Document of The World Bank Report No: 22893-MAU PROJECT APPRAISAL DOCUMENT ONA PROPOSED CREDIT IN THE AMOUNT OF SDR 55.8 MILLION (US$ 70.0 MILLION EQUIVALENT) TO THE ISLAMIC REPUBLIC OF MAURITANIA FOR AN URBAN DEVELOPMENT PROGRAM September 26, 2001 Water and Urban II Country Department 15 Africa Regional Office CURRENCY EQUIVALENTS (Exchange Rate Effective May 31, 2001) Currency Unit = Ouguiya (UM) UM 1,000 = US$3.86 US$1 = UM259.10 SDR 1= US$1.25568 SDR I = UM325.34 FISCAL YEAR January 1 -- December 31 ABBREVIATIONS AND ACRONYMS AFD French Development Agency (Agence Fran,aise de Developpement) AMEXTIPE Agence Mauritanienne d 'Execution de Travaux d'Interet Public pour I'Emploi (Implementing Agency) APL Adaptable Program Loan CAS Country Assistance Strategy CDHLCPI Human Rights, poverty alleviation and lnserton Agency (Commissariat aux Droits de l 'Homme, a la Lutte contre la Pauvrete et a I 'Insertion) CNH National Center for Hygiene (Centre National d'Hygiene) EA Environmental Assessment EIE Environmental Impact Evaluation EMP Environmental Management Plan ERR Economic Rate of Return FMI Financial Management Initiative GIE Economic union (Groupement d 'Interet Economique) GTZ German Aid Agency HIPC Heavily Indebted Poor Countries IAPSO Inter-Agency Procurement Service Office of the United Nations Development Program ICB International Competitive Bidding IDF Institutional Development Fund IDA International Development Association LACI Loan Administration Change Initiative LARAP Land Acquisition and Resettlement Action Plan MEAD Ministry of Economic Affairs and Development NCB National Competitive Bidding NGO Non-governmental Organization NPV Net Present Value PCU Project Coordinating Unit PIP Project Implementation Plan PHRD Policy and Human Resources Development Fund (Japanese) PMR Project Management Report PPF Project Preparation Fund PRSP Poverty Reduction Strategy Paper RAP Resettlement Action Plan SA Social Assessment SDR Special Drawing Rights SIE Social Impact Evaluation SOCOGIM Housing Public Company (Societe de Construction et de Gestion Immobilire de Mauritanie) SOE Statements of Expenditures SONELEC Water and Electricity Public Company(Soci&t6 Nationale d'eau et d 'electricite) SRFP Standard Request for Proposals SUEA Strategic Urban Environmental Assessment UDA Urban Development Agency UDP Urban Development Program Vice President: Mr. Callisto E. Madavo Country Director: Mr. A. David Craig Sector Manager: Mrs. Letitia A. Obeng Task Team Leader: Mr. Abdelghani Inal MAURITANIA URBAN DEVELOPMENT PROGRAM CONTENTS A. Program Purpose and Project Development Objective Page 1. Program purpose and program phasing 3 2. Project development objective 4 3. Key performance indicators 4 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 5 2. Main sector issues and Government strategy 5 3. Sector issues to be addressed by the project and strategic choices 8 4. Program description and performance triggers for subsequent loans 8 C. Program and Project Description Summary 1. Project components 9 2. Key policy and institutional reforms supported by the project 11 3. Benefits and target population 12 4. Institutional and implementation arrangements 12 D. Project Rationale 1. Project alternatives considered and reasons for rejection 14 2. Major related projects financed by the Bank and other development agencies 15 3. Lessons learned and reflected in the project design 15 4. Indications of borrower commitment and ownership 16 5. Value added of Bank support in this project 16 E. Summary Project Analysis 1. Economic 16 2. Financial 18 3. Technical 20 4. Institutional 20 5. Environmental 21 6. Social 23 7. Safeguard Policies 27 F. Sustainability and Risks 1. Sustainability 27 2. Critical risks 27 3. Possible controversial aspects 28 G. Main Credit Conditions 1. Effectiveness Condition 29 2. Other 29 H. Readiness for Implementation 31 I. Compliance with Bank Policies 31 Annexes Annex 1: Project Design Sumnmary 32 Annex 2: Detailed Project Description 38 Annex 3: Estimated Project Costs 64 Annex 4: Cost Benefit Analysis Summary 66 Annex 5: Financial Summary 75 Annex 6: Procurement and Disbursement Arrangements 76 Annex 7: Project Processing Schedule 95 Annex 8: Documents in the Project File 96 Annex 9: Statement of Loans and Credits 98 Annex 10: Country at a Glance 99 Annex 11: Strategic Urban Environmental Assessment and Management Plan 101 Annex 12: Resettlement Action Plan - Executive Summary 108 Annex 13: Letter of Sector Policy (translated from original version in French) 114 Annex 14: Picture of the Slums of El Mina 130 MAP(S) IBRD 31361 MAURITANIA Urban Development Program Project Appraisal Document Africa Regional Office AFTU2 Date: September 26, 2001 Team Leader: Abdelghani Inal Country Director: A. David Craig Sector Manager: Letitia A. Obeng Project ID: P069095 Sector(s): UY - Other Urban Development Lending Instrument: Adaptable Program Loan (APL) Theme(s): Urban Poverty Targeted Intervention: N Program Financing Data Estimated APL Indicative Financing Plan Implementation Period Borrower _________ (Bank FY) IDA Others Total Commitment Closing US$ m % US$ m US$ m Date Date APL 1 70.00 70.7 29.06 99.06 01/01/2002 12/31/2006 Government of Mauritania Loan/ Credit _ _ _ _ _ _ _ _ _ _ _ _ _ _ CPLd2 64.00 68.4 29.61 93.61 01/01/2007 12/31/2011 Govemment of Mauritania Loan/ C red it _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ Total 134.00 58.67 192.67 [ I Loan [X] Credit pCI Grant [] Guarantee [ ] Other: For LoanslCredits/Others: Amount (US$m): 70.0 (First Phase) Proposed Terms (IDA): Standard Credit Grace period (years): 10 Years to maturity: 40 Service charge: 0.75% Financing Plan (US$m): Source Local Foreign Total BORROWER/RECIPIENT 11.27 8.79 20.06 IDA 14.12 55.88 70.00 AFRICAN DEVELOPMENT BANK 0.40 1.60 2.00 FRANCE: FRENCH AGENCY FOR DEVELOPMENT 0.60 2.40 3.00 GERMANY: KREDITANSTALT FUR WIEDERAUFBAU 0.80 3.20 4.00 (KFW) Total: 27.19 71.87 99.06 Borrower: GOVERNMENT OF MAURITANIA Responsible agency: MINISTRY OF ECONOMIC AFFAIRS AND DEVELOPMENT (MEAD) Address: B.P. 238, Nouakchott, Mauritania Contact Person: Director of Planning (MEAD) Tel: (222) 254617/(222) 250349 Fax: (222) 254617/(222) 250349 Email: Other Agency(ies): AMEXTIPE, UDA, PCU Address: Nouakchott, Mauritania Contact Person: The General Directors Tel: (222) 257511/(222) 257512 Fax: (222) 257513 Email: SOCOGIM - Fax: (222) , SONELEC - Fax: (222) 525 3995 Address: Nouakchott, Mauritania Contact Person: The General Directors Estimated disbursements ( Bank FY/US$m): FYf 2002 2003 20 04 2005 2006 Annual 7.25 14.57 19.35 14.84 13.99 Cumulative 7.25 21.82 41.17 56.01 70.00 Project implementation period: 5 years Expected effectiveness date: 01/31/2002 Expected closing date: 12/31/2006 OCS APL FAO F1 r R Ma0. ZOO -2- A. Program Purpose and Project Development Objective 1. Program purpose and program phasing: Mauritania has experienced rapid urbanization, from less than 4 percent in 1962 to the current estimate of 61 percent, with more than 67 percent of the urban population concentrated in Nouakchott (about 700,000 inhabitants) and Nouadhibou (100,000 inhabitants). This uncontrolled urbanization is accompanied by poverty, which affects about 35 percent of the urban population, which mainly resides in substandard squatter settlements (271,590 persons in Nouakchott), located on the periphery of major urban centers lacking basic infrastructure and services. The majority of the urban poor are nomads, who have lost their economic base and most of their possessions due to persistent droughts and resulting desertification. The rate of urbanization had substantially exceeded the capacity of both State and municipal governments to extend necessary urban infrastructure and services and generate employment. The Government is, however, strongly committed to taking immediate steps to reduce urban poverty as indicated in the Poverty Reduction Strategy Paper (PRSP). The new national urban strategy and the city development strategies, the reforms on land and urban management, on decentralization strengthening, prepared and conducted after extensive consultation with the civil society and beneficiaries, resulted in a ten-year program for improving the living conditions and promoting employment opportunities in the main towns of Mauritania, especially in slums, and strengthening the urban institutional framework (urban and land management, decentralization and communities' involvement). The Govemrnment is requesting the support of the donor community for implementing this program. The purpose of the Adaptable Program Loan (APL) is to support Mauritania's central and local governments to: (i) improve living conditions and promote employment opportunities in the main towns of Mauritania, especially in slums; and (ii) strengthen the institutional framework and capacity for urban and land management. This will be achieved by working in partnership with local communities and the private sector on a sustainable basis to: (a) provide basic infrastructure in the regional capitals (for 100,000 inhabitants) and upgrading the slums of Nouakchott and Nouadhibou through a ten-year program (for 281,590 inhabitants) that will include access to: (i) secure land tenure; (ii) basic urban infrastructure; (iii) infrastructure in support of economic activities, environmental protection, and employment creation (for 40,000 workers, mainly in artisanal fishery activities, livestock, agriculture, and tourism); and (iv) affordable serviced land and/or shelter (for 100,000 inhabitants) to prevent the development of new slums; (b) provide technical assistance to community associations, Non-governmental Organizations (NGOs), Groupements d'nter&t Publique (GIEs), and targeted micro-credits for (i) land tenure regularization or acquisition; (ii) improvement and/or construction of shelters and latrines; and (iii) income-generating activities (mainly GIEs and micro-enterprises for services and construction); and (c) empower communities (associations and NGOs), enhance decentralization (municipalities), strengthen institutional framework, and build capacity for urban and land management. Program Phasing The APL will consist of two five-year phases. The first phase will prepare the primary infrastructure network; restructure the poorest slum (El Mina) and upgrade three others (Dar Naim, Ryad, and Teyaret -3 - Nord, in Nouakchott, benefiting 163,240 inhabitants); service new land for housing (2000 plots); implement subprojects for protecting or improving the environment and supporting economic activities (impacting 100,000 inhabitants in the regional capitals and 40,000 in Nouakchott and Nouadhibou); micro-credit activities; prepare the second phase of the program, mainly by undertaking detailed studies for the other slums to be upgraded and servicing of land for the resulting resettlement; and strengthen institutional framework. The second phase will focus on providing complementary infrastructure with land remodeling in slums upgraded during the first phase, restructure the four other slums in Nouakchott (Arafat, Toujounine, Tensweilim, and Hay Saken, benefiting 108,350 inhabitants) and Nouadhibou slums (benefiting 10,000 inhabitants), continue the program in secondary cities, and support micro-credit activities and capacity building. 2. Project development objective: (see Annex 1) The project development objectives are the same as the APL purpose. 3. Key performance indicators: (see Annex 1) Progress towards meeting the development objectives of the program would be measured through: (a) Increased access to basic services (increased coverage and consumption of water in slums), from a daily average of 15 liters/person in 2000 to 25 liters/person by 2005 and 35 liters/person by 2010; reduction of water prices in slums, from US$2-3 per cubic meter in 2000 to less than US$1 per cubic meter by 2005 and less than US$0.75 per cubic meter by 2010; improved sanitation, by providing 10,000 additional latrines by 2005 and 30,000 by 2010; increased access to roads, schools, health centers, electricity, services, and social assessments; and dramatic improvements for at least 163,240 slum dwellers by 2005, a total of 281,590 slum dwellers by 2010, and 220,000 other urban inhabitants; (b) Increased access to credit for and results in: (i) income-generating activities (2,500 credits by 2005 and 5,000 by 2010); and (ii) improved shelter and sanitary facilities (7,500 houses by 2005 and 15,000 by 2010); (c) Increased support for economic activities: number of activities created or improved conditions of work (for 20,000 workers in each phase); (d) Formalized links between community organizations and the governance structure, increased involvement of community-based organizations in decision-making, and the provision of infrastructure services (full consultations on urban development plans and participation of communities in service delivery); and (e) (i) Streamlined legislation and regulations governing urban planning; (ii) improved technical and financial municipal capacities for infrastructure maintenance and service delivery (training of municipal staff, increased municipal financial income, and transfer of funds to municipalities); (iii) operational land management and information systems, including the fiscal system (with 20,000 land titles registered and delivered in ten years); (iv) simplified and accelerated procedures for tenure regularization; and (v) positive change in property values and the land market in slums (land regularization with 3,000 titles by 2005 and 15,000 by 2010). -4 - B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 16595 Date of latest CAS discussion: June 17, 1997 The project will support three of the four main CAS priorities (CAS progress report of November 1998) and the main objectives of the PRSP No. 21639-MR presented to the Board on February 6, 2001) on urban poverty alleviation, urban development, and slum upgrading: (a) Rapid, broad-based growth and income generation: The absence of adequate and properly maintained infrastructure and inefficient and costly urban services reduce the competitiveness of Mauritanian cities. The Government is willing to accelerate economic growth through policies and programs aimed at increasing the level of private investments, thereby raising productivity, employment, and income. Foreign-led private sector investment in fish processing, agro-processing, and tourism could be instrumental in stimulating growth and greater competitiveness of the economy. The proposed project, based on PRSP goals, will contribute to unlocking the country's potential in these sectors through improved urban services and adequate infrastructure to support economic activities. Priorities for such infrastructure and services were defined through participatory city development strategies emphasizing economic growth and poverty alleviation. (b) Interventions targeted to the vulnerable and slum upgrading: The number of urban poor is increasing and the lack of basic infrastructure disproportionately affects the poor. In Nouakchott, 35 to 40 percent of the population lives in slums. The Government is now focusing on poverty alleviation, not only through broad-based policies, but also by improving the living conditions of slum dwellers and providing targeted support for income generation. The Govemment is planning to upgrade all slums through a ten-year program. The proposed project will contribute to poverty alleviation through upgrading slums, secure land tenure, access to decent shelter and social infrastructure, targeted access to credit for housing and economic activities, and support for economic activities and job creation. (c) Strengthen capacity to design and deliver pro-poor, pro-growth policies and land and urban management: Weak implementing institutions to support the poor, as well as insufficient local capacity to manage urban development and deliver basic infrastructure services, make it difficult to implement poverty-alleviation policies. The Government aims to develop and support local implementation capacity and initiatives to design and deliver pro-poor activities. The project will contribute to this effort by empowering communities and strengthening decentralization and land and urban management. 2. Main sector issues and Government strategy: Sector Issues (a) Urban poverty: Mauritania has experienced rapid urbanization with the urban population increasing from less than 4 percent in 1962 to the current estimate of 61 percent (1.6 million of the total population of 2.6 million). More than 50 percent of the urban population is concentrated in Nouakchott (about 700,000 inhabitants) and Nouadhibou (100,000 inhabitants). Accompanying this rapid urbanization is poverty, which affects about 35 percent of the urban population that lives a hand-to-mouth existence. The urban poor reside in substandard squatter settlements (271,590 persons in Nouakchott), located on the periphery of major urban centers, and lack basic infrastructure and services. The majority of the urban poor are nomads, who have settled on the periphery of cities (in particular Nouakchott), after losing their economic base and most of their possessions due to persistent droughts and resulting desertification. This population can no longer obtain water free of charge from wells and cover - 5 - minimum food requirements from stock raising and agriculture. As urban dwellers, they can only gain access to water and food by paying what, for the most disadvantaged, are very high prices. For relevant figures on water, see the data given in (c) below; in the case of food, daily expenditure per person is less than UM 100 (US$0.40). The average daily income per person in the District of El Mina is only US$0.5, of which 72 percent is spent for food (including 7 percent for water and 9 percent for energy). Moreover, although traditional links of mutual support have remained intact in rural areas and small towns, they have broken down in the urban environment, giving rise to marginalization or even total exclusion of the poorest people. This is particularly true in Nouakchott, where the scale of rural-urban migration has substantially exceeded the capacity of both State and municipal authorities to extend the necessary urban infrastructure and services and generate employment. (b) The case of Nouakchott and Nouadhibou: The population of these two cities has increased fivefold in 20 years, far outpacing existing capacities for urban and land management, the provision of housing, services, and job creation. Urban growth has been largely haphazard on the periphery of existing cities. These areas are characterized by very difficult and deteriorating environmental conditions, rudimentary dwellings, and the constant threat of expulsion of residents. The poorest people live in locations which are often remote from whatever inadequate social services, minimal urban infrastructure, and jobs that may be available. (c) Access to basic urban infrastructure and services and quality of shelter: The level of infrastructure, community facilities, and urban services remains very low for the most part and is aggravated by disparities between towns and between sections of the same town or city. Ratio of asphalted roadways per 100 inhabitants: This varies from 8 meters (m) to 133 m in secondary urban centers. In the case of Nouakchott, the average figure of 26 m covers a range from 5 m in the District of Arafat (169,000 inhabitants) to 134 m in the District of Tevragh-Zeina (54,000 inhabitants). Drinking water: The population connected to a drinking water supply network varies between zero percent in the cities of Kiffa (60,000 inhabitants) and Nema and 60 percent in Akjoujt (10,000 inhabitants). In Nouakchott, the average figure of 22.5 percent covers a range from 3.45 percent in the District of Arafat to 61 percent in the District of Tevragh-Zeina. Depending on the season, per capita daily consumption of water varies from: (i) 13 to 22 liters in the slum of El Mina (36,500 inhabitants) with average prices per liter of UMO.49 (US$2 per cubic meter) in the cold season and UMO.80 (US$3.2 per cubic meter) in the hot season; (ii) 16 to 28 liters in the District of Arafat with average prices per liter of UMO.54 (US$2.2 per cubic meter) and UMO.76 (US$3.04 per cubic meter). The daily average consumption rate for the city of Nouakchott is 40 liters with a price per liter of UMO.072 (US$0.3 per cubic meter) for connected clients of the utility company SONELEC. Sanitation: Only 32,000 inhabitants are connected to a sewerage system in Nouakchott and 4,000 in Akjoujt. Most housing units in squatter settlements do not have sanitary facilities or even latrines. The quality of housing varies from very rudimentary to comfortable and includes simple shelters made of plastic or canvas, wood and sheet-metal huts, one-room clay or cement block structures, small houses on enclosed plots, and permanent one-room dwellings. It is not surprising that housing is the first priority for all households living in slums. Only SOCOGIM, the State majority-owned enterprise is active in housing construction and production of serviced plots. However, its production targets the higher income strata and falls far short of the demand. (d) Infrastructure in support of economic development: Factor costs are extremely high and - 6 - infrastructure is critically lacking, making Mauritanian cities less competitive than other cities in the region. Artisanal fishing, which is a labor-intensive industry with high export potential, and tourism are hindered by the lack of environmental and access infrastructure. With a coastline of about 700 km, artisanal fishing is concentrated in the immediate vicinities of Nouakchott and Nouadhibou. Poor environmental conditions, as well as damage to fish, induced by transportation on dirt roads, cause both fishermen and exporters to forego important premiums and tarnish Mauritania's quality label. The total lack of infrastructure along the coastline has blocked tourism development. (e) Urban management and decentralization: The legal framework governing urban planning and management is weak and has not been adapted to take into account decentralization reforms, introduced since 1986. Nor have the latter reforms been properly disseminated to a cadre of competent professionals. The division of responsibilities for urban development among State and local authorities, communities, and the private sector is unclear and causes major coordination problems. Urban development strategies adopted so far have essentially been sectoral, without direct linkage or complementarity with economic development, decentralization, urban management, and poverty-alleviation strategies. Local authorities do not have the necessary resources and essential urban management skills to carry out their functions and the framework for funding communes is inadequate. Community participation in decision-making and in the provision of urban infrastructure and services is in its infancy. It suffers from serious gaps in legislation and regulations with respect to the role of community-based organizations and their relationship with the govemance structure. The development of Mauritanian cities has so far been essentially a by-product of rural-urban migration, and major cities have only recently started to develop participatory city development strategies. (f) Land tenure and management: Regularization of land property rights is a lengthy and cumbersome process. Inefficiencies in land registration and regularization have encouraged the emergence of an informal and speculative land market and proliferation of squatter settlements. Moreover, they constrain housing construction and the development of a mortgage finance system, and contribute to inadequate maintenance of records for property taxation. Private real estate development is virtually non-existent for lack of procedures and regulations allowing the transfer of land to developers for subdivision, servicing, and/or construction. Large subdivisions are made by the State from time to time and parcels are distributed to beneficiaries. The parcels, however, are not staked and no precise records are kept. As a result, huge tracts of land have been distributed and are still vacant, as beneficiaries have no way of identifying their parcels. Although the decentralization law assigns to municipalities the development of land in their respective jurisdictions, enabling legislation and clarifying regulations are lacking. Land belongs to the nation and no clear procedures exist for its transfer from the State to municipalities. The poor rarely have access to land with legal tenure; this has led to squatter settlements and precarious shelters. A survey (conducted in slums) shows that 98 percent of households are willing to build a home if they had a piece of land with a secure title. Government Strategy (a) Poverty reduction: The Government's policies for the promotion of economic growth support poverty alleviation. The Government remains strongly committed to taking immnediate steps to reduce poverty by redirecting public expenditures toward priority social sectors, as indicated in the PRSP. To this end, the program of labor-intensive public works, as well as credit arrangements for micro-enterprise promotion and for financing artisanal fishing activities, will be further strengthened. Alleviation of urban poverty, by reducing the proliferation of slums and improving the living conditions of the poor, have also been major concerns of the Govemment of Mauritania. During the past two years, the Government intensified its efforts to find adequate solutions and mobilize necessary resources to address these issues. Several - 7 - concrete actions were taken, including the creation of a specialized agency, Commissariat aux Droits de l'Homme, a la Lutte contre la Pauvrete et i l'Insertion (CDHLCPI), to mobilize resources and develop and implement participatory poverty-alleviation programs in cooperation with local and intemational NGOs. The PRSP makes urban poverty alleviation one of its priorities. (b) Access to basic infrastructure and income opportunities. In mid-2000, the Govenmment commissioned a group of top decision-makers, elected mayors, and community representatives to draft a national urban strategy and design a national program for improving the economic situation and living conditions of the urban poor. The group recommended a three-pronged strategy as follows: (i) development of cities should be based on participatory development strategies and plans; (ii) slum upgrading and inclusion are central to the Government's social, economic, and urban development policies; and (iii) continued commitment to decentralization and outreach to communities and their organizations. Since December 1999, through a forceful participatory approach, the cities of Nouakchott, Nouadhibou, and Kaedi initiated the formulation of city development strategies that emphasize improvement of living conditions in slums, poverty alleviation, and economic growth, in line with Government policy. With the support of NGOs, the CDHLCPI and the commune of Nouakchott have started pilot participatory operations for slum upgrading and creation of employment opportunities. The Government is intensifying contacts with the donor community to mobilize funding and technical assistance for extending and scaling up these activities. (c) Decentralization and urban and land management. The Government introduced decentralization in 1986. It recently commissioned a major study on urban planning and management tools, studies on different aspects of decentralization, and on urban and land management. The recommendations of these studies were discussed and agreed upon with communities and the civil society. The Government has also launched a study to reinforce the legal framework governing community organizations, formalize links between local governments and community organizations, and design community-based urban infrastructure and service delivery systems. 3. Sector issues to be addressed by the project and strategic choices: The project will address several sector issues: (a) urban poverty, slum upgrading, income-generating activities, and community development; (b) access to basic urban infrastructure and shelter; (c) inadequate infrastructure to support economic development; (d) insufficient urban management and incomplete process of decentralization to communes and communities; and (e) land tenure and urban management improvements. The Government decided to restructure and rehabilitate the slums in Nouakchott and Nouadhibou with a ten-year program, improve access to basic infrastructure in the main cities, implement land regularization and secure land tenure, prevent the formation of new slums by providing affordable land for housing, extend the micro-credit program for housing and economic activities, and strengthen the management of land and urban development. 4. Program description and performance triggers for subsequent loans: See Project Description below for the Program Description. The performance triggers for the second phase program are: (a) Report on the social, environmental, financial, economic, and technical impacts of the program's first phase and lessons learned; (b) Assessment report of the first resettlement (El Mina District); (c) Presentation of a resettlement action plan for restructuring the slums to be upgraded during the second phase of the program (Arafat, Toujounine, Tensweilim, and Hay Saken) and provision of - 8 - funds for resettlement and support to vulnerable persons; (d) City development strategies for Nouakchott, Nouadhibou, and Kaedi updated through a participatory approach and approval of the investment programs through a full consultation process; (e) Increased transfer of funds to municipalities through the Regional Development of Fund (1 percent of the Government's budget in the first year of project effectiveness to at least 3 percent in the fifth year; the percentages will be agreed on each fiscal year during the preparation of the annual budget of the Government); (f) Taxe d'habitation et taxe fonciere for the year 2001 reviewed and their collection dramatically improved (to ensure cost recovery of the project investments and operation and maintenance); (g) Land management and registration dramatically improved (see program indicators); (h) Implementation plan for the second phase; and (i) Street adressing will cover 80 percent of the city of Nouakchott by 2005. Tax register will cover 90 percent of the population involved. C. Program and Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The program and the project would consist of the following four components: 1. Provision of basic urban infrastructure in the main cities, principally in slums, and serviced sites. This would include, in addition to consultant services for technical studies and supervision of works: (a) A ten-year program of slum upgrading in Nouakchott and Nouadhibou (Nouadhibou included in sub-component 1 (d) comprising: (i) the extension of basic urban infrastructure (including latrines) to squatter settlements and inclusion of these settlements into the urban fabric; (ii) cornmunity facilities (including health and HIV clinics, education, recreation, and markets.); (iii) resettlement, including provision of serviced land and compensation; (iv) street addressing; (v) land tenure regularization; and (vi) solid waste management. This sub-component will be implemented by the Nouakchott Urban Development Agency (UDA) in Nouakchott and by AMEXTIPE in Nouadhibou. Compensation will be financed by the Government. (b) Land allotment, allocation, and development to prevent creation of squatter settlements in the future. This sub-component will include two aspects: (i) land to be transferred to the municipality of Nouakchott for allotment and allocation to the poor; and (ii) funds for land development to be onlent to and implemented by the public land development company, SOCOGIM. During the first phase of the program, SOCOGIM will implement only a pilot activity, which could be extended to the second phase if results from the first phase are acceptable to IDA. The sub-component will be onlent on IDA conditions with a 20-year reimbursement period and five years of grace. (c) Provision of infrastructure to support labor-intensive economic activities and environmental protection to be implemented in partnership with the private sector in Nouakchott, especially for artisanal fishing activities, market places mainly for cattle, and solid waste management (to be implemented by UDA). (d) Extension of basic infrastructure and community facilities to 12 towns (including Nouadhibou), including sanitation (latrines), and improvement of the environment and infrastructure to support labor-intensive economic activities in partnership with the private sector. This sub-component will be implemented by AMEXTIPE on behalf of the communes, on a contract management basis. -9- (e) Provision of water and electricity in the slums of Nouakchott. This sub-component would be onlent to and implemented by the utility company, SONELEC, which is being privatized. SONELEC will ensure at least 4,000 cubic meters of water per day for the slums concerned. The electricity sub-component will be onlent on IDA conditions with a 20-year reimbursement period and five years of grace; the water supply sub-component (except the distribution network which will be transferred as grant) will be onlent on the same conditions as indicated above. 2. Micro-credit for land tenure regularization or land acquisition, home construction or improvement, enterprise development, and home-based employment promotion. It would promote community housing construction and employment programs. This component would rely heavily on intermediaries, such as NGOs, and specialized financial institutions for delivery and would support community-based urban infrastructure, shelter and environmental services delivery, and focus a substantial part of its activities on women. This component would be financed only by the Government to extend and scale up ongoing micro-credit programs (called Twize) implemented by CDHLCPI with support from local and intemational NGOs. 3. Institutional and capacity building. This component consists of three sub-components to provide technical assistance, training, and support for capacity building and development of: (a) Urban communities, NGOs, CDHLCPI, and micro-enterprises; (b) Municipalities, mainly the municipalities of Nouakchott and Nouadhibou and the Association of Mayors; and (c) Government administration in charge of urban planning and transport, land management, decentralization, and environment; land registration and regulation and justice (land tenure). This component would be implemented by the concerned beneficiaries, with procurement and disbursement handled by the Project Coordinating Unit (PCU). 4. Auditing, monitoring, and operating costs of implementing agencies. This component will finance incremental expenditures incurred on account of project implementation and management, including UDA and AMEXTIPE fees, mission travel and supervision costs, bank charges on special accounts, vehicle operation and maintenance, office supplies, and technical assistance to UDA, PCU, and AMEXTIPE. This component would be implemented by the PCU, UDA, and AMEXTIPE. 1. Provision of basic urban Other Urban 75.85 76.6 54.30 77.6 infrastructure Development 2. Micro-credit Other Urban 6.90 7.0 0.00 0.0 Development 3. Institutional and capacity building Other Urban 8.05 8.1 8.05 11.5 Development 4. Auditing, monitoring, and operating 6.56 6.6 5.92 8.5 costs PPF refinancing 1.70 1.7 1.70 2.4 Total Project Costs 99.06 100.0 69.97 100.0 Front-end fee 0.00 0.0 0.00 0.0 Total Financing Required 99.06 100.0 69.97 100.0 - 10 - Costs US$ million IDA- Component Total First financed Program Phase First Phase 1. Provision of basic infrastructure 132.70 66.80 47.94 1.1 Slum Upgrading 34.30 13.60 11.14 1.1.1 Nouakchott (UDA) 32.30 13.10 11.14 1.1.2 Resettlement grants 2.00 0.50 1.2 New serviced land (SOCOGIM) 5.10 1.10 0.94 1.3 Infrastructure for economic activities 11.10 7.00 5.95 (Nouakchott) (UDA) 1.4 Basic infrastructure in the 12 54.45 26.45 14.06 regional capitals (including Nouadhibou) (AMEXTIPE) 1.5 Water supply and electricity for 27.75 18.65 15.85 Nouakchott slums (SONELEC) 2. Micro-credit (CDHLCPI) 7.00 6.00 0 2.1 For land acquisition or regularization 1.50 _ 2.2 For housing _ 2.50 2.3 For economic activities 2.00 3. Institutional and capacity building 11.00 7.00 7.00 (PCU) 3.1 Technical assistance to 2.00 communities 3.2 Technical assistance to 1.20 municipalities 3.3 Technical assistance to Central 3.80 Government Administration 4. Auditing, monitoring and operating 9.77 5.77 5.21 costs 4.1 Auditing and monitoring (PCU) 0.70 4.2 Operating costs PCU 0.50 4.3 Technical assistance to UDA 0.65 4.4 Operating costs UDA 1.60 4.5 AMEXTIPE fees 2.12 4.6 Technical assistance (AMEXTIPE) 0.20 PPF refinancing 1.70 1.70 1.70 Total Program and Project Costs 162.17 87.27 61.85 Contingencies 30.50 11.79 8.12 Total 192.67 99.06 69.97 2. Key policy and institutional reforms supported by the project: The project will facilitate the implementation of urban development, poverty alleviation, and slum upgrading strategies. It will seek to provide the legal framework for urban planning and management, strengthen implementation of the decentralization framework, by formalizing community-based organizations' roles in decision-making and service provision; set up an appropriate land management and information system; and develop institutional capacities to serve the credit and income-generating needs of the poor. - 11 - 3. Benefits and target population: The main objective of the project is to improve the living conditions of at least 541,590 persons: 281,590 living in slums, 100,000 resettling from rural areas or from other urban areas, and 100,000 in other urban areas, directly through targeted interventions, and indirectly through support for economic development (40,000 persons), improved urban and land management, and empowerment of communities. The primary beneficiaries are poor families in Nouakchott (431,000 persons) and Nouadhibou (10,000 persons), and to a more limited extent, in the regional capitals (100,000 persons). The project will also empower communities to participate in local decision-making and in project implementation through an adequate institutional framework and support from specialized organizations. Local governments and government agencies will benefit from capacity-building activities to strengthen their technical and managerial capacities in urban and land management. Local NGOs, small entrepreneurs, and consultants will benefit from targeted vocational training activities and public works programs. 