Indonesia - Second Sulawesi Urban Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-6739-IND MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN THE AMOUNT EQUIVALENT TO US$155 MILLION TO THE REPUBLIC OF INDONESIA FOR A SECOND SULAWESI URBAN DEVELOPMENT PROJECT October 17, 1996 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit = Indonesian Rupiah (Rp) (October 1995) US$1.00 = Rp. 2,260 Rp 1 million = US$442 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS APIP Annual Program Implementation Plan BAPPENAS National Development Planning Agency CAS Country Assistance Strategy DGCK Directorate General for Human Settlements (Cipta Karya) DPUK Kabupaten/Kotamadya Department of Public Works EJBUDP East Java/Bali Urban Development Project (Ln. 3304-IND) FIRR Financial Internal Rate of Return GOI Government of Indonesia ICB International Competitive Bidding IDC Interest During Construction IUIDP Integrated Urban Infrastructure Development Program KIP Kampung (neighborhood) Improvement Program LIDAP Local Institutional Development Action Plan MIIP Market Infrastructure Improvement Program NCB National Competitive Bidding O&M Operations and Maintenance PDAM Local Water Enterprise PJM Medium Term Expenditure Program PPIM Provincial Program Implementation Memorandum RAP Resettlement Action Plan REPELITA Five-Year Development Plan RIAP Revenue Improvement Action Plan SIJUDP Sulawesi-Irian Jaya Urban Development Project (Ln. 3340-IND) SLA Subsidiary Loan Agreement TKPP Urban Development Coordination Team FISCAL YEAR Government of Indonesia: April 1 - March 31 Provincial and Local Governments: April 1 - March 31 Water Enterprises: January I - December 31 FOR OFFICIAL USE ONLY REPUBLIC OF INDONESIA SECOND SULAWESI URBAN DEVELOPMENT PROJECT LOAN AND PROJECT SUMMARY Borrower: Republic of Indonesia Implementing The Directorate General of Human Settlements (Cipta Karya) in the Ministry of Public Works is Agencies: the executing agency. The provincial governments of North, Central, Southeast and South Sulawesi are the principal implementing agencies, with the participation of 40 local governments and their water enterprises. Beneficiaries: About 3.6 million urban residents in 41 towns and cities of 40 local governments of the four Sulawesi provinces Poverty: PTI: The project targets the four provinces of Sulawesi which have a higher incidence of poverty than the nation-wide average. The project's water supply and sanitation sub-projects will benefit the poor the most because it is they who are without access to clean, affordable water and waste disposal facilities. The urban neighborhood (kampung) and market improvement programs provide basic infrastructure services that will improve the standard of living of the urban poor. Amount: US$155 million equivalent Terms: Payable in twenty years including five years of grace, at the standard variable interest rate for currency pool loans Commitment Fee: 0.75% on undisbursed loan balances, beginning 60 days after signing, less any waiver Onlending Terms: From the loan proceeds, US$31 million equivalent would be onlent by the central government to the local governments and to the participating water enterprises, at an annual interest rate of 11.75%, for a term of 20 years including five years grace. Local governments and their water enterprises are fully responsible for the interest during construction. Subsidiary Loans will be denominated and repayable in Rupiah. Financing Plan: See Schedule A Economic Rate of 12% or more for water supply and drainage; not quantified for other components Return: Staff Appraisal Report: 15080-IND Map: IBRD No. 27075 Project ID No.: ID-PE-36053 Regional Vice President: Mr. Javad Khalilzadeh-Shirazi (Acting), East Asia and Pacific (EAP) Director: Ms. Marianne Haug, Country Department III, EAP Division Chief: Mr. Anupam Khanna, EA31N Staff: Messrs. Daniel Hoornweg, EA31N, and Heinrich Unger, ASTEN This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF INDONESIA FOR A SECOND SULAWESI URBAN DEVELOPMENT PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed loan to the Republic of Indonesia for the equivalent of US$155 million to help finance a Second Sulawesi Urban Development project. The loan would be at the standard variable interest rate for currency pool loans, with a maturity of 20 years, including five years of grace. A portion of the proceeds on the loan would be onlent to local governments and local water enterprises for up to 20 years, including up to five years of grace, with interest at 11.75 percent per annum. 2. Country/Sector Background. Indonesia's urban population exceeds 55 million and is growing at over 5% per year, more than twice the overall national population growth rate. About 80 million, or 40% of Indonesians will live in cities by the year 2000. Average incomes in urban areas have risen substantially over the past decade- however income distribution remains relatively unequal and in 1990, over 17% of urban dwellers were estimated to live in 'absolute" poverty based on their expenditure levels. 3. The problems surrounding low incomes are exacerbated by deficiencies in basic services and degraded environmental conditions. Country-wide, only about 20% to 25% of urban households have direct access to piped water supply. Another 15% buy drinking water from vendors or standposts, and the rest rely on shallow wells and sometimes on surface water courses. Surface water courses in urban areas are usually polluted due to inadequately treated wastewater. Only about 40% of urban households have access to adequate sanitation facilities. In the larger cities, inadequate industrial water supply and liquid and solid waste disposal are serious problems. To meet the Government of Indonesia's (GOI) service and equity objectives, more investment is needed in local or tertiary systems in poorly served urban areas. Furthermore, a substantial backlog prevails in the maintenance of facilities resulting in decreased productivity of the infrastructure. 4. The Sulawesi-Irian Jaya Urban Development Project (SIJUDP) (Ln. 3340-IND), approved in June 1991, is the first effort to provide an urban infrastructure and local services delivery program in nine major urban areas of the four provinces of Sulawesi (Northern Sulawesi, Central Sulawesi, Southern Sulawesi and Southeastern Sulawesi). It reflects the six key priority areas of the GOI Urban Policy Statement and related action plan. The six themes are: (a) decentralizing urban services delivery to local governments; (b) preparing and implementing local urban improvement programs within the framework of the GOI's Integrated Urban Infrastructure Development Program (IUIDP); (c) developing local government institutional capacities to manage and sustain urban services delivery; (d) strengthening local governments' capacity to mobilize resources; (e) improving the framework for financing urban infrastructure; and (f) rationalizing the procedures for coordination and consultation among the agencies involved. The ongoing operation is being implemented satisfactorily. Completion of major civil works and institutional strengthening assistance, with minor additional new works will carry it through GOI FY96-97. Completion is scheduled for December 1996 and the loan of US$100.0 million is expected to be fully disbursed. The Second Sulawesi Urban Development Project has been requested by GOI as an extension and expansion of the ongoing project. 