Document of The World Bank FOR OFFICIAL USE ONLY ReportNo: 38162 JO - PROJECT APPRAISAL DOCUMENT ONA PROPOSEDLOAN INTHE AMOUNT OFUS$56MILLION TO THE HASHEMITEKINGDOM OF JORDAN FOR A CULTURAL HERITAGE, TOURISM AND URBANDEVELOPMENT PROJECT January 8,2007 SustainableDevelopmentDepartment MiddleEastand NorthAfrica Department MiddleEastand NorthAfrica Region This documenthas a restricteddistributionand maybe usedby recipients only inthe performanceoftheir official duties. Its contents not otherwisebe disclosedwithout World Bank authorization CURRENCY EQUIVALENTS (Exchange Rate Effective December 18,2006) Currency Unit = Jordanian Dinar Jordanian Dinar 0.709 = US$1.OO FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CDS City Development Strategy C M U City Core Management Unit CRMP Cultural ResourcesManagement Plan CVDB Cities and Villages DevelopmentBank D o A Department o f Antiquities EMP Environmental Management Plan FMR Financial Monitoring Report GAM Greater Amman Municipality GoJ Government o f Jordan IBRD International Bank for Reconstruction and Development JBIC Japan Bank for InternationalCooperation JD Jordanian Dinar JICA Japan International Cooperation Agency JTB Jordan Tourist Board LED Local Economic Development MOA MinistryofAgriculture M o E MinistryofEnvironment M o F Ministryo fFinance M o M A Ministryo fMunicipalAffairs MoPIC MinistryofPlanningand International Cooperation MoPWH MinistryofPublic Works andHousing MOTA MinistryofTourism andAntiquities NTS National Tourism Strategy PAP Petra Archaeological Park PIP Project ImplementationPlan PM ProjectMunicipality RAP Resettlement Action Plan RFP Request for Proposals RLDP Regional and Local Development Project RPF Resettlement Policy Framework RSCN Royal Society for Conservation o f Nature SA Special Account STDP Second Tourism Development Project TDD Technical DevelopmentDepartment at the Ministry o f Tourism and Antiquities TOR Terms o f Reference U S A I D US.Agency for International Development Vice President: Daniela Gressani Country Director: Joseph P. Saba Sector Director: Inger Andersen Sector Manager: Hedi Larbi Task Team Leader: Mohammed D.E.Feghoul I i FOR OFFICIAL USEONLY JORDAN JO-CULTURAL HERITAGE, TOURISM AND URBANDEVELOPMENT PROJECT PROJECT APPRAISAL DOCUMENT MIDDLEEAST AND NORTHAFRICA MNSSD Date: January 8,2007 Team Leader: Mohammed D.E.Feghoul Country Director: Joseph P. Saba Sectors: UM-Urban Management Sector Director: Inger Andersen UE - Urban Environment Sector Manager: Hedi Larbi Themes: Municipal Governance Other Urban Development Project ID: PO81823 Environmental Screening Category: B Lending Instrument: Specific Investment Loan Safeguard Screening Category: B 1 INTERNATIONAL BANK FORRECONSTRUCTIONAND DEVELOPMENT 1 56.00 I Total: 71.08 Fiscal Year (FY) 07 08 1 09 10 11 II I 12 I 13 Annual 0.75 3.20 9.30 15.90 16.60 8.30 1.95 1I 3.95 13.25 'II Cumulative I 0.75 I II 29.15 III 45.75 54.05 II 56.00 1 I Expected Effectiveness Date: March 31,2007 Project Implementation Period: March 31,2007 to March 31,2012 1! Expected Closing Date: September 30, 2012 This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not be otherwise disclosed without World Bank authorization. Does the project depart from the CAS incontent or other significantrespects?Ref: PAD A.3 [ ]Yes [XINO Does the projectrequire any exceptions from Bankpolicies?Ref: PAD D.7 [ ]Yes [XINO Havethese beenapprovedby Barkmanagement? [ ]Yes [ IN0 I s approval for any policy exceptionsought from the Board? [ ]Yes [ IN0 Does the projectinclude any critical risks rated"substantial" or "high"? Ref: PAD C.5 ]Yes [XlNo IDoes the projectmeetthe Regionalcriteria for readinessfor implementation?Ref: PAD D.7 L W e s 1 1No 1 Project development objective(s) Ref: PAD B.2, TechnicalAnnex 3 The objectives o f the project are to contribute to: (a) tourism development inthe five key historically and xlturally important cities o f Jerash, Karak, Madaba, Salt and Ajloun, and thereby create the conditions for local economic development; and (b) consolidation o f the tourism industry in Petra, Jordan's premier tounsm asset and destination. Project description[one-sentence summary of each component] Ref: PAD B.3.a, TechnicalAnnex 4 The project will consist o f four components: (1) revitalization o f historic city centers, urban infrastructure improvements and cultural landscapes regeneration in and around the historic cores o f the cities o f Jerash, Karak, Madaba, Salt and Ajloun (the Project Municipalities); (2) construction o f a new Visitors Center at the Petra Sanctuary; (3) provision o f financial and technical supports to local entrepreneurs and community groups to encourage the creation andor expansion of environmentally appropriate and financially viable small and medium enterprises inthe civic core areas; and (4) technical assistance for capacity building and project management. Which safeguardpoliciesare triggered, ifany? Ref: PAD D.6, TechnicalAnnex I O EnvironmentalAssessment (OPIBPIGP 4.01) CulturalProperty(OPN 11.03,beingrevisedas OP 4.11) InvoluntaryResettlement(OPIBP 4.12) Significant, non-standardconditions,if any, for: Ref: PAD C.7 Boardpresentation: Not Applicable. LoanEffectiveness: Not Applicable. Conditionsandcovenants applicableto project implementation: 1. Disbursement Conditions: (a) Petra Gateway Component. No withdrawals shall be made in respect o f payments made for expenditures under the component 2 (Petra Gateway), until evidence, satisfactory to the Bank, has been provided showing that (i) the Petra Archaeological Park is under the sole junsdiction o f the Department o f Antiquities; (ii) the Peka Archaeological Park i s managed by a dedicated entity (the Petra Management Entity) operating under oversight o f the Department o f Antiquities; and (iii) that the Petra Management Entityhas been allocated a secure, predictable and sufficient operation and maintenance budgets funded through earmarking a share o f the Petra gate revenues. (b) Local Economic Development Grants No withdrawals shall be made inrespect of payments made for expenditures under the component 3 (Local Economic Development), untileligibility criteria, a selection process, and terms and conditions for Grants, all satisfactory to the Bank, have been developed and adopted by the Borrower. (c) Salt Heritage Fund. No withdrawals shall be made inrespect o f payments for expenditures under the Salt Heritage Fund sub-component until documentation, satisfactory to the Bank, has been provided evidencing that (i) the Salt Heritage Fundhas been established and (ii) eligibility criteria, a selection process, and terms and conditions for Grants, all satisfactory to the Bank, have been developed and adopted by the Salt Hentage Fund. ... 111 2. Implementation Capacity: Q The Borrower shall at all times maintain the Technical Development Department o f the Ministry o f Tourism and Antiquities (MOTA-TDD),with adequate functions, staffing and resources satisfactory to the Bank. The MOTA-TDDshall be responsible for overall coordination o f the Project including overseeing the implementation o f the Project, the procurement and financial processes under the Project and the preparationof Project reports. 3. Dated Covenants: o Preservation of natural landscapes and historic city cores: The Borrower shall ensure that, by no later than December 3 1,2008: - each Project Municipality has obtained all necessary detailed special buildingand zoning regulations, each valid and enforceable, for the purpose o f preservation of its historic city core; and - inrespect o f Ajloun, an enforceable master plan together with all applicable land use, zoning and building regulations has been approved defining both (i) the boundaries o f the protected landscape and (ii)the containment o f the established settlements within the protected landscape, for the purpose o f declaring its natural landscape a protected area. o Mid-Term Review: - The report which the Borrower shall furnishto the Bank, on or about June 30,2009 ("the Mid- Term Review Report"), shall (i) integrate the results o f the monitoring and evaluation activities performed, on the progress achieved since commencement o f Project implementation and (ii) set forth the measures recommended to ensure satisfactory Project implementation and achievement o f the Project objectives for the remainder o f the Project's implementation; and - the Borrower shall review with the Bank, by October 31, 2009, or such later date as the Bank shall request, the Mid-Term Review Report, and, thereafter, take all measures required to ensure the satisfactory completion o f the Project and the achievement o f the Project objectives, based on the conclusions and recommendations o f the Mid-Term Review Report and the Bank's views on the matter. iv V JORDAN CULTURAL HERITAGE. TOURISM AND URBANDEVELOPMENT PROJECT Contents Page A. STRATEGICCONTEXT AND RATIONALE ............................................................................................... 1 1. Country and Sector Issues ......................................................................................................... 1 2. Higher Level Objectives to Which the Project Contnbutes ....................................................... 5 B. PROJECTDESCRIPTION .............................................................................................................................. 5 1. LendingInstrument.................................................................................................................... 5 2. [If 5 Project Development Objective(s) and Key Indicators ............................................................. Applicable] Program Objective and Phases: ........................................................................ 3. 5 4. 8 Alternatives Considered and Reasons for Rejection.................................................................. Lessons Learned and Reflected inthe Project Design............................................................... 5. 9 C. IMPLEMENTATION ..................................................................................................................................... 10 1. 10 Institutional and Implementation Arrangements ..................................................................... Partnership Arrangements (if applicable) ................................................................................ 2. 10 3. Monitoring and Evaluation o f OutcomesResults.................................................................... 10 4. 11 . Critical &sks and Possible Controversial Aspects ................................................................. Sustainability ........................................................................................................................... 5 11 6.. Loan Conditions and Covenants .............................................................................................. 13 D. APPRAISAL SUMMARY ............................................................................................................................... 14 1 Economic and Financial Analyses ........................................................................................... 14 2.. Technical.................................................................................................................................. 14 3. Fiduciary .................................................................................................................................. 15 4. Environment: Environmental Category: B ............................................................................. Social ....................................................................................................................................... 16 5. 16 6. Safeguard Policies ................................................................................................................... 17 7. Policy Exceptions and Readiness ............................................................................................ 17 ANNEX 1: COUNTRY AND SECTOR OR PROGRAMBACKGROUND ............................................................................. 18 Annex 1.1: Tourism Sector Strategic Framework.............................................................................. 18 Annex 1.1.Appendix 1: SIYAHA Project Brief.......................................................................... 28 Annex 1.2: Urban Sector.................................................................................................................... 29 Annex 1.2 .Appendix 1: The Municipal Sector Context............................................................... 34 Annex 1.2 .Appendix 2: Jerash Municipality Profile .................................................................... 38 Annex 1.2 .Appendix 3: Karak Municipality Profile .................................................................... 42 Annex 1.2 .Appendix 4: Madaba Municipality Profile ................................................................. 47 Annex 1.2 .Appendix 5: Salt Municipality Profile ....................................................................... 51 Annex 1.2 .Appendix 6: Ajloun Municipality Profile ................................................................... 56 vi ANNEX2: MAJOR RELATED PROJECTSFINANCED THE BANKAND/OR OTHERAGENCIES BY ................................ 61 ANNEX 3: RESULTSFRAMEWORK MONITORING AND .............................................................................................. 62 Annex 3.A. Monitoring and Evaluation Arrangements ..................................................................... 67 Annex 3.A - Appendix 1:List of K e y M&E indicators and relatedmeasuringtools.................... 70 ANNEX 4: DETAILEDPROJECT DESCRIPTION ........................................................................................................... 73 Component 1: Historic City Centers and Urban InfrastructureImprovements.................................. 73 Component 2: Petra Gateway............................................................................................................. 83 Component 3: Support to Local Economic Development and Salt Heritage Fund............................ 84 86 Annex 4 - Appendix 1: Project Description Summary Matrix.......................................................... Component 4: Capacity Buildingand Project Management Support ................................................ 88 Annex 4 - Appendix2: City Core Regulations and Ajloun Cultural Landscape Regulations ..........93 ANNEX 5: PROJECTCOSTS ......................................................................................................................................... 97 Annex 5.A: Financial Summary ....................................................................................................... 101 ANNEX6: IMPLEMENTATIOK A..GEMENTS. ...................................................................................................... 102 Annex 6 .Appendix 1:Project Implementation Arrangements Chart ............................................. 107 Annex 6 .Appendix 2: TDD Organogram....................................................................................... 108 Annex 6 .Appendix 3: Project Implementation Schedule............................................................... 109 Annex 6 .Appendix 4: Municipal Revitalization Pact .................................................................... 115 ANNEX 7: FINANCIALMANAGEMEKT AND DISBURSEMENT ARRanGEMENTS ....................................................... 121 ANNEXPROCUREMENT 8: ........................................................................................................................................ 129. Annex 8.A: Procurement Plan.......................................................................................................... 133 ANNEX 9: ECONOMIC AND FINANCIALANALYSIS ................................................................................................... 137 ANNEX 10: SAFEGUARD POLICYISSUES .................................................................................................................. 143 Annex 10.A: Environmental Management and Cultural Resources Management Plans.................143 Annex 10.B: Social Analysis Jerash. Karak. Madaba and Salt: A Summary .................................. Annex 10.C: Summary o f the Resettlement Policy Framework and Resettlement Action Plan......149 151 ANNEX 11: PROJECTPREPARATIONAND SUPERVISION .......................................................................................... 175 ANYEX 12: DOCUMENTS INTHE PROJECTFILE ...................................................................................................... 176 ANNEX 13: STATEMENT OFLOANS CREDITS AND ................................................................................................... 178 ANNEX14: COUNTRY AT A GLANCE Map:IBRDNo 35216 .. ........................................................................................................................ 179 vii A. STRATEGIC CONTEXT AND RATIONALE 1. Country and Sector Issues 1. The Cultural Hentage, Tourism and Urban Development Project (CHTUDP) would assist the Government o f Jordan (GoJ) to strengthen its very important tourism industry, preserve its rich cultural heritage assets, and tackle some o f its most urgent developmental problems. It would also support GoJ's National Agenda' and be a core part o f its National Tourism Development Strategy (NTS)'. CHTUDP builds on the fact that tounsm is one o f the key pillars o f the Kingdom's economy, accounting for about 11 percent o f GDP in 2005, is also Jordan's largest export sector, its second highest producer o f foreign exchange and its firth largest employer o f labor.3 Further, the proposed project builds on the success o f the recently completed and Bank-supported Second Tourism Development Project (STDP, FY98, US$32m). The latter focused on enhancing Jordan's premier world-class historical and natural attractions: Petra (a UNESCO World Heritage site) and Wadi Rum (an area o f outstanding natural beauty that also witnessed the passage of Lawrence o f Arabia). The current initiative would focus instead on five historically and culturally important cities: Jerash, Karak, Madaba, Salt and Ajloun-the project municipalities (or PMs). In doing so it would aim at helping to deepen and diversify Jordan's tourism products, and harnessing its considerable cultural and historical assets for the difficult task o f revitalizing its historic cities. The Tourism Sector 2. Formulated during 2004 based on extensive reviews and discussions with key stakeholders inthe sector, N T S lays out GoJ's policy and program for the development o f tourism over the next 10 years. The Strategy responds to the fact that Jordan has tremendous and in many ways unrivalled cultural heritage resources; and that these resources currently provide the foundation for the Kingdom's tourist economy. However, these resources are neither fully nor effectively harnessed to support the national development effort. 3. Recent World Tourism Organization (WTO) studies indicate that, despite its tremendous touristic assets, Jordan's performance has not kept pace with some o f its key competitors in the region. For example, during the 1995-2002 period: (a) nine o f the 30 top emerging destinations were in the Middle East and North Africa (MENA) region (all Arab) and Jordan was not among them; (b) Jordan lagged far behind Egypt, and considerably behind United Arab Emirates and Bahrain interms o f market share over the period, and Jordan's share had in fact fallen over the period; (c) the region's average annual growth rate in tourist arrivals was 12.2 percent while Jordan's was only about 5.8 percent-less than half o f the regional average; (d) the average annual rate growth in tourism receipts in Jordan was 2.1 percent, considerably below the 6.5 percent regional average4; and (e) that while Jordan earned about US$485 per tourist arrival (about the average for the region), this was well below that of Egypt and Lebanon, and less than a third o f Israel's US$1,800 per arrival. 4. The principal reasons given in N T S for Jordan's relatively low regional position despite its plethora o f assets were: (a) the so-called "fear factor" stemming largely from regional political stability (mainly the neighboring Israeli-Palestinian conflict) that depressed visitation; (b) over-reliance on a few iconic heritage products such as Petra and Wadi Rum; (c) inadequate public and private investment in National Agenda, Governmenf of Jordan 2006-2015, Government of Jordan, undated publication o f the National Agenda SteeringCommitteeformed by Royal Decree on gthFebruary 2005, p4. NTS is outlined in a series of GOJ documents beginning in 2004, including but not limited to: Jordan, National Tourism Strategy 2004-2010, A Sustainable Development Approach, revised Draji Using Value Chain Approach, March 18, 2004; Jordan, National Tourism Strategy 2004-2010; Jordan, National Tourism Strategy 2004-2010, Action Plan; Tourism Policies, Booz, Allen Hamilton, Amman Jordan, October 2004. National Accounts data for 2005, supplied by the Ministry ofTourism and Antiquities T h e data used in the NTS here are generally from WTO sources. Actual arrivals and receipts are not preciselyknown, and the NTS data differ significantly from the Jordanian Ministry of Tourism recent estimates.However, the differences do contradict the general trends and conclusions. It may be that recent arrivals and receipts for 2000-04 were somewhat higher than NTS estimated. 1 developing new tounsm products and improving existing ones; (d) inadequate gateway access, entry and distribution (referring mainly to limits on flights into the main Amman airport and the underdevelopment o f other potential access points such as the Aqaba airport); and (e) inadequate investment in marketing and promotion. 5. To overcome these challenges, N T S proposed a set o f actions resting on five Pillars': (a) strengthening Tounsm Marketing; (b) supporting product development and competitiveness; (c) developing human resources; (d) providing an effective institutional and regulatory framework; and (e) promoting social equity. Based on these pillars, N T S outlined an extensive program o f action and laid out a set o f key development targets for 2010 that include: (a) doubling Jordan's tourism economy inreal terms; (b) increasing tourism receipts from JD570 (US$806m) million in 2003 to JD1.3 (US1.84) billion; (c) increasing tourism supported jobs from 40,800 in 2003 to about 92,000, thus creating some 51,000 new jobs; and (d) achieving taxation yields to GoJ o f more than JD455 (US637) million. The program o f action covers marketing, product innovation and diversification, human resource development, and institutional and regulatory reform as well as initiatives to mobilize private sector participation in sector development. 6. By supporting tourism product development and diversification in the selected 5 historic cities (PMs) located in the Amman, Northern and Western regions, the proposed CHTUDP would help underpin pillars 2-5 o f NTS. It would help to develop new tourist attractions and improve existing ones; revitalize existing tourism circuits in this area; and consolidate important alternative tourism zones. Thus it would help Jordan achieve the key medium-term strategic objective o f shifting away from the exiting structure of isolated short-stay (and hence low-spend) attractions, towards a denser structure o f more varied multi-attraction "zones" that can attract a wider range o f visitors and encourage longer stays and spends (see Annex 1.1). Given increased flows o f visitors, such "zones" would also offer significant investment opportunities to private investors inproviding more and better services to visitors. This would help to further consolidate the zones, and provide even wider and longer-tern gains to local economies and the kingdom as a whole. At the same time, CHTUDP would help GoJ to preserve important historical and cultural assets; mobilize these assets and integrate them more fully into local social and economic life; spread the benefits o f tourism more widely by creating much needed local employment opportunities; and build institutional and regulatory capacity at both local and central levels -all important national objectives. 7. TheSIYAHAInitiative: Inaddition to the above, CHTUDP would effectively complement and be complemented by other donor funded initiatives in the sector, particularly the USAID-supported SIYAHA project. For example, while CHTUDP would focus on cultural heritage preservation and on physical and institutional improvements in the municipal sector, SIYAHA focuses more closely on tourism marketing and promotion, new product development, and mobilizing private sector investment, as well as on building both private and public sector capacity and institutional reform. Coordination is facilitated by the fact that MOTAi s host to both projects. Thus, together the two projects would provide a solid foundation for the implementation o f NTS. (See Annex 1.1 for further information on NTS and SIYAHA.) 8. Completion ofprior initiatives in Petru: A t the urgingo f GoJ, CHTUDP would also help address some important unfinished initiatives from STDP, namely the completion o f a major new Visitors Center at the Petra World Heritage Site and Jordan's Jewel in the Crown.6 This Center was designed and was intendedto have been built under STDP. However, this was not possible because o f time constraints. This initiative is not part o f the core strategy o f CHTUDP, but i s important inits own right, given the centrality o f Petra to Kingdom's economy and its world-level value. The actual NTS document identifies 4 pillars, but it also outlines a set o f key Principles that prominently includes Social Equity. This in fact amounts to a fifth Pillar and is considered as such here. More than 90 percent of all international tourist visit Petra, by far the most important destination on the tounst itinerary. 2 TheMunicipal Sector 9. While centered on tourism product development and mobilizing Jordan's historical and cultural assets, CHTUDP is also deeply rooted in the urban sector. Tourism development cannot be sustained unless some o f the more urgent problems o f the secondary cities--where many o f the assets are located-- are also addressed. Foremost among these are ensuring that the economic benefits o f tourism accrue not just to central elites but also to the local communities, and mobilizing the local community in protecting and maintaining the cultural and historic assets as vital national resource and an important part o f their own heritage. Together this should help in creating a further welcoming environment for tourists. The most urgent sector issues are summarized below. Details are provided inAnnex 1.2.7 10. Jordan's population has more than doubled over the last 20 years and stood at about 5.7 million in 2005. The population i s highly (79 percent) urbanized and the urban population has been growing at a relatively fast 2.8 percent per year. A defining characteristic i s the high concentration o f the urban population in the Amman Metropolitan Area.' This area houses some 60 percent o f the urban population and accounts for about 80 percent o f the Kingdom's economic output, and this double concentration has provided a major challenge to balanced and equitable national development. Another defining characteristic o f the urban sector is the concentration o f authority at the center, i.e., inAmman. As a result o f GoJ's recent policy o f amalgamation, there are now 100 municipalities in Jordan, including Amman, down from some 328 in the late 1990s. These new municipalities have absorbed the former village councils, thus they tend to contain several small urban concentrations in addition to a main city. Further, their average population has increased from about 15,000 in2000 to about 50,000 today. 11. As a result o f the process o f amalgamation, almost all secondary cities face new major interrelated challenges, including the need to strengthen the local economy, the legal, political, and fiscal autonomy and local accountability'. T h i s lack o f autonomy and local accountability i s reinforced by dependence on the center for funding. Municipalities are dependent on central government for about 50 percent o f revenues and thus lack the incentive to increase local revenue mobilization. Inaddition, central government must approve all budgets and budget changes, all expenditures above JD5,000 (about US$7,000), all changes in taxes and fee rates, and all hiring o f staff. Significantly aggravating the autonomy and accountability issue i s the general lack o f local capacity. Most o f the municipalities are neither well organized nor adequately staffed. Further, they lack adequate planning and management systems and tools. 12. The net effect o f the above is that many (and maybe most) o f the secondary cities in Jordan lack vibrancy. Their economies are largely stagnant andj o b opportunities are few. Inaddition: local poverty is high; environmental service delivery is poor; traffic inthe central areas is chaotic; property and business tax bases are inadequately tapped; urban planning and management is weak; local data bases are inadequate; and vital cultural heritage and other assets (including the historic cores and other key potential tourist attractions) are neglected or ignored and allowed to decay. Further, obvious economic opportunities in both the public and private sectors (including many in tourism) go unexploited and the general quality o f local life i s far below what it could be. Thus, it i s hardly surprising that these cities have difficulty in retaining their qualified and enterprising people -- particularly young professionals who depart in considerable numbers to take advantage o f greater employment opportunities and standards o f life in Amman and the Gulf States. In sum, many o f the secondary cities find themselves locked into a negative spiral with few opportunities or incentives for change. This is a situation with considerable and potentially very negative consequences nationally as well as for local citizens (including increasing social inequality and potential political instability). The consequent risks to the development o f the tourism sector are obvious. Thus, it is a situation that has to be timely addressed, if Jordan is to realize the goals set out in its National Agenda. ' Informationon the Characteristicsandproblemsof each Project Municipalityis presentedinthe appendicesto Annex 1.2. Compnses the municipalitiesofZarqa, Rusaifa, Wadi al Sir and Suwailihin additionto the Amman municipality Currently, one-halfof the municipal council members and all the mayors are appointed by central government, even if this situationmay change significantlyafter the next municipal elections. 3 13. Many o f the above are problems that cannot be addressed by any one development project or program, much less one such as CHTUDP that is centered on tounsm and cultural hentage development. However what CHTUDP aims to do is to begin to address a few o f the key issues that: (a) have direct bearing o n the sustained growth o f the economy in the targeted cities; (b) promise increased local economic development and consequently improved local employment opportunities; (c) offer the potential to improve the quality o f local life, urban management and service delivery; and (d) could trigger other wider-spread social and economic benefits. 14. Most o f the vital cultural and historical resources that can be mobilized for tourism development in the Project Municipalities lies in the old civic cores-a problem as well as an opportunity. The development challenge i s to transform these important resources from seeming liabilities to assets. This i s a challenge that CHTUDP also intends to help GoJto begin to tackle. The positive side is that because the resources are mostly concentrated in the historic core, CHTUDP can focus its limited resources on these specific areas, which is what it proposes to do. The downside o f this strategy i s that other areas o f the municipalities and other important aspects o f municipal life cannot be addressed under the proposed project. CHTUDP intends to offset this dilemma partially through its Municipal Revitalization Pacts. These will help provide the municipalities with technical, financial and managerial tools that can be applied to help improve conditions in other areas o f city life, thus spreading the benefits o f the intervention. Despite the severity of challenges in the sector, GoJ has had n o clearly defined urban strategy. This deficiency i s currently being addressed by the Ministry o f Municipal Affairs (MoMA) in a set o f ongoing Bank-supported sector analyses. These would underpin a fully-fledged standalone Regional and Local Development Project (RLDP, FY 07, US$50.5 million). The latter would aim at triggering broad sectoral reform, and would be complementary to the CHTUDP. Rutionalefor Bank Irwohwnent 15. GoJ's National Agenda (outlined in paragraph 17 below) provides the framework for the Kingdom's economic, social, political and institutional development for the 2006-20 15 period. It also provides the point o f departure for the Bank's current Country Assistance Strategy (CAS)". Inresponse to the Agenda, the Bank's planned support to Jordan over the next 4-5 years is organized under four clusters: (i)strengthening the investment environment for skill-intensive and knowledge-based economy; (ii)supporting localdevelopmentthroughincreasedaccesstoservicesandeconomic opportunities; (iii) reforming social protection and expanding inclusion; and (iv) restructuring public expenditure and supporting public sector reforms. CHTUDPstrongly supports the CAS. Inparticular, it would support: (a) cluster 2 by assisting GoJto harness its considerable local cultural hentage resources for national tourism development, and for local economic revitalization and job creation; and (b) cluster 4 by piloting a program to assist GoJ to improve local financial management and revenue mobilization in the selected project municipalities. 16. Inaddition to the above, there are significant sector specific reasons for Bank involvement under CHTUDP. First, the Bank has considerable experience across the world and has had a long and successful history o f cooperation with the GoJ in the tounsm and urban sectors. This cooperation includes two tourism development projects (1976-81 and 1997-2005) that helped GoJ preserve and/or develop and major archeological and natural sites (Petra, Wadi Rum and the Dana Reserve). It also includes three urban development projects during the 1980-95 periodthat had very satisfactory outcomes; two municipal projects that established the Cities and Villages Development Bank (CVDB) (1980-1991); and a successful and largely urban housing finance and land development project (1996-2002). Second, during the last five years the Bank has accumulated significant experience and knowledge inthe cultural tourism sector, and has also carried out important economic and technical studies work inmunicipal sector. Thus, the Bank is well placed to assist GoJ. Further, other donors, notably the US and the European Union (EU), have either chosen to focus their sector support mainly on broad but complementary private sector and institutional initiatives (SIYAHA in the case o f the US) or on narrow specific issues such site presentation and management (Um Qais in the case o f the EU). Thus, there is an urgent need to address 10 Country AssistanceStrategy for The Hashemite Kingdomof Jordan, FY 2006-10, World Bank, April 6,2006. 4 key tourism related infrastructure and urban management issues and here the Bank has a considerable comparative advantage. Finally, GoJ has requested the Bank to use its considerable technical and financial resources to assist the Kingdom in developing these key sectors o f the economy and Jordanian social and economic life. 2. Higher LevelObjectivesto Which the ProjectContributes 17. By supporting tourism, development in the secondary cities CHTUDP would strongly support GoJ's objectives o fregionally balanced growth andjob creation through local economic development and income generation, as well as themes 1-6 and 8 o f the National Agenda. GoJ's National Agenda aims "to achieve sustainable development through a transformation program that puts Jordan on a trajectory path toward fast economic growth and greater social inclusion"". It also sets ambitious targets for the coming decade, intwo "transformation" phases: Phase I(2007- 12): Employment Opportunities For All; and Phase I1(2013-17): UpgradeAnd Strengthen TheIndustrial Base. (A further but so far underdeveloped phase is envisaged beyond 2017 that would secure Jordan's transformation into a world-class competitor in the knowledge economy.) The Agenda is structured around eight themes: (i)political development and inclusion; (ii) justice and legislation; (iii)investment development; (iv) financial services and fiscal reform; (v) employment support and vocational training; (vi) social welfare; (vii) education, higher education, scientific research and innovation; and (viii) infrastructure upgrade. Prominent among the key sector specific initiatives in the investment development program is the execution o f the NTS which provides the developmental context and strategic framework for CHTUDP. 18. The Special Issue of' Unemployment and Poverty: These interconnected issues are highlighted in the Agenda, as well as in the Bank's assistance program; and while CHTUDP is not intended to be an unemployment or poverty alleviation project, it can make a modest contribution in this critical area. Recent Bank reviews'* have shown that poverty is closely linked to unemployment, and that Jordanian economy seems to be generating sufficient jobs to accommodate the growth o f the labor force. However, these jobs are either concentrated inAmman or are lower-level jobs that Jordanians are reluctant to do- preferring to leave the latter to migrant workers from the region and move to the Gulf in search o f white- collar employment. CHTUDP would help address this problem by generating a number o f attractive middle- and lower-level jobs outside of Amman. B. PROJECTDESCRIPTION 1. LendingInstrument 19. The Borrower has selected a Sector Investment Fixed Spread Loan (FSL) with level repayments. The Loan has a 17-year maturity, including a five-year grace period. The currency o f the Loan will be denominated inU S Dollars. 2. [IfApplicable]ProgramObjectiveandPhases: N o t applicable. 3. ProjectDevelopmentObjective(s)and Key Indicators 20. The objectives o f the project are to contribute to: (a) tourism development in the five key historically and culturally important cities o f Jerash, Karak, Madaba, Salt and Ajloun, and thereby create the conditions for local economic development; and (b) consolidation o f the tourism industry in Petra, Jordan's premier tourism asset and destination. '* World " NationalAgenda (seefootnote 1page 1). Bank (2004), Jordan Poverty Assessment; and draft Concept Notefor ESW Report on Jordan: Investing in Jobs, April 2006. 5 21. These objectives would be pursued by: (a). the physical and economic revitalization o f the historic cores, and the preseniation and regeneration o f cultural (natural) landscapes (Ajloun only); (b). the establishment o f (i)Municipal Revitalization Pacts between central and local government (MOTA,M o M A and the PMs)aimed at improving urbanmanagement, financial capacity, and financial autonomy: and (ii) Strategic Partnerships for local development between the city authorities, private sector and community groups aimed at mobilizing local entrepreneurial, managerial and financial resources and capacities; and (c). the construction and operation o f a new Visitors Center at the Petra Sanctuary. 22. Achievement o f the project's development objectives would be measured by the following key outcome indicators: (a) increased tourist visitation, stay and spends inthe cores o f the project cities; (b) increased economic activity as indicated by increased value added in the city centers (particularly intourism-related activities and businesses); and (c) established, efficient, informative and culturally sensitive new Visitors Center operating in the Petra sanctuary. 23. While key results indicators would include: (a) improved cultural heritage asset preservation as indicated by (i) percentage o f targeted historic buildings protected in the core, and when feasible, adaptively reused; and (ii) improved cultural heritage asset protection through the implementation o f city core regulations; (b) improved management and maintenance ofthe key public assets and systems inthe city cores as indicated, among other dimension, by (i)improved maintenance and garbage collection services, and (ii) by safer and more efficient pedestrian and vehicular circulation; (c) improved municipal finances as indicated by improved and increased collection o f local revenues--particular property and business taxes; and (d) timely completion ofthe Visitors Center at the Petra Sanctuary. Project Components 24. CHTUDP would consist o f four main components, as follows: 0 Component 1; Revitalization of Historic City Centers, Urban Infrastructure Improvements and Cultural Landscapes Regeneration. This component focuses on activities in and around the historic cores o f Jerash, Karak, Madaba, Salt and Ajloun (the Project Municipalities - PMs), and includes: (a) upgrading o f and improvements to street networks and allied public spaces; (b) rehabilitation and upgrading o f pivotal urban spaces; (c) rehabilitation o f faqades and landscaping and furnishing o f primary streets; (d) renovation and preservation o f selected heritage buildings through adaptive reuse - including a pilot Historic Preservation Fund for privately owned historic buildings inSalt M~nicipality;'~(e) traffic and parlung management; (6) constructionhehabilitation o f essential municipal buildings and facilities; (0regeneration o f cultural (natural) landscapes (Ajloun only); and (8) design and supervision services. P Component 2: Petra Gateway. The component supports: (a) the construction of a new Visitors Center at the Petra Sanctuary including essential equipment and furnishing; and (b) consultant services and training for detailed design engineering and supervision, and for organization and management. 13Includingsupport for a HeritageRehabilitation Fund in Salt Municipality only. 6 P Component 3: Local Economic Development. This component supports financial and technical assistance to local entrepreneurs, investors and community groups to encourage the creation and/or expansion o f environmentally appropriate and financially viable small and medium enterprises in the civic core areas. It includes: (a) cultural heritage and tourism related business promotion and development grants; (b) business-related workshops and training; and (c) program development and management consultancy services. The component will be initiated at Madaba with the assistance o f consultants funded by the U S A I D supported SIYAHA Project. It would subsequently be extended to all Project Municipalities. 0 Component 4: Capacity Building and Project Management. This component supports capacity building and project management activities, including: (a) Municipal Capacity Building, comprising: (i)improved promotion, management, maintenance and development control o f historic centers by the PMs, as agreed between MoTA, MoMA and the PMs, and documented inMunicipal Revitalization Pacts; (ii) formation and operation o f local Strategic Partnerships by PMs and local community and business groups; and (iii)incentives in the form o f additional core infrastructure funding based on PM performance under Municipal Revitalization Pacts; and (b) Project Management and Institutional Support, compnsing: (1) project management, monitoring, reporting and evaluation by MoTA, particularly MOTA'S Technical Development Department (TDD); and (ii) institutional support for MoTA. 25. The detailed project description i s presented in Annex 4, the detailed cost in Annex 5, and the implementation arrangements and schedule inAnnex 6. 26. The estimated implementation period i s five years. The Project would be implemented between March 31, 2007 and March 31, 2012. The total project cost i s estimated at around US$ 71.08 million. The Bank would provide a Loan o f about US$ 56 million. The project estimated cost and financing plan are provided inthe tables below: Project Estimated Cost (US$ million) 1. Revitalizationof Historic City Centers, Urban 1 50.26 1 55.15 177.6% 1 47.14 184.2% 1 Infrastructure Improvements and Cultural Landscapes Regeneration 2. Petra Gateway I 5.50 6.05 8.5% 5.17 9.2% I I ~ 3. Support to Local Economic Development Initiatives 1.15 II 1.16 II1.6% 11 1.15 II2.1% 11 /TotalProject Cost I 71.08 1100% I 56.00 I 100% I 7 Project Financing Plan (US$ million) 4. Capacity Building andProjectManagement 0.31 2.55 2.86 Total Cost (excl. LandAcquisition, Expropriation& ResettlementCosts) 9.22 56.00 65.22 LandAcquisition, ExpropriationandResettlementCosts 5.86 5.86 FrontEndFee(1% ofWB Loan) (waived) Total Project Cost 15.08 56.00 71.OS 21.2% 78.8% 100% 4. Lessons Learned and Reflected in the Project Design 27. Several lessons have been learned from STDP and other regional projects, and these have been applied in the developing CHTUDP. Some like the importance o f allowing sufficient time for public decision making, are mundane but worth repeating. More substantive though, are the following: (a). Sufficiently understanding the complexity of the local environment, and making adequate allowancesfor this complexity in project design and during implementation: This lesson has already been partly addressed through detailed studies o f and discussions with the local cOmmunities and potential implementing agencies dunng project preparation. They will continue to be addressed throughout the life o f the project through Strategic Partnerships .with the community and the Municipality Revitalization Pacts. These provide vehicles for community participation and for continuous monitoring, review and adjustments (if necessary) over the life o f the project. (b). Accurately gauging the capacity of key participating agencies and their commitment to core project objectives both prior to and during project implementation: Lesson 2 has also been partly addressed by strengthening MOTA'Scapacity under STDP. It will continue to be addressed under CHTUDP through the Municipal Revitalization Pacts and by further technical assistance provisions that will support capacity building at MoTA. Complementary supporting measures are also expected to be taken at M o M A and the PMs under the proposed and Bank-supported RLDP. (c). Countering parochial local interests by widening the support base: This lesson is being addressed by M o T A through mobilizing expatriate and other notables-up to the level o f the monarchy-in providing support for difficult decisions on issues that cannot be resolved at the local level due to narrow and/or conflicting local interests. (d). Claribing commitment and responsibility, and ensuring adequate resources and capacity: This is particularly relevant with respect to the proposed Petra Gateway Component. Under STDP, attempts to improve site management and maintenance were abortive due partly to a lack o f capacity and inadequate funding at the responsible agencies. The situation has since been complicated by the competing claims o f other agencies--those havingjunsdiction over the wider Petra area (outside the Park). (e). Developing an adequate Monitoring and Evaluation (M&E) system at theproject preparation stage. The lack o f a well structured M&E systeminbuilt inthe project design was recognized by the Borrower as a key weakness o fthe Second Jordan Tourism Development project. This weakness left the implementing team without monitoring and reporting tools, at times making supervision and timely identification o f problems and solutions difficult during implementation. The project will make clear provision for the design and implementation o f an integrated M&E system as part o f the Capacity Strengthening o f implementing agency. 8 5. Alternatives ConsideredandReasons for Rejection 28. Several alternatives were examined, however only five were reviewed in depth. These are outlined below. RejectedAlternatives (a). A standalone tourismproject: This was rejected because experience and logic indicated first that successful tourism in the secondary cities depended on the strong support o f the local community, and its willingness to protect and enhance the historical, cultural and natural assets that anchor the tourism product. (b). A standalone municipal project: This was rejected as likely to be so burdened with sector reform and narrow infrastructure, service delivery and municipal capacity building concerns that the cntical tourism development issues would be negatively affected. Exacerbating factors were that policies in the urban sector were not yet clearly developed and municipal institutions were relatively weak. (c). An evenly balanced tourism/urbzzn project with implementation responsibilities shared equally between the tourism and municipalities ministries. This was rejected as a recipe for paralysis as ministries jockeyed for power and issues of prominence. Moreover, as already noted, the municipal sector in Jordan i s still evolving after amalgamation and the Bank- funded Regional and Local Development Project will focus specifically on providing support to strengthen the overall municipal sector. (d). A pure "cultural heritage-driven " project; While CHTUDP mobilizes cultural hentage assets and seeks to protect and enhance them, it IS not a cultural heritage project per se. Instead, cultural heritage i s used as a resource for tourism development, with benefits to both sectors. A purely "cultural heritage" project was rejected because it probably would have not been fully sustainable, particularly economically, and because several policy issues remain to be sorted out in this sector, not the least o f which is the capacity o f the Department o f Antiquities. ChosenAlternative 29. A tourism and cultural heritage-driven and urban centered revitalization project: This alternative was deemed the most appropriate based on the primary focus o f CHTUDP (tourism development), the recent successful experience with M o T A in implementing the STDP, and on MOTA'Scurrent strong leadership and capacity. The set o f cities was determined largely on strategic grounds based on the 1996 JICA analysis and the 2004 N T S recommendations (see Annex l), but also on the pragmatic grounds o f M o T A capacity, city responsiveness, and readiness for implementation. Since the critical tounsm assets often lay in the historical core and often next to the existing business districts o f the PMs, it was decided to limit physical interventions to these cores and to allied interventions that would support the development o f the cores while yielding other potentially significant benefits to the community as a whole. Further, it was decided that, however desirable, employment generation was not the key objective, and that any initiatives in this area had to be directly linked to the central issue o f sustaining the development o f the touristic or historical assets. Finally, at the specific request of GoJ, the alternative includes the construction and operation o f a new Visitors Center at the Petra Sanctuary. This Center was designed but not constructed under STDP, and thus should be considered as the strategic completion o f one o f its key element. 9 C. IMPLEMENTATION 1. PartnershipArrangements (if applicable) 30. No formal partnerships are currently planned. However, an informal partnership will be entered into between M o T A and USAID with respect to ensuring close coordination with the SIYAHA project; particularly with regard to SIYAHA's current private sector business development programs in Madaba, and their proposed business development initiatives in other PMs. 2. InstitutionalandImplementationArrangements 31. Primary responsibility for project implementation would reside with MOTA-particularly with its Technical Development Department (TDD), but the Department o f Antiquities (DoA) and the Ministryo f Municipal Affairs (MoMA) will have a key supporting role on matters respectively related to cultural heritage preservation and the PMs. The Ministry o f Planning (MoPIC), as the key representative o f GoJ on developmental matters would play an important guiding, monitonng and policy support role. 32. Higher-level coordination would be maintained through an inter-ministerial Project Steering Committee (PSC) comprising the Secretary Generals or their nominees o f MoTA, M o M A , MoPIC and DoA, as well as the Director o f the Jordan Tourist Board ( J T B h t h e latter as a key actor in the tourism sector. PSC would meet quarterly or as needed to provlde guidance and solve problems. 33. Keyroles would be played by the PMs and local community groups. Inparticular, PMs would be responsible for providing support to M o T A in implementing the project at the local level. The instrument for municipality participation would be the Municipal Revitalization Pacts agreed between the PMs, MoTA, MoMA, MoPIC and the Governorate (see appendix 1 o f Annex 6). In order to ensure effective local participation, the PMs would establish and maintain broadly based Community Partnerships comprised o f key representatives o f local civil society. These Partnerships would elect a chairman from among their membership, and would meet quarterly or as necessary to review local pnorities and progress, and to provide guidance to the PMs and M o T A o n the project and, where relevant, solving problems encountered. Local level coordination would be assured through Municipality Program Coordination Committees (MPCC) comprising the respective mayors and provincial governors, senior representatives o f M o T A and representatives o f local civil society. MPCC would meet monthly or as necessary to review progress and solve problems, and would be chaired by the Governor o f the Province. All of the above implementation structures and arrangements would be supported under the project. Particular support would be given to TDD and the PMs to strengthen their capacity to discharge their respective responsibilities effectively. Details o f the implementation arrangements, including an organogram and project schedule, are presentedinAnnex 6. 3. Monitoringand Evaluationof OutcomeslResults 34. The project will make clear provision for the design and implementation o f an integrated Monitoring and Evaluation (M&E) system as part o f the Capacity Strengthening o f the implementing agency. Accordingly, Component 4 will cover the costs o f specialized consultancy services aimed at designing and managing the M&E system for the project over the five years o f implementation. In particular, the Project would support the creation of an integrated Monitonng and Evaluation system worlung at different levels (linlung MoTA, the Municipalities and M o M A ) and serving different monitoring purposes. In particular, it will be ,expected to monitor (without being limited to): (a) the progress o f work on the ground, ensuring timely identification of problems and bottlenecks, (b) performance o f project towards the achievement o f the main project development indicators and related intermediary ones; and (c) regular and specific monitoring o f the implementation of the Municipal Revitalization Pacts in each municipality, identifying the most appropriate indicators, triggers and targets to assess municipal performance, compliance and success. 10 35. While MOTA-TDDwill maintain the data systems more specific to project implementation, the project municipalities would be expected to own and manage the municipal-level component o f the Information System. The latter will include core baseline data from municipalities covering key areas o f municipal management, including (a) municipal budget information, (b) infrastructure conditions (inventory) and needs at the city-core level, (c) performance o f city-core management units, and (d) socio-economic and environmental data. The Municipal Integrated Management Information System (MIS) would be expected to continue to function beyond the life o f the project, providing a core municipalM&E system that over time could be expanded to cover the wider municipal territory. 4. Sustainability 36. From the beginning, the project has been designed with sustainability in mind, particularly so given the very recent experience o f STDP. Here, the physical components were very effectively implemented - e v e n if a bit late. However, sustainability was threatened by two main problems: a lack o f an in-depth understanding o f the complexities of the local social and political situation; a resulting lack o f consensus on institutional, maintenance and developmental objectives (particularly at Petra); and the weakness o f local institutions, municipal as well as national. These problems have been specifically addressed under this project through several actions and proposed safeguards, including participatory preparation and the establishment o f Municipal Revitalization Pacts and Community Partnerships (see discussion in sections "B4", "B.5 and "C2" above). These are reinforced by the establishment o f the system o f monitoring indicators and the employment o f consultants to undertake baseline and annual performance surveys. The latter initiatives will provide M o T A and the Bank with timely and useful information to manage the project and take early remedial action when necessary to achieve project objectives. 37. A number o f other problems could still threaten sustainability however. These include a lack o f local leadership; a lack o f attention to cost recovery and maintenance; and regional political instability. All are difficult to manage. However, so far the leadership ofmost o fthe PMs and key local stakeholders have shown considerable enthusiasm for the project. Also, in the case o f Salt the King and several local notables are personally supporting the initiative, and attempts will be made to widen this support to cover the other PMs. Further, through SIYAHA and the LED component a major effort will be made to engage the local business leadership in economically sustainable city core development. With respect to cost recovery and maintenance, under the Municipal Revitalization Pacts PMs will be required and assisted where necessary to mobilize local revenues and undertake essential maintenance o f the city cores as well as to contract out as many services as possible to the private sector. In case of the new Petra Visitors Center, a share o f the gate receipts would be earmarked for the Center to ensure the effective management and maintenance. Finally, regional political instability could potentially destroy all hope o f sustainability. All is not lost even here however, as efforts are already underway to encourage less sensitive and potentially lucrative regional (Gulf) tourism to help cushionthe blow. 5. Critical Risks andPossibleControversialAspects 38. The critical risks, their evaluation and mitigation measures are summarized inthe table below: 0 Implementationproves M - ProjectdesignhastakenMOTA'Scapacitycarehlly intoconsideration. difficult due to the - MOTA-TDDhas been implementing similar projects, including inthe relatively complex and project cities and has gained experience incontract management. integratednature of city - MOTA-TDDwill be further supported by trainmg and recruitment of center. competent consultants. - Progresswillbeclosely monitoredbythe MoTA andthe Bankandthe scope of work adjusted as necessary to achieve project objectives. 0 The projectprocurement N - The number of contracts per city would be mimmized, and qualified is slowed down by the supervision consultants will be employed to assure quality and number o f relatively timeliness as well as flexibility to respond to the situation on the ground. small contracts in a dense - MOTA-TDDcaoacitvandmonitorine mechanismswillbereinforcedas 11 Rating Mitigation Measures area. - necessarv to coDe with the volume o f work. 1 Insufficient attention to M - These risks, which matenalized under STDP, would be rmtigated by management, operations consultancy services to develop appropriate management systems and and maintenance at the training programs for management and staff, as well as by requiring GoJ Petra Visitors Center. to earmark a sufficient share o f gate receipts to operations and maintenance o f the Center. IThelocalfinancialand M - UnderthesignedMunicipalRevitalizationPacts: managerialresources and - The tax collection rates that PM can reasonably achieve will be practices do not ensure estimated, and annual targets set. adequate operation and maintenance o fthe new - Each Project Municipality (PM) will be required and supported to municipal assets inthe increase the mobilization and rationalize the use o f local resources; rehabilitated city cores. - Performance under the Municipal Revitalization Pacts will be closely monitored through annual surveys by independent consultants - MoTA,MoMAandtheBankwillconsultondeviationfromagreements, and P Mresources adjusted up or down based on achievements. Municioalitv and Commur v Commitment, Participation and Allocation of Benefits IBecauseofweakmu- M - City programshavebeenelaborated inaparticipatory way withmajor nicipal leadership and local stakeholders; capacity, inadequate - MoTA has taken the lead indeveloping close political and technical social consultation cooperation with the project municipalities and their core staff, and are practices and complex expected to continue this leadership; competing interests, - Municipalityleadership and initiative will berewarded with additional sustained municipal and financial resources under the Municipal Revitalization Pacts; community support for - LocalparticipationwillbesupportedunderCommunityPartnerships. the project is not - Higher-level socialpoliticalsupport isbeingmobilizedbyMoTA and forthcoming. Project Mmcipalities through national notables; - Progress towards objectives would be closely monitored by annual surveys. 1 Capture o fproject M - Public scrutiny through CommunityPartnerships wouldhelprmnimize benefits by narrow this tendency sectional interests. Private Sector Investment zrticipi ion 1 The private sector proves M - SIYAHA has the skills, contacts, resources andpolitical and financial unwilling to participate support to effectively mobilize the private sector under the LED or investment in component, and close consultation will be maintained between M o T A revitalizing the project and SIYAHA. zone. - MoTA and the Bank will monitor private sector responsiveness very closely through annual surveys, and will consult on the adjustments that have to be made to the scope and content o f interventions ineach PM. Political 1 The spillovers from H - MoTA is currently taking steps through SIYAHA to mobilize quick neighboring conflicts public information responses aimed at minimizingdamage and reducing deter tourists from the "fear factor". visiting Jordan. - MoTA is also diversifying visitor sources by encouragingless volatile regional (Gulf) and local tounsm that can help absorb the "shock" inthe event o f regional conflict. herall rating [ M Ratings: H= High; M= Moderate; N= Negligible 39. While the political risks are high, the overall risk for the project i s moderate, particularly as the political risk can be partially offset by market diversification towards less sensitive regional Gulf tourism, a process that is already well underway. 12 6. LoanConditionsand Covenants 40. The following disbursement conditions will apply to the project: (a) Petra Gateway Component. No withdrawals shall be made in respect o f payments made for expenditures under the component 2 (Petra Gateway), until evidence, satisfactory to the Bank, has been provided showing that (i)the Petra Archaeological Park is under the sole jurisdiction o f the Department o f Antiquities; (ii) the Petra Archaeological Park i s managed by a dedicated entity (the Petra Management Entity) operating under oversight o f the Department of Antiquities; and (iii) that the Petra Management Entity has been allocated a secure, predictable and sufficient operation and maintenance budget funded through earmarkmg a share o f the Petra gate revenues. (b) Local Economic Development Grants. No withdrawals shall be made inrespect o f payments made for expenditures under the component 3 (Local Economic Development), until eligibility criteria, a selection process, and terms and conditions for Grants ,all satisfactory to the Bank, have been developed and adopted by the Borrower. (c) Salt Heritage Fund. No withdrawals shall be made in respect o f payments for expenditures under the Salt Heritage Fund sub-component until documentation, satisfactory to the Bank, has been provided evidencing that (i) the Salt Heritage Fund has been established and (ii) eligibility criteria, a selection process, and terms and conditions for Grants, all satisfactory to the Bank, have been developed and adopted by the Salt Heritage Fund. 41. Implementation Capacity. The Borrower shall at all times maintain the Technical Development Department o f the Ministry o f Tourism and Antiquities (MOTA-TDD),with adequate functions, staffing and resources satisfactory to the Bank. The MOTA-TDDshall be responsible for overall coordination o f the Project including overseeing the implementation o f the Project, the procurement and financial processes under the Project and the preparationo f Project reports. 42. Dated covenants related to preservation of natural landscapes and historic city cores: The Borrower shall ensure that, by n o later than December 31, 2008: (a) each Project Municipality has obtained all necessary detailed special building and zoning regulations, each valid and enforceable, for the purpose o f preservation o f its historic city core; and (b) in respect o f Ajloun, an enforceable master plan together with all applicable land use, zoning and buildingregulations has been approved defining both (i) the boundaries o f the protected landscape and (ii)the containment o f the established settlements within the protected landscape, for the purpose o f declaring its natural landscape a protected area. 43. Mid-Term Review: The Borrower will: (a) furnish to the Bank, on or about June 30, 2009 a Mid-Term Review Report: (i) integrating the results o f the monitoring and evaluation activities performed, and progress achieved since commencement of implementation; and (ii) forth the measures recommended setting to ensure satisfactory project implementation and achievement o f the project objectives for the remainder o ftheproject's implementation; and (b) review with the Bank, by October 31,2009, or such later date as the Bank shall request, the Mid-Term Review Report, and, thereafter, take all measures required to ensure the satisfactory completion o f the Project and the achievement o f the Project objectives, based on the conclusions and recommendations o f the Mid-Term Review Report and the Bank's views on the matter. 