4. Institutional and implementation arrangements: The first phase of the program will be implemented over a period of five years. Before Credit effectiveness, the Government will prepare a Project Implementation Plan (PIP) for the first phase, spelling out detailed institutional and implementation arrangements. The following arrangements have already been made: The Prime Minister chairs an Inter-ministerial Committee in charge of the urban development program (Decree No. 085-2000 dated July 31, 2000) that meets at least once a month. This Committee includes the Ministers of Interior, Finance, Economic Affairs and Development, Equipment and Transport, Hydraulics and Energy, the Secretaire General of the Government, the CDHLCPI, and the Mayor of Nouakchott. This Committee is supported by a Technical Committee, chaired by the Director of Programming and Studies, and includes representatives from the public sector (all concerned sectors), civil society, and the private sector. Thematic subcommittees have also been set up. All conimittees and subcommittees are operational and have reviewed the program preparation. The Technical Comnimittee is set up only for program preparation and will be replaced by a coordinating committee supported by the Project Coordinating Unit (PCU). The following implementing arrangements were discussed with the Govermment and agreed upon. Implementing agencies A Project Coordinating Unit will handle project monitoring, reporting, auditing, and the capacity-building component. The PCU will report to the Ministry of Economic Affairs and Development and the Coordinating Committee. The PCU will be set up and the Coordinator (acceptable to IDA) recruited before negotiations. The PCU will manage the principal Special Account supported by technical assistance, which will assist other agencies with procurement matters and on financial management of their special sub-accounts. The PCU will submit the final Implementation Manual, nominate a financial director, recruit a technical assistance, and an auditor, all acceptable to IDA, before Credit effectiveness. A new Urban Development Agency (UDA) for the city of Nouakchott, with a Board chaired by the Mayor of Nouakchott, including urban representatives from concemed ministries, civil society, NGOs, and the - 12 - private sector, will implement Nouakchott subprojects, mainly the slum upgrading program (except subprojects implemented by SONELEC, SOCOGIM, and the PCU). The UDA has been set up and a manager, acceptable to IDA, has been recruited. Before Credit effectiveness, the UDA will sign a Project Agreement with IDA, an agreement with the Government on project implementation arrangements, and will submit Intemational Competitive Bidding (ICB) documents and a group of bidding documents for the first year, for IDA's non-objection (El Mina restructuring bidding documents and technical assistance). The recruitment by the Agency of technical assistance and a financial director acceptable to IDA is a condition of credit effectiveness. The project unit recommended in the Resettlement Action Plan (RAP) is to be set up before credit effectiveness in the UDA for its slum upgrading activities. The master plan for Nouakchott will be approved by legal text and put into application by June 30, 2002. The Manual of Procedures of UDA, AMEXTIPE, and PCU, their annual budgets, business plans, and salary schedules will have to be acceptable to IDA during the two phases of the program. SOCOGIM, a mixed economy enterprise with State majority holding, will implement a pilot land development sub-component during the first phase. This pilot operation will be extended in the second phase if the results are acceptable to IDA. A Project Agreement will be signed between SOCOGIM and IDA. The signing of a subsidiary loan agreement with SOCOGIM will be a condition of effectiveness. The following agreements have been reached: (i) amendment, by December 2002, of SOCOGIM's charter to clearly authorize land servicing activities and specify procedures for carrying out such activities; (ii) amendment, by the end of year 2002, to the real estate law, the law governing activities of real estate developers, Decree 2000-089, enabling the real estate law to streamline and clarify procedures for land development; and for transferring land to developers for subdivision and/or construction; titling such land and selling it to families for house construction; (iii) inventory, by June 30, 2003, of all vacant infill land in the city of Nouakchott; and (iv) preparation of a program for regularization of such land to make it available for use as specified in the new master plan of the city. SONELEC will implement the water supply and electricity sub-components in Nouakchott. SONELEC will work closely with CDHLCPI and the commnunes of Nouakchott to implement the new standpipe management scheme. SONELEC will sign a Project Agreement with IDA. The signing of a subsidiary loan agreement with SONELEC is a condition of effectiveness. Assurances have been sought that adequate quantities of water will be secured for slums to be restructured or equipped under the program (at least 4,000 cubic meters per day). The executing agency, AMEXTIPE, will implement the secondary city sub-components (including Nouadhibou) on behalf of the communes, on a contract management basis. Concerned municipalities will be responsible for selecting their subprojects, programming, and operation and maintenance. AMEXTIPE will sign a Project Agreement with IDA. The Government and the concerned municipalities will sign agreements with AMEXTIPE on project implementation arrangements. Enacting master plans for concerned secondary cities (including Nouadhibou), signing municipal contracts, and transfer of land to municipalities for their subprojects have been agreed upon with the Government. The following units will play an important role in project implementation. A technical assistance staff, housed at the Association of Mayors, will provide technical support to secondary cities. CDHLCPI will be responsible for follow-up on: (i) micro-credit activities; (ii) operations related to resettlement aspects; (iii) land regularization in cooperation with "les Domaines" and the Ministries of - 13 - Interior and Justice; (iv) preparatory remodeling work in cooperation with the UDA and the NGOs; (v) social evaluations, with help from NGOs and the specialized financial institutions; (vi) definition and implementation of a strategy (with the commune) aimed at increasing community participation in urban development projects; and (vii) indicators for the urban program relating to employment, housing, micro-enterprises, and land regularization. A Manual of Procedures defines the framework and methods of intervention of the program and activities of the CDHLCPI. The Ministries in charge of urban planning, land regulation and registration, communities and decentralization, environment, and justice will be responsible for urban and land management and information systems, decentralization and support to conmmunes, improvement of the environment, and training of justice staff on land regulation, respectively. Procurement and disbursement matters will be handled by the PCU. The Municipality of Nouakchott will play a major role in preventing slums through management of allotted land for the poor. Community-based organizations, assisted by NGOs and GIEs, will play a major role in the design and implementation of land remodeling in slums, community social infrastructure, provision of urban environmental services, and delivery of targeted interventions in slums. It was agreed that the Government will issue legislation fornalizing the role of communities in urban infrastructure and service provision and the links between comnnunity organizations and the formal governance structures; this will empower communities to accomplish their assigned roles and facilitate their access to training and technical assistance. D. Project Rationale 1. Project alternatives considered and reasons for rejection: The main alternatives considered in selecting the most appropriate instrument to support the Government's long-terrn program were: (a) Classical urban development project: These kinds of projects are usually limited to spatial and environmental concerns. They would not address Mauritania's current social and economic development priorities, including income generation, land regularization, and housing improvement. This approach is, therefore, not appropriate, given the present context in Mauritania. (b) A public works program: Poverty alleviation through a labor-intensive public works program (as in the two previous projects) was rejected. These programs have not been fully effective in Mauritania as only a small portion of expenditures has benefited the poor. Groups that benefited from these programs were not the poorest, local communities have not been adequately empowered and mobilized to leverage project resources, and local capacities have been insufficiently developed. (c) Limiting the project to slum upgrading: Investments in slum upgrading will only improve the provision of basic infrastructure and the environment. They will neither generate income nor will they address more systemic issues that give rise to the development of new slums and constrain the emergence of rational systems for housing and urban development. Efficient land and urban management and development of secure land tenure systems are not only important for the poor but also for urban and housing development, and overall economic development of cities. - 14 - (d) Community action program: The secondary cities component is based on programs prepared and approved by communities in a participatory manner and with the help of NGOs and consultants. Communities will also be strengthened. (e) Sector Investment Loan (SIL) or Adaptable Program Lending (APL): An APL with two five-year phases is contemplated, as slum upgrading is a ten-year program, and capacity building and decentralization strengthening require a longer period. 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). Latest Supervision Sector Issue Project (PSR) Ratings . (Bank-financed projects only) Implementation Development Bank-financed Progress (IP) Objective (DO) Job creation by labor-intensive public Municipal Development works, development of small public Management Project (Cr. 1865) enterprises. Access to basic infrastructure Construction Capacity and S S Employment Development (Cr. 2455) Urban and decentralization Urban Infrastructure and Pilot S S Decentralization (Cr. 2835) Other development agencies Decentralization Projects of French and German bilateral cooperation and European Union IPIDO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: Lessons learned from urban projects and ongoing activities carried out under the Urban Infrastructure and Pilot Decentralization Project (Cr. 2835-MR), implemented by AMEXTIPE, as well as from other urban and water supply projects in Mauritania and from overall Bank experience, have been incorporated in the design of this program. Decentralization experience in Mauritania suggests that the participation of communities in project preparation is critical for adequate identification of priorities and subprojects, their timely and effective implementation and sustainability, ownership, and local capacity development. Ownership, a clear vision, and political commitment to project objectives ensure strong leadership, strong participation of communities, and availability of counterpart funds. Therefore, full community consultations and involvement have been an integral part of program preparation and will also be continued during implementation. However, technical assistance support is needed to boost local capacity. Interventions have been (and will continue to be) targeted through assessments and based on thorough consultations with beneficiaries. Design will be simple and will take into account low institutional capacity at local govenmnent levels, especially in secondary cities, and the early stage of development of community-based organizations. The project will rely on NGOs and consultants to provide implementation - 15- technical assistance to conmmunities and will support technical assistance to relevant local governments, through the Association of Mayors. Slum upgrading will be limited to Nouakchott and Nouadhibou which have the largest slums and basic institutional and human capacity and strong leadership. Along with investment programs, activities will support the development of central and local govermnents' capacities in urban and land management, as well as the development of capacities of communities and the private sector. Bank Experience. The lessons learned from Bank projects, since 1970, include the need for decentralization of infrastructure service delivery and management to appropriate local levels with adequate local financial revenue generation. In addition to providing basic infrastructure, it is equally important in order to alleviate poverty to create jobs, generate income, prevent the creation of new slums, secure access to land, and improve housing. 4. Indications of borrower commitment and ownership: Central and local governments have demonstrated strong commitment to upgrading slums and improving the urban sector. The recently created poverty institution, CDHLCPI, has already initiated slum upgrading in Nouakchott. Pilot operations are currently underway, financed by other donors and NGOs. Several studies related to the future program (including decentralization, municipal finances, urban and land management, urban strategy, participatory city development strategies, slum improvement strategy, and social environmental and technical studies, legal framework for communities, and master plans and investment programs for the project cities) were financed by the Government under the ongoing project, and through a Project Preparation Fund (PPF) and a PHRD fund (Japanese) grant, at the initiative of the Government, the communes of Nouakchott and Nouadhibou, and the communes of the main cities. Several and substantial consultations on the institutional framework and the preparation of the city development and slum upgrading strategies and design were undertaken in Nouakchott, Nouadhibou, and Kaedi, with the participation of NGOs, representatives of the private sector, unions, universities, and civil society. Investment programs for secondary cities were prepared through a participatory process with municipalities and communities. The Government and communes have also proposed an integrated approach to slum upgrading, infrastructure for economic development, job creation, urban and land management, empowerment of communities, and private sector participation. Micro-credit and compensation for resettlement will be financed by the Government. 5. Value added of Bank support in this project: The Government believes that the Bank's in-country and international experience in urban poverty alleviation and slum upgrading, environment, and land and urban management will assure a sound design and implementation of this program. In addition, the Bank's involvement in this program would attract assistance to urban poverty alleviation from other donors. E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): * Cost benefit NPV=US$ million; ERR = % (see Annex 4) O Cost effectiveness O Other (specify) The project is composed of several components and sub-components. The economic analysis has been done only for the first phase of the project, as the second phase needs further preparation. Not all sub-components are relevant for the economic analysis, as the benefits of some components are difficult to - 16 - measure and quantify and would yield results in an arbitrary manner. For sub-components where the cost/benefit analysis can be done, one has been conducted for each sub-component to the extent possible, in order to independently determine the economic feasibility of each sub-component. The following key assumptions were used for the economic analysis: (i) discount rate of 12 percent; (ii) a time horizon of 20 years; and (iii) elimination of direct taxes. Detailed assumptions and results are described in Annex 4. Slum upgrading: The slum upgrading sub-component of the project provides a standardized package of basic infrastructure to the targeted areas. This package includes paved roads, compacted paths, water towers and standpipes, street lighting, markets, schools, health centers, and public and private latrines. The realization of all of them will result in an increase in economic value of land and that increased value will result in an increase in the market price of land. Therefore, the expected market value of land is used as the benefit of this component. The economic analysis was done by area; i.e., Kebbe El Mina, Riyad, Dar Naim, and Teyaret Nord. Net Present Values (NPVs) for each area are as follows: Kebbe El Mina UJM225 million, Riyad UM159 million, Dar Naim UM76 million, and Teyaret Nord UM25 million. Estimated economic rates of return (ERRs) are 43 percent for Kebbe El Mina, 13 percent for Riyad, 34 percent for Dar Naim, and 30 percent for Teyaret Nord. The sensitivity analysis of the slum sub-component was done with the following assumptions and all results suggest the economic viability of the project. Those assumptions were: (i) two-year delay in project implementation; (ii) lower value of improved land of 10 percent; and (iii) 10 percent increase of all costs. In addition to quantifiable benefits, a number of qualitative benefits are foreseen after project completion. These include the assurance of continuing to live in the same place, improvement in the general conditions of living, and the physical and economic integration of the project area with the rest of the city. The improvement of the general living conditions suggests easy access to water, schools, health centers, improvement in sanitary conditions, and security improvement at night. Street lighting will permit economic activities after dark, and will make it possible for children to study at night. Infrastructure for ecQnomic activities: Cattle markets: Operation and maintenance of cattle markets will be assured by the private operator who concludes the concession contract with the city of Nouakchott. Through that contract, the city of Nouakchott will recover the investment cost. There is already a manifestation of willingness to conclude such a concession contract. The monthly concession payment under the contract is estimated at UM2.5 million. The NPV is UM13.39 million and ERR is 13 percent. Cattle markets at present are open spaces located in the middle of slums, and trucks carrying the animals go through the slums in order to reach the market. The construction of a new modem market at the entrance of the city of Nouakchott will prevent such flow of truck traffic into residential areas. It will also improve sanitary control and the environment surrounding the market, as slaughtering which is currently done around the market place will be done in the slaughtering house already constructed, close to the new market. Fishery markets: Like cattle markets, operation and maintenance of fishery markets will be assured by the private operator, and the city of Nouakchott will recover the investment cost through that contract. There - 17 - are currently 14 factories for fish processing in the project area, and each of them is expected to pay a user fee to the private operator. The NPV is UM14.96 million and ERR is 13 percent if the entire investment is recovered through the concession contract. This requires the contribution of UM65,000 per week per factory. If 50 percent of the investment cost is bome by the Government, the required contribution per week per factory will be reduced to UM35,000. In this case, NPV is UM14.52 million and ERR is 14 percent. The fish factories discharging wastes are the ones that export processed and fresh fish. Improved sanitary facilities under the project will greatly improve hygiene conditions of the fish factories and their surroundings, thus improving the commercial value of fish to be exported. The project is expected to increase fish sales export by strengthening the competitiveness of the fish factories. Roads: . The objective of constructing these roads is to connect areas that are not directly accessible. The construction of roads will induce the development of the surrounding areas, which will result in an increase in the land market price. It is assumed that there is no value on the land without roads and that such increase in land value is minimum. The NPV of the entire road section is 61.84 million UM and ERR is 32 percent. The roads to be constructed will connect parts of the missing outer circumferencial link of Nouakchott. They will not only connect different residential areas, which are not directly accessible to each other, but will also divert traffic that would otherwise go through the traffic-jammed city center. With the construction of these roads, traffic flow in the city center will be improved and areas surrounding the roads will be developed as new residential areas. The sensitivity analysis of the above three sub-components of the project was done with the same assumptions as the slum upgrading sub-component. The results suggest that these projects are viable. Water supply: The project will finance: (i) additional wells; (ii) transmission networks to each slum; and (iii) distribution networks within the slums, including water tanks and standpipes. These will provide water exclusively to the slums, and therefore are assumed to be independent of the existing network. The benefit of the distribution was included in the slum upgrading sub-component of the project, and it is thus not included in this analysis. After the project, it is estimated that average water consumption will increase in five years, from 15 to 25 liters per day per person, for those living in the slums, and an additional 25 liters per day per person will be demanded by those who will settle in the vacant lots in Riyad, Dar Naim, and Teyaret Nord. This water demand will increase to 30 liters per day per person after year 6 of the project. The estimated NPV for the water supply component is UM643.29 million, and the ERR is 16 percent. The sensitivity analysis was done with the same assumptions as the slum upgrading sub-component, and results show the viability of the project. Secondary cities: These subprojects considered for the extension of priority infrastructure in the 12 regional cities (including Nouadhibou) are to be studied and must be adopted by the municipal council. Each subproject must satisfy the ERR of 12 percent to be eligible for IDA financing. 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = % (see Annex 4) - 18 - Cost recovery: Appropriate cost recovery mechanisms were developed during project preparation, especially for slum upgrading and improved infrastructure in support of economic activities. Slum upgrading: The infrastructure to be constructed under the project is considered a public good, so the city of Nouakchott must bear the cost of investment as well as operation and maintenance costs from its budget. The project envisages the recovery of both investment and operation and maintenance costs through the property rights levy (I'imp6t foncier) and housing tax (la taxe d'habitation). The amount of both the property rights levy and housing tax will be decided by the property value, use of housing (residential, rental, and commercial), and the number of pieces. There is no complete list of tax payers for both the property rights levy and housing tax at present, and the real tax collection rate is therefore unknown. In the absence of the tax base, it is impossible to know the amount of expected revenue from the property rights levy and housing tax. Nevertheless, an attempt was made to estimate the revenue using certain assumptions. These assumptions use the tax amounts currently applied by the Fiscal Department of the city of Nouakchott to estimate their expected revenue. This estimate only covers the tax from residences. The city of Nouakchott must assure the operation and maintenance costs of schools, health centers, roads, and street lighting. Operation and maintenance costs for standpipes and markets to be constructed within the project area are planned to be operated by the private concessionaire; therefore, there will be no additional fiscal burden to the city. The NPV of the cash flow after balancing the expected revenue and both the investment and operation and maintenance costs gives the positive value of UM69.86 million. This means that, if the estimated tax revenue is realized, the cost recovery of the project can be achieved in the project life of 20 years. It must be noted, however, that the calculated revenue covers only the tax from residences. Tax revenue from commercial and professional entities will further increase the revenue. At the same time, the improved tax collection capacity will increase revenue from other taxes such as community and port traffic tax. These revenues will permit the city to assure other services. Infrastructurefor economic activities: It is assumed that private operators will assure the operation and maintenance of cattle and fish markets. The city of Nouakchott will conclude concession contracts with two private operators for the cattle and fish markets, respectively. The private operators will then collect fees from users of the market facilities. It is expected that those private operators will manage the markets in an efficient manner, based on commercial practices. Water Supply and Energy: The water and energy (street lighting) sub-components of the project will be executed by SONELEC. The Government of Mauritania will onlend part of the IDA Credit to SONELEC for implementation of these sub-components. The impact of the investment on both water and energy tariffs is calculated by using SONELEC's financial projection model. The result suggests a 5 percent increase in both water and energy tariffs in 2010. Fiscal Impact: The reinforcement of the tax collection measure is expected to increase revenue, as described in an earlier paragraph on cost recovery. As mentioned before, the tax payers' list must be completed first in order to - 19- increase the revenue in parallel with the operation of street addressing. On the other hand, the number of new land titles to be delivered and the associated tax revenue can be easily determined in the project area. At least 17,000 land titles will be delivered, generating the same number of new taxpayers for the Property rights levy and Housing tax. The land tenure regularization of the slum area is expected to generate UM130.11 million of tax revenue per year from these taxes with an improved collection rate of 85 percent. It is also expected that UM8 16 million will be collected through the land title fee. 3. Technical: Most of the infrastructure subprojects are expected to be simple. Criteria for assessing individual proposals for the income-generating sub-component have been agreed upon with the Government of Mauritania in the new Manual of Procedures of CDHLCPI. 4. Institutional: Decentralization: The project will help to refine the urban management tools developed during the ongoing Urban Infrastructure and Pilot Decentralization Project. Comprehensive master plans and investment programs have been completed for 13 cities, including Nouakchott and Nouhadibou through a participatory process. This will allow development of cities as a whole as opposed to partially making up selected economic and social infrastructure backlogs. The comprehensive plans are expected to allow municipalities to better identify investment priorities and manage the growth of the cities. Based on the recommendations of studies carried out during project preparation, and duly validated by concerned administrations and civil society, the Government will undertake to further develop and clarify the regulatory framework for urban development planning, implementation, and control. The Government will also undertake to clarify the responsibilities for all aspects of urban development among the central government, local governments, communities, and the private sector. Municipalities, particularly Nouakchott and Nouadhibou, as well as community-based organizations are expected to have a more active role in infrastructure planning and delivery. Government transfers to municipalities are expected to increase to levels commensurate with their mandates. This will allow municipalities to strengthen their management and investment capacities and earmark funds for fostering community and private sector contributions to development. Pilot city development strategies elaborated for Nouakchott, Nouadhibou, and Kaedi have been very successful and well received by stakeholders. They will be extended to other cities and the regional capitals and comprehensive master plans will be developped. Community development: A new regulatory framework will formalize links between community organizations and the governance structure and empower these organizations to participate in the decision-making process, access credits and other forms of financing, and be active in urban infrastructure and service provision. Pilot community-led projects, such as participatory neighborhood land remodeling and regularization, solid waste management, and conmmunity construction of core housing and sanitary amenities will be undertaken and their results documented and widely disseminated for replication. Social intermediation will be developed to help organize communities, provide training and technical assistance, and promote home-based and other employment. CDHLPI's capacity to promote community development and participation will be strengthened as well as its capacity to deliver poverty-alleviation projects, organize existing NGOs and micro-credit institutions for more efficient administration of community development and micro-credit extension, and to extend its reach to localities outside Nouakchott. Micro-credit: A recent study updated the institutional and financial setting of micro-credit organizations. It is expected that micro-finance will be extended for housing and community infrastructure, and to both individuals and community organizations. The procedures, eligibility criteria, and internal regulations governing its operation and its relationship with beneficiaries are defined in CDHLCPI's Manual of Procedures. Accounting and financial administration will be delegated to existing financial institutions; - 20 - NGOs and other intermediaries will be relied upon to organize communities and provide technical assistance; and implementation will be delegated to individual beneficiaries and communities. Land tenure: The study canried out on land tenure recommends streamlining procedures for regularization of tenure, as well as simplifying land management and information, and property registration systems. The study had taken into account lessons learned through the land readjustment and regularization program being successfully carried out in selected rural areas. New legislation and clarifying regulations will be enacted to allow community-based land remodeling and regularization in squatter settlements. Solutions will be sought to curb speculation and align official land prices with market prices while allowing the poor access to land property. Land will be transferred to municipalities for their subprojects and for allotment and allocation to the poor. 4.1 Executing agencies: The PCU, supported through technical assistance during the initial period, will handle procurement for the capacity-building component, project auditing, monitoring, and reporting. The PCU will be the link among the executing agencies and between the agencies and the Inter-Ministerial Committee. It will manage a principal special account, which will fund the implementing agencies' secondary special accounts. The new Nouakchott Urban Development Agency, supported through technical assistance during the first and second years, will be responsible for implementation of Nouakchott's project sub-components and for its urban management and development. SOCOGIM will be reorganized and transformed into a land development agency. AMEXTIPE will be strengthened to support secondary cities in implementing their investment programs, in addition to the provision of technical assistance housed at the Association of Mayors. SONELEC has the capacity to implement its sub-components. 4.2 Project management: The Inter-ministerial Committee, the Ministry of Economic Affairs and Development, the Coordinating Committee, and the PCU will play a major role in project coordination and monitoring. 4.3 Procurement issues: Please refer to Annex 6. 4.4 Financial management issues: Please refer to Annex 6. 5. Environmental: Environmental Category: A (Full Assessment) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. Safeguard Policy 4.01 - Environmental Assessment: The cities of Nouakchott, Nouadhibou, and Kaedi prepared an Urban Development Strategy. The project prepared a Strategic Urban Environmental Assessment (SUEA), which diagnosed the most urgent environmental problems in Nouakchott, Nouadhibou, and Kaedi. Results of this environmental diagnostic have been included in the Urban Development Strategies for the three cities. High investment priority issues identified are: (i) need for upgrading slum areas, including water supply, sanitation, and solid waste management; (ii) lack of adequate water supply and sanitation in the slum areas of Nouakchott and Nouadhibou; (iii) lack of an - 21 - adequate solid waste management system (its alleviation is a high priority in each of the three cities); and (iv) lack of management of open spaces required for a proper urban environment. Some of these priority investments will be financed under the project, others will either have to wait or find other donors. Selected priority investments for the UDP: Studies carried out have identified priority investments to be financed under the project. These priority investments for Nouakchott and Nouadhibou are: (i) slum upgrading, which will include water supply, on-site sanitation and fecal sludge treatment facility, solid waste collection, roads, schools, health posts, and electricity in both Nouakchott and Nouadhibou; (ii) improvement of water supply to the slum areas; (iii) land development for housing to prevent the emergence of new slums; (iv) infrastructure for Nouakchott, which includes: improvements in cattle markets, improvements in artisanal fishermen landing sites and fish market area, construction of a solid waste disposal site (selection of site has already been adequately done under Gernan financing and is in compliance with Bank Safeguard Policies), feasibility study of a new airport, which includes an environmental assessment; (v) infrastructure for Nouadhibou, which includes roads, harbor development and improvements in environmental management of the harbor and nearby areas, and equipment for solid waste management; (vi) capacity building in the relevant municipal and national authorities to monitor and manage the environmental and social impacts of the UDP. Potential Environmental and Social Impacts: Resettlement caused by land acquisition in the slum the areas to be improved will be a major impact of the project. A Social Assessment (SA) and a Land Acquisition and Resettlement Action Plan (LARAP) have been prepared (See below and Annex 11). (Included are the impacts of on-site sanitation in waterlogged and temporary flooded areas, impacts of solid waste disposal sites, impacts of construction activities, increased pressure on the fragile coastal zone, which would increase the risk of inundation for parts of Nouakchott from the sea, monitoring of groundwater levels of fossil groundwater resources, impacts of new or improved infrastructure, such as cattle markets, the artisanal fish landing site on the beach, and the fish market). 5.2 What are the main features of the EMP and are they adequate? Environmental Management Plan: Environmental studies have been carried out in preparation of the city development strategies, the urban master plans, and the investment programs. Mitigation plans elaborated under these studies have been incorporated in the SUEA and EMP for this project. The SUEA analyzed direct and indirect environmental impacts of these priority investments and developed an EMP for avoiding, reducing, mitigating, and improving the existing situation. The EMP also contains a plan to monitor these impacts and provides recommendations for institutional strengthening and development of urgent environmental legislation to improve environmental management capacity and living conditions in the three cities (see Annex 11.). The EMP, including the monitoring plan and the capacity-building activities will be financed under the project. After proper implementation of the EMP, it is expected that environmental living conditions in the three cities would improve significantly. Safeguard Policy 4.11 - Cultural Property: The project will open up used areas in the slums and build new social infrastructure, such as roads, schools, and health posts. A "Chance Find" procedure will be followed in case archaeological or prehistoric sites are discovered. Safeguard Policy 4.30 - Involuntary Resettlement. A Land Acquisition and Resettlement Action Plan has been prepared for the relocation and compensation measures to be provided to project affected people during the first phase of the project. During this phase, the consultant, "Urbaplan" is proposing the following rehabilitation of public infrastructure for the "kebbe" of El Mina: roads, water and electricity, markets and transport stations, primary and secondary schools, public health services, latrines, and a cemetery. The total beneficiary population in El Mina is 36,640 people of whom 12,225 will be relocated - 22 - (about 2,316 households). The new site of approximately 50 hectares is situated next to El Mina. Apart from the new and rehabilitated infrastructure and public services, the affected families will receive a 120 m2 plot of land (which will be paid for during a two-year period), transfer, and other compensation such as for latrines and cement blocks. The commune of Nouakchott and the CDHLCPI, in close consultation with the communities, have developed procedures and compensation schedules. The LARAP has been prepared and submitted to the Bank for approval for the first slum (El Mina) to be restructured in the first phase; the final report was submitted to IDA in April 2001. The LARAP for the other slums, to be restructured during the second phase, will be submitted for Bank approval six months before the presentation of the APL second phase. 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: 03/27/2001 before reconsultation 04/28/2001 after reconsultation EA Clearances: The draft SUEA Report was received by the Bank in December 2000 and reviewed by the Bank environmental staff. The final EA report including the EMP was submitted in May 2001 and found to be in compliance with the World Bank Safeguard Policies. The final EA was approved by the Mauritanian authorities on May 9, 2001. 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? Public consultation: Public consultations on the SUEA scoping report have been carried out since December 30, 2000 in order to incorporate public concems in the final SUEA. Public meetings were held on December 31, 2000 on the SUEA scoping report for Nouakchott, and on January 8, 2001 for Nouadhibou. The draft SUEA was placed in the World Bank's Infoshop on January 23, 2001, released to the public, and discussed with Mauritanian stakeholders. Stakeholder consultations were organized on the SUEA to raise public awareness on environmental issues during consultations made for the participatory preparation of urban development strategies for the cities of Nouakchott, Nouadhibou, and Kaedi (three phase preparation: diagnosis, vision, and program) and in March 2001. In addition, concerned beneficiaries and civil society will be consulted during the preparation of investment programs and sanitation strategies for the concerned cities. This will be followed up with environmental education programs. Environmental management training will also be provided to elected officials, municipal staff, and concemed central government staff through a technical assistance component, based on needs assessed by the EMP. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? Environmental and Social Monitoring Plan: The EMP includes an Environmental Monitoring Plan with indicators (see Annex 11) that reflect objectives and results expected from implementation of the EMP. Monitoring will be executed by Municipal authorities, whose capacity will be strengthened under the technical assistance component of the project. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. The project responds to the objectives of the CAS and PRSP on the integration of social concerns of the population living in precarious urban peripheral districts and on making local communities responsible - 23 - through their involvement in urban management for improvement of living conditions. At the time of project preparation, an evaluation of social impacts was carried out by the Government (the CDHLCPI) and the commune of Nouakchott in the districts of El Mina, North Teyaret, Dar Naim and Ryad. Conclusions of this assessment as well as those on the EA and the RAP were presented to the people concemed during a workshop on the strategic vision of the city of Nouakchott and distributed to institutions that will be involved in program implementation. The social impact study followed Bank Directives on social assessment. This study provides a framework and evaluation of positive and negative impacts of project investments on various beneficiary groups; this was prepared on the basis of a participatory evaluation of social conditions of different stakeholders (see page 26 - Interviews with Slum Dwellers); and based on the use of tools given in the Accelerated Method of Participatory Planning (including focus groups, Vern diagram, and an historical profile of the targeted districts). The social analysis: (i) improved understanding of the local context (cultural, institutional, social) not only by the inhabitants themselves, but also by the Govemment wanting to invest in these districts, and (ii) identified various economic and social groups living in these districts. The district of El Mina, which is one of the oldest slums of the capital, is very complex because of its cultural, ethnic, and geographic diversity, and is known for its strong sociability. The districts of Ryad, Dar Naim, and Teyarat are characterized by the dynamism of their inhabitants who want to have access to property, and by strong solidarity networks, such as female tontine associations, district cash boxes, and so on. Potential social impacts of the project are related to resettlement of part of the population losing their homes as a result of road construction and the social infrastructure implementation (health, education, water, sanitation, markets). The RAP, compensation, commission of resettlement, mediator, additional help to vulnerable people, resettlements made in the same neighborhood, land attribution and registration with latrines, better and cheaper access to infrastructure and services, inclusion of the slum in the urban fabric, and micro-credit for housing improvement and creation of micro-enterprises will not only mitigate the negative impact of resettlement, but will also have a high positive impact on the living conditions of slum dwellers. 