Document of The World Bank FOR OFFICIAL USE ONLY Report No. 6984-SE STAFF APPRAISAL REPORT SENEGAL MUNICIPAL AND HOUSING DEVELOPMENT PROJECT February 24, 1988 Infrastructure Operations Division Sahelian Department Africa Region Thi docement has a reticted dibibudon and may be used by rfepiens only in the performance of their ofkiw dutie its contens may not otherwise be disosed wihout Wodd Bnk authorzaton. CURRENCY EQUIVALENTS Currency Unit - CFA Franc (CFAF) US $1.00 u CFAF 300 CFAF 1 million = US $3.333 WEIGHTS AND MEASURES Metric British/US Equivalents 1 meter (m) - 3.28 feet (ft.) 1 cubic meter (m3) = 35.3 cubic feet 1 are (100 m2) = 0.02 acre 1 hectare (ha) - 100 ares = 10,000 m2 - 2.47 acres 1 kilometer (km) 8 1,000 m - 0.624 mile 1 square kilometer (km2) - 100 ha - 0.386 square mile (sq. m.) 1 kilogram (kg) - 2.20 pounds (lb.) 1 liter (1) m 0.26 US gallon (gal.) 0.22 Imperial gallon (imp. gal.) 1 metric ton (m t) - 1,000 kg = 2,204 pounds (lb.) LOSARY OF ABBREVIATIONS BCEAO - Central Bank of Western Africa States/Banque Centrale des Etats de l'Afrique de l'Ouest BHS - National Housing Bank/Banque de l'Habitat du Senegal CIDA - Canadian International Development-Agency CUD - Greater Dakar Intermunicipal Organization/Communaute Urbaine de Dakar FAHU - Fund for Housing and Urban Improvement/Fonds d'Amelioration de l'Habitat et de l'Urbanisme FECL - Grant System for Local Governments/Fonds d'Equipement des Collectivites Locales GOV - Governnmrnt of Senegal Mt.F - Municipal Credit Fund OHLM - Public Developer of Inexpensive Rental Housing/Office d'Habitation a Loyers Moderes SICAP - A mixed economy corporation for-housing development/ Societe Immobiliere du Cap-Vert STCUD - CUD's Technical Services UMOA - Western Africa Monetary Union/Union Monetaire Ouest Africaine FISCAL YEAR Central and Local Governments - July 1 to June 30 Banque de l'Habitat-du Senegal - October 1 to September 30 This report was based on the findings of a World Bank mission consisting of Messrs. F. Pechon (mission leader), F. Amiot (economist), B. Delaval (urban planner), Ms. C. Farvacque (research asssistant), Me3srs. B. Fournial and T. Kangudi (consultants), which visited Senegal in June/July 1987 to appraise the project. FOR OMCIL USE ONLY - Mi) - SENEGAL MUNICIPAL AND HOUSING DEVELOPMENT PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. Credit and Project Suumary (iv) to (vii) I. THE URBAN SECTOR CONTEXT ........................... 1 A. Urbanization and Demographic Trends ......................a 1 B. Government Policy in the Urban Sector .......... 1 C. Municipal Institutions ......................... 4 D. Long-term Plan for Municipal Development ....... 5 E. Housing Demand and Supply ........ .............. 7 F. Land Tenure and Related Issues . ................ 7 G. Financial Constraints to Housing Supply ........ 8 H. The Bank's Previous Role ... .................... 9 II. THE PROJECT ....................................... 10 A. Project Objectives ................... 10 B. Project Description .................... ...... 11 C. Rationale for Bank Group Involvement ........... 14 D. Status of Project Preparation .................. 15 E. Project Costs and Financing .................... 15 F. Implementation Schedule and Responsibilities ... 17 G. Procurement ... ................................. 17 H* Disbursements .. ..................... ........... 19 I. Accounting, Auditing and Reporting ............. 20 J. Financial and Economic Analysis ................ 20 K. Benfits and Risks ...o.....................e.. 24 III. AGREEMENTS AND RECOMMENDATIONS ..................... 25 This document has a matrkted distribution and may be used by recipients only In the performanco of their ofllcia duties. Its contents may not othewise be disclosed without World Bank authorzain - (ii) - P!Aa No. TABLES IN THE MAIN EXT Table 2.1 - Estimated Costs ........................... 16 Table 2.2 - Financing 16 Table 2.3 - Procurement ........................ ....... 18 Table 2.4 - IRS Intermediation - Schedule of Disbursements ..... ..................... 19 SUPPORTING ANNEXES. TABLES. CHARTS AND NAPS Annexes and Tables Annex 1 - Detailed Description of Project Components 28 Annex 2 - Summary and Detailed Cost Tables Table IA - Project Cost Summary (CFAP)....... 50 Table 1B - Project Cost Summary (US $)....... 51 Table 2 - Proposed Project Financing S**0. 52 Table SA - Execution of Project Components by Yoar (CFAF)................. 53 Table 31 - Execution of Project Components by Year (US $) .......... ....... 54 Table 4 - Project Costs by Categories ...... 55 Table 5 - CUD's Technical Department Strengthening - Detailed Cost Estimate. 56 Table 6 - Transport Sub-component - Detailed Cost Estimates ....... 57 Table 7 Fiscal Cadastre - Detailed Cost Estimates 58 Table 8 - Project Unit - Detailod Cost Estimates . .9 Annex 3 - Project Execution Schedulo and Responsibilities Table 1 - Project Execution Calenda. 60 Table 2 - Project Implementation Responsibilities .............. 61 Annex 4 - Implementing Institutions .................. 62 Annex 5 - Financial Tables of Implementing Institutions Table IA - Municipal Credit Fund - Income Statement (BUS) ............... 69 Table 1B - Municipal Credit Fund - Source and Application of Funds .......... 70 Table IC - Municipal Credit Fund - Balaneo Shoot oooo............. 71 Table ID - Municipal Credit Fund - Indicators 71 Table 1E - Municipal Credit Fund (Graph) .... 72 Table 2 - Consolidated Budgets of the Local GovernmAents 73 - (iii) - Part No. Table 3A - Banque de l'Habitat du Sonegal - Income Statement .......... . ....... 74 Table 3B - Banque de l'Habitat du enengal - Balance Sheet . .. . 75 Table 3C - Banque do l'Habitat du Sen;gal - Indicators ................... 75 Table 3D - Banque de l'Habitat du Siragal - Average Costs and Returns ..... 76 Table 3E - Banque de l'Habitat du S0nigal - Debt Service ... 76 Table 3F - Banque de l'Habitat du Sen;gal - Incresse of Outstanding Loans 76 Table 4A - Land Development Corporation - Income from Plot Sales ........ 77 Table 4B - Land Development Corporation - Development Expenditure ....... 78 Table 4C - Land Development Corporation - Balance Development Income - Expenditure ............. . 78 Table 4D - Land Development Corporation - Operation Expenditure ......... 79 Table 43 - Land Development Corporation - Cash Flow ..................... 79 Table 4F - Land Development Corporation - Financing ..... . 79 Annex 6 - Training Program and Technical Assistanc.. 80 Annex 7 - Procurement Arrangements .... ...... . ..... 86 Annex 8, Table 1 - Disbursement Schedule ............ 87 Table 2 - Allocation and Disbursement of the IDA Credit .... . 88 Annex 9 - Cost Recovory, Replicability and Affordability ..... .o. 89 Annex 10 - Economnic Analysis .... .... 92 Table 1 - CUD's Collector Roads Costs and Benefits ...................... 93 Table I - CUD's Collector Roads - ERR Calculation ............94 Annex 11 - Selected Data and Documnts Available in the Project File ................*. . 95 Charts Chart 1 - Communaute Urbaine de Dakar ................ 97 Chart 2 - CUD's Technical Services ................... 98 Chart 3 - Banque de l'Habitat du Sn;gal ............. 99 I8RD No. 21021 IBRD No. 21022 - (iv) - SENEGAL MUNICIPAL AND HOUSING DEVELOPMENT PROJECT Credit and ProJect Summarv Borrowers Senegal Beneficiaries: Ministry of Plan and Cooperation Ministry of Economy and Finance Ministry of Urban Planning and Housing Ministry of Equipment Ministry of Interior Communsute Urbaine de Dakar Banque de l'Habitat du Senegal Credit Amounts SDR 32.5 million (US $46.0 million) Terms: Standard, with 40 years maturity Co-financinas: CIDA, US $2.7 million equivalent Proiect The proposed project has two major objectivess (a) Oiectives strengthening local governments (particularly in and metropolitan Dakar) to Improve policy making, service Descriotion: delivery, urban Investment and resource mobilisation; and (b) expanding the economic impact and efficiency of the housing sector bys (i) removing financial and institutional constraints to the National Housing Bank (Banque de l'Habitat du Senegal (BRS) )I and (iI) improving the operation of the urban land market through the annual supply of a significant number of serviced and titled plots, while promoting progressive privatization of the delivery of housing. The proposed project includes: (a) A municipal management component which would includes (i) the creation of a MWaicival Credit Fund administered by BHS for medium-term lending on commercial terms for municipal income generating projects such as market rehabilitation and construction; initial financing-of this fund will be provided by IDA and by a share of the Government's financed 'Fonds d'Equipement des Collectivites Locales' (FECL); (,i) equipment and training of the municipal technical department to - (v) ' follow-up efforts started under the Technical Assistance Project for Urban Management and Rehabilitation (Credit 1458/SF-13 SE); funds for the rehabilitation and equipment of selected communitv facilities would be made available; (iii) ongoing technical assistance and complementary support to the Traffic Bureau (Bureau de la Circulation), rehabilitation and improvement of selected sections of the urban road network to improve public transport operation particularly in the Pikine area; implementation of a Traffic Management Plan (Plan de Circulation) for central Dakar (plateau); and (iv) improved collection of municipal taxes through implementation of a fiscal cadastre in the Dakar metropolitan area; this would support initial efforts by the Tax Administration and Treasury to improve tax billing and collection and would focus on expanding the existitg tax base by organizing and unifying property and business registry and valuation. (b) A housinat component which wouldt (i) finance medium-term loans intermediated by BHS for land development activities and particularly for the land development corporation to be created with a majority of private shareholders as an intermediary for initiating the development of about 1,800 serviced plots annually (40S of the estimated market); and (ii) finance a long-term loan from the Government to BHS to help remove bottlenecks, preventing BHS from increasing its share of housint construction financing and particularly to foster more efficient schemes of saving mobilization. Benefits and Risk.t The internal rate of return (IRR) of the land development sub-component is satisfactory (22S) under conservative assumptions. Economic rates of return (ERR) for civil works aiming at traffic improvements are high (281 on the basis of maintenance cost savings without taking time savings into account). The proposed project is expected to boost the private supply of housing through a more efficient financing system. Homeownership is a powerful motivation for household savings which are, in turn, the main source of domestic savings that can be invested in economic growth. The municipal component would have direct economic impact through improved efficiency of the public transport. Furthermore, improved efficiency of the municipal services is a key aspect of the strategy aiming at enhancing - (vi) Dakarts role as a regional service center. Main risks may arise from the involvement of many implementing agoencies (five ministries, CUD, BH8 aud the land development corporation) and from the difficult related coordination. BHS will play a key role by intermediating most of the financing of the two major components; however, tho relsted risk is minimal as this institution is sound and well managed. Another risk stems from the status of the land development corporation which will be controlled by the private shareholders whose interest will not necessarily match the project*s objectives. Specific and general contractual arrangements between the Government and the corporation bave been proposed for minimising this risk. Estimated Prolect Costst Local Taxes Foreitn Total ------ (- (US $ million) ------ A. Municipal Credit Funds 10.3 0.0 4.4 14.7 FECL contribution 7.9 0.0 3.4 11.4 IDA contribution 2.4 0.0 1.0 3.3 CUD's technical department: 3.0 2.8 4.5 10.4 Technical assie,tance 0.2 0.1 0.6 1.0 Training 0.1 0.0 0.0 0.2 Equipment 0.0 2.2 3.2 5.4 Public facilities 2.1 0.4 0.5 3.0 Technical centers 0.6 0.1 0.2 0.8 Transports 5.0 2.5 7.9 15.4 Technical assistance 0.3 0.2 0.9 1.4 PAP (Traffic Management Plan) 0.7 0.5 1.6 2.8 PAP (Other) 2.0 1.2 4.0 7.2 CUD's road network 2.0 0.6 1.4 4.0 Fiscal cadastre 2.6 1.5 26 6. Total municipal component 20.9 6.8 19.4 4iL1 B. Land development 4.6 0.0 2.5 7.0 Housing loans 0.0 4.0 13.3 Total housing component 13.9 0.0 6.5 20.3 C. Project Unit operation 0.4 0.0 0.1 0.5 Feasibility Studies Urban 4 0.1 0.1 0.2 0.4 PPF and unallocated _13 2.0 0.0 1.3 Total Project Unit 1.8 0.1 0.3 2.2 - (vlii) - Local Taxes Foreign Total -------- (US S million) ----- Base costs 36.1 6.9 26.2 69.6 Physical contingencies 2.1 0.6 1.9 4.6 Price contingencies 2.6 0.7 0.9 4.1 Total 41.2 8.1 29.0 78.3 Financint Plan: S of Total Project Local Taxes Foreign Total Cost Government 9.8 8.1 3.4 21.3 27 BHS 5.4 2.9 8.3 11 IDA 25.3 20.7 46.0 59 CIDA 0.7 2.0 2.7 3 Total 41.2 8.1 29.0 78.3 100 Estimated Disbursements: FY 89 FY 90 FY 91 FY 92 FY 93 FY 94 FT 95 FY 96 MCF 0.7 0.7 1.0 0.7 0.2 0.2 0.0 0.0 Long-term loans to BHE a.0 3.8 1.5 0.0 0.0 0.0 0.0 -0.0 Other components la - -.& 4.4 5.3 5.5 4.7 _3.8 3.5 0.9 Total 9.9 8.9 7.8 6.2 4.9 4.0 3.5 0.9 Cumulative 9.9 18.7 26.5 32.8 37.6 41.6 45.1 46.0 Economic Rate of Returns 282 for the rehabilitation of CUD'8 collector roads. Estimated Prolect Completion Datet June 30, 1994 Memorandum of the Presidents No. P-4738-SE Maps: IBRD No. 21021 IBRD No. 21022 la Disbursement profiles Former Western Africa Region - IBRD and IDA Sector Investment and Maintenance Loans. SENEGAL MUNICIPAL ANM HOUSING DEVELOPMENT PROJECT STAFF APPRAISAL REPORT I. THE URBAN SECTOR CONTEXT A. Urbanization and Demotraphic Trends 1.01 High natural growth rates and an extremely mobile population are significant features of Senegal's urbanization process. In 1985, the urban population represented more than one-third of the total population (6.5 million). Approximately 1.5 million of the 2.2 million urban residents reside in the Dakar metropolitan area, with the remainder distributed among 15 cities and concentrated in six regional centers. The overall urban growth rate is 3.8X (4.7% in Dakar) compared to a national growth rate of 2.8%. By the end of the century, Senegal's urban population is expected to reach 5.2 million, representing 50% of a total estimated population of 10.3 million. 1.02 Almost a quarter (22%) of Senegal's population is concentrated in less than 0.3% of the country's area, greater Dakar, where 70% of modern emp3oyment and 90% of industrial firms are located (58% of GNP). The population is shifting eastward to Pikine, a predominantly low income and poorly serviced area approximately 25 km from Dakar and adjacent to the new industrial area. According to recent estimates, Pikine is now Senegal's largest community (600,000 to 800,000) whereas central Dakar is less than 500,000. 1.03 Population overconcentration in metropolitan Dakar would be counterproductive in the medium and long-term and measures needs to be taken to foster a more balanced distribution or urban population throughout the country. However, Dakar is clearly one of the country's major assets for development. Its potential to become a modern international service center surpasses most other regional capitals. Therefore, the urban strategy should aim at improving Dakar's efficiency while mitigating its relative attractiveness for new residents. B. Government Policy in the Urban Sector 1.04 As the Government's strategy emphasizes the promotion and diversification of agricultural and export oriented activities, the central Government is eager to gradually withdraw, at least partially, from direct support to urban services, urban infrastructure development and provision of shelter. These functions should be taken over, to the extent possible, by the local governments and the private sector. -2- 1.05 funiciyal Poliev. The municipal development policy aims at strengthening the local governmentst techbical and financial capability to take over t1e urban services and to become effective actors in the economic development. This policy covers the secondary cities as well as D..kar. In Dakar particularly, the newly implemented reform (para. 1.07 and Annex 4) of the municipal organization, which is considered as a pilot undertaking, is expected to provide experience applicable to other regional capitals. 1.06 Fonds d'Eauibement des Collectivitis Locales (FECL). The Government established a grant system in 1977 to help finance the local governments9 capital investments. The system is called "Fonds d 'Equipement des Collectivites Locales' (FECL). It was originally financed by an earmarked business tax based on turnover and is now financed by the Government's general budget. FECL has distributed an annual amount of CFAF 1.3 billion (US $4.3 million) since its creation. The bulk is allocated as 'fonds de concours ordinaireos according to comprehensive criteria (such as the total amount of the capital budget and population) without reference to specific projects. A small part Is allocated as "fonds de concours spociaux" for financing specific projects. However, supervision is poor and reporting on the use of funds is virtually absent. The Government has very recently decided to increase the annual amount from FECL and reallocate a share of this fund to the financing of a Municipal Credit Fund (MCF) that would offer loons instead of grants and thus expand FECL's imupact by recycling funds (para. 2.05 and Annex 1). 1.07 Transport and Traffic. Efforts have been undertaken in 1980 to Improve the management of transport and traffic in the Dakar area on a comprehensive basis. A Transport Plan (Plan de Transport de la R;gion de Dakar) has been prepared and approved by the Government in 1985. The Traffic Bureau (Bureau de la Circulation), created under the Technical Assistance Project for Urban Management and Rehabilitation (Credit 14581SF-13 SE) within the Ministry of Equipment (Annex 4), was expected to provide a suitable institutional framework in order to follow-up and Implement the Transport Plan. However, due to inadequate local staffing and latk of Government support, the Traffic Bureau has, up to now, been prImarily operated by technical assistance experts. The Government has presently comoitted itself to strengthen the Traffic Bureau and to Implement measures proposed under the Transport Plan. 1.08 Housint Sector. Until the early 1980s, the Government's housing policy was based on planned construction projects implemented by specialized parastatals ("Societe Iimobiliere du Cap-Vert' (SICAP), a "societe d'economie mixte' created in 1950 with only a small minority of private shareholders (42), and the Office d'Habitations ; Loyers Modreis" (OHLM), a public agency created in 1960). The projects were intended to supply housing to a wide spectrum of the urban population including middle and low income households. However, most projects have failed to take into account affordability considerations and have been designed on the basis of irrealistic technical standards. As a result, between two-thirds and 902 of Dakar's population have been "de facto" excluded from the benefit of this policy. - 3 - 1.09 Since creation, SICAP has built approximately 11,000 housing units, of which 6,000 were for rental and 5,000 sold by installments (location-vente), and OHLM has built approximately 10,000 units, of which 3,000 were for rental and 7,000 sold by installments. Construction has fallen dramatially since 1975, primarily because of the disruption of the concessional financing abundantly provided previously by the OCaisse Centrale de Cooperation Economique" (CCCE). In 1976, the Government created the "Fonds d'Amelloration de lMHabitatO (FAH), which later became 'Fonds d'Amelioration de l'Habitat et de l'Urbanisme" (FAKU), a treasury account earmarked to finance public housing and urban development. The financing of OHLM projects relied on the Government's subsidies derived from this fund until 1981. Thereafter, the Government reallocated FAHU's monies to the newly created National Housing Bank (Banque de l'Habitat du Senegal (BHS), thus requiring OHLM to fund its own proj3cts. 1.10 BHS was created In 1979 in the form of a public-private joint venture (so¢lSte anonyme d'economie mixte) (Annex 4, pares. 11 to 16) with the objective of establishing a domestic supplier of funds that could take over the role of CCCE in the financing of public housing programs. BHS has been rather successful, since inception, as a financial institution and has been instrumental in the recent establishment of several private developers in Senegal which rely on BHS' short-term loans to finance their projects and on long-term housing loans to market them. However, BHS has been unable to increase the share of planned housing construction beyond 102 of the total housing supply. Moreover, the bulk of the housing units supplied by developers, Including those which are rated low income or very low income and mainly built by SICAP and OHLM, are actually affordable to only a small minority of the urban population. By September 30, 1986, BHS had financed the construction of 4,700 housing units for a total cost of CFAF 21 billion (US $70 million) allocated as follows: 311 for projects submitted by SICAP and OHLM, 612 for projects submitted by private developers and 82 for cooperatives (nimons of self-help developers). By the same date, a total of CFAF 17 billion (US $56 million) in long-term housing loans had been approved, almost exclusively to the benefit of wage earners applying for the purchase of housings built by public and private developers. Although BHS is the only financial institution active in the housing sector and the main channel of the Government's subsidies to this sector, BHS is vLrtually absent from the main stream of housing supply (self-help development of individual dwellings). This has raised many critics and has led the Government to reconsider its policy. 1.11 Until recently, the 'Direction des Parcelles Assainies" (DPA), which was created within OHLM in 1972 to execute the Sites and Services Project (Credit 336 SE), was the only entity engaged in land servicing. In 1983, the Government decided that OHLM's activity should shift back towards its original objective of providing low cost housing and proposed the creation of a separate Land Development Agency for supplying serviced and titled plots affordable to a large part of the population. The preparation of the Technical Assistance Project for Urban Management and Rehabilitation (Credit 14581SF-13 SE) wa then In -4- progress and IDA decided to support this proposal by including a feasibility study of the Land Development Agency in the housing cVmponent of the project. Moreover, the creation of the Land Development Agency, provided that its feasibility would be demonstrated by the proposed study, was included in the action plan attached to the Development Credit Agreement. With the completion of the study, the Government is eager to initiate the creation of a land development corporation as recommended by the consultants (Annex 1, paras. 36 to 52). 1.12 The Government has become conscious of the limitations of a housing policy based on planned public programs and intends to privatize SICAP, to change OHLM into a public corporation with new cbjectives (which are yet to be defined) and to stimulate private initiatives in land development and housing construction. The Government's involvement in the housing sector should ultimately be limited to the enforcement of regulations for land use and pricing so as to monitor the urban development and to foster production of affordable plots. C. Municipal Institutions 1.13 Senegal is currently experiencing a severe economic and financial crisis which has linter alial disrupted the smooth operation of municipal institutions, especially in Dakar. Institutions were recently reshaped in 1985 in the Dakar area with the creation of three local governments (communes): Dakar, Pikine and Rufisque-Bargny, and one arban community (Communaute Urbaine de Dakar (CUD) ). The three "communes" have mayors elected by the city councils which themselves are primarily elected by the citizens (of 69 members in each city council, 59 are elected and 10 are nominated by economic and social organizations). A "communaute urbaine" is, under Senegalese municipal law, a public institution with legal personality and financial autonomy, to which most of the local governments' legal provisions are applicable. CUD's executive body (Comite de la Communaute Urbaine) is made up of representatives (Dakar - five, Pikine - three and Rufisque-Bargny - two) elected by the city councils under the chairmanship of a president, who happens to be the Mayor of Dakar. This new institutional system took over the central Government's administered 'Commune de Dakar' at a time when the effects of the financial crisis were reaching a peak. CUD and the three Ocommunes" have been facing a dramatic shortage of financial resources since inception, despite significant improvements of revenue collection gradually brought about by measures implemented within the iramework of the Technical Assistance Project for Urban Management and Rehabilitation. 1.14 Local governments (communes) are also in place in most other cities and are experiencing financial constraints, albeit of a smaller magnitude. Thirty-one "communes' are currently operating in Senegal (including Dakar, Pikine and Rufisque-Bargny), of which the nine regional capitals (Chef-lieux de Regions) except Dakar are Ocommunes a statut special' administered by an "Administrateur Municipal' appointed by the central Government instead of an elected mayor, and the remainder (22) are "communes de plein exercice" with elected councils and mayors. 1.X5 Within the Ministry cf Interior, the Directorate of Local Communities is basically in charge of supervising local government on behalf of the Government. This department plays also an important role in advising local officials and is active in fostering municipal institutional strengthening with special emphasis on secondary cities. As a first step, a comprehensive survey has been carried out to assess the financial situation and the major development problems of most of the secondary cities. 