Ghana - Local Government Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 12332-GH STAFF APPRAISAL REPORT REPUBLIC OF GHANA LOCAL GOVERNmENT DEVELOPMENT PROJECT JANUARY 18, 1994 MICROGRAPHICS Report No: 12332 GH Type: SAR Infrastructure Operations Division Western Africa Department Africa Regional Office This document has a resticted dishibution and may be used by redpients only in the performance of their offcicl duties. Its contents may not otherwise be dislosed wthout World Bank authoizaion.  CURRENCY EOUIVALENTS Currency Unit = Cedis (C) US$1.00 - Cedis 705 C1.00 = US$0.00142 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS ADRP Accra District Rehabilitation Project DA District Assembly DFR Department of Feeder Roads DUR Department of Urban Roads ECG Electricity Corporation of Ghana EPC Environmental Protection Council ERR Economic Rate of Return GDP Gross Domestic Product 5HA Ghana Highway Authority GIMPA Ghana Institute of Management & Public Administration GOG Government of Ghana GWSC Ghana Water and Sewerage Corporation ICB International Competitive Bidding IDA International Development Association KfW Kreditanstalt fur Wiederaufbau LCB Local Competitive Bidding LGDP Local Government Development Project LGTI Local Government Training Institute LVB Land Valuation Board MFEP Ministry of Finance and Economic Planning MLGRD Ministry of Local Government and Rural Development MLF Ministry of Lands and Forestry MWH Ministry of Works aad Housing NDPC National Development Planning Commission O&M Operation and Maintenance OHCS Office of the Head of the Civil Service OJT On-the-job Training PAMSCAD Program of Action to Mitigate the Social Cost of Adjustment PNDC Provisional National Defence Council PWP Priority Works Project RIAP Revenue Improvement Action Plan SAR Staff Appraisal Report SD Survey Department SOE Statement of Expenses TA Technical Assistance TCPD Town and Country Planning Department TOR Terms of Reference TSC Technical Services Center TSU Training Support Unit UNDP United National Development P.ogram UST University of Science and Technology (Kumasi) FISCAL YEAR January 01 - December 31  FOR OMCLAL USE ONLY REPUBLIC OF GHANA LOCAL GOVERNM-ENr DEVEIOPMENT PROJECT TABLE OF CONTINS Page No. CREDIT AND PROJECT SUMMARY ....................................... i 1. INTRODUCTlON .............................................. 1 A. Background .......................................... 1 B. SectorStrategy ........................................ 6 H. THEPROJE .................................................9 A. Project Objectives ........................................ 9 B. Project Description ........................................ 9 C. Project Cost and Financing Plan ............ ................... 15 m. PROJECT IMPLEMENTATION ............. ........................ 18 A. Institutional Framework ............ ........................ 18 B. Operational Plans and Manuals ......... ....................... 19 C. Procurement Arrangements ........... ....................... 19 D. Disbursement ........................................... 22 E. Accounting and Auditing ............ ........................ 23 F. Reporting, Monitoring and Review ............................. 23 TV. JUSTIFCATION, RISKS AND ENVIRONMENTAL IMPACT .................. 24 A. General Benefits ......................................... 24 B. Economic Evaluation ................... 25 C. PovertyImpact ................... 26 D. EnvironmentalImpact ................... 26 E. Project Risks ................... 27 This report is based on the fdings of World Bank pro-pisal and appraisal m that visited ana il Marh/April 1993 and June/July 1993 respectively. These missions compised Mesus. Jagdish Bal (Senior Urban Fiane Speciait and Mission Lder), Alan Carrol (UJrban Planner), Jerry Silvermn (Princal Imstiuonl Developmet Spel), Francesco Sam (Pruemn Specialit), Godfrey Ewool (Eiee), Chri Boes (Coundtmt, Muncipal Enginer), Ian Wethedll (Consultant, Municipal Finanoe Speciadist), and ichard James (Consultant, Financial Analyst). Messrs. Steve Berkman (Senior Train Specialist) and Hermdo Oarzon (Consultant, Economist) paticipated in the pro-paial. Mr. William Dillinger was the peer reviewer. Mrs. Bauba Baboa-Machado provided producttan support. The responsible managers are Mr. Ja Wright, Din Chief, and Mr. Edwm Lim, Deartnt Director. This document hss a mtrcted distribudon and may be used by reciplonts only In the performance" of thdr officia dudies. Its contents may not otherwis be diclosed without Wotid llak authorizaon.|  V. AGREEMENTS AND RECOM?MENDATION ............................. 28 ANNEXES 1. Proffiles of Project Cides 2. Ifrastructure RehabRiltation and Envirowmental Systems Improvements 3. Opeation and Maintenance 4. Enmnena Assessment S. District Assembly Finances 6. Property Reauation 7. Land Use Planning and Development Guidance S. Mapping Component 9. Insdtttional Strengthening and Capacity Building 10. Trainin 11. Implementation Arrangements 12. Action Plan to Project Effectiveness 13. Procurement 14. Disbursement Schedule 15. Technical Assistance 16. Detailed Cost Tables 17. Summary of Economic Rates of Return is Memorandum of Understanding 19. Monitoring and Performance Indicatrs 20. Letter of Local Government Development Policy 21. Supervision Plan 22. Implementaion Schedule 23. DocMen available in the Project File MAP IBID No. 25191  REPUBLIC OF GHANA LOCAL GO,ORE DEVELOPMENT PRO CREDIT AND PROJECT SUMMY J :ze~ Republic of Ghana Bodles:La. Ministry of Local Government and Rural Development (MLGRD), Ministry of Works and Housing (MWH), and the District Assemblies (DAs) governing the 11 cities included in the project (Bawku Bolgatanga, Wa, Techiman, Sunyani, lo, Koforidua, Agona-Swedru, KetalAnloga, and Cape Coast/Elmina). rdit Amount: SDR 27.7 million (US$38.5 million equivalent) arms: Standard with 40 years maturity f h:-imdIng Tern 'Me Government would transfer the proceeds of the credit in the form of grants to the executing agencies. Im" DescrlUd* 1 he project has three objectives: to improve basic infrascture and services in 11 key medium sized cities, to support the government's decentralization program and to strengthen the technical, managerial, and financial capacity of the participating District Assemblies. There would be two main components. The first, babhiliUia and . gradin2 of urban infrastructure and services, consists of (a) rehabilitation of existing town center roads and associated storn drains plus traffic management measures, (b) upgrading of existg public markets and motor parks, and (c) improvements in solid waste collection and disposal and in urban sanitation. DAs will also receive assistance in setting up Operation and Mintenance Funds. The second component, institutional strenphening, comprises (a) the provision of technical assistance, trainig, and eqLipment for capacity building of the 11 District Assemblies in the areas of management, municipal fimance (including property revaluation), and engineering (mcluding operation and maintenance); and (b) strengthening of the capacity of selected central government agencies to support the Districts in the areas of mapping (Survey Department), property valuation (Land Valuation Board), planning Crown and County Planning Department), policy and training (MLGRD), and implementation (rSC). Overall implementation of LGDP would be handled primarily by the Technical Services Center (TSC) of the MWH, on behalf of the MLGRD. Tne project would be carried out over seven years. Imfita: Ihe project would support national economic development by improving infrastructure and services in cities dtat play significant economic roles as regional market centers, regional and dirict dministrative centers, and service provision centers for industry, commerce, and agriculture. The project would also improve living  conditions for the over one half million residents of the project cities by providing better roads, dramnage, sanitation, garbage collection and disposal, public markets, and motor parks. All of these interventions entail significant improvements in environmental conditions. Approximately 10% of the total population benefitted by the project would be below the poverty threshold. The project's support for greater revenue mobilization and more efficient financial management by the District Assemblies would promote the sustainabiity of urban seovices and, in the longer term, the expansion of coverage. Thm risks related to limited implementatia capacity in MLGRD and the DAs would be mitigated by the participation of TSC as the main implementing agency. TSC, which has gained extensive experience through the implementation of three earlier Bank projects, would act on behalf of the former entities in handling most tasks related to procurement, accounting, and contract adminstration. The potential problem of counterpart funds availability would be addressed by making the initial deposit of the government's contribution a condition of credit effectiveness. The risk that operation and maintenance of facilities will not be sustained would be handled through the establishment by each District of a special O&M account. IDA would contribute a share of the funding of these accounts on a declining basis for their first five years during project implementation. Finally, the risk that revenue mobilization efforts would not be implemented dfectively would be addressed by requiring, as a condition of effectiveness, that the District Assemblies fonnrly ratify and commit themselves to the implementation of their respective Revenue Improvement Action Plans.  -iii- PROWTOMr MNA.NCIN PLAN 4 DIBUSEMN-A L4eal Foral Totl (US$ Cml) A. FtotdPod0 Roads and Drainage 6.23 9.29 15.52 Madwe & Lory Park 2.71 3.86 6.57 Wafst Managm 2.86 9.59 12.45 Daign l.lS 0.00 1.1S~~1.1 Sub-Totsl I2. 217 usq Ministy of Local Govenmnt 0.14 0.02 0.16 Town & County Plannig 0.19 0.14 0.33 Land Valuation Boaud 0.40 0.26 0.66 Policy Reiew (DA Rev. Mobil.) O.OS O.0Q 0.S Swvey Department 0.11 1.44 1.55 Technil Srvic Center 0.63 0.07 0.70 Fu Poject Preation 0.48 0.00 0.48 Taning (11 Disticts) 0.51 0.00 0.51 Tebnica lAsat. DAs 2.16 0.54 2.70 EnAinecr/supervisor(ftV) 0.00 Sub-Total 42 3.0 7-74 ngajentl ow stCo Operation and Manenance 332 0.00 3.32 Personal svice Contrcs L31 Sub-Totl S21 ..52 Total BaN cost Physical Contiagenc 1.76 1.72 3.48 Pre Conigenoisa 1.43 L 3.40 MOal"PROlEwT COST t AD IDA 14.23 24.28 38.51 Goverment of Ghana 5.S5 0.00 S.S5 Distict Asaembls 3.16 0.00 3.16 Co-Finac0g S. 3.09 Sub-Total 2.0 294 C. Igae IDA Fuscal Year 1 1997 } 99 2 Annul 2.70 4.62 7.70 9.24 5.78 4.62 3.85 Cumulatie 2.70 7.32 15.02 24.26 30.04 34.66 38.S1 D. 1 l -teR of Relmo. Avra MMRS for a preevc samp of pojects whose vale eprse about 27% of otal physical wvos: 90.1% for roads and dama; 18.4% for madkts; 15.8% for solid wafst; an 35.0% for liud waste. L Cd. No 11 Inlue US$2.67 mMion in duties and ta.  REPUBLCOFGHANA I. A. BPdC0 Introduction 1.1 Cities and towns, as centers of industry and services, contribute more than half of Ghana's GDP. Urban settlements also pay a vital role in rural development as market and service centers. 'Te severe inadequacy of urban infrastructure and services - such as roads, water supply, sanitation, and solid waste maagement - is a major constraint on the productivity of urban households and enterprises and, consequenty, on national economic development. Conservative estimates indicate that over the 1990-95 period about UTS$300 million equivalent would be required just to rehabilitate basic infrastructure and services in the five largest towns I/ to say nothing of the cost of providing new facilities and services. 1.2 Improving the coverage of urban infrastructure and services requires not only investment, but also major efforts to build institutional capacity in the fields of planning, management, finance, and operation and maintenance. Weak municipal institutions are unable to provide adequate services, asse the sustanability of services and investments, or mobilize funds for adequate operation and matenance, let alone new capital investment. 1.3 GO0's initiatives in the urban sector over the last few years include a number of multilateral and bilateral-assisted urban projects, the provision of incentives for private developers to become Involved in housing, and the initiation of a national program of decentralization. The World Bank's assistance for urban development began in 1985 with the Accra District Rehabilitation Project (ADRP), which included infrasucture and technical assistance primarily for improved resource mobilization and financial management. Subsequent Bank-supported projects are the Priority Works Project (PWP, FY88), which focused on labor-intensive infrastructure rehabilitation and upgrading in Ghana's four main cities and the Urban II Project (FY90), which extends the ADRP experience to the four secondary cities of Tamale, Kumasi, Tema, and Sekondi-Takoradi. Bilateral assistance (Germany and Canada) has funded recent projects for waste management in Accra, road improvements in Kumasi, and water supply improvements and technical assistace in secondary towns. UNDP has supported technical assistance projects during the past several years for development of an Accra structure plan, improving sanitation in Kumasi, and training for local government officials. 1.4 GOG's potentially most far reaching move to date in the area of local government has been to embark upon a very ambitious decentralzation program. The Local Government Law (PNDCL 207, 1988) gave axthority for the establishment of 45 new districts Oocal governments), bringing the total to 110. 1.5 Ghana's policy with respect t decentralization is embodied primarily in: 1. The 1992 Constitution of The Republic of Ghana (effective January 7, 1993); jj Acor, tK Tans, Sdi-Takoa a4 Tamae.  -2- 2. The Local Government Law 207 (1988); 3. Various Local Government (District Assembly) (Establishment) Instruments and; 4. The Local Govermment (Urban, Zonal, Town Councils and Unit Commite (Establishment) Instrument (1991). 1.6 Chapter 20 of the new Constitution (consisting of 17 Articles) is devoted entirely to "Decentralization snd Local Goverunent.n It establishes that "Ghana shall have a system of local government and administration which shall, as far as practicable, be decentralized. " The term 'decentralization" is not further defined, except by inference. i.7 PNDC Law No. 207, which preceded the 1992 Constitution, is more specific. It assigns directly to DAs the responsibility for performing those functions previously perfomed at local levels by the deconcentrated arms of 22 cenal government "Departments/Organizations', including: Community Development; Town and Country Pianning; Public Works; Feeder Roads; five Departments responsible for various functions within the agriculture sector; Ghana Education Service; Ghana Highways Authority; and office of the District Medical Officer for Health. 1.8 In addition, the individual Establishing Acts for each of the 110 DAs, which supplement PNDC Law No. 207, all include a list of 86 specific responsibilities. Among those are responsibilities for various aspects of: health (other than sanitation); construction, rehabilitation, and maintenance of buildings; agriculture and livestock; roads/streets; education; markets; sanitation; water; electricity; car parks; conservation; and community development (the latter category is a "catch all" involving a wide-range of functions particular to rural areas). 