FOR OFFICIAL USE ONLY Report No: PAD2535 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF EUR 669.2 MILLION (US$750 MILLION EQUIVALENT) TO THE THE REPUBLIC OF KENYA FOR A HORN OF AFRICA GATEWAY DEVELOPMENT PROJECT AUGUST 19, 2020 Transport Global Practice Africa Eastern and Southern Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective June 30, 2020) Currency Unit = EURO EUR 0.89218004 = US$1 FISCAL YEAR July 1 - June 30 Regional Vice President: Hafez M. H. Ghanem Country Directors: Deborah L. Wetzel,Keith Hansen Regional Director: Riccardo Puliti Practice Manager: Benedict L.J. Eijbergen Task Team Leaders: Josphat O. Sasia, Susan Apudo Owuor ABBREVIATIONS AND ACRONYMS AADT Annual Average Daily Traffic AC Asphalt Concrete CBK Central Bank of Kenya CELARS Center for Land Acquisition and Resettlement Studies CEO Chief Executive Officer C-ESIMP Contractor’s Environmental and Social Implementation Management Plan COVID-19 Coronavirus CIG Cement Improved Gravel CSG Cement Stabilized Gravel CSO Civil Society Organization DA Designated Account DC Direct Contracting DOSH Directorate of Occupational Safety and Health Services DPC Deputy Project Coordinator EATTFP East Africa Trade Transport Facilitation Project EARTTDFP Eastern Africa Regional Transport, Trade and Development Facilitation Project EBK Engineers Board of Kenya EIRR Economic Internal Rate of Return ESF Environmental and Social Framework ESHS Environment and Social, Health and Safety ESIA Environmental and Social Impact Assessment ESMF Environmental and Social Management Framework FCDC Frontier Counties Development Council FIDIC International Federation of Consulting Engineers FOC Fiber Optic Cable FPIC Free Prior and Informed Consultations FM Financial Management GAP Improvement Action Plan GDP Gross Domestic Product GEMS Geo-Enabling method for Monitoring and Supervision GBV Gender Based Violence GFDRR Global Facility for Disaster Risk Reduction GHG Greenhouse Gases GoK Government of Kenya GPN General Procurement Notice GRM Grievance Redress Mechanism GRS Grievance Redress Service HoA Horn of Africa HoAGDP Horn of Africa Gateway Development Project HDM-4 Highway Development and Management Model HIV/AIDS Human Immunodeficiency Virus Infection/Acquired Immune Deficiency Syndrome ICB International Competitive Bidding ICT Information and Communication Technology ICTA Information and Communication Technology Authority IDA International Development Association IFC International Finance Corporation IFR Interim Financial Report IMF International Monetary Fund IPF Investment Project Financing IRC International Rescue Committee IRI International Roughness Index ITS Intelligent Transportation System JIMCC Joint Inter-Ministerial Coordination Committee KeNHA Kenya National Highways Authority KENAO Kenya National Audit Office KeRRA Kenya Rural Roads Authority KIHBS Kenya Integrated Household Budget Survey KIHBT Kenya Institute of Highways and Building Technology KMA Kenya Maritime Authority KTCIP Kenya Transparency Communication Infrastructure Project KRA Kenya Revenue Authority KRB Kenya Roads Board KURA Kenya Urban Roads Authority KWS Kenya Wildlife Authority LAPSSET Lamu Port-South Sudan-Ethiopia Transport MTRD Materials Testing and Research Division MAPS Methodology for Assessing Procurement System M&E Monitoring and Evaluation MoICT Ministry of Information, Communication and Technology MoTIHUD Ministry of Transport, Infrastructure, Housing and Urban Development MoU Memorandum of Understanding MTD Mechanical and Transport Department MTRD Materials Testing and Research Division NCA National Construction Authority NCB National Competitive Bidding NLC National Land Commission NEDI Northeastern Development Initiative NGO Non-Governmental Organization NOFBI National Optic Fiber Backbone Infrastructure NPV Net Present Value NTSA National Transport and Safety Authority NUTRIP National Urban Transport Improvement Project OAG Office of Auditor General OP/BP Bank Operational Policy OSBP One-Stop Border Post PAP Project Affected Persons PC Project Coordinator PIA Project Implementing Agencies PIM Project Implementation Manual PPA Project Preparation Advance PIT Project Implementation Team POC Project Oversight Committee PMO Project Management Office PP Procurement Plan PPADA Public Procurement and Asset Disposal Act PPP Public Private Partnerships PPSD Project Procurement Strategy for Development PS Principal Secretary PWD Public Works Department QCBS Quality Cost Based Selection RAP Resettlement Action Plan REoI Request for Expression of Interest RFB Request for Proposal RfQ Request for Quotation RMLF Road Maintenance Fuel Levy Fund RPF Resettlement Policy Framework RSIP Road Sector Investment Plan SBD Standard Bidding Document SCC Special Conditions of Contract SCOA Standard Chart of Accounts SDOI State Department of Infrastructure SDOT State Department of Transport SDoICT State Department of Information, Communication and Technology SEA Sexual Exploitation and Abuse SIA Social Impact Assessment SOE Statement of Expenditure SOP Series of Projects SORT Systematic Operations Risk-Rating Tool SPD Standard Procurement Document STDs Sexually Transmitted Diseases STEP Systematic Tracking of Exchanges in Procurement TNT The National Treasury UNDB United Nations Development Business VAT Value Added Tax VMG Vulnerable and Marginalized Groups VPD Vehicles Per Day WB World Bank WBG World Bank Group WD Wheel Drive The World Bank Horn of Africa Gateway Development Project (P161305) Contents DATASHEET ......................................................................................................................................i I. STRATEGIC CONTEXT................................................................................................................1 A. Regional and Country Context ......................................................................................................... 1 B. Sectoral and Institutional Context ................................................................................................... 4 C. Relevance to Higher Level Objectives............................................................................................. 11 II. PROJECT DESCRIPTION ..............................................................................................................15 A. Project Development Objective ..................................................................................................... 15 The Program Objective .................................................................................................................15 Program Level Indicators ..............................................................................................................16 B. Project Components ....................................................................................................................... 16 C. Project Beneficiaries ....................................................................................................................... 22 D. Results Chain .................................................................................................................................. 23 E. Rationale for Bank Involvement and Role of Partners ................................................................... 23 F. Lessons Learned and Reflected in the Project Design .................................................................... 26 III. IMPLEMENTATION ARRANGEMENTS....................................................................................27 A. Institutional and Implementation Arrangements .......................................................................... 27 B. Results Monitoring and Evaluation Arrangements......................................................................... 31 C. Sustainability................................................................................................................................... 31 IV. PROJECT APPRAISAL SUMMARY ...........................................................................................32 A. Technical, Economic and Financial Analysis ................................................................................... 32 B. Fiduciary.......................................................................................................................................... 35 C. Safeguards ...................................................................................................................................... 39 D. Climate and Disaster Risk Screening.............................................................................................. 48 E. Security Audit and Management Plan ........................................................................................... 49 V. KEY RISKS ................................................................................................................................50 VI. RESULTS FRAMEWORK AND MONITORING ..........................................................................60 ANNEX 1: IMPLEMENTATION ARRANGEMENTS AND SUPPORT PLAN .......................................72 ANNEX 2: DETAILED PROJECT DESCRIPTION .............................................................................. 100 ANNEX 3: ECONOMIC ANALYSIS ................................................................................................. 123 ANNEX 4: RESILIENCE TO NATURAL DISASTERS AND CLIMATE CHANGE IMPACTS.................. 139 ANNEX 5: MAP............................................................................................................................. 143 The World Bank Horn of Africa Gateway Development Project (P161305) DATASHEET BASIC INFORMATION BASIC INFO TABLE Country(ies) Project Name Ethiopia, Kenya, HORN OF AFRICA GATEWAY DEVELOPMENT PROJECT Somalia Project ID Financing Instrument Environmental Assessment Category Process Urgent Need or Investment Project P161305 A-Full Assessment Capacity Constraints Financing (FCC) Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [✓] Contingent Emergency Response Component (CERC) [✓] Series of Projects (SOP) [ ] Fragile State(s) [ ] Performance-Based Conditions (PBCs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [✓] Fragile within a non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster [ ] Alternate Procurement Arrangements (APA) [ ] Hands-on Enhanced Implementation Support (HEIS) Expected Approval Date Expected Closing Date 08-Sep-2020 30-Jun-2028 Bank/IFC Collaboration No Proposed Development Objective(s) To improve: (a) the movement of people and goods and digital connectivity and access to social services to communities at designated locations along the targeted sections of the Isiolo-Mandera Regional Road Corridor; and (b) the capacity of selected transport related institutions in Kenya. i The World Bank Horn of Africa Gateway Development Project (P161305) Components Component Name Cost (US$, millions) Component A: Improving Movement of People, Goods, and Digital Connectivity 666.64 Component B: Facilitation of Regional Trade and Transport 53.82 Component C: Improving Access to Selected Basic Social Services at Designated 36.98 Locations along Isiolo-Mandera Regional Road Corridor Component D: Institutional Strengthening of Selected Transport and Related 138.61 Institutions Component E: Contingent Emergency Response 0.00 Organizations Borrower: Republic of Kenya Implementing Agency: Kenya National Highways Authority (KeNHA) State Department of Infrastructure (SDoI) ICT Authority (ICTA) National Transport and Safety Authority (NTSA) Kenya Revenue Authority (KRA) State Department of Transport (SDoT) PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 896.05 Total Financing 896.05 of which IBRD/IDA 750.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Development Association (IDA) 750.00 IDA Credit 750.00 Non-World Bank Group Financing ii The World Bank Horn of Africa Gateway Development Project (P161305) Counterpart Funding 146.05 Borrower/Recipient 146.05 IDA Resources (in US$, Millions) Credit Amount Grant Amount Guarantee Amount Total Amount Kenya 750.00 0.00 0.00 750.00 National PBA 250.00 0.00 0.00 250.00 Regional 500.00 0.00 0.00 500.00 Total 750.00 0.00 0.00 750.00 Expected Disbursements (in US$, Millions) WB Fiscal Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 Annual 8.00 37.00 75.00 75.00 150.00 180.00 150.00 50.00 25.00 Cumulative 8.00 45.00 120.00 195.00 345.00 525.00 675.00 725.00 750.00 INSTITUTIONAL DATA Practice Area (Lead) Contributing Practice Areas Climate Change, Digital Development, Fragile, Conflict & Transport Violence, Governance Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating 1. Political and Governance  Substantial 2. Macroeconomic  Substantial 3. Sector Strategies and Policies  Moderate 4. Technical Design of Project or Program  Moderate iii The World Bank Horn of Africa Gateway Development Project (P161305) 5. Institutional Capacity for Implementation and Sustainability  Substantial 6. Fiduciary  Substantial 7. Environment and Social  High 8. Stakeholders  Substantial 9. Other  High 10. Overall  High COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✓] No Does the project require any waivers of Bank policies? [ ] Yes [✓] No Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 ✔ Performance Standards for Private Sector Activities OP/BP 4.03 ✔ Natural Habitats OP/BP 4.04 ✔ Forests OP/BP 4.36 ✔ Pest Management OP 4.09 ✔ Physical Cultural Resources OP/BP 4.11 ✔ Indigenous Peoples OP/BP 4.10 ✔ Involuntary Resettlement OP/BP 4.12 ✔ Safety of Dams OP/BP 4.37 ✔ Projects on International Waterways OP/BP 7.50 ✔ Projects in Disputed Areas OP/BP 7.60 ✔ Legal Covenants iv The World Bank Horn of Africa Gateway Development Project (P161305) Sections and Description Description of Legal Covenant Financing Agreement Schedule 2, Section I A(5): The Recipient shall collaborate with the Federal Republic of Ethiopia and Federal Republic of Somalia to establish by no later than December 31, 2021 (or such other date as shall be agreed in writing by the Association) - and thereafter maintain throughout the implementation of the Project - a joint inter-ministerial coordination committee with mandate, composition (including partner states’ ministers responsible for transport and roads) and resources acceptable to the Association, to be responsible for, inter alia, overall and inter-country coordination at the sub-regional level on road transport and trade facilitation matters. Sections and Description Description of Legal Covenant Financing Agreement Schedule 2 Section I E(1): The Recipient shall prepare and furnish to the Association not later than March 31 of each Fiscal Year during the implementation of the Project (beginning in calendar year 2021), a consolidated work plan and budget containing inter alia: (i) all activities proposed to be implemented under the Project during the following Fiscal Year; (ii) a proposed financing plan for expenditures required for such activities, setting forth the proposed amounts and sources of financing therefor - including the portion of the Counterpart Funds to be made available in that year - and disbursement schedule; and (iii) the training plan for such period. Sections and Description Description of Legal Covenant Financing Agreement Schedule 2, Section IV (1): For the purpose of ensuring sustainability of investments made using the Financing proceeds: (a) not later than June 30, 2023, the Recipient shall, through KeNHA, sign an implementation agreement with each of the Project Counties providing for, among other things, measures to be undertaken by the Project Counties to ensure effective management, operations and maintenance of socio- economic infrastructure developed under the Project; (b) the Recipient shall provide - or cause to be provided (through among others its Road Maintenance Fund) - funds and other resources required to ensure proper maintenance of the upgraded road sections under the Project. Sections and Description Description of Legal Covenant Financing Agreement Schedule 2, Section IV(2): Not later than June 30, 2023, the Recipient shall transform Materials Testing and Research Department into a semi-autonomous agency. Sections and Description Description of Legal Covenant Financing Agreement Schedule 2, Section IV(3): Not later than June 30, 2023 the Recipient shall transform Mechanical and Transport Division into a semi-autonomous agency. Sections and Description Description of Legal Covenant Financing Agreement Schedule 2, Section IV(4): Not later than March 31, 2021 KeNHA shall recruit five staff (an environmental specialist, a health and safety specialist, a social specialist, a gender-based violence /gender specialist and a resettlement specialist) on a full-time basis with terms of reference, qualifications and experience satisfactory to the Association to provide dedicated support for the Project and other Association-financed v The World Bank Horn of Africa Gateway Development Project (P161305) operations in the transport sector. Conditions Type Description Effectiveness Description of Condition Financing Agreement Article V 5.01 (a) and (b): (a) Each Subsidiary Agreement has been executed on behalf of the Recipient and of the Project Implementing Entity, which is a party to such agreement, in accordance with the provisions of Section I.B of Schedule 2 to this Agreement. (b) The Recipient has adopted the Project Implementation Manual, in accordance with the provisions of Section I.C.1(b)ii of Schedule 2 to this Agreement. Type Description Effectiveness Description of Condition Financing Agreement Article V 5.02: Each Subsidiary Agreement has been duly authorized or ratified by the Recipient and a Project Implementing Entity which is a party to such agreement and is legally binding upon the Recipient and the respective Project Implementing Entity in accordance with its terms. vi The World Bank Horn of Africa Gateway Development Project (P161305) I. STRATEGIC CONTEXT A. Regional and Country Context (a) Regional Context 1. The Horn of Africa (HoA), comprising Djibouti, Eritrea, Ethiopia, Kenya and Somalia, 1 has a total area of around 2.5 million km2, a population of about 180 million 2, and a combined Gross Domestic Product (GDP) estimated at US$170 billion. Approximately 70 percent of the population live in rural areas and exhibit high levels of poverty ranging from 69.4 percent in Somalia to 22.5 percent in Djibouti (Table 1). The region is also growing quickly, with the population expected to reach 250 million by 2030. Table 1: Socio-Economic Indicators Country Population Youth GDP per GDP Poverty HDI Primary Secondary Life Growth Pop. Capita Growth Headcount School School expectancy (annual %) (14-21 (2011 (annual at Enrolment Enrolment at birth, years) PPP) %) US$1.9/day years Djibouti 1.5 20.6 2,705 4 22.5% 168 63% 44% 62 Eritrea 1.9 19.0 1.510 9 66.7% 179 54% 33% 65 Ethiopia 2.5 21.5 1,730 10 26.7% 173 101% 35% 65 Kenya 2.5 20.1 1,594 5 36.8% 142 106% 30% 67 Somalia 2.9 19.9 511 N/A 69.4% N/A N/A N/A 56 Source: World Economic Indicators, Human Development Index. The Human Development Index ranks 187 countries in ascending order (2017). 2. The HoA is a complex region with some member countries exhibiting conflict and vulnerability. The region exhibits large social, political, and economic variations between and within member countries. High poverty levels in the HoA are most prevalent in the northern parts of Kenya, Somalia and Eritrea. Some of the countries suffer from protracted conflict and political strife arising from challenges of underdevelopment, resource scarcity, and economic shocks from global economic crises and climate challenges. 3 3. The countries came together in 2019 to launch the Horn of Africa Initiative, recognizing the need for a concerted effort to collectively chart a way forward, based on recent improvements in inter-state relations. Leaders of the HoA requested support from the World Bank, African Development Bank and European Union on deepening economic integration. The resulting HOA Initiative consists of a US$15 billion package of priorities under four thematic areas: (i) development of regional infrastructure networks covering upgrading of economic corridors, energy, and digital connectivity; (ii) trade and economic integration covering trade facilitation, regional value chains, and improvements in the investment climate; (iii) resilience building involving strengthening of pastoral production systems; and (iv) human capital 1 In some contexts, the “Horn of Africa” also includes other countries in the greater region. In this document, the terms “HoA” and “Horn” will refer only to the countries mentioned. 2 Horn of Africa Regional Memorandum (P172711), 2017. 3 IGAD regional Strategy, Volume 1: The Framework, January 2016. 1 The World Bank Horn of Africa Gateway Development Project (P161305) development, focusing on building skills for future employment and empowering women and youth. Details of the activities identified under each pillar of the HoA Initiative are provided in Annex 2. 4. The HoA Initiative offers opportunities to transform the economies of the region through creating an enabling environment for developing their existing potential. Key possibilities include (i) harnessing energy resources in hydroelectric power, oil and gas, or renewable sources such as geothermal and wind and (ii) developing the region’s rich agricultural land and groundwater for food production. The region’s locational advantage provides the potential for supplying food and energy to itself and to the economies of the Gulf and South Asia, as well as converting the HoA into a regional transport hub based on the development of transport corridors and inter-linked markets. In order to fully realize the potential, countries need to commit to systematically addressing the barriers to intra-regional trade and opening up opportunities for private investments to create jobs. 5. The regional road corridors in the HoA traverse isolated and underdeveloped parts of member countries that are inhabited by disadvantaged communities manifesting comparatively high levels of poverty. Thus, improving connectivity, supporting livelihoods, and building resilience will contribute towards creating a sense of belonging, inclusion, sharing of benefits, and greater peace and security. 6. The countries of the HoA are facing a triple crisis at the moment: The Coronavirus (COVID-19) pandemic, the resulting economic crisis, and food insecurity due to droughts and locusts. HoA has had about 20,000 infections and 400 deaths from COVID-19 as of June 30, 2020 compared to 394,000 infections and 10,000 deaths for Africa as of June 30, 2020. 4 The continent has experienced extraordinary supply and demand shocks leading to a sharp overall decline in economic activity. Border controls imposed to hinder the spread of the virus are disrupting supply chains and the movement of basic commodities. The Africa region is poised to face its first recession in 25 years. GDP growth for Africa overall has been revised sharply downward, from an earlier projected positive 3.1 percent to a range of -2.1 to -5.1 percent in 2020. Poverty will rise and decades of economic progress is threatened. (b) Country Context 7. Kenya is one of the largest and most diversified economies in the HoA. After a strong rebound in 2018, economic activities moderated in 2019 primarily due to dampened agricultural output and weak private sector investment reflected in lower imports of machinery and equipment, still limited access to credit, and subdued domestic demand. Before the COVID-19 pandemic, the World Bank had projected Kenya’s growth at 5.8 percent for 2020. The macroeconomic environment had been expected to remain stable and supportive of growth with low inflation, a stable exchange rate, and manageable current account deficit. 8. Northeastern Kenya—the geographic focus of the proposed project—is one of the poorest regions of the country, with social indicators significantly below the national average. In common with contiguous regions in Somalia and Ethiopia, Northeastern Kenya is fragile, arid, insecure, and not well connected with the rest of the country. Northeastern Kenya has suffered from instability for decades, especially in recent years as the conflict in Somalia has produced cross-border effects in terms of displaced populations and incidents of insecurity. According to the World Bank Kenya Poverty and Gender 4 Source: Africa Center for Disease Control 2 The World Bank Horn of Africa Gateway Development Project (P161305) Assessment Report 2015/16, Kenya is characterized by glaring regional differences. In the Northeastern region, 68 percent of the population live in poverty compared to 36 percent nationally. The report also notes that this region witnessed minimal progress between 2005/06 and 2015/16 and is still susceptible to food insecurity. Educational enrollment rates are much lower, particularly for secondary education. Girls have lower enrollment rates and educational outcomes than boys. Similar disparities are exhibited in access to sanitation facilities, access to health care, and vaccination rates. In the Northeastern region, women have lower participation in the labor market because of household work, lower levels of education, and lack of access to health services. Poor road infrastructure, especially in the rainy season when roads become impassable, contributes to the Northeast’s underdevelopment. 9. The climate in the Northeastern region is classified as semi-arid to arid. Since 1960, the mean annual temperature has increased by 1.0°C, and temperatures are projected to increase by 1.0°-2.8°C by 2060. The area is prone to harsh weather, mainly droughts in the dry season and floods in rainy season. With increases in mean annual temperatures and in the numbers of hot days and nights, droughts are expected to become more frequent and severe. Rainfall in the rainy season is projected to increase, raising the risk of flooding, erosion, washouts, scour, and debris/siltation, and aggravating connectivity problems. 10. To help address the development lag of the Northeastern region, the Government of Kenya (GoK), with the support of the World Bank, has developed a comprehensive 10-year development program, the North and North Eastern Development Initiative (NEDI). It covers 10 counties 5 of North and Northeastern Kenya that have formed a caucus, the Frontier Counties Development Council (FCDC), which are comparatively underdeveloped and account for about 63 percent of the total land area of Kenya. NEDI includes investments in the infrastructure sectors of water, energy, transport, and ICT, as well as in agriculture, particularly the livestock industry. To implement NEDI, the GoK is mobilizing financing to complement funds from the Equalization Fund established under the 2010 Constitution aimed at funding programs for the development of regions that have lagged compared to the rest of the country since independence. In 2017 the World Bank approved specific projects under NEDI covering water supply, energy and agriculture. 11. The Isiolo-Mandera regional road corridor—the primary project area—traverses the Northeastern counties of Isiolo, Wajir, Mandera and Garissa. The sparsely distributed population of these counties, numbers 2.75 million, or 5.8 percent of the total population of Kenya. The economy of these counties is dominated by migratory pastoralism, while the better watered and better serviced semi- arid areas of the region exhibit a more mixed economy including rain-fed and irrigated agriculture, agro- pastoralism, bio-enterprise, and conservation or tourism-related activities. The region experiences chronic food insecurity, degraded ecosystems, and climate change impacts, especially severe flooding. A major river, the Ewaso Ngiro, which traverses the project area, is prone to expansive flood incidents on a stretch of 20 kilometers along the Isiolo-Mandera corridor. These features have been considered in the engineering designs of the respective road sections supported by the proposed project. 12. The operating environment in the project area is high risk, comprising insecurity, inter-clan rivalry (mainly over land ownership and resources), communal boundary disputes, inadequate supply of skilled labor from the host communities, gender-based violence, exploitation and abuse of minors, water 5 The Frontier Counties Development Council (FCDC) comprises the counties of Isiolo, Wajir, Mandera, Garissa, Lamu, Tana River, Samburu, Turkana, West Pokot, and Marsabit 3 The World Bank Horn of Africa Gateway Development Project (P161305) scarcity, and inability to attract qualified contractors and consulting firms due to the remoteness of the region. These factors are likely to hinder the implementation of the project; therefore, GoK and the World Bank have made concerted efforts to put in place actions to mitigate them, as described in subsequent sections of this document. B. Sectoral and Institutional Context 13. The proposed Kenya-Horn of Africa Gateway Development Project (HoAGDP) focuses on roads, trade facilitation, and fiber optic connectivity. Thus, this section will cover these specific areas, as well as how the ongoing Coronavirus (COVID-19) pandemic is impacting the sector. (a) Roads Sector Roads Regional Context 14. The HoA is strategically located, but this advantageous position has not been fully exploited from a transport network point of view. The proposed HoA Program will support the development of regional transport corridors and modal linkages. Road is the predominant transport mode connecting the HoA countries. The rail network in the HoA is limited, and its impact on the movement of people and goods is minimal. There are no railway lines linking Kenya to Ethiopia and Somalia. A new standard gauge railway has been constructed linking Addis Ababa with Djibouti Port. More than 95 percent of Ethiopia's trade passes through Djibouti Port, accounting for 70 percent of its activity. Djibouti Port, which handled about 8 million tons in 2019, is located at the crossroads of one of the busiest shipping routes in the world, linking Europe, the Far East, the Horn of Africa and the Persian Gulf. This presents an opportunity for Djibouti Port to become an international transshipment hub. Somalia’s three main ports (Mogadishu, Berbera, and Kismayu) handle virtually all of the country’s traffic, though the total volumes are low (an estimated two million tons per annum). Kenya has the largest seaport in the HoA, Mombasa, which handled about 30 million tons in 2019. Air transport has become increasingly important to the economy of HoA. Air transport sustains the tourist industry and has been instrumental in facilitating the entry of Kenya and Ethiopia into the fresh flower and horticulture markets. Ethiopian and Kenya Airways are the major airlines of Sub-Saharan Africa, with well-developed domestic and international schedules. Both Nairobi and Addis Ababa are aviation hubs for East Africa, due their strong national carriers. 15. The HOA’s road transport and trade corridors traverse vast and underdeveloped areas, and the roads are in poor condition. 6 The roads are mostly unpaved and impassable during the rainy seasons. This contributes to the prevailing high cost of transport and doing business in the HoA. For example, along the Nairobi-Mandera-Mogadishu trade corridor, it takes an average of three days during the dry season to reach Mandera from Nairobi (983 km), compared with 12 hours for a similar distance journey from Mombasa to Busia along the Northern Corridor. For a bus trip, the fare on the former is KES4,000 (US$40 equivalent), about two and half times higher than the similar bus journey from Mombasa to Busia. 16. Upgrading the Isiolo-Mandera road section in Kenya will fill a major gap in the connectivity of the HoA region. Some improvements have been made on the road transport corridors linking Ethiopia 6 For instance, the road corridors linking Kenya, the eastern part of Ethiopia, and the ports of Mogadishu, Kismayo and Berbera in Somalia and Port Djibouti in Djibouti. 4 The World Bank Horn of Africa Gateway Development Project (P161305) with Djibouti as well as Ethiopia with Kenya, including the 220 km Dire Dawa- Dewele expressway (Ethiopia-Djibouti) and the Moyale road corridor (Ethiopia-Kenya, part of the Africa Great North Road from Cape Town to Cairo via Nairobi and Addis Ababa). Other corridors under improvement include the northern section of the Tanzania-Kenya-South Sudan corridor from Lokichar to Nadapal/Nakodok (338km) border with South Sudan (with financing from the World Bank) and the southern link of the Moyale corridor from the Sirare/Isebania border with Tanzania-Ahero section (180 km) (with financing from the African Development Bank/AfDB). In Somalia, the AfDB and European Union have provided funding for improving sections of the Mogadishu-Afgoi-Baidoa-Dolo-Addis Ababa road corridor to which the Isiolo- Mandera road connects. 17. Some regional coordination efforts in roads and transport are underway, particularly training institutes, to develop regional centers of excellence. Some already are offering training in the HoA region, such as the Kenya Institute of Highways and Building Technology in practical highway engineering and labor-based road construction and maintenance and the University of Nairobi’s recently established Center for Land Acquisition and Resettlement Studies (CELARS) in managing social risks in projects. Efforts are ongoing to strengthen regional partnerships including: (i) through the Engineers Board of Kenya, harmonizing regulations and facilitating reciprocation of professional accreditation within the Eastern Africa region; (ii) through the National Transport and Safety Authority (NTSA) of Kenya, harmonizing road safety regulations and developing road safety rules and regulations for transit traffic (including the transport of hazardous materials) on regional road corridors; and (iii) enhancing the capacity of the Materials Testing and Research Department of Kenya to provide training to staff from East Africa and HOA countries. The proposed project will support further strengthening of regional institutions to promote knowledge sharing and build human capital in the HoA. Roads Country Context 18. While Kenya’s road infrastructure is superior to that of its neighbors, upgrading and maintenance remain significant challenges. As of the most recent data (2016), the length of the entire road network in Kenya is 161,451 km, of which 39,995 km (25 percent) are categorized as National Trunk Roads and the remaining 121,456 km as County Roads. 7 Of the National roads, 27 percent are in Good condition, 43 percent in Fair condition, and 14 percent in Poor condition. About 77 percent of National roads are paved, while only about 15 percent of County roads are paved. Transport movements in Kenya are concentrated along the Northern Corridor, which connects Mombasa, Nairobi and the Uganda border. This corridor is Kenya’s primary transport artery and the main sea-access for the landlocked countries of Uganda, Rwanda, Burundi, South Sudan, and the eastern part of the Democratic Republic of Congo. The Northern Corridor traverses the most densely populated region of Kenya. The country’s road network is significantly less dense in other areas. Priorities for the improvement of the road network in Kenya are stipulated in the 15-year Road Sector Investment Plan (RSIP1) 2010-2024. An assessment of the extent to which the RSIP’s interim targets are being achieved is underway and expected to be completed by December 31, 2020. The key institutions responsible for National roads are Kenya National Highway Authority (KeNHA), Kenya Rural Roads Authority (KeRRA), and Kenya Urban Roads Authority (KURA). 7These data are based on a road inventory and condition survey carried out between the year 2007 and 2009. This inventory covers roads with way-leaves greater than 9.0 m. Source: Kenya Roads Board, 2018-19. 5 The World Bank Horn of Africa Gateway Development Project (P161305) 19. Northeastern Kenya, covering a total area of approximately 152,694 km2 or 26 percent of Kenya’s land mass, has a road network of only 9,386 km (six percent of the national total). Of this, the great majority is unpaved. Prices of most basic commodities are much higher in the Northeast, largely due to the poor state of the road infrastructure in the area. As shown in Table 2, a 50 kg bag of cement costs more than twice the price in Mandera compared to Nairobi, while a Bic ball pen in Mandera costs three times the price in Nairobi. Table 2: Price Comparison for selected commodities in Nairobi and Mandera, May 2020 Commodity Retail Price (KES) Percentage (%) Price in Mandera/Nairobi Nairobi Mandera 1 Cement (50kg) 575.00 1,250.00 217.40 2 Bread (400g) 50.00 100.00 200.00 3 Petrol (per liter) 115.00 132.00 114.80 4 Bic ball pen 10.00 30.00 300.00 Source: Kenya Bureau of Statistics 20. Road safety is an important priority. In Kenya, more than 3,000 people die annually as a result of road crashes, and twice that number are injured. Nearly half of the deaths are pedestrians. Kenya is committed to reducing the numbers of road accidents, injuries, and fatalities through the adoption of the comprehensive Safe System approach. The NTSA is the lead agency for road safety management in Kenya (established with Bank assistance). The proposed project will support NTSA to enhance its capacity to deliver on its mandate using technology and by coordinating with other regional road safety oversight bodies. 21. Governance in Kenya’s road sector has been challenging due to several factors, including complex institutional responsibilities and ownership arrangements; some incidents of collusion and other forms of bid rigging; fraud during implementation of works; and overloading of vehicles, among others. To mitigate further these governance risks, the World Bank and the GoK agreed in 2008 on a Roads Sector Governance and Integrity Improvement Action Plan (GAP), which has been implemented under subsequent Bank-financed projects and continues to be applied in new projects as needed. Implementation of the GAP’s measures has brought some improvements to the sector, including enhancing the business environment, increasing competition, obtaining more competitive bids (from two to three bids to over 15 per tender invitation on average), and some final prices below the engineer’s estimates. The proposed Kenya HoAGDP will adopt relevant aspects of the GAP. 22. Kenya’s transport sector has undergone significant policy and institutional reforms during the last 15 years, with the support of the World Bank. Some of the key reforms include: (i) the separation of policy formulation from execution of programs, leading to establishment of autonomous road authorities responsible for national highways, urban and rural roads; (ii) the development and adoption of a new roads policy and an integrated national transport policy; (iii) the creation of oversight and regulatory frameworks for the construction industry and the engineering profession; and (iv) the establishment of lead agencies for national road safety and urban transport for Nairobi, among others. Details on the entire array of reforms executed are provided in Box 1, Annex 2. The proposed Kenya HoAGDP will support further reforms and capacity building of the roads and engineering sectors. 6 The World Bank Horn of Africa Gateway Development Project (P161305) (b) Trade Facilitation and Regional Integration 23. The World Bank Group’s support towards regional integration in Africa is guided by the Bank’s Africa Regional Integration (RI) Strategy. 8 The strategy notes that priority should be given to: (i) selected transnational economic corridors where integration could be realized; (ii) addressing policy and other barriers to value addition and facilitating greater trade on these corridors; and (iii) integration priorities of the Regional Economic Communities and the expectations of the private sector in terms of connecting and growing markets. 24. The economies of the HoA countries are mostly agriculture-based and rely on imports for value added and consumption. As shown in Tables 3 and 4, imports from outside of the HoA region by member countries significantly exceed the exports. The values of exports and imports among Kenya, Ethiopia and Somalia within HoA are significant. For instance, amidst constraints arising from poor road connectivity, in 2017 Ethiopia’s and Kenya’s imports from the HoA were US$67.5 million and US$42.6 million, respectively, while their exports to the HoA were US$20 million and US$267 million, respectively. Improved transport networks, particularly roads, offer potential benefits to regional integration by making markets larger and alleviating diseconomies of scale, given the comparatively large population of the HoA region. Table 3: Imports Value within and outside HOA by Country (US$ million) % share of HoA in % share of Imports Imports from total imports from HoA in total Country from HoA Africa Imports from the World Africa Imports Djibouti 7.5 187 4,450 4.03 0.17 Eritrea 1.7 140 396 1.20 0.43 Ethiopia 67.5 741 9,760 9.12 2.54 Kenya 42.6 2,250 16,900 1.80 0.25 Somalia 190.0 298 3,070 63.80 6.19 Source: World Integrated Trade Solution database and Horn of Africa Regional Economic Memorandum (P172711), 2017 Table 4: Exports Value within and from outside HOA by Country US$ million Exports to Exports to Exports to the % share of HoA in % share of HoA Country HoA Africa World total Exports to Africa in total Exports Djibouti 0.434 9.37 99.9 4.63 0.43 Eritrea 0.0431 6.27 418 0.68 0.01 Ethiopia 20 72.1 2,260 27.7 0.89 Kenya 267 2,270 5,700 11.7 4.7 Somalia 0.911 5.43 325 16.78 0.3 Source: World Integrated Trade Solution database and Horn of Africa Regional Economic Memorandum (P172711), 2017 25. HOA countries are members of various regional bodies, mainly to provide a framework for creating economic blocks. For instance, Somalia, Djibouti, Kenya and Ethiopia are members of the 8Supporting Africa’s Transformation: Regional Integration and Cooperation Assistance Strategy for the Period FY18–FY23, May 7, 2018, Report No. 121912-AFR. 7 The World Bank Horn of Africa Gateway Development Project (P161305) Intergovernmental Authority on Development (IGAD) and the Common Market for Eastern and Southern Africa (COMESA). Although progress has been made to expand the coverage of these and several other agreements, effective implementation remains a challenge. The proposed Kenya HoAGDP will support initiatives towards agreeing on common trading protocols, starting at bilaterally between Ethiopia and Kenya, followed by integration with the rest of the members of the HoA. 26. Kenya, Ethiopia and Somalia have long common borders, with many potential locations for developing border posts to facilitate trade. However, formal trade has been limited in part by the absence of such facilities, lack of both soft and hard basic infrastructure, and general insecurity. Instead, informal and illegal trade thrives. Kenya has established a lead agency, Customs and Border Control, responsible for the management of border crossings. This gives the country an opportunity to spearhead the development of these facilities in the region as well as developing bilateral cross-border management systems to ease the movement of goods and people. 27. As mentioned earlier, the Isiolo-Mandera road corridor to be upgraded under the proposed project is located in a fragile, conflict-prone, and underserved part of Kenya. It serves as a transit route connecting Kenya to both Somalia and landlocked Ethiopia. As a regional development corridor, it can facilitate agriculture-based export growth by providing reliable access, reducing transport costs, and providing basic services to the host communities. It can also be a lifeline for transporting emergency humanitarian aid and movement of victims of conflict. 28. Kenya is one of the leading countries in the East African Community (EAC) and the emerging Tripartite Free Trade area 9 in terms of implementation of regional trade facilitation instruments. For instance, Kenya already has in place a Single Administrative Document, agreed under the EAC Customs Act, and it participates in the EAC Single Customs Territory transit regime, which is one of the more successful integrated transit management systems in the Tripartite area. The proposed Kenya HoAGDP will support relevant GoK entities to improve coordination with border agencies of Ethiopia and Somalia and facilitate implementation of integrated border management systems. (c) Fiber optic connectivity 29. There are limited territorial fiber optic links between Kenya and Ethiopia and none with Somalia. High capacity submarine cables, such as Djibouti Africa Region Express (DARE) and Pakistan and East Africa Connecting Europe (PEACE), are within the vicinity of HoA and offer opportunities for comprehensive regional digital connectivity. The proposed project will support various investments for the extension of backbone territorial fiber optic cables for improving regional and national digital connectivity. In Kenya an integrated approach has been adopted in the development of ICT infrastructure that offers lessons for the HoA. The civil works related to laying territorial fiber optic cables will be integrated in the road works for protection and better management of utilities within the road reserve. 30. Northeastern Kenya exhibits high costs of internet access and in some areas, absence of fiber optic cable links. The poor condition of the limited fiber optic cable network in Northeastern Kenya is a major hindrance to effective communication. This poses a challenge as governments in the region 9The Tripartite Free Trade Area (TFTA) is a proposed African free trade agreement between the Common Market for Eastern and Southern Africa (COMESA), Southern African Development Community (SADC), and East African Community (EAC). 8 The World Bank Horn of Africa Gateway Development Project (P161305) continue to embrace the use of ICT in the delivery of public services including customs clearances, vehicle registration and inspection, issuance of driver’s licenses, and the like. (d) Impact of Coronavirus (COVID-19) Pandemic 31. As is the case with the rest of Sub-Saharan Africa, the impact of the COVID-19 pandemic on Kenya is significant. Kenya is a regional transport and commercial hub, and the World Health Organization (WHO) has identified Kenya as a vulnerable country. Although Kenya entered the crisis with a reasonable degree of economic resilience, it was already in a constrained fiscal situation. Starting on March 25, 2020 the government closed airports, schools, churches and mosques; tightened border controls; restricted public gatherings; imposed severe limitations on movement around the country; and imposed curfews in urban areas. This may have helped slow the spread of the virus, but for the millions who work in the informal sector or in agriculture and whose livelihoods depend on daily face-to-face interactions, the effect on incomes has been severe. GDP growth for 2020 is projected to fall by five percent, representing a loss of US$10 billion in GDP. Agriculture exports have declined by more than 50 percent. The horticultural sector has lost half of its exports, half its value, and laid off most of its workforce of 75,000. The tourism and hospitality sector—comprising some 1.4 million jobs and 8.8 percent of Kenya’s GDP— has collapsed. An estimated 50 percent of the Kenyan workforce is either laid off or locked out from their jobs. Exacerbating the economic downturn are epic locust invasions and floods. 10 Pandemic-related mitigation measures have led to a widening of the fiscal gap by at least an additional 1.7 percent of GDP and of the external financing gap by some 1.4 percent of GDP in 2019/20. 32. Economic impact of COVID-19 is significant. Kenya’s economy is being hit hard through supply and demand shocks on external and domestic fronts, risking a medium-term reversal of its recent broad- based, expansionary path. In 2020, real GDP is projected to decelerate from an average of 5.7 percent growth during 2015-19 to 1.5 percent growth on the upside, or to contract by 1.0 percent if it takes longer than expected to bring the pandemic under control. Given recent acceleration in infection rates in Kenya, there is considerable uncertainty about these estimates and the duration of recovery to trend growth. In either scenario, Kenya will experience in 2020 its first contraction in real per capita income since 2008. Further downside risks include a protracted global recession undermining Kenya’s export, tourism and remittance inflows, further restrictions that disrupt the domestic economic activity, fiscal slippages and weather-related shocks. 33. COVID-19 pandemic is increasingly straining Kenya’s health services. The first case of COVID-19 was identified in Kenya in March 2020. Confirmed cases have accelerated rapidly in the past month reaching 14,000 or 29 per 100,000 population (compared to the African attack rate of 28.2, and world rate of 183.6) with just over 240 deaths or a case-fatality rate of 1.9 percent, in mid-July 2020. After a period of ramping up preparedness -- health services are increasingly stretched. Testing has increased to over 25,000 per week by end June 2020. Ninety percent of cases have been asymptomatic. GoK responded quickly by putting remedial measures in place once the first case of COVID-19 was reported in March 2020. The measures put in place include movement and assembly restrictions, and school and other closures to slow the contagion and a costed National Contingency Plan Emergency and Response Committee, and Task Force were assembled to rapidly scale up health and community preparedness. GoK also responded with monetary easing to cushion the financial sector, tax relief measures aimed at firms, 10 Center for Strategic and International Studies, “Kenya’s Case of COVID-19”, June 16, 2020. 9 The World Bank Horn of Africa Gateway Development Project (P161305) disconnection moratorium for utility services, rapid cash transfers and labor-intensive works programs to cushion the poor. 34. Tourist arrivals and business revenues remain depressed after contracting by around half in the first half of 2020. Imports contracted sharply during the first quarter of 2020 due to supply disruptions and weaker oil prices while horticulture exports and remittances saw a slight recovery after the initial collapse, leaving the current account deficit, on balanced, slightly compressed at 5.7 percent of GDP in May 2020. Private sector credit has continued an earlier trend expansion by 8 percent year to year in May 2020 supported by banking support measures deployed in March 2020, but there are early signs of emerging fragility within the financial and large company sectors. Headline inflation remained within target range at 4.6 percent year to year in June 2020 in part due to an agricultural rebound from 2019, tax relief measures and muted demand pressures. 35. A significant fiscal financing gap of 1.5 percent of GDP emerged in the final quarters of FY19/20, as revenue collections slumped, tax relief measures took effect and health and other expenditure pressures rose. The fiscal deficit widened to 8.3 percent in FY19/20 against a target of 6.0 percent of GDP and is projected to reach 7.5 percent in FY20/21, putting at risk Kenya’s fiscal consolidation agenda. Public debt rose to 63 percent of GDP in FY2019/20. Kenya’s International Monetary Fund (IMF)/World Bank debt sustainability analysis profile was downgraded in May 2020 to high risk of debt distress, and all three major rating agencies have their sovereign credit rating outlooks on ‘negative’ watch. The budgeted net external financing requirement for FY20/21 is 3.1 percent of GDP (approximately US$3.2 billion), to be sourced almost entirely on concessional terms. Risks are skewed towards a larger financing requirement, on the back of weaker GDP and revenue growth than projected, opening up of an external financing gap and possible drawdown in official reserves (which currently stand at US$9.7 billion, equivalent to 5.9 months of imports). 36. On distributional effects, the economic shocks (COVID-19 pandemic, locusts and floods) have been particularly hard on the urban poor who depend on informal employment and on food security among the rural poor. April 2020 surveys of businesses and of residents found that 62 percent of micro enterprises and 49 percent of small enterprises had closed, and 96 percent of low-income Nairobi residents had seen a significant drop in earnings compared to the pre-crisis period. Unemployment rates, which jumped from 6 to 14 percent in the second quarter of 2020, have since declined, but remain more than 50 percent higher than trend rates at 8 percent. World Food Program estimates that the food insecure population could increase from 1.3 to 3.5 million due to combined impact of COVID-19, desert locust and floods and the suspension of the national school feeding program due to school closures. A Bank-supported rapid response phone survey launched in May 2020 reported 40 percent of respondents citing food shortages, 27 percent having to skip meals, 29 percent with limited access to routine health check-ups. In terms of service delivery, public water companies’ revenues fell by an average of 35 percent and demand for electricity dropped by 18 percent during the first quarters of 2020 and the distribution company has accumulated an unsustainable cash deficit of around US$250 million. If these trends continue, 13 million people could face water service disruptions and both sectors risk lasting impact on their financial sustainability. In the aviation sub-sector, approximately 99 percent of revenue (US$200 million) is generated from activities associated with passenger travel, for instance passenger service charge; parking fee; free shops, restaurants, concessions among others. With restricted air travel and suspension of international and domestic passenger flights, revenues of aviation authorities have dropped 10 The World Bank Horn of Africa Gateway Development Project (P161305) by the same margin (99 percent) and an appeal has been made to the GoK for assistance including rescheduling of payment of loans. 