Document of The World Bank FOR OFFICIAL USE ONLY Report No: T7666 APPENDIXES TO THE TECHNICAL ANNEX FOR A PROPOSED CREDIT IN THE AMOUNT OF SDR 67.5 MILLION (US102 MILLION EQUIVALENT) TO THE REPUBLIC OF ANGOLA FOR AN EMERGENCY MULTISECTOR RECOVERY PROGRAM -PHASE 2 April 24,2007 Transport Group AFCS2 Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contentsmay not otherwise be disclosed without World Bank authorization. CURRENCYEQUIVALENTS (As of March 31,2007) SDR 1.00=US$1.51 US$1.OO =Kwanza 79.77 FISCALYEAR January 1to December 31 ABBREVIATIONS AND ACRONYMS ADB African Development Bank CFB Caminho de Ferro de Benguela (Benguela Railways) CFL Caminho de Ferro de Luanda (Luanda Railways) CQS Consultant QualificationSelection ECP Estratkgia de Combate a Pobreza (Poverty Reduction Strategy) EDEL Empresa de Distribui~Eode Electricidade de Luanda (Power SupplyAuthority of Luanda) EMRP Emergency Multisector Recovery Program ENE Empresa Nacional de Electricidade (NationalPower SupplyAuthority) EPAL Empresa de Agua da Provincia de Luanda (Water SupplyAuthority of Luanda) FA0 Food and AgricultureOrganization FMR Financial Monitoring Report GDP Gross domesticproduct HIPC Highly Indebted Poor CountriesInitiative IBRD International Bank for Reconstructionand Development ICB International CompetitiveBidding ICS Individual Consultant Selection IDA International DevelopmentAssociation IMF International Monetary Fund INEA Instituto Nacional de Estradas de Angola (National Authority of Roads) LCS Least Cost Selection LIB Limited internationalbidding LICUS Low-Income CountriesUnder Stress NCB National competitivebidding NGO Nongovernmental organization PMIU Project management and implementationunit PPMRRP Priority Phase MultisectorRehabilitationand Reconstruction Program QCBS Quality and Cost Based Selection SENSE Sewiqo National de Sementes (National Service of Seeds) SSS Single-Source Selection TSS Transitional support strategy UNDP United Nations DevelopmentProgram UNITA Uni6o Nacional para Independ2ncia Total de Angola (National Union for Total Independence of Angola) WHO World Health Organization Vice President: Obiageli K. Ezekwesili Country Director: Michael Baxter SectorManager: C. Sanjivi Rajasingham Task Team Leader: Abdelmoula Ghzala FOR OFFICIAL USE ONLY REPUBLICOF ANGOLA: Emergency Multisector RecoveryProgram. Phase 2 APPENDIXESTO THE TECHNICALANNEX Contents Appendix 1:Phase 2 Project Costs and Financing............................................................................. 1 Appendix 2: Rural Development........................................................................................................ 12 Appendix 3: Decentralization and Supportto Local Development.................................................... 13 Appendix 4 :Transportand Roads...................................................................................................... 18 Appendix 5: Electricity .................................................................................................................... 2 8 Appendix 5: Electricity ...................................................................................................................... 2 9 Appendix 7: Urban servicesand infrastructure................................................................................... 40 Appendix 8: InfrastructureStrategiesand Private SectorParticipation.............................................. 42 Appendix 9: Procurement Assessment and ProposedArrangements.................................................. 46 Appendix 10: Financial Management Assessment and Proposed Arrangements ..............................54 Appendix 11:Procurement Plan......................................................................................................... 6 6 This document has a restricted distribution and may be used by recipients only in the performance of their official duties.Its contents may not be otherwise disclosed without World Bank authorization. Appendix 1: Phase 2 Project Costs and Financing EmergencyMukector Recovery Program Phase 2 - Components Project costs Summaly (US million) Pmiect Components % %Total Foreign Base Local Foreign Total Exchange Costs A. Rural developmentand deliveryof SocialServices 5 6 12 56 10 B. Rehab~Witionand reconstructionof criticalinfrastructure 33 60 93 64 79 C. Sector developmentstrategies and strengtheningof human and institutional capacities 3 5 8 65 7 D. Management, monitoring,evaluationof Phase 2 Total Baseline Costs PhysicalContingencies Price Contingencies Total Project Costs Note: Figures may not add up to totaldue to rounding Fmrgency Mtrksector Kccowry Progtnrn Phase 2 - Cnmpctnenlr Pmjcct Ltailed costs ---------- - Lac$ Fareign Total ; I ProjectCost by Cornnumat (trSSn~illba) I A. Rural dc%eloprne"Pand delivery ofSuciaf Srvieev I Kur8.af I)evebprt\cn~ P llcatrl~senxcs 3 I*&c;thon Ttrvrccs Sui)teraEAumi detelopmenl and d e l i v r ~of brislf &mires W. RehttMliitationa& reconstruetion of ctltfeat inhsrrucrure 5 l i h n whseucturt" & \enxes Subtotal Rehabilitation and rt"censtructionof crirical inCasllnreruru t'.Seetur rtereiupnvnt yrrateglrr and strengthening of humanand invtitullonsi rttpnctticv i Asi~\&rtct!iilr $eftordcwktpn1c.n~\tn~tugru&fonnuhtwm 2 Fccfmlcal ahsatrritcc to ithe ~tctt~rt,Envrtrnnluntni ndnilgezncnt & 3 1rammg fut the SCCICW.mmrctr(c$ and eymcrr 4 X)cccnwsfmr~m& httppt~tto kwctf detck~ment Suhcotnt Ector &vetopment stmtegiez and strrngtkning ef httinan and invtitutionai capcities D. Rr~nagctrnnt,mrniMsrring, eraluatien PBmr 2 I Technuat a.ian&tlcufor p17yctmaisagement & 2 Sq'p~rito project mnagcmenl and Prammg 3. C)pmmrg cxpmee li3r P r o ~ ckfiitons@inmtand ~rn&merrtatrotx t 4. I-xprlse & suppfl M demomy Nure F%wresm;t>~ 3mcfd up 10 total &LC to~?tm&tlg % Sote. 'Tra~sporrsccror under Component B rs shown In Tahlrr for memory and s~mplyPOTpresentatran consistencywsth the PPMRRP Note. Elgttres may not add to total due to rounding Emergency Mriltbeclnr Recover?Proyam - Phase 2 Compaenb Project detdled costs A. Rum1 de\efapeat and delivery ofSaeiPl Services 1. Rurrl Dcccbpn~ent 2 Itcalth sertxcs 3. Echcatm-,scnxes Subtotal Ruraf deueloptnenl and defivey of Social SenEcer XI. ReLabUltrean and ~constmctianofcritical Infi.rtstmcture 1. Ttansp~n 2. Roacir:K: Bridges 3. Electmiry 1Water supply 5 Urban rnfiastntcture & ssenxes Subtotal Rehabllita~onand reconstmcPianof criticalintkastnrcture C. Sector development strategies and strengthening alhmwn and instilutionalrrpacitics t ..\s.istancc for sector d e ~ e b p ~ ~slraiegffis fomk$r?n ~ e n i 0.1 0.2 O 3 2 Technral assstance (a Ihc sectors & En+?mnnxntalmnagmcnt 90 0.0 00 3 Tntmn~gfbr the seem ttanrsarles and a g m r s 0 0 00 0 1 IDccer~wl~tioxasuwntolocaldexbpent & C i l O i 0.2 Subtotal Sector ilel eloptnontstralcgies and strcngtkedng of bums and inttihrlionai capacities 0.2 0,4 0.6 D.Mas~gemefit,monbtoring.eelaluationP ~ A2s ~ 1 Tcchnral assstance for project nlsnagement d nlonitonrmg 2. Supprr w projcjccr trxrtnagenrnt atxi training 3, Operarrngc~pe~lses Pr(3~cthlamgemnr and inpkmcnrathon B'nr 1.Experrpse & supgwrt ra demmfng Subtatal Managemen&reonitoring, evrriartian Phase 2 Tetmh Slsekne Costs Phptyscal Cnntmgcnclcn Pnce Contlttgenctcs -- 0.3 0.4 0.6 Total Project Costs 4.0 6.7 10.7 Note. Fl@re.i m y not add rip to t o ~due lo mttndmp i Note. Transport sector under Component B 1s show EnTahfes formemoryand slmply for prcscntatlan eonsIsIenc3 wtth the PPRIRRP -- a . . . .. . Local I.bn?lgu Told % Forr(gu 76 Total --Y r s p n Cwt @CanqwacJ (:S S cPLan E~cbnage 8 m ~ c~ --A .%- Runt devrlopmeet aed detivrry o l k c i & Seniceti 8. Wcaalrilrsrienend rec~~qlructinn ofcritical Lnh.ilatrrrcrure C.kcfur doteiaprnrnl rirstrgie.j a 4 st~e~grhrfiiqtttrman and inslitutlunalcapne af 1 hbr&ldittetie' beLWr dm'~!e$x~~nt l c g ~ ~ , % m fiwlhthw 2 I cchrtral JCLI6tilfiCC io IXE ~ S C CkI I~ntvt~t+n~lxtalmn*~gem~it ~ 1 inutrig for ttlr sector r~rakstrx-sa& dgencrl i 13ccetncralu3twirrSi a1imx)rl I$) kwai d~seklpoer~t Nuit. Transpan sector undcr Comixment X3 1s shawn in Tabtes for merriory dnd simply for prcseramtroncunsraeneS with the PE"h33aRP. Republic of A~gola Em~~gency Muttrsector Recattry Progmm Phase 2 - FinancialSummary {fn USS million qltwcfI~ntf h~vestrnentCosts A contribution Enxrgeitcy Multsecror R~ecoaeryProgam P'tuse2 - Project Costs by Procurement Arrangcn~entv 2. Cso& % Equipmeats 0 1 t 2 to! tlt (a, (I? 3. Consultant & Engineering Services 14 1.1 15 fT?\ (131 (&I) tl) (20) 1 f l @ x ) ,, , * 0thnxetMs o f ~ ~ u r e n e1src81ciectt~lworks and gods be profmd n t t ttrrortgh qlnttattonltisttcgpnrg,conslnllngsenxes, s c m e s oScontracted sfaKnf thc prqcct manafilznt uSF%e. tcchnrcalassarancc $ e w e s , and otllcr cost$ relatccl to (I) ct~erruncn~crawl scict31rnltietlotl nleasurcs and (I) p~sstngproject Fufrcfs to tocal govenulxenrs and .Goods & Equipments i I I t I 6. Operatingandother costs .rot## 12 0 1 13 (8) (81 (1 1 (9 * Qfher mtlwcts of pncuremmt ~tctudutfrcw7l work and g d to bc procured tt~tuugi~nationat sim~mg,comuh~gsenre$,strikes ofcor~rrarredsrafFufttctcproject .n.tai1age.mtYtltoff-ie, tecltnlcaiassistance serwes, and atkr cam rehted 0 (if ~"n~mmnctnwntal socml rnrrigatarionrneasures an8 fillpasslng project f d c to kxsl povcnnncnu and Project C'osh h> Procurenvnt Arrrngcnrcntc -.-- Subproject B jlp US5m i h cquivoknt) Torai toilt Expenditure Catcgoq Pro~wment Metbod (inclu&g iCB NCB 1 Other* I N.1Z.P. Caarbogeaslea) I 1. \\'orbs bi5 .i t 9) 12, Coocls &I Equipments 1 .Qpentting antl otherC O S ~ $ * Qtl-ielcrmeti?& of prwirremcnt ntcI~& cwii works and goods to bc prwtnctf tkrougll natiunaXslwpphg,corsultutg services. services of ronlrdctcd stdfl'of~heprojeer n~btl~gemedt off%+?. tccimucdlasststance sentces, 2nd other costs reiared to (1) et~v~ronilrnet~ralsacxtif tmtgatmn nteasurcs $4(n) pbssmg prqpct Sun& to laoaf go\ernmcnrs arrd Emergency Multlsector Recovery Program - Phase 2 Disbursement by year (in IJS$ million) tFrorldBmmk PY 1 Julp3QJune - FY 2008 :July 1,2007 June 30,2008 - GQA Disbursement Annual I 6 11 10 2 Gu~~lulatr vc I 8 18 28 30 Pcrcentagc 5% 25% 60% 94% 1W?/b IDA Disbursement Total Project Disbursement Note: Figuresmay not add up to total due to roundlng EmergencyMultisector RecoveryProgram - Phase 2 Project Components by Year -- TotalsIncluding Contingencies (US$ Million) Total Including Contingencies -----Total 2007 2008 2009 2010 2011 A. Rural development and delivery of Social Services # 1. Rural Development 2. Health services 3. Education services Subtotal Rural development and delivery of Social Services B. Rehabilitation and reconstruction of critical infrastructure 1. Transport 2. Roads & Bridges 3. Electricity 4. Water supply # 5. Urban infrastructure& services Subtotal Rehabilitation and reconstruction of critical infrastructure C. Sector development strategies and strengthening of human and institutional capacities # 1. Assistancefor sector development strategiesformulation 2. Technical assistanceto the sectors & Environmentalmanagement 3. Trainingfor the sector ministries and agencies # 4. Decentralization & supportto local development Subtotal Sector development strategies and strengthening of human and institutional capacities D. Management, monitoring, evaluation Phase 2 1.Technical assistancefor project management & monitoring # 2. Support to project management and training 3. Operatingexpenses for Project Management and implementation # 4. Expertise & support to demining Subtotal Management, monitoring, evaluation Phase 2 Total Enicrgcncq Sluftrsecrt.trRecovery Pru$prn- Phase 2 PracurernentAcswunts by Year --Totals I~~eltrding Taxes & Contingencies (CS$ tntlllon) I. Subproject A 2. Subproject B Subtotal Worb B. Equipment & Gouds I . Subproject A 2. Subproject 8 Suhraral Equipmnr $t Goods c,Coxlszrltrnt& EngineertagServices 1. Subproject A 2. Subproject B Sub-totalConsultant 6i EngneeringServices U. Training I . Subproject A 2. Subprqrect E3 Subtotal Training Appendix 2: RuralDeveiopment Map: Feeder roads targeted for rehabilitation under the praject in Malanpe and RiP, The cost of works for the rehabilitationof same 600 km of the 748 targeted kmof feeder roads has been estimated at some US$X3 rnillim fiefore taxes and contmgencies), IDA wilt finance some US%9million, about 70 percent aFthe total. Appendix3: Decentralizationand Supportto Local Development Angola is a large country with a profound ethnic, socioeconomic, cultural, and linguistic diversity. Angola is still a centralized State vertically organized. There is a need to set up an institutional governance frameworkto respond to that heterogeneity. Policiesand nationalstrategies Decentralization has been at the central theme in the public and institutional agenda in Angola as have been shownby many public policies and national strategies. Publicpolicies/legalframework. The process has gained enthusiasm since 2001 with the approval of the fundamental principles for the future Constitution of Angola. The Local Administration Act (Decree Law 17/99)assigns more functions to the municipal and communal administration, as well as creating an inclusive and participatory consultative organ made up of each tier of the local Government. In 1999, the Government of Angola put in place an intergovernmental transfer system that guides the allocation of funds from the central to the provincial Government, which on its turn has to distribute the funds to the municipalities (Executive Decree 80199). The Executive Decree has never been fully implemented.The financialresources are always transferred with delays to the sub national governmentaffecting their planning and implementationexercise. According to the Provincial Program for the Improvement of Basic Social Services (PPIBSS), the Council of Ministers, in addition to the funds included in the public investment program (PIP), allocated US$20 million to each province for a rapid upscaling of basic social services delivery to the population, such as health, education, water and electricity supply, basic sanitation, roads and the recovery of the private sector (ResoluqBo 16/02, 1 9 July). The addendum contribution was ~ ~ allocated without any objective criteria such as density population, development indicators and revenue performance. Despite satisfactory disbursement, provincial governments failed in the presentation of monthly financial and executing report. National strategies. At the end of 2001, the Councilof Ministers approved a Strategic Plan that puts forward a comprehensive vision and strategy for de-concentration and decentralization reforms, which foresees a deeper fiscal deconcentration and a tentative fiscal decentralization. This requires the establishment of a new mechanism of intergovernmental fiscal transfer and an improved role of the municipalities in the collecting of taxes. Furthermore, a UNDP study on decentralization realized in 2003 recommends such local fiscal policy. The government approved the recommendations made by the study. Besides the "regulation ofjnan~aslocais" is considered one of