Afghanistan - Kabul Water Supply and Sewerage Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 1955a-AF AFGHANISTAN STAFF APPRAISAL REPORT KABUL WATER SUPPLY AND SEWERAGE PROJECT June 20, 1978 Regional Projects Department Europe, Middle East and North Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Afghani (Afs) Afs 1.0 = US$ 0.022 Afs 45.0 = US$ 1.00 Afs 1,000 = US$ 22.22 Afs 1,000,000 = US$ 22,222 MEASURES AND EQUIVALENTS Kilometer (km) = 0.62 miles Square Kilometer (km2) 0 0.386 square miles Hectare (ha) = 2.47 acres Millimeter (mm) = 0.03937 inches Centimeter (cm) = 0.3937 inches Meter (m) = 39.37 inches Cubic Meter (m3) = 264 US gallons Cubic Meters per second (m3/sec) = 22.8 million US gallons per day Liter (1) = 0.264 US gallons Liter per second (1/sec) = 22,800 US gallons per day Liters per capita per day (lcd) = 0.264 US gallons per capita per day Milligram per liter (mg/l) = 1.0 part per million(ppm) ABBREVIATIONS AND ACRONYMS CAWS The Central Authority for Water Supply and Sewerage (formerly described as AWSSA = Afghan Water Supply and Sewerage Authority) CIDA Canadian International Development Agency Kf'W Kreditanstalt fur Wiederaufbau (Federal Republic of Germany) MWP Ministry of Water and Power PRIL Proctor and Redfern International Limited (Canada) UN United Nations UNDP United Nations Development Program UNICEF United Nations Childrens Emergency Fund USA United States of America USAID United States Agency for International Development USSR Union of Soviet Socialist Republics WHO World Health Organization Government of Afghanistan and CAWS' Fiscal Year March 21 - March 20  FOR OFXcAL USE ONLY AFGHANISTAN STAFF PROJECT REPORT ON THE KABUL WATER SUPPLY AND SEWERAGE PROJECT TABLE OF CONTENTS Page No. I. THE WATER SUPPLY AND SEWERAGE SECTOR ....................... 1 General ............. ....................................... 1 Water Resources ............................................ 1 Sewerage Subsector ......................................... 2 Sector Organization ........................................ 2 Sector Program and Priorities .............................. 4 Performance in Previous IDA Lending ........................ 5 Sector Objectives .......................................... 6 II. PROJECT AREA. 7 Background .. 7 Water Resources. 7 Water Quality. 8 On-going Project: (a) Credit 563-AF. 8 (b) Afshar (KfW) Project. 9 Existing Water Supplies .. 9 Population Served ........ ............ ...................... 10 III. THE BENEFICIARY ............................................ 11 Introduction ............................................... 11 Organization and Management ................................ 11 Training ................................................... 12 Accounting ................................................. 13 Audit and Insurance ........................................ 14 IV. DEMAND ASPECTS ............................................. 15 Population Forecast ........................................ 15 Forecast of Demand ......................................... 15 Sewer Connections .......................................... 17 Sanitation ................................................. 17 Figure 1 - Estimated Water Demand, Production and Population Growth in the Project Area (Chart WB 18537) ... 18 This report was prepared by Messrs. R. G. MacWilliam (Senior Sanitary Engineer), D. C. Jones (Senior Financial Analyst) and Ms. A. Duncan (Economist). i docn t ha tt bd ditrbution sad may be _W by rcipits only in t b prfonn of thelf ofAeil duties. Its contents may not odhfis be dbecosd without Woftd Bank authofintion..   TABLE OF CONTENTS (Continued) Page No. V. THE PROJECT ....................... 19 Project's Objectives ....................... 19 Scope of Project ....................... 19 Project Description ....................... 20 Cost Estimates ....................... 21 Project Implementation ....................... 23 Figure 2 - Project Implementation Schedule (Chart WB 18618) ........... .............................. 24 Procurement ................................................... 25 Proposed Amount of IDA Credit ................................ 25 Monitoring Criteria ............ .............................. 27 VI. FINANCIAL ANALYSIS ............. .............................. 28 Present Situation . ............................................ 28 Billing and Metering ........... .............................. 28 Water Tariffs . ................................................ 29 Sewerage Charges . ............................................ 32 Financing Plan . .............................................. 32 Future Financial Performance ................................. 34 Figure 3 - Summary Financial Statements ..... ............... 36 Figure 4 - Financial Indicators ............................ 37 VII. JUSTIFICATION . ................................................ 38 Least Cost Solution ............ .............................. 38 Health Benefits and Environmental Impact ..................... 38 Impact on Urban Poverty ......... ............................. 39 Economic Analysis . ............................................ 39 Institutional Benefits .......... ............................. 40 Risks and Safeguards ........... .............................. 40 VIII. AGREEMENTS TO BE REACHED AND RECOMMENDATIONS .... ............. 42 Additional Information in Project File ....................... 