Document of The World Bank Report No: 20297-AL PROJECT APPRAISAL DOCUMENT ONA PROPOSED LOAN IN THE AMOUNT OF US$83.46 MILLION TO THE DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOR THE AIN TEMOUCHENT EMERGENCY EARTHQUAKE RECOVERY PROJECT JUNE 3, 2000 Infrastructure Development Group Maghreb Department Middle East and North Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective April 2000) Currency Unit = Algerian Dinar DA 74 = US$ 1 US$ 0.0135 = DA I FISCAL YEAR July 1 June 30 ABBREVIATIONS AND ACRONYMS AEP Alimentation d'Eau Potable BA Beneficiary Assessment BAD Algerian Bank for Development BMN Basic Minimum Needs CGS National Earthquake Center for Engineering Research CICS Interministerial Committee for Coordination and Follow-up for Reconstruction of the Ain Temouchent Disaster Area CRAAG Center for Astrophysical and Geophysical Research DGPC General Directorate for Civil Protection DUC Social Rental and Building Administration EMP Environmental Management Plan FMS Financial Management Specialist or Financial Management System GIS Geographic Information System GPN General Procurement Notice IGF General Inspectorate of Finance IT Information Technology LAA Land Acquisition Assessment LTDA Local Technical Departments and Agencies M&E Monitoring and Evaluation NBF Not Bank-financed NGO Non-Governmental Organization O&M Operations and Maintenance OPGI Office for Real Estate Administration PCU Project Coordination Unit PIP Project Implementation Plan PMR Project Management Report PRA Participatory Rural Appraisal SA Special Account SOE Statement of Expenditure WWTP Wastewater treatment plant Vice President: Jean-Louis Sarbib Country Manager/Director: Christian Delvoie Sector Director: Jean-Claude Villiard Task Team Leader/Task Manager: Piotr Wilczynski ALGERIA AIN TEMOUCHENT EMERGENCY EARTHQUAKE RECOVERY PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 2 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 3 2. Main sector issues and Government strategy 3 3. Sector issues to be addressed by the project and strategic choices 4 C. Project Description Summary 1. Project components 5 2. Key policy and institutional reforms supported by the project 7 3. Benefits and target population 7 4. Institutional and implementation arrangements 8 D. Project Rationale 1. Project alternatives considered and reasons for rejection 10 2. Major related projects financed by the Bank and other development agencies 11 3. Lessons learned and reflected in proposed project design 11 4. Indications of borrower commitmnent and ownership 12 5. Value added of Bank support in this project 12 E. Summary Project Analysis 1. Economic 12 2. Financial 12 3. Technical 13 4. Institutional 13 5. Environment 14 6. Social 15 7. Safeguard Policies 17 F. Sustainability and Risks 1. Sustainability 17 2. Critical risks 17 3. Possible controversial aspects 18 G. Main Loan Conditions 1. Effectiveness Condition 18 2. Other 18 H. Readiness for Implementation 19 I. Compliance with Bank Policies 19 Annexes Annex 1: Project Design Summary 20 Annex 2: Project Description 24 Annex 3: Estimated Project Costs 49 Annex 4: Economic and Financial Analysis 50 Annex 5: Financial Summary 51 Annex 6: Procurement and Disbursement Arrangements 52 Annex 7: Project Processing Schedule 63 Annex 8: Documents in the Project File 64 Annex 9: Statement of Loans and Credits 65 Annex 10: Country at a Glance 67 Annex 11: Social Assessment 69 Annex 12: Environment Management Plan 80 MAP(S) IBRD 30909 ALGERIA Am Temouchent Emergency Earthquake Recovery Project Project Appraisal Document Middle East and North Africa Region MNSID Date: June 3, 2000 Team Leader: Piotr M. Wilczynski Country Manager/Director: Christian Delvoie Sector Manager/Director: Jean-Claude Villiard Project ID: P069947 Sector(s): BI - Institutional Development, TR - Rural Roads, UH - Urban Housing, WR - Rural Water Supply & Sanitation, WU - Urban Water Supply Lending Instrument: Emergency Recovery Loan (ERL) Theme(s): Poverty Targeted Intervention: N Project Financing Data Z Loan O Credit O Grant O Guarantee O Other (Specify) For LoanslCredits/Others: Amount (US$m): 83.46 Proposed Terms: Fixed-Spread Loan (FSL) Grace period (years): 2 Years to maturity: 16.5 Commitment fee: 0.85% of Service charge: 0.00% undisbursed balances for first four years; 0.75% thereafter Front end fee on Bank loan: 1.00% GOVERNMENT 24.75 0.67 25.42 IBRD 59.33 24.13 83.46 BENEFICIARIES 3.97 0.00 3.97 Total: 88.05 24.80 112.85 Borrower: GOVERNMENT OF ALGERIA Responsible agency: MINISTRY OF INTERIOR AND LOCAL GOVERNMENTS Address: Palais du Gouvemement, Alger Contact Person: Mr. R. Ould Ameur Tel: 213-2-732340 Fax: 213-2-736106 Email: Estimated disbursements ( Bank FY/US$M): Annual 35.5 39.0 8.9 Cumulative 35.5 74.5 83.4 Project implementation period: 3 Years Expected effectiveness date: 07/15/2000 Expected closing date: 12/31/2003 UCS PAD Fm: Re. ,S 2a000- A. Project Development Objective 1. Project development objective: (see Annex 1) The project's development objective is to restore normal functioning of communities damaged by the December 22, 1999 earthquake in the Wilaya of Ain Temouchent and to increase national preparedness for future disasters. Earthquake of Ain Temouchent On December 22, 1999 an earthquake estimated at magnitude 5.5 occurred in the Wilaya (Province) of Ain Temouchent, located in western Algeria about 75 kilometers from Oran. The Wilaya of Ain Temouchent has about 327,000 residents settled in 28 communities. The earthquake struck at 6:37 p.m. Strong ground motion lasted about 15 seconds, according to the Algerian National Earthquake Engineering Center. The earthquake occurred along a previously unknown fault, at an estimated depth of 10 km. Its epicenter is believed to have been 5 km south of the city of Ain Temouchent, the largest settlement in the wilaya. There was no surface faulting. Ten aftershocks occurred within a few hours of the earthquake, varying in magnitude from 3.8 to 5.1. Damage to Housing and Infrastructure. The earthquake caused severest damage in four communities, Aui Temouchent, Sidi Ben Adda, Ain Tolba and An Lalam. Twenty-seven people died in the collapse of residential units and 274 people were injured. About 7000 housing units were damaged, as well as water supply systems, sewerage systems, roads, schools, health facilities and government offices. The disaster damaged the housing of about 30,000 people in the wilaya. The cost of physical damage from the earthquake is currently estimated at about US$100-120 million. National Emergency Response System Severely Tested. At the request of the Algerian government, the Bank conducted a mission in the afternath of the earthquake. The mission's review of the current organizational systems for the management of emergencies at the national, provincial and municipal levels, including enabling laws and decrees, emergency plans, operational procedures, equipment needs, mutual assistance agreements, roles and responsibilities, and communications capabilities, has pointed out the need to upgrade the Government's emergency management system to improve future risk management and disaster preparedness. 2. Key performance indicators: (see Annex 1) The TEERP (Ain Temouchent Emergency Earthquake Recovery Project) will be evaluated against the following key performance indicators: * Families displaced by the earthquake will move into earthquake-resistant permanent housing; * Replacements for technical infrastructure (water systems, sewerage, etc.) destroyed by earthquake will be in use; * Replacements for social infrastructure (schools, clinics) destroyed by earthquake will be in use; * The Government's new emergency system will be strengthened. - 2 - B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 15316-AL Date of latest CAS discussion: 02/05/96 The project will support in particular the CAS objective of protecting the poor during Algeria's transition to a market economy, and reflects the CAS priority on interventions, such as housing, that will make a qualitative and quick difference in the lives of people. The most recent CAS The CAS for the current period will be finalized in FY200 1. The previous CAS, formally designed for the 1996-1997 period, made the case that Algeria's transition to a market economy must be carried out with proper attention to poverty relief. In particular, poverty relief and social protection are now much needed in the areas affected by the earthquake, as its effects compound an already delicate situation in terms of unemployment and a housing shortage. The principles guiding current Bank strategy include: * Select interventions that would make a qualitative and quick difference in the lives of people, of which housing is a principal example; o Reinforce solid economic performance; * Retain maximum flexibility in choosing Bank assistance instruments, focusing on simple, easily implementable operations. The proposed TEERP project is in line with these guiding principles. The project objective is to restore the living conditions of people, and particularly the poorest inhabitants of the affected region. Construction planned under the project will generate job opportunities for Algerians. The project will enable the Government to respond to future emergencies with quick and effective action to support the lives of the poorest Algerians. The built-in flexibility of the Bank's Algeria strategy and its strong social focus are fully consistent with this emergency response. The project design is simple, and it is intended that the project be easily implementable by the Project Coordination Unit. 2. Main sector issues and Government strategy: Preparedness of the disaster response system. Disaster response in Algeria today is structured by the system set up in the aftermath of the 1980 El Asnam earthquake, a magnitude 7.2 earthquake which killed 2300 people, caused 8300 injuries, left 479,000 homeless, destroyed 20,000 buildings and caused an estimated direct loss of US$2 billion. Subsequent to that earthquake, a 1985 decree (No. 85.231) established the legal structure of Algerian civil protection, providing for decentralized authority and responsibility to the wilayas and their govemors, although all levels of government were directed to establish plans for emergency preparedness, emergency response protocols, and procedures, following common operational priorities and guidelines. In accordance with that decree, disaster organization in Algeria is today highly decentralized. Municipalities and the govemors of wilayas have lead responsibility for all emergencies, while the role of the central government is to provide assistance as requested. Inter-ministerial coordination takes place through structures called crisis cells, which are formed at the provincial level in response to an emergency and which may be formed at the national level as well: a national-level crisis cell is established when more -3 - than one wilaya is affected by an emergency or at the request of the govemor of an affected wilaya. A national-level Crisis Cell has formed in response to the December 22, 1999 earthquake in response to the request of the Governor of the Wilaya of Ain Temouchent. Civil Protection (DGPC) in Algeria performed ably in the hours following the Ain Temouchent earthquake. Officials at the provincial and national level followed established plans and protocols. Efforts to rescue trapped victims and provide medical assistance were undertaken immediately; specific requests for assistance were addressed to adjacent wilayas and the national government in the first hours following the event; temporary shelters were in place within hours; and the damage assessment process was well coordinated and timely. Despite these successes, the Government of Algeria is mindful that the Ain Temouchent was a moderate-sized earthquake and that the impacts, while severe in some areas, were limited. Reflecting on the experience gained in the December 22,1999 earthquake, the Government of Algeria has judged that its current system requires reinforcement. The Government's priority areas include search and rescue equipment and training, an upgraded communications and data processing system including GIS, improved estimates of likely damages to urban areas, and additional training. Risk management. Algeria's system of risk management principally features legislation providing that the Government will protect and support the lives of the Algerian population affected by natural disasters. In situations of natural disaster, many are unprepared to overcome income shocks and would be unable to secure the minimum necessary food and shelter. In light of this, and in the absence of an affordable insurance scheme against natural disasters, the Government has obligated itself to supply safe water, food and shelter to those affected by natural disaster. In light of these considerations, the Government is interested in ways to improve management of disaster risks. In addition to the measures above which will reduce risk by improving assessment of vulnerable points and enhancing the Government's ability to take early and cost-effective measures in case of emergency, the Government intends to assess the feasibility of instituting a national earthquake insurance program and improve capacity for building code enforcement and monitoring of construction practices. Housing shortage. Housing in urban areas was in short supply even before the further losses caused by the earthquake. 3. Sector issues to be addressed by the project and strategic choices: Increasing the preparedness of the disaster response system. The project will assist the Government to introduce measures to reduce potential losses from natural disasters in the future, by improving the emergency response system at the central and local levels. Following an assessment of current systems, the project will support an improved seismic and geographic information base, upgraded communications and data processing, search and rescue equipment and training. Support for risk management strategies. The project will support the Government's effort to manage the risks of disaster through (a) improvement of capacity for building code enforcement and enforcement of seismic-resistant construction, and (b) policy assessment of the feasibility of a national earthquake insurance program. No strategic choices have yet been made with respect to these issues; assessment of current standards and practices is an early project activity. Provide housing in the Wilaya of Ain Temouchent The project will support recovery of the affected region through reconstruction and rehabilitation of housing and technical/social infrastructure. The new -4 - housing will be built to seismically-resistant standards. The project will not attempt to address long-term sectoral issues; however, in accordance with the Bank-supported move to private ownership as well as Government policy, the new units will be available for purchase by beneficianies. C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): Component A: Disaster Organization and Risk Management (US$9.37 million) Objective. The objectives of this component are: (i) to strengthen the institutional capacity of emergency management in Algeria to prepare for and manage the consequences of large-scale emergencies, especially earthquakes; and (ii) to promote a nationwide, comprehensive risk management strategy through: * Enhancement of the capability of Algerian Civil Protection to carry out essential initial emergency response activities including search and rescue operations; * Enhancement of the national communications and information management capacities; * Enhancement of national seismic monitoring systems and understandings of the nature of seismic risk in the Ain Temouchent region; * Enhancement of the capacity to enforce building codes and monitor construction practices; and * Promoting consideration of policy alternatives, especially the use of insurance and other risk transfer mechanisms, that could moderate the financial strain on governmental operating budgets following natural disasters. The activities defined in this Project will enhance the Government of Algeria's current disaster management system and risk management strategies and programs. The component will finance: - Acquisition of emergency response and search-and-rescue capacity in Algeria through the purchase of specialized equipment and training in the use and maintenance of the equipment; - Construction of facilities in Ain Temouchent and Ain Tolba to support the operations of Civil Protection in the region; i Assessment of Civil Protection's current voice and data communications capacities, the development of recommendations for upgrades that build on current capabilities, and the enhancement of voice and data systems and development of detailed earthquake response plans based upon detailed planning scenarios; * Completion of a seismic risk assessment and microzonation for Ain Temouchent; * Enhancement of the Algerian seismic monitoring network; * Review of current standards, practices, and institutional capacities in building code enforcement and construction monitoring, including recommendations enhancing effectiveness; * Assessment of the policy altematives and feasibility of instituting a national earthquake insurance program in Algeria based on a review of current international practices. Component B: Housing (US$65.78 million) The principal objective of this component is to assist the Government of Algeria in the reconstruction of permanent housing in the areas affected by the earthquake. -5 - * The Social Rental Housing Reconstruction sub-component will finance technical assistance, design, supervision, training, and all necessary construction-related investments, to replace collapsed housing units and those units having to be demolished whether due to unsafe conditions and heavy damage or due to risky location. It is estimated that approximately 3,400 housing units are eligible for reconstruction. * The Individual Non-grouped Housing Reconstruction sub-component will finance: (i) materials for 800 units with contribution of sweat equity from beneficiaries; (ii) technical assistance, standard design, supervision, and training. Construction training will be provided, through which the beneficiaries will gain qualification and experience in the construction of earthquake-resistant buildings in order to undertake construction activities. Strict geo-technical and structural requirements will be applied to each site and to each housing unit. The beneficiaries will purchase materials according to technical specifications. No modifications will be made to the standard designs, and no materials will be allowed for use without prior approval from the Project Coordination Unit (PCU). The supervision of construction of both the individual non-grouped housing and the social rental housing will be provided through independent consultants to be employed by the PCU, or through the PCU staff, as appropriate. Expenditures under this component may be eligible for retroactive financing. Component C: Technical Infrastructure (US$8.39 million) The objective of this component is to restore essential infrastructure for the benefit of the population at large and in particular for the population affected by the December 22, 1999 earthquake. The component includes design of infrastructure and supervision of its construction: water supply systems, sewerage systems and wastewater treatment plants, and roads. Construction of these facilities will be carried out in accordance with current standards in Algeria, incorporating recommendations of the engineering consultants who, under contract with the PCU, will supervise the design and construction of the facilities. Component D: Social Infrastructure (US$26.78 million) The principal objective of this component is to assist and provide financing for the reconstruction of public buildings which provide vital social services, including schools, hospitals, recreation centers, and government offices. Restoration of these facilities is essential to bringing back a sense of stability and normality to the community and to restoring confidence in the Government's ability to deal with major catastrophes. The Government of Algeria has conducted an assessment of damages, and these data have been reviewed and investigated by a team of national specialists financed by the World Bank. Among the findings were the following: * Of the 39 school buildings located within the Wilaya of Ain Temouchent, 12 were found to be heavily damaged and will have to be reconstructed. The largest of these schools, Lycee Bachir Ibrahimi in Ain Temouchent, formerly had about 1340 students. Besides the 12 schools which will need reconstruction, the earthquake also effectively damaged four additional schools, which will require major repairs. Construction of primary schools may be eligible for retroactive financing. * The earthquake also destroyed or damaged numerous regional health facilities, including the main - 6 - hospital in Ain Temouchent. Five health centers were severely damaged and need to be reconstructed. * Three public buildings were seriously damaged and will have to be completely rebuilt. Several others were damaged and will have to be repaired. Component E: Project Implementation (US$1.69 million) This component will finance the creation and maintenance of a Project Coordination Unit (PCU) during the implementation period. .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~M Component A: Disaster Organization Institutional 9.37 8.3 7.16 8.6 and Risk Management Development Component B: Housing Urban Housing 65.78 58.3 46.11 55.2 Component C: Technical Infrastructure Other Water 8.39 7.4 6.80 8.1 Supply & Sanitation Component D: Social Infrastructure Other Social 26.78 23.7 21.49 25.7 Sector Component E: Project Implementation Institutional 1.69 1.5 1.06 1.3 Development Total Project Costs 112.01 99.3 82.62 99.0 Front-end fee 0.84 0.7 0.84 1.0 Total Financing Required 112.85 100.0 83.46 100.0 2. Key policy and institutional reforms supported by the project: Building code. An updated building code was approved in Algeria in 1999. The Ain Temouchent Emergency Earthquake Recovery Project will support the enforcement of the building code by (a) strengthening institutional capacity to enforce building codes and to monitor construction practices, (b) designing structures which conform to the code, and (c) demonstrating earthquake-resistant construction in Ain Temouchent. 3. Benefits and target population: The project will target the earthquake-affected population as well as the whole Algerian population through strengthening of country's disaster management system. Housing for displaced persons. Families displaced by the earthquake will benefit from housing constructed under this project. Recovery in affected communities. All members of the communities which have lost access to safe water, sewerage, roads, schools, and clinics will benefit from the reconstruction of technical and social infrastructure. Safer housing. Inproved building code enforcement will protect the Algerian population from the negative effects of future earthquakes. -7 - Timely and well-targeted aid to those affected by disasters. The support for capacity-building in disaster management will benefit the Algerian population in future emergencies, when people affected by catastrophes will receive timely aid, well-targeted to their anticipated needs. Increased effectiveness of national expenditure. The national budget will be less affected by future disasters once risk management measures are in place. Social cohesion. The project supports the Algerian Government's efforts to protect the poor and assure social cohesion through the support provided for shelter and safe water to those in need following natural catastrophes. 