Document of The World Bank FOR OFFICIAL USE ONLY Report No: 47324-GH PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 150.5 MILLION (US$225.0 MILLION EQUIVALENT) TO THE REPUBLIC OF GHANA FOR A TRANSPORT SECTOR PROJECT May 20, 2009 Transport Sector Country Department AFCW1 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS ExchangeRate Effective: March 31,2009 Currency Unit = GhanaianCedi (GH$) US$1 = GH61.41 US$1 = SDR0.66864 FISCAL YEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS AADT Annual Average Daily Traffic AFD Agence Frunpise de De'veloppement (French Development Agency) AIDS AcquiredImmuneDeficiency Syndrome BAS Beneficiary Agencies BADEA Arab Bank for Economic Development inAfrica BP Bank Procedure CIDA CanadianInternational Development Agency DANIDA DanishInternational Development Agency DfID Department for International Development DFR Departmentof Feeder Roads DP Development Partner DUR Departmentof UrbanRoads DVLA Driver and Vehicle Licensing Authority EA Environmental Assessment EC European Commission EIA Environmental Impact Assessment EMP Environmental ManagementPlan EO1 Expressionof Interest EOP Endof Project EPA Environmental ProtectionAgency EIRR Economic Internal Rate of Return ERR Economic Rate of Return ESMF Environmental and Social ManagementFramework FBS FixedBudget Selection FMT Financial Management Team FYRR FirstYear Rate of Return GACL GhanaAirports Company Limited GCAA Ghana Civil Aviation Authority GEF Global Environment Facility GHA Ghana Highway Authority GIMPA Ghana Instituteof Management and Public Administration GIS Geographical InformationSystem GMA Ghana Maritime Authority GOG Government of Ghana GPHA GhanaPorts andHarbors Authority GPRS Growthand Poverty Reduction Strategy GRCL Ghana Railway Company Ltd. GRDA GhanaRailway Development Authority GTTC Government Technical Training Center HDM Highway Development andManagement Model HIV HumanImmunodeficiency Virus IAs Implementing Agencies IC Individual Consultants ICB International Competitive Bidding ICAO International Civil Aviation Organization IDA International Development Agency IFR InterimUnaudited Financial Report IRI International RoughnessIndex ITP Integrated Transport Plan KIA KotokaInternational Airport KNUST KwameNkrumahUniversityof ScienceandTechnology LCS Least Cost Selection MDAs Ministries,Departments,and Agencies MIC Middle-Income Country MMDAs Metropolitan, Municipal, andDistrict Assemblies MRH Ministry of Roads and Highways MOFEP MinistryofFinanceand Economic Planning MOT Ministry of Transport MTR Mid-Term Review NCB National Competitive Bidding NMT Non-motorized Transport NPV Net Present Value NRA NationalRoadsAuthority NRSC National Road Safety Commission NRSS NationalRoad Safety Strategy NTP NationalTransport Policy OP Operational Policy PAD Project Appraisal Document PDO Project Development Objectives PFM Public Financial Management PIM Project ImplementationManual PIT Project ImplementationTeam PPP Public Private Partnership PSC Project Steering Committee PSP Private Sector Participation PT ProcurementTeam QCBS Quality and Cost Based Selection RAI RuralAccessibility Index RAP Resettlement Action Plan RPF Resettlement Policy Framework RMU RegionalMaritime University RSDP RoadSector DevelopmentProgram SBD StandardBiddingDocument SDR SpecialDrawing Rights SIA Social ImpactAssessment SIL Sector InvestmentLending TOR Terms of Reference TSDP Transport Sector DevelopmentProgram TSP Transport Sector Project us United States VLTC Volta LakeTransport Company voc Vehicle OperatingCost Vice President: Obiageli Katryn Ezekwesili Country ManagerDirector: IshacDiwan Sector Director: IngerAndersen Sector Manager: C. Sanjivi Rajasingham Task TeamLeader: Ajay Kumar GHANA TRANSPORT SECTOR PROJECT CONTENTS Page A. STRATEGIC CONTEXT AND RATIONALE ............................................................... 1 1. Transport andthe Country's GrowthAgenda ..................................................................... 1 2. Sector Issues ........................................................................................................................ 3 3. Rationale for Bank Involvement .......................................................................................... 7 4. Higher Level Objectives to whichthe Project Contributes ................................................. 8 B. PROJECT DESCRIPTION ............................................................................................... 9 1. LendingInstrument .............................................................................................................. 9 2. Project Development Objective (PDO) andKey Indicators., ............................................. -9 3. Project Components ............................................................................................................ -9 4. Lessons Learned and Reflected inthe Project Design ...................................................... 13 5. Alternatives Considered andReasons for Rejection ......................................................... 14 C. IMPLEMENTATION ...................................................................................................... 14 1. Partnership Arrangements ................................................................................................. 14 2. Institutional and ImplementationArrangements .............................................................. -15 3. Monitoring and Evaluation of OutcomesResults ............................................................. 16 4..Sustainability ..................................................................................................................... 16 5. Critical Risks and PossibleControversial Aspects ............................................................ 17 6. Credit Conditions and Covenants ..................................................................................... -19 D. APPRAISAL SUMMARY ............................................................................................... 20 1. Economic and Financial Analyses..................................................................................... 20 2. Technical ........................................................................................................................... 21 3. Fiduciary ............................................................................................................................ 21 4. Social ....................... ...-...................................................................................................... 22 5. Environment ...................................................................................................................... 23 6. Safeguardpolicies.............................................................................................................. 24 7. Policy Exceptions and Readiness ...................................................................................... 24 Annex 1: Countryand Sector Background ............................................................................... 25 Annex 2: Major RelatedProjectsFinancedby the Bankand/or other Agencies ..................34 Annex 3: ResultsFrameworkandMonitoring ......................................................................... 35 Annex 4: DetailedProjectDescription ...................................................................................... 38 Annex 5: ProjectCost .................................................................................................................. 43 Annex 6: ImplementationArrangements .................................................................................. 44 Annex 7: FinancialManagementand DisbursementArrangements ..................................... 51 Annex 8: ProcurementArrangements ....................................................................................... 63 Annex 9: EconomicAnalysis ...................................................................................................... 77 Annex 10: SafeguardPolicyIssues ............................................................................................. 86 Annex 11:ProjectPreparationand Supervision ...................................................................... 90 Annex 12: Documentsinthe ProjectFile .................................................................................. 91 Annex 13: Statementof Loansand Credits ............................................................................... 92 Annex 14: Countryat a Glance .................................................................................................. 94 Annex 15: Map ............................................................................................................................. 96 IBRDMapNo 36913 . GHANA TRANSPORT SECTOR PROJECT PROJECT APPRAISAL DOCUMENT AFRICA AFTTR Date: May 20,2009 TeamLeader: Ajay Kumar Country Director: Ishac Diwan Sectors: Roads and highways (75%); General Sector Director: Inger Andersen transportation sector (15%); Central Sector Manager: C. Sanjivi Rajasingham government administration (10%) Themes: Rural services andinfrastructure (P);Other urbandevelopment (P);Public expenditure, financial management and procurement (S) Project ID: P102000 Environmental screeningcategory: Full Assessment LendingInstrument: Specific InvestmentLoan [ ]Loan [XI Credit [ 3 Grant [ 3 Guarantee [ ]Other: For Loans/Credits/Others: Total Bank financing (US$m.): 225.00 Total: 130.00 95.00 225.00 Borrower: Republicof Ghana, MinistryofFinanceand Economic Planning Accra Ghana ResponsibleAgency: MinistryofRoadsandHighways (MRH) andMinistry ofTransport (MOT) Accra Ghana 1 Project implementationperiod: Start: June 30,2009 End: December 31,2014 Expected effectiveness date: December 31,2009 Expected closing date: June 30,20 15 Does the project depart from the CAS incontent or other significant respects? Ref:PADA.4. [ ]Yes [XINO .P Does the project require any exceptions from Bankpolicies? [ ]Yes [XINO Re$ PAD D.7. Have these been approvedby Bank management? - _ [_ ]Yes [ IN0 _ I s approval for any policy exception sought fiom the Board? [ ]yes [~INo Does the project include any critical risks rated "substantial" or "high"? Re$ PAD C.5. [X]Yes [INo Does the project meet the Regional criteria for readiness for implementation? Re$ PAD D.7. [XIYes [ ] N o Project development objective Re$ PAD B.3., TechnicalAnnex 3 The project development objective (PDO) is to improve mobility o f goods andpassengers through reduction intravel time and vehicle operating cost, and to improve road safety standards. This objective will be achievedthrough strengthening the capacity oftransport institutions in planning, regulation, operations andmaintenance, andthrough infrastructure investment. Project description [one-sentence summary of each component] Re$ PAD B.4., Technical Annex 4 The project components are: Component A - Support to Ministryo f Roads and Highways (MRH):This is targeted at carrying out feasibility studies, developing a geographical system, strengthening management information system, and participation intraining courses. Component B- Support to Road Sector and Educational Entities: This component will support the activities o ffour agencies: Driver andVehicle Licensing Authority (DVLA),National Road Safety Commission (NRSC), KwameNkrumahUniversity o f Science and Technology (KNUST), and Government Technical Training Center (GTTC). Component C -Improvement o f Trunk Roads: This will be implementedby the Ghana Highway Authority (GHA) andconsist o f rehabilitation o f a major trunk road from Ayamfuri-Asawinso, including provision o f technical assistance for the supervision o fthe works andrelated environmental and social safeguards measures, capacity buildingand equipment Component D- Improvement o fUrbanRoads and infrastructure: This component will be implemented by Department o f UrbanRoads (DUR) and consist o f rehabilitation o f arterial roads (Burma Camp Road and Giffard Road) and public transport infrastructure, including provision o ftechnical assistance for the supervision o f the works and related environmental and social safeguards measures, and capacity building. This component would also finance preparation o f a public transport management plan for central Accra. .. 11 Component E-Improvement of Feeder Roads: This component will be implementedby DFR working towards improving rural access through feeder roadsrehabilitation and spot improvement program. This component will be implementedintwo phases. Duringphase 1,to be implementedinthe first year, atotal of 48 feeder road sections will be rehabilitated (minor) andimproved (spot improvement) inall regions ofGhana. Duringphase 2, to beimplementedin the secondyear, focused road improvements will be financed inselected regions to support commercial agriculture around growth poles. Component F- Support to Ministryof Transport (MOT) and Other Transport Sector Entities: The support beingprovided to the MOT will benefit: GhanaAirports Company Limited (GACL), Ghana Railway Development Authority (GRDA), GhanaCivil Aviation Authority (GCAA), GhanaPorts and Harbors Authority (GPHA), Regional MaritimeUniversity (RMU), GhanaMaritime Authority (GMA), and Volta Lake Transport Company (VLTC). The support is targeted at conducting feasibility studies, training. Component G - Project Management: Provision of technical assistance, vehicles, equipment and other operational support to the Implementing Agencies to carry out coordination, administration, monitoring, evaluation and audit of the Project. Which safeguardpolicies are triggered, ifany? Ref: PAD D.6., TechnicalAnnex 10 The project hasbeenassignedthe Environmental Category A. The safeguardspolicies that have beentriggered are OPBP 4.01 (Environmental Assessment), OP 4.11 (Physical Cultural Resources), and OPBP 4.12 (Involuntary Resettlement). The civil works to be carried out inthisproject include the upgrading andrehabilitation of existing roads, which will be carried out inaccordancewith the Environmental Management Plans (EMPs) and Resettlement Action Plans (RAPS)preparedby Government of Ghana (GOG) for this purpose. Inaddition, there are minor civil works (construction ofteaching facilities, laboratory, hostel, feeder road improvements, workshops and offices) which will be carried out inline with the Environmental and Social ManagementFramework (ESMF) and Resettlement Policy Framework (RPF). The plannedcivil works will not have irreversible negative impacts during project implementation. This is especially the case for the road upgrading works, which will not requireroadre-alignments andwill require only, limitedlandacquisition. Thepotential adverse environmental and social impacts identifiedwill be limitedand site specific; they will be mitigated inaccordance with the Bank'ssafeguardpolicies. Significant, non-standard conditions, if any, for: Ref: PAD C.5. Board presentation: None. Loadcredit effectiveness: (i)TheRecipienthasadoptedtheProjectImplementationManual,informandsubstance satisfactory to the Association; and ... 111 (ii)TheImplementationAgreementshavebeendulyexecutedbytheImplementingAgencies (IAs). Covenants applicable to project implementation: 0 Standardfinancial management, procurement and implementation covenants as tailored to the project; and Project-specific covenants relating to: (i) maintenanceof the Project Steering Committee (PSC), Project ImplementationTeam (PIT) and IAs; (ii) execution and compliance with an implementation agreementamong the IAs and with the project implementation manual; (iii) preparation of annual work plansandbudgets for approval by the Bank; (iv) implementation ofthe project inaccordancewith the ESMF/RPF/EMPs/RAPs; and (v) key outcome indicators. iv A. STRATEGICCONTEXTAND RATIONALE 1. Transport and the Country's GrowthAgenda 1. Ghana's vision of achieving middle-income country (MIC) status by 2015 within a decentralized, democratic environment means doubling the size of Ghana's economy within a decade. This requires that gross domestic product grows by six to eight percent per annum and per capita income rises from around US$400 to US$l,OOO per annum. The government's policy objective is to strengthen the provision of infrastructure services and improve the business environment to sustainbroad-basedgrowth. 2. The importance of transport infiastructure was highlighted in Ghana's Growth and Poverty Reduction Strategy (GPRS 11) as an enabler for economic growth and poverty reduction. The transport sector is critical inproviding access to jobs and markets, and plays a strategic role in the economy of Ghana, accounting for about five percent of gross domestic product and generating a significant share of government revenues. It is increasingly recognized that the transport sector serves and facilitates other sectors. Available international evidence suggests a strong positive correlation between road investment, growth, and poverty reduction. An assessment of the impact of investments in road infrastructure in Ghana' conducted over the period2005-2008 reveals the following: 0 improved roads result in (a) a 20 percent increase inthe number of trips to hospitals; (b) a 23 percent increase inthe price of maize received by farmers; (c) a 65 percent lower cost of traveling to market; and (d) a 41 percent lower cost of traveling to welfare facilities; a direct positive correlation exists between the incidence o f poverty and road condition; and 0 improvements in regional corridors reduce delays in cross-border movement of goods, people and services, waiting time at ports, and promote economic activities. 3. The country has a fairly developed transportation system. The road network as of December2008 consists of 13,367 kmof trunk roads, 42,093 kmof feeder roads, and 12,450 km of urban roads. Roads are the predominant mode of transportation, currently accounting for 94 percent of freight and 97 percent of all traffic movements in the country. The transport of bulk commodities is suited to transport by rail from existing central collection centers and mining areas to the ports. The 947 km railway network length has limited coverage (Accra-Kumasi- Takoradi) and serves only the southernpart of the country, excluding the largest port of Tema. 4. Ghana's two ports handle seven million tons of import and export traffic annually. This figure can increase over the coming years if Ghana is able to capture a larger share of shipments to and from neighboring landlocked countries, particularly Mali, BurkinaFaso, andNiger, which can use competing corridors through C6te d'Ivoire, Senegal, Benin, and Togo. Ghana's inland water transportation is under-utilized. Most bulk hauling of petroleum products is done by roads but a small percentageis transported onthe Volta Lake. "Baseline Studies ofthe RSDP", Ministry of RoadsandHighways(2006), Ghana 1 5. Ghana has implemented a Road Sector Development Program (RSDP) starting in 2001 with a total investment cost of US$l.2 billion, of which about 75 percent was contributed by the Development Partners (DPs)~,and the balance funded by the Government of Ghana (GOG). The Bank supportedthe RSDP with acredit of US$220 million which closed inJune 2008. Since the initiation of the RSDP strategy in 1996, considerable progress has been made in expanding the role of the private sector, strengtheningthe capacity inplanning and management, and improving financing for road maintenance. Box 1: Achievements of RSDP Improvement inthe quality of roadnetwork from 29 percentgood, 27 percent fair, and 44 percent poor (in2002) to 39 percent, 29 percent, and32 percent, respectively (in2007), with a recorded40 percentincrease inroadlength; 0 Improvement in the operations of an independent road fund, supportedby a dedicated fuel levy, which increasedfiom GH$O.O23/liter(US2.5 cents) to GH$O.O60/liter(US6 cents) over the project period, as agreedinthe Letter of Sector Policy; Increase in maintainablenetwork offeeder roadsfrom 11,500 kmto 30,000 km; 0 Declineinaccident fatalityrate from 27 per 10,000 vehicles to 22; and 0 Completionofa number ofpolicystudiesandactionplans to improve sector strategy, financing, management, delivery, andprivate sector participation. 6. While the RSDP has provided "an integrated ap roach to road maintenance, construction andmanagement" by the mid-termreview (MTR)2005 ,the program is focused onthe road sub- P sector. Under the RSDP, sector priorities were decided by short term imperatives without an integrated and coordinated approach to multi-modal planning. There are very few examples of integrated planning throughout the sector and the government's long standing objective "to foster effective modal integration and economic assignment of traffic to modes through the market mechanism inorder to minimize over-all transport costs to users" (2001)4remains unfulfilled. 7. With a national vision of attaining MIC status by 2015, democratic, multi-stakeholder engagement in policy formulation and implementation, increasing reliance on market-based regulation and enhanced human resource capacity, it is noticeable that Ghana's governance framework is undergoing a significant change. Yet the laws, regulations, institutions, decision making, and financing mechanisms affecting the transport sector remain uncoordinated often creating significant barriers to performance-improvement and restricting opportunities for increased sub-regional trade as well as the much sought-after inter-sectoral and inter-modal coordination. With the road sub-sector receiving approximately 100times the budget received by the rail, harbors, and ports (as evidencedby the figures inthe annual budget statement), there is The transport sector DPs in Ghana include: African Development Bank (AfDB), French Development Agency (ADF), Arab Bank for Economic Development in Africa (BADEA), Danish International Development Agency (DANIDA), U.K. Department for International Development (DffD), Japan International Cooperation Agency (JICA), Kreditanstalt fur Wiederauflau (KfW), Millennium Challenge Corporation (MCC), Netherlands, Saudi Fund, United States Agency for InternationalDevelopment(USAID), EuropeanCommission (EC), and the World Bank Mid-TermReview (2005) RoadSector DevelopmentProgram 4m.ghana.gov.gh 2 always a concern that this funding imbalance may lead to uncoordinated inter-modal planning and dominance o f one mode over others. 8. It is recognized that Ghana's policy framework is changing and this change impacts on the governance and institutional framework for the transport sector. Inpractice it meansthat the way decisions and priorities are made, and the way performance is measured and reported, is changing. As a result, new institutional arrangementsare required to provide conditions inwhich policy can be properly formulated and coordinated and in which the new governance requirementscan be satisfied. 9. Currently, there are two ministries responsible for the transport sector: (a) Ministry of Roads and Highways (MRH), which is responsible primarily for roads; and (b) Ministry of Transport (MOT)' responsible for airports, railways, and harbors. The critical issue is how the institutional and organizational arrangements could be improved to increase the overall effectiveness and efficiency of transport infrastructure provision and maintenance within a national policy and institutional framework for the sector. 2. Sector Issues 10. The key policy and institutional issues inthe transport sector are: 0 Need for coordination of policy formulation and planning. Inter-sectoral co- ordination among all ministries involved in the transport sector does not take place with sufficient regularity; 0 Needto clarify mandates among existingagencies with a focus on possibly creating: (a) a National Roads Authority (NRA) to act as asset manager for Ghana's national road network to include the current role o f the road fund; (b) trunk roads agency to be contracted to the NRA to provide network management services for the defined trunk roads in Ghana; and (c) local roads agency to be contracted to the NRA to provide network management services for the definedlocal roads inGhana; Need for a prouer regulatory environment in the rail sector with the focus on establishing a strong Ghana Railway Development Authority (GRDA) (now that the Railway Act has beenpassed); 0 Strengthen management and financing of road maintenance with a clear focus on striking a better balance betweenmaintenanceand expansiordrehabilitation; Need to Implementthe Axle Load Control Policy Action Plan, which includes the adoption o fthe Road Traffic Regulationnecessaryto strengthencontrols; and Promote private sector involvement with a focus on: a) developing a conceptual framework to strengthen private sector participation; b) setting up a specialised unit The new governmenthas realignedsome ministries to reducetheir numbers ftom 27 to 23. The ministries inthe transport sectorhave beenreducedfromthree to two-with a Ministry ofRoads and Highways (the earlier Ministry o f Transportation) and a Ministry o f Transport (including rail, ports, and harbors, combining earlier ministries of aviationandrail andharbor). 3 within a Transport Sector Ministry to drive the reform process and carry out specialist tasks; and c) strengthening domestic construction industry capacity in planning and delivering commercially successful operations. 11. Roads: The specific issues affecting the road sub-sector are as follows: (a) a weak connection between the overall government strategic objectives for economic growth and actions on the ground (as measured by investment prioritization, network expansion, etc.); (b) inadequate attention to maintenance and lack o f balance between "maintenance" and "development"; (c) weak management capacity inplanning and monitoring o f project works; (d) over-loading o f commercial vehicles, typically o f the order o f 10-15 percent, leading to accelerated deterioration o f roads; (e) issues related to local construction capacity, including capacity o f the contractor (management, manpower, equipment and access to credit), employer (contractor classification, implementation, supervision), engineer and the markethusiness environment; and (f) a large proportion (over 45 percent) o f the rural population remains inaccessible (lives beyond 2 km o f all seasonroads). 12. The MRH would also like to increase the efficiency and effectiveness with which the management and maintenance o f the road network is carried out. Currently, public works contracts are numerous and are characterized by delays in payments and weak project management procedures. This is typically caused by short duration o f contracts, weak link between performance and payment, inability to bundle related services (particularly construction and maintenance), ineffective payment procedures, and weak monitoring. The ministry would like to examine new concepts and instruments for the management andmaintenance o f roads. 13. Railways: About 250 km o f the current rail network o f 947 km carries some traffic, o f which 93 percent is mine-related on a 63 km stretch. The Bank's experience to-date with railway privatization in sub-Saharan Africa shows that while historically railways have played a crucial role in the economic integration and development o f African economies, the continuous expansion o fthe road network since about 100years ago means that today, railways' competitive position has been reduced to a few niche markets such as dedicated lines for mineral exports that enjoy extremely high volumes (Le., several million tons per km o f main trunk line) or to long distance traffic (over 500 km) where it can enjoy a relative competitive advantage over road traffic for some high value product such as oil and containers. Such advantage, however, is predicated upon the ability o f the railway to price its services below that o f trucks (on average at least 50 percent to 60 percent less) and usually implies that long term financial sustainability o f rail operators inAfrica relies on the fact that the government, not private operators, finance track rehabilitation as overall market demand is not large enough to generate revenue levels large enough to make railway operations financially self-sufficient. 14. Aviation: The key issue facing the aviation sub-sector relates to promoting private sector involvement in the investment and management o f aviation infrastructure and equipment with the objective to improve security and safety oversight. 