44 ANNEX 1 Cost Estimates and IDA Allocations IBRD Maps Nos: 13435 13436 13437   CHAPTER I THE WATER SUPPLY AND SEWERAGE SECTOR General 1.01 Afghanistan, with a land area of 635,000 km2 has a topography which ranges from the mountainous Central Highlands of the Hindu Kush massif to desolate sandy deserts in the south. The country is landlocked and its prin- cipal transport links with adjoining countries are by road. There are also air links through Kabul and Kandahar international airports. 1.02 The latest estimate of Afghanistan's population is 14.0 million (1976/77) based on an extensive and well-researched population survey carried out in 1972/73 with USAID technical assistance. Until this survey, no reliable population survey had been taken in Afghanistan and official estimates tended to be high, made mainly on the basis of male registration. On the basis of the USAID survey, it is estimated that 14% of the population is urban, 75% rural and settled and 11% is nomadic. Of the 2.0 million urban population, 35% are located in the Greater Kabul area and the remainder in 86 other towns. The overall population growth rate is 2.2% p.a. and in urban areas is more than double this figure. 1.03 Priority is being given to provide potable water to the urban and rural communities throughout the country, in recognition of the public health benefits of safe drinking water. A joint WHO/IBRD water supply and sewerage sector study took place in Afghanistan during May 1977 and a draft report was discussed with the Government in March 1978 and is being finalized. The report highlights the need for increased effort in providing well-designed and properly operated water supply systems and for a start to be made in considering the growing problem of wastewater disposal as water service expands. Water Resources 1.04 A number of important hydrological and hydrogeological studies have been carried out in Afghanistan. The Kabul aquifers, in particular, have been well researched. Even so, no comprehensive picture of the overall water balance is yet available. 1.05 Between 1971 and 1975, assistance was provided by the United Nations Special Fund to establish a water management department in the Ministry of Water and Power (MWP). A principal achievement of the U.N. effort was the strengthening of the hydrology and groundwater branches of the Water and Soil Survey Authority, the expansion of systematic data collection and the training of national staff. 1.06 In most districts, average annual precipitation is below 350 mm, falling almost wholly between November and May. The Amu Darya River in the north, the Hari Rud in the west, the Helmand in the south-west and the Kabul river together with their respective tributaries, provide water for irrigation  -2 - and hydro-electric power. However, in general, river flows are seasonal, depending largely on snow melt; many rivers end either in shallow lakes or by disappearing into the ground. Almost all rivers are characterized by excep- tionally large variations between maximum and minimum discharges; only the mountainous central and northeast regions can be considered rich in surface water, the rest being classified as water-scarce or arid. 1.07 Potable water supplies and much irrigation usually depends on groundwater, using deep boreholes, shallow wells or "karez" (water emissions from horizontal galleries). The underground aquifers are fed by surface infiltration and by substantial and continuous mountain snowmelt. Except in the north-western part of Afghanistan, where the water is brackish or saline, underground water is satisfactory, both chemically and bacteriologically, for use in public potable water supply systems. 1.08 All the evidence indicates that there are ample and suitable resources to meet the potable water requirements of Afghanistan's population, mostly from groundwater. Sewerage Subsector 1.09 Few sewers exist in Afghanistan and generally sanitation is by dry closets. Where these are in use in the urban areas, night-soil collection is practised, with disposal onto agricultural land. In the larger towns, where public water supplies operate, those properties with piped systems and flush sanitation rely on septic tanks or cesspits, disposing of effluents to the sub-soil. These individual systems are major sources of pollution of the water-bearing strata. In addition, much polluted wastewater finds its way into multi-purpose drainage and supply ditches (djuis) which, in the absence of adequate water supplies, are used by the public for their personal needs. 1.10 A wastewater system operates in Mikro Royan, a district of Kabul. Serving about 10,000 inhabitants this system was constructed as part of a comprehensive development effort, of prefabricated walk-up apartments built with USSR assistance; disposal is to a sewage treatment plant, which is now overloaded. Other small disposal systems in Afghanistan are located in Kabul: at the University, the Polytechnic, the Military College and the 200-room Intercontinental Hotel. 1.11 With increasing emphasis on improved water supplies, the collection and sanitary disposal of liquid wastes is becoming increasingly important. In recognition of this situation, consideration is being given to the need for sewerage feasibility studies to be undertaken in the cities of Jalalabad, Mazir-i-Sharif, Herat and Kandahar, with a combined population of about 450,000. A similar feasibility study was completed for Kabul in 1973, with UNDP assistance, resulting in a Master Plan which is the basis for the sewerage component of this project. Sector Organization 1.12 The Central Authority for Water Supply and Sewerage (CAWS) estab- lished by Government decree, in February 1975, as a quasi-autonomous authority  - 3 - under the Ministry of Public Works, is responsible, on a national basis, for planning, construction, operation and maintenance of urban water supply and sewerage systems. It currently maintains and operates the water supply systems in Kabul, Kandahar, Herat, Mazar-i-Sharif and Jalalabad and now has under construction systems in Ghazni, Khanabad, Charikar and Quala-i-Naw; it has not yet built any sewers. 