Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD737 PROJECT PAPER ON A PROPOSED SECOND ADDITIONAL FINANCING A GRANT AND A CREDIT FROM THE INTERNATIONAL DEVELOPMENT ASSOCIATION CRISIS RESPONSE WINDOW IN THE AMOUNT OF SDR23.7 MILLION (US$36.25 MILLION EQUIVALENT) AND SDR2.1 MILLION (US$3.15 MILLION EQUIVALENT), RESPECTIVELY AND A GRANT AND A LOAN FROM THE STRATEGIC CLIMATE FUND IN THE AMOUNT OF US$15.75 MILLION (US$9.25 MILLION AND US$6.50 MILLION, RESPECTIVELY) TO THE REPUBLIC OF MOZAMBIQUE FOR PHASE 2 OF THE ROADS AND BRIDGES MANAGEMENT AND MAINTENANCE PROJECT December 2, 2013 Africa Transport Country Department AFCS2 Africa Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective September 30, 2013) Currency Unit = New Mozambique Metical (MZN) MZN 29.80 = US$1 US$1.53 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AF Additional Financing AF2 Second Additional Financing ANE Administração Nacional de Estradas (National Road Administration) APL Adaptable Program Lending BOQ Bill of Quantities CIF Climate Investment Funds CRW Crisis Response Window DA Designated Accounts DBT Design Build and Transfer DfID UK Department for International Development DNA National Water Directorate DPO Development Policy Operation EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return EMP Environmental Management Plan ESC Environment and Social Clauses ESMP Environmental and Social Mitigation Plan ESIA Environmental and Social Impact Assessment FM Financial Management FRT Flood Response Team GoM Government of Mozambique GDP Gross Domestic Product HDM4 Highway Development and Management, version 4 ICB International Competitive Bidding IDA International Development Association IFR Interim Financial Reports IMF International Monetary Fund INGC Institute for Disaster Management IRM Immediate Response Mechanism ISR Implementation Status Report KPI Key Project Indicator LIDAR Laser Interferometry Detection and Radar M-I Medium Impact MCA Multi-Criteria Analysis MZN New Mozambique Metical N1 National Road Number 1 NCB National Competitive Bidding OP/BP Operational Policy/Bank Procedure OPRC Output and Performance Based Road Contract ORAF Operational Risk Assessment Framework PAD Project Appraisal Document PAP Project Affected Persons PARP Plano de Acção para a Redução da Pobreza (Action Plan for the Reduction of Poverty) PDO Project Development Objectives PPCR Pilot Program on Climate Resilience PRISE Programa Integrado do Sector de Estradas (Integrated Road Sector Program 2012-15) QCBS Quality and Cost Based Selection RAP Resettlement Action Plan RPF Resettlement Policy Framework RBMMP2 Roads and Bridges Management and Maintenance Project, Phase 2 Res Resident Engineers RF Fundo de Estradas (Road Fund) SADC Southern African Development Community SISTAFE Sistema de Administração Financeira do Estado (Public Financial Management System) TA Technical Assistance ToR Terms of Reference TSG Technical Support Group UGEA Unidade Gestora Executora das Aquisições (Central unit in charge of procurement functions) US United States of America VOC Vehicle Operating Costs Vice President: Makhtar Diop Country Director: Laurence C. Clarke Sector Director: Jamal Saghir Sector Manager: Supee Teravaninthorn Task Team Leader: Kulwinder S. Rao MOZAMBIQUE ADDITIONAL FINANCING FOR ROADS AND BRIDGES MANAGEMENT AND MAINTENANCE PROJECT PHASE II CONTENTS Additional Financing Data Sheet ................................................................................................................... i I. Introduction ............................................................................................................................................... 1 II. Background and Rationale for Additional Financing............................................................................... 2 III. Proposed Changes to the On-going Project ............................................................................................ 6 IV. Appraisal Summary .............................................................................................................................. 22 ANNEX 1: REVISED RESULTS FRAMEWORK AND MONITORING ............................................... 27 ANNEX 2: OPERATIONAL RISK ASSESSMENT FRAMEWORK (ORAF) ........................................ 30 ANNEX 3A: DETAILED DESCRIPTION OF ACTIVITIES ................................................................... 35 ANNEX 3B: CLIMATE INVESTMENT FUND FINANCED COMPONENT ........................................ 44 ANNEX 4: ESTIMATE OF THE REVISED PROJECT COSTS .............................................................. 48 ANNEX 5: DETAILED PROCUREMENT ARRANGEMENTS ............................................................. 49 ANNEX 6: MULTI CRITERIA ANALYSIS FOR PRIORITIZING OF EMERGENCY WORKS ......... 55 ANNEX 7: IMPLEMENTATION SUPPORT PLAN ................................................................................ 58 ANNEX 8: MAP ......................................................................................................................................... 60 MOZAMBIQUE ROADS AND BRIDGES MANAGEMENT AND MAINTENANCE PROGRAM PHASE II ADDITIONAL FINANCING DATA SHEET Mozambique Roads & Bridges Management and Maintenance Project Phase 2 - Additional Financing (P146402 ) AFRICA AFTTR . Basic Information – Parent Parent Project ID: P083325 Original EA Category: B - Partial Assessment Revised Closing Date: December 31, 2016 Current EA Category: Basic Information – Additional Financing (AF) Additional Financing Project ID: P146402 Scale Up Type (from AUS): Regional Vice President: Makhtar Diop Proposed EA Category: B - Partial Assessment Expected Effectiveness Country Director: Laurence C. Clarke April 21, 2014 Date: Sector Director: Jamal Saghir Expected Closing Date: December 31, 2016 Sector Manager: Supee Teravaninthorn Report No: PAD737 Team Leader: Kulwinder Singh Rao Borrower Organization Name Contact Title Telephone Email Ministry of Planning and Development Tel: +258 21 49 Av. Ahmed S. 22 68 cgrachane@fe.gov.mz Toure 21, 4th Republic of Mozambique Fax: 258 amugunhe@ane.gov. floor 21497663 mz Caixa Postal 272, Maputo Mozambique Project Financing Data – Parent ( Roads and Bridges Management and Maintenance Program - Phase II-P083325 ) Key Dates Project Ln/Cr/TF Status Approval Signing Date Effectiveness Original Revised i Date Date Closing Date Closing Date P083325 IDA-43080 Effective 23-May-2007 09-Jul-2007 05-Oct-2007 30-Jun-2011 31-Dec-2013 P083325 IDA-48920 Effective 07-Apr-2011 28-Jun-2011 27-Sep-2011 31-Dec-2012 31-Dec-2013 Disbursements Undis % Project Ln/Cr/TF Status Currency Original Revised Cancelled Disbursed bursed Disbursed P083325 IDA-43080 Effective XDR 66.10 65.82 0.28 65.82 0.00 100.00 P083325 IDA-48920 Effective XDR 26.30 26.30 0.00 17.84 8.46 67.82 Project Financing Data –Mozambique Roads & Bridges Management and Maintenance Project Phase 2 - Additional Financing ( P146 402 ) [X] Loan [X] Grant [ ] Other [X] Credit [ ] Guarantee Total Project Cost: US$183.75 Total Bank Financing: US$3.15 Financing Gap: US$73.60 Financing Source – Additional Financing (AF) Amount BORROWER/RECIPIENT US$40.00 Strategic Climate Fund Credit US$6.50 Strategic Climate Fund Grant US$9.25 1 Global Facility for disaster Reduction and Recovery US$15.00 IDA Credit from CRW US$3.15 IDA Grant from CRW US$36.25 Total US$110.15 Policy Waivers Does the project depart from the CAS in content or in other significant No respects? Explanation Does the project require any policy waiver(s)? No Explanation 1 The United Kingdom Department for International Development (DfID) will provide a grant of US$15.0 million, through the Global Facility for Disaster Reduction and Recovery (GFDRR) trust fund. The trust fund Administrative Agreement between DfID and GFDRR is under process. ii Team Composition Bank Staff Name Title Specialization Unit John Bryant Collier Operations Officer Environmental Specialist AFTN3 Ann Raynal May Information Specialist Information Specialist AFTTR Cheikh A. T. Sagna Senior Social Senior Social AFTCS Development Specialist Development Specialist Kulwinder Singh Rao Senior Highway Team Lead AFTTR Engineer Jose Domingos Diogo Transport Specialist Transport Specialist AFTTR Lopes Chembeze Amos Martinho Malate Procurement Analyst Procurement Analyst AFTPE Celia A Dos Santos Team Assistant Team Assistant AFCS2 Faias Elvis Teodoro Bernado Financial Management Financial Management AFTME Langa Analyst Analyst Dirk Bronselaer Senior Procurement Senior Procurement AFTPE Specialist Specialist Dr. Yitzhak Kamhi Transportation Planning Senior AFTTR and Management Consultant/Advisor Luz Meza-Bartrina Senior Counsel Senior Counsel LEGAF Jose C. Janeiro Senior Finance Officer Senior Finance Officer CTRLA Ross Hughes Senior Climate Change Senior Climate Change AFTN3 Specialist Specialist Institutional Data Parent ( Roads and Bridges Management and Maintenance Program - Phase II-P083325 ) Sector Board Transport Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co- Co-benefits % benefits % Transportation Rural and Inter-Urban 41 Roads and Highways Transportation Urban Transport 40 Public Administration, Law, and Central government 19 iii Justice administration Total 100 Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Financial and private sector Infrastructure services for private sector 29 development development Rural development Rural services and infrastructure 29 Public sector governance Administrative and civil service reform 14 Financial and private sector Other Private Sector Development 14 development Human development Injuries and non-communicable diseases 14 Total 100 Mozambique Roads & Bridges Management and Maintenance Project Phase II - Additional Financing ( P146402 ) Sector Board Transport Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co- Co-benefits % benefits % Transportation Rural and Inter-Urban 80 70 30 Roads and Highways Public Administration, Law, and Central government 20 20 Justice administration Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Rural development Rural services and infrastructure 70 Environment and natural resources Climate change 20 iv management Social protection and risk management Natural disaster management 10 Total 100 v I. INTRODUCTION 1. This Project Paper seeks the approval of the Executive Directors to provide an additional financing to the Mozambique Roads and Bridges Management and Maintenance Program, Phase 2 (RBMMP2) (P083325) Credit 4308-MZ in an amount of a US$39.4 1 million from the Crisis Response Window (CRW) resources 2 and a proposed grant and loan from the Strategic Climate Fund in the amount of US$9.25 million and US$6.50 million, respectively. This is the second additional financing (AF2) to this project; the first additional financing (AF) was approved on April 7, 2011 in the amount of US$41.0 million. The original project was a credit of US$100.0 million. The proposed AF2 would finance the costs associated with the emergency works and additional activities required to mitigate the damages to road infrastructure in the Gaza province, following the January 2013 Limpopo floods. These costs include piloting of infrastructure that will be more resilient to climate-related damage. Further, it is proposed to extend the project’s closing date by 36 months from December 31, 2013 to December 31, 2016, to allow for the completion of these scaled up activities. The cumulative total extension of the closing date would be 66 months. 2. The planned new activities under AF2 include emergency investments required to restore and rehabilitate sections of nationally important roads and bridges and thus provide the access to markets and essential services that are currently disrupted in the aftermath of the floods. About 1,000 kilometers of paved and unpaved roads and 30 main bridges will be restored and/or rehabilitated. 