Turkey - Istanbul Municipal Infrastructure Project

Document o f The World Bank FOR OFFICIAL USEONLY ReportNo: 38764-TR PROJECTAPPRAISAL DOCUMENT ON A PROPOSEDLOAN INTHEAMOUNT OFUS$322.15MILLION TO THE ISTANBUL METROPOLITANMUNICIPALITY WITH THE GUARANTEE OF THE REPUBLIC OF TURKEY FORAN ISTANBUL MUNICIPAL INFRASTRUCTURE PROJECT JUNE 7,2007 SustainableDevelopmentDepartment Turkey CountryUnit Europeand CentralAsia Region This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective June 7,2007) Currency Unit = New Turkish Lira YTL 1.00 = US$0.71 US$l.OO = YTL 1.40 FISCAL YEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS M O M Istanbul Disaster ManagementCenter AYM Istanbul Province Disaster ManagementCenter CAS Country Assistance Strategy DA DesignatedAccount DM District Municipality EA Environmental Assessment ECA Europe and Central Asia Region EDCD General Directorate of Civil Defense EIA Environmental Impact Assessment EIB European Investment Bank EMM EarthquakeMitigation Measure EMP EnvironmentalManagementPlan EU EuropeanUnion F I Financial Intermediary FMR Financial MonitoringReport FMS Financial ManagementSpecialist FOD Financial Operations Department GDP Gross Domestic Product GIS GeographicInformation System IAD Internal Audit Department ICB International Competitive Bidding ICR Implementation Completion and Results IER IndependentEvaluation Report IMIP Istanbul Municipal Infrastructure Project IMM Istanbul Metropolitan Municipality IPCU Istanbul Project Coordination Unit ISMEP Istanbul Seismic MitigationProject ISPA Istanbul Special Provincial Administration ISTAC Istanbul Solid Waste ManagementUtility IUFR Interim un-audited financial reports JBIC JapanBank for InternationalCooperation JICA JapanInternational Cooperation Agency M&E Monitoring and Evaluation MAG Neighborhood Disaster Support MTR Mid-Term Review NCB National Competitive Bidding NGO Non-governmental organization OECD Organization for Economic Co-operation and Development PES Project financial statement PFMC Public Financial Managementand Control SDC Swiss Agency for Development and Cooperation SIL Specific Investment Loan SOE Statement of Expenditure SPO State PlanningOrganization TCA Turkish Court of Accounts TEMAD Turkey Emergency ManagementGeneral Directorate Vice President: Shigeo Katsu Country ManagedDirector: Ulrich Zachau Sector Manager: Sumter Lee Travers Task Team Leader: Seema Manghee  TURKEY FOR OFFICIAL USEONLY ISTANBULMUNICIPAL INFRASTRUCTURE PROJECT PROJECT APPRAISAL DOCUMENT EUROPE AND CENTRAL ASIA ECSSD Date: June 7, 2007 Team Leader: Seema Manghee Country Director: UlrichZachau Sectors: Solid waste management (45%); Sector ManagedDirector: Sumter Lee Travers General transportation sector (20%); General water, sanitation and flood protection sector (20%); Sub-national government administration (15%) Themes: Other urban development (P) Project ID: P100383 Environmentalscreening category: Financial Intermediary Assessment Lending Instrument: Specific InvestmentLoan Project FinancingData [XI Loan [ 3 Credit [ 3 Grant [ 3 Guarantee [ ] Other: Source Local Foreign Total Borrower 14.15 0.00 14.15 InternationalBank for Reconstructionand 216.00 106.15 322.15 Development Total: 230.15 106.15 336.30 Borrower: Istanbul Metropolitan Municipality Turkey ResponsibleAgency: Financial and Technical Department Metropolitan Municipality of Istanbul Istanbul Turkey tibet.tuncel@ibb.gov. tr This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not be otherwise disclosed without World Bank authorization.  FY 2008 2009 2010 2011 2012 Annual 42.00 85.00 100.00 60.00 35.15 Cumulative 42.00 127.00 227.00 287.00 322.15 1Environmentaland Financial Management Covenants.  CONTENTS Page A. STRATEGIC CONTEXT AND RATIONALE ........................................................ 1 1. Country and sector issues........................................................................................... 1 2. Rationale for Bank involvement ................................................................................ 2 3 . Higher level objectives to which the project contributes........................................... 3 B. PROJECT DESCRIPTION ........................................................................................ 3 1. Lendinginstrument.................................................................................................... 3 2. Program objective and Phases.................................................................................... 3 3. Project development objective and key indicators..................................................... 3 4. Project components ................................................................................................... -4 5. Lessons learned and reflected inthe Project design................................................... 5 6. Alternatives considered and reasons for rejection ..................................................... 5 C. IMPLEMENTATION ................................................................................................. 6 1. Partnership arrangements (if applicable) ................................................................... 6 2. Implementation.......................................................................................................... 6 3 . Monitoring and evaluation (M&E) o f outcomeshesults ............................................ 7 4. Sustainability.............................................................................................................. 7 5. Critical risks and possible controversial aspects........................................................ 8 6. Loan Conditions and Covenants ............................................................................... -9 D. APPRAISAL SUMMARY ........................................................................................... 9 1. Economic and financial analyses ............................................................................... 9 2. Technical .................................................................................................................. 11 3. Fiduciary .................................................................................................................. 12 4. Social....................................................................... :................................................ 12 5. Environment............................................................................................................. 14 6. Safeguard policies .................................................................................................... 16 7. Policy Exceptions and Readiness............................................................................. 17 Annex 1: Country and Sector or ProgramBackground ................................................ 18 Annex 2: RelatedProjectsFinancedby the Bank and/or other Agencies .................... 27  Annex 3: Results Frameworkand Monitoring ................................................................ 28 Annex 4: Detailed Project Description ............................................................................. 31 Annex 5: Project Costs ....................................................................................................... 35 Annex 6: Implementation Arrangements ........................................................................ 36 Annex 7: Financial Management and DisbursementArrangements ............................ 39 Annex 8: Procurement Arrangements ............................................................................. 48 Annex 9: Economic and Financial Analysis .................................................................... 55 Annex 10: Safeguard Policy Issues ................................................................................... 63 Annex 11: Project Preparation and Supervision ............................................................ 99 Annex 12: Documents inthe Project File ....................................................................... 100 Annex 13: Statement of Loans and Credits ................................................................... 101 Annex 14: Country at a Glance ...................................................................................... 104 Annex 15: Map ................................................................................................................. 107  A. STRATEGIC CONTEXT AND RATIONALE 1. Country and sector issues 1. Istanbul, whose 2006 population i s estimated at about 12.5 million, i s the largest city in Turkey and its main center o f industrial, financial, service and other economic activities. Administratively, it i s both a metropolitanmunicipality and a State province and among the provinces it is the one that makes by far the single largest contribution (23%) to Turkey's Gross Domestic Product (GDP). Having been, over the span o f almost two millennia, the successive capital o f the Roman, Byzantine, and Ottoman empires it also holds a treasure o f uniquehistorical and cultural assets o f World Heritage importance. 2. An extremely rapid six-fold population increase over the past three decades - largely as a result o f the attraction that Istanbul's expanding labor market exerted on Turkey's internal migration - has severely taxed the capacity o f the Istanbul Metropolitan Municipality (IMM) to deal with urban development problems. Decades o f extremely rapid urban growth have adversely affected the living conditions o f Istanbul's inhabitants and exacted a high toll from the city's economy and natural environment. Demand for basic services such as water and sewerage, electricity and natural gas, has grown explosively. New and often illegal settlements and industrial plants have in many cases expanded into environmentally fragile areas that should have been protected as natural resources. Heavy traffic congestion and significant air pollution are major issues in many areas. Inefficiencies in collection and safe disposal o f solid waste, including industrial waste, are turning into potential public health hazards. Illegal discharges by ships, port activities and industries are at the root o f growing pollution o f the waters o f the Bosporus, the Black Sea and the Sea o f Marmara. 3. While Istanbul's current problems are already difficult to deal with, even more daunting are the challenges that lie ahead. According to some forecasts, the city may double in size over the next 25 years and reach a population o f 20-25 million by the year 2030. Accommodating such a growth, while maintaining and/or improving the living conditions o f the city's inhabitants, will require a radical departure from past practices o f urban management and coordination and control o f urban development. It will require, inter alia, the beginning o f systematic preparation o f long-term investment plans for all essential municipal services. 4. Istanbul's problems are exacerbated by its location inone o f the world's most active earthquake zones adjacent to the North Anatolian fault line, a fault comparable to California's San Andreas Fault. Strong earthquakes are a periodic occurrence and throughout recorded history have struck the city repeatedly, causing severe damage and loss o f life, As demonstrated by the 1999 Marmara earthquake, whose epicenter was only 60 km from Istanbul, a large proportion o f Turkey's local infrastructure and real estate lack the necessary structural resistance and are highly vulnerable to earthquakes. Recent studies indicate that the retrofitting of existing structures necessary to bring the earthquake preparedness o f Istanbul to acceptable levels, together with other measures required for adequate disaster mitigation, could cost up to US$100 billion intoday's prices.  5. As a State province, Istanbul is administered by a Governor who acts as the representative o f the State Government. As a municipality Istanbul is administered through a two-tier local government system that consists o f the Istanbul Metropolitan Municipality (IMM) at the top level and 32 District Municipalities (DMs) at the lower level. IMM is responsible for management of all citywide municipal services and infrastructure whereas DMs are primarily in charge o f local matters. Virtually all municipal services provided by IMM are delivered through IMM-owned commercial companies such as, for instance, the Istanbul Solid Waste Utility (ISTAC), which i s responsible for solid waste disposal. Like all municipalities in Turkey, IMM has limited decision-making authority in both revenue generation and expenditure management. However, within the limits set by national legislation IMM has managed to become financially viable and it is, at this point, the only one o f 16 metropolitan municipalities in Turkey with a significant borrowing capacity and creditworthiness for external borrowing recognized by the Government. 6. The Metropolitan Municipality Law passed on July 23, 2004, expanded the geographical area o f IMM about three time from 1,830 km2to 5,349 km2.The Law also requiredIMMto prepare both a Metropolitan Strategic Development Plan (Strategic Plan) and an Environmental Plan to reflect the demands o f the expanded area, identify the corresponding investment needs, and explore possible sources o f financing. The Strategic and Environmental Plans were completed in July, 2006 and have been approved by the Municipal Council o f IMM. 7. To address its multiple needs and prepare for future challenges, IMMhas requested the World Bank to assist it in the financing of a first investment program, the proposed Istanbul Municipal Infrastructure Project (IMIP). The program, IMIP, which could be followed by other operations in the future, would focus in particular on priority investmentsin the area o f environmental management and help increase the preparedness o f Istanbul for possible futurenatural disasters, especially earthquakes. 2. Rationale for Bank involvement 8. On November 6, 2003, the World Bank's Board o f Directors discussed the Country Assistance Strategy (CAS) for Turkey (Report No. 26756 TU) which pursues four major objectives: (i)supporting sound macroeconomic management and governance; (ii) promoting equitable human and social development; (iii)creating a more attractive business climate; and (iv) strengthening environmental management and disaster preparedness and mitigation capacity. The CAS Progress Report for Turkey (Report No. 33995 TU, dated November 8, 2005) was distributed to the Executive Directors on November 30,2005. 9. The proposed IMIP supports these CAS objectives by focusing on: (i)critical environmental problems by upgrading solid waste disposal facilities and safe disposal o f waste; and (ii)strengthening disaster mitigation by improving key infrastructure and infrastructure services whose continuing operation will be critical in the event o f an earthquake. 2  10. IMIP follows up on the Municipal Services Project (P081880), approved on May 27, 2005, which supports sustainable infrastructure investments in selected medium- and small-size municipalities. IMIP will complement the Istanbul Seismic Risk Mitigation Project - (ISMEP) which was also approved on May 27, 2005, and focuses on earthquake retrofitting measures on areas that are under the responsibility of Istanbul Province while IMIP will focus on areas that are under the responsibility o f IMM. 3. Higher levelobjectivesto which the project contributes 11. IMIP i s fully consistent with Turkey's Ninth National Development Plan (2007- 201l), which calls for more strategic policy formulation and stronger implementation capacity in public administration. The Plan states that comprehensive reforms started in public administration and public financial management should focus on strengthening public confidence in administration, ensuring financial efficiency and the provision of effective municipal services by local governments. B. PROJECT DESCRIPTION 1. Lendinginstrument 12. The proposed project will be financed through a Specific Investment Loan (SIL) for which IMM will be the Borrower under a sovereign guarantee provided by the Republic o f Turkey. The loan will be a Libor-based USD single currency variable spread loanwith a maturity o f 15 years, including 5 year grace period. 2. Program objective and Phases Not applicable. 3. Project developmentobjectiveand key indicators 13. The objectives o f the proposed project are to assist the Istanbul Metropolitan Municipality in: (i) improving its solid waste management; and (ii) improving its capacity to mitigate earthquakes by retrofitting key facilities and infrastructure and upgrading the institutions and their procedures to helpthemrespond to emergencies. The corresponding indicators include: o The number o f closed illegal waste dumpingsites; o Preparation o f annual Business Plans for solid waste services; o Preparation o f a Municipal Infrastructure Risk Mitigation Plan; o Retrofitting o f investments; and o The implementationo f a Pilot UrbanTransformation Program. 3  4. Project components The IMIP would consist ofthe following four components: [mprovements inenvironmental management: a. Closure of existing unauthorized disposal sites for municipal solid waste (landfills) and rehabilitationo f creeks; b. Preparation o f annual Business Plans that include operating performance, investmentprogramand financial targets and results; and c. Financing waste collection equipment. Strengthening o f municipal services and infrastructure: a. Preparinga detailed risk assessment for all major municipal systems; b. Preparing a Municipal InfrastructureRisk Mitigation Plan; c. Retrofitting o f municipal infrastructure (under-passes, pipelines, viaducts etc.); and d. Providing emergency fire department equipment. Pilot urban transformation program: a. Pilot urbantransformation feasibility studies; and b. Retrofitting and constructiono f buildings, fire stations and emergency housing associated with urban transformation inthe most seismic vulnerable areas. Project Management and audits: a. Design studies, surveys and technical training for pro]ect implementation; and b. External audits of project accounts. The project cost and financing plan shown in Table 1 is based on the Country Financing Parameters adopted on January, 2005 which allow for up to 100% financing o f goods and works, local services and contracts for foreign consultants, including taxes and duties. Table 1. EstimatedProject Costs and Financing (in US$million dollar equivalent) Total Cost World Bank Component A: Improvement o f Environmental Management 96.0 96.0 Component B: Strengthening o f Municipal Services and Infrastructure 126.0 126.0 Component C: Pilot Urban Transformation Program 100.0 100.0 Component D: Project Management and Audits 14.15 0.15 Total Project Cost 336.15 322.15 4  5. Lessons learned and reflected in the Project design 15. Implementation. World Bank experience in Turkey and worldwide has shown that municipal projects implemented directly by the beneficiary municipality or utility often have more implementation problems than projects implemented by free-standing project implementation units having higher paid staff. However, for a municipality, utility or institution borrowing from the Bank, the most critical institutional long-term development objective i s to strengthen the capacity o f its staff and improve the performance o f its operations, a goal that cannot be achieved through the use o f free standing project implementation units. For this reason, IMMproposed, and the Bank concurred, to set up a project management team within IMM and to manage IMIP, to the maximum extent feasible, exclusively through IMMstaff. 16. Earthquake Risk of Istanbul. Given the location o f Istanbul and the existing very high earthquake risk potential, it is essential for all investments to be designed to ensure the high level of seismic safety. Minor earthquakes are frequent; the probabilities of a major earthquake affecting Istanbul inthe next 10-30 years are estimated at about 30-60%, respectively. 17. Project Costs. Scope, costs and duration o f retrofitting buildings and infrastructure are often difficult to determine ex-ante in a reliable fashion. Such operations are, therefore, inevitably subject to discovery o f needs for additional works during execution and ensuingrisks o f cost overruns and implementation delays. For this reason, significant flexibility must be built into the implementation arrangements and procedures as well as in the legal agreements. This would provide the project management team from the outset with the tools necessary to deal expeditiously and effectively with unexpected circumstances and needs. 6. Alternatives considered and reasons for rejection 18. Multi sectoral approach. An option that was considered but not selected consisted o f a project that would have focused on addressing the needs o f one single infrastructure sector. This would have allowed tackling sector specific issues in a more in-depthfashion in terms of investmentpriorities, institutional framework and policies. However, it would not have squared with the specific objective o f this project, which i s to provide IMMwith a broader capability to address the area o f environmental protection and public health and, above all, to protect the 12.5 million inhabitants o f the city from the effects o f a likely major future earthquake. 19. Policy-based operation. Another option that was considered but not selected consisted o f the preparation o f a policy-based operation that would have allowed IMM to receive resources equivalent to the loan amount in the form o f budgetary support against the implementation of an agreed program of institutional and policy reforms. Eventhough it could have made it easier for IMMto implement an investment program scattered among a number o f its service companies, this option was not retained primarily because, in Turkey, the decision-making authority o f local governments in matters o f local fiscal 5  policies and urban management i s still extremely limited. Hence, this would not have allowed identification o f a meaningful reform program. C. IMPLEMENTATION 1. Partnershiparrangements (if applicable) 20. At this time, there is no co-financing of the IMIP with other International Financial Intermediaries (IFIs), international agencies, or bilateral donors at this stage. However, discussions are well advanced with the OPEC Fund on potential co-financing that will likely materialize during project implementation for the environmental management component. Close coordination and information sharing will be sought during project implementation with other international bodies that also assist Turkish authorities in improving environmental management, infrastructure natural disaster preparedness and municipal programs. Inparticular, close coordination i s underway with Japan International Cooperation Agency (JICA) and Japan Bank for International Cooperation (JBIC), which are implementing infrastructure programs and providing technical assistance in strengthening the disaster response capacity o f municipal services. Coordination between IMM and European Union (EU) already exists to ensure that all project proposals are consistent with EU policies and regulations as part o f the Acquis Communautaire. Discussions are ongoing with the European Investment Bank (EIB) on broader issues related to municipal management and related investment priorities. 2. Implementation 21. IMIP will be implemented from 2007 - 2012 under the direct responsibility o f IMM. The implementationofthe project bythe Borrower will be onthe basis ofthe use of existing municipal staff according to their relative functions, and there will be no separate project implementation unit. The Financial Department will coordinate project implementation, especially in regard to reporting and communicating with the Bank, but various other technical specialists will provide support according to their relevant functions. The Financial Department will be responsible for procurement, disbursement and financial management, accounting and reporting. Implementation will be undertaken by existing qualified staff from the Finance Department itself as well as technical experts from relevant other departments o f IMMand, on an as needed basis, representatives o f the beneficiary municipal service companies. Technical supervision o f project implementation and monitoring, evaluation o f project results, and checking o f engineering designs to ensure that they meet project criteria will be undertaken by the technical staff from IMM. Possible needs for specific skills and qualifications that might not be available in IMMwill be satisfied through the temporary employment o f local consultants and/or the procurement o f international expertise to be financed under the project. 22. This will be the first Bank project to be undertaken by IMM staff that will be new to the Bank project implementation procedures, but they should benefit from the experience o f the ongoing ISMEP project coordinated by the Istanbul Project Coordination Unit (IPCU) located within the Istanbul Special Provincial Administration (ISPA). The 6  IPCU team was already consulted during the proposed project preparation and expressed its willingness to assist IMM on any matter related to the implementation. Such cooperation i s o f key importance, particularly, for efficiency o f efforts in the area o f emergency preparedness and management, for both IMM and the provincial government. A description o f overall implementation arrangements is contained in Annex 6. Specifics o f the arrangements for procurement and financial management are found in Annexes 7 and 8. 