1.13 The Environmental Health Department (EHD), under the Ministry of Health, has the general responsibility for improvement of water supplies and sanitation in the rural areas. Its work is complemented by activities of the Rural Development Department (RDD), attached to the President's office, with a responsibility for upgrading living standards through develop- ments embracing all aspects of village life. In addition, two regional development authorities, in Paktia and Helmand, have built, and now operate, water supply systems at Khost and Laskargh respectively, serving a total population of about 45,000. As there is sometimes no clear definition between rural and urban populations in Afghanistan close co-operation between the responsible water supply agencies is necessary to avoid overlap of effort. The problem is recognized and is being addressed, with CAWS acting as the principal coordinator. 1.14 The development of the underground water throughout the country is largely undertaken by a drilling department of MWP. This department has good experience in groundwater development, is technically competent and is ade- quately equipped for its drilling operations. 1.15 Related to past performance both CAWS and the EHD have what appear to be ambitious targets for expansion of water service throughout Afghanistan under the Seven-Year Plan (March 1976-March 1983) the achievement of which depends on the availability of all the necessary resources. Even so, the funds allocated for the sector represent only about 1.5% of the Plan. Of the Afs 2.2 billion (US$49 million equivalent) approved in the plan period, Afs 1.3 billion (US$29 million equivalent) is for urban supplies and Afs 0.9 billion (US$20 million equivalent) is for the rural program. The absorptive capacity of the sector is limited by institutional weaknesses, which are being tackled through IDA's water supply operations. Success in strengthening CAWS will assist the Government to achieve these goals. 1.16 CAWS makes charges on its consumers and aims at following public utility practices in its operations, while EHD is wholly reliant on Government allocations, or local self help, for maintaining and operating the systems it builds. A significant effect of the lack of operating funds in the EHD is that 50% of the 750 handpumps installed and 60% of mechanically-operated systems, in about 60 villages, are inoperative. In an effort to maximize the use of its resources, EHD aims some of its efforts at the smaller urban areas but with inadequate funds and skills for maintenance even these systems cannot be operated effectively. To alleviate this problem a closer exchange is taking place between CAWS and EHD in setting design standards, for maintenance and repairs and for technical assistance where CAWS has locally-based engineers and trained experts, such as at Mazar-i-Sharif, Herat and Kandahar (para 1.12).  -4- Sector Program and Priorities 1.17 The major objective is to supply safe, reliable drinking water to the maximum number of inhabitants as soon as practicable. To do so has meant some concentration by CAWS on the urban areas, but efforts are also being made by EHD and the RDD to attend to the equally legitimate needs of the scattered rural population. This approach should be supported and strengthened, using CAWS as the vehicle for gaining and disseminating its experience throughout the sector in design, maintenance, financial management and improved organiza- tional techniques. 1.18 The Seven-Year Plan contains a program for expanding water supply service in Afghanistan, which is essentially a statement of the intentions of CAWS and EHD, mainly for budget purposes (para. 1.15). Principal constraints to achieving the established goals are staffing, organizational and technical. There is an insufficient number of trained engineers and technicians, poor accounting and storekeeping procedures, little delegation of authority and a need for task definition and the setting of work objectives. 1.19 At present only Jalalabad has a continuous supply. By the end of the Plan period, CAWS should have expanded facilities in four more urban areas under its control (Kabul, Kandahar, Herat and Mazar-i-Sharif) to provide them with 24-hour per day supplies. This target envisages trebling production capacity and doubling the length of the distribution systems outside Kabul. 1.20 By the end of the plan, CAWS expects to complete the four new projects in Ghazni, Khanabad, Charikar and Quala-i-Naw (para 1.12) to service a population of about 140,000. In addition, ten other municipal systems are now being designed or planned. These are listed below (see also Map IBRD 13435). Approximate Development Community Population Stage Laghman (Tigari) 20,000 Being designed Baghlan 35,000 Being designed Maidenshar 20,000 Being designed Samangan 20,000 Being designed Shebergan 24,000 Planned Taluquan 20,000 Planned Tarinkot 20,000 Planned Farah 20,000 Planned Zaranj 20,000 Planned Kunduz 56,000 Planned 255,000 To enable this target to be met, feasibility studies should be undertaken for the six projects in the planning stage. There is a possibility that Canadian International Development Agency (CIDA) may be approached for external assis- tance for this purpose.  - 5 - 1.21 It is the objective of CAWS to ultimately supply all its consumers through private metered connections, to establish its operations on a viable basis and to ensure proper and rational use of scarce water resources. During a transitional period, however, many people will continue to rely upon public standposts, where basic human needs cannot otherwise be supplied. This implies increasing the population supplied by standposts from 10% to 30% and for connections from 15% to 40%, as an immediate target. Levels of urban service generally proposed are 100 lcd by connection and 15-30 lcd by stand- pipes, excluding allowances for commercial and industrial use. 1.22 The EHD intends to extend water service to about 25% of the rural population by 1983 through an additional 400 piped supplies and 4,000 new wells equipped with handpumps but this effort will only be effective if accompanied by improved maintenance procedures, which the organization is now trying to establish. A rural development project in Ghazni Province, presently under preparation for possible IDA assistance, includes a com- ponent to provide about 100 village water supplies. 1.23 The rural water supply program is also being supported by UNICEF which, so far, has provided US$2.0 million of equipment, training and sup- plies since 1971; further assistance by UNICEF is being consolidated. 1.24 The combined staff of CAWS and EHD is about 750, of which about 26 are qualified engineers, some holding post-graduate degrees with public health training abroad. The adequacy of this manpower, by number, skill and profession requires to be reviewed and a start will be made with CAWS, as discussed in para 3.13. Performance in Previous IDA Lending 1.25 IDA Credit 563-AF for US$9.0 million was approved in June 1975 and declared effective on January 23, 1976. It provides for US$8.7 million for improving and expanding Kabul's water supply system and US$300,000 for making sanitation improvements in the Old City of Kabul. 1.26 The water supply component is about 9 months behind schedule but good progress has been made in finalizing detailed design and procurement of materials. Over US$6.0 million is already committed for equipment and the main civil works contracts are out to tender. Institutional improvements are gradually taking place in CAWS. Important changes in the authority's billing, collection and storekeeping procedures have been designed and imple- mentation of these has recently commenced. CAWS has benefited from working closely with its Canadian engineering consultants and the financial advisor, both provided under the CIDA technical assistance program. 1.27 Only recently has any progress been made on the sanitation component with the purchase, by the Kabul Municipality, of some locally manufactured equipment for the removal of night soil from the Old City. As yet, the arrangements for implementing this component are still not properly formalized although a decision has been taken that the EHD, in the office of the Minister  of Health, will be responsible for supervising implementation by the Municipal- ity. This is a constructive and positive step which has overcome an adminis- trative bottleneck opening up the possibility of extending sanitation to other areas of Kabul where this basic need must be met. Government is committed to implementing this, and any enlarged sanitation component, and requested that additional funds be included under this Credit to support its objectives. 1.28 The sanitation component (latrine improvements, human waste collec- tion and disposal) is well within the technical competence of the Municipality, closely supervised as is now intended. The organizational arrangements of this component were reviewed during negotiations and agreement was reached on completing a study not later than December 31, 1978, to ensure its effective and orderly implementation. For the timely completion of the IDA I sanitation component Government has agreed to commence implementation of the recommenda- tions emerging from the study not later than April 1, 1979. The study will also examine what technologies are appropriate and socially acceptable for the combined components and their future operation. Sector Objectives 1.29 A major objective of Credit 563-AF was to establish and build up a water supply and sewerage institution, capable of meeting the needs of Afghanistan and following sound public utility practices. This process has begun and the proposed second project would develop the process still further, by making CAWS responsible for a technically complete and effective water supply system in Kabul and introduce for the first time a limited sewerage component, which can be expanded later in accordance with the sewerage and water Master Plan. 1.30 The achievements expected in respect of the Kabul water supply sys- tem can be extended to CAWS' countrywide operations. Furthermore the princi- ples and lessons learned by CAWS can be applied to the two other agencies active in the sector viz, EHD and RDD. Possibilities exist for future IDA operations outside Kabul, in developing secondary city water supply and waste- water systems. The bilateral agencies, particularly CIDA and Kreditanstalt fur Wiederaufbau (KfW), are understood to be interested in financing studies in the sector and close cooperation with these agencies should be maintained to help in the preparation of feasible projects.  -7- CHAPTER II PROJECT AREA Background 2.01 Kabul, the capital of Afghanistan and its largest city, is the main transportation, commercial and communication center in the country, situated at the junction of the Kabul and Logar rivers, at an elevation of 1,800 meters. It contains a university, a polytechnic, major hospitals, government institutions and important manufacturing facilities. The climate is dry with a mean annual precipitation of 326 mm, of which half may occur as snow. 2.02 The present population of Greater Kabul is approximately 700,000 of which 560,000 is grouped in the urban areas while 140,000 live in a semi- rural situation in contiguous communities. Overall growth rate is estimated at 4% p.a. 2.03 Several development plan reports on Kabul have been published during the last decade but, so far, none have received official approval. The Kabul Municipality's Planning Department, assisted by USSR experts, has been promoting public and private developments in various areas of the city, principally Khair Khana, Khossal Khan, Rahman Mina, Jamal Mina, Sia Sung, Mikro Royan and Wazir Akbar Khan. Some of the planned growth for these areas has not been realized, however; lack of services (particularly inadequate water supplies) may partly account for the shortfall. 2.04 Meanwhile, a considerable amount of development is taking place throughout the city, wherever suitable building land exists. Also, an increasing number of dwellings are being constructed on the steep mountain terrain overlooking the city and well above the normal water supply pressure limits. It is estimated that some 4,000-6,000 may be housed in this area and agreement was reached with CAWS that the needs of these inhabitants will be studied, and reported upon, within 12 months after credit signature. Water Resources 2.05 Kabul now relies mainly on underground water sources for the limited amount of public water available for its inhabitants. These resources have been well researched by foreign experts who have agreed on their adequacy, quality and suitability for public use. Presently, about 22,000 m3/day is delivered into the distribution systems from existing boreholes, plus about 3,000 m3/day from a "karez" at Kharga Lake. In excess of 4,000 m3/day is abstracted for exclusive use of the inhabitants of the Mikro Royan housing development (10,000 inhabitants).  - 8 - 2.06 Four main wellfields (Logar, Afshar, Upper Kabul and Lower Kabul) have an assessed yield in excess of 230,000 m3/day, more than double the anticipated daily demand in 1990. The Logar wellfield, being developed under the IDA I project, represents 56% of the total available resources and the Afshar (Paghman) wellfield, a complementary project aided by the Federal Republic of Germany, about 20%. In the Logar wellfield, drilling and test pumping has confirmed yields in excess of the anticipated 40 1/sec. for each borehole; the equivalent in Afshar field is 30 1/sec. 2.07 In the long-term, some recharge of the underground aquifers might be necessary as Kabul's demand for water increases. Studies have shown this could be achieved by construction of upstream dams on the Kabul and Logar Rivers, for river regulation to enhance the downstream aquifers. The indications are that natural recharge of the aquifers would thus improve the assessed yield by 65% and further increases would be possible if mechanically induced infiltra- tion procedures were adopted. Water Quality 2.08 The source water, found at depths from 30 m - 60 m is alkaline, with a pH range of 7.0 - 8.5. Total dissolved solids vary from 500 - 1,500 milli- grams per liter and the levels for calcium, sulphate, magnesium and chlorides are within the International Standards recommended by WHO for drinking water. Bacteriological examination reveals the deep sources to be uncontaminated. The main danger of well contamination is from human or animal origins and disinfection will be necessary, although it is not being practiced at any of the production wells now in operation. In view of the importance of protecting the wellfields CAWS charter gives it sufficient control over the immediate proximity of the areas which might be adversely affected by urban development. On-going Project (a) Credit 563-AF 2.09 The IDA I project, Credit 563-AF, is on-going and is principally concerned with a major expansion of the Kabul water supply system consistent with the Water Master Plan proposals prepared by the Canadian consultants, Proctor and Redfern International Ltd., (PRIL) subcontractors to WHO/UNDP, as part of a comprehensive Master Plan for Water Supply, Sewerage, Drainage and Solid Waste for the city to the year 2004. The project also includes a small, but significant, component directed at sanitary improvements in the Old City. As a result of discussions with Government, it is proposed to extend the sanitation component under this project by providing an additional US$500,000 under the proposed credit. 2.10 The water supply component consists of developing in the Logar well- field 20 deep boreholes (equipping 10), and provides low lift and high lift pumping with capacity up to 70,000 m3/day, together with transmission and distribution mains to serve the Old City, Wazir Akbar Kahan and Khair Khana. It includes the provision of 10,000 m3 of additional storage and the supply and installation of water meters. The Sanitation Component will provide  vehicles and equipment for human waste collection and disposal and feasible latrine improvements at individual households. (b) Afshar (KfW) Project 2.11 A component complementing the IDA I project is the Afshar project, being financed by the Federal German Republic and technically administered by KfW. This scheme dovetails, and is integrated, with the long range devel- opment plans for supplying water for general needs and is itself mainly concentrated upon serving the Khair Khana area where distribution is being provided under IDA I. The project includes the development of wells to produce 17,300 m3/day; high lift pumping and transmission; and 10,000 m3 of storage. Advantage has been taken by CAWS of the bid