1.16 The Municipal Code currently in force is comprehensive and provides a legal framework which is relatively satisfactory for municipal development. Nevertheless, some issues are still pending, especially in the Dakar area, as to the distribution of responsibilities among tine local g-*ernments, CUD, the central Government and the parastatals. Basic local responsibilities are maintenance of infrastructure and local public facilities (including some primary school buildings and health facilities) and delivery of urban services such as security, street cleaning and solid and liquid waste management. 1.17 However, Dakar's street network is partitioned into national roads which are constructed and maintained by the Ministry of Equipment and municipal roads under the responsibility of CUD. Traffic management and public transport policy are currently the responsibility of the central Government, namely the Ministry of Equipment, where the recently created Traffic Bureau is temporarily located. A parastatal (Societe Industrielle d'Amenagement Urbain du Senegal (SIAS) ) was also created in 1985 and given the responsibility of garbage collection under contract by CUD. 1.18 Municipal resources are in accordance with the most common scheme of Francophone countri3os: fiscal resources are assessed, billed and collected by local branches of the Ministry of Finance on behalf of local governments, whereas fees are administered by local governments but collected under the authority of the Municipal Treasurer who reports to the Minister of Finance. Dakar's; most significant resources are the business tax (patente) which currently yields 382 of total resources, the property tax (162), the poll tax or minimum fiscal (152) and the market fees (12%). The rest of the local governments' income comes from many sources, each of which has a very low yield. The lack of efficient registration of tax liabilities is the main constraint that hinders revenue increase, whereas revenue collection is steadily improving as a result of measures implemented within the framework of the Technical Assistance Project for Urban Management and Rehabilitation. D. Long-term Plan for Municipal Development 1.19 The current view of local authorities features a very extensive definition of municipal responsibilities. The Municipal Code is based - 6 - on the classic French municipal legislation, which states that a city should take care of the vell being of its citizens but does not provide precise guidelines and clear definitions as to the extension of this responsibility. In this context, most municipal assets, the maintenance and operation of which generate the bulk of the municipal expenditures, are the result of historical circumstances rather than of Investment planning. Dakar, for Instance, operates a municipal hospital, several health centers and 34 primary schools, whereas its resouces are hardly suited to basic Infrastructure maintenance. However these expensive facilities are politically important as they witness the city's commitment to social services. 1.20 Comprehensive planning of long-term municipal development should thus emphasize gradual rationalization and clearer demarcation of roles and responsibilities of central and local authorities. Cure municipal functions should encompass street cleaning, garbage collection, infrastructure maintenance, market operation and maintenance, traffic management, urban development planning and some administrative services to Individuals such as "etat civil' (birth and death registry) or vaccinatiou certificates. Health facilities should fall under the central Government's authority, whereas some local public facilities such as public latrines, homeless shelters and playgrounds could be taken care of by neighborhood committees with minimal Involvement and support from the local governmont. 1.21 On the resource side, administration of local taxes by the central Government is no longer suited to Senega6's situation. This scheme, inhorited from the French, was justified when local taxes were additional taxes levied on the same base as national taxes. Currently* In France, taxes levied by various authorities (regions, departements et communes) are based c; the same tax base and therefore their united administration results in economies of scale. But in Senogal, municipal taxes are no longer shared with the central Government or with other territorial authorities. In addition, tax officers who do not report to local governments have little motivation for efficient administration of local taxes, the yield of which is marginal as compared to national taxes. Therefore, local autonomy of rovenue administration should be one of the long-term objectives of municipal development. 1.22 However, the reforms involved in a better delineation of local responsibilities and in decentralization of revenue administration cannot be implemented in the short-term. Municipal agencies need first to be strengthened in order to carry out their current duties (infrastructure maintenance) efficiently prior to taking over now responsibilities (traffic management or urban planning). After Implementation of these improvements, the surrender of conspicuous facilities such as the hospital is more likely to become politically acceptable. Likewise, improvement and strengthening of the local governments' administrative capability as well as that of the services to be transferred would be a prerequisite to successful decentralization of revenue administration. More generally, rehabilitation of physical assets and strengthening of service provision should also be considered as prerequisites to any proposod redistribution of responsibilities. - 7 - E. Housing Demand and SUn9X 1.23 Until the early 1970s, the predominant system of housing supply In urban areas was provided by public housing programs. Shortage of external financing as well as inability to cope with Increasing demand resulted in the collapse of this system despite tentative reform (paras. 1.08 to 1.10). Within the last five years, only 92 (approximately 700 housing units per year) of the total housing supply in Dakar were provided by planned programs whereas 912 (3,600 owner- occupied housing units and 3,300 in rental units) were constructed by owners or by small-scale informal enterprises (self-help construction). 1.24 Expected annual demand in the Dakar area for the period 1987-92 will be approximately 10,000 units, of which 3,600 will be in new sites and 6,400 in already urbanized areas (densification). From this expected demand, 432 is directed toward rental units which are mainly provided by extensions of owner constructed houses. Only 82 of the total demand is expected to be supplied by planned programs. 1.25 Planned housing programs were successful firstly in promoting housing models which provide widely accepted standards in terms of durability, health and service features, snd secondly in mastering development of some sensitive urban areas. The main shortcoming of these programs is their inability to supply affordable housing to a broad spectrum of the urban population. 1.26 Conversely, self-help construction Is, by nature, flexible and spontaneously supplies products that match demand. Moreover, the quality of housing produced is by and large satisfactory as lessons learned from public programs are widespread, whereas costs are roughly half those of comparable housing produced by planned programs. 1.27 However, self-help construction has certain drawbacks which need to be addressed: (a) land tenure is most often illegal and does not provide adequate security to owners; (b) land use is far from efficient with anarchical settlement and low densities; (c) land development and plot servicing are typically poor and 'ex post' servicing is difficult and costly; and (d) more than 502 of the projects Are carried out gradually over a long period of time (more than 40 months) and result in sub-optimum use of financial resources involved. F. Land Tenure and Related Issues 1.28 Theoretically, the laws of 1964 and 1976 on the National Domain and the Public and Private Domain of the State should have brought about a clear land tenure system in Senegal. However, because of traditional customs, political pressures and inability to cope with illegal, settlement, the real land market is no longer under control. - 8- 1.29 According to the law, only titles registered in the 'Livre Foncier" are legally valid. This applies both to private ownership and to state ownership (Public and Private Domain of the State). Only 1X of the land is legally titled. The rest constitutes the National Domain which cannot be appropriated except through a cumbersome procedure that involves titling in the name of the state (Private Domain) as a mandatory step. However, courts acknowledge every day that illegal occupants of the National Domain have a right to indemnification. Moreover, because of the pressure of demand, the Government itself acknowledges that administrative deeds such as ubaux emphyteotiques", occupancy permits and administrative certificates are valid titles even for non-registered plots. 1.30 In order to implement public housing programs, the Government utilizes pre-emptive right and expropriation, but shortage of resources often leads to uncompleted procedures and messy land tenure status. 1.31 All legal procedures involve huge delays (over five years in some cases) because of lack of effective human resources in the Directorate of Domains. As a result, even notaries who are legal intermediaries of every transaction tend to give up legal procedures. The existing registry system, although theoretically satisfactory, is actually not reliable. 1.32 Within this context, the land development activity has never become attractive to the private sector despite the potential huge demand for serviced and titled plots. Development projects are driven by the scarce planned hous.ng programs and never meet the needs of self- help construction. 1.33 Most of the above issues stem eventually from a Government policy which until recently did not encourage private appropriation of the land. Particularly, the administrative inefficiency is less the result of manpower constraints than of a lack of political will to enforce the existing legislation. Likewise, the land tenure legislation iteself, which has been often criticized, is in fact well suited to the development of private ownership of the urban land if all provisions of such legislation are actually put into effect. Therefore, the Government commitments which will be embodied in the creation of a land development corporation (para. 1.11) will bring about dramatl policy changes which are likely to result in substantial improvementb of the land tenure registration system. In addition, the implementation of a fiscal cadastre (para. 2.05 (d) ), albeit not primarily intended to improve land tenure registration, will nevertheless supply the "service des domaines' with an efficient tool for this purpose. G. Financial Constraints to Housing Supply 1.34 Given the current pattern of housing demand and supply, improving existing systems would be more efficient than trying to implement radical changes. Self-help construction is likely to meet the -9- bulk of demand provided that measures are taken to remove the constraints listed (para. 1.27). 1.35 Among these constraints, inefficient financing systems result in slow housing construction and additional costs. The banking system has an insufficient impact on self-help construction financing for several interrelated reasons: (a) in accordance with the regulations of the Western Africa Monetary Union (Union Monetaire Ouest Africaine (UMOA) ), the Government. has a policy of severe credit restriction which does not aUlow the banks and especially BHS to increase their outstanding loans annually by more than a few percentage points (2.332 in 1985 and 22 in 1987); (b) as a result, selection of borrowers is particularly tough and only wage earners, still a minority of urban residents, are actually given loans; (c) banks cannot commit themselves to future loans as would be required by an efficient saving scheme (plans d'epargne- logement). This prevents banks and especially BHS from collecting potential savings and constrains their resources; (d) housing loans are considered an unattractive product by most banks which are not given the opportunity of learning how to efficiently manage such small and long-term loans. As a result, BHS has a 'de facto' monopoly, but as a recently created institution (1980), it still lacks the resource base to meet the demands; and (e) due to a further UMOA regulation, Central Bank re- financing is not available for loans uith a maturity beyond ten years. This is too short for making housing loans affordable to most potential users. BHS has been able to offer 15 year loans since a large share (802) of the Government's Fund for Housing and Urban Improvement (Fonds d'Amelioration de l'Habitat et de l'Urbanisme (FAHU) ), which is in the order of CPAF 1.3 billion annually, was transferred to BHS as a free resource. However, this resource will shrink in the near future and BHS cannot be expected to keep avoiding Central Bank re- financing. H. The Bank's Previous Role 1.36 The first Urban Project (Sites and Services Project, Credit 336 SE) focussed on housing and its target was to achieve, through the delivery of 14,000 serviced plots in Dakar and 1,200 in Thies, the following objectives: (a) support Government's withdrawal from direct - 10 - housing financing and increase owner occupancy; (b) diversify supply and concurrently broaden demand; and (c) demonstrate the effectiveness and replicability of sites and services projects and build institutions capable of pursuing and replicating such projects. 1.37 The Second Urban Project (Technical Assistance Project for Urban Management and Rehabilitation, Credit 1458/SF-13 SE) was undertaken as a pilot endeavor dealing with issues related to the main urban area of Senegal, the Dakar region, end aiming both at gaining insight into overall urban sector issues and at improving comprehensive management of Dakar (housing, transportation, services, etc ). Studies carried out under this proje4t provided the framework required to draw up a more comprehensive strategy for the urban sector, as well as to help address the most urgent issues of Sonegal's capital city. This project also includes an action plan consisting of a schedule of decisions to be made by the Government as key steps in the implementation of a new urban policy. 1.38 The performance of these two projects has been on the whole satisfactory. The Sites and Services Project has been successfully -completed (PCR No. 4768 and no PPAR); it has been instrumental in developing a more realistic housing policy; it brought about significant improvements of housing affordability by the less wealthy people; new projects, which are currently being prepared, provide evidence of reasonably successful institution building; each IDA dollar will have generated about US $1.8 of public funds and about US $8.2 in private investment; and the project has a recalculated economic rate of return of 19S. The Second Urban Project is currently under execution. To date, study findings have met objectives and the action plan is being carried out roughly as scheduled. II. THE PROJECT A. Proiect Oblectives 2.01 The project has two major objectives: (a) strengthening local governments (particularly in metropolitan Dakar) to improve policy making, service delivery, urban investment and resource mobilization; and (b) expanding the economic impact and efficiency of the housing sector bys (i) removing financial and institutional constraints to BHS; sad (ii) improving the operation of the urban land market through annual supply of a significant number of serviced and titled plots while promoting progressive privatization of the delivery of housing. 2.02 The municipal development objective is to a large extent a follow-up of the Second Urban Project with more emphasis on rehabilitation of urban assets and on a comprehensive approach to resource mobilization. - 11 - 2.03 In the housaing sector, the objective is to help address most of the Issues (para. 1.27) while encouraging the Government to move effectively toward privatization. Whereas significant policy changes are at stake, the project should not result in exceossive disruption in housing supply conditions. The new policy would be built upon current trends (predominant role of self-help construction) and would bring about a gradual withdrawal of the Government from the supply of housing along with a gradual take over by the privato sector. Private finms are already quite capable of lncreasing their activity In housing construction but are generally not yet prepared to tackle efficiently all Issues related to land dev4lopment. Therefore, the Government still needs to foster temporarily initiatives in this latter activity. B. Prolect Descrlition 2.04 The project consists of two components: municipal management and housing (a detailed descrlption of the project components is In Annex 1). Mnnicial Mana8ement Component 2.05 The municipal management component is composed of four sub- components, all of which would ultimately benefit CUD. It would be implemented partly by CUD and party by the central Goverrmont (Ministry of Interior, Ministry of Equipment and Ministry of Economy and Finance): (a) A Municipal Credit Fund (MCF) administered by BUS would be created for medium-term lending on comercial terms (BCEAO's regular discount rate plus two points, currently 10.52) for municipal income gonerating projects such as market rehabilitation and construction. Initial financing of this fund would be provided by IDA for CFAP 1 billion (US $3.3 million) and by the Government through a share of FrCL's monies. FECL would also finance, on a temporary basis, a share of interest owed by borrowers in order to alleviate their debt service (bonification). Total FEIL contributions over the period of the project oxecution would be CFAF 3.4 billion (US $11.3 million). This would allow for a lending program that wuld increase from CFAF 750 million (US $2.5 million) in 1989 to CFAF 1.1 billion (US $3.7 million) in 1994. Local governments throughout the country aro potential beneficiaries of this sub- component. (b) CUD'S Technical Department would be strengthened and supported through the financing oft (1) civil works equipment, mainly for road maintenance, at a total base cost of CFAF 955 million (US $3.2 million); (ii) extension and remodeling of technical facilities (base cost: CFAP 240 million or US $0.8 million); (11i) 72 man-months of technial assistance (base cost: CPAF 252 million or US - 12 - $0.8 million); (iv) a training program at a total base cost of CFAF 48 million (US $0.16 million); and (v) the remodeling and equipment of selected community facilities at a total base cost of CFAF 7'5 million (US $2.6 million). This sub-component would follow-up efforts started under the Technical Assistance Project for Urban Management and Rehabilitation. (c) The Traffic and Transport sub-component would primarily aim at improving public transport operation. This would includes (i) continuation of support to the Traffic Bureau through financing of 96 man-months of technical assistance (two experts over four years); (ii) rehabilitation of CUD's main collector roads (68 km) for a total base cost of CFAF 1 billion (US $3.3 million); (iii) implementation of a traffic management plan (plan de circulation) in the central Dakar area (plateau) for a total base cost of CFAF 705 million (US $2.3 million); and (iv) improvement of key junctions and selected sections of the national urban road network in Dakar for a total base cost of CFAF 1.8 billion (US $6 million) as identified in the Priority Action Plan (PAP) proposed by the Traffic Bureau under the Technical Assistance Project for Urban Management and Rehabilitation. (d) The Municipal Resource Mobilization sub-component would provide the basis for improved collection of municipal taxes through the implementation of a fiscal cadastre in the Dakar metropolitan area. This would support earlier efforts undertaken by the Tax Administration and Treasury to improve tax billing and collection and would focus on expanding the existing tax base by: (i) organizing and unifying property and business registry and valuation; and (ii) modernizing computerized processing of tax bills. This would entail radical changes in the allocation of responsibilities among services under the authority of the Minister of Economy and Finance with increased autonomy of the "Direction du Cadastrea for automatic data processing. The total base cost of this sub-component including studies, software and hardware purchase and technical assistance involved in the implementation of the new procedures of data processing is CFAF 1.55 billion (US $5.2 million). Housing Component 2.06 The two sub-components of-the housing component, the creation of a land development corporation and the financing of a long-term loan to BHS, are strongly interrelated. The creation of a land development corporation has the underlying objective of substantially improving the functioning of the land market and the supply of legally developed housing. This cannot be achieved if the financing offered by BHS remains constrained by the currently prevailing restrictions in BHS' annual increase of outstanding loans: 13- (a) The project would support the starting period of an ongoing program of land development for servicing and titling of approximately 1,800 plots annually (40% of the estimated demand). The target group of potential purchasers would be a wide range of households (40th to 90th percentile) and prices would reflect actual costs in order to match demand and avoid as much as possible the acquisition of low cost plots by middle or higher income households. A land development corporation will be created in the form of a public-private joint venture (societe d'economie ml.xte) with a majority of private shareholders. Public shareholders would be CUD, housing construction parastatals and public utilities. The rationale for their participation would be their involvement in the corporation's activity rather than financial investment. Covenants would be attached to the sale of developable land by the Government and parastatals, and a tripartite agreement would be signed between the Government, BHS and the corporation so as to ensure aa much as possible that the support provided by the project would actually be utilized for the Implementation of the proposed land development program. A medium-term loan for a maximum amount of CFAF 2.5 billion (US $8.3 million) on strictly commerclal terms, in order to avoid any privilege which would discriminate against potential competitors, would be granted by BHS to the corporation to help finance the gap of the corporation's initial stage. This loan would be financed by BHS from its own resources as BHS' contribution to the financing of the project, in return for the CPAF 4 billion in long-term which BHS would receive under the second sub- component (2.06 (b) ). (b) The project would also finance a CFAF 4 billion (US $13.3 million) loan from the Government to BHS, to help remove bottlenecks preventing BHS from increasing its share of housing construction financing. More specifically, the project would help BHS increase its annual lending from 1,000 to 1,500 housing units and initiate lending activities with self-help builders, especially those who will purchase plots produced by the new land development corporation. Concurrently, BHS would develop its resource mobilization efforts in several new directions by: (a) creating various flexible saving schemes to match the diversity of household needs and saving capabilities; (b) extending the average saving period requested prior to loan application; (c) issuing new bonds on thae money market; and (d) utilizing Central Bank re-financing. The proposed loan from the Government to BBS would be at the Central Bank privileged discount rate ( (TEP) currently 6%) with a maturity of 25 years and a ten year grace period. Proceeds of the loan to BHS would be disbursed each year against evidence of effectiveness of 15 year -14- loans to purchasers or self-1'elp builders for the production of very low cost, low cost and medium standard housing (BHS standards). Disbursement would start each year when the total amount and the total number of loans granted during the year vould have reached the annual thresholds presented in the following table. It would cover 15 year loans granted during the year beyond the thresholds. The cumulative amount disbursed (calculated from project inception) should not exceed at the end of the year the maximum also presented in the table (CFAF million): Thresholds Max$mum cumulative of effective loans volume of loans Year for the current year to be financed Number Mount 1 800 2,900 2,000 2 900 3,400 3,000 3 1,000 4,000 4,000 4 1,000 4,200 4,000 5 1,200 5,200 4,000 Financed by external resources, the loan. financed by the project would be authorized beyond the limitations on the annual Increase iA outstanding loan. currently in force. C. Rationale for Bank Groun Involvement 2.07 The Government has requested IDA's assistance to tackle the various issues related to the gradual shift from the central Government's directly administered urban and housing policy to a more decentralized and private sector oriented policy. The current dialogue botweon the Government and the Bank Group emphasizes reshaping the role of the Government toward less direct involvement in economic activities and improved administrative efficiency. This Is expected to improve the use of scarce public resources and to contribute to solving Senegal's current financial crisis. In this context, urban policy is a particularly sensitive issue as it is crucial for future development to foster efficient urban centers. At the same time, the Government cannot afford to keep providing massive financial support to housing, urban infrastructure development and maintenance and urban service delivery. The project would help implement the new urban policy and alleviate the strain of urban development on public resources. 