13 D. APPRAISAL SUMMARY 1. Economic and FinancialAnalyses 44. A cost effectiveness methodology has beenused for the economic analysis. Cost-benefit analysis i s not appropnate for this project, as most o f its benefits do not lend themselves easily to being assigned a precise monetary value. For example, increased tourist revenue may be a benefit o f the project, but to what extent increased tourism activity i s directly a result o f the project's investments i s very difficult to document. This would require a contingent valuation (CV) analysis o f the benefits, however this technique would be unreliable in the context o f the volatile Middle East environment which experiences significant changes in tourist numbers from year to year. Additionally, some project sites (i.e., Aljoun and Salt) currently attract few tourists and interest despite their cultural importance, again making a C V methodology inappropriate. 45. Urban regeneration projects can sometimes be evaluated by tracking increased land and/or rental values, or the increased value o f direct and indirect jobs, created as a result o f the project. However, in the context o f Jordan, the necessary data is not available. For example, as in many other countries, the systematic and consistent administration o f property taxes is an on-going effort by the Government. As one would expect, real estate and labor markets in these historical areas are also not well documented. Therefore, there i s no realistic way to predict the increase in monetary flows directly as a result o f the project. At the same time, it i sjust as difficult to estimate the decrease ineconomic activity ifthe project i s not implemented. 46. A limitednumber o f project supported investments will produce a revenue stream. These sub- projects are predominately related to planned urban parking structures. During project implementation, these revenues and their associated externalities will be tracked and an evaluation made as to the validity o f adopting a cost benefit approach for these types o f investments. This information will then be used duringthe preparation o f similar projects inthe future. 47. To assess the financial capacity o f the concerned municipalities to sustain such investments - regardless of the conventional expenditure assignment amongst government tiers in Jordan - the associated outlays were compared to the financial resources o f the municipalities. In terms o f financing requirements, the project's investments represent a financing envelope that exceeds by far the funding capabilities o f individual municipalities and would thus fall outside the scope of local government responsibility. 48. Over the 5-year implementation period, the Government (including project municipalities) will have to provide US$15.08 million in counterpart hnds under the Project. This level o f investment is less than one percent o f the country's 2005 gross government domestic investment (about US$890 million) and should not pose any overall fiscal constraint. There will be a slight increase inrecurrent expenditures resulting from all new or rehabilitated infrastructure under the Project. These are estimated at about US$l-2 million per year. 49. Repayment o f the loan from IBRD (US$56 million) i s the responsibility o f the Ministry of Finance and there will be no pass-through o f this obligation to another entity. 2. Technical 50. Given its nature and interventions aimed at revitalizing densely built-up and populated histonc city cores, the project presents a series o f specific technical challenges. Accordingly, appropriate solutions and mitigation measures were included in the project design. In particular, in order to ensure highest level o f quality o f the proposed investments, selected consulting firms with proved international expenence in urban renewal were hired under a PHRD grant to carry out feasibility studies and detailed designs. In addition, detailed topographical surveys o f the historic cores o f the project municipalities 14 were commissioned by MOTA-TDD.Such surveys also included detailed informationon land ownership, underground infrastructures and use o f land and buildings. 51. The proposed investments for each targeted city also underwent numerous rounds o f reviews and iterations, involving in the discussion both the technical staff o f M o T A and the municipalities, including the key stakeholders in each city. As an output o f this reviews, municipalities also agreed to support the project in solving some o f the most complex technical challenges, like the one o f workmg in the very difficult environment o f the densely populated historic core, which requires effective site coordination to reduce to the minimumdisruption o f daily activities. 52. The key technical challenges and related solutions adopted by the project are: -Detailing of worksandfinishing. It is very important for the esthetical valuelimage ofthe project and the durability o f the investments that the detailing work and finishing are well designed and executed. Particular attention was paid during preparation to the detailed design for the treatment o f paving serving different functions (e.g. pedestrian, squares, transit areas, parking, road crossing, facades treatment, and signage). - Quality of constructionand urbanpxtures. Inorder to ensure durability ofinvestments, itis also very important that the quality o f works and materials are o f high standards. Inaddition, with particular regard to landscaping and streetscaping, urban fixtures were selected to meet the highest quality and durability standards, together with high esthetical value. - Closenessofproject sitestomonumentsandhistoricbuildings. Inalltheprojectmunicipalities the project sites are located in the historic core o f the cities, generally inproximity o f historic buildings andor monuments. In order to avoid damaging such structures during implementation, the project team will work in close collaboration with the Department o f Antiquities (DoA) to ensure the best knowledge o f the historic site and expert supervision duringdemolition, construction and renovation works. -High density of the historic core and related d@cult workingconditions. Appropnate and well planned sequencing o f works and management of the building sites will ensure the reduction to the minimum o f the disruption to daily activities and businesses in the densely populated areas o f the historic cores. This will be particular important in the case o f the street upgrading, when alternative routes and accesses to shops and residences will have to be planned and organized. The PMs will play a key role in discussing these implementation measures with local stakeholders. 3. Fiduciary Procurement 53. The Ministry o f Tourism and Antiquities will be responsible for procurement activities associated with the project. The Technical Development Department (TDD) at M o T A will have the main responsibility for the management of the procurement process for all the activities under the project. The overall procurement capacity o f the implementing agency for handling the procurement and contracts management i s adequate for the project purposes. 54. Procurement for this project will be carried out inaccordance with the World Bank's Guidelines: Procurement under IBRD Loans and IDA Credits, dated M a y 2004, Guidelines: Selection and Employment of Consultants by World Bank Borrowers, dated May 2004, and the provisions stipulated in the Loan Agreement. For each contract to be financed by the Loan, the procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are reflected in the Procurement Plan (PP). The PP will be updated, as required, to reflect the actual project implementation needs and improvements in institutional capacity. 15 Financial Management 55. The MOTA-TDDwill undertake project financial management, accounting and reporting functions, including the generation o f the quarterly Financial Monitoring Reports (FMRs). Specific procedures for flow o f funds and information are detailed in the Project Implementation Plan (PIP). The MoPIC, among other supervisory and monitonng functions, approves annual budgets and makes counterpart funds available for project implementation. MoPIC will make Loan proceeds and the counterpart funds available to MOTA 56. The TDD will issue financial reports on sources and uses o f funds, contracts expenditures as well as uses o f funds by activity. These reports which will be required by the project's loan agreement, will be submitted to the Bank one month following quarter end starting from the quarter where the first loan disbursement took place. The formats and content o f these financial reports were agreed during negotiations and are included inthe PIP. 57. Loan proceeds, which will be disbursed in accordance with the Bank's disbursement guidelines as outlined in the Disbursement Handbook, will be used to finance project activities through the conventional disbursement procedures currently in use, including direct payments, reimbursement and replenishment applications and special commitments, as warranted. The Project's financial statements will be audited annually by an external independent auditor, acceptable to the Bank, and in accordance with internationally accepted auditing standards. MOTA-TDDwill submit annual audit reports to the Bank no later than six months following the close o f each fiscal year subject to an audit. Terms o f Reference for the audit will be prepared and submitted for the Bank's no objection, n o later than six months prior to the end o f each fiscal year. Audit costs will not be financed by the Bank Loan. 4. Social 58. Despite several local particularities, PMs appear to have a similar range o f key stakeholders. They include: (a) several dominant or founding families; (b) first and second generation rural emigrants; (c) professionals and the private businesspersons; (d) w o m e n a n d youth; (e) populations o f non- Jordanian ongin; (0 commuting and transitory populations; and (g) a wide range of potenbal institutional stakeholders. This mix results in a wide range o f competing and sometimes conflicting interests and mandates. However, the groups seem to be able to cooperate effectively at the municipal level-resulting ina fair degree of social stability but also considerable conservatism in some areas o f social life. From this, several generic social nsks arise however, that could have a negative impact on CHTUDP: capture o f benefits by particular social groups; underutilization o f the newly developed public spaces; and insufficient transparency in the tourism industry. In response, a number o f mitigating measures are proposed under the project. These include the establishment o f Community Partnerships that can act as vehicles for local information and participation, and the systematic promotion o f a social dimension in each PM's Municipal Revitalization Pact. (See Annex 10.B for further details). 5. Environment: Environmental Category: B 59. Environmental assessment. A detailed environmental assessment, including impacts on physical cultural resources, public participation and socio-economic surveys, was prepared for the project in compliance with the provisions o f OP 4.01 and OP 4.11. The environmental assessment is available at the Info Shop, and at MOTA'Soffices inJordan for public consultation. 60. Environmental impacts. The Environmental Assessment found that the Project would result in an overall improvement in urban environmental quality as well as improvements to the quality o f life o f the residents in all project municipalities as a result o f (a) improved accessibility to the cities histonc cores; (b) improved social life inand around the old city centers; (c) improvedtraffic circulation incity centers; (d) conversion o f selected streets to pedestrian only; and (e) complementary improvements in parking management. The limited adverse environmental impacts are associated with the construction period. In addition, there would be temporary impacts associated with the re-routing o f traffic around the 16 construction areas during the rehabilitation activities in the various cities. These impacts will be minimized by careful planning o f the staging used for construction and rerouting o f traffic, and effective supervision o f construction activities. Since one o f the main objectives of the project i s the attraction o f a larger number o f visitors/tourists, it is expected that increased solid waste and wastewater generation rates will occur. While the additional rates are not significant to cause an environmental impact under normal conditions in a typical city, it should be noted that the existing solid waste and wastewater conditions in all involved cities require better management irrespective o f the CHTUD project. A technical assistance will be provided to the project municipalities to improve the performance o f their solid waste operations. 61. An Environmental Management Plan (EMP), includingmitigation and monitoring measures, has been prepared as an element o f the Project. The mitigation actions focus on environmental supervision o f the construction contractors, proper management o f traffic detours, and environmental protection during the construction phase. The monitonng plan provides for controlled air, noise, dust, and water measurements to be used as baseline and trend data to support management decisions. In addition, the project supports a training program in environmental management, which targets the needs o f national and local government officials, consulting firms, construction contractors, and local NGOs. Annex 10.A presents the Environmental Aspects and EMP, which will be monitored during supervision and evaluated at mid-term and upon project completion. 6. SafeguardPolicies SafeguardPoliciesTriggeredbythe Project Yes No Environmental Assessment (OP/BP/GP 4.01) X Natural Habitats (OPIBP 4.04) X Pest Management (OP 4.09) X Cultural Property (OP 4.11) X Involuntary Resettlement IOPA3P4.12) X Indigenous Peoples (OP 4.10) X Forests (OPIBP 4.36) X Safety o f Dams (OPBP 4.37) X Projects inDisputed Areas (OP/BP/GP 7.60) X Projects on International Waterways (OPIBPIGP 7.50) X 7. PolicyExceptions and Readiness 62. The Project will not necessitate exceptions to Bank policies, and will meet regional criteria on readiness for implementation. A procurement plan for each o f the components and a realistic and satisfactory Project Implementation Plan are available. Engineering designs and associated bid documents for the first year's activities, as well as cost estimates and detailed terms o f reference for consultancy services have been completed. 17 Annex 1: Country and Sector or ProgramBackground JORDAN: CULTURALHERITAGE,TOURISMAND URBANDEVELOPMENTPROJECT Annex 1.1: TourismSector StrategicFramework 1. Jordan has tremendous and in some ways unrivalled cultural heritage assets and natural landscapes. These provide a strong foundation for a vibrant tourist economy, and tourism has long been one o f the key pillars o f the Kingdom's development. In 2005 it accounted for 11percent o f GDP, and was Jordan's largest export sector, its second highest producer o f foreign exchange, and its fifth largest employer o f labor. The CHTUDP aims to support and further strengthen the sector. 2. The sector itself is a complex one that cannot be fully addressed within the compass o f this brief note. The focus here i s on the strategic issues inthe sector that provide the context and the framework for the proposed project. These issues include the urgent need to diversify the product, decentralize the industry, and spread the benefits of tourism more equitably across the Kingdom. Two documents are particularly relevant to this review: the 1996 Japan International Cooperation Agency (JICA) study; and the 2004 National Tourism Strategy (NTS). l4 These are briefly reviewed below. Issues and Challenges TheJICA Study 3. The comprehensive and well-regarded 1995 JICA study noted that tourism was then the top source o f foreign exchange in Jordan, then accounting for 13 percent o f the gross flow to the country including private and official transfers. The study also highlighted that: - Thevast majorityofinternational (excluding Gulf)tourist visitedJordanfor itshistoncal and cultural attractions. - The (then) current base-limited as it was mainly to history and culture-- was too narrow to provide a solid foundation for a growing and competitive industry. - Themainattractions (Petra andnaturallandscapesparticularly)were fragile, andtheir carrying capacity was limited even with significant investment intheir improvement. - Regional countries, notably Syria, were investingheavily intourism promotion, and Jordan would needto do likewise to retain its position inthe market. 4. After a lengthy review, JICA concluded that Jordan urgently needed to improve and diversify its tourism product as well as to strengthen its marketing and reform its tounsm institutions if it was to be competitive inthe region. The 2004 National Tourism Strategy" 5. The fundamentals o f the industry have not changed much in the 10 years since the JICA study was completed. The 2004 N T S also highlighted the fragility o f the sector. This was witnessed by the regional downturn in2000 following the outbreak of the Palestinian Intifada in September o f that year-- a downturn from which Jordan has now recovered. In addition, this fragility was further reflected in the world downturn following the September 11,2001 attack on the World Trade Center inthe US. l4 Annex drawsheavilyonthesetwo sources: 1) animportant This 1996 study by the Japan InternationalCooperation Agency (JICA) entitled: The Study on the Tourism Development Plan for the Hashemite Kingdom of Jordan, National Tourism Development Strategy and Policy, February 1996. 2) a set of documents prepared for GOJ as part of the National Tourism Strategy (NTS). The set includes: Jordan, National Tourism Strategy 2004-2010, A Sustainable Development Approach, revised Draft Using Value Chain Approach, March 18. 2004; Jordan, National Tourism Strategy 2004-2010; Jordan, National TourismStrategy 2004-2010, Action Plan; Tourism Policies, Booz, Allen Hamilton, Amman Jordan, October 2004. 15NTS ISoften used interchangeably in referring to the overall sector study as well as the specrfic 2006-2010 strategy. Usually, the meaningis clear from the context. However, where there is arisk of confusion, the specific 2004-2010strategy is generally referred to as the Strategy. 18 6. N T S further noted that the Kingdom's huge tounsm resources were not being effectively harnessed in support the national development effort, and that Jordan currently lags behind many o f its mainregional competitors in several areas. For example, dunng 1995-2002 period: -Nine (9) of the 30 top emerging destinations were in the Middle East and North Africa (MENA) region (all Arab), and Jordan was not among them; - JordanlaggedfarbehindEgypt,andconsiderablybehindUnitedArabEmiratesandBahrainin terms o f market share over the period, and Jordan's share had in fact fallen over the period; - Theregion's averageannualgrowthrateintouristamvalswas 12.2percentwhileJordan's was only about 5.8 percent-less than half o f the regional average; - The average annualrate growth intourismreceipts inJordan was 2.1 percent, considerably below the 6.5 percent regional average; and -While JordanearnedaboutUS$485 pertourist arrival (about theaverage for theregion), this was well below that o f Egypt and Lebanon, and less than a third o f Israel's. 7. Like JICA, NTS concluded that ifJordan was to maintain and enhance its competitive position in the region and realize the full benefits o f its tourism assets, it urgently needed to vastly improve marketing and product quality; diversify its product; undertake significant institutional and regulatory reforms; and mobilize private sector participation inthe development and management o f the sector. 8. Priority Challenges: NTS reviewed the several problems facing the sector, and highlighted the following as the most urgent: - CorrectingtheTourist"Fear Factor" - Adequately ResourcingtheSector - EstablishingEffectiveWorkingPartnerships - IncreasingVisitorSpending - Improving Access, Entry and Distribution - Improving the Scale and Deployment o f MarketingResources - ReducingOver-RelianceonTraditionalAttractions - MatchingRegionalCompetitorInvestment 9. To addressthese challenges and to better positionJordan as a world-class destination, NTS proposed that the Kingdom adopt a competitive comparative approach, one that sustains its current positive momentum and leverages its strengths in the fhture.I6 The details o f this approach were widely discussed among key stakeholders in2004, and formally adopted by GoJas the strategy for the sector. The Proposed2005-2010 Strategy 10. The key components o fthe Strategy are summarized below: Vision: Tourism is an essential and vibrant growth sector that will contribute to improving the long-term economc and social well-beingof Jordanians. Mission: Jordan will develop a sustainable tourism economy through a partnership o f government, the Jordan TourismBoard, the private sector, and civil society to expand employment, entrepreneurial opportunity, socialbenefits, industryprofits, and state revenue. Goal: Double Jordan's tourism economy by 2010 inreal terms. oIncrease tourism receipts from JD570m (US$807m) in2003 to JD1.3 (US$1.84) billion. by oIncrease tourism-supportedjobs from 40,791 in2003 to 91,719, thus creating over 51,000 jobs. 2010: oAchieve taxationyieldto the government ofmore thanJD455 million(US$637 million). l6Unlike previous initiatives which tended to focus mainly on comparative advantage, NTS adopts a modem value chain approach. This approach focuses on competitive positioning based on Jordan's competitive advantage that stresses positioning, marketing, product development and private sector participation in industry development. It also important to IS note that the final strategy emerged out ofwidespread discussionswith key Jordanian stakeholders during 2003 and2004. 19 Pillars: 11. The Strategy is founded on the following 5 pillar^:'^ (i)Strengthening Tourism Marketing: Enhancing Jordan's image: branding Jordan as boutique destmation; increasing arrivals ofhigh-yeld tounsts; maintaining position incurrent markets; and enhance market intelligence to identify future opportunities; (ii)Supporting Product Development and Competitiveness: Increasing vlsitor yield; enhancing competitive advantage; and diversifjmg tounsm products. (iii)Developing Human Resources: improving tourist services; increasing availability of human capital; and expanding employment opportunities. (iv) Providing an Efective Institutional and Regulatory Framework: Enhancing institutional capacity and legal support for tourism strategic objective; promoting private investment in the sector, including public-private partnerships in sector development and management; and rationalizing sector institutions. (v) Promoting Social Equity: Promoting social inclusiveness, income and employment opportunihes for local citizens and communities, and poverty alleviation; and minimizing negative social impacts Investment Requirements: 12. The Strategy envisages considerable investment in international marketing by both the public and private sectors and inhuman resource development over the next 10 years, as follows: International Marketing (JD mllion) 1. PublicSector 9.6 14.1 15.9 18.0 20.3 23.0 26.0 2. Private Sector 2.4 3.5 3.9 4.5 5.1 5.7 6.5 Total 12.0 17.6 19.8 22.5 25.4 28.7 32.5 Product Innovationand Human 9.6 14.1 15.9 18.0 20.3 23.0 26.0 Resource DeveloDment (JDm) SomeImportant Implementation Issues 13. In addition to the above, N T S identified the following among the key issues to be addressed and approaches to be adopted by GoJ inorder to ensure the successful implementation o fthe Strategy: General: - The value chain approach should be used to develop Jordan as a high-value boutique destination; - Visitor expenditure should be the measure for assessing economic impact. This would include the length o f stay, as well as money spent; - The current disconnect between tourism marketing and product development should be corrected. This may require institutional changes and other linkages to achieve a viable result; - The marketingbudget from government should be increasedto level that isrealistic for producing world-class work, and then present it to the government for approval; - TheexistingMOTA-basedtravelstatisticsinformationsystemshouldbeupgraded,basedon international standards for data collection and use. %s is necessary for ensunng reliable and timely data for sector planning and management. l7The NTS documents refer to 4 pillars, but separately stress the importance of Social Equity which is included here as an implicit Shpillar. 20 . Institutional: - Jordan`s legal and regulatory framework should be reviewed and benchmark it against international best practice. Recommendations for amendments and reform should be developed; - The mandate of the National Tourism Council (NTC) should be revised to include facilitation o f policy dialogue between the public and private sectors and assisting with policy advocacy, monitoring, and accountability functions. it is essential to prioritize concerns related to the preservation and conservation o f the environment and antiquities, as they are tourism's underlyingresources; -JTB should be transformed into a private sector-oriented institution as opposed to a government body. Legal support should be provided to study the issue o f JTB status to ensure its pnvate-sector orientation and identify and assess legal and best practice evidence to support this as best practice; -Technical assistance and grants should be considered to support emerging models for public-private partnerships such as the Jordan Tourist Board (JTB), Amman Tourism and Hospitality College, the Jordan Inbound Tour Operators Association (JITOAI, and other tourism associations representing private sector membership. 14. Taken as a whole then, N T S lays out a broad and very ambitious strategy and agenda for change inthe tounsm sector. The Strategy is underpinnedby analyses in a number o f areas. Three o f these are particularly relevant to CHTUDP and are thus briefly reviewed below: i)Competitiveness, Positioning and Product Development; ii)Arrivals and Spend; and iii)The Spatial Development Framework Competitiveness,PositioningandProductDevelopment 15. An important aspect of NTS was the review o f Jordan's core competencies and uniqueness. The analysis undertaken in 2003 concluded that while several products could be brought to market, only one is potentially dominant overall: the iconic value o f the Kingdom's major heritage and natural landscapes. These products have already established strong images and are potential motivators for key growth segments. They are also dominant, stable and enduring values in a changing world; define the sense o f place and common interest o f the Jordanian people; and hold a histonc patnmony that is important to the world's major religions. Taken together they form a very strong selling proposition, and provide a good basis for successfully marketing Jordan's key assets: the Dead Sea, Petra, the Holy Land, Wadi Rum and Jerash. 16. Several other important strengths emerged from the 2003 studies. The results o f the competitive comparative assessment revealed that in a set o f 8 regional competitors, Jordan ranked relatively high with respect to trade opinion, hotelpricing, and trade shows; moderately well with respect to tourist yield, website, and market performance; and not so well with respect to infrastructure, air access price, and number o f visits. Further, Jordan was outranked across the board by Egypt and Turkey, in several areas by Dubai and Tunisia, and infew areas by Syria, Israel and Oman. The Trade Opinion Survey covering some 38 tour operators in 7 markets revealed that among tour professionals Jordan ranked ahead o f Egypt and Syria on heritage, cultural, adventure, and health and wellness tourism; was outranked by Egypt and others on eco-tourism, sun, sun and beach, resorts and MICE18; and was outranked by Israel on religious tourism. 17. Taken together, these reviews highlighted the need and potential for product improvement; revealed Jordan's weaknesses as a mass-market destination; and inform the decision to position Jordan as a boutique destination, focusing on specific strengths and specific markets. The reviews also revealed that for Jordan to be competitive it would need to greatly increase its marketing expenditure, strengthen sector institutions and develop its human resources. Meetings, Incentives, Conferences, and Exhibitions. 21 Tourist Arrivals and Spend 18. A key challenge for Jordan is to increase tourist arrivals and spend. Arnvals have fluctuated considerably over the last 8-10 years. In addition, the different sources yield somewhat different figures. According to M o T A (2005) data, arrivals fell slightly from about 1.5 m in 1998 to about 1.4 m in 1999, and then sharply to 1.2 m in 2000-the year o f the Palestinian Intifada. Arrivals began to recover in 2001, but did not exceed the 1998 level until 2002, after which they grew steadily to 1.6 m and 1.7 m in 2003 and 2004 respe~tively.'~The 2005 M o T A data clearly indicate the impact o f political turmoil inthe region. Tourism receipts followed a similar patternto arrivals, with the total falling from about JD550 m (US$780 m) in 1999 to JD496m (US$350 m) in 2001, but steadily recovering to about JD601 m (US$850m) in 2003. However, the rate o f growth o f receipts seems to have fallen o f f in 2004 when total and per capita expenditures were about JD585m (US$830 m) and JD340 (US$480) respectively.*' 19. The different data sources and series give rise to major differences in the estimates o f growth rates. According to M o T A 2005 data, the average annual rates for the 1998-2004 were very low: 1 and 0.3 percent for total tourism arrivals and expenditure respectively. The comparable rates implied by the N T S for the 2000-2003 period were 2 and 3 percent respectively, while MOTA'Slatest estimates for the 2002-2004 period were 9 and 10 percent respectively (MoTA 2006). A part o f the explanation for the wide differences probably lies in the fact that the longer M o T A 2005 series reflects the reverses o f 2000 while the others do not." Such periodic reverses are important charactenstic o f the Jordanian industry, and caution against simply using Middle East averages to estimate the future growth. Jordan's physical proximity to areas o f political instability suggests a more conservative approach.22In any case, it seems that the growth rate in arrivals i s outstripping the growth rate in expenditure, indicating a decrease in average per capita expenditures over the last few years-a worrying sign. 20. Estimates o f future visitor arrivals and spend vary considerably depending on assumptions regarding likely rates o f growth. For example estimates o f arrivals in 2010 range between 2.2 and 2.8 m (see Table 1below). N T S assumes that tourist amvals will grow at about 10 percent per annum over the next 5 years, that is, from a total o f about 1.5m in 2003 to 2.8 m in 2010. This is in line with WTO's average growth rate for the region as a whole. However, if more conservative and probably more realistic assumptions are made (for example, rates o f 6 percent per annum based on the JICA long-term projections), amvals in 2010 would be considerably less.23Based on N T S data, and again assuming a 10 percent per annum rate o f growth, the projection for total tourism receipts in 2010 is about JD 1.0 (US$1.5) billion, up from about JD0.5 (US$ 0.8) billion in 2003.24However, if the more conservative 6 percent assumptions are once again used, total tounsm receipts in 2010 would be about JD 0.8 (US$1.1) billion). NTS itself estimates 2010 receipts at JD1.3 (US$l.8) billion, indicating an estimated growth rate l 9The estimates of tourist arrivals and expenditure MOTA 2005 and 2006, and NTS 2004) are indicated in Figure I.While all estimates are based on MOTA sources; they differ somewhat because changing definitions and updates in the statistics. Only the MOTA 2005 estimate is discussed in the text as this seems to be the most consistent one. The MOTA 2005 estimate is largely consistent with the NTS 2004 estimate, though the latter is for a shorter penod. The MOTA 2006 estimate is for the penod since 2002, and is considerably higher than the MOTA 2005 and NTS estimates, apparently because MOTA have revised its definitions as well as incorporated additional data sources. If these new data are correct, then arrivals and expenditures were considerably higher than previously thought. A possible explanation is that the latest MOTA data may reflect the impact of inflows due to the Iraq war. In any case, the MOTA '05 data are believed to be the most consistent and are thus the basis for the reviewhere. 20 NTS exchange rate of USSl=JD0.688assumed. 21 IfMOTA 2006 data only for the 2001-2004 penod are used, the average annual growth rates for arrivals and expenditure wouldbe 10 and 6 percent respectively. 22 The intermediate (scenario "B") in the JICA study suggested annual average growth rates of 6, 5 and 4 percent per annumfor the 1995-2000,2000-2005 and 2005-2010periodsrespectively. 23 If,on the other hand, estimates are based on the most recent (2005) MOTA data, arrivals in 2010 would be significantly higher: an upper limit of 3.lm, and a lower limit of 2.2-2.5m. The much faster rates of growth implied by the most recent MOTA are probablyunsustainable,thus it would be unwise to baseprogramdevelopment on them. 24 These estimates differ somewhat from NTS's own two sets of estimates which show 2010 receipts at JD1.07b (US$1.6b) shown in the earlier document-A Sustainable Development Approach.,and JD1.3b (US$l 34) based apparently on Central Bank estimates shown in the later NTS document. See also the Resultstarget shown insectionon Strategy. 22 of receipts o f about 13.5 percent per annum. A key factor here is the NTS assumption that per capita receipts will rise because of the sector improvement measures proposed. Table 1: Estimate of Tourist Arrivals and Receipts Total Arrivals (m) 1.6 1.5 2.5 2.2 2 8 2.8 Total Receipts(JD billion) 0.6 0.5 0.8 0.8 1.o 1.3 (US$billion) 0.9 0.8 1.2 1.1 1.5 1.8 Per Capita Receipts (JD) 371 366 337 366 366 456 (US$) 525 518 477 518 518 645 Source: Bank estimates based on MOTAand N T S data. The exchange rate assumed isUS$l=JD 0.7065, that apparently assumed in NTS. Notes: (a) 6% pa growth rate based on long-term estimates o f growth o f amvals, including data from the 1996 JICA study. (b) 6% pa annual growth rate for arnvals and receipts; @-I) 10 % pa arnval growth rate is from NTS; (b-2) 10%pa growth rate for arnvals and 13.5 %pa average growth rate for receipts, based on the actual N T S receipts estimate for 2010 21. Whatever the scenario, it seems clear that bar a major regional catastrophe the number o f tourists could increase considerably over the next 5-6 years, and that the Kingdom needs to plan and manage carefully inorder to take maximum advantage o f this opportunity. Spatial Development Framework TheJICA Framework 22. The issue o f diversifying and spreading the benefits o f tourism more widely across the Kingdom i s a long-standing one. The 1996 JICA study reviewed the pattern o f tourism development in Jordan and related it to typical spatial development tounsm models elsewhere in the world. The study noted that tourism often develops spatially in3 stages (see Exhibit 1 below): - Pioneer:isolatedsmall-scaledevelopments; - Growth:clusterdevelopment, corridorformationandproductdiversification;and - Mature:networkformation, tourismcores,andtourismroutedevelopment. 23. According to JICA, Jordan was only partway into the growth stage. It still depended on a single major "core" city-- Amman, and consisted mainly o f isolated attractions such as Petra, the Dead Sea, Wadi Rum, and Aqaba. Several defects in this structure were noted: the core city itself was not well enough developed to provide the variety o f attractions and entertainment to encourage long stays and significant spending; the isolated destinations themselves were not well enough developed to encourage prolonged overnights stays and substantial spends; the several other assets and potential attractions were neither well developed or linked effectively into a system o f tour circuits that facilitated the diversification o f the product or the more even geographical distribution o f tourist expenditures. 24. As a result o f their analysis o f the Jordanian industry in 1995, the JICA study proposed a phased spatial development strategy for the Kingdom. This was based on developing cultural and historical assets in the secondary cities (including those proposed in CHTUDP) as well as the Kingdom's natural assets into a system o f secondary cores, regional clusters and circuits designed to address the deficiencies inthe system. Further, the strategy promoted the development and integrationo fthe industry-promoting Jordan deeper into the growth stage (see Exhibit 2 below). TheNTSFramework 25. As an essential part o f the program o f product development and diversification, NTS proposed a national development framework encompassing a combination o f the following: - tourismcenters; - developingtounstareas; - special tourist areas, nature and other reserves; - touring routes (primary and secondary); - andentrypoints. 23 26. Tourism Centers: Four main Centers are envisaged under NTS: 1) Amman City; 2) Aqaba Special Economic Zone, 3) Petra - Wadi Mousa Cluster; 4) The Dead Sea Hotel and Tourism Zone. The selected centers are charactenzed by having a substantial cluster o f accommodation, together with the ability to meet all o f the other essentials for tourism within the centre and its immediate hinterland zone. These centers all require further development within the framework plan. Amman, the Capital city, would continue to be the main center and principal gateway for international air visitors. It also combines its history as one o f the oldest continuously inhabited cities in the world, with modem progressiveness. Aqaba, the historic city, port and sea access entry point to Jordan (now a special economic development zone), would be strengthened strength as a centre for business and tourism. The world-renowned heritage icon o f Petra i s sufficiently strong and would continue to anchor an accommodation cluster and merit centre status. A section o f the shoreline o f the Dead Sea would be intensively developed as an accommodation center. It would lie within a wider zone that would focus on special interest products, including: health and wellness; the Holy Land religious clusters; and eco tounsm (the Mujib Wildlife Reserve). 27. Developing Tourism Areas (Zones): These tourism areas would be distinguished from tourism centers, mainly by their larger geographic dimensions and their accommodation base. They would inevitably contain vitally important assets for tourism (both developed and undeveloped); be attractive for investment; and be on the agreed tourism route network. They would also have the capability for accelerated development, and may contain a designated centre, as inthe case o f the Dead Sea area. 28. Special Interest Tourism Areas (SIAs): Eight areas are proposed. These are locations (historical sites, natural landscapes, etc.) that can provide at least one strong reason for visitors to come. The attraction could be a natural or man-made product, or something that i s unique to that area, and the core attraction may have the potential for further development with investment and marketing,. These SIAs would play a vital role in the framework for development in that they would facilitate the distribution o f visitors throughout Jordan and into the rural areas. The key SIAs would be as follows: Wadi Rum; Salt - Old City; Dana Valley - Dana Wildlife Reserve; Jerash and Ajloun (Heritage - Nature Tourism); Azraq (unique wetland reserve); Madaba and Mount Nebo, Umm Rasas: Um Qais, Pella (Tabaqat Fahil) and Jordan Valley; The Desert Castles-Qusair h a - a UNESCO World Heritage Site.25 It should be noted that this list includes 4 o f the 5 proposed CHTUDP sites. 29. Touring Routes: The primary touring routes (not specifically identified in the available N T S documents) would be designed to facilitate the principal distribution of coach and automobile travel modes. An important priority would be to facilitate self-driven [FIT] visitors who are a target for marketing to high yield visitors. The secondary touring routes encourage visits to smaller communities, special interest and discovery areas o f f these routes or from tourismcenters. The development strategy for touring routes would involve a program o froute facilitation and route re-enforcement. 30. In sum, even the most cursory review of NTS and JICA will reveal that while the terminology may be different, their development strategy and spatial framework are almost identical. The ideas on diversification and clustering are almost identical, and so is the set of cities/attractions identified for development, indicating a seeming consensus among industry experts as well as key stakeholders on the basic tourism development strategy for the Kingdom. CHTUDPandthe Sector 31. CHTUDP builds on and supports the strategic framework outlined by JICA in 1995 and reinforced by N T S in 2004. In addition, the proposed project is also designed to strongly support NTS' product development and diversification objectives, as well as to help address the employment generation problems. It focuses on five secondary cities: Salt, Madaba, Karak, Jerash and Ajloun-all key N T S 25A ninth SIA should been included in NTS: Karak, with its hugely impressive and historically important Castle and Ottoman building and an important current destination. GivenKarak's nationalimportance and discussionselsewhere in the documents, its omissionmust havebeen an oversight. 24 SIAs, and municipalities identified as priorities for immediate development in the JICA study. Further, by supporting tourism product development and diversification in these 5 cities (participating municipalities or PMs) inthe Amman and Northern regions, CHTUDP would help underpin pillars 2-5 o f NTS. It would help to develop new tourist attractions and improve existing ones; revitalize existing tourism circuits in this area; and consolidate an important tourism "zone" centered on and within a one- hour drive or so o f Amman. 32. Thus, CHTUDP would help Jordan achieve the key medium-term strategic objective o f shifting away from the exiting structure of isolated short-stay (and hence low-spend) attractions, towards a denser structure o f more varied multi-attraction "zones" that can attract a wider range o f visitors and encourage longer stays and spends. Given increased flows o f visitors, such "zones" would also offer significant investment opportunities to both large and small-scale private investors in providing more and better services to visitors, further consolidating the zones, and with even wider and longer-term gains to local economies as well as the kingdom as a whole. At the same time, CHTUDP would help GoJ to preserve important historical and cultural assets; mobilize these assets and integrate them more fully into local social and economic life; spread the benefits o f tourism more widely by creating much needed local employment opportunities; and build institutional and regulatory capacity at both local and central levels-all important national objectives. CHTUDPand SIYAHA: 33. CHTUDP would effectively complement and be complemented by other donor funded initiatives in the sector, particularly the USAID-supported SIYAHA project. The latter focuses on tourism marketing and promotion, new product development, and mobilizing private sector investment, as well as on building both private and public sector capacity and institutional reform. CHTUDP would focus mainly on physical and environmental improvements within the historic cores o f the above-mentioned SIAs, and would promote community participation and strengthen municipal management. In addition, it would provide vehicles for private investment in further developing attractions, visitor services and job creation. Together, the two projects would provide a solid foundation for the implementation o f NTS. Coordination would be facilitated by the fact that MOTAi s host to both. (See note on SIYAHA at Appendix 1.) Some Outstanding Sector Issues 34. While NTS covered a wide range o f issues (many very well) a few important one were not adequately addressed. K e y among them were the following: - Thegrowingphysicalandeconomic importance ofregionaltounsmbasedonvisitors fromthe Gulfcountries; - The willingness of the private sector to take on high risk investments outside of Amman, Aqaba, Petra, the Dead Sea, and a few other areas; - The willingness and ability of GoJ to allocate the required major additional fundingto the necessary tourism marketing effort; - The capacity ofthe public sector to reformandto mobilizeandretainthe skillsnecessaryto guide and manage the strategy; and - The huge potential political risks arising from the ongoing IsraeliPalestinian conflict that threatens to destabilize the entire region. 35. These important issues cannot be addressed fully here. A few remarks are inorder however. First, the likely limits on the funding available for sector marketing and institutional development will probably constrain the pace at which the sector can develop. Second, Gulf visitors are a largely untapped market that offers a huge development opportunity, although there are signs that GoJ and the private sector are getting ready to respond. Diversification in this area could help considerably in mitigating some o f the regional political risk. 25 Exhibit 1: Spatial TourismDevelopmentModel, Jordan (JICA) Tourist Volume I Low I Moderate High Jordan's DevelopmentalStage 1995 v Target under CHTUDP (2007-1 1) v Legend: 0 I 9A Tourist Site I >.-.. Gateway 0 .. ., . TourismCore I : . n ...... 4 ., .....0 . ' *+$.. Corridors d DevelopmentFeatures Isolatedand small scale development Corridor formation Tourism core & establishment Initial tourism Diversification of tourism o f tourism routes development - oroducts Market Strategy Traditional market Traditional market expansion Establishedtraditional market Europe New market exploitation New market expansion Geographic (sourcemarkets) Product-wise (soft adventure incentive, seminar) Target Market Segment Archaeology Culturetounsm (archaeology, Urbantourism Religion history, culture) Folklore museum Small scale seaside Soft adventure MICEtounsm holidays Source: Adapted from 1995 J1 4 Study 26 Exhibit2: SpatialDevelopment Strategy 195-2010,Jordan (JICA) .c- -0 . S O 0 0 ',. I I Gic? .. Gateway Tourism Core Tourist Flow Source:Adapted from 1995 JICA Study 27 Annex 1.1 Appendix 1: SIYAHA Project Brief - 1. The goal o f SIYAHA is to promote Jordan's competitiveness as an international tounsm destination by establishing the proper institutional and regulatory framework that enables private-sector driven investment and development, and stimulates tounsm growth while preserving national tourism assets and the overall environment. The program will also design a robust financial framework to encourage private investment, catalyze the development o f comprehensive products and services across the tourism value chain, and increase awareness among Jordanians about the importance o f the said sector inthe economy, and position the industry as the employer of choice. The objectives of the program are two-fold: (i)Ensureinstitutionsandpoliciesareinplace, whichwillfacilitate theimplementationand embedding o f the National Tourism Strategy (ii)Promote sustainable tourism projects, which involve private-sector resources and participation by local communities, local and international NGOs, and business associations, among others, that serve as replicable models o f sustainability and best practices. 2. To achieve the goals o f SIYAHA, the project will be implemented through the following components: 0 Component I -Institutional and Sector Reform. The goal of this component is to strengthen the capacity o f the Ministry o f Tourism & Antiquities (MoTA) in managing and regulating the tourism industry according to international best practice. W e will strengthen the public- private partnership in tourism development, and will create Centers o f Excellence (CoE) in MoTA, Department o f Antiquities (DoA), the JTB, and key partner institutions. W e will also support the development o f the Department of Antiquities by enhancing its capacity, developing a strategy for the management o f the historic and environment and seek better GoJ support for its operations. 0 Component 2 - Product and Site Development. The goal of this component is to develop competitive tourism destinations in Jordan, improved availability and attractiveness of tourism products, improved site management and strengthened tourism marketing. We will support public-private partnerships for effective tounsm product development and a private sector model for site management. W e will also spur the growth o f community-based tourism enterprises. 0 Component 3 - Industly Competitiveness. The goal of this component is to strengthen private-sector competitiveness and growth to capture a larger share o f the global tounsm market. W e will provide assistance to enterprises through business development service providers; provide financial and strategic planning assistance along with public policy advocacy support to industry associations; and mobilize capital through lending institutions and private sector investors for industry growth. 0 Component 4 - Human Resources and Sector Support. The goal of this component is to expand the qualified human resources pool for the tourism industry, improve service quality o f tourism sector establishments, and generate public-private sector support for tourism as an important economic driver and the employer o f choice. We will help create a Council for Tourism Human Resources Development; launch `Service Excellence Award'; implement a national public awareness campaign; and improve M o T A and private sector quality and certification inspections and grading systems. Source: SIYAHA 28 Annex 1.2: Urban Sector 1. Traditionally, Jordan has been a very centralized country, with most o f the political power, economic activities and resources concentrated inthe Amman conurbation. However, major demographic, social and economic evolutions over the past 25 years have made it necessary to foster a more evenly spread development that reaches out to the half o f the population that live outside the Amman metropolitan area. Although the role o f Jordanian municipalities in this endeavor is essential, their potential as actors o f local development has remained largely underused so far. 2. The World Bank i s involved intwo projects that are complementary intrying to resolve the major challenges o f Jordanian municipalities. While the Regional and Local Development Project will address the institutional and capacity building aspects o f municipal development using a systemic approach, the Cultural Heritage, Tounsm and Urban Development Project will help specific municipalities to use the unique cultural hentage assets and resources o f their cities as major drivers for the improvement o f their economic and social situation through tourism development. Both projects are closely in line with the new Country Assistance Strategy, particularly with pillars (2), supporting local development through increased access to services and economic opportunities, and (4), restructuring public expenditures and supporting public sector reforms. 3. The General Introduction of this background annex will provide the big picture o f the urban and municipal sector in Jordan, highlighting the major sector challenges. A more detailed presentation o f the intergovernmental structure, municipal responsibilities, municipal finances and municipal capacities, together with a summary description o f the project cities' situation will follow inAppendices 1through 6 o f this Annex. These will insist on the socio-economic, municipal management and municipal finances challenges -inparticular revenue collection issues - o f Ajloun, Jerash, Karak, Madaba and Salt. Background 4. Since 1970, Jordan has h o w n a remarkable demographic growth and accelerated urbanization. The Jordanian population (5.7 million in 2005) more than doubled inthe last 20 years, and it i s expected to reach 7.1 million by 2010. Jordan is a highly urbanized country: the rate o f urbanization went up from 44% in 1961 to 74% (4.95 million) in 2000, increasing to 79.3% by 2005. The urban population growth for the period 2000-2005 was 2.8%. 5. The urban landscape has been deeply changed over time by four major migration movements as follows: (i)fromsmallertobiggervillages,smallcities,thefewlargecitiesandespeciallyAmman; (ii)fromPalestinianrefugeecampstosurroundinglocalitiesandlargecities; (iii)sedentarization o f (semi-) nomadic tribes; and (iv) massive emigration towards oil exporting countries, triggering important remittance flows back into the country. 6. Aimingto support a more balanced territorial development, over time the Jordanian Government, through numerous development programs, has attempted to transfer economic investments to rural and peripheral localities in order to reinforce their social base and facilitate the integration o f immigration populations. 7. Despite all the commendable Government's efforts to reduce territorial imbalances, nowadays almost 60% o f the Jordan population i s located in the Greater Amman Conurbation, which effectively includes Zarqa, Rusaifa, Wadi a1 Sir and Suwailih. Other large cities are Irbid and Aqaba, the majority o f the rest o f the country's population i s concentrate in the middle and northern governorates, while other areas o f the country remain almost uninhabited. The supremacy o f Amman is not only related to population distribution, but also to the economic dimension. In fact, most o f the country economic activities and opportunities are located in the Amman conurbation and, with over 80% o f the Jordan's 29 productive sectors located in this region, this metropolis clearly remains the major commercial and industnal center o f Jordan. 8. Today there are 99 municipalities in Jordan, the result o f a series o f changes introduced by the Government over the last 50 years. From 15 in the 1950s, their number has grown to 641 by 1996. An attempt to rationalize the intergovernmental structure led to a reduction to 328 municipalities in the late 199Os, and to another amalgamation to 99 (plus Amman) in July 2001. As part o f this most recent amalgamation, Village Councils, which used to assist the Governorates in administering the rural territones, were abolished and merged into new municipalities at the same time. As a result, the average population size o f a municipality has increased from approximately 15,300 in 2000 to 50,300 in 2002. In the newly amalgamated municipal sector, municipalities do not coincide with specific urban centers, but rather represent territorial units comprising a variable number o f other settlements (villages or other smaller/secondary towns). Challenges 9. Inthis context o f institutional changes in the municipal sector and rapid urban mutation, some key issues emerged affecting Jordanian secondary urban centers ingeneral and those with historic centers in particular. These key issues and challenges were also largely confirmed by the rapid institutional assessment o f the four target municipalities carried out by MOTAas part o f the project preparation (see Appendices 2 through 7 o f this Annex) and are summarizedbelow: (1). Inhibition of the local potential for socio-economic development due to the current trend of concentration of economic activities in the Amman metropolitan area. As already pointed out, almost all other urban centers (except Irbid and Aqaba) are characterized by the weakness o f their economic role and their dependency on the Capital city. However, the role o f secondary cities in achieving a balanced socio-economic development and in fighting poverty has remained very limited, lacking so far the support o f a strategic sector approach. (2). Weak Municipal Finance Management, affected by a combination o f factors, among which the high percentage o f municipal budget dedicated to Salaries and Administrative costs (in the targeted cities, between 40% in Salt and 65% inMadaba in 2005) as compared to capital investments (between 7% in Madaba and 30% in Salt in 2005); limited capacity and autonomy to generate local revenues; insufficient budget available for operation and maintenance o f municipal infrastructures, limited decision-making authority on municipal expenditures (e.g. clearance by central government i s required for investments above $7,000); lack o f appropriate FMSs (financial systems are mostly manual) and databases to maintain a record o f taxpayers and defaulters; weak tax-collection system. While the recent transfer o f responsibilities for property tax collection from the Ministry of Finance to the municipalities has greatly increased local revenues, the collection process i s still unorganized and not supported by updated procedures for property evaluation. (3). Weak Municipal Capacity to deliver and manage municipal services and infrastructures. Cities greatly suffer from l o w levels o f municipal management capacity and weak municipal budgeting. The rapid institutional assessment in the four target cities o f Jerash, Madaba, Karak and Salt clearly identified several key deficiencies, like weak organizational structure, resulting in duplication o f tasks, lack o f coordination, dysfunctional units; overstaffing, lack o f performance incentives and poor level o f staff qualification; low capacity and power to manage inter-agency coordination, and limited use and types o f PPP arrangements to support the effective delivery o f municipal services. (4). Inadequate systemsfor downward and upward accountability of Municipalities. In the new amalgamated municipal setting the divisions between various local power groups could be aggravated at the expense o f the general interest. This risk could be mitigated through the strengthening o f independent municipalities, representing collective interests and identity, 30 managed in more transparent ways. On the other hand, while the reporting systems to central government and overall monitoring o f the performance o f municipalities (upward responsibility) needs to be strengthened, so i t is the case for participation, reporting to and monitoringby the citizens (downwards accountability). (5). Inadequacy of Municipal Management Tools. While the above financial and institutional weaknesses greatly affect the capacity o f municipalities to deliver and manage municipal services, the municipal capacity to lead urban development i s also greatly hindered by the limitations o f the existing planning regulations and tools. Inparticular: (a). Urban Planning: The existing Urban Planning legislation (Planning Law, 1966) refers only to "Structure Plans", i.e. regulating only land use and infrastructures, without actually introducing the concept o f Master Plan to establish the strategic development o f the urban settlement. As a consequence, urban development inJordan i s regulated mainly by zoning (ie. each area considered separately) rather than planning. In addition, the existing Master Plans o f larger cities all date back to the early OS, and therefore are mostly outdated.. In addition, the existing planning and municipal legislation does not establish any coordination mechanism between utility companies and Municipalities, and the latter has only planning authority on roads and land use. This lack o f inter-agency coordination results in wastage o f resources, as municipalities often end up re-paving roads dugby utilitycompanies, and general discomfort for the citizens. (b).Property taxation and land-use regulations. The inadequacy o f mechanisms for the assessments of property value (land and building values are assessed every five years without reflecting actual increases in market value) implies that the annual increase in collected property taxes i s often lower than what it should be, even if full estimate o f how much lower are currently not available. Also, there are n o mechanisms to avoid rent- seeking behavior by owners o f land inprime city locations. This results inplots of empty land incentral areas, contributing to overall increases o f land values in such locations and related urban sprawl. Sprawl i s also favored by unplanned over-zoning o f residential areas, which greatly contributes to the overall inefficiency o f the delivery o infrastructures. (c). Historic cores and safeguard of historic buildings and assets. The antiquity L a w 2111988 (antiquities and archaeology) only protects architectural heritage dating to pre-1700 AD; later monuments are not under legal protection. In addition, neither the Antiquity L a w nor the Planning L a w safeguards the urban fabric o f historic city-cores as a special urban zone to be regulated. The draft interim law 4912003 for the Protection o f Urban and Architectural Heritage, still not approved by the Cabinet, i s expected to reform the sector, providing standards for the protection o f architectural and urban heritage, preparing a list o f all the hentage locations, allocate the necessary finances for restoration and fairly compensate the owners o f heritage sites in order to encourage them to protect the buildings they own. (d). Comprehensivehtegrated Territorial Management Plans. Beyond the limits o f the so called "planned areas" around urban settlements, the rest o f the temtory in Jordan is not subject to any specific land-use plan or regulation and is classified as agricultural by default. This gap in the territorial planning system is particularly affecting the newly amalgamated municipalities, as it generates the coexistence within the same municipal territory o f both planned and unplanned areas, whereas the latter are outside the actual municipal control. Given the scarcity of agricultural land and uniqueness o f its natural landscapes, the GoJ has initiated an effort to develop a national land-use plan aiming to control development on such land. Under this project, the introduction o f special regulations for the protection o f the Cultural Landscape o f Ajloun will contribute to pilot new approaches to address this weakness inplanning. 31 (e). Urban trafic and parking management. Most cities do not systematically plan for transport and parking management, but rather react to transport related emergencies (e.g. traffic congestion) using a piece-meal approach. This approach contributes to reducing the quality o f environment inthe city-cores. (0.Solid WasteManagement: As it is the case for the traffic and management plan, most cities do not systematically and efficiently manage solid-waste collection. Despite the large number o f staff and, at times, the availability o f equipment, often the service offered to the citizens remains poor also due to inefficiencies in the management o f this activity. In fact, often solid waste i s managed amateurally, improvising solutions, rather than on the basis o f a knowledge o f the sector and relatedplan, contributing to the further degradation o f the urban environment. (g). Updated urban/municipal databases. The lack o f updated and standardized data and related municipal MIS at municipal level on infrastructure/services and various socio- economic dimensions further undermines the effective planning capacity o f cities. Strategy 10. In order to effectively face the above listed challenges, the Government of Jordan will work in partnership with the World Bank and other strategic development partners to intervene in the municipal sector at different levels. Inparticular, two complementary urbadmunicipal projects are in the process o f being launched in parallel, i.e. the subject CHTUD project and the Regional and Local Development Project (RLDP). While the latter will focus on wider sector issues and reforms, collaborating with the Agence FranGaise de Dheloppement (AD) and the European Union (EU) to intervene at country level, the former will target five special cities across the country, selected on the basis o f their incredibly rich and underutilized historic and cultural assets that could support tounsm-based economic development. The CHTUDP will be implemented in collaboration and close collaboration with USAID, through the ongoing SIYAHA Program (see Annex 4), to ensure synergies in the implementation o f local economic development programs (see the detailed description o f Component 3 o f this project). 11. The following table summarizes the sector challenges and main areas o f complementarity o f the CHTUDP and RLDP. 32 Table 3: Key municipal challenges and complementarity of the CHTUDP and FUDP dunicipalchallengelweaknes$ . Inhibition of the local All municipalities outside Amman are eligible to potentialsocio-economic hentage assets to generate tourist-based local receive Performance-BasedBlock Grants to support developmentdue to the economc development, infrastructure investments; very strong concentration Regional Development component focusing on of economic activitiesin thc secondary cities to increase attractiveness and Local Economic Development of regions outside Amman metropolitan area reduce outward mgration, Amman Regional CDS to be piloted in 3 secondary cities model for LED-focused strategic planning in (Irbid,Zarqa and Tafileh); histonc cities Review o f the fiscal transfer formula to increase Component 2 to support LED initiatives inthe equitability amongst municipalities. . Weak Municipal Finance llanagement finance management systems) .Weak MunicipalCapacity to deliver and manage municipalservices and infrastructures Increase local revenues and allocation of 1Component 3 aimed at strengthening municipal . Inadequatesystemsfor Creation o f Community Partnerships in downwardand upward municipality o fparticipatory M&E o fmunicipal accountability . Inadequacy ManagementTools . of Municipal Urban Planning and absence o f the concept o f integrated Master Plan Property taxation and land-use regulations Historic cores, Natural Landscapes and safeguard ..of traditional buildings, assets and landscapes. Comprehensive/integrated Territorial Management Plans Urban transport and parking management. Solid WasteManagement . their capacity to manage this service Updated urbadmunicipal GIS and creation o f municipal assets database forI1. Creation o f a national Municipal Database and MIS; databases the historic cores (to be later expanded to the All 99 municipalities to carry out an inventory o f whole municipality). municipal assets and condition of infrastructures to be linked to the national database system Annex 1.2 Appendix 1: The MunicipalSector Context - Institutional arrangements 1. Jordan's intergovernmental system is currently divided into three levels: (1) Ministries and Central Government Departments, (2) Governorates, Districts and Sub-Districts and (3) Municipalities. 2. The Ministry o f Municipal Affairs (MoMA) is the branch o f Central Government to which all municipalities report, while the Ministry of the Interior controls the 12 Governorates or Provinces (Muhafuzah) that focus on security, public safety and order issues. Governorates do not have independent budgets and are currently subdivided in 51 Distncts (Liwa) and 57 Sub-Distncts (Qadhu). 3. Municipalities are defined by law as local bodies with their own budgets. They are divided into four categories: (i). Municipalities o f Governorate capitals, except Amman and Aqaba (10 municipalities), (ii). centermunicipalitieswithapopulationabove15,000(43), District (iii).Sub-district center municipalities with 5,000-1 5,000 population (37), (iv). All other municipalities, with populationbelow 5,000 (9). 