[)ocument ot' The World Bank Report No. 13776-IND STAFF APPRAISAL REPORT INDONESIA VILLAGE INFRASTRUCTURE PROJECT FOR JAVA APRIL 26, 1995 Infrastructure Operations Division Country Department III East Asia & Pacific Region CURRENCY EQUIVALENTS (As of January 1995) Currency unit = Indonesian Rupiah (Rp) $1.00 = Rp 2,200 Rp 1 million = $454 WEIGHTS AND MEASURES Metric Units FISCAL YEAR Government of Indonesia: April I - March 31 PRINCIPAL ABBREVIATIONS AND ACRONYMS USED APBD 11 - Annual local government development budget APBN - Annual central government development budget BAPPENAS - National Development Planning Agency BAPPEDA I/II - Provincial/District Development Planning Agency BPKP - Central Audit Bureau BRI - Bank Rakyat Indonesia Bupati - Head of Kabupaten Cabang - Branch Camat - Head of Kecamatan CAS - Country Assistance Strategy DATI 1/11 - Provincial/District level government DGBM - Directorate General Bina Marga (Roads), MPW DGCK - Directorate General Cipta Karya (Human Settlements), MPW DGB - Directorate General of Budget, MOF DPUK - Kabupaten Department of Public Works DIP/DIPDA - Central/regional project budget GOI - Government of Indonesia INPRES - Presidential Instruction, including a class of GOI grants IDT - Inpres Desa Tertinggal (Program for Villages left behind) ILO - International Labor Organization Kabupaten - District (Level 11) Kecamatan - Kabupaten administrative subdistrict Kepala desa - Elected head of village and of LKMD KPKN - Provincial office of National Treasury LKMD - Village community group MoHA - Ministry of Home Affairs MOF - Ministry of Finance MPW - Ministry of Public Works NGO - Non-governmental organization OECF - Overseas Economic Cooperation Fund Pimpro - Project Manager from DPUK PMD - Directorate General of Village Community Development (MoHA) PMU - Project Management Unit PODES - Village survey Repelita - Five-year Development Plan SPABP - Special grant fund channel from Central to Local Government SOE - Statement of expenditure SUSENAS - National socio-economic survey - i - INDONESIA VILLAGE INFRASTRUCTURE PROJECT FOR JAVA Loan and Project Sunumary Borrower: The Republic of Indonesia Beneficiaries: 1,200 poor villages on Java with some 3 million people Amount: $72.5 million equivalent Terms: Repayable in 20 years including five years of grace, at the Bank's standard variable interest rate. Project Objectives and Description: The proposed project aims at providing public infrastructure and employment in 1,200 villages, the bottom 20% of the poorest or 6% of all rural villages on Java. It includes a 2-3 year pilot program to increase government decentralization, transparency and village participation. Main features are: a) empowering villagers to decide, with some economic criteria, priority uses of the village grant under the project; b) creation of jobs paid in cash for poor villagers, especially in periods of underemployment; c) development of skills for constructing small public works--engineering assistance would be provided to villagers to help with subproject design and achieving good quality works; d) channelling of village grants through subdistrict branches of Bank Rakyat Indonesia; e) mobilization of local contributions for the works; and f) a monitoring program to review progress while the project is underway and overall results, expost. (OECF is helping finance an infrastructure project for poor villages off- Java). Benefits and Risks: The project villages comprise on average more than 2600 persons, some 3 million in total. With incomes around $1 per day, benefits from the creation of jobs and monetary liquidity are important and could lead to higher standards of living; some 2,000,000 job-months might be created and the project could set a precedent for more labor intensive works in future public programs. Economic returns to the project infrastructure are expected to be high: currently many poor villages are cut-off during the rainy season, making access to services, markets and jobs difficult, while they lack water in the dry season; the project would help overcome these constraints. Provision of other small infrastructures chosen by the villagers would also have high returns given that to be chosen the works have priority. A risk is a lower absorptive capacity than expected, that could delay project - ii - implementation; for this event the project includes contingencies for extending technical assistance services. Another risk is improper maintenance of assets to be created; under the project arrangements would be agreed for subsequent maintenance, which should be a prime concern to villagers for sustainability of benefits from the infrastructures. A third risk is diversion of funds, but it should be low as several layers of agencies are avoided and various monitoring systems are introduced in the project. Estimated Costs: Description Local Foreign Total (US$ million) Goods, Works and Services 59.0 6.5 65.5 TA Implementation Support 10.0 1.0 11.0 Increased Administration 3.3 - 3.3 Subtotal 72.3 7.5 79.8 Contingencies 3.8 0.2 4.0 Total 76.1 7.7 83.8 Financing Plan: Local Foreign Total % -------------------------- US$ million --------------- GOI 11.3 - 11.3 13.5 IBRD 64.8 7.7 72.5 86.5 76.1 7.7 83.8 100.0 Disbursements: -------------------------- US$ million ------------------- IBRD Fiscal Year 1996 1997 1998 1999 Annual 30 35 5 2.5 Cumulative 30 65 70 72.5 Poverty Category: Program of targeted interventions for poor villages on Java. Estimated ERR: Above 20% ERR, on account of the infrastructure deficiencies the project would help alleviate. Map: IBRD 26797: Village Clusters in the First Year Program. - iii - INDONESIA VILLAGE INFRASTRUCTURE PROJECT for JAVA STAFF APPRAISAL REPORT TABLE OF CONTENTS 1. Project Background ....................... ....................... I A. Poverty Trends ............................................. 1 B. Past and Ongoing Poverty Related Programs ........................... 1 C. Rural Infrastructure .......................................... 3 D. Lessons Learned in Previous Bank Operations .......................... 4 E. Bank Strategy for Poverty Reduction ............................... 6 2. The Project .................................... 6 A. Project Origin and Formulation ................................... 6 B. Project Objectives ........................................... 7 C. Project Description .......................................... 7 D. Project Costs and Financing ..................................... 11 3. Project Implementation ....................11....................... 1 A. Project Coordination and Monitoring ............................... 11 B. Implementation Schedule ....................................... 12 C. Implementation of Works ...................................... 12 D. Procurement .............................................. 13 E. Disbursements ............................................. 14 F. Project Accounts, Reports and Audits ............................... 16 G. Project Monitoring and Bank Supervision ............................ 17 H. Land Acquisition, Resettlement and Compensation ....................... 17 1. Environmental Impacts ......................................... 18 4. Project Justification and Risks ...... ............. .................... 18 A. Justification ............................................... 18 B. Risks ................................................... 20 5. Agreements Reached and Recommendation ............................. 20 Annexes 1. Some Characteristics of Java Provinces 2. Villages Selected for First Year Program 3. Grant Authorization, Funds and Reporting Flows 4. Government Action Plan 5. Optimal Yearly Schedule 6. Contract Forms 7. Performance Indicators 8. Supervision Plan 9. Guidelines for Compensation for Land or Asset Acquisition 10. Sample Economic Returns 11. Documents in Project File Map 26797 Village Clusters in First Year Program The report is based on the findings of a preparation mission in October 1994, and an appraisal mission in January 1995. The appraisal mission comprised Frida Johansen (Mission Leader) and Jacques Tollie (Engineer); ESIU provided support. Messrs. J.M. Lantran and E. Jimenez were peer reviewers. Mr. A. Khanna, Chief EA31N and Ms. M. Haug, Director EA3, have endorsed the project. INDONESIA VILLAGE INFRASTRUCTURE PROJECT FOR JAVA 1. PROJECT BACKGROUND A. POVERTY TRENDS 1.1 Indonesia has been successful in reducing the incidence of absolute poverty. The percentage of the population living at or below the absolute poverty level was reduced from some 40% in 1976 to some 15% in 1990. However, in view of the large population, about 185 million, the number of absolute poor remains high: some 27 million people. These estimates result with an absolute poverty line defined as enabling personal intakes of 2100 calories per day and minimum non-food necessities. Poverty incidence is sensitive to the definition used, as many people still are just above the absolute line and would be categorized as poor with less stringent standards. (Besides, there are many difficulties in measuring poverty--identifying and imputing values to non-traded goods, considering price level differentials across locations; identifying differing needs by location, type of employment, age, public infrastructure availability, etc.; identifying pockets of poverty not apparent to outsiders from statistical averages for larger areas, and so on.) The average disposable household income is only about a dollar per day per person, even though the average GNP per capita has steadily grown to about $730 equivalent. 1.2 There is no doubt that poverty is an important rural problem. Poverty reduction has been most remarkable in rural areas, but still, some 18 million poor remain in rural areas, many on marginal lands, uphill, water scarce or remote areas, or fishing villages, or areas too densely populated to enable a living from the resulting small farms, while alternative sources of income are still scant. Rapid urbanization has absorbed many rural poor and even so the estimated number of urban poor has decreased somewhat, to some 9 million in 1990. These numbers reflect a relatively similar urban and rural absolute poverty incidence; other data, such as on infant mortality, suggest that the rural poverty incidence may be higher and the urban, lower, emphasizing the problem in rural areas. 1.3 Java, with a population of 107 million of which only some 36% in urban areas (in 1990), has one of the highest population densities in the world, of about 8 persons per hectare (Java has some 55% of Indonesia's population on only some 7% of the country's land area). In line with its share of the population, Java has the most poor, some 55% of the total, more than 15 million (of the total number of poor Sumatra comprises 19 % or some 5 million, Kalimantan 8 %, Sulawesi 5 %, Bali 1 %, and the other islands, 1-3%; these shares are lower even though poverty incidences are higher in some outer island provinces than on Java). Of Java's absolute poor, some 9 million live in rural villages. 1.4 The Bank has prepared two reviews of the poverty situation in Indonesia: "Strategy for a Sustained Reduction in Poverty", in 1990, and "Public Expenditures, Prices and the Poor", in 1993. The latter report has been an input to the Government's current poverty programs, on which this proposed project also builds on. B. PAST AND ONGOING POVERTY RELATED PROGRAMS 1.5 No doubt steady economic growth, of 6% per year over more than a decade by now, has been a main contributor to poverty reduction in Indonesia. In addition to growth, government goals included--and continue to include--stability and equity. As part of its policy the Government emphasized regional development programs, with focus on agriculture and food self-sufficiency; socially oriented programs, such as universal primary education, family planning, community health and nutrition; public infrastructure development, including water supply, roads, electricity; village development programs, credit programs, and more. The programs aimed at providing basic levels of services for all, and were 2 funded yearly through the central government budgets; international agencies provided assistance to some of the programs. Given the overall low income levels prevailing, the Government did not generally try to "target" the poor; also, given the overall low technical skills, the Government kept most planning and implementation in central agencies. While steps are being taken to improve planning and implementation of supply driven, basic standards, types of public programs that continue to be much needed, also, as both incomes and income differentials have increased, new programs are increasingly targeted--such as urban poverty, kampung improvement programs (KIP), the integrated area development schemes (PKT')- -and increasingly developed and implemented with local level agencies and community participation. Recent improvements in the national household socioeconomic survey (SUSENAS), incorporating indicators of access to social services as well as consumption levels and representative at district level-- earlier smaller sampling made results representative only at provincial level--will allow better design and monitoring of targeted programs. 1.6 The Government has made further poverty reduction one of its main objectives in the Five Year Plan (Repelita VI) that started in April 1994. It is concerned that the number of poor remains large and wants to accelerate the process of reducing poverty; it aims at decreasing poverty incidence to 6%, less than 15 million persons, by the year 2000. The instruments foreseen to achieve this objective are an outward oriented, labor-intensive based economic growth (expected to generate more than 2 million new jobs per year), human resource development (especially expanded education and health programs), and a new program targeted to poor villages (IDT, literally, villages left behind) as it fears that traditional public programs may continue to bypass those most in need and are taking too long in being implemented. and then, not always to desired standards and cost levels. 1.7 The Government launched its new IDT program, the Inpres Desa Tertinggal, in April 1994. It is funded domestically with $200 million equivalent per year for three years. This pilot program is innovative in many ways. It is targeted to more than 20,000 poor villages (see para. 1.8) that each received some $10,000 equivalent seed capital, for the poorer villagers. The poor get access to working capital, at low cost and in a simple and transparent way. Standard government agencies are bypassed but "facilitators" (community workers) paid by the Government are available to assist villagers in understanding the program, that has been widely publicised, and in defining "projects". Community self- help groups (POKMAS) including women's groups (PKK) are central to the IDT process. The villagers agree on who should be the beneficiaries of the funds, based on (low) incomes and proposed (productive) uses of the funds; the beneficiaries have to repay the "village", as the funds are intended to become a revolving fund for others to use subsequently. The subdistrict bank unit receives the grant from the Government in a village account and disburses against a minimum of documentation to the village head and the beneficiaries, and forwards records to the Government. The village heads also have to keep records of beneficiaries and activities pursued, repayments, etc., records that are consolidated at the provincial level and forwarded to Jakarta. IDT results so far are positive. Selected villagers surveyed say they value the initiative and villages not included in the program question the selection method. Funds are being used carefully--some villagers on Java bought cattle; the designated beneficiaries are able to pay for the animal some months later by selling the offspring. Others bought sewing machines, weaving materials, and so on. Some misappropriations of funds by officials were reported, some of them via the P.O. Complaints Box 5000, that is well known to the Indonesian population. Unusually strong action--dismissal--was taken against identified offenders, that should discourage improper conduct. 1.8 The selection of villages for the 1994 IDT program was made by the Planning Ministry (BAPPENAS) and the Ministry of Home Affairs (MoHA) based on the 1993 PODES socio-economic 1 GOI's area development scheme (PKT) was undertaken during 1989-93 and covered for one year each a total of 7,900 villages, nmainly for public infrastructure provision with village participation. 