Document of The World Bank Report No. 14510-HA STAFF APPRAISAL REPORT HAITI EMPLOYMENT GENERATION PROJECT JUNE 16, 1995 Natural Resources and Rural Poverty Operations Division Country Department II Latin America and the Caribbean Regional Office CURRENCY EQUIVALENTS (May 1995) Currency Unit = Gourde (G) US$1.00 = G 14.7 WEIGHTS AND MEASURES Metric System GOVERIMENT FISCAL YEAR October 1 -September 30 GLOSSARY AND ACRONYMS AGETIP Agence d'Ex6cution de Travaux d'Int6rgt Publique (Executing Agency for Public Interest Works) ALERTE Association pour la Lutte contre l'Erosion et pour la Rahabilitation Totale de l'Environnement (Association for the Fight Against Erosion and for the Total Rehabilitation of the Environment) ASMR L'Amicale des St. Marcois Rdunis (The Union of St. Mark's Followers Friendship Association) ASSODLO Association pour la Maitrise de l'Eau du Sol (Association for Groundwater Management) BHM Baptist Haitian Mission CASEC Conseil d'Administration des Sections Communales (Commune Administrative Councils) CCCPV Confederation of Community Councils of Petionville CCDVA Community Councils for the Development of the Artibonite Valley CECI Canadian Center for International Studies and Cooperation CEHPAPE Haitian Center for Agriculture and Environmental Protection CG Consultative Group for Haiti CHF Cooperative Housing Foundation CIU Central Implementation Unit (of Prime Minister's Office) CODEVA Le Coude-i-Coude pour le Ddveloppement de la Vall6e (The Elbow-to-Elbow Association for the Development of the Valley) CSMG Comit6 de Support i la Mairie de Gonalves (Gonalves Municipal Government Support Committee) DCCH Ddveloppement Communautaire Chr6tien Hattien (Haitian Christian Community Development) EA Environmental Assessment EERP Emergency Economic Recovery Program ERR Economic Rate of Return ESF Economic and Social Fund FAES Fond d'Action Economique et Sociale (French acronym for ESF) FEGA La Fondation d'Entreaide de la Grand'Anse (Grand'Anse Mutual Help Foundation) GASC Group d'Appui en Sanl6 Communautaire (Community Health Support Group) GOH Government of Haiti GRAPES Group for Action to Protect the Environment in the South ICB International Competitive Bidding IDA Intemnational Development Association IDB Inter-Ameiican Development Bank 10 Implementation Organization MCC Mennonite Central Committee MDOD Maitre d'Ouvrage D6ligu6 (French acronym for PMA) MOA Ministry of Agriculture, Natural Resources and Rural Development MODECOD Mouvement de D6veloppement Communautaire de Doris (Doris Community Development Movement) MOF Ministry of Economy and Finance MTPTC Nlinist6re des fravaux Publics, Transport et Communications (Ministry of Public Works, Transport and Communications) NIF Not IDA-Financed NCB National Competitive Bidding NEAP National Environmental Action Plan NGO Non-Governmental Organization NPV Net Present Value O&M Operations and Maintenance ODEE Organisation de DNveloppement et d'Education Evangdlique (Development and Evangelic Education Organization) PADF Pan American Development Foundation PMA Project Management Agency PMO Prinme Minister's Office PPF Project Preparation Facility PURE Programme d'ljrgence de Rdactivation Economique (French acronym for EERP) SAC Structural Adjustment Credit SEPIC Service Professionnel Integrd de la Paix des Bouquets (Paix des Bouquets Integrated Professional Service) SOE Statement of Expenditure SOPABO Solidariit des Paysans de Boucon Cove (Boucon Cove Peasant Solidarity) TAC Technical Assistance Credit TOR Terms of Reference UCG Unitd Centrale de Gestion (French acronym for CIU) UNDP United Nations Development Programme USAID United States Agency for International Development HAITI EMPLOYMENT GENERATION PROJECT STAFF APPRAISAL REPORT Table of Contents CREDIT AND PROJECT SUtMMARY .................... i I. Country Overview ............................... I Economic Setting ............................... 1 Bank Group Country Assistance Strategy ................. 3 Government Agencies and Other Organizations ............. 6 Lessons Learned ................................ 8 II. The Project ................................... 11 Origin ...................................... 11 Objectives .................................... 11 Summary Description ............................. 11 Rationale for IDA Involvement ....................... 12 Detailed Description ............................. 12 E,mployment Generation .......................... 12 Institutional Development ......................... 14 Costs ............................ 15 Financing .................................... 15 Procurement .................................. 17 Disbursements ............................. 20 Accounts and Auditing ............................ 21 Monitoring, Reporting and Evaluation ...... ............ 21 III. Project Analysis ............................... 23 Economic analysis ............................... 23 Social aspects ................................ 23 Environmental aspects . ........................... 24 Sustainability ................................ 24 Summary of project benefits . ....................... 25 Risks ................................. 25 IV. Agreements and Recommendation ...... .............. 27 This report is based on preparation, appraisal aind negotiations missionis to Haiti in May-June 1995 consisting of Michael Baxter, Mark Cackler, Luis Constantino, Cora Shaw. Andrea Silverman (LA2NR), Axel Peuker, Wendeline De Zan (LA2CO), David Varela (LEGLA), Morag Van Praag (LOAEL) and L.M. Garry Charlier (consultant). The responsible managers are Michael Baxter (Division Chief), Kreszentia Duer (Projects Adviser) and Edilberto Segura (Director). TABLES IN TEXT Table 2.1 Procurement ANNEXES Annex 1: Employment Generation Component Attachment: Eligibility Criteria for PMAs Tables: 1. Distribution of Component Costs 2. Monthly Projections Charts: 1. Subproject Cycle 2. Fund Flows for Subprojects 3. Fund Flows for Institutional Development Component Annex 2: Institutional Development Component Attachment: Decentralization Policies and Structure of Local Government in Haiti Charts: 1. CIU Organization Chart 2. PADF Organization Chart Terms of Reference: 1. Half-yearly evaluations 2. Economic evaluation of project investments Annex 3: Costs, Financing and Disbursement Tables: 1. Summary Costs by Component 2. Annual Costs by Component 3. Institutional Development Costs 4. Financing Plan 5. Allocation of Credit Proceeds 6. Estimated Schedule of IDA Disbursements Annex 4: Project Reporting Tables: 1. Implementation and Impact Indicators 2. Financial Indicators 3. Status of Compliance with Legal Covenants Annex 5: Documents in the Project File MAPS IBRD No. 27090 Haiti - Physical Features IBRD No. 27091 Haiti - Administrative Divisions - ill - HAITI EMPLOYMENT GENERATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Haiti Implementing Agency: Central Implementation Unit of Prime Minister's Office Beneficiary: Not applicable Poverty Category: Program of Targeted Interventions (see para. 2.6) Amount: SDR 31.8 million (US$50 million equivalent) Terms: Standard, with 40 years maturity Commitment Fee: 0.50% on undisbursed credit balances, beginning 60 days after signing, less any waiver. Financing Plan: See para. 2.14 Net Present Value See paras. 3.1-3.4 Maps: IBRD No. 27090 Haiti - Physical Features IBRD No. 27091 Haiti - Administrative Divisions Project ID No.: HA-PA-41583 I HAITI EMPLOYMENT GENERATION PROJECT STAFF APPRAISAL REPORT I. Country Overview 1.1 Economic Setting. Haiti is a small, densely populated, predominately rural, and open economy. Its seven million people occupy 28,000 square kilometers, on the western end of the island of Hispaniola. With an estimated GDP per capita of below US$250 in 1994, Haiti is the poorest and most densely populated nation in the Western Hemisphere. Social indicators are alarming. In 1994, an estimated 50% of the population had a caloric intake of below 75% of requirements, and over 25% of children suffered from malnutrition. The infant mortality rate is estimated to exceed 100 per 1,000 live births. Some 50% of adult Haitians are illiterate. Net of emigration of 0.5%, the population grew at a rate of 1.8% per year in the 1980s. Estimates of unemployment are as high as 70%. 1.2 During 1980-91, Haiti's population suffered a continuing decline in its standard of living, with real per capita incomes falling by about 2% per year. Over decades, population pressure and poor public policies forced cultivation of increasingly marginal lands, and in turn accelerated deforestation and soil erosion. As a result, agricultural production, the main source of income of the 70% of the population who live in rural areas, has fallen steadily on a per capita basis since the 1970s. Initially, industrial expansion compensated for the decline in agriculture. In the second half of the 1970s, a major expansion in the export industry together with increasing public investment allowed the country to grow at a rate of about 3% per capita. However, political instability during most of the 1980s put a stop to industrial expansion, external assistance and, consequently, to growth and investment. 1.3 Political stalemate during the 1991-1994 period coupled with the international embargo on Haiti aggravated the economic decline. In 1990, President Aristide was democratically elected and took office in February 1991. His Government undertook some measures to improve fiscal revenues, liberalize trade and improve infrastructure services, and initiated discussions on an IMF stand-by agreement. However, in September 1991, a military-led coup d'etat forced President Aristide from office and into exile. During the following three years. increased economic mismanagement and international rejection led to an international embargo, resulting in a dramatic decline in living standards. On October 16, 1994, President Aristide was able to return to Haiti, and on November 7, 1994. a new constitutional Government was appointed. During this period, economic performance deteriorated at an accelerated pace. Preliminary data indicate that real GDP fell by over 17% during 1992-93, and by a further 10% in 1994. The situation worsened further when tropical storm Gordon hit - 2 - Haiti on November 12, 1994. Agricultural production and exports decreased considerably. Export oriented industries were devastated by the embargo. Value-added in the services sector decreased in line with GDP, and construction activities came to a virtual standstill. 1.4 Upon its reestablishment, the Constitutional Government presented a coherent economic and social rehabilitation program to face the problems and challenges ahead, and the international donor community confirmed support for the Government's reform efforts. Apart from the preparation of the rehabilitation program, these include the creation of an election council and legislation to prepare parliamentary elections, an agreement with the IMF on a stand-by arrangement, and the initiation of economic policy reforms. At the January 1995 Consultative Group (CG) Meeting held in Paris, and again at the CG Follow-up Meeting in Port-au-Prince in May 1995, donors pledged and confirmed over US$1.5 billion in support of the Government's efforts. US$330 million of this assistance has been disbursed. There was a broad consensus regarding the difficult challenges facing Haiti, and the donor community has supported the objectives and priorities established by the Government. Donors also agreed on the financial and technical requirements for the rehabilitation effort. At the CG Follow-up Meeting, IDA provided a brief outline of its assessment of Haiti's economic and social conditions, and its strategy to support the Government in key sectors. IDA also reconfirmed its commitment to poverty alleviation by announcing its support for an immediate Employment Generation Project, which would build on a successful USAID- financed JOBS Creation Project, soon to be completed. 1.5 Development Strategy. Government's stated development objectives are (a) sustained growth and employment creation; (b) poverty alleviation and broad access to social services; and (c) environmental rehabilitation. The Government wants to achieve these objectives in a framework of national reconciliation and respect for democratic rule. It also has committed itself to a comprehensive privatization program and policy reforms to support private sector development. The Government further intends to strengthen the ability of the state to deliver basic services through public service reform and decentralization. It also aims to cooperate with non-governmental organizations (NGOs) in the provision of services. Finally, the Government has expressed great concern over the country's poor environmental conditions. 1.6 To address the current economic crisis and move toward its development objectives, the Government has (a) been implementing an emergency assistance program to provide for basic needs through import finance, civil works and technical assistance; and (b) agreed with the IMF on a stand-by arrangement. The assistance program was prepared in close collaboration with a multi-agency task force, including IDA. It covers the areas of governance, economic assistance and humanitarian aid and is estimated to cost US$586 million. As a first step to facilitate implementation and strengthen the country's weak absorptive capacity, the Government established, by Executive Decree issued December 20, 1994, in the context of IDA's Emergency Economic Recovery Credit (EERC; Cr. 2670-HA), an emergency Central Implementation Unit (CIU; in French, the Unite Centrale de Gestion - UCG) in the Prime Minister's Office (PMO). 1.7 Provided the Government succeeds in implementing its reform agenda and the pledged assistance is absorbed in a timely manner, the economic outlook for Haiti would be favorable, and growth rates of over 5 percent per year could be expected during 1995-99. In the short-term, growth policies would aim at initiating economic recovery through donor financed rehabilitation activities and reactivation of the agricultural sector. In the medium-term, the country could enjoy a comparative advantage in labor-intensive assembly and service industries, some areas of agriculture and tourism. However, in the short term, and given the reduced investment and the structural problems of the rural sector, the reform agenda would not provide the jobs necessary to compensate for the employment losses caused by the manufacturing exodus during the embargo, the dissolution of the Armed Forces and the general loss of revenue opportunities during the economic depression. The embargo and economic decline have been especially hard on the rural and urban poor and the disadvantaged groups have few prospects for improvement in the short term. Moreover, extreme poverty puts at risk emerging democratic institutions. 1.8 Poverty Alleviation Strategy. As noted above, Haiti is the poorest country in the Western Hemisphere. Because of pervasive poverty and the need for political reconciliation, Haiti's development strategy focuses on poverty alleviation in a context of social harmony. It is estimated that 60-65% of households in Port-au-Prince, and 65-70% of households in rural areas fall below the poverty line; since 1991, this level has been aggravated by the embargo and by poor economic and social policies. 1.9 To address these problems the Government has emphasized a commitment to comprehensive poverty alleviation activities, focusing, in particular, on rural areas where most of the poor are located. This would entail providing income earning opportunities to the poor in the context of sustained growth and better targeting and delivering social programs to the poor. To achieve this, it would be critical that donor financed projects, including IDA, generate income for the poor during the transition period to political and economic stability, when private led employment and economic growth would pick up the slack in the economy. Bank Group Country Assistance Strategy 1.10 The Bank Group's assistance to Haiti involves a two-pronged approach. In the short-term, IDA has provided emergency financing EERC, and has worked quickly to reactivate earlier projects in the country. Particular attention is being paid to aid coordination, to assist the Government in mobilizing additional financing for the broader Emergency Economic Recovery Program (EERP) and in ensuring that donor efforts are complementary rather than duplicative. At the same time, with a view to the medium-term, IDA is working with the Government on the formulation of strategies for structural reforms essential to reviving growth, poverty alleviation and environmental rehabilitation. In view of the continued urgent need for emergency relief, IDA is proposing to bridge the transition from short- to medium-term assistance with the proposed Employment Generation Project (Chapter 2). Strategically, the project would not only serve to boost economic recovery and alleviate poverty, but would also provide upstream assistance to facilitate the implementation of the -4 - Government's economic policy reform program, to be supported in FY96 by a Second Structural Adjuistment Credit (SAC 11) and a complementary Second Technical Assistance Credit (TA C 11). 