the main areas of intervention of the SeptemberECPPRSP as well as of the National Long-Term Development Strategy and the Medium-Term DevelopmentPlan. The existing legal and institutional framework and policy enable experimentation of deconcentration and decentralization as fiscaldecentralizationwith a gradual strategy. Objectives The main objective of the first phase is to carry out a feasibility study meant to: i) diagnose the needs, constraints, risk-assumptions to be overcome, ii) define the nature, mechanism and modality of fiscal transfer from the State Budget to the targeted municipalities, iii) define the strategy, management, disbursing and reporting arrangements, policy objectives, possible impact and replication as well as an exit strategy. It also intends, through the implementation of the study, to: i) define and approve the institutional and legal framework, implementation arrangements, ii) provide technical assistance, iii) build capacity at provincial and municipal level to plan, budget, implement and monitor economic and social small-scale rural infrastructure, iv) find out the mechanisms for investmentprogramming,budgeting,implementation, assets management, accounting, v) create a mechanism and practical tools for regular auditing, monitoring and financialreporting requirements, vi) start up the pilot fiscal transfer,vii) purchase relevant equipment. The main objective of the second phase is to pilot a mechanism of fiscal transfer from the central Government to the targeted municipalities. It also intends to (a) define a holistic approach to the implementation of decentralization reforms; (b) establish a model for financing the sub national administrations' development budget; (c) increase capacity at provincial and municipal levels to plan, budget, and implement and monitor economic and social small-scale rural infrastructure; (d) provide technical assistance. The transfers, administeredby the Ministry of Finance, would enable municipalities to articulate their own local development policies and invest in local infi-astructures,urban development, and services delivery,protection of the environmentand promotion of local economic development. Geographic focus area The subcomponentwill be carried out in the followingmunicipalities: Kilamba Kiaxi (Luandaprovince), Kamacupa (Bit province), Calandula (Malange province), and Sanza Pombo (Uige province). The target provinceslmunicipalities were selected on the following criteria: (a) target provinces selected by the government to benefit from the EMRP, (b) most war affected versus less war affected provinces and municipalities; (c), most populated versus less populated municipalities; (d) rural versus urban municipalities, (e) interior versus coastal provinces; (f) existing of a local development partnership dynamism and negotiation. Activities Phase 1 Activity I: Municipalfinancingfor recovery, rehabilitation and local development. This refers to define, through the feasibility study, the nature of the fiscal transfer to finance municipal budgets rather than predefined projects to set up eligibility criteria for the allocation of the funds; to the set up a mechanism for fiscal transfers to finance municipal budgets rather than predefined projects; and providing municipalities with a minimum of regular and locally predictable and programmable resources (for both recurrent and capital spending in proportions that could be earmarked if necessary) for development spending. Activity 2: Municipal planning and budgeting. This refers to: (a) the definition of technical procedures and mechanisms for the local public expenditures, such planning, management, investment programming, annual budgeting, implementation, reporting and accounting; @) training of local officers in the management of the fiscal transfer; (c) conduct a revenue generation feasibility study to investigate opportunities for municipalities to generate as well as mobilize income; (d) drafting, adoption and dissemination of the management and operational procedures for disbursement, including the eligibility and performance criteria for access to the fiscal transfer. Activity 3: State support and supervision of the municipal sector. This refers to strengthening the capacity of the both central and local government to support, supervise and monitor the management of the transferred funds. A first pilot fiscal transfer (aboutUS$ 1million) to four selected municipalitieswill be executed to test the mechanism and procedures and carefully monitored to review the operational procedures proposed. Phase 2 Activity 1:Municipalfinancing for recovery, rehabilitation,and local development. This refers to a core pilot fiscal transfer to financemunicipal budgets rather than pre-defined projects; provide municipalities with a minimum of regular and locally predictable and programmable resources (for both recurrent and capital spendingin proportions that couldbe earmarked if necessary) for developmentspending. Activity 2: Municipal planning and budgeting. This refers to: (a) increase capacity building of the municipal administration to plan, budget, implement, manage and monitor the delivery of sustainable public services; (b) refine of the fiscal decentralization mechanisms; (c) evaluate the fiscal transfer mechanism in view of their institutionalization within the national finance management and monitoring system and design a strategy for the replication; (d) establish a provincial government fiscal data bank to the municipalities; (e) develop improved procedures for municipal level strategic planning, budgeting, implementation, accounting, monitoring and evaluation; (f) facilitate municipalities to carry out participatory multi-year investment programming and annual budgeting exercise; and (g) assist municipalities in the implementationof selected actions. Activity 3: State support and supervision of the municipal sector. This refers to strengthening the capacity of (a) provincial government to provide technical assistance and supervision to municipalities as well as manage necessary and appropriate procedural controls for the transferred funds; and @) the central governmentto ensure it can perform its overall regulatory and monitoring role. Synergies. The subcomponent will develop close links and harmonize its activities with a number of related national programmes in the area of poverty reduction, rural development and public sector capacity building, municipal planning implementedby the government, UN and cooperation agencies and variety of NGOs civil society organizations (international and national). These include programs that follow similar methodologies to the municipal development fund, such as the European Union Support Reconstruction Program, and the Social Action Fund. In particular the first phase relies on the participatory dynamism put in place in the targeted municipalities by the above mentioned projects with the aim to use this budget aid on a driven priority base. In addition, the project will influence broader policy and legislative development at national level, particularly with respect to budget reform and changes in the current system of intergovernmental fiscal transfer, as well as with the both component A and componentB of the EMW. Institutional arrangements. The UNDP will draft the terms of reference for the feasibility study and share them with the government and the major stakeholdersintervening in the decentralization area. The follow up of the first phase will be ensured by a steering committee comprising UNDP, Ministry of Finance, Ministry of Territorial Administration, targeted provinces and municipalities. The pilot fiscal transfers during Phase 1 and then Phase 2 will be managed by the targeted municipal administrations supported by the project technical assistance, in close collaboration with the community in which concerns the identification of municipal priorities. The municipal administration will act under the supervision of the provincial department of the Ministry of Finance. The latter and the provincial bureau of studies,planning, and statistics will assist the municipalitiesin the use of the funds. The supervision is the duty of the directors of provincial department of the Ministry of Finance and the provincial bureau of studies, planning, and statistics. A provincial supervisor committee will be established to ensure effective coordination. This committee will comprise representatives of key provincial directorates involved in the activities of the project at local level and the administrator of targeted municipalities. The project will be accountable to the government, especially through the Ministry of Finance national director for budget and accounting. Based on its prior field experience in decentralization, UNDP will assist the government (Ministry of Territorial Administration) and selected provincial governments and municipalities in the implementation of this component. The UNCDF will be responsible for technical backstopping and monitoring of the implementation of the mechanisms through periodic technical review missions, provision of technical inputs, activitiesto measure policy impact and potential for replication, and fielding the midterm and final evaluation missions. A memorandumof understanding will guide this partnership. Jktaiicd cmt\ - SOUG (~nuunmt US Fund, Actid(ius miUtonl Tad mk LTr(DP LI)A , ~ ~ c c r r m ~ n d a ~bE\eo n ~ I sttidy inpkmnted (ssrnlffidpn~crduns, giardelrnes and mclrantbrn for exper.rmnr pufrcq ctz piece) nrtntronng and c\alunt~on Iks1g1-ioul'rFwnrwtirkfor Monitrirnng loeltigoltrnrtrnkrrbeflue Cotr~iucta n\etwc ginicmtlon tcslstb~trrystudy to inursttgate oppnrtnnrlies fir mrnlctpaltttcs to gcncntc as uclla\ mblm Incorn: and tnhd~tlunofail the process 2DO.W O~Si),OOU 1,L50,OCw) indrata the:ndot Rcal tra~%sfier Ibur nunrinalitlt< to .\daptwn afdn rnptoted f*valuarethe prio?fiscal in vreu of ihes ~nst~ttitanelsst~$nl l r t i ~ i t nunrrpdl %ysrem%or rhe narrc+nalharice nnnagcmnt and nnndonnp sysir;nriind puhllr: maoune.: mnugcmni t p r n d ~ c ~ St-mtegtcPlan addmsscrng iocritl mtntegl%t%>tland CCilDUIP132 ICCB\C?) IbSUCS, lfxlk thcvrito awest'?~n(. program arrd annual budget) Appendix 4 :Transportand Roads Rail Government strategy Government's multimodal transport strategy is to link two main.ports (Luanda and Lobito) to the interior rail-road inner "strategic loop" from Luanda to Uige, Malange, Saurimo, Luena, Kuito, Huambo, Benguela, Lobito and Luanda. Transport activities under the proposed EMRP The activities will support the preparation of a national transport strategy under component C. These activitieswill be implemented during phase 2 through component C of the project for a cost estimated at US$0.54 million of which IDA will contribute US$0.38 million. It will help the government to identify the institutional and policy reforms required to implement this strategy, particularly the future role of the private and public sectors in managing and maintaining the road network. It will also assist the government to define the priority investment program and identify the technical, financial, and institutional measures needed to ensure that improved infrastructure once rehabilitated is properly managed and maintained. Roads Current situation Angola has a total of 75,000 kilometers of roads. Of these, nowadays about 23,500 kilometers (7,950 kilometers of which are paved) comprise the primary road network (rede findarnental) under the responsibility of the National Institutefor Roads (INEA). The remaining 60,000 kilometers comprise the secondary and tertiary network and are managed by the provincial and municipal authorities. The war and neglect have taken their toll on the road network. It is estimated that some 80 percent of the road network is in very bad condition. In many places the network is completely interrupted. Because of the poor condition of the roads, rates for road transport are very high by international standards, and are only slightly less than those for air transport. Since the end of civil war in April 2002, the government has successfully executed a 30 month emergency road repair program. About 50 percent of the primary road network has been reopened to traffic according to government estimates. This emergency program needs to be followed quickly with investments in the rehabilitation of the main roads. Government strategy The government's strategy to improve transportation services is to link the two main ports (Luanda and Lobito) to the interior rail and road inner "strategic loop" connecting Luanda, Uige, Malange, Saurimo, Luena, Kuito, Huambo, Benguela, and Lobito, covering the provinces of Luanda, Kwanza Norte, Uige, Malange, Moxito and BiC. The figurebelow illustratesthe strategic loop of the transport network. Milap I:Strategic laep of the transpart nemawk Untrl donor yesources are available, the government will contrtlue to execute the priority roads progrzxm with Its urn resources. This will also continue its program ra prevent the spread of EXIViAIDS, focusing on workers rn the road brigades, many of whom are demohilra,edsathiers, Project objectivesand activities Tilt alqrc~tvesof zhc roads subcompancnt are to: (a) reduce the high costs of transport and speed the movement of passengers nrrd goods;, no&bly through the rehabi1itataor.r of a road network prtn~tpalXy tmportant for thc connectJon of strongly populated povrnces (Ulge and Kuanza Nurte; and (b) lwIp to re~ntegraiethe cuun~y. In 2801, INEA tlnstitztcs de Estradas of -4ngola) wtth the 3uIrnlsh-yof Public Works redetkcd its slmieby of rntementlon OR the road sector mamfy for the rehabrl~tatlunof the network. Rccause UP (1)d-tef~rnltedXinancxat resotaces during the years of conflict: (ii) ~nflationwhich galloped during the major part of this penod; and [~iifinstab~litydue to the military situation, the achon plans were nor carried out as illustrated by the graph below: The INEA ac.tianpIan tt-r address rhc actual issues ro be carried out In 3 phases ascr an esr~mafed36 months is sumn7an~edIn the map hereafter. Ministry uFPublic Worksf IKEA arti~npXan Koad~.The road subcomponent \wl1 conhrthte to the XNER action plan by supportmg the rehabd~tatgun of about 150 kilometers of roads zncluded zn the second phase of thc 1NEA plan by Ilnklng Lucala to Nrgag f LJS$28 million), rncrudlng 67 kilometers from l,ucaia to Samba Caju, 29 k~lometersfrom Samba Cap to Pombos dc Sonhc, 58 hlometers &om Pombos de Sonhe to Camabatela and about 44 hiornetem between Garnabatela and Negage; and about 19 smll bridges and two br~dgeson thls route. All 198 k~lon~erers roads to be rehabrt~tatedwere once paved, but the surface and structures have dettrr~o~ated of dpificantly due to the lack of maintenance dunng the long confl~ct.Some 15 percent of the road 1s completely deteriorated. The project wtll support the rehabilitation of the structures, including the foundaanns, when necessary; and subsurface layers, drainage systems, and ruad markings. Specific freafnlents wxll vary according to t-rafl?c arid the