Tunisia - Fourth Urban Development Project

Docammt of The World Bank FOR OFFICIAL USE ONLY Report No. P-4353-TUN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN THE AMOUNT EQUIVALENT TO US3O.2 MILLION TO THE REPUBLIC OF TUNISIA FOR A FOURTH URBAN DEVELOPMENT PROJECT June 9, 1986 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. REPUBLIC OF TUNISIA CURRENCY EQUIVALENTS Calendar 1985 May 1986 Currency Unit = Tunisian Dinar (TD) US$1.00 = TD 0.75 7D 0.72 TD 1.00 = US$1.33 US$1.39 Exchange rate used in the Appraisal Report TD1 = US$1.43 Fiscal Year = Calendar Year ABBREVIATIONS AND ACRONYMS AFH - Agence Fonci6re d'Habitation (Land Development Agency) ARRU - Agence pour la Rhabilitation et la R6novation Urbaine (Urban Upgrading and Renewal Agency) BCT - Banque Centrale de Tunisie (Central Bank of Tunisia) BDET - Banque de D6veloppement Economique de Tunisie (Economic Development Bank) CNEL - Caisse Nationale d'Epargne-Logement (National Housing and Savings Fund) CPSCL - Caisse de Prats et de Soutien des Collectivites Locales (Municipalities Support Fund) FOPROLOS - Fonds pour la Promotion du Logement des Salaries (Workers' Housing Fund) MOEH - Ministire de 1'Equipement et l'Habitat (Ministry of Equipment and Housing) M01 - Ministere de 1'Int6rieur (Ministry of Interior) MOP - Ministere du Plan (Ministry of Planning) ONAS - Office National d'Assainissement (National Sewerage Authority) SNIT - Soci6te Nationale Immobiliere de Tunisie (National Real Estate Company) SONEDE - Societe Nationale d'Exploitation et de Distribution des Eaux (National Water Production and Distribution Company) STEG - Soci6t6 Tunisienne d'Electricit6 et de Gaz (Public Electricity and Gas Company) USAID - US Agency for International Development FOR OFFICIAL USE ONLY FOURTH URBAN DEVELOPMENT PROJECT Loan and Project Suary Borrower: Republic of Tunisia. Beneficiaries: Agence pour la Rhabilitation et la R&novation Urbaine (ARRU), Agence Fonci6re d'Habitation (AFH), the municipalities, and low-income households in upgraded areas and serviced sites. Amount: US$30.2 million equivalent. Terms: Repayable in 20 years, including three years of grace, at the standard variable interest rate. Onlending Terms: A total of $22.05 million would be onlent as follows: the Government would onlend $7.52 million to the Caisse de Prits et de Soutien des Collectivites Locales (CPSCL) at the cost of Bank funds at the date of the Loan Agreement, repayable in 20 years including three years of grace. CPSCL would onlend these amounts to municipalities at cost, for 20 years including two years of grace. The Caisse Nationale d'Epargne-Logement (CNEL) would manage on behalf of the Government $14.53 million, of which (i) $7.85 million would be onlent to AFH for site servicing, at 11 percent per annum for three years; and (ii) $6.68 million would be onlent to individual beneficiaries for house construction, at 8.25 percent interest per annum for those beneficiaries earning more than 1 1/2 times the minimum wage (which is currently about $130 per month) and at 7 percent interest per annum for those beneficiaries earning equal to or less than 1 1/2 times the minimum wage, in each case for 20 years including two years of grace. The Government would bear the foreign exchange risk, as well as the interest rate risk. Project Objectives and Description: The project would improve shelter and urban services in under-served or squatter settlements, develop serviced land affordable to low-income households, and strengthen urban sector institutions. It would provide for the financing of upgrading and site servicing of selected subproject sites, and of house construction and improvement loans to beneficiaries in upgraded sites and house construction loans in serviced sites. The project consists of three parts: (i) upgrading, to be coordinated by ARRU, of infrastructure and community facilities in This document has a rdW 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 authoriation. - ii - under-served settlements; (ii) development of serviced sites by AFE, aimed at low-income groups; and (iii) technical assistance to AFY and the Direction des Collectivitis Locales in the Ministry of Finance and Economy. Benefits and Risks: The project would benefit population groups with incomes below the urban household median monthly income. About 150,000 persons would benefit directly from the project, of which 90,000 from improvement of urban services in their current areas of residence, and 60,000 from acquisition of serviced plots. Indirect benefits would accrue to the population of settlements and owners of land adjacent to subproject sites through their proximity to improved services and environment. The risks that institutional objectives related to the reform of AFE may not be fully attained, and that, in view of the large number and geographical dispersion of project sites, implementation may be slower than expected, are alleviated by staff reinforcement, improved policies and management procedures initiated during project preparation, and technical assistance. Estimated Costs-L: Local Foreign Total US$Million Land Acquisition and Rehousing 6.5 0.2 6.7 Infrastructure and Utilities 11.9 16.4 28.3 Community Facilities 0.8 0.9 1.7 Construction Loans 4.7 5.9 10.6 Studies, Operating Costs 5.5 0.0 5.5 Technical Assistance 0.0 0.5 0.5 Base Cost 29.4 23.9 53.3 Physical Contingencies 1.9 1.5 3.4 Price Contingencies 5.9 . 4.8 10.7 TOTAL COST ILI Na ALI Financing Plan: Local Foreign Total US$ Million IBRD - 30.2 30.2 Government 24.2 - 24.2 CNEL 6.0 - 6.0 AFE 7.0 - 7.0 TOTAL I ILA 1/ Does not include direct taxes and duties from which the project is exempt. Estimated Disbursements: US$ Million FY 87 88 89 90 91 92 93 94 95 Annual 0.3 1.7 4.1 4.8 5.4 5.2 3.9 2.8 2.0 Cumulative 0.3 2.0 6.1 10.9 16.3 21.5 25.4 28.2 30.2 Rate of Return: 20 percent. Staff Appraisal Report: No. 5444-TUN of June 9, 1986. Map: No. IBRD 18756. REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN THE AMOUNT EQUIVALENT TO US$30.2 MILLION TO THE REPUBLIC OF TUNISIA FOR A FOURTH URBAN DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed loan for the equivalent of $30.2 million to the Republic of Tunisia to help finance a Fourth Urban Development Project. The loan would have a term of 20 years, including 3 years of grace, at the standard variable interest rate. The Government would onlend $7.52 million of the proceeds of the loan to CPSCL at the same interest rate as the Bank loan at the date of the Loan Agreement, repayable in 20 years including 3 years of grace. CPSCL would onlend these funds to municipalities at cost, for 20 years including 2 years of grace. CUEL would manage $14.53 million on behalf of the Government, of which $6.68 million would be onlent to individual beneficiaries for house construction, at 8.25 percent interest per annum for those beneficiaries earning more than 1 1/2 times the minimum wage and at 7 percent interest per annum for those beneficiaries earning equal to or less than 1 1/2 times the minimm wage, for 20 years including 2 years of grace, and $7.85 million to AFR for site servicing, at 11 percent interest per annum for three years. The Government would bear the foreign exchange risk, as well as the interest rate risk. PART I - THE ECONOMY & 2. An economic report entitled "Tunisia - Country Economic Memorandum: Midterm Review of the Sixth Development Plan (1982-86)", in two volumes (No. 5328-TUN), was distributed to the Executive Directors in October 1985. An economic mission to review the macro-economic framework of the Seventh Plan (1987-1991) visited Tunisia in January 1986; its findings are reflected in this part and the country data sheets attached in Annex I. 3. Tunisia is a medium-size, middle-income country with a population of 7.5 million and a per capita income of about $1100 2/. Much of Tunisia is arid or semi-arid. Only three percent of arable land is irrigated, and areas where rainfed agriculture is possible are subject to severe year-to-year fluctuations in rainfall. Nevertheless, agriculture still occupies nearly one out of every three Tunisians in the labor force. Tunisia's most important raw materials are phosphates, petroleum and natural gas. Known exploitable reserves of oil and gas are approaching depletion, and new hydrocarbon 1/ Part I is substantially the same as Part I of the President's Report No. P-4351-TUN of June 6, 1986 for an Energy Conservation Demonstration Project. 2/ 1985 figure at current prices and actual exchange rates. - 2 - reserves are limited afd require costly off-shore drilling; priority is now given to slowing down the growth of domestic energy consumption through conservation and pricing measures. The low qualEy of phosphate deposits constrains the expansion of the highly efficient Tunisian phosphate processing industry. The country has also a considerable tourism potential; after a period of stagnation due to high prices and unsatisfactory quality standards, tourism resumed rapid growth in 1985. 4. Tunisia has undertaken a massive effort to develop its human resources, paying special attention to family welfare, education, and technical and vocational training. As a result, between the early 1960s and the early 1980s, the infant mortality rate declined from almost 160 to 83, life expectancy at birth rose from 48 to 62 years, the adult literacy rate increased from about 15 to about 62 percent, and average caloric intake per capita increased from 95 to 111 percent of minimum standard requirements. An active family planning policy pursued by the Government led to a decrease in fertility and birth rates. Even though mortality rates also decreased, the gross reproduction rate decreased markedly from 3.5 to .2.4 percent over the same period. However, since net emigration of Tunisians abroad was sharply reduced by restrictive measures taken in the European Economic Community countries and Libya, the growth rate of the labor force accelerated, a main reason for the rapidly growing, serious unemployment problem. Open unemployment reached 14 percent in 1983 and underemployment is extensive. These problems are particularly serious among the young. 5. Recent Economic Developments. During the 1970s, the Tunisian economy did well. Rapid growth in the range of 7-8 percent was accompanied by substantial structural transformation as manufacturing and tourism became more diversified and their share in total exports increased. Economic performance benefitted from substantial terms of trade gains due to the rapid price increase of oil, allowing both consumption and domestic savings to increase and investment to remain high (over 30 percent of GDP). It also benefitted from improved economic management with a cautious shift toward a more liberal, market-oriented economy. Price inflation was relatively modest, averaging 6.4 percent during this period. The balance of payments current account deficit, averaging 5 to 6 percent of GDP over the period, was easily financed, much of it by direct foreign investment. The debt service ratio was 10 percent at the end of the decade. The only major problem was a persistently high rate of unemployment/underemployment. 6. The Sixth Plan (1982-86) proposed a number of policy reforms to face the consequences of rising unemployment and the progressive decline in net energy exports. Its main objectives were employment generation, export promotion, regional development and public sector efficiency. Investment priority was given to agriculture, engineering industries and tourism. The overall rate of investment was projected to decline during the Plan period. To minimize the effects on e:onomic growth and employment, measures were proposed to increase the efficiency of existing investments, and encourage a shift to labor-intensive activities. These measures were to be accompanied by a substantially tightened income policy, particularly in cautious wage and salary policies, and a considerable slowdown in the growth of recurrent budget expenditures. -3 - 7. However, economic performance deteriorated during the Plan period. In 1982, a prolonged drought depressed agricultural output and agro-industrial production, technical problems plagued the phosphate and cement industries, and tourism and exports of manufactured goods were adversely affected by the recession in Europe and high domestic prices. Also, oil production stagnated during the Plan period. The economy recovered in 1983 and 1984 due to buoyant growth in manufacturing output, stimulated by rapidly expanding local demand. Growth was further stimulated in 1985 by an exceptionally good agricultural crop and resumed growth in tourism, bringing the average annual GDP growth in the first four years of the Plan to 3.7 percent, compared to 6.3 percent targeted. This performance was nonetheless favorable in view of the world recession, and as compared with other countries. 8. The Government was slow in adjusting domestic demand to the decelerated economic growth. In contrast to the Plan's macro-economic objectives, the investment rate remained high rather than declined, mainly due to high public enterprise investments in energy and transportation, while domestic consumption expanded rapidly, fuelled by sharp increases in wages and salaries in 1982 and early 1983. This strong demand pressure, facilitated by rather liberal credit policies, was reflected in rising inflation which averaged nearly 10.5 percent in 1982-84, compared to 7.5 percent over 1977-81. It also contributed substantially towards the marked worsening of the current account deficit of the balance of payments, which reached 11 percent of GDP in 1984. The Government's overall budget deficit also increased from 5.3 to over 7 percent of GDP between 1982 and 1984. This reflected increases in recurrent expenditures due to wage and salary increases, higher subsidy payments to households and public enterprises, higher public investments and growing dollar-denominated debt service payments (caused by a 57 percent dollar appreciation vis-a-vis the Tunisian dinar between 1981 and 1984). 