Tanzania - Dar Es Salaam Sewerage and Sanitation Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3678-TA STAFF APPRAISAL REPORT TANZANIA DAR ES SALAAM SEWERAGE AND SANITATION PROJECT November 29, 1982 Water Supply and Urban Development Division Eastern Africa Regional Office 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 = Tanzania Shilling (TSh) TSh 1.0 = US$0.11 US$1.0 = TSh 9.40 MEASUREMENT EQUIVALENTS 1 meter (m) = 39 inches = 3.28 feet 1 kilometer (km) = 0.62 miles 1 square kilometer (km2) = 0.386 square mile 1 hectare (ha) = 0.01 km2 = 2.25 acre 1 cubic meter (m3) = 35.3 cubic feet (cu ft) 1 liter (1) = 0.22 Imperial gallons lcd = liters per capita per day 1 Ig = 1 Imperial gallon = 4.545 1 ABBREVIATIONS AND ACRONYMS AFYA = Ministry of Health ARDHI = Ministry of Lands, Housing and Urban Development CIDA - Canadian International Development Agency CN - choo nzuri (ventilated improved pit latrine) DCC - Dar es Salaam City Council DCS = Dar es Salaam Water Corporation Sole DSSD = Dar es Salaam Sewerage and Sanitation Department Government = Government of the United Republic of Tanzania HHP = Howard Humphreys and Partners, Consulting Engineers ICB = International Competitive Bidding JTS = John Taylor & Sons, Consulting Engineers KfW = Kreditanstalt fur Wiederaufbau, Federal Rebublic of Germany LCSE = Low-Cost Sanitation Engineer MMM = Marshall Macklin Monaghan Limited, Consulting Engineers MWE = Ministry of Water and Energy (formerly Ministry of Water, Energy and Minerals) NUWA = National Urban Water Authority ODA - Overseas Development Authority, U.K. PMM = Peat, Marwick, Mitchell and Company PMO = Prime Minister's Office PPF = Project Preparation Facility SIDA = Swedish International Development Authority TAG = Technology Advisory Group, UNDP P'roject GLO/78/006 TANESCO = Tanzania Electric Supply Co. Ltd. UNDP = United Nations Development PrograLmme WHO = World Health Organization FISCAL YEAR July 1 - June 30  FOR OFFICIAL USE ONLY TANZANIA DAR ES SALAAM SEWERAGE AND SANITATION PROJECT STAFF APPRAISAL REPORT TABLE OF CONTENTS Page No. I. THE WATER SUPPLY, SEWERAGE AND SANITATION SECTOR Country Background. ..... . .... ..*. . .1............. Water Supply Sector.... ...... ................... .*.. 2 Sewerage and Sanitation Sector Organizations...... 3 Present Service Levels ........................ .. 3 Government's Service Level Goals .................. 3 Sector Constraints ......... . ..... o...... .. ...... . 4 Previous Bank Group Involvement............... 0...... 4 II. POPULATION, WATER SUPPLY, SEWERAGE AND SANITATION IN THE PROJECT AREA (DAR ES SALAAM) Location and Special Featuresoo.ooo.. ... o ....... 5 Regional Development Prospects ... o............... 7 Sector Agencies .... ..... . .... 0 .... . . . 0 ..... .. . . 7 Existing Water Supply System.....oo.ooo .......... 8 Existing Sewerage and Sanitation Systems......o.... 8 Population Served and Standards of Service ...... oo 9 Water Supply and Sanitation Services for the Urban Poor ....................................... o 11 Population Projections and Demand for Sewerage and Sanitation Serviceso............................ 11 III. THE PROJECT Genesis ........................ oo ......o ... o.. 12 Objectives ............... ......................... 13 Technological Alternatives ..o...ooo.............. 14 Description of Project Components ................. 15 Cost Estimateso... ......... ... . ...... ..... ....... 16 Project Financing............ ........o....... ....... . 18 Implementationoo ...... .o..................... o..o.o ...... o.. 18 Resources Aspects..o. .. o .... o ...... ooo ....... 20 Procurement ................................ . 20 Disbursements .o.o... ..o............................ ...o...... 21 This report was prepared by Messrs. P. Callejas (Senior Engineer, EAPEW) and J. Sneddon (Senior Financial Analyst, EAPEW) and is based upon information obtained during an appraisal mission to Tanzania by Messrs. Callejas and Sneddon in June and July 1981. The mission was assisted by UNDP/IBRD Technology Advisory Group Consultants, Dr. Marilyn Tonon and Mr. Peter Hawkins. | 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.  - ii - Page No. IV. FINANCIAL ANALYSIS Past Performance.....".. ......................... . 21 Future Financial Performance ........ .. ........... 22 Financing Plan ............................................. 25 Project Monitoring Indicators ..................... 27 V. BORROWER AND IMPLEMENTING AGENCIES Lending Arrangements ............. . .................. . 27 Organizations ... .. ................... ..... . 27 Dar es Salaam Sewerage and Sanitation Department (DSSD) ...................... .... 28 Management and Staff.... ... ........ ....* . 28 Management Development and Training ......nso. 28 Management Systems ................................ 29 Audit and Insurance .................. ................ . 30 VI. ECONOMIC AND SOCIAL ANALYSIS Project Benefits .................................. 31 Least Cost Solution ............................. .. 32 Rate of Return and Pricing ................. ....... 32 Impact on Poverty Group........................... 33 Project Merit and Risks ... ......................... 33 VII. AGREEMENTS TO BE REACHED AND RECOMMENDATIONS Agreements Reached ............................... 34 Recommendation ... .. ...... .. ....... .......... . . . . . 35  - iii - LIST OF ANNEXES 1. Existing Water Supply, Sewerage and Sanitation Systems. 2. Project Description. 3. Project Costs and Program of Expenditures. 4. Implementation Schedule. 5. Proposed Allocation of Credit Proceeds. 6. Estimated Schedule of Disbursements from Credit. 7. Financial Forecasts - DSSD Low-Cost Sanitation: 1983-1987. 8. Financial Forecasts - DSSD Sewerage: 1983-1987. 9. Sewerage Sector Consolidated Financial Forecasts - 1983-1987. 10. Notes and Assumptions for the Financial Forecasts. 11. Project Monitoring Indicators. 12. Organization Chart. 13. Annual Economic Cost of Pit Latrines. 14. Return on Investment and Sensitivity Analysis. 15. Selected Documents and Data Available in Project File. MAPS IBRD 16132: Dar es Salaam Sewerage and Sanitation Project.   TANZANIA DAR ES SALAAM SEWERAGE AND SANITATION PROJECT STAFF APPRAISAL REPORT I. THE WATER SUPPLY, SEWERAGE AND SANITATION SECTOR Country Background 1.01 Tanzania (Map IBRD 16132) is bordered by the Indian Ocean on the east, Kenya and Uganda in the north, Rwanda, Burundi and Zaire in the west, and Mozambique, Malawi and Zambia in the south and southwest. Tanzania is about 0.94 million km2 in area (almost twice the size of France). The climate is generally tropical with monsoon rains. It is hot and humid in the low coastal plains which rise gradually to the cooler and drier central plateau. Except for the narrow coastal belt, most of the country is at an altitude above 200 m and a large part is at about 1000 m. 1.02 The mid-1980 population was estimated at 19 millionl/ and increasing at an annual rate of 3.4%; about 16.7 million were in the rural areas including about 8000 villages; 2.3 million were in the urban areas, including some 55 towns with populations greater than 5000 and the City of Dar es Salaam. The urban population has been growing at about 8.7% on average annually, increasing the proportion of the urban population from 5% in 1967 to about 12% in 1980. 1.03 Mainland Tanzania is divided into 20 administrative regions each headed by a Regional Commissioner assisted by a Regional Development Director. Civil servants in the regions are responsible to the Regional Development Director who has a rank equivalent to a ministerial Principal Secretary and who is linked to Government through the Prime Minister's Office (PMO). Town councils, including the Dar es Salaam City Council, DCC, (paragraphs 2.05 and 2.06), were abolished in 1974 and brought into the District/Regional system. However, the councils were re-established in July 1978. 1.04 Average per capita GNP was estimated at $280 for 1980. Agriculture contributed 54%, industry 13% and services 33%, to total GDP in that year. Tanzania is facing its worst economic crisis since independence; oil price increases (130%) over the past two years and the necessity to import food, coupled with stagnating exports, have caused severe economic problems and a chronic shortage of foreign exchange. The Government is facing difficulties in making the adjustments which may put the economy back on course and recovery is likely to be a lengthy process. 1/ World Development Report, 1982  -2- Water Supply Sector 1.05 Tanzania is generally dry with limited surface and, groundwater resources. Three river basins exist which respectively drain into: (i) the Indian Ocean; (ii) Lake Tanganyika and the Zaire river; and (iii) Lake Victoria and the Nile. Drier regions are in the center of the country and in the Rift Valley where there are no perennial rivers and groundwater is scarce. The central plateau receives less than 1 m of annual rainfall but the areas around Kilimanjaro and north of Lake Nyasa have an annual rainfall exceeding 1.5 m. Salinity and a high fluoride content in some aquifers limit the use of groundwater. 1.06 The Ministry of Water and Energy (MWE) has responsibility for management and development of all water resources. Regiona]. development plans are submitted to the Ministry of Planning through the PMO which ensures that MWE comments on the plans. Dar es Salaam's water supply is the responsibility of the Dar es Salaam Water Corporation Sole (DCS), a parastatal organization which reports to the PMO but also is under the technical control of MWE. 1.07 A National Urban Water Authority (NUWA) was estab:Lished by Parliament in April, 1981. Its establishment followed five years of study and deliberation. NUWA is in the early stages of formation and will initially take over the water supply facilities in Dar es Salaam, Morogoro, Iringa, Mwanza, Moshi and Arusha, and DCS will be dissolved. NUWA is intended to operate urban water supplies as a reasonably aul:onomous national entity and particularly to be responsible for its own finance5 as the Treasury has been unable to allocate sufficient funds to MWE for adequate operations and maintenance. NUWA should be in a position to avoid many of the problems encountered by DCS (paragraph 2.17) and, operate on a commercial basis, as in the case of the Tanzania Electric Supply Company Limited (TANESCO), its counterpart in the power sector which is also accountable to MWE. Technical assistance to NUWA would be a component of the proposed sewerage and sanitation project. 1.08 Every major urban center in Tanzania has a piped water supply system. An estimated 85% of the 1978 urban population had access to piped water; the remaining population, usually in the poorer parts of the towns, obtained water from ponds, streams or shallow wells which often are polluted. Statistics published by the World Health Organization (WHO) for 1975 indicated that about 17% of urban consumers were suppl:Led through house connections and the balance, through public standpipes. During recent years, because of inadequate funds, expansion of urban water systems has fallen behind the growth of demand and operation and ma[ntenance standards have suffered. 1.09 WHO has estimated that in 1980 about 26% of the nrral population obtained water from village systems operated by Regional Water Departments under the technical direction of MWE. A further 12% drew water from private and community supplies and protected traditional sources.  -3- Sewerage and Sanitation Sector Organizations 1.10 Sewerage and Sanitation in the urban areas is under the overall control and responsibility of the Ministry of Lands, Housing and Urban Development (ARDHI). Towns2/ are responsible for operation and maintenance and ARDHI plans or approves plans for expansion and is responsible for implementation. Rural sanitation is the responsibility of the Ministry of Health (AFYA). ARDHI assumed responsibility for sewerage and sanitation in 1978 following the 1977 cholera epidemic when the sewerage problem in Dar es Salaam became a major concern. ARDHI is still in the process of developing its Sewerage and Drainage Division. Present Service Levels 1.11 Twenty of Tanzania's 55 towns with populations over 5000 are regional headquarters, but only six are partially served by waterborne sewerage - Arusha, Dar es Salaam, Moshi, Mwanza, Tabora and Tanga. The population served totals about 200,000, 10% to 20% of their residents. The remainder of the country's population is served by septic tanks and pit latrines. Efforts have been made since 1977 to improve sanitation and ARDHI estimates that about 90% of all households in the country have some form of excreta disposal facility, although many are unsanitary. 1.12 Shortage of funds precludes the rural sanitation problem from being addressed in a substantial way, although some projects for pit latrines are being undertaken by UNDP, bilateral and other agencies as part of rural development. 1.13 The disestablishment of town councils (paragraph 1.03) led to the neglect of city and town infrastructure including underfinancing of operations and maintenance and, in the case of Dar es Salaam, dispersal of experienced staff. Sewerage and sanitation operations and pit latrine emptying services suffered and virtually ceased during this period. The existing staff have been endeavoring to improve service since reintroduction of the councils, but with little success due to the lack of funds and equipment and because of a severe shortage of qualified staff. Government's Service Level Goals 1.14 The Government has not established specific sector service level goals. However, ARDHI has drafted a sector policy paper which is being reviewed by concerned ministries and which ARDHI hopes to submit for cabinet approval in the near future. The proposed policy would include upgrading the low-cost on-plot sanitation facilities in urban areas to satisfactory hygienic levels. These are the facilities used by 70% to 90% of the urban population, for whom it would be prohibitively expensive to provide waterborne sewerage. The policy also would be to expand and improve waterborne sewerage services for the remainder of the urban population. Toward this end, ARDHI has engaged consultants to prepare master plans for sewerage and sanitation for Dar es Salaam, Moshi, Arusha, Morogoro and Mwanza, including studies of the financial and institutional implications of such schemes. 2/ Includes the City of Dar es Salaam.  -4- Sector Constraints 1.15 Three major factors constrain the effort to improve sewerage and sanitation in Tanzania. The prime constraint is the lack of adequate organization structures, both in ARDHI and in the town councils, to implement projects and operate the systems, whether sewerage or low-cost sanitation. 1.16 The second constraint is the lack of qualified staff, particularly administrators, engineers, financial managers, accountants and technicians. Consultants have estimated that about 300 such personnel would be required for Dar es Salaam alone by 1990. Perhaps 600 would be required to meet the needs of all the communities for which master plans are being prepared (paragraph 1.14). At present there are very few graduate sanitary engineers in Tanzania and Dar es Salaam University does not have a sanitary engineering program. ARDHI has recently established a Department of Public Health Engineering at the ARDHI Training Institute with a three year diploma course and a first year class of 25, an inadequate number in view of the requirements. A more subst:antial training program is required. Until indigenous staff are trained, many of the sector managers will need to be found outside Tanzania. 1.17 The third constraint is finance. Although the available resources for sewerage and sanitation dictate that low-cost methods are used, the resources needed are large. Theoretical estimates indicate that if the population served by sewerage were increased by 50% by the year 2000, the financial requirements would be about TSh 2.5 bilLion (about US$270 million) at 1981 prices. To improve on-plot sanitation facilities to adequate standards for the remainder of the urban populal:ion could cost up to TSh 15 billion (about US$1.6 billion) at 1981 prices, based on prices typical for Dar es Salaam. Raising the local contribution to investments of such magnitude would require major adjustments to charging and collection policies for sewerage and latrine emptying services and for the capital cost of new latrines, but even this would not be enough. The search for less costly, but equally efficient, methods of providing sanitation needs to be pursued constantly. Previous Bank Group Involvement 1.18 The proposed project would be the second Bank Group operation in Tanzania's water supply, sewerage and sanitation sector. Tlhe first project,financed by Loan 1354-TA in 1977, was for the expansion of water supplies to Morogoro. Implementation of that project is about two years behind schedule because of poor performance by the civil works contractor for the major project component. There also have been difficulties in establishing NUWA, a separate entity responsible for urban iwater supply (paragraph 1.07). Following resolution of these difficulties, five key personnel are being selected from within the Government or private sector to fill senior management posts. Once these appointments are made, consultants will be engaged to assist with recruitment of additional NUWA staff, train such staff to provide interim advice pending the recruitment of Tanzanian nationals for key posts. These consulting services would be financed partially from the proposed credit for the sewerage and sanitation project.  