues County Issues In recent years, significant improvements in public sector accounting and reporting have been achieved. Most notably, the annual public accounts of Government have been produced within the statutory period of four months after the end of the financial year for each of the past four years. Nevertheless, recent assessments undertaken by Government jointly with donors and IDA, such as the Country Financial Accountability Assessment (CFAA) have identified a number of areas that need to be strengthened to enhance financial management. The Country Financial Accountability Assessment (CFAA), indicates that inadequate financial accounting and auditing systems both at the center and in the districts pose a major fiduciary risk. While Uganda has a relatively good budgeting system, accounting for public expenditure using the present manual system is weak, largely because of weak staff capacities, neglect for timely and regular recording of transactions, side-stepping of controls, and a lack of financial discipline. It was noted during the CFAA that findings of audit reports were not regularly followed up and public accounts contained a number of material non-reconciled balances. There is an acute shortage of qualified accountants in the public sector. With the support of a number of donor assisted initiatives, such as the Second Economic and Financial Management Project (EFMP II) and the Local Government Development Project (LGDP) supported by IDA, and the Financial Accountability and Decentralization Support Project funded by DFID, Government is seeking to rapidly enhance the financial accountability framework in pursuit of thefollowing objectives: * mitigate fiduciary risk in public expenditure management for both taxpayers and donors; * achieve economy, efficiency and effectiveness in the use of public funds; * enhance transparency and accountability; * enhance staff capacity in financial management both in Central and local government; and * establish an appropriate enabling environment for private sector development and regulation. As an initial measure, the Ministry of Finance, Planning and Economic Development has expanded the mandate of the coordinating mechanism in place for guiding and monitoring all reform programs in financial management throughout Government using the existing structures under EFMP II. -49- Financial Reporting Formats of the various periodic financial reports to be generated from the financial management system will be developed. There will be clear linkages between the information in these reports and the Chart of Accounts. The financial reports will be designed to provide quality and timely information to project management, implementing agencies, and various stakeholders on project perfonnance. The Financial Procedures Manual will be revised to define the reports to be prepared, their content and how they are to be used. These reports include financial statements (e.g. sources and application of funds; expenditure classified by project components, disbursement categories, expenditure types and implementing agencies, and comparison with budgets; short-term forecasts of expenditure; unit costs for key items and comparison with budgets; etc). Sample formats are given in the World Bank's Guidelines on Financial Monitoring Reports. FMRs will be produced on a quarterly basis to support requests for replenishment of the Special Account and will include the following: Financial Statements: These are to provide information on the sources and uses of funds by loan category and by project activity, forecasts of expenditure, amount of disbursement requested and a reconciliation of the SA. Project Progress Reports: These are to provide information on project implementation progress in physical and financial terms using monitoring indicators, including identifying deviations from plans and explaining reasons for such variations. Procurement Management Reports: These are to indicate the status of procurement and contract commitments and expenditure including source of supply data for contracts subject to the Bank's prior review, as well as post-review contracts above a certain threshold. Annual Financial Statements and Annexes for each of the implementing agencies will include: A Statement of Sources and Uses of Funds showing funds from IDA and Counterpart Funds separately, a summary of expenditures analyzed under the main headings and by main category of expenditures (consistent with the Chart of Accounts), both for the current fiscal year and accumulated to date. A Balance Sheet showing accumulated funds for the Project, bank balances as well as other assets and liabilities of the Project, if any. Notes in respect of significant accounting policies and accounting standards adopted by management when preparing the accounts and any supplementary information or explanations that may be deemed appropriate by management in order to enhance the presentation of a "true and fair view". Special Account Statement showing deposits and replenishments received, payments substantiated by withdrawal applications, interest that may be earned on the account and the balance at the end of the fiscal year. A Reconciliation between the amounts shown as "Received" by the Project from IDA and that shown as having been "Disbursed" by them. Implementation Report, which would be a narrative summary of the implementation progress for the project. - 50 - * Summary of Credit Withdrawals using SOE's or FMR's, listing individual withdrawal applications by reference number, date and amount Indicative formats of these statements will be developed in accordance with IDA requirements. Linkages between Expenditure and Physical Actvides Inputs and outputs of financial information required to track project implementation should be identified for each component. In addition, inportant items on which physical data which would be captured and which would be included in the financial reports should be identified, and so should methods of capturing the physical data, and linkages with financial reports. These should be documented in the Financial Procedures Manuals for each component. The Project Implementation Plan will address the following areas for each component: Inputs and Outputs of financial information required to track project implementation; Inputs and Outputs of physical information matched with financial information required; and Arrangements for recording project impacts, outcomes, outputs, and inputs that are required to assess project progress toward project objectives. Books of Accounts and lists of accoundng codes Separate books of accounts will be maintained by the implementing entities for project transactions for the project and will include: a) Cash Book; b) Ledgers; c) Joumal Vouchers; and d) Contracts register Each of the implementing agencies has an existing Chart of Accounts for transactions they already undertake. However, these will be amended to allow for the classification of expenditures and sources and application of funds under the new project The Chart of accounts should be amended in a way that allows project costs to be directly related to specific work activities and outputs of the project Disbursement of the IDA Credit and the GEF Grant to the Implemendng agencies The disbursement of the IDA Credit to the PCU and UWA will be done quarterly based on Financial Monitoring Reports (FMRs) that integrate project accounting, procurement, contract management, disbursement and audit with physical progress of project implementation. The FMRs will include infornation under three main categories: (a) project financial reports which includes a summary of sources and uses of funds, an updated six-month forecast, a Special Account reconciliation statement, and an eligible expenditures by disbursement category statement; (b) a project progress report which explains variances between actual physical and financial progress versus forecasts; and (c) a procurement management report which shows procurement status and contract commitments. An initial six month forecast of project expenditures will be agreed between the UWA and IDA. This will cover the first two quarters, i.e the first two FMR periods. Following this agreement, an advance relating to aggregate disbursement requests not exceeding the forecast amount will be payable by the Bank upon demand by UWA. After the first and each subsequent quarter, the project will submit to IDA FMRs and relevant supporting docurnentation (see below) relating to each disbursement IDA will be responsible for - 51 - reviewing these to confum the eligibility of expenditures during the period covered by the FMR. The FMR will also contain a new forecast for the next two FMR periods. The cash request relating to each FMR will be the amount indicated in the approved cashflow forecast for the following six months less the balance in the Special Account at the end of the FMR period. Subsequent disbursements of the IDA Credit will therefore be made in respect of similar cash requests. The supporting documentation relevant to each FMR includes: the required minimum FMR content on financial, procurement and physical progress; statements containing Institutional Information; source of supply information (see below); breakdown of aggregate disbursements by legal disbursement category and disbursement percentage; Special Account reconciliation statement; Special Account bank statement; and a forecast of expenditures for the next two FMR reporting periods. The following source of supply information is required: (a) For contracts above the prior review threshold, the contractor/consultant's name, nationality, and (where applicable) the zip code, and the amount disbursed under each contract; (b) For contracts below the prior review threshold: aggregate disbursements by country of supply. Information relating to details for contracts above the prior review threshold as indicated above will be captured using World Bank standard contract infornation documents upon the inception of the contract and will not therefore be required upon the preparation of the periodic FMR Retroactive Financing Retroactive financing has been included to allow reimbursement for expenditures made prior to the signing date. The retroactive financing clause will cover expenditures made after June 30, 2002 and before the signing of the Agreement for the IDA Credit and GEF Grant as follows: IDA Credit - in an aggregate amount not exceeding the equivalent of SDR 50,000, and SDR 80,000 may be made in respect of Consultant's Services Category 3a and 3b, and equivalent of SDR 300,000 and SDR 20,000 may be made in respect of Operating Costs Category 5a and 5b; GEF Grant - in an aggregate amount not exceeding the equivalent of SDR 100,000 may be made in respect of Operating Costs Category 5b. Transitional arrangements for disbursement During the period between GEF