9. While the situation had not reached crisis proportions, the trend observed during 1981-84 clearly could not be sustained. Faced with this deterioration, the Government started to implement a package of policy measures aimed at stabilizing the economy. The minimum wage has not increased since January 1983. As a result, average nominal salaries increased by less than 3 percent per annum over the last three years, resulting in a cumulative decline of real salaries by over 15 percent by mid-1986. In April 1985, general interest rates were raised by 1-2 points and, later during the year, low special interest &ates were raised by 3-4 points; with inflation declining to about 7 percent in 1985, most rates are now positive in real terms. In mid-1985 the authorities adopted a more flexible exchange rate policy resulting in a gradual downward adjustment of the dinar vis-a-vis European currencies. Finally, credit expansion was kept in line with GDP growth in 1985. 10. As a result of these measures, and of the imposition of drastic foreign exchange and import restrictions, the balance of payments current account deficit was brought back to 7 percent of GDP in 1985, despite reduced exports of oil and phosphates. While this improved the immediate situation, the underlying disequilibrium has not been resolved, and problems usually associated with controls, such as growing shortages of raw materials, semi-finished products and spare parts, have appeared. Meanwhile, the budget deficit rose to about 9 percent of GDP in 1985 because of a slowdown in 4- revenues, despite a slight decline of capital expenditures in real terms. The authorities prepared a restrictive budget for 1986, designed to reduce this deficit to about 7 percent of GDP through a number of measures including a 15 percent reduction in real terms of subsidies to households and public enterprises. The decline in overall public expenditures of over 2 percent in real terms will make it possible to increase urgently needed imports of raa materials and spare parts for the country's productive sectors without exceeding last year's balance of payments deficit. 11. Medium-term prospects depend on two main factors: future developments in the hydrocarbon sector, and the speed with which the Government implements the far-reaching macro-economic policy changes discussed below. Oil and gas exploration programs since the mid-1970s have not been encouraging. Barring large new oil or gas discoveries, and given the rise in domestic energy demand, Tunisia is generally expected to turn into a net oil importer in the early 1990s. 12. Preparation of the Seventh Plan (1987-1991) is currently underway. Preliminary indications are that the Government will give high priority to a rapid improvement of the balance of payments and to more employment creation. To attain these objectives, it intends to pursue a strategy based on stimulation of non-oil exports, more efficient utilization of domestic economic resources, especially of human capital, and better savings mobilization through more restrictive demand management. Preliminary projections indicate that a GDP growth of 3.5-4 percent per annum, and a reduction in the current account deficit, can be achieved without a systematic recourse to quantitative restrictions and other protection measures, and without excessive external borrowing. This growth scenario would only be possible, however, if additional substantive adjustment measures are taken over and above the ones already implemented. 13. The Tunisian authorities, in consultation with the Bank, have prepared a program of structural reforms emphasizing policy action in eight different fields: wages and salaries, exchange rate, budgetary policies, interest rates, monetary and credit policies, price and investment . liberalization, and import protection. In the first five of these fields, the Government has, over the last few years, made considerable and successful efforts, and all indications are that it will continue to do so. Restrictive wage and salary policies are likely to continue; an austere budget is in place for 1986, and guidelines for the coming years include a nearly 10 percent annual reduction in subsidies in real terms. Most interest rates are now positive. On the exchange rate, the Government recognizes that a flexible policy has to be followed to improve Tunisia's competitiveness in agricultural and manufactured products, as well as in tourism, in order to achieve its ambitious export targets. 14. While substantial progress has been made since the early 1980s on these important issues, progress has been more limited in the remaining areas, i.e., on price and investment liberalization and import protection. Over the last years, the Government has focused with some success on administrative type measures. Concerned with immediate economic and social problems, it resorted to short-term measures and direct, quantitative controls such as mandatory price reductions and import restrictions. The price liberalization process has moved slowly, with some reductions in price subsidies - 5 - (particularly for transportation and energy), increasing liberalization of agricultural producer prices and some liberalization in the price regimes for manufactured goods. While investment incentives were modified to stimulate exports and promote regional development, strict investment licensing was still maintained. The program of structural reforms, to be implemented over the coming 2-3 years, includes a number of concrete policy changes aimed at dealing with these issues, so as to achieve a gradual but systematic decontrol of. the economy. 15. Social Issues. Since independence, the country has gone a long way towards meeting the basic needs of its population. Over 16 percent of GDP is now devoted to social programs, and the number of absolute poor declined from 17 percent of total population in 1975 to 10 percent in 1984. This improvement was largely concentrated, however, in urban areas. Since 1981, social issues have faced a different context than in the 1970s, when an easy financial situation seemed to allow a relatively unconstrained expansion of social services. On one hand, the Tunisian population has become increasingly aware of, and sensitive to income distribution issues, and to the Government's responsibility for redistribution. Furthermore, the beneficial effects of past rapid expansion in social services, reflected in the improvement of the country social data (see Annex I), have created a demand for improved standards in social services delivery. On the other hand, the provision of adequate social services - education, health, urban infrastructure, housing - is being increasingly hampered by budgetary constraints. To reduce the financial burden of social services, the administration is reviewing the cost structure of the various types of social services, including free or below-cost delivery, and the possible introduction of some user fees. Special efforts are needed to improve social infrastructure management, in particular as regards hospitals. Also, decentralization of social facilities to.deprived zones will have to be assessed carefully because costs for servicing and maintaining them could become prohibitive. 16. To reduce socio-economic differences, in particular between rural and urban areas, and between workers in the modern sector and those precariously employed in informal activities, the Government is channelling more resources into regional development and youth employment. Integrated rural programs are being developed to stimulate productive job creation and grassroots participation. Subsidies and credit facilities are granted for young technicians to create their own enterprises, and for entrepreneurs to create new projects in underdeveloped regions. More efforts are needed, however, to strengthen the coordination of vocational and on-the-job training with market demand. 17. External Assistance and Foreign Debt. During the second half of tC 1970s, foreign borrowing was modest and a large share of foreign funds was provided by public sources at relatively soft terms. At the end of 1979, debt outstanding and disbursed was estimated at $3 billion, or 42 percent of GDP; debt service was 10 percent of export revenues. For reasons mentioned earlier (para. 8), the balance of payments deficit has increased substantially since then, as has foreign indebtedness. According to preliminary estimates, total public foreign debt outstanding and disbursed reached nearly $4.1 billion (50 percent of GDP) at the end of 1985. The debt service ratio rose to about 22 percent in 1985. However, the Tunisian authorities have followed cautious debt management policies; whilz the share of short-term borrowings has - 6 - increased slightly since 1980, Tunisia's overall foreign debt remains predominantly long and medium-term, and debt service requirements are projected to increase only slowly. During 1980-84, 60 percent of foreign loan commitments were from official sources, and nearly 35 percent on concessional terms. Over 70 percent of official commitments came from bilateral sources (mainly Arab oil-producing countries, France, Japan and the Federal Republic of Germany), about 20 percent from the Bank Group and 10 percent from other multilateral sources. Overall borrowing terms were favorable, averaging 8 percent interest and 15.2 years maturity. 18. In the medium-term, external capital requirements should remain easily manageable. In the longer-term, much will depend on the policy changes to be initiated during the next few years. The Government's medium-term objective is to maintain the present level of indebtedness; this prospect strongly depends on a timely implementation of policy measures to accelerate exports, reduce public investments, slow down growth of domestic demand, and liberalize the economy by easing regulations and controls. On this basis, the current account deficit is projected to average about $540 million in 1988 and 1989, but decline thereafter. During 1986-91 new loan commitments from abroad could be kept at a little over $1 billion per year on average (in current prices), while net foreign borrowing might increase from about $360 to $400 million during the same period; this could result in a debt service ratio peaking at about 25 percent in 1990. 19. To conclude, Tunisia, after a decade of good performance, is facing a major challenge in having to adapt its economic structure to the post- hydrocarbon era at a time of external and internal financial constraints. A strategy of demand restraint and export promotion combined with more liberal economic policies is called for to improve efficiency and preserve the country's financial stability and creditworthiness. The Government has already taken several measures to implement such a strategy. Considering its long record of prudent external debt management, there are good grounds to assume that Tunisia will implement the necessary policy changes, and remain creditworthy for a continued high volume of Bank lending. PART II - BANK GROUP OPERATIONS IN TUNISIA1" 20. Since 1962, the Bank has committed to Tunisia sixty-nine loans and ten IDA credits amounting respectively to $1,481.0 million and $75.2 million (net of cancellations) of wnich forty-four loans and credits have been fully disbursed. Annex II contains a summary statement of Bank loans, IDA credits and IFC investments as of March 31, 1986. Project implementation is generally satisfactory. As of March 31, 1986, overall disbursements amounted to 52.5 percent of appraisal estimates, whi:h is in line with experience in other countries in the region. Disbursement performance for irrigation, energy, industrial finance and port projects has generally been above the country average, while longer than average disbursement delays have been experienced 1/ Part II is substantially the same as Part II of the President's Report No. P-4351-TUN of June 6, 1986 for an Energy Conservation Demonstration Project. -7- for agricultural credit, education, highways, urban and fisheries projects, due to project-specific problems that are being addressed through supervision missions and sector discussions. In a number of sectors, important institutional improvements have been achieved, and autonomous agencies have been created or strengthened to ensure the efficient management of the related sectors or subsectors. 21. The Bank's lending strategy in Tunisia aims at supporting the country's transition from a situation of reliance on petroleum exports to a sectorally-balanced post-hydrocarbon era through appropriate changes in economic policies and programs. This adjustment process will require further diversification of exports, greater savings efforts, reduction in consumer subsidies, gradual liberalization of all sectors of the economy, and stronger incentives to the private sector particularly in agriculture and industry, while taking measures to increase employment and target development to low-income groups. In support of the above, the overall objective of Bank lending is to emphasize projects which have a direct and rapid impact on production, employment and exports (or import savings) and which minimize Government net contributions. The focus of lending for agriculture and industry meets this objective. In addition to the above, proposed Bank lending would focus on improvement of public enterprise performance, conservation and development of energy resources, and continued support to the social sectors and operations targeted to low-income groups. For the latter, attention would be given to increased efficiency and cost-effectiveness of institutions and investments, and to linkages with directly productive sectors (e.g., education reforms stressing vocational training). We envisage only marginal lending for basic economic infrastructure, focussed in areas where Bank guidance would still be useful, such as rural water supply and highways maintenance. 