4. The Municipal Councils consist o f 6 to 11 members, theoretically elected every 4 years through secret ballot. Mayors also are to be elected by popular ballot except for Amman. However, transitional Municipal Councils were established after the 2001 municipal amalgamation, with half the members elected and half appointed by central government, the Mayors being appointed. Though planned as transitional solution until 2003, this arrangement has remained until today. The Mayor represents the Council and implements its decisions, manages the municipality and prepares and reports on the budget. Municipalities may be subdivided into territorial districts (manteqah) managed by a Director. Given its size, Greater Amman Municipality (GAM) has a unique status. Its Mayor i s appointed by the Cabinet of Ministers and has ministenal status, its budget is approved by the Prime Minister and not M o M A . Regulatory and LegalFramework: responsibilitiesof municipalities 5. Activities and functions o f municipalities are governed by a number o f legal acts and laws: (a). Act 26 (1962) on the administrative territorial system in Jordan; (b). Act 29 (1955) and Act 73 (2001) on Municipal Administration govern the operations o f municipalities (the so called Municipalities Law); (c). Law No. 11 (1954) on LandBuilding Taxes; (d). Law No. 79 (1966) on the Planning o f Cities, Villages and Buildings(the SO called Planning hw). 6. There are 39 municipality functions defined in Act 29, article 41, which can be categorized into three domains: Administrative responsibilities: - urban planning: street, public parks and open space construction, building licenses, organization o fpublic markets and light industries etc. - public health: provision o f fresh water and electricity; garbage collection; fire prevention measures; control over trade with penshables etc. - public security: control over parlung, bars and restaurants, gambling, street vendors etc. - public support: helping victims o f fire, flood, other disasters; prevention o f street begging, buildinghomes for the elderly - cultureandsports. 34 (ii) Legislative responsibilities: Local governments are entitled to enact regulations that enable them to fulfill their responsibilities or prevent certain actions, as well as to collect fees for trading o f produce products, street and sidewalk construction, business licenses and for urban improvements. (iii) Consultative responsibilities: Local governments are to be consulted if any o f their functions are to be assigned to the central government. 7. Over time, some health, education, and policing functions have been transferred from the municipalities to central government, whereas others such as electricity and water provision and wastewater management are performed by central public or privatized agencies. Functions remaining with the municipality can either be camed out by the municipal staff or contracted out. 8. As a result, today, only about one third out o fthe 39 municipal functions according to Act 29 are actually devolved to and carried out by municipalities (with the exception of Amman). Among the major functions still performed by the municipalities are issuing permits for construction, street paving and maintenance, street lighting, garbage collection, and the provision o f library services. Recently, additional responsibilities devolved to municipalities include: construction o f local roads and sidewalks, park services, regulation o f local markets, public health protection and, most importantly, collection o f property taxes. 9. Due to l o w municipal capacity, some key municipal functions are inpractice performed by public or semi-public corporations or the central Government. Noticeably, Structural town and road planning i s mostly done by consultants authorized by M o M A or by M o M A planners themselves. Moreover, certain municipal decisions require prior M o M A approval such as: (1) Changes to municipal budget, (2) N e w hiring, and (3) Expenditures [above JD 5,000 (US$ 7,052): regional M o M A office approval; above JD 100,000 (US$ 141,043): Minister's approval], and (4) setting o f Local Fees and Taxes. At any time, M o M A can postpone or overrule municipalities' decisions and has the ultimate power over Local Governments through its right to dissolve any elected Municipal Council and appoint a new Council for up to 2 years (as done in 2001). This right can be exercised when a municipality cannot fulfill its legal commitments such as paying salaries and social security contributions for municipal employees. MunicipalFinancialmanagement Municipal expenditures 10. Municipalities in Jordan show weak financial management capacities and overall low collection rates for local taxes and fees. In2000, 80% o f the then 328 municipalities had a negative account balance, against 44% in 1996. The amalgamation o f 2001 included financial assistance by the central government to insolvent municipalities (US$ 13.7 million), debt restructuring and some improvements in municipal management. Additional government transfers, debt rescheduling and increases in municipality revenues (from JD 11 million on average before 2001 to an average o f JD 26 million afterwards) significantly improved the financial situation o f municipalities, with only 4% classified as insolvent at the end o f 2001. 11. After 2002 municipalities almost stopped borrowing and greatly reduced their capital expenditures in order to balance their budgets and cope with administrative costs, as also demonstrated by the detailed budget o f the Project Municipalities (see Appendices 2 to 7 of this Annex). Municipal revenues: Intergovernmental transfer system and own-revenues Intergovernmental transfers 12. The following taxes and fees are the main sources o f funds collected by the central government for the municipalities' benefit: - Different shares o f custom duties o n all goods, except fresh fruits and vegetables; - 40% o f vehicle registration and driving license fees; 35 - 65% `flammable materials tax', which have become on important source since their increase after amalgamation (additional JD 15 million per annum); - 100% o f revenues from health and traffic violations inthe municipality's jurisdiction;26 13. Central government transfers constituted between 42 and 54 % o f the total municipal revenues in 1998-2002. After a dip in 1999, the steady increase o f municipal revenues till 2002 was mostly on the account o f government transfers and borrowing from CVDB, rather than due to increase in locally generated revenues. In addition, since amalgamation the government has provided ad-hoc direct assistance to municipalities for specific projects and investments (construction o f libranes, maintenance o f equipment, infrastructure development, development o f productive ability etc.). After 2002, Central Government transfers still constitute a large share o f municipal revenues. Local Revenues and Taxes 14. Local fees and taxes, including their bases and rates, are established by Central Government according to the Municipalities Act 29. More than half o f the local taxes and fees are collected and administered by Central Government. However, some are collectedby municipalities as follows: - buildingand constructionlicense fee, - businesslicenses - garbage collection and health fees, - fees for road pavements (municipalities may collect from the potential beneficiaries up to 50 percent o f the total paving costs), - Revenuesfromincomegeneratingprojectsandmunicipalproperty. - Amelioration(orimprovement) fees; 15. Since 2004, the Ministry o f Finance has initiated a process o f decentralization o f collection of property taxes, equipping and allowing municipalities to directly collect and retain such taxes, transferring back to the central government only a 4% fee. Borrowing 16. Municipalities may borrow after pnor approval o f M o M A on the lender, amount, rate, repayment structure and other conditions. While municipalities may borrow from commercial banks and other organizations, de-facto the Cities and Villages Development Bank (CVDB) has been the main channel for sub-national long term financing. Since its inception in 1979, the C V D B has relied exclusively on public funding and lines of credit from multilateral institutions. Among its main functions are to - finance (debt or equity) and supervise municipal infrastructure, social housing and revenue generating projects (including economic, financial and technical evaluation); - receive and manage deposits o fmunicipalities and other public institutions; and - provide technical assistance for basic services and administer loans to local councils; 17. CVDB's lendingactivity experienced a significant drop during 1999-2001, when disbursements to municipalities were only 20% o f their level in 1998, mainly due to financial difficulties o f municipalities that were unable to service their loans. The increase inlending in2001 and 2002, however, took place due to the Central Government's assistance in refinancing municipal loans. 58% o f new loan agreements signed in 2001 were for refinancing previous municipal loans. In 2002, almost 40% o f loan disbursements to municipalities were made for loan adjustments and prior commitments o fmunicipalities, including salary payments. Inthe period 2003-2005 municipal borrowing almost grinded to a halt. 26 Items (a) to (d) are generically accounted for together as "Fuel Tax". 36 Municipal Budget Outcomes: 2003-2005. 18. A summary o f actual budget outcomes for 2003-2004 and proposedbudget outcomes for 2005 for all Jordanian municipalities (excluding Greater Amman and municipal organizations that are not categorized such as joint councils and the Petra Regional Authority) are presented in the Table below (source CVDB, 2005): Trends inJordanian municipalbudgets" *excluding Greater Amman and non-categonzed municipal organizations 19. The table illustrates the impact o f capital expenditure levels on overall budget outcomes, whereas municipalities appear to be generating operating surpluses that finance most municipal capital expenditure. The overall surplus recorded in 2004 was due to the material reduction in capital expenditure experienced in2004. 20. The approved 2005 budgets o f municipalities (excluding Greater Amman and non-categorized municipal organizations) demonstrated that municipalities expected to finance the estimated deficit o f JD 11,050,933 from a major increase in income that also permitted a reduction in overall lending totals. Across the municipal sector, four o f the ten first category municipalities for which revenue projections were available at midterm o f the FY, recorded revenue flows in 2005 that were more than 50% less than forecast ininitial 2005 budgets. These data, together with the municipal budget data from individual PMs provided in the following appendices 2 through 7, clearly highlight weaknesses in terms o f municipal budgeting slulls. These generalized and systemic weaknesses affecting the Municipal Finance management o f the whole municipal sector in Jordan will be tackled in a systemic way by the Regional and Local Development Project, and as such fall outside the scope o f this project targeted to 5 historic cities. Municipalemployees 21. Before amalgamation in2001, there were 13,992 employees worlung inthe 328 municipalities, or one employee per 357 inhabitants. After the reform, the number o f municipal employees increased by almost 30 percent, to 17,864. Thus, the number o f inhabitants per municipal employees decreased to 282. Prior to 2001, only 4% o f municipal employees had university education and less than 7% had a community college education. The vast majority (89%) had finished high school at most. In order to improve the limited municipal capacity and l o w technical expertise o f municipal employees, the new employees (763) hired after amalgamation were mainly civil engineers, architects, surveyors and draftsmen. Nowadays, mostly due to low government salaries, municipalities are facing difficulties retaining slulled professionals, as they suffer from the fierce competition o f the booming private construction sector inAmman and the brain drain to the better-paying Gulf countries. 37 Annex 1.2 Appendix 2: Jerash MunicipalityProfile - Background 1. The city o f Jerash is the main urban center in the homonymous Governorate, located in the northern region o f Jordan. In 2004 the city counted a population o f about 31,500 inhabitants (about 58,000 if considering the whole Greater Jerash municipality) and in the last decade expenenced a demographic growth o f around 25%. The city lies ina valley among the mountains o f Gilead, at one time a city o f the Decapolis and the only one o f that powerful league that still retains a large number o f intact artifacts. 2. The Persian invasion o f 614 was the beginning o f the end of Roman Jerash. The Muslimconquest in about 635 completed the decline o f the roman city, which gradually shrank to about a quarter of its original size. A senes o f earthquakes destroyed many o f the later churches and buildings, for long left exactly as they fell. The city remained completely uninhabited untilthe creation o f the Circassian refugee colony by the Turks, in 1878, on the east bank o f the Wadi. Their descendants still form a large part o f the local population. 3. The modem city initially developed in the immediate surrounding o f the Roman Baths. In this area, the Old Souq is the most significant and best-preserved focus o f post-Roman historic buildings withinthe City, and although several buildings are either derelict or inpoor condition, the area still retains the ambience o f an active part o f the city. The only remain o f the Roman city on the East bank o f the Wadi is the East Baths complex. 4. The key feature o f modem Jerash is the line o f the Roman walls and some o f the routes that lead into the core from them. Topographically the land rises to the east of the Wadi and Circassian Jerash, within the walls, faces the heritage site to the west. The central commercial area includes a grid o f streets bounded by King Abdullah Street to the west and King Hussein Street to the east. The ground floors o f the majonty ofproperties are retail or commercial premises withresidentialor office development above. Context 5. The population o f Greater Jerash municipality in 2004 was 58,140, almost 40% o f the population o f the whole governorate. An estimated 44% o f the population inthe Jerash governorate is below the age o f 19, and only 6% above 60. The majority o f population in Jerash city is in working age, making employment creation a key factor for revitalization efforts. The average annual household income in the Jerash Governorate and in the Jerash Sub-Distnct i s estimated at US$18 per day (US$6,782/year) for an average size household o f 6 people. A little under a fifth o f the population (18.4%) lives inpoverty (2002- 2003), a drop o f 10% since 1997. As for Jerash city, 19.4% o f the population (around 25,893 persons) i s below the poverty line2'. 6. Jerash is witnessing growing unemployment, from 17.8% in 2002 to 18.9% during 2003 and 2004, higher than the national unemployment rate, at 12.5%28. Businesses in Jerash tend to be micro- enterprises, employing 5 people or less. The largest sector providing employment is the commercial sector. The construction sector i s experiencing an upward trend, growing ,from 70 licensed businesses in 2000 to 297 in 2002. Like other regions in Jordan, the Jerash Governorate i s witnessing a decline inits agricultural sector, shifting from a traditionally rural to a more urbanized society. Tourism remains a highly under-exploited economic sector for further private sector development and income generation. The informal sector, dominated by a largely female labor force between the ages o f 19 and 45, mostly involves home-based activities with very l o w compensatory wages, with an average o f ~ $ 4 per 2 month, reliedupon as supplementary household income. 27 World Bank, Social and Economic Development Group, Middle East and North Africa, 2004, "he Hashemite Kingdom of Jordan-PovertyAssessment, June 2004, pg 13,32. 28 Department of Statistics, Employmentand Unemployment Survey, May 2004, pg 142,146,148. 38 7. The limited availability o f municipal budget for upgrading o f existing infrastructures, and operation and maintenance o f municipal assets i s reflected particularly in the overall decaying quality o f the historic city core, with uneven quality o f street paving, inadequate street lighting and poor quality (or non-existence) o f sidewalks to allow safe pedestrian movements across the city. The city core also suffers for the lack o f recreation and green areas. Similarly to the other project municipalities, the city if Jerash, particularly its historic core, is affected by the l o w capacity to efficiently collect and dispose o f solid waste, particularly with regard to regular street cleaning. 8. The proximity to Amman and Irbid makes Jerash and its immediate region dependent on the capital's services, especially in terms o f specialized healthcare and higher education. While basic social services exist in Jerash City, these are not sufficient to meet the demand, neither in terms o f quantity nor quality, often failing to meet the standards o f comparable Governorates. Almost all households have access to public electricity and water networks, yet around 60% suffer from inadequate and interrupted services. Sewerage provision i s not as readily accessible, reaching only one-fifth (or 21%) o f the Governorate's population, with a large majority (78%) using cesspool. Most households (82%) depend on kerosene or gas heaters for warmth in the winter, while only 1.8% has a central heating system installed2g. 9. After peaking in 2000, with an estimated 300,000 visitors and JD 1.3 million revenues from entrance fees, the number o f visitors had decreased to 106,600 (60,590 foreign and 46,600 Jordanians) in 2003, generating about JD 155,315 o f total revenues for the Ministry o f Tourism, the amount also influenced by a reduction in the proportion o f higher-paying foreign tourists. Since the entire hentage site is under the jurisdiction o f MOTAand the main rest house i s operated by the Social Security Institution, the two key sources o f tourism-related income - admission ticket sales and catering - are thus not retained by the city. In addition, the local economic opportunities potentially generated by the current flow of tourists visiting the archeological site are currently limited to the provision o f few services. There are 11 formal restaurants and 29 souvenir shops inthe western side o f the city. There are no car rental agencies, only two travel agents and 2 hotels, one o f which located on the outslurts of Jerash. In total, the tourism sector employs around 1,202 persons, mostly Jordanians. 10. Apart from the famous Roman archeological site, there are other heritage sites on the eastern side of the city, which need to be better marketed to the tourism industry, including the Roman pools and the eastern Roman Baths, currently under renovation, as well as the old souq, that has been renovated but is still not operational, though with high potential for success in incorporating handicrafts and attracting tourism. Jerash Revenuesandexpenditures 2003 2004 2005 JD JD JD Totalrevenues 1,486,561 966,832 1,697,950 29All data from the Department of Statistics (2002/2003), Household Income and Expenditure Survey. 39 Organizational Structure, Staffing and Municipal Management Tools 12. The preliminary institutional and capacity assessment o f the municipality o f Jerash highlighted a series o f key issues. A more detailed assessment will be carried out under the M&E subcomponent o f the project to identify priority areas o f intervention, related baselines and indicators to monitor improvements interms o finstitutional strengthening/capacity building. Key identified issues are as follows: Technical Units 13. The Jerash Municipality is responsible for three directorates including, Jerash, Souf and Alkfair, as well as eight different communities. However, the municipality's organizational structure (which was approved by the municipal council on January 2006 and is inprocess o f obtaining the approval from the Ministry of Municipalities) has been extended to include eight additional directorates. Each directorate has several sections and branches with an extended hierarchy. The municipal council has six different committees. Overall the Jerash Municipality employs 489 staff members. 14. Interms of technical competencies within the organizational structure, there are four technical directorates dealing with engineering services, zoning and building, health care and environment and workshops and maintenance. The zoning and building directorate i s basically responsible for approving the recommendations o f the local councils for land use, as well as issuing building licensing and monitoring building regulations, however. 15. Although there are several issues in terms o f planning, a major bottleneck for the zoning and buildingdirectorate lies inthe fact that it has no copy o fthe master zoning and landuse plan generated for Jerash by the Ministryo f Municipalities, and as such it i s currently approving new land use on an ad-hoc basis. In addition there are capacity and technology gaps interms o f planning, as plot drawings continue to be drafted manually and there i s no AutoCad system available. 16. Currently the directorate focuses on implementing and monitoring the applicable building zoning and land use regulations, however there is a capacity gap in this regard, in terms of disseminating more broadly such regulations to the broader public so as to raise their awareness on the importance o f maintaining the urban fabric in the core area and in developing the community's full commitment to a development plan and overall common vision for Jerash. 17. While there i s no specialized heritage unit within the municipality organizational structure, the zoning and buildingdirectorate i s incharge o f related issues within its competencies. Traflc Management 18. Traffic in Jerash requires a more efficient management strategy, especially when it comes to parking. Although the municipality has a traffic section which looks into all traffic related issues in coordination with the traffic police, however there is a need to strengthen such efforts by carrying out a comprehensive traffic management study, with full commitment o f all related entities to enforce the application o f the regulation. Garbage collection 19. Garbage collection inthe Jerash area i s carried-out by the health and environment unit, which has over 150 workers covering the area. However, the area requires more efficient cleaning semces, as well as monitoring, especially at the core, where vegetable carts tend to cluster, around the plaza, and at the main wadi crossing the Jerash core and dividing the city from the archeological center. The municipality recently gave more attention to this issue, and allocated 24 hour supervisors and cleaning workers, with novehicle allowed to park inthe plaza. 40 20. There is also a gap in terms o f adequate cleaning infrastructure, as the municipality has only two garbage presses which are not sufficient for collecting all o f the garbage generated. As such in order to cover such big area, there i s a need for more garbage trucks, newer presses, more garbage bins. In addition, the municipality needs to play a greater role in disseminating information to the community of the importance to dispose o f garbage properly for health and in terms o f attracting more tourism to the area. Computerizationand GIs 21. The municipality and its different local offices have 35 personal computer and 26 pnnters, however there is no standardized technological systems in use for planning, monitoring and interfacing (such as the GIs) among the various local government agencies and technical units. There is a serious under-exploitation o f e-government systems that could seriously improve efficiencies among the local and central agencies, as well as internal capacity for planning and monitoring purposes in land use and development. Issues 22. Jerash faces a number o f key issues affecting its social and economic development, including: (1) l o w social cohesion due to rapid growth and continuous immigration o f new population; (2) physical and functional disconnection between the archaeological site and the city, estranging the local population, which perceives the constant tourist flow as a nuisance and the Jerash festival a source o f yearly discomfort; (3) physical decay o f the urban environment, exacerbated by traffic and parking congestion, and by the visual clutter (particularly along King Abdullah Street and the surrounding commercial area). The Wadi area, a significant potential environmental asset for the city, is affected by fragmented land use, encroachment and pollution. (4) Threats to cultural heritage, mostly due to lack o f maintenance, neglect and encroachments, the latter even endangering the archaeological site itself; and (5) economic stagnation, despite the existence o f an outstanding economic asset like the archaeological site, whose economic advantages are not shared by the local population, as the tourists are not attracted to visit the historic core. DevelopmentStrategyand Objectives 23. In order to increase tourism-based economic development and encourage participation o f the private sector in the tourism sector, the project will aim to: (i) improve overall infrastructure and basic service provision within the city core; (ii) improve city core management o f public services, particularly street cleanliness; (iii) develop city-core special regulations, to protect the deteriorating urban fabric, (iv) promote and support tourism-based SMEs (v) promote Jerash city as a tourist center. The project will intervene in these key areas through its various components and enable the municipality to sustain tourism-based development through the creation o f a City-core Management Unit (CMU), a unit fully dedicated to the management o f the historic core, its assets and infrastructures. 24. InJerash, as inother cities targeted by the project, the project development objective to revitalize the historic core and improve the overall quality o f the urban environment to support tourism development and related economic activities would be achieved through a combination o f investments and regulatory interventions. Within this context, the city revitalization process would be expected to improve the overall livability o f the historic core, foster preservation o f irreplaceable heritage assets and ultimately create the necessary conditions to enable flourishing sustainable local economic development. 41 Annex 1.2 Appendix 3: Karak MunicipalityProfile - Background 1. Even ifthe urban fabnc o f modem Karak has lost most o f its evident historic tradition, overall the city still appears as a historical urban settlement placed on top o f a hillbeside its landmark castle, whose form i s largely related to its defensive hnction and topographical location. 2. This city i s believed to have originated from the late Bronze or early Iron Age around 1,200 BC. Mentioned in the Old Testament as Kir Hareseth, Kir Heres and Kir o f Moab, it was once the most important city o f the Kingdom o f Moab. While the Roman and Nabatean periods where not clearly registered, Karak regained its prominence dunng the Crusader period when the first phase o f the modem castle was constructed. In 1264 Baybars and later Qalawun o f Egypt added further towers to the Castle. These survived until 1840 when, as a reprisal against the people o f Karak, Ibrahim Pasha o f Egypt captured and destroyed much o f the fortifications. The majority o f urban Karak was leveled in the last century as a reprisal, removing any clear traces o f previous settlements or buildings. 3. Today the urban form o f the city core remains well defined as an anthropomorphic scheme characterized by the castle acting as the generator (head) o f a trident road layout (A1 Qal'a Street, A1 Malik A1 Husayn Street and A1 Khider Street). The castle is the focal point o f interest for the visitor, covering a significant portion o f the area o f the historic core. The historic core is the commercial and governmental centre o f the region and a market town to surrounding farms and villages. Its attraction as a centre is strong, as reflectedby the variety o f the services it provides. Context 4. The Karak Governorate i s located in the southern region o f Jordan. Its population in 2004 was about 204,135, o f which 64,300 living in Greater Karak. The average household size i s 5.7. While Jordan's population has increased 23.2% over the past 10 years, duringthe same period the population o f the Karak Governorate has experienced a slower growth rate o f about 2%. According to the Department o f Statistics, the average annual household income inKarak Sub-district i s about US$8.O4l3O. About 57% o f this income i s generated from employment, 21% from transfers - mostly in the form o f pensions, subsidy transfers from Government and remittances from expatriates - 13% from rents and 7% from self- employment. 5. The average total poverty line in the Karak Governorate has been set at JD 364 per capita (compared to the national level o f JD 392 per capita) and an estimated 12% o f its population lived below the poverty line during 2002-2003, an improvement o f 10.5% since 1997. In Karak sub-district (Greater Karak), it is estimated that about 3,285 persons (5% o f the population) are poor3'. 6. About 37.4% o f the total 15+ years old population ofKarak Governorate is economically active3*, o f which 29.4% is employed, with a gender differentiation split o f 50% males and only 8.4% females. Currently, most o f the employed population (91%) earns less than JD 300 per month; and only 3.3% earns above JD 500 per month. Furthermore, the unemployment rate in Karak Governorate in2004 was 2 1.5%, and increase from 20.5% in 2002 and noticeably higher than the national rate o f 12.5%33. Women unemployment i s 31%, higher than the national female unemployment rate o f 16.5%. Another population segment suffenng from marked unemployment i s the youth, with only 62% o f the population between the ages o f 20-40 employed. About 36% o f the total employed population has blue-collar jobs, while 17% works as professionals, 10% as clerks and inthe service sector, and around 10%inartisanship and related Department of Statisticsestimates 2003. Source of data: World Bank, Social and Economic DevelopmentGroup, Middle East and North Africa, 2004, The Hashemite Kingdom o f Jordan-Poverty Assessment, June 2004, pg 13. Taken from Staff estimates basedon the HEIS 2002,2003. The unemployedaccording to DOS definition i s apersonwho i s 15 years of age or older, who i s capable of work, and looking for work and who hasn't practiced any work during aspecifiedperiod. Department of Statistics, Employmentand Unemployment Survey, May 2004 42 trades. At present the direct contribution to employment by the tounsm sector i s very limited. A total o f about 100 people work in tourism-related activities, like restaurants and hotels. Local people are mostly owners and those inmanagerial positions, while workers are either from other parts o f the country or non- Jordanians. The sector tends to be male-dominated. 7. The majority o f businesses located in Karak city can be characterized as micro-enterprises, employing less than 5 people, with half of them employing a single person. The average age o f businesses is around 5 years while half have been operating for 4 years or less34.More than a third o f the businesses have more than six competitors, which indicates low variety in the products they offer. 62% o f businesses in Karak city are in the commercial trade sector35,most o f which entail retailers in groceries and foodstuff, clothes, shoeware and car parts. Such shops employ mostly locals. 8. Similarly to the other project municipalities, the limited availability o f budget for upgrading o f existing infrastructures, and operation and maintenance o f municipal assets i s reflected in the overall decaying quality o f the historic core, with uneven quality o f street paving, inadequate street lighting and poor quality (or non-existence) o f sidewalks to allow safe pedestrian movements across the city. The city core also suffers for the lack o f recreation and green areas. In addition, the historic core in particular i s affected by the l o w municipal capacity to efficiently collect and dispose o f solid waste, particularly with regard to regular street cleaning. 9. Almost all households in Karak Governorate and Karak city in particular have access to the public electricity network, even if there are serious issues o f reliability o f services. Similarly, almost 99% o f the households are connected to the public water network, yet around 68% suffer from unpredictable water cut-offs. Access to sewerage is poor, with only 11.2% o f the Governorate households connected to the sewer network, while an estimated 88% o f the population uses septic tanks. Most households (83%) depend on kerosene or gas heaters for warmth in the winter, while only 1.8% o f them have central heating. Telephone services cover all plannedresidential areas36. 10. The renowned Crusader image o f the Karak castle clearly provides a strong attraction for tourists. The number o f visitors to Karak, has declined over the past four years reaching its peak in 2000, with nearly 133,000 tourists, down to 44,700 in 2002 and slightly increasing to 52,700 in 2003. The Castle visitors in 2003 generated revenue o f around JD 14,116 for the Government o f Jordan, in comparison to JD 124,000 duringyear 2000. A fee o f JD 1 for a foreign tounst is collected. Foreign tourists comprised 84% o f the total number o f visitors, while the number o f Jordanian visitors to the Castle was at its lowest infour years. Worth noticingthat there is a small but growing number o f independent tourists and small organized groups within the profile o f foreign visitors to the castle. 11. There are only 4 classified hotels (two stars) offering 54 rooms and 98 beds, as well as 4 unclassified hotels with 47 rooms and 117 beds, totaling 215 beds per night3'. At present there are few local people working in tourist activities like restaurants and hotels, except for the owners and those in managerial positions. The direct impact o f tourism on employment i s negligible. The tounsm sector in Karak city employs around a hundred persons, 1% o f which are non-Jordanians, with the total constituting 0.4% o f the total national Jordanian labor in tounsm which amounts to 21,015. Tourism remains a mostly under-exploited sector and provides an opportunity for further private sector development, increased employment and greater income generation. 34Ibid. 35DOS census of 2004. 36Departmentof Statistics, Employmentand UnemploymentSurvey, May2004 37There are 300 beds in 3-star category(Ma'in Spa). 43 12. Here follows a summary o f the municipal budget o f the municipality o f Karak in the years 2003- 2005: Organizational Structure, Staffing and Municipal Management Tools 13. The preliminary institutional and capacity assessment o f the municipality o f Jerash highlighted a series o f key issues. A more detailed assessment will be carried out under the M&E subcomponent o f the project to identify priority areas o f intervention, related baselines and indicators to monitor improvements interms o finstitutional strengthening/capacity building. Key identified issues are s follows: Technical Units 14. The municipality organization structure includes nine directorates. The municipal council has nineteen different committees. Each directorate has several sections. The municipality has three technical units, namely; zoning, planning and studies and construction. The construction unit is responsible for supervising, constructing and maintaining roads, buildings, parks and fixing and maintaining lighting units, inaddition to preparingtenders. 15. The zoning directorate consists o f five sections; zoning, survey, licensing, heritage and collection. The directorate i s responsible for producing plot plans, following up the day to day applications, enlarging the regulated plot plan o f the municipality. The directorate completed by 2005 the regularization process for all lands owned by the municipality. Currently they are updating the current regulated plot plans to rectify the mistakes o f the former one. The local councils may as based on the available conditibns and applications take the decision o f changing the land use, which i s then referred to the municipality to comment on or approve. The directorate has its own drafters and most o f the plot plans are computerized, however, the shift and discrepancy between the plot plans o f the Land and Survey Directorate and those o f the municipalities makes difficult to produce the individual plot plans digitally using AutoCad. T o rectify such problem the municipality considers the on site condition and most often reduces the width o f the streets. Traflc Management 16. Karak i s at the centre o f an effective transport network'. It is a regional public transport centre and has an extensive scheduled route network linlungit with the other governorates, vanous settlements and facilities and urban centers o f the country. There are a large number o f public transport services originating within the Old City and serving the surrounding villages, the majority o f these comprise unregulated mini bus services. The irregular schedules are due to the practice o f waiting to ensure a full load o f passengers prior to departure. This practice o f waiting often leads to congestion at the points o f departure and frustration on the part o fpassengers. 44 17. The road system is generally in good condition and capable o f accommodating the existing and forecast traffic volumes, but traffic inside the old city o f Karak i s a problem. The internal road network within the old city o f Karak is generally o f narrow streets, with the majority allowing only one-way traffic, there i s a dearth o f traffic signals and road markmgs, and there i s a limited amount o f available off-street parking. There are only two dedicated car parkings and both are small. Vehicle parking occurs on virtually all streets within the Old City, with double parking a common practice, as such reducing the capacity o f internal roads. As such a traffic management strategy is necessary inorder to ease congestion. 18. Tourists are most likely to visit Karak as part o f a tour program and large tour buses face difficulties innavigating the steep winding streets leading up to the Castle. Alternate routes or shuttle bus options need to be considered. Garbage collection 19. Karak suffers from inefficient municipal services in terms o f solid waste management and street cleanliness. Computerization and GIs 20. The municipality has n o GIS. However they have 32 desktop computers and 17 pnnters, while other local offices have 14 desktop computers and 14printers. They have n o plotters, no colored printers. There is no local intranet except for the financial directorate inthe tax section which i s directly connected with the Ministryo f Finance. They have an oracle based staff attendance and software, as well as limited access to internet. 21. The ICT staff consists o f a programmer, three computer science B.Sc holders and one technician. They are developing a web site for Karak municipality. The archives have been recently computerized, and there is an oracle based program for business licensing. Issues 22. The histonc core o f Karak faces a number o f key issues directly affecting its potential for social and economic development. These include (1) overall residential decay and replacement o f original population by immigrant workers (mainly Egyptians and Chinese) and young couples, whereas more than 40% o f the original population moved to the new outskirts o f the city; (2) change o f commercial functions to satisfy the needs o f the surrounding villages, with an increase o f banks, cheap clothes shops, furniture and white goods, while higher quality shops moved from the historic core to new outslurts; (3) traffic congestion, due to the topography o f the city and the lack o f appropriate parking and the daily inflow o f population amving in Karak by car and, above all, by bus; (4) overall decay o f the urban environment, exacerbated by physical decay, visual clutter, insufficient storm drainage network, disappearance o f central public spaces and decay o f the main inner-city bus terminal; (5) threats to cultural heritage, since the little remaining built cultural heritage i s threatened by lack o f maintenance, neglect, encroachments and by the lack o f awareness o f its value. (6) last but not least, stagnation o f local economy, due to a number o f factors, among which the fact that Karak remains only a tourist stop on the route from Amman to Petra and its potential to benefit from tourism economy remains largely under-exploited. DevelopmentStrategy and Objectives 23. In order to encourage/enable and support tourism-related development and mobilization o f the private sector, the project will aim to create the necessary context and opportunities for the tourists visiting the castle to venture out o f the castle compound and spend time within the city. This will be achieved through a combination o f targeted revitalization interventions, i.e. the creation o f a new city gateway welcoming tourists while also providing much needed services to the people o f Karak, and the overall improvement o f the quality of the urban environment in the historic core. The latter will be achieved through an improved quality o f streets and overall cleanliness. Owners o f historic buildings will be supported to convert them in tourism accommodation, increasing the number o f available beds per 45 night.Finally, to ensure sustainability, a dedicated unit will be created within the municipality to manage the histonc core. 24. The main challenge for the project would be to reestablish the functional and spatial centrality o f the core, eventually contributing to urban integration, social cohesion and local economic development by creating conditions for a process o f sustainable revitalization o f the historic core and tounsm development. Within this context, the main expected benefits o f the project activities in Karak include: revitalization o f the historic core to support the recovery o f the centrality o f the cityscape; overall improvement o f the quality o f the urban environment in the core area and reversion o f the decay o f the socio-urban fabric; improvement o f the capacity o f the municipality to manage and maintain the public and heritage assets, and creation ofnew opportunities for local economic development. 46 Annex 1.2 Appendix 4: Madaba Municipality Profile - Background 1. The city o f Madaba lies at about 30km south-west o f Amman. The city, built on a natural elevation o f the trans-Jordanian plateau, commands the surrounding fertile countryside that extends to the north, south and east. Its history goes back 3,500 years. It was here that David's forces defeated the Ammonite and Aramean coalition in the middle o f the ninth century BC. Madaba's strategic position meant that it was always inhabited and the land was a safe and protected area over the ages. The Nabateans governed the City during the first century AD, and by the second century, Madaba became gradually a provincial Roman city. This new status gave Madaba a new lease of life. Inthe sixth century bishops were assigned to Madaba, thus buildingso f religious importance began to be constructed. 2. Nowadays, many archaeological sites are scattered within the urban core, witnessing different eras from the Iron Age up to the present. In 1991, an Archaeological Park was established in order to present and integrate within the urban fabric all those different layers o f city history. 3. Madaba is also called the city o f the mosaic, whereby literally hundreds o f mosaics from the fifth through the seventh centuries are scattered throughout Madabas churches and homes. The first mosaics were discovered, purely by chance, during the building o f the new houses using squared-up stones from the old monuments. The famous historic sixth century Byzantine mosaic "Map of Madaba", showing Jerusalem and other holy sites, was discovered in 1896 and maintained in the Greek Orthodox Church o f St George (more commonly known as "the Church o f the Map"). 4. Modem Madaba i s characterized by a morphological scheme converging on the historical core and supported by a series o f radials. The main features o f the historic fabric are represented by the early Ottoman village (1880 -1918), and by the subsequent phases o f urban growth, which occurred until the 1940's, when the Ottoman village road network were expanded and new roads opened to accommodate urban expansion. The urban form i s also strongly characterized by a peripheral Ring Road, which marks the limit between the outer expansion districts and the inner traditional urban core. Context 1. The Madaba Governorate (2,008 km') lies in the mid-southern region o f Jordan. The Qasabat Madaba District (42% o f the Governorate territory) has a population o f approximately 130,000 (22,700 households). The Greater Municipality o f Madaba comprises a total area o f approximately 80 sq.km, combining five different settlements, namely, Ma'een, Mureijat & Hwaiyeh, Faysaleyeh, Jreineh and Gharnata & A'resh, in addition to Madaba city. Madaba's demographic growth was at 21% over the period 1993-2003, against 23% at the national level. With 48% o f its inhabitants below the age o f 19, Madaba boasts a very young population. The average annual household income in the Governorate i s JD 4,948, with 40% o f the households earning less than JD 3,600 and 73% less than JD 6000. However, the Governorate poverty rate has declined inrecent years from 13.15% in 1997 to 10.8% in 2003. 2. Only 36% o f the 15+ years o f Madaba Governorate are economically active and only 10% o f the female population. Students constitute 1/3 o f the inactive population, women at home 50%. 31% o f the population consists o f employees, mainly in labor-intensive sectors such as public and armed forces (33%), the commercial sector (20%) and education. The construction sector counts less than 6% o f all employed (as most o f the masons are from outside Jordan); hotels, restaurants and real estate together reach 3%. Women are mainly active inthe education (42%) and more generally the informal sector. There are more than 3,000 foreign laborers (most o f them Egyptians) worlung in the Governorate, mainly in agriculture, construction and unskilled production. Despite a significant decrease over the last two year, unemployment at 15% is higher inthe Governorate than at the national level (13%). Polls indicate that 2/3 o f the inactive population do not believe inthe existence o fjobs for them. 47 3. Businesses in Madaba city are mostly inmanufactunng and small: 50% o f them employ only two or less employees. Their market i s the neighborhood, and commercial activity concentrates on three streets. The informal sector i s led by women between 25 and 45 years and attracts many new entrepreneurs who have received training inhandcraft and food production. The informal sector products are traditional food, handcraft and various traditional and modem services. NGOs and community-based organizations support through training programs plays an important role for the informal sector. 4. Similarly to the other project municipalities, the city if Madaba, particularly its historic core, is affected by the low capacity to efficiently collect and dispose o f solid waste, particularly with regard to regular street cleaning. With regard to traffic, while the city center remains congested, the recent relocation o f the city bus station far from the center has not dramatically contributed to the reduction o f traffic inthe city, but rather further undermined the client base o f a number o f shops and other businesses that in the past benefited from the proximity o f the bus station. The limited availability of budget for upgrading o f existing infrastructures, and operation and maintenance o f municipal assets i s reflected in the overall decaying quality o f the historic core, with uneven quality o f street paving, inadequate street lighting and poor quality (or non-existence) o f sidewalks to allow safe pedestrian movements across the city. The city core also suffers for the lack o f recreation and green areas. 5. While Madaba Governorate does not have a university, two new universities and a military school are under construction. There are however a "Knowledge Station" in the city offering IT training and internet connections as well as a vocational Mosaic School. 6. Scattered archeological sites and a total o f 130 pre-modern buildings characterize the urban core o f Madaba. An archeological park presentingthe different layers of history was established in 1991. Even if there is only little significant cultural supply (folkloristic festivals, annual open air concerts by foreign orchestras), the potential i s great, since Madaba's communities have rich traditional culture (traditional festivities, folklore songs and dances, carpet weaving and food), even if there i s a lack o f appropriate performing venues. 7. After a peak in 2000, tourism has reached its minimum in 2003, with 39,000 foreign tourists (about 75% Europeans) visiting the main attraction, the Church o f the Map, against 180,000 in 2000. The other main assets are Siyagha-Mount Nebo, Mukawer, and Mae'en hot springs. Tourism facilities are rare in Madaba with seven restaurants and 556 hotel beds (1 star and less), mainly in the Souq area. The tourism sector employs little over 200 people. 8. Here follows a summary of the municipal budget o f the municipality of Madaba in the years 2003-2005: Madaba Revenuesandexpenditures 2003 2004 2005 JD JD JD Other exp (including land acquisitions) 201,069 I 160,789 1 296,250 48 Organizationalstructure,Staffingand MunicipalManagementTools 9. The preliminary institutional and capacity assessment o f the municipality o f Madaba highlighted a series o f key issues. A more detailed assessment will be carried out under the M&E subcomponent o f the project to identify priority areas o f intervention, related baselines and indicators to monitor improvements in terms o f institutional strengtheningicapacity building. K e y identified issues are as follows: Technical Units 10. The municipality has two technical units, namely (1) Planning & Regulation, and (2) Construction. The latter i s responsible for supervising, constructing and maintaining roads, buildings and parks, and for fixing and maintaining street lighting, inaddition to preparing tenders. 11. The Planning & Zoning unit includes five sections: licensing, survey & drafting, acquisition, studies & documentation and archive. It employs a total o f three engineers, two manual drafters, one surveyor and four supervisors. The main responsibility o f this unit is to control the development within the municipality area based on the approved structural plan. Each local area has its own local committee who would look into the zoning issues and approve changes before new requests are processed and approved. 12. While there is no specialized heritage unit within the municipality organizational structure, the Planning & Zoning unit i s in charge o f controlling violations, since the heritage buildingswithin the city core are listed, cannot be demolished and development o f adjacent buildings i s controlled in terms of height (no more than 2 floors above the street level) and set-backs and demolitions. Although some buildings are de-facto violating regulations related to projections over streets and walkways, this seems to be a common practice not penalizedby the municipality. Financial Unit 13. Inaddition to the technical units, the municipality also has a Financial Unit.The functions o fthis unit have been partially computerized on the revenue part with the support of SIYAHA (former "Jadara Program" financed by AMIR). While the program focuses on business licensing, it also covers budgeting and all revenues except from zoning/amelioration fees. In addition, also the property tax collection is computerized and connected directly to the Ministry o f Finance. N o internal networhng o f the different financial systems i s available. Traflc Management 14. After the municipal traffic committees were dismantled, the municipality has no unit in charge o f traffic and traffic-related problems. However, an officer is dedicated from the municipality to participate injoint meetings with the governor whenever there is a need to solve an urgent traffic problem. The traffic tickets are documented and collected through the municipality court, which has its own computer system and transfers the money to the municipality. Garbage collection 15. The city appears to have street cleaning problem due to insufficient staff and equipment. The municipality has a total o f 183 cleaning workers, out o fwhich 18 are dedicated to the city center and three to the commercial area. Five garbage compactors are in fair conditions, one o f which is dedicated for the city center. 16. Recently the municipality decided to increase its worlung shifts to three at the commercial center o f the city, where the third shift works form 10 pm to 3 am. The city has uncontrollable rodent problem, and lacks the techniques and qualified personnel to manage pest control. T h i s unique situation is primarily due to the fact that the Madaba wastewater treatment plant i s located near the city center, 49 livestock room freely in its surrounding and half demolished houses and caves provide shelter to pests, making it difficult to control them. 17. In addition, the city narrow roads, especially in the tourist area, impede efficient garbage collection, while the inadequate number o f garbage bins, their distribution and the lack o f space to locate them along the main streets, mainly affect the areas at the outer edge o f Madaba. The municipality i s in need o f equipment, garbage bins, and expertise inpest control. Computerization and GIs 18. The municipality has no GIS system. It owns a total o f 32 personal computers with basic Office programs. N o network and specialized soft wares are available. The financial system however is locally computerized, without being connecting to the land or building data. All taxes, licensing and other fees are fed into the system. Issues 5. The potential for social and economic development of the historic core of Madaba is not fully exploited due to a series o f key issues affecting such development. These include: (1) ongoing deterioration o f the urban fabric and residential pauperization, forcing the middle classes to leave the historic core, progressively replaced by the elderly, the poorer and migrant population; (2) weakening o f the commercial role of the historic core, followed by a disorganized development o f commercial activities along the Ring Road; (3) physical decay, traffic and parking congestion, visual clutter and incomplete storm drainage network; (4) lack o f maintenance, neglect and encroachment of the built cultural heritage, due to the absence of an appropnate protecting legal framework and the lack o f awareness of its value; and (5) stagnation o f the local economy, characterized by under-utilized local potential assets (both human and cultural) and socio-economic domination by the urban pole o f Amman. Development Strategy and Objectives 6. In order to support an increase in tourist visitations and expenditures within the historic core, outside the circuit o f the archeological sites, the project will intervene by upgrading the street network and buildingfacades within the historic core. The restored historic building o f Saraya to the South and the Church o f the Map node to the north will provide two main poles o f attractions for pedestrian movements within the city. While funds will be made available to support tourism-related initiatives within the historic core, the municipality will be supported to sustain tourism-based development through the creation o f a unit dedicated to the management o f the historic core, its assets and quality o f infrastructures and services. 7. InMadaba, like inother cities targeted by the project, the key objectives to revitalize the historic core and improve the overall quality o f the urban environment will be achieved through a combination o f investments, capacity building and regulatory interventions. In this context, that city revitalization will be a positive transformation process improving livability o f the historic core, fostering preservation o f irreplaceable cultural assets and ultimately creating the necessary conditions to enable local economic development. 8. The USAID Siyaha project providing grants to tourism-related SMEs will be implemented in parallel to the project and develop a model for replication and application to the other project municipalities. 50 Annex 1.2 Appendix 5: Salt Municipality Profile - Background 1. The city o f Salt i s one o f the most consolidated and old urban settlements in Jordan . The urban form o f the city i s strictly related to its development on three hills around a spring in the Akrad Valley. The quality o f the mass o f its historic buildings, spread out over the hillsides like an architectural amphitheatre, makes Salt's urban landscape quite unique inJordan. A web o f footpaths and stairways run across and along the slopes, while a limited street network follows the contours whenever possible. 2. Salt owns its beautiful golden stone houses, clustered on the slopes o f the hills without obstructing the view or intruding into the privacy o f surrounding buildings, to the Ottoman period, the "Golden Age" between 1890 and 1920, when a significant flow o f population migrated fiom surrounding areas to the city. After 1920, the European influence and new materials such as steel and concrete increased. Salt stone was not used after 1950, and the quality o f craftsmanship declined. 3. Nowadays not only does the built fabric o f Salt retain its quality, but also much o f the traditional way o f life such as the Souq and the pedestrian circulation, which are still relatively preserved and show a character totally different fiom the other cities o f Jordan. The central Saha (square) i s the focus for the main institutional and merchant houses and commercial buildings. The historic core is still a bustling traditional market town, adding up to a mixture o f heritage, charm and tourism potential, which has been so far mostly unexploited and a presents great potential for development. Context 4. Salt Greater Municipality has a total area o f approximately 80 sq.Km and it is responsible for eight different areas namely, Salt, Eira, Yarqa, Wadi Elhour, Allan, A1 Yazeideyyeh, Zai, Im Jouzeh and Rmeimeen. Salt city i s the main city in the Balqa Governorate( 1,076 Km2), located in the middle region o f Jordan. Salt i s located about 28 Km north-west o f Amman and fails under the jurisdiction o f the Greater Salt Municipality. 5. Inthe last ten years Salt nearly doubled its population, registeringan annual growth rate of lo%, which i s about four times bigger than the Jordanian one, currently at 2.5%. Furthermore, Salt boasts a young population, with about 45% below 19 years, mostly school, college, or university students. Thus, youth should be a main focus o f any revitalization efforts in the city. The average annual household income o f Salt Sub-District is estimated to be JD8,045, which may be considered as one o f the highest incomes in Jordan; in fact, in Salt only 4.43% o f the population is under the poverty line and the poverty rate has declined by 10.52% since 1997. 6. Only 39% o f the 15+ year old population o f Balqa Governorate is economically active and only 12% o f the female population. Students constitute 1/3 o f the economically inactive population, women at home almost 50%. 34.4% o f the population i s employed, only 10% o f the women, mainly in labor- intensive sectors, such as public and armed forces (16% o f the employed), commercial sector (13.4%) and education (11%0). Economically active women are mainly employed in education (34%) and more generally in the informal sector (e.g. food processing, handicrafts, embroidery, etc). By the end o f 2003, there were 8,345 foreign laborers in the Governorate (71% o f them Egyptians) mostly employed in the construction sector, agnculture and unskilled production. 7. The unemployment rate inBalqa Governorate has significantly decreased inthe past years, and in 2004 it stood at 11.8%, lower than the national one (13%). Nevertheless, lack of employment still remains a problem for Salt residents, particularly as the unemployed are mostly educated, holding diplomas or university degrees. Surveys at Governorate level indicate that almost 2/3 o f the economically inactive population do not believe in the existence o f jobs for them. Given the proximity to Amman, Salt has a highlevel o f dependency on Amman interms o femployment andjob provision. 51 8. The informal sector employs mostly menand women between 25 and 45 years o f age. Half o fthe informal operators run their operation by themselves, while the rest employs only 1-2 persons; in most cases the home-based activity is not the major income o f the family, but a supplement, averaging around JD 570 per month. The informal sector attracts mostly young women entrepreneurs after they attend training courses like beauty care, embroidery, handicrafts and food production. Some o f the major problems faced by informal operators there are the lack o f marketing and outreach programs, the absence o f facilities to display and sell products, and access to micro-finance. 9. Businesses in Salt city, mostly in manufacturing and commercial, are small, employing on average 2 or less employees. Manufacturing establishments are slightly larger than Commercial ones. There are two main commercial streets that encompass the commercial and service activities (Yarmouk Street and Maydan Street). Growing congestion and traffic problems within the city centre and the lack o f parking areas are listed as main obstacles to their business by the owners o f such activities. 10. Among the economic activities located inthe city core that could easily benefit from tounsm and city revitalization are the construction sector (small enterprises and craftsmen); handicraft (formal and informal production) for the typical products o f the city (such as traditional food, embroidery, wood carving, etc) and for mosaic learning (work opportunity for educators) and production; commercial (shops inthe historic core); tounsm-related activities (restaurants, hotel, other accommodations, tourist guides, tourist transport); and services relatedto all the above. 11. The results o f the Census 2004 indicatedthe existence o f 17,199 dwellings in Salt city (equivalent to 45% o f all dwellings in the governorate). Almost all households have access to the public electricity network, yet electricity cuts were one o f the reported problems by respondents in the field survey. Similarly almost 97% o f the households are connected to the public water network, yet around 38% reported to suffer from water cut-off. The sewerage public network is not as prevalent, reaching only 47% o f the households, the rest use septic tanks. Most households (96%) depend on kerosene or gas heaters for warmth inthe winter, while only 4% have a central heating system installed. 12. Despite all the investments in street paving and streetscaping supported by donors (JBIC in particular), the particular morphology o f the city core and it sheer size, together with the limited availability o f municipal budget allocated to the management of existing infrastructures, affects the overall urban quality o f the historic core, with uneven street paving, inadequate street lighting and poor quality (or non-existence) o f sidewalks to allow safe pedestrian movements across the city. The city core also suffers for the lack o f open recreational spaces. Differently from the other project municipalities, city o f Salt appears to have acceptable standards o f street cleanliness and garbage disposal. 13. By and large, the proximity to Amman makes Salt and its immediate region dependent on the services provided by the Capital, especially in terms o f specialized health care, recreational activities, higher education, shopping, and other services. 14. The old city i s a good example o f traditional Ottoman settlement from early 19th century, with a large number o f still preserved historic buildings in yellow limestone. According to the inventory carried out by the municipality o f Salt, there are about 657 o f these traditional structures including public and pnvate houses, streets, stairs, but also churches and mosques, mostly scattered throughout the old Salt areas o f AL-Qla'a, AL-Jada'a and As-Salalem. Some o f them were successfully renovated. The most important heritage preservation potential for the community remains the adaptive reuse o f heritage buildings. Besides the historic buildings, there are other cultural assets o f the city that might have a potential for tourism valorization, such as the Salt Municipality Folkloric Group, the Salt Group for Folkloric Art, the Balqa Performing Arts Society, the Salt Cultural Centre, the Salt Handicraft Centre, the typical agricultural products, as well as the traditional games and festivals. 15. The Royal Scientific Society in 1994 produced a study which classified the heritage buildings in Salt into three categories based on their conditions, out o f which only 19 heritage buildings were classified as "A" class, highly important and to be protected in their integnty. Since the current heritage 52 law does allow municipalities to protect their listed heritage buildings and enforce special building regulation based on each individual case, since 1994 there have been 65 illegal demolishing o f historic buildings inthe core. 16. Currently, there are no mainstream tourists coming to Salt, therefore the supply o f tourism related facilities i s almost non-existent. Understandably, people in Salt are not used to interact or have cultural exchanges with foreign tourists. Rapid opinion surveys showed that people are also not fully aware o f the general benefits o f tourism for the whole city. Onthe other hand, they are aware o f their city's importance in Jordan as well as of the value of its distinctive old buildings and streets, and they care for the preservation o f its heritage and archaeological sites, showing openness to support the process o f city-core revitalizations. 