6.2 Participatory Approach: How are key stakeholders participating in the project? In the context of HIPC and PRSP, the Government has carried out several consultations. The preparation of city development strategies, the slum upgrading strategy, and technical studies carried out with a participatory approach and through consultation of vulnerable groups and stakeholders during project preparation, together helped set priorities and guided the preparation of subprojects and interventions. The design of the upgrading and the housing and enterprise micro-credit sub-components involved social assessment and several sessions with focus and thematic groups selected among the beneficiaries and relevant resource persons. It has also involved extensive consultations with communities, including primary beneficiaries and community groups affected by the project. Pilot activities for home construction/improvement have been developed in consultation with beneficiaries. New pro-poor interventions will be designed similarly. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? City development strategies have been developed in Nouakchott, Nouadhibou, and Kaedi involving all relevant stakeholders (including community representatives, universities, the private sector, NGOs, utilities, and trade association representatives). In addition, several consultations were also conducted on - 24 - institutional, social, economic, and environmental studies with the stakeholders and consultants. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? The institutional reforms introduced by the project in urban management, land tenure, community development, decentralization, support to CDHLCPI, NGOs, and concerned administrations will ensure sustainability of the project. 6.5 How will the project monitor performance in terms of social development outcomes? CDHLCPI is in charge of monitoring poverty indicators, including in urban areas. In addition to monitoring of project indicators by the different agencies and the PCU, social assessments will be carried out for mid-term reviews and at the end of each of the two project phases. Special assessments for resettlement results will be carried out by an independent auditor. - 25 - EL MINA DISTRICT RESTRUCTURING: INTERVIEWS WITH SLUM DWELLERS "IT'S LIKE A DREAM" The inhabitants of the kebbe view their current status as extremely difficult and precarious. The poverty and insecurity in which they find themselves are so pronounced because they have been deeply affected, discouraged, and even frustrated by this "long and intolerable wait. " For over 25 years they have inhabited a "district in a perpetual state of waiting" (Hay Lintidhar). Thus, in the eyes of the population, everything hinges on the division of land into lots, on the allocation of the lots, and on their being given legal status. If this doesn't happen, any other changes will be unacceptable. (Group of unemployed persons) "We're ready for anything now. We brought this zone to life, we made it what it is today, and no one can force us out. We wouldn 't accept all the gold in the worldfor our parcels of land!" (Group ofyoung women) "This means that lots will be created, that we '11 have enough water and schools, equipment with which to work and jobs. We'll have electricity to brighten up our lives and make things easier, transport services will open up the zone to the outside, and we '11 have easily accessible roads; we 'll also have health centers, millet mills, and vocational training centers. " (Group of wives) "Even if restructuring doesn't solve all the problems of the kebbe 's poor inhabitants, it will provide guarantees and the security of land tenure. The zone will be an official entity, and public authorities will pay attention to it. It will be developed -for example, electric power will be brought in - and there will be fewer robberies and less crime. I imagine a police station will also be built to restore order and justice. Of course, there is a danger that people will have to move further out andface problems with transportation, water, and schoolfor their children, or that they '11 end up with neighbors they don 't get along with. " (A woman who is head of a poor household) "Even if restructuring doesn't solve all our problems, it will mean security of land tenure. Everyone will be able at least to build an enclosed room, live in privacy, and enjoy peace and quiet, protectedfrom thieves and bandits. Maybe the authorities will be a lot more interested in us. " (Head of a poor household) He's also optimistic about the district's future, even though he thinks it's like a dream, since he notes that "some people really envy the district because of its strategic and ideal location. " (Head of a poor household) Indeed, the restructuring will leave the kebbe in the same position as, if not better off than, other districts, because its inhabitants share a stronger sense of solidarity and are better mobilized. For example, political parties are particularly successful at recruiting people here because of the population's militant and civic-minded stance. (Group of owners and tenants) "If I have a parcel of land, I can set up a carpentry workshop, and I'll have an address. " he said. (Head of an average household) -26 - 7. Safeguard Policies: 7.1 Do any of the following safeguard policies apply to the project? Policy Applicability Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) 0 Yes 0 No Natural habitats (OP 4.04, BP 4.04, GP 4.04) 0 Yes * No Forestry (OP 4.36, GP 4.36) 0 Yes * No Pest Management (OP 4.09) 0 Yes * No Cultural Property (OPN 11.03) 0 Yes * No Indigenous Peoples (OD 4.20) 0 Yes * No Involuntary Resettlement (OD 4.30) * Yes 0 No Safety of Dams (OP 4.37, BP 4.37) 0 Yes 0 No Proiects in International Waters (OP 7.50, BP 7.50, GP 7.50) 0 Yes 0 No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60) 0 Yes 0 No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. The adoption by the Govermment of the LARAP was a condition for negotiations. In addition, to ensure adequate assessment and resolution of resettlement issues, the Mediator of the Republic has been designated to handle disputes related to resettlement operations. He will be supported by an NGO facilitator, to be recruited by UDA, to support the affected people. Funds for resettlement grants will be made available by the Government of Mauritania prior to disbursement under component 1. F. Sustainability and Risks 1. Sustainability: Benefits of the project are expected to be sustainable because of the strong commitment of national and local governments and the ownership demonstrated through the active participation of communities and other stakeholders at all stages in the design of the program. The costs of infrastructure provision to support economic activities and water supply will be directly recovered since beneficiaries are willing to pay for them. Developed land will be sold for cash and costs for land improvement will be recovered. The new land management system, which will be set up under this program, the increase in delivery of land titles, street addressing, and strengthening of communities will allow greater tax revenues and sustainability of other subprojects. 2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1): Risk Risk Rating Risk Mitigation Measure From Outputs to Objective Expected complementary financing in N HIPC and PRSP consider health and education health and education in slums will not as priorities. Public Investment Programs will materialize. be reviewed annually to ensure adequate financing in these sectors and close coordination will be assured with the concemed sectors. Inadequate sustained commitment to M Govenmment has committed in the ten-year upgrade and prevent slums on the part of PRSP to upgrade and prevent slums. The APL the Govenmment and interested communes. and annual public expenditure reviews will be used to monitor commitment. Land speculation intensifies as slums are S Speculation will be limited by upgrading - 27 - upgraded with the poor selling off their gradually, and putting in place the legal properties and moving out to create new framework and procedures for land titling and slums. home ownership. Computerization of census made in slums to avoid dual assignment of land. The poor will have access to micro-credit for housing improvements and income-generating activities. From Components to Outputs Inadequate institutional and financial M Interventions will be kept simple. Efforts to capacity for operations and maintenance improve financial revenues needed for in relevant local governments. operations and maintenance and management capacities will continue under the Urban Infrastructure and Pilot Decentralization Project Technical assistance will be provided to strengthen municipal capacity for delivery of urban infrastructure and services in Nouakchott and Nouadhibou. Collection of taxes is expected to improve with new management tools (including land titles, land registration, street addressing, and dramatic increase in funds transferred to municipalities). Capacity of CHDLPI to upscale its pilot M A business plan, including a training and intervention and to develop and deliver capacity-building portion, is being prepared for new products in conjunction with this CDHLCPI. Efforts will be made to rely on program. NGOs and specialized institutions for implementation and provision of technical assistance to communities. Untimely implementation of the reforms M Reforms needed to support this program concerning conmmunity development, adequately have been prepared and agreed with regularization of land tenure, and urban the government; some are already under development planning and management. implementation, and others are legal covenants or conditions of Credit effectiveness. Inability of the poor to identify income- M NGOs, community groups, and universities will generating activities and to adapt to new be involved in assisting communities to identify professions such as artisanal fishing. activities, formulate proposals, and share expeniences from other countries. Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) 3. Possible Controversial Aspects: None. - 28 - G. Main Loan Conditions 1. Effectiveness Condition (a) Appointment of an auditor acceptable to IDA; (PCU) (b) Nomination of a financial manager and recruitment of technical assistance for the PCU, acceptable to IDA; (PCU) (c) Submission of Project Implementation Manual; (PCU) (d) Signing of subsidiary loan agreements with SONELEC and SOCOGIM acceptable to IDA; (Government) (e) Submission of bidding documents for works for the first year, with IDA's non-objection (El Mina restructuring bidding documents, and technical assistance); (UDA, AMEXTIPE) (f) Signing of conventions for delegated contract management and detailed first year work program with UDA and AMEXTIPE; (Govermment) (g) Nomination of a financial manager and recruitment of technical assistance for UDA, acceptable to IDA, recruited; (UDA) (h) Submission of Nouakchott, Nouadhibou, Central Directorate of Municipalities, and Asociation of Mayors of Mauritania audit reports; (i) Recruitment by UDA of the NGO facilitator acceptable to IDA; and (j) Submission, by the Government, of a letter clarifying the fiscal exemptions of the Project, to IDA. 2. Other [classify according to covenant types used in the Legal Agreements.] The Conditions of Negotiations were: (a) Adoption, by the Government, of a Sector Policy Letter, acceptable to IDA; (b) Adoption, by the Government and submission to IDA, of the Resettlement Action Plan for El Mina, acceptable to IDA; (c) Adoption by the Government of the Environmental Impact Evaluation (EIE) report and the Environmental Management Plan (EMP) and submission to IDA after publication; (d) Submission of the Social Impact Evaluation final report (SE); (e) Creation of the PCU and recruitment of a coordinator, acceptable to IDA; (f) Adoption of a Decree of the UDA and recruitment of a General Director, acceptable to IDA; (g) Signing of the consultant contract for audit of the municipalities of Nouakchott, Nouadhibou, and the Central Directorate of Municipalities; (h) Consultation for detailed studies and bids for works launched (Ist and 2nd phases) for under-equipped allocated land and for roads (I st phase) for Nouakchott; (i) Adoption of a Business Plan and Manual of Procedures by CDHLCPI, acceptable to IDA; (j) Set up of the Attribution and Compensation Commission for resettlement in El Mina; (k) Recruitment of a mediator for resettlement issues; (1) Adoption of a restructuring plan and allocation for El Mina; (m) Priority launching of the process for land regularization for the resettlement zone of El Mina; (n) Launching of the process for land regularization for the rest of the kebbe of El Mina; (o) Consultation launched for the recruitment of a financial management specialist (consultant) for setting up the accounting and financial management systems of UDA, PCU, and SOCOGIM; (p) Recruitment of a consultant for the preparation of the Manual of Procedures for the Program. - 29 - Agreements reached: (a) Increase transfer of funds to municipalities through Regional Development Fund (UM600 million in 2002, UM1,000 million in 2003, UMI,500 million in 2004; for the following years the amounts will be agreed with IDA for fiscal year during the preparation of the annual budgets of the Government; and these amounts will be included in the Government's budget); (b) Follow-up operations on street addressing and preparation of fiscal files and their extension to upgraded slums; (c) Review of "taxe d'habitation" and "taxe fonciere" and their collection improved dramatically improved from the second year of Credit effectiveness; (d) Amendment of real estate law, law governing real estate development activities, Decree 2000-089, before end of year 2002; (e) Adoption of procedures for release of land, acceptable to IDA (by year end 2002), with prohibition of any transfer of land apart from allotments established in accordance with the City Master Plan involved in the project, and duly approved by the concerned authorities; (f) Amendment of SOCOGIM's charter (by year end 2002); (g) Clarification of the regulatory framnework for urban development (by year end 2003); (h) Adoption of enabling regulation in the urban sector on environmental protection issues (by year end 2002); (i) Adoption, through appropriate legislation, of the urban city master plans, and their application by June 30, 2002; (1) Land made available for the kebba of El Mina before December 31, 2002, the resettlement zones being completed before December 31, 2001 and for other gazras before December 31, 2002, beginning with land for resettlement; (k) Adoption of the legal framework, before end of year 2001, for the development and formal participation of associations in the urban sector; (1) Adoption of procedures for remodeling of land in slums and regularization modalities (by year end 2002); (m) Carry out an inventory of all vacant infill land in Nouakchott and a program implemented for regularization to make the land available for uses indicated in the new master plan of Nouakchott (before end of June 2003); (n) Transfer of land to municipalities for subprojects and preparation of serviced lots to prevent the development of new slums (by year end 2002); (o) Concession of sanitation facilities in artisanal fishing zones and of markets to be built under the project (including the cattle market) to private operators in Nouakchott and Nouadhibou; (p) Review of solid waste management in the cities included in the project, specifically Nouakchott and Nouadhibou, with private sector involvement and cost recovery (by June 30, 2002); (q) Secure adequate quantities of water (25 liters per person/day by year 2005 and 35 liters per person/day by year 2010) for slums to be restructured or equipped (in Nouakchott) under the project; (r) Make funds available for micro-credit, compensation, operating costs for UDA for the first year, and other significant counterpart funds; (s) Signing of yearly municipal contracts with performance indicators; (t) Review of city development strategies for Nouakchott, Nouadhibou, and Kaedi during the mid-term review of the project; (u) Key personnel of the PCU, UDA, and AMEXTIPE, their manuals of procedures, annual budgets, work programs, and salary structures would be acceptable to IDA during the program. - 30 - Conditions for the second phase of the program: (a) Presentation of social, environmental, and resettlement impacts of the program's first phase; assessment of the impact of the micro-credit sub-component, community and municipality development, progress in urban and land management, especially vis-a-vis land registration and land market, the urban environmental services (water and sanitation) delivery process, and of the PIP process in secondary cities. (b) Presentation of the assessment report of the first resettlement (El Mina District). (c) Submission of a resettlement action plan for the slums to be restructured during the second phase of the program (Arafat, Toujounine, Tensweilim, and Hay Saken) and provision of funds for resettlement and support to the vulnerable; (d) Updating of city development strategies for Nouakchott, Nouadhibou, and Kaedi through a participatory approach and approval of the investment programs through a full consultation process; (e) Transfer of funds to municipalities through the Regional Development Fund as mentioned above; (f) Collection of the "taxe d 'habitation " and "taxefonciere" dramatically improved; (g) Land management and registration dramatically improved (see program indicators); and (h) Implementation manual for the second phase. H. Readiness for Implementation X 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. El 1. b) Not applicable. C 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. C 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. Z 4. The following items are lacking and are discussed under loan conditions (Section G): k. Compliance with Bank Policies 0 1. This project complies with all applicable Bank policies. C 2. The following exceptions to Bank policies are recommended for approval. The project complies with all oth applicable Bank policies. Abdelghani Inal Letitia A. Obeng A. David Craig Team Leader Sector Manager Country Director - 31 - Annex 1: Project Design Summary MAURITANIA: Urban Development Program HieraSrchySw of Objecives In ; dicators Moit rn & Evaaion AC:0 Critic.al Assumtion Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) and Poverty Reduction Strategy Goal: Rapid, broad-based growth Economic growth Economic Data Growth will not benefit the and income generation poor; targeted interventions and employment creation measures are planned. Interventions targeted to the Decrease in percentage of Same as above and progress Policies may not focus on vulnerable. vulnerable people. reports, household surveys the poor; this will be mitigated by a participatory approach to the preparation of policies, especially for the PRSP, expenditure review (HIPC and PRSP), and appropriate programming. Strengthened capacity to Effective decentralization Same as above. Municipal Lack of competencies to design and deliver pro-poor, and local capacity building audits, CDHLCPI audits, develop micro-enterprises: pro-growth policies. with resources; community and PRSP reports training and technical development assistance for communities. Insufficient municipal capacity mitigated through training and technical assistance to build local capacity. - 32 - Key Performance Hierarchy of Objectives Indicators Monitoring & Evaluation Critical Assumptions Program Purpose: End-of-Program Indicators: Program reports: (from Purpose to Goal) Improved living conditions Infrastructure and service Project progress reports, Sustained commitment to in urban towns, mainly in coverage indicators in slum supervision reports, upgrade and prevent slums slums and prevention of areas: mid-term and final on the part of the future slums through land evaluation reports, survey, Government and interested servicing, improved urban (1) Impact on 541,590 social assessment, communes; prevention of management, and urban dwellers by 2010 (of independent audits, surveys land speculation by employment promotion. whom 281,590 are slum and CDHLCPI audit progressive land dwellers); development, and legal framework and procedures (2) Increase daily water for land tiding and housing consumption from 15 ownership. Micro-credit to liters/person to 35 liters/ the poor for housing. person by 2010; Operation and maintenance resources strengthened. (3) Reduction in water price by 60 percent by 2010; Active participation of NGOs in organizing (4) Improved sanitation communities, delivering with one latrine/9 slum technical assistance, and dwellers by 2010 (about developing pro-poor 30,000 improved latrines); products. Government and commited to provide micro-credit to the poor. (5) 15,000 land titles regularized; 15,000 land titles registered. Legal framework reviewed and Govenmment committed First Phase: to decentralization reform 1,100 plots developed, and to empowering 1,100 plots sold. communities. Central and local government Second Phase: strengthening is sustainable 800 plots/year developed, and results in improved 800 plots/year sold. management and land registration. (6) Number ofjobs created or employment conditions improved for 40,000 workers; 25,000 micro-finance loans (80 percent for housing, 20 percent for economic activities related to 20,000 additional jobs) by 2010. - 33 - Ke PeXrforWince Hierarhy: of Ob tives Indicators MoniE ion Ci AssumpUons Project Development Outcome I Impact Project reports: (from Objective to Purpose) Objective: Indicators: Improved living condition First Phase by 2005 Project progress reports, Sustained commitment to mainly in four slums of (1) Basic urban supervision reports, upgrade and prevent slums Nouakchott (El Mina, infrastructure upgraded and mid-term and final on the part of the Ryad, Dar Naim, and evaluation reports, survey, Government and interested Teyaret Nord) in use by 163,000 slum social assessment, survey communes; prevention of dwellers; and independent audits. land speculation by (2) Reduction in water progressive land prices by 50 percent in the development, and legal slums (from US$2 to less framework and procedures than US$1 per cubic meter) for land titling and house .3) Increased daily potable ownership. Micro-credit to (3) Increased daily potablethporfrouig water consumption from 15 the poor for housing. liters/person to 25 Operation and maintenance liters/person; resources strengthened. (4) 10,000 improved latrines; (5) Water pipes located at least 120 meters from each household; and (6) 3,000 land titles regularized; 3,000 land titles registered. Promote employment Number of jobs created or Same as above. Active participation of opportunities employment conditions NGOs in organizing improved for 20,000 Surveys and CDHLCPI communities, delivering workers; 12,500 audit. technical assistance, and micro-finance loans (80 developing pro-poor percent for housing, 20 products. Government percent for economic commited to provide activities related to 10,000 micro-credit to the poor. additional jobs) Improved capacity for 50 staff trained in land Same as above. Legal framework reviewed urban and land management management and and Government committed registration, and in urban to decentralization reform regulation; and to empowering 200 staff from communities. Central and municipalities trained in local Government municipal strengthening is sustainable management/finance. and results in improved management and land registration. -34 - Key Perforinance Hierarchy of Objectives Indicators Monitoring & Evaluation Critical Assumptions Output from each Output Indicators: Project reports: (from Outputs to Objective) Component: 1. Basic Urban First Phase by 2005 Progress reports, Purchase of rehabilitated Infrastructure Basic urban infrastructure supervision reports, land by speculators. First Phase by 2005 upgraded and in use by mid-term review, Mitigation through special 1.1 Slum upgrading 163,240 slum dwellers: independent audits, and conditions for land titling, 1.1.1 Nouakchott Paved roads: 10.8 km social assessments. monitoring, and First phase: Unpaved roads: 31.5 km micro-credit for housing. El Mina, Ryad, Dar Na1m, Fountains: located at less Population is not able to and Teyaret Nord. than 125 m from each plot. pay for water: prices will Classrooms: 356 be lower than in the year Second phase: Health centers: 3 2000. Arafat, Toujounine, Electricity: Main streets Tensweilim, Hay Saken, Latrines (improved): 19,900 and additional works in Latrines (built): 3,600 Ryad, Dar Naim, and Teyaret Nord. 1.2 New serviced land for Number of plots developed: Poor cannot pay for land or housing 1,100 housing: micro-credit to the Number of plots sold: poor. Speculative purchase 1,100 by the rich: low level of services, special measures for land titling. 1.3 Infrastructure to Market: principal market Markets will be franchised support economic activities for cattle to the private sector to Infrastructure for fishing ensure cost recovery and activities O&M. Private sector is Solid waste management also willing to pay for 13,000 workers impacted environmental investments to improve working conditions and the image of production (fish-processing activities). 1.4 Infrastructure in 12 Number of jobs created: O&M and cost recovery cities 50,000 person/month will be ensured through capacity building, reinforcement of tax collection, and development of communities. 1.5 Provision of water and See above. Insufficient water supply in electricity Nouakchott. A special water supply network is - 35 - financed under the program to ensure availability of water in the slums. 2. Micro-credit Micro-credit provided to 12, The CDHLCPI manual of 500 slum dwellers: procedures indicates the 7,500 use credit to acquire beneficiary criteria and land titles and build houses; arrangements to ensure that 3,500 use credit for income- this component benefits the generating activities. poor. 3. Institutional and Transfer of funds to Legal texts enacted but not Capacity Building municipalities increased by implemented. Willingness of at least 600 percent by year the Government to reform, 2005. and program legal Municipality incomes covenants mitigate this risk. increased by 50 percent by Adequate staff recruited, year 2005. trained, and employed. Number of persons trained Staff trained and adequately from: employed. Cornmunities: 30 CDHLCPI: 20 Municipalities: 200 Ministry of Equipment and Transport: 15 Ministry of Interior: 10 Ministry of Finance: 10 Ministry of Environment: 5 Ministry of Justice: 10 - 36 - Key Performance Hierarchy of Objectives Indicators Monitoring & Evaluation Critical Assumptions Project Components / Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) 1. Basic Urban US$66.80 million Supervision mission reports, Capacity of the Infrastructure disbursement reports, and Inter-ministerial Committee 11 SIums upgrading mid-term and final to coordinate the project. evaluation reports. Counterpart funds, 1.1.1 Nouakchott Annual financial and technical assistance, and 1.1.2 Resettlement technical audits. additional funds are grants mobilized from other donors grants Quarterly progress reports. in a timely manner. 1.2 New Serviced land Staff of implementing 1.3 Infrastructure to agencies trained in Bank support economic activities procedures. 1.4 Infrastructure for 12 LARAP/Mediator cities mitigating risks of 1.5 Water supply and resettlement. electricity for slums SOCOGIM staff trained in Bank procedures. 2 Micro-credit for US$6.00 million Same as above Tirnely mobilization of 2.1 Land acquisition or NGOs. regularization Sufficient counterpart funds 2.2 Housing are made available in a timely manner. 2.3 Economic activities 3 Institutional and US$7.0 million Same as above Staff mobilized to be trained Capacity Building by technical assistance 3.1 Technical Assistance to experts. community-based organizations, NGOs, CDHLCPI, and GIEs 3.2 TA for municipalities and the Association of Mayors 3.3 TA for Ministries 4 Auditing, monitoring, US$5.77 million Same as above. Technical assistance to and operating costs of implementing agencies to PCU, UDA, and boost capacity to implement AMEXTIPE the program. - 37 - Annex 2: Detailed Project Description MAURITANIA: Urban Development Program The program and project objectives will be achieved by working in partnership with comnmunities and the private sector on a sustainable basis to provide: (a) basic infrastructure in the regional capitals (for 100,000 inhabitants) and upgrading Nouakchott and Nouadhibou slums over a ten-year program (for 281,590 inhabitants), including access to: (i) secured land tenure; (ii) basic urban infrastructure; (iii) infrastructure in support of economic activities, environmental protection, and employment creation (for 40,000 workers, mainly in artisanal fishery activities, stock raising, agriculture, and tourism); and (iv) affordable serviced land and/or shelter (for 100,000 inhabitants); (b) commnunity (associations, NGOs, and GIEs) targeted micro-credits and technical assistance for: (i) land tenure regularization or acquisition; (ii) construction or improvement of shelters and latrines; and (iii) income-generating activities (mainly GIEs and micro-enterprises for services and construction); and (c) empowerment of communities (associations and NGOs), enhanced decentralization (municipalities); and strengthened institutional framework and capacity building for urban and land management. By Component: Project Component I - US$66.80 million 1. Provision of basic urban infrastructure 1.1 A ten-year program of slums upgrading in Nouakchott (and Nouadhibou) Nouakchott: USM$13.60 first phase and US$20.70 second phase (water supply and electricity included in component 1.5), including technical studies and supervision, to be implemented by the UDA. (Nouadbibou: to be implemented by AMEXTIPE, in the second phase, included in component 1.4). This component aims at improving the living conditions in all slums and under-equipped districts the cities of Nouakchott and Nouadhibou by providing basic infrastructure. For Nouadhibou, the principles and procedures will be the same as for Nouakchott, but the sub-component will be included in the secondary cities component. The concerned population (271,590 persons in Nouakchott and 10,000 in Nouadhibou) will also benefit from secure land regularization. Micro-credits will encourage housing improvement and the creation of economic activities. Investments and maintenance costs will be recovered through the payments of land titles, the prices paid for services such as water supply, latrines, rental of marketplaces and shops, and the payment of taxes (property rights levy and housing taxes). The first phase of the program will set up the main infrastructure network, restructure the poorest slum (El Mina), improve the infrastructure of three others in Nouakchott (Ryad, Dar Naim, and Teyaret Nord), and prepare the second program phase including equipped land for resettlement. The second phase will restructure the five other slums of Nouakchott (Arafat A and B, Toujounine, Tensweilim, and Hay Saken) and the slums in Nouadibou, and focus on additional infrastructure and tertiary networks and land remodeling. Any involuntary resettlement (only in El Mina District in the first phase) for improving the slums and providing the basic infrastructure will follow Bank procedures, and all resettlements are planned to be made in the same neighborhood, the closest possible to the initial location, at less than one kilometer distance, with a resettlement grant. All land redemption will be made according to the current legislation in Mauritania. - 38 - The participatory, demand-driven approach of the project, and more specifically of this component, is based on expectations of the concemed population who see land property, housing, and basic infrastructure as priorities: "Without housing, the individual has no hope. The participants insist on legalized plots, but also on support to house construction... " (Group of unemployed in El Mina). Nouakchott slum upgrading 1. Population covered by the component Of the 2.3 million inhabitants of Mauritania, almost a third live in Nouakchott; this project aims to improve living conditions for over 271,590 people in Nouakchott, and 20,000 in Nouadhibou. Mauritania has experienced very rapid urbanization. The urban population has risen from 4 percent of the total population in 1962, to almost 62 percent in 1997, due to the massive rural exodus resulting from persistent droughts in the Sahel. The rural urban migration has continued to increase since then, and urban centers have seen the arrival of masses of poor people whose living standards and customs are not consistent to the urban life and economy. "In the rural area, life was easy, we had everything. This is why we had not gained any skill for working. With droughts, the only solution was exodus to the city where we hoped to find a job. Unfortunately, we arrived with no help, with no qualification. We are between two ways of living, still with rural habits and not yet integrated into the urban life. " (Group of women). This rapid urbanization was not accompanied by increases in urban housing or financial and administrative capacities of the State in urban management and development. Urbanization occurred spontaneously and with insufficient State planning or control. The following table shows the distribution of the population covered by the project. District Population Households Area Density Resettled Displaced I I I I (ha) Persons/H persons hovels (*) let PHASE _ = - 1 El Mina 36,640 7,475 128 286 12,000 2,200 2 Riyad 50,000 7,969 462 108 0 0 3 Dar Naim 59,000 14,500 756 78 0 0 4 North Teyaret 17,600 3,500 220 80 0 0 sub-total 1st phase 163,240 33,444 1566 104 2,200 2nd PHASE 5 Arafat A 51,340 10,545 320 160 2,020 748 6 Arafat B 9,220 2,093 90 102 1,055 205 7 Toujounine 33,650 7,067 300 112 3,214 1,135 8 TensweiUiim 7,840 1,799 100 80 1,242 407 9 Hay Saken 6,300 1,562 80 80 1,246 406 sub-total 2nd phase 108,350 23,066 890 122 8,777 2901 |TOTAL | 271,5901 56,5101 24561 1111 20,777 5,101 (*) in El Mina, hovels are the precarious dweUings made of metal sheets and wood. In other districts they are usually made of more solid materials. - 39 - 2. Description of the slums Heterogeneous districts comprise the outskirts of Nouakchott, even though they share some main characteristics: absence of integration into the city; illegal settlements making any house construction or improvement probleAmatic; types of housing (precarious, semi-solid, or using a mixture of different recycled materials, mainly wood, metal sheet, tarpaulin, and plastic); and lack of infrastructure and access to basic social services, such as water, electricity, education, health, and sanitation. Nouakchott has three types of slums: the kebbe, the gazra, and the under-serviced "terrains lotis" (recent building plots). This project aims at upgrading all the slums to raise living standards and preventing the emergence of new slums. a) The kebbe is an anarchic and illegal occupation of land by the poorest population. (kebbe means "dump" in the local language, Hassanya). The kebbe lacks all basic infrastructure, with very high prices for water because of the distance to water fountains. The only way for most people to have water at home is to buy it from donkey drivers, who eam their living from transporting water; this explains why the prices can rise to more than US$2 per cubic meter. The precariousness of the settlement makes the situation critical -some people have been living in El Mina for nearly 20 years and housing improvements has not been made. Cooking is done outside the house, and precarious paddocks enable the residents to breed animals for extra income, or for special occasions, such as religious feasts. Incomes are extremely low, and fall far below the extreme-poverty level (an average income of US$0.5 per person/day in El Mina). No sanitation exists, and most parts of the kebbe are inaccessible to motorized vehicles. The last existing kebbe is El Mina, in Nouakchott; and it will be restructured in the first phase of the program, since it is the poorest and most urgently in need of upgrading. - 40 - The map below shows the District of El Mina, with planned roads and water fountains. .. - ~~~Plan d'invesfssements i a' t ~~~~priornotWes 20112206 |~~~~~~~~~~~~~~~~~~~~~~~O( smumf _ i . . I~~~~~~~~~~~~~~~~~~W NM* JW AM f U~~~~~~~~~~~~~4 - 5. Sub-components, based on UrbaPlan studies (Reports dated October 3, 2000 and December 4, 2000) (i) Extension of the basic infrastructure (a) Streets The frame proposed is 20m broad road every 550m approximately, and 12m road every 270m. The 20m-wide roads will be partly paved and compacted. The 12m wide roads will generally not be paved. Within the squares delimited as such, 9m wide paths will be prepared to develop in the future into a tertiary network. Investments for roads are summarized at the end of the description. The primary network will be prepared first to structure the districts and to ensure better service to the slums. Secondary and tertiary networks will be built after the primary network is completed. (b) Water and electricity distribution (see sub-component 1.5) Water is a major concem of slum dwellers, and a heavy burden on family budgets. Improving the entire water system is, therefore, justified for health reasons and poverty alleviation. Two priorities have been set for water supply: * a possible daily consumption of 20 liters per person in the first period, with the size of the pipelines allowing a capacity of 30 liters, without modification of the network; and * a maximum wallcing distance of 120 meters from any house to a water fountain. The following figures were used to calculate the investments: there should be at least I water tower, 9 fountains with a daily output of 14,000 liters for every 31.36 ha (which corresponds to 6,300 inhabitants). El Mina will have 65 fountains (only 5 exist), 8 water towers will be constructed, and more than 18,000 meters of pipeline of various diameters will be installed. Water tariffs are determined (by SONELEC) to ensure total cost recovery (see Annex 4 - Table 4.10 Financial Projections). Public lighting is one of the principal needs expressed by slum dwellers. It reinforces security, enables socio-economic activities beyond daylight, facilitates the development of refill stations for batteries used for television and lighting, offers possibilities for families to be connected to the network, and allows public buildings (schools, health centers, markets, shops, and "hammams" ) to be operational after dark. (c) Sanitation The entire population living in slums or under-equipped districts uses autonomous sanitation, essentially latrines or pits of bad quality. In the kebbe and gazra, there is hardly any equipment, and elsewhere, all latrines need improvement. Sewage water is evacuated directly in the streets. The evacuation of waste is neither organized nor controlled, no official disposal site exists, and the mud is ejected directly on the green belt or in holes dug in the districts. School sanitation is scarce and many schools are still devoid of latrines. One of the main goals of the Urban Development Program is to improve living conditions in low-income districts. In order to achieve this, the sanitation operation will consist of: -44 - (c) (i) Improving access to sanitary installations for the families. In precarious districts, the project will equip plots with latrines, for which half of the cost will be subsidized. During the first phase: (i) 2,200 latrines for resettled families in the resettlement zone of