Mozambique - Second Roads and Coastal Shipping Project

Document of The World Bank FOR OFFICIAL USE ONLY Repowt No. P-16-MOZ MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 136.2 MILLION TO THE REPUBLIC OF MOZAMBIQUE FOR A SECOND ROADS AND COASTAL SHIPPING PROJECT March 15, 1994 MJ CR(OARAI- IC Report No. MUZ yp.: MOP Infrastructure Operations Division Southern Africa Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its content may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENT (as of January 1, 1994) Currency Unit = Mozambican Meticais US$1.00 = Mt 5,000 FISCAL YEAR January 1 to December 31 WEIGHTS AND MEASURES 1 meter (m) = 3.2808 feet (ft) 1 kilometer (km) = 0.6214 miles (mi) GLOSSARy OF ABBREVIATIONS ADB = African Development Bank BM = Banco de Mocambique CFD = Caisse Franaise de D6veloppement CIR = Country Maintenance Review DEP = Provincial Department of Roads and Bridges, DNEP DNEP = National Directorate of Roads and Bridges ECMEP = Provincial State Enterprise for Construction and Maintenance of Roads and Bridges EEC = European Economic Community ERR = Economic Rate of Return ESRP = Economic and Social Rehabilitation Program FRP = Feeder Roads Program FY = Fiscal Year GDP = Gross Domestic Product GOM = Government of Mozambique ICB = International Competitive Bidding IDA = International Development Association IRP = Integrated Road Project KtW = Kreditanstalt fur Wiederaufbau (Germany) LCB = Local Competitive Bidding MCA = Ministry of Construction and Water OED = Operations Evaluation Department PDP = Priority Districts Program RMI = Road Maintenance Initiative ROCS = Roads and Coastal Shipping Projects RSA = Republic of South Africa USAID = United States Agency for International Development FOR OFFICIAL USE ONLY REPUBLIC OF MOZAMBIQUE SECOND ROADS AND COASTAL SHIPPING PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Mozambique Beneficiaries: Department of Roads and Bridges Ministry of Construction and Water Amount: SDR 136.2 Million (US$188 million equivalent) Terms: Standard IDA terms with 40-year maturity Estimated Financing Plan: US$1il % IDA 188.0 23.1% ADB 83.4 10.2% EEC 97.9 12.0% USAID 25.0 3.1% CFD/RSA 17.0 2.1% BADEA 14.9 1.8% Kuwak FuWd 14.0 1.7% KfW 9.0 1.1% FRP Donors 14.6 1.8% Phase I Don 181.8 22.3% Govemmnt 169.0 20.8% Total 814.6 100.0% Poverty Category: Program of Targeted Interventions Economic Rate of Return: 45% average Staff Appraisal Report: No. 12580-MOZ Maps: IBRD Nos. 25598 and 25599 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise be disclosed without World Bank authorization. MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MOZAMBIQUE FOR A SECOND ROADS AND COASTAL SHIPPING PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed development credit to the Republic of Mozambique for SDR 136.2 million (US$188 million equivalent) to help finance a Second Roads and Coastal Shipping Project. The proposed credit woul6 be on standard IDA terms with a maturity of 40 years and would help finance the Government of Mozambique's (GOM) five year road sector rehabilitation program, including road rehabilitation and maintenance, engineering services and capacity building. 2. Background. Prolonged insecurity, periodic drought, and ineffective centralized planning and economic management since 1975, brought about widespread economic chaos and human suffering in Mozambique. Many of the rural population either fled the country or took refuge in urban centers, with resulting overcrowding, chronic unemployment, poverty and famine. From 1975 to 1986, overall agricultural production fell by about 30% and exports by nearly 75%. Today, Mozambique has the lowest per capita GDP in the world. Since 1987, the Government of Mozambique (GOM) has been addressing the major macroeconomic and fiscal instabilities, and has established appropriate incentives for growth. Early successes, such as a reversal of the collapse in production and exports and the achievement of an annual real growth