1.19 In addition to the Urban Water Supply Project at Morogoro, rural development, agriculture and urban projects financed by IDA have contained water supply and sanitation components.3/ 1.20 There are no major lessons to be learned from the contractor problems on the Morogoro project; failure in performance could not have been foreseen or prevented by appropriate remedial measures. 1.21 One lesson to be learned from the Morogoro project is to ensure the enactment of necessary legislation in the course of project implementation. In the proposed sewerage and sanitation project for Dar es Salaam a separate department of DCC (paragraph 5.03) would be responsible for project operation and ARDHI will be responsible for implementation. No new legislation will be required, and the administrative steps required to establish the department have been taken already. II. POPULATION, WATER SUPPLY, SEWERAGE AND SANITATION IN THE PROJECT AREA (DAR ES SALAAM) Location and Special Features 2.01 The proposed sewerage and sanitation project would be within the municipal boundaries of Dar es Salaam (Map IBRD 16132). However, the study area for which a Master Plan for Sewerage and Sanitation has been developed extends beyond the municipality to the boundary of the Dar es Salaam Region. The total area of the municipality is about 45,000 ha, and of the region, about 112,000 ha.4/ As of 1978/79, about 10,400 ha of the municipal area were developed and about 4,500 ha were designated as quarry areas or for military purposes. Parts of the municipal area and substantially all of the region outside are rural in character. 2.02 Dar es Salaam is the major port of Tanzania and has a good natural harbour and port facilities. Over the past 100 years it has grown from a small coastal town to a major city with a large university and is the principal center of commerce and industry in Tanzania. Although Dar es Salaam is the present capital of Tanzania, the Government plans to move eventually to Dodoma. 3/ The First and Second National Sites and Services Projects (Credits 495-TA and 732-TA); Kigoma Rural Development Project (Credit 508-TA): Tabora Rural Development Project (Credit 703-TA); and the Mwanza/Shinyanga Rural Development Project (Credit 803-TA). 4/ Urban Development Master Plan of the City of Dar es Salaam, Marshall Macklin Monaghan Limited (MMM), 1979.  -6- 2.03 The population of Dar es Salaam municipality increased from about 69,000 in 1948 to an estimated 782,000 in 1978 at an average rate of 8.5% per annum. 5/ Surveys carried out in 1979 in the course of preparing an urban development master plan6/ indicated that the mid-1981 population of the Region could be to be about 1,060,000 comprising: Residential 908,000 Institutional7/ 68,000 976,000 Rural 84,000 1,060,000 At least 60% of the city population resides in squatter or unplanned housing areas occupying approximately 40% of all residential land area. 2.04 The city is divided into three districts, 10 sub-districts and 52 wards. Five wards in Temeke District (southern part of the city) have been selected tentatively as the site of the low-cost sanitation component of the project and have a total population (1978) of about 200,000. 2.05 Councillors of DCC are elected from the city electoral wards. DCC has a City Director (City Manager) who is the chief executive responsible to the council for city operations. He has under him the City Engineer, Medical Officer of Health, City Treasurer and other officers to head the various city departments. 2.06 Although DCC is theoretically autonomous, all funds required are received from the Government as though it were a Government department. The funds are restricted, as are all central budget funds, and DCC receives insufficient funds to discharge its responsibilities in infrastructure maintenance and the provision of services. 2.07 The characteristics of the project area which affect the design and operation of sewerage and sanitation are subsoil conditions, groundwater elevations, topography, climate and stormwater flooding conditions . In general, subsoil conditions for sewerage construction are not particularly difficult; however, there are areas of high groundwater, coral limestone or loose sand which increase excavation costs. Sewerage design is complicated by the generally flat terrain and a number of stream valleys which dissect the project area. High temperatures encourage septic sewage conditions, requiring more expensive design standards for sewers and 5/ 1978 Census, Preliminary Report, Ministry of Finance and Planning. Equivalent data on past growth of the Dar es Salaam Region are not available. 6/ Urban Development Master Plan of the City of Dar es Salaam, Marshall Macklin Monaghan Limited (MMM), 1979. 7/ Resident populations at military, police, university and hospital compounds.  -7- better than average operation and maintenance of the systems to achieve adequate treatment and to reduce the hazards and corrosive effects of septic conditions. Most areas are suitable for pit latrines and septic tank systems. In some areas, however, low soil permeability, high groundwater or occasional flooding require special designs and operating and maintenance procedures for on-plot sanitation - such as larger septic tanks and leaching fields, mounded pit latrines and good emptying services - and which increase cost. 2.08 Health information for Dar es Salaam is limited but adequate to demonstrate that major causes of mortality and morbidity - as they are throughout Tanzania - are diseases associated with poor sanitation, poor nutrition and lack of health knowledge. In Dar es Salaam reported cases of malaria, schistomiasis, diarrhea and hookworm, to name a few, are dangerously high for a city of about one million people. (See paragraphs 1 and 2 of Annex 1). Regional Development Prospects 2.09 As the main industrial and commercial center of Tanzania, much of the future growth of economic activity in Tanzania should be reflected in Dar es Salaam's development. Therefore, the city is likely to continue attracting people in search of work. 2.10 The population studies prepared for the urban development master plan (paragraph 2.03) projected Dar es Salaam's 1999 population at from 2.0 million to 4.4 million with the most reasonable forecast for that year considered to be about 2.4 million. This takes into account the potential effects of moving the capital to Dodoma and is based on the assumption that the Government's decentralization policy will prevent net in-migration from exceeding about 50,000 annually, the average level of the 1969-1978 decade. Sector Agencies 2.11 Water supply in the Dar es Salaam Region is presently the responsibility of DCS, a parastatal organization (paragraph 1.06). However, NUWA, also a parastatal, is being established and will gradually assume responsibility for urban water supply systems, including Dar es Salaam, as soon as it becomes operational (paragraphs 1.06 and 1.07). 2.12 The principal responsibility for sewerage and sanitation in Dar es Salaam is with DCC, although ARDHI has an important role in policy making and in project planning and implementation (paragraph 1.10). The formal relationship between the two agencies is not clearly defined but has been established adequately for the planning and implementation of the proposed sewerage and sanitation project. (See paragraphs 3.25-3.31). 2.13 The only substantial relationship between the water supply and the sewerage and sanitation agencies in Dar es Salaam at present is that bills for sewer service are based on water consumption figures which DCC obtains from DCS (paragraph 4.02).  -8- Existing Water Supply System 2.14 The urban area of Dar es Salaam is served by a piped system supplying treated water from three major river sources (Annex 1). Water from these sources is pumped to distribution reservoirs before reticulation. 2.15 Water production from these sources at present averages between 120,000 to 180,000 m3/d according to various estimates; accurate figures do not exist because flow meters do not function at any of the treatment plants. According to MWE officials, the existing water sources are adequate for Dar es Salaam until 1987 or 1988 without additional river regulation. After then, lack of river regulation could cause water shortages during two or three months of the year. 2.16 Groundwater is of limited availability and is not extensively used for community or agricultural purposes in the Dar es Salaam Region. However, in some areas industries and institutions use private tubewells to supplement water supplies from the public system. Domestic water supplies in rural areas in the region often are taken from shallow wells or local surface water sources. 2.17 The existing public water supply system does not provide satisfactory service, in spite of the fact that the installed capacity of treatment and transmission facilities appears ample (Annex 1). Unaccounted-for water, due to leaks in the transmission and distribution systems and to unrecorded water use, may be 50% of water production. There are frequent service interruptions, and in some areas water seldom is supplied on a continuous basis. On a number of recent occasions, substantially untreated water has been distributed because of shortages of chemicals. The underlying causes of unsatisfactory service are the lack of a proper organization and adequate staff for operation and maintenance, poor inventory management, undersized distribution mains (especially in the city center) and faulty interconnections between pressure zones. Metering of water production (paragraph 2.15) and of water use is totally inadequate. Only 25% of service connections have functioning meters. Existing Sewerage and Sanitation Systems 2.18 The sanitation requirements of about 90% of Dar es Salaam's population are met with on-plot facilities, namely pit latrines and septic tank systems. The existing system (Annex 1), serving the balance of the population, is of the separate type; i.e. designed for sanitary sewage only. The city center system (IBRD Map 16132), dating back to 1948, discharges through an ocean outfall just north of the harbor entrance. Sewage either gravitates or is pumped to the outfall. In addition, nine isolated systems have been installed for residential, instltutional and industrial developments in outlying areas. In each one, treatment is by waste stabilization ponds with the effluent discharging to local watercourses. 2.19 The condition of the existing sewerage system is exceptionally bad (Annex 1). The ocean outfall is broken near the shore. Only one of the waste stabilization ponds is operating with some degree of  - 9 - effectiveness. Of the 17 existing pumping stations, only one can be operated. A number of the major sewers are blocked completely. Septic conditions, causing serious corrosion of sewers and dangerous concentrations of gases, can be observed at a number of locations. 2.20 The existing conditions cause surcharge of sewers and overflows to storm drains, streams, the harbor and beaches. The result is serious pollution and a major risk to health. Until sewers are cleared, few meaningful examinations can be made to determine flow rates, capacities, structural conditions and the extent of rehabilitation required. Similarly, little can be done to measure flows and characteristics of the sewage. 2.21 The basic cause of the existing sewerage situation is poor operation and an almost complete lack of maintenance, particularly since 1974 when the City Council was abolished (paragraphs 1.03 and 1.13). Even since the Council was reestablished in 1978, practically nothing has been done to improve the situation, except planning. Deficiencies in the original designs of some existing facilities also may be a contributing factor. 2.22 As noted above (paragraph 2.20), it is not possible to measure existing sewage flows. However, the probable average daily flow from the properties believed to be served in 1979 is estimated to total about 22,000 m3/day with peak flows of about 56,000 m3/day. Engineering studies also indicate that most, if not all, of the elements of the existing sewerage systems have excess capacity for the population that could be served by the existing system, provided that these elements are in reasonably good condition. 2.23 Industrial and trade wastes in Dar es Salaam are substantially uncontrolled and untreated. Of about 700 industries in the area, about 30 should be considered serious sources of pollution. The Msimbazi River, north of the city center, is highly polluted with industrial wastewater. Existing legislation covering the discharge of pollutants to watercourses is not enforced at present. New effluent standards drafted by the Tanzania Effluent Standards Committee are under consideration. There also are water pollution problems caused by unsanitary disposal of municipal solid wastes and by periodic surface water flooding in some areas. Population Served and Standards of Service 2.24 Water Supply. Substantially all of the population of the urban sections of the Dar es Salaam region obtain their water in one way or another from the public water system. In some cases this may be supplemented from other sources (paragraph 2.16). 2.25 In 1980 there were about 35,000 registered individual water service connections - either to plots with external taps only or to buildings with full internal plumbing including flush toilets - and about 550 public standpipes. The actual number of direct water service connections may be much higher since illegal connections are a major problem. An estimated 40,000 people (1979) live in residential areas  - 10 - served entirely by public standpipes. DCS has a plan to phase out public standposts by 1984, but this appears impractical because of costs and limited demand for a change in the type of service (Annex 1, paragraph 8). 2.26 Water demand figures developed for use on the sewerage studies (paragraph 3.02) are 24 to 30 lcd for population using pubLic standpipes, up to 60 lcd for plots with individual connections but without flush toilets, and 120 lcd to 240 lcd for middle and high income housing with full plumbing. Actual service provided often may be less than this because it is not reliable either as to continuity or the quality of the water (paragraph 2.17). 2.27 Sewerage and Sanitation. Sewerage studies (paragraph 3.02) showed that of the total population of the Dar es Salaam Region in 1979 (932,000) about 12% had sewer service, 10% had septic tanks and 76% had pit latrines of some type. Altogether there were about 8,400 septic tanks and 60,000 latrines. Of the approximately 109,000 people served by sewerage, about 30% resided in institutions (army, police, university and hospitals). Within the urban area the population without access to sanitary facilities is estimated to be 2%, and in the rural area, 5%. 2.28 There are about 5,800 connections to the Dar es Salaam sewerage systems, according to DCC. However, DCC's records are poor and it is believed that numerous unregistered connections exist. The rate of making new registered connections has been low because of the inefficiency of the sewerage agency, the cost of the connections and reluctance to connect because of the malfunction of the systems. 2.29 The quality of the sewer service is poor (paragraphs 2.19 and 2.20 and Annex 1). Low-cost sanitation facilities are described in detail in Annex 1. The standards of construction and maintenance of most pit latrines inspected during the sewerage studies was good. Most of the pits were lined and had impervious concrete slabs which were kept clean. However, the design of these structures is usually not satisfactory in terms of controlling odors and breeding of mosquitoes and flies. 2.30 Emptying of the latrine pits and disposal of the contents is poorly done by the municipal authorities. There is a considerable delay of several months in providing the emptying service after it is requested. Then the emptying usually is done incorrectly because only the liquids are removed; there are both labor and equipment-deficiencies in this respect. The pit emptying vehicles (vacuum tankers) often discharge their loads at numerous illegal sites within the city boundary because there are no proper dumping stations in operation, causing serious pollution problems. 2.31 The sewerage studies disclosed that the commonly used design for septic tanks in Dar es Salaam is faulty in a number of respects which reduce the effectiveness and often increase the costs of construction and maintenance. The emptying of septic tanks is carried out by the same labor and vehicles which deal with pit latrine emptying and the inefficiency of the emptying service applies to septic tanks as well. Consequently in some high income areas there is a demand for connection to the sewerage system. This demand would propably disappear if emptying service :Eor septic tanks were substantially better.  - 11 - Water Supply and Sanitation Services for the Urban Poor 2.32 The absolute poverty income level for urban population in Tanzania is TSh 1220 (US$147) per capita per year or TSh 102 per capita per month. There is no specific data for Dar es Salaam but it is estimated that nationwide 10% of the urban population have incomes below this level. In Dar es Salaam, most urban poor are located to the south and west of the city center in unplanned (squatter) areas (Map IBRD 16132). 2.33 There is little factual information on the standards of water supply and sanitation services available to the poor. However, it is safe to assume that substantially all the population who depend on public standpipes (paragraph 2.25) for water supply are poor, plus a large number of the people who have on-plot water service connections with only external taps. Since most water billing is not based on metered water use, many urban poor obtain their water from neighbors who have service connections. The urban poor are among the large proportion of the total population who use pit latrines. The results of a sample survey of sanitation in low-income areas of the city are given in paragraphs 14-21 of Annex 1. 2.34 The city wards tentatively selected for the low-cost sanitation component of the project (paragraph 2.04) are representative of the urban poverty areas in the city. With a total population of about 200,000, these wards include several small industries, one dispensary and 18 primary schools. A mix of planned and unplanned settlements, the wards have among the poorest sanitary facilities in the city. Most residents draw water from public standpipes, or buy from vendors, and use pit latrines. Many of the latrines are in an unsanitary condition, probably because most of the pits have never been emptied and they are overused. A recent trial by ARDHI to introduce into the area improved latrines on demonstration basis was well received by local householders, teachers and party leaders. Population Projections and Demand for Sewerage and Sanitation Services 2.35 The sewerage and sanitation studies for this project (paragraph 3.02) resulted in recommendations for long-term phased development of sewerage and sanitation based on projected needs and conclusions as to the suitability and economics of meeting those needs. The recommended requirements for sewerage and on-plot sanitation are as follows: Total No. of Units Total Population Percentage Served (thousands) of Region Septic Pit Septic Pit Year (thousands) Sewers Tanks Latrines Tanks Latrines 1979 932 12 10 78 8.4 59.0 1984 1,269 19 12 69 12.3 76.7 1989 1,642 25 10 65 14.0 93.0 1999 2,461 36 9 55 18.3 116.0  - 12 - 2.36 According to the above, about 57,000 new pit latrines and about 10,000 new septic tank installations would be required by the end of the century. In addition, many existing on-plot units should be upgraded to acceptable standards. Since it is unlikely that new sewerage construction would proceed according to the above schedule, the demand for new pit latrines and septic tanks until 1999 could be 50% higher t'han predicted. Pilot demonstrations of improved pit latrine designs during project preparation have indicated adequate interest in these units. III. THE PROJECT Genesis 3.01 Faced with outbreaks of cholera and the prevalence of other diseases related to sanitation in Dar es Salaam, the Government, early in 1978, requested IDA assistance with the preparation of a project to improve and extend the city's sewerage system (paragraphs 2.19 and 2.20 and Annex 1). Investigations by IDA staff revealed that existing sewerage development plans were inadequate. This led to assistance by IDA through the Project Preparation Facility (CR. P074-TA) in July 1979 and May 1980 totaling US$1.0 million for the preparation of a master plan, feasibility studies and preliminary designs for sewerage and sanitation in Dar es Salaam and other technical assistance. 3.02 A consulting firm8/ was engaged by ARDHI in June 1979 to carry out the studies. The Sewerage and Sanitation Master Plan to meet the needs of the metropolitan area until about 2010 was completed in. December 1979.9/ The feasibility studies and preliminary designs f'or Stage I of the least-cost development program, covering the period through about 1986, were substantially completed in December 1980. The studies included the institutional and cost recovery aspects of sewerage and sanitation and recommendations for changes required to achieve efficiently operated and maintained and financially viable services. 3.03 Originally the Government intended to concentrate upon sewerage - the conventional water-borne waste disposal system - which now, and for many years to come, would serve a small proportion of the city's population (paragraph 2.18 and Annex 1). However, late in 1978, Tan2zania was chosen for priority attention in a UNDP financed demonstration project (GLO/78/006), for which the Bank is the executing agency. The UNDP project assists governments in developing water supply and sanitation projects which are responsive to the needs of low-income urban and rural areas and which the beneficiaries can afford. On the advice of the UNDP project team, the Technology Advisory Group (TAG), the sewerage studies were expanded to include low-cost sanitation, which now is a major element in 8/ Howard Humphreys & Partners (UK) in association with E'eat, Marwick, Mitchell and Company (UK). 9/ The Sewerage and Sanitation Master Plan is based on an Urban Development Master Plan prepared by Marshall Macklin Monaghan Limited (Canada) in 1979 and financed by SIDA.  - 13 - the proposed sewerage and sanitation project. TAG members have continued to advise the Government and IDA on the preparation of the project and are expected to continue assistance during the implementation stage. 3.04 Preparation of the project has involved several missions by IDA staff (July 1978, April 1979, January and November 1980 and March 1981). The appraisal mission was in June/July 1981 and a brief post-appraisal mission, in March 1982. TAG members visited Tanzania several times in connection with low-cost sanitation studies in Dar es Salaam and a number of other towns and also assisted ARDHI, DCC and IDA at the time of appraisal. 3.05 Financing of a Low-Cost Sanitation Engineer (LCSE) Advisor post in ARDHI and some equipment and demonstration work on low-cost sanitation (110 improved pit latrines) - all important in project preparation - was provided from IDA Credit 732-TA for the Second National Sites and Services Project. IDA also assisted in arranging a UNDP grant to continue financing the LCSE post for two years beginning in August 1981. A manager for project implementation has been engaged by ARDHI with financing from IDA's PPF (paragraph 3.01). 3.06 IDA involvement in the water supply, sewerage and sanitation sector stems from interest in assisting with the improvement of institutions, infrastructure and the supply of basic needs. This sector involvement has continued for a number of years, both directly, through lending for water supply, and indirectly, through lending for urban and rural development projects (paragraphs 1.18 and 1.19). Immediate goals of these activities are strengthening of sector institutions, rehabilitation of past investments in infrastructure, improved maintenance and utilization of existing capacity, improvement of the efficiency, quality and extent of essential sector services and reduction of the financial burden of these services on Government through acceptable cost recovery systems. The sewerage and sanitation master plan and proposed Stage 1 project are consistent with these goals and with statements of policy by the Government. Objectives 3.07 The project would be a modest first stage in a long range program to develop basic sanitation in Dar es Salaam to meet acceptable standards of public health and adequate levels of efficiency. In addition to rehabilitation of the defunct existing sewerage system, the project would focus particularly on low-cost on-plot sanitation of types which will serve the majority of the population for many years and on the development of the services, institutions, management and financial practices required for sewerage and sanitation facilities to be properly planned, constructed, operated, and maintained in future. 3.08 More specifically, the project would substantially improve the pit emptying service for about 70,000 existing low-cost sanitation units. The project would promote public acceptance and adoption of better standards of low-cost sanitation and hygienic practices and provide improved latrines for about 40,000 people. Sewer service to about 6,000  - 14 - properties would be restored and this service would be provided to about 600 additional properties (paragraph 4.07) which have access but are not connected to the existing sewerage system. 3.09 Managers would be engaged to initiate proper operation and maintenance of the sewerage and sanitation services, to install satisfactory financial management and cost recovery systems and to train counterparts to take over. About 12 professional staff, 10 accountants and 40 technicians would be trained. Technological Alternatives 3.10 During project planning, alternative waste disposal systems were evaluated, particularly conventional water-borne systems (sewerage) versus low-cost on-plot sanitation. Then a decision was made by AIWHI, in consultation with IDA that, for cost reasons, sewerage would be a last alternative in Dar es Salaam, restricted to areas where population densities or physical conditions prohibit use of on-plot facilities. The on-plot alternatives provide the same health benefits and a:Lmost the same convenience as sewerage at a fraction of the construction and operating problems and costs, provided, however, that the institution and facilities required to service the on-plot installations (mainly pit emptying and sludge disposal) are adequate and that the people are educai:ed in basic personal hygiene. 3.11 Acceptance by the local authorities of the reality that sewerage will not be widely available in the foreseeable future has an important additional benefit. Potential future increases in water demand and the need for future expansion of water production, transmission and storage facilities will be reduced substantially. 3.12 In areas where sewerage will be used in Dar es Salaam, including those presently sewered, alternative means of sewage treatment and disposal were evaluated. The conclusion is that from cost, public health and environmental standpoints the best solution is to continue with the present sea outfall for the central sewerage system and with the use of waste stabilization ponds discharging to local streams for the other systems. Consequently the existing outfall and stabilization ponds will be rehabilitated. However, it has been agreed that once the existing systems are back in operation, the quality of the receiving waters will be monitored as the bases for changing operating procedures and for future design. By that time DSSD staff should be capable of performing the required monitoring. 3.13 The on-plot sanitation units to be installed or improved, and the supporting services, would be technologically appropriate with due consideration for financial and socio-cultural constraints. Planning and design has had the advantage of considerable recent research worldwide, including by the UNDP demonstration project (paragraph 3.03), investigations of local conditions (soil, water and climate), local practices (building and toilet) and acceptability. More than 100 demonstration units have been constructed (paragraph 3.05), surveys have been made, experiments with health education have been carried out and  - 15 - workshops have been held involving government officials representing health, education, municipal and urban development interests. In spite of this advance work, however, changes in design of the sanitation units are expected to occur as the result of experience gained during implementation of the project, particularly changes which would reduce costs. Description of Project Components 3.14 Project objectives are given in paragraphs 3.07 - 3.09 and the project is detailed in Annex 2. The principal components are as follows: (a) rehabilitation and improvement of existing sewerage facilities (Annex 2, paragraph 1A); (b) construction of pit latrines and replacement or conversion of inadequate existing on-plot sanitation units (Annex 2, paragraphs lB and 6-10); (c) improvement of DCC's pit emptying service (Annex 2, paragraphs 1B and 11); (d) establishment and development of a Sewerage and Sanitation Department (DSSD) in DCC (paragraphs 5.03 and 5.04); (e) provision of offices, workshops, equipment and spare parts required for the management, operation and maintenance of sewerage facilities and sanitation services; (f) technical assistance to ARDHI and to DCC with development of DSSD, with health education and extension services and for additional studies of sanitation related problems including solid wastes management; (g) training for professional and technical staff (paragraphs 3.09 and 5.07-5.09); (h) provision of consulting engineering services for detailed design and supervision of construction of this project and for detailed design of a Stage II project; (i) technical assistance to help NUWA become operational (paragraphs 1.07 and 5.10); (j) technical assistance to TANESCO (paragraph 5.08); and (k) aerial survey and photogrammetric mapping of Dar es Salaam (paragraph 5.14). 3.15 There is no provision in the project for construction of extensions to the existing sewerage systems. However, it is expected that some new sewerage facilities will be required in Stage II and the project includes consulting services for detailed design of these facilities. Also, the project does provide for new sewer service connections to existing sewers (paragraph 3.08).  - 16 - 3.16 Sewerage rehabilitation is a major component of the project. However, the nature of much of the work is such (Annex 2) that detailed requirements will be revealed gradually as the work progresses. Therefore, the extent and cost of the rehabilitation as a whole is uncertain and estimates are less reliable than normally considered acceptable when a credit is made. Consequently, a physical contingency allowance of 20% has been made for the most uncertain parts of the work. In this respect it should be noted that the most critical components (repair of the sea outfall, replacement of pumping and electrical equipment and reconstruction of stabilization ponds), which form about 65% of the rehabiLitation work, are self evident and have been studied in sufficient detail to permit development of reasonably reliable implementation timetables and cost estimates. The principal uncertainty is the amount of repairs and replacements required for submerged sewers, manholes and pumping mains (35% of the rehabilitation or about 10% of the base cost of the total project). To avoid cost overruns in the event that this part of the work proves to be substantially more costly than estimated, some repairs would be made on a temporary basis and the permanent work deferred to Stage II. Cost Estimates 3.17 The total project cost is estimated at about TSh 273.5 million (US$ 29.1 million) including foreign exchange costs equivalent to about TSh 124.5 (US$13.2) million. The estimates are summarized below and shown in detail in Annex 3 along with an estimated program of annual expenditures. PRQJECI ODST SUEtAY TSH Million US$ Million % Foreign % of Tctal Local Foreign Total local Foreign Total Exchange Base Costs A. Sewerage 68.7 61.2 129.9 7.3 6.5 13.I 47.1 62.5 B. Sanitation 35.5 29.7 65.2 3.8 3.2 7.C 45.5 30.6 C. Otber Technical Assistance TANES(OC 1.3 2.3 3.6 0.1 0.2 0.4 64.7 1.7 NLMA 5.2 9.1 14.3 0.5 1.0 1.' 63.9 6.7 Sub-Total Other Technical Assistance 6.4 11.4 17.9 0.7 1.2 1.9 64.0 8.4 Total Baseline Costs 110.6 102.4 213.0 11.8 10.9 22.7 48.1 100.0 Physical Contingencies 9.0 8.6 17.6 1.0 0.9 1.9 48.8 8.3 Price Cortingencies 29.4 13.6 43.0 3.1 1.4 4.5 31.6 20.2 TOTAL PRaJECT coSrs 149.0 124.5 273.5 15.9 13.2 29.1 45.5 128.4  - 17 - 3.18 The bases for the cost estimates are described in Annex 3. The base costs are at July 1982 prices. Unit prices are from the costs of recent works, quotations from suppliers and review of market prices by HHP and ARDHI. The costs of low-cost sanitation components are based on detailed quantity take-offs and equipment lists and a pilot construction program for pit latrines. As noted in paragraph 3.16, however, there is a degree of uncertainty about part of the sewerage rehabilitation component of the project (representing about 10% of the total base costs) because of the nature of the work. This is not considered to be a serious problem. 3.19 Local costs include local duties and taxes on direct imports and consulting services which are estimated at about TSh 31.5 (US$3.4) million (12% of total project costs). 