3. Monitoringand evaluation (M&E) of outcomes/results 23. The Financial Department will monitor IMIP implementation progress and results against the agreed outcomes and performance indicators specified in Annex 3. To establish the framework for a reliable and objective system o f Monitoring and Evaluation (M&E), baseline data and information on the current conditions of solid waste collection and disposal and maritime pollution will be collected prior to the start o f project implementation. 24. The monitoring indicators will be reflected in quarterly and annual progress reports to be prepared by the Financial Department. These progress reports will cover performance and impact indicators, progress in the implementation o f works and/or delivery o f goods and services, training and studies, as well as the use o f project resources under the project. The report for the fourth quarter o f each year will be prepared in the form o f an annual report that will summarize the entirety o f the results achieved during the year and provide a work plan and budget for the following year. 25. A Mid-Term Review (MTR) o f the project will be conducted no later than during the spring o f 2009, or two years after the start up o f project implementation. The Financial Department would prepare a detailed mid-term report to serve as the basis for the MTR. The MTR will review the actual implementation performance o f each o f the project components and identify the reasons for possible delays and poorer than anticipated results, ifany. Any required changes in the investment programs or reallocation o f loan proceeds would be agreed on at that time. The World Bank would conduct regular supervision missions about once every three months, especially during the first two years o f IMIP implementation. The Financial Department will also help prepare the IMM contribution to the World Bank's Implementation Completion and Results (ICR) upon completion o f the project. 4. Sustainability 26. IMIP investments for environmental management improvement will be transferred upon completion to the municipal utility operating the respective services. The utility is financially viable and have adequate technical and financial resources to efficiently operate the assets created by IMIP. The earthquake retrofitting o f infrastructure is a one-time investment and the priorities identified by the Municipal Infrastructure Risk Mitigation Planwill be subject to a risk audit and cost benefit analysis. 7  5. Critical risks and possible controversial aspects IMMas a first time Bank borrower Risk: The IMIP will be the first project implementedby IMM with World Bank financing. IMM lacks, for the time being, familiarity with World Bank requirements and procedures. This creates a risk for processing delays in procurement and disbursement. Mitigation: IMM staff has already started training in World Bank procurement, financial management, environmental safeguards and overall Bank operations. In addition, IMIP includes a substantial amount o f training for IMM staff related to technical, financial, legal and administrative project management requirementsin accordance with World Bank procedures. An additional mitigation factor i s the fact that key World Bank supervision staff i s based in Turkey and can respond readily to requests or inquiries from IMM. ISMEP staff is also located in Turkey can assist in overall implementation issues and more importantly, further strengthen coordination and information sharing between IMM and the Provincial level. Moreover, the team may benefit from the experience and knowledge o f the well established IPCU under the ISMEP project. This cooperation has been ascertained during project preparation and will be further strongly encouraged at implementation stage. Debtservicing capacity of IMM Risk: At this point, IMM has a well established borrowing capacity and its creditworthiness i s recognized by the Government as demonstrated by the provision o f a sovereign guarantee for IMIP. However, the current favorable conditions cannot preclude the possible deterioration o f the financial position o f IMM in the medium or longer term because of unforeseeable changes in the macro-economic performance o f Turkey or adverse developments in the country's external environment, both o f which could create a risk o f IMMdefaulting on its debt service obligations. Mitigation: The loan to IMMi s guaranteed by the Republic o f Turkey. IMM has only limited financial autonomy and depends for its revenue to a large and decisive extent on fiscal transfers from the Government. Increasing the financial autonomy of IMM, and giving it the means to be better exploit the local fiscal resource potential and become financially more self-reliant, could help mitigate the risk. However, this would entail far-reaching reforms in the existing framework o f local government finance in Turkey which are outside the scope o f the project. 8  Possible Controversial Aspects There are no controversial aspects associated with the project. 6. LoanConditionsand Covenants Environmental Covenant: (a) The Environmental Category o f the project i s a Financial Intermediary (FI). To ensure that the project complies with all World Bank environmental safeguards, all IMIP sub-projects would be subjected to an environmental review process by IMM as described in the Environment Framework. The Borrower has to carry out the project activities inaccordance with the EMP. Financial Management Covenants: IMM will maintain a financial management system acceptable to the Bank. The project financial statements will be audited by independent auditors acceptable to the Bank and on terms o f reference acceptable to the Bank. The annual audited financial statements o f the project will be provided to the Bank within six months o f the end o f each fiscal year. IMM will maintain records and will ensure appropriate accounting for the funds provided. Financial statements for the project will be prepared by IMM. The interim un-audited financial reports (IUFR), also referred to as the Financial Monitoring Reports (FMRs), will be prepared on a quarterly basis and will be submittedto the Bank no later than 45 days after the end o fthe quarter. APPRAISAL SUMMARY Economicand financialanalyses The economic analysis undertaken for this project and anticipated for specific investments that remain to be defined used the approach o f identifying the most economically efficient means o f achieving a predetermined objective. That was done by considering alternative designs to meet each project objective and selecting the particular option for which the sum of the discounted investment, rehabilitation, and operations and maintenance costs i s the lowest. This stage has been undertaken for all those components that are already quantified. Least cost analysis will similarly be undertaken for all those alternative options that have not yet been identified in order to ensure that the project meets each objective at the least economic cost. In the case of the environmental management component, Appendix A contains a detailed description o f the alternatives and selection criteria. 28. Although the project relies on the efficiency o f investments, the issue o f economic benefits was not ignored, For example, in the Environmental Management Component, 9  benefits will include an end to or a high level o f control o f the water, land, and air pollution associated with wild dumps. However, full valuation o f benefits would require hydrologic mapping that could not be economically undertaken during project preparation, given that both Turkish law and accepted international practice call for control o f solid waste. The value o f benefits comes from a small proportion o f those that can easily be measured and a large proportion for which only qualitative evaluation i s feasible. The mix of benefits from a national program that fully complies with EU Acquis requirements i s documented in the report The Benefits o f Compliance with the Environmental Acquis for the Candidate Countries'. Inthat report, the annual benefits to Turkey of full compliance with EUenvironmental standards are calculated to be equivalent to Euro 50 and Euro 233 per capita as the low and high values, respectively. The waste sector would account for around 2.5% and 12.4% o f the low and high values (Euro 1.2 and Euro 29 per capita), respectively. The investmentsunder this project will help Turkey move toward that goal. 29. Components B and C that are designed to meet the second project objective, Le. to strengthen the municipal services o f IMMand increase its preparedness for expected large earthquakes by retrofitting key municipal facilities infrastructure and providing the emergency equipment needed to respond to a major natural disaster. The benefits o f the earthquake mitigation measures (EMM) are to avoid or mitigate the costs o f earthquake. Such costs comprise (i)direct earthquake damage; (ii)disruption o f economic activities; and (iii) the loss of life and the suffering that earthquakes bring. The investments under this project comprise a part of a broad, long term program to enhance the protection of the citizens o f Istanbul from the effects o f an earthquake. Studies have been completed that assess the potential damage, by type o f impact, under different earthquake scenarios. Those studies also suggest mitigation measures, from which the current investmentshave beendrawn. Effectively reducing damage and economic disruption has a very high value - upto about US$1.8 billiononce a full protectionprogram is implemented. Reduced loss of life and injury would, o f course, substantially raise these values. Annex 9 discusses existing studies from which this investment program has been drawn. FinancialAnalysis 30. A summary o f IMM's revenue and expenditure accounts for 2003-2005 and projections for 2006-2008 i s shown in Annex 9. Budgetary resources o f IMMare derived from three different sources: tax revenue, non- tax revenue, and borrowing. 3 1. In2005, revenues o f IMMwere YTL 2,559 million (US$1,949 million equivalent at the prevailing exchange rate) and expenditures YTL 2,712 million (US$ 2,009 million), a 3% deficit for that year. Tax revenue representedabout 78% o f total revenue, non-tax revenue about 17%, and the remaining 5% borrowing from the domestic capital market. About 98% o f the tax revenue was provided by IMM's share o f Government taxes in accordance with current local finance legislation and the remaining 2% was derived from municipal own-source taxes. Between 2003 and 2005, IMM'stotal revenue increased by about 142%. This growth was caused by a rapid increase inthe amount o f Government tax ' Ecotec etal, 2001, downloadable at http://ec.europa.eu/environment/enlarg/pdf~ene~t~long.pdf 10  transfers, whereas IMM's own-source revenue stagnated. As a result the latter's contribution to total revenue fell from 41% in2003 to 19% in 2005. 32. In 2005, about 25% of IMM's expenditures were on operating municipal administration services, 20% was transferred to district municipalities and municipal commercial companies, 50% was expended on capital investments and 8% on debt service. Personnel costs representedonly about 11%o f total expenditure. 33. For the time being, IMM operates a mixed cash and accrual accounting system. The Law on Public Administration o f 2004 mandates municipalities to gradually introduce fullaccrual accountingand long-termbudgeting. Accordingly, IMMplans to switch to full accrual accounting by the end o f 2007. Although this should lead to significant improvements in financial controls, further improvement o f IMM'sfinancial management system will be needed to establish a good internal control system for an organization with an annual budget o f over US$ 2 billion equivalent. 34. As shown above, a critical issue is that for its financial resources IMMdepends to a large and increasing degree on the transfer o f a share of taxes by the Government. Moreover, even for its own-source revenue it has virtually no decision-making authority in matters o f rates, assessment bases, etc. However, the potentially negative effects o f such lack o f authority are mitigated by the fact that Turkey's intergovernmental fiscal transfers are formula driven and their rates fixed by law. They are therefore not subject to annual appropriations by Parliament or ministerial decisions and offer, within limits, a reasonable degree o fpredictability and stability. 35. IMM projections for 2006-2008 show a modest increase in revenue of about 6% per annum and a similar increase inoperating expenses. However, a substantial increase in borrowing, particularly in 2007 and 2008, o f over US$ 500 million i s projected to meet increased investmentrequirements. 2. Technical 36. Achieving improvement in IMM's environmental management, especially in the area o f solid waste collection and disposal increasing its preparedness in the event of a possible earthquake by ensuringthe functioning o f key infrastructure facilities and services entails the selection o f investments that are technically sound and cost effective, and keep operating and maintenance costs as low as possible. In keeping with these criteria, the investments selected for IMIP represent least cost alternatives. Concurrently, IMM has paid special attention to ensure that all selected investments are designed to meet the highest technical standards, and are in compliance with applicable Turkish and EU environmental standards and regulations. 37. An investment program covering a first phase o f 18 months of IMIP implementation was prepared and incorporated inthe Procurement Plan. While the first 18 months o f investments to be financed under IMIP have been identified, for those contemplated for the later years o f the project implementation period will be identified after the completion o f the Municipal Infrastructure Risk Mitigation Plan and necessary 11  technical studies that will be carried out after start o f implementation. In addition, the tender documents for the goods to be financed under Component B are close to completion and will be ready to procure after the completion o f negotiations. 3, Fiduciary 38. A procurement capacity assessment was completed inOctober 2006 to evaluate the capacity o f IMM and the Financial Department staff to manage project procurement in accordance with World Bank rules and guidelines. Risks were identified and an action plan was agreed on. Necessary mitigation measures, including training, will be taken by IMM and the Financial Department and closely monitored as part o f project supervision. 39. An assessment o f the financial management arrangements for the project is undertaken in October 2006 and updated in March 2007. Current financial management arrangements for the project are satisfactory to the Bank. IMMhas finalized the budgeting requirements for the project and has already prepared the draft financial management manual for the project. 40. The overall financial management risk for the project is substantial before mitigation measures and with adequate mitigation measures agreed, the financial management residual risk is rated moderate. 4. Social 41. The 1999 Marmara Earthquake was a major awakening event for the government and people o f Istanbul. The Provincial and IMM administrations realized that their emergency plans, infrastructure and measures to protect the population needed significant improvement. Meanwhile, public concern for individual and collective vulnerability grew, as well as increased awareness o f a range o f environmental issues. The Province and IMM have taken major steps to assess vulnerabilities and prepare mitigation and preparedness plans, but few results o f this huge effort are evident to the public. The ISMEP Project i s helping the Province reduce seismic risks in areas o f its authority - schools, hospitals and public security. IMM, in turn, will help IMM deal with both seismic and environmental risks. This project addresses issues that are considered high priority by the both the Provincial and Municipal Governments and the citizens o f Istanbul, the mitigation of earthquake risks, reduction o f environmental pollution, provision o f public services and improving the quality o f life. The project will invest directly in improving and managing sanitary landfills by closing "wild" landfills and illegal dump sites and improve management o f shipping wastes. Other components will assess the earthquake resiliency of municipal infrastructure and utilities, plan mitigation measures and retrofit municipal structures; support urban transformation by funding feasibility studies, participatory planning exercises and complementary infrastructure investments; and strengthen technical designs, tenderingprocedures and financial management. 42. When the territory o f IMM expanded to cover the whole Province in 2004, IMM inherited landfills that had been operated by various independent municipalities, some o f which were "wild dumps." Originally, the dumps were established in rural areas, but a few 12  have been absorbed by westward urban sprawl and the continued development o f tourism facilities west o f the old city. All o f the sites will be closed, and some will be removed and transferred to larger sites. A Penal Code has been passed which requires all municipalities and Mayors to be fined for environmental degradation, specifically non-clean up o f illegal waste sites intheir jurisdiction. 43. The investments in solid waste management will be well received by the public. In a study prepared by the IMM Metropolitan Planning Office entitled Housing and Quality o f Life in Residential Areas, "91 percent said that solid waste storage was an important or very important problem." Very few o f the wild dump sites have neighbors within a half a kilometer. People living near the other sites will welcome the improvements. All o f the work will take place on land owned and used by the IMM. 44. Earthquake risk mitigation i s a common area o f concern throughout Istanbul, and the IMM and some district municipalities have taken steps to address the issue. Some examples are the Earthquake Management Master Plan (2004) recently prepared by the IMM;inventories of buildingsat risk that were undertaken by the district municipalities of Zeytinburnu and Bakirkoy; and the microzonation study funded by JICA. Much remains to be done, however, and much i s being planned. One key element inplanning i s to ensure that utilities and infrastructure can withstand an earthquake. The project will fund a seismic resiliency study and the preparation o f a mitigation plan based on the study, and will retrofit critical municipal facilities. Theses investments are critical, but, their ability encourage citizens to take active measures to protect themselves will be greatly enhanced ifthey are integrated inthe IMM'spublic information andpublic awareness initiatives. 45. The IMM's Strategic Development Plan i s currently being articulated on a micro level. Two major objectives o f the plan are to reduce seismic vulnerability and improve the quality o f life in the city. On a micro level, the focus i s on "urban transformation," a multi-faceted concept that encompasses both seismic risk mitigation and improving the quality o f life. The objectives are to create new green spaces and improve existing public spaces, such as waterfronts and parks, upgrade infrastructure to improve the level o f services and increase access in case o f emergency and to replace poor quality, crowded housing in areas o f particular seismic sensitivity with stronger housing, improved commerce and open spaces. The IMM wants the private sector to take the lead in transforming housing and commercial blocks, while the municipality deals with public areas and infrastructure. The IMM i s developing four principal pilot projects in different parts o f the city. Designs are underway, but they will need to be supported by additional acceptability studies, feasibility studies, and participatory planning exercises before they can be implemented. Meanwhile, the IMM can prepare and implement projects that improve and expand public spaces and public facilities. The project will fund preparatory studies and public works that complement the pilot projects, as well as other highpriority public facilities. 46. The key social issues of the project are equal access to public services and public safety. Some project impacts will be significant, but not necessarily obvious to most citizens except in emergency situations, but the perception that positive steps are being 13  taken to address the issues i s important to building public confidence. Support to urban transformation will be more visible, although the impact will be more localized. 47. Three different groups have major stakes in the project. First, public officials, including both elected representatives and the staff o f public utility companies, are primary stakeholders. In their official capacities, and through advisors, they have defined project components and will be responsible for implementing them. The success of these project components depends on their ability to implement the project efficiently and effectively, as well as their ability to increase public awareness and stimulate public ownership. 48. The second group o f stakeholders i s organized civil society. Istanbul has a large group o f citizens with strong concern for their city. The concerns range from historic preservation, disaster mitigation and management, to public participation, political mobilization and construction and development. Some people manifest their commitment to the city in individual capacities, such as academics, technical specialists and land developers. Others work through one or more o f the thousands o f non-govermental NGOs (NGOs) in the city. Some NGOs are issue-focused, some provide services and charitable functions, and others advocate political or ideological positions. They range in size from one-person operations to large associations; some raise funds and others use their own resources to carry out their work. Two sets o f NGOs have a special stake in the project: first, the groups concerned with historical preservation, environmental protection, urban planning and development; and second, those who focus on disaster prevention or management, including public awareness and public mobilization. IMM seeks the advice and/or support o f specific NGOs in each set, but most disaster or preservatioddevelopment NGOs feel that opportunities to exercise their valuable skills, capabilities and ideas in decision-making and community action are too limited to enable them to have a significant voice. The project will offer opportunities for increased consultation between government and civil society on a range o f issues. 49. The third group of stakeholders consists o f all the other inhabitants o f Istanbul - the general public. They need properly functioning public services to enable them to live and work in the city. These 12.5 million stakeholders are the real target population of the project. 50. The concerns and perceptions o f the third set o f stakeholders were the subject o f the "Housing and Quality o f Life in Residential Areas" mentioned above. The study was patterned after similar studies conducted in cities in the United States and other countries. The valuable data collected in the study are being analyzed. The analysis has already yielded valuable insights regardingthe opportunities, attitudes and physical environment of citizens throughout the IMM. This work established a baseline to monitor project investments, and will be useful for preparing and monitoring other investments as well. 5. Environment 51, To ensure that the project complies with all World Bank environmental safeguards, all IMIP sub-projects would be subjected to an environmental review process by IMM as described in the Framework document presented in Annex 10. For the sub projects to be 14  defined during project implementation, the Bank will verify during supervision that IMM also follows the Framework procedures for environmental review. As noted below, however, sub projects that are or could be rated as category A require ex-ante review and clearance by the Bank. 52. The Environmental Category o f the project is FI. The Environmental Category FI rating i s based on the fact that the investments under the project cannot be assigned a single environmental category. In addition, some anticipated investments have not yet been identified. In that case, the FI provides the flexibility to IMM to finance an Environmental Category A investment should that be necessary, subject to following the necessary safeguards. 53. The Environmental Assessment for the Environmental Management component of the project to clean up 28 illegal waste sites was undertaken inthe manner described inthe Environmental Framework. The Environmental Assessment was disclosed in country on February 5, 2007. 54. The environmental assessment process is carried out to evaluate potential positive or negative impacts o f any proposed sub-project; to evaluate measures that must be taken to prevent or minimize potential negative impacts damaging to the human and natural environment (for example by site selection or mitigating measures at a given site); and for supervisiodinspection o f sub-project implementation. 55. The Turkish environmental impact assessment regulation classifies projects by environmental risk in a manner similar to World Bank Environmental Assessment (EA) policy (OP 4.01). Some cases may arise, however, where the resultant environmental risk assignment may differ from that o f the World Bank. Inthat limited number o f cases IMM should seek additional information or agree to undertake additional measures as a condition o f using loan funds. The seven key elements involved inthe EA process are: (i) screening, (ii)EA documentation, (iii) public consultation, (iv) review and approval, (v) disclosure, (vi) conditionality and (vii) supervision and reporting. The procedures and institutional responsibilities are all delineated inthe Framework presentedinAnnex 10. 