rate of 5.4% in GDP from 1987-1990, did not continue into the 1990s as the economy has stagnated, due in large part to the continued insecurity. In October 1992, a peace accord was signed. The reconstruction of the Mozambican economy is now an urgent task. Reduction in poverty and growth of the economy will depend on the recovery of the agricultural sector, which accounts for roughly 50% of GDP and 80% of both employment and export earnings. Given the terrible condition of the transport network, the most important requirement for recovery of agricultural production and efficient distribution of marketable surpluses is the restoration of reliable and efficient transport services. 3. Although only limited data exists on the status of the network, it is estimated that less than 10% of the national network of public roads (which comprises some 5,300 km of paved roads and 23,900 km of earth/gravel roads) is now in good condition, and more than one-third currently is not transitable on a regular basis. The poor condition of the road network is due historically to: (i) lack of security which has made regular maintenance impossible; (ii) inadequate institutional capacity to manage the network; (iii) inefficient operational policies and procedures, including the virtual abandonment of systematic maintenance, lack of works planning and programming, very weak capacity of the private local construction firms, poor equipment maintenance, and cumbersome regulations for procurement; and (iv) lack of adequate, assured funding for road maintenance. In addition, the poor condition of the trucking fleet limits transportation services. 4. Sector Organization and Strategy. GOM's Transport Sector Strategy emphasizes supporting the Economic and Social Rehabilitation Program (ESRP) and, more specifically, the Priority Disticts Program (PDP). The overall objectives in the transport sector are to: (i) support agriculture in priority districts; (ii) generate foreign exchange from the transit corridors; and (iii) allow parastatals to become financially self sustaining. The national network of public roads is managed by DNEP (the National Directorate of Roads and Bridges), which has developed a Road Recovery Strategy which focuses on: (i) the reform of the regulatory and policy environment; (ii) the strengthening of institutional capacity; and (iii) the restoration of priority road links (improving access to marketing for agricultural produce and -2- imports), through minimal cost rehabilitation and deferred maintenance works. The First Roads and Coastal Shipping Project, ROCS-1 (Credit No. 2374-MOZ) is aimed at policy reform and institutional capacity building ((i) and (ii) above), but does not include any major road rehabilitation ((iii) above). Under ROCS-1 satisfactory progress is being made with respect to: (a) developing the institutional capacity in the roads sector, including a comprehensive institutional capacity building, staffing, and manpower development plan; (b) establishing an adequate road sector policy and regulatory framework; (c) strengthening road financing; and (d) reforming the trucking industry. 5. Project Objectives. The primary objective of the project is to contribute to the restoration of economic growth through: (i) improving road transport and protecting selected past road investments by rehabilitating priority roads and eliminating much of the huge backlog of periodic maintenance, and resuming regular maintenance; the goal is to restore serviceability and maintainability to the 1973 level by 2000, with 85% of the paved network and 60% of the unpaved network in good or fair condition, compared to 50% of the paved network and 15% of the unpaved network at present; and (ii) further strengthening the capacity of the Road Sector, by continuing the regulatory reform and institution building initiated under ROCS-1, to ensure effective planning and monitoring by the government, and by the developoent of private sector contractors and operators. 