1.11 Reviving Growth. Haiti's development agenda is formidable. The country is characterized by debilitated institutions, large macroeconomic imbalances, depleted productive assets, a dilapidated infrastructure, alarming social indicators, pervasive poverty and a degraded environment. Reviving growth will be key, because only in the context of a successful growth strategy will the Government be able to address the nexus of poverty and environmental degradation which afflicts, in particular, the rural population. Some of the ingredients of a growth strategy would entail: (a) facilitating private sector development; (b) strengthening institutional capacity; and (c) rehabilitating basic infrastructure. The prerequisite for private sector-led development in Haiti will be to nurture private sector confidence -- which in turn will depend on good governance and economic policy reforms developed through intensive dialogue between the Government, private sector and trade unions. IDA is already engaged in an intensive policy dialogue with the Government. Jointly with the International Monetary Fund, IDA would assist the Government in elaborating this agenda in the context of a 1995-97 Policy Framework Paper. IDA would then propose the SAC II, supported by TAC 11, both in FY96. 1.12 Strengthening the institutional capacity to absorb foreign assistance and improve delivery of public services will be vital for Haiti's growth prospects. Currently, the public sector is over-extended, poorly organized, and suffers from a dearth of technical and management expertise. For IDA, the above-mentioned TAC II would focus on the key agencies involved in economic policy management, resource mobilization and expenditure control. IDA's ongoing and proposed investment projects would also further institutional reforms in the Ministries of Agriculture and Natural Resources, Education, Environment, Health, and Public Works and in the water and electricity sector. Haiti will also have to spend substantial resources on infrastructure rehabilitation to support growth. To a significant extent, the only viable solution to Haiti's infrastructure problems will be private investment and management. Still, the investments to be undertaken by the public sector will require substantial and sustained donor assistance and domestic resource mobilization. With IDA's focus shifting more heavily to the social sectors and environmental issues, IDB is expected to take the lead in infrastructure rehabilitation. Nonetheless, IDA would continue to be engaged in infrastructure rehabilitation for some time through its ongoing projects in transport, electricity and water supply. 1.13 Alleviating Poverty and Investing in Health and Education. Haiti's development strategy would also attend directly to alleviating poverty and investing in the population's health and education. The strategy to address poverty issues would, first, converge with the growth strategy in the principal objective of providing income earning opportunities to the poor in the context of sustained growth. Second, the poverty strategy would also aim to improve access to water, primary health care and basic education, thereby mitigating the impact of poverty as well as building the - 5 - country's human resource base to support growth. Third. the poverty strategy would attempt to strengthen social safety nets by channeling assistance to vulnerable groups and providing resources to communities and non-governmental organizations. The proposed Employment Generation Project is one means to implenment such a poverty strategy. Further, IDA would continue to place great emphasis on the Economic and Social Fund (ESF; Fond d'Action Economique et Sociale - FAES) as a more permanent instrument to alleviate poverty, and would support rehabilitation and institutional reform in water supply, health and education through the ongoing Port-au-Prince WVater Supply (Cr. 2052-HA) and Health1 and Population (Cr. 2085-HA) Projects, and a proposed Education Project. To assist the Government in the elaboration of a comprehensive medium-term poverty strategy and to provide a framework for the fiture efforts of various donors in this area, IDA agreed to take the lead in preparing a two-stage Poverry Assessment, with a first output ready in mid-FY96 and a fuller report in FY97. 1.14 Rehabilitating the Environment. Sustainable development in Haiti will require arresting severe environmental degradation and rehabilitating essential eco- systems. Haiti's main environmental problems pertain to deforestation and soil conservation, and are a result of the interaction of demographic pressures, poverty and policy failures. Estimates suggest that forest cover has been destroyed in almost all of the territory, endangering water supply and causing severe soil erosion. Agricultural performance is also constrained by inappropriate land use practices, induced by political instability, unclear land tenure, poverty, and lack of public services. These complex environmental issues would need to be addressed in the context of a national environmental strategy which clearly acknowledges the nexus of environment and poverty. Such a strategy would call for the formulation of a National Environmental Action Plan (NEAP), for which the Government is seeking assistance. USAID has pledged financial support to the NEAP. The UNDP has also indicated support and IDA is prepared to assist in the preparation of a NEAP. On the investment side, IDA's environmental support would focus on deforestation and soil conservation and their links with poverty, including land issues, through a proposed Forestry and Environment Project (FY96) and a Rural Poverty Project (FY98/99). 1.15 The Ongoing Portfolio. IDA's ongoing portfolio includes about US$150 million of undisbursed funds from seven projects: the Road Maintenance and Rehabilitation Project (Cr. 2691-HA; FY95), pending effectiveness; the Economic and Social Fund Project (Cr. 2205-HA; FY91), designed to address basic economic and social development needs through grassroots organizations; the Health and Population Project (Cr. 2085-HA; FY90), designed to improve essential health services, including epidemic control measures; the Industrial Restructuring and Development Project (Cr. 2071-HA; FY90), designed to provide technical and financial assistance to private, mostly small- and medium-sized industrial enterprises; the Fifth Power Project (Cr. 2053-HA; FY89), designed to rehabilitate generation, transmission and distribution services; the Port-au-Prince Water Supply Project (Cr. 2052-HA; FY89), designed to increase water production and delivery capacity; and the Seventh Transport Project (Cr. 1756-HA; FY87), designed to address selected bottlenecks in road and water transport. The Emergency Economic Recovery Credit (EERC; Cr. 2670-HA; FY95). the first - 6 - intervention to address Haiti's emergency needs, has already been completely disbursed. 1.16 Possible New Lending. IDA's future lending program would likely include the SAC II and TAC 11 in FY96, and investment operations for Environment and Forestry (FY96), Education (FY97) and Rural Poverty (FY98/99). Also, if the Economic and Social Fund performs well and needs additional support, IDA would consider that a priority activity; at the same time IDA's lending program would be contingent on significant progress in the reform process and a satisfactory performance in implementation of the ongoing portfolio. Government Agencies and Other Organizations Related to Employment Programs 1.17 Prime Minister's Office (PMO). The PMO was created in the 1987 Constitution to lead and coordinate the work of other ministries. Since the return of Constitutional rule, the PMO has taken a leading role in coordinating major donor emergency programs. To underscore the importance of emergency actions, the Central Implementation Unit was created in the PMO in December 1994. 1.18 The Central Implementation Unit (CIU) reports to a Steering Committee (Comit6 Directeur) chaired by the Prime Minister and consisting of the Governor of the Central Bank, and the Ministers of Finance and Planning as permanent members, and other Ministers depending on the agenda. The CIU's main role is to ensure and supervise implementation of the Emergency Program (PURE) by supervising execution, carrying out procurement, channelling financing and ensuring the application of appropriate guidelines. 1.19 The Ministry of Public Works is in charge of road infrastructure. It has recently created, with IDA and IDB support, a Labor Intensive Unit (Haut Intensite de Main d'Oeuvre -- HIMO) to implement labor-intensive road maintenance programs, but which is not yet operational. The Ministry of Agriculture and Natural Resources is in charge of a wide range of activities in rural areas including management and maintenance of primary irrigation canals and soil conservation, which are relevant to this project. The Ministry of the Environment was recently created and is not yet fully operational. It will focus on normative and regulatory aspects of environmental policy and one of its first activities will be to coordinate the National Environmental Action Plan. It will also coordinate the environmental assessment activities for large projects. 1.20 The Economic and Social Fund (ESF; in French, Fond d'Action Economique et Sociale - FAES) was created by an Executive Decree dated May 20, 1990 as an instrument to finance small scale works. It is currently funded by US$23 million from IDA and IDB, which together fund social sector projects up to US$50,000 (IDA) and small infrastructure up to $75,000 (IDB). Because of the military coup, it only became operational in April 1995 and has since May 1995 approved 59 subprojects, mostly schools. Because of FAES' short-lived experience and to avoid diverting it away from - 7 - its main focus - small scale works - during its initial start-up phase, the GOH has requested that FAES not be directly involved in the implementation of the proposed Employment Generation Project other than as a mechanism to ensure a smooth transition between USAID and IDA financing. In this context, FAES would finance the US$4.6 million shortfall to complete ongoing works for three months starting June 1, 1995 from the IDB loan. 1.21 Non-Government Organizations. Non-Government Organizations (NGOs) have long been active in Haiti in providing a range of services when state institutions have been weak. NGOs range from international organizations (PADF, CECI, CARE, etc.), to religious groups (ASMR, BHM, DCCH, MCC, MCEH, ODEE, SEPIC, etc.), environmentally oriented groups (ALERTE, ASSODLO, CEHPAPE, GRAPES, etc.), social services oriented groups (FEGA, GASC, MODECOD, CCCPV, CCDVA, CSMG, etc.), and producer groups and other economic organizations (CODEVA, SOPABO, etc.). In all there are more than 200 registered NGOs operating in Haiti. Some of these NGOs operate at the grassroots level while a few of the international NGOs have established themselves as intermediaries between international donors and the grassroots organizations, delivering to the former supervision, accounting and evaluation services and to the latter funding, technical assistance, and procurement services. 1.22 The Pan American Development Foundation (PADF) is the international NGO that is most relevant to the proposed project because of its role in the ongoing JOBS Creation Project financed by USAID. PADF has over 15 years of experience in Haiti, a large network of relationships with local NGOs, experience in the management of quick response disaster relief programs, and tool procurement expertise. PADF has been designated by the Organization of American States to coordinate disaster relief and in Haiti PADF has the status of an International Organization and can import goods duty free, as well as the status of a Haitian NGO. 1.23 Current JOBS Creation Project. USAID approved financing of the JOBS Creation Project in 1993 as a humanitarian initiative to mitigate the impacts of the embargo that followed the military coup of 1991 and to improve Haiti's deteriorating productive infrastructure in preparation for the return of democracy. Evaluations of the project have shown it to be a success. Initially funded with US$13.7 million to create 200,000 persons month of work over 14 months, during its final phase the project resources amounted to US$27.6 million, partly in US dollars and partly in local currency through the PL-480 Title III program and intended to create 480,000 person/months of temporary work over a 29 month period, which will end in August 1995. By March 1, 1995, the projected had created 261,895 persons/month of work, equivalent to about 175,000 people, who each worked about one and a half months earning US$55. By May 1995, the project had reached 95 % of its job creation targets and the project benefits had reached about 846,700 family members of the workers. While its primary objective was job creation, the project had the secondary objective of improving the country's deteriorating infrastructure, increasing land productivity and improving environmental standards in urban centers. Accordingly the project focused on four activities: road rehabilitation, irrigation and drainage rehabilitation, soil and -8 - water conservation, and garbage collection and cleaning of urban drainage canals. As of January 1995 the project had cleaned 249 km of urban streets, removed 131,500 m3 of garbage, rehabilitated 1,600 km of irrigation canals, rehabilitated 934 km of rural roads, built 627 km of soil conservation contour terraces and protected 6,400 hectares of land. Project implementation was based on a contract between USAID and PADF, which then recruited local and grassroots NGOs, which recruited labor and implemented the activities. PADF provided funding, technical assistance and tools to these NGOs, and inspected, supervised and evaluated them, and reported project progress to USAID. USAID-mandated quarterly audits of PADF accounts were satisfactory. 1.24 Lessons Learned from Employment Generation Programs in Other Countries. Employment generation programs in other countries, including Peru, Chile, Bolivia and India, have been most successful when the following factors have been present: (a) Wages provided are lower than the minimum wage, thereby ensuring that the benefits of the program would not be appropriated by the non- poor. (b) The program is targeted geographically, to ensure that it is accessible to the poor. (c) The implementing agency is staffed by technically qualified staff and allowed to function according to clear, and transparently applied guidelines. (d) Monitoring systems are established to provide timely feedback. (e) Works selected have high labor content and result in investments that are of value to the poor. 1.25 The experience in West Africa with the Senegal AGETIP (Executing Agency for Public Interest Works -- Agence d'Ex6cution de Travaux d'lnteret Publique) model is relevant to the proposed project. The World Bank-supported AGETIP model was created in 1989 in a context of rapid urbanization, economic crisis, ending of the welfare state, beginning of a decentralization strategy, dwindling resources at the central level and a lack of resource mobilization capacity at the local level. The AGETIP was established as an NGO for delegated contract management of municipal small-scale works, construction and rehabilitation executed by small private firms. The objectives of the AGETIP were to, without increasing the size of the public sector, efficiently implement low cost, high priority public works, while establishing transparent procurement practices, and strengthening local contractors by providing technical assistance. 1.26 The model has succeeded in providing employment and subsistence to unskilled workers while achieving durable economic benefits through the implementation of a well-selected works and services program and the strengthening participating 9- municipalities, contractors and engineering consulting firms. Today there are a number of AGETIP-type organizations in West Africa. Keys to the success of the AGETIP model were: (a) Clear focus and Government support. (b) Private independent status of the agency and a competent director. (c) Transparent and flexible subproject selection. (d) Rapid procedures allowing payments in less than two weeks --restoring public credibility and reducing costs. (e) Transparent procedures, including frequent audits and ex-post controls. 