2 5. Project Objectives. The main objective of the proposed project is to improve the delivery of urban infrastructure services by local governments on a sustainable basis. The more specific operational objectives of the project include: (a) to improve the provision of urban services by financing appropriate economic investments in physical infrastructure (roads, water supply, sanitation, drainage, solid waste management, markets, and transport terminals); (b) to strengthen operations and maintenance activities for urban services, and support improved planning, programming, budgeting, financial management and local revenue generation by local governments; and c) to improve urban environmental management and reduce local environmental impacts. Three other general objectives, or goals, are to: (i) improve general resettlement practices relating to resettlement of people displaced by infrastructure development; (ii) better incorporate public and community participation in local government operations; and (iii) enhance and rationalize the role of the private sector in assisting local governments to provide urban services. 6. Performance Indicators. The objectives set out above require a broad set of indicators to truly measure the project's achievements and long-term impacts. In close consultation with Bappenas and the executing agencies, five groups of performance indicators will be used: (i) services performance; (ii) poverty alleviation; (iii) urban cnvironment,; (iv) sustainability of development; and (v) social impact. Performance monitoring would not only cover physical targets but also try to evaluate and measure the quality and efficiency of local government's operations and services. The latter would extend to non-project related areas as well, and local surveys - similar to the real demand surveys employed during preparation - are proposed to be used to gauge the public's satisfaction with the public services provided. 7. Project Description. The proposed Second Sulawesi Urban Development Project expands on the ongoing SIJUDP. The proposed project will help through a programmatic approach to reduce the backlog of urban infrastructure investments by providing assistance to a total of 40 local governments and their water enterprises in Sulawesi. The project has two main components: (a) sub-project investments in urban planning, housing, water supply, human waste/sanitation, drainage and flood control, urban roads, solid waste management, neighborhood and market improvement programs (KIP/MIIP), and markets and transport terminals, including engineering services for detailed design and supervision (US$250 million or 92% of the total project cost); and (b) local government development through implementation support, to improve municipal management, local financial management and revenue generation, and to strengthen partnerships between local governments and the private sector and general community (US$11.4 million or 4.2% of the total project cost). Incremental operations and maintenance (O&M) on existing and new infrastructure is included in the program costs, but no Bank financing has been proposed. Schedule A shows the project and program costs, and the financing plan; Schedule B shows the proposed procurement and disbursement arrangements and schedule by Bank FY; Schedule C shows the time taken to prepare 3 the project; Schedule D gives the status of Bank Group operations in Indonesia; and Schedule E presents the "Indonesia at a Glance" tables. Project Implementation 8. Implementing and Executing Agencies. The four provinces of Sulawesi have been designated as the principal implementing agencies for the proposed project. For central GOI operational and technical coordination and oversight, the Directorate General for Human Settlements (Cipta Karya or DGCK) of the Ministry of Public Works has been assigned the role of executing agency, with the inter-ministerial coordination team for urban development (TKPP) chaired by BAPPENAS (National Development Planning Agency) providing policy guidance and sectoral oversight. Local governments participating in the project will have primary responsibility for implementing and monitoring all project-related activities in their jurisdiction. As these decentralized leadership arrangements have not been previously attempted, all parties have agreed to prepare a Provincial Program Implementation Memorandum (PPIM) which will document the respective roles, responsibilities and procedures for project implementation. This will take the form of a memorandum of understanding to be signed by the chairperson of TKPP, the Director General of Cipta Karya and the Governors of the respective Sulawesi Provinces. 9. The implementing agencies for the various subcomponents are as follows. The local water enterprises (PDAMs) will be responsible for construction, operations and maintenance of the water supply subcomponent. The construction, maintenance and supervision of urban roads are the responsibility of the Roads and Bridges section of the local Public Works Agency (DPUK), assisted by provincial and national public works offices for larger highways. The drainage sub- section of DPUK has specific responsibility for drainage and flood control. The cleansing agencies of the local governments are responsible for activities under the solid waste management subcomponent. The on-site sanitation program in all cities will be implemented by the local government with the community, using municipal staff as project mangers. Sludge collection and disposal services will be provided to the extent possible by private operators under the supervision of the cleansing department in each local government. DPUK will be responsible for implementing the KIP, and the market management agency in each city will be responsible for MIIP activities. 10. Project Implementation Plans. Annual Program Implementation Plans (APIPs) will be drawn up between the four Sulawesi provinces, the local governments participating in the project and their PDAMs to confirm the essential understandings and commitments based upon the medium-term expenditure program (PJM), financing plans, Revenue Improvement Action Plans (RIAPs), Local Institutional Development Action Plans (LIDAPs), and sound criteria for land acquisition and resettlement. These will be expressed as targets and performance indicators for each implementing unit. The subproject definition, budgeting and supervision arrangements for the implementation of the Project will be summarized in the APIPs prepared by each participating local government and detailed for each subproject in annual Project Memoranda attached to the APIP. These Project Memoranda provide detailed budget proposals for every program component, covering all concerned institutions at every government level (including the water enterprises), showing each contract package, necessary O&M provisions, etc., with the proposed financing sources. The draft project memoranda will form the inputs into the annual budget preparation cycle which commences with the local and provincial level consultation meetings, through which the necessary funding allocations will be secured. 4 11. Project Sustainability. The project design and implementation arrangements involve the local governments in all phases of project preparation through the IUIDP process. The promotion of ownership through financial contributions from the municipalities and the water enterprises, more participation in implementation by the project beneficiaries, and increased local resources for increased levels of O&M will all contribute to project sustainability. 