Document of The World Bank FOR OFFICIAL USE ONLY CR Z/O sC -ET Report No. 8087-ET STAFF APPRAISAL REPORT ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT FEBRUARY 22, 1989 Infrastructure Operations Division Eastern Africa Department ibis dowment has a resudcted ditdbutio and may be usd by roedpients only hI the performance of their offidcl duties. It couteus may not otherwise be dilosed wi Wodd Bank authouization. ETHIOPIA MAR=ET TOWNS DEVELOPMENT PROJECT CURRINCY EQUIVALENTS Currency Unit - Ethiopian Birr Birr 1.00 US$ 0.483 US$ 1.00 Birr 2.07 SDR 1.00 = US$ 1.2834 US$ 1.00 = SDR 0.7792 WEIGHTS AND MEASURES 1 cubic meter (m3) = 220 Imperial gallons, 264..2 US gallons or 1,000 liters 1 meter (m) - 3.28 feet or 39.37 inches 1 millimeter (ma) = 0.39 inches 1 kilometer (km) = 0.62 miles 1 liter per capita per day = 1 l.p.c.d. ABBREVIATIONS AND ACRONYMS AIDB - Agricultural and Industrial Development Bank ASC - Audit Services Corporation CBE - Commercial Bank of Ethiopia CPA - Central Personnel Agency EEC - European Economic Commission ERR - Economic Rate of Return GOE - Government of Ethiopia HASIDA - Handicrafts and Small Industry Development Agency HSB - Housing and Savings Bank ICB - International Competitive Bidding IDA - International Development Association LCB - Local Competitive Bidding MUDS - Ministry of Urban Development and Housing NUPI - National Urban Planning Institute PADEP - Peasant Agricultural Development Program PIU - Project Implementation Unit SSE - Small-Scale Enterprise UDPO - Urban Development Project Office WRC - Water Resources Commission WSSA - Nater Supply and Sewerage Authority WSSSU - Water Supply and Sewerage Service Unit FISCAL YEAR July IL to June 30 FOR OMCIAL USE ONLY ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT TABLE OF CONTENTS Page CREDIT AND PROJECT SUMMARY if-:i I. SECTOR BACKGROUND A. Country Context . . . . . . . . . . B. Urbanization, Economic Growth and Government Decentralization . . . . . . . . . . . . . . . . .... 1 C. Infrastructure Deficiencies and Priority 'feeds in Project Towns . . . . . . . . . . . . . . . . * . 3 D. Housing Conditions and Constraints . . . . . . . . . . . . . 4 E. Financial Sector Strategy . . . . . . . . . . . . . . . . . 5 F. Income and Employment Situation . . . . . . . . . . . . . . 6 G. Bank Strategy, Past Experience and Project Rationale . . . . 7 II. THE PROJECT A. Project Origin and Formulation . . . . . . . . . . . . . . . 9 B. Project Objectives . . . . . . . . . . . . . .. . .. . 9 C. Project Description . . . . . . . . . . . . . . . . . . . . 10 D. Cost Estimates . . . . .... ... 16 E. Financial Arrangements ........ . 19 F. Implementation Arrangements .. . . .... . 22 1. s ...24 < prG-re^;t~~~~. . , . . . . . . . .. . ................... . 24 H. Disbursements . . . . . . . . . . . . . . . . . . . . 26 I. Accounts and Audits .. . . . . . . . . . . . . . . . . . . . 27 J. Enzironmental Impact . . . . . . . . . . . . . . . . 28 III. IMPLEMENTING AGENCIES A. Ministry of Urban Development and Housing (MUDH) . . . . . . 29 B. Municipalities . . . . . . . . . . . . . . . . . . . . . . . 29 C. Water Supply and Sewerage Authority (WSSA) . . . . . . . . . 33 D. Housing and Savings Bank (HSB) . . . . . . . . . . . . . . . 39 E. Agricultural and industrial Development Bank (AIDB) . . . . . 44 F. Handicrafts and Samll Industry Development Agency (HASIDA) . *...... . . . . . . . . . . . . . . . 45 IV. FINANCIAL ANALYSIS A. Cost Recovery . . . . . . . . . . . . . . . . . . 48 B. Affordability . . . . . . . . . .49 This report is based on the findings of an Appraisal Mission consisting of Ms. C. Gochenour (Task Manager/Financial Analyst), Messrs. B. Almassy (Water Supply Engineer), A. Banerjee (Water Supply Financial Analyst), C. Banes (Municipal Engineer/Consultant), H. Norris (Financial Analyst/ Consultant), R. Blayney (Employment Specialist/Consultant) and H. Evans (Regional PlannerlEconomistlConsultant), who visited Ethiopia in June/July 1989. 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. V. PROJECT TUSTIFICATION AND RISKS A. Economic Justification . . . . . . . . . . . . . . . . . . . 51 B. Project Impact on the Urban Poverty Population . . . . . . . 54 C. Project Impact on Women . . . . . . . . , . . . . . . . . . . 54 D. Employment and Income Effects . . . . . . . . . . . . . . . . 55 E. Project Risks . ...... ........ . 56 VI. AGREEHENTS REACHED AND RECOHMENDATION . . . . . . . . . . . . . 58 ANNEXES 1 - Crit6ria for Selection of Project Towns 2 - Description of Project Towns 3 - Sites and Services Component 4 - Municipal Infrastructure Component 5 - Water Supply Component 6 - Employment/Income Enhancement Component 7 - Institutional Support Component 8 - Detailed Cost Estimates 9 - Project Implementation Schedule 10 - Estimated Schedule of Disbursements 11 - Municipal Financial Analysis 12 - Water Supply And Sewerage Authority Financial Analysis 13 - Housing and Savings Bank Financial Analysis 14 - Economic Analysis 15 - Household Income Distribution by Market Towns, 1988 CHARTS 1 - Organization of MKvd 2 - Organization of UDPO 3 - Typical Municipal Organization Structure 4 - Organization of WSSA Headquarters 5 - Organization of USSA Regional Operations 6 - Organization of WSSA Water Supply Service Units 7 - Organization of HSB 8 - Organization of AIDB 9 - Organization of HASIDA MAP (IBRD 21835) - Market Towns Development Project EThUIA 11W i V_ EV.PN Ps Credit. and Piiect Simary Borrows.: The Governent of Ethlopia (GME). m tl _ ntins A=ncloo *nd B_ n _e__ri_s_ Ministry of Urban Develop mt and Housing (MUDH) Project Municipalitleo Waer Supply adS e AuthoriW M) Housing and Savings Bank Q(S8) Agricultural and Industrial Development Bank (AIDS) Handicraft. and Small Industry Dovelot-snt Agency (KASIDA). Credit Amount: SDR 81.4 million (USS 40.2 million equivalent). Credit Tomr: Standard IDA terms with a maturity of 40 years. On-Lending Terms: As loans to: (a) project municipalities at 1.51 interest rate; (b) WSSA at 1.6X Interest rate; (c) HSB at 1.6X interest rate; all to be repaid over 26 years Including 6 year; of grace; and (d) AIDB at 2X interest rate, to be repaid over 1C y rso Including 6 years of grace. Project Descrioption: The Project would Improve basic Infrastructure and living conditions in project towns, strengthen the capacity of MUOH to assist municipalitieos In Improving their financial performance and in carrying out their developpmnt programr provide assistance to urban service agoences to carry out their activities more efficiently, encourage micro- and mll-scale enterpries In project towns to expand employment opportunities and enhance incom, introduce an experimental income enhancement/ontreprensurahip development program for women, and promote tho adoption of sound cost recovery policelo and practices. The Project Includes support for (a) sites and services and housing development In six phase ono projoct towns; (b) Improvements to municipal lnfrastructuro and agricultural markets and provision of essontial municipal vehiclos and equipmnt in phase one project towns, and tmprovoemnts to market and related infrostrueture in phase two project towns (c) major extensions of water supply systems In two phase one project towns and rehabilitatlon works in four phase one project towns; (d) credit lines and technical assistance to promote micro- and sa ll-scale enterprise developmnt In phase one and ph-se two project towns and (e) Institutional support programs to strengthen management and mointenance systems, and assistance for project "mnagement and Implementation, as appropriate, for project agencies. Prolect Risks: Project risks Include MUWOHs and project municipalities' Implementation copacitios, uncertainty regarding municipalitiesl abilities to achieve adequate revenue Improvements In order to repay projoct loans, uncertainty regarding water tariff Increases, and constraints affecting the establishment of new micro- and small-scale enterprises and development of existing ones. To minimize these risks, detaled implementation and staffing arrangements have been agrod in advance with all concerned agencies, a unit would be established within MUDH to assist with Implementation of municipal revenue Improvement measures, the requirements for water tariff Increases would be closely monitored and project assistance should help ensure that viable SSE projects and entrepreneurs are supported. Estimated Costs Local Foreign Total -(US$ million)- Land/compensation 0.1 - 0.1 On-site infrastnructure 0.5 0.5 1.0 Housing deveiopmen.t 4.8 1.6 6.4 Municipal infrastructure 2.6 2.8 5.4 Municipal vehicleelequipment 0.3 1.0 1.3 Water supply 7.0 9.1 16.1 Employment support 2.8 4.2 7.0 Institutional support 2.5 3.6 6.1 Base Cost 20.6 22.8 43.4 Physical contingencies 1.5 1.6 3.1 Price contingencies 2.9 3.5 6.4 Total Project Cost a/ 25.0 27.9 52.9 Financing Plan: IDA 12.3 27.9 40.2 GOl: 7-5 - 7.5 Project Agencies 5.2 - 5.2 Total 25.0 27.9 52.9 Estimated Disbursements: Bank FY 1991 1992 1993 1994 1995 1996 1997 -------------------- (US$ million)------------------------- Annual 1.2 4.4 11.2 12 0 7.2 3.6 0.6 Cummulative 1<2 5.6 16.8 28.8 36.0 39.6 40.2 Economic Rate of Return: 132 at Includes taxes and duties estimated at US$4.9 million equivalent. ETHIOPIA MARfT TOWS DEELOPHET PROJECT I. SECTOR BACKGROUND A. Country Context 1.01 Ethiopia is one of the poorest countries in the world. Its per capita income was only $120 in 1987. About 902 of the total population of 47 million is rural, the majority of which derives its livelihood from settled peasant farming in the highlands. Since the Revolution in 1974, the average rate of real GDP growth has been only 21 per annum, and per capita income has fallen by over 0.71 per annum. After vigorous growth in the late 1970s, the economy has stagnated in the 1980s. Macroeconomic performance has been dominated by droughts (in 1983/84, 1984/85 and 1987/88), the effects of civil war, and a distorted pricing and marketing system which inhibited production. The effects of several years of virtual economic stagnation have been falling standards of living, decreasing real incomes and rising open unemployment. The available evidence also points to sharply falling per capita food availability. While nutritional and other health indicators to confirm the impression of steadily growing impoverishment are sparse, Ethiopian mortality rates compare unfavorably with those of other low income African countries. Education levels are low, with secondary schooling the privilege of a small minority of children. 1.02 The Bank's overaii objective is to assist Ethiopia in shifting its economy from the present cycle of stagnation to a path of long-term sustainable growth. This will require substantial policy and administrative changes freeing up the economy, adjusting the exchange rate, domestic prices, trade policies and producer incentives, and creating a radically improved environment for the private sector. The preferred means for carrying out this strategy is to assist the Government of Ethiopia (GOE) to pursue these comprehensive adjustment policies and to support the reform process with adjustment lending. In the absence of agreement on a macroeconomic adjustment program at this time, the Bank will continue to provide a modest core program of lending to address Ethiopia's deep poverty, manifest food insecurity, environmental fragility and low level of human resource development. This will be pursued through lending for human resource and institutional development, environmental protection, the strengthening of essential roads, and urban infrastructure. The proposed project meets a combination of the objectives to alleviate urban poverty and environmental/health constraints, promote opportunities for women and improve some essential infrastructure, while supporting th- development of appropriate urban policies. B. Urbanization, Economic Growth, and Government Decentralization 1.03 In Ethiopia today, the lack of adequate infrastructure and services in urban centers is constrainir.g economic growth and handicapping agriculture. According to the only census in 1984, less than 10? of the population in Ethiopia lives in urban areas, which is well below the level of urbanization of many other comparable low-income African countries. In a country with a total population of more than 47 million, there is only one city with more than one million inhabitants, one city with a population between 100,000 and one million, and only 24 towns between 20,000 and 100,000. Also unusual for the African continent, in Ethiopia the proportioi. of females in the urban population was nearly 56? in 1984. The average rate of growth of the population of the larger urban centers is estimated to have been about 4.5Z per year recently, which is above the national growth rate of about 2.9Z -- testament to the growing importance of urban economic activity. The urban areas, however, are facing acute shortages of shelter and services. In the cities and towns of the Showa and Arsi regions, the most densely populated regions, about 75? of househol.ds are typically connected to electricity, but only about 15? to potable water systems, and more than 50? lack any form of toilet facilities. 1.04 The lack of urban centers, and poor access between towns and their rural hinterlands, hobbles the growth of both agriculture and urban activities. Agriculture contributes between -41 and 502 of gross domestic product and about 852 of the value of exports, and occupies about 80? of the working population, most of whom are subsistence farmers. Since productivity is low, and total output is insufficient to feed the population, food production is a primary concern of the government. Farmers face difficulties in acquiring needed inputs, and in getting their goods to market. Produce traders find it unprofitable to collect small quantities from many dispcrsed producers. Urban businesses face restricted local markets, in part because they are inaccessible to much of the local population, and in part because farm incomes are low. 1.05 In light of these circumstances, the GOE is attempting to develop cities and towns throughout the country The objectives are to stimulate the growth and spatial diffusion of manufacturing, commerce and services, and the attendant creation of non-farm employment opportunities; to bring urban goods and services closer to the predominantly rural population; and to expand markets for rural produce, thereby indirectly raising agricultural productivity. This is to be achieved by expanding the provision of housing, physical infrastructure and social services, by linking towns more directly with their rural hinterlands, and by improving the fiscal resources and management capability of the central associations (municipalities) responsible for urban areas. A first phase program of support for eight priority towns 1 has been identified for inclusion under the proposed Project to be followed by a second phase program addressing the needs of at least eight additional towns 2 providing a balanced national coverage. 1.06 The proposed Project complements the Government's Peasant Agricultural Development Program (PADEP) and associated policy reforms, which aim to increase foodgrain produiction, productivity and incomes in the 1/ Assela, Shashemane, Ziway, Goba-Robe, Arsi Negele, Ambo, Mizan Teferi and Wollisso. 2/ Bahir Dar, Debre Berhan, Woldia, Asbe Teferi, Debre Tabor, Arba M4inch Bedele and Awassa. peasant sector. The market towns included in the Project are located in the main areas of agricultural potential. The European Economic Commission (EEC) and the Italian Government are financing various PADEP programs which include, among other things, provision for a number of rural roads which will improve access within the hinterlands of the eight market towns included in the first phase of this Project. 1.07 This proposed program of support is also in accordance with chapter 14 of the GOE's Three-Year Plan for 1986-89 which spells out a number of objectives for urban development, among them: (a) to develop better basic infrastructure and to devise better ways of providing essential services and (b) to devise policy and administrative guidelines for national investments to take into consideration the proper development of a hierarchy of regional towns, thus ensuring systematic growth of urban centers on the basis of regional development priorities. 1.08 Until recently, however, the GOE's capacity to identify regional development priorities and to formulate regional plans has been limited. Coordination of sectoral plans between Ministries onlv occurs at the highest level of the government, within the National Committee for Central Planning. Below the national level, for a variety of reasons, there has been little effective coordination of sectoral programs in the rural areas, and even less between rural and urban development. 1.09 Although the details are still being developed, plans to reorganize government administration will presumably remedy this situation to some extent, since newly defined regional councils have specifically been assigned the task of urawing up socio-economic development plans and implementing them once they have been approved by the National Shengo. In addition, the GOE also issued in June 1987 three proclamations for the preparation and implementation if urban and regional plans and the establishment of a National Urban Planning Institute (NUPI). 1.10 NUPI's responsibilities include carry,ing out research and preparing plans for regional urbanization, metropolitan areas and urban centers. To date, NUPI, and its forerunner in the Ministry of Urban Development and Housing (MUDH), has prepared a plan for the Addis Ababa metropolitan area and regional urban strategies for Showa and Arsi. It is currently at work on master plans for three munikcipalities, will soon begin studies in a third region and expects to provide consulting services to other municipalities on demand as resources permit. In line with the objectives outlined above, NUPI's proposals for regional urban strategies advocate the integrated development of urban and rural areas, and stress the strengthening of links between agriculture and non-farm activities. C. Infrastructure Deficiencies and Priority Needs in Project Towns 1.11 Inhabitants of the eight phase one project towns generally enjoy very modest infrastructure service levels. Most towns are located on major trunk routes and thus the main road through the towns are paved. Few other paved roads exist, however, and normally only those linking strategic facilities or important commercial centers are graveled. Drainage, where this exists, normally consists of unlined channels. - 4 - 1.12 About 502 of the households in most towns have pit latrines, the most common formal mode of excreta disposal. and the remainder share facilities or use open ground or watercourses. Emptying of latr-.es is a problem in most towns owing to the absence of desludging vehicles (vacuum trucks). Some towns operate a periodic refuse collection service, but many households either bury or burn their own garbage or dump it on an open ground or in drainage channels or watercourses. 1.;3 The economic activity of most towns revolves around the agricultural markets, but most are nc more than open areas of land lacking surfacing, adequate sanitation, garbage containerization and collection facilities, public water fountains, drainage and dry access. Few formal market stalls exist at the sites. 1.14 Access to power supply varies from town to town as does water supply, depending on whether there are large commercial users of power in or near the town and whether the town has in recent years benefited from a new or upgraded water supply scheme. Presently, about nalf of project towns are facing critical water shortages and require major expansion of their water supply systems to be able to provide for the currently unmet demands and expected future growth. 1.15 In addition to improvements to water supply, the priority needs; of the project towns are those which would focus on improving conditions to, in and around the agricultural markets. This would enable the markets to operate more efficiently, in turn benefiting both traders and purchasers alike. Improved access and drainage, public toilet blocks, public water fountains, refuse bins, market surfacing and drainage, and limiteu numbers of market stalls would generally address these needs. In addition, to improve the provision of services for the markets as well as the towr residents, the towns would each need additional basic plant and equipment (e.g. a general purpose truck, a vacuum tanker, small plant and tools) to improve maintenance and services. D. Housing Conditions and Constraints 1.16 Urban towns are experiencing acute housing shortages. Between 1984 and 1988, housing construction failed to keep pace with the growth of households such that project towns are experiencing varying shortages of housing units.3 The lack of housing of appropriate standards has ribsulted in a reluctance of government development office-s to move to rural towns and has contributed to government workers' contracts being concluded in a year or less despite longer original commitments and others not being taken up at all. Hotel accommodations are also in short supply owing to the majority of rooms being taken up by long-term residents, many of whom are 31 In Assela the shortage is estimated at about 950 units, in Arsi Negele about 315 units, in Ambo about 220 units, in Mizan Teferi about 100 units, in Shashemane about 670 units, in Wolisso about 400 units and in Goba-Robe about 900 units. Housing construction in Zivay during 1984-88 is estimated to have catered adequately to housing demand. government employees. The housing shortages have serious implications for attaining the objective of stimulating the towns' economies. In addition, the housing shortages have contributed to increased crowding ard the worsening of housing conditions, and have particularly affected the lower- income groups. Expansion of housing for the government sector is particularly important in order to locate officers whose tasks are related to development programs. 1.17 The major constraint to increasing the supply and maintenance of housing has been the shortage of materials production, particularly wood, cement and glass. Disruptions in the production of local materials by the state enterprises are caused in part by improper maintenance of facilities which lead to significant delays. A4ministrative bottlenecks and insufficient means of transportation accentuate the problem. Dependency on fc-sign imports of certain components (e.g. iron sheets, reinforcement steel, metal frames) and the limited availability of foreign ext.1hange add to the delays. 1.18 Housing policies also act as a severe constraint on housing production and have the effect of placing the primary responsibility tor housing provision with the Government. Whereas houses may be built by government organizations, cooperatives or private individuals, government programs are small relative to needs, and the time required to obtain the legal clearances for forming cooperatives and obtainiing a plot of land slows down private house construction. Furthermore, large-scale private housing construction through real estate developers and private rental of housing are prohibited, although co-dwelling has been officially sanctioned since 1986. gTne open market exchange of houses is also not parmUtted. Houses can be sold only to co-owners or to the Government. Sale prices of houses are established by the Government and are based on specifications and bills of quantities as well as the current cost of construction and house location. This formula results in sale prices of houses traded (which are relatively few) to be generally far below what could be obtained through private sale. In many countries, families trade up to improve their living conditions as incomes grow, thereby freeing up their smaller houses for others. However, in Ethiopia there is no incentivre for families to trade up, since prcofits on sales are effectively eliminated, and house size (up to 70 m2) and plot size (up to 250 m2) restrictions limit the improvements which could be obtained by moving. While it is recognized that housing policy haa evolved largely in response to the severe constraint of building materials supply, should the bottlenecks in materials production be reduced, then adjustments of policies would be appropriate to encourage greater housing construction by the private sector. E. Financial Sector Strategy 1.19 The Ethiopian financial system is very underdeveloped and contains the typical features of a socialist financial system. It is characterized by a lack of competition, public ownership and a lack of managerial autonomy among formal institutions, a high and uneconomic level of institutional specialization, widespread subsidization and inappropriate pricing, and poor loan recovery. IDA has recently opened a dialogue with the Government on financial sector issues. A series of issues papers are - 6 - to be prepared and discussed with the Government, and will cover the following areas: savings mobilization; regulatory framework; housing financet and measures to broaden the availability of financial instruments. These papers are expected to be completed in early 1990. IDA's current strategy is to agree with tshe Government on a series of actions intended to move the system towards greater flexibility in institutional decision making, introducing elements of competition, correcting pricing distortions, and ensuring the sustainability of public financial institutions. Agreement will also be reache with the Government during the first-half of 1990 on areas for further asilysis, including the initiation of collaborative work on a financial sector review. F. Income and Employment Situation 1.20 The extent of poverty and unemployment in Ethiopia is reaching alarming proportions. Household incomes are extremely low. Based on a household income survey in Addis Ababa in 1984, the medium household income was about Birr 150 or US$72 per month, and current (1987) estimates indicate that about 652 of households in Addis Ababa live below theabsolute urban poverty threshold of Birr 238 per month. 4 In secondary towns. household incomes are typically lower, and in rural areas estimates of monetary incomes are only Birr 250-300 annually. The poorest half of the population earns only 202 of total income, whereas the top 102 of households earns some 402 of total income. On the average, nearly 802 of total household income is spent on basic food supplies and fuel alone. Regarding unemployment, in 1978 the average estimated urban unemployment rate for men was 12Z with women registering just under 312 and is thought to be ezen hiher ttoday. Of tho registered urbar. unemployed, over 402 are youth, aged 13-24 and more than 602 are female. 1.21 One of the striking features of Ethiopian society is the preponderance of women in urban areas and the severity of poverty suffered by urban women. In 1984, women constituted about 56Z of tne total urban population but represented only about 42 of the economically active population. Although women play a crucial role in the family and community life in Ethiopia, they are not sufficiently represented in formal sector economic activities. As an example, less than 10X of the country's cooperatives are women.' cooperatives. The gender ratios manifest greatest divergence for the age group 15-24, comprised of large numbers of now single women who were forced into marriage at ages as early as 11 or 12, flowing to the city with their dependent children. These urban women search for jobs largely denied to them and large numbers find ref;uge in prostitution as a result. The few urban working women are largely found in the informal sector and typically include petty traders, market vendors and food processing, micro- and small-scale enterpreneurs. 4/ Using 1982 prices and a food basket based on 952 of the daily caloric requirements established by the Ethiopian Nutrition Institute, the subsistence income required by an average family of 5.5 persons was estimated to be Birr 124 per month, including Birr 70 for food and Birr 54 for non-food items. This was converted to 1987 prices using the Retail Price Index for the items in the original consumption basket. 1.22 These grim statistics are the result of a crisis contributed to by inadequate resource allocation to small-scale enterprises (SSEs) and cooperatives; inappropriate state controls and regulation over private enterprise generally, and in particular over SSEs, including cooperatives and the informal sector; and continuing weaknesses in government services in support of SSEs and cooperatives. As an example, the formal, private sector, small- and medium-scale manufacturing industry is currently operating at only about 20-30Z of production capacity, largely because of the inability of these SSEs to obtain the necessary raw materials and foreign exchange. Past GOE programs for stimulating production have concentrated on the promotion of state-owned enterprises and medium to large-scale manufacturing, but these programs have been unsuccessful in reversing the trend of growing unemployment in urban areas. 1.23 To address this crisis mentioned above, (VOE priority goals currently being discussed for inclusion under the next five-year plan are: (a) to provide employment for the urban unemployed, (b) to upgrade existing and develop new manufacturing and service enterprise productivity, while maximizing the use of local raw materials, and (c) to increase household incomes and benefits among the very poor. Support for SSEs and the informal sector is considered an important part of this strategy, given the crucial function they perform in supplying a wide and heterogeneous range of goods and services to both rural and urban populations. Continuation of this supply is clearly necessary to the success of current attempts to encourage agricultural producers to expand output, since, in the long run, the incomes derived from agricultural surpluses will be expanded only if those incomes can be used to purchase aiditional goods and services. Equally, attempts to expand long-run employment opportunities in any given urban area depend to a large extent on continued growth of incomes in its rural hinterland and the availability in the urban areas of such goods and services as are necessary to ensure that the town is attractive both as a location of economic activity and as a place of residence. Furthermore, because women throughout Africa dominate in the non-farm, cottage industry subsector of the economy and these activities tend to grow most rapidly as the rural non-farm economy develops, women in Ethiopia have the potential to play a strong role in increasing rural and urban household incomes as well as equity in its distribution. In support of these goals, the GOE has recently taken steps to enact legislation to relax some of the inhibiting regulations for SSEs. The proposed Project would support GOE's priority goals through promotion, credit and technical assistance for SSEs including cooperatives and the informal or cottage industry sector, focussing on women-owned enterprises. G. Bank Strategy, Past Experience and Project Rationale 1.24 Since lending to Ethiopia for urban development activities commenced in the early 19809, IDA's assistance has been geared to helping the GOE improve the delivery of serviced land and housing while at the same time easing the burden on public finances. Another focus of the strategy has been to review current policies and practices on maintenance of urban housing and infrastructure with a view to ultimately reducing rent subsidies and improving the efficiency of public resource utilization. Institutional development of existing urban agencies has been a key element of this strategy. The First Urban Development Project (Credit 1366-ET, 1983) financed a demonstration of lower-cost, replicable approaches to housing, which included in Addis Ababa the development of serviced sites for self-help house construction for families above the poverty threshold and upgrading of environmental conditions and infrastructure for those below. Technical assistance provided under the Project also helped to strengthen the Housing and Savings Bank (HSB) through management support and training assistance, and project studies helped to identify and begin to address key issues associated with the maintenance of urban rental housing schemes and road systems in Addis Ababa. A further study is currently investigating alternatives for improving the ban transportation system in Addis Ababa. While this Project is scheduleL Lor completion by mid-1990, many of the project objectives have already been met, but lack of an approved in.plementation u'an to-date for divestiture of the nationalized housing stock in project areas has frustrated the objective of encouraging individual households to improve and maintain the deteriorating houses. However, an implementation plan is currently under consideration by Government and is expected to be implemented shortly. Over the longer term, IDA will work with GOE to find ways to encourage greater private sector participation in the housing sector to further reduce the burden on public finances. 1.25 The Bank's involvement in the water supply sector began in the early 1970s with a loan to the Addis Ababa Water Supply and Sewerage Authority (Loan 818-ET, 1972) for improvements to its water supply system, which was successfully implemented. Since the early 1980s, the Bank has continued its involvement through a UNDP/World Bank water program aimed at supporting the development of investment plans and strategies for the sector, including investment priorities for urban and rural, water and sanitation systems. Currently, on-going technical assistance under this program is reviewing, among other things, the organization and management requirements needed to support the development of the Water Supply and Sewerage Authority (WSSA), the key institution in providing water supplies in urban areas outside of Addis Ababa. 1.26 The proposed Project would build upon the experience of the previous projects through further support of the development of appropriate urban policies and investment programs under the present condition of severe resource constraints as well as provide continued support for the development of urban institutions involved in the delivery of basic services. In line with GOE's objectives of strengthening the urban system, the Project would include towns outside of Addis Ababa in other regions of the country. A key feature of the Project would be assistance for government efforts to promote the development of provincial towns which serve as market and service centers in areas of agricultural productivity. This would be undertaken in order to stimulate agricultural production, to spur the growth of non-farm activities and the diffusion of manufacturing, commerce and services. The high rates of urban growth in project areas and poor health and environmental conditions necessitate the maintenance and expansion of water supply networks and sanitation facilities which would also be included under the Project. Furthermore, income enhancement ard employment generation programs supporting micro- and small-scale production and service enterprises in project towns are expected to contribute to increasing incomes and improving productivity and efficiency in the sector. II. THE PROJECT A. Project Origin and Formulation 2.01 The preparati. of a follow-on project and financing of necessary engineering s8 .dies were provided for under the First Urban Development Project. When discussions on the preparation of the proposed second urban project started between the GOE and the World Bank in early 1987, the Government indicated that it was giving higher priority to the development and implementation of regional strategies, rather than continuing the approach applied in the First Urban Development Project which was focussed solely on Addis Ababa. In preparation for this new approach, MUDH through NUPI launched various regional planning efforts from 1984 onwards to develop "Regional Strategies and Scenarios' in the Central and Southern Planning Regions and selected eight priority towns (Assela, Wollisso, Shashemane, Mizan Teferi, Goba-Robe, Arsi Negele, Ambo and Ziway) for assistance in a first phase effort which was to be expanded to include priority towns in other planning areas nationwide. This work is currently being extended to other regions of the country by NUPI. The criteria for selection of phase one project towns is included in Annex 1 and a description of phase one and phase two project towns is provided in Annex 2. 2.02 In consultation with the Bank, the GOE assigned the Ministry of Urban Development and Housing (MUDH) and NUPI the responsibility for overall preparation of the proposed Project. As a result of two Bank project identification missions in June and October 1987, an outline for the proposed Project (Development of Regional Urban Systems) was developed and the terms of reference for the necessary feasibility and engineering studies were prepared. Feasibilitv reports and detailed engineering designs for the Project have been completed. Appraisal of the Project took place in June/July 1989. 2.03 With the appointment of a new Minister of MUDH in December 1988, a reassessment of project locations was carried out. A proposal was presented to the Bank during preappraisal to include eight other high priority towns (Bahir Dar, Debre Berhan, Woldia, Asbe Teferi, Debre Tabor, Arba Minch, Bedele and Awassa) in order to provide for a more b;alanced national coverage under the Project. MUDH and its consultants NUPI prepared a profile of these phase two towns, outlining their key features, how their inclusion is linked to the project objectives and a preliminary review of infrastructure deficiencies. The proposed Project would provide funding for market improvements and employment generation schemes in these tomns as well as for carrying out the necessary feasibility and design studies to identify possible infrastructure improvements in these towns for consideration for IDA support under a follow-on project. B. Project Objectives 2.04 The proposed Project addresses the Government's development objectives as stated in its Three-Year Plan (1986-89) to increase the efficiency of urban towns which are market and service centers for the agricultural hinterland and promotes equity for women and the lower-income - 10 - groups. The Project also complements the Government's Peasant Agricultural Development Program (PADEP), which aims to increase foodgrain production, productivity and incomes in the peasant sector. Specifically, the Project is aimed ats (a) improving basic infrastructure and living conditions in project towns; (b) strengthen.ng the capacity of MUDH, to assist municipalities in improving their financial performance and in carrying out their development programs; (c) providing assistance to urban service agencies, to carry out their activities more efficiently; (d) encouraging micro- and small-scale enterprises in project towns to expand employment opportunities and enhance incomes; (e) introducing an experimental income enhancementlentrepreneurship development program for women, and (f) promoting the adoption of sound cost recovery policies and practices. C. Project Description 2.05 The proposed Project, which would be the first IDA-supported project of its kind in Ethiopia, includes the items listed below: (a) sites and services schemes, including construction of about 1,080 serviced plots and core and finished housing units with supporting infrastructure in six phase one project towns; (b) mu-iicipal infrastructure/vehicles, including improvements to roads and drains, new roads and culverts, improvement of markets, power line extensions to service new sites and services areas, as needed, and provision of essential municipal vehicles and equipment in phase one project towns, and improvements to markets and related infrastructure in phase two project towns; (c) water supply improvements schemes, including major extensions in two phase one project towns and rehabilitation works in four phase one project towns; (d) employment generation/income enhancement, including credit lines amounting to Birr 14.5 million (US$ 7.0 million) and technical assistance to promote micro- and small-scale enterprise development in phase one and phase two project towns; and (e) institutional support programs including consultancy services, studies, technical assistance, training, vehicles and equipment to strengthen management and maintenance systems, and assistance for project management and implementation, as appropriate, for project agencies. Sites and Services Component 2.06 The sites and services program propoced in the six phase one project towns has been designed to begin to more effectively address the acute housing shortages of the respective towns as vell as to support the Governments' efforts to stimulate economic activity by placing development workers in the towns. A detailed description of the component is included in Annex 3. The program would provide a total of 1,080 sites and services plots and core houses as follows - Ambo, 100l Assela, 300; Goba-Robe, 200; Mizan Teferi, 80; Shashemane, 200; and Wollisso, 200. Housing developments would not be provided in Arsi Negele and Zivay due to critical water shortages which, owing to funding constraints, cannot be addressed under the Project. Of these 1,080 houses, 502 would be targeted at the existing low-income residents of the towns whereby basic core, core plus 1 roon. and core plus 2 room units would be built generally through self-help groups supported by labor only contractors. The remaining 5O0 of units would be core plus 2 room finished units, implemented by town municipalities utilizing small local contractors, and which would be available for immediate occupancy through purchase by government development officers or town residents who in turn could sublet to development officers. In order to ensure that adequate housing is available for government development officers, agreement was obtained during negotiations that MUDH prepare a detailed marketing plan for sale of the finished houses as a condition of disbursement for the finished houses. 2.07 Suitably located sites have been identified in each town, layouts prepared and detailed engineering carried out. Basic access and water supply to the sites are available at all sites and only minimal extensions to the electricity supply networks are required in two towns. On-site infrastructure has been designed to basic standards with unpaved access and unlined drains, although individual water and electricity connections are proposed. Pit latrines will be provided on plots with four latrines generally sharing one pit. 2.08 Efficient land use has been achieved in the layouts although plot sizes proposed are larger than these normally provided in Addis Ababa at 160 m2, reflecting the more 'rural' nature of the towns and the reduced pressure on land availability. Three house typologies would be utilized: Type A with a basic core and utility block (kitchen and latrine) of 22.6 m2 built-up area; Type B consisting of the core plus one room and the utility block totalling 32.8m2; Type C consisting of a core plus 2 rooms plus utility block totalling 44.3 m2 without washroom and 46.04 m2 with it. A fourth house typology, Type D consisting of core plus 3 rooms and utility block totalling 61.4 m2, has also been developed to demonstrate how plots may ultimately be fully developed. Generally, layouts to accommodate additional plots have been prepared with the proposed program representing a first phase of site development. 2.09 Building costs in the project towns are higher than in Addis Ababa reflecting, inter alia, additional transportation costs of materials to the towns and the fact that in some towns black cotton soils predominate which necessitate additional earthworks and foundation treatments. - 12 - Contractor-built5 housing costs in the towns are in the order of 300Z higher than in Addis Ababa. It is thus proposed that the finished units would be implemented by the town administrations through the hiring of local, skilled labor contractors utilizing materials purchased in bulk and transported by HDDH's Urban Development Project Office (UDPO). In this way, costs would be kept to a minimum thus making units affordable to the target groups. Since loan funds for house construction would be passed on to the Housing and Savings Bank (HSB), an understanding was reached during appraisal between HSB and IUDPO as to how the materials purchase would be organized. During negotiations, agreement was obtained that UDPO would manage the bulk purchase of building materials for the house construction program on behalf of HSB and enter into an agreement by June 30, 1990 on the bulk purchasing arrangements. Municipal Infrastructure Component 2.10 In support of the Project's objectives to develop selected urban centers supporting agricultural development, a range of basic infrastructure and service improvements would be provided. These improvements, designed to minimum cost standards, would encompass rehabilitation of the main town roads and drains together with market places as well as augmenting water supply (public fountains) and sanitation (communal latrines) facilities presently sparsely provided for. In addition, the town administrations would be provided with minimum transportation requirements (e.g., all purpose trucks and vacuum tankers) in order that the levels of service provided by the town administrations to their citizens may be improved. 2.11 More specifically, the following would be provided across the eight tirst phase towns: 0.7 km of new roads, either surface dressed or graveled dependent on classification and usage; 14.5 km of upgraded roads, similarly surfaced; 2 small bridges; 65.0 km of unlined open drains; 9.7 km of lined open drainage channels; improvements and development of 7 existing markets; surfacing of 2 new markets; 9 communal latrine blocks sited at existing markets and 3 at new markets; 600 new market stalls; and high tension electric power line extensions to serve new housing sites in 2 of the towns. In addition, each town would be provided with items of small plant and tools and a total of 225 refuse containers. Also 5 vacuum tankers, 5 all purpose trucks and 2 graders would be provided to some of the towns. A detailed description of the municipal infrastructure component is included in Annex 4. For the eight phase two towns, a notional sum of US$3 million has been allocated for improvements of markets for which designs will be developed during implementation. Water Supply Component 2.12 The water supply component would rehabilitate, augment and secure the water supply in selected project towns to cater for the natural demand growth enhanced by the planned developments in the towns. Improved 5/ i.e., Addis Ababa-based contractors supplying materials and undertaking construction. - 13 - water supply is a basic requirement for the increased economic activity in the towns and would also improve the basic needs provision and health conditions of the urban poor by expanding the water supply coverage to the low income groups. Major extensioris to the existing water supply scnemes in Assela and Shashemane would be included under the Project. The components would comprise the construction of new source works, transmission mains, treatment plants and extensions to the distribution systems. The adopted planning horizon is up to the year 2000 (Stage 1) for this Project. While the above towns represent high priorities for water supply improvements, the need for expansion programs in Arsi Negele and Ziway is also acute. Funding constraints have, however, forced the elimination of schemes in these towns from the Project. A detailed description of the proposed works is included in Annex 5. 