3 survey by the Bureau of Statistics, that considered three basic indicators: village facilities and potential (10 variables), housing and the environment (8 variables) and population characteristics (9 variables). Of the 65,554 villages in Indonesia, 20,633 had at least 2 of the 3 indicators below the set poverty threshold and were thus defined as "poor". The large majority of these poor villages, 19,625, is "rural", and 14,117 of the rural poor villages are outside Java-Bali. The population of the poor villages is 33 million, of which 18 million (55%) are in Java-Bali as the village size there (average 3,000 persons) is 3 times the average village size elsewhere; the percentage is in line with the proportion of the poor in Java according to surveys of household expenditure (SUSENAS). The initial village selection had some flaws for identifying consumption levels--for instance, too much weight was given to infrastructure deficiencies that do not always reflect lowest consumption levels--and thus the selection for the 1995 program gave more prominence to expenditure levels; furthermore, villages in the 1994 program with less than 500 residents will not receive further IDT allocations. As a result almost a third of the villages selected changed for the 1995 program. 1.9 Central government transfers to local levels will continue to be important for equity objectives, because the central government has most tax bases (oil, gas, import duties, etc.). Most transfer categories are based on equal amounts per capita, per jurisdiction and per area size of the jurisdictions. Many of the transfers are earmarked for specific uses, such as civil service salaries, but one of Repelita VI's aims is furthering decentralization of functions, increasing participation in decision making at local levels, and increasing targeting of programs by type and by region. As an example, as of 1994 the INPRES for roads was discontinued and the amount was included in the INPRES block grant that provides, rightly, increased flexibility in the use of funds at the local level. Decentralization will continue as local agencies become more able; the central agencies are overwhelmed by the workloads imposed by growing budgets and complexity that often result in delaying program implementation unnecessarily. The FY1994/95 budget for regional development was Rp.5,340 billion, comprising Rp.423 billion in transfers to villages (only Rp.6 million per village), transfers to kabupatens of Rp.2,418 billion (of which Rp.968 billion for roads), transfers to provinces of Rp.1,219 billion, subsidies to primary schools of Rp.498 billion, subsidies to health centers of Rp.393 billion, and the IDT program with Rp.389 billion. At the same time, local revenue efforts are promoted as local needs exceed available budgets. 1.10 Given some evidence that incomes in rural areas are negatively affected by regulations and practices restricting local trade and transport, the Government also endeavors to reduce such non-physical restrictions. In the past, Government reform programs have tended to focus on external trade or centrally visible constraints and less on what may seem smaller local level impediments, that however can have a significant impact on farmgate price levels. Financing was made available under the Technical Assistance Project (Loan 3385-IND) to identify non-infrastructure constraints to trade and transport and help define an improvement action program for the rural areas. Study results were taken into account for preparing a Government Action Plan, intended to reduce levies imposed on transporters at the district level and to provide more information on producer prices to farmers (Annex 4). As part of its decentralization policy, the Government proposes to implement the Action Plan in parallel to the proposed project. C. RuRAL INFRASTRUCTURE 1.11 The Government has concentrated investment on infrastructure in projects of national, provincial and district level importance. Projects at these levels usually have a large number of beneficiaries and high economic returns. In the case of roads, such projects are necessary to improve or create basic networks that carry high traffic volumes, and thus normally have priority over subdistrict or village access roads. As a result the road network currently comprises some 260,000 km of which some 181,000 km of kabupaten roads--but access roads are not well developed, and given heavy rains 4 and difficult terrain and clayish soils in many locations, many villages are cut off during the rainy season. Extending the road network to provide all weather though low standard access to villages is now a priority, but because of the large number of villages it is costly even if improvements are achieved at lowest possible costs. The road subsector already comprises some 20% of the development budget (some Rp.5 trillion in FY95, almost as much as the whole regional development budget) and some reallocations may be warranted. 1.12 Infrastructure needs at the subdistrict and village level have been addressed with smaller government programs and with self-help. Since Pelita IV, the Government has classified villages in 3 categories for assistance: the poorest, to which both housing and public infrastructure assistance are given; villages with potential, such as rural growth centers that need ad-hoc programs, and villages already developing, for which only housing assistance is provided. The Ministry of Home Affairs (and until 1993 also the Ministry of Public Works) helps implement the programs. By now about half the villages have been provided some assistance; some 3,000/4,000 villages selected at the kabupaten level are assisted every year. There have also been special programs such as the integrated area development scheme (mentioned in para. 1.5). Currently INPRES provides sorne Rp.50 million per kabupaten for village infrastructure. Most work is undertaken by the villagers, without pay or just enough to cover some training and food costs, so that more funds are available to purchase inputs, a site engineer, often a consultant, is assigned for 2-3 months to a village to help with implementation, if needed. The Army's "corps of engineers" equivalent has also been active in improving small village infrastructures. Often villagers improve infrastructure by themselves--under the "gotong royong" system all villagers mobilize one day to accomplish a chosen task, or each villager is assigned responsibility for completing by a certain date a given sub-task, such as improvement of a small road section. But villagers usually cannot afford to buy any materials, such as stone, so that despite their efforts results are often of low standards and short-lived. Thus, infrastructure service levels remain low. A 1994 study sponsored by OECF estimated that providing for basic infrastructure "needs" (access roads, piers, drinking water, sanitation) in all the poor Indonesian villages, at Ministry of Public Works unit costs, would cost Rp.2,757 billion. 1.13 Needs on Java are considerable. Java has 18,194 villages of which some 6,000 rural villages were classified by BPS in 1993 as "left behind", partly due to infrastructure deficiencies--in roads, health facilities, schools, telecommunications, water supply, sanitation facilities, markets, waste disposal systems. The above mentioned 1994 OECF-financed study estimated that for Java some Rp.312 billion were needed to provide facilities to 4,300 poor villages--or Rp. 174 billion for the poorest 765 villages. The report indicates that some 4,200 poor villages need improved access roads, some 2 km on average per village, and that some 500 villages do not have clean drinking water. The cost of the needed roads, water, piers and sanitation facilities was estimated at some $33,000 average equivalent per village, based on MPW unit costs (average unit costs were $16,000 per kilometer of road (including bridge needs), $23,000 per water supply scheme and $3,000 per pier). However, the 765 poorest villages have costlier needs, being less endowed in infrastructure and normally located in areas of more difficult access; their requirements were estimated at some $110,000 average equivalent per village--for an average 4 km access road with bridge(s); a water scheme to tap rain, surface or ground water; and 300 piers, on rivers or seashores, in 200 of the villages. (Annex 1, Tables 1, 2, 3). Even these needs, prior to including the needs for other types of infrastructure, are unlikely to be met with current budgets (para. 1.9); so far funds available for localized needs have not increased despite some increased decentralization. However, foreign agencies are assisting with several programs. D. LESSONS LEARNED IN BANK OPERATIONS 1.14 Many ongoing Bank projects in Indonesia have components targeted to the poor--health, nutrition and family planning; education; agriculture; rural water supply; kabupaten roads; urban projects. Most of these projects are implemented by national government agencies and a few district level agencies 5 following standard budgetary processes, overheads and budget cycles. Implementation takes normally 5 or more years; the experience from several projects was reviewed for the proposed project: (a) the Bank's 3 ongoing kabupaten road projects, each covering different areas of Indonesia (on Java, only West Java), essentially seek to upgrade some 20 km of roads per kabupaten per year and to improve overall road maintenance. The implementation record is good in terms of number of kilometers improved, but is behind expectations in terms of construction quality, unit costs (especially in Eastern Indonesia) and institutional development. The experience of a labor intensive pilot scheme being implemented on Java with assistance from ILO under one of the kabupaten road projects was useful for the proposed project; (b) the Yogyakarta Upland Area Development Project (Loan 3305-IND, 1992), aims at improving the incomes and living standards of upland residents, mainly farmers, on a sustainable basis through better resource management. Of interest to this project, is that the Yogyakarta project is also of a participatory nature and includes provision of infrastructure, and that the mid-term review in June 1994 revealed road and bridge construction to be the most successful component, with physical targets achieved or exceeded through considerable local contributions that stretched the project funds, even though cost-effectiveness was not considered as good as achievable; (c) under the Water Supply and Sanitation for Low Income Communities Project (Loan 3629-IND, 1993) communities should participate in deciding the type of service level they want within a village allocation, and have collected contributions to upgrade standards of works the allocation could finance; however, the project had a slow start, and it is too early to judge results. 1.15 Experience with locally managed small irrigation works on Java is considered to be good: there was grassroot participation in planning, agreement on work details and schedule, and beneficiary villagers were usually hired as wage labor for construction. Works were undertaken mainly by small contractors; contractor capability for small works is good and competitive. Some works were constructed by villagers themselves, based on prevailing unit rates for construction items (not on a wage basis). The design was handled entirely by provincial based consultants while overall supervision was by the provincial level public agency. The irrigation schemes cost between $10,000 and $60,000 equivalent and were on an annual construction basis. The experience in constructing village roads under rural development projects and schools (with INPRES) is similar to that with irrigation schemes. These experiences were good examples for the proposed project. The kampung improvement program is similar to the proposed project in providing small scale infrastructures and including poverty reduction objectives, but it benefits urban neighborhoods rather than rural villages; the program was already successful prior to Bank involvement and the Bank's various KIP projects are considered to provide an example of best practice. 1.16 The experience under poverty focused projects in other countries was also reviewed: such as that for Sri Lanka and the Social Fund for Guatemala, and the successful Agetip program in Africa-- under this program a non-profit organization employs small contractors to carry out publicly financed works. 1.17 A general lesson is that for poverty reduction programs, involvement of the intended beneficiaries in program design and implementation, and contributions in kind or cash, are essential for more relevant subproject choices and sustainability. Also, multilayered top-down processes and centralized approval requirements considerably slow processes down and add to overhead costs; however, central criteria and guidelines are useful, as is the availability of technical expertise and advise at the local level to improve understanding of choices and quality of implementation. The period of starting up activities tends to be longer than planned, and programs need some flexibility in implementation time-- unless the opportunity cost of their time is nil, people generally need time to choose and commit to a new activity, and need some certainty about the sustainability of the initiative. Starting small and expanding programs as demand for them increases at each location seems a safe way to proceed. 6 E. BANK STRATEGY FOR POVERTY REDUCTION 1.18 The Bank endorses the Government's strategy for poverty reduction in Indonesia (para. 1.6). The proposed project is consistent with the 1995 Country Assistance Strategy (CAS) that was discussed by the Board March 21, 1995. Poverty reduction forms the central basis of almost two-thirds of the Bank's lending program through efforts to improve the quality of basic social services, infrastructure projects for roads, power transmission and distribution, water supply, agricultural support services and research. In order to target the projects better towards the poor, and to increase participation of the poor in the design and implementation of these projects, the Bank is increasingly moving away from large, national (in coverage), and centrally-managed projects to a multiplicity of smaller, regional and more locally-managed projects, such as this proposed one. 1.19 In line with the 1994 CAS and a Government request, mid-1994 the World Bank made financing available under an existing Technical Assistance Project (Loan 3385-IND) to quickly help BAPPENAS, the Ministry of Home Affairs and the Bureau of Statistics improve methodologies and procedures to better select villages for the 1995 and 1996 IDT programs, and to develop systems to monitor/supervise/evaluate the pilot towards improving future programs. Terms of reference for the technical assistance were also agreed. However, recruitment of experts was delayed and the Govermment did itself further work to improve village selection (para. 1.8). Furthermore, following a Bank request, Japan's Policy and Human Resources Development Fund approved in January 1995 a $2 million equivalent grant for BAPPENAS to monitor/supervise/evaluate the IDT pilot during 1995-1997, using the systems to be developed under the Bank financed study. Experts to help design the monitoring system started their assignment early April 1995. 2. THE PROJECT A. PROJECT ORIGIN AND FORMULATION 2.1 The 1993 PODES survey helped identify poor villages for the 1994 IDT program; poor infrastructure weighed heavily in the selection (para. 1.8). Early 1994 BAPPENAS/OECF engaged consultants (Japan Development Institute and PT Intersys Kelola Maju) to survey IDT villages and estimate needs for access roads, piers, and drinking water and sanitation, both in physical terms and cost. On the basis of the consultant report (para. 1.12), OECF agreed to support an infrastructure project for selected poor villages off Java and Bali--implementation of the project started February 1995. 