Tanzania Cities Transforming Infrastructure and Competitiveness Project (P171189) Implementation Support Mission, November 4-15, 2024 Aide-Memoire I. INTRODUCTION 1. The World Bank Team conducted a combined virtual and in-person implementation support mission for the Tanzania Cities Transforming Infrastructure and Competitiveness (TACTIC) project from November 4 to 15, 2024. The main objective of the mission was to update on progress achieved since the previous Implementation Support Mission (April 18-25, 2024) and to review with PO-RALG’s Project Coordination Team (PCT): (i) progress of Component 1 institutional strengthening activities; ii) the progress of Component 2 works implementation for Tier 1 cities and the progress of detailed design work for Tier 2 cities; (iii) compliance with safeguards instruments, and fiduciary requirements; and (iv) updating the overall action plan for the next three months. 2. The mission thanks Permanent Secretary, President’s Office - Regional Administration and Local Government (PO-RALG), Eng. Adolf Ndunguru, the Management Team PO-RALG, the PCT, Tier 1 Local Government Authority (LGA) TACTIC coordinators; Tier 1 TARURA District Managers, and other national and local-level stakeholders. The Aide Memoire was discussed at the wrap-up meeting on Friday November 15, 2024, with the Permanent Secretary, PO-RALG, Mr. Adolf Ndunguru, as the chair and the final version of the Aide Memoire has been shared with Bank management II. PROJECT DATA AND RATINGS Table 1: Key Project Data and Ratings Project Data USD (millions) Credit Amount US$278 million Current Disbursement (Amount) US$83.91 million Disbursement in FY U$59.62 million Closing Date June 30, 2028 Project Ratings Previous Current PDO Satisfactory Satisfactory IP Satisfactory Satisfactory Component 1: Strengthening Urban Management Satisfactory Satisfactory Component 2: Productive, Inclusive and Resilient Urban Satisfactory Satisfactory Infrastructure Component 3: Capacity Building Satisfactory Satisfactory Project Management Satisfactory Satisfactory Procurement Satisfactory Satisfactory III. IMPLEMENTATION PROGRESS AND KEY FINDINGS 3. Status of implementation: Supervision and construction of Package 1 works for the 12 Tier 1 cities totaling US$105 million began November 2023 and are expected to be completed by the end of February 1 2025, though due to delays, extensions may be required for some LGAs.1 The project is finalizing the awards for supervision and implementation of Package 2 works totaling of US$69 million for the Tier 1 cities. Design and feasibility consulting services for subprojects in 15 Tier 2 cities began in January 2024, with final designs and bidding documents expected to be completed by December 2024 and tendering to begin in early 2025.2 Subprojects for 18 Tier 3 cities have been finalized with the PCT, which proposes to extend the contracts of the Tier 2 design consultants to develop detailed designs, feasibility studies and safeguards documents. This phase would begin in January 2025. The project is anticipated to have disbursed an additional US$55.08 million by the end of FY2025 to reach a 49 percent disbursement rate. The mission discussed in detail the progress of project activities since the last mission and updated an Action Plan (Section E, Agreed Actions). Details on the status of key issues are presented below. 4. Progress Review for Tier 1 Implementation. Implementation of Package 1 physical works for Tier 1 LGAs ranges from between 30-70 percent completion against an elapsed time of 75 percent. Slow progress has been noted since the last mission and during regular progress discussions with PCT and the World Bank. Reasons for delays included slow mobilization of contractor experts, equipment and materials testing facilities. The WB and PCT will continue to monitor progress, though it is likely extensions beyond the February 2025 contract completion date will be required for some LGAs. Package 2 (public buildings including markets and bus stands) contracts are currently being finalized and contractors are expected to mobilize in January 2025. Project Implementation Teams (PITs) have developed action plans with supervision consultants to expedite implementation. The mission also noted payment delays to consultants and contractors in several LGAs, some due to internal contractor issues (Geita and Kahama), and others due slow acceptance of deliverables or processing of payment requests. Apart from delaying implementation, there remains a risk that penalty payouts may incur additional project costs. PCT agreed to update its deliverable quality assurance and payment process, which will be strengthened with the support of the PMC. 5. Progress Review for Tier 2 Design and Feasibility. The design consultants presented final draft designs and feasibility studies for Tier 2 subprojects. The Bank team agreed to provide a final round of technical comments on the design documents as well