El Mina will be built; and (ii) a program for the promotion of autonomous sanitation in under-equipped districts will be developed. The "Petit Sanplat" model, a concrete flagstone has been experimented with through the Twize project, and was a success. In the resettlement area, and in other salted soil sites, the choice of materials and the plans for the pit should be adapted to saline the possible corrosion. In the long term, construction and rehabilitation of about 30,000 latrines will carried out. (c) (ii) Servicing schools, health centers, mosques, markets, and public places with latrines. The situation and description of latrine blocks will be detailed in the plans. In the districts where the soil has a high concentration of salt, and where the groundwater level is high, latrines will be built with a corrosion-resistant type of cement. Every public building will be connected to the water network. The construction of these installations, latrines and connections, will be conditioned by the preparation of a management and maintenance plan and commitment by the beneficiaries or the managing agent to this plan for every building. It is also proposed, after consultation with the population, to plan "hammams" in some areas, with management delegated to the private sector. In addition to the program of construction/rehabilitation of latrines for new resettlement districts, or plots created within the project, the Urban Development Program will encourage the preparation and execution of a program for the development of on-site sanitation in suburban districts. This program will include: (i) assistance for the construction/improvement of family and common sanitation services; (ii) a sub-component for hygiene awareness and education; (iii) assistance to the organization of a disposal system (environmental component of the project); and (iv) training of bricklayers, artisans, public lavatory managers and private operators, traditional and mechanical cesspit emptiers, and NGOs. The piloting of this program will be done by the town council, the hygiene services (CNH), and the CDHLCPI and the program will be implemented by NGOs and other operators. The sanitation plan (still under study) will be the basis for the definition of the program. On-going institutional studies in the water sector should clarify the institutional and financial organization proposed by the on-site sanitation sub-sector. The management of public latrines should be by the private sector or at least private operators who are paid for their service. Cost of the sanitation component in suburban districts: _____Year (Phase I) 1 _ 2 _ | 3 4 5 Total (US$ 000) Construction/rehabilitation of latrines 640 540 1,080 1,100 3,360 IEC, social mediation, hygiene 60 50 100 90 300 education Training of artisans and operators 20 10 10 10 50 Studies and Execution Manual 20 _l_ 10 20 50 Total 20 720 610 1,190 1,220 3,760 -45 - (ii) Public services (a) Health Based on the Government's health policy, investments for health centers, prepared with the health administration, will be the following: District El Mina Riyad Dar Naim North Teyaret Arafat A Population 36,640 50,000 59,000 17,600 51,340 Health Centers: Existing A+B* A A+3B B A To be built B 2B none B 2B District Arafat B Toujounine Tensweillim Hay Saken Total Population 9,220 33,650 7,840 6,300 271,590 Health Centers: Existing B B B none 4A+8B To be built B 2B none none 9B *Type A is a large health center with several services, and type B is a smaller health center with limited services. (1) Education Classes with a capacity of 70 pupils for primary education and 45 pupils for secondary education will be the standard adopted. The corresponding investments required are: * UM2.0 million per primary class of 70 pupils; * UM2.1 million per secondary class of 45 pupils. The Government's aim is to reach an enrollment rate close to 100 percent of the school-age children. Projected investments for education (prepared with the Ministry of Education) are summarized in the following table. -46 - District El Mina Riyad Dar Naim North Teyaret Arafat A Population 36,640 50,000 59,000 17,600 51,340 Area (ha) 128 462 756 220 320 Primary classes: Existing 54 80 100 36 70 Planned 17 47 90 20 55 Secondary classes: Existing 8 12 0 15 8 Planned 29 49 92 12 55 Costs (UM) 184,066,341 246,834,000 468,279,000 80,871,840 304,703,784 District Arafat B Toujounine Tensweillim Hay Saken Total Population 9,220 33,650 7,840 6,300 271,590 Area (ha) 90 300 100 80 2,456 Primary classes: Existing 70 56 12 0 478 Planned 55 26 7 15 332 Secondary classes: Existing 8 24 0 0 75 Planned 55 17 10 8 327 Costs (UM) 96,543,720 139,612,813 54,682,969 70,511,969 1,646,106,436 (c) Markets, transport stations, and cemeteries The strategy is to first improve the access and design of existing areas, increase the number of customers in shops whenever possible, and consider the opening of new markets at a later stage. No transport station exists in peripheral districts. With the road network improved through the project, taxi and bus services will enter peripheral districts which are currently poorly served. Stations are planned to ensure parking and the protection of citizens against the sun and wind. For the kebbe and gazra, the need is estimated on the basis of 2 parking spots for 1,000 inhabitants, for an investment of UM50,000 each. There is only one cemetery in Nouakchott, and a new one is planned in Ryad. The cost will, however, be distributed equally among districts. (iii) Resettlement and resettlement grant Slum restructuring has been prepared for the first phase districts and will be prepared for the second phase districts in consultation with stakeholders and Project-Affected People (PAPs) at different levels. Exhaustive census and socio-economic surveys were carried out for the first phase of the project in December 2000. A Ressettlement Action Plan (RAP) was prepared for the kebbe of El Mina following the Bank's Directive OD 4.30 for Involuntary Resettlements. RAPs will also be prepared for the other slums - 47 - to be restructured during the second phase of the program. All resettlement is planned to be in the same neighborhood and will be implemented as indicated in the RAP. Compensation Owners and tenants of houses (identified in the December 2000 census) and structures in El Mina who will be displaced, will be compensated as indicated in the RAP adopted by the Government. The Government has agreed that owners and tenants should be treated equally and be eligible for a resettlement grant, as indicated in the O.D 4.30 World Bank Directive. Compensations will be paid by the Government, and land redemption will be undertaken by the concemed Mauritanian authorities. Additional measures are plannedfor vulnerable persons A plot with a latrine will be assigned to each displaced family (owner and tenant, in the names of both spousesfor married households) on the land prepared for resettlement. The assignment will be made only when the following conditions are satisfied: * effective development of the plot within a maximum of three years; * plot inhabited at the end of three years by the displaced household (prohibition of sale during the first three years). These measures are intended to reduce speculation. Assignments will be recorded in a register held at the "Direction des Domaines", without giving any document for a three-year period starting on the day of the assignment. At the end of three years, if previous conditions are satisfied, an authorization to occupy will be delivered under the conditions of Decree n°65-147 of October 8, 1965. The payment will be carried out at that time (UM48,000 per plot). If the above conditions are not met, forfeiture will be pronounced and the authorization to occupy will not be delivered. The final title can only be delivered after complete payment. A particular incentive could be delivered to people who adhere to a housing improvement program and the final assignment could be accelerated if a solid structure is built by the same inhabitants who were displaced. These measures have the advantage of discouraging speculation because they avoid giving any negotiable document too quickly. A "Commission d'Attribution et de Compensation", chaired by the Hakem of El Mina, was created on April 15, 2001 and comprises representatives of the Ministry of Equipment; the Ministry of Finance, the CDHLCPI, the commune of Nouakchott, five representatives of the displaced population, two representatives of NGOs active in the kebb, and a representative of the Mediator of the Republic. This Commission will: (i) validate assignments and handle complaints; (ii) validate compensation and handle questions conceming compensation; (iii) optimize assignments to reconstruct existing neighborhood links according to the wishes of the people displaced, based on a method which will be defined in consultation with these people; and (iv) ensure transparency of the operation. Conflicts may arise on the question of eligibility for plot attribution. Certain people may declare they have been omitted during the census, others may claim that someone else has been taken into account instead of them. The Mediator will be a witness to the validity and conformity of the operations carried out and should be - 48 - supported by the NGO recruited by UDA. The NGO should be ideally active in the field of poverty alleviation, and have knowledge of populations living in the precarious, marginalized districts. (iv) Follow-up and Evaluation of the Resettlement Follow-up and evaluation actions will be organized to: (i) evaluate the conformity of the execution with objectives and methods given in the RAP, and the imnpact of the RAP on income and living standards; and (ii) follow up on situations presenting particular social or economical issues in the displacement and resettlement process (during 5 years). Auditor The Auditor will be an independent engineering and design office or consultant, or an NGO, with practical experience in the conception and implementation of a RAP following the World Bank directives. The terms of reference will be prepared in due time by the implementing cell of the RAP, after examination by all concerned parties. All parties will open this documentation, the RAP and its implementation, without any restriction or reservation. Implementation Calendar The evaluation, independent from the execution of the RAP, will take place in two phases: (i) first evaluation mission, in the six months following the completion of the implementation of the RAP; and (ii) second evaluation mission, two years after completion. Both evaluations will take place following the same methodology, using the same indicators, and identical or very similar questionnaires. (v) Street Addressing As part of improvement in living conditions, the restructured and serviced slums will have their streets and plots addressed, so that the people will not remain anonymous. This is also important for various activities such as tax collection. (vi) Land title regularization ( see above) (vii) Solid waste management (see solid waste management component) (viii) Links to other sanitary-prevention programs. During the formulation and implementation of the program for the promotion of sanitation and the strategy for solid waste (especially bio-medical) management and water fountains, activities for (i) promotion of hygiene; (ii) quality control; and (iii) follow-up and impact evaluation will take place in partnership with the Centre National d'Hygiene (CNH) and the health centers in the different districts. A research-action component could be developed by the CDHLCPI in one of the districts covered by the UIDP. The UDP could also be used as "platform" for the HIV/AIDS prevention programs developed by the CNH and the DPS. The problem have not yet been identified, and a national survey was started in December 2000. All approaches and activities conceming sanitation should be coordinated and the population covered should have a single, well-identified interlocutor. In secondary cities, the CNH, in partnership with the World Health Organization, has studied the possibility of setting up "focal points" of people who could be used for implementation of the municipal sanitation programs. 49 - 6. Implementation The component will be implemented by UDA, which will set up a special division for slum upgrading that will include social scientists, urban planners, and engineers, assisted by foreign technical assistance recruited by Credit effectiveness. UDA will work closely with CDHLCPI, the Commune of Nouakchott, the concerned Hakems, and with the Commission and the Mediator mentioned above. 7. Second phase of the program The second phase of the program will be implemented under the same procedures and principles, that will be reviewed and improved based on the experience gained during the first phase. District Roads Water I Electricity | Cor- Education Latrines I Cemet. I Total + (t) ( I) merce + Address J health_ El MIna Restructuration (mill.UM) 333.66 139.06 378.25 37.87 159.02 228.70 21.61 1,298 36,640 Resettlement (mill. UM) 180.62 46.20 125.67 18.59 62.41 152.66 7.18 593 inhab. Total (mill. UM) 514.28 185.26 503.92 56.46 221.43 381.36 28.79 1,892 total per inh. (US$) 56.14 20.22 55.01 6.16 24.17 41.63 3.14 206 Riyad Restructuration (mill.UM) 224.15 226.96 222.40 39.30 185.60 140.56 0 1,039 50,000inh total per inh. (US$) 17.93 18.16 17.79 3.14 14.85 11.24 0 83 Dar Nalm Restructuration (mill.UM) 81.63 204.26 333.40 46.15 154.53 175.04 0 995 59,000inh total per inh. (US$1 5.53 13.85 22.60 3.13 10.48 11.87 0 67 Teyaret Restructuration (mill UM) 23.76 99.86 97.80 39.06 40.44 37.83 0 339 17,600in total per inh. (US$ 5.40 22.70 22.23 8.88 9.19 8.60 0 77 SNob-total phase I imill. Ul 843.8 716.3 1, 157. 180.9 602a06 734.7 28 75 426 Arafat A Resettlement (mill. UM) 63.98 9.99 33.49 5.09 34.76 42.38 0 190 51340inh. total per inh (US$) 4.98 0.78 2.61 0.40 2.71 3.30 0.00 15 Arafat B Resettlement (mill. UM) 29.28 4.54 6.02 0.91 6.24 7.61 0 55 9,220 inh. total per inh (US$) 12.70 1.97 2.61 0.40 2.71 3.30 0.00 24 Toujounin Resettlement (mill. UM) 92.43 14.58 39.63 5.86 41.34 50.96 0 245 33,650 inh. total per inh (US$)) 10.99 1.73 4.71 0.70 4.91 6.06 0.00 29 Tenawellin Resettlement (mill. UM) 35.68 5.63 16.98 2.51 17.71 21.83 0 100 7,840 inh._ total per inh (US$) 18.20 2.87 8.66 1.28 9.04 11.14 0.00 5 1 Ray Oaken Resettlement (mill. UM) 34.60 5.63 13.64 2.02 14.23 17.54 0 88 6,300inh.1 totalperinh (US$) 21.97 3.57 8.661 1.28 9.04 11.14 0.00 56 Sub-total Phase I 0 10971 |Resettlement other districts 255.96 40.3 109.7c1 1635| 114.21 14032| d 67i 1(milL. UM) 1 9 |Compeneation (mill. UK) 125 Preparation of Phase nI (-S% of Phase I inveatmesrnt 79.7 31.31 88.65 15.41 655 63.41 8.5 35 r;il:.UblM Total investment for Phase I 1,18 788 1,356 2131 782| 931 371 S,41 |(mlLX UY I "I) I () Water and electricity components will be implemented by SONELEC. - 50 - District Roads Water Electricity Com- Education Latrines Cemet. Total + M* M* merce +l Address. health l Riyad Restructuration(mill.UM) 0.00 0.00 148.16 39.30 136.22 210.86 35.29 570 50,000 inh. total per inh. (US$) O.00 0.00 11.85 3.14 10.90 16.87 2.82 46 Dar Naim Restructuration(mill.UM) 173.12 136.18 222.26 93.71 313.75 262.54 41.63 1,243 59,000 inh. total per inh. (US$) 11.74 9.23 15.07 6.35 21.27 17.80 2.82 84 Teyaret Restructuration(mill.UM) 30.24 0.00 65.20 0.00 77.93 88.29 20.46 282 17,600 inh. total per inh. (US$) 6.87 0.00 14.82 0.00 17.71 20.07 4.65 64 Arafat A Restructuration(mill.UM) 447.46 233.05 633.93 80.31 359.11 308.89 36.23 2,099 51,340 inh. total per inh. (US$) 34.86 18.16 49.39 6.26 27.98 24.071 2.82 164 Arafat B Restructuration(mill.UM) 117.50 41.86 113.85 14.63 124.68 60.60 6.51 4801 9,220 inh. total per inh. (US$) 50.98 18.16 49.39 6.35 54.09 26.29 2.82 208 Toujounine Restructuration(mill.UM) 447.36 152.52 414.90 56.86 184.57 241.23 23.71 1,521 33,650 inh. total per inh. (US$) 53.18 18.13 49.32 6.76 21.94 28.68 2.82 181 Tensweili Restructuration(mill.UM) 225.50 35.60 96.82 12.74 55.69 51.84 3.56 482 7,840 inh. total per inh. (US$) 115.05 18.16 49.40 6.50 28.41 26.45 1.82 246 Ray Saken Restructuration(mill.UM) 153.87 28.60 77.80 11.51 58.92 43.96 4.451 379 6,300 inh. total per inh. (US$) 97.69 18.16 49.40 7.31 37.41 27.91 2.83 241 Sub-total Phase 11 (mill. UM) 1,5950 62781 1,77294 309.0 1,310.81 1,268.2. 171.8 7,05 |Compensation mill. UMI 375 Preparation of Phae 11__ 1-5% of Phase II investment) 79.75 31.3! 8&6' 15.4 65S5 63.4 mill.UIm) _ _ 1TotaPhasel 1mill. UM 151 59 168 29 124 120 1.2 Land development (US$1.1 million) Land allotment, allocation, and development will be carried out to prevent creation of squatter settlements in the future. This sub-component includes two aspects: (i) land to be transferred to the municipality of Nouakchott for allotment and allocation to the poor; and (ii) activity of land development to be onlent to and implemented by the public land development company, SOCOGIM. During the first phase of the program, SOCOGIM will implement only a pilot activity, which could be extended to the second phase if results from the first phase are acceptable to IDA. The sub-component will be onlent on IDA conditions with a 20-year repayment period and five years of grace. The supply of serviced land for housing with a secure title, at affordable prices, for low- and moderate-income families is the first priority in addressing the housing problem and preventing the emergence of new slums. The program will finance the necessary infrastructure to service land for housing to be sold to individuals, housing cooperatives, and private developers. The Government has agreed to transfer land to SOCOGIM, to develop 1,000 to 2,000 housing plots a year. The land will be close to employment areas and the center of Nouakchott. Services will be provided progressively, depending on the capacity of households to pay for them. This will also make prices affordable and reduce land speculation. Transparency and targeting of beneficiaries are important for this operation. Procedures for release of land, including terms and conditions of sale and development, are conditions of disbursement, along the following criteria, satisfactory to IDA: (a) land is located close to centers of economic activities and employment; (b) low level of services in land to be developed; (c) accessibility to public transport; (d) plots will be for less than 160 square meters in area, to discourage purchase by rich families; (e) the program for development and sale, the intended beneficiaries, the schedule of release of plots, the agency handling the development and sales, the procedures for application and allocation will be - 51 - widely publicized and advertised; (f) plots will be allocated to low- and moderate-income families who do not at present own land or housing in Nouakchott; (g) plots will be allocated to individuals and housing cooperatives to construct houses for owner occupancy; (h) developers who are allocated plots would negotiate the terns of development in accordance with the broad criteria indicated here; (i) plots will be sold for cash at a price that would allow cost recovery and development of new land, in agreement with IDA; (j) plots will be sold in the joint names of husband and wife for married households; and (k) government micro-credit financing would be available for land acquisition by the poor. 1.3 Infrastructure to support labor-intensive economic activities and to improve the environment (Firstphase: US$7.0 million) (a) Construction of cattle markets in Nouakchott (First phase: US$1.0 million) The trading of cattle is very important in Nouakchott's economy. The average daily consumption of meat sold at butcher shops in Nouakchott is about 100 camels, 50 cattle and 1,000 lamb. These estimates do not take into account animals in transit to neighboring countries in the north and south of Nouakchott, or those sold to households. Only one official cattle market for lamb (the one at El-Mina) is recognized by the municipality of Nouakchott. The others are illegal and are located in residential areas. Problems posed by the lack of infrastructure and coordination in cattle markets include: (i) difficulty to render veterinary services; (ii) development of serious unhealthy situations; (iii) poor sanitation and environmental pollution; (iv) theft of cattle at night; and (v) inability of the municipality to collect taxes. The different actors involved in cattle trading want new infrastructure and equipment to allow: (i) veterinary control; (ii) sanitary conditions; (iii) management, use, and maintenance of equipment to ensure that tasks and responsibilities are well defined and assumed; (iv) participation and consultation with different actors regarding the installation and use of equipment; (v) security for animals, especially at night; and (vi) the development of related activities in areas surrounding markets and promotion of markets as growth centers in economic and urban development. The first proposition involves construction of a main market at the entrance of the city, on the East road. This market will help regroup commercial activities in the cattle markets in Nouakchott for local consumption or for transit to neighboring countries. The second proposition will, in the second phase, involve completing and equipping secondary markets reserved solely for small volume sales and other activities. The markets will be built and developed progressively and will be franchised to the private sector. (b) Infrastructure for artisanal fishing activities in Nouakchott (First phase: US$1.20 million) The maritime fishing industry in Mauritania can be divided into three sub-sectors: high sea, coastal, and artisanal fishing. Artisanal fishing has progressively taken on added importance in economic and social plans since it generates a lot of employment for marginalized groups with little investment. It requires little start-up capital and qualifications. It constitutes one of the main resources in Mauritania, being equally important for subsistence and foreign exchange. - 52 - The artisanal fishing sub-sector has grown rapidly, almost quadrupling in ten years. In 1984, there were 540 'pirogues ". By 1999, the number of boats had risen to 2,431. The fishing area in Nouakchott alone accounts for 748 registered '>pirogues" of which 565 are operational, representing 25 percent of artisanal fishing activities. The growth of activities in this zone (40 percent increase in the number of ')pirogues" in five years) has quickly saturated all available equipment. The site at fisherman's wharf in Nouakchott (which houses approximately 1,000 "pirogues" and more than 10,000 people) is presently equipped through cooperation between Japan and Mauritania, resulting in a fishing market, 20 wholesale stalls for fishmongers, 100 depositories for fishermen, 40 stores for general commerce and fishing accessories, 15 retail fish stalls, and one ice-making factory with a capacity of 5 tons per day. However, the equipment has become saturated very rapidly. The company in charge of managing the fish market has had to bring supplemental equipment including 72 stalls for wholesale fishmongers and 10 stores for business. If the equipment needs of artisanal fishing are met, this will prevent certain problems from developing including saturation, high density, unsanitary conditions, and security problems. It is therefore important to complement and complete equipment needs in order to create an appropriate environment for the further development of artisanal fishing in this zone. Security and safety at sea No safety equipment is available for the artisanal fishing site despite difficult sea conditions in this zone and lives are often lost. It is therefore necessary to build a post on site to wam fishermen of impending danger. It is also necessary to disseminate meteorological information on the local radio station to sensitize fishermen and provide information on sea conditions. - 53 - The table below shows the investments to be made: Designation Unit Quantity Unit price Sub Architecture and TOTAL (UM) -total technical studies. (UM) (UM) Supervision |Building. Offices for the artisanal fishing m2 100 60,000 6,000,000 600,000 6,600,000 sub-section Buildings for civil and medical m2 150 60,000 9,000,000 900,000 9,900,000 protection, weather forecast antenna Cold chamber civil engineering m2 30 100,000 3,000,000 300,000 3,300,000 + equipment Sanitation blocks m2 48 60,000 2,880,000 288,000 3,168,000 Networks Parking and street pavement of m2 1,100 6,000 6,600,000 660,000 7,260,000 roads Sea -water network Pumping rehabilitation 1 5,000,000 5,000,000 500,000 5,500,000 Distribution network linear 1,000 3,500 3,500,000 350,000 3,850,000 meter Street light U 20 150,00 3,000,000 300,00 3,300,000 Sanitation network in the industridz area Service network including linear 2,000 23,000 46,000,000 4,600,000 50,600,000 collector and civil works meter Pre-treatment construction 1 5,000,000 5,000,00 500,000 5,500,000 Pumping station 1 12,500,000 12,500,000 1,250,000 13,750,000 Fence Fence for fishing area linear 1,450 15,000 21,750,000 2,175,000 23,925,000 meter Fence for drying area linear 1,020 15,000 15,300,000 1,530,000 16,830,000 meter I Other Safety boat r 1 1 4,000,0001 4,000,0001 400,0001 4,400,000 lIngineering Study and testing for a hauling 1 25,000,000 system for the fishing boats Emergency protection measures 1 125,000,000 for the coast (legislation, studies, information, and physical investments) TOTAL (UM) 307,883, TOTAL (US$) 1,231,53 (c) Roads to improve traffic and increase access to the littoral zone in Nouakchott (First phase: US$2.0 million) The three main axes in Nouakchott are Rosso (towards the south), the road de l'Espoir (towards the east), and Teyaret (towards the north). They are the backbone of the road network in Nouakchott and well developed. However, secondary roads are insufficient. These roads allow traffic to disperse towards neighborhoods located far from the main roads and allow traffic for the neighborhoods to go towards the main roads. The existing road network lacks connections, which would allow a more rational spatial development in the city and easy flow of traffic. This proposition will reinforce two complementary sub-components: the first one for paved roads and the second one for unpaved roads. - 54 - Paved roads The improvements expected from paved roads include: (i) service unoccupied land to enable it to become an important part of the growth of the city in the next 20 years; (ii) open up non-valorized neighborhoods which surround the city; and (iii) direct the future development of residential areas. The road network envisaged will permit acceleration of the appreciation of newly allocated land and create a real network in the north and east of the city. This belt will allow passage from the north (Teyaret) to the south (Ryad) or from the west (fishing wharf) to the east (Teyaret) without going through the city center. It will help to reduce traffic in the city center, and at the same time, traffic conditions and life in neighborhoods around the city center. Two road widths have been proposed (7m or 8m) depending on the type of road (Sub-component 1: secondary roads; Sub-component 2: primary roads). The table below shows the road sections identified for rehabilitation. Paved roads Phase 1 Phase 2 Cost (UM million) (UM million) Ryad (Phase 1: 3 km/7m); 91.59 189.28 280.87 (Phase 2: 6.2 km/7m) Teyaret/Ksar (5 km/8m) 182.96 182.96 Tevragh Zeina (2.8 km/8m) 102.46 102.46 Toujounine (3.4 km/8m) 124.42 124.42 Toujounine (4 km/7m) 122.12 122.12 Dar Naim (4.3 km/8m) 157.35 157.35 Sebkah-El Mina (5.57 km/8m) 203.82 203.82 Total Paved roads 377.00 796.97 1,173.98 Unpaved roads Unpaved secondary roads are proposed for inside the new neighborhoods so that they become more accessible. Two types of unpaved roads are being proposed: (i) natural soil, which is sandy and needs a foundation bed; and (ii) natural soil, resistant, and which does not need a foundation bed. Unpaved roads Phase 1 Phase 2 Cost (UJM million) (UM million) (UM million) Teyaret et Ksar (7.4 km) 61.39 61.39 Ryad (Phase 1:7.1 km) 58.36 58.36 116.73 (Phase 2: 7.1 km) Dar Naim (9.6 kin) 41.58 41.58 Toujounine (9.4 km) 78.02 78.02 Sebkha-El Mina (2 km) 15.12 15.12 Total unpaved roads 119.75 193.08 312.83 (d) Construction for disposal of solid waste in Nouakchott, to initiate the new strategy of solid waste management, involving the private sector and ensuring cost recovery (US$2 million) The production of solid waste is estimated at 800 tons per day, of which 500 tons are collected daily by three private companies and the commune of Nouakchott, and then brought to a disposal area located in the - 55 - north-western part of Nouakchott. In spite of the efforts made by the commune and various NGOs to improve the collection of solid waste, much remains to be done to set up an effective service that meets the needs of the various districts. The performance of the private collecting companies whose contracts will end August 31 2001, is expensive and disappointing. Waste accumulate at unplanned disposal sties in the districts and around the city. To solve this problem, the commune is preparing a strategy of waste management including technical studies for the construction of transfer sites and a disposal facility and procedures for contracting the various operations to the private sector. The GTZ (German Aid Agency) financed a study for localization of the new disposal in Nouakchott and the AFD (Agence francaise de developpement) proposed support for the construction of new transit points. The strategy is oriented around the following mechanisms: (i) the primary collection will be ensured by district associations or GIEs, which will collect waste near households and deposit it in transit areas; (ii) transport the disposal site will be ensured, starting from transit areas, by private companies having the capacity to carry out this task effevtively (these companies will be paid according to the tonnage/volume deposited); and (iii) the waste disposal will be constructed at a center 25 km from the city. This disposal will be managed by the commune. The contracts of waste-collecting companies will end before the necessary investments have been made for this component, and it will be necessary to extend these contracts to December, 31 2001 and proceed to a phasing of operations. The first phase of the UDP solid waste component aims at helping implementation of the strategy for solid waste management and reaching the following objectives: (i) to improve the rate of waste collection at transfer sites and the conditions for solid waste disposal; (ii) to organize and train the GIEs, small contractors, and district associations for collecting waste in the districts and in areas of activity; and (iii) to improve the operational and management capacities of the commune in hygiene and waste management. The solid waste management component comprises the following: (i) works (US$2.08M): (a) adjustment of the new disposal (studies ongoing), in particular, road access, fences, tanks, and rock-bridges; (b) adjustment of transit areas; and (c) disposal processing; (ii) equipment (US$0.2M): (a) equipment for the operation of the disposal facility, bulldozer, excavator, and compactor; and (b) credit limit for the purchase of waste-collection materials by GIEs and small contractors (e.g., small containers); (iii) support to waste-collection organizations (US$0.36M): (a) IEC program for the population; (b) identification of waste-collecting organizations and transport companies and training of the operators; and (c) technical assistance to district organizations from NGOs and pilot projects; (iv) studies and supervision for the implementation of the strategy and Phase II preparation (US$0. 16M); (v) support for solid waste management and community hygiene services. This component is included in the institutional development sub-component. It will primarily reinforce municipal services through training, the supply of transportation for follow-up and control of waste collection, and transfer operations. - 56 - The solid waste component will be implemented by the commune of Nouakchott through the Departnent of Hygiene. A pilot project for plastic recycling will be implemented in parallel by CDHLCPI. The total cost of the component is estimated at US$2.8 million. Cost estimate for the component (Phase I) (US$'000) Year I 2 3 4 5 Total WORKS DISPOSAL INSTALLATION 1,400 1,400 Access Road Inside and outside inStallation Water -supply basin Fence, bridge TRANSFER AREAS 120 240 120 480 TREATMENT OF WASTE DISPOSALS 100 100 200 EQUIPMENT BULLDOZER, COMPACTOR, AND 100 100 EXCVATOR SMALL COLLECTING EQUIPMENT 100 100 STUDIES AND SUPERVISION 60 40 20 10 30 160 ORGANIZATION OF THE COLLECTION/PRE-COLLECTION OF WASTE IN THE DISTRICTS 100 100 70 60 30 360 IEC, helDed bY an NGO, training of the GIEs ASSISTANCE TO MUNICIPAL SERVICES (WASTE MANAGEMENT AND HYGIENE SERVICES) fm Training, equipment (detailed in institutional capacity building) Total _ _ 2,800 1.4 Basic Infrastructure in the 12 regional capitals (AMEXTIPE) (First phase: US$26.45 milion, of which US$14.06 milion fmanced by IDA) This sub-component will finance two five-year programs of construction and/or rehabilitation of basic infrastructure and municipal assets at the request of municipalities. The experience drawn from the two preceding urban projects favors the programs being prepared in a participatory manner, with the help of consultants, and aims to improve the environment. These programs, after their adoption by the municipal councils, will have to be approved by the Ministry of Interior and the CDHLCPI and proposed to IDA for its non-objection at the end of the first year of each five-year phase. The programs could be amended during project mid-term reviews. They would include: (i) water supply improvement; (ii) sanitation improvement (latrines); (iii) solid waste management; (iv) social infrastructure rehabilitation or improvement: including primary classrooms, primary healthcare centers, day care centers; (v) economic infrastructure subprojects: streets or other roads supporting economic activities, sidewalks, parking areas, and market places; (vi) municipal management subprojects, such as construction or rehabilitation of the tax office, street addressing, and office equipment; and (vii) regional management subprojects: office equipment or rehabilitation of regional administrations (interior, urban, finance, and justice), mainly with computerization. This component will be implemented by AMEXTIPE, on a contract management basis with the municipalities. Municipalities will annually sign a contract (similar to the ongoing urban project) with the central directorate in charge of municipalities, indicating benchmarks for their management performance, especially in tax collection. - 57 - 1.5 Water supply and electricity (SONELEC) (First phase: US$18.65 million) The supply and distribution of water in Nouakchott is the responsibility of SONELEC, the public energy and water utility. Important reforms are underway in both sectors with the restructuring of SONELEC and the establishment of a public-private partnership for the management and the operation of water supply and energy. In 1998, the Goverunent prepared a policy paper for development of the water sector with the following objectives: (i) improve access to potable water for all, both in terms of quality and quantity, with a special effort to reach poor communities; and (ii) increase the capacity of the sector to support poverty alleviation and improve sanitary and public health conditions. The strategy aims to increase access to water supply for poor communities with the use of appropriate tariffs and reduce, through tariff disincentives high, consurnption levels. Water supply in the district of Nouakchott In Nouakchott, water is provided through 28 drilling wells from the Indini fossil aquifer located 60 km northeast of the city. These wells are connected by a 37 km pipe network which carries the water into two 1,000 m3 water tanks from which two 700 mm pipes transport water to Nouakchott. A recent pumping station was constructed in order to increase water flow in the second pipe. The daily water supply is estimated at 39,000 m3 and domestic needs at 48,000 m3/day. The 547 km distribution network suffers from a lack of pressure and from illegal connections. Water losses are estimated at 28 percent. Less than 20 percent of the water flow reaches poor under-equipped areas where daily per capita consumption ranges from 13 to 28 liters, with an average of 15 liters at standpipes. In the poorest peripheral neighborhoods without standpipes, this per capita figure is even lower, about 5 to 10 liters per day. Despite these extremely low rates, the poorest households spend between 30 to 40 percent of their income on water. In these neighborhoods, water is provided through 168 standpipes, water tanks, and resale by donkey-drawn water carts. To improve water supply in Nouakchott over the long term, the Government is preparing a large-scale water transport project from the Senegal River, Aftout-Es-Saheli. In the meantime, the city must find an interim solution quickly to increase the potable water supply. The living conditions of the population cannot improve without substantial improvement in the provision of water to slums and under-served areas, which requires: (i) increased water flows from the production site; (ii) specific investments to bring sufficient water supply to these neighborhoods; and (iii) appropriate tariffs to reduce water use and maintain water availability at affordable prices. Improved access to affordable water supply has been identified as one of the three top priorities by poor urban dwellers, after land acquisition and shelter. Description of the water component The improvement of the supply water in the precarious districts of Nouakchott is an essential condition for the implementation of the UDP in improving living conditions in these districts. The water supply component of the program entails: (i) increasing production from the Indini aquifer with additional drilling of wells to provide a supplemental supply of 6,000 m3 to 10,000 m3/day and transfer this additional flow to water tanks through collection networks, and the necessary hydraulic and electric connections; and - 58 - (ii) improving transport capacity to existing and new water tanks in Nouakchott. The on-going feasibility study will determnine if a new intermediary pumping station is needed at PK25, or if existing facilities can transfer these additional flows with minor improvements and alternative operating procedures (extension of pumping hours is now limited to 12 hours/day). Once in Nouakchott, these additional flows will be allocated to slums and under-served areas as a priority. The following standards have been adopted by the Government after consultation with the stakeholders: (i) water provision through private or community-managed standpipes located less than 120 m from the houses; and (ii) a minimum daily water allocation of 20-25 liters/per capita in 2005 (first phase). At the distribution level, the project will consist of: (i) securing needed water supply in poor neighborhoods with the construction of elevated water tanks and reservoirs as well as a water distribution network; (ii) increasing the number of improved standpipes (to be located at least 125 m from each household); and defining alternatives to the existing unsafe and unclean standpipes with underground tanks: for example, pressurized water pipes equipped with flow control and direct taps on the standpipes. Several alternative solutions are being considered in the feasibility study; (iii) defining new standpipe management models with either community or private management and an appropriate tariff structure according to willingness to pay and affordability; and (iv) developing a hygiene education program for water users and standpipe operators to be conducted by local NGOs. The new infrastructure will be designed taking into account the existing distribution network, tanks, and other infrastructure proposed in the long-term Aftout-es-Saheli water supply project, the water distribution master plan under preparation, and the rehabilitation of the distribution network planned to support the restructuring of the urban water supply sector. Implementation and Financing of the component The component will be implemented by SONELEC in two phases, with the support of the CDHLCPI and NGOs for development of the standpipe management schemes. The cost of the new networks will be progressively recovered through water tariffs. It is expected that the cost of water for the final users will drop from US$3 to US$1 per cubic meter in year 2005 as the distance to standpipe will be reduced and the use of intermediaries to transport water will be limited. CDHLCPI will prepare an action plan to develop alternative job opportunities for intermediaries who will be put out of business with the improvement of water distribution. The production, transit to the entrance of the town of Nouakchott, securing and distribution of water will be financed by an IDA credit onlent to SONELEC. - 59 - Cost estimate of the component (Phase I) (US$'000) Year 1 2 3 4 5 Total PRODUCTION INDINISUB-COMPONENT 2.785 2,785 6 drilling wells, tubing, strainer and equipment collecting network DN 150/300 and accessories MT 10 kv Line Transformer for the pumping station TRANSIT Intermediate Station 865 865 Tank BA 2500 m3 Service building and pumps Securing and transfer Transfer center 1,195 1,195 Reservoir BA half buried 3000 m3 Transfer Pumps Plumbing and stopcocks Electricity Chlorination Transfer in network 4,600 4,600 Pipes DN 150 to 300 and accessories _ Distribution Network and fountains in the districts 1,000 1,150 1,000 _3150 Supervision of works and preparation of 195 265 70 65 600 Phase 11 Supervision of the component by SONELEC 50 L XT 50 |Total ___ 5,040 5,865 1,220 1,065 13,240 Electrification (US$5.42 million) Unlike other cities of the region, most of the poor neighborhoods of Nouakchott do not have electrical house connections or public lighting. However, the majority of population in these neighborhoods expressed a need for street lighting, both for security reasons and for the development of economic activities. Once the network is constructed, households can get private connections and battery recharging stations can be established where needed. In the first phase, the electrification program will focus on public lighting. However, infrastructure will be designed to facilitate private conmections and connections for public buildings. In the short term, it is unlikely that a large number of people will become creditworthy clients for SONELEC as connecting fees are high in these areas and the population is only able to pay the equivalent of 5 percent or less of total income (UMl00-1,599 per month) for energy. In the first years of the project, the provision of energy to these clients may not be attractive as it will require huge investments for a limited number of creditworthy customers with a low level of consumption. Given these conditions, the component will be implemented in two phases: (i) electrification of main roads bordering the squares with one pole every 40 meters allowing private connections for 8 plots. The available power per plot will be 0.25 KVA with a potential of 0.50 KVA. The total transforming capacity will be increased to 600 KVA; and (ii) the proposed network will allow further electrification inside the squares, with an electrified road every 130-150 meters, which would put the furthest inhabitant at less than 75 meters from the network. Universal private cormections will cost around US$114 per plot. These costs are not included in the project. - 60 - Street lighting is presently financed through a surcharge on water and electricity. Since there will be few new consumers at the beginning and their consumption low, it will be difficult to finance the whole new network from the present level of the surcharge and the municipality will have to find additional revenues to support these costs. Project Component 2 - US$6.00 million 2. Micro-Credit Component This component is financed by the Government and implemented by the CDHLCPI with support from NGOs and specialized micro-credit institutions. It will finance credit to slum dwellers for: (i) land tenure regularization or land acquisition under the program; (ii) home improvement or construction in slums upgraded under the program; (iii) creation of micro-enterprises, including for construction, services, and other income-generating activities. The Government's ongoing micro-credit programs will be scaled up, fnancial institutions strengthened, and communities supported by technical assistance to improve their technical and managerial skills in developing micro-enterprises and building houses. Credit for shelter construction and improvement, including sanitary facilities. Around 1,000 micro-credits per year are expected to be requested by poor families for land acquisition. About 1,000 micro-credits per year will be available to households with a land title. These credits will be made available for up to six years. This amount would allow a household to build one room and one subsidized latrine with a monthly repayment of about US$6.6-13.2. The required revolving funds to be provided by the Government will amount to about US$2. 