17. Here follows a summary o f the municipal budget o f the municipality o f Salt for the years 2003- 2005: Salt revenuesand Expenditures 2003 2004 2005 JD JD JD Total revenues 3,656,838 3,282,400 3,768,491 Ownsources except land and buildingtax 1,709,944 1,884,466 2,293,267 Land and BuildingTax 343,016 420,850 500,224 Fuel tax 1,006,101 977,084 955,000 Grants from central government 597,777 20,000 Total expenditures 3,401,240 3,415,509 3,488,276 Salaries and related expenses 1,277,006 1,289,677 1,366,225 Maintenance fees 262,570 192,410 225,339 Capital investments 1,240,663 1,25 1,100 1,154,603 Loan interest 227,657 225,763 204,408 Other exp (including land acquisitions) 393,344 456,559 537,701 Totalbudget deficithrplus 255,5= (133,109) 280,215 Organ.,dional Structure, Staffing and Municipal Managemen Tools 18. The preliminary institutional and capacity assessment o f the municipality o f Salt highlighted a series o f key issues. A more detailed institutional assessment will be carried out under the M&E subcomponent o f the project to identify priority areas o f intervention, related baselines and indicators to monitor municipal improvements interms o f institutional strengtheninghapacity building. Here follows a summary o f key preliminary identified issues: Technical Units 19. The total number o f municipal staff i s 595. The municipality has three technical directorates, namely (1) Engineering Services, (2) Planning and Zoning, and (3) Studies and Development. The Engineering Services directorate is responsible for supervising, constructing and maintaining roads, buildings, parks and fixing and maintaining lighting units, inaddition to preparing tenders. 20. The Planning & Zoning (P&Z) directorate consists o f five sections: licensing, planning, naming & numbering, survey & acquisition, and heritage. The P&Z unit is primarily responsible for issuing buildinglicenses and monitoring the buildingprocess. They ensure that the planning and land use o f the zoned areas i s respected, and initiate zoning changes when necessary to suit the existing conditions. The city core i s almost saturated, with very minimal applications for buildinglicensing (only one application for the year 2005). However, when applications related to the historic core are submitted, they are passed to the heritage section for evaluation and recommendations o f approval for any proposed addition or alteration, based on the specific municipalregulations for cultural heritage preservation. 21. The structural plan approved in 1983 is considered the base for zoning and land use, however, it IS subject to continuous updates to reflect the city expansion needs. The P&Z directorate monitors all new constructions during the construction phase to reduce violations. Contractors need to be certified by the Salt contractors' society. However, in the old city some buildings illegally project over the walkway or 53 street, and are fined different rates according to the specific land use. Naming and numbering o f historic cities is very basic, whereas the heritage buildings are named with fixed plates, however, the Unit lacks staff to extend the process to all buildings. 22. The directorate i s currently managing with the current staff (2 architect and 3 drafters), but it i s in need to strengthen the team with the addition o f architects, surveyors, drafters and supervisors to be able to analyze the developing situation and recommend updating o f the structural plan based on it and the future requirements. 23. The hentage and archeology section was created in early 2000 and initially it reported to the Studies and Projects Unit, until 2004, when it was moved under the P&Z unit. It started with one architect and one mosaic technician, and currently has only one architect. The section is in urgent need for staff (architects, surveyors, drafters, engineers, and photographer) to be able to update data on heritage buildings, monitor their protection and prevent demolishing o f historic buildings. It also needs to be empowered with the authority to produce and enforce special building regulations for the city core to protect the heritage buildings, especially from the intrusion o f adjacent non-heritage buildings. 24. Developing public awareness towards the importance o f such heritage buildings for the identity o f the city and their potential to support local economic development is an essential role to be played by the municipality, thorough the existing hentage and archeology section (or the upcoming City Core Development unit,to replace the former as part o f the project). Financial Unit 25. The municipality does not pursue the collection o f the real estate tax directly from individuals declining to pay, and they cannot identify the plots entitled to pay. However, any application to be proceeded within the municipality must have a clean financial record, including payment o f property taxes. The municipality has collected 600000 JD o f real estate taxes during the period o f 3/05 to date, which coincides with the period when the municipalities started collecting their taxes rather than through the Ministryo f Finance (MOF). 26. The municipality lacks sufficient staff and the tools to identify the plots that are due to pay taxes and/or municipal services' fees, therefore the collection for such taxes or fees i s not systematic. Nonetheless, the municipality is collecting fees on behalf o f Fuhais, Mahes and Sbaihi municipalities for 10% o f the total collected. Also, it collects the taxes o f education and wastewater on behalf o f Ministry o f Education (MOE) and Water Authority (WAJ) withinthe Salt Municipality area for a charge o f 10% o f the total. Trufjc Control 27. The municipality has n o section related to traffic and traffic problems, therefore, when necessary, it refers to the traffic police o f the Governor office to manage traffic issues. Salt municipality has nine dedicated traffic police officers. With respect to the collection o f traffic tickets. Salt id one o f the municipalities that agreed with Amman municipality (3/2005) to input the collected tickets data to the computer system charging 10% o f the collection to enable the municipality to request the rest to their account. The collection o f the tickets for Salt municipality from 99-3/05 was 55000 JD. Garbage collection 28. The city appears to be fairly clean and has a working garbage collection system. The municipality i s divided into four areas, each area has its workers and supervisors. The garbage presses are also divided to serve the different areas within time schedule. Garbage collection for the narrow roads and stairs is done by carts and animals. There are 168 cleaning worker, 4 main supervisor and 4 supervisors. The city core has 31 workers, one main supervisor and two other supervisors, while the Japanese project components are served by 16 workers and one supervisor. The municipality has 16 garbage press (big and small), four small trucks and five animals. 54 Computerization and GIs 29. Since 1999, the municipality initiated a process o f computerization o f transactions. The first phase (financed by individual donation o f 25000 JD) included items like: employees' records, salaries, refunds of roads improvements, garbage collection fees (electricity un-served houses, 14 JD/year) and rents. Second phase (36000 JD) includes a comprehensive control system on the municipal budget. The municipality has network and intranet connections via fiber optics and lease lines. However during the thirdphase they aim to connect all the different local areas to the municipality system. 30. They have a total o f 96 personal computers, in addition to laptops, printers and plotters. They have an efficient computer system and providing assistant to other municipalities such as Karak to computerize their own system. They have purchased licensed Microsoft systems. The municipality i s planning to license their oracle based systems which shall cost about 25000 JD, however as the C V D B (Cities and Villages Development Bank) held and agreement with oracle to connect the municipalities with their ministry,they shall seek information inorder not to duplicate efforts and cost. The municipality has developed its own web site (www.salt.nov.io) and (info@,salt.gov.io) for information. 31. The GIS section is part o f the studies and development directorate and is very active in Salt municipality, with a qualified team o f six (2 survey engineers, 2 space planning engineers, 1 drafter and 1 surveyor) working on Arch GIS software, two work stations. The municipality has started its GIS system in 2003 by an agreement with the Royal Geographical Center to provide aerial photos, then another agreement to activate the GIS section at the municipality by providing training, and lately in 9/2005 a three years agreement with the Land and Survey Department (LSD) to modify the plot boundaries to eliminate shiftingand discrepancies between zoning maps and land subdivlsion maps o f LSD. Issues 32. Salt faces today several key issues that directly affect its potential or socio-economic development. The unregulated and unmanaged city growth coupled with the specific morphology o f this city, built on a series o f hills, i s creating urban sprawl, increasing the pressure on the city-core, its services and commercial activities. As a consequence, some o f such services and commercial activities are now migrating to the outskirt o f the city, where the customers are and access is easier. Nonetheless, the city- core appears increasingly affected by traffic and parking congestion, physical decay, visual clutter, lack o f open spaces and other community facilities. The built cultural heritage while on the one hand i s threatened by lack o f maintenance, neglect and encroachment, on the other hand it represents an invaluable asset and a major opportunity to generate economic development and regenerate the socio- economic fabric o f the whole city. This would also have the clear benefit o f strengthening, together with the economic base o f the city, also its identity, further contributing to counteract the current gravitation (and economic dependence) on Amman City. DevelopmentStrategyand Objectives 33. The revitalization strategy for Salt will focus on the center o f the historic core, the Saha (or square), aiming to recreate a central space that would become a gravitational center for social interactions within the historic core. This intervention will be also supported by the implementation o f a traffic and parlung management plan. A number of historic buildings surrounding the square will be rehabilitated and funds made available to private owners to support their adaptive reuse for tourism-related activities o f such buildings. A heritage fund at municipal level will be also created under the project, together with a special unit within the municipality dedicated to the management if the historic core, its assets and infrastructures. 34. The main expected benefits o f the project activities inSalt include improved quality and livability o f the historic core, with benefit for all city residents, occasional visitors and tourists, recovery o f the centrality o f the cityscape, reversion o f the decay o f the socio-urban fabric, creation of an array o f new opportunities for local economic development. 55 Annex 1.2 Appendix 6: AjlounMunicipalityProfile - Background 35. Ajloun i s located about 50kmnorth o f Amman, near Jerash. The city o f Ajloun is more known for itsrenowned Islamic castle, built in 1183-1184, dunng the rule o f Saladin. The castle was briefly taken by the Mongols in 1260, then reoccupied (1262) by the Mamlukes under Sultan Baybars. Historically, Ajloun was an important center for northern and central Jordan, especially during the Ottoman period. A number o f histoncal assets are still located in and around the historic core o f the town. They include the Ayyubi Mosque, the main central place with its famous Eucalyptus Tree, the Vegetable Market, Mausoleum o f Sidi Badr, St. Gorgeous Church, in addition to several courtyard traditional houses in histoncal neighborhoods such as a1 Maqatish. However, the most important historical and archaeological asset o f Ajloun remains its Citadel (Qala'at a1 Rabad), a 12th century Arabian castle. The castle is in a reasonable state o f preservation. It represents a fine example o f Islamic architecture, located o n top o f a hillwithinthe nchnatural environment, approximately 3 kmto the west ofAjloun town center. 36. Withregardto the natural assets, Wadi a1Tawaheen is the major valley o f Ajloun Governorate. It is an important asset o f natural beauty that also includes historical artifacts, like the watermills, and lies at the heart o f the area, very close to the town o f Ajloun. Considering the beauty and historic value o f this area and the scarcity o f green areas inJordan, this valley i s considered a cultural asset on national value. 37. Following the amalgamation o f 2001, the municipality o f Ajloun comprises three urban centers, namely Ajloun, Ain Janna and Anjara. The area is an overwhelmingly rural region o f natural beauty and histoncal richness. It is located inthe north o f Jordan, approximately 70 km to the north o f Amman and 40 km to the south o f Irbid. The population o f Greater Ajloun is about 39,000 according to the 2004 Census (Ajloun's population i s 8.522, Anjara's being the largest town with a population o f almost 20,000). The main urban functions are distributed between Ajloun and Anjara, Ajloun being the administrative, Governorate, and commercial center; and Anjara the residential one, while Ain Janna forms a small residential arm o f Ajloun. 38. Ajloun urban structure develops on a stepped cityscape that follows the mountainous slopes within which the three urban centers are connected to each other through a network o f main roads. The urban temtory is characterized by a pattern o f sprawl, with new buildings spreading towards the rural areas, threatening forests, olive groves, natural valleys and other fertile lands. Residential areas closer to the town centers are more dense. In Ajloun city core, new buildings are intermingled with remnants o f some historical and heritage buildings. 39. Despite the wide green cover within the municipal boundaries o f Ajloun (where about 75% o f land i s occupied by olive groves and forests, while urban uses account for approximately 12% o f land cover) the approved land-use plan dedicates 86% o f land for hture residential expansion. This results in an overly zoned plan that encourages more scattered urban development towards the natural assets and forested areas. Context 40. The Governorate o f Ajloun was established in August o f 1994. There are five municipalities in Ajloun Governorate: Greater Ajloun Municipality (including Ajloun, Anjara, Ain Janna, al-Rawabi, al- Safa); Al-Oyoon Municipality (including Bao'on, Rasoon, Osara, Aqan); Al-Juneid Municipality (including Sakhra, Ebbein), Al-Shafa Municipality (including al-Hashemiyya, Halawa, al-Wahadneh) and Kofranja Municipality (including Kofranja, Rajeb). 41. 67.4% o f the total population of Ajloun Governorate is urban. The average household size in the Governorate is 6.7, which is above the country average o f 5.8 (2002). Population densities vary between 50 and 350 persons per hectare (gross). Ajloun city i s the Governorate centre. 56 42. Apart from public administration, the main economic activities in Ajloun Area are based on farming and olive tree plantations, which are also the base o f its industrral activity o f olive pressing and exporting. Ajloun area i s considered one o f the agricultural priority areas for Jordan. The major constraint on the development o f agriculture i s water shortages, mainly due to problems inthe distribution system and the dependence on rainfall. 43. The rate of unemployment in Ajloun is 19% (2003). The majority o f the workforce (41%) is employed in public administration and defense sectors, followed by agriculture (15%), education (13%) and retail and wholesale. Ajloun i s one o f the most illiterate and poorest regions inJordan. 44. The commercial sector in Ajloun, Anjara and Ain Janna covers activities o f general trade, professional and personal services, food and beverages, maintenance services, hotels, sports and education services. The sector contains 797 business units - 40% are located in Ajloun, 39% in Anjara and 21% inAin Janna. 45. Ajloun area, with its pleasant nature, appropriate climate, important historical, cultural and archaeological heritages, and its close location to road links with Amman, has a potentially dynamic tourism environment. The main activities could comprise ecological tourism, cultural and archaeological tourism, recreation and holiday tourism, especially in Summer. However tourism i s not yet fully developed in Ajloun. Castle visitors spend limited time in Ajloun itself and pass quickly through Anjara and Ajloun centers on their way to the Castle. This can, in part, be blamed on the area's undeveloped tourism infrastructure - two 2-star hotels with 60 rooms, three tourist guides, Ajloun Tourist Office with limited activities, limited existing tourism facilities (cafes, restaurants, and entertainment activities like bars and nightclubs) o f insufficient quality and quantity. Moreover, the absence o f organized traffic and car parlung facilities, noisy and polluted central areas with difficulties inpedestrian access, all negatively affect the development o f tourism inthe area. 2003 2004 2005 - Ajloun Revenuesand Expenditures JD JD JD Total revenues 1,161,807 918,086 1,33 7,000 Own sources except landandbuilding tax 237,349 234,149 430,000 LandandBuilding Tax 9,198 133,613 200,000 Fueltax 729,35 1 550,323 707,000 Grants fromcentral eovernment 185.909 Issues 47. As presented in the above sections, the main issues affecting the municipality o f Ajloun are as follows: (a). The overly zoned planning o f residential areas and urban development i s sprawling towards the natural areas surrounding the city. This, coupled with steep topography, creates scattered, horizontally expanded development. Consequently damaging the natural character o f the area and threatening the valuable natural landscape. In addition, the uncontrolled urban sprawl is difficult and costly to be served with infrastructure and access. 57 (b). Despite the large amount o f tourists visiting the Castle, tourism has no impact on the socio- economic life o f the local community. There is no penetration o f visitors into the city and n o tounsm-related investments within Ajloun or Anjara cores. (c). Tourism infrastructure and services are very weak; (d). Semi-rural urban core inAjloun is increasingly losing identity due to aggressive development and deforestation along the city fringes, which i s eliminating the penetration o f green areas within the urban fabric. (e). The contained core o f Ajloun i s increasingly unable to accommodate all the services and facilities required by future development. DevelopmentStrategy and Objectives 48. The development strategy for Ajloun will aim at: a) preserving and protecting the natural landscape o f Ajloun from urban sprawl and deforestation. Special emphasis will be given to the natural and cultural landscape surrounding the castle, as it represents a main historical and natural asset for the Jordan population and the future tourism development; b) Enhancing tourism development by facilitating investments in eco-friendly tourism activities in proper regulated city zones; and c) creating attractive venues for Ajloun community and Ajloun visitors to enjoy and interact within Ajloun city core and along the path from Anjara to the castle. Focus will be based on achieving balanced interchange between urban and rural characters. 49. The development strategy in Ajloun differs from the other four project cities. The range of development will exceed the boundaries o f the city core into the surrounding boundaries o f the urban settlements. The regulatory component in Ajloun will target special regulations and land use alterations within the greater municipality boundaries. The aim o f the special regulations will be to achieve sensitive urban development in harmony with the natural landscape, and to contain urban development and facilitate the penetration o f nature into the fringes o f the urban settlements of the city core to restore its unique identity. 58 Table 1 Basic MunicipalIndicators - . . . . Average Householdsize . . 5 Governorate 5 9- 5 6 5 7 5 5' 5 8 67 Municipality - _.- NAV NAV NAV- NAV- NAV CltvCnre NAV NAV NAV-' NAV- . NAV La?l.d.lad.m.in.istet.ive)Areaha .. ................................................................................................ " ............................................................................ ."............................ ................................. " ................................................................. 8. Governorate . ._ 41,000:.................................. 111,900: 42,000 : 349,500'_......." 94,000; ............. ............. 9. Mu?lciPali!Y.. ... _ _ ..... _Ha. . . . . . . . . . . . . . . ............................................................... 2979.7' 4561.5. ....................................... 5186.3i 7616.0; 2214.1-. 10. City Core ha 41.6; 54.7: 48.7' 51 -..................60 P!?p!!!afion.C?ensity......... .......................................................... .................................................................... ...................................... ~ ............... -. ... ........ Governorate 11. personsiha ............ 3.75.:i 0.58; 1.38' 3.08; 2.82 ..................................................................................................................................................................................................................................... 12. Municipality personsiha 18.89; 13.49' 19.19i 13.05; 18.5 ".................".".......................................................................................................................................................................................... 13. Citv Cote nersonsha 186 h?! 258.59; 178.48; 5xi.xni 43.20 .............................................................................................................................................................................................................................................. Main Economic Base ..................................................................................... ..._..... .A@cu!.!!!re ~ " ........................................................................................... 14. Governorate tFe:.....Indus.~.!..?~ic~!yufel.etc....*gr.c!!!t!E .. ........... .......... Pgr!.!!!!!!??:......................................... ...... ............Agr!cU't"fe ~ ........... Agr!!.u!!!?e 15. Municipality type: Industry/ agriculture, etc Trade Agriculture Agriculture, ................................................. ................................................................................................... Industry Trade Agriculture 16. City Core type: Industry/ agriculture, etc Trade : Trade Trade Trade Trade 1 MunicipalityLabor Force ParticipationRate I Total % of total city population 34.9% 37 9% 38 1%- 39%. 33.9%' Male % of labor force 61 5% 61 1%" 61 3% .- 63 9%. 57 1%1 Female % oflabor force 8.1% 14 9% 13 8% 14 5% 10 5% Unemployment 17 Governorate % of labor force 18 5% 24% 17%- 14 4% 16 6% 18 Municipality %of labor force NAV NAV, NAV. NAV NAV 19 City Core % of labor force 16 3%. 24%. 14.4% 14 3%' 14 6% Poverty 20 Governorate % of total population 18.4% - 122%: 10.7%: 17 8%; 9 7% 21 Mu . . . . . . . . - . . NAV NAV NAV NAV " "..NAV .- .. . . . . _ . 22 -rltv Core NAV NAV NAV NAV NAV I..M!!!!!eipa! ..sc!?!ses ................_........................................................ ........................................................ ................................................................ ............................................................................................................................ ..................................... Governorate " ................................................................................................................................. ............................................................................................................................................................................................. ................. ................................................. 23. Water %..heusehp!ds,i?..c!ty...connected.tomai!?s.... .................................................................................................................................................................97.2%:...................................... 99.3% 97.4%: 98.2% .......... 99.2% ......................... 24. Electricity........................................................................................................................................... %householdsin city connectedto mains._ _ 91.3%i..................... ................................................................82.4% ................................................................................................................................................................... 25. Sewage %householdsin city connectedto mains.......................................................... 89.4% 94.9%! ................................................. ........................................................................................................................................................... 28.7% lo%! ~ " 47% ........................ 52.3%;........................................ 30.3% 26. Streets ............................................................................................ %pavedand !? good.E!?djt?o? ................................................................................................................................................................................ .City,Co??................. .................................................................................................... ................................................... ............,............................................. .......,................................................. ............................................. .."................................................. ~ ~. " 90.4%.......... " 99.7%: 85.7%;~. 98.6% 99.3% ................................................... ._ 28. Electricity %householdsincity connectedto mains 100% 100% 100%; ................ .............................................. 1OO%i 100% " : I ......................... 29. Sewage ".. / %householdsincity. connectedto mains . .......... 96.9%:............................... (((..."... ^ 99.3%; ^ 95.8% I 99.7%; 96.7% 30. Streets %pavedand ingood condition TouristVisitationand spend: Main HistoricAssets/Sitesin Munic-ipality 31 International-non-Arabvisitors 181,000 98,976 335,100 . - - 1,033 65,262 50 10,330: 6,4891 .- 1,702: 77,630 34 Average ann growth rate over last 2 years: Nbr (CYO5) 1 29% 42% 54% -7%. 28% 35 Av. Spendper visitor JD h a NAV NAV NAV NAV NAV 38 Number o f the core populationis estimatedbased on multiplyng the number of families in the core by the average family size ineachgovernorate. 59 Table 1 Basic Municipal Indicators(continued) - 37. Percent funded by Own Sources 38. Percent Spent on Wages and Salaries - _ . 39. Percent spent on city Services (capital investments) YOof total 20% 13% 7% 21% Main Own RevenueSources _. . . 40 No. 1 Source, % of own account revenue I 41. No. 2: ................... . . .. .................... .. .............................. .......* . ,.. .......... ..... .,................ .............................. ..... ,..,...........'.................... ,........... ~ ,. 42. NO.3 Property Tax _ . 43 Total Ratable Value .JDm. (2005) 700,0001 340,000 350,000 500,224 200,000 * . 44 Percent o f total collected % oftotal 68% 87% 73% 91% 76% BusinessTaxes . - - 45 Total estimated Potential JD m(2005) 40,000 60,000 - - 103,500 98,955 36,000 46 Percent of total collected % o ftotal 93% 85% 78%) 100% 77% Total of other Municipal Revenues . - 47 Total estimated Potential JD m(2005) 957,950 2,198,155* 2,298,770. 3,169,3!2& 1,101,000 48 Percent of total collected % of total Source of data Most of population data and other socioeconomic data are extracted from Department of Statistics DOS (population census 2004 and employment and unemployment survey 2005) Municipality revenues are extracted from the municipal budgets 60 Annex 2: Major Related ProjectsFinanced by the Bank and/or other Agencies JORDAN: CULTURAL HERITAGE,TOURISM AND URBANDEVELOPMENT PROJECT Last Supervision (PSRIISR) Ratings Sector Issue Project (Bank-financed projects only) Implementation Development Progress (IP) Objectives (DO) Transport and Amman Development Corridor (PO81505) Municipal Management Municipal Development Regionaland Local DevelopmentProject (P070958) Approved (December 2006) UrbanDevelopment Community Infrastructure DevelopmentProject (PO4958 1) Completed (2004) Tourism Development SecondTourism DevelopmentProject (P035997) Completed (2005) Other DevelopmentAgencies UrbanDevelopment UnitedNations Habitat Programto addressurbanpoverty, participatory urban governance, and the urban environment Tourism Development Jordan Tourism Sector Developnient Project (US$65.4 million) Under implementation funded by The Japan Bank for International, Cooperation (JBIC) (Launchedin 1998) (National MuseuminAmman, Amman Down Town, Historic Old Salt, Dead Sea Parkway, Dead Sea Panoramc Complex, Amman Bus Terminal. Karak main street) Tourism Development Siyaha USAID FundedProject (US$17 million): Launchedin2006 -Ensure institutions and policies are in place, which wil facilitate the implementation and embedding o f the Nationa Tourism Strategy -Promotesustainabletourismprojects,whichinvolvepnvate- sector resources and participationby local communities, local and international NGOs, and business associations, among others, that serve as replicable models o f sustainability and bestpractices Ratings: HS (Highly Satisfactory); S (Satisfactory); U(Unsatisfactory); HU(Highly Unsatisfactory); L (Likely); SU (Substantial). 61 Annex 3: ResultsFrameworkand Monitoring JORDAN:CULTURALHERITAGE,TOURISMAND URBANDEVELOPMENTPROJECT Results Framework PDO OutcomeIndicators Useof OutcomeInformation . To contribute to tourism I Increased tourist visitation to and stay To evaluate effectiveness o f the development inthe PMs, and and spends in PX1cores and main sites. integrated approach adopted by the thereby create the conditions for I Increased value added inbusinesses in project local economic development. cores. To evaluate success o f the municipal City-Core Management Units to promote and sustain tourism development and related economic activities. !. To complete the Petra 4 Efficient, informative and culturally To assess quality of V C Archeological Park (PAP) sensitive new Visitors Center operating; management system through the Management Plan, initiated under Petra visitors' informationand the Second Tourism Development satisfaction survey Project IntermediateResults One per Component Results Indicatorsfor EachComponent Useof Results Monitoring Tomponetit 1:Revitalization of Historic City Centers, Urban Infrastructure Improvements and Cultural Landscapes Regeneration 1. Improved livability and . Percent o f area o f street networks and To measure all aspects o fproject attractiveness o f the urban public spaces IIIcore upgradedunder management and implementation environment inthe city cores o f the project. the PMs . Percent area o fplanned urban spaces rehabilitated and upgraded under the project 2. Revitalization o f Historic City . increase inpercentage o f collection o f Confirmation that project approach Centers revitalized and Urban selected local revenues as part o f the will increase municipal revenues Infrastructure Improved total local revenues inthe P M s local revenues--particular property and business taxes 3. Effective preservationand . Percent o f targeted historic buildings in Confirmation o fproject approach to conservationo f historic core protected and, where feasible, conserve and rehabilitate historic city cores Confvmationo fproject approach to regenerated replanted. conserve and rehabilitate culturallnatural landscapes Tomponent 2 -Petra Gateway 1. Visitors Center effectively . Efficient, informative and culturally Verification o f capacity and established and operationalized. sensitive new Visitors Center willingness to effectively operate completed and operating; and maintain the new visitor center ~ 1. Additional small and medium 1 No o f directly tourisdhospitality and Verification o f ability o f the LED enterprises established inthe cultural heritage-related business scheme to reach targeted small and civic cores; created andor improved incore area. medium entrepreneurs 2. Existing SMEs are more . No o fnewjobs created indirectly financially sustainable tourism- and cultural heritage-related business inthe cores. 62 intermediateResults One per Component Results Indicatorsfor Each Component Use of ResultsMonitoring :omponent 4 Capacity Building and Project Management Support - '. Municipal Capacity Buildingpi I gram (each PM) 1. Management and maintenance Percent o f respondents favorably rating Verification that the CMUs are o f historic centers by the PMs the quality o f social (family, leisure, functioning effectively improved as agreed in group interaction), environmental and Municipal Revitalization traffic services inMunicipal Core (as Pacts; established by selected results from the annual Infrastructure Condition Survey conducted by MoTA). Percent o f Municipal Revitalization Pacts fully complying with their Action Plan targets. 2. Effective use andor reuse and . Number of new events organized by the Verification that the C M U s are promotion o f the key assets C M U s functioning effectively (including major civic spaces) 111the city cores 3. Management and maintenance . Percent o f the Ajloun Municipal Verification that the newly o f Ajloun CulturaLWatural Revitalization Pact fully complying with established Ajloun CMU is Landscape by the Municipalib the agreed Action Plantargets functioning effectively o f Ajloun, as agreed in Municipal Revitalization Pact; '.2MoTA Capacity Building and Project Management Support 1. Project effectively managed, . Percent o f contracts completed o n time T o assess PMs ability to monitored and reported on by. and o n schedule: successfully exploit cultural M o T A . . Disbursement within 20% o f annual heritage assets forecast Number o f comprehensive, good-quality To assess improvedcapacity to M&E indicators andprogress reports ieliver Bank and Government's delivered on time by M o T A reports requirements Percent o f required reports proving Project mid-term and end adequate coverage o fproject objectives, zvaluahons procurement, accounting, and progress issues. 2. Sub-projects effectively . Percent o f sub-projects started on time, T o monitor improved TDD designed and implemented. and completed to an acceptable quality on capacity inproject management time and on budget. 63 9 r. O 0 d 0 N 0 0 0 .-C . . N i d IP g P- s 0 0 .-S . I - I W W . Annex 3.A: MonitoringandEvaluationArrangements JORDAN: CULTURALHERITAGE,TOURISMANDURBANDEVELOPMENTPROJECT Background 1. Duringproject preparation, the lack o f a structured M&E system inbuilt inthe project design was recognized by M o T A and the Bank team as a key weakness o f the Second Jordan Tourism Development project. This weakness left the implementing team without a systematic monitoring and reporting system, at times malung overall project supervision and timely identification of problems and solutions difficult duringimplementation. 2. Based on the above lessons, the CHTUDP would make clear provision for the design and implementation o f an integrated M&E system as part o f the Capacity Strengthening o f MOTA-TDD. Accordingly, Component 4 will cover the costs o f specialized consultancy services aimed at designing and managing the M&E system for the project over the five years o f implementation. In particular, the Project would support the creation o f an Integrated Monitoring and Evaluation system working at different levels (linkmg MoTA, the Municipalities and M o M A ) and serving different monitoring purposes. In particular, it will be expected to monitor (without being limited to): (1) performance o f project towards the achievement o f the main project development indicators and related intermediary ones; and (2) regular and specific monitoring o f the implementation o f Municipal Revitalization Pacts in each municipality, identifying the most appropriate indicators, triggers and targets to assess municipal performance, compliance and success. Objectiveofthe projectIntegratedM&E System 3. The integrated M&E system will be managed by MOTA-TDD.The primary objective o f the M&E system will be to support TDD to monitor progress toward the project development objective, take the necessary corrective actions to overcome barriers to implementation, and measure results at the closing of the project. As stated in the main text o f this document, the project objective is to contribute to tourism development inthe five target cities and ultimately create the conditions for local economic development. This objective would be pursued through a combination o f physical and economic revitalization, together with strengthening o f the municipal capacity to manage and sustain development over time and to create effective partnerships with the private sector andcommunities. Considering this, and consistently with the Results Framework in Annex 3 o f this PAD, the M&E system would be expected to include both intermediate and final indicators in the areas o f delivery o f revitalization projects, municipal finance, economic base in the city core (particularly inrelation to tourism), municipal management capacity and strategic municipal partnerships (both with private sector and citizens). ImplementationoftheIntegratedM&E System 4. M o T A will be responsible for the overseeing and management o f the above Integrated M&E system, with the technical support o f a specialized consultancy service to TDD. The dedicated M&E consultant to the project will be responsible, but not limited to, the following (detailed TORSfor this assignment are part o f the Project Implementation Plan): (a) Design the Integrated M&E system for the project and develop a project-specific city-level baseline for each target city. At project start, design a workable M&E system and, when necessary, revise the list o f relevant indicators to monitor progress and evaluate results. Subsequently, setup the M&E Management Information System (MIS) and collect data from relevant data sources to set the project baseline; (b) Collaborate with project municipalities and MOTNTDD to identify and agree upon realistic project intermediary and final targets, both at city and project level. Contribute to the y early update o f the Municipal Revitalization Pacts with specific city targets and relatedindicators; 67 (c) Design and apply monitoring & evaluation tools for the project in order to collect the necessary information to measure project outcomes as captured by the selected indicators (an annotated list o f key indicators and related measuring instrumentshools are provided in Appendix 1 to this Annex 3.A). Also, the Consultant will identify a series o f most likely diagnosis/process indicators to effectively monitor the implementation process and ensure timely identification o f barriers to implementation and achievement o f targets. This task will include a detailed project monitoring schedule and related responsibilities, and clear identification o f data sources. I t will also include the regular use o f qualitative monitoring tools like beneficiaries and opinion surveys. For the duration o f the project, the M&E consultant to TDD will be responsible for the timely and effective implementation o f the M&Esystem inall its components. (d) Report to MOTA-TDDon progress towards the achievement o f the project targets and, ultimately, towards the achievement o f the project development objectives. Reporting will include quarterly reports to be included inthe project progress report, annual and semi-annual project monitoring reports, regular progress reports to the Inter-ministenal Committee, and the mid-tern and final in-depth project evaluation report quantifying results achievements. (e) Train CMUs and TDD on the M&E system and relatedtools for data collection and reporting. Ensure that TDD develops the necessary expertise to manage the M&E MIS. 5. Consistently with the Project Results Framework, an initial list o f municipal monitoring indicators, organized by key areas o f progress monitoring, i s provided in the following table as a preliminary reference. The table also provides a sample o f relevant process indicators (both quantitative and qualitative) aimed at the timely identification o f barriers to project implementation. Exampleof Performance indicators DiagnosWProcers indicators (outputsand outcomes) to identifybarriersto implementation Data source I Tourism I Increasedtourist visitations. 1 Level of support by tourist Semi-annualTourist Activity development inthe spend and stay in the PMs operators and JTB Report with: PMs 1 Availability oftime for tourists Tounst andvisitors interviews to visits the PMs; Tounst operators interviews 1 Adoption and implementationof city tourism strategy; 1 Level oftourists' interest in visiting the revitalizedhistoric cities . I Improvedlivability I Actual quantities ofphysical 1 Availability of capable QuarterlyProjectProgress and attractiveness progressof sub-projects contractors; Report; of the urban Quality of site supervision Interviewswith contractors environment inthe city cores o fthe 1 Level ofresistanceby local Opinion surveys PMs communities; Randomcheckingon building 1 Delays inexpropriationand sites relocation of activities; Interviewswith CMUs I Revitalizationof I % increase of local revenues 1 Willingness ofbeneficiaries to Municipal FinanceReport Histonc City generatedwithin the city core Paytaxes and municipal fees; Municipal budget indicators Centers revitalized (e.g. propertytaxes, business Municipal capacityto collect survey and Urban licenses, parkingmeters) 1 localrevenues; Infrastructure Interviews with CMU staff Improved 1 Adoption by PMs of a computerized Municipal Finance System; 68 Exampleof PerformanceIndicators DiagnosislProcessIndicators (outputsand outcomes) to Identifybarriersto implementation Data source IncreasedValue 1 KOof directly I Availability of information to 'roject quarterlyprogress added inthe city tourismhospitality and potentialvisitors about what the eport; centers (particularly cultural heritage-related PMs can offer ;tructure andUse Inventory in relationto business created and!or I Access to support on business listoric core area use and tounsm) improved in core area managementby LEDgrant rotection report I KOof newjobs created in beneficianes :ourist survey directly tourism- and cultural heritage-relatedbusincss in nterviews of small/medium the cores :ntrepreneurs I Number of applications for the LED grants Municipalcapacity I Creation of City-core I CMU hasregular accessto 'roject quarterlyprogress to effectively ManagementUnit (CMU); MoTA and MoMA technical eport; manage the histonc support; nterview with mayor and city-cores I Specializedtraining and supportprovided to CMU I CMU attractscompetent staff :MU staff I Improvedcitizens' satisfaction I Political environment is )pinion survey with cleanliness ofhistonc consistently supportive o fthe :MU records core. organizational changesrequired to empower the CMU to perform I Number of new events organizedby the CMU efficiently I Percento f respondents favorablyratingthe quality o f social (family, leisure, group interaction), environmental and traffic services in Municipal Core (as establishedby selectedresults from the annual Infrastructure Condition Survey conducted by MoTA). I Percentof Municipal RevitalizationPacts fully complying with their Action Plan targets. Strategic municipal I Creation of Citizens' 1 Level of implementationof :MU records partnerships(both partnership forum; decision taken by Forum; nterviewswith private sector with private sector Level of satisfaction with project md community organizations and citizens) I Number of regularmeetings I by forum; initiatives by Citizens' I Number of new PPP at representatives municipal level 6. Inaddition, Appendix 2 to this annex provides proposedindicators worksheet that could beused as a tool to weight indicators on the basis o f their importance. 7. The Integrated M&E System and MIS developed for the project would be expected to continue to function beyond the life o f the project, providing a working monitoring system to be internalizedby TDD and a core municipal M&E system to be expanded to cover the wider municipal territory. 69 Annex 3.A -Appendix 1: List of Key M&E indicatorsandrelatedmeasuringtools 1. M&E Indicator I: Increased tourist visitations, stays and spends in PM cores and main tourist sites. 0 Tourist Activity Report. .. Select the five largest tour operators inJordan; Interview, twice per year, in person or by telephone, each o f the five tour operators to establish: - Number oftour buses sent by that operator to each project city per week inLow tounst season and inHightourist season. L o w and High to be agreed with the Client. - The relative importance o feach city for tourists inJordan, ranked 1-3, withNo. 1as a .. "must see"; - Hours o f stay in each location. Twice per year, carry out a tourist survey on the buses to/from the tourist sites in the PMs. Twice per year, interview applicable agency/ministry or other entity to document annual . gate receipts, and number o f tourists, at key tourist sites ineach city. Key tourist sites for each city to be agreed with the Client inthe Inception Report. Twice per year, interview the two busiest restaurants used by tourists to document the number o f meal services (or whatever the local equivalent term is) per day. Day to be used i s for the count is the same day as the Annual Activity Survey described below. 2. M&E Indicator2: Increased economic activity as indicated by increased value added in the city centers--particularly in tourism-related activities and businesses. 0 Structure &UseInventoryReport(SUI). . . Determine exact physical boundary o f the Heritage Core Area (HCA) ineach city; Carry out the SUI, in the same month o f each year, for every structure in the H C A capturing at least the following information: - Photoofthestructurefrontandback. Atleastonephotoperflooroftheinterior. All photos to be digital; - Record if the structure i s newly constructed, newly occupied, or has changed use from the previous year; - Approximate square meters o f structure (refer to prior/existing surveys or, if not available, use laser measuring device); - Investment in the structure according to the owner over the previous 12 months; - Ifabusiness, number offull-time equivalent employees (withimmediate members of the owner's family capped at three); and - Annual, or Change in,revenues. 0 Structure and Use Comparison Report. At the end of year 3 and year 5 of the Project, a "Structure and Use Companson Report" will be prepared to illustrate the change for a sample o f not less than 10 structures in the city-core area over the years and best illustrate the Project's progress inachieving its Development Objectives. 0 Selected Municipal Budget Indicator Survey. From each of the five municipalities, collect year end amounts recorded inthe following budget accounts: - Municipal Budget Account 111101(Land and BuildingTax - Musakafat) - Municipal Budget Account 1211(Job Licensing) - Municipal Budget Account 121407 (Car Parking fees) - Municipal Budget Account 121501(Garbage fees - Consumption) 70 0 Activity Survey. Twice per year, a survey will be carried out to monitor foot traffic on two key streets in each o f the five cities. The streets will be chosen in cooperation with the client and shall be in the hentage core and where the Project seeks to increase economic activity. Hours to monitor are from 8AM to 8PM. Time period is one day, twice per year, with the days six months apart. One o f the two days each year will be a Friday. . The months will advance by 2 every year. Thus, in year one the months will be January and June, and then inyear two the months will be March and August, etc. The survey will help capture by direct observation at least the following information: - Descnption o f the street, i.e., city name, street name, length (not less than x meters), surveyor location on the street. The same parameters and surveyor location to be used for every survey; - Number o f pedestrians entering the street by any means, i.e., walking, descending from car or bus, or from a buildinglstructure. Children under 1 meter tall not be counted; and - Best guess ifthe person counted is a tourist (i.e., does not live inthe city). 3. M&E Indicator 3: Improved cultural heritage asset preservation as indicated by (i) improved management, effective use and/or reuse andpromotion of the key assets (including major civic spaces) in the city cores; and (ii) improved cultural heritage asset protection through the promulgation and enforcement of appropriate regulations. 0 HeritageCoreAreaUseand ProtectionReport. MPsto prepareanannualHeritageCoreUse and ProtectionReport, that would document at least the following: m No. o f new eventdfestivals held inthe HCA; 1 Count annual written warnings issued to residents/owners inH C A for improper use or activity; and m Measure fines collected by the municipality for uses inconsistent with regulations. . (Municipal Budget line 121605 i s "Penalties", this will needto be segregate for the historic cores); Number o f warnings for violations and orders for interruption of works inviolation with the regulations. 4. M&E Indicator 4: Improved management and maintenance of the keypublic assets and systems in the city cores. This indicator would be monitored and evaluated by measuring (i) improvements inthe maintenance and garbage collection services, and (ii)increased safety and efficiency o f pedestrian and vehicular circulation (e.g. count accidents, number o f traffic-jam evens, opinion survey o f pedestrians and dnvers, etc.). 5. Inaddition, the PMs will carry out an annual Infrastructure Condition Survey. Criteria to be observed would include: percent o f trees either alive, dying or dead, percent o f street lighting working, number o f broken steps, cleanliness o f sidewalks (scale o f 1 to 3 for litter and gum), percent o f drain covers unbroken and inplace, percent o f street curbs intact, percent o f parlung meters in worlung order, percent o f trash holders inoperation (i.e., evidence o f use and o f regular emptying). 6. M&E Indicator 5: Improved municipal finances as indicated by improved and increased collection of local revenues--particular property and business taxes. 0 MunicipalFinance Report. PMswouldproduce anannual MunicipalFinanceReport . documenting at lest the following: . Change inMunicipal Budget Account 111101(Land and BuildingTax -Musakafat); Change inMunicipal Budget Account 1211 (Job Licensing); and Change inMunicipal Budget Account 1212 (Building and construction licensing). 71 I ...................... .......,........ ................ . . . . . . . . . . . . . . . . . . . . . . . . ...................... . . . . . . . . . . . .,*. . . . . . . . . . . . . . . . . . . . . ......... , .............,........ ..._ .............................. " ..... " ..................................................... / " . . . . . . a Annex 4: DetailedProjectDescription JORDAN: CULTURAL HERITAGE, TOURISM AND URBANDEVELOPMENT PROJECT Component 1:HistoricCity Centers andUrbanInfrastructureImprovements 1. The objective o f this component i s to physically rehabilitate and functionally improve the historic cores42o f the project municipalities (PMs): Jerash, Karak, Madaba, Salt and Ajloun. This will help improve living and working conditions; preserve "endangered" historic assets; and catalyze local economic development. The component includes physical works, as well as technical assistance and consultant services for the design and supervision o f these works. Detailed output indicators for the physical investments under this component are provided inAppendix 1o f this annex. Sub-component I.A: Jerash City Revitalization Program 2. The objective o f this sub-component i s to improve the Wasfi AI-Tal Street-Wadi area and upgrade and functionally enhance the main commercial spine o f the modem part o f the city core, i.e. King Abdullah Street. In order to achieve these objectives, the sub-component will support a series o f investments aimed at linking the historic core to the archaeological site; rehabilitating the Wadi area through landscaping and refurbishing the recently developed old-market area; completing the East Baths development started under the first Tourism Development project; and upgrading the core city street network. These investments will be complemented by the adoption and implementation o f specific Historic Core Regulations (see sub-component 4.1.1(b) (ii) and by the pilot implementation o f below, Traffic and Parking Management Plans. The following sections describe the area-specific physical intervention. Sub-component 1.A.1: Upgrading of and improvements to street networks and alliedpublic spaces 3. This sub-component will support: (a). Upgrading o f Primary, Secondary and Tertiary city-core streets, particularly Wasfi AI-Tal and KingAbddullah plus Bab Amman streets, with a focus on the landscaping, rationalization o f sidewalks, creation o fparking spaces and overall improvement o f the storm-water drainage system; Detailed landscaping o f at least two critical junctions: (i) Municipality Square: upgrading and landscaping of the central isle and to the overall detailed streetscaping o f the junction, including the creation o f continuous pedestrian sidewalks and signage to enhance functionality and overall visual impact o f this representative area o f the city; and (ii)Wasp AI-Tal StreetKing Abdullah, Street Junction: upgrading o f the traffic partition elements (roundabout and pedestrian islands) and the overall streetscaping of the junction, including sidewalks and signage. Sub-component l.A.2: Rehabilitation and cleaning of buildingfacades 4. This subcomponent will support: Upgrading o f facades on the primary streets, namely King Abdullah, Bab Amman and Wasfi AI-Tal Streets. The latter will include creation o f a uniform building curtain along the street to cover the row o frestaurants and other commercial actimties. This will provide a more dignified foreground to the adjacent archeological site. Upgrading will include rehabilitation of facades, elimination o f clutter, and rationalization o f shop signage. The new city-core regulations are expected to formalize the standards and requirements for faqade rehabilitation and provide the basis to implement these interventions. 42The limits of the historic cores of each PM was defined during project preparation and approved by GOJ as part o f the preliminary regulations approvedby the Ministry of Municipal Affairs. 73 Sub-component 1.A.3: Renovation and Preservation of selected Heritage Buildings through Adaptive Reuse. -- None. Sub-component l.A.4: Rehabilitation and Upgrading of Pivotal Urban Spaces 5. This sub-component will support: (a). Demolition of visually invasive buildings and relocation of related activities: Acquisition and demolition o f the buildings, inclusive o f the necessary relocation o f activities to most suitable areas. The preparatory studies showed that at least three buildings on the southern side o f the South Bridge are both visually invasive and extremely vulnerable to floodsAandslides as they are built right inthe path o f the existing wadi. Inorder to restore the visual unity and integrity o f the relationship between the archeological site and the Eastern Bath Plaza these buildings need to be removed, The Municipality would be expected to play a leading role in managing this process (particularly land acquisition for the resettlement, and ensuringthat no other new buildings are constructed in this extremely vulnerable area o f the city (see sub-component 3.1.l(ii)). (b).Rehabilitation of the South Bridge Crossing: Improvement o f the visual and functional continuity between the South-Bridge exit o f the Jerash archaeological site and the Eastern Bath Plaza by: (i) rehabilitating the ancient Roman crossing o f the South Bridge across Wasfi A1Tal Street and (ii) creating a safe and convenient pedestrian linkbetween the archeological site and Jerash city core. Specific interventions include the maximum possible lowering o f the Wasfy Tal-A1 Street carriageway; the rationalization o f the related pedestrian street- crossing through the provision o f speed reducing devices and other traffic regulation measures (such as a traffic lights); and the construction o f a pedestrian sidewalk between the South and Northbridge, along the Eastern side o f Wasfi Tal-A1 St. (c). Landscape Restoration of the Wadi Area: Upgrading o f the wadi into a new urban park and carry out the necessary landscaping, in order to reverse the ongoing process o f decay o f this strategic but neglected urban area. This would create a link between the existing city core and the archaeological site, and provide a new common social and recreational space for the community. The land in the wadi i s in private ownership, but while the area between the North and South Bridge has already been identified for use as a green area inthe city zoning, the rest o f the land in the south section o f the wadi has been mistakenly zoned as residential (while de facto being in the flood area). The Municipality, in coordination with and with the support o f the Ministry o f Municipal Affairs, would be expected to revise the zoning o f this area, and change o f land use to green area. (d). Renewal/Completion of the East Baths Plaza Area: (i) creation o f a new entrance to the The plaza; (ii) the connection to the contemporary urban area of the North Bridge; and (iii) the acquisition and replacement o f existing unsightly market stalls. These initiatives would provide the city with a landscaped buffer between the recently created East Bath Plaza and the surrounding line o f poor-quality construction. It would also complement the recently implemented Jerash East Baths Plaza de~elopment~~,providing the city with a high quality central pedestrian space. The Plaza, which is in direct visual contact with the archaeological site on the other side o f the wadi, incorporates the remains o f a Roman bath and a Byzantine church. The new entrance improvement initiatives will require the acquisition and removal o f the existing decayed and intrusive market stalls, which are presently obstructing the connection between the Plaza compound and the North Bridge. These stalls will be replaced by new and well-designed lightweight, removable booths for the commercial promotion o f local products and handicrafts to be designed and specified. 43Fundedbythe WorldBank underthe Jordan SecondTourismDevelopmentProject. 74 Sub-component 1.A.S: Construction/Rehabilitationof Essential Municipal Facilities (Conditional PPP) 6. The sub-component i s conditional upon the performance o f Jerash Municipality with respect to the timely and effective implementation o f sub-components 1.A.4 and 1.A.6. It would support construction o f a Parking Buildingand Multi-functional Facility under a Public Private Partnership (PPP). Support will include the planninglarchitecturallengineering studies and legal and financial and institutional actions necessary for the formation o f public-private partnership (PPP) to construct this facility. The recent relocation o f the Jerash market created the opportunity to equip the city with a new multi-storey parlung garage complementing the pedestnan hub o f the East Baths development. Under this initiative, the public partner (the Municipality) will provide the land and set construction and functional standards and parameters, while the private partner will ensure the realization (including design, construction and financing), and would manage the facility upon completion. Sub-component I.A.6: Implementation of Traffic and ParkingManagement Plan (Works and Metering) 7. This sub-component will support the implementation o f Traffic Parking Management Plan (TPMP), including: a) implementation o f traffic management works; and b) acquisition, installation and operation o f parking meters on a pilot basis. A TPMP was developed during project preparation with funds from a PHRD grant. It aims at rationalizing access to the city-core--reducing the number o f vehicles crossing o f the city center (particularly the Wasfi A1 Tal Street axis); enforcing an efficient circulation system; and re-directing heavy traffic. The metering program aims at demonstrating the advantages o f managed parking schemes. Sub-component I.A.7: Protection, Rehabilitation and Improvement of CulturalLandscapes -- None Sub-component l.A.8: Detailed Design and Supervision 8. This subcomponent will support the employment o f consultants to (a) preparekomplete detailed design and contract documentation for the works to be undertaken, as well (b) supervision o f the construction o f these works. Employment would be on the basis o f Bank Guidelines. Sub-component 1.B: Karak City, Detailed Description of the Revitalization Program 9. The objective o f this sub-component i s to physically improve and functionally upgrade the city core, focusing particularly on key streets and the current Inner-City Bus Terminal. The rationale for focusing on the Bus Station is that is a large open area located in a privileged place adjacent to the old city walls and with a still unobstructed South-West view on the valley. I t thus provides a major Development Opportunity for Karak. Thanks to this strategic location, this area has the potential to function as the main and first entry point and main gateway to the historic core o f Karak as well as a major new multi-purpose sub-center, while rationalizing local and tounst traffic and pedestrian flows. Despite its strategic location and critical function, the Bus Terminal has never been used by the large number o f tourists daily visiting the Karak Castle. In fact, these are driven by luxury buses directly in front o f the castle, with severe consequences for traffic and congestion in the city. Currently, this important urban space is characterized by visual squalor; lack of maintenance; and inappropriate use o f the surrounding buildings for functions such as car-repair workshops. These issues would be addressed under the project. Karak has recently been the object o f a series o f street and urban upgrading projects carried out with funds from the Japanese government. Among these interventions i s the recent upgrading (both street and facades) o f the main commercial axis in the city core, A1 Malik A1 Husayn Street. The proposed project (CHTUDP) would complement these recent interventions. 75 Sub-component I.B.1: Upgrading of and improvements to street networks and alliedpublic spaces 10. This sub-component will support the following: Road and Drainage Improvements: Targeted upgrading o f streets in the city core, focusing particularly on storm water drainage system improvements. (ii) Pedestrian Trailfrom the Bus Station to the Castle: The sub-component will support the creation o f a safe pedestrian trail along existing streets, connecting the renovated bus station (the new Karak Gateway) to the , Castle and to key commercial areas within the city core. Part o f the Trail will start from the Wall-View Panoramic Walk adjacent to a proposed new hotel (see following sections for details), passing by the Mameluke towers and reaching the Castle. It would provide an alternative approach to the Castle, characterized by outstanding panoramic views onto the surrounding landscape. This will enhance the role o f the renovated main Bus Station as the new gateway to the historic core. It is expected that new services would develop along this new axis, including cafes, restaurants and entertainment addressed to the local population as well as tourists (b). The Eastern City Access: Upgrading o f the entrance, including detailed landscaping and improvements to the vehicular and pedestrian circulation systems. This access i s identified by the Salah Al-Din A1 Ayyubi Street and A1 Madeenah Street junction. This junction i s strategically located as it leads to the Inner-City Bus Terminal, which i s also to be refurbished under the project (see below). Sub-component 1.B.2:Rehabilitation and cleaning of buildingfacades 11. Cleaning o f facades along selected upgraded streets. Sub-component I.B.3:Renovation and Preservation of selected Heritage Buildings through Adaptive Reuse. 12. Renovation and adaptive reuse o f selected cultural heritage buildings. Sub-component I.B.4:Rehabilitation and Upgrading of Pivotal Urban Spaces 13. Karak City Gateway Development: This sub-component will support a multi-component development initiative comprising: (a). Panoramic Wall-view Walk and Wall repair: Creation o f a trellis-shaded Panoramic Walk along the wall at the eastern edge o f the inner-city bus terminal. This would link the proposed hotel compound to the Pedestrian Trail going to the Castle. The design o f the walk will use the same architectural language as that o f the re-designed main Bus Station compound, and will include seating facilities for visitors, planters, railings for pedestrianprotection and street lighting. (ii)Reconstruction of parts of Old Wall: Careful technical assessment and analysis o f the conditions o f key decaying sections the ancient city wall, and the reconstruction o f a demolished portions o f the wall. The operation would be carried out in full coordination with the Department o f Antiquities, after a careful assessment and analysis o f the conditions o f the existing remains, and using, wherever possible, the anastylosis techniques (Le. reconstruction using original components). The initiative would help to stop the decay of a critical section o f the Wall inthe starting area o f the Trail, and ensure its preservation. Rehabilitation of Inner-city Bus Terminal,: Complete refurbishment and redevelopment o f the area, including: (i) relocation o f 15 car-repair workshops (ii); restructuringhelocation o f the bus terminal and rationalization o f pedestrian and vehicular routes; and iii)architectural appropriated (adopting historic styles) rehabilitation o f a number o f small shops, focusing on creating a mix o f clean family, culture/craft/recreation-oriented and light/clean service activities; and iv) landscaping, furnishing and lighting. 