as a review of select safeguards documents. During the mission several lessons from the experience of Tier 1 implementation were agreed in order to reduce delay and improve implementation quality. This includes having the evaluation committee receive CVs and photo identification of the proposed key experts for consultants and contractors in order to confirm their identity and availability for the assignment. Second, the physical works and overall progress reporting methodology for supervision would be agreed at the beginning of the assignment and consultants would be trained in using the Remote Supervision Tool to improve consistency in reporting. Finally, the capacity building component required of supervision consultants would be developed and agreed at the outset of the assignment, rather than toward the end of the contract period. Based on a review of the proposed work plan and implementation arrangements, the mission agreed in principle to the proposed extension of Tier 2 design contracts to cover design work for Tier 3 LGAs, provided that the expertise in the TORs is aligned with the design requirements for the assignment. The Bank team will also develop a strategy for field visits to select Tier 3 LGAs to verify proposed subprojects and advise the PCT and consultants on technical and safeguards issues to address. Where possible, the Bank team will also visit proximate Tier 1 and Tier 2 LGAs to review technical progress and safeguards compliance. 6. Coordination and Scoping on Component 1: A consultant to the PCT presented the final draft strategy for implementing institutional strengthening activities under Component 1, incorporating comments from the World Bank team. Three consulting contracts are prioritized: i) urban finance and GIS development, ii) urban planning and enforcement (including resilience and local economic development) and iii) urban service delivery and O&M strengthening. A final workshop to PO-RALG will be held in early December 2024, with the outputs including final TORs to initiate procurement of consulting services. 1 Package 1 works include roads and drains, Package 2 works include markets and bus stands. The total cost for Package 2 works is $US69.7 million. 2 Design work for Tier 2 cities is divided into five contracts – one per zone, each zone comprised of three cities. 2 7. Additional Financing: The mission discussed the need for additional financing given the progress in contracting for Tier 1 Package 2 and the finalization of Tier 2 designs. The mission agreed that PO-RALG would follow up with the Ministry of Finance to transmit the request letter to the World Bank. IV. FIDUCIARY Procurement Management 8. Overall procurement performance rating remains Satisfactory. Based on progress reports by respective LGAs, physical progress on works are behind schedule. Tier 1 package design reviews have identified issues with the completeness and quality of the previous designs, which will require the use of contingency resources and variation orders. For Tier 1 package 2 contracting, there have been delays in the evaluation of bids and due diligence processes which has inhibited the meeting of the previous target of works beginning in July 2024. The PCT has submitted to the Bank a proposal to amend Tier 2 design contracts which will present further potential challenges. In order to address this, the mission agreed for the PCT and PITs to improve coordination in order to agree on completeness and suitability of consultant outputs for payment and agree on the enforcement of provisions of contracts for non-performance and defaulting consultants and contracts. Finally, PCT and LGAs should conduct close due diligence of CVs of key experts proposed during the evaluation of technical proposals. 9. The contracting of the Project Management Consultancy (PMC) has been delayed since the Bank’s clearance of the technical evaluation report on July 30, 2024. The PMC will provide critical support to the PCT on contract management, quality assurance of deliverables, procurement and safeguards, especially as the geographic scope of the project expands and Tier 2 and Tier 3 LGAs enter implementation and design stages, respectively. The PCT has developed a list of vacant positions to be filled either through internal transfers, hiring interns or through deputing staff from other ministries. Based on the list, the PS PO-RALG would formally request other ministries for staff support at LGAs. Financial Management 10. The Overall FM Performance rating remains Satisfactory, and the FM risk assessment remains Moderate. The project has disbursed its first advance of USD 83.2 million (31.5% of the total) and utilized USD 36.36 million to date. A new disbursement request of USD 52 million is under review and expected by the end of November. The project uses the MUSE and D-Fund systems as required by the Government of Tanzania (GoT). The first audit report for FY22/23, ending June 30, 2023, received a clean audit opinion, which the Bank reviewed and found satisfactory. VAT exemptions are well-managed, with all Tier 1 and Tier 2 LGAs confirming compliance. The collaboration between the PCT and the Tanzania Revenue Authority (TRA) is effective, with no significant challenges reported. 