2.08 The project would follow-up previous IDA endeavors and specifically the Tehneical Assistance Project for Urban Management dan Rehabilitation that provided the studies and recommendations on which the project is based and the Sites and Services Project, which already focussed on a program of housing policy reforms. D. Status of Prolect Pregaration 2.09 On the basis of studies carried out within the framework of the Technical Assistance Project for Urban Management and Rehabilitation, the Government submitted to IDA on January 12, 1987, an Identification Report which provides a comprehensive description of the Senegalese views about the project. Since then, the project preparation has progressed significantly on the following aspectst (a) all arrangements, contractual agreements and amendments to existing legal texts pertaining to MCF's creation have been drafted and agreed upon In principle by the concerned agencees; (b) the list and cost estimates of equipments and works pertaining to CUD's technical department strengthening have been revised, a reorganization of this department has been proposed and de facto Implemented but still needs to be formally enacted by CUD's committee, and the terms of reference of the technical assistance (Annex 6, para. 8) have been agreed upon allowing for immediate call for bids upon Credit effectivenessl (c) the economic analysis of the proposed rehabilitation of CUD's main collector road was carried out including collection of the necessary data; (d) the detailod design of the proposed fiacal cadastre has been carried out; and (e) negotiations on the various arrangements to be agreed upon prior to the creation of the land development corporation were completed with potential shareholders, Goverament agencies involved and public utilities. The following tasks are to be carried out prior to starting implementation of the related project components: (i) detailed engineering of the building and facility rehabilitation works; (ii) preparation of bidding documents for the road rehabilitation works; (iii) installation of geodetically referenced control points by the Direction du Cadastre, execution of aerial photography, preparation of bidding documents for the aerial triangulation, the digitized stereoplotting of the residential area and the supply of equipment; and (iv) detailed engineering and preparation of the bidding documents for the first land development projects to be implemented by the land development corporation. S. Prolect Costs and Financing 2.10 Prolect Costs. The project costs are estimated at US $78.3 million (CPAF 23.5 billion), including taxes and duties of US $8.1 million (CFAF 2.4 billion). The estimated foreign exchange component is US $29.0 million or 371 of the total cost. Base cost estimates are in .mid-87 prices. Physical contingencies amounting to an average of 10.92 of base costs are included (the share of Credit proceeds on-lent to BHS for the Municipal Credit Fund and for the housing component does not involve physical contingencies). Price contingencies have been estimated at 5.9S of base costs at annual rates as follow:s -16- 1987 1988 1989 1990 1991 1992 1993 1994 Local 6 6 6 6 6 6 6 6 Foreign 1 1 1 1 3.5 3.5 3.5 3.5 The Disbursement Schedule follows the standard disbursement profile for urban investment and maintenance loans in the former Western Africa Region. A summary of cost estimates is presented in Table 2.1. Detailed project costs are provided in Annex 2. Table 2.1s Estimated Costs Foreign Local Foreign Total Exchante ---- (US $ million) --- Al. Municipal Credit Fund 10.2 4.4 14.7 30 A2. CUD's technlcal services 5.9 4.5 10.4 42 A3. Transport and traffic 7.5 7.9 15.4 51 A4. Resource mobilization 4.1 2.6 6.6 39 El. Land development 4.6 2.5 7.0 35 B2. Housing finance 9.3 4.0 13.3 30 C. Project Unit 1.9 0.3 2.2 14 Base costs 43.5 26.2 69.6 37 Physical contingencies 2.7 1.9 4.6 41 Price contingencies 3.3 0.9 4.1 22 Total project costs 49.3 29.0 78.3 37 2.11 Financing. The proposed IDA Credit of US $46.0 million would finance approximately 65Z of project costs net of duties and taxes. This would cover approximately US $21 million of foreign costs and US $25 million of local costs. A local contribution of US $29.6 million would encompass the Government's financing of all duties and taxes (US $8.1 million), US $11.3 million reallocated from FECL to MCF and a net Government contribution to other components totaling US $1.8 million. This would also include the financing of the land development corporation by EHS of US $8.3 million. A US $2.7 million contribution to the financing of the technical assistance is expected from the Canadian International Development Agency (CIDA), although co-financing is not yet finalized. The proposed financing plan is as follows: Table 2.2s Financing Local X plus of total taxes Foreign Total project cost Government 17.9 3.4 21.3 27 BHS 5.4 2.9 8.3 it IDA 25.3 20.7 46.0 59 CIDA 0.7 2.0 2.7 3 Total project costs 49.3 29.0 78.3 100 - 17 - F. Imolementation Schedule and Resoonsibilities 2.12 A Project Unit will be established within the Ministry of Plan and Cooperation to perform administ:ative and financial coordination of the project. This will encompass calls for bid (technical bidding documents being prepared by implementing agencies concerned), awarding contracts, contract management, consolidated accounting, disbursement monitoring and report supervision. During appraisal, it was agreed with the Government that this Project Unit would be established by expanding the existing Project Unit in charge of the Technical Assiatance Project for Urban Management and Rehabilitation. This would include the hiring of one confirmed accountant and two civil engineers. 2.13 BHS will play a key role in the housing component as it will intermediate financing for the land development corporation and be the direct beneficiary of the credit line for housing loans. In addition, BHS will be in charge of MCF within the framwork of a contract with the Government. Separate accounting will be kept for MCF. 2.14 CUD will be the technical implementing agency of the sub- component (b) of the municipal management component and associated to the technical implementation of the part of the sub-component (c) which concerns the improvement of CUD's roads. 2.15 The Ministry of Equipment through the Traffic Bureau will implement the main part of the sub-component (c) of the municipal management components support to the Traffic Bureau, central Dakar's traffic management plan and the improvement of urban national roads. It will also implement the part of the sub-component related to CUD's roads in association with CUD's technical department. 2.16 The Ministry of Finance, General Directorate of Taxes, Cadastre and Domains, will be in charge of implementing the municipal resource mobilization sub-component including the fiscal cadastre in liaison with the Directorate of Treasury (tax collection) and the local governments. 2.17 The Government expects to carry out the project within four years, but given past sector and region experience, such a project is more likely to be executed over a period of six years including a nine month start-up period between Credit approval and the beginning of disbursements. G. Procurement 2.18 A detailed table of procurement arrangements is in Annex 7. Civil works would be procured through international competitive bidding (ICB), except in cases where the size of individual contracts would be too small to be attractive for ICB procedures. This would include small projects of remodeling or rehabilitating community facilities, the most part of which would be executed by CUD's technical department through -18- force account (regio directe). A few of them might be procured through local competitive bidding when the size of works on one single building will allow for contracting out (Annex 1, para. 15). 2.19 Equipment, where possible, would be grouped Into packages large enough to attract bids under ICB. However, contracts for furniture, materials and equipment too small to warrant ICB procedures (less than US $200,000 each) would be procured under LCB. For very small procurement items (less than US $10,000 and up to a maximum aggregate amount of US $400,000), competitive shopping procedures would be utilized. 2.20 Consultant services for training and technical assistance would be procured according to the Bank's guidelines. 2.21 Bidding packages for goods totalling US $40,000 and over would be subject to IDA's prior review of procurement documentation. For contracts awarded following ICB procurement, goods manufactured locally would be given a preference margin of up to 152 or the applicable Import duty, whichever is lower, and local contractors would be given a preference of 7.52 in the evaluation of tenders for civil works. Table 2.3: Procurement Procurement Method Total Proiect element ICB LCB Other N.A. Cost ----- (US $ million) ----- Civil works 18.06 3.82 21.88 (13.75) (3.58) (17.33) Vehicles, furniture and equipment 7.52 2.30 0.15 9.97 (4.42) (1.68) (0.10) (6.20) Consultant services 8.43 8.43 (4.10) (4.10) Operating costs 0.37 0.37 (0.37) (0.37) Refunding PPF and unallocated 1.33 1.33 (1.33) (1.33) Credit (MCF and housing loans) 36.33 36.33 - (-.67) (16.6Z) Total 25.58 2.30 13.74 36.71 78.32 (IDA Credit) (18.17) (1.68) (9.12) (17.0f ) (46.00) Notes Figures in parentheses are the respective smounts financed by the Association. - 19 - H. Disbursements 2.22 The proposed IDA Credit is expected to be totally disbursed by June 30, 1995. The part of project costs related to the financiug lntermediated by BHS Is expected to be disbursed according to the following timetables Table 2.4. BHS Intermediation - Schedule of Disbursements FY 89 FY 90 FY 21 FY 92 FY 93 FY 94 ------------ (US $ million) ------_------ Municipal Credit Fund's contributionn 0.7 0.7 1.0 0.7 0.2 0.2 Housing loan 8.0 3.8 1.5 Civil works and technical assistance will be spread over the entire period of project execution. Civil works equipment purchase is expected to be disbursed in FY 90. All disbursements would be fully documented except for payments against contracts of lses than US $40,000, MCI loans and housing loans uhich would be disbursed against statements of expenditure with the underlying documentation held available locally for inspection by £DA's supervision missions and audited annually. For eligible MCF loans to local governments and for eligiole housing loan, disbursements would bo made on the basis of 1002 of total expenditures. For civil works related to rehabilitation of public facilities and technical buildings carried out by CUD's Technical Department, for ecquisition of equipment and vehicles, and for operating costs of the Project Unit and consultant services for the Project Unit, disbursements would also be made on the basis of 1002 of total expenditures. For all 'other expenditures, disbursements would be made on the basis of 1001 of foreign expenditures and 802 of local expenditures. 2.23 To make Credit funds available in a timely manner and to expedite project implementation, three Special Accounts respectively in the name of (i) Banque de l'Habitat du Sonogal, Municipal Credit Fund, (iL) Ministry of Plan and Cooperation, Municipal and Housing Development Project, and (Ili) Banque de l'Habitat de Sonogal, Housing Component of the Municipal and Housing Development Project, would be established In a commercial bank and a "caisse d'avance in the Tresury would be created for the Government's counterpart contribution. Initial advances in ClAF equivalent to US $166,000, US $750,000 and US $1 million (approximately three months' withdrawals), respectively, wuld be deposited from the IDA Credit in these Special Accounts. The Special Accounts would be replenished on the bseis of the Government's withdrawal requestos Relibursements would be aggregated into applications of not lses than US $50,000 (US $100,000 for the third Special Account) for submisslon to IDA. The Special Accounts and the local account would be operated under terms and conditions acceptable to IDA which would be agreed upon at negotiations. The Government would be responsible for roimbursing the Special Account for any expenditure not acceptable to IDA. The opening of the caisse d'avanceM and the Initial depoit of CFAP 40 million (US $130,000) would be a condition of effectiveness. -20- I. Accounting. Auditina and Reportina 2.24 Consolidated project accounts would be maintained by the Project Unit. BHS will maintain separate accounts for the Municipal Credit Fund and record all information related to housing loans financed by the proceeds of the IDA Credit. BHS, the Ministry of Equipment and the Ministry of Finance will maintain separate accounts for the project components under their responsibility and provide the Project Unit with necessary accounting data for consolidation. BHS, the Municipal Credit Fund and the projects' consolidated accounts would be audited annually by independent auditors acceptable to IDA according to terms of reference agreed by IDA. Auditors would express separate opinions on statements of expenditures. The projects' accounts and the auditors' reports would be submitted to IDA within six months of the close of each fiscal year. The Project Unit would submit quarterly progress reports and prepare a project completion report within six months of the closing date. CUD will furnish IDA, through the Project Unit, no later than six months after the close of each fiscal year, with an activity report including suitable justification on the program of public facility rehabilitation and maintenance completed by the technical department. J. Financial and Economic Analysis Financial Analysis 2.25 MuniciDal Credit Fund (MCF). There is no definite method of assessing the appropriate target of MCF's annual lending. On the one hand, local governments' investment needs are potentially huge and far beyond their indebtedness capacity. On the other hand, as demanding criteria will be utilized or selecting eligible projects, the first lending programs might prove difficult to allocate. The estimates have been drawn up on the basis of a 20X ratio between the capital and operation budgets. Among potentially eligible projects, Dakar would give priority to market rehabilitation. A CFAF 2.8 billion program has been proposed to be carried out over a four year period. A second program could follow as the total estimated cost of market rehabilitation in the Dakar area is close to CFAF 4 billion. Dakar would thus apply for an annual CFAF 700 million borrowing. On this basis, the estimated total annual lending would be in the order of CFAF 1.5 billion. The simulation of MCF's financial statements (Annex 5, Table 1) is based on the following assumptions: (a) annual lending program increasing gradually from CFAF 750 million for the first year to CFAF 1.6 billion for the twelfth year; (b) FECL contributing CFAF 3.7 billion over seven years (CFAF 3.4 billion - US $11.3 million - over the period of the project execution) plus 4.5X interest "bonification' (annual total contribution of CFAF 600 million over five years). Under these assumptions, the estimated need of initial financing from the IDA Credit is CFAF 1 billion (US $3.7 million). An interesting indicator of MCF's efficiency is provided by the ratio between MCF's annual lending capacity and FECL's annual contribution since FECL is the only permanent resource involved in the system. This ratio increases from 1.25 during - 21 - the first year (impact of the IDA Credit) to 5.6 after 12 years. It is expected to reach 2.6 by the end of the project execution period. 2.26 Fiscal Cadastre. Through Improved registration and billing, the proposed fiscal cadastre is expected to bring about substantial Increase in property tax yield (currently at CFAF 1.5 billion). This increase could reach 50X after the first year and 100X after the second year of Credit effectiveness. For the business tax (patente), the expected yield increase would be less in relative terms (25% for the first year and up to 50% after the second year) but similar in absolute terms as the 'patente's" current yield is CFAF 3 billion. Overall, an additional CFAF 1.5 billion cab be expected one year after the cadastre implementation and an annual CFAF 3 billion for the following years. Therefore, the financial rate of return for the cadastre sub-component would theoretically be very substantial (942 over eight years including the cadastre implementation). This would ultimately depend, however, on a sustained effort to improve tax collection according to the measures undertaken as part of the Technical Assistance Project for Urban Management and Rehabilitation. The yield could also depend on a revision of the existing lenient policy of exemption from property tax. 2.27 Communaute Urbaine de Dakar (CUD). CUD does not collect any direct income on a regular basis. Local taxes in particular are collected by the 'communes". CUD relies on transfers from the 'coumunes" to cover its expenditure. Therefore, the comprehensive analysis of the project's financial impact on local budgets has been carried out on the basis of a consolidated budget of the three "communes' and CUD. Accounts have not been maintained with satisfactory efficiency, accuracy and consistency since inception. Figures for the past three years are thus not fully reliable and sometimes impossible to reconcile whereas older figures relate to the former 'commune de Dakar' and are not consistent with the current organization of the local governments. Annex 5, Table 2 summarizes firstly the anticipated evolution of consolidated income and expenditure in the absence of the project and secondly, the impact of the project's various components on medium-term budgets. Precise projections are impossible in such matters and all figures should be considered as indicative: (a) Without the project, tax yield would not be expected to increase by more than 12 per year from its current level of roughly CFAF 6.5 billion annually. Market fees (currently at CFAF 1.1 billion) would increase by 5% and other income (currently at CFAF 0.9 billion) by 42, mainly as a result of population growth. A conservative projection for expenditure (5% annually for recurrent expenditure and 02 for capital budget) would result, in this income context, in repeated deficits in the medium- term (after FY 91) In addition, it should be taken into account that apparent surpluses shown by actual figures for the past three years result primarily from accounting deficiencies on the expenditure side. These surpluses are not available but generally committed or even disbursed without appropriate recording. Therefore, anticipated deficits will not be balanced by cumulative surpluses. - 22 - (b) Project Impact on Income Is threefold: (I) the tax yield increase generated by the fiscal ¢adastre Is expected to be of the order of CPAF 3 billion annually with gradual Implementation over fiscal years 1991 and 1992; (IL) the rehabilitatio: of Dakar's markets that would be financed by MCF loans would gradually bring about an increase of market fees yield which could reach 402 at the end of the process; and (Lit) CUD would borrow an annual CFAF 700 million from MCF for market rehabilitation. (c) On the expenditure side, the project would bring abouts ($) MCF loans debt service; (it) ongoing maintenance of CUD's collector roads; and (i$4) disbursements for market rehabilitation works which are financed by MC? loans. (d) On the whole, project Impact on the balance of consolidated budgets would become significant around FY 92 and can be expected to reverse the trend from increasing deficits to increasing surpluses, allowing 'lnter alial for improved infrastructure maintenance. 2.28 Land Develoyment Corporation. The corporation's 10-year financial plan (Annex 5, Table 4) has been drawn up on the basis of a reasonably conservative assumption of its market share. The underlying program involves plots for 18,000 owner occupied housing units on a total marketable area of 370 ha (total area developed Is 496 ha). This program Is made up of ten projects including three on each of the first two sites (Grand Yoff and Patte d'O$e), one in Mbao (Pikine area) and three In Rufisque. For each project, timetables have been established for development and sales which Itemise land acquisition costs, servicing costs, studies and marketing expenses as well as sales income. The consolidation of the ten projects provides a series of annual balances (income from sales minus direct development costs) which has the typical profile of any starting land development activity. More specIfically, the first three years show substantial deficits because the main part of the development expenditure for the first projects are disbursed between one and three years before receipt of the related Income. After this starting period, income from previous projects covers the cost of developing new projects, leaving substantial surpluses. After adding the corporation's operation expenditures, the resulting net cash flow has typically the same kind of profile. The main part of the financing needs are thus not for long-term assets but for covering the structural deficits of the first three years. With ongoing activity, the related cumulative gap can be reduced to nil after six or seven years. This is the reason why long-term liabilities such as equity are not the most suitable way of financing this gap. 2.29 The proposed equity is CFAF 600 million, of which CFAF 200 million Is to be mobilized upon creation of the corporation and 400 million two years later. The borrowing need is an estimated CFAF 2.1 billion to be mobilized over three years and reimbursed within the following three years. Over a ten year period, the internal rate of return (IRR) before financing would be 222 and after financing it would - 23 - be 382 (102 interest rate). Results of the sensitivity analyses show that the IRR would drop to 152 if sale prices would be reduced by 102 and increase to 302 with a 102 increase of sale prices. The IRR is also very sensitive to the marketing timing as a one year delay In marketing the plots would result in the IRR dropping to 112. 2 30 Banaue de 1'Habitat du Son;aal (BUS). BHS' current financial situation and lending activity is summarized in Annex 4. The simulation presented In Annex 5, Table 3 sulmarises the expected evolution of BHS' income statements and balance sheets as well as the most common financial indicators until 19#5. The main underlying assumptions of this atmulation, which has beon closely worked out with BHS' management, are the following: (a) BHS will not be abje, given the current credit restrictions, to finance more than 800 housing units in 1988; (b) the project would help raise BHS' lending activity to an annual 1,200 housing units In 1989, 1990 and 1991; (c) after 1991, most credit restrictions would be removed and BUS would be able to gradually increase its activity to 1,500 housing units $n 1994; (d) BHS' liquidity, currently excessive, will be gradually reduced; reallocation of the cash portfolio will provide the source of funds for lending to the land development corporation; (e) savings accounts will increase from a current outstanding balance of CFAF 6.7 billion to CPAP 14.5 billion including ClAP 2.6 billion in 'plans d'epargne-logement" in 1995 (annual average increase of 102); and (f) most interest rates would remain close to their current level (8.52 on 15-year housing loans for instance); however, interest rates on savings accounts would be increased from a current 42 to 52 in order to make them more attractive. Based on these assumptions, BHS would not need new resources (except the IDA Credit) before 1992 when it will start to borrow an annual CFAF 1 billion (1.5 billion in 1993) on the money market (by issuing bonds) and present part of Its eligible loan portfolio to the Central Bank for re- financing. The outstanding portfolio would be CFAF 55,6 billion in 1995 compared with a current CFAF 18.7 billion. BHS' profitability (return on equity) was 13.52 In 1987. Credit restrictions are expected to bring about a drop to II In 1988 and 1989 and to 42 in 1990. In 1991, a new equity 'ncrease is anticipated with profitability remAining close to 42, after which profitability would start to Increase again and would reach 72 by 1995. Economic Analysis (Annex 10) 2.31 Economic rates of return (ERR) were calculated only for the components which produce quantifiable benefits, namely the transport infrastructure Tmprovement sub-components (rehabilitation of CUD's collector roads, the central Dakar's traffic management plan and the tmplemontation of selected components of the Priority Action Plan). The total base cost of these sub-components accounts for CFAF 3.5 billion (US $11.7 million) or 182 of project costs. Data allowing for economic analysis was available at appraisal tile only for the CUD's collector roadso, whereas complementary studies and surveys are currently under execution in order to allow for economic analysis of other sub- components prior to their Implementation. The overall rate of return of - 24 - the rehabilitation of CUD's collector roads is 282 (23Z for Pikine and 322 for Dakar). This ERR is in the upper part of the range observed for similar projects, even though it was not possible to assess all the benefits. 2.32 The approach was the following: (a) cost streams excluded taxes and duties but included: (i) civil works, studies, project monitoring and physical contingencies; (ii) routine and periodic maintenance, the assessment of which was varied according to types of vehicles using each road section; and (iii) the technical assistance cost of the sub-component; and (b) benefits were calculated from vehicle operating cost savings, including estimated gas consumption savings when the speed andlor the traffic flows are improved. Time savings have not been taken into account in benefit calculation. The foreign exchange component was shadow-priced at 0.72 (average standard conversion factor utilized for Bank projects in Senegal). 2.33 A sensitivity analysis was conducted to verify to what extent the rates of return would be affected by possible increases in project costs and/or decreases in benefits although these benefits were calculated conservatively. By exploring combinations of 101 increases and decreases in investment costs, recurrent costs and benefits, respectively, the resulting rate of return varies from 19S to 39%. K. Benefits and Risks 2.34 The municipal management component would have direct economic impact through improved efficiency of the public trassport. Furthermore, improved efficiency of the municipal services is a key aspect of the strategy aiming at enhancing Dakar's role as a regional service center. Improved resource mobilization would not significantly increase the tax bite but distribute it more evenly. A total yield more proportionate to local governments' needs would not only alleviate the direct and indirect strain on the central Government's budget but enable local governments to use their funds more efficiently especially for urban investments and infrastructure maintenance. This in turn would have positive economic impact. 