76 (c). Development of a Car Park and Municipal Building: This subcomponent will also finance the construction o f a multi-storey car park and annexed municipal building, facing the newly developed bus-terminal. This investment will play a critical role in decongesting the city- core, by bringing the municipal functions closer to the vehicular access, and by providing sufficient parking to short visitors to the city core, either shoppers or citizens visiting the municipality Sub-component I.B.5: Construction/Rehabilitation of Essential Municipal Facilities 14. (Combined with sub-component 1.B.4--Karak City Gateway Development -- above.) Sub-component I.B.6: Implementation of Traffic and Parking Management Plan 15. This sub-component will support the implementation o f Parlung Management Plan (TPMP), including: a) implementation o f traffic management works; and b) acquisition, installation and operation o f parlung meters on a pilot basis. A TPMP was developed duringproject preparation with funds from a PHRD grant. It aims at rationalizing access to the city-core--reducing the number o f vehicles crossing o f the city center; enforcing an efficient circulation system; and re-directing heavy traffic. The metering program aims at demonstrating the advantages o f managedparlung schemes. Sub-component I.B.7: Rehabilitation and Improvement of Cultural Landscapes -- None Sub-component I.B.8: Detailed Design and Supervision 16. This subcomponent will support the employment o f consultants to (a) prepare/complete detailed design and contract documentation for the works to be undertaken, as well (b) supervision o f the construction o f these works. Employment would be on the basis o fBank Guidelines. Sub-Component 1.C: Madaba City,Detailed Description of the Revitalization Program 17. The main objective o f the interventions i s to upgrade and functionally enhance the main commercial and tourist routes inthe city core. A series o f targeted interventions will be carried out aimed at supporting this objective, as described inthe following sections. Sub-component I.C.l: Upgrading of and improvements to street networks and alliedpublic spaces 18. This sub-component will support: (a). Upgrading o f primary, secondary and tertiary city-core streets, in particular, (i) Talal King street, a major tourist pedestrian route connecting the Church o f the Map to the proposed Saraya BuildinglLeisure Park complex (see below), and Prince Mohammed Street, including the extension to the visitors' center; ii)the ring-road circumscribing the city core, ensuring pedestrian safety and proper storm-water drainage; and (b). Detailed landscaping o f the Church ofthe Map Node. The later will be enhanced, creating a strong urban-design statement underlining the symbolic significance o f this junction as the main gateway to the city. Sub-component 1.C.2: Rehabilitation and cleaning of buildingfacades 19. This sub-component will support the upgrading o f facades along King Talal and Prince Mohammed Streets, including the extension to the visitor center. These interventions are aimed at eliminating clutter, rationalizing shop signage, and achieving an overall visual improvement o f the urban environment. This faqade treatment will also enhance the experience o f pedestrians walking from the archeological site to the Church o f the map, the main route usedby visitors to the city. 77 Sub-componentI.(2.3: Renovation andpreservation of selected heritage buildings through adaptive reuse 20. Saraya Building: This sub-component will support rehabilitation and adaptive reuse o f the histonc Saraya building, including the detailed landscaping o f the urban space surrounding the building (entrance plaza, stairway and the landscaping o f the slope along Prince Hassan street). Built in 1896, the Saraya i s one o f the emblematic buildings of the Ottoman heritage o f Madaba. Today it i s used mainly for government administrative services including a police station. The building i s ideally suited for the creation o f a cultural centre, and offers an opportunity to develop an additional local and tourist attraction, and an alternative pole to the Church o f the Map. As prerequisite for this initiative, the Municipality will have to ensure the relocation o f the Police Station and enter into a partnership with a competent association to take over the management o f the renovated building.) Sub-componentI.C.4: Rehabilitation and Upgrading of Pivotal Urban Spaces -- None. Sub-component1.C.5: Construction/Rehabilitation of Essential Municipal Facilities 21, This sub-component will support: (a). Madaba City Portal functional upgrading of the old Bus Station). This sub-component will support the rehabilitation and conversion o f the old city bus station into the main City Portal o f Madaba. The Portal would function as the main terminal for internal city buses, shuttles, and taxis, and would also house multi purpose cultural and commercial activities. It i s expected that this sub-component will be designed and implemented duringthe later stage o f the Project, starting n o later than mid-term review, once the Municipality reaches a consensus on main functions to be housed. A PPPi s proposed for construction and management. (b).Leisure Park (Conditional). This sub-component is conditional on a resolution o f land acquisition issues and the participation o f pnvate investors. I t would support the creation o f a Leisure Park in the proximity o f the Saraya building. While the city core o f Madaba has several open spaces, the city core suffers from a chronic lack o f parks and recreation areas. The proposed leisure Park would help fill this void. The Park is expected to be managed through a public-private partnership agreement. However, considering the highly fragmented land ownership pattern at the proposed site, the Park is not expected to be implemented until the later stages o f the implementation o f the Project (CHTUDP). This will allow the Municipality sufficient time to obtain clear agreements with the landowners on the development o f the site. Sub-componentI.C.6: Implementation of Traffic and Parking Management Plan 22. This sub-component will support the implementation of Parking Management Plan (TPMP), including: a) implementation o f traffic management works; and b) acquisition, installation and operation o f parking meters on a pilot basis. A TPMP was developed duringproject preparation with funds from a PHRD grant. It aims at rationalizing access to the city-core--reducing the number o f vehicles crossing o f the city center; enforcing an efficient circulation system; and re-directing heavy traffic. The metering program aims at demonstrating the advantages o f managed parking schemes. Sub-component1.C.7: Rehabilitation and Improvement of Cultural Landscapes -- None Sub-component I.C.8: Detailed Design and Supervision 23. This subcomponent will support the employment o f consultants to (a) prepare/complete detailed design and contract documentation for the works to be undertaken, as well (b) supervision o f the construction o f these works. Employment would be on the basis o f Bank Guidelines. 78 Sub-Component 1.D: Salt, Detailed Description of the City Revitalization Program 24. The objective o f this sub-component i s to physically improve and functionally upgrade the city core, with the aim o f strengthening and expanding the traditional space o f the Saha and enhancing its role as the hub o f urban life. The proposed Saha project and upgrading o f surrounding urban fabric will coordinate with the ongoing Historic Old Salt Development project supported by the Japanese bilateral cooperation, through the Japan Bank for International Cooperation (JBIC). The JBIC project is funding the restoration o f the landmark Abu Jaber Building, located in the hearth o f the historic core o f Salt, the rehabilitation o f part o f the Saha area and the paving o f key pedestrian streets. The CHTUD project will support the upgrading o f three primary streets directly interconnected with the Saha, and a number o f interconnected area-based interventions all contributing to the creation o f the Saha City Hub. These will be strengthened and integrated by the implementation o f Historic Core Regulations (see sub-component 4.1.1 (ii)) combined with a specialized Salt Heritage Fund(see sub-component 2.2). Sub-component 1.D.I:Upgrading of and improvements to street networks and annexedpublic spaces 25. The project will support the full integration and rational connection o f the Saha project area with the surrounding urban fabric, including: (i) reinforcing the system o f three primary streets extending from the Saha to the Maidan area, namely Al-Dair Street, Oqba ben Nafi: Street and Sa'eed Sleibi Street; and (ii)upgrading and rationalization o f the currently uneven, encroached and/or missing sidewalks, assuring uninterrupted and safe pedestrian flow. Since these streets provide the natural continuation and connection o f the Saha City Hub to the rest o f the city core, their upgrading will follow the same urban- design language. The above initiatives will contribute to the urban integration o f the Eastern portion o f the sloped urban fabric with the city centre and the recently refurbished Souq. Sub-component 1.D.2:Rehabilitation and cIeaning of buildingfacades 26. The sub-component will support upgrading o f Al-Dair Street, Oqba ben Nafe Street and Sa'eed Sleibi Street. This will be complemented by a series o f interventions aimed to achieve overall visual improvement o f the urban curtain through the rehabilitation o f facades, elimination o f clutters and rationalization o f shop signage. This fapade treatment i s aimed to enhance the experience o f pedestrians walking inthe area o f the Saha. Sub-component 1.0.3:Renovation andpreservation of selected heritage buildings through adaptive reuse 27. This sub-component will support (a). The partial rehabilitation and preservation o f the significant Ottoman heritage architectural complexes forming the Saha Backdrop. This includes direct funding for the static consolidation o f all decayed structural components and the facade rehabilitation o f the above- mentioned heritage architectural complexes. It is expected that this action, combinedwith the creation o f the Saha City Hub, will encourage the private owners o f the architectural complexes to complete the rehabilitation process inview o f an adaptive reuse o f the spaces for new h c t i o n s closely related to the objectives o f the project. The backdrop o f the new urban, multifunctional Saha space is composed by a continuous traditional architectural system, positioned roughly 12 m above the topographical level of the Saha, formed by four significant Ottoman heritage architectural complexes, namely the Sukkar complex, the Khatib complex, the Sakit complex and the Abu- Sarhad Coffee complex. The four Ottoman complexes in golden sandstone, clustered on the slope overloolung the project site and dated from 1890 to 1920, are expected to play an essential role for the overall success o f the project once rehabilitated. They are currently abandoned, squatted or still occupied by the original owners. All the buildings are in a severe state o f the decay and in urgent need o f extensive rehabilitation and structural works. As a precondition for these interventions to be carried out, the Municipality will be responsible to achieve an agreement with ownersloccupiers to implement restoration works and, whedif necessary, to plan for relocation o f current functions. 79 Salt Heritage Fund (pilot): This pilot sub-component would help Salt Municipality develop a Fundto provide financial incentives for the restoration and adaptive reuse of privately owned histonc buildings in the city core. The sub-component would support: i)grants to private histonc building owners for preservation and/or adaptive reuse works; ii)consultants to establish an appropriate institutional, financial and operational framework and program for the Fund; ii)incremental operating expenses for the Fund establishment and initial operations. The design o f the Fundwould be based on an ongoing Salt Municipality initiative. The Fund would provide specific financial incentive grants to private owners o f historic buildings to encourage them to preserve, rehabilitate, restore and commercially reuse their assets. It will be managed by Salt Municipality. The detailed regulatory, incentive, financial and operational framework o f the Fund will be developed under the Project. Fund operations would be complemented by the development o f the City-Core regulations. Sub-component I.D.4: Rehabilitation and upgrading ofpivotal urban spaces 28. The sub-component will support the redevelopment o fthe Saha City Hub, including: (a). Demolition of 3 intrusive government buildings. Three intrusive modern governmental buildings44currently occupying the core o f the historic city, located in what used to be the main city square, will be demolished in order to re-establishing the visual integrity o f the traditional amphitheatre-like urban fabric and improve the overall environmental quality o f the urban center. (b).Development of a "New Saha": The urban void created by the demolition o f the above government buildingswill be redesigned to exploit its central location and become a mixed- use public space, dedicated to social encounters, leisure and entertainment, while also contributing to further enhance the cityscape o f the historic city center. (c). Saha Mosque Rehabilitation and Partial Reconstruction: The northern backdrop o f the Saha central urban space is occupied by the rather decayed Saha Mosque, a recent building o f l o w quality and poor design. The ground floor presents a line o f shops along the street alignment and a neglected and inactive shopping center at the back that i s currently used as a car park. The upper floors house the mosque and related services. The project will support the rehabilitation and partial reconstruction within the existing reinforced-concrete structure o f this mosque, with the aimto optimize the morphological integrationo f the Saha city hubwith the surrounding urban fabric Sub-component I.D.5: Construction/Rehabilitation of Essential Municipal Facilities (Conditional) 29. This subcomponent is conditional on the effective implementation of by Salt Municipality o f the Salt Municipal Revitalization Pact. It would include redevelopment o f the existing school area for car parlung and commercial facilities. Sub-component 1.D.6: Implementation of Trafic and Parking Management Plan 30. This sub-component will support the implementation o f a Traffic and Parking Management Plan (TPMP) separately developed by the Ministry o f Public Works, including: a) implementation of traffic management works; and b) acquisition, installation and operation of parlung meters on a pilot basis. The TPMP was developed duringproject preparation. It aims at rabonalizing access to the city-core--reducing the number o f vehicles crossing of the city center; enforcing an efficient circulation system; and re- channeling heavy traffic. The metering program aims at demonstrating the advantages o f managed parking schemes. Sub-component 1.D.7: Protection, Rehabilitation and Improvement of CulturalLandscapes -- None 44The three modernistic, stone-clad buildings house the following administrative governmental functions: Ministry of Education, Police Station and Post Office. The site is adjacent to the Saha area newly upgraded under the JICA supported project and faces the city's central Mosque. 80 Sub-component I.D.8: Detailed Design and Supervision 31. This subcomponent will support the employment o f consultants to (a) prepare/complete detailed design and contract documentation for the works to be undertaken, as well (b) supervision o f the construction o f these works. Employment would be on the basis o f Bank Guidelines. Sub-component 1.E: Ajloun, Detailed Description of theRevitalization Program 32. The main objective of the area-project interventions to be implemented in Ajloun differs from those for the other project municipalities as it focuses primarily on the preservation o f the rare and precious assets composing the cultural and natural landscape surrounding the famous Ajloun Castle, and on its protection from urban sprawl and deforestation. While focusing on the preservation and protection o f the cultural landscape, the project will support selected investments aimed to the protection and landscaping along the key access from the town o f Anjara through the city of Ajloun and to the castle, and to regenerate key areas in the city core of Ajloun, to improve overall levels o f livability both for local people and the passing tourists. T o this ends, a series o f targeted interventions will be carried out under the project aimed at supporting these key objectives, as described inthe following sections. Sub-component I.E.I: Upgrading of and improvements to street networks and alliedpublic spaces 33, This sub-component will support selected basic protection and landscaping works along the access and connection spine-road leading to the castle from Anjara through the city o f Ajloun (King Abdullah Street o f 4350m length from Anjara to Ajloun and King Hussein Street o f 2850m length from Ajloun to Castle). Specific interventions will comprise: (1) minimal intervention o f road upgrading and protection through retention walls and landscaping works, (2) upgrading and landscaping oftwo main roundabouts, i.e. the main intersection at the entrance o f Anjara leading to Ajloun, and the main intersection inAjloun city center, adjacent to the Ayyoubi Mosque, where an old big Eucalyptus Tree landmarks this node; (3) the design, landscaping and furnishing o f one key panorama viewpoint at the entrance o f Anjara, along the same access route to the castle; (4) design works o f the entrance to wadi A1 Tawaheen to support hture development o f eco-tourism activities; and (5) landscaping and terracing o f selected edges along the road between Anjara and Ajloun and along the road leading to the castle. Sub-component I.E.2:Rehabilitation and cleaning of buildingfaqade 34. This sub-component will support the overall cleaning and repainting o f facades surrounding the Anjara roundabout with approximate linear length o f 500m and the center area o f Ajloun with approximate linear length o f 2250m. These interventions will be aimed to eliminate clutter, rationalize signage and achieve overall visual improvement o f this accessroadto the Castle . Sub-componentI.E.3: Renovation andPreservation of selected heritage buildings through adaptive reuse 35. Ayubbi Mosque inthe city center o f Ajloun: the histonc Ayyoubi Mosque is a strong landmark in the city center o f Ajloun. While the original historic mosque in its traditional layout is still standing and used, over time some extensions and elevations have been added to the original building structure. The project will link and coordinate with the rehabilitation of the mosque faqade and the associated demolition works to be carried out by the Ministryo f Awqaf' and support the strengthening and rehabilitation o f the histonc buildingo f the mosque and its main annexes. Sub-component I.E.4: Rehabilitation and upgrading ofpivotal urban spaces 36. This sub-component will support the overall rehabilitation of the historic city center. The target area comprises the surroundings o f the Ayyoubi mosque, the city square around the main street intersection, including the Eucalyptus-tree node, the vegetable market and the bus terminal with its adjacent areas. 45 The Ministry of Awqaf is implementing a rehabilitation project for the mosque faqade by a donation from H.M. King Abdullah o f $700 thousands. 81 37. The total project area inthe center o fAjloun, excluding the landscaping areas and reforestation is about 6 hectares, o f which about 3.6 hectares are pnvately owned and the rest owned by the municipality. The area is o f triangular shape, with the mosque marlung its northern point, heading south through the vegetable market, which is distnbuted along a main axes street o f heavy pedestrian and vehicular traffic. The market street is not organized, whereas vegetable stalls and kiosks occupy large sections o f the carriageway, leaving some o f the shops behind vacant and idle. Three temporary modest structures housing some shops form an island penetrating the market and splitting it into two spines, one westward and the other southward. The southern spine o f the market leads to the bus terminal, also an unplanned space on municipal land that splits into two levels and includes car workshops. On the eastern side o f the market lies the city cemetery and forms an edge that rises steeply to the upper street. On the western side lies the entry point to Wadi a1 Tawaheen. Despite its chaotic organization, the center i s very vibrant and lively, and can provide an attractive place for locals and visitors to stroll across and enjoy the freshness o f agricultural products and domestic goods. 38. Considenng the above context, the project will support the following specific interventions: (a). Rehabilitation and upgrading o f the areas surrounding the Ayyoubi mosque, reorganizing the pedestrian and vehicular movements and creating quality urban space in front o f the mosque. This incoordination with interventions under sub-component 1.E.3; (b).Rationalization and rehabilitation of the vegetable market, optimizing the utilization and re- use o f the vacant shops, while maintaining a manageable amount o fvegetable stalls and kiosk inthe market. Rehabilitation will include the introduction o flandscapeand shading elements, street furniture, sidewalk paving and street pavements. (c). Upgrading and development o f the bus terminal, including the complete refurbishment and rehabilitation o f the terminal, rationalization o f vehicular and pedestrian routes and entrances, rationalization o f space organization, development o f new 'covered market structures on the municipal land (to accommodate spillovers from the rationalization o f the existing linear market), and possible demolition o f existing temporary structures46. (d).Upgradingand development o fWadi A1Tawaheen entrance, including necessarylandscaping arrangements, to initiate/support future development o f eco-tourism. Sub-component I.E.5: Construction/Rehabilitation of Essential Municipal Facilities -None Sub-component 1.E.6: Implementation of Traffic and Parking Managementplan -None Sub-component 1.E.7: Protection, Rehabilitation and Improvement of Cultural Landscapes 39. This sub-component includes the protection and reforestation o f vulnerable cultural and natural landscape areas, includingthe protection o f Wadis, and the selective development o f parklands for public recreation and eco-tourism. Inparticular, within the larger protected natural resort area already identified during project preparation4', a core area will be identified surrounding the Ajloun Castle to be directly rehabilitated under the project. In order to implement this sub-component, MOTA will be closely coordinating with the ministries o f Agriculture and o f Environment, and partner up with the Royal Society for the Conservation o f Nature (RSCN). The latter will lead the implementation work on the ground and guarantee the hture sustainable management o f the whole Ajloun Cultural Landscape. 40. Inaddition, this sub-component willbesupportedbythe SpecialRegulations for theprotectionof the Ajloun Cultural Landscape that will be developed and implemented under sub-component 4.1 o f this project. These will include the re-zoning of the over-zoned residential areas of Ajloun and Anjara, reducing the current trend to urban sprawls. 46Upon final identification of demolition cases, a resettlement plan will be prepared as per the project resettlement policy framework. 47During project preparation, the Ministry of Tourism, the Ministry of Agriculture and the Ministry of Environment signed a joint declaration to protect the Ajloun Cultural and EnvironmentalLandscape. 82 41. Inparticular, the interventionswill support: (a) Reforestation and rehabilitation o f the steep sloping areas surroundings the castle, particularly inthe sections where the recent development aroundthe castle has introduced retainingwalls that require a curtain o f green foliage to better integrate them within the surrounding natural landscape rising from below. (b) Reforestation o f the vulnerable and deteriorated edges o f the wadi along the road between Anjara and Ajloun. This intervention will complement sub-component 1.E.1 in terms o f creating a pleasant route to the castle, and will restore segments o f the green buffer between Anjara and Ajloun. (c) Reforestation o fthe edges where the natural landscape meets the built environment o f the city o f Ajloun, particularly around the project areas targeted by sub-component 1.E.4. These would include the cemetery adjacent to the project areas, as it forms a natural edge closing the city center from its eastern side, and the overall restoration ofpart o f the natural historical character o f the city that used to link the city fringes to the surrounding landscape. (d) Reforestation and regeneration of selected historic sections o f the Ajloun historic landscape that might include traditional artifacts like terraces, dry-stone walls and traditional irrigation systems. These specific interventions will be identified as part o f the study for the Special Regulations for the Conservation and Regeneration of the Ajloun Cultural Landscape (see Component 4.1). Sub-component I.E.8: Detailed Design and Supervision 42. This subcomponent will support the employment o f consultants to (a) preparelcomplete detailed design and contract documentation for the works to be undertaken, as well (b) supervision o f the construction o f these works. Employment would be on the basis o f Bank Guidelines. Component 2: Petra Gateway 43. The objective o f this sub-component i s to further enhance the development and consolidation o f the tourist industry inPetra, Jordan's premier tourism destination and World Heritage site. This initiative represents the completion o f important tasks that were begun but not completed under STDP due to time constraints-including widespread stakeholder consultation, expert review, the holding o f an international design competition and the completion o f detailed buildingdesigns. 44. The sub-component would support: (a) construction and operationalization o f a Visitors Centre (VC) for the Petra Sanctuary, one appropriate to the Sanctuary's status as a World Heritage Site and Jordan's premier tourist attraction; (b) consultancy services for detailed engineering and supervision and for management and organizational systems development; and c) training o f key operating staff. 45. Sub-component "a" (the VC) would inturnbe comprised o f the following: - An open-air amphitheatre that functions as the entry point to the new VC complex and the beginning o f thejourney to the Archaeological Park; - Areception,ticketingandvisitorsserviceareas(restaurant, giftshop,lounge,etc.); - Interpretationgalleries, stateoftheartfacilitieswithaudiovisualpresentations; - Aninternal opencourt, landscapedto displaythenativeandhistoricalplantsoftheoriginal Nabatean inhabitants o f the Park; - An administration wing that accommodates the VC management staff and the Park management staff directly concerned with visitors services, finance and administration; - Anundergroundpassagethatleadstotheparkgate. 46. The estimated development area i s as follows: Site Area: 1.3 Hectares - Building area: approx. 2,800m2 - External area: approx: 3,500m2 83 Component 3: Support to Local Economic Development and Salt Heritage Fund 47. The objective o f this component is to promote the economic and social revitalization o f the city cores of the PMs, and the preservation and economic reuse o f privately owned cultural heritage buildings. The sub-component would support business development in the city cores o f the PMs, and i s based on a model independently developed by SIYAHA for Madaba with funding from USAID. This model i s currently being implemented by SIYAHA in Madaba in close consultation with and under a Memorandum o f Understanding (MoU) with MoTA. Based on the experience of Madaba, the SIYAHA model will be revised and adapted for use in the other PMs (Jerash, Ajloun, Karak and Salt). The implementation o f this revised model in these PMs would be undertaken either by SIYAHA themselves, or by pnvate business development consultants employed by M o T A under the project. Sub-component 3.1: Business Development Grants 48. This sub-component would support business development grants to suitably qualified applicants. About hundred (100) grants would be provided. The eligible businesses and the arrangements for grant processing are outlined below. EligibleAreas of Support: 49. Technical assistance, grants, training and business development support would be provided to selected business enterprises and entrepreneurs (including NGOs; the applicants) in the city cores, and within the following broad areas: i)accommodation; ii)food and beverage; iii)traditional arts and crafts; iv) day- and night-time tourism- and local community-related cultural heritage, social and recreational activities; v) tourism services and relatedproducts. Grant Process and Required Documents: ',50. The following would be the main steps (see flow chart below): '-(a). Concept Paper: Prospective applicants would be required to submit a 1-2 page conceptpaper describing their business idea, rationale, and initial budget. The proposed should fit within the eligible support areas outlined above. (b). Concept Review: Paper would be reviewed by the program manager (SIYAHA or other) on the basis o f predefined objective cnteria (relevance, realism, feasibility, etc.) to be agreed by M o T A and the Bank, and selected applicants would be shortlisted. (c). Business Plan Preparation: The selected applicants submitting the most attractive projects would be required to prepare and submit a business plan and, if necessary, these applicants would be provided withfree consulting support (technical assistance and training) in order to enable them to prepare appropriate plans. (d). Business Plan Evaluation: Plans would be reviewed by a competent Evaluation Committee established by the program manager in each PM in consultation with M o T A and the Bank, and based on predefined criteria agreed with M o T A and the Bank. This committee must have adequate representation from the local community, including business and community leaders. (e). Grant Award: Successful applicants would be provided with a grant to cover (i) the cost o f physical upgrading of premises, (ii)equipment purchases, (iii)marketing materials, (iv) design and production costs. Referral Agreementsfor Additional Applicant Financing: 51. Because grant financing under the project would be limited (see above), applicants will be required to demonstrate that they can provide or raise the additional financing necessary to realize their business plan. This is expected to be a combination o f equity, loan andor other grant financing. To assist successful applicants in obtaining the necessary additional financing, SIYAHA (or the business development consultants) would enter into Referral Agreements with local banks and micro-finance institutions. 84 Disbursement: 52. This would be done through reimbursement against proof o f a) business establishment; b) business plan related milestones (such as specific deliverables, purchases, sales, etc); and c) three offers from approved vendors. Grant Monitoring and Reporting: 53. Inorder to monitor the effectiveness and efficiency ofthe use ofthe grants, successful applicants will be required to submit audited financial statements to M o T A for [3] years subsequent to the receipt o f the grant and/or effective establishment o f their business. These statements must be prepared by competent auditors acceptable to M o T A and the Bank, and contain sufficient detail to enable M o T A and the Bank to assess the success or otherwise o f the venture. Business GrantProcess Flowchart Selected Appl preparw Busi 1 .annualaudn reports toLEDTeam 1 (StYAHA)for 3 years Subcomponent3.2: Technical Assistanceand Trainingfor BusinessDevelopment 54. This sub-component would support: (a) the employment o f business consultants in accordance with Bank Guidelines to assist selected applicants with the preparationo fBusiness Plans ifnecessary; and (b) support to selected applicants for specific and essential business-related management training in marketing, production and accounting. Sub-component 3.3: BusinessProgram Management 55. This sub-component would support the employment o f competent program management and business development consultants to assist M o T A to implement and manage the Local Economic Development (LED) Grant Program. These consultants would be employed in the absence of an undertaking from SIYAHA to extend their services to any or all o f the other PMs (ie., Jerash, Karak, Salt and Ajloun). They would be recruited locally under Bank Guidelines. 85 Component 4: Capacity Buildingand ProjectManagementSupport 56. The objective o f this component is to ensure the effective implementation o f the physical and local economic development components o f the project, and to help build the capacity at the PMs and at M o T A for sustaining and replicating project initiatives. Sub-component 4.1: Municipal CapacityBuilding Program 57. The objective o f this sub-component i s to secure the PMs' commitment to the effective implementation o f the project, and to support the PMs in the execution o f the specific tasks within their domain. The PMs will be responsible for facilitating the successful implementation o f the project components "1" and "2" above, as well as for directly implementing the subcomponents listed below. Their commitment to undertake these responsibilities i s documented in a Municipal Revitalization Pact (the Pact; see note below). Sub -component 4.I.1:Municipal Revitalization Pact Support 58. This sub-component would support: (a). Project-related workshops, training, studies and communications; (b). Consultant services to help prepare and implement the key tasks specified under the Municipal Revitalization Pact, including: (i). relatedtoexpropriationandrelocation; historiccoreregulation(moredetailsonthe tasks city-core regulations are provided in Appendix 2 to this annex); traffic planning and management; municipal finance and management; and (ii). establishment o f an effective City Core Management Unit (CMU) in the Municipality, including: employment o f key staff for the CMU (director, chief engineer, and chief financial and accounting officer); baseline studies and annual performance surveys; and Acton Plan preparation, implementation and monitoring. (c). Incremental operating expenses -- essential vehicles and equipment for the C M U (including office and solid waste management equipment for the city cores); utilities; and essential supplies and spares. (d). Performance Incentive: additional core infrastructure funding based on PM performance under Municipal RevitalizationPact. 59. Annex 6 provides further details on Municipal Revitalization Pacts, the CMU and the Community Strategic Partnerships. Sub-component 4.1.2: Community Strategic Partnership 60. The objective o f this subcomponent i s to provide a forum for community participation, information sharing, and the expression o f community views with respect to the choice and implementation o fproject components. 61. This sub-component will support community workshops, studies and public information to enable the effective functioning o f the Partnerships. Sub-component 4.2: MoTA Capacity Building and Project Management Support Program 62. The objective o f this sub-component is ensure the efficient, effective and timely implementation o f the project, as well as the further strengthening o f tourism development planning and project management at MOTA'STechnical Development Department (TDD), the department almost completely responsible for project implementation, as part o f the overall strengthening o f the Ministry. 86 Sub-component 4.2.1: TDDProject Management Support 63. The sub-component will help strengthen TDD (See Annex 6 for note on TDD role and capacity building needs. It would support: 1. project-related workshops, training, studies and public information; 2. consultant services for project preparation, management and supervision, including employment o f key skills (project managers, planners, engineers, architects, sociologists, statisticians, accountants and financial analysts) necessary for the efficient management of the project and the identification and initial preparation o f subsequent projects 3. incremental operating expenses including (i)utilities (electricity, telecoms; internet and other computer services); and (ii) essential operating supplies and spares; and 4. essential vehicles and equipment (including office equipment). Sub-component 4.2.2: MOTASupport 64. This component will help strengthen MOTA'Spolicy making and data collection and analysis capability. Itwould support: (a). consultant services for studies and training; (b). essential office equipment and software. 87 r ~ I n e 1 t Lo .- EB c 2 X - X m 1 8 b .- $E c E 2 0 - 7 I m b a, > .- EE c 2 0 vi 1". - v) * m .- E$E E 4 2 W 0 - 2 c10 e I .- 2B c NE a- vi 0 N x m - 9 C t4 e, 8 -t- ----t-- T T IBi E E E t 1 E E t E fr E E h ei J E L1 1 ? 1 i Annex 4 Appendix 2: City CoreRegulationsandAjloun Cultural LandscapeRegulations - City CoreSpecialRegulations and Ajloun Cultural LandscapeSpecialRegulations 1. In order to ensure long term sustainability o f the revitalization process of the histonc cores of Jerash, Madaba, Karak and Salt and support continuous preservation o f the rapidly declining number o f histonc buildings, the project will support the preparation and pilot application o f special City-Core Regulations. While the current law governing heritage protection in Jordan stipulates that only buildings erected before 1700 AD are protected as heritage, the Cities, Villages and Buildings Planning Law no. 79/1966 allows for specific regulations to be adopted for built heritage by the Municipality, as part o f the city Structural Plan. The proposed City-Core Regulations will therefore be consistent with the latter national planning law and developed in coordination with the Ministry o f Municipal Affairs. 2. The special regulations for the historic cores developed under the project will be designed to allow for contemporary conservation and development interventions, supporting and encouraging the sustainable local economic development o f evolving cities. Inparticular, the legal instruments would aim to regulate consistently all elements that make up the urban fabric o f the historic core (including, for example, elements like the color range and frequency o f application o f paint for private-building facades), while also reinforcing the existing multi-functionality o f such cores. T o this end, they would move away from the use o f less appropriate planning tools, like zoning4', and introduce innovative regulatory frameworks that, for example, would allow building alterations within given parameters o f constructive techniques or permit the introductiodcreation o f alternative activities and different functions, provided that these are compatible with given parameters consistent with the character o f the traditional urban fabric. 3. Inthe specific case o f Salt, in order to overcome issues of finance for restoration and adaptive reuse for a large stock o f historic buildings, the City-Core Regulations will be complemented by the creation under the project o f a pilot Heritage Fund for the Protection of Salt Urban and Architectural Sites. This fund will be designed building upon an ongoing municipal initiative and aimed to provide specific financial incentives to encourage private owners o f historic buildingsto preserve, rehabilitate and restore their assets. This fund will be managed by Salt Municipality and, given the very innovative nature o f this funding instrument, the details o f its regulatory setup will be designed very early in project implementation as to be piloted and incrementally improvedthroughout the life o f the project. 4. Jordan i s also reach in Cultural Landscapes, which include a combination of invaluable built and natural heritage assets, like native vegetation (e.g. the Oak Quercus Calliprinos), traditional cultivations (e.g. olive trees), terraces and other artifacts testimony o f a long history o f human interactions with the territ01-y~~.These natural and hentage landscapes, while preserving cultural values and ecological diversity, offer economic benefit through continued agriculture, tourism, scenic and amenity value to local areas. 48 While zoning IS generally appropriate for large-scale master planning, this would not generally be the case for historic cores, which are small and because o f their specific nature require very detailed regulatory frameworks and action plans. The historic city core can be considered a special zone within any given larger territorial planning tool, and as such require a specialized regulatory framework. 49For a detailed definition of Cultural Landscape, see UNESCO, at httn::iM,hc.uncsco.orqicn/culturallandscauei, which refers to the definition provided in the 1992 World Heritage Convention, by which cultural landscapes represent the "combined works of nature and of man" They are illustrative of the evolution of human society and settlement over time, under the influence of the physical constraints and/or opportunities presented by their natural environment and of successive social, economic and cultural forces, both external and internal. ....The term "cultural landscape" embraces a diversity of manifestations of the interaction between humankind and its natural environment. Cultural landscapes often reflect specipc techniques of sustainable land-use, considering the characteristics and limits of the natural environment they are established in. and a specific spiritual relation to nature. 93 5. While there is a number o f natural parks and reserves in Jordan that are protected either for their specific environmental value (e.g. the Dana resort), or for their hentage one (e.g. the Petra archeological park), the idea o f protecting and regulating development within and around special areas o f the territory for their combined heritage and natural value is relatively new. For this to happen in an effective way, a combination o f local leadership and coordinated support by different ministries (particularly MoTA, the Ministryof Municipal Affairs, the Ministryo f Agriculture and the Ministryof Environment) and leading national conservation groups (particularly the Royal Society for Conservation o f Nature -RSCN) i s key. 6. Considenng the above, inthe specific case o f Ajloun, the project will support the development o f special regulations for the sustainable regeneration and preservation o f the Cultural Landscape surrounding the Castle. These regulations will control development within and around the protected Cultural Landscape by introducing specific land-use standards for the protected area and detailed building regulations for those residential areas adjacent to the Cultural Landscape and visually related to it. Given their multi-sectoral nature, these regulations will be developed in coordination with the municipality, the MoMA, the Ministry o f Agriculture and the Ministry o f Environment, and implemented and enforced under the leadership o f the Ajloun municipality and RSCN. 7. Since both the City Core Regulations and Ajloun Special Cultural Landscape Regulations will be developed during the first year o f project implementation, specific transitory regulations were adopted in all the project cities during project preparation in order to safeguard the sites and control development during the interim period, untilthe final regulations are finalized and approved. Inparticular, with regard to the Ajloun Cultural Landscape, as a first step towards its protection, during project preparationthe P M initiated the protection process by issuing a cabinet decision (dated August 22, 2006) including the following actions: (a) to proceed with the declaration o f Ajloun and its surrounding areas as a National Parld Protected Area according to the Law o f Protecting the Environment (1-2003), in full coordination with Ministryo f Environment and Ministryo f Agriculture; (b) Ministry o f Municipal Affairs and Grater Ajloun Municipality to take the necessary legal actions to control urban growth and review the boundaries o f the approved Master Plan and take the needed actions to downsize the zoned areas. (c) M o T A with other entities and consultants (RSCN) to establish the needed mechanisms to regenerate the degenerating green areas inAjloun. 94 Draft City-CoreInterimRegulations Background 1. As envisaged by the Cities, Villages and BuildingsPlanning Law no. 79, year 1966 (the Planning Law) and confirmed by international best practice, historic centers o f cities need to be safeguarded by means o f special regulations aimed at preserving the integrity and character o f the historic core in its totality, and not simply intervening inthe preservation building-by-building or monument-by-monument. 2. InJordan, due to gaps inthe Planning Law and inthe Law of Antiquities no. 21 of 1988, the development and management o f historic city cores has never been regulated, with dramatic and irreversible consequences both for the loss o f unique historic assetshuildings and for the overall loss o f the country historic patrimony represented by the character of the historic cores. 3. The adoption and implementation o f Special City-core Regulation is intended to fill the above described gap in the planning regulation system o f Jordan and stop the ongoing process o f decay and irreversible loss o f invaluable patrimony in historic cities. This will be obtained through the preservation o f still existing historic building and the attentive planning and management o f physical development within the historic core. Legal Context 4. The Planning L a w and its subsequent amendments, allows for the identification o f sections o f the territory to be subject to special zoning and regulations. Given their special needs and unique charactenstics, historic cores o f cities fall under the category o f such sections o f the municipal territory to be subject to special zoning and related regulations, even if this action has never been implemented up to date, with dramatically negative consequences for the historic cities o f Jordan. 5. The Ministryo f Tourism and Antiquities (MOTA),incoordination with the Ministry o f Municipal Affairs (MoMA), will workicollaborate with four partner municipalities, Jerash, Karak, Madaba and Salt, under the upcoming Jo-Cultural Heritage, Tourism and Urban Development (CHTUD) Project, to develop Special Planning and Conservation Regulations for the Management of Historic Cores (herewith referred to as Special City-core Regulations) and implement them as pilot special regulations under the Planning Law. Objectiveof the TransitionalArrangements for the SpecialCity-coreRegulations 6. The municipalities o f Ajloun, Jerash, Karak, Madaba and Salt are expected to adopt by means o f a municipal resolution the Interim City-core Special Regulations before commencement o f implementation o f the (CHTUD) Project to be adopted immediately by the municipalities to control construction and any other type o f development activities (e.g. renovation, changes o f use, etc.) within the city core. This action is taken with the objective to safeguard the historic city cores in the interim period while the city-specific final Special City-core regulations are developed and adopted. [Suggested text to be adapted by each municipality: The Municipal Council of ......passes on date...... the municipal resolution No. ... adopting the subject Interim City-core Special Regulations aimed to control construction and any other type of development activities For example renovation and changes of use) within the city core. This action is taken with the objective to safeguard the historic city cores in the interim period while the city-specific final Special City-core regulations arefully developed and adopted] Interimprocedures 7. The adoption o f the Interim City-core Special Regulations gives authority to the municipality to control any development activity within the historic city core during the period while the final Special City-core Regulations are developed. 95 8. Within this transitory period, any application for building licenses and request of permits for other specific interventions within the historic core will be reviewed and assessed on a case by case basis by a qualified team, provided and/or approved by MoTA, which will include relevant technical expertise and help the municipality to review applications and take timely decision. Next steps 9. Inline with the provision ofthe Villages and Buildings PlanningLaw no. 79,year 1966, these are transitional regulations valid until the final Special Planning and Conservation Regulations for the Management of Historic Cores are developed by M o T A in collaboration with M o M A and the Municipality, as per the standard procedure o f the Planning Law and approved by the Higher Planning Council for adoption and implementation by the municipalities. 96 Annex 5: Project Costs JORDAN: CULTURAL HERITAGE, TOURISM AND URBANDEVELOPMENT PROJECT Project Total Cost Estimate (US$ million) 1. Revitalizationof HistoricCity Centers, UrbanInfrastructure 50.26 55.15 77.6% 47.14 84.2% Improvementsand CulturalLandscapesRegeneration ........................................... " ................................. ......................................... ._.......... . .............. .............._.... ............ .................. ......................................................................... 1.A Jerash .-...................................... ................................... 8.72 ._................._.............................. 9.59 ............................ 13.5% 8.17 .............................. ~ l.B Karak 13.44 14.78 20.8% 12.60 I l.C Madaba I1 9.61 10.49 14.8% 8.94 9.93 II 10.87 II 15.3% II 9.34 I l.E Ailoun I 8.56 I 9.42 I 13.3% I 8.08 III III 12. PetraGateway 5.50 6.05 8.5% 5.17 9.2% 13. Support to Local EconomicDevelopmentInitiatives 1I 1.15 II 1.16 II 1.6% II 1.15 1I 2.1% 1I ITotal Project Cost I 71.08 I 100% I 56.00 I 100.0% I 97 Project Detailed Cost Estimate (US$ million) Total Total No. Item excluding including Percent Bank 1 ; I .............................................................................................. Contingencies Contingencies of(y) _.Financing Total .......................... (US$ rn) (US$ m) (US$ rn) 1 1 1 1 1 ................................................................................................................................................................................................. 1 Revitalization of Historic City Centers, Urban Infrastructirre Improvements and Cultural Landscapes Regeneration ...............................................,............................ .......... ...........................,.............. ....,.................................. ................................................................................................................................................................................................................................................................ :.4, Jerash ...... ................... ................................................ ............................Upgradingo f Street Network and Allied Public Spaces .......................................................... ............................................. ." .............................................................. l.A.l(aJ Prim.. Sec. & Ter Streets: IWasfi-AE-Tal. King Abdullah & Bab Amman) 4.800 5.280 4.488 I A I@)Landscapingof 2 critical Jets (Municpal Sq & Wasfj,AI-TallKing Abdullah) 0 350 0 385 0 327 subtotal 5 150 5 665 4 815 1 A 2 Rehabilitationand Cleaning of Building Facades 0.700 0 770 0 654 1 A 3 Renovation& Preservationof Selected Heritage Buildings (Adaptive Reuse) 1 A 4 RehabilitationandUpgradingof Pivotal UrbanSpaces I A 4 (a) Demolition of visually invasivebuildings and relocation of related activities 0 100 0 110 0 093 I A 4 (b) Rehabilitation of South Bridge Crossing 0 300 0330 0280 I A 4 (c) Landscape of Wadiurban corridor (incl Sidewalkalong WasJiA1-Tal) 0 200 0 220 0 187 I A 4 ld) RenewaUcomuletionofEast Bath node 0 700 0 770 0 654 subtotal 1 300 1430 1215 1.A 5 Construction Municipal Multi-functionFacility (Conditional) 0950- ' 1045 0 888 1A 6 Implementationof Traffic and ParkingManagementPlan 0 200 0 220 0 187 1A 7 Rehabilitation/Improvement o f Cultural Landscapes IA8 DetailedDesignand Supervision Services 0 415 0 456 0.411 Total Jerash 8.715 9.586 14.7% 8.171 1.B Karak 1 B 1 Upgradingof Street Network andAllied Public Spaces I B 1(a) Primary, Secondaryand Tertiary Streets,incl drainage improvements 4 200 4 620 3 927 1B 1(b) Eastern access 0 150 0 165 0 140 1B 1(c) Heritage Trail CfromKarak Gateway to CastlePlaza) 0 350 0385 0 327 subtotal 4 700 5.170 4 394 1B 2 Rehabilitationand Cleaning of Building Facades 0 500 0 550 0 467 l.B 3 Renovation& Preservationof Selected HeritageBuildings(AdaptiveReuse) 0 900 . ._ 0 990 ' 0841 1B 4 Rehabilitation& Upgradingof Pivotal Urban Spaces (Karak Gateway) I B 4(a) Panoramic Walk/Wall repair 0 500 0 550 0 467 I B 4@) Rehabilitation oflnner-City Bus Terminal 3 000 3 300 2 805 I B 4(c) ConstructionMunicipality BuildingandParking Garage 3 000 3 300 2 805 subtotal 6 500 7 150 6 077 1 B 5 Constructionkhab of EssentialM 1B 6 Implementationo f Traffic and ParkingManagementPlan 0.200 0 220 0 187 1B 7 Rehabilitation/Improvement o f Cultural Landscapes 1 B 8 DetailedDesign and Supervision Services 0640 . . . . ' 0.704 0 634 Total Karak 13.440 14.783 22.7% 12.601 * Includedin 1 B4. [IB.4 (c)] 98 Total excluding Total including percent Bank No. Item .................................. Contingencies Cont,!nge?c!es..,of Total Fin?!!c!,?% , (US$rn) (US$ rn) (%) (US$rn) . . . . . . . . . . 2 PetraGateway (VisitorsCenter) . . . . . . . . . . . . . . . ....................... ................................................................................................................................................. ................................................................................................................................................................................................................................................................\ 2.I 'Construction of the Visitors Center 5.000 5.500 4.675 ................................................................................................................................................. .................................................................................................................................................................................................................................................... 2.2 Consultant Services " ................................................................................................................................................................................................................................................................ 2.2(a) Building design and supervision 0.250 0.275 0.247 ............................................................................................................................................................................................................................................ 2.2(b) Organization, management,stafjng and systems 0.200 .............................................................................................................. 0.220 0.198 .......................................................................................................... subtotal 0.450" . . . . . . . . . . . . 0.495 ............................................................ 0.445 ._ ............................................................................... ................................................................................................................................................................................................................................................................ 2.3 Workshops and training ................ ........................................................................................................................................ 0.050 0.055 0.049 Total Component 2 5.500 6.050 9.3% 5.170 .............................................................................................................................................................................................................. 3 Local EconomicDevelopment ...................................................................................................................................................................... ................................................................................................ 3.1 Business Development Grants .............................................................................................................................................. 1.000 ................................................................................................................................ 1.000 1.000 .................................................................................................................................................. ................................................................................................. 3.2 Workshops and Training 0.075 ........................... .......................................................................................................... 0.082 0.074 .................................. 3.3 Consultant Services, Program Management 0.075 ................................... 0.082 ................................................. 0.074 " " _ .............. _ ......................................... ". Total Comuonent 3 1.I50 1.165 1.8% 1.148 Capacity Buildingand Project Management MunicipalCapacity Building (all PMs) Municmal Revitalization Pact ................................................................................................................................................................................................................................................................o 4.I.l(a) Workshops, Training, Studiesand Project Information Support 0.200 0.220 0.198 .................................................................... 4.I.l(b)Consultant Services ................................................................................................ ....................................... ....................................... 0.700 ................................................. 0.770 ....................................................... 0.693 _. .............................................................................. 4.I.l(c) Incremental Operating................................................................................................................................................................................................................................................................9 Costs (CMU) 0.070 0.077 0.069 4.1.1(d) Incentive for add ............................................................................................................... a1Municipal Worksin cores ................................................................................................................................................................................................................................................................ 0.500 0.500 0.425 .......................... ................................................................................................................................................................................................................................................................TM subtotal 1.470 1.567 1.385 .................................................................................................................................................................................................................................................. 4.1.2 Community Strategic Partnership (all PMs) 0.100 0.100 0.090 ^ ........................................ ........................................................................................................................................................ ^ subtotal f4.1) 1.570 1.667 2.6% 1.475 14.2 Project ManagementSupport MOTA 4 2.1 TDDProjectManagementSupport 4 2 I(a) TDD Workshops, Training, Studies and Project Information Support 0 100 0 110 0 099 4 2 I(b) Consultant Services 0 500 0 550 0 495 4 2 I(c) Incremental Operating Costs 0.IO0 0 110 0 099 4 2 I(d) Ofice Equipment and cars 0 200 0 220 0 198 subtotal (4 2 I) 0 900 0 990 0 891 Total Cost 71.078 I 1 56.000 100 Annex 5.A: Financial Summary JORDAN: CULTURAL HERITAGE, TOURISMAND URBANDEVELOPMENTPROJECT II Implementation Period Calendar Year II Year1 Year2 Year3 Year4 Year5 Year6 2007 2008 2009 2010 2011 2012 ' Total.............................................................................................(US$......million) FinancingRequired " ........................................................................................................................................................... .................................... _ ............................... Project Costs ........................................ _. .("............. ........................................................ "......... .................................. ....................................................................... ....... ........................... ~ ._ ~ ............ ................................................. ExpropriationCosts .............................. "....... ....... ............ ........................................................................................................................................... Total Project Costs .................................................................................................................................... ........" Interest during construction .............................................................. ~ " ........................................................................................................................... Total FinancingRequired 3.80 11.31 14.33 21.55 14.56 5.53........... 1 ............. Financing IBRD 1 ................................................................................................................ 18.50 1 12.50 1 4.75 1 " ......................................................................................................................................................................... ................................................ ................................................................................................................................................................ Government.................................... ......................................................................... ............................................................................................................................. ............. ................................ ............................................................................................. _......................................................................................................................... .................................. _ ................................................................................................................................................................................................................................................................· Co-Financiers ................................................................................................................................................................................................................................................................f User-feesmeneficiaries ................................................................................................................................................................................................................................................................· Other Total ProjectFinancing 3.80 11.31 14.33 21.55 14.56 5.53 101 Annex 6: ImplementationArrangements JORDAN: CULTURALHERITAGE, TOURISM AND URBANDEVELOPMENT PROJECT 1. The Project would be implemented between March 31, 2007 and March 31,2012, and September 30,2012 would be the Loan closing date. Allocation ofResponsibilities 2. Primary responsibility for project implementation would reside with M o T A - the Executing Agency. Specifically, responsibility would reside with MoTA's Technical Development Department (TDD),but DOA and M o M A will have a key supporting role on matters respectively related to cultural heritage preservation and the PMs. The Ministry o f Planning (MoPIC), as the key representative o f GoJ on developmental matters would play an important guiding, monitoring and policy support role. 3. Key roles would roles would also be played by the PMs and local community groups. In particular, PMs would be responsible for providing support to M o T A in implementing the project at the local level. The instrument for municipality participation would be Municipal Revitalization Pacts executed between the PMs, MoTA, MoMA, MoPIC and the Governorate. (The proforma Municipal RevitalizationPact is presentedinAppendix4 o fthis annex.) 4. Inorder to ensure effective local participation, the PMswould establish and maintain Community Partnerships comprised o f key representatives o f local civil society. These Partnerships would elect a chairperson from among their membership, and would meet quarterly or as necessary to review local priorities and progress, and to provide guidance to the PMs and M o T A on the project. Coordination 5. Higher-level coordination would be maintained through an inter-ministerial Project Steering Committee (PSC) comprising the Secretary Generals or their nominees o f MoTA, MoMA, MoPIC and DOA, as well as the Director o f the Jordan Tourist Board (JTB)-the latter as a key actor inthe tourism sector.. PSC would meet quarterly or as needed to provide guidance and solve problems, and would be chaired by the Secretary General of MoTA. Local level coordination would be assured through Municipality Program Coordination Committees (MPCC) comprising the respective mayors and provincial governors, senior representatives o f M o T A and representatives o f local civil society. MPCC would meet monthly or as necessary to review progress and solve problems, and would be chaired by the Governor o f the Province. 6. The specific roles and responsibilities o f the key parties are outlined in more detail below. An overall project organogram i s presented at Appendix 1, and an implementation schedule at Appendix 3 o f this annex. MoTA's Role 7. As the overall implementing agency, MoTA would be responsible for ensuringinthat the Project i s delivered in accordance its aims and objectives, at an acceptable quality, and on time and within budget. M o T A i s also responsible for overseeing the work o f the other agencies involved in the project, particularly the PMs, and for ensuring that Bank guidelines, including, inter alia: procurement, accounting, environment, and resettlement are met. In addition, M o T A in close consultation with the PMs, the project Governorates, M o M A and MoPIC, will: (a) Directly implement Components 1,2 and 4.2 o f the Project; (b) Implement component 3 incoordinationwith USAIDunder the latter's SIYAHA project; (c) Within the context o f the agreed Municipal Revitalization Pacts, provide the support and oversight necessary for PM's to effectively discharge their responsibilities under Component 4.1 o f the project; 102 (d) Coordinate and monitor on all Project activities, including liaising with other government agencies and mobilizing community and private sector support for Program objectives; (e) Enter into or approve all procurement under the Program; (f) Manage and account for all Project funds; and (g) Report to all parties and the Bank on the progress o f project components and utilization o f project funds, including monthly, quarterly, half-yearly, annual, mid-term, end o f project, and other periodreports as may be necessary for effective project management. TDD'sRole, Organizationand CapacityBuilding 8. As noted above, TDD i s the arm o f MOTA primarily responsible for project implementation, including all contracts, accounting, monitoring and reporting. TDD performed admirably inimplementing STDP, but now needs to be considerably strengthened to effectively manage this more complex project. MOTA would thus take urgent steps to recruit the necessary staff as shown inthe table below Table 1: TDD Staffing Requirements TDD Units Existinn Staff Additional Staff Needed Planning 1 Director (vacant) 1 UrbanPlannerDirector 1 Civil Engineer 1 Economist 1 Socio-Economist Developmentand Design 1 ArchitectiDirector 1 MunicipalEngineer Architect 1 CAD Draughtsman Architect ProjectImplementation .. 