6. Project Description. The project comprises the government's agreed roads investment program for the five years 1994-1998, coordinating all donor financed initiatives in the sector through discrete parallel subprojects. Due to uncertainty surrounding projected agricultural development and road conditions, only the first two years of the program have been defined and appraised in detail, with the overall scope of the five-year program and an illustrative program defined and appraised for years 1996- 1998. A major review towards the end of the second year of the program will review physical and institutional progress and set out a more explicit program for the following three years. The project would include: (a) a civil works prgram (US$750.6 million, or 92% of project costs) comprising: (I) emergency rehabilitation or "backlogged" maintenance of about 11,700 km of mainly unpaved roads, about 3,200m of Bailey Bridges and a road signing program in all 10 provinces; (ii) rehabilitation of about 3,450 km priority trunk roads; (iii) labor based reconstruction of about 3,250 km of feeder roads; and (iv) current routine and periodic maintenance of that portion of the network that is in good or fair condition; (b) Engineering Services (US$50.1 million or 6% of project costs), such as detailed feasibility studies, design studies and supervision of civil works in support of the project; and (c) the continuation of the ROCS-1 Institution Building Program (US$13.9 million or 2% of project costs) including the extension of limited technical assistance originally included in ROCS-1, assistance to the Local Road Contracting Industry, and short term assistance in engineering, policy and management issues and logistical support to DNEP and the DEPs (including office equipment, vehicles, laboratory equipment and housing). A breakdown of the costs and the financing plan are shown in Schedule A. The methods of procurement and the disbursement schedule are shown in Schedule R. A time-table of key processing events and the status of Bank Group Operations in Mozambique are shown in Schedules C and D, respectively. The Staff Appraisal Report, No. 12580-MOZ dated March 15, 1994, is attached, as well as maps numbers 25598 and 25599. 7. Project Implementation. Project investments would be managed by the Ministry of Construction and Water (MCA), through the National Directorate of Roads and Bridges (DNEP). No new agencies would be created. DNEP has experience implementing the IDA funded ROCS-1 Project and Urban Rehabilitation Project (Credit No. 1949-MOZ), where it has performed satisfactorily and its institutional capacity is steadily improving. Priority setting will continue to involve significant input from provincial authorities. The vast majority of road works will be carried out by contractors. A Project Launch Workshop, annual project reviews, and a comprehensive mid-term review (by September 1995) will be carried out. Representatives of local contractors, truckers and the agricultural sector will be part of an Advisory Board to be created for DNEP and will participate in the annual reviews. Surveys will be -3- undertaken annually of the contracting, consulting, trucking and agricultural industries to determine their changing needs and the extent to which these are being met by the project. Designs and procurement are well advanced for major components in the first year of the program. To facilitate disbursements, a Special Account will be established in a commercial bank, and an initial deposit of up to US$14 million will be made from IDA funds after credit effectiveness based on projected requirements. IDA will retroactively finance up to US$8 million of GOM expenditures for emergency resealing contracts on major national roads signed prior to credit signature, but after August 31, 1993. This is justified since delays in commencing this work would result in severe deterioration of the condition of these road sections due to increased traffic on previously unmaintained roads. 