Documentof The World Bank FOR OFFICIAL USE ONLY Report No: 32173 TR - PROJECTAPPRAISAL DOCUMENT ONA PROPOSEDLOAN INTHE AMOUNT OFEURO310MILLION (US$400 MILLIONEQUIVALENT) TO THE REPUBLICOFTURKEY FORAN ISTANBULSEISMIC RISKMITIGATION AND EMERGENCYPREPAREDNESS PROJECT April 29,2005 Environmentallyand Socially Sustainable DevelopmentUnit Europe and CentralAsia Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. J CURRENCY EQUIVALENTS (Exchange Rate Effective April 18,2005) t Currency Unit = Turkish New Lira TNLR 1 = US$O.73 US$ 1 = TNLR 1.37 EURO 1 = US$1.29 U S $ l = EURO0.78 FISCALYEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS M O M Istanbul Metropolitan Disaster Coordination Center AYM IstanbulGovernorshipDisaster Management Center CAS Country Assistance Strategy C B CostBenefit Ratio EC European Commission ECA Europe and Central Asia Region EIA Environmental Impact Assessment EMP Environmental Management .Plan EMPI Earthquake MitigationMaster Plan for Istanbul ERR Economic Rate of Return FEMA U.S. FederalEmergency Management Agency FMR Financial MonitoringReport GNP Gross National Product GDCD General Directorate for CivilDefense GIS Geographic Information System GO1 Govemorship of Istanbul IBRD International Bank for Reconstructionand Development I ICB International Competitive Bidding I F I S Intemational Financial Institutions IGDAS Istanbul Gas Distribution Corporation IMM IstanbulMetropolitan Municipality P C U Istanbul Project Coordination Unit I S K I Istanbul Water and Sewage Company ISPA Istanbul Special Provincial Administration JICA Japan International CooperationAgency MDG MillenniumDevelopment Goals MEER Marmara EarthquakeEmergency ReconstructionProject M&E Monitoring and Evaluation MPWS Ministry ofPublic Works and Settlements NCB National Competitive Bidding NGO Non-governmental Organization PCN Project Concept Note FOROFFICIALUSEONLY PMS Project Monitoring System SDC Swiss Agency for Development and Cooperation SPO State Planning Organization SIL Specific InvestmentLoan TCA Turkish Court of Accounts TEMAD TurkishEmergencyManagement General Directorate Vice President: Shigeo Katsu Country Director: Andrew N.Vorkink Sector Manager: JosephR.Goldberg Task Team Leader: Wael Zakout This document has a restricted distribution and may be usedby recipients only in the performance of their official duties. I t s contents may not be otherwise disclosed without World Bank authorization. TURKEY SEISMICRISKMITIGATION-TR CONTENTS Page A. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 1. Country and sector issues..........1......................................................................................... 1 2. Rationale for Bank involvement ......................................................................................... 2 3. Higher level objectives to which the project contributes .................................................... 3 B . PROJECTDESCRIPTION ................................................................................................. 3 1. Lendinginstrument ............................................................................................................. 3 2. Program objective andPhases ............................................................................................ 3 3. Project development objective and key indicators.............................................................. 4 4. Project components....................................................................................................... .......4 5. Lessons learned and reflected inthe project design............................................................ 5 6. Alternatives considered andreasons for rejection .............................................................. 6 C. IMPLEMENTATION .......................................................................................................... 7 1. Partnership arrangements ................................................................................................... 7 2. Institutional and implementation arrangements.................................................................. 7 3. Monitoring and evaluation o f outcomeshesults .................................................................. 8 4. Sustainability....................................................................................................................... . . . 8 5. Critical risks and possible controversial aspects................................................................. 9 6. Loadcredit conditions and covenants............................................................................... 10 D. APPRAISAL SUMMARY ................................................................................................. 10 1. Economic and financial analyses...................................................................................... 10 2. Technical........................................................................................................................... 11 3. Fiduciary ........................................................................................................................... 12 4. Social................................................................................................................................. 13 5. Environment...................................................................................................................... 14 6. Safeguard policies............................................................................. :............................... 14 7. Policy Exceptions and Readiness...................................................................................... 15 Annex 1: Country and Sector or ProgramBackground ......................................................... 16 Annex 2: Major RelatedProjectsFinancedby the Bankand/or other Agencies .................22 Annex 3: ResultsFrameworkandMonitoring ........................................................................ 24 Annex 4: DetailedProjectDescription ...................................................................................... 28 Annex 5: ProjectCosts............................................................................................................... 44 Annex 6: ImplementationArrangements ................................................................................. 45 Annex 7: FinancialManagementandDisbursementArrangements ..................................... 48 Annex 8: ProcurementArrangement ........................................................................................ 55 Annex 9: EconomicandFinancialAnalysis ............................................................................. 62 Annex 10: SafeguardPolicyIssues ............................................................................................ 62 Annex 11:ProjectPreparationand Supervision ..................................................................... 74 Annex 12: Documentsinthe ProjectFile ................................................................................. 76 Annex 13: Statementof LoansandCredits .............................................................................. 77 Annex 14: Country at a Glance ................................................................................................. 80 MapTBRD34015 TURKEY SEISMIC RISKMITIGATION-TR PROJECT APPRAISAL DOCUMENT EUROPE AND CENTRAL ASIA ECSSD Date: April 29,2005 Team Leader: Wael Zakout Country Director: Andrew N.Vorkink Sectors: Sub-national government Sector Managermirector: Joseph R. Goldberg administration (40%); Information technology (30%); Health (15%); General education sector (15%) Themes: Natural disaster management (P);Municipal governance and institution building(S) Project ID: PO78359 Environmental screening category: Partial Assessment Lending Instrument: Specific Investment Loan Safeguard screening category: Limitedimpact Project FinancingData [XILoan [ ]Credit [ ]Grant [ ]Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing: Euro 310.00million (US$400.00 million equivalent) Proposed terms: Variable-Spread Single Currency Loan denominated inEURO Grace period (years) 4 Years to maturity: 17 Commitment Fee: 0.75% Front end fee (FEF) on Bank loans: 1%(less any waiver) Source Local Foreign Total BORROWER 0.00 0.00 0.00 INTERNATIONALBANK FOR 306.02 93.98 400.00 RECONSTRUCTION AND DEVELOPMENT Total: 306.02 93.98 400.00 Borrower: Republic o f Turkey Responsible Agency: IstanbulSpecial Provincial Administration Y 2006 2007 2008 2009 2010 2011 m u a l 46.96 89.39 100.22 89.47 56.22 17.74 hmulative 46.96 136.35 236.57 326.04 382.26 400.00 Project description [one-sentence summary of each component] Re$ PAD B.3.a, Technical Annex 4 Component A: EnhancingEmergency Preparedness This component will enhance the effectiveness and capacity o f the provincial and municipal public safety organizations in Istanbul to prepare for, respond to and recover from significant emergencies, especially those arisingfrom earthquakes. Component B: Seismic Risk Mitigation for Public Facilities This component will reduce the risk o f future earthquake damage to critical facilities in order tc save lives and ensure their continued hnctioning in the event o f an earthquake, througl! retrofitting o f hospitals, schools and other priority public facilities. Component C: Enforcement o f BuildingCodes This component will support innovative approaches to better enforcement o f building code and compliance with land use plans. Component D:Project Management This component will support the Istanbul Provincial Administration to implement the project ir efficient and transparent manner, and build the institutional capacity to sustain tht implementation o f Seismic Risk Mitigation and Preparedness program beyond the life o f the project. Which safeguard policies are triggered, ifany? Re$ PAD 0.6, TechnicalAnnex 10 Environmental Assessment Cultural Property Significant, non-standard conditions, if any, for: Re$ PAD C.7 Boardpresentation: May 26,2005 Loadcredit effectiveness: August 10,2005 Covenants applicable to project implementation: - Maximum funds for re-construction o f buildings will be limited to 20% o f allocation for civil works. Reconstructiono fbuildingswill require Bank no-objection (Schedule 5; para 5) - The IPCUwill submit an annual work plan andbudget for Bank review and comments by August 31 each year. (Schedule 5; para 7a) - The IPCU will update a procurement plan in accordance to guidelines acceptable to the Bank, and furnish such update to the Bank not later than 6 months after the date o f the precedingProcurementPlan, for the Bank's approval (Article 111; section 3.03b) - The IPCU will submit to the project Steering Committee and the Bank a progress report by March 31 and September 30 o f each year, startingMarch 31, 2006. (Schedule 5, para 7a) - The IPCU will prepare the mid-term review report by March 31, 2008 and facilitate the mid-termreviewo fthe project byMay30,2008. (Schedule 5; para 8) A. STRATEGICCONTEXT AND RATIONALE 1. Country and sector issues Turkey is highly vulnerable to natural disasters, particularly earthquakes. In the 1999 Marmara earthquakes, the death toll reached over 17,000 with a direct economic impact estimated at about US$5 billion, or around 2.5 percent o f GIW. Within the nation's high-risk context, Istanbul i s most vulnerable because o f its seismic-prone location on the North Anatolian Fault, and its high population and commercialhdustrial densities. According to recent assessments carried out by JICA (Japan International Cooperation Agency) experts', the probability o f a major earthquake affecting Istanbul inthe next 30 years is 62% & 12%, while the likelihood o f such a devastation inthe next decade is 32% & 12%. This is roughly comparable to the risk faced by Los Angeles and San Francisco, but with a damage potential that is muchhigher because o f Istanbul's greater structural vulnerabilities. Ifa seismic event o f the same magnitude as that in 1999 were to occur near Istanbul, the human suffering as well as the social, economic, and environmental impacts would be dramatically higher than in the Marmara region, as Istanbul i s not only the financial, cultural and industrial center o f the country, but is also a nexus o f inter-continental importance and home o f about 15 million people. An interruption o f Istanbul's social, economic and financial life would be felt for many years to come. Some sources estimate the economic impact o f such a disaster would be more than U S 2 0 billion. The JICA study estimates that an event similar to the Marmara earthquake could result in up to 87,000 fatalities, 135,000 injuries and heavydamage to 350,000 public andprivate buildings. The Government o f Turkey i s aware o f the critical need to develop and to implement a comprehensive hazard risk management strategy for the country. With Bank support through the Marmara Earthquake Emergency Reconstruction (MEER) project, a risk transfer mechanism through a catastrophe insurance scheme was successfblly launched, and has received a significant international recognition. The MEER project also initiated establishment of a decentralized emergency management system through creation o f the Turkey Emergency Management General Directorate (TEMAD). Albeit after long initial delays, there has been some progress made inupgradingthe newly established TEMAD to become an efficient national disaster coordination agency. Inparallel to changes inthe emergency management structures at the central level, considerable efforts and resources have been invested at the regional and local levels to better prepare at-risk-communities against future disasters. The Istanbulprovince, both the municipality and the governorship inparticular has demonstrated a highlevel o f commitment and ownership inearthquake mitigation efforts, andhas initiatednumerous valuable seismic risk assessment and planning activities in collaboration with national and international experts, with some support from international donors. One of the key initiatives i s development o f the Earthquake Masterplan for Istanbul, prepared by the Metropolitan Municipality o f Istanbul. The plan is comprehensive in its treatment o f risks and mitigating measures and has received international recognition as a strategic instrument for addressing seismic risks inhighly vulnerable mega-cities. The proposed ISMEP project has been preparedwithin its framework and conceptual comprehensive approach. 'Japan International Cooperation Agency [JICA]: The Study on a Disaster PreventiodMitigation Plan inIstanbul Including Seismic Microzonation inthe Republic o f Turkey; December 2002 1 The overall purpose o f the initiatives described in the Masterplan i s to enhance safety and total quality o f life in the city by: integrating mitigation measures in city management processes, protecting natural and historical assets, reclaiming urban quality and identity, engaging local . communities, rehabilitatinghighrisk areas, and retrofitting or demolishing o funsafe buildings. A particular area o f concern for Istanbul, as for other urban areas in Turkey, has been lax enforcement o f buildingcodes, development control and compliance with landuse plans, caused by institutional and social factors, including the process transparency issues, and leading to a built environment which is poorly protected against seismic events. The basic regulatory framework for construction supervision has been amended since 2000 and provides for legal mechanisms, though often criticized, for better construction quality. The statutory responsibility * for the building codes enforcement and land use planning i s vested with the municipalities which, however, do not have enough capacity, to successfully control the built environment. Indisputably, Istanbulmunicipalities have made notable efforts and advanced their landplanning andmanagement functions, nevertheless, the effective compliance and enforcement of the codes i s still lacking and need to be addressed at the lower administrative level, and possibly through engaging the professionalengineering community and buildinglocal awareness. The proposedproject strives to address these key systemic issues inorder to have lasting impact, and would provide a financial support to achieve many o f the safety objectives listed in the Earthquake Masterplan. 2. Rationale for Bank involvement The Bank has established a long history o f financing emergency rehabilitation projects following disasters in Turkey and other countries globally. Recently, however, more attention has been given to mitigation programs enhancing governmental capacities to respond to disasters and reduce their risk, including strengthening o f organizational frameworks, emergency response management systems, risk reduction investments, insurance programs, etc. The Bank has been engaged in disaster mitigation operations in other ECA countries, including Romania, Kyrgyzstan, Poland, and Russia. With this background, the Bank has,a unique ability to focus not only on the physical, but also the economic and social aspects o f hazard risk management, as well as the associated critical policy and institutional reforms. The Bank can provide effective assistance as the Government o f Turkey shifts from a `reactive' to amore `proactive' approach to disaster management. InTurkey, the impact of numerous efforts at the provincial and local levels to mitigate natural hazards has not yet been fully realized due to the limited scope o f activities and lack o f adequate funding. A comprehensive framework is still needed to integrate these activities and to strengthenIstanbul's seismic risk mitigation and emergency preparedness, inorder to enable the community to cope with the risk o f an eventual seismic disaster. The Bank i s well positioned to play this role through application o f its expertise and financial assistance, which taken together, can leverage the already ongoing or new initiatives, and serve as a catalyst for other resources from international financial institutions andbilateral donors. 2 3. Higherlevel objectivesto whichthe projectcontributes Inthehigher levelstrategic context, theprojectcontributes totheobjective spelledoutinSection IV of the Millennium Development Goals (MDG) Declarationwhich states the goal "to intensify our collective efforts to reduce the number andeffects o fnatural andman-made disasters". Inthe most recent Country Assistance Strategy (CAS) of October 2, 2003 (Report No. 26756 TU) and covering the planned assistance program for FY04-06, one o f the key development objectives for that period i s to "increase disaster preparedness and minimize losses from natural disasters". The project-supported assistance is also aligned with the CAS program o f poverty reduction, which aims at, among others, "making the economy more resilient to crises (including natural disasters) that disproportionately affect the most vulnerable". Moreover, the project will contribute to the governance agenda through more transparent processes for building codes enforcement. The proposed project will support activities which will increase the disaster prevention and management capacities o f the government, both at the regional and provincial level inthe Istanbul area. The World Bank ECA region is now promoting the importance o f mitigation and improvement o f governments' capacities to respond to emergencies. The underlying principle o f the strategic framework, as reflected in the recently completed ECA HazardRisk Management Strategg, is that both loss o f life and economic impact o f disasters can be reduced by advance planningand investment, that it is cost effective to do so, and that this is governmental responsibility. The ISMEP fully applies this proactive approach by introduction o f disaster mitigation activities which address long-term emergency preparedness and risk mitigation needs prior to occurrence o f a possible major disaster. B. PROJECTDESCRIPTION 1. Lendinginstrument The Specific Investment Loan (SIL) was selected as the most suitable lending instrument, which will provide support to the specific investments together with a limited and focused technical assistance. 2. [IfApplicable]Programobjectiveand Phases Not Applicable. 2WorldBank: "Preventable Losses: Saving Lives and Prouertv through Hazard Risk Mitigation -A Strategic Framework for Reducingthe Social and Economic Imuact o f Earthquake. Flood, and Landslide Hazards inthe Europe and Central Asia Region"; October 2004 3 3. Project development objective and key indicators The proposed project will initiate a process that aims at transforming Istanbul in the next 10-20 years into a city resilient to major earthquake. The overall goal o f the proposed project is to save lives and reduce the social, economic and financial impacts in the event o f future earthquakes. The specific objective o f the project i s to improve the city o f Istanbul's preparedness for a potential earthquake through enhancing the institutional and technical capacity for disaster management and emergency response, strengthening critical public facilities for earthquake resistance, and supporting measures for better enforcement o fbuildingcodes and landuse plans. Following are the key indicators o f the expected project outcome: a Key public facilities are retrofitted to resist a major earthquake; a Skills and technical capacities o f the relevant emergency response units are strengthened; and a Improvement incompliance with buildingcodes and landuse plans. 4. Project components The project consists o fthe following components andactivities: Component A: Enhancing EmergencyPreparedness The objective o f this component is to enhance the effectiveness and capacity o f the provincial and municipal public safety organizations in Istanbul to prepare for, respond to and recover from significant emergencies, especially those arising from earthquakes. Specifically, the component will support: a Improvement of emergency communications systems a Establishment of an emergency management information system a Strengthening of institutional capacity of AYM - Istanbul Governorship Disaster Management Center a Upgrading of emergency response capacity in Istanbul a Public awareness and training Component B: Seismic RiskMitigation for Public Facilities The objective o f this component is to reduce the risk o f future earthquake damage to critical facilities and lifelines inorder to save lives and ensure their continued functioning inthe event o f an earthquake. The component will consist o fthe following key activities: a Retrofittingheconstruction of priority public facilities such as hospitals, clinics, schools, administrative buildings and infrastructure, etc. a Risk assessment of lifelines and vital infrastructure a Risk assessment of cultural heritage buildings Component C: Enforcement o fBuildingCodes 4 The objective o f this component i s to support innovative approaches to better enforcement o f buildingcodes andcompliance with landuseplans. The component will support: 0 Public awareness campaigns 0 Further development of regulatoyframework for enforcement of building codes enforcement land useplans 0 Volunteer accreditationhaining of engineers 0 Streamlining of buildingpermits issuanceprocedures andpromoting transparency and accountability in selected district municipalities Component D:Proiect Management The objective o f this component is to support the Istanbul Special Provincial Administration (ISPA) to implement the project in efficient and transparent manner, and build the institutional capacity to sustain the implementation o f Seismic Risk Mitigation and Preparedness program beyond the life o fthe project. Specifically, the component will comprise: 0 Project managementsupport, including support to monitoring and evaluation 5. Lessons learned and reflectedinthe project design The Marmara earthquake, with the resulting damages, low effectiveness o f response, the recovery efforts, and the following Bank MEER project, provided the key lessons based on which the ISMEPproject was designed. ' The earthquake of August 17, 1999 created a crisis in emergency management which exposed the weaknesses o f existing disaster response systems, as well as the poor quality o f construction deriving from a lack o f building codes enforcement and inadequate land use practices. Communication systems linking the affected provinces with outside agencies and organizations collapsed. Essential emergency response resources were either destroyed or severely damaged. The Turkish disaster response was unable to meet the demands created by the Marmara earthquake. Immediately after the catastrophe, some critical elements o f the national infrastructure failed. This included damage to the main fiber optic cable between Istanbuland Ankara, the link which formed a backbone o f the communication with the earthquake region. The disaster virtually incapacitated local response capabilities o f the affected provinces. Basic repairs to the communication and electric power connections took too long and critical rescue opportunities were practically lost andthe response effort was indisarray. The MEER project prepared in the aftermath o f the Marmara earthquake strived to tackle the above problems and strengthen the emergency management and response system through creation o f a national, comprehensive emergency management structure for Turkey that would focus on the coordination and integration o f risk reduction strategies, preparedness, response and recovery. The restructuring o f the national emergency management system is gradually progressing through a range o f activities designed for institutional strengthening o f TEMAD. Though the national coordination is o f key importance, the focus should now also be given to a lower, sub-national level o f the government, and to the region bearing the highest'risk interms o f disaster probability, and importance and impact on the whole country. 