11 million for the first six years. Five hundred credits per year are expected for the first years for the development of economic activities and for scaling up of pilot operations carried out by CDHLCPI. Project Component 3 - US$ 7.00 million 3. Institutional and Capacity Building Component This component will be implemented by the Project Coordinating Unit and includes three sub-components targeting: (a) urban communities; (b) municipalities; and (c) key central government administration. 3.1 Urban communities sub-component (US$2.0 million) (Consultants: US$1.60 million; Training: US$0.3 million; and Equipment: US$0.1 million) This sub-component will finance consultant services, training, and equipment to support: (a) reinforcement of the legal framework governing community organizations and fonnalization of links between local governments and community organizations; (b) capacity building in community-based organizations, through intermediaries such as NGOs and specialized financial institutions, for organization and management, self regulation and active participation in decision-making, and service delivery; (c) technical assistance to build the capacity of CDHLCPI to monitor poverty indicators; design, implement, and monitor poverty alleviation, social intermediation, and community development programs; and increase its outreach to communities outside major cities; (d) training for selected NGOs, local small entrepreneurs, and GIEs to strengthen their capacity to - 61 - support community organization, mobilization, and implementation of subprojects and activities, including land remodeling; and (e) technical assistance provided by NGOs and consultants for housing and sanitation programs in slums. 3.2 The Municipalities sub-component (US$1.2 million) (Consultants: US$0.7 million; Training: US$0.2 million; Equipment: US$0.3 million) This sub-component will finance consultants services, training, and equipment to support: (a) municipal capacity building in participatory planning, equitable and efficient delivery of urban infrastructure and services, and improved financial management performance; (b) the Association of Mayors will develop its capacity to deliver training, promote professionalism among municipal staff and elected officials, and provide technical assistance to municipalities in implementing their programs; and (c) technical assistance to the municipalities of Nouakchott and Nouadhibou to ensure adequate capacities and skills for monitoring their respective sub-components, improving financial performance and service delivery, street addressing, and pursuing the process for City Development Strategies. 3.3 Key Central Government Administration sub-component (US$3.8 million) (Consultants: US$2.4 million; Training: US$0.68 million; Equipment: US$0.68 million). This sub-component will finance consultants services, training, and equipment to support: (a) development of modem and appropriate land management tools, land information systems, including land taxation and property registration, and extension of their coverage to cities outside Nouakchott; development of a geo-referenced national land grid; simplified computerized land information system gradually developed for Nouakchott and Nouadhibou, starting with the public domain, plotting of new parcels developed or restructured and titled under the urban program; the systems will be housed at the Ministries of Equipment and Finance; consultant services, training, equipment, and software will be financed by the project. Legal reforms will be aimed at streamlining and accelerating procedures for security of tenure, clarification of responsibilities for land management and transfer procedures; training will be provided in land tenure law and procedures for legal staff (lawyers, notaries, real estate agents, and court clerks); (Consultants: US$0.44 million; Training: US$0.22 million; Equipment: US$0.36 million); (b) gradual development of a modem urban legal framework and management tools; land development and subdivision; definition and dissemination of the legal framework, provision of technical assistance to the Ministry in charge of urban planning and regulation, to insure development of adequate skills for managing the urban sector, including the development of a transport strategy and preparation of a transport sector project; (Ministry of Equipment and Transport); (Consultants: US$1.3 million; Training: US$0.20 million; Equipment: US$0.20 million); (c) the unit in charge of municipalities in the Ministry of Interior and its regional units will also be strengthened; (Consultants: US$0.56 million; Training: US$0.20 million; Equipment: US$0.15 million); and -62 - (d) the Direction de l'Environnement in urban environment management. Ministry of Rural Development and Environment. (Consultants: US$0.10 million; Training: US$0.05 million; Equipment: US$0.05 million). Project Component 4 - US$5.77 million 4. Auditing, Monitoring, and Operating Costs Component This component will finance incremental expenditures incurred for project implementation and management, contractual staff, mission travel and supervision costs, bank charges on special accounts, acquisition, operation and maintenance of vehicles, and office supplies. The managers of UDA and PCU and their financial managers will be civil servants; their salaries will not be paid through the IDA Credit. 4.1 Technical assistance to the PCU; auditing and monitoring of the whole program will be PCU's responsibility (Consultants: US$ 0.7 million). 4.2 PCU operating costs and equipment. Operating costs: US$0.4 million; equipment: US$0.1 million. 4.3 Technical assistance to the UDA: Consultant services: US$0.65 million. 4.4 UDA fees: The UDA will be paid 6 percent on disbursements made for sub-components (1.1 Nouakchott slums upgrading, 1.3 infrastructure for economic activities in Nouakchott, starting with the second year of Credit effectiveness US$1.2 million). Operating costs (US$0.12 million) in the first year will be financed by the Government. The equipment (US$0.4 million) will be financed by the Credit. 4.5 AMEXTIPE fees for implementation of secondary cities and Nouadhibou sub-components at a rate of 8 percent of amounts disbursed under the sub-components. This percentage includes all charges (US$2.12 million). 4.6 Technical assistance to AMEXTIPE (US$0.2 million) to strengthen its capacity for project inplementation. - 63 - Annex 3: Estimated Project Costs MAURITANIA: Urban Development Program FIRST PHASE OF THE PROGRAM Local Foreign Total Project Cost By Component US$ million USS million US$ million 1. Provision of basic infrastructure (including technical 13.76 53.04 66.80 studies and supervision) 1.1 Slums upgrading 3.12 10.48 13.60 1.1.1 Nouakchott (water supply and electricity not 2.62 10.48 13.10 included) (UDA) 1.1.2 Resettlement grants, compensations (El Mina) (UDA) 0.50 0.00 0.50 1.2 New serviced land (SOCOGIM) 0.22 0.88 1.10 1.3 Infrastructure for economic activities support in Nouakchott 1.40 5.60 7.00 (UDA) 1.4 Basic Infrastructure in 12 cities (including Nouadhibou) 5.29 21.16 26.45 (Amextipe) 1.5 Provision of water and electricity (SONELEC) 3.73 14.92 18.65 1.5.1 Water production forNKCslums 2.02 8.08 10.10 1.5.2 Water distribution in NKCslums 0.63 2.50 3.13 1.5.3 Electricity in NKC slums 1.08 4.34 5.42 2 Micro-Credit (CDHLCPI) 6.00 6.00 2.1 For land acquisition or regularization 1.50 1.50 2.2 For housing 2.50 2.50 2.3 For economic activities 2.00 2.00 3 Institutional and Capacity Building (PC") 7.00 7.00 3.1 To communities 2.00 2.00 3.2 To municipalities 1.20 1.20 3.3 To central government administration 3.80 3.80 4 Auditing, Monitoring, and Operating Costs 3.72 2.05 5.77 4.1 Monitoring, auditing (PCU) 0.70 0.70 4.2 Operating costs PCU including 20% equipment (PCU) 0.40 0.10 0.50 4.3 Technical Assistance (UDA) 0.65 0.65 4.4 UDA fees (6% of I. I. I and 1.3.1) and equipment (UDA) 1.20 0.40 1.60 4.5 AMEXTIPE fees (8% of sub-component 1.4) 2.12 2.12 4.6 Technical Assistance (AMEXTIPE) 0.20 0.20 PPF refinancing 1 .70 1.70 Total Baseline Cost 23.48 63.79 87.27 Contingencies 3.25 8.54 11.79 Total Project Costs 26.73 72.33 99.06 Total Financing Required 26.73 72.33 99.06 - 64 - Annex 3 (continued) .__ _ __ _ _ _ __ _ _ Local Foreign Total Project Cost By Category (Contingencies not included) US$ million US$ million US$ million Goods 0.00 1.58 1.58 Works (including technical studies and SPN) 13.26 53.04 66.30 Consultants and Training 0.00 7.47 7.47 Operating costs 3.72 3.72 Micro-credit 6.00 6.00 Resettlement grants 0.50 0.50 PPF refinancing 1.70 1.70 Contingencies 3.25 8.54 11.79 Total Project Costs 23.48 63.79 87.27 Total Financing Required 26.73 72.33 99.06 - 65 - Annex 4: Cost Benefit Analysis Summary MAURITANIA: Urban Development Program Summary of Benefits and Costs: The project is composed of several components and sub-components. The economic analysis has been done for only the first phase of the project. Not all sub-components are relevant for the economic analysis; the sub-components for the solid-waste disposal, micro-credit provision, the technical assistance component and empowerment of communities do not fit into the traditional Cost/Benefit (C/B) analysis. The New Land Development sub-component will be a pilot operation in the first phase. The subprojects to be financed under the component on extension of the priority infrastructure in the regional cities are to be decided by the city councils during the first phase of the project implementation period. These subprojects require an economic rate of return (ERR) of more than 12 percent for IDA financing and sub-components with a lower ERR are therefore excluded from the economic analysis. For the remaining sub-component, the economic analysis has been conducted for each sub-components to the extent possible, in order to determine the economic feasibility of each sub-component independently. In undertaking the economic analysis, several key assumptions were used, including: (i) a discount rate of 12 percent; (ii) a time horizon of 20 years; and (iii) elimination of direct taxes. The result shows that all of the sub-components, i.e., slum upgrading, water production and transmission, cattle market, fishery market, and roads are economically feasible. The sensitivity analysis also proves that these are feasible investments. Main Assumptions: 1. Slum Upgrading The strategy of the slum project's upgrading sub-component is to follow an integrated process of improving infrastructure in targeted areas in Nouakchott. The sub-component includes construction of paved and compacted paths, water tower and standpipes, street lighting, markets, schools, health centers, and public and private latrines in slum areas. Table 4.1 summarizes the result of C/B analysis of the slums in Nouakchott. Infrastructure investments under the project will increase the economic value of land, and that increased value will result in the market price of land in the project area. That additional value will be realized only after the whole package of infrastructure is installed and the land is ready to be sold. Land prices are assessed by using the market property value map of SOCOGIM for Nouakchott based on surveys conducted in the year 2000. Some 60 percent of the whole project area is considered for residential purposes, of which 4 percent will be for both commercial and residential purposes. The value of the latter portion of land is estimated to be higher than the remaining areas. Without the project, the value of the land is considered zero. The economic analysis was done by areas; i.e., kebbe El Mina (the closest area to the center of the city), Riyad, Dar Naim, and Teyaret Nord. Net Present Values (NPVs) for each area are as follows: kebbe El Mina UM225 million, Riyad UM1 59 million, Dar Naim UM76 million, and Teyaret Nord UM25 million. The estimated ERRs are 43 percent for the kebbe El Mina, 13 percent for Riyad, 34 percent for Dar Naim, and 30 percent for Teyaret Nord. These results justify the large economic impact of the project with - 66 - minimum investments. Apart from the quantitative benefit of the project, qualitative benefit is also foreseen after project implementation. For the slum upgrading sub-component, a general improvement of the living conditions in the project area is expected along with an increase in family incomes. The provision of land titles will give residents an assurance of continuing to live in the same place with better living conditions. Residents will also benefit from easy access to the market places located within residential areas. These market places will stimulate economic development within the area. The roads to be constructed in the project physically and economically connect and integrate the project area to the rest of the city. With the new roads, public transport services are expected to be extended to the project area. After the project, water standpipes will be located at a maximum of 120 meters from residences, and this will facilitate access to water, thus reducing their water expense. The reduction in water expenditure will likely increase the consumption of water. The provision of a sanitation system will improve the sanitary situation of both individual houses and markets and will reduce intestinal infections, such as diarrhea and dysentery. Street lighting in the project area will increase of security of the project area and enable economic activities to be extended after dark. It also provides the opportunity for children to study after dark. Both water and electricity distribution networks are designed to accommodate future upgrading for individual connections. With increase in income levels in the project area, residents will have an easy access to utility services. Residents in the project area will also get easy access to health and education facilities, which will be constructed in the project area. 2. Infrastructure for economic activities Cattle Market: It is expected that the cattle market will be operated by a private operator and the concession fee paid by the private operator will be a benefit of the project. One concession contract between the city of Nouakchott and the private operator is foreseen and the private operator will manage the entire facility under that contract. The estimated concession fee to be paid by the private concessionaire to the city is estimated at UM2.5 million per month. The "F6ddration Mauritanienne pour la promotion de la vente du betail" made a first proposal of UM2 million per month. It will be necessary to increase the monthly concession payment by UMO.5 million. It is also envisaged that the monthly concession payment starts in the second year, when the construction is undertaken, and that the residual value of UM120 million will be available in 20th year. The NPV is UM13.39 million and ERR is 13 percent. Current cattle markets are located in the middle of slums, and trucks carrying the animals go through a path within the slums in order to reach the market. The construction of a new market at the entrance of the city of Nouakchott will prevent such flow of trucks into residential areas. It will also improve sanitation and the environment surrounding the market, as slaughtering which is currently done around the market place, will be done in the slaughter house already constructed, close to the new market. Fish Market: Like the cattle market, the project envisages the operation of the fish market by a private operator. The concession fee paid by the private operator will be a benefit. As there is no manifestation of interest from a single private operator yet, the total sum of contributions from individual factory owners is considered as the concession fee to be paid by the private operator. There are currently 14 factories for fish processing. The sub-component of the project requires the contribution of UM65,000 per week per fish factory owner in order to get 13 percent of internal rate of return. If 50 percent of the initial investment is financed by the Government, the amount of the contribution from the fish factory owner will be reduced to UM35,000 per week. - 67 - The NPV is UM14.96 million and ERR is 13 percent if there is no participation of the Government in the initial investment. The NPV is UM14.52 million and ERR is 14 percent if the Government contributes 50 percent of the initial investment. Fish factories discharging wastes are the ones that export the fresh fish. The improvement of the sanitary facility under the project will greatly improve hygienic conditions of the fish factories and their surroundings, thus improving the commercial value of fish to be exported. The project is expected to increase fish export sales by strengthening the competitiveness of fish factories. Roads: The objective of constructing the roads is to connect areas that are not directly accessible. Benefits derived from the construction of these roads will be the increased land value of the areas near the roads. Since the areas where these roads are to be constructed are not populated and are located at the outer limits of the city, such increase in land value is estimated as minimum, based on the market property value map of SOCOGIM. In the calculations, three areas will be affected; first, for the area facing the main road, the length of the road and 50 meters of width on each side of the road; second, further 25 meters after the first 50 meters; and third, the band of 75 meters on each side of the entire length of the road for the areas facing the compacted roads connecting to the main road. The NPV is UM61.84 million for the all the sections of the roads and ERR is 32 percent. The roads to be constructed will connect parts of the missing outer circumferencial link around Nouakchott. It will not only connect different residential areas, which are not directly accessible, but will also divert traffic flow, which now goes through the jammed city center. The traffic flow in the city center will be improved, and the areas surrounding the roads will be developed as new residential areas. 3. Water Supply The project will finance construction of: (i) additional wells; (ii) transmission networks to each slum; and (iii) distribution networks within the slums, including water tanks and standpipes. All of these are planned to provide water exclusively for the slumn areas, and therefore are assumed to be independent from the existing network. The benefit of the distribution sub-component will be reflected in increased land value, as noted above for roads. The current analysis is therefore only concemed with the first two sub-components. SONELEC is responsible for the implementation of this component It is assumed that SONELEC will sell water to private standpipe operators at the current water tariff for standpipes, and the private standpipe operators will then sell directly to the consumers. It is also assumed that water consumption will increase from 15 liters to 25 liters per day per person in the first phase, and then to 30 liters in the second phase. The population already living in the slum area will benefit from the increased water consumption, and those who will migrate to the vacant lots in Riyad, Dar Naim, and Teyaret Nord will create an additional per capita demand of 25 liters per day (and subsequently up to 30 liters per day). Operation and maintenance costs of the new facilities are estimated at 10 percent. The estimated NPV for the water supply component is UM643.29 million. The ERR is 16 percent. Sensitivity analysis / Switching values of critical items: The sensitivity analysis was done with the following cases for each of the sub-components. The assumptions are: (i) a two-year delay in project implementation; (ii) lower value of the benefits by 10 - 68 - percent; and (iii) 10 percent increase in costs. For slum upgrading, the sensitivity analysis is done not for individual areas but for all areas as a whole. The result suggests that the project is viable under any of the above assumptions. (Table 4.4) For all infrastructure for economic activities-- cattle and fish markets and roads, the results of the sensitivity analysis suggest that all these sub-projects are economically feasible. (Tables 4.5 to 4.7) For water supply, the result suggests that this sub-project is also economically feasible. (Table 4.8) Financial Analysis 1. Cost recovery by the city of Nouakchott The infrastructure to be constructed under the project, except the water supply and transmission sub-component, is considered a public good, so that the local government, in this case the city of Nouakchott, must bear the costs of investment as well as for operation and maintenance from its budget. The project envisages recovery of both investment and operation and maintenance costs through two kinds of tax revenues, property rights levy and housing tax. The current analysis examines the possibility of recovering the costs through these taxes. A property rights levy is imposed on all constructed properties, except public buildings. There are three tax rates, varying from 3 percent to 10 percent according to the actual use of the buildings and houses. These are local taxes to be collected by the State for the communities. Housing tax covers the same tax base, but is collected by the communities. It covers all buildings used for residential purposes. The tax rate is decided annually by the city council, and that for the year 1999 was used for the estimation. The collection of the property rights levy and housing tax varies from year to year. Between 1996 and 1999, revenue from property rights levy increased from UM47.8 million to UM1 13.3 million, whereas the housing tax increased from UMO.29 million in 1996 to UM4.6 million in 1998 and decreased to UMI.2 million in 1999. There is no complete list of taxpayers for either the property rights levy or the housing tax. The audit report for the city of Nouakchott suggests that the taxpayers' list used in the revenue estimation is established only for budgetary purposes and does not reflect the reality, thus the tax recovery rates described in the audit report does not reflect the real recovery rate. Given the lack of a complete taxpayers' list and very weak tax collecting capacity, the revenues collected are not substantial. The city of Nouakchott has serious concems about the low collection of taxes, and started efforts to do street addressing and a fiscal census in December 2000. So far, those efforts have been completed only in the wealthiest area of the city, Tevragh Zeina. Given the absence of the number of taxpayers as well as the value of each real property subject to taxation, the Fiscal Department of the city of Nouakchott established hypothetical property and rent values and their corresponding tax amounts, and applied them for their tax collection purposes after the fiscal census. These tax amounts have been used to estimate tax revenue from both the property rights levy and housing tax, and the number of households was calculated from the total population of the city, which is expected to increase 4 percent each year. The tax revenue from the comnmercial and professional entities are excluded, as there is no way to estimate them. The estimation of the revenue is, therefore, only indicative. As the current tax collection capacity is low, it is expected that this capacity will be strengthened through technical assistance under the project. For the property rights levy, it is assumed that the current level of tax collection will be maintained until the third year of project implementation, when the effect of the - 69 - technical assistance is expected to appear. The current revenue for the housing tax is almost zero, so it is assumed that this revenue will only increase through the technical assistance provided under the project. The city of Nouakchott must assure its expenditure for operation and maintenance costs of schools, health centers, roads, and street lighting to be constructed by the project. The operation and maintenance costs of the facilities to be constructed are estimated under the following assumptions: 3 percent of the accumulated investment cost of roads, 4 percent for water supply, electricity, markets, and sanitation facilities, and 2 percent for schools and health centers. The tariff for street lighting is calculated by using the social tariff of SONELEC. These costs will be UM207.86 million per year. Both standpipes and markets to be constructed within the upgraded areas will be operated by the private concessionaire, and their operation and maintenance costs will not be an additional fiscal burden on the city. The NPV of the cash flow after balancing the expected revenues and both investment and operations and maintenance costs gives a positive value of UM69.86 million. This means that, if the estimated amount of revenue is actually collected, cost recovery of the project can be attained in the project life of 20 years. It must be remembered that expected revenue calculated here covers only the residences. It does not include revenue from commercial and professional entities. Revenue from these entities will also increase as capacity to collect tax builds up and bring much greater revenue to the city of Nouakchott. At the same time, the improved tax collecting capacity will also increase revenue from other taxes, such as the comrmunity tax and weight tax. These revenues will permit the city to provide other services. 2. Operation and maintenance for the infrastructure for economic activities Private operators will assure the operations of cattle and fishery markets by collecting taxes and user fees from those who will benefit from the new markets. It is expected that the private operators will run the markets in an efficient manner based on commercial practices. 3. Impact of the project on water and energy tariffs The water and energy sub-components of the project will be executed by SONELEC. The Government of Mauritania will onlend a part of the IDA credit to SONELEC for implementation of these sub-components. It is assumed that the onlending will be on IDA terms (20 years for repayment including 5 years of grace) for the water production and transmission sub-component and 50 percent of the investment cost for street lighting. The investment costs for the water distribution network within the slum areas and the remaining 50 percent of the investment costs for street lighting will be provided as a grant. The estimated servicing date is 2004. The effects of the investments are measured by using the financial projection model used by SONELEC. This model calculates only the impact of the investrnent until year 2010. Overall investments for SONELEC will require an increase of its tariff by 5 percent in 2010. Table 4.1: Nouakchott Slum Upgrading: Result of Economic Evaluation (in million UM except ERR) El Mina Riyad Dar Naim Teyaret Nord Benefit 1,565 1,137 934 344 Cost 1,161 747 669 220 NPV 225 159 76 25 ERR 43% 32% 34% 30% - 70 - Table 4.2: Nouakchott hIfrastructure for Economic Activities: Results of Economic Evaluation (in million UM except ERR) Cattle Market Fish Market Roads Benefit 231.42 322.29 531.30 Cost 193.24 167.91 405.12 NPV 13.39 14.96 61.84 ERR 13% 13% 32% Table 4.3: Nouakchott Water Supply for the slums: Results of Economic Evaluation (in million UM except ERR) Water Supply Benefit 2,063.58 Cost 1,754.28 NPV 643.29 ERR 16% Table 4.4: Nouakchott Slum Upgrading: Result of Sensitivity Analysis (in million UM except ERR) 2-year delay 10% decrease in 10% increase in all benefits costs NPV 394.95 166.16 215.70 ERR 36% 20% 22% Table 4.5: Nouakchott Infrastructure for Economic Activities: Result of Sensitivity Analysis (Cattle market) (in million UM except ERR) 2-year delay 10% decrease in 10% increase in all benefits costs NPV -2.54 -6.03 14.63 ERR 12% 11% 13% - 71 - Table 4.6: Nouakchott Infrastructure for Economic Activities: Result of Sensitivity Analysis (Fish market) (in million UM except ERR) 2-year delay 10% decrease in 10% increase in all benefits costs NPV 3.64 -3.32 -1.83 ERR 12% 12% 12% Table 4.7: Nouakchott Infrastructure for Economic Activities: Result of Sensitivity Analysis (Roads) (in million UM except ERR) 2-year delay 10% decrease in 10% increase in all benefits costs NPV 49.30 19.49 25.67 ERR 32% 18% 19% Table 4.8: Nouakchott Water Supply for the Slum: Result of Sensitivity Analysis (in million UM except ERR) 2-year delay 10% decrease in 10% increase in all benefits costs NPV 381.31 269.84 334.17 ERR 15% 14% 14% Table 4.9: Tax Revenue and Investment Costs ___________ 11 2 3 4 3 6 71 A1 9 10 III 12 131 141 15 16 171 i8 Wi1 28 _______ 0.55 0.35 0.6 0.65 0.70 0.75 0.00 0.855 .0 0.85 0.s O85 0.55 0.05 0.05 0.55 0.855 0.85 0.50 0.855 0.05 f,d.r 208.94 222.99 237.61 252.81 268.62 255.07 302.17 319.95 338.45 357.69 377.69 39S.50 420.14 442.64 466.04 490.38 515.70 542.02 369.40 597.08 E.p.o.td 114.92 122.65 14257 16433 108.04 213.8 241.73 271.96 287A 304.53 321D.4 338.72 3M7.2 376.24 35614 416.83 430.34 487.02 453.99 500.19 _____________ 0.16 0.32 0.40 0.64 0.500 0 0.5 0.8 5 0.85 0 .07 0.0.85 0.87 0.385 0.90 0.85 0.03 d4h84tbitt 289.78 309.29 329.35 350.64 372.57 39537 41909 443.76 469.41 496.09 523.84 552.69 582.71 613.92 646.30 680.14 715.24 751.76 789.73 829.22 ELpo -d 52.73 11220 170.83 253.04 335.27 377.19 39.00 421.0 445.26 469.79 49530 52183 54942 57.11 607.6M 676.58 671.27 704.04 ToSolE,,c6 114.52 122.65 1*5529 216.03 366.57 466.04 577.01 649.15 6S6.60 7705.1 766636 8S00 SS2.41 090.07 94556 0494 1104630 13164.401 ,155.26 1,113.53 rot.l] 81lt 370.18 696.4 993506 113810 034.27 207. J' 267.86 207.861 207.862 207.61 207.06 207.66 207.866 20786 207.6 C..b lo 126316) 573.83 (79.21) (861.67) (467A4 250.50 369.15 44118 470.82 517.51 550A. 6006 644.5 699.213 707.00 s3s44 906.4 947.401 00517 NPV. 169.S6 - 72 - Table 4.10: Financial Projections - SONELEC (Water) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 D 6bits __ _ _ _ _ _ _ _ _ _ _ _ _ _ ___ _ _ __ _ _ Achat de mat. consom. Approv. 252 361 366 503 532 564 598 635 674 716 Consom. lntemes des install. 176 181 185 190 195 200 206 211 217 224 SONELEC _ _ Charges extemes liees a 81 131 137 200 216 234 252 2721 293 315 I'investissement Charges extemes li6es a 108 114 115 138 139 141 143 144 146 155 I'activite 6 Total consommations 616 787 803 1,030 1,083 1,139 1,199 1,262 1,330 1,410 intermediaires Charges et pertesdiverses 53 56 56 66 66 66 66 66 66 70 Charges de personnel 373 383 408 438 466 490 524 541 582 593 Imp6ts et taxes 80 80 80 80 80 80 80 80 80 80 Charges fmancieres 100 97 94 90 81 73 64 57 49 41 Gain/perte de change 37 39 42 44 47 50 52 55 58 61 Dotation aux amortissernents 709 777 1,054 1,096 1,065 824 872 922 975 1,031 Dotation aux Provisions 121 128 128 152 152 152 152 153 153 161 Total autres debits 1,473 1,559 1862 1,966 1,957 1,735 _ 1,874 1 963 2,036 Total des debits 2,089 2,347 2,666 2,996 3,040 2,874 3,010 3,136 3,293 3,447 Credits I _I________. - Ventes 2,426 2,550 2,55 3,041 3,043 3,046 3,049 3,052 3,055 3,218 Produit des activites annexes 5 5 5 6 6 6 6 6 6 6 Production vendue 2,431 2,555 2,558 3,047 3 3050 5 3.055 3,05 3,061 3,224 Production stock6e 90 94 94 113 113 113 113 113 113 119 Production d'imtnobilisation 24 26 26 30 30 30 30 31 31 32 Ventes interne 146 146 146l 146 146 146 147 147 147 152 Total production 2,691 2,821 2,824 3,336 3,339 3,342 3,345 3,348 3,352 3,528 Subventions r6int6grdes 129 130 131 132 134 135 131 107 109 111 Subvention dexploitation - - - - - - - - - _ _ _ Austres produits 9_____ __ _ ____ I__I__II_I__I Total autres credits 138 137 142 143 143 145 142 1181 120 122 Total des Credits 2,829 2,958 2,965 3,479 3,4 3,487 3,487 3.466 3,472 3649 Total Debits et Credits 739 612 300 482 442 6131 477 330 179 203 IMF 24 26 26 30 30 31 31 31 31 32 BIC 296 245 120 193 177 245 191 132 72 81 R6sultat net 419 341 154 259 235 338 256 167 77 90 Irnmobilisations nettes 7,367 11,088 11,250 11,389 10,758 9,997 9,577 9,130 8,653 Taux de rentabilit rel 7% 4% 1 % 2% 2% 3% 3% 2% 1% 1% Taux d'augmentation des I I I I 1 I 1 I 1 1.05 tarifs de l'eau - 73 - Table 4.11: Financial Projections - SONELEC (Electricity) _________________________ 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 D6bits . = ______ Achat de mat. consom. Approv. 4,384 3,410 3,988 4,639 5,154 6,093 6,876 7,646 8,288 8,984 Achat d'6nergie - 995 1,048 1,107 1,162 1,220 1,281 1,345 1,413 1,483 Consom. Internes des install. 188 189 190 191 192 193 194 195 196 196 SONELEC Charges externes liees a 221 44 73 102 131 163 198 237 278 324 l'investissement Charges extemes liees 6 334 372 413 481 530 580 631 686 743 830 I'activite Total consommatbons 5,128 5,009 5,712 6,519 7,169 8,250 9,180 10,108 10,917 11,817 interm6diaires Charges et pertes diverses 81 198 215 246 266 287 307 329 351 386 Charges de personnel 760 806 854 906 960 1,018 1,079 1,143 1,212 1,285 Imp6t et taxes 300 300 300 300 300 300 300 300 300 300 Charges financieres 241 263 258 248 238 228 218 207 195 182 Gain/perte de change - - - -_ - - - - - - Dotation aux amortissements 1,059 1,143 1,278 1,429 1,526 1,124 1,223 1,335 1,454 1,578 Dotation aux Provisions 357 390 426 486 527 568 609 652 696 768 Total autres d6bits 2,799 3,100 3,332 3,614 3,817 3,525 3,735 3,966 4,207 4,496 Total des d6bits 7,927 8,109 9,044 10,133 10,986 11,775 12915 14,074 15,124 16,313 CrTdits _ _ _ _ Ventes 7,148 7,807 8,511 9,720 10,539 11,360 12,172 13,038 13,916 15,311 Produit des activit6s annexes 11 15 19 19 20 20 20 21 21 22 Production vendue 7,160 7,822 8,530 9,739 10,559 11,380 12,193 13,058 13,937 15,332 _____ Production stock6e 143 156 170 194 211 227 243 261 278 306 | Production d'immobilisation 207 226 247 282 306 329 353 378 404 444 _ Ventes interne 375 385 396 408 420 432 445 458 472 486 Total production 7,885 8,590 9,343 10,623 11,495 12,369 13,234 14,155 15,091 16,569 Subventions r6int6gr6es 90 94 99 103 107 112 107 58 63 66 Subvention dexploitation _ ___r_ _ | Autres produits 73 95 141 111 106 127 123 118 128 128 Total autres cr6dits 163 189 240 214 214 239 230 177 189 194 Total des Cr6dits 8,048 8,779 9,583 10,837 11,709 13,464 14,332 15,280 16,763 12608 _ _ Total D6bits et Cr6dits 671 539 704 723 833 549 258 156 450 IMF 72 78 85 97 106 114 122 131 139 153 BIC 48 268 216 282 289 333 220 103 62 180 R6sultat net 50 592 454 606 617 7191 427 12 17 296 Immobilisations nettes 7,992 8,362 8,216 7,792 7,238 7,135 6,984 6,774 6,503 6,166 Taux de rentabilit4ir6el 1% 7% 5% 8% 8% 10% 6% 2% 0%o 5% Taux d'augmentation des tarifs 1 1 1 1 1 1 1 1 1 1.05 de l'eau - 74 - Annex 5: Financial Summary MAURITANIA: Urban Development Program Itmplementation Period (Amount in US$ million) Phase I Phase 1I Required Financing Year 1I Year 2 Year 3 Year 4 Year 5 Total (years 6 to 10) Project Cost 1 Physical Investment Cost 8.57 17.22 22.89 17.551 16.54 82.76 85.56 Engineering and services 1.511 3.04 4.04 3.101 2.92 14.60 8.05 Toata 10.09J 20.26- 26.93- 20.641 19.45- 97.36r 93.61 :Financing__ _ _ __ _ _ _ __ _ _ _ _ _ _ ___ _ _ _ _ IDA 7.25 14.57 19.361 14.84~ 13.99 70.00r 64.001 Government 2.08 4.17 5.55 4.25 5.37 20.06) n/al Pa,r'al-leI'' Fin'an'cin'g 0".'9'3- 1".-8-7 24"91 1',-.,911 1--.-8,0 "9'.00-o n/"jal Total 10.26 20.61 27.40] 21.00 [ 21.15 99.061 93.61] n/a = not available - 75 - Annex 6: Procurement and Disbursement Arrangements MAURITANIA: Urban Development Program Procurement General 1. The Mauritanian procurement code was prepared in 1993 and will be revised under an Institutional Development Fund (IDF) Grant of 1998-2001 to help finance the public procurement reform on the basis of the recommendations of the Country Procurement Assessment Report (CPAR), which was carried out in February 1999. In the event that national procurement laws and procedures would be in conflict with IDA Guidelines for procurement, the Mauritanian procurement code permits IDA procedures to take precedence over national law. Guidelines 2. Procurement of goods and works will be carried out in accordance with the Guidelines for procurement under IBRD loans and IDA credits (published in 1995 and updated in January and August 1996, September 1997, and January 1999. The Bank's standard bidding documents for goods and civil works will be used for ICB. National procedures and bidding documents, which will be used for NCB (acceptable to IDA) will ensure that: (i) bids will be advertised in national newspapers with wide circulation; (ii) the bid document will clearly explain bid evaluation and award criteria; (iii) bidders are given adequate response time to prepare and submit bids; (iv) bids will be awarded to the lowest evaluated bidder, and not arbitrarily; (v) eligible bidders, including foreign bidders, will not be precluded from participating; and (vi) no domestic preference margins are applicable to domestic manufacturers or suppliers. Consultant services contracts, financed by IDA, will be procured in accordance with the Guidelines for the Selection of Consultants by World Bank Borrowers (published in January 1997 and updated in September 1997 and January 1999). The Bank's standard Request for Proposals will be used and forms of contracts as needed as well as the Sample Form of Evaluation Report for Selection of Consultants. 