Document of The World Bank Report No. 15867-KZ STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT November 26, 1996 Infrastructure, Energy and Environment Division Country Department III Europe and Central Asia Region CURRENCY EQUIVALENTS 66 Tenge = US$I (April 1996) Borrower's Fiscal Year January 1 - December I OFFICIAL EXCHANGE RATES Period Average End of Period (Tenge per US$1) 1993 November 4.69 4.70 December 5.82 6.31 1994 Quarter 1 12.73 19.94 Quarter ll 35.60 43.29 Quarter III 45.94 48.00 Quarter IV 51.12 54.36 1995 Quarter 1 58.20 61.20 Quarter 11 62.65 63.35 Quarter 111 59.74 59.90 Quarter IV 62.93 63.35 1996 Quarter I 65.90 65.10 Quarter 11 67.0 67.2 WEIGITS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS CES - Country Environmental Study NGO - Non-Governmental Organization CPPI - Center for Project Preparation and O&M - Operation and Maintenance Implementation PVC - Polyvinyl Chloride EMP - Environmental Management PHRD - Policy and Human Resource Development Project PICG - Project Implementation Consulting Group GOK - Government of Kazakstan PIU - Project Implementation Unit GOSTs - Russian Standards RMO - Repair Maintenance Organization IBRD - International Bank for SA - Special Account Reconstruction and Development SAR - Staff Appraisal Report ICB - International Competitive Bidding SES - Sanitary Epidemiological Stations IDA - International Development SOE - Statement of Expense Association TOR - Terms of Reference MCM - Thousand Cubic Meters USAID - United States Agency for International Development MH - Ministry of Health MCH - Ministry of Housing and Communal Services NCB - National Competitive Bidding STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT CONTENTS LOAN AND PROJECT SUMMARY .........................i PART I. INTRODUCTION . PART II. ARAL SEA COMMUNITY REHABILITATION PROJECT .7 PART III. THE PROJECT .9 PART IV. PROJECT IMPLEMENTATION .14 PART V. INSTITUTIONAL AND FINANCIAL ASPECTS .20 PART VI. BENEFITS AND RISKS .24 PART VII. AGREEMENTS AND RECOMMENDATIONS .26 ANNEXES A. Detailed Project Cost Estimates B. Project Implementation Schedule and Procurement Plan C. Estimated Disbursement Schedule D. Selected Documents Available in the Project File E. Terms of Reference for the Project Implementation Consultant Group F. Part A: Terms of Reference for the Pilot Project Management Consultant Part B: Terms of Reference for the Detailed Engineering Design Consultant G. Supervision Plan H. Social Assessment Executive Summary I. Economic Analysis and Project Justification MAP IBRD No. 28154 Vice President: Johannes Linn, ECAVP Director: Yukon Huang, EC3DR Division Chief: Jonathan C. Brown, EC31V Staff: Piotr Krzyzanowski, EMTEN I STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT LOAN AND PROJECT SUMMARY Borrower: Republic of Kazakstan. Implementing Agency: State Committee for Water Resources Beneficiary: The Aralsk and Kazalinsk Vodokanals Poverty: Program of Targeted Interventions. Amount: US$7.0 million. Terms: 20 years, including 5 years of grace at the Bank's standard variable interest rate Commitment Fee: 0.75 % of undisbursed loan balances, beginning 60 days after signing, less any waiver. Onlending Terms: Not applicable. Financing Plan: See para. #39 and Table 3.2 Net Present Value: Not applicable Staff Appraisal Report: 15867-KZ Map: IBRD 281 54 Project ID Number: KZ-PA-45303 I STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT I. INTRODUCTION A. Background: General 1. At the meeting of the Heads of Governments of the five Aral Sea states, which met in January 1994, it was decided to include the Kazakstan Water Supply, Sanitation, and Health Project in the Aral Sea Program. It also was decided that this project should be primarily aimed at providing short-term solutions to the water, sanitation, and health conditions in the project area. The Project has since been renamed the Kazakstan Aral Sea Community Rehabilitation Project 2 2. With a total population of just over 17 million and a land area of 2,717,000 km , the Republic of Kazakstan is the largest and richest of the Central Asian Republics. It extends across all of northern Central Asia, from the Caspian Sea to the Chinese border. Kazakstan has made steady progress in its transition to a market economy over the past three and a half years. In this process it is building on its inherited strengths, which include rich endowments of natural resources, a highly educated work force, and a sizable infrastructure base. 3. Kazakstan faces some of the most daunting environmental problems in the world. The air, water and soil pollution from industrial, urban and agricultural sources have had an adverse effect on the environment in Kazakstan. Of particular significance for the country is the pollution of the northern portion of the Aral Sea Basin, which lies in Kazakstan. 4. At one time the world's fourth largest lake, the Aral Sea has for many years been drying up. Much of the water from its two major feeder rivers, the Amu Darya and the Syr Darya, has been diverted for upstream agricultural use. The northern half of the Aral Sea, including the lower portion of the Syr Darya, lies within Kazakstan's Kzyl-Orda Oblast. Extensive irrigation works, mainly for cotton growth in Uzbekistan and Turkmenistan, and intensive agriculture over the past 30 years, with excessive use of fertilizers and pesticides, have caused the pollution of groundwater, a reduction in agricultural yield, and extensive salinization. Previously important local food crops (such as rice) can no longer be grown effectively, which has resulted in a dramatic decline in economic activity. The most adversely affected regions in Kazakstan are the Aralsk and Kazalinsk Rayons in the Kzyl-Orda Oblast. B. Background: Aral Sea Disaster Region 5. Population. The Kzyl-Orda Oblast (provincial capital Kzyl-Orda) covers 228,000 km2 and has a population of 598,000. It occupies the Syr Darya delta and the lower and middle parts of the Syr Darya valley, and the northern and eastern shores of the Aral Sea lie within this province. Within the Oblast, two Rayons, Aralsk and Kazalinsk, are immediately adjacent to the Aral Sea and are the most adversely affected areas by the crisis. Between 1979 and 1989, the total population of the Aral Sea region grew considerably. Kzyl-Orda's population increased by 15%, 2% more than the national average of 13%. In 1989, the population of Aralsk and Kazalinsk Rayons were 70,804 and 71,651, respectively. Recent demographic studies suggest, however, that the province's population increase has actually decreased since 1989, due to out-migration: in 1993, the Oblast had a negative migration balance of 7,100. Table 1.1 Population of the Project Area (January 1995) Rayon or Settlement Population Number of Families Aralsk RavQon City of Aralsk 35,510 6,330 Aralsulfat 4,300 840 Saksaul 9,100 1,350 Rural Settlements 29.540 5Q160 Rayon Total 78,450 13,680 Kazalinsk Rav City of Kazalinsk 7,915 1,580 Novokazalinsk 35,045 7,000 Rural Settlements 31160 622Q Rayon Total 74,120 14,800 6. By January 1995, the Aralsk Rayon had a total population of 78,450, of whom about 40% lived in the capital of Aralsk, and 60% in rural areas (38% in small rural settlements). The average family size in Aralsk Rayon is 5.7 people. Kazalinsk Rayon had a total population of 74,120, of whom 42% live in rural settlements. The average family size in Kazalinsk Rayon is 5.0 people. Overall, the dominant size of rural settlements in Kzyl-Orda Oblast is 11-25 persons (22% of population, living mainly in small family communities), and 500-2,000 persons (19% of population, living mainly on collective farms). The average rural family in Kzyl-Orda Oblast has 6.3 members. 7. Kzyl-Orda Oblast is not as ethnically diverse as Karakalpakstan, its southern neighbor in Uzbekistan. Kazaks (79.4%) are clearly the most numerous ethnic group. Within the Oblast, Kazaks inhabit the northern shores of the Aral Sea, as well as the Syr Darya delta and valley, accounting for 98% of the population of the Rayons of Kazalinsk and Aralsk. They also constitute the sparse nomadic population of the Asteroid and Kzylkum Deserts (in Kzyl-Orda and Karakalpakstan). The most numerically important minorities are Russians (13.3%), Koreans (2%), and Ukrainians (2%). They mainly live in the central and southern parts of the province, and around the city of Kzyl-Orda. However, many Russians and Ukrainians have left the area since 1989, though no reliable data are available on their numbers. It is also unclear to what extent these migration movements were motivated by the break- up of the Soviet Union, as opposed to the deterioration of living conditions in the Aral Sea region. 8. Socio-Economic Conditions. The Aral Sea crisis has resulted in very serious economic problems in the area. The Aral Sea region includes some of the poorest Oblasts and Rayons of the Central Asian countries, with per capita income in the early 1990s at 2-3 times below the average poverty level for Central Asia. Economic losses in Kzyl-Orda Oblast in the past 30 years are estimated at US$3 billion, mainly as a result of the decline in natural resources and subsequent loss of employment. Commercial fishing and shipping in the Aral Sea was abandoned in the mid-1980s, while the Oblast's two major factories (fish-processing, and pulp and paper) had to switch to more expensive, imported raw materials for inputs, after the disappearance of local resources. Agricultural output in the Syr Darya delta and valley declined by 20-30%, a direct result of soil salinization (saline soils, saline irrigation waters, groundwater contamination, wind), climate changes, and reduced labor efficiency due to health - 3 - problems. More and more chemicals were needed to maintain a certain output level, leading to economic inefficiencies and a further ecological deterioration of arable land. 9. Water Supply System. The water supply in Kazalinsk Rayon and parts of Aralsk Rayon depends on the Syr Darya River and its system of irrigation canals, artesian groundwater, highly saline shallow groundwater wells, and springs. Surface water from the Syr Darya River is partially treated in the Kazalinsk Water Treatment Plant, designed for a capacity of 20,000 m3/day. Treatment consists of filtration and chlorination. After treatment water is pumped into the distribution network of the cities of Kazalinsk and Novokazalinsk. 10. Artesian groundwater is extracted from two groups of wells, one group of 30 wells in the Kosaman field, and another of 30 wells in the Berdykol field. These fields are located 110 km northwest from the city of Aralsk. The total potential yield of both groups is 756 liters/second, but due to the large number of non-operational wells (47% in Berdykol and 38% in Kosaman), the current discharge rate is only 320 liters/second. A USAID-funded project, currently underway, aims to rehabilitate these wells and bring their production capacity to 620 liters/second (53,568 m3/day). 11. After chlorination, groundwater is pumped into reservoirs, from where it is repumped again into the Aralsk-Sarbulak transmission pipeline, via 6 booster pump stations to the next downstream reservoir. The total length of the pipeline is about 240 km, extending up to the city of Novokazalinsk. It delivers water to the cities of Aralsk (with a total reservoir capacity of 32,000 m 3) and Kazalinsk, as well as several rural settlements along the pipeline. Novokazalinsk is nominally connected to the pipeline, but it does not benefit from it due to a lack of storage and pumping capacity. 12. Theoretically, 73% of the population of Aralsk Rayon have access to water from the Aralsk- Sarbulak pipeline, 13% depend on untreated water from the Syr Darya River, and 15% rely on saline shallow groundwater, springs or irrigation canals. In reality, a much smaller percentage of the population receives water from the pipeline, due to its poor construction and associated problems. In Kazalinsk Rayon, only the city of Kazalinsk and four rural settlements (Kumzhiek, Basikara, Muratbayev, and Zhalantos Batyr) are connected to the Aralsk-Sarbulak pipeline. Most of the population (80-85%) have to rely on the Syr Darya River, irrigation canals, shallow groundwater, and springs. 13. In the city of Aralsk, the water distribution system consists of 70 km of pipelines, 3,000 house connections, and 54 public standpipes, of which only 21 are in working condition. The distribution systems of the cities of Kazalinsk and Novokazalinsk consist of 15 km and 60 km of pipes, 70 and 2,030 house connections, and 70 and 30 public standpipes, respectively. 14. Historically, the water supply and sanitation situation of the project area can be summarized into three main phases: (a) prior to 1960, the semi-nomadic populations of the Kzyl-Orda Oblast enjoyed access to safe drinking water, while the towns were able to use nearby springs and wells for their needs. (b) Beginning of Aral Sea Disaster (1960 -1970). With the introduction of extensive large- scale agricultural development, environmental degradation began to show associated symptoms of desertification, such as salinization of the groundwater, the loss of the pasture lands, forests, and sources of spring water. In the 1960s, while the Syr Darya's water - 4 - quality was still good, water was taken from the river at a point close to the community. The rapid deterioration in the river's water quality has forced the construction of a major regional water supply scheme. However, the new scheme does not extend to all communities. Those uncovered and those provided with an extremely unreliable system still rely on the old, often unsafe, supply arrangements. (c) The Period of Special Attention by USSR (1980-1990). By the 1980s, the central Soviet authorities and respective national Supreme Soviets passed various resolutions to give priority to meeting the needs of the populations in the disaster area. The usual budget allocations for Kzyl-Orda Oblast were trebled in the late 1980s in order to ameliorate with substantial financial resources some of the area's short-term needs. By 1988, special coefficients for salaries were introduced in order to raise incomes. During the same period, the water supply was reconstructed or newly constructed for the city of Kzyl-Orda, five Rayon centers, and 80 collective and state farms. These new or renovated systems relied on groundwater, with some 260 new artesian wells installed and 365 km of water pipes constructed for this purpose. 15. Inadequate maintenance of the system, high levels of leakage, the rapid deterioration of water quality from existing wells, and harsh climatic conditions have all contributed to the severe deterioration of the existing piped water supply system. At the same time, many communities are still unserved, except for the occasional delivery of water by truck. Treatment facilities are largely lacking, and the pumping stations are either severely damaged or not functioning due to a shortage of spare parts. The situation deteriorates even further in the winter months, when the water pipes freeze and the shortage of gasoline, coupled with a lack of cash in the hands of the state farms and affected families, impede the distribution of drinking water by truck and tractor. 16. The productivity of operating agencies' labor appears to be very low. Productivity indices are as follows: In Aralsk, 160 people served, 20 house connections, and 6,100m3 of water sold annually per staff member; in Kazalinsk, 260 people served, 21 house connections, and 5,400m3 of water sold annually per staff member. 