2.35 The housing component of the project is expected to &.vost private supply of housing through a more efficient financing system. Ultimate beneficiaries will be the households who will undertake to build their house and particularly those who will purchase the plots supplied by the land development corporation. However, the most significant impact is economic rather than social. Firstly, the housing construction activity has strong leverage effects on employment, production of local materials and production of various unfinished goods used in the construction process. Secondly, home ownership is a powerful motivation for household savings which are in turn the main source of domestic savings that can be invested in economic growth. An efficient financing system of housing supply will both foster incressed household savings and channel them to efficient investment. Thirdly, - 25 - the proposed scheme does not Involve any Government grant as financing provided by the project will be on-lent on commercial terms. If successful, this is likely to bring about radical changes in the perception of the housing sector within the economy and encourage new private investments in this sector. 2.36 The main risks arise from the involvement of many Implementing agencies (five ministries, CUD, BHS and the land development corporation) and from the difficult related coordination. Efficient project monitoring will require the creation of a strongly skilled Project Unit. 2.37 It should also be pointed out that BHS will play a key role by intermediating most of the financing of the two major components. Whereas BHS' financial situation (Annex 8) and human potential are relatively satisfactory as compared to the rest of Senegal's banking system, BHS is nevertheless a small and recently created institution which might still be fragile. At this point, there is no conspicuous need for technical assistance andlor training, but its performance will have to be closely monitored throughout the project execution. 2.38 Another risk stems from the status of the land development corporation which will be controlled by the private shareholders whose Interest will not necessarily match the project*s objectives. This risk is intrinsically involved in any privatization policy applied to land management. Specific and general contractual arrangements between the Government and the corporation have been proposed for minimizing this risk. 2.39 Training programs and technical assistance are relatively minor parts of the cost of the municipal management component. They are, however, key aspects of its implementation (Annex 6). IIl. AGREEMENTS AND RECOMMENDATIONS 3.01 The following conditions of negotiations have been met by the Governments (a) A decision by the Ministry of Economy and Finance on the reallocation of tax processing responsibilities to the "Direction du Cadastre" in connection with the implementation of the proposed fiscal cadastre as proposed in the study report submitted in early July (Annex 1, para. 31). (b) Agreement by the Government and the Central Bank on measures satisfactory to IDA allowing at least for the maintenance of BHS' current level of activity (roughly 1,000 housing loans per year) over the next three years until the expected overall relaxation of credit restrictions takes place (Annex 1, para. 56). - 26 - 3.02 The following would be conditions of effectivenesst (a) Effectiveness of co-financing arrangements with CIDA (para. 2.11). (b) Appointment of the staff of the Project Unht (pare. 2.12). (c) Signature of a loan agreement between the Government and BHS under terms and conditions acceptable to IDA on the on-lending to BBS of the Credit proceeds related to the housing component (para. 2.22). (d) The establishment of the Municipal Credit Fund under terms and conditions satisfactory to IDA bys (i) creating MCF by decree; (ii) modifying previous larrete interministiriel no 1224 du 25 janvier 1978 sur le Fonds d'Equipement des Collectivites Locales'; (iiI) amending BHS' charter and by-laws as required to permit it to manage the MCFI (iv) signing a contract between the Government and BHS on MCF's management; and (v) implementing every suitable administrative measure to ensure the smooth operation of MCF (Annex 1, paras. 9 to 11). (e) The land development corporation should be legally established with its final charter and equity structure agreed upon by IDA (Annex 1, para. 44). (f) Signature of a tripartite agreement between the Government, BHS and the land development corporation under terms and conditions acceptable to IDA on the implementation and financing of the corporation's 10-year activity program (Annex 1, para. 43). A loan agreement will be signed each year between BHS and the land development corporation pursuant to the tripartite agreement. A model of this loan agreement will be attached to the Tripartite Agreement (Annex 1, para. 52). 3.03 The following would be conditions of disbursements: (a) In regards to MC:s (i) agreement by IDA of a model loan contract to the local governments and of the eligibility criteria proposed by the National Loan committee (Annex 1, para. 11); (it) approval by IDA of the three first projects to be financed by MCF and authorization of the other projects to be financed by MCF out of the IDA Credit (Annex 1, para. 8); and (iiI) during each fiscal year, approval by BUS of a minimum amount of loans to be financed by MCF out of other resources than the IDA Credit (Annex 1, para. 10). (b) In regards to housing loans* (i) agreement by IDA of a model loan contract including specific criteria of - 27 - eligibility to be submitted by BHS for long-term sub-loans to housing purchasers or builders (Annex 1, para. 62); and (i4) during each fiscal year, approval by BHS of a minimum amount and a minimum number of housing loans co be financed out of BHS' own resources (Annex 1, par&. 62). 3 04 The following agreements have been reached during negotiationst (a) The Government will open a 'ca4sse d'avance' in the Treasury under terms and conditions acceptable to IDA (para. 2.23) and make an initial deposit of a CFAF 40 million in this account. Agreement has been reached on the operation of the Special Accounts and of the Icaisse d'avance" (para. 2.23). (b) CUD will furnish IDA, no later than four months after the close of each fiscal year, with an activity report including all suitable justifications on the program of public facility rehabilitation and maintenance completed by the technical department during the year. (c) During execution of the project, the Government is comitted to employ, within the Traffic Bureau, full time staff composed of the chief of the Traffic Bureau, one engineer, three technicians sad two draftsmen (Annex 1, para. 18 and Annex 4, pars. 10). (d) In liaison with the implementation of the fiscal cadastre and no later than December 31, 1989, the Government will carry out a review to determine the fiscal revenue effect of the exemptions set forth in Articles 246 and 247 of the Central Tax Code (Law #87-10 of February 21, 1987) and exchange views with IDA on the results of such review (pars. 2.26). (a) The Government commits itself to take all measures which might be necessary to increaso actual local tax yield in Dakar's metropolitan area by at least 402 within two years of the fiscal cadastre completion (para. 2.26). (f) An annual review of MCF's operation and performance will be carried out by IDA, the Ministry of Economy and Finance, the Ministry of Interior, the Project Unit and BHS by January 31 of each year during the execution of the project (Annex 1, para. 11). (g) No later than June 30, 1992, IDA, the Ministry of Equipment and CUD will review issues Involved in the trassfer of the Traffic Bureau from the Ministry of Equipment to CUD and exchange views with IDA on the results of such review (Annex 1, para. 18). - 28 - (h) The Government comiuts itself to Implement the tripartite agroement with tHS and the land development corporation (cf. 3.02 (g) ). 3.05 Subject to the above conditions, the proposed project is suitable for a Credit of US $46.0 million equivalent to the Republic of Senegal on standard IDA terms. Annex 1 - 29 - Page I SENEGAL MUNICIPAL AND HOUSING DEVELOPMENT PROJECT Detailed Descrigtion of Prolect Components I. MUNICIPAL MANAGEMENT COMPONENT 1. The municipal management component Is composed of four sub- components. A. Municipal Credit Fund (MCF) Backftround 2. The financing of local governmentsO Investments is currently hindered by several ob8tacless (a) the poor performance of revenue collection does not allow local governments to allocate a substantial part of their limited resources to capital budgets; (b) the banking system is not keen to consider lending to local governments as an acceptable risk; and (c) the existing system of the central Government's grants to local capital budgets (Fonds d'Equipement des Collectivitos Locales (FECL) ) only represents an annual CFAP 1.3 billion (unchanged since 1980) for the whole country. A recent decision (June 1987) has been made by the Government to increase the annual amount of FECL up to 2.5 million for the next fiscal year and progressively to 4 million. However, given the overall short supply of budgetary resources, some doubts remain as to the actual implementation of this measure. 3. Efforts to improve the local governments' financial situation were undertaken by the Directorate of Local Communities with the help of the technical assistance provided under the Technical Assistance Project for Urban Management and Rehabilitation (Credit 14581St-13 SE). Although these efforts have been reasonably successful, especially In Dakar, the creditworthiness of most local governments, including Dakar, is still very poor. Therefore, the local governments have no prospects of financing their investments with commercial loans in tho short or medium-term. However, they would have the capacity of servicing a reasonable debt provided that investments to be financed by borrowings would be selected according to appropriate criteria of cost recovery. A prudent development of local borrowings would not entail inacceptablo - 30 - Annex_I Page 2 financial risks if loans were finanoed by FECL, the monies of which Is, in any case, allocated by the Government to local capital budgets in the form of grants. The transformation of part of FECL's monies into loans would allow for recycling funds repaid by the borrowers. This would expand FECL's Impact on resources available for local investments and thus increase the number of economically profitable local projects that would become financially feasible. Description 4. The Government decided to create MCF following recommendations of the feasibility study carried out under the Technical Assistance Project for Urban Management and Rehabiliation. The principles and arrangemonts for the financing and operation of this fund were agreed upon by the Government as follows. S. General Principles. The functioning of MCF would be based on a continuous recycling of funds. This Implies that priority should be given to projects involving fast cost recovery so as to be financially feasible with short or medium-term loans and thus minimise Initial financing needs of the system. 6. The Government would allocate part of FECL to finance MCF. This contribution would be allocated as follows: (a) during the early years of MCP's operation, a large part of the total contribution would be capitablised as a permanent resource of NCF and the rest would finance a share of interest rates (bonification) so as to alleviate the actual strain of debt srvice on local budgets; (b) after six or seven years (approximately thF maturity of the first loans), the contribution would decrease to cover only 'bonification"; (c) eventually the contribution would be dropped when improvements in the financial situation of most of the local governments would allow for them to pay full interest rates. Proceeds of the proposed IDA Credit would support this effort and expand the Impact of FECL's contribution during the early years by approximately 30Z. 7. The management of MCF would be entrusted to an existing financial institution, the National Housing Bank (BHS), which has the skill and ability to fulfill this mission. However, MCF's management would be separate from other IHS' activities and managed within the framework of a specific contract between the Government and BHS. BHS would be financially responsible for the municipal loan management. 8. In order to reconcile the Goverment's desire to control the use of funds of MCF and 8HS' autonomy of decisions on matters involving risks borne by the financial institution, eligible projects would be selected in two steps. Eligibility criteria under the Goverrment's control for the first step would be: (a) satisfactory status of preparation; (b) consistency with the Government's development objectives; and (c) generation of direct or indirect income covering at least expected recurrent expenditures and debt service. The second step - 31 - Annex I Page 3 selection under BHS' control would focus on financial criteriat (t) reliability of cost estimates; (ii) financial situation of the borrower (especially revenue collection performance, indebtedness and dUnt service performance); and (ill) project financial analysis. The ultimate project selection criteria would actually be those of commercial lending, satisfactory financial situation of the borrower and profitability of the project. In order to monitor closely the first steps of MCF's implementation, IDA wotld reviw and approve the first three projects to be financed by MCF. Thereafter, IDA would authorize projects to be financed by MCF out of the IDA Credit on the basis of the information required about each project for the first step of project selection. Among the typical projects which are likely to meet the eligibility criteria, market construction or rehabilitation projects will probably be predominant (para. 12). Other types of projects would include bus and truck stations, slaughterhouses, parking lots, rental facilities for industrial activities and investments to improve resource mobilization (e.g. equipment of tax and fee collection unit.). 9. Institutional arrangements of the proposed contract between BHS and the Goverament would be as followss (a) the Govermnent would create a National Loan Committee (Comite National des Prets) with the same members as FECL's existing Executive Committee plus BHS. The National Loan Committee would be responsible for: (i) allocating annual FECL contribution between MCF's permanent resources and "bonification"; (i1) updating eligibility criteria for the projects proposed for MCF's loans depending on Government development policy; (iii) performing an annual preselection of projects proposed by the local governments; and (iv) supervising and monitoring MCF's operation on the basis of reports presented by BHS; (b) the National Loan Committee would meet at least twice a year; before finalization of municipal budgets in order to preselect eligible projects, and after a first round of project final selection by BHS to complement proselection depending on resources that would remain available at the outcome of the first round; and (c) BHS would establish an MCF Management Committee (Comite de Gestion du Compto de Credit Municipal) composed of BHS' Executive Committee plus a representative of the Ministry of Interior. MCF's Management Committee would have the ultimate responsibility of selecting projects on behalf of BHS, but every rejection would be motivated in writing. 10. Financial Arrantements. The financial arrangements would consists (a) resources allocated to MC? would be kept separate from other BHS' resources and separate accounts would be maintained and annually audited; (b) BHS would remunerate from its own resources the outstanding cumulative transfor from FECL as well as capitalized MCI's previous earnings, which together constitute MCF's permanent resources; the interest rate will be the Central Bank's discount rate (taux d'escompte normal) currently at 8.5%; (c) proceeds of the proposed IDA Credit to be allocated to the initial financing of MCF would be disbursed each year after the total amount of loans granted during the year will have reached the annual threshold presented in the following - 32 - Annex 1 Page 4 table. It would cover loans granted during the year beyond the threshold. The cumulative amount disbursed (calculated from inception) should riot exceed at the end of the year the maximum also presented in the following table (CFAF million)s Thresholds Maximum cumulative of effective loans volume of loans Year for the current Year to be financed 1 400 200 2 500 400 3 700 700 4 800 900 5 1,000 950 6 1,000 1,000 Loans financed by IDA Credits would be recorded separately from other MCF loans; onlending conditions would be the Central Bank's discount rate (taux d'escompte normal) currently 8.5%, maturity of 20 years with a grace period of ten years; BHS would pay interest from its own resources whereas the outstanding balance of the proceeds of the IDA Credit onlent to MCF would be credited in a separate account on the liability side of MCF's balance sheet (Annex 4, Table 1); to make funds under this component available to BHS in a timely manner, a special account would be established in BHS and an initial advance in CFAF equivalent to US $166,000 from the IDA Credit would be deposited in this special account. This would be equivalent to approximately 3 months withdrawals. This special account would be replenished on the basis of the Government's withdrawal requests, upon presentation of certified statements of expenditures (recording effectiveness of eligible loans). Reimbursements would be aggregated into applications of not less than US $50,000 for submission to IDA. Auditors would provide separate certification of these SOE; (d) cumulative remuneration of permanent resources paid by BHS will be capitalized by MCF and added to its permanent resources; and (e) nominal interest rate charged to the local governments (actual interest rates borne by the local governments plus lbonification") would be calculated as the Central Bank's discount rate plus two points, currently at 10.5%. The Government would directly transfer to BHS the ubonification' share of loan interests up to the part of FECL, which is annually allocated to this form of grant, and BHS would charge the local governments with the complementary share of interest. Both would constitute BHS' remuneration which is expected to cover MCF's direct operation cost as well as all risks involved. Bad debt contingency would be provisioned as part of the operation costs to be borne by BHS. Repayment defaults would thus be covered by BHS and would not affect MCF's balance sheet unless their cumulative amount reaches an agreed level where contract execution would be suspended and appropriate corrective measures discussed. 11. All arrangements (paras. 9 to 10) would be finalized prior to Credit effectiveness. Eligibility criteria for loans to the local - 33 - Annex 1 Page 5 governments and model contracts should be acceptable to IDA. An annual review of MCF's operation and performance will be carried out by IDA, the Ministry of Economy and Finance, the Secretariat of State for Decentralization, the Project Unit and BHS one month before the annual meeting of the National Loan Committee for each year of the project; ongoing disbursement for the current fiscal year of the proposed proceeds of the IDA Credit to be on-lent to BHS for financing MCF will depend on satisfactory conclusions from this review. 12. There is no definite method of assessing the appropriate target of annual lending. On the one hand, local governments' investment needs are potentially huge and far beyond their indebtedness capacity. On the other hand, as demanding criteria will be utilized for selecting eligible projects, the first lending programs might prove difficult to allocate. The estImates have been drawn up on the basis of a 20% ratio capital to the operation budget. Among potentially eligible projects, Dakar would give priority to the market rehabilitation. A CFAF 2.8 billion program has been proposed to be carried out over a four year period. Dakar would thus apply for an annual CPAF 700 million borrowing. On this basis, the estimated total annual lending would be in the order of CFAF 1.5 billion. The simulation of MCF's operation (Annex 5, Table 1) is based on the following assumptionss (a) annual lending program increasing gradually from CFAF 750 million for the first year to CFAF 1.6 billion for the twelfth year; (b) FECL contributing CFAF 3.7 billion over seven years (CFAF 3.4 billion - US $11.3 million - over the period of the project execution) plus 4.5% interest -bonification" (annual total contribution of CFAF 600 million over five years). Under these assumptions, the estimated need for initial financing from the IDA Credit is CFAF 1 billion (US $3.7 million). An interesting indicator of MCF's efficiency is provided by the ratio between MCF's annual lending capacity and PECL's annual contribution since FECL is the only permanent resource involved in the system. This ratio increases from 1.25 during the first year (impact of the IDA Credit) to 5.6 after 12 years. It is expected to reach 2.7 by the end of the project execution period. B. Stenpthenint CUD's Technical Department 13. Strengthening CUD's technical department sub-component is a direct follow-up of the municipal component of the Technical Assistance Project for Urban Management and Rehabilitation. Efforts undertaken under that project to organize, train and equip the newly created technical department of the "Communaute Urbaine de Dakar' (CUD) should be continued and extended through a set of specific actions. 14. The project would finance: - 34 - Annex I Page 6 (a) The purchase of civil works equipment and vehicles at an estimated base cost of CPAF 955 million (US $3.3 million); this equipment and vehicles are necessary for the infrastructure maintenanee and would particularly allow for CUD's technical department to maintain roads that would be repaired under the rehabilitation of CUD's main collector roads (para. 19). (b) The rehabilitation (extension and remodeling) of the buildings that shelter technical units in the cities of CUD (Dakar, Pikine and Rufisque-Dargny) at a total estimated base cost of CFAF 242 million (US $0.8 million) includings (i) the rehabilitation of the main building (Direction des Services Techniques) on the existing site of Bld Gueule Tape (CIA? 2.3 million); (At) the extension of the primary technical center located on the same premises (CFAP 63 million); (iii) the extension of a secondary center in Dakar (CFAP 35 million); and (iv) the construction of two new technical centers in Pikine and Rusique-Bargny (CFAP 142 million). (c) Three technical assistance experts (a civil engineer, a civil engineering technician and a mechanic) would be required to strengthen the technical capabilities of the local staff during the first two years of the project execution (estimated base cost is CFAP 252 million - US $0.8 million). (d) A training program (Annex 6) for CUD's Technical Department staff would includes (i) a priority sub- program for selected key staffs in each service to be implemented during the first two years of the project execution (CFAP 30 million); and (it) a longer term training plan to be implemented over the remainder of the project execution (CPAF 18 million). (e) The program of the public facility rehabilitation and equipment at a total base cost of CFAP 785 million (US $2.6 million) as follows (one of the first tasks carried out by the new CUD's technical department was to draw up an inventory of public facilities requiring urgent rehabiliation and maintenance efforts which resulted in the identification of a rehabilitation program which has since been updated to reflect more adequately the general concerns for the prioritization of the investments): - 35 - Annex I Page 7 Rehabilitation Equipment Cost Cost Total (CFAF million) (CFAF milliao) Schools$ Dakar plateau 11 Medina/Gueule Tap;e 6 Outskirt villages 8 Total 25 4189 Public latriness Dakar 94 117 Pikine 53 15 Rufisque-Bargny 18 7 Total 165 139 Health facilities 8 31 8 Administrative field offices 3 4 7 Total 580 204 15. All goods and services under this sub-conponent would bo procured under the rosponsibility of the Project Unit and transforred to CUD as a grant frou the Government; therefore there is no onlending arrangement for the sub-component. However, a project agreemeat will be signed between CUD and IDA to record CUD's commitments on (a) the use of the civil work equipments for infrastructure maintenance, (b) the Implementation of the proposed program of facility construction and rehabilitation, (c) the use of the technical assistance xperts, (d) the mplementation of the training program, and (e) the relatod reporting. As regards the construction and rehabilitation of buildings and public facilities it has been agr-ed during appraisal (and will be confirmed under the project agreement) that the project would finance materials and supplies allowing for the technical department to carry out works through force account, since these works are small, scattered geographically and in most cases related to resumption of longtime neglected maintenance (a typical duty of the technical department). However in a few cases when the size of works on one single building will allow for contracting out, works will be procured under LCB (as in any event their size would not justify ICB). Facility equipment will be grouped into packages large enough to attract bids under LCB, but given the diversity of facilitie and the fact that thoir rohabilitation will be spread over time these packages would remain too small to attract international bids. - 36 - Annex 1 -36- ~~~Page 8 C. Traffic and Public Transport Management Backtround 16. The traffic and the management of public transport are only partially the responsibility of the local governments. Construction and maintenance of the principal road network in Dakar and a large part of the secondary road system are under the responsibility of the Ministry of Equipment. The maim reason for this is that, in the past, the city of Dakar was unable to raise the resources necessary to maintain the road network. Out of the 216 km of road, for which the State is responsible, there are approximately 105 km of 'rues a grande circulation" which should normally be maintained by CUD. However, CUD has not yet the financial and technical capability for taking over the maintenance of these roads. The project would therefore be implemented within the framework of the current sharing of responsibilities and thus involve both CUD and the Ministry of Equipment as implementing agencies. 