Mali - Rural Water Supply Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 4402-MLI STAFF APPRAISAL REPORT MALI RURAL WATER SUPPLY PROJECT November 18, 1983 Western Africa Projects Department Water Supply Division 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.  MALI RURAL WATER SUPPLY PROJECT STAFF APPRAISAL REPORT CURRENCY EQUIVALENTS Currency Unit = Malian Franc (MF) 1/ US$1.00 = MF 746 MF 1 US$0.00134 MF 1,000 = US$1.34 WEIGHTS AND MEASURES 1 meter (m) 3 3.28 feet 1 kilometer (km) = 0.62 miles 1 liter (1) = 0.26 US gallons 1 cubic meter (m3) 3 3264 US gallons 1 cubic meter/second - 31.5 million cubic meters per year or 22.8 million US gallons per day 1 liter per capita per day (lcd) 0.26 US gallons per capita per day ABBREVIATIONS AND ACRONYMS AfDB African Development Bank BRGM Bureau de Recherches Geologiques et Minieres CCCE Caisse Centrale de la Cooperation Economique DNAFLA Direction Nationale de l'Alphabetisation Fonctionnelle et de la Linguistique Appliqu6e DNHE Direction Nationale de l'Hydraulique et de lEnergie FAC Fond d'Aide et de Cooperation FED Fond Europeen de Developpement ICB International Competitive Bidding JICA Japan International Cooperation Agency KfW Kreditanstalt fUr Wiederaufbau (Federal Republic of Germany) ODIPAC Office de Developpement Integr'e des Productions Arachidiares et Cerealieres O&M Operation and Maintenance OP Operation Puits PPF Project Preparation Facility RWS Rural Water Supply SADF Saudi Arabian Development Fund UNDP United Nations Development Program UNICEF United Nations Children's Fund FISCAL YEAR January 1 - December 31 1/ The Malian Franc is tied to the French Franc in the ratio of 1 French Franc to MF 100. The French Franc is currently floating.  FOR OFFICIAL USE ONLY MALI RURAL WATER SUPPLY PROJECT STAFF APPRAISAL REPORT TABLE OF CONTENTS Page No. I. THE RURAL WATER SUPPLY SUB-SECTOR ........................ 1 1.03 The Current Sub-sector Situation ................... 1 1.05 Sub-sector Organization ............................ 2 1.11 RWS Sub-sector Issues .............................. 3 1.12 Sub-sector Policies ................................ 3 1.13 Bank Group Lending ................................. 4 II. THE BORROWER AND EXECUTING AGENCY ........................ 4 2.02 DNHE - Staffing and Organization ................... 4 III. THE PROJECT AREA .. 5 3.01 Origin of Selection of the District of Kita as the Main Project Area ................................ 5 3.02 Population, Village Organization, Infrastructure ... 6 3.06 Climate, Hydrology, Hydrogeology ................... 7 5.09 Existing Water Supply, Health and Sanitation Conditions ....................................... 7 5.13 Existing Water Resource Balance .................... 8 IV. THE PROJECT ............ 8 4.01 Project Genesis and Objectives. 9 4.02 Project Components. 9 4.03 Investment Criteria .10 4.04 Technology Used .11 4.09 Project Management .12 4.11 Villagers' Contribution to and Participation in the Project. 13 4.14 Maintenance of the Water Points - Role of DNHE .14 4.15 Handpumps Replacement .14 4.16 Village Level Promotional Activities. .15 4.19 Project Cost .15 4.24 Project Financing .17 This report is based on the findings of a mission consisting of Messrs. Shigeo Katsu (Economist), Alain Locussol (Sanitary Engineer) and Hartwin Nickel (Financial Analyst), who visited Mali in October 1982. The successive drafts of the report were processed by Ms. Mercedes Pendleton and Ms. Elisa Yan. | 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.  - iii - TABLE OF CONTENTS fContinued, Page No. 4.25 mlementation ............................... 17 4.27 Procurement .................................... 18 4.28 Disbursement .................................... 19 V. AFFORDABIT- Y.. . ..... .... .... ... ..... .. *.* .. 21 5.01 Objectives ............................... 21 5.02 Recurrent Cost Implications .21 5.04 Cost Recovery Approach .23 VI. PROJECT BENEFITS AND RISKS .23 6.01 Benefits .23 6.04 Risks .24 VII. AGREEMENTS TO BE REACHED AND RECOiMENDATIOND. . 25 7.02 Recommendation .27 ANNEXES 2 Ministry of Industry and Equipment - Organizational Chart of DNHE. 28 3 Water Balance by Sub-District .29 4-1 Proforma Contract Form .30 4-2 Village Level Promotional Activities - Conceptual Action Plan .31 4-3 Detailed Project Costs .32-34 Detailed Project Cost per Productive Borehole .35-36 4-4 Implementation Schedule .37 4-5 Schedule of Payment of the Governmental Contribution to the Project Account .38 4-6 Disbursement Schedule .39-40 5 Willingness to Pay Estimates .41 6 Indicative Average Incremental Cost (AIC) Calculations .42-43 MAP IBRD 17119 MALI  - iv - MALI RURAL WATER SUPPLY PROJECT SELECTED DOCUMENTS AND DATA AVAILABLE IN THE PROJECT FILE A. Reports and Studies Related to the Sector Code A.1 L'Hydraulique Villageoise dans les Pays Membres du CILLS - Situation au Mali: Enquete et Propo- sitions en vue d'une Gestion Rationnelle de l'Eau. Prepared by BURGEAP, December 1982. 127 662 (F) A.2 Analyse des Conditions d'Approvisionnement en Eau des Populations Rurales en Haute Volta, au Mali et au Niger - La Situation au Mali. prepared by IDA/WHO-CP, March 1979. 124 032 (A4) A.3 Premier Atelier National: D6cennie Internationale de l'Eau Potable et de l'Assainissement. Prepared by Government of Mali/WHO/GTZ, November 1982. 129 982 (A3) A.4 Evaluation du Projet Approvisionnement en Eau Potable au Mali Sud (HELVETAS). Rapport de la Mission d'Evaluation Socio-Economique. Mission of 18 March - 9 April 1982). Prepared by Helvetas, May 1982. 129 982 (A4) A.5 Entretien des Moyens d'Exhaure - Situation au 30 Juin 1982. Propositions pour les annees a venir - Rapport Technique No. 7. Prepared by Projet de Forages Hydrauliques, Zone Mali-Sud, Helvetas/DNHE, (Bougouni/Mali), July 1982. 129 982 (A5) A.6 Rapport de Synthese (pump maintenance) Campagne 1981-82. Prepared by Projet Eaux Souterraines MLI 76/004, UNDP, Bamako/DNHE, July 1982. 129 982 (A6) A.7 Rapport d'Evaluation Sociologique du Projet MLI-76/004, Exploitation des Eaux Souterraines en Milieu Rural (24 Janvier - 15 Avril 1980). Prepared by UNDP - Bamako. 129 982 (A7) A.8 Le Projet d'Hydraulique Villageoise, Mali Aqua Viva. Prepared by CCCE, April 1981. 129 982 (A8) A.9 Mission d'Etude de la Participation Villageoise aux Charges Recurrentes des Programmes d'Hydrau- lique Villageoise en Haute Volta. Prepared by SATEC (Consultants) for the Ministry of Rural Develop- ment, Rural Development Fund, December 1981. 127 547 (D)  - v DOCUMENTS IN THE PROJECT FILE (continued;; Code A.10 Projet ODEM, Campagne 1981/82 Analyse Technique et Financiere des Travaux de Forages. Prepared by DNHE, September 1982. 129 983 (C) A.11 Rapport Technique Execution des Forages au Seno-Mango, Projet ODEM - Campagne 1981/82. Prepared by DNHE, August 1982. 129 983 (A+B) A.12 Hydrological Reconnaissance of the Yelimane- Tambacara Area with Reference to the Village Wells Project. Prepared by WASH for USAID-Mali 129 982 (A12a) Field Report No. 32, February 1982. 129 982 (A12b) Reports and Studies Related to the Project B.1 Rapport Final sur le Projet d'Alimentation en Eau Potable des Populations Rurales - Cercle de Kita. Prepared by Cellule de Preparation (CP)/DNHE with assistance by BRGM (Consultants), June 1982. 129 982 (B1) B.2 Rapport Financier. Prepared by CP/DNHE, June 1982. 129 982 (B2) B.3 Organisation des Travaux. Prepared by CP/DNHE, April 1982. 129 982 (B3) B.4 Annexe au Rapport Final. Prepared by CP/DNHE, September 1982. 129 982 (B4) B.5 Rapport Socio-Economique. Prepared by SNED (Malian Consultants), February 1982. 129 982 (B5) B.6 Approches Sociologiques et Methodologie d'Inter- vention pour une Meilleure Participation des Populations. Prepared by B. Diakite (Sociologist), September 1982. 129 982 (B6) B.7 DNHE Budget FY 1981. 129 982 (B7) C. Staff Working Papers C.1 Detailed Cost Estimates (Staff working paper), February 1983. 129 982 (C1) C.2 Community Promotion for Health Improvement and Water Development (Staff working paper), January 1983. 129 982 (C2)  - vi - MALI RURAL WATER SUPPLY PROJECT CREDITS AND PROJECT SUMMARY Borrower: Government of Mali Beneficiary: Direction Nationale de l'Hydraulique et de l'Energie (DNHE), State Ministry of Industry and Equipment Amount: SDR 4.4 million (US$4.6 million equivalent) from IDA SDR 6.0 million (US$6.3 million equivalent) from the IDA Special Fund Terms: Standard Project The proposed project would assist the Government to Description: improve living and sanitary conditions in the project area in Western Mali. About 230 villages would be beneficiaries of boreholes equipped with handpumps. The project would stress villagers' direct participation from siting of boreholes through construction of waterpoints to operation and maintenance. Assumption by villagers of responsibilities for maintenance would be a key ingredient to the success of the project. The project would strengthen Government's capability to identify, prepare and manage this type of project. The project includes: (a) provision of about 340 productive boreholes in Western Mali, (b) supply and installation of handpumps and necessary spare parts, (c) technical assistance, consultancy services and a training program, and (d) studies to prepare for a follow-up project. Benefits and Risks: The main benefits of the project would be the increased availability of safe drinking water to the population to satisfy their basic water needs all year round including the dry season. The main risks pertain to the sustained maintenance of boreholes and handpumps. To minimize these risks the project would emphasize village promotion and training activities.  - vii - Estimated Costs: (Excluding Import Duties) ------US$ million------ Local Foreign Total (a) Drilling of boreholes and site preparation 0.6 3.8 4.4 (b) Supply and installation of hand- pumps 0.1 0.5 0.6 (c) Technical assistance, studies, project management 0.5 2.3 2.8 b/ (d) Additional water points and/or equip- ment and/or consultant services --- 0.6 0.6 Base Cost 1.2 a/ 7.2 8.4 b/ Physical Contingencies 0.2 0.8 1.0 Price Contengencies 0.6 1.9 2.5 Total Project Cost 1.9 a/ 10.0 11.9 Financing Plan ------------US$ million------------ Local Foreign Total % IDA 0.4 4.2 4.6 39 IDA Special Fund 0.5 5.8 6.3 53 Government of Mali 0.9 -- 0.9 7 Beneficiaries 0.1 -- 0.1 1 Total Financing 1.9 10.0 11.9 100 Economic Rate of Return: Not quantified. The main benefits of the project would be the increased availability of safe drinking water to the population to satisfy their basic water needs all year round including the dry season. The project would initiate important community development activities. President's Report: dated November 18, 1983. Map: IBRD No. 171197.  - Viii - Estimated Disbursements ----------------------US$ million-------------------- FY84 FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 Annual IDA 1.1 .04 0.6 0.7 0.5 0.5 0.4 0.2 0.2 IDA Special Fund 0.1 .07 1.2 1.0 1.0 0.8 0.6 0.5 0.4 Cumulative IDA 1.1 1.5 2.1 2.8 3.3 3.8 4.2 4.4 4.6 IDA Special Fund 0.1 0.8 2.0 3.0 4.0 4.8 5.4 5.9 6.3 Total 1.2 2.3 4.1 5.8 7.3 8.6 9.6 10.3 10.9   I. THE RURAL WATER SUPPLY SUB-SECTOR 1.01 General country background information and relevant Urban Water Sup- ply Sector information are contained in the President's RepDrt No. P-2954-MLI dated June 16, 1982, and in the Staff Appraisal Report No. 3227-MLI dated June 10, 1982 (Power/Water Project), and are limited to a strict minimum here. 1.02 Mali's 7.2 million people are among the world's least privileged, surviving on an annual per capita income of US$190. Eighty-seven percent of the population lives in rural areas and derives an even lower annual per capita income of US$100 from subsistence agriculture and nomadic livestock enterprises. Administratively, the country is divided into seven regions. The regions are divided into 46 administrative districts (called "cercles"), which are in turn subdivided into 281 subdistricts (called "arrondissements") each made up of 25-40 villages and hamlets. The districts, administered by commanding officers, are the nuclei of major rural Government services. The subdistrict is the basic administrative unit, and its center usually has a school and dispensary. Villages are headed by chiefs and elected village councils. The larger villages often maintain a rural maternity. Only 15% of the population is literate; many rural villages do not even have one literate person notwithstanding the Government's attempts to promote functional liter- acy. The crude death rate is high at 21 per 1,000, largely attributable to mortality in the 1-4 age group. Social pressures to replace lost children result in high fertility, a high crude birth rate of 50 per 1,000 and a conse- quent rate of population growth of 2.7% per year. Average life expectancy at birth is 43 years; in Western Mali it is 33 years--about the lowest in the world. The Current Sub-sector Situation 1.03 The principal source of water supply in the rural areas in Mali is groundwater which is generally found in small and discontinuous aquifers, and is generally of good quality and in sufficient quantity to satisfy the needs of individual villages. Annual rainfall ranges from 250 mm to 1,300 mm, and is quite unevenly distributed. In the Sahelian zone, it is common to have a dry season of close to 9 months, during which period the traditional dug wells tend to dry up, forcing the villagers to rely on the few remaining contami- nated surface sources (ponds, and small rivers), which often involve distances of several kilometers. 1.04 Overall, the rural population is highly dispersed, with more than 80 percent of the approximately 10,000 villages counting less than 600 residents. About 25% of the villages, or only about 18% of the entire rural population, have access to safe water from modern water points, while more than 7,000 villages still have to rely on contaminated water from the above mentioned traditional sources. Water consumption estimates are difficult to establish; it is likely that per capita consumption in the rural areas of Mali is at the same level as in the general Sahelian context, that is, between 15-30 liters per capita per day (lcd).  -2- Sub-sector Organization 1 .0 The main sub-sectoral institution is the Direction Nationale de l'Hvdraulique et de l'Energie (DNHE' under the State Minister in charge of 7ndustrv and Equipment, which is responsible for establishing sector policies, investment programs, preparation and execution as well as supervision of rural water supply (RWS> projects. A more detailed discussion on DNHE is contained in Chapter III. 1.06 A second department within the Ministry is the Direction Nationale de l'Operation Puits, (OP). In the early to mid-70s, at a time when borehole drilling programs were not so common, this entity was responsible for identi- fication, preparation and execution of large diameter dug well projects. The results were rather disappointing, with OP constructing only 120 wells in four years. OP's activities came to a standstill, as external donor funds were progressively directed away from that department, and also as the Government perceived the need to reorganize it. Under a new management, the department has restarted in 1981 as the Government executing agency for open well con- struction. This department which is not at all involved in sector policy aspects, is now active in about 17 scattered geographical areas, with a staffing of around 350. OP's new programs are financed by the African Development Bank (AfDB), and by several donors under RWS components of rural development projects. 1.07 From the mid 1970s, when borehole programs started following the drought, investment programs in the order of US$5.5 million per annum have been executed, resulting in approximately 1,600 productive boreholes by mid- 1982. The RWS sub-sector has been developed almost exclusively with external assistance both as RWS projects and as part of rural development projects. The major programs have been financed by UNDP/UNICEF, HELVETAS (Switzerland), OCCE (France), SADF (Saudi-Arabia), JICA (Japan) and various non-governmental agencies. Each donor agency, in principle, was assigned a different geograph- ical area, and individual executing mechanisms under the supervision of DNHE were set-up. 1.08 A hiatus exists in the relations between DNHE and OP in as much as both are Directorates on the same governmental hierarchy level; thus, DNHE has no control or influence on the activities of OP, whereas DNHE is meant to be the responsible sector organization. 1.09 In terms of available well drilling equipment, there are presently about a dozen rigs in Mali, which are all utilized under the different pro- grams. These represent collectively a potential of approximately 1,100 bore- holes per annum or more likely around 700 actual drillings because of less than optimum use of rigs. This would translate into about 420 new productive boreholes, assuming a 60% success rate for the country as a whole. Adding the number of new open wells (100 per annum), about 500 new water points could be constructed each year. At this pace, a full coverage of the RWS needs could only be achieved in about twenty years.  - 3 - 1.10 New programs under preparation would increase the drilling activities to about 1,000 boreholes per annum. Investments in the order of an estimated US$150 million (in 1982 prices) over the next 7-8 years would be required to accelerate the drilling programs to achieve the International Drinking Water Supply and Sanitation Decade goals of supplying water to the entire rural population. It would appear more realistic to expect meeting these goals with a delay of at least 5 years. RWS Sub-sector Issues 1.11 Throughout its recent development, the principal issues the sub- sector faced can be summarized as follows: (i) lack of rational medium and long-term planning in order to establish a coherent overall sector development stragegy; (ii) lack of organizational discipline and coordination between DNHE and OP; (iii) inadequacy of budget provisions for planning, construction and supervision, and poor provisions for maintenance; (iv) shortage of qualified national technical personnel; (v) insufficient experience in designing RWS projects demonstrated by (1) an absence of promotional campaigns to encourage active village participation including contribution to construction, decisions as to technical and financial aspects of investments and maintenance, and (2) absence of cross-sectoral linkages with health and general development services. Sub-sector Policies 1.12 The lessons from past and ongoing projects have not gone unnoticed. DNHE, in view of its increasing activities in the RWS sub-sector, has started to cope with the above issues and adopted the following new policy orientation: (i) Regionalization of programs by limiting the zone of action for each drilling unit in order to reduce the cost per well. This policy has succeeded and resulted in almost doubling the output of the UNDP/UNICEF projects; (ii) Financial participation by villagers for both purchase and maintenance of handpumps to promote the ownership concept, thus encouraging the population to actively assume maintenance responsibilities of their own investments. This policy responds to the financial issue (para. 1.11 (iii) and (v)). Very positive results are being gained under the ongoing 3 major RWS projects 1/; I/ UNDP, Mali Aqua Viva, Helvetas.  -4- (iii) Increased importance of training at the village level to achieve self-sufficiency in maintenance by the villages in the RWS sub-sector; (iv) Decentralization of DNHE's RWS project management and improved coordination of programs to ensure flexibility of execution and enhance coherent and standardized approaches to sector and project issues; (v) Closer linkage of water and health aspects in the design and implementation of RWS projects to maximize the synergistic effects. These policies deserve full support by IDA, more so as they reflect the state of the art of the RWS situation in the Sahelian countries. Bank Group Lending 1.13 The RWS sub-sector reflects the situation of "relatively plentiful external assistance". There is no shortage of external aid in the development of rural groundwater sources per se. Rather IDA's lending strategy in the rural sub-sector will focus on channeling all assistance and efforts according to a national strategy and institution building through identification and promotion of the appropriate organizational framework improvements in project planning, execution and subsequent operations and support of sub-sector poli- cies, in particular with respect to technical design and beneficiaries' par- ticipation. 1.14 The Project has reflected this approach from the preparatory stage onwards, as this represents the first RWS project in Mali to be prepared in such detail by DNHE. IDA's first free standing RWS project for Mali would provide an excellent opportunity to further the mutual understanding between the Bank and the Borrower, particularly in view of future sector develop- ment. The Project could act as a catalyst to coordinate with other donors and channel all external and national resources towards a common goal within the national strategy, and thus obtain optimum results and benefits. II. THE BORROWER AND EXECUTING AGENCY 2.01 The borrower will be the Government of Mali, and DNHE under the State-Minister in charge of Industry and Equipment will be the executing agency for the proposed Project. DNHE - Staffing and Organization 2.02 DNHE is the Government department responsible for both urban and rural water supply and sanitation. The Organization Chart is shown in Annex 2. Within DNHE, the Groundwater Division is responsible for planning and execution of all RWS projects. By the end of 1981, DNHE's personnel  - 5 - numbered 145, but had increased to around 240 by the end of 1982. The major increase was in the technicians and daily labour categories, as DNHE, as is the case with other Government Departments, is held to accept annually its quota of fresh graduates from schools in the absence of other employment opportunities. 2.03 As of end 1981, about 40 persons were assigned to the Groundwater Division of which 18 were engineers, supported by 2 Technical Assistance staff, financed by France and Germany respectively. This division was origi- nally set-up in 1974/75 as the counterpart agency under a UNDP-RWS project, and thus, the various sections of the Division were geared mainly towards the needs of that project. As a number of new RWS programs financed by various external donors sprung to life, the quite natural response was to add per- sonnel within the existing organizational framework. 2.04 Under the UNDP project, DNHE has been the implementing agency, con- structing the wells by force account. With other bilaterally financed pro- grams, the work is mostly carried out by special expatriate project teams having their own equipment with some participation from DNHE. The array of donors supplying different equipment has not been conducive to standardization of equipment in Mali. Furthermore, given the scarcity of qualified local personnel, DNHE has effectively spread itself out too thinly over the entire sub-sector with the result that it has been employing more personnel with less and less work experience, and with only marginal productivity in the absence of a coordinated training program. The Groundwater Division has now plunged into a situation where it is neither fully prepared to plan and prepare RWS projects nor has the efficient tools to implement them. 2.05 DNHE itself is highly aware of the manifold sub-sectoral issues with long term implications including institutional, technical, legal, financial and manpower aspects. It has been agreed to carry out an institutional/sector development planning study in parallel to the further processing and implemen- tation of the Project, with the start-up to be financed under the PPF. This study will delineate the most appropriate institutional framework and develop- ment strategy for the sub-sector; it will draw upon the conclusions and recommendations of a recently prepared sector study financed by FAC and FED. 2.06 In line with Government's decision to actively promote an existing situation, i.e. the successfully implemented concept of decentralized manage- ment of individual RWS programs, the Project will be managed by a DNHE Field Team reinforced by technical assistance. The professional development of the DNHE Field Team will be carefully monitored, and assessed against the proba- bilities of future investment activities in the same general region (First Administrative Region) and thus the groundwork laid for further developing the DNHE outpost into a more full fledged regional office. For more details on project management, see paras. 4.09 and 4.10.  III. THE PROJECT AREA Origin of Selection of the District of Kita as the Main Project Area 3.01 The selection of the proposed Project area was determined on the basis of an identification mission in early 1980 to respond to a request by 4 the Government of Mali for IDA participation in both the RWS and Rural Health sectors. Selection of the district of Kita as the main zone was based on logistical considerations, such as accessibility of the terrain during the dry season, expected successful drilling rates, and related cost considerations. The Association's involvement in the districts of Bafoulabe and Kenileba, apart from those for the construction of water points for Health Centers to support the IDA Health Project, would be subject of a second project. No water supply construction activities for the district's capital, "Kita-town", are scheduled under the Project as a German aid-agency is already financing new facilities there. Population, Village Organization, Infrastructure 3.02 In 1982, the total population of the District of Kita was estimated at 166,500 inhabitants; 149,000 being classified as rural and 17,500 located in the city of Kita being classified as urban. According to the result of the 1976 census, the birth rate was 40 per 1,000 persons and the death-rate 16-17 per 1,000; more than 60% of the deaths occurred among children of less than 4 years of age. Migration to Bamako, other African countries or Europe has been almost similar to the rate of natural increase (2.36%) with a result of a stable, indeed slightly decreasing total population. 3.03 The District of Kita is part of the Region of Kayes, the First Admin- istrative Region of Mali. The district is divided in eight sub-districts ("arrondissement"), each sub-district including 30 to 60 villages. Small hamlets are bound to the villages; during the dry season, i.e. when no agri- cultural activities are possible, the population of the hamlets usually re- groups itself in the main villages. Total number of villages and hamlets are 303 and 800 respectively, while their median populations are 400 and 45. Although income related assumptions are difficult to establish, it is esti- mated that the average annual per capita income in the Project area is in the order of US$50 - 75, and that virtually the entire population would fall under the poverty level. 3.04 Each village has a "village council" headed by a "village chief"; it usually consists of leading citizens and in some cases of people named by the political authorities. The extent of the village chief's authority varies with the socio-economic and political profile of the village concerned; how- ever, the chief is usually the representative of the community vis-a-vis the Government, and thus, among many other things, he is also in charge of tax collection. Young men may join in traditional fellowships ("tons") which may manage the mutual aid cash-boxes. When these cash-boxes exist, they chiefly are fed either by monthly or yearly contributions, or by the benefit of com- munal agricultural activities. Some villages have organized their own co- operatives which resell indispensable articles (salt, sugar, etc.) at a small profit also going to the community cash-box.  - 7 - 3.05 The road network in the district of Kita is very rudimentary and completely unpaved; even the main roads cannot be used during the rainy season because of the absence of bridges. The Dakar-Bamako railway system which crosses the project area has been neglected; there is no possibility of unloading heavy materials in Kita. Public telegraph and telephone facilities hardly exist, making the use of a radio necessary. Climate, Hydrology, Hydrogeology 3.06 The Project area is located in the Sudanese climate area, except for the northern part which is already situated in the Sahelian climate zone. Average rainfalls range from 1,300mm in the South to 750mm in the North, but inter-annual rainfall variations could be very important. The rainy season occurs between May and October with a peak in August. Analysis of available data for the last 100 years demonstrates that periodic droughts usually do not exceed 7 years, although the present one began in the early seventies. Average temperatures are 33 0C at the end of the dry season and 25 C during the rainy season. The wind speed is generally lower than 2 meter/sec. which does not permit operation of windmills. 