Mozambique - Urban Rehabilitation Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 7279-MOZ STAFF APPRAISAL REPORT MOZAMBIQUE URBAN REHABILITATION PROJECT July 1, 1988 Southern Africa Department Infrastructure Operations Division This document has a rustreed diuiition and way be used by redpients only In the pedormance of their efical duties. Its cootents may wA otherwise be disclosed without World Bank authorization. CURRENCY EQUIVAT.ENTS Currency Unit - Metical (plural Meticais) US$1 = 450 Meticais (Mts) Mt 100 = US$0.22 MEASURES AND EQUIVALENTS 1 Meter (m) = 3.28 Feet 1 Square Meter (m.sq) = 10.76 Square Feet 1 Hectare = 2.47 Acres 1 Kilometer = 0.62 Miles ABBREVIATIONS AND ACRONYMS A de M = Agua de Maputo A da B = Agua da Beira AfDB African Development Bank APIE = Administracao do Parque Immobiliario do Estado BPD = Banco Popular de Desenvolvimento BM = Banco de Mocambique CECB - Conselho Executivo da Cidade da Beira CECM = Conselho Executivo da Cidade de Maputo DCU = Direccao de Construcao e Urbanizacao DFP = Direccao da Funcao Publica DNA = Direccao Nacional de Aguas DEC = Direccao de Economia e de Construcao DNEP = Direccao Nacional de Estradas e Pontes DSU = Direccao de Servicos Urbanos ERP = Economic Rehabilitation Program FINNIDA = Government of Finland Development Agency GPE = Gabinete de Promocao de Emprego HABITAR = Housing Management and Supervision Unit INPF = Instituto Nacional de Planeamento Fisico MCA = Ministerio da Construcao e .-uas MAE - Ministerio da Administracao Escatal MT = Ministerio do Trabalho PIU = Project Implementation Unit (MCA) PROHABITA - Gabinete de Programas de HaDitacao FOR OFFICIAL USE ONLY MOZAMBIQUE URBAN REHABILITATION PROJECT TABLE OF CONTENTS Page No. CREDIT AND PROJECT SUMMARY...................... ... ..... . - iii I. PROJECT BACKGROUND..................................... 1 A. Introduction... ......................... 1 B. Sectoral Context.......... .......... ... ....... . 2 C. Rationale for Bank Group Involvement... .......... 6 II. THE PROJECT.................................. ......... 7 A. Project Objectives............................... 7 B. Project Description............................ 7 C. Project Cost and Financing Plan.................. 10 D. Cost Recovery........... ......................... 10 E. Relocation and Resettlement.aa.............. 13 F. Employment Generation............................ 14 G. Justification, Benefits and Risks................ 14 III. PROJECT IMPLEMENTATION................ .... ..... 15 A. Institutional Arrangements...................... 15 B. Action Plan ......... ....s..................... 17 C. Procurement........ ........... # ............... 18 D. Disbursement....*....... .. ..**........... .. .... 35 E. Accounting and Auditing.o.o.................... 21 F. Technical Assistance and Consulting Services..... 23 IV. AGREEMENTS, CONDITIONS AND RECOMMENDATIONS............. 24 A. Agreements and Conditions...... ........... 24 B. Recommendations. ........ ..... . .. . ........ ....... 25 This report is based on the findings of an appraisal mission to Mozambique in April, 1988, consisting of World Bank staff Mr. D. Graham (Mission Leader), Mr. R. Chavez, Ms. T. Genta Fons and Ms. S. Brebion and consultants Messrs. Echeverria, Fontanals, Gatuelas, Homanen and Nankman. Ms. L. Iacono was responsible for report processing. 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 (Conttd) ANNEXES 1 Selected Documents Available on the Project File 2 Infrastructure Rehabilitation 3 Housing Rehabilitation 4 Solid Waste Management 5 Lines of Credit 6 Institutional Development 7 Detailed Project Costs 8 Economic Analysis 9 Employment Generation MAPS IBRD No. 20914 (Mozambique) IBRD No. 20915 (Maputo) IBRD No. 20916 (Beira) MOZAMBIQUE URBAN REHABILITA'ION PROJECT CREDIT AND PROJECT SUMMARY Borrower: People's Republic of Mozambique Beneficiaries: Ministry of Construction and Water (MCA), Ministry of Labour (MT), Ministry of State Administration (MAE) Conselho Executivo da Cidade de Maputo (CECM), Concelho Executivo da Cidade da Beira (CECB), Agua de Maputo (AdeM), Agua da Beira (AdaB), small and micro- enterprises. Amounts SDR 44.0 million (US$60.0 million equivalent). Terms: Standard with 40 years maturity. Project Descriotion: Within the context of Mozambique's Economic Rehabilitation Program, the project would rehabilitate key elements of urban infrastructure to enhance the efficiency of the urban sector and to help offset the social costs of strustural adjustment through the generation of some 35,000 jobs in productive employment during the project's six year implementation period. The project would also strengthen the institutions responsible for planning, operation and maintenance of urban services and assist their efforts to achieve financial viability through resource mobilization at the local level and with the introduction of affordable cost recovery mechanisms for urban services and housing. The project consists of inter-related elements constituting a unified and comprehensive response to the decline in the country's infrasture by focusing on the rehabilitation of vital infrastructure and housing in conjunction with demonstration of policies that would make possible the provision of the physical, human and financial resources for future maintenance. To deliver this, it brings together the following aspectst (i) the rehabilitation of infrastructure networks, housing and municipal services in Maputo and Beira; (ii) demonstration of policies for cost recovery and replicability in rehabilitation; and (iii) training and technical assistance to provide the human resources and institutional strengthening to carry through and replicate these programs. An integral part of the project would be (iv) the creati&a of employment thr.ugh labour intensive methods of rehabilitation and lines of credit to small and micro- enterprises with training and technical assistance. Benefits and Risks: The expenditure of relatively small amounts on infrastructure rehabilitation will save the need for much larger future investments in reconstruction and will yield relatively high economic rates of return, estimated at 39%. The investments in Beira are essential to the development of the Beira transport corridor which will be one of the country's main foreign exchanpe earners, while much of the investment in Maputo will assist in foreign exchange earnings or savings. Risks are that the project may exceed implementing capacity and that the security situation may impede the completion of some project components. The project's restriction to the two principal cities is intended to minimize the risks associated with limited implementation capacity and the security situation. The Government's demonstrated strong commitment to the objectives and approach proposed and the careful consideration given to the appropriate level and type of implementation assistance and manpowe. development provided by the project will also help to minimize these risks. AF6IN June, 1988 - iii - Urba Rehoablitatiso Project summerg Project Casts and Fleancl Plan PROJECT COMPONENTS LOCAL FOREIGN TOTAL ---------$US Million-------- I Ifrastracture Rshabilitaton 7.00 24.30 31.30 II flessiog Rehabtlitatio 4.20 19.00 23.20 III Solid West* Heagemt 0.80 3.30 4.10 IV Limes of Credit 0.00 4.90 4.90 V Iastitutioal Development 0.10 3.30 3.40 VI Project Admimistratice 0.40 2.70 3.10 BASE COST 12.50 57.50 70.00 Physical Contingencies 1.20 5.00 6.20 Price Contingencies 1.40 6.20 7.60 TOTAL COST 15.10 68.70 83.00 FINANCING PLAN LOCAL FOREIGN TOTAL -------$US Million------ Government 6.00 0.00 6.00 IDA 6.OC 54.00 60.00 Paralell Financing, Finnide & Spain 3.10 14.70 17.80 TOTAL 15-10 68.70 83.80 IDA DISBURSEMENTS -------------------US$ million--------------- IDA Fiscal Year 1989 1990 1991 1992 1993 1994 1995 Annual Amount 1.00 7.00 14.00 16.00 14.00 6.00 2.00 Cummulative 1.00 8.00 22.00 38.00 52.00 58.00 60.00 Z of Total 1.7 13.3 36.7 63.3 86.7 96.7 100 MOZAMBIQUE URBAN REHABILITATION PROJECT I. BACKGROUND A. Intz. 'uction 1.01 The Economic Rehabilitation Program (ERP) implemented by the Government of Mozambique has brought about much needed economic reforms and has helped to reverse the economic decline of previous years. The success of the ERP at the macro-level has highlighted the need to rehabilitate the country's rundown infrastructure in order to increase efficiency and facilitate a supply response. Particularly at risk is the provision of services essential to the effective functioning of the main transport corridors, which used to be the country's principal foreign exchange earners. At the same time, the economic stringencies of the ERP in the form of higher prices and public sector lay-offs have, at least temporarily, exacerbated an already critical situation of urban unemployment and low income levels. Government's growing concern with these issues and its desire to rapidly develop a program to alleviate the situation, led to identification of an Urban Rehabilitation Project that would rehabilitate key elements of the country's infrastructure and, in so doing, also help to mitigate the social impacts of structural adjustment through the rapid creation of jobs, in both public and private sectors. 1.02 To respond to this urgent situation, IDA has assisted In the accelerated preparation of a project (identified in October, 1987) which, although not classified as an "Emergency Project", contains many of the elements of such a project, including a simplified and shortened Implementation schedule under a tightly defined action plan (see paras 3.03 - 3.06). The project combines actions to address immediate issues, including: (a) immediate rehabilitation of infrastructure to avoid more costly reconstruction later; (b) provision of essential urban services to enable the transit trade - Mozambique0s principal foreign exchange earner - to function; and (c) generation of productive employment; - 2 - with the initiation of actions to address medium to longer term issues, including: (d) introduction of affordable standards and cost recovery t4 ensure replicability; (e) strengthening of the capacity of local government institutions to plan, operate and maintain infrastructure and services with training, technical assistance and resource mobilization; and (f) development of a housing strategy to address the pressing problems posed by rapid urban growth. 1.03 Progress in ildressing these medium to longer term issues would be monitored closely during the implementation of the proposed project and the results incorporated in sector policies and future investment pzograms. B. Sectoral Context Population and Urbanization 1.04 Mozambique, one of the poorest countries in the world, with a per capita GDP of US$150 (1986), has an area of nearly 800,000 square kilometers and a population of approximately 14 million. Between 1970 and 1985, total population grew from 9.25 million to 13.85 million, an average annual growth rate of 2.7%. During the same period, urban population grew from 0.8 million (9% of total population) to 2.2 million (16% of total population), an average annual growth rate of 7.0%. At these rates, about one quarter of the total population of 21 million projected for the turn of the century would be living in urban areas. 1.05 About half of the urban population lives in Maputo, which increased in population from 385,000 in 1970 to over one million today. The other major city, Beira, has a population of about 300,000. Some estimates indicate that Maputo's population is growing by more than 8% per annum. With the revival of Beira's transit trade, that city is also expected to experience very rapid growth. The current urban growth has been fuelled by the war in the countryside, where continued attacks by armed bandits, which have intensified since the early eighties, have caused large sections of the population to move, either into cities or into neighbouring countries. Sector Issues 1.06 The urban sector is currently in a state of disarray, with severely deteriorated infrastructure, limited or non existant services, weakened institutions and virtually no independent financial resources. This is not to say that Government is not taking action to remedy the situation, but a number of difficult issues need to be resolved, some of which are described below. 1.07 Trained Personnel Shortage - Prior to independence in 1975, most of the urban infrastructure and services were managed and operated by Portuguese, with very little training of Mozambicans. Thus, when all but a handful of the Portuguese left at independence, there were virtually no trained personnel left to run the cities. This problem extended to private businesses involved in construction and the supply of building materials, most of which were abandoned by their owners and which, for lack of any alternative management, were taken over by the SOate. Despite progress in education since independence, the shortage of skilled personnel at technical and managerial levels is still nne of the most critical issues facing the country today. The proposed ptoject would help to address this issv.e in the urban sector by providing assistance to the local government training institute and direct technical assistance for the management of the cities of Maputo and Beira. 1.08 Deteriorated Infrastructure - Despite the rapid rate of urban growth since independence, urban infrastructure and services have scarcely been extended, while the existing systems have deteriorated with lack oi maintenance. In Maputo, the water distribution system has deteriorated to such an extent that unaccounted for water is now estimated to amount to between 45% and 65% of water produced, a proportion that is likely to rise when pressure increases as new supplies are brought into operation later in 1988. New production and treatment schemes will bring supply into balance with demand for a brief period in 1990, after which new source development will be required. In Beira, where electric power is out for more than half the year on average, the water distribution system is in a worse condition end the sewerage system is blocked, causing a considerable health risk. In both cities, the municipal servic,-s are unable to cope with mounting quantities of solid waste. In summary, conditions are such that, of the two main transport corridor cities, which are the main potential earners of foreign exchange, Beira is scarcely habitable and Maputo is facing severe infrastructure and service deficiencies. The proposed project would address these issues with infrastructure rehabilitation programs (see para 2.02 (a) and (c)) and strengthening of cost recovery programs (para 2.07). 1.09 Nationalized Housing - Rental housing was nationalized in February, 1976, while owner occupied housing remained in private hands. A State Housing Agency (APIE) was set up to administer the nationalized housing stock, which consists of some 80,000 apartments - about a quarter of the urban housing stock. However, the notional rental of 2% of income charged by APIE has been quite inadequate to provide even the most rudimentary maintenance and in many buildings the electrical systems, plumbing and sewerage are falling to pieces, some being uninhabitable and posing serious health hazards. In April, 1988, Government announced substantial increases in rents (about 2-5 times their previous levels) to at least cover maintenance costs. While this action begins to solve the problem of inadequate maiatenance, it also raises the practical issues of finding alternative accomodation fnr the thousands of families who are now unable to afford the rent of their existing apartment and will need to relocate. The housing rehabilitation schemes and relocation schemes proposed under the project (see paras 2.02 (b) and 2.09) are intended to demonstrate a means of addressing this issue, while progress towards the development of a national housing strategy, including policies for cost recovery and rehabilitation and maintenance of the public sector housing stock, would be reviewed annually by GOM and IDA during project implementation. During negotiations, the Government provided assurances that it would: (a) not later than June 30, 1989; and (b) not later than June 30, of each year, thereafter, review jointly with the Association progress achieved in designing and adopting a National Housing Strategy, including policies of rehabilitation and maintenance of the existing public sector housing stock and the achievement of full cost recovery (para 4.01). 1.10 The low level of new residential construction during the last decade, together with a high rate of urban population growth, are creating a large urban housing shortage. To keep pace with demand, increased supply of sites and services together with assistance to self-help housing and the provision of credit facilities will be necessary including plot development on a cost-recovery basis, as an alternative to subsidized housing provided by the State. In this respect, the development of realistic and affordable standards in terms of infrastructure, plot sizes and housing is critical. 1.11 Local Resource Mobilization - There is an urgent need to generate municipal revenues to finance urban infrastructure and services. A large proportion of local government expenditures are financed from transfers from central government. There are no substantial land or property taxes and no municipal taxes, although local governments are empowered to levy charges for some services, theae user charges are very low and have not beGn adjusted in many years. More effective local resource mobilization is envisaged as a result of the on-going IDA assisted lo-al government finance and administration study (see para 1.12). 1.12 Weak Institutions - After independence, the former Camaras (municipal councils) were abolished, as were most forms of local taxation, and the lot 1 authorities, the Conselhos Executivos das Cidades (CECs), became larg .y dependent on the Central Government. This situation is now beginning to be reversed; in 1983 the Fourth Congress condemned over- centralisation and called for a greater role for the private sector in the nation's economic development. In 1986 the Ministry of State Administration was created, with one of its three areas of responsibility being to develop local administration, and a special task force was established to review the structure of the Cihy Government of Maputo. Most recently, in December 1987, the Government requested World Bank assistance in t%e restructuring of local government administration and finance, thus providing an opportunity to revitalise local institutions. A Bank assisted study of local government administration and finance is underway and is expected to be completed by August 1988. It will be followed by a seminar on local government operations, management and finance in September, 1988. - 5 - During negotiations the Government provided assurances that the action plan based on the recommendations of the study to strengthen local government institution- and finances would be sent to IDA by March 31, 1989 and reviewed with IDA by June 30, 1989. Progress in implementation would be reviewed annually thereafter. The strengthening of local government bodies would be aided by technical assistance and training to be prov4ded under the project through the center for Urban Management (see para 2.02 (e) (ii) and Annex 6). 1.13 Financial Constraints - Lack of financial resources, particularly foreign exchange, has frequently prevented local institutions from purchasing spares and equipment needed to keep services funetioning. For example,in Maputo and Beira the municipal workshops are devoid of spare parts. The transit trade that flows through the ports of Maputo, Beira and Nacala is expected to become a growing source of foreign exchange, as it was in the past, part of which needs to be reserved for the essential urban services of these cities, on which the efficiency of this transit trade depends. International Aid 1.14 With the proposed project, IDA would be one of several donors providing assistance to rehabilitate Mozambique's key urban centers servicing the transit trade: Maputo, Beira and Nacala. Precise figures on the amount of these investments are not readily available, but they can be estimated to have amounted to about US$30 - 40 million per year over the past few years, almost entirely in the water, sewerage and drainage sector and mostly in Maputo. Extensive drainage works and rehabilitation of the sewerage network in Maputo have been assisted by the Netherlands, while water production and transmission mains have been fina-,ced by Italy and the African Developmeni R-u 'AfDB). In Beira, rehabilitation of the water treatment plant and pumping stations are being financed by the Italian Government and rehabilitttion of sewage pumping stations by the Netherlands. Finland is financing the rehabilitation of the water distribution network in Beira (see para 2.04) and, with the Netherlands, the provision of technical assistance to the water company (AdaB). Finland is also assisting in the rehebilitation of the city of Nacala and, together with IDA, will be sponsoring the local government seminar in September, 1988. One of the aims of the proposed project is to complete the rehabilitation of the remaining essential parts of the infrastructure network in Maputo and Beira and develop a programmatic approach to future rehabilitation and maintenance efforts. To achieve this, improved donor coordination is essential, and the project envisages exchange of information between Government and IDA and the calling of donor meetings as needed. Sector Objectives 1.15 The Government's main objectives for the sector are: (a) to rehabilitate the existing infrastructure in ordez to prsserve and make full use of investments that have been made in the past; - 6 - (b) to strengthen local government particularly the planaing, operation and maintenance of urban services by municipalities, which are to be reinforced and made more fiscally independent; (c) to reduce subsidies for housing and municipal services through the establishment of cost based pricing systems and encouragement of private ownership; (d) to extend affordable services to low income areas hitherto unserviced; and (e) stimulate the growth of small and micro-enterprises to create productive employment. C. Rationale for Bank Group Involvement 1.16 The Government of Mozambique has been working closely with IDA in developing and implementing its Economic Rehabilitation Program, for which two IDA credits have been provided and a third is under preparation. In support of these initiatives, IDA is also developing a program of project- based credits to strengthen the adjustment process. The intervention proposed under this project is an integral part of this process in that it would directly assist in offsetting some of the social costs encountered in the transitional phase of adjustment and at the same time improve the environment in the two key urban centers, creating conditions for broad- based economic development through rehabilitation of infrastructure and services and institutional strengthening, particularly of local government. These activities would coaplement existing and proposed IDA interventions in other sectors, including education, health, industry, transport and agriculture. The cost recovery aspects of the project, in conjunction with more affordable housing standards, are an important step towards more rational pricing of urban services. These, and the introduction of more effective user charges and possibly new local government taxes, will provide a significant impetus to local resource mobilisation. 