17. Operational efficiency is also low. The levels of water losses in the Aralsk-Sarbulak system are reported to range from 45 to 70% of total production. The lack of meters at both production and intake points hampers a full assessment of losses. Losses in the distribution network are reported to range from 40 to 50%. 18. The existing water supply system, especially in rural areas and on state farms, is limited to standpipes. People must queue in the streets, at taps placed about every 150m, in order to fill their buckets. Because the supply is limited to about an hour a day (in accordance with Kazakstan's current energy-saving policy), the amount of water each family can fetch is limited to a total of 100 liters, or 15 liters per person/day for drinking and cooking purposes only. This may be supplemented by well or river water for bathing, cleaning, and laundry. The high salinity of groundwater (2-5 g/liter) precludes the growing of vegetables and livestock breeding for domestic consumption. 19. Water Quality. Water quality is universally poor in the disaster region and throughout Kzyl- Orda Oblast in general. Consequently, several coping mechanisms are used to deal with inadequate and poor-quality water. They consist of boiling water and drinking it as tea, rather than as plain water; severely reducing the already low level of water consumption, and making further sacrifices in -5 - cleanliness and sanitation; using the highly-polluted hand-dug wells in home gardens; using rivers and other open sources of water, despite knowing that they are polluted; paying exorbitant prices to vendors; or walking long distances in search of alternative sources of water. The monetary, labor, and health costs of this situation are extremely high. 20. Water quality laboratories are being equipped with modern equipment provided by donors. Due to the limited supply of chemical reagents and spare parts, however, there is a high risk that they will soon be non-operational. 21. Although, several local entities are responsible for sampling and analysis of water quality, the information collected is not used for day-to day monitoring. Instead, information is used for statistical purposes at the Oblast level. In the event of a severe contamination of a groundwater well, for example, the population directly affected is not advised immediately. Instead, the responsible agency would have to wait for an order from its line authority at the Oblast Level to respond to the emergency. C. The Government's Objectives and Strategy 22. In the late 1980s, in response to the Aral Sea environmental disaster, the Government developed a long-term strategy and plan to improve the water supply in the Rayons of Aralsk and Kazalinsk. The State Hydrological Design Institute (Kazgyprovodhoz) prepared a plan called the Aral-Sarbulak Water Supply System, which was to be constructed in five phases. The plan was based on the development of a new well field Northwest of the city of Aralsk, a primary distribution pipeline and pumping stations connecting the well field to the cities of Aralsk and Novokazalinsk, and several sub-networks of secondary pipelines and pumping stations to serve the large number of settlements throughout the region from the main pipeline. The first Phase of this plan was constructed, but construction work on the second phase (initiated in 1993) has been halted due to a lack of funds. 23. At the instigation of the Kazak Government, the Kazakstan Aral Sea Community Rehabilitation Project was included as a part of Program 5 of the "Action Plan for the Improvement of the Ecology of the Aral Sea", which was adopted by the conference of Central Asian heads of state on January 11, 1994. Project 5.3 of that Action Plan focuses on near-term improvements in the supply of clean water, and improved sanitation and health for the people in the affected areas of Kazakstan. The Action Plan was presented by The World Bank to the donor community in June 1994. D. The Bank's Role and Strategy 24. The project is fully consistent with the World Bank's country assistance strategy which is designed to: (i) support macroeconomic stabilization and structural and sector reforms; (ii) strengthen market incentives, particularly in agriculture and energy; and (iii) protect vulnerable groups through the establishment of an effective safety net and more efficient service delivery. In addition, the Bank's strategy is to provide support to ensure or expand access to basic social services which are largely poverty-focused. Bank support would also be directed at strengthening the Government's institutional capacity and acting as a catalyst for aid mobilization. 25. The Bank's role in the social infrastructure sector is to support Government efforts to improve the health status of rural populations in the southern regions of the country, which are most severely affected by the consequences of the Aral Sea disaster, and which are the most poorly served with regard to water supply, sanitation, and health. In this first operation in the sector, it is not proposed to address -6 - sector-wide policies and issues at the national level, but to: (i) improve the cost effectiveness of investments through project design; (ii) involve the participation of local stakeholders in selecting the most efficient delivery mechanisms and in assessing their willingness and ability to pay for improved social infrastructure; and (iii) improve the management and operation and financial viability of the regional enterprises responsible for delivering these services. E. Lessons from Past Bank Projects 26. Lessons highlighted by the Department's FY94 Annual Report on Portfolio Performance in Russia and Central Asia focus on: (i) the challenge of identifying a consistent counterpart team with sufficient authority to move the project forward; (ii) the difficulty of coordinating among key government agencies on critical issues; (iii) the importance of setting up PIUs early in the project cycle, and the training of their staff in Bank procurement and disbursement procedures and requirements; and (iv) the importance of involving local institutes in project design and preparation. The review of lessons learned from water supply and sanitation projects worldwide shows that, despite efforts at capacity building for the public institutions concerned, few countries achieved acceptable levels of performance for their public water and sewerage utilities, and that the financial performance of these utilities was equally poor. Some of the reasons for these deficiencies include: (i) lack of clear sector policies; (ii) lack of management and financial autonomy; (iii) inexperience in project implementation; and (iv) lack of participation of users and other stakeholders in the decision-making process. 27. To the extent possible, these lessons are being incorporated into the preparation and design of the full-scale project through: (i) an extensive social needs assessment survey, which has already been completed; (ii) implementation of community-based pilot projects for water supply and distribution and for health, hygiene and sanitation, which will be carried out during project preparation; (iii) a PIU is being established immediately to supervise all project preparation and implementation activities; (iv) through the PIU, the Government will execute the Kuwait Fund financed project preparation feasibility study and PHRD funded pilot demonstration activity; and (v) local institutes and NGOs will be contracted to assist in all these project preparation and design activities. 28. The proposed community-based water supply and distribution pilot project to be financed under this engineering loan will provide the Government and the Bank with early hands-on experience in dealing with project design, management, and implementation issues and involvement of local communities under the same conditions as that of the full-scale project. The lessons gained for this experience will facilitate the implementation of the full-scale project and will likely result in improved and streamlined implementation arrangements and a more clearly defined role of the communities in process, allowing them to achieve the greatest possible benefits from the project. - 7 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT II. ARAL SEA COMMUNITY REHABILITATION PROJECT A. Full-Scale Project Objectives 29. The objectives of the full-scale Aral Sea Community Rehabilitation Project, of which the proposed Pilot Water Supply Project represents an initial learning phase, are to: (i) improve the health of the urban and rural populations of the Kzyl-Orda Oblast through the provision of safe drinking water and improved hygiene education and sanitation facilities; and (ii) to strengthen institutional capacity for the management, operation and financial performance of the regional water supply and sanitation utilities. B. Full-Scale Project Description 30. Possible]/ components to be funded under the full-scale project include: (i) Safe Water Supply. Aimed at providing better water supply facilities to about 150,000 people living in the project area, this component would consist of two major subcomponents: (a) Urban water supply. Under this subcomponent, activities such as leak detection and control programs in thic two major cities of the project area, repair of main pipelines of the Aralsk-Sawbulak system and rehabilitation of water supply network will be implemented. (b) Rural water supply. This subcomponent would include design and construction of rural water supply schemes, with the objective of providing basic water supply and sanitation facilities owned and managed by the communities for presently unserviced or underserviced rural settlements, by adopting a community-based approach. It would also support activities for community mobilisation and organizational development, including a package of activities for capacity building and mobilizing organizations, as well as forming community-based organizations to plan, implement and manage their own water supply. (ii) Environmental Sanitation. This component includes providing assistance to urban settlers to build community sanitation facilities, as well as assisting rural communities to construct improved household toilets; 1/ The final scope of the full-scale Aral Sea Community Rehabilitation Project will be agreed on based on detailed recommendations developed by the feasibility study consultants, Sir Alexander Gibb & Partners. (iii) Hygiene Education and Public Awareness. Realization of expected health benefits from the project will largely depend on a successful hygiene education and public awareness program. This component thus aims to enhance public participation and awareness in managing water and sanitation services; and to educate the population about the significance of effective hygiene practices for improving their health conditions; and (iv) Capacity Building. This component would assist the agencies responsible for water supply at Oblast, city, and settlement levels. Technical assistance and training would be provided for these agencies to enhance their efficiency, cost effectiveness, financial viability, and also to make them managerially and financially self-sufficient. 31. The preparation of this project included a major Social Assessment that involved extensive stakeholder consultation, household surveys, and community focus group meetings to identify stakeholder needs, priorities, and constraints, which will be used to enhance project design and implementation arrangements. The feasibility study for the full-scale project is currently under preparation and is expected to be completed by May 1997. On this basis, it is proposed to appraise this project in June 1997, and to present the project to the Bank's Board in September 1997. Several donors, including the Kuwait Fund and KfW, have expressed their interest in possibly co-financing this project. - 9 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT HI. THE PROJECT A. Background of the Proposed Pilot Water Supply Project 32. A USAID funded project executed by the CH2M Hill currently underway, aims to rehabilitate two groups of wells in the Kosaman, and the Berdykol fields located 110km northwest from the city of Aralsk, and the six pumping stations (including chlorination equipment) along the Aralsk-Sarbulak transmission pipeline. The activities also include water quality monitoring improvements (provision of laboratory equipment), water quality improvements (provision of chlorination equipment), and health education (public health training). Because of unexpected high costs of these activities, the last pumping station No. 7a in Novokazalinsk cannot be covered by this USAID funded project. The timely completion of the USAID project has important implications for the proposed Pilot Water Supply Project, and vice-versa. The full benefits of the USAID project will depend on the rehabilitation of the Aralsk-Sarbulak pipeline, while water supply to the new pumping station No. 7a will depend on the rehabilitation of the six pumping stations as proposed by USAID. B. Project Objectives 33. The main objectives of this project are to: (i) gain experience in developing operational methodologies and capabilities in all aspects of project processing, cost recovery aspects, international procurement and contracting and in project management and implementation under the same conditions as the full scale project through certain small scale investments, which need urgent attention and; (ii) speed up implementation of the full-scale project through early completion of detailed engineering design and preparation of bidding documents. C. Project Description 34. The project consists of two components: (i) a small scale investment component to finance a water supply and distribution pilot project in the Aralsk and Kazalinsk Rayons of Kzyl-Orda Oblast, as well as implementation on a pilot basis of elements of the institutional reform action plan being prepared under the full scale project feasibility study; and (ii) a technical assistance component for the review of engineering designs, preparation of bid packages, and for the supervision of pilot project. - 10 - (i) Small-Scale Pilot Water Supply Component 35. This component will finance the following pilot projects: (a) Rehabilitation of the Aralsk-Sarbulak Pipeline. The reinforced concrete transmission pipeline that delivers water from the Kosaman and Berdykol well fields to Aralsk and Kazalinsk Rayons suffers from poor initial construction practices, especially the method of laying and covering pipes, which has resulted in a large number of leaks, with the largest number occurring between booster pumping stations No. 2 and No. 3. Some repair work has already been undertaken by local authorities, using steel and PVC pipes of smaller diameters than the concrete pipe. This rehabilitation program will include the replacement and rehabilitation of damaged concrete pressure pipes of approximately 1 Okm in length and 800-1000 mm in diameter, at locations selected after the diagnostic study of the pipeline to be carried out by the feasibility consultants Gibbs/CES. (b) Completion of the construction of the Pumping Station No. 7a in Novokazalinsk. Construction of the pumping station in Novokazalinsk started several years ago, but has not been completed because of a lack of financing. Questions have been raised as to the suitability of the pumping station location, because of seepage from the nearby irrigation canal and the frequent overtopping of the canal. It would, therefore, be necessary to line the canal over a section of some 500m along its boundary with the pumping station and to increase the wall height over this section to