8. Project Sustainability. Sustainability is enhanced by: (i) a long term comprehensive capacity building and training program and initiatives to start to address the GOM staff retention problem; (ii) creaticn of a supportive policy environment (especially for road contractors and equipment management); (ii) establishment of a reliable and independent source of funding (especially for maintenance); (iv) emphasis on rehabilitation and maintenance over new construction; and (v) the high degree of participatory ownership, including the use of frequent workshops and attempts to build a broader group of road users to support the program. 9. Lessons of Past Experience. Progress has been good on the roads component of ROCS-1. As of February 28, 1994, just over sixteen months after effectiveness, 14% of the credit for the roads component had been disbursed. Contracts have been signed for 55%, with procurement well advanced for a further 18%. Lessons learned from similar projects in Mozambique (the Urban Rehabilitation EftQt (Credit No. 1949-MOZ), and the First Roads and Coastal Shipping oject MCS-1) (Credit No. 2374-MOZ)) and from the rest of Africa franzania Interated Roads Proect (IRP (Credit No. 2149- TAN), the Road Maintenance Initiative (RMI), and the OED Report Free-standing Technica Aslistance for Institutional Develooment in Sub-Saharan Africa (No. 8573) have been given full consideration in the design of this proposed new operation, especially with respect to: (i) early attention to the procurement and disbursement processes; (ii) advance agreement (and specific assurances) on maintenance and counterpart financing; (iII) the benefits of the integrated sector approach; (iv) the local contracting industry and equipment management issues; and (v) TA which builds rather than destroys capacity (focussing on the need for clear terms of reference, a comprehensive training and institutional development strategy, and close supervision). 10. Rationale for IDA Involvement. The project will focus on removing transport sector bottlenecks to recovery of the agricultural sector and is an integral part of IDA's assistance to GOM aimed at facilitating economic recovery. In addition, the project supports capacity building and human resource development and the implementation of regulatory reform. GOM and the donor community agree that IDA's main role should be to continue to assist GOM in: (1) implementing regulatory reform and institutional strengthening; (ii) financing priority civil works, as a lender of last resort; and (iii) coordinating donor participation in the transport sector. The project will also provide a model of a more flexible sectoral investment approach which could have wider ap:licability within Mozambique and the Africa Region. 11. Link with Country Assistance Strategy: The Country Assistance Strategy is sc- eduled to be presented in May/June 1994 with the proposed Second Economic Recovery Credit. (The previous Country Assistance Strategy for Mozambique was presented in November 1992). The strategy is focussed on: (i) establishing macroeconomic balance through continued economic policy reform; (ii) accelerating export development and economic growth, particularly through promoting small-scale agriculture and rehabilitation of the industrial sector; (iii) developing human resources, including strengthening public and private sector institutional capacity; and (iv) implementing targeted poverty reduction measures. The proposed project directly contributes to this strategy. Improvements in the road network will increase -4- market access and stimulate agricultural and industrial growth, while continuing regulatory reform and institution building efforts supported under the project will further develop both public and private sector capacity in the roads sector. 