1.9 It Is the clear intention that the DAs will have complete, devolved responsibility for policy formlation and planning for the sectors assigned to them as well as for the management of investment project implementation and on-going operation and maintenance. However, District Assemblies have limited access to sources of revenue to finance this large range of local goverment activities. 1.10 The World Bank undertook a Local Government Sector Study in FY92 Z/ to assist the government's decentralization program. The study addressed: 1. The process and scope of devolution of functions; 2. The local/central fiscal relationship including revenue sharing; and 3. The management and instiutional capacity of central government institutions involved in the decentralization process and of District Assemblies to plan, finance, manage and maintain local infrastructure and service delivery. 1.11 The Study found that, under the existing legislation, there is duplication of authority between District and other levels or institutions of government for various functions (finance, maMgement, and the provision of infrastructurz, and services). A further problem is that DAs are not yet ready to 2/ "Ghana - Sungheoing Local niatve ad Buldng Loca Capacity", RPort No. 11369OH, Februa 18, 19.  -3- assume the whole range of responsibilides assigned to them because of resource constrints and lack of management and technical capacity. Part of the solution is found in the changing role of the public sector. As government at all levels shifts from directly providing services to planning, budgeting, facilitating, and supervising their provision, the need for many types of skills within the public sector is reduced. A massive institutional development program should not be required at the local levels. New management systems and skills can be phased in. Even with a more modest approach, however, implementation of Ghana's decentralization policy will require perhaps ten years. 1.12 The main conclusion of the sector study is that government needs to clarify its approach to decentralization by identifying specific functions within subsectors which ought to be: (i) privatized; (ii) devolved to DAs; (iii) assigned to DAs as principal agents; andlor (iv) delegated to specialized institutions, such as parastals, teaching or research institutions, or "special districts* (e.g., water disstricts). 1.13 This SAR outlines the proposed Local Government Developnmnt project. Details are presented in Annexes. Section I provides a brief overview of the sector and outlines the policy framework and Bank sector strategy. Sections 11, m, IV and V respectively outline the project, implementation plan, project justification, benefits and risks, and agreements, conditions and recommendations. Profiles of cities included in the project are presented in Annex 1, while detailed project description, cost estimates, schedule, etc. are presented In Annexes 2 through 16. A summay of the economic analysis is presented in Annex 17. Detailed project analysis, consulting reports, and other relevant project data have been placed in the project files. Population and Urbanization 1.14 Thirty-one percent of Gb na's 14 million people 3t live in some 185 urban areas. The two largest cities, Accra (the capital) and Kumasi (the second city and capital of the Ashanti Region), 41 dominate, accounting for 35 percent of the urban population. Together the five largest cities account for 50 percent of the urban population, while the 11 LGDP project towns account for 11 percent of the urban population. The Accra Region, with 85 percent of its population living in towns of more than 5,000, is by far the most highly urbanized of Ghana's 10 administrative regions. 1.15 Urban population growth rates declined from 4.8 percent p.a during the 1960-70 period to 3.2 percent during 1970-84. Assuming, conservatively, that the 1970-84 rate of growth continues between 1990 and 2000, the urban population would increase by about 1.6 million persons (reaching 35 percent of population), with about one-half of this growth occurring in the Accra Region. As the economy continues to improve under the current Economic Recovery Program, urbanization can be expected to accelerate, placing even greater stress on already overburdened system. Still, Ghana has one of the lowest rates of urbanization in Africa, and the opportunity exists to manage this growth in a socially and economically efficient way. Local Government lnitutions and Institutional Reform 1.16 Ghana has a three tier structure of government: Central, Regional and District. Regional administrations function primarily as administrative agents of central government and are relatively / EBstimated at 12.3 million, in 1984 census; 1970-84 rate of growth (3.2% p.a.) assumed to continue. 41 Populati in 1990 about 1.2 million and 0.6 million respecdvely.  -4- weak. District administrations have historically been responsible for managing local services, with the exception of water and power, which are managed by Central Government parass. During the period prior to 1988, Ghana's governental system was highly centralized. More recently, a formal policy of decentralization has been promulgated. 1.17 Despite the initiation of decentralization, the strucues of authority currently in place for financial and personnel policy and management remain higldy centrdized. District Assemblies are almost completely dependent on Central Govermment for investment finance and for staff to Implement, operate, and maintain such investments. lTe GOO is fuly aware that the current situation contradicts, to some extent, Its own decentralization policy objectives and is drafting changes In its financial and personnel management systems which are expeted to be more consistent with those objectives. In the meantime, however, substantial ambiguities exist as to how, and by whom, responsibilities assigned to District Assemblies will actually be performed. This situation Is complicated further by the large number of entities at Central Government level whose activities affect actual operations at district level. Compounding the problem of diverse stakeholders at Central Government level is the continuation, defi4_ of discrete operations by the district-level staff of the 22 previously centralized Departments of GO whose responsibilities have, 1jre, been transferred to District Assemblies. Urban Infrastructe 1.18 Local government systems in Ghana were once the most highly developed In Africa. However, urban institutions and infastructure deteriorated considerably during the economic crisis of the 1970s and early 1980s. Modest improvements have begun to be made during the past decade, in part with IDA support, but conditions in most urban subsectors remain poor. 1.19 Water: aw 207 assigns responsibility for water supply to the DAs, though decisions must be made in consultation wit the Ghana Water and Sewerage Corporation (GWSC). In fact, virully all water systems have been constructed and are being operated and maintained by GWSC. GWSC operates under the Ministry of Works and Housing (MWH) and is governed by a board of directrs appointed by central government. It functions through a head office and ten regional offices. 1.20 Water supply deficits are high in cities and towns. Reliable, safe water through domestic connections is available to a minority of households. The first priority In urban water supply is rehabilitation of existing facilities, including restoration of designed capacity and improvement of reliability and quality of service. The World Bank assisted Water Sector Rehabilitation Project (CR 2039-GH) has initiated an effort to achieve these objectives. A vital part of the strategy is improving management efficiency and effectiveness of GWSC. Because of the specialized nature of urban water supply and the shortage of qualified personnel, DAs will need to continue relying on GWSC. Thus, the reform of GWSC and the restrucuring of its relationship with DAs should be a very high priority. 1.21 SaWdon: Apart from three water bome sewerage systems in Accra, Tema and Akosombo, which are managed by GWSC, sanitation in urban areas is through on-site systems (septic tanks and pit latrines for both public and household toilets) managed by DAs and individual households. Ihese faclities in most cases are inadequately designed and built and poorly maintined. Waste too often contmiae ground and surface water. In general, the capability of DAs to operate and maintain public toilets and cesspit emptyig services varies from fair to non-existent. The private sector peforms some of these services in the larger cities. Because of the high cost of conventional piped sewerage, moderate and low-cost on-site technologies will remain the principal solution to urban  -5- sanion, especially In the medium sized and small cities. The main challenge i8 wot techologicl, but in the area of managemen. 1.22 SoUd M A: Refse colltion i the responsibility of DAs. Accra add Kumasi Metropolitan Assemblies, which have benefitted fom bilateraly-finded projec in recen yea, now provde impwroved solid waste collection nd disposal services. However, revenme collection rem-ens insufficient to meet depreciation costs. The World Bank assisted Urban I prject is providng assistance In solid waste to Tema, Sekondi-Takoradi, and Tamale. In smail and medium cities. solid waste collection services handle only a small fraction of refuse generated. Much garbag is dupWed In open heops which lie uncollected for long periods, or In drainage chamds which become blocked. Fina disposal sites are usaly simple dumps, not saitary landfills, with attendt eaviromenal problems. Local officials In the cites identify solid waste collection and disposal as a very serious problem and a maor piority. Low-cost technologies are being and should conltnue to be applied. Coracting to the private sector should be practiced wherever feasible. Although achievig full cost recovery is a long-tem goal, in the short run operating costs can be covered through appropriate fees. In the case of markets, the cost can be recovered through the daily license fee. For domestic Pri, it can be Inuded in the property tax. 1.23 hags: A large share of urban roads are in poor condition. In some cases ks toad segment have deterioratd to the point that travel is slow and hazardous. Tbree agencies are cently responsible for proviing and maiaining roads: (a) the Ghana Highways Authority (GRA), responsible for trunk roads, (b) the Department of Feeder Roads (DFR), responsible for rural roads, and (c) the Department of Urban Roads (DUR), responsible for non-trunk roads in the cities of ccra, Kumasi, Sekondi-Takoradi, Tamale and Tema. All hee agenies are under the Mistry of Roads and Highwap. Under Law 207, DAs have overlapping responsibilities for (a) construction, reabbilitation and maiece of streets, (b) construction and maintenance of public roads other dtan tunk roads but including feeder roads, and (c) maitenance, as agents of OHA, of htunk roads lying wihin the boundaries of their area. In pracice, DAs have not begun to exercise these onsibilies. Thi is a good example of a subsector for which responsibilities need to be cladified. 1.24 m D *ak Responsibility for storm drainage is n clear under Law 207. Roadsde drains usually are included In road constuction, rehabilitation and maitence. However, area-wide draing recves scant ateio In many cies, lack of storm draiage contributes to unhealthy ponting of stagnant water and sometimes localized flooding. 1.25 Marks Ad Motor Parks: Public markets and motor parks are provided and operate aclusively by DAs, and they are frequently tte DA's major revenue eamers. These faciities are usually quite primitive, and much potial exisu for incresing revenues through upgading of the physical infastructure, charging higher fees, and improving management. Urban Fnae 1.26 Around 1960, local councils in Ghana could cover their recurren expenses and make a small rbutoa to capital investm . As a result of the economic and political problems of the 1970s and early 1980s, conditions deteriorated greatly. Serious deficiencies in local government finance are begining to be addressed, but much remains to be done. For exmple, with ceral goverment paying most of the cost of local government staff salaries, Districts have little incentive to utilize staff efficienty. Property values, the basis of the property tax, until recenty were not revalued since the 1960s. Budget and finamci management systems remain archzic. Fees and tarifs too often bear lIe redaonshi to cost, and billing and collection systems are inefficient and prone to cornupio  Dstict Assemblies tend to dispease their efforts In colleting umerous relatively unproductive revenues rather than concentrat on a few productive ones. 1.27 District Assemblies derive their revenue from transfers from cent government and local revenue mobilization. In 1992, centra government transfers to the 11 Districts in the LGDP ranged from 42 to 63 percent of total revenues. Transfers currently consist of (i) grants covering 50 percent of the salaries of DA employees, (ii) grats for 100 percent of the salaries of civil servants posted to Districts, (iii) ceded revenues - comprising the entetaiment duty, casino revenue, billing tax, business regitration fees, advertisement tax, and daily transport tax which are collected centrally and assigned to DAs, and (iv) some limited grants in aid for specific development projects. The policies relating to transfers are presently being reviewed by government with the objective of improving the utilization and reliability of funds flows. The 1992 Constution, for example, establishes a District Assemblies Common Fund which is to receive an annual allocation from Parliament of not less than five percent of total goverment revemues. This would more than double the volume of transfers to Districts. 1.28 The major share of locally generated revenues has come from fees and charges of which market fees has been the most important ( ranging from 20 to 40 percent of local revenue). The basic rate, a poll tax, and the prperty tax cnctribute between two and ten percet and between th and twenty percent of local revenues, respectively. Lessons from Previous IDA Involvement 1.29 G0G, with Bank assistance, began to address some of the problems of urtban management under the ADRP (FY85) which was completed in June 1992. These efforts continue in Accra, Kumasi, Tema, Sekondi-Takoradi and Tamale under the Urban II Project (FY90). Progress to date has been encouraging. For example, Accra's revemnes have been increased three-fold in real tems since 1985. Its accounting systems have been partially computerized, a roads maintenance unit has been created and trained, and the city has developed a corporate plan in which resources are matched with invesments. Simlar trends are evident in the Urban E cities. With this experience, a broader muicipal development program can be initiated in support of the decenization program. 