Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Report No. 2247-UNI FEDERAL REPUBLIC OF NIGERIA STAFF APPRAISAL REPORT KADUNA WATER SUPPLY PROJECT April 1979 Regional Projects Department Western Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY AND EQUIVALENTS Currency Unit = Naira (N) N 1.000 = US $1.54 US $1.00 = N 0.649 UNITS OF MEASUREMENT mm = millimeter (1 millimeter = 0.039 inches) cm = centimeter (1 centimeter = 0.39 inches) m = meter (1 meter = 3.28 feet) km = kilometer (1 kilometer = 0.62 miles) km2 = square kilometer (1 km2 = 247.1 acres = 100 hectares) ha = hectare (1 hectare = 10,000 square meters 3 3 = 2.47 acres) m3 = cubic meter (1 m = 264.2 U.S. gallons = 35.3 cubic feet) ABBREVIATIONS AND ACRONYMlS FGN = Federal Government of Nigeria KCDB Kaduna Capital Development Board KSG Kaduna State Government KSWB Kaduna State Water Board LBIN Louis Berger Incorporated Nigeria, Consulting Engineers NEPA = National Electric Power Authority NRBDA Niger River Basin Development Authority UNDP United Nations Development Program WAP Ward, Ashcroft Parkman (Nigeria), Consulting Engineers WHO = World Health Organization FMAWR Federal Ministry of Agriculture and Water Resources, FISCAL YEAR Fiscal year ends March 31 for Kaduna State Water Board FOR OFFICIAL USE ONLY NIGERIA - KADUNA STATE KADUNA WATER SUPPLY PROJECT STAFF APPRAISAL REPORT TABLE OF CONTENTS Page I. THE WATER SUPPLY AND WASTE DISPOSAL SECTOR Background ............................ * ........................... 1 National Aspects of Sector Developments ................. .. 1 International Drinking Water and Sanitation Decade ........ 2 Sector Organization in Kaduna State ....................... 2 Water Resources in Kaduna State .......................... 3 Water Supply in Kaduna State and Service Levels ........... 4 Water Sector Developments ..... . ............ . .................. . 5 Wastewater Disposal in Kaduna State Service Levels ........ 6 II. THE PROJECT AREA I,ocation ........................................................ 7 Population and Regional Development Prospects . ............ 7 Residential Patterns .*................... O...*........................ . 8 Existing Water Supply Facilities and Standards of Service.. 9 Operation and Maintenance ..... .................. . . . .. . . 10 Service to the Urban Poor 10..................... lO Future Water Demand ..* ... .. ............................... 12 Existing Waste Disposal Systems and Standards of Service .. 15 Future Developments in Waste Disposal and Public Health ... 17 Management and Operations Improvement Plan ............... . 19 III. THE PROJECT Genesis ................................................ *........ 18 Objectives ........... ..................................... 18 Technological Alternatives and Service Standards .......... 20 Description of Project Components ......................... 20 Cost Estimates ....................................... *.............. 21 Project Financing . ................................. ....... 24 Implementation ....... ..................................... 24 Kaduna South Waterworks .... ............................... 28 Water Resources Aspects ........ ........................... 28 Environmental and Health Aspects .......................... 30 Procurement .................................... 30 Disbursements ......................................... 31 This report is based on the findings of a Bank appraisal mission which visited Nigeria in May-June, 1978, comprising Messrs. Buky (Sanitary Engineer) and Prenoveau (Deputy Division Chief) and Messrs. Grover (Consulting Sanitary Engineer) and Hutchins (Consulting Financial Analyst). 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. Page IV. ECONOIMIC AND SOCIAL ANALYSIS Project Benefits ................................................... 33 Least Cost Solution ... ............ ... *.................... 33 Pricing Considerations . .............. ............. . ....... 34 Internal Economic Rate of Return .......................... 35 Impact on the Poverty Group ............................... 36 V. THE BENEFICIARY Lending Arrangements .......... ...... . . *.................... 38 Organization .......................... .................... 38 Training ........... .................. ..................... 41 Management Systems .......... ..... . ............................o.. 44 Reporting and Monitoring . ..... ..o..... .. . .. ... ... ........ 44 VI. FINANCIAL ANALYSIS Past and Present Financial Performance .................... 45 Tariffs .....o...... o ...........-......... 46 Financing Strategy ... ..... . .. . . . . .. .. ........ 47 F'inancing Plan ....................o...o.....o..o.... ... 47 Future Financial Performance ............. ... ............... 49 VII. CONCLUSIONS AND RECOMMENDATIONS Project Merit and Risks ..o.o.... ....o.... . .. ..... .... .... ... .. 50 Agreements Reached .. ... ......... ..... . . ... .. ........ 50 Recommendation ... oo... ............... . . * * . * * * .** * .... * ... 52 CHARTS 2.1 Kaduna Urban Area - Population Projections ........... ... . 13 2.2 Kaduna District System - Projected Capacity, Production & Sales ..................................... *... 14 3.1 Implementation Schedule ... o .................. ..... 25 5.1 KSWB - Present Organization ...... ooo ............o.. 39 TABLES 3.1 Summary Cost Estimates ..... ... ..... . ... .. ... . . 22 3.2 Estimated Schedule of Loan Disbursements .......o.. .......... 32 ANNEXES 1. Outline of KSWB's Emergency Works Program 2. Training Component - Cost Estimates 3. Proposed Monitoring Indicators 4. Financial Tables 5. List of Documents in Project File 6. Management and Operations Improvement Plan 7. Comparative Cost of Water Supply in Some West African Countries 8. Major Assumptions Used in Financial Projections MAPS 1. Kaduna State ... ..... ..... IBRD 13938 2. Kaduna Urban Area .. IBRD 13939 I. THE WATER SUPPLY AND WASTE DISPOSAL SECTOR Background 1.01 Nigeria, with a 1978 population of approximately 80 million, is the most populous nation in Africa. Kaduna State, formerly North Central State covers an area of 69,500 km or 7.6% of the total area of Nigeria (see Map 13938). The estimated 1978 population of Kaduna State was just over 6 million. The last official census prepared in 1963 indicates that Kaduna was the fourth most populous of today's states. There are probably more people in Kaduna State than in some 36 of the 54 countries of Africa. 1.02 The Bank has not previously made a loan in the water supply and waste disposal sector in Nigeria and has not yet carried out a sector survey but such a survey is scheduled to start in 1979 under the WHO/IBRD cooperative program. National Aspects of Sector Developments 1.03 Under Nigeria's federal system of government, individual states have the primary responsibility for the water supply and waste disposal sector. Nigeria's Federal Ministry of Agriculture and Water Resources (FMAWR) is responsible for the national and international aspects of water resources allocation and for approving large water projects for which federal government financing is requested. In 1976 eleven river basin authorities were created by Federal decree to plan and develop surface water resources on a national basis throughout Nigeria. The most important of these, as far as Kaduna State is concerned, is the Niger River Basin Development Authority (NRBDA), with headquarters at Ilorin in Kwara State. In July, 1977 this authority engaged a consortium of consultants 1/ to carry out a prefeasibility study for the Kaduna River Basin, the largest tributary in Nigeria to the Niger River. The draft report, made available in mid-1978, contained a useful compilation and analysis of existing information. In due course NRBDA will become respon- sible for the obtaining and recording of basic hydrogeological, hydrological and meteorological data and for the allocation of water resources for develop- ment schemes but at this stage it is not yet able to fully discharge these responsibilities. 