Announcement of World Bank Approves Seventy-Two Million Dollars Loan for Urban Development in the Philippines on March 27, 1980

. "' 0 FO.g IMMEDIAT~ RELEASE - ) . World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK.NEWS RELEASE NO. 80/69 March 27, 1980 WORLD BANK APPROVES $72 MILLION LOAN FOR URBAN DEVELOPMENT IN THE PHILIPPINES The World Bank today announced the approval of a $72 mill ion loan to the Republic of the Philippines for an urban development project. The $120 mill ion project is designed to provide land tenure and basic services and raise the productivity of low income groups in the Metro Manila Area. It will also assist the government in providing affordable solutions to the problems of shelter, environmental sanitation and employment generation. In the Philippines, the urban population in 1975 was estimated at 14.3 million, or 33% of the country's total population of ~2.2 mill ion. In Manila itself the population has grown from 1 .6 mill ion in 1948 to over 6 mil- l ion today - almost 40% of this resulting from in-migration. At the current • rate of expansion of 4% per year, by the end of the century 16 mill ion people, or 44% of the Philippine urban population could be living in Manila. Faced with such growth, the municipal authorities have been hard- pressed to keep pace with expanding demands for basic infrastructure. However, a number of important new institutions have been established recently and are beginning to have a significant effect on the development of national urbaniza- tion policies. Among these are the National Housing Authority, the Ministry of Human Settlements and the Metro Manila Commission. The Bank-assisted project will help to stren~Lhen the capability of these and other governmental agencies to develop their organizational structure, administrative and financial systems and to improve investment programming and metropolitan management in the Metro Manila Area. The infrastructural services (water supply, sanitation, roads and footpaths and drainage) which will be provided by the Bank-supported project will bring direct benefits to about 500,000 people in certain priority areas of Metro Manila Area, including the provision of about 6,000 new jobs. The World Bank loan is for a term of 20 years, including 5 years of grace, with interest at 8.25% per annum. • NOTE: Money figures are expressed in U.S. dolia1· equivalents .  FOAM NO. 1121 (5-76) T E C H N I C A L D A T A PROJECT: COUNTRY: Third Urban Development Republic of the Philippines $120 mill ion • TOTAL COST: BANK FINANCING: $72 million, for a term of 20 years, including 5 years of grace, with interest at 8.25% per annum OTHER FI NANCI NG: Government of the Philippines, $48.0 mill ion IMPLEMENTING ORGANIZATIONS: (1) National Housing Authority E11 i pt i ca 1 Road Quezon City Philippines (2) Metro Manila Commission Department of Local Government Compound Quezon City Phi 1 i pp i nes (3) Ministry of Public Works NI A Bui 1ding Quezon City Phi 1 i pp i nes Telex 92076 DPWT~ (4) Technology Resource Center Ministry of Human Settlements TRC Building, Buendia Ext, Maka ti , Man i 1a Phi 1 i pp i nes Telex TRC 63325 PROJECT DESCRIPTION: The project will contain the following six components: (a) Zonal Improvement Program (ZIP): which will provide basic services including tenure, water supply, sanitation, roads and footpaths, community facilities and building material loans to about 160,000 people on 13 sites over a three-year period; (b) Metro-Manila Infrastructure, Utilities and En ineerin Program (MMINUTE): which will inance a three year investment program to upgra e basic services including drainage, sanitation, water supply and street improvements to low- income communities in 15 priority areas; (c) Sites and Services: which will provide about 6,140 serviced plots on 79 hectares at the city fringe. Each plot will be provided with individual water supply and sewerage connections. The development will also include home improvement loans, community facilities and serviced sites for small businesses and commerce; (d) Livelihood: under which a comprehensive effort will be made to improve the incomes, productivity and employment opportunities for the urban poor living in or close to ZIP and MMINUTE areas. Assistance will be extended to help develop small businesses and productive cooperatives and associations with marketing and management; credit for equipment, working capital, land and services; and manpower training; (e) Solid Wrste Management: which will provide equipment for a program of drain cleaning and door-to-door collection of household • refuse from congested low-income areas. It would also support the waste recycling program of the MMC, improve waste collection from markets and provide assistance in management and organization; and (f) Technical Assistance: designed to strengthen the capability of national agencies and local governments. . .. I ,J,:.,_,. • -2- PROCUREMENT: Civil works contracts of more than $1.5 mill ion each, estimated at a total of $9.0 mill ion, wiil be awarded on the basis of inte•~~~=~~~1 competitive bidding in accordance with the Bank's guidelines. Because of the need to undertake the work in small areas on a block-by-block basis with participation of the residents of the project communities, civil works contracts of less than $1 .5 mill ion each, for a total of about $30.6 million, will not be suitable for international competitive bidding. These will be awarded on the basis of competitive bidding, advertised locally, in accordance with the borrower's procedures which are satisfactory to the Ba~k. Equipment and vehicles having a contract value of more than $10 1 000 under the MMINUTE and sol id wastes management components, estimated at about $6.5 million will be awarded on the basis of international competitive bidding. For the purpose of bid comparison, local manufacturers will receive a preference of 15% of the c. i .f. price, or the level of custom duties, whichever is lower. Items of less than $10,000 will be tendered on the basis of competitive bidding advertised locally in accordance with procedures satisfactory to the Bank. CONSULTANTS: The loan will finance about 551 man-months of foreign and ~29 man-months of local technical assistance: (a) to Metro Manila Commission and local governments to develop their organizational structure, ad- ministrative and financial sy~tems and to improve coordination in investment planning; (b) to the National Economic and Development Authority, Ministry of Human Settlements and Ministry of Public Works to (i) improve investment programming and metropolitan • management in the Metro Manila Area, execute feasibility studies for infrastructure in selected regional cities, and initiate a national strategy for programming investments in sanitation, and (ii) analyze the capabilities of the construction industry; and (c) to the Ministry of Public Highways to continue implementation of the Manila traffic management program. In carrying out the technical assistance component, the government will employ consultants whose qualifications, experience and terms and conditions of employment are satisfactory to the Bank. ECONOMIC RATE OF RETURN: 26% ESTIMATED COMPLETION DATE: 1984 - 0 - •