2.13 In Ambo, Wollisso, Goba-Robe and Mizan Teferi only minor rehabilitation works are required. These works would include rehabilitation of pumps, replacement and/or repair of the chlorination equipment and instrumentation, general repair works of the buildings, and minor additions and repairs to the distribution networks. Employment Generation/Income Enhancement Component 2.14 Loans through the Agricultural and Industrial Development Bank (AIDB) and technical assistance through the Handicrafts and Small Industry Development Agency (HASIDA) would be provided in phase one and phase two project towns to existing and new small-scale enterprises (SSEs) and cooperatives. The loans would be expected to finance working capital, the purchase of machinery and equipment, and the rehabilitation and/or expansion of existing manufacturing and service enterprises as well as the construction of new facilities and working capital for nev SSEs. Loans to existing and new SSEs would focus on the production of consumer goods and services absent or in very high demand locally. To the extent possible, support would focus on labor-intensive productive enterprises utilizing high levels of locally available materials. SSEs which improve the role and status of women in terms of income, employment and equity would also be favored clients under the Project. Pre-feasibility studies were conducted which identified 78 potential SSEs meeting these criteria in project towns and which include such enterprises, for example, as grain milling, oil seed milling, soap making, hollow block making, bread making and tailoring. The loans would not exceed Birr 250,000 for capital investment and working capital and would require a 301 owner's equity participation. The line of credit of about Birr 11.6 million would be directed to both new and existing small-scale manufacturing and service enterprises, administered on a flexible basis to support those SSEs applying first and which meet the project criteria. 2.15 An experimental feature of the program would be the extension of credit through AIDB and technical assistance through HASIDA to micro-scale, cottage industry and service enterprises which would be organized into cooperatives. All micro-scale enterprise clients would live in or around project towns, and household incomes of the beneficiaries would typically be about Birr 50 per month. The primary beneficiaries of this support (at least 502) would be women-owned, cottage industries and women school leavers, which experience the highest unemployment rates and lowest - 14 - incomes. To further facilitate women-owned enterprises among the very poor, HASIDA will walve the customary 15-201 up-front capital contributions from these clients as necessary, and AIDB will provide up to 100l of the financing requirements for these enterprise projects. It is estimated that most of the credit would be for working capital purposes with some foreign exchange allocated for purchase of machinery and equipment. HASIDA would be responsible for promoting the scheme and organizing the cooperatives. A total of Birr 2.9 million is proposed for the line of credit. A further innovation of this component would be the initiation of a savings program for the micro-scale, cooperative members. The savings scheme is being developed by HASIDA and AIDB. The savings would be used as a guarantee on the individual loans until they have been retired. During negotiations agreement was obtained from AIDB and HASIDA regarding the criteria for selecting small and micro-scale entrepreneurs to be supported under the project. 2.16 The success of both credit programs would be contingent upon HASIDA and AIDB receiving technical assistance and training in order to properly promote and administer the schemes. Institutional support to HASIPA would involve the strengthening of HASIDA's capacity to promote, moni.or and assist small, micro-scale and cooperative enterprises through a program of staff development of primarily branch office employees and the upgrading of the out-reach" procedures and support facilities offered in current branch offices. Institutional support for AIDB will center on assisting it w,th upgrading of staff capacity, especially within its branch office network, to identify, formulate and appraise SSE and cooperative lending projects. Special training will also be provided to field staff in lending approaches for micro-scale, informal sector enterprises. Training and technical assistance for improvement of its management information system along with equipment and vehicles for field work would also be provided. A detailed description of tne component is included in Annex 6. 2.17 In addition to the above programs, significant employment would be generated through the construction of municipal infrastructure and housing components. Local, small-scale contractors are expected to win a large number of housing construction contracts in the secondary towns, and they would in turn utilize greater numbers of local skilled and unskilled labor than would be the casc if these contracts were won by larger construction companies from Addis Ababa. Maximum local employment benefit is therefore expected to be gained from the housing schemes, roads and market upgrading components of the Project. Institutional Support Compoient 2.18 The institutional support component of the Project is designed to improve the management and operations of project agencies and provide essential project management support. The program is large given the number of concerned agencies, but is considered necessary to ensure smooth and efficient implementation of the Project and strengthening of project agencies. A description of the institutional support component is provided in Chapter III and Annex 7. 2.19 For the Ministry of Urban Development and Housing (MUDH), assistance would be provided in the following areas: - 15 - (a) Housing Sector Study. To review and evaluate housing performance versus needs as well as policies and housing finance requirements and develop sector specific goals and targets and an investment program for the medium- and longer-term for the public and private sectors (US$250,000); (b) Financial Management Consultancy Unit. For development of a financial management support unit within HUDH to assist municipalities in improving their revenue and municipal accounting performance (US$250,000). A PPP advance of US$92,174 has been approved for establishment of this unit. Included in the Project is the provision for refinancing the PPF; (c) Proiect Management. To support the establishment of a small, coordinating and monitoring unit within the Office of the Minister (US$200,000); (d) Project Implementation. To support the incremental costs of staff salaries and equipment of the Urban Development Project Office (UDPO) over the project period (US$2.8 million); (e) Support for NUPI. To strengthen NUPI's capacity for urban and regional planning through assistance for curriculum development for local short-term courses for mid-career professionals, overseas graduate degree programs for selected staff, and necessary equipment (US$350,000); and (f) Preparation of Second Phase Feasibility Studies. To prepare detailed proposals including engineering designs for the eight phase two towns (US$1.0 million); 2.20 For the Water Supply and Sewerage Authority (WSSA), assistance would be provided in the following areas: (a) Training. To train staff in financial management, accountancy, water resources management and specialized engineering/technical fields through short and medium-term training courses (US$80,000); and (b) Advisors Support/Equipment. To strengthen operations in the fields of financial management, engineering and management, to provide support for establishing a management information system, and to provide essential equipment (US$520,000); 2.21 For the Housing and Savings Bank (HSB), assistance would be provided in the following areas: (a) Training. To train primarily middle-management staff in technical, financial and managerial areas through academic, post-graduate and on-the-job training (US$S.00,000); (b) Vehicles and Equipment. To provide the necessary equipment and vehicles to support HSB to carry out project requirements over - 16 - distant locations and to develop its information systems (US$400,000); and (c) Housing Finance Study. To examine measures to expand the volume of formal housing finance; to maintain housing affordability for lower- and moderate-income households: to increase the efficiency of the housing finance system and explore opportunities for increasing competition in the market (US$200,000). 2.22 For the Agricultural and Industrial Development Bank (AIDB), assistance would be provided in the following areas: (a) Training/Vehicles and Equipment. To train branch office, industrial loan officers in SSE and micro-scale lending through study tours for senior personnel and in-country intensive training for existing a. new bank staff and to provide essential vehicles to support regional operations (US$300,000). 2.23 For the Handicrafts and Small Industry Development Agency (HASIDA), assistance would be provided in the following areas: (a) Training and Vehicles. To strengthen staff capacity to promote. organize and register SSEs and micro-scale entrepreneurs through formal, local training and short-term study tours and to provide essential vehicles to facilitate promotion, enterprise supervision and follow-up capabilities (US$700,000). D. Cost Estimates 2.24 The total project cost is estimated at Birr 109.5 million (US$ 52.9 million equivalent) of which about Birr 57.8 million (US$ 27.9 million) or about 53Z is the foreign exchange component. Taxes and duties on imported goods are estimated at about US$4.9 million equivalent and are included in the cost estimates. Taxes and duties represent about 9Z of the total project cost, taking account that some exemptions are given for selected imported items of plant and equipment (e.g., solid waste management vehicles and equipment). Base costs are expressed in December 1989 prices. Summary project cost estimates are shown in Table 2.1 and detailed cost estimates are given in Annex 8. 2.25 Project costs for the sites and services, water supply and municipal infrastructure components were estimated by consultants on the basis of detailed engineering designs and recent similar contract prices and for equipment and vehicles on the basis of recent quotations. Costs for lower-income housing in project towns exclude self-help labor costs and represent estimated mortgage loan requirements. Land acquisition costs are not required, but compens%tion costs for crops and structures have been estimated. In view of the fact that local coisultants are at present preparing the bid documents for -:he housing and municipal infrastructure components and that the costs oi staff and equipment of UDPO, which will supervise construction and heip manage the components, are included in the total project costs, no further engineering and management costs have been - 17 - included for these components. For the water supplv schemes, consultants will be retained for construction supervision, and their costs have been eatimated at 62 of the presently estimated construction costs. The level of credit assistance to small-scale enterprises was determined on the basis of feasibility studies carried out by consultants which identified the necessary requirements for foreign exchange and local cost support for specific enterprises to be promoted under the Project. Cost estimates for the institutional support programs including technical assistance, training, management staff support and consultancy services are based on recent actual c;sts for similar activities. Notional sums have been included for the credit line for micro-scale enterprises, and market improvements and the credit line for small-scale enterprises in the eight second phase towns. 2.26 Physical contingencies are estimated at lOZ of base costs for physical works and at 5Z of base costs for consultancy services (excluding market improvements in the eight phase two towns and the credit lines for micro- and small-scale enterprises). Price contingencies for local currency costs are based on expected increases in construction costs of 4Z per annum during the project implementation period. The corresponding rates for foreign costs are 7.2Z per annum for 1989, 5.82 for 1990 and 4.4Z per annum thereafter. In total, physical contingencies are estimated at about 7t of base cost and price contingencies are estimated at 14X of base cost plus physical contingencies. - 18 - Table 2.1 : SUtMARY OF PROJECT COSTS Comsnonut ----Birr sillicn--- ----- USS million---- l I of Local Foreign Total Local Foreign Total Foreign Bass Cost PHASE OIa T01S Land/Copensation 0.11 0.00 0.11 0.05 0.00 0.05 0 0 Housing .985 3.33 13. 19 4.74 1.61 4.37 25 1! On-site Infrastructure 1.00 0.91 1.91 0.48 0.44 0.92 48 2 Funicipul Infrastructure 2.99 2.12 5.09 1.44 1.02 2.46 42 6 %nicipal Equipet./1eicles 0.52 2.12 2.44 0.25 1.02 1.27 90 3 Niter Supply 14.59 18.91 33.49 7.05 9.13 14.18 S6 37 Employment Support 4.14 4.21 10.35 2.00 3.00 5.00 60 12 Sub-total 33.19 33.40 44.78 16.03 16.23 '32.6 SO 74 PHASE TWO TWSO arket l.provewts 2.55 3.64 6.21 1.23 1.77 3.00 59 7 Esployment Support 1.46 2.48 4.14 0.90 1.20 2.00 40 5 Sub-total 4.21 6.14 10.35 2.03 2.97 5.00 59 12 INSTITUTIOIL SUPPRT IlUDHi Housing Srctor Study 0.08 0.34 0.42 0.04 0.14 0.20 s0 0 Financial Ianiga nt Unit 0.09 0.36 0.43 0.04 0.17. 0.21 82 0 Support for UDPO 3.64 1.25 4.91 1.77 0.60 2.37 25 5 Support for NUPI 0.16 0.45 0.61 0.08 0.22 0.21 74 1 Feasibility Studin 0.34 1.34 1.68 0.16 0.65 0.81 so 2 Project Nnalomaut UVit 0.10 0.14 0.35 0.09 0.06 0.17 4? 0 ISSA 0.20 0.83 1.03 0.10 0.40 0.50 90 1 H53 0.26 1.18 1.44 0.13 e.S7 0.70 82 2 AlDI 0.10 0.45 0.55 0.05 0.22 0.24 82 1 HASIDA 0.24 0.99 1.23 0.12 0.48 0.59 80 1 Sub-total 5.31 7.33 12.64 2.56 3.54 4.11 Fi 14 Total Dase Cost 42.49 47.07 89.77 20.63 22.74 43.6 52 100 (December 1939 prices) physical Cotim in 3.15 3.21 b.36 1.32 1. 5 3.07 51 Price Contiqncis 5.91 ?.49 13.40 2.96 3.62 6.48 54 TotAl ProjKet iost 51.75 57.77 109.53 25.00 27.91 52.91 53 Notet Identifiable taxes and duti'n are about Dirr 10.1 million (US$4.9 million equivalent) and the total project cost not of tuir is about Dirr "9.4 million (US$.0 million equivalent). - 19 - E. Financial Arr&ngeMents Financing Plan 2.27 The proposed IDA Credit of US$40.2 million 'Birr 83.2 million) would finance about 762 of total project costs (or 84? of total project costs net of taxes and duties) and would cover 1001 of the foreign exchange and 49Z of the local cost requirements of the Project. About 14Z or about Birr 15.6 million of the total project costs would be provided by GOE to finance the capital costs of the water supply components and as budgetary allocations to MUDH and HASIDA for their institutional support components. The remaining 102 or about Birr 10.7 million of total project costs would be provided by project towns, WSSA, HSB and AIDB out of their own sources of funds. Taxes and duties would be financed by project agencies out of their own sources of funds, except for WSSA, J4UDH and HASIDA for which GOE would cover the costs. The financing plan for the project costs is summarized in Table 2.2 below. Table 2.2: PROJECT FINANCINC PLAN (Bi rr ml Iion) Component IDA Credit Central Project WSSA HS8 AIDB TOTAL passed on as Oov't Towns Loan Grant PHASE ONE TOWNS: Land/Compensation 0.06 0.08 0.14 Housing Development 12.89 2.19 15.08 On-site Intrastructuro :.85 0.2 2.17 Municipal Infrastructur 6.01 0.86 6.86 Vehicles and Equipmnt 2.74 2.74 Water Supply 32.21 6.49 37.70 Employmnt Support 8.84 1.61 10.36 PHASE TWO TOW1NS: Market Improvements 5.81 0.90 6.21 Employment Support 3.64 0.60 4.14 INSTITUTIONAL SUPPORT mUON 6.62 B.52 10.04 WSSA 1.06 0.18 1.24 HSB 1.48 0.18 1.66 AIDB 0.58 0.09 0.62 HASIDA 1.24 0.21 1.45 Total Net Project Cost 76.46 7.76 9.28 2.15 0.18 2.37 2.20 99.40 Taxes and Duties 0.00 0.00 6.87 1.62 2.07 0.07 10.13 Total Projecst Cot 76 7.78 16.66 l.77 0.18 4.44 2.27 109 .t Total Projoct Cost OM a) 86.46 8.76 7.58 1.82 0.09 2.14 1.10 62.91 - 20 - Flow of Finds and On-lending Terms 2.28 The IDA Credit would be made to GOE or a period of 40 years, including 10 years grace, at the standard IDA service charge. The IDA Credit would be passed on to the various imp ementing agencies as loans and grants according to their respective abilit,es to recover the capital costs of the Project and the strengths of their rwspective financial positions. The impact on affordability of beneficiaries was also considered in determining the on-lending terms. GOE would bear the foreign exchange risk of the IDA Credit. 2.29 About USS 4.6 million equivalent of the proceeds of the IDA Credit would be passed on to phase one project towns and about US$2.6 million would be passed on to phase two project towns as loans to support the financing of municipal and housing infrastructure and equipment for which costs would be recovered through urban taxes, refuse collection fees, market fees and plot development charges. The loans to project towns would be made at interest rates of 1.52 to be repaid over 26 years including 6 years grace on repayment of principal. The terms of the loans are in accordance with the terms to Addis Ababa municipality under the prior IDA Credit and are based upon the limited ability of several of the project towns to contribute to the capital costs of the Project. In order not to slow down implementation of the other parts of the Project, agreement was obtained at negotiations that the Government would conclude a financing agreement with each project town as a condition of disbursing funds under th. housing and municipal infrastructure and municipal equipment/vehicles components of the Project. 2.30 About US$ 16.1 million equivalent of the proceeds of the IDA Credit would be passed on to WSSA as a loan to support the financing of its institutional support component and the capital costs of the water supply expansionfrehabilitation schemes which would be recovered through water tariffs and other related charges. The loan to WSSA would be made at an interest rate of 1.52 for a period of 26 years, including 6 years of grace. The proposed interest rate is higher than terms on prior loans arranged on behalf of WSSA by Government from the African Development Fund which were passed on at 3142 and grants from the Federal Republic of Germany which were passed on as grants. The proposed interest rate would help move WSSA toward more commercial practices, recognizing its limited ability to afford full commercial terms at this time. The maturtty of 26 years allows for a 6 year grace period correspondinag to the construction period of the Project and a repayment period of 20 years. 2.31 About US$6.9 million equivalent of the proceeds of the IDA Credit would be passed on to USB as a loan to support the financing of its institutional support component and the constructior of residential houses on the sites and services developments for which the costs would be recovered through mortgage payments. The loan to HSB would be made at an Interest rate of 1.52 to be repaid over 26 years including 6 years grace on repayment of principal. The proposed terms are the same as the terms under the prior IDA Credit and would provide for an adequate spread of about 42 on these operations. - 21 - 2.32 About US$ 6.2 million equivalent of the proceeds of the IDA Credit would be passed on to AIDB as a loan to support the financing of its institutional support component and the business loans to small and micro- scale enterprises which will be recovered through loan repayments. The loan to AIDB would be made at an interest rate of 2Z to be repaid over 15 years including 6 years grace on repayment of principal and would provide for an adequate spread of about 42 on these operations. During negotiations agreement was obtained that Government enter into subsidiary loan agreements with WSSA, HSB and AIDB as a condition of effectiveness of the IDA Credit. 2.33 About US$3.2 million equivalent of the pr^ceeds of the IDA Credit would be passed on to MUDH and about US$0.6 million equivalent would be passed on to HASIDA as budgetary allocations to support the financing of their respective institutional support components. Agreement was obtained during negotiations on the on-lending arrangements of the IDA Credit. Terms of Loans to Beneficiaries 2.34 Residential Mortgages/Construction Loans. Loans to cooperatives and project towns for construction of residential houses on the sites and services schemes would be made at HSB's prevailing terms for owner-occupied residential properties and building construction, respectively. The loans to cooperatives would carry variable interevt rates with initial interest rates of 4.52 to be repaid over 25 years with a one-year grace period on repayment of principal, roughly corresponding to the expected construction period of the houses. The loans to municipalities for construction of finished houses for sale to development officers and/or town residents would carry interest rates of 8Z with interest capitalized in the loan amount during construction. Upon completion of construction, the construction loans would be converted into mortgage loans for purchasers of the finished houses. The mortgage loans for the finished houses would carry variable interest rates with initial interest rates of 8 to be repaid over 25 years. 2.35 Micro- and Small-Scale Enterprise Loans. Loans to existing SSEs for rehabilitation and/or expansion of existing manufacturing and service enterprises and working capital as well as to new SSEs for purchase of machinery and equipment, construction of new facilities and working capital would be provided at AIDB's prevailing terms. The loans would carry interest rates of 62 and 92 for cooperatives and private entrepreneurs, respectively, to be repaid over 5-10 years. The loans would also require a 302 owner's equity participation for the capital projects being financed. Loans to micro-scale enterprises would be a new feature of AIDB's normal lending practices and would be provided primarily to household enterprises organized into service cooperatives which therefore qualify for the 62 interest rate. The loans would be repaid within about one year. Micro- scale beneficiaries would be required to contribute a part of their earnings to a savings account/guarantee fund along with their loan repayments. Since the micro- and small-scale enterprise loans would be repaid to &'JDB more quickly than AIDB would be required to repay GOE, the funds would be utilized on a revolving basis for other private, micro- and small-scale entrepreneurs. - 22 - Inflation and Interest Rates 2.36 Inflation rates6 in Ethiopia were about 3Z in 1985/66, -4.52 in 1986187, and 22 in 1987188 and are estimated to be about 42 each year over the medium term. Interest rates on HSB mortgage loans and AIDB enterprise loans are administered by the National Bank of Ethiopia and have generally kept ahead of inflation in recent years. Interest rates on loans to subborr wers would be set at prevailing interest rates and are therefore expected to be positive in real terms for the residential building loans in the sites and services schemes as well as for the small- and micro-scale enterprise loans supported by the Project. F. Implementation Arranaements 2.37 The lead apancy for the project would be MUDH which would monitor the overall project's progress, coordinate with other implementing agencies and communicate with the Bank through a small Project Management Office to be established in the Office of the Minister. MUDH will also have primary responsibility, largely through its Urban Development Project Office (UDPO), for assisting Project Implementation Units (PIUs) to be established in project towns to implement their municipal infrastructure and housing projects in close cooperation with the water supply and electricity authorities. The PIUs will consist of available technical staff of the respective town administrations. UDPO would assist the PIUs with regard to tendering, contract award and disbursement activities as well as construction supervision, and along with MUDH, assist the towns with the establishment of housing cooperative groups. In addition, UDPO would be expected to act as the bulk purchasing agent on behalf of HSB for ensuring that adequate building materials for house construction will be available in a timely manner. UDPO's staff would be strengthened in order to ensure that it can carry out its expanded role adequately. UDPO's staffing and operational requirements were reviewed during negotiations. 2.38 The Water Supply and Sewerage Authority (WSSA% would be responsible for implementation of the water supply components in project towns, which would be carried out through its existing departmental structure with assistance from engineering consultants for finalization of engineering designs and coastruction supervision. WSSA has demonstrated its ability to implement similar projects in the past. Its staffing arrangements were reviewed during appraisal. 2.39 The Housing and Savings Bank (fSB) would extend housing construction loans to cooperatives and individuals who will build their own homes through self-help, would advance housing construction loans to project municipalities, and would manage collections for the schemes through its existing departmental structure. HSB has demonstrated its ability to administer a similar level of lending in Addis Ababa under the First Urban Development Project. HSB has branches or is planning to establish branches in most project towns and will use the existing Commercial Bank of Ethiopia branch network in other areas. For its 6/ As measured by changes in the GDP deflator. - 23 - responsibilities for project monitoring and reporting, HSB will establish a PIU reporting to the Deputy General Manager. These staffing and organizational arrangements were reviewed during appraisal. 2.40 The Agricultural and Industrial Development Bank (AIDB) and the Handicrafts and Small Industry Development Agency (HASIDA) would together implement the SSE support component according to standard operating procedures and responsibilities. For the micro-scale support component, HASIDA would promote, organize, screen and assist the micro-scale entrepreneurs seeking credit assistance from AIDB and manage its responsibilities through a National Project Implementation Committee to be established for the purposes of the Project. Six zonal desk officers based in Addis Ababa would be responsible for the daily direction and management of field work to be carried out by cooperative development agents in each of the project towns. AIDB would implement the micro-scale line of credit through its existing departmental structure and utilize a simplified appraisal format for micro-scale projects which has been developed by AIDB with HASIDA assistance; this format was reviewed during negotiations. AIDB will review the micro-scale project appraisals and loan applications screened by HASIDA. It will also follow-up on samples of micro-scale enterprise clients, but rely on HASIDA for on-going portfolio supervision and client assistance. Training would be provided under the project for carefully selected staff and new hirees in the branch offices of each institution to strengthen them to carry out the technical and credit assistance programs for the entrepreneurs. These staffing and organizational arrangements were reviewed during appraisal. During negotiations agreements were obtained regarding MUDH, UDPO, WSSA, HSB, AIDB and HASIDA staffing and organization requirements which would be maintained over the project period. 2.41 A high-level Project Advisory Committee would be formed to resolve issues during implementation and would be comprised of senior officials of each of the implementing agencies and chaired by the Minister of XUDH. During negotiations agreement was obtained regarding the composition of the Project Advisory Committee which would be established by June 30, 1990 and maintained over the project period. 2.42 Since all urban land is owned by the Government, MUDH will need to furnish satisfactory evidence that land and rights in respect of land are available for the Project. During negotiations agreement was obtained from NUDH that land is available for the Project. 2.43 Project implementation would be expected to begin in mid-1990 and would be carried out over a six-year period. The project implementation schedule is included as Annex 9. - 24 - G. Procurement 2.44 A summary of procurement arrangements is given in Table 2.3 below: Table 2.3: PROJECT PROCUREMENT ARRANGEMENTS */ (USS lmllion) Procuremnt Method Proj3ct Element ICB LB OTHER N/A TOTAL VALUE Major Civil Works and 20.1 20.1 Supply contracts (WSSA) (14.3) (14.3) Vehicles and Miscellangous 3.? 3.7 EquIpment (3.7) (8.7) Housing Development (a) Building materials 1.8 0.3 2.1 (1.8) (0.3) (2.1) (b) Construction loans 6.1 6.1 (4.0) (4.0) On-site and Municipal Infrastructure 7.4 7.4 Civil Works Contracts (5.0) (5.0) Construction Supervision (WSSA) 1.0 1.0 (1.0) (1.0) Consultancy and Advisory 1.7 1.7 Services and Studies (1.7) (1.7) Training (a) Consultancy 0.8 0.8 (&.8) (0.8) (b) Postgrade studies and 0.7 0.7 selected overseas courses (0.5) (0.5) Salarieo 2.2 2.2 (1 .1) (1 .1) Micro- and small scale Enterprise Loans (a) Machinery and equipment 4.2 4.2 (4.2) (4.2) (b) Working capital 2.8 2.8 (1. 8) (1.8) Land/Compensation 0.1 0.1 (0.0) (0-0) TOTAL 25.6 7.4 8.0 11.9 62.9 (19.8) (5 .) (8 0) (7i.4) (40.2) a/ Figures In parentheses are tho respective amounts financed by IDA. / International shopping. 2.45 Procurement of the major civil works and supply contracts7 for the water supply component would be on the basis of international competitive bidding (ICB). The bid documents would be prepared by the engineering consultants of the '.mplementing agency (WSSA). After review by WSSA, the bid documents would be transmitted to IDA for review. WSSA would prepare the bid evaluation report which would also be transmitted to IDA for review. 7/ a) Civil works, estimated at US$5.1 million; b) Pipe laying (transmission mains and distribution network), estimated at US$2.8 million; c) Electrical and mechanical equipment (water treatment plants and pumping stations), supply and installation, estimated at US$3.6 million; d) Supply of pipes and fittings, estimated at US$8.6 million. - 25 - 2.46 Vehicles and miscellaneous equipment for the various implementing agencies would be combined into supply contracts8 and would be procured through ICB. The bid documents would be prepared by project agencies and transmitted to IDA for review. 2.47 In order to ensure the timely availability and least cost of the building materials (e.g., glass, reinforcement bars, roofing sheets, etc.) that are not produced locally or are in short supply for the housing development component, these materials would be procured in bulk contracts through ICB.9 The bid documents would be prepared by UDPO and transmitted to IDA for review. The materials would be received, stored and distributed by UDPO on behalf of HSB. Similar arrangements for bulk purchase of local building materials were made and successfully carried out under the First Urban Development Proje-t. Contracts for building materials estimated to cost less than the equivalent of US$20,000 each up to an aggregate amount of US$300,000 may be procured on the basis of international shopping from at least three suppliers from two countries. 2.48 Procurement of the civil works contractsl0 for on-sits and municiral infrastructure and building contracts for the finished housing units' would be made on the basis of local competitive bidding (LCB), as their individual values are small and the works are scattered in 16 project towns. LCB procedures in Ethiopia have been reviewed and are generally acceptable. LCB procedures will include advertisement in local newspapers, public bid opening, specific criteria for evaluation, and award to the lowest evaluated bidders. Foreign bidders who wish to participate will not be precluded from participation. The eligibility of public sector enterprises will be in accordance with Bank procedures. All contracts with a value above US$200,000 equivalent would be subject to prior review by IDA. 2.49 Construction supervision of the water supply component will be carried out by consultants employed by the implementing agency (WSSA), whose qualifications, experience and terms and conditions shall be satisfactory to IDA. Consultants and specialists will be employed by MUDH and the other implementing agencies for additional studies, advisory services and training purposes. Such consultants shall be selected in accordance with the Guidelines for the Use of Consultants by World Bank 8/ Total value estimated at US$3.7 million. 9! Total value estimated at US$2.1 million. 101 Total value estimated at US$7.4 million. Value of individual contracts are expected to vary from US$0.2 to US$0.5 million. 111 Total value estimated at US$4.5 million. Value of individual contracts are expected to vary from US$O.l million to US$0.4. million. - 26 - Borrowers and by the World Bank as Executing Agency published by the World Bank in August 1981. 2.50 Machinery and equipment procured from abroad for subprojects financed under the small-scale and the micro-scale credit components 12 would be done through international shopping by calling price quotations from not less than three suppliers from at least two countries. AIDB disburses at the request of the borrower and attempts, as much as possible, to disburse directly to the suppliers to minimize the risk of misappropriation. These arrangements are similar to the procedures currently being used by AIDB under the ongoing IDA-supported Fourth Industrial Line of Credit to AIDB (Credit 1275-ET). 2.51 The General Procurement Notice will be published in the Development Business Forum, at least 60 days prior to the issue of the bid documents. H. Disbursement 2.52 The proceeds of the IDA Credit would be disbursed against: ti) 100Z of foreign and 55Z of local expenditures on all major civil works and supply contracts (water supply component); (ii) 100Z of foreign expenditures on building material supply contract(s) (housing development component); (iii) 1002 of foreign e..penditures for vehicles and miscellaneous equipment; (iv) 10OZ of foreign and 702 of local expendihares on civil works contracts for on-site and municipal infrastructure development; (v) 100? of foreign expenditures !or machinery and equipment for micro- and small-scale enterprises; (vi) 1002 of expenditures for construction supervision, other consultancy and advisory services, training and studies; (vii) 1002 of foreign and 502 of local expenditures for MUDH's Project Management Office and UDPO's salaries; (viii) 75? of expenditures for housing construction loans; (ix) 502 of expenditures for small-scale enterprise loans; and (x) 80? of expenditures for micro-scale enterprises loans. 12/ Total value estimated at US$4.2 million. - 27 - The disbursement schedule is given in Annex 10. It is expec-.ed that disbursements would be completed by June 30, 1997, about one year after completion of civil works. 2.53 Disbursements would be m;de against standard IDA documentation. Disbursement under categories (iv), (v), (vii), (viii), (ix) and (x) would be made on the basis of statements of expenditure (SOE) for contracts and purchase orders with a total value less than US$50,000. In order to ensure the timely provision of funds available to finance the costs of the project, it is proposed that the Government establish sepaRate Special Accounts for HSB, WSSA and AIDB in the amounts of US$1.5 million, US$2.0 million and US$1.0 million, respectively. Funds in the Special Accounts would be available to finance only elig.ble expenditures under the Project. During negotiations agreement was obtained regarding the arrangements for establishing and operating the Special Accounts. I. Accounts and Audits 2.54 Project accounts would be prepared by each implementing agency. including HSB, VSSA, AIDB and HASIDA, for their respective parts of the Project. In addition, project accounts would be prepared by MUDH's Project Management Office for its institutional support component and by UDPO for the project towns, activities and its staffing and equipment requirements. The project accounts would identify all sources and uses of funds in carrying out the Project, including a detailed accounting of the use of the proceeds of the IDA Credit. The project accounts would be audited by an independent auditor acceptable to IDA and the audit report submitted to IDA within nine months of the end of the fiscal year. The project accounts' audit reports would also contain a separate opinion on the statement of expenditure (SOE) procedure when utilized. 2.55 In order to monitor the financial performance of HSB and WSSA, the key revenue-generating implementing agencies, their financial statements (Income Statements and Balance Sheets) in addition to their project accounts would be audited by an auditor acceptable to IDA and the audit reports would be submitted to IDA within nine months of the end of fiscal year. The audit reports would contain a separate opinion on compliance by implementing agencies with all financial covenants under the IDA Credit and operation of the HSB, WSSA and AIDB Special Accounts. It is expected that Audit Services Corporation (ASC) would carry out the audits, and this arrangement is considered acceptable. During negotiations agreement was obtained regardinig the auditing requirements of the Project. 2.56 Audit of HSB's financial statements has been carried out satisfactorily in the past, but up to now and due to the state of WSSA's books, the ASC has only participated in WSSA's headquarters cash count and physical inventory taking. While no overall audit of WSSA's accounts has been carried out so far, its FY1984185 accounts are currently being audited and are expected to be completed in the near future with the audit of its FY1985/86-1987/88 accounts to follow soon thereafter. This is expected to permit proper audits of WSSA's accounts to be carried out by the time of project start-up. - 28 - J. Environmental Impact 2.57 The Project would lead to significant improvements and tangible benefits to the environment in the project towns. The municipal infrastructure and service improvements to be supported by the Project would have a positive environmental impact. Drainage would be improved and refuse at key generation points would be containerized, thereby reducing the risk of flooding and its attendant detrimental environmental and health effects. Improvements to markets where goods and animals are traded would include access, drainage, public lutrines and public water fountains. In addition, where municipalities have no facility for the regular and sanitary emptying of pit latrines, cesspools and septic tanks, vacuum tankers would be provided thereby reducing the incidence of overflowing of facilities, the resulting pollution of the environment and the attendant health hazards. The water supply improvements will extend the coverage of piped water supply to the lower-income groups who now rely on unhealthy water sources. In addition, the improvements will not involve any resettlement of families during implementation of the Project, and compensation for crops and dama-es caused by construction activities will be paid in accordance with the laws of Ethiopia. The new housing developments will also not result in any resettlement or adverse environmental impacts. Similarly, the micro- and small-scale enterprises supported under the Project are not expected to pose any danger to the environment in terms of air, water or noise pollution. - 29 - III. IMPLEMENTING AGENCIES A. Ministry of Urban Development and Housing 3.01 The Ministry of Urban Development and Housing (MUDH) was the key implementing agency for the First Urban Development Project, under which it performed satisfactorily, and it is to act as the lead agency for this proposed follow-on Project. MUDH is headed by a Minister and is responsible for supervising all regional administrations, through a regional branch network in the implementation of master plans (which are now to be prepared by NUPI), approving annual budgets aud development projects, and in administering urban land. A reorganization in December 1987 elevated a number of its functions to departmental levels, reflecting the growing importance it attaches to the areas of municipal finances and manpower development as wsll as to the organization of housing cooperatives (groups of families who build their houses together). Proposals for new urban and housing policies can be initiated by all departments and units within MUDH, for which the Minister appoints committees on an ad hoc basis to study and formulate the policies for consideration prior to submission to the Council of Ministers for final approval. 3.02 The Ministry currently has six departments which are responsible for urban planning implementation and urban land administration, urban development, housing cooperatives organization, housing research and services, finance, and administrative and manpower development. It has several units which provide organization and management, planning and programming, public relations and legal services. In addition, it supervises four semi-autonomous agencies, including NUPI, the Construction Materials Supply Enterprise, Dwelling Houses Construction Enterprise and the Rental Housing Administration (REA). It also supports the operations of an Urban Development Project Office (UDPO), reporting directly to the Minister, which was established for the purposes of carrying out its responsibilities under the First Urban Development Project, still ongoing. The UDPC, with a considerable strengthening of its staffing and capabilities, would continue to function as the implementing arm of MUDH for assisting project municipalities under the proposed Project. 4UDH's and UDPO's organization structures are shown in Charts 1 and 2. B. Municipalities Background and Organization 3.03 The implementing agencies for the housing and municipal infrastructure components of the Project would be the central associations (municipalities) of the eight phase one and eight phase two regional towns, assisted by the UDPO. The project towns would be demonstrating their implementation capacities for the first time. Following the recent proclamation of September 1988, municipalities will report to MUDH through the 30 regional offices which will be located in each of the regional capitals (previously there were 15 regions). 3.04 A municipality is defined as a group of associations of urban dwellers with an aggregate population in excess of 2,000. The structure of - 30 - a municipality comprises the following hierarchy of urban dwellers' associationss Kebeles are the smallest associations and are composed of all the adult members of a community who elect a policy committee which has three subordinate comuittees (revolutionary defense, inspection and executive) and a judicial tribunal; and Central associations constitute municipalities and are made up of representatives of Kebeles. These bodies have a judicial tribunal, inspection and revolutionary defense committees and an executive committee which is responsible for administration, land, technical and community services. A typical municipal organizational structure is shown in Chart 3. 3.05 Although Kebeles may raise funds and take initiatives to improve their local conditions, it is the central associations which are the executive urban authorities. The powers and duties of a central association include the followings (a) preparation and submission to MUDH for approval of urban land rent and service charges, and urban house tax and charges; (b) collection of rent of lands and houses within the urban center rented for up to Birr 100 per month; (c) collection of charges, rents, taxes and fees due to municipalities under various laws previously in force; (d) submission to MUDH and; when approved, implementation of the urban center's master plant and (e) operation and maintenance of streets, squares, market places, transport services, social service programs, fire fighting, ambulance and sanitary services. 3.06 The Project focusses, in the first phase, on eight towns (i.e., central associations) in the Central and Southern regions of the country which function as significant market centers for the surrounding rural population. Most of these towns have either a unique economic activity or are expected to act as administrative centers under the newly devolved regional administration proclaimed in 1988. These towns are: 1989 Population (est.) Town Town Rural Area Region Shashemane 46,400 164,900 Southern Shoa Goba) al 30,200) 97,600 Bale Robe) 15,400) Assela 42,100 55,000 Arsi Ambo 20,700 153,400 Western Shoa Vollisso 20,500 131,800 Western Shoa Arsi Negele 17,100 90,300 Southern Shoa Mizan Teferi 8,100 115,500 Koffa Ziway 7,700 62,900 Southern Shoa 273,800 941,200 a/ Goba and Robe are in process of being merged into one town administration. - 31 - Municipal Finances 3.07 General. The key sources of revenue for the municipalities as established and prescribed by proclamation are trade license fees, property taxes and service fees. In addition, many towns derive additional income from commercial rents, and several towns derive substantial revenue from taxes on economic activity unique to the town; these sources of income are not prescribed by the Central Government. The basic taxes and license fees have not been legally increased since ,'-he early 1970's. Many towns have accordingly sought other sources of revenue, or have imposed increases for which they have not received legal sanction. 3.08 All project towns must submit their forthcoming annual budget of revenue and expenditure to MUDH for approval prior to coumencement of the financial year. Towns are required to be financially self-sufficient such that expenditure is contained within revenue, as has been generally demonstrated, since they receive no regular subventions from Government, except for shares of the petroleum tax and minor assistance in kind. Municipalities can utilize accumulated cash reserves and occasionally have been permitted to borrow from MUDH on interest-free temrs for capital development schemes. The loan funds available from HUDH, however, have been inadequate to finance any significant amount of capital investment. 3.09 Proiect Towns. The recent financial positions of the eight phase one project towns are summarized in Annex 11. Revenues and expenditures for each of the last thrae financial years, together with cash and cash reserves as at June 1988, are displayed for each town as well as the revenue per head of population in 1987/88. This analysis indicates considerable variations between the towns in the relative levels of revenue generation and financial strength. Per capita annual revenue generation ranges from Birr 10.07 in Arsi Negele to Birr 40.84 in Mizan Teferi. Because the towns' accounting systems are based on simple cash receipts and cash expenditures, significant year-to-year fluctuations in revenues based on collections of arrears in taxes are often experienced. Nevertheless, the underlying pattern is clearly evident. The financially stronger towns (Mizan Teferi and Wollisso) have enjoyed the benefit of financially aware leadership, have sought to impose tax increases where possible within the last five years and, in particular, have identified their unique economic activity as a source of tax revenue - e.g. chat (an addictive leaf crop grown in the district) for Wollisso and coffee for Mizan Taferi. The financially weaker towns such as Ambo and Shashemane have not attempted to increase their taxes from the levels of the early 1970's and have shown little initiative to tax local industries (e.g. the Ambo Bottling Plant). As a consequence of taxes remaining at 1970 levels, revenues per capita are declining in real terms (i.e., in towns such as Ambo and Shashemane), implying that the level of service delivery is also declining. 