1.04 Nigeria's plans for economic development are outlined in National Development Plans, the third of which covers the period 1975-1980. Each state has its own plan for the same period which is a component of the national plan. During the current plan period, the Federal Government set the following policy objectives regarding urban water supply: 1/ The consortium comprises Nigerian Agricultural Promotions Company Ltd., associated with Ward, Ashcroft and Parkman (Nigeria) (WAP) and Booker Africultural International Ltd. Sections of the report dealing with water resources were prepared with the assistance of Parkman Consultants Ltd. (UK); the Institute of Hydrology (UK); and Water Surveys (Nigeria) Ltd. -2- (1) To ensure that all communities of 20,000 or more people are provided with pipe-borne water by 1980; and (2) To provide 115 liters (25 gallons) per head per day in all urban centers. However, to date sector developments have taken place largely in an uncoor- dinated manner as the state agencies proceed more or less independently following mostly local objectives and priorities. International Drinking Water and Sanitation Decade 1.05 In March 1977, the United Nations Water Conference held in Mar del Plata, Argentina, declared the period 1980-1990 the International Drinking Water and Sanitation Decade. The Plan of Action adopted by the conference provides guidelines for governments and international organizations for action to be taken to achieve the provision of safe water supply and sani- tation facilities for all by the year 1990. The period 1978-80 has been specified for the assessment of existing situations and the preparation of national plans and programs for achieving these goals. The World Health Organization's (WHO) Thirtieth World Health Assembly resolved to collaborate with member countries during this initial stage and one of the actions suggested was a rapid assessment of ongoing programs and their possible ex- pansion. WHO staff and resources are made available to assist interested countries and the Bank is associated with this effort through the IBRD/WHO Cooperative Program (CP). The rapid assessment exercise has been underway in Nigeria with the assistance of WHO staff since July 1978 and the resulting reports are expected in April 1979. This exercise, together with a full sector survey planned to begin in 1979 are expected to increase sector knowl- edge and development activities significantly. Sector Organization in Kaduna State 1.06 Kaduna State consists of 14 local government divisions including the Kaduna Capital Territory. These local governments are basically respon- sible for services of a local nature (town planning; local roads and drainage; disposal of solid wastes; town markets; etc.) but most lack the financial and human resources to be effective. The principal public authority is the Kaduna State Government (KSG) which is centered in Kaduna and is responsible to the Military Administrator. 1.07 In Kaduna State the main water resources agency is the Kaduna State Water Board (KSWB), whose basic function is the provision of water for domestic, industrial and agricultural purposes throughout the state. Before X KSWB was created in 1971 public water supply was the responsibility of the Ministry of Works in Kaduna State Government (KSG). KSWB's organization and activities are discussed in more detail in paras 5.02-5.09. Kaduna's Ministry of Economic Development is concerned with the allocation of financial resources for KSWB activities. The FMAWR is responsible for the planning and development of irrigation projects. The Ministry of Health monitors the quality of water provided by KSWB to its consumers. -3- 1.08 Until very recently there was no agency in Kaduna State with specific responsibility for wastewater disposal. The Ministry of Health is marginally involved (it has plans to build 150 public toilets throughout the state), as are the local authorities who are responsible for some sani- tation measures. In the capital of Kaduna, the Kaduna Capital Development Board (KCDB), which is basically a planning authority (para. 2.03), has now also been made responsible for sewerage in addition to its responsibilities for the maintenance of roads and drains and for refuse collection and dis- posal. KCDB was designated by the government to be the executing agency for the ongoing Kaduna Sewerage and Drainage Project of the United Nations Development Programme (UNDP). Under this two-year project, which commenced in October, 1977, engineering consultants 1/ prepared a Master Plan and proposed immediate measures dealing with wastewater disposal, storm drainage and refuse disposal in Kaduna. Initial draft reports by these consultants were available at the time of appraisal. KCDB set up an advisory committee (which first met in May, 1978) of experts from various government departments and KSWB which reviewed the findings of the study as work progressed. 1.09 In the past there has been virtually no cooperation between KSWB and the authorities responsible for planning and developing infrastructure for Kaduna. KSWB had not been aware of revised estimates of present popula- tion or projections of future population and land development which were prepared by the UNDP consultants for KCDB. On the other hand, KCDB had not been kept informed of KSWB plans for future water supply facilities. It is clear that cooperation between these agencies needs to be greatly improved if proper and rational development of the water supply and waste disposal facilities is to take place in Kaduna. Water Resources in Kaduna State 1.10 Kaduna State, extending from 90 to 130 north of the equator, has its northern border adjacent to the Sahel zone below the Sahara. The climate changes in a southward direction through semi-arid in the savannah areas of the center of the state to the sub-humid regions in the south. Average annual rainfall ranges from less than 700 mm in the northeast by the Niger border to more than 1600 mm in the southeast, adjacent to Plateau State, as shown on Map 13938. Most rainfall occurs in the months of May through September with virtually none in the winter. Although the rainfall increases from north to south in the state the population settlement pattern is almost the reverse. This seems to be due to a combination of factors, of which the most important may be the tse-tse fly infestation in the southern part of Kaduna State. However in recent years there has been a noticeable population movement southward, no doubt due to the devastating drought which struck the Sahel region earlier in this decade. Whether such population shifts will be permanent remains to be seen. 1.11 Runoff from the central (and major) portion of the state flows into the Kaduna River, which runs generally westward across the state and 1/ Two firms of German consulting engineers: Dr. G. Holfelder Ltd. (Freiburg) in cooperation with G.K.W. Ltd. (Mannheim). The UNDP project deals with both Kano and Kaduna, with a separate agency involved in Kano. -4- eventually empties into the Niger River near the town of Mureji. The river is perennial, with flows at the town of Kaduna averaging 166 m /second. The highest flows occur in the months June through October, following the rains, and the low flows in the three months February through April, are of the order 0.6 m3/second or about 1% of flows in the wettest three months. 1.12 Smaller seasonal streams in the northern portion of Kaduna State flow either west into the Sokoto-Rima basin or north to the Lake Chad basin. The Mada River, a minor tributary to the Benue River, has its origins in the humid southeast of the state. Although groundwater resources have not yet been explored in detail, they are generally limited to low yielding shallow wells except for some fissure aquifers in the crystalline bedrock. Prospects for high yield wells, as would be required for irrigation or larger scale water supply, are bleak. Water Supply in Kaduna State and Service Levels Urban Supplies 1.13 Detailed and reliable information about present service levels for water supply in Kaduna State is difficult to obtain. Excluding the Kaduna urban area, the Kaduna state's population is in the order of 5.5 million. Of these less than 1.0 million have access to water supplied by KSWB and even these systems (particularly the rural ones) do not operate reliably. KSWB has not published any reports and estimates about individual systems had to be obtained from individual operating staff. In addition to the Kaduna urban system discussed subsequently (paras 2.09 to 2.11), KSWB presently operates nine urban water supply systems throughout the state, (see Map 13938). Approximate characteristics of each system follow: System Estimated