The World Bank CEMAC - Transport-Transit Facilitation (P079736) REPORT NO.: RES45583 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CEMAC - TRANSPORT-TRANSIT FACILITATION APPROVED ON JUNE 26, 2007 TO CENTRAL AFRICAN REPUBLIC FEBRUARY 23, 2021 TRANSPORT GLOBAL PRACTICE WESTERN AND CENTRAL AFRICA REGION Regional Vice President: Ousmane Diagana Country Director: Deborah L. Wetzel Regional Director: Riccardo Puliti Practice Manager/Manager: Ibou Diouf Task Team Leader(s): Aguiratou Savadogo-Tinto, Papa Mamadou Fall The World Bank CEMAC - Transport-Transit Facilitation (P079736) ABBREVIATIONS AND ACRONYMS AF Additional Financing CAR Central African Republic CEMAC Central African Economic and Monetary Community COVID-19 Coronavirus Disease 2019 FM Financial Management FY Fiscal Year IDA International Development Association GBV Gender Based Violence GoCAR Government of Central African Republic GRM Grievance Redress Mechanism NGO Non-governmental Organization PDO Project Development Objective PIU Project Implementation Unit SDR Special Drawing Rights TTFP Transport and Transit Facilitation Project US$ United States Dollar The World Bank CEMAC - Transport-Transit Facilitation (P079736) BASIC DATA Product Information Project ID Financing Instrument P079736 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 26-Jun-2007 28-Feb-2021 Organizations Borrower Responsible Agency Ministry of Economic, Plan and Cooperation Central Ministry of Public Works Cameroon,Ministry of African Republic Infrastructure Chad Project Development Objective (PDO) Original PDO The objective of the Project is to facilitate regional trade among the Member States and improve the Central African Republic's, the Republic of Cameroon’s and the Republic of Chad’s access to world markets. Current PDO The objective of the Project is to facilitate regional trade among the Member States and improve the Central African Republic’s, the Republic of Cameroon’s, and the Republic of Chad’s access to world markets. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-51460 26-Jul-2012 02-Oct-2012 27-Dec-2012 28-Feb-2021 123.40 76.96 36.19 IDA-H7980 26-Jul-2012 02-Oct-2012 27-Dec-2012 28-Feb-2021 1.60 1.53 0 IDA-49870 23-Jun-2011 28-Oct-2011 21-Dec-2011 30-Jun-2020 66.73 42.63 12.54 The World Bank CEMAC - Transport-Transit Facilitation (P079736) IDA-46590 05-Nov-2009 29-Jan-2010 08-Apr-2010 30-Jun-2020 123.09 107.04 5.67 IDA-H5220 05-Nov-2009 11-Dec-2009 05-Feb-2010 30-Jun-2020 67.00 64.81 .73 IDA-43370 26-Jun-2007 15-Nov-2007 11-Jul-2008 30-Jun-2020 143.75 143.15 1.58 IDA-H3140 26-Jun-2007 14-Sep-2007 05-Dec-2007 31-Jan-2019 24.00 25.09 0 IDA-H3150 26-Jun-2007 29-Aug-2007 25-Jan-2008 30-Jun-2020 30.00 28.71 .40 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. This restructuring paper seeks approval to cancel undisbursed funds on the Central African Republic (CAR) component of the Central African Economic and Monetary Community (CEMAC) Transport and Transit Facilitation Project (TTFP) and return them to the World Bank. The request from the Government of CAR (GoCAR) to cancel part of undisbursed funds on the credit (IDA 51460) was received on February 17, 2021. It corresponds to the volume of resources which will not be disbursed in relation to the activities undertaken and which could not reasonably be committed and implemented before the project closing date (in total SDR 20,345,150.95 or about US$ 29.4 million equivalent). 2. The CEMAC TTFP aims to enhance trade and sub-regional cooperation among Central African states by providing landlocked CAR and Chad with better access to the Port of Douala in Cameroon through the rehabilitation of the road corridors between that port and the cities of Bangui and Ndjamena, respectively. The TTFP also aimed at (i) improving the implementation of the CEMAC Customs Union (CU); and (ii) reducing physical and non-physical barriers along the Douala- N’Djamena and Douala-Bangui corridors. 