Tunisia - National Water Supply Project

/1q0A 59/- ir)A FILE COPY RESTRICTED Report No. TO-666a This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its. accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF THE NATIONAL WATER SUPPLY PROJECT TUNISIA October 28, 1968 Projects Department  CURRENCY EQUIVALENTS US$1. 00 D 0. 520 D 1.000 = US$1.92 1 Dinar = 1, 000 millimes WEIGHTS AND MEASURES 1/sec = liters per second 1/day = liters per day m 3 = cubic meters m = meters km = kilometers mm = millimeters dia. = diameter ABBREVIATIONS SIDA = Swedish International Development As sociation SEMA = Societe d'Economie et de Mathematiques Appliquees RDE = Regie des Eaux SONEDE = Societe Nationale d'Exploitation et de Distribution des Eaux STEG - Societe Tunisienne de l'Electricite et du Gaz HER - Hydraulique et Equipernent Rural Consultants: SCET = Societe Centrale pour l'Equipement du Territoire SOGETHA = Societe Generale des Techniques Hydro-Agricole s FISCAL YEAR January 1 - December 31  TUNIS It' APPRATS.A-L r'F THE TUNISIA NATIONAL WATER SUPPLY PR.OJECT Table of Contents Page No. SUMMARY i - ii 1a INTRODIJCT ION 1- 2 2. THE SECTOR 3- 4 3. THE BORROWER 5 A, Background 5- 7 B. SONEDE 7.- 9 h6. THE PROJECT 10 A. Description of the Project 10 B. Second Project 11 C. Other Works 11 D. Cost of Project 12 E. Design and Supervision 12 - 13 F. Procurement and Disbursement 13 - 14 5. JUSTIFICATION 15 6. FINANCING PLAN & FUTURE POSITION 17 A. Financing Plan 17 - 19 B. Financial Outlook 19 - 20 7. CONCLUSIONS 21 This report was prepared by Messrs. J. Jennings and A. Thys from infor- mation obtained during investigations and discussions in Tunisia in Novernber-December 1967 and March-April 1968.  TUNIS IA APPRAISAL OF THE TUNISTA INATIONAL WATER SUPPLY PROJECT LIST OF ANNEXES 1. Organization Chart (1961) 2. Operations of Regie des Eaux 3. Comparative Income and Expense Statements 4. Collection Record 5. Societe Nationale d'Exploitation et de Distribution des Eaux (SONEDE) 6. Description Of the Project 7. Project Cost Estimates 8. Construction Schedule 9. Tourism in Tunisia 10. Internal Rate of Return lie Population and per Capita Consumption Graph 12. Past and Future Sales 13, Sales Projections 14. Long-Term Debt 15. Assumptions for Financial Statements 16. Projected Income Statements 17. Projected Cash Flow Statements 18. Projected Balance Sheets MAPS Tunisia Water Supply Project Tunisia Population & Tc rist Areas  TT.IN IS IA APPRAISAL "F THE TUNISIA NATIONAL WATER SUPPLY PICJECT SUMIAi RY i. The Government of Tunisia has asked the Bank and the Governmenti of Sweden to assist in financing a project which comprises the major portion of a nationwide program of water supply investments to be executed in 1968-73. The Program has been developed from a study prepared by Societe Generale des Techniques Hydro-Agricoles (SOGETHI), which outlined investment requirements of the sector to meet demand over the next 15 years, and it reflects suggestions made by Bank staff during several missicns. ii. The 1968-73 Program consists of three elements: a. A group of high priority works to be compleLed be- tween 1968 and 1973, which is identified as the Bank/Swedish Project; b. A group of works, identified in broad terms but not yet precisely defined, to be executed during 1971-73 which will be called the Second Project; and, c. Other minor works, mainly works in progress and re- newals which will be executed and financed by the Borrower over the 1968-73 period. tThile all of these works are related in the sense that they are part of the national Program, they are in many cases physically inde-andent of each other in that they involve urban systems that are not interconnected~ The Project has been designed so that it can stand alone; none of tlh other works in the Program are vital to the functioning of the Project (except minor works defined in paragraph 4.03 (I) and (2) ). However, the sales projections, financing plan, etc., are based on the assumption that tne entire Program will be completed as scheduled. iii. The Project consists of improvement and expansLon of the supply and distribution systems of the two most heavily populated and economically important regions of Tunisia - Tunis and the Sahel (Sousse) Regions and als^ of Nabeul and Hammamet, in a rapidly growing tourists area. Management and technical assistance for a new national water supply organizaticn are also included. Preliminary engineering is largely ccmpleted and detailed engineering is under way. The first contracts are expected to be called for bids in late 1968. The Bank and Swedish loans would be disbursed partly against the foreign exchange cost of imported items and partly as a percentage of expenditures under other internationally bid contracts. More than 99% of the total expenditures will be under internationally bid contracts.  - ii - iv. The 1968-73 Progran is exoected to cost D31oB million (US$61.0 million), of which D17.1 million (US$32.8 million) is for the Project, including interest during construction; D9.6 million (US$18.4 million) is for the Second Project; and D5.1 million (US$9.8 million) for other wqorks. The financing plan ircludes a Bank loan of US$15 million, a Swedish loan of US$5 million equivalent, permanent capital contributed by the government and a large amount (D8.2 millicn) of net cash generated from operations. The Bank would finance 46% of the Project (25% of the Program) including interest during construction, and Sweden would finance 15% of the Project (8% of the Program). The foreign exchange cost of the Project is estimated to be US$1607 million (US$31-3 million for the Frogram). v. The government has establis'hed an autonomous government-o-.neo organization, Societe Nationale d'Exploitation et de Distributi:n des Bau