Estimated % Capacity Total Served by Location Source (m /day) Population System Zaria Reservoir 27,300 200,000 50 Katsina Reservoir 25,000 100,000 100 Dutsin-Ma Reservoir 4,500 15,000 100 Funtua Reservoir 4,500 50,000 100 Daura Boreholes 450 25,000 100 Birnin Gwari Reservoir 1,140 6,000 100 Malumfashi Boreholes 450 25,000 40 Kafanchan Spring 1,370 35,000 50 Manchok Spring 680 2,000 100 458,000 These systems (except Manchok) essentially represent the eight Districts of KSWB outside Kaduna. With the exception of Zaria and Katsina the exist- ing facilities in these districts are very small, mostly consisting of the single urban systems listed above. Most of the supply in these Districts is by public standpipes providing essentially free water to the people. Private connections are limited to industrial and public consumers. -5- Rural Supplies 1.14 KSWB also became responsible in the recent past for rural water supply, taking over these responsibilities from the Rural Development Board. A separate unit of KSWB carries out the work in this field. Most existing rural schemes are in the northern part of the state where people and animals suffered extensively during the previous Sahel drought. There are some 48 small dams or rain tanks, generally built very simply, without any design, and most require desilting and enlargement. There are also a total of 529 drilled boreholes, of which 485 are equipped with Mono hand pumps and 44 with motorized pumps. However, most of these pumps are broken and the majority of the people have to rely on traditional sources, mostly hand-dug wells which frequently dry up, causing long treks to alternative sources. There is no reliable estimate of the people served by these rural systems, but the number is probably less than 500,000. Water Sector Developments 1.15 The Kaduna State 1975-80 Development Plan lists fourteen specific water supply projects for implementation including the towns of Kaduna, Zaria, and Katsina. Costs are estimated to total N 88.3 million (US$136 million) representing 16.2% of the state's total planned expenditures of N 546 million (US$841 million) in eighteen sectors, with only the education sector allocated more funds. All water supply projects in the plan were to be carried out by KSWB but by mid-1978 the rate of expenditure was apparently less than required to commit all budgeted funds within the present plan period. It is clear that KSWB places great emphasis on developing supplies for the population in the secondary urban centers and the rural areas through- out the state as roughly half the proposed expenditures in the current plan are for schemes outside the capital city of Kaduna. 1.16. In order to improve its sectoral planning, KSWB (with Bank encour- agement) engaged consultants in 1977 to prepare a master plan for water supply for most of the state. MRT Consulting Engineers Limited 1/ completed their report in June, 1978. It covers some 88% of the area of the state, excluding the following two areas where comparable exercises were already completed or underway: (a) Katsina Emirate in the north of Kaduna State for which in 1973 a German consultant (Wakuti Consulting Engineers) had submitted a master plan for the development of the areas water resources, and (b) the Kaduna capital area for which another firm of con- sultants, WAP, continue to plan water supply developments. 1/ A consortium of UK firms, composing: Sir M. Macdonald & Partners; Mott, Hay & Anderson International Ltd; Rendell, Palmer & Tritton; and John Taylor & Sons. -6- The state wide master plan, excluding Katsina Emirate and Kaduna calls for capital expenditures totalling N 131 million (US$202 million) for new water supplies in the period 1980-1985. 1.17 Although the next development plan for Kaduna State is not yet prepared, the estimated cost of KSWB's plans for specific water supply projects during its fiscal years 1979-1985 may be summarized as follows: N million $ million Kaduna Capital Area 129.6 199.6 Other urban and rural areas 146.0 224.8 Total expenditures 275.6 424.4 Projected expenditures for Kaduna are discussed in paragraph 3.10. The estimates for the other areas were provided by KSWB's planning staff as representing the proposed developments in the state outside Kaduna. The successful execution of this program will depend on the required financing being made available by KSG and on KSWB's ability to complete the necessary design work for the various projects (some of these are in progress). The improvements in service levels in Kaduna State resulting from these projects cannot be determined until a more advanced state of preparation is reached. Successful state-wide water supply developments will depend on the improve- ment and possible reorganization of KSWB's management of the Districts out- side Kaduna, which are not capable of properly operating and maintaining existing systems, let alone implementing new ones (para. 5.06). Wastewater Disposal in Kaduna State - Service Levels 1.18 Wastewater disposal is rudimentary throughout Kaduna State. Apart from the systems servicing a few institutions, mostly in Kaduna City (para. 2.25), there are no piped sewerage systems in the State. Town popu- lations mostly rely on latrines, or septic tanks, but many people simply defecate or urinate in the open. Not surprisingly the level of public health is low, particularly in the high density urban areas where such practices are prevalent. 1.19 Sewerage and drainage is one of the sectors with the smallest budget allocation in the State's current Development Plan, i.e. a mere N 13.2 million (US$20.3 million) - 15% of the budget for water supply - of which very little has so far been spent. The primary problem is that the agency responsible for sewerage and drainage on a state-wide basis has only recently become active. There are no sector objectives or policies. The Ministry of Health and Social Welfare and the Ministry of Local Government and Community Development both have marginal roles in this sector. The disposal of various types of wastes is generally regarded as a local government responsibility (para. 1.06) but this service has received limited attention so far, except in Kaduna City, where a thorough UNDP-financed study of waste disposal will be completed in the second half of 1979 (para. 1.08). -7- II. THE PROJECT AREA Location 2.01 Kaduna, the capital of Kaduna State and site of the proposed project, is a relatively modern city located on the Kaduna River, some 600 km northeast of Lagos, Nigeria's federal capital. (See Map 13938.) 2.02 The Kaduna urban area does not have official boundaries. His- torically, city development has concentrated within the Capital Territory, an administrative division (one of fourteen in the state), extending from the airport in the north to the industrial area on the south side of the river. (See Map 13939.) This Capital Territory covers about 127 sq. km and is surrounded by the local government divisions of Zaria on the north and Kachia on the south. For practical purposes the Kaduna urban area now extends considerably beyond the Capital Territory boundary, with development tending to follow the highways. The Kaduna urban area, served by the Kaduna District section of KSWB, effectively consists of the contiguous urban area centered on the Kaduna Capital Territory. 2.03 A comprehensive town plan prepared for Kaduna in 1967 by a British consultant, Max Lock and Partners, has guided recent developments but not all proposals have been fully implemented. The entity currently responsible for land use planning is the Kaduna Capital Development Board (KCDB) which was created by government edict in 1971. The planning area for which KCDB is responsible was extended in 1975 from the Kaduna Capital Territory to the circular area within a 40 km radius of Kaduna. However land use controls are formally vested in the local government districts and the State Ministry of Lands and Surveys, with KCDB only responsible for approving develop- ments on the land in accordance with the town plans. Implementation of the urban development plans has been somewhat haphazard, although improving. A revised town plan is under preparation by KCDB and the Ministry of Lands and Surveys. Population and Regional Development Prospects 2.04 Three types of development have occurred in Kaduna. From its origin some sixty years ago the town has been a government capital as well as a garrison town, with associated administrative functions. Within the past twenty years Kaduna has also become a major industrial area. Its location and history cause Kaduna to be, along with Kano 1/, one of the two dominant centers in Northern Nigeria. However, it is estimated that, at present, only 15% of the state's population is urban. This means that Kaduna is likely to be a focus of continuing growth as further urbanization occurs in Nigeria. 