3.10 A number of towns suffer from the negative consequences of a 'temporary' exemption from payment of local taxes granted by the Council of Ministers to the Ethiopian Hotels Corporation. Additional ne6ative policies are the delay by the Council of Ministers in approving the increased schedule of land and property taxes, estimated to yield an overall increase in such taxes of about 200-300Z, plus proposed head tax, amounting to Birr 1-3 per month, which were recommended by KUDH in 1985. - 32 - As well, no guidance or support has been provided to the towns by MUDH on the issue of taxing traders who do not possess a licence from the Ministry of Domestic Trade. The proportion of sucht traders and the attempts to impose local taxes or licence fees appears to vary from town to town, but in a number of instances represents a significant loss in revenue. 3.11 In general, the potential for revenue increases for project towns of up to about 352 in licenses and taxes at present tax levels has been estimated by consultants during the preparation of this Project to be possible through the implementation of improved collection policies, record-keeping and taxpayer identification. Even with these increases, a number of the weaker towns can afford the Project only by restricting other capital expenditures for the period 1990-97. Project Impact on Municipal Budgets 3.12 Proposed capital expenditures for improvemnents to municipal infrastructure and warkets to be undertaken as part of the Project vary from town to town - from a total of Birr 464,000 in Mizan Teferi to Birr 1,727,000 in Wollisso. The affordability of the proposed infrastructure components and the need (if any) for overall revenue increases for each of the towns is analyzed in Annex 11. The analysis is based on the assumptions that: (a) increased yields in various taxes of from 1OZ to 352 can be achieved for each town in phased progress over the three years ending in 1992193, which would require improvements in collection and administrative efficiency and aseistance to be provided by a centrally- based unit to be established at MUDH; and (b) on-lending to municipalities is at an interest rate of 1.5Z p.a. with about a 25Z contribution from each city towards the total capital cost of the Project. 3.13 The financial forecasts demonstrate that two towns - namely, the financially strongest .:_wns of Mizan Teferi and Wollisso - are able to afford the proposed project's debt ser'-ice as well as regular capital expenditure based on existing sources of revenues and current collection procedures without tax increases. On the basis of the assumed increased tax yields through improvements to collection efficiency, four towns - namely, Arsi Negele, Assela, Goba-Robe and Ziway - can afford the project without tax increases. The remaining weaker towns of Ambo and Shashemane will either have to severely limit their other capital expenditures or require tax increases at varying times, according to their particular circumstances. Such increases could be derived either from the implementation of the 1985 MUDH proposals, from the broadening of the tax base to include previously untaxed traders, from other economic activities or from a combination of the foregoing. During negotiations, agreement was obtained that MUDH review the impact of other capital investments exceeding Birr 100,000 on the financial viability of Ambo and Shashemane municipalities to be undertaken from own resources and discuss the findings with IDA prior to permitting the undertaking of other capital investments in these towns. 3.14 It is envisaged that a unit would be established within MUDH's Finance Department which would work with the eight towns directly on a pilot basis. Later, counterpart teams would be expected to be trained by this unit and located in each of the new regional offices of MUDH so as to - 33 - introduce improved revenue collection and accounting procedures to towns throughout the country. A provision of US$250,000 would be made under the Project for institutional support to provide international consultancy, training and equipment to support the establishment of a Financial Management Consultancy Unit within MUDH. A PPF advance of US$92,174 has been approved to permit t.&mely establishment of this unit. During negotiations agreement was obtained that MUDH establish a Financial Management Consultancy Unit by June 1990 to introduce improved revenue collection and accounting procedures first to project towns and later to other towns throughout the country. C. Water Supply and Sewerage Authority Background and Organization 3.15 The Water Supply and Sewerage Authority (WSSA) was established on November 7, 1981 as an autonomous government organization with the responsibility for planning, implementing, operating and maintaining water supply and urban sewerage systems throughout the country, except in Addis Ababa which has its own independent Water Supply and Sewerage Authority. It currently owns and operates about 170 urban water systems serving about 3 million consumers and has a program to absorb the remaining 30 urban water operations by the end of 1989. WSSA also has responsibility for providing maintenance support to some 5,000 rural water supply sources serving almost 7 million people dispersed over a large area. At present, WSSA has the power to enter into contracts and to raise loans and credits and wuuld be expected to implement the water components under the proposed Project. It has demonstrated its abilJt.y to satisfactorily implement a number of similar projects financed by the Federal Republic of Germany and the African Development Fund. 3.16 WSSA is headed by a General Manager who reports to the Commissioner of the Water Resources Commission (WRC). Operations are headquartered in Addis Ababa and decentralized to seven regional offices. The regional offices supervise and provide maintenance support to the urban and rural water schemes through established maintenance routes, on call maintenance crews and regional workshops. The larger urban systems assist smaller nearby urban (satellite) and rural schemes in administration and maintenance. The number of urban systems operated by the different regional offices are shown below. Region Urban Schemes Satellites Total Central 23 12 35 Southern 16 17 33 Western 14 13 27 Eastern 12 14 26 N. Western 14 10 24 N. Eastern 7 8 15 Northern 9 1 10 Total 95 75 170 WSSA's organizational structures for its headquarters and regional operations and the proposed organization in the individual urban areas, - 34 - known as Water Supply and Sewerage Service Units (WSSSUs), are shown in Charts 4, 5 and 6. Staffing, Manpower Development and Training 3.17 WSSA's total staffing as of early 1989 was 2,675 employees, classified as follows: Category Number Z of Total Professional 126 5 Sub-professional 217 8 Finance/Clerical 175 7 Semi-skilled/Unskilled 2,157 80 Total ? 675 100 It is estimated that there are about 90,000 connections in the urban areas served by WSSA. Excluding about 101 of WSSA staff which are involved in providing maintenance support to the rural areas, the number of WSSA employees per 1,000 connections is about 37, which is considered very high. An imbalance also exists in the skill mix of the staff with a serious understaffing in the professional, sub-professional and financial categories and an overstaffing of semi-skilled/unskilled workers. Major increases in community participation officers and trained village pump operators are also required to reduce the strain on WSSA resources in maintaining a massive logistics support system for the maintenance of rural water systems throughout the country. 3.18 WSSA's personal policies and salary structure are dictated by the Government's Central Personnel Agency (CPA). Recruitment and retention of suitably qualified staff, particularly at the professional and sub- professional levels, is seriously constrained by CPA policies which restrict WSSA from paying competitive salaries. The problems are particularly acute for financial and accounting staff and skilled technicians. A change in WSSA's organizational status similar to that of the Ethiopian Water Works Construction Authority, its sister organization, which has much greater flexibility in fixing salary scales and benefits for its staff, could address this problem to a significant extent. A proposal for such change has been made under a recent "Organization and Management Study for WSSA" carried out by an external consulting firm under an existing UNDP-funded/World Bank-executed technical assistance project fox WSSA. WKC is currently considering these proposals. 3.19 Another related problem exists in the structure of WSSA at the regional level (see Chart 5) where the financial unit is placed under the Administration Department. Based on CPA guidelines on salaries, which are based on hierarchy in organizational structures, it is difficult for WSSA to recruit properly qualified accountants for the finance unit at the regional level, due again to the low salary levels. WSSA is also interested in decentralizing operations to the regional level, to the extent possible, which will include decentralizing of financial operations as well. This would require the maintaining and consolidating of all - 35 - financial information received from the WSSSUs at the regional offices prior to forwarding the information to headquarters. In order to achieve this decentralization, it is essential that the regional finance units are upgraded and properly staffed. Therefore, agreement was obtained from WSSA during negotiations that it will upgrade the finance units of its regional offices and take other appropriate actions, to be agreed with IDA, to properly staff these Departments by June 30, 1990. 3.20 Training of WSSA staff at the professional level is principally provided through short and long-term courses funded by external aid agencies. Sub-professional and other technical/clerical training is effected locally at the Arba Minch Water Technology Institute, the Ethiopian Management Institute and Ethiopian Airlines training facilities. Professionals are highly trained in technical skills, but their numbers are not adequate. The training component shall provide assistance not only to train the available few but to expand the base of manpower resources of WSSA in various areas of discipline. In addition, all levels of the finance staff should receive additional training as should the mid- and lower-level technical staff. A proposed training program was dii ussed with the appraisal mission. Accounting and Finwicial Management 3.21 WSSA's accounting and financial management systems are poor. Overall financial statements have not been available for any year to-date, mainly because of a lack of sufficient number of qualified accountants to operate the centralized accounting system. Accounting in individual towns, including the towns covered under this Projecc., is elementary and is primarily on a cash basis. Quarterly reports, showing billings, collections and cash expenditures are prepared and forwarded to the regional offices. Balance sheets are not prepared, as fixed assets are not recorded and inventories are not fully costed. A program is underway to value the fixed assets and inventories of WSSA's overall operations and this is expected to be completed by end-1989. As part of preparation for this proposed Project, WSSA has prepared income and source and application of funds statements for its overall operations for the last three fiscal years. Also, fixed assets were recently valued and registered by consultants for the first two towns requiring expansion of their water supply systems to be covered under the proposed Project, and this has permitted preparation of their forecast balance sheets, and income and source and application of funds statements. 3.22 WSSA's accounting and financial reporting systems need substantial improvement, and sufficient numbers of adequately qualified financial staff need to be trained in the use of the improved systems. Under the Organization and Management Study referred to above, consultants have made several important policy recommendations regarding (i) financial management; (ii) operations and maintenance; and (iii) stores and procurement, which have been approved by WSSA and are now under review by the WRC. In addition to policy recommendations, numerous manuals and a training program covering the full range of WSSA's operations have also been prepared. In the financial area, the consultants have recommended the development and installation of appropriate accounting and financial management systems for WSSA, installing these systems at various levels of the WSSA organization, and training staff in the use of these systems. - 36 - Detailed terms of reference for consultancy assistance to carry out this work have been prepared. It is expected that the systems should be fully operational to allow preparation of standard financial statements and yearly budget and management information reports for the fiscal year ending July 1991. Funds are currently available in the UNDP/World Bank project to carry out the work, and consultants began the work end-November 1989. Commencement of this work on improving the accounting and financial management systems of WSSA was a condition of negotiations for this Project. Billing and Collection 3.23 All urban water supply is metered and meters are read monthly; however, billing is slow and bills are issued, in some cases, up to six months late. The quality of the meters, both production and consumer, is somewhat suspect since most of them were installed long ago. WSSA has recently embarked upon a program to replace all the production meters in its system. Replacement of consumer meters for project towns will be included as part of rehabilitatiorn or expansion schemes under the proposed Project. The collection to billed revenue ratio is satisfactory (over 902), since there is a strong tradition of paying bills received from government institutions. Improvements in billing are expected as the Organization and Management Study recommendations are implemented, improved billing systems are installed and adequate numbers of trained financial staff are in place. Past Financial Performance 3.24 During the relatively short period since its establishment in November 1981, WSSA has experienced a phenomenal growth in its operations. Most of the 170 urban water systems for which WSSA currently provides water have been taken over in only the last three years. Its urban operations are expected to cover all operations, maintenance and capital costs from water tariffs and other charges. while its rural operations are expected to cover operations and maintenance costs. Recruitment of suitably qualified accounting staff has not kept pace with the rapid growth in its operations, and as a consequence, financial information including sources and application of funds statements and balance sheets have not been prepared at the WSSSU level and thus they are not available for overall WSSA consolidated operations. WSSA is presently taking a detailed stock of all of its fixed assets, which will allow for preparation of balance sheets by mid-1990. WSSA's income and sources and application of funds statemsnts (unaudited) for its overall operations for the last three years are presented in Annex 12 and its operating position is summarized in Table 3.1 below: - 37 - Tabl- 1.1: WSSA SUMARY OPERATING PERFORMANCE FOR FY1986/86-1987/88 (Dlri '000) 065/6 66/67 67/66 Water Sold (1,000 .8) 4,173 6,298 10,243 Average Tariff (SIrr/m8) 0.78 0.76 0.83 Operating Revenues 4 065 5 909 11.796 Operating Expenditures Mg M11 Operating Incom Before HQ Exp"" 200 146 667 3.25 The above table shows that even vithin a short period of two years, WSSA's volume of water sales has more than doubled and its total revenues have increased almost three times. Average tariffs have increased slightly, and if Headquarters expenses are excluded, WSSA is earning a surplus from its operations. However, this apparent surplus is primarily due to the fact that depreciation is not charged, since fixed assets have not been valued and also becau¶.e investments have been financed largely with grant funds with no consequent interest charges. 3.26 WSSA's main financial problem stems from the lack o: an adequate financial management information system which was identified u er the Organizational and Management Study. WSSA has accorded the hit !st priority to improvements to financial management in its overall plans for improving WSSA organization and management. As mentioned previously, implementation of recommendations for improvements in this area are expected to commence by the time of negotiations oi the proposed IDA Credit and continue for about 12-18 months. By the end of this period, it is expected that a system of accounts will be installed at WSSA headquarters and in a selected group of its regional and WSSSU operations (including project towns) and that an adequate number of accounting staff will be appointed and trained for overall WSSA operations to be prepared by the end of FY90/91. In order to install the accounting systems and train staff in their use for the remaining regional offices and WSSSUs, assistance has been provided under this Project to carry on with this task. It is expected that by the end of FY95/96, sound financial management systems and practices should be in place in WSSA. During negotiations agreement was obtained that WSSA would install the new financial management systems in its head office by December 31, 1991 and thereafter WSSA would, on a priority basis, install these systems and train staff in their use in the WSSSUs covered under the Project. Tariffs 3.27 Tariffs and other charges related to water supply vary from one WSSSU to the other. The following is a summary of the range of these charges. Water Supply (Piped) - Birr 0.5 - 1.5 per m3 Public Standpipes - Birr 0.5 - 0.75 per m3 Meter Rents - Birr 0.5 - 1.00 per month - 38 - Revenues from connections - Average charge for making a connection is Birr 250 based on length of pipe. About 302 of this charge is a profit for WSSA. The existing schedule of tariffs in the various WSSSUs are the same as they were when WSSA took over these systems from the various municipalities. No changes or adjustments have been made, although a proposal is being considered to change the meter rents based on pipe size. WSSA management, so far mainly concerned with taking over new systems, is aware that the tariff system needs to be rationalized. Terms of references have been prepa'red to carry out a tariff study which will, inter alia, (a) develop national or regional tariffs or continue with the individual WSSSU tariffs, and (b) adopt a system of differentiated tariffs based on volume of water consumption and the level of service. The tariff study is to be carried out by WSSA's own staff, supervised by the Financial Adviser placed in WSSA under the UNDPIWorld Bank project, and is expected to be completed by end- March 1990. Agreement was obtained at negotiations that, when completed, the tariff study be submitted to IDA for review and the results and recommendations of the study are discussed with IDA prior to their implementation. Future Financial Performance 3.28 As mentioned earlier, the present state of WSSA accounts does not allow tne kind of analysis that is requived to prescribe any kind of overall financial discipline for WSSA. Steps are being taken to address this situation and it is expected that by the time implementation of this Project is complete, the situation will improve considerably. This Project should, therefore, be viewed as an instrument for strengthening WSSA's overall financial management, which can only be achieved gradually and over a substantial period. While policies for overall financial strengthening of WSSA are developed, measures can be introduced to improve the financial performance of individual WSSSUs. Accordingly the financial discipline proposed to be adhered to by WSSA under this Project would apply only to the operations in two towns - Assela and Shashemane - where major investments are being made under this Project. 3.29 Detailed financial projections for the period 1988/89 through 199912000 including income statements, sources and application of funds statements and balance sheets, for the two prcject towns implementing major expansion schemes and the assumptions on which they are based are presented in Annex 12. The projections are based on the assumption that the costs of construction in the two towns will be financed from a loan at 1.5? interest rate to be repaid over 26 years, with 6 years grace and about 25Z from a government contribution (to cover primarily taxes and duties on imported goods), in aceordance with current practice. Internally generated funds would be required to cover interest on the loan during construction and provide for building up an adequate level of working capital in the two towns. Generation of internal funds is largely dependent on adequate tariff increases being implemented during the project implementation period. In addition, implementation of proper tariffs would also allow the two WSSSUs to generate enough funds after the end of the project period to finance their foreseeable expansion needs. Over the period 1989-97, the tariff increases required are estimated to increase in Assela from Birr l.15/m3 to Birr 1.60/m3 (392) and in Shashemane from Birr 1.12/m3 to Birr - 39 - 1.25/m3 (12Z), based on the significant expansions of the systems and the resulting impacts on water sales. 3.30 Gross fixed assets will grow about 6 times in Assela and about 7 times in Shashemane. Based on higher tariffs and increased sales of water, debt service would be adequately covered in each of the two towns. Upon completion of the tariff study referred to above, some progressivity in the tariffs is expected to be introduced, which should ensure affordability for the lower income populations in these towns and will also contribute to constraining demand. Based on the above, agreement was obtained at negotiations that WSSA will adjust the water tariffs and other water related charges in Assela and Shasheuane so that in each town individually and starting in FY1993/94 the total revenues from water supply services will be sufficient to meet all operation and maintenance expenses, and the higher of depreciation or debt service, in each fiscal year. D. Housing and Savings Bank Background and Organization 3.31 The Hctsing and Savings Bank (HSB) was established in 1975 as the only bank with a mandate for mortgage lending. It is a Government- owned savings and loan association under the supervision of the National Bank of Ethiopia. USB's loans are provided primarily to housing cooperatives, private individuals and state enterprises for construction and purchase of single family dwellings and commercial buildings. While it is permitted to finance real estate for private businesses, it has approved few loans to this sector within the laet three years. The bank is empowered to raise funds by accepting savings and time deposits and by borrowing. USB would be expected to administer the housing loans under the proposed Project and has demonstrated satisfactory administrative capacity in implementing a similar housing loans program under the prior IDA- supported First Urban Development Project. It currently operates from a large head office in Addis Ababa and has ten branch offices located in Addis Katema, Asmara, Awassa, Debre Zeit, Gondar, Jimia, Nazareth, Dire Dawa, Bakr Dar and Dessie, reflecting geographical patterns of current housing demand. It also plans to extend its branch network further throughout the country with the proposed establishment of branches in Goba, Assela and Aseb in the 1990-92 time frame. 3.32 In practice, the majority of HSB's lending in terms of value of loans has been to state-owned enterprises for non-residential buildings. These typically large loans are the most cost-effective for HSB to administer and reflect the priority given to state enterprises in obtaining access to the limited supplies of building materials at controlled prices. However, in accordance with its mandate and with Government policy, there has been a major increase in lending to housing cooperatives during recent years. Over the last three years, HSB has approved about 2,500 loans totalling approximately Birr 30 million to self-help housing cooperatives under the IDA-supported First Urban Development Project. H£B management has indicated that one of its key objectives over the near term is to place more emphasis on residential lending and lending to housing cooperatives and the lower-income groups. Whereas previously a financial limit was placed on the size of a residential loan, this no longer applies as current regulations prohibit construction of new houses above 70m2. A schedule of - 40 - loans approved over the last five years by class of borrower and total value is shown in Annex 13. 3.33 The organization is headed by a General Manager and his deputy and has recently been reorganized into seven departments which manage accounting, credit, control, administration functions, engineering services, legal services, and research and planning, as shown in Chart 7. The reorganization completed in June 1988 was designed to separate head office policy and supervisory functions from the day-to-day banking operations, most of which are transacted at the head office branch. The number of HSB's staff has grown from 315 in 1983/84 to 474 in June 1989, keeping pace with the expansion in business and the extension of its services through the opening of branch offices. During this period, the value of HSB's advances to borrowers per employee increased by 282 while the number of loan approvals processed increased by about 300Z, demonstrating a greater efficiency ln its operations. However, while the senior management is well-qu.lified and experienced, HSB is currently facing a shortage of qualified staff at middle management level in all departments. Furthermore, its management information requirements and overall information systems strategy need to be reviewed in light of its anticipated growth and changing technology. During negotiations agreement was obtained that HSB carry out an internal review by June 1991 of its overall information requirements, including requirements for software, hardware and manpower development and implement recommendations after discussion with the IDA. It is expected that HSB would seek guidance from the National Bank of Ethiopia on the information and computer requirements. An allowance for software, hardware and training requirements have been provided for under the Project. 3.34 Administration of the proposed housing loans included under the Project will accentuate HSB's own perceived need for additional training for middle management to support present growth and to provide succession to senior management. Areas in which academic and on-the-job training are particularly required over the next five years include: (a) on-the-job training ir. the engineering aspects of slum upgrading, and design and construction of low-cost housing; and (b) post-graduate academic courses in architecture/civil engineering, international economics and banking, business administration, and training methods and skills. Support is proposed to be included under the Project for a suitable training program. In addition, the spread of the housing projects over distant locations will not only require a strengthening of HSB's engineering supervision and appraisal capabilities but will also require that the additional personnel be supported by additional vehicles and equipment, also proposed for inclusion under the Project. Financial Policies and Performance 3.35 Past Performance. HSB has performed well in an environment of strict government regulation over its activities. Its operating performance for the five-year period is summarized below in Table 3.2 and detailed in Annex 13. Mortgage assets have grown steadily from Birr 219 million to Birr 368 million or by 682 over the period, anc operating surpluses increased from about 14X to 56Z of operating ,evenues during the period. This improvement reflects the fact that while operating revenues increased by about 342 due to the growth in the volumr, of lending, - 41 - operating expenses decreased by 312 due to the overall lowering of interest rates in 1986|87 and HSB's greater efficiency in loan administration. As a result, accumulated deficits improved from -Birr 3.7 million to -Birr 0.5 million over the period. In 1987188 HSB had an average cost of borrowed funds of about 22, an average return from mortgages of 62, and an average spread on operations of about 41. Despite these significant achievements, HSB's overall financial position is weak primarily as a result of the 1975 nationalization of urban land and properties which had a severe adverse impact on its loan portfolio and as a result of other Government policies. In order to address HSB's weakness, agreement was obtained during negotiations that HSB complete a housing finance study under the Project by March 31, 1993. The study would be expected to identify measures necessary to gradually move HSB towards more competitive, market-oriented banking practices in the future and address the policy issues described below. Table 3.2: HSB SUMMARY OPERATING PEFFORMANCE, 1983184-1987/88 (Birr million) --------------------------------------------------------------__---------- 1983/84 1984/85 1985/86 1986/87 1987/88 ------------------------------------------------------------__------------ Operating Income 17.7 19.9 20.4 19.4 23.8 Operating Expenditures 15.3 16.5 17.5 8.9 10.5 Surplus before Tax & Provisions 2.4 3.4 2.9 10.5 13.3 Tax (50Z) 1.2 1.7 1.4 5.3 6.7 Provision for Bad Debts 1.5 1.5 1.5 2.5 3.5 Surplus after Tax & Provisions (0.3) 0.2 0 2.7 3.1 3.36 Interest Rate Policies. As for all banks in Ethiopia, interest rates charged and paid by HSB are set by the National Bank of Ethiopia. The most recent revision to interest rates occurred in July 1986, when a structure of interest rates was introduced which, in terms of costs, (a) favored cooperatives relative to government-owned enterprises which benefitted when compared with individuals and private organizations and (b) favored housing construction relative to all other sectors. The interest rates applicable for housing development by cooperatives became 4.5Z and by individuals became 71 and for purchase of houses by individuals became 82. The interest rate applicable to state enterprises for non-residential construction also became 82. 3.37 Interest rates on savings deposits earn 62 per annum on accounts with balances no more than Birr 100,000 and 2Z on accounts with higher balances. Interest rates on time deposits vary from 7.5Z per annum for private individuals investing for five years to 1Z for financial and government institutions which are only allowed to place funds in one year time deposits. Most of the time deposits, which represent 842 of HSB's - 42 - total debt and equity financing, are invested in by the insurance sector and Government pension funds which earn only 1Z. Since inflation is currently estimated at about 4X, interest rates paid by HSB on the bulk of deposits are negative in real terms. Although interest rates paid on these time deposits are unattractive, by law the insurance companies and pension funds are required to place specific levels of deposits with HSB and these deposits are normally rolled over automatically, since other investment opportunities are not available. This directed and subsidized funding provides a disincentive to HSB to mobilize its own resources and adversely affects the development of pension and insurance funds as a major source of funds over the longer term. A housing finance study included under the Project will, therefore, examine interest rate and directed credit policies and recommend appropriate pricing principles and sources of funds required to support a housing finance system which is expected to be expanded in the future as the bottlenecks to housing production are removed and housing policies are revised. 3.38 Mismatch of Borrowing and Lending Maturities. HSB mortgages for residential purposes have maturities up to 30 years, but are typically for 20-25 years since the loans must be fully repaid by age 55. For state enterprises borrowing for non-residential purposes, loans may have maturities up to 20 years, but 10-15 years is typical. Lastly, loans to private businesses are for a maximum period of 10 years. However, these loans are primarily financed by savings and one-year time deposits, which together account for 91? of total debt and equity financing. Although these deposits have grown steadily, HSB's heavy reliance on such deposits to finance its growing medium- to long-term mortgage portfolio may present a high level of term intermediation risk in the event of a sudden call on deposits. HSB's mortgages are variable-rate instruments, but if the low- cost time deposits are to be withdrawn by Government, a major impact on the demand for and type of loan offered by HSB could result. Thus the survival of HSB is a function of the Government continuing to decree that its pension plan and insurance corporation continue to invest in time deposits and automatically roll them over. To mitigate against this risk, HSB's corporate objectives call for an increase in longer-term sources of finance and increases in its equity capital. The prior IDA Credit which was largely passed on as an equity contribution and the proposed IDA Credit which is expected to be passed on as a long-term loan would contribute significantly to improving the financial structure of HSB. 3.39 It should also be noted that state capital of Birr 6 miii!on has the nature of debt rater than either common or preferred equity due to the fact that a capital charge' of 52 of original paid-in capital is paid annually regardless of profitability or of the existence of accumulated deficits. In the past this contributed to reducing HSB's equity base to Birr 2.3 million as of end-June 1984. but this trend has been reversed to Birr 5.5 million as of end-June 1987 as lending volumes have increased. About Birr 8.3 million passed on to HSB from the proceeds of the first IDA Credit was converted to an equity contribution during 1987/88 as per the original agreement, and this has helped to restore HSB's real equity to a positive position. HSB is also expected to receive an additional injection of Birr 4 million of permanent capital from Government over the next three years. Debt to equity ratios thus have been reduced to more reasonable levels, with a total debt to equity ratio of 30:l (as compared to about - 43 - lOOt0 previously) and a long-term debt to equity ratio of 1.7:1, based on balances as of end-1987188. 3.40 Collection Performance. HSB's collection performance has been adversely affected by the 1975 nationalization of urban land and properties mentioned previously. Currently about Birr 20.5 million of loans (or 5Z of the total outstanding balance of loans as of end-June 1989) secured against nationalized properties are non-performing. Government has compensated HSB for these loans secured against nationalized properties an amount of Birr 8.4 million in accordance with a previous decision. In order to adequately cover the loan balances at risk, hSB plans to increase the provision for bad debts by Birr 3.5 million per year over the next three years. When added to the current provision for bad debts of Birr 13.2 million as of June 30, 1989, HSB would then have an adequate cushion of Birr 23.7 million against possible losses on these loans. 3.41 Regarding its mortgage loan portfolio not affectedi by nationalization, about Birr 9.8 million of loans (or 2? of outstanding balance of loans as of end-June 1989) are in arrears over three months, although thia decreased from about Birr 16 million (about 6Z of outstanding balance) some 24 months earlier. HSB has recently initiated an action program to reduce arrears, and this has resulted in significant improvement over the period June-September 1989, during which time balances in arrears were further reduced to Birr 8.4 million. During negotiations, agreement .-a obtained from HSB that it would continue to implement an action program acceptable to IDA to reduce the level of arrears on its non-nationalized portfolio and that arrears will not exceed 31 of the related outstanding mortgage balances. 3.42 While HSB has been increasing its provision for bad debts more regularly on an annual basis over the recent past, the current provision is considered inadequate when compared with the total loan balances at risk. Adequate provisioning for all non-performing loans would leave HSB in a position of net capital deficiency, in which total liabilities exceed the net realizable value of its assets. During negotiations agreement was obtained that HSB continue to undertake an annual review of the quality of its mortgage portfolio and set aside regular annual provisions for bad debts. 3.43 A further Birr 9.2 million (or 2? of outstanding loans) are under various stages of litigation, although judgments have been reached in HSB's favor or loans are currently being rescheduled for about 80? of this amount. Cumbersome legal procedures make foreclosure and resale time- consuming on loans under advanced legal procedures. HSB, along with other banks, is currently working with Government to reinstate auctioning procedures which would more quickly permit it to recover its losses on loans taken to foreclosure. 3.44 The current system for calculating taxes, however, does not in practice allow HSB to treat bad debt provisions as a charge against income before tax. In addition, interest is accrued on loans which are in arrears, thereby boosting pre-tax income on which there is an initial provision for taxation at a rate of 50Z. Provision for any related bad debt is then made out of after tax income. A further payment equal to 40X of remaining profits, termed "residual surplus," is then paid to - 44 - Government, even when HSB is in an accumulated deficit position. Thus there is a transfer of hSB's capital to Government when it is in a deficit position. These accounting and taxation policies would also be reviewed as part of the housing finance study mentioned earlier. 3.45 Future Performance. Resource requirements for housing finance loans necessary to support the level of housing development proposed for the project towns would amount to about Birr 17.1 million, of which about 75Z is assumed to be provided from the proceeds of the IDA Credit. The remaining 25X is expected to be provided from HSB's internally generated funds, primarily savirgs and time deposits which have been growing steadily in the past and are exrected to continue to grow over the project period. In order to manage this volume of lending, HSB has reviewed its staffing requirements and requirements for establishing branches or other arrangements for administering loans in areas outside of Addis Ababa. HSB proposes to establish a Project Implementation Unit based in Addis Ababa and reporting to its Deputy General Manager to coordinate appraisal and lending activities for the Project, with some of the market towns being handled from existing or new branches and others being handled from Addis Ababa. 3.46 Projections of HSB's financial performance over the period 1989/90-1998/99, including income statements, sources and applicatioas of funds statements and balance sheets, are shown in Annex 13. The projections have been prepared assuming that (a) there is an increase in the -roportion of lending to cooperatives versus state enterprises, (b) interest rates earned on advances would average approximately 62 per annum over the period, (c) savings and time deposits would grow in accordance with past performance, (d) the provision for bad debts would be substantially increased, and (e) the proceeds of the IDA Credit would be passed on at 1.5 2 interest rate to be repaid over 26 years, with 6 years grace on repayment of principal. On this basis, HSB would be expected to maintain a healthy spread of at least 3S on borrowing and lending operations. HSB's overall profitability in the early project years is expected to be reduced by the need to increase provisions for doubtful debts and by the fact that making such provisions cannot be offset against income for tax purposes. The projections show that HSB's cash holdings will be reduced from about 15-202 of total deposits, which is typically considered an adequate level, to about 8-9Z, but this is not considered serious since deposits are unlikely to be withdrawn suddenly. HSB's total debt to equity ratio is forecast to improve from approximately 36:1 to 15:1 by the end of the forecast period, but is still considered to be somewhat high. The additional equity contribution of Birr 4 million recently agreed to by Government would help HSB to further improve its financial structure and cash balances to more acceptable levels. E. Agricultural and Industrial Development Bank 3.47 The Agricultural and Industrial Development Bank (AIDB) was originally established as a governcent-owned share company under Ethiopia's commercial code in 1960 and was re-established as a public corporation in 1979. Its basic objective is to extend loans to the agricultural, industrial and other sectors of the economy, financing such loans by raising resources at home and abroad. It is the primary source of investment finance for small-scale manufacturing activities. Small-scale - 45 - enterprises (SSEs) licensed by HASIDA and requiring finaneial support for setting up manufacturing activities are directed by HASIDA to AIDB. In addition to providing funding, including foreign exchange, the Bank also carries out a limited amount of project identification for long-term investment through its branch network. It is also prepared to assist applicants with the general design of their projects and with market assessment. 3.48 Although it is the primary institution offering financial assistance to SSEs, AIDB lends relatively little to small enterprises and few SSEs make use of its facilities. Generally, its a'tivities must be regarded as, at present, marginal from the point of view of the small-scale sector. However, recently the Bank has displayed a growing interest in small-scale enterprises. A Small Industry Division has been set up, and the Bank is moving towards granting a measure of autonomy in lending to local offices, increasing in number, which will most likely result in the awarding of a greater number of SSE loans, especially outside Addis Ababa. 3.49 AIDB has been the recipient of a number o- IDA Credits. It is currently administering an IDA-supported fourth ind~ttrial line of credit (Credit 1275-ET) and was recently appraised and approved as financial intermediary in the IDA-funded Peasant Agricultural Development Project (PADEP). Hence, IDA is actively supporting AIDB to strengthen aspects of its operations. AIDB is also working with a number of other international agencies and governments. An upcoming, IDA-supported Export and Enterprise Develcpment Project to be appraised early 1990 is expected to further addreas AIDB's current financial and institutional weaknesses, including its problems with collections (particularly of its State Farm portfolio), sources of finance, regulatory and incentive systems as well as review the likely impact on AIDB of proposed macro and sectoral reforms already agreed to by Government. 3.50 The proposed lines of credit to micro- and small-scale enterprises to be administered by AIDB under the Project amount to about Birr 14.5 million, to be advanced over a 5-6 year period. On average, this level of lending is equivalent to less than 1 112S of AIDB's approved advances in 1986/87. The loans advanced would add only a further 3? to AIDB's 1987/88 deposits and terms loans excluding State Farms, and the maximum interest payments associated with the borrowings would represent only some 2Z of estimated non-State Farm 1987/88 interest expenses. Hence, the Project would have a r-rginal impact on AIDB's overall financial situation, and consequently, it is not considered that the Project would raise any new financial issues. 3.51 It is expected that a training program with an emphasis on branch office staff would be undertaken by AIDB to cater to the micro-scale enterprise lending component, a first time experience for AIDB. The staffing and other arrangements for assisting the micro- and small-scale enterprises were discussed and agreed during appraisal. AIDB's organization chart is shown in Chart 8. F. Handicrafts and Small Industry Dsvelopment Agency 3.52 The Handicrafts and Small Industry Development Agency (HASIDA) was set up just over a decade ago 'to promote, coordinate and regulate the - 46 - small-scale nanufacturing and handicraft sector," both for co-operatives and small privately-owned concerns. 3.53 The forms of support ostensibly offered by HASIDA are4 as follows: (a) Legal/regulatorys Assistance with acquiring a licence to operate, and such other permissions as are required for manufacturing. Assistance with the formation and registration of artisans, handicraft, producers and service cooperatives: (b) Facilitating: Assistance with borrowing from the AIDB. Assistance with access to foreign exchange, especially for current purchases, though sometimes for capital spending; (c) Planning: Formulating and implementing sectoral policies and plans; (d) Operational: Assisting (non-financial) with procurement of materials and equipment and also with marketing. Advising on production technology and on management techniques and assisting with auditing (cooperatives only); (a) Training: Organizing training programs, seminars and demonstration centers; and (f) Research: Carrying out surveys of the small-scale sector. 3.54 The performance of HASIDA, the key support agency for the small- scale sector, is mixed, but overall falls short of the comprehensive underpinning implied by the list set out above. In practice, the Age-icy concentrates on assisting the cooperative sector and has relatively little impact on small-scale privately-owned enterprises. 3.55 HASIDA is a relatively young organization and is still in the process of building up and consolidating its professional staffing, which is weak in certain important areas. Its training activities have, as yet. been limited in scope; it is currently training around 250 persons per annum (90Z of whom are its own employees) and offers short seminars to around 1,000 external participants annually. HASIDA training has been described as "limited in scope, and diversity, and in extent of coverage" especially as far as private sector enterprises are concerned. 