Document of The World Bank Report No: 18398-WS WS-PE-52293 PROJECT APPRAISAL DOCUMENT ONA PROPOSED CREDIT IN THE AMOUNT OF SDR 10.3 MILLION (US$14.4 MILLION EQUIVALENT) TO THE INDEPENDENT STATE OF SAMOA FOR AN INFRASTRUCTURE ASSET MANAGEMENT PROJECT MARCH 11, 1999 Transport Sector Unit East Asia and Pacific East Asia and Pacific Regional Office CURRENCY EQUIVALENTS (Exchange Rate Effective February 8, 1999) Currency Unit = Samoan Tala-WST WST 1.00 = US$0.33 US$1 = WST 2.986 FISCAL YEAR July 1 - June 30 ABBREVIATIONS AND ACRONYMS AIMS Asset Information and Management Systems AusAID Australian Agency for International Development CHZ Coastal Hazard Zone CIM Coastal Infrastructure Management CIMP Coastal Infrastructure Management Plan CIMS Coastal Infrastructure Management Strategy DLSE Department of Lands, Survey and Environment EA Environmental Analysis EIA Environmental Impact Assessment GoS Government of Samoa IA Implementing Agency IAM-PSC Infrastructure Asset Management Program Steering Committee IAMP Infrastructure Asset Management Program IATA International Air Transport Association ICAO International Civil Aviation Organization IDA International Development Agency NZODA New Zealand Overseas Development Assistance PM Project Manager PCM Project Component Manager PMR Project Management Report PMU Project Management Unit PWD Public Works Department PWDIS Public Works Department Institutional Strengthening Study (Phase 1, 2) RAMS Road Asset Management System SAA Samoa Airport Authority SAAFIA Samoa Airport Authority and Faleolo International Airport Study SES Statement of Economic Strategy TCB Transport Control Board TD Treasury-Department USD United States Dollar VFR Visiting Friends and Relatives WST Samoan Tala Regional Vice President: Jean-Michel Severino, EAPVP Country Director: Klaus Rohland, EACNI Sector Manager: Jitendra N. Bajpai, EASTR Task Team Leader/Task Manager: William D. 0. Paterson, EASTR Samoa Infrastructure Asset Management Project CONTENTS A. Project Development Objective ..................................................................2 1. Project development objective and key performance indicators ...............................................2 B. Strategic Context ..................................................................3 1. Sector-related CAS goal supported by the project ..................................................................3 2. Main sector issues and Government strategy . .................................................................4 3. Sector issues to be addressed by the project and strategic choices ............................................5 C. Project Description Summary ..................................................................7 1. Project components ..........................................................9 2. Key policy and institutional reforms supported by the project .................................................9 3. Benefits and target population .......................................................... 10 4. Institutional and implementation arrangements .......................................................... 10 D. Project Rationale ................................................................. 12 1. Project alternatives considered and reasons for rejection ........................................................ 12 2. Major related projects financed by the Bank and/or other development agencies .................. 13 3. Lessons learned and reflected in proposed project design ...................................................... 13 4. Indications of borrower commitment and ownership .............................................................. 14 5. Value added of Bank support in this project ..................................................... ............ 14 E. Summary Project Analyses ................................................................. 14 1 . Economic ................................................................. 14 2. Financial ................................................................. 15 3. Technical ................................................................. 16 4. Institutional ................................................................. 16 5. Social ................................................................. 17 6. Environmental assessment ................................................................. 18 7. Participatory approach ................................................................. 19 F. Sustainability and Risks ................................................................. 20 1. Sustainability ................................................................. 20 2. Critical risks ................................................................. 21 3. Possible controversial aspects ................................................................. 21 G. Main Loan Conditions ........................ 21 1. Effectiveness conditions .................. 21 2. Other .................. 21 H. Readiness for Implementation ......................... 22 I. Compliance with Bank Policies ........................ 23 Annexes Annex 1. Project Design Summary .24 Annex 2. Detailed Project Description .32 Annex 3. Estimated Project Costs .37 Annex 4. Economic Analysis Summary. 3 8 Annex 5. Financial Summary for Revenue-Earning Project Entities .49 Annex 6. Procurement and Disbursement Arrangements .51 Table A. Project Costs by Procurement Arrangements .53 Table Al. Consultant Selection Arrangements .54 Table B. Thresholds for Procurement Methods and Prior Review . 55 Table C. Allocation of Loan Proceeds .56 Annex 7. Project Processing Budget and Schedule .57 Annex 8. Documents in Project File .58 Annex 9. Statement of Loans and Credits .60 Annex 10. Country at a Glance .62 Annex 11. Letter Of Development Program .64 Annex 12. Environmental Analysis: Executive Summary .70 Annex 13. Financial Management, Accounting and Reporting Capability of Executing Agencies .76 Annex 14. Public Works Department Restructuring: Executive Summary .80 Map IBRD 29821 Samoa Infrastructure Asset Management Project Project Appraisal Document East Asia and Pacific Regional Office Papua New Guinea and Pacific Islands Country Unit Date: March 5, 1999 Task Team Leader/Task Manager: William Paterson Country Director: Klaus Rohland Sector Manager: Jitendra N. Bajpai Project ID: WS-PE-52293 Sector: Transport Program Objective Category: Environmentally Sustainable Development Lending Instrument: Adaptable Program Loan Program of Targeted Intervention: [ ] Yes [X] No Program Financing Data Estimated Implementation Period (Bank FY) APL Indicative Financing Plan Borrower IDA Others Total Commitment Date Closing Date US$ % US$ million US$ million million IAM 1 Credit 14.4 77 4.4 18.8 February 1999 December 2002 GoSamoa IAM 2 Credit 9.6 67 4.6 14.2 July 2002 December 2006 GoSamoa Total Credit 24.0 73 9.0 33.0 February 1999 December 2006 Project Financing Data Loan [X] Credit Guarantee Other [Specify] For Loans/Credits/Others: Amount (US$M/SDR M): US$ 14.4 million Proposed terms: [] Multi currency [X] Single currency, SDR Grace period (years): 5 [X] Standard Variable [ Fixed [] LIBOR-based Years to maturity: 40 Commitment fee: 0.50% Service charge: 0.75% Financing plan (US$ M): Source Local Foreign Total Government 3.1 0.0 3.1 Cofinanciers AUSAID (Joint Financing) 0.5 0.8 1.3 IDA 4.5 9.9 14.4 Total 8.1 10.7 18.8 Borrower: Independent State of Samoa Guarantor: n.a. Responsible agencies: Treasury Department, Department of Public Works, Samoa Airport Authority, Department of Lands, Surveys and Environment. Estimated disbursements (Bank FY/US$ M): 1999 2000 2001 2002 2003 IDA Annual 0.6 5.4 5.4 2.4 0.6 IDA Cumulative 0.6 6.0 11.4 13.8 14.4 AusAID Annual 0.1 0.7 0.5 0 0 AusAID Cumulative 0.1 0.8 1.3 1.3 1.3 Project Implementation Period: 1/99 to 06/02 Expected effectiveness date: 6/30/99 Expected Closing Date: 12/31/02 Project Appraisal Document Page 2 Title: Infrastructure Asset Management Project Country: Samoa A: Project Development Objective 1. Project development objective and key performance indicators (see Annex 1): The purpose of the Infrastructure Asset Management Program (IAMP) is to achieve the following objective: Transport and coastal infrastructure assets are economically, environmentally and socially sustainable and managed by an effective partnership of all stakeholders. The Program will be implemented over a period of 8 years in two primary phases, as follows and meeting the targets shown in the table below: * IAM- 1: Meeting Vital Priorities and Strengthening Management (1999-2002) * IAM-2: Investing for Sustainable Growth and Protection (2002-2006). IAMP Phases: Phase IAM-1 Phase IAM-2 Period January 1999 - June 2002 January 2002 - December 2006 Project Development Vital Infrastructure Priorities and Strengthened Investing for Sustainable Growth and Objective Management Protection Key Program Outputs * international air transport infrastructure is * extended road access and safer roads for sustainably adequate for economic growth poverty alleviation and economic development * reliability and safety of road system assets is improved * environmentally sustainable protection and resource use in whole coastal zone * environmentally and socially sustainable management of coastal infrastructure is * restructured management of environment, initiated natural resources, and lands * management of infrastructure assets is * asset management systems demonstrate becoming service-oriented involving public, economic and financial sustainability for private and community stakeholders airport, road and coastal infrastructure assets Criteria for: * Faleolo airport operation complies with ICAO * All primary road, international aviation, i) Subsequent Adaptable standards; terminal processing satisfies IATA and public coastal infrastructure are under Loan Financing (IAM-I to Category C. asset management and information IAM-2) and systems ii) End-of-Program * Road sector plan (RSP) endorsed by Cabinet * At least 60% of GoS road and coastal infrastructure developments satisfy * Coastal Zone Infrastructure Strategy endorsed economic, environmental and social by Cabinet appraisal and priorities of approved sectoral plan * Public Works Department (PWD) new role and * At least 80% of coastal communities functions endorsed by Cabinet participate with Coastal Infrastructure Management Strategy (CIMS) * DLSE reform plan endorsed by Cabinet * Public cost recovery targets achieved: 80% full costs for aviation (SAA), and 100% of preservation costs of primary roads (PWD) * New PWD organization for policy and asset manager role is fully operational and staffed, with at least 70% overall private sector provision of works and services. * 80% of coastline on Upolu and Savai'i adequately protected for 20-yr storm events Project Appraisal Document Page 3 Title: Infrastructure Asset Management Project Country: Samoa 2. Project development objective and key performance indicators (see Annex 1): The development objective of the first phase Project, IAM- 1, is as follows, and the end-of-project indicators are detailed in Annex 1: * Key infrastructure assets are upgraded and are sustainable under service-oriented management B: Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project (see Annex 1): CAS document number: N/A Date of latest CAS discussion: N/A Recent Economic and Social performance As a small island economy, Samoa's development is constrained by a very small internal market, distant external markets, a narrow production base, high unit costs of infrastructure from low utilization rates, and vulnerability to external economic shocks and natural disasters. The economy is dominated by its primary sectors (40% GDP), is structurally narrow and heavily dependent on foreign aid flows (17% GDP) and remittances from expatriate Samoans (20% GDP). GDP per capita in 1997 was $US1,150. The Samoan economy has long been characterized by low productivity and low growth. Following the adverse economic shocks of the early 1990s, including two severe cyclones, the taro leaf blight and financial crisis linked to Polynesian Airlines, economic performance has improved considerably during the mid- 1990s. This reflects a recovery in agricultural production, reconstruction of infrastructure following the cyclones, a rebounding of tourism, and a tight fiscal stance. Real GDP increased by about 10 percent in 1995 and by a further 6 percent in 1996 to reach its pre- cyclone level of 1989. The country now enjoys a healthy international reserve position, a moderate rate of inflation, and a relatively stable exchange rate. Macroeconomic stability has been achieved, inter alia, through sharply shrinking the fiscal deficit, rebuilding private sector confidence and maintaining political stability and continuity in Government administration. Samoa's 167,000 people are concentrated on two main islands, with 53 percent of the population living in small, coastal villages. Their standard of living is relatively high and uniforrn, reflecting the Samoan commitment to community and social institutions. Over the past several decades, Samoa has improved the health status of its population by providing basic health services and has increased access to education. In Samoa, as elsewhere in the Pacific, the indigenous culture and tradition are the fundamental parameters which guide national life. While modified by historical and colonial experience, the traditions exert significant control over natural resources and have profound influences on national policies. The chiefly matai (clan head) system controls all local government and extends into high political offices. Over 80% of land is under matai control, sustaining nearly 70% of the active population and about half of GDP. There are about 300 villages in Samoa, each with 20-40 matai representing an extended family ('aiga) in the village council (fono). Matai titles are ranked, often superseding ranks in the business or political domains and may, for example, dictate employment or other business obligations. The overarching framework for economic and social development in Samoa is set by the Government's Statement of Economic Strategy (SES). The Strategy, which was first announced in January 1996, is focussed on creating an enabling environment for the private sector, liberalizing the financial sector, strengthening human resource development and reforming the public sector. The SES has been updated on two occasions, with the 1998/99 SES published in May 1998. Progress with the reform agenda has been significant. Fiscal and monetary policies have been sound in recent years, leading to improved outcomes for inflation and the external position. Import tariffs and the tax system have been rationalized and the financial sector liberalized. While a start has been made on public sector reform, progress has been slower than envisaged. The recent announcement by the Prime Minister of the Project Appraisal Document Page 4 Title: Infrastructure Asset Management Project Country: Samoa establishment of an independent National Reforn Commission, with a charter to bring a wider cross section of government and civil society into the refonn process, will strengthen commitment to the reform agenda. Comparative Advantage and Partnerships The main sources of development financing for Samoa have been the Asian Development Bank, Japan, Australia and New Zealand. This is not expected to change. The World Banks' program in Samoa has been relatively modest, with Samoa receiving 10 IDA credits since 1975. The lending program has had a strong focus on the infrastructure sector, specifically roads, power and telecommunications. Other sectors where the Bank has been involved includes agriculture and the finance. The Bank's lending experience has generally been mixed, with institutional strengthening aspects of a number of past projects proving problematical. This has been particularly so where inadequate account was taken of the social and cultural setting or the project was based on an over-estimation of the capacity of agencies to absorb institutional strengthening. In terms of non-lending services, the main focus has been on public sector expenditure, health and education. The interventions in the health and education sectors have provided useful inputs to the development of Government of Sarnoa strategies in those sectors. More recently the Bank has supported work focussed on the social fabric of Samoa. A study of stakeholder participation has provided insight on the linkages between the traditional, public and private sector domains and has provided important background for the preparation of this project. The Samoan Reform Agenda and Involvement of Development Partners Prerequisites for Sustainable Focus of the Government's Reform Engagement of Multilateral and Bilateral Institutions Growth and Development (from Agenda (SES) the Comprehensive Development Framework) Good and Clean Government Major focus of the SES ADB, Australia and New Zealand (possible World Bank involvement) Justice System Not an explicit focus of the SES New Zealand Financial System Major focus of the SES ADB and Australia (previous World Bank involvement) Social Safety Net and Social Central role played by village, churches Australia and New Zealand Programs and NGOs. SES identifies catalyst role for Government Education Separate strategy developed and linked Australia and New Zealand (possible World Bank to SES involvement) Health Separate strategy developed and linked Australia, New Zealand, Japan and the World Bank to SES Water and Sewerage Separate water and waste management ADB, Australia and European Union national policies have been developed as part of the National Environment and Development Management Strategy Energy Identified as a priority under the SES ADB (previous World Bank involvement) Roads, Transportation and Identified as a priority under the SES ADB, Australia, New Zealand and World Bank (proposed Telecommunications and previous involvement) Environment and Cultural Issues Identified as a priority under the SES New Zealand Rural Strategy Separate strategy developed and linked Australia and New Zealand (previous World Bank to SES involvement) Urban Strategy Not an explicit focus of the SES ADB Private Sector Strategy Major focus of the SES ADB, Australia and New Zealand Project Appraisal Document Page 5 Title: Infiastructure Asset Management Project Country: Samoa The strategy of the Bank in Samoa is to support the Government in its goal of achieving a more efficient and cost- effective public sector and to develop stronger and more effective participation of the private sector and other stakeholders in civil society. This will involve a continuing but modest level of lending focussed on key sectors, supported by a continuing program of non-lending economic and sector analysis. Priority will be attached to donor coordination and consultation. The infrastructure sector has provided the core focus of Bank support for Samoa to-date. The Infrastructure Asset Management Project builds on the successful experience of the Emergency Road Rehabilitation Project and will maintain the Bank's involvement in this key sector. The economic and sector work undertaken in the health and education sectors provides the basis for further Bank involvement. The Bank's priority of bringing broader civil society into the development process means that it is well placed to respond to the Government of Samoa request to assist in the establishment of the National Reform Commission. The lending services will continue to be supported by a program of non-lending economic and sector work that will expand on these themes. The non-lending services are flexible and remain responsive to the Government of Samoa's reform program. 