15. Need for Sector Policy Formulation and Coordination.There is a need for effective policy formulation and coordination o f the transport sector within the framework o f a National 4 Transport Policy (NTP) and the proposed Integrated Transport Plan (ITP)6. This is necessary to ensure proper attention to strategic, sub-regional, national (growth and poverty reduction), inter- sectoral, inter-modal and urban issues including creating an enabling environment for their effective and efficient implementation by government, civil society and the private sector. The focus of the coordinated sector approach is expected to be on: (a) policy formulation, planning and coordination, with a clear definition of the roles and functions ofthe transport ministries; (b) financial accountability to enable a sustainable and sound financial basis for the provision and maintenance of road infrastructure; effective use of resources; provision of an acceptable and transparent structure for the management of funds and strengthening financial controls; (c) decentralization, to ensure participation of the metropolitan, municipal, and district assembly levels in the planning, management, financing and monitoring of road infrastructure; (d) commercial operation, with appropriate costing and management requirements; (e) human resource principle, with a need to motivate staff, and provide encouragement to develop and reward for achieving good results based on clearly defined performance targets; (f) operational and planning principles, with long-term transport planning framework that prioritizes activities, matches operational needs with funding, coordinates inputs of various agenciedauthorities, separates service procurement from service providers, with clearly defined responsibilities, independent technical and financial auditing, coordinated planning, management information system, and financial management system in place; (g) effective monitoring, focused on undertaking regular progress assessments against uniform performance measurements to ensure relevant and reliable management information as the basis for corrective action; and (h) empowerment and participation, entitling stakeholders to participate in road financing and management decision making, service delivery and monitoring by ensuring access to decision makingand consultation on key decisions. 16. Government Strategy. The government has undertakena number of steps to strengthen delivery and managementof the transport sector, inparticular: The NTP has beenapproved by the Cabinet7; Developed a draft sector institutional restructuring approach, with a view to harmonize planning, development and monitoring approaches; Developed draft Regulations to Road Traffic Act, with a view of enforcement of axle load control and implementation of axle load policy and action plan; Increased road maintenance funding and improved financial. management of the sector; Developed an approachto strengthenprivate sector participation inthe sector through public private partnerships (PPPs) and support to local construction industry; and Developed and successfully implemented the first phase o f their National Road Safety Strategy (NRSS I2001 - 2005). European Commission (EC) is supporting prepafationof a sector ITP to develop a range of decision makingtools to formulate more effective investment plans and strategy. The ITP, when finalized, i s supposed to take over fiom the Transport Sector Project(TSP). 'This NTP has also undergone a Strategic Environment Assessment as required by the Second Growth Poverty ReductionStrategy (GPRS 11). The term "Environment" as spelled out in the Strategic EnvironmentalAssessment (SEA) ofthe GrowthPoverty ReductionStrategy(GPRS) "includes naturalresources,social, cultural, and economic conditionsandthe institutional environment inwhich decisions are made". 5 17. The NTP heralds a change of approach, setting out a blueprint for the sustainable development of the country's transport system within the context of a coordinated strategy for growth and poverty reduction and working towards the goal of MIC status by 2015. The objectives of the NTP are to: (a) establish Ghana as a transportation hub for the West Africa sub- region; (b) create a sustainable, affordable, reliable, effective, and efficient transport system that meets user needs; (c) integrate land-use, transport planning, development planning, and service provision; (d) create a vibrant investment and performance-basedmanagement environment that maximizes benefits for public and private sector investors; (e) develop and implement comprehensive and integrated policy, governance, and institutional frameworks; and (9 develop adequatehumanresourcesand apply newtechnology. 18. The NTP establishes goals for which the transport sector, as a whole, will strive to achieve over the next 5-10 years. Work has already started on the development of the ITP which will set out measures requiredby the sector to achieve NTP goals. On completion, the ITP will become the long-term policy implementation document for the development of the country's transport system. 19. As part of the government's Public Sector Reform Agenda, wide-ranging improvements have been identified.Progress is being made inthe aviation, railways and maritime sub-sectors, where a common institutional framework is already emerging based upon the creation of organizations mandated to carry out separated functions. For example, Ghana Maritime Authority (GMA) has been created as the regulatory body for maritime and inland water services, Ghana Airports Company Limited (GACL) has been created to manage airport assets and the role of Ghana Civil Aviation Authority (GCAA) has been adapted to focus on sector regulation. 20. As follow-on to the RSDP, which closed in June 2008, the government has prepared a Transport Sector Development Program (TSDP) to guide investments in the sector during the period 2008-2012. The TSDP represents the evolution of short and medium-term transport planning from a roads perspective towards a comprehensive transport perspective, working towards a full ITP that operationalizes the strategic objectives set out inthe formative NTP. The estimated cost of the TSDP is US$4.8 billion, o f which US$255 million is for the aviation sub- sector, US$1.4 billion for the maritime and railways sub-sector, and US$3.1 billion for roads sub-sector. The government has secured funding for US$2.4 billion and is looking at options to finance the funding gap. 21, The MRHhas completed an institutional study withthe objective to: Focus the Ministry's activities on policy formulation and coordination; Create an NRA to act as asset manager for Ghana's national road network to include the current role of the Road Fund. The NRA would be responsible for administering road-sector finances, setting development and performance standards and planning for the long-term development and maintenance of Ghana's road assets to meet strategic objectives set out inthe NTP; and 6 Create a trunk roads and local roads agency to be contracted to the NRA to provide network management services for the defined trunk roads and local roads, respectively. These agencies will receive their funding from the NRA on the basis of annually reviewedperformance agreements. Their core functions are to develop five year strategic plans and annual business plans for their road networks including annual programs o fworks and procurement o f required services. 22. The study recommendations support the decentralized management o f feeder and urban roads by creating a roads agency operating ina zonal/regional/area office arrangement to manage local roads through a service level agreement with individual Metropolitan, Municipal, and District Assemblies (MMDAs). 23. The MRH has also developed a conceptual framework for Private Sector Participation (PSP) focusing on: (a) improving the legal framework; (b) increasing access to finance; (c) identifying suitable projects; (d) improving the structure o f contracts; and (e) strengthening institutions. With the objective o f further developing the PSP framework, the MRHproposes to set up a specialized PSP unit, with a core staff to focus on: (a) driving the reform process and lobbying at a high level ingovernment for the creation o f an enabling environment; (b) acting as a "one stop shop" for private investors; (c) liaising with other departments to move PSP projects forward, and keep investors informed o f progress; (d) carrying out specialist tasks, such as drafting o f concession agreements and monitoring o f operator performance; and (e) formulating a communications strategy to inform the public about PSPs. 24. The MRH is keenly aware that road safety issues are best tackled with a multi-sectoral approach, encompassing health, education, security and transport. Together with the National Road Safety Commission (NRSC), the ministry has launched its second five year NRSS I1 (2006-2010). This strategy recognizes key challenges they faced in reducing fatalities, which include amongst others, inadequate enforcement and weak stakeholder coordination. The new strategy seeks to address these areas. The focal areas o f the strategy are: (a) the road user, (b) pedestrian facilities, (c) vehicles, (d) enforcement, and (e) emergency service and care. The ministry is seeking support from the Global Road Safety Facility in conducting a country capacity review, assisting in the creation o f a more multi-sectoral approach to the delivery o f positive road safety outcomes. 3. Rationale for BankInvolvement 25. The Bank has financed a number o f transport operations in Ghana over the past three decades which has provided it an opportunity to establish a substantive dialogue with GOG on major issues inthe sector. The Bank i s a major development partner and has played a key role in improving, coordinating, and promoting a harmonized approach inthe sector. The Bank has also supported building a knowledge base through a number o f studies financed by Public-Private Infrastructure Advisory Facility, the RSDP and the Ghana Urban Transport Project approved in FY07. The proposed project provides an opportunity to implement the recommendations emerging from the studies. 7 26. The Bank's involvement would also support: (a) the dialogue on the need for a comprehensive approach inconsidering multi-sectoral issues (impact on health, education, social services, agriculture) and measuring the impact on the Millennium Development Goals; (b) reinforcingthe need for integrated policy, governance and institutional frameworks to ensure that appropriate institutional and regulatory measures are established for effective policy, planning and delivery of transport services; (c) assisting the GOG in implementing the recommendations of institutional restructuring study and other strategies through bothpolicy dialogue and analysis, investments and direct analytical support to GOG during implementation; and (d) utilizing technical expertise for policy analyses and project formulation, coordinating and leveraging financing from other development partners (aid harmonization); and e) utilizing the experience gained from the Sub-Saharan Africa Transport Policy Program and other regional initiatives to support the reform agenda. 4. HigherLevelObjectivesto whichthe ProjectContributes 27. The Africa Action Plan spells out the needto close the continent's infrastructure gap in order to stimulate growth, reduce poverty, and ultimately achieve the MillenniumDevelopment Goals. To accomplish the seven percent growth rate neededto halve poverty, Africa will have to invest about five percent of gross domestic product ininfrastructure investment and four percent to cover operation and maintenance, an amount equivalent to around US$20 billion per year, which is twice as much as was invested in the past years. The proposed investments in this project would help leverage additional resources and contribute to bridging the infrastructure gap. 28. The Country Assistance Strategy identified Ghana as one o f the few countries in sub- Saharan Africa with a chance of meeting the Millennium Development Goals. The strategy for meeting the Millennium Development Goals is rooted in the Strategic Framework for IDA'S assistance inAfrica and rests on three pillars: (a) sustainable growth andjob creation; (b) human development and service provision; and (c) improved governance and empowerment. The project supports all three objectives by: (a) increasing Ghana's competitiveness in foreign trade by reducing internal transport costs and by promoting linkages in domestic markets which are crucial factors for rapid and sustained growth; (b) improving governancethrough clarifying roles and responsibilities intransport sector and encouraging wider andmore meaningful participation of stakeholders inthe decision makingprocess; and (c) enabling and supporting the decentralized planning, management, finance and regulation of transport infrastructure and services and creating appropriate local institutions and capacity to fulfill responsibilities. 8 B. PROJECTDESCRIPTION 1. LendingInstrument 29. A Specific InvestmentLoan(SIL) instrument is proposedfor the financing o fthis project, based on discussions with government. The roads sub-sector remains the primary beneficiary o f the proposed financing, though the project would support developing a strategic context for a coordinated sector strategy and preparing building blocks for other sub-sectors (aviation, maritime, rail) by financing capacity building activities, feasibility studies and a few targeted investments. 2. ProjectDevelopmentObjective(PDO) andKey Indicators 30. The PDO is to improve mobility o f goods andpassengers through reduction intravel time and vehicle operating cost, and improvement in road safety standards. This objective will be achieved through strengthening the capacity of transport institutions in planning, regulation, operations and maintenance, and through infrastructure investments. The achievement o f the PDO will be monitored using the following performance indicators to be achieved by the end o f project: (a) Average travel time reduced by at least 20 percent on project-financed roads; (b) Average vehicle operating cost (in real terms) reduced by at least 10 percent on project-financed roads; (c) Fatality rate reduced from 22 per 10,000 vehicles to 19 per 10,000 vehicles; (d) RuralAccessibility Index(MI8) increased from 53 percent to 57 percent; and (e) Trunk road network in good and fair condition improved from 83 percent to 88 percent, for urbanroads from 36 percent to 50 percent, and for feeder roads from 72 percent to 85 percent. 31. The project would also support a number o f intermediate outcomes and outputs, which are listed inAnnex 3. Inthe aviation, maritime, and railways sub-sectors, the project will finance institutional strengthening and feasibility studies in support o f the GOG's transport sector program. The intermediate outcomes and output indicators are also shown inAnnex 3. 3. Project Components 32. The total cost o f the proposed project i s estimated at US$225.0 million which will be financed by IDA at 100 percent. The MRH and M O T will participate in the project. In addition to the ministries, the various agencies and entities which will benefit from the IDA credit are: Roadsub-sector:Driver and Vehicle Licensing Authority (DVLA), National Road Safety Commission (NRSC), Kwame Nkrumah University o f Science and Technology (KNUST), Government Technical Training Center (GTTC), Ghana RuralAccessibility Indexmeasures the proportionofpopulationwithin 2 km of an all weather road. 9 Highway Authority (GHA), Department o f UrbanRoads (DUR), and Department o f Feeder Roads (DFR); and Aviation, Maritime and Railway sub-sector: Ghana Civil Aviation Authority (GCAA), Ghana Airports Company Limited (GACL), Ghana Railway Development Authority (GRDA), Ghana Ports and Harbors Authority (GPHA), Regional Maritime University (MU), Ghana Maritime Authority (GMA), and Volta Lake Transport Company (VLTC). 33. A substantial portion o f the project is devoted to institution and capacity building, preparation o f feasibility studies, advisory support, and monitoring and supervision. These activities will be managed and coordinated by the two ministries. The project has the following seven components. 34. ComponentA Supportto MRH(US$4.2 million):This is targeted at: (a) carrying out - selected feasibility studies related to its investment program; (b) integrating trunk, urban, and feeder road networks and associated service activities into a geographical information system, strengthening road operating and safety standards and axle load control, strengthening the management o f road financing, and capacity building including carrying out other road sector policy and institutional reforms; (c) strengthening its management information system and prepare a human resource development strategy; and (d) participating in national and international training courses relevant to its functions. 35. ComponentB Support to Road Sector and EducationalEntities(UM6.5 million): - This component will support the following activities: Driver and Vehicle Licensing Authority (DVLA) includes actions to: (i)develop improved driver and vehicle licensing methods and standardize licensing procedures, permits and collection o f associated revenue; (ii), develop improved procedures for enforcement o f driver and vehicle licensing regulations; and (iii) develop improved ground facilities for driver testing; National Road Safety Commission (NRSC) includes actions to: (i)obtain road safety equipment; (ii) produce and distribute handbills, information and publicity material to raise awareness o f road safety; (iii) provide facilities and equipment for emergency response services; and (iv) organize related road safety and emergency response training activities for selectedNRSC personnel; KwameNknunah University of Science and Technology (KNUST) includes actions to: (i)construct and equip teaching and laboratory facilities; and (ii) develop and deliver post-graduate training courses on the efficient and effective management o f the transport sector; and Government Technical Training Centre (GTTC) includes: (i) develop and expand its facilities for artisans' training in the road sector, including the construction and furnishing o f lecture halls, lodging and workshop facilities; and (ii)set up, in 10 collaboration with NRSC and DVLA a pilot driving academy; and (iii) educate mechanicson vehicle maintenancestandards. 36. Component C: Improvement of Trunk Roads (US64.0 million): This will be implementedby the GHA and consist of rehabilitation of a major trunk road from Ayamfuri- Asawinso to establish a South-North transport corridor in the west o f Ghana, linking the timber and mineral rich areas and neighboring countries located west and north of Ghana, to the deep water port of Takoradi. Support to GHA will also include supervision of construction, environmental and social safeguards, environmental and social safeguard training, and to strengthen the technical capacity of GHA for improvement of trunk roads and the provision of axle load equipment. 37. Component D: Improvement of Urban Roads and Infrastructure (IDA: US$78.0 million):This component will be implementedby DUR and consist of rehabilitation of arterial roads andpublic transport infrastructure as follows: 0 Rehabilitation of the Burma Camp Road; 0 Rehabilitation of Giffard Road; 0 Financing urban transport infrastructure in Accra (including investments along tributaries to the Bus Rapid Transport corridor under implementation in the urban transport project, bus stations, terminals, depots, and studies; and Financing the preparation of a publictransport managementplanfor central Accra. 38. The component would also cover cost of consultancy for construction supervision, supervision o f environmental and social safeguards and to strengthen the technical capacity of DURfor improvement ofthe urbanroad network. 39. Component E Improvement of Feeder Roads (UW50.5 million): The roads to be - financed inthe first year are identified based on criteria outlined in paragraph 69. A total of 48 feeder road sections will be improved inall regions of Ghana at a cost of about US$20.0 million. 40. The roads to be financed as part of the second year program, with an additional US$27.5 million, would be identified during the first year of implementation. The investments will be focused in selected regions to support commercial agriculture around growth poles, in collaboration with the Ministry of Agriculture. Support to DFR will also include US$2.5 million for consultancy for supervision of construction (including supervision of environmental and social safeguards), and US$0.5 million to strengthen the technical capacity of DFR for improvement of the feeder roadnetwork. 41. Component F Support to MOT and Other Transport Sector Entities (US13.5 - million):This component would finance: Support to MOT to: (a) make the Ghana Railway Development Authority (GRDA) operational; (b) carry out studies on the development of public-private partnerships in the sector; and (c) build its capacity in transport planning, procurement, financial, project, and safeguardmanagement; 11 Support to GACL to: (a) carry out detailed design, environmental and social studies for the adaptation of Takoradi airport for civilian purposes; and (b) prepare a master planfor development of regional airports; Support to GCAA to develop regulations for the aviation industry and carry out studies on aviation sector development; Support to GPHA to carry out a feasibility study for the dualization of the Meridian RoadinTema; Support to GMA to carry out a feasibility study for the improvement of transportation on Volta Lake; Support to VLTC to carry out feasibility studies for the development of landing stages andreception facilities along the Volta Lake; and Support to RMUto improve its training capacity to provide maritimetraining services for the West Africa Region. 42. The Takoradi Airport is currently a military airport and controlled by the Ministry of Defense. The airport i s to be developed to cater for civilian use. The military and civilian facilities will exist separately but in close proximity to each other, similar to the arrangement between the Ghana Air Force and GCAA at the Kokota International Airport (KIA) in Accra. The government's objective is to havethe military cede air traffic control to the GCAA, who will provide service to the military and civilian operations alike. 43. Component G - Project Management (US$8.3 million): This component would include support for provision of technical assistance, vehicles, equipment and other operational support to the Implementing Agencies (IAs) to carry out coordination, administration, monitoring, evaluation and audit ofthe project. Table 1:ProjectCosts G Project Management 8.3 TOTAL 225.0* 4. LessonsLearnedandReflectedinthe ProjectDesign 44. The advantages of a participatory design process: The implementation o f the RSDP has provided an excellent opportunity to establish a substantive dialogue with the GOG on major issues in the transport sector. One o f the key thrusts during the program was to be all inclusive and to provide a platform for exchange of information among all stakeholders. A transport sector policy was prepared with the support o f all transport ministries and involvement o f region based agencies, private, and public sector. The process was slow, taking over two years, but the policy has ownership o f all concerned and has been more effective than a less inclusive process. The proposed Transport Sector Project (TSP) builds on the participatory designprocess and reflects a broad acceptance o f the strategy and investment priorities. 45. The need for donor coordination and consultation: All Development Partners (DPs) active inthe transport sector o f Ghana including the African Development Bank (AfDB), French Development Agency (ADF), Arab Bank for Economic Development in Africa (BADEA), Danish International Development Agency (DANIDA), U.K. Department for International Development (DflD), Japan International Cooperation Agency (JICA), Kreditanstalt far Wiederaujbau (KfW), Millennium Challenge Corporation (MCC), Netherlands, Saudi Fund, UnitedStatesAgency for International Development (USAID), EuropeanCommission (EC), and the World Bank) have been providing support through commitments to RSDP, under coordination and full ownership of government. The practice o f regular consultations (through regular joint missions, monthly and annual meetings), has demonstrated the advantage o f regular contact between all actors and interested parties. This coordination will continue during the implementation o f TSP. 46. The need for comprehensive sector management support: One o f the lessons emerging from implementation of RSDP is that meaningful sector-wide management i s difficult without adequate coordination and financial discipline. There i s a need to coordinate activities o f the two transport ministries in support o f a common agenda and within an agreed financial envelope. The TSP has been prepared ina common framework and is expected to guide decision making in the future. It is also proposed to set up a Project Steering Committee (PSC) as an inter-ministerial oversight body, composed o f representatives from the two transport ministries and the Ministry o f Finance and Economic Planning (MOFEP) to develop and implement an integrated approach to achieve the objectives o f the TSDP. 47. The importance of accompanying stable maintenance funding with better programming:Ghana set up a road fund in 1998 and has succeeded in successive increases in the fuel levy as agreed in the letter o f sector policy. The total contribution to the road fund in 2007 was about US$130 million, o f which more than 90 percent was from fuel levy. However, a secure and dedicated funding for road maintenance is not by itself a sufficient condition that maintenance needs are met and addressed in a prioritized manner. It i s equally important to develop a clear work program and planning and management capacity to ensure that maintenance needs are addressed as a first priority and users get value for money. As part o f the MRHcapacity buildingcomponent, the planningandmanagement capacity ofthe roadfund will be strengthened. 13 48. A need to provide a common basis for evaluating alternative investments: Experience world-wide suggests that it is important to provide a level playing field for effective multi-modal competition and regulation. This would require that different alternatives are evaluated using a common basis before making specific investment decisions. It i s expected that the ITP under preparation, would develop a prioritized investment program for all transport modes. 49. A good project monitoringsystem is necessary for effectivemanagement:A detailed monitoring and evaluation component, including collection o f all baseline data, has been designed and built into the project. The performance indicators will be monitored annually with extensive consultations andpresented duringthe annual DPs' meeting. 5. AlternativesConsideredandReasonsfor Rejection 50. . The Bank has been involved in the road sector in Ghana for a long time. While substantial progress has been made and both the quantity and quality o f roads in Ghana have improved, donor assistance inthe road sector is likely to be required for quite some time. During the preparation o f this project, therefore, consideration was given to whether an Adaptable Program Loan (APL) might be more appropriate. The GOG has expressed a distinct preference for a Specific Investment Loan due to some difficult experience in the past with an Adaptable Program Loan in another sector. It was also felt appropriate to develop a long-term investment support program after completion and adoption o fthe ongoing ITP. 5 1. A large share o f the proposed financing will be committed to the roads sub-sector. The project is also financing capacity building and technical assistance o f MOT, and multiple other agencies and entities in rail, ports and harbors sub-sectors, which adds to the institutional complexity o f the project. However, there i s clearly a need to coordinate strategic framework o f different transport sub-sectors to develop harmonized laws and institutional framework and support investment planning decisions. The government has prepared the NTP and TSDP through a highly participatory and consultative process. This is Ghana's first comprehensive NTP and, as such, marks a new era in establishing strategic objectives and performance standards for transport infrastructure and services. It i s critical to continue this collaboration and the proposed project involves working with the different ministries in defining priorities and strategies that serve the national development goals. C. IMPLEMENTATION 1. PartnershipArrangements 52. Although the project is not being co-financed jointly or in parallel with any other development partners, it is part o f a broad program prepared inclose coordination with all o f the other active development partners in the Ghana transport sector. It i s expected that each o f the development partners will finance components o f the government's five-year program. Specifically, the E C will provide about US$7.5 million to the railways and harbor, US$8.0 14 million to aviation and US$95 million to GHA. The modalities of how these funds will be providedare under discussionbetweenEC andGOG. 