results on IDA I to -place orders for pipe materials with suppliers, to facilitate the initial construction effort on the KfW project. The preparation and contracting of the IDA I and KfW financed projects are being closely coordinated, with excellent cooperation between the Canadian and German consultants assisting CAWS. Existing Water Supplies 2.12 The combined production of the present public water supply sources (excluding Mikro Royan) is about 25,000 m3/day and storage amounts to 10,700 m3. The system is capable of maintaining only an intermittent service (4-6 hours daily) to those with access to the system. As much as 30% of the pro- duction may be lost through leakage or waste, especially at public standpipes not closed when the supply fails. A satisfactory remedial works and leak detection program has been prepared by CAWS and has been initiated. 2.13 Kabul's first piped water supply system, built 65 years ago and based on the "karez" from the Kharga lake is still in use but accounts for about only 12% of present production. The original gravity pipeline is in poor condition and a new transmission line has recently been laid by CAWS to maintain the contribution of this source to distribution. 2.14 The most recent major development of the public system took place between 1954 and 1965 under a bilateral agreement between Japan and Afghanistan. This developed a wellfield at Alaudin, provided pumping and distribution, which remains to date, the city's principal source of water supply. Besides this system separate sources have been developed elsewhere, by CAWS, in an attempt to meet the needs of housing developments at Khair Khana and Sia Sung but, in both cases, demand outstrips production. 2.15 Despite inadequate production capacity, extension of the distribution system continues in the areas of Shah Shahid, Rahman Mina, Jamal Mina and Karte Marmurin in an effort to meet public demand with the barest possible service. These extensions, however, are being sized and constructed in accordance with the Water Master Plan proposals and will be fully utilized on the completion of the on-going IDA I and KfW projects.  - 10 - Population Served 2.16 It is estimated that 250,000 urban inhabitants are now receiving partial service through about 6,700 private connections and over 730 stand- pipes. Although 75% of the consumers rely on public standpipes for their supplies, the maximum daily demand cannot be met and this situation will continue until early 1980 when additional production comes on stream (Figure 1). 2.17 Currently all consumers, with private connections, are billed on a flat rate basis, depending on pipe diameter, because (a) supply is intermit- tent, and (b) the existing meters installed are inoperative. CAWS has recently procured some 10,000 new meters under Credit 563-AF to replace the defective units and intends to extend metering to all private consumers and thus rationalize water use by pricing consumption. All flat rate consumers are expected to be phased by March 1980. 2.18 Water supplies to the urban poor will continue to be met by main- taining and extending standpipe service as a basic community need. While the overall percentage receiving private connection service is expected to increase fivefold over the next decade, about 60% of the total population at the end of the period will still depend on standpipe supplies; at least 100,000 of the inhabitants now using the existing facilities may be considered as urban poor. 2.19 The sanitation component, included in this project and under Credit 563-AF, is expected to benefit about 300,000 urban poor inhabitants in Kabul. A broad definition of urban poverty is based on income distribution statistics obtained from the Ministry of Planning, which suggest that in 1968/69, roughly 39% of Kabul's urban population was living in absolute poverty (i.e. below Afs 2,634 p.c., based on a consumer expenditure survey, coupled with an assumption of minimum nutrient requirements). This percentage estimate is supported by data on housing categories derived in a consultant study prepared for master planning purposes. Despite a rise in GNP since these studies were made, the percentage estimate of urban poor is still considered valid.  - 11 CHAPTER III THE BENEFICIARY Introduction 3.01 The Democratic Republic of Afghanistan will be the borrower of the proposed IDA Credit of US$16.5 million and will on-lend US$13.0 million of the Credit to CAWS for a period of 25 years, including a 5-year grace period, with interest at 8% p.a. US$3.0 million will be passed on to CAWS as part of the Government's contribution to its equity capital. The remaining US$0.5 million will be passed on by Government to the Municipality, as a grant, for the sani- tation component. CAWS is also the principal beneficiary of the earlier IDA Credit (563-AF). Organization and Management 3.02 CAWS was established in 1974 as a quasi-autonomous public enterprise under the Law of Tasadys (State Enterprises). It is responsible for water supplies to all of Afghanistan's urban centres. At present, its operations are confined to Kabul and about eight other principal towns. 3.03 CAWS Charter provides for the Minister of Public Works to be its chief executive, responsible for approving its work program, budget, regula- tions and staffing arrangements. Day-to-day operations of CAWS are the responsibility of its president who, together with technical and adminis- trative vice-presidents comprise an executive board. 