3. AMEXTIPE and UDA will use standard AGETIP bidding documents for goods and civil works approved recently by IDA (February 2001) for NCB. Consultant services will be procured in accordance with the Guidelines for the Selection of Consultants by World Bank Borrowers (published in January 1997 and updated in September 1997 and January 1999). Procurement Notices 4. A General Procurement Notice (GPN) with pertinent information on estimated contract opportunities, scheduled during the next twelve months, will be published in the UN Development Business (UNDB). The GPN will be updated annually for ICB contracts, if any. Specific Procurement Notices (SPN) will be required for goods and works contracts. For ICB contracts, if any, the SPN will also be advertised in the UNDB. For NCB, SPNs will be advertised in a national paper of wide circulation. Individual contracts for consulting firms are estimated below US$200,000, and consequently, the request for expression of interest will be published only in a national paper of wide circulation. However, if foreign firms express interest, they will not be excluded from consideration. - 76 - Procurement Capacity Assessment 5. A procurement capacity assessment of existing implementing agencies (AMEXTIPE, SOCOGIM, and SONELEC) was carried out during appraisal. AMEXTIPE has good experience in IDA procurement procedures but shows weaknesses, because there are several new staff members, who need to improve their procurement proficiency. AMEXTIPE must present a training plan for its personnel involved in the procurement system before Credit effectiveness date and this plan will be carried out in the first six months after Credit effectiveness. This training will relate to IDA procedures and the new AMEXTIPE Manual of Procedures approved by IDA in February 2001. 6. As a mixed economy enterprise with State majority holding (more than 80 percent), SOCOGIM is independent of public procurement structures because it has its own commissions, but it will use public procedure rules. SOCOGIM has experience in management of works contracts financed by the Government and other donors, but not by IDA. The evaluation of SOCOGIM's capacity shows weaknesses of: (i) staff capacity of "Direction des Etudes et Marches" (DEM), which is in charge of the preparation of bidding documents and management of contracts, and (ii) the work means and space. The procurement capacity of SOCOGIM staff will be reinforced through: (i) training of senior staff at IDA-sponsored procurement courses in Dakar; and (ii) close procurement supervision and guidance provided by the Country Office during the first phase. It is necessary also to reinforce the work means, that is, data processing, reproduction, arrangement, and conservation of the files. SOCOGIM will allow DEM more space. 7. SONELEC is a public company govemed by a program agreement, which gives it broad autonomy. In particular, it enables itself to have its own procurement commissions, but procurement rules are those of the public procurement code. These commissions are supported by an operational unit. SONELEC (through its commissions) has good experience in management contracts of water and electricity supply, including on IDA financing (IDA Credit 2389 - Water Supply which closed on 2/28/98). The procurement capacity of staff will be reinforced through: (i) training of senior staff at IDA-sponsored procurement courses in Dakar; and (ii) close procurement supervision and guidance provided by the Country Office during the first year of the project. This unit must be equipped with equipment for data processing, reproduction, arrangement, and conservation of the files. Al] this requires that SONELEC assigns adequate space to the unit. 8. Given that UDA and PCU are yet to be created, a procurement capacity assessment of these agencies will be carried out six months after start-up of operations to measure performance and needed steps will be taken to strengthen their procurement capacity. 9. To ensure that the new urban agency, UDA, will have the necessary procurement proficiency, the following measures will be taken: (i) a qualified management team, acceptable to IDA, will be recruited with good experience in management of similar projects; (ii) UDA will use AMEXTIPE's Manual of Procedures and standard bidding and evaluation documents for goods and civil works procured under NCB; and (iii) a training program for senior UDA staff in IDA procurement procedures will start as of its creation. 10. When established, the PCU, will apply the revised national public procurement code and the procurement implementation manual. It will be supported by a procurement specialist recruited in accordance with IDA procurement procedures and terms of reference approved by IDA. The PCU will prepare bidding documents but will not award contracts. It will work closely with the Central Tender Board (CCM) and the Departmental Tender Board (CDM). - 77 - 11. CCM's staff has experience and has received training in IDA procurement procedures. On the other hand, CDM of the Ministry for Economic Affairs and Development (MAED) does not have permanent personnel qualified in procurement or Bank procedures and is not equipped. Reinforcement of its capacity in terms of training and equipment is therefore required. This support must consist of a permanent staff to work exclusively on the preparation and the follow-up of all procurement-related matters. Procurement Plan 12. The borrower will submit a detailed procurement plan for the first year, which includes relevant information on civil works and goods. The procurement plan was discussed and finalized during negotiations and will be updated at least once a year. The Government provided assurances that it will take the necessary measures to ensure that procurement phases do not exceed the following target time periods: Procurement phases Maximum number of weeks Preparation of bidding documents 3 (6 for large contracts) Preparation of bids by bidders 4 (6 - for ICB, and 12 weeks for large works contracts) Bid Evaluation, award and signature 8 The progress report forwarded to IDA will provide appropriate details on procurement progress. Procurement Implementation Arrangements 13. The implementing agencies will be: (i) the PCU, supported by consultants as necessary, for coordination, monitoring, and auditing; (ii) UDA, for the sub-projects of the city of Nouakchott; (iii) AMEXTIPE, for the secondary city sub-components (included Nouadhibou); (iv) SOCOGIM, for the land development sub-component; and (v) SONELEC, for water and electricity provision. 14. All implementing agencies have their own procurement commissions, except PCU, which must work closely with CDM and CCM. For procurement initiated by the PCU, the CCM will be responsible for the procurement process of all contracts exceeding US$40,000 (UM 10 million) and the CDM, for contracts costing less than US$40,000 but exceeding US$4,000. Contracts exceeding US$20,000 must be approved by the Prime Minister, in accordance with national procurement procedures. These thresholds will be raised through the revised code and the maximum delay allowed to visas will be reduced also. The PCU procurement specialist (under the responsibility of the PCU manager) will prepare bidding documents and will manage contracts. 15. The PCU will also follow up and monitor the procurement process carried out by the other agencies through the procurement plans. - 78 - 16. For the other agencies, the procurement process (preparation of bidding documents, bid evaluation and award, contract management) will be carried out by the agencies themselves and their procurement commissions, directly with IDA. The PCU will monitor the procurement program. The following flow chart shows the flow of procurement action. CCM CDM (MAED) Contracts US$ 40,000 US$ 4,00 300 ICB All <300 NCB First 5 contracts 2. Goods >100 ICB All <100 NCB First 5 contracts <30 Shopping None <100 IAPSO None 3. Services Firms Audit LCS All Engineering designs! LCS >100 work supervision QCBS/QBS >100 Other >50 SSS All Individual consultant IC >20 4. Operating Costs 0 (PCU) . 5. UDA Fees 0 6. AMEXTIPE Fees 0 Total value of contracts subject to prior review: US$40.20 million Overall Procurement Risk Assessment Average Frequency of procurement supervision missions proposed: One every six months (includes special procurement supervision for post-review/audits) Thresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement Documentation" and contact the Regional Procurement Adviser for guidance. - 83 - Disbursement Allocation of crediVgrant proceeds (Table C) 1. The first phase of the Credit would be disbursed over a period of five years, taking into account that the credit closing date will be six months after the project completion date. As long as disbursements are made under traditional disbursement procedures [as opposed to the Project Management Report (PMR) based disbursements], they will be fully documented at the time of submission of withdrawal applications, except for expenditures made against SOEs. A disbursement schedule appears in Table C. 2. The IDA Credit would be disbursed against the following categories: Table C: Allocation of IDA Credit Proceeds *E4 iture Cagry A0mouv in UtSS*0;; F i ern 1. Civil Works 47.94 85% L.a Slums upgrading (Nouakchott) 11.14 I.b New serviced land (Nouakchott) 0.94 1.c Infrastructure for economic activities 5.95 (Nouakchott)__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ L .d Infrastructure in 12 cities 14.06 L.e Provision of water and electricity to 15.85 Nouakchott slums _ 2. Goods 1.58 100% of foreign expenditures l ~~~~~~~~~~~~~~~~85% of local expenditures 2.a PCU 1.18 2.b UDA 0.40 _ 3. Consultants and training 7.47 100% 3.a PCU 6.62 3.b UDA 0.65 3.c. Technical Assistance (AMEXTIPE) 0.20 4. Operating Costs 2.72 85% 4.a PCU 0.34 4.b UDA fees 1.02 4.c Amextipe fees 1.80 5. Refinancing PPF 1.70 X 6. Unallocated 8.12 _ _ Total Project Costs 69.97 3. The term "Operating Costs" means: (i) for the purpose of Category 4 (a): the incremental expenses incurred on account of project implementation, audits, management and monitoring, including office supplies, administrative support, commnunication, utility services, travel and supervision costs, but excluding salaries of officials of the - 84 - Borrower's civil service; and (ii) for the purposes of Category 4 (b) and (c): the fees for UDA and AMEXTIPE. UIDA fees are 5 percent of 100 percent of Credit amounts disbursed under categories I (a), I (c), 2 (b) and 3 (b). AMEXTIPE fees are 8 percent of 100 percent of Credit amounts disbursed under category I (d). Special account: 4. Under traditional Procedures: In order to facilitate project implementation, the Government will open in a local commercial bank one principal special account "PSA" (in PCU) and four sub-accounts (one for each implementing agency). Only the principal special account will receive money from IDA and the sub-accounts will receive money from the principal special account. The authorized allocations will be, respectively, principal special account: US$4.0 million and sub-account for UDA: US$1,200,000; sub-account for SOCOGIM: US$100,000; sub-account for SONELEC: US$1,000,000 and sub-account for AMEXTIPE: US$700,000. The authorized allocation will cover four months' eligible expenditures. Upon effectiveness, an amount representing 50 percent of the authorized allocations will be deposited in the special account. Replenishment applications will be submitted at least monthly by the agencies. 5. Under Project Management Report (PMR) Disbursements. Upon receipt of each application for withdrawal of the amount of the credit, the Association shall, on behalf of the Borrower, withdraw from the credit account and deposit into the Special Account an arnount equal to the lesser of: (a) the arnount so requested; and (b) the amount which the Association has determined, based on the PMR accompanying said application, is required to be deposited in order to finance eligible expenditures during the six-month period following the date of such report; provided, however, that the amount so deposited, when added to the amount indicated by said PMR to be remaining in the Special Account, shall not exceed the equivalent of US$6.0 million. Counterpart Funds and Project Accounts 6. The Borrower will open in a local commercial bank a Project Account in which it will deposit an initial amount of UM 125 million to finance its contributions to the expenditures required under parts to be implemented by the PCU, UDA, and AMEXTIPE. It will thereafter, during each following quarter, deposit into the Project Account the amount required to cover the Borrower's counterpart contribution for each such following quarter, as determined by the Borrower and the Association; and ensure that the funds deposited into the Project Accounts will be used exclusively to finance expenditures under the project other than those financed from the proceeds of the Credit. The Borrower will open two sub-accounts to the Project Account, in a commercial bank, under terms and conditions satisfactory to the Association, one in the name of UDA (UDA Project Sub-Account) and the other in the name of AMEXTIPE (AMEXTIPE Project Sub-Account). It will deposit (i) an initial amnount of UM 50 million in the UDA Project Sub-Account to finance part of the Borrower's contribution to expenditures required for parts of the project implemented by UDA; and (ii) an initial amount of UM 50 million in the AMEXTIPE Project Sub-Account to finance the Borrower's contribution to expenditures required for parts of the project implemented by AMEXTIPE. The Borrower will thereafter during each following quarter deposit into the UDA Project Sub-Account and AMEXTIPE Project Sub-Account, respectively, the amount required to cover the Borrower's counterpart contribution for each of the such following quarter, as determined by the Borrower and the Association. The Project Account and Project Sub-Accounts will be operated under terms and conditions satisfactory to IDA. -85- Use of Statements of Expenditures (SOEs) 7. All replenishment requests will be fully documented except for: (a) contracts of less than US$300,000 equivalent for civil works, US$150,000 equivalent for goods, US$100,000 equivalent for consulting firm services, and US$50,000 equivalent for individual consulting services; and (b) operating costs which may be claimed on the basis of SOEs. All supporting documentation for SOEs would be retained by implementing agencies for periodic review by IDA supervision missions and extemal auditors. Financial Management Accounting and Auditing 8. The PCU will be an entity distinct from the coordinating Ministry to assure a close and independent control over sub-components. The PCU will include a small finance unit with an accountant and will be supported by a local accounting firm. The establishment of a good financial management system acceptable to IDA and the recruitment of a qualified accountant is a condition for Credit effectiveness. The PCU will manage the principal special accounts. A firm will be recruited to assist the Borrower in setting up a reliable and efficient financial management system in the PCU, as well as in 1JDA. Its mission comprises: (i) preparing administrative, budgetary, accounting, and financial procedures; (ii) assisting the Borrower in choosing and installing the software; and (iii) supporting the PCU (and UDA) in financial and accounting management during the first year of the project. A detailed financial and accounting procedures manual with an internal financial control, including an appropriate accounting plan, will be completed before Credit effectiveness. 9. Similarly, UDA will have a financial and accounting unit and will be supported by a local accounting firm during the first year. The establishment of a goodfinancial management system and the recruitment of qualified financial and accounting staff is a condition for Credit effectiveness. Accounts will be maintained in accordance with sound and internationally recognized accounting principles and practices satisfactory to IDA. 10. SOCOGIM does not yet have a satisfactory financial management system, the ongoing audit will determine the actions necessary for improving the system. However, these actions need to be taken care of before Credit effectiveness. 11. AMEXTIPE and SONELEC have a satisfactory financial and accounting unit. However, they will be strengthened during the project with better performing computer equipment, revising their procedures manual, and refresher training. They will have their own Special and Project Accounts. 12. Financial reports produced by each implementing agency's accounting system would include: (a) financial statements expressed in Ouguiyas (drawn up in accordance with generally accepted Mauritanian accounting practices); (b) financial statements for the project in US dollars, and in Special Drawing Rights; (c) reports on the Special Accounts; and (d) statements of expenditures. Reports will be produced in accordance with accounting principles acceptable to IDA (Intemational Accounting Norms are acceptable to IDA). Financial statements would be produced each year with the exception of AMEXTIPE and UDA, which would prepare their statements biannually. Project financial statements would be prepared every six months. The PCU will consolidate the financial reports with its own financial statements reflecting the financial performance and position of the project, by each beneficiary and as a whole. - 86 - 13. An independent auditor's opinion and report satisfactory to IDA, on statements and reports will be provided within three months of the biannual report, and within six months of the close of the fiscal year for the annual reports. Special Accounts, Project Accounts, and SOEs will be included in the audits and specifically addressed in the audit reports. The auditor's report will also include a statement on the adequacy of the accounting systems and internal controls, the reliability of SOEs as a basis for Credit disbursements, and compliance with financial covenants. The foregoing accounting, financial reporting, and auditing arrangements should provide adequate and timely information to IDA for project supervision. The audits will be submitted to the PCU, donors and IDA. Auditors acceptable to IDA, with TORs acceptable to IDA and in accordance with the Bank document "General Accounting Manual - Financial Information and Audits - FARAIH' dated January 1995, will be appointed prior to Credit effectiveness. Project accounts for the PCU, UDA, AMEXTIPE and SOCOGIM would be audited by the same auditor. Monitoring and Reporting 14. The World Bank is introducing an initiative to change loan administration in the World Bank Group-financed projects, the Financial Management Initiative (FMI). This initiative assists projects to put in place sound financial management, procurement, and output monitoring systems. Where appropriate and if these systems are in place, disbursements may be made on the basis of agreed quarterly PMRs rather than on the basis of individual invoices or SOEs. 15. During Phase 1, the project will not be considered as being in full compliance with the FMI for purposes of disbursements. The following action plan has been established in order to make the project ready for FMI within 18 months of Credit effectiveness. 16. The establishment of the Project financial management system "PFMS" (Administrative, Accounting and Financial Manual of Procedures, recruitment of key accounting staff, initial training, and system test) will be a condition of Credit effectiveness (see below the action plan). - 87 - Action (Initial Phase) Date Due Responsibility PCU and UDA 1. Recruitment of accounting firm Completed Government 2. * Preparation of Manuals of procedures describing Job Consulting Fimn/ description of key staff, Administrative, Accounting & Government/ Financial accounting systems and procedures, intemal IDA controls, and funds flow processes: + First draft for IDA comments; Completed * Final draft incorporating IDA comments Completed * training of staff November 2001 3. Recruitment process of key staff Completed * Coordinator &c.'. .-:. * Accountant specialists Govemr ei o 4. Installation of Program Financial Management system in December 2001 Consulting firm PCU and UDA and Govermnent * Consulting at least 3 software vendors; * Receive and evaluate bids and select winners; * Seek IDA on selected winners; + Installation of software, "Parametrage" and agreement on financial reporting formatlcontent; * Training on selected software. 5. Appointment of External Auditors December 2001 Government/IDA * Agreement on terms of reference for extemal audit * Recruitment process of Auditors Firm: * Finalize bidding documents; * Seek IDA no objection; + Publish bids; + Receive and evaluate bids and select winners; * Seek IDA on selected winners. 6. IDA Financial Management Specialist (FMS) carries out the September 15, 2002 IDA final Assessment of the Project Financial Management system, issues the Loan Administration Change Initiative (LACI) sign-off Certificate along with the 18-month action plan for adopting PMR-based disbursement 7. Project Effectiveness January 31, 2002 IDA SOCOGIM T I . Reception of audit and diagnostic report and preparation of Completed Consultant TOR for reinforcement mission _ 2. Recruitment of accounting firm (Same PCU & UDA) Completed SOCOGIM 3. Preparation of Manuals of procedures updated and describing May 2002 Consulting Firm/ Job description of key staff, Administrative, Accounting & Govemment- Financial accounting systems and procedures, intemal SOCOGIM/ controls, and fumds flow processes: IDA * First draft for IDA comments; * Final draft incorporating IDA comments; * training of staff. (Same PCU & UDA) 4. Strengthening of key staff August 31, 2002 Government- SOCOGIM 5. Improvement or Installation of Program Financial June - July 31, 2002 Consulting fizm Management system ( decision after audit report reception) and Govemment 6. Appointment of External Auditors ( by PCU) December 31, 2001 Govemment/IDA 7. IDA FMS carries out the final Assessment of the Project September 15, 2002 IDA Financial Management system, issues the LACI sign-off Certificate along with the 18-month action plan for adopting PMR-based disbursement. 8 Project Effectiveness January 31, 2002 IDA - 88 - Final Phase 1 First Project financial statement prepared June 30, 2001 PCU 2 Transmission of project audit report to IDA At latest June 30, PCU 2002 3 Review Project audit reports and follow on implementation July 2002 IDA of recommendations. 4 Preparation of simplified statements such as PMR Every six months PCU into implementation 5 Assessment of project financial management system and 1 8 month into PCU/IDA initiation of PMR-based disbursement (LACI) implementation 6 PMRs issued on a quarterly basis Until closing PCU - 89 - Report on the Assessment of Project for PMR-Based Disbursements Mauritania: URBAN DEVELOPMENT PROGRAM SONELEC Project ID: P069095 Ineligible for PMR-Based Disbursements Part I - Financial Management System: I have reviewed the financial management system relating to this project. The objective of the review was to determine whether the project has in place an adequate financial management system as required by the Bank/IDA under OP/BP 10.02. My review, which included visits to the project implementing agency, was based on the Bank's guidelines for "Review of Financial Management System", and focused on the assessment of the project's accounting system, internal control, planning, budgeting and financial reporting system, selection of an auditor as well as the format and contents of the Project Management Report (PMR) to be submitted by the borrower in support of Withdrawal Applications. I confirm that the project satisfies the Bank's minimum financial management requirements. However, in my opinion, the project does not have in place an adequate project financial management system that can provide, with reasonable assurance, accurate and timely information on the status of the project (PMR) as required by the Bank/IDA for PMR-Based Disbursements. I have detailed in the attachment the inadequacies that I found in the system together with an agreed action plan by the Borrower to remedy the situation. Signed by: Abdoulaye COULIBALY Financial Management Specialist - AFMML March 1, 2001 -90- Report on the Assessment of Project for PMR-Based Disbursements Mauritania: URBAN DEVELOPMENT PROGRAM Project Coordinating Unit Project ID: P069095 Ineligible for PMR-Based Disbursements Part I - Financial Management System: I have reviewed the financial management system relating to this project The objective of the review was to determine whether the project has in place an adequate financial management system as required by the Bank/IDA under OP/BP 10.02. My review, which included visits to the project implementing agency, was based on the Bank's guidelines for "Review of Financial Management System", and focused on the assessment of the project's accounting system, internal control, planning, budgeting and financial reporting system, selection of an auditor as well as the fornat and contents of the Project Management Report (PMR) to be submitted by the borrower in support of Withdrawal Applications. I confirm that the project does not have yet an established financial management system and consequently does not satisfy the Bank's minimnum financial management requirements. We have however, reached an agreement with the Borrower to establish the project financial management system before effectiveness. It is reasonable therefore, to assume that the project cannot provide in its first year, with reasonable assurance, accurate and timely information on the status of the project (PMR) as required by the Bank/IDA for PMR-Based Disbursements. I have detailed in the attachment the inadequacies that I found in the system together with an agreed action plan by the Borrower to remedy the situation. Signed by: Abdoulaye COULIBALY Financial Management Specialist - AFMML March 1, 2001 - 91 - Report on the Assessment of Project for PMR-Based Disbursements Mauritania: URBAN DEVELOPMENT PROGRAM SOCOGIM Project ID: P069095 Ineligible for PMR-Based Disbursements Part I - Financial Management Svstem: I have reviewed the financial management system relating to this project. The objective of the review was to determine whether the project has in place an adequate financial management system as required by the Bank/IDA under OP/BP 10.02. My review, which included visits to the project implementing agency, was based on the Bank's guidelines for "Review of Financial Management System", and focused on the assessment of the project's accounting system, intemal control, planning, budgeting and financial reporting system, selection of an auditor as well as the format and contents of the Project Management Report (PMR) to be submitted by the borrower in support of Withdrawal Applications. I confirm that the project does not have yet an established financial management system and consequently does not satisfy the Bank's minimum financial management requirements. We have however, reached an agreement with the Borrower to establish the project financial management system before effectiveness. It is reasonable therefore, to assume that the project cannot provide in its first year, with reasonable assurance, accurate and timely information on the status of the project (PMR) as required by the Bank/IDA for PMR-Based Disbursements. I have detailed in the attachment the inadequacies that I found in the system together with an agreed action plan by the Borrower to remedy the situation. Signed by: Abdoulaye COULIBALY Financial Management Specialist - AFMML March 1, 2001 - 92 - Report on the Assessment of Project for PMR-Based Disbursements Mauritania: URBAN DEVELOPMENT PROGRAM AMEXTIPE Project ID: P069095 Ineligible for PMR-Based Disbursements Part I - Financial Management System: I have reviewed the financial management system relating to this project. The objective of the review was to determine whether the project has in place an adequate financial management system as required by the Bank/IDA under OP/BP 10.02. My review, which included visits to the project implementing agency, was based on the Bank's guidelines for "Review of Financial Management System", and focused on the assessment of the project's accounting system, internal control, planning, budgeting and financial reporting system, selection of an auditor as well as the format and contents of the Project Management Report (PMR) to be submitted by the borrower in support of Withdrawal Applications. I confirm that the project satisfies the Bank's minimum financial management requirements. However, in my opinion, the project does not have in place an adequate project financial management system that can provide, with reasonable assurance, accurate and timely information on the status of the project (PMR) as required by the Bank/IDA for PMR-Based Disbursements. I have detailed in the attachment the inadequacies that I found in the system together with an agreed action plan by the Borrower to remedy the situation. Signed by: Abdoulaye COULIBALY Financial Management Specialist - AFMML March 1, 2001 - 93 - Report on the Assessment of Project for PMR-Based Disbursements Mauritania: URBAN DEVELOPMENT PROGRAM URBAN DEVELOPPEMENT AGENCY Project ID: P069095 Ineligible for PMR-Based Disbursements Part I - Financial Management System: I have reviewed the financial management system relating to this project. The objective of the review was to determine whether the project has in place an adequate financial management system as required by the Bank/IDA under OP/BP 10.02. My review, which included visits to the project implementing agency, was based on the Bank's guidelines for "Review of Financial Management System", and focused on the assessment of the project's accounting system, intemal control, planning, budgeting and financial reporting system, selection of an auditor as well as the format and contents of the Project Management Report (PMR) to be submitted by the borrower in support of Withdrawal Applications. I confirm that the project does not have yet an established financial management system and consequently does not satisfy the Bank's minimum financial management requirements. We have however, reached an agreement with the Borrower to establish the project financial management system before effectiveness. It is reasonable therefore, to assume that the project cannot provide in its first year, with reasonable assurance, accurate and timely information on the status of the project (PMR) as required by the Bank/IDA for PMR-Based Disbursements. I have detailed in the attachment the inadequacies that I found in the system together with an agreed action plan by the Borrower to remedy the situation. Signed by: Abdoulaye COULIBALY Financial Management Specialist - AFMML March 1, 2001 - 94 - Annex 7: Project Processing Schedule MAURITANIA: Urban Development Program Project Schedule Planned Actua, Time taken to prepare the project (months) 12 First Bank mission (identification) 04/18/2000 04/18/2000 Appraisal mission departure 02/13/2001 02/13/2001 Negotiations 06/18/2001 06/18/2001 Planned Date of Effectiveness 01/31/2002 Prepared by: AMEXTIPE Ministry of Economic Affairs and Development Preparation assistance: Preparatory activities were fimded partly by the ongoing Urban Infrastructure and Pilot Decentralization Project (Credit 2835), a Japanese Grant Trust Fund (US$619,600) PHRD no. TF026223, and two Project Preparation Facility IDA Advances (US$1.7 million). Bank staff who worked on the project included: Name Speciality Abdelghani Inal Task Team Leader Robert Robelus Environment Specialist Sylvie Debomy Urban Planner, Water and Sanitation Specialist Jainaba Kah Urban Planner Salamata Bal Economist, Social Aspects Specialist Hitoshi Shoji Economist Ahmedou Ould Hamed Procurement Specialist Abdoulaye Coulibaly Financial Analyst Connie Kok Shun Program Assistant Sophie Hans-Moevi Team Assistant Geraldine Grataloup Intem Hans Wabnitz Senior Counsel Wolfgang Chadab Disbursement Officer Roberto Chavez Urban Planner, Peer Reviewer George Gattoni Urban Planner, Lead Advisor - 95 - Annex 8: Documents in the Project File* MAURITANIA: Urban Development Program A. Project Implementation Plan 1. Project Implementation Manual 2. Manual of Procedures of CDHLPCI. B. Bank Staff Assessments Economic Evaluation C. Other 1. Etudes sur la decentralisation (SIDES) 2 et 3. Etudes sur le cadre juridique du foncier et de l'urbain (CUDS Harvard et ADEF) 4 et 5. Actes des Seminaires de validation de ces etudes 6. Etudes sur une strategie de restructuration des quartiers precaires de Nouakchott (URBAPLAN) 7, 8, 9. Etudes d'urbanisme et de plans d'investissements de Nouakchott (URBAPLAN), de Nouadhibou (AIC Progetti), et des onze capitales regionales (COPLAN). Etudes liees A la preparation des strategies de developpement economique et social des villes Nouakchott, Nouadhibou, et Kaedi: 10. Appui aux groupes de reflexion: secretariat et facilitation des workshops de validation 11. Environnement (Pigeon) 12. Tourisme (Hector Ceballos) 13. Agriculture (SOFRECO) 14. Peche (COFREPECHE) Strategies de developpement des villes de Nouakchott, Nouadhibou et Kaedi: 15 A 17. Diagnostics 18 A 20. Actes des Ateliers de Validation des diagnostics 21 A 23. Visions 24 A 26. Actes des seminaires de validation des visions 27. Etudes sur la clarification des attributions Etat/Communes 28. Etudes sur la refonte du Fonds regional de developpement 29. Etudes du Plan d'action de relogement pour la restructuration du quartier d'El Mina (Giovanetti) 30. Etudes d'evaluation sociale de la restructuration des quartiers precaires de Nouakchott A amenager en premiere phase (Anna Martella) 31. Audits financiers et organisationnels des communes de Nouakchott et Nouadhibou, de l'Association des Maires et de la DCL (Fiduciaire de la Tour) 32. Audit financier et organisationnel de la SOCOGIM 33. Strategie des dechets solides de Nouakchott Etudes Alimentation en eau potable de: 34. Selibaby: IGIP 35. Nouakchott: SAFEGE 36. Etudes du Manuel de procedures du CDHLCPI 37. Etudes du programme d'activites du CDHLCPI - 96 - 38. Etudes sur le Micro-credit 39. Etudes de l'Agence urbaine de Nouakchott 40. Etude diagnostic de l'organisation du secteur des transports routiers et proposition d'un plan d'action (B. Baylatry) 41. Etude sur le cadre de concession des services marchands 42. Etude sur le programme d'action de communication communal SOCOGIM 43. Rapport general et special des commissaires aux comptes - Exercice clos le 31 d6cembre 1997 44. Rapport des commissaires aux comptes - Exercice clos au 31 decembre 1998 45. Budget 2001 SONELEC 46. Rapport de l'auditeur contractuel - Exercice clos au 31 decembre 1998 47. Rapport d'audit et de certification sur les comptes arr6t6s au 31 decembre 1999 48. Projection financiere 2001-2010 49. Tarification SONELEC - juillet 2000 Commune de Nouakchott 50. Rapport d'audit sur l'exercice 1999" (version provisoire) 51. Proposition valeurs locatives et impot foncier Nouakchott - Direction Reseau Informatique 52. De1iberation No. 00017/CN/99 portant approbation des taux des imp6ts, taxes redevances, droits domaniaux et recettes de service percevable 53. Situation Taxes Municipales sur I'activite par mois 54. Fiche de mise a jour - Recensement fiscal 2000 Federation Mauritanienne pour la promotion de la vente du betail 55. Note explicative du 25 fevrier 2001. *Including electronic files - 97 - Annex 9: Statement of Loans and Credits MAURITANIA: Urban Development Program Difference between expected and actual Orginal Amount in USS Millions disbursements Project ID FY Purpose IBRD IDA Cancel. Undisb. Orig Frrn Rev'd P044711 2000 INTEG DEV PROG FOR I 0.00 38.10 0.00 27.56 23.65 0.00 P064570 2000 CULTURAL HERITAGE 0.00 5.00 0.00 3.97 1.25 0.00 P066345 2000 MR EGYNVATEPJSANITATION SECTOR REFORM TA 0.00 9.90 0.00 7.65 5.96 0.00 P055003 1999 NUTRITION (UL) 0.00 4.90 0.00 3.35 1.39 1.78 P057875 1999 MINING SECT CAPACITY 0.00 15.00 0.00 9.71 3.71 0.0o P063791 1999 TELECOM POSTAL REFRM 0.00 10.80 0.00 7.23 4.67 0.00 P035689 1998 HEALTH SECTOR INVEST 0.00 24.00 0.00 16.08 10.45 7.11 P001875 1997 RAINFED NAT RES MGT 0.00 18.00 0.00 9.73 5.16 0.00 P048850 1997 MR REGIONAL POWER 0.00 11.10 0.00 3.34 3.75 0.00 P034106 1996 INFRAST & PILOT DEC. 0.00 14.00 0.00 2.75 3.93 0.00 P001857 1995 GENERAL EDUCATION PR 0.00 35.00 0.00 7.89 34.36 0.00 Total: 0.00 185.80 0.00 99.28 98.28 8.89 MAURITANIA STATEMENT OF IFC's Held and Disbursed Portfolio May-2001 In Millions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1997 AEF Codipal 0.00 0.00 0.47 0.00 0.00 0.00 0.47 0.00 1996 AEF Mayo Fish 0.00 0.00 0.23 0.00 0.00 0.00 0.23 0.00 1997 AEF STEP 0.60 0.00 0.00 0.00 0.60 0.00 0.00 0.00 1997 BMCI 8.75 0.00 0.00 0.00 8.75 0.00 0.00 0.00 1996/00 GBM 7.00 0.00 0.00 0.00 7.00 0.00 0.00 0.00 1999 PAL-GMN 1.86 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1999 SEF Lemhar 0.42 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Portfolio: 18.63 0.00 0.70 0.00 16.35 0.00 0.70 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic Total Pending Commitment: 0.00 0.00 0.00 0.00 - 98 - Annex 10: Country at a Glance MAURITANIA: Urban Development Program 3ub- POVERTY and SOCIAL Sahatan Low- Mauritania Africa Income Development diamond 2000 Population. mid-year (zafa 2 i 69 2459 Ut. expectancy GNI per capita (Atlas method US$) 370 480 420 GNI (Atfas methodI Ut$ bltos) 0.98 313 1t030 Average annual grotth. 19940 Population (2) .7 2.8 1. 9 GN abor ore (7) 2.7 2.6 Z94 GNI s> , Gemu Labor Wm M ~~~~~~~~~~~~~~~~~per h= Most recent stimate (latest year aalable, 199440) capita enrolment Poverty (76 o(poptdatn belobwnalonpotwin 47 . Urban populatio (XO dWpoplatIn) 5S 34 32 Lif expectancy at birtt (yre 53 47 59 Infant mortatly (per 1.co OWh bibt) tOt 92 77 Child lsinutOi'w (% of dWhkn wudE ') 48 Access to irotmved wate S_ uuf Access to an impnOved water scuml (7 of podaston) 76 Si 76 lflitera;c (X ofpapton age *6+J ti2 38 3B Grss primary enrment (7 of schoo-aqe population) 86 78 96 M atDi8 Male 89 aS 102 Low4ncorne grup Female 83 71 86 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1980 1990 1999 2000 IEconomnic rtiobs GOP (USS bWlthns) 0.81 1.0 0.96 0.94 Gross domestic investmentlGDP 22.9 20.0 17.8 30.1 Trade Expots of goods and seicesiGOP 32.1 45.6 38.6 41.4 Gross domestic savingstGDP -31 4.9 7.2 15.0 Grss nadonal savins/GOP &9 20.8 25.6 Current account balance/GOP .16.4 .13.7 3.0 -24 Domestic 4 ; \ Interest payments/GOP 1.6 3.4 368 savings, Invent Total debttGOP 103.6 203.6 212.5 190.1 Total debt servicelexports 17.3 28.1 31.7 24.5 r Present value of debtlGOP .. .. 128.3 121.1 Present value of debt/exports .. . 289.5 257.5 Indebtedness 1980.90 199040 1999 2000 2000-04 (avefage annual growth) aMaunlania GOP 0.0 4.2 4.1 5.2 6.3 GOP per capita -2.6 1.4 1.3 2.4 3.5 | Low-income gmup Exports d goods and services 2.1 1.6 4.8 ZS 7.5 STRUCTURE of the ECONOMY 1S80 1990 1999 2000 rOwth of Investment and GDP 1%) (% of GOP) Io Agriculture 30.4 29.6 25.2 22.4 o Industry 26.0 26.8 29.3 30.6 oil Manufactunng 10.3 10.0 9.0 40 Services 43.6 41.6 45.5 47.0 20 Private con5umptin 63.2 69.2 77.7 67.7 *20 ot General govemment consump6en 39.9 25.9 15.2 17.3 - GO --O P importsofgoodsandservices 58.1 60.7 49.2 56.S 190-90 1990-0 1t99 2000 Growth of exports and Import (16) (average annual growth) Agriculture 1.7 5.0 9.1 2.8 Industry 4.9 2.4 4.6 6.7 Manutacturing .2.1 t 0.5 12.2 3.3 20 Private consumption .1.1 3.2 3.8 -7.5 I General govemment eonsumption .3.8 -0.5 8.9 2.9 40 Gnoss domestic investment 6.9 9.9 -8.9 60.7 - Expons O giipatn Imports ol goods and serdces 0.2 1.8 -1.1 12.1 _ Note: 2000 data are preliminary esimates. The diamonds show four key indicators in the country (in bold) compared with its income-grOuP average. If data are missing. the diamona will be incomplete. - 99 - Mauritania PRICES and GOVERNMENT FINANCE DomestIc prices 1980 1990 1999 2000 Inflation C%) (% change) tt Consumer prices 6.5 4.0 3.3 s Implicit GOP deflator 6.5 2.6 2.1 5.8 Government finance 2 (% of GOP, indudos crmrnt gants) o Current revenue 25.1 27.7 25.6 05 a 07 9a Current budget balance -2.4 9.4 8.2 - GP deflator -0CPI Overal surplus/deolcit -14.1 2.1 -5.1 TRADE (USS r"Ifflons) 1980 1990 1999 2000 Export and import lwle (US$ milL) TotA exports job) 414 333 345 GM1 Iron 208 178 193 SW Fish 206 155 164 L Manufactures Total imports (cif) 438 329 329 3 Food 127 98 120 20** Fuel and energy 46 61 100 Ica* Capital goods as 59 75 Export prtce index (1995-100J . 