Cameroon - Second Water Supply Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Report No. 2457-CM UNITED REPUBLIC OF CAMEROON STAFF APPRAISAL REPORT SECOND CAMEROON WATER SUPPLY PROJECT August 8, 1979 Regional Projects Department Western Africa Regional Office 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.  CAMEROON SECOND WATER SUPPLY PROJECT SECOND WATER SUPPLY PROJECT GOVERNMENT FISCAL YEAR ENDING JUNE 30 SNEC FISCAL YEAR ENDING JUNE 30 CURRENCY EQUIVALENTS Currency Unit = CFA Franc (CFAF) 1/ US$1 CFAF 220 CFAF 1 US$0.00455 CFAF 1,000 = US$4.46 WEIGHTS AND MEASURES 1 mm = millimeter = 0.04 inches 1 cm = centimeter = 0.39 inches 1 m = meter = 3.28 feet 1 km = kilometer = 0.62 miles 1 1 = liter = 0.26 US gallons 1 m3 = cubic meter = 264 US gallons 1 m /sec = cubic meter = 31.5 million cubic meters per year per second or 22.8 million US gallons per day lcd = liters per capita = 0.26 US gallons per capita per day per day ABBREVIATIONS AND ACRONYMS BCEOM = Bureau Central d'Etudes pour les Equipements d'Outre Mer (France) BRGM = Bureau de Recherches Geologiques et Minieres (France) CCCE = Caisse Centrale de Cooperation Economique (France) CDC = Commonwealth Development Corporation (UK) DEW = Directorate of Energy and Water, MINMEN MINEH = Ministry of Equipment and Housing MINEP = Ministry of Economy and Planning MINMEN = Ministry of Mines and Energy SCET-INT= Societe Centrale pour l'Equipement du Territoire (France) SNEC = Societe Nationale des Eaux du Cameroun 1/ The CFA franc is tied to the French franc in the ratio of 1 French franc to 50 CFAF. The French franc is currently floating.  FOR OFFICIAL USE ONLY CAMEROON SECOND WATER SUPPLY PROJECT TABLE OF CONTENTS Page No. I. THE WATER SUPPLY AND SEWERAGE SECTOR ..................... 1 Background ........................1....................... Water Supply Sector Organization ................. 2 Sanitation and Storm Drainage Organization ............... 3 Rural Water Supply ....................................... 3 Present Service Levels - Urban Water Supply .............. 3 Recent Investments ....... ................ 4 Sector Objectives Under the 1976-1981 Plan .. ............. 4 Revised Sector Objectives ................................ 6 Preparation for the 1980-1990 Water Supply and Sanitation Decade ...................................... 8 II. POPULATION, SERVICES AND DEMAND IN THE PROJECT AREA ...... 8 The Project Areas ....... ................ 8 Development Prospects in Project Areas Yaounde and Douala .................................... 9 Secondary Centers ...................................... 9 Present Service Levels ................................... 9 Population Forecast ...................................... 10 Consumption Forecasts .................................... 10 Domestic Consumption ................ .. ................... 10 Industrial Consumption ............... .. .................. 10 Administrative Consumption ..... .......................... 10 Water Consumption Forecasts ............. .. ............... 12 III. THE PROJECT .............................................. 12 Project Preparation ............- .... . . .................... 12 Objectives ....12 Project Description.. .. 14 Cost Estimates ....17 Project Financing ....17 Project Implementation ....17 Procurement ....19 Prior Contracting and Retroactive Financing ...21 Disbursements............ 21 Monitoring Criteria ....22 This report was prepared by Messrs. J. C. Rietveld (Sanitary Engineer), H. Busz (Financial Analyst) and J. W. Gilling (Economist). 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. ECONOMIC AND SOCIAL ANALYSIS ............................. 22 Project Benefits ......................................... 22 Least Cost Solution Secondary Centers ...................................... 23 Douala and Yaounde ..................................... 24 Return on Investment ..................................... 24 Secondary Centers ........................................ 25 Average Incremental Cost of Water Supply ................. 26 Tariff Structure and Level ............................... 26 Pricing Considerations ................................... 28 Regressive Industrial Tariff ............................. 29 Affordability of Water ................................... 29 Urban Poverty Impact ...................................... 30 V. IMPLEMENTING AGENCIES .................................... 31 Introduction ............................................. 31 Organization and Management .............................. 31 Personnel ................................................ 35 Operations and Maintenance ............................... 36 Billing .................................................. 36 Collections .............................................. 36 Accounting ............................................... 37 Internal Audit ........................................... 38 External Audit ........................................... 38 Financial Planning ....................................... 39 Insurance ................................................ 39 Management Improvement Program ........................... 39 VI. FINANCIAL ANALYSIS ....................................... 42 General .................................................. 42 Past and Present Financial Performance ................... 42 Tariffs .................................................. 44 Transfer of Secondary Centers ............................ 45 Debt and Investment Limitation Covenants ................. 45 Financing Plan ........................................... 45 Dividends ................................................ 