1.27 The advantages of the AGETIP model listed above are shared by the NGO which is implementing the major component of the USAID Jobs Creation project, PADF, and have been major factors in its success in reaching employment creation targets rapidly while maintaining the quality and transparency of the implementation process. However, the creation and use of a specialized, semi-autonomous NGO dedicated to contract management has been criticized for: (a) not contributing to institutional strengthening of line ministries or local governments ultimately responsible for these works; (b) inadequate links with sectoral strategies; and (c) creation of a monopoly situation, in which competition from other contract management agencies is lacking. The Government of Haiti wishes to address these longer term issues through the studies and technical assistance included in the institutional development component, and gives high priority to developing in- country capacity to carry out the functions until now executed solely by the international NGO. 1.28 With respect to rural road rehabilitation and maintenance in particular, labor intensive technologies for rural roads have been employed in a range of countries and have been found to be economically justified. Traditional rural road rehabilitation has emphasized the use of grading equipment and graveling of entire lengths, often neglecting needed drainage works as well as compacting. Newer approaches have successfully emphasized greater attention to drainage works, resulting in a labor content of from 40% to 60% of the total cost of the work. Once a rural road has been rehabilitated, routine maintenance can be provided by an individual who, with simple tools would care for a specific stretch of the road (e.g., 2 km). This approach has been used successfully in many countries, including Brazil and Colombia. New road construction works are not generally suitable for labor intensive approaches, and are not considered in the present project. 1.29 Lessons Learned from Haiti Employment Programs. In May 1995 consultants carried out an evaluation of the JOBS Creation Project for USAID (para.4. 1(a)). The key lessons learned from the project were: - 10 - (a) The project's institutional structures contribUted to its success. Four layers of institutions were involved: (i) the internationial donior: (ii) a Project Management Agency (PADF) with a good network of liks to grassroots organizations: (iii) the grassroots organizations themilselves: and (iv) social groups and associationis that supplied workers for the projects. In particular, the role of the Pr-oject Management Agency was critical: (i) it provided transparency. accountabil i ity and( political neutrality in the selection of both subprojects and implemilenitin g organizations; and (ii) it maintained satisfactory finanicial, technical and management standards. (b) The majority of project resources went directly to the work force. Of total project costs, between 60 and 65% were (lirect labor payments. and another 15% covered the incremental costs of local NGOs. Thus more than 75% of the project costs wenit directly into the subproject areas. The remaining funds coveredl the costs of tools, otlher equipment and materials, and PADF engineering, management and administration. (c) The project improved governance at the local level. T'he project led to more intensive activities by local groups, encouraging skills in group interaction, organization and management. (d) Cash payments were more effective and eefficient than providing food for work. Workers were overwhelmingly pleased with cash payments rather than payments in food or bv other means. whichi have traditionally been used in Haiti. The evaluation showed that workers used cash payments to pay for schooling, seeds, tools arid medical care, in addition to the purchasing of food. The use of cash payments also greatly reduced the project management requirermients that are associated with food for work programs. While many humanitarian relief programs use food distribution, local NGOs adamantly preferred using cash rather than food for paying workers as the distribution of food creates a need for storage, transportation, security and special accounting. (e) Subproject prototypes and standards were very usefuil to proiect implementation. Prototypes and standards allowed the Implementing Organizations with less experience to produce higher quality work and facilitated estimating labor needs and supervising activities. (f) The proiect had flexibility to adiust to unforeseen events. Design flexibility allowed the project to adjust to marked changes in the political and economic climate, which ranged from the international embargo under the military regimen to the restoration of democracy. II. The Project 2.1 Origin. The proposed project was prepared as a result of the Consultative Group Follow-up Meeting held May 11-12, 1995 in Port-au-Prince and on the basis of initial work done on employment generation as part of the preparation of the Second Structural Adjustment and Technical Assistance Credits. During these meetings the Government requested IDA support for the ongoing JOBS Creation Project, financed until now by USAID. and implemented in part by an international NGO, the Pan American Development Foundation (PADF). USAID funds will soon be fully disbursed and Governmient attaches unusually high priority to the JOBS Creation Project as a means to address immediate poverty alleviation objectives, particularly during a politically volatile period and while democratic institutions are still fragile. 2.2 To support the preparation of subprojects and related procurement of tools and equipment, IDA has approved US$705,000 of financing through the Project Preparation Facility (PPF; P-992-HA and P-932-0-HA). In addition, IDB is financing a US$4.6 million shortfall through FAES to permit the current ongoing employment generation program to continue until IDA funds are available for disbursements against labor payments in September 1995. The PPFs will also be used to finance technical assistance required to conduct a more in-depth evaluation of the works being implemented by PADF in order to identify ways to strengthen technical quality and sustainability of works carried out in the project. 2.3 Objectives. The primary objective of the project is to provide short term employment to people in extreme poverty in support of Government's program for poverty alleviation. By doing so, the project would continue support for job creation efforts undertaken since 1993, and achieve other objectives including the improvement of seriously deteriorated economic and productive infrastructure. In addition, the project will strengthen the capacity of national and local government, NGOs and local communiity organizations to manage employment-intensive small scale development projects in the future. 2.4 Summary Description. The project would have the following components: (a) Employment Generation. Contracts covering management, supervision, labor costs and associated equipment, vehicles and materials for high priority small scale development activities, especially in the areas of (i) rural road rehabilitation; (ii) soil conservation (watershed management, erosion control and soil reclamation); (iii) rehabilitation of irrigation and drainage canals; and (iv) urban waste management (solid waste disposal and clearing of waste water ditches). (b) Institutional Development: Training, technical assistance and studies, office space, vehicles, equipment, furniture and other incremental operational support, including staff, to assist (i) the CIU, selected local government bodies, NGOs and other project organizations in the implementation of small scale labor intensive programs on a technically - 12 - sound and sustainable basis; (ii) the establishment of a national autonomous non-government entity offering delegated contract management services; and (iii) the development of a longer term strategy for poverty alleviation, employment and small infrastructure maintenance. 2.5 Rationale for IDA Involvement. The overall Bank Group Country Assistance Strategy for Haiti is discussed in para. 1 .10. The proposed project would immediately and directly support the Government's objectives of growth and employment creation, poverty alleviation and environmental rehabilitation by financing subprojects for the rehabilitation of economic infrastructure (roads, irrigation, drainage), and environmental management (soil conservation, waste management). The draft Country Assistance Strategy being prepared for Board Presentation in FY96 with the proposed Second Structural Adjustment Credit supports these objectives. The Haiti Employment Generation Project would provide a transition between the emergency nature of the JOBS Creation Project and the longer term development agenda by addressing issues of works sustainability and sectoral linkages, especially for maintenance, and issues of decentralization and governance, through institutional development and training for local implementing organizations. 2.6 Program Objective Categories. As described above, most project activities and benefits are related to employment generation for the target poverty group for work programs related to productive agriculture, transport and environmental management. Tlherefore the project would be designated as belonging to the Program Objective Categories of (a) Poverty Alleviation and (b) Environmentally Sustainable Development. The project would be included in the Poverty Category: Program of Targeted Interventions. 2.7 Detailed Description - Employment Generation Component (US$51.4 million). The objective of this component would be to create temporary jobs for the equivalent of about 40,000 people per month and a total of about 490,000 person- months, who in turn would support nearly 1.6 million family members (Annex 1, Table 2). The component would also improve productive infrastructure and the environment. The project would finance labor costs and related equipment and management costs of subprojects to be executed by local NGOs and communities covering the following activities: (a) Rehabilitation of Rural Roads, including culverts, and bridges. (b) Rehabilitation of Irrigation and Drainage Canals, including cleaning. (c) Soil Conservation: Watershed protection, erosion control, soil reclamation. (d) Waste Manazement: Urban solid waste disposal and clearing urban waste water ditches. - 13 - 2.8 Besides these four subcomponents, it may be possible to include other activities agreed between the Government and IDA if they have a high labor content and positive economic, social and environmental impacts. 2.9 Within each subcomponent, selection of individual subprojects use the following criteria: (a) Geographical coverage: Wide geographical coverage including the poorest sections of the country, both rural and urban. (b) Implementing Organization: Capability and availability of the proposed Implementing Organization (10) in the subproject area to manage the administrative and technical aspects of the subproject. (c) Poverty and social orientation: The most disadvantaged groups would be targeted, and at least 20% of workers would be poor women. (d) Economic and social utility: To select projects which provide the greatest economic and social benefits. (e) Technical soundness: Minimum technical standards would be a condition for eligibility. (f) Labor content: Labor costs be about 60% of the total costs of the project, unless otherwise agreed. (g) Sustainability: Subprojects where local commitment has been demonstrated to finance and undertake a maintenance program and to contribute to costs of initial investment. (h) Ease and speed of implementation: Preference to projects that can be completed in fewer than four months and that are simple in terms of logistics. (i) Accountability: Labor inputs would be measurable and verifiable. (j) Environmental screening: Environmentally risky projects would be excluded or would be subject to prior approval by IDA. 2.10 Targeting mechanisms. The Employment Generation Component would target the poorest groups, both in rural and urban areas. In addition to the equity reasons for doing so, there are efficiency reasons as well, because the poor have the lowest opportunity costs for their labor; hence, a project targeted to the poor would be less likely to compete with other productive activities. The project would use a combination of targeting mechanisms: - 14 - (a) Most of the work would involve strenuous physical labor, using hand tools and requiring workers to walk long distances to the subproject site. (b) Workers would be selected by the Implementing Organizations, usually NGOs, which would involve a measure of self-selecting those who have invested their own time in participating in NGO meetings and other activities. (c) Workers would contribute one day of free labor for each five days of paid labor. This targeting mechanism would serve another important function by freeing up part of the project's financial resources to permit the employment of more people. (d) Workers would work a maximum of six weeks to permit other workers to participate. . 11 Detailed Description - Instittitional Development Component. (US$5 million) The objectives of the institutional development component would be to: (a) strengthen the technical quality, local government and 10 participation, sustainability, and employment generation aspects of the individual subprojects financed; and (b) develop local institutional capacity and plans for continuing the financing and implementation of labor-intensive small scale public works programs. 2.12 In order to achieve these objectives, the following activities would be financed (see also annex 2): (a) Consultant services to conduct half-yearly technical, financial, managerial and environmental evaluations and quarterly financial audits. The first half-yearly evaluation would cover the period ending September 30, 1995 and be due by November 30, 1995, and include a rapid appraisal of the experience of the USAID-financed JOBS Creation Project to evaluate the experience and identify further ways to strengthen the technical quality, sustainability and employment generation aspects of the subprojects, as well as to develop and improve local government and 10 participation. (b) Technical assistance, training and office equipment and supplies to strengthen the capacities of local governments and lOs to identify, prepare, implement, manage, and maintain labor intensive economic development subprojects. Institutional development activities would build on the recommendations of the appraisal above and the MTPTC experience in rural roads maintenance. Technical assistance would also include governance issues to enhance responsiveness to high priority poverty groups through participatory methods. - 15 - (c) Consultant services and workshops to develop works maintenance and long-term institutional strategies in consultation with communities, NGOs and communal governments, as well as the establishment of an institution to serve as a delegated contract management agent. (d) Technical assistance, training, vehicles, office equipment and supplies, and incremental recurrent costs as well as office space to strengthen the capacity of the CIU to supervise and manage the project, including management, reporting, monitoring and evaluation. Funds would also be made available for studies agreed with IDA related to project objectives, translating the Staff Appraisal Report and other project documents, for projects evaluations and auditing as well as preparing other documentation relevant to the project. (e) A review of the Haitian Public Procurement Act. Although under the executive order that established the CIU, the CIU is not subject to the provisions of the Act, a review of the Act, with a view to making needed modifications, would be useful in the context of possible future externally assisted development projects. 2.13 Costs. The project is estimated to cost US$56.4 million equivalent. Foreign costs would represent about 12% of total project costs and the implementing agency is exempt from taxes. Average subproject costs are estimated at US$360,000 equivalent. Since subprojects are yet to be identified, and would be implemented over a short period (about one year), neither price nor physical contingencies have been calculated. Any increase in the expected average subproject costs would lead to a reduction in the number of projects to be financed. The estimated sectoral distribution in the project cost tables reflects past PADF experience in the JOBS Creation Project. Costs were converted at the prevailing market rate for foreign exchange (US$1 = G14.7). Project cost tables are presented in Annex 3, Tables 1-3. 2.14 Financing. US$50 million would be financed by the IDA Credit, and the remainder by the Government of Haiti, participating NGOs and beneficiaries (see financing plan in Annex 3, Table 4.) During the JOBS Creation Project about 5-10% of subproject costs have been financed by NGOs themselves. During project implementation mechanisms for increasing direct contributions by the NGOs, local communities and beneficiaries, e.g., of labor and material, would be explored, both to stretch project financing to create more jobs and as a self-targeting mechanism. 2.15 IDA would finance a high percentage of local and total costs. Local cost financing and the high IDA cost sharing percentage is justified because of the critical importance of maintaining the ongoing employment generation program during a time of unusually high political and economic uncertainty. 2.16 To smooth the transition from USAID to IDA financing, IDA has approved US$705,000 in PPF financing to purchase tools and hire staff to assist organized groups - 16 - to prepare subprojects, and thereby maintain the current level of 40,000 persons now employed by the JOBS Creation Project per month (para.4. I(b)). 