Jordan - Water Supply and Sewerage Project

Document iOf The World Bank FOR OFFICIAL USE ONLY ..Li Report No. 6056-JO STAFF APPRAISAL REPORT HASHEMITE KINGDOM OF JORDAN JORDAN WATER SlUPPLY AND SEWtERAGE PROJECT March 28, 1986 Water SupplY and Sewerage Division Europe, Middle East and North Africa Regional Office FThis 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 = Jordan Dinar (JD) JD 0.370 - US$1.00-i/ 3D 1.00 = US$2.70 JD 1.00 = 1,000 fils MEASURES AND EQUIVALENTS Kilometer (km) 0.62 mile Square Kilometer (km2) 0 0.386 square mile 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 Meter per second (m3'sec) = 22,800 US Gallons per day Liter (1) - 0.264 US Gallons Liter per second (1/sec) = 22,800 US Gallons per day Liter per capita per day (lcd) = 0.246 US Gallons per capita per day Milligram per liter (mg/l) - 1.0 part per million ABBREVATIONS AND ACRONYMS AWSA - Amman Water and Sewerage Authority GOJ - Government of Jordan JVA - Jordan Valley Authority KfW - Kreditanstalt fuer Wiederaufbau LRAIC - Long Run Average Incremental Cost MCM - Million Cubic Meters MOP - Ministry of Planning NRA - Natural Resources Authority PMCSU - Project Management and Constructicn Supervision Unit USAID - United States Agency for International Development WA - Water Authority of Jordan WSC - Water Supply Corporation GOJ'S AND WA'S FISCAL YEAR JANUARY 1 - DECEMBER 31 1/ As of December 1, i935  FOR OFFIAL USE ONLY STAFF APPRAISAL REPORT HASHEMITE KINGDOM OF JORDAN JORDAN WATER SUPPLY AND SEWERAGE PROJECT TABLE OF CONTENTS Page No. LOAN AND PROJECT SUMMARY ......................... .I I. SECTORAL CONTEXT ..*..................................... 1 Background ...................... , ............ I Water Resources ............................. . ..... .... I Water Supply and Sewerage .......... ........ ............ 2 Government Strategy in the Sector ....................... 2 Institutional Aspects ....... .................... 3 IDA/Bank Role in the Sector ............................. 4 Rationale for Bank Involvement ...... .................. 4 II. POPULATION, SECTOR SERVICE AND DEMAND IN PROJECT AREA .... 5 Project Area ............................... 5 Population Projections .................................. 5 Water Sources Development.. 6 Sewerage and Sewage Disposal. 8 Population Served and Standard of Services in Project Area . .9 Demand for Services ..10 III. THE PROJECT........... 10 Genesis . .10 Project Objectives ..12 Technological Aspects .. 13 Project Composition ....... ............ 14 Cost Estimates.... . ..... 14 Project Financing Plan ..16 Project Implementation .................................. 17 Procurement .. 18 Disbursement .. 19 This report is base, ;r, the findings of an appraisal mission to Jordan in November/December l19b:. Mission members included Lars Rasmusson and Arun Banerjee. This document has a restrktod distribution and may be used by recipients only in the performance of their ofMfcial duties. Its contents may not otherwise be disclosed without World Bnk authorization.  TABLE OF CONTENTS (ContinueD Page No. IV. THE BENEFICIARY .................... ......... 20 Organization and Management ....... .................... 20 Institutional Development .............. O-* ..... * .... 21 Staffing a'nd Training..... 21 Billing and Collection ..... 22 Accounting . ........ .. ...22 Audit ...... . . .......... 23 Insurance ... . ... . . ...... . .. 23 V. FINANCE ...........23 Past Performance and Present Position . .23 Tariff - Cost Recovery.......... 24 The WA's Sources and Applications of Funds. 25 Future Financial Performance ................ 26 VI. ECONOMIC ANALYSIS AND PROJECT JUSTIFICATION . .28 Socio-Economic Analysis........ . ... 28 Average Incremental Costs . .29 Affordability ............. .29 Institution Building....... 29 Project Risks . ......... 30 VII. AGREEMENTS REACHED AND RECOMMENDATIONS ...... 30 ANNEXES ANNEX I - Table 1 - Sewerage Service Levels .32 - Table 2 - Investment Plan (1986-90) .33 - Table 3 - Cost Estimates ........................ 34 - Table 4 - Monitoring Criteria for Water Authority Operations .35 - Table 5 - Estimated Schedule of Disbursements 36 ANNEX 2 - Table 1 - Current Water and Sewerage Tariffs 37 - Table 2 - Income Statement Water Authority .. 39 Table 3 - Sources and Application of Funds Water Authority .40 - Table 4 - Balance Sheet-Water Authority 41 - Table 5 - Economic Rate of Return. 42  TABLE OF CONTENS (Contnued) Page No. ANNEX 3 Project Components ...... ........ ............. . 43 ANNEX 4 Assumptions Used in Financial Projections .............. 47 ANNEX 5 Additional Information Available in Project File ....... 48 CHARTS Chart No. 1 - Project Implementation Schedule ............49 Ch..t No. 2 - Organizational Chart of the Water Authority .50 MAPS IBRD No. 19509 - Jordan - Water Sources and Supplies to Municipal Systems IBRD No. 19510 - Jordan - Greater Amnan Area Sewerage and Sewage Disposal Systems IBRD No. 19511 - Jordan - Jerash Area Sewerage and Sewage Disposal Systems  HASHElITE KINGDOM OF JORDAN JORDAN WATER SUPPLY AND SEWERAGE PROJECT Loan and Proiect Summary Borrower: The Hashemite Kingdom of Jordan. Beneficiary: The Water Authority of Jordan (WA). Amount: US$50.0 million equivalent. Terms: 15 years, including three years of grace, at the standard variable interest rate. Relending Terms: Same as the Bank loan. The WA will bear the foreign exchange and the interest rate risks. Project Description: The project, which is part of the Government's high priority program to improve the water supply and sewerage services in Jordan, would include: (i) extension and rehabilitation of about 450 km of water mains; (ii) construction of one service reservoir and two pumping stations; (iii) construction and extension of about 365 km of trunk and collection sewers; (iv) construction of three and extension of two sewage treatment works; (v) supply of equipment for works operation and maintenance and water sources monitoring; and (vi) consultant services for engineering, construction supertision and water supply systems control. The project would continue the institutional development efforts started under previous Bank loans. The main beneficiaries of the project would be low and middle-income families. Since the WA is reasonably well established, project preparation is at an advanced stage and because previous experience in project execution has been very good, no particular risks are foreseen during project executiun or in reaching the project objectives.  Local Foreign Total -(US$ Millions) Estimated Cost*: Water Supply 5.81 13.51 19.32 Sewerage 12.68 12.68 25.36 Sewage Treatment Works 3.14 6.59 9.73 Equipment - 6.76 6.76 Consulting Services and Training 1.49 0.27 1.76 Land Acquisition 0.41 - _0.41 Base Cost 23.53 39.81 63.34 Physical Contingencies 2.19 3.30 5.49 Price Contingencies 6.70 11.41 18.11 Total cost 32.42 54.52 86.94 Interest During Construction - 9.45 9.45 Total Financing Required 32.42 63.97 96.39 Financing Plan: Proposed World Bank Loan - 50.00 50.00 Government Contribution 30.55 13.97 44.52 Customer Contribution 1.87 - 1.87 Total Financing 32.42 63.97 96.39 Estimated Disbursements: Bank FY 1986 1987 1988 1989 1990 1991 1992 1993 US$ Million -