Colombia - First Santa Fe Water Supply and Sewerage Rehabilitation Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-6487-CO MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON TWO LOANS IN AN AGGREGATE AMOUNT OF US$ 145 MILLION TO THE EMPRESA DE ACUEDUCTO Y ALCANTARILLADO DE BOGOTA (EAAB) WITH THE GUARANTEE OF THE REPUBLIC OF COLOMBIA FOR A SANTAFE I WATER SUPPLY AND SEWERAGE REHABILITATION PROJECT OCTOBER 20, 1995 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit = peso US$1 = 831 pesos (December, 1994) all figures in dollars unless otherwise noted WEIGHTS AND MEASURES Metric ABBREVIATIONS AND ACRONYMS BOT - Build-Operate-Transfer type of contract BRC - Bogota River Committee Capital District - The city of Bogota CAR - Corporacion Autonoma Regional CONFIS - Consejo Fiscal del Distrito Capital CRAS - Comision Reguladora de Agua y Saneamiento DAMA - Departamento Administrativo del Medio Ambiente DAPS - Direccion de Agua Potable y Saneamiento DNP - Departamento Nacional de Planeacion DTF - Passive Annual Interest Rate in Colombia EAAB - Empresa de Acueducto y Alcantarillado de Bogota EEB - Empresa de Energia de Bogota FINDETER - Financiera de Desarrollo Territorial GIS - EAAB Geographical Information System IDB - Interamerican Development Bank INDERENA - Former National Environmental Agency JAL - Juntas de Administracion Local LIBOR - London Inter-Bank Offering Rate ME - Ministry of Environment MIS - Management Information System NGO - Non Governmental Organization SINA - National Environment System SSPD - Superintendencia de Servicios Publicos Domiciliarios FISCAL YEAR January I - December 3 1 FOR OFFICIAL USE ONLY COLOMBIA SANTAFE I WATER SUPPLY AND SEWERAGE REHABILITATION PROJECT Loan And Project Summary Borrower: Empresa de Acueducto y Alcantarillado de BogotO (EAAB, BogotA Water Supply and Sewerage Company) Guarantor: Republic of Colombia Poverty: Program of Targeted Interventions towards the Urban Poor. Amount: Two loans totaling US$145 million. Terms: (i) a first loan for US$87 million (60% of total) on Fixed Rate Terms for Single Currency Loan in US$ for up to 15 years. Each semester's aggregate disbursements (Disbursed Amount) would have a grace period of 3 years and a final maturity of 9 years, both beginning from the rate fixing date for such Disbursed Amount; (ii) a second loan for US$58 million (40% of total) on LIiBOR-based terms for Single Currency Loan in US$ involving 17 years repayment, including a grace period of 5 years. Interest Payment Dates and Rate Fixing Dates: May 15 and November 15 Commitment Charge: 0.75% on undisbursed balances, beginning 60 days after signing, less any waiver. Financing Plan See Schedule A Estimated Rate of Return: Internal rate of return is 17% and benefit-cost ratio is 1.49 at a discount rate of 10%. (See Schedule B, Table 1) Staff Appraisal Report: No. 13738 CO, dated October 20, 1995 Map IBRD 26608 Project Identification Number: CO-PA-6894 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON TWO PROPOSED LOANS TO COLOMBIA FOR A SANTAFE I WATER SUPPLY AND SEWERAGE REHABILITATION PROJECT 1. I submit for your approval the following memorandum and recommendation on two proposed loans to the Empresa de Acueducto y Alcantarillado de BogotA (EAAB), with the guarantee of the Republic of Colombia, for an aggregate amount of US$145 million to finance the first phase of a Santaf6 I Water Supply and Sewerage Rehabilitation (Santaf6 I) project. A first loan for US$87 million (60% of total) would be on Fixed Rate Terms and a Single Currency Loan in US$ for up to 15 years. Each semester's aggregate disbursements (Disbursed Amount) would have a grace period of 3 years and a final maturity of 9 years, both beginning from the rate fixing date for such Disbursed Amount. A second loan for US$58 million (40% of total) would be on LIBOR-based terms for Single Currency Loan in US$ involving 17 years repayment, including a grace period of 5 years. EAAB as Borrower and the Republic of Colombia as Guarantor are eligible for single currency loan terms, since they have authorized conversion of all VLR82 loans. Including these two proposed loans, single currency loans to Colombia would amount to US$290 million under the expanded single currency loan program, or 57 percent of the Bank's planned FY96 lending to Colombia of US$504 million equivalent. Sectoral Context 2. Most watersheds in Colombia suffer major environmental damage from pollution due to domestic sewage, industrial effluents, solid waste, pesticides, or oil pipeline leaks. In addition, increased sedimentation is caused by alarming levels of deforestation and mining operations. Wastewater treatment facilities are almost totally absent; only 2% of wastewater nationwide receives any treatment befbre disposal. Solid waste collection is available to about 60% of the urban population and non-existent in rural areas. Diseases associated with unsafe water and inadequate sanitation are endemic in Colombia. Although substantial progress has been made in the past two decades in reducing mortality and morbidity in the country, the provision of safe water and adequate sanitation is required to complement other efforts by the Government in the public health field in order to reduce such incidence from water and sanitation related diseases to internationally acceptable levels. 3. As outlined in the 1991-1994 Development Plan, the Government's main sector goals were: (a) restructuring of existing institutions to promote further decentralization; (b) increasing national household coverage for water and sewerage services; (c) improving the quality of treated drinking water from public systems; and, (d) formulating and initiating implementation of a wastewater treatment strategy for the largest cities. Despite the increasing levels of investment flows into the sector, continuing administrative weaknesses and inefficiencies , including, in particular, continuing high levels of Unaccounted-for-Water (UFW) in the major municipal systems are adding to the overall cost of delivery and contributing to premature and costly additions to capacity. The high levels of UFW are attributed to a large extent to inefficient and fraudulent commercial practices, as well as to water losses caused by inadequate maintenance. 4. Water supply and sewerage coverage levels are high in the Bogota Capital District metropolitan area, and water quality is also high. However, this coverage has been achieved at relatively high cost. Current priorities are now the improvement of efficiency, particularly through reduction of UFW, and achieving a cost-structure related to productivity. Systemic distortions in -2- tariffs, lack of strategic vision and continued political interference in EAAB management and operations had led to a long-standing neglect of maintenance, and culminated in a financial crisis which reached its peak in 1991, from which the EAAB has been recovering over the last two years. 5. The major issue facing the Capital District of Santaf6 de BogotA (BogotA) is the rapid growth in water demand that will require major investments in developing new and more costly water sources to avoid rationing in the near future. It is also estimated that some 100,000 lack access to adequate water supply services and about 750,000 to adequate sanitary toilet facilities. In addition, an estimated 500,000 live close to highly polluted water courses, the BogotA River and its tributaries that run through the city, or in low areas prone to frequent flooding. 