56. For cultural property issues, IMM i s responsible for application o f Turkish laws and regulations. There are two possibilities: (i) a subproject located in a "designated" area with known artifacts or structures o f cultural interest, and (ii) subproject is carried out in a a non-designated area, and encounters a chance find during construction. 57. A constructionpermit is issued only after it has beendetermined whether or not the site i s one that i s "designated" as an area o f cultural significance. For projects in a "designated" area, an approval from the regional council with jurisdiction over that area i s needed before a construction permit i s issued. A regional council consists of representatives from the Ministry o f Culture and Tourism, academia, IMM one from the District Municipality, and other members depending on the related subjects representing those agencies., and each council has identified certain "designated" areas within its' jurisdiction that are culturally significant. The Ministry o f Culture and Tourism will bring inspecial workers to perform the necessaryactivities inthe designated area. 15  58. If the project is not in a designated area, no approval from a regional council is necessary. If by chance, an historical article i s found during construction, the Ministry of Culture and Tourism i s informed and sends and expert to provide direction on how to proceed with the activity. 59. The subproject-specific Environmental Management Plan (EMP) will be required to include appropriate obligations inboth mitigation and monitoring plans for construction either in a "designated area" or to address chance find events. These requirements are elaborated in greater detail inAnnex 10. 6. Safeguard policies Safeguard PoliciesTriggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [XI [I Natural Habitats (OP/BP 4.04) 11 [XI Pest Management (OP 4.09) [I [XI Cultural Property (OPN 11.03, beingrevisedas OP 4.11) [XI 11 Involuntary Resettlement (OP/BP 4.12) [XI [I Indigenous Peoples (OPIBP 4.10) [I 1x1 Forests (OP/BP 4.36) 11 [XI Safety o f Dams (OP/BP 4.37) 11 [XI Projects inDisputedAreas (OPIBP 7.60)* 11 [XI Projects on International Waterways (OP/BP 7.50) [I [XI 60. The project is expected to take place on public land or within existing rights of way. None o f these activities i s likely to entail any land acquisition, relocation o f population, or result in restricting the access of individuals or communities to economic resources. Given the dynamic situation in the IMM, the results o f plans or studies underway or to be undertaken, however, it i s possible that the Municipality will request support for an investment that will require private land to be acquired or public land to be cleared. To enable the project to respond quickly and positively to such an eventuality, the IMM has prepared a Resettlement Policy Framework satisfactory to the Bank that will ensure compliance with OP 4.12, and hence the safeguard i s triggered as a precautionary measure. In addition prior review o f all proposed urban transformation investments under Component C will be undertaken. 61. Cultural Property (World Bank OP 11-03). For cultural property issues, IMM i s responsible for application o f Turkish laws and regulations. There are three possibilities: (i)asubprojectlocatedina"designated" areawithknownartifactsorstructuresofcultural interest, (ii) works are carried out on a structure with cultural significance not located civil in a designated areas, and (iii)a subproject is carried out in a non-designated area, and encounters a chance find during construction. * By supportingtheproposedproject, the Bank does not intend toprejudice thefinal determination of theparties` claims on the disputedareas 16  7. Policy Exceptions and Readiness The project does not require any exceptions from Bank policies. The project meets the Regional criteria for readiness for implementation. 17  Annex 1: Country and Sector or ProgramBackground Istanbul Metropolitan Municipality Urban growth. 1. At the time of the proclamation of the Turkish Republic in 1923, the City of Istanbulhad a population of less than 1 million. Its growth remained relatively moderate until the 1970s when it reached about 2 million. Since then accelerated economic development, which fueled strong internal migration especially from the Eastern regions o f Turkey, led to a rapid expansion o f both population and built-uparea. By the end o f 2005, the city was estimated to have reached apopulation of at least 12 million on a territory that covers 5,343 h2. Less than 60% o f this i s available for urban development and the remainder consists o f protected natural spaces. Currently, about twolthirds o f the population (8 million) live on the European side and one third (4 million) across the Bosporus on the Anatolian side. 2. According to conservative projections o f the IMM Metropolitan Planning Office, the population of Istanbul could reach about 18.5 million by 2030. Other sources estimate population numbers o f 20-25 million for that same date. Regardless o f the final number, the critical issue the city is confronted with for its future growth is that the geographical site o f Istanbul cannot absorb more than about 2.5 million additional inhabitants without either dramatically increasing the - already excessively high - population densities in the existing built-upareas or expanding into protected natural spaces, or both. The invasion o f sensitive watershed areas, inparticular, could have dramatic consequences for the future of Istanbul's supply o f drinkingwater. Administrative structure. IMMMunicipalServiceEnterprises 4. IMM is responsible for all matters that affect the city as a whole. It is, in particular, Water SUPPlY and sewerage ISKI responsible for the delivery o f municipal Solidwaste collectionidisposal ISTAC services as well as the financing and Urbantransport Metro ULASIM maintenance o f all main infrastructures (other Bus transport IETT than those pertaining to and operated by State Water transport ID0 agencies such as interregional highways, power Natural Gas Distribution IGDAS transmission lines, etc.). IMM is also Roadmaintenance ISFALT responsible for urban planning and the definition Traffic management ISBAK AGAC of urban development options and policies. Trees and parks Car parks ISPARK 18  5. Delivery o f municipal services by IMMi s carried out through so-called "municipal economic enterprises". All o f these enterprises, in which IMMi s the majority shareholder, operate under the oversight o f the IMM Department o f Economic Enterprises as commercial companies registered as "Incorporations". They are managerially and financially autonomous and are to that extent similar to private enterprises. Environmental Challenges. 6. Istanbul's rapid population increase over the past few decades has severely taxed the capacity of IMM to deal with urban development problems. Unplanned and uncoordinated urban growth have contributed to a downward trend inthe living conditions o f many o f Istanbul's inhabitants, created severe constraints for the city's economy and exacted a high toll from its natural environment. New and often illegal settlements and industrial plants have in many cases expanded into areas that were environmentally fragile and warranted being protected as natural resources. Air pollution has become a major issue in many areas. Growing inefficiencies in collection and safe disposal o f solid waste, especially from industries, are becoming potential public health hazards. Sea pollution causedby the shipping industry, port activities and other industries, i s at the root o f serious environmental problems for the waters o f the Bosporus and the Sea o f Marmara. CHARACTERIZATION OF THE WASTE IN ISTANBUL 7. According to IMM, Istanbul produces currently about 13,000 tons o f residential and commercial Substance (43%) solid waste per day. Responsibility for solid waste collection rests with DMs while management of disposal i s the responsibility o f ISTAC, a municipal economic enterprise owned by IMM.Inkeeping with this Solid waste disposal, including transfer stations and sanitary landfills e Medical waste collection and disposal e Composting plant 19  e Removal o f shippingwastes e Cleaning o f main streets e Construction debris removal and disposal e Methane gas-fired power generation 8. ISTAC currently operates a total o f six transfer stations (Baruthane, Yenibosna and Halkali on the European side and Aydinli, Hekimbagi, and Kucukbakkalkoy on the Anatolian side). The transfer stations include systems for collection vehicle weighing, offloading o f solid waste from collection vehicles, and waste compaction into 35 m3waste containers for transport to the landfills. 9. There are currently two solid waste sanitary landfills (Odayeri (75 ha) on the European side o f Istanbul and Komurcuoda (100 ha) on the Anatolian side which were constructed in 1994. Both are built with a composite liner system (60 cm clay, geomembrane, and then drainage layer). Leachate i s collected and after a four-stage treatment i s discharged to the city's sewerage system. Two additional advanced leachate treatment facilities are planned for these landfills. At the Odayeri landfill site, ISTAC also operates a composting plant for organic waste with a daily capacity o f 700 tons as well as a 4 Megawatt power plant using the methane gas generated by the landfill. 10. Also at the Odayeri landfill site ISTAC operates a medical waste incinerator with a capacity o f 24 tons/day. Medical waste i s directly collected by ISTAC in special vehicles from over 190 different medical facilities. 11. At this point Istanbul does not yet have a formal program for segregation of recyclable materials. A pilot program i s currently under implementation in four DMs and wilI be extended to another I 1 DMs shortIy. A new 2,000 todday waste segregation and composting facility for the landfill site on the Anatolian side i s inthe project design stage. Sea vessel waste removal. 12. In addition to managing solid waste disposal ISTAC is also responsible for collection and disposal o f wastes from ships as well as for collection and disposal o f waste and debris from water surfaces and shorelines, Waste from ships i s collected in compliance with the provisions o f the IMO/MARPOL 73/78 Convention on Prevention of Sea Pollution by Ships. For that purpose ISTAC operates a fleet o f 12 barges that collect different types o f waste and take it to a facility at the Haydarpava port for treatment. The Haydarpaga facility was built recently and specifically designed to treat waste containing, or contaminated by, oil and petroleum-based materials. ISTAC considers the current system o f operating separate barges for each type o f waste as inefficient and plans to acquire a number o f new barges capable o f handling multiple waste streams. To increase the incentives for orderly waste disposal by ships ISTAC, at the request of IMM,charges a fee that covers only about 25% o f the actual cost o f the collection and disposal operation. 13. ISTAC i s also in charge o f controlling illegal waste dumpingby ships and operates two airplanes that monitor such illegal activities in the Bosporus and the adjacent areas o f the Black Sea and the Sea o f Marmara. 20  Closure o f existing landfills. 14. Prior to construction o f regulated solid waste landfills in 1994, garbage was dumped in areas that are generally a gravel pit/quarry, a topographical valley, or a hillside where the sloped down area is not easily accessible to the public. Such wild dumps inthe Istanbul region have been operated by the local municipalities. Currently, IMM has identified 28 wild dumps on the European side that should be closed. Prioritization and waste consolidation evaluation for closure i s to be done during project implementation. About 14-15 o f such wild dumps are estimated to be on the Anatolian side. Regulatory Aspects of Waste Management and Environmental Protection. 15. Waste management policy in Turkey i s in harmony with the "EU Waste Management Hierarchy" which consists of: a) waste minimization; b) reuse and/or recycle; c) energy recovery/disposal volume reduction (incineration); and d) final disposal by landfilling. 16. The main applicable framework regulations of the Environmental Law of 1983 (as revised in 2006) relevant to the IMIP are the following: Solid Waste Control Regulation, 1991 (revised in 2005); Medical Waste Control Regulation, 1993 (revised in 2005); Hazardous Waste Control Regulation, 1995 (revised in 2005); Soil Pollution Control Regulation, 2001 (revised in 2005); Water Pollution Control Regulation, 1998 (revised in 2004); and Environmental Impact Assessment Regulation, 1993 (revised in 2004), The above regulations have recently been revised for harmonization with the applicable EU Directives on Environmental Impact Assessment (EIA), Waste, Landfill and Incineration. Certain EU Regulations for specific types o f wastes (waste oil, batteries and accumulators, packaging waste, marine vessel wastes, used tires etc.) have also been transposed into the Turkish legislation and transposition o f the remaining EU special waste Acquis i s continuing. 18. However, effectiveness o f country-wide implementation of the existing regulations i s questionable due to the lack o f adequate financing and the limited number and capacity o f waste management facilities to provide services needed to fulfill the requirements for waste recovery and final disposal. The lack o f waste management infrastructure also hampers effective regulatory enforcement. 19. As one o f the largest urban conglomerations inthe world, Istanbul has major urban planning, traffic, energy and water supply services related environmental challenges. O f the environmental concerns, waste management is inIstanbul the highest priority issue that requires effective management on a daily basis, both from environmental protection 21  (public health, ground and surface water quality, quality o f life) and the public awareness point o f views. 20. The IMM i s far ahead o f the other Turkish municipalities in solid waste management services. In harmony with the EU waste hierarchy, IMM has been investing in and operating sanitary landfills, solid waste recovery and composting facilities, and medical waste collection and disposal facilities to fulfill its environmental protection responsibilities. Upgradinghetrofitting o f solid waste services and pertinent facilities are deemed necessary to respond to the continuing growth o f the metropolitan area. Considering the magnitude o f the investmentsrequired to upgrade solid waste services, a phased investmentprogram would be necessary to meet EU standards, namely: PhaseI : Closure o f illegal sites, improved operations in waste minimizatiodrecovery and regulated disposal at sanitary landfills, improved public awarenesdtraining inwaste management, Phase 11: Expansiodretrofitting o f recycling centers and existing sanitary landfills, improved prevention o f illegal dumping and effective regulatory enforcement, Phase 111: Establishment and upgrading o f marine and industrial waste management infrastructures to complement effectiveness and viability o f the solid waste management system. Earthquake Vulnerability o f Municipal InfrastructureSystems. 21. Istanbul lies on one o f the world's most active earthquake fault zones, which extends from Indonesia through the Himalayas, Iran, Turkey, Greece and parts o f Southern Europe and North Africa. Throughout recorded history Turkey and Istanbul have suffered repeatedly from severe earthquakes. Prior to 20th century, there were 37 recorded earthquakes affecting Istanbul with an estimated magnitude from 6.1 to 7.7 on Richter scale. The 1999 Marmara earthquake, whose epicenter was only 60 km from Istanbul, caused a death toll o f about 17,000 and its negative direct economic impact was estimated at about 2.5 YOof GNP. A subsequent assessment carried out by JICA in 2000-02, estimated the probability o f a major earthquake affecting Istanbul in the next 30 years at 62% (k 12%) and the likelihood o f such an event in the next 10 years at 32% (+ 12%). These probabilities are very similar to those for the San Francisco and Los Angeles areas o f California, which lie astride a fault similar to Turkey's North Anatolian fault - the San Andreas fault. According to the same JICA study, an event similar to the Marmara earthquake could result in up to 87,000 casualties and heavy damage to more than 350,000 public and private buildings, Some recent damaging earthquakes in Turkey are listed in Table 1. 22  Table 1: EarthquakeDamage Scenarios for Istanbul ModelA Model B (most probable case) (worst case) Human Casualties Deaths 73,000 (0.8%) 87,000 (1.O%) Severely injured 120,000 (1.4%) 135,000 (1.5%) Building Damages /' Heavily 51,000 (7.1%) 59,000 (8.2%) Heavily +Moderately 114,000 (16%) 128,000 (18%) Heavily +Moderately +Partly 252,000 (35%) 300,000 (38%) ~ Household Damages /' Heavily 216,000 268,000 Heavily +Moderately 503,000 601,000 Heavily +Moderately +Partly 1,116,000 1,300,000 Public Buildings Located in High Seismic 42.8% 48.5% Intensity Areas 43.6% 53.1% Educational 48.0% 53 .o% Health 53.0% 57.2% Security 59.4% 69.6% Governmental Water Pipeline Damage Points 1,400 1,600 Gas Pipeline Damage Points 11 13 Electric Cable Damages 820 km (2.5%) 1,080 (3.3%) Bridge Damages (high probability of 18 20 collapse) /' Definition of damages: Heavily: collapse or ieavy structure damage that is unusablefor evacuation and living without repaidrebuild; Moderately: usablefor evacuation, but repairs necessaryfor living; Partly: usablefor evacuation and living, but repair is desirablefor living. Source: Japan International Cooperation Agenq [JICA]: The Study on a Disaster PreventiodMitigation Plan in Istanbul Including Seismic Microzonation in the Republic of Turkey; December 2002 Disaster Prevention/ Mitigation Basic Plan Studv inIstanbul. 22. The JICA study provided an outline for the development o f a broader framework for disaster prevention and mitigation planning in Istanbul. It emphasized the need for seismic micro-zoning studies as the scientific and technical basis for disaster preventiodmitigation, recommended the development o f citywide preventiodmitigation programs against building and infrastructure damage, and highlighted the necessity to integrate disaster prevention considerations into the urban planning process for the city. It insisted, especially, on the need to undertake, immediately, the retrofitting o f important facilities and key infrastructure to secure their continuing operation in the event o f an earthquake. 23  23. The JICA study was followed by the preparation in 2003 o f an Earthquake Master Plan. The Plan, prepared by Turkish experts, Retrofitting of public facilities, such as City Hall and other government details the necessary earthquake disaster mitigation measures that are Constructionof a disastermanagementcenter differentiated according to short, Implementinga campaign to raisepublic awarenessabout disaster medium, and longer-term requirements. Short-term measures, Medium- and Longer -Term Measures to be implemented immediately, Formulationof a master plan for earthquakedisaster prevention Formulation of an urban redevelopmentplan aimed at establishing an include the retrofitting o f important facilities and infrastructure to secure their proper functioning in the event o f an-earthquake disaster. Medium and longer-term measures, to be implemented within the next 5- 10years, include bothphysicaland institutional objectives. 24. Inaddition to the JICA Study, several other reports on the general earthquake risk to the lifelines o f Istanbul have been published in the recent past. These include reports from Turkish universities, public agencies and others. The reports cover the risk to the electric power system, the water and waste water systems, the gas distribution system, the transportation system, ports, etc. The reports contain much data on many o f the technical aspects o f earthquake risk in Istanbul, selected inventory data, and data on what is being done to reduce risk. All agree that the risk o f earthquake damage and the resulting interruptions o f service are very high. All o f the reports also agree that detailed studies o f the earthquake risk to the municipal infrastructure systems o f Istanbul need to be conducted. Further, they also agree that serious mitigation efforts are necessary to make these systems much less vulnerable to earthquakes. Institutional Responsibilities for Emergency and Hazard Risk Management. 25. Historically, L a w No. 7269, "Measures and Assistance to Be Put into Effect Regarding Natural Disasters Affecting the Life o f the General Public" sets forth the institutional arrangements for disaster management. 26. Turkey i s divided into 81 provinces governed by administrators appointed by the central government. A provincial disaster committee i s composed o f senior provincial officials from relevant ministries and departments like civil defense, health, education, and includes mayors (who are elected officials) and the Red Crescent Society. In addition, there are approximately 840 sub-districts in the provinces and some 3,200 municipalities. 27. Traditionally, disaster management in Turkey has been highly centralized. Local authorities administered directives from the center and Governors are expected to coordinate and mobilize the resources o f other agencies. Mayors have relatively limited direct authority and responsibility for disaster management. Minor crises are to be handled at the district or sub-district level. If the disaster exceeds capabilities at that level, the provincial Governor becomes involved. If it is a major event, representatives of the ministrieso f the central government become involved and establish crisis centers. Ifthere 24  i s a national-scale natural disaster, a crisis center i s established in the office o f the Prime Minister that includes senior representatives of at least 15 ministries, including the military. 28. The operational responsibilities at the provincial level reside with governors. Each ministry has a unit responsible for some aspect o f disaster management. Rescue and relief operations are the direct responsibility o f the provinces or districts, with assistance provided by the central government; the central government, under MPWS, i s responsible for reconstruction and rehabilitation. The RedCrescent Society, the General Directorate of Civil Defense (GDCD in the Ministry o f Interior), and the military also play a significant role inrescue and relief operations. 29. In June 2000 the Government enacted the Decree to formally establishing the Turkey Emergency Management General Directorate (TEMAD) as a national coordination body for emergency management. 30. Following the Marmara earthquake, a great part o f responsibilities for the hazard risk mitigation were vested with the local level authorities and since than, many individual municipalities have, at their own initiative, undertaken activities to strengthen their emergency preparedness capacity. 31. At the provincial level, the overall responsibility for all post-disaster relief and reconstruction efforts rests with the Provincial Governor but many o f the crucial for disaster management functions are within the jurisdiction o f municipality. Consequently, in Istanbul there are two separate disaster management centers: the Istanbul Province Disaster Management Center (AYM) and the IMMDisaster Management Center (AKOM). Each o f these two centers has specific responsibilities: AYM i s responsible for dealing with all aspects o f health, education, civil defense, security, civil works and other services normally operating as part o f the State administration. AKOM, in turn, i s responsible for all services falling under the authority o f IMM, including fire brigades and the services operated by the various `municipal economic enterprises' (water, gas and electricity operators). 32. The municipal center (AKOM) was completed and began operations within a year of the 1999 earthquake. Modeled after a similar facility in Los Angeles County, A K O M contains many state-of-the-art features and accommodations for each o f the municipal agencies that would need to respond to a variety o f emergencies. On the other hand, the construction and strengthening o f AYM i s being undertaken under the ISMEP project within the context o f enhancement o f emergency response capacity, along with retrofitting o f public buildings in Istanbul (schools and hospitals). 33. Taking into account the institutional set-up for emergency management mitigation, assisting IMM and its municipal services in improving their preparedness for a possible natural disaster i s o f key importance, in addition to the on-going Bank support in this area to the Provincial Government. Moreover, ensuring full coordination and cooperation between provincial and municipal authorities i s one o f the objectives o f the proposed project. 25  Public Awareness and Neighborhood Community Volunteers. 34. Evidence from earthquakes and other natural disasters, including those in Turkey, demonstrates the importance o f a knowledgeable public who can make a critical difference in reducing the loss o f life in the immediate aftermath o f an earthquake. Therefore, community-based disaster awareness programs as well as support to the volunteer groups constitute crucial aspects o f disaster preparedness at the municipal level. 