2.17 Organization and Management. The Government implementing agency would be the Central Implementation Unit (CIU) of the Prime Minister's Office, which would have responsibility for overall project planning, monitoring and evaluation The governing board of the CIU is a Cabinet level Steering Committee chaired by the Prime Minister, which is responsible for overall planning and establishment of policy; the operational head of the CIU is a Director General (see CIU Organization Chart in Annex 2). To implement the project, the CIU would engage full time professional staff or consultants covering the areas of: Project Coordination, engineering (for rural roads, soil conservation and irrigation and drainage), agronomy, environmental assessment and accounting (some staff may cover more than one area). If there are additional staff requirements, they could be engaged on a temporary basis from consulting firms, rather than being hired as CIU contractual staff. 2.18 During negotiations an assurance was obtained that the CIU would maintain adequate staff and/or engage consultants/consulting firms with qualifications and experience satisfactory to IDA to carry out the project (para.4.2(a)). 2.19 For support in program planning, implementation and supervision of subproject execution, the CIU would contract with Project Management Agencies (PMAs; in French: Maitre d'Ouvrage Del6gue - MDOD). The initial PMA would be PADF (see PADF Organization Chart in Annex 2), which has been successfully carrying out the USAID-financed JOBS Creation Project, although provisions would be made for involving other possible PMAs during the course of the project. One of PADF's responsibilities would be to provide technical assistance to identified potential PMAs. During negotiations an assurance was obtained that agreements with PMAs would be on terms and conditions satisfactory to IDA, and the first such agreement was signed, between the CIU and PADF, on June 8, 1995 (para.4.1(c)). 2.20 Subprojects would be implemented by local NGOs, community organizations, local government bodies and private firms known collectively as Implementation Organizations (1Os). Subproject proposals would be submitted to a PMA and to the CIU. The PMA, under its contract with the CIU, would, in collaboration with the CIU, provide technical assistance for subproject preparation, screening, appraising, supervising, monitoring and evaluating, procure hand tools and other needed equipment, and make the required payments to the lOs. Final decisions regarding subproject selection would be the responsibility of the CIU and the CIU would furnish to IDA a work program each quarter describing the proposed subprojects for IDA review and approval. During negotiations, an assurance was obtained that subprojects would be executed on the basis of technical, financial, environmental, managerial and other specifications and procedures described in operating manuals acceptable to IDA (para.4.2(c)). 2.21 Procedures used by the JOBS Creation Project would be adopted by the project with a few revisions designed to improve technical quality (e.g., road compacting and - 17 - improved use of construction materials), and to increase linkages with local government authorities and line ministries, such as the maintenance program of the MTPTC. 2.22 In particular, local government authorities would become the focus for local planning, with technical assistance provided to help stimulate planning for and creation of proposals for subproject financing to NGOs or Municipal Governments (Communes) themselves. 2.23 Local Community Participation and NGOs. The JOBS Creation Project, as currently financed by USAID, is being implemented by local community associations and NGOs and a few communes, and a number of these were consulted during project preparation and appraisal. The present project would continue this practice and strengthen their role by: (a) Providing training for subprojects requested by grassroots organizations and local governments. (b) Involving these organizations in planning for and conducting routine maintenance on completed works. (c) Strengthening the role of the local government and its subdivisions (municipalities and CASECs) in the identification, planning and maintenance of employment generation works. 2.24 As discussed above, one of the selection criteria for potential subprojects would be the willingness of the proposed IOs to make labor or in-kind contributions to the subproject. Typically, this will include an 10 contribution of management and other overheads of about 5% of total subproject costs, and a contribution by direct beneficiaries of one day of free labor for each five days of paid labor. Among other things, this selection criterion will help ensure that the proposed subprojects are a priority for the lOs and beneficiaries. 2.25 Procurement. Under the executive order that established the CIU, the CIU is not subject to the provisions of the Haitian Public Procurement Act. Thus, CIU's procurement process may follow the rules of the bilateral and multilateral institutions that finance the projects it coordinates. As a consequence, no special provisions are required in the Development Credit Agreement to ensure that IDA procurement guidelines take precedence over certain provisions of the Act that have been found inconsistent. In addition, the initial PMA (PADF) has considerable experience in procurement of goods and works for subprojects in Haiti as a result of its implementation of the USAID-financed JOBS Creation Project and can be relied upon to manage the procurement of its part of the project in an economic and efficient manner. 2.26 The proposed procurement arrangements for the project are summarized in the following table and an assurance was obtained during negotiations that the CIU and the PMA(s) will follow these arrangements during project implementation (para.4.2(d)). - 18 - 2.27 Community Participation and Direct Contracting. In accordance with paragraphs 3.7 and 3.15 of the Guidelines for Procurement of Goods and Works (January 1995), the appraisal mission reviewed special procedures to facilitate direct contracting and the participation of the lOs in the implementation of the project. The proposed arrangements, which were reflected in the operational manual agreed during negotiations, provide that the PMA select the most appropriate procurement procedure according to the subproject in question. To the extent possible, procurement of works and goods for subprojects would be carried out using lump-sum contracts (for small works) and shopping (for goods). Direct contracting would apply to works and goods under subprojects, which are located predominantly in isolated rural areas and where competitive proposals cannot be obtained. Such direct contracting would be subject to an aggregate contract value of US$30 million for works and US$2 million for goods. In each case, the final decision on the appropriate procedure should take into account the type and size of the subproject and its geographical coverage. Details about criteria for the selection, documentary evidence required for the expenditures and monitoring of the procurement process appear in Annex 1. Purchases of hand tools and some equipment and vehicles for subprojects would be made centrally by the PMA(s) using international shopping procedures, which will not exceed US$500,000 per contract and US$5 million in the aggregate. 2.28 Works. For the Employment Generation component, works would be included in the contracts signed between the CIU and PMA(s) and would follow the procurement procedures outlined above. There are no civil works expected for the Institutional Development component; however, if certain civil works are required during the implementation of this component, e.g., refurbishment of CIU offices, they would be small in size (certainly under US$150,000 per contract and not to exceed US$2 million in the aggregate) and it is unlikely that foreign contractors would be interested. Accordingly, procedures for procurement of small works acceptable to IDA would be used (lump-sum contracts awarded on the basis of price quotations from three eligible contractors, provided that they have the experience and resources to complete the contract successfully). 2.29 Goods. Goods for the Employment Generation component, e.g., hand tools, would be included in the PMA contracts, and would be procured following the shopping and direct contracting procedures outlined above. For the Institutional Development component, contracts for goods exceeding US$150,000 (if any; there are none expected) would be awarded through International Competitive Bidding (ICB) following IDA procurement guidelines and using IDA-issued Standard Bidding Documents. Contracts for goods expected to cost between US$50,000 and US$150,000, not exceeding an aggregate amount of US$3 million, would be procured under NCB (if any; there are none expected). Office equipment and supplies, furniture and other similar goods expected to cost less than US$50,000 per contract would be awarded on the basis of an evaluation of price quotations invited from at least three suppliers, provided they do not exceed an aggregate of US$3 million. - 19 - 2.30 Consultant services, training and studies. The World Bank's "Guidelines on the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" (August 1981) will govern consultancies financed under the project. 2.31 Review by IDA. Although no ICB or NCB is expected, ICB contracts, and the first two NCB contracts for goods or works would be subject to prior IDA review of bidding documents, bid evaluation, award proposals and final contracts. Prior review of all consultant contracts and selection processes would be required for contracts with firms exceeding US$50,000 and with individuals exceeding $30,000. IDA prior review would also be required for the terms of reference for all consulting services contracts. Approximately 80% of consulting services contracts would be subject to prior review. While the overall level of prior review is relatively low, it is considered acceptable in light of the audit arrangements for the project, and procurement would be specifically included in the terms of reference for the financial audits (para.2.39). - 20 - Table 2.1: Procurement Arrangements (US$ million) TOTAL Category ICB NCB OTHER NIF COST Works For subprojects 46.3 46.3 (39.9) (39.9) For CIU 0.1 2 0.1 (0. 1) (0.1) Goods For subprojects 5.0' 5.0 (5.0) (5.0) For CIU 0.2 ' 0.2 (0.2) (0.2) Technical Assistance, 4.5 4 4.5 Training and Studies (4.5) (4.5) Incremental Operating 0.3 0.3 Costs (0.3) (0.3) Total 56.4 56.4 (50.0) (50.0) Note: Figures in parentheses are the respective amounts expected to be financed by IDA. l/ Simplified commercial procedures (lump-sum contracts for small works and shopping for goods) and direct contracting. 2/ Procedures for small works satisfactory to IDA. 3/ Shopping procedures satisfactory to the IDA. 4/ Consulting services. 2.32 Disbursements. The proposed IDA credit would be disbursed over about 19 months, starting in late July/early August 1995. The project completion date would be September 30, 1996 and disbursements are expected to be completed by December 31, 1996. The formal Credit Closing Date would be March 31, 1997. 2.33 IDA would disburse at a rate of 100% for all project expenditures except those contributed by lOs and the beneficiaries themselves. Annex 3, Table 5 shows the allocation of Credit proceeds. Expenses for subprojects will only be eligible for IDA disbursement if included in a quarterly work -21 - program approved by IDA; the first such quarterly report would be furnished within one month of Credit effectiveness (para. 4.3). 2.34 The estimated disbursement schedule (Annex 3, Table 6) is based on the disbursement experience of the JOBS Creation Project currently being implemented by PADF, and does not reflect the standard disbursement profile for IDA projects in Haiti, which, among other things, may be considered misleading because it includes data from the turbulent period during 1991-94 when disbursements were very low. 2.35 The Borrower would establish a Special Account in US dollars in the Central Bank of Haiti, with an authorized allocation of US$1.5 million, equal to about four months' estimated average disbursements, net of payments to PMAs, which would be made directly. For this purpose a PMA would establish a separate bank account for project funds. 2.36 Because of the critical nature of effective project start-up, including the early procurement of hand tools that will be required immediately when subprojects begin in September 1995, retroactive financing would be provided for up to 10% of the IDA Credit for project activities incurred after June 1. 1995. Initial payments for tool orders and related contractual services needed to maintain current levels of employment during the transition from USAID to IDB financing is being financed by PPFs P-929-HA (US$750,000) and P-932-0-HA (US$205,000). 2.37 All disbursements that do not have a prior review requirement would be made on the basis of statements of expenditures (SOEs). including subprojects. Use of SOEs for goods and works would be limited to contracts costing less than US$50,000 and US$150,000. respectively. Use of SOEs for consultant services would be limited to contracts with consulting firms or individuals costing US$50,000 or US$30,000 or less, respectively. 2.38 Information required for the SOEs would be available in the project data base, updated monthly by the PMA(s) and submitted to the CIU. Supporting documentation would be made available to IDA for review. 2.39 Accounts and Auditing. The CIU and the PMA(s) would maintain separate accounts for project expenditures. An assurance was obtained during negotiations (para.4.2(e)) that: (a) these accounts would be audited every quarter by independent auditors satisfactory to IDA; and (b) the audit report of project accounts, including a separate opinion on Statements of Expenditure (SOEs), and the financial statements themselves, would be provided to IDA within 2 months of the end of each quarter. The first report would be due November 30. 1995 for the quarter ending September 30. 1995. Expenditures related to the audits would be eligible for financing under the Credit. The audit reports would convey the auditor's opinion and comments as necessary on the methodology employed in the compilation of the statements of expenditures, their accuracy, the relevance of supporting documents, eligibility for financing in terms of the project's legal agreements, and standards of record keeping and internal controls related to the above. The TOR for the auditors would also include a specific analysis of compliance with procurement procedures, including physical audits as appropriate. 2.40 Monitoring, Reporting and Evaluation. Responsibilities of the Implementing Organizations (the local NGOs and community organizations) with respect to reporting would be specified in the contracts between the lOs and the PMA(s). The CIU and the PMA(s) would regularly collect and analyze data on key indicators to monitor progress in physical execution and assess project impact, comparing the results - 22 - with the pre-project estimates. The PMA(s) would prepare and send to the CIU quarterly progress reports within 15 days of the end of the quarter. The overall CIU quarterly report, the PMA reports and copies of the studies carried out during project implementation would be sent to IDA within 30 days of the end of the quarter. The quarterly reports would both describe progress in project execution, and identify possible implementation issues and propose appropriate solutions. The format for quarterly reports, and project implementation and impact indicators, are in Annex 4. 2.41 IDA would supervise the project regularly, and an assurance was obtained during negotiations that IDA would receive copies of quarterly project progress reports in an agreed format within 30 days of the end of the quarter (para. 4.2(f)). 2.42 In addition to the quarterly reports prepared by the CIU/PMA(s), there would be half-yearly independent evaluations of project implementation carried out by an outside firm. The evaluations would cover technical, financial, managerial, environmental aspects of the project under TOR acceptable to IDA. As with the half-yearly financial audit reports, during negotiations, an assurance was obtained that these evaluations would be submitted to IDA within two months of the end of the semester (para. 4.2(g)). TOR for the evaluations are in Annex 2 and the first such evaluation would be due November 30, 1995 for the semester ending September 30, 1995. Expenditures related to these evaluations would be eligible for financing under the Credit. 