1.30 W1h respect to implementati-n, the most signiflcant lessons learned from the previous projects concern: (i) the need to give detailed attention to procuement planning and implementation; (H) ensuing that institutional development components are given adequae early attention, and (iii) puXtg in place a sustainable operations and mainence sysm Technical Services Center (MscO, the technical implementing agency of MWH which has played a key role in previous urban development projects, mw has considerable experience with procurement, contract administion, management of consultants, and other implemenion functions. B. Sor Shtea Enomik Devdopment Context 1.31 The World Bank has worked closely with the GOG to define a strategy for economic growth and poverty reducdon, which comprises the following main elements: * Capacfty building for both policy formuladon and public sector management T includes, I= IL devolution of responsibilities from central to local authorities,  -7- improved fiacial revenue mobilization through tax collection and cost recovery, and cvil service reform. * Greater focus on private sector development inch;ing regulatory reform, privatization, contracting out of public services, and building public-private parerships. * Promoting exports through a series of measures designed to remove maket distotdon and impediments, impove export infastructure, and stimute foteig diect investment. * Investunent in Infrastructure, with priority on the rehabUitation and mainteac of existing facilities to maximize economic returos. * In the human resources area, focusing investment on literaqy, primary education and primary health. * Strengthening management of the environment and natural resource utilization. Urban Sector Strategy 1.32 During the second phase of the Economic Recovery Program , the cenr Issues in urban development remain the improvement of basic infastructure and services and the steneiDg of the technical, financial and managerial capacity of local govenment. Investment in urban development in Ghana contiues to be vital for national economic development. Although only about one thir of the populaton lives in urban areas, the urban contribution to GDP is about 55 pecent ( the oup from ura-based activities). 1.33 In Ghana, investment in basic urban infastructure remains Important for two reasos: (a) I fosters economic development by enabling the growth of industry, agriculture, and svices and O) it has direct impact on the welfare and productivity of the urban poor. 1.34 Cities are the key centers of economic activity, political decision-making, administaton, technology tnsmision, trading, and etrepreneurship. Small and medium cities serve as agricutural marketing and service centers in support of the rural economy. Yet, poor inftructure hampers the ability of cities to fulfill these functions. Although it is sometimes argued that distorions in urban- rural terns of trade may have led to over-investment in cities, inadequate urban Iau re and serices and weak local government institutions can impose heavy costs on economic activites in both urban and rural areas. 1.35 An urban sector review paper prepared for Ghana in 1988 Al presented a compreheive agenda, the main components of which are the following: MmTh firs phas of ERP bega in 1983 and was supportd by seveal MA aedts. fIU second phas bhog in19I9 and is continuing. 6/ Ghan - RevivinX t Ura Sectr. World Bank eport No. 7384-GH, July 18.  -8- (a) Decentralization of authority to local councils, together with providing them the human and finacial means to fulfill their responsibilities (see below); (b) Improved management of urban finances, including cost recovery for services, property revaluation for better revenue collection and improved accounting; (c) Preparation of simple physical plans to guide urban investment and growth; (d) Introduction of capital budgeting by municipal and district governments; (e) Major reforms In land registration and titling to promote market-oriente urban land allocation and development; (t) A major investment program for urban infrastructure rehabilitation and provision; (g) Technical assistance and training for institutional and human resource development In all of the above areas. 1.36 The above elements were incorporated in the Urban II project which began implementation In 1992. They remain relevant for the present project. Deenrlaton 1.37 Ihere is a close link between decentralization and urban development. Decntralization of functions to and strengthening of local government should produce, in the medium to long run, more efficient and effective provision of urban infrastructure and services. This would be the result of (a) clsrS functional linkages between consumers and suppliers of urban services, O) a strongr sense of accountbility on the part of local government officials and institutions to the populton for the quality of fcilities and services, and (c) an improved ability of local government to mobilize reve for operaion and maintenae as well as capital investment as it gains credibility through bettei service provision. 1.38 The most pressing issues to be addressed with respect to decentralization are: the practcal division of authority and responsibility between central, local and regional agencies and levels of govenment; increasing the Districts' capacity for revenue mobilization; reform of the centa-local revenue transfer system to make transfers more predictable and targeted; making local government pesonnel policies and practices more efficient; and building local technical and managerW capacity. Rationale for IMA 1nvolvement 1.39 Ihe proposed project is a logical next step for continuation of World Bank support to the urban sector i Ghana. IDA remains the largest provider of external assistance for urban development In the country. Through its involvement since 1985 in several major urban project and sector studies, the Bank has established an ongoing partnership with the GOG. This relationship is producing substantive progress on the alleviation of physical deficits and improvements in the policy environment and institutional capacity. GOG looks t the World Bank for continued assistance in the urban sector.  -9- II. I1iURQiEc A. Proect OWeives 2.1 The objectives of the project are to: (a) Improve basic infrastructre and urban services in secondary cities, especially services benefitting lower-income people. (b) Promote the sustainability and expansion of urban services by strengthening the District Assemblies' financial, technical and managerial capacities. (c) Support the government's decentralization program to promote accountability and efficiency in the provision of irastructure and services. 2.2 Ihe improvement of the central government's ability to provide technical and fimcial assistance in support of the decentralization effort is also an important objective. L frol Dep9f Pret Stratw 2.3 The World Bank's first urban project in Ghana (CR 1564-GH) dealt with inastruture and urban management in Accra only. The second project (CR 2157-Gil) extended a similar approach to the four next largest cities, plus Accra. lSe proposed project, the third urban operation, reflects GOG's strong interest in two objectives: (a) to extend urban infrastructure investment and institutional development to the next tier* of the urban hierarchy and (b) to build institutional capacity at the central and local levels to support its new decentralization program. 2.4 Ihe project would address the basic needs of 11 of Ghana's most important secondary cities (see Table 1). Ihe selected towns are the largest in population after the five main urban centers. 'Me LGDP cities play significant roles in the economy as regional market centers, regional and district adminstrative centers, and service provision centers for industry, commerce, and agriculture. Seven of the cities have high growth rates (between 2.7 and 5.3 percn per year), reflectig their economic dyamim. Those cities with lower growth rates are included in the project because of their substantial popuation sizes and the robustnss of their economic bases. Geographically, the LGDP cities are well dispersed in all the regions of the country. 2.5 Ihe LGDP supports several of the main objectives of the GOO-World Bank economic development strategy (see para. 1.31): public sector capacity-building, devolution of functions to local gwemment, improved government revenue mobiization and financial management, infastructure rehabilitation, and the promotion of the private sector contractg. 2.6 The investment and local capacity-building components of the project were developed with the atve pardtlpation of elected and appointed officials of the 11 District Assemolies covering the LGDP cities. Inally, a team of local project preparation consultants visited each District Assembly to discuss local priorities. The results of these discussions were incorporated into a series of tecbnical studies dealing with infastructure, services, finas, and administration. At pre-appraisal (March 1993), a hree day workshop was held in Accra, with representatives of all the DAs, to review the consultants' suggestions and to give the local officials an opportniy to restate their priorities. The  -10- workshop revealed a high dege of conistency in the epessed inftcur priories, namey: (1) wer supply, (2) toads and drainage, (3) markets, (4) motor parks, (5) solid wast services, and (6) 2.7 Under Law 207, water supply remains the responsibility of the national Ghana Water Supply and Sewerage Corporaton. In all of the 11 towns, water supply rehabilitation projects have already been programmed and will be implemented with other financing (IDA Water Rehabilitation Project in nine of the towns and a CIDA-funded project in Bawku and Bolgatnga). Given this, it was decided in the workshop that water supply would be left out of LODP. To simplify project implementation, and with the advice and consent of the DA representatives, the investment program of LGDP was narrowed down to (a) rehabilitation of roads and roadside drains, (b) upgrading of public markets and motor parks, and (c) improvement of solid and liquid waste management. 2.8 A second workshop with officials from all the D)As was held at the ime of appraisal (June 1993). The focus of this event was to atuain consensus on the implementation arrangements, the instituon-building components, and the obligations of the DAs to ensure adequate project implem.entation (e.g. setting aside funds for operation and maintenance). 2.9 The insttional strengthening and cpacity-building components of the LGDP support the government's decentralization program in two ways: (a) by assisting GO0 to articulate and develop pathways for the transition period to fill decentralization and (b) by strengthening the capacity of District Asmblies to assume priority responsibilities as early as possible. At negoiatona Governmet and IDA agreed on the contents of a Letter of Local Government Development Policy (see Armne 20). 2. 10 The LGDP has two main parts: (a) Rehabilitation and Upgrading of Infrastructure and Urban Services and (b) stonal ening. These are described in the following sections. ebabiEtaion and Upgrading of Ihastcture and Urban Sevices 2.11 The project wil provide financing to rehabilitate and upgrade three categories of basic infrastructre and urban services in the 11 cities: 1. Roads and Stormwat Drainage: This will consist of the rehabilitation of existing key town cener roads and links with the trunk road network as well as associated stormwater drains. The total length of roads and roadside drains to be rehabilitaed is 77 km. in the 11 cities. Ihe project will also carry out basic traffic management measures including intersection improvements and traffic signs along some 109 km. of urban roads. The base cost of the roads and drains component is estimated to be US$15.5 mlion, which constitutes 32 percent of the project's base cost (see Table 3). 2. Markets and Motor Parks: This component involves rehabilitation and upgrading of existg markets and motor parks. Interventions include the provision of paving, drainage, water standpipes, sanitation and washing facilities, security lighting, and structures. Ihe base cost for the 11 cities is estimated to be US$6.6 million, or about 13 percent of the project's base cost. 3. Waste Managem-enit (a) Solid Waste: is subcomponent covers the establishment of enviromently engineeed landfill sites in each of the 11 cities, fencing of refuse collection points, and provision of containers, tractors, and other equipment; (b)  -11- liquld Waste: Ills includcs the establishment of liquid waste disposal sites, renovation of public toilets, cor.struction of new pubic toilets, extension of water and lighting to public toilets, provision of cesspit emptiers, construction of underground holding tanks, and provision of matching grants to households for latrine construction. The base cost for waste management is estimated to be US$12.5 million, which is about 26 percent of the project's base cost. TABLE 1 Population, Growth Rates, and Functions of Towns Included in Local Govt. Development Project Towvns 1984 Population 1970-1984 Estimated. Main (000) Anmual 1992 Pop Function(s) Growth Rate (000) 1. Sunyani 38.8 3.50% 52.9 MT,RC 2. Ho 37.8 1.70% 44.0 MT,SC, RC 3. KetafAnloga 50.0 0.72% 54.0 MT, DC 4. Koforidua 77.4 1.70% 95.8 MT,SC,RC,DC S. Swedru 31.2 2.66% 39.5 MT,SCDC 6. Wa 36.1 3.44% 50.2 MT,RC 7. Cape Coast 57.2 0.73% 61.1 MT,SC,RC S. Elmina 17.0 2.84% 21.8 SC,MT 9. Bolgatanga 32.5 3.87% 45.7 MT,SC,RC 10. Bawku 34.1 3.60% 46.5 SC,MT 11. Techiman 25.3 5.28% 40.1 MT,SC,DC Totals 437.4 Legend MT 2 Madket Town SC Service Cene RC Regional Capital DC District Capital 2.12 Detais of the infrastructure rehabilitation and upgrading in each of the 11 towns are given in Table 2 and Annex 2. Institudonal Strengthening 2.13 LGDP will finance technical assistance, taining, equipment, vehicles, and operational support to strengthen the capacity of the 11 participating District Assemblies to plan, finance, and manage  TAW 2 LMCAL GOVBRMMT DEVMPUHM! PROJBCS SRYOlt OP TOWN IMPRSTRUCTURM PROGRAM (See Andne 2, Appendices 2 - 12) A. XOAD G DRUKAM - Traffic Mgt. NasureK 10 10 el 25 1 10 10 5 10 10 10 109 - Inersectin Signals No. I _ 3 _ 4 - PAbb. of Ado. & Drains 10.6 6i S.1 3.8 6.09 3.5 3.5 4 _ 9.2 13.7 8 73.88 - Canst. of Mm Storm Drains La I 0.5 .T O3.2 D. NADIR" t LamR PAMRE Rehab. of structures - Toilets ND. 7 2 7 4 2 4 2 33 - urinals ~~~NO. __ 3 2 1 4 3 14 -Publlc Standplpes NO. 12 6 3 13 7 34 2 2 ______-14 62 - Drainage NCM 1.26 1.S 3.65 0.2 0.95 1.64 9.22 - Pwing of Markets SA 1.99 1.5 1.75 0.625 1.36 1 1 2.2 7.6 19.06 - Paving of Taxl Ranks NA _2 2 - Security Lights MD. 72 14 - so 20 28 38 1S 36 70 _133 503 - Fencing LS .__ __1_1 - Bath soumseshowwr Slocks No. 5 2 1 I I 111S - Zarthworks HA 1.86 __3 636 - Acess Roads to Lorry Parks/Marketo mS 0.3 0.2 1 0.4 . i.9 C. SOLID a asTE U31133! Civil Works - Agriculture Tractors No. 2 3 3 11 - tipping trailers N0D. l. 10 is 1 64 - Concrete Sklp Pads ND. 20 _-10 2 25 - 2 20 125 Vehicles a Equipment . - Tractors NO. 3 _ _ ___ - trailors NO. 18 is_ - skip Vehcle No. 2 2_ 2 I_ 2 to - open Container gO. 20 20 10 33 17 17 25 -Covered Containwer MD. ____ 1 ---- - Landfill Equipment NO. I 1 1 I _2 1 10 - ol1-on/off Vehicle WO. 1 Lend Acquisition MA 11 9 11 20 8 10 12 4.5 10 10 9 114.5 D. LICQUID ASTB kWAVAGMUoIB land Acquisition HA 21 2 21 2 2 2 1_.5. 2 21_ 2 19.5_ Vehicles -Comspit Etptier Mo. 2 2 1 3 1 1 1 2 1 1 15 - Replaoemnt of Csespit Bytier No. 1 I_I _ - Nightuoll Containere XO. 10 10 1 _ _ _ . 