3.20 Base costs include allowances for spares for rehabilitation and maintenance equipment of 15% and for vehicles, 10%. Allowances for physical contingencies have been added to base costs at Various rates: 5% for vehicles and technical assistance; 10% for equipment, land, new construction, about half of the rehabilitation work, training and engineering; and 20% for the balance of the sewerage rehabilitation. No physical contingency allowances have been included for service connections, low-cost sanitation units and miscellaneous vehicles since these are classed as program items. The total allowance for physical contingencies, is about 8.6% of all base costs except refunding of the project preparation advance. 3.21 Price contingencies have been applied to the July 1982 base costs, plus physical contingencies, assuming price increases as follows: Fiscal Year ending June 30 1983 1984 1985 1986 Local 15.0% 16.0% 13.0% 12.0% Foreign 8.0% 8.0% 7.5% 7.0% The total allowance for price contingencies amounts to about 21.1% of the total of base costs except refunding of the project preparation advance. 3.22 The base costs for consulting engineering services and expatriate advisors is about TSh 61.3 million. Of this, TSh 49.3 million is directly related to sewerage and sanitation; the balance is for technical assistance to NUWA and TANESCO. The costs of the consulting engineering contract for sewerage rehabilitation (paragraph 3.30) is for 83 man months of expatriate staff and 119 man months of local support staff. The average base costs of the expatriate staff under that contract is equivalent to about US$7,350 per man month. The average total cost of 12 expatriate advisors to DSSD and ARDHI for sewerage and sanitation (368 man months), under two or three year contracts, is estimated at US$7,000 per man month equivalent.  - 18 - 3.23 The estimates are based on the assumption that most construction work, including rehabilitation, will be carried out by locally based contractors. The estimated foreign exchange cost of the physical components are for imported materials, equipment and some specialized technicians that would be required. It is assumed that all vehicles, mechanical and electrical equipment and most pipe would be imported. Project Financing 3.24 The proposed IDA Credit (US$22.5 million), would finance about 87% of the total cost of the sewerage and sanitation component of the project excluding taxes, or 76% of costs including taxes. US$2.0 million would be utilized for financing 85% of the technical assistance for NUWA (paragraph 3.32)and TANESCO. The balance of the project funds required (about TSh 62.0 (US$6.6) million, including about TSh 31.5 (US$3.4) million to cover taxes) would come from internal cash generation and Government contributions. The proposed IDA financing of the sewerage and sanitation component is equivalent to 100% of the foreign exchange cost and about 74% of the local cost component, before taxes. Implementation 3.25 The project would be carried out jointly by ARDHI and DCC, with AARDHI having prime responsibility. Policy matters would be dealt with by a Project Management Committee which has been established. The Committee is chaired by ARDHI's Director of Sewerage and Drainage and includes designated key staff from DCC. In addition, a Project Implementation Unit (PIU), headed by a Project Manager, has been established in the Sewerage and Drainage Division of ARDHI with responsibility for procurement, administration of contracts with contractors and consulting engineers, project accounts and other project matters. The Project Manager is being financed from the PPF. Eventually his contract would be financed from the proposed credit. The PIU includes an ARDHI low-cost sanitation engineer, a project accountant and support staff. In addition, ARDHI would engage a social scientist to assist with the Project and with sanitation activities in other parts of Tanzania. It has been agreed that the Management Committee and the PIU will be maintained until completion cf the project and that the posts of Project Manager, low-cost sanitation engineer and project accountant will be filled with qualified and experienced personnel at all times. 3.26 The Chairman of the Project Management Committee and the Project Manager have played major roles on behalf of the Government in the preparation of the project since the middle of 1978. They are considered competent to continue their roles through the implementation phase provided, however, that the PIU is properly staffed.  - 19 - 3.27 DCC has played a minor part in project preparation due to institutional problems, including severe staff constraints (Chapter V), although DCC staff did take some part in preparation of the Project Proposal dated April 1981. DCC activity during project implementation would be devoted to: development of the new DSSD (paragraph 5.10) for which technical assistance would be included in the proposed project; an advisory role, mainly through the Project Management Committee; decisions about the location of new low-cost sanitation units; and health education of the public and promotion of the low-cost sanitation program. Contract staff for DSSD would be engaged by ARDHI and assigned to DCC. 3.28 ARDHI will enter into contracts for all major project supplies, equipment and construction. There will be about six contracts for sewerage rehabilitation. Low-cost sanitation units also will be constructed under contract with ARDHI in groups of 100 to 500 units. However, ARDHI intends to transfer responsibility for the construction contracts for low-cost sanitation units to DCC as soon as DSSD is competent to handle these. 3.29 Detailed design and the preparation of tender documents for construction of low-cost sanitation units would be completed by ARDHI, based on preliminary designs and recommendations by TAG (paragraph 3.03) and a pilot construction program completed in 1982 (paragraph 3.18). 3.30 Sewerage rehabilitation would be designed and construction supervised by consulting engineers. A contract between ARDHI and Howard Humphreys (Tanzania) Limited was signed on December 7, 1981 and work commenced early in January 1982. The consultants and the terms and conditions of the contract are acceptable to IDA. 3.31 New office buildings for DSSD and its Mechanical and Electrical Division, plus improvements to three existing depots, would be designed and supervised by locally based consulting firms, yet to be selected, under contract to ARDHI. It has been agreed that firms acceptable to IDA would be engaged under terms and conditions acceptable to IDA. Until the office buildings are ready, DCC would provide temporary space for DSSD. 3.32 MWE would appoint a firm of management consultants to assist NUWA to become operational (Annex 2, paragraph 23). The decision is expected shortly. The terms and conditions of the contract would be submitted to IDA for approval. It is expected that the initial stages of the consulting assignment would be financed from an existing IDA advance from PPF (CR. PO 93) for preparation of a Second Urban Water Supply Project, but that the balance of the assignment and other technical assistance required for NUWA would be financed from the proposed credit for the Sewerage and Sanitation Project. The consultant may also assist in adapting the TANESCO management information system to NUWA and DSSD needs. 3.33 Establishment of DSSD in the proposed form (Chapter V) was approved by the City Council, the Office of the Prime Minister and the Treasury in May 1982.  - 20 - 3.34 Land use rights would be acquired for the new DSSD buildings, dumping points for pit emptying vehicles and possibly for expansion of the three sewerage depots. It has been agreed that any required land and rights in respect of land shall be acquired as and when needed, or by June 30, 1983 whichever is earlier. 3.35 The implementation schedule for the project is given in Annex 4 and is realistic. Detailed design and preparation of tender documents for sewerage rehabilitation began in January 1982. The first contract awards are expected about April 1983. Design and procurement for an initial trial contract for 100 low-cost sanitation has begun with the contract award scheduled for April 1983. The sewerage rehabilitation should be completed by February 1985 and all other construction, by October 1985. Training will continue unitl June 1987. Resources Aspects 3.36 Rehabilitation of the existing sewerage systems is intended to improve significantly the quality of local streams and of the sea in the immediate vicinity of Dar es Salaam. The quality of the effluent from the restored stabilization ponds (paragraph 3.12) should be satisfactory for some types of irrigation. However, the quantities of effluent would be small, by irrigation standards, and investigations during the preparation of the Sewerage and Sanitation Master Plan (paragraph 3.02) did not produce any evidence of a-market for effluent near the points of discharge. Procurement 3.37 Works: The contracts for rehabilitation of sewerage structures and for the construction of DSSD's headquarters building, have an estimated total cost of about TSh 78 (US$8.3) million including contingencies, and would be procured by international competitive bidding (ICB) in accordance with IDA guidelines. Eligible domestic bidders would be afforded a preference of 7J% under ICB procurement. The balance of construction for the project, totaling about TSh 37 (US$4.0) million including contingencies, consists of minor works and buildings of estimated contract size less than US$1.0 million scattered throughout the city and not likely to interest foreign bidders. These works would be procured through local competitive bidding procedures, which were found at appraisal to be satisfactory to IDA, and in which foreign bidders would have the Opportunity to participate. 3.38 Goods: Equipment and vehicles, totaling about TSh 45 (US$4.8) million including contingencies, would be grouped in appropriate bidding packages and procured by ICB in accordance with IDA guidelines. Qualifying domestic manufacturers would receive a preference in bid evaluation of 15% or the import duty, whichever is lower. Miscellaneous items of equipment and furniture, in packages less than US$50,000 and totaling US$0.5 million approximately, would be procured under local competitive bidding procedures which were found at appraisal to be satisfactory to IDA.  - 21 - 3.39 Contract Review: All bidding packages for works estimated to cost over US$0.7 million equivalent and bidding packages for goods contracts over US$150,000 equivalent would be subject to IDA's prior review of procurement documentation resulting in a coverage of about 80% of the total estimated value of works contracts, and about 90% of goods contracts. In addition, the initial bidding packages of any type, regardless of size, would be subject to prior review by IDA . The balance of the contracts would be subject to selected ex-post review by IDA after contract award. Disbursements 3.40 The proposed allocation of proceeds of the proposed credit is given in Annex 5. In general, 100% of all foreign exchange expenditures would be financed from the credit. Local currency costs would be financed to the extent of 80% for consulting engineering and other technical assistance and civil works, and 50% for equipment, furnishings and vehicles. Local currency financing by IDA would exclude financing of local import duties and taxes. 3.41 Forecasts of annual project expenditures are shown in Annex 3. Actual payments and credit disbursements may occur much later as indicated by the estimated schedule of disbursements shown in Annex 6. The schedule of disbursements is based on the country-wide disbursement profile for Tanzania; the region-wide disbursement profile for the sector is considered to have an insufficient sample size. The profile was adjusted to eliminate time required after 95% disbursement and to account for an implementation period 18 months less than average. The proposed closing date would be December 31, 1987. 3.42 The PPF advance for preparation of the project would be refinanced from the proposed credit. Retroactive financing of up to US$0.5 million for the early stages of the consulting engineering contract for sewerage rehabilitation (paragraph 3.30) and for mapping Dar es Salaam is recommended. This would cover the estimated costs of those contracts through about March 1983. IV. FINANCIAL ANALYSIS Past Performance 4.01 Records of operating costs for both the piped sewerage and pit latrine emptying services are very poor owing to inadequately designed and unevenly kept records, particularly during the period 1974-1978 (paragraph 1.13). Therefore, the recurrent costs of these services cannot be ascertained. Asset values also are not available as records were disrupted during the 1974-78 period. Efforts are being made by the City Treasurer and his staff to update and reconstruct these records but success is unlikely since the task is enormous and qualified staff are scarce.  - 22 - 4.02 Monthly billing for sewerage services is currently based on the 5,800 connections that were known at end-1973. Connections are known to have been made since then but have not been recorded. During 1980 TSh 614,000 (US$65,000) were billed in total and TSh 271,000 (IJS$29,000) were collected, but portions of both the sums billed and collected may have been for previous years as DCC is billing arrears from 1974. Billing is based on water consumption estimates, obtained from DCS (paragraph 2.13), of 3,333 gallons monthly per connection at TSh 3.65 (UScts.39)/1000 Ig. On this basis the annual billing should be a minimum of TSh 850,000 (US$90,000). However, there is no control over the billing, either to ensure that all known connections are billed or to pursue collection of the bills rendered. 4.03 Charges for pit latrine and septic tank emptying services currently average about TSh 20 (US$2.13) (paragraph 4.10). An additional charge of TSh 240 (US$25.53) per pit is made if sludge has to be removed manually; and for certain institutions TShs 75 (US$8.00) per load is charged. Private customers are required to pay estimated charges in cash before service is rendered but Local Purchase Orders (LPO's) are accepted from Government agencies. Apart from despatching the bills and recording each bill, no monitoring or control systems exist. Outstanding accounts for Government departments which obtain service on credit (LPO's) are not pursued. Future Financial Performance 4.04 The appraisal mission has made financial forecasts for DSSD for the financial years 1983-87, separated into Low-Cost Sanitation (Annex 7) and Sewerage Operations (Annex 8). These two forecasts have then been consolidated (Annex 9) to show the potential future financial position of DSSD as a whole. The assumptions used in the forecasts are given in Annex 10. 4.05 Charges/Revenues for Sewerage Operations. Revenue estimation from billing data is inaccurate because some institutions and major industries are not currently billed. For FY84, the maximum revenue that can be hoped for is estimated at about TSh 4.0 million or about 11% of the revenue target for FY85. 4.06 The sewerage system is scheduled to resume operation during FY85 when it is anticipated that the new financial management and accounting unit of DSSD will bring a new accounting system into operation. In FY85 and subsequent years revenues are therefore based on internal cash generation of 20% of capital investment expenditures (paragraph 4.09). Construction expenditures for Phase II and subsequent phases of the Dar es Salaam sewerage development are not yet known, therefore the notional construction expenditures (Annex 8) shown for FY86 and FY87 are about the levels that could be sustained on the basis of a 20% capital contribution, using the FY85 charge per connection to calculate revenues from sewerage charges for each of these years. 4.07 The estimated average monthly charge per sewer service connection on the above basis for FY85 is TSh 455 (US$48), or TSh 338 (US$36) at 1982 price levels. However, charges are on a base of 5,800 corLnections  - 23 - (paragraph 4.02) assumed to increase at about 300 per annum beginning in FY84. The actual number of existing connections may be much higher - estimates of 10,000 and 24,000 have been made - and the average service charge could prove to be 50% or more below the above estimate. The existing number of connections and the potential rate of increase will not be known until a house-to-house survey (paragraph 5.13) is carried out. 4.08 Although sewerage charges made currently are based on water consumption (paragraph 4.02), only about 25% of water consumers have operatinig meters and most water consumption is estimated for both domestic and industrial consumers. Furthermore, some industries and major institutions are not even billed for services. Therefore the present basis for sewer service charges is not satisfactory. During negotiations agreement was reached that a study to determine the appropriate structure and levels of sewer service charges would be carried out and recommendations resulting from the studies, as agreed by Government and IDA, would be implemented during 1985. 