prevent overtopping. In addition, it would be necessary to purchase equipment and carry out works to complete the installation including: finishing construction of the two storage reservoirs; and completion of construction and installation of equipment in the main pumping station, chlorination facility, warehouse/garage, power substation, and water control laboratory. (c) Rehabilitation of the most corroded sections of distribution networks in the cities of Novokazalinsk and Aralsk. Due to a lack of finance since the early 1990s, there has been limited work on replacement of corroded and badly leaking sections of the existing piped water distribution networks in the two cities. Under this component, the most deteriorated sections of the 60km and 70km networks in the cities of Novokazalinsk and Aralsk, respectively (about 6km in each city), will be replaced with new PVC piping ranging in diameter from 200 to 300mm. In addition, to allow more effective functioning of the Vodokanals', it is proposed to provide emergency assistance to upgrade their maintenance equipment, which is in a bad state of disrepair, and to test on a pilot basis elements of the institutional reform action plan. (ii) Technical Assistance Component 36. The technical assistance component will finance the following sub-components: (a) Pilot Project Design and Supervision. This sub-component will: (i) review, revise and improve as needed, and approve detailed engineering design for the -11 - pilot water supply project; (ii) prepare tender documents for the procurement of goods and works; (iii) arrange international tenders for the procurement of goods and works according to World Bank and GOK requirements, and assist in the selection of successful bidders and in negotiating contracts; (iv) provide overall supervision of pilot project implementation; (v) coordinate financing arrangements and approve payments to suppliers and contractors; supervise construction to ensure overall quality control; and (vi) monitor and report on implementation progress. The Terms of Reference for this subcomponent is included in Annex F. (b) Project Implementation Unit. An independent Project Implementation Unit (PIU) has been set up under the State Committee for Water Resources with initial financing from a Japanese PHRD grant until the feasibility study work has been completed. The PIU will be responsible for overall project management, approving disbursements, and for financial management of the project. A Terms of Reference for the operation of the PIU is given in Annex E D. Cost Estimates 37. Total project costs, including physical contingencies, are estimated at US$7.388 million net of taxes. This estimate covers expected expenditures in foreign exchange of US$5.904 million (79.9% of total costs), and expected expenditure in local currency excluding taxes of US$1.484 million (20.1% of total costs). The technical assistance component amounts to $0.678 million, equivalent to 9.2% of the project costs. Details on project costs are given in Annex A, while Table 3.1 below summarizes project cost estimates by component and category of expenditures. 38. These costs were estimated by local authorities on the basis of a preliminary engineering design for civil and mechanical works and recent quotations for equipment and material purchases. Base costs are expressed in April 1996 prices and an exchange rate of 66 Tenge per one US dollar. Physical contingencies are estimated at 20% of base costs for works, and 10% for equipment and technical assistance. The annual price contingency rate is estimated at 3%. - 12 - Table 3.1 Summary of Project Costs (US$ thousand) Project Costs Foreign Component Foreign Local Total % of Total %of Total Project Component __l (i) Water Supply Rehabilitation Aral-Sarbulak 3,360 840 4,200 80.0 56.8 Booster Pumping Station 1,291 323 1,614 80.0 21.8 Rehabilitation of Distribution 678 169 847 80.0 11.5 Subtotal 5,329 1,332 6,661 80.0 90.2 (ii) Technical Assistance Pilot Project Engineering 275 92 367 75.0 5.0 Project Implementation Unit 300 60 360 83.3 4.9 Subtotal 575 152 727 79.1 9.8 TOTAL COSTS 5,904 1,484 7,388 79.9 100.0 Expenditure Category Equipment 41 8 49 83.3 0.7 Works 5,329 1,332 6,661 80.0 90.2 Technical Assistance 534 144 678 78.8 9.2 TOTAL COSTS 5,904 1,484 7,388 79.9 100.0 Note: the discrepancies between this table and Annex A are due to the rounding off of figures. E. Project Financing 39. The proposed Bank loan of $7.0 million will finance 100% of the project's foreign cost, and about 39% of its local cost, including taxes. Bank financing of part of the local cost is needed because of the stringent fiscal constraints that the Govemment of Kazakstan is expected to face in the coming years, as well as the need to focus the pilot project's attention on technical and implementation issues, not fiscal ones. The Bank loan to the Republic of Kazakstan will have a maturity of 20 years, including a 5-year grace period, at the Bank's standard variable interest rate. The Govemment will finance about 20% (US1,720) of total project cost, or 5.3% (US$388,000) of total project cost excluding taxes. Table 3.2 summarizes the financing plan for the project. - 13 - Table 3.2 Project Financing Plan (US$ thousand) Source of Funds Foreign Local Total % of Total IBRD 5,904 1,096 7,000 94.7 Government 388 388 5.3 Total 5,904 1,484 7,388 100.0 Percent of Total 79.9 20.1 100.0 100.0 - 14 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT IV. PROJECT IMPLEMENTATION A. Implementation Arrangements 40. A Project Implementation Unit (PIU) with offices in Almaty and Kzyl-Orda has already been set up for the Aral Sea Community Rehabilitation Project, and a Project Implementation Consultant Group (PICG) has been selected on a competitive basis from a short list of candidates. The Government will, until completion of the project, maintain the PIU with functions and powers and adequate staff, funds, facilities, and other resources reasonably required to carry out the project in a manner satisfactory to the Bank. 41. The feasibility study for the full-scale project is being funded by a grant of KD380,000 (approximately US$1,200,000) from the Kuwait Fund. A consortium of Sir Alexander Gibb (UK) and CES (Germany) won the contract in competition with five other international firms. The contract includes 38 months of foreign expert services, 150 months of local expert services, and 30 months of support services, with the foreign firm managing the overall study. With the assistance of the Committee of Water Resources, the foreign consulting firm is to make effective management coordination and task contracting arrangements with the local institutes. As indicated in the TOR in Annex F, a foreign firm will be contracted to check the detailed engineering design for the full-scale project and supervise start- up and commissioning of the pilot projects. The detailed engineering design for the full-scale project will be based on the feasibility study and will be prepared with the pilot project; but it may be financed by grant or PPF funding, rather than by the loan for the pilot project. The PIU will assist the consultant with logistical and office support, and its staff will receive on-the-job training in Bank procurement, disbursement and contracting procedures. Agreement will be reached at negotiations on the Terms of Reference for the pilot project engineering consultants. 42. A detailed implementation schedule for the proposed Pilot Water Supply Project is given in Annex B. As shown in this schedule, the implementation of the pilot project is expected to take approximately 12 months and the detailed engineering design will be carried out over a period of approximately 36 months. However, detailed engineering design and bidding documents for procurement packages on the critical path for implementation of the full-scale project will be completed prior to negotiations for the full-scale project. B. Procurement 43. Goods. Goods and works will be procured in accordance with the provisions of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the World Bank in January 1995 and revised in January and August 1996. A communications system and vehicles, estimated to cost about $49,000, will be procured using International Shopping procedures, based on price quotations from at least three different suppliers in two different countries. - 15 - 44. Works. Rehabilitation of the main pipeline, completion of the pumphouse (including the supply, installation, and commissioning of the pumps), and rehabilitation of the supply network, estimated to cost $8.0 million (including taxes), will be procured as a single works contract following prequalification and ICB procedures. 45. Consultant Services. Consultant services to be procured under the proposed pilot project are expected to include the following: (a) A pilot project engineering consultant firm will be hired from a short list of consultants following the World Bank's Guidelines "Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency", August 1981. Detailed designs for the works to be carried out under the pilot project have been made by Kazgidroprovodhoz. The engineering consultant will be review and finalize these designs, prepare the bidding documents, conduct the bidding, and supervise pilot project implementation. The estimated cost of this assignment is $367,000. (b) The hiring of local experts by the PIU will be based on an evaluation of CVs of at least three candidates. 46. Bank Prior Review. All contracts for goods and works above US$250,000, contracts with consulting firms above $100,000, and with individual consultants above $50,000 will be reviewed by the Bank according to Appendix 1 of the "Guidelines for Procurement under IBRD Loans and IDA Credits". The Bank will review the negotiated contract for the sole source engineering design and supervision consultant services. For the pilot project engineering services, the Bank will review the invitation package, the evaluation report before announcing the successful bidder, and the negotiated contract prior to signing. In addition the Bank will review contracts for individuals hired by the PIU, which cost more than $50,000, and request Terms-of-Reference for consultants regardless of the value of the contract. - 16 - Table 4.1 Procurement Arrangements (US$ Thousands) Project Element Procurement Method TOTAL ICB Other Goods I 49 49 l___________ (49) (49) Works 7,993 - 7,993 (6,273) (6,273) Consulting Servicesw - Pilot Project Engineering 367 367 _______ ______ (367) (367) - Project Implementation 311 311 (311) (311) TOTAL 7,993 727 8,195 _ (6,273) (727) (7,000) a/ Includes: US$49,000 for International Shopping. b/ According to IBRD Guidelines for Consultant Selection. Notes: Project cost including 20% VAT tax on civil works (which accounts for the discrepancy between these and corresponding figures in Table B 1, which do not include taxes). Figures in parentheses are respective amounts financed by IBRD. C. Disbursement 47. The project is expected to be disbursed within a period of 4 years, the completion date being June 30, 2000, and the closing date December 31, 2000. The disbursement schedule (Table 4.2 and Annex C) for the project is based on expected rapid disbursement for the first two years, during which time the implementation of the pilot project will be completed. As shown in Table 4.3, loan funds will be disbursed as follows: (a) for goods 100% of foreign expenditures, 100% of local expenditures ex-factory cost, or 80% of local expenditures for other items procured locally; (b) for works 80% of expenditures; and (c) for consultant services 100% of expenditures. Table 4.2 Disbursement Schedule (US$ Thousands) Bank Fiscal Year (ending June 30) 1997 1998 1999 2000 Annual 400 2,600 3,200 800 Cumulative 400 3,000 6,200 7,000 l - 17 - Table 4.3 Disbursement Categories (US$ Thousands) Category Amount of Loan Percent of Expenditure Eligible for Financing Goods 45 100% of foreign expenditures 100% of local expenditures (ex-factory cost) 80% of local expenditures for other items procured locally Works 5,900 80% of expenditures Consultant Services 600 1 00% of expenditures Unallocated 455 Total 7,000 48. Disbursements will be fully documented, except that Statements of Expenditures (SOEs) will be used for: contracts for goods and works of less than US$250,000 equivalent; (ii) contracts with consulting firms of less than US$100,000; and (iii) contracts with individual consultants of less than US$50,000 equivalent. All other disbursements will be fully documented. Full documentation in support of SOEs will be retained by the PIU for at least two years after disbursement. This information will be available for review by World Bank missions during supervision, and by auditors. The minimum application size for payments directly from the loan account or for issuance of special commitments is 20% of the current amount of special account authorizations. 49. In order to facilitate disbursements, a Special Account (SA) will be established by the PIU in a commercial bank, on terms and conditions satisfactory to the Bank. The selected bank should have: (i) a significant foreign correspondence network covering all currencies; (ii) reasonable capacity and experience for issuing letters of credit, for making direct foreign payments and other international transactions; (iii) the capacity to perform a wide range of banking services, at local branches, including cash payments, transfers to other domestic banks, issuance of debit notes, application of conversion rates from foreign currencies; (iv) the capacity to maintain adequate accounts for the SA as required by The World Bank and provide monthly bank statements to the PIU; willingness to issue a Comfort Letter to assure that amounts deposited in the SA will not be set off or otherwise seized or attached to satisfy amounts due to the commercial bank by the Borrower: and (vi) the readiness to charge competitive rates for their services and provide reasonable interest income on balances held. During the early stage of the project, the initial allocation of the SA would be limited to $100,000. However, when the aggregate disbursements under the loan have reached the level of US$1.5 million, the initial allocation may be increased up to the authorized allocation of US$300,000 by submitting the relevant Application for Withdrawal. Replenishment applications should be submitted at least every three months, and must include reconciled bank statements as well as other appropriate supporting documents. D. Accounting 50. The project will have sound accounting and internal controls capable of reliably recording and reporting all financial transactions. Accounting and internal control systems acceptable to the Bank will - 18 - be put in place to allow the PIU to determine that procurement procedures are being followed and that only eligible expenditures are included in disbursements and replenishment through the SA. This system will be operational by the time expenditures begin. The operating procedures and manual developed under the Russia Environmental Management Project (EMP) will be adapted for this purpose and hands- on training of the PIU staff will be conducted in Moscow at the EMPs Center for Project Preparation and Implementation (CPPI). This Center has trained the staff of other PIUs in Russia and is developing a computer program suitable for Bank project accounting and for reporting of financial transactions to the federal tax authorities. For the use of Statements of Expenditure, the PIU will process and maintain SOE documentation. For the Special Account mechanism, the PIU and the depository commercial bank will introduce arrangements for proper accounting of receipts, payments, and submission of disbursement documentation to the Bank for replenishment of the account. The Borrower will, as a condition of loan effectiveness, open a project account in a bank acceptable to the Bank, with an initial deposit of counterpart funds in the amount of US$20,000 equivalent, and thereafter maintain that account with a minimum balance deemed satisfactory to the Bank. E. Reporting 51. The PIU will provide quarterly reports to The World Bank covering the financial and physical performance of the project. The financial status will be reported through the quarterly and annual accounts which will reflect the cash receipts from all sources and expenditures related to each component and category as well as the overall financial performance of the project. The detailed annual accounts for the project will not only include expenditures directly financed by the World Bank loan, but also the expenditures financed by the Government. These reports will reflect actual project expenditures versus budgeted expenditures for the most recent fiscal quarter, fiscal year-to-date, and project inception-to- date. The Project's annual audited financial statements will be prepared following the generally accepted accounting principles as prescribed by the laws of Kazakstan. The PIU will: (a) no later than August 31 of each year starting in 1997, until completion of the project, present to the Bank for its review and comments a progress report in a format and degree of detail acceptable to the Bank, as well as an action plan and budget for the following year, together with a proposed timetable for its implementation; and (b) carry out that action plan in accordance with the proposed timetable and taking into account the Bank's comments, if any. 52. As a Special Accounts and SOE will be used in this project, the PIU will submit, together with accounts for the project, on a quarterly basis: (i) a schedule of SOE expenditures; and (ii) a summary of the Special Account activity and reconciliation with the SA balance in the commercial bank account and a summary of the activity in the project account. All unaudited quarterly reports will be submitted to reach The World Bank no later than 30 days after the end of the quarter in question. 