2. Institutionaland ImplementationArrangements 53. The project will be implementedby MRH, which will have the overall responsibility for its coordinationand management.Implementationwill be carried out on the basis of an Annual Work Plan and Budget prepared by the MRH, with inputs from the IAs and Beneficiary Agencies (BAS). The IAs are: MRH including Department of Urban Roads (DUR) and Department of FeederRoads (DFR), GhanaHighwayAuthorities (GHA), MOT, Ghana Airports Company Limited (GACL), GhanaCivil Aviation Authority (GCAA), GhanaPorts and Harbors Authority (GPHA); the BASare: Driver and Vehicle Licensing Authority (DVLA), Kwame Nkrumah University of Science and Technology (KNUST), Government Technical Training Center (GTTC), National Road Safety Commission (NRSC), Regional Maritime University (RMU), Ghana MaritimeAuthority (GMA), Volta Lake Transport Company (VLTC). The IAs will be involved in procurement of goods, works, and services, contract management and financial management.Incontrast, the BASwill be responsiblefor providingtechnical inputs for the carrying out by the IAs of their respective components. The details on fiduciary responsibilityandprocessflows underthe projectare providedinTable 1(Annex 6). 54. All components will be managed in line with Bank fiduciary and safeguard . , requirements. In those areas where expertise is lacking or not fully developed, short-term consulting specialists (management, engineering, procurement, financial management) will be employedto enhance performanceandproject implementation.The short-termspecialistswould be financedas partofthe capacitybuildingcomponentof MRHandMOT. 55. Implementationwill be carried out on the basis of an Annual Work Plan and Budget prepared by the MRH, with inputs from participating MDAs and entities. A Project ImplementationManual (PIM) will be prepared by GOG for: (a) institutional coordinationand day-to-day execution of the project; (b) disbursement and financial management; (c) procurement; (d) environmentaland social guidelines; (e) monitoring, evaluation, reporting and communication; and (9 such other administrative, financial, technical and organizational arrangementsandproceduresas mayberequiredfor the project. 56. To facilitate project implementation, the following Committeesand Groupswill be set up anddetailedas part ofthe PIM: (a) A PSC as an inter-ministerialoversightbody; (b) A PIT for coordinatingimplementationofproject activities andreporting; (c) A Finance Management Team (FMT), as part o f the PIT, for the overall financial managementandreporting; and (d) Procurement Team (PT), as part of the PIT, with direct responsibility for procurementactivities andto providequalitycontrol. 57. The following reports will be preparedand consolidatedby the PIT on a quarterly basis: (a) Quarterly Financial Reports will consist of sources of funds, statement of uses of funds by 15 project activity, project cash withdrawals, special account reconciliation statement and a six- month project cash forecast; (b) Quarterly Project Progress Reports will consist o f an output monitoring report on contract management, project management and monitoring; and (c) Quarterly Procurement Management Reports will consist o f procurement process monitoring for goods, works and consultants' services, and contract expenditure reports for goods, works and consultants' services. 58. Quarterly progress reports will summarize activities o f work progress achieved in the previous three months and submitted by the 30tho f the first month o f the following quarter. The quarterly report will be prepared by the PIT and cover the status o f each civil works contract, funds committed against budgets by project, and funds disbursed by projects. The quarterly reports will contain the detailed program activities for the next 12 months, updated at the end o f each quarter. The quarterly reports will be discussed by all the IAs and matters arising treated accordingly. PIT will lead the preparation o f mid-term review report and the Implementation Completion Report (ICR) with assistance from the Ministries, Departments, and Agencies (MDAs) andthe Bank. 3. Monitoring and Evaluation of OutcomesDtesults 59. Monitoring and evaluation o f the overall project will be the responsibility o f the PIT. However, each participating ministry and its agencies will be responsible for collecting information on their respective components. The Quarterly Project Progress Report will report and monitor the outcomes o f activities related to: (a) progress in civil works, services, institutional support, and procurement activities; (b) progress in achieving project development objectives and intermediate outcomes. 60. The MRH has a Department o f Monitoring and Evaluation, with the responsibility to monitor key outcome indicators. A set o f outcome indicators to monitor progress in each o f the transport sub-sectors (road, rail, harbors and aviation) were developed in 2005 in discussions with the development partners, and is beingreported on an annual basis. As part o fthe proposed project, the efforts will be further strengthened and studies will be conducted to monitor progress on a regular basis. 4. Sustainability 61. Sustainability will be the cornerstone o f the overall project strategy for ensuring quality, continuity and reliability o f the institutional, regulatory and infrastructural improvements carried out under the project. While each one o f the project sub-components has been designed with sustainability in mind, the extent to which all the achievements under the project are sustained will depend on a number of factors including: (a) continuing attention to maintenance issues in general and committing sufficient resources to it; (b) the government's willingness to create a rational institutional structure for the sector and create an incentive framework to attract and retain suitable technical manpower to address sectoral issues ina comprehensive manner; and (c) strengthening the local construction industry and strengthening the role o f the private sector in the management oftransport sector activities. 16 62. The project has been designed with a clear focus on maintenance, capacity building, and improving the governance of all stakeholders in the transport sector. On the particular issue of road maintenance, road fund currently supports about 60 percent of periodic maintenance and 80-90 percent of routine maintenance; as part of the TSP, management of the road fund would be strengthenedand government is committed to makingmaintenancea first priority. As a result of the initiatives, road fund is expected to cover 100 percent of routine maintenance and over 75 percent of periodic maintenance. On strengthening the capacity of domestic construction industry, the government has prepared an action plan with a focus on building management capacity of private contractors and employers, strengthening the business environment, and packaging the contracts in small lots (especially for feeder roads) to enhance local participation and employment. The action planwill be implementedas part ofthe TSP. 5. CriticalRisks andPossibleControversialAspects 63. Key risks associatedwith the project and corresponding mitigationmeasures are as follows: 17 Table 2: Risksand Mitigation Measures ~ ~~~~ Residual Risk Rating Mitigationmeasures Risk Rating Weak commitment ofGOGto S MRHhas preparedan InstitutionalRestructuring S institutionalreforms inthe Study, with extensivestakeholderparticipation and transport sector. consultations. Study recommendationswere discussedduring DPs Annual MeetinginApril 2008. As part of the proposedprojectfurther support will beprovidedto developspecific instrumentsto implementthe study recommend- dations, includinglegislative andregulatory frameworks. The project involvestwo S Key measuresinclude: (a) the primaryproject M ministriesandanumber of executingagency will be MRHwith a centralized agencies, departmentsand FM system andoperatinga single Designated entities. While MRHhas long Account; (b) settingup of a FinanceManagement experienceworkingwith the Team of Headsof Accounts of IAs,headed by Bank,MOT is arelativelynew Director of Finance(MRH), for coordination and ministry.As a result, MOThas effective projectmanagement; (c) set up a limitedcapacity inmanaging ProcurementTeam inMRH, headedby Director Bank's procurementand Procurement,for overall coordination, financial procedureswhichmay managementand quality controlof all project adversely impactproject relatedprocurementactivities. implementationand increase risk. The risk of fundsnot beingused S a) the MRHwill prepareAnnual Work Planand M for intendedpurposes, Budget,with details of expendituresby each economically andefficiently. component;b) conductprocurement,financial and technical audits on an annualbasis; c) arrange- ments have beenestablishedwith KNUST and GIMPA to providetraininginthe use ofBank's procurementprocedures. GOGdoesnotenact and S Discussionson-goingwith GOGon arrangements S implementtariff increases for the to meetthe maintenanceneeds anddevelopa roadfundto keeppace with prioritizedmaintenanceprogram.MRHhas inflationandmaintenanceneeds. initiateda review ofroadhndmanagement and is committedto implementstudy recommendations. The investmentprogramsof S The investmentprogramhas beendevelopedin M different sub-sectorsare notwell accordance with the agreedNTPandhas been coordinatedandleadto sub- vettedextensivelyby all DPs. The governmentis optimal investments. also preparing an ITPto develop a prioritized investmentprogram, consideringthe different modesandtheir complementarities.A consultation andparticipationmechanismis beingput inplace to strengthenquality controlandoversight. Inadequateperformanceofthe M MRHhas alreadycommencedacontractor M local constructionindustry and reclassificationprocess andwill be creating quality assurance of contract specificprogramsto strengthencapacity of local works. contractingandconsultingindustry.Also a training programwill be designedfor the MRH and its agencies specifically gearedto improve managementcapacity andaccountability. 18 Residual Risk Rating Mitigationmeasures Risk Rating Failure of GOGto create an S Roadmaintenanceandconstructionactivities in M enablingenvironmentfor private the country are almost entirely carriedoutbythe sector investmentintransport privatesector. The MOFEPhas set up aunitto infrastructureand services. evaluateprivate sector proposalsand is exploring options to leverageprivate sector financing includingroadconstruction. Increasedsupply of improved M Roaddesigns will be developedto minimizetraffic L roads may leadto highertraffic accidentsandparticular attentionwill be paidto accidentsandfatalities. black spots.GhanaNRSC is one ofthe most effective organizationsinsub-SaharanAfi-ica; it has developedactionplan, built capacity inroad safety committeesanddevelopedandimplemented weekly mediaprogramstargetedat various road users. Underthe proposedproject, support will be providedto further strengthenroadsafety activities. OverallRiskRating I S M H=High; S=Substantial;M=Moderate; L=Low 6. Credit ConditionsandCovenants 64. By effectiveness: 0 The Recipient has adopted the PIM, in form and substance satisfactory to the Association; and 0 The Implementation Agreementshavebeenduly executedby the IAs. 65. Covenants applicable to project implementation 0 Standard financial management, procurement and implementation covenants as tailored to the project; and 0 Project-specific covenants relating to: (a) maintenance of the PSC, PIT and IAs; (b) execution and compliance with an implementation agreementamong the IAs and with the project implementation manual; (c) preparation of annual work plans andbudgets for approval by the Bank; (d) implementation of the project in accordance with the ESMF/RPF/EMPs/RAPs; and (e) key outcome indicators. 19 D. APPRAISAL SUMMARY 1. EconomicandFinancialAnalyses 66. The civil works, including.contingencies, represent about 75 percent of project costs. Economic analysis was not conducted on capacity building, policy reform, studies, and project management sub-components. The investments in feeder road network (which includes spot improvements and minor rehabilitation at a cost of about US$100,000-US$300,000 per road section) were selected on the basis of cost-effectiveness analysis. An economic analysis was conducted for the civil works, which consist of reconstruction, rehabilitation, and upgrading of the: (a) Ayamfuri-Asawinso (GHA sub-component); and (b) urban road network (DUR sub- component). Table3: EconomicandFinancialAnalysis Sub-Component NPV(@ 12%) ERR FYRR (US%million) GHA road (Ayamfuri-Asawinso) 55.0 17.9% 22.4% DUR Roads - Giffard Road 2.5 20% - BurmaCamp Road 2.7 15% 67. For the GHA road, the main benefits resulting from improving the road section to asphalt concrete standardincludereduction invehicle operating cost to existing traffic and transport cost savings for diverted freight traffic. The economic analysis was undertaken using the road planning model, the Highway Development and Management Model version 4 (HDM 4). The initial economic analysis was undertakenin 2006 which was updated in July 2008 to take into account a major change in input costs. The switching value analysis shows that construction costs would have to rise by 44.8 percent before the project becomes marginal (i.e., has a 12 percent rate of return). Similarly, traffic benefits would have to fall by 34.6 percent to achieve the same result. The first year rate of return (FYRR) is 22.4 percent (well above the opportunity cost of capital of 12 percent) indicating that the project is timely. The proposed sub-project would induce positive socio-economic impacts by facilitating trade between communities and regions. A majority of households engaged in horticulture (Le., pineapples), vegetables and legumes farming (Le., tomatoes and the like) would benefit from improved road conditions resulting inreducedpost-harvest losses. The resulting benefitshave not beenquantified. 68. The potential benefits from improvements in Accra East corridor (Giffard road and Burma Camp road) were computed based on vehicle operating cost, travel time and road maintenance savings. Traffic was simulated based on 30 year life using the Questor model. The economic rate of return (ERR) for the Giffard road is estimated at 20 percent and Burma Camp road 15 percent. 69. For the investment in feeder roads, given the small nature of individual investments in phase 1, the selection of specific feeder roads is based on cost-effectiveness criteria in the 20 following manner: First, feeder roads already included in the existing national network but of low standardwere considered. Second, feeder roads were prioritized according to their existing condition; the poorest quality roads were given top priority. Against this screening, roads were selected, by region, on the basis of maximizing population given all-year accessibility to the primary and secondary road network. Finally, this selection was screened against availability of social services, including health clinics, schools, markets, and extension services. 2. Technical 70. The project is a part of an integrated program of development activities for Ghana's transport sector from 2008 to 2012. The main road (Ayamfuri-Asawinso) would establish a south-north transport corridor in the west of Ghana, linking the timber and mineral rich areas, and neighboring countries located west and north of Ghana, to the deep water port of Takoradi. Currently, the road section consists of poor gravel and sealed road surface, which will be improved to asphalt concrete standard. The urban and feeder roads have been selected for upgrading and periodic maintenance on the basis o f sound technical, economic, and environmental analyses. The feeder roads have been selected taking into consideration the improvements in connectivity, agricultural output, and access to socio-economic services. Taking into consideration the rapidly increasing road construction costs in sub-Saharan Africa, particular attention will be paid to managing the quality, costs, and delays. Effective supervision monitoring mechanisms are being developed to ensure that the physical works are completed withinthe agreedcontractual time. 71. The second year program for the feeder roads will be prioritized to support commercial agriculture around growth poles, in coordination with the Ministry of Agriculture. The procedures for maintenanceof feeder roads will also be reviewedand updated. 3. Fiduciary 72. Financial Management: The primary executing agency for the project will be the MRH, which will coordinate activities of the various IAs and BASunder the project. To ensure proper coordination and effective financial management (FM) arrangements in the project, including adherence to service standards on uniform reporting, meeting deadlines for submission of payments vouchers, processing procedures, etc., all Heads of Accounts of the IAs have formed a FMT headed by the Director of Finance (MRH), as part of the PIT. The IAs will be responsible for contract management and implementation, while the respective ministrieswill be undertaking this task onbehalf ofthe BASwithintheir sub-sectors. Theresponsibility ofthe FMTis to ensure that throughout implementation there are adequate financial management systems inplace which can report on the use of project funds. The responsibility for final verification and authorization of payments for all contracts and activities, maintenance and operation of the project's designated account, and make payments to contractors and service providers will be the responsibility o f MRH. As part of the project financial management arrangement it has been agreed by all IAs to adopt a centralized financial management arrangement under the MRH which will operate a single DesignatedAccount. 21 73. Assessment of the financial management arrangements at MRH concludes that there are systems in place that satisfy the Bank's minimumrequirements under OPBP10.02, and overall financial management arrangement is rated as moderate. 74. Procurement: An assessment of the capacities of the two Ministries and other IAs to implement procurement actions for the Transport Sector Project (TSP) was carried out by the Bank in January 2009. The assessment reviewed the organizational structure for implementing the project and the interaction between the IAs and their staff responsible for procurement and relevant central unit for administration and finance. The assessment established that the ministriesand other IAs: (a) were respondingto Ghana's Public Procurement Law; (b) hadentity tender committees and review boards intheir permanent organizations; (c) had adequate internal technical and administrative controls and anti-corruption procedures; and (d) had satisfactory appealmechanisms for bidders. 75. The assessment showed that the road sector IAs (MRH including, DUR and DFR, and GHA) have handledBankprojects inthe last six years under the RSDP andhave, as institutions, gained significant experience to handle procurement under the project. However, the capacities of other BASincluded in the road component (KNUST, GTTC, DVLA, and NRSC) were found to be inadequate because they have only participated in relatively few and simple procurement activities, using the Bank's procedures and guidelines. 76. The assessment o f the MOT identified that MOT itself has limited capacity and experience in procurement using the Bank's Guidelines. In contrast, the other transport sector IAs (GCAA, GACL, and GPHA) have relatively strong procurement units, headed by qualified procurement staff that have also beentrained inthe use of the Bank's procurement procedures at Ghana Institute o f Management and Public Administration (GIMPA). Further, the other BAS included in the transport component (MU, GMA and VLTC) also have limited or no experience inthe use of Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, revised October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" datedMay 2004, revisedOctober 2006. 77. Based on the above, each of the IAs will be responsible for procurement for their components, and MRH and MOT will handle procurement for the BASwith the technical input of the BAS.To strengthenthe procurement arrangements and improve quality control, MRHand MOT have agreed to take advantage of the overall project coordination role assigned to the MRH.A ProcurementTeamwouldbeset upprior to effectivenessas part ofthe PIT, comprising of key procurement staff of all IAs and headed by the director of procurement inMRH.The key function of the Procurement Team will be to coordinate the work of different Ministries and IAs and provide quality control for all procurement related activities. The residual overall project risk for procurement will be moderate. 4. Social 78. SocialBenefits. The proposedroad rehabilitation works, particularly feeder roads andthe Ayamfuri - Asawinso trunk road which traverses rural areas and resource rich western region, are expected to contribute to income generation, savings in travel time, and reduced transport burden. This would result in improved access to public services, schools, health clinics, and 22 agricultural inputs such as fertilizers, which will contribute to the achievement o f Millennium Development Goals. The urban roads will contribute to enhanced mobility and access to social services, and improve competitiveness o f the city. 79. Gender issues. The road projects will benefit women and other vulnerable groups (children, elderly and poor) by responding to their mobility needs through the provision o f better access to basic social services, safe and enhanced access to these facilities, both in rural and urban roads. Small cereal drying platforms will be provided in selected villages along the Ayamfuri -Asawinso roadcorridor, which traverses rural areas, and along selected feeder roads. Likewise, road side markets to benefit village women traders will be supported. Gender issues were assessedinthe Social Impact Assessment (SIA) and the Resettlement Action Plans (RAPs). 80. Human Immunodeficiency Virus/ Acquired Immune Deficiency Syndrome (HIVIAIDS) prevention. The practices (policy, strategy, operations documentation), established in combating HIV/AIDS in ongoing projects will be continued. Road specific HIV/AIDS prevention action plans will be prepared in accordance with the Ministry's framework during mobilization. The target groups o f the plans will include: road contractors and their staff, supervision consultants, and their staff, local communities along the roads, and professional drivers and passengers. Sexually transmitted infections (STIs) and HIV/AIDS prevention clauses will be incorporatedinthe works contracts. 5. Environment 81. The civil works to be carried out inthe first year work program for this project include the upgrading and rehabilitation o f existing roads. The planned civil works will not have irreversible negative impacts during project implementation. This is especially the case for the road upgrading works, which will not require road re-alignments and will require only limited land acquisition. The potential adverse environmental and social impacts identified will be limitedand site specific; they will be mitigated incompliance with the Bank's safeguard policies. An Environmental and Social Management Framework (ESMF), and a Resettlement Policy Framework (WF) were prepared for the road sector in 2006, and re-disclosed for this project in December 2008. Environmental Impact Assessments (EIAs), Environmental Management Plans (EMPs), and Resettlement Action Plans (RAPs) for the first year's road projects (four roads) have been prepared and disclosed in-country and at the InfoShop in March 2009. Additional works to be carried out in the second year include: a) minor civil works (construction o f classrooms, laboratory, hostel, workshop and offices); and b) feeder roads improvements. These works will be subject to the Environmental and Social Management Framework (ESMF) requirements and site specific Environmental Impact Assessments (EIAs)/Environmental Management Plans (EMPs) and RAPs, if need be. The cost for the implementation o f the mitigation measures as identified in the RAPs will be covered by GOG while the cost for HIVIAIDS prevention and EMP civil works operations related to project investments and capacity buildingwill be financed by the Bank. 23 6. Safeguard policies Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [XI [I NaturalHabitats (OP/BP 4.04) [I [XI Pest Management(OP 4.09) [I [XI Physical CulturalResources (OPBP 4.11) [XI [I Involuntary Resettlement (OPBP 4.12) [XI [I Indigenous Peoples (OP/BP 4.10) [I Ex1 Forests (OP/BP 4.36) [I [XI Safety of Dams (OP/BP 4.37) 11 [XI Projects inDisputedAreas (OPBP 7.60) [I [XI Projects on International Waterways (OP/BP 7.50) [I [XI Piloting the Use of Borrower Systems to Address Environmental and Social SafeguardIssues inBank- [I [XI SupportedProjects (OP/BP 4.00) 7. Policy Exceptions and Readiness 82. No policy exceptions are planned. The proposedproject meets all quality at entry criteria and it is at a high level of implementation readiness. The detailed engineering designs and bidding documents are ready for the first year's work. The EIA and RAP for the first's work have been disclosed and an action plan has been developed to address the key issues prior to contract mobilization. 24 Annex 1:Country and Sector Background Ghana: Transport Sector Project The Transport Sector inGhana 1. The transport sector plays a strategic role inthe economy of Ghan accountin for about four-five percent of gross domestic product. The country has-a well developed transportation system consisting of two large deep-water ports, a 947 km railway network, a 68,000 km road network, one international airport and eight regional airports and airstrips throughout the country. Ghana's two ports handle sevenmillion tons of import and export traffic annually. This figure will increase over the coming years if Ghana is able to capture a larger share of shipments to and from landlocked countries, particularly Mali, Burkina Faso, and Niger. Roads are the predominant mode o f transportation, currently accounting for 94 percent of freight and 97 percent of all traffic movements inthe country. 2. There are no available alternativesto roads other than for movement ofbulk commodities for export, which are suited to transport by rail from central collection centers and mining areas to the ports. The railway system has limited coverage (Accra-Kumasi-Takoradi) and serves only the southern part of the country, excluding the largest port of Tema. It is presentlyoperating at low efficiency under parastatal management, and options for granting concessions on infrastructure and operations are under consideration. 3. Inthe past, Ghana had a relatively healthy infrastructure base. However, economic crisis and decline during the 1970s and 1 9 8 0 ~combined with a weak institutional capacity led to ~ deterioration in the quality of the infrastructure network and its operation. This left transporters and producers without the ability to expand services to a larger segment of the population and unable to compete effectively inregional markets. 4. Since 1990, the government has developed, within a framework of projects supported by the development partners, major efforts to remedy deficiencies in the transport sector. In 1997, the Government of Ghana (GOG) reformed its role and functions inthe sector, increasedprivate sector involvement particularly in port operations, maritime trade, and road maintenance. A Road Fundwas also set up with a dedicated source of funding for road maintenance. 5. The importance of transport services and infrastructure was highlighted in the Second Growth and Poverty Reduction Strategy (GPRS 11) as an enabler for economic growth and poverty reduction. It is increasingly recognized that the transport sector serves and facilitates other sectors. Also, Ghana's location at the cross-roads of several trade corridors in West Africa makes it an important player in the regional integration and trade facilitation programs of Economic Community o f West African States and West African Economic and Monetary Union. 