12. Lessons Learned from Previous Bank Involvement. The Bank has financed 13 completed and 10 ongoing urban and water supply projects in Indonesia since 1974, for more than sixty local governments and many of their water enterprises. Bank experience confirms that: (a) limited planning and implementation capacity at the central government level and difficulties inherent in central provision of essentially local services reduce the efficiency of mass delivery programs; (b) capacity building at the local level is a long-term process that needs to be accompanied by structural and institutional strengthening to achieve an increase in local responsibility and accountability; and (c) to develop such responsibility and accountability, central-local financial relations need to provide more local government autonomy and enable private sector involvement. A study carried out by the Operations Evaluation Department (OED) in September 1995 entitled, indonesia: Impact Evaluation Report, Enhancing the Quality of Life in Urban Indonesia - The Legacy of Kampung Improvement Program" (Report No. 14747-IND) concluded that under conditions of rapid economic development, targeted urban sector improvement programs can have a very positive impact on low-income areas, and that those impacts can be achieved at a low cost of investment that reaps high economic rates of return. The proposed project design takes these lessons into account. 13. Several aspects of the Bank-wide achievements of completed urban projects have been important in shaping the proposed project as well as others in the pipeline for Indonesia. Among those discussed in OED's two-decade retrospective (Report No. 13117), the following may be highlighted: (a) success in achieving cost-effective service delivery and low cost infrastructure stock: (b) the efficiency of repeater projects to sustain and diffuse institutional innovations; (c) relatively poor track record of institutional development components; (d) harm caused to institutional and cost recovery goals by an excessive emphasis on physical targets; and (e) necessity of according explicit attention to environmental implications, integrating both social and technical aspects. 14. Rationale for Bank Involvement. The Bank's 1995 Country Assistance Strategy (CAS) for Indonesia, discussed in March 1995, and its Progress Report discussed on June 4, 1996, highlight the need for improving public service delivery to the economy and to the poor, greater decentralization of responsibilities, and improved environmental management. In the urban sector, the Bank, therefore. supports the integrated urban development concept and enhancing coordination of planning, implementation and supervision among all levels of government, in order to improve the delivery of urban services and enable local governments to assume greater responsibility for urban management. The proposed project would help GOI meet these needs by emphasizing: the decentralization of responsibility for project management and implementation; the integration of environmental considerations in urban development management; the strengthening of local government institutions and human resources for urban management; the allocation of services, priced at an affordable level to lower income groups and under-serviced areas, as well as new development areas: community participation in urban investment programs; and the generation of resources for infrastructure investment. 5 15. The thrust of the project is also consistent with the poverty alleviation and environmental improvement objectives of the CAS as the project includes targeted interventions designed to improve the standard of living and the quality of the environment in the poorer kampung areas of the project towns. An important GOI objective for the infrastructure sector overall is to enhance the role of the private sector in the provision of public services. The Bank has prepared framework papers, organized workshops and is engaged in active policy dialogue in several infrastructure subsectors among which solid waste management and water supply are particularly relevant for urban development. The proposed project includes 'bands on" technical assistance to increase the contracting out of services in a manner commensurate with the size and economic base of Sulawesi towns and the stage of evolution of their local administrations. 16. During the past two decades, the Bank has provided critical support and strategic input to the evolving GOI urban policy agenda. The ongoing SIJUDP and the East Java/Bali Urban Development Project (Ln. 3304-IND) represent a radical departure from previous urban operations in an attempt to operationalize Bank support to implementing the GOI urban policy. The experience of the SIJUDP and other recent decentralized urban development projects in Indonesia has demonstrated the capabilities - albeit still limited - of local and provincial governments to prepare and implement integrated infrastructure improvement programs. The proposed operation provides an opportunity for GOI and the Bank to address some of the continuing local services deficits and include additional towns in the program. Local capacity building through strong implementation support will address the identified institutional weaknesses especially at the local level. The Bank's continued participation in the refinement of GOI's urban strategy is a cornerstone of the Bank's CAS and is essential to its success. 17. Agreed Actions. During negotiations, agreement was reached with the GOI and the Sulawesi Provinces on the following matters: (a) the model APIP between the provincial governments and the participating local governments and PDAMs, and the use of performance indicators as progress reporting, evaluation and management tools; (b) standard SLA documents for participating local governments and participating PDAMs, (c) draft of the PPIM, including procedures for the annual review process; (d) the Director General for Budget will authorize all payments to contractors from the Special Account to be made through the KPKN Treasury offices at the provincial level (with the exception of any technical assistance contracts procured by central GOI agencies); (e) the consolidated project accounts, including the Special Account and statements of expenditure, as well as the overall accounts of the participating PDAMs, will be audited annually by independent auditors in a manner satisfactory to the Bank and that the audited accounts would be submitted to the Bank no later than nine months after the end of each fiscal year, commencing with GOI FY 96/97; (f) the Provincial Inspectorates General (Ir. Wil Prop) will carry out annual technical audits during project implementation commencing not later than October 31, 1997; (g) proposed arrangements and schedules for project launch workshops as well as for supervision and annual implementation reviews by October 31 of each year- (h) GOI will monitor the O&M expenditures of the participating local governments and participating PDAMs for each year as well as the proposed O&M budget for the following year, report on them to the Bank not later than July 31 of each year and discuss them with the Bank as a part of the annual review; (i) final draft Governor's decrees (SK) on project land acquisition and establishing Resettlement Guidelines; (j) participating local government and participating PDAM borrowing commitments and that such borrowings meet the agreed financial criteria of the Bank and GOI Ministry of Finance; (k) tariff adjustments necessary to meet the agreed financial viability criteria of PDAM will be completed on or before September 30, 1997 and every two years thereafter; and (1) detailed arrangements and criteria for the proposed water supply schemes. 