48 Taxes .................................................... 48 Future Financial Performance ............................. 48 VII. SUMMARY, AGREEMENTS REACHED AND-RECOMMENDATIONS ... ....... 49  LIST OF TABLES Number Page No. 3-1 Cost Estimates by Secondary Centers 15 3-2 Project Cost Estimates 18 3-3 Estimated Schedule of Cumulative Disbursements 22 4-1 Internal Economic Rates of Return in Project Centers 25 4-2 Average Incremental Cost of Water Sold in Project Centers 27 6-1 Financing Plan 47 LIST OF CHARTS AND FIGURES 1-1 Urban Population Served by Piped Water Systems 7 2-1 Population Forecast Project Areas 11 2-2 Total Urban Consumption (Sales) 13 3-1 Implementation Schedule 20 5-1 Organization Chart, SNEC 34 ANNEXES 2-1 Population Forecast of Project Area 52 3-1 Monitoring Indicators 53 4-1 Terms of Reference for Hygiene Education Study 54 6-1 Income Statement SNEC 56 6-2 Sources and Uses of Funds, SNEC 57 6-3 Balance Sheet, SNEC 58 8 Additional Information Available in Project File 59 MAPS IBRD 14236 Second Water Supply Project IBRD 12168R1 Population, Rainfall and Transportation   I. THE WATER SUPPLY AND SEWERAGE SECTOR Background 1.01 The construction of water production and distribution facilities for Douala and Yaounde, partly financed by Bank Loan 604-CAM (US$5 million), was successfully completed in 1974. There was no immediate follow-up to this project and development of the sector in subsequent years was hampered by failure of the sector institutions to continue their growth and to gen- erate funds for expansion in Douala and Yaounde and extension of service to other centers. The Bank/WHO cooperative program carried out a sector study in 1974 to identify new projects and sector development constraints. An IDA technical assistance credit (673-CAM) of June 15, 1977, included financing, inter alia, for (i) the feasibility studies for 13 centers, and (ii) expa- triate staff to strengthen the planning capabilities for the water supply and power sectors in the Ministry of Mines and Energy's Directorate of Energy and Water. This second project provides for construction of systems in the 13 centers, expansion of the systems in Douala and Yaounde, improvement in the operations of Societe Nationale des Eaux du Cameroun (SNEC) and related studies and technical assistance. 1.02 Cameroon has a population estimated at 7.6 million (1976 census) and an aenual average growth rate of 2.3%2 The average population density of 16/km over a total area of 475,000 km (size of Spain) is deceptive, since the regions with the highest population concentration--the western plateau, the savannah areas of the northern plains, and the Yaounde-Douala axis--are separated by vast areas with low population densities. The aver- age per capita income is US$300, compared to an absolute urban poverty level estimate at US$225 per capita. In the early 1970's, growth of real GDP was slow (approximately 3% p.a.). GDP growth during the Fourth Plan (1977-81) is expected to average 6% p.a. 1.03 The rainfall pattern and height of terrain are the primary factors in determining patterns of vegetation and population. Cameroon has a hot tropical climate, which varies from a very wet season in the tropical rain forests near the coast (average rainfall of over 4,000 mm/year) with a one- month dry season, to a sub-arid climate in the sahelian plains in the north (an average rainfall of about 600 mm/year), and six to seven months dry season (see Map IBRD 12168R1). Virtually all rivers in the six southern provinces carry a heavy flow for most of the year, while rivers in the northern province where long dry seasons occur have major seasonal fluctua- tions in volume. Shallow ground water is available in limited quantities in most of the country. Deep ground water is used by some industries in Douala; the possibility of ground water use for the Douala public water supply is being investigated.  -2- Water Supplv Sector Organization 1.04 Since the creation of SNEC in 1967, the sector's basic responsibi- lities have been allocated as follows: (i) the Ministry of Economy and Planning (MINEP) provides general investment guidelines and seeks sources of external financing for the investment program; (ii) the Directorate of Energy and Water (DEW) of the Ministry of Mines and Energy (MINMEN) has general responsibility for urban water supply, in particular for overall planning, design and supervision of construction of new water supply systems, operation of small provincial systems and the "tutelle" of SNEC (see para 1.06); (iii) SNEC has been entrusted with the planning, design, construc- tion of extensions and, operation of the 20 major urban water supply systems under Concession Contracts; and (iv) the Directorate of Rural Engineering and Community Develop- ment in the Ministry of Agriculture is responsible for rural water supply. 1.05 This sector organization set-up is logical and is expected to improve as MINMEN delegates more of its responsibility for design, construc- tion supervision and operations to SNEC. The viability of the service to the urban areas depends to a great extent on the dynamism of SNEC. Failure to obtain needed tariff increases in the past, and inadequate staffing due to the elimination of expensive expatriate personnel, have weakened SNEC. As a result, SNEC has not extended its systems in keeping with urban growth and has failed to assume a leading role in the development of the water supply sector. This is in contrast to the power sector where SONEL, well staffed and -ina_.ced, has been able to successfully develop its primary and new secc iary centers power supply systems. The DEW had assumed some of the responsibilities, normally to be carried out by