1 1 CivilEngineeriDirector 1 Architect Civil Engineer (2) 1 Civil Engineer (2) 1 Electrical Engineer 1 Surveyor Procurement 1 Civil EngineeriDirector 1 Contracts Engineer 1 Administrative staff Site Management and 1 Heritage Specialist/ Director 1 Architect (cultural heritage regulation) CulturalHeritage InternationalFunding 1 AccountantElirector 1 Accountant Administration 1 Administrative Assistant a Coordinator 1 Executive Secretary 1 Administrative Assistant 1 IT Specialist Department of Antiquities . Architect (renovation) support 1 Archaeologist (documentation) Trainingand Equipment 9. Inadditionto recruiting additional qualified staff, MOTA will take the steps necessary to ensure that TDD has the requisite skills and appropriate equipment to effectively manage the project. To this end: - Training will be provided to TDD Staff in the following main disciplinary areas: project management, monitoring and reporting systems; accounting systems; cultural heritage and tourism asset protection, management; site development and commercialization; tourism development; and data collection and analysis. - Appropriate and sufficient equipment will be provided to TDD, including: modern computerized office equipment, software, and cars for close supervision. 103 ProjectMunicipalities(PMs) Role 10. The PMs would be responsible for facilitating the successful implementation o f the Project components in their respective jurisdictions, for ensuring their long-term sustainability. They are also directly responsible for implementing Component 4.1 o f the project in close consultation with MoTA. Further, the PMs are especially responsible for ensuring local workmg-level coordination and problem solving with the water and electricity utility companies. Within the framework o f their Municipal Revitalization Pacts, the PMs will: (a) Implement the expropriations, relocation deemed necessary by M o T A and M o M A to ensure the effective implementation o f the Project. This includes: (b) Enact and implement the regulatory reforms necessary to achieve and sustain Program objectives inthe historic core. This includes: (c) Enact and implement the traffic planning measures necessary to achieve and sustain Program objectives inthe historic core. This includes: (d) Establish and maintainbroadly- based Community Partnerships that can mobilize community in support o f the Project and act as vehicles for community consultation, participation and information sharing. (e) Establish a special Unit that will efficiently, effectively and sustainably manage the Program Area (city core) duringand after to Programcompletion. This includes: (0. Establishing a dedicated City Core Management Unit (CMU) within the Municipality and reporting directly to the Mayor to ensure the effective management and maintenance o f the city core (including the new investments implemented under the Program). (ii).ProvidingtheCMUwiththenecessarylegalauthority, staffingandtechnical, financial and administrative resources to effectively assume its role (in coordinationwith all the other concerned Municipality departments). (iii).EnsuringthattheCMUundertakeathoroughandcompetenttechnical, financialand administrative assessment o f the steps necessary to manage and maintain city core services, including but not limited to environmental, traffic, transportation and business development support services. (iv). Ensuringthat the CMUdevelop a feasible Action Plan development (including tourism development) and for efficient service delivery in the city core based on the above assessment. (9 * Tahng the steps necessary to sustainably fund the implementation o f the Action Plan, including but not limited to steps to improve the efficiency o f overall municipality management, finance and accounting systems. (vi). Effectively implementing the Action Plan in consultation and coordination with other municipal departments, key public agencies (including the water and electricity utilities), and key stakeholders. The City CoreManagementUnits' (CMUs) Role 11. The C M U i s a vital part o f the institutional framework o f the project within each PM. Its main tasks include: (a) Management and maintenance o f the revitalized City Cores; (b) Coordinationwith TDD and other "parties" inensuring effective local project implementation (c) Implementation o f baseline and periodic surveys to measure and monitor with project performance and conformity with project objectives; (d) Coordination o f the municipal capacity building effort, including efforts to strengthen municipal management and finances; 104 (e) Local business and tourism development promotion, including the preparation and implementation o f a Business and Tourism Development Plan for the revitalized City Core; and (f) Logistic and technical support to the Community Partnership effort. 12. As noted above, the CMUs would be established and supported by their respective PM. They would be staffed by a small group o f about 4 highly qualified professionals, led by a capable and experienced manager with 7 to 10years experience ina similar post. The team would include: - amunicipalengineer; - a municipal accountanthinancia1analyst; and - amarketindpublicrelationshnformation. 13. C M U would report directly to the Mayor, and would have the mandate and resources to initiate several o f the above activities by themselves. However, they would also liaise closely with other PM departments to mobilize additional resources and to ensure effective coordination in the management o f the Core and the affairs o f the City as a whole. CommunityPartnerships 14. In order to ensure that the project and the project agencies are responsive to the needs and priorities o f the local population and project capture by narrow sectional interests, as noted above broadly-based Community Partnerships would be established and maintainedby the PMs. The leadership o f the Partnerships, would be responsible for: (a).Reviewing the scope and content o f the proposed interventions in the PMs for quality, objectivity and for consistency with local needs and priorities; (b).Monitoring the progress and quality o f interventions under the Municipal Revitalization Pacts; (c). Mobilizing community participationand support; and (d). Mobilizing private investment in establishing new tourist-related businesses and improving existing ones. ProjectGovernorates' Role 15. The Governor would chair the MPCC, and within the framework o f the Municipal Revitalization Pacts the Governorate will assist and support the PMs in: (a) Implementing the specific agreements with the companies and institutions responsible for providing services inthe city (including the Water Authority and the Electricity Company); (b) Ensuringthe implementationo fthe specific decisions ofthe MPCC; (c) Helping top remove obstacles that face Program implementation on the local level; (d) Supporting the Municipality in implementing all aspects o f the Program that involve public safety and public health. (e) Bringingto attention o f the Institutions any social and economic issues of local and regional importance that are o frelevance to success and the sustainability o f the Program. (f) Takmg the steps necessary to effectively promote economic and social development in the city core. 105 Ministryof MunicipalAffairs' Role 16. M o M A would be responsible for providing policy, institutional, legal and technical support M o T A in implementing the proposed actions and reforms in the PMs. In addition, M o M A will discharge its normal municipal oversight responsibilities under the law. Further, within the framework o f the Municipal Revitalization Pacts M o M A will assist and support the PMs in: (a) Obtaining the legal, institutional and financial backmg and resources from central government and, if necessary, the courts to effectively implement the expropriations and relocations that are a prerequisite for implementing the Program; (b) Obtaining the legal, institutional and financial backing and resources from central government and, if necessary, the courts to prepare and implement new regulations deemed necessary to effectively protect the existing historical and cultural assets inthe city core; (c) In taking the steps necessary to effectively establish and operate their CMU, including carrying out the task o f effectively managing the city core and promoting business development; (d) Intaking the necessary steps to improve the overall management and financing o f municipal services including, where necessary, but not limited to improving the collection o f municipal fees and taxes; (e) Intaking the steps necessary to effectively promote economic and social development in the city core. Ministryof PlanningandInternationalCooperation'sRole 17. MoPIC would be responsible for providing policy, technical and institutional support to M o T A and M o M A in implementing the proposed actions and reforms under the project, including actions and reforms inthe PMs.Within the framework o f the Municipal Revitalization Pact the MoPIC will assist and support the Municipality in: (a) Obtaining the legal, institutional and financial backing and resources from central government and, if necessary, the courts to effectively implement the expropriations and relocations that are a prerequisite for implementing the Program; (b) Obtaining the legal, institutional and financial backing and resources from central government and, if necessary, the courts to prepare and implement new regulations deemed necessary to effectively protect the existing historical and cultural assets inthe city core; (c) Intahng the steps necessary to effectively promote economic and social development in the city. SIYAHA andthe LEDComponent(3) 18. The USAID funded SIYAHA project i s already providing support for tourism-related business development in Jordan, and proposes to do so in Madaba in close coordination with MoTA. Given SIYAHA's particular expertise and experience, M o T A ad the Bank have agreed they (SIYAHA) would be given responsible for implementing the LED component at Madaba. This responsibility would be discharged under a M o U between USAID and MoTA. Under this MoU, SIYAHA would also consider assisting M o T A to implement the LED components in the other PMs (Jerash, Karak, Salt and Ajloun). However, in the event that SIYAHA chooses to not to assist with the other PMs, competent program management and business consultants acceptable to M o T A and the Bank would be employed under the project to undertake this task. They would do so usingthe systems and procedures developed by SIYAHA inMadaba. 106 I Annex 6 Appendix 2: TDD Organogram - Engineer (Comncn) (CunuralHernage Reg) Note:1)Suppoltto DOA and NewPosilionsle?, unshadec 2) Coodinator and IT Speualist reqd.for Admin. Group 108 Annex 6 Appendix 3: ProjectImplementationSchedule - 109 110 f .? r r h > z Annex 6 Appendix 4: MunicipalRevitalization Pact - JORDAN: CULTURALHEIUTAGE,TOUFUSMAND URBANDEVELOPMENTPROJECT Ministry of Tourism and Antiquities Cultural Heritage, Tourism and Urban Development Project Municipal Revitalization Pact ........................... Municipality (Signed Pacts dated July 23,2006 are in the ProjectFiles) PARTIESTO THE PACT The ..............Municipality (...M) The Governorate (....G) 0 The Ministryo fPlanningand International Cooperation (MoPIC) 0 The Ministryo fTourism and Antiquities (MOTA) The Ministryo f Municipal Affairs. M o M A The institutions listed hereto (the Parties) have agreed upon the following. TITLE I-OBJECTIVESAND DURATIONOF THE PACT 1. The objective o f the Pact is to document what has been agreed by the Parties with respect to the implementation o f a program o f development (the "Program") inthe core area of the municipality. 2. By signing the Pact, the Parties agree: (1) tojoin efforts inworking towards achieving the objective o fthe Program; (2) to engage themselves formally, individually and collectively, according to their areas of responsibility as described hereinafter, to implement all the agreed Program components, as described below; and (3) to implement the Program inits integnty, within the agreedbudget and on schedule. 3. The Program is a key part o f MOTA'SWorld Bank-supported Cultural Heritage, Tourism and Urban Development Project (CHTUDP or the Project). It has been prepared o n the basis o f the social, economic and institutional analyses o f the urban areas o f the Municipality; was discussed with the civil society during the City Consultation Workshop held in .............on............, 2004; and was subsequently validated duringthe City Revitalization Program Consultations in ................... 2005. 4. The Project is expected to last 5 years. The Pact and the Program become effective upon the formal effectiveness date o f the Project, and terminate upon the formal termination date o f the Project. If for any reason the Government o f Jordan and the World Bank should decide to extend the closing date of the Project, the Pact and the Program maybe extended to the new Project closing date, if agreed by the Parties and by the Government of Jordan and the World Bank, TITLE I1-THE MUNICIPALITY PROGRAM Program Objective 5. The objective of the Program is to promote economic and social development inthe Municipality, and to also contribute to local and national tourism development. 6. This objective will be pursued by: (i) physical and economic revitalization of the Municipality's historic core, [and the preservation and regeneration o f natural landscapes]; (ii) improvement in municipal management and financial capacity; and iii)Community Strategic Partnerships aimed at mobilizing local entrepreneurial, managerial and financial resources and capacities. 115 ProgramComponents 7. The following are the main components o f the Program to be implemented in the historic core o f the Municipality: o UrbanInfrastructure Improvement Works 1. Upgrading o f street networks and allied public space 2. Rehabilitation and upgrading o f pivotal urban spaces 3. Rehabilitation o f Faqades on Primary Streets 4. Renovation and Preservation of selected Heritage Buildings through Adaptive Reuse. 5. Construction /rehabilitation o f essential municipal buildingsand facilities 6. Traffic and Parking Management 7. [Rehabilitation/ improvement o f Cultural (Natural) Landscapes] o Local EconomicDevelopment 1. Business Development Grant and technical Assistance Capacity Building 1. Municipal Core Regulation and Management 2. Community Strategic Partnerships (See Appendix 1 for a summary o f Program costs.) ProgramFunding 8. The Program will be jointly funded by the Government of Jordan and the World Bank. The Municipality i s expected to provide suitable local accommodation and effective administrative support for all Program support and supervisory operations. 9. A special condition applies to the funding o fnecessary expropriation andrelocation. These would be funded solely by the Government o f Jordan. However, the Municipality would be expected to exhaust all reasonable local options for compensation inkmd from its own resources. TITLE I11 RESPONSIBILITIESOF THE PARTIES - GeneralResponsibilities 10. The Municipality, as the "owner" and principal beneficiary of the Program, has a critical role to play. However, overall responsibility for Program implementation resides with MOTA-particularly with its Technical Development Department (TDD). The Governorate, M o M A and MoPIC also have a key supporting roles. 11. MunicipalProgram Coordination Committee:To ensure effective coordination, a Municipal Program Coordination Committee (MPCC) will be established. MPCC will comprise representatives from all the Parties as well as the local community-including representatives o f heritage development organizations where relevant. MPCC will be chaired by the Governor or his nominee; and it will meet as necessary, but at least quarterly, to review progress towards objectives, provide guidance and resolve problems. The Municipality will provide suitable office space and secretanal support for its deliberations. 12. MonitoringandReporting:M o T A will beresponsible for Programmonitoringand for reporting to the MPCC. This will be done inclose consultation with the Municipality. 13. Action Plan:Program coordination and monitoring will be undertaken by MoTA on the basis o f Action Plans (including Tourism Development Plans). These will lay out specific time-bound activity targets and responsibilities, and will be updated at least quarterly to reflect the progress, accomplishments and obstacles facing the implementation of the Program. (See initial Action Plan at Appendix 2.) 14. The specific responsibilities of each Party are set out below. 116 The Municipality 15. The Municipality i s responsible for facilitating the successful implementation o f the Program and for ensuring its long-term sustainability. Specifically, the Municipality is directly responsible for implementing the expropriation and relocations that are prerequisites for the implementation o f Components 1 and 2 o f the program, and for directly implementing Component 3, all in close consultation with MoTA. Further, it is especially responsible for ensuring local working-level coordination and problem solving with the water and electricity utility companies. 16. Within the framework o fthe Pact the Municipality will: (1) Implement the expropriations, relocation deemed necessary by M o T A and M o M A to ensure the effective implementation o f the Project. This includes: a) Developing a feasible action plan for implementing the required expropriations and relocations including all the required legal, administrative, and financial procedures and resources as mandated by M o T A and M o M A . b) Identifying and selecting the most feasible expropriation and relocation options in consultation with MoTA, M o M A and MoPIC. c) Providing municipal resources (i.e. alternate land and properties) in order to minimize resettlement costs. d) Conducting the necessary coordination with both M o M A and M o T A to allocate the required financial resources to implement the plan. e) Effectively implementing the agreed plan. (2) Enact and implement the regulatory reforms necessary to achieve and sustain Program objectives inthe historic core. This includes: a) Insuring the declaration o f the historic city core as Special Regulation Area, and the setting o f appropriate regulations that are relevant to it. b) Acquiring the necessary legal and administrative support from the Ministry o f Municipal Affairs to implement the new regulations c) Making and implementing the necessary changes inregulations and land uses that will be required incertain parts o f the historic core to achieve the main Program objectives. (3) Enact and implement the traffic planningmeasures necessary to achieve and sustain Program objectives inthe historic core. This includes: a) Reviewing and endorsing the plan preparedby consultants employed under the Program. b) Insuring the application o f the plan and malung the required arrangements for its effective and sustainable implementation. c) Managingand conducting the necessary coordination to sustain the implementation o f the plan. (4) Establishing and maintaining a broadly based Community Partnership that can help mobilize the community insupport o f the Program. This includes (through the Partnership): a) Establishing and maintaining a broadly based local forum made up o f representatives from different community groups including private businesses, religious, governmental and non-governmental bodies. b) Presenting the Programto the key stakeholders inthe community. c) Conducting regular (at least half-yearly) community consultations and facilitating community participation to obtain the local support required to implement the Program, includingthe Local Economic Development components. d) Acquiring the logistic support that is required for operating and managing this forum during the Program duration. e) Conducting all the necessary coordination with all service agencies and all concerned parties among the local community to insure their roles fulfillment indue time. f ) Helpingto find solutions to all obstacles to effective Program implementation. 117 (5) Establish a special Unit that will efficiently, effectively and sustainably manage the Program Area (city core) dunng and after to Program completion. This includes: (vii). Establishing a dedicated City Core Management Unit (CMU) within the Municipality and reporting directly to the Mayor to ensure the effective management and maintenance o f the city core (including the new investments implemented under the Program). (viii). Providingthe CMUwith the necessary legal authority, staffing and technical, financial and administrative resources to effectively assume its role (in coordination with all the other concerned Municipality departments). (ix). Ensuring that the C M U undertake a thorough and competent technical, financial and administrative assessment o f the steps necessary to manage and maintain city core services, including but not limited to environmental, traffic, transportation and business development support services. (x). Ensuring that the C M U develop a feasible Action Plan (including a Tourism Development Plan) for efficient development and service delivery in the city core based on the above assessment. (xi). Taking the steps necessary to sustainably fund the implementation o f the Action Plan, including but not limited to steps to improve the efficiency o f overall municipality management, finance and accounting systems. (xii). Effectively implementing the Action Plan in consultation and coordination with other municipal departments, key public agencies (including the water and electricity utilities), and key stakeholders. Ministryof Tourism andAntiquities 17. As the overall implementing agency o f the Project, M o T A is responsible for ensuring in that the Program i s delivered inaccordance the aims and objectives o f the Program, on time and within budget. 18. Withinthe framework o fthe Pact MoTA, inclose consultation with the Municipality, will: (1) Implement components 1and 2 o f the Program inclose consultationwith the Municipality. (2) Coordinate and monitor on all Program activities, including liaising with other government agencies and mobilizing community and private sector support for Program objectives; (3) Enter into or approve all procurement under the Program; (4) Manage and account for all Program funds; and (5) Report to all parties on the progress o f Program components and utilization o f Program funds, including monthly, quarterly, half-yearly, annual, mid-term, end o f Program, and other period reports as may be necessary for effective Program management. Governorateof ............. 19. Withinthe framework o fthe Pact the Governorate will assist and support the Municipality in: (1) in implementing the specific agreements with the companies and institutions responsible for providing services inthe city (including the Water Authority and the Electricity Company); (2) Ensuringthe implementation o f the specific decisions o f the MCC; (3) Helping top remove obstacles that face Program implementation on the local level; (4) Supporting the Municipality in implementing all aspects o f the Program that involve public safety and public health. (5) Bringing to attention of the Institutions any social and economic issues o f local and regional importance that are o f relevance to success and the sustainability o f the Program. (6) Takmg the steps necessary to effectively promote economic and social development in the city core. 118 Ministry of Municipal Affairs 20. Within the framework o f the Pact and in addition to its normal municipal oversight duties, M o M A will assist and support the Municipality in: (1) Obtaining the legal, institutional and financial baclung and resources from central government and, if necessary, the courts to effectively implement the expropriations and relocations that are a prerequisite for implementing the Program; (2) Obtaining the legal, institutional and financial backing and resources from central government and, if necessary, the courts to prepare and implement new regulations deemed necessary to effectively protect the existing historical and cultural assets inthe city core; (3) In taking the steps necessary to effectively establish and operate their CMU, including carrying out the task o f effectively managing the city core and promoting business development; (4) Intaking the necessary steps to improve the overall management and financing o f municipal services including, where necessary, but not limited to improving the collection o f municipal fees and taxes; (5) Intalung the steps necessary to effectively promote economic and social development in the city core. Ministry of Planningand International Cooperation 21. Within the framework o fthe Pact the MoPIC will assist and support the Municipality in: (1) Obtaining the legal, institutional and financial baclung and resources from central government and, if necessary, the courts to effectively implement the expropriations and relocations that are a prerequisite for implementing the Program; (2) Obtaining the legal, institutional and financial baclung and resources from central government and, if necessary, the courts to prepare and implement new regulations deemed necessary to effectively protect the existing historical and cultural assets inthe city core; (3) Intakmg the steps necessary to effectively promote economic and social development in the city. THE SIGNATURESOF THE PARTIES ..................... For ...,..,...........Municipality ...................... ._........................... .......................................................................... Date: .. ..... " ........................ ...... For the Governorate of.. _........................................................................................................................................ .... .. ._ Date: ..................................... Ministry........................................................................................................................................ For the -.............. o f Planning and International Cooperation....................................................................... ............. Date: ........................................................ ...................................................................................................................................................................................... For the Ministryo fTounsm and Antiquities ............................................................................................................................................................................................................ Date: For the Ministrv o f MuniciDal Affairs Date: 119 Appendix 1:Detailed Descriptionof ProgramComponents .......................... ..Municipality Program Component Estimated Program Cost IJD rn\ 0 UrbanInfrastructureImprovementWorks 1. Umradmg of street networks and alliedmblic mace I I 2 Rehabilitation and upgrading of pivotal urban spaces 3. Rehabilitation of Facades on P r m r y Streets I I 4. Renovation and Preservation o f selected Hentage Buildings through Adaptive Reuse. 5. Construction /rehabilitation of essential muIllciDal buildingsand fac 1. Business Develoument Grant and t e c h c a l Assistance 2. Cultural Heritage Fund(Salt only) 0.. CapacityBuilding ............................................................................................................................................................................................................................................................... .................................................................................... 1. Municbal Core Regulation and Management I I 2. Community Strategic Partnerships I Total tI Appendix 2: MunicipalAction Plan(Format) .......................... ..Municipality Date: Componentl Issue Required Action Responsibility Target CompletionDate _ . .. Other Legal Account!ng _ . Etc Signatures For ..................Municipality For the Ministryof Tounsm andAntiquities 120 Annex 7: FinancialManagement and DisbursementArrangements JORDAN: CULTURALHERITAGE,TOURISMAND URBANDEVELOPMENTPROJECT Summary 1. Bank policies require that loan proceeds be used only for the purposes for which they were made available, with due regard to economy, efficiency and the sustainable achievement o f the project's development objectives. Therefore, the recipient o f the loan i s requested to maintain, among other things, an appropriate and adequate financial management system, including records, accounts and financial statements, which adequately reflect the operations, resources and expenditures o f the project. An assessment of the financial management (FM) arrangements for the Project was undertaken inMay 2006 to determine whether MOTA, the entity implementing the Bank Financed project, has acceptable financial management arrangements including its financial management system, its accounting, reporting and auditing arrangements as well as its internal controls and flow o f funds. 2. The project will be implemented by a Technical Development Department (TDD) housed in MOTA. The system in place at MOTA is based on principles and procedures defined by the legal framework and operational decrees applicable to the public sector in Jordan. The MOTA will be responsible for project funds, while the TDD will be responsible for the overall supervision o f the activities including: (i)project planning and budgeting, (ii)invoice clearing, and recording, (iii) maintaining the project's accounting software and reporting on the project's activities including issuing quarterly financial reports and (iv) acting as an intermediary between MOTA, MOMA and MOPIC. 3. The project's financial management arrangements are considered adequate for the project and will include: (i) assigning the Finance Officer (a MOTA employee) who previously followed up on the STDP as the finance officer for the CHTUDP, (ii) applying government controls and procedures as well as technical and fiduciary approval o f the TDD for all payments, (iii) purchasing a ring fenced accounting system to follow up and separately report on the project, (iv) issuance o f quarterly financial reports and (v) yearly audit by an independent auditor acceptable to the Bank. 4. The fiduciary staff o f the TDD (financial management and procurement) have previously handled the STDP project and are familiar with the government procedures as well as with the Bank's procurement, financial management and disbursement guidelines. 5. The project will follow the government applied controls as stipulated in the local laws but these controls will be enhanced to separately and timely follow up and report on the project's activities. The loan and counterpart funds will be made available through the government budget allocated to the MOPIC. In turn the MOPIC will make available, to MOTA, the loan proceeds and counterpart fund needed to implement the project. 6. The practicality o f adding a new accounting module for the project inMOTA'Srecently installed enterprise government resource planning (EGW) system which allows the ministry to record and follow up on its o m accounts has been explored in details. Based on the options available, MOTA decided not to add the module and instead to purchase a stand alone ring fenced accounting which will allow it to separately record and report on the project's accounts. In parallel and to ensure that this ring fenced accounting system is operating accurately, the finance officer will also record all project related transactions (for an initial period o f 6 months) using spreadsheet applications. 7. The TDD will issue quarterly un-audited financial reports on sources and uses o f funds, contracts expenditures as well as uses o f funds by activity. These reports, which will be required by the project's loan agreement, shall be submitted to the Bank one month following quarter end starting from the quarter where the first loan disbursement took place. 121 8. The project's financial statements will be annually audited by an external independent auditor, acceptable to the Bank, in accordance with internationally accepted auditing standards and will be submitted to the Bank no later than six months following the closing o f the fiscal year being audited. 9. T o ensure that funds are readily available for project implementation, a U S dollars Special Account (SA) will be opened at the Central Bank o f Jordan and will be managed by MOTA. 10. A financial management action plan covenng the project's financial management activities for the first 6 months was developed and agreed with the client. The Bank will intensively support and supervise the project in its first year to ensure successful implementation o f this plan. RiskAnalysis and Conditions 11. Country financial management risks: Several asses~ments~~o f Jordan's public financial management (PFM) system were conducted throughout the last few years and concluded that the country's financial management inherent risk i s moderate. Also, Jordan's Corruption Perceived Index (CPI) as per Transparency International has been improving for the last three years (5.7 in 2005, ranking 5`h inArab countries 12. Project financial Management risk: The project's reporting and auditing arrangements will be ring fenced. MOTA will purchase a ring fenced accounting system to separately follow up and report on the project's activities.. However, all payments made under this project will follow the government's controls where all payments are subject to the pre-verification o f the MoF's controller at MOTA as to post audit by the Government's Audit Bureau in addition to an external independent auditor to be engaged under TORSacceptable to the Bank. A detailed financial management assessment was carried out and i s included in the project's files, the risks identified and the mitigating measures addressing these risks are detailed inthe table below: Risk RiskRatingI Incorporated RiskMitigatingMeasures (MM) Risk rating after MM InherentA Country Moderate According to recent ESW, the financial riskinthe Hashemite Kingdom of noderate Level Jordan is moderate. to low Mitigating measures: . 9 Ring fence the project's implementation & F M arrangements. Hire an independentanda qualifiedprivate audit firmacceptableto the Bank Entity and Moderate MOTA should improve its accounting and reporting capacity. Low project Mitigatingmeasures: Level . . The project's accounting, reporting and auditing arrangementswill be ring fenced. The fiduciary staff of the TDD are familiar with Bank's policies and procedures. ..MOTA'Swill purchase a ring fenced accounting system to follow up and report onproject's activities. For an initial period of 6 months, the finance officer will use spreadsheet applications inparallelto ensure that the systemis functioning properly. A separateproject special account will be opened andmanagedby MOTA. OverallZRI Moderate I Low 50 A joint IMF-WBassessment of JordanPFMsystem (04), ROSC Accounting andAuditing report (0.5) and CFAA report (01). 122 Risk RiskRating ControlRi! z%R) Budgeting Moderate MOTA's budget systemdoes not includea disbursement forecast module. Low Mitigatingmeasures: . The TDD Financial Officer will be responsible for preparing a project's budget based on latest available procurement plans and agreeing it with management. The project's accounting system will have a separate screen that allows postingandrevision ofthe project's annualbudget. Accounting Moderate MOTA's system may not adequately account and report separately on the Low project's activities. Mitigating measures: 1 MOTA will purchasea ring fenced accounting system for the project.This systemwill be governedby its own detailed chart of account. 1 Inparallel, the finance officer will use spreadsheet applicationsto ensure that the moduleis functioningproperly. 1 The TDD previouslydocumentedits financialprocedure inamanual developedunder the STDP. This manualwill be customizedandupdated for CHTUDP. Funds Moderate Bank's andcounterpart funds neededfor the project maynot be timely Low Flow available. Mitigating measures: 1 The Project will open a SA for Bankfunds m the CentralBank. 1 MoPIC will include the project funds inits budget and will make available the counter part funds needed for implementation. 1 The flow of funds processwill be includedinaFinancialProcedureManual to be developedby the Project. Direct payment will be usedfor big contracts. Financial High MOTA's systemmay not adequatelyreportonproject's activities and Moderate Reporting automatically generate quarterlyfinancial reports. Mitigating measures: . The ring fenced project accounting system will be able to generate the neededreports. Auditing Moderate MOTA's accounts are post auditedby the Government's Audit Bureau. Low Mitigating measure: 1 The project will engage a qualified independent private auditor acceptable to the Bankinaccordancewith agreeduponTORS. Overall CR Moderate Low Implementingentity andstaffing 13. The project will be implemented by the TDD housed in MOTA. The TDD's fiduciary staff have prior experience with the Bank through implementing the STDP so they are well aware o f the Bank's policies and procedures. The TDD's FMrole will include: (i) project planning and budgeting, (ii) invoice clearing, and recording (iii)maintaining the project's accounting software and (iv) reporting on the project's activities including issuing the Bank required quarterly financial reports. InternalControl 14. There are four levels o f controls under this project: (i)the municipalities and engineers supervising the work who check the technical aspects o f the work and approve the contractor's invoices, (ii) TDD'stechnicalstaffwhoapprovethepayment, (iii) financeOfficeroftheTDDwhochecks the the the accuracy and eligibility o f the payment and (iv) MOTA's finance department and internal auditor as well as the MOF financial controller who check the accuracy o f the payment and its compliance with the laws applicable inJordan. 123 15. Financial policies and procedures applicable to this project will be documented in a financial procedure manual. A previous version o f this manual was developed under the STDP and will be customized and updated for this project. The manual will also document the flow o f funds, reporting and auditing arrangements as well as the relationship between the various entities. This activity should be completed one month after the project's effectiveness. Flow o f funds 16. T o ensure that funds are readily available for the project's implementation, MOTA will open a special account denominated is U S $ at the Central Bank o f Jordan. Deposits into and payments from the S A will be made in accordance with the disbursement letter. The task o f preparing the replenishment applications throughout the implementation period and issuing payment requests to the Central Bank and submitting the replenishment applications to the Bank will be the responsibility o f MOTA. A flow o f funds chart for i s included inthis annex. 17. MOPIC will include the project hnds inits budget and will make available the counter part funds needed for implementation. 18. Payments made under the subcomponent 3.1 (Business Development Grants), will follow the same payment process in place at TDD for the project. Payment will be made directly from the S A to third parties upon presenting approved invoices and supporting documents. Accounting 19. MOTA recently installed an enterprise government resource planning (EGRP) system which allows the ministry to record and follow up on its own accounts. This system has been tested throughout the year and i s currently fully operational. The team assessed the capacity o f this system to separately follow up on the project's accounts and was advised that a separate module can be created to follow up on the project's accounts. However, after extensive discussions between the TDD and the software provider, MOTA decided against this option and decided to go ahead and purchase a new ring fenced accounting system. 20. The project will purchase a new ring fenced accounting system which will have three basic modules: budget module, procurement and contract module and accounting module. The FM and procurement aspects o f the project need to be integrated in the system so the procurement reports are consistent with the financial ones. One o f the key features o f the system will be the generation o f the budget and o f interim financial reports. This system will be governed by a chart o f account specifically developed for the project. Access to the system will be given to the finance officer and the TDD user's profiles will be determined according to the project's needs. The system will include a contracts screen to record and report the project's commitments. This activity will be completed one month after effectiveness. 21. Inparallel and for an initial period o f 6 months, the finance officer will ensure that the system is operating accurately through the use o f spreadsheet applications to record all project relatedtransactions.. 22. The project will follow the cash basis o f accounting and key accounting policies and procedures will be documented in the financial procedure manual. The project's accounts will be maintained using the double-entry bookkeeping pnnciples and commitments will be monitored and tracked using the contracts screen. Supporting documents will be kept by MOTA. 23. Chart ofaccount: A detailed chart o f account will be developed for this project. Expenditures according to the project's chart o f account will be broken down by category, component and geographic location while sources o f funds will be broken down by financing source. 24. Fixed asset register: A register will be maintained by the finance officer outside the system. Safeguarding the project's assets will be the responsibility o f MOTA. 124 25. Budgeting: The project's finance officer will prepare an annual budget based on the procurement plan. This budget will be generated from the accounting module and will be monitored on a regular basis. FinancialReporting 26. Quarterly: The project will be required to generate quarterly un-audited financial reports and submit them to the Bank as part o f the project's progress report or separately. These reports are made up Of: - Financial reports: to include a statement o f sources and uses of funds, quarterly cash forecast, an expenditure report companng actual and planned expenditures by activity in addition to a special account reconciliation statement. - Contracts listing: To include a listing of all contracts showing amounts committed and disbursed under each. 27. These reports will be system generated and should be remitted to the Bank within one month from the end o f the quarter starting from the quarter where the first loan disbursement took place. The proposed format o f the reports was agreed during negotiations and will be included in the Project's financial procedure manual. 28. Annually: Project financial statements (PFS) will be prepared annually following the cash basis o f accounting. 29. Audited project financial statement (PFS) will be submitted to the Bank and will include: - Statement of sources and utilization o f funds, indicating funds received from various sources and project expenditures. - Appropriate schedules classifying project expenditures by component, showing yearly and cumulative balances. - Special account reconciliation statement reconciling opening and year end balances. - Statement o f payments made using SOEs procedures as defined inthe legal agreement. - Statement o f project commitments, being the unpaid balances under the project signed contracts. Auditing 30. The TDD has pervious experience with the audit requirements o f the World through their experience in the STDP. Previous audit reports due under the STDP were timely submitted and did not identify any major accountability issue. 31. The Project's financial statements will be audited by an independent auditor acceptable to the Bank. The external audit report shall encompass all projects' activities and shall be in accordance with internationally accepted auditing standards (such as the international standards on auditing: ISA). The annual audit report o f the project's accounts shall include an opinion on the PFS and the special account transactions. Inaddition to the audit reports, the auditor will prepare a management letter identifying any observations, comments and deficiencies, in the system and controls that the external independent auditor consider pertinent and shall provide recommendations for their improvements. The external auditor should be acceptable to the Bank and his TOR will be prepared and submitted for the bank's n o objection, at least 9 months prior to the end o f the project's fiscal year. Audit costs will not be financed by the Bank Loan. 32. The project's auditor will also be required to give an opinion on whether expenditures reimbursed on basis of Statements o f Expenditures are eligible to Bank financing and are reflected on the PFS. 125 33. The following audit reports will be due under this project: Financialmanagementactionplan and supervisionplan 34. A financial management action plan covering the project's financial management activities for the first 6 months was developed and agreedwith the client. The action plan is included below. 35. The project will require intensive supervision during the start up phase to ensure timely implementation o f this action plan including the creation o f the accounting module, development o f the project's chart o f account and the generation o f the financial reports. The project will be supervised every four months for the first eighteen months, then every six months thereafter, to ensure compliance with Bank requirements and to develop financial management ratings. Disbursementarrangements 36. The proceeds o f the loan will be disbursed in accordance with the Bank's disbursements guidelines as outlined in the Disbursement Handbook. Transaction based disbursement will be used under this project. Accordingly, requests for payments from the loan account will be initiatedthrough the use of withdrawal applications (WAS) either for Direct Payments, Reimbursements, Replenishments to the Special Account, or Issuance o f Special Commitments. All WAS will include appropriate supporting documentation including detailed Statements o f Expenditure (SOEs) for reimbursements and replenishments to the Special Account. 37. Authorized signatories, names and corresponding specimens of their signatures will be submitted to the Bankprior to the receipt o f the first replenishment application. 38. Retroactivefinancing: Payments made to the borrower out o f its own resources before the date o f a loan agreement are normally not eligible for financing under the loan, except that withdrawals, in an aggregate amount not exceeding the equivalent o f U S $ 5 millionon, may be made inrespect o f categories la, 2 and 3 on account o f payments made for expenditures before that date but on or after March 1,2006. Payments must be for expenditures that are eligible under the Loan Agreement. Procedures for procurement and the use o f consultants, and processing and clearances are subject to the Bank's Procurement and Consultants Guidelines. Documentation requirements for expenditures claimed under retroactive financing are the same as those for disbursement against payments made after the Loan Agreement i s signed. 39. Statement of Expenditures (SOE): During implementation SOEs will be used for all expenditures relating to (i)Works under contracts costing less than US$500,000, (ii)Goods under contracts costing less than US$200,000, (iii) consulting services under consultants firms contracts costing less than US$lOO,OOO equivalent each and under individual consultant contracts costing less than US$50,000 equivalent each, (v) grants under the component 3 (Local Economic Development), (vi) grants under the Salt Heritage Fund sub-component, and (vii) operating cost, under such terms and conditions as the Bank shall specify by notice to the borrower. The supporting documentation will be 126 maintained at MOTA and will be made available for review by Bank supervision missions upon request. Documentation relating to SOEs would be retained for up to one year from the date the bank receives the audit report for the fiscal year inwhich the last withdrawal application from the loan account was made. 40. Special Account: To facilitate project implementation and make timely payments, the MOTA will open a US$ SA at the Central Bank o f Jordan. The authorized allocation will be US$ 4 million (representing approximately four month of eligible expenditures financed by the loan), with an initial deposit o f US$ 750,000. Full allocation can be claimed once the cumulative disbursements reach U S $ 5 million. The SA will be managed and administered by the MOTA who will also be responsible for submitting the withdrawal applications with appropriate supporting documentation for expenditures incurred. Deposits into and payments from the S A to pay contractors, consultants, suppliers and others will be made in accordance with the provisions o f the loan agreement and the disbursement letter. Replenishments o f the SA would follow Bank's procedures. The minimumvalue o f applications i s 20% o f the amount advances to the designated account o f this project. Allocation of loan proceeds (a) Works under Part 1 and 3 of the Project and 90%of local DisbursementConditions 41. The followng disbursement conditions will apply to the project: Disbursement Category I (b) - Petra Gateway: No withdrawals shall be made in respect o f payments made for expenditures under the component 2 (Petra Gateway), until evidence, satisfactory to the Bank, has been provided showing that (i) the Petra Archaeological Park is under the sole jurisdiction o f the Department o f Antiquities; (ii) the Petra Archaeological Park i s managed by a dedicated entity (the Petra Management Entity) operating under oversight of the Department o f Antiquities; and (iii) that the Petra Management Entity has been allocated a secure, predictable and sufficient operation and maintenance budget funded through earmarlung a share o f the Petra gate revenues. Disbursement Category 4 - Grantsfor Local EconomicDevelopment. No withdrawals shall be made in respect o f payments made for expenditures under the component 3 (Local Economic Development), until eligibility criteria, a selection process, and terms and conditions for Grants ,all satisfactory to the Bank, have been developed and adopted by the Borrower. Disbursement Category 5 - Grantsfor Salt Heritage Fund. No withdrawals shall be made in respect of payments for expenditures under the Salt Heritage Fund sub-component until documentation, satisfactory to the Bank, has been provided evidencing that (i) Salt the Hentage Fundhas been established and (ii)eligibility criteria, a selection process, and terms and conditions for Grants, all satisfactory to the Bank, have been developed and adopted by the Salt HeritageFund. 127 DisbursementProfile 42. The disbursement forecast is presented inthe table andprofile below: DisbursementProfile 60 - 56.01 4 50 -c- iI I ~ i i i I I I ~ 13.25 8.90 10 - 1.95 0 :YQ.s2 ~ *Cumulative __ 56.000 +By semester 1.950 Calendar Year (Semester) 128 Annex 8: Procurement JORDAN: CULTURALHERITAGE,TOURISMAND URBANDEVELOPMENTPROJECT Context 1. Jordan's public procurement system i s a centralized, well defined system governed by a series o f regulations issued by the Council o f Ministers and managed by the Government Tenders Directorate (GTD) housed at the Ministry o f Public Works and Housing (MoPWH) for civil works and consultants' services and by the General Supplies Department (GSD) at the Ministry o f Finance (MoF) for supplies and equipment. The system operates in a transparent environment where both the private sector and public officials are familiar with and comply with the requirements o f the regulations. Award o f the majority o f public contracts is based on competition with contract award generally being made on the basis o f the lowest priced responsive offer. The overall risk associated with corrupt practices affecting public procurement in Jordan is considered l o w by both private and public participants. As the demands on the government have continued to increase, the centralized procurement system has become overburdened and is understaffed, laclung specialized expertise for a growing range o f procurement requirements. As a result, a number of exceptions have been made to create special tender committees (STC) within ministries or autonomous authorities to handle procurement. Special Tender Committees are formed for a particular project, which is distinguished, by its size, source o f funding or other characteristics that require special attention. Special Tender Committees are not restricted to any threshold and are used to expedite implementation o f special projects Implementationarrangementsandprocurement capacity 2. Primary responsibility for project implementation would reside with M o T A - the Executing Agency. Specifically, responsibility would reside with MoTA's Technical Development Department (TDD), and the Ministry o f Municipal Affaires (MoMA) will have a key supporting role on matters related to the Project Municipalities (PMs). The Ministry o f Planning and International Cooperation (MoPIC), as the key representative o f GoJ on developmental matters would play an important guiding, monitoring and policy support role. Higher-level coordination would be maintained through an inter- ministerial Project Steering Committee (PSC) comprising the Secretary Generals or their nominees o f MoTA, M o M A and MoPIC. Local level coordination would be assured through Municipality Program Coordination Committees (MPCC) comprising the respective mayors and provincial governors, senior representatives o f M o T A and representatives o f local civil society. These implementation arrangements are detailed inthe Annex 6. 3. The MOTA-TDDis operating under the budget of M o T A and government proceeds o f the MinistryofPlanning. Itis composed o f six (6) units:Planning, development and design, Implementation, cultural and heritage site management, procurement, and financial. TDD was entrusted recently with all MoTA's fiduciary responsibilities, in order to buildup a sustainable system not exclusively related to the World Bank projects, or any funding source in particular. This approach was taken in the purpose o f reaching a coordination o f all the Ministry responsibilities. The established Special Tender Committee (STC) for the Second Tourism Development Project shall see its agenda amended to cover the project. 4. Staffing. Currently the procurement department i s composed o f one procurement specialist. H e is requested to undertake all the procurement activities o f MoTA financed by the government and by international projects. The procurement specialist is supported by 2 filing persons and an IT department o f 5 staff. It i s assessed that, based on the current transactions, the procurement unit needs to appoint 2 additional staff (one administrative and one technical). Additional resources are to be provided interms o f skills, quantity and quality. Based on past experience, delays were encountered due to the weak quality controls o f the technical specifications, design drawings and quantities, and to insufficient contract management o f the works sites. 129 5. Record keeping: Filing and maintaining the procurement related records for the lifetime o f the project and by the different agencies involved is ensured. Currently MOTAarchive all bids for a period o f 10 years. Availability o f the two (2) filing staff is assessedto be mitigating any shortcoming o f filing. 6. Capacity Building: Training and professional development will increase the performance o f staff and will facilitate decision malung at lower levels consistent with the nsk and complexity o f the procurement requirements. Investment in staff development will have a positive impact on the project. The procurement engineer acquired by on-the-job practice the experience in national and international procurement. A targeted training i s included inthe project capacity building component. 7. OverallProcurement Risk Assessment:The procurement risk is rated Low. Use of Bank Guidelinesand StandardDocuments 8. Procurement for this project will be carried out in accordance with the World Bank's Guidelines: Procurement under IBRD Loans and IDA Credits, dated May 2004, Guidelines: Selection and Employment of Consultants by World Bank Borrowers, dated May 2004, and the provisions stipulated in the Loan Agreement. For each contract to be financed by the Loan, the procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are reflected in the Procurement Plan (PP). The PP will be updated, as required, to reflect the actual project implementation needs and improvements ininstitutional capacity. 9. The Standard Request for Proposals (WP) for the selection o f consultants (May 2004) and the Standard Form o f Contracts will be used for contracts above US$200,000 equivalent. For the selection process o f firms, the Sample Form o f Evaluation Report for the Selection o f Consultants (October 1999) will be used. Selection o f individual consultants will be in accordance with section V o f the Guidelines usingsimplified forms o f contracts that are acceptable to the Bank. Advertising 10. A General Procurement Notice (GPN) was published online in the United Nations Development Business (UNDB), and the dgkiarket on December 5, 2006. The GPN provided a description o f the Project and a list o f all major contracts for Works to be awarded under I C B procedures and for consultancy services estimated at more than US$200,000. ProcurementMethods 11. Works. Procurement o f works will be carried out using International Competitive Bidding for all contracts estimated at US$5,500,000 and above. 1. National Competitive Bidding. Goods estimated to cost less than US$500,000 (five hundred thousand dollars) equivalent per contract, and works estimated to cost less than U$5,500,000 (five million five hundred thousand dollars) equivalent per contract will be procured under contracts awarded on the basis o f National Competitive Biddingprocedures subject to the Bank's national procurement procedures and the following additional procedures: (a) Standard biddingdocuments approved by the Bank shall be used. (b) Invitations to bid shall be advertised in at least one widely circulated national daily newspaper and bidding documents shall be made available to prospective bidders, at least twenty-eight (28) days prior to the deadline for the submission o f bids. (c) Bids shall not be invited on the basis o f percentage premium or discount over the estimated cost. (d) Bidding documents shall be made available, by mail or in person, to all who are willing to pay the required fee. 130 (e) Foreign bidders shall not be precluded from bidding and n o preference o f any lund shall be given to national bidders. ( f ) Qualification criteria (in case pre-qualifications were not carried out) shall be stated in the biddingdocuments, and if a registration process is required, a foreign firm determined to be the lowest evaluated bidder shall be given reasonable opportunity o f registering, without any hindrance i.e. no non-registration status should be considered as a non-eligibility-to-bid criterion. (g) Biddersmay deliver bids, at their option, either inperson or by courier service or bymail. (h) Bids shall be opened inpublic inone placepreferably immediately, butno later than one (1) hour, after the deadline for submission o f bids. (i)Evaluationofbidsshallbemadeinstrict adherencetothecriteriadisclosedinthebidding documents, ina format, and within the specified period, agreed with the Bank. 6) Bids shall not be rejected merely on the basis o f a comparison with an official estimate without the prior concurrence o f the Bank. (k) Split award or lottery in award of contracts shall not be carried out. When two or more bidders quote the same price, an investigation shall be made to determine any evidence o f collusion, following which: (A) if collusion i s determined, the parties involved shall be disqualified and the award shall then be made to the next lowest evaluated and qualified bidder; and (B) if no evidence o f collusion can be confirmed, then fresh bids shall be invited after receiving the concurrence o f the Bank. (1) Contracts shall be awarded to the lowest evaluated bidders within the initial period o f bid validity so that extensions are not necessary. Extension o f bid validity may be sought only under exceptional circumstances. (m)Extension o f bidvalidity shall not be allowed without the prior concurrence of the Bank: (A) for the first request for extension if it i s longer than eight (8) weeks; and (B) for all subsequent requests for extensions irrespective o f the period. (n) Negotiations shall notbe allowedwiththe lowest evaluated or any other bidders. (0) Re-bidding shall not be carried out without the Bank's prior concurrence. (p) All contractors or suppliers shall provide performance security as indicated in the contract documents. A contractor's or a supplier's performance security shall apply to a specific contract under which it was furnished. 12. Goods. Procurement o f Goods will be conducted using shopping procedures for all packages below US$lOO,OOO. 13. Consultancy and training services. (a) Consultant Services for firms will be selected using the Quality-and Cost-Based Selection (QCBS) for value o f contracts estimated at more than US$lOO,OOO equivalent or more. (b) For assignments for consultant firms estimated at less than US$lOO,OOO equivalent, the short list may be comprised entirely o f national firms, provided at least three qualified local firms are available and competition including foreign consultants is not justified. However, international firms will not be excluded from consideration, ifthey have expressed interest. (c) Selection o f Individual Consultants will be conducted inaccordance with section V o f the Guidelines. 14. Direct Contracting. Direct contracting will be used for the works and supervision services relatedto the regeneration andpreservation o f the Ajloun Natural Landscape: (a). Force Account. Works related to soil stabilization, rehabilitation o f valley terraces and planting o f trees for the regeneration and preservation o f the Ajloun Natural Landscape will be carried out by the specialized teams o f the Ministry o f Agriculture under force account 131 arrangements. The amount o f the works to be carned out by the Ministryo f Agriculture under Force Account arrangements is estimated at USSl,OOO,OOO. (b). Direct Contracting of supervision services. A direct services contract will be negotiated with the Royal Society for Conservation o f Nature (RSCN)" for the supervision o f the landscape regeneration works to be carried out by the Ministryo f Agriculture specialized teams. 15. Operating Costs. The Loan will finance expenditures directly related to the management o f the project, such as: (a) maintenance o f office equipment; (b) transportation and travel, including per diem allowances for project staff in travel status; (c) rental o f office space; (d) office supplies, utilities and office administration, including translation, printing and advertising; (e) fuel costs; (f) communication costs; (g) costs for production o f bidding documents and drawings; (h) commercial bank charges; and (i) any other project management support costs as agreed by the Borrower and the Bank, but excluding salaries o f the Borrower's civil servants. These items will be financed by the project and will be procured usingthe Borrower administrative procedures for shopping, satisfactory to the Bank. Frequencyof procurement supervisionmissions 16. One every six months. The first year will require three missions to ensure proper implementation start-up and as there will be the majority o fprocurement packaging launching and processing. ProcurementPlan 17. A procurement plan covering all o f the projects components and activities has been developed and is included in the Borrower's Project Implementation Plan and its initial version is appended to this annex (see Annex 8.A). The plan details all activities prior to loan effectiveness, and for the project's first year o f implementation. Procurement o f all works and services will be undertaken in accordance with this plan as approvedby the Bank. The planwill be updated on a quarterly basis. 51 T h e Royal Society for Conservation of Nature (RSCN) i s non-governmental organization registered under the Borrower's Ministry of Interior. It is a well established, qualified and highly regarded NGO with a track record of successfully implementedenvironmentalprojects. 132 Annex 8.A: ProcurementPlan A. General 1. ProjectInformation: Country: Hashemite Kingdom o f Jordan Borrower: Hashemite Kingdom o f Jordan Project Name: Cultural Heritage, Tourism and Urban Development (CHTUD) Project No.: PO81823 LoanNo.: .................... Loan Amount: US$ 56 million Project ImplementingAgency: MinistryofTourismand Antiquities (MOTA) 2. Bank approvalofthe procurementplan: December 18,2006 3. Dateof GeneralProcurementNotice: December 05,2006 4. Periodcoveredbythis procurementplan: 36 months B. Goods and Works and Non-Consulting Services 1. PriorReview Thresholds:Procurement Decisions subject to Prior Reviewbythe Bank as stated inAppendix 1to the Guidelines for Procurement: ProcurementMethod Prior ReviewThreshold 2. NCB (Goods) 1 1 >= US$lOO.OOO andfirst contract irrewective ofthe value I 3. I ICB (Works) All 4. I NCB (Works) >=US$250,000 and first contract mespectiveofthe value 5. Shopping (Goods) first contract irrespectiveof the value 6. Shopping (Works) >100,000 and f r s t contract irrespectiveof value 7. Direct Contracting All ProcurementMethod MethodThreshold 12. NCB (Goods) I 1 <= US$500,000 3 . ICB (Works) . . - No threshold . - 4. NCB (Works) <=US$5,500,000 5. Shopping(Goods) <=us$loo,ooo ...... .............................. <=500,000 ... .................. No threshold 2. Prequalification. There is noplannedprequalificationo f contractors. 3. Reference to (if any) Project OperationaVProcurement Manual. A Project Implementation Plan hasbeenpreparedby the implementingagency. 4. Any Other Special ProcurementArrangements: Advance procurement eligible for retroactive financing has been carried out inMay 2006 for design and supervision services. 133 5. Other SpecialProcurementArrangements: Force Account will be used for the works related to the regeneration and preservation o f the Ajloun Natural Landscape. Force Account. Works related to soil stabilization, rehabilitation o f valley terraces and planting o f trees for the regeneration and preservation o f the Ajloun Natural Landscape will be carried out by the specialized teams o f the Ministry o f Agriculture under force account arrangements. 