6. The main operational issue facing the EAAB is the rapid increase in UFW from 22% in the early 1970's to about 42% in 1990; UFW was about 40% at the beginning of 1994. EAAB, under a study financed under the BogotA IV project (Loan 2512-CO), assessed the causes of this high UFW. The main cause, which accounts for about 65% of the UFW, is related to problems in the commercial system i.e., illegal connections, inaccurate consumer records, software tampering and faulty meters. The rest (35%) is mostly caused by leaks in the distribution system and house connections and problems with macrometering. Based on these findings, EAAB has developed a comprehensive plan to reduce UFW to about 25% by the year 2000. Implementation of this plan has begun as an integral part of the Santaf6 I Project. 7. EAAB's water production capacity is limited to about 65% of the nominal capacity (836 million m3/year) because of constraints in the 60-year old Tibit6 system. At present, the main concerns in this regard are the vulnerability of the primary water distribution system from the Tibit6 water treatment plant as a result of well-documented structural deficiencies in the 75 km long pipeline, and the lack of adequate back-up infrastructure for the Usaqu6n tunnel that conveys water from the Wiesner water treatment plant that currently supplies 70% of BogotA's water needs. Potential breakdowns in either of the two systems would have disastrous effects on EAAB's ability to meet the average daily demand without resorting to water rationing for prolonged periods. The project addresses these particular concerns through the special emphasis on reducing system vulnerability and through the rehabilitation of the Tibit6 treatment plant to enable it to function at or close to its rated capacity. 8. Coverage of the sewerage systems, also high by national standards, reaches 85% of the population. The drainage system covers about 70% of the population. However, low lying areas of the city are subject to periodic flooding, exacerbated in part by control structures on the BogotA River needed to satisfy irrigation and hydroelectric power generation requirements. The sewerage and drainage systems are combined in the old sections of the city. In other areas, sewerage and drainage are separated. In practice, due to lax enforcement, many illicit or unauthorized connections have been made to the two systems and therefore they operate, to some extent, as a combined system. The problem created by these illicit connections will be studied in detail as part of the proposed studies to reduce pollution in the BogotA River, as they are a determining factor in the definition of specific remedial actions. Government Policy and Institutional Changes in the Water and Sanitation Sector 9. The administration of President Samper, who took office in July 1994, has continued the basic policy of liberalization of the economy, that was the cornerstone of the economic reform process of the previous administration, but with a renewed focus on expanding and improving the provision of -3- basic infrastructure and services for the majority of the population. Consistent with this objective, the priorities in the water and sanitation sector are now to sharpen the focus on improving the coverage and quality of municipal and rural delivery of drinking water and access to basic sanitation through an enhanced and concentrated public expenditures program, while at the same time, setting in place policies to encourage the private provision of such public services. The Government's strategy also aims at promoting the establishment of a more responsive system of governance based on decentralization and community participation, through continued restructuring of state agencies and development of more adequate regulatory structures and mechanisms. 10. Over the past three years, the Government has been working to ensure that the financial restructuring, institutional changes, and technical re-orientation of the company is consistent with the strategy outlined in the previous paragraph. The major achievements in this regard have been: (a) EAAB, which was in serious financial difficulties in 1992, has undergone financial restructuring through a rescue package that was put together by the National Government with Bank assistance, and has since made steady improvements in performance. This has included significant gains throughout 1994 in the stabilization and reduction of UFW, improvements m collection efficiency, and better overall financial management. Early in 1993 and 1994, water and sewerage rates were increased by approximately 6% in real terms. (b) At the same time, through the recently enacted Public Services Law of July 1994, EAAB has been transformed from a municipal public service agency into a public utility company governed by new internal statutes. The new legal environment provides the management autonomy that had been identified as one of the major stumbling blocks to enhanced efficiency and operating performance. (c) EAAB has undergone substantial internal reorganization in order to allow greater use of contracting-out of commercial services, and to enhance performance and efficiency. The lessons of Bogota IV project have been applied to ensure improved implementation performance for the Santafd 1 Project. (d) EAAB has satisfactorily completed an investment plan which will address BogotA's water supply, sewerage, drainage and flood control needs over the next decade, catching up with the growth in population that has already taken place and preparing for the expected population growth. It gives a high priority to reducing the vulnerability in the system to physical breakdown; expansion of services to over a million urban poor; investment needed to upgrade the urban environment and reduce public health hazards; and starting to define a longer-term strategy for water and sanitation in the metropolitan area. Project Objectives 11. In light of the above, the key objective of the project is to support and consolidate the transition of EAAB from a public service agency to a commercially-run public utility company. The transition of EAAB would be accomplished through a seven-year program which would comprise traditional infrastructure elements including, physical investments in the water, sewerage and flood control/drainage systems and consultant services for engineering and supervision, combined with technical assistance for the ongoing program of institutional strengthening, reinforcing EAAB's -4- transition to a corporate entity which could eventually attract private partners. The project is going to finance the first part of this seven-year program so as to make the transition into a commercially viable company irreversible. The other project objectives would: (a) expand water distribution and sewerage services to the urban poor, in particular, targeting the lowest income and fastest growing groups in the metropolitan area; (b) address major environmental concerns in the heavily polluted BogotA River by initiating the financing of the major works needed for the longer-term development of effective waste- water treatment; (c) reduce the vulnerability of the BogotA water supply and sewerage systems to physical breakdown and interruption of service; and (d) support EAAB's revamped economic and tariff framework to reflect fully the costs of providing its services now and, in the medium and longer-term. Project