SNEC. However, DEW suffers also from understaffing and lack of experienced engineers and planners. One expatriate water supply engineer (full-time) and one senior engineer/economist (part-time) were selected in December 1978, however, recruitement has been delayed till more office space will become available for MINMEN (financed by IDA Credit 673-CAM), to assist the DEW. 1.06 The ambitious sector goals (see para. 1.11) make it necessary to reinforce SNEC substantially. The major Government decisions to achieve these goals include: (i) to entrust SNEC with the responsibility for the design, construction and operation of all urban water supply systems; (ii) raising the water tariffs so as to guarantee SNEC's financial viability (see para. 4.13);  (iii) reinforcing SNEC's staff with expatriate experts (see para. 5.30); and (iv) emphasizing staff training and the recruitment of qualified Cameroonians (see para. 5.34). Details about the principal executing agency, SNEC, are given in Chapter V. Sanitation and Storm Drainage Organization 1.07 The Ministry of Equipment and Housing (MINEH), through its Direc- torates of Urbanism, and Housing and Construction, is responsible for storm drainage. The responsibilities for sanitation remain ill defined, and for this reason little attention is given to collection and disposal of sewage and solid wastes. While MINMEN nominally has countrywide responsibility, MINEH has been carrying out sewerage planning and construction activities for Douala and Yaounde because they were linked to other urban infrastructure such as road and drainage canals. MINEH does not plan to retain these plan- ning activities once its first five-year plan is approved. The allocation of responsibilities for this sector will be examined under sanitation and drainage studies, for which financing is proposed under this project. Rural Water Supply 1.08 The Directorate of Rural Engineering and Rural Development (Genie Rurale) completed a national inventory of the village water supply situation in 1975 with the assistance of a WHO sanitary engineer. At that time it was estimated that 22% (about 1.1 million people) of the 4.6 million total rural population were adequately served with safe water. This inventory served as the basis for establishing the objective for the Fourth Plan to double the access to safe water for the rural population so that 50% would be served by 1981. Agencies such as UNDP, UNICEF, Swiss Technical Assistance (SATA), French Agency for Cooperation (FAC), the Danish Government, and the Bank have been active in well drilling, construction of small multi purpose dams, supply of equipment, and in the training of well drilling teams and sanitarians. The Cameroon Government has supported the Genie Rurale through budget allocations and the rural development fund which in part is supported by the Caise de Compensation which derives its funds from the marketing of agricultural products. The Bank's Rural Development Fund project, in four departments of the Northern Province, has allocated 60% or $5.1 million of the total project costs for the construction and operation of 50 small dams, rehabilitation of 600 wells, and the sinking of 400 new wells. In the ZAPI rural project in the eastern region, $248,000 is allocated for improving 82 water points, sinking of six wells, and studies for 13 small village water systems. Bank funds from the Rural Development Fund project loan also supported the continuation of a UNDP project to survey ground water resources. Present Service Levels - Urban Water Supply 1.09 While 70% of the total 2.5 million urban population lives in centers with piped water systems (34 out of 118 centers over 5000 population), only  - 4 - 10% has access via house connections and 33% via standpipes. The remaining 57% 1.4 million people) uses water from shallow wells and surface water sources. The breakdown of access to water supply service is shown in the table below: 1978 % of total population Total served by No. of Popl'n. House Unserved by Centers (000s) Connections Standpipes Public Systems 1. Douala 1 584 18 39 43 2. Yaounde 1 373 32 24 44 Secondary Centers operated by 3. -SNEC 18 543 13 67 30 4. - MINMEN/ Municipality 14 244 12 59 -- 5. No piped water system 84 756 -- -- 100 Total 118 2,500 10 33 57 in Douala and Yaounde, a large backlog exists in system extensions and the number of working standpipes has declined, e.g. in Yaounde from 94 in 1969 to 49 in 1978. Consequently the percentage of the population with access to potable water 1/ is diminishing. Presently sewerage is limited to a few middle and high class new development areas in Douala and Yaounde (an old system in Douala is completely rundown). Elsewhere sewage disposal is by septic tanks, emptied by private contractors, and pit privies. Most towns have embryonic storm drainage systems, usually in the form of unlined ditches without protection. Recent Investments i.10 The Government has started construction of water supply systems in 17 secondary centers, 8 of which are financed through a KfW loan (DM 30 million, US$15.0 million) and most of the local cost by the national budget (approximately CFAF 1 billion, US$4.5 million). These projects should have been completed during the past five-year program (1971-1976), but have been delayed due to slow administrative procedures; they are now expected to become operational in 1978-79. Construction in five centers at a cost of 2.0 billion CFAF (US$9 million) was completed in 1977, with financing by the Italian Government. Sector Objectives under the 1976-1981 Plan 1.11 The Government's current 5-year plan (1976-1981) allocates CFAF 13.5 billion (US$61.4 million) for development of water supply systems in urban 1/ Defined here as those with private connections, served by compound (yard) taps, or located within 200 meters of a public standpipes.  - 5 - centers including the investments mentioned in para. 1.09, and about CFAF 4 billion (US$18.2 million) for sewerage and drainage in Yaounde and Douala. The Government based this estimate on the assumption that approximately two-thirds of investments would be financed through external sources. The priority of projects to be included was defined following the discussion of the Bank/WHO sector study. 1.12 The Government objectives for the water supply sector under the Plan are: (i) correcting remaining deficiencies in the existing urban water supply systems and providing supply to all pre- fectorates and subprefectorates by 1981 (about 70 centers). This objective would ensure an 80% access to safe supply for the urban population; (ii) increasing the water supply facilities in rural areas to cover about 50% of the rural population; and (iii) completing studies that would lead to implementing water supply systems in smaller administrative centers during the succeeding plan and thus to reaching a 100% service level target in urban centers by 1986. 1.13 For the sanitation and drainage sector, the objectives are to: (i) prepare and update studies for major centers, with possible implementation for the largest and neediest centers of Douala/Yaounde, and to a lesser extent Victoria and Maroua; and (ii) implement first-phase and localized drainage operations in parts of downtown Yaounde and Douala where drainage problems create health hazards. 1.14 The above objectives are ambitious and less than half is likely to be achieved by 1981. Project preparation remains most important for the sector, because rational investment cannot be initiated prior to the avail- ability of urban master plans as well as water supply and sewerage/drainage master plans. Increasing unsanitary conditions in urban areas have resulted in a higher incidence of malaria. Major malaria control programs have never been made in West Africa, because of lack of infrastructure to execute these programs. However, it is highly advisable that an effort should be made by engineering (e.g. drainage), chemotheraphy and incidental insecticide spray- ing to control malaria in the urban areas. The disposal as waste of the water supplied by the project facilities would not substantially increase the breeding grounds for malaria mosquitoes, because (i) much of the safe water to be supplied under project will simply substitute for polluted water currently used by the population, and (ii) standpipes to be built under the project will be designed to provide positive drainage of spilled water. The health education component to be financed under the project (paras 4.02-4.03) should also lead to improved sanitation.  -6- Revised Sector Objectives 1.15 During preparation of the proposed project, it became apparent that the objective of providing 100% access in all urban centers by 1986 was unattainable. The appraisal mission, in cooperation with the Govern- ment, prepared a revised investment program with the objective of 100% access by 1990. The attainment of this objective would depend not only on the construction of 84 new systems and the rehabilitation of 14 exist- ing systems, but also on the acceptance of standpipes as an essential means of providing access to about half of the 1990 population. The Government correctly recognizes the inherent problems in the use of standpipes. Stand- pipes require regular maintenance and most municipalities are reluctant to pay for standpipe consumption. However, despite the planned introduction starting in FY80 of low cost yard connections which could serve 20% of the urban population by 1990, it is unlikely that SNEC could provide house and yard connections at a sufficient rate to supply all of the population. There is therefore no choice but to increase the number of standpipes if the desired service levels are to be met. 1.16 The urban population is projected to grow at an average rate of 7.5% p.a., from 2.2 million in 1976 to 5.9 million in 1990. The national urban population forecast is shown in Figure 1.1, together with the population served based on the mixture of service types as shown in para. 1.16. Details of population growth and service levels in the project areas are given in Chapter II. 1.17 The following mixture of types of service would make it possible to provide 100% access to service by 1990, taking into account financial and project implementation constraints: Regular Yard Center House Connections Connections Standpipes Yaounde 45 (32) 1/ 25 (0) 30 (32) Douala 30 (20) 25 (0) 45 (33) Existing SNEC centers 20 (12) 25 (0) 55 (72) Centers under construction (including centers to be 20 (12) 25 (0) 55 (59) financed under project) Other centers < 5,000 10 (0) 15 (0) 75 (0) 1/ 1978 level in parentheses. The total urban population having access to piped water service would increase from 985,000 at present to 5,910,000 in 1990, i.e., at an average growth rate of 13.7% p.a., or nearly double the average urban population growth rate.  CANIEFOON: SECONID W."ATER SUPPLY PROJiECT Y0CO-~~ NATIOiNAL WATER SUPPLY PROGPPAMv co!y-A URBAN P-OPULATiON SERVED SY PIPED WATER SYSTEMS 4 r-,'; ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ i- TOTAL URBAN POPULAT; ON .9 9 -,j 1 0 ~~~~~~~STANDPIPES ~ POFULATION IN CENTERS UNEVDAi WITH PIPED WATER .- 9-. jc ~~~~~~~~~~~~TOTAL POPULATION SERVED~ -ac1" 1 ~ ~ ~ HOUSE CONNECTIONS 200-! 