2.2 The Bank agreed mid-1994 to assist with a pilot village infrastructure project for Java, addressed to villages relatively underendowed with small infrastructures such as water supply, access roads, drainage, bridges and jetties, markets, etc. Experience under Bank financed projects in Indonesia and other countries, information gathered in visits to poor villages, the Javanese traditional ways and strong grassroot institutions, were taken into account in the design of the proposed project; the experience under the Government's self-financed poverty and infrastructure programs was essential for the adoption of the project features that are innovative for the Bank (para.2.6). The project was developed jointly by the Bank and the Government. BAPPENAS, in particular its Bureau of Regional District and Rural. Development and the IDT Secretariat, suggested the basic approach and coordinated interaction with other relevant Ministries, in particular the Directorate General of Regional Development (Bangda) and the Directorate General of Village Community Development (PMD) in the Ministry of Home Affairs; the Directorate General of Human Settlements (Cipta Karya) and of Roads (Bina Marga) in the Ministry of Public Works; and the Ministry of Finance. 7 2.3 The Government gives high priority to the project as a complement to the IDT program-- indeed sees it as part of the IDT program. The project is expected to enhance the value of the IDT seed capital villagers receive for productive purposes, and implementation will follow the decentralized IDT approach--villagers are to select and implement the works that they consider to be of highest priority. In December 1994 the Government requested the Bank appraisal to take place as early as possible. B. PROJECT OBJECTIVES 2.4 The proposed project aims at reducing poverty, providing village infrastructure and employment paid in cash, and increasing decentralization, in line with the Government objectives. More specifically, the project is a pilot to test in 6% of the Javanese villages--the bottom 20% of the poorest villages on Java--the following main objectives, with a view of applying lessons learned to future programs: a) empowering villagers to decide priority uses of the grant funds available under the project for their village, and to implement the works; b) providing public infrastructure needed in poor villages; c) creating jobs paid in cash for underemployed villagers to construct the public works, especially in dry seasons--though fishing villages may differ from farming villages in terms of the best season for works; d) mobilizing village contributions towards the agreed public works; and e) supporting the Government's decentralization policies, including its Action Plan to reduce non- infrastructure constraints to trade and transport in the rural areas. C. PROJECT DESCRIPTION 2.5 In order to reach the above objectives, the proposed pilot project comprises a 2-3 year program to assist some 1200 poor rural villages on Java improve their living standards while building public works--such as access roads, bridges, water supply schemes, sanitation facilities, drainage, markets, piers or other small infrastructures. The project would help finance (a) village works and employment, up to an agreed allocation per village, and (b) technical assistance/engineering services, to help with design and implementation of the schemes at the village level and, at the central level, for the Project Management Unit (PMU) to coordinate activities, supervise project implementation and monitor and evaluate its impact, and if necessary, to help implement its Action Plan (Annex 4). 2.6 The project is innovative for the Bank in the extent of its decentralization/grassroot approach: the villages selected are to decide the works they want and that comply with a simple economic criteria; technical assistance is to be provided directly to village groups; financing will be provided directly through subdistrict bank units and be delinked from late budget releases. The focus is also on employment: villagers doing the work are to be paid cash in proportion to work progress and works are to be organized seasonally or as convenient for labor availability. (As mentioned earlier, normally Bank infrastructure projects in Indonesia are implemented via government agencies because the works are of a large scale and complex; and while so far the Government has had some village programs implemented at the subdistrict and even village level, generally district or higher level agencies are fully in charge and village laborers are often not paid in cash but expected to contribute "free" labor.) The project modalities are described below. 8 2.7 Selection of poor villages. Among the 18,194 villages on Java, in 1993 the Government identified 6039 villages "left behind", or poor, largely based on infrastructure deficiencies (having at least 2 of 3 indicators below the PODES poverty threshold, para. 1.8). Helping so many villages at once would be too daunting a task. The project is to assist some 1200 rural villages, the bottom fifth of the identified poor villages including the 765 villages categorized as "extremely poor". The first year program includes 415 villages, 120 in West Java, 145 in Central Java, 30 in Yogyakarta and 120 in East Java. The IDT Secretariat first identified the kabupatens (districts) in each province with the highest concentration of poorest villages: 23 of the 82 kabupaten on Java include about half of the "extremely poor" villages. Because of the need to limit the time field engineers spend travelling between villages, villages were then selected in clusters of 5, each cluster including at least 3 extremely poor villages. All selected villages have populations of at least 700 persons, to justify the infrastructure and the grant level. Thereafter, the bupatis (District Heads) of the 23 selected kabupatens (districts), in consultation with camats (Subdistrict Heads) confirmed the IDT Secretariat selection, except for some 15 villages for which substitutes were proposed and retained in the final village list (Annex 1 and Map). 2.8 Some 800 other rural villages shall be in the second batch, 200 in West Java, 290 in Central Java, 10 in Yogyakarta and 290 in East Java, bringing the total assisted in each province to the proportion of poor in each province. More kabupatens will be covered than in the first project year; nevertheless, some isolated extremely poor villages may not be included in the project if overhead costs of doing so were too high; conversely, some poor villages but not in the lowest quintile, while not getting direct assistance would however benefit from access roads and other schemes provided to the poorest adjacent villages. The additional 800 villages shall have been identified from the established government list of poor villages and ratified by the respective Bupatis by September 1995. By December 1995 the Government and the Bank shall agree on the list of villages for the second year; if following review of the first year experience it is decided to proceed slower to ease implementation, then a shorter list will be selected for assistance in 1996, leaving the remainder for assistance in 1997. An additional village list would also be agreed if the allocation (para. 2.10) turns out to exceed implementable needs of some of the 1200 selected poor villages. 2.9 Early April 1995 and February 1996 (and if the program is extended, February 1997), the camats/bupatis have informed/will inform the kepala desas (elected Village Heads) of villages selected and provide public information--a circular, radio announcements, etc.--with the rules to be followed under the program, so that discussions in the villages selected gets underway. 2.10 Village grants. Each village allocation under the project should ideally reflect infrastructure needs and labor availability. However, for simplicity and transparency, a standard Rp. 120 million (about $55,000 equivalent) grant per village is foreseen. This allocation is smaller than the needs of the "extremely poor" villages but larger than the average need because some of the project villages are not "extremely poor" (para. 1.13); because it is expected that most of the works, especially road works, will be implemented with village labor and in surveys villagers have indicated willingness to work for some Rp. 2,000/3,000 per day, a lower wage than that included in MPW cost estimates; and also because the absorptive capacity to implement labor intensive works would be limited due to logistics involved. If some village programs cost less than the allocation, then the balance would be available for more villages that would also be selected from the bottom of the government's list of poor villages (para. 2.8). The allocations will be recorded in the kabupaten budgets but the funds will be channelled directly to villages through the subdistrict units of Bank Rakyat Indonesia (BRI), outside the standard budget channel. A flow chart is included in Annex 3. 2.11 Selection of public infrastructure subprojects. Kabupaten level staff of PMD (MoHA) routinely survey villages about their infrastructure needs and make the results available as a starting point for proposals by camats and in turn by bupatis (Bappeda II level) and by provincial governors (Bappeda 9 I level), in the yearly bottom-up planning process for the budget. This planning consultation process will be used by the project, but ending essentially at the camat level, in line with current decentralization policies and to leave decision-making close to the village level for village works. The kepala desa heads the LKMD (village community resilience institution) and leads discussion of village group representatives to agree on priorities; IDT program facilitators and other PMD local staff are available to help the process. Village proposals are submitted to the camat, for harmonization if necessary at the subdistrict level, and agreed programs are further checked to ensure that the proposals are not already covered in another, funded program. Subprojects that would normally be included in standard budgets (INPRES) and normally larger than those envisaged here, should in principle not be financed under the project. Camats endorse the program, subject to a satisfactory technical review by the field engineers (see below); the approval should come no later than May 30, 1995 and March 30, 1996 (and 1997 if applicable). 2.12 Field engineers will assist the LKMDs. Field engineers (consultants) are to review the subproject proposals approved by camats, starting as early as possible. They would discuss and make modifications as may be needed for technical reasons, and either give their technical (final) approval, or if an alternative subproject were selected of a different type and cost estimate, then consult the camat again about the alternative. The requirements for approval of a subproject by a field engineer are elaborated in the Project Manual; they are listed below and the specifics shall be recorded in each case, as follows: a) the subproject must be a public infrastructure justified by the number of users and the cost per user; b) the funding available--the village grant and any village contributions--must be estimated sufficient to complete the subproject; c) land requirements will be minimized; for any required land or assets that would affect negatively a villager's income and require compensation, the village and the affected family would agree on a compensation that improved or restored their living standard, income earning or production capacity to pre-subproject levels; the field engineer will verify that all persons affected are satisfied with the compensation provided and if no agreement is reached, an alternative location or subproject will be selected (the field engineer is also to verify that prior to the start of works, all persons affected are satisfied with the compensation provided); d) implementation/contractual arrangements and number of village laborers must be clear; e) approaches to provide subsequent maintenance of the subproject must be agreed, including assignment of responsibilities for maintenance works, training for maintenance designees, and financing, as necessary. 2.13 In line with decentralization policies neither the PMU nor the Bank require to approve individual subprojects. 2.14 Engineering assistance. The LKMDs will be the implementing agencies of the project. The capacity of district agencies (Dinas PU TklI, DPUK) is rather limited and consultants are already needed for some ongoing programs. Therefore the DPUKs have designated "administrative" Pimpros for the first project year, and shall designate Pimpros by March 31 every project year, while the project provides engineering services to assist directly LKMDs with subproject cost estimation, design, procurement, organization and supervision of work, reporting, administration and some training to villagers (and perhaps local contractors) for the implementation of the subproject and subsequent maintenance, in addition to the initial approval (para. 2.12). It is estimated that I field engineer 10 consultant can assist 5 villages (1 cluster), assuming that each village would implement 1-3 subprojects--a total of some 80 engineers for the first year villages and 120 or such number for the second year as may be found necessary when the program is agreed. Field engineers would live close to their village cluster to reduce travel and would have at least a motorcycle for field visits. 2.15 In order to provide homogeneity across clusters, an engineering/management team of 4 senior consultants has initially developed a simple Project Manual including guidelines with engineering and environmentally sound standards for small public works, adopted from existing manuals (mainly from MPW), simple compensation guidelines, procurement forms, procedures and reporting to be used by LKMDs, etc. The senior consultants have also assisted the IDT Secretariat in the selection of field engineers, in organizing a workshop for them (that took place in Bandung, April 24-28, 1995) to launch the project, and will assist afterwards, in their supervision. The team leader and a counterpart with clear responsibilities are based in Jakarta, to assist the PMU in overall management, but are expected to be in the field most of their time. The other 3 senior engineers are based one in each province, to be closer to the project villages, and are also assigned a counterpart each, from Bappedas I, from the time they mobilized. A draft Project Manual and workshop program were reviewed by the Bank in early April 1995, to enable the workshop to take place by late April 1995. The final draft Project Manual was agreed during negotiations, April 18 to 21, 1995; copies of the Manual shall be made widely available. 2.16 Monitoring assistance The project also provides for the services of a team of experts to assist the PMU monitor project implementation and impacts. Monitoring will use participatory approaches to the extent feasible and will be coordinated with the IDT monitoring efforts. Some non- project villages will also be monitored to compare the results of various types of interventions. The terms of reference were discussed at negotiations. D. PROJECT COSTS AND FiNANCING 2.17. The total cost of the project, summarized in Table 2.1, is estimated at Rp.184.2 billion ($83.8 million equivalent). Technical assistance for implementation support is estimated to cost $11 million equivalent or about 13% of the project cost. The direct or indirect foreign cost component is small, estimated at some 20-30% and accounting for the foreign cost component of technical assistance services, including vehicles; equipment depreciation included in contractors' bills; and fuel and asphalt costs. Direct labor costs would range from some 50% to 20%, depending on the works, though the share of total labor costs (including labor in materials delivered) would be higher. The standard 10% value added tax will apply to works by contractors and supplier bills; the total tax amount under the project will depend on the proportion of works done by the villages themselves. Increased administration costs are included at standard percentages (1% for central Government, 1% for provincial agencies and 3% for local level agencies, of the grant amounts). Contingencies have been included for technical assistance costs to cover the event of implementation over 3 years rather than 2. Because of the programmatic nature, village allocations do not carry contingencies. 2.18 The Bank loan of $72.5 million equivalent would finance 86.5 % of project costs. The high financing percentage is on account of the poverty reduction objectives of the project and the fact that the Government is financing other poverty reduction programs on its own. The Government would cover 10% of the village grants and the increased administration costs. The 10% value added tax on technical assistance contracts has been waived in accordance with Kepres 13/95. I Table 2.1: PROJECT COST SUMMARY . ........... Rp billion .............. ............ $ million. Local Foreign Total Local Foreign Total % of total Goods, Works, Services 129.6 14.4 144.0 59.0 6.5 65.5 TA Implementation Support 22.0 2.2 24.2 10.0 1.0 11.0 Increased Administration 7.2 - 7.2 3.3 - 3.3 Subtotal 158.8 16.6 175.4 72.3 7.5 79.8 100 Contingencies 8.4 0.4 8.8 3.8 0.2 4.0 Total 167.2 17.0 184.2 76.1 7.7 83.8 Table 2.2: PROJECT FINANCING ............ Rp billion ................. $ million . Local Foreign Total Local Foreign Total % of Total GOI 24.9 - 24.9 11.3 - 11.3 13.5 IBRD 142.5 17.0 159.5 64.8 7.7 72.5 86.5 TOTAL 167.4 17.0 184.2 76.1 7.7 83.8 100.0 Note: Totals may not add up due to rounding. 3. PROJECT IMPLEMENTATION A. PROJECT COORDINATION AND MONITORING 3.1 BAPPENAS, in particular its Bureau of Regional District and Rural Development, will be the overall coordinating agency of the project. A Project Management Unit (PMU) has been established to oversee implementation and includes representatives of BAPPENAS, the Ministry of Finance, DGs Cipta Karya and Bina Marga (MPW) and DGs Bangda and PMD (MoHA). The PMU has a Secretariat (IDT Secretariat) established to deal with the Government's IDT poverty program as well as related foreign-assisted village infrastructure programs. The IDT Secretariat will be strengthened under the project with experts for socio-economic monitoring and the leader of the engineer/management team; also, a Japanese Grant will finance a team to monitor the IDT program itself. 3.2 The IDT Secretariat, with the assistance of experts, would monitor the impact of the program in selected villages during implementation and prepare an ex-post evaluation. Monitorers are expected to be Indonesian entities such as Universities, NGOs or consultants. Furthermore, the monitoring to be done of the IDT program with the grant from the Government of Japan, possibly including GIS, will be coordinated with the monitoring of this pilot project, and some villages included in other programs or with no program will be monitored as well in order to ascertain differences. Terms of reference for the experts were discussed at negotiations and the project monitoring team should be selected by about July 1995. 12 3.3 Bappedas level I (provincial) have provided counterparts to the senior engineers and will monitor information about the project. Bappedas level II will ensure project coordination with other government programs. B. IMPLEN1ENTATION SCHEDULE 3.4 To achieve the objectives of the project, to maximize employment for cash of local villagers and provision of local public infrastructure, the works should be executed mainly during the dry season, from beginning of May to end September, which is when farmers are not fully employed in agricultural activities, when conditions are best for construction of public works, and when standard public work budgets are not yet released. Therefore, yearly project activities are scheduled around the desired implementation season. An optimal yearly schedule is in Annex 5. 3.5 It is desirable that the subprojects in any village be completed in one year. to curtail the tine engineering assistance is needed. However, after the first project year, experience may indicate that a village program should be allowed 2 years/seasons for completion--the proposed allocation is substantial for many poor villages. A year extension could increase the share of engineering and monitoring costs in the project cost, up to some 18%, still considered an acceptable share given that a needed extension could allow a larger share of the village grant becoming villagers' incomes and reducing contractors shares. However, a longer implementation period may reduce the intensity needed of engineering services, thus not increasing their cost. This flexibility is justified given that the project is a pilot and lessons should be useful for other programs. Thus, the objective is to complete the project in 2.5 years (allowing for ex post evaluation), but it may take 3.5 years. C. IMPLEMENTATION OF WORKS 3.6 LKMDs will be the "implementation agencies" of village subprojects, following agreements signed by the camat and field engineer. LKMDs will serve as contractors; they would either employ villagers directly and buy materials, rent equipment. etc. or if need be, contract work or expertise with local contractors. This procedure has already been used successfully in some cases. Normally the local implementing agency is the DPUK but DPUKs generally have limited capabilities and would be unable to implement the proposed project with their current staff. Thus, the bupatis will authorize the DPUK Pimpros to delegate to the consultant field engineer, and Pimpros assigned to the project will retain an administrative role only; where DPUK engineers are able to help they would of course be welcome to do so. 3.7 The field engineers will assist the LKMDs design, cost, plan, implement and supervise works and prepare reports. They are to certify payment documentation in accordance with progress of work. Field engineers will be trained in project specifics by the central team assisted by staff from BAPPENAS, MoHA, MPW and MoF, at a workshop in Bandung prior to deployment. They have the Project Manual with guidelines for choice of unit price or lump sum contracts, preparation of bill of quantities or set of unit prices (depending on direct labor or subcontract), technical specifications including environmental guidelines to be enforced, quality standards, control activities and other aspects. Special care is needed in the costing of subprojects given that there are no funds to cover any cost overrun beyond the village grant. The project design foresees, perhaps conservatively, that each engineer will be able to assist 5 villages; after experience is gained, it may be possible to assign more villages per field engineer. A senior engineer from the core team is available to advise and to supervise progress in the field. 3.8 Some 300 villagers or more may want to work on a subproject; in surveys villagers indicated a willingness to work for low "incentive payments" provided the works benefit their village and are seen 13 as a public project; furthermore, they would incur no transportation cost nor costs for food away from home. Unskilled village labor would get a lump sum for the task, paid periodically by output; this should result in some Rp.2,000/3,000 equivalent for a full day of work. The pay should not be so high as to attract laborers away from similarly paying activities they would otherwise undertake, since that would not create employment; the wage should be low enough for the poor to self-select for the project works. If more villagers want to work than the works can absorb, an agreement has to be reached in the village as to number of days each interested villager would work and when; the agreement would be reviewed by the field engineer for approval of the subproject. A village foreman (mandor) would be designated by the LKMD for each subproject and be assisted by the field engineer; skilled labor will also be hired as needed, at locally competitive wages. Organizing workers is an important part of project implementation; if found convenient, a contractor can be hired to oversee/manage the works and lessen the load of the field engineer (para. 2.12). 3.9 Java has a large number of NGOs and many are present at the subdistrict and even village level. NGOs are welcome to contribute to implementation of the proposed project; in particular, they could assist villages with community participation, subproject selection, employment plans and other aspects such as monitoring and evaluation. LKMDs can pay for desired NGO services from the village allocation. D. PROCUREMENT 3.10 Procurement under the project is required for goods and works and for consultant services. Procurement will be in line with Bank procurement guidelines and procedures ("Guidelines for Procurement under IBRD Loans and IDA Credits" of January 1995 and "Guidelines for the Use of Consultants by World Bank Borrowers and by World Bank as Executing Agency" of August 1981). 3.lI The engineer/management team, field engineering services, and monitoring and evaluation services are selected at the central government level. Consultant contracts with an estimated value of $100,000 or more for the engagement of firms, and $50,000 or more for the engagement of individuals. are subject to prior review by the Bank. Modalities and status are as follows: (a) Engineer/management team. Terms of reference and a shortlist were agreed between the Bank and IDT Secretariat during preappraisal in October 1994, and a firm was selected in January 1995. The selection was based on submissions detailing the proposed management concept, information system, qualification of experts, and costs/costs bases for the contract. The contract is financed initially by the TA loan mentioned earlier, and later, under the project loan. (b) Field engineer services. A different firm was hired for each province of West. East and Central Java. the latter including Yogyakarta needs, to provide field engineers (field engineers could be subcontracted from other firms). Terms of reference were agreed at appraisal, as well as 3 shortlists each comprising 5 firms. Indonesian firms were shortlisted by Bappedas I and foreign firms were also included in compliance with Bank guidelines. The IDT Secretariat invited the shortlisted firms to submit proposals in early March, and the selection for the first project year was completed in April 1995. (c) Monitoring and evaluation services. Terms of reference for monitoring expertise were discussed at negotiations. A final set of TORs and a shortlist would be agreed shortly thereafter. 3.12 Subprojects. It is expected that LKMDs will carry out most works by direct village labor (community participation) under implementation agreements with the DPUKs. LKMDs may also contract supplies of materials, rental of equipment, and small works by local contractors following national 14 shopping, procurement of small works or direct contracting procedures. No international competitive bidding is envisaged. Simplified implementation agreements and documentation for national shopping and direct procurement have been agreed and included in the Project Manual (Annex 6). National shopping will require 3 quotations for each proposed contract. No contract or agreement would exceed $55,000 equivalent (the village grant of Rp. 120 million) and most contracts are expected to be below half that amount. All works may be done by community participation; nevertheless, procurement under national shopping or small works procedures may total up to some $5 million each, and direct contracting are also allowed for contracts up to $10,000 equivalent each, up to an aggregate amount of $10 million (see Table 3.1 overleaf). These procedures are in line with the Indonesian government procurement rules; under Kepres 16/94, Pimpros can approve, on their own, contracts up to $250,000 equivalent. Field engineers will help the LKMDs, as may be needed (i) organize village labor including pay setting, (ii) hiring equipment, (iii) purchasing materials and tools; or (iv) contracting out. Works would not start until any required compensation for land or assets in the village has been made as mentioned in Annex 9 and the Project Manual. Contractors will be required to use village labor. The Bank does not require prior review of proposed contracts, given their small amounts and their large number, the need for quick approval, and the safeguards built-in in the project design (consultants will be in place to assist (field engineers) and to supervise (engineer/management team) the process, and further, audits and Bank supervision will be conducted, as well as random ex-post review of SOE documentation). E. DISBURSEMENTS 3.13 Retroactive financing. As the Bank loan may become effective at the earliest in July 1995, in order to start field engineering services in April and village subprojects in May 1995, to take advantage of the dry season that is best suited for works, through a letter of the MoF dated April 17, 1995, the Government made Rp.20 billion prefinancing available in April 1995 and until proceeds of the proposed loan become available. The Bank proposes to provide retroactive financing for project related expenditures incurred after January 31, 1995 and before loan signing, up to a maximum $7.2 million equivalent. 3.14 Disbursements at local level. For reasons of cost efficiency, the project will pay for output (itemized works) against measured progress and prorated lump-sum contracts. Following the procedure adopted under the Government's IDT poverty program, by instructions of the Ministry of Finance the Bank Rakyat Indonesia (BRI) unit closest to the village will be allowed to disburse the village allocation, against bills certified by the field engineer. The field engineer will forward the implementation agreements, certified by the camat, contracts and certified bills to the administrative Pimpro in DPUK, who in turn will forward a copy to the respective KPKN. LKMDs will be paid at the BRI units when presenting their bills certified by the field engineer, according to progress of works. Village laborers thus would be paid in cash every 2 weeks or weekly. BRI has agreed to provide simple monthly statements for the LKMD accounts, inter alia to the field engineers. The fund flow is shown in Annex 3. 3.15 The Bank will not be involved in the approval process of every contract and disbursement at the village level, but will inspect contracts at random during supervision of the project. The engineer/management team will supervise the subprojects while visiting every project village at least once, on behalf of the PMU. 15 Table 3.1: PROCUREMENT ARRANGEMENTS (US$ million) a/ Expehditure Category Other b/ NBF c/ Total Cost Goods, Works and Services under Grants 65.5 65.5 (59.0) (59.0) Consultant Services 15.0 15.0 (13.5) (13.5) Increased Administration 3.3 3.3 Total 80.5 3.3 83.8 (72.5) (72.5) a/ Figures in parenthesis are the respective amounts financed by the Bank. b/ Includes work by community participation (up to $65.5 million), national shopping and procurement of small works (up to $5 million each), and direct contracting (up to $10 million), and selection of consultants following Bank Guidelines for the Use of Consultants. c/ Not Bank financed. Table 3.2: DISBURSEMENTS Category Amount Disbursement Rate (US$ equivalent) (1) Goods, Works and Services 59,000,000 90% (2) Consultant Services 10,000,000 100% (3) Unallocated 3,500,000 72,500,000 IBRD Fiscal Year 1996 1997 1998 1999 Annual 30 35 5 2.5 Cumulative 30 65 70 72.5 3.16 Bank disbursements. The loan agreement includes 2 allocated disbursement categories, (i) for expenditures incurred by project villages for goods, works and services under grants, at 90%, and (ii) consultant services, at 100%. In order to facilitate Bank disbursements, the Government would establish a Special Account up to an amount of $10 million in Bank Indonesia. This account should be maintained by the Directorate General of Budget, MoF. All disbursements from the Bank loan would be made through the Special Account. Since the majority of expenditures under the loan are small local currency payments, the 30 days advance from the SA facility will be used for this project. That is, the borrower can draw an amount from the SA sufficient to meet eligible expenditures for a period of less 16 than 30 days. After expenditures are incurred using the advance under the 30 days facility, the borrower should submit a request for the replenishment using SOE procedures. A bank reconciliation statement should also be attached showing inter alia, the deposit received from the Bank, the date on which each advance was made and the amount awaiting documentation from BRI. Replenishment applications to the Special Account will be made every two weeks or when 20% of the initial deposit has been used, whichever is first. The GOI has agreed to make available its Transition Account in support of foreign financed projects, to support also the proposed project in case the SA is temporarily short of funds. Statements of expenditure (SOEs) would be used for the technical assistance category, for all contracts for consulting firms costing less than $100,000 and individual consultants costing less than $50,000. Documents supporting the SOEs would be retained by respective project implementation units and made available for review as may be requested by visiting Bank missions. The loan will not fund any land acquisition. The disbursement schedule is shown above. F. PROJECT ACCOUNTS, REPORTS AND AUDITS 3.17 The project allocation per kabupaten would be inscribed in the yearly local budgets, SPABP/APBDII, for recording purposes. 