37. The pandemic is adversely affecting the readiness of the project for implementation by delaying pre-construction activities such as pre-bid site visits, and the commencement of works is also likely to be delayed further. Other emerging challenges include, for instance, the postponement of bid submission dates for some of the road contracts because of restrictions on travel. Should the pandemic persist longer into the construction period, costs are likely to increase due to constraints on the size of the workforce on site at any given time and the added costs of precautionary measures to be taken to reduce chances of spreading the infection. C. Relevance to Higher Level Objectives Global/Regional Level 38. The proposed Kenya HoAGDP aligns with the World Bank Group’s twin goals of ending extreme poverty and boosting shared prosperity, particularly by providing facilities for socio-economic development and facilitating the movement of people and goods. 39. The project is aligned with the World Bank’s Africa Regional Update 2019 - Eradicating Poverty and Boosting Shared Prosperity in Africa, which includes key themes of regional integration, digital development, strengthening institutions and combatting corruption, and integrated approaches to addressing fragile areas such the HoA. 40. The project will support the implementation of the HoA Initiative (see Context above) by financing key priority investments under the four HoA pillars (regional infrastructure, trade and economic integration, resilience, and human capital). 41. The project also supports the Program for Infrastructure Development in Africa (PIDA)11 strategy on improving the continent’s major economic corridors through investments in transport, energy, trans- boundary water, and ICT. PIDA is led by the African Union, with the AfDB as implementing agency. 42. The Kenya HoAGDP contributes directly to the four main strategic priorities of the World Bank’s Regional Integration (RI) Strategy: 12 (i) Generate economic dynamism along regional economic corridors (ii) Develop functioning regional markets in four priority sectors (energy, telecom/ICT, financial sector, and technical skills) (iii) Scale up access to quality public services and entrepreneurship through complementary regional solutions (new technology, R&D, information systems, and capacity building) (iv) Promote collective action to address risks of regional economic contagion, fragility, epidemic, and climate “hot spots”. 11 https://www.au-pida.org/ 12 Supporting Africa’s Transformation: Regional Integration and Cooperation Assistance Strategy for the Period FY18–FY23, May 7, 2018, Report No. 121912-AFR. 11 The World Bank Horn of Africa Gateway Development Project (P161305) 43. The project supports the World Bank’s Africa Transport Strategy, 13 of improving: (i) access for the rural poor; and (ii) access to international and regional markets. The rural poor in Sub Saharan Africa are the most isolated in the world, with only 34 percent of the population living less than 2 km away from an all-weather road, a key factor in the rural poor’s difficulty in escaping extreme poverty. Meanwhile, Africa is the least connected region in the world, with transport costs contributing as much as 40 percent of the final price of goods, making the continent less competitive in the global market. The project includes an array of interventions aimed at helping poor and vulnerable populations in the project area to obtain lasting benefits by expanding their access to markets. These include installation of 750km of backbone territorial fiber optic cable along the key road (approximately 25 percent of Africa target of 3,000km under IDA 19-20), establishing a center to provide training on managing social issues in projects at the University of Nairobi, creating over 3,000 direct jobs during construction of road works in addition to indirect jobs such as food suppliers, sub-contracting, etc., and supporting the livelihoods of the host community through provision of public services and construction of complementary socio-economic infrastructure along the regional road corridor. National Level 44. At the national level the project will contribute to the implementation of Kenya’s long-term development strategy, Vision 2030, which aims to transition the country into middle-income status, emphasizing improvements in the provision of infrastructure and services, poverty reduction, accelerating sustainable growth, reducing inequality, enhancing equity, and managing resource scarcity. Achieving the objectives of Vision 2030’s economic pillar will require addressing numerous bottlenecks to productivity and competitiveness through policy and institutional reforms and increased investment in infrastructure. 45. The Kenya HoAGDP will support the implementation of Kenya’s Integrated National Transport Policy (INTP) of 2009. The roads sector component of the INTP highlights the importance of the corridor development approach, to enhance internal and regional mobility while facilitating (i) the movement of inputs and outputs between production and market centers, particularly to rural areas and (ii) access to services, especially health, education, markets, and administration. 46. The HoAGDP complements the GoK’s North Eastern Development Initiative (NEDI) of 2016 by addressing the unfunded priorities in transport and ICT connectivity. 47. The project will support Kenya’s National Climate Change Framework Policy (NCCFP) and Act of 2016 by incorporating climate-resilient standards and designs in road works. 48. The proposed project is consistent with the World Bank Group’s (WBG) Country Partnership Framework (CPF) for Kenya 2014-18 dated June 3, 2014, Report No. 88940. A Performance and Learning Review (PLR) of the CPF for the period FY14-18 was conducted in 2017. 14 The PLR extended the CPF for additional two years. The PLR explicitly cited the NEDI as a key focus in the WBG’s program of operations in the next phase of World Bank support, in which the proposed project was a designated element. The 13 Africa Transport Strategy and Business Plan 03022019: Bringing Jobs, Human Capital Opportunities, and Markets Closer to Africans. 14 Performance and Learning Review of the Country Partnership Strategy for The Republic of Kenya for the Period FY14-FY18, June 19, 2017, Report No. 113547-KE. 12 The World Bank Horn of Africa Gateway Development Project (P161305) project supports the updated CPS Results Matrix’s Domain of Engagement 1, Competitiveness and Sustainability (Improving infrastructure and the business environment, while being responsive to environmental pressures). 49. The HoAGDP aligns with the CPF and the WBG’s COVID 19 Crisis Response Approach Paper (‘Approach Paper’). The CPF for Kenya (87024-KE) has three strategic results areas: (a) competitiveness and sustainability—growth to eradicate poverty, (b) protection and potential—delivering shared prosperity, and (c) consistency and equity—delivering a devolution dividend. HoAGDP supports these strategic results areas and aligns with the World Bank Group COVID-19 Crisis Response Approach Paper. The new Kenya CPF FY21-26 is already under preparation but its finalization has been deferred until it becomes possible to articulate, in consultation with the Government, a WBG program that is appropriate for the changed circumstances. 50. The WBG is responding to COVID-19 pandemic by retrofitting most of its operations in Kenya. The Kenya program is being adjusted in line with the selective WBG crisis response. Kenya’s IDA19 allocation of US$2.3 billion could witness a frontloading of around US$990 million plus an already identified regional allocation of US$500 million for the first Horn of Africa project, and could benefit from additional windows. The Government’s proposed Policy and Performance Actions, under the Sustainable Development Financial Policy, are currently under review by the Bank within the context of the country portfolio. The authorities are currently considering the Debt Service Suspension Initiative and conducting discussions with relevant bilateral creditors. Table 5 outlines these adjustments structured under: (a) relief stage; (b) restructuring phase; and (c) resilient recovery phase. Specifically; (a) In the Relief stage, WBG has responded by (i) triggering a CERC under the Transforming Health Project (P152394); (ii) approving a COVID-19 Emergency Response Project (P173820); and (iii) re- allocating Program for Results disbursements of around US$200 million in the Kenya Urban Support (P156777) and Kenya Devolution Support (P149129) projects to help strengthen the health response and community preparedness at the county and local levels. To support key policy and institutional reforms – including on private sector credit, transparency in debt management and procurement, and targeting of agricultural subsidies – and address emerging fiscal financial gaps, the Bank increased programmed budget support to US$1 billion in June 2020, which along with the IMF Rapid Credit Facility (US$739 million) and African Development Bank (€188 million) support helped to close the fiscal gap in the FY2019-20 fiscal year. Under the Kenya COVID 19 Portfolio Business Plan, the Bank has identified ongoing community-level, youth and micro-enterprise projects (including the Development Response to Displacement Impacts (P166266) and the Kenya Youth Employment and Opportunities (P151831) projects) to refocus support toward vulnerable populations and secured Global Partnership for Education (P174059) for delivery of remote learning programs to vulnerable students and school reopening readiness. In this stage, International Finance Corporation (IFC) expects to invest around US$765 million for Micro and Small Medium Enterprise (MSME) financing, healthcare, manufacturing and affordable housing firms and to promote digitization of business transactions. (b) In the Restructuring phase, the country program has first focused on restructuring: (i) the Financial Sector Support Project (P151816) to shift resources toward financing for formal and informal enterprises, (ii) the Water and Sanitation Development Project (P156634) to support emergency interventions and operating costs for struggling Water Service Providers serving low income and informal settlements, (iii) the National Safety Net Project (P161179) toward rechanneling resources 13 The World Bank Horn of Africa Gateway Development Project (P161305) to vulnerable households; (iv) Kenya Climate Smart Agriculture (P154784) and National Agricultural and Rural Inclusive Growth (P15334) projects to expand programs for rural community and farm producer organizations to maintain food security and minimize value chain disruptions. A second Kenya Informal Settlements Improvement Project (P167814) was approved on August 7, 2020 to improve services and support income generation in in vulnerable urban communities. In addition, the Bank is preparing to maintain a program of development policy to mitigate fiscal shortfalls and maintain essential expenditures while deepening reforms toward long-term fiscal consolidation, improving governance and stemming corruption, improvements in Kenya’s business climate, and financial recovery in the energy sector. IFC would invest around US$1.6 billion to support private sector restructuring, value chain consolidation, investments in health care and medical education. (c) The Resilient Recovery phase, still under preparation, already includes support for accelerating digital innovations to expand access and improve service delivery including by connecting schools and health facilities, strengthening resilient community development practices including on climate action in marginalized areas, and improved public financial management governance at the county and local levels. IFC would add a further US$1.1 billion to support capital market interventions, local medical suppliers, manufacturing, agribusiness, energy, transport and telecoms. Table 5: Indicative Lending and Restructuring program (as of July 19, 2020) Relief Restructuring Resilient Recovery Transforming Health (US$10m, CERC plus Additional Financing (AF)) Water & Sanitation Saving lives COVID19 Emergency Response (US$50 Development million plus AF under consideration) Urban Support Devolution Support Climate Smart Agriculture (US$14 million, Informal Settlements CERC) Improvement 2 (US$150 Protecting the Locust Emergency Response (US$43 million) Devolution/Local support Poor & million) Climate Smart Agriculture (tbd) Vulnerable National Safety Net Program National Agriculture & Rural Development Response to Displacement Inclusive Growth Impacts Sustainable MSME Financing (US$100 million plus PSW) Business Youth Employment & Opportunities Financial Sector Support Growth & job Digital Acceleration (tbd) (Restructuring) creation Policies, new Development Policy Framework series (tbd) institutions & Electricity sector (tbd) Inclusive Growth & Fiscal Management investment: (US$1 billion) Horn of Africa Gateway rebuilding US$750 million better Note: Plain text: already delivered. Italics: project restructuring or reallocations, bold: pipeline 51. Development partners. Kenya has received support or pledges of support for COVID 19 response from other partners of around US$1.7 billion comprising US$1.1 billion in budget support (from the IMF, African Development Bank, France and the European Union), approximately US$140 million focused on health from over a dozen bilaterals, and US$300 million toward economic resilience including agriculture, support for MSMEs and trade. 14 The World Bank Horn of Africa Gateway Development Project (P161305) Series of Projects and Regional Program Funding 52. The Kenya HoAGDP is the first in a Series of Projects (SOP). This SOP will consist of a series of interdependent projects to support the HoA Initiative involving multiple borrowers, all of which will need to participate for the program’s objectives to be achievable. This interdependent/multiple borrower type of SOP aims to achieve benefits that go beyond each country’s boundaries, creating regional public goods and generating positive externalities. The SOP’s program objective is presented in Section II.A below. The funding requirements of the HoA Initiative are large (see Annex 2) and call for incremental investments and mobilization of financing from various sources. 53. Additional operations under the SOP are being planned. Discussions are underway with the Republic of Ethiopia on commencing the preparatory work, and an official request for World Bank support for the Ethiopia side of the economic corridor has been received. The Somali Republic has launched preparatory work, some of which is directly related to adjoining economic corridors such as Isiolo- Mandera. Under the Road Infrastructure Program for Somalia, the AfDB and EU are providing EUR 59.94 million to finance the improvement of road infrastructure and institutional strengthening for the sector (details in Annex 2). 54. The proposed program meets the criteria for IDA Regional Program Funding as: (i) it covers a fragile and conflict-prone area of Kenya and contiguous economically inter-dependent countries of Ethiopia and Somalia; (ii) it enhances transport and communication connectivity among Kenya, Somalia and Ethiopia; (iii) the expected transit efficiency gains cannot be fully achieved without the direct and integrated involvement of the countries sharing the corridor; (iv) the expected benefits can only be achieved through the implementation of an integrated set of infrastructure, trade and development facilitation activities in the countries the corridor adjoins; (v) the program enhances competition among transport corridors in the sub-region; and (vi) the Isiolo-Mandera road is one of the priority regional economic corridors under the HoA Initiative linking more than three contiguous countries. II. PROJECT DESCRIPTION A. Project Development Objective PDO Statement 55. The Project Development Objectives are to improve: (a) the movement of people and goods and digital connectivity and access to social services to communities at designated locations along the targeted sections of the Isiolo-Mandera Regional Road Corridor; and (b) the capacity of selected transport related institutions in Kenya. The Program Objective 56. The overarching objective of the HoA Program, which the proposed project will contribute to, is “enhancing connectivity among the HoA countries and access to seaports; facilitation of domestic and regional trade and economic integration, and road safety”. This will be achieved through a sequential improvement in physical and institutional infrastructure and promoting trade and investing in 15 The World Bank Horn of Africa Gateway Development Project (P161305) development facilitation interventions. The overall program will be implemented in a Series of Projects (SoPs). The first project of the program (Phase 1- Kenya) focuses on Kenya which is the gateway to HoA for east, south and central Africa. The follow-on Phases will focus on the improvement of adjoining economic corridors, trade facilitation, digital connectivity, human development, and promoting resilience in Somalia and Ethiopia. PDO Level Indicators 57. The expected results indicators include: (a) Average Travel time between Isiolo to Modogashe; and Wajir to Elwak, disaggregated by passengers and freight; (b) Number of public transport service providers along Isiolo-Modogashe and Wajir-Elwak; (c) Number of road crash fatalities between Isiolo-Mandera road section (per 1,000 vehicles) (d) Average processing time at border crossing for freight trucks and passenger vehicles. (e) Number of online public services used by communities along the corridor per month; (f) Number of women and children utilizing the improved social services (Social/Gender disaggregated) (g) Road Management Information System utilized for decision making and setting performance targets; and (h) Number of non-Kenyans trained in new skills in Kenyan institutions. Program Level Indicators 58. Expected outcomes of the overall program would capture the combined outcomes of the participating countries in the entire program area. Thus, the indicators will be the same but with more scope and higher targets in absolute terms. B. Project Components 59. The proposed project will comprise the following components and sub-components, with details in Annex 2: 60. Component A: Improving Movement of People, Goods, and Digital Connectivity (Cost estimate US$666.64 million, IDA allocation, US$553.20 million equivalent). Sub-component A1: Improving Selected Road Sections along the Isiolo-Mandera Regional corridor by KeNHA (Cost Estimates: US$642.54 million, IDA allocation US$533.23 million equivalent). The activities include: (a) Upgrading to bituminous standard with enhanced, more climate -resilient design standards, and carrying out road safety improvement, of selected sections of Isiolo-Mandera Regional Road Corridor including: (i) Isiolo-Modogashe (about 190km); and (ii) Wajir - Elwak (about 175km); (b) Upgrading and construction of selected spur roads along select sections of Isiolo-Mandera Regional Road Corridor to facilitate access of people to the road corridor and social services 16 The World Bank Horn of Africa Gateway Development Project (P161305) at designated locations of these sections; (c) Undertaking civil works associated with installation of a fiber optic cable along the Isiolo- Mandera Regional Road Corridor including trenching, ducting, laying of polymerizing vinyl chloride (pvc) pipes and construction of associated manholes; (d) Undertaking review and update of feasibility and detailed engineering design studies for the entire Isiolo-Mandera Regional Road Corridor and preparation of related environmental and social impact assessment reports, resettlement action plans, environmental and social assessment and framework documents - including undertaking a social impact assessment - and bidding documents; (e) Carrying out supervision of upgrading of selected road sections along the Isiolo-Mandera Regional Road Corridor and the design and supervision of civil works associated with installation of fiber optic cable; and (f) provision of consultancy services for management of social risks associated with works contracts through engagement of the services of selected civil society organizations. Sub-component A2: Improving Digital Connectivity and institutional strengthening of ICTA (Cost estimate US$24.10 million, IDA allocation US$19.97 million equivalent). The activities include: (a) Support the facilitation and implementation of measures for: (i) linking the fiber optic cable and digital connectivity between Kenya and Ethiopia and Kenya and Somalia; and (ii) negotiating regional backup capacity of submarine cables Djibouti Africa Region Express (DARE) and Pakistan and East Africa Connecting Europe (PEACE); (b) Carrying out feasibility and detailed engineering design studies for - and supervision of the supply and installation of a fiber optic cable alongside the Isiolo-Mandera Regional Road Corridor; (c) Supply and installation of a new fiber optic cable along the Isiolo-Mandera Regional Road Corridor; (d) Construction of fiber spurs and rings and connecting - to fiber optic network - selected schools, hospitals and other strategic public facilities such as pastoralist roadside markets, rest stops and community and service centers along the Isiolo-Mandera Regional Road Corridor; (e) Connection of community information centers along the Isiolo-Mandera Regional Road Corridor to fiber optic network and provision of advisory services in exploring appropriate business models in the utilization and management of the backbone fiber optic cable [network] and associated business opportunities and services; (f) Institutional strengthening of the ICTA through provision of advisory services, training and capacity building activities and targeted research involving academia to support digital innovations; and (g) Institutional strengthening of State Department of ICT to enhance its capacity to monitor and provide oversight over information and communication technologies (ICT) subsector through provision of advisory services and capacity building and training activities. 61. Component B: Facilitation of Regional Trade and Transport (US$53.82 million, IDA allocation US$46.10 million equivalent). This component includes two sub-components (a) support to KRA to facilitate trade; and (b) support to KeNHA to facilitate transport. The details are as follows: 17 The World Bank Horn of Africa Gateway Development Project (P161305) Sub-component B1: Facilitation of Regional Trade under KRA (Cost estimate US$7.24 million, IDA allocation US$5.94 million equivalent). (a) Provision of technical assistance and advisory services to KRA in areas such as: (i) strengthening of the cross-border management unit of KRA including enhancing its coordination with other border agencies; and (ii) support the implementation of an integrated border management system; (b) Support harmonization of Customs and other border management functions, risk management and control procedures; (c) Support for the implementation of the memoranda of understanding (MoU) between Kenya Customs and Ministry of Revenues of the Federal Republic of Ethiopia and between the Republic of Kenya and Federal Republic of Somalia relative to exchange of information and use of common border control procedures. This support will be further complemented through the future projects in the series; (d) Support the use of ICT for revenue collection and for facilitating clearance and release of goods to help Kenya Customs comply with new transparency requirement of e-citizen registration, electronic collection of revenue and e-reporting of clearances and release of goods; (e) Undertaking of a study on trade flows among the Horn of Africa countries of Ethiopia, Somalia and Kenya; and (f) Provision of advisory services, training and capacity building activities to KRA. Sub-component B2: Facilitation of Regional Transport under KeNHA (Cost estimate US$46.58 million, IDA allocation US$40.16 million equivalent). (a) Upgrading of selected customs administrative facilities and designated facilitation centers along the Isiolo-Mandera Regional Road Corridor; (b) Development of one-stop border posts (OSBP) at Rhamu and Mandera; (c) Construction of access road infrastructure at the border towns of Rhamu and Mandera, including bridges at Rhamu and Mandera; (d) Undertaking of feasibility and detailed engineering design studies and preparation of the associated environmental and social impact assessment reports, resettlement action plans, environmental and social assessment and framework documents, bidding documents for the road access infrastructure at Rhamu and Mandera, including bridges; (e) Carrying out supervision of works related to the road access infrastructure at Mandera and Rhamu; and (f) Carrying out supervision of works related to the development of OSBPs at Mandera and Rhamu. 62. Component C: Improving Access to Selected Basic Social Services at Designated Locations along Isiolo-Mandera Regional Road Corridor by KeNHA (Cost estimate US$36.98 million, IDA allocation US$31.88 million equivalent). This sub-component involves and supports KeNHA to provide socio- economic infrastructure and services based on a needs assessment by KeNHA at the community level, and it will include: 18 The World Bank Horn of Africa Gateway Development Project (P161305) (a) Carrying out of needs assessment for provision of basic socio-economic infrastructure and services to the local vulnerable and marginalized groups, in consultation with the said vulnerable and marginalized groups; (b) Designing identified and prioritized basic socio-economic infrastructure and service delivery to local vulnerable and marginalized groups; (c) Construction of the identified basic socio-economic infrastructure, and delivery of identified social services the local vulnerable and marginalized groups at designated locations; and (d) Carrying out supervision of the implementation of the identified socio-economic infrastructure and services the local vulnerable and marginalized groups. 63. Component D: Institutional Strengthening of Selected Transport and Related Institutions (US$138.61 million, IDA allocation US$118.82 million equivalent). The component includes four subcomponents as follows: Subcomponent D1: Strengthen the Institutional Capacities of KeNHA and Associated Institutions (Cost Estimate US$42.93 million, IDA allocation US$37.63 million equivalent). This sub-component will involve: (a) Development of modalities on management as well as operations and maintenance arrangements for the socio-economic infrastructure and facilities developed under the Project; (b) Strengthening the capacity of KeNHA in quality assurance and quality control, contract management, value engineering, road maintenance as well as safeguards and procurement management; (c) Preparation of future projects with climate vulnerability analysis, including the development of a plan for additional collection of climate and maintenance data regarding rainfall, hydrology, and incidents to increase resilience of the roadway network against climate factors; (d) Carrying out Project execution, management of social risks including those related to security, monitoring and evaluation and coordination as well as community outreach; (e) Carry out a baseline survey on the key indicators that are not available at commencement of the Project to establish post-Project impact; and (f) Enhancing local capacity in management of social risks in projects, through: (i) facilitating partnership between KeNHA, on the one hand and academic institutions and industry, on the other hand (including designing and offering training on social risks, and establishment – construction and equipping - of center for land acquisition and resettlement at University of Nairobi); (ii) facilitating partnership between KeNHA and local civil society organizations (in identifying, assessing and managing Project’s social risks including implementing measures to address gender-based violence, carrying out social engagement and outreach, management of grievance redress mechanism and undertaking perception survey on the security forces in the Project area); (iii) institutional strengthening of KeNHA’s environmental, social, land valuation and survey units; (iv) training and capacity building activities. (g) Institutional strengthening of the Frontier Counties Development Council in serving its role as a Project’s third-party monitoring entity, assisting in managing social and security risks 19 The World Bank Horn of Africa Gateway Development Project (P161305) (including undertaking community sensitization and resolution of any communal conflicts that may arise), in providing liaison services along the Isiolo-Mandera Regional Road Corridor including with Project Counties (to facilitate, among others, the implementation of the memorandum of understanding signed between the Project Counties and KeNHA on free movement of construction materials), (h) Institutional strengthening of the Directorate of Occupational Safety Health and Services through: (i) reviewing its institutional capacity to execute its mandate; (ii) developing an integrated occupational safety and health information management system (OSH-MIS) and digital information center; (iii) acquisition and maintenance of equipment and laboratory materials for carrying out inspections and audits to ensure compliance with occupational safety and health laws; and (iv) capacity building for the Directorate’s staff on specialized areas of OSH. (i) Strengthening the capacity of the National Land Commission (NLC) in undertaking land acquisition and resettlement for road projects through; (i) reviewing NLC institutional capacity to execute its mandate on land acquisition and resettlement; (ii) enhancing the internal capacity of NLC to support land acquisition and resettlement; and (iii) providing of relevant training to the NLC on land acquisition and resettlement. Subcomponent D2: Strengthen the Institutional Capacities of State Department of Infrastructure (SDoI) and Associated Institutions (Cost Estimate US$52.92 million, IDA allocation US$45.19 million equivalent). This sub-component will involve: (a) Enhancing SDoI capacity to monitor and oversee road sub-sector including: (i) strengthening its project management and monitoring capacity; (ii) coordination of Project implementation activities including audits; (iii) provision of training; and (iv) development of gender action plan for transport sub-sector; (b) Institutional strengthening and technical capacity to support the transformation of the Materials Testing and Research Department (MTRD) into a semi-autonomous entity including through: (i) defining a roadmap for implementation of a Cabinet memorandum (2006) that approved transformation of MTRD’s into semi-autonomous government entity (to become Kenya Road Transport Research Institute); (ii) financing the start-up activities to enhance MTRD’s capacity to fulfill its new role; (iii) enhancing the capacity of selected material testing and research laboratories; (iv) provision of Training; (c) Supporting the transformation of the Mechanical and Transport Department (MTD) of the SDoI into an semi-autonomous government entity including through: (i) defining a roadmap for implementation of a Cabinet memorandum (2006) that approved transformation of MTD’s into semi-autonomous government entity; (ii) strengthening MTD institutional capacity in, among others, management of construction equipment, management of information systems and supporting the local construction industry; (d) Institutional strengthening of Kenya Institute of Highways and Building Technology in developing skills for the transport sector; (e) Institutional strengthening of State Department of Public Works to enable its professional to collaborate and coordinate project design across the board from inception, design, documentation, procurement, implementation and maintenance. 20 The World Bank Horn of Africa Gateway Development Project (P161305) (f) Institutional strengthening of the National Construction Authority (NCA) in overseeing and developing the local construction industry. (g) Institutional strengthening of the Engineers Board of Kenya in promoting capacity and providing oversight of the engineering profession and practice. (h) Institutional strengthening of Kenya Roads Board including through: (i) the development and establishment of road asset management system; (ii) the establishment of a roads spatial data infrastructure framework; (iii) implementation of the Kenyan Constitution of 2010 requirements on management of the road network in the country; and (iv) preparation of a national rural roads investment plan to provide a framework and roadmap for supporting a future rural road access project to improve access of rural population. (i) Institutional strengthening of Kenya Urban Roads Authority and Kenya Rural Roads Authority through technical assistance and training in management of the classes of roads under their jurisdiction. Subcomponent D3: Strengthen the Institutional Capacities of State Department of Transport (SDoT) and Associated Institutions (Cost Estimate US$14.42 million, IDA allocation US$12.00 million equivalent). This sub-component will involve: (a) Finalizing the development of a 50-year integrated multi-modal transport masterplan; (b) Provision of technical assistance technical assistance in enhancing institutional capacity at SDoT to effectively oversee and monitor the performance of all modes of transport in the country as well as integration the national transport infrastructure with that of the region and undertaking a study on driver insurance cover; (c) Review of the Traffic Act; (d) Undertaking studies on the appropriate studies on the appropriate locations to establish rest stops and a dry port along the Isiolo-Mandera Regional Road Corridor; (e) Support to Kenya Railways Corporation in setting up fully-fledged dedicated commuter rail unit as well as standard gauge railway (SGR) unit to undertake business development and monitor operations and maintenance of the commuter rail services and SGR system respectively; and enhance the capacity of the marine training school at Kisumu. Subcomponent D4: Strengthen the Institutional Capacities of National Transport and Safety Authority (NTSA) (Cost Estimate US$28.34 million, IDA allocation US$24.00 million equivalent). This sub-component will involve institutional strengthening of the NTSA in providing oversight on road safety matters including improving road safety at a regional level through enforcing compliance with traffic regulations using ICT (enhancing ICT based Transport Integrated Management System -TIMS) in areas such as over-speeding; unroadworthy vehicles as well as unqualified drivers on the roads. Thus, mounting of roadblocks to measure speeds or crackdown on unroadworthy vehicles on major roads will be minimized. The activities involved include: (a) Upgrading and reconfiguration of the Transport Integrated Management System (TIMS) by installing smart poles with sensors and real time communication gadgets at selected locations on the main road corridors; acquiring and implementing real time GPS-based vehicle tracking systems; upgrading of NTSA’s data storage capacity and data security systems; and acquisition 21 The World Bank Horn of Africa Gateway Development Project (P161305) of an advanced data analytics systems and standard data sharing interface for road safety data. (b) Automation of motor vehicle inspection centers and a driving school. (c) Carrying out research on road safety management (safe systems approach) to establish baseline data on road safety performance indicators in Kenya. (d) Strengthening of NTSA management information systems and building NTSA’s institutional capacity in monitoring, evaluation and learning. (e) (i) Enhancing NTSA capacity in: carrying out road safety audits, evaluation of road designs, identification of hazardous locations based on crash data, recommending remedial measures appropriate for hazards, and post audit evaluation of hazardous locations; (ii) facilitating NTSA contribution in harmonization of safety regulations among similar agencies in East Africa and Horn of Africa and in development of specific road safety rules and regulations for transit traffic within the region and specifically for the transport of hazardous materials on regional road corridors; and (iii) undertaking public sensitization and awareness on road safety matters and design of improved protocols/guidelines for emergency response. 64. Component E: Contingent Emergency Response Component (CERC) (US$0, IDA allocation US$0). Component E will provide preparedness and rapid response measures to address disaster, emergency and/or catastrophic events, in accordance with the applicable CERC Manual. Following an eligible crisis or emergency, the Borrower may request the Bank to re-allocate project funds to support emergency response and reconstruction. With no allocation at appraisal, this component would draw from the uncommitted resources under the project from other project components to cover emergency response. Resilience to Climate Change 65. The components and activities supported by the project are consistent with, and advance climate change resilience objectives in substantial ways as defined in Kenya’s National Adaptation Plan 2015-2030 and Kenya’s Nationally Determined Contribution (NDC) under the United Nations Convention on Climate Change. Detailed information on climate resilience is included in Annex 4. C. Project Beneficiaries 66. The project will provide basic access to the population of Northeastern Kenya, a population which has suffered from long standing isolation and extreme poverty. The upgraded road and fiber optic connections will attract investment, create jobs, and improve information sharing and access to internet- based opportunities. The main beneficiaries of the project include the vulnerable and marginalized communities in North Eastern Kenya, a population of 3.2 million residents; the traveling public who will benefit from improved travel times and reduced transport costs; and the businesses and traders (originating from Kenya, Somalia and Ethiopia) who account for the major commercial activities in the region which are likely to increase with the improved road corridor. Women, vulnerable groups 15 and children in all three countries will particularly benefit from improved transport service as this will enhance movement, the delivery of food in times of scarcity, and facilitate government response in the event of 15(i) female-headed households with dependents; (ii) disabled household heads; (iii) poor households; (iv) landless elderly households with no means of support; (v) households without security of tenure; (vi) child headed household, (vii) households with people living with terminal illnesses or disability 22 The World Bank Horn of Africa Gateway Development Project (P161305) any security incidents. The provided capacity building will strengthen the on-going policy and institutional reforms in the transport sector and enhance human capital development. 67. As the project also aims at regional integration and trade facilitation, the vulnerable and marginalized communities in the Southern part of Ethiopia and potentially in the western part of Somalia (when the border is opened) will also benefit from the project. With the institutional strengthening and reforms advanced and supported under the project, the network of beneficiaries is expected to be further enlarged due to improved service delivery in the transport sector. D. Results Chain 68. Theory of Change. The illustration of the relationship between project specific development objective, outcome indicators, activities and components are presented in diagram 1 below. The following assumptions which are external to the Project are considered: (a) Security in the region and country will not deteriorate; (b) Local Communities and Local governments support the project; (c) Water for civil works is available for entire construction period; (d) There are many contractors interested in the project activities and participate in tender; (e) Government will allocate adequate budget in a timely manner; and (f) COVID19 social restrictions will continue to ease up during project implementation. 69. The main drivers of change and the strategic agenda promoted under the project include: (a) environmentally sustainable growth; (b) improved governance and institutional capacity building; and (c) regional integration. These strategic drivers are promoted through application of new knowledge solutions in key transport sector institutions and operational areas; promotion of conducive policy and instituional environment; and developing close relationships with Client and Implementing Agencies that foster strong parternship in driving the development and change agenda. E. Rationale for Bank Involvement and Role of Partners Rationale for Bank Involvement 70. The World Bank’s support will provide value to the GoK in two key respects. First, it will help transfer good practice and knowledge in road designs and constructions in fragile areas like North Eastern Kenya. Second, the Bank’s involvement will assist the GoK in leveraging additional resources from other financiers to finance the entire corridor. On its part the Bank will finance the upgrading of 365km plus 30km of spur roads. The Isiolo-Mandera section provides the main link to Northeastern Kenya, serving people living in extreme poverty and is part of the Kismayo, Lamu and Mogadishu corridor identified as one of the priority interventions under the HoA Initiative supported by the World Bank. The road is in poor condition resulting in long travel time traversing the region and high transport costs contributing to making this part of Kenya an unattractive environment for doing business. 71. As part of the proposed project, the Bank provided Technical Assistance, funded through the Global Facility for Disaster Risk Reduction (GFDRR), to support KeNHA in mainstreaming climate 23 The World Bank Horn of Africa Gateway Development Project (P161305) resilience considerations in the national road transport sector planning, investments and management. The specific objectives of this assignment included: (i) informing detailed design of the proposed improvements along the Isiolo- Mandera road corridor to address natural hazards/projected climate related risks; (ii) developing a methodology for assessing vulnerability of a national highway corridor to natural hazards/projected climate related risks and; (iii) recommend institutional reforms needed (policy, institutional and operational level) to enhance capacity of KeNHA in road network climate resilience planning. Role of Partners 72. The World Bank involvement has encouraged other financiers to provide financing for the upgrading of virtually the entire Isiolo-Mandera section of the regional road corridor (740km on the Kenyan side) under parallel financing. The financing plan and the status of preparation of each road section is presented in Table 6. It should be noted the Bank will finance the upgrading of 365km of the main corridor plus 30km of spur roads to connect communities within the vicinity of the corridor. Table 6: Financing Plan for Upgrading the Isiolo-Mandera Road Corridor Road Section Km Potential Financier/Status 1 Isiolo-Kulamawe- 190 World Bank. Bids have been invited after completing the Modogashe design and disclosure of the associated safeguard instruments. 2 Modogashe-Samatar 67 GoK as part of the annuity program under parallel financing. The is design completed, associated safeguard instruments reviewed and cleared by the World Bank and disclosed; and bidding documents ready. 3 Samatar-Wajir 90 Consortium of five Arab banks9 under parallel financing. The is design completed, associated safeguard instruments reviewed and cleared by the World Bank and disclosed; and bidding documents ready. 4 Wajir-Elwak 175 World Bank. KeNHA is revising the draft bidding documents incorporating Bank’s comments. 5 Elwak-Rhamu-Mandera 218 African Development Bank (AfDB) under parallel financing. Detailed engineering design and preparation of associated safeguard instruments is underway financed by the World Bank Total 740 10 Note: 9: The partners include; Arab Bank for Economic Development in Africa (BADEA); The Saudi Development Fund (SDF); Opec Fund for International Development (OFID); The Abu Dhabi Fund; and The Kuwait Fund for Arab Economic Development (KFAED). 10: The World Bank funded road sections will include an additional 30km of spur roads 24 The World Bank Horn of Africa Gateway Development Project (P161305) Diagram 1: Theory of Change Component Activities Outputs Outcome indicators PDOs Program Objective Upgrading of Isiolo- 365km of road upgraded along Average Travel time between Component A: Improving Modogashe and Wajir- target road sections plus 30km Isiolo-Modogashe and Wajir- the movement of people Elwak road sections spur roads Elwak, disaggregated by freight and goods, and digital and passengers connectivity Fiber optic cable installed for Installing a Fiber Optic To improve (a) To enhance 740 km plus 200km spur FOC Number of public transport Cable (FOC) along the the movement connectivity services operators along Isiolo- Isiolo-Mandera corridor of people and of among Modogashe and Wajir-Elwak, disaggregated by freight and goods and digital the HoA FOC last mile connections to Review of the border passengers connectivity and countries; key social institutions clearance processes and access to social access to Component B: Facilitation procedures services to seaports; Number of online public of Regional Trade and Border clearance processes facilitation services used by communities communities at Transport and procedures updated of domestic upgrading selected along the corridor designated customs administrative locations along and regional facilitation centers and Selected customs Average time to cross target the targeted trade and construction of border administrative facilitation border crossing sections of the economic posts and associated centers and border posts Isiolo-Mandera integration; over the river bridges Regional Road and road Component C: Improve Number of women and Corridor; and (b) safety. Basic services such as School, children utilizing the improved Access to Selected Basic Market, health clinic capacity of Social Services at social services (Social/Gender transport and Identification, design and constructed, and services disaggregated) Designated Locations along provided related Isiolo-Mandera Regional construction of social- institutions in Road Corridor Building economic infrastructure Kenya Material Testing and Research Number of road crash fatalities Department and Mechanical between Isiolo-Mandera road Transport Department are section (per 1,000 vehicles) transformed into a Semi- Reforming, establishing Road Management Information Component D: Institutional autonomous agency and capacity building of System utilized for decision Strengthening of Selected transport and related making and setting Transport and Related institutions Systems (e.g. TIMS), guidelines performance targets Institutions and policies enhanced, and training institutions Number of non-Kenyans trained established or strengthened in new skills in Kenyan institutions 25 The World Bank Horn of Africa Gateway Development Project (P161305) F. Lessons Learned and Reflected in the Project Design 73. The project design considers lessons learned from previous World Bank-financed transport projects in Kenya and the East African region. Previous and on-going Bank-financed operations in the transport sector involve multiple components, implementing agencies and several beneficiary entities. This somewhat complex structure reflects the division of institutional responsibilities within the transport and ICT sectors in Kenya and fits the local institutional responsibilities. This arrangement has worked successfully for transport operations such as the recently completed Northern Corridor Transport Improvement Project (P082615), (NCTIP), US$460 million; East Africa Trade Transport Facilitation Project (P121354), (EATTFP), US$150 million; Kenya Transport Sector Support Project (P124109), (KTSSP); US$503.5 million, National Urban Transport Improvement Project (P126321), (NUTRIP), US$300 million; and on-going Eastern Africa Regional Transport, Trade and Development Facilitation Project (P148853), (EARTTDFP), US$500 million. 74. Building on the experience of previous and ongoing projects, the HoAGDP will be coordinated by the Project Management Office within the SDoI. Also, financing the implementation of agreed reforms under previous projects enabled immediate startup and operationalization of new institutions such as KeNHA, KURA and KeRRA 16, and establishment of the regulatory framework and associated lead agencies such as NCA, KMA, EBK and NTSA. This lesson has been adopted under the project and funds have been allocated to support the transformation of MTD and Materials Division into semiautonomous government agencies. 75. The Cameroon experience related to the Maroua-Mora (P143801) and Mora-Dabanga-Kouserie Road Project (P079736) offered critical design insights including ingredients into the development of a security management plan for the project; the methodology and scope of the assignment on managing any cases related to gender based violence (GBV), sexual exploitation and abuse (SEA) stakeholder engagement and grievance redress mechanism (GRM). 76. Other lessons learned and adopted in the project design include: (a) project affected persons will be compensated before the commencement of works; (b) local civil society organizations with relevant experience and knowledge of the project area will be engaged to manage any GBV risks, community consultations and the grievance redress mechanism; (c) social infrastructure and services will be provided to the vulnerable and marginalized groups (VMGs); (d) an integrated corridor development approach will be adopted, including laying of a fiber optic cable alongside the road corridor improvement; (e) a SMART road concept leveraging on technology will be adopted; (f) given the fragile environment of the project area, a relatively longer implementation period has been adopted; and (g) the services of a Resettlement Action Plan (RAP) Implementation Consultant will be engaged to support resettlement activities for this project. Items (b), (c), (d), (e), (f) and (g) are lessons learnt from the on-going EARTTDFP. 16 KeRRA – Kenya Rural Roads Authority; KMA – Kenya Maritime Authority 26 The World Bank Horn of Africa Gateway Development Project (P161305) III. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements 77. The Kenya HoAGDP is multi-sectoral, reflecting the nature of the HoAGDP Regional Program. It requires the involvement of diverse implementing agencies. The PDO of the Kenya project covers improving the movement of people and goods, enhancing access to digital and social services, and building institutional capacity. Achieving this expansive PDO depends not just on the additive effect of different interventions, but also on synergies among the project’s components and activities. For example, to convert improved physical facilities into effective, modern and sustainable services, it is necessary to engage with institutions that deal with regulation, maintenance, training, and resource mobilization, among other elements. Accordingly, the GoK, with the Bank’s support, has crafted a set of implementation arrangements that are carefully aligned with the project’s comprehensive objectives and scope. These arrangements are necessarily complex, involving six main implementing agencies, and coordination will pose challenges. To address them, the project design builds in various measures, including an oversight committee, a high-level Project Coordinator, and substantial technical assistance and training, arrangements that have worked well for similar recently completed and on-going Bank funded transport projects in Kenya. 78. The arrangements for this project are compatible with the numerous integrated transport and trade projects that the Bank has financed globally. Such projects typically have several implementing agencies from the transport and trade sectors. All Bank-financed transport projects address safety, so it is standard to incorporate a country’s transport or road safety agency. In addition, it is not unusual to involve other institutions that handle such key elements as policy, regulation, maintenance and safeguards. 79. In Kenya, the State Department for Infrastructure (SDoI, under the Ministry of Transport, Infrastructure, Housing, Urban Development and Public Works/MoTIHUDPW), is responsible for national roads development policy; development, standardization and maintenance of roads; enforcement of axle load controls; materials testing; protection of road reserves; and registration of engineers and road contractors. SDoI oversees key road sector institutions such as the Kenya National Highways Authority, Kenya Roads Board, Kenya Urban Roads Authority, Kenya Rural Roads Authority, and Kenya Institute of Highways and Building Technology, among others. The State Department of Transport (SDoT) is responsible for transport policy management and oversight of institutions related to rail, civil aviation, maritime, vehicle inspections and registrations, and national transport safety. The achievement of the project’s essential governance and institutional results requires the direct involvement of these two entities. Finally, a number of specific activities financed by the project in the areas of infrastructure maintenance, climate and disaster resilience, land acquisition, workplace safety and health, asset management, and intermodal coordination require the participation of specialized agencies (termed beneficiary entities in this project) which will not directly implement project-financed activities, but which will provide technical inputs and will utilize the relevant products. 