Jordan - Third Amman Water Supply and Sewerage Project

Document of sr & The World Bank FtoE Cur' FOR OFFICIAL USE ONLY Report No. 1817a-JO THE HASHEMITE KINGDOM OF JORDAN STAFF APPRAISAL REPORT AMMAN WATER SUPPLY AND SEWERAGE PROJECT III March 2, 1978 Water Supply and Sewerage Division Europe, Middle East and North Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Jordan Dinar (JD) JD 0.33 = us$ 1.00 JD 1.00 = US$ 3.03 JD 1.00 = 1,000 fils MEASURES AND EQUIVALENTS Kilometer (km) = 0.62 mile Square Kilometer (km2) = 0.386 square mile Hectare (ha) = 2.47 acres Millimeter (mm) = 0.03937 inches Centimeter (cm) = 0.3937 inches Meter (m) = 39.37 inches Cubic Meter (m3) = 264 US gallons Cubic Meters per second (m3/sec) = 22.8 million US gallons per day Liter (1) = 0.264 US gallons Liters per second (1/sec) = 22,800 US gallons per day Liters per capita per day (lcd) = 0.264 US gallons per capita per day Milligram per liter (mg/l) = 1.0 parts per million ABBREVIATIONS AND ACRONYMS AWSA = Amman Water and Sewerage Authority IDA = International Development Association JVA = Jordan Valley Authority JVC = Jordan Valley Commission MOH = Ministry of Health MRA - Ministry of Rural Affairs MVLF = Municipal and Village Loan Fund NPC = National Planning Council NRA = Natural Resources Authority ODA = Overseas Development Administration (UK) USAID = United States Agency for International Development VBB = Vattenbyggnadsbyran/Fawzi Associates WSC = Water Supply Corporation ABBREVIATIONS ft = foot min = minute lpcd = liters per capita per day ppm = part per million m = meter sec = second m3/sec = cubic meters/second U.S. = United States Mm3/yr = million cubic meters/year AWSA's Fiscal Year January 1 - December 31  FOR OFFICIAL USt, )NLY JORDAN STAFF APPRAISAL REPORT ON THE AMMAN WATER SUPPLY AND SEWERAGE PROJECT III TABLE OF CONTENTS Page No. I. THE WATER SUPPLY AND SEWERAGE SECTOR . .............. 1 General **.*. *****............... * ............................ 1 Water Resources and Sewerage ....................... 2 Sector Organization ................................ 3 Sector Program ........ .. ................. ... 4 Sector Priorities .................................. 5 Performance in Previous IDA Lending .. .............. 6 IDA's Objectives for the Sector .................... 6 II. PROJECT AREA ........ ............................... 7 Water Resources - Amman .......................... . 7 Existing Facilities - Water and Sewerage ........ ... 8 Urban Poor ................................... . 8 Areas to be Served by AWSA's Program: Table 1 - Estimate of Level of Service for the Urban Poor - Water Supply .... ....... 9 Table 2 - Estimate of Level of Service for the Urban Poor - Sewerage ............ ... 10 Unaccounted-for Water ... .............. .......... 11 Sewerage Connections ..................... . ......... 12 Other Works ........................................ 13 III. THE BENEFICIARY ...................... ,,......... .. 14 Introduction ............................................... 14 Organization and Management ..... ................... 14 Personnel .......................................... 14 Training .................................................. 15 Accounting ..........,. 15 Audit and Insurance ....... .......... ............... 16 This report was prepared by Messrs. William J. Hayden and Steven G. Serdahely. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  TABLE OF CONTENTS (Continued) Page No. IV. DEMAND AND MARKET ASPECTS ............. ............. 17 Population Forecast ................... *. , 17 Present Consumption ...... .......................... 17 Consumption Forecast ...... ......................... 18 Figure 1 - Population Development in Amman (Chart WB 18092) .............................. 19 Figure 2 - Population, Water and Sewerage Connections (Chart WB 18090) .... .............. 20 Figure 3 - Forecast of Water Consumption and Production (Chart WB 18091) .... ............... 21 V. THE PROJECT ........................................ 22 Project's Objectives ......22 Scope of the Project ......22 Project Description ................................ 23 Cost Estimates .. ........... 24 Project Implementation .............. .. ............. 25 Procurement ...................... .................. 25 Figure 4 - Network Diagram of Project Activities . 