3.56 Some 40-60 projects are appraised each year and a data bank of nearly 140 possible projects has been built up with the help of foreign consultants. Assistance with procurement of materials inputs, credit and foreign exchange is provided, on average, to about 200 clients annually. HASIDA has also been involved, to a limited extent, in directly productive activities, in the development and sale of improved (labor-intensive) equipment (mainly for weaving); in the setti;Lg up of one pilot industrial cooperative project; and in promotion and sale of certain handicraft products. A number of surveys of the small-scale sector have also been carried out. - 47 - 3.57 Thus, although HASIDA is now involved, in varying degrees, in all of the activities comprising its range of functions, the extent of this involvement is modest. The vast majority of the 7,684 small-scale manufacturers identified by HASIDA in the most recent survey are completely unaffected by it, once the initial licensing process is completed. And while the cooperative sector undoubtedly derives some benefit from HASIDA's efforts, the Agency has been unable to prevent the cooperative movement from declining in recent years, or to have any decisive or lasting impact on the cooperatives. Furthermore, the requirements for registration of enterprises with HASIDA are such as to exclude many micro-scale enterprises so that HASIDA is effectively debarred from assisting the smallest-scale enterprises in the sector. 3.58 However, two important changes, current'v in process, seem likely to improve HASIDA's potential capacity for Fupporting SSEs. Firstly, the anticipated reorganization of the Agency into six sectoral divisions appears to provide the opportunity for a more direct involvement with small-scale private manufacturers. Second, Ethiopia's regional administrative restructuring seems likely to increase the autonomy of local offices of HASIDA and to induce these offices to become more directly concerned in identifying and promoting SSEs. Technical assistance is expected to be provided through the Project to support HASIDA's branch offices in assisting the micro- and small-scale enterprises in project locations. The staffing and organizational arrangements for HASIDA's involvement with micro-scale enterprises were firmed up during appraisal. HASIDA's organization chart is shown in Chart 9. - 48 - IV. FINANCIAL ANALYSIS A. Cost Recovery Sites and Services 4.01 The actual costs of on-site roads, drains, and water and electrical services would be recovered directly by project municipalities from the residential beneficiaries of the six sites and services schemes through plot development charges. Differential serviced land pricing will be employed whereby middle-income residential plots would be sold at higher unit prices than average development costs in order to lower the prices of the lower-income residential plots, to better ensure affordability to this target group. The development charges would be recovered from beneficiaries, once their houses have been completed, over 25 years at an interest rate of 4.5Z. Since all urban land is owned by the Government, the municipalities would also collect a land lease charge frum the residents. During negotiations agreement was obtained that MUDH ensure that project municipalities recover on-site infrastructure costs from beneficiaries through plot development charges and levy land lease charges for use of the land. 4.02 Mortgage loans would be extended to the residential beneficiaries at HSB's prevailing terms for development of houses, about 50? of which would be constructed through self-help and about 50? of which would be constructed by municipalities. Loans for self-help construction would be advanced in tranches with a 10? advance, a 15? payment when foundations are completed and further advances against work completed. It is expected that a portion of the loans would be advanced in the form of building materials. The loans would be recovered at interest rates of 4.5? from cooperatives and 7X from individuals over periods of up to 25 years, depending on the age of the beneficiary, with a one year grace period on repayment of principal, roughly corresponding to the house construction period. Interest would be required to be paid during the construction period. In accordance with HSB's normal practices, no down payments would be required for beneficiaries who participate in cooperative building arrangements. However, since the loan amount is fixed and cannot be irkcreased during the construction period if construction costs increase, beneficiaries typically must make significant contributions. Other beneficiaries would be required to make down payments of 5Z or 10?, depending on income levels. Mortgage loans for purchase of finished houses constructed by municipalities would be advanced at an 8? interest rate to individuals to be repaid over periods up to 25 years. 4.03 Loan recipients would be required to pay HSB's charges for mortgage redemption insurance (typically about 8? of the loan amount) and administration and appraisal services (22 of the loan amount) which would be added to the loan amount and repaid over 25 years. In addition, a monthly payment (amounting to about Birr 3-4 per month) would be charged to the mortgagees for fire insurance and recovered along with the monthly mortgage payments. 4.04 The recurrent costs of the on-site roads and drains, street lighting and refuse collection would be recovered by project municipalities - 49 - through property taxes and refuse collection fees. The recurrent costs of the water and electricity services would be recovered by WSSA and EELPA, respectively, through tariffs in line with levels elsewhere in the towns. Municipal Infrastructure/Vehicles 4.05 The investment costs associated with the roads and drainage improvements, minor bridges, extension of power mains, and maintenance and other vehicles, which together account for about 82 of the total project cost, would be recovered indirectly through property taxes and general municipal revenues. These components are unsuitable candidates for direct cost recovery because beneficiaries and the value of individual benefits are, in general, impossible to identify; the imposition and collection of benefit charges would not be a cost-effective way of raising revenues, or because services are traditionally and appropriately provided by the cities and funded from general revenues. Investment costs associated with revenue- generating facilities such as the market improvements would be recovered through market fees. Water Supply Improvements 4.06 The capital costs of the water supply expansion schemes would be recovered through water tariffs, as discussed previously in para 3.30. Micro- and Small-Scale Enterprise Development 4.07 Business loans provided by AIDB to micro- and small-scale entrepreneurs would be recovered through loan repayments. Loans for existing and new SSEs would require a 302 equity participation towards the investment cost, and would be repaid at AIDB's prevailing terms, at an interest rate of either 6Z for cooperatives or 9? for private entrepreneurs over 5-10 years. Loans for micro-scale entrepreneurs would be a new feature of AIDB's normal lending practices and would be provided primarily to household enterprises owned and operated by women. The loans would be advanced at the 6? interest rate and would be repaid within about one year. Micro-scale entrepreneurs would be required to contribute towards a savings account/guarantee fund as part of their repayment obligation. During negotiations agreement was obtained on the terms for lending to micro- and small-scale enterprises. B. Affordability Sites and Services 4.08 Housing Types A and B to be constructed by self-help would cost between Birr 5,300 and Birr 7,800 approximately (base costs excluding infrastructure costs and contingencies) dependent on type and town. The Type C, which would be a finished unit constructed by local contractors, would cost between approximately Birr 15,600 and Birr 21,000 (excluding infrastructure costs and contingencies), depending on location. Infrastructure costs would range from approximately Birr 1,600 to Birr 2,100 (base costs) per plot, depending on location of sites. - 50 - 4.09 Based on the above costs estimates, housing Types A and B would be affordable by families with monthly incomes of between Birr 186 and Birr 240 (based on the most expensive housing location - Mizan Teferi) or approximately the 55th percentile and above of the urban income distribution. The finished Type C (medium income units) would be affordable by those with incomes above Birr 500 per month, which accords with the incomes of the target group, namely middle- and senior-range development officers. Annex 3 shows house costs and repayment requirements for the most expensive case (i.e., Mizan Teferi) and also shows the proposed mix and numbers of plots nf each type proposed. The criteria for selection of beneficiaries meeting these income levels were discussed and agreed during appraisal and are described iu: Annex 3. During negotiations agreement was obtained that MUDH ensure that serviced plots are allocated to the targeted income groups according to the beneficiary selection criteria. Water Supply Improvements 4.10 In accordance with the latest statistical data, it is assumed that there are 5.6 persons in the lowest income households, with 2 wage earners: 1 person fully employed, with a minimum wage of Birr 80/month and 1 person employed part-time with a minimum wage of Birr 25/month, or with the same income from the informal sector. The average per capita water consumption in the low-income households is assumed to be 17 I/day. The total monthly water consumption of the household would therefore be 2.85 m3. At the present tariff in Assela, and assuming a house connection, a low income household would pay Birr 3.2, which is about 32 of total household income. At the projected 1997 tariff level and assuming no increase in income levels, the proportion of income required would increase to about 4Z for the typical low-income household. The following table summarizes the percentage of household income spent on water in the two project towns: Cost of water in percentage of household income (Low Income Group) Present Projected Assela 3.1 4.3 Shashemane 3.0 3.4 4.11 As 52 or less of monthly income of low-income families is generally considered affordable, the required increased tariffs would not place an undue burden on the urban poor. A large portion of the low-income population, however, buys water either at the public water selling points, where tariffs are about 30? less, or from other families or vendors. In the latter case, water may cost about 30Z more. In order to improve the basic needs provision and to keep the cost of water within the affordability of the low-income groups, the Project is designed to increase the number and density of public water selling points in the towns. In addition, consideration would be given to the introduction of a progressive tariff structure, to keep the tariffs at more affordable levels for the lower-income groups. This is presently under consideration by WSSA and the Government, and also included in the terms of reference of the tariff study (para 3.27) to be undertaken during the early years of project implementation. - 51 - V. PROJECT JUSTIFICATION AND RISKS A. Economic Justification 5.01 The Project would build upon and extend the progress achieved in Addis Ababa under the First Urban Development Project in alleviating urban poverty and improving environmental and living conditions to priority market towns in the main areas of agricultural potential. This would be accomplished in part by strengthening the management and financial capacity of institutions which play important roles in urban development and administration, and more specifically through the provision of housing, urban infrastructure and assistance designed to spur the growth of business activity and non-farm employment in these towns. Improvements in solid waste disposal, drainage, sanitation facilities and the supply of potable water would lower health risks and the widespread incidence of water- related diseases and reduce the corresponding loss of family income. Road improvements would likewise reduce traffic congestion and the costs of vehicle maintenance and transportation. The sites and services components would increase the supply of accommodation, helping to alleviate the current severe shortages in these towns. The technical assistance and loans programs for micro- and small-scale enterprises would enhance manufacturing production, generate additional jobs and raise the incomes of the workers concerned. The upgrading of markets would reduce losses due to spoilage and facilitate increased sales of agricultural produce. The methodologies for calculating the economic rates of return for the various components are described in detail following. Sites and Services 5.02 The estimated rental values of dwellings to be constructed under the Project were used as the measure of the economic benefit of the six subprojects. In the absence of reliable indicators for market rents or prices from house sales, imputed rental values are based on prices paid for local hotel rooms, which are the only quasi-market indicators available. All on-site infrastructure, house materials, skilled and unskilled labor and recurrent maintenance costs were considered in the analysis and adjusted to exclude taxes and duties and estimated inflation costs. Also included in the cost stream was an estimate of the opportunity cost of land, which was estimated to be Birr 2 per m2, derived from pre- nationalization prices in similar locations inflated by the retail price index. Foreign exchange costs and unskilled labor were shadow priced utilizing Bank guidelines to reflect more appropriate economic costs.13 Costs as well as benefits were considered over a 25-year period. On this basis, the ERks range from a low of 122 in Mizan Teferi to a high of 16? in Ambo and are shown in Table 5.1 below. Sensitivity analyses, allowing for a 102 increase in costs or a 102 reduction in benefits, had no significant impact on the ERRs. 13/ Shadow prices for foreign exchange at Birr 3.5 - 1 US$ and for unskilled labor at 2/3 of actual wage. - 52 - Table 5.1: ERRS FOR SITES AND SERVICES (Z) Base Costs Benefits Case + 1o0 - 10l Ambo 16 14 14 Arsi Negele - - - Assela 15 14 14 Goba-Robe 14 12 12 Mizan Teferi 12 11 11 Shashemane 15 14 13 Wollisso 14 13 13 Ziway - - - Weighted Average 14 13 13 Market Improvements 5.03 Improvements to markets in project towns comprise some combination of surfacing of the marketplace, installation of market stalls and toilet facilities, and expansion of the marketplace on adjacent sites or close by. Benefits for projects whereby surfacing of the marketplaces are undertaken are based on modest estimates of the value of trade and the assumption that losses due to spoilage from dampness, mud and water would be reduced by 52. Benefits for projects whereby new market stalls are provided are estimated on the assumption that additional revenue would be generated from fees paid by stall holders, at Birr 16.5 per month per stall. Benefits for projects whereby expansions of the marketplaces are undertaken are estimated on the assumption that the projects would result in a 251 increase in revenue from market fees (except for Mizan Teferi for which a 10% increase is assumed because of the limited room for expansion). Market revenue is estimated from data supplied by municipalities on the number of plots, peddlers and animal sales and the fees charged for each. All improvement costs have been included and have been adjusted for taxes, duties and inflation as well as for shadow prices of foreign exchange and unskilled labor. Costs as well as benefits were considered over a 25-year period. The ERRs range from a low of about 12% in Ziway to over 40% in Assela and Goba-Fobe and are shown in Table 5.2 below. Towns with lower rates of return are those where the erection of market stalls are the only improvement proposed. The high rates for Assela and Goba-Robe reflect the low costs of improvements relative to unusually high volumes of trade. Sensitivity analyses were also conducted but had no significant impact on lowering the ERRs. The ERRs for market improvements in phase two towns are expected to be similar. - 53 - Table 5.2: ERRS FOR MARKST IMPROVEMENTS (1) Base Costs Benefits Case + 10o - 10l Ambo 29 27 26 Arsi Negele 33 30 30 Assela 42 39 38 Goba-Robe 42 39 38 Mizan Teferi 31 28 28 Shashemane 13 12 12 Wollisso 19 16 16 Ziway 12 10 10 Weighted Average 36 33 33 Water Supply Components 5.04 ERRs were calculated for the two schemes in Assela and Shashemane for which major extensions of the water systems are to be undertaken. The estimated incremental revenues were used as a measure of the economic benefit of the schemes. Incremental revenues include revenues from water sales as well as from connection fees and meter rents. All costs of civil works, equipment, design and construction supervision and recurrent costs were included in the analyses and adjusted to exclude taxes, duties and inflation as well as for shadow prices of foreign exchange and unskilled labor. Costs as well as benefits were considered over a 40-year period. The ERRs were calculated at about 5? for Assela and 4.5? for Shashemane. The ERRs fall within the acceptable range (i.e., 4- 8Z) of ERRs for water supply projects. Significant other benefits, including health benefits resulting from the use of safe water and improved sanitation, are also expected but are not possible to quantify. Municipal Infrastructure 5.05 Further unquantifiable benefits would accrue from the road and drainage improvements in project towns and which amount to about 5? of the total investments proposed for these towns. In most cases, the roads to be improved are short stretches of less than 1,000 meters, designed to aid circulation by connecting markets or new housing developments with the existing network. The drainage components are designed to alleviate occasional flooding, to prevent erosion and to protect roads. Taken together with the water supply and sanitation improvements, the drainage works can be expected to make a significant contribution to reducing the high incidence of water-related and eye and skin diseases prevalent in these towns. - 54 - Overall Proiect 5.06 The weighted average ERR for the Project, for components for which benefits could be quantified and which amount to about 782 of the total project cost, is 13Z. The detailed calculations of the ERRs are shown in Annex 14. B. Project Impact on the Urban Poverty Population 5.07 About 69-862 of families in project towns have incomes less than the urban poverty threshold of Birr 238 per month,14 as shown in Annex 15. The needs of these poverty populations are addressed in part by all project components. The project would benefit the urban poor by improving the supply of low-cost housing, by redressing deficiencies in infrastructure and thus _mproving environmental conditions, and by providing access to credit for the lowest income families for small business activities. The sites and services component in the six project towns would provide about 50 of the 1,080 housing units for families in the urban poverty group. The major water supply extension projects in the two project towns would alleviate service deficiencies which are most severe among the urban poor. The benefits of the markets, roads and bridge improvements would be roughly proportionately distributed among the cities' populations, thereby benefitting a large number of impoverished families. The micro-scale enterprise component would be specifically targeted to very poor households with monetary incomes of up to Birr 50 per month. Support for SSEs would also help to generate additional jobs, most of which are expected to be for semi-skilled and unskilled workers. 5.08 The Project would also benefit the urban poor by reducing disease, which they are most exposed to and least able to combat. Although it is not possible to assess accurately the impact of the project on the health of the urban poor, the components for drainage, sanitation and especially water can be expected to significantly improve environmental and health conditions. Statistics compiled by hospitals and health centers in the project towns show a high incidence of water-related diseases among local populations. For example, in Robe, eye diseases affect 46 people in every 1000, dysentery a similar proportion, various skin diseases 75 per 1000, and helminths 117 per 1000. Assuming that project interventions reduce the incidence of these diseases by a modest 202, which research has shown is highly plausible, there would be considerable savings in the loss of days from work and school and associated earnings. C. Project Impact on Women 5.09 The Project would result in significant direct benefits for women. In Ethiopia today, the handling and carrying of water is the exclusive responsibility of women, and women bear the health risks 14/ It is assumed that the urban poverty threshold in project towns is the same as that for Addis Ababa, since prices of controlled items vary little between towns, and for uncontrolled items the lower costs in provincial towns of some comodities are largely offset by the higher costs of others. - 55 - associated with unsanitary water sources. Expansion and improvement of the urban water supply systems in project towns would therefore benefit a large number of women directly. Similarly, the marketing of food is carried out almost exclusively by women in urban areas, and thus the improvement of agricultural markets in project towns would directly benefit women primarily. The Project will take special care to ensuLe that the housing components do no discriminate against women, either in the allocation of plots or in their participation as contractors or laborers in the construction activities associated with the schemes. 5.10 The Project would also facilitate the .ocognition of women as impottant contributors to household income and community economic development by initiating appropriate, gender-specific design measures to better ensure their participation. The Project is expected to contribute to increased productive employment time for women, as well as to significant increments in their household enterprise productivity and enterprise asset base through the micro-scale enterprise component, which will be specifically targeted (at least 50S) to women. The savings program to be initiated will further improve the status of women by assuring them an account, albeit small at the outset, which will be in their name only. Worldwide experience has demonstrated that as women improve their economic standing in the household, expenditures on nutrition and education increase within the household and their status within the family is enhanced. D. Employment and Income Effects 5.11 The project will generate both directly and indirectly a significant number of jobs for unskilled and semi-skilled workers and enhance incomes through increased household fixed assets and formal sector savings. In addition, the employment assistance programs would result in increased production of basic goods and services which would be delivered at very low capital investment costs, utilizing labor-intensive technologies and a high degree of local materials. 5.12 About 1,200 jobs, at a cost per job created of less than Birr 10,000, would be developed through the credit and technical assistance program aimed at both existing and new SSEs. Through the micro-scale support program directed to the informal sector, it is expected that approximately 12 diys of additional work would be generated per month for each of the estimated 15,000 beneficiaries, having a 3ignificant impact on household incomes among the very poor, most of which are expected to be women. The requirement for these micro-scale enterprises to contribute part of their earnings to a savings account/guarantee fund would increase savings from the beneficiary peasant households. In addition to these significant employment benefits, the construction associated with the physical implementation of project components would expect to result in substantial employment generation for unskilled and skilled laborers. At an estimated cost of Birr 15 per day for skilled labor and Birr 3 per day for unskilled labor, it is expected that about 1,225 new jobs of one year of work would be created in total in the eight project towns through the promotion of local sub-contractors and use of local labor. 5.13 Indirectly, the components for small-scala businesses Lnd the improvement of markets will also generate further employment and income in - 56 - the eight towns and their hinterlands. Surveys conducted by NUPI and others in similar regions indicate that as much as 80Z of consumption expenditures are devoted to purchases of food, particularly among rural and poor urban households, and much of the remainder to purchases of basic household goods and services. Given that nearly all the food and many of these goods and services are locally produced, these surveys suggest that as much as 601 of spending attributable to the additional household income that results from the Project will accrue to local farmers and town businesses, representing a further boost to incomes and the demax,d for both farm and non-farm labor. E. Project Risks 5.14 Being the first project of its kind in Ethiopia, the Project would have a number of risks. The implementation capacity of MUDH and project municipalities in carrying out a complex, integrated urban development project of this order of magnitude to-date is untested. To reduce this risk, the detailed implementation arrangements would be fully identified and agreed with all concerned project agencies prior to project start-up, adequate staffing arrangements would be in place and a high level, Project Advisory Committee would be established to resolve difficulties which may arise, thereby helping to ensure smooth project performance. 5.15 In addition, there is uncertainty of the municipalities' abilities to achieve adequate revenue improvements in order to contribute their share of project capital costs, repay project loans and provide for increased recurrent expenditures. In order to minimize the risk of inadequate revenue improvements in project municipalities, a unit would be established within MUDH at the onset of the Project to assist with implementation and monitoring of improvement measures. 5.16 The risk of tariff increases not being implemented as required for political or other reasons applies to the water supply components. Although few tariff increases have been introduced since the Revolution, there is a higher probability of tariff increases for water systems undergoing major capital works than for others. Monitoring WSSA's performance in this area would be a major focus of IDA supervision. 5.17 For the sites and services housing components and other civil works, there is the possibility of a shortage of required building materials. In order to mitigate against this risk, especially for the housing components, imported materials will be purchased up-front in bulk supply by UDPO on behalf of HSB. Agreement has already been reached between the two agencies on the arrangements for the bulk purchase of imported materials. 5.18 Further risks center around the micro- and small-scale enterprise component due to the current constraints affecting establishing of new enterprises and development of existing ones. The constraints include the lengthy legal requirements and licensing regulations, limited access to raw materials and foreign exchange, and complexity of bureaucratic procedures relating to SSEs. In addition, weakness'es inherent in the SSE sector itself, including the lack of managerial skills and - 57 - professionalism and obsolete equipment act as risks to successful project implementation. These risks are expected to be reduced given the new priority attached to promotion of SSEs by the Government and through current efforts between the Government and IDA to support needed policy reforms in the SSE sector. Credit assistance provided under the Project should ensure adequate foreign exchange for improvementiconstruction of required facilities and purchase of equipment, dnd technical assistance would help to ensure that viable projects and entrepreneurs are supported. The component is also expected to be implemented on a flexible basis, such that if new businesses do not materialize due to lack of improvement in start-up requirements, the lines of credit can be re-directed to assisting existing businesses. - 58 - VI. AGREEMENTS REACHED AND RECOMMENDATION Condition for Negotiations 6.01 Prior to negotiations, the following condition was met: (a) WSSA would commence the work to improve its accounting and financial management systems (para 3.22). Agreements Reached During Negotiations 6.02 During negotiations, agreements were obtained regarding: (a) UDPO managing the bulk purchase of building materials for the house construction program on behalf of HSB and entering into an agreement with HSB by June 30, 1990 on the bulk purchasing arrangements (para 2.09); (b) criteria for selecting small-scale enterprises and micro-scale enterprises to ensure that women will be the primary participants (para 2.15); (c) on-lending arrangements of the IDA Credit (para 2.33); (d) staffing and organizational requirements for MUDH, UDPO, WSSA, HSB, AIDB and HASIDA which would be maintained over the project period (para 2.40); (e) composition of a high level, Project Advisory Committee which would be established by June 30, 1990 and maintained over the project period (para 2.41); (f) land availability for the Project (para 2.42); (g) arrangements for establishing and operating the Special Accounts for HSB and WSSA (para 2.53); (h) auditing requirements of the Project (paras 2.54 and 2.55); (i) MUDH reviewing the impact of other capital investments exceeding Birr 100,000 on the financial viability of Ambo and Shashemane municipalities to be undertaken from own resources and discussing the findings with IDA prior to permitting the undertaking of other capital investments in these towns (para. 3.13); (j) establishment within HUDH by June 1990 of a Financial Management Consultancy Unit to introduce improved tax collection and accounting procedures first to project towns and later to other towns throughout the country (para 3.14); (k) WSSA upgrading.of its finarate units of its reg'onal offices and taking other appropriate actions, to be agreed with the - 59 - Association, to properly staff these departments by June 30, 1990 (para 3.19); (1) WSSA installation of new financial management systems in its head office by December 31, 1991 and thereafter WSSA installation of these systems and training of staff in their use, on a priority basis, in the WSSSUs covered under the Project (para 3.26); (m) WSSA submission of the tariff study, when completed, to IDA for its review and discussion of the recommendations with IDA prior to implementation (para 3.27); (n) WSSA adjustment of water tariffs and other water related charges in Assela and Shashemane so that each town individually and starting in FY1993194 will maintain total revenues from water supply services at sufficient levels to meet all operation and maintenance expenses, and the higher of depreciation c,r debt service, in each fiscal year (para 3.30); (o) HSB carrying out of a review by June 1991 of its overall information requirements, including requirements for software, hardware and manpower development and implement recommendations after discussion with IDA 'para 3.33); (p) USB undertaking a housing finance study by end-March 1993 (para 3.35); (q) HSB continuing to implement an action program to reduce arrears on its non-nationalized portfolio and that arrears will not exceed 32 of the related outstanding mortgage balances (para 3.41); (r) HSB continuing to undertake an annual review of the quality of its mortgage portfolio and set aside regular annual provisions for bad debts (para 3.42); (s) HUDH ensuring that on-site infrastructure costs associated with the project towns' sites and services developments be recovered from beneficiaries through plot development charges and that land lease charges are levied for use of the land (para 4.01); (t) terms for lending to micro- and small-scale enterprises (para 4.07); and (u) beneficiary selection criteria for allocating housing plots (para 4.09). Condition of Effectiveness 6.03 During negotiations, agreement was obtained regarding the following condition of effectivenesss - 60 - (a) that Goveriment has entered into subsidiary loan agreements with WSSA, HSB and AIDB (para 2.32). Conditions for Disbursement 6.04 During negotiations, agreement was obtained regarding the following conditions for disbursement: (a) HMUDH preparing a detailed marketing plan for sale of finished houses to government development officers as a condition for disbursement on the finished housing component (para 2.06); and (b) Government concluding a financing agreement with each project town as a condition for disbursement on the housing and municipal infrastructure and municipal equipment/vehicles components (para 2.29). Recommendation 6.05 Subject to the above, the Project is suitable for an IDA Credit of US$40.2 million equivalent at the standard IDA terms with a maturity of 40 years. The Borrower would be the Government of Ethiopia. - 61 - ANNEX 1 Page 1 of 4 ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Criteria for Selection of Proisct Towns 1. A detailed account of the procedures and criteria adopted by the consultants in selecting the towns outside Addis Ababa to be included in the project is given in the report 'Identification of Project Areas and Investment Components' dated December 1987, and in a supplement dated January 1988. The procedure followed three steps, starting with the identification of priority sub-regions, then districts within selected sub- regions, and finally the towns within selected districts. At each step, selection wos based on two broad criteria reflecting the project's objectives of strengthening the urban system in support of agricultural production. 2. Sub-regions were ranked according to economic performance as indicated by agricultural surplus and level of urbanization. Agricultural surplus was represented by measures of population density, characteristics of land use, and the current farming system. The level of urbanization is the proportion of the population residing in urban areas. 3. Districts were ranked according to measures of agricultural performance and potential, and urbanization. The former included land use, the proportion of crops and livestock that is marketed, use of inputs, and productivity of land. The latter included proportion of population in urban centers and rate of growth of urban population. 4. Urban centers were ranked according to five criteria, which includedt three indicators of economic performance, for agriculture, manufacturing, and trade and commercee the population size of towns; and a composite index of the fiscal resources of municipalities. 5. Given the tight time frame originally proposed for the preparation of this project and its appraisal, NUPI decided at the outset to restrict the selection process to those sub-regions for which relevant data was readily available, in effect Shows, Arsi, Bale, Sidemo and Gamo Gofa. This was justified on the grounds that the project was viewed as the start of a process of integrated urban development to be replicated later in other regions of the country. The selection process initially yielded six candidate towns, ranked as followss Akaki, Shashemane, Arsi Negele, Assela, Awassa and Debre Zeit. 6. At a torkshop in January 1988, several goVernment agencies discussed these draft proposals (see 'Proceedings of the Workshop on Ethiopia - Develo,ment of Regional Urban Systems"). Following comments raised at the worlkshop, selection criteria were amended to include capitals of the new administrative regions, and the list of towns was modified - 62 - ANNEX 1 Page 2 of 4 substantially. Six towns were added - Wollisso, Ambo, Ziway, two towns located close to each other, Goba and Robe. and MHiarn Teferi, which was originally excluded for lack of data but which was widely regarded as being an area of high agricultural potential. In exchange, three towns were dropped: Akaki, Debre Zeit and Avassa, because they were already the location of several major development projects. The rankings of the selected towns are shown in Table 1 below: Table 1: TOWN RANKINGS BY VARIABLES Shashe- Arsi Variable mane Negele Assela Zivay Goba A 4 7 6 8 9 B 9 8 3 7 1 C 1 8 6 3 4 D 9 3 8 7 4 E 5 3 7 1 4 F 8 7 2 3 1 G 3 8 2 9 6 H 8 3 5 2 4 I 4 5 8 9 2 J 8 4 6 3 5 K 8 3 5 2 4 ------------------------------------------------------------------------- Total: 67 59 58 54 44 Rank: 1 2 3 4 5 Variables: A - Crop marketed as Z total 1986/7 district production. B - Volume of crop marketed. C - Manufacturing employment as Z total employment. D - Urban population per tradelservice establishment (low ranks high). E - Urban population (0008). F - Rural population (0009). G - Pate of growth of urban population. H - Average municipal revenue (Birr 000s). I - Rate of growth of municipal revenue (0008). J - Average net recurrent revenue (Birr OOOs). K - Average annual mumnicipal capital expenditure (Birr 000s). Note: Rankings for Ambo, Wollisso, Robe and Hizan Teferi are not available. - 63 - ANNEX 1 Page 3 of 4 7. After this selection of towns had been completed, the GOE requested that coverage of the Project be expanded to include a more representative uample of towns spread throughout the country. Specifically, the GOE proposed that eight further to ns be added from other regions not presently represented. These ares Bahir Dar, Debre Berhan, Woldia, Asbe Teferi, Debro Tabor, Arba MUnch, Bedele and Awassa. To avoid delays in implementing the project, It ws agreed that these eight additional towns be included In a second phase to be funded separately after detailed studies have been carried out. Llmited support for market imrpovements and employment schemes would, however, be provided under the Project. 8. Table 2 provides a partial listing of urban centers in Ethiopia. This Includes all towns with more than 20,000 population, all towns propoaed by the consultants, plus the eight additional towns proposed by the GOE, and all the identified centers of the newly defined administrative regions. Two of the thirty regional centers remain to be identified. - 64 - NNEX 1 Page 4 of 4 Table 2: SELECTED URBAN POPULATION IN ETHIOPIA --------------------.----------------------------------------- Regional Project Population Region Town Center Town 1984 --------------------_--------------------------------_--_----- Population > 1,000,000 Addia Ababa Addli Ababa x x 1,412,575 Population 100,000 - 1,000,000 Eritrea Asmara x 275,385 Population 20,000 - 100,000 Diredava Diredava x 98,104 Debub Wello Dessie/Kosbolcha x 84,630 Semen Gonder Gonder x 80,886 Misrak Shoe Nasret x 76,284 Misrak Harerghie Harer x 62,160 Tigray Mekele x 61,583 Illubabor Jima x 60,992 Mirab Gojjam Bahir Dar x phase 2 54,800 Addti Ababa Akak4lBesekal 54,146 Misrak Shoa Debre Zeit 51,143 Misrak Goousn Debre Markos x 39,808 Arsi Assela x phase 1 36,720 Sidamo Awassa x phase 2 36,169 Misrak Shoa Wonji Gefersa 35,420 Bale Gob&-Robe x phase 1 34,256 Debub Shoa Shehemane phas* 1 31,531 Asseb Asseb x 31,037 Wellega Nekeatie x 28,824 Eritree Karen 26,149 Semen Shoo Debre Berhan x phase 2 25,573 Semen O. Sodo 24,592 Sidamo Dill. 23,936 Misrek Hernrghie Jijiga 23,183 Semn Omo Arba Minch x phase 2 23,030 Population < 20,000 Nirab Shoe Ambo phase 1 17,325 Hireb Shoe Wollisso x phase 1 16,811 Semen Welo Woldia x phase 2 15,690 Debub Gonder Debre Tabor x phase 2 15,306 Debub Shoa Arsi Nagele phase 1 13,096 Boren, Negel* Borena x 11,997 Hierab Asbe Teferi x phase 2 11,344 Illubabor Bedele phase 2 6,988 Debub Shoa Ziw y x phase 1 6,585 Kaffa Mizan Teferi x phase 1 5,988 Gambela Gambela x 4,492 Debub Onio Jinka x 4,480 Asosa Assose x 4,159 Ogaden Gode x 1,622 Total. 2,928,799 …_________________________________________________-__________ - 65 - ANNEX 2 Page 1 of 7 ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Description of Prolect Towns This annex includes a brief description of each of the provincial towns included in the Project. Table 1 sumarizes a number of key indicators for each of the phase one towns, including population growth, characteristics of the housing stock, provision of infrastructure, housing construction, income distribution, and the labor force. The information is derived from the draft final feasibility reports prepared by NUPI. Table 2 summarizes similar information for the eight phase two towns. 1. Ambos is situated on th. main Addis Ababa highway and is the capital of the wereds (district) of the same name. The town has been growing slowly through natural increase and little in-migration, at a rate of about 2.22 per annum over the last four years. Ambo is surrounded by an area which produces an agricultural surplus, 222 of total land being under cultivation, 83X of which is annually cropped. The major functions of the town are trade (both retail and wholesale), services and government. Manufacturing accounts for about 82 of total employment. Compared with other towns, the number of workers earning over Birr 300 per month is high. Although water, power and roads seem to be quite adequate, there is a major shortfall of housing. The key prolect comPonents include provision of housJng and construction of roads leading to the housing site. 2. Arsi NeRele: is located on the main road from Addis Ababa to Shashemane and on to Kenya. It is an important market town with one third of its employment in trade and related activities. However, its commercial functions are often overshadowed by Shashemane which lies 25 km. to the south. The town has been growing at about 4t a year recently. It is a major market outlet for agricultural produce and livestock. As in the other towns, there is a shortage of housing and infrastructure facilities. The agricultural market also suffers from problems of congestion and flooding. The key proiect components are the development of a new market and upgrading of the major roads within tha town. 3. Asselat is the capital of Arsi administrative region. It is a major commercial and service center in a fertile and productive agricultural area. The town contains 402 of the district population and has a history of consistent population growth at about 52 per annum. Services account for over half the total employment, the other [mportakt sector being trade. Assela is similar to the other towns as far as housing and infrastructure facilities are concerned, with the housing situation being poor and most utilities inadequate. - 66 - ANNEX 2 Page 2 of 7 The key Pro1ect components apart from housing include the construction of - bridge over the Kembolcha River to the southeast of the town. 4. Hizan Teferri: is to be the capital of Kaffa province under the new administrative system. The town is dominated by one major enterprise, the Bobeka Coffee Plantation Cooperative, which is located 40 km. distant. Employees and their families number 50,000, which compares with the town's population of only 7,600. There is no information on the earlier growth of the town, but over the last four years, the population is estimated to have increased at 5.52 a year. Coffee and cattle are the main sources of income for farmers in the surrounding area. The town functions mainly as a small rural service center, though it provides few services to the coffee plantation, despite being heavily dependent on it. Housing and infrastructure follow the sam pattern as in other towns, but the shortage of power is more acute. The key iroiect comionents include power expansion, construction of drains and market improvements. 5. Gobas is the administrative capital of Bale province and is connected by an all-weather road to Addis Ababa through Shashemane. It also has an airport. Goba has been growing steadily at around 52 per &nnu,, the main functions being trade, government and agricultural services, with government employing about 602 of the labor force. Considerable potential exists for increasing agricultural productivity in the hinterland, which at present has only 62 of the iand under cultivation. The condition of infrastructure is similar to other towns, and there is a major shortfall of homning. A aw wator supply system ws completed by the end of 1988. The key projcot components include construction of drains at all road intersections and major commercial crossing points. S. Robet is the administrative capitol for Sinans wereds and is located about 15 km. from Goba. The two towns are to form one municipal jurisdiction as the center of the new administrative region. Between 1970 and 1984, the town quintupled in size, due largely to substantial in- migrations only 272 of the males over 25 years of age have livod there for more than 10 years. Livestock Is an Important activity in the rural hinterland and there *xists considerable potential for raising agricultural productivity. Services and trade are the major sectors, the former employing 602 of the labor force, and there are about 30-40 small-scale establihbments in the town. The town suffers from a shortfall of housing, poor drainage, and a lack of road maintenance. The key wro1ect componants with highest priority are construction of roads, Improvement in drainage and general upgrading of the market. 6. Shanhemane: is located at the junction of roads to Addis Ababa, Gamo Gofa and Goba, and this ha given rise to considerable trading activity around which the economy of the town revolves. Its population has grown steadily and over the lst four years ia estimated to have been - 67 - ANM I Page 3 of 7 Increasing at about 72 per annum. Cereal and livestock production are the major agricultural activities in the hinterland. In the town itself, trade is the dominant sector with more than 402 of employment followed by services with another 402. As with other project towns, there is a widespread lack of infr"atructure, especially power and housing. The k-y proiect components include the re'ds and drainage bmprovements, which are considered essential for relieving congestion problems. 7. Wollisso: is the center of the wreda bearing the same name. It has been growing at an average rate of 2.42 per annum. Trade and services are major activities, goverment being another growth s-ctor in terms of employment. As in the other towns, the housing situation seems to be poor and most infrastructural facilities are inadequate. The town derives a large portion of its income from taxes on chat (leaf crop) grown in the surrounding district. The key groiect components include the construction of new roads to provide better access to the market and housing areas. 8. Ziwavs is located on the main Addis Abab- road to Kenya. It lies 4muediately adjacent to Lake Ziway and has gained importance as a fishing canter. Recently, the town has been growing rapidly at about 8.62 per nnum, due to high in-migrations over 252 of males over the age of 25 have arrived in the town in the last two years. In the surrounding rural areas, much of the land remains underutilized. Fishing in Lake Ziway is an important activity but suffers from a shortage of supporting facilities such as storago and equipmnt. About 402 of total employment is in the government sector followed by services and agriculture. Agricultural employment (mostly horticulture) is proportionately much higher than in other towns. Flooding is the single most important infrastructure problem in the town. The key pro1ect components are alleviation of flood problems and improvement of the drainage system in addition to improvement of roads and the provision of housing. Table 1: SUMMARY STATISTICS FOR PHASE ONE PROJECT TOM4 Ambo Arsi Asslea Misn Cobs Robe Shashe- 8ollisso Ziway Variable N.9l- Tod-rl M1n- Population: 1966 8,69 n/. 