80. The Project will be carried out by six implementing agencies (Annex 2, Figure 2.1), namely, KeNHA, ICTA, KRA, NTSA, State Department of Infrastructure, and State Department of Transport. It is important to note that, in the interest of institutional sustainability and long-term capacity building, the 27 The World Bank Horn of Africa Gateway Development Project (P161305) project’s implementation is “mainstreamed” in the relevant GoK institutions; no project-specific implementing agency or unit has been created. State Departments of Infrastructure and Transport will implement the project for themselves and on behalf of several other beneficiary entities, including among others NCA, Materials Testing and Research Department, Mechanical and Transport Division, Public Works Department, KRC, KRB, KIHBT, University of Nairobi; National Land Commission, and Department of Occupational Health and Safety Services. The project will be mainstreamed into the operations of these institutions and form an integral part of their investment program. Regarding overall coordination and monitoring of the project, the Project Management Office (PMO) under SDoI will be responsible while the six implementing agencies will be responsible for the implementation of their respective components or subcomponents of the project, as follows: Component/Subcomponent Implementing Agency Sub-component A1 Sub-component B2 KeNHA Component C Sub-component D1 Sub-component A2 ICTA Sub-component B1 KRA Component D2 SDoI Component D3 SDoT Sub-component D4 NTSA 81. KeNHA shall enter into implementation agreements with beneficiary entities whereby KeNHA shall make portions of the proceeds of the Financing available to beneficiary entities to finance complementary activities to enhance the efficacy of achieving the objectives of the project. The financing amount to the beneficiary entities is as follows: University of Nairobi, US$6.03 million; National Land Commission, US$2.5 million; Frontier Counties Development Council, US$2.0 million; and Directorate of Occupational Safety, Health and Services, US$1.2 million. Detailed implementation arrangements will be provided in the Project Implementation Manual (PIM). 82. Enhancing KeNHA’s implementation performance. KeNHA as the main implementing agency will manage activities accounting for approximately 86 percent of the credit proceeds including high value contracts. Thus, several measures have been designed to enhance implementation performance of KeNHA and put it on a trajectory to be one of the premier road agencies in Africa and the world. These measures are detailed in the PIM. Strategic institutional capacity building activities will be undertaken to enhance KeNHA’s capacity to manage procurement and implementation of contracts. Meanwhile, key performance timelines and indicators for administration and management of procurement and contract implementation will be developed and the details will be included in the PIM. 83. Project Implementation Teams (PITs). Each implementing agency has appointed a PIT empowered to manage the day-to-day activities of its components of the project. All PITs will comprise regular staff of the implementing agencies. Each PIT will be headed by a Team Leader and will comprise members with the appropriate skills mix and adequate experience and qualifications. The Team Leader 28 The World Bank Horn of Africa Gateway Development Project (P161305) will report directly to the Chief Executive Officers (CEOs) of KeNHA, ICTA, NTSA and KRA or to the Principal Secretary (PS) of SDoI or State Department of Transport (SDoT), as appropriate. The members of all PITs have already been appointed, and the World Bank will be consulted prior to any changes in PIT membership. 84. Project Coordination. The GoK has appointed a Project Coordinator (PC) and a Deputy Project Coordinator (DPC) under the PMO of the State Department of Infrastructure (SDoI). The PMO is responsible for coordination and monitoring of the execution of Bank financed transport projects in Kenya. The Project Coordinator will mobilize the authority of the PMO to deal with any major issues not resolvable at the level of a particular implementing agency. To ensure effective monitoring, each implementing agency and beneficiary entities shall provide information on the status of preparation and execution of all aspects of the project including, budgetary allocation, procurement, disbursement, processing of payment, implementation status of environmental and social aspects to the PMO. The PC assisted by the DPC shall: (a) regularly convenes quarterly meetings to review progress of implementation of the project; (b) manage the M&E consultant; (c) monitor the implementation of the works financed by other financiers along the Isiolo-Mandera corridor; and (d) work with the inter-agency Project oversight committee in addressing critical issues identified during project preparation and implementation. Further KeNHA will be responsible for overall coordination of the road component of the project, and will ensure uniform design standards are applied, and that the already prepared instruments for managing environmental and social aspects are complied with for the entire Isiolo-Mandera Road Corridor irrespective of the financier. This will be responsibility of the Team Leader of KeNHA’s PIT. 85. National Project Oversight Committee (POC). The GoK has established the POC responsible for steering, oversight and strategic guidance to project implementation, and resolve bottlenecks particularly of a policy nature that may arise. The POC comprises the PS, SDoI; PS, SDoT; PS, SDoPW; PS, SDoICT; CEOs of KeNHA, ICTA, NTSA and KRA; a representative of the National Treasury (TNT), the PC and the DPC. The PS, SDoI, will chair the POC while the PS SDoT, will be the alternate Chair. The PMO led by the PC will provide the secretariat. These arrangements reflect the successful experience from other World Bank financed transport projects in Kenya. 86. Regional Oversight Arrangements. The overall program will involve Somalia, Ethiopia and Kenya. The three countries will establish a Joint Inter-Ministerial Coordination Committee (JIMCC) comprising the Ministries responsible for transport and roads. The JIMCC will have an oversight responsibility and will be responsible for overall regional co-ordination. JIMCC will engage with the Inter-Governmental Agency for Development (IGAD) on trade facilitation matters and inter-country coordination. 87. Development partner coordination. The development partners expected to finance the upgrading of the Isiolo-Mandera road have proposed establishing a coordination mechanism that would help to share information on the upgrading works and ensure consistent application of safeguard instruments prepared for the entire corridor. KeNHA will lead the joint supervision effort across the sections. To this effect, during the implementation phase, MoTIHUDPW of Kenya will lead in the preparation of a framework for the establishment of the regional coordination arrangement. The framework would be applied upon signing of a financing agreement with at least one of the other potential development partners. 29 The World Bank Horn of Africa Gateway Development Project (P161305) 88. Special preparation provisions. The proposed project is processed under Investment Project Financing (IPF) Policy, Paragraph 12: Projects in Situations of Urgent Need of Assistance or Capacity Constraints due to conflict. The project area is classified as fragile though Kenya as a country, is non- fragile. However, the Borrower has not triggered the following sub-paragraphs of IPF Policy Paragraph 12: 12(a) that allows for the deferment of fiduciary and safeguards requirements during preparation; and 12 (c) and (d) that allow for alternative legal and operational project implementation arrangements. GoK continues to comply with the fiduciary and safeguard (social and environmental) requirements and has not sought alternative implementation arrangements. Though sub-paragraphs of 12(b) has been triggered and the details are in paragraph 110. 89. Frontier Counties Development Council (FCDC). The project will support FCDC as the liaison between the FCDC County governments, national government implementing agencies particularly in the implementation of the MoU signed between KeNHA and the participating counties. Due to its convening power, FCDC will undertake the following activities: (a) support and complement stakeholder engagement, grievance redress mechanism and grievance redress mechanisms function under the three civil society organizations. (b) Carry out targeted consultations with elders and customary institutions. (c) Support land acquisition and resettlement activities in addressing and negotiating disputed community boundaries. (d) Convening key county officials like Members of County Assembly, Members of Parliament, and County Government Officials. (e) Support the needs assessment consultations process for the social-economic infrastructure prioritization process. (f) Third-party monitoring for the areas that the Bank Team will have no access. (g) Advisory role on management of social risks and impacts, stakeholders and community consultations, grievance redress mechanism, and gender-based violence for the road project. (h) Advisory role to KeNHA existing community conflict, security instability, community grievance redress mechanism, and the maslah laws 17. (i) Representation in the security management committees and teams. (j) Support to the community participatory monitoring and evaluation on the management of social risks and impacts. (k) The support will involve capacity building of the FCDC Secretariat to coordinate, monitor, and report on the county government information flow and community sensitization activities and third-party monitoring. (l) Other tasks will involve coordination and harmonization of priority regional agreements on peace, conflict, and security to foster joint regional investments and actions for conflict resolution, countering violent extremism, and creation joint advocacy and policy activities to build an enabling environment that will help in the implementation of the project. 17Maslah system is a traditional alternative dispute resolution mechanism which gives priority to compensation of the victim's clan as opposed to punishment of the perpetrator. 30 The World Bank Horn of Africa Gateway Development Project (P161305) B. Results Monitoring and Evaluation Arrangements 90. Monitoring of project performance will be carried out by a monitoring and evaluation (M&E) consultant (an accredited local university in Kenya) who will report on the progress towards achieving the objectives of the project against the indicators provided in the results framework and monitoring arrangements in Results Framework and Monitoring matrix (Section VI). 91. The M&E consultant will also monitor the impacts of the risks identified. Based on the experience of similar Bank-financed projects in the sector, the project will also offer another opportunity for linking academia with industry. KeNHA will use a competitive selection process to engage the responsible accredited university. The selected university will sign a contract with KeNHA and delegate the management of the Contract to the PMO. The PMO will work in close collaboration with the implementing agencies and beneficiary entities. The selected university will assign a team of experts and will provide both semi and annual reports. While the M&E consultant will report the overall progress of the project quarterly or annually, data collection of each target is responsibility of implementing agencies. 92. The M&E system of the project will be complemented by a variety of support mechanisms, including: (a) the construction consultants who will oversee the day-to-day progress of works on the site; (b) the use Geo-Enabling method for Monitoring and Supervision (GEMS) by KeNHA and FCDC staff. GEMS is a systematic approach of getting insights about investments in geographic locations where access is either nonexistent or limited due to active conflict, high insecurity, or logistical constraints; and (c) engagement of local CSOs with experience to manage matters relating to Gender Based Violence in the project area through creating awareness. Further details are included in Annex 1. C. Sustainability 93. As with other World Bank-financed projects in the transport sector in Kenya, the activities of the project will be mainstreamed into the operations of the implementing agencies and beneficiary entities. The GoK will provide, through the Road Maintenance Fund managed by the Kenya Roads Board (KRB), sustainable sources of finance to maintain the upgraded road sections through long term maintenance contracts to protect the performance of the investment. Meanwhile ICTA will ensure the fiber optic cable will be maintained as part of the wider network in the country, in collaboration with service providers including developing a business model for the utilization of fiber optic capacity upon commissioning. These actions will reinforce the Government’s ownership of the project. Improved capacity, created through both investments in systems and training of personnel, will further support the sustainability of the project. Also, in the MoU signed between KeNHA and the participating counties, the management and maintenance responsibilities of the social infrastructure and services to be provided under the project is transferred to the county government to ensure their sustainability. 94. KRB currently collects about US$600 million a year to finance maintenance expenditures of the road network. The project will provide technical assistance to strengthen the maintenance capacity of KeNHA, the maintenance resources management efficiency of KRB, and facilitate the procurement of contractor(s) for long term maintenance contracting of the upgraded road sections. This will be complemented with the establishment of a Roads Management Reporting System (RMRS) which will enable monitoring of the pavement condition, production of medium to long-term investment strategies 31 The World Bank Horn of Africa Gateway Development Project (P161305) and plans that protect or enhance asset value and at the same time allow setting of performance targets for Road Authorities. 95. The regulatory frameworks governing the construction industry, road safety, engineering profession and practice will be strengthened. Regulatory institutions will be capacitated with enhanced oversight functions for better delivery of services. IV. PROJECT APPRAISAL SUMMARY A. Technical, Economic and Financial Analysis Technical Analysis Component A and Subcomponent B2: 96. Activities proposed under Component A and Subcomponent B2 will focus on the improvement of the road corridor to two lane paved configurations, construction of bridges across rivers and providing associated roadside amenities. The project will support application of best practices in road design and make use of the Bank’s expertise and experience in similar fragile regions. The designs of socio-economic infrastructure will incorporate the needs of local communities and women. 97. The road designs will be “climate informed” ensuring adaptability of the road corridor to any potential natural disasters as well as enhancing mitigation measures. Road designs were done by experienced international consultants. Appropriate roadside amenities such as roadside stations, bus shelters, truck laybys, climbing lanes, over-taking sections, speed calming measures to enhance road safety, maintainability and proper drainage will be provided. The road design standards and specifications applied under the project conform to the latest design practices in the country and compare well with international practice. See Annex 4 for more information on the project’s contribution to climate resilience. 98. Fiber optic cable installation under Subcomponent A2 will be completed along the entire road length between Isiolo and Mandera. Despite high costs and low penetration, mobile internet is still the leading access option in the project area 18. Operators rely on expensive satellite and microwave systems for backhaul networks. Development of the fiber optic cable infrastructure alongside the improvement of the road corridor is a cost-effective approach for the proposed investment as it will leverage the assessments of safeguard, environment, and social protection policies, as well as ensure the technical quality and coordination of implementation. 99. The design of both the roadworks and fiber optic cable works will be coordinated at early stages as well as during construction. Moreover, the construction of the fiber optic cable will enhance the growth of internet in this area. Cost savings in laying the fiber due to the integrated project model are projected to reduce the cost of service delivery by 40 percent, in turn leading to a similar reduction in cost for the end user. With the fiber optic cable in place, the telecommunication infrastructure and internet access for economic development activities in the region will be facilitated. 18Based on the available information from the Communication Authority of Kenya, Second Quarter Sector Statistics Report for the Financial Year 2019/2020 (October-December 2019) 32 The World Bank Horn of Africa Gateway Development Project (P161305) Component B: 100. Efforts to address barriers to the movement of goods and people along the corridor and across the borders will integrate the economy of the Northeastern region with the rest of Kenya and the HoA, facilitating trade and transport, and creating economic opportunities for people of Northeastern Kenya who exhibit entrepreneurial acumen. Component C: 101. Provision of socio-economic infrastructure and services will support the vulnerable members of the host communities along the corridor by providing services such as schools or providing economic empowerment through the provision of markets and through developing and executing marketing systems for local produce. Component D: 102. Activities will assist SDoI in its effort to improve coordination between transport and ICT development, thereby helping to reduce the cost of doing business in this region. Institutional strengthening will enable the training of personnel and foster human resource development in the HoA and enhance governance in the transport sector by transforming the Materials, Testing and Research Department and Mechanical and Transport Department of the SDoI into more business-like institutions. This will improve efficiency and service delivery in the construction industry and facilitate the development of a construction material’s atlas or map for the country, helping improve management of these resources. Guidance and training will focus on integration of transport and service providers operating in the road corridors. The partnership with University of Nairobi will enable building local training capacity in the country and HoA on the management of social issues in projects beyond the transport sector and help in applying new knowledge solutions to critical issues. In addition, under this component, NTSA’s capacity will be enhanced by leveraging technology to improve on road safety. Economic and Financial Analysis 103. Feasibility studies and detailed engineering designs of the various sections of road corridor to be upgraded under the project have been completed. The total length of the road corridor to be constructed, namely, Isiolo-Modogashe and Wajir-Elwak is approximately 365km. Based on the design studies, the traffic levels range from about 325 vehicles per day (vpd) to over 4,948 vpd (on section of the corridor within Isiolo town). According to the economic feasibility studies done for each road section, the economic rates of return (EIRR) ranged from about 12.7 to 21.20 percent and the net present value (NPV) ranged between US$1.16 million to 51.94 million (assuming a 12 percent discount rate). The NPV and EIRR for the entire Isiolo-Modogashe-Wajir-Rhamu road section (664km of the 740km) is estimated at US$230.4 million and 16.1 percent, respectively. The details are provided in Annex 3. 104. Traffic volumes are expected to grow by between 6 and 8 percent per annum, given that the economic growth in the country has been in the range of 5 to 6 percent per annum in the last five years and is expected to grow between 5 and 7 percent per annum in the future. The expected growth is expected to be sustained, with more resources devolved to counties thereby spurring increasingly rapid economic development. 33 The World Bank Horn of Africa Gateway Development Project (P161305) 105. A Greenhouse Gas (GHG) emissions analysis was carried out., Given the relatively low baseline vehicular traffic, the proposed improvements are expected to increase overall emissions due to increased traffic volumes. The impact of increased emissions is, however, expected to be insignificant in comparison to the benefits likely to be realized by the communities along the road because the road traverses an open land with low population densities. Annex 4 discusses the details of GHG analysis. 106. At the national level, although the road infrastructure is built as a transit corridor, it will provide basic access to the local population living in the hinterland of the road, populations often underserved and living under extreme poverty. Improvement of the road will reduce travel time, vehicle operating costs, and transport costs, (about a one-way trip from Wahir to Nairobi currently costs about KES2,500 and takes two (2) days). It will also help reduce regional development imbalances within Kenya. In addition, construction of road-side markets under the project will serve as an outlet for local products, benefitting the pastoralist communities living along the corridor. Improved road and ICT connectivity is expected to attract investment and create jobs` and economic opportunities for the local population. Rationale for public sector provision/financing 107. The Isiolo-Mandera corridor provides the only direct road link to Isiolo, Wajir and Mandera counties in Kenya and is a key gateway to the HoA. This regional road corridor serves people living in high levels of poverty relative to the rest of Kenya. The road is in a deplorable state resulting in long travel time traversing the region and high transport costs. The region is cut off during heavy rains. The prevailing conditions therefore present an unattractive environment for doing business. The improvement of the corridor will: (a) improve the business environment; (b) stimulate economic development in the area; (c) help attract private investment; (d) improve the link between Kenya and Somalia, as well as Ethiopia and the larger HoA region; (e) enhance quick response by law enforcement agencies to any security related incidences; and (f) strengthen internet connectivity between this region and the rest of Kenya and the world. Furthermore, the corridor traverses a region that is home to refugees and its improvement will help in the reduction in time and transportation costs of humanitarian aid to the people of Somalia presently suffering from conflict and displacement. 108. The World Bank has experience in Kenya and other countries in developing projects in such fragile and isolated regions. The Eastern Africa Regional Transport, Trade and Development Facilitation Project, for instance, is supporting Kenya in upgrading the main transport corridor in Northwestern Kenya, linking Kenya with South Sudan. This experience in a similar context offers relevant lessons and will be shared. It is in this context that the GoK has requested World Bank assistance to support the proposed transformation of the Northeastern counties. 109. Current traffic levels on the proposed corridors (in the range of 200-650 vehicles/day), do not exhibit the potential for revenue generations through tolls or any other means. Moreover, considering the potential for conflict, the unstable security situation, the region’s remoteness, and given the underlying nature of intervention to “open-up” the region, it is unlikely that private financing can be mobilized for this operation. 34 The World Bank Horn of Africa Gateway Development Project (P161305) B. Fiduciary (i) Financial Management 110. Based on the challenging local operating conditions discussed in paragraph 88 above and the Risks section (Section V), the project area falls within the classification of fragility within a non-fragile country (IPF paragraph 12). The Borrower has triggered Paragraph 12(b) on special limits on the use of Project Preparation Advance (PPA). The project has benefited from a higher limit on its PPA of US$10 million, which has financed feasibility and detailed engineering design studies, preparation of safeguard documents, and a security assessment of the region and a security management plan for the project. 111. An FM assessment was conducted, and the results showed that KeNHA, ICTA, KRA, NTSA, SDoI and SDoT have adequate capacity and experience to effectively implement the proposed project. The six agencies have experience in management of Bank-financed projects and have well-staffed FM units headed by qualified project accountants. Budget arrangements were assessed as adequate and will be aligned to country budget processes. 112. The conclusion of the assessment is that the Financial Management arrangements have an overall FM risk and residual rating of Substantial due to associated procurement challenges, which satisfies the Bank’s minimum requirements under World Bank Policy and Bank Directive on Investment Project Financing, and therefore is adequate to provide, with reasonable assurance, accurate and timely information on the status of the project required by IDA. 113. The Bank is providing capacity building training to ICTA and SDoI to further strengthen financial reporting. Material in-country disbursement delays were noted in the transfer of funds from the Designated Account (DA) in the National Treasury to the relevant project accounts. These are being addressed as part of the Portfolio reform dialogue. Each of the agencies will designate a qualified full-time project dedicated accountant. 114. Project activities primarily consist of large-scale contracts and consultancies. However, there will also be community and county level activities related to socio-economic infrastructure and related operational aspects of the social-economic infrastructure, especially under Component C for KeNHA. Nevertheless, these activities have no CDD-type arrangements and are assessed as posing no additional fiduciary risk to KeNHA, as they would be implemented as part of the broader contracts for which KeNHA has adequate capacity. 115. The Project will adopt the Statement of Expenditure (SOE) method of disbursement. Most of the payments will be made using the direct method of payment which will further reduce the FM risk. 116. Counterpart Funds and Value Added Tax (VAT) Exemptions. GoK will provide counterpart funds for the project mainly towards covering upfront expenditures for land acquisition, resettlement and compensation and project operating costs. The credit proceeds may be used to finance taxes other than the VAT. HoAGDP is exempted from VAT requirements as contained in a letter dated July 20, 2020 from GoK. The National Treasury will expedite the mechanism on the management of VAT exemption 35 The World Bank Horn of Africa Gateway Development Project (P161305) whereby implementing agencies will not be required to pay VAT on goods, works or services directly linked to the Project implementation. The PIM will provide the details. 117. Credit Amount and Currency of Denomination of the Financing Adopted by GoK: The IDA allocation for the project is US$750 million and the costing of the project has been carried out in US dollars. Based on the exchange rate, prevailing at as of June 30, 2020, USD 1= EUR 0.89218004, the credit amount has been determined to be six hundred and sixty-nine million, two hundred thousand Euro (EUR 669.2 million). (ii) Procurement Management 118. The Project Procurement Strategy for Development (PPSD) has been prepared in consideration of the nature and complexity of the contracts, the level of definition of the scope of the contracts, market information, operational context, client capacity, and implementation scheduling aligned with project period procurement risks, among others. It sets out the selection methods. The PPSD has identified project procurement implementation risks and makes recommendations regarding market approaches and selection methods to be followed by the Borrower during project implementation for the procurement of Goods, Works, and Non-consulting and Consulting Services. The PPSD describes the overall project operational context, market situation, Implementing Agencies (IAs) procurement capacity to articulate project procurement activities, and contract management to help minimize risks identified. 119. Procurement for the proposed project will be carried out in accordance with the ‘World Bank Procurement Regulations for Borrowers under Investment Project Financing’, dated July 1, 2016, and updated November 2017 and August 2018, hereafter referred to as ‘Procurement Regulations’ and the provisions stipulated in the project financing agreement. The project will be subject to the World Bank’s Anticorruption Guidelines, dated July 1, 2016, and beneficiary disclosure requirements. 120. Thus, procurement of the goods, works, non-consulting services and consulting services required for the project and financed out of the credit proceeds will be carried out in accordance with the World Bank Procurement Regulations. In order to apply procurement rules, a provision to this effect has been included in the Financing Agreement clarifying that should there be a conflict between the World Bank Procurement Regulations and the domestic procurement legislation or regulations, then the World Bank Procurement Regulations will prevail (refer to Schedule 2, Section 1(F) of the Financing Agreement). Further, for all contracts procurement process that uses Bank’s Standard Procurement Document (SPD), procurement complaints shall be resolved following arrangements in the World Bank Procurement Regulations rather than the arrangements set forth in the Public Procurement and Asset Disposal Act No.33 of 2015 and the regulations thereunder. 121. Advance procurement. The World Bank Procurement Regulations allow and encourage advance procurement as an approach that plays a critical role in facilitating efficient and timely project implementation and avoiding costly implementation delays particularly in large infrastructure project such as HoAGDP. Considering this, the National Treasury will provide policy direction, guidance and clarity and undertake necessary policy development to enable the use of advance procurement in projects intended to be funded by external financiers, following procurement regulations of the external financing institution as well as incorporating corresponding budgetary aspects. In order to assist the Government, 36 The World Bank Horn of Africa Gateway Development Project (P161305) to initiate a well-informed policy revision to this effect, the project will support an analytical work on National Procurement System Performance using Methodology for Assessing Procurement Systems (MAPS-II), the outcome of which will inform any revisions to the existing policy and the necessary procurement reform actions, including advance and sustainable procurement options. 122. Local content in the contracts under the Project. The full incorporation of local content initiative within the framework of World Bank Procurement Regulations is a process that requires analytical work to inform the decision to this effect. Noting the Bank’s openness to support the initiative, the project will support the Government request for technical assistance for this purpose. A National Procurement System performance assessment will be conducted using the Methodology for Assessing Procurement System (MAPS II) tool to understand the implication of the provision of “Local Content” with regards to procurement sustainability, achievement of value for money in procurement process and fairness in respect to foreign and local bidders. Through the evidence based analytical work using MAPS II assessment tool, any policy gaps will be established and upon addressing them, the application of local content related to projects financed by the development partners such as the World Bank will then be considered. 123. Based on the market analysis and information obtained from various sources including historic details available with IAs, the PPSD concludes that there will be less supply market risk for the identified procurement activities. Since there are reasonably adequate market players, risk of bid participations or tender competition risk on major contracts is not considered to be high. The contract packaging, market approach options, selection methods and market route arrangements have been guided by risks identified in the PPSD and proposed mitigation measures. The initial Procurement Plan (PP) has been prepared for those activities that are identified at the project preparation stage and approved in the Bank’s Systematic Transaction of Exchanges in Procurement (STEP) which automatically publishes the same on Bank’s external website and UNDB online. In order to enhance bid participations, reasonable incentive mechanisms, fit for purpose contracts slice and packaging, appropriate risk allocation and security improvement arrangements in the road works contract sites, among others, have been suggested by the PPSD. Local NGOs or CSOs will be deployed to support management and implementation of Social and Environmental aspects, including GBV and SEA risks. 124. Based on past experiences, the PPSD has identified four major risks associated with the effective and efficient implementation of major contract procurement and implementation. These major risks, include: (i) inadequate procurement capacity and lack of mainstreaming procurement, leading to protracted delays in concluding the contracting process; (ii) implementing agencies’ Procurement decisions being interfered with by other national public procurement or accountability bodies who are not aware of the provisions of the financing agreement, leading to processes being stalled for long periods before agreement is reached; (iii) weak contract management leading to time and costs overruns; and (iv) long delays in making payments by the client to contractors and consultants that affects contractors’ cashflow and negatively affects project overall performance. Thus, the overall Project Procurement Risk rating is Substantial. The PPSD has made recommendations regarding how these generic risks and their impact could be minimized. Provision has been made for institutional and staff capacity building under the project. 125. The project will support enhancing KeNHA’s project procurement implementation performance capacity building activities. KeNHA as the main implementing agency will manage over 86 percent of the 37 The World Bank Horn of Africa Gateway Development Project (P161305) credit proceeds and the corresponding project activities. To enhance procurement implementation capacity the project will finance technical assistance in: (a) restructuring and mainstreaming of engineering procurement; (b) preparing an engineering procurement and contracts management manual and user’s guide; (c) designing an innovative online (software) based contracts implementation monitoring system; (d) carrying out contracts’ quality review at critical stages of execution of high value contracts; (e) undertaking a National Procurement System Performance Assessment using MAPS II tool with a supplementary, in-depth procurement performance analysis for future Alternative Procurement Arrangement (APA) candidate entity system for KeNHA. 126. The project will adopt relevant aspects of the Kenyan road sector GAP, in particular: unit costs will be rigorously investigated and estimated; stringent due diligence will be conducted on bidders, consultants and suppliers; bids and qualifications will be subjected to much higher levels of scrutiny; use of post-qualification bidding procedures for large works contracts will be continued; and the “Engineer” will be an independent works supervision consultant fully empowered to make decisions as per FIDIC rules. 127. A Procurement Plan (PP) acceptable to the Bank covering the first eighteen months has been prepared and is included in Annex 2. For each contract to be financed by the Credit, the different procurement methods or consultant selection methods, estimated costs, prior review requirements, and time frame agreed upon between the Borrower and World Bank in the approved PP. Subsequent PPs will be submitted and approved through STEP. The PP will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 128. A General Procurement Notice (GPN) was prepared and published in United Nations Development Business (UNDB), on the Bank’s external website on February 14, 2017, and both the initial and the PPSD continue to be updated as appropriate in response to the prevailing market situations, evolving contract packaging and cost estimates. Specific Procurement Notices for all goods and works to be procured under International Competitive Bidding (ICB) and Expressions of Interest for all consulting services to cost the equivalent of US$300,000 and above will also be published in the STEP which automatically publishes on Bank’s external website and on UNDB online. The Borrower will also publish same on its official website and national press of wide circulation. 129. Training. Each implementing agency and beneficiary entity shall: (a) prepare and get the endorsement of the POC of their respective annual training program for financing under the project and submit it to the Bank for review and clearance; (b) ensure that the courses identified target enhancing skills in weak areas that require strengthening or where gaps exists; (c) ensure training targets enhancing the skills of staff directly involved in the execution of the project; and (d) adopt cost effective training approaches to benefit as many staff as possible such as in-country group training. It is expected that each entity should ensure the training program specifies: (a) the training envisaged; (b) the personnel to be trained; (c) the selection methods of institutions or individuals conducting such training; (d) the institutions conducting the training (if already selected); (e) the duration of the proposed training; and (f) the cost estimate of the training. Reports by each trainee upon completion of training would be mandatory. 38 The World Bank Horn of Africa Gateway Development Project (P161305) C. Safeguards 130. Overall environmental and social risks. The Borrower prepared the applicable safeguard instruments which were reviewed, cleared and disclosed at various dates and include Environmental and Social Impact Assessments (ESIAs) and Resettlement Action Plans for (Isiolo-Modogashe, Modogashe- Wajir, and Wajir-Elwak road sections), and Resettlement Policy Framework (RFP) and an Environmental and Social Management Framework (ESMF) for the entire Isiolo-Mandera corridor as well as Social Assessment. The date each safeguard instrument was disclosed on the Bank’s website and in-country are detailed in Annex 1, Table 1.6). The Project will finance the upgrading of the following road sections: (a) Isiolo-Modogashe, 190km; (b) Wajir-Elwak, 175km; and (c) 30km of spur roads. This is not a continuous road section. There is a middle section, Modogashe-Wajir (157km) which will be upgraded with financing from the Government of Kenya under annuity program (67km from Modogashe to Samatar, and 90km Samatar-Wajir by a consortium of Arab Banks). 131. Given the unprecedented nature of the COVID-19 pandemic, the FIDIC standard bidding documents for civil works contracts with ‘enhanced Environmental and Social Framework (ESF)’ (edition dated July 2019) shall be used. These standard bidding documents include sample contracts with provisions that go beyond FIDIC’s general requirements on the management of health and safety at project sites and contain several of Bank’s Particular Conditions on relevant requirements placed on the contractor and supervision consultant specific to these aspects. (i) Environmental Safeguards 132. The project is assigned Environmental Assessment Category A. Environmental Assessment Category A was assigned as the potential environmental and social impacts are expected to be significant, sensitive, irreversible and cumulative. The potential adverse environmental and social impacts include community and project worker insecurity; social and labour unrest as a result of a rush for job opportunities; noise and vibrations during construction; soil erosion and pollution from workers camps, borrow pits and quarries; potential pollution and degradation of Lorian and Borji swamps that intersect with the proposed project road; habitat fragmentation, impact on wildlife, physical and/or economic displacement; traffic disruptions; labour influx to the project area; occupational and community health and safety issues during construction; security and community conflict issues; and GBV including sexual exploitation, abuse and sexual harassment 133. Isiolo-Modogashe road section. this road section does not traverse through or have any protected areas nearby. The ESIA has identified elephant migratory crossing corridors that intersect the road between Isiolo and Garbatula at: (i) Shaba-Kachuru route; (ii) Moliti-Charfa Garfasa; and (iii) Kora Matasara route. The road design has provided large box culverts for use by wildlife and livestock herders and speed calming measures and signage at known elephant and other wildlife crossings to warn motorists of potential hazards. In addition, the ESIA has recommended that before finalizing the design of the crossings, the Design Engineers should evaluate various wildlife crossing options for environmental and social impacts and select one after consultation with the Client, KWS, wildlife NGOs and the Bank. 134. Modogashe-Wajir Road Section: The road section crosses a seasonal overflow section of North Ewaso Ngiro River, which originates from the Aberdare ranges. The low lying, flat topography of the area 39 The World Bank Horn of Africa Gateway Development Project (P161305) is susceptible to flooding and as a result, the entire length of the road will be built on 1.5m to 2m of fill rising to about 2m to 4m in the Lorian swamp area. The road crosses the North Ewaso Ngiro River near Habaswein, after which the river drains into the semi-permanent Lorian swamp. The road crosses the Lorian swamp starting at Km 24 and ending at Km 49. The Project design has provided large box culverts structures along the swampy sections which will act as drainage structures during the wet seasons and allow the river to flow. The ESIA has recommended that the embankment slopes where the livestock and wildlife cross the road be made flatter for ease of usage. The ESIA has recommended that before finalizing the design of wildlife crossings, the Design Engineers should evaluate various livestock and wildlife crossing options for their environmental and social impacts and select the most appropriate option(s) after consultation with the Client, KWS, local communities and wildlife NGOs. The ESIA has also recommended that Bio-diversity Assessment Study for Lorian swamp be carried out before commencement of work on the road. 135. Wajir-Elwak Road Section. The area traversed by this road section has no perennial rivers crossing but there are laghas (seasonal rivers). No under- or over- passes are proposed but speed calming measures and signage at known wildlife crossings and historical livestock crossing points will be installed to warn motorists of potential hazards. The crossings will be identified in consultation with the local communities and KWS. 136. The project will lead to several potential positive impacts. The project is expected to generate positive environmental and social impacts that include enhanced transportation and rural accessibility, reduced travel time and transport costs, urbanization for rural towns for better access to government services through internet access, trade facilitation, short-term and long-term jobs, reduced travel time and reduced CO2 emissions to the atmosphere and the road will facilitate economic and social development for the project area. Upgrading the road to bitumen standards is expected to improve security. 137. The project triggers three environmental safeguards policies. The project triggers OP/BP 4.01 (Environmental Assessment) because the project will support activities with potential adverse environmental and social impacts, the project triggers OP/BP 4.04 (Natural Habitats) because the construction works may impact existing ecosystems along the corridor including but not limited to the Lorian and Borji Swamps, which are considered natural habitats. OP/BP 4.11 (Physical Cultural Resources) is triggered because the project will involve civil works that may potentially affect both the known and the unknown physical cultural resources along the road corridor. The ESIA reports include mitigation measures and have been prepared, reviewed and cleared by the Bank and disclosed (details in Annex 1, Table 1.6). 138. Project on International Waterways OP/BP 7.50: The Policy is not triggered because the project will not finance any activities that use international waterways. The Project will drill water boreholes to provide water for construction works. These water boreholes will require standalone Environmental and Social Impact Assessment (ESIA) for new site (s) and compliance to statutory requirements. The respective ESIA will confirm that the new borehole (s) to be drilled will not use transboundary aquifer or aquifers connected to International Waterways. 40 The World Bank Horn of Africa Gateway Development Project (P161305) 139. The Environmental and Social Impact Assessments (ESIAs) have been prepared and disclosed on date for defined activities that include upgrading construction works for the road. The ESIAs have been prepared by KeNHA with the assistance of three Independent Consultants to meet the requirements of Category A projects (details are in Annex 1). The preparation involved two levels of stakeholder consultations with Project Affected Persons (PAPs), Non-Governmental Organizations (NGOs), National Government agencies and County governments where the proposed road project traverses. An Environmental and Social Management Framework (ESMF) has been prepared to cover activities that are as yet undefined that include: (i) social-economic infrastructure such as schools, health facilities, etc.; (ii) auxiliary facilities that include the asphalt plants, crusher plants, campsites, quarry, burrow areas, dumpsites and water boreholes; (iii) border posts; and (iv) the ICT sub-component of the project. Site specific ESIAs/ or ESMPs will be prepared once the specific sub-projects are selected, and the corresponding locations identified during implementation. Table 7: Safeguard Policies Triggered by the Project Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Pest Management (OP 4.09) X Indigenous Peoples (OP/BP 4.10) X Physical Cultural Resources (OP/BP 4.11) X Involuntary Resettlement (OP/BP 4.12) X Forests (OP/BP 4.36) 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 140. Project Associated Activities. The World Bank has financed the designs for the entire Isiolo-Elwak (522km) road section through a Project Preparation Advance (PPA). The designs for the Elwak to Mandera is underway utilizing the balance from the PPA. The safeguards documents prepared include ESIAs for (Isiolo-Modogashe, Modogashe-Wajir, and Wajir-Elwak road sections), ESMF for the entire Isiolo- Mandera corridor, RAPs for (Isiolo-Modogashe, Modogashe-Wajir, and Wajir-Elwak road sections), and RPF and SA for the entire Isiolo-Mandera corridor. The World Bank will finance the upgrading of two sections: (i) Isiolo-Modogashe road section; and (ii) the Wajir-Elwak road section, while construction of (iii) Modogashe-Samatar (67km) and (iv) the Samatar-Wajir sections (90km) will be financed by Government of Kenya (GoK) and a consortium of Arab Banks respectively. These two sections (Modogashe-Samatar (67km) and Samatar-Wajir (90km) are considered associated facilities to the Project because (a) the design and preparation of safeguard documents are financed by the World Bank; and (b) the construction activities, though not financed by the World Bank, are (i) directly and significantly related to the Project, (ii) are necessary to achieve the Project Development Objectives, and (iii) the construction of these road sections will be carried out contemporaneously with the Project. The safeguards instruments for these associated facilities were reviewed and cleared by the World Bank, and during implementation the Borrower will comply with the approved instruments. 141. The preparation of the safeguard instruments for the Elwak-Rhamu-Mandera section is ongoing. The instruments are being updated by Independent Consultants as per the World Bank 41 The World Bank Horn of Africa Gateway Development Project (P161305) Safeguards Policies. Upgrading this section will be financed by the Africa Development Bank (AfDB). This section will also be considered an associated facility, based on the rationale explained in the foregoing paragraph. As such, the Project ESMF and RPF will apply to this section as well, and the instruments currently under preparation will be subject to review and clearance by the World Bank. During implementation the Borrower will comply with these instruments. 142. The Borrower will prepare site specific ESIAs/or ESMPs for Project auxiliary facilities. The auxiliary facilities include the asphalt plants, crusher plants, campsites, quarries, borrow areas, dumpsites and water boreholes. Their ESIAs/or ESMPs will be submitted to the Bank for review and clearance prior to commencing the civil works. Prior to commencement of works the Contractor(s) will prepare Contractor Environmental and Social Management Plan (CESMP) for respective road sections, the CESMPs will be shared with the World Bank for review and clearance prior to commencing any construction works. (ii) Social Safeguards 143. The project will result in both positive and negative social impacts that will require mitigation. The social benefits will accrue from: (a) opportunities for short-term employment during construction; (b) long-term employment and job opportunities from the economic growth of the project area; (c) improved access to social services to be provided under the project particularly to the local Vulnerable and Marginalized Groups (VMGs); (d) long-term benefits from increases in road safety and time saved; (e) water provided to the local communities by the contractors during and after construction; (f) capacity building of the local institutions and CSOs in the management of GBV predominant among the VMGs in the local community; (g) reduced travel time and vehicle operating costs with the proposed road improvements; and (h) enhanced road safety; benefits which will primarily accrue to the poor echelon of the society from the provision of road-side amenities. Meanwhile the internet connection charges will reduce significantly. The enhancement of trade facilitation measures will boost business and address the food deficiency the region faces. The details on social aspects of the project area are in Annex 1. 144. The project will result in many benefits to the immediate communities and neighbouring regions. Upon completion of construction, the road improvement will lead to improved access to public goods and services. It will also lead to improved income and thus boost standards of living for local residents. On the other hand, the project implementation may lead to increases in economic stratification and contribute to impoverishment of some sections of the society as noted in paragraphs 8, 11, 145-146. 145. Potential negative social impacts will include: (a) demographic impacts that will lead to in- migrations to the local community as a result of influx of workers and newcomers moving into the area in search of business opportunities; (b) overstretching the community health facilities and safety; (c) social changes within the community’s close-knit family and community structures associated with modernization; (d) disintegration of the existing social ties and communal networks which cushion the vulnerable members of the community; (e) unrealistic expectations of the community from the project due to poor stakeholder engagement and lack of a grievance redress mechanism that addresses community concerns; (f) temporary economic loss to businesses that will be displaced, as some of the parts of the corridor traverses urban settings (such as Isiolo, Kulamawe, Modogashe, Wajir, Kotulo and Elwak) will affect street vendors (informal traders) who use the existing corridor to sell brewed coffee, 42 The World Bank Horn of Africa Gateway Development Project (P161305) tea, readymade clothes and other consumable goods as a means of earning their livelihood are likely to be affected and lack of adequate Free Prior and Informed Consultations (FPIC). 146. Thus, the upgrading of road corridor and other physical construction including laying the fiber optic cable in such areas will affect these people’s livelihood activities, physical displacement of local communities on public land, impact on cultural heritage and gender-related risks. Various existing aspects of the community’s culture will be impacted, since other individuals from outside the community will interact with the local people daily at different levels. This will lead to: changes in norms which will lead to multiplicity and in some cases conflicting normative values in the area; indeliberate cultural affrontage such as the violation of sacred sites and contravening of cultural norms and taboos; damage to sites of cultural and historical significance such as those of worship and religious use (mosques), burial sites and cemeteries, and areas of archaeological importance. 