12. Actions Agreed. Disbursement of IDA funds will be conditioned for: (i) the Phase Two Malr Works Road Program on (a) satisfactory completion of an Institutional Action Plan; (b) agreement on a year-by-year national road rehabilitation program for the remainder of the project, and (c) receipt of detailed designs (or surveys) and bidding documents for works to commence in the next 12 months of the program; (ii) Phase One Housing for DNEP on receipt of (a) an acceptable plan for repayment and transfer of the houses to DNEP staff, and (b) proof of DNEP's legal right to develop the land on which the houses are to be built; (ii) Phase Two Housing for DNEP on (a) approval of the repayment and transfer plan by GOM, and (b) proof of DNEP's legal right to develop the land on which the houses are to be built; and (iv) Long Term TA on receipt of an acceptable long term capacity building program based on a detailed review of all human resource initiatives up to the mid-term review. 13. Assurances were provided at negotiations that GOM shall: (i) implement the project and policy reforms according to the Letter of Sector Policy; (ii) make available adequate and timely annual funding for the pject (for both maintenance and rehabilitation) in accordance with the undertakings set out in the letter of commitment of local resources; (iii) retain throughout Project implementation ke rjit management staff and local counterpart staff. with qualifications and experience acceptable to IDA; (iv) conduct a comprehensive mid-term review by September 1995, and annual reviews by September of each year; (v) submit to IDA ^ar its review, by September 1 each year, workplans for the subsequent financial year, revise such workplans based on IDA's comments, and carry out the project based on the workplans; (vi) not undertake any proposed investment in the roads sub-sector (a) estimated to cost more than US$4 million equivalent, unless such investment has an estimated economic rate-of-return of at least 20%, taking into account socio-ecnoniic criteria acceptable to IDA and (b) estimated to cost more than US$1 million equivalent, unless it has carried out an enyironmental assessment, and has adopted design standards and construction methods aimed at minimizing possible adverse environmental impact, both in accordance with environmental guidelines satisfactory to IDA; and (vii) fully decentralize the management of the special account for ROCS-2 to DNEP. 14. Environmental Impact. The project comprises rehabilitation, not construction of new roads, and hence from an environmental standpoint, has been classified as a category "B" project. Feasibility studies completed for the first eight priority major trunk roads have assessed the envire mental impact of the proposed civil works. The environmental impact studies presened conclude that the Jirect negative impacts should be negligible at the proposed levels of rehabilitation and/or improvement. The indirect impacts (that would result if improving transport efficiency were to promote non-sustainable exploitation of valuable or fragile resources) are greater but are difficult to estimate with the level of information available. The project will support strengthening of GOM's environmental analysis and monitoring capacity in the roads sector. GOM will not undertake any investment in the roads sector estimated to cost more than US$1 million equivalent unless it has carried out an environmental assessment, and has adopted design standards and construction methods aimed at minimizing possible adverse environmental impact (para 13). 15. Program Objective Categories. Poverty reduction will be achieved through: (i) increased access to markets, at lower cost, and hence higher incomes for farmers and lower costs to urban consumers; (ii) the generation of 75,000 person years of work over the five years; and (iii) support for the overall growth of the Mozambican economy. 