4/** 2004 ~~~~~~~~~~~% Aninual Growth 9atI FISCAL YEAR I I I I I I I a 1965 66 67 63 69 70 71 72 73 74 76 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 m World Bank - 20120  - 8 - 1.18 It is estimated that implementation of the above program would involve the following investments: Investment Program to 1990 for Urban Water Systems Amount of Investment in Period Millions in 1978 $ Center 1978-85 1986-90 1. Yaounde 23.6 31.8 2. Douala 35.0 40.9 3. Secondary Centers - Existing SNEC 29.0 22.7 4. Secondary Centers planned/ under construction 1/ 56.4 11.0 5. Secondary Centers identified - not yet studied 1/ 17.3 62.7 Total 161.3 169.9 1/ To be operated by SNEC. Priorities for equipping centers presently unserved remain as established by the 1974 sector study and are based on a weighting scheme. This takes into account population, distance to, and quality of, the raw water source, per capita cost, etc. The proposed loan includes financing for master plan studies for the provision of least-cost water supply and sewerage/drainage services to Douala and Yaounde, as well as the feasibility studies for exist- ing secondary centers water supplies, to make it possible for SNEC and the Government to plan regular expansion of this infrastructure. Preparation for the 1980-1990 Water Supply and Sanitation Decade 1.19 The United Nations has designated the period 1981-1990 as the International Drinking Water and Sanitation Decade. All developing countries have been asked by the U.N. Water Conference in 1977 to prepare by 1980 detailed investment plans, including identification of necessary financial and manpower resources to provide all people with access to safe drinking water and, to the extent possible, with sanitation by 1990. The investment plans and financial and human resources needed would be reviewed by 1980 by a special meeting of the Economic and Social Council of the United Nations (ECOSOC) which would also submit a plan to mobilize these resources. The sector objectives and preliminary investment program prepared during appraisal of this project provide the basis for such a plan for Cameroon. The technical assistance to DEW (para. 1.05) will assist the Government to complete a more detailed document for the ECOSOC Conference. II. POPULATION, SERVICES AND DEMAND IN THE PROJECT AREAS The Project Areas 2.01 The proposed Bank project is concerned with the expansion of pro- duction and distribution facilities in the major centers of Douala and Yaounde, the rehabilitation and expansion in 11 secondary centers ranging in population  - 9 - from 2,000 to 33,000, and the construction of new systems in two centers (Mbengwi and Njinikom) with populations of about 3,000 and 9,000 respectively. See Map IBRD 14236 for locations. Development Prospects in Project Areas Yaounde and Douala 2.02 The economy of Yaounde, the capital of Cameroon, will continue to be based on Government administrative activity. Douala, being the primary port, is the industrial, commercial and transportation center of the country. One of the major handicaps for orderly urban development in Yaounde and Douala has been the lack of urban planning and organized development. The preparation of an Urban Development Project for Douala and Yaounde for FY80, is expected to lay the foundation for an improved urban development program and major improvements in the institutions managing these cities. The tech- nical assistance credit 673-CAM provides funds for technical assistance to the Ministry of Equipment and Housing (MINEH) to help prepare the urban project. The loan for the proposed water supply project includes funds for additional studies and technical assistance for the urban development program, including the water, sewerage and drainage master plan studies, which have not been provided for under the 673-CAM technical credit or in the preparation of the urban project. Secondary Centers 2.03 The secondary centers are mainly located in the North West and South West Provinces whose major centers are Buea and Victoria. Economic activity in Victoria declined rapidly with the closing of the port in 1972. Growth has recently accelerated, particularly in connection with the con- struction of a 30,000 bbl/day oil refinery to be commissioned in 1981. The remaining secondary centers included in the project are administrative centers (prefectures and sous-prefectures) which also serve as agricultural service centers providing markets, transportation and other goods and ser- vices for the hinterland. Coffee is the primary product of the area which also has some plantation agriculture (oil palm, hevea) carried out by the Cameroon Development Corporation around Tombel. Present Service Levels 2.04 Access to service by house connections in Douala and Yaounde has been limited to the middle and upper income groups, primarily because of the high cost of house connections (approximately 60,000 FCFA or $275), but also because of insufficient investment in distribution facilities. The present ratio of length of distribution network per capita is 0.5 and 0.8 m/capita in Douala and Yaounde respectively, whereas it should be at least 1 m/capita to reach most of the urban population. There is little evidence of sharing of a house connection by several families. Assuming that 10 people are served per house connection, about 20% and 33% of the population in Douala and Yaounde respectively have access to service via house connections. 