Bolivia - Santa Cruz Water Supply and Sewerage Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Report No. 2409c-BO BOLIVIA SANTA CRUZ WATER SUPPLJY AND SEWERAGE PROJECT STAFF APPRAISAL REPORT MAY 29, 1979 Water Supply and Sewerage Division Latin America and the Caribbean 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 Peso Boliviano US$1.00 = $b20.00 $bl.00 US$0.05 MEASURES 1 mm millimeter = 0.04 inches 1 cm = centimeter = 0.39 inches 1 m = meter = 3.28 feet 1 km = kilometer = 0.62 miles 1 1 liter = 0.26 US gallons 1 m3 = cubic meter = 264 US gallons 1 m3/sec cubic meter = 22.82 MGC = million US gallons = per second per day mg/l = milligram per litre 1 ha = hectares = 2.47 acres ABBREVIATIONS AND ACRONYMS AAPOS = Administracion de Agua Potable y Obras Sanitarias de Potos' AROS-Beni = Administraci6n Regional de Obras Sanitarias - Beni AROS-Tarija = Administracion Regional de Obras Sanitarias - Tarija COMIBOL = Corporacion Minera de Bolivia CONEPLAN = Consejo Nacional de Economia y Planeamiento CORPAGUAS = Corporaci6n de Agua y Saneamiento DIU = Direccion de Infraestructura Urbana t)SA = Division de Saneamiento Ambiental ELAPAS = Empresa Local de Agua Potable y Alcantarillado de Sucre IDA = International Development Association 'IDB = Inter-American Development Bank IBRD = International Bank for Reconstruction and Development INE = Instituto Nacional de Estad'sticas MSP = Ministerio de Salud Publica MUV = Ministerio de Urbanismo y Vivienda PAHO = Pan American Health Organization SAGUAPAC = Servicios de Agua Potable y Alcantarillado de Santa Cruz SAMAPA = Servicios Municipales de Agua y Alcantarillado de la Paz SELA = Servicio Local de Agua de Oruro SEMAPA = Servicios Municipales de Agua Potable y Alcantarillado de Cochabamba UNDP = United Nations Development Programme UNICEF = United Nations Childrens Emergency Fund USAID = United States Agency for International Development  FOR OFFICIAL USE ONLY BOLIVIA STAFF APPRAISAL REPORT SANTA CRUZ WATER SUPPLY AND SEWERAGE PROJECT TABLE OF CONTENTS Page No. I. GENERAL ................................................ 1 II. THE SECTOR ............................................ 1 Background ..1.......................................... Geography and Climate ................................ 1 Water Resources .............. .2 Population and Service Lev(els ..... ........... 2 Health Conditions ..................................... 3 Economic Conditions ..................... 4 Institutional Aspects .............. ................... 4 Financial Aspects ...... ............................... 5 Other Aspects ....................... 6 Government Policies and Objectives ............... 6 The Bank's and IDA's Role in the Sector ............... 7 III. THE BENEFICIARY ................... 8 Introduction ................................ . 8 Regional Development .................... 8 Legal Statutes (SAGUAPAC) ............................. 8 Organization and Management ..... ............. 9 Personnel ...................... ....................... 10 Accounting ....... I .................................... 10 Billing and Collection ................................ 10 Inventories ........................................... 11 Auditing .............................................. 11 Data Processing ....................................... 11 SAGUAPAC's Insurance .............. .. .................. 12 This report has been prepared by Messrs. Rene Costa, Financial Analyst, Joseph Freedman, Engineer, and Jorget Infante, Financial Analyst, Consultant. Mr. Jorge Culagovski, Economist, participated in the preparation of the economic and social justification. The project was appraised in December 1978. 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.  -2- TABLE OF CONTENTS (Continued) Page No. IV. POPULATION, SERVICES AND DEMAND ....................... 12 Introduction ........ ........... .. ..................... 12 Population of Santa Cruz ............. .. ............... 12 Water Supply System ............... .. .................. 12 Sanitary Sewer System ....... .......................... 13 Storm Sewer System ...... .......... .. .................. 13 Population Served ....... ......... .. ................... 14 Consumption Forecasts .............. .. ................. 15 V. THE PROJECT ........................................... 16 Project Origin ........................................ 16 Project Objectives and Benefits ....................... 16 Description of the Project ............................ 17 Least Cost Solution ................................... 18 Project Cost and Investment Schedule .................. 19 Financing ............................................. 19 Implementation ........................................ 20 Procurement ........................................... 21 Disbursements ......................................... 22 Advance Contracting and Retroactive Financing .... ..... 22 VI. FINANCIAL ANALYSIS .................................... 23 Past Finances ....... ........... .. ..................... 23 Revenues ....................... ....................... 