4. Institutional and implementation arrangements: The project will be implemented over a three year period from July 15, 2000 to June 30, 2003. Interministerial Committee. An Interministerial Committee for Coordination, and Follow-up for Reconstruction of Ain Temouchent Disaster Area, or CICS (also called "ISC" in the Loan Agreement) will be established. Its membership will include the Minister of Interior or his representative (Chair) as well as representatives of the Ministry of Finance, Ministry of Housing, Ministry of Health, Ministry of Water Resources, Ministry of Public Works, Environment, Urban Affairs and Education, and representatives of the affected population. The CICS will be responsible for providing project oversight, advice and overall guidance for the implementation of the project. The CICS will review the project's quarterly progress reports. Cooperation between the Project Coordination Unit and Local Technical Departments and Agencies (LTDAs) in Ain Temouchent. Local technical departments and agencies (LTDAs), the implementing agencies, in close coordination with and supported by the Project Coordination Unit (see below) will establish implementation schedules for each component and define the responsibilities of each party involved in project implementation. Based on terms of reference developed by LTDAs in cooperation with the PCU, the LTDAs in coordination with the PCU will prepare bidding documents and contracts for construction works, goods and consultant services for all components. The PCU will assure quality control of contracted activities; together with the responsible implementing agencies it will issue the letters of compliance to be attached to invoices sent to the Banque Algerienne du Developpement (BAD) for payment. The PCU will arrange periodic social assessments and monitor compliance with Algerian and World Bank environmental regulations. The PCU will serve as a secretariat to the CICS, prepare the working documents for the meetings of the CICS, and submit quarterly progress reports and annual audit reports to the Governor of the Wilaya of Ain Temouchent, CICS, and the Bank. Project Coordination Unit. The Project Coordination Unit (PCU) will assist implementing agencies and in close cooperation with them will help in implementation of the project. The PCU will be responsible for overall coordination and supervision of the project. It will be established in the city of Ain Temouchent, and managed by a Director who will report directly to the Governor of the Wilaya. The Director will be responsible for hiring the staff of the PCU, subject to Bank's no-objection. The project will be implemented under the overall guidance of the CICS and in close coordination with the LTDAs. Financial Management: The Algerian Development Bank (BAD - Banque Algerienne du Developpement) will be responsible for - 8 - project financial management, including processing of all financial transactions, reconciliation of expenditures with the approved project budget, as well as project records with the Bank records, and the Special Account replenishments. The BAD financial management system (FMS) now in place is based on principles and procedures defined by the legal framework applicable to the public sector. BAD maintains an accounting system based on the cash basis and on the outline of budget components, according to the provisions of the Public Accounting Law. Transactions in terms of comnmitmnents and disbursements are reflected in BAD accounting books maintained manually. BAD's financial management arrangements satisfy the Bank's minimum requirements, as the public accounting legal framework used by the BAD ensures financial accountability. However, the BAD manual financial management system currently in use has no capacity to generate the Bank-required management-oriented project reporting. Therefore, project reporting and accounting functions will be the responsibility of the Project Coordination Unit (PCU) located in Ain Temouchent. Proiect Coordination Unit. The PCU will be responsible for control of eligibility of project expenditures to be paid by the BAD, and for project accounting and reporting. To fulfill these functions, the PCU will be adequately staffed, including an Accountant and a BAD staff member delegated to the PCU, by July 31, 2000 (a dated Loan covenant confirmed during Negotiations). Terms of reference (TORs) for the Accountant are included in the Project Implementation Plan (PIP). Reporting. The PCU will prepare quarterly Project Management Reports (PMRs) following the Cash Model. In order to generate the PMRs, the PCU will establish a computerized project financial management information system. Appropriate specialists would be hired to assist the PCU in developing of the project financial management information system and supporting documentation. Setting up the PCU financial management information system is to be completed no later than October 31, 2000. The content of PMRs, agreed with the Borrower during Negotiations, is described in the Project Irnplementation Plan (PIP) and in Annex 6. Audit. An annual audit of project records and accounts, including audit of the Special Account (SA), and disbursements under Statements of Expenditures (SOEs) will be performed by an independent auditor acceptable to the Bank, according to the Intemational Standards of Accounting as issued by the International Federation of Accountants, the Bank's Guidelines (e.g., "Financial, accounting, reporting and auditing handbook - FARAH") and specific Terms of Reference (TORs) acceptable to the Bank. The auditor will express a professional opinion on the annual project financial statements and will submit to the Bank an annual audit report within six months after the end of each fiscal year. Expenditure Control and Disbursements: Disbursements from the Bank loan will be made using the traditional disbursement procedures. The MOF will delegate to the BAD management of the Special Account that will be opened at the Central Bank of Algeria. The BAD senior officials who are designated by the MOF will have the right to sign withdrawal applications. The BAD would prepare a request for initial advance to the SA, and replenishment applications thereafter. GOA will ensure that the local currency equivalent to the amount advanced to the SA, and counterpart funds for the project, are available to the BAD through budgetary allocations. The budgetary allocations would be based on the annual budget for the Project activities prepared by the PCU in collaboration with the MOF. All expenditures to be paid by the BAD will be reviewed an approved by the PCU Director in two phases: (i) before commitrnents are made and contracts signed -- in terms of their eligibility under the Loan Agreement; (ii) when invoices are presented for payments -- in terms of an applicable contract existing as well as confinnation that goods were delivered, works executed, or services rendered. Upon approval by the PCU Director of invoices submitted for payment, the BAD staff delegated to the PCU in Ain -9- Temouchent will be expected to pay them within five days. Procurement: Considering the emergency nature of the project, most of the procurement of goods, works, and services will be done nationally. However, for consultancy services required to oversee and certify the design and construction of facilities such as housing, schools, hospitals, and other infrastructure prepared by the local firms, particularly the seismic design, as well as to ensure that the best level of cost-effectiveness is reached, the consultants' services will be procured in accordance with the Guidelines: Selection and Employment of Consultants by World Bank Borrowers, January 1997 revised September 1997 and January 1999. Monitoring and evaluation arrangements. The PCU would be responsible for monitoring progress against agreed-upon monitoring and performance indicators. The PCU would submit quarterly and annual progress reports to the Governor of the Wilaya (the Wali), the CICS and the Bank. D. Project Rationale 1. Project alternatives considered and reasons for rejection: Institutional arrangements. Project implementation by a national government ministry was considered and rejected in favor of a PCU assisting and cooperating with local technical departments and agencies in Ain Temouchent. This organizational design complies with the decentralized disaster management procedures now in place in Algeria. Moreover, a regionally-based arrangement will allow for more flexible project implementation than would central administration. Reconstruction Relief Program without Support for Reform of Building Codes. The option of designing a project without building in any institutional capacity enhancement was considered. However, without efficient building code enforcement, the effects of even a relatively minor earthquake will strain the national budget. The Bank cannot provide the needed resources in every such case. Moreover, due to the size of emergency loans, they tend to crowd out other important development lending programs which either have to be postponed or substantially reduced. Finally, excessive government reliance on the Bank retroactive lending and emergency donor relief cannot be considered sustainable in light of the high probability for the disaster occurrence in this country. In situ construction versus new sites. In the case of social rental housing, reconstruction on the site of the destroyed units was considered and rejected, because rebuilding these in situ would require scattered construction processes that would significantly increase the complexity of the construction and therefore cause delay and raise costs. Beneficiary selection. Several means of beneficiary selection were considered. It was decided that eligibility would be decided by a commission operating under the supervision of the Wali (the Govemor of the Wilaya) and consisting of elected representatives to local government, the Director of the Office for Real Estate Administration, the Director of the Social Rental and Building Administration, and the President of the Association of Disaster Victims. This combination was judged likely to produce a transparent and fair result. Cost recovery. Stronger support for reform of the housing sector was considered, such as requiring rental levels achieving actual cost recovery on new construction, but this was rejected as an inappropriate burden for an emergency operation. - 10 - 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). 9Cg~~~~~~~~~~~~~~Lts $^u .M ":o Implementation Development Bank-financed Progress (IP) Objective (DO) Mascara Emergency Reconstruction Loan No. 3813-AL S S Project Cadastre Project Loan No. 3488-AL S S Low Income Housing Project Loan No. 4361 -AL S S Other development agencies - : IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory). U (Unsatisfactory), HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: Activities intended to reduce the impact of the next disaster must be an integral part of recovery. Bank experience with disaster assistance to many countries worldwide has shown that mitigation activities, intended to reduce the impact of the next disasters, must be an integral part of both recovery and pre-disaster planning. TEERP incorporates this lesson in activities under Component A. The most immediate need following a disaster is provision of shelter. Experience from recent Bank emergency reconstruction operations is that the best solution is to build to a habitable standard and assume that the beneficiary will underwrite additional costs. TEERP accordingly intends to provide social housing designs to a basic standard. Project design should be simple for an emergency operation. The design should be based on participation by the local community and take into account local implementation capacity. Implementation should be flexible to ensure responsiveness to community needs. TEERP has a simple project design and has simplified procurement arrangements as much as possible. The project has incorporated the findings of an early social assessment, and anticipates incorporation of the findings of future social assessments into ongoing implementation. Rebuilt houses must be earthquake-resistant. The experience from the previous emergency projects teaches that disaster-affected families should be provided with guidance in earthquake-resistant building techniques. Low cost reconstruction is desirable, but economizing on the structure of buildings is not cost effective given the recurrent character of disasters. Accordingly, TEERP-financed housing will be constructed to a high standard of earthquake resistance; basic structures will be required to conform to an earthquake-resistant design which will itself be a project output. - 11 - 4. Indications of borrower commitment and ownership: Project is response to Government request. The Government of Algeria requested the Bank's assistance to develop a project addressing earthquake recovery and protection as an urgent operation. During discussions held between the Bank and the Govermment during the identification mission of January 2000, agreement was reached on the key points relating to the loan amount, allocation of funds, implementation arrangements, main project components and priority actions, and project preparation. Continuing support. The Government has demonstrated continuous commitment through the involvement and cooperation of its agencies at the central and regional levels. Similar commitment has been demonstrated during the project preparation by the Governor of the Wilaya of Ain Temouchent. The Govermment has already selected a candidate to take a post of the PCU Director, so that the eventual Director will have been involved from the outset in project preparation and implementation. Institutional arrangements are linked to national disaster management structures. In the aftermath of the December 22 earthquake, the Governor of Ain Temouchent Wilaya established a Crisis Cell that included representatives of the key ministries including Housing, Health, Water, General Directorate for the Environment and Interior. At the national level a similar structure was set up in Algiers headed by a senior official from the Ministry of Interior. Those structures are the basis for the Interministerial Committee (CICS) which will furnish guidance to the PCU throughout project implementation. 5. Value added of Bank support in this project: With the experience gained in emergency projects worldwide, and with its long history of support for development in Algeria, the Bank brings to the recovery and reconstruction process an organizational framework and clear process for identifying, selecting and implementing priority investments for municipal/rural infrastructure and emergency response management. Through the emergency project, the Bank can provide funding when it is most critical. The Bank is in a unique position among donors to retain an overall view of reconstruction/recovery requirements and has a unique ability to focus on policy and institutional reform and the economic and social aspects of reconstruction as well as the physical. E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): O Cost benefit NPV=US$ million; ERR % (see Annex 4) O Cost effectiveness * Other (specify) n/a 2. Financial (see Annex 5): NPV=US$ million; FRR = % (see Annex 4) n/a Fiscal Impact: n/a - 12 - 3. Technical: The project's technical design is well suited to Algerian requirements for rapid investment for repair of municipal technical and social infrastructure, public housing, and disaster hazard reduction. Specific investment identification and cost estimates have been calculated on the basis of data compiled and analyzed by the preparation and appraisal missions, and reflect the priorities and costs identified by local government and technical agencies, within an acceptable margin of error for costs. Allowances are made for physical and price contingencies consistent with rapid disbursement for investment. 4. Institutional: Institutional arrangements for the project are relatively simple and decentralized in order to speed the recovery process in the affected area. 4.1 Executing agencies: Interministerial Committee for Coordination, and Follow-up for Reconstruction of Ain Temouchent Disaster Area (CICS). The CICS will provide project oversight, advice and overall guidance for the implementation of the project. The composition of the CICS largely mirrors the Crisis Cell established by the Government in the aftermath of the December 22 earthquake. The Crisis Cell was responsible for coordination of activities immediately taken to provide assistance to the affected Ain Temouchent region. Ministry of Interior and Local Governments (MoW). The Minister of Interior or the Minister's representative will chair the CICS. The Minister of Interior will be responsible for resolving issues which cannot be resolved at the local level and which could form obstacles to expedited project implementation. Governor of Wilaya. The Governor of the Wilaya of Ain Temouchent will oversee implementation of the project at the local level. The Director of the PCU will refer to the Governor in relation to the issues beyond the scope of PCU authority. Civil Protection (DGPC). Civil Protection (DGPC) and its regional offices are organizationally located under the Ministry of Interior. DGPC is responsible for wide range of activities related to emergency situations. For the purposes of the project, it will establish an ad-hoc risk management task force that will have a lead responsibility for implementation of Component A. This team will be supported by the PCU for all matters related to implementation. 4.2 Project management: Project Coordination Unit (PCU). The PCU will be established in the city of Ain Temouchent, and managed by a Director who reports directly to the Governor of the Wilaya. The Director will be responsible for hiring the staff of the PCU, subject to Bank's no-objection. The project will be implemented under the overall guidance of the CICS in close coordination with local technical departments and agencies. 4.3 Procurement issues: A procurement assessment was undertaken in April 2000. Algeria has procurement legislation which is generally in line with the Bank's Procurement Guidelines, although there are certain rules that are not acceptable to the Bank. For this project, the Bank's procedures and guidelines will supersede the national legislation. A procurement action plan to improve procurement management will be implemented (see Annex 6). 4.4 Financial management issues: The risks related to the project's financial management are three, primarily related to ability to generate - 13 - timely and accurate management-oriented project reports: (i) Capacity of staff in the PCU. Staffing the PCU with a qualified accountant by July 31, 2000 is a dated Loan covenant. (ii) Capacity of project financial management information system to generate the agreed Project Management Reports (PMRs). Setting up of the PCU project financial management information system is to be completed by October 31, 2000 to generate PMRs as per agreed deadline. (iii) Delays in preparation of Project Management Reports (PMRs). Preparation of the first PMRs, acceptable to the Bank, by October 31, 2000, is a dated Loan covenant. The project financial management implementation milestones, as reflected in the dated Loan covenants, were designed to mitigate the risk linked to the reporting insufficiencies identified in the BAD existing reporting system. The agreed actions will be progressively implemented to build up an adequate project financial management information system by October 31, 2000. The Bank will give special attention to the project financial management during the project implementation by providing the necessary technical assistance and training. In particular, project management reporting requirements were agreed during Negotiations. The reporting formats together with TORs for the Accountant are described in the Project Implementation Plan (PIP). The financial management risks will be subject to a rigorous follow-up during the supervision missions. The general design of the financial management reporting system for the project would be reviewed by no later than October 31, 2000. 5. Environmental: Environmental Category: B (Partial Assessment) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. The most appropriate tool to ensure that environmental considerations are given adequate attention under an Emergency Recovery Project is an Environmental Management Plan. The EMP addresses the following issues: ? Identification of impacts and definition of mitigation measures; 3 Institutional strengthening with regard to the integration of environmental considerations into project design and implementation; 3 Definition of a monitoring scheme and related indicators. The reconstruction/rehabilitation components of the project could lead to significant environmental impacts. The two major issues to be dealt with are (a) the proper siting of the wastewater treatment plant and (b) the proper siting of the housing agglomerations. The other environmental issues that should be dealt with are the impacts of the road rehabilitation program as well as the public buildings reconstruction program (schools and hospitals mainly). The acceptable disposal of the construction debris is also another environmental concem that should be addressed. The issue of consultation and disclosure will be addressed in the early stages of project implementation. This is exceptional practice only acceptable for emergency projects. 5.2 What are the main features of the EMP and are they adequate? The project EMP has built-in features that should lead to enhanced ownership by the client. Enforcement of the environmental standards and procedures is responsibility of the local Inspectorate of Environment and will be monitored by NGOs and the PCU environmental specialist. Although this is an emergency operation, environmental requirements will be fulfilled by implementing agencies and contractors in accordance with local regulations and in a manner acceptable to the Bank. Bank financing will be provided to only these investments that meet the environmental criteria. - 14- 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: 04/05/00 5.4 How have stakeholders been consulted at the stage of (a) enviromnental screening and (b) draft EA report on the environmental impacts and proposed environmenit management plan? Describe mechanisms of consultation that were used and which groups were consulted? Because of the disaster and emergency nature of the issues to be addressed by the Government to supply shelter and basic needs, only limited attention has been given to public consultation so far. Nevertheless, the technical departments of the regional government of Ain Temouchent conducted a survey in consultation with the affected population and agreed on immediate and medium-term measures to address environmental health and protection issues. Special attention will be paid to the sustainability of selected technical infrastructure investment projects by allowing for O&M cost recovery and placing the ownership of these investments with the beneficiary community. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environrnent? Do the indicators reflect the objectives and results of the EMP? Reporting will be the main source of verification of the extent of achievements and success of the mitigation measures recommended. Water and wastewater quality analyses will be conducted to insure that the quality of water supply and treated wastewater complies with the standards. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. About thirty percent of the population is unemployed. Precarious econornic standing, not only in the quake-affected wilaya but countrywide, has poised much of the Algerian population on the edge of vulnerability. This volatility places numerous groups at risk in the face of income shocks or natural disasters, jeopardizing their ability to secure the food and shelter necessary for survival. The communities targeted for this project - Ain Temouchent, Sidi Ben Adda, Ain Tolba and Ain Lalam - reside in poor economic conditions. A social survey conducted after the quake to help assess damage in the four communities revealed that of the 4,200 families interviewed, only about 34% of those questioned were employed (salaried). Only 2,262 of those interviewed were insured. Each family has about three children to support, with a total of 13,650 children in the families of those questioned. Within the four settlements, 518 people were handicapped, of whom 285 suffered from chronic illnesses. Thus according to the results from the social survey, the population exposed to vulnerability by being impoverished and without resources is roughly 66% (2,772) - including those without income, those who have no resources, those who are handicapped, and those who have acute illnesses. 6.2 Participatory Approach: How are key stakeholders participating in the project? Community participation in the project cycle will increase a sense of ownership by beneficiaries and the willingness to maintain (and protect) completed works; improve implementation efficiency; foster inclusion through project implementation; help to identify vulnerable groups; and aid in leaving behind functional institutions and increased capacity. Participatory methods should include local administration, representatives from various civil society organizations, and a wide selection of commune members. Institutionalizing participation requires organizational and technical capacity, thus the PCU and project implementers must be adequately staffed and trained. Adequate community participation may be achieved by: - 15 - * Conducting a participatory social assessment (using participatory rural appraisal and beneficiary assessment techniques) to capture baseline information and identify/prioritize needs and concerns of the communes in relation to project objectives * Fostering systematic participation of the local population during project implementation, including if possible labor based works for reconstruction, monitoring and evaluation, and in-kind contributions (suggested materials or labor since finances are scarce). Moreover, the Association of Disaster Victims of Ain Temouchent is part of the commission selecting beneficiaries of the housing supported by the project. Also, a representative of the Association will participate in the CICS which has an overview of the project and provides general guidance to TEERP implementation. Findings from the social assessments should be reviewed with the community (including beneficiaries, civil society representatives, and local admirnistration) to validate results and ensure that consultation and survey results were interpreted correctly. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? At the initiative of the regional government an initial social assessment was conducted shortly after the earthquake. The results of this survey identified the key beneficiaries and allowed structuring of the project to meet their needs, taking into account affordability concems, especially for the housing component. To assure proper attention to social issues, a social scientist will be hired by the PCU. She/he will be responsible for organizing public consultations and to assure that the findings of those are taken into account. The social scientist will also conduct social monitoring for the project following the social indicators. During its implementation phase, the project will consult with local civil society organizations. Also, periodical assessment will be carried out, wherever possible, by non-govenmmental organizations. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? The project will support training for the PCU, related to the social aspects of the disaster recovery and project implementation. Periodical field assessment will be conducted in accordance with recomnmendations provided during the project preparation and included in the Social Assessment. At the completion of the project, a social evaluation will be performed by the independent external consultants. 6.5 How will the project monitor performance in terms of social development outcomes? During project implementation, the PCU should regularly visit the community to monitor and evaluate community participation. Based on baseline information gathered in the initial social assessment, the PCU should: (i) establish regular consultations with stakeholders during implementation to gain their insight on progress and what should be indicators; (ii) review the community's in-kind contributions and identify related problems; (iii) assist in the solution of problems encountered; and (iv) gain local perceptions on the developmental impacts of the projects and potential improvements to existing structure. Each monitoring visit should last 1-2 days, with each site being monitored 2-3 times during implementation if time pernits. There should be a standard form to report fndings from each of the participatory monitoring visits. - 16- A final evaluation exercise (social audit) should be undertaken, using participatory rural appraisal (PRA) and beneficiary assessment (BA) techniques (described in Annex 1 1A), as well as participant observation. The final evaluation should be based on issues raised during the initial social assessment and those used on monitoring reporting forms. This final evaluation should be carried out independently of the PCU and of any consultants who may have been involved earlier in the assessment and monitoring process. 