Grant Effectiveness and qualification by UWEC for report-based disbursements, disbursement of the GEF proceeds to this agency will be done using transaction-based methods. An advance into the Special Account will be made at the inception of the project, and subsequent replenishments will be made on the basis of withdrawal applications and Statements of Expenditure (SOE's). Quarterly reports and forecasts that are required under the report-based disbursement method will be prepared by the implementing agencies and submitted to the Bank for review. They will be used to assess progress towards meeting the requirements of this method of disbursement. At the time of conversion, UWEC will prepare a reconciliation of project expenditures, disbursements received, and Special Account movements up to the proposed date of the conversion. Other details for the conversion will be worked out closer to the time of conversion between the project team and the Bank. Subject to the necessary agreement, the Bank and the implementing agencies will retain the option of disbursing the GEF Grant through direct payments from the Bank to operators/contractors on contracts above a threshold to be determined. Withdrawal applications for such payments will be accompanied by relevant supporting documents such as copies of the contract, contractors' invoices and relevant certifications. - 52 - Counterpart Funds Counterpart funds from the Govermment of Uganda to the implementing agencies will be indicated on a quarterly basis and will be based on approved workplans. The committed funds will be released in monthly installments. The project will submit quarterly accountability statements to GOU. Remedies against non-submission of returns and otherfinancial information IDA will have the right, as reflected in the Credit Agreement, to suspend disbursement to the implementing agencies if reporting requirements are not complied with. Documents relatng to Bank accounts Bank statements for the accounts maintained by the implementing agencies will be reconciled to the Projects accounting records on a monthly basis. The reconciliations will be approved by a senior official within the each of the agencies and any reconciling items will be investigated. Correspondence, bank statements, advices, list of signatories and other relevant information will be filed for each bank account. Bank cheque books will be kept in the safe custody of a person specifically appointed by the heads of the agencies. Cheque folios and related bank account information will be similarly maintained. The World Bank will regularly distribute the following documents to enable the implementing agencies to keep their records up-to-date in respect to the IDA Credit: * Payment Advice, * Monthly Disbursement Summary which provides the following information in two parts: - Part I: Opening balance and list of all transactions under the loan during the previous month, including all applications paid or refunds processed, along with value dates, currencies and amounts charged to the loan, and - Part 2: End of month balances for each category and for the loan as a whole, as well as amounts set aside to cover Special Commitments (if any). Fixed Assets, consulting services and civU works A Fixed Assets Register will be prepared, regularly updated and checked. For construction and capital work in progress, controls will be established over the awarding of contracts as well as for ensuring that payments are made in a timely and orderly manner in respect of certified work. Control procedures over fixed assets, consulting services and civil works will be documented in the respective Financial Procedures Manuals. External audit The Auditor General is primarily responsible for the auditing of all government institutions and projects. Usually, the audit is subcontracted to a firm of relevantly qualified, experienced and independent private auditors, with the final report being issued by the Auditor General, based on the tests carried out by the subcontracted firm. The external auditor does prepare a separate Management Letter giving observations and comments, and providing recommendations for improvement of accounting records, systems, controls and compliance with financial covenants. The audit report should be submitted to IDA within six months after end of each financial year. Any firm of auditors subcontracted to carry out the audit should meet the IDA's requirements in terms of independence, qualifications and experience. - 53 - Arrangements for the external audit of the financial statements of the project will be determined and communicated to IDA. The audited financial statements together with the auditor's report thereon and the auditor's management letter covering identified intemal control and accounting system weaknesses will be submitted to IDA within six months after end of each financial year. These audit reports will include those in respect of the project accounts, the use of SOEs/FMRs and on the Special Account Statement Any firm of auditors subcontracted to cany out the audit should meet the IDA's requirements in terms of independence, qualifications and experience. Accounting policies and procedures The project's accounting policies specify the accounting treatment for the project's financial transactions and constitute basic principles designed to ensure that the accounting records are complete, relevant and reliable and that accounting practices are followed consistently. The accounting policies and procedures for UWA and the PCU are documented in their respective Financial Procedures Manuals (FPM). The UWA FPM was prepared under consultancy by the accounting firm, PriceWaterhouseCoopers. These procedures are designed to guide activities and ensure accountability for UWA transactions, including those that are funded by donors. The procedures are intended to ensure that only authorized persons can alter or establish a new accounting principle, policy, or procedure to be used by the entity. Copies of the manual were distributed to all the protected areas. UWA's manual will be updated to document procedures introduced as a result of the new arrangements where they will manage their own Special Account and have the IDA Credit disbursed using FMRs. The manual for the PCU will be updated to include its organizational structure and reporting lines, and allocation of financial management responsibilities. The procedures used in the preparation of the FMRs and the disbursement of the IDA Credit will be the basis thereof. UWEC has appointed a consultant to write up its FPM. The Manuals will therefore describe several aspects of the accounting system, including: the major transaction cycles of the project; funds flow processes; the accounting records, supporting documents, computer files and specific accounts in the financial statements involved in the processing of transactions; the accounting processes from the initiation of a transaction to its inclusion in the financial statements; authorization procedures for transactions; the financial reporting process used to prepare the financial statements; financial and accounting policies for the Project; and procedures undertaken for the replenishment of the Special Account The accounts for the three implementing agencies will be prepared in accordance with International Accounting Standards on a historical cost basis. Under this basis, income is recognized in the income and expenditure statement in the year in which it is received and expenditure is recognized in the year in which it is payable. UWA has an accounting system that has the capability of allowing for the proper recording of project financial transactions, including the allocation of expenditures in accordance with the respective components, disbursement categories, and sources of funds. Controls over the preparation and approval of transactions are documented in the FPM. These ensure that all transactions are correctly made, recorded and reported upon. A list of accounts codes (Chart of Accounts) exists for the transactions but will should also be amended to allow for the classification of expenditures and sources and application of fumds indicated in the Project Agreement. The Chart of accounts should be developed in a way that allows project costs to be directly related to specific work activities and outputs of the project - 54 - Systems of internal control for UWA were designed to ensure that: every transaction that should have been entered into the accounting system is recorded; * no unauthorized transactions are recorded; those transactions that are entered are analyzed and posted correctly; source programs, which control the operation of the accounting system (original entry and subsequent analysis and postings), cannot be tampered with; unauthorized access is denied; assets of the entity are neither misappropriated nor used in an uneconomical or inefficient fashion; management policies (in budgets, long-range forecasts etc.) are complied with; * deviations from plans are noted, investigated and timely responses made; * financial infornation is communicated in the most effective way so that those entitled to it may maximize their use of it; and the financial statements show a true and fair view. Internal control systems are fully documented, and regularly updated, in the FPM. Project Documentation A draft Project Implementation Plan has been prepared and addressed the following areas: * Inputs and Outputs of financial: information required to track project implementation; Inputs and Outputs of physical information matched with financial information required; * Arrangements for recording project impacts, outcomes, outputs, and inputs that are required to assess project progress toward project objectives. These will be important ingredients in the preparation of the Monitoring Reports required quarterly under FMR-based disbursements. Summary Risk Analysis The objectives of the project's financial management system are: to ensure that funds are used only for their intended purposes in an efficient and economical way while implementing agreed activities; to enable the preparation of accounting and financial management system that enables management to monitor the efficient implementation of management; and * to safeguard the project assets and resources. The financial management system should also support the project's requests for funding and meet its reporting obligations to IDA, Government of Uganda and other stakeholders. The table below identifies the key risks that management may face in achieving these objectives and provides a basis for determining how management should address these risks. - 55 - Risk Risk Risk Mitigation Measures Rating . Staff capacity may not be sufficient to M The implementing agencies will be adequately staffed by implement all the control procedures appropriately qualified individuals