2.43 Since the first half-yearly evaluation will cover the start-up period of the project up to September 1995, it would focus on the issue of sustainability of both the employment generation program and of the specific investments. Among other things, this assessment would complement the review of the USAID- financed JOBS Creation Project carried out in April-May 1995, as well as review the lessons learned in other countries (para. 1.24). Terms of reference (TOR) for this first half-yearly evaluation are in Annex 2 and include the following: (a) Characteristics of the AGETIP-model that would be used in developing the model for the Haitian PMA(s) to be established under the project. (b) Strengthening of the rural road unit linked to the Ministry of Public Works, Transport and Communications (MTPTC) that would adopt approaches tested and proven by the JOBS Creation Project, with future employment generation programs related to roads handled by this unit in conjunction with local authorities. (c) Strengthening of soil conservation and irrigation/drainage functions in MOA by similar means, with future employment generation programs related to soil conservation handled by MOA in conjunction with local authorities and community groups. (d) Measures to return garbage collection responsibilities to local urban authorities. - 23 - III. Project Analysis 3.1 Economic analysis. A recent independent evaluation of the ongoing PADF program concluded that the economic benefits on a net present value basis are high. For individual families, the immediate difference in household income and nutritional levels provided by the project's direct employment generation income is expected to be substantial. While most of the wage income was used for buying food, some income was invested in schooling, medical care, improved seeds, livestock and other assets. Other direct economic benefits would include the productive impact of irrigation, drainage and soil conservation works. 3.2 One measure of project economic performance is its cost effectiveness in achieving its job creation objective. The cost per job in subprojects under the JOBS Creation Project averaged about US$1.80 per person per day, which compares favorably with the performance of job creation projects elsewhere. For example, although in an Indonesian rural works program the costs per job were lower at US$1.10 per person day, in similar projects in Kenya and the eastern Caribbean the costs per job were US$3.20 and US$23.90 per day, respectively. In the JOBS Creation Project, irrigation and drainage subprojects have been the most cost efficient at US$1.54 per day, followed by soil conservation at US$1.82. road rehabilitation at US$1.83, and garbage collection at US$1.89. 3.3 The independent evaluation of the JOBS Creation Project estimated that the net present value (NPV) of the irrigation and drainage subprojects is US$15.3 million at a discount rate of 15% and the economic rate of return (ERR) is 70%. Road rehabilitation had an NPV of US$4.1 million and an ERR of 32%. Soil conservation had an NPV of US$710,000 and an ERR of 23%. 3.4 Although the JOBS Creation Project benefits were intended to help those at the lowest level of subsistence, a wide spectrum of other individuals benefitted as well, including school children, area farmers, truck drivers, and small business operators, according to a survey carried out. The amount received from the project during a three week period represented 15% of average household cash expenditure in the urban areas. Only 16% of those who worked in the project had been previously employed in work other than farming. In many cases local vendors established themselves along the job sites selling food. Workers gained increased access to credit due to their employment status. Rehabilitated roads resulted in reduced travel time and vehicle operating costs and increased access to markets and services, including health and education. Road repairs increased efficiency of travel time by 32%. The drainage and irrigation rehabilitation permitted an increase in crop diversity and crop yields. The waste management activities contributed to a lower risk of disease in urban centers, although these effects have not been quantified. As part of the project's monitoring and evaluation plan. the project would finance a study to evaluate direct and indirect economic benefits of project investments. TOR for the study are in Annex 2. 3.5 Social aspects. The project would target the poorest members of the Haitian society. including unemployed and women. All the organizations interviewed for the evaluation of the JOBS Creation Project said that there were few alternative sources of employment in the project areas. To benefit the maximum number of people no one would be employed for more than a month and a half. This targeting mechanism would make it less likely that currently employed people would abandon their jobs to work for the project. Of the individuals who responded to the surveys carried out during the evaluation, 54% said they bought some food with the money, 26% bought a radio, 14% purchased some medicine, 22% invested in animals and 22% said they spent some money to pay for schooling. As in the JOBS Creation - 24 - Project. the Employment Generation Project would require that a minimum of 20% of all jobs be for women. Besides the equity reasons for this targeting there are efficiency considerations as well. Stories collected in project sites suggest that women are better savers than men, and that women's salaries are more equitably distributed among family members than men's salaries. 3.6 Environmental aspects. The project has the environmental classification "B." The Credit would finance: (a) rehabilitation of roads; (b) rehabilitation of irrigation and drainage works; (c) environmental protection (gully control, soil and water conservation); and (c) waste management (urban solid waste disposal and clearing of urban waste water ditches). Subprojects would be small with an average cost of US$360,000 per project. No new infrastructure would be established. The project would have a positive environmental impact, especially through the components dealing with soil conservation and waste management. 3.7 The only activity considered to have possible adverse environmental impacts is waste management, which must deal with general issues associated with landfill sites. Creation or expansion of landfill sites would be subject to an environmental assessment (EA) satisfactory to IDA, following the practice utilized by USAID in the JOBS Creation Project. 3.8 Each subproject would be subject to simple environmental screening to be carried out by an environmiental specialist in the CIU, who would consult with the Minister of Environment on issues raised by specific subprojects. A simple environmental checklist would be filled out for each subproject. The checklist would evaluate short and long-term impacts and make one of three alternative recommendations: (a) The subproject does not have adverse environmental impacts and can proceed as proposed. (b) The subproject has minor adverse environmental impacts and small mitigation measures would have to be taken. In this case, the environmental specialist would prepare the mitigation measures to the designated counterpart in the PMA. (c) The subproject could have major adverse environmental impacts and an Environmental Impact Assessment, acceptable to IDA, would have to be carried out. In this case, the environmental specialist would propose the TOR for and supervise the EA. Both the TOR and the EA would be cleared by IDA before the subproject could proceed. Based on the experience of the Jobs Creation Project, this third case is only expected to occur with projects involving the creation of new landfill sites. 3.9 During negotiations an assurance was obtained that the environmental checklists would be completed for each subproject and that an environmental assessment specialist would be contracted by the CIU within one month of Credit effectiveness (para.4.2(h)). 3.10 Sustainability. There are two issues related to sustainability. First, there is the question of the sustainability of the works to be rehabilitated under the project, and necessary linkages for their post- project maintenance by the responsible sector line agencies. - 25 - 3.11 Second, there is the question of the sustainability of the employment generation program itself, including whether, in the longer run, such activities should be implemented by a special body such as the CIU, and, more broadly, how temporary employment programs should fit, if at all, into an overall strategy for poverty alleviation and economic development. Both of these questions would be directly addressed by studies and technical assistance in the project's institutional development component. In particular, the first half-yearly independent evaluation of the project would focus on these sustainability questions (see para.2.43). 3.12 Summary of project benefits. A detailed list of implementation and impact indicators is in Annex 4, Tables I and 2. The project would have four main categories of benefits: (a) Poverty reduction: The project is targeted at the poorest sectors of Haitian society and thus it would benefit the poor directly. Although the jobs created are short term, according to past experience part of the wage income would be reinvested in schooling, tools, seed, which would have long term impacts. The project would require that 20% of all jobs go to women, which are the most disadvantaged group. (b) Sustainability of institutions: By reaching an important share of the population it would help sustain expectations about improved governance and help necessary institutions develop. Moreover, because implementation is through local lOs, the project would help strengthen grassroots organizations. (c) Improved infrastructure: The project would help rehabilitate physical (roads, irrigation, drainage) and natural (soils) capital, a key obstacle to economic growth in Haiti. Increased economic output at lower cost and increased agricultural productivity would generate economic growth and benefit the Haitian economy as a whole. (d) Improved environment: Garbage collection and vector control in urban centers would reduce health hazards in population centers, benefitting the urban poor directly and reducing health costs in the country. 3.13 Risks. The project faces many risks. There are political risks that are inevitable in the current Haitian context, including possible events adversely affecting project implementation arising from the Presidential elections in December 1995 and a change of Government administration in February 1996. There are also managerial and technical risks; both the capacity the CIU to implement the project and the ability of the sector line agencies to maintain project investments in the post-project period are uncertain, although the project will help mitigate these risks through the institutional development component. In addition, although PADF has performed well until now, Government recognizes that the program is unduly dependent upon the continued participation of this international NGO. However, while Government hopes that other organizations will develop the capability to help manage the project in addition to PADF, and the project will support this objective, the likelihood of such organizations developing this capability in the short term is not certain. Finally, there are risks that the project could distort incentives in the local economy; some of the public works to be carried out under the project would provide private benefits, such as irrigation and drainage rehabilitation, and could reduce incentives for private rehabilitation of such works. 3.14 Despite these risks, the project should be seen as an intense labor generation effort, with immediate and critical short term benefits, which will also help support the development of more - 26 - sustainable approaches in the future. Moreover, the considerable success of the ongoing JOBS Creation Project makes it more likely that the proposed project will be successfully implemented. - 27 - IV. Agreements and Recommendation 4.1 Actions already carried out. (a) Preparation of an independent evaluation of the ongoing USAID-financed JOBS Creation Project (para. 1.29). (b) Establishment of PPF financing for the project (para. 2.16). (c) Signing of the first PMA contract, between the CIU and PADF (para. 2.19). 4.2 Assurances were obtained from the Borrower during negotiations that: (a) The CIU would maintain adequate staff and/or engage consulting firms with qualifications and experience satisfactory to IDA to carry out the project (para. 2.18). (b) Contracts with Project Management Agencies would be on terms and conditions acceptable to IDA (para. 2.19). (c) Subprojects would be executed on the basis of technical, financial, environmental, managerial and other specifications and procedures described in operating manuals acceptable to IDA (para. 2.20). (d) Procurement arrangements would be as described in Chapter 2 (para. 2.26). (e) Accounting and auditing arrangements would be as described in Chapter 2 (para. 2.39). (f) Reporting arrangements would be as described in Chapter 2 (para. 2.41). (g) Half-yearly independent evaluations of the project would be carried out as described in Chapter 2 (para. 2.42). (h) Environmental checklists would be used as described in Chapter 3 and an environmental assessment specialist would be contracted by the CIU within one month of Credit effectiveness (para. 3.9). 4.3 Conditions of disbursement. Expenditures for subprojects would only be eligible for IDA financing if included in a quarterly work program approved by IDA; the first quarterly work program would be furnished to IDA within one month of Credit effectiveness (para. 2.33). 4.4 Recommendation. Subject to the above agreements and conditions, the proposed project would constitute a suitable basis for an IDA Credit of SDR 31.8 million (US$50 million equivalent) to the Republic of Haiti, repayable in 40 years, on standard IDA terms. I HAITI EMPLOYMENT GENERATION PROJECT ANNEXES Annex 1: Employment Generation Component Attachment: Eligibility Criteria for PMAs Tables: 1. Distribution of Component Costs 2. Monthly Projections Charts: 1. Subproject Cycle 2. Fund Flows for Subprojects 3. Fund Flows for Institutional Development Component Annex 2: Institutional Development Component Attachment: Decentralization Policies and Structure of Local Government in Haiti Charts: 1. CIU Organization Chart 2. PADF Organization Chart Terms of Reference: 1. Half-yearly evaluations 2. Economic evaluation of project investments Annex 3: Costs, Financing and Disbursement Tables: 1. Summary Costs by Component 2. Annual Costs by Component 3. Institutional Development Costs 4. Financing Plan 5. Allocation of Credit Proceeds 6. Estimated Schedule of IDA Disbursements Annex 4: Project Reporting Tables: 1. Implementation and Impact Indicators 2. Financial Indicators 3. Status of Compliance with Legal Covenants Annex 5: Documents in the Project File MAPS IBRD No. 27090 Haiti - Physical Features IBRD No. 27091 Haiti - Administrative Divisions I Annex 1 Page 1 of 5 HAM EMPLOYMENT GENERATION PROJECT Employment Generation Component Overview 1. The objective of the Employment Generation Component is to quickly provide short term temporary jobs for Haiti's most impoverished people and improve severely deteriorated public infrastructure and related services. This component builds directly upon employment generation activities financed until now by USAID under the largest component of its JOBS Creation Project, and implemented by an international NGO, the Pan American Development Foundation (PADF). USAID funds will soon be fully disbursed and Government attaches unusually high priority to continuing their Employment Generation Program as a mean to address immediate poverty alleviation objectives, particularly during a politically volatile period and while democratic institution are still fragile. 2. The overall program target is to create about 490,000 person/months of short term work employing up to 325,000 people throughout the country in a 13-month period from September 1995 to September 1996. It is expected that each worker will work an average of 6 weeks. The rate of job creation will depend on the rate at which subprojects are selected, planned and implemented. Interim targets are as follow: Period Average Persons Working Work Created Each Day (Person/Month) (by PMA) Sept 95 - Jan 96 40,000 200,000 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (PADF) Feb 96 - July 96 20,000 120,000 (PADF)__ _ _ _ _ _ _ Oct 96 - Sept 96 15,000 167,000 (other PMAs) Total 13 months approx 37,000 487,000 3. Implementing Entities. The Government implementing agency will be the Central Implementation Unit (CIU) of the Prime Minister's Office. With respect to the Employment Generation Program, the CIU's Steering Committee headed by the Prime Minister, and which includes the Minister of Planning, the Minister of Finance, the Governor of the Central Bank, and Annex 1 Page 2 of 5 any other ministers interested in subproject activities, will be responsible for the overall programming approval as well as basic sets of subproject selection criteria. The subproject selection will be made jointly by the CIU and the relevant PMA. Eligibility criteria for PMAs include their legal status, managerial and administrative capacities, their network of implementing organizations and their job creation capacity (see Annex 1, Attachment). The final subproject approval will be the responsibility of the CIU which will also be responsible for overall project planning, monitoring and evaluation. 