exrsring condftrons of the road. Detailed destgns and tender documenrs xvifl be prepared {under phase 1 %xmxng) before Iattnchinrg the bidding process. Parttcular attention wrll be pard to preventing the spread of WJYAlnS arnong workers, Iravrters, and cornnlunlties located along transpostatron axes. "I'herate of ~nf'ectlanamong the demob~llzedsoldimsnow working on the roads is reIatlvrty high, so intensive campaigns encourasing safe behavior will be important. Enginrering srtadieesaiiri stipervisinn of tl-+or*k;\'.Detailed designs by specrailxed ~nternat~onalGms are financed under phatx 1 (USfS3.3million). Supervis~onof works wnrksv~llbe financed under Phase 2. The road engtneering studies will cover the entire route to help with idelntification of priority sections to be rehabilitated, includingthosc that cvrll not be rehabzl~fatedwith Bank ikancing. f.J.3:eczardonc$P S ~ ~ S . Works wltl be executed by quaflfied constmetton firms to be sdectcd on an internationalcompetitive process, fenders will be invited for the rehabilitation of (a) the road connecting Lucala and Negage, (b) some 19small bridges and 2 bridges alorlg the road bctltreen f.ucala and Negage. Works wrlI procured through ICB, with prequaltficatlon. Pr*oat~enienf.Under phase 1 financing, XNEA tqrillprepare the terms of reference for the detailed deslgris and studies in close callabaration with the YMIIJ. l'he PMIli will procure the services, The M~nisterof Public Works will s i g the contfacts. NEA w~lfsuperviseyrepwatittn of the dctailed desibas and sfudles and the PMrU will be responribte for the admmistrative and financial management of contracts. QCBS tvttl be thc cnterta applied for selcct~onuf the experienced consulttnp firms. A short list of Cims be prepared in accordance with Bank procedures, after publtcat~onof expressions of ~nlerest, mE1Z u ~ l l strzreas the focal p i n t between the PMKJ and the firms. ermfi of reference- udies end ~opervisian 3X; C* VI L 8 - w $2 ru * = W 51 8 ask na objection -----# W C; E U 1. f 1J f e L FT 5 ?! Y E U E 2 1J t) 2 C - ask no objectictn------+ Yes Table 1: Summary of procurement arrangements(US$ million base cost with taxes) - The numbers m italic represent IDA fmancmg. E. Costs and financing Activities under phase 1 (engineering studies) in the amount of US$3.2 million including taxes end contingencies(under componentD) for which IDA will contribute US$2.3 million will be adjusted to the actual needs. The supervision of works will be in all cases financed under Phase 2. Activities of the road subcomponent under phase 2 are estimated to cost about US$28 million, including taxes and contingencies,of which IDA will contributesome US$20 million. Table 2 gives the details. Table 2: Phase 2-Road program(costs In US$ million) Table 3: Annual payment by IDA and the government I_- - - - - _..-- - - Project costs Description I-.-. _ II1 . 2007 1 2208 2009 1 2010 1 Total I Br-.. Supervisionofworks' L---.-.-~I 1 - 1 0.5 0 . 5 1 0 . 4 1 1.3 1 - Table 4: Annual paymentby IDA 'IDA 1 I - - -_. - .. -i-Y_ - - _- ib FY In US%Million (Taxes and -contingencies) " - - - _ - - -- - - - - - .- --- -- _ " - - - A -" -_i Table 5: Annual payments of the government IGOA 1 -------------..-&--.I-.-- /byFY In US$ Million (Taxes and contingencies)--- 7---- --- ----- J I -I------ I I I II Pmiect costs I P. Other information Map 1:Location works Appendix 5: Electricity Currentsituationto be updated The electricity supply system in Angola has deteriorated during the last 30 years. The main hydroelectric plants and transmissionlines of the system were built during the 1970sand importantparts of the system are out of service due to war damage and lack of renewal and maintenance. Some areas previously served are today without electricity supply. In the areas that are still supplied, including the capital of Luanda, frequent power failures and load shedding occur, so that someusers have installed small-scale diesel generators. The electricity supply systems in Angola consist of three separate integrated systems and several isolated smaller systems. The Northern System covers the capital city of Luanda and the most populated cities of the provinces of Bengo, Malange, Kwanza Norte and Kwanza Sul. The Central System covers the populated centers of the provinces of Benguela and Huambo. The Southern System covers the populated centers of the provinces of Huila and Namibe. The situation of the installations of the electricity system in Angola can be summarized as follows. Total installed generation capacity is 628.5 megawatts, of which 290.7 megawatts of hydro and 337.8 megawatts of thermal. Out of the 288 megawatts hydro installed capacity in the three integrated systems only 197.2 megawatts (68 percent) are operational. For the small hydro plants located in isolated systemsnone of the 2.7 megawattsinstalled capacity is operational. Only 199.6megawatts out of 264.6 megawatts, i.e. 75 percent of installed capacity of thermal plants are operational in the three integrated systems. For the isolated systems with an installed thermal capacity of 73.2megawatts, only 29 megawatts (40 percent) are operational. Empresa Nacional de Electricidade (ENE) and Ernpresa de Distribuiq30 de Electricidadede Luanda (EDEL) have been formally established as public enterprises respectively in 1998 and 1999. The executive bodies of both enterpriseshave been nominated and are operational since September 1999. ENE is responsible for the supply of electricity in the main cities of 15 out of eighteen 18provinces. In the city of Luanda, EDEL is responsible for distribution in medium and low voltage, some high and medium voltage consumers are supplied directlyby ENE. In three provinces that ENE does not supply electricity(Lunda Norte, Kuando Kubango and Zaire), as well as other localitiesthat ENE does not cover, generation and distributionof electricityare the responsibilityof the provincial governments. Objectivesof the government The objectives of the government in the electricity sector are (a) to guarantee the sustainability of electricity services by assisting the utilities to operate on a commercial basis; (b) to establish and or normalize the public service of supply of electricity to the capitals of provinces with a permanent reliable supply and adequate quality of service; and (c) to rehabilitate the existing generation, transmission and distributionequipments. Project objectivesand activities The objectives of the electricity component are to strengthen electricity services in the capital city of Luanda, and in the capitals of targeted provinces of Malanje, Kwanza Norte, Uige, Bit and Moxico. Activities of phase one. During phase one, the project will finance engineering studies to prepare the bidding and related documents for the physical investmentsto be financed under phase two. Activities of phase two. During phase two, the project will finance the rehabilitation of medium and low voltage distribution systems in the provincial capitals cities of the targeted provinces (N'Dalantando, Uige, Malanje, Luena, Kuito), as well as the rehabilitation and the extension of the distributionnetwork in the area of Luanda, the national capital. The project will include financing for the supervision of the implementation of physical investments. These investments in works and equipment will be complementedby related institutional developmentactivities targeted at ENE, EDEL and the ministry and someprojects related to commercial management of EDEL. Finally, under component C, the project will finance studies aimed at improving the institutional framework of the sector and assistance to the newly createdregulator to enable it to fulfill its mandate. Project descriptionand expected outputs Project Description Expected output Rehabilitationof the distribution network mNdalatandowith the constructionof about : * MV Line 30 KV: overhead:36 Km and underg: 6 Km Reliable supply of electricityto the population of the city * MV Lme (15KV): underground 30km and 90 Km overhead; estimatedat about400,000; ENE :Rehabation of MVLV network of * 19MV/LV substations(l5/24KV) and ;6 MV/LV Increase at an annualrate of 8.5% of the existing 1,000 Ndalatando substations(l5/30KV) consumers Rehabilitationof the distniutionnetwork mUige with the constructionof about : * MV Line (15KV): underground 782 km and 28,5 Km Reliable supplyof electricityto the population of the clty overhead; estimatedat about 500,000; ENE :Rehabilitationof MV/LV network of * 30 MVLV substations; Increase at an annualrate of 6.5% of the existing 1,600 Ulge * LV Line: underground 65 Km and 125Km overhead; consumers Rehabilitationof the distribution networkmMalange with the constructionof about : * MV Line(30 KV): overhead20 Km Reliable supply of electricityto the populationof the clty * MV Line (15 KV): underground90 km and 10Km overhead; estimatedat about 800,000; ENE :Rehabifitation of MVLV network of * 36 MVfLV substations; Increase at an annualrate of 7.0% of the existing4,000 Malange * LV Lme: underground 55Km and 130Km overhead; consumers Rehabihtation of the distribution network in Luena with the constructionof about : * MV Line (15 KV): underground90 km and 60Km overhead; Reliable supplyof electricityto the population of the city * 20 MVfLV substations; estimated at about 250,000, ENE :Rehabilitationof MVLV network of * LV Lme: underground 120Km and 105Km overhead; Increase at an annualrate of 5% of the existing 1,100 Luena * Glass fiber LV chicles:43 consumers Rehabilitation of the distribution networkin Kuito with the constructionof about : * MV Lme (15 KV): underground 54lan and45 Km overhead; Reliable supplyof electricityto the population of the city * 16MVLV substations; estimatedat about 800,000, ENE :Rehabilitationof MVILV network of * LV Line: underground 55 Km and 60 Km overhead; Increase at an annualrate of 5.5% of the existing 1,600 Kuito * Glass fiber LV cibicles: 15 consumers Project Description Expected output Supply,installationand training of mobile substationin Viana, Improvement of the qua& of service to industrialand EDEL :Extension and mobile substationof extensionof the HTIMTLT, supplyof 20 rural transformersand domestic(10.000) clients with an additionaldistribution the HT/MTILT Network in Luanda area operating equipment capacity(20 MVA) Controlof commercialactivities,amelioration EDEL :Identification of consumers and Identification,Localization,codification of dents in EDEL's commercialmanagement, integration of about 45,000 -- --. training for commercialmanagement .-. ..-.. -- - distributionnetwork unidified consumers .- . . The project consists of: Improvement of commercialmanagement; reduction of * onp b trainingof the staff of the meter cahhtion laboratory; commerciallosses; improvementof the image of EDEL * acquisitionof kits and tools for installationof meters with the public Distributionnetwork in targeted cities are operationalby DNE (ENEtEDEL) :Supervisionof works Supenision of supply and installationof electricalequipments December 31,2009 Assistance to the newiy instituted Regulatorto help it assume its mission. The project consists of: * Acquisitionof logistics (24x4 cars; 2 desktop computers; 2 laptop computers; 2 laserjetprinters black and white; 1color printer, 1photocopier); The institution of regulation is operationalby December IRSE :Assistance to the Regulator * financingof informationmissionsabroad; 31,2008 REPUBLIC OFANGOLA EMERGENCYPHASE OFTHEMULTISECTOR REHABILITATIONAND RECONSTRUCI?ON PROGRAM ELECTRICITYSECTOR PROPOSEDPROJECT Project COMPONENT SCOPE PROVINCES Months COSTS(US$) SUPPLYINSTALLATION Total 01 ENE :RehabilitationofMVLV network ofNdaktado PROVINCIAL K. NORTE 24 4.08 1.02 5.09 02 ENE :RehabilitationofMV/LV network ofUige PROVINCIAL UIGE 24 4.49 1.12 5.61 03 ENE :RehabilitationofMVLV network ofM a w PROVINCIAL MALANGE 24 3.66 0.92 4.58 04 ENE :RehabibQn ofMV/LV network ofLuena PROVINCIAL MOXICO 24 2.35 0.74 3.09 05 ENE :RebabihtationofMViLVnetwork ofKuito PROVINCIAL BII? 24 2.79 0.70 3.48 Subtotal Uhan distibutionneM& (Capitalof Provinces) 17.36 4.49 21.86 06 ( EDEL :Extensionand mbile substationof the HXMT/LT Network in Luanda area 1PROVINCIAL 1 LUANDA I 24 2.49 0.62 3.11 Sub-totalDistributionnetwork ENE in Luanda 2.49 0.62 ' 3.1 1 07 [EDEL:Identificationofconsmrs PROVINCIAL LUANDA 12 0.45 0.45 08 /EDEL:Supplya d htalktion of electricalrneters PROVINCIAL LUANDA 12 1.05 0.26 1.31 09 I EDEL :Supportto comnialmnagemnt PROVINCIAL LUANDA 12 0.15 0.15 10 IDNE (ENWEDEL) :Supervisionofworks NACIONAL NACIONAL 30 1.44 1.44 Subtotal Operational capacity building 3.09 0.26 ' 3.35 11 I IRSE :Assistameto the R e a t o r ~NACIONAL ~NACIONAL 1 24 0.97 0.97 SubtotalInstitutional stmngthning 0.97 0.97 BASE COST 23.91 5.38 29.28 TAXES 2.39 0.54 2.93 CONTINGENCIES 2.63 0.59 3.22 TOTAL CONTING (lO%),TAXES (10%) 28.93 6.50 35.43 COSTS SUMMARY (US$ millions) Estimative Costs by Currency (US$ million) TAXES 0.59 2.34r 2.93 GRAND TOTAL 6.80 28.63 35.43 Financing Plan (US$ million) GOA's Sub-component Total Contribut. IDA Supply and installation 30.21 7.91 22.30 Operationalcapacity building 4.05 1.14 2.91 Institutional strengthning 1.17 0.31 0.86 Total 35.43 9.37 26.07 Electricity :Provisional Schedule of Disbursement (%) FY2007 FY2008 N2009 m O l 0 Total 0 55 35 10 Cumulative 0 55 90 100 Electricity :IDA Provisional Schedule of Disbursement (in US$ million) FY2007 FY2008 FY2009 FY2010 Total 0 14.3 9.1 2.6 Cumulative 0 14.3 23.5 26.1 Implementation arrangements. The Ministry of Energy and Water will be in charge of the implementation of the electricity component, in liaison with the PMIU. The Ministry of Energy and Water will set up a steering committee within the ministry, composed of representatives of DNE, ENE and EDEL. This cornrnittee will be assisted by a consultant to help prepare engineering studies and all internationalbidding documents, as well as the supervision of works. Appendix 6:Water alando Phase 2 - Consultancies on Sities Basic Cost I 1.85 1.85 0.00 3 Other 1' .--.-.-,---------..- --. --..,. .---.- -.-.--" ~ "-' " 3.1 Plus 10% taxes --~"..-" --.. - , 0.19 0.19 0.00 *--", .,-". 3.2 Pus 10% contingencies - mw--------.-.