3.18 As described in the Project Manual, monthly project accounts will be provided through various sources: a) BRI units involved would prepare monthly statements covering monthly disbursements and cumulative totals for each project village, and give a copy to the village/camat and to the field engineer/Pimpro; b) field engineers would prepare monthly statements on physical progress and value of works in their village cluster, and disbursements based on the BRI units' statements, and submit them to the senior engineer; c) the IDT Secretariat/TA team would consolidate the monthly work-related statements by kabupatens every month and check with BRI statements for consistency; d) DGB would provide periodically consolidated statements per kabupaten, province and total, for reimbursement by the Bank, copied to the IDT Secretariat for information; and e) villages would keep track of their funds via the BRI statements posted at the offices of the kepala desas, camats, and BRI unit, and data also posted on employment, outputs and remuneration compiled by the kepala desa/field engineer. 3.19 Periodic reports will be provided as follows: a) the IDT Secretariat will prepare short quarterly reports and an annual report by end March, including progress per category (roads, water supply, piers, bridges, others; and labor, materials, contracts); b) the DPUK Pimpros will keep copy of certified statements to account for expenditures related to the APBDK allocations and will compile an annual report for Bappedas 11; and c) the IDT Secretariat would report annually on project progress and on implementation of the Government's Action Plan. 17 3.20 Confirmation was obtained during negotiations that the above reporting system. as included in the Project Manual, will be complied with. It was also agreed that the consolidated project accounts, including the Special Account and the SOEs, would be audited annually by independent auditors in a manner satisfactory to the Bank and that the audit report would be submitted to the Bank no later than October 30, commencing in 1996. The audits will be joint responsibility of DG Budget (MoF) and IDT Secretariat. The Bank would have no objection to BPKP conducting the audits. Financial audits would be conducted randomly, but should cover at least 2 subprojects in every kabupaten (10% coverage). In addition, assurances were obtained that independent auditors will be appointed for technical audits of project implementation aspects in a manner satisfactory to the Bank. The financial and technical audits would be made simultaneously for the same subprojects, and start early to avoid bunching. Terms of reference for the audits will be agreed with the Bank. G. PROJECT MONITORING AND BANK SUPERVISION 3.21 Physical progress as well as other aspects of the project will be monitored following forms and indicators included in the Project Manual. The indicators to be used were agreed at negotiations, as part of the reporting/monitoring system. Participation of the poor--man-days of employment, average and total pay to labor; physical works--such as kilometers of access roads built, effect on farmgate price levels -- public transportation costs. Any land and compensation matters, environmental effects, quality of selection and implementation of works, are to be reviewed and reported on a sampling basis. Comparisons will eventually be made with costs/results of other types of interventions. The indicators for monitoring the project were agreed at negotiations, and a sample is in Annex 7. 3.22 The IDT Secretariat would make available to the Bank the progress reports mentioned in the preceding section. The Bank would supervise the project via 3 visits per year to selected villages, BRI units and other relevant agencies to review all aspects of progress, such as local employment, costs and progress of work and impact on beneficiaries/the village. The Bank and GOI would undertake an in-depth review after the first year implementation around February 1996; any adjustment deemed necessary will be made following the review. A Supervision Plan is included in Annex 8. H. LAND ACQUISITION, RESETTLEMENT AND CONIPENSATION 3.23 No physical displacement is expected to take place under this project. Subprojects requiring displacement will be redesigned to avoid resettlement or alternative subprojects must be proposed. The infrastructure to be financed is generally of a small scale. Installations for a public source of drinking water, a tap or a pump, do not need much space; small pipes--may be no more than a hose--if needed to bring water from a natural source cause little disruption on land use. All weather access roads would normally be built on existing access paths, and would be no more than 3 to 4 meters wide. This width may exceed an existing access by no more than a meter. Since houses are normally set back from roads, impacts would therefore be minimal. In those cases where houses are partially located within the widening area, house owners normally agree to move them back because houses are normally temporary (bamboo) structures that can be moved relatively easily, and property values increase significantly once roads are built--owners could sell the property later at a profit, as there is an active land market on Java. 3.24 Economic impacts caused by land acquisition are also expected to be slight for the same reasons. The Project Manual mentions the need to keep land acquisition to a minimum. Traditional processes of voluntary contributions will be followed in villages where some land is unavoidably needed. To minimize peer pressure risk, however, where land needed exceeds for example 20% of a villager's plot, the affected villagers will be given replacement land, other equivalent productive assets or other in- kind compensation as negotiated during the village consultation meetings (normally common-tenure land is used for compensation). If a solid structure has to be demolished, the village would provide materials 18 and help build an equivalent structure. Subprojects that involve compensation of this nature for land or other assets will not be approved by field engineers unless adequate compensation arrangements have been agreed by the villager affected and the LKMD, and compensation should have been made prior to the start of work (para. 3.12). In the unlikely event that a larger number of persons were negatively affected due to a subproject (e.g. more than 200 each lost more than 20% of their land or assets) and the field engineer found no alternative that would reduce the number of affected persons, then Bank approval of a related compensation/resettlement plan would be sought prior to proceeding with the subproject. In case of disagreement, affected villagers can complain to their field engineer and camat. They can also complain in writing to the P.O. Complaints Box 5000 instituted successfully for the IDT program (para. 1.7). The criteria have been agreed with the Government as summarized in Annex 9; they are included in the Project Manual. The above criteria are consistent with the Bank Guidelines for Involuntary Resettlement (that include both physically relocated as well as only economically affected persons; the proposed project foresees only the latter) that require that negatively affected families have their standard of living improved or at least restored to pre-project levels. 1. ENVIRONMENTAL IMPACTS 3.25 The project has been classified in environmental category B. The scope of village subprojects will be relatively minor, as mentioned in para. 3.24. Access roads would be built with appropriate alignments, cross and longitudinal drainage and gradients to lengthen the road life and minimize erosion that higher standard roads may create. With an all weather access to each village, use of some alternative earth tracks may be reduced thus lessening erosion along the tracks. Better provision of water in the project areas which are normally short of water in dry seasons should have a beneficial environmental impact and may even help grow vegetative contours. Overall the environmental impact is expected to be small and mostly positive. Given the progranumatic nature of the project and the small environmental impact expected, no environmental impact assessment will be prepared up front. Progress reports would indicate any problems encountered and solutions adopted during implementation. 3.26 Standard designs and criteria have been prepared in the past by DG Bina Marga and DG Cipta Karya for such small works; these designs incorporate environmental guidelines. The engineer/management team for the project have reviewed the standard designs and guidelines and prepared a shorter Project Manual for easy reference in the field. The field engineers are to incorporate sound environmental criteria in designs of subprojects and verify their compliance during construction supervision. The draft final Project Manual was agreed by the Bank at negotiations. 3.27 Field engineers are also to explain to villagers the importance of maintenance and how to maintain the infrastructures built under the project, for the works to last and environmental sustainability. A maintenance plan would be prepared in each village. 4. PROJECT JUSTICATION AND RISKS A. JUSTIFICATION 4.1 The Government wants to accelerate poverty reduction in Indonesia and has assigned a high priority in the Bank's lending program to assisting its poverty program. The project provides a direct means to reach poor villages, potentially faster and enabling a higher share of the funds to reach the poor, as layers of agency involvement and supply delivery costs are reduced. By directing the funds to community selected infrastructure projects likely to also be implemented with self-help, the community sense and productivity of the poor is expected to increase and allow the poor to participate in economic growth while contributing to it. Also, the project focuses on infrastructure where implementation effectiveness is generally higher. 19 4.2 Many ongoing programs already focus on the outer islands. Assisting poor villages in Java improve their infrastructure is justified; villages on Java have larger populations so that more people will use and benefit from infrastructure there, and construction costs are generally lower on Java than elsewhere--meaning that more can be achieved with a fiscal dollar targeted on Java. Furthermore, while the overall poverty incidence may be lower on Java than elsewhere, on Java the poor are more numerous and may be relatively concentrated in smaller areas that can be targeted and where the cash may be more easily used in a productive way than in remote, outer island villages. According to the SUSENAS expenditure surveys, some 9 million absolute poor live in rural areas in Java; and according to the PODES surveys, one third or some 6000 of the villages on Java are poor and comprise some 18 million people. According to various sources, Java has a higher than average infant mortality and high malnutrition. While not all the absolute poor live in the poor villages, addressing the needs of the poor villages facilitates targeting. 4.3 Project beneficiaries would exceed 3 million. The population of the 415 villages selected for the first project year totals some 1.1 million--the villages average some 2600 residents, varying from 700 to 10,000 residents, and the average area is 500 hectares; even though they are "rural", population densities are high in the villages: more than 4 persons per hectare in West Java, almost 7 in Central Java and almost 6 in East Java--and not all the land can be farmed. The population of the 1200 poor villages to be assisted under the project would total more than 3.3 million, living on some 650,000 ha (6500 kin2). Furthermore, poor laborers from outside the project villages will also benefit: materials such as stone, gravel and sand for road surfacing and works normally have to be procured from outside the villages, and it is normally poor landless laborers who work in quarries. The project cost per beneficiary is about $25 equivalent. 4.4 Employment and cash compensation to village laborers is an important feature of the project. Many villagers in the selected poor villages have just subsistence livelihoods, with a minimum of cash incomes that however are necessary to buy clothing, medicine, school materials, transport services and other necessities. Many are living with no more than $100 equivalent per year. The cash to be earned under the project should provide an important addition to the poorer household budgets; works can be scheduled so as not to interfere with other income earning activities. With the cash earned, villagers ought to be able to improve their assets and current consumption. More of the funds would actually reach the poor villagers compared to funds under other targeted public programs with higher delivery costs and less self-targeting. 4.5 Labor-intensive methods are also efficient for the public budget. Villagers are willing to work for the equivalent of about $1 per day, and at that cost labor intensive methods are competitive with capital intensive methods for the simple type of works envisaged. The villagers will have to undertake to maintain the village facilities to be built under the project; but having participated in the building, and because the infrastructure is for their own benefit, in surveys villagers have indicated that they would do the maintenance, provided they are taught how to. If the project proves successful then some funding under current top-down programs could be reassigned in the future to similar local decision-making and labor-intensive implementation projects--neglected kabupaten road maintenance and even improvement would be a prime candidate for the shift toward a lengthman system. 4.6 In addition to employment benefits and reduced unit costs of works, the assets to be built under the project have high rates of return, exceeding 20%. A majority of the funds will likely be used to build all weather access roads and bridges--many of the poor villages lack a good connection to their kecamatan center; at some 2,500 persons per village paths have considerable traffic--several villages may also use a common access--and their upgrading to all weather passibility has good economic returns. The provision of drinking water, as demonstrated already in other projects, also has high returns. Examples of the high returns to providing all weather access roads and bridges are illustrated in Annex 10. Field 20 engineers will verify that subprojects have a minimum number of beneficiaries and a maximum cost per beneficiary. 4.7 It is hoped that villagers can gain some technical and administrative knowledge with the program; furthermore, villagers would be trained to undertake maintenance works, that have high returns, during the one year, perhaps two, that the experts will assist each village. As Java is densely populated, all weather access would make possible/affordable commuting from the village to nearby jobs and slow down outright emigration from rural areas. B. RISKS 4.8 Being an innovative pilot for the Bank, the project could be assumed to entail considerable risk. However, the risk of "wrong" projects being chosen in villages seems small given that consultations processes are involved anid it is in the interest of the village to do the most with its allocation. The risk of fund diversion seems to be small, given that funds will go directly to the beneficiary village, the program is transparent and controls are in place for uses within the village. The risk of using labor- intensive methods, generally more difficult than capital-intensive methods due to logistics involved, is worthwhile confronting in order to promote paid employment in poor rural villages deficient in small infrastructures. Self-help projects and small local contractors already often employ labor-intensive methods, and the engineering inputs foreseen under the project should help enhance productivity levels and improve quality of designs and works. A focus on quality output should hopefully give an example to follow subsequently in other works. Furthermore, cost savings would compensate risks of labor intensive works. There is also a risk that the project cannot be implemented as fast as scheduled due to absorptive capacity constraints, but the project would allow extending the program implementation and the technical assistance; the project also allows flexibility in adding villages if found justified. There is a risk of subsequent maintenance of the infrastructures being faulty; however, the villagers are the users and the infrastructure sustainability will be of prime concern to them. The field engineers are further to impress on villagers the low costs and high benefits of maintenance, maintenance practices, and as necessary, identify sources for financing future maintenance. During project implementation, independent monitoring, audits and supervision should all help identify problems and take early corrective action. 