4. The PMA will in turn enter into agreements with established and recognized local and international NGOs and community organizations which will carry out individual subprojects. The CIU will be responsible to ensure that appropriate local government officials are informed of the program and available to provide support if needed. During project implementation, the PMA will work with local governmental entities for identification and planning of subprojects which involve government owned infrastructure facilities or government services (such as solid waste disposal). Subproject Cycle 5. The implementation of the Employment Generation Component will involves the identification, selection, preparation, and implementation of specific subprojects. The nature of each of these phases is described below. a. Identification 6. Potential subprojects would be identified through requests received by the CIU and the PMA from local governments, NGOs and community groups. Currently PADF has a list of over one hundred requests that could be considered for inclusion in the first tranche of subprojects to be financed beginning in September 1995. The institutional development component (see Annex 2) would finance a program to provide planning assistance for a limited number of local governments that would assist them in the identification and initial prioritization of subprojects to be proposed for financing. b. Selection 7. Proposals would be initially screened to make sure that they are consistent with the general guidelines to be established by the project Steering Committee. These guidelines will establish targets for job creation and geographical coverage of the program, and will limit the types of works to be considered (currently proposed to be rural roads, irrigation rehabilitation, soil conservation works, and garbage collection). Once screened, subprojects would be selected jointly by the CIU and PMA, using agreed criteria to select and then prioritize potential subprojects. During negotiations, the general guidelines and specific selection criteria were confirmed. The evaluation criteria for subproject selection and prioritization would address the following factors: a. Geographical coveraee: Wide geographical coverage including the poorest sections of the country, both rural and urban. b. Capacity of Implementing Organization: Whether the proposed implementing organization has the capacity to manage the administrative and technical aspects of the subproject. Annex 1 Page 3 of 5 C. Poverty orientation: Whether the subproject is likely to reach the poor of the region. d. Economic and social utility: A subproject must be useful to the broader community; "make work" activities that do not meet a clear need, or subprojects which only benefit a few private individuals will not be accepted. Priority will be given to subprojects which benefit and employ those most in need. e. Technical soundness: The subproject must be of high technical quality and be maintainable after completion. f Labor content: To maximize the number of jobs created with limited funds, preference will be given to subprojects with high labor content. On average, at least 60% of subproject cost will be for labor. g. Sustainability: Subprojects where local commitment has been demonstrated to finance and undertake a maintenance program and to contribute to costs of initial investment. h. Ease and speed of implementation: Simplicity in terms of logistics and technical supervision will be an important factor. Preference will be given to subprojects which can be completed within one to four months. i. Accountability: Subprojects must meet GOH and IDA program and resource accountability requirements. This will generally require that labor inputs be easily measured and verified, and that adequate control of tools and material is assured. j. Environmental screening: Subprojects will be screened for potential environmental impact using an IDA approved checklist. Any which fail the screening will be excluded. 8. The PMA, with the assistance of the CIU, would base its analysis of proposed subprojects on: (a) a field review of the organizational, social, technical, and economic aspects of the proposed subproject, and (b) previous experience with the proposed implementing agency and with other subprojects completed in the same geographical area. Once a subproject has been identified as priority for financing, preparation would begin. The infrastructure works, to be carried out under that component are intended to either complement and/or extend ongoing infrastructure rehabilitation efforts. Works are to be labor intensive, of acceptable quality, and utilize sound technical engineering standards. Activities undertaken will be simple in their design and execution, and well balanced in terms of both its rural/urban mix and women/men employment opportunities. c. -Preparation 9. Preparation of the selected subprojects would be conducted by the technical staff of the PMA in collaboration with the implementing organization. During this time the PMA would also provide training to the implementing organization to prepare its role in ongoing implementation. Procedures already established in the PADF component of the USAID JOBS Creation Project would be adopted by the Employment Generation Project with modifications to include two additional activities by the Annex 1 Page 4 of 5 PMA. (a) involvement of local government (the CASECs and Conseils Communales) in reviewing and providing input to the plans for the subproject; (b) development of a maintenance strategy with the local government, the NGO, and communities involved. The average length of time required for subproject preparation would be two to three months. d. Implementation 10. Three basic task will be required to implement individual subprojects after they are selected: (a) organization and supervision of workers; (b) procurement of tools, equipment, material, and services such as transport and technical support; (c) payment of workers and financial accounting. Prior to implementing a subproject, the PMA will assess, in close collaboration with the CIU, the capability of the local implementing entity to carry out these basic tasks and will adjust its technical and institutional support to complement and fill areas of weakness. Generally, the local NGO or community organization will be relied on for selecting, organizing and supervising workers and financial accounting. This distribution of responsibility may vary according to the experience and track record of the local NGO. 11. The organizational and technical guidelines and procedures to be used by the implementing organizations during implementation would be those which have been established for the PADF USAID Jobs Creation program, as modified during project implementation.! These procedures detail, for example, the establishment of work groups (20 persons under one chef d'equipe), the required minimum participation of women (at least 20% of the work force), mechanisms for registering and paying workers, maintenance and reporting of accounts and physical and financial progress, and minimal staffing to manage the works (one engineer and one accountant). e. Supervision 12. Several levels of project supervision would occur. The PMA would actively supervise both the technical and the employment generation aspects of the subproject, through on-site inspectors as well as frequent field visits by headquarters technical staff. In accordance with the existing procedures of the Jobs Creation program, subproject supervision reports would be completed by headquarters technical staff, and the on-site inspectors would visit each work site daily to check attendance of registered workers, in an attempt to avoid the "zombie worker" phenomenon. Quarterly reporting of the status of project implementation would follow the format outlined in Annex 4. 13. The CIU would conduct periodic supervision of a sample of the works and maintenance programs in order to be able to identify general areas of concern for discussion with the PMA. In practice, the CIU may accompany PMA technical staff on some of their supervision visits in order to jointly identify and address issues in the field. The CIU would report on project progress to the Steering Committee and to the Bank on a quarterly basis. ' It is anticipated that there will be some modirication of the technical guidelines based on the evaluation to be conducted during the first four months of the project. Annex 1 Page 5 of 5 f. Initiation of Maintenance Program 14. This phase of activity will apply to subprojects completed before the initiation of the project, in an attempt to increase the sustainability of works completed under the USAID JOBS Creation Project, as well as to subprojects initiated under the Employment Generation Project. Financing would be available from the project to support maintenance activities. 15. For works completed by the JOBS Creation Project, the PMA and CIU would review the status of these works and identify a priority group of subprojects for initiation of a maintenance program. Criteria for selecting these subprojects includes: (a) the existence of capacity and interest of the local government, communities and NGO to carry out maintenance activities; and (b) economic importance of the work and the likely economic returns on maintenance. 16. As works are implemented under the project, technical support would be provided by the PMA for the initiation of the maintenance strategy developed during preparation. It is anticipated that a number of different models for the management and financing of maintenance would be developed, depending on the institutional context of each subproject. Financing for maintenance during the first years after implementation would likely include a combination of local resources with national resources (to be financed by the project). 17. Target beneficiaries. Efforts will be made to ensure that selected workers are among the poorest and longest-unemployed people in a given community. The project will seek to provide at least one month of employment for each selected worker. In order to spread limited resources among a wider group of beneficiaries, the project will generally limit participation of workers to a 1-2 month maximum for the entire program and to no more than one worker per household. Exceptions may be made in the case of skilled workers or supervisors whose continued employment would enable a greater level of job creation. Annex 1 Attachment IAITI EMPLOYMENT GENERATION PROJECT ELGIBILITY CRITERIA FOR PMA/(MDOD) Selection of individual PMAs/MDODs will be based, inter alia, on the following eligibility criteria: 1 - Legal status: Any non-governmental organizations, national or international, registered and/or with all legal authorizations to operate in Haiti. 2 - Managerial and Administrative Capacities: Director of organization must have been appointed for demonstrated competence. Professional staff should have sound competence in contract management (at least three years experience), technical, financial and administrative supervision and monitoring of sub-contracting organizations in the implementation of intensive labor based civil works and/or services as considered by the Project. The organization should have had satisfactory financial audits for at least three years. 3 - Network of Implementing Organizations: A PMA/MDOD is not a contractor nor a work-implementing organization. As an intermediary contract manager, PMA/MDOD will have to prove it can rely on an existing and available network of at least 3 different, authorized and recognized Implementing Organizations located in three different geographical areas working with target beneficiaries. 4 - Job Creation Capacitv: A PMA's initial programming proposal of subproject work should be able to realistically generate at least 3,000 person-months over a continuous six month period. HAITI Annex I Employment Generation Project Table I Employment Generation Component Distribution of Component Costs Cost Categories Cost/job/month % |Assumptlions and sources _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ U S$ Labor 52.27 57% 38.42G/day for 20 davsUSSl=G 14.7 1/ Local Materials 13.33 15% 30% of labor 2/ 10 management cost 6.27 7% 12% of labor Imported Tools 2.48 3% Direct Subproject 74.35 82% PMA Equipment 1.28 1% PMA Staff&Operatlons 9.86 11% PMA local costs 11.14 12% June 1995 PADF I for 0000obs PMA HQ overhead 5.57 6% 6% of all paid costs 3/ Total cosVjob/month 91.07 100% 1/ beneficiaries contribute 6th day per week 2 if materials is 20%, labor participation increases to 61%, and if materials is 40%, labor is 54% 3/ or 5% of costs including labor participation t _ _ _ i Counterpart calculation Beneflclary Total Cost/job/month Contribution (116 10 Cost Project of labor) (Counterpart) Cost US$ USS USS USS Labor 52.27 10.45 62.73 Local Materials 13.33 13.33 10 management cost 1/ 6.27 2.61 8.89 Imported Tools 2.48 2.48 PMA local costs 11.14 11.14 PMA HQ overhead 5.57 _ _5.57 91.07 10.45 2.61 104.1.4 percentages 87.45% 10.04% 2.51% 100% beneficiary and 10 contribution ge __rimuse_u_o_2 12.55% 1/NGO contributes 17% and gets reimbursed up to 12% ___________ ________ ooat/job~~~~~~~~~~~~ C lo~~~~~ m"ts Oa..a6o Componat T.a.pt La..l ndCb.jot SntrlDifb.ut6o __ Job Twg.t month Lavata (US$1. SePt-mbi Ooob. Non-bar Dacambar Toal195__4y,,,,,, Feb-ty Mach A. May I'o. Total 1996-1 4JOY,,__ Auguan Spot-nbm oa 962 rn oa PADS 0,0 40,000 40,00 4,0 76.00 40,000 20,000 20,000 2,0,,,,g0~ 20,000 20,000 740,000 20,000 _____ 20,000 320.000 OtharPMA. 3,000 ,,,,,,,599__ ,000 76000 12,000 17,000 17,000 19,500 15,500 1 9,500 - 1 19,00 1 5,000 - 1,D 13,500 46,500 167.000 T.t.1 ____ 0 _______ _______ .800 16O 200 7000 37,000 - 39.500 39.500 39.500 244.500 36 000 is.000 13.500 66.500 487.000 17 91.0? 3,942,706 15,909 -4,059.044 4,37,,fl247 M76027,906 4,735,510 3,39,503 -3,399,50 3,597,172 - 3,597,172 3,5571 172 22265,040 3,450,571 1,309,015 1,229,4i3 6,0599 44.349,945 PADS 2/ 400,000 4_____0__ 0 ___-0 0 -___ 0 ----0.2000 Oth. PMA. 31250,000 290,000 _____0 _____0 260,000 job. ____ 3,642,70 3979.909 4,098.044 4.371.247 -16,677.906 4.735,518 _3,369,503 3.369.503 - 2597,772 ... 3,597.772 3.5997172 -22,266.040 374609577 1,366,075 17229,473 6.059,999 44,999,945 C-poota tbotion --ssoti-oroa 301 1,092,512 1,174,773 _29,4%13 _1,311,374 4,808372 1.420,655 1,010851 1,010,951 r 1,075,152 _1,075 152 1075152 6,679,812 1,039,171 4059804 -~395,524 -1,816,S00 F13.3M,.964 rahabilitaion 30 1,092,812__ 1,174,773 1,229,413 1,311.,374 45808,372 -1,420.6555 1,010,851 1,010,851 L1,075,152 1,0792 152 1,0719,152__66795732 1,039~,171 405,904 3689.52 1 716,800 13,304,W4 weota, diooaa 2 9 728~,5 1 7 92,182 81 5,509 874,249 3,205,5 57Y 947,104 673,501 673,901 719,434 719,434 719,434 44 3 0 9 , 1 7 , 0 45,553L 7,2 77,200 [ 86.89,969 Projanta _____ - 32,842,0 7___ 1___ 81 406,044 AV4249 3 l6,07506 947,104 63,3901O 63,365,507 3,97,177 3571,172 3571,172 24,45266040 340,7 ,8505 1,225,413 5 2005.9 449.949 Total Coat - _____I_ -- _I_ - 7 Topoan S___ ______4____ _ ____ _ I i -: 10 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ( P.m~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~F. HAITI EMPLOYMENT GENERATION PROJECT Employment Component Subproject Cycle STEP 1 STEP 2 STEP3 Presentation of proposals by . Joint review of proposals by - Formulation and preparation local beneficiaries (local UCG and MDOD in of subproject by governments, community accordance with CIU's MDOD/CIU in approved associations, NGOs) to steering committee Quarterly Work Program in MDOD and CIU. guidelines. These sub- coordination with central projects are submitted to and local authorities and IDA in Quarterly Work beneficiaries. Programs for no objection. v STEP6 STEP5 STEP4 Maintenance of works and Implementation of sub- Final approval of subprojects infrastructures rehabilitated projects by Implementing - by CIU and establishment of under the program after Organizations under implementation contracts completion. supervision and monitoring between MDODs and of MDOD and CIU. Implementing Organizations (NGOs, community associations). rt x Haiti Employment Generation Project Flow of Funds Direct Payments Procedure (for Subprojects) CIU prepares Quarterly Work Program Subprojects for review by IDA ~ ~ ~ ~ ~ ~ ~~~~~~I . ....................... IDA sends no objections for Subprojects in the Quarterly Work Program. UCG submits to IDA periodic disbursement requests against approved projects IDA disburses advances on receipt of CIU'S disbursements requests against SOEs i for projects approved in Quarterly Work Program (in currency of expenditure) Haitian Bank Internationl Bank] Account of PMA Account of PMA (Gourdes) (e.g., dollars) Haiti Employment Generation Project Flow of Funds Special Account (for Institutional Development) . .......... ..- . .......... ............ .. . ....... 1-f:. -.' ..... .....' :.... .... '..'.... CIU prepares Institutional Development Plan which includes project activities .ii~:~~~.i f....... . . . .. IDA sends no objections for items in the plan .. v.......... ....... .... . . .. ... ^e.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. CIU contracts and supervises consultants and procures goods, pays from Special Account and requests reimbursement from: > IDA, using under SOEs , ....... . ..,. . .. . . . .... ... ... .. .........................................................