7. Safeguard Policies: 7.1 Do any of the following safe ard policies ap to the roect? M Environmental Assessment (OP 4.01. BP 4.01. GP 4.01) | Yes El No El Natural habitats (OP 4.04. BP 4.04, GP 4.04) OL Yes 1 No El Forestry (OP 4.36. GP 4.36) Ll Yes 1 No El Pest Management (OP 4.09) OL Yes 1 No El Cultural Propertty OPN 11.03) El Yes M No El Indigenous Peoples (OD 4.20) El Yes X No El Involuntary Resettlement (OD 4.30) El Yes N No El Safety of Dams (OP 4.37. BP 4.37) L Yes 1 No El Projects in International Waters (OP 7.50. BP 7.50. GP 7.50 El Yes 1 No LI Projects in Disputed Areas (OP 7.60. BP 7.60. GP 7.60) El Yes 1 No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. A Land Acquisition Assessment (LAA) will be conducted. No involuntary resettlement is to take place under the project. The Environment Management Plan (EMP) has been prepared and agreed upon with the client. In order to ensure compliance with the environmental standards, the PCU will have an Environmental Specialist as a staff member who will review and provide environmental clearance for project activities as required. F. Sustainability and Risks 1. Sustainability: Factors critical to the sustainability of the project include strong motivation on the part of national, regional and local governments to quickly implement earthquake recovery and risk reduction measures which will protect public health and safety and limit future economic losses. The improved enforcement of quality standards and the support for enforcement of building codes will contribute to project sustainability. 2. Critical Risks (reflecting assumptions in the fourth column of Annex 1): Risk k --tn From Outputs to Objective Component A: Government will decline S Involvement of Minister of Interior on CICS will to fund operations and maintenance of the assure that funding is provided from that budget. disaster response system. Components B, C, D: New construction M New construction will be earthquake-resistant may be damaged by a later earthquake. according to intemational standards. -17 - Components B, C, D: New construction M Building codes and disaster response system will may be damaged by other disasters. make the investment more sustainable in case of unforeseen disasters. From Components to Outputs Components B,C,D: Building materials M Government will ensure supply of proper quality not available construction materials. Component B: Suitable sites for M The Government has identified an initial set of construction are not provided. potential sites already designated for urban housing. Components B,C,D: Required scale of M The size of contract packages was developed in construction is beyond the capacity of consistency with capacity of local construction bidding firms. firns. Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) 3. Possible Controversial Aspects: Efficient management of operations and maintenance of the newly constructed buildings is mandatory under this project in order to ensure the sustainability of the investments. This requires that an appropriate level of maintenance be established and financed. Based on the average unit cost US$13,750 per unit, the annual cost of maintenance is estimated at US$300 in the first few years after construction (rising to US$700 beyond year 10). This cost is about DA 1750/month, which is consistent with the Government's proposed rent level of DA 2100 on average. For families of income DA 10,000/month/family, the cost of maintenance in the early years would then be about 17.5% of family income, and the overall rental level which would finance maintenance would be affordable. However, for families with incomes below DA 10,000/month, the rental level which would finance maintenance may be unaffordable. The Government will assure that maintenance is funded at the needed level, covering the shortfall for those families unable to pay rent at the proposed level. The proposed arrangement should not interfere with overall changes in rental policies and major policy reforms in the housing sector, which the Government of Algeria has undertaken and which the Bank has addressed in a housing sector project now under preparation. G. Main Loan Conditions 1. Effectiveness Condition 2. Other [classify according to covenant types used in the Legal Agreements.] Dated covenants: * The Borrower shall, not later than July 31, 2000, establish and thereafter maintain, the PCU. * The Borrower shall cause BAD, not later than July 31, 2000, to designate a representative to be part of the PCU staff in the Wilaya of Ain Temouchent. * The Borrower shall, not later than July 31, 2000 select potential sites in size and location satisfactory - 18- to the Bank for the purposes of carrying out of Parts B2, B3, Cl, Dl, D2 and D3 of the Project. * The Borrower shall review a progress report with the Bank, by January 1, 2001 or later as the Bank may request, and thereafter take all measures required to ensure the efficient completion of the Project based on the conclusions and recommendations of the report and the Bank's views on the matter. H. Readiness for Implementation El 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. 0 1. b) Not applicable. D 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. Z 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. L 4. The following items are lacking and are discussed under loan conditions (Section G): 1. Compliance with Bank Policies X 1. This project complies with all applicable Bank policies. DI 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. Piotr M. Wilcude Villiard Christian Delvoie Team Leader Sector Manager/Director Coun nager/Director - 19 - Annex 1: Project Design Summary ALGERIA: Ain Temouchent Emergency Earthquake Recovery Project g~~~~~~~1s _ i*wmm.#,. Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) To protect the poor during * Availability of * National statistics Availability of safe water and Algeria's transition to a permanent housing and * Country reports shelter will support human market economy safe water in the Wilaya * Housing sector studies development and alleviate of Ain Temouchent poverty. * Preparedness of the Government in future emergencies to protect the living conditions of low-income families Project Development Outcome / Impact Project reports: (from Objective to Goal) Objective: Indicators: * To restore normal 0 Families displaced by * PCU quarterly reports * Housing under this functioning of the earthquake move * Supervision mission project will increase the communities into permanent reports supply available to damaged by the housing * Project evaluation low-income families in December 22, 1999 * Replacements for the long term. earthquake in the technical infrastructure * Housing and Wilaya of Ain (water systems, infrastructure Temouchent sewerage, etc.) constructed under this destroyed by project will be earthquake are in use maintained in the long * Replacements for term. social infrastructure destroyed by earthquake are in use * To increase national * The Government's * The Government will preparedness for future emergency system is devote sufficient budget disasters strengthened. to maintain the disaster response system at an effective level. -20 - Output from each Output Indicators: Project reports: (from Outputs to Objective) component: A. The Govermment's disaster * Update of national * PCU quarterly reports. * The Government will response system was upgraded earthquake risk * Supervision mission fund operations and to handle future emergencies. assessment carried out. reports maintenance of the * Assessment of national * Project evaluation disaster response emergency system system. carried out. * Recommended equipment procured. * Recommended training provided. * System tested. B. Low-income housing units * 3400 new social rental * PCU quarterly reports. * Families find the new destroyed in the earthquake units constructed * Supervision mission housing preferable to were replaced. * 800 new individual reports tent camps and non-grouped units * Project evaluation acceptable for the long constructed term. * Newly built units are not destroyed in later earthquake or other disaster. C. Technical infrastructure * Technical infrastructure * PCU quarterly reports. * Municipalities take on destroyed in the earthquake destroyed in the * Supervision mission responsibility to operate was replaced. earthquake is identified. reports and maintain the * Reconstructed * Project evaluation reconstructed technical infrastructure is infrastructure. designed and the design * Reconstructed meets govermment's infrastructure not standards and the new destroyed in later building code. earthquake or other * Reconstructed disaster. infrastructure is built. D. Social infrastructure * Social infrastructure * PCU quarterly reports * Govemments re-open destroyed in the earthquake destroyed in the * Supervision mission social facilities. was replaced. earthquake is identified. reports * New facilities not * Reconstructed * Project evaluation destroyed in earthquake infrastructure is or other disaster. designed and the design meets govermmenfts applicable standards and the new building code. * Reconstruction of social infrastructure is carried out. -21- E7 A Project Coordination * PCU Director is * PCU quarterly reports * Project activities Unit supported project activity identified. * Supervision mission continue to receive 'enabling rapid provision of * PCU staff are hired. reports strong support from all sustainable solutions. * PCU carries out * Project evaluation agencies and identification of needed stakeholders. works. * PCU carries out procurement actions. * PCU supervises construction. * PCU provides all required reports. -22 - Project Components / Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) A. Upgrade disaster US$9.37 million * PCU quarterly reports * Government agencies management system, * Supervision mission will cooperate with especially with regard to reports consultants in studies earthquakes. * Annual audit reports and policy assessments * Categories and degrees of emergency which will affect Algeria in the planning period can be correctly estimated at reasonable cost B. Construct about 4200 US$65.78 million * Adequate supply of permanent housing units in building materials is the commnunities affected by available earthquake destruction. * Suitable sites for construction are made available C. Reconstruct essential US$8.39 million * Government provides its technical infrastructure share of financing destroyed by earthquake. * Construction firms and others bidding on project contracts have adequate capacity D. Reconstruct essential US$26.78 million * Security situation does social infrastructure destroyed not interfere with project by earthquake. activity E. Launch operations of a US$1.69 million * PCU retains support of Project Coordination Unit. government agencies and other stakeholders necessary to resolve land titling, procurement, contracting, and other issues speedily. 23 - Annex 2: Project Description ALGERIA: Ain Temouchent Emergency Earthquake Recovery Project By Component: Project Component I - US$9.37 million Component A: Disaster Organization and Risk Management The component will finance: * Acquisition of emergency response and search-and-rescue capacity in Algeria through the purchase of specialized equipment and training in the use and maintenance of the equipment; * Construction of facilities in Ain Temouchent and Ain Tolba to support the operations of Civil Protection in the region; * Assessment of Civil Protection's current voice and data communications capacities, development of recommendations for upgrades that build on current capabilities, enhancement of voice and data systems, and development of detailed earthquake response plans based upon detailed planning scenarios; 3 Completion of a seismic risk assessment and microzonation for Ain Temouchent; 3 Enhancement of the Algerian seismic monitoring network; 3 Review of the current standards, practices, and institutional capacities in building code enforcement and construction monitoring, including recommendations enhancing effectiveness; 3 Assessment of the policy alternatives and feasibility of instituting a national earthquake insurance program in Algeria based on a review of current international practices. A detailed description of the activities follows: A.1. Emergency Response and Rescue Equipment International experience demonstrates that the emergency operations in the immediate aftermath of major earthquakes are complex and require special capabilities and equipment. The project will support a program to enhance the operations of Algerian Civil Protection (including but not limited to search and rescue) through the purchase of specialized equipment as well as training in the use and maintenance of the equipment. Algerian Civil Protection will develop an equipment acquisitions report that details the strategic objectives, functions, type, deployment and training requirements for the proposed equipment for review by international consultants. A.2. Construction of Civil Protection Facilities in Ain Temouchent and Ain Tolba The decentralized Algerian Civil Protection system depends on the capabilities found in each region, wilaya, municipality and settlement. The December 1999 earthquake destroyed the principal operational facility in Ain Temouchent, which provides emergency response coordination for the Wilaya and adjacent areas. In addition, the facility in the village of Ain Tolba was destroyed. The project will support the efforts of the Government of Algeria to construct two new facilities to meet the needs of Civil Protection in the region. A.3. Assessment of Communications, Data and Information Management Systems used by Algerian Civil Protection -24 - The cornerstone of a rapid, coordinated and effective response to natural disasters is an effective communications system -- voice and data (including Geographic Information Systems) -- that links the municipal, regional and national levels of govermment. An effective system has redundancy, so that the failure of a single cormponent will not destroy the network, and the capacity to handle the large volume of information created following a natural disaster. The timely receipt, organization, analysis and display of this information guides the establishment of essential emergency response priorities and the deployment of critical resources to save lives and minimize property losses. The current communications system used by Algerian Civil Protection, while remaining fully functional during the Ain Temouchent earthquake, is highly dependent on telephones and fax machines and a network of microwave repeaters. There is minimal use of modern information management software and geographic information systems. In coordination with Civil Protection, the Project will support an assessment by international consultants of current emergency communications, information management and decision support systems in Algeria and the development of recommendations for priority equipment acquisitions. A.4. Upgrading Communications, Information Management and Operational Systems for Algerian Civil Protection Based on the assessments and recommendations developed in A.3, the Project will support the acquisition of upgraded communications and information management equipment and systems. International experience demonstrates that the effective use of this equipment by disaster response officials is greatly enhanced by decision support systems that combine the use of information management programs with realistic planning scenarios that provide a guide to potential losses and resource requirements. As part of the deployment of the enhanced communications, information management and decision support systems, the project will support the development by international consultants of an earthquake planning scenario for an Algerian metropolitan region that is considered to have significant seismic risk. This planning scenario is to serve as a guide in refining Algerian Civil Protection's management strategies for the emergency response to a large-scale, major earthquake. A.5. Seismic Risk Assessment and Microzonation for Ain Temouchent As noted above, prior to the December 22 earthquake, the Ain Temouchent region was not considered an area of significant seismic risk. Building codes placed the region in Zone 1, indicating low risk. In order to more completely understand the seismic risk in this region, and inform the building code development and implementation process, the Project will support technical assistance by international consultants to develop a study of the Ain Temouchent region. A.6. Seismic Monitoring Network Upgrades A dense array of monitoring instruments is essential to understanding seismic risk and providing rapid, accurate data to Civil Protection in the immediate aftermath of earthquakes. Since 1980 the Government of Algeria has expanded its seismic monitoring system on a regular basis; the Center for Geophysical Research (CRAAG) maintains a telemetered seismographic network and the National Earthquake Center for Engineering Research (CGS) maintains a network of 210 accelerometers to measure strong ground motion. Virtually all of the instruments are analog. The project will support enhancement of these networks and the purchase of digital instrunents based on priorities established by a joint committee of CRAAG, CGS and Civil Protection officials. - 25 - A.7. Assessment of Current Practices in Building Code Enforcement In Ain Temouchent and other areas of Algeria there are large numbers of residential and commercial building projects underway. Effective management of the nation's seismic risk can only be achieved through careful monitoring of new construction to ensure adherence to the nation's building codes. The project will support the preparation by intemational consultants of a study of current practices and institutional capacities related to the enforcement of building codes. The study shall include recommendations for enhancing, as appr( .:ate, the capabilities of Algerian agencies and organizations in the training, monitoring and supervision of building code enforcement for both public and private construction. A.8. Assessment of International Practices in Natural Hazards Insurance Programs Though losses from the Ain Temouchent earthquake were moderate, the overall seismic risk in Algeria suggests that large-magnitude earthquakes affecting one of the metropolitan areas would severely stress the national government's re- arces. In addition, there is little residential or commercial earthquake coverage in Algeria, and the insurance mechanism does not currently act as an incentive for individuals or businesses to undertake risk reduction measures. A recent trend among nations facing risk from large-scale natural disasters is to implement some form of earthquake insurance program to moderate strain on governmental operating budgets and to promote more effective risk reduction mechanisms. The project will support the preparation by intemational consultants of a study of altemative public insurance strategies for managing risk. This study is to include, but not necessarily be limited to, current programs in France, New Zealand, Germany, the United States (both federal and state), and Turkey. The study will include recommendations of altemative strategies, including potential costs, benefits and barriers to implementation, for consideration by the Algerian Government. The study will include discussions of current models used in each country to estimate risk and determine insurance rates, discussions of strategies used in securing reinsurance or other risk transfer strategies, as well as recommendations of altemative strategies, including potential costs, benefits and barriers to implementation, for consideration by the Algerian government. - 26 - Costs of Component A Totals including Contingencies by Financier Government Total Bank of Algeria I. Investment Costs A. Disaster Organization 1. Emergency Response and Rescue Equipment (Al) /a 2,532,863 2,000,962 531,901 2. Construction of Civil Protection in Ain T. and Ain Tolba (A2) 2,214,500 1,904,470 310,030 3. Data/Communications Assessment and Design (A3) 250,480 250,480 4. Data/Communications Enhancement (A4) 2,268,294 1,791,953 476,342 Subtotal Disaster Organization 7,266,138 5,947,865 1,318,273 B. Risk Management 1. Seismic Risk Assess. & Microzonation for Ain Tem. (A5) 350,470 350,470 2. Seismic Monitoring System Enhancement (A6) 1,090,232 861,283 228,949 3. Study of Bldg Code Enforcement Practices (A7) 151,500 - 151,500 4. Assessment of Alternative Public Insurance Strategies (A8) 193,435 - 193,435 Subtotal Risk Management 1,785,637 1,211,753 573,884 Total Investment Costs 9,051,775 7,159,618 1,892,157 II. Recurrent Costs A. Incremental Operating Cost Remedial Search and Rescue Training 83,767 - 83,767 B. Incremental Staff Communications Staff for Civil Protection 118,177 - 118,177 Seismic Monitoring Staff at CRAGG 118,177 - 118,177 Subtotal Incremental Staff 236,354 - 236,354 Total Recurrent Costs 320,121 - 320,121 Total 9,371,895 7,159,618 2,212,278 \a Algerian Civil Protection is exempt of customs tax. Project Component 2 - US$65.78 million Component B: Housing Damage overview. The earthquake of December 22, 1999 affected four communities: Ain Temouchent Sidi Ben Adda, Ain Tolba, and Ain Lalam. The majority of the damaged housing occurred in heavily populated areas, particularly in the town of Ain Temouchent which has a population of approximately 65,000. The main causes of structural damage were: * The age of many buildings, in conjunction with the method of construction for older buildings which used load-bearing, stone masonry walls. Cohesion of these walls failed, leading to the collapse or severe damage of the structures; * Inadequate design and construction methods in newer buildings. This resulted in loss of structural integrity in columns and column-beam connections, leading to collapse or severe damage; * Lack of awareness and proper studies of geological and geo-technical conditions. - 27 - Within a few days following the earthquake, the Government of Algeria conducted an assessment of damages. Depending upon the degree of damage, the housing units were classified as follows: red category: Units completely destroyed - To be reconstructed. orange category: Units severely damaged - Secondary inspection required to deternine whether each unit should be repaired or demolished. Repairs would be justified up to 50 percent of a unit's replacement cost. green category: Units lightly damaged - These would qualify for minor repair. The inspection teams assessed 3,470 buildings consisting of 6,940 housing units. hn total, 6,734 units were declared damaged, of which 2,708 were completely destroyed. Overview of Damaged Housing Units Community/ Heavily Medium Damage Light Damage SUm Municipality Damaged (red) (orange) (green) Ain Temouchent 1,350 1,080 933 3,363 Sidi Ben Adda 543 432 373 1,348 Ain Tolba 543 432 373 1,348 Ain Lalam 272 216 187 675 Total 2,708 2,160 1,866 6,734 Demand for Reconstruction The above assessment refers to both single-family houses and multi-family buildings. However, most of the damage occurred in two-story multi-family buildings located in the old town of Ain Temouchent. The data provided by the Government of Algeria were reviewed and investigated by a team of national specialists financed by the World Bank. The numbers provided by the Government of Algeria are generally consistent with those of the independent consultants. The secondary assessment of the orange category determined that 1,306 units needs to be reconstructed and that the remaining units could be repaired. In addition, it was found that about 10 percent of the units classified as green need to be demolished because of their proximity to units which have either collapsed or which qualify for demolition. Based on these findings, the total number of housing units to be reconstructed is estimated at 4,200, of which 3,400 are social rental and 800 are individual non-grouped housing units. - 28 - Demand for housing reconstruction Category Category Category Total Red Orange Green Housing units to be reconstructed 2,708 1,306* 186* 4,200 Social Rental Housing 3,400 Individual Non-grouped Housing 800* *based on a secondary assessment Beneficiary selection criteria. Only housing units that have to be reconstructed will be financed under this operation. Families eligible for assistance will be determined according to the Ministry of Housing decision which requires creation of a Commission under the supervision of the Wali, and consisting of: (i) elected representatives to local government; (ii) the Director of OPGI (Office for the Real Estate Administration); (iii) The Director of DUC (Social Rental and Building Administration); and (iv) The President of the Association of Disaster Victims. The procedures for beneficiary selection depend on two broad criteria: (a) demonstration that a family's housing unit was totally or severely destroyed, and (b) demonstration of eligibility for social housing under the Governnent's usual standards for social housing. These two criteria are applied in a process of up to three steps. First, through a participatory approach, documentation provided by an applicant is reviewed to show that the household resided in one of the units listed as having been damaged. The applicant may provide proof of ownership of such a unit, primary or secondary residence in such a unit according to the Acte de Location, or the list of the Wilaya, voters' registration, the census taken in 1998, rent contracts, utility bills or other records. If documentary proof is acceptable, then a dossier characterizing need is reviewed according to an algorithm which assigns points to various characteristics, including employment, household members, etc. If a certain number of points (110) is exceeded, then, together with loss of housing in the earthquake, this establishes eligibility for a unit financed by the project. If an application is rejected by the municipality, for example in the case of lack of documentation of residence, then the applicant may appeal to the Wali. If the Wali rejects the application, the applicant may appeal to the national level. These detailed