-.p 0.20 0.20 0.00 Total Consultanciesi 2.24 2.24 0.00 Total WaMr Supply Revistad at Nov 05 PostAppraisal - - 15.91 15.91 0.00 Appendix7: Urban services and infrastructure Urban Services Component COST 17.6US$ Million Consultancies - Phase I- Component D Item Services Description Base Cost IDA Government 1 Luanda 1.1 Detail Design Drainage of Luanda 0.21 0.15 0.06 2 Other 2.1 Plus 10%taxes 0.02 0.01 0.01 2.2 Pus 10%- contingencies 0.02 0.02 0.01 Total consultants for Luanda 0.25 0.18 0.08 3 Moxico 3.1 Detail Design Erosion control in Moxico 0.27 0.19 0.08 2 Other 2.1 Plus 10%taxes 0.03 0.02 0.01 2.2 Pus 10% - contingencies 0.03 0.02 0.01 Total consultancies for Moxico 0.33 0.23 0.10 Total Consultancies in Phase 1 = US$0.58 Total Investments in Phase 1 = USS0.58 Appendix8: Infrastructure Strategiesand Private Sector Participation Background Following nearly 30 years of civil war, Angola's infrastructure is in poor state and infrastructure services are highly inefficient and only available to a small part of the population. In comparison with the SADC countries, many of which are not highly developed, Angola scores at or close to the very bottom for most infrastructure indicators. This impacts negatively both on the quality of life of the country's population and on nearly all economic activities, and seriously hampers Angola's growth prospects. Up to now, infrastructure services have been almost the exclusive preserve of the public sector, be it in form of government departments, or of state-owned enterprises. To bring about the urgently desired peace dividend, improve people's lives, lay the basis for productive sector investment and thus generate GDP and employmentgrowth, substantial changes are needed in the way the infrastructuresectorsare operated, coupled with massive investments to expand capacity and enhance access. Private participationin infrastructure: policy and results In recognitionof the serious constraintsfacing the country's infrastructure system, the government started opening up the infrastructure sectors to private sector participation (PSP) during the second half of the 1990s. A number of policy measures have been taken since then and arrangements with private sector operators have been concluded. Telecommunications is the sector in which reforms are most advanced, but substantial changes have also been introduced in the investment and operating framework of urban water supply, waste removal, port terminals, airport services and electricity supply. While the experience to date involving the private sector in infrastructure remain quite limited, the governmenthas created a concrete track record of a forward-lookingreform policy and of projects carried out. The highest profile transaction has been the mobile phone license issued to Unite1 in April 2001. Telecommunicationsis also the only infrastructure sector for which a specific regulatory regime has been implemented and a regulatory body has been established. Furthermore, in 2003 four new fixed line licenses were issued to private operators, thus creating competition with the incumbent state company Angola Telecom in a number of fixed line services. In some other sectors management contracts with private operators were implemented which are considered to have been reasonably successful. These included water supply in the cities of Soyo and Caxito, solid waste removal in Luanda and terminal operations in the Luanda port. In the electricity sector a concession has recently been awarded to the privatejoint venture Alrosa. These examples, which are summarized in the table below, are important in demonstratingthat private sector participation can proceed in Angola. However, despite these initial successes, the required reforms have only just begun. The legacy of the long history of centralized control still affects the management of the whole economy, and the obstacles to infrastructure development remain formidable in view of the enormous investment requirements, and the extremely limited capacity in the country both in the public and in the private sectors. For these reasons, further and more profound changes are required to complete the initiated reforms and to fully accommodateand promote private sectorparticipation in infrastructure. Angola Country FrameworkReport In recognition of these needs, the government asked the Bank in 2001 to assist in the mobilization of funding for the development of a comprehensive strategy to achieve the objectives outlined above. As a result, the Public Private Infrastructure Advisory Facility (PPIAF), jointly with the Bank, agreed to finance during 2002-2003 a strategic study titled Country Framework Report (CFR). The study focused on the major infrastructure sectors electricity, water supply and urban services, transport and telecommunications. It took stock of the current situation, examined the legal and regulatory basis for private participation, analyzed the reforms already carried out or initiated, assessed the main obstacles to private participation both of cross-cutting nature and relating to individual sectors, and identified opportunities for private participation in the future. Recommendations followed, based on consultations with key stakeholders. The EMRP's emphasis is on immediatereconstruction, coupled with urgent institutional development and capacity building. By contrast, the government considers the CFR as one of the elements of its Medium- Term Development Plan 2006-2009, which is under preparation. During the CFR process, it was therefore agreed between the Bank and the government that the Project could include CFR recommended actions which are consistent with the Project's main objectives. This would in particular encompass the preparatory work for policy actions that aim at achieving further reforms, either in cross-cutting areas or at sectoral level. However, the actual implementationof such reforms would be part of the next phase of Angola's development program, i.e. the Medium-Term Development Plan. During Project preparationthe CFR recommended actions were therefore reviewed in light of their urgency, the requirements of each infrastructure sector, and the inter-sectoral and intra-sectoral priorities set within the Project. Based on this review, the strategy support for the infrastructure sectorswas defined and included under Component C in the Project. Its rationale and specific elements are summarizedbelow. Electricity Development constraints. Currently the sector is far from reaching the objectives of sustainable and reliable supply and continues to face substantial challenges. The main issues presenting considerable obstacles to sector development and to private sector participation are: (i) like other infrastructure services, electricity tariffs are set by the Ministry of Finance as per Decree 20190. Even though the strategy calls for sustainability and thus cost recovery, tariffs have remained below long run marginal costs, have at times not even covered operating expenses, and are not regularly adjusted in line with inflation; (ii) due to insufficient tariffs, the two main utilities have not had enough investment and operating resources, have required continuous subsidization by the government, and would by normal accounting practices be insolvent and thus not creditworthy as contracting parties with private operators; (iii) the new regulatory body exists only on paper and is not granted the authority to set prices or to issue licenses. This means that for the moment the cumbersome and arbitrary tariff setting approach by the Ministry of Finance remains in place; (iv) accordingto Decree 45 of 2001, uniform tariffs apply to private concessions and licenses throughout the country, even though exceptions can be made; and (v) as the Alrosa project has shown, there is no transparent and consistent approach yet to private sector participation. Optionsfor private participation. The electricity sector offers significant opportunities for PSP over the medium and long tenn in five main activities: Increasing access to electricity supplythrough the electrification of rural areas Operation and development of grids that have been isolated from the main network as a result of the civil war Rehabilitating and operatingpower plants that sell to ENE under power purchase agreements; Building and operating power plants that sell to ENE or EDEL or to large consumers under power purchase agreements; Providing servicesunder contract to ENE and EDEL. Depending on the government's future sectoral policy, there could be additional long-term opportunities for PSP through the transfer of ENE and EDEL to the private sector. However private sector participation will only materialize in a significantway if the issuesoutlined above are properly addressed. Strategy support. In view of the issues outlined above, funding for a study on strategic options for electricity sector developmenthas been included in component C of the Project. The study is designed to provide the government with a concrete action plan for improvement of sectoral performance, achievement of sustainability and dependability of supply, and attraction of private participation, and would thus address some of the critical issues raised by the CFR. Water Watersectorpolicy and strategy. The water sector continuesto be fraught with operational and financial problems, but the governmenthas recently taken a number of actions that should, if consistently followed up, improve sector performance noticeably and create a conducive framework for private sector participation. A new water law (Law 6/02) was passed in mid-2002. The water sector strategy ("Programma de Desenvolvimento do Sector das Aguas") was recently approved by the Council of Ministers and therefore now reflects official the govemment sector policy. Implementation rules to the water law are currently being drafted and could be finalized by end-2004. Finally, a new model and legislation for the establishment of public water supply companies (empresaspublicas) is being prepared with particular focus on provincial capitals. This model will also address an important issue for the project as water supply in provincial cities is generally curtailed or non-existent due to war damage and lack of maintenance. The formal responsibility lies with DNA, which is represented in a rudimentary way at the provincial level. There is thus basically no organizational structure that would be capable of managing any new investments and of efficiently operating a modem water supply system. The design of appropriate rules and organizational structures is thus important not only for the eventual involvement of private operators, but also to ensure the sustainability of the public investments financed under the Project. Strategy support for urban water. To address the major issues outlined above, a study on strategic options for urban water sector operations and private sector participation has been included in component C of the Project. It will be designed to focus both on the possibilities for improvement of the operating public utilities, on options for (re-)establishing water supply where it does not exist, and on the potential for private participation in consideration of the recommendationsof the CFR. Strategy support for rural water. The existing physical infrastructure and administrative capacity for water supply in rural areas is even more limited than in most cities and towns. Since the possible approaches are more diverse than in urban centers and the data base is quite thin, a sensible plan of action cannot be defined without a careful stocktaking and design of detailed programs within each province, or for each geographic area with comparable natural characteristics. Because of these factors, the size of the country, and the logistical difficulties facing any reconnaissance work, a fairly sizeable study has been included in component C of the Project to prepare a rural water supply strategy. This strategy will focus on all important aspects of improving rural water supply and is likely to put emphasis on NGOs, communities and local entrepreneursas main vehicles for service delivery. Transport Strategy support. In Angola all the transport modes serving domestic transport (road, rail, air) need development but are potentially in competition with each other and thus for scarce development funds. The priority for investment in any or each mode should ideally be considered after preparation of a multi- modal transport strategy with particular focus on the main corridors and their area of influence. This should identify the total traffic requirements, prepare long tern traffic growth forecasts under various scenarios, and consider a rational allocation of traffic to each mode based on least cost and an integrated view of transport development. In addition, such a study would also determine investment requirements and priorities, and would examine issues related to taxes and user fees, cost recovery, externalities and poverty orientation, subsidization, financing options, long-term sustainability, competitionof services on and between modes, and optionsforprivate sectorparticipation. A comprehensive transport strategy study included in component C will provide the basis for the long- term transport strategy. To address issues related to road rehabilitation and maintenance (initially for the national road network) a strategy study on sustainable road maintenance has been included in component C of the Project. This studywould also address a number of recommendationsmade by the CFR. Appendix9: ProcurementAssessment and Proposed Arrangements A. ProcurementArrangements General Procurement for the project would be carried out in accordance with the World Bank's Guidelines: Procurement under IBRD Loans and IDA Credits dated May 2004; and Guidelines: Selection and Employment of Consultants by World Bank Borrowers dated May 2004; and the provisions stipulated in the Financing Agreement for the project. The items in the different procurement categories are briefly described below. The procurement procedures and Standard Bidding Documents for National Competitive Bidding PCB) will be the same as for IntemationalCompetitive Bidding (ICB), except for: (a) advertising may be limited to the national press or official gazette, or a free and open website; and (b) the bidding documents may be only in Portuguese (paragraph 3.4 of the Guidelinesfor Procurement). A Country Procurement Assessment Review (CPAR) that was carried out in October 2002 found that the existing national regulations are inadequate for use by IDA-financed projects (see below for details). An action plan to implement the agreed recommendations of the CPAR is being implemented through the IDA-assisted Economic Management Technical Assistance project. (See the Assessment of Procurement Capacity below.) Separate procurement plans were prepared for phase 1 and 2 of the project, covering nearly the entire implementation period of phase 1 and 18 months of phase 2. For every contract that would be financed out of phase 1or phase 2, the plans specify the procurement method or consultant selection method to be used, whether there is a need for prequalification, the estimated cost, prior review requirements, and a time frame (see appendix 17). The procurement plans have been agreed by the Recipient and the Bank project team and will be updated once a year or more often as needed, to reflect the evolving project implementationneeds and improvementsin institutional capacity (see below). A General Procurement Notice will be published in UN Development Business and Development Gateway Market (dgMarket) and will show all Intemational Competitive Bidding (ICB) for goods and works and major consulting service requirements. Specific Procurement Notices will be issued in Development Business and dg Market and at least one newspaper with nationwide circulation for ICB contracts and before preparation