22. Past Bank lending emphasized support for long-term investments in infrastructure and social development, each of which accounted for about one-third of Bank/IDA commitments since 1971. The rest of the commitments were almost equally distributed between agriculture and industrial financing. In addition, the Bank has made two loans for technical assistance. Within the broad framework noted in para. 21, we expect a significant shift in our lending, with well over half going to agriculture and industry. In addition to the proposed Fourth Urban Development Project, programmed lending in the next couple of years would include projects for highways maintenance, grain storage, credit lines for small-scale industries and agriculture, and sector loans for agriculture and industry. 23. The Bank's economic and sector work will address the increasing complexity of the macro-economic and sector problems that Tunisia will face in the medium term, and continue to focus on strengthening the macro-economic and sector base for our lending program. Eowever, while in the past it was mainly devoted to the study of major structural problems, it is now focussed on implementing the policy recommendations of these studies through sector lending in agriculture, manufactured exports, public enterprises and transport; it will therefore concentrate on the following main tasks: (a) preparation of the macro-economic framework of the Seventh Plan, which will provide the policy base of sec-or lending; (b) review of public expenditures under the Plan to provide guidance for the necessary reductions in budget outlays; (c) assessment of public enterprise reforms prepared by the -8- Government to reduce their drain on the State budget; and (d) monitoring of the agreed macro-economic and sector policy changes. The program also includes studies on education administration and finance, municipal finance and development, energy pricing, and the impact of the adjustment program on various income groups. 24. The Bank and IDA accounted for about 27.8 percent of total commitments from official sources to Tunisia during 1982-1984. Their share in total debt outstanding and disbursed at the end of 1984 (including loans from private sources) was an estimated 14.8 percent, and their share in debt service during 1984 was 11.7 percent. The share of the Bank and IDA in Tunisia's disbursed external debt is expected to increase to about 18.7 percent and their share in the debt service to about 17.3 percent in 1986. 25. As of March 31, 1986, L*. s net commitments in Tunisia totalled about $7.5 million. IFC has supported the Economic Development Bank of Tunisia (BDET) to foster development projects, and the National Bank for Tourism Development (BNDT) to promote and invest in tourism projects. It has also assisted the Soci6t6 Touristique et Hoteli6re (RYM), a large hotel development; the Industries Chimiques du Fluor (ICF), a producer of aluminum fluoride from local fluorspar for export; and the Soci6t6 d'Etudes et de D6veloppement de Sousse-Nord for an integrated tourism development project. In FY84, IFC approved two new equity investments in Tunisia: (i) Fluobar, a project to privatize, rehabilitate and expand an existing fluorspar mine; and (ii) Tunisia Leasing Company, the first leasing company in Tunisia to provide financing to the Industrial sector. IFC's approval in FY86 of an equity investment in SocietC Industrielle de Textiles (SITEX) would help privatize an existing state-owned textile mill. PART III - THE URBAN SECTOR 26. Urbanization Patterns. Tunisia is a rapidly urbanizing country, with an urban population accounting for about 53 percent of its total population of about 7.5 million. Urban population has grown by 3.7 percent per year since 1975, and is projected at over 6 million in the year 2,000. This rapid increase in the past decade is due to a relatively high natural population growth (2.6 percent), the return of migrant workers from abroad, and rural-urban migration. Although Tunis still receives the largest number of migration flows, it has a much lower population growth than the rapidly urbanizing North-West and Center-West Governorates. 27. The high rate of urban population growth has strained the public sector's ability to provide shelter and basic urban services to the major cities, and the 125 agglomerations of 5,000 or more inhabitants. Public housing, which accounted for about 20 percent of the addition to the urban housing stock since 1975, was provided at high cost in terms of investment and direct subsidies. More important, however, was the public sector's inability to provide, in a coordinated and timely manner, enough urban infrastructure to meet the demand for serviced land. This resulted in the spread of spontaneous unregulated settlements, on land lacking services and legal titles. The spread of these predominantly low-income settlements led to inefficient urban growth patterns and excessive investment requirements for ex post provision of infrastructure and services. - 9 - 28. Institutional Framework. Tunisia is divided into 23 Governorates under the supervision of the Ministry of Interior (MOI). At the local level, in urban areas, authority is vested in municipalities, which are subdivisions of the Governorates. With few exceptions, municipalities have insufficient staff, limited management capacity, and little control over their financial resources. For their operating and investment budgets they rely on direct Government budgetary allocations, or subsidized loans through the Caisse de Prits et de Soutien des Collectivitis Locales (CPSCL), a municipal fund managed oy the Banque de D6veloppement Economigue de Tunisie (BDET), under the double tutelage of MOI and the Ministry of Finance and Economy. 29. In August 1984, the Ministry of Housing merged with the Ministry of Equipment under a Ministry of Equipment and Housing (MOEH), having jurisdiction for all activities related to shelter as well as for public works including roads and highways, and for regional planning. To carry its new responsibilities in the shelter subsector, MOEH has established technical departments for housing construction, assistance to housing, research and studies, upgrading and urban renewal, and legal matters. It has under its control three major public agencies: a land development agency: Agence Fonciire d'Habitation (AFH); an upgrading and renewal agency: Agence pour la R&habilitation et la R6novation Urbaine (ARRU); and a national real estate company: Soci6t6 Nationale Immobili&re de Tunisie (SNIT). The Caisse Nationale d'Epargne-Logement (CNEL) is the major national housing savings and loan agency under the Ministry of Finance and Economy and the technical tutelage of MOER. The design, construction, operation and maintenance of utility networks and services in urban areas are the responsibility of national utility companies attached to different Ministries: Soci6tC Nationale d'Exploitation et de Distribution des Eaux (SONEDE) under the Ministry of Agriculture, for water supply and distribution; Office National d'Assainissement (ONAS) under MEH, for urban sewerage; and Soci6t6 Tunisienne d'Electricit6 et de Gaz (STEG) under the Ministry of Energy and Mines, for power production and distribution. 30. Urban Poverty. About 10 percent of Tunisia's urban population lives below the Bank-defined absolute poverty threshold, estimated in 1984 at TD 80 per household/month, with an average household size of 5.3 persons. This represents a considerable improvement over the 1977 figure of about 20 percent. However, the access of low-income groups to housing and basic infrastructure services remains a matter of major social concern, especially as real wages have declined in real terms in recent years. 31. Urban and Housing Issues. Intense construction activity, particularly since 1980, increased housing stock at an annual average rate of 4 percent, to 1.3 million dwellings in 1984, of which 55 percent in urban areas. Housing conditions improved during 1980-1984: rudimentary housing decreased from 13 percent to 9 percent, and one room dwellings from 31 percent to 21 percent of all housing units. About 50 percent of all dwellings built since 1975 bypassed urban development regulations, and were undertaken by the informal sector in areas lacking adequate utility services and community facilities, and relying on self-help and low-cost construction methods. According to the most optimistic projections, housing construction by the public and formal private sectors will fall short of the estimated housing demand throughout the decade. Since the gap will be filled by informal, unregulated construction, it is essential that preventive action be undertaken - 10 - through the increase of suitably located serviced land, at prices affordable to the poorest segments of the population, which constitute the majority of new arrivals in the urban areas. Rent control regulations apply only to housing built prior to 1970, representing a small percentage of stock. The Government is aware of the distortions created by the controls-and intends to reduce them. 32. Access to basic utility services has improved considerably in recent years in most urban areas. STEG's electricity network covers about 97 percent of urban areas, while SuREDE is distributing water to 80 percent of the urban population through household connections, and 10 percent through standpipes. Despite an ambitious and successful program, ONAS, a relatively new organization, has only been able to provide sewerage services to about 55 percent of urban areas to date. The gap between water and sewerage availability aggravates environmental problems. Triggered by the recognition of associated health hazards, solid waste collection has been recently improving considerably in city centers. Although overall housing conditions and access to basic utility services have substantially improved in recent years, supply of infrastructure and urban services is still poor in the urban periphery and in rapidly expanding urban areas, and there is little coordination between the various responsible agencies. A feature of the proposed project is to improve these agencies' efficiency and their coordination, and to provide the financing to extend their services in expanding urban areas (see para. 53). 33. Government Policy. Until the mid-1970s, the Government response to the growth of spontaneous, under-served settlements consisted mainly of slum clearance and subsidized rehousing schemes for displaced families. SNIT, the main operator of public housing construction, created in 1957, expanded rapidly; it applied high standards unrelated to its prospective clients' financial ability or willingness to pay; only recently it has become more responsive to market demands, and started building at lower costs and standards. The magnitude of the housing problem led to the creation of AFH and CNEL in 1973 and 1974, respectively; however, these agencies did not address the fundamental problem of providing affordable land and infrastructure in the rapidly growing informal settlements in the urban peripheries. 34. With the priority given to investments in productive sectors, and the objective of containing investments in housing, the Sixth Plan allocated TD 1 billion, or 12.5 percent of total investments, for the construction of 160,000 housing units. However, by end-1983, these investments were projected to reach TD 1.5 billion or 16.6 percent of total investments by 1986. There was Government concern that housing was taking too great a share of total investments. The Bank recommended, and the Government intends to pursue as a strategy during the Seventh Plan (1987-1991), to reduce public investment in housing. Priority will be attached to upgrading under-served settlements through the provision of basic infrastructure, leaving the major part of investments in housing to private initiative, accompanied by suitable financing targeted to low-income groups. This would help mobilize domestic resources, and utilize the potential of the informal housing sector. -Savings could be achieved by gradually lowering subsidies and building standards, and instituting full-cost pricing and recovery and more efficient coordination and provision of services. A number of these measures have already been agreed upon and the proposed project addresses these issues. - 11 - 35. The Bank's Role in the Sector. Since 1966, the Bank has maintained a close sector dialogue with the Tunisian authorities. During the 1970s, under the Fifth Plan (1977-1981), the Second Urban Development Project and similar USAID operations laid the foundation for new and more rational housing policies consisting of upgrading squatter settlements instead of demolishing them, developing low-cost serviced sites, and starting the recovery of the cost of infrastructure and improvement works from beneficiaries. The 1983 Housing Sector Review (Report No. 4013 of August 1, 1983) represented a major contribution to the formulation of the Sixth Plan's housing policies and programs. It identified the lack of serviced land as the major constraint to balanced urban growth, and stressed the need for improving services in spontaneous settlements, for efficiency of the sector's institutions, and for reducing subsidies and ensuring cost recovery. The Institutional Housing Sector Review (Report No. 5199 of July 18, 1984) provided a framework for the reform of the housing finance system; its main findings were that housing investments during the Fifth Plan (1977-1981) came mostly from private savings, institutional finance representing only 37 percent of these investments, with CNEL as the largest provider of housing finance. The report elaborated a strategy to strengthen CNEL and gradually transform it into a housing bank, by modifying its structure and diversifying its activities and product. The proposed strategy implied a sector-wide review of deposit and lending interest rates, an extension of maturities, and a study of the merits of contractual versus open banking schemes. 36. The Bank's recommendations have been well received by the Tunisian Government, which intends to proceed with their implementation progressively, through a phased approach. The Bank is providing assistance in defining the specific reform measures to be introduced in the Seventh Plan. Part of the envisaged reforms, including increases in interest rates in housing lending, and in deposits for contractual savings, have been introduced in the course of 1985-1986. The proposed project supports the continuation and broadening of reform measures. 