2. Main sector issues and Government strategy: The SES has focused on improving the environment for private sector growth by reducing the size of the public sector, downsizing government activities and transforming state-owned enterprises (SOEs). SOEs are a major drain on public financial resources and since 1986, the Government has privatized or liquidated its equity holding in a large number of enterprises. Its objective for the remaining SOEs is to secure progress towards more commercially-oriented and financially viable operations. Infrastructure SOEs are prominent, including the Electric Power Corporation (EPC), Airport Authority (SAA), Water Authority (SWA), and the Special Project Development Corporation (SPDC), none of which is financially self-sufficient at present. The small domestic markets and limited scope for economies of scale pose significant constraints on development and on market competition. Other support to private sector development comes from financial sector liberalization, tariff review, outsourcing of government services, and stimulus to small enterprises. In addition, the Government has an active public sector reform program including: i) performance budgeting, adopted in mid-1996, which requires departments to focus on, and be held accountable for, the outputs they produce; ii) gradual devolution of financial control and personnel management to line departments as systems are put in place; iii) decentralizing planning and policy formulation, by introducing strategic and corporate planning in line departments; iv) requiring project appraisal, monitoring and evaluation of all public investments - additional external borrowing is only to be incurred for capital investment projects which are clearly in line with national strategies, have been fully appraised, are economically viable, and are sustainable in technical, human and financial resource terms; and v) strengthening the information systems for performance and monitoring. 3. Sector issues to be addressed by the project and strategic choices: Three priority areas were identified by the Government for attention: i) changing the delivery of public works and infrastructure services to focus on managing assets, and ensuring economic appraisal of investments; ii) urgent rehabilitation of the key international air transport infrastructure which is vital to the country's economy and in danger of reaching marginal service standards; and iii) meeting priority needs of road safety, coastal protection and road development. The issues in the three subsectors include the following: a) Airport Infrastructure Samoa's national income is highly dependent on international trade, remittances from overseas and aid flows. Air services and supporting airport infrastructure are vital to these flows, especially for tourism. The major Project Appraisal Document Page 6 Title: Infrastructure Asset Management Project Country: Samoa international air service routes to Samoa are centered on Faleolo International Airport, which is operated and managed by the SAA, a SOE that is required to be commercial oriented. However, given the technical need to provide capacity for large jet aircraft but also the thin markets for air services to Samoa, Faleolo is a high fixed cost asset with low utilization. The airport supports a major share of the country's economic activity yet is not able to achieve full cost recovery from user charges alone at present traffic levels. As an international airport, Faleolo is required to satisfy strict international safety standards, as set by the International Civil Aviation Organization (ICAO). Strict adherence to these standards is reinforced given Samoa's exposure to adverse weather conditions, especially cyclones. The existing condition of the runway, taxiway, apron, and emergency equipment indicates the need for timely rehabilitation and urgent replacement. In addition, the existing terminal building performs unsatisfactorily; there is congestion, spillover airside and landside, and severe limitations to increasing concession revenue. Addressing each of these issues involves a combination of essential civil works, facility improvements and capacity building of the SAA. Not too surprisingly, the SAA incurs financial losses. Establishing an appropriate approach to cost recovery is a key policy and management issue. Present losses stem, in part, from Government intervention in the operations and management of the SAA (for example, in constraining airport charges and in imposing requirements to provide three small airports, largely as community services). An adequate degree of autonomy to enable the SAA to pursue its commercial obligations is therefore an important institutional issue which also calls for early attention. At the same time, there is scope for cost efficiencies in a number of areas. Improving the capacity of the Authority, particularly in financial management, will assist improved cost recovery. b) Road System Assets The road infrastructure asset has been improved considerably by the donor-supported post-cyclone restoration effort, which restored and upgraded the road system so that the peripheral road network is complete on both main islands to all-weather paved standard, with key waterways and coastal protection now designed to handle extreme storm events. However, bridges and geometric standards on other parts of the network have become obsolete through age and traffic growth - a medium-term plan prepared by the 1996 PWD Institutional Strengthening (PWDIS-2) study showed that 37% of the 373 km primary road and bridges required improvement and a 3-year budget requirement of WST 27.6 m. The growth of motorized traffic is now high at over 10 % p.a. and has doubled since 1989 to about 11,000 vehicles or 66 vehicle per 1000 population. Consequently, this is a period of social adjustment from a predominantly non-motorized community-based transport environment where the primary modes of transport are slow-moving village-enterprise bus services and pedestrian traffic, to one with higher-speed modem vehicles that can be dangerous on narrow winding roads designed for low speeds. An excellent road safety program has been initiated in response to the pilot program funded under the Emergency Project. However, vehicle and driver registration records are incomplete and inadequate for road transport administration and cost recovery. Also, PWD lacks a systematic basis and the tools for monitoring road needs, evaluating options and priorities, and preparing either annual programs or a medium-term plan based on economic need. Thus, the priorities are: i) to establish the basic tools for road asset management for preparation of prioritized annual programs and monitoring system performance, and ii) to establish a planning process for road development to extend access to rural areas and tourist developments and improve capacity where and when warranted, with due attention to appropriate design standards, and to social and environmental impacts. c) Coastal Infrastructure Samoa is subjected to frequent cyclones, and Cyclones Ofa and Val in 1990 and 1991, which were 50- and 100-year events, caused a total of $440 million of damages (four times the GDP) and 23 fatalities. Substantial lengths of seawall, beach replenishment and water-crossings were constructed for coastal protection of road assets and village property under the IDA and ADB funded cyclone restoration projects. This work has continued recently under Government budget to protect some village communities at risk. Rock seawalls tend to be preferred by communities for their perceived protection, but they have high physical and visual impact Project Appraisal Document Page 7 Title: Infrastructure Asset Management Project County: Samoa on the beach environment and can be counter-productive. Alternative 'soft' solutions of beach replenishment had mixed performance under Cyclone Val but were not well established. While the seawalls afford basic protection for a 10- or 20-year event, damnage will be sustained by some parts of the infrastructure, and could be substantial in the case of still worse events. Normal coastal and waterway erosion also pose risks to communities and infrastructure in the coastal zone. Activities such as local reclamation and wall construction, sand-mining, discharge of water, etc. disturb natural currents and deposition processes, potentially exposing parts of the coast to greater risk. Risk exposure will continue to rise if economic and social activities are allowed to expand uncontrolled into areas subject to natural hazards. The strategic questions include: i) the standard of protection which is economically and strategically justified; ii) the responsibilities for cost recovery and physical management of the coastal protection infrastructure when the protected assets are both public and private; iii) the mechanisms for controlling adverse land-use and construction activities; iv) appropriate procedures for preservation of environmental assets, environmental management, and engineering; and v) the consultative, participatory and institutional framework. d) Institutional Strengthening of Infrastructure Asset Management The delivery of public works for roads, coastal and other engineering works, as well as government building services, has been undertaken almost entirely by the Public Works Department (PWD). The private sector for engineering and construction is small, but participation has been increasing steadily over the past 5 years in response to SES and under the IDA Emergency project. Still, with only a few domestic firms available, the private sector is generally lacking in quality, skills and depth. With a thin market it has proven difficult to retain good skills either in PWD or private sector, so resources are often drawn from the wider region. Two previous institutional studies made for the Public Works Department (PWDIS-1, -2), analyzed the options for reform of PWD and designed a program for implementing reform. The chosen plan retained PWD as a government department initially, with substantial restructuring, privatization of non-core functions and assets, transfer of staff to the private sector, and further increased outsourcing to the private sector, so that PWD is transformed into a manager role with a strongly phased down provider role. Later, when the necessary financial systems are in place and performance requirements are being met, the government would consider the long-term preferred option for corporatizing PWD as a statutory authority. PWD are embarking on the reform program through local resources and internal consultation. PWD needs the tools for its new role of policy advice and asset management, e.g., a road asset management system, financial management systems, and environmental management, and supporting guidance on the restructuring, re-skilling, change management, and the privatization transactions. Asset management is the generic approach already applied successfully for decision-support in the road sector and commercial business. The establishment of systematic monitoring and evaluation of the performance and expenditure needs of all infrastructure assets in the country, based on inventory data, will be a key factor to achieving the Government's goals of performance-oriented business. In lands and environment, DLSE has a vital role in coastal and natural resource issues but suffers from severely deteriorating institutional capacity. Some consideration has been given to separation of conservation and regulatory roles, but review and identification of appropriate reform is needed. C: Program and Project Description Summary la. Program Description (see Annexes 1 and 11): The national Infrastructure Asset Management Program (IAMP) will help change the role of govemment in the delivery and management of infrastructure services in the three priority sub-sectors, namely air transport, road transport and coastal protection, in line with the SES. It will also meet high priority physical investments in these sub- sectors needed to support and protect national economic growth and quality of life. Since the pace and direction of public sector reform in this traditionally large sector have significant social, financial and political implications, the reforms need to be developed within the particular cultural context of Samoa and require progressive implementation over a sufficient period of time to allow effective participation and consultation. The Program is scheduled for an 8- year period, to be undertaken in two Phases of 3 and 5 years respectively. Project Appraisal Document Page 8 Title: Infrastructure Asset Management Project Country: Samoa The Government's Program is being administered through a multi-departmental IAMP Steering Committee established in 1997. It is jointly supported by IDA for the full 8-year period through an Adaptable Program Loan, and by annual grant funding from the Australian Agency for International Development (AusAID), which is specifically supporting the institutional reform of the Public Works Department through the 3-year period of Phase 1 and tentatively for 2 years of Phase 2 (IAM-2). The New Zealand Overseas Development Administration (NZODA) which has previously supported the Department of Lands, Survey and Environment (DLSE) is likely to provide some additional support for DLSE institutional reform through parallel grant funding - while these activities will be directed by the IAMP Steering Committee, the funds have not been directly incorporated in the Program scope. GoS will fund nearly half of the local costs in the first phase, while it absorbs the revenue impacts of the major 1998 tariff reforms, and is expected to finance full local costs in the second phase IAMTP Phase 1 (3 years): Meeting Vital Priorities and Improving Management a) Timely rehabilitation and upgrading of the Faleolo International Airport landside and airside infrastructure and services to satisfy international safety and operational requirements for the next 15 years; b) For road infrastructure, priority works including replacement of six vulnerable road bridges, and construction of pedestrian facilities and safety improvements on the main road corridor (Apia-Faleolo). c) In the coastal zone, the development and introduction of a strategy for participatory management of coastal infrastructure (CIMS) integrating environmental and storm hazard considerations, priority investments in coastal protection, and the updating of land information and maps; d) Strengthening the management of infrastructure assets through: i) reforming the delivery of public works, through the first major stage of restructuring and business improvements in PWD, increasing private sector capacity and participation, introducing asset management and preparing medium-term investment plans; ii) establishing protocols for asset and information management for government departments; iii) improvement of road transport administration and continuing implementation of a comprehensive road safety program; iv) evaluating reform options for the administration of lands and environment (DLSE); and v) improved business practices in the SAA to advance towards substantial financial autonomy, and to manage airport assets and services. IAMP Phase 2 (5 years): Investing in Sustainable Growth and Protection: a) Support for warranted priority development of the road network, consideration of environmental sustainability, economic priority and social impact in appraisal of public expenditures, to meet priority needs for access and economic development and to improve safety and operation of the main arterial road; b) Extension of the coastal asset management strategy to the entire coastline, support priority protection investments and support the reform action plan for DLSE; and c) Consolidation and continuation of progressive reform of public works delivery, including commercialization or privatization of appropriate aspects, performance-oriented management of all related infrastructure assets; safer and more efficient road transport, implementation of new environmental management processes in public and private sectors including new oversight role for DLSE; and improved financial sustainability of airport operations and assets. Project Appraisal Document Page 9 Title: Infrastructure Asset Management Project Country: Samoa lb. Project components of IAM-1 (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The IAM- I Project will support Phase I of the Program, as described in Annex 2 and detailed in the table below. Component Category Cost Incl. % of Bank- % of Contingencies Total financing Bank- (US$M) (US$M) financing A. Airport Improvements: Physical 7.4 40 5.8 41 investment A.1 Rehabilitation and extension of runway, 2.8 15 2.0 14 taxiway and apron A.2 Improvement of terminal and tower 2.5 13 1.8 12 facilities A.3 Emergency fire equipment 1.4 7 1.4 10 A.4 Design and supervision 0.7 4 0.7 5 B Road System Infrastructure: Physical 4.7 25 3.7 24 investment B.l Upgrade primary road bridges 3.2 17 2.3 16 B.2 Road preservation works 1.3 7 1.0 7 B.3 Road safety and pedestrian facilities 0.3 1 0.2 1 C. Coastal Protection Infrastructure: Institutional 2.3 13 2.1 15 C. I Coastal and environmental management development 0.9 5 0.9 6 C.2 Update geographic information and Physical 0.6 3 0.6 4 C.3 Extend coastal protection investment 0.8 4 0.6 4 D. Institutional Strengthening: Institutional 3.1 16 1.5 11 D.l Reform of public works delivery development 2.0 11 0.3 2 D.2 Adopt asset and information 0.4 1 0.4 3 management for infrastructure assets D.3 Improve traffic administration and road 0.3 2 0.3 2 safety D.4 Institutional strengthening of Lands and 0.3 2 0.3 2 Environment D.5 Business improvement of Samoa 0.2 1 0.2 I Airport Authority E. Project Management Project 1.3 7 1.3 9 Project Preparation Management 0.2 1 0.2 2 Project Management 1.0 6 1.0 7 Total 18.8 100.0 14.4 100.0 Note 1/: Excludes cofinancing of $1.3m by AusAID. 2. Key policy and institutional reforms supported by the project: The project supports key policy and reform objectives of the Government's SES, specifically for the selected infrastructure subsectors, e.g.: public sector reform - better-defining the role of public agencies (for PWD and DLSE); continuing government withdrawal from direct provision of goods and services; improving financial control and accountability; introducing project appraisal, performance monitoring and evaluation. Project Appraisal Document Page 10 Title: Infrastructure Asset Management Project County: Samoa * private sector development - increasing participation in delivery of infrastructure works and services; strengthening private sector capacity; * promoting cost recovery from users, and guiding SOE's towards financial autonomy (SAA) 3. Benefits and target population: The benefits from the project will derive from its outcomes in four areas: a) Air transport services will operate under strengthened safety, improved reliability and efficiency, and enhanced quality of service . The rehabilitation of the existing airport facilities, including the runway, terminal and control tower, and a small increase in capacity and safety margins, will satisfy international safety and performance standards for the next 10-15 years. This will permit full wide body jet operations (B 747 and B767 aircraft) in emergency and peak traffic conditions, reduce the risk of closure and also provide for development of future potential long haul services. Principal economic benefits will derive from increasing volume of trade, and associated foreign exchange earnings, especially tourism. Improved business practices and commercial orientation in the SAA including revised user charges and improved cost recovery will promote efficiency and strengthen financial sustainability in the provision of airport services; b) There would be real resource savings (including foreign exchange) in total road transport costs through reduction of life-cycle road infrastructure costs, reduction of accident costs, and lower road user costs. Both roadside communities and road users would benefit from improved safety and constraint of the adverse impacts of growing traffic volume, speed and emissions. Where road transport is provided by intermediate service suppliers (public bus operators, taxis, freight hauliers), the user savings can be expected to be passed on to the final users (passengers, shippers, businesses, government agencies) since the markets for road services are quite competitive. c) Public and private assets in coastal hazard zones would have improved resilience to natural disasters, through improved control of drainage and flooding, physical protection, or control of activities, which will lessen the expected damage from events with a 10-yr. return frequency to non-critical levels, and from worse events to restorable levels. An estimated 120 (40% of the 300) village communities which are in coastal hazard zones will have lower risk to their livelihood and assets. Natural resources such as fish populations and sand materials could return to sustainable levels with appropriate infrastructure design and management; and d) There would be general socioeconomic benefits and fiscal savings deriving from streamlined public service, a strengthened and expanded private sector, increased community participation, and sustainable management of, and investment in, infrastructure. 