3. The Government of Mozambique (GoM) will contribute US$40.0 million to the project, which will be disbursed following the World Bank guidelines applicable to the project. GoM funds are immediately available to the project. 4. The United Kingdom Department for International Development (DfID) will provide a grant of US$15.0 million, through the Global Facility for Disaster Reduction and Recovery (GFDRR) trust fund, for this emergency program for the immediate emergency works included in the project. 5. The AF2 will also benefit from US$15.75 million from the Pilot Program on Climate Resilience (PPCR) 3. This contribution will support the preparation of climate resilient standards for national design and construction and specifications for the classified road network. The PPCR financing will also support a limited pilot program for designing, building and maintaining 1 IDA financing from IDA 16 Crisis Response Window Fund (CRW) includes US$3.15 million credit and US$36.25 as a grant. The Pilot Program for Climate Resilience (PPCR) co-financing of US$15.75 million comprises of US$9.25 million as a grant and US$6.50 million as a loan. DfID financing through GFDRR is US$15.0 million. 2 An oral briefing for securing CRW support for Post Flood Emergency Reconstruction in Mozambique was made to the Board of IDA on June 25, 2013. A total of US$71million CRW funds are earmarked for additional financing of two ongoing projects, Roads and Bridges Maintenance Management Project and Water Resources Development Project (P107350), for emergency rehabilitation works. 3 PPCR is a targeted program of the Strategic Climate Fund (SCF), which is one of two funds within the Climate Investment Funds (CIF) framework. 1 unclassified roads in Gaza province applying the climate resilience standards. PPCR funds for the road sector were originally allocated for Zambezi Valley. However, following the severe floods damages experienced in the lower Limpopo Valley, combined with the extension of the RBMMP2 Adaptable Program Lending (APL), the Government of Mozambique instead requested their re-allocation to Gaza province for cohesion of the PPCR program in Mozambique. The activities to be implemented under RBMMP2 are identical to those originally envisaged in Mozambique’s Strategic Program for Climate Resilience (SPCR) endorsed in June 2011. Lessons learned from the piloting of PPCR activities in the Limpopo Valley will inform potential scale-up of activities in the other areas of the country in the future. Annex 3B includes more details on the proposed PPCR component. II. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING 6. Mozambique is experiencing continuous and increased vulnerability to extreme weather events and to longer-term climate change. The country is experiencing long dry spells, severe floods and frequent coastal storms. Future climate scenarios suggest that the levels of climatic variability will increase further in the years ahead. The sudden and extreme floods in Lower Limpopo valley and other areas of southern Mozambique in January 2013 were the worst disaster to affect the country since the floods in 2000. The GoM responded by announcing a Red Alert on January 22, 2013 and requested the World Bank to undertake a Flood Assessment Mission. The report of the Flood Assessment Mission and the subsequent cost estimates assessed short-term reconstruction needs at approximately US$403.0 million. It also estimated that the floods would result in the gross domestic product (GDP) growth 1.4 percentage points lower than pre-flood estimates, from 8.4 percent pre-flood, to currently estimated seven percent for 2013. Inflation is projected to accelerate to 7.1 percent towards the end of the year; two percentage points higher than the pre-flood projections. 7. Part of the projected acceleration in inflation is due to a rise in food prices in the aftermath of the floods, as clearly stated in the latest International Monetary Fund (IMF) Country Report on Mozambique (IMF Country Report No. 13/200, July 2013). The general price level increases, and food price increases in particular, tend to affect heavily those in the bottom income quintiles of the population. The poor population has less access to financial services and hold their balances in cash (the value of which deteriorates with price level increases). The additional financing proposed in this Project Paper will rebuild infrastructure in order to facilitate access of households to markets as well as to facilitate the transportation of goods (in particular food) which constitute a substantial proportion of the budget of poor households. This fact, together with the expected decline in the cost of transport services, will likely counteract the current upward trend in inflation and will ultimately benefit the entire population affected by the lack of accessibility and in particular, the poor. 8. In the Lower Limpopo valley, the floods caused 113 deaths and approximately 172,600 people had to be evacuated. The floods ravaged nearly 89,000 ha of cultivated land in one of the most productive agricultural areas of the country and home of Mozambique’s largest irrigation scheme. This affected livelihoods and food security for the entire population, especially for more than 48,000 smallholder farmers and their families who are largely reliant on agriculture for their subsistence requirements. The floods have damaged health and education systems, irrigation 2 schemes, municipal water supply systems, urban drainage and sanitation, and flood protection dykes in the Lower Limpopo valley and in general to transport infrastructure. 9. The majority of Gaza’s provincial road network is located in the southern area of the province mostly concentrated in the districts of Xai-Xai, Bilene, Chókwe, Guijá, Chibuto and Manjacaze. These districts fall in the Limpopo Lower basin and thus the roads in this part of the network are typically built on embankments. The flood impacted at least 18 stretches of paved roads and bridges, including three sections of the main national road (N1). Many flooded communities remain inaccessible, while others are cut off from any vehicular transport and are accessible only by boat. The impacts are spread over about 70 percent of the entire province road network 4, which means 2,200 km of roads, including 30 bridges and culverts, 14 drifts and 62 aqueducts. 10. The damage to the road infrastructure affects the main road corridors in the province; the south-north/west corridor connecting Chokwe with Chicualacuala at the border with Zimbabwe, west-east corridor in the North of the province impacting the districts of Chicualacuala and Massangena, and the dense road network in the south of the province affecting the districts of Chokwe, Guija, Chibuto, Xai-Xai and Manjacaze. 11. The vulnerability of the population living around the affected areas was also recognized by the GoM. In response to the floods in early 2013 that devastated a number of provinces, in particular the Lower Limpopo valley, the GoM submitted a revised budget in order to rebuild destroyed infrastructure and thus mitigate the vulnerability of those affected. 12. Time is one of the most important factors in this emergency situation. Therefore, the solutions need to be fast, precise, and innovative. GoM, using local contractors and provincial consultants, has temporarily restored several critically damaged areas, however the remaining urgent (immediate) works are in the magnitude of US$15.0 million. In order to restore the basic connectivity to remaining cut off communities, ahead of the next rainy season, the remaining urgent physical works need to commence immediately. The other category of works, medium- term works or “build back better” works, have much wider scope and therefore require further detailed and engineering investigations. These medium term works will be implemented from next dry season onwards. Since the planned activities under AF2 are fully compatible with the 4 Gaza province has a total road network of 3,205 km which represents 10.6 percent of the national road network. This road network is divided in the following five categories: primary (280 km), secondary (752 km), tertiary (1,101 km), vicinity (578 km) and non-classified roads (494 km). Only 625 km (19.5 percent) of the provincial road network are paved roads. The road network in Mozambique is divided in two classes; classified and unclassified. The institutional responsibility for the classified road network (approximately 30,000 kilometers comprising of Primary, Secondary, Tertiary, and Vicinal roads) is of the National Roads Administration (ANE), while the unclassified roads (official estimate about 6,000 kilometers comprising of Rural and District roads) are under provincial and district authorities. ANE head office is directly responsible for rehabilitation and periodic maintenance of the National Roads which includes Primary and Secondary road network. ANE provincial delegation is responsible for the routine maintenance of the entire classified road network, both paved and unpaved. ANE provincial delegation, acting on behalf of ANE, is also responsible for rehabilitation and periodic maintenance of secondary roads, tertiary, and vicinal road network. The provinces/districts are fully responsible for the unclassified road network which is unpaved. 3 RBMMP2 design and objectives, this additional financing, through an ongoing satisfactorily implemented project, was the first natural choice for the emergency response. The alternatives considered were planning a new operation or fast tracking next phase of the APL, but these options would take much longer time and will cause an additional substantial delay in implementation of the required civil works. 13. The project cost is US$183.75 million. Based on the currently available resources, the project has a financing gap of US$73.6 million. The immediate emergency works are fully funded. The financing gap is expected to be filled in time for the commencement of implementation of the medium-term rehabilitation works scheduled for mid-2014, and therefore is unlikely to impact the overall achievement of project development objectives. The government will endeavor to secure these additional funds from other donors or from IDA (either through IDA 16 reallocation if possible, or IDA 17 country allocation). As needed, the project would be realigned/restructured to enable project activities to be implemented in a timely and orderly manner. 14. This Additional Financing (AF2) triggers paragraph 11 of OP/BP 10.00 as a “Project in Situations of Urgent Need of Assistance”, where the Recipient is in “(i) urgent need of assistance because of a natural disaster”. Pursuant to Paragraph 11 of OP/BP 10.00, certain fiduciary, environmental and social safeguards requirements have been deferred to the project implementation phase. The applicable requirements are those under: OP/BP 4.01 Environmental Assessment (for Environmental Category A and B projects), OP/BP 4.11 Physical Cultural Resources, OP/BP 4.12 Involuntary Resettlement, and OP/BP 11.00 Procurement. Status of the Ongoing Project 15. The RBMMP2 was approved on May 23, 2007 in an amount of US$100.0 million, declared effective on October 5, 2007, and was scheduled to close on June 30, 2011. A restructuring and additional financing of US$41.0 million, and an extension of the project closing date to December 31, 2012, was approved on April 7, 2011. The additional financing, which became effective on September 27, 2011, increased the total project cost of RBMMP2 to US$141.0 million. The RBMMP2 was restructured the second time on November 19, 2012, to incorporate the additional activities resulting from adverse weather conditions, which occurred in early 2012 affecting the road network country wide. The project closing date was also extended at that time, by one year, to December 31, 2013. Today, the situation is changed as a result of the new floods in January 2013. 