147. The Right of Way (RoW) is 60m wide, and there will be minimal land acquisition outside of the RoW. Resettlement will affect those encroaching and squatting within the 60m RoW. To minimize the impact on urban areas, resettlement will be restricted to 30m since these areas are settled by local population with land disputes that are not yet resolved. Three Resettlement Action Plans have been prepared, cleared by the Bank and disclosed (details Annex 1, Table 1.6); (i) Isiolo – Modogashe RAP with 689 affected persons; (ii) Modogashe-Wajir RAP with 844 affected persons; and (iii) Wajir – Kotulo-Elwak RAP with 1,355 affected persons. The total resettlement budget for the entire stretch of the road will be US$27 million. A Resettlement Policy Framework has been prepared, reviewed, and cleared by the Bank to guide the land acquisition process under Subcomponent B2 and Component C on provision of socio- economic infrastructure, wayleaves acquisition on the last mile connections for the fiber optic cable, and border posts. 148. A gender assessment demonstrated that the project area has a unique system of gender relations. Women’s positions are seen as subservient, marginalized and disempowered in the largely patriarchal society, and women and children are considered part of a man’s property. However, the clan system in the locality offers everyone, including women, access to much of the property of the others in the household and indeed within the clan. It is unlikely that anyone within the clan (and usually outside the clan) will be denied access to resources in time of genuine need. Both men and women have access to livestock as owners and/or as users. The women have traditional gender roles of performing domestic duties and are not involved in formal employment. 149. A gender assessment has also been undertaken along the project road and several concerns have been raised, many of which involve poor quality of public transport in the area. The long wait times for accessing transport in turn leads to delays in accessing medical facilities and other critical social services such as access to administration centers. The project will support socio-economic growth focusing on the needs of women, providing better economic opportunity and ease in management of their gender roles as caregivers as identified in the gender assessment report. 150. The communities living along the project who are considered as VMGs include the Borana, Somali, Turkana and Meru. The Borana, Somali and Turkana are nomadic pastoralists who move from one area to the next in search of pasture and water for their animals. Their settlement patterns are influenced by kinship that provide support to the family institution. The land in the three counties of Isiolo, 43 The World Bank Horn of Africa Gateway Development Project (P161305) Wajir and Mandera is under the customary rights, the community are yet to register the land as Community Land as per the requirement of the Community Land Act (2016). There exists frequent inter- ethic and intra-ethnic conflicts among these communities. Most of the people in these communities profess to the Muslim faith. 151. There are potential risks of sexual exploitation and abuse of minors due to an influx of labor in the project area. Most of the civil works will be carried out in Isiolo, Wajir and Mandera counties, areas which have been historically underserved and are characterized by high levels of poverty. KeNHA has experience in this area. The KeNHA and SDoI team, with support from the Bank, undertook an assessment of “Sexual Exploitation and Abuse by workers” (SEA) in Northwestern Kenya, associated with another Bank-funded Eastern Africa Regional Transport, Trade and Development Facilitation Project (EARTTDFP) in an equally underserved region. This was to determine the permissiveness of the environment for sexual exploitation and abuse and made recommendations to enhance prevention activities. Three civil society organizations (CSOs), will be engaged by KeNHA to manage the risks relating to GBV and SEA before the commencement of road works. 152. The Gender-Based Violence Assessment established that GBV is prevalent and normalized with the marriage institution in the project area. Discussions with women confirmed the nature of GBV, involving physical abuse, economic abuse, emotional abuse, Female Genital Mutilation (FGM) as well as early marriage. Sexual violence towards women and girls was reported in the form of defilement and rape. GBV cases are handled by the local alternative dispute resolution mechanism unless they have resulted in grievous harm or death, in this case they are reported to the police. The alternative dispute resolution mechanism is considered fast, with fines paid in form of livestock or money. This is compared to the criminal justice system, which is regarded as expensive and as taking too long to resolve issues. Reporting GBV cases is not common due to stigma on the issues. 153. The results of the GBV assessment in Northwestern Kenya confirmed that the GBV and SEA risks are highly complex and difficult to fully eliminate in projects. Several lessons have been learned from the implementation of the Uganda Transport Sector Development Project (P092837) and the recommendations of the Gender-Based Violence Task Force Report 19 have been largely adopted in the project design. The key risks and mitigation actions include: (a) stringent risk assessment upfront; (b) an elaborate grievance redressal system with multiple entry points for receiving complaints; (c) engagement of a Civil Society Organization with relevant experience and local presence in the project area to help and provide referral services to address grievance redress issues; (d) adopting a mandatory workers Code of Conduct with stringent compliance requirements. 154. The Cameroon Maroua-Mora and Mora-Dabanga-Kouserie Road Project under implementation in a region with similar characteristics as Northeastern Kenya offered additional lessons. A selected delegation comprising key Kenyan decision-makers and project staff as well as Bank task team under the auspices of South-South Cooperation, visited Cameroon to appreciate the design features the Government of Cameroon (GoC) incorporated in the project to address this change. In this case, a social 19Gupta, Geeta Rao; Sierra, Katherine. 2017. Working together to prevent sexual exploitation and abuse: recommendations for World Bank investment projects (English). Gender-based violence. Washington, D.C.: World Bank Group. http://documents.worldbank.org/curated/en/482251502095751999/Working-together-to-prevent-sexual-exploitation-and- abuse-recommendations-for-World-Bank-investment-projects 44 The World Bank Horn of Africa Gateway Development Project (P161305) assessment in profiling the social, economic, cultural practices and challenges for each community (clan, sub-clan, tribe, etc.) within the project area was carried out by a CSO. The outcome of this social assessment informed the design of the GRM and communication strategy for the project. The selected CSO was local, based and operating in the project area. The CSO engaged key staff from the region with a deep understanding the socio-economic and cultural practices of the host communities and handled social communication, GBV, GRM, community outreach and carried out a perception survey of the security forces in the project area. A deliberate effort was made to create awareness about the CSO’s assignment prior to request for expression of interests. 155. One of the subcomponents of HoAGDP proposes to initiate better access to social services by providing social infrastructure in the project area at selected locations. This implies that, for instance, livestock and livestock products could be commercialized as markets and market infrastructure improves. Both the National and County governments and Development agencies will encourage such processes, and pastoralists will be drawn further into a monetary economy. Such processes will affect men and women differently, as stakeholder engagement has shown that women tend to focus more of their time on household welfare and livestock’s contribution to nutrition, while men focus more on economic production and income generation. Safeguards Management Capacity at KeNHA 156. KeNHA has prior experience in implementing World Bank-financed projects, including the preparation of safeguard instruments and follow-up with the implementation of the mitigation measures. KeNHA has knowledge of the environmental and social safeguards requirements. There is an established Safeguards unit under the Directorate of Planning. However, as the portfolio of projects administered by KeNHA is increasing, the current staff at post are overwhelmed, thus, its safeguards management capacity needs strengthening. KeNHA will recruit additional staff that will include; an Environment Specialist, a Social Safeguards Specialist, a Health and Safety Specialist, a Gender and Gender-Based Violence Specialist and a Resettlement Specialist on a full-time basis to provide dedicated support for the HoAGDP and other World Bank-financed operations on or before March 31, 2021. Three civil society organizations will be contracted to manage community consultation processes, grievance redress mechanism, and gender-based violence. 157. In addition, the project will support long term capacity building for KeNHA through Technical Assistance to develop an Environmental, Social, Health and Safety (ESHS) Management System and implementation of its recommendations. As part of the ESHS enhancement for the contracts under the project, the Supervision Consultants will have full time Environmental expert and Social Safeguards expert, while the Contractors will be required to have full time Environmental expert, sociologist, community liaison officers, human resource officer and a Health and Safety advisor respectively. Social Assessment 158. The project area has the presence of pastoralist communities that meets the criteria in OP 4.10. A social assessment (SA) which was carried out in accordance to World Bank’s O.P 4.10, Free, Prior and Informed Consultations (FPIC) with VMGs, led to broad community support for the project. The SA analysed VMG’s social issues, established project impacts, and identified mitigation measures and FPIC 45 The World Bank Horn of Africa Gateway Development Project (P161305) that informed the design of the project. This SA will enable the project to be responsive to social development concerns, including seeking to enhance benefits for vulnerable and marginalized groups, while minimizing or mitigating risk and adverse impacts. It analysed distributional impacts of the intended project on VMGs and identified differences in assets and capabilities to access the project benefits. Impact identified on the VMGs included loss of livelihoods and grazing lands. 159. Isiolo, Wajir, and Mandera counties are inhabited predominantly by the Borana and Somali, marginalized and vulnerable groups found along the project corridor. The Borana, one of the VGMs identified by the SA, are the dominant ethnic group in Isiolo county and are frequently found in the following trading centers along the project corridor: Kachiuri, Kulamawe, and Modogashe. The Somali are found in all three counties but are the dominant ethnic group in Mandera and Wajir counties. In Wajir County, they are in the following trading centers: Habaswein, Laghbogol, Tarbaj, and Kotulo. These ethnic groups are part of Northern Kenya population classified as marginalized according to the Constitution of Kenya, which also categorizes the three counties as marginalized. 160. KeNHA will engage local Civil Society Organizations (CSOs) based on the above social safeguard challenges to assist in managing Gender-Based Violence (GBV); social communication, grievance redress system (GRM), community outreach, as well as to carry out a perception survey on security forces in the project. Empirical evidence has shown that local institutions with the understanding of social, economic, and cultural practices of the host communities should play a major role in the implementation of the project particularly in fragile environments. This helps in building acceptance of the project. A security assessment/audit should be carried out by experts and a security management plan developed and adopted before the commencement of works. Mitigation measures will be taken into consideration during the design and preparation of final designs and bidding documents. 161. Road safety issues are the major challenges with high death rates recorded on the Kenyan roads. Nearly 3,000 lives are lost annually.20 This project will support the efforts by NTSA in addressing these challenges by increasing awareness of road safety through information provision and building awareness. Paving of the corridor will encourage the entry of new public bus companies to provide additional services and introduce more comfortable vehicles as compared to the frequently used lorries ferrying travelers together with livestock as is the case now. 162. The road design standards and specifications applied under the project conform to the latest design practices in the country and compare well with international practice. This corridor was recently reclassified from a rural road corridor to an international road corridor before the designs were carried out. Most of the alignments are considered as green field development. In this regard, the designs were subjected to international road safety standards and incorporated road safety measures which included; the improvement of junctions, pedestrian facilities, crash barriers, speed calming measures, street lighting, signs and markings, improvement of geometrics of the road alignment, truck laybys, climbing lanes, over-taking sections. 163. Given the limitation of Bank’s Road Safety Screening and Analysis Tool (RSSAT) in application for a greenfield alignment which is the case for the projected road segments, alternate road safety 20 National Transport and Safety Authority, Annual report, 2017 46 The World Bank Horn of Africa Gateway Development Project (P161305) assessment methods have been applied in the project which include as pilot for this corridor: design stage audit, construction stage audit and post construction stage audit. Any downstream design changes or safety improvements through retrofit would be analyzed and informed through the application of RSSAT during the implementation phase. Other planned road safety activities that will help enhance the safety of the corridor include: (a) formulation of Road Safety Audit Policy; (b) establishment of a Road Safety Auditors’ curriculum and accreditation program; (c) development of a Road Safety Audit Manual and accident investigation guidelines; (d) organization of road safety audits trainings for key stakeholders; (e) review and evaluation of road designs as per the Road Safety Audit Manual 164. In managing potential and social risks and impacts arising from the project’s investments, Bank Operational Policy (OP/BP) 4.12 is triggered. Accordingly, the Borrower has prepared a Resettlement Policy Framework (RPF), which as disclosed on the Bank’s website on November 29, 2019. A Social Impact Assessment (SIA) of the project area (disclosed on the Bank’s website on November 28, 2019). The SIA identified social context of the project area and potential social risks and consequences and corresponding mitigation measures put in place. The findings of the SIA have been incorporated in the design of this Project. (iii) Grievance Redress Mechanisms and Citizens Engagement 165. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. 166. Citizen Engagement. The Project explicitly seeks to support the engagement of local communities in Isiolo, Wajir, Mandera and Meru Counties, including women, youth, persons living with disability and VMGs, who derive livelihoods from the project area. These communities are targeted to benefit from the social-economic infrastructure to be constructed in the project area. Engagement of target beneficiaries aligns with and supports the Project’s approach to demand-side social accountability. Meaningful consultations will be carried out through the selected CSOs. Through these consultations, the approach to manage project negative impacts, security management plan, and prioritization of the social-economic infrastructure, will be discussed. 167. Feedback mechanisms will be developed to ensure transparency, accountability, and learning as well as a continuous dialogue with target beneficiaries and other stakeholders. During implementation, there will be a focus on improving the capacity of county and national structures to close the feedback loop and report on action taken to address concerns and issues. The specific elements of the 47 The World Bank Horn of Africa Gateway Development Project (P161305) framework for citizen engagement include: (i) support to the engagement of local communities using local community based civil society organizations; (ii) support to community engagement in determining local priorities for the local infrastructure projects under Component C; (iii) support to a feedback mechanism from local communities, county government and national government; (iv) support to build the capacity at county and national levels in engagement with local communities to address concerns, issues and grievances raised; and (v) specific third-party monitoring by local communities to ensure transparency and feedback on these activities—this includes quality of construction works of the social infrastructure, concerns on the behavior of security forces etc., a sample-based process survey administered by a third party and an engagement forum with the project communities. Through focused discussions on the results of the survey, a feedback loop will be created. The protocol and mechanisms for elements of this citizen engagement framework is detailed in the PIM. The quality of its implementation and progress will be monitored by FCDC and the three selected civil society organizations both at county and national levels through supervision and dialogue. 168. A communications strategy will be prepared and implemented throughout the Project life. A project-specific Grievance Redress Mechanism supports traditional/cultural governance structures and local communities, beneficiaries, and other stakeholders will be informed on the procedures, documenting of grievances, a timeline for response, etc. Bi-annual project progress reports submitted to the Bank will be required to report on the implementation of the GRM and citizen engagement. D. Climate and Disaster Risk Screening 169. The screening assessment has been carried out on exposure to climate and geophysical hazards, and the potential risks identified. The assessment of the proposed physical components of the project, particularly corridor improvements, will need to consider more variable precipitation conditions, and the potential for higher risk of flooding, flash flooding, and soil destabilization as a result. Surface flooding has been identified as a high risk on the physical components of the project, and appropriate designs and standards used for these physical components, including the use of green infrastructure methods, will be incorporated. 170. A vulnerability assessment on the project corridor from a climate-resilient perspective was carried out with financing from the GFDRR. The assessment method included a desktop study, interviews with the road maintenance team of KeNHA, and a site visit. The analysis noted the following main hazards along the project roads: (a) flooding; (b) washouts; (c) scour; (d) erosion; and (e) siltation/settlement of debris. The assessment revealed that an increase in precipitation will severely impact portions of the project roads that are situated in flood-prone areas. The highest priority for interventions and adaptation measures should be given to these road sections. The sections of the project roads that run through the Lorian swamp near Habaswein are at most risk of flooding and erosion-caused damages, which should be prioritized for erosion control measures. 171. Considering this, the designs of project roads have been reviewed from a climate-resilience viewpoint and examined how additional extreme events and rising temperatures may impact the project. As a result, the following priority interventions have been incorporated in the designs of the road sections under the project: (a) building climate resilience and adaptive capacity; (b) minimize cost increases and time for redesign or enhancement of design: (a) increase Bank protection for wide 48 The World Bank Horn of Africa Gateway Development Project (P161305) floodplains; (b) bank protection at bridges; (c) road overtopping protection; (d) reduce sedimentation rates from sand; (e) decrease roadside erosion; (f) strengthen Lorian Swamp embankments; (g) Maintenance Depots and Emergency Response Plans; and (h) data collection. 172. These interventions adapted for the project road sections (under Components A and D) will support the improvement of road maintenance and management to reduce risks associated with potential climate and geophysical hazards. Component D also includes training on mainstreaming climate-resilient in designs of the road network. Climate change forecasts based on 29 Global Climate Models and four Representative Concentration Pathways for Kenya and the present historical rainfall in Wajir show that both 24-hour precipitation and temperatures between 2015 and 2090 will slightly increase. The median projections for 24-hour rainfall identifies an expected increase of 3 percent and 6 percent for time periods between 2015 and 2050 and 2090. With an increase in precipitation, more frequent and extensive flooding has been identified as a risk at many locations along the project roads, causing extreme flooding in the future. Climate change forecasts show relatively small increases in extreme events for the project corridor. It is expected that areas prone to flooding now will continue to be prone to flooding in the future. Climate change may harm the capacity for some of the larger drainage structures, whose lifespans will reach into 2050 and beyond, including many of the box culverts and bridges. The project supports the establishment of a RAMS which will help in monitoring in case of any adverse impact on these assets. E. Security Audit and Management Plan 173. A Security assessment and the corresponding security management plan has been prepared by an inter-agency security team with a deep understanding of the situation on the ground. GoK established a National Multi Agency Security Committee (NMASC) on May 24, 2019 to carry out a security assessment/audit and prepare a corresponding security management plan. To ensure the security assessment was undertaken effectively with inputs from the grassroots and subsequent execution of the corresponding management plan, the NMASC established County Multi-Agency Security Committees (CMASC) at the county level. The NMACs will steer the implementation of the security aspects of the project while the CMASC will be empowered to make day-to-day decisions in managing security matters. The security risk assessment report and management plan were reviewed by the Bank. The plan included recommendations to (a) carry out a survey in the project area on the perception of the population of security forces in rendering services in the region prior to the commencement of the road works; (b) train workers on-site on basic security elements, response to and reporting incidents; and (c) train workers and security teams on Human Rights (HR) and International Humanitarian Rights (IHR). These aspects have been adopted and will be financed under the project as well as inform the design of some facilities such as camps, security posts and the site locations. 174. The bidding documents include provisions and bill items related to the facilitation of security aspects to ensure the protection of workers, equipment, and structures during the implementation of the project. A budget has been allocated for implementation of the plan including allowances for training. 175. Thus, the assessment and evaluation of potential security risks helped in determining the level and types of security arrangements required to be put in place. An assessment of the level of risk for employees, local communities, and security personnel themselves along the road corridor was 49 The World Bank Horn of Africa Gateway Development Project (P161305) determined and rated as either low, medium or high. The outcome of this assessment has informed the decision on whether to use private security or armed forces as well as the location and designs of camps; and decisions regarding the type, number, responsibilities of security forces. The Borrower has incorporated the World Bank Good Practice Note for Assessing and Managing the Risks and Impacts of the use of Security Personnel of 2018 in the prepartion of SMP. 176. The National Police Service (NPS) will take the lead in the provision of security along the project corridor. The multi-agency approach will be applied throughout the execution of the project. However, the contractor shall hire private security guards pursuant to the provisions of the contract. Specific Standard Operating Procedures (SOP) have been developed and provide clear guidelines regarding (a) security chain of command; (b) work and campsites access controls; (c) safety of constructions and worksites; (c) safety and security of contractors and workmen; (d) vehicle access to construction and worksites; (e) emergency response and incident reporting; and (f) general security supervision and control. V. KEY RISKS 177. The overall implementation risk is rated as High reflecting the fragile nature of the region. As identified in the SORT Matrix (refer data sheet), the risks are directly related to the fragile environment of the project area, COVID-19 pandemic, implementation capacity, coordinating multiple implementing agencies and beneficiary entities, among others. The main risks include: (a) intensive coordination and goodwill required for coordinating multiple implementing and beneficiary entities as well as national and county government institutions; (b) managing environmental, social and security risks in the fragile project area; (c) challenges posed by the COVID-19 pandemic to the economy and the project considering the uncertainty to its end; and (d) secure financing plan for upgrading the entire 740km Isiolo-Mandera road corridor. An explanation of each of the risks identified and the corresponding mitigation measure(s) is presented in Table 8. Table 8. Systematic Operations Risk Rating (SORT) Risk Category Rating Risk Mitigation 1. Political and Governance: Some of the Substantial HoAGDP provides a platform to engage. Meanwhile, countries suffer from protracted conflict Kenya has played the role of an ‘honest broker’ for its and political strife arising from challenges neighbors, in assisting bring peace in the region helping of underdevelopment, resource scarcity, to mediate conflict, abating the severity of the insecurity and economic shocks from global challenges in the region and its economy. economic crises and climate challenge. 50 The World Bank Horn of Africa Gateway Development Project (P161305) Risk Category Rating Risk Mitigation 2. Macroeconomic: The countries of the Substantial The WBG is responding to the COVID-19 pandemic by HoA are facing a triple crisis. COVID-19 retrofitting many of its operations. In Kenya, the pandemic, the resulting economic crisis, program is being adjusted in line with the selective WBG and food insecurity due to droughts and crisis response and the authorities are considering the locusts. There is an extraordinary supply Debt Service Suspension Initiative and discussions with and demand shock leading to a sharp relevant bilateral creditors are underway. overall decline in economic activity. Border controls imposed to hinder the Actions taken by World Bank include: spread of the virus are disrupting supply (a) providing resources immediately by: (i) triggering chains and the movement of basic CERC in projects; (ii) approving a new COVID-19 commodities and the region is poised to Emergency Response Project (P173820); and (iii) re- face its first recession in 25 years. GDP allocating funds among various categories in growth has been revised sharply projects. Also, a locust response facility was downward. Poverty will rise and decades approved for Kenya by the World Bank as well as of economic progress is threatened. additional resources support the budget deficit through a Development Operations Facility. In Kenya, the crisis has led to a widening (b) restructuring of projects with uncommitted funds to of the fiscal gap by at least an additional expand programs for rural community and farm 1.7 percent of GDP and of the external producer organizations to maintain food security financing gap by about 1.4 percent of GDP and minimize value chain disruptions; and in 2019/20. The tourism and hospitality (c) developing new interventions to build resilience. sector—comprising some 1.4 million jobs and 8.8 percent of the country’s GDP—has IFC will support capital market interventions, local collapsed. An estimated 50 percent of the medical suppliers, manufacturing, agribusiness, energy, Kenyan workforce is either laid off or transport and telecoms. locked out from their jobs. 3. Institutional Capacity for Substantial The rather complex structure reflects the division of implementation and Sustainability: The institutional responsibilities within the transport and ICT risks involved include: sectors in Kenya and fits the local institutional (a) multiple components, implementing responsibilities. Building on the experience of previous agencies and several beneficiary and ongoing projects, the HoAGDP will be coordinated entities. by the Project Management Office within the SDoI and a (b) Managing the evolving institutional Project Oversight Committee has been established to changes involving setting up of new provide the platform for cross-agency coordination and institutions by transforming the resolve emerging project execution issues and Mechanical and Transport Division bottlenecks of a policy nature. This arrangement has (MTD) and Material Testing and worked successfully for transport operations in Kenya. Research Division (MTRD) into semi- autonomous government agencies Regional Oversight Arrangements have been designed. and simultaneously building their The three countries will establish a Joint Inter- capacities and implementing their Ministerial Coordination Committee (JIMCC) by activities may slow down the pace of December 31, 2021 comprising the Ministries implementation. responsible for transport and roads. The JIMCC will have (c) Upgraded road sections will not an oversight responsibility and will be responsible for receive adequate maintenance. overall regional co-ordination. JIMCC will engage with the Inter-Governmental Agency for Development (IGAD) on trade facilitation matters and inter-country coordination. 51 The World Bank Horn of Africa Gateway Development Project (P161305) Risk Category Rating Risk Mitigation Any inadequate capacity risks will be mitigated by engaging technical experts financed under the project to complement the existing capacity in addition to the support by internationally recruited experienced consultants supervising the construction of works and supply ad installation contracts. Regarding sustainability, previous reforms executed in the sector have enabled the creation of implementation capacity in institutions such as KeNHA and the establishment of the regulatory framework such as NCA, KMA, EBK and NTSA. KRB will provide funds for maintenance under long term performance-based road maintenance contracting arrangements for the road sections that will be upgraded. Funds have been allocated under the project to support the implementation of the transformation of MTD and Materials Division into semiautonomous government agencies to deepen sustainability of the sector. 4. Fiduciary: The World Bank has Substantial The responsibilities of each party in the financial conducted a fiduciary capacity review of management and procurement processes will be the implementing entities and agreed on detailed in the Project Implementation Manual (PIM). mitigation measures for identified risks. Financial Management An FM assessment concluded that KeNHA, The World Bank will continue to provide capacity ICTA, KRA, NTSA, SDoI and SDoT have building training to ICTA and SDoI to further strengthen adequate capacity and experience to financial reporting. effectively implement the proposed project though clear accountability GoK has agreed to exempt the project from VAT. This arrangements with respect to beneficiary exemption will reduce counterpart funding contribution entities should be made clear. of US$146 million by 81 percent (US$119 million) to US$27 million and thus reduce the GoK’s financial A principal challenge for on-going World burden and mitigate against extension of time and cost Bank funded projects in the sector is overruns. inadequate budgetary allocation for counterpart funding leading to Procurement unnecessary extension of time and cost The mitigation measures for the identified risks include overruns implementing agencies to enhance their capacities through technical assistance supported under the A procurement risk assessment identified project in: the following main risks: (a) restructuring and mainstreaming of engineering (a) inadequate procurement capacity and procurement; deficiency in mainstreaming (b) preparing an engineering procurement and procurement, leading to protracted contracts management manual and user’s guide; delays in concluding the contracting (c) designing an innovative online (software) based process; contracts implementation monitoring system; 52 The World Bank Horn of Africa Gateway Development Project (P161305) Risk Category Rating Risk Mitigation (b) implementing agencies’ procurement (d) carrying out contracts’ quality review at critical decisions being interfered with by stages of execution of high value contracts; and other national public procurement or (e) undertaking a National Procurement System accountability bodies who are not Performance Assessment using MAPS II tool with a aware of the provisions of the supplementary, in-depth procurement performance financing agreement, leading to analysis for future Alternative Procurement processes being stalled for long Arrangement (APA) candidate entity system for periods before agreement is reached; KeNHA. (c) weak contract management leading to time and cost overruns; and (d) inadequate budget for counterpart funding leading to delay in making payments by the client to contractors and consultants that affects contractors’ cashflow and negatively affects project overall performance. 5. Environmental and social: Given that High The safeguard instruments (ESIAs, RAPs, RFP, ESMF, and construction will take place in fragile areas Social Assessment) have been prepared, reviewed by the the implementation of environmental and Bank and disclosed. social safeguards will require proper mitigation plans for: Mitigation measures include: (a) influx of workers and newcomers (a) project affected persons will be compensated before moving into the area in search of the commencement of works; business opportunities; (b) local civil society organizations with relevant (b) potential GBV and SEA cases; experience and knowledge of the project area will (c) overstretching the community health be engaged to manage any GBV risks, address the facilities and safety; potential SEA of minors due to labor influx, conduct (d) social changes within the community’s community consultations and the grievance redress close-knit family and community mechanism; structures associated with (c) social infrastructure and services will be provided to modernization; the VMGs at selected locations. (e) unrealistic expectations of the community from the project due to The bidding documents will define the requirements for poor stakeholder engagement and GBV issues, including the development of a Code of lack of a grievance redress mechanism Conduct (CoC), and trainings for workers and that addresses community concerns; subcontractors on the contents of said CoC. The TORs of and the supervision consultant also include specific (f) temporary economic loss to requirements to monitor and ensure that the mitigation businesses that will be displaced, as and response measures are in place. Implementing some of the parts of the corridor that agencies will have a GBV specialist in place prior to the traverse urban settings could impede commencement of civil works to support site handover and construction implementation. schedules, thereby delaying project benefits. Although the Borrower has experience in implementing World Bank funded projects, KeNHA will leverage The Borrower has inadequate capacity in project financing to recruit five staff (an environmental implementing environmental and social specialist, a health and safety specialist, a social aspects of the project. specialist, a gender-based violence /gender specialist and a resettlement specialist) on a full-time basis to 53 The World Bank Horn of Africa Gateway Development Project (P161305) Risk Category Rating Risk Mitigation Some road sections are considered enhance its capacity in managing safeguard aspects. The associated facilities to the project and World Bank will continue to provide the required their construction will be carried out support and capacity strengthening during project contemporaneously implementation. KeNHA has appointed a team leader to coordinate and oversee the execution of road works for the entire road corridor irrespective of the financier. 6. Stakeholders: The regional road Substantial The project enjoys overwhelming support from the corridor traverses an isolated and governments and the people of the participating underdeveloped part of Kenya that is counties. The participating counties have signed an MoU fragile, inhabited by disadvantaged with KeNHA allowing free movement of construction communities manifesting comparatively materials within and across counties. Through the high levels of poverty. Thus, improving auspices of FCDC community outreach will be carried connectivity, supporting livelihoods, and out to maintain the support of the project during the building resilience will contribute towards implementation phase. creating a sense of belonging, inclusion, sharing of benefits, and greater peace and To mitigate these and other similar risks, the Project has security and therefore the expectation of had extensive and meaningful stakeholder consultations the beneficiary communities is very high. during the preparation stage, and during the preparation of the environmental and social safeguards reports. The Opposition from stakeholders could have project will ensure that the local communities are a negative impact on the achievement of involved in the selection of project social infrastructure the PDO. Poor management of the investments and that project consultations also target environmental and social risks, delay in women, youth, persons living with disability and VMGs. compensation of project affected persons, and lack of involvement of the local The Project will continue to: community in the selection of the social (a) closely engage with relevant stakeholders, including infrastructure to be constructed under the local communities and VMGs 21 in communication’s Component C could lead to public unrest activities to ensure high levels of stakeholder and work stoppage by the local awareness; communities. (b) seek and incorporate citizen feedback throughout project implementation (stakeholder Other financiers are expected to provide engagement/citizen engagement strategy and financing for upgrading 374km of the communication strategy will be implemented); 740km of the Isiolo-Mandera road (c) adopt a strong participatory approach to the social corridor in adequate amounts and a timely infrastructure projects to ensure that all manner. management measures are discussed and adopted by consensus; and (d) ensure that a robust, cultural appropriate grievance 21The VMG communities in the project area are defined under Article 260 of the Constitution of Kenya (2012) as “marginalized and minorities” communities. Such a community is defined as: (a) a community that, because of its relatively small population or for any other reason, has been unable to fully participate in the integrated social and economic life of Kenya as a whole; (b) a traditional community that, out of a need or desire to preserve its unique culture and identity from assimilation, has remained outside the integrated social and economic life of Kenya as a whole; (c) an indigenous community that has retained and maintained a traditional lifestyle and livelihood based on a hunter or gatherer economy; or (d) pastoral persons and communities, whether they are- (i) nomadic; or (ii) a settled community that, because of its relative geographic isolation, has experienced only marginal participation in the integrated social and economic life of Kenya as a whole. 54 The World Bank Horn of Africa Gateway Development Project (P161305) Risk Category Rating Risk Mitigation redress mechanism is accessible to all stakeholders especially the local communities and VMGs. At the national and regional levels, HoAGDP is a top priority of the GoK as well as the HoA Initiative. Due to its importance, GoK has agreed to exempt HoAGDP from paying VAT to ensure the project is adequately funded. Some of the financiers have signed financing agreements and others have scheduled appraisal in early 2021. A coordination mechanism has been established for sharing information on the upgrading works and ensure the same design standards apply. 7. Other - Security: Regional security risks High GoK has established a National Multi Agency Security raise the threat of armed conflict. Groups Committee (NMASC) that carried out a security operating in countries neighboring Kenya, assessment/audit and prepared a corresponding security such as Somalia, pose a challenge and management plan. To ensure the security assessment could potentially divert the attention and was undertaken effectively with inputs from the resources of the Government to grassroots and subsequent execution of the addressing the needs of people fleeing corresponding management plan, the NMASC has conflict the incursions of armed groups established County Multi-Agency Security Committees crossing the border into Kenya. In the (CMASC) at the county level. The NMASC will steer the event this happens, it could slow down implementation of the security aspects of the project decision making and the pace of while the CMASC will be empowered to make day-to-day implementation of the project. decisions in managing security matters. The assessment determined the level of risk for employees, local communities, and security personnel themselves along the road corridor. The outcome of this assessment has informed the decision on whether to use private security or armed forces as well as the location and designs of camps; and decisions regarding the type, number, responsibilities of security forces. The bidding documents include provisions and bill items related to the facilitation of security aspects to ensure the protection of workers, equipment, and structures during the implementation of the project. A budget has been allocated for implementation of the plan including allowances for training. The equipment and training financed by the project with respect to the SMP is directly related to implementation of HoAGDP and does not include weapons, lethal equipment or any other police or military equipment of such nature or support for activities not related to implementation of HoAGDP 22. 22WorldBank (2012b) Staff Guidance Note: World Bank Support for Criminal Justice Activities, A note prepared by the Justice Reform Unit of the Legal Vice Presidency. 55 The World Bank Horn of Africa Gateway Development Project (P161305) Risk Category Rating Risk Mitigation A security premium will be included in bidding documents. A provisional sum will be included in each bid as a security premium to present a level field for all bidders in addressing this subject, in addition to specific Bill of Quantity items related to security measures for each road contract. Project Risks Identification, Mitigation and Management Framework 178. As mentioned elsewhere, the project area is historically underserved and characterized by high levels of poverty. The social risk assessment for the project is high. The project area is home to VMGs who meet the criteria of OP 4.10 in terms of language, culture, attachment to given lands, being subordinate to the more dominant communities among whom they live, as well as other Vulnerable Groups. 179. GoK has developed a framework for managing social risks incorporating lessons learned from international best practices and countries that have practical experience in dealing with such challenges in similar environments. Thus, GoK contacted the Government of Cameroon (GoC) under the auspices of South-South cooperation and organized a learning and knowledge sharing visit in May 2019. The Kenyan delegation comprised inter-ministerial senior staff from the State Department of Infrastructure; State Department of Interior; State Department of Defense and KeNHA, and representatives from the beneficiary counties. The Kenyan delegation was joined by the World Bank technical team, including a security specialist. The objective of the learning mission for Kenyan decision makers and Bank task team was to appreciate the design features the GoC has adopted for transport projects, the Maroua-Mora (P143801) and Mora-Dabanga-Kouserie Road (P079736) Project, under implementation in a fragile region with similar characteristics as Northeastern Kenya. 180. Based on the findings from this first exchange, the GoK found it important for its technical project staff to visit Cameroon as well. In August 2019, a technical team from KeNHA which was joined by the World Bank environmental, social development and communications specialists visited Cameroon. The visit outcome helped in refining the design of management of social risks under HoAGDP. Furthermore, through this South-South collaboration, the GoK facilitated a successful visit in August 2019 of the Coordinator of the Non-Governmental Organisation working with the GoC on the World Bank- financed Project to participate in some of the sensitisation engagements for civil society organisations (NGOs, CSOs, FBOs) and multi-agency security teams as part of Project preparation. During this visit, the Coordinator visited Wajir County where one of the sensitisation workshops was conducted. 181. The framework was also enriched by incorporating lessons learned from various sources, including: (a) the World Bank Good Practice Note Addressing Gender Based Violence in Investment Project Financing involving Major Civil Works (September 2018); (b) knowledge sharing tour to Cameroon through South-South knowledge exchange; (c) international based practice; and (d) the on-going Bank financed Eastern Africa Regional Transport, Trade and Development Facilitation Project (EARTTDFP) (P148853) in Northwestern Kenya with similar characteristics as the project area. Accordingly, and elaborating on some 56 The World Bank Horn of Africa Gateway Development Project (P161305) of the measures identified in Table 8 above, the principles derived in guiding the management of the potential project risks are summarized as follows: (a) Engage CSOs to address potential risk of SEA of minors due to an influx of labor in the project area. Based on the lessons learned, GoK will engage three local CSOs from Isiolo, Wajir and Mandera Counties, with proven experience and qualifications, as well as local presence, knowledge of the culture, socio-economic realities and way of life of the people in the project area. These CSOs will be responsible for handling: (i) GBV cases that could be derived from the project, including SEA and sexual harassment (SH) in the workplace; (ii) the grievance redress mechanism, including various entry points for survivors to place complaints confidentially and through which they can be referred to appropriate service providers who will map out GBV prevention and response actors in project adjoining communities; and (iii) local communities and VMGs engagement and outreach activities. It should be noted that KeNHA terminated the procurement process for selecting one CSO to handle GBV related cases for the project, which was advanced after the visit to Cameroon, appreciating the limitation of the ToR initially used. This gave KeNHA an opportunity to update the ToRs and re-launch the procurement process. Specifically, the CSOs 23 will: (i) undertake a GBV assessment to determine the permissiveness of the environment and put in place prevention, mitigation and response measures, including GBV cases reporting and accountability protocols as well as referral services within six months after the contract signing; (ii) conduct a perception survey to determine the opinions the host communities may have with regard to the role the security forces in securing the project area and also its involvement in the development agenda of the region, the outcome of which will inform any mitigation measures required upfront in involving security forces in project activities; and (iii) conduct capacity building of KeNHA, government agencies and local non-governmental organizations. (b) Manage the security risk. A security risk assessment of the project area has been undertaken by high ranking security officials operating in the project area with support from headquarters in Nairobi and the corresponding security management plan developed. Top security officials were in the Kenyan delegation to Cameroon. After the visit, GoK established a Multi-agency security team which was instructed to: (i) prepare the terms of reference on carrying out a security audit and preparing the associated security management plan; (ii) design modalities and carry out a security audit of the project area; (iii) based on the results of the audit prepare a security management plan. These tasks were accomplished and a security audit report as well as a security management plan for the project have been prepared and reviewed by the World Bank. Lessons learned on other similar Bank financed projects such as the Maroua- Mora and Mora – Dabanga-Kouserie Road Project in Cameroon have been incorporated in the design particularly involving the local community and security agencies in the development and implementation of the plan. Thus, with the “right” composition of the Kenyan delegation visiting Cameroon, useful insights were adopted for the Kenyan context. A comprehensive 23 After the knowledge sharing tour to Cameroon through South-South knowledge exchange, the original ToR for managing GBV related issues in the project by local Civil Society Organizations have been revised by increasing the scope of the tasks to be handled to reflect the realities on the project area. The procurement process for selection of a GBV service provider was at Request for Proposals stage but was terminated and restarted with enhanced ToR incorporating lessons learned in similar Bank financed projects. 