4. Institutional and implementation arrangements: Implementation Period: The overall APL program extends over eight years, with the initial project implementation period being three and a half years from Board presentation, covering January 1999 - June 2002. Institutional Arrangements: Four agencies are involved in project implementation: Oversight will be provided by the Treasury Department of the Ministry of Finance, which is the representative of the Government of Samoa for the project. A Steering Committee was established by the government representatives during project preparation and this will continue as the Program Steering Committee (IAM-PSC) during Project execution to guide and monitor the progress of both Projects and the Program. Project Appraisal Document Page 11 Title: Infrastructure Asset Management Project Country: Samoa Implementing Agencies -. The responsibilities of the various agencies are as follows, and are set out in detail in the Borrower's Project Implementation Plan (BPIP): A.. International Airport Infrastructure: Samoa Airport Authority (SAA) B.. Road System Infrastructure: Public Works Department (PWD) C.. Coastal Infrastructure Management: C. 1 Coastal infrastructure strategy DLSE C.2 Geographic information DLSE C.3 Coastal protection PWD D. Institutional Development D. 1 Reform of public works delivery PWD D.2 Adoption of asset management PWD D.3 Traffic and road safety action plan Transport Control Board (TCB) D.4 DLSE institutional study DLSE D.5 Business improvement of SAA SAA Coordination: During project preparation, a consultant was employed to assist the Steering Committee and the various agencies with coordination. This proved to be very successful, and the Government will establish a Project Management Unit (PMU), reporting to the Program Steering Committee, to continue to assist with coordination during project execution. Implementation Arrangements A Borrower's Project Implementation Plan was developed during project preparation. This is a comprehensive document covering the implementation schedule and agencies responsible for each activity, procurement plan, disbursement schedule, performance indicators and monitoring of the overall project. The final BPIP, as agreed at negotiations, will be updated annually, although the implementation schedule will be updated quarterly. Project Management: The PMU will be headed by the Project Manager (PM). SAA, PWD and DLSE will each appoint a Project Component Manager (PCM) to manage activities under their respective components. The civil works on the airport will be conducted under a partnership charter between the employer's representative (the SAA-PCM will fill this role), the construction supervision consultant and the contractors. For the NCB civil works on roads, bridges, traffic safety and coastal protection, the Director of Works is designated as "the Engineer" and the construction supervision consultants as the "Engineer's Representative". The PMU will also be responsible for: i) ensuring that the IDA procurement guidelines and rules are strictly followed throughout the project, to avoid misunderstandings, disputes and possible mis-procurement; ii) monitoring and evaluation; iii) coordinating consultations, and providing public information and liaison; and project accounting and reporting. In general, project management will be drawn from local consultants with the aim of encouraging sustainable private sector partnerships and experience. Civil Works: The airport services have been defined in detail, and began in February 1999 under retroactive financing. The three-year programs of works on bridges, pedestrian facilities and coastal protection to be supported by 1AM-1 have been defined and design and procurement documents are under preparation for the first year. Subsequent annual PWD programs of road, bridge, traffic safety, and coastal protection works will be defined by the asset management programs to be implemented under the project. All road, bridge and coastal works are packaged for NCB to stimulate and develop the domestic private sector. Institutional Development: A major consulting assignment will assist the implementation of the PWD reform, adoption of asset management, development of the private sector, and preparation of medium-term road plan. The supply of hardware and software for the implementation of the asset management systems (RAMS and AIMS) will be contracted separately. A separate international consulting assignment will provide services for developing the coastal infrastructure management strategy, strengthening environmental management, and DLSE institutional development, in conjunction with local firms for implementation. Smaller consulting services will help the TCB improve traffic Project Appraisal Document Page 12 Title: Infrastructure Asset Management Project Country: Samoa administration and extend implementation of the road safety action plan. Engineering and supervision services for the .road and coastal works are packaged to stimulate the domestic private sector. Mid-term Review: In addition to normal IDA supervision, a formal mid term review of the project will be carried out after 18 months, about September 2000. Accounting, Financial Management and Auditing Under the oversight of Treasury, the PMU will operate a dedicated project accounting and reporting system. The accounting system will be established prior to Credit effectiveness (see G. 1 Conditions), and it will be compatible with the current financial management and accounting guidelines of Treasury and of IDA. However, it will not be eligible for PMR-based disbursements initially and will be reviewed periodically with the aim of satisfying all PMR requirements by June 2001, as set out in an action plan (agreed during negotiations). Based on the accounting review study and discussions with Treasury, the Project accounting system has been defined (see Annex 13) and is being installed during February 1999. Each IA-PCM will process invoices for certification by the responsible manager in the IA, submit the original documents to the Project Accountant (PA) who will record and log the transaction in the system, and pass it to Treasury for payment from the Special Account, budget account or by direct application to IDA (for large transactions). The accounting system will use customizable commercial software and the unique procurement identification which relates each action to the Project design and to the specific contract. The system will be designed to generate the monthly, quarterly and annual accounts statements in the formats required by IDA, for inclusion in the monthly reports and quarterly Project Management Reports (PMRs). The PA will provide back-up support to the PCM's and IA's to ensure smooth operation of the accounting and financial transactions. Treasury will be responsible for operation and replenishment of the Special Accounts for the IDA Credit and AusAID Grant. The annual project accounts will be audited in a timely fashion by independent auditors acceptable to IDA and furnished to IDA in a certified copy no later than six months after the end of the fiscal year. The assessment of financial management capabilities and details of the financial reporting framework are provided in Annex 13. Monitoring and Evaluation The IA-PCMs will be responsible for regular monitoring and reporting of key performance indicators, and evaluating trends against the targets, in accordance with guidelines provided in the BPIP. The PMU will be responsible for facilitating the monitoring process and for compiling and reporting performance indicators to the IAM-PSC and IDA at least annually or as specified in the BPIP, in a format acceptable to IDA. The IAM-PSC, on behalf of GoS, will be responsible for directing whatever actions are required for achieving compliance with performance targets of the Project. D: Project Rationale 1. Project alternatives considered and reasons for rejection: The project provides an integrated, systematic and consistent approach to the provision and management of infrastructure in three areas that are crucial to the economic and social well being of Samoans. A separate piecemeal approach to each subsector was considered inefficient on development assistance grounds. Institutional reform in the delivery of public works became a priority after the two IDA-funded PWD studies in 1995 and 1996 identified the need for PWD to focus on asset management and to involve the private sector in provision, in line with the Government's Statement of Economic Strategy (1996). When AUSAID, who had funded PWD strengthening efforts from 1990-96, was unable to do this due to funding changes, the Treasury requested IDA in 1997 to consider financing a broad program of infrastructure support, including the airport rehabilitation, part of the road and bridge program, and the PWD reforms. Initial considerations included water supply and waste management, however, these and urban development were to receive support from other donors. The focus on asset management Project Appraisal Document Page 13 Title: Infrastructure Asset Management Project Country: Samoa arose from Treasury's introduction in 1996 of output-based performance budgeting and the requirement for line agencies to justify expenditures through appraisal, monitoring and evaluation. Coastal protection was added when it was recognized that PWD and DLSE lacked the means for appraising the viable alternatives for the additional protection being requested by coastal communities, while also preserving the natural environment. The scope was restricted to primary transport (road networks and airports) and coastal infrastructure because of their crucial contribution to economic resilience against the high exposure of the country to natural and economic shocks. In order to allow the restructuring and reform of PWD and DLSE to evolve effectively and adjust to the social and economic constraints of the very thin market, the original project period of 5 years was transformed to an 8-year adaptable program. 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned): Latest Supervision (Form 590) Ratings (Bank-financed projects only) Sector Issue Project Implementation Development Progress (IP) Objective (DO) Bank-Financed Road development First Highway, Cr. 535-WSO, $4.4 m (1975-1979). Agriculture, industry and infrastructure: tree Multi-project, Cr. 1657-WSO (1986- S Partial crops, rural road upgrading (Le Mafa- 1994, co-financed ADB, UNDP, Richardson), small industries center, Apia OFID). container park, and later, repair of Upolu power facilities. Primary hydroelectric power supply, co- Afulilo Hydroelectric, Cr. 1781-WSO, financed civil works SDR 2.65 m (1987/1993 - 1/1995). Post-cyclone restoration of key roads and Emergency Road Rehabilitation S S bridges on Upolu and Savai'i, and initiation of Project, Cr. 2132-WSO, SDR 14.6 m road safety program and institutional (5/1990, 5/1993 to 12/1997). strengthening of PWD Other Development Agencies Post-cyclone restoration of key roads and ADB Cyclone-Damage Rehabilitation n.a. bridges on Upolu. Project, Ln. 1993-SAM ($8.64 m) Apia water reticulation, street works and ADB Integrated Urban Development n.a. institutional development. Project (under preparation: TA 2480- SAM) Increasing capacity of Afulilo hydroelectric Afulilo Power II (under preparation) n.a. power station. IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: Experience from the Emergency Road Rehabilitation Project showed: i) the crucial link of infrastructure to the country's ability to respond to natural shocks, and the need for standards and management that are appropriate and sustainable in the small economy; ii) an institutional environment that is responsive to improving business practices and asset management; iii) that effective participation and growth of the private sector, in the thin market that exists, could be developed through selective use of joint-venture arrangements, the use of small-to-moderate contract Project Appraisal Document Page 14 Title: Infrastructure Asset Management Project Country: Samoa packages, and training in procurement and contract procedures, attracting a combination of national and regional firms; iv) the need to manage coastal hazards more strategically, with full involvement of local communities to find protection solutions that harmonize with natural coastal processes and are socially and environmentally sustainable. A few severe contractual problems that arose under the ADB Cyclone rehabilitation project and the co-financed Multi- sector Project, show the importance of developing sound contract practices and control in the particular social and political context of Samoa. The Multi-sector Project (involving roads, agriculture, industry and power), which had mixed and partially unsatisfactory performance, showed that the aggregation of objectives for the purpose of fiscal or lending efficiency could be carried too far, and that sound preparation, demonstrable economic viability, and effective project supervision must be built into the project design. These lessons are reflected in the project design by the selection of the infrastructure sector, the common element of public asset ownership among the infrastructure subsectors, and the unifying themes of institutional reform, through reducing the role of government in the provision of infrastructure, increasing private sector capacity, and adopting an asset management approach. While there are four implementing agencies, the common element is the operating relationships with PWD, which are being affected by the public sector reform program. 4. Indications of borrower commitment and ownership: The Government has shown strong commitment to the project throughout preparation. They appointed a Steering Committee, task teams for each component and a Preparation Coordinator, which actively prepared and developed the content of the Project. Treasury allocated sufficient funding (WST 700,000) for project preparation beginning Jan. 1998 as a priority over other urgent needs. Treasury worked effectively to resolve institutional issues as they arose during preparation, and much of the leadership for the reform is now coming from within PWD and the Ministry. The Cabinet enacted tariff revisions for the Samoa Airport Authority in July 1998 which already achieve a large part of the cost recovery objectives identified for the project and have promised more when implementation of the airport component begins. 5. Value added of Bank support in this project: Continuity of Bank support, together with AusAID (who have supported PWD much in the past) for the reform of PWD and the development of private sector capacity in infrastructure is likely to be crucial to sustainability, where other donor-supported efforts (in power, water, etc.) have been transient with mixed results. The Bank has established experience and technical leadership in the region for road asset management and knowledge management which will ensure that the systems implemented will be appropriate and sustainable in a small administration, and integrated effectively across subsectors. E: Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (supported by Annex 4): [X] Cost-Benefit Analysis: []Cost Effectiveness Analysis: [X] Other Cost-benefit analysis is applicable to the roads/ bridges and coastal protection works components of the project. Specific sub-projects for these components will be proposed by GoS during each phase of the project. Road Assets: For bridge replacement works, the cost-benefit analysis evaluated savings deriving from removal of load restrictions, accident reduction, elimination of delays through the widening from one- to two-lane capacity, and avoiding the need for detour due to closure of the bridge at the end of its structural life. The benefit:cost ratio of the bridge works averages 13 and ranges from 4.6 to 64. For the road safety and pedestrian facilities works, the cost- benefit analysis assesses the expected savings deriving from reduction in accidents, fatalities and injuries, and evaluates switching values of these savings relative to the cost of works. The proposed program is justified based on expected accident savings alone, as the switching value at which schemes would become uneconomic is a low value of Project Appraisal Document Page 15 Title: Infiastructure Asset Management Project Country: Samoa WST 7,800 (USD 2,600) per statistical accident. The proposed program has a benefit:cost ratio conservatively estimated of at least 13. Cost-benefit analyses of specific road sub-project proposals for IAM-2 will be a product of the National Road Planning Study as well as a proposed specific feasibility study of road upgrading for the Apia- Faleolo Airport West Coast Road. Coastal Infrastructure: Major coastal protection works will be assessed along largely conventional cost benefit lines. However, the probabilistic nature of the "hazard events" (mainly cyclones), poses some difficult empirical problems. The methodology calls for balancing the capital (and maintenance) costs of alternative protection works against the expected related savings in asset loss from exposure to various severe weather events. The use of customary land, including reclaimed land, introduces complicating factors involving potential externalities and moral hazard. Outcomes, and net benefits, will hinge on community consultation, participation and cost responsibility. Potential options may include no protection works, and in other locations, control of land use and in particular, restrictions on private/village development. Experience in other countries of applying cost-benefit analysis to coastal protection, similar to the Samoan context, appear very limited. Accordingly, the methodology breaks new ground and, while innovative, it should be seen as preliminary and subject to further refinement during the course of the Program. A combined technical-economic analysis was made for two pilot sites proposed for Phase I of the Program (see Annex 4). These results indicate that "Improved Protection" is warranted at both the Fagili'i and Faga sites, as it yields a positive net present value of WST 2.28 million and WST 0.338 million respectively, at these sites (the corresponding IRRs are 132 per cent and 25 per cent, respectively). These results are most sensitive to the lowest intensity cyclone (high frequency) for which "damage vulnerability" becomes negligible. (A ten year return period was adopted, however a 15 year return period in both cases drops the NPV to a negative level.) This indicates the need for more technical work on establishing "tight" estimates of this factor. The pilot analysis applied omits some benefits and costs - savings from prevention of disruption to road traffic and other public and private services/activities, and the cost of "disturbing" the amenity value of the natural coastline. Approaches to valuation of these other aspects will be developed as the CIMS and its evaluation is progressed beyond this preliminary stage during Phase 1. Airport: Conventional cost-benefit analysis of alternative designs is not directly applicable to the airport component, although there are some aspects where benefit-cost trade-offs are assessed or least cost solutions used (see Annex 4). Airports, overall, and the individual facilities and equipment at airports, are subject to strict safety and technical standards, governed by international and individual country aviation authorities. These standards basically operate as constraints and are paramount in airport facility design , for example, runways, aprons, emergency equipment and air traffic control. While there are different levels (categories) of airport operation associated with these standards, the range of choice of "standard" may be very limited on technical if not economic grounds; given its location as a remote island in the South Pacific, this is the case in Samoa. 