37. Experience with Past Lending. Past urban lending activities included two urban transport and two shelter operations. The first operation, the Tunis District Urban Planning and Public Transport Project (Loan 937-TUN and Credit 432-TUN of 1973: $11 million) improved traffic conditions in Tunis, renewed and expanded the bus fleet of the Tunisian National Transport Agency, and constructed a suburban railway. It supported the establishment of the District of Tunis, the first regional planning authority in the country. The Project Completion Report (No. 5013 dated March 27, 1984) concluded that the Municipality of Tunis carried out a larger than planned public transport and traffic improvement program; however, it fell short of meeting management improvement targets. Continued support under follow-up projects resulted in improvements in several municipal departments. The District was influential in its early years in gtiding policies related to low-income housing, solid waste management and spatial patterns of development of Greater Tunis. However, its performance fell short of expectations, because of insufficient Government support. The Second Urban Development Project (Loan 1705-TUN of 1979: $19 million, which was closed on December 31, 1985; an amount of $4.0 million was cancelled in 1984 mainly because of the US dollar appreciation, and about $1.0 million will remain undisbursed by the closing of the project accounts in June 1986 and be cancelled) included upgrading and site servicing in low-income settlements in Tunis and Sfax, a solid waste collection and - 12 - disposal operation in Greater Tunis, a line of credit for small-scale businesses, and technical assistance to the Central Project Unit within MOI. This Unit was later transferred to MOER to constitute its upgrading and urban renewal department. Technical assistance also strengthened the Municipalities of Tunis and Sfax, which geared up well for project execution. The solid waste collection and disposal operation, initially delayed as a result of difficulties in establishing an executing agency, is now executed well with ONAS in charge. Measures were also taken resulting in improved coordination between the various agencies involved in tbe project, and more effective cost recovery procedures were introduced. 38. The on-going Third Urban Development Project (Loan 2223-TUN of 1983: $25 million, of which $3.4 million was disbursed as of May 31, 1986) includes upgrading in four settlements, and site servicing in three of these, a pilot program of upgrading and reconstruction in the Medina of Tunis, and credit for plot acquisition and housing. Three of the five project sites are in Greater Tunis, and two in the Northwest area. Most of the major civil works contracts, representing about $13.5 million of loan commitments, have been awarded. The low disbursement level is due to delays in the start of works and the appreciation of the US dollar. Under this project, ARRU is developing into an efficient autonomous agency, with broad powers and capacity to coordinate urban renewal and upgrading activities. The fourth project would entrust ARRU with larger responsibilities and increased autonomy for project preparation and appraisal. A Second Urban Transport Project (Loan 2429-TUN of 1984: $33 million), which became effective in June 1985, will improve the Greater Tunis highway system, and provide for bypasses to the city center; it also aims at improving the Sfax regional transport company, and addresses policy issues related to traffic parking management, and the potential of the private sector to provide transport services. While the civil works and traffic and transport policy components are now, after a delay because of the late effectiveness, progressing, the Sfax regional transport company component has not been started because of financial and managerial constraints, and discussions on this component's execution are underway. 39. In the next five years, the Bank's urban lending operations will be directed to municipal development, shelter, and the strengthening of the institutions involved in the sector. A Bank Municipal Finance and Management Study may lead to a municipal project involving the strengthening of CPSCL. In the shelter subsector, we would continue assistance in improving policies related to land management and development and adequate supply of suitably located serviced land at prices affordable to low-income groups; providing expanded and more efficient urban services in unregulated and under-served settlements; and further strengthening of key sector institutions. PART IV - THE PROJECT 40. The proposed project was identified in January 1983, and prepared by the Government with Bank assistance during 1983/84. It was appraised in October 1984 and April 1985. Negotiations were held in Washington D.C. from June 2 to June 6, 1986. The Tunisian Delegation was led by Mr. Ben Ali of the Ministry of Planning, and included representatives of the Ministries of Finance and Economy and Interior, and of ARRU, AFH and CNEL. The Staff Appraisal Report No. 5444, entitled Republic of Tunisia - Fourth Urban Development Project, dated June 9, 1986, is being distributed separately to - 13 - the Executive Directors. The main features of the loan and the project are listed in the Loan and Project Summary at the beginning of this Report and in Annex III. A map of Tunisia showing identified project sites is attached. 41. Project Objectives and Description. The objectives of the proposed project are to improve shelter and urban services in low-income under-served settlements; develop serviced land affordable to low-income households; and strengthen key institutions responsible for upgrading operations, land development, and the provision of shelter, and improve their coordination. As part of a long-term national program, it would extend upgrading and site-servicing operations across the country. The project would consist of: (i) an upgrading component which would include land acquisition, compensation or rehousing of households affected by demolitions, regularization of occupancy status, and construction or extension of infrastructure networks and community facilities; (ii) a site servicing component including infrastructure works, and subdivision and servicing of land for housing and community facilities; and (iii) technical assistance to strengthen the management capacity of AFH. The assistance also includes the provision of computer equipment to both AFH and to the Direction des Collectivitis Locales in the Ministry of Finance and Economy. The Bank would finance part of the cost of the upgrading and site servicing operations (inter alia through budgetary allocations for infrastructure works and community facility construction) (see para. 53), and extend loans to beneficiaries for house construction in serviced areas, and for house construction on in-fill plots and house improvements in upgraded areas. Two pipelines of upgrading and site servicing subprojects have been identified. ARRU has already identified 18 sites for upgrading, for an estimated cost of about $40 million, and AFH has already identified 20 sites for servicing for a total cost of about $26.8 million. For 16 of the upgrading sites, engineering studies are already completed. For the site servicing component, land for all sites has been acquired and subdivision plans completed; most subdivision plans have already been approved by the municipalities. The Bank loan would only finance subprojects that meet agreed eligibility criteria. As this is the first urban project in Tunisia taking a program approach, there would be no free limit for eligibility. Approval by the Bank would be a condition of disbursement for each subproject. The final commitment date for subprojects would be December 31, 1989. 42. Upgrading Component. ARRU would act on behalf of the municipalities as the executing agency, and would liaise with the Bank on all matters related to this component. Established in 1981 as an autonomous body, ARRU was given responsibility and broad powers to coordinate urban renewal and upgrading activities. All ministries and national utility companies involved in the urban sector are represented on its board. ARRU has attracted and retained a highly qualified staff of professionals, and established itself as the lead agency for upgrading activities. It has a technical department of 12 engineers/architects, and well-staffed departments of finance, legal matters and socio-economic studies. At end-1985, ARRU's total assets amounted to TD 9.9 million of which about 66 percent represented works in progress. Its relatively high short-term debt is due to ARRU's role as an institution implementing works for its clients. By the end of 1985, ARRU's financial situation was satisfactory; unlike 1983, 1984 and 1985 showed a small profit, a trend that is expected to continue in the future. ARRU's resources come from budgetary allocations, and from fees for its services to the Government and the municipalities. -14 - 43. Under the proposed project, ARRU would expropriate and/or acquire the land to be upgraded, and compensate or rehouse people displaced by demolitions. It would prepare the necessary studies and bid documents, coordinate with the ministries, and enter into agreements with the municipalities, contractors and utility companies. Model agreements between ARRU and the municipalities, and between ARRU and the utility companies were reviewed and agreed upon during negotiations. For each upgrading subproject, the signing of an agreement between ARRU and the municipality concerned, satisfactory to the Bank, would be a subproject eligibility criteria; the signing of the agreements between ARRU and the utility companies (ONAS, SONEDE and STEG) would be conditions of effectiveness of the Bank Loan . To ensure ARRU's ability to initially cope with its increased responsibilities under the project, the Government would ensure that ARRU would continue to employ, until June 30, 1987, two consultants as urban planner and engineer, respectively, with qualifications and experience satisfactory to the Bank. 44. As under the Second and Third Urban Development Projects, CPSCL would be responsible for channelling project funds, including proceeds of the Bank loan, to municipalities for the upgrading operations. Established in 1975, CPSCL serves as the intermediary for channelling Government long-term, low-interest loans to municipalities for community facilities and infrastructure projects. It extends two types of loans: at 2 percent for up to 20 years including two years of grace for non-income earning projects, and at 4 percent for up to 10 years including four years of grace for income-generating projects. CPSCL has a Board of Directors made up of representatives of the Ministries of Finance and Economy and Interior and the Tunisian Towns' Confederation, but it has no staff of its own; the management of its resources is handled by BDET. It was agreed during negotiations that the BDET-CPSCL Management Agreement signed in 1979 would be maintained during the execution of the proposed project. CPSCL's resources come from Government appropriations and loan repayments; its spread is all profit, and is capitalized. At end-1984, its total assets amounted to TD44.5 million. CPSCL's financial operations are overall satisfactory; however, this institution is not using its considerable borrowing capacity and potential leverage. As its role increases, there will be a need to expand its operations and strengthen its management. Also, its current administrative situation and lending policies have to be overhauled to allow effective financial autonomy, expansion and growth. As this is directly related to the administrative and financial situation of the municipalities, a Bank municipal finance and management study will review CPSCL's role and recommend needed reforms. 45. The main eligibility criterion for CPSCL loans to municipalities is a debt ceiling set at 15 percent of the municipality's operating budget. Draft model agreements between CPSCL and municipalities under the upgrading component, establishing the cost and the terms and conditions of subloans, were reviewed during negotiations. These agreements would be executed after the approval by the Bank of each subproject. The Government has during negotiations agreed to take the necessary measures to authorize eligible municipalities to borrow from CPSCL. 46. Site Servicing Component. AFH, the executing agency for this component, was established in 1973 as a non-profit, self-financing institution to develop serviced land for housing. It has departments for administration - 15 - and finance, studies, technical matters and real estate, well staffed with about 30 professionals including 15 engineers. By end-1985, it had acquired about 4,350 hectares of land mostly in and around Tunis. However, AFN has recently started operating in other cities, and 48 percent of the 800 hectares it recently acquired are outside the capital area. AFE's land stock represents a considerable asset, which is currently undervalued because the land is not priced at its replacement cost; it is priced and sold at cost of acquisition and servicing, plus a charge for overhead and administrative expenses. Full payment in advance is required for individual lots. Commercial lots are sold to the highest bidder after servicing. For real estate developers, terms and conditions are negotiable. AFB requests 60 percent as downpayment upon approval of sale, 30 percent at start of work, and 10 percent when the land title is transferred. About 70 percent of AF's resources come from advance payments. Its equity capital has not increased since its establishment. However, assurances were obtained during negotiations that a plan for the conversion of AFH debt to the Government into equity will be submitted to the Bank by June 30, 1987 for review and comment, and, after taking into consideration the Bank's comments, will be executed. 