57 The World Bank Horn of Africa Gateway Development Project (P161305) plan has been prepared in collaboration with the security apparatus and most of the recommendations for building the security infrastructure internalized in the contract document for the road construction. The security arrangements will continue even after the road is constructed as per the plan of the government. (c) Assess climate vulnerability. The GoK carried out a climate vulnerability assessment for the entire Isiolo-Mandera road corridor, with financing from the Global Facility for Disaster Risk Reduction (GFDRR). The recommendations thereof were integrated into the detailed design of the selected roads to enhance the resilience of the network, and to inform the detailed engineering designs for the road contracts. This will contribute to improving management as well as reducing risks associated with potential climate and geophysical hazards. As a result of this study, KeNHA’s management has decided to mainstream climate vulnerability assessments for all their road works. See Annex 4 for more information on the project’s contribution to climate resilience. (d) Address possible shortage of construction materials. Possible shortage of quality construction materials was identified as a major challenge and has been mitigated. The Materials Investigation Report for each road sub-section as prepared by Consultants includes identification and utilization of possible sources of water and this report is made available to every bidder as part of the information documents. (e) Ensure the sustainability of the proposed investments. GoK has identified further reforms to be implemented under the project as well as the needed institutional capacity enhancements. A Centre for Land Acquisition and Resettlement Studies (CELARS) has been established at the University of Nairobi with support under the project. This is to ensure that the country has capacity to train personnel in handling social related cases in projects in a sustainable manner. The University of Nairobi was identified to offer such courses and training on management of social safeguard aspects in projects including GBV and land acquisition and resettlement and management of social risks. A curriculum has been developed and training of trainers carried out in China and India where such centers have been established. (f) Ensure future maintenance of investments. In addition, through financing from the Road Maintenance Fund, the road sections to be upgraded will be put under long term performance-based road maintenance contracting to protect the investment. ICTA with the support of the Bank plans to develop a business model on the utilization of the fiber optic cable to ensure its usage and maintenance once installed. In case of the social infrastructure, support will be provided to KeNHA under the project in developing and signing a Memorandum of Understanding with the County governments not only on the transfer of the asset once developed but also assist in the development of their management arrangements once in place. (g) Contribute to gender equality. Kenya has achieved relevant institutional progress toward gender equality. However, there are still employment gaps in the transport/infrastructure sectors. The project will support the development of a Gender Action Plan (GAP) considering 58 The World Bank Horn of Africa Gateway Development Project (P161305) the findings of several studies on this subject matter on the barriers that women face for their recruitment, retention, and promotion. For instance, a World Bank study financed by the Mobility and Logistics Multi-Donor Trust Fund showcased that Kenya has an institutional framework to facilitate women’s employment in the transport and infrastructure sectors. There is a legal requirement for women, youth and persons with disabilities to access 30 percent of government procurement opportunities. The Employment Act 2007 prohibits sex discrimination by employers. In Kenya, there is a statutory obligation for the transport sector to mainstream gender. And yet, despite such institutional progress, employment segregation still exists in Kenya. According to data in 2018 from the International Labor Organization, women only represent 7.2 percent and 1.5 percent of the people employed in the transport/communications and construction sectors, respectively. In Kenya, 36 percent of civil servants – and 28 percent of decision-making civil servants – are women. KeNHA has 28 percent female staff across the whole organization and 36 percent mid-level managers 24. Of the 14,320 registered graduate engineers at the Engineers Board of Kenya, only 1,519 (a little over 10 percent) are female. Based on the said study, occupational sex segregation in transport public sector employment is due to a variety of barriers such as gender biases and stereotypes; lack of mentors; sexual harassment in the workplace; issues related to work- family balance; low up-take of gender policies in the workplace to guide gender inequalities in staffing and Human Resources Management; and cultural and social expectation on women’s professional careers that lead to lower numbers of women graduates and technicians that could be employed in the transport/infrastructure sectors. 182. To improve access to social services for the local vulnerable and marginalized communities, the project will provide social infrastructure and services at selected locations in the project area. To determine priority social infrastructure investments, a needs assessment of infrastructure and services will be carried out. This will be achieved through meaningful consultations with, women, vulnerable groups and Vulnerable and Marginalized Groups (VMGs) in the project area, among others. The selected priority activities will further be subjected to a validation process with all the stakeholders. This process will target women, VMGs, and vulnerable members of the local communities. 183. Providing roadside facilities for enhanced delivery of social services will help integrate the different VMGs and pastoralist communities along parts of the corridor. KeNHA will prepare the design of roadside social infrastructure to complement other NEDI initiatives such as supply of water, energy and development of the agriculture industry in a coordinated manner to ensure that significant benefits of the investments are realized. Thus, community outreach spearheaded by the Frontier Counties Development Council (FCDC) through sensitization and consultations with the beneficiary communities will promote the reaching of consensus on these complementary facilities to avoid duplication. FCDC will also mobilize the local communities and VMGs to form committees whose role will be participatory monitoring during the . construction period for the social infrastructure. 24 Forthcoming employment situation study in urban transport sector 59 The World Bank Horn of Africa Gateway Development Project (P161305) VI. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Eastern Africa HORN OF AFRICA GATEWAY DEVELOPMENT PROJECT Project Development Objectives(s) To improve: (a) the movement of people and goods and digital connectivity and access to social services to communities at designated locations along the targeted sections of the Isiolo-Mandera Regional Road Corridor; and (b) the capacity of selected transport related institutions in Kenya. Project Development Objective Indicators RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline End Target To improve the movement of people and goods Average Travel time between Isiolo to Modogashe; and Wajir to 48.00 24.00 Elwak, disaggregated by passengers and freight (Hours) Public passenger bus (Hours) 36.00 18.00 Heavy commercial truck (Hours) 48.00 24.00 Average Travel time between Isiolo to Modogashe disaggregated 24.00 12.00 by passengers and freight (Hours) Public passenger bus (Hours) 18.00 9.00 Heavy commercial truck for freight (Hours) 24.00 12.00 Average Travel time between Wajir to Elwak disaggregated by 24.00 12.00 passengers and freight (Hours) Public passenger bus (Hours) 18.00 9.00 Heavy commercial truck for freight (Hours) 24.00 12.00 60 The World Bank Horn of Africa Gateway Development Project (P161305) RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline End Target Number of public transport service providers along Isiolo- 3.00 10.00 Modogashe and Wajir-Elwak (Number) Number of public transport service providers along Isiolo- 3.00 10.00 Modogashe (Number) Number of public transport service providers along Wajir- 3.00 10.00 Elwak (Number) Number of road crash fatalities between Isiolo-Mandera road 30.00 20.00 section (per 1,000 vehicles) (Number) Average processing time at border crossing for freight trucks and Average processing time at new boarder posts at Rhamu No Border posts at Rhamu and Mandera exist currently passenger vehicles (Text) and Mandera is 8 hours To improve digital connectivity along the Isiolo-Mandera Regional Road Corridor Number of online public services used by communities along the 0.00 10.00 corridor per month (Number) To improve access to social services to communities at designated locations along IsioloMandera road Number of women and children utilizing the improved social 0.00 1,000.00 services (Social/Gender disaggregated) (Number) To improve the capacity of selected transport related institutions in Kenya Road Management Information System utilized for decision No Yes making and setting performance targets (Yes/No) Number of non-Kenyans trained in new skills in Kenyan 0.00 10.00 institutions (Number) PDO Table SPACE 61 The World Bank Horn of Africa Gateway Development Project (P161305) Intermediate Results Indicators by Components RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline End Target Improving Movement of People, Goods, and Digital Connectivity Roads constructed (CRI, Kilometers) 0.00 395.00 Roads constructed - rural (CRI, Kilometers) 0.00 365.00 Roads constructed - non-rural (CRI, Kilometers) 0.00 30.00 Number of schools, hospitals and other strategic public facilities such as pastoralist roadside markets, rest stops and community 0.00 30.00 and service centers along Isiolo-Mandera road with internet connection (Number) Application of climate resilience practices in road management No Yes (Yes/No) Facilitation of Regional Trade and Transport Adoption of ICT based border management systems (Yes/No) No Yes Use of ICT for revenue collection and for facilitating clearance and release of goods (Yes/No) No Yes Development of one-stop border posts (OSBP) at Rhamu and Mandera (Yes/No) No Yes Improving Access to Selected Basic Social Services at Designated Locations along Isiolo-Mandera Road Number of social infrastructure and service provided (Number) 0.00 30.00 Institutional Strengthening of Selected Transport and Related Institutions Integrated smart road system developed and utilized (Yes/No) No Yes Female persons recruited at medium-high level skilled positions 0.00 10.00 in concerned institutions under the project (Percentage) Gender Action Plan developed and implemented in the concerned road/transport agencies under the project (Yes/No) No Yes Grievances responded to and /or resolved within the stipulated 0.00 90.00 standards (Percentage) 62 The World Bank Horn of Africa Gateway Development Project (P161305) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline End Target Female graduates recruited in a paid six months internship program in the IAs supported by the project (Percentage) 0.00 30.00 (Percentage) Citizen Engagement, Share of target beneficiaries with rating 0.00 60.00 ‘Satisfied’ or above on project interventions (Percentage) IO Table SPACE UL Table SPACE Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Average Travel time Annual travel time between Isiolo to Annual Average Travel time between Isiolo to survey will be Modogashe; and Wajir to Annually Travel time KeNHA Modogashe; and Wajir to Elwak, conducted for a week Elwak, disaggregated by survey data disaggregated by passengers and freight (Mon-Fri) passengers and freight Average Travel time Annual travel time between Isiolo to Annual travel survey will be Modogashe; and Wajir to Annually time KeNHA Public passenger bus conducted for a week Elwak, for passenger service survey data (Mon-Fri) vehicle Average Travel time Annual travel Annual travel time between Isiolo to Annually time survey will be KeNHA Heavy commercial truck Modogashe; and Wajir to survey data conducted for a week Elwak, by cargo trucks (Mon-Fri) 63 The World Bank Horn of Africa Gateway Development Project (P161305) Annual travel time Average Travel time Annual Average Travel time between Isiolo to survey will be between Isiolo to Annually Travel time KeNHA Modogashe disaggregated by passengers conducted for a week Modogashe disaggregated survey data and freight (Mon-Fri) by passengers and freight Annual travel time Average Travel time Annual travel survey will be between Isiolo to Annually time survey KeNHA Public passenger bus conducted for a week Modogashe for public data (Mon-Fri) passenger bus Annual travel time Average Travel time Annual travel survey will be between Isiolo to Annually time survey KeNHA Heavy commercial truck for freight conducted for a week Modogashe for heavy data (Mon-Fri) commercial truck for freight Annual travel time Average Travel time Annual Average Travel time between Wajir to survey will be between Wajir to Elwak Annually Travel time KeNHA Elwak disaggregated by passengers and conducted for a week disaggregated by passengers survey data freight (Mon-Fri) and freight Annual travel time Annual travel Average Travel time survey will be Annually time survey KeNHA Public passenger bus between Wajir to Elwak for conducted for a week data passenger bus (Mon-Fri) Annual travel time Average Travel time Annual travel survey will be between Wajir to Elwak, Annually time survey KeNHA Heavy commercial truck for freight conducted for a week disaggregated for heavy data (Mon-Fri) commercial truck for freight 64 The World Bank Horn of Africa Gateway Development Project (P161305) Desk review of NTSA Availability of public NTSA records and County Number of public transport service transport service and County Governments' records Annually KeNHA / NTSA providers along Isiolo-Modogashe and (matatus/bus) along Isiolo- Governments on PSVs, and reports, Wajir-Elwak Modogashe and Wajir-Elwak ' records traffic data collection road corridor Desk review of NTSA NTSA records and County Number of public transport and County Number of public transport service Annually Governments' records KeNHA / NTSA service providers along Governments providers along Isiolo-Modogashe on PSVs, and reports, Isiolo-Modogashe ' records traffic data collection Desk review of NTSA NTSA records and County Number of public transport and County Number of public transport service Annually Governments' records KeNHA / NTSA service providers along Governments providers along Wajir-Elwak on PSVs, and reports, Wajir-Elwak ' records traffic data collection Number of road crash fatalities between Isiolo- Desk review of NTSA Number of road crash fatalities between Mandera road section per NTSA traffic Annually accident data records NTSA Isiolo-Mandera road section (per 1,000 year (disaggregated by accident data vehicles) vehicle (driver and passenger), pedestrian, cyclist) Hours taken to process Desk review of KRA Average processing time at border border clearance for freight Annually KRA records records for Rhamu and KRA crossing for freight trucks and passenger trucks and passenger Mandera border posts vehicles vehicles at Rhamu and Mandera border posts 65 The World Bank Horn of Africa Gateway Development Project (P161305) Number of telecommunication Community Conduct annual operators offering internet Survey Number of online public services used by community survey services to the community Annually Interview ICTA communities along the corridor per Interview with County along Isiolo - Mandera with County month Governments Regional road corridor, and Governments number of institutions with internet connections. County Governments Number of women and Desk review of reports ' records children utilizing the by County Number of women and children utilizing Records from improved access to Annually Governments and KeNHA the improved social services various identified social services various Institutions (Social/Gender disaggregated) institutions in (Social/Gender Interviews the project disaggregated) area Road Asset Management KRB, KeNHA, Desk review System to support the Road Management Information System KURA, KeRRA Interview of the Road preparation of Annual Public Annually KRB utilized for decision making and setting records Agencies including KRB, Road Works Program and performance targets KeNHA, KeRRA, KURA monitoring condition of the road network. Graduation records of The number of trainees who targeted Desk review of register and undergo institutions, Institutional records Number of non-Kenyans trained in new training in various Annually MoTIHUD & PW training and reports skills in Kenyan institutions institutions supported under reports Interviews the project, disaggregated prepared by by nationality and gender. trainees 66 The World Bank Horn of Africa Gateway Development Project (P161305) ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Road works Desk review of progress Annually Progress KeNHA Roads constructed reports, site inspection reports Road works Desk review of progress Annually Progress KeNHA Roads constructed - rural reports, site inspections reports Road works Desk review of progress Annually progress KeNHA Roads constructed - non-rural reports, site inspection reports Number of schools, hospitals and other Laying of the fiber optic strategic public facilities such as cable will improve Desk review pastoralist roadside markets, rest stops Annually ICTA Records ICTA information sharing and Interviews and community and service centers along access to internet-based Isiolo-Mandera road with internet opportunities. connection Development of a methodology for assessing Relevant vulnerability of a national Desk review of relevant records of Application of climate resilience practices highway corridor to natural Annually reports KeNHA Road in road management hazards/projected climate Agencies related risks and recommendation of institutional reforms needed 67 The World Bank Horn of Africa Gateway Development Project (P161305) (policy, institutional and operational level) to enhance capacity of KeNHA in road network climate resilience planning. Harmonization of Customs Desk review, KRA records, Adoption of ICT based border and other border Annually interviews, site KRA interviews management systems management functions inspection between Kenya and Ethiopia Use of ICT for revenue collection and for facilitating clearance and release of goods to help Kenya Customs comply with new Desk review, site Use of ICT for revenue collection and for Annually KRA records KRA transparency requirement inspection facilitating clearance and release of goods of e-citizen registration, electronic collection of revenue and e-reporting of clearances and release of goods. KRA records, Development of one-stop Desk review, site Development of one-stop border posts Annually site KRA border posts (OSBP) at inspection (OSBP) at Rhamu and Mandera inspection Rhamu and Mandera The number of social infrastructure and services Desk review of progress Progress Number of social infrastructure and provided under the project Annually reports, site inspection, KeNHA reports service provided based on social interviews consultations and needs assessment. Integrated smart road system developed This will involve: (i) Re- Annually Progress Desk review, NTSA and utilized engineering of TIMS which reports interviews, site 68 The World Bank Horn of Africa Gateway Development Project (P161305) entails its upgrading and inspection reconfiguration.; (ii) installing smart poles with sensors and real-time communication gadgets at selected locations on the main road corridors; (iii) acquiring and implementing real-time GPS-Based vehicle tracking systems; (iv) upgrading of NTSA’s data storage capacity and data security systems; (vi) acquisition of an Advanced Data Analytics Systems and Standard Data sharing interface for Road Safety Data disaggregated by sex, accessible to other Agencies and Policy Makers. Project supports gender mainstreaming in the transport sector. As a result, Review of progress it is expected that the ratio reports and interview Female persons recruited at medium-high of female recruited at Progress Annually with concerned MoTIHUD and PW level skilled positions in concerned medium-high level skilled reports institutions under the institutions under the project positions in concerned project institutions under the project will be increased compared with the existing ratio. 69 The World Bank Horn of Africa Gateway Development Project (P161305) The project will finance the development of a Gender Action Plan (GAP) Progress considering the reports by recommendations of several each Implem Gender Action Plan developed and sectorial analyses on the enting Annually Desk review, interviews MoTIHUD and PW implemented in the concerned barriers that women face Agency and road/transport agencies under the project for their recruitment, beneficiaries retention, and promotion. under the Therefore, this indicator will project monitor the progress of plan development and its implementation. The project will develop a Review of grievance grievance redress Grievance redress mechanism mechanism with different redress KeNHA/MoITHUD/ICTA/N Grievances responded to and /or resolved Quarterly logbook and interview entry points. This indicator mechanism TSA/KRA within the stipulated standards with implementing will monitor its response to logbook agencies. and resolving of each grievance. The project will support an internship program, which will define a specific quota EBK for women engineers, and internship Female graduates recruited in a paid six gap analysis and activities to registration Annually Desk review, interviews EBK months internship program in the IAs promote their participation data and supported by the project (Percentage) in internship programs, and progress a minimum 30 percent of report project cost allocated for supporting this activity will target women. 70 The World Bank Horn of Africa Gateway Development Project (P161305) This indicator estimates demand-side social accountability through engagement with project beneficiaries and the extent to which project activities and outcomes are meeting beneficiaries’ demands. This is based on a perception Interview survey administered on a data, Records representative sample to from various representative local institutions Citizen Engagement, Share of target Interviews, Desk review communities/beneficiaries Annual involved in KeNHA beneficiaries with rating ‘Satisfied’ or of reports including Vulnerable and the project, above on project interventions Marginalized Groups County (VMGs) and focus on the Government management of social and records environmental risks and impacts, management of security forces, the selection process of the selected local social infrastructure, and quality of construction of the social infrastructure. Survey results will be disaggregated by gender. ME IO Table SPACE 71 The World Bank Horn of Africa Gateway Development Project (P161305) ANNEX 1: IMPLEMENTATION ARRANGEMENTS AND SUPPORT PLAN COUNTRY: Kenya Horn of Africa Gateway Development Project Project Institutional and Implementation Arrangements 1. Implementation arrangements will involve Project Implementing Agencies (PIAs) and beneficiary entities: There will be six implementation agencies and several beneficiary entities. The project will be mainstreamed within the operations of the implementing agencies and beneficiary entities and form an integral part of their investment program. All the implementing agencies and most of the beneficiary entities have previous working experience on the execution of Bank financed projects. These implementing agencies are involved in the implementation of a transport portfolio in the amount of US$1.3 billion. The details of the implementation arrangements are as follows: (a) Implementing Agency: Each implementing agency shall be responsible for: (i) implementation; (ii) resolving any project preparation and implementation bottlenecks that may arise during execution of their respective project activities; (iii) overseeing all day to day operational activities; (vi) identify any challenges and bring them to the attention of the Project Management Office (PMO); (v) preparing bidding documents, specifications, terms of reference, request for proposals, contract documents, procurement plans, process payment, management of environmental and social safeguards, financial management reports and accounts among others; and (vi) prepare progress reports on their respective components or subcomponents and submit to the PMO. (b) Beneficiary entity. Each entity will be responsible for initiating the procurement process including preparation of terms of reference for consulting services contracts and specifications for works and goods. Beneficiary entity with adequate capacity shall manage the entire procurement process, otherwise this will be managed by the respective implementing agencies. The implementing agencies will sign contracts witnessed by the respective beneficiary entity. Contract management and approval of quality of the deliverables will be delegated to beneficiary entities. The implementing entities will honor any payment upon approval of the deliverable by the beneficiary entity. (c) Project Management Office (PMO): At the national level, the PMO is responsible for overall reporting and coordination of the project and will raise any issues that may hamper the smooth implementation of the project to Project Oversight Committee (POC). The PC will report directly to the PS, SDoI on a day-to-day basis assisted by the Deputy Project Coordinator (DPC). Specifically PMO shall be responsible for: (a) overall coordination of implementation; (b) provide overall project coordination and reporting; (c) communicate with the Bank on project progress, any problems or challenges that ensue and copy all correspondence to implementing agencies and beneficiary organizations; (c) ensure timely production of joint overall project implementation progress reports and dissemination of necessary information; (d) report to the POC all projects related matters, any difficulties/bottlenecks and policy matters that may hinder smooth project preparation and implementation; (e) ensure that adequate coordination exists with the Implementation Agency and all other beneficiary entities as required; and (f) coordinate and monitor the implementation of the other road sections of the Isiolo-Mandera road corridor financed by other financiers and share the progress reports with the Bank. 72 The World Bank Horn of Africa Gateway Development Project (P161305) 2. The schematic illustration of the implementation arrangements is provided in figure 1.1 Overall coordination of the project will be the responsibility of PMO under SDoI. Figure 1.1: Implementation Arrangements POC PMO KeNHA (DG) ICTA (CEO) KRA NTSA (DG) SDoI (PS) SDoT (PS) A. Financial Management 3. The Bank’s Financial Management (FM) team conducted a Financial Management (FM) assessment of the six implementing agencies, KeNHA, ICTA, NTSA, KRA, SDoI and SDoT in April 2020. KeNHA and the SDOI are under the MOTIHUD. ICTA is under the Ministry of Information Communication and Technology (MoICT) while KRA is under the National Treasury and NTSA under the Ministry of Interior. The six agencies have experience in management of Bank-financed projects. 4. The objective of the assessment was to determine whether the implementing agencies maintain adequate financial management arrangements capable of ensuring that: (a) Funds channeled into the project will be used for the purposes intended in an efficient and economical manner; (b) The project’s financial reports will be prepared in an accurate, reliable and in a timely manner; and (c) The Project’s assets will be safeguarded from loss. 5. The FM assessment was carried out in accordance with the Bank Directive: Financial Management Manual for World Bank Investment Project Financing Operations issued February 4, 2015; and the Bank Guidance: Financial Management in World Bank Investment Project Financing Operations Issued and Effective February 24, 2015. 6. The FM assessment revealed that KeNHA, ICTA, NTSA, KRA, SDoI and SDoT have adequate capacity and experience to effectively implement the proposed project. The agencies have experience in management of Bank-financed projects. The agencies have well-staffed FM units headed by qualified project accountants. Budget arrangements were assessed as adequate and will be aligned with country budget processes. However, delays were noted in the preparation and submission of the IFRs for projects 73 The World Bank Horn of Africa Gateway Development Project (P161305) under SDoI and ICTA. The Bank is providing capacity building training to these agencies to strengthen financial reporting. Material in-country disbursement delays were noted in transfer of funds from the Designated Account (DA) in the National Treasury to the relevant project accounts. There are also challenges of insufficient IDA budget allocation, arbitrary slashing of budgets in-year, late approval of supplementary budgets, insufficient counterpart funds and delays in making payment to vendors. These are being addressed as part of the Portfolio reform dialogue. Each of the six agencies will designate a qualified full-time project dedicated accountant. 7. The project has six implementing agencies and 13 beneficiary entities (NCA, MT&RD, M&TD, PWD, KRC, KRB, KIHBT, UoN, NLC, DOH&HS). These are coordinated by the Project Management Office (PMO). It is therefore necessary to have proper coordination of fiduciary arrangements to facilitate efficient implementation of project activities. The PMO will develop a detailed FM procedures manual to define the fiduciary arrangements during project implementation to ensure quick disbursement of funds and proper accountability. The FM procedures manual will be expected to be ready by September 30, 2020. B. Audit and Financial Reporting 8. Each of the six implementing agencies will prepare and submit quarterly IFRs. They will also be required to prepare and submit separate annual audited financial statements. The internal audit units of each of the six implementing agencies will be required to conduct internal audit reviews of the project activities as part of their annual audit plan. Any incremental cost of the internal audit review will be covered by the project. C. Disbursement 9. The Project will adopt the Statement of Expenditure (SOE) method of disbursement. The disbursement methods will include advances, reimbursement, direct payment and special commitment. The project will open six Designated Accounts: DA-A for KENHA; DA-B for ICTA DA-C for KRA; DA-D for NTSA; DA-E for SDoI; and DA-F for SDOT. This will enhance efficiencies in disbursement and overall implementation by ensuring that delays by one of the agencies does not impact on the overall project. The need for the six separate DA’s is also informed by the fact that the credit is quite substantial, for US$750 million, and the fact that the project has many executing entities which may entail additional fiduciary risks during project implementation. 10. The Project activities consist primarily of large-scale contracts and consultancies. However, there will also be community and county level activities related to social infrastructure and related operational aspects of the social infrastructure, especially under component B for KeNHA. Nevertheless, these activities have no CDD-type arrangements, and these are assessed as posing no additional fiduciary risk to KeNHA as they would be implemented as part of the broader contracts for which KeNHA has sufficient capacity. Most of the payments will be made using the direct method of payment which will further reduce the FM risk. Budgeting 11. The project funds will be factored in the national annual budget under the line ministry budgets 74 The World Bank Horn of Africa Gateway Development Project (P161305) and captured in IFMIS based on the GOK SCOA. The assessment revealed the challenge of inadequate budget allocation, misclassification of budgets between revenue and Appropriations in Aid, delays in capturing project activities in supplementary budget and slow exchequer releases especially during the first quarter of every year, which affects project implementation and overall absorption rate of funds. Funds flow arrangements 12. The six DA’s will be opened in the Central Bank of Kenya (CBK). Each implementing agency will submit application for withdrawal of funds (DA) to the World Bank via Client Connection for replenishment of their respective DA. Funds from the six DA’s will flow to respective six project accounts (PA’s) opened by the relevant implementing agencies in commercial banks acceptable to the World Bank. All in-country payments will be made from the relevant PA’s. Payments relating to the executing entities will be made from the PA’s of the relevant implementing agencies. However, in exceptional cases whereby an executing entity is deemed to have adequate fiduciary capacity, such entity may be permitted to open a separate sub-project account. However, the Bank will conduct an FM capacity assessment of the relevant executing entity and provide prior clearance via letter of no-objection before executing entity can be allowed to open a sub-project bank account. The executing entity will provide regular financial returns to the implementing agency which will remain accountable for proper use of the funds. Details of FM arrangements including payment, financial reporting and audit arrangements will be included in the FM procedures manual which will be developed by the PCO during project implementation. The funds flow arrangements are illustrated in Figure 1. 2. Accounting arrangements 13. The six implementing agencies have adequate accounting capacity and the FM units are headed by qualified project accountants. Nevertheless, the quarterly IFRs and the annual audit reports are done manually using Excel spreadsheets. In view of the relatively low volume of transactions in Bank financed infrastructure projects (which tend to have relatively fewer number but high value contracts), this is deemed to be adequate for project accounting and financial reporting. The six agencies will each designate qualified full-time project accountants. Internal controls 14. The agencies also have functioning internal audit departments with qualified internal auditors whose annual work-plans will be updated to include review of the Project activities. The Bank FM team will also conduct FM reviews at least once every year which will include on-site reviews to selected project sites at national and county level. Financial Reporting 15. The six implementing agencies have adequate capacity to meet the Bank’s financial reporting requirements. They have been submitting IFRs for the existing projects within the stipulated timelines except for ICTA and SDoI. The quarterly IFRs will be submitted to the Bank within 45 days after the end of each calendar quarter. The annual financial statements will be submitted to the Office of the Auditor General (OAG) by not later than September 30 being three months after the year end. There have been delays in submission of quarterly IFRs by ICTA and SDoI. These were caused by high staff turn-over and 75 The World Bank Horn of Africa Gateway Development Project (P161305) lack of full-time project dedicated accountants. The two agencies will be required to designate full-time qualified project accountants to whom the Bank will provide regular FM capacity building training. Figure 1.2: Funds Flow Arrangements Word Bank Credit Account DA-B DA-E DA-A DA-F DA-D DA-C USD/EUR USD/EUR USD/EUR USD/EUR EUR/USD EUR/USD NT ICTA NT SDOI NT-KeNHA NT-SDOT NT- NTSA NT- KRA Min Dev Direct Min Dev Min Dev A/c Min Dev A/c Min Dev A/c Min Dev A/c A/c payments A/c MoICT MoTIHUD MoTIHUD MoTIHUD MoTIHUD NT PA PA PA PA PA PA ICTA-KSHS SDOI-KSHS KeNHA- KSHS SDOT -KSHS NTSA-KSHS KRA - KSHS Payments to contractors, consultants, goods, services, operating costs etc. Audit Arrangements 16. The audit will be carried out by the OAG. The audit report and management letter would be submitted to the Bank six months after the end of the financial year. D. Conclusion of the Assessment 17. The results of the assessment do indicate that the overall FM arrangements satisfies the Bank’s minimum requirements under OP/BP10.02 and is therefore adequate to provide, with reasonable assurance, accurate and timely information on the status of the project as required by the World Bank. The FM residual risk for the project is Substantial. E. Financial Management Conditions Financial Covenants 18. Financial covenants are the standard ones as stated in the Financing Agreement on Financial 76 The World Bank Horn of Africa Gateway Development Project (P161305) Management, Financial Reports and Audits and the General Conditions. F. Implementation Support Plan 19. Based on the risk assessment of the project, the Bank FM supervision review will be conducted at least once every year. The missions’ objectives will include ensuring that strong financial management systems are maintained for the project throughout its life. Reviews will be carried out regularly to ensure that expenditures incurred by the project remain eligible for IDA funding. Table 1.2: FM Supervision Activity Frequency Desk reviews: Interim financial reports review Quarterly Audit report review Annually Review of other relevant information Quarterly such as internal audit reports. On site Visits: Review of overall operation of the FM Annually during implementation Support missions system Monitoring of actions taken on audit Continuous reports, auditors’ management letters, internal audit and other reports In depth transaction reviews As required Procurement 20. Procurement under the project will be carried out in accordance with: (a) the World Bank Procurement Regulations for Investment Project Financing Borrowers: Procurement in Investment Project Financing, Goods, Works, Non-Consulting and Consulting Services, dated July 2016, revised November 2017 and August 2018; (b) introduction of Exceptions to National Competitive Bidding Procedures; and (c) the provisions stipulated in the Legal Agreements. Bank standard procurement documents shall be used for procurement of goods and works through International Competitive Bidding (ICB) and for all consulting services exceeding US$300,000. The Borrower has prepared a Project Procurement Strategy for Development (PPSD) that stipulates the most beneficial procuring approach that forms the basis for the Procurement Plan. 21. The significant project procurement profile is mainly construction (upgrading) of targeted road sections in the North-eastern part of Kenya, Fiber Optic Cable (FOC) works and associated consultancy services for design, supervision and needed strategic advice & studies. The targeted road sections traverse through five neighbouring counties: Isiolo, Meru, Garissa, Wajir and Mandera. The road traverses through thinly populated and sparsely spaced habitations / major towns. The roads construction works being, mostly in arid and desert region and critical shortage of water particularly during dry seasons, is a recurrent issue. In addition to the technical and contractual considerations, factors like socioeconomic situations, population settlement patterns, pastoral lifestyle, high incidence of poverty, scarcity of water 77 The World Bank Horn of Africa Gateway Development Project (P161305) and security concerns and remoteness of the project sites are considered in determining appropriate sizes of contract road sections packaging and slicing. 22. Single contract sizes (chainage either starts/ends with major habitation) determination has also been dictated by the design documentations information and local administrative jurisdictions which are important for smooth implementation of the contracts. The supervision and monitoring of the contracts would be challenging unless supplemented by innovative and unique approaches that fits with each contract site based on the realities on the ground. The contract segmentation has also taken these aspects into considerations. 23. The road works contracts, and the FOC contract will use traditional, tried-and-tested design and construction contract arrangement (FIDIC “Red book”- Second edition) where detail design, construction standards and specifications are prepared by the client. Procurement Risk Identifications 24. Based on the details presented in the PPSD, it is noted that the Implementing Agencies (IAs) internal strengths and opportunities from the external operating context are favourable as compared to the internal weaknesses and external operating environments. 25. Favourable conditions include the following: (a) Specifications and scopes of the major works contracts are routine and well defined; (b) Though they are of high value, the activities involve less complexity and are standard type and are straight-forward activities; (c) The IAs having prior experience in implementing similar World Bank-financed contracts; and (d) Market risks are low, and potential contractors and consultants likely participate in the project procurement opportunities. 26. Unfavourable or project procurement risks include: (a) Delay in procurement processing and Inadequate contracts Implementation management and monitoring (Environmental and social safeguard, RAP implementations, timely access and possession of site, failure to pay contractors and suppliers’ exploitation from variation events during contracts implementation), increase cost and time of contracts completions; (b) Insecurity, remoteness, and scarcity of water and other construction materials along some of the roads contracts sites; (c) The project IAs are not having clear policy direction on applicability of agreed Procurement Regulations due to conflicting clauses in the PPAD Act 2015 with Bank’s Financing Agreement; (d) Substandard quality of design may trigger substantial contracts variation thereof and increase contract cost at completion and delay in completion time. (e) The region targeted has been underserved over years and the area is expected to have an influx of labour and staffing (both foreign and Kenyan) during project implementation. Influx of labour possess a high risk to the project exacerbating sexual violence in this fragile region that exhibits high incidence of poverty subjecting the local population to high levels of vulnerability. Potential risks for sexual exploitation and abuse and other forms of GBV are 78 The World Bank Horn of Africa Gateway Development Project (P161305) high. The risks include sexual exploitation between workers and community members, sexual harassment and issues related to sexual violence against women and children that may be associated with the project. Project Health and social safeguard risks could be further increased due to the recent COVID-19 pandemic; and (f) According to track records of KeNHA and ICTA, delays in meeting planned procurement milestones, delay in decision making, substandard quality design documents, frequent change of scope, and so on are challenges and have been the root causes for contracts completion time and cost overruns. KeNHA and ICTA depends upon external consultants for main contract management functions like design, design review, and supervision. The substandard performance of these consultants and not working to the best of their professional ability for KeNHA, and ineffective transfers of knowledge, are some challenges to be addressed. In addition, the staff turnover as a result of internal transfers makes the organisation have challenges of retaining the institutional memory and historic knowledge. KeNHA and ICTA are planning to strengthen their internal capacity to be able to competently monitor the quality of works done by consultants. 27. Overall Project Procurement Risk rating is Substantial. Recommended Risk Mitigation measures: 28. Capacity: Strengthen the Project Management Office (PMO) and use of Project monitoring information system/software; implement proactive RAP implementation and possession of site arrangement; Agree on business/service level standards; establish monitoring system for payments within the contractual periods; Monitor contracts cost and time performance on quarterly basis. 29. ES issues: The Bidding Document’s qualification criteria and Special conditions of Contracts (SCC) will comprise Environmental and Social performance enhancement provisions/measures and contractor’s method statement including Contractor’s Environmental and Social Implementation Management Plan (C-ESIMP) will be enhanced. 30. Security: (i) allow more subcontracting to national contractors who may better manage local matters; (ii) allocate a necessary provisional sum for security costs; (iii) Ensure permanent security presence at the works sites (joint responsibility of county and national authorities) and strengthen security measures and mainstream the isolated communities with the rest of Kenya by various measures. Further possibility to include provisional sum for security will be explored. 31. Remoteness and material scarcity: Provide necessary information in the bidding document; Developing water sources (wells) will be a separate pay item in the contract; Consider local labour training and engagement as important works method statement. 32. Participating counties have agreed on free movement of construction materials within and across the counties. To this effect, the participating counties have signed a memorandum of understanding with State Department of Infrastructure and KeNHA. 33. Gender Based Violence: As the local CSO/NGOs have better presence on the ground and have better understanding of the social culture, fabrics, attitudes, security information and social dynamics in 79 The World Bank Horn of Africa Gateway Development Project (P161305) general, engagement of these local organizations would be fit-for-the purpose. Therefore, engage a Civil Society Organization or NGOs to offer Consultancy Services for Community Outreach and Social Communication, Security Perception Survey, Implementation of Grievance Redress Mechanism, mitigation against Gender Based Violence and Prevention of SEA in civil works contracts for the upgrading of Isiolo -Mandera road project. 34. The engagement of CSOs/NGOs is justified as the CSO will be responsible for supporting social communication and capacity building. The objective is to ensure that there is an effective and efficient information feedback mechanism as well as grievance redress mechanism that will aid in identification of project associated benefits and risks. The role of the organization will include conduct of awareness raising and education of the residents of the project and to animate the mechanism for the prevention and management of complaints. 35. The Civil Society Organization (CSO) will share at the local level information which will include; progress of works and information on specific topics in line with the social context of the environment in which the road is being implemented. Such information includes; general security of the project area, prevention of gender-based violence, education of the girl-child and boy-child, prevention of HIV/Aids and STDs, protection of the National heritage, protection of the environment and complaint handling mechanism among others. Therefore, the selection of CSO shall take into account knowledge of local security and tribal dynamics, cultural and social undercurrents. To be fit for the purpose, the short listing of CSOs for such assignment might need to restrict participation to endogenous/local CSOs. 36. For the major civil works contracts and consultancy services selection, based on the detailed project contract definitions, nature of the contracts and market context analysis including prior experience and capacity of the client/IAs and associated risks, the PPSD recommends the following fit for purpose procurement approaches and strategies. 37. For all roadworks contracts. Conformance specifications, separate Design Build (DB) or admeasurement type of traditional contract model and contracting arrangement have been concluded as fit for the purpose. The market approach will be open to international market approach with one envelope, post qualification, and RFB selection method is recommended. 38. For works relating to social-economic infrastructure. Following the same rationale as discussed in the PPSD, conformance specifications based; traditional admeasurement; design, bid, and build contract type; RFB selection method; open national market approach with one envelope; post qualification will be proportional and fit. 40. For works relating to axle load control facilities. Conformance specifications, traditional contract type, RFB selection method, open national market approach with one envelope, post qualification will be proportional and fit. 41. Selection of consultants/firms for supervision services. The nature of the assignments is well established and standardized. The IAs are having ample prior experience in selecting and managing consultancy services contracts of similar scope, magnitude and complexity. The competitive selection method, quality cost-based selection (QCBS), through open international market approach option using Request for Expression of Interest (REoI) for shortlisting and then issuing Request for Proposal (RFP) will 80 The World Bank Horn of Africa Gateway Development Project (P161305) be deployed. Civil works contracts supervision assignments are basically time-based contracts. For ICTA, Single consultant will be hired for providing conceptual design and subsequent Supply and installation works supervision of the Fiber Optic Cable (FOC) works. This approach ensures that the consultant is responsible for the design, bidding document preparation and implementation management. This arrangement saves on the time needed for another supervision consultant selection while keeping the same consultant accountable for the entire services delivery. Similar approach will be followed for design and supervision of roadside amenities and axle load facilities. 42. Selection of ICs. This will follow the World Bank’s Procurement Regulations for Selection of Individual Consultants and the contract type would possibly be framework agreement. 43. Procurement of fibre optics network construction. To be implemented by ICTA, this procurement will follow design, supply and installation, testing, and commissioning of the network. The civil works contract of the ducting will be contracted to road works contract. The new fibre optic cable network along part of the Isiolo-Mandera road corridor will include connections to the community centres and contracted by ICTA. Engineering, Procurement and Construction/Design Build and Transfer contracting approach may be adopted for the rehabilitation and upgrading works of active equipment on the existing NOFBI-I network (1,000 km). The scope covers (i) main road (ii) public places (iii) community (iv) rehabilitation of existing network. If these are procured as separate lots and awarded to different contractors, it would be challenging to coordinate and ensure full functionality. Also, the project may not elicit bid for connecting community and public places. Single responsibility contract is the fit for purpose approach to combine all these requirements and award the contract on single responsibility basis. During the bid preparation, ensuring that the payment terms are balanced, and bids are not front loaded for the laying of FOC in the main corridor / road is necessary. KeNHA and ICTA agreed to exchange information and explore the possibility of construction of conduits for laying FOC by KeNHA road construction contracts. 44. A Procurement Plan acceptable to the Bank covering the selection of consultants for updating detailed engineering designs, feasibility studies and preparation of the associated safeguards documents was reviewed and cleared. A draft Procurement Plan covering at least the next 18 months detailed in Table 1.4 was discussed and agreed during Negotiations. For each contract to be financed by part of the proceeds of the Credit, the different procurement methods or consultant selection methods, the need for prequalification if any, estimated costs, prior review requirements, and time frame would be agreed between the Borrower and IDA task team in the Procurement Plan. Procurement Plans will be submitted and approved though a Bank system named Systemic Tracking of Exchanges in Procurement (STEP). The Procurement Plan would be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 45. A General Procurement Notice (GPN) was prepared and published in United Nations Development Business (UNDB), on the Bank’s external website on February 14, 2017 and the PPSD is updated regularly as appropriate. Specific Procurement Notices for all goods and works to be procured under International Competitive Bidding (ICB) and Expressions of Interest for all consulting services to cost the equivalent of US$300,000 and above will also be published in the UNDB and the national press of wide circulation. 81 The World Bank Horn of Africa Gateway Development Project (P161305) Procurement Risk Assessment 46. Overall Procurement Risk Rating. Procurable items under the project will include Civil Works contracts related to upgrading of a section of road corridor and social infrastructure; erecting a fiber optic cable; goods related to enhancing the capacity of the implementing agencies; and various Consultancy services for design and supervision of infrastructure works and carrying out studies and preparation of strategies; and enhancing the capacity of the implementing agencies. Most Procurement activities under the project will be carried out by six Agencies, viz. KeNHA; ICTA, KRA, NTSA, SDoT and SDoI. Some other beneficiary entities, including, NLC, DOSH, KRA, KRB, EBK, KIHBT, MTD, MTRD and NCA will also implement their own procurement activities under the supervision of their line agencies. Except NLC and DOSH, all the other beneficiary entities have implemented Bank financed projects under previous transport projects. Therefore, they have built their capacity and are able to conduct their planned small procurement activities of low value. 47. Procurement risk assessment of KeNHA; ICTA, KRA, NTSA, SDoI and SDoT has been conducted and based on the outcome of the assessment the project procurement risk rating is Substantial. The procurement and contract performance risks mitigation measures are described as follows: Risk description Mitigation measures Responsibility Procurement is not mainstreamed • Advance procurement processing. Both the with the corporate functions of • The project would allocate resources and Borrower and KeNHA leading to long delays in implement structure procurement. the Bank team concluding contracts such as selection institutional capacity building activities; of consultants, procurement of works • Increased and enhanced supervision. and goods and resolving contractual issues that emerge. Procurement decisions are interfered • During the project Negotiation, both NT & all the with by other national public PPRA and PPARB and other relevant Borrower procurement regulatory bodies or organizations were consulted, and a implementing other national accountability bodies better understanding reached. To this agencies who are not aware of the provisions effect, a clearer provision has been of the financing agreement and the introduced in the FA to avoid any mixing Bank’s procurement regulations. Due of different procurement regimes in to such interferences, procurement decision making. processes and decisions are stalled for • The Borrower agreed to get its internal long before agreement is reached. clearance of decisions before submitting its recommendations seeking Bank’s no objection. Weak contract management leading • Rigorous contract performance NT & all the to unnecessary extension of time and monitoring (using the KPI, as agreed); Borrower cost overruns • Supervision consultants to report, on implementing monthly basis, the projected contract agencies cost and time at completions; • It is agreed that Bank financing will not 82 The World Bank Horn of Africa Gateway Development Project (P161305) Risk description Mitigation measures Responsibility cover any cost overrun of the contracts exceeding 20 percent; Delay in making payments for work • Proper budgeting and monitoring NT & all the done, services rendered, and goods contract performance by the IAs; Borrower delivered thereby negatively affecting • The Bank to receive pending contractual implementing the cashflow of contractors, suppliers payment data, from implementing agencies and consultants. This in turn adversely agencies, on monthly basis, and closely affects overall project performance. work with NT to address the challenges; • It is agreed that the Bank resources will not pay any interest on delayed payments. 