Algeria - Urban Natural Hazard Vulnerability Reduction Project

Document of The World Bank Report No. T7549 TECHNICAL ANNEX TO THE MEMORANDUM OF THE PRESIDENT OF THE PEOPLE'S DEMOCRATIC REPUBLIC OF ALGERIA FOR AN URBAN NATURAL HAZARD VULNERABILITY REDUCTION PROJECT July 18, 2002 Finance, Private Sector and Infrastructure Middle East and North Africa Region   2 TABLE OF CONTENTS I INTRODUCTION .............................................................S5 2 PROJECT OBJECTIVE AND COMPONENTS .............................................................. 5 2.1 STUDIES AND INSTITUTIONAL ARRANGEMENTS .............................................7 2.2 TRAINING ..............................................................7 2.3 EQUIPMENT ..............................................................8 3 COMPONENT 2: EMERGENCY PHYSICAL WORKS .................................................... 11 3.1 HYDRAULIC WORKS CONSTRUCTION IN THE BASIN SIDE OF OUED KORICHE ............. 11 3.2 REMEDIAL RAINFLOW MEASURES FOR THE OUEDS OF THE MASSIF OF BOUZAREAH ............................................................. 11 3.3 TREE PLANTING IN THE OUED KORICHE BASIN AND ITS CHANNELS ........................ 11 3.4 HOUSING ............................................................. 12 4 COMPONENT 3: PROJECT MANAGEMENT ............................................................. 16 4.1 STUDIES AND TECHNICAL ASSISTANCE ............................................................. 16 5 INSTITUTIONAL ARRANGEMENTS: PROJECT IMPLEMENTATION ....................... 19 RESPONSIBILITIES ..19 5.1 GENERAL PRINCIPLES .19 5.2 . THE DIFFERENT PARTIES INVOLVED AND THEIR RESPECTIVE ROLES .19 5.3 PROJECT MANAGEMENT, COORDINATION AND MONITORING .20 6 PROCUREMENT AND DISBURSEMENT PROCEDURES ........................................... 23 6.1 PROCUREMENT ................................. 23 6.2 MODALITIES FOR PROCUREMENT REVIEWS ................................. 23 6.3 PROCUREMENT METHODS (SEE TABLE A) ................................. 24 6.4 INTERNATIONAL SHOPPING ................................. 24 6.5 NATIONAL SHOPPING ................................. 24 6.6 WORKS ................................. 25 6.7 PROCUREMENT OF SMALL WORKS ................................. 25 6.8 CONSULTANT SERVICES ................................. 25 7 DISBURSEMENT ...................................... 33 7.1 SPECIAL ACCOUNT (SA): ...................................... 33 7.2 USE OF STATEMENT OF EXPENDITURE (SOES): ...................................... 33 7.3 RETROACTI-VE FINANCING ...................................... 33 7.4 INFORMATION FLOW ...................................... 34 8 FINANCIAL MANAGEMENT ...................................... 36 8.1 GENERAL VIEW ................................. 36 8.2 FINANCIA L MIAGEMENT (FM) ASSESSMENT ................................. 36 8.3 ACCOUNTING6,Y5STEM ................................. 37 8.4 PROCEDURES OF INTERNAL CONTROL ................................. 37 8.5 FLOW OF FUNDS ................................. 37 8.6 FINANCIAL MONITORING REPORTS ................................. 38 8.7 AUDIT ................................. 38  3 8.8 RISKS ......................................................... 38 ATTACHMENT 1: THE SOCIOLOGICAL FEATURES OF THE AFFECTED POPULATION ......................................................... 40 ATTACHMENT 2: ENVIRONMENTAL MANAGEMENT ......................................................... 50 ATTACHMENT 3: REINFORCING THE COUNTRY CAPACITIES TO FACE NATURAL DISASTERS 52 ATTACHMENT 4: INFRASTRUCTURE ......................................................... 54 ATTACHMENT 5: HOUSING ......................................................... 58 kTTACHMENT 6: PROJECT COST, DISBURSEMENT AND FINANCIAL MANAGEMENT .............. 62  4 SECTION 1 ]NTRODUC71ON AND OBJECTIVES OF THE PROJECT   PEOPLE'S DEMOCRATIC REPUBLIC OF ALGERIA URBAN NATURAL HAZARD VULNERABILITY REDUCTION PROJECT 1 INTRODUCTION On November 10 and 11, 2001, Algeria was hit by flooding of unprecedented proportions particularly the region of Algiers. Most devastated were a dozen municipalities located largely in Bab El Oued. More than 800 people were killed in the region of Algiers alone; property damage is estimated at $US400 million (minimum). The Wilaya of Algiers took immediate emergency measures, with support from various administrations, public agencies, and the population that brought temporary relief to the affected population and somewhat mitigated the immediate impact of the flooding. However, the flooding highlighted the vulnerability of urban areas to natural disasters, and the need to reduce this vulnerability by introducing medium and long-term disaster mitigation measures, both at the national level and at the local level, particularly in Algiers. 2 PROJECT OBJECTIVE AND COMPONENTS This project will have two main objectives: a) To improve the ability of Algerian institutions at the national level to cope with natural disasters by developing their monitoring capacity, the early warning system, their understanding of the meteorological phenomena that led to the November 10, 2001 floods, by improving the means of intervention by social protection organization, and by developing detailed plans to reduce the vulnerability of urban zones in the Wilaya of Algiers; and b) To address specifically the vulnerability of the urban zones most seriously affected by the flooding of November 10, 2001. The objective of this project is particularly to reduce the risks incurred by the population of these zones, some 30,000 people, and to provide indirect protection to more than 250,000 people living in downstream districts, sites of ancient urbanization. . The measures to be developed will contribute to resolving the currently serious problems of pollution and erosion. This accords with one of the objectives of the Algerian Government, to improve in a sustainable manner the conditions of life of the population affected by the disaster and of those located downstream that could face similar risks. As a result, the project will have two key components, each of them directly linked to the above-mentioned objectives.   6 SECTION 2 COMPONENT 1: DISASTER MANAGEMENT CAPACITY BUILDING   7 2. COMPONENT 1: capacity Building AT THE NATIONAL LEVEL The objectives of this component are two-fold: (a) to reinforce national capacity to face unavoidable natural disasters, and minimize their consequences; and (b) to improve the ability to anticipate disasters by setting up a monitoring and early warning system. The lessons learned from the accumulated experience in disaster management in Algeria (i.e. Mascara and Ain- Temouchent) and the ongoing activities under the Bank-financed Ain-Temouchent Project were taken into account in designing this component which includes the following studies and activities for institutional strengthening: 2.1 STUDIIES AND INSTITUTIONAL ARRANGEMENTS a) Preparatory study, design and implementation of an integrated monitoring and early warning system for meteorological risks in the Wilaya of Algiers, with a view to expanding it nationwide. The terms of reference of the survey have been defined. The terms of reference target institutional, organizational and technical measures for the National Meteorological Office (ONM) to improve monitoring, warning and information. b) Scientific study to understand the natural phenomenon causing the November 2001 floods toward increasing forecasting capacity. This study aims at informing the authorities and the scientific community on the real reasons behind the disaster to improve disaster-forecasting capacities; c) Study of vulnerable sites in the Wilaya of Algiers (excluding the Bouzareah massif). The purpose of this study is to identify, appraise and outline solutions to risks threatening zones in Algiers. (Bouzareah, another vulnerable area, is the subject of a specific study). Risks to be addressed in the study relate to flooding, crumbling, landslides, seismic tremors and pollution. The study will outline solutions to reduce these risks, to limit their impacts, and to facilitate the rescue of victims of natural disasters. The zones that would be covered by this survey tentatively include the following: Hamiz Oued located in East Algiers; Oued El Harrach; Ouchaiah Oued; Kniss Oued and the Telemly landslide-prone zone located in downtown Algiers. These zones are known to be high-risk, however the preliminary phase of the study will determine the priority zones with the highest level of risk. d) Global integrated study to reduce vulnerability and address the catchments basins in the Bouzareah massif. The objective of this study is to identify and evaluate possible mitigation measures for risk reduction in Algiers outside the Bouzareah Massif watershed (the subject area of the scientific study above). This project sub-component will be carried out in two stages ending with a detailed action plan to render the concerned zone less vulnerable. 