1.17 IDA intervention is also appropriate to complement the investments of bilateral donors in the sector and to help ensure an overall coherency to sector development. Finally, IDA's extensive experience in the sector will provide technical support to GOM for the adoption of appropriate nd replicable solutions. -7- II. THE PROJECT A. Prolect Objectives 2.01 The primary objectives of the project are to assist Government in achieving its objectives (see para 1.15), i.e. to stem the deterioration in basic urban infrastructure and services and to mitigate the social costs of structural adjustment through the implementation of a program of urban rehabilitation and employment generation. This program would, through an integrated approach to infrastructure rehabilitation, employment generation and institutional development, aim to: (a) rehabilitate key elements of urban infrastructure and housing; (b) provide employment through labor-intensive construction methods and stimulation of small and micro-enterprises; (c) strengthen the local institutions responsible for provision and maintenance of urban infrastructure and services and the efforts towards becoming more financially independent through cost r.covery and stimulating local resource mobilization; and (d) support initiatives already being undertaken by the Government in cost recovery, institutional reform and new policy directions. In addition, the project is intended to complement a number of bilaterally supported investments already underway, and it incorporates other components to be carried out through parallel financing by other donors. B. Project Description 2.02 The project would include the following components: (a) Rehabilitation of Infrastructure (Annex 2): Rehabilitation and limited extensions of infrastructure systems in Maputo and Beira, including (i) roads -- resurfacing or reconstruction and maintenance of key primary roads in both cities plus, in Maputo, reconstruction of the Costa do Sol bridge and upgrading of the access road to the sites and services area; (ii) water, sewerage and storm drainage -- leak detection and emergency repairs of the secondary water distribution system and the extension of a water main to Mahotas and the sites and services area, including the associated distribution network, construction of storm drainage for a critical traffic circle (Praca 16 Junho) in Maputo, a study of the long-term sources of water for Maputo - 8 - of the long-term sources of water for Maputo and the rehabilitation of the water distribution network (to be parallel financed by Finland) and the main sewage collector and the secondary sewage system in Beira; and (iii) coastal protection -- priority repairs to erosion control groynes and sea walls and construction of some new groynes and sea walls in both cities. (b) Housing Rehabilitation (Annex 3): will be effected through inter-related solutions, including: (1) the completion of three unfinished highrise buildings in Maputo and one in Beira covering about 249 residential apartments and 26,OOC m2 of office space, most of which would be made available for rental in foreign currency; (2) the rehabilitation of 7 apartment complexes in Maputo (about 775 residential units) and 11 in Beira (about 220 apartments), which are currently in an advanced stage of deterioration due to lack of maintenance. Three hundred of the Maputo apartment units would be made available for rental in foreign currency; (3) new sites and services areas as well as infrastructure upgrading in existing low-income settlements, for about 2,285 plots ia four different locations in Maputo, and for about 1,500 plots in one location in Beira. The legal document assigning all project sites to MCA has been reviewed at negotiations. The Government of Finland will finance in Beira the provision of 1,150 serviced plots on the Inhamizua 1 site (1,000 of which would be provided with core houses and allocated to CFM workers), and the upgrading of infrastructures in the existing but only partly occupied Muchatazinha housing project (where most of the approximately 250 unoccupied plots would be provided with core houses and made available to CFM workers); (4) relocation, resettlement and integration of existing occupants: (i) households occupying apartments earmarked for rehabilitation and unable to afford the new rents (Para 1.09) will be relocated on sites and 6, -vices plots provided with core houses under the project. About 300 households in Maputo and 80 in Beira would be involved. Rental revenues in foreign currency from the building completion and rehabilitation sub- components would be used to cross-subsidize the core houses; (ii) about 25 squatter households to be displaced by the rehabilitation of the Praca de 16 Junho in Maputo will be resettled on sites and services plots provided under the project; (iii) about 90 existing dwellings on two of the town sites in Maputo and 300 households on the Beira site will be maintained on these sites and accomodated within the new site lay-outs. (c) Solid Waste Management (Annex 4): Upgrading of the solid waste management services of Maputo and Beira, including vehicles, equipment, spare parts and technical assistance and training for the garbage collection systems and municipal 9 vehicle and equipment maintenance workshops (to be parallel financed by Spain, see para 2.04). The approach to be adopted would include involvement of private sector cooperatives in the solid waste collection process. (d) Credit Lines (Annex 5): Provision of employment-generating credit programs in support of the project components, including: (i) assistance to small and micro-enterprises -- to finance equipment, spare parts, and working capital, as well as technical assistance, particularly for the construction related sectors; loans would be made available through the Banco Popular de Desenvolvimento (BPD) to micro- enterprises employing ten or less people (up to 50 people where building materials industries are concerned) on the BPD's current terms which range from 18-24% for up to to 5 years (a review of interest rate structures is currently underway). (ii) building materials credits -- for individuals or groups of families for rehabilitation of dwellings and construction of core units or pit latrines, in connection with the housing rehabilitation component (para 2.02 %b)). These loans would be made available through BPD to sites and services residents under existing terms, i.e. 25 years at a minimum of 9% interest (para 2.08). (e) Institutional Development and Project Administration (Annex 6): Funding for appropriate technical assistance and training to strengthen project execution capability, as well as to assist in strengthening local governments, would be provideds (i) to the Project Implementation Unit (PIU) in the Ministry of Construction and Water (MCA) and HABITAR, for project coordination, as well as for developing investment planning capacity; (ii) to the Ministry of State Administration (MAE) through the Direccao da Funcao Publics (DFP) for strengthening the Center for Urban Management for training local government officials; and (iii) to the Ministry of Labor (MT) for the Gabinete de Promocao de Emprego (GPE) and (iv) to the CECs in Maputo and Beira for institutional strengthening. Technical assistance for implementation and administration of all individual project components would be provided to each of the respective executing units (see para 3.01 for detailed description of project implementation arrangements). 2.03 In all the components, the use of labour intensive methods of implementation, operation and maintenance would be emphasized in order to create the maximum amount of employment consistent with sound engineering practices and the overall financial and management constraints. In addition, the proposed housing rehabilitation scheme (pars 2.02 (b) above) is intended to test an approach to solving the problem of the deteriorating stock of apartments throughout the country, through financially viable rehabilitation schemes coupled with arrangements for improved maintenance and periodic reviews by GOM and IDA of levels of rents and the adequacy of maintenance provisitas. - 10 - C. Project Costs and Financing Plan Project Costs 2.04 The total cost of the project is estimated at US$83.8 million equivalent, with a foreign exchange component of at US$68.6 million equivalent. A summary of project costs and the financing plan is shown in Table 2.1, below (and in more detail in Annex 7). Base costs have been estimated in Meticais in June 1988 prices, and converted to US Dollars at US$1 - Mt 450. Physical contingencies have been estimated at 10% for all items except institutional development and project management. Price contingencies have been calculated for all costs on the basis of estimated foreign price increases of 5.6% for 1988, 5.4% for 1989, and 1% a year thereafter, based on the region's best estimates for the period of project execution. The project would be implemented over a six year period ending December 31, 1994 (see para 3.07). Financing Plan 2.05 The financing plan for the project is shown in Table 2.1. An IDA credit of US$60 million would finance 72% of total project costs. The credit would be on standard IDA terms for 40 years with a 10 year grace period. GOM would directly contribute US$6 million equivalent, or 7% of project costs. The project is being closely coordinated with the Government of Finland which undertook the study of infrastructure in Beira and is planning to parallel finance the water distribution rehabilitation (US$6.1 million, base costs) and low income housing components (US$6.2 million, base costs) in Beira. Spain will parallel finance equipment and technical assistance for solid waste management in Maputo (US$3.9 million, base costs) as part of the project under a twinning arrangement between the cities of Barcelona and Maputo. 2.06 Flow of Funds. The Government of Mozambique would pass on the IDA credit to the Ministries responsible for project implementation in the form f budget allocations. D. Cost Recovery 2.07 Government policy is to move toward full cost recovery wherever possible and this policy has been carried out in a number of recent actions, including the removal of food subsidies, increases in rents and water tariffs. The project would assist the Government in making progress towards this goal through strengthening cost recovery measures in infrastructure, housing and urban services. About 63% of project costs would be recovered directly from beneficiaries for water and sewerage rehabilitation, housing rehabilitation and lines of credit, while recovery of a further 30% of costs, mainly for roads and drainage and municipal services, would fall within the purview of local taxes and fees which will be established through the ongoing local government finance and administration study, the implementation of which would be reviewed by GOM and IDA. Given the precarious economic situation of Mozambique and the - 11 - Urba Rehabilitatio Project Summarg Project Costs ad Finandng Plea PROJEL. COMPONENTS LOCAL FOREIGN TOTAL ---------US Million-------- I Ifrastructure Rehabilitatio 7.00 24.30 31.30 II Heasing Rehabilitatioe 4.20 19.00 23.20 III Solid Waste Ha.agemat 0.80 3.30 4.10 IV Limes of Credit 0.00 4.90 4.90 V institutismal Develepaemt 0.10 3.30 3.40 VI Project Admisistratios 0.40 2.70 3.10 BASE COST 12.50 57.50 70.00 Physical Contingencies 1.20 5.00 6.20 Price Contingencies 1.40 6.20 7.60 TOTAL COST 15.10 68.70 83.80 FINANCING PLAN LOCAL FOREIGN TOTAL -------$US Million------ Government 6.00 0.00 6.00 IDA 6.00 54.00 60.00 Parelell Financing, Finnida & Spain 3.10 14.70 17.80 TOTAL 15.10 68.7 83.80 IDA DISBURSEMENTS -------------------1US$ million-------------- IDA Fiacal Year 1989 1990 1991 1992 1993 1994 1995 Annual Amount 1.00 7.00 14.00 16.00 14.00 6.00 2.00 Cummulative 1.00 8.00 22.00 38.00 52.00 58.00 60.00 % 1eTotal 1.7 13.3 36.7 63.3 86.7 96.7 100 - 12 - widespread price increases associated with the economic rehabilitation program, socio-economic surveys are being undertaken to determine the impact of recent price increases on the target groups. During negotiations, the Government provided assurances that the results of these surveys would be furnished to IDA by March 31, 1988 and be reviewed with IDA by June 30, 1989, when an action plan to address their findings and a timetable would be drawn up. 2.08 The achievement of full cost recovery for maintenance and replacement of buildings would be reviewed by GOM and IDA as part of the annual review the national of housing strategy (pars 1.09). Each of the provincial capital cities has a separate water utility which, for administrative and financial purpose, comes under the. control of the Direcao Nacional de Aguas (DNA), which determines the control of the national water tariff. The national tariff for water supply is set in such a way as to yield a surlius to Agua de Maputo (AdeM) which is used to cross-subsidize the smaller towns (the 15% sanitation surcharge, on the other hand, is insufficient to cover the cost of the service). Agua da Beira (AdaB) is unable to provide an adequate service and does not cover its costs. AdeM and AdaB are receiving substantial technical assistance from bilateral donors which should help to improve their operational and financial performance (including their accounting systems - see Annex 2). Both water and sanitation tariffs would be studied under the project and would be reviewed by GOM and IDA with the objective of enabling the water and sanitation agencies in Maputo and Beira to achieve financial viability by 1993. The proposed cost recovery mechanisms, on which the Government provided assurances at negotiations, are outlined below: (a) sites and services: on-site project costs would be recovered directly from beneficiaries through plot allocation fees; recovery of off-site electrical infrastructure costs is included in the existing tariffs of the utility company, while recovery of off-site water infrastructure would be the subject of the tariff study. (b) cost of completed buildings, rehabilitated apartments and core houses would be recovered through rental or lease purchase of the units, in local or foreign currency; the annual review of housing strategy would include a review of the adequacy of these charges to recover costs (para 1.09); (c) water and sewerage and storm drainage investments and maintenance would be recovered through user charges and fees. During negotiations, the Government provided assurances that a study of water and sanitation tariffs would be completed by December 31, 1989 and reviewed with IDA by June 30, 1990, w1en an action plan to implement its findings would be agreed upon and targets set for the water and sanitation agencies in Maputo and Beira to achieve financial viability by FY-1993. - 13 - (d) recovery of the costs of road and storm drainage investments and maintenance would be through taxes and user charges to be determined as a result of the study to strengthen local government institutions and finances (para 1.12); (e) garbage collection operations and maintenance would be recovered through the introduction of local government taxes, which are being reviewed (see para 1.12); M building materials credits and small and micro-enterprise credits, would be recovered from beneficiaries through the intermediary banking institution, Banco Popular de Desenvolvimento (BPD). Existing rates of interest applied by BPD would be applicable to the small and micro- enterprise credits, that is 18-24% per annum, while a minimum rate of 9% per annum would be applicable for building materials credits (see Annex 5). During the current period of structural adjustment, inflation is high in Mozambique (estimated at 35% in 1988) as prices adjust, but is expected to reduce in the future. Interest rates on 9he lines of credit would be reviewed at the annual project reviews to ensure that they are consistant with national credit policies. E. Relocation and Resettlement 2.09 As indicated in para 1.09, Mozambique faces a serious issue in relation to maintenance of the public sector housing stock. As a first step towards resolving this problem, the Government has raised rents very substantially effective from April, 1988, changing the basis of assessment from a percentage of income to floor area and location of the dwelling (thus the amount of the increase varies according to the income of the inhabitant and the floor area of the house, but on average may range between 100% and 4002). Although a more appropriate method of assessment, the change is likely to lead to (a) a large relocation of population in the cities, as people move to smaller, less well located dwellings that they can afford; and (b) greater density as families double up to be able to afford the rent. 2.10 The housing rehabilitation components are intended to serve as a pilot means of addressing this issue through the provision of alternative low-income housing suitably located in central areas for those unable to afford existing rents. In the first phase of the project, 300 core units would be built in inner city locations in Maputo and 80 in Beira, which would then be used to house families moved from decaying apartment blocks which are to be rehabilitated. Surveys carried out amongst the residents of apartment blocks to be rehabilitated show that over 60% of them would prefer to move to the more traditional ground level core unit to be provided under the project, which would offer the possibility of hcme ownership. - 14 - 2.11 To make such a scheme replicable, a proportion of the 990 apartments to be rehabilitated (about one third) would be rented in hard currency at rates that are very much higher (US$3.60 per m2 per month) than those applicable in Meticais (US$0.2 per m2 per month). This would enable the scheme to benef't from the great demand for housing from expatriates and others with the means to pay in hard currency. At the same time, it would contribute to resolving the critical shortage of housing for technical assistance facing all aid projects in Mozambique. The surplus generated by this arrangement would be used to cross-subsidize about two- thirds of the cost of housing provided for the lowest income groups to be relocated from apartments. It would also be used to ensure that the buildings are adequately maintained in future and to replicate the scheme on a wider basis (Annex 3 describes in more detail the concepts underlying the housing rehabilitation component and the modalities of its implementation). The resettlement plan was reviewed by IDA at negotiations, when assurances from the Government were obtained concerning its implementation (para 4.01 (i)). Assurances were also obtained that Government would enforce the agreement by the State Housing Agency (APIE) to rent a proportion of rehabilitated apartments in hard currency, which was also reviewed at negotiations. F. Employment Generation 2.12 About 35,000 man years of employment would be supported directly and indirectly by the Troject over a six year period, at an average cost per job of about US$1,800 equivalent. Direct employment is estimated at about 24,000 man years or 4,000 jobs in construction over the six years. The infrastructure rehabilitation components would generate about 11,700 man years of employment during the construction period and then would require about 500 permanent jobs in the city council of Beira and 1,100 In that of Maputo, for the ongoing maintenance of the rehabilitated infrastructure systems. The housing rehabilitation components would require about 8,500 man years for the completion of buildings, the rehabilitation of apartments and the construction of the serviced plots. In addition, about 2,000 man years of employment would be generated through the use of the materials loans and micro-enterprise credits. Only about 200 additional jobs would be added in garbage collection as staff of the respective departments are largely already in place; their productivity, however, would be significantly increased through the introduction of appropriate equipment and vehicles. G. Justification, Benefits and Risks 2.13 The expenditure of relatively small amounts on infrastructure rehabilitation will save the need for much larger future investments in reconstruction and can be expected to yield relatively high economic rates of return. The investments in Beira are essential to the development of the Beira Transport Corridor, which will be one of the country's main foreign exchange earners, while much of the investment in Maputo will also assist in foreign exchange earnings or savings. Direct benefits to households include improved water, sanitation, shelter and transportation. - 15 - There would be significant decreases in working days lost for health reasons, and reductions in health costs, as well as time savings associated with improved transportation. From an environmental point of view, the improved sanitation of low income housing areas and of high-rise buildings, as well as better solid waste management and coastal erosion protection are considered to be direct benefits to the urban environment. 2.14 The components for which the ERR was calculated consist primarily of infrastructure and housing rehabilitation and amount to 38% and 33% respectively of total project costs. Their average ERRs are estimated at 38% and 40% respectively (for details see Annex 8). No estimate is available of the benefits from the lines of credit to small and micro- enterprises, but the additional employment likely to be generated is considered to be significant (see para 2.12 above). 2.15 Risks are that the project may exceed the implementing capacity of the executing agencies and that the security situation may impede the completion of some project components. The project's restriction to the two principal cities is intended to minimize the risks associated with limited implementation capacity and the security situation. The Government's demonstrated strong commitment to the objectives and approach proposed and the careful consideration given to the appropriate level and type of implementation assistance to be provided will also help to minimize these risks. Experience during project preparation has shown that Government has a highly competent management team in place and this same team will be strengthened with technical assistance, including a project coordinator, procurement adviser and financial controller, tc. ensure timely implementation of the project (see para 3.01 and Annex 6). III. PROJECT IMPLEMENTATION A. Institutional Arrangements 3.01 Responsibility for implementation of most of the project would reside with the Ministry of Construction and Water (MCA), with small components being the responsibility of the Mi:sistry of State Administration (MAE) and the Ministry of Labour (MT). Within MCA, the overall policy and strategic planning will remain with each of MCA's National Directorates involved, while a Project Implementation Unit (PIU) has been established within MCA for project coordination (see proposed Organization Chart 3.1). The Director of the PIU will report directly to the Minister of Construction and Water under the advise of MCA's Steering Committee, which 4 made up of the National Directors of the Economy and Construction Directorate (DEC), the National Water Directorate (DNA) and the National Roads and Bridges Directorate (DNEP'. The legal instrument establishing the PIU was reviewed at negotiations. Through technical assistance and a - 16 - MOZAMBIOUE Urban Rehabilitation Project CHART 3.1 PromW Prolect Impleentation Units OnizatiM I Minister of Onstruction and Wdwe Steering Committea DEC, DNEP, DIA Pojet laplentation "unit Directo Procurement Project Advisor Coordinatr Ctrell _Proges Pr ss smznt PROHABITA Director (MCA) HABITAR Director Project Financial Coordinator Controller Field Implementation Field implementation Team MAPUTO Team BEIRA Positions to be filled po to crdit efectinuss are shown In bedracu. - 17 - limited number of internationally recruited consultants, the financial control and construction cost control would be provided along with supervision of procurement, bidding and contracting activities as shown in the draft organization chart of the PIU. The appointment of key staff of the PIU is a condition of credit effectiveness. DNEP will be responsible for road rehabilitation and the DNA for drainage rehabilitation and, through the Maputo Water Company (AdeM), for the water supply component in Maputo, and through the Beira Water Company (AdaB) for the water and sewerage components in Beira. DNEP would be responsible for the emergency erosion control component. The rehabilitation of the apartments and the completion of buildings would be the responsibility of the Gabinete de Programas de Habitacao (PROHABITA), the Housing Planning Department of DEC, within which a Housing Management and Supervision Unit (HABITAR) has been established to implement these components of the project. The sites and services upgrading and core units and building materials components would be the responsibility of the City Councils' (CECs) Departments of Construction and Urbanization (DCU) with the assistance of HABITAR. Legal agreements between MCA and the CECs and between DNA and the water companies, specifying their mutual obligations for project implementation, were reviewed at negotiations. The funds for small and micro-enterprises and the building materials credits components would be channeled through the state-owned Banco Popular de Desenvolvimento (BPD) to eligible applicants. In accordance with national banking regulationa, financial agreements would be entered into between BPD and MCA. for the building materials credits and between BPD and MT's Gabinete de Promocao de Emprego (GPE) for small and micro-enterprise credits. Execution of these agreements would be a condition of Credit effectiveness (para 4.02). IDA approval of the model Loan Agreements to be entered into by BPD and eligible beneficiaries in accordance with the eligibility criteria to be included in the fitancial agreements would be a condition of disbursement for thia component (para 4.03). a condition of credit effectiveness. 3.02 To maximize the employment generated by the project, MCA's Steering Committee and the PIU would also monitor the manpower requirements of each of the civil works components and ensure that the works maintain the most appropriate labor-intensive construction methods, as proposed in the engineering documents. A careful accounting of employment generation would be maintained during proje-at implementation through quarterly employment budgets and reports as part of PIU normal quarterly project reporting responsibilities. B. Action Plan 3.03 To achieve the immediate objectives of the rehabilitation of the two major cities, the project implementation schedule of most of the civil works Is planned over a four-year period with some of the sites ani services and upgrading schemes, lines of credit, studies and policy measures extending over a further two years. The contract approval procedures have been carefully cnalyzed to identify critical steps to reduce the processing time to minimum achievable time frames. The PIU - 18 - within MCA would monitor the progress on each component and coordinate the overall project. A series of action plans have been developed for each component which would be updated on a quarterly basis. Work schedules based on these plans would be overlayed to determine the critical path for the implemer-tation of the project as follows: Detailed Engineering Execut!on Phasing Documentation A Bidding of Works Plan I. Infrastructure Rehab. - Utilities 4/88 - 8/88 10/88 - 12/96 Plan II. Infrastructure Rehab. - Roads 8/88 - 0/88 12/88 - 0/91 Plan III. Housing Rehab. a) APT Rehab. 