20 Civil Xorks 1/ 1/ 1J - aten. of Elect. (Sanitation Slte") WO. 21 13 28 14 76 - Exten. of Water (Sanitation Sites) NO. 10 9 20 13 25 22 13 112 - coart. of underground hold tanks NO. 25 25 - Construction of Hand dug Wells no. 17 17 - Rehabllitation of Toilets NO. 14 1 1 7 20 _9 X 4 13 70 - Construction of Add. Toilets "o. 2 2 3 1 4 17 - Renovaticn of Toilets MD. 11 7 11 17 4 24 le _ 241 28 149 - ConpLetlon Aihandned Toilets JO. 6 1/ MecattLe and Water extension combinedo  -13- urban services in a sustainable manner, and of the Government of Ghana to implement its decentization policy in a systematic manner. More specifically, the core elements of the institutional Strengthening and Capacity-Building component are: (a) improving the financial, managerial, and tchnical capacity of District Assemblies to perform functions corsistent with Ghana's overall economic reform program; and (b) strengthening the capacity of selected central government agencies to support Distct Assemblies. The total cost of Inttutional Strengthening is about US$7.7 million, or 16 percent of the project's base cost. 2.14 Most of the support will be to assist District Assemblies to respond to those issues amenable to local action. ITus, both local policy reform and direct investments in capacity-building at the district level are included. Local policy reform elements focus on: (a) integrating staff of the previously cetalized departments direcdy into district administration; (b) adopting efficiency-oriented approaches where feasible to District Assembly employment (e.g. greater use of fixed-term or cota employment); (c) applying at the District level the increasing practice by Central Government to contract the private sector for the Implementation of public sector tasks; and (d) demonstrating effective commitment to adequate recurrent financing of the O&M requirements of the infrastructure investments financed by LGDP Instiutional development elements include support for: (a) increased district revenue collection, (b) improved budgeting and finmcial management; (c) planning system development; and (d) strengthening the Technical Departments of the 11 District Assemblies. 2.15 GovenmUent agreed atne_otations as a condition of effectiveness to have each District Assembly prepare, with the help of consultants, a Revenue Improvement Action Plan (RIAP). The DAs will formally approve and implement their RIAPs, which are multi-year plans of actions and tagets for increasing revenues through taxes and fees. Details of the RIAPs are provided in Annex 5. 2.16 The project will finance traning for officials and staff of the participating District Assemblies. Each DA will be responsible for preparing and managing its own annual training plan. MLGRD will coordinate the provision of training through existing national insfitutions. Details appear in Annex 10. neMM agUr at ungotiations to have each DA prepare, with the help of consultants, its first annual training plan as a condition of credit effectiveness. 2.17 Ihe organizationl arrmagements and TORs for the technical assistance to District Assemblies are presented in Annex 15. One senior adviser, in addition to the advisors financed by Urban II, will be provided to LGSU for 36 monXt, along with logistical support for that adviser. Teams of regionaily-ased national consultant will provide specialized support to the DAs in municipal engineering, municipal fince, and Distict management. These inputs total 432 person-months of long-term national consultants and 48 person-months of short-term national consultants. 2.18 Support will also be provided to GOG to implement selected actions related to furthering its decentzation program. Specifically, GO will be assisted to (a) review the revenue mobilization and transfr system and generate proposals for giving Districts more autonomy and flexibility in revenue raisig and making transers more predictable and targeted; and (b) conduct a pilot scheme for the use of personal services contracts by DAs to staff key higher-level positions as a way of starting to foster a labor market" approach in local government employment (see Annex 9). 2.19 In addition, limited support will also be provided to the following institutions to perform capaciy building activides in support of District Assemblies: (a) To the Land Valuatior Board (MFEP) for the revaluation of properties in the eleven project towns using new cadastral maps, to provide the base for increasing the  -14- collection of property taxes for the District Assemblies. Support would include computers, computer software, vehicles, equipment and training. Base cost is US$0.7 million (see Annex 6 for details); (b) To the Survey Department (MLF) for the preparation of maps for use in planning, detailed engineering and land valuation to be carried out with the assistance of an experienced mapping contractor. Base cost is US$1.55 million (see Annex 8 for details); (c) To the Town and Country Planning Department (MLGRD) for assistance to ten of the Districts in the preparation of simple Structure Plans (excluding Cape Coast which has a Stucture Planning exercise underway) and to improve development guidance and control. Support will include vehicles, equipment, and consultants in key disciplines. Base cost is US$0.33 million (see Annex 7 for details); and (d) To the Technical Services Center (MWH) for support in its coordination, monitoring, reporting, procurement, contract management, and accounting functions for MLGRD and the District Assemblies under the project. Support would include vehicles, equipment and operational resources for the engagement of contract staff to assist MLGRD and the eleven District Assemblies in project implementation. Base cost is US$0.7 million (see Annex 11 for details). 2.20 Govermnent agreed at negotiations that the consultant teams providing direct support to DAs and the consultants working with TSC, MLGRD, LVB and TCPD will be under contract and in place within one year of the project's effectiveness. Opertion and Maintenance 2.21 Government agreed at negotiations that each District Assembly will establish and maintain a fnid for operation and maintenance of the facilities provided under the project. It is expected that DAs will later expand these funds to cover additional facilities in the three subsectors. The size of the annual conution to the fund is three percent of the annual investment base cost, which is considered a reasonable figure for budgeting purposes. 2.22 Operation and maintenance will be carried out by the private sector under contract to the District Assembly. For civil works the adoption of term (one, two or three years long) unit rate contracts for maintenance of the various facilities will be introduced. For vehicles and equipment to be procured through the project for waste collection and disposal, the DAs will, when feasible, lease the vehicles and equipment to contractors who will provide the services. The contracts would include the necessary safeguards regarding service levels, cost recovery, and equipment maintenance standards; these will be determined prior to project effectiveness. Further details and options for operation and maintenance arrangements are set out in Annex 3. 2.23 The total operation and maintenance cost for the subprojects covered by LGDP is estimated at an average of approximately US$43,000 per town per year excluding DAs' manpower costs. During the project implementation period, IDA would contribute a share of this fiud each year, once the DA had lodged its contribution into the maintenance account. As DA revenues increase over the course of the project, in line with the Revenue Improvement Action Plans, DA contributions would also increase with a corresponding decrease in IDA contributions. Contributions from both would start in  -15- year 2 of the LGDP. The shares of contributions to the operation and maintenance costs would be as follows: * Years 2, 3 and 4: IDA 50 percent, DAs 50 percent * Years 5, 6 and 7: IDA 30 percent, DAs 70 percent 2.24 Over the five-year period, IMA would contribute 40 percent of the base costs (US$1.32 million) of O&M and the DAs the remaining 60 percent (US$2.00 million). Status of Preparation 2.2S A team of local consultants has carried out environmental assessment of all proposed sanitary landfill and liquid (human) waste disposal sites and other major project components (see paras. 4.10- 4.14). In addition, consultants have writen terms of reference for preparation of techical specifications and bid documents for waste management vehicles and equipment and draft terms of reference for preparation of detailed engineering and bid documents for civil works packages in all towns. The detailed engineering and bid documents for civil works in all towns will be finalized prior to project effectiveness followed by the finalization of the technical specifications and bid documents for waste management vehicles and equipment. In addition, the District Assemblies, having identified the sites for the solid and liquid waste disposal facilities, are in the process of legally acquiring the land parcels. Legal documentation of rights to acquire these lands on the part of at least six DAs will be another condition of efftiveness. A deiled action plan up to project effectiveness is presented in Annex 12. C. Project Cost and Flnandng Plan Project Costs 2.26 Ihe project would be implemented over a seven-year period beginning July 1, 1994 and ending June 30, 2001 with a closing date of December 31, 2001. The project cost summay appears in Table 3. The total cost of the project is estimated at US$55.5 mililon equivalent. T'he foreign exchange component is US$29.5 million equivalent (53% of the total). Base costs have been estimated in Cedis as of January 1993 and converted into US Dollars at US$1 = C70S. Physical contingencies have been calculated at 10 percent. Price contingency calculations are based on foreign cost escalation projections of 2.8 percent per year from 1993 to 2001 and local cost escalation projections of 25 percent for 1993, 15 percent for 1994, 10 percent for 1995, and 5 percent for 1996 through 2001. Adjustments were made for anticipated exchange rate movements 2V. aI Year 19 1994 1995 1996 1997 1598 1999 US$1-Ce& 708 750 820 856 875 8 912  -16- Table 3 IAl Gorment Devdopment Project SumIMa of ProJect Costs Local ForeIgn Total -(US$ ml]Io) lnesMM nt cost Roads and Drainage 6.23 9.29 15.52 Markets and Lorry Parks 2.71 3.86 6.57 Waste Management 2.86 9.59 12.45 Desigp l1S 00Q. Subotal 2 22A36 Ministry of Local Government 0.14 0.02 0.16 Town and Country Planning 0.19 0.14 0.33 Land Valuation Board 0.40 0.26 0.66 Policy Review (DA Rev. Mobil.) 0.05 0.00 0.05 Survey Department 0.11 1.44 1.55 Technical Services Center 0.63 0.07 0.70 Future Project Preparation 0.48 0.00 0.48 Taining (11 Disrcts) 0.51 0.00 0.51 Technical Assist DAs 2.16 0.54 2.70 E-gneffIsupervisor (KFW) Om D Sub.total LIA hInrmenS Raw= Sosts Operation and MaInteance 3.32 0.00 3.32 Personal Service Contracts J21 Sub-tota 0 Total Base Cost 22J3 25 1 4Lw Physical Condngencies 1.76 1.72 3.48 Price Coingecies 143 j .f Totl Project Cost I1 26.02 29.49 55.51 I/ Includes US$2.67 million in dutIes and taxes.  -17- Fnandng Plan 2.27 An IlDA credit of US$38.5 million equivalent would finance approximately 69 percent of total project cost. This credit would be extended on standard IDA terms for 40 years with 10 years of grce, 2.28 (00 would finance US$5.55 million equivalent, or 10 percent of the total project costs. DAs would finance, during the project implementation period, US$3.16 million, representing their share of incremental operation and mantenance and personad services contract costs. The German Government, through the Kreditastalt fur Wiederaufbau (KfW), is providing paralel cofinancing of US$8.3 million (15 percent of project cost) for the market and motor park component. 2.29 Governmet agreed at neg9W= to a separate project account being established by TSC, into which counterpart funs will be deposited, and that sub-project accounts will be established at each project town to be operated by the DAs, into which additional counterpart fiuds for local expenditures will be deposited. The deposit of US$100,000 equivalent in the project account and US$5,000 equivalent in each of the 11 sub-project accounts is a condition of credit effectiveness. 'table 4 Local Goverment Development Proect Fmancing Plan (US$ million) 1inancingfPla lnaw Foein Wa IDA 14.23 24.28 38.51 Government of Ghana 5.55 0.00 5.55 Distict Assemblies 3.16 0.00 3.16 Co-finaning (KM 3.08 52 8 22 Sub-total 26.02 29.49 55.51 Cost Recovery 2.30 Until recently, charging fees for public services was not a public policy in Ghana. This situation has changed. Currently, the list of services for which user fees can be collected is etensive. However, the limited management capacity of Districts means that they will need to move into cost recovery gradually, startng with a few pnority services. The most lucrative sources of local revenue are those related to economic activities and commercial user charges. For example, during 1989-90 Techiman obtained over 70 percent of its total local revenue from market tolls. 2.31 Through technical assistance, LGDP will assist the Districts to maximize revenues from the facilities and services finnced by it, namely markets, motor parks, public toilets, and solid waste collection. Target levels for fees and total periodic revenues will be established in the Revenue Improvement Action Plans. The initial objective will be to improve rate-setting, billing, and  -18- collection systems to the point where fees fully cover operadon and maintenace costs. In the long run, fees should be set at a level sufficient to cover deprecation, a well as O&M. m. flJ&MElffAIQN A. Institutional rhm k 3.1 Tne (300 institutions directly involved in project implementation are the Technical Services Center (TSC), which is part of the Ministry of Works and Housing, and the Miny of Local Govermnent and Rural Development, in particular its Local Government Support Unit (LGSU) and Training Support Unit (TSU). 3.2 TSC will have overall responsibility, on behalf of MLGRD as the responsible sector ministry, for managemet, coordination, monitoring, accountng, disbse , procurement, and contract administration. TSC has handled these functions under three previous Bank-funded proJects (ADRP, 1985-1992; PWP, 1988-1992; and Urban II, 1991-96), and its staff has beern relatively stable; thus it is well qualified to continue under LGDP. The ADRP and PWP projects have recently closed. TSC's main focus is now on Urban 11. The proposed project would ths benefit from previous capacity-building and would continue to strengthen TSC. 'he professional staff of TSC, which consists primarily of government employees supplemented by some conact staff, possesses skills in civil engineering, architecure, quantity surveying, water/hydrologicad engineering, accountany, and procurement. The professional staff, totalling nine, is made up of two engineers, two architects, one surveyor, one urban planner, one procement specialist, and one financial cotoller. The technicians comprise four accounting staff and one architectural assistant. The support staff is made up of one administrative officer, four secretaries, one procurement assistant, and several other office assistants, drivers, and watchmen. 3.3 With the planned recruitment of a computer programmer to handle the management information system and a senior accountant, the current capacity of TSC wil be more than adequate for maging the Urban II project, leaing excess capacity for dealing with LGDP. Additiona staff requirements would be met through personal svices contracts. 3.4 MLGRD will be responsible for the instiutional strengthening part of the project through its LGSU and its TSU, both of which are being strengthened under the ongoing Urban II project. Staff of the LGSU will supervise tecica assistance. The TSU will coordinate training under the project. 