2.2 TRAINING Training activities target the National Directorate of the Civil Protection (DGPC), the National Agency of Water Resources (ANRH) and the National Meteorology Office (ONM). The Algerian authorities are seeking sources of financing (grants or confessional loans) that could eventually complete, or even to partly replace the World Bank financing if the need arises. They  8 have therefore asked the Bank to help identify other sources of financing for this training. The following institutions will benefit from the training: a) DGPC. Specialized training envisaged in disaster management Will essentially apply to training of trainers at the National School for Civil Protection. This training will be provided by Algerian institutions, Which will seek support from international experts. If need be, short-term training sessions will be organized abroad in specialized institutions. b) ANRH. This training is for capacity building in production of documents necessary for flood modeling and simulation (land numeric models, ortho-photographs, flood area maps, micro- zoning etc.) using aerial and satellite imagery. It essentially requires advanced specializations for engineering school graduates that can be undertaken in a short period of time (less than 4 weeks) using Geographical Information System software (GIS) and software for medium and high resolution aerial and satellite imagery. Algerian institutions will provide this training with the assistance of international experts. c) ONM. The strengthening of capacities relates, first and foremost, to personnel involved in numeric weather forecasting and its application to extreme meteorological conditions; The interpretation of meteorological phenomena and satellite imagery and its practical application are relatively complex technologies. ONM staff needs to upgrade their skills in fine-grid modeling, through specialized training in interpretation of different data types and modeling and simulations. 2.3 EQUIPMENT The equipment necessary to strengthen the institutions involved will be procured under the project. a) ONM. Equipment is needed to enhance ONM weather-forecasting abilities. The replacement of the Algiers radar by a long-range Doppler radar will permit a refinement of the grids (that will be brought back to 5 km). The network of automatic stations covering the Algiers region, under the authorities of the Wilaya of Algiers, will constitute an urban network of meteorological observation posts that will permit better tracking of meteorological phenomena in progress, and monitor their intensity. The integration of radar and satellite data will provide finer grids capable of generating finer-scaled weather numeric forecasting and will require a more powerful. The necessary software can be acquired gratis within the framework of donor cooperation. b) DGPC. Equipment to support the DGPC was identified from the experience of managing the aftermath of the November 2001 flooding. i) Water and mud evacuation equipment: muddy water in buildings could not be drained through existing means. ii) Excavation equipment: The available equipment was useless to open up access for first-aid workers and for removal of debris in narrow alley networks. The project will therefore provide small caterpillars specifically for this purpose.  9 iii) Lighting equipment and on-site energy production: indispensable materials for night operations, for the connection and the use of equipment. The DGSN lighting vehicle was the only one that enabled night rescue operations following the events of November 9-10, 2001. iv) Aquatic rescue equipment: to recover vehicles and passengers that have been swept away or trapped by floodwaters. v) Emergency rescue equipment and emergency medicine: to enable onsite first aid to the severely wounded where evacuation is hampered by disrupted or difficult access. vi) Strengthening information technology: The National Directorate of Civil Protection has set up a Geographical Information System unit (GIS) whose activity will be geared to risk prevention and to planning rescues for both natural and industrial disasters, to be strengthened by complementary software and data. At the beginning, this unit will concentrate on mastering the modem tools of geographical data processing, an essential component of Information Technologies. c) Computer software to strengthen ANRH: ANRH is responsible for assessment and monitoring of water resources and must produce key information from the Integrated Monitoring and Early Warning system. This information will be produced in different forms: production of Land Numeric Models (DTM), Ortho-photographs and designs reproduced at higher scales for risk zones by means of aerial and satellite imagery. They will model and simulate scenarios for different levels of rainfall. ANRH already has the computer hardware, and the project will provide the necessary software.   10 SECTION 3 2OMPONENT 2: EMERGENCY PHYSICAL WORKS   3 COMPONENT 2: EMERGENCY PHYSICAL WORKS The zone of intervention comprises 12 communes', mostly in the jurisdiction of Bab El Oued. This area was the site of the most devastation in terms of deaths as well as the volume of physical and material destruction, including basic infrastructure such as roads, water purification and distribution networks, socio-cultural facilities such as schools, health centers, training centers and sport facilities and cultural heritage sites. The purpose of this component is to undertake urgent physical works to restore these services and facilities. 3.1 HYDRAULIC WORKS CONSTRUCTION IN THE BASIN SIDE OF OUED KORICHE The construction of flood retention basins at the interception points of various streams connecting in Oued Koriche is planned to reduce the water levels. Their size will be dependent on the land available, site topography, the nature of the soil and the quantity of water flowing through of each Oued [wadi]. The precise sites, the number, measurements, and other features of these basins will be determined by the computer simulation planned during the first phase of the "Global Integrated Study for the Reduction of the Vulnerability and Treatment of the Basin Side of the Bouzareah massif." At first, it is estimated that the project will cover the construction of 10 basins with a flood retention capacity of about 10,000 m3 (in Baranes, Sidi Medjbar, Frais Vallon, Beau Fraisier, Scat and Oued Koriche) and a new water collector on the basin of the Frais Vallon. The project will also build a channel in the sub-basin of Beau Fraisier Oued and recalibrate the downstream section of Beau Fraisier Oued in order to improve the conditions of water out-flow in the sub-basin side. The measurements of these channels will also be determined by the above-referenced study. 3.2 REMEDIAL RAINFLOW MEASURES FOR THE OUEDS OF THE MASSIF OF BOUZAREAH To limit the water flow in the Bouzareah massif, it is necessary to make some corrective adjustments to the rivers (Oued Deux Moulins, Oued of the Zouaves, Oued Ravine Staura, Oued Sidi El Keibir, Oued Le Plateau,. Oued Beau-Sejours, Oued Baranes and Oued La Vigie, and others). The proposed works in this project aim at adjusting the slope of the Oueds to reduce the speed of water discharge and the quantities of mud carried. The works consist of constructing earthworks and drains in selected sections of the Oueds and banks threatened with crumbling. The works will also clean the riverbeds of debris and restore their contours. 