16. The ongoing project, RBMMP2, is a part of an APL program designed in three phases to support the Government’s road sector program from 2001 - 2011. Phase I (RBMMP-APL1) with a credit amount of SDR 127.4 (approximately US$186.4 million) was designed as a four-year program starting on July 1, 2001. The credit closed in June 2007. The third project in the series is targeted for delivery in fiscal year 2015. 17. RBMMP2 supports the Programa Integrado do Sector de Estradas (Integrated Road Sector Program 2012-15) (PRISE), Mozambique’s road sector program. PRISE has three main components: (A) Overhead Costs; (B) Maintenance of Road Works; and (C) Investments. 4 RBMMP2 contributes to components (A) and (B) through a US$39.0 million allocation to the pooled fund, and to component (C) with US$102.0 million for infrastructure investments and related consultant’s services for civil works aimed at rehabilitating and upgrading 102 km of the N1 in two sections in Maputo, Gaza and Inhambane Provinces. The initial plan included 160 km of road but one section, covering 58 km was removed from the plan due to construction cost increase. The civil works of that section were then financed by the Government of Portugal while the Bank financed the supervision. 18. The last update of PRISE covering the period 2012-14 was completed in 2013. A new PRISE for the period of 2015-2019 will be prepared and it will be aligned with the next five-year Government program as well as with the 2015-2018 Plano de Acção para a Redução da Pobreza (Action Plan for the Reduction of Poverty) (PARP). The project closely addresses key priorities identified in the FY12-15 Country Partnership Strategy under Pillar 1 Competitiveness and Employment and Pillar II Vulnerability and Resilience. 19. The project development objective (PDO) of the Project is to assist the Recipient in: (a) improving the coverage and conditions of its roads and bridges; (b) strengthening its institutional capacity to manage and administer the road sector; (c) establishing financing mechanisms for road maintenance; (d) promoting the use of local resources in roads construction and management; and (e) improving its road transport safety. With the proposed additional financing, there will be no change to the PDO set for RBMMP2. 20. Currently, the overall achievement of the PDO for RBMMP2 is Satisfactory. As of June 2013, the Key Project Indicator (KPI) 1, the percentage of the classified roads in good and fair condition was 72 percent, the target value. The KPI 2, the percentage of the rural population within 2 kilometers of an all season classified road, has met the target (32.7 percent against target of 43.2 percent in 2016). All three major civil works components have been completed. Almost all other project activities, including the new activities added upon project restructuring in October 2012, will be substantially completed by the current closing date December 31, 2013. Overall, the Project Implementation Progress is rated as Moderately Satisfactory. 21. One of the roads included in the RBMMP2, Xai-Xai Chissibuca road, implemented under a traditional input type of contracting, had experienced premature cracking of the road pavement. The Technical and Contractual Audit report prepared by an independent Auditor was received in August 2013. The Audit has defined that the contractor and the supervising engineer are primarily responsible for the observed defects. Currently, the GoM is in discussion with the responsible parties so that the country can receive the value for money paid for rehabilitation of this important national road. 22. The Financial Management and Procurement performance is Moderately Satisfactory due to the delays and observed inconsistencies in processing procurement transactions and challenges related to improving financial management of the Road Fund (RF). An Action Plan for improved financial management is under implementation. A significant component of the action plan is related to providing capacity building to RF’s accountants throughout the country as well as the finalization and roll out of the integrated financial management system. There are no overdue audits for this project or Interim Financial Reports (IFRs) from the implementing agency. 5 23. The project does not have any unresolved environmental and/or social safeguards issues. The environmental and social safeguards performance under the original project was rated Satisfactory in the most recent Implementation Status and Results (ISR) report dated June 27, 2013. The RMMMP2 is a Category B Project. The three safeguard OP/BPs triggered in the original project are 4.01, 4.11, and 4.12 were all rated as Satisfactory in the June 2013 ISR. The same Environmental Assessment classification, i.e., Category B, and safeguards policies apply to the proposed AF2 activities. The safeguards instruments prepared for the original Project are an Environmental and Social Impact Assessment (ESIA) and Environmental and Social Mitigation Plan (ESMP) originally disclosed in 2006 and updated in 2010 and May 2013. A Resettlement Policy Framework (RPF) and a RAP for the N1 road between Jardim and Benfica was also prepared and disclosed in 2006. An external evaluation of the RAP noted successful completion of the resettlement process. The updated ESIA shall guide the preparation of ESMPs for each sub-project of the emergency-related civil works. It is not expected that any RAPs will be prepared, as there will be no land acquisition leading to involuntary resettlement or restrictions of access to resources or livelihoods. III. PROPOSED CHANGES TO THE ON-GOING PROJECT 24. The main changes are to: (a) incorporate the additionally required emergency components related to the current floods in Limpopo River Basin; (b) introduce a pilot program for climate resilient rural road infrastructure; and (c) extend the project closing date, to allow for implementation of the planned mitigation. 25. The additional components include: (a) Emergency related works in the Limpopo River Basin (approximately US$153.0 million including US$39.4 million from the IDA CRW): The floods have severely damaged about 18 stretches of road and bridges, including three locations along the main National road (N1). The unpaved roads of the secondary and tertiary road network, key to accessing services in rural areas, have been equally impacted, causing major disruptions in transportation of the people and goods throughout the Limpopo Valley. The damages are critical and therefore need the planned urgent repairs to restore the normal life of the affected population in this part of the country. The emergency works can be categorized into two major groups: i. Immediate Emergency Works (approximately US$15.0 million; GFDRR financed): Carrying out of small emergency works (spot interventions), including associated consulting services. The relatively small emergency works could be implemented speedily by the currently engaged contractors in these areas and such expenditure could be retroactively financed. The GoM, using provincial resources, has already temporarily restored several important damages. This component also includes associated consulting services (supervision). ii. Medium Term Restoration/Rehabilitation Works (approximately US$138.0 million; IDA CRW funding US$24.40 million from the total of US$39.4 million 6 from the CRW and GoM US$40.0 million)5: Carrying out of works related to substantive medium and long term technical solutions to be prepared under Design and Build (DBT) methodology using an Output and Performance Based (OPRC) type of contract including associated consulting services and contingencies. The second group of works involves more complex and intensive works related to substantive medium and long term technical solutions which will also reduce future flood damage and minimize their adverse influence in the area. These will be prepared under Design-Build-Transfer (DBT) methodology using an Output and Performance Based (OPRC) form of contract, which transfers the majority of the project risks to a contracting party. This component also includes associated consulting services and contingencies. The construction of these works will commence in July 2014, after completing required contract documentation. (b) Pilot Program for Climate Resilient Rural Road infrastructure (approximately US$15.75 million - CIF funded): There are two distinct activities planned under this component: iii. Development of national technical design standards and specifications for climate resilient roads, including: (i) the carrying out of a review of existing design standards and construction maintenance approaches to ensure these better address climatic risks; and (ii) development of technical standards and maintenance approaches for paved and unpaved classified road network to include capacity- building programs for local contractors and service providers. This activity will be complemented by an ongoing project in the water sector that supports the necessary improvement in accurately flood modeling in Lower Limpopo Valley area. iv. Piloting of climate resilient road designs, including the development and piloting of improved maintenance approaches to include capacity-building programs for local contractors and service providers. This activity will support piloting and designs for rural unclassified roads and associated hydraulic structures as well as the piloting for improved methodologies for maintenance and monitoring - providing for more responsive repairs by local contractors. The development and piloting of the improved maintenance approaches will include capacity-building programs for local contractors and service providers. It is envisaged the experience from these pilots would be scaled up to the rest of the network, through support by the Road Fund and/or by other development partners. (c) Incremental Operating Costs and Training of Road Fund and Administração Nacional de Estradas (ANE) (National Road Administration) staff (US$5.0 million-IDA funded): This sub-component is an ongoing activity under the RBMMP2.The proposed activity will scale up the institutional capacity building efforts and contribute to the skill enhancement of staff involved in the sector, specifically related to trigger a fast response in emergency situations. In addition, it will finance the engagement of a 5 There is a financing gap of US$73.6 million for the works in this group that is expected to be fully covered ahead of commencement of implementation of these works scheduled for mid-2014. 