2. Financial (see Annex-4 & 5): Samoa has very recently reduced and harmonized the levels and structure of its tariffs and other taxes. Based on these changes, the Samoan Treasury advice is that the average conversion factor to estimate project economic costs from financial costs is 0.85. The overall Financing Plan for the project is set out under Project Financing Data on the cover page. Of the total project cost of US$18.8 million (including taxes and contingencies), US$3.1 million or 17% will be funded by GOS (including estimated taxes amounting to US$2.4 million), US$14.4 million or 76% will be financed by the IDA Credit, and US$1.3 million, or 7 %, by grant funding from AusAID. It is estimated that the IDA Credit will finance approximately 56 % of local costs, which total about US$8.1 million. While there are no user fees specifically related to the project components, direct user charges in the form of aircraft landing and related charges, airport building rentals, and passenger departure fees, apply to use of the airport facilities as a whole and these revenues will be used by the SAA to repay the lending from Treasury for the airport component (at a total cost of US$7.4 million). Project Appraisal Document Page 16 Title: Infrastructure Asset Management Project Country: Samoa The recommendations of a recent review of airport fees and charges have been accepted by the Government, with the exception of an increase in the passenger departure fee (from WST20 to WST30). However, Government has indicated its willingness to also adopt this increase, once work on the airport terminal building starts. The airport is a relatively high fixed cost asset with low utilization, and full cost recovery from user charges can only be approached in the medium term (see Annex 4). However, with modest traffic growth (5% p.a.), and by implementing a number of cost reductions, the SAA should be able to fully cover the annual loan repayments (WST3.6 million p.a.), beginning in FY 2004. Overall accounting profits of the SAA are estimated to become positive in FY 2010. User charges associated with the road/bridges component (fuel tax, vehicle registration fees, driver licenses) will be subject to further review and addressed under Phase 2. For coastal protection, the case for, and feasibility of, select user charges will be explored within the project. Fiscal impact: The impact of the project on government income/receipts is expected to be small. (Of course, continued growth of airport activity and visitor expenditures will expand VAT revenues.) The impact of the project on govemment expenditure is relatively modest: Cost recovery for the airport component is within the range of the recommended (and already, in part, adopted) fee increases, including an allowance for maintenance. The net additional long term capital and maintenance costs of the road/bridge and coastal protection works will require accommodation within the existing government budget envelope. 3. Technical: Studies of the technical requirement/options, existing condition, forecasted demand and physical setting have been carried out during preparation. The most important of these are: Airport Component - ICAO Safety Audit - Review of Terminal Building Rehabilitation (Chapter 8 of SAAFIA report) Roads and Bridges Component - Recent capital plan, and PWD Institutional Strengthening Study, Phase II. Coastal Protection Works I- Coastal Hazard Mapping The ICAO Safety Audit of Faleolo International Airport established a set of recommended actions associated with intemational safety standards for the operations involved at Faleolo, currently and forecasted over the next 10-15 years. All outstanding recommendations that were assigned a "high priority" status by ICAO have been incorporated into the project. These include runway, taxiway, and apron overlay with small capacity extensions, a new control tower/fire station and new fire tenders. The Review of the termninal building development re-examined the recommendations of a study of the Faleolo International Airport Terminal undertaken in 1994. By and large, this Review endorsed the earlier recommendations, which were based on reconfiguration/ refurbishment of the existing terminal structure to improve performance of passenger, baggage, and air freight processing. Some minor changes that were recommended by the Review related to staging options for redevelopment and floor space allocations for some activities. These two technical studies supported the terms of reference for the engineering design for the proposed airfield, equipment, and terminal works. Detailed engineering and stakeholder consultation are bein g conducted under retroactive financing. 4. Institutional: a) Executing agencies: The Treasury and PWD have previous experience in implementing IDA-financed projects, and during project preparation have become conversant with current procurement procedures with the PPF. Both have little spare staff capacity for additional responsibilities - which contributed to some execution delays in the latter stages of the previous project - so establishment of the PMIU is crucial to smooth implementation. The SAA and DLSE, which have not had previous experience with IDA, have become Project Appraisal Document Page 17 Title: Infrastructure Asset Management Project Country: Samoa familiar with IDA procedures during preparation and will be fully supported by the PMU. While accounting procedures are being strengthened in Treasury (under AusAID funding) and PWD have a costing system from previous AusAID assistance, there remain inadequacies in financial management. Financial management and other business processes will be strengthened in both PWD and SAA under IAM-1, while accounting for the Project will be interfaced but separate (see Annex 13). The evolution of PWD from a provider role to asset manager under the restructuring will be supported by a substantial program of works and services contracted to the private sector which PWD will manage and thus develop a sustainable capacity for technical management. b) Project management: The three tier structure of project management functioned well during project preparation and greatly contributed to ownership and input by all executing agencies. However, for implementation, the project manager has to have a stronger role than coordination, with responsibility on behalf of the Program Steering Committee (IAM-PSC) for maintaining compliance with all implementation, legal, financial and technical requirements of the project. Accordingly, the PMU will be responsible to the IAM-PSC for giving direction and support as necessary to the PCMs in the various implementing agencies. With the support of appropriate information technology being provided under the Project, these arrangements are considered fully adequate for ensuring smooth implementation of the Project and Program. 5. Social: Since Samoa's population comprises almost entirely indigenous people, OD 4.20 applies to the entire project. As per policy recommendations, an initial social assessment was made to identify the pertinent social and cultural issues to be taken into account. Subsequent social analyses as required will accompany individual components throughout the life of the project. The initial social assessment also provides a framework for the participatory approach and consultative framework which will be in place throughout the project. In this project, there is no resettlement and no expected land acquisition. Since the cultural context has such a dominant influence on the approach to achieving the Project objectives, salient aspects are summarized here. Civil Society: In Samoa, as elsewhere in the Pacific, the indigenous culture and tradition are the fundamental parameters which guide national life. While modified by historical and colonial experience, the traditions exert significant control over natural resources and have profound influences on national policies. The chiefly matai (clan head) system controls all local government and extends into high political offices. Over 80% of land is undermatai control, sustaining nearly 70% of the active population and about half of GDP. There are about 300 villages in Samoa, each with 20-40 matai each representing an extended family ('aiga) in the village council (fono). Matai titles are ranked, often superseding ranks in the business or political domains and may, for example, dictate employment or other business obligations. All disputes over both land andmatai titles are handled by the Lands and Titles court. The village fono has jurisdiction over the use of customary land and most aspects of village life and some functions, such as sanitation and water, are delegated to the women's committee. Thus, the development of a coastal zone infrastructure strategy involving controls over land use and economic assets must involve the villagefonos who would administer it in the first instance at the local level. Thefono is also the key to disputes over land acquisition and some locations have been disputed for generations. Modem Samoan society reflects overlapping sociopolitical "domains'", in which socioeconomic status, especially formal education and employment, cuts across political, administrative, private and traditional domains. Alongside private enterprise, there is a particularly active "traditional enterprise" comprising economic activities supporting the well-being and reputation of extended families, churches, villages and chiefs - these comprise significant resources, provide primary social integration, and are embodied in the national constitution. The business and political domains have a rich blend with the traditional domain which is continually evolving, andfa'a Samoa, the Samoan way of life, permeates all activities with pride. The highly educated level of key middle and senior civil servants is also conferring a progressive spirit to government in Samoa which is reflected in its active reform strategy and economic growth. An emigrant population in the Pacific Rim totaling at least 60% of the domiciled population of 160,000 is a major and A. Hooper (1998): Pacific Islands Stakeholder Participation in Development: Samoa. Pacific Islands Discussion Paper Series, No. 3, World Bank. Project Appraisal Document Page 18 Title: Infrastructure Asset Management Project Country: Samoa crucial source of social support and revenue through remittances, and VFR travel comprises about 30% of international travel. Social Impacts: The primary social impacts of the project components are: a) Airport - mainly positive, through better terminal facilities with comfortable space for the large family groups that usually attend arrivals and departures of VFR travelers, a traditional cultural theme reflecting national styles, and international standard processing performance; and marginal change in noise level from lengthening of runway has negligible adverse impact on the nearest dwelling 150 m laterally distant. b) Road - the road safety program aims to reduce accidents and fatalities by one-third to regional comparator levels despite traffic growth of about 10-12% annually. The past rise in accidents to 23 fatalities in 1995, of which 70% pedestrian and 50% children, was stemmed by the initial program 1996-97 and the impact on children was halved. The potential impacts of PWD's proposed future road development program will be studied under IAM- 1, comprising improved access for the rural poor and minor possible resettlement. c) Coastal - the potentially significant social impacts of rock seawall structures on access to and use of beach areas appear to be outweighed by the desire for protection from storm damage and natural erosion in the minds of the village councils. The success of achieving 'soft' natural solutions instead of 'hard' will depend crucially on the consultative process and participation of village council and women's groups. d) Institutional - primary impacts are the employment-related effects of reform in, first, PWD which has a large 'casual' labor force of about 360 and, second, DLSE later under IAM-2. The original proposals of the PWD-IS2 which called for substantial downsizing have been shelved in favor of restructuring without redundancy, but the broader prospect of a shift from public to private sector employment needs to be assimilated by agency staff and the considerable extended families that they help support. In the absence of official policies for redundancy and pension, PWD needs to pioneer means of handling the staff who leave voluntarily for the private sector, and focus on re-skilling those staff who will form the residual business units and those senior staff who assume new roles as asset managers. A highly participatory approach has already been adopted, and also is proposed to be followed for DLSE. 6 Environmental assessment: Environmental Category [ ] A [X] B [] C The first phase project, IAM-1, is expected to have no significant impacts on the environment and involves no resettlement. The minor and moderate impacts potentially associated with civil works on the airport, road, bridge and coastal protection components are expected to be appropriately mitigated through the application of standard operating procedures from the Code of Environmental Practice. However, this is not yet in place and thus the endorsement by DLSE and PWD of a Code of Environmental Practice (COEP) for civil works, acceptable to the Association, is required during the first year, by September 30, 1999. The rating of Environmental Category B has been confirmed on this basis. In compliance with requirements for IDA-financed projects, a Project Environmental Analysis (EA) was conducted (see Summary in Annex 12) The key elements include: a) The most important environmental issues are associated with the development of a coastal infrastructure management strategy (CIMS). Local CIM Plans (CIMP) will aim for appropriate control over damaging activities such as sand-mining, private construction of coastal structures such as jetties, protective walls and reclamation, changes to drainage and flood systems, disturbance of coastal ecosystems such as mangroves, etc. and to preserve natural coastal processes as much as possible. A fully participatory approach is planned which is essential because of the complexity of the institutional setting. The village councils have a high degree of autonomy, and DLSE at present has limited powers in relation to environmental impact assessment (EIA) and mitigation pending enactment of the draft EIA regulations of 1998. The provision of works is made by either Proiect Appraisal Document Page 19 Title: Infrastructure Asset Management Project Country: Samoa PWD under GoS budget or a private contractor. Detailed guidance, education and training to communities and private sector firms on EIA, evaluation of alternatives, design, construction and monitoring will be provided in through Coastal and Environmental services. A Coastal Infrastructure Management Guide (CIMG) to be prepared and applied under the Project. b) Generic issues on environmental management are being addressed for IAM- 1 through: i) requiring the draft Environmental Impact Assessment (EIA) regulations to be mandatory for Project activities, and assisting DLSE administer that; and ii) the adoption and application of Codes of Environmental Practice (COEPs) for civil works by PWD and DLSE. The COEPs will be compatible with the DLSE draft environmental regulations, and are intended to improve the standard operating procedures of both public and private agencies in respect of mitigating environmental damage in planning, design and construction activities. They will be mandatory for all civil works financed by the Project, and an action extending their use to all works implemented by or through PWD will also be required during the project. The COEPs are expected to be prepared by July 1999 (based on successful similar work in Fiji) for clearance with IDA and endorsement by DLSE. c) Specific works under the project which will require EIA clearance by DLSE and IDA before bidding include: i) Faleolo International Airport rehabilitation, specifically seawall construction, drainage improvement, and fuel spillage aspects; and ii) coastal protection works at Fagali'i and Faga. These requirements are being incorporated into the scope of engineering services in each case. 7. Participatory approach [key stakeholders, how involved, and what they have influenced; ifparticipatory approach not used, describe why not applicable]: a) Primary beneficiaries and other affected groups: The beneficiaries of the airport works - passengers, greeters, air cargo shippers, airlines and concessionaires - were consulted during a 1995 preparatory study, shippers and airlines were consulted during project preparation, and all stakeholders are being consulted through public meetings during the design and implementation phases. The beneficiaries of the road, bridge and safety investments - the traveling public, agricultural and industrial producers, consumers and local communities - have representation on the Transport Control Board, and local communities participate directly in the safety awareness programs which provide feedback on program effectiveness. The beneficiaries of the coastal protection works - village communities - were broadly consulted during preparation of the coastal component, and will participate centrally in the consultative framework that will be established around the villagefono as part of the CIMS. An overall participatory and consultative framework for project implementation has been established through the social assessment study. PWD employees have participated since late 1997 in a series of day-long workshops (severally for senior managers, supervisors, and permanent and casual staff) to discuss and provide input to the proposal and options for reform of PWD business, and were previously consulted during the development of the present restructuring plan. Likewise, private sector groups (contractors, suppliers and professional engineers) participated in, and were consulted through, a workshop in July 1998. b) Other key stakeholders: For institutional reform: the relevant government agencies and Ministers , including the Cabinet, Public Service Commission, Treasury Departnent, Minister of Works, and Minister of Lands, Survey and Environment have reviewed stage proposals and will authorize key steps, so must be continually informed and involved during implementation. For coastal strategy, the villagefonos and komitis and the Ministry of Internal Affairs, will participate through consultations that are part of the traditional council processes to Project Appraisal Document Page 20 Title: Infrastructure Asset Management Project Country: Samoa ensure sustainability. For aviation matters, the Minister of Transport was consulted continually during preparation. F. Sustainability and Risks 1. Sustainability: Capacity-building for improved systematic management of key infrastructure assets (airports, roads and bridges, coastal protection structures) is the core institutional component of the project. For each sub-sector, the key project provisions determining sustainability are as follows: Airport infrastructure: (i) improved business planning and financial management; (ii) partnership with a world-class aviation authority; and (iii) GoS recognition of the importance of corporate autonomy and commercial orientation to the financial sustainability of the SAA. As part of the business plan, a facilities management system would be introduced later in this, or a subsequent, phase to maintain all airport assets in a sustainable condition. Road System Infrastructure: (i) restructured focus of PWD on core functions of policy advice and asset management; (ii) improved business processes and re-skilling of PWD staff; (iii) adoption of systematic road asset management, with resultant quantitative basis for annual budget allocation and work prioritization and systematic