6. Available international evidence suggests a strong positive relation between road investment, growth, and poverty reduction. In Ghana, studiesg conducted during 2004-2005 revealthat: BaselineStudieso fthe RSDP, Ministry ofRoadsand Highways(2006), Ghana 25 0 improved roads results in (a) a 20 percent increase in trips to hospitals; (b) a 23 percent increase in the price o f maize received by farmers; (c) a 65 percent lower costs o f traveling to markets; and (d) a 41 percent lower costs o f traveling to welfare facilities; 0 a direct positive correlation exists between the incidence o f poverty and road condition; and 0 improvements in regional corridors reduce delays in cross-border movement o f goods, people and services; reduce waiting time at ports; and promote economic activities. Expectationsfor the Transport Sector and Growth 7. The role o ftransport infrastructure and services ineconomic growth has also been widely recognized and the GPRS I1sets out broadpolicy objectives for the transport sector as follows: 0 To ensure the provision, expansion and maintenance of appropriate transport infrastructure, which strategically links the rural production and processing centres to the urban centres, and while ensuring the provision o f an affordable and accessible transport system that recognizes the needs o f people with disabilities. 8. The government's other stated objectives for the transport sector include: 0 ensuring provision o f affordable, safe and accessible transportation system that recognizes needs o fthe people andbusiness enterprises including farmers; and 0 developing and strengthening appropriate legal, institutional and regulatory framework to regulate all modes o f transportation to ensure an efficient transportation system. 9. Recognizing the importance o f trade to Ghana's growth, a long-standing policy objective for the transport sector i s to establish an efficient, modally complementary and integrated transportation network for the movement o fpeople and goods at the least possible cost within the country, as well as to and fiom the country, both regionally and internationally. The government's recent Transport Sector Growth Workshop (May 2006) resulted in a matrix o f indicators and strategies aimed at achieving the following outcomes for the transport sector: Integrated and adequately funded transport system; Improved transport infrastructure and facilities; Reduced transport costs for users and operators; and Effective policy formulation and coordinatiordregulation to support an efficient transport system. 26 The Strategic Context \ 10. Ghana's national policy framework is changing. For policy makers and practitioners throughout the transport sector, it means that the way decisions and priorities are made, and the way performance is bothmeasuredandreported is changing. For example, due to the demands o f globalization and the global pursuit for sustainable development, the government is requiredto develop polices that manage Ghana's international relations in areas such as trade, investment and environmental impacts. The same goes for laws and regulations that apply to the transport sector. Compliance with international conventions and harmonization of laws and regulations throughout the West Africa sub-region will facilitate more trade and reduce costs and uncertainties for producers, passengers and service providers. 11. The national development policy framework has also evolved over the last five years. The GPRS (2002) and its successor, GPRS I1 (2005), set out a coordinated program for the economic and social development of Ghana. GPRS I1 incorporates the priority Millennium Development Goals, and, as confirmed by the priorities inthe annual budget statements, GPRS I1 determines the annual priorities for allocating government resources. GPRS I1 and the Millennium Development Goals also provide the primary focus for the Development Partners (DPs) funding in Ghana. Furthermore, the importance of transport infrastructure i s highlighted in GPRS I1as an enabler for economic growth and poverty reduction. The transport sector serves and facilitates other sectors suchas trade, private sector development, agriculture andtourism. The current state of Transportationin Ghana 12. Table 1below gives a good indication of government's investmentinthe transport sector where about 99 percent ofthis investment is dedicatedto the road sub-sector, including statutory funds received through the Road Fund. It should also be noted that state owned enterprises such as Ghana Ports and Harbors Authority (GPHA), Ghana Civil Aviation Authority (GCAA), and Ghana Railway Company Limited (GRCL) generate income through sales and licenses and receive some investments from the private sector. These figures are not included in this table. There may be the need to review the current trends in allocating government funds if some impact i s to be made inother modes of transportation. Table 1: Government'sinvestmentinthe transport sector (in TrillionCedis) 2008 4.748 0.316 0.229 j61.687 ~ Note: Budget is inold Cedis ($lO,OOO= GH61) 27 RoadTransport 13. Road transport is by far the dominant carrier of freight and passengers in Ghana's transport system. It carries about 94 percent of freight traffic and reaches most communities, includingthe rural poor. Ghana's road network was about 38,000 kilometers in2000. Since then there has beenrapid increaseto 49,000 km in2001 and to 60,000 km by the end of 2007. Inthe meantime, improvements in road condition have been gradual. For example, the road condition in 2004 was 36 percent good, 36 percent fair, and 28 percent poor as compared to 39 percent good, 29 percent fair, and 32 percent poor in 2007. Deferred maintenance of roads also has cost implications. Apart fiom increasing vehicle operating cost to service providers, rehabilitation cost to government could be as much as 8 - 10 times higher when carried out at a future date. Improvement in road condition could be achieved through planned expansion of the network, effective maintenance and financial management and improvement in the local construction industry. 14. There has been a rapid growth of vehicles in recent years. The effect is congestion in urban areas, resulting in slow and unreliable journeys. Congestion is also being observed in towns located along main highways. Moreover, based on the experience o f other developing countries, there is likely to be a rise in accidents, fatalities and injury rates. This trend may already be emerging in Ghana. Safety issues also emerge due to ineffective control and enforcement of speed limits on trunk and urban roads. The situation is worsened when considering the additional traffic generatedby growing freight movements through the cities and along the highways. Maintenance, improvements and implementation of traffic control devices are inadequate. There i s unsafe behavior of road users and insufficient enforcement of traffic regulations. 15. Urbanareas needspecial attention. Traffic congestion inthe city leadsto pollution, health related problems, wasted time and excess fuel consumption. Currently, the roads are packed yet there is the need to create greater carrying capacity. Public transport is not regulated and no mechanism currently exists for its effective regulation. Land use and spatial planning are not integrated with transport planning. Development is taking place without consideration of transport needs or impacts. Unplanned and uncontrolled development has resulted in an urban sprawl pushing out the boundaries of the cities and making demand for transportation more complex. As a result, travel distances have become longer, travel times and costs have increased considerably, marginalizing the poor. Retail and industrial developments are carried out with inadequate transport provisions such as parking and public transport linkages. Major facilities such as large markets are planned and developed with little consideration for transport implications. These poorly planned facilities result in a worsening situation regarding road congestion. 16. Enforcement of existing laws and regulations, safeguarding transport infrastructure, services, and users i s weak or inconsistently applied. Axle load control i s ineffective leading to excessive damage to road pavements. Poor traffic management, especially in the cities compounds the congestion problem. Unrestrained encroachment of physical development of 28 buildings, people andtraders along transport infrastructure corridors causes severe restrictions in traffic movements and resulting congestion. 17. There are no standards for controlling vehicle condition or emissions. Emissions from passenger vehicles account for 70 percent o f total emissions in Ghana. Standards and laws regulating vehicles and their operations also vary throughout the African sub-region, creating non-physical barriers to trade with neighboring countries. 18. Since 1961, it has been increasingly difficult to provide adequate funding from the consolidated fund to maintain the road network. A first generation road fund was established in 1985 to help solve this problem. In 1997, the Road Fund Act (Act 536) was promulgated to provide a legal framework for road maintenance. This has resulted in great improvements in funding o f road maintenance. The current level of the road fund is about 60 percent of the projected level o f maintenance costs. Table 2: RoadFund FuelLevyfor the period2002-2007 - Year I ; - FuelLevy(per liter) -- Actual ActualRevenue __ -- .-I___---- ~ L , Equiv.------I' - - ; US$ I Exchange-r-- ) - _ cedis I _ US consumption Billion I ~ i rate 1 cents (billionliters) cedis 1 I Million 2002 : 230 ' 8013- ' - , *' 2.87 __ - - i 1.62 371 46 " " 111 --.. .I - I Il_l__l _ j _I- I _I 2003 400 8695 4.60 72 - -e-- - - _- I ~ 1.61- " - --_- -628 - _I__ I_ _II 2004- I400 , 9060- ' 4.42 1.78 1710 78 -- - - - - - -I - I ___" - _ _ r -- .x xI1 I-- 2005 400 9 l i 4 - 6.12- ___ 1.31 i 7 2 8 - 80 ~ I ~ 4 - 2006 ' 600 9204 6.52 1.71 1086 118 2007 600 9391 6.39 1.83 1098 117 Source: 2007 Review Report, Ministry of Transportation Note: Budget is inold Cedis ($lO,OOO= GH$1) Railway 19. Ghana's railway network has a length o f 947 kilometers o f mostly single track rail o f 1.067m (3' 6") gauge located in the southern part o f the country. In 1965, it carried 2.3 million tons o f freight and 8 million passengers at a time when the GRCL was financially viable. By 1985 however, due to a number o f factors, including ineffective management, the changing world economy, sharp drops in commodity prices, and competition from the road sector, among others, the rail sector's position as a prominent transport mode has diminished. With lower - revenues and increasing labor costs, rail operations could not support modernization and sustain - - its maintenance program. The worsening financial situation o f the railway resulted in the usual vicious cycle faced by many railroads: default on loan payments --$poor maintenance drop o f service quality loss o f customers more drops inrevenues. 20. There have been some improvements in rail sector performance after support from development partner assistance programs. This allowed Ghana to undertake some rehabilitation 29 works and acquire new rolling stocks. Additionally, Ghana Bauxite Company and Ghana Manganese Company (which critically depend on rail exports of their products), advanced money for track maintenance. As a result of these investments, there has beena general increase in demand for rail freight and passengers. But service performance and financial risk are still overriding concerns. 21. The rail system has the potential to become a vital part of Ghana's transport system, carrying a larger portion of travelers and freight on the busiest transport corridors. As the economy grows, there will be increasing demandon the transport system, and rail can become a viable alternative to road transport, provided costs are kept under control, efficiency and reliability are imflroved, and ongoing investments are secured for development and maintenance o f the system. The GOG is actively considering private sector participation as a means of supporting rail sector improvements and future development. 22. A GRCL concessionprocessactually beganinAugust 2002 but collapsed inAugust 2005 when arrangements for divestiture could not be successfblly completed. Currently, attempts are being made to enter into a public-private-partnership arrangement with current and potential users. Civil Aviation 23. Civil aviation functions in Ghana comprises of policy formulation, technical (safety) and economic regulation; airport (asset) management; and air space management. Service providers consist of international and domestic airlines that operate to and from Kotoka International Airport (KIA) to various international destinations as well as Kumasi, Takoradi, and Sunyani in Ghana. A maintenancebay has beenestablished at KIA to service domestic operator aircrafts. 24. General aviation development is being encouragedbecause of economic benefits for the country in the areas of agriculture spraying and medical evacuation, among others. A private assembly plant of small aircrafts has also beenestablished. 25. The responsibility for management of the aviation sector is with the Ministry of Transport (MOT). Institutionally, all these functions are being performed by the GCAA. Under the Civil Aviation Act, 2004 (Act 678) the government plans to separate airport management from other functions. KIA, as the country's only international airport, handles all of Ghana's international flights. Four other airports with paved runways in Kumasi, Takoradi, Sunyani, and Tamale handle domestic flights. Apart from Way which is a paved airfield, there are other airstrips with short unpaved runways at Yendi, Paga, Obuasi, Ho, Tarkwa, Kete Krachi, Bimbilla, Saboba, Mole Game Reserve, and Salaga which provide for medical and other emergency services. 26. KIA handles about 800,000 passengers and 50,000 tons of freight annually. Passenger traffic has increased in recent years, growing at an average of seven percent annually over the past five years. The growth in passenger and airline traffic is a reflection of Ghana's economic growth inrecent years. KIA i s being renovated as part of a phasedrehabilitation program funded from internal and external sources. The program includes extending the runway and installing 30 modern navigation and communication equipment. Boarding lounges will be renovated in the next phase. Other airports inGhananeed investmentfor improving infrastructure and navigation equipment. 27. Ghana controls the entire Accra Flight InformationRegion, which includes the upper air space of Ghana, Togo, and Benin. The government has adopted a liberalized open skies policy that allows for competition and cross-border investments and lifts restrictions on ownership and control while still keeping some limits on flight frequency. Compared to other parts of the world, air fares for both passengers and airfreight to and from Ghana are high and in some cases seat availability and air cargo space are limited. This discourages business travel, tourism, and foreign investment. MaritimeandInlandWater Transport 28. Ghana's two sea ports are in Takoradi and Tema. Although they handle growing cargo volumes, performance of the ports is challenged by an increasing amount of congestion outside the port gates, inefficient intennodal interchanges and hinterland movements, and long cargo dwelltimes. 29. The relatively low productivity at Tema's container berths should soon be a condition of the past. In2005, three new gantry cranes were installed in Tema's container berth resulting in an increase of berth productivity from six to eight moves per crane hour, where ships' cranes were used, to a productivity rate of about 25 moves per crane hour with the new gantry cranes. The investment inthe cranes as well as in a new modern terminal was made possible through a concession agreement with a global terminal operator. It is anticipated that productivity gains will extendthroughout the terminal area as aresult ofthe new investment. 30. The improved efficiency inTema will raisethe likelihood of the port becoming a regional trans-shipmenthub and enhance its role as a transit hub serving neighboring countries. This will generate more traffic inport-urban areas including Accra, as well as along transport corridors. To alleviate the congestion created by the increasing cargo volumes, there is the need to look at alternative arrangements, such as the establishment of a network of inland terminals and truck staging areas and other modal options. 31. There has been greater private sector participation in other cargo handling services. Today, 70 percent of cargo in Tema is handled by private stevedoring companies. Though the port authority in Tema continues to handle a guaranteed 30 percent of the cargo, it i s expected that there will be a transition towards competition for all cargo handling activity to liberalize the market and make it easier for other firms to compete. As other concession opportunities arise, open competitive tendering could be encouraged. An appropriate regulatory system must be put inplaceto monitoranticompetitive behavior ofport service providers. 32. The Volta Lake Transport system spans about 450 kilometers from the south to the north with ports at Akosombo, Buipe and Yapei and major ferry crossings at Yeji, Keta Krachi, Dambai and Kpandu. This important inland waterway transports petroleum products, cement, and agricultural commodities. It also provides many passenger services, mostly for the rural 31 population living along the lake. The operations started off well many years ago, but to be successful a number of challenges need to be overcome. Periodic drops in the level of the lake inhibit longitudinal movement and exposeDebreshoal, makingit difficult to reachBuipe.Cross- lake services are also affected as a result of inability to access properly constructed landing stations. Other challenges include aging equipment, underwater obstructions to safe navigation, lack of navigational aids, and lack of regulation for canoe construction, use, and operations. Improving lake transport will complement landtransport and offer certain economic advantages to users. Barge transport has distinct advantages over other modes. Greater use of lake transport will also divert some truck movements, reducing overloading on roads, traffic congestion and road maintenance costs. 33. While inland water transport does not constitute a significant part of Ghana's transport system, some routes are critical to small communities. Small boats and canoes operate on Ankobra, PrayOti, Black Volta, White Volta, Volta south of Akosombo and Lake Bosumtwi. Private small owners operate in these areas moving foodstuffs with virtually no control or regulation. Non-motorizedTransport (NMT) 34. NMT includes all forms of non-motorized transport including walking, bicycles, push carts, wheelbarrows and animal drawn carts. Currently, only one to three percent of urban dwellersinthe south use NMT.Inthe north, NMTis more extensivelyused. Motorists' failure to recognize and respect cyclists makes cycling dangerous. Infrastructure for NMT inurbancenters i s inadequate. There i s also a lack of control and safety measures for operators, hawkers and others who encroachon the few facilities such as bicycle paths that are available. There is a lack of appropriate legislation for NMToperations. Inter-modalTransport 35. Ghana's planning and decision making in the transport sector continues to focus almost exclusively on improving individual modes, with very little attention paid to how improvements inone mode affects others. Road agencies, for example, focus only on roads. As aresult, lack of attention to providing effective interfaces betweenroad, rail, and ports has contributed to truck congestion outside port gates. 36. The Volta Lake is one example where some form of inter-modalism has beendeveloped. This involves the transfer of freight from truck-barge, and pipeline-barge. Bus-ferry transfer facilities were also consideredinthe design. 37. A pipeline transports oil 50 km from Tema to the Volta Lake port in Akosombo. Petroleum products are then transferred by barges from Akosombo to the port of Buipe in the NorthernRegion, and then transferredinto trucks for transport to Tamale and other places inthe north. The pipeline from Buipe through Tamale to Bolgatanga has just been completed. It will reduce road deterioration caused by petroleum tanker trucks. This intermodal arrangement for transporting petroleum products to the north will cut transport costs, congestion, and accidents while lesseningany negative impact onthe environment. 32 38. The establishment of an inter-modal framework where road, rail, inland water and pipeline transport and logistics services co-exist and complement each other will provide a broader range of options to shippers andusers. 33 Annex 2: Major RelatedProjectsFinancedby the Bankand/or otherAgencies Ghana:Transport Sector Project PROJECT IP DO SECTOR ISSUESADDRESSED RATING RATING - Urban infrastructure, decentralization, 2157-GH) improved fiscal management Local Government Development - Urban infrastructure, decentralization, Project - Closed (Cr. No. 2568-GH ) improved fiscal management Urban 5 Project -Phase l-Closed S Urban infrastructure, decentralization, (Cr.3330-GH ) improved fiscal management Road Sector Development Program - S Main, urban and feeder roads, studies, Closed (Cr. No. 3554-GH) traffic management Urban Transport Project (with AFD S Transport infrastructure inAccra and and GEF) -ongoing (Cr. No. 4334- several other cities GH) West Africa Transport and Trade S Rehabilitation of the main north-south Facilitation Project -ongoing- (Cr. - . inter-regionalroad NO.4439-GH) OTHERDEVELOPMENTAGENC ES AFD: Road rehabilitation in Urban roads Kumasi-ongoing AfDB: Rehabilitation of Sections of Trunk Roads the Central and Coastal Corridor TrunkRoads I CIDA (Canada): (i) Local (i)Adopting budgetingand expenditure Government Reform Study-ongoing; management reforms undertaken at the (ii)FiscalDecentralization central level to the local level; (ii) Implementation o f fiscal decentralization DfID(UK):Performance Improvement Program-ongoing Support civil service reform for the entire public sector (ministries, DANIDA departments and agencies) EC: Rehabilitation of Eastern Trunk Roads Corridor Trunk Roads I ImplementationCompletionReport(ICR), when available. HS-Highly satisfactory, S-Satisfactory, U-Unsatisfactory,HU-Highlyunsatisfactory 34 Annex 3: ResultsFrameworkand Monitoring Ghana: Transport Sector Project Table 1:ResultsFramework I PDO Use of ProjectOutcome Information Improvemobility ofgoods and 0 Average travel time reducedby at YR1-YR5: Use to monitor results passengersthroughreductionin least 20% onproject-fmancedroads, closely; lowervaluesmay flag travel time andvehicle operating 0 AverageVOC (inreal terms). highexpectationsor poor cost, andimprovement inroadsafety reducedby at least 10%onproject- enforcementandtrigger standards. financed roads. appropriateactions. 0 Fatality ratereducedfrom 22 per 10,000 vehiclesto 19per 10,000 vehicles. 0 RuralAccessibility Index (MI) increasedfrom 53%to 57%. Condition oftrunk roadnetwork in good andfair condition improvedfrom 83% to 88%, for urbanroadsfrom 36% to 50%, andfor feeder roads from 72% to 85%. IntermediateOutcomes Use of Intermediate OutcomeMonitoring 0 EnactedRoadTrafficRegulation YRl-YR5: lower levelswould andimplementAxle LoadControl flagpossibleproblemsin PolicyAction Plan. implementationofthe reform 0 Fundingfor roadmaintenance programfor necessaryaction. increasedfrom 60% to 75% of the plannedmaintenanceneeds. YR3-YR5: informationwill be 0 Roadfund management usedto studythe impactofroad strengthened. investmentsongrowth and I 0 Lengthofroadnetwork(trunk, poverty alleviation. urban, andfeeder) rehabilitated. Lengthof feeder roadnetwork improved(spot improvement). Aviation, Maritime, andRailways 0 GRDA made operational. YR2-YR3: Datato feed into 0 Completionof Master Planfor preparationof follow-onprojects. RegionalAirports. 0 Completionof detaileddesignand YR5: Resultsto feed intobroader safeguardreports for Takoradi Airport. governmentanddevelopment partners'programs. 0 Completionof FeasibilityStudies for developmentoflandingstages and receptionfacilitiesalongthe Volta Lake. 0 Completionoffeasibilitystudy for dualizationofMeridianroadinTema. 0 # ofcourses offeredby RMU. 35 2z 2z ."E0 'E vl !3 v1 t m l o o \D*m 0 0 2 0- .-E b va 3E 2E h C Crc 0 m Ia\- 0 0 1 1 - I m0 I Annex 4: DetailedProjectDescription Ghana: TransportSector Project 1. The overall objective of the project is to support the National Transport Policy (NTP) in meeting strategic national development goals for growth and poverty reduction. The project development objective (PDO) is to improve mobility of goods and passengers through reduction intravel time and vehicle operating cost, and to improve road safety standards. This objective will be achieved through strengthening the capacity of transport institutions in planning, regulation, operations andmaintenance, and through infrastructure investment. 2. The Ministry of Roads and Highways (MRH) and Ministry of Transport (MOT) will implementthe project. Inaddition to the ministries,the various departments and agencies which will benefitfrom the IDA Credit are: Roads sub-sector: Driver and Vehicle Licensing Authority (DVLA), National Road Safety Commission (NRSC), Kwame Nkrumah University of Science and Technology (KNUST), Government Technical Training Center (GTTC), Ghana Highway Authority (GHA), Department of Urban Roads (DUR), and Department of Feeder Roads (DFR); and Aviation, maritime and railways sub-sector: Ghana Civil Aviation Authority (GCAA), Ghana Railway Development Authority (GRDA), Ghana Airports Company Limited(GACL), Ghana Ports and Harbors Authority (GPHA), Regional Maritime University (RMU), Ghana Maritime Authority (GMA), and Volta Lake Transport Company (VLTC). 3. The Transport Sector Project (TSP) envisages a total investment of US$225.0 million to be funded by IDA at 100 percent. A substantial portion of the project is devoted to institutional and capacity building, preparation of feasibility studies, advisory support, and monitoring and supervision. These activities will be managed and coordinated by the two ministries. The various project components covered by the IDA credit are detailed below. 4. ComponentA - Support to MRH(US$4.2 million): This is targeted at: preparation of feasibility studies to support MRH's program, policy and institutional reforms (including integration of Geographic Information System(GIS) representingtrunk, urban, and feeder roads network and associated service activities, development of operating and safety standards and axle load control, strengthening management of road fund); capacity building (strengthening management information systems, development of human resource development strategy, supporting a donor coordinator, participation in national and international training courses, technical support to develop legislative and regulatory frameworks to support implementation of institutional restructuring study recommendations). The details are as follows: 38 Table 1:Supportto MRH IItem IUS$ million I Preparation of feasibility studies 2.5 Integration of Geographic Information Systems (GIS) of Road Agencies 0.4 Capacity Building 1.1 Organizationof Development Partner Conferences 0.2 5. ComponentB Support to Road Sector and EducationalEntities(US$6.5 million): - This component will support the following activities: Driver and Vehicle Licensing Authority (DVLA) includes technical advisory services to develop improved licensing methods, standardization of licensing procedures, permits, and collection of associated'revenue, improving enforcement procedures; development of test grounds, operations support (including supervision vehicles, equipment, etc.); National Road Safety Commission CNRSC) includes (i)provision of road safety equipment, production of handbills, production and distribution of road safety information materials, information and publicity material to raise awareness of road safety issues; (ii) provision of facilities for emergency response services; and (iii)training of staffinidentifying black spots, conducting road safety audits, etc.; Kwame Nkrumah University of Science and Technology (KNUST): This component would finance laboratory equipment, computers, construction of class rooms, visit of specialistsand scholarsto support training programs; and Government Technical Training Center (GTTC) to develop and expand its facilities to enhance training of artisans for the transport sector including the construction and furnishing of modern class rooms, hostel and workshop. Incollaboration with NRSC and DVLA set up a pilot driving academy and educate mechanics on vehicle maintenancestandards. Item US$million I DVLA I 1.2 I NRSC 2.0 KNUST 1.5 GTTC 1.8 I Total I 6.5 I 39 6. Component C: Improvement of Trunk Roads (US$64.0 million): This will be implementedby the GHA and consist of rehabilitation of a major trunk road from Ayamfuri- Asawinso (52 km) to establisha South-North transport corridor inthe West of Ghana, linking the timber and mineralrich areas and neighboring countries locatedWest andNorthof Ghana, to the deep water port of Takoradi. Support to GHA will also include supervision of construction, implementation o f environmental and social safeguards, environmental and social safeguard training, and strengthening the technical capacity of GHA for improving trunk roads and providing axle load equipment. Table3: Improvementof trunk Roads IItem I US$ million I ~ ~~ ConstructionofAyamfuri -Asawinso Road 58.5 Supervision 3-0 CapacityBuilding and axle load equipment 2.5 7. Component D: Improvement of Urban Roads and Infrastructure (IDA: US$78.0 million):This component will be implementedby DUR and consists of rehabilitation of arterial roads andpublic transport infrastructure as follows: Rehabilitation of the Burma Camp Road; Rehabilitation of Giffard Road; and Financing urbantransport infrastructure inAccra. 