35. Creating and sustaining volunteer groups to provide assistance in preparedness and response efforts i s a challenge worldwide. Numerous groups piloted volunteer initiatives inTurkey following the 1999earthquake, with varying degrees o fsuccess. As an example, one o f the programs i s the Neighborhood Disaster Support (MAG) funded by the Swiss Agency for Development and Cooperation (SDC). It mobilizes neighborhood groups by working through Muhtars (the lowest level o f governmental structure in Turkey). The teams participate in a training program conducted by professionals from Civil Defense, Fire Brigades and medical associations, and inperiodic exercises. 36. The public information campaigns aimed at increasing public awareness o f seismic risks, training in preparedness and mitigation measures, and the support to the volunteer groups are already incorporated in the design o f the ongoing ISMEP project. Consequently, the proposed Istanbul Metropolitan Municipality Project will not duplicate these efforts and these activities are not included the proposed project. 26  Annex 2: RelatedProjectsFinancedby the Bank and/or other Agencies A list of recent Bank projects in the sector is shown below. Table 1: Name ClosingDate OED ICR Rating Outcome ISustainability ACTIVE and CLOSEDPROJECTS Izmir Water Supply and 12/31/1995 Highly Unlikely Sewerage (P008971) Unsatisfactory Istanbul Water Supply and 0113 111998 Satisfactory Uncertain Sewerage Project iP009034) Ankara Sewerage Project 0212811999 Satisfactory Uncertain (P009061) Bursa Water and Sanitation 0613012001 Satisfactory Likely Project (P009065) Antalya Water and Wastewater 613012003 Moderately Likely Project (P009093) Satisfactory Emergency Flood and 0913012003 Satisfactory Likely Earthquake Recovery Project (P058877) Cesme-Alacati Water Supply and 1213112004 Moderately Likely Sewerage Project (P008985)2 Satisfactory Marmara Earthquake Emergency 1213112006 N A N A Reconstruction Project (P068368) Railways Restructuring Project 0913012009 N A N A (P077328) Municipal Services Project 0613012010 N A N A (PO8 1880) Renewable Energy Project 0613012010 N A N A (P072480) Istanbul Seismic Risk Mitigation 0913012010 N A N A and Emergency Preparedness Project (P078359) Gas Sector Development Project 1213112012 N A N A (P093765) 2The Project Status Report at project closure rates both the IP and DO as satisfactory. 27  Annex 3: Results Framework and Monitoring ResultsFramework PDO ProjectOutcome Indicators Use ofProjectOutcome Information improvingperformanceo f IMM reducednegativeimpact o f contributeto further discussion in management of environmental solid waste disposal on the and formulation of IMM services and protectionof natural environment and population policies and investment resources priorities strengtheningcapacity of IMM to cope with natural disasters and reducedrisk o f breakdownof continuingdelivery o fbasic key municipalservices and municipalservices inthe event infrastructure during o f a possible earthquake. earthquakes IntermediateOutcomes IntermediateOutcome Use of IntermediateOutcome Indicators Monitoring Component A: wild dump sites are properly use project experience for environmentaland public closed accordingto standards formulatinglong-termpolicy health risks from collectionand identifiedinthe EMP. and decision-making disposalof solid waste from households Component B municipal infrastructure risk refinedesigncriteriaand cost municipalservices are mitigationplancompleted data to improve quality and strengthenedand better retrofitting of other essential cost effectiveness of future preparedfor an event of a infrastructure completed retrofitting works disaster; key infrastructureis retrofitted Component C design and implementationof demonstratedfeasibility of pilot urbantransformation other urbantransformation urbantransformation projectfeasibility studies are programs in high-riskareas programstaking into account completed. hazardvulnerability Priority investmentsidentified and undertaken. Component D IMMimplementationprogress monitorcompliance of IMM project is successfully and financialreportingis with projectmanagement completedon time satisfactory and in line with responsibilities agreed schedule. Auditors issue unqualified opinion on financialstatements o f projectaccounts 28  I zE Y -0 C C m P C E :a C eE 2 a W E .I L 0 .3 c, E c., v) I RQ 2 L > G h i r : i .I c, v) c Q W 4E E (v cr: $1 2 $1 I d z e C 0 L  I 0 M a- d z Q z I . w .  Annex 4: DetailedProjectDescription 1, The IMIP would consist of the following four components: A. Improvements inenvironmental management B, Strengtheningo f municipal services and infrastructure C. Pilot urbantransformation program D. Project management and audits Component A: Improvements in environmental management (World Bank: US$96 million) Objective of Component A: to assist IMM in (i)closure o f uncontrolled disposal sites for municipal solid waste (MSW); and (ii)institutional strengthening o f solid waste services through preparation o f annual Business Plans on financial and technical operations. 2. Component A includes the following sub-components: (a) Closure o f illegal dumps and rehabilitation o f creeks (US$SO million): environmental site investigations; design; civil works and equipment required for the closure and rehabilitation o f landfills; and rehabilitation o f landfills as needed. A detailed feasibility study including prioritization and an integrated plan for closure, rehabilitation and post-closure management o f the uncontrolled waste disposal sites and creeks will be undertaken as part o f project implementation. 3 , The closure o f the existing waste disposal sites are based on the following options: - Excavation o f all the waste material from the disposal site and disposal in a sanitary landfill. This option o f full removal o f the waste i s financially viable up to a certain volume and also depends on the distance to the sanitary landfill and the quality o f the waste. Environmental aftercare could still be required for this option if the subsoil is heavily polluted and/or causes risks for nearby population or water resources. The rehabilitation will be based on the placement o f clean soil fill and re-vegetation via seeding with crabgrass or trees. - Partial removal o f the waste to a sanitary landfill could be most appropriate for larger disposal sites to reshape the disposal area so that it i s sustainable. The area can then be covered with an adequate cover material o f gravel/clay/topsoil sequence to prevent infiltration o f precipitation and tailored to the anticipated landfill gas production. In this case, the disposal site's subsoil needs to include a sufficiently thick layer o f naturally impermeable material to enable leachate containment and treatment. This option would mostly apply to waste disposals inclay pits. - Ifthe quantity o f the waste inthe waste disposal site i s very large and becomes too costly to remove, then in-place closure o f the site may be considered. This option i s similar to the partial removal option with a top cover and landscaping. However, under this option the subsoil may not always consist o f a fully impermeable (clay) layer. The design of this 31  option will therefore be based on detailed site investigations and a risk assessment of anticipated mobility o f pollution and exposure paths o f sensitive receptors (mainly population and water resources). The closure and adequate coverage o f the disposal site will stop infiltration o f precipitation and in time the generation o f leachate. The design will also include leachate extraction and treatment and landfill gas monitoring (possibly, landfill gas drainage and/or use for energy) and continuous maintenance o f the closed site. 4. For all sites, adequate environmental site investigations will be conducted to test the quality of adjacent surface waters, leachate, the subsoil and local groundwater. The results will be usedto prepare the closure and to prepare the monitoring plans. 5. In addition, the component will also include a risk management plan after the closure o f all sites for maintenance and restricted access has to be established for the partially removed or unremoved waste sites. (a) Preparation o f annual Business Plans: The annual Plans include operating performance, annual investmentsand financial indicators and targets. (b) Waste collection equipment (US$16 million): the purchase o f priority waste collection equipment. Component B: Strengthening o f municipal services and infrastructure (World Bank: US $126 million) Objective of Component B: to assist IMM in further preparing the city for a possible earthquake, including funding o f priority investments in the most vulnerable earthquake prone areas. Component B includes the following sub-components: Preparing a detailed risk assessment for all major municipal systems; Developing a Municipal Infrastructure Risk Mitigation Plan. This plan would prioritize and select projects for strengthening based on importance and cost effectiveness; develop a list o f equipmentneeded for optimal response following a major earthquake; and develop a long term plan for strengthening and associated maintenance o f municipal infrastructure; Retrofitting o f municipal infrastructure (US$lOO million): retrofitting o f selected municipal infrastructure such as under-passes, pipelines, viaducts etc.; and Providing emergency response equipment (US$26 million): emergency response and rescue vehicles, command equipment,etc., for the fire brigades. For steps (a) and (b), a Task Force will be organized, consisting o f representatives o f municipal government agencies that would be affected by a major earthquake and organizations responsible for the above facilities. Each organization will rank its own facilities according to life-safety risk and critical need, with emphasis on optimizing emergency response following a major earthquake and minimizing serviceibusiness interruptions. Because o f limited resources, it will not be possible to both evaluate in detail and strengthen all facilities. This project component will address only the most critical facilities given limited funding. It would consist of detailed earthquake 32  engineering risk studies and strengthening designs that will be carried out on the selected systems and their facilities, as recommended by the JICA study and other recent studies. 7. The program would consist o fthree phases: a risk audit, a cost-benefit analysis, and various forms o f implementation such as earthquake retrofitting and contingency planning. A brief summary i s presentedbelow. 8. Phase I- Risk Audit. The first step i s to understand the risk by developing a scenario o f what would happen if a strong earthquake were to occur. This Risk Audit would be conducted by highly trained earthquake engineers who visit the facilities and make surveys to identify principal sources o f risk and estimate all potential losses - buildings, equipment, piping, business interruption, etc. Typically, the losses are presented as probabilistic numbers in terms o f direct financial impact (damage and loss) and service or business interruption. Most frequently, the expected damage i s expressed as Probable Maximum Loss. The results are summarized in a table for each system, its critical structures and their contents. Recommendations are made for further cost-benefit analyses based on the importance and extent o f the expected damage. 9. Phase I1- Cost-Benefit Analysis. Seismic structural analyses would be performed o f selected important municipal systems and their components (for example, a specific water treatment plant or a specific pumping station in the water system) to specifically identify all significant earthquake vulnerabilities. In the cost-benefit analysis detailed evaluations are made of high-risk facilities to confirm Phase Ifindings and develop mitigation options and project costs. This evaluation o f buildings, equipment, etc., will provide information concerning strengthening details to achieve the desired earthquake risk reduction. This information can then be used to finalize the appropriate level of strengthening (Implementation) based on both cost and overall risk reduction objectives. 10. Phase I11- Implementation. This phase would include development o f final design drawings o f strengthening features (to buildings, equipment, piping and other system components), construction documentation, actual construction, and emergency response planning by the respective municipal utilities, and strengthening o f response capacity of fire brigades. ComponentC: Pilot UrbanTransformation Program (World Bank: US $100 million) Objective o f Component C: to assist IMM to further develop its urban transformation program by supporting pilot urban transformation studies and investments throughout the metropolitan area. (a) Preparing and further developing existing feasibility studies for pilot citywide urban transformation projects and implement selected investments. (b) The investments would include city center revitalization, retrofitting and construction o f buildings, fire stations and emergency housing associated with urban transformation inearthquake prone areas. 3 3  The selection criteria for the urban transformation component will be based on the following criteria: be technically feasible, economically, financially viable and environmentally beneficial and supported by an operational improvement plan; support investments that will be managed by the Borrower or one o f its utilities after the completion o f the investment; be located in the most seismic vulnerable areas; and ensure that the investments have the environmental mitigatiodmanagement plan completed and reviewed by the Bank. 11. The broader aims o f the urban transformation program are to reduce public vulnerability to seismic risk and improve the overall quality o f life in the metropolitan area. High priority will be given to two types o f sites: high density neighborhoods in seismically sensitive areas with poor housing quality and limited public access, which are likely to suffer the most damage during an earthquake and be the most difficult to reach with emergency response equipment; and public areas used for recreation, nodes in transportation networks and staging areas in case o f emergency. In additional to providing funds for studies and investments, the Bank will help IMM and district municipalities increase their familiarity with worldwide experience in urban transformation and participatory planning and develop participatory planning approaches that are effective and efficient inthe Istanbul context. Component D: Project Management and Audits (IMM: US$14 million; World Bank: US$O.15 million) Objective of ComponentD: to assist IMMinthe efficient and expeditious implementation o f the project in accordance with World Bank project management requirements. Component D includes the following subcomponents: (a) Project Management: preparation o f design studies, tender documents, review o f strengthening and other design and related social, environmental, and legal assessments, unforeseen technical surveys and studies, as well as preparatory studies for possible follow-up projects and technical training for project implementation; and (b) Audits o f project accounts (US$.15 million): the annual external audits of the project accounts in compliance with World Bank guidelines. 34  Annex 5: Project Costs Local Foreign Total Project Cost By Component and/or Activity US$ US$ US$ million million million Component A Improvement o f Environmental 70.00 26.00 96.00 Management Component B Strengthening o f Municipal Services and 56.00 70.00 126.00 Infrastructure Component C Pilot Urban Transformation Program 90.00 10.00 100.00 Component D Project Management and Audits 14.00 0.15 14.15 TotalProjectCostswith contingencies' 230.00 106.15 336.15 Front-end Fee 0.00 0.00 0.00 Total FinancingRequired 230.00 106.15 336.15 `Identifiable taxes and duties are U S $ 51.35 million, and the total project cost, net of taxes, is US $ 284.8m. Therefore, the share of project cost net oftaxes is 85%. Front end fee has beenwaived for FY07. 35  Annex 6: ImplementationArrangements 1. IMIP will be implemented from 2007 - 2012 under the direct responsibility of IMM. The implementation of the project by the Borrower will be on the basis ofthe use of existing municipal staff according to their relative functions, and there will be no separate project implementation unit. The Financial Department will coordinate project implementation, especially in regard to reporting and communicating with the Bank, but various other technical specialists will provide support according to their relevant functions. The Financial Department will be responsible for procurement, disbursement and financial management, accounting and reporting. Implementation will be undertaken by existing qualified staff from the Finance Department itself as well as technical experts from relevant other departments o f IMMand, on an as needed basis, representatives o f the beneficiary municipal service companies. Technical supervision o f project implementation and monitoring, evaluation o f project results, and checking o f engineering designs to ensure that they meet project criteria will be undertaken by the technical staff from IMM. Possible needs for specific skills and qualifications that might not be available in IMMwill be satisfied through the temporary employment of local consultants and/or the procurement o f international expertise to be financed under the project. 2. This will be the first Bank project to be undertaken by IMMwho will be new to the Bank project implementation procedures, but they should benefit from the experience o f the ongoing ISMEP project coordinated by the Istanbul Project Coordination Unit (IPCU) located within the Istanbul Special Provincial Administration (ISPA). The IPCU team was already consulted during the proposed project preparation and expressed its willingness to assist IMM on any matter related to the implementation. Such cooperation i s o f key importance, particularly, for efficiency o f efforts in the area o f emergency preparedness and management, for both IMMand the provincial government. While the IMM Financial Department unit will be new to the Bank project implementation procedures, it should benefit from the experience o f the ongoing ISMEP project coordinated by the IPCU located within the Istanbul Special Provincial Administration (ISPA). The IPCU team was already consulted during the proposed project preparation and expressed its willingness to advise IMM on any matter related to the implementation. Such cooperation i s o f key importance, particularly, for efficiency o f efforts in the area o f emergency preparedness and management, for both IMMand the provincial government. 3. The Financial Department will monitor IMIP implementation progress and results against the agreed outcomes and performance indicators specified in Annex 3. To establish the framework for a reliable and objective system o f M&E, baseline data and information on the current conditions o f solid waste collection and disposal and maritime pollution will be collected by the Financial Department prior to the start o f project implementation. These baseline data will be usedto monitor the impact and benefits o f the project by comparing service conditions before and after IMIP implementation. 4. The results o f monitoring and evaluation activities will be reflected in quarterly and annual progress reports prepared by the Financial Department. These progress reports will cover performance and impact indicators, progress in the implementation o f works and/or 36  delivery of goods and services, training and studies, as well as the use of project resources under the project. The report for the fourth quarter of each year will be prepared in the form of an annual report that will summarize the results achieved during the year and provide a work planand budget for the following year. 5. A Mid-Term Review (MTR) of the project will be conductedby mid 2009, or two years after the expected commencement of IMIP implementation. The Financial Department would prepare a detailed mid-termreport to serve as the basis for the MTR. The MTR will review the actual implementation performance of each of the project components, identify the reasons for possible delays and poorer than anticipated results and, if advisable, agree with IMM possibly required changes in the investment programs and reallocation of loan proceeds. The World Bank would conduct regular supervision missions about once every three months, during the initial years of IMIP implementation. The Financial Department will also help prepare the IMM contribution to the World Bank's IndependentEvaluationReport. 37  U  Annex 7: FinancialManagementand Disbursement Arrangements A. Summary of FinancialManagementArrangements 1. The project will be implemented by the Metropolitan Municipality o f Istanbul (IMM). The Financial Operations Department (FOD) (Mali Hizmetler Daire Baskanligi, formerly known as Hesap Isleri Daire Baskanligi) o f IMM will be responsible for the financial management o f the project. The staff working at the FOD have not worked with World Bank procedures. However, they are very experienced in the Government financial management procedures and have good English language skills. IMM is also very experienced in working with other international financial institutions and commercial banks. 2. An assessment o f the financial management arrangements for the project was undertaken in October 2006 and updated in March 2007. Current financial management arrangements for the project are satisfactory to the Bank. 3. The overall financial management risk for the project is substantial before mitigation measures and with adequate mitigation measures agreed, the financial management residual risk i s rated moderate. Country Issues. 4. Until 2001-02, public financial management in Turkey was based on an outdated legal framework. Enactment o f the Public Financial Management and Control (PFMC) Law in2003 was a defining moment for public financial management in Turkey. The law articulates a modem view o f performance oriented public sector management. It clarifies the nature of ministers' and officials' accountability to the public by strengthening public expenditure and financial management processes in line with EU practice. Full implementation o f the PFMC at the central government agencies as well as local governments, however, still represents a major challenge. 5 . The Ministry o f Finance regulation 25839 dated June 8, 2005 has laid out the budgeting and accounting principles for the general government institutions. This regulation i s supported by the Local Administrations Budgeting and Accounting Regulation published by the Ministry o f Interior (Regulation 26104) on March 10, 2006 for the municipalities. The regulation 26104 prescribes a code o f accounts, recording principles and a set o f tables that are required to be used for budgeting, management information and year end reporting. Risk Analysis 6. The overall financial management risk for the project is substantial before mitigation measures, and with adequate mitigation measures agreed, the financial management residual risk i s rated moderate. The Table below summarizes the financial 39  management assessment and risk ratings o f this project. A summary o f the risk assessment for the project i s as follows. FM Risk Rating Risk Mitigating Measures Risk Rating after incorporated into project design Mitigation Measures investment planof IMM investment plan. Accounting. Project Substantial The project accounting will be Moderate accounting is not yet integrated into the IMP accounting integrated into IMM system once the projectcomponents are accounting system agreed upon. Internal Controls. The Substantial Internal control procedures for the Moderate draft project financial financial management of the project management manual is will be established and documented in not vet Dreoared the FM Manual. IMM has submitted i l l the draft FM manualto the Bank. Funds Flow Moderate Moderate FinancialReporting. Moderate Moderate Auditing Moderate Moderate Overall Control Risk Substantial Moderate Overall FM Risk Substantial Moderate Strengths. 7. The significant strength that provides the basis o f reliance on the project financial management system i s that Metropolitan Municipality o f Istanbul (IMM) has a computerized financial management system that i s in compliance with the Local Administrations Budget and Accounting Regulation and the project accounting will be integrated into this system. WeaknessesandAction Plan. 8. The financial management environment of IMM includes deficiencies described in the assessment below and IMM should take immediate action to address these. The following action plan i s proposed to address the deficiencies in the IMM financial management environment. 40  Action Deadline The budgeting requirements for the project Board Condition will be finalized and related approvals will be obtained. Project financial management manual will Board Condition be prepared. Project accounting will be integrated into July 15,2007 IMMaccounting system IMMwill establish a modern internal audit December 31,2007 department ImplementingEntity. 9. The project will be implementedby IMM. Its staff had only limited exposure to Bank projects inthe past and therefore there i s a need for capacity building in World Bank procedures to be undertaken for the project implementation group that i s yet to be established. The Financial Operations Department o f IMM will be responsible for the financial management o f the project. The staff working at the Financial Operations Department are not experienced in World Bank procedures. However, they are very experienced in the Government financial management procedures and have good English language skills. IMM also has relations with international financial institutions and commercial banks. 