Description 12. The project has the following components: (a) A vulnerability control component (13.7 % of project cost) comprising rehabilitation of one of the two major supply pipelines, one of the two main water treatment plants, and construction of a back-up tunnel, all designed to enhance system reliability and minimize potentially disastrous water rationing in the near term. (b) A primary sanitary and storm drainage sewerage and pollution control component (23.5 % of project cost) including construction of sewage interceptors, trunk sewers, storm water drainage system and drainage canals as well as construction of 12.5 km. of a main collector parallel to the BogotA River. (c) A primary water distribution system component (14.1 % of project cost) including storage reservoirs, primary mains and pumping stations. (d) A component for expansion of the secondary water supply, sewerage and drainage networks and service connections (22.9 % of project cost) to reach areas of the city that are presently without adequate coverage and that would mainly benefit the urban poor. (e) A rehabilitation component including rehabilitation of water and sewerage networks (5.2% of project cost) to improve reliability and reduce contamination of water supplies. (f) An institutional strengthening component (7.7 % of project cost) comprising: implementation of an UFW reduction program, development of a water conservation program, development and implementation of a staff training program, establishment of new MIS and financial information systems and establishment of an environmental protection committee of EAAB. (g) A technical assistance component (11.4 % of project cost) to complete the final designs of the proposed works, supervise construction, and prepare feasibility studies and designs for major expansion of water production capacity required after 2003, sewerage studies covering longer-term rehabilitation needs of the system and hydraulic rehabilitation for flood control, and studies and implementation of advisory services for EAAB's future corporate form and capital structure involving substantial divestment of the BogotA Capital District's ownership. (h) An environmental component (1.6 % of project cost) to help formulate and implement wetlands conservation, prepare and implement mitigatory measures for adverse environmental impacts and assist in a resettlement program. Project Cost and Financing 13. The total project cost is estimated at US$717.9 million, including physical and price contingencies, and duties and taxes, estimated at US$66.9 million. The first phase covering civil works, goods, land acquisitions, and consulting services expected to be contracted prior to December 31, 1998, is estimated to cost US$414.2 million, and would be disbursed in 7 years. The two proposed Bank loans, for the first phase, totaling US$145 million, represent 38.7% of the first phase of total project cost, net of taxes, and would help finance the first phase of project implementation (1995-98). The Bank has indicated to the Government that it would consider a request for further loan(s) to help finance the remaining period of the project. The project cost estimates and proposed financing plan are shown in Schedule A. Out of the proposed loans, a maximum amount of US$ 14.5 million (10% of the total loans) would be available for retroactive financing of urgent works of water supply, sewage collection and flood control, and for completion of designs of work to be implemented under the -5- project. Project implementation is expected to take altogether seven years. A table on procurement methods, the disbursement arrangements, and the estimated disbursement schedule are shown in Schedule B. A timetable of key processing events and status of Bank Group operations in Colombia are given in Schedules C and D respectively. Staff Appraisal Report No. 13738-CO, dated October 20, 1995, is attached. Project Implementation Arrangements 14. EAAB will be the Borrower and sole beneficiary of the Bank loans. EAAB will coordinate with DAMA in the implementation of the environmental component relating to the protection of wetlands. EAAB has recently undergone a major organizational restructuring to be able to carry out project implementation in an appropriate strategic context. Since the project objectives and activities will represent practically all of EAAB's functional areas of activity, effective project implementation and oversight will be primarily dependent on effective management practices at all levels. The General Manager of EAAB will have a crucial role in this regard. A senior manager of EAAB's staff, highly experienced in management of large scale projects, will be nominated as the Santafe I project Coordinator, reporting directly to the General Manager. He will be assisted by a project coordination unit staffed by external consultants who have already been hired. This unit is composed of a group of experts who will provide independent monitoring of each activity of the project components and oversight of project implementation. Moreover, in order to enhance institutional and strategic sustainability, EAAB is now taking steps to enter into contractual arrangements by November 1995, with a modem and efficient water utility in an industrialized country, for support with advice, transfer of executive know-how and trouble shooting over the long-term. To expedite disbursements, two Special Accounts (one for each loan) would be opened in a commercial bank at EAAB's discretion, with initial deposits of US$2.0 and US$3.0 million respectively, until disbursements from the loans account have reached the equivalent of US$20.0 and US$30.0 million, at which point, the deposit in the Special Account would be raised to the equivalent of US$4 and US$6 million to cover four months of expected average disbursements thereafter. 15. The program of UFW reduction will be managed by a special group with a coordinator reporting directly to the General Manager. This position has been established not only to implement the proposed actions to reduce UFW, but as a permanent feature of EAAB's organization to ensure that UFW reduction goals are reached and remain under control. The institutional alternatives' study and its subsequent implementation actions will be managed by a steering committee integrated by the Capital District, EAAB's General Manager and some high level officials. A technical group will support study supervision and will be strengthened to help carry out all implementation issues. A set of operational, monitoring, impact, financial and project execution targets and indicators has been established to monitor performance of both the project and performance of the Borrower. EAAB has contracted the services of a consulting firm which will report on EAAB's compliance with these indicators by September 30 of every year as well as prepare projections for the following three years. This report and these projections will be submitted to the Bank for review. The Government has set up a project oversight committee with representatives of the Ministries of Finance and Development, DNP, FINDETER and EAAB, which will evaluate the reports on progress and compliance with the physical and institutional objectives of the Santaf6 I project. These reports will be prepared by an independent external auditing firm commissioned by the Government to monitor the Performance Plan. -6- EAAB Financial Performance and Viability 16. EAAB's financial