3. Rationale for the cancellation of funds. In June 2020, the CAR component was granted an exceptional extension of its closing date based on a firm commitment of GoCAR to ensure finalization of all project’s remaining activities by the end of February 2021. Unfortunately, because of the conflict situation prevailing in the project area as a result of the political turmoil of the December 2020 Presidential Elections, implementation of works under the CAR component have fully stopped since early January 2021 (cf. paragraph 10 for remaining works). Although the security has slightly improved along the corridor Bangui-Bouar in the past few days, the situation remains volatile and unpredictable. This is the reason why the GoCAR is seeking cancellation of undisbursed project funds and the return of said funds to the World Bank before project closing. 4. Financing. The total financing approved for the whole project (Cameroon, CAR, and Chad components) is US$579.57 million of which US$489.92 million is disbursed (90 percent). The CAR component was financed by a grant The World Bank CEMAC - Transport-Transit Facilitation (P079736) H3140, in the amount of US$24 million1. The amount committed through the initial project has been fully disbursed. The initial project was followed by three Additional Financings (AFs)2 aimed at scaling up project activities (approved respectively in November 2009, June 2011, and July 2012). Three restructurings3 were also processed during the project lifecycle. The CAR component of the initial financing closed on January 31, 2019, with allocated funds fully disbursed. Also, the grant H5220 for CAR component of the project was closed on June 30, 2020 and disbursed at 98 percent. The remaining financing of the CAR component (Credit IDA 5146 and Grant H798) is still active with a closing date currently set for February 28, 2021 and disbursed at 68 percent for the credit and 100 percent for the grant). 5. Implementation Performance and PDO achievement of the project. Both the Implementation Performance (IP) and PDO ratings for the entire project have been rated moderately unsatisfactory (MU) for the last three years. However, the level of achievement of the various activities differs from one country to another. The Chad activities are fully completed, and the component closed on June 30, 2020. The Cameroon component also closed on June 30, 2020; however, its activities were not fully completed4 and an undisbursed amount of US$78.5 million was cancelled and funds returned to the World Bank. The disbursement rate is 97 percent for the initial financing of the three country components and 74.5 percent for the cumulated financings for the three countries. The disbursement rate for the cumulated financings of CAR component is 82.29 percent (see Table 2 below). Table 1: Cameroon and Chad Component’s disbursement status (US$ million) Original Revised Cancelled Disbursed Undisbursed Country/Component Financing Status Percentage (US$m) (US$m) (US$m) (US$m) (US$m) P079736, Cameroon IDA-43370 Closed 147.00 143.75 3.25 143.15 1.58 99 Initial financing P079736, Cameroon IDA-46590 Closed 150.00 123.09 26.91 107.04 5.67 95 AF1 1 The Cameroon and Chad components of the initial financing were financed by credit IDA-43370 in an amount of US$147million and grant H3150 of US$30 million respectively. 2 The three AFs are: AF1:(i) US$67 million for the CAR component (Grant H5220) (100 percent disbursed) and (ii) US$150 million for Cameroon (IDA-46590) (US$65.33 million disbursed to date); AF2 (ii) US$112 million for Cameroon (Credit 49780) (53 percent disbursed to date) to finance the partial rehabilitation of the Mora-Dabanga-Kousseri road section which constitutes one of the most deteriorated sections on the Douala - N'Djamena corridor; and AF3: (iii) US$123 million to CAR (GrantH7980 and Credit IDA-51460) to scale up the project for better impact by paving road section Baoro-Bouar (56 km) and maintaining road section Bouar-Fambele (58 km). 3 The project was first restructured on January 29, 2016 to reallocate funds in credits/grant proceeds in each country and extend the closing date from January 31, 2016 to January 31, 2019. This extension was justified by the significant deterioration of the countries’ security situation so that key project activities could be completed. The second restructuring in 2019 extended the closing date from January 31, 2019 to June 30, 2020 to allow completion of key road improvement activities, particularly the rehabilitation of the Mora- Dabanga-Kousseri road section, under an exceptional results-based force account mechanism executed by the Cameroon Army Corps of Engineers in the Far-North of Cameroon. The third restructuring in 2020 extended the closing date of the CAR component to February 28, 2021 to allow completion of Baoro-Bouar road section, and cancelled fuds to the tune of SDR 54,522,191,78 on the Cameroon component. 