Nepal - Rural Infrastructure Project

Report No. PID6546 Project Name Nepal-Proposed Rural Infrastructure Project (@) Region South Asia Sector Transportation Project ID NPPE45053 Borrower Kingdom of Nepal Implementing Agencies Technical Division Ministry of Local Development (MLD) Shree Mahal Pulchowk, Lalitpur Kathmandu, Nepal Telephone: 522-049 Fax: 535-408 Attention: Special Secretary and District Development Committees (DDCs) of Selected Districts Date initial PID prepared March 8, 1998 Date this PID prepared October 27, 1998 Appraisal date December 1998 Background. His Majesty's Government of Nepal (HMG/N) has requested the International Development Association (IDA) for its assistance in the preparation a proposed Rural Infrastructure Project. HMG/N wishes to improve its rural road network which is essential for the development of the rural areas of the country. Under the decentralization policy adopted since 1992, the responsibility for the rural road network has been transferred from the Department of Roads in the Ministry of Works and Transport to the districts. The Ministry of Local Development (MLD), at the central level, has the mandate to monitor, assist and guide the development activities of the district level authorities. However, the district development committees (DDCs) and the MLD have limited institutional and technical capacities to carry out this responsibility. There is an urgent need to help strengthen the capability of district government entities and of MLD to support the decentralization policy. Within this context, the proposed project is being prepared, and credit negotiations and project start are scheduled for the second half of 1998. Project Objectives. The main project objectives are to: (i) strengthen the capacity of local government agencies and MLD in planning and managing rural roads; (ii) maintain and rehabilitate rural roads in selected districts using labor-based, cost-effective technology; and (iii) involve beneficiaries in project preparation and implementation. Project Preparation Framework. To provide timely capacity strengthening support to a recently-approved rural infrastructure development strategy of the Government, HMG/N and the IDA agreed to proceed with a project in about  eight districts that are ready for support of maintenance and rehabilitation of district and village roads and trails. A Learning and Innovation Loan will be used as the lending instrument for the project. Under the project, an effective model will be developed for the IDA to support the decentralization of rural infrastructure development and capacity building of local government entities. The learning and results developed under the project are expected to be mainstreamed and expanded in a subsequent larger operation. Within this context, the project team has agreed with the Government on a framework for project preparation, which specified a series of criteria and guidelines for district participation in the project. The project will be rolled out in a number of districts as they become ready by agreeing to adopt the project preparation framework and by undertaking project preparation activities. District that participate in the project will be required to provide counterpart funds for civil works financed under the project. Project Components, Estimated Costs and Finance. The scope of the proposed project includes: (i) civil works for maintenance and rehabilitation of district and village roads in selected districts, and related consulting services for supervision and design, (ii) technical assistance consultancy for capacity building in the MLD and DDCs, including project management support, project monitoring and evaluation including social and environmental impact monitoring, preparation for a follow-up larger scale project, and training and promotion of a labor-based technology in road works. The preliminary costs of the project are estimated at about $5.8 million, including contingencies. A proposed IDA credit of $5.0 million is envisaged to finance eligible expenditures under the project, excluding taxes and duties. The DDCs will need to contribute 20t of the civil works costs as their matching funds. The project implementation period is expected to be about three years. Institutional and Implementation Arrangements. In accordance to the project's objective of strengthening local governments capacity, the DDCs will be the implementing agencies of the project's civil works component. The technical units of the selected DDCs will be the focal point of project implementation and management. A Project Coordination Unit will be established within the MLD to provide technical support and facilitate project preparation and implementation in the districts. Under the proposed framework, the MLD would not be directly involved in undertaking works or making decisions for the districts. Project management support under the technical assistance consultancy will be provided to the DDCs and MLD in undertaking these tasks, and the technical assistance consultancy will be managed by the MLD. Environmental and Social Considerations. The proposed project is expected to be a Category C project. Since the civil works under the project cover only maintenance and rehabilitation of existing district and village roads, no significant environmental degradation is expected. In fact, proper maintenance and rehabilitation work are expected to reduce soil erosion due to improper drainage and slope instability of the existing roads. Moreover, the dissemination of labor-based techniques is expected to have positive environmental impacts, as various studies have shown that such techniques are most appropriate for local fair-weather roads built in geological stable locations following contours and ridge lines. No land acquisition and resettlement are expected, as all works would take place on existing road alignments. Through participation in preparation of district transport master plans and civil works under the project, project beneficiaries will be actively involved in the project preparation and implementation, and project - 2-  benefits should reach the poorest groups in the project areas. During project preparation and implementation, a system to screen the environmental and social impacts of road works will be developed. The system is expected to identify works which might have moderate, rather than negligible, impacts, and identify mitigation measures. The system will also provide valuable learning on screening criteria and mitigating actions, which will facilitate the preparation of a follow-up operation involving new road construction. Next Step. Provided that the MLD and the concerned DDCs completed their project preparation tasks in accordance with the revised schedule agreed during a project preparation mission in September 1998, project appraisal is envisaged to start in mid December 1998. Managing Division Infrastructure Sector Unit, South Asia Region Contact Point: Guangzhe Chen, Task Leader Tel: 202-458-7474 The InfoShop The World Bank 1818 H Street, N.W. Washington, D.C. 20433 Telephone No. (202)458 5454 Fax No. (202) 522 1500 Note: This is information on an evolving project. Certain activities and/or components may not be included in the final project. Processed by the InfoShop week ending November 27, 1998. - 3 -