53. Quarterly project reports on the physical performance of the project showing actual and planned performance for the quarter and progress to-date will also be prepared and submitted to the Bank. These reports, also to be submitted to reach the Bank no later than 30 days after the end of each quarter, will include comments highlighting project progress and significant bottlenecks, showing an action plan for remedial actions where necessary. F. Auditing 54. Annual reports for the project accounts, including SOEs and Special Account for each fiscal year, will be audited in accordance with generally accepted international auditing standards by an - 19 - independent auditor acceptable to the Bank. The auditors will be appointed annually by the PIU at the beginning of each fiscal year, so that the auditors may commence reviews sufficiently early in the fiscal year to complete the audit in a timely manner. The auditors will prepare and submit an annual Engagement Letter, which will be discussed and accepted by The World Bank prior to commencement of the audit. The financial statements and the auditor's opinion and auditor's management reports, including the PIU's response to the auditor's comments should be submitted to The World Bank no later than six months after completion of the fiscal year in question. G. Supervision 55. The Bank will supervise the project four times in the first year, because of the need to learn as much as possible from implementation of the pilot project and to finalize the detailed engineering design of the full-scale project in a timely manner. In subsequent years, supervision missions will be at the rate of three times per year. A Bank supervision schedule is provided in Annex G. H. Performance Indicators 56. In order to more closely monitor the performance of the proposed project, a set of perfornance indicators have been developed as shown in Table 4.4. The reporting arrangements that have been agreed with the PIU include these indicators as key factors in evaluating implementation progress and in meeting the Government's development objectives. The Borrower will maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank (see Table 4.4 below), the carrying out of the project and the achievement of its objectives. Table 4.4 Performance Monitoring Indicators _. Counterpart funding of US$388,000 from the Government. 2. Bank loan funds of US$7.0 million. 3. A water supply pumping station and reservoirs and partial rehabilitation of pipeline and secondary distribution networks. 4. Improved piped water supply for about 30,000 people living in the project area. 5. Improved heath and economic conditions for 30,000 people in the pilot project area. 6. Facilitating implementation of the full-scale project, thereby benefiting people living in the Aral Sea disaster area of Kazakstan. - 20 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT V. INSTITUTIONAL AND FINANCIAL ASPECTS A. Institutional Overview 57. Several institutions play an important role in the water supply and sanitation sector in the project area: the State Committee for Water Resources, the Ministry of Housing and Communal Services, the Ministry of Health, and the District and Oblast Administrations. (a) The State Committee for Water Resources of the Republic of Kazakstan has broad water resources management responsibilities, playing both a policy-making and an operative role in the water resources sector. In the water supply sector, the State Committee has since July 1, 1995 been responsible for the design, construction, and operation of inter-regional water transmission pipelines for both drinking and industrial purposes. Through one of its affiliates, Kzyl-Orda Project and Construction Enterprise for Agricultural Water Supply (Selkhozvodoprovod), the State Committee exercises responsibility for the construction activities relating to the Aral-Sarbulak Pipeline. This water supply pipeline project is managed in turn by two separate entities, called Repair and Maintenance Organizations (R&MO) No. 1 (Aralsk) and No. 2 (Kazalinsk). These entities are responsible for operating and maintaining the main pipeline, reservoirs and booster pump stations - R&MO No. I from the well fields to Kambash (Akbai), and R&MO No. 2 from Kambash to Novokazalinsk - and monitoring of water quality along the pipeline. The entity No. I sells water to Aralsk Vodokanal, Saksaul train station, rural settlements outside the city borders (Kosaman, Zhamnbyl, Kulundi and Zhizhaga) and to the R&MO No 2. The R&MO No. 2, in turn, sells water to Kazalinsk Vodokanal and four rural settlements outside the city borders (Kumzhiek, Basikara, Muratbayev and Zhalantos Batyr). (b) The Ministry of Housing and Communal Services (MHCS) has the primary responsibility over housing and urban services, including water supply and sanitation policies and programs country-wide. The MHCS designates responsibilities for water supply and sanitation services at the Oblast level to the Oblast Committee on Housing and Communal Services. The Committee, in turn, entrusts responsibility to the Local Rayon Administrations of each Rayon. Local Administrations supervise the Aralsk and Kazalinsk Water Canalization and Sewerage Companies or Vodokanals. These Vodokanals in turn operate and maintain independent water supply and treatment facilities and pumping stations, and distribute water through secondary and tertiary networks to the cities of Aralsk, Novokazalinsk and Kazalinsk, including city-based working settlements. (c) The Ministry of Health (MI) has, through the Department of Sanitation and Epidemiology, the responsibility for monitoring drinking water quality, ensuring sanitary conditions of water supply systems, controlling epidemics, and for sanitation and hygiene - 21 - education. The Department of Sanitation and Epidemiology also has branches at Oblast and Rayon levels. In the project area, there are Sanitary and Epidemiology Stations (SES) in both the Aralsk and Kazalinsk Rayons, which are responsible for: (i) the condition of the water supply system; (ii) the inspection of water supply systems; and (iii) inspection of public facilities from a public health perspective. More specifically, the SESs, are in theory responsible for monitoring drinking water standards (which correspond to those of the Former Soviet Union) in both urban and rural settlements. 58. The current institutional framework can be characterized as follows: (a) Water service delivery agencies are just beginning to achieve some measure of autonomy from local administrations, which own the water supply assets. The local administrations are gaining some experience in being accountable to their constituents and at representing the interests of the population. (b) Updated long-term development plans for the sector are completely lacking. Old plans, based on the operating and subsidizing principles of the former system, are still in effect. Operating entities are concerned with their immediate survival needs, coping with reduced budget allocations for capital investments and recurrent expenditures. Service levels and water quality of the piped water system are deteriorating rapidly. (c) Water rate structures are highly distorted, as shown below. For example, in December 1994 in Aralsk, domestic users accounted for 50% of total consumption and were responsible for only 1% of total revenues. At the same time, industrial enterprises accounted for 14% of total consumption, but were responsible for 39,8% of revenues. During the first quarter of 1995, domestic users in Kazalinsk accounted for 78% of consumption and contributed only 3% of total revenues, while industrial enterprises accounted for 1% of total consumption and contributed 12% of total revenues. Because of the long pumping distances, the major operating cost in the supply of the piped water to the region is energy, accounting for 70-80% of the total operation and maintenance costs. 59. The existing institutional, management, and organizational deficiencies will be addressed by the development of an institutional reform action plan under the full-scale project. The Terms of Reference for the full-scale project feasibility study includes a component focusing on the development of institutional arrangements for water and sanitation utilities in the project area. This will serve as the mechanism for developing the strategic action plan, which should be reviewed and agreed upon by the various stakeholders in the sector as the basis for proceeding with the full-scale project. The succession of projects and measures in the sector thus aims to ensure their long-term sustainability through institutional strengthening and reform. The action plan will place particular emphasis on cost recovery and improving the collection of water charges. B. Financial Issues 60. Several important issues relating to project design will be addressed during preparation of the feasibility study for the full-scale project. Those issues are listed below. 61. Affordability. Results of the Social Needs Assessment indicate that households are paying as much as $3/ m3 of delivered (possibly unsafe) water, and tend to consume between 15 and 25 liters/per - 22 - person/day (I/p/d) for domestic purposes. By contrast, the few households connected to the piped water supply system that do not experience problems with the service (about 16%) are paying a nominal fee of $0.03/m of water, and consuming at a rate of 110 I/p/d. This seems to indicate that there is scope for increasing the water tariff to improve cost recovery, especially since there is at present no revenue base for expanding piped water supply services to more households. 62. Level and Quality of Service. The Social Needs Assessment and the community focus group meetings reveal that households are demanding an improved level and quality of service. About 70% of the households interviewed demand piped water supply services, either inside the house or in the yard. They also demand improvement in the quality of services in terms of reliability, the number of hours of service, and the quality of water (especially in Kazalinsk Rayon). On average, households are prepared to pay the equivalent of US$3.8 a month for improved services. 63. Consumption Norms. The metering of domestic consumption is not practiced in either Rayon. Instead, the Vodokanals assess household consumption once a year, based on norms and customer surveys. The current norms are as follows: a standpipe, 20 liters per capita per day; a yard connection, 40 liters per capita per day; a house connection, 75 liters per capita per day; and a house connection with hot water, 110 liters per capita per day. In the case of households with gardening and livestock, the following norms are applied: gardening, 6,000 m3 per hectare per year; one cow, 70 liters per head per day (over 5 months); and one sheep, 12 liters per head per day (over 4 months). Households also pay on the basis of the number of cars and motorcycles owned, for which the norms are as follows: one car, 40 liters per car per day; and one motorcycle 15 liters per motorcycle per day. The handicapped and war veterans are exempt from payment. Participants of the war in Afghanistan and survivors of Chernobyl, as well as single mothers, pay half of the above rates. 64. Only in Aralsk Rayon, the water consumption of users other than households is charged on a volumetric basis, since meters have been installed on their premises. In Kazalinsk Rayon, however, water consumed by enterprises is assessed based on a "contracted" volume, which is in turn negotiated on an individual basis. In many cases, enterprises have responded to the high tariffs by closing the pipe connection and obtaining water by truck, thereby avoiding the high water tariffs altogether. However, because the trucks are owned by the Vodokanals, the authority effectively continues to supply water without receiving the revenue for it. 65. Water Conservation. Lack of macro and micro metering precludes an exact estimate of the levels of water losses in the project area. Nevertheless, enough evidence suggests that a high level of physical losses does exist, mainly as a consequence of inadequate water pricing policies, poor accountability of the Vodokanals, and the failure to repair leaks and replace old pipes. The reduction in physical losses is a cost effective way of providing water to additional consumers. - 23 - Table 5.1 Aralsk Water Tariff Structure (December 1994) Item Volume Sold Average Tariff Revenues ('000 m3) % (TE/m ) ('000 TE) % Water Sold 42.5 100 79.3 3,369.0 100 Group I (household use) 21.3 50 1.7 35.6 1 Group II (non-profitable use) 15.2 36 131.0 1,991.5 59 |Group III (profitable use) 6.0 14 223.7 1,341.9 40 1. In 1994, 916 MCM of water were sold among the three groups as follows: Group I 63%; Group II 27%; and Group III 10%. 2. Water rates in July 1995 were as follows: Group 1:1 TE/m3, Group II: 155 TE/m3 , and Group III: 263 TEBm3. 