of shortlists with respect to consulting contracts above US$200,000, in accordance with the Guidelines. Procurement of Works Works procured under this project would include the rehabilitation, reconstruction, or expansion of roads, electric power supply, water and sanitation, and urban works. Works with a total estimated total value p a contract of US$1,000,000 or more will be procured on the basis of ICB. Prequalification will be done for works contracts of US$lO million or more. Works with an estimated value per contract of less than US$1,000,000 may be procured on the basis of NCB. Works estimated to cost less than US$50,000 per contract may be procured on the basis of Shopping. Shopping procedures involve at least 3 quotations from suppliers or contractors in response to a written invitation. For electricity supply, the standard bidding documents for Supply and Installation of Plant and Equipment will be used. Where appropriate, Limited International Bidding (LIB) for works may be used, as agreed in the procurementplans. For electricity supply, the standardbidding documents for Supplyand Installation of Plant and Equipment will be used. Where appropriate, Limited International Bidding (LIB) for works may be used if necessary, as agreed in the procurementplans. Procurement of Goods Goods procured under the phase 2 project would include vehicles, trucks, motorbikes, computer hardware and software, office equipment, pumps and other water related equipment, etc. Each contract for goods estimated to cost the equivalent of US$200,000 or more would be procured under International Competitive Bidding (ICB) procedures, except for meters for the electricity component which will be procured under NCB. Goods with a total estimated value per contract of less than US$200,000 may be procured on the basis of National CompetitiveBidding. Goods estimated to cost less than US$30,000 per contractmay be procured on the basis of Shopping. Procurement of Non-ConsultingServices Procurement from United Nations agencies for supplies and works carried out under their own procedures may include UNICEF, WHO, andlor the International Agency Procurement Services Organization (IAPSO). The standard form of contract with UN agencies will be used for such procurement. UN agencies could be selected on single source basis. The items to be procured from UN agencies would be agreed on in the procurement plans and would originally include (a) three contracts for the staged supply of student kits, teacher kits, and classroom materials in Phase 1with an estimatedvalue of US$1.0 million for the largest of the thee contracts, and (b) the construction of rural water supply systems (including hydro-geologic and social investigations) with UNICEF in Phase 2 for an estimated contract value of US$4.2 million. Selection of Consultants Consultant services will be required for the design of most of the civil works included in the project, construction supervision, studies, and technical assistance for project implementation. Consultant services will be procured through a Quality-and-Cost-Based Selection (QCBS) or other appropriate methods as specified in the procurement plans. Consultant assignments estimated to cost US$200,000 or more would be advertised to invite expressions of interest. Small consulting assignments may be procured through Consultant Qualification Selection (CQS) or Least Cost Selection (LCS). Technical assistanceto Municipal Health Teams would be provided in 4 provinces through a QCBS procedure with a short list consisting only of qualified NGOs. Single-Source Selection (SSS) may be used in exceptional cases, where the provisions of paragraphs 3.9 to 3.13 of the Consultants Guidelines are met. In phase 2 project, construction supervision assignments may be procured through SSS, provided that the original selection of consultants to prepare the design or studies (under phase 1 project) was canied out through competition and for the entire assignment coveringboth phase 1and 2. Specialized advisory services would be procured through Individual Consultants Selection (ICS), based on the qualifications of individual consultants for the assignment in accordance with the provisions of paragraphs 5.1 through 5.3of the Consultant Guidelines. Other Procedures Procurement from UN agencies. Procurement from United Nations agencies for supplies and works carried out under their own procedures may include UNICEF, WHO, UNDP, UNCDF andlor the International Agency Procurement Services Organization (IAPSO). The standard form of contract with UN agencies will be used for such procurement. The items to be procured from UN agencies would be agreed on in the procurementplans and would originally include (a) the construction of rural water supply systems with UNICEF for an estimated contract value of US$4.2 million; and (b) implementation of the studiesand capacitybuilding for the pilot decentralizationactivity through UNDP and UNCDF. Training Workshops and study tours will be conducted according to annual training programs that will be submitted to IDA for review prior to initiating the training. The programs will specify the type of training (courses, study tours, workshops, on the job, etc.), subjects, number of trainees, duration of training, staff months, timing, estimated cost, and the like. The procurement of any training activities that involve the hiring of consultantswill follow the Consultants Guidelines by using the QCBS, CQS or LCS for firms and ICS for individuals. The appropriate methods will be specified in the procurement plans. Omratinn Costs. Operating costs financed through the project would be procured using the PMIU7s administrative procedures, as laid in the manual of administrative and financial procedures which was reviewed and found acceptableto the Bank. Direct Contracting for works and goods may be used in exceptional cases, such as for the extension of an existing contract, standardization,proprietary items, spare parts for existingequipment, and urgent repairs and emergency situations, according to paragraphs 3.6 and 3.7 of the Guidelines. The items to be procured throughDirect Contracting would be agreed on in the procurement plans. Grants. Grants may cover the cost of grants or other mitigation measures within the framework of the ESIA according to the World Bank safeguard guidelines. They will also cover decentralization support grants to be disbursed through the appropriate government budget line to benefit selected municipalities once the appropriate framework and mechanisms have been agreed on to the satisfaction of IDA. Disbursement for environmentaland social mitigation grants will not be made until the environmentaland social assessment (under Phase 1) has been completedand the environmental and social mitigation system is in place. Biddinn Documentsand Forms of Contract The Bank's standard bidding documents, including those for evaluation reports, will be used for all procurement under ICB and NCB procedures. An electronic system may be used, acceptable by IDA, to (a) distribute the bidding documents and receive bids or quotations for works and goods, and (b) distribute the RFP and receive proposals for consulting services,in accordance with paragraphs 2.11, 2.44, and 3.5 of the Guidelinesand paragraphs 2.9 and 2.13 of the Consultants Guidelines. The language of the procurement documents and forms of contract will be as follows: ICB -Prequalification and bidding documents in English or French, with Portuguese translations if desired; contract for ICB in EnglishJFrenchor Portuguese, i.e. the same language as that of the bid, according to paragraph 2.15 of the Guidelines; NCB and Shopping-The documents may be prepared only in Portuguese; Consultants - Request for proposals in English or French, with Portuguese translations if desired; contract for ICB in English or Portuguese, according to paragraph 1.20 of the Consultants Guidelines. Review by the Bank of ProcurementDecisions The thresholds for prior review by Bank are specified in the procurement plans. Table 1 below shows (a) the thresholds for the different procurement methods, and (b) the initially-agreed thresholds for prior review by the Bank. The Bank will preview procurement arrangementsproposed by the Recipient for the items specified in the procurement plans for their conformity with the Financing Agreement and the applicable Guidelines. Any procurement item not specified for prior review may be subjected to a post- review of the procurement process. Table 1: Thresholdsfor ProcurementMethods andPrior Review Expenditure Contract Value Procurement ContractsSubjectto Category Threshold (US$ Method Prior Review (US$ including taxes) includingtaxes) 1,000,000or more ICB All 50,000 or more and less NCB First 3 contracts than 1,000,000 Less than 50,000 Shopping First 3 contracts Goods 200,000 or more ICB All 30,000 or more and less NCB First 3 contracts than 200,000 Less than 30,000 Shopping First 3 contracts Consultant Services - QCBSICQSILCS 100,000or more: all Firms Less than 100,000: first 3 contracts Consultant Services - ICS 50,000or more: all Individuals Less than 50,000: first 3 contracts Notes: "Prior review of the firsts 3 contracts" applies to eachphase of the project. ICB InternationalCompetitiveBidding NCB National CompetitiveBidding QCBS Quality and Cost Based Selection CQS SelectionBased on Consultants' Qualifications LCS Lest Cost Selection IC IndividualConsultants Procurement Section of the Pro!ect ImplementationPlan Manuals on procurement procedures have been written under other Bank-assisted projects, namely for consultantsand goods for the Economic Management Technical Assistance Project and for works for the Third Social Action Fund Project (FAS3). These will be used to prepare the procurement section of the project implementationplan for thisproject. Table 2: Phase 2 project costs by procurement arrangements Emergetrcj Multlsecfar Recot cry Progranr Proposed PX~dse2 Project Costs by Pxseumment Arrrrngemants * Otlrerm e t W of prwufemenr incltlttct cMI works iir~d o d to bc procured g rhraarghnationalshopping,cnnsukirigservices,scrsiccsaf conrractcd staBuFthe prujcct managcnlcll o f f ~ e , rrsitli~r~, rechnkal assistame senkes, a& incremental operating casts refated to (3r~wrnagir~g project,and (ii) pssir~gproject Fun& ?ok;algnt.enmlesrtan%$. ttic B. ProcurementPlan The procurement plan for Phase 2 prqcct in~plemcnktioatwas prepared dunng post appraxsaf,wh~chwtfl govern &c choice of the procurement methods used for all the contracts. The plan invas agreed on bettveen the R ~ c ~ psandnthe Project "Teambefore negotiations, b is attached tu tk~sdocument as appmdlx 11 (it ~ t wrlt be updated if there are re-megotiations for the project). The approved procurement plans ~ i r l lbe posted on the Bank's public website aBer the fmancing (Grant) has becn approved by eIze Baard. Furthermore, the award results for the procurcmmt of individual coaaacts wrfl 'ire publtcly disclosed acrordtng the pra~eduresprescrxbed by the Bank. Thc procurement plans wlfl be updated annually, or sooner as rcqurred, to reflect the project ~mpfen~entationneeds and improvements in the institutional eapaclty. Any proposed rewsrons to the ageed procurement plan ui~,llbe submitted to the Bank for ~ t s prior approval. C, Assessment of Pracurement CapaciQ A Project Management and Implementatlcm lJnjt (PNIU), has hem established In the Min~stryOF Planntng and 1s currently managlag the procurement and implementatlan activities of Phase 1 of the pl-o~ect;~t will also implement Phase 2. It works tn close collaboration with the sector miniseries and agencies that are participating in the project, but retains the ultimate rcsponsrbilrty for prwurcment and contract mnagenlent for the Recipient. The main procurement functrons af the PMIU are to: (a) coordrnarc thc preparation and updating of the procurement plans in a timefy manner and submit hem to the Bank for revtew: (b) monitor the prcpamtlon of the tmhntcat aspects of procurement (terms of reference, bills of quantities, technical specifications, etc.) by the participating ministries and agencies and assist them in the preparation as necessary; (c) cany out the procurement according to the Bank's Guidelines and the provisions of the Financing Agreement; and (d) monitor the procurement processes and the management of the contracts by the participating ministries and agencies and assist them with contract managementas necessary. For Phase 2, the participating ministries and agencies will be responsible for preparing the initial requirements for procurement, as they are for Phase 1, includingthe terms of reference, bills of quantities, specifications, and the like, and providing them to PMIU. The PMIU will conduct the procurement process up to the award of contract. The ministries and agencies will participate in the preparation of short lists and the evaluation of bids and proposals under the direction of PMIU. The contracts will be signed by the ministers or heads of agencies concerned who will then be responsible for the management of the contracts. The PMIU will monitor contract management and assist the ministries and agencies in this task as needed. Payments for contracts will be made by the PMIU against certification received from the ministry/agencyresponsible for the particular contract. The PMIU contains a procurement section, headed by an internationally recruited chief procurement officer and staffed with at least2 procurement officers,recruited nationally. The initial assessment of the procurement capacity of the Ministry of Planning and the ministries and agencies participating in this project was carried out by a procurement specialist of the Bank during pre- appraisal in May 2004. The specialist reviewed the organizational structure for implementingthe project and the availability in the country of procurement specialists for Bank-assisted project implementation. The assessment revealed a severe scarcity of qualified specialists locally and a dearth of experience with procurement according to accepted principles of international procurement. These findings corroborate those of the CPAR of 2002. Procurement Risk Assessment and Risk Mitigation The CPAR of 2002 covered a wide range of procurement aspects, including: (a) the degree to which the government promotes a culture of accountability; (b) the status of procurement staff, including salary structure and capabilities; (c) the degree to which procurement is free from political interference; (d) the existence of clearly written standards and procedures; and (e) the degree of efficiency,transparency and value-for-money. In each of these areas, the CPAR found that the Angolan procurement system needs major improvements, and, consequently, is considered a high risk. The assessments carried out during pre-appraisal and appraisal found that very little had changed since the publication of the report in this regard. No substantialprogress has been made with national procurement reform to date. Three major problems were