who will receive regular as intended training in procedures Funds may not used in an efficient M Authorization procedures for transactions will be established and economical way and exclusively and, together with other internal control procedures, will be for purposes intended documented in the FPMs for each implementing agency Financial Information may be N Formats and periodicity of reporting to be determined. unreliable Verification of expenditures and of the information contained in periodic reports to be carried out internally and externally GOU may be unable to meet its H PAMSU will focus on improving cost-effectiveness in all funding obligations to PAMSU due agencies as a means to operate within very limited budgets to budgetary constraints Ignorance of procedures and N Internal control procedures to be documented in the Financial organizational rules by implementing Procedures Manuals and these will be widely circulated entities - Slow speed of delivering resources to M Project management will ensure that the established Implementing Agencies procedures will be followed Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible Risk) Supervision Plan A supervision mission will be conducted at least every six months. The mission's objectives will include that of ensuring.that strong financial management systems are maintained for the project throughout its life. A review will be carried out regularly to ensure that expenditures incurred by implementing agencies and funded by the IDA Credit remain eligible. The PSR will include a financial management rating for the component. This will be arrived at by the Country Office financial management specialist after an appropriate review. Effectiveness Conditions As conditions of effectiveness, the Government will: (a) The Subsidiary Agreement has been executed on behalf of the Borrower and UWA; (b) All conditions precedent to the effectiveness of the GEF Trust Fund Grant Agreement have been fulfilled; (c) The Borrower has established an adequate financial management and accounting system for the Project in form and substance satisfactory to the Association; (d) The Borrower has employed the independent auditors; (e) The Borrower has furnished to the Association the PIP including a financial management plan, in form and substance satisfactory to the Association; - 56 - (f) The Borrower has established a management information system, in form and substance satisfactory to the Association; (g) The Borrower and UWA have each appointed, for Project implementation, the Financial Manager and Accountant; (h) The Borrower has opened the Project Account and has deposited therein the Initial Deposit; (i) The Borrower and UWA have each established the procurement unit and appointed thereto staff having qualifications and experience satisfactory to the Association; and Gj) The Borrower has renewed contracts of the Project Coordination Unit staff of the Institutional Capacity Building for Protected Areas Management and Sustainable Use Project, under terms and conditions satisfactory to the Association. Component specifSc issues A description of the assessment of the financial management arrangements for each component follows below. PROJECT COORDINATION UNIT Flow of funds Bank accounts The following bank accounts will be maintained by the PCU: * A Special Account denominated in US dollars to serve as the main project account into which will be deposited project implementation fimds from IDA. * A Project Account denominated in Uganda shillings in which funds are periodically deposited from the Special account for funding PCU activities and those of the MTrI and DAM. * A Counterpart Fund Account denominated in Uganda shillings to channel GOU counterpart funds. The accounts will be maintained in a commercial bank acceptable to IDA and their signatories will be determined and documented in the FPM. Disbursement offundsfiom PCU to implementing agencies Funds will be disbursed to the MTTI and DAM on a monthly basis. The imprest will be replenished upon the submission to the PCU of acceptable accountability for previous advances. There will also be an option of the PCU making direct payments on behalf of the two institutions. - 57 - Detailed financial management procedures Staffing Accounting for PCU funds falls under the responsibility of the Project Coordinator. The primary responsibility for maintaining the project's books of accounts will rest with the project accountant. Written position descriptions that clearly define duties, responsibilities, lines of supervision, and limits of authority for all the staff will be drawn up and reflected in the accounting department's Organization Chart. The duties and responsibilities of the accounting staff will be determined and documented in the Financial Management Procedures Manual. Cun-ent staffing arrangements will be reassessed in line with the requirements of the new project and any necessary recruitment carried out. The allocation of responsibilities should enable the appropriate segregation of duties to ensure proper accountability. An appropriate training program which will include World Bank financial management and disbursement procedures will be designed for staff. Books of accounts Books of accounts will be set up for the project and regularly maintained to record project transactions. These will include a general ledger, cashbook and subsidiary ledgers. A proper filing system that allows authorized users easy access will be set up to ensure that all accounting and supporting documents are retained on a permanent basis and properly maintained. Information systems The PCU maintains its books of accounts using the Pastel accounting software. However, this system needs to be upgraded to the production of the necessary project financial reports required for report based disbursements. Accounting staff should also be adequately trained to maintain the upgraded system and appropriate controls should be instituted to safeguard the confidentiality, integrity, and availability of the data. Internal Audit Arrangements There is no internal audit function within the PCU organizational structure. The M1TI has an Intemal auditor whose duties include reviewing transactions undertaken by the PCU. The Intemal Auditor reports directly to the Permanent Secretary of the Ministry. Interal audit reports on project transactions address intemal control deficiencies, or ineffective policies or procedures. Project management will be expected to correct the deficiencies in a timely manner. In addition to the intemal monitoring by PAMSU and exteral monitoring by IDA, an independent consultancy is fielded every year. This review encompasses an examination and evaluation of project implementation progress and derives key lessons as a basis for improvement of the project objectives. The review will also encompass financial management aspects of project implementation. - 58 - Financial management action plan Issue Remedial Action Recommended Due Date Updating Financial The PCU's Financial Management Procedures Manual Credit effectiveness Management will be updated to clearly describe the delegation and Procedures Manual segregation of duties and responsibilities; funds flow processes, etc. Staffing Written position descriptions that clearly define duties, Credit effectiveness responsibilities, lines of supervision, and limits of authority for all the staff will be drawn up and reflected in the accounting department's Organization Chart. Current staffing arrangements will be reassessed in line with the requirements of the new project and any necessary recruitment carried out. Reporting A reporting structure for both intemal management and Credit effectiveness Arrangements external needs should be developed. Reports should provide financial data that it is possible to link to physical progress targets. Formats of reports should be determined and agreed with IDA. Project Accounting The PCU's accounting software should be upgraded to Six months after Credit System enable the automatic production of the necessary project effectiveness financial reports required for report based disbursements. Chart of Accounts A Chart of Accounts should be designed to provide Credit effectiveness information that reflects type of project, sources of fumds, and the relevant expenditure accounts that is consistent with expenditure categories in the DCA, project components and sub-components and activities. Training and Training program be developed for scaling up skills for the Six months after Credit Development of accounting staff in the PCU, the MTTI and the DAM. Effectiveness Accounting Staff Terms of Reference Temns of Reference for the audit of the project's financial Middle of the first year of for the extemal statements should be prepared. project implementation auditors I I UGANDA WILDLIFE AUTHORITY Overall policy guidance Uganda Wildlife Authority was established in 1996 and is under the general supervision of the Minister of Tourism, Trade and Industry. The governing body is the Board of Trustees appointed by the Minister in accordance with the Schedule to the Uganda Wildlife Statute. Planning, budgeting and approval of workplans UWA prepares annual budgets by identifying activities to be carried out during the year and allocating priorities to these activities. Each of the Authority's departments and Protected Areas is involved in this process. - 59 - Monitoring of budget performance is done on a quarterly basis, with actual results being compared to budgeted quarterly estimates. A narrative report is prepared which explains the existence of the variances. These reports are submitted to a management committee and further to the Finance and Audit Committee of the Board of Trustees. Flow of funds Bank accounts The following bank accounts will be maintained for the Project and managed by the UWA: * Special Account denominated in US dollars to be used for the portion of the IDA Credit disbursed to fund activities implemented by the UWA. Project account denominated in Uganda Shillings in which funds will be periodically deposited from the Special account for funding local currency transactions and for channeling GOU counterpart funds. A Special Account denominated in US dollars to serve as the main project account into which will be deposited project implementation funds from the GEF. The accounts will be maintained in a commercial bank acceptable to IDA and their signatories will be determined and documented in the FPM. Disbursement of funds to implementing agencies Funds will be disbursed to the protected areas implementing activities under the project on an imprest basis. The advances will be based on approved workplans and forecasts. Replenishments will be made upon the submission of accountability statements and supporting documentation. Detailed financial management procedures ICB-PAMSU supported a number of