5 The design o f ISMEP project takes into account international experience which demonstrates that reducing life loss and minimizing property damage in the immediate aftermath o f major earthquakes is most effectively achieved by what is done by agencies, authorities and resources and individual residents inthe affected area. Outside assistance is essential when local capacity is exceeded as a result o f the scale o f the event, but, ultimately, all disasters are local. The most fundamental effectiveness o f any emergency management system depends upon the ability, organization, skills, andcommitment o f a community -its government officials, private industry, NGOs and residents - to prepare for emergency situations. These efforts should be locally based and managed, but they must be consistent with the national and provincial systems, standards and programs. Building local capacity, therefore, is the most effective strategy for improving emergency preparedness. Consequently, the ISMEP project promotes a decentralized approach to implementation of the risk reduction efforts and strengthening the regional institutions, which already showed a notable initiative since the Marmara earthquake to prepare for future disasters. The project strives to improve the building code enforcement practices and development in line with landuse plans and regulations through activities to be implemented at the municipal level. Given the already introduced amendments to the legal framework and further discussions and work on the relevant legislation, the ISMEP takes a route o f designing a road map with monitorable actions to be taken by municipalities who commit themselves to a better compliance to buildingcode enforcement. 6. Alternatives considered and reasonsfor rejection Three main alternative approaches were considered for the proposed ISMEP project: (i) implement geographically-expanded risk mitigation and emergency preparedness activities covering not only Istanbul but also other provinces throughout Turkey; (ii) continue to focus on the support to the national level institutions responsible for risk mitigation and emergency preparedness; (iii) implement a seismic strengthening program aimed not only at public assets and lifelines, but also on the private residentialbuildings. For the first alternative, given that the degree o f institutional capacity and disaster mitigation needs vary considerably across different provinces, it was agreed that a uniquely-tailored program focusing on one area would have the potential to deliver the highest impact at the local level. Istanbul was chosen because o f the provincial government's demonstrated ownership and commitment, the province's highpotential risk and vulnerability, and its vital importance to the country and the region as a whole. It is expected that key lessons may be learned and replicated inother provinces inthe future. The rationale for rejection o f the second option o f providing support focused on the national level i s based on the lessons learned from the MEER project, as described in section B.5. The ongoing MEER project provides tremendous assistance for strengthening the central level emergency management functions. The ISMEP project will support activities at the local level, where such support is greatly needed, where must be effective, where there is a strong will and commitment to implementthem, and where the authorities showed remarkable initiative to better preparefor emergencies since the Marmara earthquake. 6 The project will include the mechanisms which will ensure compatibility and consistency o f the actions taken in Istanbul as well as the systems developed with the national programs. For this purpose, the Turkish Emergency Management General Directorate (TEMAD) will be part o f the project Steering Committee as well as part o f the user groups in the development o f the communication system and the emergency management system to ensure that these systems are compatible with the national and other regional systems. In regard to the third alternative, it was considered to pilot under the project innovative approaches to financing retrofitting o f private housing through undertaking vulnerability assessment and extending a financing mechanism for interested household owners whose buildings were found to be unsafe. This option was dropped for the following reasons: (i) the Government did not approve providing a subsidy (including the bearing o f foreign exchange risk) for the most prosperous region o fthe country, andinthese circumstances the private banks were not interested in the project; and (ii) the willingness o f households to pay for retrofitting was found low given the costs and low level o f information available to the communities about the risks and benefits o fretrofitting. Another pilot considered was on urbantransformation. The potential pilot included demolition o f unsafe buildings and re-building the entire block(s). The pilot was withdrawn by the Greater Municipality o f Istanbul so that discussions about its feasibility and the financial model would not delay the processing o f the retrofitting activities for public buildings. C. IMPLEMENTATION 1. Partnershiparrangements(ifapplicable) The proposed project is beingdeveloped inclose coordinationwith other international donors. It is envisaged that parallel financing will be provided by the,Swiss Agency for Development and Cooperation (SDC) for support to neighborhood volunteers emergency response groups, which complements activities under sub-component A.5 (Public Awareness and Training). 'The Government o f Turkey i s also discussing possibilities for additional funding for disaster mitigation activities inIstanbul from other InternationalFinancial Institutions. 2. Institutionaland implementationarrangements Inline with government decentralizationagenda, project implementationwould beplaced under the responsibility of the Govemor o f Istanbul. A small Istanbul Project Coordination Unit (IPCU) would be,established under the Istanbul Special Provincial Administration (ISPA). The Unit would be headed by a highly qualified project Director who will report directly to the Govemor or his designee, and the General Secretary o f ISPA. Each relevant agency (such as Provincial Directorates o f Health, Education, Public Works, etc.) will nominate a senior staff to be a liaison betweenthe IPCUand their mother agency. The IPCU will be responsible for project coordination, procurement, financial management, contract management, monitoring, and evaluation and reporting. The core IPCU staff will include, in addition to the Director, 2 Deputy Directors (one technical and the other for administration and finance), 2 procurement officers, 2 financial management officers, 5 7 engineers, a social scientist, an environmental engineer, and a monitoring and reporting officer. The number o fpositions is indicative andmight berevisedduringproject implementation. In order to ensure full coordination T o n g the various relevant agencies and the IPCU, ImplementationCoordination Protocolswill be signed between the ISPA andthese agencies. Some staff from the existing PIU under the Prime Ministry Office (implementing, among others, the MEER project) will be temporarily assigned to the IPCU, and once the ISMEP project becomes effective these staffmay be permanently transferred to IPCU. A Project Steering Committee would be established to oversee project implementation and provide strategic guidance. The Steering Committee would be chaired by the Governor o f Istanbul, and may include Directors o f the provincial departments o f the concerned ministries, representatives o f IstanbulMunicipality, Treasury, SPO, TEMAD, Ministryo f Public Works and Settlements, andthe Director o fthe PIUunder the Prime Ministry Office. 3. Monitoring and evaluation of outcomes/results Evaluation o f the results through thorough monitoring i s o f key importance for drawing lessons for future applications in Turkey and elsewhere. Inthe case o f the Enhancemento f Emergency Preparedness component, many o f the emergency communication andresponse functions will be enhanced for the daily use by the relevant agencies. Therefore, the improvements made can be to some extent monitored and evaluated. Measuring o f the results o f the Seismic Risk Mitigation for Public Facilities component is rather straightforward and its outcomes will be evaluated through assessment o f physical investments and the number o f facilities retrofitted. The monitoring and evaluation function will be particularly important, and indeed instrumental, for the buildingcode enforcement activities at the selected district municipalities. A part of'this component will be establishment o f a monitoririg framework, including an independent audit system for building code enforcement to assess the progress made inthis area. In the context of evaluating project results evaluation, it should be noted that most of the outcomes o f the envisaged activities will not be precisely known unless severe earthquake strikes the city. 4. Sustainability Institutional sustainability. The commitment to the project objectives, a good indicator o f its sustainability, i s shown by activities already carried out which were initiated by Turkish government and financed from their own sources. Development o f the Master Plan, command centers for the coordination o f post disaster actions, and technical studies constitute vital steps towards broadly based improvements in the capacity to mitigate the effects o f earthquakes and other disasters. Borrower ownership has been made clear during project preparation, where responsible entities have worked together to support the project and provide all necessary counterpart inputs with great efficiency. The prime example o f this cooperation has been the 8 prioritization process for the public facilities to be selected for retrofitting, involving many public institutional owners. Inorder to ensure institutional sustainability beyond the life of the project, the proposed project would provide assistance to the Governor's Emergency Management Center through support to the development o f organization structure and operations procedures and strengthen the capacity o fthe AYM to effectively carry out the roles assigned to it. Technical sustainability. The maintenance of the seismically strengthened structures inthe time beyond the project implementationperiod will follow normal procedures used for buildings. The long-term sustainability o f the emergency communication and information system, as well as the response equipment is dependent upon continuing budgetary support from the municipal and provincial governments to maintain the systems and equipment. Given the level o f commitment demonstrated by the lead agencies inthe Istanbulregion to emergency preparedness, and the fact that the communications and emergency response systems and equipment will be usedon a day- to-day basis, there is every reason to believe that the initiatives undertaken under the project will continue to be supported. 5.. Critical risks and possible controversial aspects The proposed ISMEP project has certain risks that need to be mitigated in order to help ensure achievement o f its development objective. The key potential risks, along with their proposed mitigation measures are the following: Lack of institutional coordination. The prioritization process carried out during project preparation for selection o f the public buildings to be retrofitted, showed that inter-sectoral cooperation can be effective if coordinated by one responsible institution, in this case, the Govemor's office. In the implementation phase, the risk o f lack o f coordination can be mitigated using the same mechanism, and by having the implementation unit vested with responsibilities and temporary ownership, until completion o f the investment, for the assets otherwise legally belonging to other public entities. The investments supported by the project in the communication and emergency management information systems will strengthen the linkages, and the process o f the interaction should further enhance working relationships and consequently, coordination mechanisms between various institutions, some under the Mayor, others under the Governor, responsible for public safety. (Risk rating: Modest) 8 Municipalities' commitment to strict enforcement of building codes and compliance with land use planning regulations. The project will support improvement o f building code enforcement at the municipal level through adopting a strategy which will require a full commitment o f municipalities to transparency and accountability to achieve improvement in compliance rate with building codes and land use plans. The achievement o f this objective will be monitored through an independent audit. The discussions with the Istanbul authorities indicate that there i s good will to work on development and application o f the necessary measures. Also, community involvement and information dissemination will provide for measures to increase chances of better buildingcode enforcement. However gaps in the regulatory fiamework and resistance by several interest groups may undermine the achievement o f this goal. (Risk rating: Substantial) 9 6. Loanlcredit conditions and covenants Effectiveness Conditions a Establishment o f the IPCU and the appointment of the Project Director, Procurement specialist and Financial Management specialist with qualifications and terms o f reference acceptable to the Bank; and a Signing of the Project Implementation Protocol between the Undersecretariat o f the Treasury andISPA under terms and conditions acceptable to the Bank. Loan Covenants Maximumfunds for re-construction o fbuildings will be limited to 20% o f allocation for civil works. Reconstructiono fbuildingswill require Bank no-objection (Schedule 5; para 5) The ISPA will submit an annual work plan and budget for Bankreview and comments by August 31each year. (Schedule 5; para 7a) The ISPA will update a procurement plan in accordance to guidelines acceptable to the Bank, and h i s h such update to the Bank not later than 6 months after the date o f the precedingProcurement Plan, for the Bank's approval (Article 111; section 3.03(b)) The ISPA will submit to the project Steering Committee and the Bank a progress report by March 31 and September 30 o f each year, starting March 31,2006. (Schedule 5, para 7 4 The ISPA will prepare the mid-termreview report by March 31, 2008 and facilitate the mid-termreview o fthe project byMay 30,2008. (Schedule 5; para 8b) D. APPRAISALSUMMARY 1. Economic and financial analyses Cost Benefit Analysis Methodolonv. There exist a number o f methods for performing a cost benefit analysis o f a disaster with widely varying data requirements anddegree o f sophistication. For the most part, estimation o f project costs i s easier and straightforward. These costs are borne at the beginningo f the period and are subject to a greater degree o f certainty. However, there are problems associated with the estimation o f project benefits. First o f all, one does not know in advance if and when a disaster will occur, and at which intensity it will occur. Secondly, one does not know in advance how effective the overall mitigation efforts will be in avoiding the possible loses based on vulnerability assessments. Therefore, in large-scale disaster mitigation projects the costs are defined while benefits, which are largely derived from avoided losses, are at best probabilistic. For disaster mitigation project involving earthquakes, the principal gain i s saved human lives in addition to avoided property loss and income in case o f commercial and industrial sites. Most o f the conventional cost-benefit models heavily rely on the notion of assigning a monetary value to human life which commands a much greater monetary amount as opposed to property. Although quite appropriate for insurance and actuarial purposes, and intrinsically appealing, this approach provokes controversy because o f disagreements whether a monetary value could be ascribed to human life. Where exhaustive listings o f project benefits and assignment o f monetary values to human life spared pose practical or moral difficulties, a 10 , macro approach may be adopted, especially for large and complex mitigation projects such as , ISMEP. Such a macro-economic approach i s pertinent for ISMEP, due to problems associated with the reliability and availability o fmicro-level data. The economic analysis o f ISMEPproject i s based on a macro model (neither attributing values to human life nor exhaustively listing all losses and damages). The analytical framing is based on a simple macro model which strives to arrive at comparable results that would be obtained through detailed micro analyses. Proiect Benefits. Benefits due to individualproject components are summarized inAnnex 9. The analysis relies on estimating the cross-cutting benefits - rather than individual component or activity benefits - that result from an interaction and interdependence o f all the project components. The concept o f provincial GNP is used to estimate the damage impact o f the earthquake as well as the benefits that would be due to the mitigation effort resulting from avoided earthquake impact. Economic Analysis. Using a macro-economic model, probability weighted annual economic loss inIstanbul due to an earthquake is expected to be aroundUS$ 163 million usinga conservative loss scenario and US$ 249 million based upon the most likely loss outcome. FEMA calls this concept annualized damages and losses and it does not apply to them a growth element. The same principles were adhered to inthis analysis as well. Mitigation must be centered on reducing this amount o f US$ 249 million per year to the highest degree possible. The project's benefits are generated to the same extent as one can reduce this potential loss. However, current loss mitigation capacity i s very limited and it can only be gradually built and sustained over a period o f time, which is assumed to span some 30 years. Under the above scenarios, the estimated ERR will be 11 % for the conservative case, and 19% for the most likely case for the proposed project, with' a C/B ratio o f about 1.11 (conservative case) and 1.69 (most likely loss scenario). If the loss level i s allowed to rise, this would only increase the ERR. For instance, using the most likely scenario assumptions, for a probability o f earthquake occurrence fixed at 3 percent, rather than 2 percent, the ERRwill be 29 percent (with B/C o f 2.53, and for a probability of 4 percent the ERR would be 41 percent (with C/B o f 3.37). This is due to the fact that at higher levels o f loss there will be more room for mitigation effort andhence generation o fmitigation benefits. The computational details are included inAnnex 9. 2. Technical The technical approach to the seismic strengthening o f public buildings is two fold: retrofitting o f structures where this is technically feasible and, secondly, building reconstruction where the existing poor quality does not allow for a reasonable retrofit, and a facility is o f key importance. The threshold in this respect i s considered a retrofit cost that is lower than 30% o f the cost o f replacement with a seismically appropriate structure on the same site. The technical measures, their costs andbenefits are subject to site specific feasibility studies. The proposed technical approach to retrofitting buildings is mainly to follow conventional engineering methods that are well-known in Turkey and intemationally, like construction o f 11 sheer walls and expansion o f building foundations. Advanced technologies, such as base isolationwill be introduced where appropriate. . Feasibility studies, including cost-benefit analysis to ensure that the cost o f retrofitting is below an agreed replacement cost ratio are a part o f each design contract for each building.These will be evaluated prior to the start o f construction for any given facility. Designs will follow the latest construction code, which experts acknowledge i s suitable for the seismic conditions o f Istanbul. The local construction industry i s fully capable o f implementing the work with currently available plant, labor and experience. The biddingprocess for engineering design and supervision will be based on international selection process to ensure that design and supervision follow international practices. Furthermore, the project will also finance an international seismic engineer to assist the IPCUinreviewingthe retrofitting design. 3. Fiduciary Financial Manaaement. The task team has conducted an assessment o f the adequacy o f the project financial management system at IPCU. The current financial management arrangements for the project are not yet fully satisfactory to the Bank and an action plan to bring these arrangements to a satisfactory level is included inAnnex 7. The project accounting will be maintained separately within IPCU which will install a Project Monitoring System that will allow for proper recording o f project financial transactions, including the allocation o f expenditures in accordance with respective components, disbursement categories and sources o f funds and that will generate financial, procurement and output monitoring report. The project expenditures will be financed 100% from the Bank loan as permitted by the new country financing parameters. The Government o f Turkey decided that allocating project funds directly to Istanbul Special Provincial Administration (ISPA) i s going to speed up project implementation. Therefore, a specific clause which will enable the Treasury to allocate the ISMEP loan to ISPA will be included inthe draft Law amendingsome laws and decree by laws. This law will give the Council o f Ministers the authority to make loan allocations to ISPA in cases where these funds are obtained for the purpose o f implementing risk mitigation projects in Istanbul. The budgetingand executionresponsibility for ISMEP will be vested with the ISPA. The budget will be submittedto the Province General Assembly for approval. These arrangements will also be confirmed in the protocol that will be entered between the Treasury and ISPA for Project Implementation. In any fiscal year, the undisbursed fkds can be transferred to the next year project budget by a decision o f the ISPA Secretary General upon the recommendation o f the IPCUDirector. There will be a special account for the project at the Central Bank o f Turkey inEuros. Since the project financing percentage i s loo%, payments for all expenditures under the project will be made from this account or through direct payments fi-om the loan account. The IPCU Director andthe Governor's Designee will beresponsible for signingwithdrawal applications. 12 Procurement. An assessment o f the capacity o f the Governorship o f Istanbul to implement procurement actions for the project has been carried out in February, 2005. The assessment reviewed the organizational structure for implementing the project. The key issues and risks concerning procurement have been identified and include lack o f experience with the Bank- financed projects. Therefore, the IPCUwill be composed o f competitively selected key staff such as Project Director, Deputy Director(s), FMS Manager, Procurement Manager and adequate number o f FMS and procurement experts, reporting, evaluation and monitoring expert, technical staff, environmental and social experts and necessary support staff as well as local and international individual consultants in contract management and supervision when and as needed. Furthermore, IPCU will be supported by consultant firms and individuals for the preparation o f designs, biddingdocuments and supervisiono fworks ifand as necessary. Given the fact that the gaps and loopholes existing inthe previous legislation which was subject to the recent CPAR conducted in 2001 were substantially removed by the new Public Procurement Law ( Code 4734 & 4735) effective from January 1, 2003 and assuming that the IPCU will have the necessary capacity, including the qualified procurement staff and supported by the MEERPIUwhich has highly experienced staff inBank's procurement assisting the IPCU inthe preparation of biddingdocuments, it is recommended that this project be placed initially inmediumrisk category. The riskratingwillbere-evaluated after one year ofloan effectiveness and adjustments made accordingly. At appraisal, a procurement plan for project implementation was developed which provides the basis for the procurement methods. This plan was agreed on April 18, 2005, and is summarized in Section C of Annex 8. It will also be available in the Project's database and in the Bank's external website. The Procurement Planwill be updated inagreement with Bank project team bi- annually or as required, to reflect the actual project implementation needs and improvements in institutional capacity. 4. Social Each o f the three components o f the project has had social analysis carried out during preparation. The implementationwill also include additional social analysis, as needed. For Component A (Enhancing Emergency Preparedness) a study has been commissioned to analyze community mobilization experiences in Turkey. The study will compare several efforts to mobilize community disaster response volunteers, focusing on a number o f dimensions, including mobilization techniques, training and organizing, developing and maintaining group morale, and sustainability. The results will feed into the preparation o f a community mobilization module that the Swiss Agency for Development and Cooperation (SDC) has expressed a strong interest in supporting. Using principles and techniques refined in their Neighborhood Disaster Support Project, the subcomponent will mobilize, train and equip volunteer teams that are prepared to offer significant first response support in their neighborhoods in case o f disaster. As sustaining such groups i s a major challenge, the process and results will be monitored carefully to find ways to increase the efficiency and sustainability o f the volunteer cadres. 