identified:transparency,enforcement,and lack of capacity. Specifically: Weaknesses of the legal framework and lack of enforcement. While there are laws pertaining to public procurementmatters that are written but not adequatelypublicized or enforced (Decreesno 7/96 and 22-A192 regulate the main procurement aspects), some procurement practices have no legal basis but are vigorously enforced. Even when they are familiar with its rules, civil servants seem to ignore procurement law without being penalized, and enforcing of the law is erratic. Procurement regulations are not enforced because control mechanisms, either internal (within procurement entities) or external are missing at all levels. In addition, none of the state-owned enterprises visited during the CPAR had written internalprocurementrules, describingmethods and levels of authorization for spending public funds. The government Gazette does not seem to contribute to transparency and to the disseminationof regulations, as it is relatively expensive and apparentlynot widely distributed within the government itself. Inefficient and costly procedures and practices. The Angolan government acquires goods, works and services, but not in a consistent manner or according to rules generally recognized as binding. A number of procurement procedures and practices are neither economic nor efficient, and are not in compliance with recommended procurement best practices. Although nearly all goods are imported, most of them are procured through local suppliers. The two areas where practices need to be changed in order to enhance fairness and transparency in the procurement process are (a) adoption of open competitive bidding as the primary method of procurement, and (b) establishment of a transparent procurement system. There is currently no effective mechanism to lodge complaints in relation to the bidding process. The lack of oversight, transparency, and audit, has created many opportunities for corruption. Weak procurement organization and capacity. There is a lack of procurement capacity at all levels, both in Luanda and in the provinces, including poor record keeping in the ministries. This deficit in capacity is due to: (a) very little importance given to public procurement in general; and (b) lack of adequately trained personnel in the full range of activities linked to procurement functions. Weak audit and anti-corruption mechanisms. There is no oversight mechanism to ensure regular application of procurementregulations and no procurement audits. Procurementregulations are not enforced because internal control mechanisms in the procurement entities are lacking at all levels, as is the case for external mechanisms. Payment delays result in higher award prices. It is a common practice for governmentministries and other agencies to delay payments by more than 90 days to suppliersand contractors, while the internationally accepted practice is 30 to 45 days. Most payment delays are due to poor planning, especially in relation to the budgeting process and the actual funding available to pay against commitments. Although allowedby existingregulations, price adjustment clauses are not used, and the risk of inflation and the effects of devaluation of the local currency are passed on to suppliers and contractors. The expectation of slow payment has two damaging consequences. It imposes on the government's contract partners the burden to pre-finance contract payments for several months and therefore discourages participation of qualified businesses with limited liquid funds, particularly newly established Angolan businesses, and it encourages bidders to factor the cost of late payments into their bids, resulting in higher than necessary award prices. High construction prices in Angola may be explained, in part, by very slowpayments. The review of the capacity of individual entities involved in the implementation of the Economic Management Technical Assistance project confirmed the above general observations. However, it was noted that where large value contracts were handled, the ministrylagency had resorted to the use of external consultantsto conduct the main procurement activities on its behalf. Consequently, there is no adequate internally retained capacity even in such ministrieslagencies to conduct procurement on their own. In consideration of the national procurement situation and the need for the rapid implementation of the Multi-Sector Emergency Rehabilitation project, it was agreed at the start of Phase 1 that all the procurement for the project will be canied out centrally in the MinisQ of Planning (the PMIU). Other measures that were taken to minimize the risks of procurement problems to occur were: (a) provision of training in procurement to all local staff involved in the project; (b) preparation of a procurement plan with the participation of all the relevant ministrieslagencies; (c) creation of a monitoring and filing system for procurement actionsby the PMIU; (d) setting up of an procurement section in the PMIU, staffed with international and national procurement experts; (e) subject the large majority of contractsto prior review by the Bank, particularly in the first year; (f) preparation and use of appropriate procurement and other manuals; and (g) carrying out of regular procurement audits. The implementation of the agreed action plan that resulted from the CPAR is included in Economic Management Technical Assistance project. Various complementary forms of procurement training are being provided through the project to increase the procurement capacity in the country. The desegregation of the current procurement risk of the PMIU into assessment categories gives an average rating for such project-specific functions as procurement cycle management, organization and function, record keeping, staffing, and the general procurement environment. The risk remains for legal aspects, support and control systems, and private sector assessment. Although the overall risk for procurement in the country is high, gven the improvements in the procurement performance that have been made during the implementation of phase 1 of the project, primarily in the PMIU, and the fact that all procurement that has been carried out to date under Phase 1 has been satisfactory,the overall project risk for procurement is rated as average. The risk rating for Phase 1 was assessed as high, and the thresholds for the procurement methods and for the Bank's prior review were chosen during the appraisal of Phase 1 in accordance with the Bank's policies. All were set within the recommended limits, except for the threshold for NCB and for the prior review of works, which was set at $1 million instead f the recommended $500,000.The reason was that the track record of worksprocurement was found during the appraisal of Phase 1to be considerablybetter than for the procurement of goods and the selection of consultants. The thresholds for the methods of procurement for Phase 2 and for the prior review by the Bank would be the same as for Phase 1 in spite of the change in the project's procurement risk rating. This is partly because the overall national risk remains high and partly to maintain continuity with the implementation procedures that are being followed for Phase 1. The recommended frequency of procurement supervision is likewise unchanged from Phase 1. In conclusionit can be said that the mitigating measures for Phase 2 correspondmore to the requirements of a risk rating of high than one of average. D. Frequency of Procurement Supervision The fi-equencyof procurement supervision is proposed to be once every4 months in the first year and once every 6 months in subsequentyears. Every supervisionmission would also include a post-review of procurement decisions. Appendix 10: FinancialManagement Assessment and Proposed Arrangements Background The first phase of the EMRP totallingUS$92 million equivalent was approved by the Board on February 17, 2005. It became effective on May 12, 2005 and is expected to close on December 31, 2007. The second phase amounting to US$ 133 million equivalent, which is the subject of this assessment, will be implemented during the period 2007 to 2011.Thus the two phases will run concurrently during 2007 and 2008 (closing date of Phase 1 is likely to be extended). A Project Management and Implementation Unit (PMIU), under the Ministry of Planning (MOP), was set up to run phase I, and is the same unit that will be responsible for phase 11. The assessment of the FM arrangements for phase I1 therefore essentially implies "a review of the continuing adequacy of the FM arrangements for phase I, and an assessment of the need for any changes thereto to incorporatephase I1of the program." The review took place in November 2005, barely five months after the effectiveness of phase I Executivesummary The review concluded that the current arrangements for accounting, reporting and information management, auditing, staffing, and internal control, meet the Bank's minimum requirements for FM at the project. These arrangements are deemed acceptable because they are considered capable of recording correctly all transactions and balances, supporting the preparation of regular and reliable financial statements, safeguarding the entities' assets, and are subject to auditing arrangements acceptable to the Bank. The team's recommendation is therefore to retain the current arrangements in their entirety. Concerning the FM Action Plan for phase I, one item, pertaining to the hiring of an Internal Auditor, had not yet been finalized at the time of the review. Completion of this unfinished item, if remaining outstanding at negotiations, was proposed as an effectiveness condition for phase 11. This has since been fully compliedwith. Summary of the project The overall purpose of the proposed program (phase 1 and phase 2) is to help to build the foundation for long-term of reconstruction, economic rehabilitation, and the reestablishment of state administration throughout the country. The specific objectives of the program are to assist the government to: (a) improve rural incomes and enhance food security, especially in the provinces most affected by the conflict; (b) deliver essential educationand health services; (c) restore critical transportation links; and (d) strengthen capacity of government at all levels to formulate, prepare, implement, and manage medium and long-termdevelopmentprograms. The program will be implemented in two phases, of $92 million, and $ 133million equivalent,per above. During the first phase, the program focuses on supporting activities that address the most urgent needs and can be implemented quickly. These include: (a) activities to restart agriculture (particularly production and multiplication of seeds and planting material); (b) provision of drugs; logistical support, and refresher courses for nurses and auxiliary nurses to improve health services; (c) provision of teaching and learning materials and assistance to initiate teachers' training; and (d) support to restore water services in Luanda and three provincial capitals. During its second phase, the program will support rehabilitation or construction of rural feeder roads, trunk roads, electricity services,rural water supply, and water supply in a provincial capital, and urban infrastructure. It will also support the preparation of the medium-term sector strategies, capacity building, a decentralization pilot, in addition to continuing supportfor project management. Project components The proposed project comprises four components: (a) rural development and delivery of social services; (b) rehabilitation and reconstruction of critical infrastructure (roads and bridges, electricity, water supply, and urban infrastructure); (c) capacity building, institutional strengthening and development of sector strategies;and (d) management and monitoring of the project. Country issues Recent developments seem to indicate that the authorities are now committed to improving management of the economy. The last few months have seen an increasing willingness to publicly acknowledge the macroeconomic and transparency issues that affect the country. Important inroads have been made in granting public access to sensitive documents and reports, and addressing the issues of quasi-fiscal and extra-budgetary spending. Nevertheless, focused efforts on improving public financial management systems and practices, as well as on strengthening the "agencies of restraint" are still incipient. The Public Expenditure Management and Financial Accountability Review (PEMFAR) canied out in 2004 drew attention to these questions, without however carrying out a full review of corruption issues in the country. This could potentially be the object of an eventual Institutional and Governance Review (IGR) in the future. Summaryrisk analysis The objectives of the project's financialmanagement systemare to: ensure that funds are used only for their intended purposes in an efficient and economical way; ensure that funds are properly managed and flow smoothly, adequately, regularly and predictably in order to meet the objectivesof the project; enable the preparation of accurate and timely financialreports; enable project management to monitor the efficientimplementationof the project; and safeguard the project assets and resources. Furthermore, the followingare necessary features of a strong financial management system: the PMIU should have an adequate number and mix of slulled and experienced staff; the internal control system should ensure the conduct of an orderly and efficient payment and procurement process, and proper recording; the accounting system should support the project's requests for fundingand meet its reporting obligations to fund providers including Governmentof Angola, IDA, and other donors; the system should be capableof providing financial data to measure performance when linked to the output of the project; and independent, qualified auditor should be appointed to review the Project's financial statementsand internal controls. Risks and risk mitigation measures. The table below lists the key risks identified for phase 1 that continueto be relevant for phase 2. The PMIU may face these risks in achieving the above objectives, due to the weak control environment. The risk ratings have been updated to current, together with a summary of risk mitigation measures already in place or proposed to lessen the impact of the negativerisk: Risk Risk Risk Mitigation Measures Rating Corruption (Funds may not be used H Appropriately qualified and experienced staff have been in an efficientand economicalway appointed. and exclusively for purposes Internal control procedures were documented in the form intended) of a procedure manual and the guidelines are substantially being adhered to. Need to improve on the linkages S This is being addressed and the management of the PMIU between physical progress in the has set up procedures to ensure that there is a multi-sectorenvironmentand reconciliation