48. Applicable procurement methods. Procurement for goods and works under International Competitive Bidding (ICB) contracts will be undertaken using the Bank’s latest Standard Procurement Documents (SPD). Procurement of Goods and Non-Consulting Services which are below the ICB threshold (refer, Table 2.3) can be procured through the National Competitive Bidding Procedure. Procurement of off the shelf goods and commodities of small value contracts of less than US$70,000 may be procured using RfQ procedures in accordance with Section VI, paragraph 6.7 of Bank’s procurement Regulations for IPF Borrowers. Procurement of simple works contracts with value up to US$ 100,000 may be procured using RfQ method. Where it has been determined to be to the advantage of the operation, Procurement of Goods, non-Consulting services and consultancy services under Direct Selection shall be procured in accordance with Section VI, paragraph 6.8/10 of Bank’s Procurement Regulations for IPF Borrowers. 49. Prior review threshold. The thresholds for Bank’s Prior Review, and for ICB including the maximum contract value for which the short list may comprise exclusively Kenyan firms in the selection of consultants, are presented in the table below for purposes of guiding the preparation of the initial procurement plan. The procurement capacity of implementing agencies would be reviewed annually and the threshold will be revised according to the improvements or deterioration in the procurement capacity. Additionally, each activity procurement plan, in STEP, will indicate activity risk rating that would determine review type as part of risk mitigation irrespective of the thresholds in Table 1.3 below. 50. National competitive bidding procedures. National Competitive Bidding (NCB) shall follow the Open and Competitive Bidding procedure set forth in the Kenya Government and Public Procurement and Disposal Act, provided, that such procedure shall be subject to the provisions of Section V Paragraphs 5.3; 5.4; 5.5; 5.6 of Procurement Regulations for “Procurement in Investment Project Financing, Goods, Works, Non-Consulting and Consulting Services. 83 The World Bank Horn of Africa Gateway Development Project (P161305) Table 1.3: Applicable Procurement Methods and Thresholds (risk rating = Substantial) Category Prior Review ICB Threshold National Short-List Max Value Threshold (US$) (US$) (US$) Works ≥ 10,000,000 ≥ 15,000,000 n.a. Goods, IT Systems, ≥ 2,000,000 ≥ 3,000,000 n.a. and Non-Consultancy Services Consultants (Firms) ≥ 1,000,000 n.a. ≤ 300,000; ≤ 300,000 (for Engineering and Contract Supervision) Consultants ≥ 300,000 n.a. n.a. (Individuals) 51. SBDs for NCB. Standard Bidding Documents (SBDs) will be qualified to consider the above exceptions and the qualified documents will be agreed with the Bank before putting in use. As an alternative the Bank’s standard bidding documents can also be used for NCB. Table 1.4: Procurement Plan for the Next 18 months (indicative) Uploaded in STEP Cost Procurement Review S.N Description estimates Method Type Process Start Type (US$ M) Date (RfB/REoI) Kenya National Highways Authority (KeNHA) Works Package 1 Upgrading of Isiolo-Kula 137 1 ICB Works Prior Feb. 2020 Mawe (77km) Upgrading Kula Mawe – 179 Feb. 2020 2 Modogashe (113km plus ICB Works Prior 15km spur roads) Package 2 Upgrading Wajir-Tarjab 70 Nov. 2020 3 ICB Works Prior (55km plus 2km spur road) Upgrading Tarjab-Kotulo 72 >> 4 ICB Works Prior (64km) Upgrading Kotulo-Kobo 50 >> 5 ICB Works Prior (38km) Upgrading Kobo-Elwak 37 >> 6 ICB Works Prior (21km plus 5km spur roads) Extension of the Meru 9.5 >> 7 NCB Works Post Bypass (8km) 84 The World Bank Horn of Africa Gateway Development Project (P161305) Cost Procurement Review S.N Description estimates Method Type Process Start Type (US$ M) Date (RfB/REoI) Consultancy Services Construction supervision of 6 QCBS 1 Upgrading of Isiolo-Kula Consultancy Prior May 2019 Mawe (77km) Construction supervision of 7 QCBS >> upgrading Kula Mawe - 2 Consultancy Prior Modogashe (113km plus 15km spur roads) Construction supervision of 8 >> upgrading Wajir-Kotulo 3 QCBS Consultancy Prior (119km plus 2km spur roads) Construction supervision of 5 4 upgrading Kotulo-Elwak QCBS Consultancy Prior >> (56km plus 5km spur roads) Engaging three Local CSOs 5 5 for managing GBV and QCBS Consultancy Prior >> related cases Engage University of 2 Nairobi for building local 6 DC Consultancy Prior >> capacity in social safeguards in projects Construction supervision of 0.58 7 extending Meru bypass QCBS Consultancy Post >> (8km) State Department of Infrastructure (SDoI) Consultancy Services Select a M&E consultant 1 1 QCBS Consultancy Prior TBD (Public University) Technical assistance in 4 2 transforming Materials QCBS Consultancy Prior TBD Department ICT Authority (ICTA) Consultancy Services Design and Supervision of 1.15 the Installation of a fiber 1 QCBS Consultancy Prior TBD optic cable along Isiolo- Mandera road corridor 85 The World Bank Horn of Africa Gateway Development Project (P161305) National Procurement Procedures 52. Kenya has a public procurement law, the Public Procurement and Asset Disposal Act of 2015 (PPADA) that governs purchase of works, goods and services using public resources by all state organs and public entities (both terms as defined in the same act). The PPAD Act sets out the rules and procedures of public procurement and provides a mechanism for enforcement of the law. Some provisions of PPAD Act are not fully consistent with the World Bank’s procurement Regulations for IPF Borrowers, and therefore the National Procurement Law may not be applied for all international market approach procurements. For instance, the following provisions do not adequately meet the requirements of the Bank’s regulations: disclosure and publications requirements; the minimum period for floating bids, provisions for local preferences, local participation and local content, procurement complaints resolutions mechanisms, provisions for Fraud and corruption, provision for advance procurement among others. The model contract in the national Standard Procurement Document lacks adequate allocation of responsibilities, risks, and liabilities to be used for ICB procedures. 53. When approaching the national market is required, as agreed in the PPSD and the Procurement Plan, the country’s own procurement procedures may be used, with necessary modifications. These procurement procedures shall be consistent with the Bank’s Core Procurement Principles and ensure that the Bank’s Anti-Corruption Guidelines and Sanctions Framework and contractual remedies set out in its Legal Agreement apply. 54. For national open competitive procurement, the following requirement apply: (a) open advertising of the procurement opportunity at the national level; (b) the procurement is open to eligible firms from any country; (c) the request for bids/request for proposals document shall require that Bidders/Proposers submitting Bids/Proposals present a signed acceptance at the time of bidding, to be incorporated in any resulting contracts, confirming application of, and compliance with, the Bank’s Anti-Corruption Guidelines, including without limitation the Bank’s right to sanction and the Bank’s inspection and audit rights; (d) Procurement Documents shall include provisions, as agreed with the Bank, intended to adequately mitigate against environmental, social (including sexual exploitation and abuse and gender-based violence), health and safety (“ESHS”) risks and impacts; (e) contracts with an appropriate allocation of responsibilities, risks, and liabilities; (f) publication of contract award information; (g) rights for the Bank to review procurement documentation and activities; (h) an effective complaints mechanism; and (i) maintenance of records of the Procurement Process. 55. With regards to procurement complaints handling procedures, the following provisions shall be applied: (a) Complaints involving International market and using Bank’s SPD: 56. The Complaints handling procedure under IDA funded projects for contracts following the international market, shall follow the complaints mechanism specified in the Annex III of the World Bank 86 The World Bank Horn of Africa Gateway Development Project (P161305) Procurement Regulations for IPF Borrowers July 2016 Revised November 2017 and August 2018. As communicated in the issued Bidding Document, if a Bidder wishes to make a Procurement-related Complaint, the Bidder shall submit its complaint following the procedures as detailed in the “Procurement Regulations for IPF Borrowers (Annex III).” For complains following international market, the Implementing Agency (IA) of the Borrower shall provide for the Bank’s review all the relevant information and documents, including draft responses to the complainant for Bank’s review and clearance before responding to the complainant. The IA shall not proceed with the next stage/phase of the procurement process, including the awarding of the contract without receiving confirmation of the satisfactory resolution of complaint(s) from the Bank. (b) Complaints involving National market and using National SPD with the above listed qualifications: 57. The contracts using the national approach shall be subject to the complaints’ handling mechanism under the PPAD Law. The IA shall inform the Bank about the actions taken regarding the complaint. In addition, the IA shall provide to the Bank all relevant documentation, as requested and upload all the documentations to Bank’s Systematic Tracking of Exchanges in Procurement (STEP). Environmental and Social (including safeguards) 58. Overall environmental and social risks. The Borrower has carried out Environmental and Social Impact Assessments (ESIAs) for the Isiolo-Modogashe, Modogashe-Wajir and the Wajir-Elwak road sections. The designs and updating the ESIA for Elwak -Rhamu -Mandera is ongoing. Also, the Borrower has prepared an Environmental and Social Management Framework for the Isiolo-Mandera corridor. The project is assigned Environmental Assessment Category A since the potential environmental and social impacts are expected to be significant, sensitive, irreversible and cumulative. The potential adverse environmental and social impacts include community and project workers’ insecurity, social and labour unrest as a result of rush for job opportunities, noise and vibrations during construction; soil erosion and pollution from workers camps, borrow pits and quarries; potential pollution and degradation of Lorian and Borji swamps that intersect with proposed project road; habitat fragmentation, impact on wildlife, physical and /or economic displacement; traffic disruptions; labour influx to the project area; occupational and community health and safety issues during construction; security and community conflict issues; and GBV including sexual exploitation, abuse and sexual harassment. 59. The environmental and social assessments have identified that the project area falls under the greater Ewaso North Ecosystem which contains large wildlife population of diverse species. The wildlife is concentrated largely within the Laikipia-Samburu-Isiolo-Meru landscapes, which support a diversity of 4- 13 species per 25km, but landscapes in the rest of the ecosystem hold low wildlife densities and species diversity. The project area falls in a typical savannah woodland/grassland. Such ecosystems form suitable habitats for both big and small wildlife. While the woodland vegetation forms a food source for browsers, the grasslands/open plains provide suitable food source for grazers, hunting sites for carnivores and ecologically suitable niches for bird species. A summary of the environmental impacts by section of the road corridor is as follows. 60. Isiolo-Modogashe Road Section: The project road covers a total length of 190km commencing at Isiolo through Kulamawe and ending at Modogashe. This road section is characterized by a gentle slope from a high of 1100masl at Isiolo town to a low of approximately 805 meters above sea level (masl) at 87 The World Bank Horn of Africa Gateway Development Project (P161305) Kulamawe trading center and finally 262 masl at Modogashe. The mean annual temperatures experienced in the area ranges between 24°C to 30°C. The area receives high rainfall intensities with poor temporal and spatial distribution, resulting in short-lived excessive flooding. 61. The Project does not traverse through gazetted forests, national park and reserves or have any protected areas nearby. The vegetation is characterized by bush lands, grasslands and shrub lands, comprising various combinations of dry land vegetation such as Acacia reficiens, Acacia tortilis, Commiphora spp, Duosphermae remophilum and grasses which include Aristida spp, Leptothrium senegalese, Sporobolus spp, Lintonianutans and forbs. The Project area is rich with wildlife that roam freely in the expansive shrub and woodland, these include giraffes, zebra, lions, elephant, dik-diks, ostriches, gazelles and gerenuk. The Meru National Park lies far away from the proposed project area, but the Park adjoins three national reserves namely Bisanadi, Kora and Mwingi National Reserves. The environmental and social assessment identified elephant migratory crossing corridor that intersect the road between Isiolo and Garbatula and specifically at the: (i) Shaba-Kachuru route; (ii) Moliti-Charfa Garfasa; and (iii) Kora Matasara route. The road design has provided large box culverts for use by wildlife and livestock herders and speed calming measures and signage at known elephant and wildlife crossings to warn motorists of potential hazards. In addition, the ESIA has recommended that before finalizing the design of the crossings, the Design Engineers should evaluate various wildlife crossing options for environmental and social impacts and select one after consultation with the Client, KWS, wildlife NGOs and the World Bank. 62. There are no perennial rivers on this road section. The area is drained by intermittent streams which generally flow for only a few hours at a time, once or twice a year when rainfall is adequate. The Project has proposed two sections of the road between km 18+100-km 19+600 and 143+300-km 144+800 as the site for emergency aircraft runway for light aircraft. The proposed sites do not conflict with the migratory elephant corridors. 63. Modogashe-Wajir Road Section: This road section commences at Modogashe town through Habaswein, Samatar and ends in Wajir Town. The road section covers 157 km. The area is characterized by a featureless plain and lies between 150m and 460m above sea level. The average annual rainfall varies between 200 – 400mm per annum with an average minimum and maximum temperatures varying between 27oC - 31oC. This road section crosses the seasonal overflow of North Ewaso Ngiro River, which originates from the Aberdare ranges. The low lying, flat topography of the area is susceptible to flooding and as a result, the entire length of the road will be built on 1.5m to 2m of fill rising to about 2m to 4m in the Lorian swamp area. 64. The North Ewaso Ngiro river drains into the semi-permanent Lorian swamp, the Modogashe-Wajir Road crosses the Lorian swamp starting at Km 24 and ends at Km 49. The swamp receives water mainly from the North Ewaso Ngiro River that originates from the Aberdare ranges and Mount Kenya. The project road covers an area of 25km by 60m. During construction a larger area will be impacted by the construction works. This is equivalent to approx. 370 acres (including the existing road carriage). The seasonal swamp receives water mainly from the ephemeral North Ewaso Ngiro River that originates from the Aberdare ranges. 65. The river carries a lot of silt which is deposited into the Lorian Swamp. Ewaso Ngiro river is seasonal with dry season flows accounting for a negligible portion of the annual flow. The highly variable 88 The World Bank Horn of Africa Gateway Development Project (P161305) rainfall coupled with high rates of abstraction for upstream irrigation considerably reduce the amount of water flowing within the river and reaching Lorian Swamp during the dry season and makes the inundation of the area largely unpredictable as well. 66. The Lorian swamp covers Isiolo, Garissa and Wajir Counties. The Swamp is unprotected. As a result, due to encroachment from different land uses and pressure from human settlements, the area with permanent swamp moisture has shrunk from 150 km2 (in the year 1913) to just 8 km2 in 1990. Located in an arid region, the Swamp and its contiguous areas receive rainfall of between 200 and 300 mm annually. The availability of water and vegetation on the swamp attracts people and livestock particularly during the dry season when the swamp provides drinking water and forage. 67. The Project design has provided large box culverts structures along the swampy sections which will act as drainage structures during the wet seasons and allow the river to flow. The ESIA has recommended that the embankment slopes where the livestock and wildlife cross the road be made flatter for ease of usage. The ESIA has recommended that before finalizing the design of wildlife crossings, the Design Engineers should evaluate various livestock and wildlife crossing options for their environmental and social impacts and select the most appropriate option(s) after consultation with the Client, KWS, local communities and wildlife NGOs. The ESIA has also recommended that Bio-diversity Assessment Study for Lorian swamp be carried out before commencement of work on the road. 68. The Lorian swamp acts as dry grazing area and is found rich with wildlife such as the elephants, monkeys, crocodiles, elands zebra, buffalo, oryx, warthogs, lions, giraffe and other large savannah mammals. The area is characterized with acacia vegetation and other grass species that provide grazing to animals and wildlife that flock the area during the dry season. Majority of the wildlife along the road section are concentrated in the natural ecosystem of Lorian swamp area due to the more favorable vegetation cover and availability of water for a longer period. 69. In addition, there is Borji Swamp which is a seasonal swamp that exist in the South at Laghbogol area. The swamp stretches 0.44km across where the road passes. The project road covers an area of 0.44km by 60m of the swamp area. This translates to approx. 6.5acres of swamp land. The swamp is seasonal. 70. The Project design has provided large box culverts structures along the swampy sections that will act as drainage structures during the wet seasons. They will be utilized as animal crossing during the dry season when both livestock and wildlife use the Lorian swamp as dry season grazing area. However, it is noted that large animals such as giraffes cannot use the box culverts. Therefore, environmental and social assessment has recommended that the embarkment slopes along the sections where the livestock and wildlife cross the road will be made mild for ease of usage by the animals to cross the road. The design has proposed traffic signage along the road including clear wildlife crossing signs at measured distance. The environmental and social assessment has recommended further in-depth biodiversity assessment and development of Biodiversity Management Plan for the Lorian and Borji Swamps. The Borrower will carry out the biodiversity assessment prior to the commencing the civil works. 71. The Modogashe-Wajir road section has a variety of avifauna. These include Marabou Stork, Guinea Fowls, Ostrich, Weaver Birds, Superb Starling, Black Headed Heron, Great Egret and Sacred Ibis. Whereas many avifauna are found within the Lorian Swamp area where there is abundance of vegetation, the Marabou Stork has a significant presence in Wajir Town. 89 The World Bank Horn of Africa Gateway Development Project (P161305) 72. Wajir-Elwak Road Section: The road section commences at Wajir town through Kotulo in Wajir, Kotulo in Mandera to Elwak; the road section is 175 km. The project road is within an arid and semi-arid region and receives mean annual rainfall of below 255mm with maximum temperature ranges from 30˚C to over 34˚C while minimum temperatures fall up to 18˚C. There no perennial rivers / streams crossing the proposed road section but there are laghas (seasonal streams/riverbeds that are dry except during the rain seasons in the area or upstream when some flow is experienced). The area vegetation type is characterized by canopy shrubs (forming scrublands), and climbers dominated by Acacia spp., Commiphora spp., Maerua spp., Delonix elata, Grewia spp., Boswellia spp., Terminalia spp., and Combretum spp. The wildlife found in the area include dik-dik, gerenuk, impala, grant gazelle, reticulated giraffe, ground squirrel and lesser kudu. The lesser kudu and gerenuk feature in the International Union for Conservation of Nature (IUCN) Redlist database as Near Threatened and therefore are of conservation interest. 73. On this road section, there are no under- or over- passes proposed but speed calming measures and signage at known wildlife crossings and historical livestock crossing points will be installed to warn motorists of potential hazards. The crossings will be identified in consultation with the local communities and KWS. 74. Nomadic pastoralism is the main land use within the project area. Pastoralism based on livestock production (cattle, sheep, goats, camels, and donkeys) forms the main livelihood system, but it faces numerous constraints, including aridity and drought; insecurity due to inter/intra-ethnic cattle rustling and raids; diseases, climate change and problems associated with livestock marketing. The ESIAs have recommended construction dual usage box culverts along the project road for the domestic and wildlife animal crossings. The use of these box culverts for use by local livestock herders with their livestock as well as some wildlife/livestock road signages and bumps will be erected on the highway to warn motorists when approaching wildlife and livestock crossing points. 75. OP/BP 4.04 Natural Habitats policy is triggered. The policy is triggered as the proposed road upgrading project will pass through wildlife rich corridor at various sections of the road. In the road section between Isiolo and Garbatula, the assessment has identified three elephant migratory points that intersect with the proposed road. These crossing points serve as links between wildlife habitats which support seasonal migration of wild animals between Meru National Park, Bisanadi and Kora national reserves. Construction activities may result in temporary impediment to existing seasonal wildlife movements during the construction phase. Also, the upgrading works could result in increased traffic collision with wild animals during the operational phase. The ESIAs have recommended both structural measures such as provision of large box culverts, and bridges that act as under passes for both wildlife and livestock crossing and non- structural mitigation measures such as provision of signage, speed bumps and traffic calming measures to warn the approaching traffic about the wildlife and livestock crossing areas. The proposed road will traverse through the ephemeral Lorian Swamp and Borji swamp where the design has provided for large box culverts to allow free flow of water during rainy seasons. In addition, the ESIA/ESMP for Modogashe-Wajir road section has recommended for biodiversity assessment study on the Lorian and Borji Swamps before commencing works. The ESIAs have also recommended that Design Engineers should evaluate wildlife crossing options before finalizing the option in consultation with the Client, KWS, wildlife NGOs and the Bank. 90 The World Bank Horn of Africa Gateway Development Project (P161305) 76. Project on Intenational Water Ways (OP/BP):The Policy is not triggered because the project will not finance any activities that use international waterways. The Project will drill water boreholes to provide water for construction works. These water boreholes will require standalone Environmental and Social Impact Assessment (ESIA) for new site (s) and compliance to statutory requirements. The respective ESIA will confirm that the new borehole (s) to be drilled will not use transboundary aquifer or aquifers connected to International Waterways. 77. Water Availability in the Project Area is scarce. The project area is of arid/semi-arid climate and is considered water stressed area. There are no permanent surface water sources in the project area as most of the sources are subsurface such as boreholes and shallow wells and the annual rainfall range 200- 300mm. Water for human and livestock consumption along the project road is currently sourced from sub-subsurface system such as boreholes, shallow wells and water pans. The available community water sources are not sufficient to meet the human and animal consumption demand and cannot be used to provide construction water, which in the design review would be approximately 300m3/day. Establishing sources of water for construction is therefore critical for the project construction works. 78. The alternative systems that can be used to provide construction water are sinking boreholes to tap ground water, rainwater harvesting through construction of water pans, or damming of the seasonal rivers. These alternatives have been investigated and sinking of boreholes is considered the most feasible for the project, as the other alternatives would be expensive and would take rather too long to complete. These additional water sources will require a standalone ESIA/ESMPs for each new site and compliance to statutory requirements. The respective ESIAs will confirm that the new borehole (s) to be drilled will not use transboundary aquifer or aquifers connected to International Waterways. Also, the ESIA has recommended that Contractors prepare water sharing arrangements with the communities adjacent to the project area, as water has been identified as potential cause for inter/intra community conflicts in the project area and proper handover of the water facilities at project completion to the communities and respective County Governments. 79. Cumulative Impacts: The Environmental and Social Assessment have taken into consideration assessment of potential cumulative impacts of this project and other project planned and ongoing along/adjacent to the project corridor. Among other non-Bank financed projects considered in the assessment include: (i) Lamu Port, South Sudan, Ethiopia Transport Corridor (LAPSSET); and (ii) Garissa - Modogashe road project A13, which intersects the Project road at Modogashe. The Cumulative Impacts have been assessed in the ESIA and mitigation measures provided in the ESMPs. The cumulative impacts are summarized in Table 1.5. Table 1.5: Cumulative Impacts Environmental Potential Cumulative Impacts Topic Construction Phase Operation Phase Increased Traffic Cumulative impacts may be considered significant Traffic volumes are projected to during construction. Bearing in mind that the host increase in the project area due to population is unaware of traffic regulations not used to improved road conditions. large infrastructure projects. The ESIAs has proposed The ESIA has proposed mitigations on the ESMP which mitigations on the ESMPs that 91 The World Bank Horn of Africa Gateway Development Project (P161305) Environmental Potential Cumulative Impacts Topic Construction Phase Operation Phase are adequate and need to be enforced. need to be enforced. Soil Degradation, The ESIAs have recommended various measures to site related oil mitigate against potential soils degradation and oil spills. spills No significant adverse cumulative impacts are anticipated. Loss of flora and Cumulative impacts will only occur during the Improved road conditions will lead fauna, construction phase if the construction of other nearby to an influx of people as well as proliferation of projects coincides with that of the proposed HOAGD development in the area. invasive species project. Additionally, an increase in road If this is the case, even greater attention should be paid traffic will lead to cumulative to the mitigation measures outlined in order to ensure impacts on the wildlife in the area, the cumulative impact will remain of minor-moderate through potential increase in significance human wildlife conflicts. However, the proposed mitigation measures need to be strictly adhered to in order to mitigate these potential negative impacts. Air Quality Cumulative impacts are expected during the The impacts of the proposed road construction phase if the construction of other nearby on regional air quality and projects coincides with that of the proposed project. greenhouse gases are predicted to The ESIAs recommend that Contractor implement the be negligible ESMPs in order to ensure that potential cumulative impact will remain of minor significance Noise and There is the potential for cumulative noise impacts of Vibration the proposed development in conjunction with other concurrent projects in the vicinity arising from simultaneous demolition and construction works. Contractor implement the ESMPs in order to ensure that potential cumulative impact will remain of minor significance Social Impacts Cumulative impacts will only occur during the Given that traffic volumes will including: Labor construction phase if the construction of other nearby increase in the project area due to influx, Crime, projects coincides with that of the proposed project. improved road conditions. disruption of Contractors to implement the ESMPs in order to ensure However, the proposed services, that potential cumulative impact will remain of minor mitigations need to be strictly increased significance and regular monitoring is carried out. adhered to. conflicts, impacts on children, GBV sexual exploitation and abuse 92 The World Bank Horn of Africa Gateway Development Project (P161305) Environmental Potential Cumulative Impacts Topic Construction Phase Operation Phase Interference Cumulative impacts will only occur during the with water construction phase if the construction of other nearby resources projects coincides with that of the proposed project. However, the proposed mitigations need to be strictly adhered to. 80. OP/BP 4.11 Physical Cultural Resources is triggered. The policy was triggered given the possibility that the civil works may impact known or unknown cultural assets and/or sites in the project area. During stakeholder consultations the locals identified that mosques close to the road at Kachuru and Kulamawe would be affected. Also, communities voiced that community graves and shallow wells found along the project road should be avoided. The design engineer has redesigned sections that will affect potential known physical cultural resources. The ESIAs include measures for handling cultural assets along with the ‘chance find procedures’ which will be included into the works contracts. 81. Environmental and Social Management Framework (ESMF) has been prepared. The project has prepared an ESMF covering the Isiolo-Mandera road section for the activities yet to be identified at this stage of project preparation. The ESMF covers the social infrastructure activities such as the construction of pastoralist roadside markets, to be identified in the course of project implementation, auxiliary facilities such as campsites, asphalt plants, quarry sites and borrow sites, ICT fiber optic cable and border posts. The ESMF provides guidance for assessing the potential environmental and social impacts of the sub- projects during implementation. It gives guidance for environmental screening, preparation of environmental and social assessments with basic TORs, as well as preparation of Environmental and Social Management Plans (ESMPs). The site specific Environmental and Social Impacts Assessments (ESIA) for these infrastructure and facilities including site ESMPs will be prepared by KeNHA, reviewed and approved by the Bank and disclosed before commencement of any works for activities covered under the ESMF. The ESMF was disclosed in country and on the World Bank external website on November 29, 2019 respectively (details Table 1.6). 82. Alternatives have been considered to minimize adverse safeguard-related impacts. The Isiolo- Elwak road section follows the existing alignment for the proposed upgrading works. The design engineer has proposed redesign of the beginning of the road at Isiolo town which is heavily constructed and will impact many PAPs property owners and business persons who are likely to be affected by the proposed road either as a result of loss of property or loss of business due to demolition of buildings 1km into the road project. Thus, the ESIA has recommended alternative loop road through Kambi Garba which would have fewer PAPs. The final road design has reduced the Right of Way (RoW) from 60m to 30m in town centers to reduce impact on land acquisition hence very few if any of the businesses will be relocated. In Wajir, the design has taken into consideration communal graveyards, water wells and mosques that are within the right of way, the ROW has been reduced from 60 m to 30 m. The reduction on the ROW will minimize land acquisition and impact of the project on human settlements and sensitive cultural resources, hence the cultural resources including graveyards/graves, mosques and water wells that could have been impacted will be avoided. 93 The World Bank Horn of Africa Gateway Development Project (P161305) Social safeguards 83. Component A of the project will focus on upgrading selected critical road infrastructure and associated roadside amenities which will have significant impact on local communities. The environment and social impact assessment have been undertaken for Isiolo – Kula Mawe (77km), Kula Mawe – Garbatula- Modogashe (113km), Modogashe – Samatar (90 km) and Samatar – Wajir (67km) and Wajir-Elwak. These ESIAs presents a good understanding of the baseline socio-economic profiles of the communities and stakeholder engagement that enables the project to understand the social relations and dynamic that inform the social impacts identification and propose adequate mitigation measures. 84. To manage social risks identified in the preliminary assessments, the Borrower has prepared an Environment, Social, Health and Safety Action Plan. that stipulates the proposed social risk management strategies. Further, it is worth noting that the project is a pilot for the contracts with enhanced environment and social, health and safety (ESHS) procurement performance, with the standard procurement document dated October 2018. The Borrower in the Action Plan will prepare the following social risk management instruments; (i) Grievance Redress Mechanism, (ii) Stakeholder Engagement Plan, (iii) Labor Influx Management Plan, (iv) Child Protection Strategy and a non-government organization will manage the HIV/AIDs awareness and prevention. The GRM will provide avenues for receiving, investigating, escalation and raising awareness of the GRM. GRM committee will be formed and the GRM will be time bound. 85. To manage the risks of Gender Based Violence (Sexual Exploitation and Abuse) the Borrower has had lessons learnt from the ongoing Bank financed East Africa Regional Trade and Transport Development Facilitation Project. The project has adopted measures to prevent, mitigate, and respond promptly and adequately to any case of Gender Based Violence (Sexual Exploitation and Abuse). The Borrower will engage the services of three Civil Society Organizations (CSOs) to undertake an assessment of the risk of Gender Based Violence (Sexual Exploitation and Abuse), provide awareness, system’s support and monitoring. The CSOs will work closely with country and county system to ensure that there will be systems in place to manage survivors and provide an appropriate Grievance Redress Mechanism for Gender Based Violence (Sexual Exploitation and Abuse). The project has adopted contracts with enhanced environment and social, health and safety procurement performance, with the standard procurement document dated October 2018 that have provisions for Gender Based Violence (Sexual Exploitation and Abuse). 86. Careful planning of projects in fragile, conflict and volatile (FCV) environments is paramount. This includes; mapping of all stakeholders who may have a role to play in implementation of the project, thorough consultations with all the stakeholders identified and documentation of all deliberations/discussions carried out with the stakeholders. 87. Local institutions with the understanding of social, economic and cultural practices of the host communities should play a major role in the implementation of the project. This helps in building acceptance of the project. For Cameroon, a local NGO with not only the understanding of the project area but also the cultural, religious, and social practices was engaged to carry out the social assessment and retained with additional responsibility to design and manage the GRM and any GBV cases and implementation of the social communication strategy (on operational aspects). Communication of strategic aspects of the project is handled by both the Ministry of Public Works and Defense according to 94 The World Bank Horn of Africa Gateway Development Project (P161305) their respective functions. Thus, capacity building of the local institutions mainly the local CSOs/NGOs in the project area is required prior to request for expression of interests for social assessment and implementation of GRM and management of GBV issues. 88. The Involuntary Resettlement Policy (OP/BP 4.12) has been triggered. This relates to the civil works that result from Component A and other undefined civil works that will result from the construction of community socio-economic infrastructure proposed. Though the larger section of the road corridor which is 60 meters wide is already public land, there are encroachers. Some sections of the road are 30 meters and will require land acquisition. The land acquired and civil works will result in negative impacts due to the physical loss of land and economic loss of livelihoods. A Resettlement Policy Framework (RPF) has been developed by the borrower for the unknown area where there will be displacement impacts. Similarly, the Resettlement Action Plans for the three sections of the road Isiolo – Kula Mawe (77km) and Kula Mawe – Garbatula- Modogashe (113km); Modogashe – Samatar (90 km) and Samatar – Wajir (67km); and Wajir-Elwak have been prepared, reviewed and cleared by the Bank and disclosed in-country and at the World Bank website as detailed in Table 1.6. 89. The Indigenous People’s Policy (OP/BP 4.10) was triggered. A social assessment has been undertaken. Since the communities in the project areas are predominantly vulnerable and marginalized, the principles of OP/BP 4.10 have been incorporated in the project design and ESMF/ESMPs. Stakeholder engagement on the project design and impacts therein have been discussed with the local communities to ensure that there is Free Prior Informed Consultations that leads to Broad Community Support of the Project. A sub-component of the provision of social infrastructure and services has been included in the project to improve the social-economic status of the communities in the project area. Gender 90. Gender equality remains a challenge in Kenya, for a lagging region like the project area. The project will support the socio-economic growth on the areas and that of women, providing better economic opportunity and ease in management of their gender roles as caregivers. A gender assessment has been undertaken along the roads project, women and men have raised concerns regarding; (i) poor quality of public transport in the area; (ii) long waiting times for transport and travel time; (iii) poor public transport system leading to delay in access to hospital and other critical social services like access to administration centers. The project has adopted a participatory process that involves women and men during the project design stage aimed at identifying major transportation issues of public concerns. Participation of women during project design and implementation has been considered, where job opportunities will be available to women, proposed socio-economic infrastructure like the sinking of community boreholes will ease the burden of women in the area. Citizen Engagement 91. The project has taken a participatory approach during the design process, where, local communities have been involved in providing feedback to the proposed design and in the identification of project positive and negative impacts. This process will be strengthened by the development of a stakeholders’ engagement plan that will be prepared at the start of the project for each section of the road and it will identify all stakeholders and ensure that there is continuous engagement throughout the life of the project. During the identification of the social infrastructure sub-projects to be included as part 95 The World Bank Horn of Africa Gateway Development Project (P161305) of the project, a consultant will engage local communities and understand their priorities. A grievance redress mechanism established with support from the County Governments will provide an avenue for the local communities to channel their complaints and provide feedback on project implementation. Table 1.6: Disclosure of Environment and Social Safeguards Reports Item Document Date of Disclosure in Date of Disclosure in- no. InfoShop country Environmental and Social Impact Assessment 1 Upgrading of Isiolo to Kulamawe-Modogashe November 28, 2019 November 28, 2019 road section (190km) 2 Upgrading of Modogashe to Wajir (157km) November 28, 2019 November 28, 2019 road section 3 Upgrading of Wajir-Elwak (275km) November 28, 2019 November 28, 2019 Resettlement Action Plan 1 Upgrading of Isiolo to Kulamawe-Modogashe November 29, 2019 November 29, 2019 road section (190km) 2 Upgrading of Modogashe to Wajir (157km) January 31, 2020 January 30, 2020 road section 3 Upgrading of Wajir-Elwak (275km) February 4, 2020 February 5, 2020 Environmental and Social Management Framework November 28, 2019 November 28, 2019 (ESMF) Resettlement Policy Framework (RPF) November 29, 2019 November 29, 2019 Social Assessment November 28, 2019 November 28, 2019 Security Management Plan N/A N/A Monitoring and Evaluation 92. Monitoring of the performance of the project will be carried out through a combination of various approaches as follows: (a) The works contracts will be supervised by independent consultants selected competitively. The consultants will oversee the day-to-day progress of works on the site and to certify each payment invoice, including compliance by the contractor with all technical specifications, environmental and social mitigation plans, and contractual provisions. (b) The approach in (a) above will be complemented by the use of Geo-Enabling method for Monitoring and Supervision (GEMS) by KeNHA and FCDC staff. The high security risks in the project area may restrict the Bank team to undertake comprehensive supervision. GEMS is a systematic approach of getting insights about investments in geographic locations where access is either nonexistent or limited due to active conflict, high insecurity, or logistical constraints. GEMS approach therefore “brings eyes on the ground where we cannot always have boots on the ground”. The Bank team has conducted training on GEMS for KeNHA staff in readiness of the implementation of the project and plans are underway to train selected FCDC staff as well as construction supervision consultants once they are on board on the use of this monitoring approach. 96 The World Bank Horn of Africa Gateway Development Project (P161305) (c) Local CSOs with experience and presence in the project area will be engaged to oversee matters relating to Gender Based Violence in the project area through creating awareness. The security will be provided by the Government through the regional and county commissioners complemented by the respective county governments. (d) In addition to the foregoing, the results will be monitored by a team of experts from one of the accredited universities in Kenya, as a M&E consultant that will be selected competitively by March 31, 2021. The M&E consultant will monitor the impacts of the risks identified in the Systematic Operations Risk Rating Tool (SORT) Framework. Where unavailable, the consultant will collect baseline information. The consultants will provide both semi and annual reports that will be discussed at workshops with stakeholders, both during their preparation and on finalization. 93. Meanwhile, the capacity of the implementation agencies will be augmented by technical assistance and consultant services, particularly in the areas of reviewing designs, supervision consultants’ monthly and annual progress reports. Overall project coordination will be by the PMO whose capacity is being enhanced. Strategy and Approach for Implementation Support 94. Implementation support will focus on actions that are critical for project success. Emphasis will be placed on execution quality of works; technical compliance; timely payment to contractors, suppliers and consultants; timely award of contracts; adherence to implementation schedules and reforms, progress on strengthening capacity of transport entities. Continuous supervision will be encouraged given that most of the Bank’s task team members are based in the Kenya Country Office and additional measures have been designed as discussed above to enhance supervision given the high security risks and fragile environment prevailing in the project area. This will therefore enable continuous and cost-effective supervision of the project. 95. Upstream reporting, auditing and accountability, and technical compliance measures to ensure early detection and remedy of problems through ongoing oversight of the project implementation activities will be emphasized. For civil works contracts, there will be ad hoc site visits, and speedy review of project implementation progress reports prepared by the engineering supervision firms that will perform the day-to-day independent certification of the quality of work, payment certificates and compliance with contract terms as well as from GEMS and the CSOs that will be engaged. 96. In case of procurement documents subject to prior review, these will be carefully reviewed by both the technical experts and the procurement specialists on the team to ensure that they comply with the project’s technical requirements and the Bank’s procurement and consultants’ guidelines considering the fragile, conflict and violence prevailing in the project area. 97. The Financial Management Specialist will carry out periodic reviews of the project’s implementing agencies’ financial management systems and controls and where necessary, will conduct reviews of statements of expenditure and monitor the availability and adequacy of the counterpart funds as reported in the quarterly Financial Monitoring Reports/Interim Financial Reports. These reviews will be utilized for improving the implementing agencies’ systems and performance in these areas. 97 The World Bank Horn of Africa Gateway Development Project (P161305) 98. Before each supervision mission, the project implementing agencies will submit to the Bank, a detailed consolidated project implementation progress report which will provide the status of the project activities and identify all implementation issues facing the project. These reports combined with site visits, reports from CSOs, supervision consultants and GEMS will be the basis for reaching agreement with the client on the activities for the upcoming period and resolution of implementation issues facing the project. 99. A robust communication strategy will be developed for dissemination of information on scheduling of execution of project activities, project progress, results, reforms and impact of the project activities. SDoI will engage a communication’s consultant to enhance its capacity in developing and implementing the strategy including continuous documentation and recording of all project activities before works start, during and after the completion of the project. This will act as a baseline for print and documentaries. 100. The communication’s consultant will be engaged from the onset to facilitate effective information flow - internal and external, communicate project objectives and achievements, inspire behavior change where needed, ensure adherence of World Bank’s Disclosure Policy and feedback gathering. The Project will develop and deploy a comprehensive communications strategy by March 31, 2021 designed to address risks or issues identified that could affect project implementation considering all stakeholders. 101. The Task Team will undertake supervision as follows: (a) Where necessary, provide technical, procurement and financial management support to the project’s implementing agencies from the country-based team; (b) At least quarterly supervision reviews of the project, including if possible, visits to the project sites. The review teams will comprise an engineer(s), procurement specialist, financial management specialist, communications specialist, environmental specialist, civil engineers, enterprise architect, business IT specialist, social development specialist, GBV specialist, security specialist and the task team leader; (c) Annual fully-fledged supervision missions involving all the key task team members; and (d) The communications specialist on the team will prepare a brief on the implementation status of the project and post it on the external country office website semi-annually. Implementation Support Plan and Resource Requirements Implementation Support Plan 102. On the side of the GoK, if needed, the capacity of the implementation agencies will be augmented by technical assistance and consultant services, particularly in the areas of designs, supervision, project coordination, monitoring and evaluation. The annual Monitoring and Evaluation (M&E) reports produced by the M&E consultants (an accredited university in Kenya) will be discussed at workshops with stakeholders, both during their preparation and on finalization. Resource Requirements 103. The above activities would require both the Bank and the GoK’s management to allocate adequate resources for their staff to be able to carry out comprehensive project supervision (details in 98 The World Bank Horn of Africa Gateway Development Project (P161305) Tables 1.7 and 1.8). Inadequate resources will hamper the implementation of the proposed intensive follow up and monitoring required for mitigating the potential risks identified. Table 1.7. Resource Estimate Time Focus Skills Needed Resource Estimate Partner Role Technical review of No partner bidding documents, involved but the terms of reference, Civil engineering, institutional, 45 staff-weeks of Bank information will proposals and bid, ICT, financial management, staff plus 26 staff- First be shared with technical evaluation procurement, environment, weeks of Short-term twelve other reports and review of social, GBV, trade facilitation, Consultant (STC). months development technical reports institutional and partners involved (feasibility and design communication specialists in transport study reports) and sector in Kenya reports from CSOs Civil engineering, institutional, Annually, 30 staff- Technical review of urban transport, ICT/ITS, weeks of Bank staff bidding documents, 12-48 financial management, plus 18 staff-weeks of proposals and months procurement, an independent STC. supervision of works, technical/procurement and and technical reports communication specialists Civil engineering, institutional, Annually, 30 staff- Technical review of urban transport, ICT/ITS, weeks of Bank staff bidding documents, financial management, plus 18 staff-weeks of Other proposals and procurement, an independent STC. supervision of works, technical/procurement and technical reports specialist and communication Table 1.8. Skills Mix Required Number of Number of Skills Needed Staff Comments Trips/annum Weeks/annum Team Leadership 25 4 site visits Country Office (CO) staff Co-Team Leadership 25 4 site visits (local) Country Office (CO) staff ICT Specialist 10 4 site visits (local) Washington Civil Engineer 8 2 site visits STC (Local) Enterprise Architect (ICT) 4 4 site visits STC (International) Procurement 8 4 site visits CO staff Social (safeguards) 10 4 site visits CO staff Social Development 8 2 site visits CO staff M&E 2 2 site visits STC (local) Financial management 5 2 site visits CO staff Environmental 10 4 site visits CO staff GBV specialist 8 4 site visits Washington Office staff Communications 2 4 site visits CO staff Trade facilitation 4 4 site visits International Architect 2 2 site visits STC (Local) Security 5 4 site visits CO staff 99 The World Bank Horn of Africa Gateway Development Project (P161305) ANNEX 2: DETAILED PROJECT DESCRIPTION COUNTRY: Kenya Horn of Africa Gateway Development Project Regional and Country Context Development of Regional Trade and Transport Corridors 1. Transport and trade corridors can be a valuable approach to strengthen market linkages to the benefit of stakeholders along the full value chain, from producer to consumer. Traditionally, most corridors have focused on infrastructure development and trade facilitation. However, the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) and renewed efforts around the Beira Agricultural Growth Corridor (BAGC) initiative in Mozambique, indicate that corridors can also be tools for agricultural development and food security. Significant parts of the countries in the HoA suffer from food insecurity and it is no coincidence that this issue was central to the development of the Moyale Corridor. Other corridors in the region, such as the Berbera Corridor connecting Ethiopia and Somaliland, would also benefit from such an approach and could be part of a broader regional development initiative. 