13 For Component BySeismic Risk Mitigation for Public Assets, an analysis was undertaken in each o f the hospitals where a retrofitting feasibility study was completed to prepare or strengthen a social mitigation planassociated with the work. The plans will identifypossible impacts o f the retrofitting or reconstruction on operations o f the facility, as well as access by clients and the public to the services offered by the facility. The plans will identify steps to be taken to mitigate disruptions in service or access to facilities during construction on site or at an alternative location. The terms of reference for eachnew feasibility study for buildings to be included inthe public assets retrofitting program will include the requirement to prepare social mitigation plans inconsultationwith staff andmanagement ofthe facility. Project preparation actively engaged officials and technical staff in several municipalities, as well as decision makers in the Province and Metropolitan Municipality and academics. The various social analyses initiated contact with other stakeholders who will be involved more actively as Component C develops. The project will not involve land acquisition or resettlement, thus it does not trigger OPBP 4.12, Involuntary Resettlement. 5. Environment The environmental assessment category for the project has been determined to be B. This is based on the fact that overall, the environmental risks from the proposed ISMEP project are minor to moderate in scale, local in extent, and are easily identified, mitigated and monitored. The project is, furthermore, environmentally positive as it helps minimize the potentially disastrous environmental consequences o f an earthquake, and assure the existence o f public infrastructure and major utilities networks in the event o f the disaster. The retrofitting works would be performed on buildings that are already in existence and the use o f innovative, minimallyintrusive technical retrofitting solutions would be promoted. Only on a very limited scale the project might include demolition and replacement o f structures which do not qualify for the retrofitting. An environmental management plan that incorporates institutional assessment, identification o f specific potential risks along with their mitigation measures and monitoring systems has been prepared by the borrower; consultations with affected stakeholders were included inthe preparation. 6. Safeguard policies Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OPBP/GP 4.01) [XI [I Natural Habitats (OPBP 4.04) [I [XI Pest Management (OP 4.09) 11 [XI Cultural Property (OPN 11.03, being revised as OP 4.11) [XI E l Involuntary Resettlement (OPBP 4.12) [I [XI Indigenous Peoples (OD 4.20, being revisedas OP 4.10) [I [XI Forests (OP/BP 4.36) [I [XI 14 Safety o f Dams (OP/BP 4.37) [I [XI Projects inDisputed Areas (OP/BP/GP 7.60)* [I [XI Projects on InternationalWaterways (OP/BP/GP 7.50) [I [XI Involuntary Resettlement. The project will not entail land acquisition or resettlement, as the retrofitting or reconstruction will take place on existing sites. Each feasibility study for retrofitting will include a social mitigation plan to deal with temporary impacts o f the work on operation of the facility and access o f clients andthe public to the services offered inthe facility. Cultural Property. The safeguard policy on Cultural Property is considered triggered since retrofitting (and if needed replacement) in Istanbul has a reasonable likelihood of: (i) affecting listed cultural heritage sites, (ii) being inclose proximity to such sites, andor (iii) located being in a district under protection. The Bank has in the past reviewed the Turkish regulations concerning interventions with regard to cultural property. The EMP includes an updated review o f current regulations andpractice, and incorporates the appropriate mitigation planning. Environmental Assessment. Duringpreparation, a pool o fbuildings that met agreed criteria was established, however, all specific buildings to be strengthened will not be identified until project implementation. Therefore, a range o fpotential environmental impacts havebeen assessedand a generic EMP developed based on the potential interventions and environmental impacts. The EMP includes the mitigation plan, Le. measures to be taken to control potential impacts, monitoring plan, and responsible party for the mitigation actions. As part o f the formulation o f the EMP, the environmental protection regulatory framework was analyzed and institutional arrangements for environmental management clearly specified. The framework EMP for the project has beenpublicly disclosed prior to the appraisal. 7. Policy Exceptions and Readiness None * By supporting theproposedproject. the Bank does not intend toprejudice thefinal determination of theparties' claims on the disputed areas 15 Annex 1:Countryand Sector Background TURKEY: SEISMICRISKMITIGATION-TR Seismic Vulnerability.Turkey is highlyvulnerable to natural disasters, particularly earthquakes. In the 1999 Marmara earthquakes, the death toll reached over 17,000 with a direct economic impact estimated at about US$5 billion, or around 2.5 percent o f GNP.Within the nation's high- risk context, Istanbul i s most vulnerable because of its seismic-prone location on the North Anatolian Fault, and its highpopulation and commercialhndustrial densities. According to recent expert assessments, the probability o f a major earthquake affecting Istanbulinthe next 30 years i s 62% f 12%, while the likelihood o f such a devastation inthe next decade is 32% k 12%. Some sources estimate the economic impact o f such a disaster would range between US$20-60 billion. A model of earthquake scenario analysis was developed under the JICA-fhded Seismic Microzonation Study, with the following estimationo fhuman casualties and damages. Model A ModelB (most probable case) (worst case) Human Casualties Deaths 73,000 (0.8%) 87,000 (1.O%) Severely injured 120,000 (1.4%) 135,000 (1.5%) Building Damages /I Heavily 51,000 (7.1%) 59,000 (8.2%) Heavily +Moderately 114,000 (16%) 128,000 (18%) Heavily +Moderately +Partly 252,000 (35%) 300,000 (38%) Household Damages /1 Heavily 216,000 268,000 Heavily +Moderately 503,000 601,000 Heavily +Moderately +Partly 1,116,000 1,300,000 Public Buildings Located in High Seismic 42.8% 48.5% Intensity Areas 43.6% 53.1% Educational 48.0% 53.0% Health 53.0% 57.2% Security 59.4% 69.6% Governmental Water Pipeline Damage Points 1,400 1,600 I Gas PipelineDamage Points I 11 I 13 Electric Cable Damages 820 km(2.5%) 1,080 (3.3%) Bridge Damages (highprobability of 18 20 collapse) I I I living without repaidrebuild; Moderately: usable for evacuation, but repairs necessary for living; Partly: usablefor evacuation and living, but repair is desirablefor living. 16 The risk i s roughly comparable to the risk faced by Los Angeles and San Francisco, but with damage potential that i s much higher because o f Istanbul's greater structural vulnerabilities. If a seismic event o f the same magnitude as that in 1999 were to occur near Istanbul, the human suffering as well as the social, economic, and environmental impacts would be dramatically higher than in the Marmara region, as Istanbul is not only the financial, cultural and industrial center o f the country, but i s also a nexus o f inter-continental importance. An interruption of Istanbul's social, economic and financial life would be felt for many years to come. InternationalModels for EmergencyManagement. Emergency management organizations in nations that have a substantial earthquake risk share two common characteristics: (i)Thereisastrongemphasisondevelopingmunicipalandprovincialcapabilities. Emergencies occur in specific communities, and experience has demonstrated that the most fundamental effectiveness o f any emergency management system depends upon the ability, organization, skills, and commitment o f a community - its government officials, private industry, NGOs and residents -- to prepare for emergency situations. These efforts must be community based and managed, but must also be consistent with the national and provincial systems, their standards andprograms. (ii)There is a single national agency chargedwith coordination ofpreparedness,planning, response and recovery activities that i s directly linked either to the Executive branch of the government or the Ministry o fthe Interior. Organizationof EmergencyManagementin Turkey. Historically, Law No. 7269,"Measures and Assistance to Be Put into Effect Regarding Natural Disasters Affecting the Life o f the General Public" sets forth the fbndamental components of disaster management inTurkey. Turkey is divided into 81 provinces governed by administrators appointed by the central government. A provincial disaster committee is composed o f senior provincial officials fiom relevant ministries and departments like civil defense, health, education, and includes mayors (who are elected officials) and the Red Crescent Society. In addition, there are approximately 840 sub-districts inthe provinces and some 3,200 municipalities. Traditionally, disaster management in Turkey has been highly centralized. Local authorities administer directives fiom the Ministryo f Public Works and Settlement (MPWS) which has, in one reading o f Law 7269, the lead responsibility for disaster affairs; governors (who are part o f the Ministryo f Interior) are expected to coordinate and mobilize the resources o f other agencies. Mayors have relatively limited direct authority and responsibility for disaster management. Minor crises are to be handled at the district or sub-district level. If the disaster exceeds capabilities at that level, the provincial Governor becomes involved. If it i s a major event, representatives o f the ministries o f the central government become involved and establish crisis centers. Ifthere is a national-scale natural disaster (like the Marmara earthquake), a crisis center is established inthe office o f the PrimeMinister that includes senior representatives o f at least 15 ministries, including the military. 17 Though the system has been highly centralized, ironically there has been no single national coordinating agency for disaster management, until formal establishment o f the TEMAD after the Marmara earthquake. The operational responsibilities at the provincial level reside with governors. Each ministry has a unit responsible for some aspect o f disaster management. Rescue and relief operations are the direct responsibility o f the provinces or districts, with assistance provided by the central government; the central government, under MPWS, is responsible for reconstruction and rehabilitation. The Red Crescent Society, the General Directorate o f Civil Defense (GDCD in the Ministry of Interior), and the military also play a significant role in rescue andrelief operations. The enabling law sets forth a basic structure, and each ministrj has a specific plan but there has been no explicit national emergency response plan that defines how all the elements o f the government's response system are to be coordinated at each level. The General Directorate o f Disaster Affairs (GDDA) o f the MPWS, historically responsible for disaster management and mitigation (GDDA is divided into seven major departments: Earthquake Research, Disaster Damage Assessment and Survey, Emergency Reliefand Machine Support, Planningand Indemnification o f Affected Populations, Disasters Fund Administration, Temporary Housing, and Prefabricated House Construction) has approximately 1200 personnel, including planners, architects, geoscientists, architects and engineers but evidences little interest inemergency operations. The GDCD has some 3000 personnel, with approximately 300 assigned in Ankara. GDCD rescue and relief teams are assigned nationwide, and are expected to intervene at times o f disaster to provide immediate assistance, though their level o f training, organizational structure, and equipment is inadequate. The GDCD administers the operations o f the Civil Defense College inAnkara that trains civilian government employees. In1999the MEERproject team conducted a careful analysis ofthe altematives,to enhancethe capacity o f the Government o f Turkey to the nation's substantial risk fkom natural hazards. As a result o f this assessment, two basic strategic objectives were envisioned: (a) creating and empowering a single agency at the national level to coordinate the efforts o f all ministries related to disaster preparedness, emergency response and recovery and (b) decentralizing the emergency management system by enhancing the capacities at the municipal level so that the initial emergency response efforts - which have been clearly demonstrated to be the most effective in saving lives and reducingproperty damage - are strengthened. In June 2000 the Government enacted the Decree to formally establish the Turkey Emergency Management General Directorate (TEMAD) as a national coordination body for emergency management. TEMAD, however, was not able to play a key and significant role in the coordination o f disaster preparedness and response for several reasons including: (i) TEMADdid not initiate the process to develop its systems and human resources till only a few months ago; (ii)competing interests amongthe various entities that deal with disaster management and response; and (iii) head of TEMAD is at the General Director level, equal to the other the important agencies dealing with disasters and there is no proper mechanism to coordinate the 18 various activities. Recently, TEMAD prepared a draft law to strengthen disaster management coordination inthe country. The draft law calls for strengthening TEMAD's ability to coordinate the various government entities in the case o f a major earthquake, and calls for each local government to establish a disaster management team. The draft law has been circulated widely inthecountry for comments. In parallel to efforts o f the central government, individual municipalities have, at their own initiative, undertakenactivities to strengthen.their emergency preparedness capacity. Organization of Disaster Management in Istanbul. The overall responsibility for disaster management in the province o f Istanbul i s under responsibility o f the Governor. There are two key disaster management centers in Istanbul: the Istanbul Governorship Disaster Management Center ( A m ) and the Istanbul Metropolitan Disaster Coordination Center (AKOM); each having different roles and responsibilities. Provincial authorities are responsible for health, education, civil defense, civil works, security (police) and other areas falling under the authority o f the national government while the municipal agencies are responsible for the fire brigades, water and gas, and some parts o f the transportation networks. Ina case of a major disaster, all o f these services and sectors within the boundaries o f the province are under the responsibility o f the Governor. In addition, the provincial authorities, as regional representatives o f national agencies, serve as the principal link to the central government's operational facilities inAnkara. Both the provincial government and the metropolitan government have each constructed new emergency operations centers within the.past four years. The municipal center (AKOM) was completed and began operations within a year o f the 1999 earthquake. Modeled after a similar facility in Los h g e l e s County, AKOM contains many state-of-the-art features and accommodations for each o f the municipal agencies that would need to respond to a variety of emergencies. The Provincial government has constructed a similar facility (AYM) that, when fully operational, will serve a similar purpose, including training classrooms and facilities for field training. AYM will enable the Governor to lead emergency management operations'in a case o f a major natural disaster in Istanbul, and will enable the coordination among the national government agencies in Ankara, line agencies in Istanbul, and the metropolitan and district governments. The activities to be supported under ISMEP are designed to build on the self-initiated actions o f officials in Istanbul. Inthis sense, the ISMEP is entirely consistent with the strategies developed in 1999 and, as importantly, consistent with the broader national strategy o f the government in 2004 inits emphasis upon decentralizationas a fundamental objective. Building Code Enforcement. With the exception o f some o f the historic parts o f the city, Istanbul's housing stock has largely been created without the benefit o f city planning and within a "laissez faire" environment in which scant attention has been paid to either the seismic characteristics o f buildingsites or to applicable buildingcodes. Many buildings, and individual houses, have beenbuilt without valid permits, or with permits obtained in spite o f the fact that location or construction, or both, were not conforming with norms extant at that time. The latter itself were lax, at least until 1997, when the entire area o f Istanbul was finally'reclassified as being in a zone o f high seismic risk. Repeated "amnesties" o f buildings known to be outside o f 19 applicable norms, with the most sweeping one in 1983, have further contributed to the problem o f inadequacy o f housing with respect to seismic risks. The present status, conservatively estimated, is that over 70% of all housing inIstanbuldoes not conform with current standards o f resistance to the seismic risk that i s now generally accepted for Istanbul. Although the problems are widely known in Turkey, effective remedial action remains weak. Enforcement of construction codes and city planning, are the responsibility o f municipal governments. These, though, tend to be weak and under funded, with narrow if any, local income. As a result, municipal engineering and planning departments, the instruments for code enforcement and local planning, are equally weak, under funded and understaffed and, consequently, are susceptible to extraneous influences, including extra curricular monetary rewards. Overt, such as the mentioned "amnesties", and covert actions by higher authorities, interferingwith buildingpractices, have further contributed to the dismal status quo. The series o f catastrophic events, including earthquakes, that have hit Turkey inthe last 20 years or so, culminating in the devastating 1999 Marmara earthquake whose epicenter was a mere 60 km fiom Istanbul, have been wake up calls. This has coincidedwith a gradual strengthening o f local authorities, a decentralization o f power and, most important, with increased public aw.areness. The populations potentially affected by earthquakes, are increasingly vocal in their demands for safer living environments, and local governments also show the willingness to improve the situation. Key Studies Initiated by IstanbulAuthorities. Considerable effort and resources have been invested at the regional and local levels to better prepare at-risk-communities against future disasters. The Istanbul municipality in particular has demonstrated a high level o f commitment and ownership in disaster mitigation efforts, and has initiated numerous valuable seismic risk assessment and planning activities in collaboration with national and international experts, with some support from international donors. Study onDisaster PreventionlMitination. The JICA study o f 2002 emphasizing the likelihood o f a large earthquake striking Istanbul focuses on disaster prevention and mitigation planning in Istanbul, outlining the challenge as 1) to integrate and develop seismic microzonation studies in Istanbul as the scientific and technical basis for disaster preventiodmitigation planning; 2) to recommend a citywide preventiodmitigation program against building and infrastructure damages; 3) to recommend disaster prevention considerations in the urban planning o f Istanbul City; and 4) to pursue the tfansfer o f technology and planningtechniques to Turkey. Necessary earthquake disaster mitigation measures are presented as short- and medium- to long-term perspectives. Short-term measures basically include retrofitting important facilities and infrastructure to secure their operational function. Medium- to long-term measures involve non- structural recommendations. Earthquake Masterplan for Istanbul. The plan is comprehensive in its treatment o f risks and mitigating measures and has received international recognition as a strategic instrument for addressing seismic risks inhighlyvulnerable mega-cities. 20 The Masterplan outlines an "Earthquake Mitigation Planfor Istanbul" [EMPII with the following characteristics. The EMPI is envisaged as a framework for social contracts to be drawn between Istanbul Metropolitan Municipality, the Governorate, local municipalities, institutions, enterprises, NGOs, local community administrations, and individual citizens with the aim o f determining the active role o f the parties involved, and facilitating their participation and contributions. The overall purpose is to enhance safety and total quality o f life in the city by: reducing infrastructural deficiencies, gradually eliminating the unauthorized building stock, integrating mitigation measures in city management processes, protecting natural and historical assets, reclaiming urban quality and identity, engaging local communities in the management o f the city, rehabilitating o f high risk areas, and retrofitting or removing buildings according to the local revision plans. A particular area o f concern for Istanbul, as for other urbanareas, has been lax enforcement o f building codes and development control, caused by institutional and social factors, and leading to a built environment which i s poorly protected against seismic events. Bank Involvement. The project has been developed within the framework o f the Earthquake Masterplan for Istanbul and provides financial support to address many o f the safety and quality o f life enhancing objectives listed inthe document. The proposedproject strives to address some key systemic issues inorder to have lasting impact. This project builds upon and enhances the efforts over the past few years o f Istanbul provincial and municipal officials. It is designed to ensure that those responsible for carrying out the plans that have been developed will be continually involved in the process o f implementation and in determining the specific solutions to be achieved. 21 Annex 2: Major RelatedProjectsFinancedby the Bankand/or other Agencies TURKEY: SEISMICRISKMITIGATION-TR Bank-financedprojects: Turkey - Marmara Earthquake Emergency Reconstruction WEER) Project (P068368) [Active; PDO - Satisfactory; P - Satisfactory]. The main objectives o f the project are to help restore the living conditions inthe region o f Turkey that was affected by the August 17, 1999 Marmara earthquake, support economic recovery and resumption o f growth, and develop an institutional framework for disaster risk management and mitigation. Closing date has beenextended till May 31,2006. 0 Turkey-Emergency Recoverv Loan(EERL) (P068394) [Closed; Outcome: Satisfactory]. A key objective o f the loan was to assist the government to respond quickly and effectively to the impact o f the Marmara earthquake o f August 17, 1999, and help ensure that social assistance payments to earthquake victims were paid and keep Turkey's economic reform program on track. Turkey - Emergency Flood and Earthquake Recoverv (TEFER) Proiect (P058877) [Closed; Outcome: Satisfactory]. The objective o f the project was to assist the government in : (a) restoring basic infrastructure in municipalities and rural areas affected by 1998 flood by repairing structures and facilities o f economic and social importance; (b) providing assistance to restore housing in the earthquake affected province o f Adana and (c) reducing vulnerability to future floods and earthquakes. Turkey - Earthquake Rehabilitation and Reconstruction Proiect (POO9099) [Closed; Outcome: Satisfactory]. The objective o f the .project was to assist the Government in carrying out the emergency reconstructionprogram for the Erzincan region affected by 1992 earthquake through: (i)rehabilitation and reconstruction, and (ii)development and implementation of seismic risk prevention andmitigation measures. Programsof other donors: Japan International Cooperative Agency (JICA) has financed several risk assessment studies including a major microzonation initiative for the Istanbul metropolitan region. Japan Bank for Intemational Cooperation (JBIC) is providing a loan for seismic strengthening o f bridges andviaducts inIstanbul. Government o f France via SOFREMI loan will finance procurement o f emergency vehicles including rescue helicopters and ships for the Istanbul Metropolitan Municipality. Government of Switzerland - following the 1999 Marmara earthquake the Government o f Switzerland has worked with fire brigades and community groups in limit and Adapazari to improve training and public awareness regarding natural disasters. This effort has been 22 expanded to Istanbul. The support was also p;ovided through a limitednumber o f specialized search andrescue equipment cachesto the General Directorate o f Civil Defense inIstanbul, The U.S. AIzencv for International Development (USAID) - supported training programs for neighborhood groups inIstanbul. UNDP - has been implementing in several earthquake-prone locations the local capacity program for disaster prevention and preparedness through public awareness activities, and earthquake preparedness training for volunteer groups. European Investment Bank - in the aftermath o f 1999 Marmara earthquake, the EIB has provided, parallel to MEER, loan financing for housing, infrastructure, and lifelines reconstruction inthe affected region. Government o f Spain - provided hnding for reconstruction and rehabilitation o f damaged infrastructure. 