7 consulting firm which will provide experienced professionals in key areas of contract management and procurement, who will work on-line within ANE and provide on-the- job training. (d) Immediate Response Contingency Fund (US$0 million): Establishment of an immediate response mechanism to facilitate access to rapid financing for disaster response in the aftermath of a national disaster to be triggered through formal declaration by the Recipient of national or regional state of emergency. It establishes a zero-budget Immediate Response Contingency Fund that could be triggered in the event of a natural disaster through formal declaration of national or regional state of emergency, or upon a formal request from the Government in the wake of a disaster. Upon triggering, a reallocation of project funds could be undertaken to facilitate such rapid financing. The list of eligible goods, services, and works would include only those activities included in other components of a project and would thus avoid triggering additional safeguards policies. Once triggered, the use of OP/BP 8.00 facilitates rapid utilization of credit proceeds by minimizing the number of processing steps and enabling rapid implementation. Table 1: Cost of the Additional Activities proposed under the AF2 (US$ millions) Expendi- Govt. ture IDA Counterp GFDRR/ Project Component Category Cost CIF Financing art DfID of Parent (US$ m) Funding Project Component 1. Emergency related works in the Limpopo 153.00 40.00 15.00 24.40 River Basin Sub-component 1.1: Immediate New 15.00 - 15.00 0 Emergency Works Category Sub-component 1.2: Medium term New 138.00 6 40.00 - 24.40 Rehabilitation Works Category Component 2 Pilot Program for New building Climate Resilient 15.75 15.75 0 Category Rural Road infrastructure Sub-component 2.1: Preparation of National Design and 4.00 Construction Standards Sub-Component 2.2: Piloting of climate resilient unclassified road 11.75 planning, designs and maintenance Component 3: Training and 1 5.00 5.00 Incremental Operating Costs 6 There is a financing gap of US$73.60 million relating to medium term rehabilitation works. This financing gap is expected to be filled in time for commencement of such works in mid-2014 by additional funds from other donors or from IDA (IDA 16 reallocation if possible, or IDA 17 country allocation). 8 Expendi- Govt. ture IDA Counterp GFDRR/ Project Component Category Cost CIF Financing art DfID of Parent (US$ m) Funding Project Total Baseline Cost 173.75 40.00 15.00 15.75 29.40 Contingencies./Unallocated 10.00 included included 10.00 Total Project Cost 183.75 40.00 15.00 15.75 39.40 26. In order to facilitate project implementation and in response to the request from the GoM, retroactive financing has been agreed for the proposed AF2 activities procured in accordance with applicable Bank procurement guidelines. 27. Further details of AF2 activities are available in Annex 3. 28. Current implementation arrangements applied in RBMMP2 will be enhanced, to correspond to the emergency nature and scope of the required services for the planned additional activities. The Road Fund (RF) will remain the Project Implementing Entity and be responsible for the financial management of the Project. The National Road Administration (ANE) will be responsible for the implementation of the project activities (engineering, social and environmental safeguards, procurement, and contracts management). In order to respond faster to the post-disaster situation, a dedicated Flood Response Team (FRT) will be set up within ANE organization. The FRT will involve a group of fully empowered and experienced professionals, supported by a consulting Firm-Technical Support Group (TSG) composed of four professionals, who will work on-line and provide the necessary on-the-job training. FRT members will be dedicated fully to the implementation of flood related components included in AF, for the duration of the project. It is expected that this implementation approach will eventually also serve as an example for the Road Sector to effectively manage crisis and other emergency situations impacting the transport sector. 29. Primarily, the institutional responsibility for the entire classified road network is with the ANE. ANE headquarters is responsible for rehabilitation and periodic maintenance of the National Roads which include primary and secondary road networks. ANE provincial delegation is responsible for the routine maintenance of the entire classified road network, both paved and unpaved, including N1. ANE provincial delegation is also responsible for rehabilitation and periodic maintenance of the classified tertiary and vicinity road network. The institutional responsibilities will be further streamlined to strengthen the project implementation. 30. The results framework developed under RBMMP2 has been revised to take into account the proposed activities of the AF2. As a result of the additional activities, several indicators have been updated for target values, while three new indicators have been introduced. The proposed changes and revisions are listed in Table 2. 9 Table 2: Proposed Revisions to Project Outcome Indicators Revisions to the Results Framework Comments/ Rationale for Change PDO Current (PAD) Proposed The project development No change objective of this phase of the APL is to improve access of the population to all-season roads through maintenance, rehabilitation and upgrading of the classified road network. Project Outcome Indicators Current (PAD) Proposed change Comments Percentage of classified roads in Target Revised, see Annex 1 Due to Limpopo basin floods good and fair condition 2013, 13% of classified road network was badly damaged and consequently the end of project targets have been revised Percentage of the rural population Target Revised, see Annex 1 Targets revised as the end of within two kilometers of an all- original project target already season classified road exceeded. Project Beneficiaries (Rural Only) Target Revised, see Annex 1 The target values revised in line Of which are female with indicator two above. Intermediate Results indicators Current (PAD) Proposed change Comments Policy for the management of Dropped Completed July 1, 2011. Policy unclassified roads adopted and implementation plan prepared. New Road Act Dropped Completed. New Road Act approved in April 2011 and implemented in September 2011. Percentage of annual execution of No change maintenance achieved on paved and unpaved roads Number of km of N1 rehabilitated Dropped Completed November 2, 2012 and upgraded as per plan Cyclone Affected road sections Revised to “Cyclone and Revised to incorporate repaired Floods affected road sections increased scope of works of 10 Revisions to the Results Framework Comments/ Rationale for Change repaired” immediate emergency activities following January 2013 floods. Damaged drifts/ reconstructed Revised to “Damaged drifts Revised to incorporate increase and bridges reconstructed” scope of works following January 2013 floods. Permanent weigh bridge installed in No change Macia Number of kilometers of flood New This indicator is to cover the damaged roads rehabilitated in medium-term rehabilitation of Limpopo roads damaged by January 2013 floods in Gaza Province Establishment/Revision of National New New component added under Design Specifications to address the PPCR financing climate resilience in standards for paved and unpaved road network Reduction in weather induced New New component added under disruptions on selected rural roads in the PPCR financing. The target Gaza province values will be confirmed after completion of the preparatory studies. Financial Management 31. The RF will open three additional Designated Accounts at the Banco de Moçambique to receive and make payments from IDA CRW Additional Financing (Grant and Loan), GFDRR and PPCR (Grant and Loan), respectively. Each of these accounts may only be used to finance IDA, GFDRR and PPCR respective parts of the project. The IDA CRW Designated Account will pool proceeds from the Grant and Credit; the PPCR Designated Account will pool proceeds from the Loan and from the Grant. Furthermore, the RF will submit two revised IFRs on a quarterly basis; one exclusively for Disbursement Category 1 (IFR 1) of the IDA Financing Agreement and the other (IFR 2) all other parts of the project and corresponding disbursement categories, including parts of the project financed by IDA PPCR and GFDRR as applicable. To simplify reporting, additional categories will also be established and their financing percentages will be documented in the Financing Agreement. Where co-financing applies, attribution of eligible expenditures will be done on a quarterly basis through the IFRs to each of the financing instruments. 32. The only disbursement methods available are Reimbursements and Advances and eligible expenditures can only be documented in IFRs. This will allow some flexibility in the attribution of eligible expenditures to each of the financing instruments, taking into consideration that the financing percentages are 100 percent. 11 Procurement 33. The procurement plan contains substantial levels of flexibility to attend to emergency procurement under the Immediate Response Mechanism to repair road damage after the January 2013 floods in Mozambique. Thus, all emergency works to be carried out are to be procured through shopping and supervision through consultant qualification selection. The threshold for shopping has been increased up to US$2.5 million and for consultant qualification selection up to US$0.5 million. Extension of closing date 34. The new closing date of the project is December 31, 2016. Implementation Schedule 35. Procurement of works and consulting services for executing immediate emergency works has been launched. It is expected that all immediate emergency works will be underway by end October 2013. Procurement for services for preparing concept designs and bidding documents for medium term works has also been initiated and associated Terms of Reference (ToR) finalized. 12 Summary of Proposed Changes The main changes are to: (a) incorporate the additionally required emergency components related to the current floods in Limpopo River Basin; (b) introduce a pilot program for climate resilient rural road infrastructure; and (c) extend the project closing date, to allow for implementation of the planned mitigation. Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ ] No [ X ] Change in Results Framework Yes [ X ] No [ ] Change in Safeguard Policies Triggered Yes [ ] No [ X ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ X ] No [ ] Change in Loan Closing Date(s) Yes [ X ] No [ ] Cancellations Proposed Yes [ ] No [ X ] Change in Disbursement Arrangements Yes [ ] No [ X ] Reallocation between Disbursement Categories Yes [ ] No [ X ] Change in Disbursement Estimates Yes [ X ] No [ ] Change to Components and Cost Yes [ X ] No [ ] Change in Institutional Arrangements Yes [ X ] No [ ] Change in Financial Management Yes [ X ] No [ ] Change in Procurement Yes [ X ] No [ ] Change in Implementation Schedule Yes [ X ] No [ ] Other Change(s) Yes [ ] No [ X ] Development Objective/Results Project’s Development Objectives Original PDO The project development objective (PDO) of the Project is to assist the Recipient in: (a) improving the coverage and conditions of its roads and bridges; (b) strengthening its institutional capacity to manage and administer the road sector; (c) establishing financing mechanisms for road maintenance; (d) promoting the use of local resources in roads construction and management; and (e) improving its road transport safety. Change in Results Framework Explanation: The results framework developed under RBMMP2 has been revised to take into account the proposed activities of the AF2. As a result of the additional activities, several indicators have been updated for target values, while three new indicators have been introduced. 