1N,3JO n/. 11,626 2,156 7,S40 1,3J0 1,269 1984 17,942 14,021 32,964 6,66t 23,006 11,768 32,700 16,611 5,513 1968 (eat) 19,966 16,406 49,100 7,66 28,06 14,606 41,396 19,76 7,366 1993 (eut) 24,206 20,696 51,269 10,200 87,569 19,669 55,369 24,769 10,169 1998 (est) 29,40 24,830 66,36 13,660 49,666 24,866 70,669 31,5690 13,56 Annual growth rate 1966-84 2.72 n/a 8.86 n/a 6.OX 13.60 8.0% 3.7x 3.61 Annual growth rate 1984-88 2.2X 4.4 6.861 6.X 5.611 6.6x 7.1X 2.41 16.J% Housing Characteristics: Number of Houeholds (HH) 8,976 2,706 7,233 1,420 6,282 2,176 6,898 3,729 1,143 Average people/NH 4.3B 6.20 4.60 4.20 4.46 6.40 6.40 5.20 4.60 Average HHs/ unit 1.O9 1.65 1.08 1.09 1.1i 1.11 1.09 1.12 1.07 Number of housing units 3,687 2,686 6,7a9 n/s 4,860 1,9067 5,669 3,319 1,664 Tenure S unite ownd 64.7X 56.81 44.6X n/s 61.6X 76.91 65.41 43.7X 41.31 X units rented 46.3X 46.41 66.41 n/a 39.0X 29.11 44.61X 6.31 68.7X Provision of Infrastructure 1 units direct water supply 40.6X 42.6X eo.ox n/a 6.0X 8.44 48.3X 10.25 47.25 X units without toilet 60.0X 64.0X 60.6X n/a 58.61 44.7X 49.31 67.0% 62.11 X unite with electricity 81.0X "6.1% 80.61 n/a 60.6% 46.61 76.61 76.06 68.31 o Rent levels (birr per month) less than 5 61.69 67.76 61.61 n/s 86.20 66.26 18.30 76.10 62.16 6 - 9 23.10 34.80 23.10 n/s 16.66 16.86 39.66 13.69 16.19 1 - 29 10.60 5.80 19.56 n/n 16.16 10.10 43.89 7.39 22.20 ore than 3B 14.78 1.66 14.70 n/a 6.90 6.98 7.46 4.10 9.6e Housing Construction Newly completed units 169 1N 117 54 134 n/a 866 6 163 Under construction Be 24 204 n/a n/a 362 n/a 23 189 Now applications 179 163 179 196 87 79 n/. 86 189 Inco Distribution: (birr / month) X lons than ll 36.9 27.76 32.60 64.80 47.8 40.80 $2.80 47.39 46.20 X from 1a - 199 28.39 86.60 42.40 17.90 26.e 27.10 42.4U 27.16 26.26 U from 266 - 299 12.10 5.90 9.90 7.9 183.46 9.9S 9.96 8.60 15.46 X more than SW 283.6 26.86 14.90 9.56 14.69 22.40 14.98 17.26 18.26 Economically Active Population: Agrlculture 176 631 289 n/a 564 238 746 221 271 Mining and quarrying 19 0 21 n/a 9 63 6 0 4 Manufacturing 324 220 488 n/a 232 53 423 373 34 Utilities 41 4 48 n/s 23 24 62 46 19 Construction 63 26 131 n/s 46 99 171 N9 29 Co mmrce 1,470 7 2,196 n/ 016 668 4,014 1,911 148 Transport 76 1,324 210 n/a 46 94 667 96 78 Services 1,714 1,289 4,426 n/s 2,91C 1,226 3,836 1,669 433 oQ Working age population 4,074 3,628 8,182 n/a 4,681 2,469 16,121 4,616 1,718 Labor participation ratio 0.24 0.26 0.26 n/a 0.20 6.21 6.31 0.27 9.31 4. E oJ - 69 - AINNU 2 Poge 5 of 7 Phase Two Towns 1. Arbe Mincht Arba Hinch is to be the regional center for the Semi-n Omo administrative region. The surrounding area is considered to be of high agricultural potential, with the main crops being cereals and cotton, while fisahng and crocodile breeding are the main activities on the lake. Commeree and services account for most urban employment, but a big textile factory is under construction in Abaya, a few kilometers away. The population has grown rapidly since 1966, due mainly to in-migration, and was estimated to be around 29,300 in 1988. The housing situation is poor, with only 371 of all units having a direct connection to water. 2. Asbe Teferi: Located on the main road from Addis Ababa to Dire Dawa and Harar, Asbe Teferi will become the regional center for Mierab region. The land to the south of the town is classified as having lower agricultural potential. Sorghum, maize, barley and chat are the main crops, and nearby is a major forest area. The wereda is a net importer of grains, but an exporter of livestock. Agriculture accounts for about a third of urban employment, and services a little more. Average annual household income for the vereda is estimated to be Birr 694, which is substantially higher than most others, due mainly to livestock production. Over the past 15 years, the population has been growing slowly, below the rate of natural increase, suggesting out-migration, and by 1988 had reached about 12,900. Given its new status as a regional center, the growth rate of population can be expected to increase. 3. Avassa Located on the main road from Addis Ababa to Kenya, Awassa will remain the regional center of Sid-mo administrative region. The surrounding land is classified as an area of high agricultural potential, with 12S of the total land in the wereda under cultivation, and a further 62 under grasing. The service sector accounts for the largest share of urban employment, about 381, followed by agriculture with 322 and manufacturing with 141. The town's population hs been growing at 71 in recont years, and reached 47,800 in 1988. Housing conditions are poor, with only 5S of dwellings connected to wator. 4. Bahir Dar: BIhir Dar is located in an area classified as producing a surplus, and having a high agricultural potential. Within the surrounding wereda, some 272 of land is under cultivation, and yields are close to the national average, the main crops being millet, teff, noug, maize and field peas. The town is to be the administrative center for the Mirab Goojam region, and is also the major induitrial conter in the north west of the country, with a large textile factory empioying some 3,000 workers. The population has been growing at 61 in recent years, reaching an estimated 69,700 in 1988. About half the households *re owner- occupiers, which is higher then usual in urban areas. The town has no sewerage system. 5. Bedelet Bedelo Is located to the west of Addis Ababa on the road to Meke. Although It ha not been designated a regional administrative centor, it is situatod an the edge of an area classified as having high agricultural potential, wmd is considered a surplus producing - 70 - ANNEX 2 Page 6 of 7 region, even though food output Ln recent year was below requirements. The main *gricultural products are cereals and coffee. The population has been growing around 51 a year, reaching 8,500 in 1988. 6. Debre Berhan: Located on the main road north from Addis Ababa, Debre Berhan in to be the center of the Semen Shoo administrative region. The land to the west of the town Is regarded as an area of high agricultural potential, though currently yields are lowy and output is usually below requirements. Cattlo raising is an important activity and contributes a major share of local incom. It is also one of the few towns with significant manufacturing activity, accounting for over 2,000 workers, or 181 of the urban employment. It was an important town in the past, but in reeent years has been growing more slowly at about 41 a year, reaching an estimated population of 30,200 ln 1988. 7. Debr- Tabor: Debre Tabor is expected to be the center of the Debub Gonder administrative region. It is located in an area considered to be of lower agricultural potential, and yields are below average, although a-=* 271 of the wereda is under cultivation, mainly for cereals. Cattle raising is also Important, and average household incomes are higher than average at Birr 410 per year. Agticulture, mining &ad quarrying each account for over 2O0 of urban employment. The 1988 population is estimated to have been close to 18,000. 8. Woldiat Woldia Is to be the center for the Semen Welo administrative region. It Is located on the main road north of Addis Ababa, on the edge of a lower potential agricultural area. Yields are low, and it is not considered a surplus-producing area, although significant purchases are made by the Agricultural Marketing Corporation. Main products are sorghum, teff, and horsebeans. Population growth has been modest, reaching 18,400 in 1988. :;n~ *$-n l n592 Wlil oi,SJ 0o134011nats Jew, * ~ ~~~m l £9 ; 3 t i' iW ' Istltse s a Etl Iii mt eu * 351 e 3" S _ - SLS 63 l n * u 3U tl Mt *1 89 "I,IiflB I1U UE lii 5U'tt aL't 96 6t :e::1 g;'t # * u - Mtl t Att Jawt "tb uIV Out 11i1' LIS .3.. Sl'S 6lS *156 1*56; .J.tI :ueV 1gd *Atv 4113S-413@ .m . 1 .3.. ILl US 6*6M"I - at W s *e-~~~~~N" UI MIT 21-8 * -" "I " 6" 0"_ -s .*.6 -38 3U*- K's 1* 569 LIt w - _ S alit Ol- ti *$,S W1 SOt 8191 1L51 - 1 - Mt S it .393 l' 1 Snii "INt t'" *." 0" 0191 no" ('i.t jed j'IS) .1.'#1 t lt5 *MIS MIS MIS ff91 MOO Moe ores ',iftJta,e lots tI. S |w19 *e-" n1t9 st-s ON t" "II0 14-Ui "I n MM MIS USE ILlS 5551~~~nlo MIS 5161 *wl1 LIMdeS 40190 IJIP 3t10 5 WtW08J01 40 0*181Uad -661 189 - t| sos sit -sw un s*t u.. .tg-s i'.u t*si LU 166 653 il I1t 2 8w1 PM" "tI" s j oJl -"9 §-tt M-gS M"s out"-" 0- 9se w"S 1~~~si " ' 1'' 1 ' t n'l I mlet 90V 1 oug mt_ _ 63i 1tI- Mi1 1v1' *ILl 61 sri sr: ,gmm /s s-t or. m-e us, 51 s. tt n- wg' 1t'g gg,E ;Z t iSIS; 66* L 83'1 (isi 'p*- e8 ' M't wIt M't MO M1 ML lt "l "-ls I oma 'e.lm .4.9 .1.We ." * e-" e* fl -@ * "*g t ese "Si lo ILUSI Alt'5 gt'tt tL'3t itst"V tLIM 596Git m':ln (VW) NOT mtig s.;t t116 11th' ml"U 1MILD, ill'ti 6136a (w) vat mtlst g"'t 1l'"g sale mllt 699 Mott1 wel" MT ii.'.; :m'sa Wo's elm U'n 61is's no's ust 5 6 5 1 ?e Me3 t L I * M 1 60- t 1'0 *9161 9651 - ---- ----- ----- ------- ------ ----- ----- .... --- ---- --- --- - -- -----: 18 1 d SNWO1 133I@0d OJL *SI1. 1109 S313lUIlS Ayni :Z *Iqel - 72 - ANNEX 3 Page 1 of 8 ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Sites and Services Component Background and Program Formulation 1. A fundamental concept of the Project is to support Government efforts to develop sel-cted towns in regions of the country of gonerally high or potentially high agricultural productivity. Eight regional towns (Phase 1) were selected for inclusion in the Project with limited support for a further eight towns (Phase 2). The towns, which generally have very modest levels of infrastructure and municipal services, need to develop to better support growth of their hinterlands. 2. Apart fr-n infrastructure and service level deficiencies (see Annex 4), all towns face acute housing shortages. This i8 not only affecting the indigenous residents of the towns creating overcrowding of existing housing stock, but is also hampering the regional development plans of government. The deficiency in available housing within the Project towns, together with the shortage of hotel accommodation, has meant that key workers (those contributing to the economic development of the selected towns) have been unable to find suitable houses in which to live. Many of the workers are government employees, seconded to regional offices, often from Addis Ababa. 3. The housing program in the Project towns would thus aim to begin to meet demands from two target groups - existing low-income residents of the towns who would construct their own houses through self-help and key workers for which finished houses would be offered for sale. Although 'key workers' for the most part own or rent houses in the capital, it is the intention that such workers would be encouraged to purchase houses in the project towns. However, it is possible that a small proportion of the finished houses may not be sold to government development officers, in which case they would be offered for sale to town residents who have been subletting rooms to development officers. The criteria for beneficiary selection are sot out in Appendix 1. The detailed modalities for marketing of the finished houses will be finalized prior to any disbursement of the IDA credit for the finished housing. 4. The consultant's feasibility studies estimated housing demand in the respective towns for each household income group, and the mix of housing options proposed attempts to meet a proportion of the demand across all income groups in as balanced a manner as possible. - 73 - ANNEX 3 Page 2 of 8 Program Ob1-ctives S. The objectivos of the housing progrsm in the Project towns ares (a) to begin to more effectively address the acute housing shortage of the existing populations of the respective towns (85% considered as low income, i.e., below Br. 300 per month income), and; (b) to assist in providing finished housing for key government development officers to enable such workers to reside permanently in the towns, thus supporting the government's efforts to stimulate economic activity in the project towns. Detailed Description of Proaram 6. The housing program is proposed in six phase 1 project towns outside Addis Ababa and would provide a total of 1,080 sites and services plots as follows - Ambo 100, Assela 300, Goba and Robe 100 each, Mizan Teferi 80, Wollisso 200, and Shashemane 200. Of these houses, 50S would be targeted at the existing low income residents of the town where basic core and core +1 room units would be built. The remaining 502 of units would be core +2 room 'finished' units, which would be available for purchase by key government d-velopmert officers for imnediate occupancy. 7. Suitably located sites have been identified in each phase 1 town, layouts prepared and detailed engineering has been carried out. Basic access and water supply to the sites is available at all sites and only minimal extensions to the electricity supply network are required in two towns. On-sfte infrastructure has been designed to basic standards with unpaved access and unlined drains although individual water and electricity connections are proposed; pit latrines will be provided on plots with four latrines generally sharing one pit. 8. Efficient land use has been achieved in the layouts (652 saleable area), although plot size. proposed are larger than Addis Ababa (160 m2) reflecting the more 'rural' nature of the towns and the reduced pressure or land availability. Three house typologies will be utilized; the core house Type A with a basic core and utility block (kitchen and latrine) )f 22 6 m built up area; Type 8 consisting of the core plus ine room nd the utility block totalling 32.8 m2; and Type C consisting of a core plus 2 rooms plus utility block totalling 44 .3 m2 without washroom and 46.04 m2 with it. A fourth type (Type D) consisting of core plus 3 rooms plus utility block totalling 61.4 mi built up area has been designed to guide future plot build out. Generally layoutr to accommodate additional plots have been prepared with the program proposed representing only a first stage of site development. - 74 - ANNEX 3 Page 3 of 8 9. Although layouts have allocated space for community facilities, for the numbers of units proposed construction of facilUties will not be required during the life of the Project, and thus funding ha not been included. Similarly no industrial or commercial plots are proposed. Protram Costs and FinancinA 10. The total cost of the component is estimated at Birr 15.08 million (US$7.29 million) net of duties and taxos, of which the foreign exchange component Is estimated at approximately 302 or Birr 4.43 million (US$2.14 million). 11. Building costs in the project towns are higher than in the capital, reflecting, inter alia, additional transportation, costs of matorials to the towns end the fact that in som towns black cotton soils predominate which necessitate additional earthworks and foundation treatments. Contractor-built housing costs (i.e., Addis Ababa based contractors supplying matorial and constructing) in the towns ars in the order of 300S higher then In Addis Ababa. It is proposed that Type A and B units will be constructed through self-help (cooperative groups) for the low income local people with local contractors engaged by the town administrations building the Typ C finished units. Both would use materials purchosed in bulk through the Project. In this way, costs will be kept to a minimzm making unlts affordable to the target groups. 12. Types A and b built by self-help means would cost between Birr 5,300 and Birr 7,800 approximtely (base costs "eluding infratructure and contlngencies) dependent on type end town. The Type C finished unit would cost between approximtely Birr 15,600 and Birr 21,000 again excluding contingencies and Infrastructure costs. Infrastructure costs would range from approximately Birr 1,600 to Birr 2,100 (base costs) per plot, depending on location of sites. 13. Baed on the above cost *stimates and using costs at the most xpensive location, Wizan Teferri, housing Types A and B (unfinishb 1 would be affordable by those with monthly incomes of between Birr 186 and Birr 240 approximtely (above the 55tL percentile on inicome curve) and the finished Type C (medium income units) by those with incomes over 3irr 500 per month wbich accords with the target group, namely middle and senior range development officers. Funds for the construction of the houses would be channelled through the HSB Ifrastructure would bV funded by the respectlve town admLuistrations wich would levy a development charge on the plot beneficiarlis once selected to over the full costs of the lnfrastructure provision. 14. Tables 1-3 set out house and Infrastructure costs and repayment requirements for the most expensive case - i.e., Misan Teferri - and also shohs thb plot mis options which would achieve affordability. - 75 - ANNEX 3 Page 4 of 8 Implementatton 15. Overall management of the implementation of the component will be the responsibility of the UDPO of the MUDR. The respective town administrations will be responsible for provision of infrastructure. The utility agencies (WSSA and KELPA) will be responsible for provision of water supply and olectric power supply, respcetively. Regional Projeet Implementation Units under the diroection of UDPO will assist the town administrations, cooperative groups, and local contractors in technical management and construction s4pervision. The HSB will proeoss house construction loans, and bulk materials supplies will also be arranged for the component. 16. It is proposed that the basic Type A (core unit) and Type 3 (core +1 room) will be constructed through self-help (local co-operative groups), that is, by local low income people for theselves. For key workers, units would generally need to be finished for mmediate occupancy and thus Type C units (core +2) with finishes would be constructed. Local contractors utilizing bulk materials supplied through the Project working for the town dministrations would construct these units. Costs would naturally be higher, reflecting the larger units and also the fact that contractors would be used. Affordability has, however, been the major parameter in design of the component and although the Type C+ unit would be relatively exa)nsive, it would still be offordable by tho target range of development officers. ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Housing Unit Costs (Birr) (end-1989 Base costs) -----------------------------------------------------------------__----------__--------------------------- Mizan Type + Components Ambo Assela Goba Robe Teferi Shashemane Vollisso A - Core + L + K 5.403 5,295 5,495 5,495 5,669 5,374 5,837 B - Core + 1 room * L f K 6.755 6,992 7,183 7,183 7,835 7,083 7,287 C + - Core + 2 rooms + L + WR + K + f 15.671 16,064 18,872 18.872 20,889 16,798 17,915 Infrastructure cost (per plot) 1,818 1.636 2,100 1,864 1,880 1,590 1.594 ------------------- I -----------------------------------------------------------------------------------_ Notes3 Assumes Types A + 3 constructed by self-help means. Assumes Type C + constructed by local contractors/municipalities. L = Latrine, WR = Washroom, K = Kitchen, F - Finishes (plaster, floor, etc.). '4. 0 oo Ws's MoI t 9, o oono o *ns 31ISt o vsill gall ItS. 069'- I1S m -os am Vl I 1! I1 t. I''o so'st si-us o-cwO 0 51 04L4t5 190 t U-S -oIL 065 Tg MO'S Is ItS WOO *t*10iS QV ' 0.-, IS-1'S *ILt St-50't 0 0 9I-"o'0SoWOt Gt-n LI- L OUUSI S9- m ItUO ilIIVI OLoiCi oi*ou o-sas: a 5~ 9~*~ UUS esge LSU 0353 53LU 31W1as Won513a oSve O 'PD4 U-lt-J' Ot-LZ 00311 0 0$I 8-1901 bOut WA WrIS LOt k-L9t 9t-nt SBU LPWC. ° ~ 1 -'t "- OO-Stt' O O "-%o'9 Dwm n-u~~~~~~~991a Sn'§Gt nolm -cn 2v a-;t' z UL'a 1191 'nts Noy i uIM 005#1 SI 1St *PS31 0n 0o #811 3*495 1iS 1tv it*1 etitt811 St 831 blIS 30110 O|-V O .~~~ *i ut°1 --!9 'i rnu rn£M 1,>!I' 11 ____--;-------------0-- ! I | | - ~ ~ ~ ~ ~ - (coto. 'J iS) " *uuw4- ..q 1.e ~ueq4 ar9w _SA IO 9 0512210 V1nIw3 - 78 - ANNEX 3 Table 3 Page 7 of 8 ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Affordability Analysis (for Mizan Teferi - Most Expensive Case) -------------------------------------------------------------__--------- Type of Unit A B C+ Facilities Provided C+L+K C+1+L+K C+2+L+WR+K+F Plot Size (m2) 160 160 160 Built Up Area (m2) 22.60 32.80 46.04 Mix of Units 20? 30Z So: Total Number of Units 216 324 540 Costs Per Plot Building 5,669 7.835 20,889 On site infrastructure 1,864 1,864 1,864 Contengencies (10) 753 970 228 Total Cost Per Plot 8,286 10,669 22,981 Monthly Repayment (Birr) 46.5 59.9 129 Required Income (B.rr/month) 186 240 516 Notes: 1. C+2+L+WR+K+F - Core + 2 rooms + Latrine + Washroom + Kit:hen + Finishes. 2. Financing assumed at 4.52 interest over 25 years. 3. Monthly repayment is 0.0674 x unit cost x 1/12. 4. Maximum income for housing assumed at 25?. S. Type C+ targeeted for government development officers. 6. Type A and B targetted for low income and built by self help. 7. No cross subsidy assumed on the infrastructure. - 79 - ANNEX 3 Appondix 1 Page 8 of 8 4 * ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Beneficiar' Selection Criteria Residential Plots and Selo-Hely Built Houses for Sites and Services Schemes 1. Shall be age 18 or over; 2. Willingness to participate in a self-help program, preferably in a cooperative arrangements 3. Have a reasonably regular formal household monthly income (either salaried or licensed self-employed) of2 (a) up to Birr 190 or about 55-80th percentiles of the 1988 urban income distribution for about 201 of the units (cores) depending on the town; and (b) up to Birr 240 or about 75-85th percentiles of the 1988 urban Income distribution for about 301 of the units (cores + 1 room) depending on the town; 4. The housing loan repayment plus plot development charge and land lease charge will not exceed 25Z of monthly household income; 5. Does not own any other residontial property; and 6* Must meet all other HSB standard requirements (e.g., insurance, mortgage redeption, etc.). Reosidential Plots and Houses Built by Contractors 1. Shall be age 18 or over; ' 2. Priority In sales will be given to development officers of the Government; 3. Have a reasonably regular formal household monthly income (either salaried or licensed self-employed) corresponding to about 85-95th percentiles of the 1988 urbae income distribution for about 502 of tha units (finished cores + 2 room) depending on the town; 4. The housing loan repayment plus plot development charge and land lease charge will not oxceed 252 of monthly household income; and 5. Must sAeet all other HSB standard requirements (e.g., insurance, mortgage redemption, *tc.). - 80 - ANNEX 4 Page 1 of 4 a~~~~~~~~~~ ETHIOPIA MURXET TOWNS DEVELOPMENT PROJECT Municipal Infrastructure Component Background and Program Formulation 1. In addition to acute housing shortages, the market towns enjoy only a modest level of infrastructure and municipal services. In support of the project objectives to develop selected urban centers with high agricultural development potential in order that the centers are better able to buttress such development and in concert with the housing programs in the centers, it is thus proposed that a range of basic infrastructure and services improvements will be provided. These improvements, designed to minimum cost standards, wiil encompass, as necessary, rehabilitation of main town roads and drains together with the upgrading of market places by the provision of surfacing, public water fountain, and communal latrines, where such facilities are not presently provided. A limited number of simple market structures will also be provided in some tcwns. In addition, the town administrations will be provided with minimum transportation requirements (e.g., all purpose trucks and vacuum tankers), in order that the levels of service provided b7 the town administrations to their citizens and maintenance of infrastructure in the towns may be improved. Program Obiectives 2. The overall objective of the Municipal Infrastructure Program in the market towns is to upgrade important physical infrastructure and municipal services in order that towns are able to function more efficiently, in turn supporting productivity and thus economic development. Detailed Description of Program 3. In summary, the following will be provided across the eight townss (Phase 1 of program) 0.7 km of new roads either surfRce dressed or graveled dependent on classification and usage; 14.5 km of upgraded road similarly surfaced; 2 no. small bridges; 65.0 km of unlined open drains; 9.7 km of lined open drainage channels; improvements and development of 7 existing markets; surfacing of 2 new markets; 9 communal latrine blocks sited at existing markets and 3 at new markets; 600 new market stalls; and, high tension electric power line extensions to serve new housing sites in two of the towns. In addition, each town will be provided with items of small plant and tools and a total of 225 refuse containers. Also 5 vacuum tankers; 5 all purpose trucks rand 2 graders will be provided to various of the towns. Full details of the municipal infrastructnre program and the specific proposals for each town are included in Table 1. The detailed program for the Phase 2 towns will be identified during the course of implementation of Phase 1 following completion of feasibility sLudies to be supported under the Project. Notional sums for market improvements in the eight phase 2 towns have, however, been included in the Project costs. - 81 - ANNEX 4 Page 2 of 4 Program Costs and Financing 4. The total cost of the component is estimated at Birr 8.45 million (US$4.1 million) net of taxes and duties for Phase 1. Of this cost, an estimated Birr 2.74 million (US$1.32 million) vill be for vehicles, plant and equipment for the improvement of municipal services. The foreign exchange component is estimated at 472 for muticipal infrastructure and 100Z for vehicles and equipment net of taxes and duties which for both elements of the program are estimated at Birr 1.41 million (US$0.68 million). Table 2 summarizes the municipal infrastructure costs for each of the Phase 1 Project towns. Implementation 5. Road, drainage, public fountains, communal latrines, and market development works will be carried out by local contractors. Tender documents are being prepared by NUPI and its local subconsultants, BDE. As works are of a simple and varied nature in numerous locations, local competitive bidding procedures will be followed as foreign contractors would unlikely be interested. Water supply and electric power supply distribution system extensions will be carried out by WSSA and EELPA, respectively. The respective PIUs to be established in each administrative region utilizing available technical staff from town administrations supported by staff at UDPO will monitor construction supervision and expenditures as well as process certificates for payment. 7. Vehicles, plait and equipment for all towns will be procured together centrally through the UDPO on behalf of the respective town administrations. This office will be responsible for preparation of bid documents (with the help of consultants as necessary) and for all tendering arrangements which will follow ICB procedures. Vehicles, plant and equipment, once procured, would then be distributed to the towns by UDPO. EIHIOF'IA warr TONS cEvvoP,Mr PROJT W.NCXPAL. DFRAS1RUCnTWE .MHTITM (Quantities in Lin.ar oltors vcspt where shen) careoms AM ANN ASMEA am NM NM" 9*9Iiinwe S OLUS ZiVY TOTALS NTeS A. CanL VW 470 170 640 * lb..idle. 2.075 4,9240 8,57 1.80 4 . 2,180 I." 11,485 *oxeludm 70 66 of ratmaing "Il Irldgm (vhiclar) 1 MD. 1 No. 2 lN. Oralage, * ll.Ad ao_ml. 9,*0 6,670 0,450 18,60 9,000 1,140 10,480 5i,90 6,0o0 . Liae imi. - 8,700 2,000 100 1,510 1,60 9,730 . bjer Strom rk CulvertI 2,000 2.000 Smifmiam 0n . C _il L.erim I M. 1 lb. 1 lb. 1 NO. 2 ND. 1 Nb. 1 Nb. 1 ND. 9 Wm. 10-hal. Istriao. oi near mrk.ts oer bpl * KYv HY LIe. 100 920 890 For hme;inr ite, (off-lto) lbrk.b Uurfacine l. Ite" Item it" Iten Item It.. 7 Wm. .urfaci no of 7 ND. ox _rket " tall.s ND. 100 "D. 11.b. 100 ND. 10 N.. 10 lb. 50 N. 00 "a. N w Norke D". 1.6 hb 0.152 he 1.92 he S. M LB A SIMSP *"1 bll P &T..I. it" it" item t. I i tem Item1 It.. Item iN. 101.* * 1M PletA& lforS t 3We 0 - 1U lit, fin s 2DONo. U0 lb 26 b. 2ti No. 1 No. N0 lbN.. ND. NUN o.. *Vsm TInerr 1 NI lb. 1 No. 1 b. 1 lb D. a lb. areftm I ND. I". 2 ND. . Corn. Purge.. Truck& 1lb. I "D. 1 b. 1 lb. 1I N. 5 lb. 0 "SO Iw 4 o C O D9 lit 11- a eu'J SiOlOtt' : 0 D00 tI S nouL WUatl;OtS WN 'l t *I*O'i "'It itlt 1e1r,1se1s,a -ts-- OD'= wOn n a,a,1 tt , totI rt"Sf'l OO'O Ow-nt' U' 01 b' 11 It," U-Zr Wanf SPI11 "'z "- n l f-"C "'Ant nt00eo- tX '1 'ttn tX PsX-t= -1 tint U ro DIt 000 a,"il -Is si-s "'An armzot ",W I s-e T-oit Dt-n sw0r n"P11" lain iSala ~~~~~0010 alS SiL li i 1m to," foola.,. a-ing n-lsw uln at- lillmEU , i goloss coo sc-lo" 15n 5s: tit M coaCt L4,s11 mm aii 011,% is-*n inst 51551 VW UIN 8OD- n3n5 00D0 U'iP1 00 000 000 *, OD,O 000 11,01 -L IC'" osui s5:- S tt *0oast WSLOI ct Weast ea5 51015t a,"S *It* nit WISEII 0Ocai MISS9 Melt 40110,13 "Its $IStS O &,amt soU-'t DO'O so':at f*506 tw-O uIn w4-nt nw- n-w na eU -11 u.s stact aca" mno o g'aUn n-str Co- aLs-I t st mt1 cm In Us-In nt ct';t U'ii a u-t Us-Ut iin ss nise- *gw sc-tat a o-O Ca-s" w1,. "e-g wuc -es ,29 tZa- tO-in Wan "In Oulnsu UKItM ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~"two | %o e" . o Ga. so" ! .. 'an *0O .1'. " @ 0 W0', @ ''__-_11.. * .----------------~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~-.---- -- ----------- - --- ------ - --- -- -~.S'.A 54W S141: fl5.A smowd !S *i-*t m I U 'SB"O 'a"VW 'SNmil" 35*S 0Q- Jt | | . _. - L ts4 rist m u" Urn,t 1 s1 *040 lt d01 19 - 84 - ANWEX 5 Pa-g 1 of 8 4 MARKET TOWS DEVMLOPMENT r0JEct Water SuWDlY Component Background and Program Formulation 1. During the selection process of the projoet towns, due consideration was given to the water supply and sanitation aspects, and based on An initial assessment, engineoring consultants were employed by WSSA to prepare feasibility studies and engineering designs for the required water supply and sanitation works. Major water supply extensions were recommended originally in Assela, Shashemane and Ziway and rehabilitation works in the other project townss Ambo, Wollisso, Arsi Negele, Goba and Robe, and Mizan Teferi. During the pro-appraisal mi8siont consensus was reached that in Arsi Negele, where the present system can meot only 25-302 of the existing demand, the Project should also provide for a major system extension. During the appraisal of the Project, due to funding constraints, the water supply (and housing) components were 1liminated In Ziway and Arsi Negele from the proposed Project. The feasibility studies and engineering designs have been financed from the proceeds of the First Urban Development Project. Program Objectives 2. The objectives of the proposed water supply components are to rehabilitate, augment and secure the water supply in the selected project towns to cater for the natural demand growth enhanced by the planned developments in the towns. Adequate water supply is a basic requirement for the increased economic activities in the towns, and it will also Improve the basic needs provision and health conditions of the urban poor by expanding the water supply coverage to the low income groups. The adopted planning horizon is up to the year 2000 (Stage 1) for this Project. Tho Project also provides for institutional support (training and technical assistance) to the implementing agency, WSSA. Population and Water Demand Prolections 3. The 1984 population census provided a reasonable starting point for the population projections in the selected towns. The estimated population growth was based on a separate study by NUPI, which recommended to use 3S naturel annual increase and the anticipated migration of people from the surrounding villages to th regional centers. The rate of the added population growth ws determined separately for each town. The consultants re-examined the population growth rates for each locality. The established population growth rates finally employed in the individual studies vary to a certain degree, but shows a general trend of declining growth rates from 6 to 52 in the initial period (1988-1993) and 5 to 42 thereafter until 2010. 4. The average per capita domestic demand in the planning period was :alculated according to the various modes of servico as follows - 85 - ANNgX 5 Page 2 of 8 For the population recelving water through public fountains: 17 lped by the year 2000 and 19 lped by the year 2010; For the population receiving water through yard connectionst 43 lped until the year 2000 and 52 lped thereafter; and - For the population receiving water from house connections: 80 lped until the year 2000 and 96 lped thereafter. The industrial demand (mostly cottage industry requirements) and institutional and public use were determined separately for each town. 5. Allowance was given for supplying water to the surrounding rural *reas, especially along the supply mains to the towns, and through additional public taps on the peripheral pipeline network. The water demand projections, (together with the system descriptions) for Assela and Shashemane, where major extensions of the existing water supply systems will be provided under the Project, are given in the following paragraphs. A8SELA Water Requirements 6. In accordance with the criteria described above, the projected population and water requirements for Stage 1 and Stage 2 (up to the year 2010) are sumarized belowt Year 20_ 2810 Population 17,1W 116,1_ Annual consumption (Cu...) 2,173,6O 8,662,M5 Max dally consumption (Cu.-) 7,116 12,S65 Average hourly *upply (Cu..) 296 602 Max demand F*r hour (cu.*) 445 752 Water Sources 7. As required by their terms of reference, the consultants investigated the possibility of ground vater sources, but no .xploitable aquifer wa found In the vicinity of Assel.. 8. After an Initial assessmont, three alternatives for the utilization of surface water sources were investigated in detail: (a) Pumping from the Ketar River where the flows are more than required throughout the year; (b) Utilization of the Aleltu River, which is relatively close to Assela, by constructing a dam, impounding water during the wet - 86 - ANNEX 5 Page 3 of 8 periods and thus supplying the town throughout the year; and (c) Utilization of the Aohabeka River, which is relatively far from Assela, but the elevation of the wat.r intake would permit gravity supply to the town. The last alternative was found to be the most economical. While preparing the detailed planning, it became evident that it would be necessary to augment the gravity feed by a pumping system that would ensure adequate supply to the town throughout the year, including the projected consumption for the year 2010. According to the forecast, this pumping station will operate for about 2 months per year during relatively dry years. Hence the additional cost per cubic moter will, on the average, be extremely small and the above Ashabeka River schem would still remain the most economical. Description of the Proposed Scheme 9. The proposed schme which will provide an average daily supply of 10,030 cu.m. is intended to meet the ultimate demand for the year 2010. The first stage (proposed Project) will provide an average daily supply of 5,930 cu.m. and a peak daily supply of 7,115 cu.m. 10. Two water int4k4s (consisting of a concrete weir with an intake opening in the spillway body and a gallery to convey the water to a grit chamber) will be constructeds the gravity intake on the Ashabeka River and the pumping intake downstream of the confluence of the Ashabeka and the Gogesa Rivers. 11. The pumping station will be equipped in Stage 1 with two submersible electric pumps, each with a capacity of 100 cuam. per hour at a total head of 120 m. In Stage 2 two identical pumps will be added. The pumping station will be connected to the national power grid (EELPA) through a 75 Um long, 15 RV overhead line. 12. The transmission mains will consist of the following sectionst - Gravity main (section 1), from the upper (gravity) intake to the junction with the rising main (72 km long, DN 450 mm, PNIO ductile iron (DCI) pipe); - Gravity main (section 2), from the junction with the rising main to the new treatment plant in Assel. (25.8 km long, DN 350 mm, PN 12, DCI pipe); - %Rising main from the pumping station to the junction with the gravity main (1.1 km long, DN 300 am, PN 16, DCI pipe). 13. The proposed treatment plant (design capacity 300 cu.mJhour) will consist of chemical plant and dosing equipment, flocculation, clarification and rapid gravity filters, and will be procured through ICB against performance specification. The treated water will be stored in a 500 cu.m. capacity, clear water reservoir and from there it will flow under gravity to pressure zones No.2 to No.6 and by pumping to pressure zone No.l. This - 87 - ANNEX Page 4 of 8 pumping station will be located at the boundary of the treatmeot plant and, in the first stage, will empriae two units each with a capacity of 30 cu.mlhour to a total head of 55 m. In the second stage a third Identical unit will be Installed, two for operation and one unit for standby. 14. As the town of Assela lies between elevations 2,150 m. and 2,450 3 above soe level zas.1 ), the required pressure range in the system varies between 15 and 70 meters, and the distribution network has been divided into 6 soparate pressure zones. Reservoirs will be constructed at the hcad of each pressure zone, same for the purpose of wat-r storage and pr-ssure breaking and some only as break pressure tanks. The reservoirs to be constructed in Assela are listed belowt Pnmurm Elovateo Stag. I Stage I Zo. A.s.L (m) Volum (cu.8) Volu" (cu.M) I *2,4U 4- Ut .2,402 60 - XU: .2,850 1,5W 1'm IV-A *2,211 19(B.P.1) - V .2,274 4J 4W VI .2,282 )i(B.P.T) lSo(.P.T) 15. The distribution system to be constructed under the Project is awi-mrized belows Pw*ure u * * * * Zone a aa a am 8J 09 - 4W - 2,8u 8,10 2,28U KUt 6St WI 4W - 1,70 1,40 2,t IV - - no 18U 2,2W7 1,60W 2,748 V - - - 470 2,0 1,126 - VI - - - e a StaW I J ,52t _ 1,46 W 9,170 ?7,6 7,479 Stag. I - 2,6 - in 610 The existing distribution lines in the town, where possible, will be incorporated into the new system. Tan additional public fountains will be installed as well as hydrants at selected locations. - 88 - AN=E 5 Page 5 of 8 16. The operation and control of the system was designed to minimize automation and sophisticated control equipment. For most of the year the flow from the gravity intake to the balancing chamber in the treatment plant will be effected by the hydraulic gradiant in the supply line. Due to the diameters selected for the first stage, the capacity of this main line will approach 370 cu.m/hour. During the first years, the required capacity will be lses than the above quantLty and the operator will control the flow to the treatment plant by adjusting the regulating valve at the entrance to the plant. During periods of low flows in the Ashabeka River when the quantity of water to the gravity intake will be less than required, it will be necessary to supplement the supply by pumping from the lower intake in the river. The manager of the treatment plant will decide when it is necessary to operate the pumping facilities. He will infonm the operator accordingly by means of radio connection between the treatment plant operauion room and the pumping station. There will be no automatic control between these two points. 17. The following auxiliary buildings will be provided under the proposed extensions - Operator's dwelling near the Ashabeka Pumping Station; - Duplex Dwelling for the WSSU manager and treatment plant manager; - Store and Workshop; and - Pipe shed. SHASHEMANE Water Requirements 18. In accordance with the criteria described earlier, the projected population and water requirements for Stage 1 and Stage 2 are summarized below: Y"er Population 76,6f6 11,0" Annual consumption (t.m.) 2,0833,6 3,714,666 Max daily conwumption (cu.-) 6,t65 12,210 Avorege hounly supply (cu.") 285 goo Max demand por hour (cu.m) 42 766 Water Sources 19. No adequate groundwater sources were found fcr the water supply extonsion of Shashemane. After initial selection, the following surface water sources were investigated in detail: (a) utilization of Wesha River where tIt flows are adequate throughout the year. This would require the laying of a 14.5 km r±sing main - 89 - ANNEX 5 Page 6 of 8 and pumping to a total head of 275 m; and (b) Utilization of Hesa River which flows through the town. In this case the flow of water would suffice for about 5 months in the year and thereafter, for a number of months, the flow would be less than the quantity required. In order to utilize the Hesa River it would be necessary to construct a dam and impound water during the wet periods. The analysis of the above two possibilities demonstrated that the Wesha River presents the cheapest solution. However, subsequent analysis has shown that the most economical solution is to exploit both rivers, namely by drawing water from the Hesa River, under gravity, whenever there are flows in the river and to augment this by pumping from the Wesha River. Descrigtion of the Proposed Scheme 20. The proposed scheme which will provide an average daily supply of 10,170 cu.m. is intended to meet the ultimate demand for the year 2010. The first stage (proposed Project) will provide an average daily supply of 5,710 cu.m. and a peak daily supply of 6,850 cu.m. 21. Two water intakes (consisting of a concrete weir with an intake opening in the spillway body and a gallery to convert the water to a grit chamber) will be constructed, one on the Wesha River (upstream of the existing intake structure), And an additional intake on the Resa River. 22. The pumping station will be equipped in the first stage with 3 horizontal pumping units. Each unit will have a capacity of 145 cu.m. per hour to a total head of 275 m. This pumping station will be located near the existing one. The existing power supply will be increased to 400 kW, requiring a new transformer, distributor and switchboard. 23. The transmission mains will consist of the following sections: - Rising main (section 1) from the Wesha River pumping station (6.5 km long, DN 350 mm, PN 35, DCI pipe); - Rising main (section 2), from the end of section 1 to the Shashemana treatment plsat (7.7 km long, DN 350 mm, PN 10, uPVC pipe); - The gravity transmission main from the Hesa River intake to the treatment plant (1.3 km long, DN 300 mm, PN 10, uPVC pipe). 24. The proposed treatment plant will be identical to the one proposed for Assela (para 13 of Annex 5). The treated water will be stored in a 1,000 m3 capacity, clear water reservoir and from there it will be supplied by gravity flow to all pressure zones. 25. The distribution system to be constructed under the Project is summariz',d below: - 90 - ANNE 5 Page 7 of 8 Pressur DNU_6 OND M 1WM ODN1U_ ON1_ zi. m a a a m High - MC 1,13 1, 4,*3 9,sm Madim 9" - SW S,6W 3,1" 7,106 tout In Ste" 1 91 26 1,430 5,01 7,4U 16,4W Stags I - - so 1,97 1,270 2,NW The existing distrlbution linoe in the town, where possible, will be incorporated Into the new system. Additional public fountains and hydrants will be installed at selected locations. 26. The operation and control of the system was designed to minimzie automation and sophisticatd control equipment. When the flow in the Hes- River Is sufficient, lt will be used as the sole source of water to the town. If the quantity from the Hosa River will not meet the requirements, the manager of the treatment plant will decide when to operate the Wesha River Pumping Station, but only after he ha sent an employee to check whethor or not the lntako entrance is cloar. Should the manager decide that it iS ecessary to start pumping, he will convey instructions by radio to the operator of the pumpin station. The water levels in the clear water tank and bilanclng chamber as well as information regarding the state of the operating pumps will be indicated in the operation room of the treatment plant to enable the manager to make his decisions. 27. The following auxiliary buildings will be provided under the proposed extension: - Duple dwelling for the WSSU maurger and treatmont plant manager; - Store and workshop; and - Pipe shed. Implementation 28. The water supply components of the Project will be implementeJ by WSSA, which is responsible for all water supply and swerage services in the country, except in the capital city. WSSA ha demonstrated its ability to implement stmilar projects. The completlon of Phase I of the AfDF- funded Eight Centers Water Supply Projoct (3 towns) (total cost of about US$21 m. equivalent) is xpected to be completed by mld-1990, i.e., about the tiue of coimencement of the proposed Market Towns Development Projeet. 29. The Construction Control Dopartment (CCD) of WSSA is responsible for the overall mvanagemnt of the engineoring and construction servicas required for the i=plementation of all major water supply investment pr*ojcts, and it is adequately staffed and expericnecd to carry out this role. It is supported by the Project Finance Unit under the Finance Department of WSSA hich keeps separate Project Accounts for the major - 91 - Pasg 8 of 8 investment projects. This arrangent Is satSsfactory and in line with the Bank's requirements. 30. Engineering Consultants will be employed for construction supervision and additional engineering designs required during Implementation. The Consultants (the *Engineer) responsibilities will include: (i) all technical and administrative duties in accordance vith the best current engineering practices and in compliance with the requirements of IDA and the directions of WSSA; (ii) Regular supervision and inspection of the works, examination and approval of the contractors' workmanship; (i1i1) Provision of all necessary technical information, interpretation and advice to the contractors in accordance with the drawings and specifications; (iv) Preparation of monthly and quarterly progress reports, checking of all certificates for payment submitted by the contractor(s), including site measurements of the works, and transmitting the payments certificates to CCD of WSSA for further processing. 31. The payment certificates approved by the Engineer will be reviewed by CCD and the Project Finance Unit. Disbursement requests will be prepared by CCD, approved by the head of the Department and signed by the General Manager of WSSA for submission to IDA. Cost Estimate 32. The total cost of the water supply component (including taxes and duties and landlcoampens-tion costs) is estimated at Birr 43.7 million (US$21.1 million equivalent). The detailed cost estimate is included in Annex 8 (Table 12. The estimated bae costs were based on similar works presently under implementation. 