2.05 The population has grown more or less steadily from its founding, but there is some uncertainty about its present size. Public estimates of the present population prepared by the Kaduna State Ministry of Economic Development indicate that Kaduna's 1977 population would have been 386,600 1/ Capital of Kano State. - 8- if growth since the 1963 census had been constant at 7% per year. Most local officials however estimate that Kaduna's present population is considerably higher. Engineering consultants working for UNDP in Kaduna (para. 1.08) have prepared an independent estimate of the population at the end of 1977 on the basis of land use analyses including recent air photos and a sample survey. Their estimate, which has been carefully prepared and is acknowledged by local officials to be realistic, suggests a total population of about 598,000 including some 70,000 personnel at military bases. Using this estimate, population growth has been updated as follows: Year 1931 1952 1963 1977 Total Population (000) 10 39 150 598 Average Annual Growth Rate 6.7% 13.0% 10.0% On the basis of available figures, the mission prepared a range of possible future population forecasts for Kaduna, depicted on Chart 2-1. 2.06 The infrastructure to support industrialization and urban growth in Kaduna is apparently as well developed as in any other city in Nigeria, despite acknowledged deficiencies in housing, electricity, water and sanitation. Future urban growth will obviously be affected by the extent to which the basic services are provided, so that in turn the provision of necessary infrastructure is likely to contribute to additional growth. A factor which could influence the development of Kaduna in the longer term is the proposed creation of a new federal capital near Abuja, some 170 km to the south. However, with the planned schedule of this development no effects are likely to be felt in Kaduna for several years. 2.07 The future spatial development of the town will depend primarily on the future application of land use controls and on transportation develop- ments. Most industries are located on the south side of the river, including the new oil refinery, and this concentration is likely to persist. Growth to the north is restricted by the airport and military camps. Residential growth is likely to continue to infill the present urban area and overflow to the west. When the several planned bridges over the Kaduna River are built there could be significant expansion of the town to the south side of the river. Residential Patterns 2.08 The central areas of Kaduna consist mostly of large plots accommo- dating civil servants and other relatively high income residents. Accommoda- tion for low income residents is generally laid out in the Kaduna Capital Territory in plots of standard size, but outside the Capital Territory, uncontrolled development has also taken place and plots are not organized. The UNDP consultants estimate that some 64% of Kaduna's total population lives in high density areas, averaging 350 people/ha. The plots are mostly compounds, which contain separate buildings (almost all single story) housing several households. A comprehensive housing survey was recently undertaken in the high density areas of Kaduna. Although full results are not yet available one sample of 36 compounds in four different high density areas found an average - 9- of 4.9 households and 17 persons per compound. This pattern of individual compounds accommodating large numbers of low income residents is the pre- dominant form of residential settlement in Kaduna. Existing Water Supply Facilities and Standards of Service 2.09 The first public water supply was constructed in 1929 in Kaduna South to serve the railway, workshops and the military bases as well as domestic consumers. Water was pumped from the Kaduna River and provided with classical treatment (coagulation, sedimentation, filtration and chlori- nation) in the nearby plant before being pumped into a limited distribution system, including a line serving the residential area north of the river. The south waterwSrks (Map 13939) were expanded in stages to their present capa- city of 31,800 m /day. This plant is in very poor condition today but cannot be taken out of service because its output is continuously required due to the current shortage in overall production capacity. 2.10 The Kaduna 3North waterworks began operating in 1964. Its present capacity is 45,500 m /day and the plant is currently being expanded by KSWB under its Emergency Works Program (details in para. 2.21 and Annex 1). 2.11 The two treatment plants supply a transmission and distribution system which includes almost 300 km of pipes. There are four separate pressure zones in the distribution system of Kaduna north and one in Kaduna south. Until the early 1970's KSWB's two treatment plants were able to meet all demands from the distribution system, which probably served about 70% to 80% of the population. In recent years, however, both the domestic and the industrial demands have accelerated and KSWB has not augmented the system to keep pace with these demands. Consequently there have been increasing water shortages in Kaduna in the past two to three years. 2.12 Present patterns of water consumption have not been thoroughly analyzed, making it extremely difficult to discuss standards of service. KSWB has records of some 9,000 private connections, all nominally metered, but consumption data are deficient. Industrial consumers (primarily the textile mills) apparently accounted for some 50% of water sold by KSWB in 1976/77. Almost all of these industries are located in Kaduna south but KSWB's available water supply is so limited that one large textile mill pumps most of its water directly from the river to meet its requirement. KSWB re- cently authorized construction of another independent water supply, also from the river, by the oil refinery currently being built because the public supply cannot meet its demands. All consumers and KSWB suffer frequently from interruptions in the electricity supplied by NEPA but significant early improvements are anticipated in this situation under NEPA's current develop- ment program. 2.13 The vast majority of KSWB's private connections are for domestic consumers. In addition to the 9,000 registered connections (increasing by some 700 per year) there are 95 public standpipes. There are also an esti- mated 3000 additional connections to the system which have been made privately and unofficially by residents. - 10 - 2.14 The exact number of people served by KSWB is difficult to establish. The UNDP study estimates that some 22% of the present population of 600,000 live on military bases, in civilian institutions or in low density housing areas, which are generally occupied by higher income residents. A further 14% live in medium density areas. Apart from frequent interruptions of supply, this 36% of Kaduna's population appears to be relatively well served. Operation and Maintenance 2.15 The standard of maintenance of plant, equipment and structures is generally very poor. Treatment plant and equipment are improperly operated and ill maintained. Laboratory control is minimal and as a result, filters 9 have to be washed with undue frequency. Several pumps are broken down and new equipment has not been properly installed. The cause of this unsatisfactory situation is largely inadequate supervision. The new management of KSWB has already taken steps to provide more dynamic and effective operating and maintenance personnel. As part of its Management and Operations Improvement Plan (MOIP) KSWB will carry out a comprehensive rehabilitation of the existing Kaduna North Water Works after consultation with the Bank regarding its pro- posals. Service to the Urban Poor 2.16 Reliable data are not available to identify the urban poverty group in Kaduna. Generally speaking, the low income residents live in the high density residential areas, which are estimated to accommodate some 64% of Kaduna's total population (para. 2.08). These areas, including Kawo Sabon Gari, Tudun Nupawa, Tudun Wada, Abakpa, Makera, Kakuri and Nassarawa (see Map 13939) receive poor service from KSWB. Many areas have no distribution systems at all and others have only a skeletal network, with some private connections and a few public standpipes. This situation encourages the residents to independently arrange for private and unauthorized connec- tions, frequently involving considerable lengths of small diameter pipes. 