2.05 Access to standpipes has declined from about 50% in 1972 to 39% in 1978, because the installation of standpipes has not kept up with the growth of population, particularly in the low income areas of Douala and Yaounde. In the Nylon area, for example, there are two standpipes per  - 10 - 50,000 people and, as a result, some residents walk up to 5 km to obtain potable water. The only other source of water for these people is shallow wells which frequently are adjacent to unlined ditches which carry sullage water and sewage. In the secondary centers with lower population density, the use of wells does not pose such a severe health hazard and surface water streams are less polluted. However, these water sources are limited during the four-month dry season. Population Forecast 2.06 The population forecasts for the project centers are shown graph- ically in Figure 2.1 and detailed in Annex 2.1. These forecasts are based on the 1976 census and average growth rate assumptions as indicated in Annex 2.1. Growth in the secondary centers is forecast to continue at the present rate of 5% p.a., while in Douala and Yaounde, the expected growth rate is 10% and 9% p.a. respectively. These rates are reasonable. The population to be served by SNEC depends on the schedule of the take-over of existing systems and the work program as shown in para. 3.08. Consumption Forecasts 2.07 Detailed forecasts for individual centers are in the Project File. Major assumptions are summarized below. Domestic Consumption 2.08 Domestic consumption forecasts are based on estimates of 10 persons per regular house connection and the assumption of 30 persons per yard con- nection with specific per capita consumption of 90 and 30 lcd respectively. Standpipe consumption is based on 15 lcd which is the estimated minimum requirement for basic water needs in the project areas. The number of house and yard connections is estimated on the basis of growth required to achieve the service objectives as discussed in para. 1.14. The number of standpipes is based on the assumption that an equal number of standpipes would be added each year to provide 15 lcd to serve 30% of the population at 600 persons per standpipe by 1986 in Douala and Yaounde declining uniformly from the present levels of 850 and 1,000 persons per standpipe respectively. Industrial Consumption 2.09 Consumers using more than 5,000 m /year are classified as indus- trial. All industrial/commercial consumers using less than 5,000 m /year are included in the regular house connection category. No specific new major industrial consumers have been identified for Douala and Yaounde; and, the growth in industrial consumption is expected to continue at its present aver- age growth rate of 10% and 8% respectively. Industrial consumers are not likely to develop much in secondary centers of less than 30,000 population. Administrative Consumption 2.10 Administrative consumption includes Government buildings, schools, hospitals and clinics. In Douala and Yaounde, administrative consumption is forecast to grow from its present adequate level at rates of 6.5% and 5.9% p.a. respectively, in line with the expansion of public services. The requirements  CA%IE ROON: SECOND WATER SUPPLY PROJECT POPULATION FOREfCASTS PROJECT AREAS 2 ) - I C, Estimate by Bank/WHO Census- Sector Mission j ou 'oi"~~~~~~~~~~~~~~~. --i p4. - _- 2 ~~ ~ ~~~20 Estimate by _r U. r) ORSTOM 195S C- cO,, 12 5C b'otl-~~~~~~~~~~~~~~~~ *0. p0 *." G 8 6 /f I 1I ,~~~~~~~~~~ I lzia I/ l tl _ I "" | I l',t!. t,!, (hJ ('TfU t,O /() /1 J2 1: 1 ' /4 J JU 10 J1 II I) 80 81 U2 813 84 lUjb l6 i 17 8U 89 90 Ul ri Fiscal Yvar World Bank - 21022  - 12 - of existing administrative services in the project's secondary centers are based on reasonable estimates of current consumption and an average growth rate of 14% p.a. is expected till 1990. Water Consumption Forecasts 2.11 Figure 2.2 shows the past and future trends of total urban water consumption and the relative importance of the project centers in the total. Details of the consumption (sales) forecast for all SNEC centers, used as the basis for the financial forecasts, are given in the project file. In 1981, water sales in the project centers would be about 69% of total SNEC sales, and by 1991 would rise to 73% of total, due to the above average growth rate in Douala and Yaounde. Total SNEC sales are forecast to grow from the present volume of 26.5 million m3/yr to 47.6 million m3/yr in 1983 at an average rate of about 16% p.a. This rapid increase is considered reasonable because the present low service levels will be substantially improved during the project period. III. THE PROJECT Project Preparation 3.01 The project stems from the recommendations of the sector study made by Bank/WHO cooperative program in 1974-75 and the dialogue which followed with the Government. The 13 secondary centers included in project were selected from the priority listing of the water supply sector study. The feasibility studies for these centers were carried out by the consultants SCET-International and financed with proceeds from the IBRD Technical Assis- tance Credit (673-CAM). The studies for the urgently needed improvements to the Douala and Yaounde systems were made by an engineer seconded to SNEC by Compagnie Generale des Eaux (CGE), a French water supply company. A Bank consultant, Mr. Wagner, made an in-depth assessment of the Douala and Yaounde water treatment facilities in July 1978. Urban poverty aspects were researched by Mr. A. Cooperstock, Bank consultant, in May 1978. The present project was appraised in October 1978 and a follow-up post appraisal mission visited Cameroon in January 1979. Objectives 3.02 The proposed project will be the first major step towards achieving the general sector program objective of providing 100% potable water service for the urban population (para. 1.14) in 1990. The specific objectives are to: (i) provide 13 secondary centers with a reliable potable water supply, to be managed by SNEC; (ii) extend the distribution systems so that potable water will be available in all urban areas of Douala and Yaounde by 1983 when 75% of the population will be served. This will mean an increase in population served by 700,000 people over the estimated 400,000 served in 1978. Particular attention will be given in serving the low income areas, which cover about 40% of both cities;  (~~ 1(1') -_ CAME ROON: SECOND WATER SIJPPLY PROJECT ,_ / g TOTAL URBAN CONSUMMT^ON (SALES) '1 HISTTORCAL AND FORECAST ~~~~~~~~~~~~~ Ii~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.0 0 , ' < ,<e,/:'-'-'''' .