4 Works of Mora-Dabanga-Kousséri in the far North of Cameroon were not completed. The World Bank CEMAC - Transport-Transit Facilitation (P079736) Cameroon AF2 IDA-49870 Closed 112.00 66.73 45.27 42.63 12.54 77 P079736, Chad initial IDA- Closed 30.00 30.00 0) 28.71 0.40 99 Financing H3150 P125915 TF-10978 Closed 11.49 0 11.49 0 0 0 Table 2: CAR Component’s disbursement status (US$ million) Financing Financing Net Commitment Disbursed Undisbursed Percentage (US$m) (US$m) (US$m) Initial IDA-H3140 24.00 25.09 0.00 105 AF1 IDA-H5220 67.00 64.81 0.73 99 AF3 IDA-51460 113.50 76.69 36.41 68 AF3 IDA-H7980 1.60 1.60 0.00 100 Total (Initial+AF1+AF3) 206.10 169.6 37.14 82.29 6. The Implementation Performance and the PDO ratings for the CAR component are both moderately unsatisfactory (MU). The implementation has been delayed for various reasons (security, COVID19 and contractor weak performance). Key results achieved to date for the CAR component are as follow:  About 203 km of roads have been rehabilitated, including the Fambele-Baboua and the Bouar-Fambele road sections along the Douala-Bangui corridor and Baoro-Bouar road;  Average time from ship readiness to unload to destination for an imported container, on the corridor Douala- Bangui has been reduced form 10 days to 8 days;  Customs operations carried out electronically for goods in transit at the border post of Garoua Boulai represented 100 percent against 0 percent at the beginning of the project;  The labor-intensive works program for the rehabilitation of urban roads in Bangui has been successfully implemented for an amount of US$8 million and has generated more than 50,000 man-days of work, 31 km of urban roads rehabilitated;  The capacity of the Ministry of Public Works, the Ministry of Transport, and the General Directorate of Customs, have been strengthened;  The CEMAC transit regime has been endorsed but it is yet to be fully operational;  Bilateral agreements aiming at sharing transit data were signed between the Cameroonian and CAR customs, as well as between the Cameroonian and Chadian customs;  Percentage of road in good and fair condition increased from 53 percent to 80 percent for a target of 85 percent. 7. Since the June 2020 restructuring (to extend its closing date to February 28, 2021), the CAR component has made significant progress in the finalization of its activities despite the impact of the COVID19 Pandemic. Unfortunately, the recent political turmoil and social unrest associated with the December 2020 presidential elections has halted all project activities. As of December 2020, the following progress was achieved in the implementation of the last project activities: (i) Baoro-Bouar road section (56 km) was fully paved and discussions that were ongoing between the contractor and the Government augured well for an agreement on outstanding contractual issues and the finalization of all drainage and The World Bank CEMAC - Transport-Transit Facilitation (P079736) signalization works by February 28, 2021; (ii) the Bouar bus station was completed; (iii) the completion rate of the Beloko rest area is estimated at 30 percent; and (iii) maintenance works of 380 km of roads between Bangui and Baoro reached an execution rate of 40 percent. 8. Fiduciary performance of the CAR component. The disbursement rate of the entire financing of CAR is about 82.29 percent as of February 15, 2021 (68 percent for credit IDA-5146, 100 percent for IDA-H7980, 100 percent for IDA H3140 and 98 percent for IDA-H5220). The project’s fiduciary risk is assessed as Substantial and the performance of financial management (FM) has been evaluated Moderately Satisfactory by the World Bank team. There are no outstanding audit reports. Procurement management has improved and the Project Implementation Unit (PIU) has made significant progress in planning and implementing procurement activities with World Bank support. Therefore, the performance of procurement is rated Moderately Satisfactory. 