between the physical progress and financial financialoutcomes outcomes. This will be followedup during supervision missions. Governmentmay be unable to M This is a possibility given the competing requirements on meet its funding obligations due to treasury, and the unpredictability of government flows. It budgetary constraints is proposed that a significantproportion of the counterpart fundsbe paid upfront to avoid possible disruption to activities when treasury is unable to remit when required to do so. The 'advance' arrangementhas worked well so far for phase 1. Implementing Entity: S PMIU staff are in place. None has any prior experience The PMIU has been working with Bank financedprojects.Trainingthereon established and may not have will be of paramount importance, the staff have already experiencein IDA financial participated in one FM training 'clinic' on Bank management and disbursement procedures organizedby the country office. procedures that are necessary for implementingthe project. Funds Flow: S The PMIU has established clear procedures for funds Delays in transfer of funds from transfer that meet the necessary requirements. Like other IDA to PMIU. Bankprocedures, implementationof the procedures still requires some training, and no replenishments had been processed 'smoothly' by the time of the review. Staffing: S Shortageof professionally A professional qualified accountant (the Financial qualified accountants. Controller-or InternationalFM Advisor) has been No knowledge of Bank procedures appointed. He has an academic and professional by the PMIU staff. background acceptableto IDA, but lacks familiarity with No basic knowledge of computer Bank financedprojects. operationnecessary to use the A graduate accountantis also in place, but requires IDA FMS being designed. specific training on accountingprocedures for Bank projects too. Both FM staff are still undergoing appropriatetraining on the project's chosen software.A second Accountant has recently been added onto the complement,in anticipation of the start of phase 2. Additional training and capacity building activitiesto enable implementation according to IDA procedures has been provided duringpreparation and the implementation of phase 1to date, and will continue to be provided. AccountingPolicies and M Control procedures are documented in the Financial Procedures: ProceduresManual (FPM). Adequacy of controls over the The FPM has been reviewed and found acceptableby the preparation and approval of Bank, but of course it now needs to be consistently transactions,payments, basis of implemented. accounting,accounting standards, The cash basis of accounting is in use at the project, which cash and bank transactions,project is in line with GOA accounting requirements. assets. Internal Audit: S An international firm to be responsible for InternalAudit Shortageof professionally (already in place). Its main function will be to carry out qualified internal auditor. regular reviews of the internal control system,as well as Position of head of internal audit at adherence to Bank procedures .This will be complemented the PMIU is vacant. by regular Bank supervision missions, including SOE reviews. PMKJ staff will continue to receive Bank procedures related training, and the Internal Audit firm will itself need to learn the applicable Bank procedures for this project. External Audit: M Annual external audit will be undertaken on TORS Timely independent audit of acceptableto the bank. project accounts and records may Procurement of qualified external auditors has been not be achieved. completed,and their first product for phase 1,the audit of the PPF and project accounts, has been submittedto the Bank in time with no qualification. Annual audit reports on the financial statementswill be submittedto the Bank within six months after year-end. Timely follow up on management letter issues will be emphasized. Reportingand Monitoring: S Annual and quarterly financial statementswill be Management report not prepared in produced, although the quarterly FMR are expectedto be a timely manner. for information only, as opposed to disbursementFMR. Bank reconciliation statementsnot Financial statementsneed to be produced in a timely prepared on a timely basis. manner for planning, control and decision-making Budget monitoring: comparison of purposes. actual with budget not carried out An FM system capable of producing the necessaryreports on a regular basis. has been installed and training thereon is underway. Reports comparing budget with actual expenditureswill need to be prepared as part of quarterlyFMR s, and action taken on any significantvariances. Information Systems: M New FM system has been installed at the PMIU. It has a The entities' FM systems are proven track record at an existing project, and should meet manual and financialstatements the project's reporting requirements. may not be produced timely. Appropriate trainingwill be given to staff. I Overall ControlRisk I s Risk Rating -H (High Risk), S (Substantial Risk), M (Modest Risk),L (Low Risk) N (NeRligibleRisk) Based on the above update, the cwrent overall project FM risk is rated substantial, a slight improvement on the high risk rating for phase 1.The improvementarises from the little experience gained from running the first phase (five months), and the success in filling key fiduciary positions. The positions have however been filled by staff with no prior Bank project management experience, and who are yet to deliver on phase 1. Hands on project implementation experience and further training on Bank procedures will certainly help, and the mitigation measures will continue to be reviewed and updated as necessary duringthe life of the project. Strengthsand weaknesses The project financial management for phase 2 benefits from the following salient features: Financial management and accounting will be handled by the same qualified staff managing phase 1. The international advisor position will be retained for the foreseeable future; PMIU will use the selected accounting software which can produce the Financial Monitoring Reports; and facilitate monitoring of the project activities by providing the linkage between physical progress and financialoutcomes; PMIU has already an adequateFinancial ManagementManual. The project financial managementis weakened by the following salient features: Existing weak administrative capacity outside the project which could leave control systems weakened and delay implementation of some activities; Possible delays from government in providing the counterpart funding; Multi-sector nature of the activities due to the design of the project involving several line ministries and multiple entities. Institutional and implementationarrangements The project's activities will be managed by the PMIU under the Ministry of Planning set up for the implementation of phase 1. The PMIU is headed by the Project Coordinator - Vice-Minister of Planning, assisted by a Project Administrator (a high level officer), and includes a locally recruited Accountant and Procurement Officer. The PMIU is assisted by the international consultants for project monitoring, financial management and procurement. An additional Accountant has recently been added onto the compliment to assist with phase 2. Overall policy guidance An inter-ministerial steering committee overseas the operations of PMIU. It deals with overall policy guidance matters, including those for donor funded projects. It is chaired by the Minister of Planning. Its members consist of the line ministries involved in the project's activities (Planning, Finances, Health, Education, Public Work, Energy, Agriculture, Transport and Environment). Flow of funds Bank Accounts In line with the arrangement for phase 1, the followingbank accountswill be maintained for phase 2: Designated Account: Denominated in US dollars. Disbursements fiom the IDA Financing will be deposited on this account. PMlU Project Account: This will be denominated in local currency, to house counterpart funds. The bank accounts shall be opened at the Banco Poupanca Credito (BPC) prior to effectiveness, to enable the timely transfer of the initial deposit when approved.The initial deposit will be based on an estimate of four months projected expenditures. Authorized signatories for both accounts will be nominated by the Minister of Planning, notified to the Bank, and documented in the Financial ManagementManual. Funds flow arrangementsfor the project (through the two bank accountsabove) are as follows: IDA will make an initial advance from the proceeds of the Financing by depositing into the USD Designated Account held at the BPC (commercial bank). Eligible expenditures fiom the Designated Account will be replenished through submission of withdrawal applications and against summary sheet and approved statements of expenditures(SOE s). While the activities are implemented in provinces, the payments will be done centrally fromthe PMIU office in Luanda. Counterpart funds will be deposited in the Project Account in accordance with estimated project requirements. The Government will allocate and pay over counterpart funds in accordance with the treasury's prevailing financial regulations. Counterpart funds are allocatedthrough the normal central governmentbudgetaryprocess. Financial management arrangements The PMIU has a Finance Department headed by the internationally recruited Financial Controller (FC). For phase I, the FC was supported by an Accountant, while for phase 11, the number of Accountants has gone up to two, to respond to the possible increase in work load. The Finance team is in charge of maintaining the books and records of the projects financed by all the donors. Additional accountants may be added to the complimentif deemed necessary during implementation. The accounting staff (financial controller, accountants) do not have prior experience working with Bank supported projects. They will therefore require mentoring and training in the application of Bank procedures, which can be achieved by attending 'annual Procurement, FM, and Disbursement clinics' held in-country and organized by the Country Office, as well as regular FM and Disbursement courses run by partner institutionsacross the continent, in conjunctionwith AFTFM. Internal Controlsand Financial Management Manual The project's internal controls and procedures are documented in a Financial Management Manual which has been reviewed by the Bank and is considered satisfactory.This is a live document which is updated as appropriate with any changeswhen they occur. The FM Manual documents the major transaction cycles of the project, funds flow processes, the accounting records, supporting documents, and chart of accounts. It also summarizes authorization procedures, the financial reporting process, financial and accounting policies for the project, budgeting procedures, financial forecasting procedures, procurement and contract administration monitoring procedures, procedures undertaken for the replenishment of the Special Account; and auditing arrangements. Planning and Budgeting Per above, detailed procedures for planning and budgeting are documented in the Financial Management Manual. Financial projections for the life of the projects (analyzed by year) will be prepared. Annually, cash budgets for the ensuing year are prepared (analyzed by quarter) based on the work program. The annual cash budget will be sent to the TTL at least two months before the beginning of the project fiscal year. Books ofAccounts and Chart ofAccounts IDA and counterpart funds are accounted for by the project on a cash basis. This is augmented with appropriate records and procedures to track commitments and to safeguard assets. Reporting is in the currency of the Designated Account, USD. The books of accounts facilitate the preparation of relevant monthly, quarterly and annual financial statements,including information on the following: total project expenditures total financial contribution from each financier total expenditure on each project component/ activity, and analysis of that total expenditure into civil works, various categories of goods, training, consultants and other procurementand disbursement categories Annual financial statements are prepared in accordancewith International Accounting Standard (IASs). Reporting and monitoring Formats of the various periodic financial monitoring reports to be generated from the financial management systemwill followthose for phase 1.There will be clear linkages between the informationin these reports and the Chart of Accounts. The financial reports will be designed to provide quality and timely information to project management, implementing agencies, and various stakeholders on project performance. Again in line with phase 1,the following quarterly FMR will be produced by the PMlU. They are:- * Financial Reports: JSources and Uses of Fundsby Funding Source JUses of Fundsby Project ActivityIComponent Physical Progress (OutputMonitoring) Report Procurement Report The project may later become eligible to use the report-based disbursement method, provided that during project implementation, it (a) sustains a satisfactory financial management rating during project supervision; (b) submits FMR s consistent with the agreed form and content; and (c) submits Project Audit Reports by the due dates. The project would then be required to submit to the Bank the following additional information in its FMR s in order to support report-based disbursement: Designated Account (SA) activity statement SA Bank statements Summary Sheetof expenditures under SA for contracts subjectto prior review Statement of Expenditure of expenditures under SA for contracts not subject to prior review. The Project Financial Statementswill be composed of 1. A Statement of Sources and Uses of Funds / Cash Receipts and Payments for each funded phase which recognizes all cash receipts, cash payments and cash balances controlled by the entity; 2. The Accounting Policies Adopted and Explanatory Notes. The explanatory notes should be presented in a systematic manner with items on the Statement of Cash Receipts and Payments being cross referenced to any related information in the notes for each funded phase. Examples of this information include a summary of fixed assets by category of assets, and a summary of SOE Withdrawal Schedule,listing individual withdrawal applications; and 3. A Management Assertion that Bank funds have been expended in accordance with the intended purposes as specified in the relevant World Bank legal agreement for each fundedphase. Information systems The PMIU has installed CONCEPT accounting software. This is a tried and tested system, being successfully used at another Bank supported project, FAS. At the EMRP PMIW, the system is already installed on at least one project computer, but the process still needs to be completed, with the setting up of a local areanetwork to facilitate sharing of information, customization of reports, and training of