104 79 Oa OA 95 so 07 sa 90 o Import price index (1995-100) 109 91 73 m Export mlmponts Terms of trade (1995=100) 95 87 110 BALANCE ot PAYMENTS 1980 1990 1999 2000 Current account balnce to GOP (%) (US$ m11ions) Exports of goods and sevIces 253 465 370 378 T Imports of goods and setvices 449 619 471 500 2- Resource balance -196 -154 -102 -122 a Net income -27 .59 -33 -26 .2 g Net current transfes 90 73 164 126 Current account balance -133 -139 29 -22 .t Financing items (net) 131 107 -6 75 o Changes in net reserves 2 32 -23 -53 12T Memo: Reserves induding gold (USS milions) 146 51 228 284 Conversion rate (DEC, localJSS) 45.9 80.6 209.5 237.0 EXTERNAL DEBT and RESOURCE FLOWS 1980 1990 1999 2000 (USS millions) Compogition of 199S debt (USS mHl) Total debt outstanding and disbursed 843 2,096 2.035 1.792 IBRD 0 54 1 -1 IDA 38 210 411 423 G:324 A: I Total debtservice 48 136 135 109 IBRO 0 1 IDA 1 26 7 Composition of net soufce flows Official grants a i 0 Official credHon 109 55 -35 Private creditors 1 -1 0 . Foreign diret invstrment 27 7 0 I Porftolio equity 0 World Bank program Commitments 15 82 43 30 A IBRo E- Blateral Disbursements 4 39 16 46 8-IOA D- Otherirmjlrerat F- Privt. Pnncipalrepayments 0 12 5 6 C-IMF G -Short4alm Netllows 4 27 11 40 Interest payments 0 6 3 3 Net transfers 4 21 7 37 Development Economics 9113101 - 100- Additional Annex 11 Mauritania Urban Development Program Strategic Urban Environmental Assessment and Management Plan 1. Safeguard Policy 4.01 - Environmental Assessment: The cities of Nouakchott, Nouadhibou, and Kaedi prepared an Urban Development Strategy. The project prepared a Strategic Urban Environmental Assessment (SUEA), which diagnosed the most urgent environmental problems in Nouakchott, Nouadhibou, and Kaedi. Results of this environmental diagnostic have been included in the Urban Development Strategies for the three cities. High investment priority issues identified are: (i) need for upgrading slum areas, including water supply, sanitation, and solid waste management; (ii) lack of adequate water supply and sanitation in the slum areas of Nouakchott and Nouadhibou; (iii) lack of an adequate solid waste management system (a high priority in the three cities); and (iv) lack of management of open spaces required for proper urban environment. Improvement of some of these priorities will be financed under the project, others will either have to wait or find other donors. 2. Environmental Priorities in Urban strategies: The environmental diagnostic performed in the cities of Nouakchott, Nouadhibou, and Kaedi has identified the most significant environmental issues which are to be addressed in the coming years. The relevant issues are: * An incomplete regulatory framework in the countiy with regard to the urban environment, environmental monitoring and evaluation of the physical and biological environment; * The need to protect natural areas, such as the line of coastal dunes, which acts as a protection for Nouakchott against sea water intrusion, or the urban areas plant cover (green belts), in order to deal with the sand encroachment phenomena; * The non-adjustment of the institutional land planning and land assignment regulatory framework, which does not allow environmental issues to be addressed under urban planning strategies (protection of fragile natural areas, possibility to use land reservation and set-aside techniques); * The management of pollution associated with fishing activities, in Nouakchott and Nouadhibou; * The development of solid waste collection and treatment systems, as the situation is an urgent challenging issue for most Mauritanian cities; * The development of collective and on-site sanitation systems, the current infrastructure being unable to handle wastewater collection and treatment; c The need to improve the formation of the municipal staffs in urban environmental management; and * To increase the awareness of the population through information campaigns with regard to sanitary issues (sanitation) and modification of behavior with regard to solid waste collection practices; - 101 - In order to address these issues, the enviromnental part of the cities urban strategy has planned relevant investments, in order to complement the infrastructure or equipment which are already financed by the UDP: * Development of a collective sanitation system for Nouakchott, including construction of sewers, refurbishment and complementary equipment for the existing wastewater treatment plant, and a new management framework for agricultural activities from wastewater reuse (estimated cost of the component: US5.0 million); * Construction of a collective sanitation system for Nouadhibou, with a sewer network in high population density districts and the construction of a wastewater treatment plant (estimated cost of the component: US$3.0 million); * Equipment for solid waste collection for the cities of Nouadhibou and Kaedi, the situation of this last city being a real concern (estimated costs of the components : US$1 million for Nouadhibou; US$0.5 million for Kaedi); a Equipment for port facilities of Nouadhibou, for oil-waste recovery and treatment (cost will be part of the ports estimates); * Projects for combating sand encroachment, in particular in Nouadhibou (estimated cost US$150,000). 3. Selected priority investments for the UDP: Studies carried out under the UDP (Urban Development Program) have identified priority investments to be financed under the project. These priority investments for Nouakchott and Nouadhibou are: (i) slum upgrading, which will include water supply, on-site sanitation and fecal sludge treatment facility, solid waste collection, roads, schools, health posts, and electricity in both Nouakchott and Nouadhibou; (ii) improvement of water supply to the slum areas; (iii) land development for housing to prevent the emergence of new slums; (iv) infrastructure for Nouakchott, which includes: improvements in cattle markets, improvements in artisanal fishermen landing sites and fish market area, construction of a solid waste disposal site (selection of site has already been adequately done under German financing and is in compliance with Bank Safeguard Policies), feasibility study of a new airport, which includes an EA study; (v) infrastructure for Nouadhibou, which includes roads, harbor development and improvements in environmental management of the harbor and nearby areas, and equipment for solid waste management; and (vi) capacity building for relevant municipal and national authorities to monitor and manage the environmental and social impacts of the UDP. 4. Potential Environmental and Social Impacts of UDP investments: Resettlement caused by land acquisition in the slum areas to be improved will be a major impact of the project. A Social Assessment (SA) and a Land Acquisition and Resettlement Action Plan (LARAP) have been prepared. The impacts include on-site sanitation in waterlogged and temporary flooded areas, impacts of solid waste disposal sites, impacts of construction activities, increased pressure on fragile coastal zone, which would increase the risk of inundation for parts of Nouakchott from the sea, monitoring of groundwater levels of fossil groundwater resources, impacts of new or improved infrastructure, such as cattle markets, the artisanal fish landing site on the beach and the fish market. Environmental impacts of the first stage investments of the UDP are summarized and listed in the following table: - 102 - Activities per Direct and indirect Impacts UDP component Positive Negative Slums and under- Increase of environmental and public health Displacement of population of the El Mina slum equipped districts conditions for involved urban populations upgrading in (improvement of drinking water supply, access Difficult management of waste water discharges and Nouakchott and to sanitation utilities, public equipment, and runoff water due to soils' physical constraints for Nouadhibou infrastructures) sanitation systems (Nouakchott, El Mina) Economic benefits for the population Nuisances related to the development of construction (employment) activities : material removals and deposits, uncontrolled solid waste discharges Flooding risks exposure for populations of westem ___________________ _______________________________ __ districts of Nouakchott (El Mina) Reinforcement of the Better drinking water service for the population Accentuation of withdrawals pressure on underground drinking water supply of slums and under-equipped districts, water resources system of Nouakchott improvement of public health conditions Land development for Improvement of public health conditions Solid waste and waste water discharges housing to prevent the emergence of new slums Infrastructure to support Improvement of transport conditions and of Removal of construction materials (sand) from fragile labor-intensive traffic (roads), areas in coastal dunes; increase of major flooding economic activities in hazards Nouakchott (roads, Increase of environmental and public health cattle market, conditions (markets, fishing area, solid waste Increase of urban land tenure pressure on natural improvement of the disposal) fragile coastal areas artisanal fishing area, construction of a solid Economic benefits for the population Solid waste and waste water discharges waste disposal, study of (employment) a new airport) Infrastructure to support Improvement of transport conditions and of the Increase of urban land tenure pressure on natural labor-intensive traffic (roads) fragile coastal and in-land water areas (western economic activities in littoral, o la riviere n> area) Nouadhibou (roads, port Increase of environmental and public health development and conditions (port, waste disposal) sanitation, equipment for solid waste disposal Improvement of water quality of the bay of management) Cansado Basic infrastructure to Indeterminate impacts: projects will be identified in further stage of the UDP support economic activities (second stage of UDP) _ Basic infrastructure in Indeterminate impacts: projects will be identified in further stage of the UDP the II regional capitals Overall UDP: capacities Land management and land tenure system | Weakness of environmental authorities means, of related authorities to improvements and legal reforms during the absence of an operational environmental regulatory monitor and manage the implementation of the project. (financed under framework environmental impacts institutional and capacity building component of the project of UDP) _ 5. Analysis of Alternatives: The investments of the UDP will have considerable benefits for the poorer groups in Nouakchott and Nouadhibou. The option without project would continue a situation which is not beneficial for the poor. Studies have shown that the present chosen alternatives for the various components are, from an environmental and social point of view, the most optimal. 6. Environmental Management Plan (US$1.5 million): Environmental studies have been carried out in preparation of the city development strategies, the master urban plans, and the investment programs. Mitigation plans elaborated under these studies have been incorporated in the SUEA and Environmental Management Plan (EMP) for this project. The SUEA analyzed direct and indirect environrnental impacts of these priority investments and developed an EMP for avoiding, reducing, mitigating, and improving the existing situation. The EMP also contains also a monitoring plan to monitor these impacts and provides -103- reconmmendations for institutional strengthening and development of urgent environmental legislation to improve environmental management capacity and living conditions in the three cities. The EMP, including the monitoring plan and the capacity building activities, will be financed under the UDP. After proper implementation of the EMP, it is expected that environmental living conditions in the three cities would significantly improve over the present situation. 7. Safeguard Policy 4.11 - Cultural Property: The project will open up areas in the slums and build new social infrastructure, such as roads, schools, and health posts. A "Chance Find" procedure will be followed in case archaeological or prehistoric sites are discovered. 8. Safeguard Policy 4.30 - Involuntary Resettlement. A Land Acquisition and Resettlement Action Plan (LARAP) has been prepared for the relocation and compensation measures to be provided to project affected people during the first phase of the project. During this phase, the project consultant "Urbaplan" is proposing the following rehabilitation of public infrastructure for the kebbe of El Mina: roads, water and electricity, markets and transport stations, primary and secondary schools, public health services, latrines, and a cemetery. The total beneficiary population in El Mina is 36,640 people out of which 12,225 people will be relocated (2,316 households). The new site of approximately 50 hectares is situated next to "El Mina". Apart from the new and rehabilitated infrastructure and public services, the affected families will receive a plot of land which is 120 m2 (which will be paid for during a two-year period), transfer and other compensation, such as for latrines and cement blocks. The commune of Nouakchott and the CDHLCPI, in close consultation with the communities, have developed procedures and compensation schedules. A Land Acquisition and Resettlement Action Plan (LARAP) has been prepared and submitted to the Bank for approval for the first slum, El Mina, to be restructured in the first phase; the final report was submitted to IDA before negotiation. The LARAP for the other slums, to be restructured during the second phase, was submitted for Bank approval six months before the presentation of the APL second phase. 9. Environmental and Social Monitoring Plan and Institutional Strengthening Measures: The EMP includes an environmental monitoring plan with indicators that reflect objectives and results expected from implementation of the EMP (see table below). 10. Implementation of the EMP and the LARAP: Implementation of the EMP and the LARAP and the monitoring will be done by Municipal authorities, whose capacity will be strengthened under the technical assistance component of the project. 11. Reporting and Supervision: The Mauritanian Government will report quarterly to the Bank on the implementation of the EMP and the LARAP. The Mauritanian Government will also inform the local population on progress, activities planned, timing and other relevant issues. The World Bank will execute two times a year a supervision mission to supervise the proper execution of the EMP and the LARAP. 12. Consultation and Disclosure of Information: Public consultations have been carried out since December 30, 2000 on the SUEA scoping report in order to incorporate public concems in the final SUEA. Public meetings were held on December 31, 2000 on the SUEA scoping report for Nouakchott, and on January 8, 2001 for Nouadhibou. The draft SUEA was placed in the World Bank's Infoshop and has been released and discussed with Mauritanian stakeholders. The final report was also disclosed for consultation on March 26, 2001. 13. Stakeholder consultations were organized on the SUEA to raise public awareness of environmental issues during consultations made for the participatory preparation of urban development strategies for the cities of Nouakchott, Nouadhibou, and Kaedi (three phased preparation: diagnosis, vision, and program) - 104 - and in March 2001. In addition, concemed beneficiaries and civil society will be consulted during the preparation of investment programs and sanitation strategies for concerned cities. This will be followed up with environmental education programs. Environmental management training will also be provided to elected officials, municipal staff, and concerned central governnent staff through a Technical Assistance component, based on needs assessed by the EMP. 14. EA Clearance: The draft SUEA Report was received by the Bank in December 2000 and reviewed by Bank environmental staff. The final EA report including the EMP was submitted in May 2001 and found to be in compliance with World Bank Safeguard Policies. The final EA was approved by the Mauritanian authorities on May 9, 2001. 15. The EMP includes the following actions, with the corresponding implementation agency, indicators, and budget: The LARAP was prepared and approved of for the first phase the Project. The preparation of this plan was based on the analysis of results from a Social Assessment which was carried out in the kebbe of El Mina. For the second phase of the project, the same procedure will be applied, i.e. a Social Assessment will be carried out in the five remaining urban zones and the results will be used to prepare another LARAP. A national NGO will be contracted in order to facilitate the resettlement operations and related activities which will be carried out in the comnmunities during both phases of the project. On-site sanitation system design for new housing areas, design and construction of a fecal sludge treatment facility in Nouakchott (first stage); Costs and responsible agency: US$200,000; Municipality of Nouakchott/SONELEC Indicators: in-coming pollution load in the treatment facility (sludge quantity/ organic oxygen demand in kilos/day) Planning (years): years 1 to 5 Slums and under-equipped districts upgrading with respect to environmental issues to be implemented by the Urban Development Agency - UDA (design of appropriate latrines system, runoff water management, green spaces planning, dedicated spaces for solid waste collection, and management of construction activities nuisances); Costs and responsible agency: financed by project planned component; Urban development Agency Indicators: number of latrines in the under-equipped districts; quantity of solid waste produced, collected and treated in the land fill per day Planning (years): years I and 2 Emergency protection plan for the coastal area of Nouakchott (regulatory framework, design studies, information, andphysical investments); Costs and responsible agency: US$500,000; Direction of Merchant Marine, Ministry of Fishing and Maritime Economy; Indicators: kilometers of fixed dunes; land tenure assessment; - 105 - number of building material extraction sites Regular monitoring of the underground water resource ofIdini (Nouakchott water supply system); Costs and responsible agency: Ministry of Hydraulics Indicators: groundwater level and chloride content Planning (years): years I to 5 Providing environmental and public health facilities in the new land developmentfor housing in. Nouakchott (solid waste disposal, and sanitation); Costs and responsible agency: Municipality/SOCOGIM Indicators: number of installed latrines; quantity of solid waste produced, collected, and treated in the land fill per day Planning (years): years 1 to 5 Control and monitoring ofprivate economic activities dismissals (artisanal port, cattle markets), definition of environmental requirements to comply with during the planning permission process; Costs and responsible agency: US$50,000; Ministry of Fishing/Ministry of Environment Planning (years): years I to 5 Supervision of sustainable urban development (housing and economic activities) with the help of on-going city planning studies, including environmental considerations; Costs and responsible agency: Municipalities/ Urban Development Agency - UDA/AMEXTIPE Indicators: land tenure assessment Planning (years): years I to 5 Technical assistance to the municipalities ofNouakchott and Nouadhibou in urban environmental management; Costs and responsible agency: US$350,000; Municipalities of Nouakchott and Nouadhibou Indicators: number of trained staff; Planning (years): years I and 2 Pilot-operation in order to eliminate the uncontrolled solid waste disposal in the western parts of Nouakchott; Costs and responsible agency: US$200,000; Municipality of Nouakchott Indicators: tons of collected and treated solid waste - 106 - Planning (years): years I and 2 Control and monitoring ofprivate economic activities dismissals in Nouakchott (artisanalport, cattle markets), definition of environmental requirements to comply with during the planning permission process, Costs and responsible agency: US$50,000; Ministry of Fishing and Marine Economy, Ministry of Rural Development and Environment Planning (years): years I to 5 Implementation of an environmental impact assessment for the project of a new airport andfor each new project submittedfinancing under the second phase of the Urban Development Program; Costs and responsible agency: costs to be included in the overall cost of each new project Planning (years): years 5 to 10 Reinforcement of the Direction of environment and rural planning, with equipment and logistics; Costs and responsible agency: US$50,000; Direction of Environment and Rural Planning, urban environment division Planning (years): year I Program development for the setting of a national regulatory framework about the environmental impact assessments (technical assistance, operational and regulatory directives, formation, workshops, and dissemination of information to stakeholders and administrations); Costs and responsible agency: US$150,000; Direction of Environment and Rural Planning, Urban Environment Division Indicators: assessment of the new regulation; number of staff trained for environmental impact assessment; number for environmental impact assessments under the new regulation Planning (years): years 1 to 5. - 107 - Additional Annex 12 RESETTLEMENT ACTION PLAN EL MINA SLUM UPGRADING EXECUTIVE SUMMARY The project Over the past 30 years, the population of Nouakchott, the capital city of Mauritania, has increased five-fold or more, due to successive droughts in rural areas and rapid urbanization. At present the population consists of approximately 800,000 persons. Many settlers initially squatted in slums, locally known as << kebbe >> or in other illegal areas with somewhat better-standard dwellings called << gazra >>. During the past 15 years, the Government has attempted to relocate people living in slums. The slum of El Mina is the last large kebbe in the city of Nouakchott, with approximately 36,000 people residing there. It is located near the center of the city, in an area with significant economic potential as it is well served by major conmnunication roads, including the main road to the port. Within the framework of the Urban Development Program (UDP), it is proposed to upgrade this kebbe and carry out a number of poverty reduction actions. The main components of this project are the following: e constructing streets within the slum; - upgrading the existing water supply to much better service standards; * constructing a public lighting network; and * constructing various public facilities, including primary and secondary schools, health centers, sanitation facilities and graveyards. Moreover, residents of the kebbe will accede to property on the land they have been squatting for the past 20 to 30 years. Plot patterns will be rationalized and land titles will be awarded to residents. This general upgrading project is under preparation by Urbaplan, a Swiss engineering company, on behalf of the Government of Mauritania. To proceed with this project will require displacing and relocating approximately 2,300 households who are currently residing on proposed roads or on land intended for public facilities. The Resettlement Action Plan (RAP) addresses the issue of displacement and relocation of these Project-Affected People (PAP). It is part of the Environmental and Social documentation of the Mauritania Urban Development Program, which was submitted to the World Bank for review and potential financial support. The scope of the RAP is to provide details on: (i) populations to be affected; (ii) regulation framework; (iii) methods used for identification of project-affected persons; (iv) methods and scope of consultation with PAPs on resettlement issues; (v) resettlement and compensation packages; (vi) methods and planning for resettlement and compensation; (vii) institutional arrangements for RAP implementation; (viii) RAP cost; (ix) special assistance to vulnerable PAPs; and (x) external and internal monitoring. Chapter 2, page 2, gives details about the project that requires displacement and resettlement. - 108- The legal and regulatory background The following laws and decrees are relevant to land tenure and urban developments in Mauritania: * Order of June 1983 deals with land tenure regimes; its main provision is that all vacant land be deemed part of the public domain; * various Decrees state applicable procedures for individuals applying for public land, and rules relevant to urban developments; and * November 1930 Decree provides for administrative and judicial procedures applicable to compulsory acquisition of titled land for public interest. Although the land attribution policy is rather social in essence, with land occupation permits as cheap as US$0.25 per sq.m., results show that land speculation is taking place on the outskirts of Nouakchott. The poorest people tend to sell the land occupation permits they are awarded by the Government and remain squatting in kebbes or gazras, which is widely tolerated. By law, unoccupied and undeveloped land should be returned to the public domain, but this is not enforced and much titled land remains void of either occupation or development. Since this project is being considered by the World Bank Group (WBG) for possible support, the Resettlement Action Plan has been developed in accordance with WBG Safeguard Policies. The Directive applicable to Resettlement is OD 4.30 << Involuntary Resettlement >>. Provisions within this RAP have been designed to comply with OD 4.30. Chapter 3, page 9, provides details on relevant laws and regulations, together with actual land tenure and occupation regimes in Nouakchott. Consultation with stakeholders and Project-Affected People (PAPs) Consultations have been undertaken at different levels: * At National Government level during the preparation of this RAP with relevant institutions including Commissariat aux Droits de l'Homme, d la Lutte contre la Pauvrete et a l'Insertion (CDHLCPI), Agence Mauritanienne d'Execution des Travaux d'Interet Public pour 1'Emploi (AMEX'TIPE), Wilaya of Nouakchott, Moughataa of El Mina; * At local Elected Government levels Municipality of de Nouakchott); * At PAPs level, through public information meetings and field interviews. Project-affected persons and their representatives have been informed about the Project and the process leading from census to displacement/resettlement. Affected people have agreed on the resettlement plan because it will give them an opportunity to own land and housing conditions. Project-Affected People An exhaustive census and socio-economic survey has been carried out for the preparation of this RAP, in December 2000. Close cooperation with Urbaplan and local authorities has been developed to allow for smooth implementation of surveys. The total number of PAPs is 2,316 households or 12,225 individuals. The main socio-economic characteristics of the PAPs are the following: - 109- * the gender distribution of household head in the kebbe is 45 percent male and 55 percent female; * people in the kebbe originate from all regions of Mauritania; * people have predominantly been dwelling in the kebbe for 15 years or more; * the household average size is 5.3 individuals; * many household heads are illiterate, and only 51 percent of school-age children are actually schooled; * the average income is UM21,600 per month, which is US$0.5 per individual per day, with basic family expenses amounting to a similar number; therefore, the average saving capacity is zero. In fact, there are two categories of people within the kebbe: * a large majority of people are well below the poverty line, with no regular employment; they try to survive on informal small commercial or handicraft activities and may rely on wider clan solidarity; most female heads of households belong to this category; and * some people do have regular employment in the formal sector (soldiers, policemen, truck drivers, civil servants), and are residing in the kebbe for lack of other affordable housing opportunity and/or because the kebbe is conveniently located to their employment areas. * the average capital cost of housing is UM42,000, while people state that the maintenance cost is UM1,700 per month; 3 the improvement of housing conditions is a priority for most household heads; they also state that acceding to ownership on a plot of land would trigger improvement, including building with permanent materials rather that non-permanent ones. Details on socio-economic conditions are given in Chapter 4 of this RAP. Current housing conditions in the kebbe Housing conditions are extremely poor, even by African shantytowns standards. All houses are built of non-permanent materials. Walls are typically made of reused wood from wooden containers, while roofs are second-hand corrugated iron sheets. Other materials, such as reused oil drums or fabric, are also used. There are no toilets but poorly made latrines, which not all families can afford, and hygiene conditions are very poor as a result. The drinking water supply comes from 5 public taps located in the vicinity of the kebbe, while water retailers serve the inner kebbe with donkey carts. As a result of scarcity, the price of water to the final user is one of the highest in the world at US$7 per cubic meter. There is no electricity and domestic power is obtained from charcoal, kerosene, and car batteries. Details, including photographs, are given in Chapter 5 of the RAP. Resettlement and compensation packages Eligibility for resettlement and compensation is based upon the census mentioned above; any household that has been identified as owning a structure that will be affected by the project will be eligible for a resettlement and compensation package. The resettlement area is located next to the existing kebbe. This mininiizes disruption: social links will not - 110- be hindered by the relocation, and people will remain as close to employment opportunities as they used to be. This area is 50 hectares in surface. A detailed plot pattern has been developed by Urbaplan for the relocation area. It will accommodate 2,300 plots of 15x8m minimal dimensions. Wider parcels are also foreseen for commercial activities and housing. The center of the relocation area is at present occupied by a primary school, which will be expanded to accommodate more pupils. Paved streets, public lighting, run-off sanitation, and drinking water supply will be provided according to the same pattern and standards as in the upgraded kebbe. Details on the resettlement area are given in Chapter 6 of the RAP. The resettlement and compensation package offered to all displaced owners is the following: * one 120 sq.m. plot on the resettlement area; this plot will be paid for by the relocated household at usual conditions, namely UM36,000 (US$140), with a two-year grace period; * a standard compensation against the cost of moving of UM30,000 (US$115) per household; * additional compensations for possible concrete slabs or latrines of UM10,000 (US$38), where relevant. It is of paramount importance to avoid land speculation, a result of which might be that resettled households sell their relocation plot and return to squatting in another place as illegal occupants. To this effect, land titles will be awarded after the two-year grace period only to those resettled households that will have actually developed the plot and are physically dwelling there. Details on resettlement and compensation packages are given in Chapter 7 of the RAP. - 111 - Organizational arrangements for the implementation of the RAP The following institutional arrangements are proposed: The Mayor of Nouakchott The Home Secretary The Ministry of Finance The Ministry of Works The Commissioner - Human Rights and Poverty Alleviation Steering and guidance: Comite Interministeriel de suivi du Plan Directeur de la Ville de Nouakchott Executing Agency: Urban Planning Agency of Nouakchott (in the course of constitution) Attribution and Compensation r =Commission Implementation: Specialized Project Task Force Organizational arrangements are detailed in Chapter 8 of the RAP. Grievance procedures An amicable dispute settlement mechanism, which will involve the aggrieved affected person, will be put in place. An independent body, set up under the Mauritanian constitution, the Mediator of the Republic, will participate in this mechanism. Grievance mechanisms are presented in Chapter 9 of this RAP. Internal and external monitoring and evaluation The objectives of intemal monitoring and extemal evaluation are the following: * identify affected persons who might get into specific difficulties as a result of the - 112- Compensation/Resettlement process; and * provide a safety mechanism and appropriate responses addressing these situations (see Vulnerable People). Monitoring will take place five years after the end of the active resettlement phase, under the responsibility of CDHLCPI. Evaluation procedures are planned. External evaluation will take place to ensure that the objectives of this RAP and the applicable requirements have been fulfilled. Independent auditors will evaluate the implementation of the RAP during the implementation phase, and results will again be evaluated after a sufficient period of time (2 years) in terms of both physical and socio-economic indicators, with the initial socio-economic information gathered as part of the census exercise used as baseline. The monitoring and evaluation mechanism is detailed in Chapter 10 of the RAP. Assistance to vulnerable people Vulnerable people include: * Disabled people or people suffering from serious illnesses, and elderly persons; and * Economically vulnerable persons, such as unemployed women. Assistance shall take the following forms, depending upon vulnerable peoples' requests and needs: * Assistance in moving: providing vehicle, driver and facilitation at the moving stage, providing ambulance services for disabled persons during moving; - Assistance in building: providing materials, workforce, or building houses; and * Health care, if required, at critical periods: moving and transition period. The assistance to vulnerable people is detailed in Chapter 1 1 of this RAP. Cost of the RAP - Time schedule for implementation The total cost of the RAP is estimated at UMl .1 billion or US$4.2 million. This amount incorporates the cost of works on the relocation area, which is also taken into account in current estimates of the general cost of the Nouakchott sub-component of the UDP. Details on the RAP cost are outlined in Chapter 12 of the RAP. It is planned that the active phase implementation of the RAP will need about 9 months, not inclusive of above-mentioned monitoring actions. A detailed list of tasks, together with a comprehensive time-schedule for implementation, is provided in Chapter 8 of the RAP. - 113- Additional Annex 13 Letter of Sector Policy (Translated from the French original version) Ministry of Economic Affairs and Development Office of the Minister Nouakchott, June 7, 2001 Mr. James D. Wolfensohn, President The World Bank 1818 H Street NW Washington, DC 20433 United States of America Sub*ect: Letter of Development Policy for the Urban Sector Dear Mr. Wolfensohn: 1. In the light of the fruitfal and positive dialogue between our Government and its development partners, particularly during the development of various structural adjustment and sectoral programs, we would like to outline the main features of our policy for the development of the urban sector and describe the strategy and program of action we will be implementing in this field during the period 2001-2005. 2. Before indicating the broad outlines of this policy, we wish to place it in the current context. 1. GENERAL CONTEXT 3. The Government of the Republic of Mauritania, with the support of its development partners, has undertaken a vast program of macroeconomic and structural reforms designed to reduce poverty. 4. Accordingly, the Government has elaborated a national poverty reduction strategy to the years 2010 and 2015 incorporating a set of complementary but mutually reinforcing approaches targeting the following objectives: (i) accelerate economic growth and strengthen the competitiveness of the economy; (ii) improve poverty indicators rapidly; (iii) promote balanced regional development and sound regional planning; and (iv) promote equity and full popular participation. 5. With these objectives in mind, for a number of years the Government has been adopting important measures targeting most sectors, with the result that various programs have been launched to improve the living conditions of the population. However, the attention and programs devoted thus far to the urban sector have not been commensurate with the constraints and opportunities involved. Aside from the Urban Infrastructure and Pilot Decentralization Project financed by the World Bank and similar programs which made it possible to identify urban infrastructure problems and introduced the first urban planning initiatives, most other sectoral programs have focused on developing social infrastructure or infrastructure - 114- specifically for schools, health facilities, water supply facilities, and access roads. Although the population has welcomed these efforts, the investments were far below actual requirements. Urban growth has therefore continued without any planning, with typical results: unhealthy living conditions, lack of infrastructure, influxes of poor rural inhabitants, and limited ad hoc interventions. 6. Recognizing the problems involved, and the opportunities cities offer as a driving force for economic development, since 1997 the authorities have been conducting an in-depth analysis of the urban sector and its growth prospects. Accordingly, major studies and consultations open to all the parties involved were conducted and thematic groups were established. These initiatives led to the formulation of policies and strategies aimed at reducing deficits and disparities with respect to infrastructure, mastering the challenges of urban growth, and increasing the contribution by regions, municipalities, the private sector, and communities to the planning process and the implementation of urban development programs. 7. This letter of development policy for the urban sector describes the sector succinctly and outlines the strategies and programs of action the Government plans to implement in the coming years. II. THE CURRENT URBAN SECTOR 8. Mauritania - with a current population of approximately 2.5 million inhabitants - has experienced rapid and uncontrolled urbanization for the past three decades. During the period 1962-1997 the urban population increased from 4 percent to 62 percent of the total population, the result of a massive rural exodus spurred by successive periods of drought. In 1998 the population of Nouakchott and Nouadhibou, the country's two largest cities, was, respectively, approximately 700,000 (virtually one-third of the total population) and 95,000. The remainder of the urban population lives in 28 urban centers, including the 11 regional capitals. The population of Mauritania's urban centers has thus continued to increase, exerting pressure on already inadequate public utilities and infrastructure (transportation, water supply, electric power, health, education, housing, etc.), the level and quality of which have not kept pace with the rate of population increase. 