8. The first two sub-components form partofthe Accra East Corridor which constitutes part of the network o f arterials that link the suburbanareas of Accra to the Central Business District. This component would also finance provision of public transport infrastructure in Accra, including along the bus rapid transport corridor and tributaries in Accra, including bus stations, junction improvements, terminals, depots and preparation of public transport management plan for central Accra, and including the provision of technical assistance for the supervision of the works and related environmental and social safeguards measures.The details are as follows: Table4: Improvementof UrbanRoads Item US$ million Urbantransport infrastructure 24.0 Rehabilitation of Burma Camp 36.5 Rehabilitation of Giffard Road 13.0 Supervision(including environmentaland social safeguards) 4.0 Capacity Building 0.5 Total 78.0 40 9. Component E Improvement of Feeder Roads (US$50.5 million): This component - will be 'implementedby DFR working towards consolidating the achievement under the RSDP and further improving rural access through efficient and sustainable feeder roads rehabilitation, maintenance and cost effective feeder roads improvement. The roads to be financed in the first year have been identified based on criteria outlined in paragraph 69 in the main text. A total of 48 feeder road sections with a length of 163 km will be rehabilitated (minor) and 211 km improved (spot improvement) inall regions of Ghana at atotal cost o f about US$20.0 million. 10. The roadsto be financed with an additional US$27.5 million underthis component would be identifiedduring the first year of implementation. The investments will be focused inselected regions to support commercial agriculture around growthpoles. Support to DFRwill also include US$2.5 million for supervision of construction (including supervision of environmental and social safeguards). Table 5: Improvementof feeder roads I Item IUS$ million I Improvement and rehabilitation of feeder roadsto support agriculture and growth 47.5 Consultancy for supervision 2.5 CapacityBuilding 0.5 Total 50.5 11. Component F - Support to MOT and Other Transport Sector Entities (USN3.5 million): This component would finance supportto: MOT to: (a) make the GRDA operational; (b) carry out studies on the development of public-private partnerships in the transport sector; and (c) build its capacity in transport planning, procurement, financial, project, and safeguards management; GACL to: (a) carry out detailed design, environmental and social studies for the adaptation of Takoradi airport for civilian purposes; and (b) prepare a master planfor development of regional airports; GCAA to develop regulations for the aviation industry and carry out studies on aviation sector development; GPHA to carry out a feasibility study for the dualization of the Meridian Road in Tema; GMA to carry out a feasibility study for the improvement oftransport onVolta Lake; 41 0 VLTC to carry out feasibility studies for the development o f landing stages and reception facilities along the Volta Lake; and 0 RMUto improve its training capacity to provide maritime training services for the West Africa Region. Table6: Supportto MOT andOther TransportSectorEntities I Item IUS$ millionI Capacity building and technical assistanceto MOT 4.0 Detaileddesign and EMP/RAP for Takoradi airport, Master Plans (GACL) 2.0 Aviation Industry regulations study (GCAA) 1.5 Feasibility Study to improve transportationon Volta Lake (GMA) 1.5 Feasibility for development of landing stages and receptionfacilities alongthe Volta Lake (VLTC) 3.0 Feasibility for dualization of Meridian RoadinTema (GPHA) 0.5 I Upgrading of Training Capacity (RMU) I 1.0 1 Total 13.5 12. Component G - Project Management (US%8.3 million). This component would include support for provision of technical assistance, vehicles, equipment and other operational support to the IAs to carry out the coordination, administration, monitoring, evaluation and audit of the Project. 42 Annex 5: Project Cost Ghana: Transport Sector Project (US$ million) AgencyIActivity Base Cost Total Cost A Ministry of Roads and Highways(MRH) Integrationof GIS ofRoadAgencies 0.4 0.4 Organizationof DevelopmentPartners' Conference 0.2 0.2 Preparationof feasibilitystudies 2.5 2.5 CapacityBuilding 1.1 1.1 Sub-total 4.2 4.2 B Support to Road Sector and EducationalEntities DVLA, NRSC, KNUST, GTTC 6.5 6.5 Sub-Total 6.5 6.5 C Improvement of Trunk Roads ConstructionofAyamfuri-AsawinsoRoad 41.5 58.5 Supervision(includingenvironmentalandsocial 2.5 3.O safeguards) Capacity buildingandequipment 2.5 2.5 Sub-Total 46.5 64.0 D Improvement of Urban Roads and infrastructure UrbanTransport Infrastructure 16.5 24.0 Rehabilitation ofBurmaCampRoad 26.5 36.5 RehabilitationofGiffardRoad 9 13.0 Capacity building 0.5 0.5 Supervision(includingenvironmentalandsocial 3.O 4.0 safeguards) Sub-Total 55.5 78.0 E Improvement of Feeder Roads ImprovementIRehabilitationof Feeder Roads 39.5 47.5 Supervision(includingenvironmentalandsocial 2.0 2.5 safeguards) Capacity building 0.5 0.5 Sub-total 42.0 50.5 Sub-Total MRH,Department, Agencies & Entities 154.7 203.2 F M O T and Other Transport Sector Entities F1 Support to MOT 4.0 4.0 F2 Support to GACL 2.0 2.0 F3 Support to GCAA 1.5 1.5 F4 Supportto GMA 1.5 1.5 F5 Supportto VLTC 3.0 3.0 F6 Supportto GPHA 0.5 0.5 F7 supportto RMU 1.o 1.o Sub-Total 13.5 13.5 G ProjectManagement 8.3 8.3 Sub-total 8.3 8.3 Sub-totalM O T and Other Transport Sector 21.8 21.8 GRAND TOTAL* 176.5 225.0 43 Annex 6: ImplementationArrangements Ghana:TransportSector Project 1. The projectwill be implementedby Ministryof RoadsandHighways (MRH),whichwill have the overall responsibility for its coordination and management. The MRH will be responsible for preparing quarterly and annual reports in formats to be established and agreed upon inaccordance with procurement and disbursement arrangementsagreed betweenthe Bank and the Government of Ghana (GOG), with inputs from participatingMinistries, Departments, andAgencies (MDAs) andbeneficiaryentities. 2. All components will be managed in line with Bank conditions and guidelines. Inthose areas where expertise i s lacking or not fully developed, short-term consulting specialists (management, engineering, procurement, financial management) will be employed to enhance performanceand projectimplementation.The short-term specialistswould be financedas part of the capacitybuildingcomponent ofMRHandthe MinistryofTransport(MOT). 3. Implementationwill be carried out on the basis of an Annual Work Plan and Budget prepared by the MRH, with inputs from the Implementing Agencies (IAs) and Beneficiary Agencies (BAS). The IAs are: MRH including Department of Urban Roads (DUR) and Departmentof FeederRoads (DFR), GhanaHighwayAuthorities (GHA), MOT, Ghana Airports Company Limited(GACL), Ghana Civil Aviation Authority (GCAA), GhanaPorts and Harbors Authority (GPHA); the BASare: Driver and Vehicle Licensing Authority (DVLA), Kwame Nkrumah University of Science and Technology (KNUST), Government Technical Training Center (GTTC), National Road Safety Commission (NRSC), Regional Maritime University (RMU),Ghana Maritime Authority (GMA), Volta Lake Transport Company (VLTC). The IAs will be involved in procurement of goods, works, services, contract management and financial management, and safeguardsmanagement. Incontrast, the BASwill be responsiblefor providing technical inputs for the IAs to carry out their respective components. The details on fiduciary responsibility and process flows under the project are provided in Table 1. A Project ImplementationManual (PIM) will be preparedby GOG for: (a) institutional coordinationand day-to-day execution of the project; (b) disbursement and financial management; (c) procurement; (d) environmentaland social guidelines; (e) monitoring, evaluation, reporting and communication; and (9 such other administrative, financial, technical and organizational arrangementsandproceduresas may berequiredfor the project. 4. To facilitate project implementation, following Committees and Groups will be set up anddetailedas partofthe PIM. (a) A Project SteeringCommittee(PSC) as an inter-ministerialoversight body; (b) A Project ImplementationTeam (PIT) for coordinatingimplementationof project activities andreporting; (c) A Finance Management Team (FMT), as part of the PIT, for the overall financial managementandreporting; and (d) A Procurement Team (PT), as part of the PIT, with direct responsibility for procurementactivities andto providequality control. 44 ProjectSteeringCommittee(PSC) 5. A PSC will be set up, chaired by the Chief Director, MRH, and comprising of representatives ofthe Ministry of FinanceandEconomic Planning (MFEP), MOT, MRH,and the Heads of the IAs. The PSC shall be responsible for, inter alia: (a) facilitating and coordinating project activities among the entities represented in the PSC; (b) approving Annual Work Plans and Budgets; and (c) reviewing annually or more if required, progress made towards achieving the project's objectives. ProjectImplementationTeam (PIT) 6. A PIT will be constituted headed by the Director, Policy and Planning, MRH and comprise: (a) a PT consisting of selected procurement staff from IAs; (b) an FMT consisting of heads of accounts of IAs; (c) safeguard staff from the IAs; and (d) technical staff from IAs for project managementand monitoring. The Teamwill be responsible for coordinating management and reporting of all project related activities. Specifically, PIT will be responsible for, inter alia: (a) facilitating and coordinating administration of procurement, financial management, project management, safeguards andother implementation arrangements; and (b) preparing and submitting quarterly and annual reports on all facets of the project to GOG and the Bank. FinanceManagementTeam 7. To ensure proper coordination and effective financial management (FM) arrangement of the project, and adhere to service standards on uniform reporting, meeting deadlines for submission of payments vouchers, processing procedures etc., Heads of Accounts of the IAs have formed an FMT headed by the Director of Finance (MRH). The Team will have responsibility with regards to ensuring compliance with financial covenants such as submitting interim unaudited financial reports (IFRs), and maintaining internal controls over project expenditure. ProcurementTeam (PT) 8. A PT will be set up, headed by Director of Procurement (MRH) and made up of procurement specialists from the IAs with sound knowledge of Bank's guidelines. The team would be the focal point for overall monitoring, evaluation, and reporting on procurement related activities. 45 Roleof Ministriesand Other RelatedEntities (a) The projectwill be implementedby the ImplementingAgencies", which are: MRH (includingDUR and DFR), GHA, MOT, GACL, GCAA, and GPHA. The project will also benefit a number of agencies and entities, including: DVLA, KNUST, GTTC, NRSC, MU, GMA, and VLTC. The BAS" will be responsible for providing technical inputs to the IAs for carrying out their respectiveparts of the project. The detail on specific fiduciary responsibilities and process flows by the IAs andBASis listedinTable 1. Roleof the Bank The Bank will monitor the procurement process and the progress of the works and servicesthroughoutthe durationofthe project; The Bank will undertake regular meetings with the PIT to discuss general and specific issues inrelationto the progressof the project; The Bank's in-country team will collaborate with the PIT to organize field trips and meetings with the implementing agencies to deal with specific issues arising during the implementationofthe project; During a review mission, the Bank will endeavor to assist in resolving outstanding issues affectingprogress of the project; and The Bank will advise the PIT on addressing issues to ensure that all the project componentsare beingexecutedaccordingto the implementationplan. ProjectMonitoringandReporting 9. Reportingon the overall implementation of the project will be the responsibilityof the PIT. However, each participatingministry, agency, and entity will be responsible for providing inputs on their respective components to PIT. The reporting will highlight issues that are obstructing smooth execution of the various components of the project. The quarterly project progress reports will cover civil works, consultancy services, institutional support, procurement, contract details, financial managementreports, safeguardissues andprojectprogress issues. 10. The report will comment on the implementation schedule in the areas of progress and delays. The reportswill be inaccordancewith the requirementsofthe Bank's reportformat. lo The components to be implementedby the IAs are: A (MRH), C (GHA), F1(MOT), F2 (GACL). F3 (GCAA), andF6 (GPHA) I 1The componentsB, D, andEwill be implementedby MRH; componentsF4, F5, andF7 will be implementedby MOT. 46 11. Meetings will be scheduled among the MDAs, entities and the PIT to discuss issues affecting the progress of the project. The following reports will be preparedand consolidated by the PIT on a quarterly basis: 12. Financial Reports will consist of sources of funds, statement of uses o f funds by project activity, project cash withdrawals, special account reconciliation statement and a six-month project cash forecast. 13. Project Progress Reports will consist of an output monitoring report on contract managementand on unit of output by project activity. 14. Procurement Management Report will consist of procurement process monitoring for goods, works and consultant services, and contract expenditure reports for goods, works and consultants' services. 15. Quarterly progressreports will summarize activities of work progress achieved inthe last three months and submitted by the 30' of the first month of the following quarter. The quarterly report will be prepared by the PIT and cover the status of each civil works contract, funds committed against budgets by project, and funds disbursedby projects. The quarterly reports will contain the detailed program activities for the next 12months, updatedat the end of eachquarter. The quarterly reports will be discussed by all the implementing agencies and matters arising treated accordingly. 16. PIT will lead the preparation of mid-term review report and the Implementation Completion Report with assistance from the Bank. 47 b L x & 2 2 2 VI a L L E a m c c cd 4 E WY % k 2 2 -0 c a & a cd 2s L c3 9 4m E 4m 4m 20 2 k *m b 0 c 8 .-00 c iVI .-e00 v) a .-00 c 9 m c00 5 .C 5 a 2 d d 3 c! P 'c! \ 9 ? .!s z 2 m . . (3 3 3 3 3 3 3 3 3 3 3 3 k-, 0 s0 L. EE 8 k-, e, . n 4v) k-, 0 c83 2 m e L 3 5 4 2 3 e L 5 n o t-. 4 $ 2 '1 f i i 3 i 3E 2 k 5Y I I 0 a, 3 C E .-tdC 9 L s3 ru 4 0 0 3 s0 L 8L .I aE s 3 BE 5 3 3 k a, b 2 3 4 u a, i s5 0 icc0i 9 3 - L L 83 3 3 b g ? 2 il 8. Annex 7: FinancialManagementandDisbursementArrangements Ghana:Transport Sector Project Introduction 1. Inline withthe guidelines as statedinthe Financial ManagementPracticesManualissued by the Financial Management Sector Board on November 3, 2005, a financial management assessment of the Ministry of Roads and Highways (MRH)was conducted. The objective of the assessment was to determine: (a) whether MRH has adequate financial management , arrangements to ensure that the project funds will be used for purposes intended in an efficient and economical way; (b) the project's financial reports will be preparedin an accurate, reliable andtimely manner; and (c) the entities' assets will be safe guarded. 2. Unlike the recently closed IDA funded project - Road Sector Development Project (RSDP), the current project involves two ministries [MRHand the Ministryof Transport (MOT)] and a number of other agencies and entities. As a result, major departure will be inthe design of funds flow and accountability mechanisms. Under the proposed project there will be a single Designated Account managed and operated by the MRH using a central payment processing account. The rationale for this is to ensure that MRHhas adequate oversight and control over the use of project funds and can effectively monitor budget implementation. The MOT, which i s also implementing the project, was created by the new government in January 2009 by merging the previous Ministries of Aviation, and Rail and Harbors. Inview of the relative newness of MOT, the responsibility for preparing quarterly and annual financial statements, maintenance of internal financial controls, managing the Designated Account, preparing and authorizing withdrawal applications remain the responsibility of MRH. 3. An assessment of the financial management arrangements at the MRH concludes that there are systems in place that satisfy the Bank's requirements under OPh3P10.02, and overall riskof financial managementarrangementsis ratedas moderate. CountryIssues 4. Ghana's fiduciary environment for utilizing both budgetary funds and donor funds is considered adequate. The June 2007, External Review of Public Financial Management (ERPFM) noted that the government continues to make encouraging progress in implementing its wide ranging program o f strengthening public financial management (PFM) through adoption of the Short-Term and Medium-Term Action Plan. Budget formulation has been improved by revising the budget timetable to enable earlier tabling of the estimates and thus the passage of the Appropriations Bill prior to the start o f the new financial year, to facilitate a more orderly implementation of spending plans. There is now increased consultation with stakeholders in budget formulation, more comprehensive information in budget documents, and encouragement o f Ministries, Departments and Agencies (MDAs) to undertake procurement planning for use as basis for financial planning and budgeting. 51 5. Recent Public Financial Management (PFM) review notes the government's continuing efforts to improve the commitment control system, to strengthen cash management, and to facilitate payments through decentralized treasuries. These actions aim at leading eventually to a Treasury Single Account, and to further implementation o f the Budget and Public Expenditure Management System. Key challenges remain in the predictability o f flows to Metropolitan, Municipal, and District Assemblies (MMDAs) and release by the Controller and Accountant General's Department and these have an impact on the pace o f budget execution. Financial statements o f the Consolidated Fund and o f MDAs are current and audited, but delays continue with regard to public enterprises and other statutory bodies, as well as that o f other statutory funds. The Internal Audit Agency was established by the Internal Audit Agency Act 658, 2003 with the objective to co-ordinate, facilitate, and provide quality assurance for internal audit activities withinMDAsand MMDAs. 6. Concerning external audit, the Ghana Audit Service (GAS) continues to show progress in clearing the backlog o f audits and submitting the audited annual accounts prior to the statutory deadline o f 30 June, with the final 2007 ConsolidatedFundaccounts completed on time. 7. In sum, as part of the overall public sector reforms, the Government of Ghana (GOG) aims at strengthening central government structures and institutions by introducing programs to make them more efficient and effective through legislation and other reforms. Recent PFM laws including the Financial Administration Act 654 (2003), the Internal Audit Agency Act o f 2003 and the Public Procurement Act 663 (2003) have been enacted to help regulate the use of public funds. GOG has also demonstrated its commitment to continue its PFM reforms by developing more efficient public financial management systems and ensuring transparency by strengthening state oversight institutions including the Public Accounts Committee o f Parliament which has recently been holding public hearings on instances o f financial irregularities and allegations o f fraud and corruption. ProjectFinancialManagement 8. The primary executing agency for the project will be the MRH, which will coordinate activities o f the various Implementing Agencies (IAs) and Beneficiary Agencies (BAS)under the project (see paragraph 4, Annex 6 for a definition o f `IAs and BAS). To ensure proper coordination and effective financial management (FM) arrangements in the project, including adherence to service standards on uniform reporting, meeting deadlines for submission o f payments vouchers, processing procedures etc., all Heads o f Accounts o f the IAs have formed a Finance Management Team (FMT) headed by the Director o f Finance (MRH).The IAs will be responsible for contract management and implementation, while the respective ministries will undertake this task on behalf o f the BASwithintheir sub-sectors. The responsibility o f the FMT i s to ensure that throughout implementation there are adequate financial management systems in place which can report on the use o f project funds. MRHwill be responsible for final verification and authorization o f payments for all contracts and activities under this project, maintenance and operation o f the project's designated account and making payments to contractors and service providers. As part o f the project financial management arrangement it has been agreed by all IAs to adopt a centralized financial management arrangement under the MRH which will operate a single Designated Account. 52 9. The details on specific responsibilities for contract management, financial management, and disbursements are listed in Table 1inAnnex 6. The functions, responsibilities and mandate of the FMTwill be detailed inthe Project Implementation Manual (PIM). 10. Thejustification for adopting this centralized payment processing systemincludes: 0 allowing MRH to have an oversight of the budget and funding for the Transport Sector Project (TSP); 0 providing broader responsibility to MRH and FMT for coordination, contract managementand disbursements; 0 preparing uniform reporting of project activities and single interim unaudited financial reports (IFRs) and annual audit report for all components of the project; and 0 strengthening reporting and coordination among the IAs and BASinvolved in the TSP. 11. The assessment recognizes that the use of a centralized single designated account may result in bureaucratic and other delays if the administration i s not well coordinated. However, it i s expected that the regular meetings of the PIT and FMT will help address any potential bottlenecks. The major challenge is the ability of the financial, management system at the MRH to track and report on various expenditures by the IAs and BAS.To help address this challenge the MRH is currently far advanced with the procurement of a suitable accounting software to helpinaccounting andreporting. ProjectRiskAssessment and Mitigation 12. Table 1below shows the results of the risk assessment and identifies key risk mitigation measures. The risk assessment i s informed by the assessment of the MRHand discussions with FMT. Table 1:RiskRatingSummaryTable Risk Risk Mitigating MeasureslKeniarks I Country Level Weaknesses inthe S Strengtheningthe role ofthe MMDAs in M effectiveuse o fpublic FMcapacitybuildingthrough ongoing funds, weak oversight reforms inthe public financial regardingtransparency management. This has resultedina set of andaccountability.Poor new legislationto guide public frnancial linkagesbetweenstrategic managementpractices. planningandlongterm budgetingat the sector levels. 53 Risk Country levelrisk as M reported inthe last Public Accountability assessment is at the country Expenditure and Financial level as aresultof issues with internal Accountability i s rated as control indistricts andregions. However, C for internal control and this project is being implementedat the as D+for internal audit central governmentlevel and over 90 effectiveness, percentofthe credit i s being implemented by MRH,which has satisfactorily implementedthe recentlyclosedRSDP. The FMassessment ofthe Ministry and its agencies, GHA, DUR, and DFRis rated as satisfactory. Entity Level MRHmay havechallenges S To address and minimize this risk, the M ineffectively monitoring project has set up a PIT, PT and FMT to the activities of other IAs support implementation. As part ofthe and BASto ensure capacity building component, technical compliance with the assistance will beprovided to strengthen Financing Agreements. both humanand technical capacity inthe ministry. Project Level Coordination among s As part ofthe ImplementationAgreement M differentMMDAs and to be executedamong all IAs, a Project other entities infinancial Implementation Team and a Finance managementandreporting may be difficult to achieve. Challenges incomplying I with timelines for financial The PIMand the Implementation covenants such as Agreement will provide guidelines on roles submissionof financial and responsibilities of various agencies and reports including external units. audits. The Director ofFinance (MRH)working with the PIT will be responsiblefor overall F Mmonitoringandreporting. Overall Inherent Risk S M Budgeting Riskofcost overrunsand S Budget execution to be monitored through M adverse variations in quarterly reportsand IFRs by IDA. expendituredue to poor Inaddition the FMT will monitor budget budgeting techniques and execution and implementation to help slow implementation control any adversevariations and delays in causedby inadequacy in budget execution. predictability o fbudget releases. 