3.3 TREE PLANTING IN THE OUED KORICHE BASIN AND ITS CHANNELS In order to slow down outflow, encourage soil flood retention and to protect against erosion, the Project plans to continue planting of forests on public lands and fruit trees on private lands. This planting will be concentrated on the basin of the Oued Koriche, and will cover an area of about 600 ha (Planting of forest trees over 360 ha and planting of fruit trees on 240 ha). X These include the following: Bab El Oued, Oued Koriche, Bologhine, Rais Hamidou, Hammamet, Ain Benian, Bouzareah, El Biar, Sidi M'Hamed, Alger Centre, El Madania, El Mouradia  12 3.4 HOUSING The objective of this subcomponent is to finance the cost of housing, infrastructure, and services for 5,000 units of "social rental housing" in Algiers. Its main purpose is to rehoused since these people: (a) have been affected by the November 10, 2001 flood; or (b) live on vulnerable sites inside or close to the Bouzareah Massif, thus exposed to risks. Five thousand eligible families were identified by the Algerian authorities in accordance with governmental Decree on distribution of public housing Ministerial Decree 98-42). The more than 1,500 families re-housed by the Algerian authorities just after the disaster, in available public housing, are outside the scope of the present project. [The criteria of eligibility for the social housing progran apply to recipients whose income is below twice the minimum wage (SNMG or the National Guaranteed Minimum Salary, which was 16,000 DA, at the time of the assessment of this project)]. The project will build on and support the following institutional and legislative arrangements and procedures: a) Administrative, functional and technical controls. Regulations and a set of procedures outlined in the following govern the activities of agencies implementing the project, especially for housing construction: b) The Ministry of Housing. This Ministry defines housing policy, determines public housing construction programs, and provides credits to the planned operations in the State budget. The annual appropriations bill, using the principle of final competition, covers planned social housing financing in chapter 722 and land development in chapter 721. . Once the financing is secured, the Ministry notifies the Wilayas of the budget appropriation decisions. Finally it releases the credits for payment. In addition, the Ministry plans the plot sizes, the types, and the prices of the planned housing. Reference prices, norms of quality, and types serve as a basis for programs. Reference prices are established after an analysis of the bid prices in every region of the country (for examnple, the price per square meter for a social rental housing currently ranges between 16,000 in 18,000 DA in Algiers including designs and supervision). For this project, considering family composition, the average norm chosen by the Direction of the Housing of the Wilaya of Algiers corresponds to the F3 type (three rooms), of 60 square meters. The net construction cost is estimated by the administration to be 16,000 DA /m2. c) The CTC (Construction- Technical Control Agency) - Its intervention is obligatory to provide insurance coverage in Algeria. Recently, the CTC's statutes have evolved, changing it from a public monopoly under the umbrella of the Ministry of Housing to an oligopoly under private law. Through decentralization and then privatization, the CTC has evolved into a number of companies (CTC Center, CTC South, CTC West, and CTC East) that operate as independent research departments, which compete with each other nationwide. d) The EDE (Earthquake Detection Engineering Center) is a State-subsidized research center. of experts devoted to analysis of seismic risk and the study of micro zoning. It offers consulting services and provides its opinion on the viability of the sites to be used for apartment construction programs as far as seismic risk, geomorphology and geo-technical conditions are concerned (i.e., upon consulting the report of the soil survey). e) Procurement Boards- these committees/boards are entrusted with the responsibility of controlling procurement undertaken by implementing agencies, under the terms of the Algerian  13 regulations and in conformity with the World Bank procurement procedures. More specifically, the following procurement controlling authorities will participate within the framework of this project. For the Wilaya of Algiers, the jurisdiction of the procurement committees/boards depends on the amount involved as outlined in the following: Procurement under 4 million DA: Internal Committee; Procurement between 4 million DA and 200 millions DA: Committee of Wilaya; and Procurement above 200 million DA: National Procurement Commission. Wilaya of Algiers < 4 MDAs 4MDa < Amount < 200 M DA Works, ( Works) 200 60 MDA Studies Wilaya of Algiers < 4 MDAs 4MDa < Amount < 60 200 NDA Works, (Studies) 60MDa Studies Wilaya of Algiers Internal committee of Committee of Wilaya National Commission the Directorate DGPC < 12 MDAs > 12 MDA, <60 MDAs >200 MDA (Works) or 200 MDAs (Works) >60 MDAs (Study) DGPC Internal Commission Commission Ministry National Commission of Interior ONM < 4MDa < 200 MDAs works, 60 >200 MDAs works, 60 MDA Studies MDA Studies ONM Internal: letter of Order. Commission National Procurement ONM /Ministry of Commission Transportation f) Contracting Authority and Project Manager. The implementing agency for Component 2 will be the Wilaya of Algiers irrespective of the subcomponent. The Wali will delegate implantation according to the nature of the subcomponent to the concerned sectoral director of the Wilaya (for example Directorate of Housing, Direction of the Hydraulics, Forests Conservancy of the Wilaya of Algiers). g) Project Management for the Construction of 5,000 Apartments- 5,000 apartments will be distributed on the 6 selected sites. - The sites will be grouped into two lots by proximity to one another. A consulting firm will be hired as project manager to supervise the entire process of construction on the two sites. It will be in charge of (i) technical supervision and coordination between the designs and works; (ii) preparation of bidding documents; and (iii) supervision of implementation progress, and intervention in case of litigation. Each site will be divided into two parcels; each parcel will comprise 300 to 400 units to be assigned to an architecture firm. Then, the result will be 3 consulting firms, and from 25 to 35 to an architecture firm for all the sites resulting in a total of about 30 selected Project Managers (from 30 separate biddings). h) The notion of a Lead Architect has been introduced in this program to ensure a better coordination, piloting, and an operational follow-up with the different actors who intervene for the studies and the realization of the project. These consulting firms or Lead Architects will undertake the operations in coordination with the consulting firms dealing with architecture, engineering and the follow-up.  14 Thus, the accredited architect consulting firns will ensure technical, architectural, engineering designs as well as supervision. They will be entrusted with the following tasks: a) Detailed technical, architectural, and engineering designs in accordance with the specifications; b) Preparing the notices relative to bidding; c) Assisting the Contracting Authority in the analysis of the bids; d) Contracting and supervision of works. Each of these parcels, covering 300 to 400 apartments, will be assigned to one consulting firm. Twelve architecture-consulting firms, and three lead architects /architect advisor will ensure project management. A single consulting architect may be considered for the whole operation. As far as the works are concerned, it is expected to contract between 150 to 200 apartment projects per enterprise except some contracts of a lesser consistency with 25 to 30 units in total. Concerning land development, only one enterprise will be retained per site, except for the largest sites. If necessary, there will be a recommendation of 2 or 3 enterprises per site, which means about 8 contracts for the provision of all the sites with services. This procedure does not exclude having recourse to a group of enterprises should there be a risk of not finding enough enterprises capable of handling large construction sites, thus resulting in a fruitless bidding. This would have serious consequences on the implementation calendar. The Wilaya of Algiers is conscious of the fact that such a number of contracts may impose a very strong workload on its teams. The Wilaya has, therefore considered in the event the need arises, to seek technical support to reinforce its management capacities for the apartment construction program. The implementation according to the work plan will remain the determining factor in the decision of the Wilaya.  