evaluation of asset condition and level of service; and (iv) sustained participation of the domestic private sector and openness to regional competition. Coastal Infrastructure: (i) the updated mapping information will provide an accurate basis for valuing assets at risk, and for the long-term monitoring of physical changes and effectiveness of CIM strategy; (ii) conservation of the natural shoreline environment will be dependent on the acceptance and appropriate application of soft solutions for coastal protection where appropriate under the CIMPs, and on environmental management exercised by community citizens; (iii) the sustained protection of public and private assets in the coastal hazard zones will depend on the success in motivating the traditional leaders and private contractors to control land uses in some hazard zones in accordance with the CIMS, and on constructing protective structures only in accordance with the CIMPs; and (iv) a considerable extent of the coastline, including the most vulnerable areas, is already protected for a 20-year storm through previous investments and aid. Sustainability is thus critically dependent on successfully modifying the behavior of local leaders, citizens and contractors through consultation and participation based on the CIMS and CIMPs. Capacity-building: In the delivery of public works, on (i) the considerable progress already made in private sector participation (30%) and active consultation of staff and stakeholders on the reformn process; (ii) the reform-oriented present leadership of PWD, and progressive support under subsequent phases of the IAM Program; (iii) strategic GoS support for public sector reform; and (iv) the readjustment in Phase I which slows the pace of reform in PWD to allow further development of support from key stakeholders in GoS. Project Appraisal Document Page 21 Title: Infrastructure Asset Management Project Country: Samoa 2. Critical Risks (reflecting assumptions in the fourth column of Annex 1): Risk Risk Rating Risk Minimization Measure Annex 1, cell "from Outputs to Objective" Project outputs to development objectives i) GoS might lose momentum for public sector reform M Agreed targets and for passing enabling legislation; ii) Local budget allocations inadequate. N Agreed targets based on the Road Asset Management System, under a Covenant iii) Cyclone or major economic disruption M Implement coastal protection on schedule Project components to outputs i) Partnering charter assumed effective to achieve timely N Advisory support from regional agencies dispute-free implementation of airport works; (e.g., Transit NZ). ii) Political influence changing the PWD program M Transparency of RAMS management system priorities could reduce the benefits; outputs. iii) Procurement procedures not applied transparently or N Standard procurement reviews and competition distorted in thin market engagement of private sector through development workshops. iv) Endorsement by Treasury, PSC or Minister of Works M Continuing consultation with key is crucial for key reform steps of PWD stakeholders, and modification of public works legislation is a trigger criterion for Phase II project. v) PWD asset manager positions need to be adequately M Condition of second tranche of AusAID staffed during the project cofmancing vi) Political influence continues to impose costs on SAA M Cost recovery target for SAA must be met as without matching resources, or delays increase of the a prior condition for IAM-2. departure tax or other tariffs Overall Risk that project may not achieve its N development objective(s) Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk) 3. Possible Controversial Aspects: This is the first IDA operation financing airport infrastructure for some time, and its justification is based on satisfying applicable international operational safety requirements because a full conventional cost-benefit analysis is not possible. G: Main Loan Conditions 1. Effectiveness Conditions: a) Establishment of the PMU, appointment of the Project manager and Project accountant, and a Project accounting system satisfactory to IDA is operational; and b) Execution of the Subsidiary Loan Agreement with SAA, and the AusAID Grant Agreement. 2. Other [classify according to covenant types used in the Legal Agreements.]: a) Continued authorization and operation of the Infrastructure Asset Management Program and Project Steering Committee, representing all major stakeholders. Project Appraisal Document Page 22 Title: Infrastructure Asset Management Project Country: Samoa b) Adoption of a recommended increase in passenger departure fee at Faleolo International Airport to at least WST 30, within two months of commencement of rehabilitation of the terminal building. c) Sub-projects shall be selected that are technically and environmentally viable, and economically justified as follows: i) for part B, roads, in accordance with criteria agreed upon by IDA and the Borrower; ii) for Part C, coastal schemes - has been publicly discussed and agreed by District inhabitants, conforms with emerging strategy (CIMS) and design guidelines as endorsed by DLSE and cleared by IDA, has a maintenance program undertaken by the District; iii) timely review of land and compensation aspects by Land Board; iv) land and compensation plan approved by IDA. d) PWD, DLSE and SAA are committed to the sustainable environmental management of assets constructed under the Project, and will comply with EIA procedures acceptable to IDA (provisionally based on the draft Environmental Impact Assessment (EIA) Regulation of 1998, excluding for the purposes of this Project those provisions relating to the Environment Board, Ministerial consents and Penalties), for the design, procurement and implementation of: (i) all works carried out under the Project from December 31, 1999 onwards; and (ii) for not less than 80% of all works funded under their respective budgets from June 30, 2001 onwards; and e) That (i) Codes of Environmental Practice for civil works and services, satisfactory to the Association, have been adopted by PWD and endorsed by DLSE not later than September 30, 1999; and (ii) the Codes are in effect and incorporated in contract documents and the Program is implemented in accordance with the said Codes from September 30, 1999 onwards. f) The Borrower shall endeavor, taking into account prevailing macroeconomic conditions, to ensure that adequate budget is allocated and programmed for preservation of road and bridge assets in each year of the Program, providing: (i) for periodic maintenance, an average resurfacing cycle of not more that seven years on sealed main roads and of not more than ten years on sealed secondary roads; (ii) for routine maintenance, continuation of levels on a 3-year rolling average not less than 1998 in real terms during the Project. g) The Borrower shall develop specific recommendations, costed justifications and an action plan for improved delivery of works and services by PWD, considering retention within PWD, contracting out, privatization and asset leasing options, that are acceptable to the Association and co-financier and submit this not later than December 31, 2000 for endorsement by Cabinet. H. Readiness for Implementation [X] The engineering design documents for most of the first year's activities are complete and ready for the start of project implementation. [ ] Not applicable. [X] The procurement documents for the first year's activities are complete and ready for the start of project implementation. [X] The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. [ 3 The following items are lacking and are discussed under loan conditions (Section G): None. Project Appraisal Document Page 23 Title: Infrastructure Asset Management Project Country: Samoa I. Compliance with Bank Policies [X] This project complies with all applicable Bank policies. [ ] [The following exceptions to Bank policies are recommended for approval: The project complies with all other applicable Bank policies.] Task Team Leader/Task Manager: , William Paterson Sector Manager/Director: _ l11 Jitendra N. Bajpai Country Manager/Director: _ _ __ I __( Klaus Rohland Project Appraisal Document Page 24 Title: Infrastructure Asset Management Project Country: Samoa Annex 1: Project Design Summary Narrative Summary Key Performance Indicators Monitoring and Critical Assumptions Evaluation Sector-related Goal: (Goal to Bank Mission) Restructuring of public service Private sector participation in Treasury - Summary of Improved service delivery to achieve an efficient public infrastructure provision at least Departmental and reduced direct provision and private sector partnership 80% annually performance indicator by government will achieve (Baseline and targets to be reports better use of public funds, reviewed during IAM-I) promote sustain-able Public sector reform economic growth and review reports reduce poverty. IAM Program Purpose END-OF-PROGRAM INDICATORS (Purpose to Goal) Key infrastructure assets are 2006 sustainable and managed (ALSO PHASE II IAM-2) A successful experience effectively by a partnership of * Annual asset with IAMP will stimulate stakeholders . All primary road, aviation, and management plans and improve reform of other public coastal infrastructure from PWD and SAA parts of the public sector. are under asset management and information systems . Project feasibility * At least 60% of GoS road and reports and PWO coastal infrastructure poram PWd developments satisfy program budget economic, environmental and report social appraisal and comply with priorities of approved sectoral plan * PMRs and Min. * At least 80% of coastal Internal Affairs communities protected through records Coastal Infrastructure Management Strategy (CIMS) * Annual audited * Public cost recovery targets accounts from SAA achieved: 80% full costs for and PWD aviation (SAA); and 100% primary roads preservation (PWD) * New PWD annual * At least 60% overall private corporate report sector provision of formerly public works and services. * Coastal asset management database Project Development END OF Phase I - IAM-1 (Objectives to Purpose) Objectives Phase I (IAM-1): Vital Priorities and * Primary road infrastructure is * Annual asset * GoS maintains Strengthened Management: under asset management and management plans momentum for public Key transport and coastal information system: from PWD and SAA sector reform through infrastructure assets are Jun-00: Surveys complete, Cabinet and PSC upgraded and under perforn- RAMS installed; * Project feasibility ance-oriented management Jun-02: RAMSfully reports and PWD * Ministers and project operational, statistics issued. program budget proponents accept need * At least 40% of GoS road and report for project appraisal and coastal infrastructure act on results. developments satisfy economic, environmental and Project Appraisal Document Page 25 Tide: Infrastructure Asset Management Project Country: Samoa Narrative Summary Key Performance Indicators Monitoring and Critical Assumptions Evaluation social appraisal: * PMRs and Min. * Support from MIA, Jun-00: 25% comply Internal Affairs DLSE and Cabinet for Jun-02: 40% comply. records extension of CIMS to all * At least 3 coastal communities coastal Districts participate with Coastal * Annual audited Infrastructure Management accounts from SAA * International air traffic Strategy (CIMS): and PWD growth meets 4% p.a. Jun-00: I district participates target and Cabinet Jun-01: I effective, 2 partic. * New PWD annual allocates funds for any Jun-02: I effective, 3 partic. corporate report new non-commercial * SAA level of cost recovery development imposed on based on full costs (including * Coastal asset SAA. economic depreciation of all management assets) increased from the database * Minister of Works and baseline as of FY98, by a Cabinet continue support minimum of 3 percent. for new PWD role and Jun-99: baseline confirmed majority private sector Jun-00. baseline + 0%. provision. Jun-02: baseline + 3%. * New PWD organization for * Private sector capacity policy and asset manager role and quality increased, and is fully operational and staffed, effectively competitive with majority private sector provision of works and services. Jun-99: baseline PSP 40% Jun-01: PSP 50% W&S Jun-02: PSP 60% W&S * Accident rate and child fatalities decline 20 percentage points on unit travel from 1997. Jun-00: acc/veh =< 1997 level childfatals down 5pp Jun-02: acc/veh <0.8*19971ev childfatals down 20pp. Outputs (Outputs to Objectives) 1.0 End of Program A. Air transport infrastructure * SAA airports rationalized and * Safety and No major cyclone during is adequate and sustainable operating with asset Performance Audits project for national economic management of Faleolo Airport growth I No major economic 1.1 Faleolo International * Independent Safety disruption Airport has 15-yr projected and Operations Audit capacity, operations comply with to ICAO standards; Local budget allocations ICAO standards, passenger SAA records adequate. processing satisfies IATA Category C. * SAA audited accounts Tenders Board strengthened and business plan and improved capacity 1.2 Processing time for aircraft arrival (from touchdown to last passenger exit through customs) improved: Jun-00 10%; Jun-01 15%, Jun-02 20%. Project Appraisal Document Page 26 Title: Infrastructure Asset Management Project Country: Samoa Narrative Summary Key Performance Indicators Monitoring and Critical Assumptions Evaluation B. Reliability and safety of * % of primary road network * PWD road surveys, & PWD periodic maintenance road system assets is under satisfactory maintenance; New road asset budget adequate and improved. Jun-00: 80% (150 29 (13.1) 4.6 single lane, east On only link to the South Coast of Savai'i. (0) approach washed away Falevao 2,500 >250 29 Normal 11.6 single lane, Bailey On only link to E-SE Coast of Upolu. (10) (7) timber deck, some Duplication of existing single lane inferior corrosion on engineering grounds Fagali'i 400 5,500 30 Normal 63.9 Concrete ford & Main link to domestic airport, detour 3.5 (3) (9.8) culvert, 1.5 lane, slab km; road sag and sight distance are safety brok-en & scoured hazard. Falefa 500 >50 20 Normal 7.5 single lane, corrosion Only link to two villages. Upgrade of (8) (6.5) below timber deck superstructure inferior. No alternative routes Program 7,300 12.7 Source: Public Works Department, November, 1998. Economic analysis details on IDA Project File For the pedestrian facilities, the cost-benefit analysis assesses the expected savings deriving from reduction in accidents, fatalities and injuries, and evaluates switching values of these accident savings relative to the cost of works. The proposed program, shown in Table A4-3, comprises 4.7 km of pedestrian facilities serving about 30,000 pedestrians daily at a cost of WST 700,000. The program is highly justified based on expected accident savings alone (assuming that effectively connected accidents are reduced by 50%), as the switching value at which schemes would become uneconomic is a low value of WST 7,780 (USD2,590) per statistical accident. The proposed program has a benefit:cost ratio conservatively estimated at 30:1 Project Appraisal Document Page 45 Title: Infrastructure Asset Management Project Country: Samoa Table A4-3: IAM-1 Pedestrian Traffic Schemes - Proposed Program Prio Location Site Cost Road Pedestria Accid- Remarks: rity Igth est. Traffic n traffic ents2 Function, social environment, critical issues, etc. (m) (WST) (veh/d) (level') (no./yr) Beach Road 1,000 170,000 16,173 High 3 Main road within city of Apia and business district; (9) provides access and service to major supermarkets, businesses, government depts. foreign missions and main wharf; generates extremely high volume of pedestrians from local residents as well as tourist hence good pedestrian facilities very important. Footpaths partly rehabilitated under IDA Credit 2132-1-WSO, rest need reconstruction; propose continue concrete f/path with some drainage upgrading mainly on one side of the road. 2 Lelata-NUS 1,700 180,000 4,670 Medium 4 Main access to major government teaching institutes to High (5) including the National University, Polytechnic and (high Samoa College, volume of pedestrians especially under during 18 yrs of age is very high. Existing f/path is by means school of rd shoulder about 0.3m-1.5m wide intertwining with season) rd table drain in some areas; propose new concrete kerb with gravel f/path on one side of the road. 3 Convent 700 120,000 12,780 High 5 Alternative route to Beach Rd in Apia servicing Street various businesses along the full extent of its length generating high volume of pedestrians; existing conc. f/path badly damaged and propose replacing with new conc. f/path on both sides of the road and upgrading some of the drains in the process. 4 Fugalei 2,300 230,000 10,825 Medium 5 Main link from west coast road to west of Apia city Street to High (6) and especially to the main produce market at Fugalei (high thus making the area an extension of the Apia business between trading area to the effect that many new businesses are Beach Rd quickly establishing here; both vehicular and and pedestrian traffic continues to grow and a new Fugalei conc.kerb with gravel or asphalt f/path is proposed on Market) both sides of the road; the existing f/path is by way of the rd shoulder 2m-0.2m wide. Program 5,700 700,000 44,450 -30,000/d 17 ._____ Total I Note: The switching value on average for accidents under these improvements (assuming 50% reduction in accidents and costs averaged over 20 year facility life, with a discount rate of 10 per cent) = 700,000 / [17 * 0.50 * 8.5136) = WST 9678 per statistical accident. (Note that if, with increasing motorization, the rate of accidents at these sites can be expected to increase, without the proposed improvements, at say 3 per cent p.a., then the switching value drops to WST 7777.) The Accident Compensation Board is understood to use a (maximum) figure of WST 40,000 for fatalities Following an update of road network conditions and traffic levels/mix, warranted road maintenance over the project period (8 years) will be assessed. These assessments will be made during the course of the IAM-1 project and, for major works (for example, substantial upgrading), detailed feasibility studies are to be undertaken. A prime candidate is the country's busiest road corridor, the West Coast Road - linking Apia to Faleolo Airport and the ferry terminal at Maleafuna. For other works, basic data --traffic levels, nature of trip purposes, and road condition, will be established and a programmatic approach applied. Pedestrian traffic levels: High: >7500/day; Medium 2500 to 7500/day; Low: < 2500/day. 2 Accidents apportioned to effective length (Total accidents in vicinity shown in parentheses). Project Appraisal Document Page 46 Tide: Infrastructure Asset Management Project Country: Samoa 4. Coastal Protection Infrastructure 4.1 Objective and Benefits Samoa is exposed to severe hazardous weather, especially cyclone events. These events damage the natural coastline as well as man-made assets located in a coastal hazard zone. The overall objective of this component is to provide integrated and environmentally sustainable planning and management of coastal infrastructure assets. A coastal infrastructure management strategy, including adoption of rigorous assessment of design alternatives in combination with local community consultation and awareness, can be expected to yield a more socially, environmentally, and economically sustainable outcome for the very valuable natural and man-made assets located in Samoa's coastal areas. For individual sites where a possible protection intervention is proposed, the principal benefits aresavings in expected physical damage/repair costs to assets (such as road infrastructure, schools, churches, and fales) from future cyclones as well as savings in the avoided costs of the ensuing social and economic disruption (typically until damaged facilities can be repaired/restored). In addition, there are benefits, or possibly disbenefits, associated with a site's environmental assets. Some protective interventions, such as rock walls, may impair the local environmental amenity and attractiveness --- this may have a negative economic (and financial) impact through reduction in exports (foreign tourism). These disbenefits need to be factored in to a full cost benefit analysis of intervention alternatives. Indeed, ironically, without due care, a rock wall may provide high protection to the road and buildings at a beach resort, but so change the site as to eliminate the (natural shoreline) main source of the demand for the resort. In such a case, the expected losses (or possibly insurance premiums) with an unprotected site (or at least not with rock walls) become a business expense; the commercial sustainability of the site hinges on whether it remains profitable. Quantification of environmental amenity benefits and estimation of the savings in disruption costs from (typically temporary) loss of an asset, such as a road section or church have also been set aside at this early stage. Further development and refinement of the assessment methodology is planned to be progressed through Phases 1 and 2. 