~~~~~~~000 Su ti cur.. r }~~~~~~~~~~~~~~~0 . A vu4 ~~~ Exliuing SNEC Secondary Ceniters 1:90b li,i C/ t 8 CD 9 70l 71 72 73 7 4 75 76 77 78 70 80 l 8D2 3 84 85 8G 87 88 D9 D0 91 F1ica! Year  - 14 - (iii) lay the groundwork for an organized sanitation and drainage sector for Douala and Yaounde by providing a technical solution as well as financial and managerial studies; (iv) in order to ensure that the public health benefits which should derive from the project are actually realized, initiate a pilot public health education project. The public health education is intended to lead to a country- wide effort to make the population aware of the health benefits of public potable water supply and proper excreta disposal and drainage and of the measures to be taken to achieve these benefits; and (v) strengthen the organization of the Cameroon water supply sector; in particular the daily management and operations of the water supply services by SNEC. Project Description 3.03 Location of the systems to be constructed under the project is shown on Map IBRD 14236. A. Water Supply Facilities (i) Water supply systems for thirteen secondary centers (see Table 3.1) having an average population of 12,000 in 1978. The works will include 9 treatment plants with capacities ranging from 30 to 250 m /h9ur, 10 treated water reservoirs ranging from 260 to 1,500 m and transmission and distri- bution pipes of about 300 km; (ii) Reinforcement and expansion of the water distribution, transmission and storage facilities for Douala. Pre- liminary design has indicated the necessity of the supply and construction of about 220 km of distribution pSpes, treated water reservoirs of about 1,000 and 3,000 m and improvements of the treatment and transmission facilities; (iii) Reinforcement and expansion of the water distribution, storage, treatment and pumping facilities for Yaounde. On the basis of preliminary design, it was concluded that Yaounde needs the supply and construction of about 50 km of distribution pipes, two treated water reservoir of about 2,000 and 3,000 m each and improvements of the treatment and pumping plant; and (iv) Construction of public standpipes and the introduction of a social house connection program.  SECOND CAMEROON WATER SUPPLY PRCJECT COST ESTIMATES BY SECONDARY CENTERS (in mid 1978 prices, exeluding taxes and import duties) Distribution Production Improvement Location Supply Laying %upply Civil LTork s of Ex. Inst. F1 L T k L T F L T F L F L T F L T F L T Abonig M'Bang 15 1 16 10 12 22 5 1 6 - - . 1 2 3 8 6 14 39 22 61 Bafaflg 119 5 124 46 57 103 104 8 112 107 92 199 2 2 4 4 2 6 382 166 548 Bali 25 1 26 14 18 32 39 4 43 40 34 74 2 2 4 2 2 4 122 61 183 Buea 139 3 142 43 52 95 147 10 157 70 59 129 2 2 4 14 19 33 415 145 560 |Jakiri 19 1 20 4 5 9- - - 30 23 53 1 2 3 2 - 2 56 31. 87 Kumbo 84 6 90 44 54 98 36 4 40 30 25 55 1 2 3 5 6 11 200 97 297 MamIfe 28 2 30 12 15 27 54 5 59 13 11 24 2 2 4 3 4 7 112 39 151 uL Mbengwi 68 5 73 24 29 53 25 2 27 17 14 31 1 2 3 - - - 135 52 187 1 Njiriikon 34 2 36 42 51 93 24 2 26 13 12 25 1 2 3 - - - 114 69 183 N,kam.bd 62 4 66 38 47 85 73 8 81 40 33 73 1 2 3 2 2 4 215 97 312 !Ton;bel 29 1 30 25 7 32- - - - - - 1 1 2 3 5 8 58 14 72' Victoria 109 2 111 35 43 78 61 3 64 84 72 156 2 2 4 6 6 12 297 128 425 wu*7.}m 156 4 60 24 29 53 68 8 76 86 73 159 2 2 4 3 3 6 239 119 358 T_TAL j787 37 824 361 419 780 636 55 691 530 448 978 19 25 44 52 55 107 2385 1039 3424 F = Foreign L = Local T = Total December 20, 1978  - 16 - B. Studies and Technical Assistance (i) Design and construction supervision of the water supply and operating facilities outlined above; (ii) Master plan studies for water production, transmission and distribution of Douala and Yaounde (para. 1.17); (iii) Sewerage and drainage urban master plan studies for Douala and Yaounde (para. 1.07); (iv) Additional urban development studies for Douala and Yaounde to provide a basis for the water supply, sewerage and drainage studies (para. 2.02); (v) Feasibility studies for future extensions to the other SNEC secondary water supply systems, including possible ground water research and standardization of equipment (para. 1.17); (vi) Provision of about 18 man-years of training and management advisors for SNEC (para. 5.30); and (vii) Consultant's services for promotion of local civil works con- tractors and manufacturers for the water supply and sanitation sectors. C. Management and Operations Improvement Program (MIP) A program of specific actions (paras. 5.27-5.34) to be undertaken by SNEC to strengthen its management and organization to ensure effi- cient operation of its facilities, improve project implementation and upgrade the level and quality of its services. D. Public Health Education (i) Consulting services (4 man-months) for the purpose of defining the elements of a national public health educa- tion program for the realization of full health benefits from the investment in water supplies; and (ii) Consulting services (12 man-months) for the detailed design of, and vehicles and equipment for a pilot public health education campaign aimed at modifying unhygienic practices related to the use of water and to encourage the use of yard connections, to be carried out in selected project centers in coordination with the physical works (paras. 