10. IMMwill prepare a financial management manual that will describe the financial management arrangements o f the project. The manual will cover: (i)the organization o f the financial management and job descriptions; (ii)disbursements and related internal controls; and (iii)work flows. The financial management manual will be expanded to include more information on: (i)the financial and accounting policies and procedures for the project; (ii)the financial management information system; (iii)project reporting; and (iv) project budgeting and planning procedures. 11. Istanbul Municipality i s administered through a two-tier local government system that consists o f the IMM at the top level and 32 District Municipalities at the lower level. The PFMC law enacted in 2003 articulates a modern public financial internal control framework both for the central government agencies and the local governments. The Ministry of Interior has published Local Administrations Budgeting and Accounting Regulation (Regulation 26104) on March 10, 2006 for the municipalities. The regulation 26104 prescribes a code o f accounts, recording principles and a set o f tables that are requiredto be used for budgeting, management information and year end reporting. IMM i s one o f the first municipalities to apply the requirements o f the Regulation 26104 and has developed in-house accounting system that i s in compliance with the Regulation. IMM i s also currently enhancing its internal control systems through revising the formal internal procedures to comply with these changes as well as commencing with the establishment of a modern internal audit department, One o f the pillars o f PFMC was enhanced external audit by Turkish Court o f Accounts (TCA) which would include financial audit o f IMM. The draft TCA Law which authorizes the TCA to carry out financial audits of 41  municipalities i s currently in the Parliament and therefore currently IMM i s not subject to any external financial audit requirements. When IMM i s subject to TCA financial audit, the financial statement audit report together with the management letter will be providedto the Bank. 12. IMIP will be the first World Bank fundedproject that will be implementedby IMM and even though IMM i s a well established, high capacity institution it currently lacks the familiarity with World Bank requirements and procedures. IMM staff has already started training in World Bank financial management, procurement, environmental safeguards and overall Bank operations. 13. The risk associated with the implementingentity is assessedas moderate. Budgeting. 14. IMM investment budget is prepared in line with its strategic plan and annual performance plan. The investments o f IMM however first have to be approved by its assembly prior to its approval by the State Planning Organization (SPO) where foreign financing i s involved. In cases where SPO approval was not granted before the year, Higher Planning Council decision i s requiredfor the proposed investments.The budget for IMMshould beapproved by its assembly bythe 31st ofDecember. 15. The SPO approval for the investments proposed under the project is not comprehensive and there might be a need for Higher Planning Council decision for these investments. The project implementation will begin in 2008 and therefore IMM will integrate the project activities into its budget, as the one approved for 2007 by the IMM assembly does not reflect the investmentsproposed under the project. 16. The risk associated with the budgeting is assessedas substantial. The task team is searching for the State Planning Organization letter o f confirmation indicating that the investmentsare included inthe investmentplan is beingobtained. Accounting. 17. Project accounting will be maintained by the FOD o f IMM.FOD o f IMM has five sub-departments; Budgeting, Income, Expenditures, Financing and Financial Control. IMP i s currently using a computerized Oracle based financial management system that i s in compliance with the Local Administrations Budget and Accounting Regulation. The current program used by IMM i s developed in-house and facilitates the integration o f the project accounting into the main system. 18. Accounting procedures for the project will be set out in the project financial management manual. 19. The risk associated with accounting is considered as modest. IMMwill work on the integration o f the project accounting into its main system once the project components and sub-components are finalized. 42  Internal Control and Internal Auditing. 20. There is currently not an internal audit department (IAD) which undertakes regular audits o f the internal controls within IMM and therefore no reliance will be placed on internal audit at the beginning o f the project However IMM as a part o f the Financial Management and Control Law which requires internal audit departments to be established at Government institutions including the municipalities has to establish an IAD. The Ministry of Finance department responsible for the coordination of government internal auditors has started a training program in February 2007. Two staffs from IMM are currently attending these programs and IMM i s formerly planning to establish the IAD after the completion o f their training. They expect that four staffs will be formally trained and the internal audit department will have 20 staff, IMM i s committed to establish its Audit Department before December 31, 2007. 21. IMMhas recently documented its internal control procedures for each department under a working principles manual. The working principles manual is currently pending approval o f the higher management. 0 The capital expenditures o f IMM are quite significant and the internal control procedures relating to the capital expendituresare as follows: 0 The procurement procedures are conducted by relevant technical departments in accordance with the Public Procurement Law. IMM sets up a control approval commission for the procurement of goods and works. This commission i s responsible for certifying that the goods or works procured fulfill the technical specifications detailed inthe bidding documents. 0 Once the procurement process i s completed, the documents are submitted to the Financial Control department for payment. The FOD i s responsible for checking that all authorized names and signatures o f a particular technical department are complete. 0 The FOD than makes the payment through bank payment orders and the transactions are entered into the accounting records. 22. IMMhas documented the internal control procedures specific for the project inthe project financial management manual. IMMinternal control procedures are comprehensive and cover the above procedures. However in order to strengthen internal controls further and to minimize the risk o f misuse or fraud with respect to financial management the following ways will be detailed in the project financial management manual and will be subject to regular compliance checks by the IAD once it becomes functional. The Financial Department will make the payments to contractors only after verifying that the invoices and other payment documents contain all technical approvals that are required and after verifying that the payment requests are line with the contracts. 0 The payments will be executed by a different person from the one who authorizes them; the verification will be done by the technical departments following the IMM 43  internal procedures which requires verifying the goods purchased or the works done including physical inspectionand the payment will be done by the FOD. 0 The staff responsible for the project bank account will prepare and document bank reconciliations on a monthly basis. The reconciliation files will be supervised and signed by the Head o f Financial Department (or his designated deputy) on a quarterly basis. The project FM team will prepare checklists for required documentation for each type of transaction. These checklists will also be attached to the Financial Management Manual. The Head o f the Financial Department (or his designated deputy) will supervise that full supporting documentation i s provided for each transaction. 23. The risk associated with internal control is assessed as moderate. IMM has prepared the draft financial management manual for the project and the internal control procedures will be further detailed in the project financial management manual during the life o f the project. Funds Flow and DisbursementArrangements. DisbursementArrangements. 24. Designated account: IMMwill open and maintain a Designated Account (DA) in Dollars at an acceptable commercial bank. The DA will be used following procedures to be agreed with the Bank, and will have a ceiling of $33 million. Two signatures indicated in the list of authorized signatures submittedby IMMwill be required on the withdrawal applications. The minimum application size for payments directly from the Loan Account or for issuance o f Special Commitments i s $6.6 million. Applications for replenishmentof the DA will be submittedto the Bank on a monthly basis, or when the balance of the DA i s equal to about half o f the initial deposit or the authorized allocation, whichever comes first, and will include a reconciled bank statement as well as other appropriate supporting documents. 25. Use o f statements o f expenditure (SOEs): Disbursements will be made against SOEs for: (i)goods costing less than $1 million equivalent per contract; (ii) costing works less than $10 million equivalent per contract; (iii) consulting contracts with firms, costing less than $ 450,000 equivalent each; and (iv) consulting contracts with individuals, costing less than $ 100,000 equivalent each. Full documentation in support o f SOEs would be retained by IMM for at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made. This information will be made available for review during supervision by Bank staff and for annual audits that will be required to specifically comment on the propriety o f SOE disbursementsand the quality o f the associated record-keeping. 26. Utilization of Loan Proceeds: IMM will finance US$14.0 million of the total project cost. The Bank loan will thus finance about 96% o f the total project cost (including VAT). 44  27. Retroactive Financing: Not applicable. Category YOo fExpenditure to be financed Allocation 1. Goods (including supply and installation) II 42*0 I1 100% 2. Works 280.0 100% I ~ 2. Consulting services 0.15 100% 3. Front-end Fee NA NA Total 322. 15 The risk associated withfundsflow is considered as modest. Financia1Reporting. 28. IMM will maintain records and will ensure appropriate accounting for the funds provided. Financial statements for the project will be prepared by IMP. The interim un- audited financial reports (IUFR-also referred to as the Financial Monitoring Reports - FMRs) will be prepared on a quarterly basis and will be submitted to the Bank no later than 45 days after the end o f the quarter. The format and the contents o f the IUFR have beenagreed with the Bank. The IUFR will includethe following reports: 0 Expenditure Tables, 0 Special Account Statement, 0 Procurement Tables, 0 Output Monitoring Reports. 29. The draft financial management manual of the project includes a section on the IUFRand formats of these reports are detailed there. 30. The risk associated with reporting and monitoring is assessed as moderate. The Bank and IMMhave agreed on the formats o f the IUFR. Auditing. 31. IMM is subject to Turkish Court of Accounts (TCA) audit on an annual basis. However TCA does not prepare an annual audit report but carries investigations on a case by case basis where they have detected non-compliance with the procedures. Therefore there are not any TCA reports available for review. 45  32. The project will not form a significant part of the financial statements of IMM.The capital expenditures o f IMMinthe year 2005 amounted to nearly US$975 million and the project will finance expenditures o f US$276 million over five years. The project also does not have a capacity building component and major financing i s for the procurement of goods and works. Therefore the annual financial statements o f IMMwill not be subject to an independentaudit untilthe TCA law i s enacted. 33. There are no legal requirementsfor the audit o f IMMaccounts. There is currently a draft TCA Law that i s in the Parliament and once it i s enacted IMM annual accounts will be subject to financial audit by TCA. When IMM is subject to TCA financial audit, the financial statement audit report together with the management letter will be provided to the Bank. 34. IMM will prepare annual project financial statements and the project financial statements will be subject to annual audits by the Treasury Controllers. The Terms o f Reference o f the annual audit o f the project financial statements acceptable to the Bank, have been expanded to cover the verification o f the existence and functioning o f the assets purchased through project funds. The auditors will also verify that the assets purchased remain the accounting records o f the IMM. 35. The annual audited project financial statements will be provided to the Bank within six months o f the end of each fiscal year and also at the closing of the project. 36. The following chart identifies the audit reports that will be requiredto be submitted by the project implementationagency together, with the due date for submission. Audit Report Due Date Entityfinancial statements N/A Project financial statements (PFS), Within six months of the end of each fiscal year and including SOEs and SpeciaUdesignated also at the closing o f the project account and expanded audits. The PFSs include sources and uses of funds by category, by components and by financing source; SOE statements, Statement of designated account, notes to financial statements, and reconciliation statement. 37. The risk associated with auditing is assessed as moderate. The expanded audit TOR ensured that the audit o f the Treasury Controllers will cover the existence and functionality of the assets purchased through project funds. Supervision Plan. 38. During project implementation, the World Bank will supervise the project's financial management arrangements as follows: (i) during the World Bank's supervision missions, financial management and disbursement arrangements will be reviewedto ensure compliance with the Bank's minimum requirements; (ii)project's quarterly interim 46  unaudited financial reports as well as the project's annual audited financial statements and auditor's management letter will be reviewed. As required, a World Bank-accredited Financial Management Specialist (FMS) will assist in the supervision process. The FMS will follow-up the compliance with the action plan before board presentation, and the first on-site supervision will be within the six months o f the project effectiveness. 47  Annex 8: Procurement Arrangements General A. Procurement General. Procurement under the project will be carried out in accordance with the Bank's "Guidelines: procurement Under IBRD Loans and IDA Credits" dated May 2004, and "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" dated May 2004, and the provisions enumerated below and stipulated in the Legal Agreement. The agreements covering procurement methods and thresholds have been determined for Turkey according to its capacity and experience with World Bank's ECA Region Thresholds for procurement methods effective from January 9, 2007. The procurement agreements have been appraisedand detailed in the procurement plan for the Project summarized below. The General Procurement Notice i s to be issued on or about June 1,2007. Goods and Works and Non-consulting (Technical) services Procurement Procurement Method Threshold Prior Review Aggregate Method Threshold 1. ICB All 2. LIB All 3. NCB <$ 1,000,000 -goods First contracts of <$ 10,000,000 -works goods and works 3. Shopping <$ 100,000 -goods First contracts of <$ 100,000-works goods and works 4. Direct All Contracting b) Pre-qualification: Not applicable. c) Proposed Procedures for CDD Component: Not applicable. d) Referenceto Project OperationaYProcurement Manual: Not applicable. The works contracts to cost less than $10,000,000 per contract and the Goods manufactured within the country and readily available in the local market to cost less than $ 1,000,000 per contract may be awarded through National Competitive Bidding (NCB). Any ambiguity regarding predominance o f the World Bank's procurement rules below from paragraph (i) (xi) below shall to be discussed at the negotiations and made part of the Loan Agreement. 48  i)Eligibility Bidding shall not be restricted to domestic bidders. N o restriction shall be appliedto foreign bidderswho wish to submit a bid. ii)Procedures Invitations to bid shall be advertised inthe Official Gazette or in at least one widely circulated national daily newspaper or in an electronic portal of free access allowing a minimum o f 30 days for the preparation and submission o f bids. iii)Assessmentofthebidder'squalifications Where pre-qualification is not used, the qualifications of the bidder who is recommended for award o f contract shall be assessed by post-qualification, applying minimum experience, technical and financial requirements that shall be explicitly stated in the bidding documents and which shall be determinedby a `passifail' method. iv) Participation by Government-ownedEnterprises Government-owned enterprises in the Republic o f Turkey shall be eligible to participate in bidding only if they can establish that they are legally and financially autonomous, operate under commercial law and are not a dependent agency of the Government. Furthermore, they will be subject to the same bidandperformance security requirementsas other bidders. v) Participation by Joint Ventures Participation shall be allowed from joint ventures on the condition that such joint venture partners will bejointly and severally liable under the Contract. vi) BiddingDocuments Procuring entities shall use the Bank's sample N C B documents for ECA Region for Works and Goods and shall draft contract and conditions of contract acceptable to the Bank. vii) Bid Evaluation Evaluation of bids shall be made in strict adherence to the monetarily quantifiable criteria declared in the bidding documents and a merit point system shall not be used. Extension o f bid validity shall be allowed once only for not more than 30 days. N o further extensions should be requested without the prior approval of the Bank. Contracts shall be awarded to 49  qualified bidders having submitted the lowest evaluated substantially responsive bid. N o domestic preference shall apply under National Competitive Bidding. viii) Price Adjustment Works contracts o f long duration (e.g., more than eighteen (18) months) shall contain an appropriate price adjustment clause. ix) Rejectiono f All Bids All bids shall not be rejected and new bids solicited without the Bank's prior written concurrence. x) Contracts All contracts shall be in writing, signed and stamped by authorized signatories o f the Purchaser and the Supplier and contain identical terms and conditions o f contract to those included inthe tender documents. xi) Securities Bid Securities should not exceed 3 % (three percent) o f the estimated cost o f the contract; Performance Securities not more than 10 % (ten percent). No advance payments shall be made to Contractors or Suppliers without a suitable Advance Payment security. The wording o f all such securities shall be included into the bidding documents and shall be acceptable to the Bank 50  1 2 3 4 5 6 7 8 9 Ref. Contract Estimated Procure P-Q Domestic Review Expected Comments No. (Description) cost ment Preference by Bank Bid- Million USD Method (yedno) (Prior / Opening Post) Date Works ~~~ 1Urbantransformation 100.0 NCB No N o Prior 912007 selectedpilot projects (multiple contracts ) Closureof Wild Dumps 80.0 NCB Post 312008 Additional (multiple $30 million contracts) will be financed by IMM Strengthening of Municipal services 100.0 NCB Post 612008 Infrastructure (multiple contracts) fi I I Subtotal Works 280.00 Subtotal Goods 42.00 (b) All ICB and all direct contractingwill be subject to prior review by the Bank. 2. Consulting Services Selection o f Consultants a) Prior Review Threshold: Selection Decisions subject to Prior Reviewby Bank as stated in Appendix 1 to the Guidelines Selection and Employment o f Consultants. 51  Selection Prior Review Number of Selection Method Method Threshold Contracts Threshold (USD) Subject to Prior (USD) I 1 Review All contracts 1 Quality and Cost Based 1above $350,000 Selection (QCBS) 350,000 and first two QCBS contracts All contracts Least Cost Selection (LCS) 350,000 above $350,000 and first two LCS contracts Selection Based on First contract is Consultant's Qualification < $200,000 subject to prior (CQS) review Single Source Selection (SSS) All contracts All contracts Individual Consultants 100,000 above $100,000. All sole source contracts. b) Short list comprising entirely of national consultants: Shortlist o f consultants for services, estimated to cost less than $ 200,000 equivalent per contract, may comprise entirely of national consultants in accordance with provisions o f paragraph 2.7 o f the Consultant Guidelines. c) Any other SpecialSelectionArrangements: Not Applicable d) ConsultancyAssignmentswith Selection Methods and Time Schedule I 1 1 1 2 3 4 5 6 7 Ref. Description of Estimated Selection Review Expected Comments No. Assignment cost Proposals Million (Prior I Submission USD Date EngineeringDesign and Const supervision for the retrofittingof service 4.50 infrastructure* EngineeringDesign and Const supervisionfor the 2.50 NON BANK 1 waste transfer stations* FINANCE EngineeringDesign and Const supervisionfor 2.50 PPP NA NON BANK Closure o f Wild Dumps * FINANCE Municipal Seismic NON BANK RedevelopmentPlan * 2.0 FINANCE Pilot urbantransformation 2.50 NON BANK 52  studies* FINANCE Audit o f Project Accounts 0.150 LCB Prior 412008 - SubtotalB 14.15 SUB TOTAL A+ B 336.15 PPP: Public Procurement Procedures (*): The contract will be financed by IMM'sown sources. B. Assessment of the agency's capacity to implementprocurement An assessment of the capacity of IMMto implement procurement actions for the project has been carried out. The assessment reviewed the organizational structure for implementingthe project. Based on the discussions held by the task team and the Treasury, IMM, State Planning Organization (SPO), the project components will be implementedand coordinated by IMM through its Financial Department. The key issues and risks concerning procurement and management for implementation of the project have been identified and include lack of experience with World Bank-financed projects. The IMM staff will be trained by World Bank staff on procurement knowledge and qualifications and contract management. A procurement training session has already beenheldinFebruary, 2007. It is recommended that this project be placed initially in the moderate to high risk category. The risk rating will be re-evaluated after one year o f loan effectiveness and adjustments made accordingly. During the project launch workshop the World Bank will organize a two day training program for IMM staff to provide further training on the World Bank's Guidelines and standard biddingdocuments to be usedinthe implementation o f the project. C. ProcurementPlan The Borrower, at appraisal, developed a procurement plan for project implementation that provides the basis for the procurement methods. This plan has been agreed on February 21, 2007 and i s summarized. It will also be available inthe project's database and inthe World Bank's external website. The Procurement Plan will be updated in agreement with the Project Team bi-annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. D. FrequencyofProcurementSupervision Contracts not subject to World Bank's prior review will be post reviewed by World Bank supervision missions and/or duringregular post-reviews by PAS on sampling basis, Le. 1 53  out o f every five contracts. The frequency o f procurement supervision should be every six months inthe first year o f implementation. 54  Annex 9: Economicand FinancialAnalysis FinancialAnalysis 1. During 2005, the budgetary resources of IMM were derived from three different sources: tax revenue, non- tax revenue and borrowing. O f the total revenue o f US$1,949 million equivalent, tax revenue provided 78%. About 98% o f this amount representedthe municipality's share o f Government taxes as provided for by statutes and the balance o f 2% was derived from municipal own-source taxes. Non-tax revenuewas about 17% o f income mainly in the form o f revenue from municipal services. The balance o f budgetary resources (5%) came from local borrowing. The municipality's total revenue has increased by about 100% during the last two years. However, this increase was accounted for by an increase in the municipality's share o f Government tax, which increased from 59% o f revenue in 2003 to 76% in 2005. The municipality's own revenue remained static during this period and as a result its proportion of total revenue fell from 41% in2003 to 25% in 2004 and 19% in 2005. 2. During 2005, US$482 million (25%) o f income was usedfor current expenditure in operating municipal services. Personnel costs represent about 45% o f this expenditure. US$385 million (20%) was transferred to participating municipalities and semi- autonomous municipal entities largely for unforeseen emergencies or maintenance and social services. New construction and major repairs represented at US$994 million or about 50% o f expenditure. Debt service was US$148 million (8%). The debt service coverage was about ten times. There was a deficit o f about 3%. The municipality has operated well within its budget during 2004-05, 3. The municipality operates a mixed cash and accrual accounting, and some improvements in this area have been implemented in recent years. The Public Administration and Control Law o f 2004 required that municipalities gradually introduce full accrual accounting and long-term budgeting. IMM plans to implement accrual accounting by the end o f 2007. While this should improve the control system, there i s a need for further development o f its management accounting system to provide for proper financial control which i s essential for the management o f a major city like Istanbul with an annual budget o f about US$ 2 billion equivalent. The IMM's accounts are audited annually by the Turkish Court o f Accounts. 