4/88 - 9/88 11/88 - 3/91 b) upgrading, S & S & Core Units 4/88 - 6/88 9/88 - 9/94 c) completion of bldg. 4/88 - 6/88 10/88 - 9/96 Plan IV Municipal Service Support 4/88 - 6/88 10/88 - 9/91 3.04 Plan I and II, Infrastructure Rehabilitation Works, would be phased to ensure coordination of the rehabilitation of the utility networks and their installation prior to paving and surfacing drainage works. 3.05 Plan III, Housing Rehabilitation. The success of the housing rehabilitation of the low-income apartment buildings depends on an early start of the urban infill sites and services with core units. About 300 families of the 1,000 occupying the Maputo apartments to be rehabilitated will not be able to pay the new rent and will need the alternative accommodation referred to above. The Habitar team will coordinate these activities with the CECs. 3.06 Early Project effectiveness is expected for October 1988, and the completion date for the project would be December 1994, with a closing date one year thereafter. The six year project implementation period compares with seven years for similar projects in the region and is considered realistic in view of the close attention paid to project management and the preparation of tightly defined action plans. C. Procurement 3.07 All goods and services to be financed by IDA will be procured in accordance with the Bank's procurement guidelines. Table 3.1 summarizes the procurement procedures to be applied to the various components. The rehabilitation of the infrastructure - major roads, water, sanitary sewer and drainage networks and marine structures for coastal erosion control, (US$27.7 million) as well as the completion of buildings (US$9.5 million) would beprocured through international competitive bidding (ICB). The total ICB for the project would be US$41.2 million of which US$37.1 million would be disbursed from the IDA credit. Parallel financing by other donors would provide US$17.8 million to finance parts of the water networks, sites and services and solid waste management using procurement procedures from each donor country. - 19 - TABLE 3. 1 Mm2AMBIQUE Urban Rebol1tatie Prøjeet PROCUREMENT ARRANGEMENTS in US$ million Components ICs LCB Locul Parallel Other Total Shoppino Financing Procedus Cost a) latrartn er@skslltts 1. Roed & Drulnhge Rehabilitatlon 13.99 13.99 12.59 12.59 2. Water & Severage Rehabilitation 13.70 6.72 (a) 20.42 12.33 12.33 3. Emergency Erosiin Control 3.05 3.05 2.75 2.75 b) Hamstog RehbMltation I. Rehøb. Lov Incone Apartnents 6.21 0.71 6.92 5.59 0.64 6.23 2. Upgrading & Sites & Service 4.39 0.69 6.72 (b) 11..80 3.95 0.62 4.57 3. Completion of Butidings 9.52 9.52 8.57 0.57 s) Seitd-Wests Manøageet 1.0erbege Collecton Equ!p. Maputo 4.35 (c) 4.55 2. Garbage Collection Equi p. Bel re 0.97 0.97 0.87 0.87 d) Lines f Crodit 1. Sm1l & Micro Enterprise 3.32 3.32 2.99 2.99 2. iousing Improvement/ Constr. 2.11 2.11 1.90 1.90 e) Iastitutlusel Dvelp.et 1. TA. & Tr. and Project Management 1.15 1.15 1.15 1.15 2. Studies and Englneering(incl. PPF) 2.75 2.75 2.75 2.75 f) Projøet Adodotstratie 1. Vehicles and Equipment 2.80 2.80 2.80 2.80 2.Operating Costa 0.51 0.51 0.51 0.51 Totals 44.03 10,60 6.83 17.79 4.41 83.66 Amet te bo disbor~d bg IRD 39.91 9.54 6.15 0.00 4.41 60.00 (a) end (b) to be co-finnced by FINNIDA; (c) to beco-financed by Spaln. - 20 - 3.08 Because there are geographically scattered, of small size and involve labor intensive works, the housing rehabilitation contracts (US$5.59 million) will be packaged into 6 lots for Maputo and 3 lots in Beira for local competitive bidding (LCB). Since work can not start until the occupants are temporarily relocated 3- core houses (which are the first priority), the construction stat .be staggered over three years. This process precludes ICB prot s. The average value of these contract lots is US$660,000 while the average value per site is US$165,000. Similar reasons would apply to limiting the upgrading and sites and services contracts (US$3.95 million) to LCB. The t.'l LCB would be US$10.6 million of which US$9.5 million would be disbursed from the IDA credit. There remains a number of small tasks such as flushing the sanitary networks out to the street sewers and cleaning of water supply systems which would be packaged for local shopping (LS) (US$0.7 million) along with small drainage works in the upgrading and site development component (US$0.7 million). The average value of these small works would be about US$20,000 and works and items or groups of items estimated to cost less than the equivalent of US$50,000 per contract, up to an aggregate amount not to exceed US$1.5 million would be procured under contracts awarded on the basis of comparison of price quotations solicited from a list of at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to IDA. In addition, the goods and materials to be procured under the lines of credit, with an average credit value of about US$1,000 would also be procured through Local Shopping (LS) procedures up to an aggregate amount not to exceed US$5.0 million. The total LS would be US$6.8 million of which US$6.2 million would be disbursed from the IDA credit. 3.09 Draft standard LCB and LS contracts were reviewed at negotiations and referred to the Bank's Procurement Unit for detailed review. The equipment, vehicles and imported materials would be packaged into lots procured through ICB procedures. Lccal building materials costing less ths: US$50,000 per component would be procured through LCB procedure. However, the aggregate amount so procured would not exceed US$1.5 million. Consultants would be contracted locally and internationally in accordance with Bank guidelines. Quarterly updating of unit costs and materials and equipment will be maintained along with close and continued on-site supervision which will facilitate timely procurement. MCA will have the responsibility for having contracts reviewed by its existing Bid Evaluation Committee. The Ministry of Finance and the Bank of Mozambique will approve the financial terms of contracts after vetting by PIU. The first LCB contract would be reviewed and cleared by IDA to ensure compliance with the Bank's procurement guidelines. For all contracts with an estimated value of US$750,000 or more, IDA will review and approve procurement documents, specifications and awards prior to the signing of the contracts. Other contracts will be subject to post award review by IDA supervision missions. Assurances on procurement arrangements were obtained from Government at negotiations. - 21 - D. Disbursement 3.10 Disbursements by IDA at the rate of 70% would be made against eligible local project expenditures net of taxes and duties for civil works, materials and equipment. Disbursements would be 100% against eligible foreign expenditures. Amounts to be disbursed by IDA are indicated in Table 3.2 Disbursement Arrangements. Disbursement for consultant services, training, studies and surveys would be made at the rate of 100% of total expenditures. Disbursements would be made against statements of expenditures (SOEs' for the following items: (a) contracts for works and goods valued at less than US$250,000 equivalent; (b) contracts for consultants' services valued at less than US$100,000 equivalent; (c) local training programs; (d) operating costs; and (e) lines of credit. Documentation in support of the SOEs would be retained by the executing agencies for inspection by IDA's supervision missions. If the experience in the first year of project implementation confirms that SOEs are being used correctly, IDA could consider raising the SOE limit to match the prior review limit. All other disbursements would be fully documented. 3.11 In order to help accelerate project implementation and Credit disbursements, a single special account would be established to serve all project components. This account would be opened in a commercial bank, and operated through the Bank of Mozambique (BM) in accordance with existing Government regulations which require that all foreign currency payments be authorized through BM. The Financial Controller in the PIU would approve all payments from the Special Account and would be made responsible for aggregation of documents, reconciliation of bank statements as required by IDA and preparation of replenishment applications for signature by officials designated by BM. Assurances on disbursement arrangements were obtained from the Government at negotiations. E. Accounting and Auditing 3.12 The PIU would maintain consolidated accounts for the entire project. The responsibility of the detailed accounting for roads would be with the DNEP and for water and sewers with Aguas de Maputo (AdeM) and Agua da Beira (AdaB). HABITAR would maintain accounts for all housing-related and resettlement plan accounts and GPE would maintain accounts for the lines of credit to small and micro-enterprises. For urban services, the DSU of the CECs of Maputo and Beira would maintain detailed accounts. The PIU would be required to recruit a qualified financial analyst fcr the post of Financial Controller with an accounting support staff that would prepare consolidated expenditure accounts, quarterly reports, annual financial plans and internal audits. The appointment of PIU's key staff (Director, Project Coordinator, Procurement Advisor and Financial Controller), would be a condition of Credit effectiveness (para 4.02). 3.13 The Project Coordinator of the PIU would supervise and monitor the systems of cost control, critical path and monitoring. Technical assistance and consulting services would be provided under the project to the implementing and operating agencies - DEC, DNA, DNEP, AdeM, AdaB, the - 22 - Mraanelqut Urbes Rehailitation Project Disbursemat Arreagmets The IDA credit will be disbursed on the following besis: Categpr Item Aws t Dishrsemeat (US$ million) 1 Civil Works a) Infrastructure Rehabilitation, 19.70 100% of foreign and 70% of Extension and Miantenance, including local expenditures. labor, materials and tools for works b) Coastal Protection Works 2.20 100% of foreign and 70% of local expenditures. c) High and Lov Income 11-70 100% of foreign and 70% of ApartmentRehabilitation and local expenditures. Building Completion d) Upgrading and Sites & Services 3.50 100% of foreign and 70% of local expenditures. 2 Lime of Credit a) For Home Improvement and 1.80 100% of foreign and 70% of Construction local expenditures. b) For Small & Micro Enterprise 2.60 100% of foreign expenditures. 3 Vehicles, Equi psnt, 2.80 100% of foreign and 70% of Office Equipment, Supplies local expenditures. and Spare Parts 4 Cowseltet Services, 6.10 100% Training, Studies, and Surveys. S Operatiug Costs 2.10 100% of local expenditures. 6 PPF Refend 1.50 Amiunt Due 7 Usilloted 6.00 Tetal 60.00 - 23 - DSUs and MAE (DFP) and MT (GPE). Short-term technical assistance would also be made available at the end of each fiscal year to ensure that project accounts are in order, that the financial statements suitable for auditing are drawn up, and that the project is audited by independent auditors acceptable to IDA. During negotiations, the Government provided assurances that audited financial statements acceptable to IDA would be submitted to IDA within six months of the end of each financial year. Statements of expenditures (SOEs) would be included in the audit and specifically addressed in the audit report. 3.14 Quarterly Reporting. In addition to their annual accounting and audit reporting responsibilities, the PIU of MCA would prepare quarterly progress reports which shall include budget reports for each component (including employment budgets) on actual and projected expenditures and disbursement categories. These reports would be due within one month of the close of each quarter. F. Technical Assistance and Consulting Services 3.15 Assistance would be provided under each of the project components (see Estimated Cost Table Annex 7, Page 1), in order to accomplish the following: (a) strengthen the capacity of implementing agencies to execute the project and to provide for on-going maintenance thereafter, such as in the case of the road rehabilitation, water rehabilitation and solid waste management components; (b) provide a project administration capability, were there is none, within the existing institutional structure, such as in the case of the PIU and HABITAR; and (c) for developing the institutional capacity in areas related to, but not directly involving implementation, such as in the case of development planning in DEC and land registration or management of housing in ",oth the city councils of Maputo and Beira. 3.16 About 320 man months of assistance would be required for consultants to assist in the detailed final design and contract documentation, and mainly, in contract supervision of the civil works components. In addition, about 140 man months of technical assistance would be provided to improve and manage project financing, budgetary, accounting, auditing, and reporting activities. The cost of technical assistance and consulting services, as well as that of the related equipment and operating expenses are shown in Annex 6. The Table also shows where and what type of technical assistance or other consulting services are provided. In view of the shortage of housing for expatriate technical assistance, care has been taken to ensure that housing will be available when needed under the project. The agreement of the State Housing Agency (APIE) to make this housing available was presented at negotiations (when the Government provided assurances concerning its implementation. - 24 - IV. AGREEMENTS, CONDITIONS AND RECOMMENDATIONS A. Agreements and Conditions 4.01 During negotiations assurances were obtained from the Government on the following matters: (a) an action plan based on the recommendations of the study to strengthen local government institutions and finances would be sent to IDA by March 31, 1989 and reviewed with IDA by June 30t 1981, vhen a timetablc for implementation of the recommendations, including cost recovery mechanisms, would be agreed. Progress on implementing the action plan to strengthen local government bodies would be reviewed with IDA annually thereafter under the proposed project (para 1.12); (b) The on-going socio-economic sample surveys under the building rehabilitation component to assess the impact of recent price increases, should be sent to IDA by March 31, 1989 and be reviewed with IDA by June 30, 1989, when an action plan to address their findings would be drawn up (para 2.07); (c) A study of water and sanitation tariffs would be completed by December 31, 1989 and reviewed with IDA by June 30, 1990 when an action plan to address its findings would be agreed upon and targets set for the water and sanitation agencies in Maputo and Beira to achieve financial viability by FY-1993 (para 2.08). (d) GOM to review with IDA progress on the development of a housing strategy by June 30, 1989 and annually thereafter with the objective of achieving full cost recovery for public sector housing. These reviews to include policies for rehabilitation and maintenance of the existing public sector housing stock (para 1.09); (e) cost recovery arrangements for project components (paras 2.06 - 2.08); (f) the institutional arrangements for project implementation and the action plans, including the timing of appointment of key staff to the PIU and the housing units (paras 3.01 - 3.06); (g) employment of technical assistance and consulting services, including provision of counterpart staff (paras 3.15 - 3.16); (h) provision of housing for project consultants (para 3.16); and (i) implementation of the resettlement plan for persons to be relocated under the project (para 2.11). - 25 - 4.02 Conditions of effectiveness would be: (a) the execution of the financial agreements between BPD and MCA and between BPD and MT's GPE (pare 3.01); and (b) appointment of key staff to the PIU (paras 3.01 and 3.12). 4.03 Condition of Disbursement would be IDA approval of the model loan agreements to be used under the lines of credit for small and micro- enterprises and for building materials loans (para 3.01). B. Recommendations 4.04 On the basis of the above actions and agreements, the proposed project would be suitable for an IDA credit of US$60 million equivalent on standard terms. AF6IN June, 1988 - 26 - ANNEX 1 Page 1 of 3 MOZAMBIQUE URBAN REHABILITATION PROJECT SELECTED DOCUMENTS AVAILABLE ON THE PROJECT FILE - Reports on Urban Infrastructure, Housing and Municipal Services in Beira by Plancenter of Finland, October 1987 (23 volumes). - Engineering and Economic Feasibility reports on roads in Maputo and Beira by Roughton and Partners, February and April 1988. - Inception Report and Detailed Engineering Report, on Maputo Water Distribution Extension and Rehabilitation and Report on Maputo Control Erosion by Sir M. MacDonald and Partners, January and March 1988. - First phase viability study on building rehabilitation and completion by Bratex, January 1988, plus detailed engineering studies for each building, March 1988. - Feasibility reports and Final Designs of Beira Sewerage Rehabilitation, Beira Control Erosion and Drainage of the Praca 16 Junho in Maputo by DHV, March 1988. - Feasibility reports on the Laulane-Mahotas (Maputo) sites and services component by UNCHS-Habitat, January and March 1988. - Preliminary report on the Inhamuize (Beira) sites and services component by Comissao Provincial do Planeamento Fisico, December 1987. - Reports on small scale enterprises in Maputo and Beira by Fion de Vletter, February and March 1988. - Projetos de Ceramicas da Maputo by MCA, February 1988. - Extracts from the Constitution of the Popular Republic of Mozambique. - Lei de Terras (effective as of September 25, 1979), with introduction and explanatory notes, in 4a Sessao, Assembleia Popular, Documentos No.1. - Lei do Arrendamento, with introduction and explanatory notes, in: 4e Sessao, Assembleia Popular, Documentos No.3. - 27 - ANNEX 1 Page 2 of 3 - Lei das Cooperativas, No.9/79 de 10 de Julho, in: 5& Sessao, Assembleia Popular, Documentos, No.1. - Estatuto do Ministerio da Construcao e Aguas, Diploma Ministerial in: Boletim da Republica, 21 de Janeiro 1987. - Decreto No.24/87 de 27 de Outubro; determinacao da renda dos imoveis que constituem o Parque Imobiliario do Estado ins Boletim da Republica, 30 de Outubro de 1987. (With explanatory note). - la Reuniao Nacional sobre cidades e bairros comunais, Doc. No.1; Resolucao Geral, 1979. - la Reuniao Nacional sobre cidades e bairros comunais, Doc. No.3: Resolucao sobre as zonas verdes, 1979. - la Reuniao nacional sobre cidades e bairros comanais, Doc. No.5: Resolucao sobre o urbanismo, 1979. - Problemas Habitacionais na cidade de Maputo; o fornecimento de materials de construcao, by Dominique Raynauld, DCU of CECM, January, 1984. - 0 Sector Foral da D.C.U., April 1984. (Paper on situation up to 1984 by Titus Fereira and Paul Jenkins). 0 Cadastro Predial na Cidade de Maputo, March 1984. (Paper on situation up to 1984, by Titus Fereira and Paul Jenkins). - DCU of Conselho Executivo de Maputo - administrative forms: Various forms used for land requests. Normas pars distribucao de terrenos Form for survey of occupation of plots. Request for building license. - Cidade de Maputo - Plano de Estrutura, (1985) (Selected photocopies from the document). - NGO shelter activities in Mozambique IYSH, SINA (Settlements Information Network Africa, December, 1986. - Territorial Dilemmas; Urban Planning and Housing in Independent Mosambique, by Barry Pinsky, with Jens Svendsen and Erik Gregersen, June 1983. - 28 - ANNEX 1 Page 3 of 3 NOTE: In 1984-85, INPF prepared a series of internal discussion documents on urban land use and its control. As a result of the modifications of institutional responsibilities for Planning and Housing at that time, these documents were never approved or elaborated upon. Although very informative, they could not be photocopied. This series includes the following papers: Orientacoes para uso dos terrenos urbanos: 0 controlo de utilisacao dos terrenos urbanos: lo Caderno: 0 planeamento urbano 2o Cadernos Normas e regulamentos 3o Cadernot Metodos e processos de atribucao de terrenos a novo ocupacao. 4o Caderno: Metodos e processos de atribucao de terrenos (2) legalizacao da ocupacao existente. So Caderno: Cadastro urbano e registo da ocupacao. AF6IN June, 1988 - 29 - ANNEX 2 Page 1 of 9 MOZAMBIQUE URBAN REHABILITATION PROJECT REHABILITATION OF INFRASTRUCTURE NETWORKS Objectives 1. Over the past decade the urban population of Mozambique has grown from 0.8 million to 2.2 million. During that period the urban infrastructure networks practically were not extended as the operating and maintenance capacity of systems gradually broke down. As a result of over- utilization and deferred maintenance urban infrastructure networks have deteriorated to a level were major elements of the systems are in danger of being totally lost. The primary objectives of this component are to stem the deterioration of basic infrastructure networks, and extend them were necessary, in order to bring them back to basic operating levels which in turn would permit user charges to be collected and thus ensure the ongoing maintenance of the systems. Description 2. This component would include the rehabilitation and limited extension of priority sections of the road, storm drainage, water supply and sewerage networks, and of coastal protection works for the urban areas of Maputo and Beira. The proposed investments are intended to complement initial efforts already being unlertaken by the government with support of other multilateral or bilateral "gencies. Water transmission and treatment facilities in Maputo, financed by the African Development Bank (ADB), are nearing completion; sewerage and drainage projects, finarzed by the Netherlands are also nearly completed; in Beira, water transmission is being financed by Italy while the water distribution component included in this project would be parallel financed by Finland; sewerage pumping station rehabilitation is being financed by the Netherlands. The proposed project would include the following components, organized by systems: a) Priority Road and Storm Drainage Network Rehabilitation. In Maputo the proposed project would provide fort i) rehabilitation and maintenance of priority sections of the primary road network; ii) reconstruction of the Costa do Sol bridge, to consolidate direct access to fishing and agricultural production areas for Maputo; iii) drainage of the June 16th circle, which provides access to the city and is subject to serious periodic flooding; iv) in Beira, the project would include rehabilitation of the main highway serving the industrial areas, and maintenance of the primary road and storm drainage network. - 30 - ANNEX 2 Page 2 of 9 b) Priority Water and Sewerage Rehabilitation. This component would include: i) design and execution of the emergency water distribution network rehabilitation and priurity extension program, for Maputo; ii) in Beira, a similar water distribution network rehabilitation program, (to be parallel financed by Finnida), plus, iii) the rehabilitation of the water-borne sewerage network; and, c) Coastal Erosion Control. This component would includes i) design and rehabilitation of erosion control works (groynes, sea walls etc.) in Maputo, and, ii) similar urgent works in Beira. Costs 3. The estimated direct (base) costs for the component are as follows (see cost tables in Annex 7 for detailed cost and contingencies): Subcomponents US$ Million a) Priority Road and Storm Drainage Rehabilitation: 1) rehabilitation of road network, Maputo .............. 6.9 II) reconstruction of Costa do Sol bridge, Maputo ....... 0.68 Ill) drainage of the June 16th circle, Maputo ............ .0.94 iv) rehabilitation of road network, Beira ............... 3.45 b) Priority Water and Sewerage Rehabilitation i) water network rehabilitation and extension, Maputo 8.44 ii) water network rehabilitation, Beira ................. 6.13 1ii) rehabilitation sewerage network, Beira .............. 2.2 c) Emergency Erosion Control I) rehabilitation of erosion control works, Maputo ..... 0.88 11) rehabilitation of erosion control works, Beira ...... 1.68 Subtotal ......... 