23 Annex 3: ResultsFrameworkandMonitoring TURKEY: SEISMIC RISKMITIGATION-TR ResultsFramework OutcomeIndicators Useof OutcomeInformation K e y public facilities are retrofitted to Formulate public policies and and facilities) is well prepared to a resist a major earthquake; skills and xograms for seismic risk mitigation major earthquake. technical capacities o fthe relevant u1the country risk-prone areas. emergency response units are strengthened; buildingcode enforcement and compliance with land use plans are improved. IntermediateResults ResultsIndicatorsfor Each Use of ResultsMonitoring Oneper Component Component Component A: Component A: Component A: Capacity o f the provincial and New communication system i s Assess effectiveness o f the systems municipal public safety installed and fully operational in andtraining througha day-to-day organizations inIstanbul to respond emergency response facilities. application and mock exercises, to major disasters is enhanced; coordination between regional Emergency management Define additional training needs. emergency response agencies, as information and communication well as between the Istanbul systems are installed and used in Support municipal and provincial authorities and the national daily operations. governments with decision-making government are improved. tools. The Governorship Disaster Management Center (AYM) i s Performance may feed into strengthened. institutional changes inemergency management. The public safety units are provided with the adequate emergency response equipment. The relevant agencies and volunteer groups are trained. Component B: Component B Component B: K e y selected public facilities are Around 800 public buildings Replication o n the national scale o f retrofittedinorder to ensure their retrofitted the methodology for the operation inthe aftermath o f a prioritization and strengthening o f Feasibility assessments o f lifelines public facilities, based on and vital infrastructure completed. transparent criteria. Exposure and wider use o f new Vulnerability assessment o f selected seismic strengthening techniques by cultural heritage buildings engineering and construction completed. industry. Informed decisions o n retrofittingheconstruction o f lifelines and vital infrastructure. 24 Increased donor awareness o f need and opportunities to invest in protection o f cultural assets. ComponentC: ComponentC: ComponentC: Better enforcement of building Improvement incompliance with Revisedpolicies and procedures for codes and progress made in buildingcodes and landuse plans in improved code enforcement. implementation o f land use plans in selected Istanbul municipalities. selected municipalities. Voluntary accreditation and training o f engineers has started. I 25 0 .I a 2 .P c a 0 m r cU ca 4 5L 4 r 3 e a I II: (I) N v) I I 0 2 0 O ~ O O O Ex 0N % 0 0 vi s m - m w w X :: %X 0 0 0 N X X X Annex 4: DetailedProjectDescription TURKEY: SEISMICRISKMITIGATION-TR ComponentA: EnhancingEmergencyPreparedness(uS$73.46 million) Objective. The objective o f this component is to enhance the effectiveness and capacity o f the provincial and municipal public safety organizations in Istanbul to prepare for, respond to and recover from significant emergencies, especially those arising from earthquakes. Background. In recognition of the expert forecasts on probability o f earthquake in North Anatolian Fault, and following the sobering experiences o f the August 1999 Marmara disaster, the metropolitan andprovincial governments inIstanbulhave undertakena series o finitiatives to accelerate the pace o f preparedness among public agencies and, through on-going awareness programs, the general public. These efforts have enjoyed the strong, visible support o f a series o f Governors and Mayors in Istanbul and have galvanized the efforts o f numerous agencies, non- governmental organizations and the general public. While the pace o f preparedness at the national level has been slow, the mitigation and preparedness efforts o f Istanbul authorities have been substantial. For example, both the provincial government and the metropolitan government have each constructed new emergency operations centers within the past four years. The municipal center (MOM) was completed and began operati,ons within a year of the 1999 earthquake. Modeled after. a similar facility in Los Angeles County, M O M contains many state-of-the-art features and accommodations for each of the municipal agencies that would need to respond to a variety of emergencies. The Provincial government has constructed a similar facility (AYM) that, when fully operational, will serve a similar purpose, including training classrooms and facilities for field training. Both levels o f government, as well as mayors of several o f the districts in the metropolitan region, have supported risk assessment studies like the JICA assessment, inventories o f ' vulnerable structures and facilities, and widespread public awareness programs through informational brochures and media campaigns. A robust geographic information system -Urban Information System -- i s being developed that includes the location o f critical infrastructures and vulnerable structures. Representatives o f the key public safety agencies meet regularly to develop, review and refine plans and procedwes for responding to a major earthquake. Large-scale exercises are held at least twice a year. Officials from the Turkish military are active participants in these planning and exercise efforts and they have developed detailed plans for how they will respond in support o f civilian authorities. Though the level of commitment and action by provincial and municipal authorities is impressive, significant and tangible, the level o f risk is so severe that important needs remain unmet. For example, budgetary constraints have delayed achieving full operational status for the AYM facility. 28 Personnel levels and equipment for the fire brigades and emergency medical services are well below those o f other large, highrisk metropolitan areas. The provincial ministry o f health has 65 operational ambulances and no communications links with areahospitals. 500 fire fighters are on duty at any time. They operate out o f 38 stations spread over a large, densely populatedcity with an intricate and often archaic road and street system that makes access to some highrisk areas all but impossible. Communications links between the fire, security, emergency medical agencies and the various crisis centers are marginally adequate for day-to-day operations and would be immediately overwhelmed in the aftermath o f a significant earthquake or other large-scale emergency. Each ' function monitors the activities of their public safety colleagues, but they operate on separate frequencies and there is no significant capacity for interoperable communications at the field level. AYM and AKOM, the principal crisis management centers, are not able to share information electronically and the various crisis management centers of other public safety agencies are dependent on the same limited wireless communications networks that are used for dispatch o f critical resources. There are no systems in place that would allow each o f the crisis centers to have a common situational awareness about conditions following a major disaster or to systematically track resource requests, resource status, and projected needs. In addition, communication and information linkages between the provincial and municipal authorities in Istanbul and key agencies of the national government in Ankara remain much as they were in 1999. Since any major disaster in Istanbul will inevitably require prompt assistance from unaffected areas throughout Turkey, rapid notification, reliable communications systems and the ability to share information about what has occurred and what resources are most critically needed will be essential to an effective emergency response. The issues summarized above -- especially those involving communications, information gathering and sharing, and enhancing the response capacity o f key agencies -- are the principal areas to be addressed inthis project. This project builds upon and enhances the efforts over the past four years o f Istanbulprovincial and municipal officials. It is designed to ensure that those responsible for carrying out the plans that have been developed will be continually involved in the process o f implementation and in determining the specific solutions to be achieved. ComponentDescription Enhancing the emergency preparedness and response systems in Istanbul i s to be accomplished through five principal activities: (a) improvingthe emergency communications systems, capacity and capabilities among and between the key public safety agencies, including linkages to national authorities in Ankara; (b) establishment o f an Emergency Management Information System that links the various key crisis centers in the metropolitan area as well as national authorities in Ankara; (c) upgrading the operational capacity o f public safety agencies through 29 the acquisition o f equipment as well as training and awareness programs; (d) strengthening the institutional capacity o f AYM; (e) public awareness andtraining. Sub-componentA.l- EmergencyCommunicationsSystem(US$33.16 million) Communications is the cornerstone o f an effective emergency response. The current emergency communications systems in the Istanbul metropolitan region have numerous, significant limitations that are widely recognized by the public safety agencies and key governmental officials. Each agency - security, fire brigades, emergency medical - operates its own system that is ` capable o f voice-only transmissions. Each system is essentially an "open channel'' network that operates on a "first come, first serve" basis with minimal ability to prioritize calls. There i s high background noise on the networks. Each agency monitors the other networks at the call centers butthere is no effective "interoperability", i.e. the ability to communicate betweenfunctions on a common network. There is no ability to transmit data over the networks or to arrange for groups to talk clearly. Key facilities, e.g. hospitals, are not linked to the ambulance services. The limitations o f the current systems will almost inevitably seriously compromise an effective, coordinated response to a major crisis. The component would support the establishmenthpgrade and installation o f an integrated communications system so that all public safety agencies such as police, fire brigades, civil defense, heath care providers and ambulance, at the provincial and municipal levels communicate effectively at the tactical (field) level using both voice and data. The system will also enable the communications to the relevant crisis centers and key facilities including national offices in Ankara. The system will have several layers o f backup so that it will continue to be operational in the event o f catastrophic event. The component will also support training o f systemusers, training o f systemmaintenance and operations. Currently, a systems analysis is being conducted by international consultants to define the specific technical features and equipment necessary to achieve the objectives o f the upgraded system. This work builds upon efforts undertakenby the provincial and municipal governments to consider alternative strategies for, resolving what they recognize are serious limitations with the existing communications systems. Sub-componentA.2 EmergencyManagementInformationSystem(US$7.50 million) - Large-scale emergencies involving multiple agencies and multiple activities are managed at crisis centers. Crisis centers bring together representatives o f involved agencies to make critical decisions regarding response priorities, determine what resources are available, identify what resources are needed, locate those resources and ensure that they are deployed and, should the situation change, reassigned. These operations centers are responsible for developing the situational awareness o f what has occurred, what the impacts have been'and what actions are needed to minimize the effects of the 30 crisis. In a large-scale emergency multiple crisis centers will be activated by the municipal and provincial governments, the involved agencies andministries and at the national level inAnkara. It is important that each center has a shared understanding or common view o f what has occurred, what actions are beingtaken, what priorities have been established and what resources are needed and deployed. An Emergency Management Information System is the key to achieving this coordinated response. Currently the multiple crisis centers that would be activated following a major earthquake in Istanbul can only communicate via the same wireless, voice-only systems referenced above. While municipal and provincial authorities are developing a robust geographic information ' system (GIS) that graphically displays the region's critical infrastructure, this important management tool cannot currently be shared between the centers or integrated with information regarding response priorities and resource allocations. An Emergency Management Information System makes the effective use o f GIS duringa crisis possible. The sub-component would support establishment o f an Emergency Management Information System that can collect, aggregate and display information related to a crisis, inreal time, for use by the operations crises centers that would be established both in the Istanbul metropolitan region and at the national level in Ankara. This system should also support daily operations o f the public safety organizations such as civil defense, fire brigades, police, traffic control and municipal governments. The component would also support data conversion, training in system operations and system maintenance. Currently a systems analysis i s being carried out by international consultants, working in coordination with a users group from the provincial and metropolitan governmental agencies, to define the specific technical features and equipment requirements to support the implementation of an emergency management information system. Sub-componentA.3 Strengtheningthe InstitutionalCapacityofAYM-the Governorship - DisasterManagementCenter (US$9.60 million) The provincial government has copstructed a new facility to be used as an operational and training center for emergency management. While the construction has been completed budgetary constraints have delayed making the facility fully operational. Since this facility provides the primary point o f coordination between the municipality and the national government inAnkara, the project will provide support and technical assistance to the provincial government to enable the facility to become operational including computers, visual displays, and other equipment. In addition, the project will provide technical assistance to the provincial government to develop the organizational structure and operational procedures to strengthen its capacity to carry out the roles assigned to it. 31 Sub-component A.4 - Upgrading the Emergency Response Capacity in the Istanbul MetropolitanRegion(US$15.20 million) The primary emergency response agencies (fire, security [police], emergency medical teams) in Istanbul - the "first responders" - have many critical needs to enable them to cope with the challenges they will face following a major earthquake. While the above-outlined activities under this component will provide much o fthe communications andinformation infkastructure to enhance response, it is essential that the units and personnel at the field level have adequate equipment, facilities andtraining to support their efforts. Because of the nature o f the buildingstock - largely concrete arid brick-there are relatively few structural fires inIstanbul. The fire brigades inIstanbul, much like those throughout Turkey, are staffed at a level below that for large metropolitan areas. Istanbulhas 1500 firefighters with 500 on duty per shift assigned to 38 stations. Unique demographic features, including the fact that the metropolitan area is divided by the Bosporus and laced with an intricate road and street system with many areas virtually inaccessible, add to the challenges the department faces. Bycontrast, the city o fTokyo, which also is faced with a severe seismic risk, as well as ahistory o f catastrophic fires, has over 17,000 fire fighters housed in 80 stations with 207 branches. The City o f New York has 11,400 fire professionals and 2800 emergency medical technicians on staff, London has over 7000 fire fighters while the City o f Los Angeles has 3,376 fire fighters working out o f 103 stations, augmented by the Los Angeles County Fire Department that has over 5500 personnel. The emergency medical services are similarly small in size. Sixty five ambulances are currently available to the provincial Ministry o f Health; they have set a goal o f having 100 units operational. Emergency communications systems provide for no links to the area's hospitals and, with the exception of arrangements made at a few fire stations, there is little coordination between fire response unitsand emergency medical actions. This sub-component will support the financing o f equipment for "first responder" agencies in Istanbul as well as training and on-going maintenance costs. A needs assessment is currently underway by international consultants, working in close consultation with local officials, to identify and prioritize the specific needs and equipment standards to be used and to ensure that the initiatives supported through this project are coordinated with efforts undertaken by the government and international donors. The project will support the acquisition o f equipment - e.g. response vehicles, upgrades o f emergency medical support teams, rescue equipment, command vehicles, and personalprotective gear. Sub-component A.5 - Public Awareness and Neighborhood Community Volunteers (US$8.0 million) As part o f enhancing emergency response capacities the project will provide support to the disaster awareness program, as well as training for the volunteer groups in the selected areas of 32 Istanbulidentified to be at a highseismic risk, inan effort to prepare disaster-prone communities to respond to emergencies in a swift and organized manner. This will be realized through the community-based disaster awareness program, as well as training for the volunteer groups. Evidence from earthquakes and other Datura1 disasters, including those in Turkey, clearly demonstrates the importance o f a knowledgeable public who can make a critical difference in reducingthe loss o f life inthe immediate aftermath of an earthquake. The project will support public information campaigns aimed at increasing public awareness of seismic risks, and training to school children, community groups, and the business community in preparedness and mitigation measures. This component will disseminate educational and other materials already available but not yet widely distributed as well as develop materials for radio andtelevision. Creating and sustaining volunteer groups to provide assistance in preparedness and response efforts is a challenge worldwide. Numerous groups piloted volunteer initiatives following the 1999 earthquake, with varying degrees o f success. One program that shows particular promise is the Neighborhood Disaster Support (MAG) program funded by the Swiss Agency for Development and Cooperation (SDC). SDC mobilizes neighborhood groups by working through Muhtars (the lowest level of govemmental structure in Turkey). Four to five ten-person teams per neighborhood are targeted and, through experiences gained inprojects in Kocaeli province, SDC has developed training programs and equipment caches. The teams participate ina 36-hour training program conducted by professionals from Civil Defense, Fire Brigades and medical associations, and in periodic exercises.. SDC creates a small self-management group that maintains contact information, arranges maintenance, updates training and organizes social activities to strengthen team cohesion. The project will work in coordination with volunteer organizations including SDC; SDC will provide the organizational oversight o f the effort and ISMEP will provide fimding to conduct training programs, refresher training and field exercises, as well as equipment caches to support the neighborhood MAG teams to be created in the Istanbul Metropolitan area. The component will be implemented in close coordination with the .General Directorate o f Civil Defense, with the support o f aprofessionalpublic relations firm. ComponentB: Seismic RiskMitigationfor PrioritvPublicFacilities(US$309.55 million) Objective. The objective o f this component is to implement structural retrofitting measures to reduce the risk o f future earthquake damage to essential facilities, in order to ensure their continuing function and to reduce casualties in the event o f an earthquake. In the case o f especially critical medical facilities where retrofitting is deemed to be unfeasible, some reconstructionmay be included inthis component. Essential public facilities include those that serve a public function critical to the disaster response and recovery operations of the community and to social and community function in general, as well as buildingsregularlyusedby large numbers o f the public where 'life-safety i s o f special concem. These include schools and hospitals, disaster response and information centers, and governance and public order management centers. Lifelines including gas, water supply, 33 power and transport infrastructure i s being largely retrofitted by other donors or by the private companies that operate them. However the component will support a Risk Assessment o f vital infrastructure (lifelines) to identify remaining gaps, and recommend an action planto implement needed mitigation measures. The component will also include a small technical assistance program to address the vulnerability o f cultural assets, which are important to Istanbul's economy, and which inmanycases have global cultural heritage value. Background. The earthquake of 1999 demonstrated the seismic vulnerability o f the building stock o f the Istanbul and Marmara region. In addition to the human and economic losses, essential facilities such as hospitals, fire brigades, and rescue equipment were rendered inoperable or destroyed, resulting in chaos in the national emergency response activities and delaying the delivery o f emergency aid to earthquake victims. After the earthquake, the Municipality of Greater Istanbul and the Governorate of Istanbul began to develop a comprehensive strategy to integrate several initiatives necessary to reduce the city's vulnerability. Among these i s addressing the challenge to strengthen key public facilities that mustbe capable o fremaining inoperationinthe event o fanurbanearthquake. In response to the Marmara earthquake, parliament passed laws that delegate many o f the mitigation and emergency response functions to the provincial and municipal levels o f govemment. Local administrations, especially Istanbul, followed up by making quick progress in, among other initiatives, carrying out vulnerability assessments and making investments in retrofitting (structural upgradinglstrengthening). Because o f its recognition o f the serious risks prevailing in building code enforcement, the Istanbul Provincial Government has carried out an inventory o f at-risk structures, establishing priorities for retrofitting activities and initiating some retrofitting work on public assets with support from international donors such as JICA, which supported the drafting o f a special report on Istanbul's vulnerability to earthquakes, including limited microzonation and earthquake scenario studies. Istanbul Municipality estimates that the metropolitan area's building stock o f approximately 1.5 million structures includes about 12,000 structures serving public functions, many having priority in disaster response and recovery operations, such as hospitals, schools, andemergency management and governance centers. The agencies responsible for critical facilities have begun to fund and implement retrofitting o f key structures. Inaddition, with the help o f a $100 million loan from the government o f Japan, several heavy volume bridges and overpasses may be retrofitted. The Government has identified about 3,600 public structures remaining inneed o fretrofitting following the Marmara quake, and estimates that about U S $ l billion is needed to complete the work. Thus, while much work has been done, the unmet needs remain significant. The earthquake risk reduction activities to be supported through the project under this component are therefore designed to build upon and expand the efforts of local and regional govemments, focusing on critical public facilities and assets. ComponentDescription 34 The component will focus on four categories o f buildings (outlined below) that are essential to the disaster response and recovery operations or otherwise serve important public functions in the community. These categories include buildings only, and comprise a long list o f nearly 2,500 of the 3,600 public structures that require retro-fitting. The Component will finance the retrofitting o f up to 840 o f these, selected