3.07 The hydrographic system, part of the Senegal river catchment area, includes three perennial rivers, the Bafing, Bakoye and Baoule. Except during the rainy season, most of the secondary hydrographic network is dry and scarcely allows for satisfaction of basic water needs. 3.08 The geology of the Project area is only partially known, although some general studies were carried out in 1977 by BRGM 1/ under FAC financing and described in the documents available in the project files. Schists and sandstones constitute the major part of the geological beds. Small and dis- continuous aquifers may be found in: (i) alluvial plains of the main rivers which have a limited importance only, (ii) the altered and fractured granite substratum which usually does not outcrop in the Project area, (iii) the fractured and pervious sandstones, which represent the main possibility of underground resources in the Project area, (iv) the schists, only if they are fractured. Existing Water Supply, Health and Sanitation Conditions 3.09 Presently, the villagers obtain their water chiefly from tradi- tional open dug wells and dibholes. Surface water is also used during the rainy season. Half of the wells have a total depth less than lOm and so tap the superficial aquifers only; due to the lack of appropriate technology for 1/ BRGM = Bureau de Recherches Geologiques et Minieres (France).  - 8 - well digging, 40% of them have a water depth less than 0.50m. It has been estimated that during the rainy season about one productive water point is available for 30 inhabitants and their livestock, i.e. 13 water points per village. These figures decrease to one water point for 50 inhabitants, i.e. 7 water points per village during the dry season. It is not unusual for larger villages to have more than 50 wells. 3.10 Usually, women are in charge of water collection by traditional means (buckets and ropes). Water carried from the wells is stored at each compound in metallic or traditional tanks (canaris) and generally changed every day. Pollution occurs during the extraction, carriage and storage cycle, and surveys have demonstrated that the population does not as yet understand the causal relation between consumption of polluted water and water borne diseases. A detailed survey carried out within the framework of the Bank's parallel Health Project in the districts of Kita, Bafoulabe and Kenieba indicates that about 110 sick days per year and per inhabitant may be attri- buted to direct water borne diseases. 3.11 During the rainy season, i.e. when sufficient water is available, the average domestic water consumption is estimated at 37 lcd, while the median value is about 30 lcd. Consumption for basic needs (water for drinking and cooking) is 14 lcd. This estimated level of consumption is rather high when compared with water use in most African urban centers. 3.12 Latrine construction is essentially carried out with involvement of technical assistance provided through volunteer agencies attached to primary health care programs and is mainly concentrated in the larger villages. It may be estimated that less than 5% of the rural population has sanitary means of excreta disposal. Existing Water Resource Balance 3-13 Among the 303 villages of the district of Kita, close to 70% are reported to suffer periodic water deficit. During the preparation of the Project all these villages were visited; a survey of the present population and their livestock was carried out and available water resources during the dry season were estimated. Water needs to be satisfied would, depending on the objectives, require the following actions: (See Annex 3 for details). (i) the basic satisfaction of human needs in the district would require about 300 additional water points to serve a population of 110,000 located in about 200 villages; or (ii) the satisfaction of the above needs and additional demand for livestock and small scale agricultural usage would require the construction of 575 additional water points to serve 117,000 inhab- itants and their livestock as well, spread over 225 villages. Against the background of available financial resources, and as a reflection of agreed upon priorities, the proposed Project envisages to satisfy the basic human needs only; the investment criteria are detailed in para. 4.03.  - 9 - IV. THE PROJECT Project Genesis and Objectives 4.01 This Project has been prepared by DNHE assisted by a consultant, BRGM under an IDA-PPF financing, following a request by the Malian Government to implement an integrated RWS and Health Project to improve living and sani- tary conditions, and thus contribute to the human capital formation in rural areas. Hence, the Project would be implemented in parallel with an IDA Health Project for the same general Project area. To meet the objectives, the Project proposes to: (i) supply water for the basic human needs in about 215 villages in the district of Kita and 15 villages in the districts of Bafoulabe and Kenieba where Health Centers would be built; (ii) set-up an operation and maintenance system of the water points which would ensure availability of spare parts and emphasize maxi- mum self-reliance by the villagers themselves; and (iii) strengthen the capability of DNHE to identify, prepare and manage RWS projects, as well as provide technical assistance to the villagers for maintenance of the handpumps. Project Components 4.02 The proposed Project would include the following components: (i) provision of about 325 productive boreholes in the district of Kita during a four year drilling campaign, and provision of about 15 productive boreholes during the first campaign in the villages in the districts of Bafoulabe and Kenieba where Health Centers would be built; (ii) installation of about 340 handpumps and supply of necessary replacements and spare parts; (iii) management of the Project including: (a) consultant services for Project preparation (already financed under the PPF); (b) construction of Project management offices, garage and ware- house. "Base de Kita" (to be financed under the PPF in order not to delay Project implementation); and (c) technical assistance to DNHE for general Project management including geophysical survey for well siting and promotional activities at the village level, as well as supply and operation of the necessary equipments and vehicles of the DNHE's Field Team;  - 10 - (iv) consultant services for a mid-Project review and preparation of a second project in the districts of Bafoulabe and Kenieba; and (v) construction of additional water points and/or supply and installation of additional equipment and/or additional consultant services to take advantage of opportunities emerging during the first years of implementation. A technical and economic evaluation would be made by an independent expert as to the optimum use of the corresponding funds at the time of a review during the third drilling campaign (para. 4.26). Investment Criteria 4.03 To make up the whole water deficit in the District of Kita (para. 3.13) does not appear to be a realistic objective; hence, the scope of the proposed Project has been defined on the following basis: (i) to limit, in the light of absorptive capacity constraints in Mali and the Bank's relative unfamiliarity in this field, the duration and the size of this Project to the use of two drilling rigs during three campaigns 1/ and of one drilling rig during an addi- tional fourth campaign. During the first campaign, one rig will operate for about six months in the districts of Bafoulab'e and Kenieba to construct the boreholes required for the Health Centers. According to experience in Sahelian countries, an effi- ciently operated drilling rig would drill at a pace of around 11 - 12 boreholes per month, thus resulting in about 100 boreholes per campaign. With an expected 50% success rate in the District of Kita, and 33% only in the districts of Bafoulabe and K6ni!&ba (para. 4.05), a total of about 340 productive boreholes could be drilled under the Project; (ii) to allow for supplying the maximum number of villages, the satis- faction of human basic needs, i.e. about 20 to 25 lcd, has been re- tained as design criteria. The average water production of a bore- hole equipped with a regular handpump being limited to about 1 m3/h, a new water point will be created for 500 inhabitants at the maximum; (iii) to distribute the 325 proposed boreholes in the District of Kita the following criteria will also be considered: prevalence of waterborne diseases, size of the village, existence of a school or a Health Center, possibilities of economic development, distance between the village and the remaining water sources during the dry season, and accessibility of the village. A very important cri- terion, however, would be the willingness of the beneficiaries to contribute physically to and participate financially in the pre- paration of the site of the water point, and in the purchase as well as maintenance of the handpumps (para. 4.12). 1/ A drilling campaign corresponds to the period October-June.  - 1 1 - Technology Used 4.04 Supplying water in rural areas of Sahelian countries inevitably requires an evaluation of the trade-offs between open wells and boreholes. On the one hand, open wells present the advantages of providing access to several users at the same time, lifting water by traditional means; on the other hand, their construction is slow and expensive (twice as much as a borehole), bacteriological quality of the water is often unsatisfactory, and water avail- ability is subject to seasonal variations of the aquifer. Modern boreholes can be drilled within one day at lower cost, availability and quality of water generally pose no problems, but installation of a pump is necessary. Based on experiences of other RWS Projects in Mali, it is proposed to mainly equip the villages with boreholes; only a few open wells could be built either by "OP" or by a private contractor within the limits of the possible additional works to be defined at the time of the mid-Project review (para. 4.26). However, as the Project will introduce new technologies it will require a thorough psychological preparation of the population; thus promotional activities will play an important role for Project execution. 4.05 Hydrogeology in the Project area not being well known (para. 3.08), systematic aerial photo interpretation, followed by a thorough geophysical survey will be carried out by the DNHE Field Team prior to borehole siting. For this purpose an experienced geophysicist as well as the required equip- ment 1/ (electric, magnetometric sensors) will be provided by the Consultant under the technical assistance contract (para. 4.09). Despite the geophysical surveys, average success rates are expected to be only 50 percent in the District of Kita and 33 percent in the districts of Bafoulabe and Kenieba in view of the difficult geological formations prevailing in the Project area. 4.06 Drilling of boreholes will be contracted to a qualified company. According to the geological formation either rotary or "down the hole hammer" methods will be used. Average depth is estimated to be about 55-60 meters with drilling diameters of 4 to 6 1/2 inches in most cases; these character- istics do not justify initial reconnaissance drillings. When necessary, PVC casing and screens will be installed. As a general rule, a borehole would be considered productive, and placed into operation, when the yield exceeds 1 m /h. 4.07 Productive boreholes will be equipped with suitable pum s, the average discharge rate of which will in most cases be 0.7 to 1 .0 m2/h. Some very productive boreholes could be equipped with handpumps yielding 2 to 4 m9/h; last, a limited number 3f solar pumps may be installed on very pro- ductive boreholes (more than 5 m /h) within the limits of the possible addi- tional works to be defined at the time of the mid-Project review (para. 4.26), provided the corresponding high investment cost could be justified by the possibility of implementing small agricultural or livestock projects. Choice 1/ Equipment to remain with DNHE at the end of the contract.  - 12 - of pump supplier on ICB basis will not only be based on the quality and per- formance of their product, but also on their capability and willingness to set up in the Project area under the supervision of DNHE, the necessary logistics for further operation and training of local caretakers at the village and sub- district level. It is expected that the ongoing "UNDP Handpumps Project" for which the Bank is the executing agency will be able to provide pertinent information to the Government prior to award of the contract of supply and installation of handpumps. 4.08 The completion of the well site will be carried out with participa- tion by the villagers under the supervision of the DNHE Field Team. It will consist of building an adequate and properly drained apron and a protection wall. Project Management 4.09 As indicated in para. 2.06, the Project management will be based in Kita. The DNHE engineer currently responsible for the preparation of the proposed Project has been appointed as Project Manager. His appointment or the nomination of an alternate, suitably qualified candidate acceptable to IDA was a condition for negotiations. The DNHE team will further comprise 4 engineers (2 hydrogeologists, 1 geophysicist and 1 RWS specialist) and 2 technicians (1 hydrogeologist and 1 RWS specialist). They will be assisted, up to the end of the third drilling campaign, by a foreign technical assis- tance team (2 hydrogeologists and 1 geophysicist). The Technical Assistance Team will be in charge of: (i) general management of the Project: bid evaluation, contracts writing, technical and financial construction supervision; (ii) siting of the water points by geophysical survey (para. 4.05); (iii) supply and operation of vehicles and equipment necessary for the Project Field Team activities in Kita; and (iv) on-the-job training of the local counterpart in project management and work supervision. It is expected that the fourth drilling campaign and general Project activi- ties in Years 4 and 5 will be entirely implemented by the DNHE Field Team without foreign assistance. The DNHE field office would also include an accountant, and the activities would be subjected to an annual audit (para. 4.29). 4.10 In order to ensure sufficient operation from the beginning of the Project, the Project Manager and 5 more DNHE staff (drilling rig operators and RWS technicians) will receive during 1983 training related to their future responsibilities in the ongoing RWS projects in Mali, financed by the PPF.  - 13 - Villagers' Contribution to and Participation in the Project 4.11 The Malian Government recently adopted the policy of encouraging the rural communities to participate, to the extent possible, in the financing of the handpumps and to assume greater responsibility in the operation ana maintenance (O&M) of the water points. This orientation is seen in the RWS sub-sector throughout the Sahelian Region and in many coastal countries as it results from reflections on: (i) the less than satisfying experience in the past where RWS invest- ments mostly failed as the beneficiaries were not at all sensitized and were left out of participation in maintenance and repair. and (ii) the excessive burden on the authorities' administrative capac_ty to sustain a large scale maintenance system. In Mali the three major RWS projects have adopted the new approach in recent years and introduction of the ownership concept of handpumps by the rural communities as well as day-to-day maintenance by the villagers themselves have proven successful. Furthermore, systematical preventive maintenance has led to considerable decrease in the number of recorded pump failures. For example in the Helvetas Project the annual failure rate dropped from 130 per 10C pumps to 15 per 100 pumps in the course of 12 months. 4.12 Prior to the drilling of a borehole, DNHE will enter into an agree- ment with each participating village outlining the village's responsibilities related to the construction and O&M of the water point. Agreement forms already in use in the other RWS projects are in general acceptable to IDA. They are now being revised to be tailored to this specific Project. Annex 4-1 contains a pro-forma agreement form currently used for the Helvetas Project. Prior to installation of the handpump the villages will have to pay to the Project account a financial participation of MF 270,000 (US$360) in 1982 prices and not subject to inflation throughout the Project implementation period, representing about one third of the purchase price of the pump (MF 660,000 /3 = MF 220,000 or US$295) and the cost of the ten bags of cement necessary for the site preparation (MF 50,000 or US$65) (para. 4.03(iii)). Surveys performed during Project preparation show that this amount is withir. the affordable range of the beneficiaries and that the willingness to actively assure this contribution as well as the necessary expenditures for the subse- quent maintenance (Chapter V) is very high among the target population. 4.13 Villages will assume the cost of regular maintenance of the pumps including purchase of spare parts and of repair interventions by the DNHE Field Team. In other projects active participation of the villagers in hand- pump maintenance has more than halved the amount of recurrent costs from approximately MF 120,000 to around MF 50,000, per handpump and per year, i.e. from US$160 to US$67.  - 14 - Maintenance of the Water Points - Role of DNHE 4.14 DNHE will assure throughout the Project implementation period: (i) the set-up of the necessary logistics such as availability of spare parts, (which will be financed up to Year 5 by the proposed Pro- ject) storage depots, and pricing of spare parts; (ii) the training of caretakers at the village as well as at the sub- district levels for preventive maintenance and small repairs (in connection with the handpumps supplier); and (iii) the availability of its own mobile maintenance team (the opera- tions' cost of which will be financed up to Year 5 by the Project) to assume co-ordination of village and sub-district level repair activities and to intervene in cases where repair problems exceed the skills of the rural population. It is expected that by the end of the third drilling campaign, the DNHE Field Team will be largely capable to fulfill these responsibilities without further technical assistance. However, in recognizing the importance to optimize scarce resources by utilizing available talent in the project area as much as possible and to benefit from economies of scale, DNHE will enter into arrange- ments satisfactory to IDA with ODIPAC 1/, an IDA-funded regional development agency, to obtain some operational support. DNHE will use ODIPAC's storage depots for the location of spare parts, obtain assistance for the village training activities, and subcontract to it the village level promotional activities to be carried out jointly with the IDA Health Project. DNHE's maintenance activities would be higher in the initial years, when villagers have not yet fully mastered the maintenance and repair techniques. The de- pendency on outside support would gradually decrease, and the DNHE maintenance team will then assume a larger monitoring function of the pumps installed and of the hydrogeological conditions of boreholes operation. Handpumps Replacement 4.15 Handpumps installed under the Project will be guaranteed by the supplier for at least 12 months. Thus, the replacement issue will become relevant only in the outer years. In most cases, replacement would take the form of gradual renewal of worn out parts, stretched out over several years, therefore limiting the financial burden imposed upon the rural communities. A potential problem would exist for those expected few cases where the whole pump would have to be replaced. The Government's policy, already successfully implemented under the major ongoing RWS projects, is to require the beneficia- ries to carry the full cost. For the proposed Project, possibilities will be studied and ways elaborated to tap the credit system available under the ODIPAC project. 1/ ODIPAC = Office de Developpement Integre des Productions Arachidieres et Cerealieres.  - 15 - Village Level Promotional Activities 4.16 The promotional activities, i.e. the "software" tools to be used at the village level play a most important role for RWS projects to ensure their success: (i) by preparing the rural communities on how to cope with the newly introduced technologies, by training the local caretakers for O&M aspects and by explaining the respective role of the villages and DNHE in order to "demystify" the hitherto alien technology so that it be absorbed at the village level enabling the rural communities to become largely self-sufficient (as it has been the case with bicycle technologies); (ii) by introducing, together with the IDA Health Project, hygiene and sanitation related concepts which would result in modified be- havioral approaches towards water use reflected in improved hygiene standards. These, in turn, would then be the basis for improved health conditions to be expected as a result of the Health Project. 4.17 The promotional activities for the Water and Health Projects must by necessity be designed so as to be integrated into the overall development process in the Region. To this end, the two Projects will seek operational support from ODIPAC, (para. 4.14) and DNAFLA 1/ before April 1, 1984. Experi- ences in rural development projects as well as in the ODIPAC covered areas have shown that the population responded better to extension efforts, and participated more actively in marketing, credit and input supply activities, if at least a nucleus of villagers had attained a minimal level of functional literacy and numeracy in their own language. Thus, DNAFLA as ODIPAC's execut- ing agency for functional literacy related activities will play an important role in the two Projects' promotion activities. A detailed write-up on the subject of community participation, including the role of DNAFLA, is available in the Project files. 4.18 During appraisal, it was agreed that the project costs pertaining to this aspect estimated at US$340,000 for the implementation period would be financed entirely out of the Health Project, with the exception of the recruitment of a Malian Sociologist to be financed under the RWS Project. The respective responsibilities, the methodology and timetable of intervention was agreed upon during meetings involving both Health and Water executing agencies, ODIPAC and DNAFLA. Annex 4-2 contains a brief description of the agreed upon community promotion activities. Project Cost 4.19 The estimated cost of tne project is MF 8,875 million (US$11.90 million) with a foreign exchange component of MF 7,415 million (US$9.95 million) representing 84%. Taxes and duties on imported goods as well as taxes on works are not applied to Bank Group projects in Mali; however the Project cost includes taxes on fuel which represent MF 310 million 1/ DNAFLA = Direction Nationale de l'Alpnab6tisabion Fonctionnelle et de la Linguistique Appliquee (National Agency for Functional Literacy).  - l - (US$0.44 million equivalent) or 3.5% of the total. Components already finan- ced under the US$1.00 million PPF have also been integrated in the Project Cost. The summary cost estimate shown below is further detailed in Annex 4-3. Sunmmary Project Cost and Financing Plan MF Million US$ Million Foreign Local Total Foreign Local Total % PROJ= C0O (i) Drilling of boreholes and site preparation 2,855 445 3,3C0 3.83 .59 4.42 52.6 (ii) Supply and installation of handpumps 335 35 420 .52 .05 .57 6.8 '-li) Project management (a) Project preparation a/ 290 40 330 .39 .05 .44 5.2 (b) Construction of the "base de Kita" a/ 330 85 415 .45 .11 .56 6.7 (c) Technical assistance, supply and operation of equipment and vehicles of the DN'HE's Field Team 910 240 1,150 1.22 .32 1.54 18.3 (iv) Preparation of a second project 155 50 205 .21 .07 .28 3.3 (v) Additional water points and/or equipments and/or consultants services b/ 450 - 450 .60 - .60 7.1 Base cost as of end 1982 5,375 895O/ 6,270 7.22 1.190/ 8.41 100.0 'Physical contingencies d/ 645 120 765 .86 .16 1.02 12.1 Price contingencies 1,395 445 1,840 1.87 .60 2.47 29.4 Total project cost 7,415 1,460 8,875 9.95 1.95 11.90 141.5 PRTOPOSED YI1ANCIM PLAN (i) IDA Credit 3,135 335 3,470 4.21 .44 4.65 39.1 (ii) IDA Special End Credit 4,20 385 4,665 5.74 .52 6.26 52.6 (iii) Malian Contribution (a) Goveriment Counterpart e/ - 650 650 - .87 .87 7.3 (b) Beneficiaries direct contribution - 90) 90) - .12 .12 1.0 7,415 1,460 8,875 9.95 1.95 11.90 100.0 a/ Financed under the PPF. b/ To be defined at the time of the mid project review. c/ Includes MF 310 million (US$.42 million) of taxes on fuel consumed during Project execution. d/ 15% of components costs except iii(a), iii(b) and (v). e/ Of which MF 310 million (US$.42 million) will come from taxes on fuel consumed during Project execution.  - 17 - 4.20 Project costs have been calculated after a detailed analysis of each component based on cost data from similarly organized RWS projects in Sahelian countries, and compared with quotations obtained for similar works recently tendered for in the region. All costs have been adjusted to reflect unit prices as of end 1982. Detailed calculations are available in Project files. 4.91 Project costs include financing of all the operating costs of the DNHE Field Team during the implementation period: supply, operation and maintenance of vehicles, field allowances for the administrative staff, office operation and spare parts for handpumps. Project costs, however do not in- clude salaries of the administration staff as no additional position would be created by the proposed Project. These recurrent costs amount to about 9% of the total throughout the Project implementation period. 4.22 The cost of a productive and equipped borehole for the Project area at an expected success rate of 50%, is estimated at about US$20,000 (expressed in base cost as of end 1982) of which 68% correspond to the drilling and site preparation, 9% to supply and installation of handpumps and 23% to borehole siting, construction supervision and promotional activities. Another break- dowr shows that as an item of major importance foreign manpower would repre- sent one third of the cost of a productive water point. While this proportion in overall cost would vary as a function of the actually attained success rates, nonetheless it largely justifies the objective of strengthening the capability of DNHE in management of further RWS projects (para. 4.01 (iii)). 4.23 Allowances for physical contingencies on construction work at the average rate of 15% are provided. In addition allowance has been made for price contingencies for imported goods and services at a rate of 8% in 1983; 7.5% in 1984; 7% in 1985, and 6% thereafter. For local cost, the respective rates are 15% in 1983; 12% in 1984, and 10% thereafter. Project Financing 4.24 An IDA Credit of US$4.65 million equivalent and a Credit from the IDA Special Fund of US$6.26 million equivalent are proposed. The remainder of US$0.99 million equivalent would be financed by the Government (US$0.87 million of which US$0.42 million representing the amount of taxes on fuel) and by the beneficiaries themselves (US$0.12 million) (para. 4.12). The Government of Mali would be the borrower of the Credits, which will be entirely administered by DNHE. Implementation 4.25 Detailed designs and tender documents are being prepared by DNHE, assisted by the Consultant BRGM, and financed under the PPF. They will be ready by December 1983. For bid evaluation, contract preparation and construction supervision, DNHE will be assisted by an Engineering Consultant selected in accordance with Bank procedures (para. 4.09). The signing of the contract with the Engineering Consultant will be a condition of effective- ness. It is expected that construction will start by October 1984 and extend to June 1989 (Annex 4-4).  - 18 - 4.26 During the third drilling campaign, DNHE will employ an independent and qualified Consultant on terms and conditions satisfactory to IDA to carry out an evaluation of the activities to be included in the fourth drilling campaign. These activities could be according to the opportunities which had emerged during the first years of Project implementation either drilling of additional boreholes or open wells (para. 4.06), either purchase and installation of additional handpumps or solar pumps (para. 4.07) or additional consultants services (para. 4.09). Such a program of possible additional activities, the amount of which will be limited to the funds allocated for this purpose, will be submitted to IDA for review and approval three months before the end of the third drilling campaign. Procurement 4.27 Procurement arrangements are summarized in the table below: Procurement Arrangements (US$ millions) Procurement Method Project Elements ICB LCB Other N.A. Total Cost (i) Drilling of boreholes -- - 6.80 a/ __ 6.80 and site preparation ( -- ) (--) (6.26) ( -- ) (6.26) (ii) Supply and installation 0.84 __ __ __ 0.84 of handpumps (0.84) (--) ( -- ) ( -- ) (0.84) (Iii) Project Management -- __ 2.06 b/ 1.25 c/ 3,31 ( -- ) (--) (2.06) (1.00) (3.06) (iv) Preparation of a -- __ 0.35 b/ -- 0.35 second project ( -- ) (--) (0.35) ( -- ) (0.35) (v) Additional works and/ 0.60 -- -- -- 0.60 or consultant services (0.40) ( _)-- -- (0.40) Total 1.44 __ 9.21 1.25 11.90 (1 24) ( (8.67) (1.00) (10-91) a/ Limited ICB following IDA Special Fund guidelines. b/ Contract awards for technical assistance and consulting services will follow procedures acceptable to IDA. c/ Includes refinancing of US$1.00 million in PPF and Malian Government contribution of US$0.25 million in Years 4 and 5 for DNHE's Field Team operations. Note: Figures in parenthesis are the respective amounts financed by IDA and the IDA Special Fund.  - 119 - As the contract for drilling of boreholes will be financed out of the proceeds of the IDA Special Fund credit, it will be awarded through ICB procedures in accordance with the IDA Special Fund Guidelines and Practices. The contract for supply and installation of handpumps as well as other contracts for possible additional works or equipments will be awarded through ICB procedures in accordance with Bank Group Guidelines and Practices. For technical assistance (para. 4.09) and studies (para. 4.02 (iv) and 4.26), consulting firms will be selected in accordance with procedures acceptable to IDA. The technical assistance contract (para. 4.09) will cover about 95 man-months at an average rate of US$7,300 per man-month, including salaries, subsistence allowances, and travel (as of end 1982 prices), and also supply and operation of necessary vehicles and equipment. No domestic preference will apply in contract award, since sufficiently qualified and experienced local contractors and suppliers do not exist. Disbursement 4.28 The proposed Credits would be disbursed as follows: Allocation and Disbursement of the Credits IDA Credit IDA Special Fund Credit Amount % of Amount % of US$ million expenditure US$ million expenditure Category financed financed (i) Civil works (dril- ling of boreholes) -- -- 5.36 92 (ii) Equipments (handpumps and other equipments) .73 100 -- -- (iii) Consultants' services and studies 2.20 100 (iv) Refinancing of the PPF 1.00 100 -- -- (v) Unallocated .72 -- .90 -- Total 4.65 6.26 4.29 The Government contribution will be paid to a special Project Account in six installments, the amounts of which have been tailored to meet the forecasted requirements for Project financing by the local participation; the schedule of payments to the Project Account is justified in Annex 4-5. Allocation by the Government for its fiscal year 1984 of MF 110 million (US$167,500 equivalent) for the Project, establishment of the Project Account and payment of the first installment of MF 20 million (US$26,500 equivalent), will be conditions of effectiveness of the Credits. Further installments of MF 90 million, MF 110 million, MF 150 million, MF 190 million, MF 90 million (US$121,000, US$147,500, US$200,000, US$255,000 and US$121,000 equivalent) will be paid before the beginning of each drilling campaign not later than August 31, 1984, 1985, 1986, 1987 and 1988 respectively. Proceeds of the  - 20 - villagers' contribution (para. 4.12) will also be paid to the Project Account. This account will be managed by the Project Manager, supervised by the Director of DNHE, and subject to regular review by Bank staff and an annual external audit. Funds will be used for payment of the portions of the drilling contract not covered by the IDA Special Fund Credit, for purchase of cement required for site preparation, spare parts for vehicles as well as some office supplies on the basis of a budget established for each drilling campaign. 4.30 The estimated schedules of disbursements of the Credits given in Annex 4-6 are based on the average disbursement profile for water supply and sewerage projects in West Africa. The closing date of the Credits would be June 30, 1992.  - 21 - V. AFFORDABILITY Objectives 5.01 One of the most important parameters in Project design has been the emphasis on minimizing the incremental financial burden on the national budget (i.e. DNHE's budget) as a result of the Project in view of the severe finan- cial constraints of Mali. Therefore, solutions were sought to assure adequate coverage of the ensuing recurring costs by the beneficiaries themselves, all the while taking into account the rural population's affordability limits. To this end, extensive socio-economic surveys were carried out in the Project area during the preparation phase to establish the profiles of villages in the Project zone. Recurrent Cost Implications > D2 By Project completion the incremental recurrent cost per water pu._n!per year are estimated to be in the order of MF 60,000 with the following approximative breakdown: Incremental Annual Recurrent Cost per Water Point During the Fifth Campaign (End 1982 prices) MF % At the village level: -Purchase of spare parts 15,000 25 -Remuneration for emergency assistance by DNHE 7,500 13 -Remuneration of sub-district repairman 4,000 7 Sub-total 26,500 44 At the DNHE level: -Personnel, overhead, operatiori of vehicles 35,000 58 -Depreciation of vehicles 6,000 10 -(less) Remuneration for emergency assistance - 7,500 -13 Sub-total 33,500 56 Total 60,000 100  - 22 - In addition, villagers would remunerate their own pump caretaker most likely In kind, in the Drder of MF 3,000/month per water point. Incremental annual recurrent cost could be higher for the initial years, during which the villagers would not as yet feel comfortable with pump maintenance. Further details are available in the Project files. 5.07 The estimated total incremental O&M costs as a result of the Project are shown below. Indicative Incremntal Operation and Maintenance Costs as a Result of the Project at Villages' and DNHE Levels (MF million) Year 1984/85 1985/86 t986/87 1987/88 1988/89 1989/90 Cash Outlay at Villages' Level a/ - Constant 1982 prices 2.0 5.C 8.0 9.5 9.5 9.5 - Current prices b/ 2.0 6.C 11.0 14.0 16.0 18.0 Lncremental O&M Costs at l)NHE's Level c/ - Constant 1982 prices 9.0 10.0 11.0 12.0 12.0 12.0 - Current prices b/ 10.C 12.0 15.0 17.0 19.0 21.0 a/ excluding village caretakers' remuneration b/ applies local price escalation estimates (para. 4.23) c/ including personnel, overhead, depreciation and operation of venicles by completion of tr.e Project, tne resulting additional budgetary burden to IDNHE would be about TMF 12 million per year (US$16,000) in 1982 prices, or 9% of DNHE's RWS sub-sector budget in 1982. It is expected that the covenanted annual Government counterpart contributions, which are far higher than the future annual O&M costs alone (para. 4.29), will serve as a "primer" for continued Government budgetary allocations for the post-Project period. An allocation level of MF 12 million (1982 prices) will enable DNHE to fulfill its obligations of assuring adequate support to and supervision of proper maintenance of the Project investments. IDA Project supervision in the outer years will envisage to assist DNHE in working out the exact levels of finan- cial commitments required and in establishing the appropriate procedures. On the other hand annual service on the IDA Credit, starting around 1994, will amount to approximately MF 220 million (US$295,000). During negotiations assurances were obtained from Government that after the Project implementation period adequate resources reflecting the annual O&M requirements would be provided for in DNHE's annual budget.  - 23 - Cost Recovery Approach 5.04 Clearly it is not possible to aim for recovery of the capital costs by the beneficiaries for RWS projects in the Sahelian zone except for partial recovery from handpumps. 5.05 The villagers' initial contribution to the Project of about MF 270,000 (para. 4.12) could represent approximately 2% of an average village's annual expenses in the district of Kita 1/. While certainly a non- negligible cash outlay, during field visits the willingness to participate was ascertained virtually everywhere. This willingness can be traced to expectations of a reliable water source all year round, the associated time savings (in particular during the height of the dry season) and to a lesser extent of improved water quality and health improvements. Further, as an illustrative comparison, the above indicated amount would represent the value of approximately 2-1/2 cows (usually regarded as capital stock) 2/ or two- thirds of the cost of a marriage for a Malink;e groom 3/, thus leading to the observation that a participation in this amount would appear well within the affordable limits of a village's accumulated capital stock. 