Page 1 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 04/07/2005 Report No.: AC1472 1. Project Statistics Country: Uruguay Project ID: P057481 Project Name: UY Transport Infrastructure Maintenance and Rural Access Task Team Leader: Jorge M. Rebelo Estimated Appraisal Date: March 14, 2005 Estimated Board Date: June 7, 2005 Managing Unit: LCSFT Lending Instrument: Specific Investment Loan Sector: Roads and highways (60%);Sub-national government administration (15%);Ports, waterways and shipping (15%);Central government administration (10%) Theme: Rural services and infrastructure (P);Trade facilitation and market access (S);Infrastructure services for private sector development (S);Small and medium enterprise support (S);Other rural development (S) IBRD Amount (US$m.): 70.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER 30.00 30.00 Environmental Category: C - Not Required Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] 2. Project Objectives The project's development objective is to upgrade the country?s transport infrastructure to a condition that facilitates the transportation of freight and passengers at a cost-efficient level of service. This will be done by rehabilitating key transport links, removing existing bottlenecks, arresting any further deterioration of infrastructure due to budgetary constraints, and improving infrastructure management and safety. The project will help to reduce transport costs and preserve the infrastructure stock in Uruguay in an efficient and sustainable manner at both the national and local levels. In general, the structure and composition of the transport industry in Uruguay is highly competitive. Thus, the net reduction in transport costs brought about by the project should translate into freight tariff reductions, ultimately reducing the price of the transported goods and stimulating higher levels of productivity and economic activity. The project?s subsidiary objectives are to: (i) reduce road-user costs by removing physical constraints to permit the transit of larger and heavier vehicles and improving road safety on international corridors; (ii) assist MTOP in creating the enabling environment to consolidate its ability to attract more steady and reliable funding for the maintenance and rehabilitation of transport infrastructure and enhance infrastructure Page 2 management practices; (iii) improve the accessibility of rural areas so as to enhance the comparative advantages of agricultural and livestock producers and improve the integration of secondary urban centers and the rural population into the national economy; (iv) contribute to ensuring that key transfer terminals are fully prepared to serve the new demands for inter-modal freight and passenger transport. The achievement of the project?s development objective will be assessed through the following key indicators: (i) percentage of the road network below the optimal level of service according to traffic volume and surface type; (ii) percentage of the road network in bad condition; and (iii) value of road assets. Intermediate results will be measured by: (i) the progress in the removal of bottlenecks impeding the transit of trucks loaded up to Mercosur standards; (ii) the average network roughness on targeted national and departmental roads; (iii) the extent of private sector participation in the sector; (iv) progress in the implementation of institutional strengthening activities; and (v) indicators measuring road safety conditions (road accident indices and mortality rates on targeted networks). 3. Project Description The overall cost of the proposed project is now estimated at US$100 million of which US$89.8 million correspond to the infrastructure components (90 percent) and the remaining US$9.5 million to the institutional strengthening and transport infrastructure safety components. The Bank would finance US$70 million (including the front-end-fee), and the GOU the remaining US$30 million (see Annex 6 for a tentative project cost table). To support the stated objectives the project would consist of the following components (costs include physical and price contingencies): Component 1: Transport Infrastructure Rehabilitation (US$44.6 million, including contingencies). This component is fundamental in restoring the service levels of strategic transport infrastructure, whose condition constrain the efficient provision of transport services, in particular, the transit of heavier and larger trucks loaded up to Mercosur standards. The transport infrastructure that has been selected corresponds to links between major economic poles and export markets and transfer terminals supporting key economic activities. This component entails carrying out reinforcement, replacement, and rehabilitation works and will be subdivided into three subcomponents: Subcomponent (A) Road sections and bridges outside of the Megaconcession (US$8.5 million, including contingencies). Consists of the: (a) rehabilitation works consisting of reinforcing the pavement structures of : (i) about 15 km between ex-national Route 3 and ?km 594.700 on national Route 3; and (ii) about 20 km between Rio Tacuar?-Ca?ada Santos on national Route 18; these sections are part of international corridors. Subcomponent (B) Road sections and bridges within the Megaconcession (US$27.6 million, including contingencies). It consists of the (a) rehabilitation works consisting of reinforcing the pavement structures of: (i) 5 km of National route 1, between km144 and National route 22; about 16 km of National route 1, between the km 144 and National route 2; and about 3 km of the La Planta Urbana de Young section on national Route 3; and (b) carrying out of reconditioning works consisting of strengthening, widening or replacing the existing structures of 20 bridges located on national Routes 1, 5, 6, 7, 8, 21, 26, 28, 30 and 200 (Interbalnearia route) and the access to Montevideo. Page 3 Subcomponent (C) Transfer terminal rehabilitation (US$8.5 million, including contingencies). Transfer terminals have deteriorated considerably as a result of the lack of maintenance and the postponement of necessary new investments due to budgetary constraints. This component consists of minor infrastructure rehabilitation works in several terminals. These interventions are needed to adequately respond to the new demands for the inter-modal transportation of freight and of passengers. The proposed works to be financed are minor investments in several terminals. In order, to adequately address the pertinence of each proposed investment a framework to screen the candidate investments will be used. The proposed framework will include the following criteria that must be met by the investments