measures to strengthen the institutional capacity of UWA. These included: the appointment of an internationally recruited Executive Director on a three year contract to oversee UWA's development, the provision of an institutional contractor to develop financial management systems; the development of a training plan and the development of a strategic plan. Staffing Adequate staffing arrangements are in place to ensure that UWA has appropriately qualified and experienced staff. Written position descriptions that clearly define duties, responsibilities, lines of supervision, and limits of authority for all of the officers, managers, and staff will be drawn up and reflected in the accounting department's Organization Chart The Financial Services department is headed by a Director, reporting to the Executive Director. The Director is a fully qualifies accountant The departrnent also is staffed by a Financial Accountant, a Management Accountant, a cashier and accounts assistants. The allocation of responsibilities enables appropriate segregation of duties to ensure proper accountability. The staff were trained in the UWA's procedures when the FPM consultancy was conducted. An appropriate program which will include World Bank financial management procedures will be designed as further training for staff. - 60 - Books of accounts Books of accounts exist and regularly maintained to record project transactions. These include a general ledger, cashbook and subsidiary ledgers. A proper filing system that allows authorized users easy access is also maintained to ensure that all accounting and supporting documents are retained on a permanent basis and properly maintained. Each supported community subproject comrnittee will keep the following books accounts: a simplified cashbook and/or ledger; a register for procured goods; and a statemnent of community contribution. Original documents of accountability for all activities implemented by the Protected Areas are maintained at the UWA Headquarters. Information systems The accounting system for UWA is computerized and is based in the SunSystems Accounting software. It enables the production of relevant project financial reports. Training of accounting staff in the use of this system is continuing, and appropriate controls have been instituted to safeguard the confidentiality, integrity, and availability of the data. Internal Audit Arrangements As an important part of the ongoing monitoring of the system of internal controls, the internal audit function provides an independent assessment of the adequacy of, and compliance with, the established controls and procedures. The Internal Auditor reports to the Finance and Audit Committee of the Board of Trustees through the Executive Director. The frequency and extent of internal audit reviews and testing of the internal controls is consistent with the nature, complexity, and risk of UWA's activities. The Internal auditor plays a role in determining compliance with intemal control procedures by the Protected Areas in the management and use of UWA funds. Internal audit reports on project transactions will address intemal control deficiencies, or ineffective policies or procedures. Project management will be expected to correct the deficiencies in a timely manner. In addition to the internal monitoring by PAMSU and external monitoring by IDA, an independent consultancy is fielded every year. This review encompasses an examination and evaluation of project implementation progress and derives key lessons as a basis for improvement of the project objectives. The review will also encompass financial management aspects of project implementation. -61 - Financial management action plan Issue Remedial Action Recommended Due Date Documentation of The Financial Procedures Manual will be amended Credit effectiveness Financial describing accounting systems and procedures for the Management project. The Manual should include funds flow processes, procedures etc. Reporting Formats of reports should be determined and agreed with Credit effectiveness Arrangements IDA. Chart of Accounts UWA's Chart of Accounts should be amended to provide Credit effectiveness information that reflects type of project, sources of funds, and the relevant expenditure accounts that is consistent with expenditure categories in the DCA, project components and sub-components and activities. Training and UWA's training program for accounting staff in UWA, Six months after Credit Development of covering World Bank financial management policies and effectiveness Accounting Staff procedures, should be completed. Terms of Reference Terms of Reference for the audit of the project's financial Middle of the first year of for the external statements should be prepared. project implementation auditors I_I_I UGANDA WILDLIFE EDUCATION CENTRE Planning, budgeting and approval of workplans UWEC prepares annual budgets by identifying activities to be carried out during the year and allocating priorities to these activities. Each of UWEC's departments is involved in this process. Monitoring of budget performance is done on a quarterly basis, with actual results being compared to budgeted quarterly estimates. A narrative report is prepared which explains the existence of the variances. These reports are submitted to a management committee and further to the Finance Committee and the Operational Committees of the Board of Trustees. Flow of funds Bank accounts The following bank accounts will be maintained by UWEC: * A Special Account denominated in US dollars to serve as the main project account into which will be deposited project implementation funds from GEF. * A Central Project Account denominated in Uganda shillings in which funds are periodically deposited from the Special account for funding project transactions. * A Counterpart Fund Account denominated in Uganda shillings to channel GOU counterpart funds. The accounts will be maintained in a commercial bank acceptable to IDA and their signatories will be determined and documented in the FPM. - 62 - In addition to these, every participating district shall establish a separate bank account for the project to be used exclusively for project funds in accordance with Local Government regulations. NGOs/CBOs and CPMCs will also be required to open bank accounts purposely for project funds. Detailed financial management procedures Staffing Adequate staffing arrangements will be put in place to ensure that UWEC has appropriately qualified and experienced staff. Written position descriptions that clearly define duties, responsibilities, lines of supervision, and limits of authority for all of the officers, managers, and staff will be drawn up and reflected in the accounting department's Organization Chart. The duties and responsibilities of the accounting staff will be determined and documented. An appropriate training program which will include World Bank financial management procedures will be designed for staff. The allocation of responsibilities should enable the appropriate segregation of duties to ensure proper accountability. Books of accounts Books of accounts will be set up and regularly maintained to record project transactions. These will include a general ledger, cashbook and subsidiary ledgers. A proper filing system that allows authorized users easy access will be set up to ensure that all accounting and supporting documents are retained on a permanent basis and properly maintained. Information systems The accounting system for UWEC shall be computerized. It will enable the production of the necessary project financial reports. Accounting staff will be adequately trained to maintain the system and appropriate controls will be instituted to safeguard the confidentiality, integrity, and availability of the data. Audit Arrangements There is no intemal audit function within the UWEC organizational structure. This is satisfactory given the small number of transactions that are undertaken by the UWEC. However, the option to contract out internal audit services, especially where the need for these is identified, is retained by the UWEC management. - 63 - Financial management action plan Issue Remedial Action Recommended Due Date Documentation of A Financial Procedures Manual will be developed Credit effectiveness Financial describing accounting systems and procedures for the Management project. The Manual should include accounting basis, procedures policies, standards and guidance for intemal control and accounting with clear delegation and segregation of duties; funds flow processes, budgeting and budgetary control procedures, etc. Reporting A reporting structure for both intemal management and Credit effectiveness Arrangements extenal needs should be developed. Reports should provide financial data that it is possible to link to physical progress targets. Formats of reports should be determined and agreed with IDA. Project Accounting There should be a fully integrated computer based system Credit effectiveness System to keep track, collect and provide information on sanctioned budgets, procurement, expenditures, sources of funds and outputs, measured by monitoring indicators. Chart of Accounts UWEC's Chart of Accounts should be amended to provide Credit effectiveness infommation that reflects type of project, sources of funds, and the relevant expenditure accounts that is consistent with expenditure categories in the DCA, project components and sub-components and activities. Training and A suitable training program be developed for scaling up By Credit effectiveness Development of skills for the accounting staff in UWEC, and should cover Accounting Staff World Bank financial management policies and procedures. Temis of Reference Terms of Reference for the audit of the project's financial Middle of the first year of for the extemal statements should be prepared. project implementation auditors -64 - Annex 6: Procurement and Disbursement Arrangements UGANDA: Protected Areas Management and Sustainable Use Project Procurement General A Country Procurement Assessment Report (CPAR) was completed in February 2001. The CPAR makes six major recommendations: (a) revising the existing procurement regulations to make them more transparent, efficient and economic; (b) abolishing the current Central Tender Board (CTB) and creating a procurement regulatory body, the National Procurement Policy Unit (NPPU) - Renamed the Reformed Central Tender Board (RCTB); (c) creating contract committees in all procuring entities; (d) creating procurement units in all procuring entities; (e) employing procurement agents to support all those procurement entities without adequate capacity; and (f) promulgating a procurement law based on the UNCITRAL model. hnplementation of the above recommendations started officially on March 1, 200 1, when new Procurement Regulations, "The Public Finance (Procurement) Regulations, 