6. Procurement Packageswith Methods and Time Schedule. Procurement packages and time schedule are presented inthe attached Initial Procurement Plan Table. C. Selection of Consultants 1. Prior Review Threshold: Selection decisions subject to Prior Review by the Bank as stated in Appendix 1to the Guidelines Selection and Employment o f Consultants: I I I SelectionMethod 1. Competitive Methods (Firms) I1 1I Prior Review Threshold I >=US$lOO,OOO and first contractirrespective o fthe value or the selection method 12. Single Source (Firms) I All I >=us$lo,ooo All I 1 SelectionMethod I MethodThreshold I 1. QCBS (Firms) I I N o threshold CQS, FBS, LCS <100,000 " _ . ~ N o threshold N o threshold 4. Sole Source (Individual) N o threshold 2. Short list comprising entirely of national consultants: Short list o f consultants for services, estimated to cost less than US$lOO,OOO equivalent per contract, may comprise entirely national consultants inaccordance with the provisions o fparagraph 2.7 o f the Consultant Guidelines. 3. Any Other Special Selection Arrangements: Direct contracting will be used for the supervision services related to the regeneration and preservation of the Ajloun Natural Landscape. A direct services contract will be negotiated with the Royal Society for Conservation of Nature (RSCN)52 for the supervision o f the landscape regeneration works to be carried out by the Ministry o f Agriculture specialized teams. 4. Consultancy Assignments with Selection Methods and Time Schedule are indicated in the attached Initial Procurement Plan. D. Implementing Agency Capacity Building Activities with Time Schedule 1. The agreed Capacity BuildingActivities are listed with time schedule. Expectedoutcome I I Activity Description Estimated Duration 1Start Date Comments Training of MOTA-TDD Severaltraining sessions, and on January Training activities are includedinthe Procurementstaff. thejob training duringthe 2007 scope of the Project's Capacity project's implementationperiod BuildingComponent. 52 The Royal Society for Conservation of Nature (RSCN) is non-governmental organization registered under the Borrower's Ministry of Interior. It IS a well established, qualified and highly regarded NGO with a track record of successfully implemented environmentalprojects. 134 m m m m o y y o . . . . . . . . . . . . . . . . . . . . . . . . . I .................. h, 0 v) ii; Y E -.- .3 m Y c I . . . . ~.. . . . .,...... . .,......... . . . . . ,... . . . . . . 1. ..... ... ,. .... .......,.. ... ,........... .............................. /... . . . . . . . . . . .,. .. ...................................,.. .................................... "., ._. ... / _................ ......... Annex 9: Economic and Financial Analysis JORDAN:CULTURALHERITAGE. TOURISMAND URBANDEVELOPMENTPROJECT Project objectives 1. The proposed Cultural Heritage, Tourism and Urban Development project (CHTUD) has the following development objective: to contribute to tourism development in five key historically and culturally important secondary cities after Amman and, thereby, create the conditions for local development. A secondary objective is to contribute to the consolidation o f the tourism industryinPetra, Jordan's premier tourism asset and destination. Project context 2. The Project takes place in the context of, and i s an important contribution to, Jordan's overall tourism strategy. As described in Section A.l, Jordan has developed and i s implementing a National Tourism Strategy (NTS). Currently, a substantial (US$17 million) support to the N T S from U S A I D titled "SIYAHA". SIYAHA is predominately supporting technical assistance and non-infrastructure investments, focused on promoting tourism investment and particularly from the private sector. The World Bank Project, with its emphasis on the public sector and infrastructure, compliments efforts under SIYAHA and assists the country to achieve a balanced public/private and infrastructure/institutional implementation to the NTS. 3. The Project also focuses on secondary cities. Traditionally, Amman and Irbid have been the country's tourism and economic growth poles. This emphasis on the large urban areas has already lead to a deterioration o f the secondary cities' infrastructure-despite the latter's significant cultural heritage and tourism assets. Thus the Project, in the context o f NTS Pillar No. 5 promoting social equity, seeks to redress some past practices by concentrating on culturally important smaller centers. Benefits of undertaking the project 4. The project will play a key role in preventing further degradation o f historical and cultural sites and neighborhoods, thus helping to ensure their preservation for future generations and beneficial use by the present generation. The cultural resources the project aims to preserve and improve are subject to rapid deterioration fi-om human contact, automobile pollution and generally low level o f basic infrastructure services and maintenance. Leaving these cultural attractions and neighborhoods unprotected would doom them to rapid extinction. Therefore, one o f the major consequences not undertalung the project would be the slow destruction o f the very attributes that made these five historical cities attractive inthe first place. 5. Ifthe sites were allowedto degenerate to the conditionthat they were no longer special, the cities would lose all cultural interest and their historic character would be gone forever. Specifically, not undertaking the project would result in: (a) destruction o f irreplaceable landscapes and neighborhoods; (b) an acceleration o f environmental degradation inthe city cores: (c) the irretrievable loss o f existing capital assets including national heritage buildings; and (d) forgone tourist revenues. 6. This project i s not sufficient, in itself, to ensure that the deterioration scenario does not materialize-many other actions and policies would also have to be implemented: e.g., the continuing expansion o fbasic infrastructure, the development and implementation o f appropriate urban development strategies and increasing cities' budgets. However, the project is a necessary component in the country's comprehensive strategy to prevent such a decline and preserve these assets for prosperity. The project supports related policy goals o f the Jordan government, namely: (a) provide for an environmentally responsible and sustainable expansion o f the country's key tourism industry; (b) increase local property values and municipal tax bases; and (c) create newjobs, either through construction or new opportunities inthe cities' re-generatedareas. 137 7. A final benefit of the CHTUDP is its poverty focus. The average poverty rate for the project's five cities is about 11percent, which i s roughly comparable to the 14percent figure for Jordan as a whole. Most o f the economy's new job creation is in the country's principal urban areas, with far fewer new opportunities appearing inthe secondary cities. T o help ameliorate this situation, the project will directly supply (mainly) construction employment during implementation, and then set the stage for increased tourism employment opportunities. A few private citizens, some o f whom are now living below the poverty line, will also directly benefit thorough project investments inthe facades o f their buildings. Economicanalysismethodology 8. Cost-benefit analysis is not appropriate for this project, as most o f its benefits do not lend themselves easily to being assigned a precise monetary value. For example, increased tourist revenue may be a benefit o f the project, but to what extent increased tourism activity is directly a result o f the project's investments is very difficult to document. This would require a contingent valuation (CV) analysis o f the benefits, however this technique would be unreliable in the context o f the volatile Middle East environment which experiences significant changes in tourist numbers from year to year. Additionally, some project sites (i.e., Aljoun and Salt) currently attract few tourists and interest despite their cultural importance, again making a CV methodology inappropriate. 9. Urban regeneration projects can sometimes be evaluated by tracking increased land andor rental values, or the increased value o f direct and indirect jobs, created as a result o f the project. However, in the context o f Jordan, the necessary data is not available. For example, as in many other countries, the systematic and consistent administration o f property taxes i s an on-going effort by governments. As one would expect, real estate and labor markets in these historical areas are also not well documented. Therefore, there i s n o realistic way to predict the increase in monetary flows directly as a result o f the project. At the same time, it i sjust as difficult to estimate the decrease ineconomic activity if the project i s not implemented. 10. For the reasons outlined above, a cost effectiveness methodology has been used for the economic analysis. The section below presents the case that the selected investments are the most cost-effective alternatives to meeting the project's Development Objectives. Following that discussion, it is demonstrated that all components are also appropriate for the public sector to undertake. 11. A limited number o f project supported investments will produce a revenue stream. These sub- projects are predominately related to planned urban parking structures. During project implementation, these revenues and their associated externalities will be tracked and an evaluation made as to the validity o f adopting a cost benefit approach for these types o f investments. This information will then be used duringthe preparation o fsimilar projects inthe future. ChoiceofInvestments 12. Consistent with a least cost approach to achieving the Development Objectives and its support to the NTS, the project supports investments that are the most cost effective and focus on the public provision o f key infrastructure. The project primarily finances low cost and simple initiatives, with an emphasis on visible public areas that are frequently used, culturally significant and important for the vitality o f the community. Further, the project has chosen to invest in best possible locations (after Amman) and at the optimal level o f investment. The Petra World Heritage Site and the five secondary cities are endowed with many o f the country's best cultural heritage assets, and thus have a significant tounsm potential. The investment criteria also seeks to leverage and compliment the SIYAHA effort and to broaden the overall tourism strategy under the NTS. 13. The investment per city varies significantly and is determined by the site's significance, most urgent needs and development potential. Investments range from US$14.8 million in Karak to just over US$8.6 million in Jerash and Aljoun. Inbetween, Madaba will receive US$9.6 million and Salt US$9.9 million. The Petra Gateway complex, for an investment o f US$6 million, will also be financed by the project. These figures include estimated contingencies. 138 14. In the case o f the first and the largest component, Revitalization o f Historic City Centers and Urban Infrastructure Improvement Works, approximately 77.6% percent (USS55. 15 million) o f the total project cost, the choice o f investments is limited to those: (a) which represent the backbone or core area o f the cities' cultural fabric; and (b) whose improvement it is believed will encourage significant investment in adjacent private structures by residents, businesses andor real estate developers. Most o f this investment (about 85% o f the $55.15 million total) will take place on public land and concerns predominately street upgrading and lighting, removal and construction o f urban facilities and buildings, restoration o f heritage buildings and landscaping. Access to historical areas will also be made easier and also less taxing on cultural assets and the livability o f these areas. These investments would involve more rational traffic routing and improved parking arrangements. Preservation o f fragile vegetation and natural landscapes, and confined and improved pedestnan routing would be undertaken to decrease the pressures on the fragile sites. 15. The facades and critical infrastructure o f selected buildings will also receive basic rehabilitation, but to a much lesser extent (about US$6.5 million, or about 11.8% percent of total component 1 cost). Included here is the Salt Heritage Fund, an innovate grant funding mechanism to seed the restoration and preservation o f privately owned historical structures inthat city. 16. The project provides about US$4 million (about 6 percent o f project total costs) for support to local economic development initiatives, capacity building and project management. Of this amount, 2 percent is for Support to Local Economic Development Initiatives in the city core areas for promotion activities and grants, workshops and training, and program development and consultancy services. Over 2 percent will be dedicated to capacity building a the municipal level, and especially for the development o f municipal business plans for the core heritage areas. MOTA'Smanagement o f the project would also be included in this component, but this would amount to an estimated US$1.2 million, or less than 2 percent o f total project costs. 17. Insummary and for the five cities, the project's emphasis is on low cost, simple technology and high visibility interventions, all designed to provide a unifying cultural heritage presence that runs through the historical areas. The investments are selected to increase the sustainable use and livability o f the historical cores by encouraging vehicle access to their outer limits, and then pedestrian traffic within them, restrict undesirable modes o f access, and provide for increased managerial capacity to manage and improve these areas. The investments are chosen not only to preserve what historical fabric remains, but also to have a multiplier effect by encouraging private investments innon-public assets that make up the majority o f the heritage cores. 18. The project also provides an additional $6 million to construct the Petra Gateway c ~ m p l e x . 'T~his facility is located at the entrance to the Petra UNESCO World Heritage Site at Wadi Mousa and, again, represents a cost effective and culturally appropriate investment for Jordan's most important heritage site and its most visited tourist destination. Publicv. private alternatives 19. The project intervenes in heritage sites, landscapes and historic urban cores. The World Bank's experience in other Jordanian cities, as well as in Lebanon, Egypt and China, has shown that the private sector are unable to adequately preserve and develop these areas, nor can it ensure an equitable distribution o f benefits (public good or otherwise) that emanate from those historic assets. Therefore, there i s a strong case for pubic sector intervention to preserve and manage the assets and thereby enhance public welfare. Such market failure is due to the public good nature o f many physical improvements and services inthe cities and a strong presence o f externalities and incomplete information incultural heritage sector that inhibitsthe private sector. 53The Gateway Complex was originally conceived and designed under the World Bank financed Jordan: Second Tourism Development Project (Ln 4214-O)Under that project, funds were not identified for the construction, and the Government requestedthat the current projectprovide the needed Investment. 139 20. The historical cores see very little investment taking place. Inthe five cities, most public spaces are run down and in need o f rehabilitation, and many areas could be put to higher value uses through a change in regulatory measures. Private sector activities would benefit significantly as a result o f the upgrading o f historic urban cores. However, public spaces generally belong to the category o f non- excludable public goods for use o f which it is impossible or difficult to charge. Thus, and despite the overall potential for gain, the private sector will not initiate the investments and bear the costs o f upgrading the public spaces, as it would be incapable to recover the costs o f such upgrading. 21. The list o f all public investments was examined during the design phase o f the project the results o f this review are shown inTable 1below. Over 67 percent o f the project's costs represent an investment innon-excludable public goods, mostly investments in improving urban public spaces, that is, natural landscapes, roads, sidewalks, public transport areas, traffic management, etc. 22. Another 5 percent o f the project finances investments with externalities that, without Government intervention, would result in sub-optimal level o f the good provided. For example these costs are allocated for subsidies to upgrade outside areas of privately owned buildings. Selected buildings and associated structures will be resurfaced with indigenous materials and the color schemes to reflect traditional patterns. Because the private sector would have few, if any, opportunities to charge (or charge enough) for these goods, they would not be interested in providing them and public intervention is, therefore, warranted. 23. An additional 18 percent o f the project is for investments where there could be private sector interest but are characterized by insufficient information which ultimately prevents private sector intervention. Included here i s the construction o f essential public buildings and the Petra Gateway complex. 24. The remaining 10 percent o f the project are split between areas where the Government i s intervening because o f a lack o f information (training and feasibility studies), where there are equity (redistribution) concerns (business development grants), or investments in an area reserved for the public sector (e.g., state and municipal hnctions and project management). Details can be seen inTable 1. Beneficiaries of the project 25. Beneficiaries o f this project include: the towns and municipalities o f Jerash, Karak, Madaba, Salt, Aljoun, the Ministry o f Tourism and Antiquities, small CSOs, NGOs and businesses. All these beneficiaries will receive investment funds and technical assistance. In addition, their capacity for better management o f cultural heritage andor tourism expertise will be increased, which should also provide an incentive for implementation. 26. As mentioned above, the CHTUDP will have a positive impact on poverty. Some residents will also have increased income opportunities through support for productive and commercial activities. To the extent that the poor are involved inselling goods or services to tourists, they are also likely to directly benefit from the expansion in tourism that the project helps to support. A limited number o f private citizens will also directly benefit thorough project investments in the facades o f their buildings. All o f these groups are likely to support the project and its implementation. 27. However, there are some parties that will likely oppose the Project. The most important of these are private sector groups that wish to increase their activities inside or adjacent to the historical areas without regulatory restnction. It is conceivable, but unlikely, that pressure could be brought on the project and its implementing agencies by landowners that wish to destroy their existing historical buildings in the core areas and erect more modem and larger structures for either up-scale residential or commercial uses. In addition, Project areas in the cities will receive increased municipality resources (both in terms o f time and money) to maintain the new infrastructure installed under the Project. This may cause some resentment in non-Project areas, from the lack o f both investment and subsequent maintenance funds. These risks have been mitigated by obtaining municipal resolutions o f support and 140 written "Pacts" (see Annex 6A) for each urban rehabilitation program. In the Pact, municipalities have undertaken to increase real estate taxes inProject areas, which should help to further justify the increased investment and O&M allocations. Fiscal Impact 28. Over the 5-year implementation penod, the Government will have to provide about US$15.08 million in counterpart funds under the project, with a maximum of about US$4 million in CY2008. This annual level o f investment i s less than one percent of the country's total 2005 gross government investment (about US$890 million) and should not pose any overall fiscal constraint. IBRD will finance about 78.8% o f the project and the Government about 21.28%. 29. There will be a slight increase in recurrent expenditures resulting from all new or rehabilitated infrastructure under the Project. These are estimated at about US$l-2 millionper year. 30. Repayment o f the loan from IBRD (US$56 million) is the responsibility o f the Ministry of Finance. The fixed-spread loan Fixed-Spread Loan (FSL) with level repayments has a 17 year final matunty, including a 5 year grace period, and avoids principal repayments up to 2012. The currency of the loan will be denominated inU S Dollars. The Borrower chose an FSL for its flexibility and embedded options, which permit the currency and interest rate to be altered, and because it will permit better management o f their sovereign debt. Mid-Term Review 3 1. The Project's mid-term review i s scheduled for the end o f CY2009 o f the implementation period. The mid-term review will be used as a means to adjust project components and reallocate effort and .... resources as appropriate. Inthe context o f the economic analysis, the following items are scheduled to be addressed and assessedat the mid-termreview: accomplishments for the strengthening and improving o f managerial and technical expertise inthe affected municipalities and MOTA; use and effectiveness o f the business development grants; increase inbusiness turnover and traffic counts (both automobile and pedestrians); and (ifpossible) increase inrealestate values as aresult ofthe Project's investments. 32. T o ensure that the required information will be available, planning for the mid-tern review will be discussed inthe project launch workshop and then followed up during supervision. Well in advance o f the actual date o f the mid-term review, the concerned implementing agencies will be asked to provide relevant documentation for prior review and to formulate action plans as required. The Bank will also ensure that staff with the appropriate skillmix will participate inthe mission. 141 7 Table 1: Rationale for Public Sector Involvement by Project Component ProjectComponent 1 Rehabilitation of Historic City Centers 55.15 and UrbanInfrastructure Improvements 1.a Upgradingof street networksand allied public spaces 1.b RehabilitationofFacadesonPrimary Streets 1.c RenovationandPreservationo fselected heritagebuildingsthroughadaptivereuse 1.d Rehabilitationandupgradingof pivotal urbanspaces 1.e Constructionhehabilitationof essential municipalbuildingsandfacilities 1f Parkingand traffic management 1.g Rehabilitatiodimprovementofnatural landscapes 1.h Designand supervision I 2.55 .2 Petra Gateway 6.05 3 Support to LocalEconomic 1.16 ........................................................................................................................................................ DevelopmentInitiatives 3.aI Business development Grants ................................................................................................................................................. 3.b; Studies, training and workshops ............................................................................................................................................................... 3.c Consultant services 4 Capacity Buildingand Project 2.86 Management 4.a MunicipalRevitalizationPact Support 1.57 4.b CommunityStrategic Partnership 0.10 4.c MOTACapacity Building and Project 1.19 Management - 65.22 5.41 Percent of Total 100% 5% I67%I 0% I18% 1 2% 8% 142 Annex 10: SafeguardPolicyIssues JORDAN:CULTURALHERITAGE,TOURISMAND URBAN DEVELOPMENTPROJECT Annex 10.A:EnvironmentalManagement and CulturalResourcesManagement Plans 1. The Project would contribute to tourism development in five key histoncally and culturally important secondary cities: Ajloun, Jerash, Karak, Madaba, and Salt. It will also support the construction o f gateway complex at the entrance o f the Petra World Heritage Site. Investments under the project will help to create the conditions for local economic development inthe five project municipalities (PMs) and assist the country to diversify its tourism industry. The project's main component will consists o f re revitalization o f historic city centers, urban infrastructure improvements and cultural landscapes regeneration to help improve living and workmg conditions; preserve "endangered" historic and natural assets; and catalyze local economic development. EnvironmentalCategory 2. This Project would include investments in the targeted 5 municipalities (Jerash, Karak, Madaba, Salt, and Ajloun) and Petra related to urban upgrading and tourism development. This would include rehabilitation o f street networks and street furniture, installatiodwidening o f pedestnan sidewalks, rehabilitation and cleaning o f building faqades, improvement o f significant nodes of public spaces, protection and landscaping o f green areas, conservation and adaptive reuse o f monuments and historic buildings, rehabilitation o f public transport facilities, conservation o f significant natural landscape, and construction o f a gateway complex at the entrance o f the Petra site. 3. Limited negative social and environmental impacts which are easily mitigated may occur during the implementation o f the rehabilitation and construction works. As a result, this Project is rated a category "B" in accordance with World Bank Operational Policy 4.01 (January 1998) and requires the preparation and implementation of Environmental Assessment (EA) including preparation o f project specific Environmental Management Plan (EMP). The EMP will provide a review, analysis and recommendations o f appropriate mitigation measures to be taken during project design and implementation by the project executing agency (MOTA-TDD), project municipalities, design and supervision consultants and contractors. EnvironmentalAssessment 4. An Environmental Assessment (EA) was carried out by MOTA-TDDthrough a contract with specialized consultant who was mobilized during the period o f December 2005 and March 2006. The EA process was o f participatory one which featured stakeholder workshops and meetings with municipal councils, business owners, residents, NGOs and special interest groups. In addition to a summary o f the socio-economic characteristics o f each o f the 5 PMs, the EA report presents: (a) the legal, regulatory and administrative frameworks currently in use; (b) a baseline of the environmental conditions; and (c) the potential environmental impacts which may be caused by the activities that would be financed by the project. 5. The environmental parameters addressed in the EA include: dust and gases emissions, water (wastewater, surface water discharge, storm water), construction waste, accidental risks, loss o f vegetation, and aesthetics 6. The typical CHTUD sub-projects include rehabilitation and upgrading o f streets and infrastructure and installation o f new street hmiture (lighting, striping and marking), and street landscaping inthe Old Core Special Zone, removal o f buildingsand structures that pose aesthetical threat to the valuable archaeological, historical structures and open space in Special Zone, construction o f parking structure, visitor center (Petra Gateway), rehabilitation and preservation o f valuable natural landscape including introducing a re-vegetation program. The potential impacts would be related to: 143 construction activities associated with rehabilitating streets and infrastructure (construction safety, noise, dust, waste material, and vehicular traffic); provision o f sanitary and electricity services; construction o f parking structure, and installation o f street signing and lighting; and landscaping and re-vegetation activities. 7. The EA has concluded that CHTUD sub-projects will benefit the communities in terms o f improved access to essential social and other services, improved quality o f environment and sanitation, will provide employment opportunities dunng construction and more sustainable ones during operation and maintenance. They will also contribute to the preservation o f valuable cultural and historical assets through improvement o f the surrounding environment, improved access to them and therefore improved attention by the authorities to allocate the necessary resources for protection and preservation. The potential adverse impacts will be limited inscope and severity and will be relatedto noise and odor due to demolition and new construction, disposal o f waste construction and traffic disturbance due to detours duringconstruction. 8. Analysis of alternatives. The alternatives or options for interventions in every city were reviewed as apart o f the preliminary design studies. The "do nothing" option is not favorable given the general consensus about the degrading quality o f the urban fabric in the historic cores. Not undertalung the project will lead to further environmental degradation, destruction and continued deterioration o f sensitive cultural sites and landscapes. Environmental Management Plan (EMP) 9. The EMP has been prepared based on the existing environmental situation and the assessment requirements. It complies with the Jordanian environmental laws and regulations and municipal bylaws. The E M P specifies the requirements for the environmental management and monitoring o f the CHTUD project along with the appropriate tools for the environmental auditing. 10. Site specific Environmental Screening, Review and Assessment. Design consultants will have the responsibility o f reviewing and assessing the environmental feasibility o f the proposed sub-projects. The consultants will also liaise with key stakeholders including PMs, MOA, and MOE. The consultants will also liaise with the appropriate officials from the Department o f Antiquities at the Ministry o f Tourism and Antiquities where needed. 11. An environmental audit o f implemented sub-projects will be carried on an annual basis by an independent qualified environment consultant recruited by the MOTA-TDDand financed by the project. This consultant will also assess the PMs Special Zone teams' capacity and performance and recommend areas that need further strengthening. 12. Mitigation Measures: The primary objective o f the EMP is to define the necessary mitigation measures that would be considered / implementedat the various stages o f project implementation (design, construction and post construction). The type and magnitude o f the impacts vary from one sub-project to another depending on the scale, local hosting environment and tools adopted for physical implementation. The EA preparation adopted a methodology o f consultation and requesting feedback from potential beneficiaries through well designed and structured consultation process with key stakeholders. The discussion focused on public and environmental health, water and sanitation, solid waste, noise and psychological comfort, land use, air pollution and public safety. 13. The results of the stakeholder consultation are considered as indicators of the improvements in the different environmental subjects. Both positive and negative impacts on the environment and social life are presented in details as the findings o f the EA. Daily supervision o f the construction activities will be carried out by the supervision consultants. Annual specialized and more focused environmental audits and reporting will be carried out by another specialized environmental firm contracted specifically to review and report on the compliance o f the EMP. The attached responsibility matrix shows the expected 144 impacts covered by the types o f sub-projects and lists the mitigations to be implemented pnor, duringand post construction phases of the sub-projects. 14. EMP Cost Estimate and Schedule: The cost associated with implementing the EMP is accommodated by the project and estimated at US$200,000 (see table below). The project will finance, as part o f the project management component, the cost o f a specialized environmental consulting firm to canyout annual audits and review o f compliance with the EMP. It will also finance the cost o f enwronmental consultants to help the municipalities in developing a Solid Waste Management Plan for the Special Zone in the Old Core o f the five PMs. Training workshops on environmental management will be addressed to MOTA-TDDand municipaloperation staff and eligible contractors. EMPCostEstimate Recruit Specialize Environment Consulting Firm to supervise and report on 1 25,000iyea1 125,000 compliance with the EMP. Recruitqualified waste management consultant to help PMs preparetheir solid 1 5,OOOPM 25,000 waste management and enforcementplans for the Citv Core SpecialZone. CapacityBuilding and Training for MOTA-TDDandmunicipaloperations staff andcontractors (workshovs). io,ooo RecruitanArchaeologyteamto liaise with Dept of Antiquities. II100days II 200Iday Costs associated with mitigation measures Included in the construction costs Miscellaneous. II 10.000 I Total I 200,000 I 15. The EMP also delineates post construction activities that will be necessary to be carried out and financed through the annual municipal and central government budgets to ensure sustainability of benefits and safeguarding the new assets. This includes operations and maintenance o f new assets and rehabilitated infrastructure, public awareness, and enforcing the laws and regulations and punishing violators. Implementationarrangements 16. The implementation responsibility o f this Project will be with the Ministry o f Tourism and Antiquities (MoTA) with close cooperation and coordination with Ministry o f Municipal Affairs (MoMA) and the Project Municipalities (PMs). The M o T A - Tourism Development Department (TDD) project management team, also worked on the Jordan Second Tourism Development Project (closed June 30, 2005), will provide the continuity o f the understanding o f the Bank's environmental policies as well as the expenence on the ground in monitoring and mitigating the anticipated environmental implications created by the implemented sub-projects. This Project would further develop such capacity by financing (a) additional training to specific MOTA-TDD'soperational staff, and (b) the recruitment o f a specialized environment consulting firm who would work closely with the MOTA-TDDteam and would be responsible for reviewing, advising and reporting on environmental issues throughout the project life. The environmental firm will also assist the project municipalities to develop their capacities for better environment management, particularly intheir historic cores. 17. M o T A and the PMs would also benefit from the services o f qualified local consulting firms who will assist inthe supervision o f the infrastructure related activities. Over the years o fBank's operations in Jordan, several leading Jordanian consulting firms have developed good knowledge and experiences with Bank's environmental safeguards. These firms would supervise sub-projects implementation o n the ground and ensure the contractors' compliance with the EMP. 145 $x x m i 2 2 c j0 W P m -ca M B c $b $ :5 . . . .g .$ S P m m - .-C I B C s 3m . . c I- I- f . . . . . 0 Y L . . . oe f t . I. Annex 10.B: Social Analysis Jerash, Karak,Madaba and Salt: A Summary 1. This analysisofthe Jordan Cullma1Heritage,Tourism andUrbanDevelopmentproject (CH"D) covers: (i) socialdimensionsoftheproblemofhstoriccores;(ii) the socialoutcomes interms ofbenefitsandbeneficiaries; (iii) stakeholderinterestsatplaythatmightsupportoropposetheproject;(iv)thesocialprocessesofconsultation the andcooperationinprojectimplementationandevaluation; and(v) the socialdimensionso friskandriskmitigation. HistoricalCulturalHeritageAssets 2. The CHTUD project aims to enhance the conditions for sustainable tourism development in four cities Madaba, Karak, Jerash and Salt that are eachcharacterizedbythe sigmficantvalue ofthelr cultural heritageassets. These four cities, incontrast to nearlyall other Jordamancities, displayhstoricalcontinuity wththe latenineteenth centmy Ottoman p o d and beyond. The heritage is reflected in the fabnc of the historic urban core, often in associationwithrelics o famucholderbuiltheritage.T h ~corerepresentsalivingheritage,becauseit is or hasbeen s untilrecently, a zone oflivingsocialinteracbonandexchange ofgoods andservicesbetweenits constituentsocial groups, withtheruralregionalhterlandandalsowiththe externalworld. 3. The historic cities also display certain cultural characterisbcsthat tend to distingwsh them from Jordan's newercities. Ingeneralthey ehbit: (i) acollectiveidentityandmemoryrootedinthe city'shstory; (ii) llnks hstonc ofcommerceandcommonartisanaltradition wthtownsinPalestineandSyria; (iiialocally-rootedcommercialand professionalmiddleclass; (iv) a dominantfamily tradition of educationand o fconscious distinction from ruraland tribal culture; (v) an urbantradition ofintercommunatananproxtmity, coexistence, communication, andurbanself- managementderiving ffomthe Ottomanperiod; and(vi) apolitical culturehstoricallyl d e dto nahonalistic or left- wingmovements. CulturalAssetsThreatened 4. It is not too strong to see these urban collectivities as communihes undergoing major transition and recomposition.The physical fabnc o f the hstoric cores as well as thelr distinct urbanculture are underthreat, the former through a vicious cycle of market failure and insbtutional failure, the latter through rapid social and demographc change coupled with a k s t r a h v e centralimg tendencies that have eroded urban autonomy. It is centralto h sprojectsocialanalysisthat, while "socialenpeering" isnot supported, itis insufficient for aprojectto focus- on physical urbanworks without takmg into account the need to ensure participation of the major social groups andthe role- of urbanspace m social interactionand cohesion. A collective interestinthe preservationand restorationofthe patrimonyhas to benurtured, without which "protection"is rejectedas an externalimposition.Thls participatoryapproachis feasible becausethe four histonccities inquestionhavemaintaineda, tradition of collective identity andpride, an asset whch translates into a potentialwihgness to act to change the situation. These points were repeatedly stressed in the collsultations and exchanges with different stakeholders that took place during preparation. 5. The five key components o fthe process of decline ofthe historic centers are: (i) Institutional inertia: with the partial exception o f Salt, local municipalities feel little responsibility, incentive or mandate to maintain the character of their historic cores and lack the resources to do so; (ii) Change in social composition: the social compositionof the hstoric cores has movedtowards increasingaccommodationof poor people, mlimmigrants andunskilledforeignworkers; the qualityof commercialandartisanalenterpriseshas declinedwiththe insertionof inappropriate small-scaleinduskialandmanufacturingactivities; (iii) ofkeyurbanfunctions: withthe flight of Loss middleclassresidenceandinvestmenttothe periphery,thehistoric coreshavelostmuchoftheir original function as spacefor socialconnectionandcohesion, butratherreflect socioeconomic hgmentation; (iv) Shift away ofpnvate sector focus: physical degradation, congestion, degraded quality of urbanenvironment havereducedincentivesfor quality investmentinthe center infavor ofthe newperipheries, leaving investmentinthe center to be chamcterized byanarchic, poorly-plannedlowcostprivatecommercialandresidentialconstructionthatencroachesonpublic space andinappropriatelydestroysor modifies constructions ofhistorical value; (v) Lack ofvisitor attraction: visitors and tourists, to the main local attractions (castle, Romanruins, Byzantine church etc.) have little incentive to visit the unattractive, unkempthstoric centersandthereforedonot interact wththe localpopulationor access local goods and services. 149 Social Outcomes in Terms of Benefits and Beneficiaries 6. The proposed CHTUDproject aims to reverse the degradation o f historic urban cores and initiate a process o f regeneration through actions in the physical, institutional and social dimensions. Thus the project will (i)improve structures and public spaces through direct public investment and incentives to pnvate investors; (ii) improve municipal will and capacity to manage public assets in the historic cores (traffic, maintenance, services, tourist and visitor activities) and (iii)engage the diverse elements o f the community in the collective use o f these public spaces for income generation, social cohesion, urban integration and leisure. Key project outcomes will be (i) an attractive and well-maintained historic city center serving as a community focus; (ii) enhanced commercial activities consistent its character; (iii) improved pedestrian access and vehicular movement; (iv) greater interest in local investment; (v) municipal capacity and will to service and maintain the center. Given a conducive external environment, this should result in an increased flow o f heritage-related visitor activities and expenditure benefiting the cities. These outcomes combine physical and social processes, and are measured both through outcome indicators and process (behavioral) indicators. Measurable social outcomes are community use o f public spaces for various activities, public access to historic buildings; improved pedestrian and vehicular access; increased and higher-value commercial activity; improved property values; and derived municipal fiscal benefit. Improved social cohesion i s also hoped for, but may prove difficult to measure satisfactorily. Stakes and Stakeholders 7. Despite local particularities, the cities have a similar range o f key stakeholders: (i)Dominant or 'Ifounding"families characterized by property ownership, local or national political influence, who may be induced to take a leadership role inrestoring the physical and cultural character o f the city centers as has happened in Salt; (ii) Rural emigrants offlrst or second generation depth, who now constitute a major segment o f the city population; who form the backbone o f the working, trading and manufacturing population; who have little attachment to the city's historical or cultural character but who have a clear interest in economic opportunity, commercial upgrading and a more livable urban environment; (iii) Professionals and the Private Sector from whom may come voluntarist impetus and involvement in matters such as environmental or historical protection, social protection, social advocacy, civic participation, education and training; (iv) Women and Youth, an overlapping stakeholder interest which without conscious attention may risk exclusion from influential male appropriation of public space; (v) Populations of non-Jordanian origin, who may benefit from local opportunities o f training but who also could be at riskfrom the social process of "gentrification" o f the city center, rise in property values and rentals; Commuting and transitoly populations who have an interest in reduced congestion. There was widespread consultation with these different groups during project preparation. Systematic stakeholder representation in each city is secured through a consultative or steering committee group in order to tap the views and interests o f these different groups. There is also a wide range o f potential institutional stakeholders w h c h a wide and somewhat overlapping range of mandates; but which cooperates effectively inpractice at municipal and project levels. Risks and Risk Management 8. Three generic social risks are: (i) o f capture o f benefits by particular social groups, mitigated Risk by the establishment o f a consultative body to monitor the transparency o f the implementation process and the fairness o f the distribution o f benefits: (ii)Underutilization o f public space, minimized by strategic support for two years to the organization o f community activities such as youth training, computer literacy, women artisanal activities, youth life skills, many o f which are already active but hampered by lack o f appropriate facilities or space; (iii)Insufficient Transparency in the Tourism Industry,mitigated by improved informationto tourism and periodic monitoring o f tourist activities. 9. Recommendations:(i) systematic inclusion o f a social dimension in each city's tourism and visitor development plan with clear specification in each city o f outcomes and social development activities to be promoted; and (ii) systematic participatory monitoring o f social development indicators (process and outcome). 150 Annex 1O.C: Summary o f the Resettlement Policy Framework and Resettlement Action Plan 1. This annex presents a summary o f the Resettlement Policy Framework (RPF) prepared for the Cultural Heritage and Urban Development Project (CHTUD), in compliance with the Bank's social safeguardpolicy on Involuntary Resettlement. It presents the project objectives, impacts, legal framework and methods and institutional responsibilities to carryout specific Resettlement Action Plans (RAPS)in each participating municipality. A. PROJECTDEVELOPMENT OBJECTIVE AND DESCRIPTION 2. The primary objective o f the project i s to contribute to tourism development in five key historically and culturally important secondary cities: Jerash, Karak, Madaba, Salt and Ajloun (the PMs), and thereby create the conditions for local economic development. A secondary objective i s to contribute to the consolidation of the tourism industry inPetra, Jordan's premier tourism asset and destination. 3. CHTUDP would consist o f four main components, as follows: (a) revitalization of historic city centers, urban infrastructure improvements and Cultural Landscapes Regeneration; (b) the construction o f a new Visitors Center at the Petra Sanctuary (Petra Gateway); (c) support to local economic development initiatives; and (d) support for project management and capacity building. (See detailed description in Annex 4) B. JUSTIFICATION FOREXPROPRIATION RESETTLEMENT AND 4. To achieve the project objectives and be able to carry out the proposed activities, a modest requirement for expropriation o f land or buildings in the public interest, or resettlement o f occupants, will be necessary. The issues and proposed actions that support the proposed expropriation are summanzed here and described ingreater detail inindividual city Raps: o In Karak, the bus terminal is strategically located at the entrance o f the old town to the citadel. This is based on the highly accidented topography and closely spaced buildings which give little alternative to this natural entry point to the historic portion o f the city. Its present function as a central location for local transportation would be preserved, but the relocation o f the surrounding unsightly 30 small workshops (only 13 are active) in Phase I, including auto repair shops, to another location would permit an integrated and attractive redevelopment o f scarce open public space; properly managed, and to allow for tourism related development and public parking structure. Moreover, acquisition o f 2 plots o f land and acquisition and removal o f two deteriorated small buildings (8 apartments) will be necessary to provide clearance for the construction o f (a Parking Structure and other tourist related development). This will create much needed organized parking and enable a much improved traffic circulation and access to the new bus terminal is formulation. Phase I1will involve the removal o f three intrusive residentialbuildings occupied by 15 families. o In Jerash, the obvious natural function o f the Wadi is a protected green space linkmg the commercial city and the plaza with the archaeological site, and the entire zone should be preserved as non-aedificandi; the two residential and two commercial buildings are highly obtrusive, unsightly, and located on a steep bank inappropriate for residential buildings. Their assisted removal would be environmentally and sociallyjustified, creating an integrated space for the local public and visitors o f great visual attraction and respond to local demand, while their continued presence would encourage individual investment proposals that would encroach on the remaining space. However, the relocation o f renters or owner-occupiers would have to be managed with great sensitivity. Moreover, 6 small businesses would need to be relocated to allow for the development o f the eastern bath node. The vacant land, 18 privately owned plots o f (approximately 13,000 m2), along the Wadi, will be subject to a rezoning scheme to insure protection from floods as well as protection o f the Wadi landscape. Once the land is rezoned, land owners could enter into partnership with the municipality as per the guidance o f the forthcoming Wadi landscape development plan. 151 D In Salt, the project Phase-I project will involve the removal o f two government buildings (police centre and education department) and a telecommunication company building used as a post office, while Phase-I1 will involve the rehabilitatiodreconstruction o f an Awqaf complex which includes a mosque, Waqf department and 30 shops. Adopting the appropriate development alternative will be decided by a special committee. The project will also rehabilitate four selected privately owned historic buildings (from the Ottoman period) identified in the Saha area. The project would encourage owners to reuse these buildings in the public interest. InMadaba, the community will benefit fromrelocating the police station from the Ottoman dated Saraya building. The community, in cooperation with the SIYAHA Project, is putting forward a redevelopment proposal to use the building for public interest with a particular focus on cultural heritage related activities. 5. In each case, the justification is the significant public benefit that would come directly or indirectly to the population o f the municipalities concerned, which clearly outweighs the cost to the affected persons. c. PROJECTAFFECTEDCOMMUNITY PROFILESAND CONSULTATION 6. This Section provides a brief profile o f the communities and types o f individuals who will be affected by the proposed expropriations. The information hereafter i s a result o f a consultant's survey followed by a joint thorough door-to-door survey which was carried out by a team comprised o f M o T A - TDD and the relevant municipality. More detail information vis-A-visthe names and characteristics o fthe affected persons are provided inthe individual Raps. Eligibility Criteria for defining Project affected persons 7. All property owners andor persons who have been living inthe project action areas andincluded inthe socioeconomic survey conducted by MoTA during January 2006 whether they have any form o f rights to land and property or those who have been livingas renters will be considered as project affected persons (PAP) and therefore, will be eligible for compensation. Estimated numbersand categories of affected population 8. The project will affect small number o f people in all project areas, approximately 200 persons will be directly or indirectly affected by the project; and the majority is inKarak and Salt and few group inJerash. Their properties willbe expropriated for the sake ofthe project Residential and commercial properties 9. Residents include: owners, renters and renters-at-will, and squatters. Owners form 61% o f Project affected people (PAPS)inthe project area, while the remaining group 39% considered renters. No squatters were found inthe project area. - Owners of Commercialproperties: Owners ofbuildingsused for commercial purposes in Jerash and Karak were living away. In Salt, the telecommunication company owns the land and occupying the post office building. - Rentersof Commercialproperties:InJerash, 5 commercialpremiseswillbeaffectedbythe project, these premises are rented. In Karak, the commercial building which owned by the municipality will be affected by the project, 6 shops are active business rented by local citizens and approximately 17 premises are unoccupied. In addition, 3 pnvately owned premises witch, are located at the northern boundary o f the bus terminal will also be affected by the project. 152 Vulnerable Groups,non-citizens 10. Two sub-groups o f the population may be considered particularly vulnerable to adverse project impacts these are women and renters. Mechanisms for addressing the needs o f the main two groups are presented in Section Eparagraph 37: - Women:Thedatacollected fromprojectareaindicatedthatfewfemaleshavelandsharewith others. However, female PAPs are also entitled to compensation under the project. - Renters: All renters including nonJordanian with a legally-valid tenancy affected by the project will be entitled to compensation. Multipleownership 11. The project data indicated that approx. 50% of properties ownership in Jerash and 30% in Karak are categorized as multiple-ownership. Kinship ties are prevailing among most cases. Land Acquisition Law (LAL) recognized the rights o f all owners. Accordingly, owners will be entitled to compensation corresponding to their shares stated inthe property deed. Government property 12. No government land will be expropriated for the project inJerash. However, as the case o f Salt, two government buildings will be demolished for the sake o f the project to create adequate urban plaza in the historic core o f the city. The police centre buildingwas developed on the Land o f Telecommunication Company. relocation o f the offices and the staff inthese buildingsis being arranged with related agencies incoordinationwith Salt Governor and the municipality, InKarak, the commercial buildingwhich owned by the municipality will be demolished to develop new bus terminal and associated facilities, which will include a number o f commercial facilities that will be left to the municipality to rent. The new development will be larger than the existing one and will owned by the municipality. Therefore, the municipality i s not entitled to any compensation, Consultation 13. Several public consultation workshops were organized by M o T A and camed out during September and December 2005 in each municipality. The workshops were attended by relevant governors, mayors, municipal councils, key stakeholders, prominent community members, business people and civil society organizations. During the workshops, M o T A presented the project objectives, components, benefits and impacts, and key requirements for successful outcome and smooth implementation process. As reported there was a general consensus o f the expected positive impacts o f the project on the benefiting communities. 14. Several actions were taken by M o T A vis-&vis the resettlement plan. Inearly 2005, it contracted a consultant who carried out a detailed survey o f the PAP. Later in December 2005 and January 2006, a team comprised o f MOTA-TDDand municipal officials camed out a door-to-door survey o f the PAPs to confirm the consultant's work. The finding were then presented and discussed with municipal official for final confirmation. D. EXISTINGLEGAL FRAMEWORK 15. Jordan has an established system for expropriation o f land and property in the public interest. This section outlines Jordan's existing legal and policy framework relating to the expropriation o f any private land. Section E identifies some compensation and procedural issues that could require special attention to ensure that the project remains in compliance with requirements for Bank financing, based on a review o f polices and the general approach to LAR applied to similar (and other major development) projects in the past. The actual implementation structure in relation to the CHTUD project is described later in Section H. 153 Legal Provisionsfor Expropriationsand Compensationsof PrivateLandand Properties 16. Legal instrument: Land acquisition i s done under a single piece o f legislation, Decree (12) o f 1987,commonly referredto as the Land Acquisition Law (LAL). The LAL applies inall cases and to all concerned institutions. The key articles if the LAL are discussed in this section in the context o f World Bank guidelines for land acquisition and resettlement respectively, noting where appropnate provisions that would not apply inthe present CHTUD project. 17. Land Owners: The LAL specifies (Article 7) that the owner o f the property is the person in whose name the property i s registered at the Land Registry. If the property i s not registered, the person seizing (Le. in de facto possession of) the land on the day o f issuance o f the Council o f Ministers' Resolution to acquire shall, for the purposes o f compensation, be considered the owner. This stipulation does not preclude anyone else from claiming ownership through the courts. The entitlements o f legally- establishedrenters and renters are also confirmed. 18. Inthe case ofmultiple ownerships, it is the general practice ofthe government to deal with the owners as a body and to ask them to select a representative to act and negotiate on their behalf. Nonetheless, all owners (shareholders) will be entitled to property compensation according to their shares. 19. Compensationfor improvementsand water rights: Compensation for farmlands may include separately itemized compensations for features such as walls, greenhouses, wells, water nghts, etc. 20. The LAL in Article 10 stated clearly that compensation should be fair to all PAPSboth owners and renters. Owners shouldbe compensated for their properties including (buildings, improvements, trees, etc..) at full replacement cost. Inpnnciple, any damage or injurymay be compensated. Judgments on the LAL in 1996 confirm this position: "The property appropriated is the land and the buildings, trees and other fixtures on it including the water tank built in the land. Claiming for equitable compensation includes all that is in theproperty". 21. `The loss o f water rights also attracts compensation: "That the appropriation of the land which includes water spring by the WaterAuthority does not include the waters of that spring. The owners ifthe land was irrigatedfrom the spring shall have the right to claimfor compensation due to harm accrued to their land as a result of depriving itfrom the right of irrigation." 22. Crops and trees: Under the LAL, tree and annual crops are subject to compensation but no guidelines are defined expect that the expropriation shall be in consideration o f an equitable compensation. 23. Under past practice Tree Crops have been compensated in the basis of a flat rate single payment defined according to a schedule developed for this purpose based on the type and age o f tree. This schedule is dated, and is widely believed to lead to the underestimation o f asset values. The courts have often increased compensation substantially after receipt o f independent valuation reports. However, CHTUD project for this purpose will use the table guide o f Department o f Land and Survey (DLS), which originally prepared and adopted by the Ministry o f Agriculture. 24. Amount of Compensation Payable to Renters: The LAL caps the awards to renters proportionately as a percentage o f the compensation for the plot. The maxima are: (a) 15% if the compensation i s for occupation for industrial or commercial purposes; and (b) 5% if the property is occupied for any other purpose. 25. The LAL does not preclude private agreements between renters and owners. Inconjunction with other laws, a settlement without the agreement o f the renter extremely unlikely. 154 26. Source of funds: The necessary funds for compensation will be provided by the Government o f Jordan as part o f the Government contribution to the project. Therefore, the compensation will be allocated ina separate budget line item inthe DLS, a Department o f the Ministryo f Finance. ProceduresandMechanismsfor Expropriations 27. Land:The LALlays down the followingprocedure for the acquisitiono f land. Table 1: Land Expropriation under Decree 12,1987 Other concernedauthorities I ProiectAffected Persons Step 1: Eachconcernedmunicipality MOTA assist the concerned providedetailedinformation onthe municipality to identify and landandpropertiesto be finalize information onthe land exmomiated. andpropertiesto be expropriated Step 2: Concernedmunicipalities MOTA will helpthe municipalities announces intwo daily newspapers to estimatesthe budget for the the municipality intentto expropriate proposedexpropriationand specified land, providing full details. support MOMA to ensure budget allocations. Step 3: Establishvaluationcommittee MOMA and MOTA will monitor VC to estimate compensation the valuationprocessandmake (valuations are basedon currentland sure total cost within the allocated values andorices'l. budget. Step 4: Announce the details of land Step 5: Affected persons then have acquisitionprofile including 30 days to discusscompensation compensationcost andpublishthem with Concernedmunicipalitiesand inthe officialmagazine. VC. Ownershavethe right to object, andappeal againstthe Compensationestimate. Step 6: Negotiationand establishfinal Step 7: Ifno agreement i s reached, offer infull coordinationwith VC. owners have recourse to the Courts. Step 8: Municipal council approval. Step 9: The cost o f compensation i s finalised on ratification by the Minister of Municipal Affairs. Step 10: Disburse fundto PAPs. MOTA will follow-up and ensure that PAPsreceive their compensationwithout any delay. Step 11: Judicialinvolvement whenno agreementis reached. " Note: The officials are the regionaldirectorsof the four ministnes:Public Works; Landand Survey; Finance; and Agnculture; together wth a representativeof Audit Bureau.Although the compositionis official, the law specifically empowers the Director of Lands and Surveys to call uponany advice in a reviewof compensationifnecessary. 28. Residential Building Acquisition: The acquisition o f residential buildings follows a procedure similar to that inTable 1above (Land Expropriation under Decree 12, 1987). - A committee is formed at district or municipal level at the request o f the MOTAto value the property affected. This committee comprises the district representatives of the ministries o f MoPWH, Lands and Survey, Finance, Agriculture; and the Audit Bureau. - Thecommittee evaluates the affectedbuildingsandprovidesavaluationreport. Acquisition. The valuation is given on a unit rate per square meter. This valuation is presented to the owner who may object. A period o f 30 days is allowed for objection. - Inthe absence of objection, the valuation report is passed to the Minister ofFinance for approval. If objection is made, negotiations are entered into. When negotiations are successfully concluded, the revised valuation report is passed to the Minister o f Finance for approval. Inthe absence o f agreement, the matter is referred to the courts. - After ministerial approval the valuation report is forwarded to the Director of Lands and Survey for payment. The funds utilized are drawn from specific D L S budget allocations. 155 E. POLICY COMPLIANCE ISSUES PROVISIONS AND CHTUD 29. Where the provisions o f the Bank policy on Resettlement might not be fully satisfied by the provisions o f Jordanian law or practice, special project specific arrangements are indicated in order to ensure that the Bank's expectations are met. 30. Provisionfor uncompensated expropriation: The exception whereby up to 25 per cent o f the area o f a plot may be expropriated without compensation if the purpose o f the expropriation i s for the construction, expansion or widening o f a road, or the construction o f a government housing project. The exception does not apply to improvements (structures, trees etc,) which do attract compensation entitlements. CHTUD works entirely within designated right o f way (ROW)and does not envisage expropriation to build or widen roads nor to construct government housing. Hence these provisions o f LALwouldnot apply inthis project. 31. Loss of tribal and customary rights: The LAL i s silent on the loss o f customary or tribal rights, on which compensation i s neither mandated nor precluded. CHTUD envisages n o action that will entail any extinction of customary usage or tribal rights. 32. Physical Resettlement or Relocation: There i s no legislation that applies specifically to the rights o f individuals, government and other parties in cases o f physical resettlement and relocation. Legal opinions consulted in this matter confirm this to be the case and offer the view that Decree 12, may be taken as an umbrella law in such cases and that its compensation process and entitlement procedures would apply. The following lessons were denved from a review o f resettlement for the Amman Development Corridor Project financed by the World Bank. Resettlement programs in Jordan are addressed primarily from a legal perspective within the framework o f the specific land acquisition legislation that is applied to all cases. Beyond satisfying perceivedminimumlegal requirements therefore, Jordan does not have a well-defined policy or established practice on resettlement. Each project i s implemented with its own framework, under the umbrella requirements o f the LAL. Past project experience indicates that: - The future o f resettled communities was not viewed as an integral element o f the resettlement process. As a result the basis o f the livelihood o f affected communities was seriously undermined; - Compensation offered appears to be both inflexible and inadequate. Inflexible, in that the emphasis on cash only compensation ignores the distinction between mere compensation and resettlement on a productive basis. In effect, while the expropriation law lays down that compensation must be paid for the expropriated land, it i s based on the narrow concept o f compensation as payment for land taken for public use rather than the more expansive principle that the state has the obligation to restore people's economic well-being and capacity as predictive agents. - Affected populations are generally not consulted or asked to participate in the planning and implementation o f the resettlement program; - With the exception o f Housing and Urban Development Corporation (HUDC), inmost cases, some resistance to the authorities was encountered. Residents in such cases returned to original sites or locations, though mostly on an individual basis; - PostprojectmonitoringwascarnedoutonlybyHUDC; - Lack of co-ordination between different concerned authorities further contributes to weahesses in resettlement program development. The fact that resettlement i s not the responsibility o f a specific authonty or agency, but is carried out by a different agency each time, means that experience i s not accumulated and institutionalized over time. 33. I n CHTUD, project-specific monitoring with dedicated staff is provided for thefew individual cases of resettlement.. Project-specific arrangements will be made to ensure that in cases o f residential and small-business relocation, project-affected persons are as far as possible given relocation options, 156 including agreed alternative housing or business premises with relocation assistance in lieu o f cash Compensation, which will enable them to maintain or improve their incomes and livingstandards. 