2.17 Distribution system deficiencies in the low income areas are due to several factors: (a) much residential growth has occurred in peripheral areas and KSWB has been reluctant to expand its distribution system in recent years since there were already supply shortages. No major extensions of the water supply system to high density areas have taken place since 1975, despite the substantial growth which occurred in these areas; (b) in some areas (e.g. Nassarawa) the lack of formally organized plots makes it very difficult for KSWB to lay distribution pipes; and (c) the residents of poorly served areas have not been able to enunciate their demands clearly or to bring political pressure to support their requests for improved services. - 11 - 2.18 In 1975 KSWB carried out a water usage survey which found that only 53% of the population living in high density areas were adequately served by private connections or public standpipes. The situation has probably deter- iorated since then, particularly in the newer areas. A 1978 pilot housing survey in four of the older high density areas (Tudun Nupawa, Kano, Kakuri and Abakpa) found that 72% of the residents had access to piped water through private connections (of which about half were for compounds) or from public standpipes. Residents unable to obtain water directly from the KSWB system are forced to rely on shallow wells (most of which are polluted) or water carriers who transport buckets of water from more distant parts of the dis- tribution system, at relatively high prices. It is estimated that the number of people who presently lack proper access to public water supply facilities in Kaduna is of the order of 200,000, or roughly one third of the total population. Most of these people are in the high density areas inhabited predominately by low income residents. 2.19 On the average day in 1977-78 KSWB produced 68,100 m of water. With physical losses estimated at 20% of production (a reasonable estimate) the per capita consumption for the total population would apparently average 91 liters daily. Excluding industrial consumers which use 50% of the avail- able water, the actual average per capita consumption would amount to about 45 liters daily for the total population or somewhat more for those actually served by KSWB. These relatively low water consumption figures are one indication of low standards of service, as is the unreliability of the supply caused by a shortage of production capacity and frequent breakdowns due mostly to electric power failures. 2.20 Another deficiency concerns water quality. In part this is due to increasing pollution of the Kaduna River, so that in low flow seasons the inflow at the downstream south works of KSWB is mostly wastewater and the imperfections of the treatment process result in periodic contamination which has, in the past, been confirmed by analysis of samples from the dis- tribution system. Furthermore, the interruptions in supply cause pressure reductions in the distribution system which permit the infiltration of con- taminated surface and groundwater where pipes are damaged or leaking. 2.21 KSWB is already proceeding with an emergency works program which is intended to provide additional supplies of water through the construction and expansion of the following facilities: (i) additional treatment capacity of 50,900 m /day at the existing treatment plants (45,500 at North and 5,400 at South); (ii) additional pumping capacity at the north treatment works and in the transmission and distribution system; and (iii) installation of some 17 km of transmission and dis- tribution lines plus an elevated storage reservoir. - 12- This emergency works program, estimated to cost a total of N 12.6 million (US$19.4 million) in 1978 prices (excluding price contingencies), is described in detail in Annex 1 and is expected to increase KSWB source capacity by 65% by 1981. The Bank has not been asked to assist in financing these works, procurement for which commenced before appraisal and therefore these works do not form part of the project. The civil engineering works for the emergency program are being carried out by KSWB's own work force (work started in October 1978). A special project management unit has been set up within KSWB with exclusive responsibility for these works. Future Water Demand 2.22 Since Kaduna's present population and water consumption patterns are not known accurately, projections of future demand for services are necessarily uncertain. Nevertheless it is clear that there is already a large unsatisfied demand for water and that the continuing rapid growth of Kaduna will require much more water in future. 2.23 Population forecasts for Kaduna prepared by the mission, based on the present population estimates of the UNDP consultants, are shown on Chart 2.1 and can be summarized as follows: Population in Thousands 1980 1990 2000 High Projection 836 2,109 4,511 Medium Projection 762 1,473 2,233 Low Projection 667 936 1,259 In the medium projection, on which subsequent demand estimates are based, the population growth rate reduces gradually from 8.6% in 1978 to 7.0% in 1985 and eventually 3.0% in the year 2000. On this basis Kaduna's present population of 600,000 would double by 1987 and triple by 1995. 2.24 Future water requirements have been estimated for various categories (based on housing densities) of domestic consumers as follows: High - 270 liters per capita per day (lpcd), Medium - 125 lpcd, Low - 70 lpcd and Public Standpipe users - 40 lpcd. Although actual consumption at present averages only 45 lpcd (para 2.19) the calculated average demand is 111 lpcd (assuming full supply to all). This is expected to increase to about 122 in 20 years because of assumed improvements in the standard of living. Industrial demand, prepared on the basis of projections by the UNDP consultants, is expected to grow less rapidly than the population, accounting for roughly 30% of consump- tion in future years (compared to an estimated 50% in the recent past). In the near term, water sales by KSWB will be limited by available supplies and, in the intermediate term, by weaknesses in the distribution system. Projec- tions of future capacity, production and sales are shown on Chart 2.2 and further explained in the project file. These projections indicate that KSWB water sales in Kaduna should double within four years and double again five years later. The Table below summarizes the Projected future average/peak daily water demand and production/service capabilities in Kaduna. - 13 - KADUNA URBEAN AREA POPULATION_' PROJEECTI,OL` AN4?lUAL GROWTH 10'. RATES CHART 2.1 4 ! 2% - X - = = = a -5000000s .= - v- i- ! -4'000,000 2000000 J ~~~ I"'-AI -2.0~c 4-~~~~~ ~~~~~~~~~~~~~~~~~~~~~~4 180001002 _ ~ ~ _ _ _ _ _ _ _ __ _ _ _ 4 700 000 NO.-= .. ... 1. POIPLA 10..'LN IN LAST oFriciAL!.SU nF 19C3 wI,s 149 ,900. 2. PO!'ULA'IJC0'; 1'1'0.!!:CTIIO:'S BY APPRA>ISAL MIlSSION, '.ASF:) ON ISTUVIF. 01 r T.TI0N IS IJ.1)!A OF 59S,2± 0 IN 1977 1975 19 CO8 ISIN19192TS. _ _ _ _ _ _YEA - 14 - , . w . . , _ ~- Chart 2.2 KSWB -KADUNA DISTRICT SYSTEM PROJECTED CAPACITY, RODUCTION SALES JECT * 75,000 as/DAYJ 450.. PRODUCTION C PACITY 400 - .ON PEAK DAY 400£ m E PANSIONYP ,OOooo / DAY J .. 350. STAGE 3I EXPANBbON . 3 75,00 D meZ/OAY J - #4 >v_. 3. 0 ' _ _ _ _ _ _ .. 0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1 E250. STAGE I EXPANSION : e ___ ATr NOtRTW rATME. o PLAN1; 150000/Y .m.'A 'AVERAGE DAILY P ODUCTION IN TWO P1 A5ES a00° - _ _ . _ _,_ *4 1.50 4AI SALES- .| EME.GrI.I I . AVERAGE NAL AE WORKS AT Ill ? , lNJRTN PLANT 4 Inoo 445, 001,,1/f,_A' 4 -. 100~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0 WORS .A NOTE .