13 Compliance Covenants - Additional Financing ( Mozambique Roads and Bridges Management and Maintenance Project Phase 2 - Additional Financing - P146402 ) Source of Finance Agreement Frequ Funds Description of Covenants Date Due Recurrent Action Reference ency The Subsidiary Agreement Financing Agreement has been executed on between the Republic 21-Apr- IDA behalf of the Recipient and New of Mozambique and 2014 the Project Implementing IDA Article V 5.01 a Entity. The Project Implementation Manual Financing Agreement shall have been updated between the Republic 21-Apr- IDA and adopted by the New of Mozambique and 2014 Recipient in a manner IDA Article V 5.01 b satisfactory to the Association. No withdrawal shall be made from the Credit and Grant under the Additional Financing II in respect of Category 5 for payments made prior to the date of Financing Agreement this Agreement, except between the Republic that withdrawals up to an IDA of Mozambique and aggregate amount not to IDA exceed USD 15 750 000 Schedule 2 Section IV, (fifteen million seven B. 1 hundred thousand Dollars) equivalent may be made for payments made prior to this date but on or after July 1, 2013 for Eligible Expenditures. The SCF/PPCR Loan Agreement has been signed and delivered, all SCF/Pilot Program for conditions precedent to its Climate Resilience 21-Apr- SCF effectiveness or the right New Grant Agreement 2014 of the Recipient to make Article V 5.01a withdrawals under it (other than the effectiveness of this Agreement have been 14 fulfilled. The Subsidiary Agreement SCF/Pilot Program for has been executed on Climate Resilience 21-Apr- SCF behalf of the Recipient and New Grant Agreement 2014 the Project Implementing Article V 5.01b Entity. The Project Implementation Manual SCF/Pilot Program for shall have been updated Climate Resilience 21-Apr- SCF and adopted by the New Grant Agreement 2014 Recipient in a manner Article V 5.01c satisfactory to the Association. The Subsidiary Agreement GFDRR Grant has been executed on 21-Apr- GFDRR Agreement Article V behalf of the Recipient and New 2014 5.01a the Project Implementing Entity. The Project Implementation Manual GFDRR Grant shall have been updated 21-Apr- GFDRR Agreement Article V and adopted by the New 2014 5.01b Recipient in a manner satisfactory to the Association. The SCF/PPCR Loan Agreement has been signed and delivered, all conditions precedent to its Strategic Climate Fund effectiveness or the right 21-Apr- SCF Loan Agreement New of the Recipient to make 2014 Article V 5.01a withdrawals under it (other than the effectiveness of this Agreement have been fulfilled. The Subsidiary Agreement Strategic Climate Fund has been executed on 21-Apr- SCF Loan Agreement behalf of the Recipient and New 2014 Article V 5.01b the Project Implementing Entity. Strategic Climate Fund The Project 21-Apr- SCF Loan Agreement Implementation Manual New 2014 Article V 5.01c shall have been updated 15 and adopted by the Recipient in a manner satisfactory to the Association. Finance Loan Closing Date - Additional Financing ( Mozambique Roads and Bridges Management and Maintenance Project Phase 2 - Additional Financing - P146402 ) Source of Funds Proposed Additional Financing Loan Closing Date Strategic Investment Fund 31-Dec-2016 Global Facility for Disaster Reduction and Recovery 31-October-2015 IDA Credit from CRW 31-Dec-2016 IDA Grant from CRW 31-Dec-2016 Loan Closing Date(s) - Parent ( Roads and Bridges Management and Maintenance Program - Phase II - P083325 ) Explanation: It is proposed to extend the project’s closing date by 36 months from December 31, 2013 to December 31, 2016, to allow the completion of scaled up activities. The cumulative extension of the closing date would be 66 months. IDA 43080 is 100% disbursed and will be closed. Status Original Closing Current Closing Date Proposed Closing Previous Closing Ln/Cr/TF Date Date Date(s) 31-Dec-2013, IDA-43080 Effective 30-Jun-2011 31-Dec-2013 31-Dec-2012, 31-Dec-2013 31-Dec-2012, IDA-48920 Effective 31-Dec-2012 31-Dec-2013 31-Dec-2016 31-Dec-2013, Change in Disbursement Estimates (including all sources of Financing) Explanation: Closing date extension to December 31, 2016 Expected Disbursements (in USD Million) Fiscal Year 2014 2015 2016 2017 Annual 10.15 30.00 10.00 5.00 Cumulative 10.15 40.15 50.15 55.15 Allocations - Additional Financing ( Mozambique Roads and Bridges Management and Maintenance Project Phase 2 - Additional Financing - P146402 ) Source of Fund Currency Category of Allocation Disbursement % (Type 16 Expenditure Total) Proposed Proposed (1) Goods, works (except as covered by Category 2), services (other than consultants’ services), consultants’ IDA XDR 3,008,000 100% services (except as covered by Category 3), Training and Operating Costs for PART A and PART B of the Project IDA XDR (4) Unallocated 533,000 100% (5) Works and Consultants’ services IDA XDR 1,300,000 100% under Parts D (b) of the Project (1) Goods, works, services, training and SCF Grant USD operating costs under Part 9,250,000 100% E of the Project (1) Goods, works, services, training and SCF Loan USD 6,500,000 100% operating costs under Part E of the Project SDR 4,841,000 and Total: US$15,750,000 Components Change to Components and Cost Explanation: The Project has following new components: PART D: Emergency related works in the Limpopo River Basin (a) Immediate Emergency Works: Carrying out of small emergency works (spot interventions), including associated consulting services. (b) Medium Term Restoration /Rehabilitation Works: Carrying out of works related to substantive medium and long term technical solutions to be prepared under Design and Build (DBT) methodology using an Output and Performance Based (OPRC) type of contract 17 including associated consulting services and contingencies. PART E: Program for Climate Resilient Rural Road Infrastructure (a) Development of: (i) national technical design standards and specifications for climate resilient roads, including (i) the carrying out of a review of existing design standards and construction maintenance approaches to ensure these better address climatic risks; and (ii) development of technical standards and maintenance approaches for paved and unpaved classified road network to include capacity-building programs for local contractors and service providers. (b) Piloting of climate resilient road designs, including: (i) the development and piloting of improved maintenance approaches to include capacity-building programs for local contractors and service providers. PART F: Immediate Response Contingency Fund Establishment of an immediate response mechanism to facilitate access to rapid financing for disaster response in the aftermath of a national disaster to be triggered through formal declaration by the Recipient of national or regional state of emergency. Proposed Component Current Cost Proposed Cost Current Component Name Action Name (US$M) (US$M) OVERHEADS OVERHEADS 70.76 76.75 No Change MAINTENANCE MAINTENANCE 266.69 266.69 No Change INVESTMENTS INVESTMENTS 746.85 746.85 No Change Emergency related works in the Limpopo River 0.00 24.40 New Basin Program for Climate Resilient Rural Road 0.00 15.75 New Infrastructure Immediate Response 0.00 0.00 New Contingency Fund Unallocated 0.00 10.00 New Total: 1,084.30 1,140.44 Other Change(s) Change in Institutional Arrangements Explanation: The Government of Mozambique will setup a dedicated Flood Response Team (FRT) within ANE, in order to 18 respond faster to the post-disaster situation. The FRT will involve a group of fully empowered and experienced professionals, supported by a consulting Firm-Technical Support Group (TSG) composed of four professionals, who will work on-line and provide the necessary on-the-job training. FRT members will be dedicated fully to the implementation of flood related components included in AF, for the duration of the project. Change in Financial Management Explanation: The RF will open three additional Designated Accounts at the Banco de Moçambique to receive and make payments from IDA CRW Additional Financing (Grant and Loan), GFDRR and PPCR (Grant and Loan), respectively. Each of these accounts may only be used to finance IDA, GFDRR and PPCR respective parts of the project. Change in Procurement Under the Immediate Response Mechanism, higher procurement thresholds have been allowed to expedite procurement of emergency works. The Procurement Plan contains substantial levels of flexibility to attend to emergency procurement under the Immediate Response Mechanism to repair road damage after the January 2013 floods in Mozambique. Thus, all emergency works to be carried out are to be procured through shopping and supervision through consultant qualification selection. The threshold for shopping has been increased up to US$2.5 million and for consultant qualification selection up to US$0.5 million. Change in Implementation Schedule Procurement of works and consulting services for executing immediate emergency works has been launched. It is expected that all immediate emergency works will be underway by end October 2013. The medium term emergency works are likely to be procured by mid-2014. Appraisal Summary Economic and Financial Analysis Explanation: The selection of roads for the project has been based on the multi-criteria analysis (MCA) of the damaged roads. The MCA approach incorporates assessments of each sub-project’s contribution in four areas: (a) economic viability; (b) connectivity; (c) accessibility; and (d) social weight. The economic viability analysis was carried out using the available data and estimated project costs using a highway development model version 4 (HDM4) calibrated for the Mozambique environment. A prioritized list of roads based on all above criteria has been identified for this project. Technical Analysis Explanation: All physical components are included in the two groups of works, the immediate emergency works and the medium term restoration/rehabilitation works The first group of emergency works will be implemented 19 based on input (Bill of Quantities - BOQ based) type of civil works contract under national competitive bidding (NCB). Their nature is to restore the current situation which was disrupted by the floods. Such spot interventions do not represent major engineering challenges, but provide for essential accessibility and movement of goods and people. The second group of works involves rehabilitation of major key points and structures, bridges, new horizontal and vertical alignments. Total value of these works is in the magnitude of about US$136 million, requiring preparation of conceptual designs and using OPRC based on DBT methodologies. The DBT approach will provide for an effective risks transfer from the government to implementing parties and it will provide the necessary quality and cost control for works to be implemented under a lump sum price option. Using the conceptual designs and OPRC contract format also provide space for contractor’s innovations, fast designs during the construction period within much faster and better controlled time tables for implementation The development of climate resilient road standards is considered a national priority which could have a transformative impact on the construction and maintenance of the road network by building climate resilience into the roads sector. The pilot on rural classified roads will include designs that improve resilience of roads and associated hydraulic structures to flooding as well as enhancing their potential benefits for dry season water retention (droughts and water shortages are a major climate risks to livelihoods in the Lower Limpopo area). Social Analysis Explanation: All emergency related project activities will be implemented under OP 10, paragraph 11. Environmental and Social Management Plans for the sub-projects, based on the Environmental and Social Impact Assessment (ESIA) prepared for RBMMP2 in 2006, and updated in 2010 and 2013. The emergency additional financing will encompass two approaches to safeguards mitigation: (a) For the smaller, urgent restoration civil works, implementation of the Environment and Social Clauses (ESC) contained in the ESMP will be included as a requirement in each civil works contract. Additionally, supervision and reporting on the implementation of the ESCs will be required of the Resident Engineer contracted to