6 The conditions of Board presentation were the following: (a) submission to the Bank of finalized terms of reference and consultants' shortlist, acceptable to the Bank, for the agreed priority implementation support; and (b) finalization of the Governor's Decrees on Resettlement including implementation guidelines and model BupatilWalikotamadya Decrees on Resettlement, taking into account the revisions agreed during negotiations, and submission to the Bank of the signed Decrees. The following item is a condition of loan effectiveness: receipt by the Bank of the four PPIM, acceptable to the Bank, and duly approved by all relevant authorities and executed by GOI and the Provinces. Disbursements for each participating local government and participating PDAM will be conditional on signed SLA and on approval by the Bank of the following: (a) the first APIP for each participating local government and participating PDAM, acceptable to the Bank; (b) satisfactory documentary evidence confirming that the PPMUs have been established; and (c) the first SLA, acceptable to the Bank, for each participating local government and/or PDAM with borrowing included in their agreed financing plan. 18. Poverty Category. This project is part of the program of targeted interventions. A disproportionately large percentage of the urban population in Sulawesi still lives in poverty. Drainage, kampung improvement, public water tap construction and market improvements to be made under the proposed project would be especially beneficial for this population. Experience has shown that it is mainly the urban poor who are affected by frequent flooding because they must settle in the most marginal, low-lying areas or along drainage channels and near river banks that often overflow. Public taps would provide safe, readily available water to poor families lacking house connections and living in water-stressed areas. The improved environmental conditions in markets will directly benefit the low-income groups who frequent markets. Finally, the improved market environment may attract customers from higher income brackets, thus alleviating poverty by creating more business opportunities for the vendors who are mostly urban poor. 19. Environmental Aspects. The proposed project has been classified as environmental category 'B"under the Bank's procedures, since the negative impacts are expected to be minor. A regional environmental assessment, which has been deemed 'best-practice', has been prepared to identify the main environmental problems, many of which are common to most project towns. The project will likely produce an overall net positive environmental impact. Works under the urban roads subcomponent would relieve congestion, resulting in reductions in air and noise pollution. The water supply component will improve the availability of clean drinking water. Under the solid waste management subcomponent, solid waste dumping and accumulation will be reduced and dumping areas will be developed as controlled disposal sites to minimize leachate and runoff The sanitation component will improve the urban environment through improved sanitation and through sludge collection and treatment facilities resulting in reduced health risks from contaminated water. Improvements of drainage canals will help control flooding and lessen the potential for unsanitary pools of water where mosquitoes might breed. 20. Social Aspects. As this project involves a programmatic approach, a general approach to resettlement practices has been developed. The preparation process for the proposed project has included efforts both to avoid or minimize land and resettlement needed for the subprojects and only one proposed sub-project requires a full Resettlement Action Plan (RAP). As noted above, signed Governors' Decrees issuing on Resettlement Guidelines and draft implementation 7 instructions, and a sample local government decree for preparation of subproject RAPs in accordance with the Guidelines, were a condition of Board Presentation. The Governors' decrees were based on a '1nodel"provincial policy framework - developed over the last year by East Java Province in close consultation with the Bank - to provide operational guidance to local governments on land acquisition, resettlement and compensation needed for project implementation and to bridge the gap between the Indonesian legal framework and Bank policy (OD 4.30). 21. Program Objective Categories. The project relates to three of the Bank's program objectives categories: environmentally sustainable development (50%); poverty reduction and human resource development (30%); and private sector development (20%). The infrastructure investments, to be executed under the first component were subject to environmental screening for potential impacts to allow for environmentally sustainable development. The provision of water, sanitation and drainage infrastructure and the kampung improvement components will help alleviate poverty. The implementation support component will develop human resource potential. The partnership building component will promote private sector participation opportunities that have been preliminarily identified in each local government program and will be stimulated during program implementation. 22. Participatory Approach. GOI's commitment to decentralize the planning and provision of urban infrastructure and services reflects the desire to make the development process more responsive to the needs of civil society in Indonesia. This desire was reflected in real demand (community) surveys carried out during project preparation in seven project towns. The implementation support component of the proposed project also incorporates extensive community participation through activities such as community environmental education, annual demand surveys, and information sharing between communities. 23. Project Benefits. Consideration of alternatives are required by the sub-sectoral technical memoranda issued by GOI for preparation of IUIDP proposals by local governments. Alternatives were analyzed with varying technical criteria depending on the sub-sector and size of the proposed investment. For large subprojects in water supply and drainage, standard analyses (FIRR and EIRR respectively) were carried out. Least-cost alternative analyses were carried out for subprojects in solid waste collection, human waste/sanitation, kampung improvement programs and market infrastructure improvement programs. Simple prioritization of extension to service coverage from existing systems based on population served, poverty conditions and related criteria was carried out for smaller subprojects. The main benefits of the water supply subcomponent are increased availability of clean, piped water at reduced costs. Net present values and financial internal rates of return (FIRRs) were calculated for medium and large water supply and drainage subprojects, with a 12% rate of return used as the minimum rate. The FIRRs of selected subprojects generally fall between 13% to 18%. The benefits of the urban roads subcomponent are improved accessibility, savings in vehicle operating costs and increased land and property values. The returns of such subprojects are typically much higher than the minimum of 12%. The benefits of the drainage/flood control subcomponent are reduced flood damage, traffic disruption, increased land values and improved health. For the solid waste management subcomponent, the benefits arising are cleaner air and water, and more efficient collection and treatment of waste. The benefits of the sanitation and sewerage subcomponent are improved health and reduced ground water contamination. The health and environmental benefits of these two subcomponents 8 are difficult to quantify. The benefits of the KIP/MIIP subcomponent are increased standards of living for residents. At about 6% of total project costs, the investments are relatively low and far exceeded by benefits although difficult to quantify, as confirmed by the OED review of the GOI KIP program (Report 14747-IND). 