4. IMM is dependent on the allocation of government tax revenue and this dependence has increased recently, with funds from this source increasing from 59% o f total revenue in 2003 to 67% in 2004 and 76% in 2005. This increase has resulted mainly from an increase inthe percentage o f funds allocated to the city to reflect the extension o f the city's boundaries and the general increase ingovernment tax revenueresultingfrom the 6.6% expansion o f the economy in 2005. The fact that the central government establishes tax rates, collects taxes, and distributes proceeds to the municipalities, places limits on IMM's budgetary flexibility. However, this is off set to some extend by the fact that the allocation o f a proportion o f government revenue to municipalities i s governed by statute and so i s not subject to annual appropriations by Parliament making this a reliable source 55  o f income for municipalities. IMM's own resources consist o f a limited tax base and charges for services provided and rent o f property. 5. IMM'soperating ratio is low, ranging from 22% to 25% during 2003-2005, as the major part of it expenditures involves discretionary allocations covering capital investment and transfer payments to other municipal entities. The major fixed cost i s labor, which accounts for about 10% o f expenditure. This cost has risen substantially in recent years, increasing by 29% in2003, 18% in2004 and 35% in2005. This increase i s entirely due to increased labor rates as there has been a continuous decrease in the number o f employees since 2000 representing a 20% decrease in the five year period. The balance of the operating expenditure covers the cost of materials and services. 6. Between 20% and 29% of IMM's expenditure involved transfer payments to municipal utilities during the period. These payments cover investment in capital of municipal enterprises, assistance to subsidiary municipals and aid to students and syndicates. IMM's major expenditure consists o f its capital investment program which absorbed 62% o f its expenditure in 2003, 42% in 2004 and 51% in 2005. The program covers real estate acquisition, project studies, infrastructure construction, and major repairs and maintenance. 7. Debt service expenditure ranges from 4% in 2003 to 8% in 2008. As IMM has a very low operating ratio its debt service coverage ratio ranged from 9 times in 2005 to 20 in 2003. Since 2002, the city has servicing its debt on schedule without recourse to Treasury. Turkish law limits Istanbul's debt burdento 150% o f total revenue and requires Treasury approval if refinancing in any year exceeds 10% o f revenue. Treasury approval i s also required if Istanbul seeks to issue foreign currency denominated bonds. Overall, Istanbul's direct debt in 2005 was a fairly low at 12.3% o f revenues while tax-supported debt was 40% o f revenues, significantly down from the 1998 level o f 170%. The city's debt maturity profile i s also satisfactory. 8. IMM'sfinancial performance over the pastthree years has beensatisfactory leaving it with a favorable debt profile and a moderate debt service requirement. Improvements are requiredin the financial and management accounting area to increase transparency and provide the necessary information for management control. 9. IMM'sbudgeted accounts for 2006 show a marginal decrease intax revenuebut a 60% increase in municipal non-tax revenue resulting in an overall revenue increase o f 12%. Giventhe projected economic growth and inflation rates the overall target should be achieved. Operating expenditure i s projected to increase by 18% to 26% o f total expenditure. This represents a 1% increase compared to 2005. This increase i s modest given the recent expansion o f the city's area. Allocations for transfer payments and capital investment is inline with the 2005 level. 10. IMM's projections for 2007-2008 show a modest rise in total income from government and own resources o f about 5% per annum. However, a substantial increase in borrowing i s projected rising from US$170 million equivalent in 2006 to US$527 million in2007 and US$559 million in2008. 56  11. Operating expenses are projected to increase by about 6% per annum. The major part o f the will be used to increase transfers to associated municipalities and utilities, expand IMM's own capital investment program, provide for debt service and to increase reserves. IMMwill continue to be in a strong position to meet its debt service obligations as less than 30% o f its revenue i s requiredto meet its operating expenses. 12. Substantial investments have been made in recent years in improving roads, water supply and wastewater facilities. However, major infrastructure investments are now required in other areas particularly for expensive retrofitting o f existing structures, specifically for all private and public buildings, which i s required to bring city earthquake preparedness up to acceptable safety standards. Preliminary estimates o f the cost o f earthquake preparedness are in the region o f US$lOO billion. To meet those future financial requirements, IMMwill have to increase its borrowing inthe near future. 57   ECONOMIC ANALYSIS 13. The second project objective is to strengthen the municipal services o f the Istanbul Metropolitan Municipality (IMM) and increase its preparedness for expected large earthquakes by retrofitting key municipalfacilities infrastructure. 14. In order to meet its objectivesthe projecthas a number of components such as: 0 To prepare a detailedrisk assessment for all major municipal systems; 0 To prepare a Municipal InfrastructureRisk Mitigation Plan; 0 To retrofit selected key building, fire stations and municipal infrastructure;and 0 To provide needed equipment. 15. Further, and to meet the same objective of mitigating risk and expected damage the project will undertake a pilot urbantransformationprogram with two components: 0 Pilot urban transformation feasibility studies; and 0 Selected urban transformation priority investments. Costsof the EarthquakeMitigation Measures 16. The cost o f the former four components, aggregated as Component B, is estimated at US$ 130 million, and the cost of the pilot transformation program, aggregated as Component C, is estimated at US$ 100 million. The combined cost of Components B and C is thus US$230 million. Benefits of the EarthquakeMitigation Measures 17. The benefits o f the earthquake mitigation measures (EMM) are to avoid or mitigate the costs o f earthquake. Such costs comprise (i) direct earthquake damage; (ii) disruption of economic activities; and (iii) the loss of life and the suffering that earthquakesbring. 18. It is possible to provide a sense of the economic value o f the damage that investments under the EMM would help mitigate or avoid. An assessment carried out by JICA estimates that the probability o f an earthquake affecting the Istanbul region within 10 years is 32% (+/- 12%) and within 30 years 62% (+/- 12%). Assuming that Istanbul will retain its rough 23% share of Turkey's total GDP; that annual GDP growth will be 3.3%; and that the damage from a future Istanbul earthquake will be 2.5% of total GDP (in line with the estimate for the 1999 Izmit earthquake that struck 60 km from Istanbul) one can then approximatethe present value o f the damage from an earthquake within 10 years and 30 years, respectively, as shown inthe table below. 59  Year GDP Damage Earthquake Probability Discount PV damage Damage factor 2004 270 2012 350 @,2.5% 8.8 0.32 0.62 1.75 billion 2032 670 @2.5% 16.8 0.62 0.08 0.83 billion Legend: The discount factor assumes an annual discountrate o f 10% in constant prices, calculatedfrom the currentyear, i.e. 2007. The presentvalue (PV) damage is the discount factor multiplied by the earthquake damage in the year of occurrence o f the earthquake. 19. It can be seen that an earthquake within 10 years from the JICA assessment of the year 2002 is by far the most damaging quake as measured by the direct economic damage that can be roughly estimated at US$1.75 billion, or US$1,750 million. EconomicAnalysis of Solid Waste Component 20. The principal aim o f the economic analysis is to assess whether the proposed project would provide the least cost intervention to reach the goal o f ending wild dumping and reducingthe risk o f illegal discharge of ship borne wastes. Furthermore, the analysis sought to develop a quantifiable sense ofthe value of avoided damage. 21. The methodology adopted for the economic analysis of the solid waste component (Component A) is discounted cash flow technique. Future costs and benefits are projected in line with the revenue and expenditure patterns along with the investment costs specified for the proposed project. The discount rate at 10% is believedto appropriatelyrepresent the opportunity cost o f capital. Assumptions for "Without Project" Case 22. Net sales, operating and maintenance expenditures and net profit figures of ISTAC are assumedto grow in line with the increased service volume characterized by the growth o f population (3.8 % per annum). The net profit margin over the analysis period is assumedto be 15%. 23. ISTAC maintains its service level by expansion investments at a rate equal to the growth of the population. In addition to the expansion investments, ISTAC undertakes annual replacement investments in amounts equal to the annual depreciation of fixed assets. 24. Given the above assumptions, the forecast o f ISTACs basic financial indicators i s presented in Table 1. 60  Table 1: Proiected basicfinancialindicators (in US$ million) PARAMETER 2003 IACTUAL1 2004 ZOOS 1I 1[2006 I2007 I FORECAST 2008 12009 I 2010 I2011 I 2012 Net Sales 439 545 7 2 1 Operation and Maintenance Expenditures 3 0 2 4 0 1 478 lvet Profit Margin 26% 20% 33% 15% 15% 15% 15% 15% 15% 15% Net Profit 1 1 2 1 0 8 236 Net Working Capital 114 222 4 3 4 4 4 9 4 6 6 484 50 2 52 I 54 I 562 Net Working Capital as % Net Sales 26% 41% 60% 60% 60% 60% 60% 60% 60% 60% Change in Working Capital I O 8 21 2 1 5 1 7 1 8 I 8 1 9 2 0 2 1 127 132 137 1421 1481 1531 159 20% 20% 20% 20% 20% 20% 20% 2 5 2 6 2 7 2 8 3 0 3 1 3 2 102 106 110 114 118 123 127 3 0 3 1 3 3 3 4 3 5 3 7 3 8 Assumptions for "With Project" Case 25. ISTAC would undertake the investments presented in Annex 4 to improve waste management in Istanbul. The construction/installation period covers mid-2007to mid-2009 at equal annual investment volumes. The facilities will become operational as of mid-2009and are assumed to have a useful life of 20 years. 26. The envisaged measures would improve environmental management in the Greater Istanbul area but would for the most part not result in direct financial returns. The only direct revenue generation resulting from the proposed investments are the tariff revenues to be obtainedfrom the marinewaste collection and emergency response vessels. The current tariffs for marine waste collection services in Turkey are established by a communiquejointly announced by the Ministry of Transportation and Ministry of Forestry and Environment (Official Gazette No. 26284, 09 September 2006). Based on that an average tariff of US$ 50/m3 is assumed for marine waste collection services. The annual waste collection capacity of the vessels is assumed to be 75,000 m3/year. 27. Two possible means of indirect revenue generation resulting from the project are waste recycling facilities at the transfer stations and gas utilization units at the landfill sites. In this analysis, however, no such revenues are assumed. Total annual operating and maintenancecosts of the project components are assumed to be 5% of the total investment costs. Specific waste generation in Istanbul is assumed to be 0.9 kg/capitdday. 28. The EnvironmentalManagement Component benefits will include an end to or a high level of control of the water, land, and air pollution associated with wild dumps. However, full valuationof benefits would require hydrologic mappingthat could not be economically undertaken during project preparation, given that both Turkish law and accepted international practice call for control of solid waste. The value of benefits comes from a small proportion of those that can easily be measured and a large proportion for which only qualitative evaluation is feasible. The mix of benefitsfrom a national program that fully complies with EU Acquis requirements is documented in the report TheBenefits of Compliancewith the Environmental Acquisfor the Candidate 61  Countries3. In that report, the annual benefits to Turkey of full compliance with EU environmental standards are calculated to be equivalent to Euro 50 and Euro 233 per capita as the low and high values, respectively. The waste sector would account for around 2.5% and 12.4% of the low and high values (Euro 1.2 and Euro 29 per capita), respectively. The investments under this project will help Turkey move toward that goal. Ecotec et al, 2001, downloadable at http://ec.europa.eu/environmentienlarg/pdf/benefit_long.pdf 62  Annex 10: SafeguardPolicy Issues 1. Components o f the lendingprogram that are likely to trigger safeguard policies are the rehabilitation and closure of existing landfills, and the earthquake preparedness retrofitting of selected buildings; but other components cannot be excluded. The conclusive identification o f investment objects under the project components (landfills, buildings etc.) and the decision on the nature and extent o f the necessary works will be based on feasibility studies and design work to be executed during implementation o f the project. Therefore at this stage the IMM has adopted Environmental Safeguards Framework and Resettlement Policy Framework acceptable to the Bank to review safeguards issues in the process o f decision-making, to conduct consultations and to include adequate measures into the implementation o f project components. 2. Safeguard policies that are likely to apply to the project are: (a) Environmental Impact Assessment (EIA) (b) Cultural Properties (c) Involuntary Resettlement 3. Environmental Impact Assessment. The Project has been classified with Environment Category FI; therefore all project (sub-) components will be screened to assess the need to perform some form o f environmental assessment. The procedures for screening and executing o f environmental assessments have been adopted by the IMM in the Environmental Safeguards Framework (ESF).The ESFmeets boththe requirementsof Turkish Environmental Review regulations and the World Bank Environmental Assessment safeguard policy (OP/BP/GP 4.01). The ESF will be reviewed by the Bank during the course o f Appraisal. The Bank will monitor adherence to the ESF as part of its supervision activities. 4. The Environmental Category o f the project is FI. The Environmental Category FI rating i s based on the fact that the investments under the project cannot be assigned a single environmental category. In addition, some anticipated investments have not yet been identified. In that case, the FI provides the flexibility to IMM to finance an Environmental Category A investment should that be necessary, subject to following the necessary safeguards. 5. The Environmental Assessment for the Environmental Management component of the project to clean up 28 illegal waste sites was undertaken inthe manner described inthe Environmental Framework. The Environmental Assessment was disclosed in country on February 5,2007 and inthe InfoShop on April 30, 2007. 6. The closure and rehabilitation of waste disposal sites with in most cases no containment measures will be o f great environmental benefit and remove or control an important risk o f surface water and groundwater contamination. 7. For the retrofitting o f buildings and infrastructure, key environmental issues include: (i)creation o f public nuisance in the nearby community, (ii)disruption of 63  municipal services normally provided, (iii) and noise, (iv) determination and sorting dust of reusable/recyclable material, (v) handling and disposal o f asbestos, products with asbestos (pipes, insulation, etc.), (vi) radioactivematerials (vii) transportation and disposal o f debris, (viii) sediment to sewerage systems (or non-point source runoff), and (ix) impact on buildings with architectural, historical or cultural significance. 8. The use o f innovative, minimally intrusive technical retrofitting solutions will be promoted. Only on a very limited scale will demolition and replacement (in the same location) be necessary for structures that do not qualify for retrofitting. Both types o f interventions have environmental impacts that are minor to moderate in scale, and very localized in extent. Impacts can be readily defined, mitigated and monitored. Project activities will take place in areas that do have cultural heritage values protected under local and national laws and practices. New construction (if required) may take place in urban areas with exiting populations and their uses/values will be taken into account. Retrofitting and new construction has been successfully carried out in the Istanbul area in the recent past (mostly with Turkish funding) without significant impacts. 9. In cases of retrofitting work on certain public buildings in Istanbul, the safeguard policy on Cultural Property may be triggered, as potentially some o f the publicly used facilities, important for emergency response activities, may turn out to either have cultural/historical value, be invery close proximity to such properties, or may be located in an overall historic area. Irreversible impacts are not anticipated given local ordinances and practices regarding cultural heritage protection. 10. Appendix C provides a generic environmental mitigation and monitoring plan for the retrofitting o f buildings and infrastructure. 11. The IMMhas prepared an indicative Environmental Assessment and Management Plan to identify potential environmental issues related to the project and support the preparation o f the Environmental Safeguards Framework. 12. Cultural Property. Turkish laws and practices are consistent with the World Bank safeguard policy on cultural property (OPN 11.03). There are no separate regulations for Istanbul Municipality. Cultural Property issues are likely to arise with the retrofitting o f existing buildings to include earthquake safety measures. Procedures to identify and address cultural property issues have been included inthe ESF. 13. Involuntary Resettlement (World Bank OP 4.12): The project does not trigger OP 4.12, Involuntary Resettlement, as all works anticipated to be funded by the project will take place on public land or within existing rights o f way. None o f these activities will entail any land acquisition, relocation o f population, or result in restricting the access o f individuals or communities to economic resources. Given the dynamic situation in the IMM,the results of plans or studies underway or to be undertaken, however, it is possible that the Municipality will request support for an investmentthat will require private land to be acquired or public land to be cleared. To enable the project to respond quickly and positively to such an eventuality, the IMMhas prepared a Resettlement Policy Framework satisfactory to the Bank that will ensure compliance with OP 4.12. There will be no 64  physical movement of people. In addition prior review of all proposed urban transformationinvestmentsunder Component C will be undertaken. 65  Annex 10.1:EnvironmentalSafeguards Framework SAFEGUARD REVIEW PROCEDURES 1. This Environmental Safeguards Framework defines the safeguards procedures that the Istanbul Metropolitan Municipality (IMM) will apply to sub-projects to be financed under IMIP regarding issues related to: (a) Environmental Impact Assessment (EIA) (b) Cultural Properties (c) Natural Habitats (d) International Waterways (e) Involuntary Resettlement A. ENVIRONMENTAL IMPACT ASSESSMENT Overview 1. All sub-projects to be financed under the project will be subject to an environmental review process by IMM utilizing the procedures described in this section (including selectedjoint reviews and clearances by the World Bank). These procedures incorporate Turkish regulatory requirements for Environmental Review (Regulations on Environmental Impact Assessment, Official Gazette, dated 16 December 2003, Number 25318 from the Ministry o f Environment and Forests (MoEF), hereafter the "Reg~lation")~and World Bank Environmental Assessment safeguard policy (OP/BP/GP 4.01). 2. The environmental assessment process is carried out to evaluate potential positive or negative impacts o f any proposed sub-project; to evaluate measures that must be taken to prevent or minimize potential negative impacts damaging to the human and natural environment (for example by site selection or mitigating measures at a given site); and for supervisiodinspection o f sub-project implementation. 3, The Turkish environmental impact assessment regulation classifies projects by environmental risk in a similar manner to World Bank EA policy (OP 4.01). However, there may be some cases where the resultant environmental risk assignment may differ. Therefore, in some cases it will be necessary for IMM to request additional information or request additional measures to be taken by the sub-project sponsors as a condition o f receiving World Bank funds. 4 This regulationis soonto be revised. When the revisedregulationis legally adopted, the procedures presented hereinmay be subject to revisioncontingent upon any changes prescribed inthe new regulation which may require modificationof the proceduresdescribedhere. 66  Procedures 4. The seven key elements involved in the EIA process are identified below and subsequently described in full detail: 0 Screening e EA Documentation e Public Consultation 0 Review and Approval 0 Disclosure 0 Conditionality 0 Supervision and Reporting 4.1 Screening 4.1.1 Inaccordance with Turkish environmental assessment procedures, MoEF i s responsible for initial sub-project screening. The IMM will review the documentation and screening decision to identify those cases where World Bank safeguards require additional due diligence. 4.1.2 Ifa sub-project is listedunder Annex Iof the Regulation, a full EIA report i s required and all subsequent EA procedures are managed by the main office o f MoEF in Ankara. Sub-projects screened as "Annex I"are comparable to a World Bank EA classification o f "Category A". While the World Bank requires Category A EIA reports to be prepared by an independent consultant not affiliated with the sub-project, this is not required under the Regulation. However, the Regulation does include an independent review o f the EIA by a MoEF-appointed commission which provides comparable peer review. 4.1.3 If a sub-project is listed under Annex I1 of the Regulation, IMM must submit a "Project Introduction File" (PIF) to the MoEF. The Istanbul office o f the MoEF evaluates the PIF to determine whether or not an EIA i s required. Ifthe local office determines an EIA i s required, all responsibility for subsequent EA procedures revert back to MoEF headquarters in Ankara. MoEF in Ankara may then at their discretion delegate EA procedural responsibilities back to the Istanbul office or retain it for itself. It i s important to note that the PIF itself often constitutes a brief though professionally-prepared environmental assessment o f the sub-project's environmental implications as well as key mitigation and monitoring requirements. For sub-projects that require an EIA Report, the IMM will be required to provide to the World Bank: (i)a copy o f the official MoEF "Environmental Impact Assessment Positive Decision" (i.e. official approval that the IMM can proceed with the EA process), (ii)an English language version o f the 67  Final EIA Report, and (iii)an Englishlanguage version o f the EIA Report Executive Summary. The World Bank may require some supplementary documentation in English ifthere are gaps inthe files submitted. For sub-projects that do not require an EIA Report, IMM will submit the PIF and formal MoEF Certificate o f "No Need for EIA [Report]" to the World Bank who will review the issues identified in the PIF and determine if IMMhas prepared an adequate environmental management plan (EMP) for mitigating and monitoring potential environmental impacts. Such sub- projects are generally comparable to a World Bank EA classification o f "Category B". 4.1.4 It is possible that, IMM determines that a sub-project for which the MoEF provided a decision o f "No Need for EIA" may still pose a reputational risk either to themselves or possibly the World Bank, and that greater due diligence i s needed over and above requirements o f the Regulation. IMM will consult with World Bank Safeguard specialists to ascertain if more rigorous analysis, equivalent to Category A under World Bank EA policy, i s appropriate. This situation i s anticipated to be exceptional. 4.1.5 For sub-projects not listed under Annex Ior Annex 11, the Regulation does not require any EA documentation. This i s normally equivalent to a World Bank EA classification o f "Category C". In a small number o f cases, the IMM may be required by the World Bank to prepare an EMP. The EMP may be patterned or substituted by a PIF if such documentation i s of sufficient technical quality to satisfy World Bank requirements. 