17. Under the Technical Assistance Project for Urban Management and Rehabilitation, a Traffic Bureau (Bureau de la Circulation) has been created and is temporarily located in the Ministry of Equipment. It should eventually be transferred tc CUD when the main part of the urban road network will fall under CUD's responsibility. The Traffic Bureau has been instrumental in gathering and analyzing valuable information about traffic conditions in the Dakar area and in drawing up, on this basis, a prioritized program of urgent works (priority action program or PAP) to improve overall traffic conditions and particularly public transport efficiency. Description 18. The traffic and transport sub-component would primarily aim at improving public transport operation. This will include: (a) continuation of support to the Traffic Bureau; (b) rehabilitation of CUD's main collector roads (68 km); (c) implementation of a Traffic Management Plan in the central area of Dakar; and (d) improvement of key junctions and sections of roads as identified in the PAP. 19. From an institutional point of view, the Traffic Bureau will increasingly play a key role in the supervision of the priority program's implementation in ongoing planning stages and in the preparation of transport policy decisions. Support is still necessary to strengthen this new institution. While equipment financed by the Technical Assistance Project for Urban Management and Rehabilitation satisfactorily meets the needs, the technical assistance (a team of two engineers) should be extended for at least another four years (estimated base cost is CFAF 336 million). Concurrently, local staffing has recently been expanded. The Ministry of Equipment has strengthened the Traffic Bureau with the allocation of suitable work premises and the permanent assignment of two engineers, three technicians and two - 37 - Annex 1 Page 9 draftsmen. The Government is committed to employ this staff throughout the project execution. The Traffic Bureau should eventually be transferred from the Ministry of Equipment to CUD. By the end of the technical assistance period, IDA, the Ministry of Equipment and CUD will review issues involved in this transfer. 20. The rehabilitation of CUD's main collector roads encompasses: (a) road reconstruction on 33 km at a total base cost of CFAF 828 milion (US $2.8 million); (b) road resurfacing on 28 km at a total base cost of CFAF 172 million (US $0.6 million); and (c) miscellaneous minor repairs on 7 km at a total base cost of CFAF 10 million (US $33,000). The above estimated base costs do not include taxes and contingencies. The preparation cf bidding documents for the rehabilitation of CUD's roads is expected to be carried out before Credit effectiveness in order to allow for rapid execution of this sub-component. It will be contracted out as one package under international competitive bidding (ICB). The estimated economic rate of return (ERR) of 28% is based on benefits from the vehicle's operating cost savings (without taking time savings into account). 21. Central Dakar's Traffic Management Plan (Plan de Circulation) has been proposed as part of the Transport Plan (Plan de Transports) published by the Government in May 1986. Improving the traffic conditions in the central Dakar's area is clearly a priority need but the Traffic Management Plan has not yet been fully tested and documented in order to allow for the calculation of the economic rate of return. Therefore, an additional study to be carried out by the Traffic Bureau over the next few months will be a prerequisite for the implementation of the Traffic Management Plan. The estimated base cost is CFAF 705 million (US $3.4 million) including the economic study. Implementation of the Traffic Management Plan consists of: (a) repairs and remodelling of selected sections and junctions in the central Dakar area (40% of the estimated base cost); (b) implementation of street lighting (402 of the estimated base cost); and (c) implementation of traffic signals (20X of the estimated base cost). 22. For the remainder of PAP, the multi-criteria approach used by the Traffic Bureau to select priority needs has also proven ill-adapted for the calculation of the economic rates of return. Additional studies need to be carried out by the Traffic Bureau prior to the implementation of this package. The estimated base cost will be CFAF 1.7 billion (US $6 million). This consists of priority measures to improve the traffic conditions in various locations of the Dakar metropolitan area and particularly in Pikine through remodeling and repairs of selected road sections and junctions including construction of sidewalks (75X of the estimated cost) and implementation of street lighting and traffic signals (25% of the estimated cost). - 38 Annex 1 Page 10 D. Municlial Resource Hobilization Backstround 23. The objective of the municipal resource mobiliuition sub- component is to provide the basis for improved issue and collection of municipal taxes through implementation of a fiscal cadastre allowing for a rapid and efficient identification of taxpayers and assessment of tax base for the Dakar metropolitan area. 24. As in most Francophone countries, the municipal taxes consist of the poll tax (minimum fiscal), land and property taxes to which a special tax on garbage collection is added and the tax on professional activities (patente). These taxes are administored by the central Govornment on behalf of the local governments. This schero has advantages as well as shortcomings, but in any event, it is not likely to be changed in the near future. Thus, the allocation of tax administration responsibilities to the local governments will not be part of the project. Considerable improvements could be expected from addressing systematically the many drawbacks which currently result from poor attention paid over time to the efficiency of the low yielding municipal tax system. 25. The low yield of these municipal taxes results from Interrelated factors. Tax registers are Incomplete and not regularly updated. This results, to a largo extent, from a computer technology based on centralized batch processing which has been designed in the early 1970s and does not allow for a rapid and efficient correction and updating of tax records. The taxation department cannot monitor the entry and validation of new data. Most errors, double recordings or obsolete records are thus repeated from year to year and result in inefficient billing, repeated clalms and endless litigations. The whole tax registration system needs to be completely revised and corrected through Implementation of a program of comprehensive and systematic identification of taxpayers and assessment of tax baso and of a state of the art computerixed processing. Description 26. The project would allow for a complete updating of the tax registers of Dakar's metropolitan area through the implementation of a fiscal cadastre covering an estimated 130,000 plots and 220,000 housing units. This fiscal cadastre vould not only improve the delivery of land, property and garbage collection taxes, Sut also the poll tax which is collected at the same time as the property tax (when possible) and the patente which is based, in part, on the rental value of professional premises. 27. The technical approach accepted for the implementation of the fiscal eadastre was tested through a pilot project carried out recently ~ 39 - Annex 1 Page 11 by the Survey Department (Direction du Cadastre) with financing provided by IDA under Credit 1398 SE. The pilot project covered six neighborhoods of Dakar's metropolitan area totalling 6,200 plots and the technical approach was deemed acceptable both by the Government and IDA for a full size project covering the entire metropolitan area. 28. Base maps would be produced through photogrammetric techniques for a total area of 18,900 ha. Control points would be installed and geodetically referenced by the 'Direction du Cadastre". Aerial photography at the scale of 1:6,000 and aerial triangulation for the 18,900 ha area as well as digitized stereoplotting for the residential area (6,700 ha) would be contracted out. Stereoplotting of the remaining 12,200 ha of peri-urban areas and mhajor public facilities would be carried out by the 'Direction du Cadastre" through force account using existing photogrammetric equipment. 29. Systematic field surveys would allow for the completion of base maps as well as for the collection of literal data required for the Implementation of the fiscal cadastre (identity and address of taxpayers, professional and residential plot development, identity of plot owners and occupants). For the low and middle cost housing units, which represent approximately 75% of the housing stock, property valuation would be assessed based on a simplified method using unit construction costs. The detailed property valuation method prescribed by the decree on rental value calculation (methode de la surface corrigee), which requires additional property surveys, would be utilized for the high cost housing units, representing the remainder of the housing stock (25%). 30. All graphic data originating from the existing land titles and maps, photogrammetric restitutions and ground surveys as well as literal data resulting from field surveys would be stored in a land database which would be installed in the "Direction du Cadastre". This institutional arrangement was proposed in order to allow for systematic updating of the land registers and database, which is an essential component of the economic justification of the investments required for implementing the fiscal cadastre. 31. The precise configuration of this land database allowing for the geographic identification of the taxpayers and for automatic delivery of the various tax registers (mainly property tax and Vpatente") will be defined by a study to be financed under the existing PPF. The project would finance the purchase and installation of computer hardware and software as well as technical assistance and training for the implementation of the land database and the related reorganization of the land information services. 32. A first study has been completed and the final report was transmitted to the Minister of Economy of Finance by the Project Unit. This study raises the question of radical changes in the allocation of responsibilitieb among the services under the authority of the Minister - 40 - Annex I Page 12 of Economy and Finance. Whereas automatic data processing is currently the exclusive responsibility of the "Direction du Traitement Automatique de l'Information" (DTAI), the consultants deemed it more efficient that cadastral database maintenance and operation including tax billing be entrusted to the 'Direction du Cadastrel as soon as the cadastre is completed. Prior to negotiations, the Minister decided that the Direction du Cadastre would operate the cadastral database through terminals connected to DTAI's mainframe computer. This decision is In accordance with one of the alternatives proposed by the consultants and is satisfactory. 33. The estimated total base cost of the fiscal cadastre sub- componments is CFAF 1,545 million (US $5.2 million); CFAF 350 million would be for the photogrammetric production of base maps, CFAP 500 million for the field surveys and plot data collection, CFAF 245 million for the implementation of the land database and CFAF 450 million for institutional strengthening (salaries of temporary personnel, staff training, studies, redevelopment of offices to adequately shelter preservation and maintenance of the new cadastre, purchase of equipment and vehicles). The "Direction du Cadastre" has proven capability of implementing this sub-component, which is expected to be completed in 30 months. The technical assistance would be reduced to a minimum and limited to what is necessary for the implementation of the land database. 34. Through improved registration and billing, the proposed fiscal eadastre is expected to bring about substantial increase in property tax yield (currently at CFAF 1.5 billion). This increase could reach 502 after the first year and 100X after the second year of Credit effectiveness. For the business tax (patente), the expected yield Increase would be less in relative terms (25S for the first year and up to 501 after the second year) but similar in absolute terms as the "patente'sa current yield is CFAF 3 billion. Overall$ an additional CFAF 1.5 billion can be expected one year after the cadastre itplementation and an annual CFAF 3 billion for the following years. Therefore, the financial rate of return for the cadastre sub-component would theoretically be very substantial (941 over eight years including the cadastre implementation). This would ultimately depend, however, on a sustained effort to improve tax collection according to the ieasures undertaken as part of the Technical Assistant Project for Urbuit Management and Rehabilitation. The yield might also depend on a revision of the existing lenient policy of exemptions from the property tax. IL HOUSING COMPONENT 35. The housing component aims ultimately at increasing the productivity of the housing supply system primarily in Dakar and subsequently in the secondary cities. The informal sector has, up to - 41 - Annex I Page 13 now, proven capable of meeting this demand. Therefore, the objective should be primarily to improve the cost-effectiveness of the system and to reduce indirect costs involved in uncontrolled Illegal settlements rather than to address the shortage of housing. 36. The housing component has two sub-components: (a) the creation of a land development corporation; and (b) the financing of a long-term loan to BHS to help remove bottlenecks preventing BHS from increasing its share of housing construction financing. These two sub-components are strongly interrelated. The creation of a land development corporation has the underlying objective of sustantially improving the functioning of the land market and the supply of legally settled housing. This cannot be achieved if the financing offered by BHS remains constrained by the currently prevailing restrictions of its annual increase of outstanding loans. The purchaser of plots supplied by the new land development corporation nied to finance the construction of their house. If they encounter too many difficulties, the demand of plots will drop and it might eventually jeopardize the financial equilibrium of the corporation. A. Land Development Backaround 37. The expected annual demand in the Dakar area over the 1987-92 period is approximately 10,000 housing units, of which 3,600 in new sites and 6,400 in already urbanized areas (densification). From this expected demand, 431 is for rental units which are mainly provided by extensions of owner constructed houses and only 81 for planned programs. 38. Self-help development, with or without the assistance of informal contractors, is expected to provide the bulk of the new housing units. This would not be a problem as self-help development is by nature flexible and spontaneously supplies products that match demand. Moreover, the quality of housing produced is by and large satisfactory as lessons learned from public programs are widespread, whereas costs are roughly half those of housing produced by planned programs for the same size and quality. 39. However, self-help development currently has drawbacks which need to be addressed: (a) land tenure is most often illegal and does not provide sufficient security to owners who nevertheless pay high prices to purchase their plots; (b) land use is far from efficient with anarchical settlement and low densities; (c) land development and plot servicing are typically poor and aex posta servicing is difficult and costly; and (d) more than 501 of the projects are carried out gradually over a long period of time (more than 40 months) and result in sub- optimum use of financial resources involved. - 42 - Annex 1 -42- ~~~~Pagel14 40. The objective of the land development corporation to be created is to capture a large share of the land market. By offering a significant number of competitively priced plots with far better features (title and services), one can expect to break down the informal market and eventually to foster private initiatives geared to new patterns of demand. This comprehensive approach Is indeed the main difference between the project and the previous Site and Services Project which featured a pilot public program of land development. Howe7er, this approach entails big risks. The informal (illegal) land market does not carry loss for everybody. The few influential persons who are In a position of convincing the self-help development candidates that they should pay high prices for the acquisition of untitled plots would not be in favor of a changing land market. In addition, the scarcity of titled plots maintains artificially higher prices on the legal market. The beneficiaries of this situation are often the same wealthy and influential persons who take advantage of the illegal market. Obviously, a condition of success will be that the land development corporation be Independent from existing speculators and will not become a speculator itself. A private owner of developable land would currently expect much larger profit in awaiting for price increases rather than in developing the land mmediately. Description 41. The scheme of a private-public joint venture (societe d'economie mixte) with a large majority of private shareholders has been clearly chosen by the Government in accordance with its overall commitment to withdraw as much as possible from direct involvement in economic activities. Moreover, the public shareholders will be CUD and some parastatals Involved In the development process or in the housing sector (public utilities, SICAP and OHLM) with some of them in the process of being privatizqd (SICAP and OLS). The corporation would tbus be Independent from the Government. This scheme would imply lWited possibilities of controlling the corporation's policy while private sharoholders would be expected to seek their own profit through slower development of higher standard plots rather than the fulfillment of a public service mission. 42. Given the status of land tenure of most areas to be developed in Dakar, the corporation will, to a large ixtent, depend on the Government for its supply of developable land at least within the first ton years of Its existence. Of the two development projects to be initiated in the early years of the corporation, Grand Yoff 1 will be carried out on a 43 ha piece of land, almost entirely owned by the state (only 0.14 ha is privately owned). For the other early development project, Patte d'Oie 1, 21S of the total area of 62 ha is owned by SICAP and 41S by the state (plus 42 still in the National Domain). For the rest of the 10-year program (para. 45), privately owned land adds up to only 512 of the total aroa to be developod (391 ha), whereas 272 are part of the National Domain and therefore must first be titled in the name of the State before being sold by the Government (21S are owned by - 43 - Ane_x 1 Page 15 the State). The Governmont Is thus a diroct supplier of a large part of the land to be developed. Moreover, all transactions are controlled by the administration through cumbersome procedures hich are likely to become deadlocks if the Government Is not committed to hasten them. 43. This entitles the Governmont to attach covenants to transfer of property contracts on a case by case basis and should be sufficient to prevent adverse effects that the corporation's profit objective mighst have on the pace and standards of the development of each piece of land. Moreover, the development of new sites will depend on the availability of primary infrastructure which will have to be provided by the central and/or local governments. Again, this will allow for the Government to review and approve proposed projects prior to accepting required infrastructure developments. 44. There is nevertheless a need for a program contract (tripartite agreement) ensuring that the corporation wills (a) not be exposed to land shortage if the Governmont envisagos to change its policy regarding the sale of state owned landt and (b) actually implement the program aud policy that justifies its indirect financing by the proceeds of the proposed IDA Credit. This tripartite agreement should be signed by the Government, BHS and the corporation prior to Credit effectiveness. 45. In July 1986, the Government established a special mission In charge of preparing the creation of the land development corporation. The mission is now headed by OHLM's former secretary general, who expect to be confirmed as the corporation's general manager as soon as the board will have been established. The mission has been instrumental in: (a) monitoring finalization of the feasibility studies; (b) negotiating agreements with the public utilities (SocUtet Nationale d'Exploitation des Eaux du Sonogal (SONEES) et Societe Nationale d'Electricito (SENELEC) ) in order to avoid the endless conteoversies of servicing standards which have partly jeopardized the Site and Services Project; and (c) approaching potential private Investors in order to constitute the corporation's equity and board. The special mission's final action will be the legal establishment of the corporation. This will be a prerequisite for Credit effectiveness. The corporation's charter should be acceptable to IDA. 46. Preparatory studies earried out within the framework of the Technical Assistance Project for Urban Management and Rehabilitation have provided a proposed 10-year activity program for the corportion with six well identified projects on four sites totalling nearly 500 ha. The two sites of Grand Yoff and Patte d'Ole with a total acreage of 300 ha within the territorial limits of the *Commune de Dakarl can be acquired and developped in a short period of time with reasonable costs and without r.tairing primary infrastructure developments. Complete feasibility studies ars available for the first project on each of these two sites. The site of Mbao (60 ha with possible extension to 180 ha) Is the only one In Pikine to be available and relatively easy to develop despite some difficulties related to water supply and oxistence of some - 44 - Annex 1 Page 16 illegal settlements. The site of Rufisque (130 ha) is available and easy to develop, but its remote location does not allow successful marketing in the short-term. The Dakar sites will supply the corporation's activity for five to ten years depending on its actual share of the market. The corporation is expected to capture between one-third and two-thirds of the plot demand directed to new sites (between 1,200 and 2,400 plots annually (30/60 ha) ). Plots would be affordable to households over the 33rd percentile of the income distribution (Annex 9, paras. 8 to 10). 47. Urban planning objectives are to increase density without allowing buildings over three stories high. Most plots will be between 100 and 300 m2 and residential areas will represent at least 70% of the project area. Special guidelines are applicable to site centers in Dakar and Rufisque. Also, four standards of service have been defined (standard 1 is very low, standard 2 is low cost plots, standard 3 is medium and standard 4 is high level of service). 48. Consistently with the findings of surveys of existing land prices and with the cost of land acquisitions and development, feasibility studies lead to the following sale prices (in CFAF/m2): Dakar Patte d'Oie Pikine Grand Yoff Mbao Rufisgue-Barpny Standard 1 2,8501 3,450 1,950/2,400 1,35011,700 Standard 2 3,600/ 4,300 2,600/3,100 1,95012,300 Standard 3 4,9001 6,000 3,700/4,500 2,850/3,600 Standard 4 8,250/10,500 6,600/8,400 5,100/6,600 49. The corporation will execute its projects in several operational phases. Each phase should be limited in scope and financially and functionally independent from the others so as to allow for execution and marketing within a short period of time. The typical elapsed time between initial expenditures and final receipts would be five years. Each block of plots could be developed within one year and most sales could be contracted before actual start-up of works allowing close monitoring of market tendencies. 50. The corporation's 10-year financial planning (Annex 5, Table 4) has been drawn up on the basis of a conservative assumption of its market share. The underlying program involves plots for 18,000 housing units on a total marketable area of 370 ha (total area developed is 496 ha). This program is made up of ten projects including three on each of the first two sites (Grand Yoff and Patte d'Oie), one in Mbao (Pikine area) and three in Rufisque. For each project, timetables have been established for development and sales, which itemize land acquisition costs, servicing costs, studies and marketing expenses as well as sales income. The consolidation of the projects provides a series of annual balances (income from sales minus direct development costs) which has -45 - Annex I Page 17 the typical profile of any starting land development activity. The first three years show substantial deficits because the main part of the development expenditure for the first projects are disbursed between one and three years before receipt of the related income. After this starting period, income from previous projects covers the cost of developing new projects, leaving substantial surpluses. After adding the corporation's operation expenditures, the resulting net cash flow has typically the same kind of profile. The main part of the financing needs ore thus not for long-term assets but for covering the structural deficits of the first three years. With ongoing activity, the related cumulative gap can be reduced to nil after six or seven years. This is the reason why long-term liabilities such as equity are not the most suitable way of financing this gap. 51. The proposed equity is CFAF 600 million, of which CFAF 200 million is to be mobilized upon creation of the corporation and 400 million two years later. Equity constitution in two steps will allow for international investors to consider their potential participation in light of tha corporation's achievements during the sensitive starting period of its operation. International Finance Corporation (IFC) has been approached by the mission who is in charge of preparing the creation of the corporation and has expressed interest. The borrowing need is an estimated CFAF 2.1 billion to be mobilized over three years and reimbursed within the following three years. 