in order o f priority based on specific criteria as described below. This represents about a third o f the estimated total retrofitting need for public buildingsinthese categories. A limitednumber o fbuildingreconstructions may also be included, iffeasibility studies demonstrate a) criticality for emergency response as well as general function, and b) costhenefit analysis (including life-cycle cost analysis) that brings into question the technical and cost effectiveness o f retrofitting. Non-structural elements will also be secured as a part o f the structural work, as described further below. The component will also support the development o f a vulnerability assessment o f lifelines and a vulnerability inventory for cultural heritage assets, which are important to Istanbul's economy. Quality control o f design and construction will be provided through a) design review by international seismic experts, b) site supervision and technical control by IPCU engineers experienced with seismic retro-fitting and earthquake reconstruction supervision, and c) on-site internationally procured construction supervision consultants, as done under the previous Bank- funded TEFER and MEERreconstructionprojects. The provincial Government, in consultation with the sectoral provincial government agencies, has identified a list o f priority buildings planned to be retrofitted. The inventory and prioritization process was developed through a series o fmeetings between the Governor's office, stakeholders and academicians as detailed below. ComponentB.1- RetrofittingDXeconstruction of Priority PublicFacilities(US$303.85 million) The types o fpublic facilities to be considered eligible for seismic strengthening through project financing are categorized as follows: Category A: Medical Facilities 0 Hospitals 0 District polyclinics. Category B: Educational Facilities Schools 0 Student dormitories Category C: Administrative Facilities 0 Facilities essential for the administrative functioning of communities at risk after disaster, including communication and coordination centers Category D: Social Service Facilities 35 Childprotection centers Orphanages Elderly housing The cost benefit threshold for eligibility for project financing will be determined through the feasibility studies being carried out with PHRD funding, and is expected to be approximately 30% o f replacement cost, depending on function, age and sector operational requirements such as usefulness of the structure's plan from the point o f view o f b c t i o n (potential functional obsolescence-medical function with respect to adaptability to modem medical technology and service provision). Certain hospital structures may be considered for complete reconstruction if feasibility studies demonstrate a) criticality for emergency response as well as general function, and b) costhenefit analysis (including life-cycle cost analysis) brings into question the technical andcost effectiveness o fretrofitting In addition to strengthening the hospital buildings to protect the emergency response capacity and the lives o f the patients and staff, it is also necessary to secure non-structural components such as medical equipment and infrastructure in order to avoid loss o f function and secondary damage and to prevent injury during an earthquake. While this need is especially important in hospitals, it applies also to first response facilities and other structures where technical infrastructure must continue to operate immediately after an earthquake. The retrofitting work under the component will include the securing o f such critical non-structural elements. Items to be includedare those physical elements required for the continuing safe and effective operation o f the facility, such as equipment, stored supplies and technical infrastructure, as well as physical access and circulation within the compound, inthe case o fhospitals. Duringthe retrofitting operations, the social and functional impact.o f structural interventions in hospitals will be minimized through special planningactivities involving hospital staff and other stakeholders, the design engineers, and the contractors. The planning for impact reduction as well as its monitoring during construction will be ensured through a consultancy funded under the project. The prioritized list includes a few school buildings o f historic and/or cultural importance. Feasibility studies will determine whether cost-effective, non-intrusive retrofitting can be implemented in these cases. Decisions whether retro-fitting i s economically and culturally feasible, will be made on a case-by-case basis, including consultations with the Bank. Turkishlaw governing the protectionandreconstructiono fthese structures would apply. Selection process Under the leadership o f the Istanbul Governorship Disaster Management Center (AYM), a comprehensive inventory o f critical facilities has been developed through a transparent prioritization process involving stakeholder agencies, using building-specific technical data, transport access data (hospitals and schools), distance from fault lines, importance inthe Istanbul Disaster Management Plan, population on-site and general population served and other relevant characteristics depending on the type o f facility, taking account criteria for each sector as indicated inthe weighting formula tables below. 36 The process included workshops that gathered representatives o f the sectoral provincial directorates and academicians, to agree on the allocation o f project resources between sectors and among types o f facilities, as well as criteria for prioritization, including coefficients to be used to weight relative importance for the sectors and role in the overall Istanbul Emergency Management Plan. Conclusions reached during the workshop in regard to the allocations and criteria coefficients served as a basis for completing the priority list o f public buildings by the AYM o f the Governorate working with a small task group o f stakeholders. The process has provided a rationalized prioritized list o f facilities requiringseismic retrofitting in order to serve the city inthe event o f a major earthquake or other disaster. The tables below indicate the selection criteria and weighting formula used for public facilities prioritization and selection. No. CRITERIA Score 1. ACCESSIBILITYDURINGDISASTER(X0,20) 20 0 Access from air (x 0,05) I(yes)-100 I(no)-0 0 Access from ground (x 0,15) between 0-100 2. TECHNICALFEATURES OF BUILDING(X0,20) 20 0 Constructionyear after 1980 (40) 0 Constructionyear before1980 (I00) 3. DISTANCE EPICENTER(X0,Io) TO 10 I 0 Distanceto Fault Line >20km. (40) 0 Distanceto Fault Line C20km. (100) 4. Importance in DisasterManagement Plan (Strategical Location)* (x0,40) 40 5. Capacity(bed) (x0,IO) 10 0 0-100 bed (30) 0 100-500bed (60) 500 bed and more (I 00) I TOTAL I100 Specialfeatures like specializationof hospitals, surroundingopen spacefor potentialmobile units, etc., are also taken into account in discussionswith health sector officials. 37 Table 2: PRIORITIZATION CRITERIA FOR SCHOOLS No. CRITERIA Score ACCESSIBILITY DURING DISASTER (Xo.10) 10 Access between0-100 2' TECHNICALFEATURES BUILDING(x0.40) OF 40 0 ConstructionYear (x0.20) (a)before 1965' ( I00) (b) between 1965- (c) after 1980 (40) 1980(60) 0 Numberof story (x0.20) (a) > 5 story (100) I (b) 3-4 story (60) I(c) 1-2 story (20) 3. DISTANCE EPICENTER TO (x0.10) 10 I Distanceto Fault Line >20km. (40) 1 Distanceto Fault Linec20km. (100) 4. Importance in Disaster Management Plan (Strategical Location) (x0.10) 10 5. Number of Student (x0.20) 20 ~~ ~ I 0-500 student 130) 500-1000 student (60j 1 1000 student and more (100) 6. Working Hours (x0.10) 10 Half day (60) I Wholeday (100) TOTAL I100 Table 3: PRIORITIZATION CRITERIA FOR ADMINISTRATION BUILDINGS No. CRITERIA Score I. TECHNICALFEATURES BUILDING OF (X0.20) 20 0 ConstructionYear (x0.10) (a) before1965 (100) I (b) between 1965-1980 (60) I (c) after 1980 (40) Numberof story (x0.10) (a) > 5 story (100) , I (b) 3-4 story (60) I (c) 1-2story (20) 3m DISTANCE EPICENTER TO (x0.10) 10 I Distanceto Fault Line >20km. (40) . . Distanceto Fault Line ~20km. (100) 4. Importance in Disaster Management Plan (Strategical Location) (x0.50) 50 5. Number of Personnel (~0.10) 10 0-50 (30) 50-200 (60) 200andmore (100) 6. Working Hours (x0.10) 10 8 hrs. (60) more than 8 hrs. (100) Table 4: PRIORITIZATIONCRITERIA FOR DORMITORIESAND SOCIAL SERVICES BUILDINGS No. CRITERIA Score ACCESSIBILITY DURING DISASTER (Xo.10) 10 Accessibility between0-100 2. TECHNICALFEATURES BUILDING OF (X0.40) 40 0 ConstructionYear (x0.20) (a)before 1965 (100) I (b) between 1965-1980 (60)I(c) after 1980 (40) 0 Numberof story (x0.20) (a) > 7 story (100) I (b) 4-6 Story (60) I(c) 1-3 Story (20) I I I '" I .I A n DISTANCE EPICENTER TO (Xo.10) Distanceto Fault Line >20km. (40) Distanceto Fault Line c20km. (100) 4. Importance in Disaster ManagementPlan(StrategicalLocation) (x0.15) 15 5. Number of Studentor People (x0.25) 25 0-500student (30) 500-1000 student (60) 1000student or more (100) Table 5: PRIORITIZATIONCRITERIA FOR DISTRICT POLYCLINICS No. CRITERIA Score 1. DISTANCE EPICENTER TO (X0.20) 20 Distanceto Fault Line >20km. (40) Distanceto Fault Line ~20km.(100) 2. Importance in Disaster Management Planning (StrategicalLocation) (x0.50) 50 3. Population Served (x0.30) 30 0-100 people (30) 100-500 DeoDle (60) I 500 peopleand more (100) TOTAL 1100 The process of selection began with a long list o fbuildingswithin the four sectors considered to ,be inneed o f retro-fitting, as shown inthe table below. The long list totals 2473 buildings out o f the approximate total o f 12,000 public sector structures (which includes bridges and other structures) in Istanbul, or about 25% o f the total. The weighting and prioritizing activities resulted in a short list o f 840 buildings estimated to absorb the funds available inthe component and covers about 34% o f the estimated total need for retrofitting. The list of selected buildings is available in the project files. The final prioritized list includes the numbers of buildings by sector as follows: 39 Table 6: Prioritization Results (numbers of buildings) Facility Long Short Percent List List ofLL Polyclinics 241 14 6% Schoo1s 1783* 598 34% I Administration I 68 I 45 1 66% I Student dormitories 46 26 57% Social Services 27 27 100% total 2460 840 34% I *an additional +/- I000 school buildings have been or are being retrofitted I The prioritized list includes 25 hospitals with retrofitting designs ready and available from the previously Bank-financed Erzincan reconstruction project, permitting procurement o f construction contracts for a number o f high-priority buildings early during project implementation. These designs were reviewed during project preparation to ensure appropriateness under the project. Feasibility studies and design work for the additional buildings in the project will be carried out during project implementation. These will be reviewed by international seismic engineers. Opportunities to apply innovative seismic mitigation methodologies will be identified. Sub-componentB.2 -RiskAssessmentfor LifelinesandVital Infrastructure(US$2.45 million) The project will finance an integrated seismic risk assessment for gas, water supply, power, telecommunications and transport infrastructure. The JICA study provides initial potential damage assessments under two earthquake scenarios which indicate vulnerabilities inthe lifeline systems. Considerable mitigation work has been accomplished but a detailed risk assessment i s recommended a) to identify remaining needs, and b) to lay the foundation for follow-up work on investments needed to address vulnerability o f the lifelines and vital infrastructure, including , prioritization o f investment projects, and providing opportunities for other donors' contributions to reducing the risk to these critical facilities. In addition, this subcomponent will finance the development o fmethodologies for risk assessment o f commercial and industrial facilities. Sub-componentB.3 -RiskAssessmentof CulturalHeritageBuildings(US$3.25 million) Istanbul i s a cultural and historic center o f world importance. Many structures on the World Heritage list are found in Istanbul, and because o f these assets, the city has for centuries been a center for the study o f eastern and western history and culture. However, perhaps more important to the city's inhabitants and the country as a whole is the fact that Istanbul's cultural assets contribute significantly to the local and national economies because o f their strong attraction to tourists and scholars. Interest among international experts to address the seismic vulnerability o f Istanbul's cultural patrimony has increased since the Marmara quake, and a number of private and bilateral initiatives have attempted to come to terms with the challenge o f 40 protecting them. However, both the scale o f the problem and the broad interest in taking action have constrained the development o f a coordinated approach. Recently, the Government has drafted an action plan comprising i)developing a comprehensive inventory o f the cultural assets o f Istanbul, ii)conducting detailed feasibility studies to determine seismic vulnerability and recommend technical mitigation measures, and iii)carrying out design andconstruction under a long-term (20-year) plan. The Component will include funding o f the first step (inventory), and funding for applying the second step (detailed feasibility studies) to selected highpriority assets, as identified in the first step. The project may also provide limited funding for technical assistance to help establish a coordinated approach that will enable and facilitate action by interested donors and expert groups. ComponentC: Enforcementof BuildinP Codes (US$7 million) Objective. The objective o f this component is to strengthen the institutional and technical capacity of the Greater Istanbul Municipality and district municipalities to enforce building codes and compliance with landuse plans. Background. The inadequacy o fthe housing stock interms o f seismic resistance is the result of a combination o f several factors. Constructions have often taken place on sites whose geologic characteristics make them unsuitable for housing or whose characteristics are insufficiently known, makingit impossible to apply the correct building codes. Inthis respect it must be noted that much illegal construction has taken place on state owned land that is illegally occupied due to the insufficient availability o f private land. Pertinent buildingcodes have not been followed, as their application was deemed too costly. As a result, many buildings, although technically adequate elsewhere, may not resist expected seismic events on the site oftheir construction. Inthe absence of code enforcement, building standards have further slackened as a result of profit maximization, to the point where the buildings would be unsafe. The addition o f extra floors to existing buildings, without obtaining the required permit and other structural changes led to existing configurations which could not be structurally safe in case o f major earthquake. Prevalent changes inthis respect are often made by shop owners, occupying the ground floors of buildings, in attempts to extend the space available or to make the shop more easily accessible. Cutting o f support columns to widenthe shop front i s probably the most egregious example. Lack o f certification and accreditation o f engineers, inspectors and contractors have also amplified this problem. Currently, there i s no accreditation o f engineers or contractors, and potentially any graduate from an engineering school can design a building, and any person in Turkey could be a contractor. Most engineers and contractors have no liability insurance and which i s not legally requiredas part o fprivate construction. While most building permits are issued in accordance with existing buildingcode, often the final buildings do not comply with the original design. There is often collusion between the home owner who would like to have addition floors, the inspector, and the contractor. 41 ComponentDescription The project would support the Greater Municipality o f Istanbul and the district municipalities to better enforce buildingcodes and comply with landuse plans. A study carried out duringproject preparation identified the following main reasons for lack o f enforcement o f buildingcodes: (i) gaps inthe legal and regulatory framework; (ii) o f certification o f engineers, inspectors, and lack contractors, (iii)lengthy processes o f approvals which open doors for corruption among civil servants, engineers, private inspectors and contractors; and (iv) lack o f public understanding o f the importance o f compliance with buildingcode and landuse plans. The component will include the following sub-components: Sub-componentC.l PublicAwareness (US$0.23 million) - The sub-component will support public awareness campaign to the wider community inregardto the importance for public safety o f compliance with buildingcodes and landuse plans.This will include advertisement in media, production o f T V and radio programs, meetings with contractors, etc. Sub-componentC.2 Developmentof the RegulatoryFramework(US$0.56 million) - The sub-component will built on the current work undertakenas part o f MEERproject, and will further support the Ministry o f Public Works and Settlements in further studies and analyses in order to identify solutions and identify gaps inthe regulations that would aim to enable the local authorities to better enforce the building code and increase the compliance with land use plans. The component will also support public consultationwith stakeholder groups, and drafting o fthe relevant regulations. Sub-component C.3 - Voluntary Accreditation and Training of Engineers (US$l.20 million) The sub-component will support the accreditation o f engineers on a voluntary basis, startingwith civil engineers who expressed interest in the scheme. The accreditation would follow the standards used inthe EUmember countries. This will facilitate the entry o f Turkish Engineersto the EUmarket. Sub-component C.4 - Streamlining of Building Permits Issuance Procedures (US$5.01 million) The project will provide support to a limited number o f district municipalities, on a demand basis, to improve the efficiency of issuance o f building permits, ensure transparency, curtail corruption, and strengthen mechanism for public complaints. The purpose o f this focused support i s to demonstrate that practical measures can be undertaken to improve efficiency and to streamline buildingpermits issuance while increasingtransparency o f the process. 42 The project will provide the following assistance: (i) re-engineering o f buildingpermit issuance, including training, capacity building activities, and installation o f computer systems, including hardware, software and data conversion; (ii) o f an independent private firm to inspect the hiring compliance with buildingpermitsandto identifyany illegal construction. The component will also support the establishment o f hotline, to be operated by an independent private entity, to receive customer complaints. Files for all complaints will be submitted to the Mayor for investigation and further actions. ComponentD: ProjectManagement(US$S.O million) The objective o f this component i s to support the ISPA to implement the project in efficient and transparent way, and build the institutional capacity to sustain the implementation o f Seismic RiskMitigationandPreparednessprogrambeyondthe life o fthe project. The component will provide support to the Istanbul Project Coordination Unit (IPCU), responsible for project implementation, through provision o f contract staff salaries and other expenses, short term technical assistance, office equipment and fumiture, vehicles, training, and incremental operational costs. It would further support monitoring and evaluation. 43 Annex 5: ProjectCosts TURKEY: SEISMIC RISK MITIGATION-TR Local Foreign Total ProjectCostBy Componentand/or Activity us us us $million $million $million Component A: Enhancing EmergencyPreparedness 36.86 31.88 68.74 . Component B: Seismic Risk Mitigation for Priority 239.28 44.63 283.91 Public Facilities Component C: Enforcement ofBuildingCodes 4.35 2.06 6.41 Component D: Project Management 7.60 0.32 7.92 Total Baseline Cost 288.08 78.88 366.96 Physical Contingencies 16.26 3.31 19.56 Price Contingencies 3.68 9.79 13.48 TotalProjectCosts' 308.02 91.98 400.00 Interest during construction Front-endFee* 2.00 TotalFinancingRequired 402.00 * To bepaidbythe Government Component TotalCost Percentageof Bank Bank DisbursementCategory Financing Financing (US$) % US$ Civil Works and Tech. Services 292.93 100 292.93 Goods 72.24 100 72.24 Consultants Services andTraining 28.38 100 28.38 Incremental Operating Cost 3.87 100 3.87 44 Annex 6: ImplementationArrangements TURKEY: SEISMIC RISKMITIGATION-TR InstitutionalAnalysis Disaster Management Organization and Structure. Traditionally, disaster management in Turkey has been highly centralized. Local authorities administer directives from the Ministry o f Public Works and Settlement (MPWS) which has, in one reading o f Law 7269, the lead responsibility for disaster affairs; governors (who are part o f the Ministry o f Interior) are expected to coordinate and mobilize the resources o f other agencies. The provincial authorities, .as regional representatives o f national agencies, serve as the principal links to the central government's operational facilities in Ankara. Mayors have relatively limited direct authority and responsibility for disaster management. Minor crises are to be handled at the district or sub- district level. If the disaster exceeds capabilities at that level, the provincial Governor becomes involved. If it is a major event, representatives o f the ministries o f the central government become involved and establish crisis centers. Ifthere i s a national-scale natural disaster, a crisis center i s established inthe office o f the Prime Minister that includes senior representatives o f at least 15 ministries, including the military. Though the system has been highly centralized, ironically, there was no single national coordinating agency for disaster management, until formal establishment o f the TEMAD after the Marmara earthquake. InJune 2000 the Government enacted the Decree to formally establish the Turkey Emergency Management General Directorate (TEMAD) under the Prime Minister's office as a national coordination body for emergency management. The mandate o f the directorate include: (a) carrying out inter-institutional coordination; (b) supporting establishment o f emergency management centers within local governments; (c) preparing emergency response plans; (d) promoting .volunteer efforts; (d) coordinating procurement, warehousing and distribution o f relief materials. The General Directorate o f Disaster Affairs (GDDA) o f the MPWS, historically responsible for disaster management and mitigation (GDDA i s divided into seven major departments: Earthquake Research, Disaster Damage Assessment and Survey, Emergency Reliefand Machine Support, Planning and Indemnification o f Affected Populations, Disasters Fund Administration, Temporary Housing, and Prefabricated House Construction) has approximately 1200 personnel, including planners, architects, geoscientists, architects and engineers but evidences little interest inemergency operations. The GDDA, underMPWS, is responsible for reconstruction andrehabilitation inthe aftermath o f disasters. The Red Crescent Society, the General Directorate o f Civil Defense (GDCD in the MinistryofInterior), and the militaryalso play a significant role inrescue andreliefoperations. The General Directorate for Civil Defense (GDCD) has some 3000 personnel, with approximately 300 assigned inAnkara. GDCD rescue and relief teams are assigned nationwide, and are expected to intervene at times o f disaster to provide immediate assistance, though their level o f training, organizational structure, and equipment is inadequate. The GDCD administers the operations o fthe CivilDefense College inAnkara that trains civilian government employees. , 45 Though over the last years TEMAD has not met all expectations inregard to its potential as a single coordinating body, recently it has intensified its efforts by taking the initial steps to enter into contracts to develop the design that would lead to the establishment o f the national emergency management center and a state-of-the-art emergency management information and communication systems. These efforts will be coordinated with the initiatives being undertaken as part of ISMEP through on-going interaction between the consultants and the expertise provided by user groups at the national, provincial and municipal levels. The agency also prepared a draft law to strengthen its disaster management inthe country. The draft law calls for strengthening TEMAD's ability to coordinate the various government entities in the case o f a major earthquake, and for each local goverhment to establish a disaster management team. The draft law has been circulated widely in the country for comments and will bepresentedto the Cabinet inthe coming weeks. The operational responsibilities at the provincial level reside with governors. Each ministryhas a unit responsible for some aspect o f disaster management. Rescue and relief operations are the direct responsibility o f the provinces or districts, with assistance provided by the central government. Organization of Disaster Management in Istanbul. The overall responsibility for disaster management in the province of Istanbul i s under responsibility o f the Governor. There are two key disaster management centers in Istanbul: the Istanbul Governorship