11. The mission also noted that, VAT exemptions are well-managed, with all Tier 1 and Tier 2 LGAs confirming compliance. The collaboration between the PCT and the Tanzania Revenue Authority (TRA) is effective, with no significant challenges reported. The mission is awaiting further verification from the PCU on the expenditure of a USD 3.2 million advance by the contractor for Geita Municipal Council (MC), suspected to have been spent on unrelated costs. Overall, the financial management arrangements for TACTIC are confirmed to be adequate and acceptable to the Bank V. ENVIRONMENTAL AND SOCIAL 12. The Environment and Social risk rating remains Moderately Satisfactory. In September 2024, the E&S team visited Mwanza, Ilemela, Kahama, Geita, Mbeya and Dodoma City Councils to assess compliance with the Environmental and Social Commitment Plans (ESCPs) prepared under the project. Construction activities were in various stages of implementation and contractors had all required permits, all workers had signed both contracts and Codes of Conduct. However, it was noted that some delays were due to lack of 3 funds to execute tasks, which could exacerbate negative social and environmental impacts including accessibility in subproject areas, water retention, dust and safety risks. The team also observed that fencing around schools for safety was inconsistently applied and the team advised the PCT to ensure all contractors applied adequate fencing, cover drainage and implement traffic calming measures around schools. LGAs were also requested to link to One Stop Centers in order to expand referral options for SH/SEA survivors. 13. Dodoma Revitalization Scoping: The Bank team hosted stakeholder discussion in Dodoma chaired by the Mayor of Dodoma City Council, with representatives from PO-RALG, TARURA, TANROADS, Prime Minister’s Office (PMO), TRC, TANESCO, Dodoma City Council, National Housing Corporation, and the Ministry of Lands and Human Settlements to present draft findings and recommendations on potential technical and investment support for the central business district (CBD) of Dodoma. The workshop agreed to establish a working committee with the Dodoma Mayor and led by the PMO which would develop a roadmap for investment planning based on the recommendations. The workshop was also informed by preparation progress on the Dodoma Integrated Sustainable Transport Project (DIST) as a well as planned investments by the Tanzania Railway Corporation (TRC). A summary is included as Annex 3. IV. NEXT STEPS AND AGREED ACTIONS 14. Next Mission. The next implementation support mission is planned for May 2025. The Bank team will continue bi-weekly meetings with PO-RALG focused on Tier 1 and Tier 2 progress, including field visits to select LGAs as Tier 3 design work commences. Table 2: Summary of Agreed Actions Agency Sn Action responsib Deadline Status le Project Management 1 15 Tier 2 GRM committees to PCT Dec 30, 2024 WB to receive training schedule for receive capacity building GRM committees Staffing 2 Hiring of specialized expertise PCT December 5, • Urban planning and urban design at the PCT 2024 experts to be recruited through Project Management Consultancy. 3 Staffing for Tier 3 PITs PCT Jan 31, 2025 PS to address staffing gaps based on staffing needs list Training 4 Relevant PCT, PIT staff to PCT/WB February 28, Safeguard and Procurement, – by receive training program for 2025 December 5, 2024 (for procurement FM, Procurement, contract officers to understand for bidding management/consultant document) contractor onboarding, M&E and safeguards for Tier 2 LGAs CM, M&E and FM – February 28, 2025 (PIT staff) 5 PCT to conduct Program PCT/WB Ongoing Building off of component 1 activities Management to strengthen (quarterly) knowledge and awareness 4 between PO-RALG focal persons and PCT/PIT Project Activities Component 1 – Strengthening Urban Management 6 Update Kahama General PCT December Sign contract with consultants Planning Scheme 20, 2024 7 Tier 3 urban planning PCT December 15 Agreement on plan type for each of Tier consultancies 3 LGA, draft TORs 8 Workshop on Component 1 PCT December 6, PCT to lead workshop with consultant to Strategy 2024 prioritize TORs and workplan for Component 1 Strategy 9 Conclude final 2 workshops on Bank November, Formal adoption of urban planning and urban planning and 30 development control guidelines PO- development controls with PO- RALG, MLHHSD Minister signature. RALG, MLHHSD technical staff with PCT support 10 Mirongo River action – next WB Jan 10, 2025 Bank team to convene discussion with steps GIZ, MCC/ICC and PCT on watershed planning for Mirongo Component 2 – Productive, Inclusive