3.5 Ihe Ghana Supply Commission (GSC) will be involved in the clearance of bid documents and bid evaluation for the procurement of goods. The Ministry of Envronment (ME) will review engineering designs for waste disposal sites. 3.6 The relationships between and mutual responsibilities of the key agencies involved in implementation have been formalized in a Memorandum of Undetanding. Annex 18 presents the signed Memorandum of Understanding between MWH and MLGRD regarding the role of TSC. 3.7 LGDP will be overseen by a Project Coordinating Committee composed of the heads of the involved agencies and chaired by the Minister of MLGRD. 3.8 Each of the District Assemblies participating in the project has appointed a Project Coordinator from its exising management staf. In addition all the DAs will hire, through persona  -19- services conrct, a Municipal Engineer, a Finance Officer, and a Personnel Officer (see Annex 9). lhese positions will be fnaced through a cost-sharing aragement between the Central Govemment and the DAs; no IDA funds will be Involved. Govemment agred X nggofatgos to contribute its share of the cst of these positions throughout the life of the project and ensure that the DAs will retain qualified persons and conute their shares of the costs also during the life of the project. D. QLgia l Phms and Mauals 3.9 To assist the District Assemblies, other agencies and IDA in project implementation and monitoring, yearly operationl plans wUl be prepared. The initial plan shown in Annex 12 covers the period from project appraisal thmugh the expected date of credit effectiveness. The monitoring and performace indicators are presnted in Annex 19. The Implementation Manua will conain quantittive targets for most of these indicators and wUi be reviewed and updated quarterly in conjunction with the project coordinating committee. The Implementation Manua will be the key management tool for monitoring of project progress, timely identification of problems, and formulation of solutions. 3.10 Govemment ad to the revised contents of the Implementation Manual covering the project's physicad, financial and instutional targets as well as procurement, disburement, auditing and accounting. Staff of TSC have gained considerable prior experience with these functions under the previous two urban projects; however, this klowledge must now be systematically documented to ensure smooth imptementation of LGDP. The implementation Manual will be finaliz4 before the Project Lauch Workshop scheduled for one month aRer effectiveness (September 1994). C. rncwmLr eminm 3.11 About 58 percent of the total IDA financed procurement arrangements for civil works and goods will be procured through ICB. About 41 percent of the project will be procured through LCB. Only 1 percnt will be financed through local/intermational shopping. The Market and Lorry Parks rehabilitation component of the project will be finaced in parallel by the German Kreditanstalt fur Wiederaufbau (KfW).  -20- Table 5 Summary of Procurement Arrangements (US$ million equivalent) (IDA Shares in parentheses) Procuremen Methods Project Element ICB LCB OTHER N.B.F. .1 Total Cost 1. Works contracts for reabilitation of 10.79 15.82 7.94 34.5S roads, drains, makets, lony park and (10.12) (12.22) (-) (22.34) waste management. 2. Supply of eqipmnt, vehicles for 5.56 5.56 waste management (5.47) (5.47) 3. Supply of vehicles and equipment for 1.04 0.43 0.35 1.82 insond strengthening. (1.03) (0.42) (0.34) (1.79) 4. Technical assistance, consutacies 9.41 0.64 10.05 and taing for policy support, project (7.45) (-) (7.45) limple taton, instttionl development, and design. 3.53 3.53 (1.46) (1.46) S. Operation and maintenance Total 17.39 16.25 13.29 8.58 55.51 I/ Non-Bank Financed (16.62)- (12.64) (9.25) (- (38.51)J Notes: The above figures michlde contin es. Proecurement of Civil Works 3.12 Civil works for the project include small rehabilitation woris for roads, drains, markets, lorry parks and landfill areas in 11 towns. Because of their size and dispersal throughout the country, they are unlikely to attract foreign competition, though contractors based outside Ghana will be allowed to bid if they so wish. Contractors will be allowed to bid both for a single contract or for a combination of contracts within the same district. Works contracts for rehabilitation of roads and drains estimated to cost individually more than US$1.5 million will be procured through ICB which constitutes 45 percent of the IDA financed civil works component. Eligible domestic contractors who bid for civil works under ICB will receive a 7.5 percent preference in bid evaluation. Civil works estimated to cost less than US$1.5 million will be procured by LCB method of procurement. About 18 IDA LCB contracts are planned with an aggregate value of US$ 16.0 million including contingencies. Experience from previous projects confirms that there are sufficient competent local and locally based foreign bidders to provide effective competition for these relatively simple works. LCB procedures were reviewed and are considered acceptable, provided these contracts are advertised in local newspapers, bids opened in public, and the bidding documents incorporate lear evaluation criteria, with award given to the lowest evaluated responsive bidder. The first LCIi document will be reviewed by IDA before it is released to the bidders. It is anticipated that there wil; be fiva ICB contracts in the road and drain rehabilitation component, and one in the markets and lorry parks component which wiUl be financed by KfW. No ICB contracts are anticipated for the waste  -21- manement component which includes small scale work (average US$ 0.14 million) In each of the DAs. Prormnt of Vehiles and Equipment 3.13 Goods conacts for supply of equipmen and vehides for waste management aggregatig US$S5.56 million wil be procured through ICB. Ihis relatively large procurement will be subdivided in three main packages and four (or more) subpackages to attract more compeition for the contracts. Bidders wil be allowed to bid for one, two or more contracts and to offer a discount if awarded more than one contract. ICB method of procurement will also be used to purchase vehicles for the TA for an aggregate amount of about US$1.0 million. Locally manufactured goods under ICB will receive a preference of 15 percent of the CIP bid price, or customs duties and taxes, whichever is the lower. Four or more LCB contacts for ftrniture and equipment for an aggregate amount of about US$V30,000 are planned for separate agencies to coincide with staged Implementation and TA inputs. Items valued at less than US$50,000 per contract, such as individual computer packages and survey equipment up to an aggregate amount of about US$350,000, will be procured through local and international shopping based on at least three quotations. TIis would apply to about nine small cntracts for individual computer packages and office storage systems to be purchased for seven different organizations. Any other procedure will have to be based on demonstrted advantage to the client in terms of cost. Spare parts and accessories, which are of proprietary nature, may be purchased, with IDA's prior agreement, under negotiated contacts from orginal manufacturers/suppliers or their authorized agents, up to an aggregate value of US$ 250,000. All goods imported in Ghana wil be subject to pre-shipment inspection for quality, quantity and customs duty verification ut not price verification for goods procured under ICB). Consultancy and Operations and Maintenance 3.14 IDA financed consultancy contracts totalling about US$7.5 million will be awarded. Technical assistance consultancies will comprise 634 person-months from local consultants and 39 person-months of expatriate consutants (one expatriate consultant for ing supervision for about 30 months on an intermittent short-term basis will be financed by KfW and nine months of short-term intermational consultants wiUl assist with the mapping component). Contracts with local consultants will, in addition, also provide services for preparation of detailed designs and bid documents. Local consultants have the capability and experience to handle engineering studies and the design and supervision of the rehabilitation, waste management and maintenance works. The Government has agreed that the consultants will be selected following Bank guidelines for the selection of consultants and that the Bank's Letter of Invitation and Sample Consultant Contract suitably modified wil be used for consultancy contracts. Prior review, in accordance wifth the Banrs Guidelines for procurement of consultancy services, shall apply except in cases of contracts valued at less dan US$100,000 each (although this exception shall not apply in cases of employment of individuals, single-source contracts, or assignments of a critical nature). Consultancy requirements are presented in Annex 15. All of the TA for Central Government Assistance to DAs will be conted through individual consltants. The Direct TA for Distrct Assemblies (total of 480 person-months) will be cnacted to consulting firms, in four packages, each package making up a team servig a geographical area (see Annex 15, para. 1.3). Each team will be composed of three pesons (Muimcipal Engineearg Adviser, Finmacial Maagement Adviser, and Planning and Implementation Adviser). 3.15 Small routine and periodic O&M works will be contracted out, whenever feasible, to the private sector under local shopping method of procurement. When this is not possible or economic,  -22- force account by DA established labour force will be used to a maximum aggregate value of US$50,000 per annum per District. Assessment of Procurement Pracdtes for LCB 3.16 The borrower's regulations and procedures were reviewed by the appraisal mission and are considered acceptable provided these contacts are advertised in local newspapers, opened in public, and the bidding documents incorporate clear evaluation criteria, with award given to the lowest evaluated bidder. The Government has agreed that Bank's Sample Bid documents, suitably modified, will be used for the procurement of works and goods. D. Disbursnemnt 3.17 The IDA credit of US$38.5 million Is expected to be effective by July 1, 1994. The project is expected to be completed by June 30, 2001. The credit would be disbursed over a period of seven years, up to the closing date of December 31, 2001. This period is consistent with the standard disbursement profile for Ghana. Implementation is expected to go smoothly because the key agency responsible for the project (rSC) is formally in place and has had experience in implementing previous IDA financed urban projects. A detailed disbursement schedule appears in Annex 14. The proposed IDA credit would be disbursed against the following categories: Amount of Credit % of Expenditure to be financed Categora (US$ million) from IDA 1. Civil Works 16.89 100% of Foreign Expenditures 70% of Local Expenditures 2. Equipment & Vehicles 6.62 100% of Foreign ExpenditLres 70% of Local Expenditures 3. Technical Assistance and Training 5.79 100% of Total Expendiures 4. Operating Costs 1.33 50% of Total Expenditures until December 31, 1998; 30% of Total Expenditures thereafter 5. Project Preparation Advance 1.00 6. Unallocated 6.88 Total 3.18 he special account operated by TSC will be set up in a bank acceptable to the Association to acilitate disbursements for project expenditures. The special account will be operated by the same staff of TSC who competently managed a similar account for the ADRP and are currently managing one for the ongoing Urban II project. The account will be given an authorized allocation of US$ 1 million, sufficient to cover esdmated eligible disbursements over four months. Upon effectiveness, an  -23- amount of US$500,000 will be made available to the special account. The remaining baance can be withdrawn from the credit account as needed. Requests for reple ishments must be filly domntd except in the case of expenditures of less than (i US$200,000 for civil works contac and (i) US$50,000 for goods and services coracts, which may be claimed on the basis of Staemens of Expenditures (SOEs). Documentation supporting the SOEs will be retained by the implementing agency and made available for review by IDA supervision missions and external auditors. Replenishments should be made on a montly basis provided the amount is at least USS 100,000. With respect to the waste management component of the project, no disbursements will be made by IDA for construction of any solid or liquid waste disposal site until the District Assembly has provided evidence satisfactory to the Association regarding its ownerships of the land requhred for the facility. The evidence will be approved by a designated Bank staff member at the Resident Mission in Ghana. E. Accounting and Auditing 3.19 Government agreed at negotiations to TSC establishing and maintaining project-related accounts for all components. Such accounts shall be maintained in accordance with sound and internationally recognized accounting principles and practices satsfactory to the Bank. TSC will provide interim and annual financial statements to reflect the financial performance and position of the project. An independent auditor's opinion and reports satisfactory to the Bank on such staements will be provided within six months of the close of the fiscal year. Special accounts and SOEs will be included in the audit and specifically addressed in the Audit Report. The auditor's report will also include a statement on the adequacy or otherwise of the accounting system and internal controls, the reliability of statements of expenditures as a basis for loan disbursements, and compliance with financial covenants. The foregoing accounting, financial reporting, and auding arrangements should provide adequate and timely information to the Bank for supervision of the project. TSC will hire local consultants on terms and conditions acceptable to the Bank. Such consultants will establish and maintain appropriate accounting and control systems, includmg separate project-related accounts at ihe office(s) responsible for project execution. hese systems are to be operational from the commencement of project implementation and for at least one year thereafter. 3.20 In addition, each project implemendng agency, including each of the eleven District Assemblies benefitting from the project, will prepare annual statements of account and anul audt reports related to the project. These reports wil be submitted not later than three months from the end of the financial year. Following submission of the individual accouts and audit reports, TSC will include summaries of them in its annual finial and audit report. F. Reporting, Monitorine and Riew 3.21 Government agreed at negotiations to a set of monitoring and performance indicators covering project implementation (Annex 19) and on quarterly progress reporting. These will include physical constuction and institutional development. The latter category wil deal with, ine agia municipal finance (trends in revenues and expenditre), the management of procurement and contract administration, and the implementation of training activities. Performance indicators will cover operation and maintenance, tax and fee collectioi, personnel, and the quality of services provded by the improved facilities. Local consultants will work with fthe DAs to collect baseline data for the performance monioring. 