5.06 Partial cost recovery envisaged from the villagers for recurrent costs estimated at MF 60,000 (US$80) per annum would represent less than one percent of the current estimated expense levels in an average village, and must be considered affordable. 5.07 Spare parts will be sold to the villagers at a price 10% higher than the import prices to allow for handling and administration charges. Fuel charges will, to the extent possible, reflect the actual distances to be covered by the relevant maintenance team called in for the specific repair intervention. VI. PROJECT BENEFITS AND RISKS Benefits 6.01 The main benefits of the Project will be the increased availability of, in principle, safe drinking water to the population in the Project area to satisfy their basic water needs all year round including the dry season. Together with the IDA Health Project, this Project is expected to result in an improvement in the health status of the affected rural population, thus contributing potentially to the widely recognized country objective of human 1/ Assuming an average village size of 400 persons, and based on MF 34,000/person. 2,' The price of a cow at the village level lies between MY 100,000-125,000. 3/ Bride price of MF 375,000 (three cows and various gifts) plus feast (over three days).  - 24 - resources development and increased agricultural production for the rural area in Mali. Ps a further benefit, but of no lesser importance, the Project will develop important initiatives of community organizatioL, by institutionalizing new water and health related activities at the village level, thus serving as a vehicle towards further community development. By adopting the approach to maximize the responsibilities of the beneficiaries themselves in O&M, and financial aspects of those activities, the Project will also attempt to minimize the incremental burden on the national budget of DNHE. 6.02 As to institutional aspects, apart from the village level, a major benefit of the Project is expected to be the installation of a nucleus Field Team of DNHE in the First Administrative Region within the framework of the decentralization policies of the Government for the RWS sub-sector. This field office will remain in place after Project completion to continue supervision of O&M of the water points, and to supervise execution of future generation RWS projects. 6.03 A quantification of the benefits would appear rather difficult at this point. Some target figures are given in the Rural Health Project SAE as to expected improvements in health standards of the covered population as a result of the implementation of the two Projects. However, it would be highly speculative to attempt a rate of return analysis of the Project. Risks 6.04 The major risks concerning the implementation of tne proposed Project do not pertain so much to the construction of the boreholes and equipment with handpumps, but to the sustained maintenance of these investments. Clearly the Sahelian experience has shown that maximum responsibility of the rural com- munity together with a fostering of a sense of ownership of communal wells is so far yielding the most promising results. 6.05 Yet, given the relative newness of this orientation many unknown factors remain; the answers to questions such as those following will have tC await the results of actual Project implementation: (i) will the villagers really continue to tend to the maintenance of the water point (pump) after the initial euphoria of having water easily accessible has waned; (ii) will the communities be continuously able and willing to finance spare parts and the repairs services; (iii) will the villages be able to solve whatever new sociological conflict situations may arise as a result of the introduction of the communal handpump; and (iv) will afterwards the health and living conditions really improve substantially and the villagers acknowledge it as such. The Project has been prepared with all these questions in mind, and conse- quently emphasis is being put on the village promotion and training activi- ties. The concept of a, if maybe not legally, but at least morally binding  - 25 - (for such traditional societies) "contract" will be applied also following positive experiences from the other major RWS projects in Mali. 6.06 Still, the rural communities would not be able to solve all their maintenance and repair problems, but would need a viable outside support structure in order to be prepared for all eventualities. This support will be provided by DNHE with the assistance of ODIPAC. There is a risk that the existence of ODIPAC itself is not necessarily assured beyond the life of this Project. This risk had to be accepted, however, to make use of existing available institutional and human resources. A successful support role for ODIPAC would conceivably strenghthen and assure its own success as it is essentially a rural extension agency. While performance of ODIPAC will be closely monitored during the Project, contingency plans would be drawn up by DNHE in consultation with IDA. 6.07 As a further note, there is the possibility that the projected success rate of 50% might not be attained, leading to even higher cost per productive borehole. Yet it is felt that this retained success rate is already rather conservative in comparison with countrywide estimates of 60%. Meticulous application of geophysical works prior to drilling and improved knowledge of hydrogeological characteristics during Project execution could likely lead even to more positive results. 6.08 As to water quality, while an unknown factor as yet, there is little concern, judging from experiences in adjacent RWS program zones with similar geological formations. VII. AGREEMENTS TO BE REACHED AND RECOMMENDATION 7.01 At negotiations, assurances were received by Government on the following: A) As conditions for Credits Effectiveness: (i) DNHE will enter into a contract with a competent engineering consultant to assist in the management of the Project and provide technical assistance to the DNHE Field Team on terms and conditions acceptable to IDA (para. 4.25); (ii) DNHE will establish one Project Account for: (a) all funds resulting out of the villagers' initial contribution to the Project, as well as their payment for recurrent costs (spare parts, etc.) (paras. 4.12 and 4.29); (b) all other funds necessary for Project management (para. 4.29);  - 26 - (iii) The Government will: (a) allocate for its fiscal year 1984 an amount of MF 110 million (US$147,500 equivalent) for the Project (para. 4.29); and (b) deposit into the Project Account at the date of its establishment an initial contribution of MF 20 million (US$26,500 equivalent) (para. 4.29). B) Other covenants: (iv) DNHE will enter into arrangements with ODIPAC and DNAFLA as to their operational support not later than April 1, 1984 (paras. 4.14 and 4.17); (v) DNHE will have its Project Account audited annually by an independent auditor whose qualifications are satisfactory to IDA, and reports will be made available to IDA within 6 months of the end of each drilling campaign (paras. 4.09 and 4.29); (vi) The Government will pay into the Project Account installments of MF 90 million, MF 110 million, MF 150 million, MF 190 million and MF 90 million (US$121,000, US$147,500, US$200,000, US$255,000 and US$121,000 equivalent) not later than August 31, 1984, 1985, 1986, 1987 and 1988 respectively (para. 4.29); (vii) The Project Management will prepare a budget three months before the beginning of each drilling campaign, covering expenses during the upcoming campaign for review and approval by IDA (para. 4.29); (viii) DNHE shall, during the third drilling campaign, employ an independent consultant on terms and conditions satisfactory to IDA to carry out an evaluation of the activities to be included in the fourth drilling campaign and submit a program of such activities for review and approval by IDA not later than three months before the end of the third drilling campaign (para. 4.26); (ix) The Government will allocate to DNHE's annual budget, after the Project implementation period, adequate resources reflecting the estimated annual O&M requirements (currently estimated at MF 12 million (US$16,000) in end 1982 prices) (para. 5.03); and  - 27 - (x) DNHE will enter into arrangements with each participating village to set up the responsibilities of each village, including the financial and physical contribution in construction, operation and maintenance of the water points (paras. 4.12 and 6.05). Recommendation 7.02 Subject to reaching agreement on the items listed in the paragraphs above, the proposed Project is suitable for an IDA credit of US$4.65 million and a Credit from the IDA Special Fund of US$6.26 million.  MALI RURAL WATER SUPPLY PROJECT STATE MINISTRY OF INDUSTRY AND EQUIPMENT ORGANIZATION CHART OF DNHE ITRECTOR GENERAL DEPUTY DIRECTOR |GENERAL Hydrogeology StHeUbnWt P ie aiainry Amn n (Ground Water) d S i Urban Water Supply River gio nergyi ~~~~Division Division adSntto Division Dvsion Ferinacial f _ 1 1 1 l 1 l w 1 ' ' 1 ~~~~~~~~~~~~~Procurement IDA UNDP/UNICEF Helvetas Mali Aqua Viva JICAand Works Project Project (Suisse aid) (CCCE) Project Supervision Commission Library and Archives March, 1983  MALT RURAL WATER SUPPLY PROJECT WATER BALANCE BY SUB-DISTRICT "Survival" alternative "Development" alternative C bCr W_r W t ; r o un -' > o V a t 3 - H a~ C U l ,C UQ Z C U O 3