** . PACKAGE PLANT AT KADNA SOUrT Supplies will be constrained 50 _______ L+5.400 4'n/DAY until new sources and distri- bution facilities become | rEXISTING CAPACITY (SOLrTr operational. | PLUS NORTI WORKS) I 1 OTAL 77300 rn'/DAY 1975 1986 1985 1990 1995 - 15 - 1980 1985 1990 1995 3 ----------000 m /day---------- Demand Forecast Average Daily 133 185 256 326 Peak Daily 153 213 294 375 Production/Service Capacity 1/ 128 246 321 396 Total Population (000) 762 1,096 1,473 1,872 % Population Served 68 2/ 85 87 90 1/ Assumes Kaduna South Works taken out of service by 1985. 2/ Due to inadequacies of the distribution system. Existing Waste Disposal Systems and Standards of Service 2.25 The lateritic soils which predominate in Kaduna are basically tight soils which make the disposal of wastewater difficult. In low density residential areas, wastewater is disposed of by means of septic tanks which require periodic emptying, not always practiced. Pit latrines and/or night- soil collection have been used historically in the high density areas but these also require routine maintenance and this service is usually deficient. Plot layouts in such areas provide a "sanitary lane", a few feet wide between the plots, to provide access for nightsoil collection, but such lanes are in many cases little more than open, nearly stagnant ditches. Waterborne sewerage in Kaduna is restricted to civilian and military institutions and modern housing estates which have independent sewerage systems. Each of these small schemes has its own sewage treatment plant but none of the 18 plants inspected by the UNDP consultants was fully operational in 1977/78 and during negotiations, the KSG indicated that pressure is to be brought to bear on the owners to restore the operation of these plants to improve the effluents. All effluents, whether treated or not eventually flow by open ditches and drains through Kaduna into the river, mostly upstream of the intake to the south water treatment plant. 2.26 Estimates of the population served by the various methods of wastewater disposal were prepared in 1967 by town planners and in 1977 by the UNDP consultants, with results as follows: - 16 - % of Population System Served 1967 1977 Pit latrines 33 41 Bucket latrines 43 16 Septic tanks 9 34 Piped sewerage 15 9 100 100 During this ten-year period the population almost tripled, from about 200,000 to 600,000. Bucket latrines were formerly emptied and the excreta eventually disposed of in compost pits on the western edge of Kaduna, with property owners paying annual charges which partially covered the costs of this ser- vice. However, in recent years operation of this system has virtually ceased to function. The reported substantial increase in the use of septic tanks needs to be confirmed since this method of wastewater disposal is only effec- tive in the low density areas of Kaduna; this increase may, in fact, reflect growing reliance on even ineffective septic tanks, and pit latrines, because no practical alternative exists. It is expected that a clearer picture will emerge with the completion of the UNDP master plan studies. 2.27 Large water-using industries in Kaduna south, particularly the textile factories and brewery, discharge their wastes without treatment -and these flow in open drains through populated areas into the Kaduna River, with an oxygen demand equivalent to the sewage of about 300,000 people. These discharges, containing dyes, acids and alkalis, occasionally exceed the natural flow in the Kaduna River and have reportedly caused massive fish kills in the past. 2.28 The consequences of the poor standards of wastewater disposal are obvious. Most drains carry noxious wastes which grossly pollute the river as well as causing odor and other aesthetic problems throughout the city. Farmers and gardeners use polluted water from the drains for irriga- tion of crops which are eaten locally, with associated health hazards. The high density residential areas, where drainage is frequently poor, are con- taminated by pools of filth and open drains full of excrement and other domestic wastes. 2.29 Health statistics are sparse and cannot readily be used to document the problems caused by poor sanitation. However according to the public health authorities, mortality records for 1976 from the Kaduna General Hospital indicate that the proportion of deaths caused by infective parasitic disease is very high (34%), specially for children under four years old, whose deaths account for 80% of mortality attributed to parasitic diseases. The low standards of hygiene no doubt contribute to this situation. - 17 - Future Developments in Waste Disposal and Public Health 2.30 On completion of the UNDP financed Master Plan Studies, Kaduna City will have a comprehensive planning document for the long-term develop- ment of its present rudimentary and inadequate waste disposal services (paras. 1.18 and 1.19). The implementation of this program will require fairly lengthy preparation, securing of financing and the strengthening of the implementing authority, KCDB. However, as part of the Master Plan an Immediate Measures Program is being prepared by the consultants, proposing limited, but manageable, high priority measures which appear to offer quick and substantial benefits in eliminating or, at least, reducing public health hazards in critical areas of Kaduna. In the first instance, the KSG intends to use its own resources to execute immediate measures concentrating on improving drainage and solid waste disposal facilities as first priority. KSG have agreed to keep the Bank informed on the progress of these and subsequent works for improving sanitation in Kaduna city. 2.31 As noted in para. 2.29, low standards of hygiene presently contrib- ute to a number of diseases, especially those of parasitic origin. Adequate supplies of water, even when coupled with improved sanitation facilities, may not greatly improve this situation unless the population is aware of the personal measures to be taken to break the chain of infection. During nego- tiations, KSG agreed to intensify its public health information campaign and to execute a sanitation improvement program in Kaduna city. - 18 - III. THE PROJECT Genesis 3.01 Nigeria originally sought Bank support for a water supply project in Kaduna in 1974. Following two preparation missions in 1974, a project was first appraised in April, 1975. Thereafter the Bank advised the Nigerian authorities of basic conditions for the proposed loan and requested Govern- ment confirmation that Bank assistance was still required. The management of KSWB which was changed late in 1975 introduced such substantial changes in the original project that the resulting major revisions in project docu- mentation were not available until early in 1978, after several visits to Kaduna by Bank staff. The present project was appraised in May/June, 1978. The chronology of the project's development is outlined in the project file. 3.02 For many years KSWB has employed the engineering consultants Ward, Ashcroft & Parkman (Nigeria) (WAP) to assist in project planning and design. Following the appraisal of the original project in 1975, KSWB engaged addi- tional consultants to address issues which had been raised during that appraisal. A consortium of British consultants, MRT Consulting Engineering Ltd., completed a master plan in 1978 for water supplies for the entire Kaduna State, except for Kaduna itself and the region around Katsina in the north where the situation had already been analyzed. An American firm, Louis Berger Incorporated Nigeria (LBIN), was engaged in 1977 to examine water quality problems caused for Kaduna by pollution of the Kaduna River (with particular reference to the utilization of the Kaduna South Work) and to analyze the existing water distribution system in Kaduna and prepare a master plan for its enlargement. Both activities were completed in December 1978. Available reports from the various consultants are listed in the project file. 3.03 The Bank engaged two sets of consultants to participate in the appraisal of the project. In April/May, 1978 Messrs. Lawrence Cutler and Ike Enyobi and Ms. Ijeoma Ohaeri, all of Concept Ecodesign International, worked in Kaduna to identify the urban poor and the features of their water supply. In May/June 1978, two consultants, Mr. Brian Grover (Sanitary Engineer) and Mr. David Hutchins (Financial Analyst) completed the appraisal. Finally, Messrs. Jozsef Buky (Sanitary