Disaster Management Center (AYM) and the Istanbul Metropolitan .Disaster Coordination Center (AKOM); each having different roles and responsibilities. Provincial authorities are responsible for health, education, civil defense, civil works, security (police) and other areas falling under the authority o f the national government while the municipal agencies are responsible for the fire brigades, water and gas, and some parts o f the transportation networks. Ina case o f a major disaster, all o f these services and sectors within the boundaries o f the province are under the responsibility o f the Governor. In addition, the provincial authorities, as regional representatives o f national agencies, serve as the principal link to the central government's operational facilities inAnkara. Both the provincial government and the metropolitan government have each constructed new emergency operations Centers within the past four years. The municipal center (AKOM) was completed and began operations within a year o f the 1999 earthquake. Modeled after a similar facility in Los Angeles County, M O M contains many state-of-the-art features and accommodations for each o f the municipal agencies that would need to respond to a variety o f emergencies. The Provincial government has constructed a similar facility (AYM) that, when fully operational, will serve a similar purpose, including training classrooms and facilities for field training. AYM will enable the Governor to lead emergency management operations in a case o f a major natural disaster in Istanbul, and will enable the coordination among the national government agencies in Ankara, line agencies in Istanbul, and the metropolitan and district governments. The activities to be supported under ISMEP are designed to build on the self-initiated actions o f officials in Istanbul. Inthis sense, the ISMEP is entirely consistent with the strategies developed 46 in 1999 and, as importantly, consistent with the broader national strategy of the government in 2004 inits emphasis upon decentralization as a fundamental objective. ProjectManagementArrangements Inlinewith government decentralization agenda, project implementation would beplaced under the responsibility o f the Governor o f Istanbul. A small Istanbul Project Coordination Unit (IPCU) would be established under the Istanbul Special Provincial Administration (ISPA). The Unit would be headed by a highly qualified project Director who will report directly to the Governor or h i s designee, and the General Secretary o f ISPA. Each relevant agency (such as Provincial Directorates of Health, Education, Public Works, etc.) will nominate a senior staff to be a liaisonbetween the IPCUandtheir mother agency. The IPCU will be responsible for project coordination, procurement, financial management, contract management, monitoring, and evaluation and reporting. The core IPCU staff will include, in addition to the Director, 2 Deputy Directors (one technical and the other for administration and finance), 2 procurement officers, 2 financial management officers, 5 engineers, a social scientist, an environmental engineer, and a monitoring and reporting officer. The number o fpositions is indicative andmight be revised duringproject implementation. In order to ensure full coordination among the various relevant agencies and the IPCU, ImplementationCoordination Protocols wi.11be signed betweenthe ISPA andthese agencies. Some staff from the existing PIU under the Prime MinistryOffice (implementing, among others, the MEER project) will be temporarily assigned to the 'IPCU, and once the ISMEP project becomes effective these staff may be permanently transferred to IPCU.. A Project Steering Committee would be established to oversee project implementation,and provide strategic guidance. The Steering Committee would be chaired by the Govemor o f Istanbul, and may include Directors o f the provincial departments o f the concerned ministries, representatives o f IstanbulMunicipality, Treasury, SPO, TEMAD, Minis,try o f Public Works and Settlements, and the Director o fthe PrUunder the Prime MinistryOffice. 47 Annex 7: FinancialManagementandDisbursementArrangements TURKEY: SEISMIC RISKMITIGATION-TR ,A. ProjectFinancialManagement Summary of Financial Management Arrangements The task team has conducted an assessmento fthe adequacy o fthe project financial management system at Istanbul Project Coordination Centre (IPCU) at Istanbul Special Provincial Administration (ISPA). The current financial management arrangements for the project are marginally satisfactory to the Bank and an action plan to further improve the systems is agreed with ISPA. A summary o f the conclusions for the project financial management purposes regarding Bank requirements are as follows: I RATING COMMENTS 1.ImplementingEntity Satisfactory IPCUat ISPA will be responsible for project implementation. 2. Funds flow Satisfactory 3. Staffing Satisfactory 4.Accounting Policies and procedures Marginally The procedures will be documented at satisfactory the project FMmanual 5. Intemal Audit Not Applicable 6. External Audit Satisfactory 7. Reporting and Monitoring Satisfactory 8. Information systems Unsatisfactory P C Uwill purchase and install a project management system. OVERALL FMRATING Marginally Satisfactory Country Issues. A Country Financial Accountability Assessment for Turkeywas camed out in2001. The CFAA report identified some weaknesses in the Turkish financial accountability, inboth the public and the private sector. Since 2001the financial managementenvironment has improved inTurkey . In December 2003, the Public Financial Management and Control Law (PFMC) which establishes the legal framework for harmonizing and modernizing budgetary practices across all of general government i s enacted inthe Parliament It will reduce fragmentation and provide for , a more comprehensive presentation o f the budget. The law will also allow for future decentralization o f financial control to spending agencies. Originally PFMC was to become effective in January 2005, but it i s now postponed to January 1, 2006. The project will be implemented by Istanbul Project Coordination Centre (IPCU) that will be established under Istanbul Special Provincial Administration. The local administrations are subject to PFMC law 48 and defined as part o f the general govemment. The PFMC Law defines the following structure applicable to local administrations. Budget preparation at SPAs will be done in accordance with PFMC; with a mediumterm perspective, consistent with the annual programs, development plans and SPAs own strategic plans. This budget will be approved by the Provincial General Assembly and will be sent to the MinistryofInterior. SPAs will prepare Activity Reports at year ends to be submitted to the Ministry o f Interior. An internal audit unitwill beestablished at SPA level. SPAs are subject to TCA audit. The current scope o f TCA audit i s limited to conformity (regularity) audit. With PFMC TCA audit scope was expanded to cover financial and performance audit inaddition to conformity audit. The Government as part o f its decentralization reform agenda has enacted a new Special Provincial Administration Law on March 4, 2005 which became effective on the date o f its publication. This law delegates more authority to SPAs and its financial management clauses (regulating budgeting, accounting, organization structure o f financial management, reporting and auditing) are consistent with PFMC. Even though this law was enacted, the President has announced that he will apply to Constitutional Court for cancellation on the basis o f his assessment o f 13 articles as unconstitutional. Risk Analysis. A summary ofthe risk assessment for the project inaccordance with the Bank requirements is as follows Risk Comments INHERENTRISK 1. CountryFinariciaLManagementRisk High Based on the CFAA report prepared in 2001. 2. ProjectFinancialManagementIssues Moderate OverallInherent Risk High CONTROLRISK 1. ImplementingEntity Moderate 2. FundsFlow Negligible 3. Staffing Moderate 4. Accounting PoliciesandProcedures Moderate 5. InternalAudit NIA 6. ExtemalAudit Negligible 49 7. Reportingand Monitoring Moderate 8. Information Systems Substantial Overall Control Risk Moderate Risk Mitigation Strategy Country financial management risk -the CFAA has identified major weaknesses in the Turkish financial accountability, in both the public, private and the banking sector. These risks together with the developments inthe sector incurred after the preparation o f CFAA has been explained indetailinthe "Country Issues" section. The project financialmanagement will becentralized at IPCUthat will be established at the IstanbulSpecial Provincial Administration. Control risk -UntilIPCUis hlly established and experienced inproject implementation the PIU currently implementing the MEER project will provide support to IPCU in complying with the action plan.The MEERPIUi s very experienced inthe implementationo fBankprojects. Implementing Entity Project implementation responsibility will belong to the Istanbul Special Provincial Administration (ISPA). An Istanbul Project Coordination Unit (IPCU) would be established under the ISPA. The Unit would be led by a project Director who will report directly to the Governor or his designee and the General Secretary o f ISPA. Each relevant agency (such as Provincial Directorates o f Health, Education, Public Works, etc.) will nominate a senior staff to be a liaisonbetween the IPCU andtheir main organization. IPCUwill be responsible for project coordination, procurement, financial management, contract management, monitoring, and evaluation and reporting. The IPCUwill include, in addition to the Director, 2 Deputy Directors (one technical and the other for administration and finance), 2 procurement officers, 2 financial management officers, 5 engineers, a social scientist, an environmental engineer, and a monitoring and reporting officer. The number o f position is indicative and might be revised in the course o fproject implementation. Some staff from the existing Project ImplementationUnit (PIU) under the Prime Ministry Office (implementing, among others, the Marmara Earthquake Emergency Reconstructi'on (MEER) project) has been transferred to the' IPCU, and these staff might be re-hired once the ISMEP project becomes effective. Untilthe IPCUis fully functional MEERPIUwill continue to provide support in purchasing and installing the Project Management System (PMS) and preparing the financial management manual for the project. The MEER PlU is very experienced in the implementationo f Bank projects andi s hlly capable ofproviding support to IPCU. The risk associated with the implementing entity i s assessed as moderate. Staff is already assigned to IPCU and its formal establishment will be completed following the negotiations. Funds Flow The project expenditures will be financed 100% from the Bank loan as permitted by the new financing parameters. The borrower will be the Undersecretariat o f Treasury. The Public Finance 50 and Debt Management Law (Law number 4749,dated March 28, 2002) gives the Treasury the right to allocate loans obtained from foreign sources to general and annex budget institutions. Since ISPA is a special budget institution, the Treasury is not able to allocate the loan for ISMEP to ISPA under the current legislation. However the Government o f Turkey decided that allocating project funds directly to ISPA is going to speed up project implementation. Therefore, the Law which amends some laws and decree by laws is expected to be enacted in the coming months. The proposed Law would authorize the Council o f Ministers to transfer funds for the implementation ofthe project. In the new' Public Financial Management and Control Law (PFMC), special provincial administrations are included in the description o f general govemment. The PFMC regulates the general framework o f budget preparation and reporting procedures for SPAs. The new SPA Law approved by the President on March 4, 2005 regulates the budget allocation and execution procedures o f SPAs. The SPA budgets and final accounts will be agreed by the Province General Assembly and ISMEP will also be approved by the Province General Assembly. Its budgeting and executionwill bethe responsibilityo fISPA. project financing percentage i s loo%, payments for all expenditures under the project will be There will be a special account for the project at the Central Bank o f Turkey in Euros. Since the made from this account or through direct payments from the loan account. The IPCU Director andthe Governor's Designee will be responsible for signingwithdrawal applications. The risk associated with the flow o f funds is considered as negligible. Staffing. Three staffs with satisfactory experiences and qualifications are provisionally assigned from the Prime MinistryPIU to IPCU. These staffs are at senior level, one for financial management and one for procurement. The remaining positions will be advertised and recruitment to these positions including the second financial management staff will be completed by August 1, 2005. Until full staff assignments to IPCU are completed, the MEER PIU will provide support IPCU. The required fundingfor the recruitment o f staffwill also be provided from the MEERproject. The risk associated with staffing i s considered as moderate. Provisional staff assignments from MEERPIUare completed and additional staffwill berecruited as required. Accounting Policies and Procedures The project accounting will be maintained separately within IPCU. The project accounting will be on a cash basis. The MEER PIU has prepared the terms of reference for a consultant to establish a Project Monitoring System (PMS) at IPCU that will be used for project accounting, monitoring and reporting. The PMS will generate financial reports, procurement reports and will also be used for contract management. The MEER PIU will prepare the main chart o f accounts and the draft project financial management manual for the project. The TOR has been prepared 51 byMEERPIUandthe contract with the consultant will be signedby 29 April 2005. Accounting procedures will be set out in.the financial management manual for the project. The financial management manual will cover (a) the financial and accounting policies and procedures for the project (b) organization o f the financial management (c) the financial management information system (d) disbursements (e) procedures for budgeting and financial forecasting (f) project reporting and (g) project planning procedures to be finalized. The draft project financial management manual will beprepared by April 29,2005. The risk associated with accounting policies and procedures i s considered as moderate. The MEER PlU has satisfactorily completed the preparation o f the TOR for the project financial management system and the contract with the consultant will be signed by April 29,2005. Internal Audit Currently there i s not an internal audit unit at ISPA. However the PFMC law which will be effective on January 1, 2006 requires the establishment o f internal audit unit at SPAS.Until such structure is established no reliance will beplaced on internal audit. Reporting and Monitoring The IPCUwill maintain records and will ensure appropriate accounting for the funds provided. Financial statements for the project will be prepared by the IPCU. The Financial Monitoring Reports 0;MR) will be prepared quarterly' and will be submitted to the Bank no later than 45 days after the endo fthe quarterlyperiod. The format and the contents o f the FMR have been agreed between the Bank and the MEER PIU. The FMR for ISMEP includes financial reports, output monitoring reports andprocurement reports. The financial management manual o f the project will include a section on the FMR. The PMS will be capable o fproducing all these reports. The risk associated with reporting and monitoring is assessed as moderate. The formats o f the FMRs are agreed with. They will be generated automatically by the system once it is installed at IPCU. Information Systems The MEER PIU has prepared the terms o f reference for a consultant to establish a Project Monitoring System (PMS) at P C U that will be used for project accounting, monitoring and reporting. The PMS will generate financial reports, procurement reports and will also be used for contract management. The contract with the consultant to implement the PMS i s required will be signed by April 29, 2005. The PMS will be financed from the PHRD grant received for project preparationpurposes and there i s allocation inthe grant for this purpose. The risk associated with information systems is assessed as substantial. A contract with the consultant will be signed by April 29,2005. Strengths and Weaknesses 52 a The significant strengths that provide the basis of reliance on the project financial management system are (a) centralizationof all project financial management functions at IPCU(b) support of the well established andvery experienced MEER PIU. The significant weakness inthe project financial management systemis that this is the first Bank project in Turkey that will be implemented by a Special Provincial Administration and therefore there i s no accumulated experience inthe functioning o f financial management procedures at the provincial level. Action Plan Itis concludedthat the current financial management arrangements for the project are marginally satisfactory and the following action plan i s agreed with the borrower to bring the unsatisfactory arrangements to a satisfactory level. Action Due Date 1. Contract will be signed with the consultant to establish the ProjectApril 29,2005 Monitoring System (PMS) 2. Draft Project Financial Management Manual prepared April 29,2005 3. Draft FMRs produced by the PMS May 15,2005 4. Recruitment o f additional FM staff completed August 1,2005 Supervision Plan During project implementation, the Bank will supervise the project's financial management arrangementsin two main ways: (i) the project's quarterly financial management reports review as well as the banks` and project's annual auditedfinancial statements and auditor's management letter; and (ii)during the Bank's supervision missions, review the project's financial management and disbursement arrangements (including a review o f a sample o f SOEs and movements on the Special Account) to ensure compliance with the Bank's minimum requirements. As required, a Bank-accredited Financial Management Specialist will assist inthe supervisionprocess. B. ExternalAudit. ISPA i s audited annually by Turkish Court of Accounts. However TCA audit is geared towards compliance auditing only. With the PFMC and the draft TCA law which is expected to be enacted soon, TCA`s audit scope will include financial and performance audits as well. Audits o f all project audits in Turkey are done by Treasury Controllers and the annual project financial statements for ISMEP will also be audited by the Treasury Controllers in accordance with International Standards on Auditing (ISA) and under TOR that will be cleared by the Bank before negotiations. The risk associated with extemal audit is assessedas negligible. 53 DisbursementArrangements The project will be disbursing on the traditional disbursement techniques and will not be using FMRbased disbursement. One special account will be created for the project. A special account will be opened by the Treasury for ISPA in Euros at the Central Bank o f Turkey. The special account will have an authorized allocation o f Euros 20 million. Two authorized signatures who will be specified inthe project FM manuals will sign the withdrawal applications. At the start o f the project, the initial deposits will be limited to Euros 10 million and the remaining portion o f the authorized allocation will be requested after cumulative disbursements reach a level o f Euros 30 million. The minimum application size for payments directly fiom the loan account for issuance of special commitments i s 20% o fthe special account allocation. Applications for replenishment o f the Special Account will be submitted to the Bank on a monthly basis, or when the balance o f the Special Account i s equal to about half o f the initial deposit or the authorized allocation, whichever comes first, and will include a reconciled bank statement as well as other appropriate supporting documents. Use o f statements o f expenditure (SOEs): disbursements would be made against Statements of Expenditures for (i) works, under contracts costing less than $5,000,000 equivalent each; (i) goods, under contracts costing less than $500,000 equivalent each; (ii) services o f consulting firms under contracts costing less than $200,000 equivalent each; (iii) services o f individual consultants under contracts costing less than $50,000 equivalent each; (iv) training; and (v) incremental operating costs, all under such terms and conditions as the Bank shall specify by notice to the Borrower. Detailed documents evidencing these expenditures would be reviewed and retained by IPCU. Disbursement for the financing of contracts exceeding the above limits would be made on the basis of full documentation. Disbursement and procurement documents using SOE procedures would be retained by IPCU for a period of at least two years after disbursement and made available to World Bank staff and external auditors. 54 Annex 8: ProcurementArrangements TURKEY: SEISMIC RISKMITIGATION-TR A. General Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004; and "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" dated M a y 2004, and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Loan, the different procurement methods or consultant selection methods, the need for pre- qualification, estimated costs, prior review requirements, andtime frame are agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated biannually or as requiredto reflect the actual project implementation needs and improvements in institutional capacity. Procurement of Works: Eligible investments under this category would be for: retrofitting o f the key structures and lifeline facilities that serve a public function essential to the disaster response and recovery operations. The buildings include hospitals, schools, dormitories, civil defensehearch and rescue centers, and key administration centers. Lifelines are the utility services and transportation networks vital to disaster response and otherwise vital to the health and safety o f the community. A limited number o f building reconstructions, not to exceed the 20% o f the budget allocated for the retrofitting works, may also be included. In addition to strengtheningthe hospital buildings to protect the emergency response capacity and the lives o f the patients and staff, works contracts would be launched for securing/fixing o f non-structural components such as medical equipment and infrastructure in order to avoid loss o f function and secondary damage andto prevent injuryduring an earthquake. The procurement will be done using the Bank's Standard BiddingDocuments (SBD) for all I C B andby usingthe Bank's sample N C B documents for ECA Region for Works andGoods. The works contracts to cost less thanUSD 5 million per contract may be awarded through NCB. Any ambiguity regarding predominance o f the Bank's procurement rules inthe case o f contracts conducted inNCB procedures will be overcome by using the Bank's sample N C B documents for ECA Region for Works. The conditions for using N C B are listed below from paragraph A to K below shall be discussed at the negotiations and made part o f the Loan Agreement. Based on the performance o f the project coordination and implementation unit (IPCU) on the N C B contracts, the Bank will consider increasing the N C B Works threshold per contract to USD 6 million or above after one year o f implementation pursuant to effectiveness o f the LoanAgreement. A. Eligibility Bidding shall not be restricted to domestic bidders. N o restriction shall be applied to foreign bidderswho wish to submit a bid. B.Procedures 55 Invitations to bid shall be advertised in the Official Gazette and in at least one widely circulated national daily newspaper or in an electronic portal o f free access allowing a minimumo f30 days for the preparation and submission o fbids. C. Assessment o fthe bidder's qualifications In the procurement of goods and works, where pre-qualification is not used, the qualifications o f the bidder who i s recommended for award o f contract shall be assessed by post-qualification, applying minimum experience, technical and financial requirements which shall be explicitly stated inthe biddingdocuments andwhich shall be determinedby a `pasdfail' method, not through use o f a merit point system. D.ParticipationbyGovernment-owned Enterurises Government-owned enterprises .inthe Republic o f Turkey shall be eligible to participate in bidding only if they can establish that they are legally and financially autonomous, operate under commercial law and are not a dependent agency o f the Government. Furthermore, they will be subject to the same bid and performance security requirements as other bidders. E.Participationby Joint Ventures Participation shall be allowed fromjoint ventures on the condition that suchjoint venture partnerswill bejointly and severally liable under the Contract. F.BiddingDocuments Procuring entities shall use the Bank's sample N C B documents for ECA Regian for Works and Goods and shall draft contract and conditions o f contract acceptable to the Bank. G. BidEvaluation a) Evaluation o f bids shall be made in strict adherence to the monetarily quantifiable criteria declared inthe bidding documents and a merit point system shall not be used. b) Extension o f bid validity shall be allowed once only for not more than 30 days. N o further extensions shouldberequestedwithout theprior approval o fthe Bank c) Contracts shall be awarded to qualified bidders having submitted the lowest evaluated substantially responsive bid. d) No domestic preference shall apply under National Competitive Bidding. H.PriceAdjustment 56 Civil works contracts o f long duration (e.g. more than eighteen (18) months) shall contain an appropriate price adjustment clause. I.Reiection o f All Bids All bids shall not be rejected and new bids solicited without the Bank's prior written concurrence. J. Contracts All contracts shall be in writing, signed and stamped by authorized signatories o f the Purchaser and the Supplier and contain identical terms and conditions o f contract to those included inthe tender documents. K. Securities BidSecurities shouldnot exceed 3 % (three percent) o fthe estimated cost o fthe contract; Performance Securities not more than 10 % (ten percent). No advance payments shall be made to Contractors without a suitable Advance Payment security. The wording o f all such securities shall be included into the bidding documents and shall be acceptable to the Bank Procurement of Goods: Goods procured under this project would include equipment and materials needed for the eligible investments for: (i)emergency communication system; (ii) emergency management information system; (iii) upgrading o f emergency response capacity in Istanbul metropolitan region and (iv) supporting the Governor's disaster management center, public awareness, neighborhood volunteers, municipalities and training o f target groups. The procurement will be done using the Bank's Standard BiddingDocuments (SBD) for all ICB and byusingthe Bank's sample NCB documents for ECA Region for Goods. The Goods manufacturedwithin the country and readily available inthe local market to cost less than USD 500,000 per contract may be awarded through NCB. Any ambiguity regarding predominance o f the Bank's procurement rules in the case o f contracts conducted in N C B procedures will be overcome by using the Bank's sample N C B documents for ECA Region for Goods provided that either the LoanAgreement or the side letter should address the provisions A through K stipulated above. Selection of Consultants: The Borrower will select and hire consultants for the (i) preparation o f bidding documents including the detailed design drawings ,technical specifications and bills o f quantities and for the construction supervision o f the selected buildings and life lines. In addition to this consultants will be hired for (ii)feasibility studies; (iii)public awareness campaign and training (v) risk assessment for the cultural heritage buildings, lifelines, industry and etc; and (vi) enforcement of building code. A consultant for the voluntary accreditation o f engineers and inspectors will be employed on a single source basis. 