4.1.6 As result of sub-project screening the following six alternatives emerge: EA procedures for each ofthese six cases can be somewhat different and are described inthe subsequent sections. Closure of WasteDisposal Sites Solid waste disposal sites at the scale that applies to the IMIP are not listed in Annex Iof the Turkish Regulation as an activity that requires the preparation o f an EIA. It i s enlisted in Annex I1 but without specification whether the inclusion applies to merely (new) waste disposal site operations or rehabilitation works as well. Closure o f waste disposal dumps projects to 68  be financed under the IMIP will be classified as Category `B' under the World Bank EA policy and will therefore follow environmental safeguard procedures that are in line with the Turkish Regulation for Annex I1 projects. Although not envisaged, in cases where for instance hazardous waste disposal would be encountered or waste disposal sites would require substantial extension in size, a classification as Category `A' could be possible. 4.2 EA Documentation 4.2.1 Under all Alternatives, unless otherwise specified, EA documentation i s the responsibility o f IMM. All EA documentation must include one or more maps at an appropriate scale showing project location, major natural features such as water bodies (rivers, lakes, etc.) areas o f cultural significance, parks and/or natural protected areas, population centers etc. The map(s) should note, to the extent possible, any other development activities underway or planned inthe near future. Alternative I: Annex I/Category A 4.2.2 The EA Report will be prepared in accordance with the EA outline or Format to be provided by the MoEF and in accordance with World Bank policy (as detailed in OP 4.01 Annex B-Content o f an Environmental Assessment Report for a Category A Project). The Turkish Regulation does not include a specific EA format for all projects. There i s a general format presented in Annex I11o f the Regulation. However, this is only to be used as a framework by the MoEF. Each project i s analyzed in terms o f its individual characteristics and based upon this evaluation and input from the public consultation (discussed below) a unique format i s provided to the sub-project sponsor for the specific project inquestion. 4.2.3 In those cases where the Turkish EA documentation requirement differs from the World Bank, the sponsor will prepare the TurkishEA document in accordance with the MoEF Format, and a separate Addendum with any supplemental information that may be required by the World Bank EA policy. The EA Executive Summary and World Bank Addendum are prepared inboth English and Turkishlanguages. Alternative 11: Annex I1positive EIA Decision/Category A 4.2.4 IMMfirst prepares a PIF inaccordance with the format presented inAnnex IV of the Regulation and then will be subjected to the same documentation requirementas discussed under Alternative I. 69  Alternative 111: Annex I1negative EIA Decision/Category A 4.2.5 IMM will submit to the World Bank a copy of the "No EIA Required" certificate. Since the Turkish government has no further EA documentation requirement, the sponsor will prepare an EA document in accordance with World Bank EA policy (as detailed in OP 4.01 Annex B-Content of an Environmental Assessment Report for a Category A Project). This alternative i s not anticipated to occur very often. Alternative IV: Annex I1negativeEIA Decision/Category B 4.2.6 IMMmay choose to submit to the World Bank a copy of the PIF and self monitoring form if it i s well preparedand contains sufficient technical detail regarding the mitigation measures and monitoring planthat will be followed during project implementation or IMM may choose to submit a separate EMP in typical World Bank format (See Appendix B). Before preparing any document, IMM should discuss the matter with the World Bank to agree uponthe type o f document most suitable. Alternative V: N o AnnedCategory B 4.2.7 IMMshould discuss with the World Bank Safeguard specialists as to what documentation would be most suitable. It i s anticipated the EMP format, as presentedinAppendix B, would be suitable for most situations. Alternative VI: N o AnnedCategory C 4.2.8 No action i s required. Closure of Waste Disposal Sites Closure o f waste disposal sites will as a rule fall under WB EA Category B, and Category A in special cases (see description in the Screening section), and an EMP for each closure/rehabilitation site would be a minimum requirement for EA documentation. Appendices A and B to this EMF provide further details for the preparation o f the EMP. 4.3 Public Consultation Alternative I:Annex Kategory A 4.3.1 According to Turkish Regulation, one consultation i s performedbefore any EA documentation is prepared. The MoEF is responsible for conductingthe public consultation. In fact, MoEF utilizes the outcome o f the public consultation to define the format for the EA document. World Bank EA policy requires two public consultations: the first, essentially the same as 70  the Turkish Regulation, to discuss the draft Terms o f Reference for the EIA report, and the second to discuss the draft EIA report itself. Therefore, for the Istanbul Municipal Infrastructure Project, the sponsor will be responsible for conducting the second public consultation to discuss the draft EA report. 4.3.2 For either public consultation, IMM should ensure that, as a minimum, the following information about the public consultation i s documented: Manner inwhich notification o fthe consultation was announced: Media(s) used Date(s), description or copy o f the announcement Date(s) consultation(s) was (were) held Location(s) consultation(s) was (were) held Who was invited pame, Organization or Occupation, Telephone/Fax/e- mailnumbedaddress(home and/or office)] 0 Who attended mame, Organization or Occupation, Telephone/Fax/e-mail numbedaddress (home and/or office)]. A relevant attendance list i s to be provided by the Istanbul Provincial Administrator's office o f the MoEF 0 Meeting PrograndSchedule 0 What i s to be presentedand by whom 0 Summary Meeting Minutes (Comments, Questions and Response by Presenters) 0 List of decisions reached, and any actions agreed upon with schedules and deadlines and responsibilities. Alternative 11: Annex I1positiveEIA Decision/CategoryA 4.3.3. The same public consultation requirements as presented under Alternative I are applicable under Alternative 11. Alternative111:Annex I1negativeEIA Decision/CategoryA 4.3.4 Since the Turkish government has no further EA responsibility, the two public consultations will be the responsibility o f IMM. Documentation requirementswill bethe same as indicatedunder Alternative I. Alternative IV: Annex I1negativeEIA Decision/CategoryB 4.3.5 Turkishgovernment has no responsibility. However, World Bank EA policy requires at least one public consultation which will be conducted by I M M . The PIF document can be used as a basis for the public consultation. If it is decided that an EMP i s to be prepared, than the public consultation can be conducted before the EMP i s prepared to establish environmental issues o f concern by affected groups, or alternatively the public consultation can be conducted after a draft EMP i s prepared to act as a basis o f discussion. In 71  either case, if significant environmental issues are raised at the public consultation, they shouldbe integratedinto the EMP. Alternative V: N o AnnexKategory B 4.3.6 As with Alternative IV, Turkish government has no further EA responsibility. The IMM together with the World Bank decide the appropriate EA documentation (EMP or similar). As was the case with Alternative IV, the public consultation can be conducted before the EA document is prepared to establishthe environmental issues of concern by affected groups, or alternatively the public consultation can be conducted after the draft EA document i s prepared to act as a basis o f discussion. In either case, if significant environmental issues are raised at the public consultation, they should be integratedinto the EMP. Alternative VI: N o AnnexKategory C 4.3.7 No public consultation i s required. 4.4 Review and Approval Alternative I:Annex II/Category A Alternative 11: Annex I1positiveEIA Decision/Category A 4.4.1 These two Alternatives require a preparation of a Turkish EIA. Under the Turkish Regulation, the MoEF is responsible for approving the EIA. IMM should have first obtained this approval (MoEF Positive Decision). As previously mentioned, IMM will provide the World Bank an English languagecopy o f the Turkish EIA ExecutiveSummary, the EIA report, and any World Bank Addendum. The World Bank will provide an independent review and approval. IMM is not permitted to provide a sub-proiect loan from the World Bank project until it receives an official approval letter from the WorldBank. Alternative 111: Annex I1negativeEIA Decision/Category A 4.4.2 Since the Turkish government has no EA documentationrequirement, IMM will preparean EA document inaccordance with World Bank EA policy (as detailed in OP 4.01 Annex B-Content of an Environmental Assessment Report for a Category A Project). IMM will provide the World Bank with an English language copy of the Turkish EIA Executive Summary and the full EIA. The World Bank will review and approve the document. MMI is not permitted to provide a sub-proiect loan .from the World Bank project until it receives an official approval letter from the World Bank. 72  Alternative IV: Annex I1negativeEIA Decision/Category B Alternative V: N o AnnedCategory B 4.4.3 IMM send the EA documentation (PIF or EMP) to the World Bank who will verify that all environmentalissues have been properly identified, and mitigation measures and associated monitoring are well defined and reasonable, with responsibilities for performing these functions clearly identified. Alternative VI: N o AnnedCategory C 4.4.5 No approvalof EA documentationi s required. 4.5 Disclosure Sub-projects Requiringand EIA Report (Alternatives I,11, and 111) 4.5.1 Alternatives I and I1 have prepared an EIA in accordance with the Regulation.A requirement of the Regulationis for MoEF to place the EIA on their website. In addition, IMMwill be requiredto disclose a hard copy of the EIA at the Istanbuloffice ofthe MoEF, and send a letter to the World Bank indicating the date of the disclosure. The World Bank will deposit the English language EIA Executive Summary, English language EIA document and Addendum at the World Bank Infoshop. IMM is not permitted to provide a sub-project loan using World Bank funds until the Turkish language EIA is disclosed in Turkev and the English language Executive Summary, EIA document and Addendum are disclosed at the WorldBank Infoshop. 4.5.2 Under Alternative 111, MoEF has no responsibility for the EA document. IMM will be required to disclose a hard copy of the EIA near the sub- project site, and send a letter to the World Bank indicating the date and location of the disclosure. The World Bank will deposit the English languageEIA at the World Bank Infoshop.MMI is not permitted toprovide a sub-proiect loan using World Bank funds until the Turkish language EIA is disclosed in Turkev and the English language Executive Summarv and - Addendum are disclosed at the World Bank Infoshop. Alternative IV: Annex I1Negative EIA Decision/Category B 4.5.3 Under Turkish regulationthe PIF is sent to the local government by MoEF who disclosesa hard copy o f the PIF near the sub-project site. Ifan EMP is prepared, IMMwill disclosethis document at the same location. 73  AlternativeV: N o AnnedCategory B 4.5.4. IMMwill disclose the EMP near the subproject site. AlternativeVI: No AnnedCategory C 4.5.5 N o disclosure requirements. 4.6 Conditionality 4.6.1 For all sub-projects requiring some form of EA documentation (EIA Report, PIF, EMP, etc.), namely Alternatives I,11, 111, IV, and V, IMMwill insure that the sub-project loan agreements include a commitment to obey the requirements set forth by the Turkish environmental regulations, as well as the measures specified by IMMand/or the World Bank. IMMis expected to exercise due diligence to ensure the sub-project i s implemented with the expected attentionto good environmental management. 4.7 Supervisionand Reporting 4.7.1 As part o f normal supervision activities, IMMwill ensure compliance with all environmental obligations specified in the loan agreement. IMM will coordinate with MoEF (Istanbul and/or Ankara offices, as appropriate) to ensure compliance. 4.7.2 IMM supervision reports will include a section on environmental management. Inthis Section, IMMwill verify whether or not environmental requirementsas specified inthe loan agreements have beenfollowed. Ifthis i s not the case, reasons for noncompliance should be elaborated, and recommendations for further action to ensure future compliance. For situations o f noncompliance, IMM i s required to implement corrective measures ina timely manner. B. CULTURAL PROPERTY 1. Turkish laws and practices are consistent with the World Bank safeguard policy on cultural property (OPN 11.03). Applicable Turkish legislation i s embodied in Law 2863 (dated 21.07.1983) on the Protection o f Cultural and Natural Resources (amended with Law Amending the laws on the Protection o f Cultural and Natural Resources and some other laws No: 5224 dated 27.07.2004 ), the Regulation on Researches, Drillings, and Excavations in Relation to the Cultural and Natural Assets, published in the Official Gazette No. 18485 on 10.08.1994, and The Protection o f Cultural and Natural Resources Law (Number 2863, dated July 23, 1983). There are no separate regulations for IstanbulMunicipality. 74  2. IstanbulMunicipality is responsible for application of these laws and regulations. There are two possibilities: (i) subproject located in a "designated" area, and (ii) a chance find. 2.1 Sub-proiect in a DesignatedArea 2.1.1 Istanbul has six regional councils, each regional council has seven representatives; five from the Ministry o f Culture, two from academia and one from the metropolitan municipality, one from the district municipality, and there are also other members depending on the related subjects representing those agencies., and each council has identified certain "designated" areas within its' jurisdiction that are culturally significant. If a sub-project i s proposed for one o f these designated areas, an approval from the regional council withjurisdiction over that area is all that is needed. The Ministry of Culture will bring in special workers to perform the necessary activities in the designated area and charge Istanbul Municipality accordingly. Regional councils are established for different types o f cultural properties, thus there are councils for "city walls", "coastal areas", etc. 2.1.2 The firm has to consult the municipality to know whether the site is in a designated area or not since the plans would already be approved, and there are maps in the municipality regarding the designated areas. If there i s a cultural or a natural asset in that designated area, the municipality directs the project developer to the related regional Board for approval. In order to get the approval from the Board for construction, the sponsor has to provide detailed projects (like restoration projects, etc). Since IMM i s the project owner, permitting and construction oversight o f the rehabilitatiordclosure o f wild dump projects, IMM should submit a plan to World Bank clearly identifying the safeguard measures to overcome the possible conflict o f interest issues and related QA/QC procedures. 2.2 Sub-proiect not within a DesignatedArea 2.2.1 If the project i s not in a designated area, the firm applies to the Municipal Construction Department for the approval o f construction no approval from any regional council i s necessary. If by chance, an historical article i s found duringconstruction, the Ministry o f Culture and Tourism is informed. 2.2.2 If construction i s conducted outside a designated area and something i s uncovered accidentally, then Turkish"chance find" procedures are ineffect: work i s stopped, the Ministry o f Culture (Department o f Museums and Archaeology) i s notified who in turn sends and expert to provide direction on how to proceed with the activity. 75  2.2.3 The EMP will include appropriate obligations in both mitigation and monitoring plans for construction either in a "designated area" or to address chance find events. C. NATURAL HABITATS IMM is responsible for parks in Istanbul and the MoEF is responsible for the coastal areas. There are fourteen regions in Turkey that are designated as protected areas. None o f these fourteen areas are within Istanbul. According to the MoEF there are no sensitive areas or critical habitats within the Istanbul Metropolitan area. D. INTERNATIONAL WATERWAYS The Government o f Turkey has no special regulations regarding projects on or affecting international waterways, Therefore, only World Bank safeguard policy OP 7.50 applies. None o f the sub-projects i s either known or suspected to be on an international waterway or utilizes international waters for withdrawal or discharge. E. INVOLUNTARY RESETTLEMENT Procedures for expropriation and resettlement are included in the Resettlement Policy Framework. 76  APPENDIX A: Closure of ExistingSolid Waste DisposalSites 2. Uncontrolled disposal o f municipal waste (garbage) at locations "out o f sight o f the public" had been a common disposal practice in both urban and rural settings. In as much as providing a needed public service, such disposal practices are no longer acceptable due to public health risks and induced groundhurface water contamination. There are 28 waste disposal sites (or `dumps') in the European side o f Istanbul within the jurisdiction o f IMM that have been operated by the local municipalities. Proper closure and rehabilitation o f these uncontrolled disposal sites i s a highpriority issue for IMM. 3. The dump areas range from very small to medium sized (some hectares). The majority o f the closed dumps were closed in 2004; but others more recently or some 8 years o f more ago. A large number o f the closed dumps have been covered but often just the upper surface area (and not the slopes) and, as far as can be judged, mostly in a rough manner just using locally available materials. Terrain conditions and soil conditions vary widely. Disposal sites are found in flat, hilly and mountainous areas with superficial, multi-layer and mountain slope dumping. A large number o f sites are adjacent to creeks or lakes. With the often high permeability o f soil layers in the area and the fact that some o f these lakes are used for drinking water production this issue requires careful consideration. There is one site (Silivri Belediyesi) constructed on a thick clay layer that i s equippedwith a simple leachate collection system. There i s no environmental data available on the quality / contamination o f the underground, adjacent surface waters and local groundwater systems. 4. Project Options and Expected Impacts. Closure o f dump sites i s expected to reduce human health risks, mitigate adverse environmental impacts o f past waste disposal and allow the lands to be reused. Applicable options are: (a) Upgrading (including environmental control measures, continuation o f operations and possibly environmental remediationmeasures); (b) Closure (closure and site rehabilitation, possibly including environmental remediation measures); (c) Removal (including site rehabilitation, possibly with environmental remediation measures); or (d) Do nothing. 5. Decision Making Process. In the above options site rehabilitation includes measures to adequately (i) prevent (further) contamination of the environment; (ii) manage leachate and land fill gas generation; (iii)cover, stabilize and reshape the dump area; and (iv) prepare the site for post-closure monitoring/management and the future land-use purpose as determined. Remediation measures may be required in case past-time waste disposal practices have caused contamination o f soil groundwater or surface waters that pose a risk to the environment or public health. The remediation measures should be established in a risk assessment and as a minimum reduce the environmental and public health risks to acceptable levels. For this purpose each waste disposal site requires 77  adequate site investigations to establish ambient contarnination levels in soil, groundwater and surface waters (sediments). 6. Turkey, as most countries, does not have design, construction and clean-up standards for waste disposal site closure, rehabilitation and remediation. Selection o f the available environmental control, containment and clean-up methodologies will rely on cost-benefit evaluation based on environmental risk assessment and administrative decision making process (EIA Regulation) and applicable WB Safeguard Policies. Turkish "Soil Pollution Control Regulation" as revised on 31.05.2005, i s an applicable relevant regulation on clean uphehabilitation o f the dump sites together with the" Water Pollution Prevention Regulation" o f 31.12.2004 and related water quality legislation. Appropriate due diligence will be followed for public participation in decision making process as per the Turkish EIA Regulation. Feasibility studies and design specifications will refer to internationally recognized good practices for waste disposal site closure and rehabilitation. 78  APPENDIX B: Format for EnvironmentalManagementPlan Pro!ect Description 7. Present a brief description o f the subproject. include the nature o f the investment, the location, and any characteristics of the area that are of particular interest, e.g. near a protected area, area of cultural, historical, religious interest etc. also, very briefly describe the general land use characteristics (farming, small industryetc.), and the location(s) ofthe nearestpopulation centers. 1. MITIGATION PLAN Phase Issue Mitigating cost of Responsibility* Start Date End Measure Mitigation Date (IfSubstantial) Construction (Rehabilitation/ remediation works) Operation Post-Closure (Decommissioni ng) 79  2. MONITORING PLAN Phase What Where When Monitoring Responsibility Start End parameter is the is the parameter cost Date Date is to be to be monitored- What is the cost monitored be monitored frequency of of equipment or 7 monitored type o f measurement or contractor monitoring continuous? charges to equipment? perform monitoring Constructi on (Rehabilit ation I remediatio n works) Operation Post- Closure (Decommi ssioning) 3. INSTITUTIONAL STRENGTHENING 1. Equipment Purchases(Tabular Presentation Preferred) List: 0 Type o f equipment 0 Number ofUnits 0 Unitcost 0 Total Cost 0 Local or International Purchase 2. Training/StudyTours List: 0 Type of Training (Mitigation, Monitoring, EnvironmentalManagement, Other) 0 Number of Students Current and Future Organizational Unit inWhich They Work or Current and FutureTitle/Job Description 0 Duration o f Training 0 Start Date/End Date (for each student) 0 Venue of Training (Domestic or Abroad) 0 Instituteor Organization to Provide Training 0 Cost (Local and Foreign) 80  3. Consultant Services Type o f Service Terms of Reference 0 Justification cost 4. Special Studies 0 Justification 0 Terms of Reference cost 4. SCHEDULE Present (preferably in Chart Form) start dates and finishdates for: Mitigation Activities 0 Monitoring Activities 0 Training Activities 5. INSTITUTIONAL ARRANGEMENTS A narrative discussion supported by organizational charts detailing: 0 Institutional responsibilities and procedures for mitigation and monitoring and how they are linked for environmental management 0 Environmental information flow (reporting-from who and to who and how often) 0 Decision making chain o f command for environmental management (to take action, to authorize expenditures, to shut down, etc.) Inshort, how is all the monitoring data going to be usedto maintain sound environmental performance-who collects the data, who analyzes it, who prepares reports, who are the reports sent to and how often, and who does that person send it to, or what does hehhe do with the information-who has the authority to spend, shutdown, change operations etc. 6. CONSULTATIONWITH LOCAL NGOSAND PROJECT-AFFECTED GROUPS Provide documentation o f the following: 0 Manner in which notification of the consultation was announced: media(s) used, date(s), description or copy o fthe announcement 0 Date(s) consultation(s) was (were) held 81  0 Location(s) where consultation(s) was (were) held 0 Who was invited Name, Organization or Occupation, Telephone/Fax/e-mail numbedaddress(home and/or office) 0 Who attended Name, Organization or Occupation, Telephone/Fax/e-mail numberladdress(home and/or office) 0 Meeting Program/Schedule What is to be presentedand by whom 0 Summary Meeting Minutes (Comments, Questions and Response by Presenters) 0 List o f decisions reached, and any actions agreed upon with schedules and deadlines and responsibilities. 82  m 00 NOIL3flHLSN03   rc 0  a 0 a  G 0. 2 s? W 4 0 Y Y C e, .-2>C rc w 0 .-.-2 Y i? v1 C  00 00  c iYm a  0 m m 0 3 .-3Ce s Y D e, 3la - 0Lc S  8 U v) 0 9 Y 0 3 L 8 5s % E a 5 g 60)n o a,.