Mali - Second Urban Project

Docamt of The WYorld Bank FOR OFmFCIAL USE ONLY Report Yo. 5855-MLI STAFF APPRAISAL REPORT REPUBLIC OF MALI SECOND URBAN PROJECT March 3, 1986 Urban Division Western Africa Projects Department 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.  CTTPRENCY FOUIVALENTS Currency Unit CFA Franc (CFAF) US$1.00 CFAF 385 CFAF 1 million = US$2,597 SYSTEM OF WEIGHTS AND MEASURES: METRIC FISCAL YEAR Januarv I - December 31 ABBREVIATIONS AND ACRONYMS ERR Economic Rate of Return FAC French Bilateral A4; Agencv PPF Project Preparation Facilitv T'MOA ITnion tionetaire Otest Africaine (Regional Central Bank)  FOR OMCAuL USE ONLY MALI SECOND URBAN PROJECT STAFF APPRAISAL REPORT TABLE OF CONTENTS Page DOCUMENTS CONTAINED IN THE PROJECT FILE i CREDIT AND PROJECT SUMMARY ii I. THE URBAN SECTOR 1 A. Urbanization and Demographic Trends 1 B. Urban Organization and Institutions 2 C. Constraints to Rational Development in Bamako 2 Institutional Capacity 3 Basic ROLd Network 4 Cartography and Cadastre 4 Financing for Urban Development and Maintenance 4 D. Government Policy and Action in the Urban Sector 5 Overview 5 Investment Programming Study 5 E. The Bank's Previous Role 6 EI. THE PROJECT 7 A. Project Objective and Description 7 Background 7 Rationale for Bank Group Involvement 7 Froject Objectives 8 Project Components 8 B. Project Cost and Financing Plan 9 C. Project Implementation 10 Implementation Schedule and Responsibilities 10 Training 11 Procurement 11 Disbursement 12 Improvement in District Finances 12 Cost Recovery and Affordability - Land Development 15 Poverry Impact 16 Special Accounts 16 Accounting, Auditing, and Reporting 16 Status of Project Preparation 17 This report is based on findings of an appraisal mission which visited Bamako in June 1985, consisting of Messrs. B. Veuthey (mission leader), H. Boldrick, H. Unger, and F. Amiot (WAPUR). Mr. S. Berkman (WAPED) assisted in appraising the training elements of the project. Mrs. A. Artaza assisted in the preparation of cost tables and annexes. This document ha a restricted distribution and may be used by recipiects only in the performance of their official duties Its contents may not otherwie be disclowd without World Bank authorization.  Table of Contents (Continu2d) Page D. Project Benefits, Risks 17 Benefits 17 Rate of Return 18 Sensitivity Analysis 19 Risks 19 III. RECOMMENDATION 20 ANNEXES 2-1 Detailed Description of Project Elements 2-2 Summary and Detailed Cost Tables 2-3 Project Execution Calendar and Responsibilities 2-4 Implementing Institutions 2-5 Procurement Arrangements 2-6 Schedule of Disbursements and Allocation 2-7 District Finance Tables and Resource Mobilization Action Program 2-8 Cost Recovery, Replicability, and Affordability 2-9 Economic Ev-aluation MAPS IBRD 19169: Mali Population Distribution IBRD 19184: Bamako Project Elements IBRD 19413: Bamako City Center Traffic Management Plan IBRD 19414: Bako-Djikoroni Sites and Services IBRD 19415: Kalaban-Sud Sites and Services IBRD 19416: Bankoni Upgrading Area  - iii - MALI SECOND URBAN PROJECT DOCUMENTS CONTAINED IN THE PROJECT FILE INFORMATION CENTER CODE: DOCUMENT # 224.962 Ref. No. Documents 1. Second Projet Urbain du Mali - Etude de factibilite, Groupe Huit, Octobre 1985. 2. Projet Ordures Menageres a Bamako, U. Putzar, GTZ, Aout 1985. 3. Projet Pave, V. Guerin, ILO, Aout 1985. 4. Etude du Developpement Urbain de Bamako, Programmation D6cennale des Investissements, Rapport Provisoire, Groupe Huit, Septembre 1984. 5. Analyse Economique, Methode et Calcul, Groupe Huit, Octobre 1985.  - iv - MALI SECOND URBAN PROJECT CREDIT AND PROJECT SUIIAJLY Borrower: Government of Mali. Beneficiaries: Ministry of Interior, District of Bamako. Credit Amount: SDR 25.2 million (US$28.0 million equivalent). Terms: Standard. Onlending Terms: US$7.5 million from the IDA credit to be onlent to District of Bamako for land development at an onlent rate of 8% per annum for 25 years, in- cluding three years grace period. Project Description: The proposed project will: (a) help remove some of the major citywide infrastructure constraints to the efficient functioning of Bamako; (b) facil- itate private sector housing and construction activities; (c) improve local resource mobiliza- tion; and (d) strengthen the capacity of key urban institutions, especially the District's land development, municipal management, and tax collec- tion functio,'s. The project will finance: (a) road rehabilitation and construction both in the city center and the main access roads to the city center; (b) land development and tenure regularization in various locations totalling about 2,000 ha and 30,000 plots; (c) technical assictance, training, studies, and equipment for the District of Bamako, the Ministry of Interior, and the Project Unit for improvement of resource mobilization, garbage collection, and overall coordination of the project.  -v- Project Benefits and Risks: As a result of upgrading the road network in the city center, along with better management of traffic flows, productivity gains in urban trans- portation are expected to take place through: (a) cost savings in the use and maintenance of the -oad network; and (b) lowering the time spent by both individuals and businesses to travel between the city center and southern areas of the city. Urban land development benefits include incentives for increased land and housing development due to security of tenure, as well as improvement of living conditions for the people in the land development areas of the project. Other gains would derive from better managed operations within the District, especially in the field of urban taxation. The risks involved in the project are: (a) that Bamako District may not be able to sustain suffi- cient political backing to assess and collect the increases in taxes and fees required to generate enough revenue for debt service, maintenance and investment; (b) that project implementation may suffer due to the difficulty of attracting and keeping qualified Malian staff; and (c) that the Go-rernment may not be able to finance its share of the project costs in a timely manner. The improvement in urban infrastructure and services should help to convince taxpayers that a commen- surate tax increase (point (a) above) is justified. Extensive training programs included in the project should counterbalance some of the risks associated with (b). Finally, to ensure the timely provision of counterpart funds (point (c) above), proceeds of the land development account could be made available to the project, if necessary. Some US$5 million equivalent is expected to accrue to this account during the project period, which is roughly in line with the Government counterpart obligation.  - vi - Summary Project Cost Estimate Estimated Costs: --------------- LOCAL FOREIGN TOTAL ----------