procedures will be adopted and incorporated in the Project Implementation Plan. The following principles apply to the project: * Investment must be implemented under controlled and sound construction practices; * New construction must utilize appropriate, cost-effective design standards that protect against future seismic risks; * Investment must comply with environmental and social standards; * Investment is to be implemented in a timely manner; * The Borrower is responsible for providing an update of the damage assessment and list of eligible beneficiaries two weeks prior to distribution of bidding documents. Based on the update, the Bank will review the total number of housing units to be constructed; * Beneficiary records have to be filed at the PCU and presented to the Bank for review upon request. -29- Component B1: Demolition Costs associated with the demolition and the removal of debris is estimated at US$2.0 million. Demolition and debris removal is eligible for retroactive financing under Bank rules. This subcomponent will be carried out on the basis of environmental good practices (see Environmental Management Plan, Annex 12). Component B2: Social Rental Housing Reconstruction. This sub-component will finance reconstruction of housing units which have collapsed or cannot be repaired. In addition, units are eligible under this component if repair cost exceeds 50 percent of replacement cost. Based on the damage reports provided by the Government and the review by the team of specialists, approximately 3,400 social rental housing units will be financed under this operation. Based on social assessment and the request from the Government it is estimated that 100% of housing reconstruction falls into the category of social rental housing targeting the most deprived low-income families. The project will finance all of these units on sites to be identified and provided by the Borrower. The Government will be responsible for allocation of these units among the beneficiaries. Under the current policy, low income families (monthly income up to 15,000 DA) are eligible for social rental units. Housing space standards particularly fir low incomes are determined based on the following distribution of family size: Category Number of persons area in m Fl 1-3 30 F2 4-5 45 F3 6+ 60 According to the results of the social survey, confimned by the independent World Bank consultants and Government of Algeria investigations, Fl, F2 and F3 units will be required to meet the space needs of the earthquake struck population. Based on the distribution of family sizes, the average unit size is estimated at 50 m2. The cost per housing unit will vary depending on unit size and the site location. Based on recently completed projects in Ain Temouchent region and after adjusting for an added 5% seismic premium, average m2 cost is estimated at US$235. The Govemment representatives confirmed that this estimate includes the cost of studies, design and supervision as well as taxes (7% for construction of social housing). Therefore, construction unit cost is approximately US$200 per m2, that is US$10,000 per unit on average. In addition, an estimated US$2,000 per unit (or US$40 per square meter) is allocated for on-site and partially off-site infrastructure, including cost of taxes, studies, design and supervision. Excluding taxes, studies, design and supervision, the average cost per m2 of infrastructure is US$33. The table below aggregates the cost of studies, design and supervision for construction and infrastructure. It next aggregates taxes for construction and infrastructure. Excluding the cost of land, the total cost for reconstruction of a housing unit is calculated at US$13,750. - 30 - Construction Cost, Including Off-Site Infrastructure, Per m2 and Per Unit Item Cost per Cost per M2 50 m2 unit US$ US$ (A) Construction cost 200 10,000 (B) Infrastructure 33 1,650 Design, supervision at 11% 24 1,200 = (A+B)* 11% Taxes at 7% 18 900 =(A+B)*7% Total 275 13,750 * Excluding cost of land, physical and price contingencies. Based on the damage assessment, it can be estimated that 59% of those units will be reconstructed in Ain Temouchent, 20% in Sidi Ben Adda, 18% in Ain Tolba and 3% in Ain Lalam. Construction Cost for Reconstruction of Social Rental Housing Units Community/ Social rental Cost per Unit Total cost* Municipality housing Number of units US$ US$ Ain Temouchent 2,014 11,650 23,463,100 Sidi Ben Adda 682 11,650 7,945,300 Ain Tolba 602 11,650 7,013,300 Ain Lalam 102 11,650 1,188,300 Total 3,400 39,610,000 *Excluding design and supervision (included in Component B4), taxes, cost of land, physical and price contingencies. - 31 - Construction of up to 1000 units of housing is eligible for retroactive financing under the project. Houses under construction will be reviewed by an independent engineering company to assure compliance with Algeria's para-seismic standards as adopted by the Government in 1999. Retroactive financing will apply only after the Bank's review of the stated audit and the Bank's no-objection to a finding of satisfactory to such a review. Maintenance of rental units A number of reforms are underway with regard to management and cost recovery in the rental sector. For the units under public management, a number of changes have been introduced. First, the right to permanent occupation has been suppressed for new entrants, who now have three year renewable lease contracts. Second, gradual increases in the level of rent continue. The Government has implemented five increases in rent since 1998. A further rent increase is being implemented at present, to DA1,200 for a one room unit, DA1,800 for a two room, and DA3,000 for a three room unit. Current monthly rentals amount to 1,000 DA on average, which is 10 % of the average income of the occupants. The collection rate has improved with the use of rent collectors from 29% to 52%. The Government of Algeria is fully aware of the need for broader reforms in rent levels. The rent levels are far from adequate to cover even current costs. Based on the average unit cost of US$13,750, the annual maintenance cost (estimated at 2% of the value of the investment in initial years) would be approximately US$300 during the first years of the project. This cost would amount to at least 1750 DA/monthlfamily. Taling into consideration amortization of the housing investment, the level of rent which would ensure proper maintenance as well as amortization of the investment would represent on average more than 50% of the income of the Project's eligible beneficiaries. Therefore, it was decided with the Government that OPGI will be subsidized in order to ensure proper maintenance for a period of four years. Site Selection. The Borrower will be responsible for providing land with all necessary legal requirements in place for residential housing development as potential sites for new pernanent housing construction. The Government of Algeria has identified several potential housing development sites and provided the Bank with the list. Detailed Terms of Reference for the final selection of sites will be developed by the Borrower and approved by the Bank. The Terms of Reference will address the following considerations in full. A. Urban/Regional Planning. The sites of the destroyed housing units are generally not ideal for the reconstruction process due to the complexity of land ownership patterns. Rebuilding in situ would require scattered construction processes that would significantly increase the complexity of the construction process and therefore cause delay and raise costs. Selection of new sites must meet planning criteria that would minimize social and economic dislocation. The new sites must be suitable for long-term community building and go beyond the more limited criteria that would apply to strictly emergency housing. The cost-effectiveness of new construction should also be an important factor in selection of new sites. These criteria should include: a) proximity to existing infrastructure, social facilities, transportation and employment opportunities; b) housing standards that are appropriate for lower-middle class families; c) recognition of nearby housing capacity (capacity existing, planned, or under construction); and d) consideration of existing structural and land-use plans. - 32 - B. Social/lEnvironmental Issues. The Bank's environmental and social requirements, together with local laws and regulations, to be taken into account for the proposed sites are as follows: * Existing patterns of population and settlement; * Existing land use, de facto and regulated, such as protected heritage or natural resource sites, watershed or conservation areas; * Client consultation. C. Geo-Technical Investigation. Each proposed site will be investigated by a geo-technical consultant/expert to determine seismic and other conditions that may either eliminate the site or require special structural/foundation design. A geo-technical expert will establish Terms of Reference, and the above evaluation will be a prior condition for final site selection approval and for the procurement of design services. The geo-technical investigation will further identify sites where geological conditions would require special structural design, recommend suitable structural systems, and provide preliminary cost estimates. D. Infrastructure. Complete, up-to-date infrastructure based on local standards will be required for the new sites. The proposed sites will take into consideration proximity to existing, functioning infrastructure networks to minimize off-site infrastructure investment. The cost of necessary off-site infrastructure will be part of the development cost for each site and is estimated at US$2,000 per housing unit. Site Planning and Building Design. 3,400 new housing units need to be constructed. These units will be located in all four areas affected by the earthquake. The density of construction will depend on local and national government preferences and availability as well as site characteristics. A. Site Planning. Standards established by DUC and OPGI will guide the site planning process, focusing on beneficiary participation in site design and planning. The Bank will review site layouts, planning criteria, and methods to ensure beneficiary consultation. B. Building Design. The building design process will include beneficiary consultations. Based on similar design practices in the area (for example, the residential development of Hai Zeitoune in the Ain Temouchent district) building heights should not exceed five stories. This simplifies structural requirements, optimizes costs, and is in line with population expectations. The structural design will follow very strict anti-seismic requirements. It is preferable that whenever possible, more traditional construction methods be used, requiring intensive use of the local labor force in order to ease the hardships of the earthquake-affected population. Despite the possibility of a slight increase in cost, the building design will seek to introduce variety in both apartment architecture and urban design massing in order to allow for aesthetic diversity essential to future economic and social sustainability. Component B3: Individual Non-grouped Housing Reconstruction. The sub-component will finance the re-construction of individual non-grouped housing units. The beneficiaries under the supervision of independent consultants will undertake the construction activities. In addition, construction training will be provided through which the beneficiaries will gain qualification and experience in seismic-resistant construction. Strict geo-technical and structural requirements will be applied - 33 - to each site and to each housing unit. The beneficiaries will purchase materials according to technical specifications. No modifications will be made to the standard designs, and no materials may be used that do not have prior approval from the PCU. Payments to beneficiaries will be made in increments. The first advance payment will be made only after evidence of clear title to the land is provided by the beneficiaries. The remaining payments will be made in stages as approved by the PCU. Approximately 800 housing units are estimated to be eligible for reconstruction. The average size of a projected individual non-grouped housing unit is 50 m2 and average cost per m2 is estimated at approximately US$ 180, which includes house connection but excludes the cost of land and off-site infrastructure. Thus, the reconstruction of an average individual non-grouped unit is calculated at US$9,000, equivalent to DA 630,000. As in social rental areas, the component will provide a subsidy scheme for individual non-grouped families based on the income distribution. The grants can only be used for purchasing construction materials. Family Income Yearly Grant for materials (FI) Income (YI) DA DA FI< 2SNMG* YI< 144,000 350,000 * SNMG stands for the minimal wage, which in 1999 was DA 6,000 per month The sweat contribution of the beneficiaries is estimated at 44 percent of the total reconstruction cost. In case of the low-income beneficiaries, the grant for materials is sufficient to finance 56 percent of the total re-construction cost. Income Grant Beneficiary Beneficiary Total Group for Sweat Contribution Financial DA Materials DA Contribution DA DA I 350,000 280,000 0 630,000 56% 44% 0% 100% Based on Social Assessment and following the policy of the Govermment of Algeria it is estimated at this time that 100% of beneficiaries will fall into income group I. It is agreed that this sub-component will be financed by the Government of Algeria. Taking the above into account, the cost for the individual non-grouped housing sub-component is estimated at US$7.2 Million. - 34 - Component B4: Consultant Services for Design, Site Investigation, Soil Investigations and Supervision. Design offices as well as independent consultants will be required to prepare site plans, carry out geo-technical soil studies and site investigations, undertake architectural and structural design and supervise apartment building construction during implementation of social rental housing reconstruction. For individual non-grouped housing reconstruction, consultants will prepare standard designs and provide training, construction management and supervision. In addition, consultants will ensure that specified materials are purchased and used, construction is supervised, and payments are approved according to progress in construction. Estimated Cost for Consultant Services Consultant Services Site selection, survey building design Supervision TOTAL (US$) (US$) (US$) Social Rental Housing 2,050,000 2,050,000 4,100,000 Individual Non-grouped 300,000 500,000 800,000 Housing Total 2,350,000 2,550,000 4,900,000 - 35 - Costs of Component B Total including Contingencies By Financier Government Total Bank of Algeria Beneficiaries I. Investment Costs A. Demolition and Debris Disposal /a 2,000,000 1,600,000 400,000 B. Social Rental Housing Reconstruction Ain Temouchent 27,345,784 23,462,683 3,883,101 Sidi Ben Adda 9,260,092 7,945,159 1,314,933 Ain Tolba 8,173,864 7,013,175 1,160,689 Ain Lalam 1,384,940 1,188,279 196,662 Subtotal Social Rental Housing Reconstruction 46,164,681 39,609,296 6,555,385 C. Individual Non-Grouped Housing Reconstruction 7,935,506 - 3,967,753 3,967,753 D. Site Selection, Survey, Design and Supervision 1. Social Rental Housing Related 5,439,760 4,099,947 1,339,813 - 2. Individual Housing Related 1,061,417 799,990 261,427 Subtotal Site Selection, Survey, Design and Supervision 6,501,176 4,899,936 1,601,240 - Total Investment Costs 62,601,363 46,109,233 12,524,377 3,967,753 II. Recurrent Costs A. Housing Maintenance 3,177,548 - 3,177,548 - Total Recurrent Costs 3,177,548 - 3,177,548 - Total 65,778,911 46,109,233 15,701,926 3,967,753 \a Eligible for retroactive financing. Project Component 3 - USS 8.39 million Component C: Technical Infrastructure Objective. The objective of this component is to restore essential infrastructure in the area affected by the December 22, 1999 earthquake. The component includes design, supervision and reconstruction of infrastructure: water supply systems, sewerage systems and wastewater treatment plants (including construction of a new one for Ain Temouchent), roads and sidewalks. The reconstruction of these facilities shall be made in accordance with the current standards prevailing in Algeria, incorporating recommendations of the engineering consultants who will supervise the designs and construction of the facilities under contract with the PCU. Experts will also determine the need for assistance to local communities in procurement, design, construction, supervision and various field surveys required to assure compliance with quality standards and regulations. The component does not include financing of power distribution and telecommunication systems, since major damages to these sectors were not reported. Specific required investments have been identified by the representatives of municipal and provincial governments in the province as having the highest priority based upon local needs. Technical and cost data for each investment have been prepared by the Algerian authorities and verified by outside independent consultants working with the local authorities and the Bank. - 36 - Component Cl: Municipal Water and Wastewater Systems. Following the earthquake, the City of Ain Temouchent and several adjoining localities, including the towns of Sidi Ben Adda, Ain Tolba, and Ain El Allem have been without a reliable drinking water supply. The main water conveyance line which delivers water from a 40,000m3 reservoir was ruptured. The pipeline crosses a major fault line along which the earthquake occurred. Other pipelines (Alirnentation d'Eau Potable, or AEP) were also damaged as were some 12 water well installations which need to be tested and rehabilitated. Additionally, four concrete water pressure storage tanks near Sidi Ben Adda and Ain Tolba were damaged (two severely), and need to be repaired or replaced. All are of reinforced concrete. Two have 100m3 capacity; one has 1501rn; one has 250mr. It should be noted here that the type of construction used for these tanks (reportedly built during colonial times) makes them inherently susceptible to damage during earthquakes; and repairing them is unlikely to ensure their structural integrity during future seismic events. The damages sustained, still under assessment, appear to be serious enough to render support for consideration of replacing the tanks with modern steel or reinforced concrete tanks designed to resist daamage during more severe earthquakes. The decision as to which type of tanks should be built to replace the existing ones, should be based on economic analysis taking into account installation and maintenance costs, estimated tank life, and resistance to earthquakes. A drinking water supply system which would function during a natural catastrophe such as an earthquake could prevent many water-related problems which contribute to additional devastation and human suffering. Consequently, the improvement of the structural safety of the entire water supply and distribution system in the Wilaya should become a high priority item on the road to full recovery. Additionally, it is indicated that an engineering dam safety review of the main water storage reservoir near Ain Temouchent needs to be undertaken to ensure that this structure did not sustain any significant damage during the earthquake, and is capable of withstanding any future ones. According to the data provided by the local authorities, there was some damage to sewer lines within Ain Temouchent and other affected communities. These lines will have to be repaired and/or replaced. The part of the city of Ain Temouchent where most of the household units are going to be built is not serviced by a wastewater treatment plant (WWTP). The existing WWTP is located on the other side of the city and has a limited capacity of 15,000 eq. inhabitants. The Bank recognizes the necessity of providing appropriate sanitation to the beneficiaries of the housing component but also to neighboring population, and consequently recommends that the necessary financing for this facility be included in the current loan package. A pre-feasibility study will first be conducted in order to assess the appropriate technology from the point of view of cost-effectiveness, operations and maintenance. The idea of constructing the plant as part of emergency infrastructure restoration was discussed and approved by the Ministry of Hydraulics which had developed a preliminary technological design for it. The plant construction cost was estimated by this government agency at US$ 2A million. This cost appears low in western standards for a conventional secondary wastewater plant of this size, however the design based on "modular" simple biological system and exclusion of the purchase of the land (to be provided by the - 37 - Wilaya) that often represents 30 to 40% of the operation would significantly reduce the total cost of the above investment. At this stage there is no rational reason to arbitrarily increase the above estimated cost. It is recommended that independent experts evaluate proposed design and cost estimate. The table below summarizes the estimated investment costs for reconstruction of the water and wastewater infrastructure within the Wilaya of Ain Temouchent. The estimates are based on the information furnished by the Wilaya's offices and by the independent consultants under contract to the Bank. Additional US$ 300,000 is allocated for dam/water reservoir study. Rehabilitation of Water and Wastewater Systems Tasks Estimated Cost in US$ million * Reconstruction of water lines, 2.2 including rebuilding of storage tanks Construction of new 2.4 wastewater treatrnent plantlsewer lines Inspection and repair of 0.2 distribution lines and water wells Total 4.8 * excluding taxes and contingencies Component C2: National, Regional and Local Roads. A total of about 45 km of roads need to be repaired or partly reconstructed. This includes the rehabilitation of the national roads RN2, RN35 and RN96, the Wilaya Road CW10, and the rural road CR leading to Ain Alem. An estimate of the investment cost -- US$1,2 million -- was provided to the Bank's mission for these repairs, which would include engineering, demolishing sections of the existing roads, excavation and backfill, new road base, culverts and erosion protection work, asphalting, traffic control works, and supervision of construction. The proposed expenditures for specific key items are summarized in the table below: Road reconstruction Tasks Estimated Cost in US$ million * Repair of RN2, RN35, RN96 0.7 Repair of local Wilaya Road CW1O 0.3 - 38 - Repair of rural road 0.1 Total 1.1 * excluding taxes and contingencies The above estimate is for the repairs of road damages sustained during the earthquake; costs for road improvements which go beyond their pre-earthquake condition, are not included. Component C3: Consultant Services for Design, Site Investigation, Soil Investigations and Supervision. Design offices as well as independent consultants will be required to carry out geo-technical soil studies, laboratory tests and site investigations, undertake engineering and structural design and supervise construction during implementation. Estimated costs of these services are shown in the table below and represent approximately 10% of the cost of investments with 5% towards studies and design and 5% for supervision. Additional US$ 300,000 is allocated for dam/water reservoir study. Estimated Cost for Consultant Services Services Site investigation, survey Supervision TOTAL engineering and design (in US$) Rehabilitation of Water and 250,000 250,000 500,000 Wastewater Systems Road Reconstruction 50,000 50,000 100,000 Dam/Reservoir Safety Study 300,000 300,000 Total 600,000 300,000 900,000 - 39 - Costs of Component C Totals Including Contingencies By Financier Total Bank Govemment I. Investment Costs A. Municipal Water Supply and Wastewater Systems Reconstruct water lines & rebuild storage tanks 2,665,531 2,179,338 486,193 Constructon of new wastewater treatment plant/sewer lines 2,962,382 2,422,044 540,338 Inspection and repair of distrbution lines and water wells 242,321 198,122 44,199 Subtotal Municipal Water Supply and Wastewater Systems 5,870,234 4,799,504 1,070,731 B. National, Regional and Local Roads Repair of RN2,RN35,RN96 858,727 702,095 156,632 Repair of Local Wilaya Road CW10 368,026 300,898 67,128 Repair of rural road 122,675 100,299 22,376 Subtotal National, Regional and Local Roads 1,349,428 1,103,292 246,136 C. Studies, Designs and Supervision 1. Water and Wastewater Related Site investig., Survey and Design & Dam Safety Study 714,649 549,994 164,655 Supervision 324,840 249,997 74,843 Subtotal Water and Wastewater Related 1,039,489 799,991 239,498 2. Road Reconstruction Related Site Investig., Survey and Design 64,968 49,999 14,969 Supervision 64,968 49,999 14,969 Subtotal Road Reconstruction Related 129,936 99,999 29,937 Subtotal Studies, Designs and Supervision 1,169,425 899,990 269,436 Total 8,389,087 6,802,785 1,586,302 Project Component 4 - US$26.78 million Component D: Social Infrastructure Objective. The principal objective of this component is to assist and provide financing for the reconstruction of public buildings which provide normal social services and include schools, hospitals, recreation centers, local and central government offices. Restoration of such facilities is essential to bringing back a sense of stability and normality to the community, and restoring confidence in the government's ability to deal with public catastrophes. The Government of Algeria conducted an assessment of darnages and the data were reviewed and investigated by a team of national specialists financed by the World Bank. Component DI: Education. Of the 39 school buildings located within the Wilaya Ain Temouchent, 12 were heavily damaged and will have to be reconstructed. The largest of these schools was Lycee Bachir Ibrahimi in Ain Temouchent which had about 1340 students. This school was devastated and will have to be completely reconstructed. The earthquake also effectively damaged four others which will require major repairs. The schools damaged or destroyed by the earthquake were built during different periods, using a variety of construction techniques and materials. Consequently, in order to ensure that the reconstruction cost estimates are realistic, the estimates must reflect differences in the type of construction. - 40 - The building construction varied from the old colonial period type of brick and stone masonry reinforced by steel girders, to a more modem construction of reinforced concrete beamns and column frames with slabs. Both types of buildings suffered severe damage, due to inappropriate designs such as inadequate reinforcement ofjoint connections, weak foundations, and/or poor quality-control of building materials. It is thus of paramount importance to ensure that the reconstruction of these buildings is carried out in accordance with appropriate seismic codes and is supervised by qualified engineering consultants and experienced contractors. The siting of each school should be investigated from a geo-technical point of view to avoid geologic and soil conditions unfavorable to seismic stability as well as from an environmental point of view (see EMP, Annex 12). In many instances, these considerations may require relocation of a school from its current site. A new site may have to be supplied with additional infrastructure which may increase overall reconstruction cost. Therefore, any final site selection should be based on an analysis of site-specific requirements and their impacts on cost. The necessary infrastructure included in unit cost per m2 was estimated to be 10% of construction cost. The table below presents a list of schools which will have to be rebuilt, and provides the estimated capital cost investment for the reconstruction of each facility. Construction Cost for School Reconstruction Name of the school Number of Area m2 Unit Cost Estimated Cost in students $/M2* US$ Primary schools: 1st and (2.5m2/ 2nd cycle student) Mouloud Feraoun 331 830 320 265,600 El Ghazali 393 1000 320 320,000 Marie Curie 356 900 320 288,000 Larbi Fekhar 182 455 320 145,600 Ibn Badiss 228 500 320 160,000 Taleb Abderahmane 281 700 320 224,000 Bekhit el Hadj 625 1600 320 512,000 Ibn Badiss (Ain Tolba) 430 1100 320 352,000 Tahar Ahmed 363 900 320 288,000 Subtotal 2,555,200 Middle schools: 3rd cycle (5m2/student) CEM 17 Octobre 545 2725 360 981,000 -41 - CEM Max Marchand 453 2265 360 815,000 Subtotal. 