15 SECTION 4 PPROJECT MANAGEMENT   16 4 COMPONENT 3: PROJECT MANAGEMENT The third component of the project will require the Algerian authorities to implement the project. This component will deal with the financing of equipment acquisition and the technical assistance (hiring of consultants) to support the authorities in carrying out the functions below: 4.1 STUDIES AND TECHNICAL ASSISTANCE 4.1.1 Component 1 Sub-component 1 (a) The study and the establishment of the rapid and early warning system have the following objectives: i) developing the capacities of coordination among institutions; ii) enhancing information and communication; iii) determining the levels of risks and vulnerabilities of the communities and their properties; iv) establishing the action plans and the simulations of coordinated intervention scenarios; v) reviewing their performance periodically; f) determining the responsibilities and the initiatives of the actors; and g) elaborating post-disaster risks management scenarios. (b) Two studies on vulnerability will outline solutions to situations of strong potential risks that threaten some zones of the whole Wilaya of Algiers (treated in the first survey of vulnerability) and the massif of Bouzareah in particular (treated in the second survey). Thus, these two studies will define the nature of the corrective measures for Algiers or those measures selected on a priority basis for the protection of the Bouzareah massif against the risks of floods and seismic vibrations. (c) Finally, the scientific survey on the phenomenon that led to the disaster of November 9/10 2001 aims at increasing the capacities of forecasting of the engineers of the National Meteorology Office, which is entrusted with weather forecasting in the country. This survey includes the treatment and the analysis of data. Sub-Component 2 The second subcomponent deals with the different types of training: (This is completely in compliance with the objective of the sub-component 1). (a) Short-term training concerning handling of equipment and software, for the mastery of the new technologies such as those related to the interpretation of the radar information or satellite imagery. (b) Training of trainers programs for the schools of the selected institutions (implementation agencies) such as the ONM, the ANRH or the DGPC or for reinforcing their educational programs.  17 4.1.2 Component 2 This component of emergency works consists of the studies necessary for the realization of works. Apart from the preliminary steps and studies, the numerous and important studies, in terms of cost, deal with the following: geodetic surveys by surveyors, topographic survey, soil study, and social assessments; a) The designs, supervision and allocation control of the 5,000 apartments units to be built for the re-housing of the disaster victims and related infrastructures (ground and buried networks, landscape amenities, school infrastructure and areas there). The other subcomponents concerning predominantly hydraulic works and forestation include two main studies: b) The design and the supervision of 10 basins of flood storage in the basins side of the massif of Bouzareah; and of c) The water pipes of Oued Beau-Fraisier. 4.1.3 Component 3 Strengthening project management capacities at the Wilaya level and at other agencies level. This component includes training and technical support aspects notably to be undertaken by consultants who have been identified, apart from those whose task is to increase the capacity of evaluation and implementation of plans in the areas of the following: (a) Environmental management (beneficiaries: inspection of the environment of the Wilaya); (b) Procurement; and (c) The establishment of the financial management and reporting system, based on the same software (purchase, installation, and training) utilized in the five previous projects financed by the Bank.  18 SECTION 5 INSTITUTIONAL ARRANGEMENTS: PROJECT IMPLEMENTATION RESPONSIBILITIES   19 5 INSTITUTIONAL ARRANGEMENTS: PROJECT IMPLEMENTATION RESPONSIBILITIES 5.1 GENERAL PRINCIPLES Since many entities intervene during the ploject implementation, the Algerian government plans to define the principles and the modalities according to which these responsibilities will be clearly articulated. In a more precise way, the four following basic principles apply: a) Implementation of the different operational components of the project will be made by the regular execution agencies in accordance with their prerogatives; b) Particular at.ention will be given to the rapid and diligent execution of this emergency project. It will be ensured mainly through setting up the processes of supervision, coordination and control; but also through the effective involvement of the high-level State staff to monitor the project implementation; c) The handling and the re-housing of the families affected by the disaster and eligible to the relocation according to the regulation in force relative to this project, constitute an aspect that requires a particular attention. Resettlement Action Plan Framework (RAP) outlines specifically the way in which such an aspect will be implemented. This Plan as well as the implementation arrangements are part of the Project Implementation Mlanual and will thus be closely coordinated with the other aspects ot' the project; and d) Since this project is executed with the financial support of the World Bank, the Algerian authorities fully understand related obligations. Therefore, the Borrower agrees to implement the project while respecting the conditions pertaining to the fiduciary obligations of the World Bank on Procurement, Disbursement, protection of the environment, social aspects, and resettlement. 5.2 THE DIFFERENT PARTIES INVOLVED AND THEIR RESPECTIVE ROLES The roles will be defined as follows: The Implementation Agencies- The primary responsibility of these agencies is to implement different components of this project. This responsibility, which is entrusted to a contracting authority or operation manager, implies, in particular, the exercise of the following functions: definition of specifications and/or terms of reference, requests for consultants and/or calls for bids, procurement, reception and control of rendered services, and organization of the expenses.  20 Under the project, the implementing agencies selected by the Algerian government are indicated in the following table: 1.1.2 Scientific Study on the phenomenon of November 10, ONM 2001 _ 1.1.3 Integrated survey (out of Bouzareah zone) DHWA 1.1.4 Integrated survey of the zone of Bouzareah Df tWA 1.2 Training ONM, 1.3 Equipment DGPC, 2001____________ ANRH 2. Urgent physical works ______ 2.1.3 draulic works in the Basin of Oued Koriche DHWA 2.2. Torrential correction of the Oueds of the Bouzareah DHWA ____Massif 2.3. Plantation in the Basin of Oued Koriche and its CF A/WA channels 2.4. Housing Construction DLWA 2.5 Provision of construction related services, connecting DLWA roads, Road network and various networks (VRD) 3. Project Management 3.1 Establishment and operation of Project Coordination WILAYA Unit 3.1.1 Equipment 3.1.2 Provision of Services 3.2. Training on project management WILAYA 3.3 Other specific studies and works WILAYA 5.3 PROJECT MANAGEMENT, COORDINATION AND MONITORING The general management of the project will be entrusted to the Ministry of the Interior and Municipalities (MICL). This component is important because its objective is to reduce the vulnerability of the urban zones in the Wilaya of Algiers. The Ministry will undertake the organization of following committees:  21 a) Inter-Ministerial Committee presided over by His Excellency the Minister of Interior and Municipalities or his representative will be entrusted with task of orienting the activities of the project, to ensure its strategic coordination, and to conduct the required budget appropriation. This committee will be composed of representatives of the Ministries of Finances, Housing, Agriculture and the Forests, the Public Works, Water Resources, and Transport, as well as representatives of the Wilaya of Algiers. This Committee will meet on regular basis and as needed. The Technical Secretariat of this Committee operates under the Ministry of Interior and Local Collectivities. b) Special Committee in charge of dealing relocation of the populations will also be convened to treat these important activities pertaining to vulnerable people. c) Project Coordination Unit will be established within the Wilaya and will have the following key missions: i) Helping the implementation agencies to ensure that the procurement procedures are in compliance with those of the World Bank. The Algerian Authorities strongly stressed the fact that this Unit would not undertake procurement transactions and this function are entrusted to each implementation agency; ii) Preparing follow-up and status reports and the monitoring tables (Performance indicators); iii) Consolidating the project accounting of different components; iv) Submitting to the Algerian Development Bank (BAD), within no more than 5 workdays, the payment requests emanating from the implementing agencies upon ascertaining that the support documents are in compliance with the procedures of the World Bank; and v) Managing the project documents.   