24. Risks. The proposed project design acknowledges that substantial risks are involved for both the physical implementation of infrastructure improvements and the intended institutional development of provincial and local governments. For the physical infrastructure investments supported by the project, the most significant risks include inappropriate investment choices by local governments, inadequate inspection and/or financial controls resulting in poor quality or incomplete works, and failure to implement proposed works due to budget shortages, land acquisition problems, or other obstacles. There is also a serious risk involving the pace of required institutional development, for decentralized systems of management, finance, manpower, and related processes; the rate of capacity development is difficult to predict and may not be adequate for full and timely achievement of all project activities in all local governments and their PDAMs. The ability of the four provincial governments to further strengthen their capacity to perform their assigned program management and intermediation functions is also a substantial general risk factor for the effectiveness of the whole program. This is reflected through some specific risks associated with project implementation: limited institutional capacity to manage implementation, delays in counterpart funds for the project due to budget constraints, inability of local governments to meet their revenue targets, and delays caused by protracted procurement procedures for works, material/equipment and consultants. Communication and coordination of project implementation is made more difficult by the large number of involved local agencies. 25. In response to these risks, the project will focus on building decentralized implementation capacity through competent and experienced implementation support teams which will give hands-on advice to encourage learning-by-doing. The physical implementation of the project will be greatly assisted by improved transparency and accountability provided by the PPIM and APIPs clarifying the roles and responsibility for each implementing unit. Project managers would be trained and consultants would be appointed to help with design, implementation and supervision of the various components of the project, and program management support will be provided to each provincial government, as well as to the local governments by the roving support teams. The financing plans have been endorsed by the agencies that will provide the domestic funding. Standard bidding documents and procedures have been discussed with the local agencies and to the extent possible subprojects have been packaged together for tendering, so as to attract larger contractors who generally deliver better quality works with less technical supervision. The Bank has planned sufficient supervision resources, especially in the early years, for early detection and solution of problems. 26. Recommendation. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank, and I recommend that the Executive Directors approve it. James D. Wolfensohn President By Gautam S. Kaji Washington, D.C. Attachments October 17, 1996 9 Schedule A REPUBLIC OF INDONESIA SECOND SULAWESI URBAN DEVELOPMENT PROJECT ESTIMATED PROJECT COSTS AND FINANCING PLAN PROJECT COST SUMMARY Million Rupiahs Million US$ % % of Total % of SUBSECTOR Local Foreign Total Local Foreign Total Foreign Base Cost Total Project KIP/MIIP/Improvements Base Cost 24,8304 13,3702 38,2006 1099 592 16.90 350% 74% 6.2% Water Supply Base Cost 55,622.4 29,9505 85,5729 2461 1325 3786 350% 16.5% 139% Sanitation Base Cost 10,732.2 5,778.9 16,511.0 4.75 2.56 7.31 350% 32% 27% Solid Waste Base Cost 27,0982 25,923.7 53,021.9 11 99 11 47 2346 489% 102% 86% Town Drainage Base Cost 73,9356 39,811.5 113,747.0 32.71 17.62 5033 350% 21 9% 185% Terminals Base Cost 11,789.1 6,348.0 18,137 1 522 281 8 03 350% 35% 3 0% Town Roads Base Cost (incl UPR) 75.614.3 49.809.5 125,423 8 3346 22.04 55.50 39.7% 24 2% 204% Total Base Cost (Physical Only) 279,622.0 170,992.3 450,614.3 123.73 75.66 199.39 37.9% 86.9% 73.3% Engineering Services 20,226 5 00 20,2265 895 0.00 895 0.0% 39% 3.3% Training 4.1279 00 4,1279 1.83 0.00 1.83 00% 08% 07% Implementation Support Services 14,1676 5.181.8 19,3493 6.27 2.29 8.56 26 8% 37% 31% PPN (Taxes) 24,0110 00 24,011.0 10 62 0.00 1062 00% 46% 39% Total Base Cost 342,154.9 176,174.0 518,328.9 151.40 77.95 229.35 34.0% 100.0% 84.3% Physical Contingencies 27,9622 17,099.2 45,061.4 1237 757 1994 379% 8 7% 7 3% Price Contingencies 32,880 1 18,361.0 51,241 0 14.55 812 22.67 35.8% 99% 83% Total Project Cost 402.997.2 211.634.2 614.631.4 178.32 93.64 271.96 34A% 118.6% 100.0% Land Acquisition 17,149.7 00 17.1497 7.59 000 7 59 0.0% 33% 2.8% Studies & AMDAL 6,6157 00 6,6157 2.93 0.00 2.93 00% 1 3% 1.1% Overheads 20,6875 0.0 20.6875 9.15 0.00 9.15 00% 40% 34% Incremental O&M (incl PPN) 72,841.3 39,2222 112,0635 3223 1735 49.59 350% 21 6% 18 2% Total Proaram Cost 520,291. 25,856.5 71,14.8 230.22 111.00 341.22 32.5% 148.8% 125.5% FINANCING PLAN (ind Incremental O&M Costs) Municipal Components & PDAM Components Total Implementation Support Million Rp Million US $ Million Rp Million US $ Million Rp Million US $ Central Government 94,3960 41 8 151% 00 00 00% 94.3960 41 8 122% Provincial Governments 38.926 1 172 6.2% 00 00 00% 38,926.1 172 50% Local Governments 198,0172 876 317% 33,8260 150 231% 231,843 2 1026 30.1% (of which for Incremental O&M) (50,3648) (223) (8 1%) PDAMs 00 00 0.0% 55,6825 246 380% 55,6825 246 72% (of which for Incremental O&M) (44,554 2) (197) (30.4%) IBRD 293,365 4 129.8 47.0% 56.9346 252 38.9% 350,300.0 155.0 45 4% Total Financing 624.704.7 276A 146A43.1 64.8 100.0% 771147.@ 341.2 100.0% 10 Schedule B Page 1 of 2 REPUBLIC OF INDONESIA SECOND SULAWESI URBAN DEVELOPMENT PROJECT PROCUREMENTARRANGEMENTS (US$ million) Expenditure Category ICB NCB Other a/ N.B.F. b/ Total Cost Civil Works 0.0 183.3 9.8 19.3 212.3 (0.0) (103.9) (5.5) (109.4) Goods 11.8 11.6 3.1 1.4 27.9 (11.8) (11.6) (3.0) (26.4) Engineering Services 9.8 9.8 (9.8) (9.8) Training 2.0 2.0 (2.0) (2.0) Implementation Support Services 9.4 9.4 (7.5) (7.5) Taxes & Duties 10.6 10.6 Total Project Cost 11.8 194.9 34.0 31.3 272.0 (11.8) (115.4) (27.9) (155.0) Land 7.6 7.6 Studies 2.9 2.9 Local Management & Administration 9.2 9.2 Incremental O&M 49.6 49.6 Total Program Cost 11.8 194.9 34.0 100.6 341.2 (11.8) (115.4) (27.9) (155.0) Note: Figures in parentheses are amounts financed by IBRD. a' Includes national shopping and selection of consultants following IBRD guidelines. b/ Not Bank-financed. Numbers may not add up due to rounding. 11 Schedule B Page 2 of 2 REPUBLIC OF INDONESIA SECOND SULAWESI URBAN DEVELOPMENT PROJECT Disbursements by Category and by Bank FY Category Loan Amount Disbursement Percentages 1) Civil works for Sub- projects financed under SLAs: 90% (a) North Sulawesi 3,300,000 (b) Central Sulawesi 4,600,000 (c) South-East Sulawesi 5,000,000 (d) South Sulawesi 13,300,000 2) Other Civil Works: 45% (a) North Sulawesi 1 1,200,000 (b) Central Sulawesi 6,300,000 (c) South-East Sulawesi 11,900,000 (d) South Sulawesi 44,900,000 3) Goods for Sub-projects, including specialized vehicles, financed under SLAs: 90% (a) North Sulawesi (b) Central Sulawesi 300,000 (c) South-East Sulawesi 400,000 (d) South Sulawesi 300,000 2,100,000 4) Other goods, including specialized 100% of foreign expenditures, 100% of local expenditures vehicles: (ex-factory cost) and 65% of other items procured locally (a) North Sulawesi 2,500,000 (b) Central Sulawesi 1,700,000 (c) South-East Sulawesi 1,500,000 (d) South Sulawesi 15,000,000 5) Engineering Services: 100% (a) North Sulawesi 1,400,000 (b) Central Sulawesi 1,400,000 (c) South-East Sulawesi 1,400,000 (d) South Sulawesi 5,600,000 6) Training: 100% (a) North Sulawesi 300,000 (b) Central Sulawesi 300,000 (c) South-East Sulawesi 300,000 (d) South Sulawesi 1,100,000 7) Implementation Support 7,500,000 80% a/ Services 8) Unallocated 11,400,000 Total 155,000,000 Note: a! Implemented and managed by central government agencies. 