2000", became effective. On the same day, the CTB ceased to exist in its old form with its functions being taken over by contract committees established in each ministry/procuring entity. Each procuring entity is now completely responsible and accountable for all its procurement. The RCTB should have been operational on the same day but there were delays in appointing the Board and recruiting top officials of the Secretariat. The RCTB was fully operational on September 1, 2001. A new procurement bill has been drafted and presented to Parliament In the meantime, the new Regulations will continue as the legal instrument for controlling procurement in public entities. Implementation of the recommendations started under PRSCI and is continuing under PRSC2. The CPAR identified the lack of adequate procurement capacity as the single most important issue in public sector procurement in Uganda. This has been confirmed in another study carried out in 70 procuring entities at Central and Local Govemment level. One of the interim solutions that is suggested in the CPAR is the employment of consultants to assist weak procurement units. Procurement of all IDA- and GEF-financed works, goods, and services under the project will be carried out in accordance with the Bank's Guidelines for Procurement under IBRD Loans and IDA Credits (January 1995 and revised in January and August 1996, September 1997 and January 1999). Consulting services by firms or individuals financed by IDA will be awarded contracts in accordance with the Bank's Guidelines: Selection and Employment of Consultants by World Bank Borrowers (January 1997, revised in September 1997 and January 1999). The appropriate World Bank standard bidding documents will be used for all International Competitive Bidding (ICB) and National Competitive Bidding (NCB) with any appropriate modifications. The World Bank's Standard Request for Proposals (RFP) will be used for the selection of consultants. The aggregate amount allocated for procurement of works, goods and consultancy services contracts under the project is US$22.8 million consisting of US$14.1 million for works, US$5.4 million for goods, and US$3.3 million for services contracts. The total allocation for works will finance (a) construction of rangers' houses and field offices in the national parks, a head office block for UWA in Kampala, rehabilitation of roads in the national parks, and demarcation of the boundaries of the national parks, and (b) rehabilitation of internal roads at the UWEC, and (c) minor rehabilitation works at DAM. Goods worth -65 - US$13.4 million will be procured under the UWA, US$0.5 million under UWEC, and US$0.2 milion under the MITI and DAM sub-components. The shares of the components in the consultancy services budget (US$3.3 million) will be US$2.0 million for UWA, US$0.3 million for UWEC, US$0.5 million for MTTI and DAM, and US$0.5 million for PCU. Retroactive Financing Retroactive financing has been included to allow reimbursement for expenditures made prior to the signing date. The retroactive financing clause will cover expenditures made after June 30, 2002 and before the signing of the Agreement for the IDA Credit and GEF Grant as follows: IDA Credit - in an aggregate amount not exceeding the equivalent of SDR 50,000, and SDR 80,000 may be made in respect of Consultants Services Category 3a and 3b, and equivalent of SDR 300,000 and SDR 20,000 may be made in respect of Operating Costs Category 5a and 5b; GEF Grant - in an aggregate amount not exceeding the equivalent of SDR 100,000 may be made in respect of Operating Costs Category 5b. Institutional Arrangement The project procurement will be carried out as follows: UWA and UWEC will separately be responsible for the inplementation of their requirements while MNTI will be in charge of procurement of goods, works and services under the MITTI and DAM components. However, during the first two and a half years of the project, these component implementing agencies will execute their procurement decisions under the guidance and close supervision of the Project Coordination Unit (PCU). UWA, UWEC, MMTI and DAM will individually prepare lists of their annual requirements and cost estimates of contracts. PCU will assist and supervise the three component implementing agencies in all stages of the procurement process of contracts. In addition, it will be PCU's contractual obligation to build the necessary capacity in these agencies so that the agencies become self-reliant in the implementation of their procurement requirements by the end of PCU's contract period. Procurement methods (Table A) Civil Works Works estimated to cost US$200,000 equivalent or more per contract will be procured through ICB. NCB procedures will be followed in awarding contracts estimated to cost less than US$200,000 equivalent per contract Works contracts not exceeding US$50,000 equivalent per contract will be awarded through solicitation of quotations, in writing, from at least three qualified contractors. Rehabilitation of roads within national parks may be carried out by UWA through the Force Account procedures. Before the commencement of the rehabilitation of roads, UWA will submit to the Bank for review the implementation plan of the activities, and the breakdown of the costs, showing the inputs of UWA and related costs, and the inputs that UWA would be sourcing from the market From its share in the civil works budget, UWEC may carry out minor civil works, where in-house capacity exists, through the Force Account procedures. Like UWA, UWEC will forward the cost estimate of the required inputs in the road rehabilitation works. - 66 - Goods Procurement under each component will be bulked where feasible into packages valued at US$100,000 equivalent or more and will be procured through ICB procedures. Goods contracts costing US$100,000 equivalent or more per contract will be procured through ICB. Goods estimated to cost less than US$100,000 equivalent per contract up to an aggregate amnount of US$0.8 million equivalent will be procured through NCB procedures that are acceptable to IDA. Goods that are estimated to cost less than US$30,000 equivalent per contract up to an aggregate amount of US$0.5 million equivalent may be procured through National Shopping procedures for goods available in the local market and/or through Intemnational Shopping procedures for goods that cannot be supplied within the country. Services Except as detailed below, consulting services will be selected through competition among qualified short-listed firms based on Quality- and Cost-Based Selection (QCBS) in accordance with the provisions of Section II of the Consultant Guidelines. Consultant Services estimated to cost less than US$ 100,000 equivalent per contract, up to an aggregate amount not to exceed US$870,000 equivalent may be procured under contracts awarded in accordance with the provisions of paragraphs 3.1 arid 3.7 of the Consultant Guidelines. Consultants estimated to cost US$50,000 equivalent or less up to an aggregate amount of US$220,000 equivalent may be selected through Least-Cost Selection as prescribed in paragraph 3.6 of the Consultant Guidelines. Individual consultants will be selected in accordance with the provisions of paragraphs 5.1-5.3 of Section V of the Consultant Guidelines. In exceptional cases that meet the conditions set forth in paragraphs 3.8-3.11 of Section Ell of the Consultant Guidelines, consultancy services estimated to cost up to an aggregate amount of US$200,000 may be procured on single-source basis subject to prior clearance with the Bank. An agreed list of the TA staff of the PCU for the ICB-PAMSU may be recruited under the PAMSU project on single-source basis. To ensure that priority is given to the identification of suitable and qualified national consultants, short-lists for contracts estimated to cost US$100,000 equivalent or less may be comprised entirely of national consultants (in accordance with the provisions of paragraph 2.7 of the Consultants' Guidelines. Advertising A General Procurement Notice for the project will be prepared and submitted to IDA for clearance and publication in the United Nations Development Business immediately after negotiations. The GPN will be updated at least once a year and submitted to IDA for review. - 67 - Procurement Plan With the assistance of PCU, the three component implementing agencies have completed, and agreed with IDA their respective procurement plans for the first year, and indicative plans for subsequent years of the project. The plans include relevant information on works, goods and consulting services as well as the timing of each milestone in the procurement process. The procurement schedules will be updated every quarter and submitted to IDA which will regularly review them during project supervision. The procurement plans have been included in the PIP. Procurement methods (Table A) Table A: Project Costs by Procurement Arrangements (US$ million equivalent) Procurement Method Expenditure Category ICi NCB Other2 N.B1F. Total Cost 1. Works 14.84 0.57 0.22 0.00 15.63 (13.36) (0.51) (0.19) (0.00) (14.06) 2. Goods 4.40 0.72 0.31 0.00 5.43 (4.35) (0.71) (0.28) (0.00) (5.34) 3. Services 0.00 0.00 3.63 0.00 3.63 (0.00) (0.00) (3.33) (0.00) (3.33) 4. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Training 0.00 0.00 1.46 0.00 1.46 (0.00) (0.00) (1.46) (0.00) (1.46) Operating Costs 0.00 0.00 11.75 0.00 11.75 (0.00) (0.00) (10.81) (0.00) (10.81) Total 19.24 1.29 17.37 0.00 37.90 (17.71) (1.22) (16.07) (0.00) (35.00) "Figures in parenthesis are the amounts to be financed by the Bank Credit/Grant. All costs include contingencies. 