9. Remaining core activities to be completed. With the unexpected suspension of works in mid-December 2020, the following works will not be completed by project closing: (i) the drainage system of Baoro-Bouar, (ii) the periodic maintenance of 58 km of roads ; (iii) the Beloko customs platform at the border with Cameroon; (iv) the axle load control station at PK30 near Bangui; and (v) the spot improvement of 140 km of roads along the Bangui-Baoro corridor (about 240 km has been already maintained under the project). 10. Safeguards Management Performance of the CAR component. Environmental and social impact management are both rated Moderately Satisfactory. Until suspension of works due to the security situation, road works were executed without major environmental and social safeguards issues. The Environmental and Social Management Plan (ESMP) prepared by the contractor on September 15, 2018, for the road works, has been developed and includes Occupational and Health Safety Hygiene (OHS) measures. In addition, and since the start of the COVID-19 pandemic, the contractor has been implementing specific measures to prevent the spreading of the disease. Also, during the sensitizations, emphasis was placed on prevention against HIV/AIDS and against the recruitment and/or use of child labor. Implementation of the Resettlement Action Plan (RAP) that was initially prepared and disclosed on May 11, 2012 for the Baoro-Bouar road works complies with safeguards requirements. 11. The Grievance Redress Mechanism (GRM) is operational. The project's GRM is in place and functioning. The PIU has recruited a local non-governmental organization (NGO) to manage the project GRM, and 8 committees have been installed in the villages along the road section Baoro-Bouar. All these committees have been provided with appropriate tools and their members have been trained to raise community awareness and eventually, they received and processed 700 complaints. All complaints received to date are expected to be closed by end February 2021, including the payment of eventual compensation when eligible. 12. Gender-based Violence (GBV). The project has recruited an NGO responsible for the GBV prevention and risk management activities. The NGO is active and has been producing monthly reports. No project related GBV incident has been reported by the NGO. II. DESCRIPTION OF PROPOSED CHANGES 13. The only change proposed under this restructuring paper is the cancellation of SDR 20,345,150.95, about US$ 29.4 million equivalent from the IDA credit 51460. The funds will be returned to the World Bank. The change is summarized in the below tables. The reallocation has been triggered to materialize the cancellation of funds. The World Bank CEMAC - Transport-Transit Facilitation (P079736) III. SUMMARY OF CHANGES Changed Not Changed Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) The World Bank CEMAC - Transport-Transit Facilitation (P079736) OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation Disburs IDA-43370- ing&Re XDR 94,847,658.00 0.00 94,847,658.00 001 paying Disburs IDA-46590- ing&Re XDR 76,349,323.00 0.00 76,349,323.00 001 paying IDA-49870- Disburs XDR 37,980,827.00 0.00 37,980,827.00 001 ing BORROWER' S REQUEST IDA-51460- Disburs XDR 79,600,000.00 20,345,150.95 15-Feb-2021 59,254,849.05 FOR 001 ing COUNTRY REASONS Fully IDA-H3140- Disburs XDR 16,000,000.00 0.00 16,000,000.00 001 ed IDA-H3150- Disburs XDR 19,700,000.00 0.00 19,700,000.00 001 ing IDA-H5220- Disburs XDR 42,800,000.00 0.00 42,800,000.00 001 ing IDA-H7980- Disburs XDR 1,100,000.00 0.00 1,100,000.00 001 ing OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-51460-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: GD, WK, NCS, CS, TR 78,715,900.00 52,843,275.12 58,286,749.05 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: OPERATING COSTS The World Bank CEMAC - Transport-Transit Facilitation (P079736) 884,100.00 923,031.07 968,100.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: UNALLOCATED 0.00 0.00 0.00 Total 79,600,000.00 53,766,306.19 59,254,849.05 .