Engineer) and J.A.C. Guy Prenoveau (Deputy Division Chief) of the Bank participated in the closing sessions of the appraisal in Kaduna and in the preparation of this report. Objectives 3.04 The first project objective is to improve and expand the water supply system so that adequate supplies of safe water are provided. Ideally the distribution system should be extended to serve 100% of the population but this is not feasible within the short term, since a considerable backlog of work must be done to satisfy suppressed demands (approximately one third - 19 - of the population is not currently served by KSWB) and major efforts are required to cope with anticipated growth (the population will probably double by 1987). To meet this objective in the project area, KSWB will have to: (a) eliminate by 1982, the production constraints causing supply shortages; (b) extend the distribution system so that at least 85% of the total population are served by the network by the end of the physical execution of the project in 1983. This will mean providing water to an estimated 800,000 people by 1983 compared to roughly 400,000 people in 1977; and (c) improve KSWB operating standards during the project period so that all connected consumers can expect to receive uninterrupted supplies of safe water by end 1983 at the latest. 3.05 Reported 1977/78 water sales in the project area represented only 54% of water produced and covered only some 9000 connections, there being an estimated 3000 additional unregistered and unbilled connections. The aim is to reduce unaccounted-for water to not more than 25% of production and to identify and regularize at least 90% of the unregistered connections during the project period. By the end of 1983 KSWB is projected to have a total of more than 18,000 metered connections. The second objective is to improve KSWB's operating and financial performance. A program of actions to be taken by KSWB for this purpose has been included in a "Management and Operations Improvement Plan" (MOIP) (see para 3.06 and Annex 6). Financial objectives are detailed in Chapter 6. Management and Operations Improvement Plan (MOIP) 3.06 In order for the project components listed in para 3.09 to be effective and properly integrated, it is necessary for KSWB to take complemen- tary action in various areas to improve its management and operations. These several activities, of which some are covenanted and others are understandings reached during negotiations, are fully listed in Annex 6. They include, among other matters: (i) KSWB taking specific actions to strengthen its management and organization to ensure efficient project implementation, operation of its facilities and improvement of the services rendered to its consumers within Kaduna and the extension of these principles to Zaria and Funtua and then in accor- dance with a programme to be agreed for other districts; (ii) KSWB submitting to the Bank, not later than July 1, 1979, a comprehensive plan and implementation schedule for the mechanical, electrical and structural rehabilitation of its Kaduna North water works. The program to be implemented by December 1980; and - 20 - (iii) KSG will actively support these actions and assist KSWB in the coordination of these actions with other Authorities. Technological Alternatives and Service Standards 3.07 Groundwater resources are so limited that the only practical source for expanding the existing supply is the Kaduna River which flows through the town. The water is turbid and heavily polluted but the conventional treatment process already used in two existing plants is appropriate. For topographical reasons all water supplied must be pumped. The question of how much elevated storage is appropriate for a given level of supply reliability is discussed in para 4.06. 3.08 KSWB's present policy is "private connections for all consumers", implying relatively large per capita water usage, but this policy needs to be reconsidered when the detailed design for the distribution system extensions is prepared. If the standard of service is to be related to basic needs and the standards of sanitation and wastewater disposal, increasing reliance on public standpipes may be more appropriate in low income areas. Decisions on these standards will be taken by KSWB, and reviewed by the Bank, in the light of further analysis by the consultants working on the water supply system and by those of KCDB working on the wastewater study. These studies will also attempt to define design concepts to optimize the health benefits which should accrue to the population from the project. KSWB will follow a policy to provide water to meet the basic needs of all residents of the Kaduna area at affordable prices as part of its MOIP (Annex 6). Description of Project Components 3.09 The proposed project, the physical aspects of which are depicted on Map 13939 and described in detail in the project file, consists of: A. Water Supply Facilities in Kaduna District (i) Raw water intake and pumping station on the Kaduna River at the existing north water works. Intake to de constructed for ultimate capacity of 300,000 m /day, with pumping facilities for 150,000 m3/day installed initially; 3 (ii) Water treatment plant with capacity of 150,000 m /day (50% to be commissioned in 1982 and the rest in 1983). Land acquisiton and design to provide for ultimate expansion to 300,000 m3/day; (iii) About 37 km of transmission mains, ranging in diameter from 400 mm to 1,000 mm; (iv) Three ground level and three elevated storage 3reser- voirs with a total capacity of about 64,500 m ; - 21 - (v) Raw and treated water pumping stations with a total of 16 pump sets of varying capacity; and (vi) Reinforcement and expansion of the distribution network. Preliminary estimates indicate that some 300 km of pipelines may be required over the project period and the final designs will be com- pleted gradually as the project proceeds. In con- junction with the distribution system expansion, public standpipes will also be installed at about 300 m intervals in presently unserved areas. B. Operating Facilities (i) The construction of new headquarters offices in Kaduna City; (ii) Construction and equipping of new central workshop and meter repair facilities in Kaduna City; (iii) Provision and installation of radio communication facilities in the Kaduna district and between the Kaduna headquarters and other regional offices of KSWB; and (iv) Expansion of the KSWB training facilities in Kaduna City. C. Institutional Support and Technical Assistance (i) Design and construction supervision of the water supply and operating facilities outlined above; (ii) Preparation of master plans for the water supply sector throughout Kaduna State, the study of the pollu- tion in the Kaduna River and the analysis of the Kaduna distribution system (recommended by earlier Bank missions and now virtually complete); (iii) Provision of training and management advisors; and (iv) Tariff study. Cost Estimates 3.10 The total estimated cost of the project is N 102.8 million, includ- ing taxes and duties (US$158.4 million), with a foreign exchange component of N 59.6 million ($92 million), representing 58% of total costs. The summary cost estimate is shown in Table 3.1. KADUNA WATER SUPPLY PROJECT SUMMARY COST ESTIMATES DESCRIPTION COST IN N(000) COST IN US$(000) % OF LOCAL FOREIGN TOTAL LOCAL FOREIGN TOTAL TOTAL A. SUPPLY OF PLANT AND METERIALS 1. Treatment Plant (Supply & Erect.) 200 1860 2060 308 2864 3172 2 2. Pumping Plant (Supply & Erect.) 