31.88 - 31 - ANNEX 2 Page 3 of 9 Financing and Cost Recovery 4. Parallel financing would be provided by Finnida for the water distribution network rehabilitation for Beira. The remaining costs would be financed by the IDA credit and the government counterpart (see Financing Plan, Table 1). To the extent possible, costs of the different components would be recovered from the project beneficiaries in order to allow for the replication of the various programs. The cost recovery mechanisms to be used are: a) water and sewerage investments and maintenance would be partially recovered through user charges and fees; b) road and storm drainage investments and maintenance would be partially recovered through the vehicle registration fees and petrol user tax and other charges as necessary; and, c) there is no direct cost recovery foreseen for the coastal protection works. Implementation 5. The overall coordination of project implementation would be under the responsibility of the Ministry of Construction and Water (MCA). The water supply component for the capital would be done by the Maputo Water Company (AdM), while the sewerage component for Beira would be carried out by the Beira Water Company (AdB). Road upgrading and erosion protection works would fall under the responsibility of the National Roads and Bridges Authority (DNEP), through its regional offices. Once rehabilitated, the ongoing maintenance of these works would devolve to the respective City Councils. Technical assistance for institutional development would be provided to the Ministry of Construction and Water at the central level, directly to the local City Councils, and to the executing agencies. Civil works administered by the various agencies would be carried out, as appropriate, by small or large private enterprises, in accordance with procurement procedures acceptable to the Bank (see chapter on procurement). Status of Project Preparation 6. Maputo Road Rehabilitation. With the present low level truck flows, of which 75% are empty, their pattern is not critical today; however, truck routes should be established with appropriate enforcement regulations for both cities to reduce damage to the residential streets in the near future. Given the high volumes of pedestrians and carts mixing with automotive traffic, there is a need for including low-speed vehicle paths from Laulane-Mahotas to the city center, and on the proposed Maputo- Machava road. The complete Draft Engineering and Economic Feasibility Report (February 1988) have been reviewed, together with the revised list of road sections to be rehabilitated (125,530 m) for an estimated US$5.4 million (base-cost). The final bills of quantities and specification and contract documents will be completed by June 1988. Further detailed testing will be undertaken in phase II to ensure that only the priority sections will be included. This component will include a full slow-moving - 32 - ANNEX 2 Page 4 of 9 traffic and pedestrian lane to extend from the northern and of Av. Vladimir Lenine to the junction of Av. Julius Nyerere using concrete paving blocks with retaining curbs. In addition, consultants will design four road test sections of 75 m using concrete pavers along Av. Mariana M'Gouabi, to be built during the first six months of the project, so that their performance can be evaluated, and if favorable, the use of concrete block pavers can be increased along that road, or others. The cost of *mergency repairs and resurfacing/maintenance is estimated at US$0.5 million and US$1.08 million (base cost), respectively. MCA has employed local consultants to design the slow-moving traffic 2.1 km access road to serve the Mahotas sites and services project and the adjoining agricultural area, with a 5.5 m carriageway, using concrete blocks. 7. Beira Road Rehabilitation. As with Maputo, the road priorities were revised to rehabilitate 6.6 km of the EN6 for US$2.55 million (base cost). The possibility of including a slow-moving traffic lane for bicycles, carts and pedestrians along this road is being reviewed. The GOM will determine if there is any overlap of this road with the proposed improvements to the Beira-Harare highway, financed by the AfDB. The accompanying emergency repairs and resurfacing/maintenance sums of US$0.25 million, and US$0.65 million, respectively, have been retained. The final Bills of Quantities specification and control documents will be completed by June 1988. 8. Drainage of the June 16th Circle. The proposed design solution of sealing the box culvert to withstand a Sm hydrostatic head has been adopted which includes open channel drains on the inside of the circle. Pedestrian circulation and water standpipes would be located accordingly. The preliminary estimated costs is US$710,000 plus US$170,000 for the road link which would be provided in the last phase. Coordination and approval of the railway, AdM and CECM have been obtained and the detailed engineering will be completed by June 1988. 9. Costa do Sol Bridge. The reinforced concrete single lane bridge on piling has been adopted, since there will be no adverse ecological effects on the salt water marsh. The alternative embankment solution would require extensive sand dune protection worka (not included in the initial cost estimates) to keep the outfall channel open, and high operation and maintenance costs for the sluice gates. The estimated cost is US$660,000. The ERR is estimated at 28% assuming a traffic growth of 6% per annum to serve the thriving fishing village and tourism as well. DNEP bas reviewed this proposal with the Zonas Verdes and other relevant authorities dealing with the land use for the salt ponds, etc., before proceeding with the final designs. Priority Water and Sewerage Rehabilitation - Beira Sewerage 10. Background. The sanitation of Beira city is organized basically on three different levels depending on the availability of water and water borne sewer systems. - 33 - ANNEX 2 Page 5 of 9 i) Pit latrines are used in those areas which are serviced only by standposts or shallow wells. ii) Septic tanks are used in areas where houses are connected to the piped water supply systom, but where there are long distances to the existing scwer system. Also the industrial area ani the port are served by septic tanks. iii) Water borne sewerage is used especially in the "cement city". The newtwork was constructed in the late 1960's. Because it was known at the early stages of project identification that very limited amounts of funds were available, the main efforts were concentrated on identifying the problems of the existing sewer system, and to find areas which could (at low cost and with existing house connections to water supply system) be easily connected to the existing sewer system, because the development of the water distribution network will be based on plot or public taps for some years to come due to the difficult economic situation. 11. Problems with the Existing System. The Beira water borne sewer serves about 85,000 people mainly living in the cement city. The system consists basically of four different components: 1) secondary sewerage collectors; 2) small underground pumping stations; 3) elevation stations; 4) main transmission lines. 1) The secondary system is badly clogged because of the low amount of water flushed into the system, but there is no need. for rehabilitation. 2) The small underground pumping stations have been rehabilitated (new pumps and electrical installations) with the assistance of the Netherlands during 1984 - 1987. Because of minimum supervision most of the puzping stations (70Z) are again out of order. Most of the damage is due to faulty electrical installations. 3) The rehabilitation of the elevation stations is also going on with the assistance of the Netherlands, although only spare parts are provided for three stations and only three out of four new pumps will be installed in a fourth station. 4) The main sewerage transmission line is collapsed in one place, is severely corroded in two places, and the pressure main of elevation station No. i, is collapsed. In total, approximately 1,100 meters of the 9,000 meters should be rehabilitated. 12. Extension of the Sewer System. Because of the high investment costs of the water borne sewer system only the areas with septic tanks and with house connections to pipe water supply system were investigated under this project. The major areas served with septic tanks are Mang&. The Industrial Zone, Matacuana/Esturro, Munhava Central, Macurungo and - 34 - ANNEX 2 Page 6 of 9 Matacuana North. Of these, Matacuana/Esturro is situated near the existing sewer network and can be connected by gravity. Only this component is proposed to be included in the p.oject. 13. Management Issues. The management of Aguas de Beira, which is also responsible for the sewerage system, is suffering from lack of managerial and technical staff. The Government of Finland and the Government of the Netherlands are committed to support AdB by providing equipment and materials and large technical assistance programs. Finland will concentrate its assistance in the water supply system (at least 4 persons) and the Netherlands in overall management and the sanitation sector (at least 4 persons). 14. Other Issues. Because of the lack of maintenance, the connections of individual houses to the sewer system are functioning unsatisfactorily causing obvious health hazards. Because the connections (inspection wells of septic tanks) are owned by the houses and in most cases by APIE, all the problems cannot be solved by supporting the AdB. The project would provide a lump sum to be used for the rehabilitation and for cleaning of septic tanks and house connections. Also equipment for cleaning the sewer has been included. BEIRA SEWERAGE REHABILITATION x 106 USD Foreign Local Total 1. C'vil Works i) Main sewer 1100 200 1300 ii) Extension (Esturro) 100 100 200 iii) Repair of house connections 100 100 200 1300 400 1700 2. Equipment i) Trucks (2 pcs) 200 200 ii) Tractor-trailer 28 28 iii) Equipment (tools pick-up) 52 52 300 300 3. Technical AssistLace Supervision of construction 200 200 TOTAL 1 - 3 1800 400 2200 15. Cost Recovery. The Government of Mozambique has allowed the water companies and other authorities responsible for the sewer and drainage systems to charge a surcharge of 15% of water tariff to cover the cost of the systems. The cost calculations and financial analysis have been reviewed and it is obvious that the approved tariff is far less than the actual costs. The issues related to tariff structure will be reviewed separately. Rehabilitation and Extension of Maputo Water Distribution Network 16. Background. The water supply services in Maputo are inadequate for the present population, which has grown more rapidly than expected due - 35 - ANNEX 2 Page 7 of 9 to the difficult economic and security problems of the country. In some areas population growth has been very much higher than indicated. The distribution system is badly suffering from deferred maintenance. Unaccounted for water is estimated to amount to 45-65% of the water supplied. About 50% of the population served by the existing distribution system have house connections and 40% are served by standpipes; the rest have boreholes and shallow wells. The system is also affected by the lack of source water. However, through ongoing construction and further extension work of the Umbeluzi treatment works, the demand and production will be in balance by the year 1990. Further source development is needed shortly after that. The planned project proposed for financing by IDA would (i) solve the major leakage problems in the existing distribution network, (ii) strengthen and to extend the distribution network to the areas where the need is most urgent; and (iii) study the long-term water sources for the city: i) Rehabilitation of the existing network (leaKage control). DNA has not yet received all the necessary equipment to start the detailed network analysis. The estimated rehabilitation needs - particularly for the distribution mains - must still be considered as estimates. ii) Rehabilitation of the distribution network. - 50 km large mains (Cli + 150 mm) cleaning/relining; - 30 km small mains (C/i - 150 mm) renewal/cleaning; - rehabilitation of valves; - 10,000 water meter connections. iii) Extension of the distribution network would includes - 6,75 km of transmission line Chamanculo-Mahotas; - Extension of Mahotas pumping station and reservoirs; - Extension of Chamanculo pumping station; - 105 km of new distribution mains in Mahotas; - 7 km of reinforcement of the distribution system in Malhangalane Coop and Alto Mae. 17. Conclusions i) Rehabilitation of the existing networks. The leakage study is proceeding well although the programme is a little late from what had been originally planned because of the late mobilization of the resident staff. The interim report is according to agreed TOR. During the mission, the consultant submitted the statement of AdeM profits and losses and projection up to 1992. The installation of water meters (in open places) is in many places causing a situation where meters are easily damaged, perhaps deliberately. Careful rethinking and designing is needed before replacing of water meters is started on a large scale. The matter should be solved in collaboration with the appropriate construction authorities, APIE and AdM. The consultant will continue the unaccounted water study to be able to submit the draft final report by the end of September as well as necessary tender documents for the rehabilitation works. - 36 - ANNEX 2 Page 8 of 9 ii) Extension of the distribution network. The general planning has been finalized and only some minor modifications will be made in this stage. The detailed design will be started only after the agreement has been signed. COST ESTIMATES A. Rehabilitation of the existing networks x 106 USD Foreign Local Total 1. Civil Works i) Cleaning/relining (int. contr. 289 434 723 ii) Rehabilitation (local contr.+adn) 438 356 794 iii) District meters 29 46 75 75c 836 1592 2. Equipment and Materials i) Water meters 142 90 232 ii) Equipment (cars, tools, etc.) 210 11 221 iii) DI-pipes 7 7 iv) AC-pipes 328 328 v) Valves 35 30 vi) Fittings 30 30 752 101 853 3. Maintenance Programme i) Leak detection study, tiaining, detailed engineering, supervision 200 200 TOTAL 1 - 3 1708 937 2645 B. Extension of Networks 1. Civil Works i) Mahotas distrib. center, Chamanculo & Transmissi-n main. 858 410 1268 ii) Extension of the network 1005 813 1818 1863 1223 3086 2. Equipment and Materials i) Pumps (includes installation) 441 10 451 ii) Equipment (cars, tools, etc.) 38 2 40 iii) DI-pipes 782 782 iv) AC-pipes 655 655 v) Valves 91 91 vi) HOPE-fitting 36 36 2043 12 2055 3. Design and Supervision 1) Supervision 300 300 ii Detailed design of extension 350 350 TOTAL 1 - 3 4556 1235 5791 =u =mm - 37 - ANNEX 2 Page 9 of 9 The execution of the extension programme for Mahotas is highly dependent on the amount and timing of water available at Chamanculo. The two projects effecting that are the extension of the water treatment plant and at the Umbeluzi (financing by France) and the transmission main from Chamanculo to Mahotas (financing by Italy); in general, the coordination among the various bilateral and ra,ltiateral investment programmes as well as among the road and water components in the proposed project is very critical. 18. Coastal Erosion Control Maputo. The proposals for fencing and ground cover of sensitive areas, with controlled pedestrian access have been adopted along with the relocation of vehicle parking areas to the opposite side of the road. Grazing, specifically of goats, would be prohibited. For protection of beach and dune erosion, the construction of 10 groynes of 100 m lengths has been adopted similar to the three existing ones (1 km south of the Club Maritimo) in the critical areas: (i) the design of the groynes would utilize local rock of 50 kg and include concrete structures as well as interlocking stabilized sand-cement bags; (ii) for the severe erosion above the Costa do Sol bridge, km 6.3 and above, mortared masonry revetments would be placed upon a geotextile fabric at strategic locations. The revised estimated for this component is about US$0.86 million. Final contract documents will be prepared by June 1988. 19. Emergency Erosion Control Beira. A reduction in the longitudinal protection of the dune slopes by interlocking stabilized sand-cement bags has been adopted. About half of the existing groins would be extended to below low-tide at one end and above high-tide at the other. As part of the dynamic defense system, the interlocking stabilized sand-cement bags would protect the groyne system and other devices. The main drainage channel and sluice gates have severe problems at the sea outfall; the protection of these is to be financed by West Germany. AF61N May, 1988 - 38 - ANNEX 3 Page 1 of 19 MOZAMBIQUE URBAN REHABILITATION PROJECT HOUSING COMPONENT Introduction 1. Objectives: A double objective has been assigned to the shelter component: (a) To address urgent shelter needs in the two main urban areas through three inter-related sub-components: - completion of unfinished state-owned office and residential buildings; - rehabilitation of state-owned residential buildings; - sites and services, including effective development of existing sub-divisions, new serviced plot development and upgrading of existing settlements. 2,775 new dwelling units and 2,529 upgrade ones (including apartments and plots in both cases) would thus be made available. (b) To address policy issues in the fields of housing and urban development. In the changing urban context in Mozambique, policy issues are coming up that will require answers in the near future. By selecting shelter sub-components that offer opportunities to tackle some of these issues, though on a small scale, the project will provide the Government with a testing ground where new approaches can be worked out for future application on a wider scale. 2. Urgent Shelter Needs: The building completion sub-component concerns buildings that were started before independence (1975), then came under Government control, but were never completed due to shortage of funds and of building materials. They represent considerable investments, now immobilized, but that can be made productive at only a fraction of their replacement cost. Since there is an increasing demand for office space and housing from expatriates in both cities, it is proposed that all of the offices and most of the apartments in the buildings be made available for rental in foreign currency. This would produce surplus revenues to be recycled into other shelter sub-components benefitting mainly Mozambican households. About 26,230 sq.m. of office space and 153 apartments would thus become available. - 39 - ANNEX 3 Page 2 of 19 3. The building rehabilitation sub-component applies to residential buildings (some of which were abandoned by the Portuguese at independence) that were nationalized in 1976 and rented to Mozambican households at subsidized rates. They are managed by APIE, but lack of maintenance has caused extensive deterioration. In order to preserve the investment the buildings represent, their rehabilitation (at only a fraction of their replacement cost) is proposed, as well as their future management on the basis of full recovery of investment and maintenance costs. This fits in with the Government's recent decision to raise rental rates and to fix these in function of dwelling characteristics and not, as previously, of the tenant's income. Sitting tenants unable to afford the new rents would be relocated to state-owned apartments of lower standards or to serviced plots with core houses. Part oi the vacated apartments would be rented out to foreigners to produce foreign currency revenues. About one thousand apartments would thus be rehabilitated in Maputo and Beira. 4. The sites and Services sub-component addresses housing supply through plot development, in two different ways: (a) New sites and services areas laid out in urban extension zones as well as in infill sites within the built-up areas. The latter type of plots is to be provided with core houses and is specifically intended for households relocated from rehabilitated apartment buildings; and (b) Effective development of existing sub-divisions that have remained largely unoccupied because of insufficient infrastructure and services, shortage of building materials and credit, and tenure problems. 5. Building materials and credit facilities would be available to beneficiaries under another component of the project. Rental revenues from the building completion and rehabilitation sub-component would be used for cross-subsidy. Approximately 1,540 existing plots would thus be serviced, and 2,530 new serviced plots provided. 6. As a whole, the shelter component would achieve full cost recovery, as well as a better balance in allocation of housing as a function of income and affordability. Completed or rehabilitated apartments of high standards would be allocated to the higher income groups, including expatriates; rehabilitated apartments of lower standards would be allocated to middle income groups including some of the sitting tenants; and sites and service plots would be allocated to sitting tenants unable to afford the new rents, as well as to lower income households from the general public. Surplus rental revenues in foreign and local currency from offices and high-standard apartments would be recycled within the component to cross-subsidize the plots with core houses for relocated households. 7. Policy Issues: Some of the general policy issues that would be addressed through the preparation and implementation of the different shelter sub-components are outlined below: - 40 - ANNEX 3 Page 3 of 19 Manaxement of the State-owned housing stock on a cost- recovery basis, with re-allocation of dwelling units in function of affordability, and the generation of surplus revenues for cross-subsidization. Ultimately, this could lead the way to partial divestiture of the State-owned housing stock to the private sector, which may be envisaged at some future time. Relocation of Households on a large scale is expected as a result of the recent rent increases. The project would address the issue by providing affordable alternatives to households wishing to relocate. Plot development on a cost-recovery basis, as an alternative to subsidized housing provided by the State. The low level of new residential construction during the last decade, together with a high rate of urban population growth, are creating a large urban housing shortage. Increased supply of sites and services together with assistance to self-help housing and the provision of credit facilities may be necessary to keep pace with demand. In this respect, the development of realistic and affordable standards in terms of infrastructure, plot sizes and housing is critical. Urban land administration raises a number of important issues. All land is nationalized and allocated free of charge (except administrative fees) and, in the absence of a legal private land market, there are inefficiencies in the allocation of urban land, which lead to land banking by institutions as well as individuals, and to discontinuous and inefficient urban development. There is an urgent need to generate municipal revenues to finance urban infrastructure and services. Land is allocated practically free of charge and there are no land or property taxes and no municipal taxes. The introduction of municipal taxes is envisaged as a result of the on-going local government finance and administration study. - 41 - ANNEX 3 Page 4 of 19 BUILDING COMPLETION SUB-COMPONENT A. Objectives 1. The completion of unfinished residential and office buildings owned by the State, in order to (a) preserve and make full use of earlier investments; (b) alleviate the present shortage of housing and office space; and (c) to generate income in foreign currency through rental of apartments and offices to foreign organizations and individuals. B. Description 2. The buildings earmarked for completion were started before independence in 1975 and if not already owned by the State, they were taken over at that time. Designs were revised to reduce standards and costs. After a few years the works were continued but had to be interrupted again because of the shortage of funds and building materials. The following buildings are included in this component: Maputo: (a) The "33 Andares" Building Of the 37 floor levels of this building, the 26 upper floors are already completd and occupied and only the eleven lowest (including sub-grade) levels would be included in the project. These comprise 11,390 sq.m. cf floor area, including 2,600 sq.m. of shops and 8,790 sq.m. of offices. The building is located along the main avenue in downtown Maputo. The total cost of completion is estimated at US$1.77 million for civil construction works, electrical installation and elevators and related design, or US$155 per sq.m. Most of the office space would be made available for rental in foreign currency. (b) Tower "A" of the "Torres Vermelhas" Complex This complex is situated in a prime residential location in the south east of the city. Construction started in 1971 and was interrupted twice for five year periods. Around 1975, the original plans were revised and the apartments subdivided to produce more units. The complex comprises two towers one of which is ready to be occupied. Only the remaining Tower "A" would be included in the project. It has 25 storeys with a total floor area of about 18,600 sq.m. and 153 apartments, most of which range from 70 to 115 sq.m., with one to three bedrooms. The estimated cost - 42 - ANNEX 3 Page 5 of 19 of completion is US$2.16 million or US$133 per sq.m. Since these apartments will not be available for occupation by foreigners, inclusion of Tower "A" in the project is dependant on agreement by CECM/APIE to release 50 houses, which will be vacated by people moving into Tower "A", for rental. in foreign currency, and to recycle the rental proceeds within the project. (c) The BCCI - Central Bank Building This building, also situated in downtown Maputo, comprises 12,250 Sq.m. of office space distributed over 21 floors. The cost of completion is estimated at US$2.16 million for civil construction works, electrical installation, elevators, water supply and sewerage, air conditioning, telephones and related design, or US$177 per sq.m. In future, the building would be entirely occupied by the Banco de Mocambique, which would transfer part of its services and 650 of its 1,100 employees to the new building, thus releasing part of the office space presently spread over several buildings in downtown Maputo, part of which would be rented out. The gross floor area per RM employee would increase from a low 10 sq.m. at present to 20 sq.m. because of the move. Although no direct benefits in the form of rental revenues in foreign or local currency would be produced, certain indirect benefits can be expected that would justify completion of the building under the project. The additional floor space would enable BM to effectively implement the scheduled separation of its central banking and commercial functions and to increase efficiency in both. In particular, improved service to its 13,000 clients would produce estimated yearly savings of up to US$0.9 million in reduced waiting time, and management of the increasing amounts of foreign aid would be significantly improved. Beira: The ATCM Building Construction of this building located in the central part of the town proceeded in two periods 1972-1975 and 1978- 1984. In 1978, the original plans were revised, the height of the building was reduced from 21 to 15 floors, and the number of apartments was increased by subdividing the original ones. The total floor area is 12,450 Sq.m., including 96 apartments totalling 10,040 Sq.m., 1,000 Sq.m. of shops and 1,410 Sq.m. of offices. The cost of completion is estimated at US$1.24 million for civil works, electrical installations, elevators, pumps, telephones, site development and related design costs or US$99 per Sq.m. Part of the apartment and office space would be made available for rental in foreign currency. - 43 - ANNEX 3 Page 6 of 19 C. Financing and Cost Recovery 3. The completion of the four buildings is economically justified because the cost of completion is only a fraction of the cost of new construction. For commercial buildings, completion costs per sq.m. range from US$100 to 200, while the cost of new construction is estimated at US$400 tc 600. Completion costs per sq.m. for residential buildings vary from US$100 to 130, as compared to US$400 to 450 for new construction. 