situation steadily deteriorated during the period 1988-92. During execution of the Bogota IV project, political interference increased, and, despite new investments in the water and sewerage system, EAAB's operations began to suffer greater inefficiencies. Staff levels ballooned, and maintenance was neglected as operating revenues failed to keep pace with rising costs. The difficult financial situation was confronted by the National Government in 1993, when it decided to rescue EAAB and refinanced almost the entire foreign debt service becoming due in the second half of 1993, and in the years 1994 to 1997 as part of a broader agreement for restructuring EAAB to achieve greater efficiency and accountability through the aforementioned legally binding Performance Plan. 17. The forecast of EAAB's financial performance (see Schedule B, Table 2 for a summary of the main financial results and indicators) under the proposed project is consistent with the objectives of the Performance Plan and its specific financial targets. The results of the financial analysis confirm the viability of implementing the proposed project of US$717.9 million, for which the envisaged funding mix will be adequate, with indebtedness remaining at prudent limits. The forecasts show that increases in water and sewerage tariffs in real terms of about 3% in 1996 and 2.5% each in 1997 and 1998 will be required in order to enable EAAB to meet its investment obligations and maintain sound liquidity. However, further tariff increases in real terms and tariff structure adjustments will be needed beyond that period if EAAB is to reduce existing distortions in the tariff structure and meet the minimal requirements of full cost recovery as stipulated in the Public Services Law. After several years of inadequate tariff levels, EAAB was able to obtain average tariff increases of 5% in real terms in each of 1992 and 1993. In 1994, tariffs on bulk sales to neighboring municipalities were increased by an average of 5% in real terms, while tariffs on residential sales in Bogota were adjusted to the inflation rate. Serious structural deficiencies still remain. EAAB has initiated a study of the tariff structure as part of the proposed project. This is expected to be completed in December 1995. The results will be incorporated into a revised tariff structure beginning in 1996. As the tariff changes will mostly affect the lower income groups, the period of adjustment and attainment of adequate tariff levels, as defined under the Public Services Law, will likely be phased. Nevertheless, with continued improvements in operating performance, EAAB should be able to achieve the levels of average cost coverage that will be fully adequate in meeting its ongoing investment commitments as well as its present and future debt service obligations. 18. The financial projections show that under the assumptions and forecasts of improvement in EAAB performance, the rate of return on revalued (inflation-adjusted) net fixed assets in use rises from a negative 0.23% in 1994 to over 6% at the end of the project. This is satisfactory, and reflects the improvements in EAAB's tariff structure and the impact of the project on efficiency and reliability of the water system and of EAAB itself. In order to minimize the financial risk and to ensure that EAAB's financial recovery continues on the path set out in the agreement with the Government to finance the external debt service obligations over 1993-1997, it is essential that the specified Action Plan financial targets are met each year by EAAB. These targets will be monitored through annual reviews of progress being made under the Action Plan. In addition to the monitoring of the physical performance targets set forth for the project (para. 14), the Bank would also monitor the financial targets and the other financial covenants pertaining to liquidity and operating efficiency. These should ensure that EAAB's financial condition will improve steadily over the project implementation period. Under the strict regimen of the proposed financial covenants and the action Plan targets, the level of financial risk inherent in the project is acceptable. -7- Accounts and Audit 19. EAAB's accounting practices are satisfactory and follow generally accepted accounting principles applicable to a water and sewerage utility. The financial statements have been regularly audited by independent external auditors. The audits have been satisfactory and generally without qualifications after a major effort in 1992-93 to remedy deficiencies, particularly with respect to correction of errors in accounting treatment of fixed asset reevaluations. Audits cover Special Accounts established under earlier projects. This practice would continue under the proposed project. EAAB will also present independent audits of its Employee Pension Fund and present annual actuarial valuations. Project Sustainability 20. The main focus of the project is on establishing a sustainable systemic framework to enhance the efficiency of delivery of water and sanitation services in the country's largest urban area and to ensure its long-run financial and operational viability. The important institutional and structural changes that have been carried out by the Government in recent years (para. 10 ) coupled with the continued commitment of the national and District governments to the institutional objectives of the project will help ensure its sustainability. The Santafd I project itself places clear priorities on rehabilitation and on the elimination of system vulnerability and has a particular focus on expanding coverage to the urban poor. Lessons from previous Bank Involvement 21. Since 1968, the Bank has made 13 loans totaling about US$555 million for water supply and sewerage development in Colombia. About 60% of total Bank loan funds (US$337.8 million) were lent to five municipal water companies (in Bogota, Cali, Barranquilla, Cficuta and Palmira) through nine separate operations. By far, the largest borrower has been the BogotA Water and Sewerage Company (EAAB) to which the Bank has lent US$261 million in four lending operations. 22. Lessons learned from implementation of previous and ongoing projects were applied in the preparation of the Santaf& I, where greater care was given to estimating water demand and consumption levels, to undertaking more detailed surveys for complex works prior to bidding, and to adopting a more realistic implementation schedule than in the past projects. A comprehensive set of systemic solutions and structural changes have been agreed and are now being implemented. Overall, the main lesson from previous Bank projects with EAAB, and particularly BogotA IV, is that institutional and financial issues must be addressed up-front. The proposed project reinforces the focus on structural reforms through a monitoring strategy that uses a phased investment approach and a time-bound Action Plan to follow the progress of the structural and corporate transformation of EAAB. 23. For several years, under the BogotA IV project, the Bank signaled the urgency of corrective actions, and attempted to secure compliance with covenanted conditionality regarding financial performance. Late in 1993, the National Government and the Mayor of BogotA took positive steps towards the resolution of the underlying structural, institutional and financial, issues which led to EAAB's financial crisis in 1989-92. These included, the establishment of