3.22 The Technical Services Center wfll be responsible for preparing quartery report on project progress, including technical, financial and institutional aspects of the project, and submitting thes to  -24- IDA and to concerned Ministries on behaf of MLGRD. Each impleming agency, namely MLGRD, SD, LVB, TCPD and each of the eleven District Assemblies, will provide necary Information to TSC within 14 days of the end of each quarter. 3.23 From these data TSC will prepare project progress tables, update the operational action plan for the following 12 months, identify critical activities and maters requiring GOG IDA atenton and compile, consolidate and submit the report to concerned Ministries, project implementi agencies and IDA within 30 days of the end of the reporting quarter. Ihe report format follows that developed in the previous urban project suitably modified and agreed with TSC and will compare physical progress with the predetermined plans and financial expenditures against component budgets, and summarze the status of procurement and disbursement of project funds. 3.24 Government agreed at neations to a mid-term review by December 31, 1997. This review will be a joint Government-IDA exercise designed to be both an assessment of past experience and a forward-looking analysis of what changes or remedial actions, if any, may be needed to achieve the project's objectives. Ihe mid-term review will cover the project's components, implementation arrangements, and financing arrangements, including specifically, (a) the progress of physical implementation of the infrastructure improvements summarized in Schedule 2; (b) the timeliness and efficiency of procurement of works, goods, and consultancy services; (c) the effectiveness and impact of the technical assistance provided to District Assemblies and ceural govenmen institutions; (d) the management of the training component and its effectiveness; (e) the extent to which the Revenue Improvment Action Plans are being implemented by each DA, and any problems being experienced in connection with local government revenue mobilization; (f) the operaton of the ptogram for financing household santion facilicities; (g) the enet to which the Government has facilitated, and each of the DAs has implemented, the hiring of the three technical specialists tirough Personal Services Contcs; (h) progress and impact of the policy review of local govenment revenues; (I) whether and to what extent the DAs have met their obligation to contribute specified shares of the Operation and Maintenance Funds; and () the extent to which prvate sector contracting of O&M is being caried out. 3.25 Government agreed at neiotiaidons to conduct annual joint (GOG-DAs-IDA) implementation reviews based on the project's Monitoring and Performance Indicators (see Annex 19). IV. JUSIOMCATIO RIMK AND ENVIRONMENIAL IMPACT A. Geeal B-ereits 4.1 By strengthening local government and improving basic urban infrastructure and services, the project will support the Economic Recovery Program, strengthen the urban economy, improve the living conditions of the urban poor, and alleviate urban environmental problems. 4.2 The project will have a significant physical, economic and social impact on the project towns and their surrounding rural areas. Properly planned improvements of infrastructure and environmeal systems (roads, drainage, sanitadon, markets, etc.) will provide a better environnt for the growth of producdve actvities and, hence, the municipal revenue base. The maitnance of exsing assets will be supported under the project. Ihis wil prolong their useful life and minmize cosdy repair and construco Rai on and nzaton of the ua fabric wil iduce cost savingp and greater reliability in the aperations of public services and private enterprise.  -25- 4.3 Ihe project's support for improved mobilization of local financial resources, cost recovery for specific sevices, and financial magment will provide mote reliable revenue for the mantenac and improvement of local irastructure and services, help reduce the reliance on the cental government budget, and establish a basis for multi-year planning and programming. Beter planiing and programming will help to emsure that scarce resources wiUl be applied to high-yielding projects which will directy benefit the productive base and overall efficiency of the urban areas. B. roome Evauat 4.4 Economic rates of return have been calculated for a selection of subprojects covering all three investment components: a) road and drain rehabilitation and traffic management; b) market and motor park upgrading; and c) solid and liquid waste management. As the subprojects are similar across the 11 LGDP cities, it was not necessary to perform economic analysis for aU of them Projects subjected to ERR analysis were selected by takdng those above certain size thresholds (to ensure evaluation of the largest projects in each category) and by including a representative sample of cities in diffetent regions. The dthesholds for selection were US$1.2 million for roads and drainage packages and US$0.3 million for markets, motor parks and waste management. 4.5 Only direct and quantifiable benefits were measured. ERR analysis was performed on road and drainage projects in Sunyani (US$2.17 million), Swedru (US$1.26 million), Bolgatanga (US$2.04 million), and Techiman (US$1.65 million); market and motor park projects in Cape Coast (US$0.45 million), Sunyani (US$0.8 million) and Ho (US$0.38 million); and waste management projects in Bolgata (US$0.6 million for solid waste and US$0.58 million for liquid waste) and Koforidua (US$0.97 million for solid waste and US$0.5 million for liquid waste). The value of the subprojects aluated Is equivalent to 27 percent of the total cost of the project's physical works. 4.6 Cost streams include civi works, equipment, enginering design, physical contingencies and operation and maintenance. Financial costs and benefits are expressed in US dollars at January 1, 1993 prices. No price contingencies or taxes are included in the cost streams. Economic costs and beefit are expressed in international border prices Cm US dolars at January 1, 1993 prices) and adjusted using Ghana's standard conversion factor of 0.93. An overview of the economic evaluation is given below. A summary table of the ERRs is provided in Annex 17. (a) Roads and Dan Benefits streams are measured in terms of; (i) Vehicle Opering Cost Savings (VOCS) arising from increased speed and better surface, and (H) passenger time cost savigs (PFCS). Average ERRs are 68 percent for Bolgatanga, 67 percent for Sunyani, 100 percent for Swedru and 98 percent for Techiman. Ihe high values are due to projected high growth rates of traffic volumes and the moderate costs of rehabilitaion. By far the larger share of benefits is attibutable to VOCS. If rrCS are omitted, ERRs decline only marginaly. (b) Markets and Lorry parks: Benefits for markets (Ho, Sunyani, and Cape Coast) are quantified coseraively using only stimates of the incremental market fees that could be collected by the District Assemblies from the market and lorry park users. ERRs are 15 percent for Ho, 14 percent for Sunyani and 30 percent for Cape Coast. ERRs remain acceptable even when subjected to sensivity analysis (20% increase in cost; 25% decrese in revenues). (c) Solid Waste Mw&U=: Benefits from the project sites (Bolgatanga and Koforidua) are quantified using estimates of willingness to pay on the part of beneficiaries. ERRs  -26- are 17 percent for Bolgatanga and 15 percent for Koforidua. ERRs remain acceptable (10 to 12 percent) even with 20 percent cost overuns. With a 25 percen. revenue decrease, ERRs decline to 7 or 8 percent; this is still considered acceptable for solid waste services because indirect benefits (health, environment) camot be quanified. (d) Liu Waste Mamg t Benefits from the subprojects in the two selected towns (Bolgatanga and Koforidua) are quantified using esfimates of the increase in fees that could be collected by the District Assemblies from the beneficiaries of public sanitation facilities. ERRs are 35 percent for both Bolgatanga and Koforidua. They remain high even with sensitivity analysis of 20 percent cost increases or 25 percent revenue decreases. 4.7 The overall weighted average ERR of the subprojects evaluated is estimated at 59 percent. 4.8 All the subprojects are cost-effective solutions, as they involve rehabilitation and upgrading of existing works (i.e. roads, markets, motor parks) as opposed to new construction or use low-cost technology (i.e. simple tractors and tipping trailers for solid waste collection and disposal; on-site technology for sanitation). C. Poertv ImDK& 4.9 Although all the investments of LGDP will provide immediate benefits to the lower-income populations of the 11 cities, the waste management and motor park subprojects will have the greatest direct impact on this group. Lower-income people will be the principal users of the public toilets to be rehabilitated and constructed under the project. This group is also the main user of public asportation, which will improve as a result of motor park upgrading and road rehabilitation. In the long term, lower-income groups will benefit from improved management of services in the cities and from enhanced economic opporunies arising from urban economic development. D. EnArnmental Iowa 4.10 The project wil lead to significant improvements in the environments of the 11 project towns. Sanitation deficiencies, which have led to poor environmental and health conditions in the towns, will be addressed by the rehabilitation and restored use of public toilets, the provision of additional larines, the establishment of domestic pilot toilet provision programs, the improvement of capacity for maintaining sanitation facilities, and the establishment of safe disposal sites for liquid waste. These interventions will improve environmental conditions by reducing the use of open space and watercourses for defecation. The risk of groundwater contaminaton will be lessened through the use of properly designed, sited, and maintained cesspits. 4.11 The solid waste management component will provide more containers at collection points and better transportation facilities, benefifting a larger share of the population with a more regular and reliable service and consequently improving environmental conditions. This will reduce (a) the incidence of piles of refuse accumulating in heaps at high generaton points, such as markets and transport terminals, and (b) dumping of refuse in drains and watercourses. 4.12 The final disposal of solid ad liquid waste (the latter being human waste evacuated from latrines, septic tans and cesspits) is of particular concern in the towns, as the most common mode of disposal is indrimin dumping at 'convenient' locations, such as fringe areas of the town, lagoons, streams, or the sea. The project will establish disposal sites that are appropriately located  -27- and engineered to provide maximum protection t the environment, In terms of groundwater, drainage, air pollution and odor. The project will also establish appropriate operational practices for the sites. Preliminary surveys and Investigations indicated that the selected sites would be suitable for landfill operations without risks to the environment. Thbe consultants carrying out the detailed enginee designs will expand upon the preliminary environmen assessme already carried out and incorporate design feaures ncesy to mitigate potential localized eironmental effects. It has been established before appraisal that no displacement or relocation of persons would be involved in establishing and developing the recommended sites. 4.13 Roadside drainage rehabilitation and the provision of key lengths of new storm drainage will reduce localized flooding and eliminate ponding of stagnant water. The road and drainage rehabilitation will also have an environmental benefit by reducing the number of potholes and unreinstated utility trenches which often result in stagnant pools of dirty water during the rainy seasons and clouds of dust in dry seasons in heavily trafficked areas. 4.14 Improvements to and rehabilitation of infrastructure in existing markets and motor parks will also have environmental benefits. Markets are congested and lack basic water supply, sanitation, and solid waste storage facilities. In addition, markets and motor parks, for the most part, are unpaved with no effective drainage. The improvements proposed wiUl permit trading, particularly of foodstuffs, in improved conditions and contribute to improved health and environment. The paved motor parks with improved traffic management measures wil lead to easier ingress and egress for vehicles, resulting in fuel savings and less air pollution. E. Prsiect sB 4.1S The project does not pose unusual risks. The risks identified are: (a) that counterpart fimds may not become avalable as required; (b) that management capaciy, particularly at the District level and in 1kfLGRD, would be insufficient; (c) that the necessary infrastructre and services omaitnance financing and actions will not be sustined; and (d) that revenue mobilization components may not be implemented effectively, resulting in revenue shortfall. 4.16 Government agreed at neogtiations to make adequate budgetary provisions and to release the funds in a timely manner. The management capacity in MLGRD is already being strengthened under the Urban H project. TSC, which has gained considerable experience under ADRP, PWP and Urban H will be responsible for implementation of all technical components of the project. These arrangements have been formalized with a Memorandum of Understanding between MLGRD, MWH and TSC (see Annex 18). 4.17 The DAs' capacity will be ehanced through capacity building and training under this project. In addition, the II District Assemblies in the project will establish the positios of Municipal Engieer, Finance Officer, and Personnel Officer to head the Departments of Works and Fiance and the Personnel Unit in the Deartment of General Administration, respectively. Officers wil be directly recruited for these positions from outside the established Civil Service by the DAs themselves under the terms of individually negotiated six-year fixed (renewable) personal Services Contracts (see Annex 9). 4.18 During the successful implementation of ADRP and the contiung ilementation of Urban II, good itepersonal and inter-agency relations have been established which facilitate the resolution of problems and allow sufficient time for problem solving within the bureaucratic famewor}.  -28- Sigificant experience and capacity has been built up which can Ow be utilized to support subprojects in the proposed towns. 4.19 IDA wil support the establishment of operion and maintenance funds In all participating DAs. MDA contributions will be made during the project ilemenation period on a declining basis, with DAs fully funding O&M by the end of this period. V. A GNI AND RElQMMENDATION A. A 5.1 In addition to standard covenants, Government agreed on the following at negotiations: 5.2 TSC to prepare and funish to the Association quartedy progress reports based on monitoring and performance indicators (para. 3.21). 5.3 Annual joint project implementaon reviews to be held involving MLGRD, MFEP, TSC, each District Assembly and IDA. These reviews wil be based on the project's Monitoring and Performance Indicators (see Anemx 19), focusing on physical implementation, municipal finance, and policyristttiona objectives (pan. 3.25). 