-............. . . . .. . . . . .. . . . . .. . . . . .. ... . ... . .... .. . . . .. .. IDA replenishes Special Account' I Annex 2 Page 1 of 3 HAlTI EMPLOYMENT GENERATION PROJECr Institutional Development Component 1. Objectives. The objectives of the institutional development component would be met through the following activities: (a) conduct of an in-field rapid appraisal of employment generation works and municipal strengthening activities currently underway to identify areas to be strengthened or modified; (b) technical assistance, training and limited office equipment provided to strengthen the capacity of implementing organizations; (c) pilot effort to strengthen participatory planning capability of selected communal governments and increase their involvement in the employment generation program; (d) strengthening of the maintenance of investments by developing maintenance strategies for those works that were completed during the JOBS Creation Project as well as those that are being implemented by the project; (e) development of long term strategies for building local institutions that would have capacity to plan and contract small scale, labor intensive works; (f) establishment of a national autonomous non-govemmental entity providing delegated contract management services; and (g) review of the Haiti Public Procurement Act. 2. Half-year technical, financial, managerial and environmental evaluations and quarterly financial audits. The first half-yearly evaluation would include a rapid appraisal of the current USAID financed JOBS Creation program and other municipal strengthening efforts under terms of reference agreed with IDA, and cover the period ending September 30, 1995. It would look at each of the three components of the program, implemented by PADF, Planning Assistance, and Cooperative Housing Foundation, respectively. The study would examine a sample of works already existing and currently in progress, review the experience of a sample of communal governments, using field observations and interviews of program participants, involved communities and NGOs, local government officials, as well as PADF staff. The results of the study would provide direct input to the project in terms of how technical and other subproject specifications might be improved, strategies for more fully involving communal governments in the works program, and strengthen the capacity of governments and IOs to enhance sustainability and employment generation aspects of the program. These recommendations would provide the bases for other institutional development activities under the project. 3. To conduct this study, the Government would contract international level consultants (or a firm) to form a team of specialized engineers (for rural roads, soil conservation, irrigation, and waste management) and community participation specialists (minimum, two). This team would be joined by members of the CIU responsible for the project and members of a World Bank supervision mission to conduct the field work, analyze results, and develop plans for strengthening the employment generation program. 4. The details of the methodology and terms of reference for the study would be agreed by the Government and IDA by no later than July 30, 1995 and the field work would be initiated by no later than August 1995, while the current USAID financed JOBS Creation Project is still in place. See Annex 2 Page 2 of 3 Annex 1, TOR 1. 5. Capacity building of Implementing Organizations (IOs - NGOs, community associations, and commune governments). Capacity building of these organizations would be conducted by the PMA and would focus on assisting them to identify, prepare, implement, and, as appropriate, maintain the works financed by the project. This effort is a continuation of efforts conducted by PADF under the JOBS Creation Project and would involve certain modifications in that approach in order to: (a) introduce, where needed, approaches to increase the quality of works by increasing percentage of costs going to materials and equipment; (b) achieve greater involvement of local government in identification of possible works and, on a pilot basis, as a project implementor; (c) ensure that concerns regarding sustainability of subproject benefits are identified and address during the selection and preparation phases of subprojects (see para. 7); and (d) to continue and strengthen the participation of women in the identification and implementation of subprojects. 6. Capacity Building of Local Government. A pilot effort to strengthen participatory planning capability of selected communal governments and their capacity to identify, prioritize, and manage the implementation of subprojects. Terms of reference for this effort would be developed and agreed with IDA and the technical assistance would be contracted by no later than November 1995. Plans for this subcomponent would build on the experience of a number of government offices and NGOs currently working in Haiti to increase the decentralization of authority to local government and strengthen the capacity of the communal government, the new Communal Councils, and the communal sections (CASECs). Technical assistance would also include governance issues to enhance responsiveness to high priority poverty groups through participatory methods. 7. Strategy for Works Maintenance. The procedures for selection and implementation of subprojects would be strengthened by including a requirement that the PMA work with the communities, NGOs and communal governments to identify feasible maintenance strategies and programs. In addition, the PMA would be asked to follow-up on works completed prior to September 1995 (financed under the JOBS Creation Project) to assist communities and local governments in the development of maintenance programs. Financing of a percentage of the cost of maintenance for these works would be acceptable, once agreement has been reached with IDA on the maintenance strategy. In the development of a maintenance strategy for rural roads, the current rural roads maintenance program of the MTPTC and the CASEC-level road maintenance program promoted by Planning Assistance would be reviewed to ensure that strategies adopted by the project would benefit from those experiences and be consistent with sector guidelines. 8. Development of Long Term Institutional Strategies. The project would include technical assistance designed to assist government to develop and implement long term strategies for building local institutions that would have capacity to manage labor intensive investments that would address priority economic development needs (especially for rural roads, soil conservation and irrigation rehabilitation) and provide temporary employment for economically depressed areas/populations. This would include the development of an institution to serve as a delegated contract management agent (e.g., as in the AGETIP model), especially for small scale, labor intensive works. Clarification and selection among potential strategies for longer term institutional development would be assisted by the analysis of the existing employment program (para. 2). Within the first six months of the project the CIU, with the assistance of specialized consultants, would develop a statement of strategy for this effort, with implementation taking place during the second half of the project. Annex 2 Page 3 of 3 9. Strengthening of the CIU. Technical assistance, training, vehicles, computer and office equipment and incremental recurrent costs to strengthen the capacity of the CIU to assume its role in the supervision and management of the project. 10. Review of the Haiti Public Procurement Act A preliminary review of the Haitian Public Procurement Act has shown that the Act needs revision. It is an adaptation of the French Procurement act that does not take into account the needs for expediting some processes in view of Haiti's developmental needs. A detailed study may identify the main issues and options that the Government could include in a revised Act to be submitted to Parliament. The CIU has been exempted from this Act. ! Annex 2 Attachment Page 1 of 2 HAMfI EMPLOYMENT GENERATION PROJECr Institutional Development Component Decentralization Policies and Structure of Local Government in Haiti 1. The country is divided into nine Departments encompassing 135 Communes which are in turn subdivided into 565 Sections Communales. In the chart below are presented the elected and appointed bodies at the Department. Commune and Section levels. The Departments are also divided into 40 Arrondissement each consisting of three to five Communes, but this administrative level functions only as an extension of the central government offices of the Department. The chart below summarizes the structure of government at the Department and below levels. 2. Prior to the 1987 Constitution, all Departmental and Communal Sections posts were appointments of the central government. The 1987 Constitution requires popular election for Sectional Councils (CASECs) as well as Communal Councils, although currently many of these posts are filled by appointment. Elections are to be held on June 25 with runoffs in July 1995 through which the national and local representative bodies will be selected. The procedure for selecting the Assemblee Departmental will likely be through a process of selection by the local government elected officials. 3. Elections for the Communal Councils and the CASECs are done on a party slate basis, with voters voting for a slate of three candidates in each case. The Communal Assemblies were newly created by the 1987 Constitution and will include the members of the Communal Council, the CASECs, and other representatives of local communities. It is through the Communal Assembly that the Government intends planning for economic development and social services is to take place. 4. Local government (communal) revenues have been extremely limited. Local governments are almost completely dependent on transfers from the Departments, which generally cover only basic operating costs (principally salaries of municipal workers). Since the communal government is dependent on the central administration for these transfers, much control still resides in the central government and its local representatives. Reform of the fiscal and other powers of local government is expected to occur with the passage of a new local government law. Annex 2 Attachment Page 2 of 2 Level Elected Bodies Appointed Representatives of Central Govt. 1. Departments (9) Assemblee Delegues (of Departmental Ministry of Interior) Directors of other Ministries 2. Arrondisements (40) Vice Delegues 3. Communes (135) Conseil Communal: 1 Maire + 2 Adjoints Assemblee Communale: Conseil Communal (CASECs) Other Community Representatives Conseil d'Adminis- tration de la Section 4. Sections Communale (CASEC) Communales (565) 3 Conseillers 5. Recent initiatives to strengthen local governments include those by a special group in the Prime Minister's office to coordinate efforts to promote decentralization and urban development. In addition, the UN Habitat Agency and Planning Assistance, a US NGO working within the USAID's JOBS Creation Project, have maintained active programs providing assistance to both rural and urban local governments. HAITI EMPLOYMENT GENERATION PROJECT Central Implementation Unit Organizational Chart ExeutveDor Legal Advsor Secretary CPA ExternalAuitors l__~~~~~~~~~~~~~~~~~~~~~~~~~..._.__._ ._ ....... _._.__.....ll -LIz--- -- Consutants Inlernational Infrastructure Agriculture Computer Procurement Finance Assistant Administrative Consultant Ut Uit Unit Unit And Secretary Accounig Unit ------- ------------ HAITI EMPLOYMENT GENERATION PROJECT Pan American Development Foundation - Haiti Organizational Chart Wahngo .'Drector - Haiti_ Project Director Suppor 1 Deputy Director l Technical Director Assistant Director Assistant for Reporting/Documentation Administrative Director [Senior Professional Staff | , § | ACCOUntin g Section | Junior Professional Staff ll Field Xnsectors |Financial Administration Fleld Inspectors g g X A |Auditing | Annex 2 TOR 1 Page 1 of 3 HAMT EMPLOYMENT GENERATION PROJECT Summary Terms of Reference Half-Yearly Evaluations 1. The CIU would contract consultants to carry out half-yearly evaluations, covering technical, financial, managerial and environmental aspects, to ascertain whether the project objectives are being achieved, identify issues and make recommendations for improvements. The evaluations will cover the activities of the CIU, PMAs and IOs, including local governments, and linkages to line ministries. They will be carried out for the periods ending September 30 and March 31 each year, to be submitted to IDA within 60 days of these periods. The evaluations will assess: a. Technical Aspects: whether adequate technical specifications are being applied, and whether these are in accordance with industry standards nationally and internationally for similar works and activities, and if the institutional development plans are being carried out in accordance to the agreed guidelines. b. Financial Aspects: the opinions of the quarterly audits, including for SOEs and Special Account, and longer term issues associated with the financial management and reporting of the project. c. Managerial Aspects: the capacity of the CIU, PMAs and IOs to manage their activities in accordance to project objectives in an efficient manner. The institutional development component would be particularly relevant because the CIU would manage the activities directly. d. Environmental Aspects: whether the environmental assessments are being carried out by the CIU in the agreed data sheets, and if the recommended mitigating actions (if any) are being carried out. 2. In addition to the above general TOR, which would guide each half-yearly evaluation, during the first half-yearly evaluation, covering the period ending September 30, 1995, particular emphasis would be given to a rapid appraisal of employment generation and municipal strengthening efforts, as discussed on the following page. Annex 2 TOR I Page 2 of 3 First Half-Yearly Evaluation Rapid Appraisal of Employment Generation and Municipal Strengthening Efforts The first half-yearly evaluation, covering the period ending September 30, 1995, and due to be completed by November 1995, will be carried out by a team of independent consultants working with members of the CIU and a special World Bank mission. In addition to the general TOR applicable to all half-yearly evaluations, the first half-yearly evaluation would address, inter ali, the following questions: (a) What has been the technical quality and sustainability of each category of works and services provided (i.e. rural roads rehabilitation, soil conservation, irrigation rehabilitation, and waste management) and, if relevant, what are the specific strategies or practices that might be employed to strengthen quality and sustainability? (b) What regions and groups have benefitted the most from the employment program and from the works themselves? Has targeting to the poor been successful? How might targeting be improved? (c) What has been the experience with the participation of women (which have made up approximately 20% of the work force) and are there ways their participation may be increased? (d) What has been the effect of the increase in salary paid to unskilled workers from 20 Gourdes to 36 Gourdes per day in terms of its impact on targeting and the local economy? Are any mitigating measures necessary? (e) What have been the results of efforts to strengthen local government planning and involvement in labor-intensive, employment creation works programs, and what would be the most effective strategies for increasing such involvement in the present project? (f) What has the been the experience of increasing the beneficiary contribution by requiring one day of free labor for each five days of paid labor? (g) What are the characteristics of the AGETIP-model that could be used in developing the model for the Haitian PMA(s) to be established under the project? (h) What measures could be taken to strengthen the rural roads unit linked to the Ministry of Public Works, Transport and Communications, which could adopt approaches tested and proven by the JOBS Creation Project, with future employment generation programs related to roads handled by this unit in conjunction with local authorities? (i) What measures could be taken to strengthen soil conservation and irrigation/drainage Annex 2 TOR 1 Page 3 of 3 functions in MOA by similar means, with future employment generation programs related to soil conservation handled by MOA in conjunction with local authorities and community groups? (j) What measures could be taken to return garbage collection responsibilities to local urban authorities? Annex 2 TOR 2 Page 1 of 3 HArIl EMPLOYMENT GENERATION PROGRAM Summary Terms of Reference Economic Evaluation of Project Investments Objectives 1. This study is an input to the GOH strategy for employment generation in economically depressed areas. The objective is to calculate the economic benefits from labor intensive small scale projects in order to identify those projects that contribute most to the local economy. The study will use the experience of the USAID/PADF Jobs Creation Project and of the proposed Employment Generation Project to carry out an economic analysis of alternative types of labor intensive projects. Methods 2. The study would focus on the four categories of projects financed by the Employment Generation Project: (a) road rehabilitation; (b) rehabilitation of irrigation and drainage canals; (c) soil conservation; and (d) urban waste management. The analysis should also include any other, still unidentified, candidate categories of labor-intensive small scale projects. 