24 Financing Plan ....... ........... .. .................... 25 Future Finances ................... .................... 26 Monitoring Indicators .............. .. ................. 27 VII. ECONOMIC AND SOCIAL ANALYSIS ........... .. ............. 29 Introduction .......................................... 29 Least Cost Solution ................................... 29 Incremental Rate of Return ............................ 29 Average Incremental Costs and Tariffs ................. 30 Impact on the Urban Poor .............................. 31 Project Sensitivity and Risks ......................... 31 Environmental Implications ............................ 32 VIII. AGREEMENTS RFACHED AND RECOMMENDATIONS ....,........... 32  -3- TABLE OF CONTENTS (Continued) LIST OF ANNEXES 1. Assumption for Financial Projections, Detailed Financial Projections, and Monitoring Indicators 2. In-house Plumbing and Revolving Fund 3. Summary of Terms of Reference and Costs for Technical Assistance Program and Studies 4. Basic Data w 5. Investment Schedule 6. Construction Schedule 7. Estimated Schedule of Credit Disbursements 8. Present and Proposed Tariffs and Fixed Charges 9. Marginal Cost Analysis and Incremental Rate of Return Calculation 10. Incremental Rate of Return for Computer 11. Urban Poor Distribution in the City of Santa Cruz 12. Organization Chart 13. Selected Documents and Data Available in Project File LIST OF TABLES 4.1 Water Connections (1978) 5.1 Construction Schedule 5.2 Project Financing 6.1 Summary and Financial Statements (1976-78) 6.2 Financing Plan 6.3 Summary of Financial Statements (1977-86) LIST OF MAPS No. 14126 - City of Santa Cruz Wiater Supply and Distribution Network No. 14127 - City of Santa Cruz Sewerage System   BOLIVIA SANTA CRUZ WATER SUPPLY AND SEWERAGE PROJECT STAFF APPRAISAL REPORT I. GENERAL 1.01 The Ministry of Urban Affairs and Housing (MIX), the Corporacion Regional de Desarrollo de Santa Cruz (Corporation), and the Water Supply and Sewerage Service of Santa Cruz (SAGUAPAC) have requested Bank financing for b the Santa Cruz Water Supply and Sewerage Project. This would be the second Bank operation in the sector in Bolivia. 1.02 Initially, MUV had sought to have the funds under Loan 1324-BO allocated to the cities of Sucre and Potosi transferred to the proposed Santa Cruz Project. MUV withdrew Sucre and Potosi from the Loan because their water and sewerage authorities were unable to meet certain conditions of Loan 1324-BO. After studying the matter, the Bank and the Bolivian Government agreed that it would be preferable to consider a new operation for Santa Cruz and to cancel the Loan funds allocated to Sucre and Potosi. II. THE SECTOR Background 2.01 The water supply and seweraLge sector of Bolivia was studied by a WHO/IBRD mission which visited Bolivia in October 1973 and issued a sector report on April 15, 1975. This information was updated in the appraisal report of Loan 1324-BO. Both reports were based on official population data published by the National Economic and Planning Council and the 1970 census. A second WHO/IBRD mission in December 1978 updated the 1975 sector report using new population figures from the latest census of September 1976. Geography and Climate 2 2.02 Bolivia, with a landlocked area of about 1,100,000 km , is bordered by Chile and Peru to the west, Brazi:L to the north and east, and Argentina and Paraguay to the south. The Andean mountains are at their widest here and form two ranges. One range, the Western Cordillera, has peaks between 5,800 and 6,500 m in height. To the east of this range lies a lofty plateau, the bleak Altip ano, much of it 4,000 m above sea level. It covers an area of some 100,000 km , or nearly 10% of the country's total area, and contains some 75% of the population. During the winter, temperatures on the Altiplano fall below freezing point, but during the day the sun raises temperatures to over 200C. The average rainfall on the Altiplano is from 400 to 700 mm and comes mostly from the storms of December and January.  - 2 - 2.03 At the eastern edge of the Altiplano the sharp facade of the other range, the Eastern Cordillera, rises with peaks higher than 6,000 m. Their far sides fall away in a series of semi-tropical mountain valleys known as yungas to the northeast and toward the Amazon Basin. These valleys are at altitudes of about 3,000 m and less and have average temperatures of between 160C and 18 0C. Annual rainfall is from 700 to 800 mm with the heaviest rain from December to February. The fertile valleys in which lie Cochabamba, Sucre, and Tarija follow the yungas further below. 2.04 The third major part of Bolivia, the low-land tropics or the llanos, stretch from the foothills of the Eastern Cordillera to the frontiers with Brazil, Paraguay, and Argentina. They take up 70% of the total area but contain only a thin sprinkling of its population. The land slopes gradually from about 450 m to 200 m or less at the borders. Rainfall is high but seasonal and large stretches of land suffer from alternate flooding and drought. The climate is hot, with average temperatures ranging from 23 C to 27