34. Loss of Income: There are n o specific provisions in the LAL for addressing loss o f income or providing for income restoration. N o r however there is any specific exclusion o f such actions, and where i t can be specified and proved, specific loss o f income could therefore be claimed as one o f the items for compensation. 35. Promptness of Compensation Award and Payment: The law specifically states that n o court case shall impede the appropriationprocess. Ineffect therefore, the lawjudges the property and the structure to have been acquired from the moment o f notification. It i s therefore possible in theory for construction to start, and properties to be demolished prior to agreement on compensation, or payment o f compensation. This processwill also apply to non-residential buildings. 36. CHTUD will pay particular attention to avoid a potential mismatch between pace of project implementation and availing of funds for compensation. N o person will be involuntarilyrelocated from a residence or business premises without the prior opportunity to receive full and fair compensation that enables them to relocate to an equivalent property. This is ensured by the issuance o f the respective works contract being made contingent (through the Bank's no-objection) on the prior satisfactory implementation o f the respective RAP. Refusal o f a fair offer and appeal to the courts shall, however, not be taken as grounds to delay project implementation. 37. Protectionfor Especially Vulnerable Groups: The review o f resettlement procedures conducted for the Amman Development Corridor Project indicated three aspects in which the interests o f especially vulnerable groups might need particular attention. Less affluent, less influential or less educated people may be at a disadvantage in a system where the process o f estimation o f compensation is dominated by official representation; where there are no clear guidelines, procedures or timetable for negotiations particularly in light o f the threat o f demolition; and a time-consuming and expensive judicial process is only really available to those who can afford it. Three particular categones o f affected persons could be at risk: - Women: The data collected from project area regarding property ownership indicted no plot registered in the name o f women, but few females have land share with others. However, there are numerous mechanisms under the law that provides absolute security o f rights to any female PAP to any compensation due under the project. Therefore, female owners are entitled to property compensation according to their shares; - Renters: The LAL caps the proportion o f the property compensation that may be offered to renters at 5% and 15% o f total plot compensation. There i s however an extensive body o f legislation protecting the rights o f the user that should suffice practically to underpin the project's commitment to ensure that renters are not selectively or unfairly disadvantaged. - Non-nationals: Few affected persons in Karak and Jerash o f non-national status may be involved in small enterprise relocation or upgrading. There is no reason inlaw or practice to expect that they will be treated differently from other affected persons. In CHTUD, the fact that the expropriating body is the municipality rather than a central government ministry, that the projects are for local improvement, and that MOTA is the implementing agency, provides inbuilt checks and balances. The municipalities are elective, responsive to local public opinion and dependent on the goodwill o f their citizens and inhabitants; while qualified and experienced MOTA-TDDstaff will provide technical assistance and monitor these cases to ensure that they fully meet the requirements o f compliance. 38. Information and consultation: The Jordanian LAL process is not inherently consultative, providing for administrative and legal processes o f notification, objection, assessment, negotiation and complaint resolution. The Bank's policy places more emphasis on introducing a consultative element. 157 39. In CHTUD, the small and highly localized scale o f the expropriations supports an approach of small group negotiations with those families and small businesses directly affected, led by the municipalities with technical assistance from MOTA. F. COMPENSATION ENTITLEMENTS 40. This section outlines the compensation entitlements defined for use in the development o f this Policy Framework, and details the policy recommendations and compensation principles proposed. Policy Recommendationsand CompensationPrinciples Categoriesof Loss 41. The urban works planned are small and local in scale. No large-scale works are envisaged, and no agricultural livelihoods or uses apply. Taking the project as a whole, all four municipalities combined, and including works envisaged for Phase 2, the total number o f individuals affected by temporary or permanent expropriation o f business or residential property does not exceed a few hundred, and in any single location only a few tens o f individuals, enterprises or families. 42. Assessment o f loss and compensation entitlements would take into account any tangible loss to existing occupation and uses. The following table 2 classifies the major impacts: Categories of Affected Major Impact Persons Owner-occupier Loss o f residence Cost o f relocation Loss o f residential property: land, buildings, improvements- Landlord4AbsenteeOwner Loss o f property Loss o f rental income Renter Loss o f residence I Costs o f relocation Incremental cost of new rental agreement I Business and Commercial Premises: Permanentloss of premises Owner-occupier Loss o fbusiness location and facilities Loss o fbusiness income during relocation Costs of business relocation LandlortVAbsenteeOwner Loss o fproperty Loss o frental income Renter Loss o fbusiness premses Loss o f storage facility Costs o f relocation Loss o fbusiness income duringrelocation Principles underlying assessmentof impacts 43. Urban property ownership and uses are often complex and take many forms. The expected impacts o f temporary or permanent expropriation o f property on individuals and families vary widely, and each RAP will conduct a detailed local investigation o f the situation. This is not difficult, given the small number o f families and businesses involved. 44. Prior detailed work on expropriation for the Amman Development Comdor Project indicates that inthe assessment o flosses under the presently proposed project, it would be useful to address four related points: 158 Jordanian law and practice does not limit consideration o f the types of losses that may be assessed, but apparently envisages only cash compensation, whereas in certain situations other forms o f compensation and supplementary assistance may be more appropriate. However, this approach does not prevent additional forms o f assistance that could be provided in the context o f the project, particularly by the municipalities in light o f their special responsibility for the welfare o f their inhabitants; Not all losses can be translated directly into financial terms. This may particularly be in case o f residential relocation, where there are qualitative considerations to be taken into account, such as location-specific ease o f access to facilities such as schools, shops, transportation and medical facilities, or proximity to friends and relatives; affected persons may not be sufficiently informed with regard to the lunds o f losses they may put forward, or on the conduct o f negotiations; because court proceedings and appeals address only compensation, and may not be used to delay the process of expropriation; The assessment committees, constituted to assess losses and compensation may call on any relevant expertise in reaching its assessment. In the case o f this project, M o T A in-house expertise in resettlement and it may be appropnate to include NGO representation on the valuation committees as advocates for affected people. 45. The issues involved in expropriation are highly local and small-scale in nature, but the local municipal authorities do not have extensive experience of this type o f expropriation. Therefore, M o T A will provide the technical assistance to the municipalities and to the assessment committees in assessing losses and appropriate forms o f compensation. This technical assistance ensures that affected persons are fully informed o f their rights and on the processes o f assessment and compensation, and ensures that the results conform to the standards required by the Bank. 46. Use of Social Assessments. The Bank does not require social assessments (SAs) to be undertaken where the impacts are mi.nor or the number o f affected persons i s less than 200. In such situations, an Abbreviated RAP (ARAP)would not include a S A but must include among other elements a census survey o f displaced persons and valuation o f assets, a description o f compensation and other resettlement assistance to be provided, and a documented consultation with affected people about acceptable altemative~.'~This abbreviated RAP provision clearly applies inthe case o f the relocation o f the Salt late Ottoman historic building,where the two or three families intenancy arrangements would be glad to be resettled ina more appropriate location with some municipal assistance. 47. However, in the case o f Karak (redevelopment o f bus terminal, about 5,500 square meters area) and Jerash (removal o f four intrusive residential buildings) the impacts are not minor, even though the numbers are less than 200. Residents would physically displaced, and owners would lose their property. Inthe case o fJerash, the removal o ftwo residentialbuildings would result inthe involuntary relocation o f an estimated (3) families and inthe loss to the owners o f entirety o f their properties. Inthe case o f Karak, the current commercial character o f the site will be transformed and upgraded, and while some enterprises would benefit from improved facilities, other inappropriate enterprises (e.g. motor vehicle repairs) would probably have to be relocated elsewhere. Therefore, inthese two cases and inany other similar cases that may arise during the course o f project execution, the project requirement is for a proper SA to be conducted in order to assess the impacts. The S A also serves as a baseline against which satisfactory outcomes are to be measured at end o f project, in order to ascertain that the quality o f life o f affected persons has not been diminished by the project. 48. Given the small number or persons involved, the social assessments conducted will be careful, systematic, low-profile and highly participative, emphasizing qualitative information. It is appropriate in this context to combine into a single exercise the conduct o f a SA, a census o f affected persons, the provision o f information to affected persons and the process o f consultation. 54 OP 4.12 para 25: " ... However, where impacts on the entire displaced population are minor, or fewer than 200 people are displaced, an abbreviated resettlementplanmay be agreed with the borrower. . . ": s.a. OP 4.12 Annex A, para. 22. 159 49. Eligibility criteria - All persons affected by the project shall be entitled to compensation. Each RAP shall establish a publicly-announced cut-off date, which shall be the effective date o f the census o f affected persons. - Only those persons who have been enumerated in the census, or who are able to demonstrate that they should have been included, or that they have been left out in error, shall be assessed for losses and compensation. - Entitlement to compensation shall be to all families, business enterprises or adults affected in respect o f property or rights legally held as o f the cut-off date. No distinction shall be made inrespect ofcitizenship. - Persons establishing residence or business after the date o f the census shall not be entitled to compensation under the project. The purpose o f the cut-off date is to prevent persons establishing claims after the intention to expropnate is known, so as to profit from compensation. Principles of CompensationEntitlement 50. Where property is expropriated, the minimum standard below which compensation or restitution may not fall in a Bank-financedproject i s the condition o f the affected persons prior to the project. 5 1. Hence the Bank expects full replacement costs o f property, and fair compensation for other costs or losses incurred through expropriation. 52. Monetary compensation i s intended to secure this standard. However, to achieve this result, the standard o f compensating "current market value" in itself may be insufficient. It i s also necessary to take into account the costs o f relocation, which are notjust physical but also institutional. - Compensation values should be assessed at replacement cost, at market prices with a further additional cost included for the effect o f compulsory acquisition; - Compensation is cumulative. Each compensation item is additional to the compensation claim. This is particularly important in ensuring equity inall valuations and dealings. - Equity considerations also dictate that all compensation due i s treated equally. There can be no priority between equal competing claims. 53. Non-monetary forms of compensation. Jordanian law and practice is based on monetary compensation for loss. This is the form that people understand, are used to, expect and accept, provided that it i s adequate and timely. It i s particularly appropriate to situations o f multiple ownership o fproperty, common inJordan. 54. However, the inappropriateness o f monetary compensation in certain circumstances i s why the Bank encourages, in its projects, that resettlement be treated wherever possible as an opportunity for development and improving living standards, rather than purely as a matter o f financial compensation. For good reason, non-monetary forms o f compensation may therefore be used to supplement or even to replace monetary compensation. 55. In CHTUDP, there are two situations where the types of loss and entitlement mean that compensation in monetary form may not be ideal. In these situations the principle o f compensation in kind may be an attractive and cost-effective option, and the one most likely to result in sustainable positive outcomes. These situations are: (a) residential relocation of owner-occupiers or renters in two apartment buildings in Jerash; (b) restructuring o f the Karak bus terminal service and commercial area; and (c) redevelopments inSalt central square area. 160 Exclusions 56. Bank policy does not require compensation for certain types o f losses that affected persons may propose. Claims for which compensation will not be payable under this project include the following: - Intended usesandfutureplans. Theintentionsoftheowneronfuture useoftheexpropriated asset are not considered to constitute a loss, except for actual expenses incurred in relation to the expropriated site that have no other value e.g. preparation o f plans and structural designs for the expropriated asset. - Indirect impacts. Based on the Bank's policy, this Policy Framework explicitly covers only the direct (first order) impacts o f expropriation. Compensation for indirect impacts is not required. An example i s the success o f a relocated business. The project will have met its requirements when, after expropriation o f the premises, an enterprise has been viably relocated and all transactional and transitional costs are met.. The project makes every good faith effort to ensure viability and sustainability. However, the subsequent success or difficulties o f the business are a second-order question that i s affected by many other factors besides relocation, and therefore compensation is not mandated. - Employment. Loss o f employment is normally considered an indirect impact o f expropriation, and its compensation i s therefore not required. However, as good practice, projects have sometimes included special measures to cushion the immediate impact o f loss o f employment. The current project i s likely to have positive impacts on local employment opportunities both in the short term (works) and in the longer term (enhanced commercial activity in the redeveloped area). However, if the SA identifies any significant negative impact on any particular social group or employment category (e.g. garage mechanics), it would also propose appropriate remedial measures as good social development practice. Clearly, these exclusions do not affect the right o f the Jordanian authorities to agree any compensation on these or any other claims. The exclusion simply signifies that there i s ne requirement to do so inthis project. Timing of compensation 57. A review of previous experience o f expropriation in Jordan indicates that the timing o f payment o f compensation is one aspect o f the expropriation process which requires careful attention. Existing practice may not always ensure that this i s the case. 58. Where an owner or renter i s not required to relocate, and only a portion o f the property is affected, delays in payment may not have serious consequences. Lost rental income can be properly compensated financially subsequently, and the cost o f delays taken into account. 59. However, where an occupier must physically relocate a residence or business, then timely payment o f compensation is critical. Justice requires that the affected person not be required to move without first having secured the time and means to secure alternative accommodation or premises. Therefore, this project includes mechanisms to ensure that agreed compensation be paid infull inadvance o f any requiredphysical move. 60. Intwo o f three cases presently under consideration, Salt and Jerash, full and prior compensation is straightforward. In Salt, the affected persons occupying part o f the historic building to be refurbished will be rehoused elsewhere with the assistance o f the municipality, and are comfortable with the prospect. InJerash, the affected buildings will notbe demolished, and the occupants relocated, before either there is alternative accommodation constructed or refurbished under the project to accommodate them, or full prior monetary compensation has beenpaid. Inboth cases, works contracts would not be issued untilthere had been formal confirmation that these outcomes had been achieved ina way satisfactory to the Bank. 61. Inthe case o f the Karak redevelopment, the situation is more complex, and the RAPwill have to address in detail how the different categories o f affected persons will be dealt with. 161 G. COMPENSATION ENTITLEMENTS, FORMAND TIMING Owner-occupier loss of residence 62. Loss o f residence by owner-occupiers through an act o f expropriation i s the most dramatic and sensitive type o f project impact on individual families, because o f the critical element o f relocation, which i s essential to the purpose o f the project. 63. In the situation of residential apartments, monetary compensation may not be the most appropriate solution, particularly where-as inJerash-the buildings are ageing, poorly sited on steeply sloping river banks unsuited to construction. The poor quality o f the structures buildings means that compensation based on market or replacement value would riskan unsatisfactory outcome. Relocation o f apartment buildings by individual arrangement also is likely to break up -standing social and family relationships which are often found insuch cases. 64. Owner-occupiers might therefore be willing to accept compensation inkind: "a key for a key", if a solution acceptable to them could be devised. One possibility is that the municipality construct, under the project, one or two new residential apartment buildings nearby for relocation. Alternatively, the project might enable the municipality to acquire and upgrade one or more existing and suitably located buildings. 65. The SA will determine the number o f affected owner-occupiers in the specific project area concerned and their potential interest insuch a solution. 66. This entitlement offer should be available only to the current owners so electing at the time o fthe census. Owners wishing to sell their property in order to move elsewhere should elect for monetary compensation. 67. For owner-occupiers electing monetary compensation, the principles o f Amman Development Corridor Project compensation would be followed: the owner o f a dwelling shall be'compensated for that dwelling at a rate defined by a Valuation Committee. An owner-occupier shall be compensated at least equivalent to replacement cost plus 15%, which takes into account the costs o f relocation, transfer o f services, loss o f time and convenience incurred. Any associated private infrastructure shall be acquired at full replacement cost. However, MOTAsuggests intable 5.1 the compensation packages. 68. The RAP should flag and document specific cases o f complexity, for example mortgage, subdivision o f ownership rights, or unresolved inheritance issues. This documentation will lay the foundation for monitoring to ensure satisfactory outcomes, which given the small numbers is likely to be on a case-by case basis. Landlordabsentee residential owner 69. The owner o f the building would receive monetary compensation at replacement cost, at a rate defined by the Valuation Committee and negotiated with the owner. Where the property is a source o f rental income for the owner, the owner would provide evidence to the valuation committee insupport o f a claim or innegotiation. Residential Renters 70. The compensation o fresidential renters requires careful attention for several reasons: - The range o f tenancy arrangements and situations is broader and more complex than that o f owner-occupiers, ranging fi-om well-established long term renters who may have invested in improvements, to recent or informal renters, or renters-at-will without formal agreements. - The compensation rates defined in the LAL o f 5% for purposes other than industrial or commercial do not fully comply with World Bank guidelines and further project specific 162 compensation procedures might be required to increase such compensation to the standards required.. - Renters may easily find themselves in a weak position to negotiate new agreements, and may face cost increases inrelocation (deposits, new service accounts). - Any renter with a legally valid tenancy is entitled to a portion of compensation payable as provided for inthe Laws o f Jordan, and the terms o f the tenancy. However, renters with less education or financial means may find it more difficult to establish their losses and negotiate compensation. 71. Inthe case of Jerash, ifthe re-housing of owner-occupiers is adopted, one solution would be for the municipality to retain ownership o f some portion of the buildings to rent or lease at appropnate terms to renters required to move. 72. The variable situation o f renters in relation to losses, entitlements and outcomes requires a clear commitment by the municipality to ensure that they do not lose from the process, and also for MOTAto follow up and report on outcomes and to work with the municipalities concerned to ensure satisfactory outcomes on a case-by-case basis. The presence o f a knowledgeable NGO representative on the Valuation Committee could assist inthis respect. Business Owner-Occupiers who relocate 73. The first group or expropriated owner-occupiers who are required to relocate, incurs three major groups o f direct costs: (a) they lose their assets: premises and facilities; (b) they incur relocation costs o f moving and starting up in a new place; and (c) they lose income from temporary business closure during the transition period. As a direct result o f relocation, this group may also incur extra costs in other less easily-measured ways: for example, proximity to their own residences, local goodwill and custom, proximity o f workers and supp1ie1-s.~~ All these costs mustbe adequately assessedand compensated. 74. Together with residential owner-occupiers, ensuring a successful or satisfactory outcome for this category o f affected persons poses a relatively greater challenge. Therefore, starting with the §A, the project will ensure a high quality o f documentation, consultation, information and technical advice to affected persons, and involvement o f the municipalities, whose cooperation, sympathetic treatment and support will be essential to success. Identification o f appropriate new serviced sites to accept the relocated enterprises is a priority. Municipalities have a natural incentive to work with the project for a successful outcome o fthis matter. 75. A basic distinction is made between two groups o f expropriated business owner-occupiers: (a) those expropriated business owner-occupiers who must permanently relocate off-site, because the nature o f their business is inappropriate to the planned use o f the site56; and (b) those owner-occupiers who will return to the original site after upgrading works are complete, either to their previous premises or to equivalent or better premises on the same site. 76. The following five principles, adapted from the Amman Development Corridor Project RAP, will apply inthis project to owner-occupiers o f business premises required to relocate off-site: - compensationsufficienttoenablethemtoobtainlandandpropertyequivalentorbetterfor the purpose than that expropriated (Replacement Cost - Onrequest, assistance inidentifying suitable sites; - The new premises are operational and generating revenue streams prior to the closure and demolition o f the existing facility; 55Only direct impactsare covered. See section 5.2.2.aboveon the exclusion of indirect impacts. For example, light industries that create noise, pollution or other nuisanceunsuitedto the historic tourist vocation of that part of the city. 163 - Financial compensation is sufficient to maintain current income levels through a reasonable transition period; - All government fees, taxes and other charges incurred inthe relocation ofthe actiwty are met by the Project. Business Owner-Occupiers remaining in situ 77. By contrast, expropriated owner-occupiers who will returnto their original or equivalent premises after completion o f upgrading works, pose a much simple challenge. Receiving title for a new asset, such enterprises incur losses through: (a) loss o f income when businesses are required to close during works; (b) incidental costs such as temporary storage o f equipment and supplies; and (c) costs o f reinstallation, fixtures etc. innew premises. 78. There are also many opportunities to greatly reduce or eliminate these costs through organizing the local business community for mutual assistance inconcert with phasing the contractor's works, so that for example while works are in progress, businesses temporarily relocate to another side o f the street or square, relying on mutual support. The justification for this approach i s that the project is creating a community asset, from which the prime beneficiaries are the local business community themselves, through improved asset values and operating environment. 79. Although PAPSfrom this second group are expropriated5', they are significant net gainers from the outcome. They would receive free o f charge equivalent title to at least equivalent property after redevelopment. Therefore, other than the necessary costs o f reinstallation, the question of monetary compensation should not arise, unless the costs o f lost business are highand cannot be mitigated through the meansjust described; LandlordAbsentee owner of businesspremises58:As for Business Owner-Occupiers remaining insitu. Business renter 80. In contrast to residential renters, the rights o f industrial and commercial renters appear to be adequately provided for inJordanian law. Renters would therefore be entitled to compensation for loss o f premises and facilities, costs o f relocation (including the incremental costs of securing a new lease), and loss o f income during the relocation period. 81. Inthe case of business renters who have the opportunity to secure agreements to continue their business in the same general location after completion o f upgrading works, these costs might be minimized inthe same ways as described for business owners. 82. As with residential renters, the variable situation o f commercial renters in relation to losses, entitlements and outcomes requires a clear commitment by the municipality to ensure that they do not lose from the process, and also for MOTAto follow up, report and work with the municipalities concerned to ensure satisfactory outcomes on a case-by-case basis. Typical Entitlement Package 83. Table 3 below presents a summary Entitlement Matrix. " Theyfulfillthecriterionof"involuntaryresettlement"byhavingnochoicetowithholdtheirconsent. '' In principle, there couldbe the opportunity to offer owners compensationthrough shares in the redevelopedproperty, in lieu of monetary Compensation. However, such a course would require detailed advancedinstitutional and financial arrangements inplaceprior to expropriation. This is unlikely to bethe case. Therefore, this solution will notbeput forwardinthis project. 164 I H. INSTITUTIONAL ARRANGEMENTS 84. The RPF is not itself primarily an operational or implementation document, but the framework for a series o f operations to be described in individual plans o f expropriation and compensation called Resettlement Action Plans (RAPS) or Abbreviated Resettlement Action Plans (ARAP). This section describes the institutional arrangements for the implementation o f Raps, includingmonitoring, evaluation and reporting. 85. The small scale and relatively simple nature o f most expropriations does not warrant the more complex special institutional arrangements that may be required in larger or more complex projects and this project will rely on mechanisms and institutions already inplace. These are presented below. MOTA-TDD:PreparationofRapsand OverallImplementation 86. MOTA-TDDwill be: - Responsible for preparing and disclosing the Raps in-country and submitting to the Bank - Responsible for ensuring the overall implementation o f the Raps in a manner satisfactory to the Bank, including ensuring financial arrangements monitoring and reporting on this implementation. - Responsible for liaising with the different institutions and persons who have roles in the implementation o f the Raps. Municipalities 87. The municipal councils will be responsible for : - identifying all affected persons, advising them o f their rights, - locally disclosing the Raps, and following up all matters o f public and NGO concern with regard to any complaints which may arise duringthe implementation process. - all direct contacts with affected persons either individually or ingroups. - implementingtheRPF/RAF'/ARAP CommunityLiaison Officer (CLO) 88. The four municipalities will appoint a CLO whose main responsibility is to meet and review with any person affected by the project, listen to their complaints, comments and suggestions, document such issue and maintain all doc council DepartmentofLandand Surveys @LS) 89. The D L S will be responsible for: - all legal matters in relation to expropriation, including gazetting, valuation, negotiated settlements, (regional directors are represented on the valuation committee), transfer o f title and issuance o f certificate o f compensation. - paying financial compensation to PAP after approval from the Ministry o f Finance. MinistryofFinance(MoF) 90. M o F will be responsible o f approving valuations, negotiated settlements and budgetary allocations for payment o f awards. Valuation Committee(VC) 91. The V C will undertake the valuation and approve the initial offers o f compensation made to entitled persons. 167 CompensationReviewBoard(CRB) 92. Jordanian expropriation procedures do not provide for a higher level review o f first stage appeals, which are therefore directed to the courts. Therefore, a Compensation Review Board (CRB) (established under Temporary Law 65 o f 2003, as an Amendment to Law 12 o f 1987), to act as the higher level body o f first appeal is to be established with membership consisting o f a judge, a member o f the DLS, and any other public sector figure. The CRB has the powers to review compensation awards and make adjustments; as well as wider, dispute-resolution capabilities. It has the power to draw on external professional (public and private sector), and legal advice, as required to assist in reviews. It also has the power to refer to the Project Designer for technical problems, which may be solved by minor modifications on the project design. 93. The CRB may also serve to resolve disputes and gnevances including matters o f disputed ownership. Given the small scale o f expropriations in CHTUD, it i s proposed that MOTA-TDDrequest them also to handle inthe course of their duties any appeals that might arise. Agency Role andResponsibilities Summary - 94. A summary of the agency roles andresponsibilities is shown inTable 4 bellow. Table 4: Role and Responsibilities of Aeencies inRPF/RAPImplementation 5. Adjudicate on appeal against landacquisitionvalues to CRB CRB Adjudicate on merit o f application for legal aid Ministryof Finance Certify compensation agreements and transfer hndsto PAPS courts Final say in disputes regarding ownership rights and compensation External Monitoring Ensurecomdiance with fundingagreements ImplementationandMonitoringProgramCosts 95. The direct costs o f administering the Raps are quite modest and will be met from project budget (MOTAproject management); municipal budgets (project management) and the normal operating budgets o f the other departments concerned (DLS, MoF), since these matters fall within their designated responsibilities. The estimate o f costs associated with actual project land acquisition and compensation requirements is provided in Section J. 168 I. RAPIMPLEMENTATION PROGRAM 96. This section outlines the implementation program for the preparation, approval and implementation o f the RPF through the operational instruments of the RAP. In cases where the RAP has already beenprepared, the steps will continue at the appropriate point. RAP Preparation 97. Any single group o f expropriations comprising a single sub-project requires the preparation o f a Resettlement Action Plan acceptable to the Bank. The content required in these documents i s presented inAnnex B [OP4.12 Annex refs]. The mainsteps are: 98. Scopingand selection of instrument. An inibal scoping is carried out to determine the location o f the appropriate sub-project or activity requiring expropriation, the extent o f the impact, key issues and possible ways to minimize impact. Where the impacts are minor68,25 percent, less than 200 persons are involved and no relocation or expropriation an Abbreviated Resettlement Action Plan is prepared, which does not require a social assessment. 99. Preliminary Notification, Census, and Consultatiodinformation (including social assessment where appropriate.) M o T A and the municipality concerned inform potentially displaced persons at an early stage about the resettlement aspects o f the project and takes their views into account in project design. A cut o f f date i s established and a census conducted on that date to determine eligible persons. 100. Disclosureand revision. The draft plan is disclosed locally and by M o T A and the Bank, revised inlight o fcomments received and again disclosed. Notification 101. Once it i s confirmed that the project will go ahead, D L S undertakes notification procedures through national newspapers in line with statutory procedures. This includes a list o f plot numbers and owners. Affected persons have 15 days to appeal against the acquisition o f their land. While this is a limited time, it is reasonable given that people will have been informedduring the consultation/census/SA process. The municipality informs people about the valuation process. Valuation and Negotiation 102. The valuation committee (VC) is constituted at municipal level with support o f MOTA-TDD,and prepares a compensation package in respect o f the entitled persons in each property to be expropriated. Affected persons may appeal the valuation within 28 days from receipt of notification o f the valuation. A period o f 90 complete days from notification i s availed to all for negotiation. At the conclusion o f this process one o f three situations applies: 103. N o Appeal. Ifn o intent to appeal is received by the end o f the 28 days period the affected person i s requested to sign a document agreeing to the compensation offer. This final agreement is forwarded for official approval and implementation. 104. Appeal Lodged. Ifan appeal is lodged, municipalrepresentatives may seek to negotiate with the affected person for the remainder o f the 90 days to seek a compromise. Ifn o agreement is reached and ratified by the end o f 90 days, the case i s referred to the Compensation Review Board (CRB) [subject to their agreement to act inthis project]. An affected person may also request appeal to CRB without further negotiation. Though negotiations are done case-by-case, they are undertaken with regard to the Jordanian guidelines inplace. These seek to ensure appropriate and fair redress at acceptable cost. The criteria used by the Bank are less than 10 percent o f productive assets lost; AND no physical relocation AND less than 200 persons involved. 169 105. No Response. If the person concerned does not respond to the initial valuation and no further response i s obtained within the 90-day period, and provided that reasonable effort i s shown to have been made by the V C and the municipality to contact the person concerned, the draft compensation offer is referred to the CRB for approval. Inthis case letters o f notification o f approval o f the compensation will be served. 106. Inthe "no response" case, when compensation is awarded but the entitled person has not been identified, the funds allocated for this particular compensation will be retained within the Ministry o f Finance (MoF) in the project's name. The money will be covered within the annual budget for land acquisition held by the M o F for the CHTUD project, to be claimed by the person concerned on proof o f eligibility. Appeals and GrievancesRedress 107. Appeals o f four types may be made at the respective stage. 108. Appeal Against the Intent to Expropnate. Up to 15 days after publication o f the intent to acquire land inthe newspapers, written appeals against the project may be lodged with MoTA. All appeals will be acknowledged in writing and considered by M o T A together with the municipality concerned. Those that may be accommodated through design modificationwill be taken into account. 109. Appeals on the ground o f Disputed Ownership. Disputes may arise over who i s entitled to compensation. Lack o f formal documentation over the status o f a piece o f land or tenancy agreement may lead to such disputes, affecting RAP implementation. Insuch cases the further verification o f status by the Valuation Committee will be necessary. This may include a variety o f documentation: - Copies o f land titles, mortgage deeds, revenue receipts or other legal tender showing ownership Qftenancy; - In the case o f renter farmed or rented land, documentary evidence of the understanding between the landowner and the renter, ifavailable; and, - For proof o fresidence, voters list or any other official record. 110. The municipality will attempt to facilitate an agreement within the project framework, failing which the case will be referred to the CRB for resolution. However, the party has the right and may wish to appeal through court proceedings. Inthese cases the compensation process will proceed through to valuation irrespective o f the status o f the land. 111. Appeal against the Compensation Valuation. Appeals against assessed levels o f compensation will be heard by the CRB. Article 10 o f the Jordanian LAL states that failure to agree on levels o f compensation at this stage could lead to the matter being referred to the Courts. The CRB will review each case put to it and reach one o f three recommendations: (a) confirm the original offer; (b) propose a revised offer at the hearing; or (c) establish new guidelines for the development o f a revised offer to be developed under negotiation. 112. If agreement is still not reached under revised guidelines, the Municipality will confirm the details o f the last offer in writing to the person concerned and refer the matter back to the CRB. If the CRB do not wish to revise their offer, either party may refer the matter to the Courts. 113. Appeal to the Courts. Once referred to the Courts the acquisition process is taken out o f the hands o f project implementation. Thejudgment o f the court i s bindingon all parties. However, ifthe land to be acquired is not classed as directly affecting a residential unit, either by demolition or inmaking the property uninhabitable, the acquisition process will proceed on the basis o f the last valuation made by the CRB. Any changes on that compensation ordered by the Courts will be settled as required. 170 Completionof Expropriationand Compensation 114. On successful completion o f negotiations, the V C will provide each PAP with a Compensation Statement. The Statement will record the precise loss o f property (type, physical dimensions, and replacement value) or livelihood, state the compensation due for this loss to each property holder or household, and note eligibility for other compensatory program. Copies o f each Statement will also be sent to the Municipalities and MoTA. Ifthe PAP confirms the content o f the Statement and his acceptance o f the compensation offered, he/she will sign the Statement. 115. All cash payments will be made by cheque, made out in the name o f the PAP. Copies o f all records o f payments will be attached together with a copy o f the PAP'Snational identity document. Once the Compensation Statement i s countersigned by the PAP to confirm his receipt of the agreed compensation, it will be placed in a personal file containing the documentary record o f entire RAP process. One complete copy o f this file will be become the property o f the PAP and the original will be retained by M o T A for a period o f 5 years. Cases referred to the courts will be handled as per present due legal process. 116. For those PAPs who are unable for any reason (e.g. because they are overseas), to collect their cheques within a short period o f these being issued, compensation will be held within the allocation for land acquisition held by the M o F for MoTA, to await collection at the PAPs' convenience. CommencementofWorks 117. Where relocation o f residents, businesses and residential or commercial renters i s concerned, n o works may be undertaken that will require such relocation prior to receipt o f agreed compensation awards and sufficient time to secure alternative accommodation. This condition will be maintained through a project condition that the respective works contracts will not receive Bank no-objection until acceptable evidence is provided o f receipt o f suchpayment. The Bank would not withhold no objection in cases where only a small proportion o f a property i s expropriated that does not affect residence or the conduct o f business, or where community arrangements satisfactory to the Bank have been made to tide businesses over temporary cession during upgrading works, and that livelihoods are not thereby prejudiced, or where awards are tied up in lengthy court proceedings. Nevertheless, payment in full o f compensation i s a condition o f project completion. IndicativeTimeframe for RAPProcesses Completion of Payments 118. Once an agreement is reached, payments will be made according to individual schedules. It shall be a matter o f policy that compensation payments are completed prior to the start o f construction and this will only be varied inone o f three cases: - WhererequestedbyPAP; - Where substantial additional benefit can be demonstrated to accrue to the PAP; and, - Where land ownership rights remain in dispute. In this case, the compensation amount shall be retained by the Ministry o f Finance so that as soon as the dispute is resolved and ownership established, the owner may access the compensation without further litigation, hindrance or budgetary constraints at the project level or within the Government o f Jordan. 119. Payments due shall be made n o later than 30 days after completion o f the Certificate o f Agreement. Programs for employment, training and land swaps shall be established on a case-by-case basis. 120. Ifpayments are delayed or promises or other agreements entered into are not honoredwithin 30 days the PAP may appeal to the Municipality to intercede on their behalf. If, however, the issue is more fundamental and concerns a legal dispute over whether the terms o f the compensation agreement have been met the PAP may appeal to the CRB through the Municipality for a case review. 171 Overall CHTUDRaps Program 121. A provisional minimumtime frame for each ofthe pnncipal stage o fthe R P F W is summarized inTable 5 below: Table 5: Indicative Project Time Frame 122. The appeals framework associated with the RPF/RAPis summarized inTable 6 below: Table 6: Appeals Framework Inventory and-Notification None A m e a l Aeainst Acauisition 15 davs fromNotification N o fixed Deriod Valuation Appeal Against CompensationValuation 28 days fromNotification Within 14days of appeal Negotiation I Atmeal to Courts I As Der due legalDrocess I I RAPMonitoring 123. - Three forms o f RAP monitoring are required: Internal Monitoring o f the Performance o f the LARP,with respect to the effectiveness of the processes established and ultimately therein, the disbursal o f compensation; - Independent Monitoring o f the Processes, and the Compensation; and, - ExternalMonitoring. Internal Monitoring 124. Internal monitoring o f LARP implementation will be undertaken by both M o T A and the Municipalities. On the one hand, M o T A will monitor the progress of LARP implementation against predetermined performance targets. It will also facilitate the work o f the external and independent monitors through effective record keeping and the preparation o f periodic Project Progress Reports. On the other hand, the Municipalities will provide early warning o f RAP-related project difficulties and concerns and will ensure affected persons concerns are adequately addressed by the project. Both will jointly ensure payments are made to the correct individual and as in the compensation agreement, and other entitlements are also made available as agreed. Bank monitoring 125. The Bank supervision missions will regularly and systematically review the progress o f R A P implementation and reference their findings inaide-memoirs. Independent Mid-Term/End of Project Evaluation 126. An independent review o f implementationprogress and any problems will be commissioned prior to mid-termreview and discussed at it. This review will undertake field visits and will hold consultations with project-affected persons in order to determine their experiences, document problems, solutions and any unresolved issues, with recommendations. Action taken on this review shall constitute a component o f the project Implementation Completion Report, as required by Bank procedures. The Bank does not consider a project fully complete untilsatisfactory RAP outcomes are registered. 172 Reporting 127. MOTAwill report quarterly on the progress o f RAPimplementation and new RAPpreparation as appropriate, based on regular inputs from TDD and from the municipalities concerned. These reports shall contain a briefnarrative together with a current and a cumulative account o f the following: - Summary o f RAP Activities under the project; - Progress on Land Acquisition o f Land and ResidentialBuildings; - Progress on Acquisition o f Commercial or other Non-Residential Buildings; - Progress on the Disbursement o f Compensation to PAPS; a) Progress on constructionirehabilitation o f alternative residential buildings, where appropriate; b) Progress on relocationofresidents and businesses; c) Issues Arising on Compensation Agreement and Disbursement, including: appeals and complaints, community liaison and public opinion, vulnerable groups, and other risks and implementation issues which may arise; d) Progress onnew Raps inpreparation. J. RESETTLEMENTCOSTSAND RISKS 128. This section summarizes the costs and risks ofimplementing the RPF and Raps for the C H T U D project. The costs presented are the costs to the project for compensation for expropriation. And at this stage are notional and purely for indicative purposes. The individualRaps will contain more precise cost estimates. There follows a summary o f the mainprocess and outcome risks and mitigating measures. . RAPEstimatedCosts 129. Table 7 below provides an itemized list o f project RAP estimated costs. Table 7: Overall CHTUD RAP Compensations(JD) (JD 1=US$1.41) compensationCosts Madabam Jerash Karak" Salt Total N o u n Costs Land acquisition (Built-upland) ................................................................................................................... - 1,226,651 337,100 - - 200,000......1,763,751 ........ ". ....................................... - 1,000,000 ~ ~ Wadi land acquisition (vacant.......................................................................................................... land inJerash) 1,000,000 " ........................................................ .............................................................................................................................................................. Replacementof residential buildings - 52,000 .................................................................. 458,170 - 200,000 710,170 ... ........ Residential relocation 26,080 30,000 - 59,480 " ............................. ........................ Expropriationof commercial buildings ...................................................................................... ___.................. -- .............. ._............................ 3,400 ........... 184,950 40,725 - 225,675 ^................................ _ .......................................................... ........... . . . . commercial.............................................. losses relocation andbusiness ............................................................... - ................................................ ~ " 44,190 28,320 ......". ................................................................. - 72,510 - ~ Relocation of Government Services 270,000 - 50,000 320,000 Total 270,000 2,511,191 890,395 80,000 400,000 4,151,586 69 Saraya building (relocation of the Police Center) 70 Karak bus terminal (phase I) JD 475,195 and Karak heritage trail (phase 11) JD 415,200 173 RAPRisks 130. Table 8 belowpresentsthe mainrisks andmitigatingmeasuresinimplementingthe Raps. Table 8: Risks and MitigationRelated to RAPImplementation . Potential Risk 3 Interestsofless 1 Insufficient or poorly Qualified and experiencedMOTA-TDDstaff will insurethat influentialaffected distributedcompensation. the persons will receive their rights andtheir compensation persons possible involvementof local NGO. insufficiently .. . represented 2 Influentialowners Compensation costs are MOTA-TDDwill support the VC decisions. ratchet compensation unacceptablyhigh claims Ministry of Financerepresentationand approval of final Special interestsattempt to awards delay project for particular advantage. ...Referenceto courts does not hold up works Good information and awarenessdemonstratespublic and communitybenefits of project, ensures popular support and mediasympathy 0 Some affected . Delays in disbursement of Media notices will be placed requestingPAP nomineesto personsslow to compensationmay impede come forward. claim compensation projectprogress. .. (absentee owners Municipal team andMoTA staff (possiblywith NGO etc.) support) will undertake outreach visits & other measuresto ensure all members of community are contacted. 0 Delaysinavailability. Poor VC/CRB performance . Boththe VC and the CRB are existing StandingComttees, o f compensation in couldresult indelays inland not especially established for this project. kind (residential, acquisition and payment of commercial) owing compensationto PAPs. MOTA-TDDwill insurethat VC and CRB are composed of to contractual and - senior and experiencedpersonnel. management issues Downstream, . commencement of The work of these committees is standardpractice in Jordan; construction would be their proceduresare well understoodand are functioning. delayed . They have aproventrack record. MOTA-TDDwill monitor the performanceof the VC members to insureno conflict of interest 0 Delaysinfunds . Delaysindisbursementof . Clear and specific agreements with Ministry of Finance, in allocation for compensationwould cause LegalAgreement and formally confirmed at negotiations. compensation . hardshipto affected persons Bank to confirm availability of funds by effectiveness. Project works would be held . Budget for resettlement plan already allocated by up becauseof incomplete government. ... resettlement implementation 0 Particularconcerns . Benefits capturedby male FemalePAPSwill be separatelyidentified & contacted, close of female PAPs and relatives attention in SA process. other vulnerable . personsnot Not addressingfemale PAPs MoTA andNGOwill monitor these issues andtake addressed issues, or addressingthem appropriate actions inadequately, would leave a vulnerable andalready Strong emphasis inMunicipal Revitalization Pact . possiblyeconomically implementation onbenefitsto all communitymembers with disadvantagedgroup further out prejudice. adverselyimpacted Compensationwill be paidto eligible women intheir own name. 174 Annex 11: Project Preparation and Supervision JORDAN: CULTURALHERITAGE,TOURISM AND URBANDEVELOPMENTPROJECT Planned Actual PCN Review September 1,2005 September 1,2005 Appraisal April 3,2006 Aigust 6,2006 Negotiations M a y 1,2006 December 18,2006 BoardRVP Approval June 6,2006 January 30,2007 Planned Date o f Mid-TermReview October 31,2009 Planned Closing Date SeDtember 30.2012 Key institutionsresponsiblefor preparation of the project: Ministryo f Tourism and Antiquities Bank staff and consultantswho worked on the project included: Name Title Unit MohammedD.E.Feghoul Lead Municipal Engineer/TTL MNSSD RosannaNitti Sr. Urban Specialist MNSSD Kingsley Robotham Lead Urban Planner Consultant Alexander McPhail Lead Water and Sanitation Specialist (Economist) AFTU2 Ibrahim Dajani Sr. Operations Officer MNSSD Ekaterina K Massey Urban Specialist Consultant JohnKeith Rennie Sr. Social Development Specialist Consultant Knut Opsal Sr. Social Development Specialist MNSSD Mutasem ElFade1 Environmental Specialist Consultant Diana El-Masri Financial Management Specialist MNAFM Lina Fares Procurement Specialist MNAPR Yarissa Lyngdoh Sommer Knowledge Management Officer WBIFP Sara Gonzalez Flavell Sr. Legal Counsel LEGMS Hyacinth Brown Sr. Finance Officer LOAG2 KarimVioleta E.Gigler Sr. Program Assistant MNSSD Peer Reviewers Maryse Gautier Manager, Portfolio and Operations EACPF Chantal Reliquet Sr. Urban Specialist AFTU2 Lawrence M.Hannah Lead Economist TUDDR Roberto Chavez Lead Urban becialist LSCFW Bank funds expended to date on project preparation: 1. Bankresources US$ 367,65 1 2. Trust funds: US$l.050,000 Total: US$1,417,65 1 EstimatedApproval and Supervision costs: Remaining costs to approval: None Estimated annual supervision cost: US$120,000 175 Annex 12: Documentsin the Project File JORDAN:CULTURALHERITAGE,TOURISMAND URBANDEVELOPMENTPROJECT A. Project Implementation Plan - ProjectImplementationPlan(December 18,2006) B. Bank Staff Assessments - FinancialAssessment (May2006) -ProcurementAssessment (May2006) - SocialAssessment(September 2005) C. Other 1. Environmental Assessment and Environmental ManagementPlan (November 30,2006) 2. Resettlement Policy Framework and Resettlement Action Plans for Jerash, Karak and Salt (November 30,2006) 3. Karak Feasibility Study (Dar A1Handasah, 2000) 4. Jerash Feasinbility Study (Scott WilsonKirkpatrick and Co.Ltd, 2003) 5. MadabaFeasibilityStudy (Joint venture LtlfthanTa- EM-SIGMA,2004) 6. Ajloun Master Plan Study (Joint Venture G and G UTTA (Turkey) inassociation with Tzbah, Turath andJordan RzverFoundation,2004) 7. Petra Design Development Report (December 2004): Edward Culinan Architects, Bitar Consultants, and Land Design Studio. 8. Land and Survey in Madaba, Karak, and Jerash: conducted by the C C Consultants /June- 2005; It contains the following: (a) Main Report, containing general description of physical conditions, including both general and some more specific recommendations, illustrated by a set o f drawings; (b) Set o f Drawings containing the illustration plates o f the report in addition to the original detailed survey drawings (1:2000, 1:500); and (c) Executive Summary. 9. Secondary Cities Revitalization Study: prepared by Cotecno with ABT Alchemia, CDG, and MGA/ July- 2005. It contains the following: - General-AnnexA Legalframeworkandsuggestedbestpractices - - General-AnnexB Analysis oftheMunicipalSector - - ConsolidatedReport - Karak:Cityrevitalizationprogram, MainReport andAnnexes (1 Detaileddescriptionofthe city revitalization program; 2 Social assessment; 3 Economic Profile; 4. Environmental Assessment; 5 Municipal organization, management and finance; 6 Economic Analysis; 7 Financial analysis; A Historic Core Regulation; B City Revitalization Pact; C Proposal for public-private partnership). -Jerash: Cityrevitalizationprogram, MainReport andAnnexes (1Detaileddescriptionofthe city revitalization program; 2 Social assessment; 3 Economic Profile; 4. Environmental Assessment; 5 Municipal organization, management and finance; 6 Economic Analysis; 7 Financial analysis; A Historic Core Regulation; B City Revitalization Pact; C Proposal for public-private partnership). 176 - Salt: Cityrevitalizationprogram, MainReportandAnnexes (1Detaileddescriptionofthecity revitalization program; 2 Social assessment; 3 Economic Profile; 4 Environmental Assessment; 5 Municipal organization, management and finance; 6 Economic Analysis; 7 Financial analysis; A Historic Core Regulation; B City Revitalization Pact; C Proposal for public-private partnership). - Madaba: Cityrevitalizationprogram, MainReportandAnnexes (1Detaileddescriptionofthe city revitalization program; 2 Social assessment; 3 Economic Profile; 4. Environmental Assessment; 5 Municipal organization, management and finance; 6 Economic Analysis; 7 Financial analysis; A Historic Core Regulation; B City Revitalization Pact; C Proposal for public-private partnership). 10. Mazdab SarayabuildingArchitectural Survey: prepared by Sigma - consulting engineer 11. Preparation of Urban Generation and Tourism Development Plans, Programs and Action Projects for the City of Madaba: prepared by Lufthansa Consulting, Lahmeyer ERM International, Sigma- consulting engineer 12. Street Rehabilitation and Furnishing, Landscaping and Building Surveys for the Historic Cities of Jerash, Karak and Madaba: prepared by Technital-Dar A1 O m a n Association: Concept Design Report, Set o f Drawings, Draft (Madaba, Jerash, Karak); Traffic and Parking management Plan, (Madaba, Jerash, Karak); Pavement Assessment Report (Madaba, Jerash, Karak). 13. Urban-Architecture Design and Detailed Engineering Study Covering Selected Areas: prepared by Bitar Consultants Architects, Engineering, Project managers, & Edward Cullinan Architects & GHK. 177 Annex 13: StatementofLoansand Credits JORDAN: CULTURALHERITAGE,TOURISMAND URBANDEVELOPMENTPROJECT Data as o f January 4,2007 Statementof lBRD1lDA andGrantsPorlfoiio Amount in US DollarsMillions JORDAN DifferenceBetween Expectedand Actual OriainalAmount in US$ Millions Disbursements ' ProjectID ProjectName FiscalYear IBRD GRANT Cancel. Undisb. Orig. F m Rev'd PO81505 JO-AMMANDEVELOPMENTCORRIDOR 2004 38.00 31.90 18.28 PO76961 Hort. Exports Promotion&Tech. Transfer 2002 5.00 2.61 2.61 PO69847 JO-Conservationof MedicinallHerbalPI 2003 5.00 3.67 2.07 PO75829 JO-EducationReformfor KnowledgeEcon.1 2003 120.00 55.88 22.18 PO69326 JO-HIGHER EDUCATIONDEVELOPMENT 2000 34.70 4.98 4.98 3.40 PO70958 JO-REGIONAL& LOCAL DEVELOPMENT 2007 20.00 20.00 PO49706 JO: ODS PHASEOUTII 1997 5.00 0.88 0.38 0.24 PO91787 JO: PublicSector ReformCapacityBldg. 2005 15.00 14.43 11.17 Total 232.70 10.00 134.34 61.67 3.65 Statement of IFC's Held and Disbursed Portfolio as of November 30, 2006 Amounts in US Dollar Millions JORDAN Equity Quasi-Loan FY Approval Outstanding Outstanding and Quasi- IFC Equity IFC 1967/ 1990119931199512003 Ai-Hikma 9.08 0.00 0.00 9.06 0.00 0.00 1997 BTC 1.34 0.00 0.00 1.34 0.00 0.00 2001 Boscan Jordan 1.50 0.00 0.00 1.50 0.00 0.00 2006 CTI 15.00 0.00 0.00 15.00 0.00 0.00 2006 Hikma UK 0.00 0.85 0.00 0.00 0.85 0.00 1999 MAKO 0.00 0.25 0.00 0.00 0.00 0.00 2002 MEREN 4.40 0.60 0.00 4.40 0.60 0.00 2000 SGBJ 0 00 2 09 0 00 0 00 1 06 0 00 1996 Zara 0 00 2 97 0 00 0 00 2 97 0 00 Total Portfolio: 31.32 6.75 0.00 31.32 5.47 0.00 17% Annex 14: Country at a Glance JORDAN: CULTURALHERITAGE, TOURISMAND URBANDEVELOPMENTPROJECT M. East Lower- POVERMand SOCIAL & North middle- Jordan Africa income Developmentdiamond' 2005 Population, mid-year(millions) 5.4 305 2,475 GNI per capita (Atlas method, US$) 2,500 2,241 1,918 Life expectancy T GNI (Atlas method, US$ billions) 13.5 685 4,747 Average annual growth, 199945 Population (%) 2.5 1.9 1.0 Labor force (%) 3.9 3.5 1.4 GNI Gross per prima0 Most recent estimate (latest year available, 199945) capita enrollmenl Poverty (% of population belownationalpovertyline) Urban population (% of totalpopulation) 82 57 50 Life expectancyat birth (years) 72 69 70 Infant mortality(per 1,000live births) 23 44 33 Child malnutrition (% ofchildren under 5) 4 13 12 Access to improved water source Access to an improvedwater source (% ofpopulation) 97 89 62 Literacy (% ofpopulationage 75+) 90 72 89 - Gross primaw enrollment I%of school-agepopulation) 98 103 114 Jordan Male 98 106 115 Lower-middle-incomegroup ~ Female 99 100 113 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1985 1995 2004 2005 Economic ratios. GDP (US$ billions) 5.1 6.7 11.5 12.9 Gross capital formationiGDP 20.5 29.6 23.9 26.5 Exportsof goods and servicesiGDP 38.7 51.7 47.6 50.5 Trade Gross domestic savingsiGDP -15.2 8.4 -2.2 -7.4 Gross national savingsiGDP 13.7 25.8 21.4 15.9 Current account balanceiGDP -4.9 -3.8 -2.6 -10.4 InterestpaymentsiGDP 3.6 3.1 1.3 Total debffGDP 77.0 113.9 71.0 Total debt service/exports 16.7 12.4 8.7 Presentvalue of debVGDP 66.4 J. Presentvalue of debffexports 94.9 Indebtedness 1985-95 199545 2004 2005 2005-09 (average annual growth) - GDP 2.2 4.5 7.7 7.2 6.1 Jordan GDP per capita -2.7 2.0 4.8 4.5 3.6 Lower-middle-incomegroup Exportsof goods and services 5.5 3.5 13.0 8.7 8.7 STRUCTURE of the ECONOMY 1985 1995 2004 2005 (% of GDP) Growth of capital and GDP (X) Agriculture 5.5 4.3 2.8 2.2 30T Industry 25.8 28.9 28.9 28.9 20 Manufacturing 11.5 15.1 18.8 19.2 10 Services 68.7 66.8 60.4 68.8 0 Householdfinal consumptionexpenditure 88.8 74.4 92.7 91.4 .10 General gov't final consumptionexpenditure 26.3 17.1 15.5 16.0 - Imports of goods and services 74.4 72.9 79.7 84.4 I GCF *GDP 1985.95 199545 2004 2005 (average annual growth) Growth of exports and imports (Oh) I Agriculture 7.0 1.8 2.2 3.7 30 Industry 3.3 6.5 13.3 9.8 20 Manufacturing 4.9 9.0 16.4 11.8 Services 0.7 4.6 6.1 13.0 10 Householdfinal consumptionexpenditure 0.7 6.6 17.7 4.6 0 Generalgov't final consumptionexpenditure -4.2 3.5 -0.1 9.5 -io Gross capital formation 6.2 2.1 25.4 15.8 ---ExpoT1s -0-lrnports Importsof goods and services ~ 2.0 5.0 27 4 8.1 I Note: 2005 data are preliminaryestimates. This table was producedfrom the Development Economics LDB database. * The diamonds show four key indicators in the country (in bold) comparedwith its income-groupaverage. If data are missing, the diamond will be inwmDlete. 179 PRICES and GOVERNMENTFINANCE 1985 1995 2004 2005 Domestic prices Inflation (%) I (% change) 8 - Consumer prices 3.0 2.4 3.4 3.5 ImplicitGDP deflator -1.4 1.9 5.3 4.2 Government finance (% of GDP, includes current grants) Current revenue 40.4 36.3 25.6 34.8 W 01 02 03 M Current budget balance 13.6 8.5 -2.1 1.7 I Overall surplusldeficit 2.8 1.3 -10.1 -7 4 -GDPdeflator +CPI 1 TRADE 1985 1995 2004 2005 (US$miiiionsj Export and import levels (US$ mill.) Total exports (fob) 788 1,783 3,883 4,767 Food and live animals 110 142 370 425 15'wo T Phosphates 167 151 207 228 Manufactures 282 704 1,368 1.482 1o.wo Total imports (ci0 2,723 3,695 8,239 9,971 Food 445 598 1,061 902 5,000 Fuel and energy 491 480 1,565 2,513 Capital goods 510 906 1,432 1,772 1 0 Export price index (2000=100) I 85 110 114 126 89 W O f 02 03 M a5 Import price index (2000=100) 98 95 130 144 i Exports rn imports I Terms of trade (2000=100) 87 116 a7 88 BALANCE of PAYMENTS 1985 1995 2004 2005 (US$ millions) Current account balance to GDP (%) I Exportsof goods and sewices 1,974 3,481 5,479 6,498 Importsof goods and services 3,723 4,904 9,182 10,858 Resource balance -1,748 -1,423 -3,703 -4.360 Net income , -89 -279 190 402 Net currenttransfers 1,584 1,445 3.216 2,620 Current account balance -253 -257 -297 -1,338 Financingitems (net) 179 534 378 1,363 Changesin net reserves 75 -278 -81 -25 Memo: Reservesincludinggold (US$millions) 613 2,169 5,450 5,396 Conversionrate (DEC,/ocai/US$) 0.4 0.7 0.7 0.7 EXTERNAL DEBT and RESOURCE FLOWS 1985 1995 2004 2005 (US$ miiiions) 1 Composition of 2004 debt (US$ mill.) Total debt outstandingand disbursed 3,944 7,661 8,175 IBRD 168 736 971 925 IDA 82 69 47 45 I G 604 A 971 Total debt service 516 600 700 IBRD 21 125 111 106 IDA 2 3 3 3 Compositionof net resourceflows Officialgrants 453 219 495 Official creditors 220 481 -193 Private creditors 190 -201 -16 Foreigndirect investment (net inflows) 25 13 620 Portfolio equity (net inflows) 0 0 -120 World Bank program Commitments 97 140 38 A IBRD E Bilateral Disbursements 64 158 29 48 B IDA D- Other multilateral F Private -- Principal repayments 10 79 88 76 C IMF --- G Short-term ~ Net flows 54 79 -59 -28 Interestpayments 12 49 26 33 Net transfers 42 31 -85 -61 Note: This table was producedFrom the Development EconomicsLDB database. atiwo6 180 MAP SECTION IBRD 35216 35°E 36°E 37°E 38°E 39°E 34°N 34°N Sea JORDAN Mediterranean 33°N 33°N To To Zefat Damascus Lake To Tiberias Baghdad Um Qais Um Qais IrbidIrbid IRBIDIRBID Ar Ruwayshid Ar Ruwayshid AJLOUN AjlounAjloun Al Mafrak Al Mafrak JERASH reviR M A F R A K JerashJerash Jordan ArdaArda Mahattat al Halif Mahattat al Halif BALQA BALQA AzAz 32°N Salt ZarkaZarka 32°N AMMANAMMAN ZARKAZARKA Azraq ash Azraq ash ShishanShishan - - MadabaMadaba To Jerusalem MADABAMADABA A M M A N DeadDead SeaSea To Al Mazra'ah Al Mazra'ah Al Jawf KarakKarak Al Qatranah Al Qatranah - To Beersheba K A R A K As Safi As Safi - - 31°N A r 31°N d TAFILAH FILAH a s At Tafilah At afilah S a AlAl w Ba'irBa'ir - a RashadiyahRashadiyah - a n Ash Shawbak Ash Shawbak M A ' A N PetraPetra 0 0 50 Kilometers Al Jafr Al Jafr Ma'anMa'an 0 25 50 Miles 38°E 39°E 30°N Ra'sanNaqbRa' anNaqb 30°N A Q A B A JORDAN AdDisiAdDisi CULTURAL HERITAGE, TOURISM To AND URBAN DEVELOPMENT Nuweiba AqabaAqaba Jabal Ram Jabal Ram (P081823) (1,734 m) (1,734 m) GulfofAqaba PROJECT CITIES AlMudawwarahAlMudawwarah This map was produced by SELECTED CITIES AND TOWNS the Map Design Unit of The World Bank. The boundaries, To GOVERNORATE CAPITALS colors, denominations and Al B'ir any other information shown NATIONAL CAPITAL on this map do not imply, on 29°N the part of The World Bank RIVERS Group, any judgment on the legal status of any territory, To MAIN ROADS Al B'ir or any endorsement or a c c e p t a n c e o f s u c h RAILROADS boundaries. GOVERNORATE BOUNDARIES 35°E 36°E 37°E INTERNATIONAL BOUNDARIES DECEMBER 2006