supervise the works. (b) For the more complicated medium term works and the proposed climate resilient roads infrastructure, the contractor(s will prepare a site specific ESIA/ESMP (depending on the length and complexity involved), based on the initial generic ESMP prepared by ANE. As in the case of the urgent civil works, the Resident Engineer, contracted to supervise the civil works, will also supervise and report on the implementation of the ESC. RBMMP-2 triggered OP/BP 4.11 (Physical Cultural Resources). The location of the emergency restoration civil works does not include works located in, or in the vicinity of, recognized cultural heritage sites. Nevertheless, a section on chance find procedures will be included, as part of the ESC in all new contracts, and is included in the project ESIA/ESMP. 20 OP/BP 4.12 on Involuntary Resettlement is triggered because there might be possibilities of encroachment on a few pieces of land during road construction/rehabilitation due to the movement of heavy machineries. Since the likelihood is very minimal to negligible, preparation of a Resettlement Action Plan (RAP) is not expected during the course of this project. The updated RPF will be disclosed both in-country and at the InfoShop during project implementation. RAPs may be prepared as and when necessary during project implementation, in conformity with the RPF; however, it is unlikely the project will involve land acquisition leading to involuntary resettlement and/or restrictions of access to resources and livelihoods. The overall social impacts of the project are foreseen to be very positive due to the accessibility and affordability of transport services resulting from the rehabilitation/reconstruction works funded by this AF2. The original three sub-projects financed under RPMMP2 were delivered satisfactorily from an environmental and social safeguards point of view in accordance with the original ESIA/ ESMP. The Safeguards Audit of May 2012 reported that the RAP was implemented successfully, within the agreed timeframe, and in a consultative and participatory manner (i.e. gender and vulnerable groups’ consideration). As part of the preparation for the current emergency restoration works, it was agreed that ANE would conduct quarterly safeguards supervision of all ongoing civil works under RBMMP2 and report accordingly on progress and compliance to IDA. The Bank Team will continue to supervise implementation of the project’s safeguards instruments. Environmental Analysis Explanation: All emergency related project activities will be implemented under OP 10, paragraph 11. Environmental and Social Management Plans for the sub-projects, based on the Environmental and Social Impact Assessment (ESIA) prepared for RBMMP2 in 2006, and updated in 2010 and 2013, are being prepared for all emergency related civil works. For some of the larger works, an ESIA may also be prepared. As described above, this emergency additional financing will cover three basic types of works that will encompass two approaches to safeguards mitigation: (a) For the smaller, urgent restoration civil works, implementation of the Environment and Social Clauses (ESC) contained in the ESMP will be included as a requirement in each civil works contract. Additionally, supervision and reporting on the implementation of the ESCs will be required of the Resident Engineer contracted to supervise the works. (b) For the more complicated medium term works that will be executed following the “build-back- better” concept and the proposed climate resilient roads infrastructure (both of which will be undertaken on existing roads and will not involve new construction), the contractor(s), who will prepare the detailed design following the DBT methodology, will also prepare a site specific ESIA/ESMP (depending on the length and complexity involved), based on the initial generic ESMP prepared by ANE, for implementation as the works are being carried out. As in the case of the urgent civil works, the Resident Engineer, contracted to supervise the said civil works, will supervise and report on the implementation of the ESC. RBMMP-2 triggered OP/BP 4.11 (Physical Cultural Resources). Though the location of the emergency 21 restoration civil works does not include works located in, or in the vicinity of, recognized cultural heritage sites, a section on chance find procedures will be included, as part of the ESC in all new contracts, and is included in the project ESIA/ESMP. Likewise, ANE and RF have been updating the revised 2010 Resettlement Policy Framework (RPF) of both the parent project and RBMMP2 in order to ensure project overall compliance with OP/BP 4.12 on Involuntary Resettlement. The Policy is triggered because there might be possibilities of encroachment on a few pieces of land during road construction/rehabilitation due to the movement of heavy machineries. Since the likelihood is very minimal to negligible, preparation of a Resettlement Action Plan (RAP) is not expected during the course of this project. ANE will conduct quarterly safeguards supervision of all ongoing civil works under RBMMP2 and report on progress and compliance to IDA. The Bank Team will continue to supervise implementation of the project’s safeguards instruments. Risk Explanation: Due to various challenges including capacity of implementing agency and coordination with another project funding components to be designed and implemented under this project, the preparation risk rating is rated ‘Moderate’. Besides the challenges associated with the weak local private sector capacity and the capacity of the implementing agency, the project outcomes will be at a risk if the financing gap were to persist. Specifically, the implementation of the medium term emergency works will be partially accomplished. IV. APPRAISAL SUMMARY 36. Technical: All physical components are included in the two groups of works. The immediate emergency works and the medium term restoration/rehabilitation works, have been carefully planned and associated Terms of Reference developed and approved. The first group of works will be implemented by the current contractors already engaged in the area, which, after considering their financial and technical capabilities, will be capable to provide timely and orderly implementation. These works packages planned into three major civil works contracts, each in the range of about US$5 million, will be supervised by the consultants locally available and capable of carrying the supervision and the required oversight services. These works will be implemented based on input (Bill of Quantities - BOQ based) type of civil works contract under national competitive bidding (NCB). Their nature is to restore the current situation which was disrupted by the floods. Such spot interventions do not represent major engineering challenges, but provide for essential accessibility and movement of goods and people. The BOQ and the technical details have been worked out and are approved by the Bank. 37. The second group of works involves more complex and longer term solutions, which are required not only to restore the most affected areas, but also to prevent adverse effects of future floods by incorporating long term solutions and modern technical and engineering solutions. The works involve rehabilitation of major key points and structures, bridges, new horizontal and vertical alignments, based on the on-going Laser Interferometry Detection and Radar (LIDAR) surveys in the Limpopo river basin (providing modeling for different flooding scenarios and 22 extent of high water levels) and modern geotechnical solutions responsive to the local poor soil conditions. Total value of these works is in the magnitude of about US$136 million, requiring preparation of conceptual designs and using OPRC based on DBT methodologies. The DBT approach will provide for an effective risks transfer from the government to implementing parties and it will provide the necessary quality and cost control for works to be implemented under a lump sum price option. Using the conceptual designs and OPRC contract format also provide space for contractor’s innovations, fast designs during the construction period within much faster and better controlled time tables for implementation. The ToR for the implementation of the design aspects have been agreed and approved and the associated Expression of Interest for this consultancy services has already been advertised. 38. Economic Analysis: The selection of roads for the project has been based on the multi- criteria analysis (MCA) of the damaged roads. The MCA approach incorporates assessments of each sub-project’s contribution in four areas: (a) economic viability; (b) connectivity; (c) accessibility; and (d) social weight. The economic viability analysis was carried out using the available data and estimated project costs using a highway development model version 4 (HDM4) calibrated for the Mozambique environment. The final selection and other details are included in Annex 6. 39. The review of design standards will also take on board lessons emerging from a forthcoming provincial level pilot in Niassa and Nampula provinces. The development of climate resilient road standards is considered a national priority which could have a transformative impact on the construction and maintenance of the road network by building climate resilience into the roads sector. It was identified as a priority in the National Climate Change Strategy (approved by the Council of Ministers in November 2012) and GoM has also included their development and approval as a policy action in the programmatic Climate Change Development Policy Operation series – currently at second cycle stage. 40. The pilot on rural classified roads will include designs that improve resilience of roads and associated hydraulic structures to flooding as well as enhancing their potential benefits for dry season water retention (droughts and water shortages are a major climate risks to livelihoods in the Lower Limpopo area). Improved planning to minimize climate risks will benefit from planned digital surveys using LIDAR technology of the Lower Limpopo area – as part of an ongoing program being implemented by the Institute for Disaster Management (INGC) and the National Water Directorate (DNA). Lessons will be analyzed on the cost-effectiveness of wider application of this technology in the roads sector as well as improved use of hydro- meteorological data at field level. Environmental and Social Safeguards 41. All emergency related project activities will be implemented under OP 10, paragraph 11. Environmental and Social Management Plans for the sub-projects, based on the Environmental and Social Impact Assessment (ESIA) prepared for RBMMP2 in 2006, and updated in 2010 and 2013, are being prepared for all emergency related civil works. 7 7 For some of the larger works, an ESIA may also be prepared. 