a Performance Plan with specific monitorable targets for institutional improvement linked to a financial rescue package from the National Government (see para 16 above) , change in the corporate structure of EAAB to give it the -8- character of an industrial commercial enterprise with substantially greater managerial and financial autonomy, and lessened political interference in the daily conduct of EAAB business. These institutional steps have been further strengthened by the enactment of the Public Services Law as mentioned in para. 10 above. Rationale for Bank Involvement 24. The country's prospects and the Bank's assistance strategy were discussed by the Board on December 16, 1993. The country assistance program seeks to help the Government consolidate and increase its structural reforms, support private-sector-led growth, improve the delivery of basic services, address the degradation of the natural resource base, and strengthen institutional capacities. Policy reform and institutional development will be stressed and improving project implementation will continue to be a major priority. The proposed project is consistent with this strategy in supporting the institutional transition of EAAB from a public service agency to a commercially viable utility, in the close monitoring of project implementation through a well-defined action plan, and in helping lay the basis for the longer-term investment needs of Bogoti, especially in water treatment, through rationalizing the current tariff regime. Agreements Obtained 25. During negotiations, agreements were obtained from the Capital District of Bogoti (under the Sponsor Agreement) on: a) confirmation of the amounts and schedule of capital transfers from the District to EAAB; b) provision of funds as may be needed by EAAB to meet its financial obligations and maintain satisfactory liquidity and working capital ratios as stipulated in the Action Plan, (paragraph 26); c) provision of funds for the project as may be needed by EAAB in the event of catastrophic breakdown of its water systems; and d) commitment to ensure that EAAB remains in compliance with the Action Plan targets and to take corrective action as needed from time to time. 26. Agreements were also obtained from EAAB on: a) an Action Plan covering operational and financial performance, including, inter alia, completing and implementing a tariff structure study, b) maintaining prudent financial position, including, inter alia, liquidity and working capital, and taking appropriate actions with regard to tariff increases, cost reductions and other measures to increase operating income, c) providing annual reports of compliance with the Action Plan, d) furnishing before soliciting bids, evidence of clear title to the lands and rights needed for all construction works under the Project, including completion of actions on needed resettlement, and e) establishing an Environmental Committee to oversee the environmental management plan of the project. Poverty Category 27. Program of Targeted Interventions (PTI). The expansion of secondary water and sewerage networks is targeted towards the urban poor. About 180,000 metered water service connections and about 200,000 sewerage service connections in low-income neighborhoods will expand service coverage to more than 1,000,000 residents, while construction of drainage and flood control works in such neighborhoods will significantly reduce flooding, and enhance public health and sanitation. In addition, the UFW reduction program will target the metering of about 600,000 service connections in primarily low-income neighborhoods to improve services, reduce leakage and thereby enhance reliability of water supply services in such areas. -9- Environmental Aspects 28. A detailed environmental assessment covering resettlement, wetlands conservation and land acquisition was prepared for the project,' including a Resettlement Plan to cover population expected to be affected by the construction of major storm-water drainage works. The project is classified as Category A under the Bank's rating system. Program Objective Category 29. While the primary objective of the project is the rehabilitation and expansion of Basic Infrastructure and Urban Development (IU), the project also emphasizes other key objectives of Private Sector Development (PV), Public Sector Management (PB), Poverty Alleviation (PA), and Environment (EN). The design of the project specifically targets each of these project objective categories. Participatory Approach 30. The development of the Santafd 1 project has involved extensive community participation, particularly in the selection of priority works for the secondary and tertiary water distribution and sewerage and drainage networks. Counterpart funds for these works are provided by the Distrito Capital under the provisions of the Law 60 transfers, and are included in the financing plan. EAAB is also developing a participatory program with low income communities to reduce UFW and eliminate illegal connections, and to improve water conservation awareness at the local level. EAAB's program of private sector participation in project implementation will also include unbundling of billing and collection services to communities to improve efficiency and encourage prompt payments for services rendered. EAAB's is laying substantial emphasis on community relations in the implementation of the Santaf6 1 project and has been carrying out regular public relations campaigns to emphasize its client- orientated image for the nineties. Project Benefits and Economic Rate of Return 31. The project will directly benefit over 1,000,000 of the urban poor living in marginal neighborhoods of Bogota, and substantially enhance their living conditions thereby contributing to improved public health and sanitation. The economic justification for the project is based on the benefits it would generate in the form of higher water sales and cost savings from investments that promote efficiency in water supply and sewerage. These benefits will mainly stem from the rehabilitation of the water supply and sewerage network and the implementation of the water loss reduction program, that will result in an increase of the available water supply. The project would also foster a number of non-quantifiable benefits. However, the lack of reliable data has precluded a quantitative estimation of these benefits. These benefits include health benefits, environmental benefits, cost savings from postponed investment, increased property values in flood prone areas, and benefits associated with the institutional strengthening of the capacity of EAAB to plan and manage its resources. Based on the economic analysis of the quantifiable benefits and compared to the alternative of not carrying out the project, the internal rate of return is 17 percent and the benefit-cost ratio is 1.49. A sensitivity analysis has also been carried out which showed that the results were robust. Only in a worst case scenario, in which it A sunmnary report was distributed to the Board of Directors on November 21, 1993, and a final report was received by the Bank in January 1994 , and has been sent to the Public Information Center. - 10 - is assumed that few improvements were made in a number of key assumptions (i.e. no real tariff adjustments and marginal improvement in collection efficiency and unaccounted for water), does the project's internal rate of return fall below 10 percent. Risks