Announcement of Philippines Receives Twenty-Eight Million Dollars from IDA for Rural Infrastructure Development on April 13, 1978

...... ' . ··,--,.oR IMMEDIA1:_E- RE.LEASE •\Norld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: ("02) 393-6360 I DA NEWS RELEASE NO. 78/58 APRIL 13, 1978 PHILIPPINES RECEIVES $28 MILLION FROM IDA FOR RURAL INFRASTRUCTURE DEVELOPMENT A rural infrastructure project in the Philippines designed to improve the quality of life and increase rural incomes has received approval of a $28 million credit from the International Development Association (IDA). The credit from the World Bank's affiliate for concessionary lending will help finance the provision of irrigation, transportation and health services in Northern Luzon, and Central and Western Visayas. The project will be imple- mented in six provinces--Abra and Kal inga-Apayao in Northern Luzon; Aklan, Antique and Capiz in Western Visayas; and Bohol in Central Visayas-- chosen on the basis of low per capita incomes and inadequate infrastructure. Per capita incomes in these provinces range from $35 to $80, compared with the country's absolute poverty level income of $193 per capita in rural areas. • Under the $59 mill ion project, new irrigation facilities will be con- structed on about 8,500 hectares (ha) of rainfed land and two communal i~rigation systems serving 900 ha will be rehabilitated. These irrigation works will bring about an increase in paddy production of about 29,000 tons a year. Some 8,500 families of farmers and landless laborers--a total of 46,000 people-- practically all of them below the country's absolute poverty level, will directly benefit from increased production and employment opportunities. The additional demand for farm labor will be equivalent to some 1,600 full-time jobs. The port and road components of the project are aimed at improving transportation between isolated villages and economic and administrative centers. Rehabilitation and improvement of three ports will eliminate costly haulage of goods over poor roads to distant ports and will thus substantially benefit the poor rural population who depend on shipping for mi ·eting their products. The village road component, which consists of construction of about 1,150 kilometers (km) of roads and improvement of about 240 km of existing roads, is expected to improve access for 78,000 families, or 430,000 people, who current- ly must rely on dirt tracks, many of which are impassable during the wet season. The 60 village health stations included in the project will provide simple health care, family planning services and nutrition advice to families in rural areas. About 47,000 families are expected to be served by the village health stations. The project also provides funds for construction of 300 village wells which will improver.he availability and quality of water for about 100 1 000 • vi 11 agers . , • • •I NOTE: Money figures are expresses in U.S. dollar equivalents.  ...... '""' - 2 - The $28 mill ion credit is the first IDA operation in the Philippines in the Bank/I DA fisca1 year 1978 which began July 1, 1977. So far, in fiscal 1978, the Philippines has received from the World Bank loans amounting to $165 mill ion for five projects. Of this sum, $135 mill ion has been approved for projects benefitting the.country's rural population: $65 mill ion for irrigation, $60 mi!l ion for rural electrification, $8 mill ion for smallholder tree farming, and $2 million to provide technical assistance for educational radio. The IDA credit is for 50 years with a grace period of 10 years. It bears no interest but carries a service charge of 3/4 of 1% to cover IDA's administrative expenses. - 0 - • • • -FOR~ NO. 1121 (5-76) T ECHN I CAL DAT A • PROJECT: Rural Infrastructure COUNTRY: Republic of the Philippines TOTAL COST: $59 million IDA FINANCING: $28 mill ion, standard IDA terms. OTHER FINANCING: Government of Philippines, $31 mil 1 ion. IMPLEMENTING ORGANIZATION: Department of Public Works, Transportation and Communications (DPWTC), E. de Los Santos Avenue, Quezon City, Philippines Department of Public Highways (DPH), Port Area, Manila, Phi 1 i pp i nes National Irrigation Administration (NIA), E. de Los Santos Avenue, Quezon City, Philippines PROJECT DESCRIPTION: The project consists of (a) construction of new irrigation facilities on about 8,500 hectares (ha) of currently rainfed land and rehabilitation of two existing communal irrigation systems serving 900 ha; (b) construction of about 1,150 km of new barangay (village) roads and improvement of about 240 km of existing barangay roads; (c) rehabilitation and improvement of three ports; (d) construction of about 60 barangay health stations; and (e) construction of about 300 wells serving villages of 300 to 400 inhabitants. • PROCUREMENT: Contracts for the supply of equipment and materials ($5.2 mill ion) will be awarded on the basis of international competitive bidding in accordance with Bank/lDA guidelines. For purposes of bid compari- son, local manufacturers will receive a preference of 15% of the c. i .f. price of imported goods, or the custom duties, whichever is lower. Off-the-shelf items costing less than $10,000 each will be procJred through existing Government procedures, which are acceptable to the Association. The total cost of such items for all components of the project will not exceed $300,000. Civil works in the project service area ($38 million) will be scattered over about 500 separate locations in six different provinces and will therefore not be suitable for international competitive bidding. Most of the larger communal irrigation systems, barangay roads, ports and health stations will be done by contract awarded on the basis of competitive bidding in accordance with local procedures which are acceptable to the Association. Foreign firms will be eligible to participate. The balance of civil works will be done by force account which will be li~ited to 40% of the total cost of the works. CONSULTANTS: Two engineers experienced in rural roads construction will be employed by DPH, the first for two vears to assist in project implementation, and the second for four months to help pr~pare a plan of action for labor-based construction methods. DPH will also hire consultants as required to assist in preparation of detailed design and contract documents and preparation of a future rural infrastructure project. • ECONOMIC RATE OF RETURN: 17% ESTIMATED COMPLETION DATE: 1982 - 0 -