2. Lessons on development of regional transport infrastructure projects in Africa indicate that such projects cannot effectively generate the envisaged benefits without an intentional and concerted effort to do so. It requires both focused initiatives as the experience of other corridors has shown. The development of the Moyale Corridor within the broader Lamu Port-South Sudan-Ethiopia Transport Corridor (LAPSSET) initiative is instructive. Its development included logistical and regulatory issues related to the movement of agricultural goods across the Ethiopia-Kenya border to terminal markets in Kenya. These included poor feeder roads in northern Kenya and ongoing high costs of transport, among other issues. As a result, movement along the Moyale Corridor has increased dramatically in the last three years due to the completion of the highway between Moyale at the border and Isiolo, a town that is roughly halfway between Nairobi and the border. While previously only 30-40 cars travelled along the road on any given day, now there are more than 100 a day. Meanwhile, a trip from Nairobi to Moyale through Isiolo used to take at least three days, but now takes only 11 hours. 3. The development of the Moyale Corridor, for example, which extends from Tanzania through Nairobi to the town of Moyale at the Kenya-Ethiopia border, holds significant potential. According to a report 25 on investment in upgrading the Isiolo-Moyale road on the Nairobi-Addis road (Moyale Corridor), trade between Kenya and Ethiopia is expected to increase fivefold by 2019, growing from US$35 million to US$175 million. The report further notes that the Moyale Corridor has already been instrumental in advancing food security in the region. The corridor was critical for enabling the 2017 import of the emergency supply of maize from Ethiopia to Kenya, although the arid climate and sparse development within the northern region have presented challenges to broader agricultural development. 25 Study of the Kenya-Ethiopia Trade Corridor, A Pathway to Agricultural Development, Regional Economic Integration and Food Security, African Development Bank. 100 The World Bank Horn of Africa Gateway Development Project (P161305) 4. Evidence has shown that, the development of transport corridors is an incremental process, and involve investing in hard transport infrastructure (roads, railways, ports) as well as complementary interventions. Trade logistics tend to follow, with additional hard and soft infrastructure aligned to facilitate the movement of goods and services. As transport corridors evolve into trade corridors, they often address issues such as: goods inspection, customs (including harmonization of declaration forms), warehousing/storage, security, weighbridges, and police check points. The scope of the interventions in often increased to include additional areas such as economic dimensions, socio-economic considerations, and environmental sustainability. 5. Preparatory work for the development of transport corridors in the HoA is underway. For context, Table 2.1 gives an overview of the priority activities identified under each pillar of the HoA Initiative. Table 2.1: Priority Interventions under the Horn of Africa Initiative Pillar 1: Regional Infrastructure Economic Corridors Priority corridors for upgrading (a) Kismayo, Lamu and Mogadishu Corridor consisting of the following road sections Ethiopia (i) Negele-Filtu-Siftu (340km) Somalia (i) Mogadishu-Afgoi-Baidoa-Dolo (475km) (ii) Kismayo-Elwak (507km); and (iii) Kismayo-Bilis Qooqaani-Liboi (244km) Kenya (i) Lamu-Isiolo (580km) (ii) Isiolo-Wajir – Elwak – Mandera (740km); and (iii) Liboi-Dadaab-Garissa (207km) (b) Assab and Djibouti Corridor (c) Berbera and Djibouti Corridor (d) Mogadishu, Berbera and Bossasso Corridor Regional Energy Trade (a) Power integration connectivity program (i) Ethiopia-Djibouti Second line (ii) Somalia Transmission Backbone (iii)Feasibility Studies for: Ethiopia – Somalia Interconnection; Ethiopia-Eritrea Interconnection; Kenya- Somalia Interconnection; Djibouti – Somalia Interconnection; and Second line for Kenya-Ethiopia Interconnection (b) Enabling Power Trade (East Africa Power Pool, Somalia, Eritrea, Ethiopia, Djibouti, Kenya) (c) Other Energy Supports: Regional Oil Jetty - Damerjog New Oil Jetty (Potential PPP Project) Single Digital Market (a) Priority Regional Infrastructure (i) Submarine festoon cable along the coast (ii) Terrestrial links and backbone connections (b) Single regional data market (i) Data Infrastructure (ii) Cyber security (iii) Regulatory Harmonization 101 The World Bank Horn of Africa Gateway Development Project (P161305) (c) Single Data Service Market (i) E-government (ii) Cross-border digital payment facilitation Pillar 2: Trade and Economic Integration (a) Regional Trade Facilitation (i) Technical Assistance (e.g. corridor approach, tackle Non-Tariff Barriers (NTBs), harmonization of product standards) (ii) Thirteen (13) one-stop border posts (iii) Dry ports (b) Regional Value Chain Development (c) Investment Climate Pillar 3: Building Resilience (a) Pastoralist Livestock Insurance (b) Strengthening the resilience of pastoral production system to climate change Pillar 4: Strengthening Human Capital (a) Strengthening Human Capital Delivery Systems and Networks (b) Building Skills for Future Employment and empowering women and youth (c) Strengthening Identification for Development (ID4D) 6. Table 2.2 provides the status of readiness for development of sections various corridors. The development of Kisimayo, Lamu and Mogadishu corridor (over 3,000km) will involve physical intervention in rehabilitation and upgrade of road segments combined with complementary investments and activities aimed at leveraging improved transit to maximize socioeconomic wellbeing of the population in the area of influence of the corridor. Complementary activities may include facilitation of interlinkages with ports and at border crossings and improvement of other trade conditions. The estimated cost for updating the corridor is US$4.1 billion. Table 2.2: Preparatory Work for Rehabilitating Kisimayo-Lamu and Mogadishu Corridor Design Status/ Feasibility Length (Km) % in poor condition Kisimayo, Lamu and Mogadishu Corridor 3,093 Ethiopia Underway 340 86 Negele-Filtu-Siftu Somalia Mogadishu-Afgoi only 475 94 (a) Mogadishu-Afgoi-Baidoa-Dolo (b)Kisimayo-Elwak, and No 507 100 (c) Kisimayo-Bilis Qooqaani-Liboi No 244 100 Kenya Lamu-Isiolo No 580 100 Isiolo-Wajir-Elwak-Mandera Yes 740 100 Liboi-Dadaab-Garissa Yes 207 100 Source: Compiled 7. Kenya has embarked on the detailed engineering design of sections of this corridor with World Bank financing. Feasibility and engineering designs for the Isiolo-Mandera road section will be undertaken under the project and about 36km upgraded with Bank financing. In addition, Garissa to Liboi border town with Somalia will be designed under the project, though no financing for upgrading works is available but 102 The World Bank Horn of Africa Gateway Development Project (P161305) could be considered under follow on operations. This notwithstanding, financing of the preparation of several other sections of the corridors remain unfunded, for instance, Lamu-Isiolo which require attention. 8. In case of Somalia, with financing from the African Development Bank and European Union, sections of the transport corridors will either be rehabilitated or designed. For instance, the financing will be toward: (i) rehabilitation of 82km along the 327km BeledWeyne-Galkayo road corridor namely BeledWeyne-Kalabeyr, 22km; and Dhusamareb-Qaradhi, 60km; (b) rehabilitation of 85 km along the 240km Galkayo-Garowe road corridor from Galkayo to Faratoyo; (c) rehabilitation and construction of the existing 80km earth road from Luuq, Ganane to Dolow to gravel road standard; (d) construction of a new 100 km along the 241km Galkayo-Hobyo from Galkayo to Elgula to gravel standards; and feasibility study, environmental and social impact assessment and detailed engineering design of 280km Lowyaddo- Farddaha-Borama road. Critical links to Kenya remains unfunded and could be considered under follow on operations for instance: (a) Kisimayo to Liboi; (b) Kisimayo to Elwak; and (c) Luuq-Mandera. 9. On part of Ethiopia, preparatory work is yet to start. The critical Dolo-Negele-Awasa road section will require attention as well as the missing link from Rhamu in Kenya connecting to this part of the corridor. Trade Facilitation 10. Ethiopia and Kenya currently have no enforceable bilateral trade agreement allowing each other tariff exemptions. Ethiopia does, however, apply a tariff reduction on COMESA imports (including imports from Kenya), but extends more favorable treatment to Djibouti and Sudan under bilateral agreements. Further, Ethiopia is negotiating to join the WTO. By remaining outside the EAC and COMESA FTA, both Ethiopian exports to Kenya and Kenyan exports to Ethiopia are subject to higher duties, making such products less price competitive on the counterpart’s market and creating a challenge to trade. The lack of coordination between Kenya and Ethiopia on import-export procedures is often cited as a persistent challenge. 11. Nonetheless, the Ethiopian and Kenyan governments have been involved in discussions aimed at improving trade, services and economic relations between the two countries. Special Status Agreement (SSA) was signed in 2012 that allows the two countries to devise mechanisms for elevating bilateral trade through IGAD. The SSA provides a framework for the coordination of progressive tariff concessions, increased market access, harmonization of tariff lines, and streamlining of standardization and quality assurance procedures for goods and services between the two countries. The SSA is anticipated to be one step towards enhanced trade links, expansion of markets and strengthening of common development objectives. While there is significant potential for more trade between Kenya and Ethiopia, the unfavorable trade environment between the two countries continue to be a challenge. The project will support this effort. Though political interventions can allow for more open trade (for example, the Kenyan government waived duties for white and yellow maize in response to the shortage in 2017), such measures are temporary in nature and not binding or reliable. 103 The World Bank Horn of Africa Gateway Development Project (P161305) Country Context Regional Trade and Transport Facilitation 12. Kenya has road and transport agreements with Ethiopia focused on the development of interregional highways under the LAPSSET Corridor Development Authority. In November of 2011, Ethiopia and Kenya signed a MOU related to the development, management and utilization of the corridor (a US$ 700 million agreement for the construction of the Nairobi-Moyale-Addis Ababa road network linking the two East African countries). In March 2013, the LAPSSET LCDA was established through the Presidential Order Kenya Gazette Supplement No. 51, Legal Notice No. 58, to plan, coordinate and manage the implementation of the LAPSSET Corridor, with formal land acquisition done under Kenya’s Land Act of 2012. The project also constructed the physical infrastructure for an OSBP at Moyale, which is a significant step forward in facilitating trade. 13. Kenya’s transport policy requires all Class A roads to be bituminized. Class A roads are international roads that link Kenya with its neighbors. GoK is implementing this policy decision through an improvement program supported by development partners. However, a few unpaved Class A corridors remain unfunded, largely in Northeastern Kenya, as shown in Table 2.3. To maximize the benefits for the populations they serve, a clear strategy is needed for the investments in the remaining unpaved Class A roads. Table 2.3: Unfunded Unpaved Class A Road Corridors Name of Corridor Distance in km 1 Isiolo-Wajir-Mandera, linking to Mogadishu, Somalia (A13) 740 2 Garissa-Liboi, linking to Kisimayu, Somalia (A2) 184 3 Lamu-Garissa-Isiolo (A10) 594 4 Burder (border with Somalia)-Wajir-Moyale (A14) 350 5 Kitale-Lokichar (A1)2 213 Source: Compiled Note: The road was paved but most of it has been destroyed due to inadequate maintenance 14. The proposed paving of the Isiolo-Mandera road corridor will be a major milestone in the region. The entire corridor is unpaved. Thus, it is one of the Class A (international) roads which remains unpaved. The link between Kenya and Ethiopia is already established between Isiolo and Moyale which is located at Kenya's border with Ethiopia. On the Ethiopian side, the 100 km Yabelo-Mega road (which is part of Ethiopia's route 80) that connects Ethiopia and Kenya was inaugurated in 2014. The proposed link would further extend the connection to Somaliland at Mandera through Isiolo. This link, once completed, has the potential to play an important role for the counties of Isiolo, Garissa, Wajir, and Mandera in providing markets for their agricultural exports and facilitate importation of manufactured goods increasing trade among the three counties. 15. Among other transport modes in Kenya, the road sub-sector is large (refer to Table 2.4) and provides a dense network of roads of approximately 160,886km most of which is largely concentrated in the highly populated parts of the country. The road network is significantly less dense in sparsely populated areas. For instance, the North Eastern counties of Isiolo (25,336km2), Wajir (55,840km2), Mandera (25,798km2) and Garissa (45,720km2) covering a total area of approximately 152,694km2 or 26 104 The World Bank Horn of Africa Gateway Development Project (P161305) percent of Kenya’s land mass have a road network of only 9,386km or 6 percent of the national total, and what is in place is predominantly unpaved. One of the main targets of the current 15-year Road Sector Investment Plan (RSIP1), 2010-2024 includes improving the share of the road network assessed as being in Good condition from 11 percent in 2009 to 27 percent in 2015, those assessed as being in Fair condition from 33 percent to 39 percent and reduce those classified as being in Poor condition from 56 percent to 34 percent. An assessment is underway to determine whether these targets have been achieved. Table 2.4: Distribution of Kenya’s Road Network by Agency (in km unless specified) Agency Paved Unpaved Total % share Kenya National Highways Authority (KeNHA) 6,783 6,904 13,687 8.5 Kenya Rural Roads Authority (KeRRA) 2,268 127,799 130,067 80.8 Kenya Urban Roads Authority (KURA) 2,140 10,409 12,549 7.8 Kenya Wildlife Service (KWS) 6 4,577 4,583 2.9 Total 11,197 149,689 160,886 100 Percentage share (%) 7 93 100 Source: Road Inventory and Condition Survey, Ministry of Roads, 2004 & Kenya Gazette Notice, January 22, 2016 Fiber Optic Cable and Associated Activities 16. As part of the National strategy to spur socio-economic growth in the country through use of Information and Communications Technologies (ICTs), the Government, continues in laying the National Optic Fiber Backbone Infrastructure (NOFBI) across the country with service nodes in all the former regional headquarters and connecting other major towns in Kenya. This is intended to connect to the undersea cable and deliver terrestrial broadband Internet to Ethiopia, Somalia, South Sudan, Uganda and Tanzania. 17. The framework of building fiber optic alongside road construction is being undertaken along the Eldoret - Lodwar - Nadapal road section as part of an integrated SMART infrastructure development under EARTTDFP). This has been borne out of the need to create a multipurpose backbone and fiber rings and spurs to serve the communities and institutions along the road corridor. The lessons learnt for the implementation of the integrated infrastructure development along Eldoret - Lodwar - Nadapal road will be used to replicate HoAGDP and other similar projects in the country. 18. The scope of this activity under the project will involve, rehabilitation and restoration as some sections have been destroyed by floods and erosion, installation of active equipment such as repeaters need to be upgraded and new ones introduced expanding the fiber network and associated subsystems to provide broadband to public institutions and communities, strategic facilities such as community and service centers along the Isiolo-Mandera corridor and border crossings. Road authorities, KRA and other stakeholders will use this network in implementing an Intelligent Transport System, including monitoring road usage, safety, transit traffic and the environment through a sensor network. This design framework for HoAGDP is similar to that for Eldoret-Nadapal road section of the World Bank financed Eastern Africa Regional Transport, Trade and Development Facilitation Project (EARTTDFP). This is important given that the GoK is promoting delivery of services such as transit traffic monitoring, vehicle registration, birth 105 The World Bank Horn of Africa Gateway Development Project (P161305) certificates, driver licenses among others using internet. Thus, citizens with no access to internet services are disadvantaged as they must travel long distances to areas with such facilities for to be served. Institutional Strengthening and Deepening Reforms in the Transport Sector 19. Major institutional and policy reforms have been witnessed in Kenya’s transport sector leading to significant transformation. These changes are recent and close monitoring and support is required to consolidate and deepen these gains. These and other reforms (detailed in Box 1) have contributed to the noticeable improvements in the condition of the road network in Kenya including on the major road corridors such as the Northern Corridor and service delivery. New regulatory frameworks providing oversight in various subsectors of transport have been established and require strengthening. Details follow: Centre for Land Acquisition and Resettlement Studies (CELARS) 20. CELARS has been established at the University of Nairobi with the objectives to: (a) develop practice-oriented training programs in land acquisition and resettlement that respond to needs of Kenyan context that contribute to effective resettlement planning, implementation and monitoring; and (b) to promote and support practice-oriented research activities focused on the most relevant social problems and issues in Kenya, and that contribute to deriving lessons from experience that inform improvements to land acquisition and resettlement law, procedure and practice as well as other related social development issues. 21. The focus of the training will initially be on Land Acquisition and Resettlement Management (LARM) with the objective of improving the management and implementation of involuntary land acquisition and resettlement in the context of public and private sector infrastructure projects, which is a major challenge facing execution of particularly infrastructure projects in Kenya. Currently, Kenya and the East African region has a dearth of knowledge and experience in the professional and technical processes in policy formulation, planning and management of risks associated with land acquisition and resettlement as witnessed on most projects including those financed by the Bank. This is the gap that seeks to address and explore and expand the training to cover other areas such as management of GBV related cases. 22. Focusing on involuntary resettlement risk management and mitigation strategies, the course is designed to enhance the understanding and implementation of land acquisition and resettlement in all the phases of the project cycle - right from the planning, design, implementation, monitoring and evaluation. The main outcome of the training is to improve management and implementation of land acquisition and resettlement in Kenya that will be reflected in the increased capacity of practitioners to undertake resettlement work following the training. Thus, training facilities such as classrooms and accommodation for students are required as well as building the capacity of the trainers. Benchmarking trips have been made to India and China leading to the development of the curriculum for tis training and CELARS commencing offering the training. The University of Nairobi has provided facilities to start with which will be improved under the project including construction of classroom and hostels on one acre of land that has been set aside by the University for this purpose. 106 The World Bank Horn of Africa Gateway Development Project (P161305) Mechanical and Transport Division (MTD) 23. MTD is under the SDoI is responsible for provision, maintenance and renewal of mechanical transport and plant services as well as the standardization of vehicles, plant and equipment and an adviser to the Government on issues related to mechanical and automotive engineering. As part of the reform in the sector, MTD is legally mandated to levy charges for its services to provide additional funds required for administration, planning, development, management, regulations, operations and maintenance of effective, economical and efficient mechanical and transport services. Mechanical and Transport Fund (MTF) managed by MTD was established in 2003 to raise funds for the provision of equipment to private contractors, Government agencies and the private entities in support of infrastructural development. 24. The existence of MTF is aiding the local construction industry by availing equipment particularly to small contractors who may not afford to purchase them. However, MTD is a government department and not agile enough to respond rapidly to the dynamic demands of the construction industry. Hence, MTD seeks to review its mandate, institutional framework, physical infrastructure and human capacity to align the department with emerging and future needs of the rapidly growing construction industry. This will steer the department to fully exploit its potential, improve service delivery and efficiency while ensuring sustainability in changing market dynamics. Technical assistance is required to assist MTD in defining a roadmap for implementation of a Cabinet memorandum which in 2006 approved transformation of MTD into a semi-autonomous Government Agency. The project will support implementation of the transformation. Material Testing and Research Division 25. The Material Testing and Research Division (MTRD) of the Ministry of Transport and Infrastructure, Housing, Urban Development and Public Works (MOTIHUDPW) has a global mandate to deliver testing and research on roads and building construction materials. MTRD operates a Central Material Testing Laboratories (CMTL) situated at the headquarters in Nairobi with separate laboratories for soils, geotechnical, physics, paints, chemical, bitumen and Concrete testing capabilities. 26. MTRD faces several challenges including insufficient financing for investment for research, laboratory facilities, staff training among others which is compounded by the prevailing bureaucratic procedures. Furthermore, limited delegation and autonomy to manage the affairs of testing and research coupled with absence of streamlined coordination of National research activities on building construction materials is slowing done the transformation of the sector. Thus, the project will support the transformation of MTRD into a semi-autonomous government agency, including providing support for the development of sustainable funding modalities; institutional strengthening of the transformed institution in areas such as equipping the laboratories, capacity building of staff, and determining and where viable, establishing commercial services. 27. The transformation of MTD and the Materials Department did not happen at the time the new road authorities were established in 2007. Thus, their transformation to more business-like institutions comparable to other institutions in the road sub-sector is imperative to support effective delivery of services. 107 The World Bank Horn of Africa Gateway Development Project (P161305) Public Works Department (PWD) 28. The project will support Building Information Modelling (BIM) technology and Project and Document Management Systems (PDMS) into work processes and workflow to enable all professionals in the SDoPW to collaborate and coordinate project design across the board from inception, design, documentation, procurement, implementation and maintenance which is expected to lead to savings on paperwork and material costs. The Project will support enhancing SDoPW’s capacity to provide architectural design, engineering and advisory services to sister agencies such as KeNHA with specific reference to development of the OSBPs and staff residential housing units. The Engineers Board of Kenya (EBK) 29. EBK was established under the support of the World Bank as part of the reforms in the transport sector with an overall mandate of: (a) developing and regulating engineering practice in Kenya. The development and regulation of engineering practice is considered a key component to the achievement of the infrastructure foundation under the country’s Vision 2030 development blueprint; (b) regulating standards in the engineering education and profession and building capacity for individual engineers and engineering firms; and (c) registering engineers and engineering firms and regulates their conduct for improved performance of the engineering profession. 30. Since its establishment EBK has streamlined standards in engineering education and profession; developed a curriculum for continues professional development for engineers; developed a graduate engineer internship program; and undertook a census of all engineers of various disciplines in Kenya and registered a fresh all engineer and the information is available in a database. The project will support EBK to effectively carry out its mandate including working closely with similar institutions within Eastern Africa and the world. 31. The project will finance: (i) supporting the operationalization of the recently developed Graduate Engineers Internship Programme (GEIP) with the objective to increase the number of professional engineers with skills and hands-on experience to meet the national demand for these professional services and support economic growth of the country; (ii) technical assistance through provision of consultancy services in strengthening senior management capability in decision making; (iii) undertake a review of the Engineering Education, Training and Practice in Kenya; (iv) review of the EBK’s (2014-2019) Strategic Plan and development of (2020-2025) Strategic Plan; (v) undertake a Skills Gap Analysis for the engineering practices; (vi) development of Engineering Compliance Manuals; and institutional Capacity building, including automation of the Board’s processes; (vii) support the implementation of the EBK Act including the establishment of the Kenya Academy of Engineering and Technology (think tank on engineering and technology matters) as well as the Kenya School of Engineering, a Center for professional development of engineers; and (viii) support the harmonization of regulations to facilitate reciprocation of professional accreditation and practice of engineering within the Eastern Africa and HoA region and the rest of the world; and training. 108 The World Bank Horn of Africa Gateway Development Project (P161305) Kenya Roads Board (KRB) 32. The project will support enhancing the capacity of the Kenya Roads Board (KRB) in coordinating and delivery of road maintenance to improve transport accessibility and climate resilience in the country. According to the Road Sector Investment Plan (RSIP), Kenya’s road assets are estimated at over KES 2.5 trillion (RSIP, 2010) and represent one of the country’s largest investments. Thus, this asset should be preserved, managed and maintained in a prudent and effective manner using evidence-based decisions support tools. 33. KRB, with the mandate of coordinating the maintenance and rehabilitation of the road network and financing road maintenance through the Road Maintenance Levy Fund (RMLF) plays a major role in this effort. Under the project KRB’s capacity will be enhanced in the following areas: (a) the establishment of a roads sector management system for monitoring and facilitating the development of long-term investment strategies and plans that incorporate climate and natural disaster considerations; and (b) establishment of a Roads Spatial Data Infrastructure framework for planning and managing road development and maintenance; (c) development of a stakeholder engagement framework with the road agencies and county governments and a system of determining, publishing and publicizing impacts of road maintenance programs being funded using the Road Maintenance Levy Fund; and (d) foster collaboration between KRB and other Road Fund management organizations in Africa. Directorate of Occupational Safety Health and Services (DOSHs) and National Land Commission (NLC) 34. These organizations have been the weak links in implementing transport operations in Kenya. These organizations though they play a critical role in facilitating execution of infrastructure related programs on issues ranging from land acquisition and resettlement and providing oversight and enhancing health and safety aspects at workplaces, limited support has been extended to them in building their capacity to execute their mandates. Instead, these organizations have been blamed for slowing down execution of projects. This anomaly has been recognized and under the project support will provided toward institutional strengthening of these organizations. 109 The World Bank Horn of Africa Gateway Development Project (P161305) Box 1. Institutional and Policy Reform in the Transport Sector Governance in the Roads sub-sector and other transport sub-sectors The implementation of governance plan in the road sub-sector is contributing towards improving the performance of the sub-sector with indications of some positive results. For instance: First: Transparency and accountability is improving • legislation on institutional reforms was enacted that clarified and streamlined the ownership, management, accountability, financing arrangements and policy formation in the sector • three autonomous road authorities were established to manage national, rural and urban road networks respectively and they are fully functional - KeNHA is responsible for managing and maintaining all road works on national roads, class A, B and C roads and is allocated 40.0 percent of the RMLF - KeRRA is responsible for all rural and small towns roads, class D and below including special purpose roads and unclassified roads and is allocated 32.0 percent of the RMLF - KURA is responsible for all urban roads in cities and municipalities except where the roads are part of national roads and is allocated 15.0percent of the RMLF - Kenya Wildlife Service (KWS) is responsible for all roads in national parks and forests and is allocated 1.0 percent of the RMLF - State Departments of Infrastructure and Transport are responsible for transport policy formulation and overseeing the development and maintenance of all roads in Kenya • Stakeholders are involved in planning the activities in the sector, for instance, the development of the road sector investment plans • Kenya Roads Board (KRB) which is allocated 2percent of RMLF is responsible for managing the RMLF, which it disburses to the three road agencies and the Kenya Wildlife Services based on an allocation formula stipulated in the Kenya Roads Act and the approved Annual Public Roads Program (APRP). • The balance of 10 percent is retained by the Ministry responsible for roads to be allocated on need basis • Kenya Airports Authority and Kenya Civil Aviation Authority have been granted financial autonomy. They retain all revenues collected. Secondly: Oversight functions have been strengthened • New regulatory body for the construction industry (National Construction Authority -NCA) established. • New regulatory body for the engineering profession (Engineers Board of Kenya -EBK) established. • New regulatory body for maritime sub-sector (Kenya Maritime Authority KMA) established • New regulatory body for road safety (National Transport and Safety Authority) established • A regulatory framework for railways developed • Roads policy developed and adopted • An integrated national transport policy developed and adopted Third: Business practices are improving • Public dissemination of road programs and opportunities • Publication of proposed contracts and their awards • International standard practice for management of large contracts is gradually being adopted even for GoK funded contracts • Long term performance-based road maintenance contracting has been embraced • GoK funded contracts are advertised Fourth: In-depth analysis of the cost of road construction is improving • Cost estimation manuals developed and launched, and construction unit costs are analyzed and dissected in a more rigorous manner • Bids received for both GoK and donor funded projects are subjected to much higher levels of scrutiny than before. Fifth: Institutional Capacity is enhanced • Marine Training Institute established • EASA strengthened and is now a regional center of excellence and among 21 such institutional in the world 110 The World Bank Horn of Africa Gateway Development Project (P161305) Kenya Institute of Highways and Building Technology (KIHBT) 35. KIHBT is a department in the State Department of Infrastructure with the mandate to provide training to ministerial staffs for performance improvement, provide training to the wider infrastructures sector and capacity building for infrastructure development. KIHBT was established as Road Authority Training School in 1955. The purpose was to carry out training for supervisors, plant operators and mechanics for Kenya and the East African region. 36. In 1997 the training expanded to include in-service, pre-service and the public and include: (a) training of engineers, technologists, technicians, craftsmen and artisans in the roads and building sector and computer skills; (b) undertaking capacity building training for professionals in the various fields of the roads and building sector; (c) offering tailor made courses for ministries, parastatal bodies, private organizations and other foreign organizations to improve management and supervisory capacity; (d) conducting training for the private sector in road maintenance; (e) organizing and conducting training for small-scale road contractors and roads overseers; and (f) training plant operators and drivers. 37. Unemployment for youths in Kenya is a major problem and one of the causes of this phenomenon is because graduates from the Kenyan higher institutions of learning do not impart skills that the markets demands. The training at KIHBT increases graduates’ employability and allow them to explore new technologies and bring new ideas to industry which will lead to economic growth. The proposed activities under the project are consistent with the National ICT strategy for Education and Training (2006) which focusses on "the use of ICT in schools, colleges, universities and other educational and training institutions in the country, so as to improve the quality of teaching and learning". The project activities will contribute to improving access, quality and relevance of TVET education in Kenya, through the integration of ICT based resources and to bridge the gap between theory and practical training, which can be combined with practical hands-on education and training. 38. The project will finance the introduction of a smart classrooms concept by enhancing technology to foster opportunities for teaching and learning by integrating learning technology, by use of computers’ specialized software, audience response technology, assistive listening devices, networking and audio/visual capabilities and computer simulations. Smart classrooms will modernize teaching methodology at KIHBT to ensure that students are at par with the cutting-edge technology. This will spur innovation and provoke creative and analytical thinking especially in robotics, automotive engineering and renewable energies, enable the institute to save on equipment cost since students will be trained using simulators instead of actual road construction equipment and reduce the cost of training, and increase student enrollment. The project will support KIHBT in its coordination efforts with similar regional training institutes in Eastern Africa and HoA and enhancing its capacity to provide training to staff from East Africa and the HoA where such training facilities are lacking. 39. Project activities will contribute to close gender gaps in employment in the transport sector, particularly in medium and high-level skills. The project will finance the development of a Gender Action Plan considering the recommendations of several sectorial analyses on the barriers that women face for their recruitment, retention and promotion. The Gender Action Plan will define a differentiated approach for the entities where the project will be able to impact; as, in some of them, there are additional constraints for women’s recruitment such as availability of positions. For the case of the IAs (KeNHA, Ministry of Transport, Infrastructure Housing and Urban Development and ICT Authority), female 111 The World Bank Horn of Africa Gateway Development Project (P161305) graduates will be recruited in a paid six-months internship program in areas such as civil engineering, road safety, contract management, transport planning, transport economics and related fields. Synergies will be identified with the internship program of the EBK and with the skill development trainings under KIHBT. 40. To promote women’s participation in STEM and, taking advantage of the autonomy that the MTRD and MTD will be obtaining through the project, the Gender Action Plan will set a quota for women on new recruitment, in compliance with the Public Procurement and Asset Disposal Act. Additional crosscutting activities will be grounded in the Gender Action Plan such as the development of mechanisms to report cases of sexual harassment and a Response Protocol within KeNHA, the Ministry of Transport, Infrastructure Housing and Urban Development, and ICTA; awareness raising at all staff level and ensuring that women are part of all the trainings that will be financed by the project. 41. Additional efforts will be put into place to ensure women’s participation in the MTRD and MTD through the development of a Gender Action Plan to address the recommendations of several diagnostics that identify women’s barriers to be recruited, retained and promoted in the transport sector, including positions related to Science, Technology, Engineering and Mathematics (STEM), 26 including the establishment of a quota for women taking advantage of the upcoming autonomy of the MTRD and MTD. National Construction Authority (NCA) 42. The construction industry and has the potential to grow if appropriate policies and interventions are in place. This has been recognized in the country’s aspirations as espoused in its long-term development strategy, Vision 2030. NCA was established in 2011 and became operational in 2013. NCA is mandated to oversee the construction industry and coordinate its development through regulation, capacity building; and advisory services to the Government. NCA was established through reforms in the transport sector supported by the Bank. NCA has been able to register contractors, develop regulations and code of conduct that provide the framework for registering and de-registering contractors, and provide the ethics contractors should adhere to while conducting business. The next immediate task is to prepare a construction industry development policy to inform the interventions for the growth of the sector. This is particularly important given that the construction industry contributes to approximately seven percent of the GDP. The policy will underpin the preparation of a strategy to implement this aspiration as stipulated in Kenya’s long-term development blueprint “Vision 2030”. 43. There are several emerging issues including technological changes than call for NCA to position itself better in carrying out the oversight function in the construction industry. Under the proposed project NCA will be assisted in the following areas: (a) building the capacity of construction workers and site supervisors by implementing new curricula for the accreditation of the 59 trades recently developed given that more than 75 percent of the workers in the construction industry in Kenya are informally trained, impact negatively on the quality of workmanship, and there is no formal recognition of many trades currently in the industry; (b) reengineering the ICT based Regulatory Construction Information System (RCIS) to enhance oversight capability; (c) re-engineering and enhancement. that enables licensing of 26The WB financed through MOLO, the development of an analysis and recommendations to increase women’s participation in the urban transport sector in Nairobi. This study comes to complement current effort by the Government of Kenya, such as the Report on Identification of Potential Gender Barriers, Gender Inequalities, Gaps and Entry Points for Gender Mainstreaming in Road Infrastructure. 112 The World Bank Horn of Africa Gateway Development Project (P161305) contractors, accreditation of construction workers, registration of projects, training of contractors and construction workers; (d) develop governance structures for self-regulation of the industry players; and (e) training of the NCA’s staff. This will be supported under the project in addition to facilitating fostering cooperation between NCA and similar oversight organizations in the construction industry in Eastern Africa. 44. The project will finance: (i) preparation of a construction industry development policy and a self- regulation framework for the contractors; (ii) upgrading the information system to create a single platform for coordination of different agencies in the regulation of the construction industry; (iii) installing a data recovery center to ensure the existing contractor monitoring system is robust for business continuity; (iv) enhance the capacity of NCA in maintaining a construction information system, as well as its regulatory function and monitoring compliance with its statutory mandate in developing the local construction industry and forge links with the other similar regulatory bodies in the Eastern Africa region; (v) acquisition of mobile testing laboratories and non-destructive tools and equipment for carrying out physical inspections and investigations at construction sites to determine the integrity and quality of the works construction to increase NCA’s efficiency and effectiveness; (vi) development, testing and implementation of the Competency Based Curricula for the different trades of construction workers to standardize the trainings offered by various technical training institutions; increase the productivity of the construction workers; improve the quality of the workmanship; increase the returns of the construction workers; increase employments rates for the trained youth; ensure the right skills mix in the industry; (vi) support the harmonization of regulations to facilitate reciprocation with other construction oversight bodies within the Eastern Africa region and HoA; and (vi) staff training. National Transport and Safety Authority (NTSA) 45. NTSA became operational in 2014 with the aim to coordinate all safety interventions in the country and to help reduce fatalities and injuries on the roads. NTSA is mandated by the NTSA Act, 2012 to: (a) advise and make recommendations on matters relating to road transport and safety; (b) implement policies relating to road transport and safety, (c) plan, manage and regulate the road transport sector in accordance with the provisions of the Act, and (d) ensure the provision of safe, reliable and efficient road transport service. NTSA is among the few lead road safety agencies in Africa. 46. NTSA’s role in the economy is crucial. According to NTSA’s estimates, the economic losses due to road traffic crashes in Kenya is about 5% of the GDP every year translated to an annual loss of US$ 3.1 billion or approximately KES 310 billion. This is a huge loss to the economy and needs to be managed sustainably by investing in road safety sufficiently to forestall and reduce these rising costs of road crashes to the economy. Meanwhile, the African Union (AU) enacted the UN Decade of Action along with many other African countries including Kenya. Together with the United Nations Economic Commission for Africa (UNECA), the AU has defined the African Road Safety Action Plan 2011-2020 which is built on five pillars aligned with the Safe System Approach and include: (a) road safety management; (b) safer roads and mobility; (c) safer vehicles; (d) safer road users; and (e) post-crash response. The road safety component under this project seeks to contribute to the AU Action Plan from a regional perspective but is also aimed towards meeting Kenya’s and UN decade of Action visions of halving fatalities. 47. Kenya has recently been identified by Global Road Safety Facility (GRSF) and SSATP as a potential lead country on road safety initiatives in the Region given its recent achievements. It is expected to set 113 The World Bank Horn of Africa Gateway Development Project (P161305) the stage for eventual regional benchmarking and pilot data collection for the proposed Africa Road Safety Observatory. The support provided under this project is aimed at enhancing this potential which will eventually help in setting and monitoring targets and goals in the short, medium and long term in a systematic manner. 48. Furthermore, NTSA’s road safety plan (2018) aims at reducing the current annual fatalities and injuries arising from road crashes by 6% and 4%, respectively through coordinating a multi-agency team to implement interventions in the National Road Safety Action Plan including among others public education programs targeting behavioral change and harmonizing regional road safety initiatives. Furthermore, NTSA will build capacity for public service vehicle operators, drivers and driving schools and engage actively in developing partnerships with its key service delivery partners and stakeholders including governmental bodies, NGO’s, private sector and research institutes. It will also collaborate with Universities and Research Institutions to conduct research, document and share knowledge nationally and regionally to mainstream road safety agenda. 49. Meanwhile NTSA plans to: (i) introduce legislations and strong policies for undertaking of Road Safety Audits in all phases of design, construction and operation of road infrastructure; (ii) establish formal road safety audit guidelines to address inter alia the credibility and independence of the Audit process. The current laws are deficient in this area. Specifically, the Traffic Act will be reviewed to anchor road safety audits and motor vehicle inspection services to ensure that there is synergy between the various laws and regulations governing road safety in the country. Summary Activities of the Project and the Corresponding Costs 50. The proposed project will comprise the following components and subcomponents and activities detailed in Table 2.5. Table 2.5: Project Cost Estimate (US$ million) Component/Activity Category Costs IDA1 GoK Sub-component A1: Upgrading Selected Critical Road Infrastructure (inclusive of civil works for FOC and Border Posts) 1 Upgrading Isiolo-Kula Mawe road section (77km) Works 137.00 118.10 18.90 2 Upgrading Kula Mawe-Modogashe (128km including Works 178.80 154.14 24.66 15km spur roads) 3 Upgrading Wajir-Tarbaj road section (57km including Works 70.23 60.54 9.69 2km spur road) 4 Upgrading Tarbaj-Kotulo road section (64km) Works 71.13 62.18 9.95 5 Upgrading Kotulo-Kobo road section (38km) Works 50.17 43.90 6.92 6 Upgrading Kobo-Elwak road section (26km including Works 37.00 31.90 5.10 5km spur roads) 7 Upgrading Road adjoining Meru town (8km) - Works 9.46 8.16 1.30 Beneficiary County Civil Works for Fiber-Optic Cable 8 ICT Backbone Civil works (trench, manholes and laying Works 4.50 3.88 0.62 duct) for Fiber Optic Cable for sections Modogashe- Samatar-Wajir (157km) and Elwak-Rhamu-Mandera (218km) 114 The World Bank Horn of Africa Gateway Development Project (P161305) Component/Activity Category Costs IDA1 GoK 9 Relocation of existing FOC Isiolo-Kulamawe- Works 1.05 0.91 0.14 Modogashe (205km) 10 Relocation of existing FOC Modogashe-Samatar-Wajir Works 1.11 0.96 0.15 (175km) 11 Relocation of existing FOC Wajir-Tarbaj-Kotulo-Kobo- Works 0.85 0.73 0.12 Elwak (185km) 12 Relocation of existing FOC Elwak-Rhamu (142km) Works 0.44 0.38 0.06 13 Relocation of existing FOC Rhamu-Mandera (73km) Works 0.36 0.31 0.05 14 ICT Civil works connectivity with spurs (trenching, Works 1.46 1.26 0.20 ducting, manholes & structures) to institutions and centers up to the edge of the road reserve - Isiolo- Mandera road corridor 17 ICT Backbone, Civil works connectivity (trenching, Works 0.60 0.52 0.08 ducting & manholes) Road Section: MoU county roads) 18 Implementation of Resettlement Action Plans 21.00 0.00 21.00 Sub-total works 586.16 487.21 98.95 19 Construction of supervision of upgrading Isiolo-Kula Consultancy 8.00 6.90 1.10 Mawe road section 20 Construction supervision of upgrading Kula Mawe- Consultancy 8.50 7.33 1.17 Modogashe road section 21 Construction supervision of upgrading Wajir-Tarbaj Consultancy 5.00 4.31 0.69 road section 22 Construction supervision of upgrading Tarbaj-Kotulo Consultancy 4.00 3.45 0.55 road section 23 Construction supervision of upgrading Kotulo-Kobo Consultancy 4.00 3.45 0.55 road section 24 Construction supervision of upgrading Kobo-Elwak Consultancy 4.00 3.45 0.55 road section 25 Design review &supervision of upgrading road Consultancy 0.58 0.50 0.08 adjoining Meru town 26 Construction supervision for civil works (trench, Consultancy 0.30 0.26 0.04 manholes and laying duct) for Fiber Optic Cable for sections Modogashe-Samatar-Wajir (157km); Elwak- Rhamu-Mandera (218km) and 200km spurs (limit of trenching from main line FOC to road reserve boundary) 27 Support a partnership between KeNHA and CSOs in Consultancy 6.00 5.17 0.83 implementing mitigation measures to address any GBV, SEA, social communication, GRM, and security perception survey (three CSOs, each for Isiolo, Wajir and Mandera) 28 Reviewing and updating the feasibility, detailed design Consultancy 1.20 1.03 0.17 studies for upgrading Isiolo-Modogashe road section 29 Reviewing and updating the feasibility, detailed design Consultancy 1.80 1.55 0.25 studies for upgrading Modogashe-Wajir road section 30 Reviewing and updating the feasibility, detailed design Consultancy 2.00 1.72 0.28 studies for upgrading Wajir-Kotulo road section 115 The World Bank Horn of Africa Gateway Development Project (P161305) Component/Activity Category Costs IDA1 GoK 31 Reviewing and updating the feasibility, detailed design Consultancy 1.00 0.86 0.14 studies for upgrading Kotulo-Elwak road section 32 Reviewing and updating the feasibility, detailed design Consultancy 2.00 1.72 0.28 studies for upgrading Elwak-Rhamu road section 33 Reviewing and updating the feasibility, detailed design Consultancy 1.00 0.86 0.14 studies for upgrading Rhamu-Mandera road section 34 Procurement of survey equipment and software, GIS Goods 2.00 1.72 0.28 equipment and software. 35 Purchase of equipment, goods and vehicles Goods 2.00 1.72 0.28 36 Project operating costs n/a 3.00 0.00 3.00 Sub-total goods and consultancy services 56.38 46.02 10.36 Total Sub-component A1 (KeNHA) 642.54 533.23 109.31 Sub-component A2: Improving Internet Connectivity in North Eastern Kenya and Institutional strengthening of ICTA 1 Feasibility studies and detailed design and supervision Consultancy 3.00 2.59 0.41 of a Fiber Optic Cable network including backbone along Isiolo-Mandera (740km) corridor and advisory services in the management of these facilities and services. 