200 1800 2000 308 2772 3080 2 3. Transmission Pipes 530 4790 5320 816 7377 8193 5 4. Distribution Pipes (Prim. & Sec.) 468 4207 4675 721 6479 7200 5 5. Distribution Pipes (Tertiary) 285 2565 2850 439 3950 4389 3 Subtotal Supply 1683 15222 16905 2592 23442 26034 17 B. CIVIL WORKS CONSTRUCTION 1. Treatment Works 3940 5920 9860 6068 9117 15185 9 2. Intake and Weir 720 1080 1800 1109 1663 2772 2 3. Transmission Pipelines 1150 1730 2880 1771 2664 4435 3 4. Service Reservoirs: (i) Kakuri, Rigyasa 1840 2760 4600 2833 4250 7083 4 (ii) Barnawa, Mando Road, Kudenda 1360 2040 3400 2094 3141 5235 3 (iii) Polytechnic Road 840 1260 2100 1294 1940 3234 2 5. Pumping Station (Polytechnic) 70 100 170 108 154 262 - 6. Distribution Pipelines (Prim. & Sec.) 1232 2593 3825 1897 3993 5890 4 7. Distribution Pipelines (Tertiary) 665 285 950 1024 439 1463 1 8. New Connections & Conversions 230 670 900 354 1033 1387 1 9. Standpipes 60 180 240 92 277 369 - Subtotal Civil Works 12107 18618 30725 18644 28671 47315 29 C. MISCELLANEOUS CONTRACTS 1. KSWB Headquarters - Building 1200 1800 3000 1848 2772 4620 3 2. KSWB Headquarters - Equipment 30 270 300 46 416 462 - 3. Workshop & Meter Repair Facility 200 300 500 308 462 770 1 4. O&M Equipment and Rehabilitation 130 420 550 200 647 847 1 5. Communications Facilities 30 270 300 46 416 462 - 6. Training Facilities 80 340 420 123 523 646 - 7. Consulting Services 1520 2250 3770 2341 3465 5806 4 Subtotal Miscellaneous 3190 5650 8840 4912 8701 13613 9 X TOTAL BASE COSTS 16980 39490 56470 26148 60814 86962 55 L TOTAL PHYSICAL CONTINGENCIES 2223 4798 7021 3423 7389 10812 7 . TOTAL PRICE CONTINGENCIES 20944 15353 36297 32254 23644 55898 35 TAXES AND DUTIES 3045 - 3045 4689 - 4689 3 GRAND TOTAL PROJECT 43192 59641 102833 66514 91847 158361 100 % OF TOTAL - - - 42 58 100 - ', - 23 - 3.11 Project costs are based on preliminary designs. As a result of recent competitive bidding for the emergency works program (para. 2.21), KSWB and their consultants had up to date (March 1978) information on unit prices for most items of work proposed in the project. Cost estimates have been updated to reflect end of 1978 unit prices. Prices resulting from competitive bidding in accordance with World Bank procedures might actually be somewhat lower if contractors anticipate less risk, but this possibility has not been reflected in the cost estimates. Planning is generally well advanced and bids have already been called for equipment for the new treatment plant, the most critical element in the project since it provides the necessary additional water and requires longer to construct than any other item. Detailed site investigations still need to be carried out for all structures but as all project components are essentially extensions of existing facilities in the Kaduna urban area, the basic design information is reasonably reliable. Although the distribution system has to be both substantially extended and reinforced to meet the project objectives the, so far, incomplete planning of these components made it necessary to prepare cost estimates on the basis of preliminary layout plans only. The cost estimates for KSWB operating facili- ties, consulting services and technical assistance are reasonable. Background information and assumptions for all estimates are recorded in the project file. 3.12 The foreign exchange component of project costs was estimated assuming that virtually all equipment supply contracts, apart from some small diameter pipes which are manufactured in Nigeria, would be won by foreign firms. Foreign but locally established contractors are expected to win all civil works contracts. Nevertheless the foreign exchange component of these works will still be high, estimated at 58%, because the contractors likely to be involved will rely extensively on imported equipment and expa- triate supervisory staff. KSWB, under "Approved Users Certificates" generally enjoys significant reduction and, in some cases, exemption from applicable import duties on goods imported for its operations. The relevant regulations frequently change and based on the currently payable duties an allowance of 10% was made in the project cost estimates for duties and taxes on all directly imported goods. 3.13 Allowance has also been made on each component for physical contin- gencies ranging from 10% to 20%, depending on the probability of unforeseen additional work. Overall physical contingencies amount to 12.4% of basic costs. In addition, allowance has been made for price contingencies, at the rate of 8% p.a. and 20% p.a. respectively for foreign and local cost components. The price contingencies for the foreign components are slightly higher than the current Bank guideline figures to compensate for special conditions such as the tendency (indicated by experience) of higher prices for goods shipped to Nigeria due to special requirements such as import inspection and payment conditions. Because of the extended duration of the project and the high rates assumed for increases in local prices, the total allowance for price increases effectively increases the estimated costs (expressed in December 1978 price levels) by 57%. - 24 - 3.14 Project costs and price contingencies have been calculated on the assumption that the exchange rate between the naira and the dollar will remain fixed at 1.54 throughout the project period. This closely reflects the experience of recent years during which time the exchange rate changed rela- tively little despite a rate of domestic inflation in Nigeria which consistently exceeded international inflation by a significant margin. The estimates of project cost in dollar terms would be affected by a change in exchange rate policy. If, for example, there were to be a 25% devaluation to compensate for the system of import duties and export incentives currently in force and if the exchange rate were to be adjusted thereafter to compensate fully for the relatively high rate of domestic inflation projected for future years, then the local component of project costs would be lower when expressed in dollar terms. Under these assumptions the local component of project costs would amount to $46.6 million compared with the $66.5 million estimated on the basis of the present exchange rate. Total project cost would, therefore, amount to only $138.4 million (compared with $158.4 million estimated on the basis of the present exchange rate) and the share of total project cost financed by the Bank loan would be 66 percent (compared with 58 percent estimated on the basis of the present exchange rate.) Project Financing 3.15 The proposed financing of the project would be as follows: N million US$ million % of Total Proposed IBRD loan 59.6 92.0 58 Government (State) 24.7 38.0 24 Internal Cash Generation 18.5 28.4 18 Total 102.8 158.4 100 The proposed loan would cover 100% of the foreign exchange component of project costs. KSG and KSWB would provide all additional financing or it would be provided by the FGN in the event of their failure to do so. KSG attaches very high priority to the project and agreement was reached during negotiations that it would provide all necessary counterpart funds including those required to meet any possible cost overruns. Implementation 3.16 Tender documents for the equipment contract were issued to bidders on September 1, 1978 following a detailed Bank review. The civil works contract would start sometime in 1980 since the final designs will have to follow the award of the equipment contract in 1979. Initial operation of the first half of the treatment plant is scheduled for late 1982, with final completion in 1984. The implementation schedule, Chart 3.1, shows the various activities associated with the construction of all project components. KADUNA WATER SUPPLY PROJECT - IMPLEMENTATION SCHEDULE ITEM |YEAR ENDING MARCH 31 1 1979 1 980 1 1981 1 1982 1 1983 | 1984 CALENDAR YEAR 1978 1979 1980 19BI 1982 1983 TREATMENT PLANT EQUIPMENT ! ____ ; =,I. 2! CIVIL WORKS FOR TREATMENT PLANT -t#7-717 : ____ F.- KL) L m7' r3,' I * . PU M PIN G EQU IPM EN T F ; .1LL:;;hUi.i i INTAKE PUMP STATION a WEIR ZY,RAIIC 0.=ss E=] t !1ll'UW,f LL2iI | TRANSMISSION MAINS nI., =T 7 RESERVOIRS AT KAKURI a RIGYASA ___ _ r C_T_ __m_ ELEVATED STORAGE TANKS (3) *-s I -T i I > 1 ., RESERVOIR AT POLYTECHNIC ROAD L lEff PUMP STATION AT POLYTECHNIC ROAD ______ ]DIfli 111 PRIMARY B SECONDARY DISTRIBUTION DISTRIBUTiON NETWORKS =T____ii_i__i5iiiiiiiii IMF= NEW PRIVATE CONNECTIONS ll l nmmflflhIiIflhI JflIThIm HI [mlln l HmmmlnnnIU Imm-[unmIirnlIml n m CONVERSION OF UNREGISTERED CONNECTIONS IiIlII DDIIII Immmm I[lUMImIM ilammmm mumUnun_ NEW STANDPIPES m mm m1mmn immmm I1 mmum mmmumna KSWB HEADQUARTERS BUILDING r-: - = t cn; 1. ..ll mmm IlEDml llm MUM= ;Il.lifl KSWB WORKSHOP a METER REPAIR FACILITY =. ; / \ ) \ G E R ER The d-ni-ts ed and the do not - mply, on tha part of tha Wend 8unk _ndd Oitoe-fhes any 1odg-net o the legal tatn-f sy tetory or any endorsement aur or-c-cpt-nce of -oh booodarnes T. 5.kwl0 900g\\2 utNi9_/> _s, / w ~~~WATER SUPPLY PROJECT Kl- PUMP -5AJBos DUA:SR2a 3b(is i s i i 8 X z ; ;0t tv ( I 2 MILES J O;;l 1: 2A T BY PROPOSED DILOM TERS BUIOSYTE ''4s 7222 '-. CO~~~~~~~~~~NOR ONTRCTO I LAOOO 'A- 20~~~~~~~~~~~~~~~~~~~~~~~~~~~~RSEVI