2/ Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local goverrnent units. -68 - Table Al: Consultant Selection Arrangements (optional) (US$ million equivalent) Seleetlon Method Consumt Semites vpendltr Category QCBS QBS SFB LCS CQ Other N.B.F. TotaldCost A. Firms 1.40 0.00 0.00 0.26 1.00 0.00 0.00 2.66 (1.36) (0.00) (0.00) (0.20) (0.87) (0.00) (0.00) (2.43) B. Individuals 0.00 0.00 0.00 0.00 0.00 1.10 0.00 1.10 (0.00) (0.00) (0.00) (0.00) (0.00) (1.00) (0.00) (1.00) Total 1.40 0.00 0.00 0.26 1.00 1.10 0.00 3.76 1 (1.36) (0.00) (0.00) (0.20) (0.87) (1.00) (0.00) (3.43) 1\ Including confingencies Note: QCBS = Quality- and Cost-Based Selection QBS = Quality-based Selection SFB = Selection under a Fixed Budget LCS = Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, etc. N.B.F. = Not Bank-financed Figures in parenthesis are the amounts to be financed by the Bank Credit/Grant. - 69 - Prior review thresholds (Table B) Table B: Thresholds for Procurement Methods and Prior Review' Contract Value Contracts Subject to Threshold rrocurememn Prior Review Expenditure Category (US$ tlousands) Method (US$ mHlions) 1. Works >=200,000 ICB Prior Review <200,000 NCB Post Review <50,000 Quotations Post Review 2. Goods >=100,000 ICB Prior Review <100,000 NCB Post Review <=30,000 N/IS Post Review 3. Services Firms >=l00,000 QCBS Prior Review <100,000 CQ Post Review <=50,000 LCS Post Review Single Source Prior Review Individuals >=50,000 IC Prior Review <50,000 IC Post Review Single Source Prior Review Total value of contracts subject to prior review: Overall Procurement Risk Assessment High Frequency of procurement supervision missions proposed: One every 6 months (includes special procurement supervision for post-review/audits) An assessment of the individual procurement capacities of the individual implementing agencies has been conducted, and a report has been prepared. The report indicates "High" risk mainly because of non-existence of procurement units and procurement proficient staff at the implementing agencies. However, the assessment concludes that the following actions would reduce the procurement risk: (1) Creation and staffing of procurement units in each of the implementing agencies; and (2) Renewal of the contracts of the ICB-PAMSU Project Coordination Unit staff and acceptance of PCU staff to continue providing technical assistance and on-the-job training to the staff of the implementing agencies for the first two and a half years of the project. It is critical that the above actions are carried out before Credit Effectiveness. 'Thresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement Documentation" and contact the Regional Procurement Adviser for guidance. -70 - Disbursement Allocation of credit/grant proceeds (Table C) The allocation of the Credit/Grant proceeds is shown in Table C and C1. Disbursements will be against the five main expenditure categories: Civil works; Goods, Equipment and Vehicles; Consultants' Services; Training and Operating Costs. Table C: Allocation of Credit Proceeds Expenditure Category Amount In Financing Percentage USS Civil Works 100% of foreign (a) Under Part A of the Project 10,303,200 expenditures and 90% of (b) Under Parts C and D of the Project 144,900 local expenditures Goods, Equipment and Vehicles 100% of foreign (a) Under Part A of the Project 3,942,900 expenditures and 90% of (b) Under Parts C and D of the Project 556,200 local expenditures Consultants' Services including audit 90% fees 1,501,200 (a) Under Part A of the Project 927,000 (b) Under Parts C and D of the Project Training 90% (a) Under Part A of the Project 68,400 (b) Under Parts C and D of the Project 327,600 Operating Costs 90% (a) Under Part A of the Project 5,695,200 (b) Under Parts C and D of the Project 833,400 Unallocated 2,700,000 Total Project Costs 27,000,000 - 71 - Table Cl: Allocation of Grant Proceeds Expenditure Category Amount In US$ Financing Percentage Civil Works 100% of foreign (a) Under Part A of the Project 1,782,000 expenditures and 90% of (b) Under Part B of the Project 425,700 local expenditures Goods, Equipment and Vehicles 100% of foreign (a) Under Part A of the Project 51,300 expenditures and 90% of (b) Under Part B of the Project 279,000 local expenditures Consultants' Services including 100% audit fees 296,100 (a) Under Part A of the Project 270,000 (b) Under Part B of the Project Training 100% (a) Under Part A of the Project 792,000 (b) Under Part B of the Project 76,500 Operating Costs 90% (a) Under Part A of the Project 819,900 (b) Under Part B of the Project 2,407,500 Unallocated 800,000 Total Project Costs 8,000,000 Use of statements of expenditures (SOEs): All applications to withdraw proceeds from the GEF Grant will be fully documented by UWEC except for expenditures against contracts (i) with an estimated value of US$100,000 or less for works, goods and consulting firms; (ii) contracts with an estimated value of US$50,000 or less for individual consultants; and (iii) all operating costs which may be claimed on the basis of certified statements of expenditure (SOE). Documents supporting these expenditures will be retained by UWEC and will be available for review upon request by the Bank supervision missions and project auditors. The project implementation agencies including UWEC will, dn quarterly basis, submit Financial Monitoring Reports as discussed during the project appraisal and Credit negotiations. Use of Report-based Disbursement method In addition to the basic FMRs, UWA and the PCU will submit the required supporting documentation for report-based disbursements, which will include: A. Source of supply information For contracts above the prior review threshold: (i) the contactor/consultant's name, nationality, and Zip code, where applicable (ii) the amount disbursed under each contract - 72 - For contacts below the prior review threshold aggregate disbursements by country of supply Breakdown of aggregate disbursements by legal disbursement category and disbursement percentage B. Special Account reconciliation statement C. Forecast of expenditures for the next two FMR reporting periods Special account: To facilitate disbursernents, the Government of Uganda will establish Special, Project and Advance Accounts in commercial bank acceptable to IDA, as follows: IDA GEF SA Advance Project SA Advance Project Account Account Account Account (C/Fund) (C/Fund) (in USD) (in UGSH) (in UGSH) (in USD) (in UGSH) (in UGSH) MTl (PCU) I 1 1 - - UWEC - - - I I I UWA I 1 Total 2 2 1 2 1 1 Advances to MlI and DAM by PCU will be on monthly basis using the imprest account procedure. The imprest will be replenished upon submission of acceptable accountability for previous advances. The PCU will have the option of making direct payments on behalf of the two institutions. Each participating district, NGO/CBO, and CPMC will establish and maintain separate bank accounts for the project, - 73 - Annex 7: Project Processing Schedule UGANDA. Protected Areas Management and Sustainable Use Project Project Schedule Planned Acttial Time taken to prepare the project (months) First Bank mission (identification) 07/23/2001 Appraisal mission departure 11/26/2001 Negotiations 04/23/2002 Planned Date of Effectiveness 09/03/2002 Prepared by: Project Coordination Unit Uganda Wildlife Authority Uganda Wildlife Education Centre Ministry of Tourism, Trade and Industry Preparation assistance: Bank staff who worked on the project included: Name Speciality Nathalie W. Johnson Environmental Specialist Jean-Michel Pavy Peer Reviewer Christine E. Cornelius Operations Officer Joseph M. Kizito Financial Management Specialist Jay Wysocki M&E Specialist Jack Ruitenbeck Economist Richard A. Cambridge Operations Adviser Marius Koen Financial Management Specialist Agi Kiss Lead Ecologist Reynaldo Castro Operations Analyst Dahir Warsame Procurement Specialist Rogati A. Kayani Lead Procurement Specialist Marie Claire Li Tin Yue Program Assistant - 74 - Annex,8: Documents In the Project File* UGANDA Protected Areas Management and Sustainable Use Project A. Project Implementation Plan Project Implementation Manual B. Bank Staff Assessments Procurement Assessment Financial Management Assessment C. Other *Including electronic files - 75 - Annex 9: Statement of Loans and Credits UGANDA: Protected Areas Management and Sustainable Use Project 02-May-2002 DWfrenoa betwn expeedn end anil Orginal Amount In USS MDiorts disbusemenwt Projed ID FY Purpose IBFD IDA SF GEF Cancel. Undhsb. Orig Fmm Ravd P065436 2002 2ND PHASE OF THE RD. DEVELOPMENT 0.00 64.52 0.00 0.00 0.00 63.55 3.98 0.00 P059996 2002 PROGRAM 0.00 49.15 0.00 0.00 0.00 47.62 0.00 0.00 P002984 2002 Enwgy for Rudi Trandosfmauon PlWed 0.00 62.00 0.00 0.00 0.00 60.32 3.29 0.00 P074078 2002 UG FOURTH POWER PROJECT 0.00 5.00 0.00 0.00 0.00 5.00 0.00 0.00 P050439 2001 Makers Piot DeBni Servic De9vey 0.00 48.50 0.00 0.00 0.00 43.15 25.46 0.00 P044695 2001 PRIVATIZATION & UTrLITY SECTOR REFORM 0.00 45.00 0.00 0.00 0.00 43.66 0.15 0.00 P070627 2001 Nasonal Agdc. Advisory Sevices Prn* 0.00 20.00 0.00 0.00 0.00 14.21 -0.98 0.00 P072482 2001 Rg9 Trsde Fac. - Ugande 0.00 47.50 0.00 0.00 0.00 45.19 16.25 0.00 P073089 2001 HIVIAJDS Coror Projed 0.00 22.00 0.00 0.00 0.00 19.69 6.66 0.00 P044879 2000 EMCBP 11 0.00 34.04 000 0.00 0.00 25.30 17.16 0.00 P002992 2000 Second Ecnomic and Fln. Mgrt. Pret 0.00 80.90 0.00 0.00 0.00 45.16 -29.12 0.00 P059223 1999 LOCAL GOV DEVE.PROGRAM 0.00 22.40 0.00 0.00 0.00 12.65 14.22 0.00 P002941 1999 NAKlWBO CHANNEL REH 0.00 12.40 0.00 2.00 0.00 1.48 -0.17 -1.04 P059127 1999 ICa-PAMSU 0.00 26.00 0.00 0.00 0.00 16.01 7.04 0.00 P002970 1999 AGRIQRES & TRNG. 11 0-00 90.98 0.00 0.00 0.00 71.00 2726 4.59 P057007 1998 ROADSDEVTPROGRAM 0.00 27.60 0.00 0.00 18.98 5.62 24.25 0.59 P040551 1998 EL NINO EMERG RD REP 0.00 34.00 0.00 0.00 0.00 13.25 5.04 0.00 P049543 1996 NUTRIT.CHILD DEV 0.00 30.00 0.00 0.00 0.00 18.62 21.05 1.23 P048836 1997 ROAD SECTANST.SUPP 0.00 12.10 0.00 0.00 0.00 1.53 1.85 0.00 P048870 1997 La. Vido Enw. 0.00 9.80 0.00 9.80 0.00 2.18 2.5 0.00 P035834 1996 LAKEVICTORIA ENV. 0.00 12.30 0.00 0.00 2.18 1.18 4.67 1.92 P002976 1995 PRIV. SECTOR COMPETI 0.00 38.40 0.00 0.00 0.00 0.77 3.22 0.00 P002971 1995 INST. CAPAClTY BLDG 0.00 45.00 000 0.00 0.00 0.33 Z23 0.00 P002963 1994 DSTRICT HEALTH 0.00 50.00 0.00 0.00 0.00 0.67 1.53 0.00 P002957 1994 SEXUALTRANS.IN 0.00 42.30 0.00 o.w 0.00 Z12 S14 0.00 SMALL TOWNS WATER Total: 0.00 929.89 0.00 11.80 19.16 583.13 16Z76 7.29 -76- UGANDA STATEMENT OF IFC's Held and Disbursed Portfolio Jan - 2002 In Millions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1996 AEF Agro Mgrnt 0.60 0.40 0.00 0.00 0.55 0.40 0.00 0.00 1992 AEF Clovergem 0.84 0.00 0.00 0.00 0.84 0.00 0.00 0.00 1997 AEF Conrad Plaza 0.94 0.00 0.00 0.00 0.94 0.00 0.00 0.00 1998 AEF Exec. Invmnnt 0.81 0.00 0.00 0.00 0.81 0.00 0.00 0.00 1999 AEF Gomba 1.40 0.00 0.00 0.00 1.40 0.00 0.00 0.00 2001 AEF Kabojja 0.35 0.00 0.00 0.00 0.35 0.00 0.00 0.00 1998 AEF Kampala Flwr 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2000 AEF Kasambyn 0.99 0.00 0.00 0.00 0.00 0.00 0.00 0.00 AEF Kiwa 11 0.09 0.00 0.00 0.00 0.09 0.00 0.00 0.00 1997 AEF Ladoto 0.80 0.00 0.00 0.00 0.80 0.00 0.00 0.00 2000 AEF LongFreight 0.80 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2000 AEF Mosa Court 0.40 0.00 0.00 0.00 0.40 0.00 0.00 0.00 1998 AEFNileRoses 0.16 0.00 0.00 0.00 0.16 0.00 0.00 0.00 1993 AEF Rainbow 0.79 0.00 0.00 0.00 0.79 0.00 0.00 0.00 1995 AEFRwenzori 0.17 0.00 0.00 0.00 0.17 0.00 0.00 0.00 1993 AEF Skyblue 0.51 0.00 0.00 0.00 0.51 0.00 0.00 0.00 1994 AEF White Nile 0.22 0.00 0.00 0.00 0.22 0.00 0.00 0.00 1998 AEF Wstem Hgh 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1999 CelTel Uganda 3.00 0.70 0.00 0.00 3.00 0.70 0.00 0.00 1994/00 DFCU 0.00 0.60 0.00 0.00 0.00 0.60 0.00 0.00 0/84/92 DFCU LEASING 0.