staff. Audit arrangements Internal Audit Considering the overall risk environment there is a need to retain in place the strong internal control mechanism and quality assurance at all levels established for phase 1. The qualified Internal Auditor needs to be retained for phase 2, on the same terms of reference, updated to reflect requirements on the ground. External Audit The government will ensure that the auditors contracted to carry out the audit of the project continue to meet IDA requirements in terms of independence, qualificationsand experience. The external audit will continue to cover all Bank funds, other donors funding the project, and counterpart funds. Consolidated Audited Project Accounts, talung into consideration the current Audit Policy Guidelines of the World Bank, should be produced. The format to be adopted is documented in the financial management manual. Besides expressing a primary opinion on the audited financial statements in compliance with International Accounting Standards, the audit report should be submitted to IDA within six months of the end of each financial year. The auditor is required to prepare a separate Managementletter giving observationsand comments,and providing recommendations for improvements of accounting records, systems, controls and compliance with financial covenants in the Financing Agreement. Procurement A Bank Procurement Specialist (PS) carried out an assessment of the procurement capacity of the PMIU for phase 1, and recently updated this for the addition of phase 2. There are no procurement issues that materially affect the findings of the FM review. Disbursementarrangements All costs are inclusive of taxes and duties. According to the approved country financing parameters, Angola can get financing of up to 100% in certain areas, as assessed by the project team. The team will determine what contributions government should make, if any. The disbursement schedule is expected to be as follows: Phase 1:US$2 million (5 percent) is expected to be disbursed during IDA fiscal 2005, US$21 million (421 percent) during fiscal 2006, US$19 million (37 percent) during fiscal 2007, and US$8 million (167percent) during fiscal 2008. Phase 2: US$9 million (9 percent) is expected to be disbursed during IDA fiscal year fiscal 2008, US$29 million (28 percent) during fiscal 2009, US$35 million (34 percent) during fiscal 2010, US$25 million (25 percent) during fiscal 2011, and US$4 million (4 percent) during fiscal 2012. Designated Account As for phase 1, the project will have only one Special Account, opened in a specific commercial bank acceptableto IDA, per 'flow of funds' above. Disbursements from IDA would be initially made on the basis of incurred eligible expenditures (transaction based disbursements). The Designated Account would be operated on the basis of an advance, which advance would be used by the Borrower to finance IDA share of program expenditures under the proposed Financing. Where appropriate, the direct payment method may be used, involving direct payments from the Financing to a third party for works, goods and services upon the Borrower's request. Payments may also be made to a commercial bank for expenditures against IDA special commitments covering a commercial bank's Letter of Credit. The Disbursement Letter stipulates a minimum application value for direct payment and special commitmentprocedures. The Designated Account allocation will initially be set at USD 8.5 million, covering an estimated four months of eligible expenditures financed by IDA. Upon Grant effectiveness, the PMIU shall submit a withdrawal application for an initial deposit to the Special Account drawn from the IDA Grant, in an amount not to exceed USD 4.25 million. The PMIU shall submit a withdrawal application for the remaining balance of USD 4.25 million of the authorized allocation when the aggregate amount of withdrawals from the grant account plus the total amount of all outstanding special commitments entered into by IDA shall be equal to or exceed the equivalent of SDR6.2 million for phase 2 of the project. Replenishment of funds from IDA to the Designated Account will be made upon evidence of satisfactory utilization of the advance, reflected in SOEs andlor on full documentation for payments above SOE thresholds. The Designated Account would be used for all payments lower than twenty percent of the authorized allocation, and replenishment applications would be required to be submitted regularly on a monthly basis. If ineligible expenditures are found to have been made fiom the Special Account, the Borrower will be obliged to refund the same. If the Designated Account remains inactive for more than six months, the Borrower may be requested to refund to IDA amounts advanced to the Designated Account. IDA will have the right, as reflected in the Financing Agreement, to suspend disbursement of the finds, if reporting requirementsarenot compliedwith. Use of Statementsof Exaenditures(SOEs) All applications for the withdrawal of proceeds from the grant will be fully documented, except for: (a) contracts with an estimated value of less than US$1,000,000 for works packages; (b) contracts with an estimated value of less than US$200,000 for goods; (c) contracts with an estimated value of less than US$100,000 for consulting firms and less than US$50,000 for individual consultants; (d) grants; (e) operating costs; and (0 training. Documentation supporting all expenditures claimed against SOEs will be retained by PMIU, and will be available for review when requested by IDA supervision missions and auditors. All disbursements are subject to the conditions of the Financing Agreement and the procedures defined in the Disbursement letter. Financial management actionplan The action plan below indicates the actions to be taken by the project to strengthen the financial management systems, and the datesthat they are due to be completed. Action Date due by Responsible 1 Retain international financialNone - MOP&IDA management advisor (the Financialcontinuing Controller), in addition to the project accountants at the PMIU. 2 Complete installation of the LAN to June 2006 PMIU facilitatesharingof accounting (done) information on CONCEPTaccounting. Conclusion of the assessment The description of the project's financial management arrangements above indicates that the project satisfies the Bank's minimum requirements under OP/BP10.02. In order to complete the process of establishing an acceptable control environment and to further mitigate financial management risks, the remaining actions detailed in the Financial Management Action Plan above need to be completed in the agreed timefiame. The project financial management risk is upgraded to substantial provided the Financial ManagementAction Plan above is satisfactorily completed. Effectiveness conditionsandfinancial covenant There will be no effectiveness conditions (this assumes that the hiring of an internal auditor has been completed satisfactorily as indicated). The financial covenants will be standard per the Bank's Financing agreement. Supervisionplan A supervisionmission will be conducted at least every six months. The mission's objectiveswill include that of ensuring that strong financial management systems are maintained for the project throughout its life. A review will be carried out regularly to ensure that expenditures incurred by the project remain eligible for IDA funding. The Implementation Status Report (ISR) will include a financial management rating for the project. Abbreviations: DCA - Development Credit Agreement Government Government of Angola MOP - Ministry of Planning PMIU - Project Management and ImplementationUnit Appendix 11: ProcurementPlan 1. GENERAL ProjectInformation Country: Angola Project: Phase 2 of the Emergency Multisector RehabilitationProgram (EMRP) FinancingIGrantno.: Borrower: Republic of Angola Project ImplementingAgency: Project Management and Implementation Unit (PMIU) at the Ministryof Planning Participating Sector Ministries: Ministryof Transport Ministryof Energy and Water Ministryof Agriculture ProvincialDirectorate of Public works ParticipatingSector Agencies: INEA, DNA, EDEL, ENE, DNE, IAA, SENSE, IDA Procurement Information Bank's approval date of the procurement April 9,2007 plan: Date of General Procurement Notice: Period covered by this procurement plan: May 1,2007- November 30,2008 Retroactivefinancing: None 2. GOODS, WORKS AM)NON-CONSULTING SERVICES Prior Review Thresholdsfor Goods,Works and Non-ConsultingServices The followingtable showsthe contractsby procurement method for which procurement decisions are subject to Prior Review by the Bank as stated in Appendix 1 to the Guidelines for Procurement. The thresholds for the applicable procurement methods have been determined by tahng into account the results of an assessment of the procurement capacity of the implementing agency and the participatingsector Ministriesand Agencies listed above. ProcurementMethod Prior Review Threshold Comments 1 ICB and LIB for Goods 200,000 or more All contracts 2 NCB for Goods Less 200,000 and less than First 3 contracts 30,000 3 ICB for Works 1,000,000or more All contracts 4 NCB for Works Less than 1,000,000and First 3 contracts more than 50,000 5 Shopping Less than 50,000(works) First 3 contracts Less than 30,000(Goods) 6 Direct Contracting All contracts 7 United Nations Agencies All contracts Prequalification: Bidders for Lucala Negage Road works (about 150Km), Feeder Roads Rehabilitation Works in the Provinces of Bie (Lot 1) and Malange (Lot 2) and Rehabilitation of distributionnetworks in Kuanza Norte, Uige, Malange, Moxico and Bie provinces works shall be prequalified in accordance with the provisions of paragraphs 2.9 and 2.10 of the Guidelinesfor Procurement. Republic of Angola EMRP-Emergency Multisector Recovery Program Procurement Plan Phase 2 ProcurementCategory:Works I 2 4 5 6 7 8 9 Ref Contract (Description) Procurement Pre Domestic Review Expected Comments No. Method qualification Preference by Bank Bid Opening Date NetworkRehabilitation, Rese~oirS Tender documents was 1-2 W and Home connections. N'Dalatando ICB NO NO PRIOR July/03/06 prepared in Phase 1- W2 (Lot 2) (Malange Lot 1) Rural water supply Borehole - and Shadowwells (70), small 2W' UN Agency scale system (5) and water points NO NA PRIOR NA W1 UNICEF (50) Worksin Critical Pointsof the 2U SewerageSystemof Luanda ICB NO YES PRIOR May115108 W1 Works of Drainage in CriticalPoints 2U of the Downt~wnof Luanda ICB NO YES PRIOR Mayt15108 W2 Worksfor the Erosion Controlin Moxico Province (Drainage. Canals, 2U Land fill, Lateral Ways, ICB NO YES PRIOR June/l5/08 W3 Reforestation) Feeder Road Rehabilitation in the 2A Provinces Bie(Lot 1)and ICB YES YES PRIOR Feb/10/08 W1 Malange (Lot 2) 2R Lucala Nadage Road works 150 ICB YES YES PRIOR Aug/30107 W1 km with bridges Ie 2p ENE-Rehabilitation of ICB YES YES PRIOR Aug/30/08 W1 distribution Network Ndalatando, Uige, Malange, Moxico, BiO 2P ENE-EDEL- extension of the ICB NO YES PRIOR Aug/30/08 W2 15KV in Luanda Procurement Category:Goods 1 2 4 5 6 7 8 9 Ref Contract (Description) Procurement Pre Domestic Review Expected Comments Method qualification Preference by Bank Bid opening 2p ENE-EDEL-Supply and LCB NO NO PRIOR Aug/01/07 installation electrical meters 3. SELECTION OF CONSULTANTS Prior Review Thresholds for Consultants The following table shows the value of contractsby procurement method for which procurement decisions are subject to Prior Review by the Bank as stated in Appendix 1 to the Guidelinesfor Procurement. The thresholds for the applicable procurement methods have been determined by taking into account the results of an assessment of the procurement capacity of the implementing agency and the Participating SectorAgencies listed above. A request for expressions of interest will be published in the main national newspaper,Journal de Angola, in accordance with paragraph 2.5 of the Guidelinesfor the Selection of Consultants, especially for the design and supervision of road rehabilitation, electricity supply, and rehabilitation and expansion of urban water supply. They will also include environmental assessment and monitoring and studies and technical assistance for rural development and training. ProcurementMethod Prior Review Comments Threshold 1 QCBS 100,000 or more All contracts 2 ICS 50,000 or more All contracts 3 ICS Below 50,000 First 3 contracts 4 CQSandLCS First 3 contracts 5 SSS All contracts ProcurementCategory: Consultant 1 2 4 5 6 7 8 Ref Description of Assignment Selection EOI Review by Expected proposals Comments No. Method Bank submissiondate Set up of public enterprisesin 2W three Provinces QCBS YES PRIOR Sep/30/07 C1 T A for DNA in Development 2W National StrategicSectorand QCBS YES PRIOR Sepl30107 C2 Cities Master Plans 2~ Works Supervision Rural water in QcBs YES PRIOR Nov/30/08 ~3 Moxico Works Supervision for Drainage 2U and SewerageLuanda QCBS YES PRIOR Marl15/08 CI Works supervision for Control 2U Erosion in Moxico QCBS YES PRIOR Ap/15/08 C2 2A Supervisionof the Rehabilitation QCBS YES PRIOR DecI05107 C1 of Feeder Roads 2 0 ICS YES PRIOR Sepl30/07 C1 TA for Project Management Unit 2 0 Trainingto staff CQS YES PRIOR Nov/15/07 C2 20 Program Management Procedures CQS YES PRIOR Sepl30107 C3 Manual and -FMS-Support 2 0 IntegratedMulti modal Transport CQS YES PRIOR Oct/15/07 C4 Strategy 2 0 LCS YES PRIOR Sepl30107 C5 Project Management -Audits - 2 0 CQS YES PRIOR Oct/30/07 C6 Central PSP Unit study 2 0 CQS YES PRIOR Marl30108 C7 Central PSP Unit implementation Environmental Management Plan CQS YES PRIOR JuIlO1107 Implementation (100 MM) 20 Descentralization Fund IDA to Decentralization DSG YES PRIOR NA C9 SupportGrants Pilot Operation 2R EngineeringServices YES PRIOR Oct~30106 C l Rehabilitation Primary network QCBS Lucala Nadage 2P EngineeringServices-Electricity QCBS YES PRIOR Jun/30/08 EDEL ConsultantElectricity EDEL 2P Identificationof Consumersand QCBS YES PRIOR Sepl30107 C2 Training for commercial 2P ConsultantElectricity Technical ICS YES PRIOR Jad30108 C3 Assistance to the Regulator 2p ConsultantElectricity DNE QCBS YES PRIOR Jan/30/08 c 4Assistance to the Regulator LEGENDTO PROCUREMENTPLAN ProcurementMethods: ICB International CompetitiveBidding NCB National CompetitiveBidding QCBS Qualityand Cost Based Selection CQS SelectionBased on Consultants' Qualifications LCS Least Cost Selection SSS Single-Source Selectionof Consultants ICS Individual Consultants Selection Non-Consulting Servicesusually include,but are not limited to, procurement from United Nations agencies,NGOs and BOO/BOT/BOOT(Build, Own, Operate;Build, Operate, Transfer; Build, Own, Operate, Transfer) EOI Expression of Interest NA Not applicable Reference numbers: (e.g. IA, GI) Phase 2 Subcomvonent A Agriculture and Rural Development R Roads P Electric Power W Water and Sanitation U Urban Services 0 OtherContracts Procurement method G Goods W Works C Consulting services N Non-consulting services(such as UN agencies,NGOs and BOT/BOT/BOOT) Serialnumber: 1,2,3.