1,796,000 Secondary schools (5m2/student) Lycee B. El Ibrahim * 1500 7500 450 3,375,000 TOTAL 7,726,200 * Construction cost excluding cost for: design, supervision, taxes, contingencies and land The unit costs per square meter shown above were based upon an examination of common practices and comparison with similar school construction projects. It has been assumed that each school would be reconstructed approximately to its pre-earthquake size taking however into consideration local norms regarding the necessary per student area. The estimates were developed by the consultants financed by the Bank and confirmed with local authorities during the appraisal mission. Based upon the consultants' evaluation, all of the above schools will, in all probability, have to be completely rebuilt. A more detailed engineering inspection will be conducted during the implementation process. The remaining schools that were damaged, but can be repaired in the consultants' judgement, are not listed here and their repair costs are to be covered by the Government. Reconstruction of primary schools is eligible for retroactive financing. Component D2: Health The earthquake also destroyed or damaged numerous regional health facilities. Eight small health centers were severely damaged and three partially damaged. Some of these were very old and will need to be completely rebuilt (see the table below) to new standards. Of special concern is the main hospital in Ain Temouchent. this hospital, more than 100 years old, was severely damaged: three pavilions collapsed and several others were severely damaged. The remaining buildings are in high risk in case of another earthquake. The Government has requested that a 240-bed hospital be built to partially replace the old hospital. The unit cost per m2 of health facilities was estimated based upon examination of similar construction projects by the consultants working with the Bank and confirmed with local authorities during the appraisal mission. The infrastructure included in unit prices was estimated to be 20% of construction cost for the hospital and 10% of construction cost for smaller health centers. Construction Cost for Health Facility Reconstruction (excluding the cost of design, supervision, equipment, taxes, contingencies, and land) - 42 - Name of Health Facility Type Area M2 Unit Cost Estimated cost /rn2 (US$) Ain Temouchent Hospital 10250 600 6,150,000 Meghni Sendid Health Clinic 100 400 40,000 Sidi Said Health Clinic 300 400 120,000 Sidi Ben Adda Health Clinic 180 400 72,000 Cheouilef Salah Nursing Center 200 400 80,000 Amour Ahmed Health Clinic 400 400 160,000 6,622,000 Total The equipment cost for all health facilities was estimated at US$4,485,000 with US$4,285,000 for the equipment for the Hospital in Ain Temouchent and US$200,000 for smaller health centers. Component D3: Public Buildings Three public buildings were seriously damaged and fourteen others will require major repairs. This component does not include financing for the restoration of two official residences. The most damaged administrative public building, for which financing will be made available, is the Court Building at Ain Temouchent, which will need a complete reconstruction. Post office buildings in Sidi Ben Adda and Ain Tolba sustained damage which can be repaired. However, the regional art center at Ain Temouchent was heavily damaged. Damage estimates for the public buildings were made by the Bank consultants and are as follows: Total Cost for Reconstruction of Public Buildings and Facilities Namne of the building Location Estimated cost (USD million) Folk Art Center Ain Temouchent 0.120 Main Post Office Ain Temouchent 0.360 Court House Ain Temouchent 0.400 Total 0.880 Site Selection and Geo-Technical Investigations -43 - The rebuilding of public facilities destroyed by the earthquake will require a careful engineering analysis of the causes of such destruction - which may lead to the conclusion that a given facility may have to be relocated. In such cases, it shall be the responsibility of the Borrower to identify and designate state or local public land suitable for siting the new facilities. Such sites will be investigated to identify specific geo-technical conditions, and the resulting engineering design criteria. The investigations will focus on: * defining geologic and soil site conditions; * defining, where appropriate, environmental requirements or mitigating measures; * providing cost estimates for foundations and structure(s); * estimating costs of additional infrastructure requirements (utilities, access roads etc. not available at the new site; * comparing the overall cost of relocation with the estimated cost of the same facility seismically reinforced at its original site (in some situations such a comparison may not be possible due to unacceptable geo-technical conditions). The final decision as to where a given public facility is to be located should also take into consideration how critical this facility becomes in the event of a public disaster; for example, a functioning hospital would be certainly more important than a recreational facility. Notwithstanding the above, the reconstruction of all public facilities must adhere to modem building design codes, follow proven construction practices in seismically-prone regions, and ensure the use of the specified quality of construction materials. The fact that serious damages occurred to both buildings constructed in 1950s and before, as well as to those built as recently as the late 1980s, indicates that these guidelines were not being followed. Component D4: Consultant Services for Design, Site Investigation, Soil Investigations and Supervision. Design offices as well as independent consultants will be required to carry out geo-technical soil studies, laboratory tests and site investigations, undertake architectural and structural design and supervise construction during implementation. Estimated costs of these services are shown in the table below and represent approximately 12% of the cost of investments with 6% towards studies and design and 6% for supervision. Estimated Cost for Consultant Services Services Site investigation, Supervision TOTAL Survey engineering (in US$) and design School Reconstruction 460,000 460,000 920,000 Health 400,000 350,000 750,000 Public Buildings 55,000 50,000 105,000 Total 915,000 860,000 1,775,000 -44 - Costs of Component D. Totals Including Contingencies By Financier Total Bank Governmen I. Investment Costs A. Reconstruction of Schools Mouloud Feraoun 325,825 265,580 60,245 El Ghazali 392,561 319,976 72,584 Marie Curie 353,305 287,979 65,326 Larbi Fekhar 178,615 145,589 33,026 Ibn Badiss (Ain Tolba) 196,280 159,988 36,292 Taleb Abderahmane 274,793 223,983 50,809 Bekhit El Hadj 628,097 511,962 116,135 Ibn Badiss 431,817 351,974 79,843 Tahar Ahmed 353,305 287,979 65,326 CEM 17 Octobre 1,203,444 980,927 222,517 CEM Max Marchand 999,803 814,940 184,864 Lycee B. El Ibrahim 4,140,289 3,374,750 765,539 Subtotal Reconstruction of Schools 9,478,133 7,725,627 1,752,507 B. Reconstruction of Health Facilities Ain Temouchent Hospital 7,492,986 6,149,494 1,343,492 Medical Equipment for Ain T. Hospital 5,570,823 4,285,077 1,285,746 Meghni Sendid Clinic 48,735 39,997 8,738 Sidi Said Clinic 146,205 119,990 26,214 Sidi Ben Adda Clinic 87,723 71,994 15,729 Cheouilef Salah Nursing Center 97,470 79,993 17,476 Amour Ahmed Health Clinic 194,939 159,987 34,953 Medical Equipment - Other Hospitals 260,015 200,004 60,011 Subtotal Reconstruction of Health Facilities 13,898,896 11,106,535 2,792,360 C. Reconstruction of Public Buildings Folk Art Center - Ain Temouchent 147,210 119,991 27,219 Main Post Office - Ain Temouchent 441,631 359,973 81,658 Court House - Ain Temouchent 490,701 399,970 90,731 Subtotal Reconstruction of Public Buildings 1,079,542 879,935 199,607 D. Investigations, Designs and Supervision 1. School Reconstruction Site Invest., Survey and Design 603,195 459,996 143,198 Supervision 603,195 459,996 143,198 Subtotal School Reconstruction 1,206,389 919,992 286,397 2. Health Facilities Reconstruction Site Invest., Survey and Design 524,517 399,997 124,520 Supervision 458,952 349,997 108,955 Subtotal Health Facilities Reconstruction 983,470 749,994 233,476 3. Public Buildings Site Invest., Survey and Design 72,121 55,000 17,122 Supervision 65,565 50,000 15,565 Subtotal Public Buildings 137,686 104,999 32,687 Subtotal Investigations, Designs and Supervision 2,327,545 1,774,985 552,559 Total 26,784,116 21,487,082 5,297,033 Project Component 5 - US$1.69 million -45 - Component E: Project Implementation To allow for a timely and efficient implementation of the project, the following institutional arrangements are foreseen. Interministerial Committee for Coordination, and Follow-up for Reconstruction of Ain Temouchent Disaster Area (CICS). The Intenninisterial Committee for Coordination, and Follow-up for Reconstruction of Ain Temouchent Disaster Area (CICS) will be established. Its membership will include the Minister of Interior or his representative (Chair), the Minister of Finance, the Minister of Housing, the Minister of Health, the Minister of Water, the Director of the General Directorate of Environment, and representatives of non-governmental organizations. The CICS will be responsible for providing project oversight, advice and overall guidance for the implementation of the project, and will review the project's quarterly progress reports. Project Coordination Unit (PCU). The Project Coordination Unit will assist implementing agencies and in close cooperation with them will help in implementation of the project. The PCU will report to the Govemor of the Wilaya who will oversee its activities. The Director of the PCU will have the authority of hiring or dismissing staff of the PCU, subject to the Bank's approval. T'he PCU together with implementing agencies will be responsible for issuing procurement notices, inviting tenders, and appointment of a selection committee. In its procurement activities, the PCU will incorporate designs and technical specifications provided to it by the corresponding sector agencies of the Wilaya (for Components B, C and D) and by the General Directorate of Civil Protection (for Component A). Contracts prepared by the PCU will be signed by the Governor of the Wilaya or the Governor's designee, which may be the Director of the PCU and the Head of a respective implementing agency. The PCU will be responsible for continuous monitoring of progress in project implementation, preparation of quarterly Project Management Reports (PMRs), quality control, and together with implementing agency will issue a letter of compliance with tenns of contract and submit the letter to the BAD for payment. Based on terms of reference developed by local technical departments and agencies in cooperation with the PCU, the PCU (in coordination with the local technical departments and agencies) will prepare bidding documents and contracts for construction works, goods and consultant services for all components. The PCU together with implementing agencies will also establish work programs and detailed implementations schedules for each component, and defne precisely responsibilities of each party involved in project implementation. The Director of PCU will report to the Governor of Wilaya, but in cases which require higher authority to resolve issues that can be only cleared through a central level intervention, the Director will be able to refer directly to the Minister of Interior. In order to ensure application of the proper procurement procedure and to monitor these functions, the PCU will hire an experienced Procurement Specialist familiar with the Bank's procurement procedures and guidelines. The PCU will be responsible for monitoring compliance of the supported by project activities with environmental standards. For this purpose the PCU staff will include an Environmental Specialist. In order to effectively monitor social aspects of project implementation, the PCU will hire a Social Scientist who will conduct surveys, field visits, and prepare quarterly reports in accordance with the guidelines - 46 - provided in the Social Assessment. For timely payment of invoices to the works, goods, and service providers, a designated BAD representative will become a staff member of the PCU, and perform his/her functions within its structure. The PCU will monitor the financial flows resulting from realization of contracts and progress in implementation of individual activities. In order to effectively perform this function, the PCU will set up and maintain a computerized monitoring and management system which will comply with the World Bank standards. The established system will enable the PCU to prepare the quarterly progress reports and other necessary documents in a timely and accurate manner. The following chart depicts implementation arrangements designed for the project, including a proposed internal organizational structure for the PCU itself. Project Organization Chart Governor CvlPoeinUnit d (Compoent B) WilayaI Com nctoreofAPCU D e Oo Rai Ranagement U managemnttasforceillbe locatd in t al eTaskForce l a Prcurement r o CGS, AdAAso C Specialbst ll F HinangTalhepronnjl Depuct t w Deputo nDib for impleentin the c a wonitoopn9 ent, |al C anagen - HousingR STiae Technical have an Covrdal Teo m Leader c i o | OminHl(22) g | bffsshbt' Arc^hitatuEnginee niomn oS1 l X | ~Represnbtivt Implementation Modalities. While the above institutional arrangement reflects the general framework of the project management, there are some modalities conceiming implementation of the specific components. These variations are described below. Component A - Disaster Organization and Risk Management. Under this component an ad-hoc risk management task force will be located in the General Directorate of Civil Protection (DGPC) in Algiers and will include, besides DGPC representatives, representatives of CGS, CRAAG, CTC and the Ministry of Housing. The project team will be responsible for implementing the component, and will refer to the PCU in Ain Temouchent for all matters related to procurement. In the process of implementation the task force will cooperate with other relevant agencies. Component B - Hlousing. The PCU will have an overall responsibility for coordination and implementation of this component. The OPGI will be responsible for drafting the TORs, technical specifications, participation in the procurement selection comrnittee at the Governor's level. Also, the OPGI will be involved in supervision and quality control. -47 - The PCU would be responsible for carrying out the procurement and signing of contracts together with OPGI and the representative of the Governor (co-signing). The PCU would also hire international and national consultants to supervise construction works, to review designs and to have overall quality control responsibility. Component C - Technical Infrastructure and Component D - Social Infrastructure. The full responsibility for implementation of this component rests within the PCU and respective local technical departments and agencies. Relevant sector specialists from the Ministries of Interior, Water, Education and Health in the Wilaya will be responsible for the preparation of design criteria for the reconstruction of various public facilities damaged during the earthquake, the preparation of appropriate terms of reference under the PCU guidance, and ensuring that the sector accepted design and construction practices, are being followed. PCU will issue appropriate terms of reference and jointly with the sector representatives, will select needed independent consultants and contractors to carry out the required work. PCU staff and their consultants will carry out periodic quality control inspections of both the design and construction work and will assist contractors in obtaining the necessary permits, resolving any controversies or issues which may impede work progress, and ensuring that the Government and Bank seismic standards and environmental regulations, are complied with. Costs. The following table shows the breakdown of the project management costs. Costs for Component E Total Costs Including Contingencies By Financier Total Bank Government I. Investment Costs Staff Salaries and Fees 505,300 - 505,300 Training 324,620 324,620 - PCU Operating Costs 539,267 485,090 54,177 Equipment and Furniture 318,731 253,816 64,915 Total 1,687,918 1,063,526 624,392 Customs and Duties. Bank funds cannot be used to finance local taxes (such as customs duties, sales tax, income tax, etc.). The import tax due on any Bank-financed goods will be paid by the Government or beneficiary. Monitoring and Evaluation. The PCU will continuously monitor the implementation of the project. The staffing of the PCU includes specialists who will deal with specific aspects of the implementation, and the computerized monitoring and management infonmation system that will be established will allow for timely and accurate data collection and reporting. Also, supervision will be carried out by the Bank team in cooperation with local consultants. Beyond regular Bank midterm review of the project, one year after effectiveness the Bank will conduct a review of key project issues, including progress on Disaster Organization and Risk Management, demand for housing, maintenance of housing and other works financed by the project, and other issues. -48 - Annex 3: Estimated Project Costs ALGERIA: Ain Temouchent Emergency Earthquake Recovery Project A. Disaster Organization and Risk Management 3.28 5.28 8.56 B. Housing 53.25 7.20 60.45 C. Technical Infrastructure 6.65 1.16 7.81 D. Social Infrastructure 16.77 8.16 24.93 E. Project Implementation 1.04 0.55 1.59 Total Baseline Cost 80.99 22.35 103.34 Physical Contingencies 2.53 1.07 3.60 Price Contingencies 4.51 0.55 5.06 Total Project Costs 88.03 23.97 112.00 Front-end fee 0.84 0.84 Total Financing Required 88.03 24.81 112.84 Goods 3.08 8.96 12.04 Works 78.06 9.28 87.34 Technical Assistance and Training 6.37 5.72 12.09 Operating Cost 0.54 0.00 0.54 Total Project Costs 88.05 23.96 112.01 Front-end fee 0.84 0.84 Total Financing Required 88.05 24.80 112.85 -49 - Annex 4 ALGERIA: Ain Temouchent Emergency Earthquake Recovery Project The economic and financial analysis is not required in accordance with OP 8.50. - 50 - Annex 5: Financial Summary ALGERIA: Ain Temouchent Emergency Earthquake Recovery Project Years Ending 2001-2003 Year I Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 Total Financing Required Project Costs Investment Costs 44.8 50.4 13.4 0.0 0.0 0.0 0.0 Recurrent Costs 0.4 1.4 1.7 0.0 0.0 0.0 0.0 Total Project Costs 45.2 51.8 15.1 0.0 0.0 0.0 0.0 Front-end fee 0.8 0.0 0.0 0.0 0.0 0.0 0.0 Total Financing 46.0 51.8 15.1 0.0 0.0 0.0 0.0 Financing IBRDIIDA 35.5 39.0 8.9 0.0 0.0 0.0 0.0 Government 9.3 11.2 4.9 0.0 0.0 0.0 0.0 Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiers 0.0 0.0 0.0 0.0 0.0 0.0 0.0 User Fees/Beneficiaries 1.1 1.6 1.2 0.0 0.0 0.0 0.0 Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 45.9 51.8 15.0 0.0 0.0 0.0 0.0 |Year 1 |Year 2 |Year 3 |Year 4 |Year 5 |Year 6 |Year 7 Total Financing Required Project Costs Investment Costs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Recurrent Costs 2.0 2.3 2.6 0.0 0.0 0.0 0.0 Total Project Costs 2.0 2.3 2.6 0.0 0.0 0.0 0.0 Front-end fee 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Financing 2.0 2.3 2.6 0.0 0.0 0.0 0.0 Financing IBRDIIDA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Government 2.0 2.3 2.6 0.0 0.0 0.0 0.0 Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiers 0.0 0.0 0.0 0.0 0.0 0.0 0.0 User Fees/Beneficiaries 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 2.0 2.3 2.6 0.0 0.0 0.0 0.0 Main assumptions: The operational period for the Algeria TEERP is assumed to be 3 years. -51 - Annex 6: Procurement and Disbursement Arrangements ALGERIA: Ain Temouchent Emergency Earthquake Recovery Project Procurement Procurement for the proposed project would be carried out in accordance with World Bank Guidelines: Procurement under IBRD Loans and IDA Credits, published in January 1995, revised January and August 1996, September 1997 and January 1999, as well as Guidelines: Selection and Employment of Consultants by World Bank Borrowers, published in January 1997 and revised January 1999, and also the provisions stipulated in the Loan Agreement. A list of procurement items has been identified and procurement plans prepared and agreed with the Borrower at appraisal. Additional items may be identified during implementation. In such cases the procurement plan will be revised following the principles agreed at appraisal, with minimum processing times for the Borrower and the Bank. Procurement Review Arrangements: Given the speedy action required at each step in the process, agreement will be reached with the Borrower on standard processing times for actions such as preparation of bidding documents and specifications, bid evaluation and award recommendation, award and contract signing, etc. A Project Coordination Unit (PCU) shall be established as soon as possible. Delegation of functions and approval procedures within the Government should be streamlined and agreed to avoid delays. The PCU shall have a procurement specialist on staff. In addition, the Borrower will consider support of qualified procurement consultants from MNA to advise and train the PCU. Delay in procurement actions will not be used to justify emergency procurement procedures. Given the large volume of procurement work to be completed in a short period of time, a representative with adequate power from the Governor's office will be identified to co-ordinate all emergency activities. Procurement Accredited Staff (PAS) in MNA should coordinate the procurement function. The RPA's office should be consulted for mandatory reviews and any other guidance. Procurement methods (Table A) Goods ICB. For contracts each estimated to cost US$0.5 million or more, simplified ICB procedures as described below will be used. (a) Advertisement. As early as possible but no later than the time major items to be procured are identified, a General Procurement Notice (GPN) will be published for every project in Development Business announcing ICB procurement packages and consultant services and inviting interested eligible suppliers, contractors and consultants to send their expression of interest to the PCU in Algeria. The GPN will also be published in the local Algerian press. The GPN will be followed by specific advertisements for individual contracts in the local press. Bidding documents will be sent to suppliers who will respond to the GPN. The GPN will be updated each year. (b) Bank's Standard Bidding Documents. The most recent bidding documents approved by the Bank for each method of procurement of Goods, Works and Consulting Services will be used by the PCU. An agreement will be reached with the Bank on sample documents for each method before use. The period allowed for submission of bids may be reduced to four weeks at the discretion of the PCU. -52 - International Shopping (IS). IS will be used for procuring goods (including equipment, materials, commodities, etc.) of standard specifications available off-the-shelf for contracts each estimated to cost US$100,000 or more but less than US$0.5 million. IS requires comparison of price quotation obtained from at least three suppliers from two countries. The list of firms will be prepared by giving first consideration to those who have expressed interest in response to the press publications (e.g. GPN, local press). In order to obtain the minimum three quotations, efforts would be made to request bids from more than three firms where practical, as a means of taking into account the possibility that some of them may not submit quotations. Under Intemational and National Shopping procedures, requests for quotations may be sent and quotations obtained by fax. National Shopping (NS). This method wil be used for contracts for goods available off-the-shelf in Algeria for contracts each estimated to cost less than US$100,000 by obtaining at least three quotations. Preparation of the list of firms to be invited to bid will follow the same principle as in the case of IS except that all firms may be nationals of Algeria. Works ICB. Procedures for advertising and use of bidding documents will be those described in the case of ICB - Goods. ICB procedures for Works will be used for contracts each estimated to cost US$5 million or