5. AGREENIENTS REACHED AND RECOMMENDATION 5.1 The following was agreed at negotiations: a) Village coverage: villages for the second year program starting in 1996 shall be selected by September 1995 and the village list (and an eventual third year list) will be reviewed with the Bank in December 1995 (para. 2.8); b) Project information dissemination: villages selected for the program will be informed no later than April 1, 1996 and if applicable, 1997 and be provided with public information about the program (para. 2.9); c) Government staff: Bupatis would designate Pimpros TkII in the selected kabupatens by March 31 every project year (para. 2.14). Camats would endorse subprojects by May 30, 1995 and March 31, 1996 (and 1997 if applicable) (para. 2.11); d) Project Manual: a Manual comprising implementation arrangements and procurement formats and procedures (para. 3.12), reporting formats (para. 3.20), project performance indicators to be used for monitoring (para. 3.21), guidelines for compensating negatively affected persons (para. 221 3.24), environmental standards (para. 3.26), maintenance provisions (para. 3.27), and subproject selection criteria (para. 4.6), was agreed; and e) Audits and mid-term review: financial and technical audits would be conducted no later than October 30, commencing in 1996 (para. 3.20), and a mid-tern review will be conducted about February 1996 (para. 3.22). 5.2 With the actions already taken prior to negotiations and the above confirmations, the project would be suitable for a Bank loan of $72.5 million equivalent with a 20 year maturity including a 5 year grace period at the standard Bank's variable interest rate. The Borrower would be the Republic of Indonesia. L - <2 ! ^ L ;j_ '.' JO-'~~~ I ' Cst' Z .'"' < ' ''')~~~~~~~~~~~S IE_AR J 25 Annex 1 INDONESIA VILLAGE INFRASTRUCTURE PROJECT FOR JAVA Characteristics of Java Provinces Absolute Total Poor in Rural Villages Average Population Rural Areas of which No. GDP/CAP. 199213 1990 Total Poor extremely Kabupaten 1990 Province million million poor 000 West Java 36.4 2.4 6,645 1,555 212 20 790 Central Java 29.0 3.3 4,180 2,427 282 29 685 East Java 33.1 2.9 6,976 1,946 239 29 897 Yogyakarta 2.9 0.2 393 111 32 4 653 Subtotal 101.4 8.8 18,194 6,039 765. 82 756 % of Indonesia 54.0 48.9 27.8 29.2 33.7 86.3 Indonesia 187.8 18.0 65,554 20,663 243 876.0 Area Cultivable area Roads km2 1992 000 % pop/lan2 km kM/kAM2 CUlt. West Java 46.3 76 1,029 15,180 0.43 Central Java 34.2 90 943 15,315 0.50 East Java 47.9 81 847 17,042 0.44 Yogyakarta 3.2 90 1,025 3,178 1.10 Subtotal 131.6 84 961 50,715 0.46 % of Indonesia 6.9 14 397.1 28.0 Indonesia 1,909 41 242 181,266 a/ Rp 5.5 million per desa. including Rp I million to the KKP (women's group) 26 Annex I Table 2: Access Roads, Piers and lDrilking Water Needs in Poorest Villages on Java j1 Ro,ads and Water Piers Tota * No. in Roads Water b/ No. In No. Villages Dlstricts km bo RP bo Rp. VlUuage Districts Piers bo Rp. bo Rp. West Java 212 19 1,076 37.7 9.6 76 1 1 ISO 0.9 48.2 Cenlral Java 282 27 1,370 48.0 14.6 31 13 S5 OA 63 Yogyakma 32 3 143 5.0 1.8 2 1 2 0.0 6.8 East Java 239 27 1,233 43.2 11.8 69 9 92 0.7 55.7 Total 765 76 3,822 133.9 37.8 178 34 299 2 173.7 % of all poor 13% 79% 16% 100%e villages Source: OECF fimae study, 1994. ui Exicemely and very poor. b/ I scheme per villae - ram. surface or pound water. Table 3.: Poor Villages on Java by Type of Access Road a/ NUMER OF POOR VILLAGES Extremely Very Moderate Potential Productive Total Poor Poor Poor With ........................... .t............ _ e9s rd ac s. West Java 158 233 96 19 2 508 Central Java 80 134 114 47 4 379 Yogyakut 0 0 0 0 0 0 East Java 127 246 177 44 7 601 Sub Total 365 613 387 110 13 148 _ . _ .....wihi gravel roed access .......... West Java 146 275 137 26 3 S87 Central Java 239 566 450 129 9 1393 YogyUuxta 4 15 18 11 4 52 East Java 197 352 209 65 9 832 Sub Total 586 1208 814 231 2S 2864 Total. 951 1821 1201 341 38 4352 Soiuo OECF flaed study, 1994 aI Both ral md Uwbenvilag 27 Annex 2 INDONESIA INFRASTRUCTlURE PROJECr ror POOR VILLAGES on JAVA Proposed Kabupatens for First Year Program Total Selected in Clusters Priority of which of which Province Kabupaten DTs DTPs DTS DTPs West Java 1,357 178 - Pandeglang 167 33 30 23 Lebak 177 49 45q 41 Sukabuni 58 10 5 3 Cianjur 96 15 10 7 Garut 60 8 10 6 Indramayu 90 12 5 3 Serang 140 13 15 9 Subtotal (7) 788 140 120 92 Cental Java 2,241 271 - Banjamegara 101 18 20 14 Kebumen 178 38 30 21 Purworejo 150 25 20 14 Wonosobo 108 12 10 7 Grobogan 85 18 15 9 Rembang 125 20 5 3 Pati 84 22 10 10 Batang 141 28 35 24 Subtotal (8) 972 . 181 145 102 Yogyakart 92 25 - Gunung Kidul 65 21 30 20 Subtotal (1) 65 21 30 20 East Java 1,737 210 - - Probolinggo 87 11 10 6 Pasuman 103 16 15 10 Nganjuk 85 8 .10 7 Bojonegoro 147 25 20 14 Bangkalan - 164 38 30 21 Sampang 104 20 25 17 Sumenep 118 25 10 8 Subtotal (7) 808 143 120 83 Total for priority kabupaten (23) 2,633 485 415 297 Total for Java (82) 5,427 684 Soure; Bp ,m IIT Scctada lyr: por villa DTh. extmey poor vblae 28 WEST JAVA, VILLAGES IN FIRST YEAR PROGRAM (showing kabupaten. village name, population and PODES score) KABUDATEN: PANDOGLANBS KAUPATEN: L2AMK . KIAIATEN: cIA5MM >I KeCAUATAN OERA PINDOUK TOTAL KECAUATAN OwRA PENOULDUK TOTAL KECAMATAN DIsA PrNOUI TOTAL PANISGO KIeTARATMARJA am 3 CPANAS LEBAK GEDONG nu1 4 KADLWANOAK PASNOALES 31 S3 SUNJiL CfNANIO 3421 38 CPAANAS LISAKCrrU 2D4 41 KAOUPANDAK NEOLARAI 4432 32 MLINJUL SIMLA (AAN 23 41 CrANAS LeBAK AmaKA 1e15 3Y KAOUPANDAK RIAJUK TA 7613 30 SuILJL PAoAMClLVA 1m as CVANAR PASR HMALR 30m 36 KAOLWANOAK WARGA NMI 2n47 ST SMiSu L PADAISAIG 1473 32 CPANAS R ONLAVA JD1s 37 KADUPANDAK SOJONOKA4 no 47 SIANJL PASO LANCAR S 32 SUNCANG CELESANG 16D7 3 CISEBER CeOKO? am 35 SUWAS. 5INDANO REr 1W47 36 SUNCANG COtOPANG 125 38 CmEER SALAGROANG OI 47 SWUIS PASIN OURUNOG tm 4a MUNCANG SUKAUAJU 2S76 34 CloeER hISIS.4YA 1431 38 uwJu.L YAMU MALAn 1717 3Y MUNCANG SAJ"APAI 740 37 coaSER CISANGOU 4735 40 PAG.ARAN TURUS am 36 YUUNCANO 5 UKA4AYA 1873 37 CUEeRa RUKARAIARJA SW 41 PAGeLARAtN IOAMAN 154 3 MUNCANO ROSANG 3006 3y KAULATEN: GAauT PAaARAN CLAM tow 34 MUNCANG HMARING 2672 36 PAGIARAN SILAGOR 2005 3y MUNCANO KARANG COSSONG 2307 33 KECASATAN OESA PENONUK TOTAL PAGeLAAN SUAARTA 166O 3 MUNCANG PASEINANOKA 1870 34 PAoILARAN HARAPAN KARYA 1310 36 YUNCANC CW.ARANG 3511 33 PAKENJENG NIGLAMI 3480 30 PAKINJENG WANGOWJAYA 3777 41 PAOELAAAN RANAYU 1800 3D MUNCANG t UKANAGAARA 167 38 PAMLLI4HAN LINGGAAJA1An 3 34 PAGELARAN CIKLUVA 2737 36 UUNCANG SINOANOWANOI 4330 31 PAMULIMAN OARUSUMLM 236 3 PAGeLASAN TEOAL rPAPrAK te O CIMARSA MAPR ALUrU 4U 37 PASLLIHAN PANAWA 1104 4u PAGLARAN 9INANGSRI 141 Ys CIUARGA SANGMG JAYA 22U 37 PASILARAN SINDANG LAVA 1ns 40 SAJtA CALUNGSUNGW 3738 3Y SINGAJAVA JaYAMtla 371 3 INGAJAYA GNUUKn 2te7 42 SAVn CSIERANS AYA la" 36 CUARGA MAROATUTA 3474 42 RINOAJAYA 3UKAUILYA 5115 36 SAXLln RAWM NEQARA 17n1 3Y CISARGA GUNUNG A4TeN SON 40 3ANJARWANGI TALAGARMI 5140 41 AKen KAOU HEMM to 41 CIS ARGA GIRISUIT 3467 3Y SANJARWANOI PACAIUMP 4844 36 IAK-n SANONIANaO 01EK lisi 34 C OIARGA TeN AYA n5161 3 SAiETn CtLENTUNO 2g 42 CIMARGA KARYA JAYA 3477 37 KAILUATEN INOtAAAVU Y,' SANJAR UKAS JAVA 18 * RANCKAS SWTUNG CLNOKAP 3010 35 KECAMATAN DORA PIDUDCIK TOTAL NAN KAOUAANOKUNG 140a * RANOKAS SWTUNG SAN0IANG TANJUNO 23 1 SANAR MDONG 207 Al RANo rUNG PASRsE TANJUNG RO n L04SINER TAWANOSAR 141 34 BANJAR RUKAULYVA 1242 S7 RANOKAS SWUNO SUKAUEKAItRRI gm 63 LONSENER CIDIMPET 151 48 BAN JAR SANDUNG IsO Ys CISADAK TAUSAKSAYA 3364 33 SINOANO CANCKRSe 2n7 a mOANO CANTIm KUON gig Y RANGAIS 51TUNO KOLELET wMLAN 1r 37 IRNDANG CANTIU WETAN Sa8 l CUAGAK SALASAR 474 COADAK *oJoNORe nY6 3Y KA IPATEN: SERANU 4 t COADAK CSANCU 1437 as CUACAK ASKE 3837 3 KCCAYATAN DeOA PENDutOLK TOTAL AAA SeKARWANR21 2a1 35 SAR3OS UKAMINAK and a YAJA CLURU SWuNG 2430 Ss BAROS TAWaS 1m 1740 S MAJA C$IURUY 3182 41 BAtO CIURU A&U4 16 48 MAJA MAYAK 170 36 BASOS SINDANG ANa 2 SAJA CLAYANG 3Y SAROS CSALAM 2 AAJA CLANOKAP am 37 PANARAYAN KEON CAU 238 S SAJA PA5IN KACAPI 5017 37 PAMARAVAN PUOAR _AJA ClWnIN 1737 3Y PAMARAYAN PA I LUS 4616 0 MAJA CIDADAP Cm Y PASARAYAN SANDER star 34 SAJA TANJUNG SARI 2248 7 KOPO PASPETNo 4 4 KAauPATEN: SUK4AUYI PASIARAVAN PANANPSG 2JY4 3 PAYARAYAN ANOUNG 4Y 42 KECASATAN OCSA PENOIOUK TOTAL PAMARAVAN SLOKANG 2 3 PA&IARAYAN SASAKAN 1731 2 JAUPANGTENSA* CWTAJ4AJGO PAMARAYAN PRINS WLLUMa 242 30 NYALINOUNG MEKARSARI 3812 38 k IS-twAl 16 NYALINDUNO CISITU 3774 NYALINOUNO SUKAMAJU 404 38 NYALINOUNO WANOUNREJA son 48 29 CENTRAL JAVA, VIAGES IN FIRST YEAR PROGRAM ZhUMPAMLwa; (showing kabuPaten village e, populaon and PODES score) KASUPATEN: RANJARNUaArA .RA KCCAMATAN OUSA PENDUOUK TOTAL KABlUPAT!N: PUSWORSEJo KASuPATSeI iiU*AII4Z SAWANC OLDEN 2243 37 KECAMATAN OCSA PENDOUK TOTAL KECAUATAN DMS Pr6144 Tr SAWANC LUSAK WANGI 364 30 SANJARNEOARA GUNUNG JATI l1 44 CRABAG UKit SR 12,11 SARANG IT"JO 1 SANJARNEIRA KESUTWI DUWUR 43 41 ORABAG KCRTO JAVAN 674 so ANG PLAN I SANJARNEGARA PASANCKALAN am 36 0RA5AG DDUKULLON 7m 44 SARANG GLIB16o GRASAG SAKU REJO 167t 4t SRANG SINWLS UD 16 *ANJARM4ANGU PRENDENGAN 213J * GRASA2 TR1ULYO *40 SPRANG AA StLYO 16 CANJARMANGU MAJATENGAN 7:2 23 KARANGKOSAR GUMELAR m 42 GRASAG SUUCCSR AGWOO a3m 44 KASURATCN: PATs WANAVASA SUWIOAK Is" 24 GRABAG NAUSANGAN 66 0 WADAYASA KARANG TENGAH 164 Sy SRASAG SENOUNGAN 5 4a KECAMATAN OUSA P310434K T SUTUM KEOUNG SIULYO 1U2 2 PUNOGELAN TLAA 416 3 SUTUN LANGOA SEJO 1317 so PUNCATKWANGI WATU MA 1617 KALIENING PANDAN AMUM 2136 41 FUNCAKWANG LLUSUBG MAS 31 KALSENING A53NAN UsO 36 PRIUfHL KALIJERING 1617 23 UNCAKWANSI SMIALYO am KALEENING PASEQSSAN 5475 *7 PRTIRUH so0O GEDE 14" 3 PtUNCAKWANSI Ktlt. US KALIDENING PINGfrLOR 2034 32 PITAUI4 KALIGONOANG 664 u PuNOCAKWANGI TrS lo61l1 PITUIUH KALI GINTUNIG 2116 2 PEJAWARAN SITING 1624 23 PrTUSUM SAWANGAN 1367 ST JAK3NAN SSUWMLGO 1746 PEJAWARAN TLAHAP 16 43 JANAN SOIANSSGKS 1o" PEJAWARAN OARMAYASA 2l 4J KE4IM WONOSUKO t JAICNAN TLOGOR 1 PEJAWARAN SEUANOKUNG 1173 *3 KE4AI OLES 1 * JAKICNAN N UAST D 104 PEJAWARAN KARANOSARKI am 3 KEMPRI o'ro IW 4 JAKUENAN KARAN@OWD 766 BRUNO PR13O 3141 as KASUPATEN: KEUMEN GUANIG KALICTENGKEK 11J7 KASUWATEN: RATANG KECAMATAN DESA PENOUDUK TOTAL KASUPATEN: WOlOSORO KECAMATAN DMA PINUUUK T0 SUAYAN SIKAYU 4R J 1 KECAMATAN OESA PRNWOUK TOTAL WCNO TUNGOPO PUNANEAN S UAYAN KARANOS3AI 1366 36k UG" M AA SUAYAN ROGOWONO 274 J LENSOMO PLODONGa 1674 s TIL LAsS AM 61 SUIAVAN SEMAMPER 3142 41 LSICONC aUWI%WANGU 66? 23 TILES TIAINI 13n7 SUAYAN JOGOUULYO am 31 LEKIONO GARUNG LOR 1716 2 TI common 127 AumAL PLEMPUKAN KEMBARAN 104 4 LEKSONO SURA UDANA 3s * SANOM P5313K 4775 AuMAL KAISON PETAD4GKLtAN 1W n UANOAN slaw IS AMBAL SLENGER WETAN 1W 32 LEKSONO KALSENING 146 2c SUAN PncALA IS A . SLUENBER KMLON 23 41 WATUMALANQ WONOSAOYO 3617 S4 USAN AH1 3t46 AumAL SIESE WETAN 1814 so WATUMALANG SuSAAWANG MAIL #177 a SUSAN MUJNSON 1low WATuMALANG BANYU KEMAR 8312 44 PSESUN SAMAYU 1347 n WATUMALANG WATUSALANG s 2 LAOO 757 PRESUN SINOANGDALEM 2301 SLADO A I _ ALIAN SOKA 24 3 KAiUwAeN: ROmsosAN *LADO cowo 1s61 ALlAN ILOGOONLUMO 1413 37 BLABO SISAM 1666 ALLAN KALiPUN 307 2J KDCAMATAN DESA PENBUOUIK TOrAL BLAOO 53A4N1 -ns ALLAN FESALAKAN Sol 2 UN04An so 1112 K1OUMOJAT pj 3141 23 SUAN MOMT6 I70 ALLAN JATruRus 32 KEOUN TJAT NOOMAK 247S 42 ROSAN O5t3WAN gm ALIAM LEREPKESUMEN Is" 27 KEWUNGJATI KENTEN3ASI 236 4a as"AN n065o 1 ALLAN SLATER 14739 4 KEOUMNJATI PANamO ai16 66 SAWANG PUANTU uP.4 KEsUMEN ROWOREJO 316 23 KEDUNM PAOAS n .2 * AWAN WKIUDSJO t PEJAGOAN WATILAWANG 1l 27 KEUNaGJATn OUSAS m n SAWANG CANDI aGuR KARANG GAYAM LOOANDU U 4J KEDUNGJATI KtITAN 4" 44 EAWANG PANSON 66 KARANa GAYAN KEsAKALAN 245 ST KEOUNGJATI KAULMAS 4m 34 QAWANG gm lm KARANG GAYAM WONOThTO 25 42 KEDUNQJATl JUNO 2431 44 SAWANi GM KARANG GAYAM KALEENING a 2 4 KCOUNGJATI WATES -m * AWANG AU SRUWENG SIOOAGUNG "it 42 PENAWANGAN KARANQAWAOE 3113 2J LOPUNG KflA 134 SRUWENG DONOSARI 2ns 2 PENAWANGAN LEYANGAN 3440 36 LUSUN5 DUAS Is" SRUWENG CONOG CAMPUR 124 2 NAWANGAN WAT PAWON 16 3 SUSAN KARANCGTOMSA a" SRUWWNG PENUSUPAN 1306 42 PENAWANGAN TUNWGU 1SS6 41 SUSAN 1ama HASIJO am KARANG ANYAR IRMUNNO 264 23 PFENAWANSA JANG g an JUAN a TIUIOLANA MARJUO 1SO SUSAN KAN "a m2 SUSAH SAMPl PAVUNS amS SUSAN ASSEUSO 2334 TWL1. KaUSS S#W0N S742 'a-lt-Lwkt I 30 EAST JAVA, VILLAGES IN FIRST YEAR PROGRAM (showing kabupaten, village name, population and PODES acor) KAALPATEN: PSOSOUcGOO "s x> x KASuPATEN: *OJONumOo KABUPATeS rA KfCAMATAN OSA PENUOUCIK TOTAL KECASATAN DSA PENDUOUK TOTAL KECAMATAN DoA PolM IOTAL ThMAL SIWALAN GUNUNG SfM 174 so SUG1WArAS NGLAJANG r sJ 44 TORJUN PANfLAMGM 1646 T30AL .WALAN TEfALSONo 22" U 3 SUGIWARAS KEDUNGDOWO 1144 3 0 TORJUN PACAAAM 1449 TIMIS RACEK "a so KEDUNGADOM SAgA J 71 37 TOrJUN OULAN gm rTM ReUaN 448 44 KIUNGACM PFJOK Re 37 TORJUN PATARONSA am TUE WEOUSAN 216 KEDUNGADEM GeGER 301s 37 TORJUN mimom Hor"L t1m PAKUNNAN KUDUNGSUMt rD 7 31 SAURENO TANOUNIGAN 1401 a3 PAKUNNAN KALIDANDAN 713 as UAURENO POIAAN m1 TOPrJuN SATAPA T SI PAKONPAN SUMBING 1177 36 . LEDAX2AA1S J T OR JUN urns a PAKIuHPAN PATEMON K*ON 014 A AURLENO KAOUNGREJO 344 TOR PAJUNIrAN ALASPANDAN 1754 BAUSENO PUCANQAtUu s s TORUN KASA -S a T70JAM KARA 5665 3 KAOLRATfN: rPAuSuiA SAHEN NGAOLLUNUS MI 42 SAMPANG PAIAKN 1ow a ALEN KASUNAN 3244 1 SAPANG TAMAN SN _ a KfCAMATAN DESA PaCDUDu TOTAL KAr-AS St OGO GO 2US,1 3 SAMPANO Pre wOGA a a KECAMATAN 0554 PENDUOUX ~~~~~~~KAASA 6000 1037 34 SAMPANG KAM60535 31 a USPO JANJANO WULUNG 3471 34 KAKALAN 213 SAMPANG sAMIMA USW S PUSPO PALANG SAI 1n6 34 Pruro KEMISI zn J4 MALO DUKUH LOR low 35 KOUN10OUN0 om 4n TOSANI KANOANGAN 1107 3 A244 46 KRDUNU rAS TOSARI MOROREJO I Q4 AL 1O3 5fTAK tJ7 as ROSATAL USRAN4 toLNfr 1040 44 ROSATAL TLANSA no 4 PLEPO JISSARAN 3m 35 SUDAN 1365 s ROSATAL SUMATET am a Pu ro KEOUWUNG lO041 J? PUSPO KUWUNG US KAIUPATEN: PUSPO ~~PUSUNG I4ALANG 2541 as KAOALNnoUaaaUm auras. EMa -~g a PURSPAN SAFULANTl 140e 4* ROATAL SWuLl am S LUSSANG WONORSEO 1473 44 KAfCAUATAN DeSA reNTALr USl 75136 am l NWAPJ VAR SCU~~~~~~~ATAL 0fil PAIREPAN GALIH 3114 40 KWANYAP OUWKE BUTfR 1022 as ROSATAL TRAS 9also 8 PASREPAN P11UNG 3013 3 A PAORAN lnt 37 PASPEPAN KLAJAH - 1017 40 KWAU YAR CUMUNGG AAtNl1 3474 * K .JUPATas SUUUi - 4S WVNONGAN 0400N3R 2244 *? oUNG 14ANO9 40 A7 WINONGAN KEDUNG REJO 24U7 36 ODUNG GLISOM 1" 40 KECAMATAN DM P tU TOrAL KASLPATEN: NHANJUK-; OLE" SATES iST TALA40O COMA O S 1 5110A KA4AN5 PANA AN r0 - 44 s _ KECAMATAN D09A PENDOIUK TOTAL KARANaOIAGKA * t 4 TANAo P Om1 St aS OGA ALASRAJA 42S4 r TALANGO PALA e 401 U GONDANG SUMSERJO 3J 37 SALl 3ALATEflW 11is 34 TALAN*0 t APURANA PU a aoNOANG NOUHGO 3l0 as GONDANG MOJOSETO 1017 32 KONANG GAL4 OAYA 17U OONDANG PANDEJ low a3 GoaeG LEuPAK 4664 LErEQ K A ARAT 44 aofom KASOLUARG tm 4 tINTENG TANtOAW am6 41 GOHOANO CAMPUS 477 *7 atoGGeATDA UNO4 94 44 f AIW 8 4 QONOANG 5 ENJAYAN Ils 44 SAWfUNPENO LACK 2 7 LEaNTNO AMIDEAS m 4* GONDANG KWUNG GLUGU 136 34 DAU is tSt IS o GONDANG JAAN 4145 34 KsMU.a 4144 6t NOLUYU LfNOKONG LOR 643 45 GALJ TAn. sm iS LEOKONa NHEUNO 14s1 37 GOAUt LANK5ART a 40 PSOPNSI: JAWATIMLM GAm LANTEKTIMIS J47S OALS DALEMAN US TANAiH URAH PACfNTAN m6 6 TANAN SASAN 5A9*AJUN. 4374 36 TRAa" SAJEUAN 43 di TRAGAH TAM n4T Ss TRAGAH DUKOTAIN r77 Ss AROSSAYA PANOAN W41AN4 1067 25 AROSSAYA SATONAONG 34 S AROS AYA 0USL 2102 2 AOUSAYA ALUNG 1344 S AROSIAVA KARANG DUWAK 1661 3 31 YOGYAKARTA, VIILAGES IN FIRST YEAR PROGRAM (showmg kabupaten, village nam, populadon and PODES swc) YASUPATEN: GUNUNs mU ouit o KECAMATAN DESA PENOUU TaTAL PALWYAN KRAMUL SAWIr t1O7 4S PALIYAN KANIGORO 46 PALIYAN KVESK 476 a PALIYAN NOLOAO 367 45 TEPUS KEMAOANG 60 PALrYAN PLANJAN 357 47 PALN.AN MANOGOL 484 44 PALrYAN GOING am 45 PALrWAN 5000 416 46 TUPUS KEMtI 47, U TIPUS SANJAREJO 50 TEPUS NOESTIEJO 6461 47 TEPUS TEPI55a 4 TEPUS SUMBER WUNGU 63 45 TEPUS NANOOSAI U 4S TEPUS PUN WODADI so" 47 TEPUS GOPANGUNNG SW7 40 RONGKOP OALONG II 4I RONGKOP JPrrTu 3m 5 RONGKOP SOTODAYAKAN 511S 43 RONOKOP TLENG 4434 47 RONGKOP PUCUNG 343 45 RONOKOP SONGSANYU m7 n RONOKOP JERUK WUDEL am 4* RONOKOP NOLINOLU E61 44 PATUK LAMPANG n1se 8 PATUK SEUT H466 47 OLlPARt WATU GAJAH 