47. AF would prepare detailed financial and economic feasibility studies, and technical and bid documents for each subproject, for appraisa3 by CNEL prior to Bank review and approval. It would also participate in the site servicing component, contributing in land equity, studies and administrative fees and services. It would establish the sale prices of plots, and, in conjunction with CNEL and the municipalities, would select beneficiaries. AFE's land sale policies do not allow auction, selling for profit or setting different lot prices according to size, use or location; this has prevented cross-subsidization and adequate margins. The regular large size of its plots (between 250 and 650m), and the required substantial advance payments in cash, excluded low-income groups and buyers with limited saving capacity; it also forced moderate income purchasers to delay construction on their acquired plots for several years. In addition, because of its limited capital, APE has been unable to accumulate sufficient land reserves to adequately respond to private and public demand. Reform measures will be introduced under the proposed project to address these constraints. APE would be required to service and sell smaller plots (between 80 and 160ms) and establish a plot pricing system that would allow the replacement of its land stock, and ensure a continuous flow of funds without Government subsidies. Plot sale prices would include the actualized price of the serviced land, financial charges, and the cost of administrative studies and other overhead incurred by AFE. The Government has agreed to take measures, satisfactory to the Bank, to ensure appropriate plot pricing and cross-subsidization benefitting smaller plots, and the introduction of these two measures would be a condition of disbursement for the site servicing component of the project. Also, with support provided under the technical assistance program, AFE would improve its administrative and accounting procedures, and introduce a computerized management system. 48. CNEL would manage Government and Bank funds for the site servicing component; and would contribute about $6.0 million equivalent to the financing of this component from its own resources. Established in 1974, CNEL is today a large, autonomous, well-managed public savings and loan agency, with some 540 employees. It has been successful in mobilizing domestic resources through contractual savings plans linked to housing construction loans. CNEL subscribers may borrow up to twice the amount saved - 16 - plus accumulated interest, with an established ceiling of TD 13,000. Savings contracts periods are either 4 or 5 years, at the subscriber's choice, entitling them to a 10 or 15 years maturity. CNEL also manages the Fonds pour la Promotion du Louement des Salariis (FOPROLOS), a Government fund that grants housing loans to wage earners whose wages are up to 1 1/2 times the minimum wage (currently about TD 90 per month). Interest rates on deposits were raised in March 1986 to 6.75 percent per annum. CNEL also raised its interest rate for lending to 8.25 percent p.a. Though its initial target was only to attract 8,000 savings contracts annually, the number of contracts is well over this goal, though declining inter alia because of bottlenecks in housing and serviced land production. By the end of 1985, the balance sheet showed TD 168.9 million of savings balances by savers. 49. CNEL also finances SNIT and other public and private developers, which cater to the housing needs of upper and middle income population groups. At end-1985, its total assets amounted to TD 319.1 million. As CNEL has no capital of its own, its debt to equity ratio is not a meaningful indicator. Its resources, which come from savings contracts and the management of FOPROLOS, are not all converted into loans, because of bottlenecks in the supply of developed land and low-cost housing. This results in considerable liquidity. At end-1984, only 66 percent of resources from savings contracts, and 58 percent from FOPROLOS resources were converted into loans; the balance was used to finance SNIT and other developers. It has, at present, a comfortable spread, and has consistently shown profit. As long as deposits largely exceed withdrawals and account cancellations, CNEL's financial balance will remain sound. This depends inter alia on the supply of developed land to its contractual savers. 50. Under the proposed project, CNEL would partially finance the site servicing operations of AFE, and provide loans for plot acquisition and house construction on sites serviced by APn, as well as for house construction on in-fill plots and house improvements in areas upgraded by ARRU. It would appraise subprojects to be executed by AF1, prior to their submission to the Bank for approval. 51. Technical Assistance would improve the administrative and accounting procedures of AFR and the management of its land stock, introduce a computerized management system, and provide the required expert services and computer equipment. It would include 2.75 man-years of consultant services in land management, public administration, and computer science. AFR has agreed to employ the required consultants under terms and conditions satisfactory to the Bank. In addition, computer equipment would be furnished to the Direction des Collectivit6s Locales in the Ministry of Finance and Economy, which supervises the municipalities' budgets, so as to improve its data collection and management. 52. Project Cost and Financing Plan. The total cost would be about $67.4 million equivalent, of which $30.2 million (44.8 percent) in foreign exchange. The loan would cover the full foreign exchange cost of the project, and would be made to the Government at the standard variable interest rate, with a repayment period of 20 years including three years of grace. The local cost contribution ($37.2 million) would be provided by the Government ($24.2 - 17 - million) and two of the agencies involved in the project: CNEL ($6 million) and AFR ($7 million). An amount of $0.6 million has been allocated for technical assistance. These amounts do not include taxes and duties from which the project is exempt. The Government would bear the foreign exchange risk, and the interest rat risk. 53. Allocation of Funds. To finance the upgrading component, an amount of $7.52 million out of the proceeds of the loan would be onlent to CPSCL by means of a Subsidiary Loan Agreement. For the site servicing component, $14.53 million of the loan amount would be managed by CNEL on behalf of the Government, through a Management Agreement between the Government and CNEL. Part of this amount ($7.85 million) would be onlent to AFE through a Financi=g Agreement, and the balance ($6.68 million) to beneficiaries for house construction. An amount of $8.15 million would be channelled by the Government through budgetary allocations to the ministries and agencies responsible for the provision of infrastructure and community facilities. This amount includes $0.6 million of technical assistance to AFE. The signing of the Subsidiary Loan Agreement between the Government and CPSCL, the Management Agreement between the Government and CNEL and the Financing Agreement between AF and CNEL would be conditions of effectiveness of the Bank loan. 54. Onlending Terms. For the upgrading component a total of about $12.9 million equivalent of combined Government and Bank funds would be onlent to CFSCL at 2 percent for Government funds (4 percent for income generating operations) for 20 years including 2 years of grace, and, for Bank funds, at the cost of borrowing at the date of the Bank loan agreement, for a term of ZO years, including 3 years of grace. CPSCL would then onlend these funds to municipalities at its regular terms and conditions for Government funds, and at cost for Bank funds. This is expected to produce a weighted average interest rate of about 6 percent. CNEL would manage on behalf of the Government a total amount of about C26.2 million of combined Bank and Government funds, of which it would onlend about $13.5 million to finance AFE for its site servicing works, at 11 percent interest p.a. for a maximum term of 3 years, and about $12.7 million for house construction loans in both upgraded and serviced areas at an interest rate of 8.25 percent p.a. for those beneficiaries earning more than 1 1/2 times the minimum wage and of 7 percent p.a. for those beneficiaries earning equal to or less than 1 1/2 times the minimum wage, in each case for 20 years, with two years of grace. After completion of the site servicing works, CNEL would consolidate short-term financing of AFH works into plot acquisition loans. To acquire a plot on a serviced site, the beneficiary would make a total downpayment of 30 percent of the plot price, of which 10 percent would be paid at the time of reservation, and 20 percent in installments during the execution of site servicing works. The balance would be financed at the time of plot delivery, through a loan from CNEL at the above terms. 55. Interest rates under the project are compatible with or above the inflation rates estimated at about 7 percent for the coming years. They take into account the capacity to pay of municipalities, and of the low-in,.ome target population. The Government is in the process of reviewing further the overall structure of interest rates. It has agreed to review with the Bank, by December 1 of each year, the interest rates charged in the housing sector and to take all necessary measures to ensure that financial intermediaries - 18 - apply interest rates sufficient to covir at least the cost of capital and earn a spread sufficient to cover their operating cost. With Bank assistance, the Government is designing further reform measures in the housing sector to be introduced progressively during the Seventh Plan period (1987-1991). These reforms would include institutional measures for the agencies involved in the sector. 56. Procurement. Civil works for upgrading and site servicing would be dispersed over about 40 sites across the country; they would be contracted separately for each category of works over three years, and executed and administered by different agencies and utility companies over a period of about 5 years. As it would be impractical to aggregate the contracts into packages large enough to attract international contractors, all procurement would be carried out through local competitive bidding in accordance with Bank procurement guidelines. LCB procedures have been reviewed in the Bank; they are generally consistent with the need for economy and efficiency in the execution of the project. However, some exceptions were required to make them consistent with the Bank's procurement guidelines and were agreed upor during negotiations. 57. Computer equipment for AFH and the Direction des Collectivit6s Locales in the Ministry of Finance and Economy, costing about $70,000 in total, would be procured on the basis of quotations from three qualified suppliers. SONEDE and STEG would execute the water and electrical works according to their procedures. They would call for tenders to select contractors through LCB or execute their works by force account through their contracts with ARRU and AFH. The works to be executed by force account are unsuitable for competitive bidding as their quantities cannot be defined accurately in advance; also, for ease of maintenance, the material must be compatible with the existing utility company stocks. These companies have the competence and experience to ensure rapid, efficient, and least cost execution of water and electrical works under the project. 58. The large number of small contracts (300), their similarity, and the capability of the Borrower's agencies to procure efficiently would make the prior review of most of these contracts unnecessary. Only contracts exceeding $1 million would be reviewed by the Bank prior to award. All other contracts would be reviewed by the Bank after their award, and prior to the first application for withdrawal. 59. Disbursement. The proposed loan of $30.2 million equivalent is expected to be committed over a period of 3 years. Disbursement would start in calendar year 1986 (FY87), and would be extended over 9 years. The Closing Date is December 31, 1994. Disbursement for each item will be as follows: 58 percent of total expenditures for civil works; 50 percent of total expenditures for rehousing costs; 54 percent of total expenditures for house construction and improvement loans; and 100 percent of total expenditures for technical assistance. The Bank would not finance the cost of land, administrative and overhead costs, or engineering studies. Disbursement would be made on the basis of standard Bank disbursement procedures with the exception of house construction loans, and expenditures below $20,000. For these items, statements of expenditures would be required. The Borrower would retain all documentation to support the disbursements, and will keep records of all expenditures for examination by Bank missions. - 19 - 60. An amunt of $0.4 million for retroactive financing, covering expenditures after July 1, 1986, would be provided for rehousing costs incurred for families displaced as a result of the need to demolish houses for infrastructure works in upgrading areas. A revolving fund of $1 million would be established in the Banque Centrale de Tunisie (BCT) to cover all disbursements, and would be replenished against withdrawal applications. Documentation to support all withdrawals and replenishment of this account will be kept by BCT, and audited annually. 