57 Consultant services also comprise the TA to support implementation o f the project, training and seminars, financial management assistance. Operational Costs: which would be financed by the Loan would be procured using the procedures acceptable to the Bank. B. Assessment of the agency's capacityto implementprocurement An assessment o f the capacity o f the Governorate o f Istanbul to implementprocurement actions for the project has been carried out in February, 2005. The assessment reviewed the organizational structure for implementing the project. Based on the discussions held by the task team and the Undersecretary o f Prime Minister, the Treasury, Governor o f Istanbul, Director o f the Turkey Emergency Management Administration (TEMAD), sector experts from the State Planning organization (SPO) ,and the PIUDirector o f the MEER Project, the project components will be implemented and coordinated by the Governorship o f Istanbul through a project coordination unit (IPCU) to be established under the Special Provincial Administration (ISPA) which is chaired by the Governor o f Istanbul. The ISPA through IPCU will act with responsibility for overall project management and coordination in close cooperation with the relevant line ministries and Metropolitan and District Municipalities o f Istanbul. Treasury will be the Borrower and financial intermediary for the project. Treasury will allocate the funds from the Loan proceeds to the Special Provincial Administration (ISPA) o f Istanbul. A draft bill authorizing the Council o f Ministers to allocate the Bank's Loan proceeds to ISPA for the implementationof ISMEP project. The IPCU will be authorized to carry out project implementation on behalf o f the ISPA o f Istanbul. The IPCU will be staffed by a Project Director, Deputy Director(s), FMS Manager, Procurement Manager and adequate number of FMS and procurement experts, reporting, evaluation and monitoring expert, technical staff, environmental and social experts andnecessary support staff as well as local and international individual consultants incontract management and supervision when and as needed. The number o f technical staff may be increased in the due course o f the project if and as needed. The MEERPIUhas been supporting the IPCUduringthe project preparation until the IPCU i s fully established and functional. Some o f the MEER PlU staff meeting the required qualifications may be seconded to the IPCU on voluntary basis. MEER loan proceeds will be used for the IPCU staff fees and incremental operating costs until the proceeds of ISMEP Loan i s available. The line ministries will second relevant staff that will cooperate and coordinate implementation activities with the ISPA. Public officers seconded by the ministries will locate at their own premises in Istanbulbut specifically work for the ISMEP project. The PHRD grant, made available for this project, has been used to support the IPCUon technical, financiallaccounting, andprocurement matters. It is expected that establishment o f the core IPCU through an order from the Governor o f Istanbulwill be completed May 10, 2005. All positions for the P C U staff would be advertised byMay IO, 2005 andselected from the eligible qualified applicants byAugust 1,2005. 58 The IPCU staff seconded by the MEERPIUwill be also subject to selectionprocess pursuant to the advertisement inthis respect. The key issues and risks concerning procurement and management for implementation o f the project have been identified and include lack o f experience with the Bank-financed projects. The public servants seconded for the project implementation by ISPA, are recommended to be sent for training organized preferably by I L O at Turin /Italy, according to their needs for fbrther development o f procurement knowledge and qualifications and contract management, The IPCUwill be supported by consultant firms andindividuals for the preparationo fdesigns, biddingdocuments andsupervisiono fworks ifandas necessary. Giventhe fact that the gaps and loopholes existing inthe previous legislation which was subject to the recent CPAR conducted in 2001 were substantially removed by the new Public Procurement Law ( Code 4734 & 4735) effective from January 1, 2003 and assuming that the IPCU will have the necessary capacity, including the qualified procurement staff and supported by the MEERPIUwhich has highlyexperienced staffinBank's procurement assisting the IPCU in the preparation of bidding documents, it is recommended that this project be placed initiallyinmediumrisk category. The risk ratingwill be re-evaluated after one year of loan effectivenessand adjustments madeaccordingly. Duringthe project launch workshop the Bank will organize a two days training program to the IPCU to introduce the Bank's Guidelines and standard bidding documents to be used in the implementationo f the project. C. ProcurementPlan The Borrower, at appraisal, developed a procurement plan for project implementation which provides the basis for the procurement methods. This plan has been agreed on April 18, 2005, and is summarized in Section C. It will also be available in the Project's database and in the Bank's external website. The Procurement Plan will be updated in agreement with the Project Team bi-annually or as required to reflect the actual project implementation needs and improvements ininstitutional capacity. D. Frequencyof ProcurementSupervision Contracts not subject to Bank's prior review will be post reviewed by Bank's supervision missions and/or during regular post-reviews by PAS on sampling basis, i.e. 1 out o f every 5 contracts. The frequency o fprocurement supervision should be every six months. E. Detailsofthe ProcurementArrangementsInvolvingInternationalCompetition 1. Goods,Works, andNon ConsultingServices (a) List of contract packages to beprocuredfollowing ICB and direct contracting: 59 1 2 3 4 5 6 7 8 9 Ref Contract Estimated Procurement P-Q Domestic Review Expected Comments No. (Description) cost Method Preference byBank Bid- (yeslno) prior/ Opening Post) Date 1 Upgradingof 32,670,000 ICB Post Q No Prior Emergency Communication System 2 DisasterManagement 7,000,000 ICB Post Q No Prior Information System 3 Upgrading Emergency 13,700,000 ICB Post Q No Prior Response Capacity 4 Strengthening/ 44,360,000 ICB Post Q N o Prior Reconstructionof Major Hospitals 5 Equipmentand 2,580,000 ICB Post Q No Prior Softwareto Support Municipalities (Group 2) (b) All ICB contracts estimated to cost US$5 million or more for Works and estimatedto cost US$ 500,000 or more for goods, and first NCB works, and NCB Goods contracts, first Shopping Contract and all direct contracting will be subject to prior review by the Bank. 60 2. ConsultingServices (a) List of consulting assignments with short-list o finternational firms. - - 1 2 3 4 5 6 7 Ref Descriptionof Assignment Estimated Selection Review Expected Comments No. cost Method by Bank Proposals (Prior I Submission Post) Date 1 Design and Implementation o f 610,000 QCBS Prior Public Awareness Campaign 2 Preparationo fDesignfor 14,110,000 QCBS Prior StrengtheningReconstruction o f Key Facilities and Supervision of RetrofittingReconstruction - Works 3 R i s k Assessment of Lifelines and 2,450,000 QCBS Prior ~~ Vital Infrastructure 4 RiskAssessment of Selected 2,827,000 QCBS Prior - Cultural Heritage Buildings 5 Enhancing Building Code 460,000 QCBS Prior Enforcement Capacity at Selected District Municipalities (c) Shortlists composed entirely of nationalconsultants:Short lists of consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions o f paragraph: 2.7 o f the Consultant Guidelines. 61 Annex 9: EconomicandFinancialAnalysis TURKEY: SEISMIC RISKMITIGATION-TR Bqckground Turkey carries significant seismic risk since it lies in one o f the most active earthquake and volcano regions in the world. More than 95 percent o f the country's land area is vulnerable to earthquake risk. Devastating large-scale earthquakes can occur anytime where 70 percent o f the country's population live and 75 percent o f industrial facilities are located. Essentially Turkey i s exposed to two types of natural hazards where the earthquakes account for a predominant risk level of 91 percent against the combined risk o f 9 % due to floods, mudslides and landslides. After the 1999 Marmara earthquake, Turkey began establishing a modem decentralized emergency management system pattemed after FEMA inthe USA. The new Agency's progress has been slow and incomplete; raising serious concem that Turkey remains unprepared for a similar catastrophic event. Although some attempts have been made, currently, the country does not have a comprehensive strategy for managing and reducing the risks o f earthquakes and other natural hazards. Proper enforcement of building codes and standards i s one o f the critical challenges for Turkey toward reducing the vulnerability o f the existing low quality building stock. On the positive side, many municipalities have taken the initiative to upgrade the local emergency response system, to conduct microzonation studies, and to initiate important planning tasks. The Istanbulmunicipality prepared a comprehensive master plan, modeled on international best practice that incorporates risk mitigation activities in the urban planning and development process., Within the nation's high-risk context, and in light of the investigations undertaken in the aftermath of the Marmara Earthquake, Istanbul appears to be highly vulnerable because o f its seismic-prone location on the North Anatolian Fault (NAF), and its high population and commercialhdustrial densities. This is the backdrop against which the ISMEP shouldbejudged interms ofitsrelevance andtiming. EstimatedTally of EarthquakeDevastationinIstanbulwithoutthe Project Devastation o f a possible earthquake in Istanbul will have far reaching repercussions and deal a major blow on the country's economy. According to recent assessments, the probability o f a major earthquake affecting Istanbul in the next 30 years is 62% +/-12%, while the likelihood o f such devastation in the next decade i s 32%, +/- 12%. In the absence o f ISMEP, the potential earthquake damages are predicted for four earthquake scenarios developed under the JICA- hnded Seismic Microzonation study. These scenarios were labeled Model A through Model D and developed according to the moment magnitude fiom 6.9 Mw to 7.7 Mw. While model A, with a moment magnitude o f 7.5, is considered the most probable case, Model C with a 7.7 62 moment magnitude represents the worst case scenario. Estimated losses for Models A and C are giveninthe followingtable. Loss and Casualty ModelA a ModelC (most probable case) (worst case) Human casualties Lost lives 73,000 87,000 Severely Injured 120,000 135,000 Building damages Heavily 51,000 59,000 +Moderately 114,000 128,000 +Partly 252,000 300,000 Public Buildings in High 42.8% 48.5% SeismicI ntensi'ty Areas Educational 43.6% 53.1% Health 48.0% 53.0% Security 53.0% 57.2% Governmental 59.4% 69.6% Water Pipeline Damage 1,400 1,600 Points Gas Pipeline Damage Points 11 13 Electric Cable Damage 820 km 1,080 lan Cost Benefit Analysis Methodology There exist a number o f methods for performing a cost benefit analysis o f a disaster with widely varying data requirements and degree o f sophistication. For the most part, estimation o f project costs is easier and straightfonvard. These costs are borne at the beginningof the period and are subject to a greater degree o f certainty. However, there are problems associated with the estimation o f project benefits. First o f all, one does not know in advance if and when a disaster will occur, and at which intensity it will occur. Secondly, one does know in advance how effective the overall mitigation efforts will be in avoiding the possible loses based on vulnerability assessments. Therefore, in large-scale disaster mitigation projects the costs are a sure thing while benefits, which are largely derived fiom avoided losses, are at best probabilistic. Toward measuring project benefits, the usual approach involves micro-economic methods whereby these benefits are quantified by enumerating all possible areas where such benefits could arise, individually estimating them and aggregating the results. Some mitigation projects may have a simple structure. They may focus on exerting efforts in one single year and involve well selected targets, such as constructing a flood dyke before the on-set o f a possible flood. By contrast, for disaster mitigation project involving earthquakes, the setting i s far more complicated, where the principal gain i s saved human lives in addition to avoided property loss. Most of the conventional cost-benefit models heavily rely on the notion o f assigning a monetary value to human life which commands a much greater monetary amount as opposed to property. Although quite appropriate for insurance and actuarial purposes, and intrinsically appealing, this approach provokes controversy because o f disagreements whether a monetary value could be 63 ascribed to human life. Where exhaustive listings o fproject benefits and assignment o f monetary values to human life spared pose practical or moral difficulties, one may adopt a macro approach, especially for large and complex mitigation projects such as ISMEP. Such a macro- economic approach is pertinent for ISMEP, due to problems associated with the reliability and availability o f micro-level data. The below analysis that follows is based on a macro model (neither attributing values to human life nor exhaustively listing all losses and damages) to judge how far the mitigation effort would go. Analytical framing i s based on a simple macro model which strives to arrive at comparable results that would be obtained through detailed micro analyses. Inaddition to the macro approach and methods assigning monetary values to humanlife saved, there are other popular methods for performing a cost-benefit analysis o f disaster mitigation projects. These approaches, which we will not utilize within the context o fISMEP, consist of: 0 The DALY (Disability Adjusted Life Year) method, 0 Cost effectiveness methods, and 0 Micro-economic techniques involving focused cost-benefit analyses o f key project investments or components, such as retrofitting o f hospitals andpublic schools. Innarrativeterms, benefits dueto individual project components canbelaidout as follows: lnents Component PossibleQuantifiableDirectBenefits Remark Component A Significant savings inthe O&M o f There are practical emergency communications and difficulties in underlying equipment. quantifyingbenefits Significant opportunity for enhancing Turkey's national ability to provide immediaterelief effort incase o f other national disasters since equipment and people are moved to affected keas and 7 not restricted to fixedservice stations. Component B Saving lives and reduce number of There are practical injuries difficulties in Saving health care costs quantifying benefits Avoided time loss for business Saving the physical structure of hospitals, schools and other public facilities and valuable equipment. Higher number of disaster victims with access to immediate medical care. Avoided chaos inthe aftermath o f disaster and maintenance o f overall law and order. Component C 0 Offers an opportunity for enforcingthe Difficult to quanti&, buildingcodes, butpotentially offers Makes much focused detailed sinificant economic 64 assessments on critical economic benefits due to sectors to raise public awaieness and increased self help enhance disaster preparedness. k resulting from enhanced awareness and knowledge. Component D Very important training medium for Easy to quantify but managers for business and has limitedbearing development needs on the overall project. Avoided disruptiono fnormal life Highlydifficult to routine i s probably the greatest project quantify ifdirect benefit. methods o f Sustaining crucial economic activity measurements are and fiscal capacity (to collect taxes) in used to estimate the commercial epicentre o f Turkey, benefits. But less and maintaining the momentum o f difficult if indirect growth and stability inthe country. methods (such as Reduced claims from the national macro approach) are insurance fund - D A S K used. The analysis that follows relies on estimating the cross-cutting benefits - rather than individual component or activity benefits - that result from an interaction and interdependence of all the project components. The concept ofprovincial GNP i s used to estimate the damage impact of the earthquake as w e l l as the benefits that would b e due to the mitigation effort resulting from avoided earthquake impact. Regional GNP-Based Analytical Model Below i s a description of the analytical model using macro-economic aggregates. Elements of such macro analysis are also encountered in other Bank-funded operations for similar types of interventions (Nicaragua -NaturalDisaster Vulnerability Disaster Project - 2001). Parameter Symbol Level Unit Remark Probability o f Ofthe order o f about 7.5 at Occurrence o f an Richter's Scale similar to Earthquake in P 2 percent Marmara's (estimate Istanbul providedby Kandilli Observatory) Economic Loss to Percent Local GNP comprises be Suffered in EL 20 o f local damages due to the Case o f an GNP in earthquake as well as growth Earthquake - 2004 potential foregone plus Conservative damages to property Estimate Economic Loss to Percent The most likely estimate be Suffered in EL 31 o f local takes into account the 65 Case of an GNP in privileged economic and Earthquake- 2004 social status ofIstanbul, Most Likely which will amplify the Estimate impact of an earthquake. Project Costs This is the project cost for during c (WB) 400 the 5-year project period Implementation US$ spread over 6 calendar years. Million Project Costs C(G0VT) These are the minimal during incrementalcosts estimated Operational 20 US$ for the operationalperiod of Period Million 25 years to maintain the peryear GovernorshipDisaster ManagementCenter (AYM) inIstanbul. Percent LossMitigationCapacity Capacity and gradually Developmentwill take a long DevelopedOver buildingto 23% time to build, and stabilize at Time at the endof 50% at aroundmid-streamin project year 15. Inother words the implementation. project cannot andwill not mitigate all losses. Mitigated Losses MILO ELweightedby US$ This i s a derived figure LMC Million CashFlow CF Difference US$ This i s aderived figure between Million Benefits and costs Extrapolation of Istanbul Earthquake Disaster Losses The Marmara Earthquake of 1999 provides a basis for extrapolating the level o f the economic losses to be sustained in case o f a possible Istanbul earthquake. In 1999, four provinces were affected - Kocaeli, Yalova, Istanbul and Sakarya. The worst hit province was Kocaeli. It should be remembered that 1999 was not a successful year for the Turkish economy. In fact, a recession was recorded as o f the first quarter inthe year. Hence, not all o f the economic contraction o f the year registeredat the end o f 1999was due to the earthquake, which occurred inAugust 1999. It i s observed that those provinces that were affected by the disaster had a total average rate o f shrinkage o f 12 percent inper capita GNP and 11percent inoverall GNP.Meanwhile the rate o f decline in provincial GNP for other major unaffected cities (Ankara, Adana, Izmir and Bursa), was about 6 percent in per capita and 5 percent for overall GNP. Therefore adjusted Marmara Earthquake impact was estimated to be inthe order o f 5 percent inper capita GNP and 6 percent inoverall GNP (please see the below table). The same percentages are assumed to be applicable inthe case of a possible IstanbulEarthquake for the conservative case. However, Istanbulis the commercial and financial epicentre o f the Turkish economy. Because o f Istanbul's privileged predicted impact o f earthquake - inorder to arrive at the most probable loss scenario. status in the Turkish economy, these conservative estimates were raised - to amplify the 66 A decline in GNP alone is not the sole source o f economic loss because the disaster would also . curtail potential economic growth as well. Potential growth for any given year in Turkey is roughly 4 percent for analytical purposes, which can be doubled for the case o f Istanbul.Another important damage category i s due to the loss o f property, which was roughly equivalent to the income loss inMarmara, as was confirmed by SPO inthe aftermath o f the Marmara Earthquake. Indeed, property loss inthe Marmara Earthquake was estimated at about 10%o f GNP.However, due to the very high concentration o f industry and higher value economic assets in Istanbul, the property loss should be elevated for the case o f Istanbul, possibly reaching 17% o f GNP. The combined impact of the earthquake on the economy i s the sum o f the level o f economic shrinkage, curtailed growth and property loss. These are estimated to be 20% o f GNP for the conservative loss scenario, and 31% o f GNP for the most likely loss scenario. Source: State Instituteof Statistics Computationswere made by the Mission - When these parameters are applied to the case o f Istanbul, it is possible to extrapolate the level o f economic losses to be sustained in case o f an earthquake. The latest GNP for Istanbulis not yet known as SIS has not yet released data for province-bas.ed GNPs. But, this magnitude is estimated at about US$40billion bymakingcomputations (below table). 