= 3." E I .Y h. i cx ce  D e, s NOIL3nXLSN03  rr 0  Annex 10.2 LandAcquisitionand ResettlementPolicyFramework 8. The Istanbul Municipal InfrastructureProject will have four components: (ii) Environmentalmanagement: a. Closure o f existing landfills and illegal dump sites; b. Preparation of annual BusinessPlanfor solid waste services; and c. Financing shipping waste collection and emergency response vessels. (ii) Municipalservicesandinfrastructure: a. Preparinga detailed risk assessment for all major municipal systems; b. Preparing a Municipal InfrastructureRiskMitigationPlan; c. Retrofitting selected key buildings, fire stations and municipal infrastructure; and d. Providing neededequipment. (iii) Piloturbantransformationprogram: c. Pilot urban transformation feasibility studies; and a. Selected priority investmentsassociated with urban transformation. (iv) Engineering services and audits: a. Design studies, tender documents, review o f strengthening and other design, surveys and other studies; and b. External audits o fproject accounts Possible LandAcquisitionor ResettlementRequirements 9. The project is not expected to require the acquisition or expropriation o f private land, as all anticipated investments will take place on public land. Similarly, as the work should be carried out on existing sites, there should be no need to access public land that is informally occupied. During implementation, however, the IMM may request the project to fund unforeseen investments for which the municipality may need to acquire private land or regain possession o f public land that i s either leased to a private party or informally occupied and used by a private party. To maintain flexibility and enable the Bank to respond positively to such requests, the IMM has prepared this Policy Framework to ensure compliance with the Bank's Operational Policy 4.12, Involuntary Resettlement. Land AcquisitionProcess 10. The process of constructinga public facility goes through three main steps. 11. The first step in the process i s to obtain the approval o f the district municipality council and be integrated into the municipal land use plan. Consideration by the council and entry into the plan are both preceded by public announcements in newspapers and posting in the municipality office, a public planning meeting, and a 60-day period during 94  which the public i s invited to comment. If substantive negative feedback i s obtained, the decision i s reviewed by the municipality council and either approved again or denied. 12. The second step occurs on the Metropolitan Municipality level, where the council must grant approval and the land use planmust be changed to integrate the facility. Both actions are also preceded by similar notifications, public meetings and feedback period. Ifthe responseis negative, the proposalis submittedto the council for re-consideration. 13. After the site proposal completes the first two steps, documentation is prepared to request a location permit. In addition to the decisions and confirmation that the site i s entered into the respective plans, the documentation consists o f feasibility studies; preliminary design; environmental assessment; ownership status; estimated land cost replacement value o f above ground assets, based on a professional valuation; estimated construction and supervision cost; and confirmation that adequate funds are available.. Once the locationpermit i s issued, the land can be acquired. Land Ownership and Use Status 14. Land ownership status can include one or more o f four scenarios: a) Owned by the municipality and either vacant or used by the municipality, a municipal company or a private entity under a lease or informal arrangement; b) Owned by the Treasury or other state agency and either vacant or used by the owner; c) Owned by the state or state agency or enterprise and used by another party through a lease or informal arrangement; d) private land either used by the owner or another private individual or enterprise or used informally by a third party through a lease or informal arrangement. 15. Each scenario has different implications for entitlements and action which are noted briefly below and inthe "Entitlement Matrix," attached as Annex A. 16. Municipal Ownership. The land i s owned and used by the municipality; the land i s transferred to the solid waste management office. If the land i s used by a third party under a lease, the Metropolitan Municipality adheres the conditions o f the lease, which may or may not include the obligation to transfer the activity to another site. If the land i s used informally, the Metropolitan Municipality compensates the user for assets that are lost and assists the user to relocate the activity. 17. Ownership and Use by the Treasury or Other State Entity. If the land i s owned and used by the State or one of its agencies, the solid waste management office negotiates with the ownerhser to transfer the land to the Metropolitan Municipality. Depending on circumstances, the land will be transferred to the Metropolitan Municipality without cost or leased or sold to the Metropolitan Municipality after compensating the user for lost assets. 95  18. Ownership by the Treasury or Other State Entity and Used by a Third Party. If the land is leased to a third party, the owner will vacate the land and transfer or lease it to the Metropolitan Municipality, adhering to the conditions ofthe lease, which may or may not require compensation for lost assets or disruptions in use. If the land is used informally, the owner will vacate the land, compensating the user for lost assets, and assist the user to find another suitable location. 19. Private Ownership. Ifthe land i s privately owned, the Metropolitan Municipality will commission a property assessment and contact the owner giving notification that the land i s needed for the facility. The Metropolitan Municipality will then invite the owner to negotiate for purchase, based on the assessment. The objective o f negotiation is to reach an agreement on the value o f the land, assets, loss o f income (if relevant) due to relocation, and the cost o f relocation and re-establishment. The owner must be compensated infull before work can begin. Expropriation 20. Ifnegotiation fails, the Metropolitan Municipality can request the court to issue an expropriation order, documenting the failure to reach a settlement through negotiation. The court will commission an independent assessment prior to issuing the order and setting the price. When the order i s issued, the Metropolitan Municipality compensates the owner at the level set by the court and obtains title. Work cannot commence before the payment i s made in full. 21. If the owner is not satisfied by the court decision, he or she can appeal the financial settlement, but cannot reverse the expropriation order. 22. Although the Metropolitan Municipality has the authority to request and obtain an expropriation order, expropriation inevitably generates strong public criticism and thus it i s rarely used. Responsibility 23, The Metropolitan Municipality i s ultimately responsible for land acquisition and expropriation. The process i s managed by the office that will use the land, however, in collaboration with the municipal cadastre office. Compliance with OD 4.12 24. The government recently changed the expropriation law to authorize compensation to informal and illegal land users for the assets they lose when the government reasserts control over public land. The new legislation essentially closed the only significant gap between Turkish laws and World Bank policies relating to land acquisition and expropriation. Nonetheless, to ensure compliance with OP 4.12, the Metropolitan Municipality will notify the Bank of any plans to acquire private land or to clear informally occupied public land, for facilities funded through the project and will prepare a brief land acquisition plan for each investment. The plan should be submitted 96  to the Bank for review and no objection at the time the municipality requests a location permit. The report should provide details about the amount, ownership status and use status o f public and private land to be acquired for project investments, documenting the action taken to that point as well as any public comments received along the way. 25. In addition to following regular Turkish land acquisition procedures, the municipality will conduct an open public hearing prior to submitting the request for a location permit. The hearing should be announced in newspapers and other media at least two weeks before the event, and announcements should be posted in prominent places in the vicinity of the proposed site. The municipality will record minutes o f the meeting that describes when and where the meeting was announced, who was invited, who attended (with an address or telephone number for further contact) and includes all comments received during and prior to the hearing. The documentation presented to the Bank will include the minutes o f the hearing with a statement from the municipality indicating the actions that will be taken inresponse to the comments received. Disclosure 26. This Policy Framework was disclosed in-country by IMMon March 23, 2007 97  EntitlementMatrix: IstanbulMunicipalInfrastructureProject Investment Ownership Use Status Final Status Transfer Compensation Principles Status Mechanism New Municipality Vacant Transfer to Simple None Transfer User Transfer Station Leasedto Vacate, Terminate Lost Assets, 4ssets at Full Private User Transfer to Lease, RelocationCost, Replacement User Transfer Temporary Cost Income Loss, Depending on Lease Provisions Informal/Illegal Vacate, Relocate, Lost Assets, Assets at Full Use Transfer to Transfer to RelocationCost Replacement User User cost Treasury, Vacant Transfer to Transfer or Land, Subject to other Municipality/ Purchase Negotiation Government User between Parties Entity Leased to Vacate, Terminate Land, Subject to Assets at Full Private User Transfer to Lease, Negotiation; Lost Replacement Municipality/ Transfer Assets, cost User RelocationCost, Temporary Income Loss, Dependingon Lease Provisions Informal/Illegal Vacate, Relocate, Land, Subject to Assets at Full Use Transfer to Transfer to Negotiation; Lost Replacement Municipality1 Municipality/ Assets, cost User User RelocationCost to User Private Vacant Ownership by Purchase and Land, Subject to Full Municipality/ Transfer Negotiation or Replacement User Expropriation, if Cost (Market Negotiations Fail Value) Residential Ownership by Relocate, Land, and Above Full Municipality/ Purchase and Ground Assets, Replacement User Transfer RelocationCosts, Cost (Market Subject to Value) Negotiation or Expropriation if Negotiatons Fail Commercial Ownership by Relocate, Land and Above Full Municipality/ Purchase and Ground Assets, Replacement User Transfer RelocationCosts, Cost (Market Temporary Value) Income Loss, Subject to Negotiations or Expropriation, if Negotiatons Fail 98  Annex 11: ProjectPreparationand Supervision Planned Actual PCN review 03/30/2006 04/03/2006 InitialPID to PIC 04/20/2006 04/18/2006 Initial ISDS to PIC 04/20/2006 04/18/2006 Appraisal 02/22/2007 04/04/2007 Negotiations 03/29/2007 04119/2007 Board/RVP approval 04/26/2007 06128/2007 Planned date o f effectiveness 09/14/2007 09/14/2007 Planned date o f mid-termreview 02/02/2009 03/18/2009 Planned closing date 01/3 1/2012 01/31/2012 Key institutions responsible for preparation ofthe project: Metropolitan Municipality o f Istanbul (IMM); Treasury and SPO. Bank staff and consultants who worked on the project included: Name Title Unit SeemaManghee Task Team Leader ECSSD Wael Zakout Lead Operations Officer ECSSD IbrahimSirer Senior Engineer and ECSPS Procurement Specialist Felix Jakob Institutional Specialist ECSSD BernardBaratz Environmental Specialist EASEG StanleyN.Peabody Social Specialist ECSSD Alptekin Orhon Operations Officer ECSSD Frank Van Woerden Senior Environmental ECSSD Specialist Vesna Francic Operations Officer ECSSD Seda Aroymak Senior Financial ECSPS Management Specialist UlkerKaramullaoglu Program Assistant ECCU6 Del hine Hamilton ECSSD Bank funds expended to date on project preparation: 1. Bank resources: $258,752.85 2. Trust funds: NA 3. Total: $258,752.85 EstimatedApproval and Supervisioncosts: 1. Remaining costs to approval: $6,000 2. Estimated annual supervisioncost:$ 125,000 per FY 99  Annex 12: Documents in the ProjectFile Report on the Activities, Functions and Structure o f Istanbul Metropolitan Planning and Design Center, Istanbul Metropolitan Municipality, 2006 Report on Istanbul Province Environmental Plan, Istanbul Metropolitan Planning and Design Center, IstanbulMay 2006 Zeytinburnu Urban Regeneration Pilot Project (Strategy and Action Plan), Istanbul Metropolitan Municipality Budgetso f IstanbulMetropolitan Municipality, 2003-2006 IstanbulMetropolitan Municipality Strategic Plan (2007-20 11) Financial Information o f Istanbul Metropolitan Municipality, 2006 Remedial Actions inthe Aftermath o f the 1999 Turkey Earthquakes, E. Uckan, M.Erdik, U.Celep, N.Apaydin and N. Aydinoglu, Bogazici University, August 2003 Seismic Microzonation for Municipalities, Executive Summary, Ministry o f Public Works and Settlement, DRM, February 2004 Earthquake Risk Assessment for Istanbul Metropolitan Area, Bosporus University, May 2002 The Study on A Disaster PreventiodMitigation Basic Plan in Istanbul including Seismic Microzonation inthe Republic o f Turkey, IstanbulMetropolitan Municipality, JICA, December 2002 Istanbul Gas Distribution Company (IGDAS) Annual Report, 2005 Istanbul Sea Vessels Company (IDO) Annual Report 2005 Industrial Waste Feasibility Study, Gesselschaft fur Chemischen und Techniscen Umweltschuts mbH (Company for Chemical and Technical Environmental Protection,Ltd.), November 2005 Report on ISTAC, 2006 Information on Istanbul Solid Waste Sites, 2006 100  Annex 13: Statementof Loansand Credits Differencebetween expectedand actual Original Amount in US$Millions disbursements Project ID FY Purpose JBRD IDA SF GEF Cancel Undisb Orig Frm Rev'd PO96400 2006 ECSEEAPL #3 (TURKEY) I50 00 0 00 0 00 0.00 0 00 15820 -040 0 00 PO96262 2006 AVIAN FLU - TR 34 40 0 00 0 00 0.00 0 00 33 82 0 00 0 00 PO93765 2006 GAS SECT DEVT 325 00 0 00 0 00 0.00 0 00 324 19 -081 0 00 PO94176 2005 ECSEEAPL #2 (TURKEY) (CRL) 66 00 0 00 0 00 0.00 0 00 61 38 3 85 0 00 PO94167 2005 PSSP 2 465 40 0 00 0 00 0.00 0 00 40508 3531 0 00 PO93568 2005 EFIL 3 305 00 0 00 0 00 0.00 0 00 24468 -32 58 0 00 PO77328 2005 RAIL RESTRUCT I84 70 0 00 0 00 0.00 0 00 176 84 0 00 0 00 PO66149 2005 SEC EDUC 104 00 0 00 0 00 0.00 0 00 100 74 125 0 00 PO81880 2005 MUNICIPAL SERVICES 275 00 0 00 0 00 0.00 0 00 255 85 0 00 0 00 PO78359 2005 SEISMIC RISK MITIGATION 400 00 0 00 0 00 0.00 0 00 36630 3795 0 00 PO75094 2004 WATERSHED REHAB (GEF) 0 00 0 00 0 00 7.00 0 00 6 16 0 75 0 00 PO82801 2004 EFIL 2 303 I O 0 00 0 00 0.00 0 00 31 32 -14035 0 00 PO82996 2004 PFPSAL 3 1,000 00 0 00 0 00 0.00 0 00 500 00 0 00 0 00 PO74053 2004 HEALTH TRANSIT (APL # 1) 60 61 0 00 0 00 0.00 0 30 55 17 34 I O 0 24 PO72480 2004 RENEWENERGY 202 03 0 00 0 00 0.00 101 17264 2362 0 00 PO70950 2004 ANATOLIA WATERSHED REHAB 20 00 0 00 0 00 0.00 4 30 14 60 107 0 00 PO59872 2003 BASIC ED 2 (APL #2) 300 00 0 00 0 00 0.00 0 00 277 71 27631 240 71 PO74408 2002 SRMP 500 00 0 00 0 00 0.00 0 00 3929 3929 -27 91 PO70286 2002 ARIP 600 00 0 00 0 00 0.00 0 00 24426 24426 140 44 PO68368 2000 MARMARA EARTHQUAKE EMG 505 00 0 00 0 00 0.00 23 63 211 61 23665 92 43 RECON PO44175 2000 BlODlVMTRL RES MGMT (GEF) 0 00 0 00 0 00 8.19 0 00 3 28 3 28 0 47 PO48852 1998 NAT'L TRNSM GRID 270 00 0 00 0 00 0.00 34 60 7359 108 19 16 70 Total: 6,070.24 0.00 0.00 15.19 63.84 3,756.71 871.74 463.08 STATEMENT OF IFC's Held and DisbursedPortfolio InMillions ofUSDollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Eauitv Quasi Partic 2005 Acibadem 20.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 1996 Arcelik 7.00 0.00 0.00 0.00 7.00 0.00 0.00 0.00 2001 Arcelik 30.87 0.00 0.00 8.56 30.87 0.00 0.00 8.56 2005 Arcelik 95.34 0.00 0.00 95.34 95.34 0.00 0.00 95.34 2000 Arcelik LG Klima 5.27 0.00 0.00 0.00 5.27 0.00 0.00 0.00 2002 Assan 20.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 2005 Assan 20.00 0.00 10.00 0.00 0.00 0.00 0.00 0.00 101  2002 Atilim 4.88 0 00 0 00 0 00 4 88 0 00 0 00 0 00 2000 Banvit 8.33 5 00 0 00 0 00 8 33 5 00 0 00 0 00 2002 Beko 27.79 0 00 0 00 I 7 26 27 79 0 00 0 00 17 26 2001 Bilgi 7.00 0 00 0 00 0 00 7 00 0 00 0 00 0 00 2006 Bilgi 15.00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 1994 Borcelik 0.00 5 83 0 00 0 00 0 00 5 83 0 00 0 00 1996 Borcelik 0.00 0 61 0 00 0 00 0 00 0 61 0 00 0 00 1997 Borcelik 7.27 3 21 0 00 0 00 1 2 7 3 21 0 00 0 00 2004 BorusanHolding 30.00 0 00 7 85 0 00 30 00 0 00 7 85 0 00 1994 CBS Holding 3.50 0 00 0 00 0 00 3 50 0 00 0 00 0 00 1990 Conrad 3.59 0 00 0 63 0 00 3 59 0 00 0 63 0 00 2002 Conrad 2.45 0 00 0 00 0 00 2 45 0 00 0 00 0 00 2002 EKS 8.84 0 00 0 00 0 00 8 84 0 00 0 00 0 00 2004 Ege 10.00 0 00 0 00 8 00 10 00 0 00 0 00 8 00 1995 Entek 17.00 0 00 0 00 6 63 17 00 0 00 0 00 6 63 1999 Finansbank 1.11 0 00 0 00 0 00 1 I 1 0 00 0 00 0 00 2004 Garanti Leasing 10.00 0 00 0 00 0 00 10 00 0 00 0 00 0 00 1999 GumussuyuKap 4.00 0 00 3 38 0 00 4 00 0 00 3 38 0 00 2001 Gunkol 4.18 0 00 0 00 0 00 4 18 0 00 0 00 0 00 1998 IndoramaIplik 3.75 0 00 0 00 0 00 3 75 0 00 0 00 0 00 2005 Intercity 15.00 5 00 0 00 27 75 15 00 5 00 0 00 27 75 1998 lpek Paper 5.14 0 00 5 00 0 00 5 14 0 00 5 00 0 00 2002 lpek Paper 6.67 0 00 0 00 0 00 6 67 0 00 0 00 0 00 1990 KepezElektrik 0.81 0 00 0 00 0 00 0 81 0 00 0 00 0 00 I988 Kim 15.35 0 00 0 00 0 00 9 49 0 00 0 00 0 00 1990 Kiris 10.36 0 00 0 00 0 00 6 12 0 00 0 00 0 00 2004 Koclease 30.00 0 00 0 00 0 00 30 00 0 00 0 00 0 00 1991 Kula 5.01 0 00 0 00 0 00 4 65 0 00 0 00 0 00 2003 MESA Group 11.00 0 00 0 00 0 00 11 00 0 00 0 00 0 00 2004 MeteksanSistem 0.00 0 00 8 50 0 00 0 00 0 00 8 50 0 00 2002 Mil11Re 50.00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 2006 Mil11Re 50.00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 1998 Modern Karton 3.64 0 00 0 00 0 00 3 64 0 00 0 00 0 00 2002 Modern Karton 6.67 0 00 0 00 0 00 6 67 0 00 0 00 0 00 2005 Modern Karton 40.00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 1991 NASCO 3.95 0 00 0 00 138 3 95 0 00 0 00 138 2004 OPET 25.00 0 00 0 00 40 00 I 6 67 0 00 0 00 40 00 2004 Oyak Bank 44.44 0 00 0 00 0 00 44 44 0 00 0 00 0 00 2005 PALEN 2.00 0 00 0 00 0 00 2 00 0 00 0 00 0 00 2005 PALGAZ 10.00 0 00 0 00 0 00 5 00 0 00 0 00 0 00 I998 Pinar ET 2.36 0 00 0 00 0 00 2 36 0 00 0 00 0 00 2000 Pinar SUT 9.58 0 00 0 00 0 00 6 19 0 00 0 00 0 00 1999 SAKoSa 7.3I 0 00 6 09 3 17 7 31 0 00 6 09 3 17 1990 Silkar Turizm 1.10 0 00 0 00 134 1 I O 0 00 0 00 134 2002 Sise ve Cam 5.83 0 00 0 00 0 00 5 83 0 00 0 00 0 00 2003 Sise ve Cam 36.47 0 00 1636 28 19 36 47 0 00 16 36 28 79 2002 Soktas 1.50 0 00 0 00 0 00 150 0 00 0 00 0 00 2005 TSKB 0.00 0 00 50 00 0 00 0 00 0 00 50 00 0 00 1989 Trakya Cam 0.00 0 00 0 03 0 00 0 00 0 00 0 03 0 00 102  1996 Trakya Cam 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 1999 Trakya Cam 0.00 0.02 0.00 0.00 0.00 0.02 0.00 0.00 2002 Turk Ekon Bank 8.89 0.00 15.00 0.00 8.89 0.00 15.00 0.00 2005 Turk EkonBank 0.00 0.00 50.00 0.00 0.00 0.00 50.00 0.00 2001 Turkish PEF 0.00 9.59 0.00 0.00 0.00 2.82 0.00 0.00 1999 Unye Cement 2.53 0.00 0.00 0.00 2.53 0.00 0.00 0.00 1999 Uzel 1.64 0.00 0.00 4.40 7.64 0.00 0.00 4.40 1998 Viking 6.25 0.00 0.00 0.00 6.25 0.00 0.00 0.00 2005 YUCE 4.53 0.00 0.00 0.00 3.50 0.00 0.00 0.00 Total portfolio: 796.20 29.27 172.84 242.62 592.99 22.50 I62.84 242.62 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 2005 Avea 0 12 0 00 0 00 0 30 2001 Akbank 0 03 0 00 0 00 0 00 2002 TEB 111 0 00 0 00 0 00 0 05 2005 Assan IV 0 00 0 00 0 00 0 03 2002 Milli Reasurans 0 00 0 01 0 00 0 00 2004 Akbank BLoan Inc 0 00 0 00 0 00 0 02 Total oendina colMPtment: 0.15 0 01 0 00 0.40 103  Annex 14: Country at a Glance Europe & Key Develapment Indicators Cen:ral Asia Age distribution. 2005 /ZP05] *era6 Powlawn nd-year in l m s i 473 24.238 0 1 64 GNI <&la$ -lethod JS4 01 w s 1045 G l l pe.capi'a Ma3 rwhw U55i 4 113 GN pee capita PPP ~n!emaiic~siE Q 142 GDP growl" 4 % e o GCP per i q n a gmw:h 6 0 [mom recenresrimare, 2000-2005] I Poveny heamwat ratio at 51 a .?ai/PPF, %' 2 Pcueny headwarn mi0 at S? a cay I ~ P P'6:. 16 Under-5 mortalityrate (per 1.0001 Liteexpaancy at blthiyears OB Infantmunafly (per t 060 ive births 28 ' E 3 7 Child malnutnlim i'. of chraren under 51 5 Ad,i literacy male I% af ages 15 and older QR Ad- 1literacy cerale 1'. of ages 15 and older 36 Grass w m c y e m niemL male of age grwpi 3D5 Grcss viriwy enrc lie-1 fetrale I"* of age ~ ~ C J P I '02 E1 55 Met Aid Flows f960 1990 2000 2005' I ivss m~llona! Net ODA and oficial aid P53 1 ?OF 327 257 Growth of GDP and GDP per capita (9n) Top 3 donors 'M ~~4 Spain a 4 50 lustra 27 8 1 1 20 Fqnw 33 e5 8 11 A d i a o o C > V i 1 3 ? e 0: 3.1 Aia per capita JSS 21 2: 5 4 Long-Term Econoimic TI ends Consumer vitrs iannualq- change 110.2 50 3 54 R 6 1 GDP imptic7 clelalcacanwal '.channget 88.1 i H2 4FI D 5 4 Ex&ange rare 'annual avenge bialper US$' 73.8 Terms of trade index I2000 1Oil I ?,W6a 71 103 1980-90 1930-2001) 2000-05 (average Jnfldd &7#& ';) Powlaton mid-year im I m s i 5 56 2 -, * 3 1 8 1 5 GOP iUSS millmsi i o44 $03 IW 842 5 3 3 8 5 2 !?L d GDP, 26.4 1 1 2 1 - 1E.3 1 5 4 !l.P 1 .: 1.4 1 .L 2B.C 26.3 23.7 7 1 4. I 4 8 I 4 3 t O . 5 15 7 ",C 7 -e.v 4.$ 5 0 51 4 E 1.E. 594 M.5 4 f 4.0 5 1 77 0 c.0.i ca.9 55,' !.C d.2 -C.? la.? 11 6 1 l . i 14 1 '3,' 4.c 14.5 24 6 24.2 f.0 11.6 *:- .- 13.3 24.0 27.4 ' 1 . i 1 1 i 11 0 !?.e 31.6 34.0 ;1.0 12 8 15.8 24.1 20.2 $6.4 104  Balance of Payments and Ttade 2000 2005 Governance indicates. ZOO0 and 2004 IUS5 mMtonsi Tob!merchand31 expom (fob 33-21 76.E'i Total mrrciiand 3e irrpon icif: M,X3 1'6773 vow ana axamaetiw tiet trade in pods 3nd sermes -105.21 .18Q59 Workers renitnancesana cmip+nsaion c ienpsyees ireoetpts 4520 a51 Currenr azcount balance -Y81& 4 3 1 5 1 as a *\ of GDP -4e 4 4 Rrs~ru;es mJuarng@Id 33 b54 88.748 Genetal Government Finance (excluding Regulatory Institutions) (% of GOPI Revenue 37 e 41 5 Tax'evenue 24 4 24 8 Expendture an?Net Lwding 50 0 43 4 Over~isurplusmfct: Technology and Infrastructui e 2084 -12 1 -1 9 PJWd roads 1'. of tow i 4' Highest trfrgina lax rale I**' Fixeo Ihr and mob e pnone lroiu~:d 45 40 sdscribe- !per 1 OD0 people :E., Corporare M 30 Hgli technoogy erpons l e i of manufauurw e x ~ ~ i l s i 2 3 External Debt and Resource Flows Environnient Iwss mrlironsl Total debt oursrandng w4 oisturseo 118.533 ? i o 5e4 Agrcuitural land IS, of l a d areal 5.1 T ~ t aa! m K N C ~ :?.E77 36.P41 Forest area I% cf land area :&l:3 3 5 3nd 13 2 HlPC and MDRI debt relie6 exl;reaed flow - - Nahonally ptecied areas "..of land area iet TobI dett P> of GDP 58 5 58 3 Fremealer resourcesper capita i:a ne$ersl 3 165 Total dm1S ~ N c e 1'8. of exponr 42 8 38 P Frrulwaler wilhcrawali'. of tnlwnal rexlwws 16 5 Foreign d i w irvesmient inei nflcwst a92 9 &05 C02 en ssions per cap :a IIY~ 3 0 Porfoiio rqui:y tne? nfnr,sl cg+ 5 668 GDP per unitof energy use 3omposit3on of total external debt. 2004 !2000 PJ5 S per kg ci oil quivaienvt 6 9 Energy use ver capma ikg of oil ewivalen'i f 117 World Bairk Group portfolio 2W5 (WSI mdkvnsJ IERD Tcrial deb! outstanding ana dssbursed 5 . a z Dnbursemenrs 4dl Principal repayrnenls 355 Inierert payments 248 IRA -ma1 debt outstanding ano d sbursed 7 i Dsbursemenis 0 Private Sector Developnient 2000 2005 -01~1 debt sewice n Time re:utred to start a 5us1*ess iaays e IFc lbCJi PJO c3Sl 3-T a OJ510+55 '+of Gf.(l per Cdpst3I -- 27 7 -&A disbursedand ouir!andlq pr(i0lic 1 G'Z Tine reou red to regIter orcpeay 'saysI - u ofvach IFC o m mcaun): 774 D sbui-semenis br IFC own ao:ounl 176 Rankeda5 3 m a pcanstrain: tc busre55 Portfo~osales prwymnrs md 1% sfmanagerswrvtyd who agreed repaymentsfcr IFC macwun! f09 T w rates 37 8 Macroeconemitc nflabi :y 340 kl GA Gmss erposure '35 Stock market cap1i3zamn 1% of GOD 3 5 5 4 4 5 New guarantees 3 Gank bnnches {per 100 WOO peoples 8 5 105  r4iIIet ir iiIIm O w eIopmeent cioaIs Turkey Turkey Goal 1: halve the rates tor $1 a dar poverty and malnutritior 1990 199s 2000 2004 Poverty headcourt rata a: $1 a day-iPpo Y of pow abcni 2 3 e: 34 Fcveny headccuir rate ai natonal powen). h e I % of pcpwlawnl 28 3 2'0 Share oi nwme or mstmpiion to ?hepoorest qwrt t I% 5 3 Prevalenceof malnuIntLon 1% of duiaren under 51 10 0 4 Goal 2: ensure that children are able to complete primary schoolin( 89 89 Primarycompletion rate{ 'jof irievant age gmup; Primarysabool enrcll-nenl {net,' i t 30 8a Secondary schcc enrollnent igross 46; 48 7% 79 "ouili Meraw 'ate 1-4 cf c-ple ages 15-24' 93 oa Goal 3: eliminate gender disparity in education and empowef women Palic ofg4s to buys r prniary and se:ciaar{ edJtation I%: 81 85 80 $+one- eiip 'qec m t-e noragnxii:urai sexor 1% of non 17 18 Z I PropoAcr cf sears he d oy done- !n na:iona par anern 151 2 4 4 Goal 4: reduce unbr-5 mortality by rruo-thirds Under4 mortaItyrate iper 1 000: 82 63 44 32 lifanr mcnal;y rale lper 1030 IN* btsths) 67 52 38 ?a Measfesimmmzahcn tpmp~rtanof one-year dds mniufisee. % 78 65 E8 81 Goal 5: reduce maternal mortalftyby Lhree.fourths hlatenal mcnaliry ratio Inodeled est 70 6ir.h~attmded by sk e$ health staff 76 8' 83 Goal 6: halt and begin to reverse the sgread of HlVlAlDS and other major disease: 63 64 71 49 22 3 Goal 7: halve the proportron of people without sustainable awes5 to basic need! I.ccess :o an nipwee wxter scuw I%of pceulat OF I 85 88 4c:ess :D ms"ov1s: sanmtmn facilities14. 04 ~opulation: 12 e 85 82 Forss: area io*of ma 1300 areal 13 1 13 2 Naimnsllyproreckd &rea5 ('* of total and area: . a CO: mii551on5lnieiric tons per capmi 2 6 2 2 3 3 3 0 GCP per init of wergy use imnsran' 2000 PPP S per kg of c eauiva rnti 5 8 5' d .I 6 7 6 0 Goal 8: develop a global padnership for development F xed line ana moblie phwe subscribers ,per 003 people, 123 22 1 512 75 1 Internet users ipee 1 000 peoFIe! 0 1 A. J( 142 Personal ~omoulersiper 1 D@OpecpFI 5 15 3? 52 You!h unemployment14;06 !DWI abor force ages 75-24; 190 15 d 13 1 127 Education indicators (%I Measles immunization (% of 1-year olds) 1 ICT indicators (per taoo people) 'X, 106  Annex 15: Map 107   TURKEY PROVINCE CAPITALS* NATIONAL CAPITAL RIVERS TURKEY MAIN ROADS RAILROADS PROVINCE BOUNDARIES* This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information INTERNATIONAL BOUNDARIES shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. *Province names are the same as their capitals. 26