in order to qualify for financing ; (i) the individual investments must be aligned with the overall objectives of this project; (ii) the specific investments must not reduce the possibility private participation; (iii) adequate economic evaluation; (iv) compliance with MTOP?s port environmental assessment manual; Component 2: Road Rehabilitation and Maintenance Contracting (CREMA contracts) (US$23.3 million, including contingencies). This component entails carrying out rehabilitation and maintenance works in six road sub-networks covering an estimated 981 km of national roads through performance-based CREMA contracts. The sub-networks under each contract comprise different pavement types and service conditions. The contracts to be financed under the proposed project cover six networks: (i) National route 3 (between National route 1 and Paso del Puerto, about 243 km); (ii) National route 5 (between km 97-Paso de los Toros, 184 km); (iii) road access to Montevideo (85 km); (iv) Canelones center west sub-network (130 km); (v) Canelones east sub-network (140 km); and (vi) tourist zone (200 km). Component 3: Departmental Road Maintenance Program (US$21.9 million, including contingencies). This component consists of carrying out departmental maintenance subprojects covering three years of the project period in the participating departments. The departmental road maintenance program under the proposed project entails routine maintenance of about 9,000 km of gravel roads per year, including some periodic maintenance of roads and bridges. All departments in the country, excluding Montevideo, are expected to participate in the program and it should cover three years or the maintenance requirements for these roads. Component 4: Transport Infrastructure Safety Program (US$3.8 million, including contingencies). This component entails: (i) implementing low-cost measures to increase road safety, including roads passing through urban areas, following the experience with the Second Transport project; and (ii) acquisitions and installation of road safety elements. Component 5: Transport Sector Management and Institutional Building (US$5.8 million, including contingencies). This component would entail: (i) assisting MTOP in the preparation of its transport infrastructure plan for years 2005-2009, including engineering and economic studies as needed; (ii) training for capacity building and provision of new tools (HDM-4 and RED models); (iii) strengthening infrastructure management, including enhancing technical capacity at Intendencias and supporting the preparation of master plans for regional ports; (iv) assisting MTOP in the preparation of an urban transport program through the contracting of a master plan for the Montevideo Metropolitan Area; and (v) feasibility studies, environmental assessments, and detailed design studies of the Montevideo ring-road and access roads. Page 4 4. Project Location and salient physical characteristics relevant to the safeguard analysis The project is national covering several sections of infrastructure in different areas of the country 5. Environmental and Social Specialists on the Team Mr Marco Antonio Zambrano Chavez (LCSFT) 6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) Pest Management (OP 4.09) X Cultural Property (OPN 11.03) X Indigenous Peoples (OD 4.20) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The project will have a positive impact on the living standards of the country?s population through its direct effect on competitiveness, employment, and economic growth. The negative impact of the proposed project on the local population and cultural property would be minimal, as most of the proposed roadwork will consist of the rehabilitation and maintenance of already existing interurban highways and departmental roads passing through sparsely populated areas Environmental classification. The project has been classified as ?Category B?, following the Bank?s Operational Guidelines [OP 4. 01], as no significant negative impacts that could jeopardize the natural environment of its area of influence are foreseen. This classification takes into account the fact that the proposed project will support the rehabilitation and maintenance of existing roads, either paved (national road network) or unpaved (departmental road network), or minor repair and maintenance works for transfer terminals and consequently will not involve new heavy construction activities. The main issues that have to be considered to ensure an adequate environmental management the subprojects include: stabilizing slopes, recovering areas for the exploitation and deposit of materials, controlling existing erosion processes, and incorporating road safety measures. Prevention, mitigation and/or compensation measures for these issues are straightforward. Involuntary Resettlement. This Policy is triggered because in a particular road section of Route 1 to be rehabilitated under the first component, needs a specific instrument to take Page 5 into account a potential affectation of some properties resulting from the construction of a by-pass to Colonia Valdense. In this sense, DNV developed an Abbreviated Involuntary Resettlement Plan according to the Safeguard Policy of the Bank. This Plan has been published in the INFOSHOP according the Bank's rules. According to the census carried out as part of the Resettlement Plan, 11 families are concerned and 14 properties will be affected; consisting of 11 housing units, 3 hangars, 1 commercial establishment, and a unit once used as a tire replacement shop. Residential units and commercial establishment will be compensated for lost assets and relocation; the project files contain the general practice in Uruguay concerning the evaluation of compensation. According to the socioeconomic survey, the 63% of the families concerned had incomes above 5 minimum salaries, 27% between 2 and 3 minimum salaries, and 9% just under 2 minimum salaries. Four of the eleven families concerned were renting (and had not been living in the area long), and the rest were relatively longtime residents. When interrogated on their view of the expropriation 55% said they will reconstruct their homes in the remainder of the property whilst 45% said they would move (this includes all the families that rent). The owners of the rented properties do not, according to the survey, have any particular difficulties with the potential expropriation. On the whole, the expropriation will not provoke significant resettlement only one owner-family would relocate, the others that will potentially relocate are renting. In addition, the Environmental Assessment indicates that there is no informal occupation of the right-of-way in any subproject, needing eventual resettlement. Furthermore, with the present level of detail known for other subprojects no further resettlement is foreseen. Cultural property policy. According to the new guidelines, all projects involving civil works could trigger the cultural property policy. Given this, even though there is no expectation that cultural property is in the project area, the Environmental Assessment sets forth "chance find" procedures in the case that such property is encountered. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: None identified. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Does not apply. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Environmental Assessment. The environmental assessment focused on the main aspects agreed upon with the Quality Assurance Team (QAT) of the Bank: (i) analysis of the mechanisms established to address the issues that trigger Bank safeguards; (ii) evaluation of the environmental management capacity of the executing agency; (iii) environmental evaluation of the first package of projects in each component; and (iv) and evaluation of overall compliance with the National Environmental Legislation. The environmental evaluation for the road infrastructure components of the first package of subprojects was conducted by the Environmental Unit of the DNV and reviewed by the Bank as part of Page 6 the project?s due diligence. Individual subprojects were evaluated using the screening methodology established in the QAT?s Guide for Rapid Environmental and Social Evaluation of Road Projects, with the purpose of ensuring that environmental and social issues were appropriately considered in their design. This assessment determined that for one of the analyzed projects an Abbreviated Involuntary Resettlement Plan was required, and the environmental risk for the remaining projects was moderate for six, and low for the remaining sixteen. None of the projects have critical environmental and social risks. Therefore, the project is environmentally viable and fulfils the Bank?s Environmental Safeguards Policy. DNV adopted an Environmental Manual, in 1998, that sets guidelines and specifications to be followed during execution of works to avoid or mitigate any potential adverse environmental impact. The Bank reviewed the Manual at the time, and found it satisfactory. All road sub-project works carried out under this project must comply with the DNV Environmental Manual. DNV established a formal unit charged with the oversight of all environmental aspects for road projects and the enforcement of DNV?s Environmental Manual. As a matter of common practice to prevent, mitigate and/or compensate environmental impacts, the Environmental Unit of the DNV applies the profile form for Rapid Environmental and Social Assessment developed by the Bank?s QAT adapted to the Uruguayan environmental legislation. Likewise, the Study of Environmental Assessments and Management Plans have been developed according to its legislation. The works to be executed during the first year of this project all have the permission of the Environmental Authority (DINAMA). An analysis of the DNV's Environmental Unit and Environmental Manual was a carried out as part of the Bank?s due diligence during the preparation of the PAD, resulting in the identification of two activities that should be carried out in order to improve its institutional capacity to address social and environmental issues. These activities include: (i) updating the current Environmental Manual; and (ii) developing a plan for strengthening environmental and social management in the DNV. The DNV will receive important resources in the short term from the IDB to strengthen its environmental and social management capacity. A full-time consultant will be hired to develop a series of activities that will definitely contribute to an improvement in the environmental and social management capacity within the institution, in particular the updating the Manual on Environmental Management. The environmental evaluation for the transfer terminal sub-components of the first package of subprojects was carried out by an independent consultant on behalf of DNH. Individual subprojects were evaluated using the screening methodology established for the project and based on Environmental Manual for Port Sector Activities and Project of June 1988, developed by National Port Administration (ANP), and that was approved by the Bank (First transport Project) and has been adopted by DNH. Page 7 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Environmental Assessment reports and Resettlement Plan as well as Environmental Management Plans are and will be disclosed in the Ministry?s webpage. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Date of receipt by the Bank 03/11/2005 Date of "in-country" disclosure 03/11/2005 Date of submission to InfoShop 04/07/2005 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Date of receipt by the Bank 04/01/2005 Date of "in-country" disclosure 04/01/2005 Date of submission to InfoShop 04/06/2005 * If the project triggers the Pest Management, Cultural Property and/or the Safety of Dams policies, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? No If yes, then did the Regional Environment Unit review and approve the EA report? No Are the cost and the accountabilities for the EMP incorporated in the credit/loan? Yes OPN 11.03 - Cultural Property Does the EA include adequate measures related to cultural property? Yes Does the credit/loan incorporate mechanisms to mitigate the potential adverse impacts on cultural property? Yes OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan, abbreviated plan, or process framework (as appropriate) been prepared? Yes If yes, then did the Regional Social Development Unit review and approve the plan / policy framework / policy process? Yes BP 17.50 - Public Disclosure Have relevant safeguard policies documents been sent to the World Bank's Yes Page 8 Infoshop? Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? Yes All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Yes Have costs related to safeguard policy measures been included in the project cost? Yes Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Yes Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? Yes D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Jorge M. Rebelo 03/14/2005 Environmental Specialist: Mr Marco Antonio Zambrano Chavez 03/02/2005 Social Development Specialist Mr Marco Antonio Zambrano Chavez 03/02/2005 Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Comments: Sector Manager: Mr Jose Luis Irigoyen 04/01/2005 Comments: Cleard with me. The team has complied with quality control requirements.