52. Over a ten year period, the internal rate of return (IRR) before financing will be 22% and after financing it will be 382 (101 Interest rate). Results of the sensitivity analyses show that the IRR would drop to 152 if sale prices would be reduced by 10% and increase to 30Z with a 102 increase of sale prices. The IRR is also very sensitive to the marketing timing as a one year delay in marketing the plots would result in the IRR dropping to 112. 53. BHS would provide the financing of the corporation's projects out of its own resources, on an annual basis, within the limits of a maximum commitment (CFAF 2.1 billion). Reimbursements would be drawn from sales income according to a scheme already in use with housing developers. Each year, a loan agreement would be entered into between BHS and the corporation. The model of this loan agreement would be approved by IDA as an attachment to the tripartite agreement (para. 44). The financing of the land development corporation would be provided by BHS as its contribution to the financing of the project, for which concurrently long-term resources would be on-lent by the Government to BHS from the proceeds of the proposed IDA Credit. This arrangement, which provides only an indirect linkage between IDA Credit and the financing of the Corporation, brings about optimum use of IDA Credit. Since loans financed by the IDA Credit are not taken into account within the limit of annual increase of outstanding loans permitted by the Central Bank (para. 56), long-term housing loans are, everything being equal, a better use of IDA Credit than medium-term loans to the corporation. -46 - Annex 1 Page 18 B. Housint Loans Backaround 54. The objective of the housing loans' sub-component is to enable BHS to expand and diversify its impact on the financing of the housing construction, particularly as needed to match the demand of the purchasers of plots sold by the land development corporation. 55. Studies have shown that most self-help developers do not finance their project with bank loans due to several reasons: (a) self- help development is still a predominantly informal acitivity whereas the binking system is viewed as the leading edge of the formal sector; (b) many self-help developers are not wage earners and are therefore "de facto' discriminated against as potential borrowers; (c) the average amount of loan suited to requirements of a typical self-help development project is low and therefore such loans are hardly profitable for lenders given the fixed cost of loan management; and (d) the total lending potential of the whole banking system including BHS is limited by both insufficient long-term resources and restrictions imposed by the Central Bank and the Government. 56. BHS currently has a "de facto' monopoly in the formal financing of the housing sector but its activity is almost exclusively devoted t4 financing of public and private planned housing programs. BHS' short and medium-term loans provide financing to developers for the construction of their housing programs whereas long-term loans provide financing to developers' clients for the purchase of housing. On the whole, BHS finances an average of 1,000 housing units per year (101 of the total potential demand in Dakar). The project would help BHS to increase its annual lendin%.to 1,500 housing units and to initiate some lending activity with the self-help developers and especially with those who will purchase plots produced by the new land development corporation. 57. Contrary to this objective, BHS' activity is currently severely hindered by restrictions imposed by the Central Bank on the annual increase of outstanding loans,,a policy which is deemed instrumental in Senegal's gradual reconstitution of its foreign assets. Simulations have shown that, in the absence of any corrective measures, BHS' lending activity would decrease by 70Z over the next two to three years. This would bring about collapse of the housing development sector and deteriorate the supply of housing while jeopardizing BHS' financial soundness which currently happens to be a rare feature among Senegalese banks. This issue can be addressed by properly taking into account the priority given to the housing sector within the overall policy of credit resttiction. Loans financed by the proceeds of the proposed IDA Credit would not be subjected to credit restrictions and therefore the IDA Credit is likely to be instrumental in avoiding adverse effects of the credit restrictions' policy. However, complementary measures are needed -47 - Annex I Page 19 to maintain BHS' current level of activity over the next three years until expected overall relaxation of credit restrictions. A Government proposal to address the issue was a condition of negotiations. Proposed measures are as followst (a) in the short torm, the credit restriction imposed to BHS has been relaxed to a certain extents the coiling of increase of outstanding loasm has been raised from 0 in the second half of 1987 to CFAF 400 million in the first half of 1988; (b) another raise is expected to take place in April after the release of the outstanding Icradits de campagne"l and (c) BHS is authorized to sell part of its outstanding credit portfolio, If necessary, to reconcile new loans with the credit ceiling. These measures are satisfactory although the last one means extra costs for BHS (22 of the sold portfolio per year). 58. In the longer term, BHS is likely to face a resource constraint even if its lending activity does not increase beyond 1,500 housing units per year. The bulk of BHS' outstanding loan portfolio will increasingly consist of long-term loans vith slow repayment. Therefore, most new loans will have to be financed each year by new resources. Concurrently, the relative share of inexpensive or cost free resources (equity and transfers from the Government's budget) will decrease sharply. Under a ten year agreement signed in 1979 with the Government, BHS is currently granted an annual CFAF 1,040 million free resources provided by an 802 share of the 'Pond d'Amilioration do l'Habitat et de 1'Urbanisme" (FAHU). This agreement, which was intended for supporting BHS during its early years of existence, will not be repeated after 1989. 59. BHS will thus need to diversty its resource tobilization efforts in several directlons bys (a) creating various flexible saving schemes to match the diversity of household needs and saving capabilities; (b) extending the average saving period requested prior to the loan application; (c) repeating bond issues on the money market probably in an increasingly competitive onvironment which moans Increased cost of funds; and (d) presonting so8iz eligible bills to the Central Bank's re-financing. 60. Among the proposed schemes to mobilize household savings, BHS has started to implement a system of savings and loaos contracts (plan d'epargne logement) inspired from European examples (France, Germany, etc.). Despite some attractive advantages (higher interest rates and the bank's commitment to future loans), this is not likely to be preferred to regular saving accounts by all BHS' clients because It involves constraints which are better adapted to monthly paychecks of wage earners than to irregular income patterns of most households. In any event, the mobilization of household savings will necessarily involve in the long-term the whole banking system, as BHS cannot afford to develop a network of field offices throughout the country. Therefore, BHS' 'plans d'opargne logement" can be considered a pilot undertaking which should be closely monitored. -48 - Annex 1 Page 20 61. Measures to improve BHS' resource mobilization require time to become effective and are dependent on Senegal's overall economic performance and on improving trust among economic actors in the profitability of housing sector related investments. Therefore, there is a need to relay these measures in the short-term by providing BHS with external long-term resources which wouldt (a) increase BHS' lending capacity; and (b) help improve the average maturity of resources that finance long-term loans. DescriDtion 62. Proceeds of the proposed credit would finance housing sub-loans through a CFAF 4 billion (US $13.3 million) loan from the Government to BHS. This loan would be at the Central Bank privileged discount rate (TEP, currently 62) with a maturity of 25 years, and a ten year grace period. A model sub-loan contract including specific criteria of eligibility to be agreed upon by IDA would be a condition of disbursement. Disbursements would be made as followst (a) All the loans which are referred to below are loans granted to purchasers or self-help builders for the production (full construction or completion of a construction project) of very low cost, low cost, and medium standard housing, in accordance with BHS standards in use. (b) In order to ensure additionality of the financing provided by the project, the following rules would be followed: (i) disbursement would start each year when the total amount and the total number of loans granted during the year would have reached the annual thresholds presented in the following table; (ii) it would cover 15-year loans granted during the year beyond the thresholds; and (iii) the cumulative amount disbursed (calculated starting from project inception) should not exceed at the end of the year the maximum also presented in the following table (CFAP million): Thresholds Maximum cumulative of effective loans volume of loans Year for the current year to be financed Number Amount 1 800 2,900 2,000 2 900 3,400 3,000 3 1,000 4,000 4,000 4 1,000 4,200 4,000 5 1,200 5,200 4,000 (c) In order to foster loans granted to self-help builders, the number and amount of these loans would be multiplied by two prior to comparison with the above thresholds. - 49 - Annex I Page 21 (d) To make funds under this component available to BHS in a timely manner, a special account would be established in BHS and an initial advance in CFAF equivalent to US $1 million from the IDA credit would be deposited in this special account. This would be equivalent to approximately 3 months withdrawals. This special account would be replenished on the basis of the Government's withdrawal requests, upon presentation of certified statements of expenditures (recording effectiveness of eligible loans). Reimbursements would be aggregated into applications of not less than US $100,OOO for submission to IDA. Auditors would provide separate certification of these SOE. 63. Financed by external resources, the loans financed by the project would be authorized beyond the limitations on the annual increase in outstanding loans currently in force. Therefore it is more efficient to devote to these long term loans the total amount of IDA financing on-lent to BHS for implementation of the housing component, and to have the Land Development Corporation financed by BHS on the basis of other resources, rather than sharing IDA financing between land development and housing loans (para. 52). so~~~ ~~~ - 1^m -50- ~~~~T"lIA flIIIIPAL AND HOUSIW DEVELOPIEN PRPECT ProJect Codt SuarY rr- - _ (CFAFmIWb I1 Crei FA 3000.0 1320.0 0.0 4400.0 FECL CuibI 2380.0 1020.0 0.0 3400.0 VDA Cmntbmm 700.0 300.0 0.0 1000.0 A2 CUWS Toict Deputemmnt 9292 1353A 8A8 31212 Todcc AsMdce 63.0 189.0 428 s8 Trainin 44. 3.5 8.1 56.4 Eulnt 0.0 955.1 668* 1623.7 P Mthc#Fal 6276 157.4 102.1 W7.0 Thctd cutA 1938 485 17.0 2593 Tsa"Ort 14865 233 7613 4618.0 Tldcu Asdtio 84.0 252.0 57.1 393.1 PAP: TrathnugwmtPlm 225.6 479.4 141. 04.0 PAP: OUr 5912 1214. 361b2 21672 ClshRoadNetwok 5856 424.1 201.9 1211.7 A4 Fhsul Cuduiro 769.9 774.9 438.0 1982.8 TOW hmkl Cmmoen 62655 5818.6 207.8 14121.9 BI Land Ds_spnu 1365.0 735.0 0.0 2100.0 D2 utbigou 2800.0 1200.0 0.0 4000.0 ToW Ho_sin Cuupmmt 4165.0 1935.0 0.0 6100.0 IC Projet thit (Pe'aU 114.1 193 14.9 1483 F0 s ltty StUrios b4 25.0 75.0 17.0 117.0 7 PPF nW tulce 400.0 0.0 0.0 400.0 ToW Projet EIt 539.1 94.3 31.9 6653 Bu Cosb 10969. 7847.9 269. 20S7.2 Physic CAge 618.9 572.0 174.5 135.4 Prkc CwArgcl 775.6 273.3 195.1 1244.0 TOW 12364.1 86932 249.3 23496 -51 - A_ns2 Talb IB SENEGAL "iIUPAL AN "QSUM EUPII PRJEC Pr*tjo Caod 8 v c ~~Local Falp, Tun loW I hodcod Cfe Fed10.3 4A4 0.0 14.7 FECL Cwh*iors7.9 5.4 0.0 11.3 IDA CAnblkft 2.3 1.0 0.0 3.3 cuDUToCbmlca DOpuM"" 3.1 4.5 2.8 IOA ThcdmtcaAssltbow 0.2 0.6 0.1 1.0 Tr*fdn 0.1 0.0 0.0 02 EqAmbast 0.0 3.2 2.2 SA PiMk FacMIltI 2.1 0.5 0.3 3.0 TC1A5de"CUat 0.6 0.2 0.1 0.9 Tan%wt 5.0 7.9 2.5 I5A T.CIUICUAUIddUI 0.3 08 0.2 1.3 PAP: Traff im tlmgsm. Plum 0.8 lb6 01 2.8 APW:Clwr 2.0 4.0 1 2 72 CWfssadb4 mwor 2.0 I.4 0.7 4.0 A4Fisca Caimabo 2.6 2.6 1i5 6.6 Toald 1nakcpa Cspemi 20.9 19A 6.8 47.1 Lmo"" ~~~4.6 2.5 0.0 7.0 PVw$IqgLa= 9.3 4.0 0O0 13.3 11 Tota Num oh Ceomwst 13.9 6.5 0.0 2021 I-'1-jod tkd %Wdi0.4 0.1 0.0 0.5 F6slWWSbjftthm4 0.1 0.3 0.1 OA PPFCUlor_d 1.3 0.0 0.0 1I3 Tod Projsd IMt 0.3 0.1 22 mCob 3.6A 22.2 6.8 69.6 PRu" FMm t 2.1 19 Oh 4.6 PulcCmungmds 2.6 09 0.7 4.1 Totdl 41.2 29.0 6.1 76.3 WkWA"A- - - i -52 - AMnox2 Tol 2 PUCAL AND HOUSN DEVELOP IN PROECT Pr _ood PrJct F_ucdai (UIS* ilSlin) IN goin gnponmotIDA Senga Cofimnans Tdotl 1 lnelpzl Cralt Fund 3.3 11.3 0.0 14.7 FECL Conbibutlon 113 1113 MA Cont1taf 3.3 3.3 D2 CIDs Tedtclcd Deparment 6.7 2. 0. 10.4 Temc Asstae 0.1 0.8 1.0 Trann 0.1 0.1 02 E* eNt 32 22 SA Phlbc Facilite 2.6 03 3.0 Tedml Centers O8 0.1 0.9 Trspot 108 35 1.1 15.4 T-tc Astnce 02 1.1 13 PAP: Trafc fInemeot Pl 22 0h 26 PAP:OUtr 5.6 1.6 72 CDW's Rd Networ 3.0 1.1 4.0 1-A Fhtal Calesb 43 2 0.4 66 row ucldd Cpwmt 25.2 19.6 23 47.1 Bl Lando_akple 7.0 7.0 2HousIgLom 133 13.3 Told Homsin CompoAst 133 7.0 0.0 20.3 C1 Projed okdU a A0.4 0.0 05 C6 foWity Stu tlin4 03 0.1 OA PPfidLkecdW 1.3 0.0 1.3 Totl Project Unit 2.1 0.1 0.0 2.2 Om Costs 40b 26.7 23 69.6 PhyalculConUn 26 1.8 02 4.6 PrcoCaot n 2.8 12 02 4.1 Totl 46.0 29.6 2.7 783 l") FECL allecatln) 113 TAXES 8.1 8Ds 8.3 TOTAL 27. EOS.ad 1.8 - 53- Aawa2 T" o3A SENEGAL fl IAL AMI OUSM DEVELOPtE PROJECT ExecoUo of Project Cmpmt_ b Y_Vo (tFAF Aff mn) __________ _ FS84 I FYFF I90 IFYl IEFM2I FV93 IFY94 TOtW Al tbklpdCredt Fao 0 800 800 900 800 650 450 4400 FECLCConblbt 0 600 600 600 600 600 400 3400 IDAt CoArbAlm0 200 200 300 200 50 50 1000 C2 s Techdca qapirt 0 349 2307 631 158 204 8 3657 TectldulAuta 0 168 172 0 0 0 0 339 TraI** 0 28 18 7 7 8 8 76 ElmsnO 0 0 1748 0 0 0 0 1748 PdMc Feacies 0 0 208 624 151 196 0 1179 TeduiuCstus 0 153 161 0 0 0 0 31S Tr_Port 28 825 1063 1501 227 1161 1059 S865 TemcdAssltAnc 0 107 109 113 117 0 0 446 PAP:Trffct Mupmnt Plan 0 0 506 524 0 0 0 1029 PAP:Other 0 0 0 584 109 1161 1059 2914 CDs Road Notwcrk 28 719 448 281 0 0 0 1476 A4 F lsld Csdosb v 26 817 996 373 135 0 0 2347 Tobl lAcipad Cempemt 54 2792 5166 3405 1320 2015 1518 16269 DI LadvewoMb_ed 0 500 1000 1000 0 0 0 2499 u2 uingLoW 0 2412 1136 452 0 0 0 4000 tadl HAin C _#*mA 0 2912 2136 1452 0 0 0 6499 Cl Projct Unit O ol" 6 33 30 27 29 31 32 109 FmbftyStfdsUbm 4 0 0 68 35 37 0 0 140 C7 PPF odlUralloNdo 0 300 0 0 24 24 52 400 TtdlProjacldUlt 6 333 96 63 90 55 64 729 Toal (Ineluag coWg) 60 6036 7400 4919 1410 2070 1602 23497 -54 - AWM2 Tib 31S PD _AL AUOn A s fEWLOU Pn EuscuU of Ps.Jut CeOMssts by vow _ n OS _ ml FM FM f4 Tid I _ tdclpd Cmdt FtIW 0.0 2.7 2.7 3.0 2.7 22 15 14.7 FEM Cmb* n A0.0 2. 2.0 2,0 2.0 2.0 13 113 IDA CoArbuft 0.0 07 0.7 1.0 0.7 02 02 3.3 A2 CUDhTT_dIu_htinsmd 0.0 12 7.7 2.1 05 0.7 0.0 122 TghiCiAumma 0.0 0h 0* 0.0 0.0 0.0 0.0 1.1 Tr"inh 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.3 Evibnut 0.0 0.0 56 0.0 0.0 0.0 0.0 6 P.MIMfUUUS 0.0 0.0 0.7 2.1 05 0.7 0.0 39 Tedudcdal rO 0.0 0O 03 0.0 0.0 0.0 0.0 1.0 A Tr_rwt 0.1 2.8 35 5.0 0.6 3.9 35 19* ThdMIUAiddmAC 0.0 04 OA 0.4 0.4 0.0 0.0 1S PAP: Trdffc t_rmagi Pim 0.0 0.0 1.7 1.7 0.0 0.0 0.0 34 PAP:o"w 0.0 0.0 O 1.9 0.4 3.9 35 9.7 CUDuiNutwu 0.1 2A 15 0.9 0.0 0.0 0.0 4.9 M FsedlCak. 0.1 2.7 3.3 12 05 0.0 0.0 7? T 1dm1d t _Csoeum 02 9.3 17.2 113 4.4 6.7 5.1 542 Bt Lod DVAIOPV" 0.0 1.7 3.3 33 0.0 0.0 0.0 83 b2 "ANLam 0.0 8.0 3.8 15 0.0 0.0 0.0 13.3 ToihI hICo.emt 00 9.7 7.1 46 0.0 0.0 0.0 21.7 -el oJ@ttdU*pwrdb 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0h F0m*Kyl Wnt0m4 0.0 0.0 02 0.1 0.1 0.0 0.0 05 E7Fand1 casd 0.0 1.0 0.0 0.0 0.1 0.1 02 1X3 TWdPJstIh 0.0 1.1 0.3 02 0.3 02 03 24 Tdd0wlncogsg 0.2 2.1 24.7 16.4 4.7 6.9 53 76.3 i4WA,F&MbW: J3 - 55- A_ ns2 Tile 4 MUCPAL Am HOUS E ET PRCCT Proec Coseby- Cat (CFAF ndll#) Catageias bu O Cast Pbs. Ctg PrIc Ctg Totd 1 Tclma Asslat 823.7 646 66.1 9543 2 raii 91.5 126 14A li1s 3 stud" 117.0 11.7 112 13.9 4 SovlcesftsadloCtdo ls 813.3 97.6 972 I02 5 Tr" 11S 12 22 14.9 6 AMNWACtISCN WUA,E* 531A4 S 232 561.0 7 SOON sId Oml E*l*p 10482 73A 90.1 1211.9 8 VY*lda 1822 9.1 43 1956 9 CA Wrk Saodd E**amd 1470.0 735 38.9 1582.4 10 CMi Wa 4224.9 507.0 6672 5419.0 11 CtM Wu* Sonpls" l) 10736 109.7 208.7 1392.0 12 FE CC lmt to C 3400.0 0.0 0.0 3400* 13 CER Lt .S 7100.0 399.0 0.0 7499.0 TOTAL 206872 1365.4 1244.0 234Z6 as $ milUb) Catagwl Sm Casft Py. Ctg Pc. Ctg Totad I Tdl aAssbtsm 2.75 0.22 0.22 3.18 2 Trd*g 030 0.04 0.06 039 3 Stuo 0m 0.0 0. 07 4 SevIcs Rad to Caiotc 2.71 0m 0.32 3.36 5 Trs 04 0.00 0*1 0.5 6 Aflwus&tMlscOpeUslngEp 1.77 0.02 0.0 1.87 7 SqpliasanOmc.es lpmmt 3.49 025 0.30 4.4 8 Vdddes 0.61 0.03 0.01 0.65 9 CMI Wit SpelW Wdm 4.90 024 0.13 527 to CMIW*s 1408 1,69 229 18.06 I1 Cmi wirt $wplte ( ) 3S5 0.37 0.70 464 12 FEMCatnrAto MCF 113 0.00 0.00 11. 13 CredILUne 23.67 1. 0.00 25.0 TOTAL 69AK 4.55 4.15 76.32 -fh X - 56- Am 2 Table 5 SOENEAL IMIICIPAL AND HOUSIMI DEVELOPMElT PROJECT CUD-u Teclical Dermnt Strengten Detailed Cost EsUiate mms Csts as of Jure 1987) _ CFAF Million u sIl lilon Lo u) p TO Total Local IForhl Tae Totl Tcimicul Assistance Nd TraIn _ 107.8 192S 50.9 351.2 0.36 0.64 0.17 1.17 Tehnical Assistanc3 63.0 189.0 42.8 294. 021 0.63 0.14 0.98 Tralning Arogm (Prlolty N"ds) 308 0.0 5.1 35.9 0.10 0.00 0.02 0.12 MedirwTerm Training Progrm 14.0 35 3.0 205 0.05 0.01 0.01 0.07 Clvil Work EquIpmet 0.0 955.1 660.6 1623.7 0.00 3.18 2.23 S.41 Excavation Equpments I 0.0 233.0 163.1 396.1 0.00 0.78 0.54 1.32 RoedtlaintenceEqulpments 0.0 615 43.1 104.6 0.00 0.21 0.14 0.35 TrudsandTralWBrs 0.0 34B.9 244.2 593.1 0.00 1.16 031 1.98 Liquid Wast Collection Equpmnts 0.0 165.0 1155 2805 0.00 0.55 039 0.94 Consructon Equipenwts 1 0.0 56.3 39.4 95.7 0.00 0.19 0.13 0.32 Light Vehicles (Including mopeds) 0.0 75A 52. 128.2 0.00 025 0.18 0.43 Workh Equipments 0.0 15.0 10.5 25.5 0.00 0.06 0.04 0.09 Ic Facility RehaIlitatIon 464.5 116.1 40.6 621.3 1.55 0.39 0.14 2.07 Schools 3242 81.1 28.4 433.7 1.08 027 0.09 IA5 PublicLatrines 1 111.6 27.9 9.8 1492 0.37 0.09 0.03 0.50 Comunty Healh FacilUes 252 63 22 33.7 0.08 0.02 0.01 0.11 Adn1stratv Field OffIces 3.5 0.9 0.3 4.7 0.01 0.00 0.00 0.02 Public Fality Equipment 163.1 41.2 61.5 265.8 0.54 0.14 0.20 0S9 Schools 2 1514A 37.9 56. 246.1 050 0.13 0.19 0.82 Halth Facilities 5.1 3A 3.4 11.8 0.02 0.01 0.01 0.04 Adminisaidw Offices 6.6 0.0 13 7.9 0.02 0.00 0.00 0.03 Techical Centers 193. 48.5 17.0 259.3 0.6 0. 0.06 0.86 Dakr rain BuidIng 522 13.1 4.6 69.9 0.17 0.04 0.02 0.23 Datr Secndary Cntr 1 28.0 7.0 25 375 0.09 0.02 0.01 0.12 Pikm. Sery Center 1 563 142 5.0 76.0 0.19 0.05 0.02 0.25 Rufle Second ry Cte 1 56. 142 5.0 76.0 0.19 0.05 002 025 Total Oe Costs 929.2 1353.4 638.6 3121.2 3.10 4.51 2.80 10.40 Phycal Contingencies 95.1 87.8 50.8 233.7 0.32 029 0.17 0.78 Price Contngennes 214.6 41.4 45.9 301.9 0.72 0.14 0.15 1.01 Totl 1238.9 14825 9353 36568 4.13 4.94 3.12 12.19 6MMf x*aW ARt 3W Amnex 2 - 57 - Table 6 SENEAL tlUNICIPAL AND HSN DEVELOPM PROECT Tranport Sh-opoet Dedled Cost EsUmte (Base Ct a ofJu, 1967) CFAF MII USt Million Ft FZL Fe Locol Ta O rI Tae ToW 'a Collector Reado leconstruction 33A 480A 347.9 165.7 994.0 1.60 1.16 0.55 3.31 ResurfacIKg 28. 995 72.0 34.3 206.9 0.33 0.24 0.11 0.69 scellaneo1 1MrnorReedR pAprs 6.8 5.7 4.1 2.0 11.8 0.02 0.01 0.01 0.04 'sUD Collector Ro Osm Cost 68.9 5856 424.1 201.9 1211.7 1.95 I1. 0.67 4.04 yCal Coningencis 703 50.9 242 145A 023 0.17 0.08 0.48 - rlcConUngncs 87.9 11.3 19.8 119.1 029 0.04 0.07 0.40 Tota 743. 4863 246.0 1476.1 2.48 1.62 0.82 4.92 Tdic Asisan lm Cost 84.0 252.0 57.1 393.1 028 0.84 0.19 131 cPhysicalCnene 42 12.6 2.9 19.7 0.01 0.04 0.01 0.07 PriceContins 17.1 11.5 4.9 33A 0.06 0.04 0.02 0.11 Total 105.3 276.1 64.8 4462 0.35 0.92 022 1.49 rdfic Il_agmat Plan Road Rpirs 902 191. 56A 338A 0.30 0.64 0.19 1.13 StreetLight 902 191.8 56A 338A 0.30 0.64 0.19 1.13 .refc Sils 45.1 96.9 282 169.2 0.15 032 0.09 0.56 Trafflck "an"""Pla Ba Cost 225.6 479A 141.0 846.0 0.75 1.60 0.47 2.82 PhyRsc Cont es 27.1 57.5 16.9 1015 0.09 0.19 0.06 0.34 Price Coninens 48.4 19.7 13.6 81.7 0.16 0.07 0.05 027 SToal 301.1 556.6 171.5 1029.2 1.00 1.86 0.57 3.43 0wPAP Road Repas 477.1 5.1 272.4 1634.6 1.59 2.95 0.91 5.45 StetLUitng 68.3 269.3 715 429.1 029 0.90 0.24 1.43 Trafc SMgna 25.8 60A 17.2 103A 0.09 0.20 0.06 0.34 OUwrPAP OsmCost 5912 1214. 361.2 21672 1.97 4.05 1.20 7.22 Phyied Continies 70.9 145. 433 260.1 024 0.49 0.14 0.87 Price ContUin 241.5 163.8 81.1 486A 0.80 0.55 0.27 1.62 STotl 903.7 1524A 485h 2913.6 3.01 5.08 1.I2 9.71 Totd Ba Cost 1486.5 23703 7613 4618.0 4.95 7.90 2.54 15.39 Phial ConUine 172S 266.8 87A 526.6 0.57 0.89 0.29 1.76 Pice CntUn 394.9 206.3 119A 720.5 1.32 0.69 0.40 2.40 Bra Total 2053. 2843 966.0 58652 6.85 9.48 323 19.55 WW*AFEa*WbI. - 58 - An2 Tabe 7 SEEAL NCPAL AND HOtISM DEVELOPT PROCT Filed Cadase Dotiled Cat EsUtmat (Om Costs s orJure 1987) CFAF flNonI US$ 11iIN I tool orm TOM Teta LOW Taxes Total 524.3 321.6 118.2 964.1 1.75 1.07 0.39 321 Cor&ol Polr Irstitbn 22.7 0.0 0.0 22.7 0.08 0.00 0.00 0.08 AerWlal boghy (SceOte1000) 0.0 25.4 4. 332 0.00 0.09 0.02 0.11 Awla TrIagatm 0.0 113 1.9 13.3 0.00 0.04 0.01 0.04 eleoo (AsuidUa Arse) 0.0 1575 26.8 1842 0.00 02 0.09 061' SrmploWa (Perl Armo) 128.1 0.0 0.0 128.1 0.43 0.00 0.00 0.43 CUIPI.tIU,alOfSOmhmS 195.0 6S.0 442 3042 0.66 022 0.15 1.01 S~awys 1785 593 405 278.5 0.60 020 0.13 0.93 Expe_sas 174.1 10.6 308 215.7 0.8 0.04 0.10 0.72 Tmipwwy Sta(t 29.7 0.0 0.0 29.7 0.10 0.00 0.00 0.10 AlWwow 12. 0.0 0.0 12.6 0.04 0.00 0.00 0.04 Fulfant Vehi MInt_m 10.8 10.8 10. 324 0.04 0.04 0.04 0.11 Surwy Frm 100.0 0.0 20.0 120.0 0.33 0.00 0.07 0.40 rIsc.(~eretlngENpeosw 21.0 0.0 0.0 2140 0.07 0.00 0.00 0.07 hbPrecessg FaciliUs 12. 187.5 127. 327.5 0.04 0.63 0.43 1.09 IHrdwwre (ft21M. 0T*mPl.t0t) 0.0 100.0 70.0 170.0 0.00 0.33 0.23 0.57 Sotwae 0.0 75.0 525 1275 0.00 025 0.18 0.43 DatCeRAsmd.I 12.5 12.5 5.0 30.0 0.04 0.04 0.02 0.10 Equlgmust 37. 167.0 142.8 346.8 0.12 0.56 0.48 1.16 PhotogranunetrlcEqu*mmt 0.0 50.0 35.0 85.0 0.00 0.17 0.12 028 Topoqaph E _imt 0.0 53.0 37.1 90.1 0.00 0.18 0.12 0.30 OfflcemdFIlblgEqulpmsnt 37.0 37.0 51.8 125.8 0.12 0.12 0.17 0.42 Vdddes 0.0 27.0 18.9 45.9 0.00 0.09 0.06 0.15 DdSm 0_ _pamstl 22.0 68.0 18.7 128.7 0.07 029 0.06 0.43 TecsadlcA 10.0 40.0 85 58.5 0.03 0.13 0.03 0.20 Studies 6.0 24.0 5.1 35.1 0.02 0.08 0.02 0.12 Trdin 6.0 24.0 5.1 35.1 0.02 0.06 0.02 0.12 Tobl Oa Costs 769.9 774.9 438.0 1982.8 2.57 2.58 1.46 6.61 Physicd CoUnpge 85.8 686 33.3 187.7 029 023 0.11 0.63 Price Cwtncm 130A 20.6 25.7 176.7 0.43 0.07 0.09 0.59 TOW 966.1 664.1 497.0 23472 3.29 2.8 1.66 7.82 LM4f*A.w AW - 59 - ATW2 SUEGAL flWUCIPAL HOUB L PRJECT Prt ct ENW ODo CEso JuraIa (DC.sts"oh 1987) CFAF Mia t _ _ _ ~~~~~loca wd T_ TddLe TM$ T44 Proept Wt OwuUo 114.1 193 14.9 1483 038 0.6 0A 0.49 EmpmsWFntndtww 25 25 3. 8. 0.01 0.01 0.01 0.03 V*Idl 0.0 4.6 3.4 82 0.00 0.2 0.01 0.03 TAI,Mdlto,dflbc.C=n" Swvkc 28. 72 6.1 42.1 0.10 0.02 0.02 0.14 A! wa 76. 0.0 0.0 78.0 026 0.00 000 026 TriM 46 46 1.9 11.5 0.02 0.02 0.01 0.04 4 f_urySt* 25.0 75.0 17.0 117.0 0.00 0.25 0.06 039 225.0 0.0 0.0 225.0 0.75 0.00 0.00 0.75 175.0 00 0.0 175.0 0A o.oo o0o 0.o T 11_ Cossb 539.1 943 31.9 6653 1.0 031 0.11 2.22 byscuCt1amcI 6.1 92 3.0 18.3 0.02 003 0.01 0.06 PltcsCmqnt n 356 5.0 4.1 44.9 0.12 0.2 0.01 0.15 otd 581.0 1065 39.0 726. 1.94 0.16 0.13 2.43 6SWAf_AtR 3 - 60 - Am.o 3 Td*lo 1 IIUNICIPAL AN HUSINO DEVELtPHENT PROJECT Project ExecuUon Cderd FY66 FYM9 FM90 FY9X FY92 FY93 FY94 Il nwlelw CmNt fvo IDA C blbum..... . e ,. .... 2 cuD's TedrAed Depat T;dw AwASd ^^ * Public hFfdilUb .. . .. Techicl" Centers A3 Tranot TechicI Astan c .. . ee ** PAP: Trafc f aname PI. PAP: OUhr eeeee #.*## CUOi Road Network ***8 **@ ieeei Cad4str* F Ce ..... C.... Howft CMPOMA*** CDe *** LOW DevelopnC*** eDe *D* IProject Uih *dt o B2 HodgLo .....De.. . . C"**C C6Foa-y Sbd-Urb- 4 C7PPfndb a-a Urw# w##c w - 61 - A_x 3 Tabl 2 SENEGAL MUNICIPAL AND HNUSIRS DEVELOPMENT PROJECT PrUFt lmwxbmun ResOrMIb111tess Exeiutnaw or EtnuacleI Projct Projet Elements Suoperviu Agmny cost Mui {^I cr - t Fq MSBHS 213 u1 TuLh nDri CUD ProjctkUnit 153 - Tectlcul Assistane mnistry of E _jpn: Project UnIt 163 - Tramc M gment Plan (Trfmc Bureau) - Othw PAP - CUD's Collector Roads Trsaffc Bureaus CUD Project (MIt 63 hcsl Cfb Mnstry of Ecoomy Project Unit 9% and Fiae: Swy -ote Direction du Cadstre) -Lxnd De"lopment LxW OlWpot Corp. 6HS 122 - I non Loan me weS 19X ProChilwAn" Project Uit ProjecUnlt 23 - Urban 4 Fufbility Study - Project Fancia Maament 1003 Annex 4 - 62 - Page 1 SENEGAL MUNICIPAL AND HOUSIN¢ DEVELOPMENT PROJECT Imolementina Institutions A. Couuunaut; Urbaine de Dakar (CUD) 1. In 1983 (effective an FY 85), municipal institutions were remodelled In the Dakar area with the creation of three local governrents (communes)i Dakar, Pikine and Ruftsque-Bargay and one urban community (Communaute Urbaine de Dakar (CUD) ). Previous to this reform, the former "Commmn de Dakar", which had authority over the entire metropolitan aroa, used to be o 'Coamunoe Statut Sp;cial* aministerod by a civil servant nominated by the Government instead of an elected mayor. a. The throe new communes' are "communes de plin exorcice". They have mayors elected by the city councils which themselves are primarily elected by the citizens (of 69 members in each city countil, 59 are elected by the citizens and 10 are nominated by economic and social organisations). A "communaut; urbaine" is, under Senegalese municipal law, a public Institution with legal personality and financial autonomy, to which most of the local governments' legal provisions are applicable. CUD'8 *xecutive body (Comito de la Communaute Urbaine) is made up of representatives (Dakar - five, Pikine - three and Rufisque- Bargny - two) elected by the city councils under the chairmanship of a president, who happens to be the Mayor of Dakar (Chart 1). CUD has a singularity, that is a regular "Coumunaute Urbaine" would have been created by the deision of several local governmonts which would have doemed it appropriate to have such a cooperative institution. In the case of Dakar, CUD hs been created by a Government decree concurrently with the creation of the local govornments concerned. 