4773 47 NOLIPAR MENTELU 413 44 NOAWEN TEOALReJo 1 *S abl-Lwk 16 DES 13 33 Annex 3 INDONESIA VILLAGE INFRASTRUCTURE PROJECT FOR JAVA Grant Authorization, Funds and Reporting Flows - World Bank/RSI I r ---------- = BAPPENAS MoF 1 BI | Pusat IDT Secretariat SPABP - _ GOI SA Consultants financing- copy F i Engineers KPKN r BRI Cabang Province copy copy i- _ = - -- PIMPRO Kabupaten copy, Field Engineers Camat BRI Unit /-LKMD Acct Kecamatan - 10 ; - - - r i LKMD Desa L Suppliers STEPS I - - -- - - Infrastructure grant authorization for disbursement 2 Fund flow prefinancing 3 - - -- LKMD project assistance agreements 4 - LKMD invoices (1st for certification, then to BRI Unit) for projects agreed 5 --- BRI payments to LKMD/Suppliers 6 - - - Disbursement reporting (every 15 days/monthly) 7 -- -= MoF reimbursement requests w/SOEs 8 WB reimbursements 34 Annex 4 INDONESIA VILLAGE INFRASTRUCTURE PROJECT FOR JAVA Action Plan Policy Outline Rationale Responsible Agency Date The Government of Indonesia will take Many local Ministry of Home October 1995 measures to ensure that the Laws and authorities/officials Affairs (in Rakorbang Decrees concerning the payment of all local appear to unaware of (Dit.Jen.PUOD) process) levies, taxes and retributions on goods the national laws transported are understood and followed by regarding "retribusi" local authorities. In particular, Home payments, particularly Affairs Ministerial Decrees No. 48/1984 in relation to and No 29/1986 will be re-issued and transportation of goods explained to Province and Kabupaten between Kabupatens. Governments. Appropriate measures will be undertaken in specific Kabupatens where The Ministerial Decrees these Decrees have not been properly name a number of implemented and enforced. These two commodities for which Decrees prohibit the imposition of any local inter-Kabupaten taxes or levies on a number of important transport levies should exportable commodities, many of which are not be paid, principally produced in poverty areas such as IDT in an effort to villages. encourage exports. The Government of Indonesia will To have the maximum by April, 1996 reevaluate the existing scope of these impact on poverty above mentioned Decrees. reduction, a new list of goods which should be Additional commodities such as sand, exempted will be 1996, as a stone, albizzia, timber, coconuts and fruits prepared and result of above may be the subject of a new Decree by the appropriate steps taken. reevaluation Ministry of Home Affairs. "Retribusi" payments Pendampings for IDT will be informed as can cause serious price starting June part of their general training of the decrees distortions as low cost 1995 in order to disseminate the information. goods are "taxed" at the same rates as those of higher value. Information on producer prices, market Currently, regular radio Ministry of Trade Preparation conditions and marketing channels will be broadcasts concerning (Dit.Jen Perdagangan starting June provided to local radio broadcast stations, market prices are Dalam Negri) 1995 to complement existing broadcasts on broadcast at the local consumer prices. level. To these some & Ministry of Implementation strategic retail prices Information starting April 1, should be added so as to 1996. inform - village level producers of the current value of their goods. Source: GOI 35 Annex 5 INDONESIA INFRASTRUCTURE PROJECT for POOR VILLAGES ON JAVA OPTIMAL YEARLY SCHEDULE Month Task Agency July/August -1. Shortlist core TA firms and invite proposals - IDT Secretariat Aug./Sept. -2. Received and evaluate proposals, select firm, sign contract. - IDT Sec./PMU 3. Preparation consultants to review suitability of - IDT Sec./Prepar. TA procurement/contract forms of Dinas PU for contracting at local level. September -4. Select villages for project year - IDT Sec./PMU/Kabupatens November -5. Core TA mobilize 6. Local engineers/Pimpros shortlisted, invited to submit bids and selected - Dinas PU/Core TA December -7. Inform selected villages of the program - Camats 8. Local engineers: contracts effective and start their training - Core TA/Dinas January -9. Villages present to camat and TA, sub-project proposals and number of villagers and length of time wanted to work - Villagers -10. Continue training of local engineers - TA February -11. Visit to villages to review proposals, cost estimates, procurement needs, implementation arrangements, etc. - TA March/April -12. Designs prepared, procurement/implementation launched - Dinas/TA/villagers May/Sept. -13. Works proceed - Villagers/contractors/TA/Dinas October -14. Final report at village level - Village/Dinas/TA Note: steps 1, 2, 3 and 5 apply to year I only and would be compressed if the works are to start in 1995. Annex 6 INDONESIA VILLAGE INFRASTRUCTURE PROJECT FOR JAVA AGREEMENT BETWEEN LKMD AND FIELD ENGINEER ACTING FOR THE ADMINISTRATIVE PIMPRO FOR THE VILLAGE INFRASTRUCTURE ASSISTANCE GRANT TABLE OF CONTENTS General Conditions of Agreement ........................I Sample Form of Agreement ..2.....................2 General Specifications .......................................................................................................................................... (developed per nature of works in Project Manual) January 1995 38 GENERAL CONDITIONS OF IMPLEMENTATION AGREEMENT 3.1. Duties of the Field Engineer (acting for DPUK pimpro) a. Verify subproject proposal and assist with preparation. b. Supervise implementation of works. c. Arrange payment documentation for work performed. d. Accept completed works. 3.2. Duties of the LKMD a. Implement the works in accordance with the specifications and Technical Guidelines for Works in the Project Manual provided by the Field Engineer. b. Provide materials, equipment and personnel; unskilled personnel will have to be village labor as per the Manual, in accordance with the agreement and Technical Guidelines. c. Provide local management (team leader, foreman, administration) and pay at appropriate cost based on the agreement. 3.3. The works shall not be contracted without approval from the Field Engineer/Pimpro. 3.4. The LKMD must obey existing rules and regulations, and respect local customs. 3.5. Force Majeure is an event outside the control of the LKMD which obstructs or damages the work. Such an event must be reported to the Field Engineer within 7 days. The Field Engineer may agree to costs resulting therefrom, and prepare a agreement addendum if needed. 3.6. Differences of opinion that may occur between the LKMD and the Field Engineer should be brought for discussion with the Engineer/management consultant immediately at the kecamatan. Settlement of such differences shall be decided by the Engineer/management consultant and be based on factual evidence and the Agreement. If they entail costs justified in the opinion of the Engineer/management consultant due to changes of original specifications, then an Agreement addendum has to be prepared. 3.7. Non-compliance by the LKMD The LKMD shall be judged negligent if it does not comply with clauses 3.2. or 3.4. or does not obey the warnings of the Field Engineer. The Field Engineer shall give written notice to the LKMD of any non-compliance and send copy to the Engineer/management consultant. 3.8. Sanctions a. In relation to negligence of the LKMD under clause 3.7., payments to the LKMD shall be postponed until the cause of negligence is corrected and accepted by the Field Engineer in accordance with the Agreement. b. If within 15 days of receiving a warning under clause 3.7. the LKMD leader takes no corrective action, then the Field Engineer may propose to the Pimpro to appoint an alternative leader or to appoint a third party to carry out the works. 3.9. Payment for the works shall be based on the amount of works certified by the Field Engineer in accordance with the Agreement or addendum if any. 3.10. Reporting by the LKMD a. Weekly personnel records. b. Weekly equipment record. c. Weekly progress of works. d. Monthly cumulative progress. Attachment I - Agreement Form 39 LKMD: Address: DIPDA No. , Date SPABP No. , Date .... ... .... ... ... .... .. ..... ... ... .... ... .... ... ... .... ... .... ............................................... ... ........... ... ... .... ... ... IMPLEMENTATION AGREEMENT No._ for _ WORK/SUPPLIES IN KABUPATEN IN KECAMATAN VILLAGE No.: / /199 Date: Location: A. We, the undersigned: 1. NAME: TITLE: Field Engineer ADDRESS: JI. hereinafter referred to as the FIRST PARTY. Authorized to act on behalf of the Government Dati II Kabupaten as Employer, by assignment letter dated No. 2. NAME: (LKMD) TITLE: (kepala desa) ADDRESS: JI._ hereinafter referred to as the SECOND PARTY. B. Both parties agree: a. Type of Works: b. Location: c. Description: d. Value of Agreement: Rp. (in words) e. Execution period: calendar days from the date of signing the agreement, without warranty period. f. Payment: Up to 10% advance to be netted out of payments of the first 2 months. Payments every 2 weeks proportional to physical progress as stated in bills certified by the Field Engineer and the final hand-over. h. Condition for Execution: As stated in the attached General Conditions of Agreement. i. Miscellaneous: - 5 copies of agreement, 2 copies with Rp. 2,000 duty stamp. - Copy of contract shall be sent to Pimpro (DPUK). SECOND PARTY FIRST PARTY Acknowledged by Acknowledge by Head of LKMD for Pimpro Camat Field Engineer Pimpro _ )L( ( 40 VILLAGE INFRASTRUCTURE PROJECT Documentation for Procurement of Small Civil Works/Supplies (for contract values between Rp. 10 million and Rp. 50 million) TABLE OF CONTENTS Invitation to Bid and Instructions to Bidders ..............................I General Conditions of Contract ...2...........................2 Samnple Form of Contract/Work Order ...3...........................3 Sample Form of Quotation ..............................4 General Specifications ................................................................................................................................ (to be developed per nature of works in forthcoming Works Project Manual) January 1995 41 1. INVITATION TO BID 1.1 Works: . 1.2 Kabupaten/Kecamatan/Village: SPABP Inpres ................................................ Date . No. DIPDA Inpres ................................................ Date . No. 1.3 Appointment Procedure Activity Location Date Hour Remark 1.3.1. Collect Bid Document LKMD office Free of Charge 1.3.2. Explain Documents idem Site Visit 1.3.3. Submit Bid idem Duty Stamps Rp. 2000 1.3.4. Evaluate/Negotiate idem 1.3.5. Appoint Contractor idem 1.3.6. Sign Contract idem Duty Stamps Rp. 2000 2. INSTRUCTION TO BIDDERS 2.0. The contractor will be selected after review of 3 quotations from different sources for local shopping and I quotation for direct contracting, contract values cannot exceed Rp. 10 million for direct contracting and Rp. 50,000,000 for local shopping (Keppres 16/94). 2.1. Quotation Form attached. 2.2. Contract Form attached. 2.3. Attachment to the Quotation Form: Schedule of Activities and Prices 2.4. Contract Period: (3-6) months from the date of signing of Contract. 2.5. Type of Contract; Unit Price of Lump Sum, without escalation. 2.6. Payment for Achievement: Semi-Monthly: After certification for works completed in 2 week period; the last payment, after issuing a Certificate of Hand-over. 42 GENERAL CONDITIONS OF CONTRACT 3.1. Duties of the LKMD Head (contract/owner)/Field Engineer (acting for DPUK) a. Supervise implementation of works. b. Arrange payment documents for work performed. c. Accept completed works. 3.2. Duties of the Supplier a. Implement the works in accordance with the specifications and Technical Guidelines for Works in the Project Manual provided by the Field Engineer. b. Provide materials, equipment and personnel; unskilled personnel will have to be village labor as per the Manual, in accordance with the contract and Technical Guidelines. 3.3. The works shall not be sub-contracted without approval from Field Engineer. 3.4. The Supplier must obey existing rules and regulations, and respect local customs. 3.5. Force Majeure is an event outside the control of the Supplier which obstructs or damages the work. Such an event must be reported to the Field Engineer within 7 days. The Field Engineer may agree to costs resulting therefrom, and prepare a contract addendum if needed. 3.6. Differences of opinion that may occur between the Supplier and the LKMD should be brought for discussion with the Field Engineer immediately. Settlement of such differences shall be decided by the Engineer/management consultant and be based on factual evidence and the contract. If they entail costs justified in the opinion of the Field Engineer due to changes of original specifications, then a contract addendum has to be prepared. 3.7. Non-compliance by the Supplier The Supplier shall be judged negligent if it does not comply with clauses 3.2. or 3.4. or does not obey the warnings of the Contract Owner or Field Engineer. The LKMD or Engineer shall give written notice to the Supplier of any non-compliance. 3.8. Sanctions a. In relation to negligence of the Supplier under clause 3.7., payments to the Supplier shall be postponed until the cause of negligence is corrected and accepted by the LKMD/Field Engineer in accordance with the Contract. b. If within 7 days of receiving a warning under clause 3.7. the Supplier takes no corrective action, the LKMD/Field Engineer may terminate the contract and appoint a third party to carry it out. 3.9. Payment for the works shall be based on the amount of works certified by LKMD/Field Engineer in accordance with the contract or addendum if any. 3.10. Reporting by the Supplier a. Weekly personnel records. b. Weekly equipment record. c. Weekly progress of works. d. Monthly cumulative progress. Attachment I - Agreement Form Attachment 2 - Bid Form 43 ATrACHWENT 1: LKMD: Address: DIPDA No. , Date SPABP No. , Date Implementation Agreement No. Date CONTRACT AGREEMENT for WORK/SUPPLIES IN KABUPATEN IN KECAMATAN VILLAGE No.: / /199 Date: Location: A. We, the undersigned: 1. NAME: TITLE: Project Manager of the Works-LKMD ADDRESS: Jl. hereinafter referred to as the FIRST PARTY. Authorized to act on behalf of the Government Dati II Kabupaten as Employer, by assignment letter dated No. 2. NAME: (Supplier) TIT'LE: (Director) ADDRESS: Jl. hereinafter referred to as the SECOND PARIY. B. Both parties agree to enter into Contract as the result of tendering: a. Type of Works: b. Location: c. Description: d. Value of Contract: Rp. (in words) e. Execution period: calendar days from the date of signing the contract, without warranty period. f. Payment: Up to 10% advance to be netted out of payments of the first 2 months. Payments every 2 weeks proportional to physical progress as stated in bills certified by the Field Engineer and the final hand-over. h. Condition for Execution: As stated in the attached General Conditions of Contract. i. Miscellaneous: - 5 copies of contract, 2 copies with Rp. 2,000 duty stamp. - Copy of contract shall be sent to Pimpro (DPUK). SECOND PARTY FIRST PARTY Acknowledged by Supplier LKMD Field Engineer 44 ATTACHMENT 2: ................................................................................................................................................................................... To: The Project Manager of QUOTATION I. Having examined the Quotation Documents, comprising the Invitation to Bid, the Instruction to Bidders, the General Conditions and Technical Guidelines for Works in the Project Manual, related to the following works: Description : of : Works : I/We the undersigned offer to implement the whole of the said works in conformity with the aforesaid documents for the sum of: Rp (in figures) (in words) [- As detailed in the Attachment to the Quotation showing schedule of Activities and Prices (form to be developed in Manuat). 2. I/We undertake to commence the works on the date of signing the Contract and to complete and to hand-over the works comprised in the contract within the period stated in the bid document. 