Page 1 PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB2752 Project Name National Emergency Rural Access Project Region SOUTH ASIA Sector General transportation sector (100%) Project ID P103343 Borrower(s) ISLAMIC REPUBLIC OF AFGHANISTAN Implementing Agency Project Development and Coordination Unit Afghanistan on behalf of Ministry of Rural Rehabilitation and Development and Ministry of Public Works Wazir Akbar Khan Kabul, Islamic Republic of Afghanistan Tel: 070-280810 Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared December 15, 2006 Estimated Date of Appraisal Authorization April 30, 2007 Estimated Date of Board Approval July 26, 2007 1. Key development issues and rationale for Bank involvement Rural Afghanistan is home to nearly 80 percent of the population. Incidence of rural poverty is high as the country recovers from the long-term effects of the recently ended six-year drought and the twenty years of conflict. The Government of Afghanistan (GoA) attaches a high priority to improving rural accessibility and has been promoting the reconstruction of rural access infrastructure since 2002. Originally know as the National Emergency Employment Program (NEEP), this effort was part of the government’s social protection agenda and aimed to create employment while also rehabilitating rural roads. The mid-term review of the National Emergency Employment Program for Rural Access (NEEPRA) in 2005 recommended to shift the emphasis to the provision of quality rural roads while creating jobs when feasible. This recommendation was accepted and the program is now known as the National Rural Access Program (NRAP) which is implemented by the Project Development Coordination Unit (PDCU) on behalf of Ministry of Rural Rehabilitation and Development (MRRD) and Ministry of Public Works (MPW). The PDCU is assisted by an Implementation Partner (IP). NRAP is supported by IDA and several donors under the leadership of the World Bank. The need for long-term engagement has been recognized by the international community and was endorsed at a high-level conference held in London in January 2006 which provided a forum to launch the “post-Bonn” agenda for Afghanistan. A significant feature of this agenda is the Compact, which identifies 27 benchmarks to be achieved within the next five years. The benchmarks for the Compact were drawn from the government’s Interim Afghanistan National Development Strategy (IANDS) which aims to "provide tangible benefits to the population". The benchmarks specifically related to the rural roads sector are: (i) by end-2010 provision of road connectivity would reach 40% of the 38,000 villages (totaling 19 million rural population) thereby increasing access to markets, employment, and social services and (ii) Afghanistan will have a fiscally sustainable system for road maintenance by end-2007. Page 2 2 Since its inception in 2002 under the Emergency Community Empowerment Project, NRAP has rehabilitated about 8,000 km of rural roads throughout the country to an all-weather standard and has connected over 3,000 villages to town centers. The rural road network is estimated at 30,000 km and the rehabilitation works, to-date, have returned more than 25% of the network to maintainable condition. The program also provided around 13 million labor-days of employment. The program is working in all provinces and is adapting its operations to adjust to the difficult security situation. To reach the target of the Compact, an additional 4,000 km of rural roads need to be rehabilitated over the next three years and included in the maintainable network, resulting in an annual rehabilitation target of 1,350 km. Financing for NRAP has so far come mainly through IDA grants, the Japanese Social Development Fund (JSDF) and donor co-financing through the Afghanistan Reconstruction Trust Fund (ARTF). Table 1: Disbursements as of December 1, 2006 (IDA and IDA administered funds, US$million) IDA administered Allocation Disbursed Undisbursed Effectiveness Date Closing Date ARTF 50973 $16.62m ($8.8m cancelled) $20.2m $16.62m $20.2m $0 $0m March 14, 2003 March 31, 2008 Cr. 3799/H054 $39.2m $39.06m $0.14m July 22, 2003 Sep. 30, 2007 JSDF 53414 $19.6m $19.6m $0 Aug 28, 2005 March 31, 2008 Total $95.62m $95.48m $0.14m In addition to the above, NEEP/NRAP has received about $10 million from the European Commission and $15 million from Government’s Programmatic Support for Institution Building (PSIB). The rural roads sector is also receiving funding from the Provincial Reconstruction Teams (PRTs) but these activities are more on an autonomous basis to complement the peace keeping operations in Afghanistan. NRAP is expected to require a budget of about $500 million over the next four years to achieve the objectives of the ANDS. It is expected that other donors will make significant contributions towards that objective and the majority is expected to flow through the ARTF. Donors contribute to NRAP because of the proven delivery record, its ability to reach all provinces, and its flexibility to respond to geographical preferences of the donors. Due to varying donor budget cycles and payment procedures, the timing of contributions is unpredictable, making it necessary to frequently amend the grant agreement and the IP contract. Government has recently expressed its strong support to NRAP and considers it a well-performing program to improve rural access throughout the country and revitalize rural economies. On October 22, 2006, World Bank received the official request from Ministry of Finance for additional IDA funding for NRAP. The proposed project is fully aligned with the Afghanistan Interim Strategy Note (ISN) of April 2006 which focuses on two broad objectives: developing the capacity of the state and providing tangible benefits to the population. The ISN states the Bank's intention to make additional funding available for infrastructure and rural development (p. 32). The World Bank is assisting the Government to define a rural access and maintenance policy which will define the institutional, financing, and technical options for rural access. The policy will distinguish between strategic and local access and define ownership of the respective networks. The ministries will thus be enabled to adopt a coherent sector strategy that will optimize available funding while delivering and maintaining rural roads throughout the country. Page 3 3 Key lessons learnt from the implementation of NRAP include: (i) Project implementation in a semi post- conflict environment requires a high measure of (a) flexibility in terms of redeployment of staff and working with