66. Water Tariff Structures. Water tariff structures are highly distorted in both Rayons (see Tables 5.1 and 5.2). The preoccupation with ensuring highly subsidized prices for the population has prompted the Aralsk and Kazalinsk Vodokanals to provide a heavy cross-subsidization to households from industrial and commercial users. Table 5.2 Kazalinsk Water Tariff Structure as of First Quarter 1995 Item Actual Volume Sold Average Tariff Revenues ___ ___ ('000 m3) % (TE/m3) ('000 TE) % Water Sold 171.8 100 56.5 9,705.4 100 Group I (household use) 135.2 79 2.0 270.4 3 Group II (non-profitable 34.5 20 240.0 8,280.0 85 Group III (profitable use) 2.1 1 550.0 1,155.0 12 Note: No consumer is charged based on the volume consumed. In the case of industrial enterprises, water use is assessed based on a "contracted" volume estimated to be consumed. In most cases, both the rate and the voluime are negotiated on an individual basis. 67. Although existing tariffs cover operation and maintenance costs (albeit at a considerably reduced rate), they greatly penalize industrial enterprises. While households pay about TE. 2.0 per m3, a profit- making enterprise has to pay TE. 600 in Kazalinsk (about 750% of O&M costs) and TE. 240 in Aralsk (about 400% of O&M costs). Very often, enterprises resort to disconnecting from Vodokanal services, relying instead on piped water delivered by trucks (paying only TE. 80 per m 3 of water), or from other water sources. - 24 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT VI. BENEFITS AND RISKS A. Project Benefits 68. The main benefit of and reason for implementing this pilot water supply project is to "learn-by- doing" while providing for immediate and visible results in area that has been severely affected by the Aral Sea disaster. Since this is the first time that the Bank has been involved in the water supply sector in Kazakstan, there is much to learn regarding local engineering, design, and cost-estimating standards and practices, the availability and quality of civil engineering contracting organizations, the supervision of construction, materials and equipment procurement from local and foreign suppliers, the importing of foreign goods and customs clearance procedures, etc. The early identification of constraints and the means for overcoming difficulties experienced in the pilot project will greatly assist in the design of the implementation arrangements for the full-scale project. A direct and immediate benefit will be employment for locally unemployed construction workers in the project area, and improved water supply and health conditions for some 30,000 people. 69. Funding of the detailed engineering designs and the preparation of bidding documents for the full-scale project under the engineering loan will considerably speed up the implementation of the main project, as the bidding documents will be available for distribution at the time the main loan becomes effective. This will speed up project implementation by at least 6 months. It will also provide considerable training to the staff of the PIU in procurement and disbursement procedures. B. Risks 70. Because of the small scale of the pilot project the risks are minimal, although delays are to be expected. However, in order to further reduce the risk of delays, it is proposed to employ an experienced foreign firm to work with the PIU staff and local design institutes to review detailed engineering designs and to supervise procurement and contracting procedures, so that they conform with Bank requirements. It is proposed to hire the same consulting firm that is working on the project feasibility study, in order to speed up the implementation of the pilot project and to facilitate incorporating lessons learned into the design of the implementation arrangements for the full-scale project. The impact of any delays in completing the detailed engineering designs and procurement packages will be minimized by developing a detailed implementation plan and concentrating the efforts on the facility designs that fall on the initial critical path of the project. C. Economic Rate of Return 71. The economic analysis for this project assumed an average project economic life of 25 years after construction, although the life of each individual component is quite different (35 years for the pipelines and distribution networks, and 15 years for the pumping station). Cost and benefit streams included only the incremental costs and benefits that would result from the project. - 25 - 72. The economic viability of each individual component was assessed separately. The internal economic rates of return (IERRs) of each component and of the overall project, based on the aforementioned assumptions, are presented below, while the economic analysis for the project is presented in greater detail in Annex I. The overall IERR of the project was estimated at 15.9%: Table 6.1 Internal Economic Rate of Return of the Project Component IERR (%) I Rehabilitation of Transmission Pipeline 17.0 Rehabilitation of Distribution Networks 13.3 Completion of Novokazalinsk Pumping Station 14.1 Overall Project 15.9 D. Environmental Assessment 73. The proposed pilot water supply project is not expected to have any adverse environmental impacts. Except for the rehabilitation of the Aral-Sarbulak pipeline, only minor construction activities are included in the project, including small-diameter pipeline trench digging, water holding tanks, and a pump house. The project has been rated Category C. - 26 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT VII. AGREEMENTS AND RECOMMENDATIONS 74. During Negotiations, agreement was reached with the Borrower that: (a) The borrower will, until completion of the project, maintain the PIU with functions and powers and adequate staff, funds, facilities, and other resources reasonably required to carry out the project in a manner satisfactory to the Bank (para. # 40); (b) As a condition of loan effectiveness, the borrower will open a project account in a bank acceptable to the Bank, with an initial deposit of counterpart funds in the amount of US$20,000 equivalent, and thereafter maintain that account with a minimum balance deemed satisfactory to the Bank (para. #50); and (c) The PIU will (i) no later than August 31 of each year starting in 1997, until completion of the project, present to the Bank for its review and comments a progress report in a format and degree of detail acceptable to the Bank, as well as an action plan and budget for the following year, together with a proposed timetable for its implementation; and (ii) carry out that action plan in accordance with the proposed timetable and taking into account the Bank's comments, if any (para. #5 1). (d) The Borrower will maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Bank, the carrying out of the project and the achievement of its objectives (para. #56). 75. Recommendation: The proposed project is in accordance with the Bank's Articles of Agreement and is suitable for a Bank loan of US$7.0 million equivalent for a term of 20 years, including a 5-year grace period and at a standard variable interest rate. - 27 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT ANNEX A DETAILED COST ESTIMATES Unit Parameters (in %) Detailed Comtb Cost Price Phy. (USS Cont. Cont. For. Unit Quantit 000) Rate Rate Exch. Total 1. Investment Coats A. Rehabilitation of Main Pipeline 1. CIvU Works Rehabilitation 1000mm pipeline km 70 150.0 3.0 20.0 80.0 1,319 Rehabilitation 800 mm pipeline km 3 0 100.0 3.0 20.0 80.0 384 2. Pipelne Supply Reinforced concrete pipe 1000 mm km 7.0 205.5 3.0 20.0 80.0 1,806 Reinforced concrete pipe 800mm km 3.0 180.0 3.0 20.0 80.0 691 Subtotal 4,200 B. Booster Pumping Station In Novokazalinsk 1. Cvil and Mechanical Works Ground Elevation lump-mum n/s n/s 3.0 20.0 80.0 240 Access roads, fencing, and canal cover lumprsum n/s n/a 3,0 20.0 80.0 180 Pumping Station number 1.0 32.4 3.0 20.0 80,0 41 Resevoir number 2.0 168.0 3.0 20.0 80.0 423 Chlorinating Tank number 1.0 86.0 3.0 20.0 80.0 108 Filter number 1.0 66.0 3.0 20.0 80.0 83 Water Quality Control Laboratory number 1.0 16.8 3.0 20,0 80,0 21 OfficeandOarage number 1.0 120.0 3.0 20.0 80.0 151 Utility Connections lump-sum n/a n/a 30 200 80.0 133 Electric Network lumpsum n/a n/a 3.0 20,0 80,0 21 Onsite Communication System lump-sum n/a n/a 3.0 20.0 80.0 36 2. Equipment Pump et number 2.0 222 3.0 20.0 80.0 55 WaterQuality Control Equipment number 1.0 15.0 3,0 20.0 80.0 19 Filter and Chlorinating Equipment lump-gum n/a n/a 3.0 20.0 80.0 49 Electrical Equipment and Acceusories lump-sum n/a n/a 3.0 20.0 80.0 21 Office and Garae Equipment lump-sum n/a n/a 3.0 20.0 80.0 33 Subtotal 1,614 C. Rababilltadon of Distribution Network 1. Cvil Works Rehabilitation Network in Aralsk City km 1.0 300 3.0 20.0 80.0 38 Rehabilitation Network in Novokzalinek km 35 240 3.0 20.0 80.0 106 RehabilitationNetworkinAranskCity km 40 18.0 3.0 20.0 80.0 91 Rehabilitation Network in Novokazalinak km 3 0 200 3.0 20.0 80,0 76 2. Pipeline Supply Oalvanized Iron Pipe 300.400 mm km 4.5 48.0 3.0 20.0 80.0 272 Galvanized Iron Pipe 150-200 km 7.0 30.0 3.0 20.0 80.0 265 Subtotal 847 Subtotal Investment Component 6,661 I. Tchnical Assistance Component A. Pilot Project Management lump-sum n/a n/a 3.0 10.0 75,0 367 B Project Implemetatdon Unit Technical Support lump-sum n/a n/a 3.0 10,0 75.0 311 Communication System number 1.0 7.0 3.0 10,0 83.3 8 Vehicles number 2.0 18.0 3.0 10.0 83.3 41 Subtotal Technical Assistance Component 727 Total Project Cost 7,358 - 28 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT ANNEX B PROJECT IMPLEMENTATION SCHEDULE AND PROCUREMENT PLAN 1. Project Implementation Schedule: Implementation of the project is expected to proceed according to the schedule in Table B2 (see next page). Slippages may result from unforeseen constraints that may arise in implementing the pilot project, but it is for the purpose of identifying these constraints that the pilot project is being implemented in the first place. The detailed engineering design component is expected to proceed into the implementation phase of the full-scale project and the second phase of this work will be funded under the follow up loan. 2. The procurement plan for this project is summarized in Table B 1: Table B1. Project Procurement Plan Description Estimated Proposed Procurement Schedule Package Procurement Tender Contract Complete (US$ OOOs) Procedure Award Water Supply Pilot Works Package 1' 6,661 ICB Feb-97 May-97 Sep-98 Goods Package lb/ 49 IS Feb-97 May-97 Sep-97 Technical Assistance Pilot Project Engineering 367 Short List Sep-96 Dec-96 Sep-98 Project Implementation Unit 311 Three CVs Sep-96 Aug-96 Dec-99 TOTAL 7,388 a/ Includes ICB procurement of construction services and supply of equipment for the rehabilitation of the main pipeline, completion of the booster pump station, and rehabilitation of the distribution networks. b/ Includes international shopping purchases for vehicles and communication system. Note: All figures are net of taxes, which accounts for the discrepancies between this table and Table 4.1 on page 16 (which includes a 20% VAT tax on civil works). - 29 - Table B2. Project Implementation Schedule 1996 1997 1998 1999 ACTIVITY Q1 Q2 Q3 Q4 Ql1 IQ2 Q31 Q4 Ql0 Q2 Q3 Q4 Ql Q21 Q3 Q4 Loan Documentation and Board Approval Water Supply Investment Component Mobilization of beneficiary communities * _ _ * Project agreement between communities and Local Governments Delivery of materials and equipment Organizing labor force provided by communities Construction activities *_ Water supply systems testing and commissioning Provision of water conservation education Technical Assistance Component A. Project Management - Review detailed engineering design Preparation of a procurement packages and negotiation of contracts - Supervision, monitoring and evaluation of project implementation B. Detailed Engineering Design for Full Scale Project _____N| C. Project Implementation Unit - Contract with firm for project management of investment component - Issue tender for detailed engineering design of full scale project - Contract with firm for detailed engineering design of full project - Assist in water supply project implementation ll_ll -Assist Detailed Engineering Design for full scale project - N N NiN N - 30 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT ANNEX C ESTIMATED DISBURSEMENT SCHEDULE (US$ THOUSAND) Bank Fiscal Year Disbursements Cumulative and half year by half year Disbursements by end of half year 1997 1st half year 0 0 2nd half year 400 400 1998 1st half year 1,200 1,600 2nd half year 1,400 3,000 1999 1st half year 1,800 4,800 2nd half year 1,400 6,200 2000 1st half year 400 6,600 2nd half year 400 7,000 - 31 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT ANNEX D SELECTED DOCUMENTS AVAILABLE IN THE PROJECT FILE KAZAKSTAN: Aide Memoires: October 1994 May 1995 October/November 1995 May 1996 2. KAZAKSTAN: Social Assessment I - 32 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT ANNEX E TERMS OF REFERENCE FOR THE PROJECT IMPLEMENTATION CONSULTANT GROUP 1. The Project Implementation Consultant Group (PICG) will be set-up under the State Committee for Water Resources of the Republic of Kazakstan. It will be responsible for project preparation and implementation and will have two offices, in Almaty and Kzyl-Orda. Office equipment for the Almaty and Kzyl-Orda offices has been provided by a Dutch Consultant Trust Fund in The World Bank. The PICG is being financed during project preparation by a grant from the Japanese PHRD. 2. The PICG will provide the following services to the State Committee for Water Resources regarding project preparation and implementation: (a) Liaison; (b) Procurement; (c) Disbursement; (d) Reporting, Accounting and Auditing; (e) Information exchange; and (f) Policies concerning the above. 3. Liaison: The PICG will provide liaison with donors, ministries, the World Bank and other public entities NGOs and the public on project activities. Such liaison will include facilitating the interaction of concerned entities and the provision of information as described in paragraph 6 below. In this regard, the PICG will be the consolidated repository for project information and data which it will make available to concerned entities in appropriate formats. Also the PICG will assist the State Committee for Water Resources in organizing and coordinating seminars and workshops to disseminate project progress, results and lessons learned, both for the Government of Kazakstan, NGO and public audiences, and for interested donors and suppliers of goods and services. 