and Safeguards 32. The main risks of the project are associated with attaining the institutional reforms that are being implemented. As discussed earlier, these risks principally entail possible back sliding on the reforms pertaining to autonomy of EAAB and actually securing managerial and financial independence substantively free from political interference. The principal safeguard against these risks has been in sensitizing the public over the last two years to important issues, of direct concern to them such as the demand for more effective, efficient and responsive services, and the provisions agreed and reflected in the Development Plan for disclosure of key information to all clients every two months, along with having consumer representation on the restructured Board of EAAB. These risks are also mitigated by ensuring that more of EAAB's operations will be let out to private sector participation in the form of long-term concessions and service contracts which would provide a measure of insulation from political interference. Adequate financial safeguards are being proposed under the project covenants to reduce financial risks and help ensure commitment by the government at the national and capital district levels to sound financial structure for EAAB and for delivery of the basic water and sewerage services to the city. The mid-term review of project performance that will take place in September 1997 (Supplemental letter No. 2) would also allow the government and the Bank to adjust the targets set under the Action Plan. The monitoring indicators would provide sufficient feedback on performance in a timely manner to effect needed mid-course corrections if that becomes necessary. Nonetheless, it must be recognized that the provision of water and sanitary sewerage for a city the size of BogotA is part of a political process that cannot be ignored by the institutions carrying out the task. The safeguards that are being implemented to help ensure that EAAB remains relatively free of day-to-day interference and that EAAB is able to maintain a level of integrity in its basic operations and commercial processes are the best insurance against risk of failure and a return to the institutional disorder that preceded the reform program now underway. The sensitivity analysis of the economic and financial analysis show, moreover, that the results of the analyses are robust. Finally, the phasing of the Bank's financing of the Santaf6 1 project (paragraph 13) provides a practical mechanism to monitor and limit the risk of non-compliance, particularly in regard to tariff restructuring, which is a key element in achieving both the institutional changes and overall sustainability of the project benefits and would need to take place in the first 18 months of project implementation. However, it needs to be bome in mind that any tariff restructuring would necessarily involve proportionately higher increases for the lower income consumers, whose water use is currently heavily subsidized. As a result, uncertainty exists in regard to the willingness of the poor to pay for these services, and, in turn, regarding the political will of the municipality to maintain an adequate collection efficiency. Recommendation 33. I am satisfied that the proposed loans would comply with the Articles of Agreement of the Bank and recommend that the Executive Directors approve them. James D. Wolfensohn President Attachments Washington, D.C. October 20, 1995 - 11 - Schedule A Colombia Santafé I Water Supply and Sewerage Rehabilitation Project Project Cost and Financing Plan Table 1 : Project Cost (in US$ million) . .. ....... .. .......:.*f .y FtujetÉ Ca~trzhts YHAÅSE 1 IE E1 OTA i. rÉuJØsir .,: .~ . .-j..4.. -+ . + .. .....+-. .. .. .......... H ......... ............. .... r. .t.. ..... r.g a t..l .a.l ø g n ..t ..... A. Vulnembility Component 20.3 30.5 50.9 5.9 89 14.8 263 39.4 65.7 60.0 B. Prnary Sewerage and Drainage 411 317 72.8 14 8 248 39.6 56.0 56.5 112.5 50.2 C. Primary \AtterDistribution 70 15 8 229 113 33 5 44.8 18.3 49.3 67.6 72.9 D. Expansion ofSecondary Networks 30.0 20.0 49.9 360 24.0 59.9 659 43.9 109.9 39.9 E RehabibtationofSecondaryNetworks 6.5 6.5 130 5.8 5.8 116 12.3 12.3 24.6 50.0 F. Institutional Strengthening 12.0 248 368 0.0 0.0 0.0 12.0 24.8 36.8 67.4 G.TechnicalAssistance 173 173 34.6 13.0 13.0 26.1 30.3 30.3 60.7 499 H.EnvironnentalImpact 3.1 4.7 7.9 0.0 00 0.0 3.1 4.7 7.9 59.5 BASECOST 137.4 1513 2887 86 9 110.0 196.9 224.3 2613 485.6 53.8 PhysicalContingences 13.7 15 1 28.9 8.7 110 19.7 22.4 26.1 48.6 53.7 Price Contingencies 45.6 112 56.8 42.2 17.9 60 1 87.8 29.1 116.9 24.9 TOTALPROJECTCOST 196.8 1776 374.4 1378 138.9 2766 334.5 316.5 6511 486 ImportfDutiesand VAT 39.8 00 39.8 27.1 0.0 27 1 66.9 0.0 66.9 0.0 TOTAL INVESTMENT COST 236.5 177.6 414.2 164.9 138.9 303.81 401.4 316.5 717.9 44.1 Table 2: Financing Plan (in US$ million) rkBak0.0 345.0 3450 0.0 345.0 38.0 35.2 TOTA L 196.8 177.6 374.4 39.8 414.2 100.0 100.0 - 12 - Schedule B Table 1 Colombia Santafé Water Supply and Sewerage Rehabilitation Project Project Benefits and Costs (in thousands of US$ of July 1993) ... OM . A.. N:t 1 FINAN (AL'AN E 86 Year I rncrea ncre nia Incrementa Inrementa Incremmata Incremnt .n. . C... t N.t .e.. :). B. ...s C.... t . t... 19940 3,684 (,8)04,145 (445 1995 1,750 33,883 (32,134) 1,750 38,111 (36,361) 1996 8,797 79,145 (70,347) 8,797 88,954 (80,156) 1997 25,698 106,858 (81,159) 25,698 119,957 (94,258) 1998 44,939 101,999 (57,060) 44939 114,260 (69,321) 1999 69,404 84,725 (15,321) 69,404 94,671 (25,267) 2000 79,387 106,045 (26,658) 79,387 118,627 (39,240) 2001 84,052 70,389 13,663 84,052 78,536 5,516 2002 88,564 13,414 75,150 88,564 14,414 74,151 2003 92,905 13,589 79,317 92,905 14,588 78,317 2004 97,059 13,347 83,712 97,059 14,347 82,712 2005 100,890 13,452 87,438 100,890 14,451 86,438 2006 104,717 13,933 90,784 104,717 14,933 89,784 2007 108,607 14,422 94,185 108,607 15,422 93,185 2008 112,561 14,920 97,641 112,561 15,919 96,641 2009 116,579 15,425 101,154 116,579 16,425 100,154 2010 120,663 15,939 104,724 120,663 16,939 103,724 2011 124,813 16,461 108,353 124,813 17,461 107,353 2012 129,032 16,992 112,040 129,032 17,991 111,041 2013 133,320 17,531 115,789 133,320 18,531 114,789 2014 134,595 17,691 116,904 134,595 18,691 115,904 2015 134,595 17,691 116,904 134,595 18,691 115,904 2016 134,595 17,691 116,904 134,595 18,691 115,904 2017 134,595 17,691 116,904 134,595 18,691 115,904 2018 134,595 17,691 116,904 134,595 18,691 115,904 2019 134,595 17,691 116,904 134,595 18,691 115,904 2020 134,595 17,691 116,904 134,595 18,691 115,904 2021 134,595 17,691 116,904 134,595 18,691 115,904 2022 134,595 17,691 116,904 134,595 18,691 115,904 2023 134,595 17,691 116,904 134,595 18,691 115,904 Net Present Value 2U9,U75 et Pre sent Value 161,271 Inte rnal Rate of Return 17.0% Inte rnal Rate of Return 14.9% - 13 - Schedule B Table 1 Colombia Santaff Water Supply and Sewerage Rehabilitation Project Assumptions Source of Difference Difference between economic and financial analysis is due to inclusion of taxes in the financial analysis. Main Assunptions Discount rate 10% Growth in water denand over project horizon 1.8% Growth in water produced over project horizon 12% Growth in water billed over project horizon 2.4% Improvement in collection efficiency from80% to 92% Decline in unaccounted-for water from40% to 24% Switching values Investnentcosts 54% Operation and inintenance costs 8% Collection efficiency 