26 Prior Contracting and Retroactive Financing ........ 27 Disbursements ...................................... 27 Monitoring Criteria .................... 28 Table 3 - Monitoring Indicators .29 VI. FINANCIAL ANALYSIS ................................. 30 Tariffs ............................................ 30 Financing Plan ....... .............................. 32 Future Financial Performance ........ ............... 33 Table 4 - Income & Expenditure Statements/ Water Supply .................................. 34 Table 5 - Income & Expenditure Statements/ Sewerage ...................................... 35 Table 6 - Cash Flow Statements ......... .. ........ 36 Table 7 - Balance Sheets . . 37 VII. ECONOMIC ANALYSIS .................................. 38 Least Cost Solution ............... .. ............... 38 Average Long-Term Incremental Cost - Water Supply .. 38 Internal Economic Rate of Return ......... .. ........ 38 Risks ........................ ...................... 39 Environmental Impact ............... .. .............. 39  TABLE OF CONTENTS (Continued) Page No. VIII. AGREEMENT REACHED AND RECOMMENDATIONS ............... 40 Selected Documents and Data Available in the Project File ........................................... 41 IBRD Maps Nos: 13194 13193 12120 Rl   CHAPTER I THE WATER SUPPLY AND SEWERAGE SECTOR General 1.01 The Hashemite Kingdom of Jordan, located in the arid zone of the Middle East has an area of approximately 87,000 Km2, of which about 81,000 Km2 lies on the East Bank of the Jordan River. The last official census was conducted in 1961, and as substantial movement of population has occurred since then, population statistics referred to in this Report should be regarded as approximations only. Population distribution at year-end 1975 was estimated by the Jordan Statistics Department as follows: Governorate Estimatea Population Amman 1,098,000 Irbid 564,000 Balqa 130,000 Karak 108,000 Ma'an 52,000 Total Population 1,952.000 1.02 The overall pattern of settlement in Jordan is characterized by a large metropolitan area (Amman Region), a few medium-sized towns and many small villages. The annual rate of population growth in Amman Region ex- ceeded 11% during the period of 1966 to 1976, while the national growth rate was a significant 3.5% per annum. 1.03 Not only is the city of Amman the capital of Jordan, but it is also the center of the country's main commercial activity. With a population that has more than doubled twice during the past two decades the need for adequate water supply and sewerage services in Amman continues to accelerate. Addi- tionally, the influx of refugees into Amman has exacerbated the growth problem within the 13 municipal areas of the city. Although there are several smaller enclaves of refugee population totalling approximately 20,000 residents, the two large camps, Hussein and Wahdat, account for approximately 165,000 residents. 1.04 The Government is now making a major effort to expand and improve the water supply and sewerage services in Amman through a combined program which will directly benefit an estimated 270,000 persons with improved water supplies and 316,000 persons with improved sewerage services. As part of the financing arrangements for this program, the Government has requested IDA's assistance for a project which will provide piped water supplies to approximately 92,000 users and piped sewerage systems to more tian 121,000.  -2- Water Resources and Sewerage 1.05 Rainfall in Jordan averages from 50 mm/year in the desert areas to 600 mm/year in the highland areas. Surface water sources in the Jordan Valley are estimated by the National Planning Council (NPC) to provide an average annual flow of 635 Mm3, and in the Dead Sea Basin 194 Mm3 is the estimated flow. However, exploitation of surface water resources for community water supplies has not occurred to any great degree as yet, largely due to the sporadic flow patterns and the relatively long distance from population centers. Any future exploitation of such resources will involve high develop- mental costs due to the large capital investments required for transmission systems, and high operating costs inherent in the 600 to 800 m. lifts from source to distribution. 