22 SECTION 6 PROCUREMENT AND DISBURSEMENT PROCEDURES   23 6 PROCUREMENT AND DISBURSEMENT PROCEDURES 6.1 PROCUREMENT Procurement for the proposed project will abide by Bank procedures as defined in the published Guidelines as follows: Guidelines for Procurement under IBRD Loans and IDA Credits (published in January 1995 and revised in January and August 1996, September 1997 and January 1999), as well as the Guidelines for the Selection and Employment of consultants by the Borrowers of the World Bank (published in January 1997 and revised in January 1999), and arrangements contained in the loan agreement. A list of goods to be acquired has been established, and the Procurement Plan has been prepared and agreed to by the borrower at the time of the assessment. Other items could be identified during implementation. In this case procurement will be in accordance with the principles determined at the appraisal. 6.2 MODALITIES FOR PROCUREMENT REVIEWS Considering the necessity to rapidly undertake required action at every stage of the process, an agreement will be concluded with the Borrower as for the standard period of review pertaining to actions such as the preparation of the bidding documents and technical specifications, evaluation of the bids and selection in order to ensure the preparation and clarification of the contract documents, contract award and signature, notification etc. The Project Coordination Unit (PCU) will establish an access to the Internet as soon as possible. The delegation of functions and the government approval procedures should be simplified and agreed upon in order to avoid delays. The PCU will be staffed with a Procurement Specialist and he will be provided access to the Internet network. The Borrower will have the option to rely upon the assistance of qualified procurement consultants to seek advice and to train the staff of the implementation agencies in charge of procurement, as well as those of the PCU. The estimated value of civil works to be procured under ICB procedures is US$26.3 million, and would be used for civil works contracts of estimated value over US$5.0 million equivalent each. Works contracts costing less than US$5.0 million equivalent each would be procured using NCB procedures acceptable to the Bank and, in accordance with the provisions of the Paragraph l(c), part C of Schedule 3 of the Legal Agreement. Small works contracts not exceeding US$250,000 equivalent per contract up to an aggregate of US$1.5 million would be procured under the Small Works procedure, based on at least three quotations (in writing), obtained after written requests. The estimated value of goods to be procured under ICB procedures is US$7.0 million. All goods contracts of estimated value of more than US$250,000 equivalent each would be procured using ICB procedures. NCB procedures would be used for procurement of goods contracts costing less than US$250,000 equivalent. Goods contracts costing less than US$100,000 equivalent would be procured using international or national shopping procedures. Works contract estimated to cost more than US$500,000 equivalent each and goods contracts estimated to cost more than US$100,000 equivalent each will be subject to prior review. Consultant contracts estimated to cost the equivalent of US$200,000 or more would be procured using Quality and Cost-Based Selection (QCBS) procedures, seeking interest through notification in the UN Development Business. For contracts estimated to cost less than US$200,000 equivalent, consultants may be engaged using QCBS, Quality-Based Selection (QBS) or Least Cost procedures in conformity with Section 3 of the Guidelines. For individual  24 consultant contracts estimated to cost equivalent or more than US$50,000, Section 5 of the Guidelines will be applied and prior review will be required. "Project Costs by Procurement Arrangements" table attached to this MOP provides information on procurement methods for works, goods and services contracts proposed under the project. 6.3 PROCUREMENT METHODS (SEE TABLE A) Goods ICB- For contracts estimated to cost US$0.25 million or more simplified ICB procedures as described below will be used. (a) Advertisement- As soon as possible, but at the latest time when the goods important to be acquired are identified, a General Procurement Notice will be published for every project in Development Business along with the required services of consultants. This notice will be inviting the eligible contractors, suppliers, firms and eligible interested consultants to submit their interest to bid to the implementation agencies, which will forward a copy to the PCU. The General Procurement Notice will also be published in the Algerian national newspapers. For individual contracts, the General Procurement Notice will be followed by the publication of specific announcements in the local newspapers. The bidding documents will be sent to the suppliers who will have expressed interest responding to the General Procurement Notice that will be updated every year. (b) Bank standard documents on the invitation for bids- The PCU will review the use of standard bidding documents approved by the Bank for each procurement method of goods, works, and consultant services. Prior approval by the Bank will be required on the model documents for every procurement method. The period allowed to submit the bids can be brought to thirty days at least. 6.4 INTERNATIONAL SHOPPING International Shopping will be used, as an alternative to Intemational Competitive Bidding for the procurement of goods generally available commercially, including equipment, materials, and standards products estimated to cost $US100, 000 or less. For International Shopping, three quotations from two different countries are required in response to a written invitation. The list of suppliers will be prepared starting first by those who expressed an interest by responding to the announcements published in the press (For example, General Procurement Notice and national newspapers). In order to get the minimum three quotations, it is recommended to solicit more than three suppliers whenever possible, to palliate the possibility that some suppliers would not submit any proposals. Concerning the procedures of International/National Shopping, request for proposals can be sent by a telecopy or fax, and the proposals submission can follow the same transmission channel. 6.5 NATIONAL SHOPPING This method will be used for the acquisition of supplies generally available in Algeria for contracts estimated to cost $US 100, 000 or less. At least three written quotations are required as responses to a written solicitation. The preparation of the list of suppliers that will be invited to  submit proposals will be based on the same principle as applied to International Shopping, but in the case of National Shopping, all suppliers can be Algerian. 6.6 WORKS ICB: International Competitive Bidding. The procedures of advertisement and use of the proposal for bids are those described under ICB-Goods. The ICB procedures for works will be used for each contract estimated to cost US$5 millions or more. NCB: National Competitive Bidding. Taking into account the fact that works are scattered and by their nature are not appealing to foreign entrepreneurs, NCB will be used for contracts estimated to cost more than US$250 000 but less than US$5 millions each. However, interested foreign firms will be allowed to participate in the NCB. At least thirty days period will be. given for the submission of the bids, (minimum applicable), the actual period depending on the nature and the size of the contract. It will not be necessary to go through a pre-selection. A standard bidding document of NCB for works will be approved for use, as is the case for ICB. No offer will be rejected a priori on the basis of a predetermined maximum or minimum amount (Higher and lower limits chosen in advance by reference to the engineer's evaluations). However, after evaluation of bids, it will be possible in exceptional cases and with the approval of the Bank, to declare the bid as unsuccessful if the lowest responsive bid by a qualified contractor is much higher than the amount of the realistically estimated cost of the contract. In this case, a new bidding procedure will have to be launched