4. About 80% of the total cost of the component would be financed from the IDA credit and the remainder from other sources, including rental downpayments in foreign currency by prospective tenants. 5. For the "33 Andares" building in Maputo and the ATCM building in Beira, full cost recovery would be achieved through rental in foreign and local currency at rates fixed in accordance with the council of Ministers' Decree No. 24/87 dated October 27, 1987 (regarding the determination of rental rates in local and foreign currency for properties owned by the State). The rates currently are as follows: Rental Rates Per Sq.m. Per Month Offices and Shops Apartments Foreign Currency Rents (US$) 5.4 3.6 Local Currency Rents (MT) - 90 Approx. 6. In the case of Tower "A" of the Torres Vermelhas complex, which is not available for rental in foreign currency, cost recovery will be effected indirectly through rental proceeds in foreign currency from 50 houses to be made available for payment in foreign currency. An undertaking by CECM/APIE to this effect is a condition of negotiation. Rental revenues would be recycled in the following mannert (a) part of the revenues in foreign and local currency would enter into a revolving fund for the completion of other buildings; (b) part of the revenues in foreign and local currency would enter into a fund for maintenance of the completed buildings; and (c) part of the revenues would be used to cross-subsidize other sub-components of the shelter component, specifically the provision of core houses to relocated households. - 44 - ANNEX 3 Page 7 of 19 D. Summary of Building Completion Component Apas nse r Completion YeIrk Rent Rgvengu i USSi Of iesA aoo & Cost i n UIS Loaliffurrency Forsion Currency 88 Andares - 0 11,30e 11,386 1,767,290 0 787,948 Tower A 153 16,165 0 16,185 2.159.030 43.704 600,000 1/ BCCI-Central Bank _-0 12,248 12,248 2L2421 n/a ila Total: 16.165 23,886 39,21 6,090.539 a ATCH 2101.9 2412 12451 1.236,400 M1 221 Grand Total: 249 26,224 26.048 52.272 7.327,339 61.410 1632.927 Supervision (41) - - - - 293.093 - Base Cost: - - - - 7.620,432 - I/ Rental revenue from 50 houses to be released for rental to foreigners. estimated an the basis of USS1.000 per month per house. 45~ - ANNEX 3 Page 8 of 19 HOUSING REHABILITATION SUB-COMPONENT A. Objectives (a) Urgently needed preservation of the existing State-owned housing stock that has been deteriorating as a result of deferred maintenance; (b) To assist the Government in gradually phasing out housing subsidies, by rental (and possible future sale) of apartments at economically justified rates; and (c) To generate income through rental of apartments in foreign currency, for cross-subsidy within the housing component. B. Description The buildings to be rehabilitated were constructed during the last 25 years of colonial rule and came under State control in February 1976, when natIonalization of all rental properties, mostly abandoned by the departed Portuguese, was proclaimed. APIE was entrusted with the management of the properties, and rental rates were fixed as a (low) percentage of tenants' incomes. Lack of maintenance as a result of APIE's limited resources and occupation by lower-income households with little or no previous experience in apartment living, have caused extensive deterioration. Because the buildings' systems (water supply, sewerage, elevators, electricity, garbage evacuation) are in most cases out of order, they constitute a health hazard to the occupants. In addition to gradual increases of utility rates, the Government has recently decided to determine rental rates in function of the buildings' characteristics and floor area and not, as previously, on the basis of tenants' incomes (Council of Ministers' Decree No. 24/87 dated October 27, 1987). These steps mark a policy shift towards the reduction of housing subsidies and towards management of the Government-owned housing stock on a cost recovery basis. In this context, 2,100 apartments in 142 Government- owned buildings in Maputo and Beira were selected for rehabilitation. A little less than half of thes would be rehabilitated under tLa present project. In order to provide temporary accomodation to households vacating their apartments during the rehabilitation works, about 380 serviced plots with core houses (300 in Maputo and 80 in Beira) would be made available under the sites and services sub-component. After completion of the rehabilitation works, these core units would serve to permanently relocate - 46 - ANNEX 3 Page 9 of 19 households who cannot afford the new rentals and who prefer to move to these units. Part of the rehabilitated apartments would be rented to foreigners and rental revenues in foreign currency from this and the previous (building completion) sub-components would be used to subsidize these core units. Maputo - A total of 774 apartments ranging in size from about 50 to 120 Sq.m. and located in seven different high-rise buildings or walk-up apartment complexes, were selected for rehabilitation. The works would include repair or renewal of sewerage, water supply, electricity systems and of elevators as appropriate, replacement of fixtures, doors, windows where necessary, as well as refinishing of the buildings. The total estimated cost is US$3.88 million or an average of US$60 per Sq.m. Beira A total of 216 apartments ranging in size from 65 to 120 Sq.m. and distributed over eleven high-rise buildings or walk-up apartment complexes would be rehabilitated in a similar manner. The total cost is estimated at US$1.53 million or an average of US$68 per Sq.m. C. Financing and Cost Recovery About 80% of the cost would be financed from the IDA credit and the remainder from other sources such as enhanced rental downpayments by foreign tenants. Because rehabilitation costs are low in comparison to the cost of new residential construction (US$60 to 68 against US$400 to 450 per Sq.m.), full cost recovery will be achieved through rental. Housing rents fixed in accordance with Decree No. 24/87 are currently US$3.60 per Sq.m. for rental in foreign currency and about MT 90 per Sq.m. for rental in local currency. In Maputo about 39% of the rehabilitated apartments (i.e. 300) and in Beira a_=at 21% (i.e. 45) will be rented in foreign currency. Rental revenues would be re-cycled in the following ways: (a) part of the revenues in foreign and local currency will be used to give a subsidized core house on a serviced plot to the 345 permanently relocated households; (b) part of the rental revenues in foreign and local c4rrency will enter into a revolving fund for the rehabilitation of other buildings; and (c) part of the revenues in local currency will enter into a fund for maintenance of the rehabilitated buildings. - 47 - ANNEX 3 Page 10 of 19 D. Summary of Building Rehabilitation Sub-Component Number of Number of 4umber of Rehabilitation Yearly Rental Revenues in USS Bulidings or Croup of Buildings Bujlfifc flr Muaer.3ntle o in rr n r ur Av. 25 de Seteabro 1123 -Card*o 1 14 82 Av. Marl MarxS 501 1 7 55 881.394 18,042 184,580 Av. Karl Marx 939 1 13 70 Av. Kar! Marx 1462 gZambez*l 1 9 52 316,46 7,323 74,906 Beirro Malange 47 3 141 523,031 19.507 199,548 Bairro Acto Ma* 3 14-16 79 780.163 15,549 159,054 Bairro ilhangalone 71. 2-A "9 1,3 7 4 5 Total Maputo: 130 - 774 3,878.426 104,946 1,073,533 Supervision (61) 232,705 Base Cost - Maputo 4,111.131 Rua Cap. P. Ramoz 'Nicolax 1 12 49 OTudor' 1 9 14 ) 417.206 Rue N. Albuquerque aCooperatival 1 12 80 776.214 Correla de Brito 80 1 4 12 Rua Padre Assuncao 54 1 2 8 Rue Com. Caivao 578 1 3 10 47,727 202,990 -*a R. Baptista 489 1 2 6 Rua P. Nune 183 1 4 24 232,361 Rua N. Coelho 58 1 4 6 Run B. Capolo 542 1 2 3 Rua Residencia 841 4 Tot*I lhira: 11 - 216 1,525,781 47,727 202.990 Supervision (61) 91,546 Base Cost Beira 1.617,327 Crand Total: 141 - 990 5,728,458 152,673 1,276.523 - 48 - ANNEX 3 Page 11 of 19 SITES AND SERVICES SUB-COMPONENT A. Objectives (a) To provide alternative accomodation in the form of serviced plots and core Louses to households relocated from rehabilitated apartments (see previous sub-components); (b) To provide serviced plots to households in the lower-middle income groups; and (c) To provide a framework in which new approaches to housing and urban development can be developed f:om practical experience. B. General Description Types of Plot Development The essential aim of this sul-component is to increase housing supply through development of servicec plots, in several ways: (a) New sites and services in peri-urban semi-agricultural areas that have been occupied spontaneously at low densities (Mahotas in Maputo; Inhamizua in Beira); (b) New sites and services on small infill sites within the built-up areas of the towns. (Polana Canico and Bairro Ferroviario in Maputo). These sites have remained undeveloped for reasons related to inefficiencies in the urban land allocation process and it is desirable that they be developed before further extensions of the town are considered. These sites are intended for more urban- oriented households, specifically those relocated from rehabilitated apartments; and (c) Upgrading of existing sub-divisions that have remained largely unoccupied because of the absence of essential infrastructures, the shortage of building materials and inefficiencies in the plot allocation system. By addressing each of these problems, the project would encourage effective occupation of these areas (Laulane D in Maputo; Muchatazinha in Beira). - 49 - ANNEX 3 Page 12 of 19 Standards and Levels of Service Because in the present context incomes are low and construction costs high, the standards of infrastructure and housing proposed under the project are low with some variations: (a) All sites will be provided with basic infrastructures including a paved main access road for public transportation and storm water drainage, where necessary, graded local access roads, a water distribution network generally with standpipes, individual pit latrines, a power distribution network with basic sheetlighting and mostly optional individual connections; (b) A limited number of plots, mainly on infill sites, would be equiped to higher standards including individual water and electricity connections and a 32m2 3-room core house in basic finish. These plots are intended for households relocated from rehabilitated apartments. (c) Building materials kits corresponding to a basic 2-room house and related credit facilities will be made available under a separate project component to some of the other beneficiaries; and (d) Plot sizes will range from 150 Sq.m. on infill sites in the built-up areas to 450 Sq.m. in the peri-urban sites. Relocation, Resettlement and Present Site Occupants Relocation. For the first implementation stage of the building rehabilitation program to start, it is critical that about 380 of the apartments earmarked for rehabilitation in both towns be vacated at an early stage. In order to provide temporary accomodation for households vacating their apartments, a corresponding number of plots with core houses will be provided early on, including 300 in Maputo (on the Polana Canico and Bairro Ferroviario infill sites) and 80 'n Beira (on the Macurungo infill site). Ultimately, 345 of these plots (300 in Maputo and 45 in Beira) will be used to permanently relocate households who cannot afford the apartment rentals Provision of core houses to these households will be subsidized with rental revenues from the building completion and rehabilitation comoonents. Resettlement. Rehabilitation of the June 16th Circle in Maputo, under another project component, requires resettlement of about 25 squatter households. These will be resettled in one of the sites and services areas in accordance with CECM rules (Municipal Decree dated May 17, 1982). - 50 - ANNEX 3 Page 13 of 19 Present Site Occupants. All Sites selected for sites and services development, except the Polana Canico infill site, are at present occupied by small numbers of semi-rural settlers (about 95 households in Maputo and 300 in Beira). These households will be accomodated on the sites and where possible, layout plans will be adapted to maintain their present locations and preserve their houses. They will further be treated as project beneficiaries. FINNIDA's Workers' Housing Project (Beira) FINNIDA is planning to finance a housing project which would mainly benefit CFM workers. It includes the provision of serviced plots, core houses and community facilities on two sites. Other components of the FINNIDA project are: establishment of hardware, brickmaking and carpentry cooperatives, self-helf housing assistance, building materials credits and institutional support to CFM's housing cooperative as well as to CECB/DPCA. This project would be implemented through BCA and DPCA, while the IDA financed project would be implemented through DPCA/CECB. Coordination between the two projects is being achieved in the following ways: - Simultaneous appraisal in April, 1988; - Topographic survey of one of the FINNIDA sites to be financed under the IDA credit; - Future coordination in terms of site development housing standards as well as institutional aspects. C. Description of the Project Sites (a) Mahotas (10 km North of the city center). The bairro Mahotas is a spontaneously settled peri-urban agricultural zone. Most of the 81 existing dwellings are of non-permanent nature and the present density is low (2-3 dwellings/ha). The area is partially serviced with water from privately-owned boreholes and electricity and there is a small bairro center with an administrative office and a few shops. In the Structure Plan of Maputo, the area is earmarked for low-density peri-urban residential development (10-15 dwellings/ha). The total project area is 51.4 ha. The following is proposed under the project: Roads: A 2 km paved road from Avenue Julius Nyerere through the Laulane D site will give access to the site. All other roads to be of consolidated earth constructiot.. Water: Until 1993 when connection to the city mains is expected, water will be supplied from on-site ground water resource. The distribution network will be designed in such a manner that it cah later be connected to the city mains. Out of the 628 plots, 200 will be equipped with individual enrin t-t% - 51 - ANNEX 3 Page 14 of 19 Sanitation: All plots to be provided with pit latrines. Electricity: A power distribution network with basic street lighting, and 200 of the 628 plots equipped with individual connections. Plots: 828 plots ranging in size from 312.5 to 450 Sq.m.; 200 of these with individual water and electricity connections. Materials Kits/Credits and Self-Help Housing Assistance: For about 500 of the 828 plot beneficiaries. Beneficiaries: (i) Present site occupants; (ii) households re-settled from 16th of June Circle; (iii) others as selected by CECM (b) Laulane "D" (9 km from the city center). Situated immediately South of Mahotas, this 130 ha site was subdivided in 1984 by CECM into about 2,330 plots with a target density of 90 persons/ha. However, most of the plots remain undeveloped because of the non-availability of infrastructures, the general shortage of building materials and land administration problems. The following is proposed under the project, which would cover 66 ha in the northern part of the site. Roads: Main access from Avenue Julius Nyerere over a 4 m wide double asphalt surface road and all other roads of consolidated earth construction. Water: As in Mahotas, but no individual connections. Sanitation: Individual pit latrines to be provided if not already available. Electricity: As in Mahotas, but only optional individual connections. Plots: 1,144 existing plots of 344 Sq.m. each. Materials Kits/Credits and Sel-Help Housing Assistance: For about 520 of the 1,144 beneficiaries. Beneficiaries: The present plotholders; the plots of absentee plotholders not effectively developing and occupying their plots within a given period would be re- allocated by CECM. (c) Bairro Ferroviario: (Infill site at 6.5 km from the city center) - 52 - ANNEX 3 Page 15 of 19 Two small tracts of land totalling 4.2 ha were identified here. They are situated immediately next to an existing suburban nucleus which includes railway staff housing built before independance as well as row houses and walk-up apartments built around 1980. This zone .*s relatively well provided with infrastructures, social equipment and public transportation. The existing density is of the order of 120 persons/ha or 24 dw/ha. The following is proposed under the project: Roads: Internal access roads of consolidated earth construction, to be connected to existing road networks. Water: Distribution network connected to nearby city mains with individual connections to all plots. Sanitation: All plots to be provided with individual pit latrines. Electricity: Distribution network connected to nearby transmission lines, with basic sheetlighting and individual connections to all plots. Plots: 153 plots ranging from 200 to 250 Sq.m. Core Houses: All plots to be equipped with a core house. Beneficiaries: Houaeholds temporarily or permanently relocated from rehabilitated apartments. (d) Bairro Polana Canico B (Infill site at 3 km from the city center). This site consists of about 60 ha of land situated between the university complet and a low-income settlement (Bairro Polana Canico B) that was partly upgraded in 1977-79. About 17.3 ha are occupied by squatters and the remainder is vacant. No infrastructures exist on the site but they are available nearby. Existing densities in the squatter settlement and in Polana Canico B are at least 250 persons/ha (or 50 dw/ha) and the average plot size is 150 Sq.m. or less. The following is proposed under the project: A plan will be drawn-up for the whole 60 ha site in order to ensure its adequate integration into the urban context. This plan shculd form a guideline for future developments on the site, -hich could possibly iclude upgrading of the 17.3 ha squatter site, new sites and services and/or other housing development, new social equipment and new infrastructures. A vacant area of 3.6 ha situated between the university complex and the squatter area will developed immediately as an infill-site, with the following characteristics: - 53 - ANNEX 3 Page 16 of 19 Roads, Water, Sanitation, Electricity, Core Houses, Beneficiaries: As in Bairro feriiovario. Plots: 160 plots of 150 Sq.m. each. Beira: (a) Inhamizua II (At 12 km North of the town center). Situated on the northern side of the main road, this 79 ha peri-urban site is presently occupied by a semi-rural population of about 300 households. Most of the existing constructions are of a non-permanent nature and no infrastructures are available. Parts of the site are subject to occasional flooding. The following is proposed under the project: Storm Water Drainage and Roads: Site grading will be limited to the local access roads cut hollow in order to double-function as drains, and gravelled. An unlined main drainage canal will be dug through part of the site. No main access road is required since the site is bordered on two sides by existing roads. Water: Water distribution network with public standpipes only, connected to the city mains. Sanitation: Owner-built individual pit latrines. Electricity: Distribution network with basic streetlip'.ing and optional individual connections, connected to nearby transmission lines. Plots: About 1,700 plots. Materials Kits and Credits and Assistance to Self-Help Housing: For all plot beneficiaries. Beneficiaries: Present sites occupants and other households as selected by CECB. (b) 80 Plots with Core Houses for Relocated Households Eight plots at Macurungo would initially serve to provide temporary accomodation to 80 households vacating their apavtments during implementation of the building rehabilitation component of the project. Eventually, 45 of these core houses would serve to permanently relocate 45 households unable to afford the new rents and who have a preference to move to these core houses. (c) The CFM workers' housing project to be financed in parallel by FINNIDA includes: - 54 - ANNEX 3 Page 17 of 19 Muchatazinha (3 km from the town center). In this existing 15 ha sub-division of about 335 plots, only 60 of which have been occupied due to lack of infrastructures and of building materials, the infrastructures would be completed and about 250 core houses built. Inhamizua I (About 10 km North of the town Center). This 175 ha site across the road from the Inhamizua II site would be sub-divided into about 1,150 agro-based plots and equipped with basic infrastructures. About 750 plots would be allocated to CFM workers and the remainder to members of the public. (d) Financing and Cost Recovery 80% of the project costs would be financed from the IDA credit and the remainder from Government contributions and other sources. The topographical survey of the Inhamizua II site and infrastructures and core houses for 80 plots on the Muchatazinha site in Beira, to be allocated to households relocated from rehabilitated apartments, would also be financed by IDA. The main access road to the Laulane D/Mahotas areas would be financed under the Road Rehabilitation component. Recovery of Site Development and Infrastructure Costs The cost of land demarcation and roads (excluding the main access road to Laulane/Mahotas), drainage and sanitation (latrines) as well as part of the project management cost would be directly recovered from the beneficiaries. At least part of the investment cost of water supply would be recovered through the usual connection fees and rates in the case of individual connections and, in the case of collective access to standpipes, through systems which are being studied by DNA. The present electricity tariff includes capital and recurrent costs and therefore no separate charge would be made to the beneficiaries. Recovery of the site development and infrastructure cost would be effected in the following way: (i) 20% of the cost to be recovered per plot would be paid as an "allocation fee" (or downpayment) when the provisional land title is given to the beneficiary; - 55 - ANNEX 3 Page 18 of 19 (ii) the remaining 80% would be recovered through annual fees over a period of 20 years. In time, this annual fee may be transformed into an "urbanization tax", the amount of which would be proportional to the level of infrastructure offered and which would be introduced city-wide. Both fees would be collected by CECM and CECB and deposited in a revolving fund, supervised by MCA, for the financing of similar projects. Recovery of the Cost of Core Houses In order to pay for their core house, the 345 households relocated from rehabilitated apartments would benefit from a credit scheme which would be subsidized with rental proceeds from the building completion and rehabilitation components, in order to match their affordability level. The amounts colected would be deposited in a special fund. Recovery of the Cost of Materials Kits Recovery of these costs and operation of the corresponding credit system would be through mutual loan associations to be created. Beneficiary-members would make a downpayment of 20% and repay the remaining 80% at 9% interest rate over 25 years (see also Annex 5). - 56 - ANNEX 3 Page 19 of 19 E. Summary of Sites and Services Component .___,& ro__H_u_m_MajW__Kits__ir_dit& TotalI Town A Site r (h m)1rMu M Tii MA!U.O Mahotas 51.4 828 500 Lautne D 66.0 1,144 2 520 Ferrovario 4.2 153 3 153 Polana Canico .6 160 IN Sub-Total: 125.2 2,285 1.10 313 1.68 1,020 1.18 4.16 Inhamius TX 79.0 1,700 1,700 Core Hous*s A& (6) .so 2 Sub-Total: LM4 1g (4) 0.27 12 2,1 lam 9M 1.84 TOTAL: 206.7 4.065 1.87 393 2.60 2.720 2.03 6.00 Inhaminzua I 175 1,150 n/o 1,150 n/a n/a n/a Machetazinui ,,at _a (5) n/. 