54 Risk Risk Mitigating Measures/Remarks Riskassociatedwith The detailedprocurement plans for the fust delays inbudget execution year work have been finalized in due to weaknesses in discussions with the Bank, bidding preparing procurement documents have been prepared, reducing plans, annual work plans. the potential impact ofdelays inwork execution. Accounting Accounting and reporting S The use o f a central accountingand M challenges due to the reporting function at the MRHwill help in project havingdifferent streamlining the preparationo f accounts IAsiBAswhere and other reports; during the first year expenditure will be capacity o fthe IAs will be strengthened in initiated and incurred. financial management and procurement. Internal Controls Inadequacy o fcontrols in S All IAs and BAShave their internal control M the preparationand processes guided by the Financial approval o f transactions, Administration Act (FAA) and Financial payments, cash and bank Administration Regulation (FAR). These transactions. GOG financial regulations and manuals are adequatefor operational control andthey document the approval and authorization hierarchies applicable for processing financial transactions. Risk ofnon compliance to The MRHhas a functioning InternalAudit internal control processes. Department. Possibility o f weaknesses Regular IDA supervision missions and ingovernance andanti- reviews will help ascertain level o f corruption systems compliance and identify any possible GAC (transparency in weaknesses. processes) particularly in procurement and contract PIT oversight and the use o f Bank's awardinglexecution. procurement and fiduciary compliance procedures will help to minimize corruption risk. FundsFlow Delays inprocessing M This risk is minimizedthrough the use o f a M withdrawal applications. central payment processing unit at MRH. Delays inpayment Also, staff inMRHhave satisfactorily processing due to managed IDA projects and are familiar verification by MRHo f with processes for disbursement. expenditureincurredby IAs and BAS. FinancialReporting Delays inprocessing and S MRHwillberesponsible for coordinating M submittingIFRsand other and preparing financial reports on behalfo f 55 Risk RiskMitigating Measures/Remarks financial monitoring all IAs andBASandsubmittingthemto reports. IDA. Delays incomplyingwith submissiondeadlinesas perFinanceAgreements. Auditing The riskthat auditswill S The TOR for engagement will bereviewed M notbe submittedontime andclearedbythe fiduciaryteamofthe to ensure compliancewith Bankto guaranteethat the scope of works covenants. i s satisfactory.Continuousengagementby the IDA'SFMspecialist with the Director ofFinance(MRH)will follow up on the accountingthroughthe audit program. Overall RiskRating S M H-High S -Substantial M-Moderate L-Low Strengths and weaknesses of the Financial Management System Strengths 13. The project financial management is strengthened primarily by the involvement and experience of the accounting staff of departments under the MRH in earlier and ongoing IDA fundedprojects. The GhanaHighway Authority (GHA), Department ofFeeder Roads (DFR) and Department of Urban Roads (DUR) have also been involved in Road Sector Development Program, the Urban Transport Project, and West Africa Transport and Transit Facilitation Project. Personnelo fthese IAs have benefited from regular training inbank fiduciary procedures and are familiar with IDA financial management and procurement procedures and this will help ensure smooth implementation. 14. Under the RSDP, part of the financial management function of the IAs were mainstreamed with the establishment of the Roads Project's Office and over time has led to a pool of skilled staff and the development of a reliable accounting and internal control system capable o f recording and reporting accurate project expenditure. During the RSDP, the GHA, DFR, and DURsatisfactorily operated separate designatedaccounts. Weaknesses 15. The project design is complex due to the numberof MMDAs involved, and this canhave a potential bearing on financial management. The most likely weakness infinancial management will be challenges incollaboration and coordination amongthe IAs andBASandthe MRHsince the project will be relying on MRHfor processing of all payments transactions. Inaddition, since 56 transaction initiation, authorizations and approval will be primarily at the implementing agency level there is the needfor strong internal controls and oversight to prevent any possible lapses or potential fraud and corruption. It is to address these potential weaknesses that the project has in place implementation arrangementsincludingthe PIT, ProcurementTeam (PT) and the FMT. Time BoundActionPlan 16. The action plan below indicates the actions to be taken for the project to address the weaknesses that have beenidentifiedto ensure the FMsystem i s robust and strengthened. Table2: ActionPlan 17. A summaryofthe key finding ofthe financial managementassessment is presentedas follows: BudgetingArrangements 18. The MRH and MOT as government ministries follow the budget preparation guidelines as per the Financial Administration Act, 2003 (Act 654), the Financial Administration Regulation, 2004 (LI1802) and also the annual budget guidelines issued by the Ministry of Finance and Economic Planning (MOFEP), The budget for the project will be prepared by the Planning and Policy unit of the MRH in conjunction with the IAs. The budget is part of the overall Transport Sector Development Plan (2008-2012) agreed between the government and donor partners. 19. The assessment indicates that budgeting processes at the MDA level are satisfactory and can be relied upon to reflect the various componentsto be implementedby the different agencies The current budgetary control processesusedmostly for the government's discretionary budget, which are being adopted to support project implementation are capable of monitoring commitments and outstanding balances and this helps to reduce risk of multiple payments and expenditure overruns. 57 AccountingArrangements 20. The director o f finance at the MRHwill be responsible for overall fiduciary aspects o f the project. The director, a staff o f the Controller and Accountant General's department, i s a qualified chartered accountant and involved in donor funded operations. In addition the Finance and Accounting Department o f MRH has a dedicated unit handling donor funded project activities; the unit i s headed by a project accountant and supported by two officers who report to the Director o f Finance. The staff has had relevant experience during the implementation o f the RSDPand other IDA financed projects and are familiar with IDA policies andprocedures. 21. The technical capacity o f accounting staff and work load challenges o f the MRHwill be regularly assessed by the Bank during project implementation and if necessary the staff will be provided with training to update their skills and mitigate any skills gaps. InformationSystems 22. The assessment o f the Finance and Accounting Department o f the MRH indicated that currently accounting and financial reporting i s done using a combination o f manual processing and spreadsheets. This may pose a challenge during implementation since the accounting and information systems should be robust enough to report on the different IAs, expenditure by categories and different components. To address this weakness, the MRH has initiated the process for installing suitable software that will be used by all departments and agencies under the ministry. The Bank has been involved in providing technical assistance in the design and implementationo fthis software. InternalControlandInternalAuditing 23. The project's internal controls will to a large extent rely on the government established accounting and internal control guidelines as documented in the respective Internal Audit Manuals o f the ministries. The internal audit functions o f all M D A s are informed by the Internal Audit Agency Act, 2003 (Act 658). The credibility of the project's internal controls and general control environment including responsibilities for approvals and authorization processes for recording and safe-guarding o f assets will be in line with the GOG guidelines as documented in the Financial Administration Act (FAA) and the Financial Administration Regulation (FAR). In addition, the internal controls will be further strengthened and complimented by compliance to the guidelines o f the project implementation manual (PIM). The MRHhas a functioning internal audit unit which helps to ensure a sound control environment for transaction processing and enforcing compliance. The mandate o f the internal audit unit includes auditing discretionary budget funds, internal generated funds and donor funded activities. The Bank's assessment notes that even though expenditure initiation i s at the IA and BA levels, these agencies are guided by procedures documented in the FAA and FAR which clearly spell out the roles and responsibilities within the agencies. To further ensure compliance, the internal audit unit at the MRHwill also be part of the control processes for verifying payment request from the IAs and BASprior to payments by the Director o fFinance o fthe MRH. 58 24. The assessment indicates that the internal audit and control environment at MRH i s adequate for project implementation. The role o f the internal audit unit at MRHwill be regularly assessedduring supervision missions by reviewing their reports and management responsiveness to their findings. It has been agreed that the periodic supervision reviews by the internal audit unitwill cover theproject activities andtheir findingsshared anddiscussed withthe Bank. Funds Flow Arrangements 25. The proposed arrangement is to use a single Designated Account (denominated in U S dollars) managed and operated by the Chief Director, MRHwho will be assisted by Director o f *Finance, MRHinpreparing and submitting acceptable withdrawal applications. 26. This arrangement to use a central account is important to ensure that the MRH has oversight responsibility over all the transfers and payments related to the implementation o f project activities. However, in order to facilitate payment of some small expenditure, the MOT, GHA, DUR, DFR will operate "Project Accounts" on an imprest system. The ceiling for the imprest will not exceed US$0.2 million (or the cedi equivalent) and will be monitored and reported on by the Director o f Finance at MRH. These funds will be released in the form o f an imprest account and subsequently replenished, and used for specific expenditure such as supervision, field visits, operating costs, etc. The procedures and modalities for operating the designated account and the types o f expenditure to be paid out o f project accounts will be outlined inthe P I M and reflected inthe Implementation Agreement. 59 Figure1:FundsFlow Arrangement ................................................................... Designated .............................................................................. Account @A) i.................j.......................... ............................................. *......................... FundsFlow ....................... Reporting Notes: i.TherewillbeonlyoneDesignatedAccountmaintainedbytheMinistryofRoadsandHighways ii.TheMOT,GHA,DFR,andDURwilleachoperateanimprestaccountsreferredtoas`ProjectAccount' for paymentof small value local expenses. Theseproject accounts will berunonan imprest basedarrangements with a maximumceilingofUS$0.2 million (or the cedi equivalent). iii.TheMRHwillberesponsibleforpaymentsfromtheDesignatedAccountonbehalfoftheMOTandallother IAs. 27. Borrower and credit amount. This operation is an IDA Credit of US$225 million. Disbursementarrangementsagreedduringappraisalwiththe Borrowerare summarizedbelow. 28. The project will use transaction Statement of Expenses (SOE) based disbursements for reporting on the uses of project funds and for withdrawals for subsequent funds. The initial disbursement and the ceiling of the Designated Account will be based on the aggregate expenditure forecast for the first three months. Subsequent withdrawals will be made on submissionof satisfactorySOEreturnsplus a forecast ofexpenditure andcash flow needs for the next three months.It is likely that the first year budgetanddisbursementwill be low andmay not reflect actual forecast of fund utilizationthroughout implementation.To address this, there is a clauseinthe DisbursementLetterfor areviewofthe ceiling duringimplementation. 60 29. Disbursement arrangements and use of funds. Disbursement o f the proceeds o f the financing will follow standard Bank procedures for investment lending, for use by the Borrower for eligible expenditures as defined inthe Financing Agreement and the Annual Work Plans and Budgets. Disbursement arrangements have been designed inconsultation with the Borrower after taking into consideration the assessments o f Borrower's financial management and procurement arrangements, the procurement plan, cash flow needs o f the operation and the Borrower's prior disbursement experience. Additional instructions for disbursements will be provided in a disbursement letter issued for this project. 30. Disbursement methods. This credit will be disbursed through various disbursement methods, including advances, direct payments and special commitments. Advances will be disbursed into a single Designated Account, to be managed by the MRH. The Designated Account will be denominated in U S Dollars and will be segregated from other financing partners. 3 1. Reportingon use of Financing.Supporting documentationwill be requested along with withdrawal applications as specified in the disbursement letter. This will comprise summary reports by category and details o f transactions (Statement o f Expenses returns) for payments made by the Borrower from the Designated Account. Copies o f original documents or records will be requested only for certain categories o f expenditure above financial thresholds specified inthe disbursement letter. FinancialReportingArrangements 32. The Director o f Finance at MRH i s responsible for generating quarterly Interim Unaudited Financial Reports (IFRs). Financial reporting under the project will be transactions based and the MRHwill maintain adequate filing and archival system o f all relevant supporting documents for review by the Bank during supervision missions and also for audit purposes. IFRs for the project are expected to be submitted not latter than 45 days after the end o f each quarter. The financial reports will be designedto provide relevant and timely information to the project management, IAs, and various stakeholders monitoring the project's performance. Auditing 33. The Auditor General (Ghana Audit Service) i s primarily responsible for the auditing o f all government and donor funded projects. However, due to capacity constraints, it is usual for the auditor general to subcontract the audit o f donor funded projects to private firms. Under TSP, the MRH would be responsible for auditing in liaison with the Auditor General, subject to the Bank's necessary procurement and technical clearance o f the terms o f reference (TOR) for the engagement o f an audit firm. The Director o f Finance at the MRH i s responsible for ensuring that the project funds are audited on time and the audit report submitted to IDA as per the financing covenants stated inthe Finance Agreement. To ensure compliance, it has been agreed that external auditors must be recruited not latter than six months after project effectiveness. 61 Conclusionof the Assessment 34. The financial management arrangements as assessed show concluded that the project's financial management risk i s rated as moderate. SupervisionPlan 34. Based on risk rating o fthe project and the current financial management arrangement it i s planned that in the first year o f implementation there will be one onsite visit to ascertain adequacy o f systems supplemented by desk reviews o f IFR and audit report. The financial management supervision mission's objectives will include ensuring that strong financial management systems are maintained for the project throughout project tenure. Inadopting a risk based approach to financial management supervision, the key risk areas o f focus will include assessing the accuracy and reasonableness o f budgets, their predictability and budget execution, compliance with payment and fund disbursement arrangements and adherence to internal controls, and assessing the continuing ability o f the MRH to effectively to generate credible reports. The contract and financial management arrangements agreed as part o f the PIM will be reassessedduringmid-termreview (MTR). 62 Annex 8: ProcurementArrangements Ghana: TransportSector Project A. General 1. Procurement o f goods and works and selection o f consultants will be carried out in accordance with (i)the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, revised in October 2006; (ii)"Guidelines: Selection and Employment of Consultants by World Bank Borrowers " dated May 2004, revised in October 2006; and (iii) the provisions stipulated in the Financing Agreement. The various items under different expenditure categories to be financed are described below. For each contract to be financed by the Credit, the different procurement methods or consultant selection methods, the need for pre- qualification, estimated costs, prior review requirements, and time frame are agreed between the government and the Bank project team in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements ininstitutional capacity. 2. Procurementof Works:A total o f about US%175.0milliono fworks would be procured under this project. These would include rehabilitation o f the Ayamfuri-Asawinso trunk road, construction o f Burma Camp and Giffard Road inAccra rehabilitatiodimprovemento f selected feeder roads, the development o f vehicle testing grounds, and construction o f educational facilities including offices, libraries, transportation laboratory, classrooms, and workshops. 3. The procurement will be done using the Bank's Standard Bidding Documents (SBD) for all International Competitive Bidding (ICB) and for all others, National SBD's as agreed with or satisfactory to the Bank. Contracts below US$5,000,000 but equal to or above US$lOO,OOO equivalent per contract will be procured under National Competitive Bidding (NCB). In spite of this, relevant N C B works contracts, which are deemed complex and/or have significant risk levels will be prior-reviewed and such contracts will be identified in the tables and also in the procurement plans. Again, under NCB, it shall be ensured that: a) foreign bidders shall be allowed to participate inNational Competitive Biddingprocedures; (b) bidders shall be given at least one month to submit bids from the date o f the invitation to bid or the date o f availability o f bidding documents, whichever is later; (c) no domestic preference shall be given for domestic bidders for works; and'(d) in accordance with paragraph l.l4(e) o f the Procurement Guidelines, each bidding document and contract financed out o f the proceeds o f the Financing shall provide that: (i)the bidders, suppliers, contractors and subcontractors shall permit the Association, at its request, to inspect their accounts and records relating to the bid submission and performance o f the contract, and to have said accounts and records audited by auditors appointed by the Association; and (ii) the deliberate and material violation by the bidder, supplier, contractor or subcontractor o f such provision may account to an obstructive practice as defined in paragraph l.l4(a)(v) o f the Procurement Guidelines. Contracts estimated to cost less than US$lOO,OOO equivalent per contract would be procured using shopping procedures based on a model request for quotations satisfactory to the Bank. Direct contracting may be usedwhere necessary, but will be subject to Bank's no objection. 63 4. Procurement of Goods: A total of about US$7.4 million of goods would be procured under this project. These would include axle weighing equipment, vehicles, computers, printers, and facilities for emergency response services to support road safety activities. The procurement will be done using the Bank's SBD for all ICB andNational SBD agreed with or satisfactory to the Bank. Contracts below US$500,000 but equal to or above US$50,000 equivalent per contract may be procured under NCB. In spite of this, relevantNCB goods contracts, which are deemed complex and/or have significant risk levels, will be prior-reviewed; such contracts will be identifiedinthe tables and also inthe procurement plans. Again, under NCB, it shall be ensured that: a) foreign bidders shall be allowed to participate in National Competitive Bidding procedures; (b) bidders shall be given at least one month to submit bids from the date of the invitation to bid or the date o f availability of bidding documents, whichever i s later; (c) no domestic preference shall be given for domestic bidders and for domestically manufactured goods; and (d) in accordance with paragraph 1.14(e) of the Procurement Guidelines, each bidding document and contract financed out o f the proceeds of the Financing shall provide that: (a) the bidders, suppliers, contractors and sub-contractors shall permit the Association, at its request, to inspect their accounts and records relating to the bid submission and performance o f the contract, and to have said accounts and records audited by auditors appointed by the Association; and (b) the deliberate and material violation by the bidder, supplier, contractor or subcontractor of such provision may account to an obstructive practice as defined in paragraph 1.14(a)(v) of the Procurement Guidelines. Contracts estimated to cost less than US$50,000 equivalent per contract would be procured using shopping procedures based on a model request for quotations satisfactory to the Bank. Direct contracting may be used where necessary, subject to Bank's no objection. 5. Procurementof Non-ConsultingServices: Procurementof non-consulting services will follow procurement procedures similar to those stipulated for the procurement of goods, depending on their nature. The applicable methods will include NCB and shopping. 6. Selectionof Consultants:Consultancy servicesvalued at about US$24 millionwould be provided under the project and includes the following categories: financial, technical and procurement audits, economic feasibility and design studies, supervision of construction works, institutional studies, monitoring and evaluation studies and technical assistance to the implementing ministriesand agencies. 7. Contracts for consulting services, each estimatedto cost US$l00,000 equivalent or more, will be awarded following the procedure of Quality and Cost Based Selection (QCBS). Consulting services estimatedto cost less than US$lOO,OOO per contract under this project would be procured following the procedures of Selection Based on Consultants' Qualifications (CQS). Selections under Fixed Budget Selection (FBS) and Least Cost Selection (LCS) methods will be applied in the circumstances as respectively described under paragraphs 3.5 and 3.6 of the Consultants Guidelines. For all contracts to be awarded following QCBS, LCS, and FBS the Bank's Standard Request for Proposals will be used. Procedures of Selection of Individual Consultants (IC) would be followed for assignments which meet the requirementsof paragraph 5.1 and 5.3 of the Consultant Guidelines. LCS procedures would be used for assignments for selecting the auditors. Single-Source Selection (SSS) procedures would be followed for 64 assignmentswhich meet the requirements of paragraphs3.10-3.12 of the Consultant Guidelines andwill alwaysrequirethe Bank's prior reviewregardlessofthe amount. 8. Short lists of consultants for services estimatedto cost less than US$200,000 equivalent per contract may be composedentirely of national consultants inaccordancewith the provisions of paragraph 2.7 of the Consultant Guidelines. Consultancy services estimated to cost above US$200,000 per contract for firms, and contracts for individuals for assignments estimated to cost above US$lOO,OOO and single source selectionof consultants (firms and individuals) will be subjectto prior reviewby the Bank. 9. Capacity Building and Training Programs, Conferences, Workshops, etc.: A total amount of US$4.6 millionwould be providedfor these activities which will be gearedtowards buildingcapacity and improvingmanagementand staff skills within the ministries and agencies. All training and workshops will be carried out on the basis of the project's Annual Work Plans and Budgetwhich will have beenapprovedby the Bank on a yearly basis, and which will, inter alia, identify, (a) the training and workshop envisaged, (b) the personnel to be trained, (c) the institutions whichwill conduct the training, and(d) durationofthe proposedtraining. 10. The procurementproceduresand SBDs to be usedfor each procurementmethod, as well as modelcontracts for works and goodsprocuredwill bepresentedinthe ProjectImplementation Manual(PIM). B. Assessment of the Capacity of the Ministry of Roads and Highways (MRH), Ministry of Transport (MOT) and their Departments and Agencies to Implement Procurement 11. Under Ghana's Public Procurement Law, the MRH, departments and related agencies, Le., Ghana Highways Authority (GHA), Department of Urban Roads (DUR), Department of Feeder Roads (DFR), Driver and Vehicle Licensing Authority (DVLA) and National Road Safety Commission (NRSC) are procurement entities. Also recognized as procurement entities are the KwameNhmahUniversityof Science and Technology (KNUST) andGhanaTechnical TrainingCentre (GTTC) which are projectbeneficiarieslinkedto the MRH.Ina similar manner, the Ministry of Transport and related entities, i.e., Ghana Civil Aviation Authority (GCAA), Ghana Airports Company Ltd (GACL), Ghana Ports and Harbors Authority (GPHA), Regional Maritime University (RMU), Ghana Maritime Authority (GMA), Ghana Shippers Council and Volta Lake Transport Company (VLTC) are also procurement entities. Therefore, these two Ministries and other participating beneficiary entities, like GTTC and KNUST have legal responsibilities in Ghana to undertake procurement on their own. However, given the inexperience of the Beneficiary Agencies (BAS) in working directly with the Bank's procurement guidelines andprocedures, it has beenagreedthat the ProcurementTeamwithin the Project Implementation Team (PIT) will be undertaking procurement for Bank financed components. As part of the project, capacity of the BASwill be strengthenedinprocurement of goods, works, and services andthis arrangementwill be revisitedduringthe mid-termreview. 12. For the above reason, an assessment of the capacities of the two Ministries and other implementing agencies (IAs) to implementprocurement actions for the Transport Sector Project 65 (TSP) was carried out by the Bank procurement specialists in January 2009. The assessment reviewed the organizational structure for implementing the project and the interaction between the IAs and their staff responsible for procurement and relevant central unit for administration andfinance. 13. The assessment established that the ministries and other IAs (a) were responding to Ghana's Public Procurement Law; (b) had entity tender committees and review boards in their permanent organizations; (c) had adequate internal technical and administrative controls and anti-corruption procedures; and (d) had satisfactory appeal mechanisms for bidders. Following this, the capacities of these agencies to implement procurement under Bank's Guidelines and procedures were determined as below. Ministry of Roads and Highwavs (MRH)and RelatedImplementingAgencies: 14. The assessment showed that MRH, GHA, DUR and DFR have handled Bank projects in the last six years under the RSDP and have, as institutions, gained significant experience to handle procurement under the project. In GHA, the departments o f (a) planning, (b) contracts, and (c) stores and plant and equipment have respective responsibilities for the conduct o f procurement for services, works and goods. The respective responsibilities are assigned to the departments, and no one individual has dedicated responsibility in each case. InDFR, the Chief Quantity Surveyor has additional responsibility for procurement; the same applies to the DUR where officers responsible for other schedules have been assigned additional responsibility for procurement. In effect, focal persons with dedicated responsibility for procurement are missing inthese agencies. For these reasons, there have been quality assurance issues that have caused delays sometimes in project implementation. Further, the capacities o f KNUST and GTTC, which are project beneficiaries, were found to be inadequate. Again, the capacities o f DVLA and NRSC to handle Bank procurement procedures were also found to be inadequate because they only participated in relatively few and simple procurement activities, using the Bank's procedures and guidelines. Based on the above assessment, each o f the I A s will be responsible for procurement under their own components, while MRHand M O T will handle procurement for the BASwith the technical input o f the BAS. 15. In addition, given that the work load on the Ministry and the other IAs continue to increase, without a corresponding increase in the delivery o f efficient procurement for goods, services and works, under the Bank's Guidelines, the quality o f procurement has been affected over the last few years. To strengthenthe capacity o f the ministries and agencies, the following mitigations actions were identified. 