more. NCB. Considering the political environment in Algeria and the works being dispersed and of a nature such that foreign contractors may not be interested in participating (repairs to roads, etc.), NCB will used for contracts each estimated to cost US$0.5 million or more but less than US$5 million. However, interested foreign contractors will be allowed to participate in NCB. Not less than three weeks will be allowed for submission of bids, the applicable minimum depending upon the nature and size of procurement. There will be no need for pre-qualification. A sample NCB document for Works will be cleared for use by the PCU as in the case of ICB. No bids will be rejected based on pre-determined bracketing (cut-off above and below the engineer's estimates). Awards will be made to the lowest evaluated responsive bidder based on bid evaluation criteria specified in the bidding documents and no new criteria will be adopted. Bids will be opened in public the same day and time when these are received. Procurement of Small Works. The standard bidding document cleared by the Bank for Small Works will be used for Works contracts each estimated to cost less than US$0.5 million. These works will be procured under lump-sum, fixed-price or unit rate contracts awarded on the basis of quotations obtained from at least three qualified local contractors in response to local advertisement. The bidding document shall include a detailed description of the works, including basic specifications, the required completion period, a basic form of agreement consistent with the standard document cleared by the Bank, and relevant drawings where applicable. The award shall be made to the contractor who offers the lowest price quotation for the required work, and who has the experience and resources to successfully complete the contract. Oversight and Supervision. Considering the failure of structures in the recent earthquake in spite of Temouchent being a low-seismic-risk area, it would be advisable to have the design of proposed structures be prepared by a qualified firm or at least vetted by an intemational finn or some reputable independent agency. An intemationally recruited consulting firm or firms should be selected to supervise construction, especially for the cases of large contracts. Bank supervision of construction should be by technical staff. -53 - Consulting Services Consultants will be procured in accordance with the Bank Guidelines which shall include both competitive and single-source selection in accordance with paragraphs 3.8 and 3.11 of the Consultant Guidelines. The single-source packages will be identified and justified in the procurement plan for each project. Urgent studies required for the selection of construction sites, and preparation of construction designs estimated to cost equivalent of US$100,000 or less, may be procured under Direct Contracting . Single-source selection during project implementation will need the Bank's prior approval. QCBS method will be used for procuring the services of consulting firms. QCBS and consultants engaged as individuals will be applicable metiods for consulfing services. Table A: Project Costs by Procurement Arrangements (US$ million equivalent) 1. Works 7.49 61.69 7.03 0.00 76.21 (6.15) (52.38) (5.71) (0.00) (64.24) 2. Goods 5.83 0.00 6.21 3.97 16.01 (4.49) (0.00) (4.90) (0.00) (9.39) 3. Services 0.00 0.00 10.92 0.43 11.35 /Training (0.00) (0.00) (8.50) (0.00) (8.50) 4. Beneficiary Contribution 0.00 0.00 0.00 3.97 3.97 (0.00) (0.00) (0.00) (0.00) (0.00) 5. Front-end fee 0.00 0.00 0.84 0.00 0.84 (0.00) (0.00) (0.84) (0.00) (0.84) 6. Operating Cost 0.00 0.00 0.54 0.75 1.29 (0.00) (0.00) (0.49) (0.00) (0.49) 7. Housing Maintenance 0.00 0.00 0.00 3.18 3.18 (0.00) (0.00) (0.00) (0.00) (0.00) Total 13.32 61.69 25.54 12.30 112.85 (10.64) (52.38) (20.44) (0.00) (83.46) Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies 2 Includes civil works and goods to be procured through shopping and consulting services. Under Goods, other methods include IS Contracts (US$5.89 million), NS contracts (US$0.32 million), Materials (US$3.97). Under Services, other methods include QCBS contract (US$10.60 million), Individual consultant contracts (US$0.32 million). Training is also included in Consulting Services (USS.08 million) in NBF. -54 - Table Al: Consultant Selection Arrangements (optional) (US$ million equivalent) Cos1g~ .; . . . . iect oi.M.t0a t A. Firms 10.60 0.00 0.00 0.00 0.00 0.00 0.43 11.03 (8.18) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (8.18) B. Individuals 0.00 0.00 0.00 0.00 0.00 0.32 0.00 0.32 (0.00) (0.00) (0.00) (0.00) (0.00) (0.32) (0.00) (0.32) Total 10.60 0.00 0.00 0.00 0.00 0.32 0.43 11.35 (8.18) (0.00) (0.00) (0.00) (0.00) (0.32) (0.00) (8.50) 1\ Including contingencies Note: QCBS = Quality- and Cost-Based Selection QBS = Quality-based Selection SFB = Selection under a Fixed Budget LCS = Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, etc. N.B.F. = Not Bank-financed Figures in parenthesis are the amounts to be financed by the Bank Loan. - 55 - Prior review thresholds (Table B) Goods and Works. All contracts for Goods and Works following ICB procedures, as well as the first two contracts under NCB and Small Works, the first two under IS for Goods and the first two under NS for Goods will be subject to Bank prior review. All other contracts will be subject to selective post review by the Bank. Consulting Contracts. Procurement documentation for consultant contracts procured competitively and each estimated to cost US$0.1 million or more with firms, or $50,000 or more with individuals, as well as all sole-source contracts, will be subject to the Bank's prior review. Follow-up assignments will be permissible to the extent that these are indicated in initial TORs. Contracts below the above amounts will be subject to selective post review. Table B: Thresholds for Procurement Methods and Prior Review 1. Works >5,000 ICB 7.49 (6.17) <5,000 NCB 5.00 (4.1) <500 MW 3.13 (2.58) 2. Goods >500 ICB 5.83 (4.81) <500 IS 1.0 (0.83) <100 NS 0.32 (0.26) 3. Services >200 QCBS 10.60 (8.18) <50 Individual .100 (0.68) 4. Miscellaneous 5. Miscellaneous 6. Miscellaneous Total value of contracts subject to prior review: 33.47 (27.61) or 30% (33%) Overall Procurement Risk Assessment Frequency of procurement supervision missions proposed: One every six months (includes special procurement supervision for post-review/audits) Thresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement Documentation" and contact the Regional Procurement Adviser for guidance. - 56 - Disbursement Allocation of loan proceeds (Table C) The proposed Bank loan of US$83.46 million would be disbursed over a period of three years. Disbursements would be made against eligible project expenditures for goods, technical services, works and consultants' services according to the financing percentages indicated in the Table below. Due to the emergency nature of the operation and the need to provide immediate assistance to people living in the disaster area the Bank agrees to apply retroactive financing up to 20% of the loan amount, US$16.8 million. Procurement should be conducted according to the Bank guidelines. Retroactive financing may be used for payments made for expenditures incurred within four (4) months prior to the date of signing of the Loan Agreement, but after December 23, 1999. Table C: Allocation of Loan Proceeds Works 64.24 80% Goods 9.39 100% of foreign expenditures, 100% of local expenditures (ex-factory cost) and 80% of local expenditures for other items procured locally Consultants' Services and Training a. Design and supervision of physical 8.18 100% works under Components A, B, C and D b. Other consultants' services 0.33 100% Incremental Operating Expenditures 0.49 90% Total Project Costs 82.63 Front-end fee 0.83 100% Total 83.46 Use of statements of expenditures (SOEs): Project funds will be disbursed under the Bank's established traditional disbursement procedures, including statements of expenditure (SOEs). Disbursements against contracts below the following thresholds will be made against SOEs: (i) US$5.0 million for civil works; (ii) US$0.5 million for goods; (iii) US$0.1 for consulting firm contracts; (iv) US$50,000 for individual consultant contracts. Supporting documentation for SOEs will be retained by the Borrower (originals of documentation will be retained by the BAD, and copies by the PCU), be made available to the Bank during project supervision, and be audited annually by independent auditors acceptable to the Bank All disbursements above these thresholds will be submitted to the Bank for payment on the basis of full documentation. Special account: To facilitate disbursements against eligible expenditures, the Borrower (Ministry of Finance - MOF) will open a Special Account (SA) maintained in US dollars in the Central Bank of Algeria (CA) under terms and conditions satisfactory to the Bank. Management of the SA would be delegated by the MOF to the Algerian Development Bank, or BAD (Banque Algerienne du Developpement), a financial institution of - 57 - the MOF. The Ministry of Finance (MOF) will delegate the right for signing withdrawal applications to the designated BAD senior managers (three designated signing senior managers are envisaged). The BAD would prepare a request for initial advance to the SA and replenishment applications thereafter. GOA will bear the foreign exchange risk. The Bank would, upon request, make an authorized allocation of US$8.0 million. Initially the allocation would be limited to US$5.0 million, until disbursements have reached equivalent of US $20.0 million, at which time the full authorized allocation could be claimed. Withdrawals from loan proceeds will be based on Bank's traditional disbursement procedures. Requests for disbursements under contracts above the prior review thresholds should be fully documented. Requests for disbursements under contracts above the prior review thresholds should be fully documented. The minimum application size for payments to be made directly by the Bank to the contractors and suppliers or for issuance of Special Commitments is 20% of the authorized allocation to the Special Account. Applications for replenishment will be submitted monthly or when 33% of the initial deposit is disbursed, whichever occurs sooner. Replenishment applications will be supported by the necessary documentation including the SA statement and a reconciliation of the SA statement to the project's records based on invoices and other documents. The SA will be audited annually by auditors acceptable to the Bank. After one year, the Bank together with the Borrower will conduct an analysis of implementation progress. Given the emergency nature of the project, if inefficiencies are found in the flow of funds, the Bank and the Government will then agree on an alternative mechanism for flow of funds. Financial Management The Algerian Development Bank (or BAD, Banque Algerienne du Developpement) will be responsible for project financial management, including processing of all financial transactions, reconciliation of expenditures with the approved project budget as well as project records with the Bank records and the Special Account replenishments. * Accounting system. The BAD financial management system (FMS) in place is based on principles and procedures defined by the legal framework applicable to the public sector. The BAD maintains an accounting system based on the cash basis and the outline of budget components according to the provisions of the Public Accounting Law. Transactions in terms of commitments and disbursements are reflected in BAD accounting books maintained manually. * Budgeting system. GOA will ensure that local currency equivalent to the amount advanced to the Special Account (SA), and counterpart funds for the project are available to the BAD through budgetary allocations. Budgetary allocations would be based on the annual budget for the project activities prepared by the PCU in collaboration with the Ministry of Finance (MOF). The total project budget includes the Government's contribution as well as funds to be used from a Special Account. * Control of the budget execution. A fiduciary responsibility for control of the budget execution and monitoring is assigned to Ministry of Finance through a specialized audit department, "Inspection Gene rale des Finances" (IGF). The BAD financial management arrangements satisfy the Bank minimum requirements as the public accounting legal framework used by the BAD ensures financial accountability. However, the BAD manual financial management system currently in use has no capacity to generate the Bank-required management-oriented project reporting. Therefore, project reporting and accounting functions will be the responsibility of the Project Coordination Unit (PCU) located in Ain-Temouchent Project Coordination Unit (PCU). The PCU will be responsible for control of eligibility of project - 58 - expenditures to be paid by the BAD, and for project accounting and reporting. To fulfill these functions, the PCU will be adequately staffed, including an Accountant and a BAD staff member delegated to the PCU, by July 31, 2000 (a dated Loan covenant confirmed during Negotiations). The staff salaries will be covered by the GOA. Detailed implementation arrangements, including staffing of the PCU and terms of reference (TORs) for the Accountant, are included in the Project Implementation Plan (PIP). Project accounts and expenditure documentation. Project accounts would be maintained on a cash basis principle using the project management information system developed for this purpose which will be implemented by no later than October 31, 2000. The PCU Accountant will ensure that copies of all the project expenditure documentation (contracts, invoices, etc.) are kept on project files in Ain-Temouchent. Project accounting would cover all sources of project funds, and all utilization of project funds. This would include payments made and expenditures incurred. Project expenditures will be classified by disbursement category and cross-referenced to project documents. All project-related transactions (whether involving cash or not) would be taken into account in the reporting system. Expenditure control. All expenditures to be paid by the BAD will be reviewed and approved by the PCU Director in two phases: (i) before commitments are made and contracts signed -- in terms of their eligibility under the Loan Agreement; (ii) when invoices are presented for payments -- in terms of an applicable contract before and confirmation that goods were delivered, works executed, or services rendered. Upon approval by the PCU Director of invoices submitted for payment, the BAD staff delegated to the PCU in Ain-Temouchent will be expected to pay them within five days. Reporting. The PCU will prepare quarterly Project Management Reports (PMRs) following the Cash Model. In order to generate the PMRs, the PCU will establish a computerized financial management information system. The PCU will acquire a PC computer and a project financial management information software program that permits maintaining accounting records in US dollars and Dinars with a reporting capability to prepare project financial management reports (PMRs). Appropriate specialists would be hired to assist the PCU in developing of the project financial management information system and supporting documentation. Setting up the PCU financial management infonnation system is to be completed no later than October 31, 2000. Project Management Reports (PMRs). Although disbursements will be made using traditional disbursement procedures, the PCU will prepare and submit quarterly Project Management Reports (PMIRs -- Cash Model) to the Bank. The reports would include: (i) a comparison of budgeted and actual expenditure, including sources and application of World Bank funds (by components and expenditure categories), and on physical parameters and unit rates for selected key items; (ii) procurement management reports. The reports would be management-oriented (i.e., summaries rather than transactional details) and would be used for project monitoring and implementation. The PMRs should include the three following parts: (i) Financial Statements that include: - Summary of sources and uses of World Bank funds - Uses of funds by project activity - Cash withdrawals (disbursements) - Special account statement (ii) Project progress statements that include: - Output monitoring report using contract management information, or - Output monitoring report using unit variance as monitoring indicator (iii) Procurement management report that includes: - Contract expenditure report - Goods and works - 59 - - Contract expenditure report - Consultants - Procurement management report - Goods and works - Procurement management report - Consultants The format of PMRs, agreed with the Borrower during Negotiations, is described in the Project hnplementation Plan (PIP). Audit Arrangements An annual audit of project records and accounts, including audit of the Special Account (SA), and disbursements under Statement of Expenditures (SOEs) will be performed by an independent auditor, acceptable to the Bank, according to the Intemational Standards of Auditing as issued by the International Federation of Accountants, the Banlk's Guidelines ("Financial, Accounting, Reporting and Auditing Handbook - FARAH") and specific terms of reference (TORs) acceptable to the Bank. The auditor will express a professional opinion on the annual project financial statements and will submit to the Bank an annual audit report within six months after the end of each government fiscal year. Financial Management Risks The risks related to the project's financial management system are three, and they are primarily related to ability to generate timely and accurate management-oriented project reports: (i) Capacity of PCU staff. Staffing the PCU with a qualified accountant by July 31, 2000, is a dated Loan covenant. (ii) Capacity of project financial management system to generate the agreed Project Management Reports (PMRs). Setting up of the PCU project financial management information system is to be completed by October 31, 2000 to generate the PMRs. (iii) Delays in preparation of Project Management Reports (PMRs). Preparation of the first PMRs, acceptable to the Bank, by October 31, 2000, is a dated Loan covenant. The project financial management milestones as reflected in the dated Loan covenants were designed to mitigate the risk linked to reporting insufficiencies identified in BAD's existing reporting system. The agreed actions will be progressively implemented to build up an adequate project financial management information system by October 31, 2000. The Bank will give special attention to the project financial management during the project implementation by providing the necessary technical assistance and training. In particular, project management reporting requirements were agreed during Negotiations. The reporting formats together with TORs for the Accountant are described in the Project Implementation Plan (PIP). The financial management risks will be subject to a rigorous follow-up during the supervision missions. Reaching the milestones in project implementation related to project fnancial management will be closely monitored by the Bank. These milestones include: (i) establishment of fully staffed PCU - July 31, 2000. (ii) putting in place project financial management information system and preparation of PMRs -- O6tober 31, 2000. The general design of the financial management reporting system for the project would be reviewed by no later than October 31, 2000. - 60 - Procurement Assessment/Action Plan For Improvement of Procurement Capacity and Mana2ement Procurement Coordination and Organization Arrangements: 1. Project Coordination Unit (PCU) will be responsible for procurement related activities, which will be carried out in accordance with World Bank procedures, for all components. The PCU will be responsible carrying out the procurement activities for the project in coordination with the implementing agencies. In its procurement activities, the PCU will incorporate designs and technical specifications provided to it by the corresponding sector agencies of the Wilaya (for Components D and E) and by national Civil Protection (for Component A). Contracts prepared by the PCU will be signed by the Governor of the Wilaya or the Govemor's designee, which may be the Director of the PCU. 2. An organizational structure for the PCU and the number of staff, required skills and salary levels were has been agreed to. 3. Salaries of PCU staff will be covered by the Government's contribution to the project. Training of the staff and technical assistance to the PCU will be provided by MNA procurement staff when required. 4. A Project Coordination Unit (PCU) shall be established as soon as possible. Delegation of functions and approval procedures within the Government should be streamlined and agreed to avoid delays. The PCU shall have a Procurement Specialist on staff. 5. Any specific procurement matters requiring clarification, all complaints, and requests for approval of any changes in the above-mentioned procedures, will be submitted to the Regional Procurement Adviser, MNA, for clearance. Assessment of PCU's Capacity to Conduct Procurement. 6. Mr. Gurdev Singh, Procurement Accredited Officer, conducted a procurement assessment of the Agency and the PCU. PCU is not fully staffed and equipped. PCU Director who has been hired does not have any procurement experience. Neither PCU or the Agency has any experience with World Bank funded projects. The assessment focused primarily on the capacity, and proposed recommendations for improvements. - 61 - Action Plan Agency Issue Action Due Date PCU Staffing Recruitment of a Procurement Specialist (PS) By Effectiveness with substantial experience in international projects preferably WB projects. MNA will provide training to PS. WB Procurement book containing the Bank's Before standard procurement documents will be Effectiveness provided to the PCU just after Board Presentation The project launch workshop, which will be Before held before effectiveness and should devote Effectiveness adequate time to updating the PCU staff procurement skills. During this workshop, the contents of the procurement book should be explained to the PCU staff. PCU Planning & Establish a monitoring of all procurement At Project Launch reporting (i) activities and for all procurement processes (tendering, evaluation, contract signing, implementation period, delivery, etc.). - 62 - Annex 7: Project Processing Schedule ALGERIA: Ain Temouchent Emergency Earthquake Recovery Project ~ag~~t $e=~wt.u.. . . Time taken to prepare the project (months) 3 First Bank mission (identification) 01/22/2000 01/22/2000 Appraisal mission departure 04/09/2000 04/09/2000 Negotiations 05/03/2000 05/03/2000 Planned Date of Effectiveness 07/15/2000 _ Prepared by: Bank team in cooperation with the Government of Algeria. Preparation assistance: Bank staff who worked on the project included: Piotr Wilczynski Task Team Leader Sonia Hammam Sector Manager - Urban Development Christoph Pusch Housing/Technical and Social Infrastructure Jolanta Kryspin-Watson Operations/Institutional Arrangement Douglas I. Graham Financial Management Gurdev Singh Procurement Mark Zeydler Housing/Technical and Social hifrastructure Suha Satana Costs Mohammed Al-Sheikh Lawyer Marie Khoury Disbursements Ferid Belhaj Lawyer Milena Messori Operations Michelle Cullen Social Assessment Hocine Chalal Environmental Specialist Edwige Reichelt Office Manager Richard Andrews Disaster Response and Risk Management Peter Doty Housing Finance Helene Talon Translator Nicole Wautiez de Blaye Translator Anna Danuta Staszewicz Financial Management, Disbursement, New Financial Products Lucy Hancock Research/Operations Maria Nikolov Program Assistant Mariusz Safm Economic Analysis - 63 - Annex 8: Documents in the Project File* ALGERIA: Ain Temouchent Emergency Earthquake Recovery Project A. Project Implementation Plan Implementation of Ain Temouchent Emergency Earthquake Recovery Project B. Bank Staff Assessments C. Other WILAYA D'AIN TEMOUCHENT: Rapports d'evaluation des dommages causes par le seisme du 22 decembre 1999 (Assessment of damages caused by December 22, 1999 earthquake) Evaluation des dommages causes aux edifices publics par le seisme du 22 decembre 1999 (Assessment of infrastructure damaged by December 22, 1999 earthquake); Ketfi Ammar Evaluation des dommages dans le secteur de l'habitat (Assessment of damages in housing sector); Mohamed Ayadi *Including electronic files -64 - Annex 9: Statement of Loans and Credits ALGERIA: Ain Temouchent Emergency Earthquake Recovery Project Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Borrower Purpose IBRD IDA Cancel. Undisb. Orig Frm Rev'd P004964 1992 Algera ALG-CADASTRE 33.00 0.00 2.27 5.93 8.20 4.21 P004954 1993 Algefia BASIC & SEC. EDUCATI 40.00 0.00 0.00 11.92 9.91 0.00 P004907 1995 Algefia DZ-HIGHWAYS Vl 130.00 0.00 0.00 80.66 60.86 0.00 P042940 1998 Algena DZ-LOW INCOME HOUSING 150.00 0.00 0.00 140.00 42.50 0.00 P004974 1994 Algeria DZ-WATER SUPPLY AND SEWERAGE 110.00 0.00 0.00 9427 75.27 1.35 P004960 1996 Algeria IND.POLLUTION CTRL. 78.00 0.00 0.00 70.63 26.79 4.63 P043724 1997 Algeria RURAL EMPLOYMENT 89.00 0.00 0.00 68.88 62.28 3.88 P004978 1996 Algera SOCIAL SAFETY I 50.00 0.00 0.00 8.54 7.54 7.54 Total: 680.00 0.00 2.27 480.83 293.35 21.61 -65- ALGERIA STATEMENT OF IFC's Held and Disbursed Portfolio In Millions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1998 ABCA 0.00 2.00 0.00 0.00 0.00 1.88 0.00 0.00 1992 Helios 4.00 0.00 0.00 0.00 4.00 0.00 0.00 0.00 1998 SGA 0.00 1.00 0.00 0.00 0.00 0.19 0.00 0.00 Total Portfolio: 4.00 3.00 0.00 0.00 4.00 2.07 0.00 0.00 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic 1999 Aldaph 7274.75 0.00 1700.00 6235.50 Total Pending Commitment: 7274.75 0.00 1700.00 6235.50 - 66 - Annex 10: Country at a Glance ALGERIA: Ain Temouchent Emergency Earthquake Recovery Project - M ~~East 1o W*1- POVERTY and SOCIAL & North middl-_ Algeria Africa incoe - Development dlamond' 1998 Population. mid-vear (millions) 30.0 285 908 Life expectancy GNP Per capita Mias method, U$$ 1-t550 2,060 1.710 GNP (Atlas method. US$ billions) 46.5 586 1t557 Average annual growth, 199248 T Population tXJ 2.2 2. 1;1 Labor force (%3) 44 3.0 1.5 GNP Gross Mos- re-ent estimate (isteatycar sysuabte. 