3. This Quotation is valid for one month from its date. Date _ Supplier Name Address Supplier Signature ( Director ) 45 Annex 7 INDONESIA VILLAGE INFRASTRUCTURE PROJECT FOR JAVA Performance Indicators Physical progress as well as other aspects of the project will be monitored and reflected in a progress reporting system as included in the Project Manual. Among the indicators that will be monitored periodically are the following: Employment impact man-days of employment (on a 6 hour daily basis) % women, % young average daily pay total payments to labor payments for material supplies Subprojects Completed: kms of road number of bridges number of docks/piers sanitation facilities water supply subprojects other; (specify) Number of beneficiaries: average per subproject total cost per beneficiary (on sampling basis) Less frequent reports, and in particular an evaluation report on broader impact monitoring will also be prepared. Given the short project implementation period, of 2-3 years, it is not expected that broader impacts could be fully captured by the mid-term review in February 1996. 47 Annex 8 Page 1 INDONESIA VILLAGE INFRASTRUCTURE PROJECT FOR JAVA Supervision Plan Bank Supervision Input. a. Regular supervision needs for the review of progress reports, procurement actions, correspondence, etc. are estimated to require four staff weeks per year. The staff input indicated in the table overleaf is additional based on (i) the key activities mentioned in Annex 5 (Optimal yearly schedule), and (ii) the assumption that a third year 1997/98 will be needed to complete the civil works program. b. Each of the four provinces should be visited at least once per year during project implementation. Given the geographic dispersion of the villages, each supervision mission should focus on only a few clusters which would be deemed typical because of their characteristics and their performance, as shown by the progress reports. C. Staff from the Resident Mission would assist in the supervision of this project, in particular (i) in the environmentaVsocial impact reviews and (ii) in the random ex-post review of the large amount of SOE documentation. 2. Borrower's Contribution to Supervision. a. A Project Launch Workshop is to be organized by GOI, after full mobilization of the EMC and the Field Engineers, but before the start of the civil works period (May to September). b. The IDT Project Secretariat is to be the responsible for project coordination, for arrangements for Bank supervision missions, and for providing requested information. c. Review meetings with the participation of the various project agencies will be held normally in February of each year, to discuss the previous year's performance and the current year program. The February 1996 will be a mid-term project implementation review. d. Quarterly Progress reports will report on physical progress as well as other aspects of the project. A sample of the indicators to be used as part of the reporting/monitoring system are described in Annex 7. 48 Annex 8 Page 2 Bank Supervision Input into Key Activities Dates Skill Input Activity Needs (staff-weeks) 04/95 Project launch workshop (to clarify project objectives/requirements) CE, ESI 2 06/95 Supervision Mission (to review initial project arrangements, E, ESI 2 and start-up of first year works contracts) 09/95 Supervision Mission CE, E, 2 (to review progress in civil works, ESI and monitoring activities) 12/95 Assist in/review preparation of 1996/97 CE, E 2 program on the basis of experience of 1995/96 program. Review reform action plan 02/96 Supervision Mission CE, E, 4 (mid-term PIR to review all aspects of ESI the project, especially performance adequacy of project arrangements including for maintenance activities, quality of consultancy services) 06/96 Supervision Mission CE, ESI 2 (to review, inter alia, second year works contracts) 09/96 Supervision Mission CE, E, 3 (to discuss program performance ESI including reform action plan and monitoring activities) 12/96 Assist in/review preparation of 1997/98 CE, E 2 program 1997 Three Supervision Missions CE, E, 8 (of which one for preparation of ICR) ESI CE=Civil Engineering, E=Economics, ESI=Environment/Social Impact (RSI) 49 Annex 9 page 1 of 2 INDONESIA VILLAGE INFRASTRUCTURE PROJECT FOR JAVA GUIDELINES FOR COMPENSATION FOR LAND OR ASSET ACQUISITION bjectives 1. Land acquisition will be kept to a minimum and no person will be physically displaced under subprojects financed under the Project. Subproject proposals that would require demolishing houses or acquiring productive land should be carefully reviewed to minimize their impacts through alternative alignments. Proposals that require more than minor expansion along rights of way should be reviewed carefully. Land or other assets may be acquired through (a) Voluntary contributions. In accordance with traditional practices, villagers may elect to voluntarily contribute land or assets and/or relocate temporarily or permanently from their land without a compensation; (b) Contributions against compensation. A contributor considered "affected" will be eligible for compensation. 2. These guidelines provide principles and instructions to compensate affected persons under 1.(b) above, to ensure that all such persons negatively affected, regardless of their land tenure status, will be assisted to improve, or at least restore, their living standards, income earning or production capacity to pre-project levels. However, if acquired assets are less than 20%, the field engineer may dispense with the procedural requirements delineated in para. 5 below. Compensation Principles 3. The LKMD shall ensure that any of the following means of compensation are timely provided to affected persons (the village grant cannot be used to pay compensation): (a) replacement land with an equally productive plot or other equivalent productive assets; (b) materials and assistance to fully replace solid structures to be demolished; (c) replacement of damaged or lost crops at market value; (d) other acceptable in-kind compensation. Consultation Process 4. The LKMD will ensure that all occupants of land and owners of assets located in a proposed subproject area, are consulted. There will be a village meeting to inform villagers about their rights to compensation and options available in accordance with these Guidelines. The Minutes of the village meeting shall reflect the discussions held, agreements reached, and include the following: (a) for any voluntary contributions, name of contributor and details about the contribution; (b) for land/asset acquisition against compensation, names of affected persons and details about the nature and level of compensation. 50 Annex 9 page 2 of 2 Summay AmountCo nsation Areeent reached (1) agric. land (m2) (2) plots: area affected (m2) houses/structures to be demolished (units/m2) (3) trees or crops affected (4) signatures of villagers, kepala desa (5) record of any complaints raised by affected persons (6) map attached (showing affected areas and replacement areas) 5. The field engineer shall provide a copy of the Minutes to affected persons and confirm in discussions with each of them their requests and preferences for compensation, agreements reached, and any eventual complaint. Subprqject Approyal 6. In the event that a subproject involves acquisition against compensation, the field engineer shall: (a) not approve the subproject unless a satisfactory compensation has been agreed between the affected person and the LKMD, as mentioned above; (b) not allow works to start until the compensation has been completed satisfactorily to the affected persons; (c) in the unlikely event that more than 200 persons were affected and required compensation in a village, a compensation plan has to be prepared, and approved by the IDT Secretariat, before the subproject can be approved. Complaints and Grievances 7. All complaints should first be negotiated to reach an agreement at the village level. If this fails, complaints and grievances about these Guidelines, implementation of the agreements recorded in the Village Minutes or any alleged irregularity in carrying out the project can also be addressed by the affected persons or their representative at the kecamatan level. If this also fails, the complaint may be submitted to the Bupati for a decision. Verification 8. The village Minutes and evidence of compensation having been made shall be provided to the field engineer assisting the village, to supervising engineers, auditors and socio-economic monitorers when undertaking reviews under the Project. 51 Annex 10 INDONESIA VILLAGE INFRASTRUCTURE PROJECT FOR JAVA SAMPLE ECONOMIC RETURNS TO VILLAGE INFRASTRUCTURE I. In addition to employment benefits and reduced unit costs of works, the assets to be built under the project have high rates of return. A majority of the funds will likely be used to build all weather access roads and bridges. For instance, the kabupatens on the south coast of West Java have some of the lowest agricultural potential in the province: excluding the kabupaten Garut, 2 of whose kecamatan are covered by an ADB marginal farmer community development project, the other 6 kabupaten cover some 10,000 km2 transversed east-west by a mountain range with poor soils at mid altitudes, used for secondary growth and shifting cultivation that yield low incomes although they could be used for higher value, but capital intensive, crops. The 6 kabupaten include 711 villages identified as poor for the 1994 IDT, distributed in 42 kecamatans (averaging 15 poor villages per kecamatan--there would be more villages, non-poor, and not counted here). Many of the poor villages lack all weather access to their kecamatan center; at an assumed 2,500 persons per village (less than the average 3,200 for West Java) the poor village population would total some 1.8 million. Paths have considerable traffic--several villages may use a common access--and their upgrading to all weather possibility has good economic returns. Access road and bridge examples can illustrate: (a) The 500 family village Cidadap, in the kabupaten Lebak of West Java, has an average income per family of only Rp.150,000 per month. It also has a 5 km clayish surfaced access road that becomes impassable for 4 wheel vehicles (even 4 wheel-drive vehicles) in the rainy season; (i) The village has abundant rambutan trees, that produce more than 1000 tons of fruit per year. The fruits are highly priced in cities (Rp.700 per kg at the kabupaten capital) but they must be harvested and transported to markets in one peak week, during the rainy season. Due to the access road condition, only some fruit is hanged on sticks (pikul) and carried by porters to the asphalt road, at a cost of Rp.50 per kg, and the farmgate price is only Rp.400 per kg. With an all weather road, transport by van would cost about Rp.15 per kg instead of Rp.50 for the 5 km. Thus the road improvement, at a cost of some Rp.120 million, would allow an additional income per year from rambutan alone of at least Rp.30 million (transport cost savings for some 800 tons). The rate of return of the village grant would be more than 30% on this basis alone (the village porters could become harvesters or packers and not lose income). (ii) But the return is higher: the cost of transport of other products would also be reduced--on average per ton-km from Rp.10,000 by pikul to Rp.2,860 by van, or even less by medium sized truck; and (iii) Passenger traffic, more than 10 vehicles per day in the dry season, could continue in the rainy season. The cost per passenger-km in rainy seasons, more than Rp.500 by motorcycle (the local taxi) would decrease to Rp.140, the rate by van in dry seasons--high school age children, who cannot afford the motorcycle from the village to the school in town, at Rp.5000 per day, or the cost of staying in town, could attend school. (iv) In all, the road improvement should have a return exceeding 40%. 52 (b) Other villages may not have such high value crops, but if a road improvement generates just 3 van retirn trips per day during the rainy season, then its cost could have a 10% rate of return (from savings compared to the cost by motorcycle), and traffic generation is likely to be higher, given the large village populations. Thus overall and in particular when it makes access possible, road improvement has high returns. (c) Java has numerous small and medium sized rivers that swell in the rainy season making boat passage very dilficult. Small rivers usually span makeshift bridges that may not allow cars to pass and need improvemenit or upgrading. Larger rivers sometimes isolate villages. isolated villagers would like sLIspension bridges that can carry pedestrians and motorcycles to render jobs, markets and schools accessible. In one village a 50 meter suspension bridge had been built with Red Cross support of only $15,000 dollars equivalent for materials and with free labor provided by villagers (see picture overleaf); this bridge had integrated the village with the "other" side. Thus the cost of such bridges is low and their economic returns are very high. 2. Additional supplies of drinking water is also a high priority of many villages. During dry seasons many villages relying on surface water for drinking water face shortages and villagers have to walk long distances to fetch water from a natural source or have to pay for water delivery. Some other projects such as the Bank's Water Supply and Sanitation for Low Income Communities (Ln. 3629) are already assisting in providing drinking water, but they are not covering all the poor villages that need it. Provision of clean water has high returns, in terms of time saved and improved health standards. 3. Villagers may also choose to build sanitation facilities, storage sheds for agricultural produce, drainage improvemenlts or other small infrastructures that they consider to be of priority. The communal selection process, and the requirement of a minimum number of users per infrastructure/a maximum cost per beneficiary (to be included in the Project Manual) should help guarantee that only justified projects are uLidertaken. 53 Annex I I INDONESIA VILLAGE INFRASTRUCTURE PROJECT Selected Documents Available in the Project File (a) Japan Development Institute, ECFA, Tokyo and PT Intersys Kelola Maju, Jakarta (1994) Rural Areas Infrastructure Development Supporting Data and Analysis of the Financial Requirements for "Desa Tertinggal", Final Draft, prepared for OECF/BAPPENAS. (b) Government of Indonesia (1994) Infrastructure Project for Poor Villages on Java, Progress Report. (c) Roger D. Montgomery, Hunting Technical Services Ltd. (1995) Site Visits to West Java and South Sumatera. Mid-term Report. IBRD 26797 I . I llro llr T '^ 4^~~~~~~~~~~~~~~~~~~~~IS.I INDONESIA Th.e o un dares, olors, denmiatinsand any ohrinformation show VILLAGE CLUSTERS IN FIRST YEAR PROGRAM imply onte hport noft The World Sank Group. any judgment on the iegol SUMATERA S h PROJECT KABUPATENS(DISTRICTS) nor ony endorsement or accptanc of such * VILLAGES OF 5 CLUSTER boun,dries. o CL7 in o1 * NATIONAL CAPITAL Se ~ KABUPATEN BOUNDARIES PROVINCE BOUNDARIES 'A 7'.> D.IK./. 0 50 INTERNATIONAL BOUNDARIES D. K.I.t JAKARTA--0 Java /20 - 0 50 100 150 200 IL JAKARTA 17 > ' KILOMETERS 3 *:gor 0 9 2 Magelong Surcr3 Bogor 116 15 11 G 2m~ Cirebon J 12UMoiclk JAWA BATATE12NiiG>~AHkalongon , _M.a'.ulra' I bkabumi- 21 29 28 27 26gw 2 4 21 -32 17JAcoWA n4 Bcnjornegr BARAT 22 BoBndung 10 JAWA T In 16 1 PondegJang S 6 2S g' 2 Lebak 7 Wonosobo 25 Su 3B Kogr 9 2 8 2 Sukra 216 15, 4 Skabody 8 1 1 Moiokeri 2Kn I Cioniur 1 - -o o9suruan 6Bondutg - --.'Y ykarta 10 11 13 20 MadL 17 *rblin'~ ~ o TGsrkmnul W212 JA A TIMURKd 1 9 Ciamis 2NIN OC A I0 Kuningan YO YAb3 75 1 a g 7 I1Cirebon JAWA TIMUR 9 Ils .~ 12 maolankoaA ATEG H1 31 Sumedong JAWA T 18 Pocitan 19 Modiun ci 14 Incramayu 1 Cilocap 19 Kudus 2 Ponorogo 20 Mageton 15 Subang 2 Bonyumas 20 JIeporo 3 Trenggalek 2 1 Ngawi- 1 6Purwakarta 2 Purbolingga 2 1 Demnak 4 Tlulngagung 22 Boionegora 1 7Korswong 4 Banjarnegara 22 Semorang 5 Blitar 23 Tuban 18aBekasi S Kebumen 23 Temonggung 6 Kediri 24 Larnongan 19 Tonggerong 6 Puroorejo 24 Kendal 7 Malang 25 Gresik---M) iLPN5 20 Seroeg 7 Wonsosbo 25 Beotng 8 Lumajeng 26 Bongklceln .j 71 Kodye Sager 8 ~Magelaeg 26 Pelkalongon 9 Jember 27 SompengA 72 Kodya Sukabumi 9 Boyolali(- 73 Kodya Bandung 10 KIaten 27 Pemelong 10 Boinyuoongi 28 Pamekasan-- 74 Kedya Cirebon 1 Sukolsarjo 28Tegal 11 Boncdoooso 29 Sumenep 12 Wonogiri 29 Brebes 1 iuod 1 KdcKdr D.I.YOGYAKARTA 13 Koranganyar 71 Kodya Magelang 13 Probolinggo 72 Kodyo Blitar .,- 13 Kaangayor 7 Koda Maglang 14 Pesuruan 73 Kodyo molong- 14 Stagen 72 Kodyc Surakcarta 15 Sidoarjo 74 Kodys Probolinggo *JO- - IKulon Progo 5Geeo 73 Kedya Scatibga 16 Moiokerto 75 Kodyo Pasuruan S i. 2 Bantul 16 Blors 74 Kodys Semerong 17 Jombetg 76 Kodya Mojoketlo 3Gunung Kid.1 17 Ren,bang 75 Kodya Pekalongon 18 Ngenjuk 77 Kodya Madiun e _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _i v 4 Sleman 18 Pet, 76 Kodys Tegal 78 Kodya Surabaya 71 Kodyo Yogyokarts ________________ ________________ MARCH 1995