61. Reporting, Accounts and Audits. Accounting systems for CPSCL, CNEL, AFH and ARRU would follow the Tunisian Plan Comptable Commercial, which adequately provides for recording of project expenditures. Each institution has agreed to keep separate accounts for project-related financial transactions, and CNEL, AFH and ARRU will in addition to its project accounts have its annual accounts audited by independent auditors acceptable to the Bank; all will submit these accounts to the Bank within 6 months after the end of each fiscal year. ARRU would prepare and consolidate accounts, and carry responsibility for monitoring, coordination, and evaluation for the upgrading component. AFE would submit to CNEL the details of the site servicing expenditures; CNEL would consolidate AFR accounts and would keep accounts related to all house construction and plot acquisition loans. 62. Cost Recovery. About 80 percent of total project costs would be recovered as follows: for the upgrading component, cost of on-site infrastructure works would be recovered by the municipalities through improvement charges under the Contribution des Riverains, a frontage tax system, over a period of 20 years at an interest rate which shall cover the cost of their borrowings from CPSCL. These terms would be reflected in the decrees establishing the frontage tax for all municipalities concerned. Utility connection costs would be recovered through utility tariffs. Cost of land acquisition associated with the regularization of ownership, and cost of land for the in-fill plots in upgrading areas, would be recovered through direct sales. For the site servicing component, cost of land and servicing would be recovered through sales. The pricing policy for land sales would ensure both affordability and effective cost recovery. 63. Selection of Beneficiaries. For the upgrading component, beneficiaries for the in-fill plots would be selected by a committee representing ARRU and the municipality concerned. First priority would be given to the families whose houses have been demolished, second priority to families in the site whose houses are condemned for sanitary or safety .reasons, and third priority to families who own no house and who would be displaced to reduce overcrowding. Other beneficiaries would be selected on the basis of application date, among families with income of up to two times the minimum wage and who own no house. For the serviced sites, a selection committee including AFH, CNEL and the municipality concerned would select the beneficiaries. An upper limit of 30 percent of the lots would be reserved for CNEL and FOPROLOS subscribers. First priority would be given on the basis of application date, to families with income of up to two times the minimum wage and taking into account the family situation. All beneficiaries would be required to own no house, and document that they have sufficient income to afford the purchase of the plot. - 20 - 64. Income Profiles, Affordability Analysis and Urban Poverty Impact. The 1984 income distribution of the urban population of Tunisia was estimated on the basis of the 1980 Household Consumption Survey, and the increase of private consumption per capita during 1980-1984, assuming no major changes in the urban income distribution pattern. The estimated 1984 overall median urban household monthly income is TD 183. In the identified upgrading sites, it averages TD 93, and ranges between TD 55 and TD 140. According to the eligibility criteria for acquiring serviced sites, monthly charges should not exceed 15 percent of the median monthly income, or 33 percent of this income when combined with a house construction loan. Overall, about 38 percent of the beneficiaries would be those living below the Bank-defined absolute poverty threshold, estimated in 1984 at about TD 80 per household/month; they would benefit from 36 percent of the project costs. With regard to the upgrading component, 38 percent of the beneficiaries would be urban poor and would benefit from 39 percent of the component's costs. With regard to the sites serviced by AFH, 37 percent of the plots would be affordable by the urban poor, who would benefit from 30 percent of this component's cost. 65. The average monthly improvement charges for beneficiaries of upgraded sites would be TD 2.7 per household, or 3.1 percent of the monthly average median income. Even if this percentage is increased to 8 percent, improvement charges become affordable by an average of 96 percent of beneficiaries. The cost of the smallest in-fill plot option, together with a construction loan, would be affordable by the families to be rehoused, and would represent no more than 25 percent of their monthly income. Monthly repayments for the acquisition of the smallest AFH plot (80mz) would be affordable by 95 percent of all urban households (92 percent of all urban households for such plot acquisition combined with a housing construction loan). For these households, the first (and largest) portion of the downpayment required upon the start of works (10 percent of the plot price) would not exceed 2 months' income. 66. The Economic Rate of Return (ERR) of the combined subprojects currently in the pipelines is estimated at 20 percent. It is expected that the rate of return of all individual subprojects financed under the loan would be within the same range. Quantifiable benefits are based on estimates of increased rental values for housing as a result of upgrading, and higher land values for newly serviced land. Indirect project benefits to neighboring areas would also be reflected in the increased rental and land values, but since their measurement is difficult they have not been included in the benefit stream. Sensitivity analyses show that either a 20 percent increase in costs, or a 20 percent decrease in benefits would drop the ERR to about 16 and 15 percent, respectively; a simultaneous 10 percent increase in cost and 10 percent decrease in benefits would drop it to 15.6 percent, and a one-year delay in benefits would result in an ERR of 16.6 percent. 67. Project Benefits and Risks. The project would assist the Tunisian Government in alleviating the problems associated with poorly serviced communities, and would extend the benefits of upgrading such communities to practically every region of the country. It would also provide plots at prices affordable to low-income groups, thus helping to resolve one of the main constraints affecting the housing market. The project would continue a process of strengthening the overall institutional framework in the urban sector. During project preparation, both ARRU and AFR prepared upgrading and land development programs throughout the country; the implementation of these - 21 - programs would establish these agencies as the principal instruments for developing, executing and monitoring well established national programs in their respective areas of competence. The project would implement one of the major recommendaticas of the Housing Sector Review by extending CNEL's activities to include the financing of land development and pInt acquisition. The project is geared towards low-income segments of the population. It would benefit directly about 150,000 persons, of which 90,000 from improvement of urban services in ttsir current residence, and 60,000 from acquisition of serviced plots at low, affordable prices. The population of settlements and owners of vacant land adjacent to the project areas would also benefit indirectly from their proximity to improved services and environment. 68. In the past, AFH catered only to middle and upper-income groups, and developed large lots, relying on future beneficiaries for prefinancing its operations. Under the project, AFH would introduce changes in its administrative and management procedures, adjust to a new financing system, and develop smaller, affordable lots to cater to the needs of low-income groups. The risk that these objectives may not be fully attained is reduced by the willingness of AFH's management to adjust its policies, the steps it has already taken to change its mode of operation, and the support provided under the project through the technical assistance program. There is also a risk of delay in implementation, attached to the heavy administrative load implied by the large number and geographical dispersion of project sites. However, the experience gained under the Third Urban Development Project, the reinforcement of ARRU's staff, and the technical assistance program to AFK would improve the capacity of these institutions to cope with their increased responsibilities. PART V - RECOMMENDATION 69. I am satisfied that the proposed Loan would comply with the Articles of Agreement of the Bank and recommend that the Executive Directors approve the proposed Lean. A. W. Clausen President Attachments June 9, 1986 Washington, D.C. -22 - AM i Page 1 of 7 TU4iL - SOCIAL. INICATORZ DATA SHET TUNIS LA REFENElICE GRoun (wCirEu AERE g M0ST (mOf? KECNT EITINATE) /b KgC=II HIDDLE INCME HifOlE Tri|E 1960ö 1970& UTIATEb m. AFRICA & xID EAST LAT. AMERICA & CAR A (TM0GSD 9Q. *) TOTAL 163.6 163.6 163.6 AGICULTURAL 68.8 70.3 81.4 aP NR CAPZR (UBS) .. .. 1290.0 1134.9 1875.9 aMTr co inPO Im CAPITA (KILOGA~ OF air. EQUVALENT) 119.0 230.0 496.0 623.9 993.6 POMUATOU 45 VIAL sTATSTICE POPULATIOUMID-TEAR (TKOUAuDS) 4221.0 3127.0 6886.0 UAN POPLULATION (2 OF TOTAL) 36.0 43.3 53.6 49.0 67.7 POPULATTON PROJECTIONS POPULATION IN TEAR 2000 (ILL) 10.0 STATIONARY POPULATION ('ILL) 19.0 POPULATION ION ENTIM 1.9 POPULATION DENSITT PER sQ. LM. 23.8 31.3 42.1 37.8 48.0 PER sq. wM. ACKI. LND 61.4 72.9 82.4 470.1 91.1 POPULATION AGE STRUCTUuE <2) 0-14 n$ 43.3 46.2 40.3 43.3 38.3 15-64 TS 52.4 49.9 55.7 53.0 57.1 63 AND AOVE 4.1 3.7 3.8 3.3 4.2 POPULATION CROMTS RATE <2> TOTAL 1.8 /c 1.9 le 2.3 2.8 2.4 mRmAN 3.2 3.8 4.0 4.4 3.6 CRUDE IRTH RATE (PER TH0US) 48.9 40.6 32.6 40.0 30.9 CUDE DEAT RATE (PER TRUS) 21.0 14.6 9.1 11.5 8.0 CROSS REPRODMCTIOK RATE 3.5 3.2 2.4 2.8 2.0 PANILT PLAMING ACCEPTORS. ANNIAL (TS) .. 29.2 180.9 /d 0isEa (Z OF NARrI m 0<EN) .. .. 41.0 21.4 43.3 v00D AND RUTRXTIOU 1102X OF FOOD PROD. PER CAPITA (1969-71-100) 97.0 96.0 128.0 95.1 109.6 PER CAPITA SUPPL Or CALORIES ( OF REQUIRLMENTS) 95.0 96.0 111.0 118.2 113.2 PROTEINS (CRA~S PER DAY) 59.0 60.0 74.0 77.8 69.. OF RICH AN~NAL AND PULS! 13.0 14.0 23.0 l. 17.8 34.2 CIILD (ACES 1-4) DEATH RATE 36.1 23.9 8.0 12.8 4.8 CHALT LIFE EXPECT. AT BIRTH (TEARS) 48.1 54.2 61.5 57.8 64.8 INFAT MORT. RATE (PER TH0US) 157.5 131.0 83.0 96.8 59.7 ACCESS TO SAFE WATER (POP) TOTAL .. 49.0 70.0 67.2 65.3 URAN .. 92.0 91.0 93.4 76.5 ItRAL , .. 17.0 46.0 45.8 44.2 ACCESS 10 EXCRETA DISPOSAL (2 OF POPULATIOf) TOTA! .. 62.0 56.0 /f 45.9 56.3 URAK .. 100.0 42.0 63.0 73.4 RURAL .. 34.0 .. 28.6 25.5 POPULATION PER PETSICIAN 10030.0 5930.0 3690.0 /f 4331.0 1909.7 POP. PER NUMS PERSN0 .. 730.0 890.0 7 1845.0 808.2 POP. PER HOSPITAL BED TOTAL 410.0 410.0 460.0 /d 621.8 362.0 URSAN 230.0 1 310.0 350.0 7h 545.0 422.0 tuAL 1040.0 1270.0 1230.0 _W 2511.3 2716.7 ADMISSIONS PER NOSPITAZ. BED .. 24.1 25.0 / 25.7 27.5 MOMUING AVNACE SIZE OF MIIUSEHOLD TOTAL .. 5.1 /t URMAN ..5.1 W .... RUKAL .. 5. L ATERAGE 50. OF PERSONS/Ro. TOTAL .. 3.2 /1 uRA .2.7 7 . RURAL .. 3.6 .1 PERCENTAGE OF DWELLINCS WITK ELECT. TOTAL .. 24.0 fl URBAN .. RURAL ........ -23- ANNEX I Pagke 2 of 7 TUNISIA - SOCIAL INDICATORS DATA SUSET TUNISIA REFERIENCE CROUPS (1IE[ITED AVERAOES) g (most RECENT ESCIMATS) /b 19 ECNR MIDDLE InCOME MIDDLE TCom 96m97 EsTInATm/b N. AICA å MID WAST LAT. AMERICA & CA ADJUSTED EKROLIMENT RATIOS PRIKM3A TOTAL 66.0 101.0 111.0 89.8 106.7 MALE 88.0 121.0 123.0 10? .7 108.5 FeMLE 43.0 80.0 98.0 75.2 104.6 SECOMDART: TOTAL 12.0 23.0 32.0 42.9 44.2 XLE 19.0 33.0 39.0 50.9 42.7 pELE 5.0 13.0 25.0 34.6 44.9 vOCATIO=AL (x aF SEMOMDARY) 23.5 11.1 23.6 10.0 13.3 PUPIL-TEACKER RATIO PRZNARY 61.0 47.0 38.0 29.7 29.9 SCONmDAT 16.0 28.0 19.0 18.8 16.7 PASSKNOCR CARS/TROUSAD POP 10.5 13.0 .. 17.8 46.0 RADO RECKIVERS/TROUSAND POP 40.3 75.7 164.0 175.9 328.3 TV RECEIERB/TNB~SAID N0? 0.1 14.0 52.2 51.2 112.4 NEMSPAPER ("DAILY 0NaL IrEEST") CICULATION PER THOUSAD POPULATION 18.6 15.9 40.5 37.2 81.1 CZDL ANIUAL ATTEoAmCE/CAPITA 1.6 .. 1.5 2.4 2.4 LANGG. POMEX TOTAL LABOR rooCE (TOUS) 1138.0 1215.0 1770.0 FDALE (PERCENT) 6.0 7.7 8.6 11.0 23.6 ARICULTURE (PECENT) 56.0 50.0 35.0 /r 42.4 31.4 IDUSTrT (PE~CENT) 18.0 21.0 32.0 7 27.9 24.3 PATICIPATION uATE (PERCENT) TOTAL 27.0 23.7 25.7 26.2 33.5 MALE 50.2 44.2 46.4 46.2 51.3 PERALE 3.3 3.6 4.4 5.8 15.9 ECONOMC DEPENDENa RATIO 1.8 2.1 1.7 1.8 1.3 £NII DISTEIMTIO PER=ODI 0p PRIVATE INC=ME RECEIVED ST HIGREST 50 a HOUSEOLDS .. .. aImEST 20% 0v EOUSEROLDS .. .. LOEST 20 OF BOUSEHOLDS .. .. LOEST 40 o HOUSEMOLDS .. .. ESTINATED ABSOLUE rov=RTT INC~NE LEVEL (US$ PE CAPITA) URBAN .. .. 204.0 /e 226.3 288.3 RUEAL .. .. 97.0 7 134.0 185.3 ESTINATED RELATIVE POVERTT IN~CE LEVEL (USS PER CAPITA> M3A~ .. .. 193.0 /e 431.5 519.8 R~RAL .. .. 193.07 326.0 359.7 ESTIKATED POP. DELW ABSOLUTE F0nEr DICO LEVEL () URAN .. .. 20.0 /. RRAL .. .. 15.07O 29.0 NT AVAIL.BLE T 0 T E S La The gromp avaragas for aach indicator are poplatton-mIghted arithmatic øaus. Cvarage af countris amo~ ~he indicators dapend. an availabiuty of data and i. not uniform. /b nlsa otharvise notad, "Data for 1960" rafer to any year beten 1959 and 1961; "Data for 1970" botvaen 1969 and 1971; and data for "Kwat R%cat Etiiata" betvem 1981 and 1983. /c De to aeLgracion. populato gr~th rate ta lover than rate of natural increage; Id 1979; a 1977; /f 1980; ZL 1962; A 1976; /1 1966. JUNE. 1985 ANNEX I 24 Page 3of 7 DEFINMONS OF SOCIAL INDICATORS Nole: Although the data are drawn from soureesgencrallyjudged the most authoritative and reliable. it should ao be noted that they may not be internaionally comparabic because of the lack of standardized defnitions and concepts used by different countries in collecting the data. The data are. nonetheless, usenul to describe orders of magnitude. indicate trends. and characteriz certain major differences between countries. The reference groups are (1) the same country group of the subject country and 121 a country group with somewhat higher averagr income than the country group ofthe subject country (except for "High Income Oil Exporters"group where -Middlc Income Nonh Africa and Middle East- ischosen because ofstronger socio-cultural alnities). In the reference group data the averages am population weighted arithmetic means for each indicator and shown only when majority of the countries in a group has data for that indicator Since the coverageofcountriesamong the indicators depends on the availability of data and is not uniform. caution must becimrcised in relating averages of one indicator to another. These averages an only useful in comparing the value of one indicator at a tme among the country and refer groups. AREA (thousand sq.km.) Cr Bth Rate (per theusad) -Numberof live births in the year Tetal-Total surface area comprising land area and inland waters: per thousand of mid-year population; 196. 