3. CUD's chartor has been established by the above-mentioned creation decree. It provides "inter alial that CUD is responsible for: (a) Construction and maintenance of urban roads. (b) Street cleaning. (c) Solid waste collection end treatment. - 63 - Anx 4 Page 2 (d) Managing the municipal hospital Abbas-Ndao. (e) Managing municipal technical services. (t) Municipal slaughterhoustb. (g) Four specifically designated cemeteries. (h) Managing the personnel and services needed by CUD's operation. (i) Municipal grants for students. (j) Managing the Training Center for the municipal personnel. (k) Settlement of the former Comunoe de Dakar's' debt. In addition, CUD is entitled to sign contracts with member local governmments to deliver any service that would fall under their responsibility. For every service under CUD's responsibility, CUD is substituted to local governments concerned with the same rights and duties. Similarly, the President of CUD is substituted to mayors. 4. CUD's financial resources are entirely provided by transfors from the budgets of the three member acomuneaw. The tax base is unevenly distributed among the three "communes' and Dakar's shara is much larger than its population share. One of the objectives of creating CUD was to allow for resource redistribution. Each 'commune" Is required to contribute to the financing of common services delivered by CUD in proportion to its revenue share rather than to its use of these services. Dakar is thus required to provide more than 90X of CUD's financing. This financial arrangement entails the most conspicuous shortcomings of the new institutional organisation. Since CUD was not created by the decision of the member "communes" and local financial resources are in short supply, "communes" have consistently been reluctant to finance CUD. In addition, CUD is chaired and mainly financed by the Mayor of Dakar. The other two mayors are thus inclined to disregard this Institution which they consider under Dakar's control. This issue is not easy to address but improvements can be expected from Improved revenue generation that would in any event facilitate CUD's financing. 5. This new institutional system was implemented at a time when the effects of the financial crisis were reaching a peak. CUD and the three "communes" have been facing a dramatic shortage of financial resources since Inception, despite significant improvements of revenue collection brought about by measures implemented within the framework of the Technical Assistance Project for Urban Management and Rehabilitation (Credit 1458/SF-13 SE). Thus, improvement of resourco mobilization is not only a permanent need but a prerequisite to design, assessment and implementation of any other Improvements. - 64 - Annex 4 Page 3 6. The main part of CUD's responsibilities depends on technical services. The total number of CUD's staff is estimated at 1,300, of which the Technical Department accounts for 823. Efforts undertaken under the Technical Assistance Project for Urban Management and Rehabilitation to reorganize, train and equip CUD's technical services have now started to bear results. A complete listing of the Technical Deparment's staff is available and the proposed overall organization (Chart 2) is being implemented. Key managers have been nominated and they are in the process of organizing their respective divisions. A comprehensive training program has been drafted which emphasizes job adaptation of selected staff in each division as a first step, followed by a more systematic approach to skill improvement over several years (Annex 6). 7. The project would focus "inter alia" on strengthening CUD's Technical Department through technical assistance, training, equipment and the financing of a priority program of public facility rehabiliation. This Technical Department is indeed CUD's "raison- d'0trel and, to a large extent, provides the justification of the "communes' as well since CUD is responsible for managing all municipal technical services. Improvement of the basic services delivered by CUD's Technical Department (infrastructure and public facility maintenance) is a prerequisite to any effort of Improved resource mobilization by CUD from the "communes" and by the "communes" from the taxpayers. Improved resource generation is in turn a prerequisite to a broader definition of municipal responsibilities and related disengagement of the central Government. B. Traffic Bureau 8. The Traffic Bureau (Bureau de la Circulation) was created in 1985 within the Study and Planning Department of the Ministry of Equipment, as part of an action plan agreed upon under the Technical Assistance Project for Urban Management and Rehabilitation. As studies were being carried out to prepare an overall Transport Plan for Dakar's metropolitan area and a Traffic Management Plan (TMP) for central Dakar, the Traffic Bureau was created to follow-up and complement, on a permanent basis, studies and planning efforts already undertaken and to supervise implementation of the proposed measures. According to its terms of reference, the Traffic Bureau was required to carry out the following tasks: (a) Updating the diagnosis of Dakar's urban transport system. (b) Updating the Traffic Management Plan. (c) Completing the Traffic Management Plan's economic analysis. - 65 - Annex 4 Page 4 (d) Planning the Traffic Managemont Plan's implementation. (e) Preparing the Traffic Management Plan's detailed engineering. (f) Supervising the Traffic Management Plan's implementation. The Traffic Bureau was designed to be ultimately transferred to CUD's Technical Department, but at the time of its creation, CUD was deemed unable to provide suitable technical support to the recently created institution. 9. One of the main objectives of the component related to the Traffic Buteau under the Technical Assistance Project for Urban Management and Rehabilitation was on-the-job training of its staff by two technical assistance experts. However, achievements have, up to now, remained short of this objective because the Ministry of Equipment has not been able to assign full time staff to the Traffic Bureau. Within the framework of the Government's overall policy of reducing the number of civil servants, inadequate local staffing of the Traffic Bureau resulted In its slow actual implementation and in unexpected delays in carrying out some of ita assignments. 10. The Government has now acknowledged the adverse effects resulting from these delays and has committed itself to assign the necessary staff as a condition of disbursement under the transport sub- component of the project. Implementation of the project is expected to require active participation of the Traffic Bureau in order to carry out studies, prepare bidding documents and supervise works. This will be a powerful incentive to strengthen the Traffic Bureau, which in the long trmt, has a key role to play in urban transport policy coordination. Technical assistance (two experts) will be extended for another four years until transfer of the Traffic Bureau to CUD. C. Banaue de l'Habitat du Sinital (BHS) 11. The 'Banque de l'Habitat du Senegall (BHS) was created in 1979 as a "soci$te anonyme d'economie mixtel under Senegalese law with the following equity structures - 66 - Annx 4 Page 5 Share Shareholder (CFAF million) X Government of Senegal 100.0 9.09 Central Bank (BCEAO) 100.0 9.09 Other banks 250.0 22.75 IFC 95.0 8.63 National Social Security Fund 80.0 7.27 IPRES (National Pension Fund) 80.0 7.27 Insurance companies 56.5 5.14 OHLM 30.0 2.73 SICAP 30.0 2.73 Miscellaneous private shareholders 278.5 25.30 Total 1.100.0 100.00 BHS' Board is composed of 14 members includin; three representatives of the Government. The "Prosident Directeur Generall is both chairman of the Board and BHS' chief executive officer. BHS' total staff is 109 (Chart 3). 12. BHS is a specialized development bank which is bound to the Government by a 20-year program contract (Convention d'Etablissement) and by a 10-year financial contract (Convention Spociale d'Affectation de Ressources). Under the 20-year program contract, BUS has committed itself to be an instrument of the national housing policy and more specifically, to finance low cost housing, whereas the Government has committed itself to provide administrative assistance, legal protection and tax exemptions over the first five years (now finished) of. BS' operation. Under the 10-year financial contract, 80X of the Fund for Housing and Urban Improvement (FAHU) is allocated each year (until 1989) to BHS as a free resource to finance loans for low cost housing construction. This has represented an annual increase of CFAF 1,040 million in permanent resources since BHS' creation. 13. Despite these contractual arrangements, BHS is basically a private and profit oriented corporation which has, up to now, been efficiently managed by a team of young and exceptionally skilled Senegalese professionals, Its financial situation is sound, a rare feature among Senegalese banks, although BHS' activity is currently severely hindered by restrictions imposed by the Central Bank on the annual increase of outstanding loans. In the long term, BHS is likely to face a resource constraint as the bulk of its outstanding loan portfolio will increasingly consist of long-term loans, with slow repayment. BUS will thus need to diversify its resource mobilization efforts. Meanwhile, the average cost of its resources will gradually increase as the relative share of low cost or free resources (equity and Government transfers) will decrease. This will require additional efforts to improve management's performance. BHS' current balance sheet as of September 30, 1987, can be summarized as followst -67- 4 Page 6 CbAF billion US S millso Assets Csah 4.4 14.7 18 Portfolio 18.7 62.3 75 Other assets 1.9 6.3 7 Total 25.0 83.3 100 LUabilities Saving accounts 7.0 23.3 28 Term deposits 5.3 17.7 21 Permanent resources 7.7 25.7 31 Equity plus provisions 2.5 8.3 10 Othor liabilities 25 82 5 10 Total 2500 8 A- 100 14. As of Septmber 30, 1986, BHS had financod housing programs presented by developers and cooperatives' for a total of 4,697 housing units, of which l,306 were rated very low cost (less than CFAF 4.9 million for four rooms), 1,784 were rated low cost (less than CFAF 6.5 million for four rooms) and 607 were rated medium standard (less than CFAF 8.7 million for four rooms). Meanwhile the cumulative number of loans to housing buyers (aainly clients of para-public developers) was 4,221. Average annual amount of new loasm over the ast three yres has been equivalent to the financing of 1,000 houaing units. On the resource side, the total number of saving accounts was 22,700 as of September 30, 1986, for a total anount of CFAF 5.17 billion (average account balance: CFAF 227,560 or US $758), outstanding debt (bonds) was only CFAP 575 million and BHS had never utilized the Central Bank's re- financing. financial asilations over the next eight years er presented in Annex 5, Table 3. 15. An audit of BBS' maOgement has been carried out during the appraisal mission by an export from Cour des Comptes*, the highest Frenoh authority for auditing accounts of public and par--public agencies. The expert's report -s listed in the Selected Data and Documents Availablo In the Project File (Annex 11). His findings have confirmed that BHS is generally well mnsaged and that their Is no need for specific lnstitution strongthening or support (technical ssistance and training) to mplement the project. This was also the conclusion of BHS' Geonral Manager, Who Intends to develop a special unit for managing XCF, for which external support will not be required. 16. The project would stiumlate an incroaso of BUS' activity bys (a) entrusting to BUS the management of MCFI (b) requiring that the newly created land development corporation be financed by BUS (mainly through reallocation of Its cash portfolio); and (c) supporting BES' - 68 - Annex 4 Page 7 long-term lending activity over the next few years where constraining credit restrictions are expected to remain in force. D. Prosect Unit 17. As in the Technical Assistance Project for Urban Management and Rehabilitation, the Project Unit will report to the Minister of Plan and Cooperation. The present Director to the Technical Assistance Project for Urban Management and Rehabilitation will remain for the new project. However, the existing Project Unit needs to be strengthened in order to be able to tackle the various tasks involved in technical and financial management of the project. This will encompass calls for bid (bidding technical documents being prepared by Implementing agencies conderned), awarding contracts, contract management, consolidated accounting, disbursement monitoring and reporting supervision. One confirmed accountant, two civil engineers and one secretary will be hired in addition to existing staff including the Director, one accountant, one clerk, one secretary, two drivers and one orderly. One of the two engineers would be a consultant in place before the implementation of the project (under PPF financing) for timely review of the first bidding documents. -69- A6g5 T*ax I-A MUNCAL AND HOUSINS DEVELOPIENi PAWECT Ibpl Crd1t Fua (CFAF millon) FY9 FY F9l1 FY92IFY3IFY94iFMIFY96 fY97fSFM FYOO""l lntwetan Loon 39 123 215 30M 303 445 491 527 562 599 639 680 Pdd by wrow.s 6.02 23 70 123 174 219 254 281 301 321 342 365 388 Pdd by FECSL oulft) 4.53 17 53 92 131 164 191 211 226 241 257 274 291 Tobl (pwuis UN=" 39 123 215 305 303 445 491 527 562 599 639 680 Be dCindpwy 22 15 17 18 16 14 10 8 6 7 7 8 8 DIroOwt a Ein 63 3 10 30 32 34 36 38 40 43 45 4 51 ToW taIOpu Etwm e 18 27 48 48 47 46 45 46 49 53 56 59 ItatonDbt 8.52 6 23 47 68 79 83 85 85 65 85 84 82 11CFt _WwI 8.52 26 76 127 179 232 278 313 342 370 400 433 468 Tot] Fumd_ Eupms 32 100 174 247 310 361 398 427 455 455 517 550 T=dEuPmeo 50 126 222 296 358 406 443 474 504 5 573 609 NET INOCOE -11 -3 -7 10 26 39 48 54 57 61 66 71 Not ls. CUw.utlw -11 -14 -21 -11 14 53 102 155 213 274 30 411 - 70 - Afmi 5 l~~~~~rl MIUUAL AND HOUS fE W T P CT d CAIf Fi (CFAFMW vim, ~yg, FuMam FY94 ma ma FY97 FVi vimvi PROVIDeVS? InwmtrkmlPIS 0 26 76 127 179 232 278 313 342 370 400 433 LoMApsymu 0 0 96 214 364 534 724 93 996 1064 1114 1175 ToW *m Qwiw 0 26 172 341 5W 766 1001 124 118 1434 1514 1606 FEM Tr 600 566 52 48845122098 0 0 0 0 0 ALOM 1000 150 20 300200 50 50 0 0 0 0 0 0 TddI Soeu 750 842 1000 1028 1044 1036 1099 1245 1338 1434 1514 1608 USED FOR : Debta.paymt 0 0 0 0 0 0 0 0 0 0 1540 La_oh d Klowwuf 750 842 1000 1028 1044 1036 109 124 1338 14 1499 1568 Tid Us 750 84 1000 1028 1044 1036 1099 124 118 1434 1514 1608 BdMo 000000000000o o o o o . - 71 - Ams5 SENEAL "UNPAL AND HOUSN DELOPS"ENT P"ECT flmclpu Credt Fed (CFAF ndllion) FVS9IFYWImo II m2Im3ImIFYV9lmF6Im7I6FYl69 99IFY o*stmdlogLosPrtoIO 750 1592 2496 3310 39904492 467 5160 52 59 6277 6670 C4a11dno_m 0 26 102 229 407 639 917 1230 1572 1942 2342 2775 CuAisUvo FECL Canh " 600 1166 1696 2102 2633 28654 2952 2952 2952 2952 2952 296 O_ttriNg Debt 150 400 700 900 950 1000 1000 1000 1000 1000 985 945 et LlIutes 750 1592 2496 3311 3991 4493 4868 5181 5523 58 6279 6672 (CFAF min) FECL Tota Cubu'bUm 600 600 600 600 600 400 300 219 233 248 265 282 Ni- ceta RltunomLowmPortuo '16.43 13.5 1222 1 11 1123 10.93 10.8 10 10.9 10 10. CutofhFmd 13.3310.9X 9.93 9.43 9.0 8.93 8.8 8.83 8.3 8.X 8O Aw'egSp ewS 3.11 2.63 2.31 223 2.13 2.13 2.13 2.12 2.1 2.13 2.1 F_dcbl Sbtcte Icatws D tCmSp RtIo 1.13 1.06 1.11 1.13 1.14 1.14 1.14 1.14 1.14 1.11 1.07 NU taIof Totdl CWabt m 20.0225.11282.0272323.83223%20O5X 19.3 18.1X 17.0 15.73 142N lRnWCitaflzudTrnmsrs 4.31 63 7.5X 823 8.8 9.7X10%6311.6s12.513.6314. Awu Lou / FECL. cw&Wm Rto 1.25 1.40 1.67 1.71 1.74 2.59 3.66 5.6 5.74 5.77 5.66 5.55 _wuwlp I ID CreOiA t Law to alomames "dwRy 20 I trity 7 Rdb 8SX I Rd* d to 6 LO 6.OX Bee. 10 1 rae I1 - 72 - Ax S Table IE SENEOAL MIUNICIPAL ND HOUSINO DEVELOPRENT PROJECT Mlunicipal Credit Fund CFAF million 1600 1400 i >,_ 1200 1000 .. 0 89 90 91 92 93 94 95 96 97 98 99200 1-FZ zuol~~~~isa Yar_ 1 Annuol Flow ofRPesourcesfrom FECL * Annual Fbw otReeo cfromlDACrdtt 4 Annual Flowo new MCF Loan - 73 - Amg 5 Ms"T~ SENEGAL tUNICIPAL AND HOUSINS DEVELOPIIENT PRUJECT Consolidated Bedt @U toe Loca vewmts f0Dam. Pillns. NWiuu-auj i CUD) (CFAF Billion) wsi FY865 FY8s Fw9 FY20 i m l IMI FY94 35 - T 1 52 6.7 65 6.6 66 6.7 6. 6. 6.9 7.0 7.0 -MuetsFes 5 0.7 0.9 1.1 1.1 12 1.3 1.3 1.A 1.5 1.5 1.6 -OIncome 4 1.0 3.6 0.9 1.0 1.0 1.1 1.1 1.1 1.2 1.2 1.3 Se-Totl before ProJect 7.0 11.3 8O5 8.7 8.8 9.0 92 9.4 9S 9.7 9.9 2-AfopdMsI - TM Yield nceale 05 1.5 3.0 3.0 3.0 - _frt Fees Ineas 0.1 02 0.3 0. Ohi Oh - 11F Loans 0.7 0.7 0.7 0.7 0.7 0.7 0.7 Sub-Total Project Impact 0.0 0.0 0.0 0.0 0.7 0.8 1.4 25 4.2 4.3 43 TOTAL INCOIIE 7.0 11.3 65 8.7 95 9.8 10 11.9 13.7 14.0 143 RECIIT EXEDITURE ' 1- &,v,#d 51 52 9.9 7.0 7.3 7.7 8.1 8.5 8.9 9A 9. 103 2-Aw/,thx - Debt Servkce C) 0.0 02 0.3 OA Oh 0.7 - khmbv.wo maiteXSnu 0.1 02 02 02 02 02 WT*td Recurrent 52 9.9 7.0 7.3 7.7 82 6.8 9.4 10.1 10.7 11.3 .AA EXPE_ _ _ I -W OS* Av.#d 05 03 06 0^ Oh 0h Oh Oh OA Oh 0h 2 -*Wfk~"jk& 0.7 0.7 0.7 0.7 0.7 0.7 0.7 Sub-Tat b COStd0 0.3 0.6 0.6 1.3 1.3 1.3 1.3 1.3 1.3 1.3 TotAL EXPEDITUx 5.7 102 7.6 7.9 9.0 9.5 10.1 10.7 11.3 12.0 12.6 Bl W Project 112 12 O.9 0.7 05 03 0.1 -02 -0.4 -0.7 -1.0 lnclsdlngProject I 12 1.2 0.9 0.7 05 0 3 OA. 1.1 2.A 2.1 1.7 - 74 - sem ISUUWAL AnlK SIVFAfPJU PBET . ._ 11 1011SI 1Ump. ft haiti d.UMi 015) w 11111 IMgruiumsCuh 375 9 45 350 1479 121 45 28 12 13 14 14 IMgrutsailutlsmLoum 30 0 171 21 37 449 423 433 48 55 545 S89 bitmibuutl.dhmTumlo.u 98 26 358 410 447 49 54 SP 548 S12 647 75 b*uulsb Luglaml.us 240 M0 950 1129 120 139 148 1402 19X 2283 2843 3019 fioi AM~oW_ NO O i Ot lOo O/ ifW Pv aw *w4loanovilemh u to te W Jo $W OM i* l PR 5 20 40 5 44 48 a a 4 7 77 TobIO9WAtIum 105 172 1907 215I 21 27 25 304 36? 411 4841 SI6 PuM 0X 374 410 411 442 4t5 616 *9 02 13 ?17 824 $74 1d .wa_ w t2 n. 96 191 4115 12513 140 102 177 19 210 MrOWWWAV~ At~~~~1 27 0 0 Q7 0 45 OWsr"ik,Efms 101 198 I94 2 240 27 215 24 3IS 33 301 M3 ll-t.Wlaratmobpmn 017 001 100 0? 841 1010 1091 1163 12S 1339 1423 IS1S hi..t..L 19? 211 22? 210 210 344 39 440 470 503 53 S7 htuienDs_ dts 147 280 33 414 472 418 S40 53 53 09 73D 707 rImd.EU .L 0 0 1 0 22 59 100 141 15 170C 187 bh*grOsigSm 407 120 73 27 2 0 0 0 45 158 270 351 _#w_wIavm P 0 0 0 1F 2.s 20 Jo AV 20 AV MwwfCtA_ /0E Wl IIY 310 381 3W lodooeouKEARgftuu1m 0 0 0 0 0 0 0 25 115 292 Sl5 At wur is ip4l 149 0 2 29 108 15 203 113 3 3 3 3 W-oTtd 50l 93uuss 960 017 069 91 848 1154 1N5 I1 199 2179 2605 3034 SinpGcllfsf 43 49 04 110 140 3 140 144 145 145 145 14 PNvhiu 55 84 2 91 70 IS 07 40 91 93 4 9 T.6d llh. 1215 1431 1474 1704 179 2410 2624 300 S3 35 428 4792 Nut l sIm ssisr Tat 30 2S 405 451 448 20 101 229 34 300 373 391 Exe mpmlkrLot1 -43 -10 -20 -4 0 -I 0 1 ?uP mlb 31 0 0 101 137 IS2 9 5S 78 124 123 127 133 UIE CORIIOtA T 317 279 312 257 268 140 105 ISI 240 238 24* 28 SW bNu 317 SO* W 1175 147 14060 4700 1918 25 239 204 2900 Abcdllm of Mt bum N*mtb-muMuTm 317 219 312 287 265 10 1405 I51 240 238 248 28 spomP I 1i!1m 1 $ 42 47 40 44 2 0 023 0 36 37 3 ioep.revlmywp SO 50 so s0 SD SD 50 50 SO 50 SD 50 0Wvid"6 71 7n 77 114 116 110 110 154 1S4 154 IS 154 Olwd_mtPr¶v 1492 1400 III 11 40 * -25 ' 0 48 55 65 UAdbos sod 5 so s0o SO 0o s0 96 so so s -75 - ISUIAL AM NOUNS fE#m6U PBET ASSM ~ ~ ~ ~ CO* 2134 43 S200 431 1464 ISM S6 140 101 170 170 170 --amnmLpou f 1170 1290 14927 1519 I585 19204 210 581 34 44319 SW082 5SW27 Rooeutbw1Zb 403 271 412 13 300 300 300 300 300 300 300 300 Eqitypvblo 25 100 134 109 IS 1 ISO 15 0 150 15 05 150 150 fiUdAtb 108 328 312 70 113 90 50 0 10 15 1 ONWAstse 13 20 14 392 7025902 11025 5 25 25 25 25 dwouliclP. o 3522 7M00 9000 110 OTALASTS IS08 1S2 21069 2W 2502 31240 34327 3 S226 40 45714 S147 S5 3u*UdMlUnITTrumtscm 201 313 241 841 150 150 IS0 150 15D ISO 150 150 W f Lo m (C 4426 4422 5249 012 71 1M9 OM5 O89 9725 10608 11131S 11914 Tem oepoWparIoa) 10 2944 300 43 5 0 5000 5000 SW 6702 7100 7455 7828 Te,m0sfs setwoldsA ) 248 487 9 97 1300 1400 1I0 100 1700 10 1900 2000 "m _cwrosutoSL 791 828 112b 1077 900 Q0 ON 0 900 90 OM 000 pi insforftl 31? 317 242 304 314 365 30 014 tO9 741 0 911 Dbids 77 77 1? 116 116 116 110 154 154 54 154 154 MAfinX 1705 1140 575 210 0 0 0 0 5000 2500 3500 4300 1 _Iwebd%Wl*U EsrwltW 5 8 15 149 447 111 1189 190? 2104 2381 2819 AMIOM ~~~0 0 0 0 0 lEt. NW4W* W*s4 IIORofkwolng 0 0 0 0 0 0 0 0 710 25m s1 531 biU)Dofteb 1M00 1000 1000 I000 1000 1000 1000 1000 1000 1000 1000 1000 FAIl 2550 483 5870 6710 7150 $70 80 8M 8790 O 0 8100 8 670 Equity SIus sEqity 1100 1100 1100 1050 I650 105 1050 2200 2200 2200 2200 2200 S PrWI" 151 193 240 280 324 33 389 302 428 453 500 53 OwpmtPrbn S77 3 920 408 04 0 644 619 09 717 712 8 1dlo"ute o vIw E SO 50 so so 50 so so so 50 50 so so 50 TOTAL LIA ITIS 150I7 124 210 20 2928 31240 32 32 408746714 51477 S0 TWI 3C (CFAFffM1 AS_1 ofIuNI U,dtEqUI. V 1100 1200 120 1200 1250 1400 1500 1500 0_sDtmqn 0 0 0 0 0 2412 540 4000 4000 4000 40 4W0 O ud qLe"LmpeOdlo 1170 12970 14027 13I 22654 2 307 J 581 396 44319 58 SW7 Shlttam 5M0 2050 7 220 3101 40 4302 47 5112 521 S002 840 IIdlwutem 1721 300 3715 4402 4275 395 419 60 5537 0O 712r *13 ShW~~~UCWUA N W NoY -w 1W il Lgwerm 4259 7824 9615 12071 141* 1581 18414 21392 24837 281S 33314 37l4 am f*&% W4 U U a 0 U 13 MN WE JIM .ini .- Lw RodusneLmPilo 9.90L 1W123 Q03 9.! t 9,423 WM 142 3 3 253 8213 CtofF_ £713 £333 lOU 2.011 £332 4311 3JS4 4233 t4.S 0 4.734. Avsq.Sgwu 6.2030676 7*03 6.3 011 924 4243 4.10 4.13 7U 1453 fl_bmmm lbutt" Imlu-tu DOutCsWeptUo 0ad 078 082 1.28 . 3.00 257 2*1 207 220 1.95 18 Dsbt3XotTdapmlclm 2369 12*85 801 2.02 0M WN. IO U22.1 4613303 401X 40L9.9OIX NOWlbC tPovlm XoIl.mPttl 70 2.4431X232.003IW IJ 1.9003 5*0 1.7113 1*3 1*731 IJ5 S. Rann6b1 0 13A1 1&413 10.1 11.13 03 3 4S 7.103 093010 7.11 - 76- To,S WEL HhUUcIAM ANOUSUIEHELOPIUIT 9RW -W de I1nw do ~dg amI) _________________1_ 1*0I I lA s iI i m l h~~tveubmCs ~ ~ 9*03 1.0 905 1 93 1003 1003 1003 10031 10031 100310015 IrAetwte~~~~~~~~~~~~llC 91 ml htgrggan wt Tom Low2 9M 100I 133 1*20031 IO OS 950303.OX3OM "X03 btuaaulndlgmTamLg 1100319*030 11110 31003 9.9 tWW100313.0903903.0 mstse diTmi TmLew I113 11I13M I1IIO O4 0 1m03 0O3 Om 1003 OI3 Whavt aLmU. 47I3 4.1 4M 170M 4.5014 50 5.00350310031$S0 5003 S liinr,amhpsst I3S 05031 M7.3 9.4 S00100 100S 100 AM031030 11*0sbmWJPflL 7103 73 7 7103 7103X 70 703 703 753 750 750 A4rab"Amiam oar ar NaW der dear der ear hist EAORNhiuh 7103 70 73 ?10 ?3 71 710 710 703 703 7D 7.0 COSt at 61d PirikUI 2003 200 200 2003 _ _ _ _ _ _ _ _ _ _ _ _ _ _ l I I 1 f 3 ow 1 I ow 131 ff Om 3gmt 1? 120 73 27 2 0 0 0 45 15 M 3 1 s4i"m 9 0 0 U 0I/a As3J AV W JJE SUTOTAL 107 120 75 27 2 14 213 240 26 397 S10 01 Bomb 505u 5o 9s 0 0 0 0 0 0 0 200 S4LAW 0 0 0 0 0 0 I I 0 0 0 0 Ml-WAL 5o s6 545o 0 0 0 0 0 0 0 20 TOTAL 732 015 05 392 2 145 213 240 25 S5 7 1SO 763 _~~~~~~~~0 I I_ I 111 I ow I a1|71 Iw i_oI t I" 1ie I" Ion9 I I1 I lip I 100 I 1melOdLoam (up ) tIl 120 14W 1513 IS 1075 1000 7 MM 4130 4002 S217 bcm dO.t _iL.m 122 0 57 m232 0 1021 1194 14155 370 SOIS 605 575 1d 10 1S X OX 70 3 1I 14 1 123 on mumtrAm ma ISO-% Lm wt mdbm ug ia I w v I I l.ty 2 S IS IS Rb GM.A 0o n 9Dg 6"o~~~~~~~t Gr ew O O O O - 77 - TodID"pt414 to Il_A"A: 3M tb lt-bv b'~SdoIIo:m M 0 I= I Tld SW ls|m_ 9 C." IOU 1 W 1 " 1 1 19 1 d fuw 1 1_ _ 9 " 123 1 13 IM 1 14 113 EiWddIWYIGg 1 1982 0.0 0 W6 195 13 I54 1. 355 14& 121 * [ 3 US 0.0 0 69 9.9 9 3 1? 75 73 45 O 2 4 44 4 0 1 7.4 S9 1 Sb 2 13 ShIld 360 40 0.0 342 410 40 414 532 463 412 323 Sum_d d I*.1 21.4 21514 0* 0* 310 23 319O SHA 347*315*204 2223 O * 2 29 43b 0.0 00 3655 SF0 61.1 02 1I 5573 M2l. 315 - 3 42 28 * 00 r1 4033 433? 3717 360 3317 311u4 212 U i 4 M3 3340 0* 00 2LO 7 50 5 NO 5 M20 4314 36S 265 _Immw*8m3se_mtCmFA 3F) 125M Q30O4 100 145 ? 17 1 9M1 179 3172 3037 1510 10W33 I PllcaC~ex IW*xrlai ex S 1F il al o a r MasC.MIAPUIyIAdSK312 133 13 1.4 3 1 13.7 I 3.9 20 bIs _(wT JAIl _3 262 00 Q0 1 25235 26117 2M3 2624 2827.0 26S 21203 - 78 - AesiS LDIO UWLTL MJuINWAL AI NKMm. EWLOPIUIT SCT o Yi.w SM 1s" I1D I"w l l3 It"w 1995 1io .wluidAcuA_ftim 112 4903 4475 SK0 S725 5245 517.1 5230 482 0 67 00 uryFe. 13X 404 45 5. 57 52 5.2 5.2 4.0 3.2 1.0 10 Prfw IWi*MC#A (pm: GoWv) 00 81r,tNstwc 103 11III8 0,0 117.0 108.4 159.5 14b 51S 3.4 1282 86 23.6 WoterSqpIy 4.0 573 0.0 SU 40 M 24 70.7 022 0.1 61I 42* 113 s"Mrew 45 2*6Q 10 310 442 4)A0 5 37.9 3S 31.7 2D3 51 Elbcadty I 4I 45.3 Q0 447 G4 42 60.6 0S7.7 S4.1 385)102 ODWOVIW&?IOL 0.0 2219 00 24.0 W 322 2.5 303 20 29 10O 41 udPr"_wstln "0 2754 10 27.0 402 3180 35 37.7 345 32.9 225 81 *sWWaft+ dLu Prepudn &1 29252 10 30O9 437. 4172 38S 407.1 351 33 223 0M4 VATanWaft 73 204 1o 21.1 30 292 20 25 251 23.0 157 42 SW"S O 1NS 161 2.3 25.0 25.0 24.4 215 202 1A 3* 00 rwketingI,qpmnXs 133X X ,4 42 1 41 0 14 22 00 Pi sC dt 10s)31C.b s W 3131 1 3 42.3 44* 40* 49 378 0 2217 0 TOMa Exuondl (esmim CFAF) 215 721 471.9 O0R 11220 10473 1001.7 10313 O0 7 M 37 71.3 McCsntlnpncyRsis(CsiA) 73 233 73 73 73 73 73 7x 73 73 73 hwCmoln,uuWm 12 13 1.4 15 1.0 1.7 I 2.0 1t 2.3 ToW lsbpendftm(amvd FAF) 345 12414 570 12713 157 1571.7 140. 17M 10722 1447.0 7737 1 (CFAFMft) tdel~~~~~~~~~~~~~~Tl . - . b~~~~~Rt M ce 21A 785 -5 -1271 -174 951 1287 1006 1252 1381 20 19g Cwiud:ubw l -5 -1849 -2023 -1072 215 1221 2473 38S4 S$7 7JS 0t1M: GrowdYoff 1 343 1190 -204 572 -177 424 985 IIS0 11Wb 110b 11* 11* rnidYVof 2 314 (40 -121 -3S -241 138 513 02 00 0 (40 SruadYoft3 31) 760 -14 -27 -333 109 W5 724 Pat%O Ie 252 lo1S -374 401 -57 lig 77 955 lOIJ 101$ 101 101$ PMt.dI)I2 34 1 -255 -75 -7S -201 990 13b 1474 1474 1474 PdeOIe 3 34 252 -319 -1014 -1059 -5 013 1711 iS. 203 95 -149 -490 431 -311 SOO 637 935 O R~l l h w I II 320 -123 -33 -40 - 1* 270 320 Rf"02 &I 287 149 -446 -5 -301 15 RWMPS _4 131 -101 -4 -502 -320 - 79 - Armw5 IMNIAL AM N_SI UEVUAPf US hnsftblnKind I15SO 7.0 10 10 10 10 10 17.0 17.0 17.0 $?A VW" odW305*20*505*5050 I 50 400410 410 410 PdUt RostW 010 4* 5 50 500 50 5* 00 10 a0 10 Told Stwctwn 1 m(CouA lCFAF) 37 n o low 100 low 1010 1010 1070 10.0 1* 107 PrimcC.dnnyfP* (O'. Co"X ) 7x 2X 73 3X 73 7X 73 73 7S 73 7X PVi0cu IwCy1 12 13 1.4 15 1. ? 1 20 . 