9. As regards the institutional impact, this rapid urbanization was not accompanied by an increase in the Government's urban planning and management capabilities. Urbanization has been largely a spontaneous phenomenon which the authorities neither planned nor supervised. Under the pressures of demand, urban planning was limited to the creation of standardized lots and the allocation of undeveloped, and even non-existent, plots. Thus, in the absence of regularized land development, the people have taken over unregulated land. 10. This urbanization pattem, coupled with anarchic urban infrastructure development, has had an adverse impact on the living conditions of the inhabitants of urban centers: rapid and haphazard establishment of squatter settlements, significant expansion of cities outside their borders (especially in Nouakchott), and job shortages. Environmental problems have also worsened, for example, salinity, silting, and sanitation and waste disposal problems. This situation has made provision of infrastructure to these districts difficult and costly. In Nouakchott, for example, nearly 38 percent of households live in under-equipped outlying districts without basic urban services. The situation is similar in other cities, though to a lesser degree. 11. The situation with respect to land management and allocation of land in urban centers is as follows: (i) municipalities have no control over the public land market since they are not involved in land management; (ii) the authorities empowered to allocate urban land (Ministry of Finance and territorial governments) have considerable room for maneuver; and (iii) decision-making regarding public lands and land management in - 115- general is overly centralized and local communities are excluded from the lot planning and allocation process. These constraints are compounded by the lack of a land information system and a fornal land market, a lack of coordination among the government entities involved, overlapping responsibilities, and inadequate community resources (the tax collection rate is approximately 40 percent) and capabilities. In addition, the existing legal framework goveming land tenure and urban development is incomplete and has not been adapted to the prevailing situation. It was designed for centralized management and has discouraged the emergence of private planners and real estate developers. Moreover, legislation governing land tenure does not allow rapid mobilization of land for urban expansion. 12. The decentralization policy launched by the Government in 1986 under the Economic and Financial Recovery Program (PREF) called for the establishment of municipalities as local governments that are financially independent legal entities under public law. Municipalities were therefore established in the 13 regional capitals in 1986, in the 32 departmental capitals in 1987, and in the rest of Mauritania in 1988, for a total of 208 municipalities. Although significant progress has been made regarding the elaboration of legislation and regulations, implementation of the decentralization process has been stymied by various obstacles preventing the districts from fully playing their role in planning and implementing urban development programs. These include: (i) inadequate human and financial resources; (ii) weak administrative organization at the municipal district level; (iii) the absence of a clear delineation of state and municipal district responsibilities; and (iv) the districts' poor management and technical capabilities. 13. The key objectives of the territorial planning arrangements devised in 1990 were to: (i) keep inhabitants in their terroirs** Translator's note: A terroir is the land area of a community bound together by culture or traditions, and which can correspond to one or several villages. or regions of origin by creating core urban development regions; (ii) develop the river valley; and (iii) ensure the, qualitative development of Nouakchott. 14. With these objectives in mind, over the course of the past decade the authorities launched a vast rehabilitation and investment program which led to the implementation of road infrastructure projects in urban and periurban areas, construction of earth stations for satellite communications, electrification of 15 towns in the interior, expansion of the Nouakchott and Nouadhibou electric power plants and networks to cover outlying districts, and development and construction of infrastructure for schools and health facilities. 15. Particular emphasis was placed on the urban water supply subsector, and the following activities were carried out: (i) improvement of Nouakchott's drinking water supply system via the construction of six wells in Idini, increased storage capacity (a 1,000-cubic meter water tower and a 5,000-cubic meter in-ground reservoir) and the rehabilitation and extension of the Nouakchott-Idini distribution network and water main; (ii) upgrading of Nouadhibou's water supply system via the rehabilitation and extension of the network, mainly in outlying districts; (iii) provision of safe water to Ajoun and Atar; and (iv) safe water supply studies for ten additional towns. 16. The urban and interurban transport subsector also got a significant boost from the policy to liberalize the sector introduced in the mid-1980s. 17. In order to promote low-cost housing, SOCOGIM [the public land development company] built 2,096 low-cost units and provided sanitation services to 2,173 plots. 18. The various urban development and decentralization projects implemented with the support of - 116- development partners have helped to promote economic and social development in Mauritania's cities. This was accomplished via infrastructure works and equipment provided by local small and medium-sized enterprises (SMEs) in the building and public works (BPW) sector. A specialized agency, AMEXTIPE, was established to: (i) help fight poverty and underemployment; (ii) promote participation by SMEs in the BPW sector; (iii) build essential socioeconomic infrastructure for the beneficiaries (the central Government, municipalities, etc.); and (iv) support decentralization. These programs yielded positive results in terms of social infrastructure, the environment, the urban road network, community parapublic infrastructure, and capacity building for municipalities, at a cost of approximately UM 4.5 billion. 19. Major urban development activities are now under way as part of the national poverty reduction program, with the support of NGOs and district associations. The objectives of these initiatives are to: (i) create new job opportunities in urban and periurban areas experiencing rapid population growth by establishing mechanisms to encourage private investment; (ii) help municipalities build or rehabilitate urgently needed primary urban infrastructure; and (iii) provide urban municipalities with the required infrastructure management tools. 20. The State invested a total of approximately UM 37.4 billion for territorial planning between 1990 and 1999. Road infrastructure alone accounted for some UM 19.3 billion, or nearly 52 percent of investments allocated to the sector during that period. 21. The strategies and programs which were developed proved to be inadequate, given the scope and rapid pace of urbanization, the heavy public demand for basic services (especially in the poor districts of Nouakchott and Nouadhibou), and the extreme shortage of basic infrastructure in the regional capitals. Moreover, these strategies did not adequately incorporate objectives relating to economic development and poverty reduction and failed to establish effective urban and land tenure management systems, strengthen the capabilities of those involved, or instill accountability in urban stakeholders. III. Objectives and strategies 22. In order to overcome existing problems and ensure sustainable urban development, the Govemment plans to implement a coherent urban policy in the coming years covering all aspects of the sector and taking due account of progress achieved as a result of the reforms introduced since 1986, the current situation characterized by rapid urbanization, and the financial resources and management capacity of the State. 23. The major components of the new urban policy are as follows: (i) urban structuring and densification; (ii) district restructuring and provision of infrastructure, especially in slums; (iii) job creation activities, particularly in poor districts; and (iv) establishment of a link between urban development strategies and the economic development of cities. 24. The Government's primary urban development objective is to ensure harmonious territorial planning and balanced regional development. To achieve this goal it will be necessary to: (i) provide regional capitals with a coherent frame of reference for their development; (ii) strengthen national (central Government, municipalities, etc.) urban management capacity; (iii) reduce urban unemployment; (iv) improve access of economic operators and the population to essential infrastructure and community services; (v) improve living conditions in underprivileged districts; (vi) combat land speculation and illegal occupation of urban spaces by laying the necessary groundwork for the development of a formal real estate - 117- market and genuinely involving local governments in land management; and (vii) promote the involvement of private developers in the establishment of serviced lots and low-cost housing. 25. In more general terms, the task ahead will be to: (i) improve the urban living environment, particularly for low-income households; (ii) promote economic activity and employment; and (iii) develop management capacity with respect to urbanization, land tenure, and decentralization. The urban development policy will also focus on linking the country's various regions and slowing the current pace at which inequalities among cities are increasing. 26. To achieve these objectives, the Government's strategy will focus on: (i) restructuring slums in Nouakchott and Nouadhibou and integrating them into the urban fabric; (ii) providing basic economic infrastructure (water, electricity, telecommunications, and sanitation) to all regional capitals in order to sustain economic activity, creating jobs, and regularizing land tenure to benefit low-income households in these zones; (iii) improving housing in outlying districts and creating microenterprises; (iv) servicing land to prepare it for division into lots, and reforning arrangements for urban and land management and land registration; (v) servicing poor districts via a labor-intensive works program; (vi) making municipal districts accountable; and (vii) building urban roads and paths. 27. With these objectives in view, the Government will define the complementary roles of all stakeholders (the State, municipal districts, community associations, the private sector, NGOs, etc.) and ensure that they coordinate their efforts, and will support and strengthen the link between national, regional, and local urban management authorities. 28. At the national level, the Government plans to introduce a set of reforms to (i) improve the institutional framnework; (ii) mobilize resources for urban development and transfer resources to the sector; (iii) enhance the urban environment; (iv) revise and adapt land tenure legislation; (v) promote the housing subsector; (vi) foster direct state intervention to benefit the urban sector; and (vii) strengthen the decentralization policy. 29. The following steps will be taken at the institutional level: (i) adaptation of existing texts in order to take new stakeholders in the urban development sector and the concerns of the poor into account; (ii) updating and strengthening of urban management instruments and introduction of new tools; (iii) participatory elaboration of an outline for national territorial planning; and (iv) establishment of a framework for consultation on and monitoring of urban development policy. 30. The geographical situation of most cities, the small size of the domestic market, and inadequate infrastructure pose obstacles to urban development. In order to remedy this situation and increase the financial resources available to municipal districts the Government will: (i) develop and implement a major investment program targeting infrastructure required to promote economic activities that will create jobs; (ii) significantly increase state resource transfers to municipal districts (through the Regional Development Fund) on the basis of their needs and programs; and (iii) encourage local governments to pool their resources in keeping with the "inter-communalite"*** Translator's note: Under such arrangements, municipal districts can form alliances to carry out joint economic activities (http://www.mauritania.mr/ami/dossiersFrl O.htm) *formula. 31. The following steps will be taken to improve the urban environment: (i) preparation of a master sanitation plan for each urban zone reflecting generally accepted standards in the field; (ii) development of - 118- suitable household collection and treatment systems for household garbage, wastewater, and solid waste; (iii) regulation and standardization of private and community septic tanks; (iv) establishment of a national coastal dune monitoring observatory, particularly for Nouakchott; and (v) establishment of an environmental education program. In order to increase the investment capacity of the public sector, the Government will encourage private operators to participate in sanitation projects, especially in the cities covered by the program, the areas of Nouakchott and Nouadhibou where artisanal fishing is practiced, and markets built under the urban development program. 32. With a view to clarifying the responsibilities of the various actors concerned with land tenure issues, promoting greater involvement by local governments with respect to land allocation, and simplifying procedures for the allocation of real property rights (in order to facilitate access of landowners to credit), the authorities will continue their efforts to update land tenure legislation. 33. In order to increase income from and the efficiency of land, the Government will reduce registration fees, periodically review taxes on land and housing, and strengthen tax collection efforts. 34. Under its policy for the housing subsector, the Government will: (i) introduce appropriate instruments to finance housing, especially for middle- and low-income households; (ii) conduct a population census in squatter settlements and establish a program to regularize land tenure; and (iii) expand low-cost housing programs and promote self-help housing along the lines of the twize program. In addition, as part of the Poverty Reduction Action Plan (PALCP) in urban areas, the Govermment plans to build 3,900 low-cost dwellings in Nouakchott's outlying districts. The Governmnent will also continue to improve the legal and regulatory framework for real estate developers. 35. In addition, offices responsible for the following subjects will receive the material and financial resources needed to prepare an updated inventory of each region and determine what kind of assistance they require from the State: (i) Territorial Planning and Regional Action; (ii) Buildings, Housing, and Urbanization; (iii) Local Governments; (iv) Property, Stamps, and Registration. 36. The transport policy will focus on opening up isolated towns and regions and promoting productive activities there in order to make them more attractive places to live. This is essential in order to prevent the migration patterns of the past from recurring. 37. Inasmuch as municipal districts have limited resources, the Government's efforts will focus on improving the quality of urban social and economic infrastructure and services (including health, education, and water supply) that are likely to make small and medium-sized towns more attractive and on resolving urban environmental protection problems (for example, sanitation and waste treatrnent services). 38. In order to help municipal districts achieve their established objectives, particularly with respect to collections, expenditures, and savings, the Government reaffirms its readiness to move ahead with and consolidate the decentralization process and increase the deconcentration of state services. Such action is expected to facilitate the effective transfer to the districts of various planning and infrastructure prerogatives currently exercised by deconcentrated state services. - 119 - 39. Accordingly, municipal contracts covering the period 1999-2001 have been concluded between the State and the municipal districts of Nouakchott and the 12 other regional capitals. These contracts, which set out the respective responsibilities of the State and the municipal districts, are designed to: (i) promote the rehabilitation of municipalities by increasing collections, controlling expenditures, rationalizing the management of municipal services, and maintaining and optimizing the use of district property; (ii) increase the level and quality of services provided to users by increasing the savings rate and implementing projects forming part of the urban reference programs (PUR) adopted by the municipal councils. 40. Important steps will also be taken to improve the management of municipalities. In particular, the responsibilities of mayors and municipal districts will be clarified and the districts' technical capacity will be strengthened. 41. At the regional level, the Government will promote the establishment of consultative planning and development structures in order to ascertain municipal and district requirements concerning land for housing, the number of dwellings, and infrastructure, and to monitor urbanization and construction. To this end, an Economic Development Commission chaired by the wali (govemor) will be established in each region mainly for the purpose of preparing regional economic development plans and creating core development zones. Accordingly, Consultative Committees on Urban Development Strategy incorporating all stakeholders have been established in Nouakchott and Nouadhibou. 42. Regions will also become legal entities and will be able to elect regional councils. With these new bodies, the regions should be able fully to play their role as intermediaries between the central Govemment and the municipalities. They will also be given substantial institutional, human, and financial resources. 43. Finally, major steps will be taken to ensure the development of urban infrastructure and services: (i) preparation of a detailed and comprehensive inventory of existing urban infrastructure and services and establishment of minimum equipment standards for economic and social infrastructure and urban services; (ii) establishment of programs to provide essential equipment to slums (in Nouakchott, Nouadhibou, and the major regional capitals) under city contracts between the State and municipalities; and (iii) introduction of arrangements to ensure participation by the target population and users. 44. At the local level, the authorities' objective is to promote the gradual development of a network of dynamic cities which fully integrate their poor districts and are capable of sustaining economic development. The Government will therefore focus on: (i) strengthening financial structures; (ii) enhancing urbanization and the urban land tenure process; and (iii) promoting participatory approaches. 45. Given the municipalities' meager financial resources (salaries account for nearly 80 percent of the budget) and the need to ensure that equipment to be transferred to them will be maintained more carefully, the authorities plan to alter the existing arrangements for fmancing municipalities by establishing a general appropriation for each expenditure category (operations and equipment). The Government will simultaneously introduce a program to completely overhaul the local government tax system, the main objective being to increase tax collections by determining each city's tax base more accurately and strengthening mechanisms for monitoring and collecting user charges and taxes. - 120- 46. The establishment of municipal services to monitor street addressing and draw up taxpayer lists will also help to enlarge the tax base and improve collections, thereby providing municipalities with significantly more resources. 47. The fact that Mauritania's cities are spread out and that little densification has occurred has substantially increased the cost of installing equipment and complicated cost recovery for municipalities. The Government's development policy will therefore focus on: (i) preparation of municipal development strategies for all regional capitals; (ii) phased preparation of master urban development plans for all cities; (iii) development and implementation of local programs to support microenterprises and income-generating activities targeting highly vulnerable groups; (iv) development of vocational training and adaptation of the curricula to market requirements; (v) establishment of conditions for maintaining open spaces and equipment; and (vi) promotion of district associations. 48. The authorities also plan to reform the legal and regulatory framework governing land tenure. Important steps have already been initiated to provide greater security of tenure to occupants of rural and urban areas who do not have title to the property they occupy. The reforms now under way will include a provision prohibiting the transfer of any land other than lots established under city master plans. 49. The restructuring and rehabilitation process in squatter settlements will also include planning of extended areas, land consolidation in the settlements, and clarification of tenure regularization procedures. 50. In order to prevent the establishment of new slums, arrangements will be put in place for the gradual transfer of land to municipalities for preparation as new serviced land. 51. With a view to ensuring the active and coordinated participation of all the actors involved in city planning and the regularization of the legal framework governing tenure in the slums (deconcentrated state services, local bodies, inhabitants, etc.), the authorities will encourage participatory management in these districts, starting with existing associations. The Government also plans to strengthen the legal and regulatory environment in which grassroots associations and community organizations will operate. IV. Action plan: 52. The following annex presents the specific measures required to achieve the objectives described above with respect to urban development, land tenure, and decentralization. The overall objective of establishing an environment conducive to the development of income-generating activities to combat urban poverty is described in the Government's Poverty Reduction Strategy Paper (PRSP). Nouakchott, Sincerely yours, /sl Mohamed OULD NANY ls/ KAMARA Aly Gueladio Minister of Economic Affairs and Development |Minister of Infrastructure and Transport - 121 - Annex: Action Plan ________ _ VIStrengthening implementation ca acit_ Implementation Measures Description Activities Responsible party period Establishment of an The agency will be responsible for: Establishment of the agency Urban Development a) implementing UDP components Preparation of manuals of Agency (ADU) in conceming Nouakchott; (b) procedures Govemment 2001 Nouakchott. carrying out the planning process; Staff training and (c) regulating urbanization |Acquisition of equipment within Nouakchott Mobilization of Provision of the financial resources Timely provision of UDP sufficient budgetary needed to implement program counterpart funds, compensation resources activities for affected inhabitants, microcredit funds, and counterpart funds for Govemment 2001-2002 works, supplies, and services, including those required for the first year of ADU operations Restructuring of SOCOGIM's tasks to be reviewed Adoption of measures to overhaul SOCOGIM in the light of the audit and adapt SOCOGIM Ministry of recommendations Infrastructure and 2001 Transport (MET)/SOCOGIM Promoting private Promotion of private sector Amendment of articles I and 2 of MET 2001-2002 sector involvement in participation in further developing Act No. 99.031 dated July 20, 1999 the production of improved land and in sanitation conceming real estate developers in improved land and works order to encourage a wide variety construction of low- of private initiatives. Clarify rules cost housing and goveming access to the profession sanitation works and specify incompatibilities (employment in the civil service, representative of parliament) . Marketing (on a pilot basis) of lots or blocks slated for development and/or housing construction by the private sector * Clarification of procedures for subdividing land . Clarification of procedures for mobilizing land for private developers . Intensification of training for enterprises participating in the Decentralization and Urban Infrastructure (DIU) project Private sector participation in the preparation of sanitation June 30,2002 and solid waste collection strategies in cities covered by the Urban Development Program Establishment of a cost recovery mechanism for sanitation works June 30,2002 Provide concessions to private operators for sanitation systems in artisanal 2002 fishing zones in Nouakchott and Nouadhibou, and in markets built under the program. - 122 - Strengthening the Promotion of a participatory Improvement of the legal and Ministry of Interior, participatory approach to the consolidation regulatory framework governing Post, and approach in urban and/or improvement of squatter grassroots community associations Telecomminications development settlements and under-equipped and organizations (MIPTYMET/Office 2002 districts of the Commissioner for Human Rights, Poverty Reduction, and Inclusion (CDHLCPI) _______________ 11/ Urban planninj-g _ _ _ _ __ _ _ _ _ _ _ Implementation Measures Description Activities Responsible party Deriod Strengthening of Provision of human and material . Institutional support will be technical, human, and resources the Department requires provided on the basis of studies MET 2001-2005 legal capacities of the in order to discharge its Urban Development responsibilities Department Dissemination of Stakeholder participation in the Assessment of strategy participatory urban preparation of urban development preparation experience in planning methods plans is increasingly becoming the ouakchott, Nouadhibou, and norm. Such participation ensures Ka6di higher quality, guarantees plan * Elaboration of urban strategies for acceptance, and facilitates at least three additional cities mobilization of cities' productive . Establishment of mechanisms for 2001-2002 forces for plan implementation onitoring strategies adopted by cities Improvement of Pilot participatory planning Municipalities access to safe water Water supply service to ctivities in districts slated for concerned/MET/ in Nouakchott's Nouakchott's slums is inadequate estructuring and documentation of MIPT slums districts' experience Development of systems to ensure June 2002 secure adequate quantities of water for slums in Nouakchon Promotion of arrangements for June 2002 private management of standpipes and sanitary equipment -123 - _ III/Regulatoryvframework and tools for manazing urban developmen Implementation Measures Description Activities Responsible parties period Implementation of Past experience has clearly Reformn of the legal framework reforms to ensure demonstrated various dysfunctions for urban development in order to optimum in the legal framework goveming clarify roles and responsibilities management of the urban development. These should * Prohibition against subdividing urban environment be eliminated pending the overhaul public places and strengthening of the legal - Prohibition against occupying framework. non-allocated land in urban areas . Adoption of stricter rules goveming land use changes as defined in land use plans (SDAU) and structuring plans MET/MIPT 2001-2002 . Mandatory review by municipal councils of urban planning documents prior to govemment approval . Clarification of procedures for preparation and approval of urban planning documents . Adoption of a decree goveming community-sponsored improvement activities Preparation of an Existing regulations are incomplete . Preparation and establishment of a urban planning code comprehensive urban law framework MET 2002-2003 Adoption and implementation of instruments implementing the MET 2002 framework law on the enviromnent in urban areas; delimitation and protection of sensitive areas Establishment of Urban planners and managers do . Determine which institution will urban databases not have the information they need manage the database; create perform their work and monitor database urban development. They need . Upgrade cartography services: MET 2002-2005 policy documents, discussion training, equipment, work plan, papers, statistical data, and results expected, and cooperation graphical documents. with private entities Systematization of hese instruments, introduced Systematization of PURs and city urban reference plans under the DIU, are becoming better contracts and establishment of a (PURs) and city known and are starting to show mechanism for monitoring and contracts results. PURs have proved to be updating these tools ery effective investment planning Quantification of objectives ools for municipalities. City established in city contracts contracts specify the obligations stakeholders undertake in order to achieve established objectives and MIPT/MET 2001-2005 roperly implement the plans' programs. - 124- Coverage of other A number of major urban centers . Identification of appropriate urban urban centers by besides regional capitals are centers structuring plans, experiencing significant growth. It . Preparation of PURs, SDAUs, and PURs, and city is important to provide these structuring plans for these centers contracts centers with urban planning and of priority investment 2001-2005 documents and improve the quality programs of their urban planning processes. . Adoption of regulatory framework and implementation of SDAUs 30-juin-02 . Preparation of lot allocation plans MIPT/MET and other documents needed to direct the growtb of these centers and coordinate land tenure management there 2001-2005 . Design of appropriate training programs for urban center staff . Introduction of city contracts in these centers IV/Legalframework and land tenure management tools Implementation Measures Description Activities Responsible party period Adaptation of the Recent studies have revealed Pursuant to ordinance 83.127 legal framework to various gaps and errors in existing dated June 5, 1983, introduction of reflect past texts which should be remedied the legal justification for experience and The legal framework also needs to regulations governing urban objectives currently be clarified to ensure UDP development (article 2) being pursued feasibility. In particular, . Elimination of unsubdivided arrangements should be introduced centers and their replacement with governing the final transfer of centers to be subdivided in phases parcels prepared by developers or at a later stage such as SOCOGIM, and . Introduction of arrangements for clarification is required regarding the transfer of real property rocedures for property enabling developers such as registration, consolidation, and SOCOGIM and other public, securing land tenure in the gazra. community, or private development agencies to acquire land for development, subdivision, construction, and final transfer to end purchasers . Clarification of the specific modalities and procedures necessitated by the above- mentioned arrangements . Clarification ofthe legal MET/MIPTJ framework and specific modalities Ministry of Finance 2002 for consolidating unsubdivided (MF) districts and securing land tenure for heirs . Detailed description of modalities for revoking land sales (decree 2000-089 dated July 7, 2000) and for public utility expropriations Limitations on the number of sales to an individual, by city or wilaya . Detailed description of arrangements for sales to municipalities . Clarification of the legal framework govemiing registration of property. Delimitation and classification of public property and provisions conceming the transfer to municipalities of legal powers and financial and human resources to safeguard such property , Strengthening of measures to _safeguard public property - 125 - Establishment of The lack of geographical . Thorough feasibility study for the geographical information systems makes land national land grid: detailed design, infonnation systems management and registration equipment specifications, and difficult. The UDP envisages the bidding documents establishment of a georeferenced.; . Implementation of the TFN: national land grid (TFN). The grid purchase of equipment, technical ill provide support for all land- assistance, training, and preparation related information. In Nouakchott of operations manuals and updates MET,MF 2001-2005 and Nouadhibou it will plot public . Establishment of two land as well as subdivisions. The decentralized TFN offices in grid will be a repository for data Nouakchott and Nouadhibou conceming all subdivisions, . Preparation of a study on, and consolidated areas, and new introduction of, a land registration parcels, and will evolve over time software application into a comprehensive cadastral map of the two cities. Comprehensive land There are many infill plots in . Preparation of a comprehensive inventories for Nouakchott and the major cities, inventory of vacant land in Nouakchott and other leaving the urban fabric disjointed, Nouakchott indicating physical major cities (land complicating the provision of urban features, ownership status, etc. database) services and transport and . Development of a strategy to MET/MIPTIMF 2002-2004 increasing related costs. A encourage land development in comprehensive inventory of these accordance with the SDAU. plots will help determine the best Development of a strategy to June 30, 2002 way to encourage contractors to recover land not developed within a develop the land in accordance with specified time period the SDAU. Preparation of development plans 2002 and a legal framework for protecting strategic coastal zones specifying tenure provisions and ________=_______ ===________________________ land use plans Strengthening Studies have indicated the need to . Increased decentralization of land management capacity strengthen or establish vital management services responsible for land . Establishment of a permanent management. They also secretariat for the National Remote emphasized the importance of Sensing Committee involving municipalities in land . Upgrading of the Property, management and in safeguarding Stamps, and Registration Office 2002-2005 public land, and of ensuring . Support for the establishment of a community participation formal body of licensed surveyors Adoption of a legal and regulatory framework for land transfers, including provisions prohibiting any transfers outside of established METIMIPT/M subdivisions, in accordance with the urban development plan of the city in question and upon approval by the competent authorities 2001-2002 Adoption of a legal framework for land consolidation in sluim areas, including regularization procedures 2001-2002 A Transfers to municipalities (including Nouakchott) of land for UDP subprojects and for new land 2001-2002 development to prevent the establishment of new slums - 126- Increase in financial Unequipped land is sold at prices Regulation of the use of funds retums from land and well below market prices. generated by land sales and use of some of the consideration of ways to increase revenue to finance them by aligning sale prices with urban development market prices, setting aside a portion to finance urban development. l Restrictions on direct sales of unequipped land; promotion of sales through intermediaries (SOCOGIM and other real estate developers) l Reservation of low-priced parcels for poor households, and limitation MF/IPTlMET 020 of sales to one parcel per couple or /SOCOGIM 2022 adult per region . Redeployment of unoccupied land in accordance with SDAUs/structuring arrangements, and sale of such land at prices reflecting their location and the benefits they derive from their proximity to infrastructure . Full recovery of investment costs for serviced sites and adaptation of levels of servicing to the purchasing power of households . Establishment of a tax on vacant June 30, 2002 land to discourage speculation and encourage development 2003-2005 Reduction of land registration taxes Revision of land and housing taxes and improved tax collection Updating of Mortgage legislation is very old Updating of the decree on mortgage legislation (1 932) and most potential buyers mortgages dated July 26, 1932 and MF 2002 are unaware of its existence education of potential buyers. - 127- V/Strengthening decentralization Implementation Measures Description Activities Responsible party period Establishment of The lack of intermediate structures Establishment of the legal and regions as legal between the State and institutional framework for entities with elected municipalities poses a major endowing regions with the status of regional councils obstacle to decentralization and legal entities under public law development. Strengthening regional organization would extend state supervision while allowing flexible management consistent MIPT/MF 2002 with regional development policies. To enable them to play their rightful role as intermediaries, the regions would benefit from having the status of legal entities with elected regional councils and participating actively in the urban _development process. Reform of the R eonal Develo ment Fund (FRD) Implementation Measures Description Activities Responsible party period Increased transfers by Municipalities' resources are Establishment of a legal and the State to local meager and are not commensurate regulatory framework to provide governments (through with their responsibilities. financial support to local the FRD) govemments . Phased increase in this support: IT20220 UM 600 (2002), UM 1,000 (2003), MIPT 2002-2004 and UM 1,500 (2004) . Strengthening of the human and logistical resources of the Local Governments Office (DCL)_ . - Strengthening of the This young association needs to be Establishrrent of an appropriate Mauritanian Mayors' strengthened so that it can play a institutional framework Association (AMM) more active role in managing local development. MIPT/AMM 2002-2005 - 128- Reforms to redistribute responsibilities between the State and municipalities Strengthening the role Enable mayors to assume all .Preparation of a study on the of mayors as public responsibilities and duties entrusted establishment of formal municipal authorities o them and fulfill their role as police forces in municipalities police officials where this is justified by the size of the population .Amendment of decree No. 80.166 setting out the responsibilities of local central Govemment authorities MlPT 2003 . Adoption of a decree establishing the scope of mayors' police powers and the conditions under which they may be exercised Adoption of a decree establishing the responsibilities and powers of mayors and municipalities Strengthening of municipalities' technical capacities Strengthening In those fields in which both the .Determinationofmayors' mayors' powers and State and the municipalities are responsibilities in the fields of Tesponsibilities with involved, their responsibilities need health, hygiene, public health, respect to social to be clarified and defined. education, promotion of culture and MIPT 2002-2003 issues sports, supervision of markets, management of public property, etc. Municiwal tax reforms Increasing resources The objective is to fill certain gaps Reform of municipal tax systems and strengthening in the municipalities' ability to in order to establish comprehensive municipalities' intervene local tax systems adapted to the responsibilities with municipalities' needs respect to taxes . Implementation of measures required to increase resources allocated to municipalities, bearing in mind the local tax potential. This will include one or more of the MIPT/ following instruments: the housing municipalities 2002-2003 tax, the business activity tax, and concernedr/MF fees for services rendered. . Strengthening of municipalities' tax collection capabilities . Extension of local accounts to rural municipal districts . Street addressing in major cities (capitals of wilayas and other large urban municipal districts) -129- Additioiial Annex 14 Slums of El Mina 130- IBRD 31361 -8' 1-' - 4 P R ZRY ROAD, S n ALGERIA MAU;RITANI Tharol URBAN DEVELOPMEN PROR o -0 -- INTERATIONAL / X l 4yendorsment orcceptene af 2630h 2- w; - o; /t S PA N I S H j t ZEMMOUR z A 2j°~~~~~~~~~~~~~~~M L b D., Tnm6nuctou J L X ,/- u 0 C(: ilIES 30 OkrSNGA/ *NIGER KILON1ETERS THE , B 22° PRIMAR; RO B|S$Att.ADRAR! 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