1992-961 per primary Most recent estinate ate-y4aaallabi 1992-981 -capita enrollment Poverty ($ of popul4tioJo below national povetvi Afro) 23 Urban population ($6 f total Population) 58 S8 56 Life expectancy at blrt (m8ars): 70 67 68 Infant nortality (per:1.000 five births) 32 49 38 Child matnurtrition f% of children under 5) 1 3 14 I Access to safe water Access to safe ~water f% of population) - 6 1 75 Illiteracy (of poPulation 0ae 15+) 40 38 1i 4 Gross prinary enrolment ('A ofschool-age population) 108 96- 103 - Algena Male 113 103 105 --------- Lower-middle-income group Female -102 89 100 KEY ECONOMIC RATIOS and LONG-TERM TRENDS -1977 1987 1997 8 Economic retloe GDP (tUJ billions) 21.0 64.5 46.9 48.4 Gross domestic investmentUDp-P 46.8 30.0 23.8 27.2 Exports of aoods and servlcestGP 30,SS 14.7 30.6 23.4 Trade Gross domestic savingsGDP - 35.7 31.9 32.2 27T2 Gross national savins/GDP 34.8 36.9 29.8 25.4 Current accountbetanceIGOP -11.0 0.1 7.4 -L9 Interest paymentslG0P 2;0 2A 4.1 39 Domestic Investment Total debttGDP 50.4 37.8 65.8 63.4 Savings vse Total d*bt service/exPorts 25.3 -182 27.2 40.9 Present value-of debtlGDP - 6.3 Present value of debt/exports _ - 180.9 - ~~~~~~~~~~~~Indebtedness 1977-87 1968-98 1997 1998 1999-03 (averSaoe annual gro wth. GDP 4.4 0.9 1i1 5.1 6.0 "Algeria GNP Per capita 1.1 -1.4 0.6 3.7 4.0 Lower-middle-income grvup Exports of ooodt and services 2.8 1.9 6.$ 3.6 4.4 STRUCTURE of the ECONOMY 1977 1987 1997 1998 Growth rates of outputand investment(%l ($6 of GOP) 2 Aariculture 10.0 12.4 10.3 12.1 20 Industry 51.2 43.4 52.3 47.3 10- Manufacturing 9.3 13.5 9.3 10.6 Services 38.8 44.2 37.4 40.6 o 5 9 s t Private consumption 51.0 49.5 51.0 54.7 -a 7 General government consumption 13.3 18.5 16.7 18.1 GDI _GDP Imports of qoods and services 41.6 12.8 22.2 23.3 (average annual growth) 1977-87 19SS-98 1997 1998 Growth rates of exports and Imports 1%) Agriculture 4.9 2.8 -13.5 11.4 'o Industry 3.9 -0.7 4.3 4.1 5 Manufacturinq 10.7 -10.7 -3.8 8.4 o Services 5.3 2.8 2.6 4.4 S\ 98 f97 go Private consumption 5.8 -1.4 -2.6 1.6 .5 - s s General govemment consumption 6.4 4.0 2.0 3.0 Gross domestic investment 0.1 -1.9 -0.4 17.4 15 Imports of goods and services -0.2 -2.3 2.4 5.8 1 E Exports Imports Gross national oroduct 4.3 0.9 2.7 5.8 Note: 1998 data are preliminary estimates. 'The diamonds show four kev Indicators in the countrv (in bold) comDared with its income-group averaae. If data are missing, the diamond will be incomolete. - 67 - Algeria PRICES and GOVERNMENT FINANCE 1977 1987 1997 1998 Inflation () (% chang,e) . Consumer prices 12.2 7A 5.7 5.0 a_ Implicit GDP deflator 11.8 6.2 6.5 -4.2 20. Governmont finance ID-> (% of GDP, includes current grants) o Current revenue .. 30.4 33.5 27.8 6 F 94 ss 96 97 Current budqet balance .. 9.4 10.2 4.0 -GDP deflator *CPI OveraD surplus/deficit .. -7.2 2.4 -3.9 TRADE (US$ miiiirjns,i 1977 1987 1997 1998 Export and Import levels (US$ millons) Total exports (fob) ., 8,745 13,820 10,145 1.000 Natural qas 852 5,847 4,371 Refined products 1,975 2,358 1,487 12,000 Manufactures .. 37 40 42 Total imports (cif) .. 7,904 8,130 8,629 8,000 . , IL Food 1,745 2,166 2,481 ,0** Fuel and energ, y 161 103 102 Capital goods .. 1,893 1,927 2,492 o1 " ExDortpriceindex(1995=100) 67 110 111 78 62 93 94 95 97 98 Import price index (19956=00) 65 67 96 88 oExpors a*Imports Termsof trade (1995=100) 104 163 116 8a 3ALANCE of PAYMENTS (US$ millions) 1977, 1987 1997 1998 Current account balance to GDP ratlio%) Exports of goods and services 6,331 9,290 14,890 10.903 8- Imports of aoods and services 8,476 9,407 10,280 10,940 8- Resource balance -2,146 -117 4,610 -37 4 Net income -367 -1,332 -2,220 -1,946 2 Net current transfers 190 1,487 1,00 1,064 o Current account balance -2,323 39 3,450 -919 -2 92 93 97 0 Financing items (net) 1,943 9 260 -175 Changes in net reserves 380 -48 -3,710 1,094 41 Memo: Reserves including gold (USS millions) 1,684 4,341 10,190 8,138 C-onversion rate (DEC, locaOlUS$) 4.1 4.8 58.9 57.5 EXTERNAL DEBT and RESOURCE FLOWS 1977 1987 1997 1998 (US$ millions) Composition of total debt, 1998 (USS millIons) Total debt outstanding and disbursed 10,600 24,402 30,890 30,666 IBRD 138 924 1,795 1,676 |G: 106 1,671 IDA 0 0 0 0 | c 011 Total debt service 1,686 -1,837 4,420 5.1368:904 :.1 IBRD 10 141 354 332 |t4 IDA 0 0 0 0 Composition of net resoure flows Offrial grants .. .. 30 55 Official creditors -46 -3,297 122 -125 Private creditors 1,994 1,003 -557 -1,328 Foreign direct investment -58 -109 260 505 Portfolio equity 0 0 8 2 E: 15,025 World Bank program A -18RD E Biiateral Commitments 170 464 89 150 IS-IDA D- Olher mulbiatera F-Private Disbursements 53 129 256 56 C c IMF G Principal repayments 0 79 234 208 Net flows 53 50 22 -152 Interest payments 10 62 120 124 Net transfers 43 -13 -98 -278 MNCMG 9/9/99 - 68 - Additional Annex No.: 11 Ain Temouchent Earthquake Emergency Reconstruction Project Social Assessment Since 1992, Algeria has been affected by instability and political problems. Government changes in 1999 have given much hope that stability and potential for growth and development will increase. During the oil boom years preceding the eruption of hostilities, social indicators improved markedly and poverty declined due to high investment in education, health, and basic infrastructure. With the fall of oil prices in 1986, this progress reversed as unemployment grew rapidly to about 25% (65% among youth). Acute housing shortages developed, averaging an occupancy rate of 8 persons per unit, the highest in North Africa. A high population growth rate of 2.9% and rural migration to the cities compounded this crisis. In addition, changing demographics (age composition) and cultural conditions are fundamentally altering Algeria's social topography. Poor economic conditions and political instability, combined with the changes in Algerian social topography, has put much of the country at increased risk in terms of income shocks or disasters. T'he earthquake that hit the wilaya of Ain Temouchent on December 22, 1999 revealed this increased vulnerability of Algerians in this commune in terms of lost resources, income, and housing and highlighted various areas of improvement for the Algerian government in terms of disaster organization and risk management. The TEERP will address these needs while also providing for the immediate needs of financial relief for emergency and recovery operations already implemented and the reconstruction of housing and technical and social infrastructure. Key social issues relevant to the project objectives Roughly one quarter of Algerians live below the poverty line, and up to thirty percent of the population is unemployed. Precarious economic standing, not only in the quake-affected wilaya but countrywide, has poised much of the Algerian population on the edge of vulnerability. This volatility places numerous groups as risk in the face of income shocks or natural disasters, jeopardizing their abilities to secure the food and shelter necessary for survival. The people of the four communities hit by the quake and targeted for this project - Ain Temouchent, Sidi Ben Adda, Ain Tolba, and Ain Lalam - reside in poor economic conditions. A social survey conducted after the quake to help assess damage revealed that of the 4,200 families interviewed, In the commune of d'Ain Temouchent 2,184 families were surveyed (52% of those surveyed); in Sidi Ben Adda, 546 families were surveyed (13%); in Ain Tolba, 1,008 families were questioned (24%); and in the locality of d'Ain Allem, 462 families were surveyed (11%). only about 34% of those questioned (1,428 families) were employed (salaried). Only 2,262 of those interviewed were insured. Each family has roughly 3.25 children to support, with a total of 13,650 children under the guise of those questioned. Within the four sites, 518 people were handicapped, of which 285 suffered from chronic illnesses. Thus according to the results from the social survey, the population exposed to vulnerability by being impoverished and without resources is roughly 66% (2,772) - including those without income, those who have no resources, those who are handicapped, and those who have acute illnesses. TEERP design and implementation should do what it can to help alleviate the wilaya's grave socio-economic conditions. -69 - Housing and Technical and Social Infrastructure For each of these three components, beneficiaries should be consulted in participatory consultations to gain insight on their concerns, needs, and thoughts in regards to reconstruction / repair (as part of the social assessment and monitoring and evaluation as described below). Maps of the previous city layout should be used as a basis for beneficiaries to assist with the new urban planning and site selection (although this also will need input from technical experts in terms of what sites are feasible, etc.). Site selection, in addition to being done with technical and government input, should involve beneficiary consultation, and investigate patterns of population, settlement, and land use (de facto and regulated, such as protected heritage or natural resource sites, watershed or conservation areas). Consultations should include input on housing and building design (in terms of structure and aesthetics), and on the new locations of public buildings (health centers, schools, post office, etc.). The placement of public buildings should ensure equal access for the residing populations. Beneficiaries in the rural areas may have certain fears about being returned to former areas of residence (or near old areas of residence) due to potential aftershocks and future earthquakes. If relocation will be near old housing sites hit by the earthquake, a public information dissemination program should be implemented to make beneficiaries aware of why this site is safe and why it has been selected to allay potential fears. It may be beneficial to conduct a public education program on disaster mitigation and guidance in disaster-resistant building techniques for those in rural areas to help improve their abilities to deal with potential future earthquakes. The social assessment that is conducted should examine the specifics of what locals feel may be needed in this area, which can then be combined with materials from technical experts. Local involvement, including people from local administration and civil society (including mosques and NGOs), will be key to this project's success and sustainability. If at all possible, building materials should be used that will support local production, able earthquake victims should be employed with any public works affiliated with reconstruction (and trained as appropriate), and local fins should be used for building and construction. Project Implementation Beneficiary input should be sought for both project design and implementation including monitoring and evaluation. If at all possible, locals should be contracted to assist with the reconstruction process, thus helping to alleviate some of their imnmediate financial needs and leaving capacity within the wilaya (assuming training and capacity building are provided as needed). It is suggested that a Social Scientist be hired or kept 'on call' for overseeing social assessments, participatory monitoring and evaluation, and giving input as design and implementation move forward. The representative of the Ministry of Housing in the wilaya will be responsible for the setting up of criteria for beneficiary selection, the selection of beneficiaries, maintaining beneficiary files, writing up the TOR for the contract with the PCU, and keeping track of beneficiary contributions. It is of the utmost importance for each of these activities to be done in the most transparent of manners. Beneficiaries must feel that the project is being designed and implemented under fair and just conditions and that each has access to relief based on need. - 70 - Participatory Approach Community participation in the project cycle will increase a sense of ownership by beneficiaries and the willingness to maintain (and protect) completed works; improve implementation efficiency; foster inclusion through project implementation; help to identify vulnerable groups. In addition, as Algeria has been a state plagued by conflict for eight years, participatory methods may also help reconcile local differences and encourage group discussions to emerge as local mechanisms for conflict resolution. Participatory methods should include local administration, representatives from various civil society organizations, and a wide selection of commune members. istitutionalzing participation requires organizational and technical capacity, thus the PCU and project implementers must be adequately staffed and trained. Adequate community participation may be achieved by: * Conducting a participatory social assessment (using participatory rural appraisal and beneficiary assessment techniques) to capture baseline information and identify / prioritize needs and concerns of the communes in relation to project objectives * Fostering systematic participation of the local population during project implementation, including if possible labor based works for reconstruction, monitoring and evaluation, and in-kind contributions (suggested materials or labor since finances are scarce). The participatory social assessment process be implemented and overseen by the PCU, although local consultants from the wilaya should be hired (if possible) to lead consultations and survey implementation affiliated with the social assessment and monitoring and evaluation. By using local consultants, capacity for participatory and conflict resolution methods will be left within the wilaya. Prior to using participatory methods, training should be provided to the PCU and local consultants on social assessment techniques, mainly participatory rural appraisal (PRA) and beneficiary assessment (BA) (see Appendix I for suggested guidelines for both). The social assessment should contain: i) baseline information including a brief description of the community (demographics, socio-economic conditions, etc.,) and a map of its extant economy and social and economic infrastructure; ii) a list of needs and priorities that fit within the project objectives; iii) cost recovery and cost sharing models for operation and maintenance costs after project completion; and iv) recommendations on how adverse impacts may be avoided or minimized. The social assessment process will also help: * Enhance the opportunities for self-reliance of vulnerable populations and communities * Strengthen local capacity to implement and manage reconstruction and development activities * Promote awareness and sensitivity for gender equity and the protection of the specially disadvantaged (e.g., female-headed households, widows, orphans and the disabled) in the decision-making process Encourage trust building through community-based reconstruction and development activities and attend to the conflict resolution capacity at the communal level. Findings from the social assessments should be reviewed with the community (including beneficiaries, civil society representatives, and local administration) to validate results and ensure that consultation and survey results were interpreted correctly. Monitoring of performance in terms of social development outcomes During project implementation, the PCU should regularly visit the community to monitor and evaluate community participation (recommended with the aid of a social scientist, preferably the one who assisted - 71 - with the initial participatory social assessment). Based on baseline information gathered in the initial social assessment, the PCU should: i) establish regular consultations with stakeholders during implementation to gain their insight on progress and what should be indicators; ii) review the community's in-kind contributions and identify related problems; iii) assist in the solution of problems encountered; and (iv) gain local perceptions on the developmental impacts of the projects and potential improvements to existing structure. Project design should remain flexible, able to change according to results obtained during the monitoring process. An final evaluation exercise (social audit) should be undertaken, using PRA and BA techniques, as well as participant observation. The final evaluation should be based on issues raised during the initial social assessment and those used on monitoring reporting forms. This final evaluation should be carried out however independently of the PCU and any consultants who may have been involved earlier in the assessment and monitoring process. Social safeguard compliance The resettlement policy does not apply to people who lose their assets as a result of a natural disaster. However, the policy would apply to those whose land and other assets may be acquired to rehabilitate the people affected by a natural disaster. A Land Acquisition Assessment will be performed, and subsequent actions will depend on its results. Also, in case of any preventive relocation away from disaster prone areas, if the relocating population provide their full consent to move (even though they have an option to refuse to move) the resettlement would be considered voluntary, and therefore, not subject to the provisions of the resettlement policy. - 72 - ANNEX 11A Guidelines for participation in social assessment and monitoring and evaluation A. Baseline social assessment Before the implementation of the housing project, an overall Social Assessment of the affected wilaya should be completed to establish baseline information that will help specify current needs and be needed for subsequent monitoring and evaluation (M&E). The social assessment should be done in a participatory manner, involving a wide range of stakeholders in consultations that utilize Participatory Rural Appraisal (PRA) and Beneficiary Assessment (BA) methods. The use of participatory methods is important, for they: * improve awareness of the project and related development issues; * enable the community generate and take charge of their own recovery and development plans; * create a greater sense of ownership; empower and build the capacity of community members; * allow local insight and perspective to be gained by implementers (both government and Bank); increase the likelihood of sustainability. Ideally this participation will be in all phases of the project cycle: design, planning, implementation, and evaluation. The participation continuum begins with information-sharing, moves up to consultation, then advances to collaboration, and hopefully results in empowerment. To facilitate the selection of actors to be involved in the project development process, and the assess the capacity of those institutions that may be able to assist with implementation (including NGOs and other civil society organizations), the social assessment should include a brief Stakeholder Analysis that outlines: * the main stakeholders (who are the potential beneficiaries; who might be adversely impacted; who are the vulnerable groups; who is likely to support the project; what are the relationships between the stakeholders) * the interests of the stakeholders and potential impact of the project on their interests (what are the stakeholders' expectations; how will the stakeholders benefit from the project; what resources might the stakeholder be able and willing to mobilize; what stakeholder interests conflict with project goals) * the influence and importance of each stakeholder (their power and status; degree of organization; control of strategic resources; informal influence; power relations with other stakeholders; importance to the success of the project) * how each may participate (according to 'their interests, importance, and influence; their capacity to assist with implementation; previous experience with development projects; particular efforts needed to involve important stakeholders who lack influence). After the stakeholder analysis, the Social Assessment should examine the following issues: * Demographic and socio-economic factors * Social mobility, risk, vulnerability, opportunities * Socio-political context (including security, exclusion, crime, and conflict) * Social capital (trust, civic engagement patterns and levels); social cohesion (bridging social capital, government-community links); local leadership; links with external agencies (including national government) * Institutional mapping and analysis (including rating of institutions in terms of trust, confidence, effectiveness, people's influence, and support during crisis) * Gender analysis (in terms of normal daily activities, responsibilities, ownership, roles, power, decision-maldng, resources and their use, etc.) - 73 - Who has been able to best cope from the disaster, what are their characteristics and coping mechanisms * The wilaya's current conditions (access to basic services and market activities, living conditions, etc.), needs, priorities * Other ongoing development work in the wilaya and their perceptions of its success * How locals would change the way other development work has been implemented. Social Assessments should also include a basic minimum needs (BMN) analysis, based on a sustainable use of the local natural resources (environmental carrying capacity). This includes: * Agriculture: grazing, arable cropping, agro-forestry, irrigation. * Use of natural resources like forests, swamps, valleys and water resources for agricultural purposes, other income-generating activities. * Lodging in general: identification of needs necessary for safeguarding, rehabilitating or constructing permnanent shelter. * Social and economic infrastructure: schools, rural health centers, water supply and sanitation; roads, bridges, etc. Settlement policies: the dispersed pattem of households in the hills as opposed to the concentrated village model and their consequences for the use of natural resources. Any other, like requirements for small scale enterprises or income generating activities. This will help flesh out what social differences may exist within the wilaya, what the potential impact and adverse effects may be of project implementation, local perceptions of their conditions and previous development efforts, and encourage ownership of the project and its design and implementation. The social assessment should take anywhere from 3-10 days depending on the expertise of the consultant hired and his/her familiarity with the wilaya. It is suggested that a local social scientist be employed to conduct the social assessment if possible; training may need to be provided to ensure quality but local familiarity will greatly enhance results. Ideally, this social scientist would also be available to the PCU (or sit on the PCU) during implementation and oversee the monitoring and evaluation process. The importance of using both PRA and BA methods during this social assessment process stems from the need to flesh out indicators that may be used for M&E derived from the stakeholders themselves, yet that also enable comparison with extemal projects. This means that PRA methods, such as visual tools prepared by participants and local-led analysis, should be combined with the semi-structured dialogue and its possible external analysis that is typical to BA. By combining these approaches, the project will be able to synthesize local perceptions of the project with the necessary standardized indicators. Brief overview of participatory methods (PRA and BA) to be used for the social assessment Participatory Rural Appraisal is a research methodology that incorporates locally led dialogue, stimulated by visuals done by participants, and local analysis of discussion and results. PRA sampling should be done according to approximate stratification of the community by location, wealth, gender, and age. In addition to this dialogue, observation of participants, the community, and how the dialogue is received should be incorporated into PRA analysis. All findings from PRA should be cross-checked with other methods, and reviewed by participants for their comments. PRA is an excellent tool for participatory analysis, however it does have a few limitations. The nature of PRA itself makes it not very conducive to statistical analysis. And, since analysis is locally led, issues - 74- covered may differ from other project locations, thereby making external comparison difficult. Sensitive topics should not be addressed in PRAs, as these are better discussed with individuals. Primarv PRA techniques include: A. Ranking (problems, preferences, wealth) Ranking can be done in different ways. One could apply pair ranking or preference ranking, direct matrix ranking and/or wealth ranking. All three methods can be used having men and women ranking separately, or having those being member of a community-based group ranking as opposed to those not, etc. Pair ranking: This is a technique to obtain the views of local people on the virtues and drawbacks of different categories such as tree species, crops, household tasks, activities etc. It allows to determine quickly the main categories, problems of preferences of individual households and farmers and enables the priorities to be easily compared. The list of categories to be prioritized is drawn up from secondary information sources. Each participant is asked to give the favored items in order of priority. Such could be done by choosing which one is preferred from 2 at a time, until all possible pair combinations have been presented. The final ranking is obtained by laying out the categories according relative preference. This technique is very useful for comparing preferences between different wealth groups, men and women, young and old etc. Direct matrix ranking: This is a more refined version of the pair-wise ranking method. The criteria elicited from the pair-wise ranking exercise are listed down one side of the matrix table and the items (e.g. crops) are listed across the top of the table. Informants are then asked to rank the items according to each criterion in turn. Matrix ranking is an useful tool to compare formal scientific evaluations of resources with local peoples' own evaluation of the same resources. Wealth ranking: There are inequalities in wealth in every commune, differences that determine people's behavior, coping strategies and views. As wealth can be a very sensitive topic this method should be done carefully in order to produce the desired results. Wealth ranlking uses the perception of informants to rank households within their community according to overall wealth and ensures that any discussion of wealth does not take place with reference to specific households. Each household