4. Procurement: The PICG will have general responsibility for the administration of the procurement of equipment, goods and services required for the project. In undertaking procurement of equipment and goods, the PICG will follow The World Bank Guidelines for Procurement under IBRD Loans and IDA Credits and, for selecting and employing professional services, will follow the Guidelines for the Use of Consultants by World Bank Borrowers and by The World Bank as Executing Agency. The specific responsibilities and arrangements for procurement will be as follows: (i) Equipment and Goods: The PICG will have the responsibility for procuring all the equipment required for the project. In general, the equipment to be procured will follow the lists given in the Procurement Annex to the IBRD Staff Appraisal Report (SAR). However, as project preparation and implementation progresses there may be amendments to these - 33 - lists. The PICG should consolidate the lists, prepare specifications and confirm with design consultants and project managers, that the specifications meet the needs of the project component. Wherever possible, equipment needs should be combined in packages with ICB being used for all packages with estimated values over a to be specified threshold value. Some equipment will be required later in the project cycle and if the equipment specifications are agreed, then the PICG should use its best judgment to determine whether: (a) to include this as part of early packages with delayed delivery timed to best meet the needs of the project; (b) procure with the bulk of the equipment and either store or deliver early to the appropriate agency (bearing in mind possible security risks); or (c) whether to procure the equipment separately when needed. Packages with an estimated value under the ICB threshold may be procured through International Shopping. "National shopping" may be used for supplies and minor items readily available locally and, where bulk procurement would not be more economical. (ii) The selection and employment of professional services: The PICG will act as a service agency and facilitator for the selection and employment of professional services. Such services may be provided from foreign and Kazakstan sources by: (a) consulting firms and individuals and (b) Institutes. The PICG can hire consultants to assist its work and can assist the State Committee for Water Resources in preparing invitation packages, selecting consultants and negotiating contracts with consultant firms which will be hired by the State Committee for Water Resources. Based on the Guidelines for "Use of Consultant by World Bank Borrowers and by The World Bank as Executing Agency," the selection of consulting firms will be through evaluation of proposals received from a shortlist of firms (not less than three, no more than six). Selection of individuals will be through the evaluation of at least three CVs. The PICG will provide support to the State Committee for Water Resources by assisting in the preparation of long lists of firms from which the State Committee for Water Resources will choose the short list. Selection committees will usually be convened by the State Committee for Water Resources. While the PICG will be represented on selection committees, the majority of the State Committee for Water Resources members should be involved with project implementation. The PICG will handle the mailing of the invitation package to the shortlisted firms and receiving and recording the proposals. Given its rapid build up of experience, the PICG should jointly with the State Committee for Water Resources, negotiate contracts with the consulting firms. Individual contracts will be negotiated on the basis of a standard scale of salaries and conditions. For both firms and individuals, standard contracts issued by the World Bank will be used. For firms this will be The World Bank Standard Contracts; for individuals, the standard individual contract of the PICG. (iii) Training and Advice: Based on the Bank's guidelines, the PICG will prepare a procurement manual which should amplify the procedures given in the Guidelines and explain in detail the responsibilities and procedures to be followed by the Project Implementation Agencies. The PICG will also provide training in professional services selection and contract administration. The PICG will maintain a library of terms of reference, job descriptions, and contract documentation and will build up a data base of information on consulting firms and equipment suppliers. The PICG will also assist in the administrative matters related to training workshops to be mounted by the Project Implementing Agencies and with training and secondments overseas. - 34 - 5. Disbursement: The PICG will be responsible for the disbursement of funds, the preparation of withdrawal applications and the collection, maintenance of all relevant documents. The Bank's Disbursement Handbook which details disbursement procedures for IBRD Loans, provides the information on procedures and should be considered a part of these Terms of Reference. Withdrawal applications will be fully documented, except for expenditures against contracts less than US$50,000 equivalent, which will be made on certified Statements of Expenditures detailing the individual transactions. The documents to support these expenditures will be retained by the PICG for at least one year after the receipt by the Bank of the audit report for the year in which the last disbursement was made. This documentation will be made available for review by the auditors (see section below on "Reporting, Accounting and Auditing") and the Bank upon request. 6. Financial Reporting, Accounting and Auditing: The PICG will establish a management information system which, at a minimum, will cover: (a) All equipment and goods procurement activities; (b) All consultants and personnel employed under the Project; (c) All financial activities including payments and disbursements; (d) An accounting system following generally accepted international standards in order to provide information on the receipt and use of funds and in line with the terms of the Loan Agreement. The system would ensure timely and accurate accounting of all transactions under the Loan, and a clear presentation of financial information. It should enable identification of the use of all funds by components and categories of equipment and goods procured and consultants and personnel employed and paid under the project. The accounting system should reflect the movement and receipts and payments through the Special Account with balances agreed with monthly financial statements form the holding commercial bank and with periodic statements from The World Bank; and (e) An auditing system to meet the requirements of the Government of Kazakstan and The World Bank. Detailed requirements for the above, including the determination of responsibilities for the provision of data and reports on subprojects, will be developed during the 9 month start-up phase of the PICG. 7. Information Exchange: The PICG will ensure the organization and management of information reporting and database maintenance to meet the needs of the project and donors and lenders participating in the project. Information management will include that developed by the systems in paragraph 7 above and will also include written reports, both as specified under the Loan Agreement, but also as required for the dissemination of information to entities of the Government of Kazakstan, donors and to the participants in the project. 8. Employment of Personnel: The PICG will develop personnel employment policies to ensure appropriate consistency by all the project participants. Over and above the employment activities as indicated in paragraph 4 above, the PICG will engage individual experts for the purpose of staffing the PICG. - 35 - 9. Development of PICG Policies and Procedures: The detailed functions of the PICG and its structure, policies and operations will evolve over time - particularly during the start-up phase. These Terms of Reference provide a starting point for the PICG operations. However, it is expected that they will be revised, amplified and amended fiom time to time to more adequately meet the needs of the project. - 36 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT ANNEX F PART A: TERMS OF REFERENCE FOR THE PILOT PROJECT ENGINEERING CONSULTANT Background 1. One of the planet's most serious environmental and human tragedies continues to unfold in the basin of the Aral Sea. Over the past 34 years, the sea has steadily shrunk as a result of a huge reduction in inflow from its tributaries, the rivers Amu Darya and Syr Darya, primarily due to the increasing use of water for irrigation of rice and other food grains, fodder, and cotton. In the aggregate, between 1960 and 2 1993 the area of the Aral Sea decreased by 52%, from 69,000 to 33,000 km , and its volume fell by 74% from 1083 to 277 km3. The environmental and economic consequences of the Aral's desiccation have been enormous. 2. One of the areas hardest hit by the conditions that led to the Aral Sea crisis is along the Syr Darya river in Kazakstan's Kzyl-Orda Oblast (with an area of 228,000 kM2 and a total population of 598,000). Especially heavily affected are two Rayons: Aralsk and Kazalinsk, which are now among the poorest and most devastated parts of Kazakstan and Central Asia. Two thirds of the disaster area's population live in the cities of Aralsk, Novokazalinsk, and Kazalinsk. The rural population is also concentrated in large settlements: over 60% live on state farms with more than 1,000 persons. 3. Before the start of the Aral Sea disaster and the associated desertification, salinization of the groundwater, and loss of pasture land, forests, and sources of spring water, the population of Kzyl-Orda enjoyed access to safe drinking water and the towns were able to use nearby springs and wells. In the 1960s, when water quality in the Syr Darya was still good, water was taken from the river at a point near the community. Rapid deterioration in the river's water quality has forced the construction of a major regional water supply scheme. However, the new scheme does not extend to all communities. Those not covered and those provided with very unreliable service still rely on the old, often unsafe, supply arrangements. 4. A project to improve the water supply, sanitation and health of the population affected by the Aral Sea crisis in Kzyl-Orda Oblast was identified as part of a wide-ranging package of projects prepared by the donor community in support of the "Disaster Zone". Project identification, combined with the Stakeholders Seminar held in November 27, 1995, led to the formulation of two concurrent project preparation activities: (i) an overall project feasibility study, followed by its implementation, and (ii) a small engineering project to ensure the water supply in the cities of Aralsk and Novokazalinsk, as well as to test and develop methodologies and define investment requirements for improving the health, hygiene, and sanitation in selected rural areas. - 37 - Pilot Project Description 2. The Pilot project includes the following components: (a) Rehabilitation of the Main Pipeline. The transmission pipeline that delivers water from the Kosaman and Berdykol well fields to Aralsk and Kazalinsk Rayons suffers from poor initial construction practices. In particular, the method of tapping pipes has resulted in a large number of leaks, of which the largest number occur between Booster Pump Stations No. 2 and No. 3. Some repair work has already been undertaken using steel and PVC pipes of smaller diameter than the concrete pipes. The rehabilitation program will provide for a new pipeline of adequate diameter and suitable material. It will include the replacement of concrete pressure pipes of approximately 7 km in length and 1000 mm in diameter between Booster Pump Stations No. 2 and No. 3., and the rehabilitation of damaged pipes of approximately 3 km in length and 800 mm in diameter at locations selected after examining the pipeline. (b) Booster Pump Station Completion. Construction of the pumping station in Novokazalinsk (Booster Pump Station No. 7) started several years ago, but was abandoned in 1992. Current civil works have been roughly estimated to be less than $80,000. Its current location, however, is considered to be unsatisfactory, given that the area is prone to frequent floods. This subcomponent will provide for the construction of a totally new pumping station in a different location, unless the feasibility study recommends that the existing site is safe. The subcomponent includes the pumphouse, two reservoirs, a chlorinating facility, a water-quality control laboratory, a power substation, and a warehouse or storage facility. (c) Rehabilitation of the most corroded sections of distribution networks in the cities of Novokazalinsk and Aralsk. Due to a lack of finance since the early 1 990s, there has been limited work on replacement of corroded and badly leaking sections of the existing piped water distribution networks in the two cities. Under this component the most deteriorated sections of the 60km and 70km networks in the cities of Novokazalinsk and Aralsk, respectively, will be replaced with new PVC piping of approximately 6km in length in each city ranging in diameter from 200 to 300mm. In addition to allow more effective functioning of the Vodokanal maintenance departments it is also proposed to provide emergency assistance to upgrade their maintenance equipment, which is in a very bad state of disrepair. Objectives 3. The objectives of the assignment are to test on a pilot basis the engineering design, procurement, contracting and supervision requirement for water supply and distribution schemes in the region proposed for the Kazakstan: Pilot Project Management. The lessons gained from this experience will be applied to the design and implementation of the full scale project. Scope of Work 4. The scope of work will include but not necessarily be limited to the following: - 38 - (a) Review engineering designs, materials, equipment and construction standards (GOSTs) being applied, design criteria, and equipment specifications, ensure that the local materials and equipment meet design specifications, and liaise with local civil engineering/erection contractors (public and private) to ensure quality standards. (b) Prepare the scope and detailed cost estimates for each contract broken down into foreign exchange cost and local currency cost; (c) Arrange payments for materials and equipment supplies, shippers, customs agents, contractors etc. and keep financial records to a standard which meets the World Bank's financial auditing requirements. (d) Prepare tender documents for each contract package, including general specifications and detailed technical specifications for materials, equipment, instrument, methods of construction of civil works and methods of installation and fabrication for mechanical and electrical works; (e) Prepare a detailed construction management plan including an environmental management plan, schedules for construction, bidding, financing including disbursement of the proceeds of the loan and budget appropriation by the GOK, test run and start-up of all project facilities; and (f) Prepare detailed design reports presenting the results of all the above tasks. (g) Prepare letters of invitation for bidding; (h) Prequalify civil works contractors and prepare a short list of suppliers; (i) Evaluate the submitted bids and prepare bid evaluation reports as required by the Bank and the GOK; (j) Assist the PIU in conducting price and technical negotiations with the bidders; (k) Correspond with the Bank and other agencies concerned to seek endorsement or approval of the results of bid evaluation and contract award; and (I) Review and evaluate the validity of proposed subcontractors. (m) Update or revise, if necessary, the construction management plan and the cost estimates based on the results of the bidding; (n) Monitor the delivery and secure storage of materials and equipment; (o) Review shop drawings prepared by the contractors and equipment manufacturers/suppliers; (p) Monitor the contractors' topographic surveys to ensure correct alignments and elevators of facilities and soil tests to ensure adequate data for foundation design; - 39 - (q) Inspect materials and equipment delivered to the site of the works and witness tests of materials and equipment to be incorporated in the works, if necessary, at the manufacturer's premises; (r) Supervise, inspect, measure and control the quality of the construction of works and the installation of equipment to ensure compliance with drawings and specifications; (s) Authorize interim payments for part completed works; (t) Inspect and approve all completed works and check contractors' completed or as-built schedule of quantities; (u) Supervise the implementation of all safety and environmental protection measures; (v) Maintain records of