1.06 Most of the community water supply systems in Jordan presently depend upon groundwater. Even with full development of these groundwater sources, demands still exceed supply. Average national per capita consumption in 1975 was estimated at 28 lpcd. A 1973 Ministry of the Interior report showed that of 794 villages covered in the survey, 391 did not have proper water supplies. Further, in the remaining communities (with piped water supplies) demands exceeded supply in all cases. Water tankers were depended upon to bridge the gap. Types of Domestic Water Supplies in Towns and Villages -----------Governorate----------- Amman Irbid Balga Karak Ma'an Total Percentage Villages with distri- bution through house connections 87 178 9 78 20 372 47 Villages with distri- bution without house connections 10 6 7 - 8 31 4 Villages with no piped water supply 131 134 49 32 45 391 49 Total Villages and Towns 228 318 65 110 73 794 100 1.07 Physical and chemical quality of drinking water is acceptable in most areas of Jordan, although the nitrate level has reached 80 mg/l in the Amman-Zerqa area. However, the bacteriological quality of water in several areas is poor, indicating contamination of groundwater supplies through unhygienic domestic waste disposal or through back-siphonage due to inter- mittent service.  1.08 Only three cities in Jordan, Amman, Salt and Aqaba, have sewage collection systems and treatment plants. In other communities cesspools are used for domestic sewage disposal. Under the aegis of the Ministry of Municipal and Rural Affairs (MRA) the Salt collection system is being renovated and extended, and the ineffective treatment plant is being con- verted to aerated lagoons. Overflowing cesspools in most communities are a constant nuisance as well as a continuing health-risk indicating the need for improved design, construction and maintenance. A study is underway for the Irbid sewerage system and studies for Zerqa and Jerash are planned. Sector Organization 1.09 The Natural Resources Authority (NRA) has overall responsibility for water resources studies and water planning throughout Jordan. In con- sultation with IDA, the Government created the Amman Water and Sewerage Authority (AWSA) through Law 19 in 1973, which has the responsibility for water supply, sanitary sewerage and surface drainage in Amman (paras. 3.03 and 3.04). 1.10 In 1973 the Water Supply Corporation (WSC) was established, succeed- ing the NRA Water Supply Department. WSC assists the smaller municipalities in the design and construction of water supply projects. After commissioning, WSC transfers the system to the municipalities which, in turn, assume main- tenance and operation responsibilities. WSC also acts as a bulk supplier of water to a large number of towns and villages. The WSC Board of Directors is headed by a Director-General and is responsible to the MRA. WSC employs about 700 persons, 70 technicians and 630 unskilled workers. At present, a reorgani- zation is being undertaken after the departure of some key staff; and it is not clear how the final organization will evolve. In any event the Corpora- tion will require substantial strengthening of its technical, operational and administrative staff in order to effectively develop and execute the Government's water supply program in WSC's area of responsibility. 1.11 The East Jordan Valley is under the jurisdiction of the Jordan Val- ley Authority (JVA), and domestic water supplies in the valley fall within the JVA purview. As a successor to the Jordan Valley Commission (JVC) which had been established in 1973, JVA was incorporated in 1977 to assume JVC's program of development, policy making, project financing, and construction contract administration. In the area of water supply, JVA has three geogra- phical sub-divisions: Northern Ghor (10 settlements); Central or Middle East Ghor (18 settlements); and Southwest Ghor (8 settlements). 1.12 The MRA is responsible for design and construction of sewerage systems outside Amman. Responsibility for maintenance and operation of the existing rudimentary systems, principally cesspool pumping, rests with the municipalities. In 1973, consideration was given by the Government to form a National Water and Sewerage Board; and enabling legislation was drafted. However, no further action has yet been taken.  - 4 - 1.13 The Municipal and Village Loan Fund (MVLF) assists the WSC with the financing of small projects in some villages, and also lends directly to municipalities and village councils. Established within MRA as a specialized credit institution to provide finance for municipal and village projects, the MVLF depends upon WSC and MRA for technical assistance in processing its water supply and sewerage loans. The Government has requested Bank assistance in reviewing the operation of MVLF with the objective of the Bank's future tech- nical and financial support for the institution. Sector Program 1.14 Within the context of the current Five-Year Plan (1976-80), which emphasizes the extension of public services to all communities in the country, based on a rational relationship between economic and regional planning, the program for water supplies and sewerage is as follows: (i) drill new wells to increase the quantity of drinking water produced in the various regions; (ii) expand water networks and contruct new storage tanks in the various governorates; (iii) adopt a progressive water tariff structure to control consumption; and (iv) undertake sewerage projects to improve facilities in Amman and Salt and sewerage studies in other main cities. 1.15 The sector investment programs as presented in the Plan and as revised to reflect the proposed project for Amman and Salt is tabulated as follows: Water Supply Sewerage Total --------(JD Millions)--------- Area: Amman 26.50 9.80 36.30 Jordan Valley ' 3.30 - 3.30 Governorates: Amman/Balqa 2.17 1.60 3.77 Irbid 7.44 - 7.44 Karak/Ma'an 13.71 - 13.71 Irbid, Zerqa, Jerash (Studies) - 0.08 0.08 Total 53.12 11.48 64.60  -5- Sector Priorities 1.16 At present over 60% of the urban population in Jordan has house connections to piped water supply systems and about 10% of the urban popula- tion has service connections to sewage collection systems. By the end of the current Five-Year Plan (1980) it is estimated that 66% of the total urban population will enjoy water connections and 25% sewerage system connections. 1.17 The continuing major problem will be to increase the amount of water available for community water supplies. The scarcity of water or high cost of transportation is reflected in the low national per capita consumption, estimated at 28 lpcd in 1975 and expected to rise to 38 lpcd by 1985. In small villages and in refugee camps consumption figures of 10-15 lpcd are not uncommon. Water allocation problems occur between irrigation needs and potable water needs, particularly in the Jordan Valley. The King Talal Dam was originally intended for irrigation purposes, and planning for the Maqarin Dam is on the same basis. However, recent AWSA water resources studies have indicated that Amman must depend on these resources to meet the bulk of its future demand. Consequently, about 17 Mm3 per year of the King Talal Dam outflow is being allocated to Amman in connection with this project. Mean- while, Government engaged consultants to conduct an overall review of the existing policies and organization of the sector, and the recommendations of the consultants' study will be taken into account by the Jordanians in developing an overall policy and strategy for the future planning of opera- tions in the sector. 1.18 Although the Government plans to proceed with a number of urban projects, the rural sector has not been neglected. Of the current Five-Year Plan budget of JD 53.12 million for domestic water supplies, approximately JD 26.62 million (about 50%) will be invested to serve rural areas with urgently needed water supplies outside the city of Amman. However, because of the concentration of population in Amman and the constant threat of serious epidemics of waterborne diseases due to unsanitary conditions, the highest priority at present is given to the provision of safe water supplies and waste disposal systems in the municipality. 1.19 Continuing budgeting constraints limit the investments which can be made by Government and so bilateral assistance will continue to be heavily relied upon to meet the financial requirements of the water supply and sewer- age projects. The United States Agency for International Development (USAID) has expressed an interest in participating in the financing of AWSA's program; US$28.5 million has been allocated for FY78, and an additional US$12.0 million is under consideration for FY79. The Saudi Fund for Development has indicated interest in providing a loan of US$20.0 million to assist AWSA in financing the King Talal Dam Transmission Project. Ongoing water supply and sanitation programs have been assisted by the Federal Republic of Germany, Iran, United Kingdom and the United States.  - 6- Performance in Previous IDA Lending 1.20 IDA Credit 18-JO was extended to the Government in 1961 in order to cover the foreign exchange costs of augmenting and improving the Amman water supply. The Credit was on-lent by the Government to the Amman Municipal Water Department. Subsequent to overcoming initial delays due to political distur- bances and to lack of local funding the Credit amount of US$1.5 million was fully disbursed by January 1968. Among the objectives of this project was the institutional development of the Department. This objective was not fully achieved. In December 1963 the Credit 43-JO, for US$2.5 million was utilized by the Government to assist with the financing of water supply projects in Ramallah-El Bira (Jerusalem), Azraq-Irbid and Zerqa. Credit 385-JO, which was the first to support AWSA's establishment and program, became effective in 1973. The US$8.7 million Credit was to cover 75% of the estimated US$11.5 million project cost for extending the water supply and sewerage services and reducing unaccounted-for water. As of November 1977, all major construction had been completed, and the civil works elements have entered the guaranteed maintenance phase. A balance of US$300,000 remained in this credit and should be disbursed within three months. Substantial progress was made in achieving the project objectives, particularly in expansion of the systems and improve- ment in AWSA's operational and managerial effectiveness. IDA's Objectives for the Sector 1.21 IDA's immediate objective in the sector is to continue the develop- ment of AWSA's institutional and operational capabilities to enable it to provide effective water supply and sewer services in the major urban area in Jordan. This objective is expected to be achieved under the present Credit. IDA's further objective should be to assist WSC in overcoming its present tech- nical, organizational and administrative problems to enable it to effectively implement the Government's strategy of improving water and sewerage services in other urban and rural areas in Jordan.  -7- CHAPTER II PROJECT AREA Water Resources - Amman 2.01 Amman now depends on two aquifers in the Amman-Zerqa basin for its water resources. AWSA has at present 48 wells, but only 28 are in actual production. Instability of production typifies the performance of the exist- ing well fields. A review of the performance of the wells was conducted in August 1977, and from examination of the data obtained it can be concluded that the aquifers are being mined. The combined capacity of the operating wel:Ls is such that approximately 1,800 m3/hour (500 1/sec) can be pumped into the Amman system. AWSA has embarked on a rehabilitation program covering 12 wells and expects to restore at least six wells to their former capacity. 2.02 Thorough investigation of the two aquifers has led to the conclusion that the future demands of Amman cannot be met from these sources. Therefore studies have been conducted by AWSA and its consultants in which alternative potential sources have been examined to determine their possible utilization for the Amman water supply. 2.0:3 Six groundwater and four surface water sources were studied. Recommendations for the use of one groundwater source at Qastal were made (para. 2.04). The groundwater in the Azraq area, presently supplying Irbid, can be diverted to Amman when an alternative source will be available to Irbid after construction of the proposed Maqarin Dam. The Zarqa-Maeen spring water is unsuitable for potable water use because of the high degree of mineralization, and Zarqa-Maeen has been designated as an historic tourist site. The remaining three small groundwater sources were unsuitable for development due to unpredictable production following exploration and major investment in transmission which made their development uneconomic. Of the four surface sources only the King Talal Dam reservoir is available for development to meet Amman's immediate needs. Dams for the other three have yet to be designed and constructed. Only one of these sources, Upper Wala Dam, would be suitable for future use in Amman as the other two will depend upon rainfall flood for water storage. 