3. The analysis would be based on a representative and significant sample of projects within each category. Local information on physical inputs and outputs for each project and local costs and prices would be collected through field surveys and from the data bases of implementing PMAs and IOs. 3. The full range of economic costs and benefits of the projects would be measured, both for each individual project and for the aggregate program, including the indirect costs and benefits from any possible price changes induced by the magnitude of the program. 4. General. Results should be presented in terms of fiscal costs per job created, Net Present Value, and Economic Rate of Retum. The average cost of capital to the Haitian Government should be used as a proxy for the economic discount rates in the calculations. The costs should include carefully constructed measures of the opportunity costs of the various inputs, including appropriate shadow wage rates, reflecting the opportunity costs of the unemployed. In particular the analysis should consider the negative impacts, if any, on general economic activity, of bid-up wages by the program, if there is market evidence that this happens. Annex 2 TOR 2 Page 2 of 3 5. Rural Roads. The analysis should include as benefits measure(s) of the reduction in travel time, reduction in vehicle operating costs, increased rents to farmers, other producers and real estate owners due to improved access to markets and public services, and of any other variables identified as important, such as consumer and producer surpluses from indirect local price changes brought about by improved roads. 6. Irrigation and drainage. The analysis should include the increased net value of crop production from irrigation due to improved irrigation and drainage on irrigated farms and due to the new farms that became irrigated. The analysis should also consider any possible change in cropping patterns expected from improved irrigation. Finally the analysis should consider the consumer and producer surpluses from indirect local price changes, in particular due to the increased food supply. 7. Soil conservation. The analysis should measure both the on-farm and off-farm benefits from lower erosion and lower water peak discharges and flooding. Specifically in terms of on-farm benefits the analysis should measure the increased net revenues due to gains in soil fertility and in terms of off-farm benefits the gains to productive infrastructure downstream due to increased lifespans, fewer accidents, lower maintenance costs, or alternative measures. 8. Waste Management. The analysis would measure the value of the gains in public health due to the garbage collection and sanitation activities, the gain in real estate values from cleaner streets and sewage systems, or alternative measures that capture the economic benefits of the activity. Outputs 9. The consultants would produce three outputs: (1) A preliminary methodological report proposing the sample size, exact physical and economic variables to be measured, and data collection methods and sources. (2) A draft report including the results of the economic analysis. (3) A final report fine tuning the economic analysis, making recommendations for future labor intensive small scale projects, and including comments from the GOH and outside reviewers. Duration 10. The study would last 3 months, with report (1) due after 3 weeks, report (2) after 9 weeks, and report (3) after 12 weeks. Annex 2 TOR 2 Page 3 of 3 Qualifications 11. The study team would include one economist, one engineer and one agronomist or equivalent. The economist would have at least 10 years of international experience on benefit-cost analysis and related topics, while the engineer and agronomist would have at least 5 years experience with projects of this kind in Haiti. Haiti Employment Generation Components Project Cost Summary % % Total (Gourdes '000) (USS 000) Foreign Base Local Foreign Total Local Foreign Total Exchange Costs A. Employment Generation Component 1 Soil Conservation 202,352.9 10,650.2 213,003.0 14,453.8 760.7 15,214.5 5 27 2. Road Rehabilitation 202,352.9 10,650.2 213,003.0 14,453.8 760.7 15,214.5 5 27 3. Irrigation Works 134,901.9 7,1001 142,002.0 9,635.9 507.2 10,143.0 5 18 4 Waste Management 134,901.9 7,100.1 142,002.0 9,635.9 507.2 10,143.0 5 18 5 PMAs Management 910.0 8,190.0 9,100.0 65.0 585.0 650.0 90 1 Subtotal Employment Generation Component 675,419.5 43,690.5 719,110.0 48,2443 3,120.8 51,365.0 6 91 B Institutional development 23,520.0 46,480.0 70,000.0 1,680.0 3,320.0 5,000.0 66 9 Total BASELINE COSTS 698,939.5 90,170.5 789,110.0 49,924.3 6,440.8 56,365.0 11 100 Physical Contingencies - - - - Price Contingencies _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Total PROJECTCOSTS 698,939.5 90,1705 789,110.0 49,9243 6,440.8 56,365.0 11 100 v> F- tD (D X Annex 3 Haiti Table 2 Employment Generation Project Components by Year - Totals Including Contingencies (US$ '000) Totals Including Contingencies 1995 1996-1 1996-2 Total A. Employment Generation Component 1. Soil Conservation 5,498.5 7,638.0 2,078.0 15,214.5 2. Road Rehabilitation 5,498.5 7,638.0 2,078.0 15,214.5 3. Irrigation Works 3,666.0 5,092.0 1,385.0 10,143.0 4. Waste Management 3,666.0 5,092.0 1,385.0 10,143.0 5. PMAs Management 650.0 - - 650.0 Subtotal Employment Generation Component 18,979.0 25,460.0 6,926.0 51,365.0 B. Institutional development 1,191.0 2,267.0 1,542.0 5,000.0 Total PROJECT COSTS 20,170.0 27,727.0 8,468.0 56,365.0 Annex 3 Haiti Table 3 Employment Generation Institutional Development Detailed Costs (USS '000) Parameters (in %) Phy. Totals Cont. For. Gross 1995 1996-1 1996-2 Total Rate Exch. Tax Rate I. Investment Costs A. Works for CIU 50.0 - - 50.0 0.0 50.0 0.0 B. Audits and Studies 200.0 350.0 250.0 800.0 0.0 90.0 0.0 C. Office Equipment and Supplies 200.0 1,000.0 300.0 1,500.0 -Local Govts - 500.0 150.0 650.0 0.0 90.0 0.0 -lOs - 500.0 150.0 650.0 0.0 90.0 0.0 -CIU (incl. vehicles) 200.0 - - 200.0 0.0 90.0 0.0 D. Technical Assistance 375.0 600.0 675.0 1,650.0 -Local Govts 200.0 400.0 400.0 1,000.0 0.0 50.0 0.0 -lOs 100.0 125.0 200.0 425.0 0.0 50.0 0.0 -CIU 75.0 75.0 75.0 225.0 0.0 50.0 0.0 E. Training 200.0 150.0 150.0 500.0 -Local Govts 75.0 75.0 75.0 225.0 0.0 50.0 0.0 -lOs 75.0 75.0 75.0 225.0 0.0 50.0 0.0 -CIU 50.0 - - 50.0 0.0 50.0 0.0 Total Investment Costs 1,480.0 2,250.0 1,225.0 4,500.0 II. Recurrent Costs A. CIU Incremental Recurrent Costs 166.0 167.0 167.0 500.0 0.0 30.0 0.0 Total Recurrent Costs 166.0 167.0 166.0 500.0 Total 1,646.0 2,417.0 1,391.0 5,000.0 Haiti Employment Generation Components by Financiers (US$ '000) Local Beneficiaries IDA Total (Excl. Duties & Armount % Amount % Amount % For. Exch. Taxes) Taxes A. Employment Generation Component 1. Soil Conservation 1,909.4 12.6 13,305.1 87.5 15,214.5 27.0 760.7 14,453.8 2. Road Rehabilitation 1,909.4 12.6 13,305.1 87.5 15,214.5 27.0 760.7 14,453.8 3. Irrigation Works 1,272.9 12.6 8,870.1 87.5 10,143.0 18.0 507.2 9,635.9 4. Waste Management 1,272.9 12.6 8,870.1 87.5 10,143.0 18.0 507.2 9,635.9 5. PMAs Management - - 650.0 100.0 650.0 1.2 585.0 65.0 Subtotal Employment Generation Component 6,364.7 12.4 45,000.3 87.6 51,365.0 91.1 3,120.8 48,244.3 B. Institutional development - - 5,000.0 100.0 5,000.0 8.9 3,320.0 1,680.0 Total Disbursement 6,364.7 11.3 50,000.3 88.7 56,365.0 100.0 6,440.8 49,924.3 (D r x Xr Annex 3 Haiti Tab le 5 Employment Generation Project Allocation of Loan Proceeds IDA (US$ '000) Allocation of Loan Proceeds Disbursement Loan Amount % 1. Subprojects 45,000.0 100.0 2. Works, except for Subprojects 50.0 100.0 3. Goods, Except for Subprojects 1,500.0 100.0 4. Training 500.0 100.0 5. Consultant Services 1,000.0 100.0 6. Auditing and Studies 800.0 100.0 7. Incremental CIU Operating Costs 250.0 100.0 8. PPF Refinancing 205.0 100.0 9. Unallocated 695.0 Total 50,000.0 Loan amounts financed by IDA Annex 3 Table 6 HAM EMPLOYMENT GENERATION PROJECIT Estimated Schedule of IDA Disbursements (USS million) IDA Fiscal Semester j Disbursed | Cumulative Disbursement Credit Year Ending During Se t _ _ _ of Balance l ~~~~~~~~Semester Amut l%o1oa 1996 Dec 95a 20 20 40 30 June 96 16 36 72 14 1997 December 96 14 50 100 0 a/ Includes retroactive financing for eligible expenditures incurred after June 1, 1995. The Closing Date is March 31, 1997. Annex 4 Page 1 of 2 HAMfl EMPLOYMENT GENERATION PROJECI Project Reporting 1. Because of the large number of subprojects distributed throughout the country and implemented in a short time, good project monitoring and reporting will be critical for project management. 2. At the subproject level, responsibilities of the Implementing Organizations (the local NGOs and community organizations) with respect to reporting are specified in the contracts between the IOs and the PMA(s). 3. At the national level, the CIU and the PMA(s) would regularly collect and analyze data on key indicators to monitor progress in physical execution and assess project impact, comparing the results with the pre-project estimates. The quarterly reports would both describe progress in project execution, and identify possible implementation issues and propose appropriate solutions. 4. During appraisal, the existing PADF format for quarterly reporting for the JOBS Creation Project was reviewed and found to be a satisfactory basis for reporting under the Employment Generation Project. 5. The outline of the PADF quarterly report is: (a) Introductory text, consisting of sections on: General information Forecast for reporting period and actual accomplishments Factors financing implementation Projections for the next quarter (b) Summary table on program status as of end of reporting period (c) Graph on status of programmed projects (d) Graph on budgets vs. advances by subproject type (e) Tables on status of subprojects in execution A. Road rehabilitation B. Irrigation and drainage C. Soil conservation D. Sanitation Annex 4 Page 2 of 2 (f) Graph on person months completed to date vs. programmed person months remaining (g) Graph on person months achieved by gender and combined (h) Graph on number of people who have worked by gender and combined (i) Graphs on person month data by subproject type (j) Table on subprojects currently being studied for implementation 6. In addition to this information on the Employment Generation Component, the CIU quarterly report would include the following sections on the Institutional Development Component. (a) Technical Assistance (b) Training (c) Studies (d) Financial'budget indicators (e) Status of compliance with legal covenants (f) Overall progress against implementation indicators (g) Overall progress against impact indicators 7. Attached are the following tables to be included in the quarterly report: Table 1: Implementation and Impact Indicators Table 2: Financial Indicators Table 3: Status of Compliance with Legal Covenants HAMn EmpMym*M Gomatlon Prject knpl.mfltelafl mt hoepathdlae Period Ending = Sept 95 m har-Os SOP4)6 Tdrlt Period EnidirS arg asn Dab # Om" I a 131 Jobs~~~~. crae -. 40,OD 22000 2Co 185;000 487.D Markina Waa G . ..... . ........ ....Minimum Wa Minimum Wq of which vnro 20% 8,000 5Z.40D 37,9001 97,40D ofwih unsbied 94% 37,73B 247,170 174,528 5,S_Wrkr ngi pod USSmialion 0.4 15*6 111 2. 20 sdS. ° a % X 2D Diywage in US$ _3W_ _ lor unslil _ 1/ 2.48 _ __ __ __ __ __' _ __ _ _ _ _ _ _ : __ __: _ _ B I ~ . ......... l No. t pwscs wi betler Roads Rdet'sabflhtatd Km 1C0 500 500 1,100 ; te matocntrket ' O00 lOw Cnnak Rehabilit_d Km 123 807 570 1.500 _ Increae in ara tO 2' Sudi_mert R oem M. 148 9'_ 884 1,800 _ under rigabon Urban PoHiuton De_ds R ew _ 11 'a000 m t tO8 76 200 _ Carkals Cleared Km 5 38 25 86 _ Sediment Remored '000m' 16 102 72 190 _ Sbeeds_ _oed Km 25 tet t1t4 300 Soil and Water Contlon _ land Protected ha 000 800 Conlour Ca_s Built Km 57 377 266 700 _ Teffae and Hedoe Rcw Krn 25 t61 t114 30 _q_ Km 7 48 34 90 _ Guly Plugs Km _ _ 321 23 _ Tns Planted 000 tees 82 38 380 1 OC Gabors m 214 ,39 988 2.800 Ratings of Capacity ID 1= excelent perm- 2wry good Tra_n_ g_ # tairned __ __ __ __ __ _ 4yiaak au_ _ _1 1 I 3 - Rating VeryGo oidcetnt P__ _ t 1 3 4 PADF Eceliant EIcExeInt ___________ 40 50 90g IPMA2 veryGod ExceiWent Peoplb 500 4.500 68000 11,000 _PMA3 | Good VeryGood Participating 10 Ath 1 _ _ _ Tech_nical ncss ncece_ing_TA _| |ratings of I | 2 Parbpipting commurs '1es CIIJ 2 10 10 22. w ratinas d12 5 15 11 _101a0 200 250 450 1_ Pmcmg COMM ° 4] 51 a 1I7t pwWm C_mmInl I _|lncrease in Pariipton minlj s_ _ _iot _ _0 16 20 36 gp %ti _ s 5S communes able to develop P_ _ D_ _ _ped # o 0 15 301 45 _a mainmrenwnce pln | 5 10 Wborks Urdwb"n by Co_mi T munrs with1 Comr_or_________atNGCk_ 0 24 301 54 maintnance conrit # 3 8 Pirijed bhi bbor G3e ft du 7G i C6. I l -U IG Annex 4 Table 2 HAM EMPLOYMENT GENERATION PROJECT Fmancial Indicators 1. Expenditures during period and to date by component 2. IDA disbursements during period and to date by component 3. Procurement by category: actual, in process and planned 4. Contributions by Implementing Organizations and beneficiaries during period and to date 5. Status of audit reports HAITI EMPLOYMENT GENERATION PROJECT Monitoring and Reporting Status of Legal Covenants Agreement Section Covenant Present Original Revised Description of Comments Type Status Fulrillment Fullflllme Covenants Date nt Date Covenant types: Present status: 1 = Accounts and Audits C = Covenant complied with 2 = Financial performance/revenue generation from beneficiaries CD Complied with after delay 3 Flow and utilization of project funds CP Complied with partially 4 Counterpart funding NC = Not complied with 5 = Management aspects of the project of acecuting agency 6 = Environmental covenants 7 = Involuntary resettlement 8 = Indigenous peoples 9 = Monitoring, review and reporting 10 = Project implementation not covered by categories 1-9 11 = Sectoral or cross-sectoral budgetary or other resource allocation c 2 12 = Sectoral or cross-sectoral policy/regulatory/institutional actions tDX 13 = Other Annex 5 Page 1 of 2 HA1TI EM[PLOYMENT GENERATION PROJECT Documents in the Project File 1. Agreement of Collaboration. Central Implementation Unit and PADF, June 8, 1995. 2. Operational Manual. Central Implementation Unit, June 1995. 3. Accord de Retrocession. Ministry of Finance and Economy, June 1995. 4. Sub-project Information Fact Sheets. Haiti Jobs Creation Project. USAID and PADF, March 1995. 5. Proposal of the Pan American Foundation for the Haiti Jobs Creation Project. PADF, May 1993. 6. Haiti Jobs Creation Project Urban Jobs Addendum. PADF, May 1993. 7. Haiti Jobs Creation Project Evaluation. Prepared for PADF and USAID/Haiti by D. Brown, J. Deryce, C. Jolly, C. Labossiere, and Y. Pierre, May 1995. 8. Haiti Jobs Creation Project Presentation and Procedures. PADF, January 1995. 9. Haiti Jobs Creation Project Procedures Administratives & Financieres. PADF, Avril 1995. 10. Haiti Jobs Creation Project Demande de Financement de Projet (Form). PADF. 11. Haiti Jobs Creation Project Rapport de Supervision (Form). PADF, May 5, 1995. 12. Haiti Jobs Creation Project Rapport Periodique D'Avancement des Travaux. PADF, January 1995. 13. Haiti Jobs Creation Project: Projet Conservation du Sol et de l'Eau Bassin Versant Riviere, St.Louis du Sud, Phase II, Contract #072. PADF, Fevrier 1995. 14. Haiti Jobs Creation Project: Projet Rehabilitation d'Infrastructures d'Irrigation et de Drainage, Curage Riviere La Quinte, Drainage Lagon la Ville, Phase III, Contract #095. PADF, Avril 1995. 15. Haiti Jobs Creation Project: Projet de Rehabilitation de Routes, Fonds des Blancs, Contract #023. PADF, Fevrier 1994. Annex 5 Page 2 of 2 16. Haiti Jobs Creation Project: Rehabilitation de Routes, Description des Activites. PADF, March 15, 1994. 17. Haiti Jobs Creation Project: Assainissement, Prescriptions Techniques. PADF, February 6, 1995. 18. Haiti Jobs Creation Project: Conservation de Sol, Prescriptions, Techniques et Prototypes. PADF, January 3, 1994. 19. Haiti Jobs Creation Project: Irrigation et Drainage, Description des Activites. PADF, September 28, 1993. i 20. Haiti Jobs Creation Project: Quarterly Reports for 1st, 2nd, 3rd, and 4th Quarters (October 1993 to September 1994). PADF. MAP SECTION IBRD 27090 USA 73 30' 73O00 ' 7230' 72'00' 6 ATLANI~~~~~~~~~~2000 20 00- ATLANTIC OCEAN A LT0 P ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~PORT-DR PAIX , _ Poin/ Jooll Rubal~~~~~~~~~~~~~~~~~~~~~~~~S LLohn *. Anoe..FOIer CUBA DOPH SCAL F A U E m _DHUMID Grnd Solinot wS ICAN 1 T :~~~~~~~~~~~~~~~~~OE S gT JAMA-CA PERTO f RICO- -o a -0 IN ER A IO A EO N A Y. ;no oi POR nIR T9/v O, IDa9>4p'' _ 400' Id ,.. \TI I I I 19~30' HAITI PHYSICAL FEATURES~~~~~~~~~~~~~~~~~~~LePR0O ~~C t900' Thonrordac? -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I1~ -~- HUMH) 1, 1. ,~~~~~~~~~~~~~~~~~~~~~~dn Laooo I - DRY G~~~~~~~~~~~~~~~~~~.d. Sda,,d.Minn Cre., Dam-Marie ran ~~~~~~~~~~~~~~~~~~~~~ or~~~7 arFh.~~~~~nopdano~~~~~ 0. 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