community leaders to ensure security; in volatile areas community-based contracting might be the most appropriate solution and (b) visible benefits to the population are very important and can be achieved through short lead times, employment creation, and quality infrastructure. (ii) High rotation of staff on the client and the Bank's side increase the need for robust fiduciary systems; at the same time it is difficult to attract quality staff to the country who can put in place and update such systems. (iii) Capacity and skills set of client staff is very weak and efforts need to be targeted to those staff involved in project implementation rather than general capacity building efforts for the ministries. In addition, the FY07 Quality of Supervision Assessment provided two valuable lessons: (i) Keep it simple. Countries emerging from conflict generally face considerable damage to institutional capacity, social capital and relations, economic conditions and infrastructure, coupled with large numbers of donors and NGOs chasing projects and government attention. Under these circumstances, projects during the initial reconstruction period need to be kept as simple as possible, focusing on one or two key objectives and minimizing the institutional demands on incipient public sector administrations; and (ii) Management expectations need to be realistic. This is especially important in recognizing that risk is inherently higher in these contexts, and that expectations need to be adjusted in line with what can reasonably be achieved in the initial reconstruction phase. 2. Proposed objective(s) The objective of this project is to enable the rural population to benefit from year-round access to basic services and facilities in the rural areas of Afghanistan covered by the project. This will be achieved through contracting with the private sector and, to a lesser extent, with communities for the rehabilitation and maintenance of rural access infrastructure. The achievement of PDO will contribute to enhance well being and promote equitable economic growth in the country. The PDO is derived from the overarching program objective of NRAP. The proposed key performance indicators are: · Beneficiaries will be within a 2 km or 30 minutes of walking distance to an all-weather road. This indicator is closely aligned with the IDA-14 indicator for rural accessibility (20 minutes walking to an all-season road) and Afghanistan's National Development Strategy of providing access to 40% of all villages by 2009. · After completion of a sub-project, travel time of beneficiaries living along the improved road to district centers would be reduced by 30%. · After completion of a sub-project, the number of trips taken by beneficiaries living along the improved road to district centers would increase by 50%. · Price of key consumption and production commodities at beneficiary villages would be within 15% of the price in the nearest town. 3. Preliminary description The IDA grant allocation of the proposed project is US$100 million. The proposed project builds on the successful design and implementation of the ongoing IDA project, NEEPRA, which has been particularly strong on infrastructure delivery. Project implementation is being carried out with the assistance of a project implementation partner (IP). At this point there is no feasible alternative to this approach but the proposed project will aim to decrease the dependence on the IP in line with permanent institutional arrangements for rural roads management, such as a rural roads department or agency. These arrangements will be clearly defined during project preparation and the terms of reference of the IP will include specific capacity building targets for the unit in charge of the management of the rural road Page 4 4 network. Additionally the project will aim to involve local communities and social inclusion officers in the different stages of sub-project design and implementation in order to leverage from their local knowledge, improve delivery, and prevent adverse effects. The lending instrument proposed is the Emergency Recovery Loan (OP 8.50) which currently applies to all World Bank initiatives in Afghanistan. The preliminary project components are: (a) Rural Road Improvements ($64 million) , including rehabilitation and reconstruction of some 2,500 kilometers of secondary and tertiary rural roads. The delivery mechanism will be tailored to the security situation of the area, i.e., in the less secure areas community-based contracting will be promoted while in the more secure areas, works will be carried out by contractors. The project will aim to promote the development of a professional labor-based contracting industry; (b) Rural Road Maintenance ($17 million) , including setting up of a maintenance system, maintenance programming, and routine and periodic maintenance of already rehabilitated rural roads; and (c) Institutional strengthening, capacity building and project implementation assistance ($19 million) , including services of an implementation partner, technical assistance for clarification of roles and responsibilities of the management of the rural road network for MPW and MRRD, capacity building of staff and contractors, improvement of technical specifications, quality control, technical audits, M&E, and incremental operating expenses 4. Safeguard policies that might apply [Guideline: Refer to section 5 of the PCN. Which safeguard policies might apply to the project and in what ways? What actions might be needed during project preparation to assess safeguard issues and prepare to mitigate them?] Safeguards policies that might apply include Environmental Assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04), and Forests (OP/BP 4.36). The project will primarily finance the rehabilitation of existing rural roads and negative environmental impact is therefore expected to be minimal. The environmental and social management framework (ESMF) of the ongoing National Emergency Employment Project for Rural Access (NEEPRA) will be reviewed during the preparation of the proposed project, lessons learnt will be drawn, and the ESMF of the proposed project will be informed by that review. A particular area of mitigation is adherence to mine clearing provisions which are in effect in Afghanistan. NEEPRA has excellent experience with these provisions. 5. Tentative financing Source: ($m.) BORROWER/RECIPIENT 0 IDA Grant 100 Total 100 Page 5 5 6. Contact point Contact : Susanne Holste Title : Sr. Transport. Specialist Tel : 202-458-0485 Fax : 202-522-2427 Email : Sholste@worldbank.org Location : Washington DC, USA (IBRD)