1997 1998 1999 2000 2001 Annual 7,440,000 44,950,000 50,380,000 29,760,000 22,470,000 Cumulative 7,440,000 52,390,000 102,770,000 132,530,000 155,000,000 12 Schedule C REPUBLIC OF INDONESIA SECOND SULAWESI URBAN DEVELOPMENT PROJECT Key Processing Events (a) Time taken to prepare the project: 2 years (b) Staff who prepared the project: See below (c) First Bank mission: December 1994 (d) Appraisal mission departure: June 29, 1995 (e) Negotiations: July 15-16, 1996 (f) Planned date of effectiveness: November 1996 (g) List of relevant PCRs/ICRs/PPARs: Loan No. Project Date Report No. 1040-IND Jakarta Urban Development 06/03/83 4620 (PPAR) 1049-IND Five Cities Water Supply 06/10/86 6256 (PPAR) 1336-IND Second Urban Development Project 07/15/85 6329 (PPAR) 1653/1972-IND Third & Fourth Urban Dev. Projects 05/24/90 8583 (PCR) 1709-IND Second Water Supply Project 04/30/90 8622 (PPAR) 2275-IND East Java Water Supply Project 12/20/91 10226 (PCR) 2275-IND East Java Water Supply Project 07/20/92 10853 (PPAR) 2408-IND Fifth Urban Development Project 12/24/92 11501 (PCR) 2816-IND Urban Sector Loan 12/24/92 10388 (PCR) 2236-IND Jakarta Sewerage & Sanitation Proj. 06/30/93 12150 (PCR) 2817-IND Regional Cities Transport 12/29/95 15245 (PCR) This report is based on the findings of an appraisal mission which took place from June 30 to August 3, 1995. The appraisal mission comprised M/M. Heinrich Unger, Sr. Municipal Engineer and Task Manager (ASTEN); Daniel Hoornweg, Municipal Environmental Engineer, Keiichi Tamaki, Financial Specialist (EA3IN); Jeffrey Lewis, Economist, Bruce Harris, Anthropologist (EA3CO); Ellen Schaengold, Sr. Sociologist (ASTHR); Muhammad Nuch, Urban Operations Officer (RSI); Teresa Genta Fons (LEGEA); Ian Wetherill, Financial Analyst, Douglas Martin, Environmental Specialist, John Bull, Municipal Engineer, Kastorius Sinaga, Sociologist (consultants). Mr. Anupam Khanna, Division Chief, EA3IN, and Ms. Marianne Haug, Director, EA3, have endorsed the project. MOP Schedule D Run Date: 10/16/96 IBRD Loans and IDA Credits in the Operations Portfolio Status of Bank Group Operations in Indonesia Difference Original amount in US$ millions between expected Project Loan or Fiscal and actual ID Credit No. Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursementsa Number of Closed Loans: 147/ Credits: 48 Active Loans ID-PE-3923 L2932 1988 GOl Jabotabek Urban Transport 150.00 7.83 7.83 ID-PE-3946 L3112 1990 GOI Public Works Institutional Dev. & Tmg 36.10 0.01 0.01 ID-PE-3873 L3158 1990 GOI Second Secondary Education 154.20 25.24 25.24 ID-PE-3973 L3182 1990 GOI Third Telecommunications 350.00 37.50 23.23 60.73 ID-PE-3960 L3209 1990 GO Gas Utilization 86.00 42.53 42.53 ID-PE-3868 L3219 1990 GOI Second Jabotabek Urban Development 190.00 33.07 32.11 ID-PE-3977 L3246 1991 GOI Third Jabotabek Urban Development 61.00 21.64 20.36 ID-PE-3959 L3282 1991 GOI Fertilizer Restructuring 221.70 0.24 10.71 8.05 ID-PE-3981 L3302 1991 GO Provincial Irrigated Agriculture Dev. 125.00 20.50 22.70 43.20 ID-PE-3943 L3304 1991 GOI East Java/Bali Urban Development 180.30 28.01 28.01 ID-PE-3912 L3305 1991 GOI Yogyakarta Upland Area Development 15.50 3.51 3.23 ID-PE-3922 L3340 1991 GOI Sulawesi-Irian Jaya Urban Development 100.00 11.65 8.87 ID-PE-3975 L3349 1991 GOI Power Transmission 275.00 103.40 1924 117.14 ID-PE-4002 L3385 1991 GOI Technical Assistance for Infrastructure 30.00 11.33 11.33 ID-PE-3928 L3402 1992 GO] Agricultural Financing 106.10 54.03 48.73 ID-PE-3966 L3431 1992 GOI Third Non-Formal Education 69.50 14.17 2.47 ID-PE-3940 L3448 1992 GOf Primary Education Quality Improvement 37.00 21.20 I1.90 ID-PE-4012 L3454 1992 GOI BAPEDAL Development 12.00 2.16 0.66 ID-PE-3860 L3464 1992 GO[ Treecrops Smallholder 87.60 46.19 20.09 ID-PE-3997 L3482 1992 G01 Fourth Telecommunications 375.00 222 24 42.24 [D-PE-3949 L3490 1992 Go Third Kabupaten Roads 215.00 5.06 5.06 ID-PE-3969 L3496 1992 GOI Primary School Teacher Development 36.60 15.34 10.04 ID-PE-3916 L3501 1992 GO Suralaya Thermal Power 423.60 232.21 13.11 ID-PE-3970 L3526 1993 GOI Financial Sector Development 307.00 39.81 45.14 84.95 ID-PE-3914 L3550 1993 GO Third Community Health & Nutrition 93.50 50.63 7.13 ID-PE-4006 L3579 1993 GoI E. Indonesia Kabupaten Roads 155.00 41.82 17.81 Page 1 of 3 Difference Original amount in USS millions between expected Project Loan or Fiscal and actual ID Credit No. Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursementsa ID-PE-4009 L3586 1993 GOI Integrated Pest Management 32.00 23.62 13.12 ID-PE-3999 L3588 1993 GOI Groundwater Development 54.00 36.53 2.73 ID-PE-4018 L3589 1993 GOI Flores Earthquake Reconstruction 42.10 8.96 8.96 ID-PE-4007 L3602 1993 GOI Cirata Hydroelectric Phase II 104.00 78.51 52.71 ID-PE-3990 L3629 1993 GOI Water Supply & Sanitation for Low Income 80.00 57.70 22.70 ID-PE-3985 L3658 1994 GOI National Watershed Mgmt and Consvation 56.50 49.37 5.07 ID-PE-3945 L3712 1994 GOI Second Highway Sector Investment 350.00 244.10 74.10 ID-PE-3952 L3721 1994 GOI Skills Development 27.70 22.80 17.85 ID-PE-3998 L3726 1994 GOI Surabaya Urban Development 175.00 152.34 54.24 ID-PE-4020 L3732 1994 GOI Fifth Kabupaten Roads 101.50 56.68 -2.81 ID-PE-4010 L3742 1994 GOI Dam Safety 55.00 45.92 8.52 ID-PE-3890 L3749 1994 GO Semarang-Surakarta Urban Development 174.00 136.27 22.37 ID-PE-4017 L3754 1994 GOI University Research for Graduation Study 58.90 47.60 6.20 ID-PE-3937 L3755 1994 GOI Integrated Swamps 65.00 53.47 6.22 ID-PE-3910 L3761 1994 GOI Sumatera & Kalimantan Power 260.50 244.36 43.86 ID-PE-3954 L3762 1994 GOI Java Irrigation Improvements and Wtr Resource 165.70 137.29 21.49 ID-PE-3984 L3792 1995 GOI Land Administration 80.00 72.66 8.64 ID-PE-4019 L3801 1995 GO Second Accountancy Development 25.00 22.14 9.94 ID-PE-3988 L3825 1995 G01 Second Professional Resource Development 69.00 52.85 -0.16 ID-PE-3979 L3845 1995 GOI Second Rural Electrification 398.00 380.29 46.63 ID-PE-3951 L3854 1995 GO Kalimantan Urban Development 136.00 115.77 25.27 ID-PE-3972 L3886 1995 GOI Second Agriculture Research Management 61.00 61.00 ID-PE-3968 L3887 1995 GOI Book & Reading Development 132.50 130.22 -2.24 ID-PE-34891 L3888 1995 GOI Village Infrastructure 72.50 39.37 5.63 ID-PE-4001 L3904 1995 GO Telecommunications Sector Modernization 325.00 325.00 ID-PE-3965 L3905 1995 GOI Fourth Health 88.00 86.72 -1.25 ID-PE-39754 L3913 1995 GOI Second Technical Assistance for Infrastructure 28.00 28.00 ID-PE-3978 L3972 1996 GOI Industrial Technology Development 47.00 46.00 3643.45 ID-PE-4021 L3978 1996 GO[ Second Power Transmission and Distribution 373.00 373.00 ID-PE-4003 L3979 1996 GOI Second Teacher Training 60.40 59.60 5.65 ID-PE-39643 L3981 1996 GO STD/AIDS 24.80 24.30 1.50 ID-PE-4008 L3984 1996 GOI Nusa Tenggara Agriculture Development 27.00 26.20 1.30 ID-PE-4011 L4007 1996 GO Sulawesi Agriculture Area Development 26.80 26.80 0.75 ID-PE-4014 L4008 1996 GOI Kerinci Seblat ICDP 19.10 19.10 ID-PE-39312 L4017 1996 GOI Second E. Java Urban Development 142.70 142.70 14.00 ID-PE-41896 L4030 1996 GOI Human Resource Capacity Building 20.00 20.00 0.51 ID-PE-37097 L4042 1996 GOI E. Java Junior Secondaraya Education 99.00 99.00 ID-PE-4004 L4043 1996 GOI Higher Education Support 65.00 65.00 1.50 Page 2 of 3 Difference Original amount in US$ millions between expected Project Loan or Fiscal and actual ID Credit No. Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursements' ID-PE-4016 L4054 1996 GOT Strategic Urban Roads 86.90 86.90 ID-PE-3987 L4062 1997 GOI C. Indonesia Secondary Education 104.00 104.00 ID-PE-41894 L4095 1996 GOI Sumatra Secondary Education 98.00 98.00 ID-PE-40521 L4100 1997 GOl Second Village Infrastructure 140.10 140.10 TOTAL 8,443.40 0.00 20145 5051.13 42791.28 Active Loans Closed Loans Total Total disbursed (IBRD and IDA) 3,190.83 14,219.69 17,410.52 Of which repaid 65.78 6,159.40 6,225.18 Total now held by IBRD and IDA 8,176.16 8,082.91 16,259.07 Amount sold 0.00 88.08 88.08 Of which repaid 0.00 82.35 82.35 Total undisbursed 5,051.12 22.63 5,073.75 a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. Note: Disbursement data are updated at the end of the first week of the month. Page 3 of 3 MOP Schedule D Run dale: 8/2/96 Indonesia - Statement of IFC Investments As of 6/30/96 (USS millions) Original Gross Commitments lf 17C IFC Held bY Held by (Undisb. incl NCar Obligor 7)pe ofBusiness Loan Equity Participants Totals IFC Participants Participants 1971 a/ P.T. Kabel-Indonesia - Kabelindo Manufacturing 1.80 037 1.00 3.17 0.00 0.00 000 1971 a/ PT Primatexco Indonesia Textiles 1.35 0.50 0.65 2.50 000 0.00 0.00 1971 a/ P I Semen Cibinong Cement and Construction Materials 7.58 2.05 3.52 13.15 000 000 000 1971 P.T. Unitex Textiles 0.75 0.80 1 75 3.30 035 0.00 0.00 1972 a/ P.T. Daralon Textilc Manufacturing Corporation Textiles 3.38 1.12 1 so 6.00 000 000 000 1973 a/ P.T. Jakarta International Hotel Hotels and Tourism 4.00 0.43 7.00 11.43 000 000 000 1973 a/ P.T. Semen Cibinong Cement and Construction Materials 065 068 4.75 608 000 000 000 1974 a/ P.T. Kamaltex Textiles 192 060 048 3.00 000 000 0 00 1974 a/ P.T. Monsanto Pan Electronics Manufacturing 0.90 0.00 0.00 0.90 000 000 000 1974 a/ P T. Primatexco Indonesia Textiles 200 030 0.00 2.30 000 000 0 00 1974 a/ P.T. PDFCI Bank Financial Services 000 0.48 0.00 0.48 0.00 0 00 000 1974 at P.T. Semen Cibinong Cement and Construction Materials 5.00 1.52 000 6.52 000 0000 0.00 1976 at PT. Semen Cibinong Cement and Construction Materials 000 1.06 0.00 1 06 0.00 0.00 000 1977 a/ P.T. Daralon Textile Manufacturing Corporation Textiles 0.35 0.00 0.00 035 0000 0 00 000 1977 a/ P.T. Kamalte lextiles 0.44 0 15 091 1.50 000 0 (H) 000 0W 1979 at P.T. Daralon Textile Manufacturing Corporation Textiles 0.70 000 0.23 0.93 000 000 0.00 1980 at P.T. Papan Sejahtera Financial Services 4.00 1.20 0.00 5.20 0.00 0.00 0.00 1980 P.T. Semen Andalas Indonesia Cement and Construction Materials 27.95 5.00 28.53 61.48 20.37 1098 000 1980 a/ P.T. Supreme Indo-American Industries Manufacturing 5.10 0.94 6.00 12.04 000 000 0.00 1982 P.T. Saseka Gelora Finance Financial Services 200 0.32 2.00 4.32 0.32 0.00 0.00 1984 a/ P.T. Semen Cibinong Cement and Construction Materials 8.00 0.00 17.00 25.00 000 0.00 0.00 1985 P.T. Saseka Gelora Finance Financial Services 1.00 0.06 0.00 1.06 0.06 0.00 000 1988 P.T. Asuransi Jiwa Dharmala Manulife Financial Services 0.00 0.32 0.00 0.32 0.32 000 0.00 1988 P.T. Bali Holiday Village Hotels and Tourism 9.32 0.00 2.00 11.32 0.44 0.00 0.00 1988 at P.T. Monterado Mas Mining Mining and Extraction of Metals and Other Ores 3.50 2.00 4.50 10.00 000 -1.35 0.00 1988 P.T. Semen Andalas Indonesia Cement and Construction Materials 0.56 0.00 0.00 0.56 0.00 0.00 0.00 1989 at P.T. Jakarta International Hotel Ilotels andI ourism 0.00 1.06 0.00 1.06 000 0.00 000 1990 at Bank Niaga Financial Services 7.50 0.00 0.00 7.50 0.00 0.00 000 1990 at Nomura Jakarta Fund (NJF) Financial Services 000 3.00 0.00 3.00 0 00 000 0 00 1990 P.T. Astra International. Incorporated Motor Vehicles and Components (including Motorcycles) 12.50 12.50 0.00 25.00 11.62 0000 000 1990 at P.T. Bank Umum Nasional Financial Services 10.00 0.00 0.00 10.00 0.00 0 00 000 1990 at P.T. Citra Agramasinti Nusantara Industrial and Consumer Services 0.00 0.00 000 0.00 0.00 0.00 0.00 1990 at P T. Federal Motors Motor Vehicles and Components (including Motorcycles) 12.50 0.00 0.00 12.50 000 0.00 0.00 1990 P.T. Indo-Rama Synthetics Textiles 12.00 0.00 0.00 12.00 1.84 491 000 1990 at P.T. Nusantara Island Resort Hotels and Tourism 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1991 P.T. Agro Muko Food and Agribusiness 10.50 2.20 0.00 12.70 5.98 4.09 0 00 1991 P.T. Argo Pantes Textiles 30.00 13.00 53.00 96.00 31.75 30.29 000 1991 P.T. Astra International. Incorporated Motor Vehicles and Components (including Motorcycles) 0.00 9.85 0.00 9.85 0.00 0.00 000 1991 P.T. Indo-Rama Synthetics Textiles 15.00 6.18 0.00 21.18 16.49 000 000 Page 1 of 3 Original Gross Commitments' Fiscal IFC IFC Held by Held by Undisb. Incl Year Obligor Type of Business Loan Equity Participants Total IFC Participants Parficipants 1991 at Raja-Pendopo Oil Exploration Program Mining and Extraction of Fuel Minerals 0.00 3.60 0.00 3.60 0.00 0.00 0.00 1992 P.T. Bakrie Kasci Corporation Chemicals and Petrochemicals 30.00 9.63 95.00 134.63 31.19 85.73 0.00 1992 P.T. Indonesia Asahi Chemical Industry Textiles 4.00 1.83 0.00 5.83 3.03 0.00 039 1992 P.T. Lantai Keramik Mas Cement and Construction Materials 5.40 1.70 10.00 17.10 2.72 7.45 0.13 1992 P.T. Rimba Partikel Indonesia Timber, Pulp and Paper 9.13 0.60 1000 20.48 9.21 5.00 0.00 1992 P.T. Swadharma Kerry Satya Hotels and Tourism 35.00 0.00 51.00 86.00 26.44 49.11 000 1993 P.T. BBL Dharmala Finance Financial Services 5.00 0.00 0.00 5.00 0.79 1.27 0.00 1993 at P.T. Kabil Indonusa Estate Industrial and Consumer Services 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1993 P.T. Mitracorp PacificNusanera Industrial and Consumer Services 16.00 0.00 0.00' 16.00 15.87 0.00 0.00 1993 P.T. Nusantara Tropical Fruit Food and Agribusiness 9.00 0.00 7.00 16.00 4.00 12.00 0.75 1993 P.T. Samudera Indonesia Infrastructure 12.00 5.00 3.00 20.00 745 8.05 000 1993 P.T. South Pacific Viscose Textiles 20.00 0.00 25 00 45.00 8.72 17.12 0.0 1993 SEAVI Indonesia Aruba A.V.V. Financial Services 0.00 1.50 0.00 1.50 1.50 0.00 0.00 1994 P.T. Asia Wisata Promosindo Hotels and Tourism 0.00 0.00 0.00 0.00 2.30 2.30 0.00 1994 P.T. Astra International. Incorporated Motor Vehicles and Components (including Motorcycles) 0.00 13.08 0.00 13.08 10.67 0.00 000 1994 P.T. KDLC Bali BancBali Finance Financial Services 1500 1.14 0.00 16.14 16 14 0.00 0 00 1994 P.T. Lantai Keramik Mas Cement and Construction Materials 000 I 40 000 1.40 I 40 0.00 000 1994 P.T. Pama Indonesia Financial Services 0.00 0.71 000 0.71 0.71 0.00 0.00 1994 P.T. Saripuri Permai Hotel (SPH) Hotels and Tourism 3.00 360 24.00 35.60 8.00 24.00 0.00 1994 P.T. Saseka Gelora Finance Financial Services 1.52 0.00 0.00 1.52 0.00 000 0.00 H 1994 ad P.T. Sinar Pure Foods International Food and Agribusiness 0.00 0.00 000 000 0.00 0.00 0.00 -.1 1994 Prudential Asia Indonesia Trust Financial Services 0.00 675 000 675 675 0.00 257 1994 PAMA (Indonesia) Limited Financial Services 0.00 0.00 0.00 0.00 000 000 000 1995 P.T. Bakric Kasci Corporation Chemicals and Petrochemicals 30.00 3 00 0.00 33 00 33.00 000 000 1995 P.T. Bakric Kasci Pet Chemicals and Petrochemicals 1200 200 0.00 14.00 14.00 0.00 0.00 1995 P.T. Bakric Pipe Industics Manufacturing 29.50 0.00 000 29.50 29 50 000 0.00 1995 P.T. Bunas Finance Indonesia Financial Services 1000 000 6.00 16.00 10.00 600 000 1995 P.T. Indo-Rama Synthetics Textiles 30.00 4.71 67.50 102.21 3471 6750 2 17 1995 P.T. KIA Serpih Mas Cement and Construction Materials 15.00 6.35 5500 76.35 21.35 5500 25 11 1995 P.T. Mitracorp PacificNusantara Industrial and Consumer Services 2.75 4.12 0.00 6.87 6.66 0.00 0.00 1995 P.T. Panin Overseas Finance Financial Services 600 I 93 8.00 15.93 7.93 8.00 0.00 1995 PT Citimas Capital