1970. and 1983 data. 1960. 1970 and 1983 data. Crude Death Rate (per thowand)-Number of deaths in the year Agrickral-Estimate of agricultural area used temporarily or per thousand of mid-year population: 1960. 1970. and 1983 data. permanently for crops. pastures. market and kitchen gardens or to Grass Repefietien Ran-Average number ofdaughters a woman lic fallow. 1960, 1970 and 1982 data. will bear in her normal reproductive priod if she experiences present age-specific flertili ty races: usually five-year averages ending GNP PER CAPITA (USSY-GNP per capita estimates at current in 1960. 1970. and 1993. market prices. calculated by same conversion method as World fd Plm-Aeptrs. Anual fthousandj-Annual num- Bank Ardas (1981-83 basis) 1983 data. her ofacceptors ofbirth-control devices underauspices ofnational ENERGY CONSUMflION PER CAPITA-Annual apparent family planning program consumption of commercial primary energy (coal and lignite. Foosi!y PhmxLv--sers (pereen of-oried iwn)-The percen- petroleum. natural gas and hydro-, nuclear and geothermal elec- tae of married women of child-bearing age who are practicing or tricity) in kilograms of oil equivalent per capita; 1960. 1970. and whose husbands are practicing any form ofcontraception. Women 1982 data. ofchild-bearing age are generally women aged 1549. although for some countries contraceptive usage: is measured for other age POPULATION AND VITAL STATISTICS groups. Tertal Pepuatiaon., Mid-Year (housmdr)-As of July 1; 1960. 1970. FOOD AND NUTRITION and 1983 data. Usren Polpation (percent of toral)-Ratio of urban to total hdox ofFeed Proifreion Per Capita (19971= I0fl-ndex of per population; different definitions of urban areas may affect compar- cludes anial feeduan sf ag l Food commoditi es ability of data among countries 1960. 1970. and 193 data.(.g sugarcane instead of sugar) Popuation Pojeies which are edible and contain nutrients (e.g. coffee and tea are Pbprlation in year 2000-The projection of population for 2000. excluded); they comprise cereals. root crops. pulses, oil seeds. made for each economy separately. Starting with information on vegetables. fruits, nuts. sugarcane and sugar beets, livestock, and total population by age and sex, fertility rates. mortality rates. and livestock products. Aggregate production of each country is based international migration in the base year 1980. these parameters on national average producer price weights 191-65. 1970. and were projected at five-year intervals on the basis of generalized 1982 data. assumptions until the population became stationary. Pe Capta &py ofCnAmrs (pereem ofreqw-rems)-Comput- Stationary popidation-Is one in which age- and sex-specific mor- ed from calorie equivalent of net food supplies available in country tality rates have not changed over a long period. while age-specific per capita per day. Available sipplies comprise domestic produc- fertility rates have simultaneously remained at replacement level tion. imports less exports, and changes in stock. Net supplies (net reproduction rate= 1). In such a population. the birth rate is exclude animal feed, seeds for use in agriculture. quanticies used in constant and equal to the death rate, the age structure is also food processing. and losses in distribution. Requirements were constant, and the growth rate is zero. The stationary population estimated by FAO based on physiological needs for normal activity size was estimated on the basis of the projected characteristics of and health considering environmental temperature. body weights. the population in the year 2000. and the rate of decline of fertility age and sex distribution of population. and allowing 10 percent for rate to replacement level. wastes household level; 191. 1970 and 1982 data. Pbptdation Morentu-Is the tendency for population growth to Per Caita Supply offPotein (grans per day) -Protein content of continue beyond the time that replacement-level fertility has been percapita net supply offood perday. Net supply offood isdefined achieved; that is. even after the net reproduction rate has reached as above. Requirements for all countries established by USDA unity. The momentum of a population in the year t is measured as provide for minimum allowances of 60 grams of total protein per a ratio of the ultimate stationary population to the population in day and 20 grams of animal and pulse protein, ofwhich 10 grams the year t. given the assumption that fertility remains at replace- should he anima protein. These standards are lower than those of ment level from year r onward. 1985 data. 75 grams of total protein and 23 grams of animal protein as an Population De-iry average for the world, proposed by FAO in the Third World Food Per sq.kns.-Mid-year population per square kilometer (100 hec- Supply; 11. 1970 and 1982 data. tares) of total area; 1960. 1970. and 1983 data. Per Capita Protein Supply &os Anal and Pie-Prote supply Per sq.m. agriculdrral land-Computed as above for agricultural offood derived from animals and pulses in grams per day: 1961-65. land only. 1960, 1970. and 1982 data. 1970 and 1977 data. Pipsultio Age Strmcrare (percent-Children (0-14 years). work- CUId(ages 1-4j Death Rare (perthousand)-Number ofdeaths of ing age (15-64 years). and retired (65 years and over) as percentage children aged 1-4 years per thousand children in the same age of mid-year population; 1960. 1970. and 1983 data. group in a given year. For most developing countries data derived PopulationGrowth Roe (percenr-ral---Annual growth rates of from life cables: '960. 1970 and 1983 data. total mid-year population for 1950-60. 1960-70. and 1970-83. HEAIXH Poplation Growth Rare (percessr)-wa--Annual growth rates Life Expectany at Bith (yearsp-Number of years a newborn of urban population for 1950-60. 1960-70. and 1970-83 data. infant would live if prevailing patterns of mortality for all people -25- ANNEX I - Page 4 of 7 at the time of of its birth were to stay the same throughout its lire: Pupl-recr Ruri- prmar, and rondarY-Total itudents en- 1960. 1970 and 1983 data. rolled in primary and secondary levels divided by numbers of qfar Mraty LAwe (pr thessd)-Number of infants who die teachers in the corresponding levels. before reaching one year of age per thousand live births in a given year; 1960. 1970 and 1983 data. CONSUMPTION Access te S* Water (prcer ef yparales -ortal, farbm. and Passewr Cars (per thousand popom-lusserger cars comn rwal-Number of people (total. urban, and rural) with reasonable prise motor cars seating less than eight persons. excludes amhul- access to safe water supply (includes treated surface waters or ances. hearses and military vehicles. untreated but uncontaminated water such as that from protected A Aftwives (per theandpopaloriou)-All types of receivers boreholes, springs and sanitary wells) as percentages of their respec- for radio broadcasts to general public per thousand of population tive populations. In an urban area a public fountain or standpost excludes un-licensed receivers in countries and in yearr when located not more than 200 meters from a house may be considered registration of radio sets was in effect: data for recent years may as being within reasonable access of that house. In rural areas not be comparable since most countries abolished licensing. reasonable access would imply that the housewife or members of the houselhold do not have to spend a disproportionate part of the day TV Receives (perusdopaioj-TV receivers ror broadcast in fetching the family's water needs. to general public per thousand population: excludes unlicensed TV Acemto mcnw Dbwd (ercnt o aron. receivers in countries and in years when registration of TV sets was Access te Eucrere Disposal (prcear of popmatdom. rtet , urar6snm,cs and rural-Number of people (total, urban, and rural) served by excreta disposal as percentages of their respective populations. Newper CvcxhWm (per thousandpoplio i-Shows the aver- Excreta disposal may include the coflection and disposal, with or age circulation of daily general interest newspaper. defined as a without treatment. of human excreta and waste-water by water- periodical publication devoted primarily to recording general news. borne systems or the use of pit privies and similar installations. It is considered to be -daily" if it appears at least four times a week. Ppato per Physidan-4pulation divided by number of prac- Cinem Ann AtedEice pff Capita per Year-Iased on the tising physicians qualified from a medical school at university level. number of tickets sold during the year. including admissions to epudeis per Nursing Person-bpulation divided by number of drive-in cinemas and mobile units. practicing male and female graduate nurses, assistant nurses. practical nurses and nursing auxiliaries. TO FRCn Parpdalo per Hospit Bed-otaI, aram, and rrWL-Ilpulation T (total, urban, and rural) divided by their respective number of ding armed forces and unemployed but excluding housewives. hospital beds available in public and private,nr a siaz students. et. covering population or all ages. Definitions in hospitals and rehabilitation cnters. Hospitals are establishments various countries are not comparable. 1960. 1970 and 1983 data. permanenly staffed by at least one physician. Establishments prov- lemale (percent)-Femak labor force as percentage of total labor iding principally custodial care are not included. Rural hospitals, foe. however include health and medical centers not permanently staffed Apioltwe (perceat)-Labor force in farming. forestry, hunting by a physician (but by a medical assistant, nurse. midwife, etc.) and fishing as percentage of total labor force: 1960.1970 and 1980 which offer in-patient accommodation and provide a limited range data. of medical facilities. Andtry (pemw)-Labor force in mining. construction. manu- Admissions per Hospital Bed-Total number of admissions to or facturing and elctricity, water and gas as percentage or total labor discharges from hospitals divided by the number of beds. force: 1960.1970 and 1980 data. Pari*paton Rar (pwceW)--foWeL mok, andftmale-Participation HOUSING or activity rates are computed as total, male. and female labor forc Average Sie of HomrlM (persons per -ta , as peretages of total, male and female population of all ages andrural-A household consists of a group of individuals who share respectively. 1960. 1970. and 1983 data. These are based on ILas living quarters and their main meals. A boarder or lodger may or participation rates refecting age-sex saructure of the population. and may not be included in the household for statistical purposes. long time tred. A few estimates are from national sources. Average Number of Persaur per Room-etotal rban amd ral- Ecoarmic Depemdemy Ratio-Ratio of population under ar. and Average number of persons per room in all urban. and rural 65 and over. to the working age population (those aged 15-64). occupied conventional dwellings. respectively. Dwellings exclude non-permanent structures and unoccupied parts. INCOME DISTRIUTION Pfrfemwge of Dwefagfs itA Electicfey--oa, arban. and rural- Ante of lotal Diposzbk Income (boh i cash and kindp- Conventional dwellings with electricity in living quarters as percen- Accruing to percenile groups of households ranked by total house- tage of total. urban. and rural dwellings respectively. hold income. EDUCATION POVERTY TARGET GROUPS A#Wested EiroAme Rados The following estimates are very approximate measures of poverty Pimary school - total. male and female-Gross total. male and levels, and should be interpreted with considerable caution. female enrollment of all ages at the primary level as percentages of Fwinated Absolte Poery Income Lewe rUSS per cat -urban respective primary school-age populations. While many countries and rual-Absolute poverty income level is that income level consider primary school age to be 6-11 years. others do not. The below which a minimal nutritionally adequate diet plus essential differencs in country practices in the ages and duration of school non-food requirements is not affordable. are reflected in the ratios given. For some countries with universal Estimated Relatv Pbrerry Income Level WSS per capiral-urban education, gross enrollment may exceed 100 percent since some awd rural--Rural relative poverty income level is one-third of pupils are below or above the country*s standard primary-school average per capita personal income of the countr%. Urban level is age. derived from the rural level with adjustment for higher cost of Secondary school - total. mafe and femaLe-Computed as above: living in urban areas. secondary education requires at least four years of approved pri- Finimaed Pop.Wio Below Absolate Poverty Income Level (per- mary instruction: provides general. vocational. or teacher training ceur)-arban and rmral- Percent or population turban and rural instructions for pupils usually of 12 to 17 years of age. correspond- who are absolute poor. ence courses are generally excluded. Vocational Enrollaienr (percent of secondary)-Vocational institu- Comparative Analysis and Data Division tions include technical. industrial, or other programs which operate Economic Analysis and Projections Department independently or as departments of secondary institutions. June 1985 -26- ANNEI Page 5 of 7 2NMSIA - sca C DD~E Aml Gkut Iate (at 1m pris) Idi-atoen at currnt prUuic) 19&6 19 1980 _199 .1982 19n 3 1 9_# 1995 19 1991 t8T'U14L MXD<IZ Gro dmstic prdt /1 7,9WL.5 6.6 7.4 5.5 0.1 4.9 5.5 4.5 2.1 3.6 Agriculue 1059.2 -4.8 9.9 6.5 -10.3 2.5 13.3 15.0 -3.8 2.5 rnrurry 2,411.8 10.8 9.0 6.8 0.5 