and Resilient Infrastructure 11 Clearance and Implementation PCT/WB December 5, Update Mwanza RAP and receive of Tier 1 RAPs 2024 compensation for new PAPs, PCT to confirm 12 Field visits for Tier 3 cities PCT/WB From WB and PCT to agree on field visit December 1, timeline and begin visits 2024 Extension of Tier 2 consultant PCT Dec. 20, Extension signed contracts for Tier 3 designs 2024 13 Field visits for select Tier 1 and WB December WB to propose field visit plan for Tier 1 2 cities 15, 2024 and Tier 2 cities 14 Tanga/Dodoma coordination PCT/WB Ongoing WB/PCT to agree on meetings with stakeholders/donors to coordinate activities Component 3: Project Management 15 PCT to sign contract for Project PCT Dec. 20, Contract signing Management Consultancy 2024 Annexes: Annex 1: List of officials met and composition of WB team Annex 2: Status of 5 largest procurement packages Annex 3: Dodoma CBD Revitalization Summary 5 Annex 1: List of People Met N NAME DESIGNATION ORGANIZATION 1. Mr. Adolf H. Ndunguru Permanent Secretary PO-RALG 2. Eng. Gilbert Mwoga Director of Infrastructure PO-RALG 3. Eng. Humphrey Kanyenye Program Coordinator PCT 4. Eng. Emanuel Manyanga SPC-TACTIC Project PCT 5. Eng. Nanai Nyariri SPC – Msimbazi Basin Project PCT 6. Eng. Charles Adrian Head of Procurement Section PCT 7. Eng. Jovin Bujulu Procurement Specialist PCT 8. Mr. Charles Mariki Urban Planning Officer PCT 9. Ms Beatrice Mchome National E&S Advisor (NESA) PCT 10. Mr. Adam Mbeyela M & E Officer PCT 11. Ramadhani Shomary IT Officer PCT 12. Mr. Erick Bernad Public Relation Officer PCT 13. Happy Sanga SSO PCT 14. Mr. Lucas G. Mrema Municipal Finance Officer PCT 15. Ms. Grace Benjamin Supply Officer PCT 16. Evans Mgeusa Procurement PCT 17. Mariam Kimaro Municipal Finance Officer PCT 18. Adv. Johnson Meela Legal Officer PCT 19. Salama Bakari Engineer PCT 20. Salama Bakari IE PO RALG 21. Agness Kishenyi Environmental Officer PO RALG 22. Eng. Augustino Mbuya Engineer PO RALG 23. Marco Chacha EHO PO RALG 24. Abdon Mapunda PEMO PO RALG 25. Emmanuel Masanyiwa Town Planner PO RALG 26. Pendo Mwaisaka PCDO PO RALG 27. Ramadhani Shomari IT Expert PO RALG 28. Dina Augustino HR PO RALG 29. Oswald Kasambala Engineer PO RALG 30. Issa Maganga Engineer PO RALG 31. Rabson Sailo Procurement Officer PO RALG 32. Wilfred Shimba Engineer PORALG 33. Blandina Kimario Accountant PORALG 34. Maria Marcus OMS PORALG 35. Albert Kyando DM TARURA-ARUSHA 36. John Myovela Engineer Sumbawanga MC 37. Said Nkonga Social Expert Kahama MC 39. Phinias Marcon Environmental Expert Ilemela MC 40. Emmanuel Juma Social Expert Ilemela MC 41. Pascal Matagi Environmental Expert Tabora MC 42. Mufungo Manyama Social Expert Dodoma CC 43. Mkelewe Tungaraza DC Mwanza CC 44 Joseph Mkwizu Coordinator TARURA 45 Edward Mwita Environmental Expert Geita MC 46 Mufungo Manyama Social Expert Dodoma MC 47 Wande Mahega Exnvironmental Expert Mhandisi Consult 48 Peter Enock HSE LUPTAN 49 Jenipher Kanobaita Sociologist NIMETA 50 Antonio Mkinga Residence Engineer HOWARD Consulting Ltd 6 51 Emmauel Mfinanga District Mnagaer TARURA Dodoma 52 Mensa Ngelangela Social Expert Songea MC 53 Prisca Rupia Social Expert Geita TC 54 David Mason Task Team Leader World Bank 55 Eng. Lulu Dunia Municipal Engineer / Co- TTL World Bank 56 Eng. Muindi Musyangi Municipal Engineer/ Consultant World Bank 57 Nkundwe Mwakiluma Financial Management Specialist World Bank 58 Eng. Mussa Natty Urban Resilient Specialist/ World Bank Consultant 59 Raymond Mbishi Senior Procurement Specialist World Bank 60 Franka Van Marrewijik Urban Designer Consultant World Bank 61 Peter Karissa Intern World Bank 62 Alphonce Tiba Social Safeguards Consultant World Bank 63 Antoni Folkers Urban Planner/ Consultant World Bank 7 Annex 2: Status of 5 Largest Procurement Contracts S/N Contract Amount Signed Status Completion Date 1 TZ-KMC-343700- 9,940,000.00 Sept 23, Implementation December 15, CW-RFB 2023 2025 Package 1 Works (extension Kahama MC required) 2 TZ-MMC-375822- 9,920,000.00 Sept 23, Implementation December 15, CW-RFB 2023 2025 Package 1 Works, (extension Morogoro MC required) 3 TZ-MBCC-391655- 9,900,000.00 June 16, Signed June 16. 2025 CW-RFB 2024 Package 2- Works, Mbeya MC 4 TZ-KUMC-376478- 9,900,000.00 Sept 23, Implementation December 15, CW-RFB Package 1 2023 2025 Works, Kigoma MC (extension required) 5 TZ-DCC-343672-CW- 9,890,000.00 Sept 23, Implementation December 15, RFB 2023 2025 Package 1 Works, (extension Dodoma MC required) 8 Annex 3 Summary: Revitalization of Dodoma Central Business District Stakeholder Working Session October 22-25, 2024 Summary Report Objective The World Bank, in collaboration with the PO-RALG, conducted a second working session on revitalizing the Dodoma Central Business District (CBD) aimed at gaining stakeholder input on developing its conceptual plan and roadmap for investments to improve roads, drains, footpaths, green/public spaces and community facilities.3 The session provided