23 42. As described above, this emergency additional financing will cover three basic types of works that will encompass two approaches to safeguards mitigation: (a) For the smaller, urgent restoration civil works, implementation of the Environment and Social Clauses (ESC) contained in the ESMP will be included as a requirement in each civil works contract. Additionally, supervision and reporting on the implementation of the ESCs will be required of the Resident Engineer contracted to supervise the works. (b) For the more complicated medium term works and the proposed climate resilient roads infrastructure, civil works will be undertaken on the existing roads without involving new construction. The contractor(s), who will prepare detailed designs following the DBT methodology, will also prepare a site specific ESIA/ESMP (depending on the length and complexity involved), based on the initial generic ESMP prepared by ANE. As in the case of the urgent civil works, the Resident Engineer, contracted to supervise the civil works, will also supervise and report on the implementation of the ESC. 43. RBMMP-2 triggered OP/BP 4.11 (Physical Cultural Resources). The location of the emergency restoration civil works does not include works located in, or in the vicinity of, recognized cultural heritage sites. Nevertheless, a section on chance find procedures will be included, as part of the ESC in all new contracts, and is included in the project ESIA/ESMP. 44. Likewise, ANE and RF have been updating the revised 2010 Resettlement Policy Framework (RPF) of both the parent project and RBMMP2 in order to ensure project overall compliance with OP/BP 4.12 on Involuntary Resettlement. The Policy is triggered because there might be possibilities of encroachment on a few pieces of land during road construction/rehabilitation due to the movement of heavy machineries. Since the likelihood is very minimal to negligible, preparation of a Resettlement Action Plan (RAP) is not expected during the course of this project. The updated RPF will be disclosed both in-country and at the InfoShop during project implementation. RAPs may be prepared as and when necessary during project implementation, in conformity with the RPF; however, it is unlikely the project will involve land acquisition leading to involuntary resettlement and/or restrictions of access to resources and livelihoods. The overall social impacts of the project are foreseen to be very positive due to the accessibility and affordability of transport services resulting from the rehabilitation/reconstruction works funded by this AF2. 45. The original three sub-projects financed under RPMMP2 were delivered satisfactorily from an environmental and social safeguards point of view in accordance with the original ESIA/ ESMP. The Safeguards Audit of May 2012 reported that the RAP was implemented successfully, within the agreed timeframe, and in a consultative and participatory manner (i.e. gender and vulnerable groups’ consideration). 46. The emergency works being carried out under the second restructuring (November 2012) are still following an ESMP prepared at that time and the Resident Engineers’ (RE) contracts were revised to include monitoring of the ESMP as part of overall monitoring of the civil works. 24 The REs’ reporting to ANE includes sections on safeguards compliance as per the ESC included in their contracts; however, ANE supervision and safeguards reporting by Environment and Social specialists to IDA has been lagging. While the Resident Engineers appear to be reporting on the implementation of the ESMP for on-going emergency works, ANE has not conducted any environmental supervision missions to those sites. It was agreed that ANE’s environment team would ensure that each site is visited on quarterly basis (or at the very minimum, semi-annually) in order to properly confirm the REs’ reports, initiate any needed mitigation, and properly document mitigating actions being taken during construction. These recommendations will also be applied to the works proposed under AF2. 47. As part of the preparation for the current emergency restoration works, it was agreed that ANE would conduct quarterly safeguards supervision of all ongoing civil works under RBMMP2 and report accordingly on progress and compliance to IDA. The Bank Team will continue to supervise implementation of the project’s safeguards instruments. Financial Management 48. The project’s financial management (FM) arrangements remain adequate and currently rated Moderately Satisfactory; however, a comprehensive approach to improvements is being carried out to ensure that the entire RF FM arrangements are also adequate. The project FM arrangements will not change; it will continue to make use of the same two Designated Accounts (DA) in the Banco de Moçambique for receiving and payment financed by IDA’s Original and first Additional Financing. However, RF will need to open three new Designated Accounts: one to receive funds from the IDA CRW Grant and Credit (pooled account exclusively for IDA CRW Grant and Credit proceeds); a second Designated Account (segregated) for proceeds from the GFDRR/DfID TF, (when established); and a third Designated Account for proceeds from the PPCR Loan and Grant (pooled account exclusively for PPCR proceeds). To facilitate disbursements and documentation of expenditures, the RF will submit two revised Interim Financial Reports (IFR) on a quarterly basis; one exclusively for Disbursement Category 1 ( IFR 1) of the IDA Financing Agreement and the other (IFR 2) for all other parts of the project and corresponding disbursement categories, including parts of the project financed by IDA PPCR and GFDRR as applicable. As in the original project, the disbursements will be carried out quarterly based on submission of the IFRs. Entity audit reports will be submitted to IDA within six months of the end of the year and the audits will be carried out in accordance with International Standards on Auditing. Procurement 49. The project is implemented by ANE. The procurement is handled by the Unidade Gestora Executora das Aquisições (the central unit in charge of procurement functions) (UGEA) under supervision of the Director General. The Director General authorizes the procurement processes and signs all contracts irrespective of the amount. The project has a procurement manual. 50. ANE’s procurement capabilities require significant and demonstrable improvement in terms of technical quality, planning, time management and coordination, with shared 25 responsibilities among all participants in the procurement process. The overall project risk for procurement at the ANE is Substantial. 51. To mitigate the risk, a dedicated and qualified team was assigned to implement this operation in a timely and orderly manner for execution of the emergency works. A chart indicating the name of road sector institution, senior officials responsible for execution of the project activities was prepared and a detailed document, clearly indicating the roles and responsibilities of the various implementation entities and staff involved, is to be prepared by the time of project negotiations. It was also agreed that ANE will benefit from technical assistance through a Technical Support Group (TSG), which will assist the Road Sector during the execution of those emergency works. The TSG will be comprised of a Contract Management and Administrative Specialist, Highway Design Engineer, Structural Engineer and Procurement Specialist. The TSG will assist a dedicated Road Fund/ANE team assigned for the emergency works. 52. The procurement plan prepared contains great levels of flexibility to handle the emergency procurement under the Immediate Response Mechanism (IRM) to repair roads damaged after the January 2013 floods in Mozambique. Thus, all emergency works to be carried out are to be procured through shopping, and supervision through consultant qualification selection. The threshold for shopping has been increased to US$2.5 million, and for consultant qualification selection to US$0.5 million. The use of shopping and consultant qualification selection with increased values of the contracts is necessitated by the emergency response and the need to carry out the works before the rainy season. All contracts are expected to be signed before the end of November 2013. For all other contracts to be signed after November 2013, the emergency aspects of procurement thresholds would not apply and the works would have to be procured through National Competitive Bidding (NCB). Procurement of works and consulting services for executing immediate emergency works have been launched, and services for preparing concept designs and bidding documents for medium term works has also been initiated and terms of reference finalized. All contracts under IRM will be subject to prior review by the Bank. 53. There are no exceptions or waivers sought to Bank policies for the proposed AF2. 26 ANNEX 1: REVISED RESULTS FRAMEWORK AND MONITORING MOZAMBIQUE: Roads and Bridges Management and Maintenance Project Phase 2 - Additional Financing Project Development Objective (PDO): The PDO of the Project is to assist the Recipient in: (a) improving the coverage and conditions of its roads and bridges; (b) strengthening its institutional capacity to manage and administer the road sector; (c) establishing financing mechanisms for road maintenance; (d) promoting the use of local resources in roads construction and management; and (e) improving its road transport safety. Revised Project Development Objective: No change proposed. D=Dropped Baselines Cumulative Target Values Date Collection and Reporting Core C=Continue N= New Unit of Original Current Project Outcome Indicators R=Revised Measure *) (2013) 2013 2014 2015 2016 Frequency Methodology Responsibility PDO Level Results Indicators# R Road 1. The percentage of classified 66% 70% 71% 73 % 64% 72% Annual condition ANE roads in good and fair condition. (Revised) (Revised) (Revised) (Revised) reports 2. The percentage of the rural R Census and 33% 37 38.5% 43.2% population within 2 kilometers of % 11% 32.7% (Revised) (Revised) (Revised) (Revised) Annual road condition ANE an all-season road. data x R Estimate 3. Project Beneficiaries (Rural based on #2 Number 1.5 mill. 4.7 mill. 4.7 mill. 5.3 mill. 5.5 mill. 6.1 mill. Annual ANE only) 9 and rural population Of which female (beneficiaries) x R Number 0.8 mill. 2.4 mill. 2.4 mill. 2.7 mill. 2.8 mill. 3.1 mill. Annual Intermediate Outcome Indicators 9 Aligned with PPCR Core Indicator # 5 “Number of people supported by the PPCR to cope with the effects of climate change” 27 Project Development Objective (PDO): The PDO of the Project is to assist the Recipient in: (a) improving the coverage and conditions of its roads and bridges; (b) strengthening its institutional capacity to manage and administer the road sector; (c) establishing financing mechanisms for road maintenance; (d) promoting the use of local resources in roads construction and management; and (e) improving its road transport safety. Revised Project Development Objective: No change proposed. D=Dropped Baselines Cumulative Target Values Date Collection and Reporting Core C=Continue N= New Unit of Original Current Project Outcome Indicators R=Revised Measure *) (2013) 2013 2014 2015 2016 Frequency Methodology Responsibility A (i) Policy for the management of D Plan Policy & unclassified roads adopted and Plan None complet n/a n/a n/a implementation plan prepared ed D A (ii) New Roads Act approved Roads Adopted None n/a n/a n/a and implemented Act by GOM B (i) The share of planned paved C PRISE annual ANE and Road road routine maintenance program % 54% 92% 90% 100% 100% 100% Annually report Fund achieved annually B (ii) The share of planned C PRISE annual ANE and Road unpaved road routine maintenance % 66% 95% 90% 100% 100% 100% Annually report Fund program achieved annually C (i)Number of kilometers of the C Quarterly Complete Complete ANE and N1 rehabilitated and upgraded as km 160 km 102 86 102 d d Annually Progress consultants per revised plan Reports R C (ii) Cyclone and Floods Affected Progress ANE and Number 0 0 22 34 34 34 n/a road sections repaired Reports consultants R C (iii) Damaged Drifts/bridges Progress ANE and Number 0 11 3 0 6 11 n/a reconstructed Reports consultants C C (iv) Permanent weigh bridge Progress ANE and Number 0 1 0 0 0 1 n/a installed in Macia Reports consultants 28 Project Development Objective (PDO): The PDO of the Project is to assist the Recipient in: (a) improving the coverage and conditions of its roads and