121 23 Told ducre Expuu(OirreiCfA) 22602 10 139 1417 1511 1702 121 WA7 32 MIS 133 hteromLom W7 I5S Ol 192 4 265 1545 04 ISO 1S IS& 1S Told Iqerieu EWuinltur 1S43019 11820241 37332.724*m 344.3?NU no N 3073 301.9 ToWb lIOU 195 399 3993 190QIO OW 1995 1990 0907 tCl 14 4 9 4 9o -1471-0 504 003 790 05 103 160 IS* OmuIeNltuRiw 4 -211 -6 -2100 -1137 -379 Yl IS? 353 4 CUhFb S-C"Ist"auof 1 11*0 390 41* -131 -50W 1 0 7? 115 l1o lmewu . of Ren 26 Ni. Tomd 1OM 19 19ow 1ol I9W I99 I9t" 39 O9M I9"7 Asmiftiowbi 1Is 412 14 12 in huEd fth~pdRapiMO4u 4 3M 50? ~*.tuig De. 210 402 1901 263 150D 53? Annex 6 - 80 - Page 1 SENEGAL MUNICIPAL AND HOUSING DEVELOPMENT PROJECT Training Program and Technical Assistance A. Training Program for CUD's Technical Department (STCUD) 1. STCUD's Human Resources. STCUD is facing various difficulties related to human resources which can be summarized as follows: (a) Senior management's education and training are satisfactory with regards to technical skills. However, the majority of the higher level managers lack experience in the management of municipal services. Imprcvements are necessary in topics related to municipal organization, public service management and administrative law. (b) STCUD is experiencing a severe shortage of -,Iddle management. The very few individuals currently in charge of the leading operational teams are technically poorly skilled and lack experience and training in the basic skills of team leadership. (c) Operational staff are plethoric and generally uneducated. Many of them have practical experience of the tasks they are assigned to but lack the professional background that would be necessary to carry out these tasks efficiently. 2. In addition to these problems, each major division (Chart 2) is experiencing specific dysfunctionalitiess (a) The division in charge of the administrative and financial management of STCUD is a key element of the entire organization since STCUD comprises two-thirds of CUD's personnel and spends 70S of CUD's recurrent budget and 100l of its capital budget. However, the division lacks the essential skills in personnel management, procurement and accounting. (b) Technical and economic studies are very important for CUD because they have to prioritize the many projects that might be considered to address the urgent needs. However, the division in charge of studies and planning presently 81 - ~~~Annex 6 -81 - Page 2 has many vacant slots and its staff lacks the oxperience of municipal services. (c) Supervision of the services which are contracted out (street lighting maintenance, public water supply, and solid and liquid waste management) is typically poor In the absence of staff experienced in the delivery of these services. (d) Experienced manpower is available for the maintenance of infrastructure and public facilities. However, the efficiency resulting from the practical experience could be Improved by a more comprehensive technical background. In addition, teams need to be strengthened especially for the road maintenance. (e) The division In charge of Dakar's numerous gardens and planted areas is short of staff with professional background in gardening and horticulture. (f) The maintenance of vehicles and civil works equipment, especially those which will be supplied under the project, would require more experienced mechanics and professionals from other specialties such as body repair, painting, welding, etc. 3. Trainint needs can be summarised as follows: bivision position Traininm All Senior management Municipal organixation decontralization and administratielow1 Municipal mnagement: Administrative regulation., public accounting and financial manament Trainin periodl In foreign munlepal Y1ddle management Managerial skills and upgrading of technical skills Administrative and Middle mannngent Personnel, procurement and aecounting financial Operational staff Basics in low and accounting# secretarial skills, f iIng and public relations Studies and planning Middle management Economle appraeial and Investment planntng Draftaumn Specialization ( el*ctricity) -82 - Annex6 Page 3 Dlvision Position Training Sup rvIslon ot public Middlo managment and Basle training In water supply, street utIitles operati on&l *tatf lighting end solid and liquid waste manaement ClvlI works Yiddle management Work safety Operationrl Staff Upgrading skills for various protccslons (masonry, plumingp, carpentry, welding, etc.) and basic maintenance of equipment *uch as alr condItioners, telephone, tc. Vehicles and special Middle managment Inventory management qulpment Operational statf Mechanics body repair, painting, *eectrIcity and welding areen aroea Operational staff Basic horticulture and speclalled skills In plant nursery, flower cultivatlon and gerdening 4. The prioritization of the training needs to be addressed ha been based on the following principles: (a) the priority training program would not necessarily address the most widespread needs but should target individuals who already play a key role in their division's performance; (b) beneficiaries of the priority train$ng program should be in positions allowing for them to spread the skills which would result from their training; (c) consistent improvement and strengthening of the entire STCUD at the same pace would be preferred to a division by division approach; and (d) availability of a training Institution and the practical possibility of gathering a relevant group of trainees would obviously be taken into account for training actions based on seminars and courses. 5. The greater part of the training program is expected to be implemnted with the help of existing local training institutions. Terms of reference have been drafted for each element of the priority training program. A rapid and informal consultation of several local institutions has shown th -t they would be able to fulfill the requirements of most of tese terms of reference. Studies and pilot training actions are currently ongoing under the Technical Assistance Project for Urban Management and Rehabilitation and will provide additional background especially on local training capabilities before the implementation of the project. 6. The priority training program can be summarized as followss -83 - Annex 6 Page 4 Titl- Oblectveo Ipwa A5fni5tilon Do.ntralilation Undertandl the Senior management Seminor - fiv* days contx of aun lotpl development Municipal aecounting Uplementing efficient Senior managSemet lSminr - eight dys accountancy Tam leadership Loading work teams Middle management Semnaor - five days more efficiently Porsonnel mnagement Identifying lssues of Senior snd middle Smlnor - fIvo days personnel policy mnagent Role of training Implaenting a Sonlor end middle $emlnar - fIve days training program managemnt Basic procurment Improved knowledge of Middle monagement Semlnar - four days law, regulation and procedure Basic accounting Practie Clerks Tralning period - ten days Contractors' Contract Implements- Middle manamnt Training period - 3upervielon tlon, supervilson and sc sIx day and reporting operational staf Work safety Praetiee of basic Middle managemet Training period - safety guidellns three days Maintenanc of sir Routine maintence Opertional staff Prectleal - four conditioners and brakdown da" detction Maintenance of electro- Routin mintenance Oprational staff Pratical - ten echanical equipmt and brekdown de" detection Maintenace of gros Basic rdening Operational staff Training period - are technl fIve dea B. STCUD's Tchnical Assistance 7. STCtD has recently been reorganised (Chart 2) and maagers are encountering mnay difficulties in Implementing the new organization because of inadequate staffing (par"s. 1 ead 2). Although the training program would be xpected to improve substantially the efficiency of STCUD'. human resources, a few key p*sItions need to be temporarily strengthened by technical assistance in order to allow for immediate -84 - Annex 6 Page 5 effectiveness of functions which relate linter alial to execution of the project and for on-the-job training of permanent staff in charge of these functions. 8. Three experts with the following terms of reference would be necessary during the first two years of project implementations (a) Advisor to STCUD's Director General. A civil engineer with specialization in road construction and/or building with a minimum of five years' experience in supervision and execution of urban development projects, preferably in Africa. This expert should have some knowledge of work planning and organization and of practical training techniques. He will assist STCUD's Director General in implementing the reorganization and more specifically: (i) propose execution methods for the various tasks under STCUD 's responsibility (force account or contractors); (ii) elaborate on the existing organization; (iii) organize the operational divisions and particularly divisions in charge of studies and planning, and of supervision of public utilities and contractors with special emphasis on the revision of existing contracts; (iv) improve the procurement procedures; (v) implement analytical accounting; (vi) assist the division managers in periodic reporting; and (vii) supervise the implementation of the trainaing program. (b) Advisor to the Chief of the Vehicle and Special Equipment Division. A mechanic with a minimum of five years' experience in managing the maintenance and allocation of special equipment and vehicles in a civil works public department or in a private civil works company. This expert shall assist his counterpart in: (i) managing equipment allocation and cost recovery; (ii) implementing maintenance workshops; (iii) proposing routine maintenance programs; (iv) training middle management especially in failure detection; (v) proposing detailed job descriptions; and (vi) preparing annual budget proposals. (c) Advisor to the Chief of the Civil Works Division. A civil works technician specialized in infrastructure with a minimum of five years' experience in a similar position. This expert will assist the chief of the Civil Works Division ins (i) organizing routine maintenance of the various infrastructure and public facilities; (ii) proposing job descriptions and operational procedures; (iii) preparing annual budget proposals; (iv) training middle management; and (v) periodic reporting and performance evaluation. - 85 - Annex 6 Page 6 C. Traffic Bureau's Technical Assistance 9. The Traffic Bureau has been supported by technical assistance since inception under the Technical Assistance Project for Urban Management and Rehabilitation (Annex 4). Experts' performa '- has been satisfactory regarding data collection, equipment purchase au preparation of urgent work programs, but remained short of the objectives in on-the-job training because the Government has been unable, until recently, to assign full time regular staff to the Traffic Bureau. The Government has now committed itself to adequate staffing and sheltering of the Traffic Bureau. Meanwhile, implementation of the project would require technical supervision of a substantial civil works program by the Traffic Bureau. The technical assistance should therefore be extended for another four years. 10. Terms of reference of the two experts would allow for the continuation of experts provided under the Technical Assistance Project for Urban Management and Rehabilitation. More specifically, both experts would have the same core background in transport engineering and economy, with a minimum of five years' experience in transport project implementation, preferably in Africa, including project technical and economic appraisal, civil works procurement and civil works technical supervision. One would be specialized in traffic management and the other in public transport management. Both experts would train and assist the staff of the Traffic Bureau ins (i) completing technical and economic analysis of the transport sub-component of the project (Annex 1, paras. 20 to 21); (ii) preparing bidding documents for the procurement of civil works required for the implementation of the project; (iii) technical supervision of civil works; (iv) medium and long-term planning of the transport management and the transport Infrastructure development in the Dakar area; (v) monitoring transport and traffic in the Dakar area by maintaining linter alia" a relevant database; (vi) implementing routine procedures of the Traffic Bureau's operation; and (vii) periodic reporting on the Traffic Bureau's achievements and performance. - 86 - AWAx 7 ?UUCIPAt tl HOUSN DEVELP9ET PRCT --~~~~~- -- A o-'eds1 n Mlleon) P.I0r oCtuY/Ehmut P64gs RAs. ICa SLCubu1 p CAt. TOb OVA Warb nmdl AubhtggI 3 tV13 18.06 18.06 (13.75) (13.75) F.WtyA.hiittm I CU 362 3.62 (3CS8) (3S) Cm Wit EEp*mt I CUD 53 583 (3.43) (3.4) PsIk Fmry Ew*mmb 3 CUD 1.16 1.16 (059) (059) C4ffvA,s I ?EFIDC 1.07 1.07 (OiO (0.63) Cartp'qhy I lIE 1C 0.62 0.62 (0.3 (OM37) Vdddbs 2 PU 0.19 0.19 (O.tl1) lO.tl) Nll __ll 6 PU 0.94 0.15 1.10 (0.67) (0.10) (0.77) C*dM SWVf T.dca Aulmb CUD I CUD 1.13 1.13 0.00 0.00 Te.. A. Trafrc Iu MMEfB 1.49 1.49 0.0 0.00 Trab4CtUD 3 Oh 0.25 025 (0.18) (0.18) Tod#c Asuc Csdhtr 1 IEFfOC 0.1 0.51 0.00 0.00 cwt h 1 lF/DC 2.87 152 4.39 (2.15) (1.22) (337) Skuihs,Att 2 PU 0.66 0.66 (056) (0.56) q(*"Cnb PU 037 (037) PPFW ad Ilmtud PU 1.33 133 (1.33) (1.33) LIM or c& HS 36.33 (167) TOTAL 25.9 2.30 7.35 0.15 624 78.32 (IDA) (18.17) (168) (5.73) (0.10) (329) (46.00) - 87 - hAnsx 8 Tab!. I SUBOAL MUllCIPAL D OSin BDELOPUE T pOJCT Dbursement Scheul emster Ending MCF BES Lou Other Total Omni. %(1) %(2) FY89bsceabOr 0.7 0.7 0.7 0 1 June 8.0 12 92 9.9 4 21 FY90 DeceOber 0.7 2.1 2.7 126 11 27 )une 38 2.3 6.1 18.7 19 41 FY91 Dec_mer 1. 26 3. 22.4 28 49 Joue 1.3 26 4.1 26.5 37 3M FY92 December 0.7 2.9 3. 30.1 47 65 June 2b 26 323 36 71 fYf3 Deeber 02 2.6 23 35. 65 77 June 2.1 2.1 376 72 82 FY94 Decoembr 02 2.1 22 393 79 87 June 1.8 IS 416 85 90 s December 1t 1.5 43.1 'A 94 June 12 12 442 94 96 FY96 Deceber 0.9 0.9 40.1 97 98 June 0.9 0.9 46.0 100 100 (1) luum ntProfib - Forr Wst Africa Region 1I3D & IDA Sor Invaedsmeat and Maintenance Loans (2) Disbusement Schoule vith MCF and S loan - 88 - TA e b2 MUINWAL AUD OUSIW UVLiNt PUjUcr Alloai ad Dlof to MA Credit Toal Aaevat I of lsoused of the Ceit 1 Categry Coe A.mad Ie be i neasod --S S smlo) -- MCFFInancing 14.7 333 100% of slected lsm ousig Loams 13.33 13.33 100% Conalnt Services for Cade 132 122 100% of foip (xceptTechnicalAssistance) 80% of local expendiue OperatingCos(Cdutr) 237 2.15 100%offoreiga expedlwture 80 of locale p Traing (STCUD) 025 0.18 100% of foregn apd 80% oflocale nus Civil Worb (CUD Fadlities) 382 3.38 100% oftoa expenitues (not of TOMs and UDes) Ciil Worts (RoMA Re on) 18.06 13.7X 100 of foreigne d 80% of loa e tre Eqipmnt and Vehles 9.90 6.16 100% of ttaes (net of Tazes.d Dutie) OraingCow 1.10 0.97 100% of the Project Uni (netIofTmsandDuties) PW U and Unaloited 1.33 1.33 100% Civil Works (lead doelopnt) 8.33 0.00 0% (S) Tochnical Assstnce 3.13 0.00 0% (CIDA) Totl 7833 46*0 Annex 9 -89 - Page 1 SENEGAL MUNICIPAL AND HOUSING DCVELOPMENT PROJECT Cost Recovery. Replicability and Affordability Cost Recovery 1. Project costs would be recovered Chrough direct or indirect cost recovery mechanisms. About 312 of the total cost vould be recovered directly from property sales and housing loans' repayment. The remainder would be recovered indirectly throughs (a) fees and user charges levied by local government under projects financed by the Municipal Credit Fund (MCF) (21Z); (b) local taxes collected by the three 'communes' of the Dakar metropolitan area (301); and (c) general taxes collected by the Government (181). 2. The amount of general and local taxes have been determined according to the following principles: (a) all investments related to city infrastructure under the responsibility of the Government would be recovered through general taxes; (b) all costs pertaining to the Project Unit would also be recovered through general taxes; and (c) costs of 'Communaute Urbaine de Dakar" (CUD) technical services strengthening, CUD's road rehabilitation and cadastre implementation would be recovered through local taxes. 3. The direct cost recovery mechanism would only be concerned with the housing component. About 38% of the cost of this component would be directly recovered through plot sales by the land development corporation which will repay loans provided by BHS. The remainder (621) would be directly recovered by 'Banque de l'Habitat du Scnegal" (BRS) from repayment of housing loans. 4. Cost recovery mechanisms can be summarised as follcas Cost Recovery Mechanisms Proiect Components Means of Recovery Al MCF Municipal fees A2 CUD's technical services Local taxes A3 Transport: CUD's roads Local taxes Other General taxes A4 Fiscal cadastre Local taxos B1 Land development corpmration Plot sales B2 Housing loans Loan repayment by borrowers C2 Project Unit General taxes I -90 - Annex 9 Page 2 Replcability 5. The land development corporation's ongoing activity would replicate development projects which need to be financed during the corporation's starting period (SAR, para. 2.28). If the corporation's development and marketing activities continue at a regular pace, there is no need for renewal of borrowed external resources after the three year starting period. This would ensure full replication of the development projects' component. 6. BHS' ongoing activity, after xpected suspension of credit restrictions, should not only replicate but even increase the loan amount financed by the project during the transitional period (1989-91). The project would help BHS maintain its lending activity and implement new resource mobilization efforts during a period where the conjunction of credit restrictions and structural changes in BHS' balance sheet would jeopardize its lending performance in the absence of external support. 7. The rehabilitation of infrastructure and public facilities financed under the project would not be directly replicated but implementation of the fiscal cadastre is expected to result in additional local tax yield allowing for ongoing maintenance of CUD's infrastructure and facilities. This would theoretically reduce the need for further rehabilitation investments. A.ffordability of New Plots 8. Tho land development corporation is expected to supply between one-third and two-thirds of the demand for new plots. The target group would mainly comprise households between the 40th and 90th percentile, taking into account that a large proportion of the low income households would indirectly benefit from the new sulply of plots in the following way: most low income families, especially young people recently settled in the Dakar area, rent their dwelling from self-help developers who have built extensions to their own houass in order to draw some additional income from rents. Therefore, the demand for new plots involves the demand for owner constructed houses and for the most part, the demand for new rental dwellings. 9. In the absence of any recent comprehensive study on the distribution of household incomes, it is difficult to assess precisely the affordability of the proposed plots by the target group. However, on the basis of the income distribution for 1979180 presented in the Urban Sector Memorandum of June 1983, standard 1 plots (392 of the total supply) would be affordable to households between the 33rd and the 56th percentile (average income of CFAF 74,000 per month), standard 2 plots (another 39S of the total supply) would be affordable to households between the 70th and the 82nd percentile (average income CFAP 136,000 per month) while the rest (standards 3 and 4 for 222 of the total supply) would be affordable to households ovat the 88th percentile. In addition, extensions built on standard 2 plots would be affordable to - 91 - Annex 9 Page 3 households below the 10th percentile &ad extensions built on standard 3 plots would be affordsble to households between the 10th and the 30th percentile. This is based on the assumption (pessimistic) that Incomes would not have increased In current term since 1980. 10. For the purpose of assessing the affordability of plota, it is sasumed that: (a) households would be willing to pay up to 20S of their monthly income for a standard loan (15-year repayment at 8.52 for low cost housing and 91 for standard 4) including dwelling construction costs; (b) households would also pay a cash down payment of 30X of the total cost of their dwelling (plot plus construction); (c) the average construction cost of a standard dwelling would be 2.5 times the plot cost; and (d) the average monthly rent of an extension is 152 of the monthly debt service resulting from the financing of the whole dwelling. - 92 - Annex 10 SENEGAL MUNICIPAL AND HOUSING DEVELOPMENT PROJECT Economic Analysis Transport Program - Rehabilitation of CUD's Collector Roadu 1. The economic evaluation was undertaken by the Traffic Bureau (Bureau de la Circulation) and was based on a comparison of discounted values of cost and benefit streams generated by the component, all without taxes and duties. Cost streams included the following: (a) civil works, pre-investment and detailed engineering studies, project monitoring and physcial contingencies; (b) routine and periodic maintenance costs which may vary according to type of vehicles using each road section; and (c) the technical assistance cost of the ',omponent. Benefits were derived only from savings in vehicle operating costs including estimated gas consumption savings when the speed and/or the traffic flows are improved through reduction of waiting lines on congested links. Given the lack of reliable data, no time values were applied to bus and car passengers travelling for work related purposes. The foreign exchange component was shadow-priced at 0.72 (average standard conversion factor utilized for Bank projects in Senegal). 2. Two vehicle categories were distinguished throughout the computationt (a) public transport vehicles comprising of: (i) the parastatal bus fleet; (ii) the private companies' bus fleet; and (iii) the taxis; and (b) the private transport fleet comprising the trucking fleet and other private vehicles which have been lumped together. For these four types of vehicles, separate operating costs were calculated. 3. Economic rate;s of return (ERR) were not calculated for each of the 58 road sub-sections to be rehabilitated (ranking from 200 to 2,600 meters) but for two sub-programs, namely the collector roads network for both Pikine and Dakar. These two sub-programs comprise about 68 km of road rehabilitation with 20 and 48 km for Pikine and Dakar, respectively. The ERR is estimated at 23% for Pikine and 32% for Dakar. The consolidated ERR for the two sub-programs is 28%. A sensitivity analysis was conducted by exploring combinations of 10% increases and decreases in investment costs, recurrent costs and benefit. Results show that if the estimated benefits are 10 less than anticipated and the investment and maintenance expenditures 10% tmore, the consolidated ERR would drop to 19% and the sub-programs for Pikine and Dakar to 14% and 22%, respectively. These figures are still acceptable and confirm the relevance of improving the road surfaces, the characteristics and intersections of CUD's collector roads network. -93 1 Znx10 Table 1 SENEGAL MUNICIgtAL AND HOUSING DEVELOPMENT PROJECT CUD's Collector Roads - Costs and Benefits Ytar ICoital Cost TA IMaintenanc Benefits I BlanceI 3 Foreign 422 902 42% 2 802 PIKINE 0 504.4 13.2 0.0 0.0 -517.5 1 13.2 5.7 178.4 1595 2 13.2 5.8 179.7 160.8 3 13.2 51.7 181.1 116.2 4 0.0 51.7 182.4 130.7 5 0.0 97.6 183.8 86.2 6 0.0 143.5 185.1 41.6 7 0.0 143.5 186.5 43.0 8 0.0 6.0 187.9 181.9 9 0.0 6.1 189.3 183.2 io 0.0 52.0 190.7 138.7 11 0.0 52.0 192.1 140.1 12 _ 0.0 97.9 193.6 95.7 DAKAR 0 787.7 20.6 0.0 0.0 -808.3 1 20.6 13.1 343.9 310.2 2 20.6 13.2 346.4 312.6 3 20.6 84.9 349.0 243.5 4 0.0 85.0 351.6 266.6 5 0.0 156.8 354.2 197.5 6 0.0 228.5 356.9 128.4 7 0.0 228.6 359.5 131.0 8 0.0 13.8 362.2 348.4 9 0.0 13.9 364.9 351.0 10 0.0 85.7 367.6 282.0 11 0.0 85.8 370.4 284.6 12 _ 0.0 157.5 373.1 215.6 94 -Annx 10 Table 2 MUNICIPAL AND HOUSING DEVELOPMENT PROJECT CUD*s Collector Roads - ERR Calculation OCAF mIllion Vo.w Pikine I ekr Total I 0 -517.5 -808.3 -1325.9 1 159.5 310.2 469.7 2 160.8 312.6 473.4 3 116.2 243.5 359.7 4 130.7 266.6 397.3 5 86.2 197.5 283.7 6 41.6 128.4 170.1 7 43.0 131.0 173.9 8 181.9 348.4 530.3 9 183.2 351.0 534.2 10 13&7 282.0 420.7 11 140.1 284.6 424.7 12 U 95.7 215.6 311.3 PrntiValuedt 103 301.5 1 861.7 1 1163.2 ERR (bas) C 233 323 283 nsitivityAnlys Hi I H2 H3 H4 Investmenr +102 -10% -10 4102 flalntelnan -102 f 102 -102 +10% Bunefits + 102 -10% 2 10% -102 ERR(N) 25X I 34X 1 30% ERR(H2) I 20% I 302 I 26%21 ERR(H3) 322 1 432 I 73792x ERR(H4) 142 1 22% 19% 95 Annex 11 Page 1 SEIIEG MUNICIPAL AND HOUSING DEVELOPMENT PROJECT Selected Data and Documents Available in the Pro1ect File A. Sector or sub-sector reports and studies: None B. Project related reports and studies: 31 Projet de Gestion et de D4veloppement Urbains, Rapport d'Identification, Ripublique du Senegal, Minist;re du Plan et de la Cooperation, decembre 1986. -2 Projet d'Assistance Technique pour la Rihabilitation et la Gestion Urbaines Politique de l'Hab4tat, Etude du Financement du Logem nt, Rapport Alt OTUI-UNFOHLM-BPAD-OTH Habitation, fevrier 1986. 33 Projet d'Assistance Technique pour la R"habilitation et la Gestion Urbaineo Politique de l'Habitat, Etude Relative ; la Creation d'une SPDEU, Rapport B2; OTUI-UNFOHLM-EPAD-OTH Habitation, f6vrior 1986. 34 Projet d'Asistance Technique pour la Rihabilitation et la Gestion Urbaine: Politique de l'Habitat, Etude du Factibilit;, Plan d'Urbanisme Patte d'Oie Sud-est, Rapport 34: OTUI-UNFOHLM-EPAD-OTH Habitation, mai 1986. B5 Projet d'Assistance Technique pour la Rahabilitation et la Gestion Urbain.s Politique de l'Habitat, Etude du Factibilito, Plan d'Urbanisme Grand Yoff Sud, Rapport 34s OTUI-UNFOHIM-EPAD-OTH Habitation, mai 1986. B6 Plan d'Actions Prioritaires eour la RialiLation du Plan de Circulation de Dakar, Ministere de l'Equipement, Direction des Etudes et do la Progr_mation, mai 1986. B7 Etude de Factibilito du Cadastre Fiscal - Zone Tests, Rapport Final, Ripublique du S;negal, Ministere de l'Economie et des Finances, Direction du Cadastre, novembre 1986. - 96- - 96 ~~~~Annex 11 Pagoe 2 B8 Banque de l'Habitat du Senegal - Forces et Faiblesses de 1'Institution, Rapport de Mission, Benoit Fournial, juillet 1987. B9 Le Compte de Credit Communal - Mission d'Etude, Victor Chomentowski et Michel Durand, juin 1987. C. Implementations No Implementation Volume - 97 - naj Urbaine de (=MMU) ==fi0ai~~~~~~~~X XX PRESIDENT OF CUD C-'s EXECUTIE ........... 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