16. Benefits. Substantial quantifiable and non-quantifiable short- and long-term benefits are expected from the project, particularly increased agricultural production and export of cash crops, reduction in -5- transport and food costs, and alleviation of poverty. In addition, much of the rehabilitation will serve to "protect" past investments in that, without backlogged maintenance, road deterioration would be greatly accelerated. The project will also strengthen the institutional capacity of the roads sector, enhancing the ability of GOM to sustain the physical gains under this project and to manage the sector in the future. Project works as a whole are expected to have an economic rate of return of 45%; and each project investment would have an ERR of not less than 12%. 17. Risks. There are significant risks in this program, as to: (i) the pattern and speed of agricultural recovery; (ii) the possibility of reversals of the security situation; and (iii) the timing and extent of regulatory reform and institutional strengthening, in particular in the areas of (a) funding, (b) procurement, contract management and contract supervision, (c) equipment and contractor development, and (d) training and staff retention within DNEP. Flexible overall project design and phased investment plans, combined with formal annual project reviews, have been used to mitigate some of these uncertainty risks. If agricultural recovery is slower than expected, the security situation worsens or the implementation capacity is weaker than anticipated, the works program for the outer years of the project will be trimmed back accordingly. Likewise, if the pattern of agricultural recovery is different from what might be expected now, or if the security situation worsens in selected areas, the regional focus of the program will be adapted accordingly at annual reviews. If institutional development is patchy, re- allocation of resources to the critical areas, changes to contract packaging and modification of terms of reference will be introduced at annual reviews. Technical assistance, training and supervision, and up- front policy reform have been included to manage the institutional risks, but will not totally eliminate them. 18. Recommendation. I am satisfied that the proposed credit wodld comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve it. Lewis T. Preston President By Ernest Stern Attachments Washington, D.C. March 15, 1994 ScheduleA Page 1 of I REPUBLIC OF MOZAMBIQUE SECOND ROADS AND COASTAL SHIPPING PROJECT PROJECT COSTS AND FINANCING PLAN Estimated Project Costs Local Foreign Total (US$ Million) Road Network Rebabilitation and Maintenance Road Rehabiltation 1 41.2 164.7 205.9 Road Rehablitation II 38.9 155.6 194.5 Emergency Roopening of Priorky Network 24.6 80.4 105.0 Labor-Based Feeder Roads Rebabfltation and Maintenanoo 9.6 2.4 12.0 Periodio Maintenance 22.7 68.3 91.0 Routine Maintenance 33.5 12.5 46.0 Subtotal Road Netmork Rebabilitation and Maintenance 170.5 483.9 654.4 Engineering Services FCasibltiy and Surveys 0.5 4.0 45 Detailed Design 0.9 85 9.4 Supervision 3.7 28.1 31.8 Subtotal Engineering Services 5.1 40.6 45.7 Institutional Development Road Sector Capacky Bulking 0.4 2.5 2.9 Local Contractors Development Progrm 0.2 1.2 1.4 Poliy Support 0.2 13 15 Logistics 2.2 4.5 6.7 Subtotal Institutional Developmeat 3.0 9.5 1f. Total BASELINE COSTS 178.6 534.0 712.6 Physical Cortingenlos 11.9 42.5 54.4 Price Contingenois 12.4 35.2 47.6 Total PROJECT COSTS 202.9 611.7 814.6 Estimated FMnancing Plan Local Foreign Total (US$ Million) IDA 24.8 163.2 188.0 ADB 9.2 74.2 83.4 EEC 14.9 83.0 97.9 USAID 5.9 19.1 25.0 CFD/RSA 1.9 15.1 17.0 BADSA 0.2 14.7 14.9 Kuwait Fund 0.1 13.9 14.0 KIW 2.2 6.8 9.0 PRP Donors 11.7 2.9 14.6 Phase II Donors 19.7 162.3 181.8 Government 112.3 56.7 169.0 Total 202.9 611.7 814. Schdule 12 REPUBLIC OF MOZAMBIQUE Page 1 of 2 SECOND ROADS AND COASTAL SHIPPING PROJECT PROCUREMENT AND DISBURSEMENTS A. Proeurement Procuranent Method Project Elanents (US$ Milion) I.C.B. L.C.B. Other N.A. Total A. Civil Works 1. Road R~habilitation 82.4 - 389.2 471.6 (78.3) (78.3) 2. Emergency Road Works (a) 37.4 7.6 3.0 60.6 108.6 (33.7) (6.9) (2.7) (43.3) 3. Feeder Road - - - 14.6 14.6 4. Perodic Mainten (b) 72.7 18.2 7.0 - 97.9 (25.3) (4.8) (3.0) (33.1) 5. Routine Maintenance - - 49.4 49.4 6. Housing 3.6 0.9 - - 4.5 (0.8) (4.0) D. Goods 1. Veicles(c) - - 0.8 - 0.8 (0.8) (0.8) 2. Equipment (c)(d) 1.3 - 0.8 - 2.1 (1.3) (0.8) (2.1) 3. Materiale 2.6 - - 5.9 8.5 (2.7) (2.7) C. Consultancies 1. Institutional Development - - 3.9 - 3.9 (3.9) (3.9) 2. Project Implementation - - 16.8 32.9 49.7 (16.8) (16.8) 3. Policy Support - - 1.6 - 1.6 (1.6) (1.6) D. Refund of PPF - - - 1.5 1.5 (1.5) (1.5) Total 200.0 26.7 33.9 554.0 814.6 (144.5) (12.5) (29.5) (1.5) (188.0) Note: Figures in parenthesis are the respetive amounts fanced by IDA. (a) Som. emergency work, and work par of a local contracor development scbeme, will be by diret contrating. (b) Some periodio maintenanm works, carried out by BCMP's (national publio contactors) prior to their restructuring, and including work part of a looal contactor development scheme, will be procured through diret contracting. (ö) Vehiles and offi= equ~pment will be prooured through international Mhopping. (d) Furntur will be pu asd through locae ahopping. -8- Page 2 of 2 REPUBLIC OF MOZAMBIQUF SECOND ROADS AND COASTAL SHIPPING PROJECT PROCUREMENT AND DISBURSEMENTS B. Disbursement IDA % of Exendiue Anout to be Fmoancod Catego y US$ Milon 1. Mjor Road Wks (a) F Propwges 27.4 95% (6) OtherMajrRelabitation 47.6 95% 2. Emerewy Road Woks 38.7 90% 3. Pesodio Mainteace (a) Uxetakon in 1994 6.0 60% (b) Uvdetakm in 1995 55 50% (c) Uetaklen in 1996.8 (1) 19.8 90% 4. Housig (a) Phase One 1.6 90% (b) Phase Two 2.4 90% 5. Consulat SOvMs (a) Long TemCoMu Nats 33 100% (b) Sho t TonCansukats 17.4 100% 6. Vebios and Equ t 5.2 100% 7. RfW of PPF 15 As dibursed 8. Un-allocated 11.6 Total 188.0 Note: (1) Selected Contmcts Only Estimated IDA Disbursements Fiscal Year Ending June 30 (US$ million) Year 1995 1996 1997 1998 1999 2000 Aual 30.1 30.1 33.8 41A 30.0 22.6 Cumotive 30.1 60.2 94.0 135A 165.4 188.0 % of Cdt 16% 32% 50% 72% 88% 100% .9- Schedule C Page 1 of 1 REPUBLIC OF MOZAMBIQUE SECOND ROADS AND COASTAL SHIPPING PROJECT TIMETABLE OF KEY PROJECT PROCESSING EVENTS (a) Time taken to prepare 15 months (b) Prepared by Government/Consultants with IDA assistance (c) First IDA Mission February 1992 (d) Appraisal Mission Departure June 1993 (e) Negotiations January 1994 (t) Planned Date of Effectiveness July 1994 -10 - Scbhdule Page 1 of 3 REPUBLIC OF MOZAMBIQUE SECOND ROADS AND COASTAL SHIPPING PROJECT STATUS OF BANK GROUP OPERATIONS IN MOZAMBIQUE SUMMARY STATEMENT OF IDA CREDITS (AS AT FEBRUARY 15, 1994) LOAN OR FISCAL BORROWER PURPOSE IDA UNDIS0URSB1D CLOSING CREDIT NUMBER YEAR (US$ MILL) DATE 3 CREDITS CLOSED 132.65 180MOZ 1967 MOZAMBIQUB ENEROYTA&lEHAB 2D.00 4.30 1201/1994 1900.MOZ 5966 MOZAMBIQUE EDUCATION I 15.90 3.54 12031/1995 1940MOZ 199 MOZAMBIQUE URBAN RElABILITATION 00 14.44 1201/965 19894MOz 1989 MOZAMBIQUE EAL.Ti A NURITION 270 22.12 1201/19d 20210-MO2(S) 1989 MOZAMBIQUE REllABIIATION 11 90.00 Im 01301994 2033402 5969 MOZAMBIQUE HOUSEHOLD ENERGY CREDIF 22.00 16.33 12131/196 20MSMOZ 1990 M0EAMBIQUE TRANS. RE. (BEIRA CORRIDOR) 400 24.55 06/30/1996 206.*02 1990 MOZAMBIQUE SCON. & PIN. MANAGEMENT 210 1531 12/31/1997 20BIO-MOZ 1990 MOZAMBIQUE INDUSIPIAL ENTERPRISS 510 50.3 12/311997 20820MOZ 1o990 MOZAMBIQUE SMAL & MEDIUM SCAE 320 25.45 1231/1996 27mMOS 1991 MOZAMBIQUB AGRIC. REHAB. a DEVELOPMENT IS.40 12.94 06/001999 22000MOZ 991 MOZAMBIQUE EDUCATION Il S.10 46.57 0401997 23MMOZ 1992 MOZAMBIQUB AGRIC. SERVICES RElAB. 