5.4 Submissionto IDA by June 30th each year of the finnial statements of the Special Accounts, Project Accounts, and SOEs for the preceding calendar year audited by an independent auditor acceptable to IDA (puar 3.19). 5.5 A mid-term review of the project with IDA by December 31, 199; to evaluate progress toward meedng the project's objectives, project magement, and perfornance against agreed performance indicators, and to agree on any necessary corrective actions (para 3.24). 5.6 Provision of sufficient budgetary allocations to MLGRD from the Central budget and disbursement of these funds quarterly into the project account based on disbursement estimates agreed with IDA annualy (para 4.16). 5.7 GO and the DAs will share the costs of the three professional contract staff to be engaed by each DA as per Annex 11; DAs will mainain qualified individuals in these positions; and both GOG and the DAs will allocate sufficient funds for these positions during each year of project implementation (ar. 3.8 and Annex 11). 5.8 Each District Assembly will establish and make regular deposits into an operation and ma_nce fund (pa. 2.21). 5.9 Ihe DAs' obligation to approve and implement their respective Revenue Improvement Action Plans (para. 2.15). 5.10 Evidence of land acquisition satisfactory to IDA will be a condition of disbursement for solid and liquid waste disposa facilities (pana 3.18).  -29- D. C sditlons of Credt if xMe 5.11 Deposit by government of the initial installment of ounterpart fnds ito the project account (pa. 2.29). 5.12 OpenIng by government of sub-project accounts In each of the 11 project towns and desSit of init installme (par. 2.29). 5.13 Compledto of te Revenue Improvement Action Plans, satory to IDA, and forial raticatin of the RIAPs by the repcve District Assemblies (para. 2.15 and Anmex 5). 5.14 Preparon of te fist du training plan by ea DA (par 2.16 and Anex 1O). 5.15 Pinalizadon of detaied engineering ad the producdon of bid docment for civil wor for aU packages fo i) roads and drainage, li) markets and lorry parks, ili) solid and liquid waste diposal sites and iv) solid waste collection and saniaon facilities (pan. 2.25 and Annex 12). 5.16 At least six of the District Assemblies have legally docmented their acquisition of the speific land parcels selected for solid and liquid waste disposa sites (pan 2.25 and Ann 12). D. Reo_dadon S.17 Based on the above, the Local Governm Deveopment Project is sitable for an IDA credit of SDR 27.7 million (US$38.5 million equivalent) to the Governmen of Ghana.  -30- Page 1 of 4 RPJUBLIC OF GHANA LOCAL GOVERNMENT DEVELOPMENT PROJECT Profiles of Project Cities 1. Bawk is the capital of Bawku East Distict situted in the North East of Ghana. With a populadon growth ratoe of 4.8% In the 1960s and 3.6% in the 1970s, Bawku bas been one of the fstest growing sement In the north. The growth rate of the dtrict as a whole is estimated at 2.8%. Mhe town's population has grown from 12,800 in 1960 to an estmated 45,500 in 1992. The savanna cimate of the north lims firming activity to the rainy season, during the mid-year. Ihe dry semon is devoted maily to livestock. Foodstffs produced in the Bawku District are millet, guinea cn, groundmits, maize and onions. The reasonable levels of production are confirmed by the fact tha the highest revenue source for the Bawku District Assembly is the fees on "exft of foodstuffs Bawkm is also a commera town by virtue of being within thirty minutes drive to Togo and Burkina Faso. Its market is therefore a Ithriving place for both local and imported goods. 2. Bol Bolgtn Is the capital of the Upper East Region and, apart from Tema, has been the fastest growin urban cenr in Ghana. s growt ates ranged from 12.3% in the 1960s to 3.0% in the 1970s and tho early 1980s. Bolgatanga has grownl 8 times from a populaton of S500 In 1960 to a poPUlionof around 44,000 in 1992. Ithe bulk of the workiag population (over IS years) in Bolgtanga is employed in agricutural and related fields (57%). The manufactuing, wholesale and rtiing sectors employ 31% of the popuation. The potential for the agricutural base of the Bolganga area has been boosted by the coutruction of the irrigation dam at Vea A further potental for thfo local economy is the infmal sector. Metal fabrcation for donkey drawn carts is a thrting business in eli townvlages of the Upper East Region. The leather and straw bag industry is the other main infrmial sector activity. The Rural Housing and Cottage lIdusties organization, together with a Britih NGO (rIAX) are working towards upliftMng of this sector. 3. WA Wa Is the capital e' .ie Upper West Region. Wa township has been growing at a high rate for the past tre decades. The growth rates were 4% per anmm in the 1960s and 3.7% I the 1970s and oarly 1980s. The 1992 populaion Is esimated at 48,600. The economic base of Wa is more limited than those of other regi capitals in Ghana. Wa is the man urban center in the driest part of th country. Employment paterus indicate that 72% of people (over 15 years) are employed in agriltWe and related actves, whie mnucturing and trading account for 115% and 10% respectvey. The commercia acdtvity rolves aound the market days, which rotate on certain day cycles and draw people from all over the Upper West and Brong Ahafo regions. Market toUs and related acdvidies form the argt part of the revenue base of Wa District Assembly.  -31- Annex I Page 2 of 4 4. IThiman Techman, the capital of Techiman District Assembly, is located in the BrODg Ahafo Region in the Westen part of Ghana. Techima Is ewpeiencing a very rapid incae in populatiot growth. Between 1970 and 1984, the Tecbiman popWation grew by n annual rate of 5.2% which was one of the highest in the country. Both In the Brong Ahafo Region and the Techiman District, agricult has been the main occupatin of majority of the people. I 1984 80% and 78% of the people were engaged in agicture production in the Brong Ahafo Region and the Techiman District respectively. Techinan's accessibility from all parts of the country has contributed to the development of Techiman as a commerial center. The shops and market ar well patronized by traders fom both Ghana and the neighboring countries of Togo, Ivory Coast and Burkina Faso. The market is the largest in the region in terms of area, etnt and number of people In attendance on market days, which fall on Wednesday, hbursday and Friday. Ite maket covers an area of 24.6 hectares of which 13.75 hectares has been developed. Following the economic importance of Techiman market, various hotels have been developed, two of which have one star status. Other activities that have spung up include small scale manufactg ad repair works, banking, entertainment and chop bars (eating places). The main economic potental in Techiman lies in commerce and specifically the market. Facilities like warehousing, salsU and stores, toilets, and bathrooms wbich could bring in extra revenue are lackng. Also access to parking adjacent to the market will decongest the area due to vehicles beig parked on the street for loading and unloading. S. S Sunyai is the region capial of Brong Ahafo Region. Sunyani's population grew at an annuil rate of 3.5% between 1970 and 1984. The imated 1992 populaion is 51,400. Sunyani is the adminisratve, commercial and industial center in Brong Ahafo Region and SunyaD DistricL Suyai is well connected with a road network to towns in the Ashan Region and Brong Ahafo Regions. Sunyani has two markets, a daily maket located in the town center and a weeldy regiona market which is currenty under constrction. The weeldy market attracts traders and hamers from the district and other parts of the country. Sunyani town center has a lar number of shops. There is an Industial zone locaed along the ICmasi road In Sunyani. The businesses in the zone include mechanics/workshops, sawmiUers, cold storm and machine tool shops. Currenty a large sawmill is under construction in this zone. There is poteta for wood processing, agro-based industries and machine tool making. 6. HQ Ho is the Capital of Volta Region. Ho exeienced population growth rates of 5.1% during 1960-70 and 1.7% during 1970-84. Its populatk has grown fiom 14,500 in 1960 to an esdmated 48,800 In 1992. Ho occupies an important posWion as an administrtive and commercial center in the Volta Region Ho is well connected by a road network to the distuict, region and the nation. It is a commercial center wth a weekly maket On maret days, traders come from as far as Denu, Togo, Akatsi, Kpandu and the Amedzofe area to trade in Ho. There has been a steady development of other allied economic actvities in Ho whch include small scale manfcuing activities like carpentry, food procesing and repai works. Banking, aen and tourism are alo part of the local economy.  -32- Annex Page 3 of 4 7. Kofbridua Koforidua is the capital of New Juaben District in the Eastern Region. Its population grew from 34,900 in 1960 to an estimated 67,300 in 1992. The growth rate during 1960-70 of 2.8% feln to 1.7% during 1970-84. The fail in Koforidua's growth rate seems to be due to reduced immigration into ICoforidua, owing to competition from other fast growing towns in the region like Oda, Asamankese and Kade, which Ill experienced higher growth rates during the 1970-84 period. Agriculture is the mainstay of the New Juaben District, employing about 60% of the population. Koforidua has three main markets that attract traders from the hinterland who come to sell mostly agrkultural produce on market days. Tne large shops and other commercial enterprises make Koforidua serve also as the major commercial center for the Southern Sector of the Eastern Region in general and New Juaben District in particular. Other economic activities include trading, small scale indust actvities and drugs mac . 8. AWonasf Agona-Swedru is the capital of Agona District located in the south of the country. Its population grew from 18,300 in 1960 to an estdmated 38,600 in 1992. It is a very active conmercial town. About 37% of the working population is engaged in trading while 25% are engaged in agricultural and related activities. Community social and personal services account for 19% of employment whie mnufactring accounts for 14%. Despite the intensive commercial activities, the Swedru District also has a strong agriculture base. Food crops that are produced in farms in excess of 100 acres are yams, maize and vegetables. Easy excess to Accra market (one hour's drive) is likely to encourage further farming activities. Another indicator that is helping to diversify the economic base of Agona Swedru is the appearance of a first class, three star private hotel in the town with conference facilities. It has already started attracting foreign sponsored seminars and workshops to the township. 9. K&A Keta is the capital of Keta District in the Volta Region. Over the past 20 years, Keta has experienced a negative population growth. Keta's population in 1960 was 16,700 whie in 1984 It was onfly 12,600, and is estimated at about 1 1,650 in 1992. This negative growth rate may be due to the effect of sea and lagoon erosion which X Aitinues to affect land and properties in Keta. Many people have suffered property loses as a result of erosion and have moved to nearby towns. Keta District's local economy is based on agricultur trading and fishing. Keta produces vegetables, especally shallots (on;ins). Keta is noted for its production of shrmps and salted dry fish. Keta market, locaed in t0 old town, is the biggest in tie sub-region but is threatened by lagoon flooding and sea erosion. Small scae industries in Keta nclude carpentry workshops, auto mechanics and straw mas weaving. 10. MJar Anloga is the largest urban center in the Volta Region. Uunlike Keta, Anloga bas experienced a positive growth rate, its population having grown from 11,000 in 1969 to 23,072 in 1993. This may paty be attribud to migration from Keta to Anloga due to sea erosion and lagoon flooding in Keta and KOAi. Te ^4.e f oga is based on agricultre, commerce and flA&g. Agriculur crops produced include shallots, maize, and cassava. Commercially, Anloga is ganing  -33- Page 4 oft4 moe prominence thfa Keta. TI I evident on market day when Anloga atrts more people tha Keta 11. CM,Comlna Cape Coast is the capital of the Central Region while Elmina is the capital of the Elnina District. 'he popladon of Cape Coast has grown from 41,200 in 1960 to an estimated 60,700 in 1992 while that of Elmina has grown from 8,500 to around 21,300 during the same period. Ihe twin townsip of Cape CoastElmina has the bulk of economic activity generated from its role as an Aministre and service center for the Central Region. The fishing industty is second in impotwnce. Elmina remains the leading exort of smoked fish on the local market. The activity with the greatest potenal for grow Is the tourism industry. One major factor which has hindered the devdopment of e tourism idustry is the poor infrastructure base.  -34- Annex 2 Page 1 ot 5 REPUBLIC OF GHANA LOCAL GOVERNMENT DEVELOPMENT PROJECT Infrastructure Rehabilitation and Environmental Systems Improvements Objectives 1. In the main towns of eleven District Assemblies: * To upgrade both solid and liquid waste management facilities and practices to enhance the efficient functioning of the towns, the environment and the health and productiv-y of their residents; X To rehabilitate and, where necessary expand, markets and transport terminas which are critical to the economy and financial position of the respective towns. * To improve circulation and road related drainage through improvements in key road segments, traffic management, and roadside drain rehabilitation and construction. Components 2. (a) Roads and Stormwater Drainage: Rehabilitation of important main town roads and associated stormwater drains together wi:h simple traffic management measures; (b) Markets ad Motor Parks: Rehabilitation and improvement of basic infrastructure in existing markets, lorry and taxi parks and terminals including paving, drainage, toilet and washing facilities, public standpipes, and security lighting; (c) Wastes Management: Improvements in solid and liquid wastes collt,-tion and disposal systems including vehicles, equipment and facilities to improve and expand storage and collection and the establishment of properly engineered and environmentally sound disposal sites together with the rehabilitation and construction of communa toilet facilities and of a grant (50%) program for domestic toilet provision. Background and Project Formulation 3. Following on from the Bank's Local Government Sector Study in 1992, the MLGRD proposed that a third urban project should address basic infrastructure improvements, resource mobilization and institutional strenghen:ing measures in selected district capitals and possibly other main towns. The original concept was to frame a project in two phases with the first phase covering programs to be prepared in detail in six towns and the second phase the setting up of a fund from which the other urban councils could apply for funds to support selected infrastructure projects provided they met predetermined technical, financial and economic criteria. 4. Following Bank guidelines for the use of consultants, a local consulting group was engaged and commenced work on identification of a project in mid-1992. Based on a request from the MLGRD in late 1992, the number of towns to benefit from a first phase program  -35- Annex 2 Page 2 of S was increased from lO to 11, and the consultants' scope of work was increased accordingly. Subsequently it was decided to defer the second phase of the original project given resource, implementation and time constraints. 