valuable inputs to determine the feasibility of proposals, and coordination with other investments and programs that impact the CBD and guide potential World Bank investments in the revitalization and development of Dodoma City. The interactive two-day session included (i) plenary presentations to provide background information and review progress since the previous working session in April 2024, (ii) presenting the draft revitalization concepts and roadmap, (iii) undertaking site visits to key nodes in the CBD to discuss proposals in the field, and (iv) facilitating discussions to review, critique, and validate the spatial concepts and implementation strategies. Key Findings Participants explored challenges and opportunities for revitalizing the CBD through group and plenary discussions and a tour of the CBD. The discussion revolved around four themes: mobility and transport, greening, urban planning and development, and coordination, and the outcome of the discussions is summarized below. Mobility and Transport • The CBD parking system needs to be improved and organized to reduce congestion and blocking pedestrian walkways. Establishing designated parking areas or towers on empty and underutilized government lands and changing parking behaviour are recommended to rectify the situation. • Transport and mobility are key components of the 2019 Dodoma City Master Plan (2019 MP), and more detailed plans are now under preparation under the Dodoma Integrated and Sustainable Transport Project (DIST) and other planning and implementation initiatives supported by donors including the African Development Bank (AfDB) and Japan International Cooperation Agency (JICA), amongst others. • Pedestrian movement in Dodoma is limited and unsafe due to lack of walkways along some of the roads, possession of walkways by vehicles and motorcycles, and reckless road traffic behavior. 3 The workshop was supported with funding from the Cities Climate Finance Gap Fund. 9 Greening • Greening is critical for the aesthetics and functionality of CBD; however, the existing green spaces are poorly maintained, underutilized and not fully developed. There is an opportunity to increase green spaces by developing empty government lands into parks and planting trees along the roads. For greening to be successful, it must start with behavior change in communities and proper operations and maintenance of these spaces. • The blue spaces, particularly rivers running across the CBD, are poorly maintained, used as a waste dumping area and are being encroached. Nature-Based Solutions should be employed to improve their functionality, create recreation spaces and mitigate floods. Urban planning and development • The 2019 Dodoma City Master Plan (2019 MP) is comprehensive and is generally being implemented by large developments. However, detailed implementation strategies are not in place, and there are no specific regulations for CBD development. Construction permits are provided while there is no clear vision of the future CBD. Declaring (part of) the CBD as a Special Planning Area would help shape the development direction and enable Dodoma City Council (DCC) to impose strict regulations. Engagement of decision makers and politicians is key to achieving the desired development. • The improvement and revitalization of the CBD can start with small projects such as improving children’s playgrounds and tree planting in communities and should be led by the people and institutions of Dodoma. • TRC has development plans for its Jamatini area in CBD, which encompasses multi-use inclusive of a shopping mall, conference center, luxury apartments, hotel office building, park, car parking and a light rail link connecting to SGR. Coordination of development planning and control between public and private sectors • Coordination of development and investments in CBD is inadequate and a structural issue because integration mechanisms are non-existent, and individual institutions have mandates to plan and execute projects independently. • The Prime Minister’s Office (PMO), which is responsible for the development of the Capital City, is currently working with PO-RALG to establish a stakeholder and development coordination mechanism. There are considerations for establishing the Capital City Management Act, a legal instrument that would govern the development of the City Next Steps: • Establishment of the Dodoma CBD revitalization steering/working group under the chairmanship of the Lord Mayor and with the executive secretary from PMO and develop the TOR with support from the TACTIC project. • Take inventory of current and planned drainage, road and green infrastructure and create urban design concept for core area of CBD. • Inventory of CBD public buildings that will be vacated, strategy for dispensing or rehabilitating for new purposes 10 • Explore possibilities to attract interest from IFC and private sector to joint investment into the Dodoma CBD 11