3.04 The Law of Tasadys has recently been revised, attempting to clarify some concepts of autonomy, but it is still very restrictive, and gives little real authority to the enterprises without reference to Government. However, since CAWS will have to rely for several more years upon substantial financial support from Government for its operations, it is premature and unrealistic for it to claim any large measure of autonomy. 3.05 Along with these administrative constraints, CAWS operates under severe limitations as to finance, numbers and quality of staff, equipment and technical resources. It is also hampered by tedious bureaucratic procedures. Considering these drawbacks, CAWS performance since its establishment has been somewhat encouraging, as evidenced by the construction work undertaken by its own staff in Kabul and in provincial cities. 3.06 CAWS has a budgeted staff of just under 700, of which approximately 250 are officials. Under the Tasady Law, the CAWS staff are classified as civil servants. Although this provides a degree of security for the personnel themselves, it creates some recruitment problems for CAWS. For professional staff, such as engineers and accountants, CAWS must compete with the private sector, which pays much higher salaries. Consequently, many CAWS posts have remained unfilled, or are occupied by staff lacking the necessary qualifications and experience. CAWS, especially in the administrative and accounting departments, employs a significant number of long-serving civil  - 12 - servants well versed in routine government book-keeping and clerical procedures but unable to adapt easily to the needs of a semi-autonomous enterprise. Fur- thermore, the staff of CAWS are liable to be moved to other government depart- ments. Whilst a number of the more senior technical staff are fluent in English few of the administrative and accounting staff have any foreign language capability. 3.07 Taking a narrow approach, the solution would appear to be to try to free CAWS from the civil service provisions of the Tasady Law, thus enabling it to pay more attractive salaries for needed professionals. Unhappily, in the public sector in Afghanistan, there is a shortage of experienced staff, so it is unrealistic, at present, to expect Government to exacerbate the situation by creating salary differentials which would have deleterious effects on other sectors. The need is therefore for training, to build up a reservoir of skilled professionals. Training 3.08 CAWS long-term success depends heavily on the development of an adequate training program. Most of the training will have to be done within CAWS, with very limited short visits abroad, by carefully selected staff, to become acquainted with specialist techniques. 3.09 For technical staff, this has already occurred, to some degree, because of their association with CAWS engineering consultants, PRIL, whose continued presence in Kabul over the next few years should create further opportunities for staff development. To the extent that CAWS technical staff develop specialized skills their careers will become increasingly oriented towards CAWS objectives and (provided rewards are adequate) this should encourage them to stay. 3.10 With administrative and accounting staff however, almost the reverse is true. Shortage of skills, particularly in accounting, is part of a general dearth of talent throughout the economy, not only in the public sector. Although it is vital for CAWS to develop an accounting capability beyond basic book-keeping, a large proportion of staff so trained may be tempted towards the higher salaries of the private sector, or possibly find themselves moved elsewhere within Government service. However, there is little alternative to patient persistence in tackling this problem, as many other enterprises have discovered. 3.11 Under CIDA/WHO auspices, a number of fellowships have been provided for selected CAWS staff to make short visits abroad. The visits, which have been almost exclusively for technical staff, have provided useful insights into specialist techniques. There is, however, a danger of these fellowships being sought after because of the attractiveness of the foreign travel, rather than for their training content. They are also perceived as the most important source of training, rather than as supplementary to the less glamourous, but more important and basic, local training programs.  - 13 - 3.12 The Project Agreement for Credit 563-AF provided for CAWS to appoint a training officer and draw up a training program for submission to the Bank. Although a training officer was designated, no program has yet been submitted. It is clear that professional assistance in this matter is required. CAWS has therefore been asked to seek the advice of its consultants to report on its training needs and to outline a manpower development program. Additional assistance in the preparation of such a program is being given by IDA. Agree- ment has been reached that CAWS will, by March 31, 1979 prepare and submit to IDA an initial training program dealing with its most urgent needs. There- after, CAWS will prepare and submit other training programs to IDA from time to time as necessary. Following the receipt of comments on these training programs from the appropriate Government departments and from IDA, CAWS will implement such parts as are agreed upon. Accounting 3.13 A review of CAWS accounting arrangements should be seen against the background of practices followed throughout the public sector. Rudimentary budget-oriented cash concepts are followed, with approval of even the smallest transactions requiring the signature of many different officials. As an example, cashing a check at a bank can sometimes take up to an hour. This attempt to allocate duties among so many, often results in no single official accepting responsibility, or being held accountable, for any transaction or procedure. 