7.3 3.2 1.1 2.6 3.8 Services 3,411.8 8.4 7.7 6.6 2.4 3.9 5.0 4.3 3.9 3.8 Ca=inn 6,387.4 4.0 12.7 7.4 3.4 6.2 4.8 3.3 1.9 3.0 GKOM imm en 2,501.7 6.3 0.9 15.1 1.5 -4.3 10.8 -12.4 -7.4 3.0 mprtaafgodan PS 2,720.7 21.5 0.0 3.5 -.9 1.4 2.4 3.0 5.8 4.1 Inorts of goods n iES 3,658.3 15.1 4.5 13.0 0.9 -1.8 5.2 -10.0 -1.3 2.3 G a d ntirm1 prdct 8,011.6 6.9 7.9 5.8 0.2 4.6 5.2 3.5 2.2 3.7 Gum. meinn.1 assirgu 1,624.2 15.2 -4.7 0.7 -10.1 -1.3 6.7 4.3 3.4 6.2 WP deflatr (190 - 100) 88.6 100.0 111.4 128.1 139.9 149.4 158.9 Emwre =te 2.460 2.469 2.025 1.693 1.473 1.297 L198 Shre af Cm at mnet price (X I~t Squa g~uh awZ) (at r pricee) 2/ (at cmtm price) 1971 1976 1981 1983 1986 1991 1971-76 1976-8L 1981-86 1986-91 G ts .ic poduct _1 100.0 100.0 100.0 100.0 100.0 100.0 7.1 6.1 3.8 3.6 Agriculture 19.4 17.8 13.7 12.4 14.4 13.2 6.3 1.6 5.0 2.5 Iar-ry 20.5 25.2 32.0 30.2 29.1 31.2 8.6 8.9 3.1 3.8 Servicee 47.1 44.0 41.8 44.0 43.4 43.1 7.1 6.5 4.0 3.8 G.M ~rir2n 80.5 77.3 76.1 80.2 80.8 78.4 8.9 7.4 4.1 3.4 0:oss inestmt 21.5 30.7 32.3 28.8 24.9 23.1 5.9 6.6 -2.2 3.1 Mot aof goad MES 24.1 29.1 41.4 35.4 32.9 34.3 7.1 8.5 1.4 2.7 b~ort af mods and 10S 26.1 37.0 49.8 44.4 38.6 35.9 U.6 10.8 -1.6 2.0 Gkom nadmiæal pto-t 99.6 98.7 100.8 101.2 99.7 99.5 7.0 6.6 3.5 3.6 Nec f£-ar incoe -0.4 -1.3 0.8 1.2 -0.3 -0.5 8.5 0.3 -24.2 -16.4 ck~ n~rMnnl savrg 19.1 21.4 24.6 21.0 189 21.1 -2.3 4.2 1.3 4.3 As Z af GE (at curuent prces) 1976 198L 1983 1984 FU=.IC FIDMEZ Qrrent rem 26.8 29.3 31.3 32.6 Orrent empndiw 19.9 21.5 23.1 24.7 Surplus (+) areficit (-) 6.9 7.8 8.1 7.9 Capital Øer-neum 11.8 15.3 15.2 16.5 Famigp fiam-irg 1.0 1.0 1.7 2.3 1971-76 1976-8L 1981-66 1986-91 GNP per caPita g~ath rte (Z) 5.0 3.6 2.9 1.9 1a 2.7 5.2 8.9 6.5 Margin ~a ai =sate -0.0 0.1 0.0 0.3 Iport elasticity 1.6 1.8 -0.4 0.6 (*) or Bak Atlas Mtled ngy. / CP atdet prices ari cen~nn s at factor cosc. I Prjected year in cestantprices. men as -c April 1986 1061S/2 -27- #88f7 of 7 - 1iRSA .. renmr 28g Ammal - G th te (at 190 tieas) (Mi.lli=n w$ Poul._&s, Ioetd at curet pri ) .Indicatr 1986 1979 19m 191 192 1983 196 195 1986 1991 kport Of gode 1,80.0 ILO -0.4 4.3 -8.9 3.8 0.7 -0.1 5.8 3.5 , 1txom 796.9 22.9 2.2 -7.3 -20.9 0.6 -1.7 -1.0 -8.6 -12.0 Agicbuu 92.7 114 -31.1 83.5 -38.3 -13.4 58.5 -14.1 9.9 4.0 Oder prineries 102.7 8.3 -182 12.4 -13.8 27.9 -0.9 130 13.0 15.5 em ~ smi 80 BN.7 13.3 2.5 13.3 11.5 6.4 -1.4 LO 16.5 6.6 bots of d 3,232.4 15.9 4.5 11.7 -0.9 -2.9 5A -12.9 -01 2.0 Fau 467.3 17.4 -7.0 28.1 -7.7 20.7 2.6 -22.2 -9.9 4.0 Fatol~a 372.0 62.1 7.9 -8.7 46.9 3.0 7.3 4.4 9.4 -3.4 Tatia" gude 989.8 20.2 11.0 3.8 124 -4.6 7.9 -5.8 10.1 3.4 ital good. 839.3 -9.6 -2.2 40.9 15.8 -19.5 9.8 -26.8 -4.9 0.3 OH563.9 8.4 6.3 6.6 6.1 10.8 -3.6 -11.1 -13.7 2.8 Price 1 R1B b~port ic. inde 74.3 100.0 98.3 87.0 78.7 75.7 73.1 61.0 96.6 JIva bt pric~ein 82.1 100.0 93.4 84.5 80.0 78.7 75.0 74.2 104.7 Ols of te inde 90.6 100.0 105.2 103.0 98.4 96.1 97.4 82.2 90.3 G ~oi=ion of ~ ~dise ma (Z) ~emt m9-mm gu~Nu h at CM (at cur~e prics) (at cm*t-« price) 1971 1976 1981 13 ls6 _m 1971-76 1976-8l 1981-6 1986-91 Eapts of -d 100.0 100.0 100.0 100.0 100.0 100.0 5.0 8.1 0.5 1.5 1a81 26.9 42.3 53.3 44.7 21.3 11.4 3.4 7.4 -5.0 -13.1 Agrieon~ 12.6 4.5 3.1 4.4 6.3 4.4 4.4 2.4 -0.5 4.0 Other pårimm 21.3 11.1 4.4 4.8 7.4 11.3 2.9 0.5 8.1 14.9 11mafenbrig 39.2 42.1 39.2 46.1 65.0 72.9 9.2 11.1 5.2 6.5 i3ore of gmod. 100.0 10 100.0 100.0 100.0 100.0 14.2 10.4 -2.6 L6 Food 19.6 12.3 11.4 13.9 12.9 13.2 -1.9 11.6 -3.3 4.0 1ou 3.6 11.1 19.8 11.1 7.2 6.6 30.5 17.6 -4.2 -5.5 Tnteemate gpoda 30.1 28.8 28.1 29.9 40.0 41.5 12.1 10.2 2.6 3.4 Cita good. 27.7 31.9 25.4 25.5 21.6 19.1 18.0 4.9 -7.4 0.1 Od~r 19.0 15.8 15.4 19.5 18.3 19.6 12.1 11.4 -2.5 3.2 Sh~ of 'cede with Sre of 'ade with Shre of Tedewith of T with reffiriål vmtries (2) Dewpiu ifficien ( ) Oil ERtere (2) C~0u11y Pfafid G~:rien () 1970 1975 1980 1984 1970 1975 1980 1^ 19M 1975 1980 1984 1970 1975 1990 1984 UnE OF'E Exportu 70.8 60.1 68.7 76.9 4.9 21.7 25.4 14.5 13.9 11.1 4.8 7.7 9.4 6.1 0.4 0.9 85.9 79.5 81.8 80.7 7.1 10.9 7.7 11.8 0.7 6.3 7.5 3.6 6.3 3.1 3.0 3.9 11 Includu fåod proceiäg, phaerhe derivatives, chemical. textile, .-nie1 and electrical idutrifi. 106~/3 ENM CPU-C April 1986 Urof 7 -28- •nnarsra - Masam a meUSIs, U0mmL caPL.a M sd (sållimn tES at cuamt prics) 6 9191 12m 1983 1986 1 192 1991 Het bal~n* of wadu 416.7 -356.0 -472.6 -467.3 -790.8 437.2 486.0 -37.8 -5M.3 -33.0 8e~s Of 8 da & mrwic 1.479.5 3.137.5 3,912.3 3.96.5 3.477.9 3,29.5 1136.7 3,^500 2,995.8 4,986.2 ~"ports of e & serc 1,896.2 3,493.5 4.386.9 4.613.8 4,268.7 3,946.7 4,020.7 3,587.7 3,557.1 5,519.2 WCt -.. -0.5 10.3 58.5 18.2 23.4 11.9 9.0 10.7 12.1 16.9 (ubmt acw t b1~n. 417.2 -345.6 414.1 -49.0 -767.4 25.2 -875.0 -27.1 .49.2 -5161 Diuacc pri~@ iumma 102.6 50.9 236.0 367.2 402.2 223.8 206.0 131.8 182A 136.2 0ras 53.2 50.7 41.5 2.3 19.0 25.3 28.6 26.0 26.0 12.0 18T au (uO 258.6 373.7 215.1 275.4 315.0 372.0 328.0 3M6.0 30.3 403.0 Official 127.4 18.4 126.5 148.5 10.2 2m9.0 368.0 409.0 194.0 397.0 På~. 131.2 185.3 88.5 126.9 131.8 123.0. -40.0 45.0 146.3 6.0 Otdr caita 35.9 -5.7 136 -78.6 -8.2 15.9 163.0 1.9 0.0 0.0 ~e in rm~e . (- implimn in:Ma) 38.7 -124.0 -64.9 -92.3 -27.1 14.7 149.7 45.7 0.3 -34.9 Ima.m.. r 1 meeuu 273.0 357.9 422.9 515.2 542.3 527.6 377.9 332.2 331.9 528.2 enerm/idorta 1.8 1.2 1.2 1.3 1.5 1.6 1.1 1.1 1.1 1.1 1976 1979 19 1981 192 193 1916 Offic4.1 8at 53.2 50.7 41.5 20.3 19.0 25.4 25.8 Om. didbu•- of 18Tlan 250.8 637.8 559.1 607.2 629.0 741.8 821.6 C~iaml 109.3 140.9 206.4 245.5 6.1 165.7 301.4 Bilaram1 100.4 140.0 198.4 239.5 230.0 142.7 288.0 x 8.9 0.2 1.0 1.1 1.0 - - Oer maltilackral 0.0 0.7 7.9 6.0 16.2 23.0 13.4 mmlxra:nionml 141.5 496.9 352.7 361.7 32.9 576.1 520.1 Primma 71.6 378.3 223.5 224.4 255.0 366.0 258.0 Official c~arc rmdtr 9.9 49.6 55.5 35.4 24.4 87.6 158.3 13I 25.3 55.4 51.1 69.4 81.8 89.6 88.0 Cdher -.tit.ru1~ 30.2 13.7 22.6 325 21.7 32.9 15.8 EEn. or DebC Qutad.i,g and Dinbus 1,182.6 3,021.5 3.227.4 3,210.9 3,48.5 3,658.7 4,^.5 official 976.2 1,.7 2,038.0 2.149.1 2.348.0 2,478.0 2,8^5.5 INID 127.8 232.0 269.0 319.6 375.5 436.2 48D.9 MD 64.1 67.3 67.9 67.5 67.8 67.0 6.2 Other 784.3 1,554.7 1,701.1 1,762.0 1906.7 .1,976.8 2,298.4 Prive 206.4 1,166.8 1,189.4 1,131.8 1.132.5 1,180.7 1,175.0 Undismbra det 1.124.8 1,819.8 1.925.6 2.020.7 1.900.7 2.065.9 1,961.0 DEär SE~ 1besl debt mevice pwa 98.5 315.4 430.4 517.0 M83.3 560.2 681.7 cInr-E 36.9 162.5 215.9 204.7 194.8 189.8 221.9 Pynent as Z ex 6.7 10.1 11.0 13.1 13.9 16.9 21.7 Påyi as Z GN 1.9 3.6 4.2 5.3 5.1 6.1 7.7 Amiege intereat rme of ne Loana C) 5.5 7.2 6.8 8.1 7.6 8.2 9.5 Official 4.3 5.6 5.9 6.9 7.1 - - Primte 7.9 9.8 10.5 12.7 9.4 - - Ar~e amurity of mnr n (ymarå) 16.3 15.6 17.4 15.6 17.5 13.9 11.8 Official 20.4 19.4 19.4 18.2 2.2 - - PriNeat 8.6 9.2 9.2 5.8 10.2 - - As I of ~b utwniu at lad of momt I.e.år Year (1984) DET SnUlM ~aturicy structue of debt outstrdirg (.0 riztiion due vithin 5 years 41.2 Aurizatin due within 10 years 67.7 Interest structure of debt outstandirg t z) Interest due within firt year 4.1 /1 N~bers my not add up d.ie to roundirg. 1NA CP II-C 1061/4 April 1986 - 29 - Pae 1 of 2 IE SIMS (F BR GWP OFERATE IN '111ISTA A. SrRFENr cF BA ILOS AND ID IEDS (As of March 31, 1986) US $ Million loan or Amount (less Credit C1rcellation) Mabel Year Borower Prp Bank IDk Unliaburned Forty-far loans and Credit Fully Disbursed 466.94 75.15 1601 1978 Republic of Thnisia Rural lbis (hird Highuya) 32.00 5.87 1675 1979 Republic of Tnisa Secod Urban Seuge 26.50 7.09 1705 1979 Republic of Mmnisia Second Urban Dmelopment 15.00 2.77 1746 1979 Republic of 1%misia Secad Fisheries 28.50 12.95 1796 1980 Republic of Tmisia Southern Irrigation 25.00 11.01 1797 1980 Office des Arts Nationeux Third 1rt 42.50 9.98 1841 1980 Republic of Tnisia Fourth Highays 36.50 16.43 1864 1980 Socifti Tanisieme do 1'Electricit& et du Gas Second Natural ros Pipeline 37.00 14.21 1885 1980 Banque Nationale de inisie Thirl Agricultual teac 30.00 5.96 1961 1981 Republic of bnisia Fourth Eduation 26.00 21.60 1969 1981 Republic of lAmisia Sanll-Scale Industry Development 30.00 16.98 1997 1981 Republic of Thnisia 16rthwest Rural Development 24.00 14.81 2003 1981 Soci&& Laisienne de 1'Electricitf et du Gas Thiad 1ouer 37.50 4.70 2005 1981 Republic of Umisia Health and Population 12.50 9.82 2052 1981 Republic of Utmisia Grain Distribution and Storage 38.00 21.71 2108 1982 Republic of Teaisia Fifth Higmay (fnal Roads) 35.50 23.63 2113 1982 80T Electrical and Mechanical Induatries 30.50 13.11 2134 1982 SONE Sixth Water Suply 30.50 5.72 2157 1982 Republic of amisia Irrigation Development 22.00 17.35 2197 1982 Republic of Mimisia Technical Assistance 4.50 2.99 2223 1983 Republic of 'Mmisia Urban Developent III 25.00 21.98 2230 1983 Republic of 11misia Education V 27.00 25.48 2234 1983 Republic of Thnisia Central ianisia Irrigation 16.50 11.28 2255 1983 Republic of Tnisia Urban Sewerage II 34.00 32.16 2289 1983 Repblic of imisia Sfax Flood Protection 25.00 22.32 2301 1983 SLHECA Industry (rV) Fbuuiry 16.80 12.07 2346 1984 Republic of Thmisia Mining Technical Assistane 13.40 11.45 2368 1984 Republic of Unisia Seventh Water Suply 50.00 47.61 2429 1984 Republic of TUnisia Second Urban Transport 33.00 32.92 2455 1984 Soci&6 UAmisienne de 1'Electricic et du Gaz Fourth Ibuer 38.70 38.60 2502 a/ 1985 Republic of bmisia N6rth West Agricultural Production 15.00 15.00 2522 1985 Republic of tnisia Export Tndustries 50.00 50.00 2554 1985 Republic of Thmisia Second Electrical and Mechanical 54.00 54.00 Industries 2573 a/ 1985 Republic of Tnisia Lrrigation Imanagment IpaDvement 22.00 22.00 2605 at 1985 Republic of 7Anisia Gabes Irrigation 27.70 27.70 TurAL 1,481.04 75.15 663.26 Of which has been repaid 260.31* 9.84* Total now outstandirg 1,220.73 65.31 Amount Sold 23.38 of which has been repaid 14.33 Total now held by Bank and D1 b/ 1197.35 65.31 Total tdisharsed 663.26 / Not yet effective bI Prior to echarge rate adjusbrent June 1986 1061S/1 - 30 - Pae 2 of 2 SZMNr OF IEC IiMESfMONS 1N TUNISA (AS F HMI 31, 1986) Yeur(bligamto Type of ouin Awtmt Of U$ Million LCOM E,t Total 1962 NK Eagrali Fe%tiliers 2.0 1.5 3.5 1966 Société teiame d'Invesei. n (nw Bff) Dev. Finance Co. 0.6 0.6 1969 CFI (urim ov REWx ) Dev. Finee CO. 8.0 2.2 10.2 1970 ODEr Dev. Fine Co. 0.6 0.6 1973 Soi&é buristique et lbteliè!e Mi< SA marim 1.6 0.3 1.9 1974 Inmustries Oialims du Fluor Chacals 0.6 0.6 1975 Société d'Etudes et de neveopp...nr de SSesse-Md Triàm 2.5 0.6 3.1 1978 BE Dev. Finance (b. 1.2 1.2 1984 Société Mnisuienna de Imasing rssira Co. 0.5 0.5 1984 Socité Minire de Spar Fluor et de Baytine (Fluabar) Mining Co. 0.3 0.3 Tetal Q:Os Chaiamts 14.1 8.4 22.5 less eollarion Te"n.vtÊ n.., Repayencs and Sales 13.2 1.8 15.0 1btal (>.oemis now .Y held by IEC 0.9 6.6 7.5 M3tal, Utiliabursed 0.0 0.3 0.3 Y In addition, IC approved on Jaanuy 7. 1986, an invesm t of appnzwi..ely US$ 8.2 mi.llion equivalent in Société TnLustrielle des Ietiles, "SD'". 0703S/84 - 31 - ANNEX III Page 1 of 2 REPUBLIC OF TUNISIA FOURTH URBAN DEVELOPMENT PROJECT Supplemental Project Data Sheet Section I: Timetable of Key Events (a) Time taken by the country to prepare the project: 22 months (b) Agen: .s that prepared the project: ARRU, AFE, CNEL, MOEE (c) Project first identified by Bank: January 1983 (d) Bank appraisal mission: October 1984 and April 1985 (e) Negotiations completed: June 6, 1986 (f) Planned date of effectiveness: September 30, 1986 Section II: Special Bank Implementation Actions None Section III: Special Conditions 1. Special Conditions of Effectiveness. Signature of: (a) Agreements between ARRU and each of ONAS, SONEDE and STEG (para. 43); (b) a Subsidiary Loan Agreement between the Government and CPSCL; (c) a Management Agreement between the Government and CNEL; and (d) a Financing Agreement between CNEL and AFH (para. 53). 2. Conditions of Disbursement. (a) for each subproject, approval by the Bank on the basis of agreed criteria (para. 41); and (b) for the site servicing component, the establishment of a new plot pricing system and-a cross-subsidization policy benefitting smaller plots (para. 47). 3. Other Features (a) Upgrading and site servicing subprojects to meet agreed eligibility criteria (para. 41); - 32 - ANNEX III Page 2 of 2 (b) The Government to ensure that ARRU continue to employ an urban planner and an engineer until June 30, 1987 (para. 43); (c) The Government to take necessary measures to authorize the municipalities concerned to borrow from CPSCL (para. 45); (d) AFH to employ consultants in land management, public administration, and computer science, under terms and conditions satisfactory to the Bank (para. 51); (e) The Government to ensure that: (i) interest rates are charged to municipalities by CPSCL at CPSCL's regular terms and conditions for Government funds, and at cost for Bank funds; (ii) interest rates of 8.25 percent or 7 percent p.a. are charged (depending on whether the beneficiary is earning more, or equal to or less than 1 1/2 times the minimum wage) for house construction or improvement loans and 11 percent p.a. is charged for AFH's site servicing operations (para. 54) and (iii) financial intermediaries' interest rates in the housing sector cover at least the cost of capital and a spread sufficient to cover their operating cost (para. 55); (f) Cost of on-site infrastructure works to be recovered by municipalities through the frontage tax system, and utility connection costs to be recovered through utility tariffs. Cost of land and servicing to be recovered through sales and loan repayments to CNEL (para. 62). IBRD 18756 TUNISIA FOURTH URBAN DEVELOPMENT PROJECT PROJECT CITIES 3srua bu UNK 3 '-m.NISTuNIl)j U Upgrading Component $t Site ServIcIngComponen - Fouchelna Kheh la . Provincial Capitals *Rivers Zjaa S akl s ^olkt z. n t r n atio n a l A irp o rts k L E a h bl - --Provincial Boundoriøs . I, ; ---InternasionalpBommdiries? l B or $ d ) 'fiaktar [ l SU7 *Mat 4G 2 j-j i RNCiUGSLVI OMET AIGERt1 <¼C' / »t *FBUR BouzYd18 $ ~ > Skbiraa,j, (Nfta 4 Møreth*/ FRANCE YUGC"LAVIA l ® b a w e3 33 <i2 - SPAIN i¶ I TUNISIA ø2' KIL~ATERS I kl£'< :zt.. 7L I B Y1 A FEBRUARY 1985