34. In addition, US$0.6 million equivalent would be provided to WSSA for institutional support (technical assistance and training). Water Extraction Riahts 35. The appraisal mission was advised by the Comissioner of Water that the water e"traction rights for the proposed/conasdered water supply schemes (Assela, Shashemgne, Ziway and Arsi Negelc) have been granted, in accordance with laws and water righta regulations of Ethiopia. - 92 - ANNEX 6 Page 1 of 14 ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Employment/Income Enhancement Component A. Background and Proiect Formulation 1. The extent of poverty and unemployment in Ethiopia is roaching alarming proportions. Household income in Ethiopia is extremely low. Based on an ILO study in Addis Ababa in 1986, the median household income in a typical Kebele was 138 Birr or US$66 per month. In the secondary towns household income are somewhat lower and in rural areas, estimates of monetary incomes are 250-300 Birr annually, assuming an average family size of five. Accompanying low household income, income distribution is also highly skewed with the poorest half of the population earning only 202 of total income, whereas tho top 1OZ of households controlled some 40S of the total. On the average, nearly 80Z of total household income Is spent on basic food and fuel alone (Vandemooretele, Youth Employment In Ethiopia: An Issues Paper. ILO, Ethiopia, 1988). In 1978, the average estimated urban unemployment rate for men was 122 with women registering just under 312. Of the registered urban unemployed, over 40% are youth, aged 15-24 and more than 602 are female. 2. The grim statistics overshadow the generally accepted fact that Ethiopia enjoys a comparatively favorable physical agricultural environment. Insofar as the constraints on production have more to do with socio-political factors than with natural erosion of the environment, or unwillingness of the people to work, the following factors have contributed to the crisis* (a) regional tension, (b) lack of farmers' Incentives to produce marketable surpluses and invest in longer-term land improvement, (c) inadequate resource allocation to the peasant sector, including SSEs and cooperatives, (d) inappropriate state controls and regulations over private enterprise generally, and specifically over SSEs including cooperatives and the informal sector, (a) continuing weaknesses in government services in support of SSEs, including the cooperatives. 3. The ILO estimates that close to 702 of the annual increase in the urban work-force may need to be accommodated within the informal sector (i.e. the unregistered, often poorly organized and severely undercapitalized household enterprises, and own-account employment). Most urban working women are found in the informal sector and include petty traders, market vendors, and food processing, mAicro- and small-scale enterprises (SSEs). - 93 - ANNEX 6 Page 2 of 14 4. This Project is concerned with employment generation and income enhancement and concentrates its proposed program on the expansion and promotion of SSEs, including cooperatives and the informal sector. B. Prosram Goals and Ob1ectives 5. The proposed Project would directly address three of the Government of Ethiopia (GOE) priority goals under the new Five-Year Plan (1990-94) currently under preparation: (1) to provide employment for the urban uinemployed; (2) to upgrade existing and develop new manufacturing and service enterprise productivity, while maximizing the use of local raw materials; and (3) to increase household incomes and benefits among the very poor. The Project contribution to thee goals would be in the form of expanded productive output and service activities in the micro- and small-scale enterprise subsectors and in terms of job creation and Income enhancement for the poor. In addition, although women play a crucial role in the family and community life in Ethiopia, they are not sufficiently represented in formal sector economic activities. As an example, less than lOZ of the cooperatives are organized by women. The Pro4ae't w411 dAreetlv e n-*vbtrte to t^_he and establishment of women's service cooperatives. 6. The proposed Project has two main objectives. The first is to assist the GOE to expand employment and household incomes of the very poor while developing new capacity of manufacturing and =ervice output among SSEs in selected secondary towns. The second objective is to strengthen HASIDA and AIDB. For HASIDA, the objective is to assist the agency to more effectively fulfill its role as the only development institution of the SOE directed to support SSEs and cooperatives. For AIDB, the objective is to assist the Small-scale Industry Division (SSI) to open a desk or credit window for very small and miffro-scale anterprises. In the context of support to these inestituti=ns, the plan calls to improve the quantity and quality of HASIDA/AIDB staff, upgrade their promotion, analysis and management assistance capabilities for SSE and cooperative inves'ment8, and develop a viable approach to promote and finance informal sector, or cottage industries, with the focus on women and school-leavers. 7. In order to achieve the goals and objectives of the program, a substantial expansion of activity among small and micro-scale enterprises to include cooperatives and tun informal sector in and around the selected secondary towns would bo r3quired. Because of the constraints confronting the operation of these enterprises, expansion in productivity or the establishment of new enterprises is only possible through: (a) new directives by the GOE to support SSEs; (b) increases in SSE investment and working capital; (c) more efficient transactions between urban SSEs, rural producers and government enterprises; (d) upgrading of institutions working in the sector; and - 94 - ANNEX 6 Page 3 of 14 (e) improved business and management skills in SSEs and Cooperatives. 8. In addition, other outputs include tho development and testing of an effective strategy or model for the delivery of credit and support services to micro-scale enterprises or cottage industrios through service cooperatives; a strategy to improve the integration of women into the economic fabric of the community; and the development of a savings scheme for micro-scale enterprises. C. Detailed Description of Proaram 9. The proposed program will be comprised of the following four components listed below and detailed followings Employment generation. The municipal infrastructure and housing development investment contracts planned for all of the selected secondary towns will be awarded, to the extent possible, to local small-scale contractors. Local skilled and unskilled labor will also be utilized to the greatest possible extent, and this is expected to result in & significant number of jobs created. SuPPort provided to existing &,ad new. SSEs D'.d cooperatives. The definition of Ssmal1 enterprise for this project is broadly similar to that usod by HASIDA, for which the large ajority will have fewer than 10 employees (93%), with an average of 4.8, say 5 persons, and approximately Birr 7,000 or less of fixed capital per employee (HASIDA survey of 7,684 private SSEs in Addis Ababa -- manufacturing and service establisbmente, June 1988). The investmonts to be financed under this component will be for the rehabilitation and/or expansion of existing manufacturing and service enterprises, and new enterprises identified in the feasibility study (78 projects of small-scale or suitable to organization on a cooperative basis). Suuxort Provided to micro-scale or informal sector enterprises. 'Micro' enterprises may be defined as extremely small, and in most cases, household income producing activities, often just one or two persons, poorly organized, and almost always unlicensed. Such enterprisest commonly referred to as informal sector enterprises, often fall outside of HASIDA's terms of reference, but are nevertheles potentially Important as a medium of entry into the enterpriso sector. They typically creato employment at extremely low Investment costs and generate significant portions of household income, especially among the very poor. Institutional Support in Training and Technical Assistance. The proposed project includes an approach to assist AIDB and HASIDA to upgrDde the quality of their staff in project development, supervision and management of small and micro-scale enterprise support.. The component will finance foreign consulting sorvices to provide intensive staff training (branch office) in - 95 - ANNEX 6 Pago 4 of 14 promotion, management assistance (HASIDA) and on-lending/collection of credit to very small and micro-scale enterprises (AIDB). Customarily, the training takes place in the field for one to two month durations and is repeated several times during the first phase of the project. External trips are planned to visit successful SSE support projects (e.g., Kenya) for a few key officials and branch office staff. The Employment Generation Component 10. In each of the selected secondary towns, infrastructure and housing investments rxe proposed. WSSA and EELPA are major public utility companies and will likely carry out and/or contract to recognized engineering/contracting firms located in Addis Ababa the water supply and electricity works under the Project. The remaining infrastructure components (road upgradinglconstruction, market upgrading and housing site roads and drainage), however, are planned to be carried out by local small-scale contractors and local laborers. The housing superstructures will be contracted exclusively to local small-scale contractors, local laborers or be constructed through self-help by the beneficiaries. In order to ensure a major employment impact for local small-scale contractors and underemployed, the UDPO is committed to generating as much local employment as possible and is aware of the cost-saving implications as well. To facilitate the use of local, small contractors in the selected secondary towns, plans call for the municipalities, in coordination with the UDPO office, to order in bulk the necessary building materials (cement pipe, steel reinforcement rods, etc.) at the beginning of program. This procedure of bulk purchase and storage by the local municipalities will help assure timely implementation of construction. Altogether, the component should result in a greater retention of capital expenditures in the local economy (through local contacts for management and labor), costs savings, and good will created by utilizing local people working on upgrading their own commnity and homes. The staff from the UDPO will also help assure fairness in contracting by the municlpalities of local construction companies and laborers. The Small-Scale Enterprise Support Componer.t 11. The types of SSEs in the secondary towns to be supported under the Project are based on surveys of consumers which yielded information on perceived shortages of consumer goods and services. In addition, the small- scale enterprises appropriate to the process of strengthening urban-rural interaction, stimulating employment and enhancing incomes were also idontified. 12. On the demand side, such SSEs should fall into the following categoriest (a) Consumer goods and services which are demanded by rural dwellers. The lack of these goods and services in urban areas reduces the attractiveness of the towns to the rural - 96 - ANNEX 6 Page 5 of 14 population, as well as, having a general 'disincentive' effect on rural production efforts; (b) Goods and services which ar required to mak4 towns attractive to urban dwellers and hence maintain the viability of the regional urban areas mnd stabilize demographic patterns (reduce migration to Addis Ababa); (c) Intermediate goods and services, the lack of which acts as a constraint on supply of the goods and services falling into the categories above. 13. On the supply side, important characteristics are: (a) Comercial viability at small-scale; (b) High job-generation capacity (labor intensive technology); (c) Use of locally available material inputs; (d) Could be uzed as inputs by larger-scale enterprises; (e) Improve the role and status of women in terms of income, employment and equity; and 3~ ^s '-vcrablt to . nntr!l .i4t. reseett t he environment. 14. Clearly, support to existing or new SSEs cannot have all of these characteristics, but they are deemed important criteria and will guide project expansion or initiation in the context of this component The following Table 1 illustrates the type of projects (with 78 pre-feasibility profiles completed for new investment projects) recommended for support in this component, as well as their proposed lc.ation (SWH Feasibility Study #9). - 97 - ANNEX 6 Page 6 of 14 TABLE 1: DISTRIBUTION OF PROJECT, BY TOWN Ambo Arsi Assela Goba Robe Mizan Shashe- Wollisso Ziway Total N-gel- T-feri mone Bakery 1 1 1 3 Bamboo 1 1 1 1 2 Furniture Blacksmithing 1 1 2 Hollow Blocks 1 1 1 1 1 5 Metal Doors etc 1 1 2 Roofing Tiles 1 1 Building Contractor 1 1 1 1 1 1 1 1 1 9 Briquettes 1 1 1 1 1 5 Grain Hills 1 1 1 1 1 1 1 7 Hotels 1 1 1 3 Leather Footwear 1 1 1 1 1 5 Oil Mills 1 1 1 1 1 1 1 7 Pasta 1 1 2 Printing Works 1 1 Slaughterhouses 1 1 2 Soap 1 1 1 1 1 1 1 7 Sugar 1 1 2 Wooden Furniture 1 1 Candles 1 1 1 1 1 1 1 1 1 9 Knitting 1 1 Tailoring 1 1 2 TOTAL 9 9 10 7 5 10 10 9 9 78 15. In view of the paucity of statistical data and because of the tim limits on the study, no attempt was made to quantify the size of the potential market demand for each and every one of the 78 new project/location combinations indicated in Table 1, Where relevant figures were available (e.g., from AIDB or the Plan) these were often used. A further study would be carried out by AIDB of any new project investments to be supported just prior to implementation. 16. The technical requirements of the profile SSEs were drawn from a wide range of sources. A substantial number of existing enterprises were interviewed, and supplementary information on these was often available from the local municipality, HASIDA and MODT. Grain milling, oil seed milling, soap making, building contracting, hollow block making, bread making (bakery), - 98 - ANNirX 6 Page 7 of 14 tailoring, blacksmithing, wooden furniture making and knitting fall Into this category. Certain government agencies were able to supply actual, or model, project proposals which were updated or otherwise modified as required to suit the specific circumstances of the selected secondary towns. Notable here were AIDB and the MOA, which provided useful information on grain milling, small- scale sugar production, bomboo waving, hotel construction and operation, building contracting, fuel briquette manufacture and metal products. Slaughterhouse costings were based on data used in the ongoing ARMD Projct (involving FAO/MOA, MUDH and tho AIDB). Cost data were provided by individual enterprises either using or supplying th items concerned, or were drawn from HASIDA survey data or from the standard costings in the 'Project Supporting Data Manual' compiled by the Research and Planning Services Section of the AIDB. The total fixed investment, and thus line of credit requirements, estimated for these SSEs Is Birr 7.73 million, calling for loans up to Bivr 250,000. Also identified were a far greater number of existing, small-scale enterprises requiring rehabilitation. These SSEs are already customers of AIDB and HASIDA, some provide similar products and services as the profi1ls of new SSEs, and are located in the same secondary towns. In consultation with AIDB, it was agreed that tho above line of credit would be expanded to a total of Birr 11.59 million to support the new SSEs. AIDB recemmends initiating support of existing SSEs that fit the criteria mentioned previously and are located in both phase one and phase two project towns, whereupon new project proposals will be examined and supported, based on AIDB feasibility analysis (especially, those providing the products or services not found in particular towns). Micro-Scale Enterprise Support 17. A component to address the need to raise household incomes among the very poor was also proposed for inclusion under the Project. The feasibility study has demonstrated that household incomes in the regions covered by this Project are extremely low. In fact, a great number of households are operating nearly exclusively on the barter system -- through the exchange of goods and services for food and raw materials to make clothing, etc. 18. A pilot line of credit dedicated to micro-scale enterprises, commonly rsferred to as informal sector enterprises, is proposed to address this problem. The proposed Birr 2.9 million line of credit (phase one and two project towns) is targeted to micro-scale, cottage Industry and service repair enterprises supported through service cooperatives promoted, organized and provided management assistance by HASIDA. On-lending to micro-scale enterprises will focus (at least 502) on women-owned and operated cottage enterprise and school leavers. To facilitate women-owned enterprise among the very poor households, HASIDA will waive the customary 15-20S up-front, capital contribution from these clients, and AIDB will provide 100I of the financing requirements for the enterprise project, at an interest rate of 62. The extent to which micro-scale enterprise, service cooperative members are allowed to waived this customary capital contribution is left to the discretion of HASIDA and the needs of the wmen beneficiaries. HASIDA and AIDE will require all micro-scale enterprise beneficiaries to Initiate a - 99 - ANNEX 6 Page 8 of 14 savings program. The savings scheme L being developed by HASIDA and AIDB. All micro-scale enterprise clients will live in or around the selected project towns. The primary beneficiaries of this support will be households with combined monetary incomes not to exceeding Birr 50 per month. Women heads of households are the target beneficiaries of this component, as are the household school leavers. Within the six year plan of this Project, this component aims to be fully operational in each of the selected market towns. 19. World-wide experience has demonstrated that by providing small amounts of capital (e.g., USS 100-200 in Bangladesh, up to US$1,000 in Latin America) to heads of very low-income households for productive activities (e.g., spinning of cotton, making pottery or clothing), dramatic impacts can be achieved on increasing household income, generating work-hours per month, and in increasing fixed assets of the enterprise and family savings. S-mmarized below are selected highlights of a 1986 study of a loan program administered by the Grame-n Bank in Bangladesh: - (a) Loan program starteu in 19761 (b) Local currency TYc, 30 Tk - 1 US$ in 1986; (c) Outstanding loans were Tk 301 million, or approximately USS 10.0 million; total members were 235,000, as of end-1986; (d) Women accounted for 742 of all members, and 982 of new members; (e) Only 0.5Z of the loan amounts were overdue beyond one year; (f) Loans averaged US$73.00 for the first loan and USS 110.80 for fourth loan; (g) Loans were made to groups of five, voluntarily organized as associations or solidarity groups; (h) Average loan duration is one year; (i) All members of the group are individually responsible for their loan, but no single person can receive the next loan without total repayment by each member of the group; and (j) Impacts: Working capital increased 3 times in 2.25 years, investments in fixed capital in enterprises increased 2.5 times in 3+ years, 502 higher income per household compared to control group, savings of Tk 582 or US$ 20 average per member or 45Z of the outstanding loans. 20. In order to estimste the start-up of requirements of this pilot demonstration project, consultants visited each of the towns and interviewed local authorities and entrepreneurs, as well as GOE and international agencies In Addis Ababa. The total population of the eight phaso one towns included in this feasibility study approximates 1.0 million. While nearly all of the households carry on some form of income producing octivity, it w"s assumed that only 302 or about 330,000 households have a micro-scale enterprise in the home and also meet the criteria for inclusion In this component. Also assuming that 10 women-headed households are organized Into service cooperatives, 66,000 groups would require loans. Lending approximately Birr 207 (approx. US$100) per member group just once, translates into loan requirements of Birr 68.3 million. It is proposed that a pilot revolving loan - 100 - AINEX 6 Page 9 of 14 fund of Birr 2.9 million to lend to 45 or 55 solidarity groups per town annually over a five year period be included in the Project. It is anticipated that 202 of the ptoject investments would be needed for tiports, locally purchased, of simple machinery, equipment and spare parts. Institutional Support for Technical Assistance and Training 21. It is also proposed that Birr 2.07 million be provided to facilitate the strengthening of AIDB and HASIDA in support of this project. Training of carefully selected existing and new staff in the branch offices of each institution to carry eut the delivery of the SSE and micro-scale components would be included. Appropriate training materials and international experts, with hands-on experience managing projects in support of SSEs and the informal sector, are available to work with HASIDA and AIDB to develop a model appropriate to Ethiopia. Training materials and management information systems (HIS) have been developed and updated to prepare local people (usually young, non-banker, non-senior status women and men) to promote, organize and deliver credit and provide appropriate management and technical assistance to these entrepreneurs. 22. Institutional support for HASIDA will involve the strengthening of HASIDA's capacity to promote, monitor and assist small, micro-scale nd cooperative enterprises through a program of staff development of primarily branch office employees and the upgrading of the 'out-reach' procedures and support facilities offered iu current branch offices. In addition, specific training and technical assistance will be provided to expand the technical capacit'ea of SSE and cooperative managers and operatives of HASIDA. Finally, appropriate vehicles, including motorized bikes, or small motorcycles, computers and software are planned for upgrading the delivery of outreach, supervision and follow-up activities of clients. 23. Institutional support for AIDB will center on assisting the bank with upgrading of staff capacity, especially within its branch office network, to identify, formulate and appraise SSE and cooperative lending projects. In addition, special training will be provided to field staff in on-lending mechanisms of a revolving loan fund for micro-scale, informal sector enterprises. Training and technical assistance is to be provided in the form of in-country, on-site, fieLd exercises for up to two months at one time. Actual lending to groups who have received orientation from HASIDA staff will be carried out during the training program. Overseas trips are planned for key AIDB and HASIDA staff, concentrating on branch office management and field staff. As with HASIDA, provisions have been made for AIDB to upgrade its MIS with now computers and accounting software systema, and provide new appropriate vehicles for field work. - 101 - ANNEX 6 Page 10 of 14 D. Program Costu and Financinm 24. Th. size of the proposed credit line for new and existing SSEs is baaoed on the project feasibility study prepared by the National Urban Planning Institute (NUPI), their consultants Sir William Halerow & Partners Ltd., and AIDB's projected approvals of existing SSE clients in or around the same selected secondary towns. It is anticipated that fcreign exchange costs for this component (international and local supply) will involve about 702 of total fixed investments. For SSEs and cooperative oenterprise projectsp AIDB plans to approve ovor 70 new project loans and on-lend to nearly the same number of existing SSEs between 1990 and 1996. In the event that new projects do not materialize in these secondary towns, AIDB has sufficient pent-up demand from earlier clients (currently operating at about 202 capacity or less, in desperate need for foreign exchange), to purchase replacement parts and new machinery so that no delays are anticipated in on-lending. Micro- enterprise or cottage industry lending is proposed at Birr 2.9 million to accommodate approximately 10 service cooperatives annually in each of the selected market towns, over the project period. It is anticipated that 202 of the project investments will be needed for locally purchased machinery, equipment and livestock. HASIDA plans to implement a savings scheme (borrower generated -jarantee fund), and this type of savings mobilization activity from peasant households has proven successful worldwide. 25. Cost recovery is anticipated to be very high. The SSE and micso- scale enterprise loans extended to private entrepreneurs, cooperative members, including the women-owned and operated household enterprises, are expected to be fully recovered from the beneficiaries through loan repayments. TABLE 2: Emplovment Generation & SSE Enterprise Support Prosram Costs 2 S Component Total Local Foreign Duties & Foreign Taxes Small-scale Enter. Support 11,592.0 3,477.6 8,114.4 25 70 (Existing and New) Micro-Scale Enter. Support 2,890.0 2,312.0 578.0 25 20 (Women & School-lea-vers) Institutional Support 2,070.0 414.0 1,656.0 80 (HASIDA and AIDB) Total 16,552.0 6.203.6 10,346.4 63 - 102 - ANVIl 6 Page 11 of 14 26. Institutional support for HASIDA and AIDB is currently anticipated to take the folloving forms AIDB (a) International travel for training of key head office ond branch office staff members (approx 10) (Birr 160,000); (b) International and local consultancies in on-leiding and savings scheme implementation for micro-scale entrepreneurs, and two fiold staff training sessions in selected regionallbranch offices (Birr 100,000) (c) Data 2rocessinp equiment (8 computers, software, TA) in selected branch offices (Birr 100,400); and (d) Vehicles (4, 4x4 vehtcl" and 8 motorbikes) for use in the regional) branch or sub-branch offices (Birr 259,800). AM,. sub-total oirr 62020ui HASIDA (a) Foroign and local consultencies to identify income generating projects, choice of appropriate technology, plant layout, export of non-traditional products, local input supply schemes and training to upgrade staff capacity in project appraisal and lmplementation methodologies (Birr 414, 000); (b) Consultancies In HIS (information link to 15 regional offices), SSE and Informal sector promotion, organization of serviee cooperatives, registration and management ssistance for SSEs and micro-scale enterprise development (Birr 580,000); (c) Data Processing e.u.im nt (8 computers, software systems and TA) (Birr 85,000); and (d) Vehicles (6, 4X4 diesel vehicles, and 9 motor bikes) for headquarters and brarnh offices 13irr 370,000); HASIDA. sub-total Birr 1.449.000 Institutional Sup,ort Total: Birr 2.069.200 It is anticipated that the foreign exchange requirement for international consultancies, vhilels and equipment w1ll be about 801 of the total cost. - 103 - ANNEX 6 Poge 12 of 14 E. LMlementation 27. The Urban Development Planning Office (UDPO), under the Ministry of Urban Housing ant Development (MUDH), will have the primary responsibility of infr"atructure ix estments (especially market upgrading, roadldrainage works), and planned investments for low-income housing construction. HASIDA, under the Ministry of Industry (MOI), and AIDBS, under the National Bank of Ethiopia (USE), will be responsible for implementation, supervision, and follow-up of the Project. HASIDA, concentrating on SSE borrowers, cooperatives and household or cottage enterprises would provide pr.motion, organization and management assistance for project prep-ration and operation. AIDS would be responsible for administering the lines of credit and collection of loans from beneficiaries. Agrement has boen reached with AIDB and HASIDA on theit respective roles. The staffing and detailed procedures for implementing these components were agreod during appraisal. 28. Reporting requirements. AIDB will provide IDA with (i) quartorly reports on Its operations, portfolio, resources and financisl condition, and (IL) audited project accounts within 9 months of the end of its fiscal year. HASIDA will provide IDA with (i) qu3rtelly reports on progress made in planned project (mplementatiox., including institxtional strengthening, and (ii) accounts of project resources utilized, operations accounts, and an audit report. AIDB and HASIDA would be expecaed to provide the same reports to NBE and the OI respectively, and provide copies of these reports to the MUDH Project Management Office. F. Proiect Benefits 29. There are three main direct economic benefits attributable to this project; (i) employmeat generation, including productive employment xpansion at very low-cost among the poorer s-ctors of society, (ii) income enhancement, including savings mobilization in formal sector institutions and in the form of increased household fixed assets, and (iII) the increased production of very basic goods and services which are delivered at very low capital investment coats, utilizing labor intensive technologies, and a high degree of local materials. 30. Employment will be generated for unskilled and skilled laborers through the infrastructure and housing investments4t New jobs generated are based on local laborers hired for construction in roads, sanitation, etc., and housing planned outside Addis Ababa (Birr 110.0 million), excluding electrical utility construction. The electrical utility work will be implemented by large-scale engineering firms from Addis Ababa and so its investment Impact on local labor was discounted 1002. At Birr 15 per day for skilled labor and Birr 3 for unakilled, estimates of new jobs that the public works and housing - 104 - ANNEX 6 Page 13 of 14 investments will generate (in the phase one towns) is approximately one year of work in each town for 153 people, on the average. (Domestic portion of investment, EBDE labor costs, e.75 local share, 5 years). 31. The employment impact of the new SSEs planned for implementation in this project was estimated at just over 570 jobs. Add to that the anticipated employment generation due to the support to the existing SSEs and cooperatives, aad an estimated total of over 1,200 jobs that could be developed with the successful (one-time) full on-lending of the credit line dedicated to both existing *nd new SSEs. This amounts to just under Birr 10,000 per new job created, which is very likely a high cost estimate. Finally, employment will be generated through promotion of the informal sector and on-lending of a revolving line of credit. Based on the Grameen Bank performance in Bangladesh, beneficiarios in Ethiopia could be expected to realize a similar inc-rease in employment, or approximately 12 days of additional work per month, per loane. Additional days of productive work would depend on the activity in which the member is employed, but on average was a 122 increase of work per month, utilizing an eight hour work day. 32. Based on the feasibility study data, income enhancement should approximate over Birr 2,000,000 annually once the credit line has been fully utilized in support of new and existing SSEs. Again, tilizing the Grameen Bank experience, it is anticipated that tho support of informal sector productive activities will have a significant impact on household incomes, among the very poor. In addition, increases in household investments of simple machinery, equipment and livestock are important. Finally, the approach in support of household enterprises likely to be applied to Ethiopia would have a savings component (borrower generated guarantee .un0 , and the mobilizaticn of savings from peasant households, based on experience around the world, has proven to be significant. 33. Projoct risks center around constraints which discourage the setting up of new enterprises and retard the development of existing ones. These constraints result from one or more of the following issues: - GOE policy on SSEs and informal sector enterprise including: (i) counter-productive legal requirements and regulations related to licensing of private sector business, (ii) the system of priorities access to raw materials, credit and foreign exchange which works to the disadvantage of SSEs, (iii) the disincentive effects of certain fiscal measures, and (iv) the lack of confidence resulting from the "climate of uncertainty'. - The nature of institutions and procedures relating to SSEs; (i) the general complexity of bureaucratic procedures relating to SSEs, (ii) the weakness of HASIDA, the agency intended to promote SSEs and cooperatives, (iii) the passive approach of the banking sector to the needs of SSE, and the inadequacy of financial sector support for SSEs, and (iv) the inefficient mechanism for allocating material inputs between enterprises. - 105 - ANNEX 6 Page 14 of 14 Intervention in product and factor markets, the consequences being; (i) acute, intermittent shortages of many raw materials and other inputs required by SSEs, (ii) 'unfair' competition from the state sector, and (iiI) inefficient marketing and transportstion system The overall resource constraints which characterize the economy and impact upon SSEs; (i) the shortage of skilled labor, (ii) the general shortage of foreign exchange, (iii) the limited range of intermediate goods, and capital goods produced locally, (iv) inadequate repair and maintenance facilities, and (v) shortages of electricity and fuel. Weaknesses inherent in the small-scale sector itself, including (i) lack of managerial skills and professionalism, and (ii) obsolete machinery. G. Environmental Impact of Small-Scale Manufacturers 34. The activities of small-scale manufacturers tend, in general, to be more acceptable, in terms of its environmental impact than are those of large- scale industry. In terms of air, water, and noise pollution small units, using relatively simple production methods and equipment are comparatively inconspicuous. Beyond this general point, there are specific, favorable environmental implications of expansion of the small-scale manufacturing sector, along the lines recommended in this project, stemming from the nature of the products made. In particular, the setting up of a number of SSEs producing building materials in various parts of the country will make possible a switch from timber to other materials, such as hollow blocks, fibre cement roof tiles, and metal door and window frames, with considerable consequential reduction in demand for timber, which is becoming an increasingly scarce resource. The manufacture of fuel briquettes and bamboo furniture by SSEs would further reinforce the favorable effects of an expanded building materials industry, by reducing the demand for fuelvood and wood for furniture manufacture. - 106 - Page 1 of 11 NARS TOWNS DiVLONT PROJEC Institutional Suuoort Camonent I. O_tline Tern of eference for Consult1&ft1vbor hAssistn A. Houweem Sgctor Study Obiectives To "sees the extent of national houslng needs of Itthopia and to prepare a national housing strategy. Scove of Works (a) Exernne existing end projected national urban housing (delling units end related infrstructure) needs In all relevant characteristlis; (b) Asses national urban housiag suply situation Ln terms of existitg housing stock¢, existin deivery systems and future or expected supply on the b"ai of those delivery systems; (e) Estimat existing end potential future deficiencies# (d) Criticelly ssess prsent comtraints to the efficient delivery of sufficient prwsnt nd futur housins (e) Establish e Iprove reliable atinal data b"as (f) Reocomed bow existiag an future satinal housing neds a be not In respect of (i) delivery systw (a c of existing stock, upgrading sa um constructio)# (iL) inpot lo delivwry systems (materis, lbor, bu ing c e and techn_logI, bulding stndars, fiacil esor (both publc and private), constrctio industry sa iswtitutilon apCacitie sad (1ii) current ntonal housing polis as" necessary revisions; and (g) Dewelop a ational hausing stratey (ditusbetween shot-ter and long-te) witi *hi r tc progrm c be fo astad ad 1i_lmenta. Duratio ad 3omrt4. Mme study wUi be conducted in few phasese 12-smot peid and ouuld Inrolve about 7 am_.uwnth of foreign consltant. ad 9 u1s1-wtho Of local Constdltaat$lsport Staff. The adisrs umi be locaot d is MM ad rqport to the Minlr. - 107 - ANNEX 7 Page 2 of 1I Qualifications of KEe Advisors Team Leader/Economist - degree in economics or equivalent, fmiliarity with housing needs of low-income populations of developing countries and housing affordability, and mangement experience. Urban Planner/Social SurveyorlAnalyst - degree in urban planning. survey techniques or equivalent, and familiarity with preparation of survey instruments. Architech - degree in architecture or equivalent, experienced in low-income housing needs of developing countries preferably ln East Africa and awareness of traditional building techniques. Municipal Engineer - degree in municipal engineering or equivalent, and experienced In municipal engineering and building Industry in developing countries. Cartographic Advisor - background in cartography, and experienced in photogrammetric mapping techniques. B. Financial Mnatement Consultancv Unit (FMCU) Obiectivess To assist project municipalities first and other municipalities later on thro -gh advisory ssistanco and training to MUDH and its regional offices in .:der to nhance municipalities' revenue generation and collection procedures and accounting systems so as to be able to achieve the financial perfonmance "ecessary to undertake the Project and other development programsa and to computerize the financial data base available to HnDE centrally from municipalities' annual reporting processes, Responsibilities of the fXCUt For irolect mwniciialitiens (a) Promoto the initLative in all municipalities to (i) bring ledgers up to date; (iL) prepare sanplified statistical reports to managers; and (11i) establish revenue enhancement committees; (b) Assist municipalities to strengthen revenue collection procedures throught (1) sending bills for taxes which fall due regularly; (ii) lntroducing accounting controls and analysis of age of arrears; (iII) providing management information on collection performance; (iv) strengthening follow-up procedures on arrears; (v) ensuring adequate staffing in term of numbers and qualifi- cations; - r> (c) Ensure that appropriate controls and month-end reconciliation procedures are introduced and maintained in municipalities, particularly wQth respect to revenue accounting and banking; - 108 - ANNEX 7 Page 3 of 11 (d) Identify municipalitiest if any, where simple cash book accounting is no longer adequate and devise and install revised system of accounting; (e) Review existing chart of accounts for adequacy and appropriate- noes, recommend changes, if necessary, and assist in their implementation; (f) Prepare an accounting and financial manual for use by the municipalities; and (g) Provide guidance to municipalities and to MUDH with respect to policy and practice of cost recovery of fees for services. For MUDH Regional Offices: (a) Establish and train financial management consultancy units at MUDH Regional Offices; and (b) Prepare training materials for MUDH Regional Offices and for municipalities to address the above items. For MUDH Head Offices (a) Establish a computerized data base of historical municipal financial and statistical data a a tool for policy formulation. Ortanization and Set-Ui The FMCU will be established within the Municipal Finance Section of MUDH. International expertis will be introduced into the unit by a combination of short-tern iuterrational courses for two of the permanent staff upon initial formation of the unit, together with the employment of a technical advisor for 1-2 years. Assistance will aleo include purchase of appropriate equipment (computers, software, photocopier, and training equipment) and one project vehicle. Staffint and Qualifications Permanent staffing would consist of one senior manager, two or three professional staff with accountancy qualifications (or business degrees) and at least three years of practical experience in financial management, and necessary support staff which would need to be recruited. The advisor would require a degree in municipal finance and at least five years' practical experience in developing countries, preferably in East Africa. Tonms of Ro-rence for Advisor (a) To provide technical advice and guidance to the FMCU in tho areas of municipal finance and accounting, with particular emphasis on revenue accounting and collection systems, - 109 - ANNME 7 Page 4 of 11 development and maintenance of taxation data bases for property and trade taxes and licenses, financial controls on cash and banking transections,s development of municipal and accounting systems; (b) To assist the FNCU to develop as an effective consultancy unit by providing guidance and training in the practice and method- ology of consultancy; (c) To work with the FMCU on an active basis in assisting the town management in three of the project towns to institute a revenue enhancement committee and to develop revenue enhance- ment proposals, to set up an advisory resource to the FMCU in performing the same task in the remaining project towns; (d) To work with the FMCU to install improved municipal revenue accounting and collection systems in at least two of the project towns, to act as an advisory resource in the remAining project towns; (-) To review the cost accounting requirements of the larger towns, propose appropriate changes if required and assist and advise the FMCU in introducing such changes; (f) To advise the FMCU in the preparation of a municiapl finance and accounting manual to be issued to all municipalities and to MUDH regional offices; (g) To advise the FMCU in the developruent of audio-visual and written training materials and seminars for officials of MUDH and the municipalities in the areas of revenue collection and accounting, costing of municipal services and activities, principles of cost recovery for appropriate municipal services, and such other aspects of municipal financial managezment as may be appropriate; and (h) In general, to assist the FMCU to fulfill its mandate which is to enhance the revenue of the project towns and to become a credible and effective consultancy unit within its first 18 months, with a view to subsequently training similar units in the MUDH regional offices which would then assist the remaining municipalities in Ethiopia. C. Advisory Support for WSSA Objectives: To continue the strengthening of WSSA's operations in the fields of financial management, engineering and management through the hiring of financial and engineering advisors. The advisors will be members of a multidisciplinary team assigned responsibility for the preparation and review of investment projects in the water and sanitation sectors and the preparation and initial implementation of a comprehensive organizational and management system for WSSA. - 110 - ANNEX 7 Page 5 of 11 Terms of Reference for Financial Advisor: The Financial Advisor. under the guidance of WSSA management and the Commissioner of NWRC and in cooperation with the local staff assigned to work with him, will *8 overall responsibility within the project for (a) financial policy d. opment, including tariffs, (b) financing plans and financial analysis X projects, (c) financial operations and budgeting procedures, (d) billing and revenue collection procedures, (e) supervision and review of the management study as it relates to financial management and procedures, and (f) preparation and implementation of in-service training programs in the financial analysis of investment projects. Terms of Reference for Engineering Advisor The Engineering Advisor, under the guidance of WSSA management and the Commissioner of NWRC and in cooperation with the local staff assigned to work with him, will assume overall responsibility within the project for (a) the evaluation of current projects, (b) the identification of new projects, (c) the preparation ef identified investment projects, (d) supervision and review of the management study as it related to project planning, and (e) preparation and implementation of in-service training programs in project planning. Duration and Reporting The advisors each will be hired for three years thus requiring six man-years of foreign consultants. The advisors will report to the General Manager of WSSA. D. Housing Finance study Obiectives: To examine measures to (a) expand the volume of formal housing finance; (b) maintain housing affordability, to the degree possible, for lower- and moderate-income households; (c) increase the efficiency of the housing finance system, and explore the opportunities for increasing competition in the market; and td) identify opportunities for introducing innovation into housing financial instruments which may be of benefit to the financial system as a whole. Scope of Work: The purpose of the descriptive overview and problems identification report will be to describe the structure and scale of the housing finance sub-sector within the context of the overall financial system of Ethiopia and to identify key problems which constrain the mobilization of resources for housing, impede t' X development of institutions lending for housing finance and limit lower-income families acess to housing finance. The analysis should cover at least the following pointss - 111 - ANNEX 7 Page 6 of ll (a) Sourcess Public Institutions (particularly HSB and municipalities), Coamerclal Bank of Ethiopia (CBl), employors, informal sources and the role of private savings; (b) T"*ss Types of loans available to finance developments, construction and purchasc of Individual houses end improvement of existing units; types and costs of units typically financed (apartments, detached houses, cosm.rcial/residontial houses, etc.); (c) Amounts: Vagnitud*s of housing finance available in recent years from different sources for different types of activities; Id) Term and Conditions: Interest rates, grace periods, maturities, down payments, collateral and procedural require-ents for the different sources and types, variations in terms and requirements for different income groups should be identified; evaluation of appropriateness of mortgage instruments should be carried out; and whether the cost of financing housing is in line with the costs of financing other investments or activities should also be reviewed; (a) Client Groups: Target and actual client groups for difforent sources and types, factors which impede low-income families access to housing finance, variations in access among different types of employment groups (e.g. public versus private sector, employees of large companies), variations In popular attitudes about borrowing for housing among income groups; and (f) Geotraphic Availabilitys Extent to which housing finance is availa,ble In urban area outside Addis Ababa and in rural areas. The report should also describe the institutional framework of the housing finance sub-sector. The description of the institutional framework should cover at least the following topless (a) Major Institutions: Main functions and policies, financial positions, roles and interrelationships of primary public and private institutions, if any, in the sector; and an evaluation of the ability and lnterest of other institutions to enter both the mortgage finance market and the market for investment and working capital funds for developers; evaluation of existing barriers to entry by other institutions; (b) Sources of Finance: Identification of suitable funding sources for primary institutions, especially HSB, CBE and municipalities, including a review of the role of pension fund, and insurance companies, alternative means for raising funds including financial innovation (e.g. long-term bond issues, mortgage - 112 - ANNEX 7 Page 7 of 11 backed), relative importance of foreign versus domestic sources, constraints on funds mobilization, relationships between terms on which funds are obtained and lending terms, implications of comparability of terms among institutions for possible future development of secondary market, identify long-term finance sources; (c) C'ient Groups: Institutions' definitions