4.02 to 4.03).  - 17 - Cost Estimates 3.04 The total estimated cost of the project is CFAF 11.3 billion (US$51.4 million) exclusive of taxes and duties, with a foreign exchange component of CFAF 7.9 billion (US$36.0 million), representing 70% of the total cost. The summary cost estimate is shown in Table 3.2. It is the practice not to charge SNEC with taxes and duties on investments for water supply works. It is expected that this practice will be continued. The cost estimates of the supply of equipment and civil engineering were estab- lished by consultants on the basis of preliminary design. Unit costs were obtained from similar works under construction in Cameroon and have been adjusted to price levels of March 31, 1979. The cost of the proposed studies and technical assistance was estimated on the basis of recent consultancy proposals for the water master plan studies and Bank experience with similar studies and technical assistance in Western Africa. The 600 man-months for consulting services and technical assistance are estimated at an average equivalent total cost of US$9,900 per man-month excluding contingencies. The foreign exchange component of the project cost was estimated assuming that all pipes and equipment would be imported; Cameroon being a net importer of these materials. 3.05 Physical contingencies of 15% were added as a security for unfore- seen works. To provide for price escalation during the project execution, average annual inflation rates of 10% have been assumed for civil works, equipment procurement and consultants' services through the project execution period. These inflation rates for foreign and local are about the same and are based on recent experience in Cameroon for similar contracts. This recent trend is expected to last for the project execution period of the next four years. Project Financing 3.06 A Bank loan of US$21.0 million is proposed, of which US$18.1 million will be onlent on the same conditions by the Government to SNEC; US$2.9 million will be used by the Government for the water supply, sewerage and drainage master plan studies, urban planning and public hygiene education studies. The Commonwealth Development Corporation (CDC) has in principle agreed that it will cofinance the project with joint financing arrangements, with a loan directly to SNEC. The CDC loan would be for an amount of US$15 million. Application of these loans to the project elements is shown in detail in Table 3.2. The remaining financing requirements of about $14.2 million will be met by SNEC from internal cash generation, and $1.2 by the Government. Signature of the loan agreement with CDC would be a condition of effectiveness of the proposed Bank loan. Project Implementation 3.07 The project will be carried out by SNEC, except for the sewerage and drainage, urban and public health education studies, which will be implemented by the Ministries of Mines and Energy, Equipment and Health respectively.  . 18 - FC(UND CAMEROU4 WATER SUPILY PROJECT TABLE 3.2 Project Cost Latirmates FOkE3GN LOCAL TOTAL FOREILN LOCAL TOTAL. % PARTICIPATION (US$ M) of ......._.. _CFAY million ............ -.......... US $ million ............ total IBRD CDC A. 13 CENTERS SUB-PROJECT 1. Distribution - Supply of Pipes & Eqpt. 735 130 865 3.3 0.7 4.0 8 1.8 1.1 2. Distribution - Laying 450 369 819 2.0 1.7 3.7 7 1.1 0.9 3. Production - Supply & Equipment 620 105 725 2.9 0.4 3.3 6 1.16 1.3 4. Production - Civil Works 570 457 1,027 2.6 2.1 4.7 9 1.4 1.2 5. Construction of Butldings 26 21 47 0.1 0.1 0.2 (G4O 0.0 0.1 6. improvement of Existing Installations 80 32 112 0.4 0.1 0.5 I 0.2 0.2 7. Engineering and Supervision 175 75 250 0.8 0.3 1.1 2 0.4 0.4 Sub-Total 2,656 1,189 3,845 12.1. 5.4 17.5 34 6.6 5-5 8. Physical Contingencies 400 178 578 1.8 0.8 2.6 5 1.0 0.6 9. Price Contingencies 935 359 1,294 4.2 1.7 5.9 12 2.3 1.9 SUB8.T0TAL (A) 3,991 1,726 5,717 18.1 7.9 26.0 51 9.9 8-2 *.., ..........sss........ B. DOUAIA SUB.PROJECT 1. Distribution - SuppLy of Pipes & Eqpt. '780 147 927 3.6 0.6 4.2 8 2.0 1.6 2. Distribution - Laying 360 285 645 1.6 1.4 3.0 6 0.9 0.7 3. Production - Supply of Equipment LS 33 218 0.8 0.2 1.0 2 0.4 0.4 4. Production - Civil Works 205 165 370 0.9 . 0.8 1.7 3 0.5 0.4 5. Engineering and Supervision 84 36 120 0.4 0.1 0.5 1 0.2 0.2 Sub-Total 1,614 666 2,280 7.3 3.1 10.4 20 4.0 3.3 6. Physical ContinSenctes 242 100 342 1.1 0.5 1.6 3 0.6 0.5 7. Price Contingencies 369 187 556 1.7 0.8 2.5 5 0.9 0.8 SUB-TOTAL (8) 2=225 953 3,178 10.1 4.4 14.5 28 5.5 4.6 C. YAOUNDE SUB-PROJECT 1. Distribution - Supply of Pipes & Eqpt. 130 20 150 0.6 0.1 0.7 1 0.3 0.3 2. Distribution - Laying 50 35 85 0.2 0.1 0.3 1 0.1 0.1 3. Production - Supply of Equipment 130 20 150 0.6 0.1 0.7 1 0.3 0.3 4. Production - Civil Works 55 45 100 0.3 0.2 0.5 1 0.2 0.1 S. Engineering and Supervision 20 9 29 0.1 -0.1 - 0.1 0.0 Sub-Total 385 129 514 1.7 0.5 2.2 4 1.0 0.8 6. Physical Contingencies 48 30 78 0.2 0.2 0.4 1 0.1 0.1 7. Price Contingencies 66 55 121 0.3 0.3 0.6 1 0.2 0.1 SUB-TOrIAL (C) 499 214 713 2.2 1.0 3.2 6 1.3 1.0 D. ADDITIONAL ENGINEERING, TECH211CAL ASSISTANCE AND SERVICE PROMOTION WORKS FOR SNEC 1. House Connection Program 59 26 85 0.3 n.1 0.4 1 0.2 0.1 2. Feasibility Studies for ExtensLons for Secondary Centers Systems 150 70 220 0.7 0.3 1.0 2 0.4 0.3 3. Technical Assistance 217 93 310 1.0 0.4 1.4 3 0.5 0.5 Sub-Total 426 189 615 2.0 0.8 2.8 5 1,1 0.9 4. Contingencies 136 60 196 0.6 0.1 0,9 2 0.3 0.3 SUB-TOTAL (D) 562 249 811 7.6 1.1 3.7 7 1.4 1.2 E. STUDIES AND SUPPLIES FOR COVERNMIENT