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1995/96 Jubilee 0.00 0.10 0.00 0.00 0.00 0.10 0.00 0.00 1993 Kasese Cobalt 9.33 3.60 0.00 0.00 9.33 3.60 0.00 0.00 1996 Tilda Rice 2.05 0.00 0.00 0.00 1.55 0.00 0.00 0.00 1998 Uganda Sugar 4.02 0.00 0.00 0.00 4.02 0.00 0.00 0.00 1983 Total Portfolio: 29.87 5.40 0.00 0.00 25.93 5.40 0.00 0.00 Approvals Pending Comnmitment FY Approval Company Loan Equity Quasi Partic 2002 AEF Makss 1.35 0.00 0.00 0.00 2002 Bujagali 60.00 0.00 0.00 40.00 Total Pending Commitment: 61.35 0.00 0.00 40.00 - 77 - Annex 10: Country at a Glance UGANDA. Protected Areas Management and Sustainable Use Project Sub. POVERTY and SOCIAL Saharan Low- Uganda Africa Income Developmentdiamond- 2000 Population. mid-year (millions) 22.2 659 2,459 Life expectancy GNI per capita (Aties method, USS) 300 480 420 GNI (Atlas method, US$ billions) 6.8 313 1.030 Average annual growth. 1994-00 Population (Xl 3.0 2.6 1.9 Labor force (Xl 2.7 2.6 2.4 NI Gross per primary Most recent estimate (lataet year available, 1994-00) capita enrollment Poverty (X of population below national poverty line) 35 Urban population (IX of totel population) 13 34 32 Life expectancy at birth (years) 42 47 59 Infant mortality (per 1.000 live births) 97 92 77 Child malnutrition (X of children under 5) 26 .. .. Access to Improved water source Access to an Improved water source (1 of population) 52 55 76 Illiteracy (X of population age 15+) 38 38 38 Gross primary enrollment (% ofschool-age population) 122 78 96 Uganda Male 129 85 102 - Low-income group Female 114 71 86 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1990 1999 2000 Economic ratios' GDP (USS bililons) 4.3 6.4 6.2 Gross domestic Investment/GDP 12.7 16.4 18.1 Trade Exports of goods and serviceslGDP 7.2 11.3 10.1 Gross domestic savinaslGDP 0.6 4.7 2.6 Gross national savInqs/GDP 0.6 10.3 10.6 Current account balance/GDP -10.0 -11.6 -13.9 Domestic Investment Interest paymentalGDP .. 0.6 0.7 savings Total deWbGDP 51.2 63.7 59.1 Total debt servicelexports 80.2 23.7 25.5 Present value of debt/GDP .. 27.3 15.9 Present value of debtVexports .. 225.3 146.2 Indebtedness 1980-90 1990-00 1999 2000 2000-04 (average annual growth) GDP 4.1 7.1 7.5 4.4 6.3 Uganda GDP percapita 1.3 3.9 4.5 1.1 3.8 -- Low-income group Exports of goods and services 2.0 15.4 31.3 -0.7 6.3 STRUCTURE of the ECONOMY 1990 1999 2000 Growth of Invtetrnt and GDP (%) (X of GDP) 0- Agriculture 56.6 44.4 42.5 Industry 11.1 17.8 19.1 4 0 Manufacturing 5.7 8.7 9.1 120 Services 32.4 37.8 38.4 ___ j Private consumption 91.9 85.4 86.9 *20 95 so 97 go 99 oo General govemment consumption 7.5 9.9 10.5 GD1 GDP Imports of goods and services 19.4 23.1 25.6 1980-90 1990-00 1999 2000 Growth of exports and Imports (I%) (average annual growth) Agriculture 3.3 3.7 8.9 4.1 Industry 6.8 12.3 9.3 6.5 .0 Manufacturina 4.8 13.6 11.7 1.9 2. Services 3.9 7.9 7.2 5.3 Private consumption 3.9 7.5 17.3 0.9 0 99 oo General govemment consumption 1.7 6.4 -4.5 4.6 20 Gross domestic Investment 11.2 10.1 14.1 30.5 a.pons *0 Imports Imports of goods and services 5.9 13.2 47.8 6.3 Note: 2000 data are preliminary estimates. Uganda data are In fiscal year. 1999 refers to 1998/99; 2000 refers to 1999100. The diamonds show four kev Indicators In the countrv (In bold) comPared with its Income-aroup averaoe. If data are missinag the diamond will be Incomplete. - 78 - Uganda PRICES and GOVERNMENT FINANCE 1990 1999 2000 Infation %) Domestic oicoes (% change) 15 Consumer prices 45.5 -0 2 6 3 10 Implicit GDP deflator 44.4 4.2 3.0 Government flnance (X of GDP, Includes current grants) o 9 Current revenue 6.8 10.9 10.8 i9 Current budget balance -0.3 0.9 0.4 '- P deflator 4CP Overall surplus/defidct -5.9 -5.9 -9.0 TRADE (USS millions) 1990 1999 2000 Export and Import levels (USS mill.) Total exworts (fob) 210 549 439 2.000 Coffee 159 307 187 Cotton I1 23 Total Imports (clf) 584 1.392 1,513 1aos Food e Fuel and energy 78 108 143 so: Capital ooods .. .. .. Export Price Index (1995=100) 58 87 58 o 95 90 Sy Os n o Import price Index (1995 100) 83 103 104 *Exports *Importa Terms of trade (19956100) 67 65 56 BALANCE of PAYMENTS (USS millions) 1990 1999 2000 Current account balance to GOP (%) Exports of goods and services 246 726 626 o Imports of ooods and services 676 1,834 1985 Resource balance -430 -1,107 -1,359 Net income -77 -14 -15 Not current transfers 78 375 513 _ 11111 Current account balance -429 -746 -861 10 FInancing Items (net) 419 780 846 Chanoes In net reserves 10 .33 15 i -s memo: Reserves Induding oold (US$ millions) 35 748 719 ConversIon rate (DEC, locallUS$) 319.6 1,362.0 1,511.4 EXTERNAL DEBT and RESOURCE FLOWS 1990 1999 2000 (USS millions) Composition of 2000 debt (US$ mill.) Total debt outstanding and disbursed 2.202 4,078 3.668 IBRD 21 0 0 F: 21 G 117 IDA 805 2.043 2.115 E: 53 Totaldebtservice 197 184 172 IBRD 7 0 0 IDA 6 27 29 Composition of net resource flows D: s1a ~8:2.1111 Official grants 153 277 312 Official creditors 195 169 Private creditors 0 4 11 C:35W Foreign direct Investment 6 230 248 World Bank Program Commitments 227 165 107 A - IBRD E - BIlateral Disbursements 165 132 190 a - IDA D - Other mutblateral F - Private Principal repayments 6 13 14 C- IMF G-Short-term Net flows 159 119 176 Interest payments 7 14 15 Not transfers 152 104 161 Development Economics 9t13t01 - 79 - Additional Annex 11 Threats and Root Causes of Biodiversity Loss and Mitigating Actions Uganda: Protected Areas Management And Sustainable Use Project Critical Threats Root Causes Current Situation Solution (GEF Intervention) 1. Integrty of * 20 years of civil war and 1.1 A new proposed PA system * Finance boundary marking Protected Areas in insufficient fimding for PA has been passed by Parliament, exercise for all PAs where Uganda. management resulted in after six years of planning. required. 2. Lack of Awareness of extensive encroachmnent, * Awareness bidn n value of PAs and roles ignorance of PA boundaries 1.2 This proposal excises many traieng building and of respective and ignorance of the role of areas that have been settled and training of decentralised gtakeholders. UWA and central government. dissolves conflicts resulting from goverment officers (district, stakeholders. . ~~~~~~~70,000 people previously living sb-county and parish levels) * Extensive rural poverty and . '. where their areas of 3CoInsuffideon deplefion of naturl resources iside PAs. responsibility include PA systems Educatlon. outside PAs. and communities around the PAs. 4. Absence of apolicy * Government has placed less created at the demand of the * Support and advice for Absence of a policy emphasis on an integrated respective districts and sustainable community-based and stratey for approach to sustainable communities. biodiversity conservation and sustainable and biodiversity conservation than management initiatives that will management of PAs. for example, the Plan for the 2.1 The recent establishment of be encouraged through policy and Modemisation of Agriculture. decentralised government units in strategic interventions. * There is a lack of awareness Uganda has created a need for * Support for Uganda Wildlife for the economic opportunities to fully integrate PAs into district Education Centre and wildlife that exist through the level plaing for ina sct Clubs of Uganda to continue and preservation of unique and and education complementarity. strengthen their roles in globally threatened ecosystems conservation education and (tourism, for example). 3.1 The existence of UWEC is awareness building for the * Central management and an opportunity for education and general public and especially decision making does irivolve awareness building. school children. sufficient local participation, * Support ongoing strategy and ergo ownership and 3.2 The existence of the policy formulation towards responsibility for resources. nationwide network of Wildlife sustainable and collaborative PA Clubs of Uganda is an management. opportunity that can be utilized to sensitise the nation on conservation education especially in rnual areas where WCU already has a presence. 4.1 Current wholly centrahised PA management systems are not sustainable. - 80 - NAME OF ECOSYSTEM SIZE. OUTSTANDING MAIN THREATS GEF GEF MITIGATION SITE Q ) FEATURE JUSTIFICATION ACTIONS Queen Elizabeth Savannah 2,461 * Kazinga Channel * Poaching o Contains the Lake * Improve law N.P and woodlands with * Crater Lake * Encroachment George Ramsar Site enforcement through adjacent buffer Rift Valley * Giant forest hogs * Fishing village * Biosphere Reserve regular patrols Zone * Many species of expanding * Constitute the only * Awareness building water birds fully protected parts of and community based * Hippos, etc the ecosystem mosaic conservation activities with highest known * Boundary demarcation Mammalian carrying capacity in the world Kidepo Valley Savannah 1,442 * Cheetah * Poaching e Represents the * Awareness building N.P and woodland * Ostrich * Wild fires Karamoja/Turkana Dry community based adjacent buffer * The Kidepo Valley mountain ecosystem conservation activities zone with Borassus palm e Regional endemism * Creating fire brakes at forest e Stop over for selected strategic * Kudu palacarctic bird locations around the Park migrants * Better law enforcement through regular patrols Lake Mburo Savannah 260 * Zebra * Boundary * Supports 3 Red data * Awareness building N.P. and * Impala uncertainty book species of birds and country based adjacent buffer * Rare birds e.g. * Encroachment * Consensus part of conservation zone Narina's Trogon * Animal Grazing the unique activities/initiatives * Eland * Poaching inter-lacustrine * Boundary demarcation * Roan Antelope grassland ecosystem * Improved law * Included in the empowerment through IUCN's endangered regular patrols parks of the world Bwindi Imp. Afro Montane 331 * Mountain Forest ** Pit Sawing * World Heritage site In addition to Bwindi N.P. and Forest Rare Birds * Wildfires * One of the last Trust Support, which adjacent buffer * Chimpanzee * Encroachment habitats for the worlds covers mainly:- zone * Boundary largest remaining - General Park uncertainties with mountain gorilla Management support Zaire crop raiding population - Conservation awareness building and community based initiatives, and - Ecological monitoring & research the Project will support the following:- * Boundary demarcation * Support visitor centre establishment and initial __operational aspects. Mgahinga Afro Montane 27 * Mountain Gorilla * Encroachment * One of the few -DITT0- Gorilla N.P. and Forest * Golden Cat * Pit sawing habitat for the worlds adjacent buffer * Grazing remaining mountain zone * Crop raiding gorilla population * Smuggling of animals through the parks * Poaching * Illegal removal of products -81 - Kibale N.P. Low altitude 983 * Chimpanzee * Poaching * Supports nine * Support the and adjacent Tropical high * Other primate * Pit sawing species of animals implementation of buffer zone Forest * Saw milling considered to be sustainable utilisation of * Problem animals globally threatened recourses in the park * Illegal forest * Has the highest through the multiple use product removal primate density in the zones approach