Indonesia Financial Services 000 2.59 0.00 2.59 2 59 000 1.28 1996 P.T. BBL Dharmala Finance Financial Services 15.00 000 35.00 50.00 1500 35.00 2000 1996 P.T. Dharmala Agrifood Food and Agribusiness 2000 0.00 15.00 3500 20.00 0.00 0.00 1996 P.T. Lantai Kcramik Mas Cement and Construction Materials 25.00 622 81.00 112.22 31.22 81 00 7222 1996 P.T. Santika Hotels and Tourism 14.00 000 000 1400 14 00 0.00 14 00 1996 P.T. South Pacific Viscose Textiles 2500 000 35.00 60.00 2500 3500 000 Total gross commitments b/ 607 30 149 15 662.32 1,48.77 Less cancellations, terminations, repayment & sales 22770 17.36 113.87 358.93 Total commitments now held c/ 37960 131.79 548.45 1 511 39 548.45 138.62 Page 2 of 3 Original Gross Commitments Iscal IFC IFC Held by Held by Undisb. incl Year Obligor Type of Business Loan Equity Participants Totals IFC Participants Participants Pending Commitments P T. Indo-Rama Synthetics Textiles 0.00 2.50 000 2.50 P.T. Panin Overseas Finance Financial Services 6.00 0.00 8.00 14.00 PRAMINDO 25.00 33 18 300.00 358.18 PT ASIANAGRO 4000 000 40.00 30.00 Pr GLIENEAGLES 8.30 360 1390 25.80 l otal pending commitments 7930 3928 361 90 480.48 Total commitments held and pending commitments 458.90 171.07 910.35 1,540.32 Total undisbursed commitments 41.35 12.87 84.40 138.62 a Inm eitments w%hich have been full) cancelled. terminated, written off. sold, redeemed or repaid. W (iro, commitments consist of approved and signed projects. c' lield commitments consist of dishursed and undisbursed investment I- Page 3 of 3 19 Schedule E Indonesia at a glance Page 1 of 2 Lower- POVERTY and SOCIAL East middle- - - - Indonesia Asia income Development diamond* Population mid-1994 (millions) 190.4 1,735 1,097 Life expectancy GNP per capita 1994 (US$) 880 890 1,680 GNP 1994 (billions US$) 167.5 1,544 1,843 Average annual growth, 1990-94 Population (1%) 1.7 1.4 1.4 Labor force (%) 2.2 1.6 1.6 GNP Gross per primary Most recent estimate (latest year available since 1989) capita enrollment Poverty: headcount index (% of population) 17 Urban population (% of total population) 34 26 54 Life expectancy at birth (years) 63 68 67 Infant mortality (per 1,000 live births) 53 34 35 Child malnutrition (% of children under 5) 39 18 .. Access to safe water Access to safe water (% of population) 42 67 78 Illiteracy (% of population age 15+) 23 24 Gross primary enrollment (% of school-age population) 114 116 104 - Indonesia Male 116 119 105 Lower-middle-income group Female 112 115 101 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1985 1994 1995 Economic ratios* GDP (billions USS) 32.1 87.2 175.5 198.1 Gross domestic investment/GDP 23.7 26.2 32.7 34.1 Openness of economy Exports of goods and non-factor services/GDP 23.2 22.6 25.9 26.5 Gross domestic savings/GDP 25.9 29.1 34.2 34.4 Gross national savings/GDP .. 24.2 30.8 30.1 Current account balance/GDP -3.5 -2.1 -1 9 -4.6 Savings - Investment Interest payments/GDP 1.0 2.3 2.5 2.7 Total debt/GDP 35.8 42.1 55.3 53.6 Total debt service/exports 15.1 28.8 31.5 31.0 Present value of debt/GDP .. .. 51.3 Present value of debt/exports .. .. 181.8 .. Indebtedness 1975-84 1985-95 1994 1995 1996-04 (average annual growth) Indonesia GDP 7.2 7.1 7.3 7.6 7.3 - onesi GNP per capita 4.5 5.5 5.4 5.9 6.2 Lower-middle-income group Exports of goods and nfs -0.6 7.8 8.4 7.3 11.3 1 STRUCTURE of the ECONOMY 1975 1985 1994 1995 Growth rates of output and investment (%) (% of GDP) 120 Agriculture 30.2 232 17.4 Industry 33.5 35.9 40.7 .. 1 Manufacturing 9.8 16.0 23.9 .. 10 Services 36.3 40.9 41.9 .. Private consumption 65.1 59.1 57.6 57.6 o -- - 89 s0 91 92 93 94 9S General government consumption 9.0 11.8 8 2 8.0 Imports of goods and non-factor services 21.0 19.8 244 26.3 -GDr -GDP (average annual growth) 1975-84 1985-95 1994 1995 Growth rates of exports and imports (%) Agriculture 4.3 3.4 0.6 2.5 25 Industry 7.1 9.4 10.3 7.4 20 1 Manufacturing 14.4 10.9 13.5 12.0 Services 9.5 8.1 7.5 8.2 :s 10 Private consumption 9.1 6.5 11 0 10.2 s General government consumption 11.4 4.8 2.8 3.0 0- - - Gross domestic investment 14.5 9.6 5.7 12.1 es s0 91 92 93 94 as Imports of goods and non-factor services 9.9 7.6 12.6 17.9 Gross national product 6.7 8.0 7.1 7.2 - Exports imports Note: 1995 data are preliminary estimates. - The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 20 Schedule E 20 Page 2 of 2 Indonesia PRICES and GOVERNMENT FINANCE 1975 1985 1994 1995 IInflation (%) Domestic prices j1 (% change) Consumer prices 19.1 4.4 9.6 9.0 Implicit GDP deflator 11.5 4.3 6.0 6.0 Government finance 3 (% of GDP) Current revenue .. 19.2 15.9 15.9 o0 Current budget balance .. 6.0 6.8 6.5 Overall surplus/deficit .. -3.2 0.3 0.6 - GDP def. CPI TRADE 1975 1985 1994 1995 Export and import levels (mill. US$ (millions US$) soo Total exports (fob) .. 18,823 42,050 46,019 Fuel .. 12,804 10,344 9,749 o. Rubber .. 714 1,316 1,554 Manufactures .. 2,287 20,272 23,636 30ooo Total imports (cf) .. 14,056 37,736 46,173 Food .. 812 782 984 2o,o00 Fuel and energy . 2,870 3,988 3845 14oooo Capital goods .. 5,394 15,062 18,948 Export price index (1987=100) .. 120 131 135 Import price index (1987=100) .. 85 89 90 so so s e 3 4 as Terms of trade (1987=100) .. 141 147 150 r Exporti iot BALANCE of PAYMENTS 1975 1985 1994 1995 Curnt ount toGDP aio(%) (millions US$) Exports of goods and non-factor services 6,981 19,371 46,899 51,644 o3 I s Imports of goods and non-factor services 6,775 17,840 43,392 52,379 Resource balance 206 1,531 3,507 .735 Net factor income -1,342 -3.542 -6,994 -8,305 -2 - . > j Net current transfers 0 88 0 0 Current account balance, -3 before official transfers -1,135 -1,923 -3,488 -9.040 Financing items (net) 284 962 4,743 7,651 Changes in net reserves(+=increase) 851 961 -1.255 1,389 *S Memo: Reserves including gold (mill. US$) 592 5,794 12,290 - Conversion rate (local/USS) 415.0 1,110.6 2,160.8 2,248.6 EXTERNAL DEBT and RESOURCE FLOWS (millions US$) 1975 1985 1993 1994 Composition of total deb, 1994 (mill. US$) Total debt outstanding and disbursed 11,507 36,709 89,477 96,500 G IBRD 57 3,590 11,283 12.008 17109 1200 IDA 318 844 796 776 770 Total debt service 1,060 5,824 14,267 14.792 0 IBRD 2 384 1,620 2,156 IDA 2 12 24 26 Composition of net resource flows Official grants 69 136 219 218 Official creditors 515 1,003 2,339 1.467 Private creditors 1,749 154 -3,365 1,627 F Foreign direct investment 476 310 2,004 2.109 29656 Portfolio equity 0 0 1,836 3,672 World Bank program Commitments 311 1,068 924 1,538 A - IBRD E -Balral Disbursements 164 777 1,195 1.184 9-IDA 0 -Ow mUltlatail F -Pvat Principal repayments 0 133 782 1,259 C-IMF G - Short-temn Net flows 164 644 413 -76 Interest payments 3 262 861 922 Net transfers 160 382 -448 -998 International Economics Department 3/11/96 Note: Government finance and trade fiscal year (April to March). New national accounts series has been used. MAP SECTION  INDUNLSlA SECOND SULAWESI URBAN DEVELOPMENT PROJECT l N[D O'N ES I A, o a1 200 300 KItOMEIEP5 '--_ ------ 0 50 00 150 200MILE5 AUSJR A LIA PHILIPPINES MALAYSIA K.-a Archipelago PROJECT TOWNS NATIONAL HIGHWAYS rolo.d i A PROJECT TOWNS, SIJUDP* PROVINCE ROADS SULAWESI i AN JAVA URBAN ----- LOCAL ROADS DEVE&OPMENT PRO)ECT fin 3340-INDI MAJOR TOURIST ATTRACTIONS 0 SELECTED CITIES AND TOWNS MINE * KABUPATEN CAPITALS MAJOR PORTS PROVINCE CAPITALS MAJOR FERRY/SHIPPING ROUTES -------- KABUPATEN BOUNDARIES - ----- PROVINCE BOUNDARIES † DOMESTIC AIRPORTS INTERNATIONAL AIRPORTS INTERNATIONAL 8OUNDARIES ..l,kuparg SULAWESI UTARA p KALMANTAN Kaunba SULAWESI T AIp, TENGAH- - MAL UKU EI arUAW SangAr S AT N - a Torna -Klaod ahey K i SSULAWESI TENGGARA-. Tk k pr- P d.o n l P.I B.T5 na. -bar- wV r, G-oup- d120 nb 125k   IMAGING Report No: P- 6739 IND Type: MOP