progress of works and the results of inspections and test of materials and equipment; (w) Issue instructions on behalf of and with approval of the GOK to the contractors and equipment suppliers in connection with the construction of the works and in accordance with the contract documents; (x) Make recommendations to the GOK and issue instructions, with the approval of the GOK, to contractors on the extent of special inspections and testing required and to be carried out in connection with the construction of works; (y) Compare actual with scheduled progress and advise the GOK of any developments that could delay completion. Recommended any necessary actions to be taken by the GOK to facilitate timely completion and construction; (z) Observe any change or previously unknown conditions that may require modifications to the design and/or specifications of the works, advise the GOK of the same, and recommend appropriate action; prepare any necessary extra work orders with the approval of the GOK; (aa) Prepare as-built drawings of the completed works prepared by the contractors for each subproject; (ab) Supervise pressure tests of the major pipelines, equipment start-up and commissioning; (ac) Provide advice and suggestions to the GOK on the overall construction works. Budget and Schedule 4. It is expected that the assignment will be completed in one year and that it will require one full- time technical expert, as well as free support from staff of the PIUs, which have been set up under the Kazakstan Aral Sea Community Rehabilitation Project. The cost of detailed engineering designs (and revisions) will be covered by the client. All other cost associated with the project will be paid for out of this contract including procurement and contracting services, customs clearance, transport, materials and equipment costs, civil and erection contracting, supervision, monitoring and evaluation and writing of reports etc., through to start up and commissioning of the pilot projects. - 40 - Reporting 5. While the contract with the consultant will be signed with Kuwait Trust Fund, the consultant will report to Mr. Sarsensbekov of the Water Committee, who will be assisted by the manager of the Almaty PIU for the proposed Water Supply Project. The consultant will also liaise with the World Bank representatives in Washington and Almaty Resident Mission. 6. The consultant will provide brief monthly progress reports on project implementation and three monthly reports on "lessons gained" from this assignment. A final completion report will summarize these lessons and will make recommendations for full scale implementation of the project. Consultant Experience and Qualification 7. The expert proposed or this assignment will have a total of at least 10 years experience in design of potable water supply and distribution schemes and field experience in procurement of materials, equipment and services, as well as supervision of contractors. He/She should also have some experience of working in developing countries, or in countries of Eastern Europe or the Former Soviet Union. PART B: TERMS OF REFERENCE FOR THE DETAILED ENGINEERING DESIGN CONSULTANT FOR THE F ULL-SCALE ARAL SEA COMMUNITY REHABILITATION PROJECT Background 1. One of the planet's most serious environmental and human tragedies continues to unfold in the basin of the Aral Sea. Over the past 34 years, the sea has steadily shrunk as a result of a huge reduction in inflow from its tributaries, the rivers Amu Darya and Syr Darya, primarily due to the increasing use of water for irrigation of rice and other food grains, fodder, and cotton. In the aggregate, between 1960 and 1993 the area of the Aral Sea decreased by 52%, from 69,000 to 33,000 km 2, and its volume fell by 74% from 1083 to 277 km'. The environmental and economic consequences of the Aral's desiccation have been enormous. 2. One of the areas hardest hit by the conditions that led to the Aral Sea crisis is along the Syr Darya river in Kazakstan's Kzyl-Orda Oblast (with an area of 228,000 km2 and a total population of 598,000). Especially heavily affected are two Rayons: Aralsk and Kazalinsk, which are now among the poorest and most devastated parts of Kazakstan and Central Asia. Two thirds of the disaster area's population live in the cities of Aralsk, Novokazalinsk, and Kazalinsk. The rural population is also concentrated in large settlements: over 60% live on state farms with more than 1,000 persons. 3. Before the start of the Aral Sea disaster and the associated desertification, salinization of the groundwater, and loss of pasture land, forests, and sources of spring water, the population of Kzyl-Orda enjoyed access to safe drinking water and the towns were able to use nearby springs and wells. In the 1960s, when water quality in the Syr Darya was still good, water was taken from the river at a point near the community. Rapid deterioration in the river's water quality has forced the construction of a major regional water supply scheme. However, the new scheme does not extend to all communities. Those not covered and those provided with very unreliable service still rely on the old, often unsafe, supply arrangements. - 41 - Full-Scale Project Objectives 4. A project to improve the water supply, sanitation and health of the population affected by the Aral Sea crisis in Kzyl-Orda Oblast was identified as part of a wide-ranging package of projects prepared by the donor community in support of the "Disaster Zone". The objectives of the full-scale Aral Sea Community Rehabilitation Project are to: (i) improve the health of the urban and rural populations of the Kzyl-Orda Oblast through the provision of safe drinking water and improved hygiene education and sanitation facilities; and (ii) to strengthen institutional capacity for the management, operation and financial performance of the regional water supply and sanitation utilities. Full-Scale Project Description Possible2/ components to be funded under the full-scale project include: (i) Safe Water Supply. Aimed at providing better water supply facilities to about 150,000 people living in the project area, this component would consist of two major subcomponents: (a) Urban water supply. Under this subcomponent, activities such as leak detection and control programs in the two major cities of the project area, repair of main pipelines of the Aral Sarbulak system and rehabilitation of water supply network will be implemented. (b) Rural water supply. This subcomponent would include design and construction of rural water supply schemes, with the objective of providing basic water supply and sanitation facilities owned and managed by the communities for presently unserviced or underserviced rural settlements, by adopting a community-based approach. It would also support activities for community mobilisation and organizational development, including a package of activities for capacity building and mobilizing organizations, as well as forming community-based organizations to plan, implement and manage their own water supply. (ii) Environmental Sanitation. This component includes providing assistance to urban settlers to build community sanitation facilities, as well as assisting rural communities to construct improved household toilets; (iii) Hygiene Education and Public Awareness. Realization of expected health benefits from the project will largely depend on a successful hygiene education and public awareness program. This component thus aims to enhance public participation and awareness in managing water and sanitation services; and to educate the population about the significance of effective hygiene practices for improving their health conditions; and (iv) Capacity Building. This component would assist the agencies responsible for water supply at Oblast, city, and settlement levels. Technical assistance and training would be provided 2/ The final scope of the full-scale Aral Sea Community Rehabilitation Project will be agreed on based on detailed recommendations developed by the feasibility study consultants, Sir Alexander Gibb & Partners. - 42 - for these agencies to enhance their efficiency, cost effectiveness, financial viability, and also to make them managerially and financially self-sufficient. Objectives 6. The main objective of the services to be provided under the first phase of this assignment is to prepare the detailed engineering designs and procurement packages for goods, works and services to be provided for the full scale water supply, sanitation and health project. The second phase of the work will include project management, negotiating contracts with suppliers and supervision of construction and start up of the project. Scope of Work 7. A team of international and local specialists will be engaged by the Committee for Water Resources for this assignment. 10. Review of Detailed Engineering Design and Tender Documents: For the preparation of tender designs and detailed engineering designs of the various construction sub-projects, and preparation of tender documents for procurement of civil works and equipment, the tasks required of the Consultant will include, but not be limited to, the following: (i) Brief review of existing database on the subproject areas which are necessary for water supply planning. Such database would include base maps of the project areas (showing ground contours, land use, roads, water courses, and water supply, sewerage and drainage facilities) maps of the distribution networks, inventory of existing water supply and sewerage facilities, number of connections, past water consumption, and socio- economic profile of consumers; (ii) Based on the design criteria and information from previous reports, laboratory field tests and surveys, firm up (a) water quality and treatability; (b) estimates of water consumption in each subproject; (c) design criteria for major Project facilities; (d) the optimum design periods for the required capacities of major Project facilities; (e) sustainable yield of all the proposed raw water sources taking into account existing and potential competing and/or conflicting water use over the design periods; (iii) Plan detailed topographic surveys and soil investigations along the alternative alignments of proposed transmission mains and access roads, and of the proposed sites for water reservoirs, intake structures and water treatment plant; (iv) Prepare the configurations for the proposed water supply schemes with due consideration given to maximum use and integration of existing facilities, and land availability; (v) Prepare the hydraulic and functional designs of the proposed subproject facilities including intake structures, water treatment plant, pumping stations, clear water reservoirs, transmission mains, and distribution network. Explore the possibility of installing infiltration galleries for all the intakes; (vi) Prepare detailed engineering designs and construction (not working) drawings of the facilities that will cover details on site preparatory tasks, layout of facilities, simple architectural and landscape designs for office and control buildings and the water - 43 - treatment plant, foundation and structural works, pipeline construction, mechanical works including piping works and installation of pumps and other equipment, and electrical works including instrumentation and control system; (vii) Prepare bill of quantities and divide the procurement of civil works and equipment into an appropriate number of contract packages, taking into account that procurement of civil works will be done through International Competitive Bidding (ICB) or National Competitive Bidding (NCB), while procurement of equipment will be either through International Competitive Bidding or International Shopping (IS), or other procedures as required by project co-financiers. Prepare invitation packages for procurement of consultant services according to World Bank Guidelines; (viii) Prepare the scope and detailed cost estimates for each contract broken down into foreign exchange cost and local currency cost; (ix) Prepare tender documents for each contract package, including general specifications and detailed technical specifications for materials, equipment, instrument, methods of construction of civil works and methods of installation and fabrication for mechanical and electrical works; (x) Prepare a detailed construction management plan including an environmental management plan, schedules for construction, bidding, financing including disbursement of the proceeds of the loan and budget appropriation by the GOK, test run and start-up of all project facilities; and (xi) Prepare detailed design reports presenting the results of all the above tasks. 11. The services to be provided in the bidding stage, will include, but not limited to, assisting the GOK in the following: (i) Prepare letters of invitation for bidding; (ii) Prequalify civil works contractors and prepare a shortlist of suppliers; (iii) Evaluate the submitted bids and prepare bid evaluation reports as required by the Bank and the GOK; (iv) Assist the PIU in conducting price and technical negotiations with the bidders; (v) Correspond with the Bank and other agencies concerned to seek endorsement or approval of the results of bid evaluation and contract award; and (vi) Review and evaluate the validity of proposed subcontractors. 12. Construction Supervision: During construction, the Consultant, on behalf of the GOK, will be responsible for field supervision of the construction works by the contractors. Tasks will include but not be limited to, the following: - 44 - (i) Update or revise, if necessary, the construction management plan and the cost estimates based on the results of the bidding; (ii) Monitor the delivery and secure storage of materials and equipment; (iii) Review shop drawings prepared by the contractors and equipment manufacturers/suppliers; (iv) Monitor the contractors' topographic surveys to ensure correct alignments and elevators of facilities and soil tests to ensure adequate data for foundation design; (v) Inspect materials and equipment delivered to the site of the works and witness tests of materials and equipment to be incorporated in the works, if necessary, at the manufacturer's premises; (vi) Supervise, inspect, measure and control the quality of the construction of works and the installation of equipment to ensure compliance with drawings and specifications; (vii) Authorize interim payments for part completed works: (viii) Inspect and approve all completed works and check contractors' completed or as-built schedule of quantities; (ix) Supervise the implementation of all safety and environmental protection measures; (x) Maintain records of progress of works and the results of inspections and test of materials and equipment; (xi) Issue instructions on behalf of and with approval of the GOK to the contractors and equipment suppliers in connection with the construction of the works and in accordance with the contract documents; (xii) Make recommendations to the GOK and issue instructions, with the approval of the GOK, to contractors on the extent of special inspections and testing required and to be carried out in connection with the construction of works; (xiii) Compare actual with scheduled progress and advise the GOK of any developments that could delay completion. Recommended any necessary actions to be taken by the GOK to facilitate timely completion and construction; (xiv) Observe any change or previously unknown conditions that may require modifications to the design and/or specifications of the works, advise the GOK of the same, and recommend appropriate action; prepare any necessary extra work orders with the approval of the GOK; (xv) Prepare as-built drawings of the completed works prepared by the contractors for each subproject; (xvi) Supervise pressure tests of the major pipelines, equipment start-up and commissioning; - 45 - (xvii) Prepare O&M Manual for equipment and the water treatment plants that are constructed or rehabilitated under the project; and (xviii) Provide advice and suggestions to the GOK on the overall construction works. Reporting, Schedule, and Budget 14. The consulting services are expected to cover a period of about 3 years. The Consultants shall observe the following reporting schedule: (i) Inception report. To be submitted within three months after the commencement of the contract. If major revisions are proposed to the terms of reference, a tripartite meeting involving the GOK, the World Bank and the Consultants will be convened to discuss and make decisions on the proposed revisions; (ii) Brief Progress Reports. To be submitted every two months after acceptance of the inception report; and (iii) Project Completion Report to be submitted at the end of the services. 