2.04 Several wells in the Amman municipality provide water to outside areas within the purview of WSC and NRA. While the reported capacities of these wells varies, the average total yield is over 1.0 Mm3/year, which rep- resents an average of about 6% of AWSA's present annual production. The water supply for Madaba, for example, is pumped from two wells in Amman through a 300 mm main to Madaba. Passing in close proximity to the Qastal area, in which limited groundwater is available, the transmission main could be used to augment Amman's supplies (if producing wells were developed in the Qastal area) and to meet Madaba's need as well. During negotiations agreement was reached that the Government will cause WSC to develop alterna- tive sources for Madaba prior to June 30, 1980 in order to allow retention of this source for use in the Amman water supply system.  Existing Facilities - Water and Sewerage 2.05 The existing water distribution system serves over 80% of the Amman population through house connections, and the sewage collection system serves about 28% through service connections. Approximately 75% of the water supply system and 100% of the sewerage system have been constructed during the past 15 years. Urban Poor 2.06 AWSA's work program for the five years, 1977-1981, of which the proposed IDA project is a part, has given high priority to water and sewerage system construction in urban poor areas. All of the urban poor have access to public water and as a result of AWSA's program it is estimated that water service through house connections for the urban poor will increase from 34% in 1977 to 84% in 1981 and sewer connections from 18% to 74% (Tables I and II). The estimated number of urban poor to be provided with improved water service through this project will increase from about 41,000 to 56,000. Sewerage service will benefit about 36,000 users as compared with an ini- tially served urban poor population of 11,000. Approximately 20% of the target population is to be directly affected by the project; and concur- rently, approximately 20% of the project cost for water and 19% of the project cost for sewerage will have a significant impact on the urban poor. Per capita expenditures on urban poor in the project will be approximately US$175 for water supplies and US$157 for sewerage.  TABLE 1 AREAS TO BE SERVED BY AWSA'S PROGRAM ESTIMATE OF LEVEL OF SERVICE FOR THE URBAN POOR - WATER SUPPLY l/ (Population in '0OOs) IDA Project ------------- 1977 ------------- ------ 1981 --------------- Area Total Urban Popula- Urban Total Urban Popula- Urban Poor tion Poor Poor tion Poor - Served Served - Served Served Jebel Amman 47 1 40.0 0.9 58 1 55.0 0.9 Sport City 3 - 0.3 - 4 - 3.8 - Jebel Hussein 40 2 38.0 1.8 50 2 45.0 1.8 Wadi Hadada 12 7 7.0 4.0 13 7.5 7.0 4.0 Nazzal 40 10 30.0 7.0 42 11 34.0 8.0 Nadif 30 7 15.0 4.5 40 10 20.0 6.0 Ashrafiya 39 12 20.0 6.o 45 13 30.0 9.5 Qussour 15 It 12.0 3.3 18 5 15.0 4.5 Hashemi 24 5 20.0 4.0 31 6 25.0 5.0 Shar.sani 2 - - - 3 - 2.2 - Abdoun 6 - -- - 8 - 6.0 - Smissani 7 - 5.0 - 10 - 10.0 _ Marka 40 8 20.0 3.8 50 10 30.0 6.o Nuzha 24 6 20.0 5.0 29 7 24.o 5.5 Shaleh 10 4 3.0 1.0 15 6 12.0 4.0 Zuhour 3 0.5 - - 4 1 3.0 o.6 342 66.5 230.3 41.3 420 79.5 322.0 55.8 Other AWSA Projects Tadj, Mahatta, Jofeh, and Quala 112 20 58.0 14.8 176 30.0 80.0 18.3 Refugee camps (Wahdat and Hussein)2/ 165 160 33.0 28.0 189 183.0 189.0 170.0 277 180 91.0 42.8 365 213.0 269.0 188.3 TOTAL 619 246.5 321.3 84.1 785 292.5 591.0 244.1 / This table was prepared by the mission in consultation with AWSA and their consultants' staff. Because of overlapping and differences in area delineation as well as lack of accurate data on income distribution, the figures should be considered as rough estimates only. 2/ The mission assumed that the vast majority of the refugees are urban poor and that about 10% will continue to rely on neighbors' connections for water supply in 1981.  - 10 - TABLE 2 AREAS TO BE SERVED BY AWSA'S PROGRAM ESTIMATE OF LEVEL OF SERVICE FOR THE URBAN POOR - SEWERAGE 1/ (Population in '0OOs) IDA Project