in accordance with articles 2.59 to 2.62 of the Bank's procurement guidelines for works. The awarding of the contracts will be given to the lowest competitive bidder on the basis of criteria of evaluation specified in the Invitation for Bids and no new criteria will be adopted. The bid opening will be held on the said day and hour upon the receipt of bids. 6.7 PROCUREMENT OF SMALL WORKS The bidding documents approved by the Bank for smaller works will be used for the procurement of works estimated to cost less than US$250,000 per contract. This procurement is based on lump sum, flat rate, or unit price depending on the written proposals received from at least three qualified contractors f responding to a written solicitation. The simplified documents for bidding consist of a detailed description of works, including basic specifications, the planned date of completion of the works, a simple contract in conformity with the standard document approved by the Bank. The contract will be awarded to the contractor submitting the lowest responsive bid for the works required, and having both the experience and necessary resources to meet the requirements for the works in the best way. 6.8 CONSULTANT SERVICES Consultant services will be procured on the basis of the Bank's procurement guidelines. This includes both the selections on a competitive basis and by direct contract in accordance with the paragraphs 3.8 and 3.11 of the Guidelines for the Selection and Employment of Consultants by World Bank Borrowers. Any contracts, envisaged to be procured by sole-source selection, will need to be justified, when a case arises, within the Procurement Plan for each component of the project. Quality and Cost Based Selection as well as the selection of individual consultants, will be generally applied as procurement methods for consultant services. For a contract  ho estimated less than US$200,000; Quality-Based Selection and Least Cost Selection could also be applied.  27 ALGERIA: URBAN NATURAL HAZARD VULNERABILITY REDUCTION PROJECT TABLE A: PROJECT SUMMARY COST US$ Million DA Million Pr,ojectC:,(S,ompon^ent Local -'Foreiign Total .Lcal Foreign Total 1. DM Capacity Building 2.97 6.04 9.01 237.60 483.20 720.80 2. Emergency Physical Works 95.48 10.60 106.08 7638.40 848.00 8486.40 3. Project Management 0.35 0.22 0.57 28.00 17.60 45.60 Subitotal , .... , ,- ; .98.80 16.86 115.66 7904.00 1348.80 9252.80 Design & supervision 1.85 0.46 2.31 148.00 36.80 184.80 Subrotal; ' . 100.65 17.32 . . 17.97 8052.00 1385.60 9437.60 Physical Contingencies 4.03 0.69 4.72 322.10 55.30 377.40 Price Contingencies 2.01 0.35 2.36 161.10 27.70 188.80 TABLE B: FINANCING PLAN BY PROJECT COMPONENTS (US$ Million) . '' -. ''; '.9 .'. - '' 'iTotal Cost JBRD 'Goveiinenr t Project Component (incl. contingencies) Financing Financing 1. DM Capacity Building 9.55 7.55 1.90 2. Emergency Physical Works 114.90 80.65 34.25 3. Project Management 0.60 0.15 0.45 TABLE C: ESTIMATED SCHEDULE OF DISBURSEMENT US$ NMillion 2002 2003 2004 2005 2006 Annual 2.05 42.70 20.00 17.40 6.30 Cumulative Total 2.05 44.75 64.75 82.15 88.45 Project Implementation period: July 1, 2002- August 31,2006 Expected Effectiveness Date: September 1, 2002 Expected Loan Closing Date: February 28,2007  28 TABLE D: THRESHOLDS, PROCUREMENT METHODS AND PRIOR REVIEW (Base Cost Values) Contract Value - Subject to prior a Threshold ($million) . e review (million S) > $5.0 million ICB 26.30* 1. Works < $5.0 million NCB 73.80* <$250,000 Small Works (SW/NS) 0.40* > $0.5 million ICB 6.70* 2. Goods $0.10- $0.5 million NCB 0.23* < $0.10 million IS/NS 0.40* > $200,000 (firms) QCBS 2.60** 3. Services < $200,000 (firms) QBS, or Least Cost (LC) 1.70** < $50,000 Individuals See Section 5 (guidelines) 0.30** Total Amount of contracts subject to prior review: US $112.0 million (91 %) (*) Each contract for: (a) works estimated to cost the equivalent of $500,000 or more; (b) goods estimated to cost the equivalent of $250,000 or more; (c) the first two contracts for works of an amount smaller than $500 000 under NCB; (d) the first two contracts under small works; and (e) the first two contracts for goods under IS/NS; will be subject to Bank prior review. All sole source contracts will be subject to Bank prior agreement. All other contracts will be subject to selective post review by the Bank. (**) Consulting contracts. Procurement for each consultant contract estimated to cost the equivalent of US $0.1 million or more with firms, or equivalent of $50 000 or more with individuals, as well as all sole source contracts, will be subject to the Bank's prior review. Follow-up assignments will be permissible to the extent that these are indicated in initial TORs. Contracts below the above amounts will be subject to selective post review.  29 TABLE E: SUMMARY PROJECr COST ESTIMATE 2; .; e . Estimated'costs, Estimatedeosts I Bank funding- - Sub-omponents > . ,. -.-, S .;. ' DA million US$ million I. Disaster Management Capacity Building Studies 154.00 [1.90 1.52 Training 27.09 [0.34 0.20 TA, studies, training for Environment& Forestry 0.40 0.05 0.04 Equipment 589.60 7.37 5.90 SUB-TOTAL: DM CAPACITY BUILDING .764.00, 9.55 7.65 11. Emergency Physical Works Social infrastructure & facilities (schools, post.) 600.00 7.50 0.00 Infrastructure 2,000.00 25.00 15.00 Housing 6,275.00 78.45 62.75 Reforestation 92.00 1.15 0.69 Geotextile 28.00 0.35 0.25 Studies & Construction Supervision 196.00 2.45 1.96 SUB-TOTAL: EMERGENCY PHYSICAL 9; I9 1.00 114,9 -80.65 11. Project Management* Consultant services 16.00 0.20 0.00 Salaries and recurrent costs 16.00 0.20 0.00 Equipment and Vehicles 10.00 0.12 0.09 Equipment and Vehicles to be used by forestry 6.00 0.07 directorate & environment inspectors l SUBITOTAL: PROJECT MANAGEMENT.- : 48.00 0.6l 0.15 * This component includes the budget for strengthening, inter alia, all activities related to environmental management.  30 TABLE F: ALLOCATION OF LOAN PROCEEDS Expen,diture: :Category Loan Amounttin US$ Financing Percentage (a) Housing 60,500,000 80% Works (b) Other 14,500,000 60% 100% foreign expenditures, Goods 6,300,000 100% local (ex-works) and 70% .__________________ . of other local expenditures Local exp.: 80% of TTC cost Services 3,756,000 mcl. Taxes, 100% foreign excl. taxes, (62% foreign services incl. Taxes) 100% abroad, 80 % of local TTC Training 210,000 cost Front End fee 884,500 100% Unallocated 2,299,500 TABLE G: PROJECT COSTS BY PROCUREMENT METHOD (US$ MILLION) Expenditure Category ICB NCB Other** NBF*** Tottl Total 26.30 77.05 0.48 7.50 111.28 Works ,w Bank loan- -,, 21.00 56:00 0.30 0.00 .77.30: Total 7.06 0.00 0.80 7.86 Goods Bank loan*' - 5.75. ' 0.00 0.55 , , . 6.30 Services Total 0.00 0.00 4.8 0.20 5.03 Services___ - Bank loan*-. .0.00 0.00 .3.97- - . _- .3.97 Front-end Fee Total . -- 0'88 ' " 0.88 Bank loan* 0:88' ...,0.88- Total 33.35 77.05 6.95 7.70 125.05 _I1kofl6wj iNWBg;;a5 IRMO Dj MRI _ Notes: * Figures represent the amounts to be financed by the Bank Loan. All costs include contingencies. *O Other represents intemational and national shopping (including small works) and front end fee. * NBF represents inter alia works, staff salaries and other recurrent costs not financed under the loan  31 TABLE H: SUMMARY PROCUREMENT PLAN Contract I Contract Item Eitimate of :'Proc. Base Cost Im'ple. Expected Expected Number Numb. Miethiod S US- million Period - Start date Finish Ref - of Packages . months . Dite 1. Capacity Building-for Disaster Manageeiiint - . . . '.. DMI.01 Bouzareah Vulnerability study I QCBS 1. 200 36 Dec. 2002 Dec. 200' Incl. T.A. & Training for Indiv. 0.050 36 Dec. 2002 Dec. 200' Environment EAs, EMPs DMI.02 Vulnerability of Aig. Wilaya 1 QCBS 0. 312 24 Mar. 2003 Mar. 200; DMI.03 ONM Early warning study & 2 QCBS 0. 300 24 Jan. 2003 Jan. 200' ONM Scientific Study DMI.04 System Study for ONM I l 0.020 2 Sep. 2003 Oct. 2003 DMI.05 Training (DGPC) I QCBS 0. 110 39 Sep. 2002 Dec. 200: DMI.06 Training (ONM) I QBS 0. 050 39 Sep. 2002 Dec. 200: DMI.07 Training (ANRH) I I 0. 030 39 Sep. 2002 Dec. 200' DM2.01 Equipment for ONM 3 ICB 1. 520 24 July. 2003 July 200' DM2.02 Equipment for ONM 2 IS 0. 180 24 July 2003 July 200' DM2.03 Equipment for DGPC 4 ICB 5 .170 24 Sep. 2003 Sep.. 200 DM2.04 Equipment for ANRH 2 IS 0.081 12 Sep. 2003 Sep. 2002 -2_.Eniieriencyl Physical Works . .