15. The Consultants will submit to the PIU six copies of each in English and Russian of the above reports. It is estimated that 50 staff-months of foreign and 150 staff-months of local expert services will be required for the Project.. - 46 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT ANNEX G SUPERVISION PLAN The staff input indicated in the table below is in addition to regular supervision at headquarters for procurement review, correspondence and review of reports, which is estimated at 6 staff weeks per year for the first three years. The supervision plan covers the period until completion of the pilot project implementation as the remaining activities will be included under the full scale project. Approved Dates Activities Skills Needed Staff Weeks January 1997 Start up of pilot project and Water Supply Engineering & 4 tender design for full scale Procurement Specialist project. Community Participation Specialist January 1997 Review pilot project Water Supply Engineering & 3 implementation and tender Procurement Specialist documentation preparation for full scale project. May 1997 Inspect pilot project works and Water Supply Engineering & 4 evaluate effectiveness of Procurement Specialist community participation; and Community Participation Specialist review bidding process for full scale project. September 1997 Review completion of pilot Water Supply Engineering & 3 project works. Procurement Specialist - 47 - STAFF APPRAISAL REPORT REPUBLIC OF KAZAKSTAN PILOT WATER SUPPLY PROJECT ANNEX H SOCIAL ASSESSMENT - EXECUTIVE SUMMARY 1. The Republic of Kazakstan is preparing a water supply, sanitation and health project to alleviate the severe living conditions associated with the ecological crisis in the Aral Sea Basin. The project, as originally conceived, focuses on the two districts of the country most affected by the crisis, Aralsk and Kazalinsk. These districts are isolated from the country's major population centers and are the most economically depressed and socially vulnerable in Kazakstan. Due to extreme poverty and lack of employment opportunities in these areas, many inhabitants, particularly the more skilled, have either moved out or are planning to leave. In preparing the Kazakstan Water Supply, Sanitation, and Health Project, a Social Assessment (SA) was carried out to ensure that the project responds to the needs of the intended beneficiaries, particularly the poor. Proposed Project Areas 2. The Aralsk and Kazalinsk Rayons (districts) are located in the Kzyl-Orda Oblast (region) and have a combined population of about 150,000. Aralsk is situated in the north-east part of the region which borders the Aral Sea. Aralsk, the center of this district, was originally settled near an old fishing village during the construction of the Orenberg-Tashkent Railway (1903-1905), a principal trunkline to the East. It later became the administrative center of the district and eventually flourished as a local industrial center and tourist attraction. Kazalinsk, which is situated in the western part of the Kzyl-Orda Region, was originally settled as a fort town near the Syr Darya River, but was superseded by the creation of Novokazalinsk during the construction of the railway. Novokazalinsk eventually became a regional administrative center as well and is now the largest settlement in the district. 3. Since independence, the economies of both districts have been severely debilitated. Many of the problems are similar to those faced by people in other parts of Kazakstan: the collapse of previous trading structures, sources of raw materials, and other inputs; the absence of alternative markets; greatly distorted prices for both new and processed goods; and the substantial reduction of budgetary allocations from the central and regional governments. The combined effect has been an increase in unemployment, delayed or unpaid salaries, and disguised unemployment as employees are put on indeterminate, unpaid leave. These problems have been exacerbated by the great distance of the two districts from any potential markets or sources of materials, as well as their dependency on three local industries: fish processing, wood working, and ship repair. Of the three, only one has been able to adapt to the new circumstances; the ship repair factory now repairs railroad cars. - 48 - SA Objectives and Activities The principal objectives of the SA were to: (1) determine the actual extent of the out-migration from Aralsk and Kazalinsk as well as anticipated trends; (2) identify any prospects (including an improved water supply) that would improve living standards in the area and therefore induce people to remain in the area; and (3) determine the extent to which the population considers the proposed water sanitation and health project to meet a major need. The SA consisted of the following activities, a number of which involved substantial participation by the intended beneficiaries as well as govermnent agencies, local research institutes, and private firns. Demographic and Ethnographic Studies. These included studies of the area to determine demographic trends, physical hardships of local residents, and whether the area was in decline. In addition, ethnographic studies of Aralsk and Kazalinsk focused on the response of people to limited, irregular, and poor quality water supplies. These studies were complemented by a detailed socioeconomic inventory of a number of communities, covering: major institutions, community infrastructure, population and employment, and the impact of the water system and tariff on behavior * IHousehold Survey. A socioeconomic survey of 500 households focused on income, employment, household assets, migration patterns, access to water and sanitation, perceptions of water availability and quality, water costs, water system preferences, and ability and willingness to pay for improved water supplies. The survey also was designed to identify opportunities for community participation in planning water system improvements and in solving other problems. * Complementary Studies. To supplement the household survey, the SA involved a set of complementary studies: in-depth interviews with managers of 23 enterprises and state/collective farms concentrating on their current economic status, labor structure, water use, constraints, and opportunities; a rapid assessment of water delivery institutions in the area; and an appraisal of economic prospects for the two districts. * Focus Group Discussions. Seven focus group discussions throughout the project area centered on the population's perceptions of the links between improved water supplies and economic opportunities, participation, health, and migration.They were designed to provide additional input from key stakeholders to interpret the results of the household survey and to generate information that could not be obtained in the survey. Key Findings 4. The SA provided a rich, vivid portrait of the declining quality of life in the area and revealed important informnation about the stability of the populations in Aralsk and Kazalinsk; priority ranking of water, sanitation, and health among other problems people face; the extent to which water is important to maintain livestock production and to re-introduce gardening; and willingness to pay for improvements. The following are key findings of the SA: * According to the household survey, 37% of the respondents indicated a desire to relocate. In Kazalinsk, the percentage who want to move is as high as 46 %; in Aralsk, 29 %. The - 49 - majority (84 %) of respondents who desire to emigrate said that the main reason influencing the desire to migrate is the "ecological situation," which refers to the overall economic and physical deterioration in the Aral Sea zone. The people most likely to want to emigrate are the higher income, more highly educated skilled people, those who could be expected to play the most important roles in rebuilding the economy. Despite the large percentage of respondents who want to move, the percentage of respondents in both districts that are actually ready to move is much smaller (11 % of the whole or 30 % of those willing to move). Their principal reasons for remaining in the area are lack of money (83 %) and lack of transport (12%), as well as the lack of housing and employment elsewhere. The survey also revealed that the desire to move could be reduced by: increasing wages (62%), improving the environment (41%), providing employment opportunities (36%), improving living conditions (34 %), expanding opportunities for children (8%), and supplying more water (8 %). * The household survey revealed that many people have access to water from a variety of sources, sometimes using different sources for different purposes. Sixty-two % of the sample have access to piped water either in their yards, house, street, or neighbor's house. Water pressure is low and pipeline failures are common; thus, even communities that are served by piped water are without water at least 25 % of the time. Among those with access to a piped water source, 76 % said that water was available less than 10 days during the month before the survey and 37 % said that they have water less than 6 hours a day when it is available. Water availability varies by season as well; 40 % of the sample said that piped water is less available during the winter than summer. - Dissatisfaction with the water supply service is high; 31 % of the respondents said that the quality of their water is poor. The other principal complaints are its high price (24 %) and distance from the house (22 %). Only 24 % said that they drink water directly from the tap; 76 % drink boiled water and 46 % consume water primarily in tea. The highest levels of complaints were recorded in Kazalinsk. In Aralsk, the rural and working settlements complained about the poor quality of water more frequently than the regional centers, which have better access to the Aralsk-Sarbulak water. Among those that complained about the poor quality of potable water, the majority were concemed about the muddiness and saltiness of the water. * The cost of coping with inadequate water supplies is high. Where piped water systems are unavailable or inoperable, people generally obtain water by tank trucks and store it in above-ground tanks. Although the official tariff for domestic water is 2 Tenge (US$.03) per cubic meter, water deliveries arranged by the urban or farm administration cost around 40 Tenge (US$.63) per tank (about 1.5 m3), and transport (petrol) costs an additional 60 Tenge (US$.95). Families who make their own arrangements pay as much as 280 Tenge (US$4.44) per truck, or 185 Tenge per cubic meter, 90 times the official tariff for domestic water. * The water sector needs institutional restructuring and tariff reforms to increase efficiency, decrease production costs and improve service, and to generate revenues by increasing customers and capturing a greater share of the costs consumers actually pay to improve operation and maintenance. In particular, tariffs for industrial and animal production have to be rationalized so as to support economic growth rather than constrain it. - 50 - * Throughout the proposed project area, both sanitation and hygiene practices are adequate, given the water situation, but not up to modem standards. The majority of respondents (52 %) admitted that they simply pour the wastewater directly on the ground; at best, 41 % discharge their wastewater into a cess pit in the yard near the house. Only 5 % of the families are connected to a central sewer system and 2 % are connected to a local sewer system. * Due to the environmental conditions associated with the Aral Sea crisis and the scarcity of safe water, only 40 % of the respondents said that their health was "good enough"; 37 % complained that the health of their family members was "not good"; and 6 % of the respondents said that the health of their relatives was poor. These findings are consistent with statements by the Director of the Regional Hospital in Kazalinsk, who cites poor water quality, especially the high concentration of nitrates, as a key factor in the deteriorated health status of the district, particularly: (a) The number of cases with umbilicord-related bleeding after birth has increased from 32 cases in 1991 to 79 cases in 1994. This condition is associated with the high salinity and nitrate content of drinking water. (b) For women of reproductive age, the morbidity rate of anemia has increased from 79 % in 1989 to 99 % in 1993. * In addition to its impact on human health, poor water quality in the project area adversely affects the health of livestock. Although other factors also constrain agricultural production (for example, inaccessible markets and low prices in relation to production costs), poor water quality and availability also constrain the production of livestock and related products. The main impacts of the inadequate water supply on animal health are: (a) The high salinity content of the shallow ground-water wells, which are the main source of drinking water for livestock, appears to cause them to suffer from salt-poisoning, kidney disease, and increased mortality rates. For example, sheep mortality rate has increased almost threefold from 136 per thousand cases in 1993 to 382 per thousand cases in 1994. (b) The high nitrate content of the water from the Syr Darya River (Kazalinsk District) is causing a reduction in hemoglobin in the blood (anemia), which weakens the immune system of animals and ultimately may cause death. The high content of nitrate also causes a lower rate of weight gain, thyroid dysfunction, arthritic conditions, and miscarriages. In addition, statistical data show that the number of livestock deaths related to metabolism malfunctioning has increased from 6,000 to 14,000 between 1993 and 1994. - 51 - Figure A: Livestock Losses in Kazalinsk District 40%3 { 35%- ---- ----- ---- ----- ----/---- ----- ---- ---- --- ->30% ------------------------------------- - 27M---- 16 25% --'------------------------------- ---- ---- 20 1 ~~~~~~~~~~~~~~~~20% i 20%0-/ ;4e/;----- i ~~14% l 15%- '-- - -2
Groupe de la Banque mondiale · Staff Appraisal Report
Kazakstan - Pilot Water Supply Project
Voir le document original
Le texte intégral est hébergé par l’organisation qui le publie. lawenc.com indexe les métadonnées et renvoie vers la source officielle.
Texte intégral
Informations clés
Organisation
Groupe de la Banque mondiale
Type de document
Staff Appraisal Report
Pays
Kazakhstan
Source
Banque mondiale