outlined * Wildfires world in the management plan * Livestock grazing * Improved law * Fishing within the enforcement through park regular patrols * Awareness building and county based conservation initiatives * Boundaty demarcation Rwenzori Mts. Afro Montane 996 * Lobelia * Poaching * World Heritage site * Awareness building N.P. and Forest * High altitude * Illegal forest * Water Catchment and community based adjacent buffer forest products removal * Snow feeds water conservation initiatives zone * Delicate bogs * Agricultural into the Nile (e.g. Agro Forestry) * Snow cap encroachment * Improved law Mountain enforcement through regular patrols Semuliki N.P. Low altitude 768 * Low altitude forest * Wildfires * Transitional zone * Creating fire brakes at and adjacent Rainforest * Hot springs * Problem animal between Congo forest selected strategic areas buffer zone * Pygmies * Fishing within and E. African region around the park * Eastern extension park * Contains half of the * Awareness building of Congo forest belt * Pouching recorded bird species o and community based * Illegal forest the entire Congo basin conservation initiatives product removal * Located close to * Improved law postulated pleistoncene enforcement through forest refugium regular patrols Mt Elgon N.P. Afro Montane 1,192 * Afro Montane * Poaching * Extensive * Boundary demarcation and adjacent forest Forest * Cattle raiding Afro-Montane with * Awareness building buffer zone * Caldera * Smuggling (Cross unique vegetation and community based * Lobelia Boarder) * Craters conservation initiatives * Extensive * Pit Sawing * Water catchment (Agro Forestry) Afro-alpine and * Illegal forest areas bamboo zone product removal * Endemic * Grazing butterflies & bird Ispecies - 82 - Additional Annex 12 STAP Technical Review Uganda: Protected Areas Management And Sustainable Use Project STAP Reviewer: Kenton R. Miller, Ph. D. Date: October 8, 2001 KEY ISSUES I . Scientific and Technical Soundness of the Project. The proposal is the second phase of a process that first focused on building the institutional and human capacity to restore the wildlife resource and the potential for tourism in Uganda. Given the nation's history in terms of the loss of wildlife resources and tourism capacity, and continuing insecurity, the two-step approach is rational. Of particular importance in project design is the long-term commitment of the effort. Project planners recognize the need for significant time to restore wildlife populations and communities, development of private sector capacity to operate tourism facilities, and the development of solid community relations and benefit sharing opportunities. 2. Identification of the Global Environment Benefits. Uganda was and remains one of the richest biodiversity countries for reasons explained in the document Thus, the restoration of its wildlife is of global interest. What is perhaps weak in the document is the role of Uganda's ecosystems in terms of their ecosystem services that are of value to the greater region; water and fish protein resources are examples. 3. Fit of the Project within GEF Goals. The objectives and measures proposed fit well within the GEF operational guidelines. The proposal also responds to the directives of the COP, especially COP3. 4. Regional Context. The relationship of this work with activities and investments in neighboring Kenya and Tanzania could be strengthened in the document, including other GEF projects. The opportunities for cross-boundary PA work, and shared ecosystems including Lake Victoria could be mentioned. 5. Replicability. The lessons learned by the project will be of value and interest to neighboring countries and beyond. Specifically, this includes: * restoring wildlife populations and tourism capacity following periods of insecurity; * the work on financial sustamability; * "business planning"; and * establishing financial independence from regular governmental appropriations for the UWA and the UWEC. 6. Sustainability of the Project. The project proposal recognizes well the sequence of steps needed to create a sustainable economy based upon wildlife tourism. Specifically, establish the human and institutional capacity (ICB-PAMSU previous phase); secure the Protected Areas and enable wildlife populations to be re-established; build a private sector capable of managing tourism marketing and facilities; and, very importantly, work with local communities to address their concerns, e.g., animal -83 - damage to crops, and to engage them in planning, management of wildlife and tourism, leading up to benefit sharing with them. This will take time, as the document makes clear. 7. Indicate the Extent to which this Project will Contribute to Improved Definition of GEF Strategies and Policies. Unfortunately, the situations that Uganda has experienced will be/is being repeated in Africa and elsewhere. Thus, GEF can continue to develop its strategies and policies to address this context drawing upon the lessons leamed in Uganda. The key issues here are to be considered at the 5th World Protected Congress (Durban 2003), including: * building the capacity to deal with biophysical, socio-economic, and institutional change; * local communities, equity, and sustainability; * decentralization; * sustainable finance and business planning; and * management effectiveness; among other points. SECONDARY ISSUES 8. Linkages to Other Focal Areas. Little reference is made in the document to other focal areas, specifically carbon sequestration, fresh water supplies and international waters. Clearly, Uganda's Parks contribute importantly to these other global goals. 9. Linkages to Other Programs and Action Plans at Regional and Sub-regional Levels. This proposal contributes importantly to wider East African biodiversity conservation and economic development based upon wildlife tourism. There are major investments by the GEF, bilateral assistance, and NGOs in Protected Areas, wildlife management and restoration, tourism, and capacity building. 10. Other Beneficial Environmental Effects. As noted above, the restoration of Uganda's Parks will yield outcomes beyond tourism and related economic development These include restored and secured water regimes that flow into lakes that provide significant fish protein. 11. Degree of Involvement of Stakeholders in the Project. The document is not clear as to how local communities have been involved in project design. Also, the nomenclature of the document, using terms like "target population" and "target groups" suggest a one-way flow of energy. That is, the project is giving benefit to others. Rather, the project surely seeks to engage these communities and institutions in project design and management. In this way obviously these institutions and communities help share in the costs (effort) and benefits. 12. Innovativeness of the Project. The first significant innovation of this Project has been the separation of the original 1997 ambitious effort into what has become two phases: first, to develop institutional and human capacity, and then to restore wildlife populations and tourism facilities, and establish community-based cooperative mechanisms. The second is to take the important, normally neglected, step of reforning existing institutions to establish the capability to manage the key components of wildlife management and tourism. And third, is the way the Project has dealt with time. This is clearly a long-term effort in response to the biology of wildlife population restoration, developing tourism facilities anew, and importantly, an honest recognition that insecurity will limit the rate of tourism visitation to the Country. - 84 - Additional Annex 13 Response to the STAP Technical Review Uganda: Protected Areas Management And Sustainable Use Project Scientific and Technical Soundness of the project: The STAP reviewer's assessment of the project is that the proposal is scientifically and technically sound. Given the nation's history, and lack of institutional capacity in the sector, he views the two-step approach as rational. The reviewer cites the long-term commitment to the process of rehabilitation and capacity building as an important design feature of the project that should ultimately lead to greater success in achieving project objectives. Identification of the Global Environment Benefits: The reviewer concurs with the evaluation of the biodiversity assets in Uganda and their global importance. He suggests that the proposal could be strengthened by including a discussion of the ecosystem services that are provided by the conservation of the ecosystems and there value to the greater region. This has been added to the proposal in the Summary Project Analysis section. Regional Context: The reviewers suggests that mention should be made of related activities in the region, specifically Kenya and Tanzania, ana also efforts to better manage Lake Victoria. Associated activities have now been included in the proposal under the Project Rationale section. Replicability: The lessons learned by the project will be of value and interest to neighboring countries and beyond in the review's judgment Sustainability of the Project: The review thinks that the proposal recognizes well the sequence of steps needed to create a sustainable economy based upon wildlife tourism. He highlights the projects aim to work with local communities to address their concerns as an important element in achieving sustainability. The reviewer concurs with the view that this is a long-term goal that will take time to achieve. Improved Definition of GEF Strategies and Policies: The review's judgment is that the experience of Uganda is and will be repeated in Africa and elsewhere. Thus, GEF can continue to develop its strategies and policies to address this context drawing upon lessons learned in Uganda. Secondary Issues Degree of Involvement of Stakeholders in the Project: The reviewer though the project proposal was not clear on the involvement of local communities. The proposal has been improved to address this concem under the Summary Project Analysis section Social. - 85 - Additional Annex 14 Letter of Endorsement Uganda: Protected Areas Management And Sustainable Use Project ;3w ic.t-- )3> So ItmC Ovlfepmeit $3 S7 5t2M5tJ 5e Q~tobe' 2001 nr CO~uiEiy Detector Mr ePo o a ~~~~t LOWI:a Tre Wod Sao* t5~treeNW wnwvo O,C, zgU33 Dow Mk Ad4a. As yOw may be r. OM tflOUbO CapWI OAt ph, oa PAMSU PrOWt is cw4g tor an in hAge 202 ontwammet ate wtbw Sr * "twond OSN tBmtdtnwi us coned a 1te fp)wt documw ht ionStn tar w ftnih*t wtw ft K8.PAMSU flt secon pWtuo wD _tda the burd n los a morUeft sftfeUy In IJgW'ad Thoe lnt of TwiIP rrt anf $Uy wS cAfu to be Ifoal palM ho taM prgIw am t bfor6keUUd owt I 5k Ns Opo'trn foh* gm Bw* t ft assawe twder toe te F.or c.: tteePmbu Secitr Pity of Youmm. 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