is assigned a number, while at least three key informants from the community will be asked to independently sort each of the cards into wealth categories, using their own criteria. The average score of each household will finally determine their ranling according to wealth categories. As this method can be done with a great deal of participation on the part of the community it can identify e.g. the vulnerable in a given community. All stakeholders, with their different attitudes and perceptions, should be taken into account in this topic. Based on the outcome of all rankings a community action plan per zone or sector could be drafted. B. Mapping exercises (community, personal, institutional) and trend analysis (history, seasonal, daily activities) Diagrams can capture and present information that will be less precise and less clear if expressed in words. They are most useful in helping to identify problems or opportunities in specific areas, time periods or activities. The shared information they contain can be checked, discussed, amended if necessary and can therefore create consensus and facilitate communication between different people and disciplines. Thematic mapping: maps which reflect essential information on a specific theme in an area: indicating what has been destroyed, what has already been rehabilitated, what needs to be (re)build, etc. Seasonal or agricultural calendars: simple diagrams to indicate the seasonal features and changes over -75 - time. These diagrams are composed with the months of the year. The calendars are useful to identify critical times in the year for each activity or phenomenon. Activity profiles: are similar to seasonal calendars in that they are usually theme-specific, but they depict activities over shorter periods, like a day, a week or at given times of the year. The strategy used for most methods could be a group discussion, while agricultural calendars be used for specific groups like livestock owners and cultivators, and individual mapping be used for information collection on household level. The key issue will be to prioritize the different interests, distinguish concerning community resources between conflicts and perceived concerns, to recognize different stakeholders (according to age, sex, vulnerability etc.), and identify the degree of importance and magnitude to each of these stakeholders in order to arrive at a mutually acceptable conflict resolution. C. Semi-structured interviews Semi structured interviewing is one of the main tools used in PRAs. It is a form of guided interview, whereby only some of the questions are predetermined. PRA interviews are at most a checklist of topics to be covered in note form as a flexible guide. Most questions will be formulated during the interview. If questions are irrelevant to the specific situation, they can be skipped. Questions will usually come from the interviewee's response, the use of ranking methods, observations of things around and the PRA team's background and experience. One could interview individuals, groups and key infornants. Informnation obtained from individual interviews is more personal than information from group interviews and is more likely to reveal conflicts within the community since respondents may feel they can speak more freely without their neighbors present. D. Interviews/discussions with individuals, households, focal grouyps. and communitv Focused group discussions with officials, project staff, and beneficiary groups; flow diagrams and charts. Random interviews with passers-by (e.g. during transect walks) may reveal in addition useful information and unexpected viewpoints. Interviewing key informants will be done to obtain special knowledge. A key informant is anyone who has special knowledge on a particular subject. They are expected to answer questions about the knowledge and behavior of others and especially about the operations of the broader systems. Key informants could be traders or merchants, midwifes, teachers and people who married into the community. Their information should be used to check information gained from the other PRA techniques. Interview questions should always be ordered in an open-ended and unthreatening way, and should therefore be in such a way that they require explanation rather than allowing an answer with 'yes' or 'no'. Respondents should be interviewed in comfortable settings and questions should be phrased in a way that is understood by all the people involved. All questions should only be asked one at a time. The subject should go from general topics to more specific topics. Discussions on sensitive issues should be left for the last part of the discussion and one should avoid leading questions, as it is always up to interviewed group or person to identify their constraints and possibilities. Beneficiary Assessment produces qualitative information, which can also be quantified. BA brings together project stakeholders (beneficiaries, local administration, village elders and leaders, project staff, etc.) and initiates dialogue based on a pre-determined set of issues. It is action-oriented in terms of producing a specific outcome, i.e. project recommendations geared toward decision-makers and other involved actors. - 76 - However, BA, which produces information that is externally analyzed, may be limited in its level of participation, for it rates relatively low on the participation continuum (consultation) and may be seen as a very extractive process if not conducted properly. BA techniques include: Participant observation (facilitator) - With participation observation, it is necessary to explain the reason for stay from the outset. In the community, strategic residence among the beneficiaries should be chosen, cultivating a few close contacts from diverse and major segments of the population. It is important not to get too close to any one group. Around 5-10 households should be visited regularly to discuss issues and concerns for the project (based on a set interview guide). The facilitator who conducts the participant observation should try to participate in organizations and activities to be appreciated and identified, but not be seen as over-committed. Independence should be retained. All observations and interview results should be documented. Conversational interviews are conducted with beneficiaries, program managers, field staff, community leaders - based on a semi-structured conversation guide outlining key issues to be covered. Focus group discussions with take place with community members and other involved actors. A few key topics should be identified from the outset (watch out for biases from each group). People should be notified well in advance of the event, which should be held in a conducive, comfortable atmosphere. The discussion should begin with brief introduction explaining purpose of meeting. The facilitator should keep the discussion on track, yet be sensitive to each attendees' participation. Issues of a more controversial in nature should be left to individual interviews (or left to be discussed near the end of the event). The groups should be composed of 4-12 people with common concerns. The discussions should not last longer than a few hours. A combined PRA and BA technique approach is an important tool in order to obtain active community participation in needs identification, planning and project formulation. B. Participatory Monitoring and Evaluation T'he participatory monitoring and evaluation (PM&E), should build on the relationships and conclusions already established in the initial social assessment. By allowing for local participation, community members aren't just sources of information, but again have a chance to build capacity and ownership in relation to the project and its development; and help to formulate and implement corrective action during the project's implementation. By continuing to combine PRA and BA methods, evaluation can take place by the stakeholders themselves, while evaluation results are standardized for comparison. In order for communities to be successfully involved in PM&E efforts, some brief related training must occur in the PRA affiliated with the initial social assessment (who does it, why important, how and what to do with results); and baseline information on the community before the project must exist. PM&E fulfills conventional functions of M&E for project impact assessment and management and planning, but it also allows for the managing and resolving conflicts - a skill transferred to locals that will help long past the project's end date. In addition, PM&E strengthens self-development initiatives in villages and provides public accountability of local and national government programs to communities. - 77 - PM&E consists of data collection registration, compilation, analysis and then sharing it again with those who are to use the information. The key question for PM&E efforts is who is going to interpret the infonnation and who will use the information. Information derived from PM&E should be integrated into project progress reports undertaken by the PCU. Not only will PM&E help verify technical and financial reports, but it will also get perceptions of how the community views the development project, and its effectiveness, problems, local involvement, and impact. Monitoring involves observing change and on-going assessment of activities and trends, while evaluation is comprised of the assessment of strategic issues, changes, achievements, and impact (efficiency or programs). For PM&E to truly be effective, it must include four core principles: participation, learning, negotiation, and flexibility. People's participation in M&E however is mitigated by several factors, among those including: * Their perceived benefits (and partial or short term costs) to participating in M&E * The relevance of PM&E to the priorities of participants * Quick and relevant feedback of findings * Attempting to meet expectations that arise from the ongoing PM&E process (or at least address these concerns if they cannot be met). This helps ensure long term participation. * Not overly focusing on either short term or long term needs, but balancing efforts on addressing both * Degree of capabilities, leadership, and identity of the groups involved, including openness to sharing power * Local political history, as this influences society's openness to stakeholders initiatives * Incentives to make the PM&E possible (pens, books, paper, etc.) Some indicators for PM&E are chosen by the participants. This is an essential process for it helps build consensus about the vision for development in the community. In addition, a set of indicators to standardize evaluation must also be selected. However, it is important not to utilize too many indicators for monitoring and evaluation, for it can obfuscate and misdirect the exercise. Instead, there should be relatively few, precise indicators which cover a broad base of areas related to each sub-project and the project overall. It is also important to make sure that these few indicators meet the different information needs of those involved, including short and long term aspects, general development process issues and concrete initiatives, and qualitative and quantitative standards. Pointers for participatory M&E (which uses both PRA and BA methods): Need to identify a lead facilitator for workshop / seminar (PCU or local social scientist) Initiate a process that will allow for the self-organization of PM&E It should be undertaken on a continuous and iterative basis Measure process and outputs (try to integrate quantitative data from the technical reports with qualitative data derived from PM&E) Compare the community before and after the project, illustrated by mapping, ranking, and/or diagram exercises What has been the development impact - has access to services changed (health, education, water, sanitation), socio-economic factors What has been the institutional impact (stakeholder/institutional analysis) Has the project effected levels and density of social capital, assess by examining factors such as trust and social cohesion Develop action plans for any next steps or corrective action and identify actors involved (and their - 78 - responsibilities) * Address issues of sustainability, will the project's end products (infrastructure, disaster and risk management groups) be able to be sustained after the its completion? * Disseminate results and get feedback from community and actors involved (including decision-makers) - 79 - Additional Annex No.: 12 Ain Temouchent Earthquake Emergency Reconstruction Project Environment Management Plan A Overview I Context and project objectives a) Context of the Ain Temouchent situation after the earthquake Ain Temouchent is a city located in western Algeria 75 km south-west from Oran, the largest city in western Algeria, and which has given its name to the wilaya (Department) of Ain Temouchent populated by nearly 326.000 inhabitants. The wilaya is divided into 28 municipalities. The capital of the wilaya has a population of around 65.000 inhabitants. The economy of the wilaya of Ain Temouchent is based mainly on agriculture with minor industrial activities. On December 22, 1999 the Ain Temouchent area was hit by an earthquake of 5.5 magnitude on the Richter scale. Three municipalities were particularly concerned by the damages, Ain Temouchent, Sidi Ben Adda and Ain Tolba. Twenty seven persons died in the collapse of buildings and three hundred were injured. k Scope of intervention The government of Algeria responded rapidly to the situation and set up a rescue organization (ORSEC) in order to provide immediate assistance to the people in need. Crisis cells were established both at the local and the central level. At the request of the government of Algeria, the Bank has prepared an emergency project aimed at contributing to the reconstruction of the area and at strengthening the institutional capacity needed in the event of future catastrophic events through the design and financing of actions organized in the following six main project components: Component A: Disaster Organization and Risk Management Technical assistance in order to improve the institutional capacity for emergency management in Algeria especially with regard to disaster organization and risk management. Comionent B: Housing Financing of the residential housing reconstruction program in the urban (3400 units) and rural (800 households) areas affected by the earthquake ComPonent C: Technical Infrastructure Design, supervision and investments towards the restoration of the essential public infrastructure such as water supplies, sewerage system, roads. - 80 - Component D: Social Infrastructure Design, supervision and investments towards the restoration of damaged public buildings such as schools (15 have been reported as heavily damaged) and administrative buildings Component E: Project Implementation An Interninisterial Committee for Coordination and Followup for Reconstruction of Ain Temouchent (CICS), constituted by essentially the members of the existing crisis cell at the central level will be established for overall guidance and supervision. At the local level, a project coordination unit will be set up and will report to the Wali of Ain Temouchent. 2 Project environment category According to the Bank's Safeguards policies, the project has been rated as a category B project with regards to its expected environmental impacts. This project being an emergency operation will be the subject of an enviromental assessment process in such a manner as not to slow down its implementation. Environmental concerns will be addressed within the Environmental Management Plan designed to help the PCU and the local government in meeting environmental requirements during project implementation. Also, environmental impact assessments will be conducted in case of construction of a new wastewater facility as well as for the siting of the housing sub-project. 3 Algeria's institutional framework with regards to environment a) Existing national regulations on environment A great deal of regulation exists in Algeria in relation with environmental protection. The basic law is the law no. 83-03 (February 5, 1983) establishing the principles of environmental protection in Algeria. The most important regulation is the decree no. 90-78 (February 27, 1990) that introduced the environmnental impact assessment as a mandatory process prior to operation approval of potentially environmentally harmful projects. Another decree of importance is the decree 93-160 (July 10, 1993) regulating wastewater discharge from industries. The Water Act no. 83-17 (July 16, 1983) amended in 1996 also includes important sections on water resource management including water quality. Q) Organization of the national environment authoritv Since late 1999, a General Directorate of Environment is the main national authority for environment protection and is part of the ministry of Public Works, Land Planning, Environment & Urbanism. The General Directorate of Environment is concerned by both policy making and policy implementation. In each Wilaya an inspectorate of Environment is reporting to the General Directorate and is also in charge of implementing the national policies at the regional level. - 81 - c) Existing national regulation on NGOs The NGO's are traditionally very active in environmental protection. The law in force on non political associations has been adopted in December 1990 (Law 90-31). The law distinguishes between local an national associations. Many associations have been created both at the national and local level which are totally or partly oriented towards the protection of environment. Their main difficulties are financial and managerial. Nevertheless, these associations represent potential intermediaries with local populations that could be of great help after proper selection and capacity improvement. 4 Experience gained from previous similar projects in Algeria In August 18, 1994, an earthquake struck the region of Beni Chougrane in the wilaya of Mascara, in the western part of Algeria. The Algerian government requested from the World Bank that an emergency reconstruction project be designed and financed with the principal objective of rebuilding, in the shortest possible time, the economic, social and physical assets that were destroyed by the earthquake. The various components of the projects dealt with reconstruction and repairs of facilities in the following sectors: a) education, b) housing, c) agriculture, d) public health, e) roads f) water supply and sewerage, as well as g) earthquake hazard reduction and prevention, and h) social rehabilitation. The positive imnpact on the environment was set also as an important objective. However, this project has been recently terminated and although the overall objectives were reached environmental issues have not been given the appropriate consideration. One of the main sub-component with direct environmental impacts, i.e. the wastewater collection and treatment system has been lagging and has not yet been completed (two aerated stabilization lagoons in Hacine and Bou Hanifia, the latter being a renown thermal bath site, with a capacity of, respectively, 20.000 and 60.000 inhabitants equivalent). Although the technical aspects were given proper consideration, weak ownership did not allow for an efficient management of the sub-component. The limited prerogatives of the project management unit did not allow for stimulation of the other stakeholders. There has been practically no institutional strengthening during the project maybe because of the difficulties entailed by the security conditions at the time. - 82 - B The Environmental Manaeement Plan For the Am Temouchent Reconstruction project the implementation of an Enviromnental Management Plan will improve the quality of the project and will ensure participation of other stakeholders, mainly the Environment protection authority as well as the local population either through direct participatory approach or through local dedicated NGO's The Environmental Management Plan will encompass three kinds of measures: - Strengthening of the capacity to address environmental issues that should be dealt with in disaster response programs. - Mitigation of the impacts of the reconstruction activities (housing, technical facilities and public buildings). - Monitoring of the environmental action plan to make sure that the projects components will be implemented in an environmentally acceptable manner with no major deviation from good practices and in compliance with the recommended mitigation and/or compensation measures. To address the issue of proper siting of the housing agglomeration, and in case of construction of a new wastewater treatment plant, impact assessments will be conducted in a manner satisfactory to the Bank. The implementation of the Environmental Management Plan will be the responsibility of the client under the Bank's supervision. The ToR for the impact assessments will be approved by the Bank. The implementation of the EMP will be an integral part of the PCU's prerogatives. An environmental engineer will be part of the PCU. Periodic project progress report will include chapters on monitoring of environmental issues. 5 Institutional component of the EMP The central point of this component is the improvement of institutional capabilities both at the local and the central level in order for the targeted institutions to be able to face up future catastrophic events in a more efficient manner integrating environmental considerations for more sustainable solutions. -83 - EMP component Actions Resources needed Institutional Modification of the emergency Team of three experts - study capacity procedures in order to integrate the and presentation (4.5 men.month) strengthening dimension of environmental protection in case of disaster Technical assistance of expert Design and implementation of a (social scientist or specialist in communication strategy and population public participation), 1 man.month participation 5 days taining of 5 persons - Integrating in the training program a (local including inspectorate of component on environment related aspects environment) and 10 persons of emergency program, including (central including DGPC and appropriate use of GIS tools and valuation General Directorate of of environmental costs Environment), with the assistance of three consultants (Environmental specialist, GIS specialist, Environmental economist) 6 Environmental mitigation: The following mitigation measures (not to be considered complete) related to expected impacts will be implemented in the course of the project. Type of Potential impacts Mitigation measures Responsible Subproject Agency Housing - Negative impacts of the - Dismantling of tent camps PCU and provisory facilities after housing reconstruction. public works - Negative impacts due to - Rehabilitation of camp sites department improper facility of the new - Clean-up of construction housing agglomeration rubbles and debris - Rehabilitation of selected areas within the city through planting trees and landscaping green areas - Impact assessment of the new site for the housing sub-component Technical - Clogging of natural - Maintain ditches PCU and infrastructures drainage channels public works (Roads - Dumping of construction - Proper disposal of department rehabilitation) wastes and accidental spills of construction wastes machine fuels, etc. - 84 - Technical - Cross contamination - Audit of the wastewater PCU and water infrastructures sewage and water lines treatment plant by specialist works (Water supply - Improper disposal of - Audit of the wastewater departnent and sanitation) construction debris treatment plant by three experts - Pollution of water (civil engineer, waterworks courses specialist and sanitary engineer) - Proper disposal of construction wastes - Rehabilitation or construction of a new wastewater facility Social Health hazards due to poor Rehabilitation of the sanitary PCU and infrastructures sanitation facilities along with the schools public works (schools and and other public facilities department public rehabilitation (Integrate in the buildings) technical specifications in works procurement) 7 Environmental monitoring Monitoring will be essentially the responsibility of the PCU along with the concerned technical Departments of the Wilaya. The table below indicates the proper indicators to be used as well as the frequency of the reporting or monitoring actions. Type of Subproject Monitoring Indicator Responsibility Frequency Housing - Number of tents dismantled PCU 3 months Technical infrastructures - Kilometers of road properly PCU 3 months (Roads rehabilitation) rehabilitated Technical infrastructures - Kilometers of water supply lines PCU 3 months (Water supply and constructed sanitation) - Kilometers of wastewater lines constructed - Efficiency of wastewater treatment plant and/or progress towards completion of the new wastewater treatment plant Social infrastructures - Number of sanitary facilities PCU 3 months (schools and public (latrines or lavatories) built buildings) -85- C Implementation schedule and cost The EMP implementation would be integrated into the overall schedule for the proposed project and a timetable for key activities is provided in Table 1. It is currently estimated that the EMP implementation would cost US$81,500 for consultants, training activities and other incurred costs as presented in the section on mitigation measures and monitoring. These costs are included in the cost categories of Component E. This total cost includes provisions for environmental impact assessment in view of the proper siting of the housing agglomeration sub-component and also for the wastewater treatment plant in case it is decided to build a new facility. Table 1: EMP implementation schedule Year I Year 2 Year 3 Q1 Q2 Q3 Q1 Q2 Q3 Ql Q2 Q3 Q4 Q4 Q4 Institutional capacity oooo strengthening Environmental Impact ooooooo assessment Mitigations actions ooooooooooooooo ooooooooooo Monitoring and evaluation oo oo oo Training oo -86 - Table 2: Cost estimate for the EMP implementation Activities Total cost in US$ Training of staff and major stakeholders 25 500 Technical assistance 25 500 Environmental imnpact assessment and/or audit 15 000 Environrmental engineer in PCU 16 500 TOTAL 81500 - 87 - MAP SECTION IRRD 30909 2 4 P R- n- AIN 1\)N E E , ' Ann EARTHQUAKE REPCOER PC JECT ADRAF 39 E OUED 30 OUARGLA ~~~~~[ t: WILAYA HEADQUARTERS 2 ~~~~~<",;;;/g ! " - E . 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