__'._.: EPW2.00 Schools & other social 7 [6.875] 32 May 2003 July 200( facilities _NFB_ EPW2.01 Flood storage basins 10 NCBR 12.000 32 Sep. 2003 Jan 2006 EPW2.02 Channel: Oued Beau Fraisier I NCB 1.250 30 Sep. 2003 Jan 2006 EPW2.03 Rehabilitation of channel: I NCB 0.730 30 Sep. 2003 Jan 2006 EPW2.04 Gabions level I (River Beds) 5 NCB 7.600 36 Aug, 2002 July 200' EPW2.05 Gabions level II 4 NCB 1.700 36 Aug. 2002 July 200' (Embankments) . EPW2.06 Geotextile (goods) 2 IS 0.330 36 Aug. 2002 Aug. 200 EPW2.07 Plantation of trees 4 NCB 0.360 36 Aug. 2002 Aug. 200 EPW2.08 Plantation of fruit trees 3 NCB 0.720 36 Aug 2002 Aug. 200 EPW2.09 Housing: site development 8 NCB 14.000 33 May 2003 Feb. 200 EPW2.10 Construction of 5,000 houses- 20 NCB 35.000 33 May 2003 Feb. 200 Tranche I EPW2.11 Construction of 5,000 houses- 12 ICB 25.000 30 July 2003 Feb. 20( Tranche II EPW2.12 Coord. Design & supervision Approx.10 QCBS 0.500 (10) &37 Aug. 2002 Feb. 200, EPW2.13 Final Design & supervision 32 LC 1.600 (10) &37 Aug. 2002 Feb. 200 EPW2.14 Misc. Consult. (incl. Topo. 10 I 0.200 36 Aug. 2002 Feb. 200 surveyors.) 3.-Project.NadIiuaemerit (C.S. incl. Training} ) : . . . . PM3.01 Consultant services, Training 0.190 24 Aug. 2002 July 200 Function. Salaries (Incr. Oper. Costs) 0.150 48 Aug. 2002 July 200 Function. Logistics (recurrent costs) 0.040 48 July 2004 July 200i PM3.04 Office Equipment 2 NCB 0.030 12 Aug. 2002 July 200: PM3.05 Off. Equipment for Env. 1 NS 0.015 12 Aug.2002 July 200 PM3.06 Vehicles 2 NS 0.100 6 Aug. 2002 Jan. 200: PM3.07 Vehicle to be used by Forest 2 NS 0.060 6 Aug. 2002 Jan. 200: & Environment Inspectors I   32 SECTION 7 DISBURSEMENT   ii 7 DISBURSEMENT 7. Disbursement Withdrawals from the proceeds of the loan will be based on the traditional disbursement methods of the Bank, using direct payments, requests for special commitments and reimbursement applications, either fully documented or using Statement of Expenditures (SOEs) as per applicable procedures. As projected by Bank's standard disbursement profiles, disbursements would be completed four months after project closure. Disbursements would be made against standard Bank documentation. 7.1 SPECIAL ACCOUNT (SA): To facilitate disbursement of eligible expenditures for goods & services the borrower will open and maintain a special account at the Banque d'Algerie (the Central Bank of Algeria) to cover eligible project expenditures to be managed and administered by the Banque Algerienne de Developpement (BAD). Authorized allocation of the special account would be US$6,000,000 covering an estimated 4 months of eligible expenditures financed by the loan. Banque Algerienne de Developpement (BAD) will submit monthly replenishment applications with appropriate supporting documentation, including reconciled bank statements, for expenditures incurred and will retain and make the documents available for review by Bank supervision missions and project auditors .To the extent possible, all eligible project expenditures should be paid through the special account. Specifically all eligible project expenditures of less than US$50,000 equivalent shall be paid from the SA. 7.2 USE OF STATEMENT OF EXPENDITURE (SOES): All applications to withdraw proceeds from the grant will be fully documented, except for: (i) expenditures of contracts for goods with an estimated value of US$250,000 or less; ii) expenditures of contracts for works with an estimnated value of US$500,000 or less iii) expenditures of contracts for consulting firms with an estimated value of US$100,000 or less and (iii) US$50,000 or less for individual consultants, which may be claimed on the basis of Statements of Expenditures (SOEs). Documentation supporting expenditures claimed against Sues will be retained by the BAD and will be available for review when requested by Bank supervision missions and project auditors. All disbursements will be subject to the conditions of the grant Agreement and the procedures defined in the Disbursement Letter. 7.3 RETROACTIVE FINANCING The retroactive financing which amounts to $US500,000 would be applied to the expenses which occurred after July 1, 2002, covering consultant services, deforestation and other emergency works. The services of the consultants concern the first phases of the detailed design, the works of flooding prevention, and those works of reforestation that must start before the next rainy season. The contracts that must be financed retroactively include specifically the following: EPW2.04 and EPW2.05 (Construction of installation of big cages or gabions), EPW2.07 and EPW2.08 (Reforestation), EPW2.14 (different services of consultation), PM3.04 and PM3.06 (Equipment and vehicles for the management of the project'  34 7.4 INFORMATION FLOW Homogenization and harmonization will be sought to the extent possible in areas such as the methods and accounting presentations, the Financial Management Reports, (so as to be in accordance with the models of the IBRD), and the software for the financial management of the project (monitoring, evaluation, and audit). Therefore, the flow of documentation will be as follows: The PCU will transmit the original of the relevant receipts to the BAD for payment operations and will keep a copy of the transmitted documents; The BAD will update the description form of the operation. It will keep the original of the documents and files as well as the debit statements issued by the Bank of Algeria or the World Bank. It will make a copy of the accounting statements of the Special Account to send as well as that of the loan account to PCU and General Direction of External Financial Relations of the Ministry of Finance (DGRFE), and to the World Bank. Otherwise, a copy of this accounting will be transmitted monthly to the DGRFE; and The Bank of Algeria will transmit to the BAD, a monthly summary of the special account even though no operation has been done during the considered month.  3:,o SECTION 8 FINANCIAL MANAGEMENT   36 8 FINANCIAL MANAGEMENT 8.1 GENERAL VIEW All agencies involved in the project (Wilaya of Algiers, ONM, DGPC, ANRH) are government agencies subject to the public accounting rules as defined by the legal framework applicable to the public sector. The Wilaya of Algiers is the implementing agency of the project and will establish a Project Coordination Unit (PCU) to facilitate the implementation. Basically, the financial management functions on the project will be divided between the PCU and BAD (Banque Algerienne de Developpement). The PCU will be responsible for the project accounting and reporting functions including: booking accounting transactions, record keeping, verification of supporting documents, preparing bank reconciliation, preparing periodic reports and financial statements, and preparing Payment Vouchers along with the verified supporting documents and send them to BAD for payments, as well as monitoring the Special Account (established at the Central Bank of Algeria). While BAD will be responsible for the administration of the Special Account and issues Payment Orders (withdrawn on the Special Account in the Central Bank) after verification of the supporting documents received along the Payment Voucher received from the PCU. BAD will keep track of transactions incurred on the Special Account and prepare Withdrawal Application to replenish the Special Account. Accordingly, the PCU is responsible for the accounting and reporting aspects except for issuing Payment Orders and administration of the Special Account, which belong to BAD. Each of the implementing agencies will be entitled to conduct its own procurement, however, payments to contractor and supplier will be made by BAD through the PCU based on proper supporting documentation. Quarterly Financial Monitoring Reports will be prepared by the PCU and sent to the Bank within 45 days from period-end. Annual financial statements of the project will be audited by the government audit department (Inspection Generale des Finances). Financial Monitoring Reports (FMR) will be prepared for the project on a quarterly basis within 45 days of the end of each quarter by the PCU. The set of FMRs will include: summary progress reports on project implementation, cost per component for the quarter and cumulative costs incurred per expenditure type, project balance sheets, and withdrawals made based on contracts below the stated threshold. The PCU will prepare annual project financial statements (project balance sheet, Special Account statement, and cash flow) and arrange for audits to be submitted to the Bank in accordance with International Accounting Standards (IAS) by an independent auditor with TORs acceptable to the Bank. The audited financial statements along with the auditor's opinion will be sent to the Bank within six months of year-end. 8.2 FINANCIAL MANAGEMENT (FM) ASSESSMENT The financial management assessment conducted for all participating agencies revealed that the financial management systems in place are adequate and meet the minimum the requirements of the Bank. However, as these FM systems are specific for government reporting  37 purposes, they are not equipped to generate project reports required by Bank to facilitate financial monitoring of the project. For the implementing agency, the Wilaya of Algiers, it is estimated that such deficiency requires approximately six months to upgrade the system to generate these reports (dated covenant). In the meantime, the PCU will use simplified computer spreadsheet tables to enable generation of project's required reports during the first six months of the project implementation required for system upgrading. 