4.09 The proposed proportion of 20% investment expenditures to be generated from sewerage revenues is justified because sewerage is highly capital intensive. Revaluation of the existing sewerage system yields a gross value of TSh 216 (US$23) million, or TSh 34,000 (US$3,600) per property served (for 10,000 properties) including TSh 12,000 (US$1,300) for the service connection, all at 1982 prices. By comparison, the cost of a pit latrine at 1982 prices is estimated at TSh 3,800 (US$404) (para. 4.04). The capital intensity of sewerage used to benefit institutions, commercial areas and a relatively small proportion of the population justifies the operations contributing to future expansion,especially in view of limited Government budget capacity to provide local costs. Agreement was reached during negotiations that beginning with FY85, DCC would fix the charges for sewerage services for each year at levels that would produce funds from internal sources equivalent to a minimum of 20% of the average sewerage capital expenditures for that year, the previous year and the next following year on the understanding that the percentage would be reviewed following the survey of connections (para. 5.13) and the sewerage charges study (para. 4.08) 4.10 Charges/Revenues for Low-Cost Sanitation. Currently the average charge for pit emptying is Tsh 20 (US$2.13) per load (trip of a vacuum tanker from the pit latrine or septic tank to the dumping point). This average is based on charges of Tsh 16 (US$1.70) for domestic and other small premises, Tsh 75 (US$7.98) for industry and commerce and Tshs 240 (US$25.53) for major institutions. For FY83, forecast revenues are based on an estimated10/ average load charge of TSh 75 (US$8.00) derived from a charge of TSh 60 (US$6.38) per load for domestic and other small premises and TSh 260 (US$27.66) for industry and major institutions. These charges are currently under consideration by DCC. 4.11 For FY84 and subsequent years, assumed revenues are those required to cover operating costs including interest and the greater of depreciation or debt repayment. The average charge per load arising on this basis in FY84, is TSh 180 (US$19.15), equivalent to TSh 149 (US$15.85) 10/ Mission estimates  - 24 - at 1982 price levels. Although these charges may appear high, currently many pit latrines and septic tanks are emptied by private contractors at a charge of TSh 500-600 (US$53.19 - 63.83) each. Furthermore, pit emptying for latrines is required only about once every five years. Agreement was reached during negotiations that for FY84 and each year thereafter, charges for pit latrine and septic tank emptying would be fixed to earn revenues adequate to cover operating costs, interest, plus the greater of depreciation or repayment of debt. 4.12 In addition to the latrine emptying charges, interest would be earned on the loans to be made to householders for the upgrading and construction of pit latrines. The individual loan would average TSh 3800 (US$404) at 1982 price levels for each latrine, for 15 years at 10% interest annually. The borrower would sign a loan agreement. Equivalent arrangements should be made for financing sewer service connections. During negotiations agreement was reached that lending for pit laLrine upgrading and construction, and for sewer service connections, would be made on these terms. 4.13 Collections. Currently little or no effort is made to collect outstanding accounts either for pit emptying or sewerage charges (paragraphs 4.02 and 4.03). Because of the difficulties experienced in obtaining payment for credit, many parastatal and private organizations now require Government departments and other entities to make advance payment for goods and services. DSSD would follow this practice fDr pit emptying. During negotiations it was agreed that no credit will be given for pit emptying services, all payments being required in advance. 4.14 The proposed DSSD finance/accounting unit (paragraphs 5.10 and 5.11) is expected to be operational using computerized billing methods before December 31, 1983. Billing would be carried out on TANESCO's computer with parallel bills being produced for electricity, water, sewerage charges and debt service for latrine loans. Initial steps have been taken to form a committee - the financial directors of TANESCO and of NUWA and DSSD, as soon as they are appointed - to implement the systems. Agreement was reached during negotiations that Government will arrange that authority be given to TANESCO, NUWA and DSSD for parallel billing and that outstanding accounts for sewerage charges and debt service would not exceed the equivalent of the previous three months billings. After a trial period of two years the system would be reviewed by the three agencies in consultation with IDA. 4.15 DSSD Future Operations. Based on the foregoing and assuming escalation of operating costs at 11%, 10%, and 9% for 1982, 1983, 1984 and thereafter respectively, consolidated DSSD revenues will increase in steps from TSh 3.6 million (US$0.38 million) for FY83 to TSh 61.5 million (US$6.5 million) in FY87, or at an annual average rate of increase of 103%. Consolidated operating costs over the same period will increase from TSh 13.4 million (US$1.4 million) to TSh 41.1 million (US$4.4 million) or at an annual average rate of 32%. The operating ratio will be transformed from 369% in FY83, producing an operating loss of TSh 9.8 million (US$1.0 million) for that year, to 67% with an operating income of TSh 20.5 million (US$2.2 million) for FY87.  - 25 - 4.16 Current Assets/Liabilities. Based on tighter control of collections, and on continuation of the current DCC practice of paying before receipt of goods and services, and provided that inventories are maintained at acceptable levels, the current ratios will increase rapidly from 1.9 in FY83 to 3.9 by FY87. Cash available in FY86 and FY87 is high due to the assumption that there would be no capital expenditures for low cost sanitation in addition to the project. However, there could be some capital expenditures for vehicle replacements and additional lending for pit latrines during these years. Financing Plan 4.17 DCC is expected to invest TShs 251.5 million (US$26.7 million) for project purposes during the period FY83-87; in addition TShs 10.5 million (US$1.1 million) would be expended for sewer connections in FY86 and FY87 and TSh 133.7 million (US$14.2 million) for Phase II costs. The total capital investment of TSh 395.7 million (US$42.1 million) would be financed by Government onlending and grants, towards the cost of the project. The balance of DCC project financing would be met from internal cash generation. Government would also provide subsidies of TSh 14.0 million (US$1.5 million) for FY83 and FY84 operations and TSh 111.6 million (US$11.9 million) towards assumed Phase II expenditures in FY86 and FY87, DSSD's balance of these costs would come from internal cash generation. On this basis the financing plan is as follows:  - 26 - MILL ION S TSh TSh US$ 1983 1984 1985 1986 1987 Total 'rotal % Internal Cash Ge(ration -3.6 3.1 34.9 38.4 39.7 112.5 l2.0 28.4 Contributions for Sewer Connecttorr - 4.1 4.5 5.0 5.5 19.1 2.0 4.8 Grcss Internal Cash Gen. -3.6 7.2 39.4 43.4 45.2 131.6 14.0 33.2 Less: Debt Service aid Workng Capital 3.9 9.6 23.1 20.6 27.3 84.5 9.0 21.3 Available for Investment -7.5 -2.4 16.3 22.8 17.9 47.1 5.0 11.9 Goverrunt Equity - Subsidies 7.5 6.5 - - - 14.0 1.5 3.5 - Project 20.9 26.0 13.4 7.1 - 67.4 7.2 17.0 - Phase II 55.9 55.7 111.6 11.8 28.2 Total Equity 28.4 32.5 13.4 63.0 55.7 193.0 20.5 48.7 Goviernmert lending ir- cluding IDACredit 27.9 79.0 56.3 0.5 - 163.7 17.4 41.4 Deduct Surplus Cash - - - -4.1 -4.0 -8.1 -0.9 -2.0 Total Sources 48.8 109.1 86.0 82.2 69.6 395.7 42.0 100.0 Capital Ex4enditure - Project 48.6 103.8 76.4 7.1 - 235.9 25.1 59.6 - Loans mae 0.2 5.3 9.6 0.5 - 15.6 1.6 3.9 Total for Project 48.8 109.1 86.0 7.6 - 251.5 26.7 63.5 Sewer Conmections 5.0 5.5 10.5 1.1 2.7 Phase II Construction 69.6 64.1 133.7 14.2 33.8 Total Investme:nt Expenditures 48.8 109.1 86.0 82.2 69.6 395.7 42.0 100.0  - 27 - 4.18 Future Financial Position. The financial position should improve as soon as the facilities and institutional improvements provided under the proposed project become operational. DSSD should be able to cover operation and maintenance costs and generate contributions of 7% to capital expenditures in FY83-FY87, an improvement over the present situation. 4.19 The debt/equity ratio will be 33/67 in FY87 and the current ratio will be 3.9, largely due to the inclusion in current assets of surplus cash of TSh 38 (US$4.04) million that will be available for investment for new pit emptying vehicles or lending for additional pit latrines. On the assumption that future capital expenditures will be made prudently, the financial position would remain sound. However, to safeguard DSSD's financial situation, it was agreed at negotiations that DCC would not incur future long term debt on behalf of DSSD without prior consultation with IDA unless cash generation of DSSD for the preceding fiscal year is at least 1.5 times future debt service, including on the proposed new borrowings. Project Monitoring Indicators 4.20 The recommended project monitoring indicators are listed in Annex 11. A completion report would be prepared by ARDHI and DCC. V. BORROWER AND IMPLEMENTING AGENCIES Lending Arrangements 5.01 The Borrower would be the Government of Tanzania. About TSh 119.7 million (US$12.8) million of the credit would be onlent to DCC for 25 years, including five years grace, at 11% p.a. interest. About TSh 72.4 (US$7.7) million would be passed on as a grant. TSh 4.4 (US$0.5) million and TSh 15.0 (US$1.6) million would be passed by Government to TANESCO and NUWA respectively on a grant basis, covering the technical assistance components included in the project for these two organizations. Completion of the onlending agreement between Government and DCC would be required as a condition of effectiveness. Organizations 5.02 ARDHI (paragraph 2.12) would have prime responsibility for implementation of the physical components of the project (paragraphs 3.25-3.31). Assets provided by the project (except private low-cost sanitation units) would become the property of DCC and rehabilitated assets would remain the property of DCC. DCC, through the new DSSD (paragraph 3.14), will play a role in the implementation of the low-cost sanitation aspects of the project and will have responsibility for operation of the sewerage and sanitation systems. DCC will also be responsible for establishing DSSD and, in coordination with its parent ministry, the PMO, recruit the permanent staff required to operate DSSD.  - 28 - Dar es Salaam Sewerage and Sanitation Department (DSSD) 5.03 Both the Master Plan for Dar es Salaam sewerage and the Project Feasibility Report recommended that sewerage and sanitation services remain the responsibility of DCC until such time as a national parastatal would be ready to assume this responsibility (at least 5 years). Currently, responsibility for sewerage and sanitation within DCC is divided among the City Treasurer, City Engineer, Chief Health Officer and the Chief Workshop Mechanic. In order to bring commercial management attitudes to the physical and financial operations and to train the personnel in parastatal type organizations, it was agreed at negotiations that DCC will form a separate department to discharge DCC's statutory responsibilities. 5.04 The department, called the Dar es Salaam Sewerage and Sanitation Department (DSSD), would operate on semi-commercial lines. It would be a self-contained, semi-autonomous department reporting to the City Director, incorporating all the services and functions including administration, personnel, finance and accounting, necessary to carry on the sewerage and sanitation operations. A draft organization chart is given in Annex 12. Management and Staff 5.05 The General Manager, Finance Manager, Transportation and Equipment Manager, Sewerage Manager, Sanitation Manager, Mechanical and Electrical Engineer, Health Educator, Legal Advisor and the Training Adviser would be expatriates financed from the proceeds of the Credit for the first two or three years of DSSD operations (Annex 2). The appointment of the key officers would be a condition of effectiveness. 5.06 Although a draft organization chart is given in Annex 12, the General Manager would be required to devise the most appropriate organization for DSSD, which should follow that of TANESCC as closely as possible to ensure the maximum benefit from adopting TANESCO's management operating and information systems (paragraph 5.10). 5.07 Staff for other positions would be found from among the existing staff in DCC or from outside. One of the major tasks of the departmental management would be the job definitions for staff positions within DSSD from which a manpower demand forecast can be prepared. Preferably, counterparts for the expatriate position holders should be identified quickly but not at the expense of quality as demonstrated by both qualifications and experience. The quality, volume and time span of training and experience required to qualify Tanzanians for the staff positions would be derived from the manpower forecast, and after taking account of people available to fill the positions. Management Development and Training 5.08 Staff recruited for technical positions are most: likely to come from DCC and be conversant with some aspects of sewerage and sanitation operations. Administrative and accounting staff will be new and inexperienced in the office procedures that they will be required to undertake. They will be trained in the operations of TANESCO's management  - 29 - information system (paragraph 5.10) as adapted to sewerage and sanitation operations . Management consultants are being provided from project funds (paragraph 5.11) to adapt the TANESCO systems for DSSD use and they will assist DSSD management in specifying the type of training, numbers required to undergo the training and the curricula to be followed. Training would be at TANESCO's training school in Dar es Salaam and the project funds include an allowance for the cost of training - including a TANESCO expatriate commercial training officer - for TANESCO, DSSD and NUWA staff. 5.09 Instruction to be given in the operations, administrative, and accounting systems will be job specific in the use of the various input forms for, and output reports from, the computer based system (paragraph 5.11). Clerks will be trained in the new procedures. Accountants will be taught how to interpret and use the monthly and annual reports. The school is expected to use experienced staff for such tuition under the supervision of the TANESCO commercial training officer (para. 5.08). Management Systems 5.10 The proposed DSSD will be a new organization intended to operate as a semi-autonomous department of DCC responsible for arranging its own financing through the auspices of DCC and Government, in its early years. NUWA is also a new organization operating in the same public utility environment as DSSD. If DSSD is to be merged into NUWA in the future and build an effective sewerage and sanitation organization country wide, both organizations should have the same operating, administrative and management information systems from the beginning. TANESCO, the major public utility in Tanzania already operates nation wide and has the basic operating and management information systems that both DSSD and NUWA can adopt to operate effectively. The TANESCO system covers project control and monitoring, contract and capital works job costing, personnel records and payroll, billing and consumers accounting, inventory control and management, fleet operation accounting and all the records and periodic reports necessary for efficient public utility operation and management. 5.11 The system is based on data processing by a computer already operated by a long established and effective computer department. TANESCO has acquired a new computer, the configuration of which can be expanded to meet NUWA and DSSD needs. Some systems analysis assistance would be required to adapt the existing programs to DSSD and NUWA use; provision is included in the project to provide technical assistance for this purpose. A major objective in adapting the existing computer programs for consumers' billing would be to prepare parallel bills to consumers for electricity, water, and sewerage and sanitation each month. Coupled with appropriate sanctions for non-payment, parallel billing of all public utility charges should improve consumers administration, reduce costs, improve collection for water, sewerage and sanitation services and impose billing disciplines currently absent from those operations. However, recourse in the event of non-payment of sewer service charges and loan installments for latrine construction is difficult and there is the risk that reaching satisfactory collection levels could take longer than planned.  - 30 - 5.12 TANESC0 would be paid by NUWA and DSSD both for the cost of any training and a monthly charge based on the number of transactions processed for each organization, covering the services provided. These would cover control of transactions for computer processing, processing and delivery of reports at terminals and printers located in the offices of each organization. 5.13 An essential part of the management systems improvement included in the project would be a door-to-door survey in Dar es Salaam to ascertain the premises connected to sewerage, water and electricity systems (Annex 2, paragraph 18). DSSD and DCS consumer records are incomplete (paragraph 4.02) and require updating before effective billing can be achieved. TANESCO records are generally good except for some consumer account/plot number relationships in squatter areas. When the computer system is ready to record the data, the survey would be carried out by students under the supervision of representatives of DCC/ARDHI, DCS/NUWA and TANESCO and under the general direction of an advisor who would design the survey. The survey should require about 270 man months at a total estimated cost of about TSh 160,000 (US$17,000) which is included in the estimated project costs. 5.14 Up-to-date maps of the city would be required for the above survey. The project would include an aerial survey and photogrammetric mapping (paragraph 3.14-k), already in progress, at a cost of about US$250,000 equivalent. Audit and Insurance 5.15 The audit of DCC is carried out by the Auditor-General of Tanzania who is acceptable to the Bank as auditor for other projects implemented by Government departments. 5.16 Annual accounts had been prepared by the City Treasurer to the end of FY79 but neither the accounts for FY78 or FY79 had been issued pending the settlement of auditors' comments and queries. City accounting is in a poor condition as the City Treasurer does not have an adequate number of qualified staff. 5.17 DCC currently self insures all its assets with the exception of vehicles for which it carries third-party cover. Assurances were obtained during negotiations that project equipment and materials will be covered by marine and transit insurance to site including the necessary foreign exchange needed to replace equipment and materials lost or damaged.  - 31 - VI. ECONOMIC AND SOCIAL ANALYSIS Project Benefits 6.01 Project objectives are described in paragraphs 3.07-3.09. Justifications for the sewerage component of the project are institutional development (paragraph 6.05) and that it would rehabilitate the existing sewerage infrastructure in Dar es Salaam, improve maintenance and utilization of its existing capacity and prepare for future extensions to the sewerage systems to areas where low cost sanitation would not be appropriate because of population density or soil and water conditions. The rehabilitation will improve the sanitary conditions by preventing the direct discharge of untreated raw sewerage to storm drains, streams, the harbor and beaches (paragraph 2.20). Public health would be improved and the frequency of occurrence of sanitation related diseases would be reduced. 6.02 The sewerage systems when rehabilitated, will serve only about 10% of Dar es Salaam's population of about one million. Therefore, the project would focus particularly on low-cost sanitation which would serve the remainder of the city's population, and whose present on-plot excreta disposal systems and hygiene practices contribute heavily to the mortality ana morbidity profiles of the city. In thus addressing the basic sanitation needs of the whole population of a major city, rather than just the minority served by sewerage, the project would be the first of its type to be financed by IDA . 6.03 Although only 3,700 of the improved pit latrines are included, out of an estimated total requirement of about 18,000 by 1984 (paragraphs 2.35 and 2.36), the project would be a first step in introducing improved designs and systematic methods of project implementation. It is expected that the project would encourage adoption of the improved units by households and communities in other areas, both within Dar es Salaam and in other parts of the country . 6.04 Substantially all of the population of Dar es Salaam should benefit from the project. The most direct beneficiaries would be the approximately 60,000 people with an improved sewerage service and at least 40,000 people with new or reconstructed pit latrines (paragraph 3.08). Nearly equal benefits would accrue to the balance of the city's population through improved pit emptying services and the reduction of pollution and health hazards now existing because of defunct or inadequate sewerage and sanitation facilities. The health and personal hygiene education and promotion component of the project (Annex 2, paragraph 24) also should benefit people not directly served by the project. 6.05 A major project benefit will be the establishment of an institution (DSSD) and the development of the services required for sewerage and sanitation facilities to be properly operated, maintained and expanded in future.. The institution is expected to be the core of a future Tanzanian national institution for sewerage and sanitation.  - 32 - 6.06 The implementation of an effective cost recovery system would be a critical part of the institutional development. Maintenance and expansion of sewerage and sanitation facilities have been hampered partly by poor cost recovery in the past, depriving DCC of the funds necessary to operate and maintain the sewerage system and provide adequate emptying services for pit latrines and septic tanks. In the prevailing situation in Tanzania in which budget funds are scarce, full cost recovery for both sewerage and low cost sanitation is necessary and is a project objective (paragraphs 4.07-4.16). Least Cost Solution 6.07 Project studies - and experience in the world generally - have established that properly designed and maintained on-plot sanitation facilities are the least costly means of satisfactory excreta disposal, costing perhaps 20% of the cost of the sewerage alternative per household served. In Dar es Salaam the waste disposal program would concentrate upon on-plot units, limiting the waterborne sewerage system to areas where population densities or physical conditions prohibit the use of on-plot facilities (paragraph 3.10 and paragraphs 6 and 7 of Annex 2). 6.08 The project studies also demonstrated that the most economic solution for the existing sewered areas would be to refurbish and improve the existing sewerage systems (paragraph 3.12 and Annex 2, paragraphs 14 and 15). The consultants' economic analyses indicated that, over the 30-year master plan period, the proposed sewerage and sanitation plan (with stabilization pond-strategy) would be less expensive than any of the alternatives considered at all discount rates below 25%. Rate of Return and Pricing 6.09 Monthly sewer service charges per connection are estimated to average between TSh 338 (US$36) and TSh 100 (US$11) depending on whether there are 5,800 connections or 24,000 connections to the existing systems (paragraph 4.07). The internal rate of return of the sewerage rehabilitation component of project would be about 6.9%, taking account of all capital and operating costs, excluding duties and taxes and shadow pricing foreign exchange at a factor of 2.13 and local labor at 0.9. A 10% increase in costs would reduce the return to about 5.2%. A decrease in revenues of 10% would reduce the return to about 5.1% (Annex 14). 6.10 For the low-cost sanitation component of the project, the householders will borrow the cost of the latrine and pay for emptying it about once every five years. The pit latrine emptying service to be provided will enable the backlog in latrine emptying to be met by about 1984 when the service becomes fully operational. The cost per load for emptying is estimated at 1982 price levels at TSh 180 (US$1.9) (paragraph 4.11) based on 69,000 loads annually when the vehicle fleet; is fully operational. Using revenues derived from these charges and the householders contributions for improved latrines as the benefit streams, and the capital and operating costs of the low cost sanitat:ion unit, excluding taxes and shadow priced for foreign exchange and local labor at  - 33 - factors of 2.13 and 0.9 respectively, the internal rate of return of the LCS component of the project is estimated at 5.9%, which is acceptable because of the benefits which cannot be quantified. An increase in capital costs of 10% has no effect on the return. A 10% decrease in benefits would reduce the return to about 3.2%. Details of the return calculations are given in Annex 14. Impact on Poverty Group 6.11 The existing housing and sanitary conditions in the poor areas of Dar es Salaam (paragraphs 2.32 through 2.34 and in paragraphs 14-21 of Annex 1) indicate that substantially all of the population benefiting from the low-cost sanitation component of the project would be within the poverty group. Low income squatter areas where malfunctioning of the existing sewerage system and pit emptying practices create gross pollution and serious health hazards would benefit most from the sewerage component of the project. 6.12 The fact that the most low income houses are owned by landlords implies that the project would have a large impact on low income people renting rooms with the costs of the improved latrines and emptying charges being recovered in the monthly rents. The annual economic cost per house is estimated at TSh 394.00 (US$42) and the annual per capita cost at TSh 39.00 (US$4), or TSh 33.00 (US$3) and TSh 3.00 (US$0.32) per month respectively (Annex 13). About 85% of the families in Dar es Salaam were estimated in 1980 to have monthly expenditures exceeding TSh 188 (US$22.70).11/ Since about 3.1 families on an average occupy each house they should each be able to afford the monthly charge of TSh 33.00 (US$3.00) per family for an improved pit latrine. Project Merit and Risks 6.13 The project will have an appreciable impact on the environmental, sewerage and sanitation situation in Dar es Salaam and hopefully lead in time to the continuing improvement of the sector situation throughout Tanzania. 6.14 Project risks are the possible failure of DSSD to develop as the efficiently operating organization envisaged so that it fails to maintain the rehabilitated sewerage system and expand on the low-cost sanitation pioneering effort. The project includes training and experienced expatriate assistance initially, in an effort to mitigate this risk and future projects should continue the institution building endeavor. There are risks of failure to achieve financial targets, including adequate collection of charges (paragraph 5.11), and to avoid delays. 6.15 Another major risk is that foreign exchange may not be available in the future to pay for imported spare parts for the equipment and vehicles being provided under the project. Lending for a second phase project would help to obviate such a situation. Close monitoring by IDA should take place to assure timely availability of funds for these purposes. 11/ Bureau of Statistics, Household Budget Survey 1976-77, updated to mid-1980 at 4% compounded p.a.  - 34 - VII. AGREEMENTS REACHED AND RECOMMENDATIONS Agreements Reached 7.01 During negotiations, assurances were obtained from the Government on the following: (a) the quality of the receiving waters to which stabilization ponds discharge treated wastes and of the sea in the vicinity of the ocean outfall would be monitored (paragraph 3.12); (b) the Management Committee and the Project Implementation Unit would be maintained until completion of the the Project, and the posts of of project manager, low-cost sanitation engineer and project accountant would be filled with qualified and experienced personnel at all times (paragraph 3.25); (c) to assist in carrying out the project, experts would be employed, whose selection, qualifications and terms and conditions of employment would be satisfactory to IDA (paragraphs 3.15, 3.30-3.32 and 5.05); (d) acquisition of any required land or land rights would be completed as and when needed but not later than June 30, 1983; (paragraph 3.34); (e) by June 30, 1984 a study comparing the costs involved in serving different categories of customers would be completed; by December 31, 1984, proposals for a new tariff structure would be prepared; and, promptly thereafter, the Government would take steps necessary to implement the tariff structure proposals taking IDA comments into account; (f) beginning in FY85 sewerage tariffs would be adjusted from time to time to generate funds from internal sources equivalent to a minimum of 20% of average sewerage capital expenditures for that year, the previous year and the next year. (paragraph 4.09); (g) beginning in FY84, charges for pit emptying services would be fixed to earn revenues adequate to cover operating costs, plus depreciation or repayment of debt, whichever is greater, and interest charges (paragraph 4.11); (h) arrangements, satisfactory to IDA, would be made to enable householders to borrow funds, under terms and conditions acceptable to IDA, for the construction or upgrading of pit latrines and for sewer service connections (paragraph 4.12); (i) payment for all pit emptying services would be made in advance(paragraph 4.13);  - 35 - (j) charges for electricity, water and sewer service and for debt service on loans for pit latrines or sewer service connections would be billed on a parallel basis and outstanding accounts for sewerage charges and debt service would not be allowed to exceed the equivalent of the previous three months billings (paragraph 4.14); (k) DCC would not incur additional long-term debt on behalf of DSSD without prior consultation with IDA unless cash generation for the preceding fiscal year is at least 1.5 times future debt service, including on the proposed new borrowings (paragraph 4.19); (1) the proceeds of the credit allocated for acquisition, construction or rehabilitation of sewerage and sanitation facilities would be onlent to DCC on terms and conditions satisfactory to IDA (paragraph 5.01); (m) the proceeds of the credit allocated for technical assistance would be passed on as grants (paragraph 5.01); (n) a survey of service connections for sewerage, water supply and electricity would be made by December 31, 1983 (paragraph 5.13); (o) the Auditor-General of Tanzania would audit DCC beginning with FY83 (paragraph 5.15); and (p) adequate provision would be made for the insurance of imported goods to be financed out of the proceeds of the Credit (paragraph 5.17). 7.02 The following would be conditions of effectiveness: (a) execution of the subsidiary loan agreement between the Government and DCC (paragraph 5.01). (b) the appointment of key officers of DSSD (paragraph 5.05); Recommendation 7.03 With the above agreements, the proposed project is suitable for an IDA Credit of US$22.5 million equivalent including retroactive financing of consulting services in an amount not exceeding US$500,000 equivalent (paragraph 3.42).  - 36 - ANNEX 1 Page 1 of 5 TANZANIA DAR ES SALAAM SEWERAGE AND SANITATION PROJECr Existing Water Supply, Sewerage and Sanitation Systems Health Information 1. The major causes of mortality and morbidity in Tanzania are diseases associated with poor sanitation, poor nutrition and lack of health knowledge.l/ High rates of various water borne, water washed and vector carried infectious diseases, a consequence of poor sanitatiDn, include: malaria, the largest source of mortality and mobidity; schistosomiasis, with a prevalance estimated at twenty percent nationwide; gastroenteritis and other diarrheas, which ranked fourth in percentage of hospital admissions and among the five most common causes of deaths in hospitals.2/ Tanzania has suffered five outbreaks of cholera since 1974; the 1977-78 epidemic killed over 1,500 people. 2. For decades municipal administrations in Tanzania maintained and published periodic reports including vital statistics. Owing to the changes in municipal administration since.1974 (paragraphs 1.03 and 2.21), this practice has not been continued in the immediate past in Dar es Salaam. However, DCC medical officials compiled a partial report on the incidence of some of the common communicable diseases in Dar es Salaam for the period January through September 1979 and which shows dangerously high levels for a city with a population of nearly one million: Diseases Reported cases Malaria 166,000 Schistosomiasis 19,000 Diarrhoea (excluding cholera) 47,000 Hookworm 7,400 Existing Water Supply System and Standard of Service 3. Two of the three major water supply sources for Dar es Salaam are on the Ruvu River. The upper Ruvu Treatment Plant, constructed in 1959 and expanded five times since then, has a capacity of 85,000 m3/d. The lower Ruvu Treatment Plant, constructed in 1976, has a capacity of 180,000 m3/d which can be expanded to 270,000 m3/d. Water from these two sources is pumped to the Kimara and University Reservoirs respectively before 1/ Health In Tanzania, USAID, 1979. 2/ In addition, ankylostomiasis, amolbiasis, giardiasis, hepititis, filariasis, tinea, and scabies are common.  - 37 - ANNEX 1 Page 2 of 5 distribution by gravity to the high zones. The third source of water is the Mtoni Treatment Plant (capacity 5,000 m3/day) located to the south of the urban area and which draws water from the Buza Reservoir on the Mzinga River and from the Mtoni River for treatment and pumping into the distribution system. The high and low zones of the distribution system are interconnected. 4. According to MWE officials, the existing water sources are adequate for Dar es Salaam until 1987 or 1988 without control on the Ruvu River. After then, when the upper Ruvu Treatment Plant is expanded, lack of river regulation could cause water shortages during two or three months of the year. Water production from these sources at present averages between 120,000 to 180,000 m3/d according to various estimates; accurate figures do not exist because flow meters do not function at any of the plants. 5. The existing public water supply system does not provide satisfactory service, in spite of the fact that the installed capacity of treatment and transmission facilities appears ample. Estimates of losses due to leaks in the transmission and distribution systems range from 25% to 50% of water production. There are frequent interruptions of supply and in some parts of the system, particularly in the high zones, water seldom is supplied on a continuous basis. On a number of recent occasions, substantially untreated water has been distributed because of shortages of chemicals. Distribution mains are undersized, expecially in the city center and the interconnections between pressure zones are defective. Pumps often are broken down and because of poor maintenance their useful life in Dar es Salaam is only about 10 years. There is no measurement of water production and metering of water use is totally inadequate. Although all service connections are supposed to be metered (except public standpipes), it is estimated that only 25% have functioning meters. 6. There is no reliable information on the population served by the public water supply system or of the numbers of people provided with the available levels of service. However, it is reasonable to assume that nearly 100% of the population of the urban sections of the Dar es Salaam region obtain their water in one way or another from this system. In some cases this may be supplemented from other sources (Chapter II, paragraph 2.16). 7. Three general levels of water supply service are provided as follows: (a) individual full service connections to residences, and practically all industries, institutions and commercial establishments, which have fully or partially plumbed internal systems, including flush toilets;  - 38 - ANNEX 1 Page 3 of 5 (b) individual plot connections with only an external tap or partial internal plumbing, but not including flush toilets; and (c) public standpipes where water is obtained by householders or by vendors who sell to households. 8. According to WCS, there were about 35,000 individual water service connections in 1980 and about 550 public standpipes. The actual number of direct water service connections could have been much higher than 35,000 in 1980 since illegal connections are a major problem. From data developed for the Sewerage and Sanitation Master Plan it is estimated that there are about 40,000 people (1979) in residential areas served basicaly by public standposts. WCS has a plan to phase out public standpipes by 1984 but this appears impractical because of the magnitude of the task and the cost of water service connections (about Tsh 2000 each). In fact, the number of public standposts has increased since 1980. The difficulty of achieving 100% individual connections is illustrated by a survey in two low-income areas of Dar es Salaam where water mains run clkse to most houses but less than 50% of the households have connections and less than half of the balance have intentions of getting them. 9. Water demand figures developed for use on the sewerage studies are 24 to 30 lcd for population using public standpipes, up to 60 lcd for plots with individual connections but without flush toilets, and 120 lcd to 240 lcd for middle and high income housing with full plumbing. Actual service provided often may be less than this because of constraints in the systems (paragraph 5). Existing Sewerage and Sanitation System and Standards of Service 10. The existing sewerage system serves about 12% of the population of the Dar es Salaam Region and is of the separate type; i.e. designed for sanitary sewage only. The city center sewerage system (IBRD Map 16132), constructed between 1948 and 1952, discharges through an ocean outfall just north of the harbor entrance. Sewage either gravitates or is pumped to the outfall. Between 1956 and 1959, the city center system was extended somewhat to the west and south. In addition, various isolated sewerage systems have been installed for residential, institutional and industrial developments in outlying area, and in each one sewage treatment is by waste stabilization ponds which discharge to local watercourses. There are nine of these separate systems as follows: (1) Mikocheni, Regent Estate and Kijito Nyama (2) University (3) Ubungo Industrial Area (4) Dar es Salaam Airport and TPDF Airwing (5) Pugu Road Industrial Area (Part) and Tazara. Schemes (6) Mgulani/Kurasini (7) Buguruni (8) Lugalo Military Barracks (9) Ukonga Prison  - 39 - ANNEX 1 Page 4 of 5 11. The condition of the existing sewerage system is exceptionally bad. The ocean outfall has been broken near the shore for years. Only one of the waste stabilization ponds - at the University of Dar es Salaam - is operating with some degree of effectiveness. Of the 17 existing pumping stations, only one can be operated. Some of the defunct stations, including an important one in the city center, have been out of commission for several years. A number of the major sewers are blocked completely. Septic conditions, causing serious corrosion of sewers and dangerous concentrations of gases, can be observed at a number of locations on the sewerage systems. Many manhole covers have been removed and others buried under road surfaces so they have not been located and opened. The situation is such that until sewers are cleared, few meaningful examinations can be made to determine their capacities, structural conditions and the extent of rehabilitation required. Similarly, little can be done to measure flows and characteristics of the sewage. 12. . As noted above, it is not possible to measure existing sewage flows. However the probable average daily sewage flow from the properties believed to be served in 1979 totaled about 22,000 m3/day with peak flows of about 56,000 m:$Iday. There were estimated during the engineering studies for the proposed project using emphirical methods because of the data limitations. However, the procedures used were sound and the results appear realistic. The engineering studies also indicate that most, if not all, of the elements of the existing sewerage system have excess capacity for the population that could be served by the existing system, provided that these elements are in reasonably good conditions. 13. Of the total population of the Dar es Salaam Region in 1979 (932,000), about 10% had septic tanks and 78% had pit latrines of some type. Altogether there were about 8,400 septic tanks and 60,000 latrines. 14. Data regarding housing and sanitation conditions and practices within the city are generally unavailable, particularly in urban fringe and squatter settlements where the population is increasing rapidly due to migration. Given the lack of available information, in 1980 a non-probability cluster sample of 278 houses in 10 low-income planned and unplanned areas of the city were surveyed by ARDHI and HHP. This survey provides the most comprehensive analysis of housing and sanitation related conditions and practices amongst low income groups in Dar es Salaam and strongly supports the need for a low cost sanitation improvement in the city. 15. Based on the 1980 survey, housing is scarce and considerable crowding exists. There is an average of 10.9 persons per house, 2.2 persons per room, and average of 3.1 families per house in low income areas. The most common arrangement is the rental of rooms by the homeowner who also lives on the property, although a significant proportion of houses  - 40 - ANNEX 1 Page 5 of 5 (17%) have absentee landlords. More than half of the rooms are rented at or below 50 TSh per month (for 1981, rental prices would have to be adjusted upward). Housing shortages result in a mix of ethnic and religious groups, and family structures. It is not uncommon for families to rent rooms to strangers. 16. Sixty-four percent of household heads were regularly employed. Income is low although no reliable information was availab]Le on income levels. Most of the population had some education and 38% of family household heads had 10 or more years of schooling. Only 11L% of household heads (including both men and women) had no formal education. 17. Pit latrine slabs are of the squatting type, usually made of concrete (79%), with a smooth finish, and kept clean. Only 3% of slabs were observed to be fouled upon inspection. Just over 20% of the slabs were constructed of mud and temporary materials such as corrugated iron. Pits are often lined with cement/sand blocks, although the percentage is not available. The majority of pits have never been emptied (74%), and many have excreta levels of 0.5 m or less below the slab. Twenty-four percent report that excreta rises near or over the slab during the rainy season. Covers for the squat plate are used by only 23% of the houses surveyed. 18. The superstructure is frequently made of cement/sand blockwork (44%); other common materials are mud (15%) and corrugated iron (24%). The majority of superstructures have no roofs and no door. In fact, the most frequent complaint about existing facilities is the lack of privacy. Other common complaints are bad odors (21%), and abundance of fiLies and mosquitos (31%). 19. In many houses, particularly those with many members, two latrines are provided. In some houses owners and tenants have separate latrines and in other cases, traditions dictate provision of separate facilities for men and women. Where customs demand separate facilities, it is unlikely that education will change this preference. 20. At the present time, construction of the latrine sub-structure is usually carried out by a local contractor (fundi) who is paid for his labot and supplied with the needed materials. 21. Sixty-one percent of those surveyed bathe in the pit latrine superstructure. Others tend to use a separate enclosure on the ground (27%). Water from bathing either flows into the pit, or is channeled outside of the latrine onto the ground. Sullage from cooking and clothes washing is disposed of on the ground in more than three-quarters of all households surveyed. Pools of water are frequently observed in the patio and areas surrounding the home creating breeding places for mosquitos and other disease carrying insects. Only 23% of the low-income houses surveyed had the traditional clothes washing/cooking facility (karo) which provide sullage soakaways.  - 41 - ANNEX 2 Page 1 of 10 TANZANIA DAR ES SALAAII SEWERAGE AND SANITATION PROJECT Project Description 1. Physic&l Co~iaponents (A) Sewerage kehabilitation and keplacerient: (i) clear, clean, inspect and repair about 130 km of sewers and pumping mains, including replacement of up tO about 2% of the sewers ana about 8 km of pumping mains; (ii) repair sea outfall (1000 mm diameter, about 1.0 km long) arid construct new screenhouse bypass and intake structure; (iii) rehabilitate 17 pumping stations including replacing of most mechanical and electrical equipment and repair of structures; (iv) repair and improve 9 waste stabilization pond systems with a total area of about 27 ha; (v) purchase equipment, tools and vehicles required for rehabilitation, operation and maintenance of sewerage, including spares; (vi) construct about 600 new sewer service connections to existing sewerage system (see also item 2-A-ii). (B) Low Cost Sanitation (i) construct and upgrade about 3600 pit latrines at residences and about 100 at schools; (ii) reconstruct one existing ana construct about five new dumping stations for pit emptying vehicles; (iii) rehabilitate about 14 pit emptying vehicles and purchase about 16 new ones, including spare parts; and (iv) purchase vehicles required for administration of the low cost sanitation program, including spare parts.  - 42 - INNEX 2 E'age 2 of 10 (C) Buildings and Related Furnishings and Equipment (i) construct a new headquarter building for DSSD including basic laboratory facilities; (ii) construct a building for the Mechanical and Electrical Division (M & E) of DSSD including shop and storage space for sewerage maintenance equipment (item I-A-v); (iii) purchase equipment for central workshop and M & E Division of DSSD (in addition to I-A-v); (iv) improve and extend three sewerage vehicle maintenance depots; and (v) construct a field office for the low-cost sanitation program. (D) Purchase of Vehicles and Equipment for Project Implementation Tean in ARDHI 2. Technical Assistance (A) hIplementation, Operation anu Liaintenance (i) consulting services to designi anid manage sewerage rehabilitation contract work (item I-A) and provide training on sewerage maintenance; (ii) assistance with surveying and recording of existing service connections for sewerage, water supply and electricity; (iii) advisors and equipment for the public bealth education and extension services relating to sanitation; (iv) outside experts to staff.key posts in DSSD and to assist with the training of local counterparts; for these posts; (v) specilized training of professional and. technical staff in schools and universities; (vi) detailed design and construction supervision of new dumping stations (iten I-B-ii), builoings (items 1-C-i and 1-C-ii) and extensions to depots(item 1-C-iv); and  -43- ANNLX 2 Page 3 of 10 (vii) studies and implementation assistance with respect to charges for sewerage and sanitation services, billing, collections, and record and information systems, including assistance to TANESCO in adapting its billing/collection/accounting programs for sewerage and water supply needs. (viii) aerial survey and photogrammetric mapping of Dar es Salac6m; (B) Planning for Future Development (i) aetailed design of new sewerage for a SLage II Sewerage/Sanitation Project; (ii) additional studies on sewerage, sanitation and pollution related matters, including solid wastes management and review and recommendations with respect to legislation and bylaws. (C) Technical Assistance with Establishment of the National Urban Water Authority (NUWA) 3. More details on the proposed content of the various project elements may be found in Project Documents. Duration and Scope of Project 4. The implementation period and scale of the project have been changed considerably during project planning. As proposed originally in the Sewerage and Sanitation haster Plan Report, (paragraphs 3.01 and 3.02) Stage I was to be carried out over a five-year period (1980-1984). In addition to sewerage rehabilitation, it would have included a substantial amount of new sewerage and the construction or rehabilitation of about 22,000 pit latrines and about 4000 septic tank installations. The (ost of the project, after allowing for items which the consultants did not price and allowing for physical anG price contingencies, was estimaated at about TSh 600 miliion (USb72 million equivalent). This project proposal was clearly way beyond the financial resources and implemenitation and operational capacities available to the agencies responsible for carrying out the project and operating the Dar es Salaam sewerage and sanitation systems. " 5. During the later planning stages, ARDHI and DCC agreed to an IDA recommendation to scale the project back to a three year program and a more manageable size. In addition to the resource constraints, there were other justifications for the changes. The project would include a number of  -44- ANNEX 2 Page 4 of 10 innovations which should be tried out before embarking on a larger scale operation. A considerable amount of the sewerage rehabilitation shoulu be completed before-much expansion is undertaken. Preparation of a Stage II project shoula be based in part on experience with Stage I. And finally, much institution building is required just to manage the existing systems. Low-Cost Sanitation 6. A key decision in project planning was that new sewerage would have low priority in Dar es Salaam, restricted to areas where population densities or physical conditions would prohibit use of on-plot sanitation facilities. It is a well established fact that pit latrines usually have much lower construction and operating problems and costs than sewerage. In the case of Dar es Salaam, the initial cost of a properly designed and constructed pit latrine is estimated to be 60% of a sewer service connection required to serve an equivalent number of people. When the full capital and operating expenses of both systems are taken into account, including the costs of interior plumbing, the spread in the comparative costs widens considerably. 