5. The project has thus been formulated using technical information from the consultants, who visited the eleven District assemblies, discussed services and infatructure priorities of the main towns in the respective Assembly areas and carried out data gathering, planning and project Identification and consultation exercises in all of the towns. ITe subprojects reflect local priorities, as confirmed by project workshops held in Accra in March and June 1993, in which all District Assemblies were represented by elected officials, managers, and technical staff. 6. In the workshops, participants from the 11 towns expressed very similar priorities, as follows: (a) water supply (b) roads and drainage (c) markets (d) lorry parks/transport terminals (e) solid waste management (1) liquid (human) waste management Under Law 207, water supply remains the responsibility of the national Ghana Water Supply Corporation (GWSC). In all or the eleven towns water supply rehabilitation programs have already been identified, programmed and are currently being engineered with other financing. The IDA supported Water Rehabilitation Project is to support improvements in nine of the towms, and the two northernmost towns of Bawku and Bolgatanga are to be supported by a CIDA fimded projec 7. Thus, while cognizant of the fact that water supply rehabilitation is indeed the most pressing priority in all towns, given that water projects are already in the pipeline, the priorities to be supported under the LGDP were agreed as follows: (a) Markets and lorry parks (b) Waste management (c) Roads and drainage All District Assemblies confirmed these three priorities at the workshop, though in some cases the order of priority differed. 8. In formulatng the project from the proposals assembled and submitted by the consultants on behalf of MLGRD and the District Assemblies, financial and human resource capacity considerations have been taken into account. Programs have thus had to be further prortize and have been focused on rehabilitation before new development work. 9. Asssing Oaffordability at both District Assembly and at beneficiary level has been difficult given the severe data constraints. However two basic assumptions have beet made at this stag in the framing of project size.  -36- Page 3 of 10. Firstly, an assessment has been made of the subproject costs and populations of the towns which will benefit from the inrschtre and urban services programs. The per capita costs resulting from this exercise have been compared between towm and also with ots for simiar programs undertaken intemationally. 11. Secondly, it has been assumed that, in line with present GOG policy, the towns wUIl not be required to repay investment costs. However they will be expected to contribute to town maintenance funds to be established to provide financial resources for the mah enance of infrastructure and services in the three sub-sectors to be supported by the project. 12. DetaIls of the maintenance funds to be established, to which IDA wil contribute on a reducing scale over the life of the project as District Assembly contibutions increase roadly in line with increasing local revenues as a result of the Revenue Improvement Action Plans to be adopted by each town) are descbed in Annex 3. 13. With regard to capital costs, the per capita base cost of the final programs put forward averages approximately US$65, ranging from US$39 to US$119. Description 14. The project would focus essentially on rehabilitation of urban infrastructre and services which would support the economy of the towns and improve the health, productivity and well-being of town residents. The 11 towns are represented by 11 District Assemblies in six of the country's 10 regions. 15. The physical components to be supported are grouped under three major component headings, namely; (a) Markets and motor parks (b) Waste nagement (solid and liquid or human waste) (c) Roads and stormwater drainage 16. Markets and Motor Parks. Tese are to be upgraded through improvement of water supply, the provision of sanitation facilities (toilet blocks and urinals), security lighting, paving and drainage. Similar improvements are also proposed in the main lorry parks or transport terminals of the towns which have strog linkages with the markets. In addition, where access to markets and motor parks is required, this is also included under the component. 17. Wst Solid waste services are at best rudimentary in all of the towns, and in many cases systems have virtually broken down, with many areas receiving no service or only a periodic service when conditions deteriorate enough to warrant a public outcry. Collection is erratic, ad-hoc or non-xistent. However, the sitation with regard to d has been described as 'deplorable'. Solid waste is dumped at Inown tip sites on the edges of the towns with no control or covering. In many cases It is dumped indiscrimintely In drainage channels, natural watercourses, and lagoons. Even more serious are the similar practices doptd for the disposal of septge. The evacated conten of pit latrines, septic tanks, and cesspiks is dumped without basic trenching. Thus the project would fOs on establishing enironmentally sound and properly enginered disposal sites for both solid and  -37- ARMe 3 Page 4 of 5 liquid waste as well as providing basic vehicles and equipment for improvement of waste collection services to augment existing arrangements. 18. The sanitation component of the project focuses on rehabilitation of existing community toilet facilities and the need to properly maintain them. A longer term objective for improving sanitation, environment and health in the towns is for improved access to sanitation facilities appropriate for urban areas. Already some towns have attempted to carry out domestic toilet (KVIP) provision programs. However success to date has been limited primarily due to finance and management constraints. 19. The project will therefore establish a domestic toilet provision program whereby householders who wish to have a toilet constructed may apply to the District Assembly with their proposal. Householders submitting sound proposals, which would have to meet appropriate technical and financial criteria, and who contribute 50% of the cost including an initial deposit of 10% of the cost of the facility to be constructed, would be eligible for a grant of 50% of the cost of a toilet facility. The householder would be responsible for hiring the contractor from approved District Assembly lists. Works would be supervised by the District Assembly or their appointed consultants, who would also be responsible for releasing the 50% grant monies to the householder/contractor in tranches depending on progress of the work. Further details of the Scheme for Toilet Provision are set out in Appendix 13 to this Annex. 20. Roads and Stormdrains. These have for many years received litde or no maintenance, such that many roads have deteriorated to such an extent that further maintemnce is of limited benefit, and major reconstruction, or at best rehabilitation, is necessary. Under Law 207, District Assemblies now have the responsibility "to construct, repair and mainain all public roads other than trunk roads but including feeder roads and to undertake road rehabilitation programs within the District". The roads and storndrainage component of LGDP assumes that the respective District Assemblies will be the "client" for the road and drainage rehabilitation, and also the few new drains to be constructed under the project. Works will in all cases be carried out by private contractors (as for all components), in line with current policy for road construction. An understanding has been reached with the Director of GHA that the DAs will receive technical advice from the GHA regional roads offices. General procurement advice will be given, as with all components, by the Technical Services Centre. 21. Details of each town's investment programs are set out in Appendices 2 to 12 to this Annex. hmplementation Responsibilities 22. District Assemblies will implement work through contractors. The Technical Services Center (TSC) of the MWH will provide advice and assistance to DAs and MLGRD on procurement, contract administration, sub-projeat accounting and establishment of operations and maintenance programs for all components. The DAs would be assisted by local consultants, appointed by MLGRD/TSC for regular supervision (see Annex 15 for estimated TA inputs). In addition, for the road and drainage rehabilitation component, the relevant regional offices of Ghana Highways Authority (GHA) would be available for assistance on technical matters regarding roads. Overall project coordination, technical supervision,  -38- A2m Page S of S accounting and reporting, will be the responsibility of TSC (see Annex 11 and Implementation Maa). Technical Assistance 23. Annex S. Section 1 describes ical assistance to be provided, through national consultants, for supervision of civil works, improving operation and maIntenace, and other tasks related to the ifratructu and services program. A total of 160 person-months of national consultants will be provided to the 11 DAs over a dee year period. Costs and nancing 24. The total base cost including design and supervision of the physical investment program alone is US$35.69 million (Cedis 25,263 million) for the eleven cities. Of this the foreign exchange component is emat at US$23.04 million. The total physical investment program for each town (base cost - including design and supervision at 5% but excluding oningencies) is as follows: mm=vo District AM= nbies -Sunyani Sunyani 4.03 2,854 Ho Ho 2.78 1,965 KetaAnloga Kea 3.SS 2,514 Koforidua New Juaben 3.69 2,610 SW-edu Agona 2.21 1,567 Wa Wa 2.07 1,462 Cape Coast Cape Coat 2.56 1,810 lmina Elaina 2.02 1,433 Bolgatanga Bolgabanga 3.92 2,778 bawku Ebwku 4.08 2,886 Techimmn Techinan 4,3 Sub-Total: 3.92 25. Financing would be as follows: IDA GOG KXW Lxm Fonwm Ig4 Foia Lx FouMi Pbreent 25 75 100 0 40 60 US$illiornu $6.45 $19.10 $3.57 S0 $2.63 $3.94  KOCAX GOVERNBET DEVBLOPXENT PROJECT Infrastructure Investment Program Urban Population Served and Per Capita Costs 1993 Cost US$ Towns Districts S (Kill.) Cedis (Mill) PoDulation Per Canita 1. Sunyani Sunyani 4.03 2,854 52,927 76.14 2. so Ho 2.78 1,965 43,966 63.23 3. Keta/Anloga Kota 3.55 2,514 53,985 65.76 4. Koforidua New Juaben 3.69 2,610 95,799 38.52 5. Swedru Agona 2.21 1,567 39,548 55.88 6. Wa Wa 2.07 1,462 50,191 41.24 7. Cape Coast Cape Coast 2.56 1,810 61,095 41.90 8. Elmina Elmina 2.02 1,433 21,834 92.52 9. Bolgatanga Bolgatanga 3.92 2,778 45,733 85.71 10. Bawku Bawku 4.08 2,886 46,485 87.77 11. TechiuAn Techiman 4.78 3,385 40,143 119.07 Totals 35.69 25,263 551,706 64.69 ND. Physical Investment Program includes Design I!  -40- RPUBLIC OF GHAA ANX 2 LOCAL GOvERUNN DEVELOPMENT PROJECT Appendix 2 SUNYANX Base Cost Total Base No. of Per Unit Cost COMPONENT Units Units (Cedi Nil) (Cedi Nil) A. ROADS I DRAINaGE - Traffic Igmt. Measures 10 xm 3.48 34.79 - Intersection Signals 0 No. 7.50 0.00 - Rehab. Rds. & Drainage St. 10.6 Rm 139.17 1,475.19 sub-Total 1,509.98 B. MARKET8 & LORRY PARKS - Toilets 7 no. 23.19 162.36 - Public Standpipes 12 No. 0.06 0.70 - Drainage 1.26 Km 11.48 14.47 - Paving of markets 1.98 Ba 81.18 160.74 - security Lights 72 No. 0.31 22.04 - Shower Blocks 5 No 4.93 24.64 - Lorry Park/Existing Market LS 16.65 - zarthwork 1.86 Ha 60.48 112.49 - Access Roads to Lorry Park 0.3 Km. 139.17 41.75 sub-Total 555.84 C. SOLID WASTE MANAGEMENT Civil Works - Landfill Site Development 11 Ha 5.62 61.87 - Clearing Exist. Refuse Reaps LS 11.60 - Concrete Pads for Skips 20 No. 0.50 9.97 Vehicles & Equipment - Skip Vehilel 2 No. 56.64 113.28 - Open Containers 20 No. 1.42 26.32 - Covered Containers 1 No. 1.77 1.77 - Landfill Equipmewt (Bulldozer) 1 no. 154.11 154.11 Land Acquisition 11 Ea 1.30 14.28 Sub-Total 395.20 D. LIQUID WASTE MANAGEMENT Land Acquisition 2 Ha 2.36 4.72 Vehicles - C espit Emptier 2 No. 56.64 113.28 - Grant Scheme for Toilets LS 52.19 Civil Works - Exten. of Water (Sanit.gites) 10 No. 0.29 2.90 - Construction of Add. Tolets 2 No. 23.19 46.39 - Renovation of Toilets 11 No. 2.90 31.89 Sub-Total 251. 37 K. MAINTENANCE WASTE MOM?. - Vehicles & Equipimat LS 40.73 Sub-Total (A - B) 2,761.12 F. DE8IG1N & SUPERVISION 93.38 TOTAL PHYSXCAL INVEST. EAsE COSTs 2T854.49  -41- REPUBLIC OF GHANA Annex 2 LOCAL GOVERNMENT DEVELOPMENT PROJECT Appendix 3 no Base Cost Total Base No. of Per Unit Cost COMPOLENT Units Units (Cedi Nil) (Cedi il) A. ROADS & DRAINAGE - Traffic Mgmt. Measures 10 Km 3.48 34.79 - Rehab. Rds. & Drainage St. 6.4 Km 139.17 890.68 Sub-Total 925.47 B. MARKETS & LORRY PARKS Rehab. of Structure - Toilets 2 No. 34.79 69.58 - Paving of Markets/Lorry Parks 1.545 Ha 80.37 124.17 - Security Lights 14 No. 0.39 5.44 - Standpipes 6 No. 0.35 2.09 - Shower Blocks 2 No. 4.93 9.86 - Urinals/Toilets at Lorry Parks 1 No. 23.20 23.20 - Drainage 1.52 Km. 17.22 26.18 Sub-Total 260.51 C. SOLID WASTE MANAGEMENT Civil Works - Landfill Site Development LS 29.57 - Clearing Exist. Refuse Heaps LS 11.60 Vehicles & Equipment - Skip Vehicles 2 No. 56.64 113.28 - Open Containers 20 No. 3.54 70.80 - Covered Containers 1 No. 3.78 3.78 - Landfill Equipment 1 LS/No. 153.73 153.73 Land Acquisition 9 Ha 2.36 21.24 Sub-Total 404.00 D. LIQUID WASTE YANAGEMENT Land Acquisition 2 Ha 2.36 4.72 Vehicles - Cesspit Emptier 2 No. 56.64 113.28 - Grant Scheme for Toilets LS 115.97 Civil Works - gxten. of Water (Sanit. Sites) 9 No. 0.58 5.22 - Renovation of Toilets 7 No. 3.48 24.35 Sub-Total 263.55 E. MAINTENANCE WASTE MGM. - Vehicles & Equipment LS 48.73 Sub-Total (A - B) 1,902.27 P. DESIGN & SUPERVISION 63.00 TOTAL PHYSICAL INVEST. BASE COST 1,965.27  -42- REPUBLIC OF GHANA Annex 2 LOCAL GOVERNMENT DEVELOPMENT PROJECT Appendix 4 XETA & AULOGA Base Cost Total Base No. of Per Unit Cost COMPONENT Units Units {Cedi MiL_ (Cedi Nil) A. ROADS & DRAINAGE - Traffic Mgmt. Measures 8 Km. 3.48 27.83 - Rehab. of Rds. & Drainage 5.1 Km. 139.17 709.76 - Drains 1 Km. 22.96 22.96 Sub-Total 760.56 B . MARKETS & LORRY PARKS - Security Lights 27 No. 0.39 10.49 - Toilets/Urinals 3 No. 11.60 34.79 - Shower Blocks (Keta) 1 No. 4.93 4.93 - Ext. of Elect. & Water LS 5.80 - Access Roads to Market 0.2 Km. 139.17 27.83 Sub-Total 83.84 C. SOLID WASTE MANAGEMENT Land Acquisition 11 Ha 3.54 38.94 Civil Works - Landfill Site Development LS 297.94 - Concrete Pads for 24 m.c. Cont. 10 No. 1.28 12.76 Vehicles & Equipment - Tractors 3 No. 35.40 106.20 - Trailors 18 No. 3.54 63.72 - Landfill Equipment 1 No. 50.62 50.62 - Clearing of Refuse Heaps LS 11.49 - Container Vehicles 2 No. 84.96 169.92 - Container (24) 10 No. 9.44 94.40 Sub-Total 845.98 D. LIQUID WASTE MANAGEMENT Land Acquisition 2 Ha 3.54 7.08 Vehicles - Ceaspit Emptier 1 No. 56.99 56.99 - Grant Scheme for Toilets 115.97 Civil Works - Exten. of Elect. (Sites) 21 No. 0.58 12.18 - Construction of hand dug well 17 No. 0.58 9.86 - Construction of Add. Toilets 5 No. 17.40 86.98 - Rehabilitation of Toilets 14 No. 17.40 243.55 - Renovation of Toilets 11 No. 3.48 38.27 - Development of Disposal Sites LS 154.83 Sub-Total 725.70 E. MAINTENANCE WASTE MGMT. - Vehicles & Equipment LS 17.58 Sub-Total (A - Z) 2,433.67 F. DESIGN & SUPERVISION 79.88 TOTAL PHYSICAL INVEST. BASE COST 2.513.5  -43- REPUBLIC OF GHANA Annex 2 LOCAL GOVERME