of their primary client groups, impact of terms and eligibility requirements on groups actually served, estimates of institutions' shares of their markets; td) Inflation: Identification of the extent to which foreseen inflation has an Impact on construction Costs of housing and on coverage of funds available and financial position of institutions as well as the viability of financial instruments and on funds available for housing finance generally; (e) Public Policiess Effects of public policies (e.g. foreclosure policies, nationalization of housinE. publicly prescribed institutional roles and interrelationships) on mobilization of funds, borrowing and lending practices, institutional relationships, accessibility of finance, financial position and recovery performance of mortgage loans; and (f) Informal Sector: Description of operation of informal mechanisms of housing finance. A Policy Report will present detailed recommendations and implementation plans to address the problems identified in the descriptive report. The recommendations should cover at least the following issues: (a) Housing Finance Institutions. Sources of Finance and Capital Structures Particular attention should be paid to (i) measures to increase the mobilization of domestic savings for housing finance; (ii) the principles, amounts and schedule of Government capital contributions to HSB end others; and (iii) role of foreign sources of housing finance; (b) Targets for Amounts of Publicly-S!apported Housing Finance over the Medium-Torm; c) Terms of Public Housing Financet Identification of the opportunities for varying interest rates as a tool to improve access to housing finance; proposals for down payments, maturitios, and appropriateness of and alternatives for mortgage instruments; (d) Institutional Interrelationships: Entry of non-specialized financial institutions into the housing market and measures to remove discrimination against potential participants in the housing finance system; financial and other relationships among - 113 - ANNEX 7 Page 8 of 11 HSB, CBE, municipalities, pension funds, insurance companies Including a review of (i) the appropriateness of laws and regulation., (ii) the potential for HSB and others to improve upon their roles in serving the need for housing finance, especially for lower-income families; and (iii) the need for and potential of developing a secondary mortgage market. (e) Response to Inflation: Appropriateness of various forms of indexing and variability of principal, interest rate, periodic repayments and/or terms of borrowing and lending instruments, inflation-adjusted accounting procedures and other measures to adjust for inflation in order to ensure the financial viability of the lending inscitutions and to maintain access and affordability for borrowers; (f) Accessibility: Measures to increase lower-income families' ability to borrow for house construction, purchase or Improvement, and to increase the capacities of financial Institutions to meet such demand; and (g) RepaymenL of Housine Finance Loanst Measures needed to improve the collection performance of housing finance institutions of their mortgage loans should be spelled out, including review of impediments to foreclosure or other appropriate sanctions and ways to address problems on institutions' past portfolios caused by the nationalization of housing. II. Training Proarams A. Supnort for NUPI The National Urban Planning Institute (NUPI) is an autonomous government office recently established in June 1987. It has three divisions, one for urban and spatial planning, one for research and development, and one for the training of professionals concerned with urban planning, development and administration, known as the College of Urban Planning. The College took over from the university the responsibility for an undergraduate degree course in urban planning, which had been running for 18 years, financed largely by the French government with faculty drawn from French universities. In addition, it offers a number of technical training courses, and plans to start a graduate degreo program with assistance from French and Italian universities, and short-term refresher courses for mid-career professionals already employed in the government. The Project would include support for further strengthening of NUPI as an institution and for increasing its capacity for urban and regional planning. This is to be achieved in three ways: (a) through curriculum development for local short-term courses for mid-career professionals, (b) through financial assistance to enable a small number of suitably qualified - 114 - ANNEX 7 Page 9 of 11 candidates to attend graduate degree programs at overseas universities, and (c) by providing foreign exchange for the purchase of essential equipment for NUPI staff. The total cost of this component is estimated at about US$350,000. Curriculum developm ent for local grofessional courses. The Project would enable NUPI to obtain the ssistance of overseas universities in developing curricula and establishing in-house short-term post-grad.uAte refresher courses for local govern nt officials and professionals concerned with physical planning and urban development. In collaboration with staff from NUPI's College of Urban Planning, faculty from one or two overseas universities will design up to four courses, propare necessary instruction material., and participate in the initial presentation of these courses. The subject matter of the courses is likely to cover such topics as sites and services development, integrated settlement upgrading projects, Income generating activities, and municipal services and administration. NUPr has already initiated discussions with the School u: Architecture and Planning at MIT and the School of Urban and Regional Planning at the University of Southern Californiat, which have expressed an interest in participating. The costs for the ten months of faculty time, travel expenses and course materials is astimated at about US$159,520. Overseas Trainint. The Project would also provide financial assistance to enable thr-e suitably qualified candidates to attend 1 or 2- year masters degree programs at overse"a universities on specialized subject areas. NUPI has speclfically Identified the neod for professionals in urban and regional economics, municipal finance and transportation. Ideally, the *slected students would attend degree programs at the same institutions concerned with the development of curricula for the short-term professional training programs, so that they could work with the faculty involved in designing the programs, and eventually asume responsibility for them. Th. costs for tuLtion, living expenses and travel for three people is estimated at about US$118,5U0. Equipment. Given the shortage of foreign exchange, NUPI lacks a variety of imported equipment and materials needed for planning, analysis and design. Most critically, they require heavy duty printing equipment for the copying of plans and drawings. The Project would provide NUPI with the necessary foreign exchange to purchase this item, which would cost about US$71,795 bssed on a recent quotation from a German manufacturer. - 11 - Page 10 of 11 NUPS SUPPORT COMPONT ----------------------------------------_--------------_____-_,--_.------- It._ Number ate US$ --------------------------------------------------------------------__---- Curriculum Davelopsents Faculty months at own Institution 4 350 30,800 Research "sistance 4 115 10,120 Faculty months in Ethiopia 6 350 63,000 Travel 8 4,000 32,000 Living expenses In Ethiopla 6 120 21,600 Course materials 4 S00 2,000 Sub-total 159.520 Overseas Training: Tuitions 2 year course for 1 person 2 12,000 24,000 1 year course for 2 people 2 12,000 24,000 Living expenses for: 2 yoer course 21 1,500 31,500 1 year course 18 1,500 27,000 Travel 3 4,000 12,000 Sub-totcl 118.500 Equipmentt Heavy duty printing equipment 1 71,795 71.795 Total S349.815 --------------------------------------------------------------__---------- B. HSB Tr-aininja Proatrm HSB TRAINING PROGRAM SUMNfARY BUDGET -------------------------------------------------------------__----------- Item US$ -_-------------_-____--------__--___--------------_-------__--------_____- in-the-job training in engineering "spacts of glum upgrading, development of sites and services, end construction of low-cost housings 5 courses x 3-4 months in India/Philippines 50,000 NSc. In Architecture: 1 course In UK/U9JCans4d. for 1 year program 25,000 M.Sc. In Banking and Finance: 1 course in UK/USA/Canada for 1 year program 25,000 M.Sc. in Accountings 1 course in UKIUSA/Cuada for 1 year program 25,000 Accounting Coursoe for accounting personnals 3 courses x 3-4 months in India/Philippines 22,500 Professional Resource Development: 1 course 20,000 Senior manag_ment visit to low-cost housing projects in IndialPhilippiness 6 persons x 15 days x $150/day epenses 13,500 Total S181.000 --------------------------------------------------------------__----------- - 116 - ANNF. 7 Page 11 of 11 C. WSSA Training Program WSSA TRAINING PROGRAM SUMMARY BUDGET -----------------------------_-------------_-----------_---_---__---------- Item US$ --------------------------------------------------------------------__----- M.Sc. in water engineering: 1 course in UKIU'1AICanada for 1-year program 25,000 H.Sc. in accounting 1 course in UK/USA/Canada for 1-year program 25,000 Selected short and medium-term training courses: (a) water resources management 2 courses x 2-3 months 10,000 (b) financial management 1 course x 2-3 months 5,000 (c) accounting courses for accounting personnel 2 courses x 3-4 months 15,000 Total $80.000 -----------------------------------------------------------__----------- III. Equipment and Vehicles for Prolect Anencies A. HSB Equipment/Vehicles HSB EQUIPMENT/VEHICLES SUMMARY BUDGET Item US$ 11 Portable Computers with Supplies 110,000 4 x 20 MB Hard Disk Drives 8,000 Computer Software 30,000 8 Long Wheel Base Vehicles @$25,000 200,000 101 Spare Farts Allowance 20,000 Miscellaneous Equipment (surveying, etc.) 10,000 Training Equipments Slide Projector, Flip Charts, Overhead Projector, Video Camera and Monitor, etc. 7,000 Photocopier and Supplies 15,000 Total $400,000 --------------------------------------------------------------__---------- E7HIOPIA MARKET TOWNS DEVELOPMENT PROJECT Detailed Cost Estimates ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Table 1: Detailed Cost Estimates by Coaponent and Year ('000 Birr) Base Cost Contingencies Total Foreign Component (End-89 Pr.) Physical Price Cost Z Cost 2 0/91 91/92 92193 93/94 94/95 95/96 PHASE ONE TOWNS Land/CoJpensation 112.49 11.25 19.66 143.40 0 0.00 0 4.30 15.77 40.15 43.02 25.81 14.34 Honsing Development 13183.94 1318.39 2481.43 16993.77 16 4428.64 26 509.51 1969.21 4155.45 5095.13 3037.09 1699.38 On-site Infrastructure 1907.79 190.77 351.11 2449.65 2 1181.24 48 73.4q 269.45 685.90 731.89 440.94 244.97 Municipal Infrastrucdure 5091.69 509.17 930.89 t531.75 6 2739.05 42 195.93 719.50 182B.88 1959.53 1175,73 653.17 Nunicipal Vehicles and Equipment 2637.01 263.70 501.80 3402.52 3 2739.51 80 102.07 374.29 952.70 1020.78 612.45 34A.26 _ Water Supply 33494.54 3267.76 6842.09 43604.39 40 25038.92 57 1308.13 4796.48 12209.23 13081.32 7948.79 4360.44 Emplovment Support 10350.00 - - 10350.00 9 6210.00 60 310.50 1139.50 2898.00 3105.00 1863.00 1035.00 Sub-total 66777.46 5561.04 11126.99 93465. 8 76 42336.96 51 2503.93 9181.20 2330.31 25039.67 15023.80 9346.56 PHASE TWO TaWNS Market leproveeents 6210.00 - - 6210.00 6 3726.00 60 186.30 693.10 1739.80 1863.00 1117.90 621.00 Employeent Support 4140.00 - - 4140.00 4 2494.00 60 124.20 455.40 1159.20 1242.00 745.20 414.00 Sub-toLal 10350.00 - - 10350.00 9 6210.00 60 310.50 1139.50 2M8.00 3105.00 1963.00 1035.00 INSTITUTIONAL SUPPORT 12638.20 796.59 2272.48 15707.27 14 9219.16 59 471.22 1727.90 4398.04 4712.1B 2827.31 1570.73 . Total Project Cost 99765.66 6357.63 13399.46 109522.75 '00 57766.12 53 3295.65 12047.50 30666.35 32856.85 19714.11 10952.29 * Go ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Table 2: Detailed Cost Estimates bv Component and Year (:000 US$) …-- - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - Base Cost Contingencies Total Foreign Cosponent (End-89 Pr.1 Physical Price Cost % Cost Z 90/91 91192 92193 93194 94195 95196 NHASE ONE TOWNS Land/Compensation 54.34 5.43 9.50 69.28 0 0.00 0 2.00 7.62 19.40 20.79 12.47 6.93 iJusing Developeent 6369.05 636.90 1198.76 9204.72 16 2139.44 26 246.14 902.52 2291.32 2461.42 1476.95 820.47 On-site Infrastructure 921.64 92.16 169.62 1193.41 2 570.b5 48 35.50 130.17 331.35 355.02 213.01 119.34 funicipal Infrastructure 2459.75 245.?8 449.71 3155.43 6 1323.50 42 94.65 347.10 893.52 946.63 567.99 315.54 Municipal Vehicles and Equipeent 1273.92 127.39 242.42 1643.73 3 1322.95 90 49.31 180.81 460.24 493.13 295.87 164.38 Water Supply 1b180.94 1579.63 3305.36 21064.92 4012096.10 57 631.95 2317.14 5891.18 6319.48 3791.69 2106.49 Employment Support 5000.00 0.00 0.00 5000.00 9 3000.00 60 150.00 550.00 1400.00 1500.00 900.00 500.04 Sub-total 32259.64 2686.49 5375.35 40321.49 76 42N36.96 105 2503.93 9181.20 23370.31 25039.67 15023.90 8346.56 PHASE TWO TOWNS Market lprovements 3000.00 0.00 O.DO 3000.00 6 1F0.0O 60 90.00 330.00 840.00 900.00 540.00 300.00 Employment Support 2000.00 0.00 0.00 2000.00 4 1200.00 60 60.00 220.00 560.00 600.00 360.00 200.00 Sub-total S000.00 0.00 0.00 5000.00 9 3000.00 60 150.00 550.00 1400.00 150Q.00 9Q0.00 500.00 INSTITUTIONAL SUPPORT 6105.41 3e4.83 1097.82 7598.05 14 4453.70 59 227.64 834.69 2124.66 2276.42 1365.85 759.81 Total Project Cost 43365.05 3071.32 6473.17 52909.54 100 27906.34 53 1597.27 5820.05 14814.66 15872.97 9523.73 5290.96 X|l o --- -- -- -- -- -- -- -- - -- -- -- -- -- -- --- -- -- -- -- -- -- --- -- -- -- -- -- -- -- --- -- -- -- -- -- - --- -- -- - -- -- -- --- - - -- - - - -- - NNWET TMIIS DEW5OPENT PRCOECT Table 3: Detailed Cost Estimutes by Coopmneut and Ur u or the Tomn of M80 ('000 Birn hsae Cost Contingmcisn Total Freign Couponent lEad-I9 Pr.) Physical Price Cost I cost t 90191 ?1/92 9213 93194 94U95 9519 Luad/Caopnsatian 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0,00 0.00 0.00 0.00 9.00 Housing Deelopmnt Infrastructure Roads 87.37 8.74 15.73 111.84 It 30.50 27 3.36 12.30 31.31 33.M5 20.13 11.13 Drains and Culverts 0.00- 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 later Supply 48.74 4.87 9.12 62.74 6 0.22 64 1.8B 6.90 17.57 13.32 11.29 6.27 Ele:tricity 30.57 3.06 5.89 39.52 4 36.57 93 1.1 I .35 11.07 11.66 7.41 3.95 Sub-total, H.O.I. (Net) I.69 16.67 30.74 214.10 21 107.29 50 6.42 23.55 59." 64.23 31.54 21.41 Taxe and Duties 20.13 2.01 3.52 25. 0.00 0 0.77 2.32 7.13 7.70 4.62 2.57 Sub-total linCl.7T. D.) 196.82 18.68 34.26 239.76 107.29 45 7.19 26.37 47.13 71.93 43.16 23.93 fblicipal Infrastructure Rads 138.34 13.03 26.26 178.44 17 139.44 79 5.35 19.63 49.96 53.53 32.12 17.4 Drains 73.14 7.31 12.93 93.39 9 9.95 11 2.80 10.27 26.15 23.02 16U.1 9.34 BridQgs 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Electricity 2.52 0.25 0.49 3.26 0 3.02 93 0.10 0.36 0.91 0.93 0.57 0.33 Wgricultural lartets 93.80 9.89 16.57 114.25 11 70.07 61 3.43 12.57 31.99 34.27 20.56 11.42 Sub-total, L.I. (Net) 302.91 30.28 56.25 3M9.34 39 22.37 57 11.63 42.33 109.01 116.00 70.08 33.93 Taxes and Dutin 47.62 4.76 3.32 60.71 0.00 0 1.92 6.68 17.00 10.21 1O." 6.07 Sub-total (inel.T.t B.) 350.43 35.04 64.57 450.05 222.37 49 13.50 49.51 126.01 135.01 81.01 45.00 flanicipal EquipmntlVehicles 327.38 32.74 63,55 423.66 41 423.66 100 12.71 46.60 119.63 127.10 76.26 42.37 Type: Vicw&-tanker, 1 no. Typ: ftan truck(7 ton), I no. Type: Saill tools and equipit. e S.Y.11. Cntrs. 130 Itrs., 20 no. o Sub-total, l.E.IV. (Not) 327.38 32.74 63.55 423.66 41 423.66 100 12.71 46.60 118.63 127.10 76.26 U .37 Taxis and Duties 90.59 9.06 14.08 102.72 0.00 0 3.09 11.30 29.76 30.32 19." 10.27 Sub-total (incl.T.S D.) 407.96 40.80 77.63 526.39 423.6 60 15.79 57.90 17.39 157.92 94.75 52.64 Total (Net of Taxes and Duties) 796.97 79.N9 150.54 1027.10 100 753.32 73 30.91 112.99 297.5q 306.13 184.88 102.71 Total Taxes and Duties 149.33 14.13 25.93 199.09 0.00 0 5.67 20.80 52.95 56.73 34.04 19.91 Total lincl. Taxes and Duties) 945.20 94.52 176.46 1216.19 73.32 62 36.49 133.79 340.53 34.36 218.91 121.62 - - - -- - --- -- -- - -- - -- - -- - - --- -- __ ------_ ETHIOPIA MARKET TOWNS DEYELOPREMT PROJECT Table 4: Detailed Cost Estimates by Cosponent and Year for the ToNn Df ASSELA ('OOO Birr) Base Cost Contingencies Total Foreign Component (End-89 Pr.) Physical Price Cost I Cost 1 90/91 91/92 92193 93/94 T4/95 95196 Land/Compensation 30.70 3.07 5.37 39.14 2 0.00 0 1.17 4.31 10.96 111.74 7.04 3.91 Hodsing Development Infrastructure Roads, Drakins I Culverts 196.41 19.64 35.36 251.41 15 69.56 27 7.54 27.66 70.4C 75.42 45.25 25.14 Water Supply 109.67 10.97 20.52 141.16 B 90.50 64 4.23 1,5.53 39.53 42.35 25.41 14.12 Electricity 137.56 13.76 26.50 177.94 It 164.54 931 5.34 19.56 49.79 53.35 32.01 17.7B Sub-total,H.D.I. (met) 443.67 44.37 92.38 570.41 34 323.60 57 17.11 62.75 159.72 171.12 102.67 57.04 Takes and Duties 60.92 6.09 10.65 77.66 0.00 0 2.33, 9.54 21.75 23.30 13.9B 7.77 Sub-total lincl.T.1 D.) 504.59 50.46 93.03 646.09 323.60 bO 19.44 71.29 161.46 i194.42 116.65 64.91 Municipal Infrastructure Roads 57.64 5.76 10.94 74.35 4 58.10 78 2.23 9.19 20.92 22.3t 13.3B 7.44 Drains 434.25 43.42 76.78 554.45 33 58.45 11 16.63 60.99 155.25 166.34 99.80 55.45 Bridges 0.00 0.00 0.00 0.00 0 0.00 64 0.00 0.00 0.00 0.00 0.00 0.00 Electricity 0.00 0.00 0.00 0.00 0 0.00 93r 0.00 0.00 0.00 0.00 0.00 0.000 Agricultural Markets 104.91 10.49 19.50 134.90 8 7TL10 59 4.05 14.84 37.77 40.47 24.2B 13.49 Sub-total, Nt.J. (get) 596.90 59.69 107.22 763.70 45 194.65 25 22.91 94.01 213.84 229.11 137.47 76.37 Taxes and Duties 37.02 3.70 6.47 47.19 0.00 0 1.42 5.19 13.21 14.16 9.49 4.72 Sub-total (incl.T.& D.) 633.82 63.38 113.69 810.90 194.65 24 24.33 59.20 227.05 243.27 145.96 91.09 Municipal Equipiient/Vehicles 236.42 23.64 45.89 305.95 19 305.95 100 9.19 33.65 65.67 91.79 55.07 30.59 Type: Type:, Type: Grader 1 no. I z Small tools and equipat. S.Y.M. Cntrs. 130 Itrs., 25 no. 1 0 Sub-total, M.E./V. (Net) 236.42 23.64 45.99 305.95 19 305.95 100 9.19 33.65 95.67 91.79 55.07 30.59 Taxes and Duties 58.19 5.82 10.17 74.19 0.00 0 2.23 9.16 20.77 22.25 13.35 7.42 Sub-total lincl.T.& D.) 294.61 29.46 56.06 390.13 305.95 80 11.40 41.91 106.44 114.04 69.42 39.01 …-- - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - --…--- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total (Net of Taxes and Duties) 1307.59 130.76 240.96 1679.21 100 824.20 49 50.39 194.71 470.16 503.76 302.26 167.92 Total Taxes and Duties 156.13 15.61 217.29 199.04 0,00 0 5.97 21.89 55.73 59.71 35.83 19.90 Total (inl. Taxes and Duties) 1463,72 146.37 269.15 1979.24 924.20 44 56.35 206.61 525.91 563.47 339.09 197.92 …-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ----------- …- -- - ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Table 5i Detailed Cost Estiaates by Component and Year for the Town of 6BOA ('000 Dirr$ Base Cost Contingencies Total Foreign Coeponent 1.,ad-9 Pr.) Physical Price Cost 2 Cost t 90191 91192 92/93 93194 94/95 95196 Land/Compensation 24.48 2.45 4.28 31.21 2 0.00 0 0.94 3.43 8.74 9.36 5.62 3.12 Housing Developient Infrastructure Roads, Drains & Culverts 69.70 6.97 12.55 89.22 7 24.38 27 2.68 9.91 24.98 26.77 16.06 9.92 Water Supply 32.50 3.25 6.09 41.83 3 26.81 64 1.25 4.60 11.71 12.55 7.53 4.19 Electricity B4.94 8.48 16.34 109.67 8 101.47 93 3.29 12.06 30.71 32.90 19.74 10.97 Sub-total,H.D.I. (Net) 187.04 29.70 34.97 240.71 18 152.66 63 7.22 26.48 67.40 72.21 43.33 24.07 Taxes and Duties 28.98 2.90 5.07 36.95 0.00 0 1.11 4.06 10.35 11.01 6.65 3.69 Sub-total Uincl.T.& 0.3 216.02 21.60 40.04 277.66 152.66 55 8.33 30.54 77.75 83.30 49.98 27.77 Wunicipal Infrastructure Roads 307.82 30.7B SB.44 397.03 30 310.24 70 11.91 43.67 111.17 119.11 71.47 39.70 Drains 260.01 26.00 45.97 331.99 25 35.00 11 9.96 36.52 92.96 99.60 59.76 33.20 Bridges 0.00 0.00 0.00 0.00 0 0.00 64 0.00 0.00 0.00 0.00 0.00 0.00 Electricity 0.00 0.00 0.00 0.00 0 0.00 93 0.00 0.00 0.00 0.00 0.00 0.00 Agricultural Mlarkets 52.23 5.22 9.71 67.16 5 38.88 58 2.01 7.39 18.01 20.15 12.09 6.72 Sub-total, M.I. (Net) 620.06 62.01 114.12 -796.18 59 384.12 49 23.89 87.58 222.93 239.85 143.31 79.62 Taxes and Duties 73.06 7.31 12.77 93.13 0.00 0 2.79 10.24 26.08 27.94 16.76 9.31 Sub-total lincl.T.t D.) 693.12 69.31 126.89 889.32 384.12 43 26.68 97.82 249.01 266.90 160.08 88.93 Municipal Equipsent/Yehicles 211.55 21.16 41.07 273.77 20 273.77 10 9.21 30.11 76.66 82.13 49.28 27.38 Type: Type: * Type: Grader 1 no. O I Stall tools and equipeit. S.V.Pt. Cntrs. 130 Itrs., 25 no. 0OD Sub-total, M.E./V. (Net) 211.55 21.16 41.07 273.77 20 273.77 100 9.21 30.11 76.66 82.13 49.28 27.38 Taxes and Duties 52.07 5.21 9.10 66.38 0.00 0 1.99 7.30 18.59 19.91 11.95 6.64 Sub-total (incl.T.& D.) 263.62 26.36 50.17 340.15 273.77 80 10.20 37.42 95.24 102.05 61.23 34.02 Total lNet of Taxes and Duties) 1043.13 104.31 194.43 1341.88 100 B10.56 60 40.26 147.61 375.73 402.56 241.54 134.19 Total Taxes and Duties 154.11 15.41 26.94 196.46 0.00 0 5.89 21.61 55.01 58.94 35.36 19.65 Total fincl. Taxes and Duties) 1197.7; 119.72 221.3i 1538.34 810.56 53 46.15 169.22 430.73 461.50 276.90 153.93 ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Table 6: Detailed Cost Estimates by Cosponent and Year for the ToNn of ROBE (t000 Birr) Base Cost Contingencies Total Foreign Coeponent (End-89 Pr.) Physical Price Cost I Cost 2 90/91 91192 92/93 ?3/94 94/95 95196 Land/Compensation 0.00 0.00 0,00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Housing Devulopment Infrastructure Roads, Drains I Culverts 69.70 6.97 12.55 89.22 12 24.39 27 2.69 9.81 24.99 26.77 16.06 8.92 Nater Supply 32.50 3.25 6.08 41.83 6 26.81 64 1.25 4.60 11.71 12.55 7.53 4.18 Electricity 64.97 6.50 12.52 83.90 11 77.70 93 2.52 9.24 23.51 25.19 15.12 8.40 Sub-tatal,H.D.l. (Net) 167.17 16.72 31.14 215.03 28 128.89 60 6.45 23.65 60.21 64.51 31.70 21.50 Tur.s and Duties 24.46 2.45 4.28 31.19 0.00 0 0.94 3.43 9.73 9.36 5.61 3.12 Sub-total Uincl.T.& D.) 191.63 19.16 35.42 246.21 128.99 52 7.39 27.08 69.94 73.36 44.32 24.62 Municipal Infrastructure Roads 118.02 11.90 22.41 152.23 20 118.96 78 4.57 16.75 12.63 45.67 27.40 15.22 Drains 164.65 16.46 29.11 210.22 28 22.16 11 6.31 23.12 58.86 6,.0 37.84 21.02 Bridges 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 . 0.00 0.00 Electricity 0.00 0.00 0.00 0.0 0 0.00 0 0.00 0.00 0.0 0.00 0.00 0.00 Agricultural Markets 141.95 14.19 26.39 182.53 24 105.67 58 5.49 20.08 51.11 54.76 32.36 18.25 Sub-total, ".l. (Net) 424.62 42.46 77.91 A4."9 72 246.79 45 16.35 59.95 152.60 163.50 99.10 54.50 Taxes and Duties 46.94 4.69 8.20 59.08 0.00 0 1.a0 6.58 16.75 17.95 10.77 s.9 Sub-total IiUcl.T.& 0.) 471.56 47.16 96.11 604.92 246.79 41 18.14 66.53 169.35 181.45 108.37 60.43 Municipal Equipuent/Vehicles 0.00 0.00 0.00 0.00 0 0.00 100 0.00 0100 0.00 0.00 0.00 0.00 Type: Type: c Ssall tools and equipet.o S.VJI. Cntrs. 130 Itrs rr Sub-total, N.E.IM. (Net) 0.00 0.00 0.00 0.00 0 0.00 100 0.00 0.00 0.00 0.00 0.00 0.00 Taxes and Duties 0.00 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Sub-total lincl.T.t D.) 0.00 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Total (Net of Taxes and Duties) 591.79 59.1B 109.05 760.01 100 375.68 49 22.00 93.60 212.90 229.00 136.30 76.00 Total Taxes and Duties 71.40 7.14 12.4B 91.02 0.00 0 2.73 10.01 25.49 27.31 16.3B 9.10 Total (incl. 'axes and Duties) 663.19 66.32 121.53 951.03 375.69 44 25.53 93.61 233.29 255.31 153.19 85.10 ETHIOPIA HARKET TOWNS DEVELOPMENT PROJECT Table 7: Detailed Cost Estimates bv Coponent and Year for the Town of HIZAN TEFERI 1 OSO Birr) Base Cost Contingencies Total Foreign Cosponent (End-99 Pr.) Physical Price Cost . Cost 7 90191 91/92 92193 q3194 94/95 91/96 Land/Compensation 2.86 0.29 0.50 3.64 1 0.00 0 0.11 0.40 1.02 1.09 0.66 0.36 Housing Development Infrastructure Roads, Drains S Culverts 70.31 7.03 12.66 q9.00 16 24.59 27 2.70 9.90 25.20 27.00 16.20 9.00 Water Supply 33.09 3.31 6.19 42.58 7 27.29 64 1.28 4.65 11.92 12.77 7.66 4.26 Electricity 33.63 3.36 6.49 43.47 I 40.22 93 1.30 4.78 12.17 13.04 7.92 4.35 Sub-total,H.D.I. (Met) 137.02 13.70 25.33 176.05 31 92.11 52 5.28 19.37 49.29 52.91 31.69 1760 Taxes and Duties 17.46 1.75 3.05 22.26 0.00 0 0.67 2.45 6.23 6.60 4.01 2.23 Sub-total Iincl.T.& D.) 154.49 15.45 26.39 198.31 92.11 46 5.95 21.81 55.53 59.49 35.70 19.93 Iunicipal Infrastructure Roads 41.75 4.17 7.93 53.84 9 42.07 78 1.62 5.92 15.09 1b.15 9.69 5. 9 Drains I9.O0 1.90 3.10 22.99 4 2.42 t1 0.69 2.53 6.43 6.99 4.14 2.30 Bridges 0.00 0.00 0.00 0.00 0 0.00 64 0.00 0.00 0.00 0.00 ° °O 0.00 Electricity 4.20 0.42 0.81 5.43 1 5.03 93 0.16 0.60 1.52 1.63 0." 0.54 Agricultural Markets 117.91 11.79 21.92 151.62 27 - 87.77 59 4.55 16.68 42.45 45.49 27.29 15.16 Sub-total, M.1. INet) 191.85 19.19 33.84 233.97 41 137.30 59 7.02 25.73 65.48 70.16 42.10 23.39 Taxes and Duties 26.11 2.61 4.56 33.29 0.00 0 1.00 3.66 9.32 9.9" 5.9t 3.33 Sub-total lincl.T.1 5.) 207.97 20.80 38.40 267.16 137,30 51 8.01 29.39 74.91 UqklS 48.09 26.72 Municipal EquipmentJVehicles 119.97 12.00 23.29 155.25 27 155.25 100 4.66 17.08 43.47 46.59 27.95 15.53 Type: Type: Type: Open truck(7 ton), I no. 00 Small tools and equipat. S.Y.M. Cntrs. 130 ltrs., 15 no. 0 Sub-total, M.E./V. (Net) 119.97 12.00 23.29 15S.25 27 155.25 100 4.66 17.08 43.47 46.59 27.95 15.53 , Taxes and Duties 29.53 2.95 5.16 37.64 0.00 0 1;13 4.14 10.54 11.29 6.78 3.76 4> Sub-total (incl.T.& D.) 149.50 14.95 28.45 192.90 155.25 80 5.79 21.22 54.01 57.87 34.72 19.29 Total (Net of Taxes and Duties) 441.70 44.17 92.95 569.92 100 384U.66 66 17.06 62.57 159.27 170.65 102.39 S6.98 Total Taxes and Duties 73.11 7.31 12.78 93.20 0.00 0 2.80 10. 25 26.09 27.96 16.78 9.32 Total (icl. Taxes and Duties) 514.81 51.49 95,73 662.01 384.ib 59 19.86 72.92 189.36 198.60 119.16 66.20 ---- ---- ---- ---- ---- ---- ---- ---- ----_--- ---- ---__--- ---- ---- ---- ---- ---- - -- - - - - - -- --- --- -- - - -_---- ETHIOPIA NARKET TONNS DEVELOPMENT PROJECT Table B: Detailed Cost Estimates by Component and Year for the Town of SHASHEMANE ('000 9irr) Base Cost Contingencies Total Foreign Component (End-09 Pr.) Physical Price Cost I Cost I 90191 91/92 9219i3 93/94 94195 95196 LandlCospensation 2.45 0.24 0.43 3.12 0 0.00 0 0.09 0.34 0.97 0.94 0.56 0.31 Housing Development Infrastructure Roads, Drains & Culverts 14R. 0 14.94 26.71 194.96 Is 51.90 27 5.70 20.90 53.19 6.99 34.19 19.00 Mater Sapply 91.24 9.12 15.20 104.57 10 67.04 64 3.14 11.50 29.28 31.37 11.92 10.46 Electricity 61.15 6.11 11.7B 79.04 7 73.131 93. 2.37 9.69 22.13 23.71 14.23 7.90 Suh-total,H.D.l. (Net) 290.79 29.09 53.69 373.56 35 191.97 St 11.21 41.09 104.60 112.07 67.24 37.36 Taxes and Duties 36.05 3.60 6.30 45.95 0.00 0 1.39 5.05 12.07 13.79 9.27 4.60 Sub-total fincl.T.1 D.) 326.84 32.63 59.99 419.51 191.97 46 12.59 46.15 117.46 125.93 75.51 41.95 Runi cipal Infrastructure Roabds 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Drains 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Bridges 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0l00 0.00 0.00 0.00 Electricity 0.00 0.00 0.00 0.00 0 0.00 0 0.00 I0.00 0.00 0.00 0.00 0.00 Agricultural Mlarkets 96.45 9.64 16.07 111.16 10 64.36 50 3.33 12.23 31.13 33.35 20.1D1 11.12 Sub-total, R.I. (Net) 86.45 9.64 16.07 111.16 10 -64.36 58 3.33 12.23 $1.13 33.35 20.01 11.12 Taxes and Duties 12.24 1.22 2.14 15.60 0.00 0 0.47 1.72 4.37 4.68 2.91 1.56 Sub-total fincl.T.& B.) 99.69 9.97 19.21 126.77 64.36 51 3.90 13.94 35.49 33.03 22.92 12.68 Municipal Equipment/Vehicles 444.65 44.47 96.31 575.43 54 575.43 100 17.26 63.30 161.12 172.63 103.53 57.54 Type: Vacuum-tanker I no. Typet. Grader I no. Type: Small tools and equiput. S.V.M. Cntfs. 130 Itrs., 50 no. 0 Hi Sub-total, M.E./V. (Net) 444.65 44.47 96.31 575.43 54 575.43 100 17.26 63.30 16.12 172.63 103.58 57.54 Taxes and Duties 109.45 10.94 19.13 139.52 0.00 0 4.19 15.35 39.07 41.96 25.11 13.95 Sub-total Cincl.T.& D.) 554.1Q 55.41 105.44 714.95 575.43 80 21.45 78.64 200.19 214.49 129.69 71.50 Total (Net of Taxes and Duties) 824.34 82.43 156.51 1063.29 100 831.75 79 31.90 116.96 297.72 319.99 191.39 106.33 Total Taxes and Duties 157.73 15.77 27.57 201.09 0.00 0 6.03 22.12 56.30 60.32 36.19 20.11 Total limcl. Taxes and Duties) 992.07 98.21 194.09 1264.35 931.75 66 37.93 139.09 354.02 379.31 227.59 126.44 ETHIOPIA MARKET TODNS DEVELOPMENT PROJECT Table 9: Detailed Cost Estimates by Component and Year for the Town of NOLLISSBO (000 Dirr) Base Cost Contingencws Total Foreign Coaponent IEnd-89 Pr.) Physical Price Cost Z Cost 1 90191 91/92 92193 93/94 94/95 95/96 Land/Compensation 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Housing Development Infrastructure Roads, Drains & Culverts 163.65 16.36 29.46 209.47 11 57.12 27 6.28 23.04 58.65 62.84 37.71 20.95 Water Supply 72.05 7.20 13.48 92.73 5 59.45 64 2.78 10.20 25.97 27.92 16.a, 9.27 Electricity 56.98 5.70 10.91 73.66 4 69.15 93 2.21 B.10 20.62 22.10 13.26 7.37 Sub-total,H.D.l. (Net) 292.68 29.27 53.92 375.86 20 184.72 49 11.28 41.34 105.24 112.76 67.65 37.59 Taxes and Duties 34.72 3.47 6.07 44.26 0.00 0 1.33 4.87 12.39 13.28 7.97 4.43 Sub-total (incl.T.& D.) 327.40 32.74 59.99 420.12 184.72 44 12.60 46.21 117.63 126.04 75.62 42.01 Municipal Infrastructure Roads 290.70 29.07 55.19 374.96 20 293.00 78 11.25 41.25 104.99 112.49 67.49 37.50 Drains 165.09 16.51 29.19 210.79 11 22.22 11 6.32 23.19 59.02 63.24 37.94 21.0B Bridges 134.05 13.40 25.08 172.53 9 110.61 64 5.19 19.99 48.31 51.76 31.06 17.25 Electricity 7.57 0.76 1.46 9.78 1 9.05 93 0.29 1.08 2.74 2.93 1.76 0.98 Agricultural Markets 223.41 22.34 41.53 287.29 -15 t66.32 5S 1.62 31.60 80.44 96.19 51.71 28.73 Sub-total, I.I. INet) 820.82 82.09 152.45 1055.36 57 601.20 57 31.66 116.09 295.50 316.61 189.96 105.54 Taxes and Duties 113.59 11.36 19.85 144.79 0.00 0 4.34 15.93 40.54 43.44 26.06 14.4B Sub-total lincl.T.L D.) 934.40 93.44 172.30 1200.15 601.20 50 36.00 132.02 336.04 360.04 214.03 120.01 Municipal EquipmentlVehiEles 327.58 32.76 63.59 423.93 23 423.93 1P8 12.72 46.63 118.70 127.19 76.31 42.39 Type: Yacuum-tanker I no. Type: Type: Open truck I7 ton) I no. Small tools and equipmt. O z S.V.M. Cntrs. 130 Itrs., 50 no. Sub-total, N.E.JV. (Net) 327.59 32.76 63.59 423.93 23 423.93 100 12.72 46.63 11.70 127.19 76.31 42.39 ° Taxes and Duties 80.63 8.06 14.09 102.79 0.00 0 3.09 11.31 28.79 30.84 18.50 10.29 _ Sub-total lincl.T.I D.) 408.21 40.82 77.69 526.72 423.93 80 15.80 57.94 147.49 158.02 94.91 52.67 > Total (Net of Taxes and Duties) 1441.00 144.11 269.96 1855.15 100 1209.85 65 55.65 204.07 519.44 556.54 333.93 185.51 Total Taxes and Duties 228.93 22.99 40.02 291.94 0.00 0 9.76 32.10 31.72 97.55 52.53 29.18 Total lincl. Taxes and Duties) 1670.01 167.00 309.97 2146.99 1209.85 56 64.41 236.17 601.16 644.10 3k6.46 214.74 -- - - -- ------- ------- -- - _ - _ - ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Table 10: Detailed Cost Estimates by Coap&nent and Year for the Town of ARSI NESELE ('000 Birr) Base Cost Contingencies Total Foreign Coaponent (End-89 Pr.) Physical Price Cost I Cost 1 90/91 91192 ¶2/93 93q94 94195 95196 LandtC80pensation 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Housing Development Infrastracture Roads, Drains and Culverts 0.00 0.00 0.00 0.00 0 O 0.40 0 0.00 0.00 0.00 M.OO 0.00 0.00 later Supply 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 ElectriEity 0.00 0.00 0.b0 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Sub-total,H.D.I. (Net) 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Taxes and Duties 0.00 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 0.00 a.oo Sub-total lincl.T.& D.) 0.00 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Nunicipal Infrastructure Roads 494.29 49.43 93.04 637.56 49 498.19 18 19.13 70.13 178.52 191.27 114.76 63.76 Drains 229.23 22.92 40.53 292.68 22 30.96 11 8.78 32.20 81.95 97.81 52.bB 29.27 Bridges 0.00 0.00 0.00 0.00 0 0.00 64 0.00 0.00 0.00 0.00 0.00 0.09 Electricity 0.00 0.40 0.00 0.00 0 0.00 93 0.00 0.00 0.00 0.00 0.00 0.00 Agricultural Markets 179.42 17.84 33.17 229.43 17 132.92 53 6.99 25.24 64.24 69.93 41.30 22.94 Sub-total, R.1. (Net) 901.95 90.19 167.54 1159.69 8B 661.87 57 34.79 127.56 324.71 347.90 208.74 115.97 TaKes and Duties 125.89 12.59 22.00 160.48 0.00 0 4.81 17.65 44.93 49.14 28.99 16.05 Sub-total Iincl.T.1 D.i 1027.83 102.78 189.54 1320.15 661.87 50 39.60 145.22 369.64 396.05 237.63 132.02 Municipal Equipuent/Vehicles 121.42 12.14 23.57 157.t3 12 157.13 100 4.71 17.28 44.00 47.14 2B.28 15.71 Type: Open-truckf7 ton), I no: Type: Type: Small tools and equipet. S.Y.B. Cntrs. 130 Itrs., 50 no. Sub-total, M.E./V. (Net) 121.42 12.14 23.57 157.13 12 157.13 00 4.71 17.26 44.00 47.14 28.29 15.71 Taxes and Duties 29.89 2.99 5.22 39.10 0.00 0 1.14 4.19 10.67 11.43 6.86 3.91 Sub-total lincl.T.L D.) 151.31 15.13 28.79 195.23 157.13 80 5.96 21.49 54.6b 59.57 35.14 19.52 …- - - - - - - - - - - - - --…_…- - - --.- ____ _ _ _ _ _ _ _ _ _ _ Total INet of Taxes and Duties) 1023.37 102.34 191.11 1316.91 100 819.00 62 39.50 144.95 369.71 395.04 237.03 131.61 Total Taxes and Duties 155.77 15.58 27.23 19B.59 0.00 0 5.96 21.94 55.60 59.57 35.74 19.86 Total (incl. Taxes and Duties) 1179.14 117.91 219.33 1515.38 919.00 54 45.46 166.69 424.31 45A.62 272.77 151.54 ……… - … -…--_ - _ - - - - _ - - _ - - - - - - _ - -- - _ - _ - _ - _ - - -- - ---- ETHIOPI A MARKET TOWNS DEVELOPMENT PROJECT Table 11: Detailed Cost Estisates by Component and Year fGr the Town of ZINAY (t000 sirrl Base Cost Contingencies Total Foreign Component fEnd-Bq Pr.) Physical Price Cost Z Cost 2 90/91 91192 92/93 93/94 94195 95196 Land/Compensation 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 HDQsing Development Infrastructure Roads, Drains I Culverts 0.00 0.00 0.0o 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Water Supply 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Electricity 0.00 0.00 * 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Sub-total,H.D.I. (Pet) 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Taxes and Duties 0.00 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Sub-total Uincl.T.t D.) 0.00 0.00 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Municipal Infrastructure Roads 119.32 11.93 22.65 153.91 13 120.26 79 4.62 16.93 43.09 46.17 27.70 15.39 Drains 454.22 45.42 80.31 579.95 47 61.14 11 17.40 63.79 162.39 173.9 104.39 5B.O0 Bridges 0.00 0.00 0.00 0.00 0 0.00 64 0.00 0.00 0.00 0.00 0.00 0 00 Electricity 6.73 0.67 1.30 8.69 1 8.04 93 0.26 0.96 2.43 2.61 1.56 0.87 -' Agricultural farkets 47.57 4.76 9.89 61.21 5 37.54 61 1.84 6.73 17.14 18.36. 11.02 6.12 0 Sub-total, P.1. (Net) 627.94 62.79 113.13 903.76 65 226.99 28 24.11 88.41 225.05 241.13 144.68 80.38 Taxes and Duties 46.03 4.60 B.05 59.68 0.00 0 1.76 6.45 16.43 17.60 10.56 5.87 Sub-total (incl.T.& D.) 673.87 67.39 121.19 862.43 226.99 26 25.97 94.87 241.48 258.73 155.24 86.24 Municipal EWuipment/Vehicles 327.17 32.72 63.51 423.39 35 423.39 100 12.70 46.57 il8.55 127.02 76.21 42.34 Type: Yacouu-tanker, I. no. Type: Open-truck(7 ton), I no. Type:- Small tools and equipmt. 0 re S.Y.M. Cntrs. 130 Itrs., IS no. '-a Sub-total, I.E.JV. (Net) 327.17 32.72 b.51 423.39 35 423.39 I0A 12.70 46.57 118.55 127.02 76.21 42.34 Taxes and Duties 90.53 8.05 14.09 102.66 0.00 0 3.09 11.29 28.74 30.80 18.48 10.27 , Sub-total (inrl.T.& D.) 407.70 40.77 77.58 526.05 423.39 80 15.78 57.87 147.29 157.92 94.69 52.61 Total (Net of Taxes and Duties) 955.01 95.50 176.64 1227.15 100 650.38 53 36.81 174." 343.60 36b.15 220.99 122.72 Total Taxes and Duties 126.56 12.66 22.12 161.33 0.00 0 4.84 17.75 45.17 48.40 29.04 16.13 Total linol. Taxes and Duties) 101.57 108.16 198.76 1388.49 650.3B 47 41.65 152.73 398.79 416.55 249.93 139.85 …-- - - - - - - - - - - - - -- - - - - - - - - - - - - - …- --…- - - - - - - - - - -- - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - 128 - ANNEX 8 Page 12 of 14 ETNIUIA MET TM DEEwIE PABIECT Tabe 12, etailed Cost Estiutes for ater Sply Schm by Yea (o00 Olrrn ues Cost Coistingcius Total Foreip Caopanmt IErd-D Pr.1 Physical Price Cost I Cost 1 90191 91192 92193 93194 94195 95196 Maior PrijKts huola Lad/Cospution 26.00 2.60 4.54 33.14 0 0.00 0 0.9 3.65 9.29 9.9 5.97 3.31 Civil lorks 5084.70 506.47 1023.99 617. 1 29 31.9 1 191.51 727.39 1952.61 5.15 1191.09 41.72 Electr. and lrich. Equipnt 1309.06 10.91 319.19 2379.15 10 1324.39 77 71.37 261.71 66.16 713.74 423.25 237.91 Pipe Laying 2194.34 23.43 537.37 3721.14 16 737.32 21 111.43 409.33 1041.92 1114.34 49.31 372.11 Sujply of Pipes and Fittings 4714.29 471.43 1497.17 2.19 39 3093.19 9 26.49 977.12 2487.21 264.37 1591.92 0I.29 Engineering and Constr. Spa. 990.14 49.51 200.31 1239.96 5 971.56 71 37.20 134.40 347.19 371.99 223.19 124.00 Sub-total, Rsale (Notl 17519.53 1702.35 3652.57 22373.44 100 14974.43 65 68.20 2516.03 6404.56 6362.03 4117.22 2207.34 Taxes and Duties 2669.68 266.97 466.64 3403.29 0.00 0 102.10 314.36 952.92 1020.99 612.59 340.33 Sub-total (incl.Y.L D.. 20133.21 1969.31 4119.21 26276.73 14974.43 57 783.30 2390.44 7357.48 73.02 4729.01 2627.67 Shbshesmne Laod/Copeosation 26.00 2.60 4.54 33.14 0 0.00 0 0.99 3.U5 9.23 9.94 5.97 3.31 Civil Marks 2856.00 285.60 590.84 3722.44 2t 2042.98 55 111.t7 409.47 1042.29 1116.73 670.04 372.24 Electr. and huch. Equipwnt 2043.26 204.33 439,74 2687.33 19 2066.97 77 90.62 295.61 752.45 906.20 403.72 268.73 Pipe Laying 1625.91 162.58 303.19 2091.57 15 475.53 23 2.75 230.07 S95.6U 7.47 3L6.49 209.16 Supply of Pipus and Fittings 3798.93 370.99 845.64 5013.46 35 4599.30 92 150.40 551.49 1403.77 1504.04 902.42 501.35 Engineering and Constr. Spa. 619.94 30.94 125.19 774.97 5 549.10 71 23.25 85.25 216.99 232.49 139.50 77.50 Sub-total, Shashmmunellt) 10959.84 1064.94 2299.14 1422.92 100 9723.70 68 429.69 1575.52 4010.42 4296.98 2579.13 1432.29 Taxes and Duties 1902.16 10.22 332.48 2424.86 0.00 0 72.75 264.73 670.96 727.46 436.47 242.4 Sub-total (incl.l.1 0.3 12961.00 1255.16 2431.62 16747.79 9723.78 50 502.43 1842.26 4689.39 5024.33 3014.40 1474.79 Winor Rehabilitation Morks Ambo All Marks 59.01 5.90 12.69 76.50 95 63.77 93 2.29 6-41 21.42 22.95 13.77 7.U5 Engineering and Constr. Spn. 3.48 0.17 0.70 4.36 5 3.09 71 0.13 0.48 1.22 1.31 0.79 0.44 Sub-total, Ambo (Not) 61.4 5.97 13.39 80.96 100 66.96 63 2.43 8.89 22.64 24.26 14.55 9.09 Taxes and Duties 11.65 1.14 2.04 14.95 0.00 0 0.45 1.63 4.16 4.45 2.67 1.48 Sub-total (incl.T.6 D.) 73.14 7.14 15.43 95.71 64.86 70 2.97 10.53 26.90 28.71 17.23 9.57 Baba/Robe All Morks 53.33 5.33 11.51 70.17 95 54.46 78 2.11 7.72 19.65 21.05 12.63 7.02 Engineering and Constr. Spn. 3.20 0.16 0.65 4.01 5 2.94 71 0.12 0.44 1.12 1.20 0.72 0.40 Sub-total, BabaRobe tNet) 56.53 5.49 12.15 74.18 100 57.50 79 2.23 8.16 20.77 22.25 13M4% 7.42 Taxes and Duties 9.98 1.00 1.75 12.73 0.00 0 0.38 1.40 3.56 3.92 2.29 1.27 Sub-total lincl.T.1 D.) 66.52 6.49 13.90 86.91 57.50 46 2.61 9.56 24.33 26.07 15.64 0.69 Mizan Teferi All oarks 171.19 17.12 32.16 220.47 94 55.95 25 6.61 24.25 61.73 66.14 39.69 22.05 Enginering and Constr. Spa. 10.27 0.51 2.08 12.96 6 9.11 71 0.39 1.41 3.60 3.8t 2.32 1.29 Sub-total ,izan Ttfarithlt) 191.47 17.63 34.24 233.34 100 65.07 28 7.00 25.67 65.33 70.00 42.00 23.33 Taun and Duaties 10.22 1.02 1.79 13.03 0.00 0 0.39 1.43 3.65 3.91 2.34 1.30 Sub-total tincl.T.t 0.t 191.66 19.65 36.02 244.36 65.07 26 7.39 27.10 68.98 73.91 44.33 24.64 mollisso ll lMarks 131.74 13.17 28.79 173.70 95 144.27 83 5.21 19.11 48.64 52.11 31.27 17.37 Enginering and Coiistr. Spa. 7,90 0.40 1.60 9.90 5 7.01 71 0.30 1.09 2.77 2.97 1.79 0.99 Sub-total Melisso Illet) 139.64 13.57 30.39 193.60 100 151.29 92 5.51 20.20 51.41 55.08 33.0S 19.34 Taxes ad Duties 26.35 2.64 4.61 33.59 0.00 0 1.01 3.70 9.41 10.08 6.05 3.36 Sob-total lincl.T.6 D.) 165.99 1.20 35.00 217.19 151.29 70 6.52 23.89 60.91 65.16 39.09 21.72 Total (Net of Tames and Duties) 21916.49 29W.96 6041.8 376.33 100 25030.92 66 1133.05 4154.52 10575.13 11330.50 64 .30 3774.93 Total Taxes ad liti.s 4430.04 443.00 809.29 5902.34 0.00 0 177.07 649.26 1452.65 1770.70 1062.42 590.23 Tota lieK. Tate nd Dties) 33546.54 .3272.9 6951.17 43670.47 25038.92 57 1310.12 4903.77 12227.79 13101.20 7860.72 4367.07 - 129 - A?NNEX 8 Page 13 of 14 NMKI TMI 33WLIf PROJECT Table 13i Detailed Cost Estiimtmn for Moo;ing by Yeur (000 DirrO lass Cost Contio99ari o Total forsLpn (oowoneit Unit Cost No. lEnid-89 Pr.) Physnical Price Cost I Cost 1 90/91 91/92 92/93 93/94 94195 95/96 Core 4.71 20.0 94.12 9.410 1.94 121.47 1 37.07 31 3.64 0 3.36 34.01 36.44 21.96 !2.15 Core,0 fool 5.88 30.0 !76.5I 17,65 33.64 227.80 2 69.71 31 6.33 23.06 63.78 68.34 41.00 22.78 :of t2 roo. 14,45 50.0 722.43 72.24 13.4 931.1 6 269.52 29 27.95 102.49 260.N6 219.52 167.71 93..!'F Ccra*3 rool 4.40 0.0 0.00 0.00 0.00 0.04 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.30 Su0-1tatl. Altv (Ott) 993.06 ".3 168.62 1230.99 8 376.40 29 38.43 140.91 351.68 334.330 230.5' 1228,10 Tam~ and Duties 127.46 12.75 22.28 162,49 0.00 0 4.87 17.87 45.50 41.7 29.2! 16.:s. Sub-total Imnl.JA 0.i 11120.522 112.0 210.90 1443.47 376.40 26 43.30 158.78 404.17 433.04 259.83 144.15 CDre 4.61 60,0 276.72 227.67 52.74 357.12 2 109.28 It 10.71 3928 IM.9 107.14 64.28 35.71 fv-,e#t toot 6.09 90.0 548.10 54.81 104.45 707.37 5 216.45 31 21.22 77.81 198.06 212.21 127.33 70.74 Core< r,..A 14.31 15C.0 '2221.65 2222.17 421.45 2RA5.27 19 328.84 29 85.96 315.13 302.27 859.58 515.75 236.53 ,ore+7 roce 0.00 0.0 0.00 0.00 0.00 0.04 0 0.00 0 0.00 0.00 0,40 0.00 0.00 0.00 50-lotla,Assela(flet) 3046.47 304.65 578.64 3929.76 26 1154.17 29 117.39 432.27 1100,33 1173.93 707.36 392.98 Taxes wl DA:es 390.67 29.07 68.2', 493.02 0.00 0 14.94 54.73 139.45 149.41 39.64 49.3 Subt-o!ae1 liIJA).T 0.1 3437.14 343.71 W4.9 4421.78 1154.57 26 132.83 487.06 1239.7'0 128. 33 797.01 442. 73 Core 0.79 ~~~~2e.0 95.72, 9.57 18.24 123.54 1 37.30 31 3.1 1,9 3.9 3.6 22.274 12.35 C6re+l room 6.26 3~0.0 187.67 18.77 35.76 242.20 2 74.11 II 7.27 26.64 67.81 72.66 41.6( 24722 Eore+2 rors 17.40 50.0 370.00 87.00 165.04 1122.04 7 324.57 29 33.66 123.42 314.17 336.61 204.97 112.20 E~re+: rood C.00 0.0 C 0.00 00 0.00 0.00 0 0.00 0 0.00 0.00 3.00 0.00i 0.06 M,0 Sub-total, Cob& (Not) 1153.39 115.34 219.0 V.1487.77 10 436.49 29 44.63 163.66 416.58 446.33 2b67.90 148.78 Taxes aid Dutie3 146.03 14.60 25.52 186.15 0.00 0 5.58 2'0. 43 52.122 55.35 33.51 18.62 Siub-total !nciJA. 0,) 1299.42 129.94 244.57 1673.93 436.49 26 50.22 184.13 368.70 502.13 301.311 167.39 poke Cote 4.79 2D.0 95.72 9.57 18.24 123.54 1 37.80 31 3.71 13.59 34.59 37.06 22.24 12.35 Co,e+1 'ooa 6.26 30.0 187.67 18.17 35.16 242.20 2 74.11 31 7.27 26.64 67.81 72.66 43.60 24.22 Corp-t2 too-e 17.40 50.0 870.00 37.00 165.04 1122.04 7 324.57 29 33.66 123.42 314.17 336.61 201.97 112.20 torwy3 tooA 0.00 0.0 0.00 0.00 0.00 0.00 0 4.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Sub-total: Robe COit) 1153.39 115.34 219.05 1487.77 10 436.49 29 44.63 163.66 416.53 446.33 267.80 148.73 Taves anid Duties 146.03 14.60 25.52 186.15 0.00 0 5.58 20.43 52.12 55.85 33.51 10.62 Sub-total lIMCl.J.0 D.) 1299.42 129.94 244.57 1673.93 436.49 26 50.22 184.13 468.70 502.19 301.31 167.39 Core 4.94 16.0 79.00 7.90 05.06 101.96 1 31.20 31 3.06 10.22 28.55 30.59 18.35 10.20 Core40 toom 6.32 24.0 163.79 16.38 31.21 211.37 1 64.63 3I 6.34 23.25 59.18 63.41 33.05 21.14 Core42 tood 19.1k6 40.0 770.39 77.04 146.14 993.57 7 287.41 29 29.83 009.29 273.20 298.07 173.84 99,36 Cort+3 toot 0.00 0.0 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0100 Stib-total.Wjzan 1.lIetl 1013.17 101.32 .92.41 1306.90 9 383.29 29 39.21 143.76 365.93 392.07 235.24 130.69 Taxes andi Outies 127.87 12.79 22.35 163.01 4.0 0 4.89 17.93 45.64 48.94 29.34 16.30 Sub-total ljifit.T.1 P.) 1141.05 114.10 214.16 1469.92 383.9 2 44.10 161.69 411.58 440.97 264.58 246,9 Shashemane Core 4,68 40.0 187.23 13.72 35.68 241.63 2 73.94 31 7.25 76.58 67,66 72.49 V4.49 24.16 Core1 faot 6.17 60.0 370.11 37,01 74,5 477.65 3 146.16 31 14.33 52.54 133.74 143.29 83.98 47.76 Core42 t-oo. 05.49 100.0 1546.78 154.38 293.30 t197.46 13 577.01 29 59.9 209.72 559.29 599.24 359.54 199,75 Core,+3 tOol 0.00 0.0 0,00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0,00 Sub-tot4l,ShasheringI0ot1 2106.11 210.61 400.02 2716.74 to 797.91 29 31.50 2.98.4 760.69 315.02 489.01 271.67 Taots and Duties 269.24 26.92 47.06 343.21 0.0* 0 30.30 37.75 96,10 142.97 61.78 34.32 Sub-total lincIJA 0. .) 2375.35 237.54 447.08 3059,97 797.'l1 26 91,80 334.60 35679 917.99 550.79 306.00 Cor, 5.08 40.0 203.36 20.34 38.76 262.45 2 30.31 31 7.7 28.87 73.49 78.74 47.24 26.25 Corv.1 race 6.35 60.0 380.92 38.08 72.57 491,47 3 150.39 30 14,74 54.06 130,61 147.44 98.47 49.15 Core*2 roD, 06.43 140.0 1642.54 144.25 311.59 2118.39 14 612.79 29 63.55 233.02 593.15 635.52 331.1 211.34 Cord-3 roos 0,00 0.0 0.00 0.40 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 Suh-tatal'VoIOioo.oliet) 2226,72 222.67 422.92 2872.32 19 843.49 29 36.17 315.95 804.25 361.70 517.02 287.23 Taxes and Duties 284.33 28.43 49.70 362.46 0,00 0 10.87 39.07 101,49 008.74 65.24 36.25 Sub-total (incl.T.1 P.1 2510.05 251.11 472.62 3234.73 843.49 26 97.04 355.3 905.74 970.43 58.26 323.48 Total hNot ofi Taxes and Duties) 01692.31 1106.23 2220.70 15092.25 100 4428.64 29 452.47 1659.05 4223.03 4524.68 2714.51 0508.23 Total Taxe. and Iutio, 1491.63 149.16 26o.72 0902.52 0.00 0 57.05 209.07 532.42 570.45 342.27 190.05 Total hodc. Inxes amd Ratio,) 13183.94 1318.39 2481.43 16933.77 4428.64 26 509.51 1848.21 4755.45 5095.13 3057.03 0469938 - 130 - ANNEX 8 Page 14 of 14 ETNIIWIA WARKET TWtlS DEYJELOPIENT PRJECT Table 14: Detailed Cost Estisitis for Institatioual Support by Coepoot and Year l(000 lirrl lise Cost Contianacies total Foreiqp Component lEnd-SS Pr.) PFysical Prici Cost I Cost I 90S91 91/92 92193 93194 94/93 95/96 HU0H Housing Sector Studv 420.19 21.01 76.30 317.50 5 415.00 s0 15.53 56.93 344.90 155.25 93.15 51.75 Feasib:litv Studies 1680I.0 94.04 303.16 2070.00 21 164.00 S0 6Z.IO 227.70 579.60 62I.O0 372.bO 207.00 Firancial Ki9naqesent Unit Advusorv Services 302.39 15.12 35.09 372.60 4 310.50 83 11.18 40.9S 104.33 111.76 67.07 37.26 Tra.inng 42.05 2.10 7.60 51.75 1 39.33 76 1.55 3.69 14.49 15.53 9.32 5.15 Vehicles and Equipwt 71.S1 7.20 13.97 93.15 1 93.t5 100 2.79 10.25 26.01 27.95 16.77 9.32 Sub-total 416.42 24.42 76.66 317.30 5 442.91 84 15.53 56.93 144.90 153.25 93.15 51.75 Support for UDPO VeOicIes and Equipment 1087.69 108.77 211.14 1407.60 14 1407.60 100 42.23 134.84 394.13 422.29 253.37 140.16 Salaries/Training 3603.92 180.20 604.29 430,40 44 200.00 5 131.65 402,72 1221.75 1316.52 739.91 438.84 Sub-total 4691.61 288.96 815.43 5796.00 58 1607.60 29 173.9B 637.56 1622.88 1739.30 1043.28 579.60 Sup'nrt for NUPI Iraining 468.00 23.40 94.26 575,67 6 413.79 72 17.27 63.32 161.19 172.70 103.62 57.57 Priiting anc 0f44ce Equipmnt 115.01 11.50 22.32 148.83 1 148.83 100 4.46 16.37 41.67 44.63 26.79 14.88 Sub-total 593.01 34.90 106.59 724.50 7 562.63 78 21.74 7t.70 202.86 217.35 130.41 72.45 Project MuanFenent Unit Salaries/Traininq 262.28 13.11 45.46 320.0S 3 113.95 35 9.63 35.2S9 9.84 96.25 57.75 3.09 Wisc. Equipment 71.98 7.20 13.97 93.15 1 93.15 100 2.79 10.23 24.09 27.95 16.77 9.32 Sub-total 334.26 20.31 59.43 414.00 4 207.00 50 12.42 45.34 115.92 124.20 74.52 41.40 Sub-total ,IUDH (Net) 9126.27 473.65 1439.5 10039.50 100 4991.21 49 301.19 1104.34 2811.06 3011.85 1807.1: 1003.95 Taxes and Duties 269.33 26.93 47.08 343.34 0.00 0 10.30 37.77 4.14 103.00 61.30 34.33 Sub-total lincl,T.I 0.) 0395.60 500.58 1486.66 10382.94 4891.21 47 311.49 1142.11 2907.20 3114.85 1869.91 0303.25 8q556 Training and 6dr 5ervices 974.01 43.70 158.69 1074.40 07 061.12 80 32.29 110.40 301.39 322.92 193.75 107.64 Vehicles and Equipagnt 127.96 12.80 24.84 165.60 13 165.60 100 4.97 19.22 46.37 49.S8 24.91 16.56 Sub-total llSSA tiet) 1001.98 6.50 183.33 -1242.00 100 1026.72 83 37.26 136.62 347.76 37^'.0 223.56 124.20 Taxes and Duties 25.59 2.56 4.47 32.63 0.00 0 0.98 3.59 9.14 '. ;9 5.07 3.26 Sub-total (incl.T.l 0.) 