4.2 Assessment Methodology The economic justification of major protection civil works is based primarily upon aneconomic cost benefit analysis. The methodology calls for balancing the capital and maintenance costs of alternative protection works against the expected savings in asset loss from exposure to various severe weather events. Behind this basic approach there is a need to characterize the severity of rare weather events (specifically cyclones) in such a way as to enable the probability and degree of damage of their impact on specific coastal sites to be estimated, contingent upon investment in particular protection structures. The technical/coastal engineering analysis of alternative designs and the bases of damage prevention and capital and maintenance/replacement costs of protection are set out in Appendix A to the Coastal Component Implementation Plan. Accordingly, the implementation of the methodology developed here for economic appraisal is "experimental" and based on five steps: Step 1: For each specific site proposed for protection, an inventory of all existing assets (road section, houses, community fales, schools, churches, retail stores, commercial activity, other) in the hazard zone is established and a valuation assigned to each asset, normally its current replacement cost. Step 2: A set of alternative protection designs is formulated, for example, rock sea wall, breakwater, or beach nourishment. The capital and maintenance cost of each alternative is estimated, together with its protection performance at a specific site for various cyclone events, by return period. The "Do Nothing" alternative is adopted as the base alternative. Step 3: For each alternative protection design, the spatial pattern of intrusion - "hazard impact area" - for various levels of cyclone intensity (return period) and associated probability is estimated. (In the preliminary approach, this impact area was fixed at a 30 meters strip along the coastline.) Project Appraisal Document Page 47 Title: Infrastructure Asset Management Project Country: Samoa Step 4: The impact of each protection intervention on the coastal natural environment is identified and, as appropriate, loss/gain in environmental amenity associated with each protection alternative. These valuations should draw on local transferability of valuation associated information about similar amenities, to the extent that it exists. In general, these are not available, in which case switching valuations (as benefits or disbenefits) may be used to guide design. (In the preliminary approach, environmental evaluation will be addressed by a separate approach, involving village consultation.) Step 5: The best protection structure is identified by a balance between additional capital works and maintenance cost (together with any environmental disbenefits) and increased savings in expected asset (and service) loss, i.e., that protection alternative which provides the highest expected net present value of benefits less costs, relative to the do nothing alternative. In some locations, only a very limited number of alternative structures may be technically feasible and practical; this is often the case with sea wall design. In other locations, it may be optimal to introduce no protection works, while in others, control of land use and, in particular, restrictions on private/village development of the land and the foreshore may warrant negotiation. The latter warrants serious attention in situations where local actions (for example, establishing a auto service station, removing beach sand, or constructing groynes ) impose negative externalities. In all cases including customary land intervention will hinge on consultation and agreement with local villages. Two specific coastal protection sub-projects, advanced by GoS for the Phase 1 works program, have been assessed on economic grounds. Details of application of the methodology and data used are documented in the Project file. These sub-projects will serve as pilots to test the overall coastal management strategy, including consultation. Details of the technical basis for design of protection alternatives, including estimation of their capital and maintenance (partial replacement) costs, and characterization of a vulnerability index and estimation of damages prevented, are set out in the Coastal Protection Component BPIP, particularly Appendix A. The results of the combined technical-economic analysis for two pilot sites, proposed for Phase 1 of the Program, are summarized in Table A4-4. Table A4-4: Economic Analysis of IAM- 1 Coastal Works Present Values (WST '000) t) Coastal Protection Site(2) Fagali'i Faga Value of All Assets in Hazard Zone(3) 0 - 30 meters 8,480 3,237 Perimeter of Coastline 14.133 3.808 Low Protection (Existing Crest 1.7 m) (Crest 2.5 m) Capital Cost 266 280 Maintenance Cost 1,740 844 Damage Saved 13 327 Net Present Value (3,491) (797) IRR n.a. n.a. Improved Protection(4) (Crest 2.9 m) (Crest 2.9 m) Capital Cost 223 298 Maintenance Cost 320 441 Damage Saved 2,822 1,077 Net Present Value 2,279 338 IRR 132% 25% Notes: (1) Present values over 20 year planning period and 10% discount rate. (2) Evaluation Methodology described in Annex 4. (3) Based on replacement cost, 1998 prices. (4) Practical limit based on site conditions and material evaluation Project Appraisal Document Page 48 Title: Infrastructure Asset Management Project Country: Samoa These results indicate that "Improved Protection" is warranted at both the Fagili'i and Faga sites, as it yields a positive net present value of WST 2.279 million and WST 0.338 million respectively, at these sites. (The corresponding IRRs are 132 per cent and 25 per cent, respectively.) These results are most sensitive to the lowest intensity cyclone (high frequency) for which "damage vulnerability" becomes negligible. (A ten year return period was adopted, however a 15 year return period in both cases drops the NPV to a negative level.) This indicates the need for more technical work on establishing "tight" estimates of this factor. As noted above, this pilot analysis applied omits some benefits and costs. Protection will also provide savings from prevention of disruption of road traffic and disruption of the services associated with buildings. On the cost side, the protection works "disturb" the amenity value of the natural coastline. Approaches to valuation of these other areas will be developed as the CHZ Strategy and its evaluation is progressed beyond this preliminary pilot stage during Phase 1. 4.3 Aspects of Bank Experience in Post-Cyclone Reconstruction and Mitigation The Bank has been involved for over 20 years in a number of projects involving reconstruction and mitigation associated with cyclones. In many cases the impact extends far beyond coastal areas; often it involves large regions of a country. A summary overview of Bank experience in cyclone related projects has been prepared and is available in the Project Files. Work in other countries has demonstrated that impacts can extend across many sectors and that this allows the impacts of such devastating events to be traced, especially on the poor. Increasing emphasis is being placed on (i) the sustainability of restoration and the prevention of future losses (rather than simply the repair of current losses which remain just as vulnerable to potential damage as before); (ii) environmental sustainability issues, and (iii) social issues as ecosystems and natural forms of coastal defense are threatened by rapid expansion of cities including land reclamation in coastal areas. Project Appraisal Document Page 49 Title: Infrastructure Asset Management Project Country: Samoa Annex 5: Financial Summary for Revenue Earning Project Entities Samoan Airport Authority: Years Ending June 30, 1993 through 1998 (In Millions of Current Samoa Tala (WST)) Actual Av. Annual 1998a 1997 a 1996 1995 1994 c Growth (/o) PROFIT AND LOSS STATEMENTS: Income Departure Tax 1,804 1,886 1,869 1,784 1,774 1.2 Landing Fees 1,370 1,354 1,339 1,436 1,841 -5.6 Ground Handling - - 21 358 -20.0 Duty Free Levy 75 110 102 179 175 -15.8 Rentals & Concessions 125 125 123 138 133 -2.6 Other Income 150 189 184 188 200 -4.2 Total Income 3,524 3,664 3,617 3,725 4,481 -4.1 Expenditure Depreciation 2,400 2,400 2,300 2,300 2,389 0.8 Salaries 1,643 1,525 1,529 1,434 1,419 3.7 Insurance 290 310 284 271 289 2.4 Repairs & Maintenance 345 344 431 317 434 -2.8 Other Expenses 865 864 869 841 881 0.1 Total Expenditure 5,431 5,441 5,413 5,163 5,412 0.9 NetLoss d 1,887 1,777 1,796 1,438 931 18.2 BALANCE SHEET ITEMS Current Assets Cash, Deposits, Prepayments 382 386 846 972 962 -20.1 Trade Debtors 660 600 587 1,038 1,278 -15.2 Total Current Assets 1,042 986 1,433 2,010 2,204 -17.3 Non-Current Assets Fixed Assets ' 61,816 60,318 58,506 57,654 57,112 2.1% Less Depreciation 27,207 24,807 22,402 20,067 17,667 12.6% Total assets 35,569 36,497 37,697 39,665 41,650 -3.8 Current Liabilities 2,046 1,087 510 642 1,146 25.1 Owners' Equity Government Contribution 53,658 53,568 53,568 53,568 53,568 0.0% Less Accumulated Loss 20,045 18,158 16,381 14,584 13,063 12.7% 33,523 35,410 37,187 38,984 40,504 -4.4% 35,569 36,497 37,697 39,665 41,650 -3.8% a estimates made by consultants based on budgets and other management information provided by the SAA b unaudited figures provided by the SAA c audited figures d losses are in dollar value for that year and have not been deflated e fixed assets valued at historic cost Project Appraisal Document Page 50 Title: Infrastructure Asset Management Project Country: Samoa Annex 5 (ctd.): Samoa Airport Authority - Forecast for Project Scenario Year Ending June 30, 2000 through 2004 Forecasta Av. Aniualb 2000 2001 2002 2003 2004 Growth (%) PROFIT AND LOSS STATEMENTS: Income Departure Tax 2,760 2,760 2,898 3,043 3,195 3.7 Landing Fees 2,362 2,362 2,480 2,604 2,734 3.7 Ground Handling 313 313 329 345 362 3.7 Other Income 575 575 604 634 666 3.7 Total Income 6,010 6,010 6,311 6,626 6,957 3.7 Expenditure Depreciation 3,135 3,135 3,135 3,135 3,135 0.0 Salaries 1,500 1,500 1,560 1,622 1,687 3.0 Interest 1,125 1,209 1,300 1,398 1,502 7.5 Other Expenses 1,500 1,500 1,575 1,654 1,736 3.7 Total Expenditure 7,260 7,344 7,570 7,809 8,061 2.7 Profit or Loss -1,250 -1,334 -1,260 -1,183 -1,104 -2.8 Add non-cash items Depreciation 3,135 3,135 3,135 3,135 3,135 0.0 Interest 1,125 1,209 1,300 1,398 1,502 7.5 Operating Cash Flow 3,010 3,010 3,176 3,350 3,534 4.1 Less new Investment 1,700 1,700 1,700 1,700 1,700 0.0 Cash Surplus- 1,310 1,310 1,476 1,650 1,834 8.8 BALANCE SHEET ITEMS Current Assets 2,400 3,710 5,186 6,835 8,669 37.9 Fixed Assets 76,800 76,800 76,800 76,800 76,800 0.0 Less Depreciation 29,802 31,237 32,672 34,107 35,542 4.5 46,998 45,563 44,128 42,693 41,258 -2.9 Total assets 49,398 49.273 49,314 49,528 49,927 0.3 Current Liabilities 1,000 1,000 1,000 1,000 1,000 0.0 Non-current Liabilities 16,125 17,334 18,634 20,032 21,534 7.5 Owners' Equity Government Contribution 53,568 53,568 53,568 53,568 53,568 0.0 Less Accumulated Loss 21,295 22,629 23,889 25,072 26,175 5.3 Net owners' equity 32,273 30,939 29,679 28,496 27,393 -3.6 Total liabilities & equity 49,398 49,273 49,314 49,528 49,927 -0.3 a as applicable, same assumptions as for Financial Summary b based on single compound rate Years 2000-2004 Project Appraisal Document Page 51 Title: Infrastructure Asset Management Project Country: Samoa Annex 6: Procurement and Disbursement Arrangements 1. Procurement of works and goods will follow IDA Guidelines dated January 1995, revised in January and August 1996, September 1997 and January 1999. Standard Bidding Documents (including standard prequalification and bid evaluation documents) will be used for all IDA financed procurement. Procurement of consulting services will conform to IDA Guidelines dated January 1997, revised in September 1997 and January 1999. A Procurement Plan, providing a timeline for each step in the procurement process is included in the PIP, and will be updated quarterly. Procurement methods (Table A) 2. The project costs by procurement arrangement are shown in Table A. Works with a contract value estimated to cost over $1 million, including the airport runways and terminal, will be procured by International Competitive Bidding (ICB). Works with a contract value estimated to cost less than $1 million, including bridges, roads, coastal protection and traffic safety, are small and scattered and will be procured by National Competitive Bidding (NCB). Of the works financed under the credit, 51% will be ICB. The NCB procedures have been reviewed: the documents are based on New Zealand S 3910-1989, which is itself based on FIDIC IV, and are broadly consistent with Section I of the Guidelines and acceptable to IDA. 3. Goods with a contract value estimated to be more than $ 100,000 will be procured by ICB, with the exception of specialized asset management equipment which, with an estimated contract value of up to $ 130,000, will be procured by Limited International Bidding (LIB). Goods with a contract value of less than $ 100,000, generally consisting of computing, office equipment and some traffic safety items, will be procured by NCB in order to ensure after-sales-service. At the request of the borrower, a margin of preference may be provided in the evaluation of bids for goods manufactured in Samoa, as provided in par. 2.54 and 2.55 of the Guidelines. ICB will be used for 80% of the value of goods procured under the project. 4. Consultants will be appointed following IDA Selection of Consultants dated July 1997, revised April 1998. Firms will be appointed for most services, as shown in Table Al, using QCBS, with the exception of the Technical and Economic Review of SAA which was carried out during project preparation, for which the same consultant was used who had carried out Phase I of the study, and for which a single source procedure was used. Individuals were or will be appointed for the services of Project Preparation Coordinator, Project Management Unit, and short term advisors to PWD and SAA. All consulting assignments with a contract value estimated to cost more than $ 200,000 will be advertised in Development Business. Prequalification 5. Contractors for ICB works, which have an estimated contract value of more than $1 million, will be prequalified in accordance with IDA guidelines. Contractors for NCB works are registered according to class with PWD, but foreign contractors who wish to bid are permitted to do so and are post-qualified. Prior review thresholds (Table B). 6. The thresholds for procurement by ICB, NCB and LIB are shown in Table B. The thresholds for prior review are the same, with the exception that the first two contracts for NCB procurement of the annual program of works will be subject to prior review. The threshold for prior review of ICB works is US$ I million equivalent and for prior review of goods US$ 100,000 equivalent. Prior review would apply to 79% of the total value of works and goods procurement under the project. Ex post review would cover 100% of contracts not subject to prior review. Project Appraisal Document Page 52 Title: Infrastructure Asset Management Project Country: Samoa B. DISBURSEMENT Allocation of loan proceeds (rable C). 7. The allocation of credit proceeds is shown in Table C, together with the disbursement percentage proposed in each category. Use of statements of expenses (SOEs). 8. For Civil Works contracts valued at less than US$1,000,000 equivalent and Goods contracts valued at less than US$100,000 equivalent, applications will be supported by Statements of Expenditure (SOEs). For Civil Works contracts valued at US$1,000,000 equivalent and over, for Goods contracts valued at US$100,000 equivalent and over, for Specialized Asset Management Equipment and all consulting service contracts, withdrawal applications would be supported by full documentation and signed contracts. Special account 9. In order to facilitate disbursements for local and small expenditures, two Special Accounts will be established in a bank acceptable to IDA and on terms and conditions acceptable to IDA. The accounts will be established in the Central Bank of Samoa and managed by the Departmnent of the Treasury, Ministry of Finance. One account would be maintained in US dollars, with an authorized allocation of USD 500,000.00 equivalent, an initial deposit of USD 250,000.00 equivalent and the balance to be withdrawn when the amounts disbursed and committed total USD 2,000,000.00 (SDR 1,450,000) equivalent. The second account will be maintained in Australian dollars for disbursement of the AusAID grant funds, with an authorized allocation of AUD..., an initial deposit of AUD ..., and the balance to be withdrawn when the amounts disbursed and committed total AUD ... equivalent. The borrower would submit a replenishment application for the Special 1kccount on a monthly basis or when the account is drawn down by 30 percent of the initial deposit, whichever occurs first. Replenishment of the Special Accounts would follow IDA procedures. The Special Accounts and the Project accounts would be audited annually by independent auditors acceptable to IDA. Retroactive Financing 10. In order to finance implementation activities not covered under the Project Preparation Advance, retroactive financing in an amount up to SDR 1,000,000 (9.7 percent of the IDA Credit amount) will be provided. Payment made for consultant services, civil works and goods for Component A, International Airport Infrastructure and Component B, Road System Infrastructure, procured in accordance with the provisions above and expended after July 1, 1998, shall be eligible for retroactive financing. This provision allows the most urgent physical investment priorities, which include the design, runway works and emergency equipment procurement for the safety improvement at the airport, and urgent bridge engineering and works, to proceed on schedule prior to the expected Credit effectiveness date of May 1999. Project Appraisal Document Page 53 Title: Infiastructure Asset Management Project Country: Samoa Annex 6, Table A: Project Costs by Procurement Arrangements' (in US$million equivalent) Expenditure Category Procurement Method Total Cost ICB NCB Other NBF (including contingencies) 1. Works 5.3 4.9 10.3 (3.7) (3.5) (7.2) 2. Goods 1.9 0.3 0.2 2.4 (1.9) (0.3) (0.2) (2.4) 3. Services 6.1 6.1 (4.8) (4.8) 11.31 11.31 Total 7.3 5.2 6.3 18.8 (5.7) (3.7) (5.0) (14.4) ____________________ _______ _ _ _ _ _ _ _ _ _ _ 1.3 1 _ _ _ _ [1.3 1 Notes: (1) Other: Goods are specialized asset management equipment, to be procured by LIB Services are to be procured in accordance with IDA Guidelines (2) Figures in parenthesis () are the amounts to be financed by the IDA credit, and in brackets [] are the amounts to be financed by the AusAID grant. For details on presentation of Procurement Methods refer to ODI 1.02, "Procurement Arrangements for Investment Operations." Details on Consultant Services can be shown more easily in the Table Al format (additional to Table A, where applicable). Project Appraisal Document Page 54 Title: Infiastructure Asset Management Project Country: Samoa Annex 6, Table Al: Consultant Selection Arrangements (optional) (in US$million equivalent) Total (incl. Expenditure Category QCBS QBS SFB LCS CQ Other NBF contingencies) A. Firms Airport engineering 743 795 Road, bridge, safety and coastal 587 604 Coastal strategy 930 700 PWD restructuring 1773 1047 Asset management system 116 618 TCB road safety 127 116 DLSE institution 347 346 SAA business improvement 184 PMU 619 619 Project Preparation SAA economic and technical 47 47 SAA safety audit 28 28 SAA minor airports 35 35 CHZ ground survey 8 8 Accounting review 10 10 PPC 99 99 B. Individuals PWD Component manager 180 180 SAA Component manager 70 70 DLSE Component Manager 180 180 Total 5464 619 6083 Notes: (1) QCBS= Quality- and Cost-Based Selection QBS = Quality-based Selection SFB = Selection under a Fixed Budget LCS = Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = SAA Review: Single-Source selection (per Sections 3.8 - 3.11 of the Consultants Guidelines Individuals: Selection of individual consultants (per Section V of Consultants Guidelines) NBF = Not Bank-financed. (2) All Consultant services are financed 100% by the IDA credit (3) PWD = Public Works Department DLSE = Department of Lands, Survey and Environment SAA = Samoa Airports Authority Project Appraisal Document Page 55 Title: Infrastructure Asset Management Project Country: Samoa Annex 6, Table B: Thresholds for Procurement Methods and Prior Review' Contract Value Contracts Subject to Prior Review/ (Threshold) Procurement Estimated Total Value Subject Expenditure Category US$ Method to Prior Review (US$ million) 1. Works Civil works 1,000,000 and ICB All; (5.1) over Civil works less than NCB First two contracts for each annual works 1,000,000 program; (1.9) 2. Goods 2a. Except specialized asset 100,000 and ICB All; (1.9) management equipment over less than NCB None 100,000 2b. Specialized asset management less than LIB All; (0.3) equipment 130,000 3. Services Consulting Services All All; (5.6) Total value of contracts subject to prior review: US$ 14.9 million (79%) Thresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement Documentation" and contact the Regional Procurement Adviser for guidance. Project Appraisal Document Page 56 Title: Infrastructure Asset Management Project Country: Samoa Annex 6, Table C: Allocation of Loan Proceeds IDA AusAID Expenditure Category Amount in Amount in Financing Percentage US$million US$million 1. Works (a) Part A (SAA) 3.300 0 70% (b) Parts B and C (PWD) 3.000 0 70% 2. Goods and Vehicles 100 % of foreign expenditures for (a) Part A (SAA) 1.200 0 directly imported items; or 100% of (b) Parts C and D.1-3 1.000 0 local expenditures (ex-factory, net of-taxes) of locally manufactured items; and 80% of local expenditures for other locally procured items 3. Consultants services (a) Parts A and D.5 (SAA) 800 0 100% (b) Parts B, C and D.2-4 2,700 0 100% (c) Part D. 1 (PWD) 200 1.300 15% by IDA; 85% by AusAID. 