66 Table 1: Mitigation Actions for MRH No Key risks Mitigation Actions By Whom By When 1 1ILack ofrelevant Procurementwill be ProcurementTeam After project experienceofKNUST, undertakenon behalfof under supervisionof effectiveness. GTTC to undertake KNUSTandGTTC by MRH. the Project procurementunder The actions will include Implementation Bank's Guidelines. guidanceand coaching. Team. 2 Limitedexperienceof ProcurementbyNRSC and ProcurementTeam After project DVLA andNRSCto DVLA will be guidedand under supervisionof effectiveness. conduct procurement supportedby MRH. the Project under Bank's Guidelines. Implementation Ministry of Transuort (MOT) and RelatedImdementinn Agencies: 16. The assessmentof the MOT andother relatedIAs (GPHA, GCAA, and GACL) identified that MOT itselfhas limitedcapacity andexperienceinprocurementusingthe Bank's Guidelines. In contrast, GCAA and GACL have relatively strong procurement units headed by qualified procurementstaffwho havealso beentrainedinthe use ofthe Bank's procurementproceduresat Ghana Institute of Management and Public Administration (GIMPA). This observation also applies to GPHA, which is currently participating in the implementation of the West Africa Trade andTransportFacilitationProject(WATTFP). Further,the BAS(MU,GMA, andVLTC) also have limited or no experience in the use of Bank's Guidelines. Based on the procurement assessment, GCAA, GACL and GPHA will undertake their own procurement, while the MOT will undertake both its own procurement and procurement for the BAS(with support from the ProcurementTeam) subjectto the risk assessmentandmitigationmeasuresbelow. 17. To strengthen the procurement arrangements and improve quality control, MRH and MOT have agreed to take advantage of the overall project coordination role assigned to the MRH. A Procurement Team is being set up as part of the PIT (for details see paragraph 5 in Annex 6) to coordinatethe work of different ministries and entities and provide quality control for all procurementrelatedactivities. 67 Table 2: MitigationActions for MOT - No Key risks Mitigation Actions By Whom By When 1 The issue of MOT, RMU, MOT will appoint a Procurement MOT Withinthree GMA andVLTC having Specialisttd bffer supportto the months of limitedor no experiencein Ministryand, inaddition, buildcapacity project procurementusingthe andprovidefirst line support,inBank effectiveness. Bank's Guidelines. procedures,to officers selectedfrom the BeneficiaryAgencies. Duringthe initial years, while the capacity in MOT and other entities is beingstrengthened, support will beprovidedby the - ProcurementTeam. 2 Inadequatenumberof Forprocurementquality enhancement, MRH, Withinthree qualifiedanddedicatedstaff there is needfor the Ministriesandtheir MOT and monthsafter for procurementinthe agenciesto appoint andor designate their project Ministries andAgencies. qualifiedstaffor focalpersonsto be Agencies effectiveness. dedicatedto the conduct ofprocurement - inthe agencies. 3 Lack of resourcesto The Ministryandthe Bank will ensure MOT and Before undertakethe critical that provisionis madeto cater for MRH effectiveness,to responsibility assigned. necessarylogisticsto supportthe PT. be identifiedin the PIM. 18. The Procurement Team (PT) will be composed o f selected procurement focal persons drawn from the Ministries and their Agencies with sound knowledge o f the Bank's guidelines and relevant experience in procurement o f goods, works and services. The Director o f Procurement o f MRH will coordinate the activities o f the Procurement Unit and receive procurement processed documents from agencies' and departments' procurement focal persons. He/She will, in addition, be the contact person for all Bank related procurement issues, and will ensure that all contracts are awarded and signed by officials o f the relevant Ministries, unless this responsibility is delegated. The terms o f reference o fthe PT will be detailed out inthe PIM. 19. Further, to enhance and build the capacities o f the Procurement Unit and the other procurement focal officers, it was agreed that MRH would work with GIMPA to develop an appropriate training program, which will involve Bank procurement specialists. The program will aim at preparing staff selected from the two Ministries and their agencies, inthe medium to long term, to effectively manage goods, works and services procurement in all donor-funded projects. 20. The assessment also reviewed key procurement processing areas subject to delays on both the Bank and the Borrower sides, by comparing the standard time frame for the conduct o f procurement for services, and also for goods and works as identified in the procurement plans formats, with the corresponding estimated time frames that practically arise from the required `internal processes that have become necessary in order to respond to the Public Procurement Law. The procurement processing experience o f the DFR, an IA, was used as the benchmark in identifying the areas o f delays and bottlenecks, with a view to recommending mitigation measures. 68 21. For services, it was found that delays occurred in: (a) preparing request for proposals (RFPs), (b) advertising and evaluating / assessing expressionof interests (EOIs) for shortlists, (c) evaluating technical proposals, and (d) awarding contracts. For goods and works, the delays occurred in: (a) the preparation of bidding documents, (b) bid evaluations, and (c) contract award. Two other areas that contribute to delays were identified as: (a) lack of relevant procurement delivery capacity, and (b) the assumption that implementation of the procurement plans would follow the logic of the sequential steps, whereas it is significantly affected by the competing demands o f time for implementation of other activities. The key delays identifiedin the critical areas and mitigationmeasuresand/or actions are identifiedbelow: 69 ,- 2 .-2 0 I*% ob S 0k %I E k CI 0 E: +2 0 - E $kk2 3 lm t4m -0 B k b N 3 N m C. ProcurementPlan 22. The government, at appraisal, drafted a 12-month procurement plan for project implementation which provides the basis for the procurement methods. This plan was concluded and agreed on by the government and the project team at negotiations. It will also be available in the project's database and inthe Bank's external website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements ininstitutional capacity. Table 4: Thresholdsfor ProcurementMethodsand PriorReview , Contract Value I , ' I Expenditure Procurement Contracts Subject to Prior No Threshold** ~ l Category Method Review (US$ ) (US$). ~ I ."". . i_ _" . 1.- .~ --I-. ! _^I__" I I >=5,000,000 ICB Allcontracts ! , 1 .._____...I__.----..-"- I 100,000 ==500,000 ICB All Contracts Services (other than ___ - --- -- ".# I__ Consulting NCB Specified contracts as would i Services UNAgencies be indicated inthe I ProcurementPlans I 2 (UNOPS) I Shopping 1 None ."....l_.-.I.-... -- . \ -I--- Direct : Allvalues All Contracts Contracting ,- . 1 . .. . .. . ._ .. -.... I Consulting c>=200,000 firms QCBS , All Contracts Services I (International) 1I . . __. 3 ; ' CQS c<100,000 I __ - - - _I_ - 3 C>=50,000 individuals All contracts 1 IC -" --- C < 50,000 individuals TOR IC 72 ----, -r - _- - - - - __ - __ ---__ - I , I ~ I_ ~ I ingle sourie-TAiContra& All Values I Selection i - - - - - - --4 - - - - __I_ - - __ ~ _--llI___I_ _I __I___-- I_I_- -I- Training, I i To be basedon 4 , Workshops, All Values i' Annual Work ~ Study Tours - - Plan& Budgets -- - - ~ , 1 - _-I I_I I I_I **These thresholds are for the purposes of the initial procurement plan. The thresholds will be revised periodically basedon re-assessmentof risks. D. Frequencyof ProcurementSupervision 23. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the IA has recommendedthree supervision missions each year to visit the field to carry out post review of procurement actions. The procurement post-reviews should cover at least 20 percent of contracts subject to post-review. In addition, post reviews o f in- country training will be conducted from time to time to review the selection of institutions/ facilitators/ course contentsof training, andjustifications thereof, and costs incurred. E. Detailsof the ProcurementArrangementsInvolvingInternationalCompetition 24. Works, Goods and Non Consulting Services (a) List of contract packagesto be procured following ICB and direct contracting: Table5: Works Domestic Review by Expected Bid No* Contract Estimated Procurement (Description) cost P-Q Preference (%Million) Method (yesho) (Priodpost) Bank Opening Date Rehabilitation of 1 Ayamfuri-Asawinso 60.5 ICB Yes Yes Prior 09/28/2009 Road Construction of 37.5 ICB Yes Yes Prior 09/17/2009 Construction ofbus 4 terminals, depot, 25.0 ICB Yes Yes Prior 04119/2010 tributaries facilities (b) ICB works contracts estimatedto cost US$5 million and above per contract and all direct contracting will be subject to prior review by the Bank. 73 Table 6: Goods Domestic Review by Expected Bid No' Contract cost Estimated Procurement (Description) P-Q Preference Bank ($Million) Method (yedno) (F'rior/post) Opening Date MRHand 1 1 Various, 1. agencies: 2.00 1 ICB No No Prior starting Vehicles 11/23/2009 DFR: Supply of Various, 1 40D-Cabin 1.14 ICB 1 1 4WD Pick-Ups 09/24/2009 Axle Load 2 Weighing 1.oo ICB No No Prior 09/24/2009 Machine I 1 1 MOTJagencies 1 3 and entities: 2.00 ICB No No Prior 09/17/2009 Vehicles GCAA: 2 VHF Direction 4 Finders for 0.60 ICB No NO Prior 07/13/2009 ~ Accra & Tamale Airports (c) ICB goods contracts estimated to cost US$500,000 and aboveper contract and all direct contracting will be subject to prior reviewby the Bank. 25. ConsultingServices (a) List ofconsulting assignmentswith short-list of international firms. Table 7: ConsultingServices 1 2 3 4 5 6 Estimated Review by Expected No. Descriptionof Services cost Selection Bank(Prior Method Proposals I 1 ($ million) /Post) submission Date Baselineand monitoringstudies of 0.7I QCBS 1 Prior 1 09/28/2009 1 I TSDP Financial, Technical and procurementaudit of TSDP 1.5 QCBS Prior 12/15/2009 . Integration of Geographical 3 InformationSystems (GIS) ofroad 0.4 QCBS Prior 09/02/2009 Agencies Develop regulations for the aviation 4 industry and studies on aviation 1.5 QCBS Prior 11/14/2009 sector development Institutional studies to operationalizeGRDA 1.5 QCBS Prior TBD Feasibility study for the 6 improvement oftransport on the 1.5 QCBS Prior 11/23/2009 Volta lake 74 I Feasibilitv Studies into the Table 8: Listof InternationalIndividualConsultants(IC) 1 2 3 4 5 6 Estimated Selection No. Descriptionof Assignment cost ExpectedEO1 /Post Bank (Prior Review by ($Million) Method submission Date Technical assistance for 1 development o f PPP in Fansport 1.o IC Prior 09/01/2009 sector (MOT) Technical assistanceto aviation directorate 0.7 IC Prior 09/01/2009 Technical assistance to Ministry o f Roads and Highways 0.5 IC Prior 12/06/2010 4. Transport Sector Donor Coordinator 0.3 IC Prior TBD 25. All contractsnot subject to prior reviewwill bepost reviewed. 75 Table 9: Complex or significantly risky NCB contractsto be prior-reviewed 1 12 3 1 4 ~~ 1-5 Estimated Domestic Review by Expected Bid No. Contract Procurement (Description) cost P-Q Preference Bank ($Million) Method (yes/no) (Prior/post) 0pening Date Minor Rehabilitation: I lNo Wute-Sasekpe- Amegakope- 1.16 No Prior 11/09/2009 KutimeRoad (VR) NCB Minor Rehabilitation: Luagri-Prima Prior 11/09/2009 Road(NR) Minor Rehabilitation: 3 Namase- 0.84 NCB No No I Prior I 11/09/2009 Brohani Road (BAR) spot Improvement: 4 Asawinso - 0.30 NCB No No Prior 11/09/2009 MmrewaRoad (WR) 76 Annex 9: EconomicAnalysis Ghana: Transport Sector Project 1. An economic analysiswas conducted for the civil works, which consist of reconstruction, rehabilitation, and upgrading of the: (a) Ayamfuri-Asawinso (Ghana Highway Authority (GHA) sub-component); and (b) urban road network (Department of Urban Roads (DUR) sub- component). The investments in feeder roads are small (about US$25,00O-US$75,000 per km), and spread all over the country because of which they were subjected to cost-effectiveness analysis. Summary 2. The civil works, including contingencies, represent about 75 percent of the project cost. Economic analysis was not conducted on the capacity building, policy reform, studies, and project management sub-components. The economic analysis focused on the cost-benefit analysis of GHA road and a sample of roads from DUR, and a cost-effectiveness analysis of a sample of feeder roads. Table 1:Summary of EconomicAnalysis Sub-Component NPV(@ 12%) ERR FYRR (US$ million) GHA road(Ayamfuri-Asawinso) 55.0 17.9% 22.4% DURroads - GiffardRoad 2.5 20% - BurmaCamp Road 2.7 15% 3. For the GHA road, the main benefits resulting from improving the road section to asphalt concrete standardinclude reduction invehicle operating cost to existing traffic and transport cost savings for diverted freight traffic. The economic analysis was undertaken using the road planning model Highway Development and Management Model version 4 (HDM4). The initial economic analysis was undertaken in 2006 using data collected in 2005/2006. In 2008, the analysis was updated to take into account a major revision of costs. The DUR component was evaluatedby comparing the "with project" case of upgradedroad and widening with the "without project" case of keeping the existing road alignment in passable condition. The costs included investment costs based on updated design, resettlement cost and utilities relocation cost. The benefits were computed based on vehicle operating cost (VOC) savings, time savings and maintenance cost savings. GHA sub-component 4. The Ayamfuri-Asawinso Junction road section (52 km) forms part ofthe 350 km South- North corridor route selected by the government for improvement. The route is located in the Western Region, Brong Ahafo and the borders o f central and Ashanti regions. The Ayamfuri - 77 Asawinso Junction section consists of poor gravel and sealed road surfaces. However, other sections of the route have recently beenconstructed, to a good sealed road standard, including60 km from Axim to Tarkwa and Asawinso Junction to Gambia No. 2. To complete the route a further 176kmwould needto bereconstructedandimproved. 5. The traffic volume along the 350 km route varies considerably with over 2,000 vehicles on the recently constructed part and lower traffic volumes on the poorer sections that have been identifiedfor improvement. Much of this traffic is local in nature, long distance traffic tends to take other routes (for example from Takoradi to the North and West of Ghana via Kumasi) rather than use the corridor. As can be seen from Table 2 below, passenger vehicles account for a high proportion of current traffic. Apparent traffic growth along the corridor has been high in the period2000-2005, ranging up to 30 percentper year for the Asawinso-Bibiani section. Table 2: Traffic CompositionandAnnual Growth 1Traffic compositionin2005 Light/ Heavy Annual medium truck growth truck% % 2000-2005 8 10 14% 9 19 18% 9 6 30% 6. The area directly served by the project route has a population of about 800,000 people but there are a further 670,000 people in areas that are indirectly served through connecting feeder roads. The main economic activities in the project area are cocoa and food production, logging andtimber processing andthe miningof gold, bauxite andmanganese. 7. Development of the route is expected to help further stimulate economic development of the resource richwestern area of the economy and improve its economic integration with the rest of Ghana's economy. The road will provide an alternative north-south link for transit traffic. The main economic benefits calculated to arise from the investment are reductions in vehicle operating costs to existing traffic as well as substantial transport cost savings for diverted freight traffic. 8. Future Traffic Growth and Potentialfor Diversion: A wide range of commodities, with different growth characteristics use the route andmay be expectedto divert to the improved road corridor. Bauxite is currently mined at Awaso (close to Asawinso) and is exported via Takoradi port. In recent years output has been around 500,000 tons but the company is committed to 78 increase production to 1.5 million tons within five years. Currently, about 60 percent production goes by rail and 40 percent by road to the port. However there are capacity constraints on the railway, and the Bauxite Company has invested in road transport to complement movement by rail. Other minerals mined inthe area will only have a marginal impact on traffic using the new project road. 9. The Western Region accounts for 57 percent of Ghana's cocoa production and Brong Ahafo Region (to the north of Western Region) a further 10percent. Overall, about 60 percent of the national cocoa crop is exported via Tema while the remaining 40 percent is exported via Takoradi. With the improved road, it is anticipated that there would be substantial scope to take advantage of the reduced transport costs and ship cocoa by road direct to Takoradi rather than by movingthe crop first to Kumasi and thenonto Tema. 10. Ghana's forestry and timber processing i s concentrated in the south-west of the country. Timber processing is concentratedin Kumasi, Takoradi, and withinthe project area; these have respectively 40 percent, 30 percent, and 20 percent of national capacity. Through reduced transport costs on the improved route, there is believed to be scope for traffic diversion, particularly from alternative routesto the south fkom Kumasi. 11. So far, very little transit traffic uses the project route. However, there i s potential for diversion to this route, with the improvement ofthe corridor. 12. It has beenassumed that population and income growth will provide the basis for traffic growth forecasts. As can be seen inTable 3, light vehicle growth is assumedto be 7.1 percent in the period2005-2015 and 6.5 percent inthe period2015-2025. Lower estimates have beenmade for minibusesandbuses. Table3: ForecastAnnual GrowthRatesfor PassengerVehicles - _ _ - __ i 2005-2015 1 - _ _ _ _ _ ,-2015-2025- - _ I _ ^ I 1 _-__llll __I_ Project area PopulationGrowth __ I 2.9% j 2.9% _ . _" - - _ _ -___-_ -I- - - _ I I _ _ - ^ - 2.7% 2.7% I Growth in incomeper capita Light vehicle expenditureelasticity _ _ 1.3 _ - _ _ _ _- - __ _ ~ . _ _1.5__ . - I _ Light vehicle traffic growth - _ _ - - _ _ - - _ 7.1% 6.5% ~ 1 - Minibus-expenditureelasticity , 1 0.8 Minibus growth 5.7% i 5.1% Large bus expenditureelasticity -_- 0.5 ""..I 0.5 - - - - I _I___I_ 111 l_lI Large bus growth -1 I -- 4.3% 4.3% 13. Distance Saving: The potential distance saving via the route naturally varies along its length. The maximum distance saving to the port o f Takoradi i s 171 km fkom Awaso, providing a distance saving of 41 percent of the current predominantly used route. Awaso is important because it is the location of the bauxite mine which i s close to Asawinso Junction the northern end of the proposed IDA fundedproject component. Bibiani(a center for timber processing) has 79 a distance saving of 116 km to Takoradi, a saving of 31 percent of the route length. Berekum at the far northofthe project corridor has a distance saving of 35 kmrepresentingjust eight percent ofthe current route length. 14. Generated Traffic; Generated traffic was not a major feature of the traffic analysis. It was felt-thatthe volume of freight traffic would not be that sensitive to transport cost reductions. Ingeneral, passengertraffic can be expectedto be more sensitive to transport cost savings and road improvements. EconomicAnalysis 15. An economic appraisal of the three project links (Tarkwa- Ayamfuri, Ayamfuri- Asawinso, and Gambia No. 2 to Kyeremaso) was undertaken using the road planning model HDM4. Eachroad link was to be improved to asphalt concrete standard. The approachadopted was to estimatetransport cost user savings from improvingthe road. Savings were calculated for both existing traffic using the route and savings from diverted traffic. The latter, arising principally fiom the diversion of freight transport movements from other routes, amounted to 37 percent o f the benefits. A small volume of generatedtraffic (amounting to less than 1percent of the savings) for passenger traffic movements was included inthe analysis, and most of this was associatedwith the final project link Gambia No. 2 to Kyeremaso. 16. An initial economic analysis was undertakenin 2006 using data collected in 2005/2006, which was later updated in2008 to take into account a major revision of costs. Vehicle operating cost and road maintenancecost datausedinthe appraisal are given inTables 4 and 5. Table4: GeneralEconomicInput data inUS$ PetroVltr 0.43 DieselAtr I - ~-, 0.48 I - - - - Passenger time value 0 15 hr __ 500-1000 _I^ Overheads small __^_____I_I__ I I Commercial vehicles Overheads large ' 0.05 per km commercial vehicles j 80 Table 5: MaintenanceUnit Costs and Assumed Intervention Levels Economic Maintenanceunit Costs j Maintenance intervention US$ _ _ , Without _ -_- ----- -- - I ____I" -_I_ --I patching /m2 8.7 _I___-_ _ A _ project 1 With project _Reseal _ _ - /m2 4.4 __ _ _ _ _ _ i 30% damagedarea _-- -_ -._- _ _ _ _ _ _.+ -' II I I I ~ Edgerepair i _ _ _ _ /m2 100% 100% - 8.7 __- __ -__ - - ~ - _- - I ___I -_ Grading_ /km ! 310.6 -r-- At 121k _ - _ - ~ ~ . % - -" . i - ^I_ Regravelling /m3 10.9 150Imm when below 50 - mm 17. The assumptions made in the 2008 update of the economic analysis includes the construction costs, in US Dollar terms, which was estimated to be 56 percent higher (for the three links) than previously estimated. To account for the rise in oil prices, vehicle operating costs were assumed to be 20 percent higher than previously estimated. This was based on an assumption that long term oil prices would be US$lOO per barrel in the long term. (The 2006 vehicle operating costs were based on international oil prices at US$50 per barrel. Since then oil prices have risen dramatically, reaching a peak of US$147 per barrel in July 2008 with many estimates suggesting that long term price will be well over US$lOO per barrel. Assuming that long term oil prices are at US$l00 per barrel, using the HDM4 analysis, raises average vehicle operating costs by 20 percent, with no increaseinother component prices.) 18. The revised economic analysis indicated that the overall project (Le,, including the three sections) is still economically viable with an economic internal rate of return (EIRR) of 17.9 percent. The switching value analysis shows that construction costs would have to rise by 44.8 percent before the project becomes marginal (Le., has a 12 percent rate o f return). Similarly traffic benefits would have to fall by 34.6 percent to achieve the same result. The first year rate of return (FYRR) is 22.4 percent (well above the opportunity cost of capital) indicating that the project is timely, i.e., there would be no economic gain for postponing the project. 19. Becausedivertedtraffic accounts for 37 percent of total project benefits, andthe extent of diverted traffic i s heavily dependent upon the first two sections being completed, there is no completely satisfactory way o f analyzing each section individually. However, an analysis was carried out to see the overall effect of omitting the isolated Northernlink (link 7, Gambia No. 2 - Kyeremaso) from the appraisal. The results show that the two remaining southern links are much more economically viable ifthis latter link is omitted, or postponed, from the project. Inthis case the EIRR rises to 24.4 percent. The switching values are 64.2 percent and -44 percent respectively for construction costs and traffic benefits. 81 Table 6: Resultsof 2008 RevisedEconomicAnalysis Link , LinkName Length 1Financial 1EconomicCost , ~ No. I Kyeremaso Total 176.9 __ _ _ _173.8 _ _ 160.0 - - ~ I . - _ I - __ll-. 0-7 Total Project Results NPV at 12% : $55.0 M NPVK : 0.34 EIRR: 17.9% FYRR: 22.4 Switching Values (assuming a discount rate of 12%) I Construction Costs: 44.8% 0-6 -'1 Traffic Benefits: - 34.6% - j III______I_II _II I__ Total Project ExcludingLink 7 (Gambia No.2 to Kyeremaso). NPV at 12% : $70.1 M NPVK : 0.53 ~ ' EIRR: 24.4% FYRR: 25.5% ~ Switching Values (assuming a discount rate o f 12%) ~ Construction Costs: 64.2% Traffic Benefits: -44.0 % Departmentof UrbanRoads(DUR)Roads Sub-Component 20. Project Description: The proposed project roads consist of 8.96 km of Burma Camp road, starting from Giffard Road to Teshie Link; and 5.8 km Giffardroad from Akuafo Circle to Tema Road. Table 7: Descriptionof DUR ProjectRoads Item RoadName Length(km) Cost ' (US%million) I _ 1. Burma Camp Road 8.96 33.7 2. 'GiffardRoad , 5.8 11.7 ~ 21. Methodology: The methodology follows the conventional approach to evaluating project costs and benefits by comparing the "with project" case, which i s that of the upgraded improved 82 road involving widening options or new road link, to the "without project" case, which is that o f the existing road alignment. The emphasis lies on analyses of road user vehicle operating and travel time costs in the "with" and "without" situations using established quantitative methods, together with road construction and maintenancecosts. 22. The analytical process involves a comparison betweenthe different cost streams over the project twenty year evaluation period. The principal cost components in the analysis comprise those costs incurred in the form of maintenance costs, both recurrent and periodic, associated with maintenanceandupkeepofthe existing andproject roads, as well as the capital construction costs associated with the new links and widening options of the project roads. The other major cost component refers to road user costs, which are those costs associatedwith vehicle operation andtravel time. The composition of overall net benefits derives principally from these two road user cost elements in which vehicle operating and time cost savings are applied to the projected traffic flows over the duration ofthe thirty year project appraisal period. 23. Traffic Characteristics: To obtain an idea of the traffic flow on the two roads traffic studies were conducted in late December 2008. The count stations were made to coincide with locations o f previous counts in the corridors, and the data obtained analyzed to obtain the peak hour traffic flow for each road. The traffic was assumed to grow at three percent between2010 and 2016; four percent between2017 and 2029; and two percentbetween2030 and 2035. For the roads under consideration both generated and diverted traffic from the original study have been adopted. It is observed that peak period i s four hours, two hours in the morning and two in the evening. 24. Project Costs: For the project roads, investment cost streams were obtained from design estimates and include civil works; resettlement expenses including costs associated with demolition o f properties and relocation of utilities; cost of environmental mitigation measures; relocation o f public utilities inthe right of way; and escalation in prices o f materials. To obtain economic costs for project appraisal, certain adjustments factors, "shadow pricing", was used. The exercise yielded an overall modification of the initial investment figures by an average of sevenpercent for works undertakenby foreign-based contractors, and about 11percent for works undertaken by local contractors. 25. Project Benefits: The benefits were computed using vehicle operating cost savings, time savings as a result of reducedcongestion, andmaintenancecost savings. 26. Economic Rate of Return (ERR): The estimation of ERR for the various sub-projects indicate very robust rates of return (see Table 8 below). The Giffard Road has an ERR o f 20 percent; and Burma Camp Road at 17percent. Sensitivity analysis undertaken for the roads yield weighted ERRSof: (ii) percent for 50 percent decrease inbenefits; and (iii) percent for 50 10 13 percent increase incosts. 83 Table 8: EconomicRate of Return AADT NPV 50% decrease in 50% decrease in Name of road (2009) ERR US$ million benefits (ERR YO) benefits (ERR YO) BurmaCamp Road 8930 17% 2.67 9% 11% GiffardRoad 20862 20% 2.44 11% 14% Departmentof FeederRoads(DFR) Roads Sub-Component 27. The investments inthis component are divided into two phases. Under phase 1, the focus i s on improving non-engineered feeder road links in the country to provide all-weather access to people. The total cost of such works is estimated at US$18 million. The total lengthof the road network to be improved is about 350 km at an average cost of US$25,000 to US$75,000 per kilometer. Under phase 2, an additional amount of US$15 million has been allocated and the exact nature and location of the improvements to be carried out will be developed during the first year of project implementation, following an agreed selection criteria. 