3.14 Since its inception, CAWS has operated a governmental accounting system, along lines which are inappropriate for a quasi-autonomous public enterprise. This was recognized in the first IDA project and agreement was reached that a commercial accounting system would be implemented not later than December 23, 1978 (three years from effectiveness). This condition is still relevant and efforts have been made by CAWS to implement substantial changes in its accounting arrangements from the beginning of its current fiscal year, March 21, 1978. 3.15 Under the CIDA technical assistance program, CAWS has been provided with a Canadian financial adviser, who has been designing, and preparing for implementation, the new accounting procedures referred to above. Most urgent was the establishment of new arrangements for billing and for stores account- ing, both of which were until very recently, extremely unsatisfactory. Some of these improvements, significantly in the billing system, have now started to operate; other planned improvements will follow. 3.16 The term of employment of the present financial adviser expires in August 1978. It is essential, if the proposed improvements are to be properly implemented, and staff trained to operate them, for a financial adviser to remain in post until at least about the end of 1980. Agreement has been reached that CAWS will continue to employ such an adviser until December 31, 1980.  - 14 - 3.17 It is expected that a new CIDA aid package for the sector, which has been recently agreed with Afghanistan, will provide for this assistance. This aid package for the sector, totalling Cn$ 5.75 million, was agreed between the Governments of Afghanistan and Canada on March 28, 1978. This agreement pro- vides for necessary technical assistance for the final design, bid evaluation and construction supervision of this project and continuing the services of a financial advisor for CAWS; also included is the construction supervision of the on-going IDA project. Audit and Insurance 3.18 The Tasady Law requires that CAWS be audited by the Ministry of Finance. The Ministry does not at this time have the necessary numbers of qualified and experienced staff to carry out an effective audit. The Project Agreement for Credit 563-AF provides for CAWS to have its financial statements audited by independent auditors acceptable to the Association; agreement has been reached that these arrangements will continue. For this purpose suitably qualified auditors practice in Kabul. 3.19 Government normally operates a self-insurance policy for its agen- cies. There is a nationalized insurance company available to handle excep- tional risks.  - 15 - CHAPTER IV DEMAND ASPECTS Population Forecast 4.01 The population of Greater Kabul, now about 700,000 is expected to grow to 1,250,000 by 1990, representing an overall growth of 4% p.a.; in the urban areas the increase averages 5.5% p.a. The Master Planning Studies undertaken by PRIL considered a 30-year planning period and proposed staged works of two 5-year and two 10-year periods. The proposed water component broadly caters for the first two stages and is directed at areas where popu- lation growth is rapid; the 140,000 now living in the selected areas is esti- mated to increase to 175,000 by 1982, when the project becomes operational. In the absence of an official census, the consultant has made an analysis of population district by district to maximize service at least cost. In the areas to be served, 65,000 (37%) are estimated to be urban poor and will receive standpipe service. 4.02 There is a wide variation in housing densities in Kabul with popula- tion per hectare varying from a low of 55 to a high (in the Old City) of 620. An average house occupancy rate of 9.2 persons has been determined for popula- tion purposes. 4.03 About 32,000 inhabitants would benefit in the area proposed to be sewered, namely Shauri Nau and the Central Business District. The popula- tion in the area is composed of a mixture of poor to upper middle class; the density is estimated at over 13.6 persons per house. The area contains many small shops and businesses, is at the hub of Kabul's commercial life and is an attraction for tourists, who come to buy locally made handicrafts, which provide important sources of income at all social levels. Since it is already crowded, no significant population increases are anticipated but peripheral expansion is continuing. Forecast of Demand 4.04 As water supply is on an intermittent basis, metering is non-existent and system losses have not been quantified, there is no historical record of consumption which can be used to predict future demand. The one public water supply facility giving a 24-hour/day service, where measurements could be made, is at the self-contained Mikro Royan housing estate. In this estate, house rents include the provision of water and sewerage service. Here, measurements revealed a gross consumption of 360 lcd which, allowing for loss and wastage, could imply a net use of 250 lcd. This consumptive use is considered excessive for Kabul and untypical of the likely demand pattern where the supply is metered and consumers pay for water. 4.05 In estimating water demand, the consultants used assumptions which would allow for reasonable water use regulated by price and availability.  - 16 - Furthermore, it is the intention of CAWS to pursue a vigorous metering policy for privately connected consumers, while extending the public service to all others as a necessary interim measure. On this basis, the following demands are projected. Consumer Type Short Term Long Term