1027.57 59.06 198.00 1274.63 1026.72 38.24 140.21 356.90 382. n 229.43 127.46 158 Consultancy and Advisory Serv. 134.46 6.72 24.41 163.60 10 132.49 80 4.97 38.22 46.37 49.68 29.91 16.56 Training 201.70 10.08 34.62 248.40 13 190.72 80 7.45 27.32 69.55 74.52 44.71 24.94 Vehicles and Wisc. Equipat. 639.82 63.90 124.20 928.00 50 820.00 100 24.94 91.08 231.94 248.40 149.04 02.80 Housing Finance Study 336.14 16.91 61.03 414.00 25 331.20 90 12.42 43.34 113.92 124.20 74.32 41.40 Sub-total ,IS (Noet) 1312.14 97.60 246.27 1656.00 100 1490.40 90 49.69 192.16 463.68 496.90 290.08 165.60 Taxes and Duties 127.96 12.80 22.37 163.13 0.00 0 4.89 17.94 45.68 48.94 29.36 16.31 Sub-total (incl.T.& D,) 1440.10 110.39 268.63 1819.13 1490.40 92 54.37 200.10 509.36 545.74 327.44 181.91 Consultancy and Advisory Serv. 47.06 2.35 8.54 37.Y6 9 4.37 80 1.74 6.38 16.23 17,39 10.43 5.80 Training 164.72 0.24 29.91 202.86 33 142.29 80 6.09 22.31 546.0 60,86 34.51 20.29 Vehicles and Risc. Equipet. 278.32 27.93 54.03 360.18 s8 360.18 100 10.81 39.62 100.95 108.05 64.83 36.02 Sub-total ,AIDI (iet) 490.10 30.42 92.48 621.00 100 568.94 92 10.63 68.31 333.98 186.30 111.78 U2.10 Taxes end Duties 55.66 5.57 9.73 10.96 0.00 0 2.13 7.81 19.87 21.29 12.77 7.10 Sub-total lintl.T., D.l 345.77 43.99 102.21 691.96 534.94 82 20.76 76.12 193.75 207.S9 124.55 69.20 H4SIDA Training and Advisory Berw. 006.89 40.34 146.37 993.60 69 786.60 . 79 29.81 109.30 279.21 298.C8 178.85 99.36 Vehicles and Misc, Equipet. 351.90 35.19 68.31 435.40 31 455.40 100 13.64 50.09 127.51 136.62 91.97 43.54 Sub-total,HASIDA (Net) 1158.78 73.53 214.68 1449.00 100 1242.00 36 43.47 159.39 405.72 434.70 260.82 144.0 Taxes and Duties 70,38 7.04 12.30 89.72 0.00 0 2.69 9.97 25.12 26.92 16.15 8.97 Sub-total Ulncl,T.& 0.) 1229.16 - 82.57 226.99 1538.72 1242.00 81 4.16 149.26 430.84 461.62 276,97 153.97 Total (Mt of Taies and Duties) 12009.27 741.70 2176.53 15007.30 100 9219.16 61 450.23 1650.83 4202.10 4502.25 2701.35 1500.73 Total Taxes and Duties 548.93 54.89 95.95 699.77 0.00 0 20.99 76.98 195.94 209.93 125.96 69,90 Total llnel. Taxes and Dtlesl 1238.20 796.59 2272.49 15707.27 9219.16 59 471.22 1727.80 4399.04 4712.18 2827.31 1570.73 - 131 - ANNEX 9 £THIOPIA MARKET TONUS DEVELOPFENT PROJECT PROJECT IMPLEhENTATION SCHEDULE I/ PROJECT C3MP0NENT I Activity 1 1990/91 . 1991192 1 1992/93 1993194 ' 4 194S 1?91/9 CN-SITE INFRASTRUCTURE Org. Arrangements Xxxxxx I Frocurement xxxxxxxxx ' I Iepleuentation xxxxxxxxxxxxxxxxxxxxxxxxxxxxx ..... ...... - - - - - ---- - ------ - -------.--- ---- - --------- ----------- HOlSING DEVELOPMENT Org. Arrangemints ixxgxxxs Procuresent .xxxxXSxx!XXX ' '...: Implementatton xxx:xxx xxxs x xIxxxxxxxxxx;tXXXXX .............. I ______________ __, __-- - ---| - , , , ,~I- ----- ---- MUNICIPAL INFRASTRUCTURE I Org. Arrangements Ixxxxxx Pracuresent I xxxxxxxxx .xx. .. Iaplementation xxx xxxxxxxxxxKxxxxxxxxxx.x..I... .... ... .I........... I I ~ ~ ~ ~~~~ I -~~~~- - ----- - ------ WATER SUPPLY Org. Ar angesents :xxxxxx 1 Procurement xxxxxxxxl xxxxxx Ilplesentition XXx2 XXXXzXXXXX XX KXX IXXXXX XXX,XXXXXX....... I I ~~~~~~- ----- - ------ -------------- EMPLOYMENT SUPPORT 1 Org. Arrangeeents Ixxxxxx I a !Ipleuentation X xxxxxxxxgixxxxxxzxxxxlxxxxxxxxxxxxlxxxxxxxxxxxIcxxxxr ...... ......, - - - - - -------… __ - _ - NOTE: xxxxx According to Consultants plan Bank's extended implementation period 11 The project costs were calculated in accordance with the Eank's average disbursement profile for Ethiopia (6 years iaplementation and I year uaintenance period). If the Project would be implemented according to the actual physical plan, about 6% cost saving could be expected. - 132 - ANNEX 10 ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Estimated Schedule of IDA Disbursements (US$ million) Bank FY and Disbursed Cumulative Disbursements Quarter ending in Quarter Amount , of Total 1991 September 30, 1990 0.40 0.40 1.0 December 31, 1990 0.30 0.70 1.7 March 31, 1991 0.30 1.00 2.5 June 30, 1991 0.20 1.20 3.0 1992 September 30, 1991 0.60 1.80 4.5 December 31, 1991 0.90 2.70 6.7 March 31, 1992 1.20 3.90 9.7 June 30, 1992 1.70 5.60 13.9 1993 September 30, 1992 2.00 7.60 18.9 December 31, 1992 2.50 10.10 25.1 March 31, 1993 3.00 13.10 32.6 June 30, 1993 3.70 16.80 41.8 1994 September 30, 1993 4.0 20.80 51.7 December 31, 1993 3.50 24.30 60.4 March 31, 1994 2.50 26.80 66.7 June 30, 1994 2.00 28.80 71.6 1995 September 30, 1994 2.00 30.80 76.6 December 31, 1994 1.80 32.60 81.1 Match 31, 1995 1.70 34.30 85.3 June 30, 1995 1.70 36.00 89.6 1996 September 30, 1995 1.20 37.20 92.5 December 31, 1995 0.90 38.10 94.8 March 31, 1996 0.80 38.90 96.8 June 30, 1996 0.70 39.60 98.5 1997 September 30, 1996 0.20 39.80 99.0 December 31, 1996 0.20 40.00 99.5 March 31, 1997 0.10 40.10 99.8 June 30, 1997 0.10 40.20 100.0 Credit Closing Dates June 30. 1997 - 133 - ANNEX 11 Page 1 of 10 ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Municipal Financial Analysis Municipal Revenue Per Head In Proiect Towns (Based on Recurrent Income in 1987/1988) Recurrent Recurrent Income Income Per Town (Birr '000) Population Head (Birr) Ambo 227 19,470 11.66 Arsi Negele 233 23,140 10.07 Assela 944 39,100 24.14 Goba 694 27,820 24.95 Robe 308 21,450 14.35 Mizan Teferi 301 7,370 40.84 Shashemane 1,082 40,100 26.97 Wollisso 738 19,290 38.26 Zivay 205 6,990 29.33 OTAKLE ler'000. * 51,1W OF .JXTI3I * hned coo lloelk p.rf_e re * ENatine rte, of tea a charge * Idea linked c_relml r t * Deoriptlan I 1961/5 JIM/ua 1968/4 964/8 166 1 6 1997/16 116/0SO1 /0 1900/91 1991/12 19/93 19931r4 1914/96 1996/6 1991/97 1"7/1- *I C * fD L Us_r I< ------ ---- ----Ael - r t -----_------------------------ - DICE I * Trade ficene in. pete 74 52 117 1in 160 16 14? 154 1 216 24 27 291 m sn Sp7 64 * praprt1boxes 46 46 lot U a U a et 12? 167 211 221 12 244 266 269. * e_ci nl so " 4 ? 9 4 O 10 27 2 6 so 61 6a G6 a 71 74 7T7 * Trdine ccint 0 0 0 O O 4 an 427 4" 810 "T 0 a" 73 9 6a0 f l1 Se-vice Es an othor I 21* 16l 0 19 260 872 we ml1 471 62 SW 57 01 Sm m ?I4 71*f * Di recrecove,rh4mmen 0 0 0 a 0 0 82 22 * 2 . * otha~~~ ~~ 0 0 0 0 0 0 0 0 0 0. * Water dhre 0 0 a 0 0 0 a * TOTAL Mini DI 841 ne 400 467 496 a 5 9"4 14 17 1441 1 tin lUS 19.4 2119 22.4 2_ i w e rg OWE TUIW I C * pernel 101 * 7 90 110 2 144 1 10 197 315 2 2 Sol WY0? an 7 401 * * bintmnc 7 7 a 0o 51 a as as 75 at to 111 1t 140 us 175 11. ther 212 46 16 30 188 210 to 180 197 215 2l5 237 261 307 6 a" 401 - Trdimgaccomate 0 0 0 0 t1 7 171 19 207 Z 0 247 270 29 6 n * a 21- * Projet "rating & gains. 0 0 O 8 47 49 81 6 S7. a oebt mrvice-roject I 0 0 0 0 0 1 8 I 90 to * Debt serv -.eitling 0 a 7 19 91 14 1n 20 20 20 20 20 20 20 20 20 20. * TOTAL I T Ee | *20 1a 2Sl 422 410 a6 667 as 8" 785 we 9U 106 l 152 1203 1480 a *CQrrnt eccount aurrIl. 21 157 154 6 a 8 277 414 an77 *77 707 m 712 O2 66 79 94. CAITAL D. N I E a Caital recept, 4 4 11 * *8 * * La" 9 7S 20 4 1 1i 140 0 91 0 43 n1 403 431 29 144 0 0* * Contributio --rrent a/cl 0 0 1" 292 0 176 1i 268 364 403 45 a" 62 87 5n21 49 a1 *O TOTAL CAPTAL 6196 79 206 187 80 438 319 1U 7S7 S6 448 $13 949 1004 796 66U 496 517? eCAPITAL EXgelIL . * * nimi;PelIIy Chem. 1 30 167 04 407 319 1l4 357 U 64 seo 406 425 440 456 477 46 517 - * Proj;ct oat I 0 0 OO 207 S63 S 8S 1SO 0 0 * TOTAL CATML 8U'B6iIM E I 1 30 187 804 407 51 156 57 564 448 13 949 1004 70s 688 4" 617 - C I .Aork;ng capital. *r,." WWI econting.en t 99 434 369 130 2" 125 249 39? 610 a4 1136 1383 15i5" 1 2223 2522 2116. * I . ***********v**+++*¢*¢ ***e**¢****************e**e*@***"*-**+-+-*-+**+¢-¢¢-v*-*+v*-¢*-*-**--*-b*********-U.^* *TAKE girr 'OJ * Trd lilraeeae.wbe U 84 U 54 so 49 62 54 * 4 e1 14 115 lie US 1 122 I1 a * Pr tle.s 8 S4 So 1s 16 a 43 45 SI a n n 2 a so 20 - * Cmrcielv rete I a 0 0 0 a 10 27 a s a a U so 41 4a 44 * Treine came _ l 0 0 0 0 0 0 0 0 0 0 0 0 0 a 0 0 ° O * service flow eOw fes_ 8s 42 as 44 44 14 US 120 in 1 i 175 its 9W 218 SO 14 * * Dlrw6 romwecr_leml.u 0 0 a 0 0 0 a 5 a ae * -eWLe, 0 0 *1 0 0 a U a rur C u'Weige 1 0 0 0 0 ~~ ~~ ~~~~0 0 0 * TOTAL 111112 S I 100 16 its 114 120 go6 9WB SO 19 6148 I 409 SI? 54 37 SW an. .E r WIISi I LA * Poe I I a 84 43 43 49 go SO 71 7 a so a £0 1it 1:6 MM4 * IbIml^esu. 108 13 14 25 19 5 54 27 Si U 3? 40 44 46 U 5 at * Oher I 9 U 4 *2 64 73 so 93 10u 1U0 11? 17 U0 14" 1le 175 * Tredime scemmt * r"Jt _ ebeg * eit 0 0 0 0 0 S1 so a1 a U * Oebterwi ejue I, 0 0 0 0 0 0 2 6 a a *De ere,wl.-eeletln. 0 0 0 0 0 so go is to to 1* LS 1U 0 0 0 0O * 311 n u.1_ o I a 73 so 18 a la 52 15 MY S 141 191 SW U Ms 460 4 * eCeweet.ceeineteerpline U at at 1 27 Of 46 71 80 Is 14 143 mm4 1W 18i in In * Cital reeipts 4 0 0 1 1 0 a eLAe 8 0 2 6 104 0 0 0 0 U 97 244 O in as 0 OO e B - Cmtrlhuli.m -esmt e 0 54 U 17 0 I 3 1 a *7 V7 U7 1i7 U1 in 1 11U * TS .CWlMAL 7 as 84 U S26 U a 120 U uS m 43 460 n1 IU 110 In .CWITL m. mzn olhe1cipli- Scheme 1 4 54 IS * a i 1 a0 e * I US me 1N ItO 15. * Pr,je, c 0 0 O O U tU a" 315 11 0 0. I tTIAL CAPzAL EeOuOIIL I 1 54 t 4 U a0 S6 3 126 U US 29 43 460 sit 2Z7 110 11 e * I a diorkin cepil. renrve end .eaI.inicpK j 109 7 74r 92 120 113 36 *3 0 109 U0 55 1U 164 15t4 - * I _ *TABLE Sirr 000. * STATUS OF F6S.WTIW * Etaac.d cail lciwn perforac. * Emisting rates of tarn mid dirga * lads.I inkod cosmarcilm seate * Dmcrigtia, 1951/02 1962/US I 145aj4 11S5 0195/96 1956/87 1907/8S lg5S186 1989/60 1990/91 1901102 1992/93 1903/94 1944/95 1995/96 IGg 199697 199?tW F* P CtACIL SUNW I(--- - - Aetual ... )--------- -------------------- F @ r . ca---------------------------- * Trade lkee.euh,c veb.g U0 90 a6 U5 1S U 39 41 55 St of 76 I1 as U 62 W * Prapertgtaxes 0 3 2 S9 U a 24 27 2U 32 as 41 48 44 46 4 30 At2. * Ccmmoelmleate I 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 C a * rit acmt 0 a 0 a 0 0 0 0 6 6 7 6 a 9 to 10 11.& * 84,v Ice tea. NWd G*er 1 47 6 U3 64 76 91 of 102 11e 136 158 160 is? 175 13 1M gol1 a a Di pact rcovery-hmms.nS 0 0 0 0 0 0 a 0 0 0 a * -~~~~~~m mdtie 0 0 0 0 US 39 41 43 44 44 * Water chatrna g 4 U2 40 a 58 -3 TO * 17*. L I IUSSf ICB 311 130 if? 141 149 214 232 170 211 240 269 324 340 385 371 355 406. • P.r.aa..l g 27 19 30 42 40 48 45 so so 42 46 4So U3 a 73* a lbt1mSm.ag. 46 0 4 4 4 1 a 14 7 a a I 10 11 11 12 1Is * OIler I 21 36 7? 43 16 21 19 is 17 1s to 21 23 25 27 29I1 a Tradings.mccta 0 0 0 0 0 0 0 a 0 0 0 0 0 0 0 0 0. * Project recurrent, co" 0 0 0 0 45 39 St 4 66 so. a Debt srvice-project 0 0 0 0 a 1 2 7 To 73. * Debt..rwlce-exietlis 0 0 1 0 2 0 0 0 0 0 0 0 0 0 0 0 0. • TOTAL 01MRITEi 9W g 9 56 112 so 32 67 TO of la USo 73 124 145 157 172 244 No0 eCarreat mccomit mrp lame 29 76 as 12 6a 147 162 1mg 146 172 196 900 195 199 199 142 148. .CAPtTT4L DV EI * Crngit-aIrneeptA 0 0 2 I I 0 1 *,e * S.M 0 0 a 0 a 0 0 a 0 34 123 314 836 202 112 a 0.o * cmntribatn --current, *Il 1s 5 0 15 24 U 7o 116 104 97 103 172 1in in 109 73 76.0 * TOTAL CAM TL DICm is1 5 2 to U 6 To7 1I6 104 181 226 439 819 340 221 73 76. 0 * Project cot I0 0 45 167 424 455 273 152 0 0.0 * T07*1. CWITAL eeurrOIE is 5 1 14 2U Of 79 l13 104 181 223 439 s1t 840 921 78 74.o orIgcapitat* eor...oe m.di oemtk,gnscp it1 62 1us 175 235 319 22 t11 255 83 4231 481 448 524 614 6ON 75 *tFJt£ *;* 0t Enane _z Dliecin petoesc raistio ro"f ta md chf-g * no inked comrcial r"to * O eriti ~~~~~~9 19t8l2 liW li0ti 1"4/ 19i/$l l9^7 lff7/i 1tn/ lI9" 19W19 l911/9 I12 1930 t90/95 I95911 li01117 1"?/ - * FDVC AL SUO -e -l9 ------_____ _ <______________--F - -------------------------------- ---- - --------- - Ntera DaK I *Tee licem irc ge I " 1WY 0 101 1U4 112 lIe 1 Win 149 SI 162 171 iS 1" 201 0 rpr* took 42 74 K 2 so at 93 so too 12 u 137 " 12 tot Ulo I" ! *Cvmwe_re; rent 10 2i ti2 is lJ 22 7ti 77 so Si ii? 0 4 go 102 too 110 0 *T"iw _age 1 12 0 a a a 111 In tu 14i U2 17ti I" 216 239 2S9 "6 J2 * sevc fee WW. ote as 10 2 ini too W "ZlO 2 296 314 aN *a 4112 52 6U 679 k lis a" M *Dirc _e mia 0_t O O O 0 14 U4 14 U a Wae chre 0 o o 0 a2 06 t 0 ti O tBrAL T113WI 1CN 24t sso? 4W ani * " du " ¢2 Sao 1 10Q2 11rD 12^ 133tiut 14= M 1Ut2*_ * lIti o"tiOt 1011 l 107 u2 131 146 1oo Usr 1s 212 2Xti 2'i ti tiOt * I lb "mn_ce to 40 asi so ti a* Be #i so il 6 t2 ro so 10co- 0* 90 | iOn 179 It t 2a 6t b Jl 3r217/1 m Ws *tir 46u 49 Sit rb m 2 *Proejct r*emin A Mint. I o O o o7 so 6r ti 2 tit tT a Detsrvcrec 0 a.C 0 0 0 1 a 0 72 rs 0 *Debt _rvies^^"tin 0 O a 0 2ff Zi O so tio O O O o O 0 O O 0 TOA Tasimif Wm1 in at id Wso a2T 6U 4n 750 ti21 5N; ec Ul1 rni no "01 IQi l tin UO0i 0 *c..Jf,wt bcornt *Uttl | f -ti lat a -177 lNi -6ff 220 20i 0 tis Co nt mm 3 2z!2 IOi* *CAPIAL iDCOEI* i *Copitl receipt to 10 a 2 a a o 2ei. LO in 0 o 0 o 225 o 2til 0 0 is 12f 325i 3u 20ti MI O O * C*nt.ributio --cu * nt *} 1 0 o S ti7 a a O U72 ISO 217 76 1 6 mi 364 359 3ii S7 - *TerALCAr:TAL DOE si S10 se SS U 22e t4 S07 1r2 1111 252 206 U ti 732 672 rti ti40 m * *CAITL SEGOOMME I * ifnicipelli acee 32 3 15 too 43too 17 no0 U20 n tii7 270 "as 321 34s mf 0 *Pro; et est 0 0 4ti u 4til 462 27 IS4 a 0 6 *TOTM. C^PTAL WBetTUle 52 38 too0 43 U4 tOo 172 31S Sl 06 4" 732 5n2 475 340 37 - ~kind capital. trorve *ndl *erJnt;ne ncy aI 306 3Dt 9t 294 302 440 631 6dO a i lO tOS5 1340 1349 1390 1424 Iti97 1320 *~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~o. . ... . ...4 .. . I ..... *TAK.E pis r 000. * bhamcd tel leettIn p.rf4rmebC EmhieOIm rates of tern sod charge * tosday linked emsrglml Onoe * 0.cripbiem I 15/S 191/6 LOW"/6 164/66 Saw/6 l96w/6? 147/6 IUB/5 '"66,MO 1990/91 1001/111 1041/6 193/9 194/96 l966/66 196/67 1007/6 * Traed liegae low 551165 49 83 so so a6 go a6 6 97 106 II$ 16 in3 140 140 18 e * Piperty teame s1 44 o,5 36 26 #9 4 56 a6 a4 5 so a U To 74 S e Comercial .t. a 56 1 go is 11 46 36 67 56 40 41 43 45 47 4f Ss . * Tradingmgeas.mbs 0 0 0 0 0 0 a 0 0 0 0 0 0 0 0 0 0.0 • Sernice#.fewsd mber 16 so 67 so 46 at N as 100 117 1in 14 143 1in 1" 178 166. e Di rbreethmwe- I.so 0 0 0 0 0 0 la 10 12 12.0 e ~~~~~~-eteW 0 a 0 a 0 0 0 0 0 0 0a e Ioe 'dieii. so9 U 36 41 46 1s 0 * e 70111110111111101T I 007 2n Un 213 U2 III U 910 96:1 a01 5d. 47Y 572 406 54 44 461 a inarm EuF=sr1m g 00 • Pe.mel 45 43 4 46 56 34 Si 47 la 38 187 16 901 261 go3 267 263. e ibletgemaee I 41 7 7 14- a 40 91 37 Si so 3 85 so as De 41*o c Other ad6 42 I00 44 66 6 56 56 5 40 43 46 a6 a6 a SO 76 e e TrmdadI96.m.mt. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.o * Project up.r11196 A mimA.1 0 0 0 0 0 96 U 40 *e • Dgbb seri$6-proewst 0 0 0 0 0 0 1 4 41 *e a f D.6..vic-eawtvimo a 0 0 0 a 0 0 0 0 0 0 * 0 0 0 0 Oea TO1TANM. Oia r M 26 irn ii 100 18n so in0 106 156 U 946 68 S0 au3 6 466 466 :ca,ret eccasat gsuplus I 06 8 74 lie 6 6s in6 1414 106 76 66 64as 43 -9 -18 .CApTYAL D6m IV C e Capital seceipte 4 7 7 a I I 0 6 * Lame I 0 0 0 0 0 a 0 0 90 79 13 196 11e 6a 0 0. e Contribution --current u/el 20 75 57 140 56 20 121 so 6 57 a6 69 36 90 0 a 0 * T0TAL CAPrTAL 66CE 217 02 14 46 87 21 1in as 114 26 94 250 255 1I" U 0 0a'1 sCAPITAI. 001WYP I - * Wihf4tpality dWsces 2 17 U 2 143 57 21 in6 a 114 0 a 0 0 0 0 0 0. * Peoje.t cost 50 0 26 94 236 288 153 63 0 Oc e TOrML CAPITAL DfeonTIE 217 62 U4 143 57 21 129 as 114 26 94 236 238 153 Is 0 0 Uss.gcapital. eserv*o andI *tefltiPgUc, I 124 142 159 1in 161 20S 242 967 806 379 439 464 440 476 601 499 485 *............... I........... ..... ............ ...... ...... ..................... ........ .TAa.a Si~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~rr '000. .OZ4TAIM OFCJE &* bAMcd col lection porfoimeace * bieting ratme, of teas * tkedwrg W as. linked cmmercieI rents * 0wripti@o 1961/32 19602/313 19631/04 1934/38 165 19 66 L$/*? 1087/62 19811/89 1969/90 1990/91. 1491,'92 1992/93 IM9/94 10164/95 19915/641 w/ 19917 07/911 . * FIJIJIIAL SLJ9U*V -----ACk I -------------- -------------------------- Foecat ----------------- - ---------- * -ad. licence ;nc pnrbags 43 41 37 42 60 70 20 64 74 66 44 104 I11 117 124 182 140. *propety ts.60 23 2 is 4 18 32 22 23 2? DI 36 as 41 42 48 46 31. *Cm.eleal reate, 5 1 0 0 0 0 0 0 0 a 0. T rading accounts 0 203 209 0D 0 1,4 16 107 10 201 239 26 no at 34 * Irylce to" eNd ether I 75 62 9 1in 230 234 Z 264 249 260 1.3 36 4 89 423 459 Di rOC6 recemery-hool as ~~~~~0 0 0 0 0 0 10 10 to0 t 10. * ethe~~~~~-wr 50 0 0 0 0 0 0 a 0 0.t wat.evtr geeo a 0 0 0 It 1 $- *TUTM. om6l' 36= I in 1la 182 134 275 84u 31011 an m 448 479 514 3an 604 6419 on6 ' P* p.,..mI is 26 2 84 42 44 47 62 U1 62 1 100 ill 1in 18n 149 164.0 * bioetenmne I 17 4 10 23 a 2 10 11 14 17 20 2U 27 32 36 42 4?eo * th., 21 S 45 43 34 US 9. 1u6 116 73 so 61 136 ill M 135 149.& *T,Mad,g cmn. I 0 0 26 26 0 0 0 0 0 0 0 0 0 0 0 0 0.0 * pejectom.tlnIA mint 0 0 0 0 0 a *0 21 22 U 046t ""Ic"rojwk a~~ ~~~~~~~ 0 0 0 0 0 1 a s0 31 * 34 sevice-existing 0 0 0 0 0 0 a 0 0 0 0 0 0 a 0 0 0. To1mM m6Ta Im a2 5o 110 in5 64 in6 151 16 J." 174 1in 25 2" a6 so8 a" 4g4 eCen eat ocenent surpluse 00 &I 42 41 191 207 no0 1in 1U7 211 263 254 27 277 26 272 213 S.P1ThL 36036 I a Ca p%tsIncl a 0 0 0 0 0 0 a Lena 3 ~~ ~~ ~~ ~~ ~ ~~2 1 0 4 a 0 a 0 0 14 U11 183 143 @7 43 0 0. j *Contrltution --currant alel 4 7 11 so 79 17 31 se 96 12 143 I36 202 19n 192 139 234.a *TU1A..C*flTAL.1ICSE 6 a 11 64 79 77 31 go I"13 16 321 347 260 241 1I" 234.o s,GA1hL 3863M 36 * tmnicigeIiI,.clwwer 3 a 11 6 77 31 g6o 9 114 125 in 146 161 174 184, 34. *Proeis" cast I0 a 23 73 1in 19 119 a 0 0. *TOT*ALCAPITAL8 O8I1 I 6 a ii 64 79O 31 06 9 134 196 321 347 260 24i 169 204. I~ngl cpitet, reeervee usdl .coatinawcg I 56 136 139 123 212 362 481 541 62" 721 n20 06 qao 106.3 1156 1241 1320. *.. .............I........................ ................................................ . - 140 - AMNEX 11 Page B of 10 I ~~~ * * 0 S S 0 0 - X *0 0 0 0 0 0 0 0 00 - 0 0 0 0 0 0 0 0 6 0 0 . f~~~~~~ 3i 55g~ ^ 2:§aw | ||.ct ~~~!2 8 K 5 o 6 *~~~~~ l£; |¢° l *~~~~~~ a aq.. .|Et i!fi i I ~ ~~~ 3 Ia a " 3R |!i E! 31Y| 3 0* ~ ~~~~~~ n I *~~~~~ S - ;- eTAM.E. Di rr '000. * TAYlR OF F.DJW2M ErbaanWcd lIIctIim p.rforncge Existing6 ratin of6. fme w ecar.o Inldex fhinflid coai.r6al. Pnt., * oweripUion I 1061/82 19tJjU 196064 IN106/ 1265/6 l968/6 16/a 1951/6I0g$ 126910 1220/21 I12192 1902/9 298/94 1904//15 1995/96 10941/07 1997/011 . * 11MMFIEWiCnewJO0a a Ttad. licence inc garbage as 44 40 44 40 52 60 62 88 76 62 66 90 25 100 105 110. * Pro.rty6.rn 9 39 64 81 19 is 86 as 40 45 32 Do 64 ST 70 74 73 82. Chaut tat I 2 A1o in 252 8s6 373 3126 410 480 46" 15 664 692 ?A0 750 730 012.o * Camarcial r.et 0 0 0 0 0 12 0 9 10 14 is to 1o 20 21 22 23. * Trading accounts. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0. 5r. Ie. tam & other ta.s.1 112 1712 lal 1U6 is? 1" 255 250 29 241 357 39 415 457 425 531 572. Oi r rc.cowery-hmusiag I0 0 0 0 0 0 21 21 21 21. * ~~~~~~-cither a 0 0 0 0 Sl6 a6 osn e 100. * Water chary"e 0 0 0 0 0 0 0a I * TOTAL 41mpv DCOM 29 a67 847 49 73 672 738 76 69 1026 1140 122 137 1472 118.0 1632 1719 .9 * F.rmouuI 3 8 44 St 62 74 64 61 at 131 181 126 216 286 256 262 606 337. • hlu,t.nac. 0 a 2 0 18 3 0 87 45 80 50 70 77 81 Is 118 131. * Othe t5 86 75 76 62 106 102 cl* 21 U! 144 1,57 172 1us 205 224 245.e * Trading accounts 5 * Project oporitinghA mint.I 0 0 0 0 0 so 71 74 77 60 Debt6 ..rv)c.-projoct 0 * 0 0 0 1 4 10 90 102.o * 0446tmrvice-existing 0 3 0 47 0 0 0 0 a 0 0 0 0 0 0 0 0. I TOAL 1111MOIE EXmEl 94 28 IN6 194 149 1" 1in 26 206 63" 400 443 648 s02 6on 62 Du6 wCurroot account eurplu s 205 274 210 275 664 460 so5 542 660 m01 730 766 Su W7m So1 610 824 0 oAP1TAL 3MfM lb * Capitl erc.Ipt. 0 0 0 0 0 0 %C9 0.4- . Leone 0 0 0 0 0 0 0 0 0 41 174 448 474 265 inS 0 0. tih * Cmlilbutiw, --current */el 62 30 121 87 277 11? 168 2n0 274 3 476 844 214 65 6on 60 (00 . I- • TOTAL CAPIAL DICE 62 80 11 876 277 117 168 2M0 274 a64 62 7T7 706 940 sib on0 go6C. OCAPrTAL swSIv! A), * inlaicip.Iltg oc.dowa 9 2 80 121 87 277 117 163 20 274 320 416 Los 64 848 GM0 on9 02 • Project mI 0 0 U 2 601 444 an 215 0 0. * TffTAL CAPITAL 6OnBfTU..6 62 30 121 387 277 117 163 200 274 864 652 767 706 940 615 63 .W sworhifle capital. r...rw.. mIdi .cuntebiegacp 3 247 345 242 5420 912 1306 1646 1973 2292 2561 340 3600 3005 4080 4202 4345 * I 6~~~~~~~~~~~~........ OTAL vier '000* * STATUS F tMSJECTlIi * Enanced clklection perforance * Esiting rat. of tem an de.r99 S * LIdes linkd commreria runt, a * erlptiorn 1962/U 191116% 1946/34 1964AW 1N5/as 1964/67 1967/ft 1 / 1939/910 1990/l91i 1 2 12/9 I$"/9 1994/95 1e49e6 19/97 t199/96 . * I * Fi AL W I --- --- - --l >--- - - - _------Frc -------------------------------- --- ------- rnr icm I * Trade lcenc ine mr* I IS 20 27 J 4S 43 46 49 i 70 4 97 11 117 124 i2 140 * * Prop.rtr txO I 2U 10 is 12 1t 45 J 0 82 41 SI a 76 so 94 100 0s 112 * * Comrgcial ,e.t 0 0 0 0 0 a 1 2 a 6 4 4 4 4 4 4 S & * Trsdinag mmt I 0 a 0 0 0 0 a 0 a 0 0 0 0 0 0 0 0. * Srvic* f e gad er I n1 21 87 a aS 2s 12 141 1in 19 224 25Z 273 293 315 33 U4. * Direct recovery-.imlag I 0 0 0 0 0 0 0 0 0 0. * _-oher I 0 0 0 0 0 0 0 0 0 0. W nater crom I 2S 2? S3 84 8o 0 0 e TOTAL RIJVT DC 71 7a 116 162 1O0 213 206 224 26 an2 875 429 47 809 g 543 m1 6 *21 *REDTA BUSWrUE * p el 2 27 30 31 86 48 39 31 8s 47 62 67 74 so 6? 95 10 113. * lhnt"nenace I * 17 19 0 2 0 22 J0 as U U 40 43 4S 43 l2 * * otr is U 3 7 21 12 62 O I 69 77 U 1s 17 12 148 1in 1,4 . * Tradingac nt lt 0 1 0 0 0 0 0 0 0 0 0 0 0 0O * Project areti.n A Win. I 0 0 0 0 27 33 34 U 87 So. * est .r.ic r.je t I a 0 0 0 0 1 2 7 i s * Debt ..rvicq-al atin I 106 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0* * TOtAL M.m rDf I 146)4 in so 76 6 106 32 122 1" 140 in 90 272 29 38a 41* 446 n * I eCurn4et accot wrplue I a 8 6 " 124 110 1ts 99 l 14 177 1 20 212 217 1in 175 CAPlTAN DL 4@ I * Capitel r"eMlp I 0 2 1 0 1 4 j _ * LeAO I 0 0 0 0 0 0 0 0 0 3 16 9 190 106 0 * Contribution --cwrrn,t ajVI 2J 22 2a So 67 IU 4 34 U sO 7T l7 14S 107 62 St . * f * TOTAL CAPIVAL DCOUE t1 22 27 51 67 U1 72 34 U 41 194 48 462 297 1a 81 a * CAITAL EXPOrTLE I C * icipalit.y achems 3 81 22 27 el 67 130 72 n a4 40 42 43 4S 47 49 61 So * Projoct coet 0 0 42 18 31 417 250 U13 0 0 * TOTAL CAPITfAL BWOYl6 at 22 27 51 67 180 72 a4 a 32 194 412 442 297 83 51 Ss . * , I C .Vrhing cgpital, rearv-. adi a conti ngency 82 g5 2 162 216 200 245 260 2 376 474 825 8o 663 322 939 1062 . I a - 143 - ANNEX 12 Pago 1 of 10 ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Water Supply and Sewerage Authority Financial Analysis WSSA INCOME STATEMENTS FOR FY1985/86-1987/88 a/ (Birr '000) -----------------------------------------------------------------__------- 85186 86/87 87/88 …----------------------------------------------------------------__------- Water Sold (1,000 m3) 4,173 5,293 10,243 Average Tariff (Birr/m3) 0.73 0.78 0.83 Revenues Water Sales 3,032 4,113 8,458 Other Income 1,033 1,796 3,338 Total Revenues 4.065 _cog 11.796 Expenditures Salaries and Pensions 1,367 1,841 3,995 Maintenance 131 193 357 Electricity 874 1,667 3,181 Fuel 252 341 694 Chemicals 150 281 248 Materials for Connections 573 810 1,258 Administration 458 630 1,506 Total Expenditures 3.805 5.763 11.239 Operating Income Before HQ Expense 260 146 557 WSSA Headquarters Expense 5,019 3,732 4,079 Operatint Income (Loss) (4,759) (3.586) (3,522) a/ The f',ures represent over 902 of WSSAIs operations. Revenues and expencitures from towns in the Northern Region and a few other smaller towns cannot be accounted for at present due to transport and security problems . - 144 - ANNEX 12 Page 2 of 10 WSSA SOURCES AND APPLICATIONS OF FUNDS STATEMENTS for FY1985186-1987/88 (Birr'O0O) ------------------------------------------------------------------__------ 85/86 86/87 87/88 ---------------------------------------------------------------____------- Sources of Funds Internal Sources (4,759) (3,586) (3,522) Government Contributions: Recurrent Costs 3,946 5,099 5,939 Capital Costs 14,363 8,225 6,579 Loans: Local 5,000 0 0 Foreign 9,847 9,788 6,689 Total Sources 28.397 19,526 15,685 Application of Funds Investments: Urban 12,602 11,801 8,410 Rural 12,473 6,455 5,317 Debt Service: Intare'it 70 516 150 Amortization R80 4,689 569 Change in Working Capital 2,:72 (3,935) 1,239 Total Application of Funds 28.397 19,526 15,685 ---------------------------------------------------------------__--------- - 145 - ANNEX 12 Page 3 of 1.0 ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Water Suopply and Sewerage Authority Financial AnalZais Key AssumPtions Used in Financial Proiections General 1. Income Statements, Cash Flow Statements and Balance Sheets for the two principal towns (i.e., Assela and Shashemane) to be covered under the water supply component of this project were prepared separately. The financial covenants would apply only for these towns. The following assumptions have been made. Income Statements 2. Water tariffs are assumed to be adjusted in each fiscal year such that the water revenues when combined with the meter rents and connection charges would be sufficient to cover operating expenses and debt service or depreciation, whichever Is higher, in each project town individually. Net revenue from connections is about 30% of the gross connection revenue. 3. All operating expenses have been adjusted for the estimated 42 annual local inflation rate over the project period. Salaries and wages a.-e based on prevailing WSSA salary scales and have been adjusted for increases in the number of staff, consistent with the growth in activities in each of the two towns. Energy, fuel, electricity and chemical expenditures have been projected on the basis of operational requirements. Maintenance was estimated to average about 12 of gross fixed assets. Administrative expenses were projected at about 302 of wage costs, based on past experience. Fixed assets were depreciated at a rate of 3.52 per annum on a straight-line bass. Cash Flow Statements and Balance Sheets 4. It has been assumed that Government would provide WSSA with 15X of the total project cost in each year of project implementation in the form of a equity contribution. The remaining 852 of project cost would be covered by the IDA Credit. The proceeds of the Credit will be on-lent to WSSA for a period of 26 years, including a 6-year grace period on repayment of principal when only interest on tho outstanding balance of the loan would be paid, followed by repayment of principal and interest on the outstanding balance over a 20 year period at an interest rate of 1.52. 5. WSSA's existing collection/billings ratio is satisfactory. However, with the expansion in the town systems and increases in charges, it has been assumed that accounts receivable will increase to about two months of sales. Accounts payable have been assumed to be about 102 of consumable operating materials. - 146 - ANNEX 12 Psg6 4 of 10 6. Interest during construction would be expended as incurred. Based on the projections of tariff increases, it has been assumed that in the years following compltlion of this project in 1996, expansions to the systems in the two towns would bo financed from internally generated funds. us tz @ u- ir' sir "I urs WI we irs WI r 9W'I 1U Et'lI 11 110 Il, (it) £1 I I t P 3 9 0 -4 N 0 mt i e t i lU NI I 13 U 0 * t _1 0s ° 5U'I UlI'l ItW'l I"l'l 111 xit f1 11 t ' A x IU ae'} '1 1111 P 11 1'I ( II 1 I LU (U W L-U mi 5 asit I t st tU mU 1U I VI In a 1 f Ua U it n it Is q a it n ns a a 91 I St a 1 ei " XI St u fi la 11 li lit II nI II 9 'O pt St.on noum' sw t 1wz wil u mlIt t in isnm " *lt t' I I' S'S I ii 19 a 1 1 Ut SIE U _P I In [it NII 11 II ai U 41 ai a It oA 't L(1' UL 5( '199 ait U ns5 lt 99 1? ? _W s~~~~~~ a" p it 91 ti a n 8 n in_a_ _~~~_ WI tal "It IR "It WI Ht m WI HI %III (inV$ USi d!mi U"l n II u1 Wn n 9 , n n _ _PA" ftl" 51911 5it't 6551 W9' Utl srl me tt' #' Sl- {_P 51I' £19'i mi itt! owl Ut fit 91 "I Ut Ut 63 p 5 on so Un rn I K1 a a SUt ai a U _ WuUS4po urta siii 1'i 9II1 61' lit Mt I I"t It (P am sP)WM Jimu Ua mSl t46i rail M s h Sail 4W les. Jim) mg - 1i *on l anwm uim - * im mm s as SA mU IM UI (art 'on lme ur M am n am iS ism anl uum m OWdilq burn 4 U *5 9a 134 as 453 1.131 1,311 1,11 1.2 AM sm as JU W w 2 ml 1 1,1 3,114 1,2 1,25 mu1Iu.Ibm n23 2in 2 sit 421 l,S5 ,I1M9 I4 2.33 2,SU e.nris 3 4 '1 2.*1 IU , 4. I ,m * Vial b s M& 15 21 1'm 1129 1,19 S.M S,114 -.nt ::M :.4: : :25 :-::I Pu_i 1Omt IJ,3 4 A1, 4*U 12" O D TMi Ed * 0 16i t14 "15 1.3 i1s31 0 6 0 S _akinut 3 0 4 21 31 14s 256 11 2 11 1 44s MuI~~~biu1m 6 0 4~~~i a5 31 III lit 2.11 1244 1,13 a,m 1.2 clqiuniicia 21 11 1 23 11 11 15 1,22 234 41 3 35 s Idld in d fM 2U 11 1,' 3,1 I,.9 6,141 5.1,4 4,3I" 2,29 Im 2.3, ,SU 02 MI blge CiaIs aa u L" 1141 3.2 2.U l .U 13 SA.Sl 1.3 2.61 I.A ° 0 k m f ind b - _ w.m isa."m awt i 3, amN me U1 U S Is kid rlu beab 1,121 5,81 i*1 41m Ul 1,9? 1.92 15,19 11.94 311.14 53.114 38.96 5IsJ S I f _eU 3,154 3141 X 3,11 5,32 ,.2 2,W11 2,S8 21.411 11,119 2,133 13.32 1109 mi fru_m I 78 3,34 11,1 1113 23.431 I 3 6 3 1>1uiuf Sbut 3,11 5.14 4,12 4,23 15.31 23.41 11,91 21,31 1,11 24,135 23,52 1,"1 SuI 243 43 331 3m2 3,2 1,141 1,891 .1su ,sn 2,9" 3.u31 3.MI 6_mmloa 46 4 a3 4, Si a I 1 131 "I 43 4S1 41 10=d 2 n n 1 4 s1 9f Ul 1N 114 IlI 12 Id1 Cm o _3 I? 1.5 1 1,153,1 23,6 I,") ,533 3,93 4,421 -i Am" C. 4.1 4.39 1,1 11.* MM 2,1 3,"91 3.,133 All3 3,212 U3.S - . _ _ = = - _ - -:: _ : : . _ : _ ;:_:- 3 ::.. _.: lie I 4,1 4.61 4,1 4,331 4.331 4,51 4,31 4,51 4,51 4."6 4.m1 4,31 bsum"ui Cm " 01 ff2 I,1 4,9 3,2 3,3 3,3 38 3.3 4,5 1wo a 9 i 43 6 it 4 I" 1,315 2.13 2,913 4.3 168.1 Yb 4.51 4,.6 lUs ,O1 4,9s 3,933 1 1,313 11.= I1's" 12.11 13,114 14,4 L_ 1n Mm 11n 2,391 3,631 15.33 1135 19.1 11j13 3153 Alps 11,4U 11 *mpik 9 33 II 11 12 12 13 I3 2 32 45 1O Oa1 uilitm 9 U 3 2,163 3.11 15.813 1,5 19.M 1$,11 u11.51 14.418 s1461 A o s' kid 1Wt ad iAiilius 4,65 4.63 3,59 1,14 3131 22.81 217521 3,f291 3.1s8 3.46 N.22 35U 19 _. _._ _ _ .a _ ._ ..a .. _, i-t, I'S' w-e U-S w- u- tie mK we urnl u-l UIre i si t i ( U) a - S t V 44 c Qut m l 9W 19 111 9n n1 I "I M M!Uh Is fool so 1 in L Nga t Ia ml In U | X 8'1 166'1 IU; 9tiI 11 13 13 U 91 Wt II Ut WI IW"I fIVE Mel su su . u9 I" IN 1t 16 ff UP 3WI U* 11 S1 91 4? Ii 99 15 59 44 m If %I 91 n ss a ISa U I In !U1 M!!_ iii to i oil 31f Si is 91 6 IU it I11 m la tu siss t n a v a RO l11 %t Mi n It 9 1 n m Stln191 i 1t U US _U W SI "z nl W~~~~1 "1 n ISI cn Insio _w : ' | ns*t In6z sez si~~~ttLl wvl m m ut "no PR~ tn~~~~~~- n 81 ~~~~~~~~~~~~~tIS l w I * I I I I fJ~ ma, swa rn@ sa n'1 ,u U,s a ma w It at l1 Il fit Mo *43 iE 1 S 1 0 6 S mm a ) U I IN Eta 131 *1 oa II I I4 It Is It aIl Sl-i SU,; 5141 Ul f 1 1 Sl'l Sl'l Ulf Ulf o1r al Uq _ mot ut't st'ot mot WI 0 1 9 in I I I WII f_ p M'tt K.i 111*1 HlS-1 or mo WI NW, mo1 "II Uri 4ul 1 @1 ^ p M"" wirl It" girl II'1 WI m us m n tx K ( ) PR Mm_ Sl St Si it Si SI St tI St 91 Sl an ill _ ^ v et'l mo tv im O n iv m1 im mi -M) JIM 1 1 {1 N*1 1,5 t1 91 #1 U t f wt ot m1igu1 all I,i w S P m fI1 *I1'T ULIII W? 1 96' it ut i ui Lt101)P~UP. 0 t -1 Ulf WI it1 w. 19 *i tOt %f1 H-R ij MN ._. ___. .... . --~~-- ,,c _: : : - eeeae 'U;I iWi Kil WI ngs uatt HIll swt 11St at in mW p uqt WM (13 15UMI) is i) ts U a n a I 311 - --C - -- mm - . - _ - _ swalt m s I 911 fIt Ut Ut ItI in 1 S1 t * * - ee* - .- - ... - ca - _ __ uS 155 GIl I 9 uS'S mt O' 11 St SUT1 3 p6 9'p3 t 'ZS F WS* * aI du a, u I u SSS'1 SWI MI t ' S'1 itt 0 StIIIS tsr; 141'1 NIl Mte'l I'l 9113 al's Iswt l,t'S 15u 1 Itt U p ON I * * U * IS'Kt 8 'S U'sI ir ma * I - .m - ecC -" OCO -' -t -1 - - - 9¢ 1(43 IdI SEl Itl'i 1 I snl m5 35 at m K igat Kutu 1 IU i ll m 11 U 1981 snt SIt Ut SI Ut S III .5 1 99 {1 l Ill 991 u19 UI III 31 I Ib insauus mUK 3W0 MI 961 61I4 tat IMi1 m41 Sout Mt1 lo. a"m ms -t siuw MI Jam SIUmmS eli Um Di ma ml * u IF am us mm o mis -s a -_ BB , 1" - (Mn '34) m im n am lm It am 1a am 1"t it _um fiJ m4o 5.415 SA4S 5.41S 3,ll 51 5,411 3. 415 11.51 20 nji 22,55 12.1 B1. 1 _oi;.umI' 1,43 1. 1,t ,159 1,954 2,01 1,191 2,m I'M 4,S s, 1 4.11S M lifii u I'm I'm 1,5 1.S 1.611 3,110 1.21 30,501 JIl 11,016 11,5S 11.h?4 but inPuus I I 1 1,521 6,W 13.64 "',t I I I I I tle Fiib 1,51 1,M IX1 1,114 5.m 41,5 1s5.3.1 1, A 0.11 113,2 11,145 1PAS . Co& l 3 my 1 is 1,310 sn in 4 01 1 6b013 _=is" a 44 J5 4S 131 144 at 31 5S5 51 b_iun it s s Id 5 t 104 i 2 24 its _ Its b5 53 S 1,5s 9 5 m a Vial tulb l.w 2,11 2,4 4,,UI 1,t, 14j4 31,41 19.51 19,08 fix? 11.54? 11,34 bitiudtv 2,I1 t .lSI 1,351 2,11I .1s1 2.13s 2,1SI 1.111 3js3 2,15I 1.i3 2.151 $Mmm C 'itiu 0 0 15 4 1a91 5,1 4 Im 4,39 1,14 4,49 4,14 4,549 4,14 b4hi" Eug 1 21 it in lI W 1in is 312 1.101 1.511 1.40 1li F-I, 2,112 t,112 2.51) 2,935 4*,m s., 6,3 1.3 I.S13 1.31 3,0117 ,1 1t W t_ | | XU 1~~~~~8 ml .w S.#SI 4,4 U0,0 12.0 11,UR U,US 1O, *,1 M - - - - -- *- ---- ---- - --.- - - C W UA W "141) in 1 13 290 116 11A "J 1 0.s M S WAS 911 fiS utim a d:*liti. 2,.1 2.1U 2,692 4.20 I,m 14.2n 1,.11 19,M1 19.020 3.113 11.5 11,11" 0 N, _ = _ _ -_. : :: :::: ::::: ::--- - 153 - ANNEX 13 g*9 * of 4 ETHIOPIA MARKET TOUWS DEVELOPMENT PROJECT Housing and Savings Bank Financial Analysis Loans Approved hiTlie! of Borrower ( irr -08) Borrower 1983/84 1984/86 1985186 1986/87 1987/88 Total B X B X B X B X B X B X Individual A Private 9,906 25.6 10,205 25.1 2,060 11.8 2,216 1.9 4,090 2.8 298,524 7.9 Housing CooperatIvoe 4,117 10.7 6,148 16.1 5,119 28.0 44,523 838.5 26,898 17.9 86,800 28.9 Slf-elp Housing/IDA - - - - - - 10,782 9.8 16,007 10.8 26,789 7.4 State Enter- prises 24,938 63.8 24,826 59.8 11,072 60.7 68,188 50.8 101,215 68.5 219,739 60.8 39,008 100.0 40,679 100.0 18,261 100.0 116,709 100.0 147,706 100.0 361,862 100.0 = 3a - _ _ u a _ -, - att It It t It It It It It It *t iS iS U p WId e o sl *1 *z *1 *1 u v S u v a~~~~~~~~~~~~9 it u st I s " esun" ~~ " Je s t n tlw drum" > ~~~~nt n SO n n n9 n n 19 Is I" tt aE t9 so OU P Ii tl It tI i l U U 11 Sl l U U tl itl S tl *1 SubaoqIhaA uae ('4 IjislumU ito1U Jo I t n sim ae3""Plow 1a1 Kl, us " oz SU UZ ISE a t- Ul- r A i06 tO a t- Ji I I a a a~~~~~~~~~~~~~~~~~~~~~~~~~~~~p JMl *SIl %I *1 %I *1 U *I U S U W W U U t t If ep PM ' deant ujs,AJid P 1p1 Ulp a du5 I artA rZl ZI Et it it 19 CM * S it K * t tia i , E 3j AE0011 Od5 demo S S3lSSIlI I's SCl il t' tS e'S I'S *t (I'lltS 0 ti IC t i lZ (01l I's (t'S) aI mail? s11t ?'**1 ttl iSI EItl rut Il ,*Qi 61 r6 ES Ell Ill C's tS i rIl C's Iu a * 6 re St * IE's S' tZ S Z t I's 61 91 8 9 co r E stl S OI S' Z1 tIf E Zll nl 100 111I) I Z' t IZ I Z UI *'11 t'ls SIu PI 1 C1't EI' S'Zl *'11 S'@l slO S'tl tSl E'SI mljc3dIu Aa WIN a I'K *' *'t 5't r-t z-0 I'l *'1 lit I1 t'1 S't t l t'l 1 s1sl t18 I i's C'S * S t S't Zt Qrt ilE S'C re lt 41Z rz * Z Ill ani S * 5'a1Ill lt -01 61 E-s Ill El l' O t e* O'S rt t'tl t'l1 auJ %""m * S' *US 1? tSt t-" ZCI l -EE -It Z0 U t tZ r i (S t Ut iU I I'll asi uop' *aE- 11' *'E ii t rEE ni L t*u F6 l E 5 e-t *t O n Olt tO' ZI Ill *1 "IN * EiS 33t lIt oi 5I t- E St £6 Z' Z S US 51 U i elm t1 Jl * z tI'llu 9 "----.---------- ----------------------------- alne@ -,----------- - ----------------- e ------------ --4j"vv1--- ---------- 4-E I U-wi 6-11 U-361 6L1 -Irt AI ts-U61 6t-I i-IU6 1i-ct 0i1 e sl 11U t 1UI r1n sV-- I ii 1-6I Willae a Fl! Ill rut toi r6 r6 IS EU 31 51LNJMVI 31M 3t 3 *iEiVImi INUi a a ;t5 115 W14t S*it tit ~ 111 L11 YIE i*41 15 1 SWV61 11i _S SUiN"S w WISW av 5wSS"1SU 4 t cI 0 cn - 4 * 4 01 O'SSI tl E t'dl Kr ( I) 60 OM tN l (tIE) ti ) I 'lL ti rVL (4P1) Om1PL 'I "lpt" a 4*I Sl E-l I-ilti £1 t-E1 i ri tO ilL E't r-S l- | 1 19 rlIe Al wil a * s l s l s l o § e-e e-0 fe e-e TO ol CIO CI 3301 a- tt ;:j' *-1' rl: ~*ci 3;~, cn cc; n ::1 ::: .: *e "e *-e III * liq lael" l w I 11:1 ::~~ !~ ~~ ~ ~, 1: 614 II 3 l 1 1 6 "ml II Mugm~-~III *e-e Opt bEI 6*W ECu ccci 6*t6 393 tL CZ4 ll Sill' *OI1 Ci SI rIg sLt 1340i4 M-sMaP am I Z-Z s-e s* l * * z d o q| lw **~~~~~~~~~~~~su J s I 6131l fl-l Sill I ti S- El t'UI t*tll r eoi reO ' z 1-n i SIe tr l 911 t IR s I' zns [r1ot I I * ru *-Et1 159 419 61S E-E5 l1t IOt S-St 6VU O-SZ t'EI 6-1t 5l rot el i *911381192 U *e 01o 9*1 t-t rU ti I's tIZ ro 0oe e-e o i- I - eo e e e-0 DID 01 0'0 010 rl O'S O's t-e O't IIZ 0e0 Oe hlIt61-10l 0a A * t' 0 e ss Etls Ilt V-tt IV 1*-5t S eE II *-lt tl' D9 rit e- O's alI- t o Q 1 el e l 01 Ol cl e l Olt otl Ol olt s-Sz (rY) a-t S-l Z-iZ al.An-sal;p 11 a; ixt 0'0 00 01o re ro UrIo 1qIW tlIS3 I ZtSt s ZE VOl ILL s'sz EtE 'll 111 I'll I'll t1l EElI S-OI *-Z t-E t' u ed I tIl SiJtq UldihS i -)S,-- --IOS------------------ --…---) t--c---------------41" -- - -dS-E1 I * "-U4I Il3-1611 t*-t1 14-9161 96-I l-ll MIM1 EI-zI 6l 6-1t1 11-0161 06-1-i I-I861 1--fl 1t-6 -SlI S-tl ti-EUI W M1:M0 a * Iuu3lYIs 53511 iSW S3S z 31I: * W1111i liii (e.1u"3)siuUIivs .1VI311l Ms -- oEnNIAs I NUsI Ill SIUIAIIS In SUISNEK *~I Sl I 1 61 IZ IZ CZ tE It 09t 9E 6z tA *l1 zol 24I Ij3Lb1J3:1qIp 1lO1 I I I I I 1 I Z Z c E I Z C 9t I 9t OIPJ IJ13:1P *al EOII '4 ,16O us us us us 3046 t16 U16 U6 $14 116 116 la 1t6 36 Su 611k P.' lqIp l1et I W | so I t " "|wZ * I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~pgt lsos 0 :WI" u u u sa a is . is U U x IE IE K Z t elelolAo INel I llz1' I0IIS WlAl ii 34 14 U 9 a U 136 U 16 U u of1 S1 a U S El 811 l Jo , 3 I t n IF*3 h*6 t lt l'U *-It iLtt E'll S ZI t-C Il l4 1 14 1492 () ISID) U US 141-t 1IbO1SQ9OEI@W) SIuam * tS t-tI E-tl E tl E'tl tt t1l E'tl. t'tl t tl t7 E'tl r9 0Y 9 Y 0'310 |p4 AIIt Aill3 *1 s n 'll e-e CIll S-EZ t'S elz cwuz stE zI ec e Iu'E2 t'l2 E'ZZ 012 DI ZZ 110- * |St E-l I Ul IV S't2 t'I B' - '1 Ol Ql e1 e, Ptteld-tq I A" il El t' E6 E-6 E-6 E'6 E-6 9-6 t'6 E-6 E'6 t-6 V6, Eli #'; 2'E PIZ iml1 * *'2 ttll I'l ZI 0 l- '11 t't1t Ill 6'01 +§lo felo t lo 1'l C'C *'e t'e 4'C 91t"Ai olun"v *E ritU I'I 1989 VOC9 VIS l'ltS 9'081 0 6t S'ZII I'UE vs Six r-s e-zezz rim r4U1 n11- 0 *1 VP u *n 6" 6n A' s1 619 *-Y un 61 9 e 6'07 V5 VS t'2E *+K -SE l'OE sklm$sl!_d I sailllqll INUJI3 I " 11I1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~103 1 S311111WI"I *VU6 YIU ElaE IIlli E'SIC t'SS Iez z'ILs 'rm clOs 61m l'tEt S'ERE i-tC B'CSZ l'ttZ Pt1"1 Joi *E-E CIE t E E-E E-E E-E E-t E'E El E-E CIE CIE t-E t-t t't Z-E 1^1O I tll po 1S t * I * EsS't reu zsi 9U -e IW l'Yt9 ZOE an o t 11S e lt ldt c Y wOEt 6'15E 919Z I l itS *'h q C SIh ( 'V14 116 IYt*1 stZ WA5 UZI ZL I1 I6Z) I1(99Z) 16) (661) (i 1 (ICC) (S1c WcE src lsaia $"I * Z(E' SIM 91 us 911i Slti EI *'0I CtS II'. Ci Ct-t * "t eli te 6'1R *I' t'it 014IZ It ' a * 6'H I 'Zl clot 9'e rI e Y C t S-t 6' Olt e-t o l ro s-e CID II4bl ¢| 2 * S t 'lli SIM el I'S 0 t YSt 83Ct S01 C CS 6-Ct S0Ot 1'6 S19 C U I'll 6-Ct qW t * SIS ------------------------- Xtrnioj ------------ ------------- - --- --- $1}--------- -I I - ------------) 6-tbS-EI U-I61 CI -C'1 16-it ! 96-IB I 56*Ul- 161 WWI t661 Ot-16 16-0661 16-61 61 U-K61 IS-161 LO-961 9 L-Sl So-"61 Wail ItI- * 133*15 Dll I 3313 * * all I1m * n £91153 3w WISDOM * 96Y3 CDII U~~~1 ULOL UK, ?OIY 0*t? C15 OYS? ~~~L1t CUE?Nt6L11 9195 C1Z 31ISIVEIII 'I.C6) (5183 CIII) (Ill) Cr66) Ills) (riP)(roll (~EE) (775) (61) (6~3 (rIp Cr;) (nt (rep mI.;a.ad6alds * ZC96~t45 519 911 ~5I 5199 '6I~ C9E ElE 196 95?? rOt 415 lIE £*Lt MNSSWINS 9 wim - 157 - A1NN13 14 Page 1 of S ETHIOPIA MARKET TOWN DVELOPMENT PROJECT Economic Analysis Detailed Calculations of Economic Rates of Return (ERRs) A. TYDical Sites and Services Scheme (Vollisso) Table 1s Calculation of ERR (Birr '000) --------- Cost… ---------- 6 nstt --- - ---- -- Lputed Residual Construction Maintenance Total Rental Land total Year Cost Coat (21) Cost Value Value Benefits I 9C 95 2 849 849 3 ss s888 4 962 952 5 671 671 395 895 6 BIt 817 494 404 7 08 as 549 649 8-24 68 6a 549 549 26 68 68 549 I53 70? Rato of Return a 14X - 158 - ANMS 14 Page 2 of 5 Table 2s Key Assumptions for Sites and Services Scheme pagacodt ('000 eire, 1960 Price) . Foreign Doetle Un- 1990 Exchange Currency Material Skilled skilled Baex Co"p't Co'lt Labor Labor Costs Housing 29S 713 ?75 12.53 12.53 2,449 Relatod Infrsetructure Roads and Drainage 273 T7x 753 12.53 12.63 150 Water Supply 64X us 763 12.# 12.53 70 Electricity gas 3 753 12.6W 12.53 63 Land Os 1003 0# .ox .03 a6 rote I: 2,357 o Including 103 physIcal Centengency, excluding taxe and duties. commas" c ('o000 Sir, I0 Prim_) Foreign Domostic Un- Exchange Currency Material Skilled skillod Totel C.mp't Cop't Labor Labor Amount Housing 720 1,729 1,297 216 216 2,440 Related Infrastructure Roads and Drainage 49 1J1 so 16 16 0 Water Supply 51 23 21 4 4 79 Electricity S6 5 4 1 1 63 Land 0 I6 0 0 0 Os Totel: 670 1,979 1,420 23? 287 2,067 Standard Cony'n Factor (SCP) 1.45 1.00 1.00 .67 Adjusted Total 1,272 1,900 1,420 237 159 3,173 Subtotal Housing & InIro. 1,272 1,015 1,420 237 159 8,068 Subtotel Land 0 6f 0 0 0 O5 With HoV" Nusber of Plot T Itl Circu- Type Peorent Unite SIix *' lation Core 203 40 110 5,120 6,638 Core.I to 6o 120 7,600 12,800 Core * 2 s0o lO0 120 12,600 21,318 Cor-* 03 0 1t0 0 0 Total: 1o0X 200 Heceree 2.56 4.27 Value (Sire/12) 2.00 Est. Value (000.) Is Assumed Number Rtnt/ Rent/ Hourhol d Rent Benefit, Reoome of Day/ Month/ lncooe/ as X Year Type Unit Unite Rooe Unit Month Income (000.) Coro 1 40 2.50 75 300 253 36 Core * 1 2 60 2.50 10S 400 ai L00 Core. 2 * 100 3.75 333 500 6Sa 406 Coro * a 4 0 3.75 460 600 753 0 Total: 460 200 649 ee _ - _ _ _ _n________ - 159 - ANNEX 14 Page 3 of 5 S. Typical Market Place Improvement (Aral Nogwl*) Table 1: Calculation of ERR (Blrr '000) Cost Benefits Year Constrvctbon Maintenance Total Reduced Loame Fees from Increased Revenues Total Cost Cost (2X) Cost from Surtacing Stalls from Expansion Bonofits 1 81 - 81 - - - 2 81 - 81 3 81 - 81 - - - - 4 6 6 84 20 104 5 6 6 84 20 3 107 6 6 6 U4 20 5 109 7 6 S 84 20 8 112 8 6 6 84 20 11 115 9 6 S 84 20 13 117 10-26 5 6 84 20 16 120 Rate of Return a 33X - 160 - ANW ZL14 Pige4 of 5 Tabl- 2: Key Aesuptione for Markoet Place Improvements Bow SIl ($000 Di rr, 1900 Pr.e) * Foreign Dometic Un- 199D Exchange Currency Vatoriel Skilled Wi;led Beg. Comp't Comp't Labor Labor Costs Conetruction sex 421 76X 12.6% 12.56 196 * Including 101 physical contingency, excluding taxes and dutios. Cooonest Costa ('OGO Biur. 1990 PrIces) Foreign Domesic Un- Exchange Currency Materil Skillod skilled Total Coept Coep't Labor Labor Amount Construction 114 68 62 10 10 198 SCF 1.45 - 1.00 1.00 .67 - Adjusted Total 166 79 62 10 7 244 Eeonomic Benofit. No. of vondor. 387 Soles/Vendor/Week 50 Sales/Year (000s) 876 Weekly attendance 24,000 Spending/Attendee 2 Salos/Year (000.) 2,496 Surfacing Sales (COOs) 1,6 6 Reduced losses 6X Stalls Number 100 Fee/Month 16.6 Expansion: Revenues (t°°s) 53 X Inereasw 256 ____ ~ ~ _ __ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - 161 - ANNEX 14 Page oI 5 C. TVyical Water SUDpIY Expanslon Scheme (Aasela) Table 1: Calculation of ERR (Birr '000) Costs Benofits Year Conutructlon Cost Incremental Total Cost Incroe ntal Oe_rotlns Cost Revenues 1 788 0 788 0 2 2,786 0 2,708 0 3 6,774 0 6,774 47 4 6,952 18 6,9f6 94 5 ,996 32 4,028 177 6 2,126 186 2,264 1,198 7 202 202 1,775 8 252 252 1,914 9 S30 380 1,920 1o 892 892 1,9B8 11-40 892 892 1,938 Rate of Return a 6X ___ __ __ ___ __ __ __ ___ __ __ __ ___ __ __ __ ___ __ __ __ ___ __ __ __ - 162 - ANNEX 'S ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT Household Income Distribution by Market Towns, 1988 lNu b r and Frc-ent] Ambo Arn- Asseto Cobs Robe Mixon Shashe-Wollisso Ziway Total Total N g.b TeforT mane X Number Population 1988 (et) 19,900 16,400 40,100 28,600 14,600 7,600 41,300 19,700 7,200 195,400 Number of Households 8,976 2,700 7,2B3 6,282 2,175 1,426 6,088 3,729 1,148 33,758 Income Distribution: (blrr / month) X lose than 100 87X 28% 833 47X 41% 653 S9% 473 43% 39X 18,105 X from 100 - 199 28X S6X 42X 26X 27X 18X 42% 27X 26X 83X 11,212 X trom 200 - 287 4X 6X 4X 6X 4X 8X 4X 8X 6x 4X 1,384 Subtotal Poverty HHo 69X 69X 79% 77X 71X SOX 79X 77X 72X 76x 26,701 X from 238 - 299 8X 10% ax 8% 6% 6X ex 56 lOX 7X 2,356 X more then 800 28X 21X 18X 15X 22X 10X 16X 17# 18X 17X 5,701 Subtotal other MHH 81X 13X 21X 283X 29 14X 21X 23% 28X 24X 8,067 Total 1003 100X 1OOX 100X 1OOX lOO1 1OOX 100X 1O0X 1OOX 83,768 Source: NUPI sample survey of town households, 1988 CHART I ETHIOPIA MARKET TOWNS DEVELOPMENT PROJECT MINISTRY OF URBAN DEVELOPMENT AND HOUSING ORGANIZATION CHART Otfieo of the Minister Project Manag emet Audit and Inspection Office S rvic r Otff;ce of th- 5 vice-u niotur I Orgpnization and -Le| Management Service J Service I Planning and 1 - Public Relations At Prograing j I nformation Service Urban Planning Urban Housing | Housing Financ | Administrative Implem_ntation Development Cooperatives Renearch and Departent and Manpower and Urban Land Department Organization Dept. Service Dopt. Dev. Dept. Admin. Dept. __ ____ National Urban Plannin | Construction Materials Dwelin Hounes Agmcy fo Administr- Institute Supply Enterprise Construction Enterp. tion of Rental Houses Urban Development I I Project, Office Branch Offices I -164- 43~~~~4 la,~I- L.2. MARKET * DEvEL~mENT PROJECT .TYPICA IIBtCIPA IEOaM7TIs SIUI:IE City Counc I Standing C_eitteeJ Revolustionary Sqma Mayor OthIr Com_lrron Codommsson D/ MayorI-_ Ait ain so Ipeon at IServlSe i e .I Adinistrativ Planning and Soblcz Dltlolz . P~~~~~~~~~~rqrini muSrvice Servicee Division Jrgomia evc ribn Land Adinistra- |Sanry and Social Econmic Services Financial and ion and Toch l Servic Division Adm ini Astration R u s Tic Service Dv Divison Rdminisevtton iv rebe Urbn vet oiIio |K b lo Urban Dwelling Association| CHART 4 ETHIOPIA MARKET TONS DEVELOPMENT PROJECT WATER SUPPLY AID SEWERACE AUTHORITY HEADSUARTERS ORGANIZATION Genera Ianager [ C n rol U nogor'n | AuxiIlary Service. Lepl Servicee Internal Audit C Public Ix.tionc 0' Organization Methods and Training | dniestrative Servicee Finance Planning A Programming | ppiS les A Equipment Department Department Departmot Department |Chidf Engin- r F .- I. I I W Egin rlagi S rvicou Conxtruction Control Ope'rotion A Maintenance Communitty Doportn nt Dop rtb nt D p rt nt Participation Region* -167- I Ca I ~~~~~~a 0C -A ~ ~ ~~~~~~~1I MARKET TOlNS DEVEL(PMENT PROJECT WATER SUPPLY AND SEERACE AUTHORITY ORCANIZATION OF WATER SUPPLY AND SEWERACE SERVICE UNITS IN PROJECT TOUNS Drive Wtr Lob TohIc Administratlan A Chif P Routine A Prevtntive Plnt Personnol A~ccountant Maintenance Distribution and He"d Chtdf M ch nle Wtetr Motors Chief Electrician Reading Secretary Cashier Mechanics Plumb,rs Operator Typist Accountant. Electricians Water Motor Readers Helpers Archive Bill Collector Hlpere Water Sellers Guards Store Keeper E ,IOTPIA UARKET TOi DEVELOtPENT PFtR0 CtRANIZAtlON OF HO1.INO A0 SAVINOS W | Con-r I Manager I or~~~~~~~~~~~~~~~~~~~~~~~~~~~~~bca lXnn tbs* leZo h :entrell*r l neper Manager lnnagerr chief Mnaer. | C gal Urban [1 rroj. Acte. et. Credit Dept. Adin. Dept. Engineer Plmnnni Adweor topieinnt.tion Re. Dept. WUnt 0ep Maner Deputy Ch;-f | anage ;; ubl;;ic | Admnlatratbanl Engineer I 18renchd Op.. fteIarien. Head I Had I Hed Hed Ha ea ed Had Hed Heed Head "ead er- Spc-I G. 5peci Credit iCrdit Peren- Cn rI Project Liti- ElLee- mel Itioni Accaunt ccaamt Info & Polic mel Service Poli Appraisal getion t.ian Pi adit As_ hrl l_ *nelaat up up |nd | nd Imeac. Aeae". [D 21862 'a th tew*aee at.f the ' , 3a a.oniS r,'4r5 ,1 te T U R K E Y >ostt ; ANKARA SEWERAGE PROJECT Sewage from Venikent ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Mal eeWI" 0 NKARA~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~A/ MtLES IIR 8~ ~~~ 6 4 2 0 ILOMMERS PLANNED AREAS (EXISTING) SEWERAGE I SA PROJECT EXISTING AidOCAN e2 _ RO1M7NIA GECEKONDU AREAS (EXISTING) - INTERCEPTORS MOE BULIA6 / kM US..1 ROADS COLLECTORS dREEC ,.r- RIVERS AND STREAMS PUMPING STATIONS S BOUNDARY OF ANKARA TREAT1ENT PLANT SITE T t , REP OF - ~~MUNICIPALITYTRAMNPLTSIEIN tl-! :NARAB REP IRAQ NOVEMBER 1989 A1AIDA'S ORGANJIZ%ATION CHART flinistry of Industry General Manager Audit Services MZaIC urara . e & einancial Export & Reistration & t: ormation servics uit _Services Service wuGxrp rromooton GinPE pralee z Dept, l et Preparation 8ergi s Dept Offices , !w-!g * =^ Center . Awasq Training Center •W ol Processing & Carpet TrainCg Center (Project Level) T U R K E Y ANKARA SEWERAGE PROJECT IBRD 21902 YG&sdtepe [ ~~~~~~~~~~~~~~~~~~~~~~~~~~~YQkseltepa 1\