78% Unaccounted for water 41% Nature of benefits - an increase of available supply by 7.3 cubic meters per second; - a reduction of unaccounted-fbr water from almost 40% in 1994 to 24% in 2004; - improved institutional capacity of EAAB to plan and mnage its resources; - health benefits; - environmental benefits; - increased property values in flood prone areas Main beneficiaries I million people living in low-income neighborhoods - 14 - Schedule B Table 2 Colombia Santafi Water Supply and Sewerage Rehabilitation Project Financial Sununary (in millions of current CoIS) hiem ACTUAL PORECAST 1992 1983 1994 199S 1996 1"7 1998 9 2000 Au.erage Excnange ate CoiSlUSSI 680 81 i4 ase 1.,02 1,a'. .M2 1.31, .zso Income Statement Items Water Sold (Million m3) 328 338 340 357 365 372 377 394 414 Average Tarifflm3 incl. Bulk Sales) 268 320 416 499 597 700 B06 891 972 Revenue from Water Sales 87,431 108.113 141.800 170.134 217.956 260.077 304.166 351.402 403.199 Total Operating Revenues 89,510 113.221 152,280 188.662 230.199 274,071 319.880 368.733 421.121 Working Expenses (incl. Penions) 38,319 50.057 65,277 83,764 104,108 117,474 126.812 143.863 166.239 of which Personnel (Incl. Pensions) 25.677 24.211 27.180 37.808 52,598 60,340 64.009 75.006 88.073 Not Operating Income thef. interest charges) 14.412 17,683 M,001) (37,0951 (7.3901 (23,36) 36.500 58.256 77.997 Net Income 144,211 (109.993 125.720) (9,9931 27.535 12.001 93.580 109,434 130,433 Funds Statement Items Internal Sources (Nat Cash from Operations) 51,191 63.169 120,904 114.137 134.945 132.212 221,193 263.871 302.745 Equity/ContdbutionalTransfers 9,991 28.977 6.312 7.957 13-839 17,563 24,196 33590 40.513 Borrowings 42.188 40.027 39,818 79,599 77.883 114.936 114.673 130.486 140.904 of which Treasury Refinancing 263 340 426 50 808 712 820 905 988 Total Sources 106.199 136,940 178.070 203,079 229.395 2B.B154 364.445 431,902 490.165 Investments (Incl. Santafi 1) 46,026 29.593 65.693 100,122 142,222 170,818 163.421 215.508 288.192 Debt Service 37,584 55.737 57.710 59.163 83,470 72.720 94.388 120.209 123.075 Changes in Working Capital 21,589 16.056 6.421 29.816 28.450 578 1.821 (8.5291 (8.689, Total Applications 105.199 101,386 12824 198.339 252.059 264.427 278.255 352,658 4.34.911 Net inc.IDc.) In Surplus Cash 0 36,554 48.246 5.339 (22.665) 3,728 86.210 79.245 55.25 Cumulative Cash Surplus (01 35,554 83,799 89.138 66.474 70,202 156,412 235.658 290.910 Balance Sheer Items Revalued Net FIxed Assets in Use 1.0865.241 1,042.260 1,089,178 1.262.275 1.503.005 1.777.972 2.050,788 2Z370.378 .765.804 Current Assets 86.807 118.962 190,068 222.387 239.150 253.324 348.057 417.071 474.144 of which Quick Assets 28,060 68.278 122.041 137.576 124.020 133.172 220.48 297.282 352.407 Less: Current Liabilities ilncl. Current Portion of 78.394 74.829 101,142 98,359 113.247 138,842 181,885 158.388 184.042 LT Debti Total Assets 1.086,549 1.099,268 1,220.955 1.442.571 1,687,045 1.956,217 L293.459 2.698.108 3.129,601 Equity & Reserves 824.923 793.470 81.907 840.522 912.347 979.975 1.133.236 1,326.885 1.B5.212 Net Long Term Debt 155.230 181,352 201,572 280,299 359.114 41.563 546.554 615.397 757.597 Other Long Term Liabilities (Inci. Reserve for 85.395 124,445 203,476 321.752 419.581 510,67e 611.067 715.825 818.790 Pension Liabilities) Total Lhieias and Equity 1,065.54 1.099,267 1,220.955 1,44.589 1.687,043 1.956.216 2,293.458 2,691.107 3.129.600 RhancIal Ratios Working Ratio Warking Expenses/Operering 43 44 44 44 45 43 40 39 39 Revenues,1%) Labor Cost as % of Woring Epanses 67 48 41 45 51 51 so 52 53 Returm on Average Nat Fixed Asserts In lse 1.9 2.2 (0.21 (4.1) (0.71 11.81 2.4 3.3 3.7 (Nat Oper.lncone/Avy NFAH%J Debt Service Coverage Ratio (time:) 1.4 1.1 2.1 1.9 2.1 1.9 2.3 2.2 2.5 Sell Financing Ratio (Total Capital 30 2 96 55 52 38 88 66 82 Expenditures/Intemal SouscesH% OuIck Ratio 0.3 0.8 1 2 1.4 1.1 1.0 1.3 1.9 1.9 Note: totals ramy not add due to roeanding - 15 - Schedule B Table 2/ Annex 1 Colombia Santaf% I Water Supply And Sewerage Rehabilitation Project Main Assumptions in the Financial Analysis The financial analysis of EAAB performance over the next decade has been carried out on the assumption that the entire Santaf& I project will be financed in two phases, the first phase Bank loan for US$145 million as proposed, and the second phase loan for a proposed US$105 million, provided EAAB performance meets the performance targets shown in Schedule B, Tables 3 and 4 and the financial ratios stipulated in Schedule B, Table 2. The following are the key assumptions: Tariff Increase in Real Terms: Equivalent to 3% in 1996, and 2.5% each in 1997 and 1998. No real increases are assumed after that year. UFW Reduction: From 39.7% in 1994 to an estimated 29.5% by the year 2000. Bill Collection Efficiency: Improving from 80% in 1994 to 92% by 2000. Inflation Rates: For the foreign component of costs, rates used are consistent with the Bank guidelines on Expected Price Increases and Interest Rates dated October 1994; for domestic inflation, rates used are based on the agreed economic parameters between the Government of Colombia and the Bank, as shown below: 1993 1994 1995 1996 1997 1998 1999 2000/ 2002 2001 and on Local 21.00 22.16 18.00 16.00 14.00 12.00 10.00 9.00 8.00 Foreizn -2.30 3.00 1.50 1.80 2.60 2.50 2.50 2.50 2.40 Water Demand: Estimated to grow at a rate of 0.5m3/sec per year from the prevailing level of 17m3/sec. The projections also include EAAB's program of elimination of an estimated 200,000 illegal connections over a seven-year period. Operating Costs: Energy consumption is differentiated between the various water treatment plants to account for increased costs of operating the Tibito plant, which is expected to supply the bulk of the incremental water needs through the end of the century Chemical consumption is also similarly differentiated. Repairs and Maintenance expenditures are assumed to increase from 0.5% of total gross fixed assets in 1994 to 1% in 1998 for 80% of the fixed assets representing civil works and buildings, and from 1% of gross fixed assets in 1994 to 3% in 1998 for the remainder, representing electro-mechanical equipment. Personnel costs are expected to decline as staff is reduced from 2500 in 1994 to 2400 in 1996 and remain at that level thereafter. Fixed assets. The Santaf6 I investment program (Schedule A) was taken as the basis for the projections. In accordance with Colombian Accounting legislation, fixed assets are adjusted annually with regard to inflation. - 16 - Schedule B Table 3 Colombia Santafi Water Supply and Sewerage Rehabilitation Project Key Performance Indicators ..... ...C ~ * ~ R :e.::: ::::.::::: -..... A. Valnerblity Coatrol Rehab ofTibito teatment Plant Desgn Initiate Comphete construction conatructin byJuly96. byend1998 . Rehab. of2m die Ilbilo Pipeline Initiate Complete conatruction consetruction by July 1996 by Dec,1998 _ ___ Conatructzon ofUsaquen Backup tunnel Begin deejn Complete Initiate Complete by Dec.1996 des.gnby construct,on conatruct.on May 1998 by Jan.1999 by Dec.2000 B. Male Sewerage Network #ofkdietes of Pipes Inatalted 5 3 21.07 9.9 5.1 7.4 3.1 #ofkdlom eter. ofBogota River Interceptor 3.5 5.5 3.5 # ofkdlometers of Drainage Canal. Inatafled 1.1 6 7 8.7 0.3 6.2 6.0 C. Main Waler Dlatributmon Pipelinea # ofkilomieter ma.alled 36.8 18.5 13 17.5 . 