4. Repayment of PPA 400 0 100% 5. Unallocated 1800 0.0 Total 14.400 1.300 Project Appraisal Document Page 57 Title: Infiastructure Asset Management Project Country: Samoa Annex 7: Project Processing Budget and Schedule Planned Actual (At final PCD stage) A. Project Budget (US$'000) 170 254.6 B. Project Schedule Time taken to prepare the project (months) First Bank mission (identification) 08/31/1997 08/31/1997 Appraisal mission departure 09/17/1998 12/10/1998 Negotiations 11/02/1998 02/231999 Planned Date of Effectiveness 01/01/1999 05/31/1999 Prepared by: Treasury Department, Public Works Department & Samoa Airport Authority Preparation assistance: PPF US$227,000; SPPF Trust Fund US$84,000; CTF US$64,000. Bank staff who worked on the project included: Name Specialty William D.O. Paterson Task Team Leader & Engineer Colin A. Gannon Transport Economist & Aviation Specialist Karen A. Hudes Legal Counsel Rosa Muleta Disbursement Officer Hakon Kryvi Environmental Specialist Heinrich K. Unger Pr. Environmental Specialist Concepcion del Castillo Social Scientist Bruce Harris Anthropologist Elizabeth Brouwer Country Officer & Anthropologist Stuart Whitehead Financial Analyst Project Appraisal Document Page 58 Title: Infrastructure Asset Management Project Country: Samoa Annex 8: Documents in the Project File* A. Project Implementation Plan Implementation Plan for the Infrastructure Asset Management project, Phase I (IAM-1), Draft Report, September 9, 1998. B. Bank Staff Assessments 1. Environmental Analysis. Final Report. Opus International Consultants Limited, November 1998. 2. Social Assessment and Consultation Framework Study. Final Report. O'Meara Consulting Inc., September, 1998 3. Assessment of Accounting and Reporting Capabilities of Executing Agencies. Final Report. Betham & Co. Certified Public Accounts. November 30, 1998. 4. PWD Institutional Strengthening Project. Concept Project Design Document. Draft. AusAID. July 24, 1998. 5. Economic Assessment of Project Components. Bank Project Economist. November, 1998. (Extended version of Annex 4.) C. Other C. I Airport a. Financial and Institutional Review of Samoa Airport Authority Economic and Technical Review of Proposed Airport Improvements. Final Report. Aviation and Tourism Management Pty Ltd. September 1998 b. Safety Audit and Operational Review of Samoa Airport Authority Operations at Faleolo International Airport and at Fagali'i, Moata and Asau Airports. Draft. ICAO. June 29, 1998. c. Review of Airport Charges. Pacific International Consulting Network Ltd. February 1998. d. Pacific Regional Civil Air Communications Project II (REG 7704) 6ACP REG 552 and 7 ACP REG 543. Inception Report and Implementation Plan. UK Civil Aviation Authority for the Pacific Regional Civil Air Communications Project. August 26, 1998. C.2 Public Works Department a. PWD Institutional Strengthening Study. Draft Report. SMEC International Pty Ltd, MDG Pty Ltd. & KVA Pty Ltd. November 1996. b. A New Partnership with the Private Sector: Proposals for Institutional Reforms in the Public Works Department. Paper by Leiataua I Punivalu. July 14, 1997. c. Institutional Reforms for Public Works Department. Paper by Leiataua Isikuki Punivalu. August 29, 1997. Project Appraisal Document Page 59 Title: Infrastructure Asset Management Project Country: Samoa C.3 Coastal and Environmental a. Indonesian Coral Reefs - An Economic Analysis of a Precious but Threatened Resource. Article by Herman Cesar, Carl Gustaf Lundin, Sofia Bettencourt and John Dixon. September 6, 1997. b. Economic Analysis of Indonesian Coral Reefs. World Bank publication by Herman Cesar. December 1996. c. Implications of Climate Change and Sea Level Rise for Western Samoa. Report by Robert Chase and Joeli Veitayaki. December 1992. d. Economic Evaluation of Coastal Damage Mitigation in Samoa: Economics, Environment and sustainable Development. Draft report by Asif Husain-Naviatti. December 23, 1998. e. Assessment of Coastal Vulnerability and Resilience to Sea-Level Rise and Climate Change. Phase II: Development of Methodology. SPREP, EAJ and OECC. March 1994. C.4 General a. Township Development Salelologa Savai'i, Western Samoa. PWD. b. Annual Statistical Abstract. Department of Statistics, Apia. 1994 c. Report of the Census of Population and Housing 1991. Department of Statistics, Apia. 1991 d. Central Bank of Samoa Bulletin. Vol. XII No. 1. March 1997. e. Report on the 1989 Census of Agriculture. Department of Statistics, Department of Agriculture, Apia. December 1990. *Including electronic files. Annex 9: Statement of Loans and Credits A. IBRD Loans and IDA Credits in the Operations Portfolio (as of March 3, 1999) Status of Bank Group Operations in Samoa IBRD Loans and IDA Credits in the Operations Portfolio Difference Between Original Amount in US$ Millions expected Loan or Fiscal and actual disbursements al Project ID Credit No. Year Borrower Purpose Orig Frm IBRD IDA Cancellations Undisbursed Rev'd Number of Closed Loans/credits: 8 Active Projects 0 Total 0.00 0.00 0.00 0.00 0.00 0.00 Active Loans Closed Loans Total Total Disbursed (IBRD and IDA): 0.00 46.48 46.48 of which has been repaid: 0.00 1.89 1.89 Total now held by IBRD and IDA: 0.00 41.30 41.30 Amount sold 0.00 0.00 0.00 Of which repaid 0.00 0.00 0.00 Total Undisbursed 0.00 .00 .00 c a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. b. Following the FY94 Annual Review of Portfolio Performance (ARPP), a letter based system was introduced (HS highly Satisfactory, S = satisfactory, U unsatisfactory, HU = highly unsatisfactory): see proposed Improvements in Project and Portfolio Performance Rating Methodology (SecM94-90 1), August 23, 1994. Note: Disbursement data is updated at the end of the first week of the month. 0 iJ a Project Appraisal Document Page 61 Tide: Infrastructure Asset Management Project Country: Samoa Annex 9: Statement of Loans and Credits B. STATEMENT OF IFC'S COMMITTED AND DISBURSED PORTFOLIO As of 31-Jan-1999, in US$ million) Committed and Disbursed Portfolio Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1995 PIIF Trop Resort 0.00 0.00 .16 0.00 0.00 0.00 .16 0.00 1995 PIIF Wilex Cocoa .33 0.00 0.00 0.00 .33 0.00 0.00 0.00 1998 MedCen Samoa Ltd .50 0.00 0.00 0.00 0.50 0.00 0.00 0.00 Total Portfolio: .83 0.00 .16 0.00 .83 0.00 .16 0.00 Approvals Pending Commitment Loan Equity Quasi Partic Total Pending Commitment: 0.00 0.00 0.00 0.00 Project Appraisal Document Page 62 Title: Infrastructure Asset Management Project Country: Samoa Annex 10: Country at a Glance Lower- POVERTY and SOCIAL East middle-- -- Asia income Development diarnond* Population mid-1 996 (millionS) 0.17 1,726 1,125 GNP per capita 1996 (US$) 1,200 890 1,750 Life expectancy GNP 1996 (b//Paons IJS$) 0.20 1,542 1,967 Average annual growth, 1990-98 Population I(%) 07 13 1.4 GNP Gross Labor force (%) 1.3 18 per --primary Most recent estimate (latest year available since 1989) capita enrollment Poverty: headeount index (% of population) . Urban population (% of total Popullation) 21 31 566 Life expectancy at birth (years) 68 66 67 Infant mortality (per 1,000 tive births) 22 40 4 1 Acc-ess to safe water Child mnalnutrition (% of children under 5) Access to safe water ff. of populatioN). 49 78 Illiteracy (% of population age 15+) 30 17 -. Western Samoa Gross primary enrollment (% of school-age population) 136 117 104 male .. 120 105 Lower-middle-income group Female .. 116 101 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ KEY E-CONOMIC RATIOS and LONG-TERM 1976 1985 1996 1 - - - GDP (millionys US$) .. 87.6 155.0 175.5 Eooi ais Gross domestic investment/GOP .. 30.6Opnesoecom Exports of goods and services/GOP .. 26.3 38.8 42.'7Opnesoecom Gross domest c savings/GOP .. -5.1I Gross national savings/GOP .. 3Z5 Current accotint balance/GDP .. 1.9 6.3 8,9 Interest payments/GOP .. 1.9 ..Savings -& . Investment Total debt/GOP ,. 86.9- Total debt service/exports 4.7 15.1 6.7 3.2 Present value of debt/GOP - - Presenit value of debt/exports . .. 106.3 Indebtedness 1976.86 '1986-96 1995 199e8 1997-06 (average annuial growt4h) Westem Samoa GOP -1.3 ,. 98 5.6 GNP per capita .. .. 89 4.5 Lower-middle-income group Exports of goods and servioes -2.2 .. 38.9 20~0 _________________ STRUCTURE of the ECONOMY_____ ___________ 1975 1985 1995 1996 (% of &DP) Growth rates of output and investment(% Agriculture . 40.7 39 9 1 lo Industry . .. 24.2 26~2 Manufacturing .16.3 17.9 Services -. 35.1 33.8 Private consumptionr 87.3 ,595 9 General government consumption .. 17.8 _ D '-D Imports of goods and services .. 63.9 74.6 72.7 GI ~ D (average annual growth) 11958 969 95 19 Growth rates of exports and imnports % Agriculture . .. 11.5 4.2 40T Industry . .. 26.8 14.0 30 Manufacturing . .. 39.4 16.6 2 Services . .. -0.4 2.4 2 Private consumption -0.2 10- General government consumption -5.6 ... . Gross domnestic investment -11.9 .., .91 92 93 94 95 96 Imports of goods and services -5.9 .. 3.9 5.6 - xot mot Gross national product .. 0.3 9.6 6.8 eprs 0mct Note: 1996 data are preliminary estimates. Figures in italics are tor years other than those specified. The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. Project Appraisal Document Page 63 Title: lnfrastructure Asset Management Project Country: Swnoa PRICES and GOVERNMENT FINANCE 1975 1985 1995 1996 Domestic prices Inflation (%) (% change) 20 - Consumer prices 8.8 9.1 1.0 6.9 Implicit GDP deflator .. 4.5 0.7 6.4 10 Govemment rinance o (% of GDP) -lo 92 93 94 95 93 Current revenue . . 56.7 58.9 -¶0 Current budget balance .. 27.4 28.1 - GDP def -C-CPI Overall surplus/deficit .. . -9.1 1.8 TRADE 1975 1986 1995 1996 Export and import levels (mill. US) (millions US$) I Total exports (fob) .. 9 10 100 T Other food . . 6 7 Cocoa . 0 0 75 * Manufactures .. 2 3 Total imports (cif) .. 92 99 so t Food -25 * 9 Fuel and energy .. . i Capital goods .. .. .. .._ __o_ _ _ _ Export prce index (1987=100) . 91 92 93 94 95 93 Import prce index (1987=100) .. Exports U Imports Terms of trade (1987=t100) BALANCE of PAYMENTS 1975 1985 1996 1996 (millions US$) Current account balance to GDP ratio (%) Exports of goods and services 15 27 64 . 10 Imports of goods and services 39 58 115 T Resource balance -24 -31 -51 Net income 0 -2 0 1 90 9534 9 Net current transfers 12 35 60 58 ! * Current account balance, l l before official capital transfers -12 2 10 16 Financing items (net) 12 2 -8 -10 Changes in net reserves 1 -4 -2 -6 -301 Memo: Reserves including gold (mill. US$) 6 14 55 61 Conversion rate (locaL/US$) 0.6 2.2 2.5 2.5 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1995 1996 j (millions US$) i Composition of total debt, 1995 (mill. US$) Total debt outstanding and disbursed 17 76 162 IBRD 0 0 0 0 G IDA I la 45 43 Total debt service 1 S s 45 lBRD 0 0 0 0 IDA l Composition of net resource flows Official grants 5 10 21 Official creditors 4 0 4 Prvate creditors 0 -1 0 D Foreign direct investment 0 0 3 104 Portfolio equity 0 0 0 World Bank program Commitments 4 2 0 0 A - IBRD E - Bilateral Disbursements 1 1 1 0 B - IDA D - Other multilateral F - Prvate Principal repayments 0 0 0 0 C - IMF G - Short-term Net flows 1 1 1 0 Interest payments 0 0 0 0 Net transfers 1 1 0 -1 Development Economics 8/28/97 Project Appraisal Document Page 64 Title: Infrastructure Asset Management Project Country: Samoa OUR REF: YOUR REF: Government of Samoa OFFICE OF THE PRIME MINISTER AND MINISTER OF FINANCE TeiePhones: 216a2 - 25355 - 25356 PO. Box 3107 Fax: 25357 Apia Sarnoa February 16, 1999 Mr Klaus Rohland Country Director for Samoa East Asia & the Pacific World Bank 1818 H St. N. W. Washington DC U. S. A. Dear Mr Rohland, I wish to advise that in considering the proposed Infrastructure Asset Management Project, my Govemment submits herewith for your Management's approval, the details as set out as follows. Letter Of Development Program Introduction 1. After recovering from the impact of natuwral disasters and economic slowdown in the past decade, the Govenmment of Samoa has embarked on a national strategy to strengthen the economy against external shocks, change the role of Government in the delivery and management of services and stimulate the private sector. In this context, the Government is actively pursuing a national program to improve the management and provision of its infiastructure assets. The primary goal of the Infrastructure Asset Management Program (LAMP) is for transport and coastal infrastructure assets to be managed by an effective partnership of all stakeholders to perform reliably under the prevailing rsks with the least appropriate participation of Government. In the short-term, the IAMP will address vital infastructure priorities in order to ensure continuity in the provision of safe air and surface transportation. In order to build for the longer- term objective, the IAMP will introduce and strengthen asset management practices including new strategies and national policies for the management of infrastructure in the coastal zone that preserve environmental assets. The national IAMP will help change the role of government in the delivery and management of infrastructure services in the three priority sub-sectors, namely air transport, road transport and coastal protection. 2. The IAMP is a national program established to rn over a period of 8 years from 1999 to 2007. Implementation of the program has been organized into two phases to allow the progressive accumulation of asset management skills and institutional capabilities at different rates in the three implementing agencies. The investment components focus on the airport infrastructure in the first phase, and on road and coastal infrastructure in the second phase Project Appraisal Document Page 65 Title: Infrastructure Asset Management Project Country: Samoa applying the skills and capabilities developed in the first phase, including in particular road planning and the environmental and coastal management strategies. 3. The IAMP draws primarily on extemal assistance through two sources. About 75% of the financing would be by IDA for the full 8-year period through an Adaptable Program Loan. About 4% has been confirmed through annual grant funding from the Australian Agency for Intemational Development (AusAID) for the first phase, and more may be available in the second phase. The Government would fund the remainder, comprising 18% of Phase I and up to 30% of Phase II, through budget allocation. The New Zealand Overseas Development Agency (NZODA) has expressed intention to provide some additional support through parallel grant funding. The Program Goal and Development Objective 4. The ultimate goal of the IAMP is for transport and coastal infrastructure assets to perform reliably under the prevailing risks to the satisfaction of all stakeholders, in support of national economic growth and quality of life. Three infrastructure subsectors, namely air transport, land transport and the coastal zone, have been selected as priority subsectors because of their vulnerability to natural disasters, their high costs and impact on the economy, and their potential for greater private sector participation. 5. The goal will be reached through development objectives which will: a) strengthen the management of infrastructure assets, to be information-based and performance-oriented; b) improve the the delivery and provision of infrastructure services by public and private sectors, with a change in the role of government; c) address vital infrastructure investment priorities in a timely sustainable manner; and d) optimize the economic, environmental and social sustainability of all infrastructure expenditures in support of economic growth. Phasing 6. The Program has two consecutive, related phases: IAM-1 'Meeting Vital Priorities and Strengthening Management' (years 1-3); and IAM-2 'Investing for Sustainable Growth and Protection' (years 4-8). Components 7. The program implementation is structured around four components, comprising one for physical investments and supporting services in each of the three infrastructure subsectors and one for institutional capacity building in the four implementing agencies (PWD, TCB, DLSE and SAA), i.e.: A) Airport Infrastructure, B) Road Infrastructure, C) Coastal Infrastructure, and D) Institutional Strengthening. 8. In IAM-1, the primary physical investment is required in airport infrastructure to maintain safety and operational capacity for the crucial intemational gateway (36%), and smaller investments in priority works for road infrastructure (bridge, road safety) and coastal protection (29%). Equal emphasis is placed on key policy and institutional developments, appropriate to the situation of each agency (29%). The key policy aspects comprise the development of a participatory strategy for managing coastal infrastructure (involving villages, coastal hazard zones and environmental management), and introduction of an asset management approach (with supporting information and systems). The major institutional focus is on the first stage of reform Project Appraisal Document Page 66 Title: Infrastructure Asset Management Project Country: Samoa of the delivery of public works, involving PWD and the private sector. There are smaller resources for identifying the direction of reform for Lands, Survey and Environment (DLSE), road safety actions, review of the road transport sector, and moving the SAA toward financial sustainability. 