28. Given the small nature of individual investments in phase 1, the selection of specific feeder roads i s based on cost-effectiveness criteria in the following manner: First, feeder roads already included in the existing national network but of low standard were considered. Second, feeder roads were prioritizedaccording to their existing condition; the poorest quality roads were given top priority. Against this screening, roads were selected, by region, on the basis of maximizing population given all-year accessibility to the primary and secondary road network. Finally, this selection was screened against availability of social services, including health clinics, schools, markets, and extension services. 29. Table 9 shows the estimated cost-effectiveness range o f selected projects within the region. The cost effectiveness indicator is the number of people given all weather access to the national trunk road network per US$2,500 invested.It should be noted that, inaddition to access, each US$2,500 investment i s also expected to create roughly 15 person-days of employment. Broadly, regions to the south, central, and west have higher population density resulting in a higher cost effectiveness index; while regions in the north and upper west have low population densities resulting ina lower cost effectiveness index. 84 Table 9: Cost-Effectiveness Index for Select Feeder roads Ashanti I 10-29 85 Annex 10: SafeguardPolicyIssues Ghana: TransportSectorProject A. EnvironmentalAssessments and ResettlementAction Plans 1. Components CyD, and Eof the project include significant civil works (road rehabilitation and upgrading) to be executed inthe first year work plan.Inaddition, there are minor civil works (construction of classrooms, laboratory, hostel, workshop and offices) related to components B. The project therefore triggers OPBP 4.01,Environmental Assessment (EA). Consequently, OP 4.11, Physical Cultural Resources has also been triggered, as the policy applies whenever OP 4.01 applies, i.e. whenever there is likely to be significant civil works. Also Involuntary Resettlement (OPBP 4.12) has been triggered. The project has beenassignedthe Environmental Category A. 2. An Environmental and Social Management Framework (ESMF), and a Resettlement Policy Framework (RPF) were prepared for the road sector in 2006, and re-disclosed for this project in December 2008. Environmental Impact Assessments (EIAs), Environmental Management Plans (EMPs), and Resettlement Action Plans (RAPS) for the first year's road projects (four roads) have beenprepared and disclosed in-country and at the InfoShop in March 2009. Those roads are: Ayamfuri - Asawinso highway, Giffard Road, and Burma Camp Road. One EIA and one RAP cover the highway, and one EIA and likewise one RAP cover the three urban roads. The analyses and the census are, however, road specific, likewise the mitigation measures. 3. Additional works to be carried out in the second year include: (a) minor civil works (construction of lecture hall, laboratory, hostel, workshop and offices); and (b) feeder roads rehabilitation and maintenance. These works will be subject to ESMF/RPF requirementsand site specific EIAs/EMPs and RAPS,ifrequired. 4. Funding for Safeguard Mitigation Measures. The cost for implementation of the mitigation measures as identified in the RAPs will be covered by the Government of Ghana (GOG); the cost for Human Immunodeficiency VirudAcquired Deficiency Syndrome (HIV/AIDS) prevention and EMP will be covered by civil work contracts; and cost related to capacity building andtraining will be financed by the Credit 5. Environmental Assessment. No salient adverse environmental impacts have been identifiedinthe EIAs.Adverse impacts are restricted inscope and limitedto the execution of the following civil works operations: (a) establishment o f base camps for contractors and resident engineers; (b) road construction operations resulting in dust, noise, and temporary loss o f flora; (c) opening or re-opening of borrow pits and solid rock quarries, which could result in soil erosion and pollution and aesthetically undesirable alterations of the landscape; (d) opening o f diversions; and (e) dumping of construction waste and accidental spillage o f machine oil, lubricants, etc. Environmental management plans (EMPs) have been prepared for each project road, as part of the EIAs, mitigationand monitoringmeasureshave been establishedand costed. 86 6. Social Assessment. Social Impact Assessments (SIAs) were carried out as part of the road project's feasibility studies. The findings o f the SIAs identified adverse, but not salient, social impacts. Adverse social impacts to be induced by the civil works include: (a) land acquisition (resulting in involuntary resettlement), loss o f strips o f land, and (b) dislocation o f social values induced by the influx o f migrantworkers (resulting inthe spread o f HIV/AIDS). To mitigate the adverse social impacts o f project operations, two individual RAPS have been prepared and reviewed by the environmental desks o f DUR and GHA and cleared by Ghana's EPA and by the Bank. One RAP i s covering the Ayamfuri - Asawinso highway, and the other i s covering the three urban roads, with respective census and analyses for each project road. The RAPSidentified 331households to be adversely affected, o fwhich 87 will permanently lose their properties and 244 will be partially affected. The EIA and SIA teams included both social scientists and environmentalists. The socio-economic data collected through review o f existing documentation, public consultations, and field studies, covered issues related to landtenure, land acquisition, involuntary resettlement, road safety, HIV/AIDS, vulnerable groups, indigenous peoples and cultural property. B. AlternativesConsideredto MinimizeAdverse Safeguard-related Impacts 7. Drawing from experiences o f the Road Sector Development Project (RSDP), the road designs were required to take into account the potential environmental and social impacts o f the road alignments, with the aim to reduce adverse safeguards related impacts. Social protection clauses will be incorporated in the works contracts, including HIV/AIDS prevention. In the detailed designs, the right o f way requirements have been reduced in town sections, where adverse impacts on properties were presumed to be severe. During contract mobilization, the supervision consultants will undertake a design review o f the road alignments, and submit a right-of-way report, to confirm the design, construction obstacles, and suggest changes to the design in the aim to improve not only engineering efficiency, but also road safety and reduce adverse social impacts. C. Consultationswith Various StakeholdersandAffectedGroups 8. The design o f the Transport Sector Project (TSP) i s participatory on several levels: (a) at national level; (b) at regional level; (c) at district level; and (d) at donor community level. At the level o f districts, public consultations were held in local communities along the selected road projects throughout the EIAs and SIAs processes. The stakeholders included district administrations, community based organizations, community based facilitators, non- governmental organizations, sector administrations, and villages. The consultations focused on assessing the viability o f the project roads, identifying potential areas o f conflict between stakeholders, and defining areas o f collaboration. 9. The result o f the public consultations carried out in the SIAs and the EIAs confirmed support for implementation o f the road projects. To further improve stakeholders' participation, the following actions will be undertaken as part o f the project implementation: (a) sustain consultations with district administrations, local communities and project affected persons (PAPS);(b) conduct training with the aim to strengthen the culture o f public consultations as a normal planning tool to sustain maintenance o f the road transport network; and (c) carry out repeated consultations with local communities during implementation at all stages o f the civil 87 works, to minimize conflicts, enhance cooperation, and improve social benefits and performance o f the works contracts. Recurrent consultations, through public hearings and information, will provide opportunities for stakeholders (particularly rural areas), to express their concerns, provide suggestions and thereby strengthen social inclusion in future road planning, design, implementation andmaintenance operations. D. CapacityAssessment of InstitutionsResponsiblefor SafeguardManagement 10. Mitigation o f adverse environment and social impacts o f development projects i s supported by national laws. The LandValuation Boardprovides the executive instrument for any expropriation o f land or property for development projects (private or public), after receiving detailed designs and carrying out its own field inspections. The Board has both the human capacity and the logistic resources requested for the work. As part o f the RSDP initiatives, environmental desks were established at DUR and GHA. Review o f both environment and social safeguards documents, and monitoring o f compliance at supervision stage, have been the core tasks o f the desks. The main challenge has been human capacity. RSDP was the first training ground. The first safeguards documents to be prepared and implemented in the road sector in Ghana were under RSDP. The environmental desks are constituted o f two highway engineers with masters in environmental management (team leaders), and supported by young highway engineers inDURandthree sociologists inGHA. 11. There i s a need to further strengthen the social safeguards management capacity. The proposed TSP will support the environmental desks o f both DUR and GHA with the aim to: (a) train more staff; (b) strengthen the analytical capacity; and (c) facilitate the implementation and monitoring o f the EMPs and the RAPs prepared for each o f the proposed road projects. In addition, TSP will work with other Bank funded infrastructure projects in Ghana, in view o f creating synergies and a pool o f national experts. E. Referencesto Mitigationplansinthe ProjectLegalArrangements 12. The mitigation o f adverse environmental and social impacts identified have been incorporatedinto the Financing Agreement andwill be included inthe contract documents. F. Mechanismsto Monitor the ImplementationofAgreedMitigationPlans 13. The mandates o f the environmental desks are supported by national environmental laws. TSP will support the environmental desks to ensure compliance with the implementation o f the EMPs and the RAPs prepared for the proposed road projects. The EMPs and the RAPSinclude both internal and external monitoring arrangements. The internal monitoring will be carried out by the supervision engineers and the environmental desks o f DUR and GHA. The external monitoring will be conducted by the Environmental Protection Agency (EPA) o f Ghana and the departments o f civil works o f the districts. Supervision and monitoring will be a continuous process. The day to day field supervision will be conducted by the construction supervision engineers and captured in the monthly and quarterly progress reports, which are subject to review by the environmental and social specialists o f the environmental desks. The environmental desks will continuously take stock o f all expropriation, and compensation reports and discuss them on 88 regular basis. The environmental desks will produce quarterly progress reports on environmental and social performance. The reports will be part of the overall project monitoring system. Monthly project progress reports usually prepared by the supervising consultants will report progresson EMPimplementation and social safeguards outcomes, including HIV/AIDS. 89 Annex 11:ProjectPreparationand Supervision Ghana: TransportSectorProject Planned Actual Project ConceptNote review November 11,2007 February 5,2007 InitialProject IdentificationDocument February 12,2008 February 13,2008 to PIC Initial Integrated Safeguards March 7,2008 March 7,2008 Datasheetto PIC Appraisal February 23,2009 March 19,2009 Negotiations March 10,2009 April 22,2009 Board/RVP approval June 30,2009 Planned date of effectiveness August 31,2009 Planned date of mid-termreview December 15,2012 Planned closing date June 30,2015 Key institutions responsiblefor preparation of the project: MinistryofRoadsandHighways MinistryofTransport Bank staff and consultantswho worked on the project include: Name Title Unit Ajay Kumar Lead Transport Economist (Team Leader) AFTTR Tawia Addo-Ashong Senior Transport Specialist AFTTR Antoine Lema Social and Environment Specialist AFTTR John Hine Senior RuralTransport Specialist ETWTR John Richardson Transport Specialist AFTTR Anthony Mensa-Bonsu . ProcurementSpecialist AFTPC Robert Degraft-Hanson Fin.Mgmt. Specialist AFTFM Rajiv Sondhi Senior Finance Officer LOAFC Manush Hristov Senior Counsel LEGAF John Stewart Senior Environmental Specialist AFTEN Arun Banerjee Consultant AFTTR Jean-Francois Marteau Peer Reviewer AFTTR HenryKerali Peer Reviewer ECSSD Imogene Jensen Peer Reviewer EASOP Anne Njuguna Program Assistant AFTTR Charity Boafo-Portuphy Program Assistant AFCWl EstimatedApproval and Supervision costs: (i)Remainingcoststoapproval: us$lo,ooo (ii) Estimatedannual supervision cost: US$l00,000 90 Annex 12: Documentsinthe ProjectFile Ghana:Transport SectorProject 1. Transport Sector Development Programme (TSDP) 2008-2012, Ministry of Transportation, Ministry of Aviation, Ministryof Harbours and Railways 2. National Transport Policy of Ghana 3. Road Sector Development Programme, 2007 Review Report, Ministryof Transportation. 4. Environmental and Social ManagementFramework, EPA, Ghana 5. Resettlement Policy Framework, EPA, Ghana 6. Feasibility Study and Design and of Arterials and Local Roads in Accra East Corridor, June 2008, DIWI Consult inAssociation with MunicipalDevelopment Collaborative Ltd. 7. Detailed Design Report on the Rehabilitation of Tarkwa-Bogoso-Ayamfuri-Asawinso and GambiaNo. 2-Kyeremaso Roads, October 2007, Carl Bro Intelligent Solutions 8. Implementation Completion Report for the Road Sector Development Programme, 2007, World Bank 9. Independent Procurement Review (1PR)-Road Sector Development Project, April 2005, Global Procurement Consultants Ltd 10. Institutional Study o f the Transport Sector, Draft Final Report, 2006, WSP International inassociationwith CrownAgents, UK. 11. Report on the Comprehensive Regional Implementation Plan for Aviation Safety in Africa Gap Analysis on Ghana 30 June -4 July, 2008 12. ICAO Universal Safety Audit Action Planof 24thApril, 2007 13. Revised Axle Load Control Policy and Action Plan, MOT, April 2005. 14. UrbanTransport Planning andTraffic Management Report for the Greater Accra MetropolitanArea (GAMA), Sekondi-Takoradi, Cape Coast and Koforidua, Draft Final Report, DHV, 2005. 15. Evaluation ofthe Management and Financing Arrangements for RoadMaintenance, MOT/DANIDA, 2003. 91 Annex 13: Statement of Loans and Credits Ghana:Transport Sector Project Differencebetween expectedand actual OriginalAmount inUS$Millions disbursements ProjectID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev'd P105092 2008 GH-Nut.& MalariaCtrl Child Surv (FYO8) 0.00 25.00 0.00 0.00 0.00 18.18 2.09 0.00 P101852 2008 GH-HealthInsuranceProject(FYO8) 0.00 15.00 0.00 0.00 0.00 13.60 9.64 0.00 PO74191 2008 GH-EnergyDev & Access SIL (FY08) 0.00 90.00 0.00 0.00 0.00 72.92 -8.71 0.00 P100619 2007 GH-UrbanTransport ProjectSIL (FY07) 0.00 45.00 0.00 0.00 0.00 41.08 2.81 0.00 PO93610 2007 YGH-eGhanaSIL (FY07) 0.00 40.00 0.00 0.00 0.00 35.89 15.33 0.00 PO92986 2006 GH-EconomicManagementCB 0.00 35.00 0.00 0.00 0.00 16.85 -3.94 0.00 PO88797 2006 GH-Multi-SectHIV/AIDS M-SHAP - 0.00 20.00 0.00 0.00 0.00 9.81 5.41 3.46 (FY06) PO85006 2006 MSMEInitiative 0.00 45.00 0.00 0.00 0.00 40.49 19.70 0.00 PO56256 2005 GH-UrbanWater SIL (FYO5) 0.00 206.00 0.00 0.00 0.00 69.52 51.54 0.00 PO84015 2005 GH-SmallTowns Water Sply & Sanit 0.00 36.00 0.00 0.00 0.00 10.75 -0.59 0.00 (FYOS) PO81482 2005 GH-ComBasedRuralDev (FYOS) 0.00 82.00 0.00 0.00 0.00 24.07 -0.37 0.00 PO71157 2004 GH LandAdministration (FY04) 0.00 20.50 0.00 0.00 0.00 6.88 4.86 0.00 PO82373 2004 GH-UrbanEnv Sanitation2 (FY04) 0.00 62.00 0.00 0.00 0.00 41.13 23.70 0.00 PO50620 2004 GH-EduSec SIL (FY04) 0.00 78.00 0.00 0.00 0.00 34.08 26.95 0.00 PO00970 1999 GH-TradeGateway& Inv SIL (FY99) 0.00 50.50 0.00 0.00 0.00 3.76 1.04 -1.21 Total: 0.00 850.00 0.00 0.00 0.00 439.01 149.46 2.25 92 GHANA STATEMENT OF IFC's Heldand DisbursedPortfolio InMillionsofUSDollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 1990 AAIL 0.00 2.55 0.00 0.00 0.00 2.55 0.00 0.00 1998 AEF NCS 0.00 0.00 0.53 0.00 0.00 0.00 0.53 0.00 1997 AEF PTS 0.00 0.00 0.31 0.00 0.00 0.00 0.31 0.00 1994 AEF Shangri-la 0.93 0.00 0.00 0.00 0.93 0.00 0.00 0.00 1996 AEF Tacks Farms 0.43 0.00 0.00 0.00 0.37 0.00 0.00 0.00 2006 BarclaysBnkGHA 30.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1989 CAL BankLtd 0.00 0.87 0.00 0.00 0.00 0.87 0.00 0.00 2001 DiamondCement 2.50 0.00 0.00 0.00 2.50 0.00 0.00 0.00 2000 ELAC 0.00 0.10 0.00 0.00 0.00 0.10 0.00 0.00 1991 GHANAL 0.00 0.22 0.00 0.00 0.00 0.22 0.00 0.00 2006 NewmontGhana 75.00 0.00 0.00 50.00 0.00 0.00 0.00 0.00 2005 Scancom 40.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 2005 School FinFacil 1.03 0.00 0.00 0.00 0.25 0.00 0.00 0.00 Total portfolio: 149.89 3.74 0.84 50.00 24.05 3.74 0.84 0.00 Approvals Pending Commitment FY Company Loan Equit Quasi Partic. Approv Y al 2005 Scancom 0.00 0.00 0.00 0.00 2004 TakoradiI1 0.06 0.00 0.00 0.00 Total pending 0.06 0.00 0.00 0.00 commitment: 93 Annex 14: Countryat a Glance Ghana:TransportSectorProject Ghana at a glance 9124108 Sub- Key Development Indicators Saharan LOW Ghana Africa inwme Age distrlbutlon, 2007 (2007) Male Female Population,mid-year (millions) 23.5 800 1,298 75-79 I Surface area (thousandsq. km) 239 24,242 21.846 Populationgrowth ( O h ) 2.0 2.4 2.1 60.64 Urban population(% of total population) 49 38 32 45.48 GNI (Atlas method, US$ billions) 13.9 762 749 30.34 GNI per capita (Atlas method, US$) 590 952 578 15-18 GNI per capita (PPP, international$) 1,330 1.870 1,500 0 4 GDP growth ( O h ) 6.3 8.2 6.5 20 10 0 10 20 GDP per capita growth (%) 4.2 3.7 4.3 percent (most recent estimate, 200&2007) Povertyheadcountratioat $1.25 a day (PPP. %) 50 Povertyheadcountratioat $2.00 a day (PPP,%) 72 Under-6 mortality rate(per 1,000) Life expectancyat birth (years) 60 50 57 Infant mortality(per 1,000live births) 78 94 85 200 Child malnutrition( O h of children under 5) 1s 27 29 $50 Adult literacy,male (% of ages 15 and older) 66 69 72 Adult literacy,female (% of ages 15 and older) 50 50 50 100 Gross primaryenrollment,male (% of age group) 98 99 100 Gross primaryenroliment,female (% of age group) 97 88 89 60 Access to an improvedwater source (% of population) 80 58 88 0 Access to Improvedsanitationfacilities (% of population) 10 31 39 1880 1886 2000 2006 0 Ghana 0Sub-Saharan Africa Net Aid Flows 1880 I890 2000 2007 (US$millions) I Net ODA and official aid 191 560 600 1,176 Growth of QDP and GDP per caplta (%) Top 3 donors (in 2006): United Kingdom 35 22 80 187 Netherlands 5 25 28 97 18T United States 19 13 63 88 Aid ( O hof GNI) 4.3 9.7 12.4 9.3 Aid par capita (US$) 17 36 30 51 Long-Term Economic Trends 95 w 05 Consumerprices (annual% change) 50.1 37.3 25.2 9.4 51.1 31.2 27.2 14.8 II GDP implicit deflator (annual% change) eo +GDP - GDP per capita Exchangerate (annualaverage, local per US$) 9.6 326.3 5,455.1 9.339.3 Terms of trade index (2000 = 100) 83 100 64 1880-90 1880-2000 200047 (averageannualgmwth %) Population,mid-year(millions) 11.4 15.8 20.1 23.5 3.1 2.6 2.2 . GDP (US$ millions) 4,445 5,888 4,977 15,248 3.0 4.3 5.5 (% of GDP) Agriculture 57.9 44.8 35.3 36.3 1.o 3.4 3.9 Industry 11.9 16.8 25.4 25.3 3.3 2.7 7.5 Manufacturing 7.8 9.8 9.0 8.2 3.9 -4.5 Services 30.2 38.4 39.3 38.4 5.7 5.6 6.2 Householdfinal wnsumption expenditure 83.9 85.2 84.3 77.5 2.8 4.1 5.7 Generalgov't final consumptionexpenditure 11.2 9.3 10.2 12.7 2.4 4.8 -7.0 Gross capitalformation 5.6 14.4 24.0 32.9 3.3 4.3 14.7 Exportsof goods and services 8.5 16.9 48.8 36.2 2.5 10.1 3.9 Importsof goods and services 9.2 25.9 87.2 59.3 0.6 10.4 7.2 Gross savings 4.5 7.0 15.7 27.6 Nota: Figuresin italics are for years other than those specified. 2007 data are preliminary. .. indicates data are not available a. Aid data are for 2006. DevelopmentEconomics,DevelopmentData Group (DECDG). 94 Ghana : Balance o f Payments and Trade 2000 2007 Sovernance Indlcators, 2000 and 2007 (US$ miiiions) Total memhandisaexports (fob) 1938 4,P5 Total merchandise imports (cif) 3,031 8,091 Voicemnd accouniabllity Net trade in goods and services -922 -3,444 POlitICelstability Mrkers' remittances and compensation of employees (receipts) 32 a 5 Regulatoryquality Current account balance -48 -725 Ruleof law a s a % o f G D P -8.4 -4.8 Controlof wrruption Reserves. includinggold 284 2,398 0 25 50 75 100 Central Qovernment Finance 2007 Country'spercentilerrnk (0-MO) 0 2000 higher vdoeolmply befterrnfrnps (%of GDP) Currant revenue (includinggrants) 8.8 24.5 owc. Ksurmllnn-Kr..y-M.aru2ri,VIbrld8.nk Tax revenue 8 . 3 7.3 Current expanditura 8.5 8.1 Technology and Infrastructure 2 0 0 0 2007 Overall surplus/deficit -8.7 -8.0 Paved roads (%oftotal) 29.6 l79 I Highest marginal tax rate (%) Fixedlinaandmobiiephone Individual 30 25 subscribers (per 1000 people) 2 34 ' Corporate 33 22 Hightechnologyaxports (%of manufactured exports) 19 0 2 External Debt and Resource Flows Envlro nment /US$ rniiiions) Total debt OUtStandinQand disbursed 8,18 3,82 Agricultural land (%of land area) 84 65 Total debt service 388 267 Forest area (%of land area) 28.8 24.2 Debt relief (HIPC,MDRI) 2,742 1938 Nationally protected areas (%of land area) .. 8.2 Totaidebt (%ofGDP) -2.9 25.7 Freshwater rasources par capita (cu.meters) .. I345 Total debt service (%of exports) 15.7 5.6 Freshwaterwithdrawal (%of internal resources) 3.2 Foreigndirect investment (net inflows) 8 8 435 C02 emissions percapita (mt) 0.31 0.33 ' Portfolio equity(net inflows) 0 0 ! GDP per unit of energyusa Composition of total external debt, 2006 (2005 PP P $ per kg of oil aquivalent) 2.6 2.9 ii Energyuse per capita (kg of oil equivalent) 392 397 1 IBRD.0 I rlDA.810 Short-term 1,143 (US$ rniiiions) iMF 158 IBRD Total debt outstanding and disbursed 9 Disbursements 0 Principal repayments 8 Interest payments 1 IDA Total debt OUtStandingand disbursed 3,t30 Disbursaments 204 Prlvate Sector Development 2000 2008 Total debt service 47 Time requiredto start a business (days) 34 IFC (fiscal year) Cost to start a business (%ofGNIpercapita) 32.7 Total disbursed and outstanding partfolio 24 Time requiredto register property(days) 34 of WIich IFC own account 24 Disbursements for IFC own account 0 Ranked as a majorconstraint to business 2000 2007 Portfolio sales,prepaymentsand (%of managers surveyed WIo agreed) repayments for IFC own account 7 n.a. n.a. MIGA Qross exposure 15 Stock market capitalization(%ofGDP) T3.1 15.6 Newguarantees 0 0 Bank capitalto asset ratio (%) I18 R.4 Note Figures in italics are for years otherthanthose specified 2007 data are preliminary 9/24/08 j indicates data are not available -indicates observationis not applicable ~ Development~EconomicsDavelopmen!pataGro-Lp(DECDG) -__ - _ _-___ -- -- __ I_ I_ I I 95 GHANA M A U R I T A N I A TRANSPORT SECTOR PROJECT M A L I DUR ROADS NIGER WORLD BANK FUNDED ROAD BURKINA FASO EUROPEAN COMMISSION FUNDED ROAD NATIONAL CAPITAL Area of map N13 NATIONAL ROADS REGIONAL HEADQUARTERS GUINEA BENIN IR10 INTER-REGIONAL ROADS DISTRICT AND SUB-DISTRICT HEADQUARTERS TOGO NIGERIA REGIONAL ROADS OTHER MAIN TOWNS C Ô T E GHANA D ' I V O I R E 07 ROAD SECTION IDENTIFICATION REGION BOUNDARIES LIBERIA RAILROADS INTERNATIONAL BOUNDARIES Accra PORTS G u l f o f G u i n e a Red White 3° 2° 1° Volta Volta 0° 1° B U R K I N A F A S O 11 Kulungugu Mogonori Mogonori N2 Bawku Bawku N11 11° 01 01 13 10 Kamsorio Kamsorio Hamale Gbal 11° Gwallu Gwallu N16 Paga Paga N2 Tumu Pina Kayoro Kayor N10 02 Zebilla Navrongo Navrongo Bongo N12 12 12 N11 N13 N10 Zuarungu Zuarungu Binaba 03 N13 02 03 Jeffisi fisi REGION 01 Bolgatanga Bolgatanga Datoko Datok GHANA N13 Sandema Lawra Lawr N13 Hian Nakpanduri Nakpanduri Naga Naga Tongo 02 EAST N18 Sisili IR10 Jirapa IR11 11 Sabuli UPPER 11 Gambaga Gambaga 01 N12 UPPER WEST 02 Fumbisi N10 IR11 Nadawli Nadawli REGION Gbangdaa IR11 04 Walewale wale 01 N18 05 02 IR11 IR11 N2 Yawgu Ya gu N12 10 IR11 01 03 09 IR10 Nasia Nasia Wenchiki N14 01 Felin 10 07 02 Cherepon Cherepon B E N I N Kulpawn N10 Dorimon Dorimon IR11 Wa Wa Mankarigu arigu WhiteJanga Janga 10° IR11 N14 10° 06 Karaga Karaga Tanina Bulenga Diari Diari Gushiegu 01 Wechiau Volta 10 N10 N2 Yepalsi 09 Saboba Nawuni Nawuni Savelugu N12 09 Tijo Tijo Tuna N2 Tolon 08 Yendi 01 IR10 Tamale Nyankpala Nyankpala Sambu Sawla Sawla Zabzugu Larabanga abanga NORTHERN REGION N10 N9 N2 Sabari Sabari Chache N7 Busunu 09 01 Gbung 02 07 N7 Damongo Daka Oti Bole 01 Fufulsu Sorri Sorri Juo Nakpali Nakpali 9° Seripe Seripe Mankpan 9° Wangasi-Turu uru N2 08 Bimbila IR4 N12 06 06 Woribogu oribogu Black Mpana Nakpayili Nakpa C Ô T E Volta 06 D ´ I V O I R E Gbulumpe Gbulumpe Salaga Salaga Kimabui N2 Jombo T O G O Chibrungo Chibrungo N10 IR4 Kpandae 05 Teselima 08 Makongo Nkwanta Nkwanta Bui Zongo-Markyeri Zongo-Markyeri New Longoro Ne Longoro Yeji 03 IR9 IR9 Kintampo Kintampo 01 IR4 Buafri Buafri IR9 04 02 Dambai Brewaniase Bre 8° IR9 IR9 03 Ohiamankyene 05 8° 04 N12 Abease N2 Nsawkaw Nsawkaw Jema BRONG-AHAFO IR4 Dodo 07 Kwadwokurom Kwadwokurom 07 03 Kete-Krachi ete-Kr 05 Wenchi N10 R E G I O N Atebubu Ahamasu IR9 Lake Asukawkaw awk 09 Tuobodum Kwame Danso Kwame New Drobo Ne Drobo Pru Baantama Baantama IR7 08 REGION IR4 Techiman IR7 Nkoranza Kotuo Namasua Namasua 02 Sene Volta Kadjebi Kadjebi 06 N12 Berekum Berekum 08 IR7 Hiawoanwu Hiaw 09 N6 Jasikan N6 Sunyani Sunyani Ejura IR7 Kute Kut 10 Akontaanim ontaanim 07 06 Teekyereere Baaglo Baaglo N6 N12 N6 Dormaa-Ahenkro Dormaa-Ahenkro Afram 05 N10 IR4 N2 IR8 06 04 07 Abofoo bofoo 02 IR7 05 Gambia No.2 No.2 Bekyem 05 Mampong Mampong Obosum 04 Hohoe Kwadwonkromkurom Kwadwonkromkurom Kenyasi enyasi IR7 02 Odonkawkrom awkrom Golokuati Golokuati 7° No.1 No. ASHANTI REGION IR7 Kwakwanya Kwakwanya Tepa Kpandu IR7 7° N6 Ofinso Ofinso Agona Agona 01 Siekabenkuram abenkur 06 Barekese Barek Dayi Effiduase fiduase EASTERN Agogo Agogo Kpedze Yamatwa amatwa 04 Goaso Mankranso N10 05 IR4 Shia N12 01 IR8 Ejisu Anfoeta Anfoeta Kumasi Aduamoa Aduamoa Kwahu Tafo Kwahu afo New-Debiso Ne 04 Nkawie awie 04 N6 05 N2 Juaso Obo Ho Adwumadiem Adwumadiem Nyinahin 02 IR3 N10 N5 03 IR5 Manso Konongo Mpraeso 03 IR5 01 Boso 02 04 IR3 Dominase Kpetoe Kpetoe Ateso IR5 Nkwanta Nkwanta Amua REGION N5 Benchema Ofin Kuntanase untanase 03 04 IR3 IR3 Abutia- Asesewa wa Buaka Bibiani IR2 Obogu N6 01 Bekwai Bekwai Akoasi Begoro Begoro 02 Kloe IR8 IR3 Krokosue Krok Juabeso Ntronan Ntronan 05 03 Sekasua 03 Sefwi Anhwiaso N10 IR3 IR3 N2 03 Abirem birem Awaaso Asawinso Asawinso Bodwesango 01 02 Amoya Shi 05 Obuasi IR3 Ajuafo Birim Oterkpolu Oterkpolu Senchi Wute Wut N12 Bodi Sefwi Diaso IR3 Kibi 04 Dadeeso 07 N8 N4 N3 VOLTA Bekwai Bekwai 06 Akokoaso N3 Odumasi Krobo Krobo 01 03 IR8 02 N10 02 Kade Kade 02 Adidome Adidome Akatsi Akwantonbra Akwantonbr 01 Jabo Adansi Adansi New Adubiase Ne Adubiase Koforidua oforidua Somanya Somanya N1 Aflao 02 Akrofuom Akrofuom 01 Suhum 01 03 Battor Battor N1 02 6° W E S T E R N IR2 03 N4 N2 Anyako Anyak Denu 6° Dwokwaa okwaa IR8 Edubia 02 Akropong Akropong Sogakofe Sogakofe Ayamfuri amfuri Dunkwa Dunkwa GwaR E A T E03 R N6 R E G I O N Asaman Oda Akim Asamankese 01 N4 Ket Keta Asankranguaa Swedru edru Achiasi Ac 02 Dodowa N1 Anyanui Anyanui Enchi 01 02 IR6 A C C R AAkplabanya IR2 Adaiso Adaiso IR1 N2 IR1 02 Atobiase N10 Pra Foso Foso Akoroso oroso 02 Nsawam Nsawam Akplabanya N6 N4 01 Ada Ada N12 Ataase Agyempama Agyempama 01 Amasaman 01 01 IR2 N1 Prampram ampr 02 N8 IR1 01 Esikuma Esikuma 05 Samreboe Samreboe Twifo Praso wifo Kwanyaku Kwanyaku 04 Tema Tano Bogoso Insu C E N T R A L 03 N1 Huitimbo IR2 Swedru edru 06 ACCRA Prestea Prestea 01 N10 Tumfokuro umfokuro Bortianor N12 Huni 01 07 IR6 N1 Valley R E G I O N Ajumaku Ajumaku 01 Bandae Esaaman 01 Dunkwa Dunkwa Senya Bereku Senya Bereku This map was produced by the Elubo Tarkwa Tarkw 01 Winneba Dwokwa okwaN8 N1 Apam Map Design Unit of The World Bank. Nsuta Nsuta N1 12 Heman Abrem Abrem 08 Akra The boundaries, colors,denominations and Alenda Ankobra Daboasi 09 Saltpond anyother information shownon this map IR6 01 Jewi Whorf N1 do not imply, on the part of The World 10 Cape Coast Coast 5° Half Assini Ayiem N1 Elmina Bank Group, any judgment on the legal Apataim status of any territory,or any endorsement 5° Eikwe Sekondi-Takoradi G u l f o f G u i n e a N1 or acceptance of such boundaries. Agona Agona Axim 11 Takoradi Junction IBRD APRIL Prince´s Prince´s 0 50 100 150 Town Town Akwidaa 36913 2009 KILOMETERS 3° 2° 1° 0° 1°