8.3 ACCOUNTING SYSTEM The project accounting will be the responsibility of the PCU in the Wilaya of Algiers, which will maintain all accounting records, supporting documents, undertake booking all financial transactions, prepare quarterly reports, prepare annual financial statements, and send all payment supporting documents for BAD to prepare Payment Order to the Central Bank, after examination of the supporting documents, to execute the payments. Accounting for the project will be on cash basis in line with government and BAD accounting. BAD will send monthly bank statement to the PCU to allow proper monitoring of the Special Account and facilitate preparing bank reconciliation and check accuracy and completeness of transactions incurred. Detailed accounting and disbursement procedures, as well as procurement, will be part of the Project Implementation Manual (PIM). 8.4 PROCEDURES OF INTERNAL CONTROL The Internal Control Procedures put in place at the Wilaya of Algiers (and the other concerned agencies) is based upon the governmental system as set by the laws and the regulations, that are accepted by the Bank and do not present any problem of responsibility. For the objectives of the project, the PIM will define the procedures of control and the relation between the implementation agency (Wilaya of Algiers) and the other involved agencies (ONM, ANRH, and the DGPC), as well as the BAD, which is in charge of the financial management of the project. In addition, the PIM also defines the procedures of acquisition for the project that must be conforming to the recommendations of the World Bank. The transactions of acquisitions entered into by the implementing units will be undertaken according to PIM and the supporting documents will be sent to the PCU for verification and registering in the accounting system of the project. Then, these documents will be transmitted by PCU to the BAD for verification and payment of the firms and suppliers. In order to facilitate this task, and before the beginning of the year, every concerned agency will prepare and will accept an annual equipment plan in coordination with the PCU. 8.5 FLOW OF FUNDS Loan proceeds will be transferred to the Special Account, established at the Central Bank of Algeria, and solely managed by BAD. The PCU will prepare payment voucher and attach all verified supporting documents and sent them to BAD for verification and preparing payment order to the Central Bank to execute the payment to contractors/supplier, BAD will manage disbursements, reconcile expenditures with approved budgets, consolidate and reconcile project expenditures with the Bank's Loan statements, and prepare replenishment of the Special Account. As mentioned above, each of the involved units (Wilaya of Algiers, ONM, ANRH, and DGPC) is entitled to conduct its own procurement, however, all  38 accounting will be centralized in the PCU to and then sent by the PCU to BAD for payment process. 8.6 FINANCIAL MONITORING REPORTS The PCU will prepare the Financial Management Reports and will send them non-audited at the Bank within the 45 days following every end-of-quarter. The Financial Management Reports will include (a) a general progress report about Project implementation (b) the cost by component for the quarter (c) the costs incurred by type of expenses (d) the project balance sheet and (e) the acquisitions incurred on contracts under the established threshold. The project statement of accounts will be put in place to facilitate the automatic generation of the reports of financial controls. The contents and the format of the reports will be prepared by the consultant and subject to agreement during the negotiations. By the same token, each unit in charge will prepare a quarterly general report on its activities pertaining to the project, and on the physical progress implementation. These quarterly reports will be sent to the PCU within the 30 days following the end of every quarter. 8.7 AUDIT The project accounts and the yearly financial statements (project balance sheet, the flow of funds, and the statement of the Special Account) will be subjected to a yearly audit. It will be conducted in accordance to international standards, and by an independent auditor acceptable to the Bank, and under the conditions of reference followed by the Bank. The Audit will examine all sources of the funds of the project, including the Bank loan. In the same way, it will also examine all incurred expenses including those related to the statements of the expenditures (SOEs) by ascertaining their conformity with the Loan Agreement. An auditor will present an honest opinion on the project financial statements: In addition the auditor will supply a separated viewpoint on the eligibility of all incurred expenses that are included in the SOEs. The Audit report should be sent to the Bank not later than six months after the end of the year. 8.8 RISKS The project's financial management risk is considered moderate. This consideration is the result of the following: (a) the PCU is an entity that is newly created and therefore has no experience dealing within the projects financed by the Bank; (b) Other entities are involved in the project, and conflicts of procedures and/or of authority could generate some delays in its realization; and (c) the migration of financial data from the simplified monitoring system toward an integrated accounting system, and the upgrading of the monitoring and accounting systems. These risks will be mitigated by: recruiting a qualified consultant; by upgrading the system of monitoring and accounting; a rigorous control by the Bank experts during the first year of implementation; and the provision of technical support to the project team as well as to the PCU during the first year via training and workshops.   39 ATTACHMENTS   7-V ATTACHMENT 1: THE SOCIOLOGICAL FEATURES OF THE AFFECTED POPULATION The people affected by the floods reside in two types of districts that are in full contrast based upon their urban history and the way in which they were populated. One can divide these sets of districts into two categories: a) The first group of districts is composed of early settled areas where the form of urbanization (more than 45%) is made out of collective buildings with several floors. These are the communes of Bab-EI-Oued, Casbah, Alger-Centre, El Biar and Hammamet. b) The second group is made up of more recently urbanized districts where the main building is the individual residence. These are the communes of Oued Koriche, Bouzareah, Bologhine, Rais Hamidou and Beni-Messous. Maps I and 2 provide the distribution of the forms of residential occupation in the concerned zone. An examination of these two maps reveals that the communes belonging to the first type regroup densely populated old urban zones like Bab-EI-Oued, the Casbah, El Biar and Alger- Centre, and a more recently urbanized commune that had received an important number of social collective apartments since 1975 (Hammamet). In the second type, one notices two categories of communes: those which developed since the beginning of the century (Bouzareah, Bologhine and RaYs Hamidous) and those which constituted, to various degrees, the area where the poor migrated in the early sixties during the independence of the country (Oued Konche and Beni- Messous). Map 1: Distribution of collective housing per commune Proporlion drmneuNes coDectis 4* 4.899 a ,! . 213 lJ .3 \ ' !! .!,1,LIh0!;jgd 0,0 8.3, 4j;l. -7.7~ ~ ~ ~~~~- l11 -- K .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1 0 1 l - -, ________________ II : ' ! I.il'l :!.', !ihli 1I- l i;'!i 1! ,i jil la ! ~I, 1 -'  Map 2: Proportion of individual Housing ~~~~~~~~~~~~~~~~~IX. , , ._15U ' ' '. . Z ' . 'amnae, ,Am Benlan I_,, jd!i.e;EIOr ProponIon de malsons indMduelles 42* D 656 -,32r_- 49.2 ; IefCent