3s0 33.69 12f31/2000 23740-MOZ 19"2 MOZAMBIQUB FIRST ROAD A COASTAL 74.30 d5.29 000/99 23840MOZD 1992 MOZAMBIQUE ECONOMIC RECOVERY CREDWT 1600 2.72 06005995 230MOZ 1993 MOZAMBIQUE CAPACITY BUILDING (f 48.4 46.40 0630/1999 243705MOZ 1993 MOZAMBIQUE LEG A PU. SER. CAPActrv 15.50 15.02 06099 245404MOZ 1993 MOZAMBIQUE MAPlTO CORRIDOR 9.30 9.50 12/31/1996 24M os 1993 MOZAMBIQUE RURAL RESrRUCrURINO' 25.0 19.77 12031/1998 2480MOZ 1993 MOZAMBIQUE FOODSECURITr 6.30 6.34 02/28/1996 25300-MO 1993 MOZAMBIQUE LOCAL GOVERNME-T EN 23.20 22.10 03/31/1996 TOTAL -21 udha 859.30 520.0 TOTWL odsuMdapqak 991.95 TOrAL bid by IDA Amowt sold *rwdh 991.95 TOTAL UWdshed 20.04 - Tddel Atpod spemwa and Ouatealeabisamuuyse boh MWmd Wasl Lam and Cedls. (R) Idkm fomonVy evised Clodet Dat. (S) -dicaes SAISECAL Lo and Cndhs. IU N Appowd ad Bar Repamu am Noi valu all adm anwat wba. n seialv. Effood ad Cloulat Date ane bae wa the Loaw Dpomtnms affekul dels ad a tal asa thm do Task BWlWst Wl. - 11- Schedule D Page 2 of 3 REPUBLIC OF MOZAMBIQUE SECOND ROADS AND COASTAL SHIPPING PROJECT STATUS OF BANK GROUP OPERATIONS IN MOZAMBIQUE SUMMARY STATEMENT OF IFC INVESTMENTS (AS AT FEBRUARY 15, 1994) INVESMENT FISCAL OBLIATOR TYPEOFBUSINESS WAN EQUIFY TOTAL NUMBER YEAR (US$ MILL) 864.MOZ I9m LOMACO AGRI-8USINESS 2.P 08 2.0 S1S7-MOZ 1993 POLANA TOURISM 3.50 00 340 P. fil 978-MOZ 198 XAIXAIOIL PETROLEUM 0.00 7.75 7.75 TOTAL GROSS COMMEMENTS 649 7.75 13.94 LESS CANCELLATIONS. REPAYMENTS, AND EXCHANGE ADJUSrMENTS 1.0 7.75 9.25 TOTAL COMMITIMENT HED BY IFC 4.0 0. 4.# TOTAL 0.03 O0 0.0 UNDISBURSED IWC OTAAL OUtISTANDING 4.46 0OM 4.46 IPC - 12 - Schedle D Page 3 of 3 REPUBLIC OF MOZAMBIQUE SECOND ROADS AND COASTAL SHIPPING PROJECT DISBURSEMENT ISSUES Mozambique's portfolio of IDA-supported projects is relatively new, with the first operation dating to FY87. Although progress in implementation has generally been satisfactory, the performance of disbursements has been less so. For example, the first mid-term review for an investment project recently showed that while civil works were about 2/3 complete, disbursements were only 35 percent of the project estimates. A large part of the problem has to do with the fact that while the Government has moved quickly toward a market-based economy, Government agencies and administrative procedures remain largely unchanged. Thus, all IDA-supported projects were managed financially by the central bank, Bank of Mozambique (BM), which needs to be strengthened. The CIR last year determined that this was the main bottleneck to improving disbursements. The Bank has taken steps to decentralize the financial management of projects to the implementing agencies through discussions with BM and conditions of the ongoing Economic Recovery Credit. Four operations are moving slower than the average due to specific problems. ECONOMIC AND FINANCIAL MANAGEMENT (FY90). Delays in disbursements resulted from unfamiliarity of the implementing unit with procurement procedures necessary for fairly large consultant contracts and equipment. A recent supervision mission has addressed this problem and disbursements are expected to improve soon. INDUSTRIAL ENTERPRISE RESTRUCTURING (FY90). Delays in this project, the objective of which was to restructure large public enterprises, are due primarily to the Government's decision to privatize rather than restructure these enterprises. Recent project restructuring will broaden access to the credit component by private firms, resulting in speedier disbursement. IEALTH AND NUTRITION PROJECT (FY89). Disbursement will increase in the near future as the project has been restructured extensively a year ago, making funds available for recurrent costs of the MOH. Training of the senior staff of the Project Unit in the Ministry of Health (GACOPI) in procurement and the preparation of standard bidding documents has greatly facilitated the process. Currently, major quantities of pharmaceutical and medical supplies, as well as civil works, are being procured. SMALL AND MEDIUM SCALE ENTERPRISES (FY90). Again, the delays in this case are connected to up front processing of on-lending applications for small scale enterprises. About fourteen credit applications have been approved for about US$5 million equivalent, and another 70 applications are in the pipeline. Disbursements will show a significant increase in the near term. ！右 ！匹；