7. The on-plot sanitation alternatives provide the same health benefits as sewerage - although pit latrines usually are less convenient - provided, however, that they are properly designed and constructed, that the institutions and facilities required to serve them (mainly pit emptying and sludge disposal) are adequate and that the people are aware of proper personial use and care to ensure the health benefits. The designs and planning for low-cost sanitation in Dar es Salaam has benefited from much recent research worldwide, including the UNDP demotnstration project (paragraph 3.03). In addition, during preparation of the Master Plan, existing sanitation facilities as well as conditions and practices on non-sewered properties were surveyed, improvements were recommended and forecasts were made as to the extent of these types of sanitation units in future. These recommendations and forecasts have been made after consideration of soil and groundwater conditionts, income levels, housilng standards and population densities in all parts of the study area. More recently there has been considerable field work in Dar es Salaam by ARDHI involving demonstration units, more surveys and experiments to test both the physical and socio-cultural aspects of the low-cost sanitation proposals (paragraph 3.13). 8. The improved pit latrine proposed for adoption as the key component of the low-cost sanitation program is a ventilated, screened, emptyable type referred to locally as the "choo nzuri" (CN). Other designs are proposed for use under adverse subsoil and. groundwater conditions which may preclude the CN. The CN is said to provide for excreta disposal with less nuisance and public health risk than many of the present sanitation methods because, in addition to screened ventilation, designed to reduce mosquito and fly breeding, the contents can be hygienically removed from the pit. Emptying would be required about once every five years. The  - 45 - ANNEX 2 Page 5 of 10 estimated total number of new and replacement units through the master plan period (to 2010) would average about 3,800 per year. However, the average during the Stage I project would be only about 1,200 per year while the program is being established. While the CN is not an experimental unit, it is being introduced in Dar es Salaam on a trial basis and changes in design should be expected as the work progresses, particularly any that could reduce costs. One possible option is to use a "pour flush" cover. Another is to provide a larger floor area to allow for the common practice of bathing in the latrine superstructure. Applied research into mosquito control is being planned and may be funded by WHO. 9. The low-cost sanitation units to be constructed by contractors under the project would be concentrated in five wards (Makurani, Kurasini, Mtoni, Keko and Temeke) located in the southern district in the city (paragraphs 2.04 and 2.31). Provisions also will be included for households within the district who which to make their own arrangements to upgrade suitable existing latrines or build new ones. For such cases, the contractors would supply kits comprising vent pipe and mosquito gauze, squat slab and cover and standard construction drawings. The kits would be stockpiled by the contractors and sold and delivered to the householders by DSSD. 10. The project would include the construction of about 100 demonstration low-cost sanitation units at schools in the project area where toilet facilities are inadequate. This is considered essential for the education and promotion aspects of the project (paragraph 25). Additional demonstrations of separate bathing units, double units and karos (for the disposal of sullage water) would be undertaken at selected places as part of the promotional campaign. 11. The proposed project would include substantial improvement in DCC's pit emptying services which presently is poor (paragraph 2.30 and Annex 1). This would include the provision of additional discharge points (dumping points) for the pit emptying vehicles, changes in vehicle control and emptying procedures, an increase in the number and adequacy of the vehicles and improved maintenance. Assistance with improvements in the design of pit emptying vehicles and operating procedures to suit conditions in Dar es Salaam is being obtained through the UNDP demonstration project and additional technical assistance and some equipment is expected to be obtained from SIDA.  -46- INNEX 2 Eage 6 of 10 Sewerage 12. The critical decision with respect to sewerage is the type of treatment and disposal to be used. In Dar es Salaam, sewage either has to receive complete (primary and secondary) treatment to produce a high standard effluent for discharge into local streams, or it may be collected by interceptors and discharged to the ocean through sea outfaLls after minimum treatment.l/ 13. Several methods of complete treatment were considered but most could be quickly excluded because of comparatively high costs and operating complexity required to achieve the required effluent standELrds. The final recommendation is for waste stabilization ponds. Such treatment is an accepted method in Dar es Salaam and it should be efficient; prior problems have been due entirely to design, operation and maintenance deficiences. 14. The consultants also established that the most economic solution for the existing sewered area would be to refurbish and improve the existing stabilization ponds, pumping stations and the sea outfall. In new areas to be sewered, stabilization pond treatment with effluent discharge to local streams would be used. However, it is possible that in ful:ure, as development proceeds in some areas, detailed analyses could establish that a mixture of pond and sea outfall systems would be best in the long run. Another possible change in the existing plan is that future comprehensive oceanographic studies could establish that the pretreatment: of sewage or, extension to deeper waters would be required for the existing sea outfall to preserve the ocean environment as sewage flows from the city center increase. However, ncither of these possibilities would influence the design of works to be carried out in the proposed project. 15. The consultants economic analyses in the master plan study showed that the proposed sewerage plan with the pond strategy, in present value terms (mid-1979 prices), would be between TSh 190 million (at 10% discount rate) and TSh 110 million (at 15% discount rate) less expensive t:han construction and operation of interceptors and sea outfalls to meet Sewerage requirements over the next thirty years. In fact, the results - although not carried out to this extent - indicated that the pona sl:rategy would be less at all discount rates below about 25%. The analyses were made using 1/ Consideration has been given also to the degree of treatment required for the re-use of wastewater for irrigation purposes. While effluents suitable for discharge to streams would be satisfactory for irrigation of many types of crops, no market for such water has yet been identified in the near vicinity of Dar es Salaam.  ~ 47 - ANNEX 2 Page 7 of 10 shadow prices for direct imports (1.50 ratio of shadow price to par rate) and for unskilled labor (30% of market value). While some of the assumptions made in the economic comparisons may be weighted in favor of the pond strategy, it\appears unlikely more detailed analyses would significantly reduce the large gap in present value between the two systems. 16. The capital costs of the stabilization pond option for new sewerage construction over the master plan period was estimated at about 20% less than the outfall option at mid-1979 prices. However, over the first five years of a program to construct new sewerage the construction costs would be about equal for the two options since the more expensive trunk sewer and outfall construction would not begin until about the sixth year. Service Connections 17. Records of existing sewer service connections (estimated at 5,000 to 6,000) are sparse and unreliable (paragraphs 2.28, 4.02 and 4.07). The inforShtion on water supply service connections in Dar es Salaam, which will become the responsibility of NUWA, also is poor, and TANESCO is experiencing difficulties with unregistered connectioIs. The proposed project woulci include a field survey of properties to detect and register existing sewer service connections and to recora properties adjacent to sewers which could be connected. It is proposed to expand this survey to obtain equivalent information on water supply and electric power services as well, particularly since it is intended that these three types of service would be billed through a joint computer system. The survey would be carried out by university and high school students (about 270 man-months) during school holidays under the supervision of representatives of DCC/ARDHI, DCS/NUWA and TANESCO and under the general direction of an advisor who would design the survey. An aerial survey and mapping, included in the project, would be used as a base for the assessment of service connections. Vehicle and Equipment Maintenance 18. The buildings and depots to be constructed or improved for DSSD under the project would include provisions for only minimum routine maintenance of vehicles and equipment. Heavy maintenance and repairs would be carried out under contract with suppliers. This option is considered to be more practical and economic than heaving DSSD establish the shops and staff necessary for most maintenance and repair activities because of the existing difficulties and costs of trairning and retaining capable mechanics for DSSD (and DCC as a whole) and spare parts problems which could leave expensive plant and staff idle sauch of the time.  -48- ANNEX 2 Page 8 of 10 Technical Assistance and Training 19. The technical assistance component of the project would include engagemient by DCC and ARDHI of the following advisors/consultants to staff key positions required to manage the project, operate the sewerage and sanitation services of DSSD and assist with training of permllanent local staff to undertake management and operations: (a) For ARIHI: (i) Project Manager (paragraph 3.25) for three years FY83-b5) and about 8 months in FY86; (ii) Low-Cost Sanitation Engineer (paragraphs 3.05 and 3.25) for three years (mid-FY83 through mid-FY86) after financing of the post by UNDP is completed; and (iii) Social Scientist (paragraph 3.25) for three years beginning about March 1983. (b) For DSSD: (i) General Manager for three years beginning about March 1983; (ii) Finance Manager for three years beginnirLg about March 1983; (iii) Sewerage Manager for two and one-half years beginning about July 1983; (iv) Low-Cost Sanitation Manager for three years beginning about March 1983; (v) Transportation/Equipment Manager for two years beginning about March 1983; (vi) Mechanical/Electrical Enginieer for two years beginning about March 1983; (vii) Training Officer for three years beginn:ing about March 1983; (viii) Legal Advisor expected to be the legal officer of DCC who would be sent abroad for a total of about six months to gain practical experience with sewerage agencies; and (ix) Health Education and Extension Specialist for two years beginning about March 1983.  _ 49 _ ANNEX 2. Page 9 of 10 20. The periods of the above assignments are based on various assumptions including: the time when the services would initially be required and funds from the proposed IDA credit would be available; the implementation timetable and duration of the project; and the length of time required to establish in-house capabilities of permanent staff. 21. It is assumed that all of the above advisors, except the legal advisor, would be expatriate contract staff and the cost estimates are prepared accordingly. However, it is possible that some positions would be filled on a contract basis by Tanzanians in which case costs could be somewhat lower. 22. The proposed technical assistance to be provided to TANESCO under the project would be to adapt its billing, collecting and accounting programs to accommodate water supply, sewerage and sanitation services (item 2-A-vii and paragraph 5.08). This assistance would comprise an estimated six months each by an accounting consultant and a systems analyst. In addition, funds are provided for TANESCO to engage a commercial training officer for three years to handle the increased load of training accountants at its school (paragraph 27). 23. Assistance to NUhA to help it become opeiational is expected to involve the engagement of a management consultanting firm to assist NUWA's management in such iaatters as tne selection of personnel, introduction of new management systems and initial management training. Part of the costs may be financed from a PPE advaiice by IDA to assist with preparation of a Second Urban Water Supply Project. l1owever, additional financing woult be required and it is proposed that it be obtained through the proposed IDA credit for the Dar es Salaam Sewerage and Sanitation Project. 24. The education and promotion element of the low-cost sanitation component of the project would be carried out by staff of ARDhI's Low-Cost Sanitation Section (paragraph 3.09) and DSSD under the general direction of DSSD's Health Education and Extension Specialist (item ix of paragraph 20 above). The objective would be to encourage acceptances, proper hygienic use, good care and maintenance of properly designed and constructed low-cost units, whether or not they are constructed as part of the proposed project. DSSD's four field prograsm officers would play considerable roles in organizing community activities. They would be responsible for workshops at ward levels, household promotion and community education activities. Households expressing interest would be visited by the field program officers and assisted in making arrangments for the construction of new units or upgrading existing ones. (See Project Documents). 25. In the initial stages of the low-cost sanitation program, additional research and development of promotional and educational techniques wouid be required. It is expected that the Institute of Adult Education (Ministry of Education) withi the assistance of the Health Education Unit of AiYA and  - 50 - ANNEX 2 Page 10 of 10 TAG would undertake the development and implementation of the promotion campaign. Evaluation and monitoring of coverage would be integral components of the campaign. 26. The project planning anticipates the value of field trips as follows: (i) by officials of DSSD, NUPjA and TANESCO to visit two or three reasonably successful water and sewerage or water and power organizations in developing countries, particularly where there is a good joint billinig operation; and (ii) for DSSD and ARDI officials to visit successful low-cost sanitation prograums outside Tanzania. Project cost estirmates include an allowance of TSh 175,000 (base prices) for such visits. 27. The education and training component of the project woulci include specializedc training of professional and technical staff of DSSD (ana ARDhl) in schools and universities approximately as follows: (a) Civil Engineers - five for four years each abroad; (b) Mechanical/Electrical Engineers - two for four years each abroad; (c) LCS Engineer - one for one year abroad; (d) DSSD health educators - two for one year each abroad; (e) ARDHI social scientist or health officer (for use in other communities) - one year abroad; (f) DSSD Principal Accountant - one for six months abroad; (g) Accountants - ten for three years each in Tanzania; and (h) Technicians (various) - total of 40 for six months each in Tanzania. 28. In addition to ti-e abKve, the counterpart staff of DSSD would receive a total of about 30 months of experience working with agencies responsible tor sewerage and sanitation outside Tanzania and a total of about 6 months of short courses both inside and outside of Tanzaniia.  - 51 - TMQMNIA AM= 3 DAR E8 8AI8/81 s89 AM S8AN21TICN P80R0= Pge 1 f 10 T.b. 1. 88EiAZE Detalied Cst Tsble (T81 '1000) Qoatity BEse Costs Pthy. Da. Coat. Duty Tax S-Y OrAdt 82/83 83/84 84/85 85/86 Tota UTit Cost 82/83 83/84 84/85 85/86 Total Rate Rate Rate A.anot 1. 1nEsPMl1 CD;B A. 9083A08 81A011S0ACLaI 1. RElBLns'1N8 ANI) I SERI VacE&fCi (G01* 0185B ND. 1 1 - - 2 787.5 787.5 787.5 - - 1,575.0 0.05 0.2 0.25 VH 7 TEN UIPTSCKX NO. 2 1 - - 3 315 630.0 315.0 - - 945.0 0.05 0.2 0.25 V8 1 TCN PIQ21P 110CX ND. 3 - - - 3 94.5 293.5 - - - 283.5 0.05 0.2 0.5 V8 0.5 TI VAN ND. 4 - - - 4 94.5 378.0 - - - 378.0 0.05 0.2 0.5 VH 8000R ND. 1 1 - - 2 315 315.0 315.0 - - 630.0 0.05 0.2 0.25 VH Rob-Total 8E11;1BILrkTICN AND BINraWE VEHICII0 3 2,394.0 1,417.5 - - 3,811.5 2. RH401LTAOA08 0AID1 BBBABILON AND N CE BOUIP Al!IID5T - _ _ _ _ 7,862.4 - - - 7,852.4 0.05 0.2 0.3 HQ NEW llrAKE AND lUErAR SFA O57AIL AM - - - - -5,187.6 576.4 - 5,764.0 0.2 0.2 0 c IABILI2ATOaN POD3 A05 - - - --0577.8 4,622.4 577.8 - 5,778.0 0.1 0.2 0 0 1W WAT8 M1UNT - - - - - 4,625.0 9,250.0 4,625.0 - 18,500.0 0.2 0.2 0 c 8EPIA E BR M4I2 MMi T -