35 D3. Secondary Netwarka 6 of9MterConnections 28,073 28,073 28.073 28,073 28,073 39,635 6 of5cw.rage Connectone 41,500 31,700 31,700 51,700 31,700 3L700 E. Rehabilitatie of Water and Sewerage # ofkilom,etera ofHkterRehabih,tated 45.0 45.0 45.0 45.0 45.0 75.0 6 ofkilometers ofSewerage Reabitated 8 5 7 2 7.2 7.2 7.2 9 5 F. Iastitutional Strengthenlag Contract out Domneatic M eters Supply. Inatallation end Mamntenance to Private Sector -Prepare Bidding Documenta By March 1996 -OpenBid May 1996 -Conceaion ContractAward October 1996 -InitateContractimplementin December1996 UFWReduction ActnBiiea -6 ofMeteraConnectedbyEiAAB 24,000 12,000 12,000 12,000 12,000 -6 ofMetera Connected by Subcontractora 126000 198,000 198,000 08,000 108,000 # ofCity SectorM UWStudies Initiated (com) 28 33 H. Eanroameatal Campaaonet Familes Resettled Under Part H2 ofProject 35 30 - 17 - Schedule B Table 4 Colombia Santafé Water Supply and Sewerage Rehabilitation Project Covenanted Financial and Operational Targets .. .. . .. ... . ....... .... ... ........ ..widr:.I .::.::.... .:... ............ ... . ... .... ... .y% 4~: ..$: X$ ~ ::$ < $~ .~ St#f. . :1 Ø 1 UFWIndex 40.0% 390% 37.0% 36.0% 340% 32.0% 3t0% 29.0% .orki.g Ratio 44.0% 45.0% 45.0% 450% 45.0% 450% 400% 400% Quick Ratio 119.0% 143 0% 100.0% 100.0% 110.0% 110.0% 1100% 110 0% Collection/BIlng Ratio 80.0% 80.0% 82.0% 85.0% 870% 900% 92.0% 920% Note; Woking Ratio defned a. the ratio ofwrking expenses, pnorto de preciation and intere.t chargei,and including annualpayments to exietng pen.ioners, payments into the EAAB pension fund, and annua transferm to externalpension fund. under Law 100 to opemtmg revenue. porto subeidy tran.fer. andextra-ordinary income (incidmg mcome from exceseiquidLty balance.) Quick Ratio defmned an the ratio ofiquid ansett (cash and bank baances and short-term mve.tmenti readily convertible to cash in three m onths) and 30%of accounts receivable to current kiabiten due and payable within one year, including han am ortzatwnw due and payable Colhectionbilmg ratio n the ratio of amounts coleted i the current year to the amount oflbffing. effected durmg the year, and excludmg collectionr ofpriorrecivables - 18- Schedule B Table 5 Colombia Santaf% Water Supply and Sewerage Rehabilitation Project Impact Indicators (11_A 4t4__eryAl t 4 o i ffa Descnption No. ofnewconnections Newneghborhoods Wetlandprotection Vulnerable components Production Biling cost in low-income areas drained a target areas rehabilitated or cost strata 1-3 constructed Units # ofhousehokls # ofhectares and # of additional USS/m3 USS/m3 connected population benefited hectares protected produced billed Baseline 1993 Connections in low- Totalpopulation None protected Not applicable 036 0.27 income areas: 555,589 coverage: n.a. (on Dec. 31) (onDec 31) Statisticalparameten Year Vter Sewerage Year Ha. Population 1990 31,883 na. notapplicable notapplicable 1991 27,092 n.A. 1992 8,973 n.a. 1993 n.a na. 1993 n.a n.a. Comparative data 1994 1994 1994 Availability of following project 1995 1995 1995 implementation 1996 1996 1996 Civilworks Date 1997 1997 1997 2m Tibito pipeline 1998 1998 1998 Tibito plant rehab. 1999 1999 1999 BackupUsaquen tunnel constructed 2000 2000 2000 Responsible depart- Commercal Planning Planning GeneralManager Advisor Financial Financial ment inEAAB - 19- Schedule C Colombia Santaf* Water Supply and Sewerage Rehabilitation Project Procurement and Disbursement Table 1: Procurement Method (Bank Financing shown for Phase I only, in US$ million) CivilWorks 1923 90.2 282.5 (37 4 (22.3 (59.T Equipment 109.1 107 1 180 48.0 282.2 (315, (22.3, (4.3, (00) (58.1 Consuling Serv ic es A nd Tmaining 119 8 119.8 (27.2, (27.2 Land Acquisition 33.4 33.4 (00 (0.0 TOTAL 3014 1973 137.81 814 717.9 (68 9J (44.6 (315, (0.0J (145.0 Note: Fiures inbrackets are amounts tobe financed by the Bank. Table 2: Disbursement Arrangements ategry . - Amind of lans allecatid fUSS nI) SzpJ'RaRz-J& CvilvW%rks 447 40.0% Goods 528 400% Consuling Services 2L7 520% Training 0.8 52.0% Unalicated 25.0. TOTAL 15.0 Table 3: Estimated Bank Disbursement Annual 19.8 29.9 44.4 34.9 13.6 L7 0.7 Cumulative 19.8 497 94 1 129.0 142.6 144.3 45.0 %cumulative 137% 34.3% 64.9% 89.0% 98.4% 99.5% 100.0% Note: Totah may not add due to roundmg - 20 - Schedule D Colombia SantafR I Water Supply And Sewerage Rehabilitation Project Timetable of Key Project Processing Events Time taken to prepare: 30 months Prepared by: EAAB with Bank assistance First Bank mission: March 1993 Appraisal Missions: November/December 1993 and May/June 1994 Negotiations: May/June 1995 Expected Date of Loan Effectiveness: December 1995 List of Relevant PCR's and PPAR's: PCR No.4589, June 1983, (Loan 738-CO), Palmira Water Supply Project: PCR No. 5389, December 1984, (Loan 1523-CO), Second Cali Water Supply and Sewerage Project; PCR No. 2003, March 1978, (Loan 536-CO), Bogota Water Supply Project; PCR No. 2638, August 1979, (Loan PU-30-CO), Cali Water Supply Project; PCR No. 6594, January 1987, (Loans 860-CO and 1072-CO), Medium-size Cities and Second Multi-City Water Supply and Sewerage Projects; PCR No. 7231, May 1988, (Loans 741-Co and 1697-CO), Second Bogota Water Supply and Third Bogota Water Supply, Sewerage and Drainage project; PCR No. 12326, September 1993, (Loan 2637- CO), Baranquilla Water Supply and Sewerage Project; PCR No. June 1994, (Loan 2512-CO), BogotA IV Water Supply Project. - 21 - Schedule E A. STATEMENT OFBANK LQANtS& DACEITS IN4 COOBA(sof June 30, 1995). Amount in US$ Million Ln/Cr Fiscal (less cancellations) Undis- Number Year Borrower Purpose Bank IDA bursed 124 Loans Closed 5,860.61 23.48 0.69 2667 1986 HIMAT Irrigation II 114.00 38.76 2961 1988 Caja WS & Waste Sector 150.00 26.55 3010 1988 BCH Ed Sector 100.00 40.71 3113 1990 Bco.Rep. Sm-Scale Irrig 50.00 30.22 3157 1990 Colombia Rural Rds Sector II 55.00 4.42 3201 1990 Fdo.Vial Comm Child Care & Nu 24.00 5.97 3250 1991 Colombia Rural Dev Invest 75.00 24.12 3321 1991 Colombia Indust Restruct 200.00 85.80 3336 1991 Colombia Munic Devt 60.00 9.47 3449 1992 Colombia IFI-Restrc.&Divst. 100.00 55.68 3453 1992 Colombia Third National Roads 266.00 111.98 3615 1993 Colombia Municipal Health Serv. 50.00 47.55 3669 1994 Colombia Public Fin. Mgmt. 30.00 28.50 3683 1994 Colombia Secondary Educ. 90.00 90.00 3692 1994 Colombia Natural Resource Mgmt. 39.00 37.89 3827 1995 Colombia Energy TA 11.00 11.00 3871 1995 Colombia Agriculture Technol 51.00 51.00 Subtotal 1,465.00 699.62 TOTAL 7,325.60 23.48 Of which repaid 4,530.31 12.18 Total held by Bank & IDA 2,795.30 11.30 Amount sold 50.99 Of which repaid 50.99 Total undisbursed 700.31 Loan Equity Total (in Millions of US$) Total Gross Commitments 553.43 62.33 615.76 Less cancellations, terminations, exchange adjustments, repayments, writeoffs, and sales 402.26 40.07 442.33 Total Commitments now held by IFC 151.17 22.25 173.42 Total Undisbursed IFC 20.77 0.00 20.77  IBRD 26608 UAIVTAv nCOLOMBIA O A cr,sozc CITY OF SANTAFE DE BOGOTA -SANTAFE WATER SUPPLY AND SEWERAGE REHABIUITATION PROJECT s a - - e-GENERAL LAYOUT AND u noeVULNERABILITY CONTROL COMPONENT WORKS Jo a O New B., -up ý U>qe un S-n D%eoVrem Sonto An- Tan Tr.ren PMnM Uwoq-e Pump.ng Stoflon kdW .erf o , TOCANCIPA Porqe N on C- -S E OGO A P-pm n-d 6JI,0i T. ~ TA L.ARE. 0O21PAOURkA Bopoto Rverr COTA BOS 80 75 70 -S5ACHA 54R".A N sLRE . -TSbr 24'1 ANDSMlRG \ T.5ý PANAMA VENEZUELA C STORA E TANKS - M WATER TRE ATUENT PLAT5 Toho~ g. WATER ITAKES P8IUMNG STATIONS iLOO PRONE AREA BCUAOR 00A3 / A~RBATN DEVELORA'~R 2C:N- ECUADR- ROADSOUTSIDE BULT UAREAS PERU -- osRes 0 2 3 4 SR.es E5 r75T 7o c, I r roSor. JAM.lARY 1995