67 EarthquakeRelated EconomicLoss both in Income and Wealth (MacroApproach) - Provinces(percapita) Percent a 5% 5% EconomicContractiondue to MarmaraEarthquakein the Affected Provinces(in overallGNP terms) Percent b 6% 6% I ForegonePositiveGrowth Potential(% of GNP) (Percent C 1 4% 8% Total EarthquakeImpact on GNP (Income) IPercent II d=b+c 1 10% II 14% PropertyLoss as a Percent of GNP lpercent e l 10% 1~ 17% ~ IEstimated EconomicLoss in Case of Possible IstanbulEarthquake IBillion US$ I 'f'g 1 8.14 I 12.44 Source: Missionestimates It turns out that the loss to be suffered in case o f an earthquake in Istanbul is about US$ 8.14 billion using conservative estimates, and about US$ 12.44 billion based on the most likely loss outcome for an earthquake of similar magnitude as that o fMarmara. These figures may appear to be in stark contrast with many exaggerated figures one may come across in the press or interviews. However, even the conservative loss estimate i s sufficiently severe to economically justifythe proposedISMEP at aborderline ERRo f 11%. Economic Analysis A financial analysis is not pertinent in the case o f ISMEP since the base data comes in income terms and encompassesthe entire population as opposed to selected individuals or areas. Probability weighted annual economic loss in Istanbul due to an earthquake is expected to be around US$ 163 million using a conservative loss scenario and US$249 million based upon the most likely loss outcome. FEMA calls this concept annualized damages and losses and it does not apply to them a growth element. The same principles were adhered to inthis analysis as well. Mitigationmust be centered on reducing this amount o f US$ 249 million per year to the highest degree possible. The project's benefits are generated to the same extent as one can reduce this potential loss. However, current loss mitigation capacity i s very limited and it can only be gradually built and sustained over a period o f time, which i s assumed to span some 30 years. The highest mitigation level to be reached by the project itself is assumed to be around 25 percent at the end of the implementation period. However, the project is expected to attain some 50 percent of loss mitigation capacity around mid-stream during its planninghorizon at the end o f Year 15, at which level it will stabilize and register no hrther improvement. This means that regardless o f what we do, some loses will be unavoidable. This i s a realistic assumption because complete obliteration o f loss can take a long time, and will be intimately relatedwith how fast the existing building stock in Istanbul (primary source of hazard) can be replaced with earthquake-resistant ones. 68 It is further assumed that ISMEPwill largely play a catalytic role inattracting further investment into the risk mitigation effort, and that the Government will continue investing in disaster mitigation after the project closes. Therefore, the Government will probably spend some US$ 500 millioninthe next25 years to sustain the momentum initiatedby ISMEP. Under the above scenarios, the estimated ERR will be 11% for the conservative case, and 19% for the most likely case for the proposed project, with a C/B ratio o f about 1.11 (conservative case) and 1.69 (most likely loss scenario). If the loss level i s allowed to rise, this would only increase the ERR. For instance, using the most likely scenario assumptions, for a probability o f earthquake occurrence fixed at 3 percent, rather than 2 percent, the ERR will be 29 percent (with B/C o f2.53), and for a probability o f4 percent the ERRwould be 41percent (with C/B o f 3.37). This i s due to the fact that at higher levels o f loss there will be more room for mitigation effort and hence generation o f mitigation benefits. The computational details are found in the table below. Commentaryon Loss MitigationCapacity Loss mitigation capacity is a concept that cannot be easily quantified. The project i s expected to be rather slow on impacting this critical parameter. Thus, the analysis assumes that only some 25% mitigation capacities can be attained in 5 years o f project implementation. However, ifthis capacity i s allowed to improve at an accelerated pace, which i s a distinct possibility, the project ERRand C/B will certainly improve. For instance, ifit takes us halfthe numbero fyears to reach the assumed cap on the loss mitigation capacity o f 50%, the ERR would abruptly jump to 33% with a C/B ratio o f2.24. This would be possible ifwe assumed a percentage patterno f 0, 10, 20, 30, 35, 40, 45 and 50 for the loss mitigation capacity over the first 8 years. It is evident that, in addition to the overall level o f disaster-related loss for Istanbul, the most importantparameter o f the analysis is this critical capacity which ISMEP is trying to promote and enhance inan assured albeit partial manner. Caveatsaboutthe Macro Analysis The foregoing analysis is premisedon the expectationthat economic recovery after the incidence o f a possible earthquake'in Istanbulwill not take much time. This was the case for the Marmara Earthquakewhere ensuing recovery was speedy. This may not hold true for the case o f Istanbul which in itself will amplify the economic losses and hamper the recovery as well as ongoing hazard mitigation efforts. Also, the effects o f the earthquake on the poor and SMEs will be much more severe than it will be on other groups. It i s the poor who live inunsafe buildings and it is the poor who cannot afford safe housing, and some SMEs may never recover the impact o f an earthquake because o f lost markets, as was evidenced in the case o f Marmara. These are the aspects not treated in the above analysis due to the macro emphasis which conceals micro-level details. 69 1 Table of Probabilities for the Macro-EconomicModel Occurrences , Earthquakein any Given Year 2% I 12.44 I 248.80 (*) Same as Annualized Damages and Losses 70 Annex 10: SafeguardPolicyIssues TURKEY: SEISMIC RISKMITIGATION-TR Context andEnvironmentalAssessment Category Component B o f the ISMEP project will support seismic retrofitting works for hospitals, schools and other criticallpriority public buildings already in existence. The use o f innovative, minimally intrusive technical retrofitting solutions will be promoted. Only on a very limited , scale will demolition and replacement (in the same location) be necessary for structures that do not qualify for retrofitting. Both types o f interventions have environmental impacts that are minor to moderate in scale, and very localized in extent. Impacts can be readily defined, mitigated and monitored. Project activities will take place in areas which do have cultural heritage values protected under local and national laws and practices. New construction (if required) may take place inurban areas with exiting populations and uses/values which must be taken into account. Retrofitting and new construction has been successfully carried out in the Istanbul area inthe recent past (mostly with Turkish funding) without significant impacts. Potential physical impacts are associated with renovation o f buildingsfor retrofitting, in addition to replacement o f some structures as needed. Emissions o f particulate matteddust to the air, sediment to sewerage systems (or nonpoint source runoff), noise pollution, and proper disposal o f demolition debris or wastes present in the buildings will need to be mitigated and monitored. Special precautions for retrofitting hospitals and other facilities which remain in use may be needed; for example to protect patients remaining in hospitals or students remaining in dormitories. In cases of retrofitting work on certain public buildings in Istanbul, the safeguard policy on Cultural Property may be triggered, as potentially some o f the publicly used facilities, important for emergency response activities, may turn out to either have culturalhistorical value, be in very close proximity to such properties, or may be located in an overall historic area. Irreversible impacts are not anticipated given local ordinances and practices regarding cultural heritage protection. Unlike the previous MEER project, where large housing complexes were constructed, buildings (if willbefewinnumber,andgenerallywithinthecurrentfoundationarea. Retrofitting needed) of buildings is generally the approach with lowest potential impact on the environment. Replacement o f structures within the existing footprint (Le. those too risky or expensive to retrofit) i s also the best alternative assuming cultural property issues are sufficiently addressed. Component A does not directly pose environmental risks. Given the above factors, the overall ISMEP was rated as Category B for Environmental Assessment (OPBP 4.01) at the PCN stage, and this was confirmed as appropriate during pre-appraisal. With the possibility o f project activities affecting Cultural Property, OPN 11.03 (being revised as OP 4.11) was considered triggered at the PCN-stage, and this condition was also confirmed during pre-appraisal. Since ISMEP will finance numerous retrofitting activities (with limited replacement) o f comparable scope, a framework Environmental Management Plan was set as the principal requirement for due diligence for bothEA and Cultural Property. 71 , Key Elementsof the EnvironmentalManagementPlan Draft and final versions o f the EMP were prepared prior to and following pre-appraisal, and reflecting consultations, site visits, experience with previous Bank projects, and experience with retrofitting projects carried out by Turkish authorities. The environmental protection regulatory framework was analyzed, and institutional arrangements for environmental management specified. Recent rapid changes in Turkish laws and regulations to more closely adhere to the principles o f the environmental acquis o f the European Union were taken into account to the extent possible. - The EMP includes a summary plan for mitigation o f environmental risks and monitoring. Responsibilities o f all the key parties are described including: (i)the project implementationunit who will prepare bidding documents with appropriate measures for due diligence to ensure consistent attention to the environment by bidders, (ii) contractors carrying out civil works, (iii) supervisory engineers responsible for tracking compliance with mitigation and monitoring plans, and (iv) environmental and public health officials who are responsible for protecting public interests. Parallel measure for ensuring attention to the identification, protection, mitigation and monitoring o frisks to cultural property are also identified. The EMP recognizes the fact that under Turkish law, retrofitting o f buildings does not trigger a formal Environmental Impact Assessment (EIA) under either Annex Ior 11. In a comparable view, retrofitting does not trigger an obligatory assessment under Annex Io f the Environmental Assessment directive o f the European Commission (EC). New buildingconstruction might fall inAnnex I1o fthe Turkishlaw, and similarly Annex 11o fthe EC directive, whereby EL4falls to the discretion o f public officials based on site specific conditions. This is compatible with the World Bank Category B rating and further supports the approach o f the framework EMP prepared for ISMEP. Turkish limits for air emissions, noise, etc. were examined (and compared to Bank guidelines) and referenced as suggested limits in the EMP to be incorporated as legal and appropriate in biddingdocuments andmonitoring plans. Given the fact that retrofitting and limitedreplacement o f buildings represents a low to moderate risk to the environment, it i s expected that inclusion and compliance of best practices (such as dust control by tarps and water spray to protect from wind damage) will be the normal approach rather thanroutine monitoring o f emissions per se, as mightbethe casewith higherrisk activities (e.g. power stations or wastewater treatment plants). Nevertheless, special attention (e.g. tighter standards or specialized monitoring) maybeplaced in bidding documents to ensure, for example that: (i) patients in hospitals (or students in resident buildings)are protected from noise, vibration, dust and the loss o f electricity and air conditioning ifthey occupy sections of buildingsbeingretrofitted, (ii)medical wastes and radioactive materials from X-ray machines or similar devices are removed safely in advance of civil works, with medical wastes adhering to strict local ordinances, (iii)asbestos or other hazardous materials, while not expected to be problematic, are identified and safe measures taken for removal and disposal, and (iv) removal o f construction debris to licenseddump sites i s assured. 72 The EMP includes considerable information to advise the IPCU, contractor and supervisory personnel regarding the comprehensive approach to cultural property protection under national and municipal law and institutions inthe Istanbul area. Appropriate references will be included inbiddingdocuments andcontracts will sufficeto comply with WorldBankprocedures. According to the team's assessment, the Borrower (both at the national level and specific to Istanbul) has sufficient capacity to implement the measures included in the EMP and RPF. Institution strengthening is not neededunder ISMEP inthis regard. Considerationsfor LandAcquisitionandInvoluntaryResettlement The project will not entail land acquisition or resettlement. All retrofitting or reconstruction o f public buildings will take place on existing sites. Depending on the particular building and the nature o f the work being done, the retrofitting may temporarily affect buildingoperations and/or access to the facility by clients or the public. To ensure that staff can work in a safe environment, and access to the services offered by the facility, each feasibility study will include a social mitigation plan. The planwill describe steps to be taken to maintain a suitable working environment on site or at an alternative site, and to ensure that clients and the public are informed about the temporary measuresto ensure uninterrupted access to service. Supervisionof EnvironmentalandSocial Safeguards World Bank staff will coordinate Bank supervision o f safeguards during implementation with supervisory contractors and local health, environment and cultural heritage staff; facilitated through the IPCU. IPCU will request that routine reports o f project compliance with laws and ordinances o f Turkey and the Istanbul municipality (or complaints from citizens or others) be shared with them on a timely basis and be taken into account in overall project tracking and response. 73 Annex 11: ProjectPreparationandSupervision TURKEY: SEISMIC RISKMITIGATION-TR Planned Actual PCNreview 08/07/2003 Initial PID to PIC 09/25/2003 Initial ISDS to PIC 10/03/2003 Appraisal 2/28/2005 Negotiations 4/18/2005 Board/RVP approval 05/26/2005 Planneddate of effectiveness 08/10/2005 Planneddate o fmid-termreview 05/30/2008 Plannedclosing date 09/30/2010 Key institutions responsible for preparation o fthe project: Governorship o f Istanbul Bank staff and consultants who worked on the project included: Name Title Unit Wael Zakout Task Team Leader ECSSD IbrahimSirer Senior Procurement Specialist ECSPS Jolanta Kryspin-Watson Institutional Specialist Consultant Christoph Pusch Residential ProgramManager SASEI Richard Andrews Emergency Management Consultant ExpertandManager of Component A Eric Peterson Urban Specialist and Manager Consultant o f Component B DilekBarlas Senior Counsel LEGEC Stan Peabody Lead Social Scientist ECSSD RonHoffer Lead Environmental Scientist ECSSD Seda Aroymak Senior Financial Management ECSPS Specialist AndrinaAmbrose Senior Finance Officer LOAGl Rohit Mehta Senior Finance Officer LOAGl Dara Lengkong Financial Specialist SASEI GurhanOzdora Senior Operations ECSPF OfficerEinancial Specialist Suha Satana Economist Consultant Katelijn Van den Berg Economist ECSSD Richard Lacroix Residential Program Advisor Consultant Koshie Michel Program Assistant ECSSD Bank funds expended to date on project preparation: 74 1. Bankresources: $549,791 2. Trust funds: $210,000 3. Total: $759,791 A Japan PHRD grant for US$927,500 (TF052686) was received and is being used for project preparation by recipient to contract consultant services for the following preparation activities: (a) feasibility study for upgrading o f an emergency communication system; (b) feasibility study for preliminary design for seismic riskmitigationefforts on public assets and lifelines; (c) social assessment; (d) environmental assessment; (d) establishment o f financial management system; (e) project management and coordination. The grant is executed by the Project Implementation Unit. A Japan Consultant Trust Fund for US$210,000 (TF030390) was received and was used for support o f the Bank in regard to project parts related to the retrofitting, building code enforcement andurbanplanning. EstimatedApproval and Supervision costs: 1. Remaining coststo approval: US$77,000 2. Estimated annual supervision cost: US$150,000 75 Annex 12: Documents in the ProjectFile TURKEY: SEISMIC RISKMITIGATION-TR "Study on Disaster PreventiodMitigation Basic Plan in Istanbul including Seismic , Microzonation in the Republic of Turkey"; Japan International Cooperation Agency (JICA), Istanbul MetropolitanMunicipality (IMM)December2002; "Earthquake Masterplan for Istanbul"; developed for: Metropolitan Municipality of Istanbul, Planning and Construction Directorate, Geotechnical and Earthquake Investigation Department; by Bogaziqi University, IstanbulTechnical University, Middle East Technical University, Yildiz Technical University; IstanbulJuly 7,2003 [English Version] "Observations on EarthquakeRisk and Engineering Practices in Istanbul, Turkey"; Peter Yanev; November 2004 "Assessment o f Stakeholders Approach to Seismic Vulnerability and Housing Stock StrengtheningInIstanbul"; Deniz Baharoglu; October 2003 "Assessments of Design and Preparation of the ISMEP Project. Final Report"; Pacific ConsultantsInternational; December2004 "Study on Building Codes Enforcement inTurkey"; PROTA; February2005 76 Annex 13: Statementof Loansand Credits TURKEY: SEISMIC RISKMITIGATION-TR Differencebetween expected and actual OriginalAmount in US%Millions disbursements ProjectID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm.Rev'd PO82801 2004 EXF' FIN2 303.10 0.00 0.00 0.00 0.00 290.07 -13.03 0.00 PO72480 2004 RENEWENERGY 202.03 0.00 0.00 0.00 0.00 202.03 0.00 0.00 PO59872 2003 BASICED2 (APL#2) 300.00 0.00 0.00 0.00 0.00 292.96 181.12 0.00 PO70286 2002 ARP 600.00 0.00 0.00 0.00 0.00 398.79 345.45 0.00 PO74408 2002 SRMP 500.00 0.00 0.00 0.00 0.00 375.04 248.68 0.00 PO69894 2001 PRIV SOC SUPPRT 250.00 0.00 0.00 0.00 0.00 122.34 110.17 0.00 PO44175 2000 BIODNMTRL RES MGMT (GEF) 0.00 0.00 0.00 8.19 0.00 5.51 3.52 0.00 PO68368 2000 MARMARA EARTHQUAKEEMG 505.00 0.00 0.00 0.00 0.00 300.13 300.07 79.37 RECON PO09073 1999 INDUSTRIALTECH 155.00 0.00 0.00 0.00 0.00 47.48 47.48 0.00 PO09072 1998 PRIV OF IRRIGATION 20.00 0.00 0.00 0.00 0.00 0.96 0.96 0.96 PO48852 1998 NATL TRNSM GRID 270.00 0.00 0.00 0.00 27.79 173.11 200.90 -1.42 PO08985 1998 CESMEWS & SEWER 13.10 0.00 0.00 0.00 2.70 5.19 7.89 1.41 PO09076 1995 HEALTH2 150.00 0.00 0.00 0.00 20.17 23.33 50.57 50.57 Total: 3,268.23 0.00 0.00 8.19 50.66 2,236.94 1,483.78 130.89 TURKEY STATEMENT OF IFC's Held and Disbursed Portfolio InMillionsofUS Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2001 Bilgi 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00 1994196197 Borcelik 10.00 3.21 0.00 0.00 10.00 3.21 0.00 0.00 2004 BorusanHolding 30.00 0.00 10.00 0.00 30.00 0.00 10.00 0.00 1995196 CBS BoyaKimya 0.00 0.65 0.00 0.00 0.00 0.65 0.00 0.00 1994 CB5 Holding 4.00 0.00 0.00 0.00 4.00 0.00 0.00 0.00 1996101 CBS Printas 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 1990102 Conrad 3.50 0.00 0.00 0.00 3.50 0.00 0.00 0.00 1998 Demir Leasing 0.56 0.00 0.00 0.00 0.56 0.00 0.00 0.00 2002 EKS 12.86 0.00 0.00 0.00 12.86 0.00 0.00 0.00 1995 Entek 20.50 0.00 0.00 13.25 20.50 0.00 0.00 13.25 1998 FinansLeasing 0.56 0.00 0.00 0.00 0.56 0.00 0.00 0.00 1999 Finansbank 4.44 0.00 0.00 0.00 4.44 0.00 0.00 0.00 1998 GarantiLeasing 0.56 0.00 0.00 0.00 0.56 0.00 0.00 0.00 1999 GumussuyuKap 4.00 0.00 3.43 0.00 4.00 0.00 3.43 0.00 2001 Gunkol 6.37 0.00 6.37 0.00 6.37 0.00 6.37 0.00 77 1998 IndoramaIplik 5.63 0.00 0.00 0.00 5.63 0.00 0.00 0.00 1998100/02 IpekPaper 16.98 0.00 0.00 0.00 16.98 0.00 0.00 0.00 1990 Kepez Elektrik 4.05 0.00 0.00 0.00 4.05 0.00 0.00 0.00 1988190 Kiris 10.53 0.00 0.00 0.00 10.53 0.00 0.00 0.00 1991 Kula 5.05 0.00 0.00 0.00 5.05 0.00 0.00 0.00 2003 MESA Group 11.oo 0.00 0.00 0.00 5.50 0.00 0.00 0.00 2002 Milli Re 50.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1998102 ModernKarton 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00 1991 NASCO 10.18 0.00 0.00 3.55 10.18 0.00 0.00 3.55 2004 Oyak Bank 50.00 0.00 0.00 0.00 50.00 0.00 0.00 0.00 2002 Pasabahce 7.50 0.00 0.00 0.00 7.50 0.00 0.00 0.00 1998 Pinar ET 5.50 0.00 0.00 0.00 5.50 0.00 0.00 0.00 2000 Pinar SUT 15.20 0.00 0.00 0.00 11.74 0.00 0.00 0.00 1999 SAKoSa 19.22 0.00 0.00 12.25 19.22 0.00 0.00 12.25 1990 Silkar Turim 2.43 0.00 0.00 2.77 2.43 0.00 0.00 2.77 200U03 Sise Ve Cam 65.37 0.00 0.00 40.86 65.37 0.00 0.00 40.86 1998102 soktas 3.OO 0.00 0.00 0.00 3.OO 0.00 0.00 0.00 1999 TEB Finansal 1.67 0.00 0.00 0.00 I.67 0.00 0.00 0.00 1982/83/89/91/96199 Trakya Cam 0.00 0.61 0.00 0.00 0.00 0.61 0.00 0.00 1999102 Turk EkonBank 17.78 0.00 15.00 0.00 17.78 0.00 15.00 0.00 2001 Turkish PEF 0.00 10.00 0.00 0.00 0.00 1.37 0.00 0.00 1999 UnyeCement 12.86 0.00 0.00 0.00 12.86 0.00 0.00 0.00 1999 Uzel 9.48 0.00 0.00 5.69 9.48 0.00 0.00 5.69 1998 Viking 8.41 0.00 0.00 0.00 8.41 0.00 0.00 0.00 1995 Yalova Acrylic 2.50 0.00 0.00 1.33 2.50 0.00 0.00 1.33 ALease 0.56 0.00 0.00 0.00 0.56 0.00 0.00 0.00 2001/03 Akbank 2.5.00 0.00 0.00 0.00 25.00 0.00 0.00 0.00 1998 AltematifBank 4.00 0.00 0.00 0.00 1.oo 0.00 0.00 0.00 1996/01/03 Arcelik 18.19 0.00 0.00 0.00 18.19 0.00 0.00 0.00 2000 Arcelik LG Klima 13.12 0.00 0.00 3.33 13.12 0.00 0.00 3.33 1997102 Assan 25.00 0.00 0.00 0.00 25.00 0.00 0.00 0.00 2002 Atilim 6.50 0.00 0.00 0.00 5.49 0.00 0.00 0.00 2000 Banvit 13.33 5.00 b.00 0.00 13.33 5.00 0.00 0.00 BayindirbankAS 4.50 0.00 0.00 0.00 4.50 0.00 0.00 0.00 2002 Beko 30.74 0.00 0.00 30.74 30.74 0.00 0.00 30.74 Totalportfilio: 592.63 19.48 34.80 113.77 529.66 10.85 34.80 113.77 ADDrOValS PendingCommitment FY Approval Company Loan Eguity Quasi Partic. 2001 Akbank 0.03 0.00 0.00 0.00 2004 Akbank BLoanInc 0.00 0.00 0.00 0.02 2003 CayeliExpan2 0.02 0.00 0.00 0.00 2004 MeteksanSistem 0.01 0.00 0.00 0.00 2002 Milli Reasurans 0.00 0.01 0.00 0.00 2004 OPET Petrolculuk 0.03 0.00 0.00 0.05 2003 SisecamExp. 0.00 0.00 0.00 0.01 2002 TEB III 0.00 0.00 0.00 0.05 78 2004 Turkish Leasing 0.04 0.00 0.00 0.00 Total pendingcommibnent: 0.13 0.01 0.00 0.13 79 Annex 14: Countryat a Glance TURKEY: SEISMIC RISKMITIGATION-TR Europe B Lower- POVERTY and SOCIAL Central mlddie- Turkey Asia income Development diamond' ~ 2002 Population,mid-year(millions) 69.6 476 2,4n GNI percapita (Atlas method, US$) Lifeexpectancy 2500 2,so 1390 I GNI (Atlas method, US$ billions) 174.0 1030 3,352 Average annual growth, 1996.02 1 i Population (%) 17 0.1 10 Laborforce (%) 2.2 0.4 I2 . M o s t recent estimate (latest year available, 1996-02) Poverty (%of populationbelownationalpovertyline) Urbanpopulation(%oftotalpopulation) 67 63 49 Lifeexpectancyat birth (pars) 70 69 69 Infantmortality(per 10Wllvebirths) 33 25 30 ,I 1 Child malnutrition (%ofchildren under5) d n Accessto impmvedwtersource ~ Access to an improvedwdtersource (%ofpopulation) 82 91 81 Iliteracy(%ofpopulation age E+) 12 3 0 Gmss primaryenrollment (%ofschool-age population) D1 Q2 in ' -Turkey Male D5 D3 m Lower-middle-incomegroup Female 96 01 ID ~ ~ KEY ECONOMIC RATiOS and LONG-TERM TRENDS 1982 1992 2001 2002 I Economic ratios. GDP (US$ billions) 64.4 158.9 125.2 132.6 Gross domestic investmentlGDP U.0 23.9 6.8 213 Exports of goods andservices/GDP 119 14.4 33.7 28.8 i Trade Gross domestic savings/GDP D.8 20.9 8.2 B.6 Gross nationalsavings1GDP 13.5 24.4 20.7 20.7 Current account balance/GDP -15 -0.6 2.3 -0.8 Merest paynents1GDP 18 2.0 3.6 3.4 Total debt/GDP 30.6 35.6 78.4 719 Total debt service/exports 29.4 32.1 44.0 49.0 Present value of debt/GDP Presentvalue of debvexports Indebtedness ~ 1982-92 1992-02 2001 2002 2002-06 (averageannualgrowth) GDP 5.1 2.8 -7.5 7.8 4.7 . -Turkey GDP percapita 2.7 10 -9.0 6.1 3.6 I ___Lower-middle-incomegroup > T STRUCTURE o f the ECONOMY I 1982 1992 2001 2002 I Growth of investment and GDP (%) (%of GDP) Agriculture 22.7 15.3 P.8 D.0 50 7 Industry 25.1 29.9 26.1 25.4 Manufacturing U.7 8.9 15.6 6.O Services 522 64.7 611 616 Private consumption 76.3 66.2 66.6 66.3 Generalgovernment consumption 9.9 P.9 14.2 +4.O Imports of goodsandservices 15.0 77.3 313 30.5 I 1982-92 1992-02 2001 2002 ' Growth of exports and imports (averageannualgroMh) ( O h ) Agriculture 14 11 -6.0 7.6 Industry 7 2 2.6 -7.2 5.7 Manufacturing 7 2 3.3 -8.0 8 2 Services 4 2 3.1 -6.2 7.O Private consumption 4.3 2.2 -9.2 2.6 Generalgovernment consumption 3.4 4.4 -8.5 5A Gross domestic investment 5.0 11 -42.0 35.7 I Imports of goods and services 8.8 8.3 -24.8 15.7 -Exports -Inports 80 Turkev PRICES and GOVERNMENT FINANCE 1982 1992 2001 2002 I Inflation (ye) Domestic prices I (??change) Consumer prices 70.1 53.9 44.8 hplicit GDP deflator 282 63.7 54.8 43.5 Government finance [%of GDP, Includescurrent grants) Current revenue B.o - 29.3 28.2 Current budget balance -13 -14.7 -4.7 Overallsurplusldeficit 4 . 7 -20.9 -P.3 W Pdeflator -CPI TRADE 1982 1992 2001 2002 1 (US$ millions) Export and import levels (US$ mill.) Totahports (fob) 5.890 14,891 34,373 39.827 l60,WOT Textiles 1145 5,603 n344 Z066 Processedagricultural products 1571 2,293 t876 1705 Manufactums 4,655 DA40 28,695 32,673 Total imports (cif) 8,843 22.871 41399 51270 Food P 3 1398 848 un Fueland energy 3,943 3,903 8,36 8,955 I Capital goods 2214 7,970 7344 8,949 Export price index(S95=OOj 95 76 75 i 96 97 98 98 w hport price index(895=OO) 90 81 80 ,1 IExports e InportsO1 O2 Terms of trade (895=WO) 0 5 94 93 BALANCE o f P A Y M E N T S 11 1982 1992 2001 2002 `Current account balance t o GDP (OG (US$ millions) i Eqorts of goods and services 7 8 8 23,343 50,403 54.608 " T i-nports of goods and services 9,592 26,706 45.86 55,095 Resource balance -1774 -3,363 4687 -487 Net income -1455 -1670 -5,000 -4,549 Net current transfers 2277 4,059 3,603 3,496 Current account balance -952 -974 3,390 -1540 Financingitems (net) 1PO 2,458 -6,3# 1326 Changes in net reserves - 6 6 -1484 P,924 2 P Memo: Reserves includinggold (US$ millions) 2,027 15252 30.82 38,057 Conversion rate [DEC,locaVUSb) 62.9 6.8813 1228,367 1509,471 EXTERNAL DEBT and RESOURCE FLOWS I 1982 1992 2001 2002 (US$ millions) 1 Composition of 2002 debt (US$ mill.) Total debt outstandingand disbursed 8 , 7 6 56654 It3806 t31407 IBRD 1962 5664 4;107 5.367 A 5,367 IDA 8 7. 148 95 89 iI B 69 Total debt service 2,966 9,086 24,623 28,632 21503 IBRD 209 1207 723 708 IDA 3 6 7 7 ~ Compositionof net resourceflows D lO400 Official grants 307 505 0 334 Official creditors 762 -509 74 797 I E6,433 Private creditors 146 3,504 -2,187 3811 Foreign direct investment 55 779 2,769 852 I Portfolio equity 0 -184 -4.611 -180 I F World Bank program Commitments 648 686 2200 1650 A IBRD - ~ Disbursements 500 286 1537 1031 1B IDA -- D olher rmltilaterd I ~ F Rivate 81 MAP SECTION