259 n/a n/a n/a TOTAL.: 190 1,485 n/a 1,400 n/o n/a n/a NO[]S: All costs incude the cost of supervision, but not sales tax. Including about 81 present occupants to be accomodated on-sits. 2 Plots in an existing sub-division, only part of which is effectively occupied. 'I Including about 14 present occupants to be accomodated on-site. 4 Including about 300 present occupants to be accomodated on-site. 5 Including about 60 plots already occupied. 6 No sits selected as yet, estimate of ar-a needed. - 57 - ANNEX 4 Page 1 of 7 MOZAMBIQUE URBAN REHABILITATION PROJECT A. IMPROVEMENT OF SOLID WASTE AND OTHER URBAN SERVICES IN MAPUTO SUMMARY AND CONCLUSIONS The Present Situation in Maputo 1. Garbage is accumulating on the streets, building yards, and vacant lots of the city of Maputo for a variety of reasons: - The fleet of garbage trucks is under utilized. - The maintenance workshop can not repair the vehicles due to lack of equipment, spare parts, and enough personnel with good mechanical skills. - Rented trucks are too expensive for the available budget of the D.S.U. and totally inadequate for urban garbage collection. - Street cleaning is badly organized and is too inefficient due to the lack of human and material resources. - Companies in charge of drainage laying act independently without obeying Municipal regulations. 2. The solid waste disposal system contaminates the environment and surface water and groundwater. Hospital wastes and dead animals are dumped without treatment. 3. The prospects of finding a solution within the municipality's own resources are at present remote. The current cost of garbage collection is 2.914 Mt/Tm. but it could be done satisfactorily for 2.000 Mt/Tm. 4. There are about 2.000 Tonnes of garbage accumulated in the city, increasing at a rate of about 30 Tonnes daily. - 58 - ANNEX 4 Page 2 of 7 Summary Cost of Equipment and TA Needed 5. The estimated cost of equipment and TA needed is as follows: TOTAL COST US DOLLARS (x1000) - 6 Compactor trucks 15 m3 @ $80,000 480 - 5 Roll-on roll-of trucks with hooked 10 m3 container @ $65,000 325 - 2 1 m3 mechanical shovels @ $85,000 170 - 2 Tank trucks for emptying septic tanks ($75,000 + $80,000) 155 - 60 10 m3 containers @ $2,500 150 - 800 1 m3 containers @ $350 280 - Spare parts 195 - Tools, clothing, and cleaning material 165 - Repair shop equipment 270 - Tow truck, mobile shop 80 - Civil works, containers, and shop 80 - Platform and fenced disposal area 50 - Compost manufacture (see annex) plant 580 - Material manufacturing containers fibre 80 - Technical assistance 370 - Plus contingencies 370 TOTAL 3,800 COSTS BY PHASE I Phase 500 II Phase 1700 III Phase 1600 TOTAL 3,800 Proposal for Organization and Manaement of Urban Services 6. After analyzing the existing constraints, a solution along the following broad lines is proposed: * Evaluate the potential for involvement of the people. * Develop an independent system with the structure of a cooperative for garbage collection. * Develop ways of recycling scrap, paper, and glass and open a compost plant. * Increase control over the cleaning brigades. S Provide productiv5ty incentives. P Train personnel for municipal services at the local level. - 59 - ANNEX 4 Page 3 of 7 7. All these measures are consistent with a policy of minimizing the structure of the D.S.U. and strengthening independent initiatives within the municipal control systems. It is hoped to generate approximately 200 new permanent jobs not attached directly to the structure of the D.S.U. The compost plant would absorb 95 people and urban and selective collection would comprise about 105 people. 8. The organization and implementation of the proposed scheme during the following two years would be managed by three technical advisors, one of them an expert on organizing cleaning and collection systems (2 years), another, an expert in maintenance of vehicles and equipment (2 years) and the third, an expert in compost plants (1 year). These technicians would be supported by the Municipal Government of Barcelona, in the event that a special relation be established between the two cities. Also technicians from Maputo will be trained in Barcelona, through a course in garbage collection and disposal, with 9 months duration. 9. The garbage would be collected in the central area by 5 compacting trucks of 15 m3. and 1 truck in reserve. It would be deposited in 45 containers of 10 m., (expandable to 55 containers) grouped in transfer centres located in each neighborhood close to the markets. Hospital waste and dead animals would go through a system of special disposal and would be collected in 5 containers of 10 m3. The compost plant would produce 11,000 Tm./year of fertilizer, the sale proceeds of which would contribute towards financing garbage collection services. 10. A detailed consultants' report reviews the financial aspects of the proposed cooperative system. Included among the recommendations are proposals that Business companies would pay 2.000 Mt per Tm. of collected garbage and 4.000 Mt. per container of 10 m3 transported. Project Implementation Phases 11. The project will be executed in 3 phases of 2 years and 2 months. (a) I Phase 1: Urgent Plan for Urban Cleaning During 1 1/2 months there would be a disposal of approximately 6.000 Tm. of urban waste accumulated in the middle of the city. Equipment and other needs are as follows: - 2 front-end loaders - 3 self-loading trucks with hook - 30 containers of 10 m3. - 50 employees to clean the 15 areas of the city. Plus Technical Assistance to support the management of the operation for 2 months. Total cost, US$500.000. (b) II Phase 2: Minimal Pick-up and Disposal Plan Provision of 700 containers of 1 m3. in the middle of the city and 50 containers of 10 m3. in the periphery and hospitals. - 60 - ANNEX 4 Page 4 of 7 The containers of 1 m3. will be emptied 5 compactor trucks, keeping one truck in reserve. The containers of 10 m3. will be transported by 5 self-loading trucks with hook, keeping one in reserve. Total requirements would be as follows: - 800 containers of 1 m3. (700 + 100 reserve) - 50 containers of 10 m3. - 6 compactor trucks. - 6 self-loading trucks (5 new + 1 rebuilt) will transport the 231 Tm. of daily produced garbage. The workshop will be equipped to perform all types of repairs. At the disposal site, a partially fenced platform would be installed. Equipment would be provided for the cleaning brigades. Technical assistance will be provided by two professionals for one year: a technician in organization of cleaning and collecting, and one technician in maintenance. Government would have line management positions as well as timing of counterparts staff. Training: 9 months for municipal technicians in Barcelona. Duration of plan: 1 year. Total costs $1.700.000. (c) III Phase 3: Urban Services Development Plan Will cover the following objectives: - Organizational consolidation of the collection system. - Consolidation of collection with containers. - Production in Maputo of new containers of fiberglass. - Establish and opening of a plant of 11.000 Tm/year of compost. - Recovery of the scrap material, paper, and glass. - Rationing of the disposal area. - Consolidation of the repair shop. - Self-financing of urban services through the establishment of local taxes to be determined by the ongoing local government study. - There will be technical assistance of 3 professionals, 2 extending the functions of tht 2nd phase and a third one to establish and functioning of the compost plant. The aid package would includes - Compost plant. - Material plant of fiberglass. - Repair shop equipment. - One towing truck shop. - One container washing truck. - 10 containers of 10 m3. - Tools and cleaning material. - Spare parts. There will be a gain of about 200 employment slots. The duration of the plan will be of 1 year. Total cost of necessary aid: $1.600.000. - 61 - ANNEX 4 Page 5 of 7 Self-Financing System Through Taxation 12. The costs of cleaning services, collection and disposal of garbage, once the system is established, at 1988 prices, is estimated to be: Collection of garbage... 170 M. Mt/year Street cleaning......... 130 M. Mt/year Disposal*................ .self-financing Overhead............... 60 M.Mt/year TOTAL............ 360 M.Mt/year The local government finance services will consider means of cost recovery. - 62 - ANNEX 4 Page 6 of 7 MOZAMBIQUE URBAN REHABILITATION AND EMPLOYMENT GENERATION PROJECT B. IMPROVEMENT OF SOLID WASTE AND OTHER URBAN SERVICES IN BEIRA CITY SUMMARY AND CONCLUSIONS Present Situation in Beira 1. The D.S.U. of the city of Beira has insufficient material and personnel to be able to offer appropriate services to the citizens of Beira. This lack of resources causes not only a deterioration in the appearance of the city, but also serious sanitary problems. These deficiencies are compounded by the fact that: (a) The repair shop has great difficulty in repairing vehicles due to the lack of essential spare parts. (b) Street cleaning is badly organized, with a high level of absenteeism and lack of adequate materials. (c) Enterprises dedicated to construction of infrastructure do not obey the regulations of repaving working zones after repairing. (d) The present system of disposing of garbage in dumping areas is contaminating the environment and the surface and groundwaters. (e) The high rate of population growth accentuate the lack of municipal services. (f) No efforts are currently being made to organize the process of decentralization and autonomy of the D.S.U. (g) The possibilities of finding solutions from the municipalities own resources are limited. - 63 - ANNEX 4 Page 7 of 7 Summary Cost of Equipment 2. The estimated cost of equipment is as follows: - 2 Compactor trucks 14 m3. ($80.000 each) 160.000 - 2 Trucks with hooked 10 m3. containers ($65.000 one) 130.000 - 20 10 m3. containers (20 x 2.500) 50.000 - Material for the manufacturing of 3.750 buckets of 60 liters 10.000 - 1 1 m3. Bulldozer 70.000 - Spare parts for vehicles 40.000 - Technical advisor-organizer (1 year) 70.000 - Tools and material 20.000 GARBAGE COLLECTION TOTAL 550.000 - 1 Tank truck 75.000 - 1 Tow truck 30.000 - Spare parts 15.000 - Tools and plant equipment 30.000 - Workshop equipment 50.000 TOTAL CLEANING 200.000 TOTAL 750.000 There should also be technical assistance in the form of an advisor to help improve the organization and structuring of Urban Services. Provision should also be made for the training of a technician of the Municipality of Beira in Spain with the Spanish TA program. 3. Estimated costs for cleaning services, collection and disposal of solid waste are as follows: Garbage collection 60 M. Mt/year Cleaning 45 M. Mt/year Disposal 5 M. Mt/year Overheads 20 M. Mt/year TOTAL 130 M. Mt/year - 64 - ANNEX 5 MOZAMBIQUE URBAN REHABILITATION PROJECT LINES OF CREDIT 1. This annex describes the two different types of lines of credit that would be made available under the project: (a) building materials loans; and (b) loans for small and micro-enterprises. Building Materials Loans 2. The loans for the purchase of building materials form an important part of the sites and services components in both Maputo and Beira, in that they would enable plot holders to finance the materials they need to build their homes by self-help methods. An integrated approach to the provision of technical assistance, building materials and loans is envisaged, as outlined in Annex 5(a). Loans for Small and Micro-Enterprises 3. The loans for small and micro-enterprises (SMEs) would contribute to employment generation in the urban areas, particularly in construction related activities. While they are intended to assist SMEs on a city wide basis, they would in some cases integrate with the project's shelter components at the Bairro level. 4. In concept, this component would provide small loans averaging less than US$1,000 to micro-enterprises, mostly with less than 10 workers, to purchase sparss and equipment to enable the enterprise to function. It would complement existing micro-enterprise assistance schemes, which are mainly concentrated in rural areas, and the proposed IDA assisted small and medium scale enterprise project which would follow shortly after (appraisal envisaged towards the end of 1988). The latter would cater for larger enterprises in the more formal sector with larger loans. 5. The line of credit for small and micro-entreprises would also provide loans for larger (but still small) enterprises in the building materials industry, to enable these enterprises to purchase spare parts and small items of equipment and thus begin functioning again. This would provide an adequate supply of building materials, which is essential to the implementation of the proposed project and other projects under preparation/implementation in Mozambique. A more detailed description of the component follows in Annex 5(b). AF6IN My 10oo - 65 - ANNEX 5(A) Page 1 of 4 MOZAMBIQUE URBAN REHABILITATION PROJECT BUILDING MATERIALS LOANS AND THE SELF-HELP HOUSE CONSTRUCTION MECHANISM 1. The proposed levels of support for self-help house construction are as follows: Technical Support - Provision of technical documents "Plantas Tipos" - Possible construction of "Show Houses" - Overall technical supervision - Construction training courses - On-site technical supervision of construction, with building control linked to material supply. Material Support - On-site provision of building materials - On-site fabrication of building components - On-site availability of equipment and tools Financial Support - Building loans through the BPD to cover material and/or construction cost. Organizational Support - Formation of collective groups for building loan applications - Training of collective groups inc. administration and accounts. 2. This programme is based on that initiated in 1982 within the Direccao de Construcao e Urbanizacao of the Maputo City Council, through the Sector de Apoio a Auto-construcao. The programme is presently supplying support to a construction "Intercooperativa" including two small housing cooperatives and a carpentry cooperative, and 13 construction cooperatives engaged in prefabrication of dry pit latrine components under the nation-wide ba&ic sanitation programme. 3. Detailed proposals for the self-help house construction programe would be developed by the Direccao de Construcao e Urbanizacao, Sector de Apoio a Auto-construcao. Detailed proposals for the credit mechanism would - 66 - ANNEX 5(A) Page 2 of 4 be developed by the Coordination Unit for the project within the Direccao de Construcao e Urbanizacao together with the Banco Popular de Desenvolvimento. Detailed proposals for the collective group formation programme would be developed by the Direccao de Construcao e Urbanizacao, Sector de Apoio a Auto-construcao on the basis of the existing experience within the sector with cooperatives. 4. For self-help house construction it is suggested that a contract for direct material distribution from a local depot be let on a local competitive tender basis, with preference given to already existing small builders merchants. The conditions of the contract would include guaranteed material supply, and fixed price mark-ups for transport. The winner of the contract should be eligible for assistance under the GPE-UMF scheme, and this should include loans for purchase of adequate transport and construction of a depot. The mechanism for payment of mateial by households is suggested below. 5. For component fabrication - mainly latrine slabs, sand-cement blocks and possibly prefabricated lintels, doors and windows - it is suggested that this be undertaken by direct contract with a new construction cooperative, or an extension of rn existing coop., as these have specific expertise in latrine slab construction. Conditions should be as above, and the coop. should ve guaranteed support from the Sector de Apoio a Auto-construcao, Direccao de Construcao e Urbanizacao, and the National Programme for Basic Sanitation. 6. For equipment assistance, it is necessary firstly to decide what type of equipment should be available, but it is suggested that tools for construction be sold, and heavier equipment - for material transport to the plot, block making and scaffolding, be hired. It would seem logical to link this to the direct material distributor. 7. It is suggested that the construction of the buildings for the above activities be a local competitively tendered contract, financed from the GPE-SME Scheme, and possibly administered by DCU, as would be the construction of the Project Site Office, financed out of project funds. 8. The type of mechanism suggested for self-help house construction is as follows: (a) On allocation of a plot within the area proposed to benefit from the self-help house programme, the plot beneficiary will be informed by the DCU when receiving his/her land allocation document, via a printed leaflet of the possibility of a building loan, and what this may entail, and where advice can be sought - at the Direccao and Site Office. All plot beneficiaries should Le chosen from plot applicants who accept membership of mutual savings associations. (b) The personnel at the site office should be two permanent land control monitors, and two permanent construction control monitors, with previous experience in the DCU Seccao Externa, - 67 - ANNEX 5(A) Page 3 of 4 and basic training, which should be undertaken in the first year of the project. These should be supervised by a medium level construction technician and a medium level trained urban planner, based at DCU Sector de Apoio a Auto- construcao, and Sector de Planeamento Urbano, respectively, where they will be assisted and supervised by professional staff in charge of the project implementation. (c) Information on "Plantas Tipos", costs and bank loans should be permanently available at the site office and Direccao for consultation. As the project gets under way, communal meetings of plot holders could be held to better advertise and explain the self-help house construction mechanism. It is envisaged that some families may be relocated to the project area from Bairro Ferroviario infill site, and these families and their houses should be initiated first and serve as models for other new and existing plot holders. (d) On decision to apply for a bank loan, individuals may be formed into collective groups for mutual savings of, if possible, approximately similar income levels and locations, including instruction in basic collective organization, to be undertaken by the Cooperative organization staff (1 professional, 1 medium technical level accountant, 2 mobilizers). These group formations could be at specific time intervals. On formation of a group, of a suggested 50 families, the group should either elect or employ someone with sufficient schooling to be trained in basic accounting for the group. All families will be informed of the bank loan mechanism and its implications, but the accounts clerk will have specific training. (e) After formation the group should be assisted in its application for building licenses (which should be an extremely simplified, almost automatic process, as it is based on DCU plan types), and after concession of this, its application for a collective bank loan - the BPD accepting the collectivity of the group as collateral. (f) The applications should be collected by th. DCU, and proposed to the BPD, who should meet with the grou., collectively, to explain the implications, and individually, to independently assess savings capacity, which will be an integral part of the application. On approval by the BPD, a line of credit would be opened for the collective grou;, subject to regular payments, with details of each individual credit limit and respective material kit. These details would be registered in an individual credit book, which should include details of monthly group account credits and material debits. Both the individual and the collective group would have copies of this book, and the cooperative suppor: unit within the DCU Sector de Apio a Auto-construcao should meet regularly with both individuals and families and check these. - 68 - ANNEX 5(A) Page 4 of 4 (g) The individual plotholder and collective groups can decide whether to build collectively, semi-collectively (e.g. sharing heavy tasks only) or individually. Material can be "bought" from the Construction Coop. or Retailer on production of the credit book, when they will be entered as debits. Material kits should be divided in phases, representing phases of construction, and the DCU construction monitor should sign approval of completion of each stage before the next phase can be started. The phases suggested are: (i) excavation of foundations and latrine (to check layout on plot and depth); (ii) completed foundations and footing walls; (iii) completed walls; (iv) roofing and doors and windows; (v) completion (inc. plaster and floor slab); Labour costs would be paid out of collective group funds. (h) On completion of his/her dwelling, the house owner should be given the final land title and building license. The collective groups will continue to exist until bank loans are repaid, and could be used as a basis for future requests for assistance for house extensions. (i) The rate of interest to be applied to building materials loans would be the existing rate applied by BPD which is 9% per annum, subject to review by GOM and IDA as part of the annual review of housing strategy. AF6IN June, 1988 - 69 - ANNEX 53 Page 1 of 9 MOZAMBIQUE URBAN REHABILITATION PROJECT LOANS FOR SMALL & MICRO-ENTERPRISES THROUGH THE GABINETE DE PROMOCAO DE EMPREGO (MINISTRY OF LABOUR) Background and Justification Loans for Small and Micro-enterprises (SME) will be provided to facilitate the attainment of several important goals within the general strategy of urban rehabilitation and employment generation. The findings of a recent report on small enterprises in Maputo and Beira found that a major constraint inhibiting the operation or expansion of these firms was the lack of foreign exchange needed to purchase basic requirements (i.e. spare parts, replacement equipment or new equipment for expansion). Furthermore, credit facilities have, to date, not focussed on the needs of urban businessmen, concentrating almost exclusively on the promotion of rural production. Where credit is available, stringent collateral requirements make loans impossible for most small firms. At the sr- time, with substantial rationalization of the state sector, greater hopes are being pinned on the private sector to create more employment opportunities. Finally, many of the inputs for the urban rehabilitation programme will be provided by small construction firms needing assistance in acquiring equipment. the provision of credit and basic business training. The recently established Gabinete de Promocao de Emprego (GPE) of the Ministry of Labour, whose principal mandate is to seek ways of resolving the growing unemployment problem through initiating employment- generating schemes, will be the executing agent for loans to SMEs. The GPE will be expe-ted to stimulate interest amongst small entrepreneurs in taking advantage of the support funds while also providing assistance (often through other existing structures) in management training, technical advice and general administrative procedures. The key component of this initiative will be the USS3.Om foreign currency fund provided under the project which will be used for buying imported goods. The fund will focus its attention on those micro-enterprises employing about ten or less employees through labour intensive methods, but will also be available to larger small scale enterprises employing up to about 50 employees in the building materials sector. Many oi the smaller firms will be operating in the informal sector and are likely to be initially unregistered. It has been recognized that these firms hold great potential for employment creation as well as a capacity to significantly contribute to the urban rehabilitation program. Foreign currency loans will generally be small amounts ranging from a few hundred dollars to US$10,000 (but may be up to US$100,000 for larger firms in the building materials sector, which would be subject to more rigorous standards of appraisal than the micro-enterprises). - 70 - ANNEX 5B Page 2 of 9 Operation of the Lines of Credit Figure 1 offers a simplified diagrammatic representation of the main eler-ents comprising the operation of the lines of credit. Through the World Bank's Urban Rehabilitation Project's special account with the Bank of Mozambique a line of credit of US$3.5m will be opened with the GPE. Of this, about US$3.Om will be earmarked for the purchase of import requirements of small and micro-entrepeneurs and US$0.5m for technical assistance to the GPE. Countervalue meticais must be pledged initially against the technical assistance component. The meticais countervalue for funds used for imports only have to be paid against each foreign currency payment to import agents and will be guaranteed by the Banco Popular de Desenvolvimento (BPD). The GPE, responsible for executing a strategy of employment promotion in conjunction with a program for supporting urban micro- enterprises through the SME lines of credit, will define the criteria for the selection of borrowers, prioritize sectors of support (largely determined by the needs of the overall rehabilitation project) and set conditions for lending. The BPD, operating on behalf of the GPE in its capacity as a financial institution, will manage the fund and administer the loan accounts as well as participate in the selection of successful loan applicants. Bearing in mind that one of the main objectives for establishing this special fund is to allow for easier lending terms than normally