2 Procure and install new fiber optic cable along Isiolo- Goods / 15.00 12.93 2.07 Mandera road (740km) including installation of fiber Works spurs and rings to various institutions, and civil works for the non-KeNHA spurs and rings 3 Connecting fiber optic cable to information community Goods / 2.00 1.72 0.28 centers and advisory services in the management of Works these facilities and services 4 Consultancy services for Environmental and Social Consultancy 0.50 0.43 0.07 Impact Assessment of activities related to installation of the FOC 5 Support for the development and implementation of Consultancy 0.30 0.26 0.04 MoU between Kenya, Ethiopia and Somalia on cross- border FOC traffic, negotiations on regional back-up capacity of sub-marine cables DARE and PEACE 6 Consultancy services for carrying out baseline survey Consultancy 0.30 0.26 0.04 for Isiolo - Mandera road and review of the Business Case model 7 Institutional strengthening of ICTA Cons/Goods 1.00 0.86 0.14 8 Institutional strengthening of State Department of ICT Cons/Goods 0.60 0.52 0.08 and Innovation 9 Training Training 0.40 0.40 0.00 10 Operating cost Op 1.00 0 1.00 Total Sub-component A2 (ICTA) 24.10 19.97 4.13 Total Component A (KeNHA+ICTA) 666.64 553.20 113.44 Component B: Regional Trade and Transport Facilitation Sub-component B1: Regional Trade Facilitation by KRA 1 Support the implementation of an integrated border Consultancy 2.00 1.72 0.28 management system through harmonization of 116 The World Bank Horn of Africa Gateway Development Project (P161305) Component/Activity Category Costs IDA1 GoK customs and border management procedures including risk management and control measures 2 Institutional strengthening of Customs and Border Control Dept. to enhance coordination with other border agencies (a) Cargo tracking system along the Isiolo-Mandera Goods 0.50 0.43 0.07 corridor (b) Communication equipment Goods 0.50 0.43 0.07 (c) Institutional strengthening of the Border Control Training 1.00 1.00 0.00 Unit and training (d) Study on trade flows between Kenya, Ethiopia and Consultancy 0.58 0.496 0.08 Somalia 3 Development and implementation of a Memorandum Consultancy 0.50 0.43 0.07 of Understanding (MoU) between Kenya, Ethiopia and Somalia Customs Services 4 Support the use of ICT for revenue collection and Consultancy 0.43 0.07 facilitating clearance at the border including systems 0.50 integration and information sharing 5 Capacity building and training of KRA staff Consultancy 1.16 1.00 0.16 6 Operating cost Op 0.50 0.00 0.50 Total Sub-component B1 (KRA) 7.24 5.94 1.29 Sub-component B2: Regional Transport Facilitation by KeNHA 1 Construction of road access infrastructure at Rhamu Works 11.60 10.00 1.60 and Mandera (including bridges) 2 Construction of Customs Facilitation centers at Rhamu Works 5.80 5.00 0.80 and Mandera 3 Construction of Rhamu and Mandera OSBP Works 10.00 8.62 1.38 4 Construction of accommodation units at Rhamu and Works 4.50 3.88 0.62 Mandera 5 Construction and installation of axle load control Goods/ 10.00 8.62 1.38 infrastructure including virtual weighbridges along the works Isiolo - Mandera corridor 6 Feasibility and detailed engineering design studies of Consultancy 1.20 1.03 0.17 construction of road access infrastructure at Rhamu and Mandera (including bridges) 7 Design and construction supervision of Customs Consultancy 1.16 1.00 0.16 Facilitation centers at Rhamu and Mandera border posts 8 Design and construction supervision of OSBP at Rhamu Consultancy 2.32 2.00 0.32 and Mandera Total Sub-component B2 (KeNHA) 46.58 40.16 6.42 Total Component B (KRA+KeNHA) 53.82 46.10 7.72 Component/Activity Category Costs IDA GoK Component C: Improve Access to Selected Basic Social Services at Designated location along the road corridor 1 Carrying out a need assessment of social infrastructure Consultancy 0.50 0.43 0.07 and services to support the host communities 117 The World Bank Horn of Africa Gateway Development Project (P161305) Component/Activity Category Costs IDA1 GoK 2 Engineering designs and support the implementation Consultancy 4.00 3.45 0.55 of the identified social infrastructure and services at selected locations to assist the host communities including construction supervision of social infrastructure 3 KeNHA to identify and implement the socio-economic Works/ 32.48 28.00 4.48 infrastructure and delivery services along the corridor Services Total Component C (KeNHA) 36.98 31.88 5.10 Component D: Institutional Strengthening of selected Transport and Related Institutions Subcomponent D1: Strengthening the capacity of KeNHA and associated Institutions 1 Support a partnership between KeNHA and the Cons/works 7.00 6.03 0.97 University of Nairobi in (i) designing and offering / goods training on social safeguards in projects; (ii) training of trainers as part of building local capacity in this area; (iii) construction training facilities for the Center of Land Acquisition and Resettlement Studies at the University of Nairobi 2 Consultancy to develop modalities on management, Consultancy 1.00 0.86 0.14 operationalization and maintenance arrangements for socio-economic infrastructure developed 3 Consultancy to identify and supervise construction of Consultancy 3.00 2.59 0.41 socio-economic infrastructure and delivery services along the corridor 4 Consultancy Services to assess KeNHA’s Environmental Consultancy 0.10 0.09 0.01 & Social Safeguards Capacity to Monitor and Manage Environment & Social Safeguards risks in road projects 5 Consultancy Services for the Implementation of the Consultancy 1.16 1.00 0.16 Resettlement Action Plans and Land Surveying. 6 Consultancy Services to develop an Environmental, Consultancy 0.58 0.50 0.08 Social, Health and Safety Management System 7 Short term Environment, Social, Occupational Health & Consultancy 0.40 0.35 0.05 Safety, GBV & Resettlement Specialists (Technical Assistance) 8 Consultancy services for M&E (accredited university) 3.60 3.11 0.49 9 Training for KeNHA Training 2.00 2.00 0.00 10 Training for multiagency implementation team Training 0.50 0.50 0.00 11 Training for National Treasury (US$500,000); State Law Training 1.80 1.80 0.00 Office (US$500,000); KeNAO (US$300,000); and PPOA and PPARB (US$500,000) 12 Provision of secure aerial and ground transport for Non-Cons 1.50 1.29 0.21 conflict-prone areas serv/Goods 13 COVID pandemic mitigation measures Goods/ 0.50 0.43 0.07 Training 14 Office complex for road sector institutions: work Works/ 3.48 3.00 0.48 environment and green energy improvements Goods 118 The World Bank Horn of Africa Gateway Development Project (P161305) Component/Activity Category Costs IDA1 GoK 15 Coordination with beneficiary counties in the Goods/ 3.50 3.02 0.48 implementation of MoU and security management Consultancy plan 16 Strengthening the capacity of KeNHA in quality Consultancy 2.00 1.72 0.28 assurance and quality control, contract management, / Goods value engineering, safeguards and procurement management 17 Preparation of future projects including feasibility and Consultancy 4.00 3.45 0.55 detailed design of Garissa-Liboi road, design reviews and technical assistance. 18 Support to FCDC on community outreach, technical Cons/Goods 2.32 2.00 0.32 assistance and advisory services, monitoring and reporting facilities 19 Biodiversity Assessment Study (Isiolo-Mandera road) Consultancy 0.20 0.18 0.02 20 Strengthening the capacity of Directorate of Consultancy 1.39 1.20 0.19 Occupational Safety and Health (DOSH) Services in / Goods providing oversight through development of an ICT based OSH management information system; workplace Safety & Health; training of OSH officers. 21 Institutional strengthening of NLC: (i) assess NLC's Consultancy 2.90 2.50 0.40 institutional capacity to execute its mandate; (ii) enhance internal capacity and technical assistance; (iii) training Total Sub-component D1 (KeNHA) 42.93 37.63 5.30 Subcomponent D2: Institutional strengthening of the SDoI and associated Institutions 1 Support to the State Department of Infrastructure on Consultancy 3.48 3.00 0.48 enhancing project management capacity, oversight of maintenance management and engineering capabilities in the transport sector 2 TA for transforming MTRD a SAGA) including (i) start- Goods/Cons 6.96 6.00 0.96 up activities; (ii) carrying out mapping of road construction material sites in the country; (iii) enhancing the capacity of selected material testing and research laboratories; and (v) training; 3 TA for transforming MTD into a SAGA including (i) Goods/Cons 4.64 4.00 0.64 develop a construction equipment management; (ii) support local construction industry; (iii) develop management information systems; (iv) replacement of selected strategic and critical aged equipment; and (v) training 4 Support to KIHBT introduction of smart classrooms Cons/Goods 2.32 2.00 0.32 concept by enhancing use of technology 5 Development of a Gender Action Plan (GAP) in the transport sector 0.12 0.10 0.02 (by SDoI) 6 Institutional strengthening of SDoPW incl. building Cons/Goods 3.48 3.00 0.48 Information Modelling (BIM) technology and Project and Document Management Systems (PDMS) 119 The World Bank Horn of Africa Gateway Development Project (P161305) Component/Activity Category Costs IDA1 GoK 7 Institutional strengthening of NCA incl. preparing a Cons/Goods 5.80 5.00 0.8 construction industry dev. policy and a framework for coordinating training in the construction industry; accreditation of the informally trained construction workers, dev. a new curriculum for 59 identified trades; and training. 8 Institutional strengthening of EBK -internship program; Cons/Goods 7.54 6.50 1.04 strategic plan update; gap analysis of engineering education, training and practice; update strategic plan; 9 TA to KRB to (i) develop Roads network-wide Cons/Goods 9.28 8.00 1.28 information management system; (ii) establishment of Roads Spatial Data Infrastructure framework; (iii) implementation of the Constitution 2010 on management of the road network in the country; (iv) development of a national rural roads program; and (v) training 10 Technical Assistance and institutional strengthening of Cons/Goods 3.00 2.59 0.41 KeRRA 11 Technical Assistance and institutional strengthening of Cons/Goods 2.32 2.00 0.32 KURA 12 Coordination of Project implementation activities Cons/Goods 3.48 3.00 0.48 (Project management Office) including monitoring and evaluation of progress achieved in the execution of the Project 13 Operating Cost Op 0.50 0.00 0.50 Total Sub-component D2 (SDoI) 52.92 45.19 7.73 Subcomponent D3: Institutional strengthening of the SDoT and associated Institutions 1 TA to support SDoT to oversee all modes of transport Cons/Goods 3.48 3.00 0.48 (air, roads, railways and maritime) and integration with the regional transport modes 2 Finalize the development. of a 50-year integrated Cons/Goods 4.64 4.00 0.64 multi-modal transport masterplan; feasibility study on establishing Roadside Stations (RSS) and a dry port along Isiolo-Mandera corridor; study on driver insurance cover policy; review of the Traffic Act 3 Support KRC to set up a Commuter Rail Unit, SGR Unit, Cons/Goods 4.06 3.50 0.56 and Training and Capacity building for KRC to oversee the management of SGR operations 4 Strengthen the Marine Training School in Kisumu Cons/Goods 1.74 1.50 0.24 under KRC 5 Operating Cost Op 0.50 0.00 0.50 Total Sub-component D3 (SDoT) 14.42 12.00 2.42 Total MoTIHUDPW (Sub-components D1, 2 &3) 110.27 94.82 15.45 Sub-component D4 - Improvement of Road Safety through Compliance and use of Technology (NTSA) 120 The World Bank Horn of Africa Gateway Development Project (P161305) Component/Activity Category Costs IDA1 GoK 1 Improve road safety by strengthening NTSA to (i) Consultancy 27.84 24.00 3.84 enhance road safety management system; (ii) develop / Goods an integrated smart road system; (ii) automate selected Motor Vehicle Inspection Centers; (iii) build institutional capacity in monitoring, evaluation and reporting and training; and (iv) mainstream road safety audits; and (vii) training 2 Operating Cost 0.50 0.00 0.50 Total Sub-component D4 (NTSA) 28.34 24.00 4.34 Total Component D (MoTIHUDPW+NTSA) 138.61 118.82 19.79 Grand Total 896.05 750.00 146.05 Of which total Contingency 85.98 74.12 11.86 Net of Contingency 810.07 675.88 134.19 Percent Contingency 9.6 9.9 8.1 Financing Plan IDA contribution excluding price and physical contingencies 675.87 Price and physical contingencies 74.12 Total IDA contribution including price and physical contingencies 750.00 GoK contribution 146.05 Of which; (a) RAP implementation 21.00 (b) VAT (16 percent of the costs) 119.05 (c) Incremental Operating cost 6.00 Total Project Cost 896.05 Allocation by Implementing Agency Total IDA GoK % IDA KeNHA 769.03 642.89 126.14 85.72 ICTA 24.10 19.97 4.13 2.66 KRA 7.24 5.95 1.29 0.79 SDoI 52.92 45.19 7.73 6.03 SDoT 14.42 12.00 2.42 1.60 NTSA 28.34 24.00 4.34 3.20 Total 896.05 750.00 146.05 100.00 121 The World Bank Horn of Africa Gateway Development Project (P161305) Contingencies by Component Component/Subcomponent Total (IDA+GoK) Total IDA GoK 1 Subcomponent A1 (KeNHA) 74.96 64.62 10.34 2 Subcomponent A2 (ICTA) 2.36 2.04 0.33 Component A (KeNHA+ICTA) 77.32 66.65 10.66 3 Subcomponent B1 (KRA) 0.00 0.00 0.00 4 Subcomponent B2 (KeNHA) 4.10 3.53 0.56 Component B (KRA+KeNHA) 4.10 3.53 0.56 5 Component C (KeNHA) 4.17 3.60 0.58 6 Subcomponent D1 (KeNHA) 0.40 0.34 0.05 7 Subcomponent D2 (SDoI) 0.00 0.00 0.00 8 Subcomponent D3 (SDoT) 0.00 0.00 0.00 9 Subcomponent D4 (NTSA) 0.00 0.00 0.00 Component D (MoTIHUDPW+NTSA 0.40 0.34 0.05 Grand total 85.98 74.12 11.86 Note: 1: IDA costs exclude VAT 122 The World Bank Horn of Africa Gateway Development Project (P161305) ANNEX 3: ECONOMIC ANALYSIS COUNTRY: Kenya Horn of Africa Gateway Development Project Methodology and Assumptions 1. Economic analysis was undertaken based on a Cost Benefit Analysis using the Highway Development and Management (HDM-4) model version 2.10. The HDM-4 allows for modelling of costs and benefits over the whole life cycle of a project, which in this case was taken as 20 years after opening of the road to traffic. The start of construction was taken as year 2021 for all road sections. 2. The road corridor considered under this project measures 522km and was divided into eight sections for purposes of design and construction. These sections include; (i) Isiolo – Kulamawe; (ii) Kulamawe – Modogashe; (iii) Modogashe – Samatar; (iv) Samatar – Wajir; (v) Wajir – Tarbaj; (vi) Tarbaj – Kotulo; (vii) Kotulo – Kobo; and (viii) Kobo – Elwak. Sectional analysis was also undertaken assuming the road corridor will be constructed in stages (Isiolo to Wajir from 2021 to 2023 and Wajir to Elwak from 2021 to 2024) with each section having its construction period. 3. The HDM-4 model predicts the benefits by considering the interactions between traffic volume and composition, road condition, proposed engineering interventions and their costs, road geometric characteristics, vehicle operating costs (VOC), and time savings for the “with” and “without” project scenarios. The measures of project worth used were the Net Present Value (NPV), Economic Internal Rate of Return (EIRR), and Benefit-Cost (B/C) Ratio. The economic analysis was undertaken at 12 percent discount rate, and a residual project value of 30 percent of the initial capital investment was assumed and credited as a benefit to the whole project in the final year of evaluation. 4. The calibrated and configured HDM-4 workspace for Kenya was used to compute the economic benefits for the “with” and “without” project scenarios. Accident cost savings, which are benefits resulting from the road improvement, were not taken into account as the profile and frequency of accidents could not be determined from the available data. Table 3.2 below is a summary of basic and economic vehicle fleet characteristics used in the analysis to determine the savings in vehicle operating costs and time savings. 123 The World Bank Horn of Africa Gateway Development Project (P161305) Existing Pavement Structure and Road Conditions 5. Table 3.1 below shows the existing road conditions for the respective road sections; Table 3.1. Existing road conditions No. Road Section Name Road Length (Km) Current Condition 1 Isiolo - Kula Mawe 77 Existing road section varies between 40m and 60m wide. The entire road section of 77km is unpaved except for a 2km stretch leading to Isiolo Barracks which is paved. The road sections near Isiolo lie on a rolling terrain whereas the sections near Kula Mawe lie on a flat/gentle terrain. The road surface was in fair condition at the time of survey while the drainage structures include several pipe and box culverts, concrete drifts and one single lane/ double span bridge. These structures will all be replaced during construction. 2 Kula Mawe - 113 plus 15km The existing road section varies between 40m and 60m wide. Modogashe spur roads The entire road length measuring 113km plus 15km is unpaved. The road lies on a flat/gentle terrain with the width varying between 7m and 11m. The road surface in most sections was fair at the time of survey having been graveled in the recent past. However, the low-lying sections had deep sand deposits due to high levels of erosion making it difficult for motorists to maneuver such sections. The drainage structures along the road include pipe and box culverts, and drifts. Majority of the culverts were blocked with debris. 3 Modogashe - Samatar 90 The existing road corridor is 60m wide; The entire road length is 90km and unpaved; The road lies on a flat/gentle terrain with the width varying between 5.7m and 7.5m. The section from Modogashe to Habaswein has an embankment ranging between 0.5m and 1.0m and appears to have been recently graveled whereas the section between Habaswein and Samatar has no embankment and no observable evidence of any recent maintenance activities. The road surface is generally in poor condition with severe transverse corrugations in most sections. Drainage structures include pipe culverts, box culverts, drifts and one bridge. The culverts are generally in good condition, but the bridge is in poor condition. 4 Samatar - Wajir 67 The existing road corridor is 60m wide; the road is 67km and unpaved except for a few sections in Wajir Town which are paved. The corridor width in built up areas such as Wajir town varies between30m and 40m. The road lies on a gentle/flat terrain and the road width varies from 6m to 7m. Drainage structures mainly comprise of pipe culverts and one drift. The road surface condition is fair having been graveled in 124 The World Bank Horn of Africa Gateway Development Project (P161305) No. Road Section Name Road Length (Km) Current Condition the recent parts and pipe culverts are in good condition except for the broken head walls and wing walls. 5 Wajir - Tarbaj 55 The existing road corridor is 60m wide The road profile is generally flat, rising slightly at 250m (a.m.s.l.) to 411m at Tarbaj then to Kotulo at approximately 350m. Road traverse semi-arid area of flat terrain up to Wargadud, followed by a rolling terrain onwards The existing road is mostly to gravel standards except for a few km in town centers which have since been paved by the County Government for instance 5.2km of paved road section in Wajir town. The soils are mostly sandy. 6 Tarbaj - Kotulo 64 The existing road corridor is 60m wide. The road profile is generally flat, rising slightly at 250m (a.m.s.l.) to 411m at Tarbaj then to Kotulo at approx. 350m. Road traverse semi-arid area of flat terrain up to Wargadud, followed by a rolling terrain onwards The existing road is mostly to gravel standards except for a few km in town centers which have since been paved by the County Government for instance 5.2km of paved road section in Wajir town The soils are mostly sandy 7 Kotulo - Kobo 38 The existing road corridor is 60m wide The road surface is to gravel standards Drainage structures mainly comprise of pipe culverts This section of road is heavily flooded and impassable during the rains 8 Kobo - Elwak 27 The existing road corridor is 60m wide The road surface is to gravel standards Drainage structures mainly comprise of pipe culverts This section of road is heavily flooded and impassable during the rains 125 The World Bank Horn of Africa Gateway Development Project (P161305) Table 3.2: Basic and Economic Vehicle Characteristics Vehicle Fleet - Basic 4 Pick-up Mini-bus Small Large Light Medium Heavy Articulated Vehicle Characteristics Motorcycles Car Wheel Utility (Matatu) Bus Bus Truck Truck Truck Trucks Drive Service Life (years) 5 10 10 8 6 10 8 10 10 10 10 Km driven per year 10,000 20,000 25,000 45,000 85,000 75,000 100,000 55,000 75,000 75,000 75,000 Hours driven per year 2,000 370 425 1,000 1,850 1,750 2,200 1,400 2,000 2,000 2,000 Number of Passengers 1 5 5 2 12 25 40 0 0 0 0 Gross vehicle weight (tons) 0.2 1.5 2.2 2.5 6.5 6.5 11.0 4.0 10.5 24.5 42.3 ESA loading factor 0.0 0.0 0.0 0.0 0.1 0.1 1.1 1.5 5.0 9.1 11.5 Private Use (%) 50.0 95.0 50.0 50.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Work Related Trips (%) 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 0.0 0.0 0.0 Vehicle Fleet – Economic New Vehicle Price (US$) 1,153 18,088 54,119 39,301 49,770 46,591 113,419 28,992 47,838 95,675 103,407 Replace Tyre (US$) 29 76 124 155 338 359 544 124 416 544 544 Fuel (US$/ litre) 0.82 0.82 0.66 0.66 0.66 0.66 0.66 0.66 0.66 0.66 0.66 Lubricant Oil (US$/ litre) 3.88 3.88 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 4.02 Maintenance Labour (US$/ hr) 0.97 0.97 0.97 0.97 2.56 2.56 2.56 2.56 2.56 2.56 2.56 Crew Wages (US$/crew-hr) 0.00 0.00 0.00 0.00 0.00 1.41 3.15 2.90 3.06 3.06 3.54 Annual Overhead (US$) 826 7,321 24,741 10,531 17,030 11,645 26,103 10,749 11,988 11,988 16,506 Passenger Work Time 2.35 2.35 2.35 2.35 2.35 2.35 2.35 0.00 0.00 0.00 0.00 (US$/pa-hr) Passenger Non-Work (US$/pa- 0.70 0.70 0.70 0.70 0.70 0.70 0.70 0.00 0.00 0.00 0.00 hr) Cargo Holding (US$/hr) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.70 4.70 4.70 4.70 Annual Interest rate (%) 12 12 12 12 12 12 12 12 12 12 12 126 The World Bank Horn of Africa Gateway Development Project (P161305) Traffic Analysis 6. Traffic data used in the economic analysis was collated from traffic reports from various sections along the corridor during the detailed design phases which were undertaken in 2017 and 2018. Table 3.3 gives a summary of the base year AADTs of the road corridor by section. 7. Traffic projection was undertaken using traffic growth rates derived from historical and projected growth rates of the country’s: GDP; population; income per capita; fuel sales; vehicle population; income, elasticity of passengers; economic activities in the project area; and previous studies undertaken for the Isiolo – Elwak road corridor. The adopted traffic growth rates for each road section for the first 10 years after the road is open to traffic are summarized in Table 3.3 below. Table 3.3: Base Year AADTs for the Isiolo – Elwak Road Corridor (2017 and 2018) Medium Truck 4 Wheel Drive Pick-up Utility Motorcycles Heavy Truck Articulated Light Truck AADT Year Large Bus Road Sections Small Bus (Matatu) Mini-bus Trucks Total Car 1 Isiolo - 154 17 39 30 0 0 8 1 63 12 1 325 2017 Kulamawe 2 Kulamawe - 127 167 71 30 0 0 10 3 74 25 1 508 2017 Modogashe 3 Modogashe - 100 94 47 29 1 0 13 5 28 70 31 418 2017 Samatar 4 Samatar - 48 80 43 16 13 1 26 1 46 49 28 351 2018 Wajir 5 Wajir-Tarbaj 253 25 70 85 31 7 20 3 31 74 42 641 2018 6 Tarbaj - 253 25 70 85 31 7 20 3 31 74 42 641 2018 Kotulo 7 Kotulo - Kobo 265 25 25 44 12 1 14 10 17 22 2 437 2018 8 Kobo - Elwak 265 25 25 44 12 1 14 10 17 22 2 437 2018 Generated Traffic 8. Generated traffic was included at the year of opening i.e. in 2024 for the section between Isiolo – Kotulo, and in 2023 for Kotulo – Elwak. It should be noted that for the section between Kulamawe – Modogashe actual generated traffic volumes have been used as opposed to generated traffic rates adopted for the other sections. In addition, generated traffic from the LAPSSET 27 project have also been 27 The LAPSSET Corridor is a regional flagship project intended to provide transport and logistics infrastructure between the Eastern African Countries of Kenya, Ethiopia and South Sudan. The economic corridor will consist of road, railway, pipelines, power transmission and other projects. The HoAGDP and LAPSSET corridors have a common road section which is between Isiolo - Kulamawe. Implementation of LAPSSET is currently underway, and the section between Lamu and Isiolo is already under procurement. 127 The World Bank Horn of Africa Gateway Development Project (P161305) included in the generated traffic estimates from 2026 and will primarily affect the Isiolo – Kulamawe road section of the HoAGDP corridor. Table 3.4 gives a summary of the expected generated traffic for each road section. Traffic Growth Rates and Projections 9. Traffic projections were undertaken using traffic growth rates derived from historical and projected growth rates of the country’s GDP, population, per capita income, fuel sales, vehicle population, transport demand elasticities, economic activities in the project area and historical traffic data from previous studies within the area. The adopted traffic growth rates for each road section are summarized in Table 3.5 below. 10. The highest traffic growth rates for personal vehicles (motorcycles, cars, 4WDs and pick-ups) and public transport vehicles (matatus, small buses and large buses) occurs in the section between Wajir – Elwak. For trucks category, the highest growth rate occurs between Modogashe – Wajir. This may be attributed to the increased economic activities on this section as compared to other sections arising from a combination of the effect of upgrading Isiolo – Wajir road and the construction of the Garissa – Modogashe road. 11. Based on the adopted traffic growth rates shown below, the normal and generated traffic was forecasted to twenty years. The growth rates were reduced by 40 percent from year 10 to 20 to reflect the expected decline of traffic increase due to reducing levels of service and possible opening of alternative road links 128 The World Bank Horn of Africa Gateway Development Project (P161305) Table 3.4: Generated Traffic Kulamawe - Modogashe - Samatar - Wajir - Kotulo- Isiolo - Kulamawe Modogashe Samatar Wajir Kotulo Elwak Vehicle Type LAPSSET 2026 2024 (%) 2024 (ADT) 2024 (%) 2024 (%) 2024 (%) 2023 (%) (ADT) Motorcycles 89% - 137 89% 88% 89% 89% - Cars 94% 6 94% 88% 94% 94% - 4-WDs 96% 51 96% 92% 96% 96% - Pick-Ups 78% 24 78% 55% 78% 78% - Minibus (Matatu) 7% 20 7% 57% 7% 7% - Small Bus 12% 34 12% 19% 12% 12% - Large Bus 73% 62 73% 79% 73% 73% Light Trucks 62% 302 11 62% 25% 62% 62% Medium Trucks 57% 419 16 57% 67% 57% 57% Heavy Trucks 90% 213 18 90% 89% 90% 90% Articulated Trucks 91% 574 7 91% 92% 91% 91% 129 The World Bank Horn of Africa Gateway Development Project (P161305) Table 3.5: Adopted Traffic Growth Rates Modogashe – Samatar - Isiolo – Kulamawe Kulamawe - Modogashe Wajir Wajir – Kotulo - Elwak 40% Reduction in growth 40% Reduction in growth 40% Reduction in growth 40% Reduction in growth (During Construction) (During Construction) (During Construction) (During Construction) Medium Growth Medium Growth Medium Growth Medium Growth (10-20 years) (10-20 years) (10-20 years) (10-20 years) Low Growth Low Growth Low Growth Low Growth (0-10 years) (0-10 years) (0-10 years) (0-10 years) Category Motorcycles 5.1 6.7 4.0 5.1 6.4 3.8 3.9 6.4 3.8 3.5 7.2 4.3 Cars 5.1 6.7 4.0 5.1 6.4 3.8 3.5 6.4 3.8 3.5 7.2 4.3 4 Wheel Drive 5.1 6.7 4.0 5.1 6.4 3.8 3.5 6.4 3.8 3.5 7.2 4.3 Pick-up Utility 5.1 6.7 4.0 5.1 6.4 3.8 3.5 6.4 3.8 3.5 7.2 4.3 Mini-bus (Matatu) 4.2 5.5 3.3 5.2 5.2 3.1 3.5 5.3 3.2 3.5 6.0 3.6 Small Bus 4.2 5.5 3.3 5.2 5.2 3.1 3.5 5.3 3.2 3.5 6.0 3.6 Large Bus 4.2 5.5 3.3 5.2 5.2 3.1 3.5 5.3 3.2 3.5 6.0 3.6 Light Truck 3.7 6.4 3.8 3.7 4.6 2.8 2.9 7.8 4.7 4.0 6.9 4.1 Medium Truck 3.7 6.4 3.8 3.7 4.6 2.8 2.9 7.8 4.7 4.0 6.9 4.1 Heavy Truck 3.7 6.4 3.8 3.7 4.6 2.8 2.9 7.8 4.7 4.0 6.9 4.1 Articulated Trucks 3.7 6.4 3.8 3.7 4.6 2.8 2.9 7.8 4.7 4.0 6.9 4.1 130 The World Bank Horn of Africa Gateway Development Project (P161305) Work Standards 12. The project alternatives that were considered in the analysis include: (i) “Without project”: Base Case – Maintaining the existing road; and, (ii) “With project”: Improvement of the road by upgrading to bitumen standards 13. The maintenance work standards for the “without project” is to undertake the following for bitumen sealed sections: (i) Overlay when IRI ≥ 9, mean rut depth ≥ 20mm or at interval of 7 years; (ii) Drainage works every year i.e. cleaning side ditches, culverts etc.; (iii) Patching of potholes at 5 no./km; and, (iv) Off-carriageway routine miscellaneous works every year (e.g. bush clearing) 14. And for the unsealed sections: (i) Heavy Grading every 180 days; (ii) Spot gravelling when gravel thickness ≤ 100mm; and (iii) Off-carriageway routine miscellaneous works (e.g. bush clearing) every year. 15. The work standards for the “with project” alternative involves upgrading of the project road in accordance with the engineering designs at the estimated financial and economic costs, shown below, and subsequent routine and periodic maintenance interventions. Proposed Pavement Structures 16. Appropriate pavement structures were proposed for the various sections based on the subgrade soil strength class, traffic loading, and types of materials that are locally available. Details of the pavement structures are summarized in Table 3.6 below. Table 3.6: Pavement Structures Upper Surfacing Base Sub-Base Lower subgrade subgrade Section Name Thickness (mm) Thickness Thickness Thickness (mm) Thickness (mm) (mm) (mm) Isiolo - Kulamawe 75 mm AC 150 mm CSG 175 mm CIG 300mm S5 - 75 mm AC 150 mm CSG 175 mm CIG 300mm S5 - Kulamawe - Modogashe 50 mm AC 150 mm CSG 200 mm CIG 350mm S5 300mm S3 Modogashe – Samatar 50 mm AC 150 mm CSG 200 mm CIG 350mm S5 300mm S3 Samatar - Wajir 75 mm AC 150 mm CSG 175 mm CIG 300mm S3 - Wajir - Tarbaj - Kotulo 75 mm AC 150 mm CSG 225 mm CIG 300mm S3 - Kotulo - Elwak Definition: AC: Asphalt Concrete; CIGCS: Cement Improved Graded Crushed Stone; CIG: Cement Improved Gravel; CSG: Cement Stabilized Gravel; and S3: Subgrade Soil Class of CBR between 15 and 30 percent. 131 The World Bank Horn of Africa Gateway Development Project (P161305) Financial and Economic Costs and Benefits 17. The economic costs taken into account were the road agency costs in the “with” and “without” project scenarios, which included both the capital and maintenance costs as well as carbon emission shadow costs. It was assumed that the road corridor will be open to traffic in sections from 2023 to 2024. The project cost build-up considered the project site conditions, availability and transportation cost of materials, labor and equipment costs. Financial capital and maintenance costs were converted into economic costs by applying a standard conversion factor of 0.85. Table 3.7 below gives a summary of estimated financial and economic capital costs for each road section. Table 3.6: Summary of Base Case Costs Cost Per Km (US$) Road Linear Financial Cost Economic Cost Section Name Length (Km) (US$) (US$) Isiolo – Kulamawe 1,792,207.79 77 138,000,000.0 117,300,000.0 Kulamawe - Modogashe 1,584,070.80 113 179,000,000.0 152,150,000.0 Modogashe - Samatar 1,355,555.56 90 122,000,000.0 103,700,000.0 Samatar – Wajir 1,179,104.48 67 79,000,000.0 67,150,000.0 Wajir – Tarbaj 1,286,909.09 55 70,780,000.0 60,163,000.0 Tarbaj – Kotulo 1,128,906.25 64 72,250,000.0 61,412,500.0 Kotulo – Kobo 1,347,368.42 38 51,200,000.0 43,520,000.0 Kobo – Elwak 1,775,714.29 21 37,290,000.0 31,696,500.0 Total 525 749,520,000.0 637,092,000.0 18. The primary benefits of the project are expected to be derived from endogenous benefits. Endogenous benefits will consist of reductions in road user costs, comprising of vehicle operating costs and passenger and cargo time costs, as a result of improved road condition and reduced travel times and higher average travel speeds for the normal, diverted and generated traffic. 19. Disruption Costs: Reduction in traffic disruption costs during the wet season were also included as road user benefits. The section between Modogashe – Wajir suffers frequent disruptions due to flash floods which prevents traffic from using the road for days at a time. The disruptions usually lead to huge economic loses as goods and services cannot be transported to and from Wajir and other towns north of the affected area. The cost of traffic disruption was assumed to be equal to the monetary value of the transported goods and services along the road as determined from the traffic studies (traffic volumes, passenger occupancy rates, cargo types and trip frequencies). The unit cost of goods was determined from statistical data obtained from consumer and market price indices 28; while the unit cost of the passenger times was adopted from the calibrated HDM-4 workspace input data (see Table 3.2 above). It was therefore estimated that upgrading the project road would generate benefits valued at US$2,715,347. 28Consumer Price Indices published by the Kenya National Bureau of Statistics in December 2019; while Market Price Index Survey Results published by the Public Procurement Regulatory Authority in September 2019. 132 The World Bank Horn of Africa Gateway Development Project (P161305) Economic Analysis Results 20. The NPV and EIRR for the entire corridor has been calculated for three (3) alternative scenarios; (i) “Without” carbon cost; (ii) “With” carbon cost at low shadow price; and, (iii) “With” carbon cost at high shadow price. The CO2 emission cost was determined by multiplying the net emissions “With” and “Without” the project with the shadow price of CO2 per ton. The shadow price of CO2 per ton in the first year of analysis (2020) was taken as US$40 and US$80 for low and high prices, respectively, and the prices were assumed to grow at the rate of 2.25 percent 29 per annum over the analysis period. 21. The GHG emissions for the whole corridor and CO2 emissions for each road section are given in Tables 3.7 and 3.8. Table 3.7: GHG Emissions for the Whole Corridor (tons) Scenario Hydrocar Carbon Nitrous Sulphur Carbon Particulate Lead Total bon HC monoxid oxide dioxide dioxide CO2 s Par Pb Emissions e CO NOx SO2 Without Project (Gross 9,925 16,093 29,935 1,511 2,511,816 6,483 76 2,575,840 emissions) With Project (Gross 22,959 39,824 63,587 3,271 5,077,469 13,990 118 5,221,216 Emissions) Net Emissions 13,033 23,731 33,652 1,760 2,565,652 7,506 42 2,645,377 Net Annual Average 1,369.0 949.3 1,346.1 70.4 102,626.1 300.2 1.7 Emissions Net Annual Median 567.4 1,017.7 1,482.7 77.8 112,616.6 331.7 1.7 Emissions 29 World Bank Guidance note on shadow price of carbon in economic analysis Nov 12, 2017. 133 The World Bank Horn of Africa Gateway Development Project (P161305) Table 3.8: GHG Emissions by Road Section (tons) Road Sections Scenario Hydrocarbon Carbon Nitrous Sulphur Carbon dioxide Particulates Lead Pb Total Emissions HC monoxide CO oxide dioxide SO2 CO2 Par NOx Isiolo - Base Case 756.4 1,563.9 1,745.9 85.5 149,183.6 369.0 5.5 153,709.7 Kulamawe With Project 6,744.1 8,967.1 21,112.5 1,149.3 1,566,316.4 4,869.6 11.2 1,609,170.2 Net Emissions 5,987.7 7,403.2 19,366.6 1,063.8 1,417,132.9 4,500.6 5.7 1,455,460.5 Kulamawe - Base Case 1,478.2 2,714.4 4,647.4 210.1 444,934.6 913.9 23.6 454,922.2 Modogashe With Project 2,345.6 4,636.5 6,530.4 311.3 573,559.3 1,355.4 23.1 588,761.6 Net Emissions 867.4 1,922.1 1,883.0 101.3 128,624.7 441.5 -0.5 133,839.4 Modogashe - Base Case 1,964.0 2,603.1 6,531.3 342.7 518,706.6 1,460.6 10.2 531,618.6 Samatar With Project 3,219.8 5,178.7 9,714.4 498.4 776,252.0 2,128.5 18.1 797,010.0 Net Emissions 1,255.8 2,575.6 3,183.1 155.7 257,545.3 667.9 8.0 265,391.4 Samatar - Base Case 1,291.6 1,565.3 4,533.9 239.2 362,197.0 1,021.6 6.9 370,855.5 Wajir With Project 1,932.7 2,748.3 6,370.6 331.9 505,950.8 1,418.6 10.2 518,763.2 Net Emissions 641.2 1,183.0 1,836.7 92.7 143,753.8 397.0 3.3 147,907.7 Wajir - Tarbaj Base Case 1,690.2 2,686.6 5,043.1 259.8 411,956.9 1,112.0 10.4 422,759.0 With Project 3,236.7 6,279.2 8,059.2 406.0 659,365.5 1,741.7 19.0 679,107.2 Net Emissions 1,546.4 3,592.7 3,016.1 146.2 247,408.65 629.7 8.6 256,348.2 Tarbaj - Kotulo Base Case 1,966.8 3,126.2 5,868.3 302.3 479,367.9 1,294.0 12.1 491,937.7 With Project 3,766.3 7,306.7 9,378.0 472.4 767,261.7 2,026.7 22.0 790,233.8 Net Emissions 1,799.5 4,180.6 3,509.7 170.1 287,893.71 732.7 10.0 298,296.2 Kotulo - Kobo Base Case 501.2 1,180.8 1,008.1 46.0 93,692.2 201.1 4.9 96,634.1 With Project 1,103.6 3,032.1 1,559.8 65.3 147,338.9 289.2 9.1 153,398.0 Net Emissions 602.4 1,851.3 551.7 19.4 53,646.63 88.1 4.3 56,763.8 Kobo - Elwak Base Case 277.0 652.5 557.1 25.4 51,777.3 111.1 2.7 53,403.0 With Project 609.9 1,675.6 862.0 36.1 81,424.1 159.8 5.1 84,772.6 Net Emissions 332.9 1,023.1 304.9 10.7 29,646.81 48.7 2.4 31,369.5 134 The World Bank Horn of Africa Gateway Development Project (P161305) The total economic costs of CO2 “with” and “without” project, which were added as project costs, are included in Table 3.9. Table 3.9: CO2 Economic Costs (US$ Million) Scenario Low Price of CO2 High Price of CO2 Without Project 141.63 290.71 With Project 287.99 576.46 Net Cost (USD Million) 146.36 285.74 22. The economic analysis results for the whole project, and by road sections, are presented in Tables 3.10 and 3.11 below, respectively. Table 3.10: Economic Indicators for the Project With Project (without CO2 With Project (with CO2 With Project (with CO2 Emissions cost) Emissions Cost at Low Price) Cost at High Price) NPV (USD B/C NPV (USD B/C NPV (USD EIRR % EIRR % EIRR % B/C Ratio Millions) Ratio Millions) Ratio Millions) 230.4 16.1 1.38 180.7 15.2 1.38 132.2 14.40 1.38 23. Results in Table 3.10 above shows that upgrading the road is economically viable in all scenarios considered. 24. When the project is analyzed by road sections, all the road sections are economically viable in all scenarios considered except for section 1 in the ‘With CO2 Emissions’ alternative. This may be attributed to the high proportion of truck traffic as compared to the other road sections as a result of the LAPSSET project forecasts. Trucks have significantly higher emissions and hence higher economic costs. 135 The World Bank Horn of Africa Gateway Development Project (P161305) Table 3.11: Economic Indicators by Road Section - Modogashe Modogashe - 2. Kulamawe 4. Samatar - Kulamawe 7. Kotulo - 6. Tarbaj - 5. Wajir - 1. Isiolo - 8. Kobo - Samatar Kotulo Tarbaj Elwak Wajir Kobo Scenario 3. NPV (USD Million) 27.87 37.42 37.18 51.94 14.96 24.48 12.31 1.61 Projec ative - Altern EIRR % 15.3 15.5 16.8 21.9 14.8 16.2 15.9 12.8 With B/C Ratio 1.35 1.38 1.26 1.73 1.31 1.49 1.41 1.07 t NPV (USD Million) 7.48 34.48 32.05 48.62 9.94 18.63 11.79 1.33 Emissi ative - Altern EIRR % 12.9 15.2 16.1 21.2 13.8 15.2 15.7 12.6 With CO2 ons B/C Ratio 1.35 1.38 1.26 1.73 1.31 1.49 1.41 1.07 NPV (USD Million) -12.47 31.60 27.03 45.37 5.02 12.91 11.28 1.05 Emissi ative - Altern EIRR % 10.5 14.9 15.5 20.6 12.9 14.2 15.6 12.5 With CO2 ons B/C Ratio 1.35 1.38 1.26 1.73 1.31 1.49 1.41 1.07 Base year AADT 325 508 418 351 641 641 437 437 AADT at Opening 823 969 990 781 1462 1462 974 974 AADT in 2044 5102 2514 2839 2242 4354 4354 3042 3042 Proportion of Trucks at (end of 64.3% 15.6% 34.1% 39.2% 22.4% 22.4% 10.4% 10.4% analysis) Net Capital Cost Stream (million USD) 110.62 127.96 89.68 59.73 63.07 66.17 41.29 28.17 CO2 Emissions Cost, million USD (Low 81.56 7.17 14.52 8.05 13.98 16.27 3.03 1.67 Price) CO2 Emissions Cost, million USD (High 163.31 14.33 29.05 16.11 27.98 32.56 6.06 3.35 Price) Net CO2 Emissions (tons) 1,417,132 128,624 257,545 143,753 247,408 287,893 53,646 29,646 Section Length (km) 77 113 90 67 55 64 38 21 136 The World Bank Horn of Africa Gateway Development Project (P161305) Sensitivity Analysis 25. The basic economic analysis was undertaken using the most likely traffic growth rates and other economic development scenarios. However, it is normally necessary to check the sensitivity of the base case results to changes in construction costs, benefits, traffic growth rates, and combinations of any two of the three variables. Three (3) sensitivity scenarios were checked, namely: (i) increase in capital costs by 20 percent; (ii) decrease in traffic growth rates by 20 percent; and, (iii) combined increase in capital costs by 20 percent and decrease in traffic growth rates by 20 percent. 26. The results in Table 3.12 below indicate that the project will remain economically viable in all the three sensitivity scenarios. Table 3.12: Sensitivity Analysis Results NPV (USD EIRR B/C Scenario Million) (%) Ratio Base Case 230.39 16.1 1.38 Decrease in Traffic Growth Rates by 20% 136.04 14.6 1.19 Increase in Capital Costs by 20% 127.27 14.0 1.14 Increase in Capital Costs by 20% and Decrease in Traffic Growth Rates by 20% 32.92 12.6 0.98 27. For the CO2 emission cost, sensitivity analysis was done by switching the value of the first-year shadow carbon price to determine the price that gives zero NPV and IRR of 12 percent. The results show that the project will still be viable even if the first-year shadow price of CO2 per ton increases from US$40 (low price) or US$80 (high price) to US$275. Risk Analysis 28. In addition to the sensitivity analysis above, “switch values” for capital costs and traffic growth rates that would result in an EIRR of 12.0 percent and NPV of zero were also determined. The capital costs will have to increase by 23.3 percent combined with traffic growth rates reducing by 23.4 percent for the project to become economically unviable. Other Benefits 29. Major benefits expected to accrue from the upgrading of Isiolo – Mandera road to bitumen standards include; (i) a boost to the economy of the North-Eastern Region and improvement of the livelihoods of the residents. These benefits will be realized from expansion of market opportunities for the products as well as easy access to services by the people of this region; (ii) Improvement of security being that insecurity has for a long time hindered growth of markets; (iii) Motorists will realize significant savings on vehicle operating costs; (iv) Travel time and passenger fares will also reduce significantly. Currently, it costs approximately KES 4,000 (US $ 40) to travel from Nairobi to Wajir; (v) Creation of employment especially for the youth during construction of the road; (vi) Increase in land and property value; (viii) Improved access to essential public facilities such as health center and schools; (ix) Increase in 137 The World Bank Horn of Africa Gateway Development Project (P161305) purchasing power of the locals which will result in improvement in the health of the children, reduction in infant deaths and improvement of maternal health; and (x) reduction in environmental costs among others. Conclusion 30. From the above economic analysis, it is concluded that the upgrading of Isiolo - Elwak (522 km) road corridor is economically viable with or without CO2 emissions cost. 138 The World Bank Horn of Africa Gateway Development Project (P161305) ANNEX 4: RESILIENCE TO NATURAL DISASTERS AND CLIMATE CHANGE IMPACTS COUNTRY: Kenya Horn of Africa Gateway Development Project 1. The project area is in Kenya’s Northeastern, a region highly vulnerable to the impacts of climate change and communities are dependent on agricultural and livestock activities, relying on favorable climatic conditions for their livelihood. Climatic conditions have been deteriorating with climate change, with droughts putting a strain on agricultural and livestock activities, and floods destroying cyber cable and making roads impassable during the rainy season cutting-off access to basic services like health clinics, education, markets and commerce. 2. The project area has a desert climate with 57 hot days and 123 hot nights per year. Since 1960, the mean annual temperature has increased by 1.0°C and temperatures are projected to increase by 1.0°- 2.8°C by 2060. The number of hot days and nights are also projected to rise significantly. These arid and semi-arid lands are prone to harsh weather, mainly droughts in the dry season and flooding in the rainy season. With increasing mean annual temperatures and number of hot days and nights, droughts are expected to become more frequent and severe with climate change. Rainfall is projected to increase during the rainy season raising the risk of flooding, erosion, washouts, scour, and debris/siltation, disrupting cyber connection, making roads impassable and cutting-off the Northeastern region from the rest of the country. 3. Kenya’s infrastructure is transport infrastructure is inadequate and an obstacle to resilience to climate change impacts. The northeastern region is served by one cyber cable and a single road corridor offering no redundancy. The major river crossing of the Ewaso Ngiro, which empties into the Lorian Swamp, crosses the road corridor near the town of Habaswein and is prone to expansive flood incidents on a stretch of 20 kilometers along the Isiolo-Mandera corridor. The 100-year flood mapping tool from the Global Data Risk Platform revealed that the Isiolo-Mandera corridor crosses several minor, six major, and one extreme flood areas, most of which suffer flood depths of up to 2 meters during a 100-year flood event. 4. GoK has identified the use of Information and Communications Technologies (ICTs) as one of the national strategies to spur socio-economic growth in the country. Hence efforts are underway to continue extending the laying of the National Optic Fiber Backbone Infrastructure (NOFBI) across the country with service nodes in all the former regional headquarters and connecting other major towns in Kenya. Some sections of the existing NOFBI, such as the Eldoret-Lokichoggio and Athi River-Namanga have been washed away by erosion, floods, road construction, thus making the backbone in those areas unusable. Extension and completing the NOFBI will enable the country to have a more reliable, stable and efficient national backbone network that will be used by the Government at the National and County levels as well as available on a commercial basis for use by private operators for the delivery of connectivity services. While an optical fiber backbone currently runs along the Isiolo-Mandera road B9 (740km), the network does not provide any diversity, nor does it fully serve the communities along the corridor, such as schools, hospitals and other social facilities. This link also requires rehabilitation and restoration as some sections have been destroyed by floods and erosion. 139 The World Bank Horn of Africa Gateway Development Project (P161305) 5. In the recent past the information technology and transport sectors have undergone significant transformation by streamlining institutional and accountability arrangements; development of policies and strategies; creation of regulatory and oversight framework; and building the capacity of new institutions. However, institutional capacity still needs strengthening to integrate natural hazards and climate change considerations in transport policy and plans, transport asset management and to handle effectively the aftermath of climatic natural disasters. 6. HoAGDP aims to enhance resilience of the information technology and transport sectors and of the economy and communities in Kenya’s Northeastern region. The proposed project supports the implementation of Kenya’s National Adaptation Plan 2015-2030 through the prioritization of actions to enhance climate proofing of infrastructure, namely in the transport sector, ICT, and buildings. The proposed project also supports Kenya’s National Climate Change Framework Policy (NCCFP) and Act by building the institutional capacity to coordinate and enhance mainstreaming climate change and natural disaster data, information and considerations at the sector level, and putting in place mechanisms linking climate change data and information with national country planning processes. Furthermore, the proposed project enhances the resilience of local communities and of the economy by providing access to transport and ICT infrastructure year-round as well as access to economic centers/towns with essential services, health clinics and schools, which will be converted into shelters, in the event of natural disaster or extreme weather event. 7. The proposed project will upgrade the Isiolo-Mandera road corridor (Component A/ Sub- component A1: Improving Critical Road Infrastructure). The Isiolo-Mandera road corridor is the only artery road that runs in and connects the project target counties of Isiolo, Wajir, and Mandera to the Southern part of the county. The selection of this corridor was also confirmed based on the identification of climate hazard hotspots. Once repaired, it will ensure that the entire road corridor is passable year- round. Climate vulnerability assessment was carried out for the entire Isiolo-Mandera road corridor, with financing from the Global Facility for Disaster Risk Reduction (GFDRR). The recommendations of the vulnerability assessment were, thereof, used to select road sections for rehabilitation from the perspective of network climate resilience enhancement. The findings and recommendations of the vulnerability assessment have also informed the detailed engineering designs of the corridor. The designs of spur roads (40 km) have also been prepared in line with the recommendations of the Vulnerability Assessment, which was done for the adjoining section of the corridor, as the spur roads experience the similar climate risks as the adjoining section of the main corridor. Such a climate resilience approach to the design of sections will contribute to improving sustainability of road assets as well as reducing risks associated with potential climate and geophysical hazards. 8. The proposed project will also finance the installation of a new fiber optic network along the corridor since the existing cable has been destroyed by floods or erosion (Component A/ Sub- component A2: Improving Internet Connectivity in North Eastern Kenya and Institutional Strengthening of ICTA). The new fiber optic cable will provide some redundancy and will serve communities along the corridor, such as schools, hospitals and other social facilities, by creating opportunities to disseminate climate and weather-related information and advising communities on how to get prepared and address major climate adaptation risks along the project corridor. Based on the technical assessment, rehabilitation and a new fiber optic cable will be installed deeper than previous standards to reduce the 140 The World Bank Horn of Africa Gateway Development Project (P161305) risk of being damaged by flooding. 9. By enhancing access to social infrastructure and services at designated locations along the road corridor, the Project will thus ensure a year-round access for vulnerable communities to essential social services and infrastructure. (Component B: Improve Access to Selected Basic Social Services at Designated Location along the Road Corridor) In addition, these social infrastructures will serve as shelters for local communities during natural disasters like flooding. The design of the social infrastructures will consider climate resilient features that the social infrastructure can withstand major natural disasters and serve as shelters for communities. Clean energy sources are being considered to provide power for these social infrastructures. 10. Furthermore, the project will strengthen institutional capacity of transport institutions to integrate natural disasters and climate change considerations in transport asset management and build response capacity to natural disasters. (Component C: Institutional Strengthening of Selected Transport and Related Institutions). The subcomponent C1 will support the development of road design manuals with enhanced climate resilience perspective, and the preparation of future projects with climate vulnerability analysis, including the development of a plan for additional collection of climate and maintenance data regarding rainfall, hydrology, and incidents to increase resilience of the roadway network against climate factors. The road designs will be “climate informed” ensuring adaptability of the road corridor to any potential natural disasters as well as enhancing mitigation measures. 11. Under subcomponent C2. the project will support the establishment of a road asset management system that will consider climate resilience, inform medium and long-term investments plans, and deliver a road maintenance program to ensure resilience after the initial investment and throughout the lifetime of assets. The project will further enhance institutional capacity through the establishment of a Roads Spatial Infrastructure framework that facilitates the collaboration of different stakeholders in the collection and management of road transport data, and climate and natural hazards data. This framework will help break institutional and knowledge silos, bringing together in a useful way data to inform transport asset management systems that consider climate and natural disaster risks. Investments will build capacity to respond to and better manage resources in the aftermath of shock events like flooding. 12. Support for the transformation of Materials Testing and Research Department (MTRD) and Mechanical and Transport Department (MTD) into semi-autonomous entities, and their capacity enhancement will include the climate resilience considerations on construction and materials standards, with the definition of measures to enhance resilience (e.g., reinforcement banks, retaining walls, drainage systems among others). These will inform on the mapping of road construction material sites, enhancing the capacity of material testing and research laboratories, and management of construction equipment and supporting the local construction industry. Interns deployed through the Graduate Engineers Internship Programme (GEIP) will have opportunities to expose themselves to hands-on experience related to climate-resilience such as road design that has enhanced climate resilience perspective, a road maintenance program to ensure resilience, climate vulnerability analysis, including the development of a plan for additional collection of climate and maintenance data. The road design manuals and the establishment of RAMs that integrate climate and natural disaster considerations (under subcomponent C1) will also inform the investment plan of KeRRA, construction industry development policy and site 141 The World Bank Horn of Africa Gateway Development Project (P161305) inspection of NCA, training program of KHBT. The project will support SDoI to ensure its staff will receive opportunities to update themselves with all climate-resilience considerations undertaken by its associated institutions under the project. 13. Moreover, the strengthening institutional capacity of transport institutions under the project (Subcomponent C3) will contribute to meeting GoK’s GHG reduction target. The finalization of the multimodal transportation master plan and guidelines for the development of roadside systems will consider climate change and green mobility, and automated vehicle inspection will start measuring and monitoring GHG emission of tested vehicles. The transport sector represented 15 percent of national greenhouse gas (GHG) emissions in 2015. Kenya aims to achieve a low-carbon, climate-resilient development pathway, and transportation is one pillar of this mitigation plan to ensure a decrease in GHG emissions. The GoK is a signatory to the Paris Agreement on Climate Change and has committed to a 30- percent reduction in greenhouse gas emissions by 2030, compared to a business-as-usual scenario. The transport sector will contribute to this objective by cutting emissions by at least 8 percent (minimum target). 142 The World Bank Horn of Africa Gateway Development Project (P161305) ANNEX 5: MAP 143