9. In IAM-2, the priority for physical investment is the road sector, where extension of the network to provide access to remote villages and to address rising capacity and safety issues on the main artery will make use of the planning and asset management tools developed in IAM-I (60%). For coastal infrastructure, the management strategy will be extended from pilot coverage to full implementation. For institutional development, the focus will be on progressive implementation (20%): i) asset information and management systems will become the primary programming and budgeting tools for PWD and part of DLSE, and the protocols will be considered by Treasury as a model for other agencies and sectors; u) PWD reform will progress to a final phase of implementation; iii) recommended reforms on road transport will be implemented; iv) DLSE will implement the first phase of a reform plan to be agreed from IAM- 1; and v) SAA progress will be monitored. Detailed Program Description lAM-1 10. With the vision of 'Meeting Vital Priorities and Improving Management', the development objectives of the first phase, lAM-1, will be: i) strengthen the management of infrastructure assets, to be information-based and performance-oriented; ii) improve the delivery and provision of infrastructure services by public and private sectors, with a change in the role of government; and iii) address vital infrastructure investmnent priorities in a timely sustainable manner. The main outputs will include: a) For airport infrastructure, timely rehabilitation and minor expansion of runway, terminal and air traffic control facilities, and urgent safety upgrading, of Faleolo Intemational Airport to satisfy safety and operational requirements for the next 15 years, b) For road infrastructure, replacement of six vulnerable obsolete bridges, implementation of road safety action plan works (including remedial treatments for accident black spots, village and area treatments, etc.), and pedest'rian traffic facilities; c) For coastal protection, updating the geographic knowledge base (including production of countrywide maps), the initiaion of a strategy for participatory management of coastal infrastructure (CIMS) in at least three districts, improve the appraisal and design of coastal protection schemes, and implement priority coastal protection investments; d) For institutional strengthening,: i) in PWD, a restructuring and business process improvement plan for the delivery of public works, strengthening of the private sector to develop greater capacity, systems for infrastructure asset management, and preparation of a national road sector plan and medium-term development program; ii) in the implementing agencies, appropriate protocols for asset management and information management; (iii) in the Ministry of Transport, improved road safety and administration of road transport; (iv) in DLSE, identification of a reform program and strengthened environmental management; Project Appraisal Document Page 67 Title: Infrastructure Asset Management Project Country: Samoa and (v) in SAA, improved financial management and business processes with progress towards substantial financial autonomy. IAM-2 11. To meet the objective of IAM-2, Investing for Sustainable Growth and Protection, the project will provide: a) Support for modest development of the road network, applying new appraisal criteria for environmental sustainability, economic priority and social impact, to meet priority needs for access and economic development in three corridors, and to address safety and congestion on the main arterial road linking Apia to the Faleolo Intemational Airport; b) Extension of the coastal infrastructure management strategy to the entire coastline, support for priority protection investments and support for the reform action plan for DLSE; c) Consolidation and continuation of progressive reform of public works delivery, including commercialization or privatization of appropriate aspects, and applying asset management to all related infrastructure assets; and possible support for further strengthening of the business management of the SAA. Expected Outcome 12. The expected outcomes of the IAM-1 Project will be: a) Increased capacity for safe and efficient handling of international air traffic, and improved financial viability of Samoa Airport Authority (SAA). b) Existing primary road system assets in economically sustainable condition and safer operation. c) Coastal hazard zones fully defined, initial experience with Coastal Infrastructure Strategy evaluated, and geographic baseline data widely available in GIS electronic format. d) Business-oriented management and private sector partnership for provision of public infrastructure established in PWD, road network development plan, road asset management system, road transport sector review, institutional reform plan for DLSE, Road Safety Action Plan second phase (RSAP-ll). 13. The expected outcomes of the IAM-2 Project, and thus the IAM Program, will be: a) Extended road access and safer roads for poverty alleviation and economic development; b) Environmentally sustainable protection and resource use in the whole coastal zone; c) The management of the environrnent, natural resources, and lands by the local residents will be conservation-oriented and the quality of the coastal zone will be enhanced; Project Appraisal Document Page 68 Title: Infrastructure Asset Management Project Country: Samoa d) Results reported by Asset management systems demonstrate that airport, road and coastal infrastructure assets are performing well and are economically and financially sustainable. Organization 14 The IAM Program is overseen by a multi-departmental steering committee for the duration of both phases. For IAM-1, in order to ensure effective management of implementation a project component manager (PCM) appointed in each implementing agency (PWD, DLSE, SAA) will in turn report to the Project Manager in the PMU. Procurement will be conducted under World Bank guidelines and national procedures, with stringent monitoring and linkage to the financial management system. Accounts transactions will be generated through the implementing agencies, processed in the PMU Project Accounting system, and processed through Treasury for payment, under streamlined procedures. In IAM-2, it is proposed that implementation will be taken over by the Director of each agency and coordinated by a Project Implementation Unit that reports to the Project Steering Committee. Criteria For Moving To The Second Phase (IAM-2) 15. The following eight key criteria are being adopted as triggers for progressing from IAM-I to IAM-2: a) Faleolo Intemational Airport operation has increased degree of compliance with ICAO standards (notably, by relocation of the control tower and fire station), and satisfies all applicable ICAO standards at December 2000. b) SAA level of cost recovery based on full costs (including economic depreciation of replaceable assets) increased from the baseline as of June 30, 1998 by a minimum of five percent increase in the level of cost recovery (Baseline value to be established during IAM-1). c) Road Sector Plan (RSP) endorsed by Cabinet and cleared by WPA. d) PWD financial and cost accounting systems fully operational. e) PWD new asset manager and policy role and functions endorsed by Cabinet and cleared by IDA and AusAID. f) DLSE reform plan endorsed by Cabinet and cleared by IDA. g) Asset inventory, topological maps, and coastal hazard information at least 60% complete and publicly available. h) Participation in the Coastal Infrastructure Management (CIM) strategy, comprises: a) at least three districts with CIM Plans being developed after effective community consultation, education and awareness-raising; and b) effective implementation in at least one of the Districts. 16 The progress on these and other performance indicators will be measured and reported in the first instance by the PCM, monitored and evaluated by the IAMP Project Manager (1PM) and Steering Committee, and reported in the quarterly Project Progress reports. Compliance with the trigger criteria will be assessed by the three financing agencies (GoS/Treasury, IDA, AusAID), Project Appraisal Document Page 69 Title: Infrastructure Asset Management Project Country: Samoa based on an independent evaluation report and other factors, and the final design of the second phase will be adjusted accordingly. Indicative Program Financing Data (US$ million equivalent) Pro ect IDA AusAID GoS Total IAM-1 14.2 1.3 3.3 18.8 1AM-2 9.8 0.7* 3.7 14.2 IAM Program 24.0 2.0 7.0 33.0 * Tentative indication of AusAID contribution Estimated Implementation Period IAM-1 February 1999 - December 2002 IAM-2 July 2002 - June 2006 The Bank's favourable consideration of our program under the IAMP will be appreciated. Sincerely, (Tuilaepa Sailele Malielegaoi) PRIME MINISTER AND MINISTER OF FINANCE Project Appraisal Document Page 70 Title: Infrastructure Asset Management Project Country: Samoa Annex 12: Environmental Analysis: Executive Summary Background 1. An environmental analysis (EA) of the issues and mitigating actions regarding the proposed Infrastructure Asset Management Program (IAMP) was conducted. The project will be financed for the Government of Samoa (GoS) by the International Development Association (IDA) and AusAID. The EA was one of the project preparation requirements of the World Bank, as set out in Operational Directive (OD) 4.01 and the primary GoS environmental legislation, the Lands, Surveys and Environment Act, 1989. 2. The analysis was undertaken by a combined government and consultant team in July - August 1998 and finalized, after GoS review and feedback, in November 1998. 3. The purpose of the study was to: * Identify and assess the environmental issues associated with the project; * Indicate any adverse environmental impacts of the proposed activities; and to * Evaluate the need for further in-depth studies, reviews and environmental mitigation plans under the project. Project and Program Highlights 4. Environmental Management: The key elements of environmental management that are considered to be important under the project are: a) Application of site specific environmental assessment procedures to each sub-project. b) The development and application of Codes of Environmental Practice (COEP) that will set minimum standards and describe good environmental management practice for routine design, construction and maintenance activities. c) Training, education and mentor support to be provided to sub-project proponents (e.g. PWD and SAA), private sector consultants, contractors and DLSE to assist them carry out their respective roles in environmental management. d) Recognizing that the coastal zone is an environmentally sensitive area in Samoa, the project incorporates: * the preparation of Coastal Hazard Zone Maps that will identify areas vulnerable, and the degree of sensitivity, to the effects of coastal storm hazards; and * the development of a Coastal Infrastructure Management Strategy (CIMS) leading to the development and application of location specific Coastal Infrastructure Management Plans (CIMPs) supported by extensive government, public and village community consultation, and public awareness raising and education programs. e) Undertaking sub-project specific monitoring to ensure compliance with any conditions of consent arising from the environmental assessment procedures, and more general environmental monitoring to develop baseline information and changes to the baseline in the long term. 5. Procedures for the implementation of the EIA process are described later in this executive summary and in more detail in section 3.1 (see full report). The procedures are practicable and customized to the needs of different types of sub-projects, ranging from those with no or negligible environmental impacts that will be adequately covered Project Appraisal Document Page 71 Title: Infrastructure Asset Management Project Country: Samoa by the COEP, to those involving significant potential impacts requiring formal EIA assessment and independent review. 6. It is recommended that the draft EIA Regulation procedures be adopted for all works under IAM- 1 except that the provisions relating to the Environment Board, Ministerial consents and Penalties should not apply. For the purposes of the project, it is recommended that Ministerial Consents under the draft EIA Regulations be issued by the Director DLSE, and that matters intended to be handled by the Environment Board, and top level enforcement of the regulations, be handled by the IAMP Steering Committee. 7. Recognizing that DLSE and proponents such as PWD will need time to develop the skills and resources necessary to effectively meet the EIA requirements, it is recommended that: a) DLSE and all government sector proponents (e.g. PWD, SAA) will meet the full requirements of the draft EIA Regulations (except as noted above) for all works under the project by the end of the second year of LAM- 1; b) DLSE and all government sector proponents involved will meet the full requirements of the draft EIA Regulations (except as noted above) for all works under their respective departmental budgets by the end of the third year of lAM- 1; c) Fulfillment of (i) and (ii) above be conditions for the continuation of the works under IAM-2. 8. Codes of Environmental Practice (COEP): In order to improve the environmental management of all publicly- financed works, in the planning, design and implementation stages, a set of codes of good practice (COEP) for civil works and services is being introduced during project preparation. Since the environmental category rating of B depends on these standard operating procedures being in place for the Project works, the COEP should be introduced and implemented before the first phase works begin - thus the introduction of the COEP should be made a condition of effectiveness. 9. The COEP needs to be consistent with the draft EIA Regulations. The COEP need to be presented in a manner that is not too prescriptive so that professional judgement can be applied to site specific situations. 10. Specific Sub-project EIA: The COEP is the general basis for identifying, designing and constructing developments within certain terrain's or environmental settings, and regarding specific activities. Some works will require an Environmental Mitigation Plan (EMP) to take cognizance of the particular values or sensitivities of the setting in which the works are proposed where these are not adequately covered by the COEP. The preparation of such plans is the responsibility of the proponent for each component of work should be an integral part of the normal design process. The effectiveness of any environmental impact 3mitigation measures will be independently evaluated and tested in accordance with the draft EIA Regulation procedures. 11. Coastal Infrastructure Management Strategy (CIMS): Developed and implemented under the Project, the CIMS will include appropriate procedures for preservation of environmental assets, integrated and environmentally sustainable planning and management of infrastructure assets, and procedures for consultation and local participation, all embedded in an appropriate institutional framework. The development and implementation of the CIMS and associated Coastal Infrastructure Management Plans (CIMPs) will be supported by public and village sector consultation, education and awareness raising. 12. Knowledge Base: The accessibility of environmental information will be enhanced through the installation of an GIS-based information system. Coastal Hazard Zone surveys will be completed covering the entire coastline. These surveys will be supported with aerial photography, preparation of up-to-date topographical maps also available in GIS form that can be adapted to a variety of uses by a number of government departments. Guidelines will be prepared on good practice for the selection, design and construction of coastal defense (hard and soft), as well as a summary of EIA procedures, use of the COEP, economic evaluation and other procedures. These guidelines will refer to, and sit along side, other internationally recognized or locally established good practice manuals (e.g. Project Appraisal Document Page 72 Title: Infrastructure Asset Management Project Country: Samoa "Environmental Impact Assessment in Samoa: A Practice Guide for DEC Officers"). Implementation of the guidelines will be supported by training and information seminars delivered to project staff, private sector consultants and contractors. Environmental Description 13. Environmental assessment of sub-projects is proposed to be undertaken in accordance with the procedures set out in the draft EIA Regulations. These regulations have been developed as an output from the Cabinet approved National Environment and Development Management Strategies (NEMS), but have not yet been officially endorsed. 14. The environmental assessment procedures, comprising a cascaded screening of potential impacts, are summarized in the figure below. Three types of sub-project are visualized for the purposes of environmental assessment, each requiring a different level of investigation, reporting and independent review reflecting the significance of the potential impacts, as follows: a) Sub-projects that have no, or low, adverse environmental impacts may be waived from the further requirements of the draft EIA Regulations. Ordinarily the COEP will be adequate to cover the environmental management requirements on such projects. b) All other sub-projects will be subject to environmental assessment. This commences with a Preliminary Environmental Assessment Report (PEAR) that is prepared by the proponent. The project may proceed if, after review, the Director DLSE concludes there are will be no significant adverse environmental impacts. c) Projects for which there are potential significant adverse environmental impacts will be subject to a full EIA process. The EIA, prepared by the proponent, must consider altematives and mitigation measures. The EIA is reviewed by DEC. Affected communities must be consulted and there may be formal public meetings. DEC may request further information and, if approving the works to proceed, may set special conditions that must be met by the proponent. These procedures are presented diagrammatically in the following figure. 15. The draft EIA Regulations require proponents to consult with and keep informned any local communities affected by the sub-projects. The draft EIA Regulations emphasis early communication between the proponent and DEC to ensure that procedures are streamlined. The Regulations also require DEC to prepare and publish guidelines on EIA procedures to proponents. 16. Because the draft EIA Regulations are not yet enacted by Cabinet, a number of features in the Regulations cannot realistically be adopted (e.g. Ministerial approvals, functions of the Environment Board, and application of penalties). For the purposes of the IAM Project, suitable altemative delegations for these aspects have been suggested that keep the actions within the IAMP team. Project Appraisal Document Page 73 Title: Infrastructure Asset Management Project Country: Samoa Long Range Proposed Works Plan v Annual Proposed Works Plan & Rough Order Budgeting v Preliminary Design & Drawings Sub-projects that have no, or low but acceptable, environmental impacts DEC grants a Waiver Prepare Preliminary Environmental Assessment Report from further EIA (PEAR). requirements? DEC Reviews PEAR Sub-projects that have significant potential environment impacts giv approv Prepare detailed EIA report [P cPublic Consultation Public Hearing/DLSE Review Fl t fl | DLSE gives approval? Works proceed under Works proceed under COEP Works proceed under COEP provisions of COEP provisions, some special provisions, some special conditions or with minor compliance conditions may apply with design modifications may be required monitoring compliance monitoring to mitigate environmental effects. Compliance monitoring required. Project Appraisal Document Page 74 Title: Infrastructure Asset Management Project Country: Samoa 17. The following table summarizes the major project components that have environmental implications and assigns category ratings consistent with Operational Directive 4.01. wom *Co#"OneattA &subAE vr X ial lie dta ' igp