available to entrepreneurs, the increased risk will be borne by the GPE. To reduce and shift the onus of the risk, the GPE will seek to promote loan guarantees through groups of borrowers such as trade associations. Recognizing the SME loans will not generally conform to the stricter selection requirements of commercial BPD loans, the BPD will be paid a management fee for its involvement, while the GPE will be held responsible for all aspects outside of the management and administrative functions allocated to the BPD. SME loan application forms will be made available at and be submitted to all Maputo and Beira branches of the BPD and the offices of the GPE. All applications will, however, be first processed and assessed by the GPE. Applications felt to need more careful analysis of credit worthiness or technical inputs may be passed on to the BPD or consultants for further consideration. (It should be noted that the GPE will draw extensively on the technical and management services offered by such agencies as the Institute for the Development of Light Industries (IDIL) for which consultancy fees may sometimes be charged). Applications deemed to qualify for loans will then be considered periodically (as determined by demand) by a committee composed of senior officers of the GPE and at least one official of the BPD (at the chief of service level or above). Those applications approved by the committee - 71 - ANNEX 5B Page 3 of 9 would then be submitted to the BPD. The BPD would subsequently verify that applicants have no outstanding loans within the Mozambican banking system. Once cleared, loan agreements could be negotiated with the applicants. The BPD would determine the rate of interest, repayment schedules and other relevant conditions for which it may be held responsible. Loans will generally consist of two components: (i) the meticais count4rvalue of imported goods purchased through the GPE's foreign currency account with the BM; and (ii) a meticais loan for the purchase of domestically available resources. The rate of interest applicable would be that currently applied by the BPD for similar loans, which ranges from 18 to 24% per annum according to the size and duration of the loan and the sector. The rate would be subject to revision by GOM to ensure consistency with national policies for credit as these are developed. Where a client can immediately repay the meticais countervalue of the imported goods, he will not be subject to any interest fee. The acquisition of imported goods as requested by loan applicants will be processed by the GPE through an import agent and paid for by the Bank of Mozambique. On receipt of the imported goods, the import agent will inform the BPD who will then issue a clearance certificate to the client to receive the good. On accepting the clearance certificate, the client has a period of ten days to lodge a complaint if goods were received in unsatisfactory condition. If no complaints is lodged, the client will be debited the meticais countervalue against his loan account. The BPD will treat SME loans similarly to other commercial loans in terms of monitoring and collection of payment. The GPE, as part of its role in supporting micro-enterprises and promoting employment, will provide a type of extension service, monitoring the developments of SME clients and offering them advisory services. Repayments of loans including interest, less the administrative fee levied by the BPD, will be deposited into the SME revolving fund. A Note on the Role of the Import Agent There are some 260 registered import agents of which about 40% are operated by the state sector. The GPE will be allowed to choose any of these for the acquisition of materials. There are no fixed rules as ynt about engaging import agents and no standard contractual arrangements. The Unit for the Coordination of Import Programs (UCPI) is currently working on regulations which would establish conditions for tendering, etc. Currently, import agents are expected to conform with the basic World Bank procedures such as obtaining three separate quotes from suppliers before placing orders. In certain cases (situations which are unlikely to affect SME loans), a tendering process will have to be undertaken to select an import agent for a particular order. - 72 - ANNEX 5B Page 4 of 9 FIGURE 1 PROPOSED INSTITUTIONAL ARRANGEMENTS TO ESTABLISH GPE'S SMALL AND MICRO-ENTERPRISE LINES OF CREDIT IDA I Banco de Mocambique BM 9 2 3 8 4 Import abinete e Promocao de Empreg Ministry of APE Finance 5 Ban o Popular de Desenvolvimento BPD 6 CLIENT - 73 - ANNEX 5B Page 5 of 9 Key to Institutional Framework Represented in Figure 1 1 - 2. IDA - BM - GPE. Standard procedural arrangements between the World Bank, the Bank of Mozambique representing the Government of Mozambique and the GPE for a loan agreement establishing the GPE small and micro-enterprise line of credit. 3. BM - GPE. The BM establishes a credit line of US$3.5m from the special account of the IDA Urban Rehabilitation Project. US$3.Om is to be used for purchasing imported requirements and US$0.5m .for technical assistance to the GPE. 4. GPE - Ministry of Finance. The GPE, through an agreement with Ministry of Finance, will be provided with countervalue meticais fund to cover the technical support for the GPE as well as contingency funds to cover loan defaults. 5. GPE - BPD. The GPE through an agreement with the BPD will establish mechanisms for operating the SME line of credit. 6. BPD - Client. The BPD will administer all loans to the clients once final approval has been given by the joint GPE/BPD selection committee. 7. GPE - Client. The GPE will determine the types of beneficiaries and sectors which would he given priority. It will promote the micro- enterprise support fund amongst potential clients. It will establish criteria to be used for selecting categories of borrowers. The GPE will be expected to work in close collaboration with other bodies dealing with other aspects of small scale business development such as GAPI, IDIL and the DPIE. 8. GPE - Import Agent. Engagement by the GPE of import agent(s) to purchase materials through the BM credit line. 9. Import Agent - BM. The import agent, working on the basis of orders submitted by the GPE (compiled from client applications), will be paid by the BM through letter of credit or goods in advance of payment. 10. Import Agent - Client. The import agent will supply the client (who will be informed by the GPD of arrival of goods) with the imported materials. Proposed Budget for the GPE Small and Micro-Enterprise Line of Credit I. Technical Assistance (Non-recoverable costs) (i) 1 Consultant with specialization in small scale enterprises, preferably with degree in economics and business administration as well as experience in Africa. 24 months at US$10,000 per month: US$240,000 - 74 - ANNEX 5B Page 6 of 9 (ii) Equipment: 1 computer, 1 printer, software, 1 photocopier, 2 typewriters, 4 filing cabinets, room dividers (1) US$25,000 2 vehicles (one each for Maputo and Beira) US$40,000 operation and maintenance of vehicles US$50,000 (iii) Training of GPE Staff 4 staff travelling overseas for an average of 3 months (travel 4 x US$2,000; per diems 4 x 90) US$40,000 (iv) Basic Skills Training for Micro-entrepreneurs Provision of materials, printed documents and tuition costs to supplement ILO-IDIL management training seminars (3) US$20,000 (v) Sub-Contracts to IDIL and other technical units to provide technical advice on feasibility of loan applications and on appropriateness of imported requirements (over 3 years) US$25,000 Total non-recoverable costs: US$440,000 Notes: (1) This assumes that the GPE will receive equipment allocated to it under the PPF agreement. (2) Two vehicles are essential for the project as much of the support for micro-enterprises will consist of "extension" visits by GPE staff to loan beneficiaries. (3) A management training program has recently been initiated by the ILO through IDIL. Course material is relevant to the needs of micro-enterpreneurs and it has been agreed that IDIL would provide seminars to entrepreneurs identified by the GPE who in return would fund some of the costs of mounting such seminars. - 75 - ANNEX 5B Pag. 7 of 9 II. Recoverable Costs (1) SME Lines of Credit US$3,000,000 Total Project Cost: US$3,440,000 Staffing Requirements of the GPE Small and Micro-Enterprise Lines of Credit Director-General Duties. In addition to the normal duties associated with the operations of the GPE, the Director will be expected to undertake the following activities: - coordinating the activities of the SME line of credit; - working in close collaboration with the SME consultant in determining general procedures, policy and selection criteria for SME loans; maintaining close contact with the relevant structures likely to be associated with the SME line of credit (e.g. BPD, Bank of Mozambique, IDIL, DPIE and GAPI); - presiding over the joint GPE-BPD commission which will regularly meet to evaluate loan applications -as processed by GPE staff; - deciding on the engagement of consultants to analyze certain loan application. Consultant Duties: - estoblishing, in close collaboration with the Director- General, SME loan policy, selection criteria for loan applications and conditions for lending; - teaching staff how to evaluate loan applications with GPE selection criteria; - developing an extension program (training and monitoring) to be administered by the GPE with all SME clients; - establishing a computerized records system for the GPE and to familiarize staff with the tse of computers; - 76 - ANNEX 5B Page 8 of 9 - liaising closely with all the relevant bodies concerned with the operation of the SME lines of credit and to ensure smooth liaison between coordinating structures; - advising the Director-General a out other issues affecting the operation of the GPE which may fall within the the consultant's field of competence. Qualifications. The consultant should hold a post-graduate degree in economics or business administratio, having experience in both development problems and small-scale businesses. Working experience in Africa would be essential, preferably with some knowledge of the Mozambican economy. The consultant should also be able to work and communicate in Portuguese and be familiar with data base computer systems. Administrator Dutiess - working in close collaboration with the Director and the consultant, being responsible for executing their decisions and orders; - responsible for the day-to-day administration of the SME lines of credit; - administering the documentation and records system for the SME lines of credit; - coordinating the scheduling of applicant interviews and extension visits by GPE staff; - responsible for all routine correspondence not requiring intervention by the Director or Consultant. Qualifications. The Administrator should have an educational level of Standard 11 or Standard 9 with equivalent supplementary professional qualifications, while holding a government grade of "Tecnico "B" or 'C" or Administrative Officer "A" with at least ten years of experience. Working experience should have been at least at the level of "Director" or "Chief" in the central or provincial governments or 3 years of management experience in a business. The administrator should have a working knowledge of English. 2 Economists Duties: - interviewing applicants and assisting them in the filling out of SME loan applications forms; - assessing application forms in terms of GPE selection criteria; - 77 - ANNEX 5B Page 9 of 9 - applying economic feasibility analysis to applications where possible; - preparing reports on potentially suitable candidates for the joint commission of the GPE; - regularly visiting SME loan clients to monitor activities of the enterprises and to give advice where possible on basic management and accounting principles as well as practical information about more specialized sources of information; - maintaining regular visits and consulting when necessary with relevant structures such as IDIL, DPIE and GAPI; - organizing s;:inars for entrepreneurs; - promoting the SME lines of credit amongst potential clients. Qualifications. The Economists should hold a bachelor's degree in economics or business administration and have at least 3 years of working experience in either the civil service or business. The Economist should be familiar with project appraisal techniques and basic business concepts. They should also have a working knowledge of English, while some experience with computers would be an average. 1 Accountant Duties: - undertaking cash flow analysis of projects; - advising entrepreneurs on the maintenance of basic bookkeeping procedures and other elementary business applications; - assisting with applicant interviews; - assisting other staff in undertaking basic calculations; - maintaining the general accounts of the GPE. Qualifications. The Accountant should have an educational level of Standard 9 (basic) at commercial scho-l with specialization in accountancy plus 3 years of relevant wor; experience in the state or private sector. AF6IN June 1988 - 78 - ANNEX 6 Page 1 of 7 MOZAMBIQUE URBAN REHABILITATION PROJECT INSTITUTIONAL DEVELOPMENT Obiectives 1. One of the risks of the proposed project lies in exceeding the local implementing capacity, given the limited number of technically qualified personnel available, from government officials and project managers, to skilled construction workers and equipment operators, and particularly in view of the numerous other projects being undertaken that will place simultaneous demands on the pool of human resources. To counter this risk, the main objective of this component is to provide the institutional support, training and technical assistance to ensure the capability of project execution, operation and maintenance. In addition the component also aims to support the implementation of the agreed local government restructuring and financial strengthening, issuing from the study of local administration and finances. 2. More specifically, consultant services or technical assistance, training, vehicles and equipment, and operating expense would be provided for central government and local authorities (see Table A): (a) to strengthen the capacity of the implementing agencies to execute the project and to provide on-going maintenance thereafter, such as in the case of the road and water rehabilitation and the solid waste management components; (b) to provide a project administration capacity were there is none, such as in the case of establishing the Project Implementation Unit (PIU) and HABITAR (Housing Management and Supervision Unit) in the MCA; and (c) to develop institutional capacity in areas supportive of, but not directly involved in project execution, such as in the case of the land registration and titling and management and maintenance of the housing stock. - 79 - TABLE A ANNEX 6 Page 2 of 7 IZAMBIQUE Urben Rebhbilitebton Project istittteul DevlOpmft Project TecstaI Truteteg EqcIp.& Operntlag --- Us$ fillites- - - Mumgnt Astat. veMeles Csta Lmssd Fordgn Tetel MAE DNFP DNFP DNFP DNFP 0.00 0.60 0.60 MT GPE GPE GPE GPE GPE 0.00 0.44 0.44 MNA/DNEC PIU PIU PIU PIU 0.03 1.20 1.50 DEP/CMpete P .Mnut PM PM PM 0.71 1.09 1.80 DMEP/IBdra P .Mmnut PM PM PM 0.45 0.70 1.15 DNEC/PMAD U.Gsstb. UGH UGH 0.05 0.45 0.50 CECM/DCU AAuto.Con|AAC | AAC | 0.14 0.10 0.24 CM/eCU/DU MA/Cad.st 0.02 0.10 0.12 CECH/DU Tr.t.Ltxo TL TL 0.71 3.16 3.87 CM P MAE/& 0.01 0.07 0.08 CECD/DPCA U.Gt.hb. UGH UGH 0.03 0.31 0.34 CECD/DCU AMAutCons AAC AAC 0.12 0.08 0.20 CECD/DUrb. MAE/Cadest 0.02 0.10 0.12 CECI/DSU I Trii.Lixoi TL TL 0.16 0.74 0.90 CECD/APIE IME/Me 0.01 0.07 0.08 Talt 2.46 9.21 11.94 - 80 - ANNEX f Page 3 of 7 Description 3. Under the component funds would be provided for the agencies listed in Table A. At each of these levels the emphasis would be on direct operational involvement, institutional building and in-service training of Mosambican counterparts: i the Ministry of State Administration (MAE), would channel US$1 million in technical assistance, funding for training, vehicles, equipment and operating costs to the Center for Urban Management. The Center will provide financial and administrative management training for municipalities, and assistance in management reform to local government, with the support of the Eduardo Mondlane Universit" and IBAM (Institute Brasileiro de Administracao Municipal), and funding from the EEC (about 550,000 Ecu). About US$400,000 would be specifically targetted for land registration training and technical assistance for the Directorate of Urbanism of Maputo and for the Directorate of Construction and Urbanism of Beira, as well as for housing management training for the APIEs of both City Councils; (ii) the Ministry of Labour will provide US$440,000 to the Gabinete de Promocao de Emprego (GPE) for project management, technical assistance, training and equipment, vehicles and operating costs to run the small scale and micro-enterprise credit scheme (see Annex 5B); (iii) the DEC within the Ministry of Construction and Water, would receive about US$2 million for project management, technical assistance, training, and vehicles, equipment and operating costs for the overall project coordination and tracking, for project implementation management (by the PIU, page 5 of this annex, and HABITAR page 7 of this annex), and for the development of a country-wide investment programming capacity; and to the MCA's regional offices for the execution of the building completion and apartment rehabilitation components; (iv) the city councils of Beira and Maputo would receive about US$3.77 million in technical assistance, vehicles and operating costs for the DSU's (Urban Services Directorates) for the solid waste management components, and about US$240,000 for project management vehicles and operating costs to the DCUs (Construction and Urbanism Directorates) for the respective sites and services and upgrading self- help programs, aside from the training provided by the Institute (MAE), and the housing management units provided by MCA; and - 81 - ANNEX 6 Page 4 of 7 (v) the agencies responsible for the implementation if the road rehabilitation and coastal protection works, DNEP/Beira and DNEP/Maputo, would receive about US$2.95 million in technical assistance, training and vehicles, equipment and operating costs for establishment of the on-going maintenance programs, which would eventually devolve to the municipalities upon project completion. Implementation 4. MCA would be responsible for reviewing Terms of Reference and directing all technical assistance. The project coordinator of the PIU would ensure that the two HABITAR field implementation teams (for Beira and Maputo) establish appropriate and compatible accounting and reporting systems. The technical assistance and consulting services would be channeled to the executing and operating agencies mentioned above - DNEP, the DCU's and the DSU's. In addition, short-term assistance would be provided at the end of each fiscal year to ensure that all project accounts are in order and that suitable financial statements are drawn up for external auditors acceptable to the Bank. 5. The total cost of technical assistance, training (including travel), equipment and vehicles and operating expenses under the overall heading of institutional development is of about US$11.9 million. Technical assistance and studies, i.e. consultant services, amounts to about US$4.6 million or the equivalent of 460 man/months of consultant services, excluding work already undertaken with PPF funds . It is estimated that about 320 man-months would be required for completing detailed final design, contract documentation, and contract supervision of the works component. In addition, about 140 man-months of assistance would be provided to improve and manage project financing, budgetary, accounting, auditing and reporting activities. Detailed Terms of Reference for the provision of the technical assistance and consultant services, as well as each of the action plans for their respective set of components, are under preparation by the MCA. - 82 - ANNEX 6 Page 5 of 7 PROJECT IMPLEMENTATION UNIT (PIU) 1. The PIU, established in the MCA shall be responsible for the overall coordination and supervision of project implementation, reporting directly to the Minister of Construction and Water under the advice of the MCA Steering Committee. 2. The PIU shall be headed by a full-time director with qualifications and managerial experience acceptable to IDA. 3. The PIU's Director shall be responsible inter alia for the following: (i) coordination of all project activities among MAE, MT, MCA, DNA, DNEP, the Conselhos Executivos, the Banco de Mocambique, the Ministry of Finance and other government agencies, official entities and IDA; (iii) preparation of project evaluation, progress reports and phasing of major components; (iv) meeting regularly with operating agencies to oversee project implementation activities; and (v) ensuring appropriate compilation and maintenance of project documentation and files. 4. The PIU will include in addition to its Director, the following key staff: (i) Project Coordinator who shall assist the Director in discharging his responsabilities, and shall be responsible, inter alia, for supervising the overall implementation of the project, participating in the selection and appointments of engineering, planning and architectural consultants, reviewing designs and other technical studies, preparing systems of cost control and critical path, monitoring of the physical progress of each component of the project, and establishing an appropriate communication network with the field supervision staff for Maputo and Beira. The Project Coordinator must have a BS in Civil Engineering with ten years experience in field supervision in construction of urban infrastructure, housing and community facilities valued at US$50 million or more, with a thorough knowledge of quantity surveying. He or she must have a working level of Portuguese or Spanish; - 83 - ANNEX 6 Page 6 of 7 (ii) the Financial Controller, who shall be responsible, inter alia, for keeping financial accounts and project accounts, preparing withdrawal applications for signature by the Bank of Mozambique, liaison with the appropriate office in the Ministry of Finance, approving payments on bills with field supervision certifications, preparing expenditure accounts, quarterly reports, and annual financial plans and submission of accounts for audit. He will also, assist the operating agencies and the CEs of Beira and Maputo in their financial management programs. The Financial Controller must have the equivalent of a BS in Business Administration or Management with ten years experience in Financial Control concerned with construction and/or municipal management. He or she must also have a working level of Portuguese or Spanish; and (iii) the Procurement Advisor, who shall be responsible, inter alia, for preparing appropriate procurement arrangements for the project implementation, packaging procurement lots for civil works, equipment, furnishing, etc, and reviewing certification of contract awards. He will also maintain quarterly updatIng of unit costs of materials and equipment and continued close liaison with field supervision staff of Maputo and Beira, and maintain weekly s!hedules of procurement. The Procurement Director must have a BS in Engineering and Accounting with ten years experience in purchasing and contract administration. HABITAR (Housing Management Supervision Unit) 5. HABITAR, to be established under DEC, shall be responsible for: (i) coordinating the implementation of all the housing related project components; and (ii) the overall management of the resettlement plan under Part B (f) of the Project. 6. HABITAR shall be staffed as follows: (i) a full-time Director, with qualifications and experience acceptable to the Association, and who shall report directly to PROHABITA's Director. The Director shall be responsible for, inter alia: coordination of the resettlement plan and al? Project evaluation and progress reports, and ensuring appropriate compilation and maintenance of Project files; (ii) Project Coordinator (Engineer) who shall report to the Director and be responsible, inter alia, for the following: supervising (including contracting supervision of) the construction and technical aspects of the housing related - 84 - ANNEX 6 Page 7 of 7 Project components and the resettlement plan; preparing cost control and critical path systems; reviewing procurement arrangements, calling for international or local shopping and certifying of contract awards; (iii) Financial Controller (Economist) who shall report to the Director and be responsible for keeping financial accounts for all the housing related Project components and the resettlement plan, preparing expenditure accounts, quarterly reports, annual financial plans and submission of accounts for audit, submitting for approval to PIU and processing certifications. He shall also review socio- economic and affordability aspects of housing related Project components and the resettlement plan; and ,iv) Field Implementation Teams (one for Beira consisting of a civil engineer and an architect, and one for Maputo consisting of a civil engineer) who shall be responsible for, inter alia, monitoring physical progress of all the housing related Project components and the resettlement plan, coordinating the activities of APIE and DCU of the CECB and CECM, reviewing the field supervision reports, maintaining weekly progress charts, coordinating the civil works with those of road, water and storm drainage rehabilitation, Project components as necessary. AF6IN June, 1988 - 85 - MOZAMBIQUE 7 URBAN REHABILITATION PROJECT Page 1 of 16 ESTIMATED PROJECT COSTS AND FINANCING PLAN mJucTCOhlMNNTns .0CALu M0a<iCa TOTAL .SlAhIIIs........ hdakdmretpn~sass tena. 9.88 e2.84 1,1t be UstsIetitt 153 st8 541 M,t~seleteasw 0.29 8 30 1.58 meOrcimp lS6da 0.19 0.75 0.94 ~cousatselIndi 0 17 0.49 0.6 åsb m itmee 062 1.94 2.55 hneftMwsi s 0.18 0.73 0.90 wr6Swrag ~ 15 1a 3.59 13.18 16.77 ftsesr s tale 0.94 .71 2.65 t~ute W~t x~tat 1.24 456 5.7 etresa.swrsehRa. 0.40 1.0 2.20 &aO r ~ / 1.02 5.11 6.13 Ceastd En~CmAred 8.49 2.13 2.52 Bar* 0.33 1.33 1.6 thus 016 0.70 086 7.04 2439 51.55 l lkustem Rehttttes IsheMltettenet incomsApta. 8.09 4.64 5.72 M194* 0.78 3.34 4.11 are 0.31 1.30 1.61 UgrieahIsita& rva s 1.4 7.17 9.72 M% 0.23 1.18 1.41 tapscrms 0.28 1.18 1.46 Bolm 0.05 0.17 0.23 etröerenita 0.08 0.34 0.42 JMafttareershAv.(M) 1.20 5.00 6.20 Cam.etsusf8eItang 8.34 6.45 7.79 Mla 1.10 5.33 6.42 era 0.25 1.12 1.37 4.27 10.56 23.25 tilSeld Waste M matg 2.74 3.43 Geira 0.14 0.54 0.68 0.83 5.28 4.81 eV Lim et CrnaIt I1d1 tre Eatfrpriass 5pprt 0.00 3.00 3.00 Cnet fkr Hme Cu~strhan 000 1 90 1 90 0.00 4.90 4.90 V lmstltutiesl swtBvlag.ent TAA .forMiut.ferOutP/NSU 0.07 042 0A48 TAAT.frsnSHdwet./OSUs(S)&0A 0.00 0.5 0.51 TAA .hr Mludp ~*~t( 0.00 1.00 1.00 TA T.fmr wslt ~1a tat.rpie (OPE) 0.00 044 O4 St o In piEs ff ina(a .PPF) 0.05 0.90 0.95 0.12 3.27 .3O VS Projast IMesat TÅA T.1r tA4PIU 0.06 1.44 1.50 TA RNECMOPCAfrS&Reh 029 129 158 0.35 2.73 3.08 GS COST 12.61 57.43 70.03 PlAysted Uffnhgenms 1.23 497 6.20 PrIceCntigmsas 1.39 6.17 7.56 TOTAL LIST 15.23 60.57 83.79 FlNAMIlG PLAN LEAL fMREIGN TOTAL ....----- $Uscha---------- Gornmfnt 6.01 0.00 6.01 IDA 6.14 53.86 60.00 C-"«ncig 3.08 14.71 17.79 felad 2.32 11.12 13A4 Soda 0.76 3.59 4.35 TOTAL 15.23 69.57 83.88 - 86 - ANNEX 7 Page 2 of 16 MOZAMBIQUE URBAN REHABILITATION PROJECT ESTIMATED PROJECT COSTS m CICOMP~NS m.. ... .......1im--.-... .--... ..ew------- ---19211.-- ---12 -.... 1983 -T- AL . L.eå Frp ToW Lmc Forp Tal .c Fug Toe t.o FoWg Tad L~a Fogn Tdt t. Te Lca Fg Tet neadSDren.snlIn I. I.I 0.19 0.57 2.84 2.01 15 4.71 5.30 .05 2.0 2.94 2.91 &.01.t4 v~ ödn~imiom 821 fIf in i 15 I 225 om 14 2.0? 1.3 3a 1[41 1 1m ~is mm 1.02 0.2 644 056 1.30 1." M#Ng.I0éo,. 05 9s 14 1.51 el &5 : ig 6 1 23 @. tt 1« 9 .75 . M.paceed5l#elge 2 02 100 17 04? 8 s 017 a4 1 D pir~Rn einm~son 6.03 013 021 874 Ien 14 117 1.5 9es 0.02 1.94 2 omNrssm.n 000 1 e 04 s 0.0 0.24 031 1.18 873 . w aS a~mgshdo 014 04 .N0 0.30 1.1 2.18 1.30 441 &.N 9.77 1.34 2.11 .M1 1.11 1.13 3.0 13.1s 1.7 Hop.watdRI1 e 10 0 .25 030 9.34 097 1.32 G»0 12 .55 0.25 .23 .* 1[4 1.71 2. ~ sdlw4 Ee uila km0 DU0 636 831 872 314 .N 6.51 1.11 1.43 1.24 456 1.71 8Se S ofins31 b 020 .20 004 052 0 030 1 144 0 0 1. 2. as I - pit 0 0.081 6. 1.02 &.11 013 Om~E nc C. & .n I 0.07 .M ..a 0.27 .WI 1.35 a22 .a 1.11 .4M 2.14 2.a e0 9.00 6.11 0.44 6.55 6.22 ffl 1.11 133 1.33 1.E t .007 0.07 00 .15 .4 en 1 _.as e.te I .71 fe l .94 1.71 9.75 .15 3.14 4.1r 3.19 1.31 13.11 1.84 4.32 .IG 7.4 24.20 31.34 sahanm-- LowknaAph c.910 c .91 @ .91 s .^ N . t3 1.6s 2.80.88 2.a 3. 4 1.50 4.5 &.7 t2pÉ O9 900 6.23 1.26 1.65 04 2.0 256 1.70 134 411 e 0.0 610 0.44 054 6.20 =N 1.50 131 1.31 1.42 pugre edSs88e ices 1.e 1.t3 1.3 0.35 1.3 1.72 1.20 ta 1.12 .S 0.29 1.34 .ns 0.20 &.ff 1.5 .17 .n M o 001 0.01 o.11 047 0.51 602 021 024 05 0.29 034 6.5 0.20 1.25 1.23 1.1 1.41 Mqpulceeuos 001 0O. 014 0.5 a72 014 0.69 73 6.50 .20 1.10 1.4 kokm .01 0.01 0.65 015 0.22 0.06 .8 0.1 17 O.23 0.60 0.04 017 t.21 6.04 0.17 0.21 0.06 15 0.34 .42 assstrnsA,g1F R006 000 0.06 .U 1.20 l.0 . cauleIums9gs a.e~ . 7 &.1? 4.7 5.W & L 35 1.57 1.93 D.N .91 L.0 1.34 .45 .78 M~la .9 00M 0.62 401 484 027 1.23 1.50 00a 1t 5.33 14 like l 0 äffi 0.17 00 0- . 0 0.35 0.43 C.01 8.25 1.12 1.37 9 1.20 .2 1.34 . 7.41 5 4 -24 5.19 8.74 3.25 3. 11.5M .2|1 .25 a.m1 K.U K.U0 4.27 1 0 23.23 0m en 0.06 000 a0 6.8 2.74 l. ee~s om0 1.14 054 e a. en, .0 .14 t54 1. t.0 .a t.0 *.14 1.54 .a0 a.51.50 k 50 .a5 c50 ..3 3.2 I emd1ssmeEn0sie8ipo 1.50 6 0.501 1.7 1.751 .75 1.75 1.se 1.s 10 1. *.m 3.50 3.e <>ugHaneoe< sean .N 0. SE 5 6.50 Im . 120 .20 1.0 1 .S 1.50 1. WM .50 1. .91 0 l.6 1 . m 1.25 1.205 1.0 1.25 1.25 178 a0 an. L. . 4.91 4. f T.A.Trn w~nrP/D Us 10 00104 024 .20 113 0.16 1. 17 .4 a. TAsT.kesuIdwesiosplee f01 .0? 0.07 7 07 m 10 1.51 1.51 T.A.AT.WIira;i~w~Mamu4pE) 001 10 0.4 6.38 6.31 O30 .30 10 1.50 1.9 T.ALT.l9md4a EiNlepnse (GFE) 104 0.04 0.20 120 0.10 0.10 0. 110 . å44 14 i~IE.aEag g lPW) Des 94 0.4 0.0 k.n 0 1.25 0.25 0.25 0.25 k. m f. f l &.M 0.44 .4 @.1 .8.7 L.64 .71 0.7 . d.-3 .S .t li . 12t 3.25 3.38 VI l ene asd T.AåT.~mr4cM~J 103 0..3 102 0.47 14 06 0.47 .4 102 0.47 14 f.l 1.44 1." T.ALJrDIEcq NcA sslneb 0.03 Oe 0.01 6.42 0.51 6.10 0.42 0.2 0.10 042 0.52 _.20 1.20 1.5 .a5 .10 D.1 9.11 0.0 1.60 8.12 t . 1.11 0.12 .a 1.01 .35 2.3 3.91 eE COST a.n .4 a.50 2.54 13.2 1.6 430 17.48 21.71 2.72 1.53 13.25 I.MJ 1.151 1.20 I.MJ I.1 1.70 12.1 57.42 7.03 IpscaOmau • 0.00 0.21 194 116 0.34 122 1.66 121 0.6 0.07 0I 0.131 &.11 &0N 9.l CU 1.23 417 120 pernogaaig 1. 6.15 078 8.94 52 2.20 2.3 053 138 175 .16 &l1 10 .1 130 129 7.68 TOTAL CosT l. c .9 1 1.5 2.11 94.74 17.15 .1 28.72 2 .8 2.30 12.57 15.17 8.111 1.44| 1.54 M.1 tNI 8.0 15.22 .N8 M. - 87 - ANNEX 7 Page 3 of 16 MOZAMBIQUE URBAN REHABILITATION PROJECT MAPUTO WATER REHABILITATION AND EXTENSION (In US$'000) Naetverk ebabtlitatt -----1986------- -----1989------ -----1990----*- -----1991----- -----TOTAL----- Local Foreign Total tacal Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total I Civil Works Cleaning/Rellning 0 145 96 241 145 96 241 144 97 241 434 289 723 Network Maintenance 35 44 79 106 132 238 106 132 238 107 132 239 354 440 794 District Meters 0 0 46 29 75 0 46 29 75 II Equipmaet water Meters 0 90 142 232 0 0 90 142 232 Vehicles & Equipment 8 t58 166 3 S2 55 0 0 it 210 221 DI PipeTools 0 7 7 0 0 0 7 7 AC Pipe 0 328 328 0 0 0 320 328 Velves 0 35 35 0 0 0 35 35 Fittings 0 30 30 0 0 0 30 30 III Prfessasnal Services M1aintenance Program 50 50 ISO ISO 0 0 0 200 200 BASE COST 43 252 295 344 972 1316 297 257 554 251 229 480 935 1710 2645 Physical Contingencies 4.3 25.2 29.5 34.4 97.2 131.6 29.7 25.7 55.4 25.1 22.9 48 93.5 171 264.5 PriceContingencies 2.58 15.12 17.7 20.64 58.32 78.96 17.82 15.42 3324 15.06 13.74 28.8 56.1 102.6 158.7 TOTAL COST 49.88 292.3 342.2 399 1128 IS27 344.5 298.1 642.61 291.2 265.6 556 8 1085 1984 3068 Network Exteasia ***-*1988------ -----1989------ -----1990------ -----TOTAL----- Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total I Civil Works Mehotas Dist./Chmanc. Line 0 307 644 951 102 215 317 4091 859 1268 Network Extension 0 406 502 908 407 503 910 813 1005 1818 It Equipmeat Water Pumps 0 5 220 225 5 221 226 10 441 451 Vehicles& Equipment 2 28 30 1 9 10 3 3.7 40 DI PipeTools 0 782 782 0 0 782 762 AC Pipe 0 655 655 0 0 655 655 Valve 0 91 91 0 0 91 91 HDPE Fittings 0 36 36 0 0 36 36 III Prefessiatal Services Dot. En.g & Supervision 275 275 200 200 175 175 0 650 650 BASE COST 2 303 305 719 3139 3858 514 1114 1628 1235 4556 5791 Physical Contingencies 0.2 30.3 30.5 71.9 313.9 385.8 51.4 111.4 162.8 123.5 455.6 579.1 PriceContingencies 0.12 10.18 18.3 (3.14 188.3 231.5 30.84 66.04 97.60 74.1 273.4 347.5 TOTAL COST 2.32 351.5 353.8 834 3641 4475 596.2 1292- 1886 1433 5285 6718 MOZAMBIQUE URBAN REHABILITATION PROJECT BEIRA SEWERAGE REHABILITATION (In US$'000) PROJECT SUBCOMPONENTS . -----1988------ -----1989------ -----1990------ --TOTAL----- I Civil Works Local Foreign Total Local Foreign Total Local Foreign Tetal Local Foreign Total Main Sewer Reconstruction 40 220 260 160 880 1040 200 1100 1300 Extension Secondary Network 100 100 200 100 100 200 Dwelling Connection Repairs 100 100 200 100 100 200 II Equipment Trucks (2) 220 220 220 220 Tractor Trailer 28 28 28 28 Tools 52 52 52 52 III Professional Services . Supervision (covered by Dutch aid) Studies& Engineering (PPF) 200 200 200 200 BASE COST 200 200 40 520 560 360 1080 1440 400 1800 2200 Physical Contingencies 24 108 132 Price Contingencies 40 180 220 TOTAL COST 464 2088 2552 00 ab MOZAMBIqUE URBAN RERABILITATION PROJECT ESTIMATED PROJECT COSTSt DRAINAGE JUNE 16 CIRCLE (In US$'000) PROJECT SUBCOMPONENTS -----1988------ -----1989------ -----1990------ -----TOTAL----- Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total I Civil Works Road 47 151 198 47 151 198 Drainage 143 429 572 143 429 572 II Prefesslonal Services Supervision 82 82 28 28 110 110 Studies & Engineering 54 54 54 54 BASE COST 54 54 190 744 934 Physical Contingencies 10 10 26 85 111 8 28 36 34 123 157 Price Contingencies 3 3 9 44 53 4 15 19 13 62 75 TOTAL COST 67 67 178 640 818 59 222 281 237 929 1166 0i 0 ANNE 7 Page 6 of 1o MDZAMBIQUE URM REWILlTATION PROJECT ROADS REHABILITATION - MAPUTO (Coast in U.S. Dollars) ------------------------------------------------------------------- - COMPONENT FOREIGN LOCAL TOTAL ---------------------------------------------------------------------- General provision: Laboratory and office 300,000 Operation lab. and off. 36,000 Vehicles 45,000 Operation of vehicles 27.000 General provision total 345,000 63,000 408,000 Karl Marx 138,000 66,000 204,000 Guerra Popular 39,000 17,000 56,000 Tanzania 114,000 49,000 163,000 Paulino S. Gil 36,000 18,000 54,000 Mao Tse Tung 195,000 85,000 280,000 O.A.U. 183,000 78,000 261,000 Eduardo Mondlane 263,000 130,000 393,000 Vladimir Lenine 124.000 58,000 182,000 Marien Naaubi 200,000 106,000 306,000 Trabalho 240,000 125,000 365,000 Anoola 201 ,000 103,000 304,000 Volcano 191 000 107,000 298,000. 16 de Junho (roundabout) 28,000 12,000 40,000 24 de Julho 164,000 70,000 234,000 Non-motorised lane 117,000 85,000 202,000 Miscellaneous items 174,000 70,000 244,000 Surf. treat.& emerg. rep. 667,00 277,000- 944,000 Supervision: 1 Site Enaineer 180,000 1 Quantity Surveyor 120,000 2 Inspectors 8 100 Air travels 30, 000 Housing 48,000 Supervision total 378,000 8,000 386,000 Maintenance 1,3399000 237,000 1,576,000 GRAND TOTAL MAPUTO: 5,136,000 1,764,000 6,900,000 DNEP 22.04.88 AM=E 7 Page 7of 16 NOZAMBIQUE URBAN REHABILITATION PROJECT ROADS REHABILITATION - BEIRA (Cost in U.S. Dollars) COMPONENT FOREIGN LOCAL TOTAL General provision: Laboratory and office 150,000 Operation lab. and off. 24,000 Vehicles 39.000 Operation of vehicles 16,000 General provision total 189,000 40,000 229,000 Rehabilitation EN6 1,066,000 416,000 1,482,000 Miscellaneous items 29,000 9,000 38.,000 Surf. treat.& emerg. rep. 398,000 142,000 540,000 Supervision: 1 Site Engineer 120,000 1 Quantity Surveyor 80,000 2 Inspectors 8,000 Air travels 15,000 Housing 32,000 Supervision total 247,000 8,000 255,000 Maintenance . 755,000 1559000 910,000 GRAND TOTAL BEIRA: 2,684,000 770,000 3,454,000. DNEP 22.04.88 92--AM= 7 Page 8 of 16. URDAU RIMAILITATONPOJC ROADS RINAUILITATION - I5Ra (Cost In U.S. Dollars) CEENT I 1989 1 1990 1 M0TL I FOREIS LOCAL TOTA 1 FORIGN LOCA TOTAL I FOREIN LOCAL TOTAL hmral provision: Lboatory and office 150,000 Wieration lab. and off. 24,000 Meicles 39,000 tieration of whicles 16,000 ewal provision total 160,000 20,000 190,000 29,000 20,000 49,000 189,000 40,000 229,000 Rehbilitation EN6 352,000 137,000 489,000 714,000 279,000 993, 00 1,066,000 416,000 1,482,000 isacellanusn items 15,000 5,000 20,000 14,000 4,000 18,000 29,000 9,000 38,000 . f. treat.& ewq. rep. 128,000 47,000 175,000 .270,000 :95,000 365,000 398,000 142,000 540,000 Sgwvisian: I Site Engineer 120,000 1 intity Surveyor 0,000 2 Inspectors 8,000 Air travels 15,000 Housinq 32,000 Suervision total 90,000 2,000 82,000 167,000 6,000 173,000 247,000 8,000 255,000 Maintenance 520,000 77,000 597,000 23500 78,000 313,000 755,000 155,000 910,000 9IS TOTA SEIRA: 1,255,000 288.000 1,543,000 1,429,000 482,000 1,911,000 2,684,000 770,000 3.454,000 DW 25.04.88 I O 8~ i 9 ' Dw!E 9 A § § § k - t ktUt t i' I!~ -94- ANNEX 7 Page 10 of 16 MOZAMBIQUE URBAN REHABILITATION PROJECT ROADS REHABILITATION - MAPUTO (Maintenance Costs in U.S. Dollars) FIRST YEAR LOCAL FOREIGN TOTAL LOCAL AID - RESOURCE FUNDS Equipment 39,450 420,550 460,000 0 460,000 Tech. assist. 19,250 120,000 139,250 19,250 .120,000 Materials 27,902 164,637 192,539 27,539 165,000 Hand tools' 2,915 6,857 9,572 5,572 4,000 Sal. & wages 47,454 0 47,454 47,454 0 Veh. & eqpt. op. cost 24,930 192,837 217,767 172,767 45,000 Roadmarking 885 16,825 17,710 17,710 0 ------------------------------------------------------------------ Subtotal 162,786 921,508 1,084,292 290,292 794,000 Overhead 15,613 57,143 72,756 72,756 0 TOTAL 178,399 978,649 1,157,048 363,048 794,000 SECOND YEAR LOCAL FOREIGN TOTAL LOCAL AID RESOURCE FUNDS Tech. assist. 13,250 87,500 100,750 13,250 87,500 Materials 27,902 164,637 192,539 27,539 165,000 Hand tools 2,915 6,657 9,572 5,572 4,000 Sal. L*wages - 47,454 0 47,454 47,454 0 Veh. & eqpt. op. cost 24,930 192,837 217,767 172,767 45,000 Roaduarking 885 16,825 17,710 17,710 0 Subtotal 117,336 468,456 585,792 284,292 301,500 Overhead 15,613 57,143 72,756 72,756 0 TOTAL 132,949 525,599 658,548 357,048 301,500 ------------------------------------------------------------------ -- FIRST + SECOND YEAR 1,815,596 1,095,500 Hereof: Equipment 460,000 Tech. assist. 207,500 Materials 330,000 Hand tools 8,000 Veh..& eqpt. op. cost 90,000 DNEP 22.04.88 -95 - ANNEX 7 Page 11 of 16 MOZAMBIQUE URBAN REHABILITATION PROJECT ROADS REHABILITATION - BEIRA (Maintenance Costs in U.S. Dollars) FIRST YEAR LOCAL FOREIGN TOTAL LOCAL AID RESOURCE FUND9 Equipment 25,500 259,500 285,000 0 -285,000 Tech. assist. 19,250 120,000 139,250 19,250 120,000 Materials 16,005 69,918 85,923 15,923 70,000 Hand tools 2,204 3,563 5,767 3,767 2,000 Sal. L wages 31,776 0 31,776 31,776 0 0 Veh. & eqpt. op. cost 16,590 124,945 141,535 107,535 34,000 Roaduarking 330 6,270 6,600 6,600 0 --------------------------------------------------------------------- Subtotal 111,655 584,196 695,851 184,851 511,000 ---------------------------------------------------------------------- Overhead 10,038 30,704 40,740 40,740 0 ----------------------- ---------------------------------------------- TOTAL 121,691 614,900 736,591 225,591 511,000 ------------------------------------------------------------------ SECOND YEAR ---------------------------------------------------------------- ------ LOCAL FOREIGN TOTAL LOCAL AID . RESOURCE FUNDS - -- --------~---------------------------- ---- -- ---- Tech. assist. 13,250 87,500 100,750 13,250 87,500 Materials 16,005 69,918 85,923 15,923 70,000 Hand tools 2,204. 3,563 5,767 3,767 2,000 Sal. & wages 31,77.6 0 31,776 31,776 0 Veh. & eqpt.-op. cost 16,590 124,945 141,535 107,535 34,000 Roadmarking 330 6,270 6,600 6,600 0 ------------------------------- - ----------- Subtotal 80,155 292,196 . 372,351 178,851 193,500 ----------------------------------------------------------------- Overhead 10,036 30,704 40,740 40,740 0 ---------------------------------------------------------------------- TOTAL 90,191 322,900 413,091 219,591 193,500 ------------------------------------------------------------------- FIRST + SECOND YEAR 1,149,682 704,500 Hereof: Equipment 285,000 Tech. assist. 207,500 Haterials 140,000 Hand tools 4,000 Veh. L eqpt. op. cost 68,000 DNEP 22.04.88 - 96- ANNEX 7 7a-g=e! of 16 MOZAMBIQU! URBAN REHABILITATION PROJECT UPGRADING. SITES SERVICES AND HOUSING glebel costs TOTAL Foreign Local Sales Tax Currency Currency 1. ON SITE CIVIL WORKS 793805 637745 120691 35369 1.1 Site Preparation Compensation 22750 0 22750 0 Plot Demarkation 28296 24529 3767 0 1.2 Road 9261 6174 2646 441 1.3 Sanitation 59981 57125 0 2856 1.4 Water Ditribution 203178 163700 29804 9675 1.6 Water Connection 163506 127622 28098 7786 1.7 Electrical Distribution 222202 177995 33626 10581 1.8 Electrical Connection 84630 80600 0 - 4030 2. PROFESSIONAL SERVICES 1050474 912604 137869 0 2.1 Project Management 620000 520000 100000 0 2.2 T.A.&T. Self-Help 120000 120000 0 0 2.3 Supervision Infr&Shelter 310474 272604 37869 0 3. SHELTER 2463615 2088300 258000 117315 3.1 Core Units 1354500 1032000 258000 64500 3.2 Material Credit - 1109115 1056300 0 52816 BASE PROJECT COSTS 4307893 3638649 516560 152684 Physical Contingencies 430789 363865 51656 15268 Prices Escalation 646184 545797 77484 22903 TOTAL PROJECT COSTS 5384866 4548311 645700 190855 4. ASSOCIATED PROJECTS 4.1 Acess Road 187605 134003 44668 8934 4.2 Support S.S. Entreprises 700000 700000 0 0 BASE ASSOCIATED COSTS 887605 834003 44668 8934 Physical Contingencies 88760 83400 4467 893 Prices Escalation 133141 125101 6700 1340 TOTAL ASSOCIATED COSTS 1109506 1042504 55835 11167 QUeer 5sesS NSedSB ....Seee e essee 9 aSi ese 11 W as15 esa essee1 SIUS S essase Ilu 9lee sse eSIS £M3 Wa ma Oa £~sses na 0 e s e se 5 Ue ess mmas se1se 0 an$ lea "n 016b9 6mSN~ mne sea ea.es esee * us asa ata 0ss e set sanl es sNI m uSAS ws 5se enee SIISa 66*se amW IIs ...... .... ø*~ esaB aS lUi ~ maisms 0 Ø&OWB ' saas 9Sea 9s Z~ a~ 4 Wa ann OMIDØ o ~m m m9 stum @ o0~91e ess 5ise WIISe Wssus 5en essas mmiis IBISe eaas re USS 5Uge'mm s m= i nh =W WM ti 4~ **Twia ras 5lS Wesis5etWd s's mi mm* *Ntle 0~S =et ML OGL USD ~a ~1 P~e5 i& gift ~t l 0141, ma w l @*La = Uvift lla W~ e A Ioes e ess es e i&s ei mm s~ om Lsomms mss ~UM* ~ Avl gea s s aa~ s sa e ami ms' il am4 åi ø~m seu ma ~m ~sa & MG~ ne W$ ø = se S s * su r s sms 9 see o ms s s l m~ lse mt o m ~r : at ass 55se4 seeU e s r suas e su=6 om a~ 94 m a* =si suI 8 ffi ~$ fim ~ m * a Ws wee s ~i dlnn WA&A m mæ.s de wAG. a~ øffl d~.a WAM omISOH 0N SZOIAM3S 653ZIS lONIoanOi 153roR, moilvlmsvWIVi mimu 12wSH20R L X-N6 -L6- 一98- ANNEX7 Poge 14 of 16 即ZAHB工叩E URBAN REHABILITATIOH PROJEC? 塑更Q遜匹壟’」莖靼鳥虜藝聾翼墜盛翅1即邸寡軾G 奮馴口•••，口自口•總•，“目•寫． 馴網他，鯽嚇戶亂“瀾細細調開鰓細嚇，亂綢目為翰調網他，牌嚇神繡目魚由• 馱開凡•唱C購”間唱蒲•C留州•啊中•”啊坤絮•勾．”開坤C•”口闖魚• •．口口．,．劇簪儿個悶綢祝•唱屆婦．•．中開，唱俗••自蠶開．緘9倡口，個•劇磚•．，了•個．,，鯧•劍騙開龍•．論為•••唱挪 Lt馴細狗開•叫臘目神馴間闢 物叫州馴物齣龍祠•觀馮O ，臘顱•留細觔鱸調劊皓言編鈴訂訂 11細d個之t•必唱枓祝擊婦綢鳥 •，么目細糰嗡．勾哺州閱口加個颼開，馴口擊•奮•個遛鵝寫神劇開才藝”開 個．．切d•鸛自唱輛編•跑O專個t．離‘．了•O跑馴鬨陽弱7擊 唱必切頃開自“闢糰”關嗡神寫劊騙寫•物寫才4t事I奮讓勾？翻闢嗡，•”為“n •，顫j市口馴目凶勵哺開劇U劇鱸17神審唱寥馴4編•0S•騙 •．口劇向個目中．州爾開媽n陽釁寫馴婦劉洶斗1騙騙織開勵鈴開讓唱調洶•個劇繪詞勵 鳥網口開祠曄神購絨馴口”開讓寫‘訂•哺，言馴關總，話•開•．&，•，&,&，•劇駟••跑，馴開隨，才中闢陰寫馴鬨總• 亂•鰍間細目自細••開d露常寫弱寫讓n專弱唱叫闖勵l館寫專寫個神弱寫胞馴膩勵奮館寫鰓l別騙馴皂馴闖口 亂壇言A爾．物鹹•口細．細劇鬨勵瀾劇鬨目媚000啊劇坤編劇勵唱劍磚 細J細戶網哺”細向劇黝目細〞t奮才n藝鋼瞌鴉讓馴闐隨•I騙認藝l讒1開6審磁幼馳開寫•關總屆•• 亂•州口牌蔥口6了馴口滬．•．口自口t蠶，馴口萬煙言騙口二，，口•口•口磚嗡言騙•．讓馴網細馴婦奮個藝唱司藝屆•唱跑•I，••露‘啊細 亂讓中開矓悲目細煙n鬧開劇6劇繪l讓馴闖嗡颼栽磚‘萬了劉必戲6馴繙I讒劇膩勵驢劉磚 •名們目闢奮目必悶戲倡黠唱開唱補勵開讓自個賺編馴唱開屆胞中自開鵝網細 職開織，變唱草糰中闢吋•，引卜論跑藝奮讓磚司9,0．•，寫震編屆編二•，0個，擊麾必，二寫邸，•10口蠶寫藝．•寫•…寫司．口引網賺，跑寫馴畸煙口口己• 奮引卜婦寫l之命朋坤萬O鰓騙騙馴1劇門坤寫露騙，馴磚I劇賺寫開唱奮“弱遺口領鬨磚寫馴洶鑰鵝 讓嗡馮開審•編潤，司6劍輝卸闕才常才華啊，瞭寫馴磚才討之弱1鰓露了囉寫網細讓奮勰闢I：藝調曦司讓寫擊 馴開魷網協目討個閱口勰劇婦言口l，弱開騙寫了，•，，物，••龍．言啊，•闕，，神蠶寫寫蠶，，口寫總啊，&&nl•卹1.1齣記個口•寫寫讓． ‘劍口閱織當胎．口闢口訪• 《l自口勵細d••才6弱l華劍沁寫磚劇隨自•鰓4 咸蠶馴馴購唱，禺盧自啊棘開言寫馴鬨勵矓寫劇鬨嗡頗洶劇婦州坤劇勵也奮織闖勵1啊瞭闖 劉騙權自口馴認鱸言．屆口口寥口，，言6自個念．司纏口，中騙60二萬司司個•個自0司•個•••••，習劇關准，才口口口0•• 州眸哺物緘•馴•開自•寫I鴉l鵝咸勵命婦7的專司O以勵頗閱闐00．奮劇勵11馴矯O• h細購觔神州戶間仰婦4離藝魚闢賺6利繙I寫婦中口以瞭唱口劇繙O•言屆馴婦鵝開O•• 調開既州戶職涮柑C．馴口實藝易，糒口OC．寫劇關闕，寫個蠶，,l,60屆馴網開•唱個口劇坤••t奮驪馬O•蠶讓蠶騙•0•• .. . 一 一 一 - 99 - ANNEX 7 Page 15 of 16 MOZAMBIQUE URBAN REHABILITATION PROJECT HOUSING COMPLETION AND MABI71TATION GLOBAL COSTS U.S.DOLLMS ----------- TOTALS ------------ ------------ --------- ------------ --------- D9SCR11'S IOM TOTAL FOREIGN Z OF LOCAL x OF CCRRENCY TOTAL CURRENCY TOTAL 1.- CIVIL WORKS 12 731 546 10 397 926 80.96 2 423 620 19,04 1 RRHABILITATION so 6 404 297 4 323 366 89.00 1 080 841 20.00 ------------------------ ------------ ------------ --------- ------------ --------- Maputo 3 878 426 3 102 741 80.09 775 685 20,00 Beira 1 1 525 781 1 220 625 80.00 305 156 20.00 1 ------------------------ ------------ ------------ --------- ------------ --------- : 1.2.- COMPLETION 7 327 339 5 884 560 81,67 1 1 342 779 18.33 1 ------------------------ ------------ ------------ --------- I ------ - - -- --------- 1.2.1.- Maputo 6 990 639 4 995 120 82,01 : 1 895 419 17.99 1 1. 2.2. -'Beira 1 236 809 1 989 449 80,00 : 247 360 20,e@ 2.- SUMVISION it 61", 347 1 G7 347 11 100,00 0 0,00 ------------------------ ------------------------ 2.1.- RKWILIIATION 324 263 1 324 253 100,00 0 oleo ------------------------- ------------ ------------ --------- ------------- --------- 2.1.1.- Maputo 232 706 232 706 1e9,99 0 0,00 2.1.2.- Beira 91 547 91 547 100.00 0 0.00 ------------------------ ------------ ------------ -------- ------------ --------- 2.2.- COMPLETION 293 994 293 094 100,00 e 0.00 ------------------------ z ------- ------------ --------- ------------ --------- 1 2.2.1.- Maputo 243 622 243 622 100.00 0 0,00 2.2.2.- Beira 49 472 49 472 100.00 0 oleo BASI PROJECT COSTS 13 348 893 10 925 273 81,84 2 423 620A 18.16 Physical Contingencies to 1 334 889 1 087 400 1 81,46 Is 247 489 : 18,54 Price Zscalation 2 002 336 1 631 099 81,46 1 371 236 : 18.54 TOTAL PROJECT COSTS so 16 686 117 13 643 772 81,77 : 3 042 345 18,23 1 3.- PROJECT MANAGEMENT 1 000 000 1 000 009 100,00 Is 0 oleo T 0 T A L 17 686 117 1 14 643 772 82.80 : 3 042 345 1 17,20 NOTE: "B.C.C.I.* and Torre "A" included * a m p 1r 's p y - r - yr L- e * '1 . e , - ae - fl 168 -8 .. . IiIÉI3 wm - . . . . .. S 2 a sm 8 2 CI ... >Ul OD tID4>li - - - - - - - - - - - - - - -- - - - - - -0 - 101 - ANNEX 8 MOZAMBIQUE URBAN REHABILITATION PROJECT ECONOMIC ANALYSIS 1. The overall Economic Rate of Return (ERR) for those components for which it could be measured, representing :ome 70% of total project cost, is approximately 39% These components, which consist primarily of i.ifrastructure and shelter rehabilitation, are described below. Items for which the ERR was not calculated include emergency erosion control (base cost US$2.5 million), solid waste management (base cost US$4.1 million), lines of credit (base cost US$4.9 million), institutional development (base cost US$3.4 million) and project management (base cost US$3.1 million). The benefits for these items are not easily quantifiable, although there would clearly be benefits to infrastructure and amenities from erosion control, to health and environment from municipal services and to productive employment from the lines of credit. Infrastructure Rehabilitation 2. The following ERRs are estimated for the main project components: Cost Component (US$ million) ERRs (%) Maputo Road Rehabilitation (a) 6.99 85% Maputo Drainage (b) 0.94 20% Maputo Costa do Sol Bridge (a) 0.66 28% Beira Road Rehabilitation (a) 3.45 52% Maputo Water Rehabilitation (c) 8.44 20% Beira Water Rehabilitation 6.13 15% Tot.l: 26.61 Average 38% Notes: (a) For methodology, see "Draft Engineering and Economic Feasibility Report", February 1988, Roughton and Partners. (b) For methodology, see "Dranage Praca 16 Junho, preliminary design, April 1988, DHV. (c) For mathodology see "Inception Report", January 1988, Sir M. MacDonald and Partners. - 102 - ANNXx 8 Housint Roohabilitation 3. The following ERRs are estimated for the main project components: Cost Component (US$ million) ERR ( Building Rehabilitation and 13.51 73% Completion (a) Sites and Services 9.72 181 Total: 23.23 40% (a) For methodology see Bratex report on rehabilitation and completion of buildings. AF6IN June, 1988 - 103 - ANNEX 9 MOZAMBIQUE URBAN REHABILITATION PROJECT ESTIMATED DIRECT SKILLED AND UNSKILLED EMPLOYMENT GENERATED BY PROJECT IN CONSTRUCTION INDUSTRY Total Cost Total Labor Salary Project Components US. Million X Labor US$ Million USS/Mo. Man-Months Man-Years I. Infrastructure Rehablittation 81.88 18o 5. 46 140,6s6 11,7fe II. Housing Rehabilitation 23.28 22X 5.16 6o 162,66 8,5600 III. Municipal Services Support 4.11 165 6.66 40 16,6e" 1,300 IV. Lines of Credit 4.90 20X 1.0e 41 24,5 GOg20 Sub-Total: 68.57 19 12.8 261,56 28,660 V. Indirect Employment 11,700 (at 590 of D1 rect Em .4yment) Total: 35,200 AFOIN Jun*, 108 MAP SECTION 40 42 Palma wo.,asTANZANIA Mocimboa da Prai6 met mr: nMueda Mecula12 esou' /V /ASSA M A LA W I Montepuez PEB 0LILONGWE ma6a Nacala Mecubur! Mingarl chifunde Cuamb bd m- Mocambique T E TE NAMPULA C h.. Songo Blantyre Cuj 0 Ma'oc; k I Mol6cue 16' Milange Errgo6 TE0 169s 1 TE AngoChe S auvonga Mocuba Moma /o 4 ZAAM7B EZ'IA... Nbamnalabud Namnacurral Pebane HARARE Caa Nicuadata 0Cale GUELIMANE 1 Gotro ngosa Chindle Suss ndenga 20. 0200R 20B 20 Espungaber o 00URBAON REHABIUTATION PROJECT Mambone inhassoro PROJECT CITIES OTHER BANK SUPPORTED PRJECTS: :22o Vltanculos /0 BEIRA CORRIDOR ChIcualacuala INDUSTRIAL REHABILITATION CREDIT AREA PAVED ROADS ------ PAVED ROADS. UNDER CONSTRUCTION GAZA47 EARTH ROADS RAILWAYS 4TERNATIONAL AIRPORTS OTHER AIRPORTS . INHMBANERIVERS, PORTS 24o Mass ngir SWAMPS 4 S 0 U TPROVINCE CAPITALS 24 SOUTH slii NATIONAL.CAPITAL.S Chol< e A FR I C A Quissico ---PROVINCE BOUNDARIES Magud wha)a eINTERNATIONAL BOUNDARIES XAl-XA1 260 AUTO SVAZILAND. MBABANE V'sta smpeMooebsvrsnsrem0 10D 200 300 KILOMETERS IBRD 20915 o MOZAMBIOUE URBAN REHABILITATION AND EMPLOYMENT GENERATION PROJECT %4 BEIRA PROJECT SITES PROJECT: * Apartment buildings rehabilitated ] Housing sites Coastal protection works EXISTING: Rice and other intensive low ground cultivation Built-up areas Main roads IN/HA MIZA // -1VHA IZRailroad Rivers International boundaries I/NHA M/ZUA / rh. dW. dru eP!aid aY Tho % ou s b Ve040 canx 4s4 a w6r. fte -e -JCt AIRPORT flcrWo of 749 iwara M I antalao FeS ae Gop ab *TANZANI ZAMBIA -r MALAW 71 (~for reset-Ntlemanl 40 22* INDIA N( OCEAA SOUTH ..... AFRI M to Indian Ocean,'' MAY 1988 IBRD 20916 STA-.ZANIA M O Z A M B l U E ZAMBIA LARE VALAW s URBAN REHABILITATION AND EMPLOYMENT GENERATION PROJECT MALAWI MAPUTO PROJECT SITES PROJECT: n Apartment bulldings rehabliltated age ta'Housing sites Coastal protection works June 16th circie 22 22 EXISTING: 1WD1A N Low Intensity residentlal/agricultural sOUTH Intensive cultivation ARIc m 2[- i Built-up areas Main roads To Moamba and Swaziland Railroads Rivers International boundarles Laulane Costa do so) bridge Tø Moamb & re iland tag Bairr0 R/VRiolana Canico - (fØor resettlement) MAY 1988