bridges; (b) strengthening its institutional capacity to manage and administer the road sector; (c) establishing financing mechanisms for road maintenance; (d) promoting the use of local resources in roads construction and management; and (e) improving its road transport safety. Revised Project Development Objective: No change proposed. D=Dropped Baselines Cumulative Target Values Date Collection and Reporting Core C=Continue N= New Unit of Original Current Project Outcome Indicators R=Revised Measure *) (2013) 2013 2014 2015 2016 Frequency Methodology Responsibility Number of kilometers of flood N Progress ANE and damaged roads rehabilitated in Kilometer 100 293 Annually Reports consultants Limpopo Establishment/Revision of N National Design Specification and Design Yes n/a N/A ANE/RF standards for paved and unpaved Standards road network 10 Reduction in weather induced N Progress ANE and disruptions on selected rural roads % 15% 30 Annually Reports consultants in Gaza province 11 * Original baseline established in 2006 * Indicate if the indicator is Dropped, Continued, New, Revised, or if there is a change in the end of project target value 10 Contributes to PPCR Core Indicator #1 “Degree of Integration of climate change in national, including sector, planning” 11 Contributes to PPCR Core Indicator #3 “Quality and extent to which climate responsive instruments/ investment models are developed and tested” 29 ANNEX 2: OPERATIONAL RISK ASSESSMENT FRAMEWORK (ORAF) MOZAMBIQUE: Roads and Bridges Management and Maintenance Project Phase 2 - Additional Financing . . Project Stakeholder Risks Stakeholder Risk Rating Moderate Risk Description: Risk Management: Along with the Client, the Bank team will review the selected damaged reaches and The majority project resources are being spent on proposed intervention. Annual and Bi-annual review meetings provide platform for emergency works in Gaza province. Affected communities information sharing and stakeholder consultation on regular basis. These meetings will may feel aggrieved by selection of road sections or by help regular information dissemination in a concise form. timing of interventions. Resp: Status: Stage: Recurrent: Due Date: Frequency: Overall funds required are much higher to mitigate the Client In Progress Implementation Bi-Annually flood damage. Donor coordination shall be the key to reinstate the infrastructure. Risk Management: Parallel financing through PRISE has worked well in recent times. PRISE indicators can be modified to include the indicators for reporting on restoration of the damages in Limpopo River Basin. DfID and PPCR have committed to provide financing to the project. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Both Continuous Implementing Agency (IA) Risks (including Fiduciary Risks) Capacity Rating High Risk Description: Risk Management: The size of planned investments is of the magnitude of Services of a qualified and experienced consultant shall be procured to provide technical current APL phase 2. Past experience of RBMMP-II has assistance to ANE and RF for implementing this project. Continuation of identified staff shown that ANE still needs to add greater technical and in key positions in ANE and RF shall be secured. Implementation structure shall be management capacity to timely and orderly supervise its streamlined to define clear responsibilities. Capacity will be added by inducting new major infrastructure program. Road Sector may have staff and or training existing as necessary. The introduction of a Technical Support 30 difficulties in hiring qualified technical and fiduciary staff Group (TSG) will effectively mitigate this risk by provide the key expertise in the trained in Bank procedures. RF and ANE Staff turnover important areas of contract management, procurement, and monitoring. also makes it difficult to build capacity in this regard. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Implementation 30-Jun-2014 Governance Rating Substantial Risk Description: Risk Management: Procurement risk in terms of technical quality, planning (i) Dedicated and qualified staff will be assigned to this operation, (ii) a chart indicating and time management. Human resources constraint the name of road sector institution, senior officials responsible for execution of the ‘supported’ by consultants substituting capacity weakness. project activities was prepared, (iii) a detailed document clearly indicating theroles and responsibilities of the various implementation entities and staff involved will be prepared before the Board presentation on December 19, 2013, (iv) ANE will benefit from technical assistance through a TSG comprised by a Contract Management and Administrative Specialist, Highway design Engineer, Structural Engineer and Procurement Specialist. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Both 30-Jun-2014 Risk Management: The project will develop a Governance and Accountability Action plan (GAAP). GAAP will define and disclose grievance address mechanism for communities to lodge their concerns with quality of works, road conditions and safeguard implementation. The project will also pilot use of a smart phone application "TARIFA" (being tested in Liberia) to report on the quality of physical works. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Preparation 28-Feb-2014 Project Risks Design Rating Moderate Risk Description: Risk Management: Inadequate local road standards/specifications and The project will build on relevant lessons of experience under RBMMP-II especially 31 inaccurate cost estimates. Paucity of quality in the region from the technical and contractual audit of the Xai-Xai to Chissibuca road. Use of poses significant challenge to road construction. Cement OPRC will also transfer the design and implementation risks to the private sector. stabilization has been used without recourse to Rigorous selection procedures to procure qualified and experienced international international best practices and as a result pavement consultants shall be followed. The project will be marketed aggressively to attract wider cracking is widely observed in field. The damages to such international contracting and consulting community to Mozambique market. roads in the Limpopo river basin were aggravated by Introduction of TSG will effectively mitigate this risk by provide the key expertise in the poorly performing stabilized bases. In addition, weak important areas of contract management, procurement, and monitoring. technical knowledge in the implementing agencies may Resp: Status: Stage: Recurrent: Due Date: Frequency: affect the ability to produce economically justified and reliable quality cost estimates. This risk could critically Client In Progress Preparation 31-Mar-2014 affect the sustainability of investments. Weak private sector capacity: Local contracting and consulting Industry is limited. This may result in unsuccessful bidding processes and/or higher than expected bid prices or poorly executed works. Social and Environmental Rating Moderate Risk Description: Risk Management: The proposed remedial civil works are on existing/affected The ESIA/ESMP and RPF for the original project will be updated and re-disclosed. The roads and within existing right-of-way. Thus, these works contractors will be held accountable for fulfilling requirement stated in the will have very limited to negligible negative environmental and social clauses included in their contracts, and by providing Personal environmental and social impacts Including on Gender Protective Equipment to workers, for construction and removing construction waste and and vulnerable groups. It is likely that no more than a rehabilitating borrow pits in a timely manner, and for maintaining construction worker compensation note or so would be needed for the rural camps in an environmentally and socially sustainable manner. Monthly progress reports road network rehabilitation. The risk is that frontline will be required on EMP (and other required safeguards instruments) implementation as safeguards responsibility rests with contractors who are well as on gender and vulnerable groups consideration (i.e. number of jobs and capacity implementing site specific EMPs and comply with the created, both directly and indirectly for local communities, etc.). social and environmental clauses included in their Resp: Status: Stage: Recurrent: Due Date: Frequency: contracts. Depending on corporate policies pursued by the contractor; the overall implementation can be mixed Client In Progress Both Monthly unless tightly supervised. Program and Donor Rating High Risk Description: Risk Management: The DfID funding, which is routed through GFDRR, has been ring fenced to specific 32 The funding for immediate emergency works is supported project activities. by DfID. A formal clearance by DfID headquarters for Resp: Status: Stage: Recurrent: Due Date: Frequency: funding is expected by the end of October 2013. Both In Progress Preparation 30-Jun-2014 The project has a financing gap of US$73.6 million for the medium-term rehabilitation works. If the gap isnot Risk Management: covered fully in a timely manner, there is a risk that Mozambique has currently utilized its entire IDA16 country allocation. The immediate project outcomes will not be fully achieved. emergency works are fully funded. The government will endeavor to secure additional funds to meet the financing gap for the medium-term rehabilitation works – from other donors or from IDA (either through IDA 16 reallocation if possible, or IDA 17 country allocation). As needed, the project will be realigned/restructured to enable project activities to be implemented in a timely and orderly manner. The financing gap is expected to be filled in time for the commencement of implementation of the medium- term rehabilitation works scheduled for mid-2014. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Implementation 30-Jun-2014 Delivery Monitoring and Sustainability Rating High Risk Description: Risk Management: Sustainability: Mozambique is of one of the most For implementation, the emergency works will be categorized into two major groups.: impacted nations of a changing climate. The threat is (i) The first category involves the relatively smaller urgent works; (ii) The second evident in spite of recent extreme weather activities. The category involves more complicated and intensive works related to substantive medium vulnerability of road infrastructure to cyclonic activity is and long term technical solutions, which will also prevent future floods and minimize linked to overall susceptibility river training works (dykes, their adverse influence on the area. Focused supervision of Climate Resilience dams etc.). The urgent need to quickly restore the component shall be implemented. damaged infrastructure to pre-flood state may dilute the Resp: Status: Stage: Recurrent: Due Date: Frequency: diligence required to find coordinated long term climate resilient solutions. Client In Progress Both Continuous Other (Optional) Rating Low Risk Description: Risk Management: The immediate emergency works will not be signed in This risk did not materialize. All contracts have been signed. timely manner before the end of November 30, 2013. Resp: Status: Stage: Recurrent: Due Date: Frequency: 33 Client Completed Preparation Other (Optional) Rating Risk Description: Risk Management: Resp: Status: Stage: Recurrent: Due Date: Frequency: Overall Risk Overall Implementation Risk: Rating Moderate Risk Description: Due to various challenges including capacity of implementing agency and coordination with another project funding components to be designed and implemented under this project, the preparation risk rating is rated “Moderate”. 34 ANNEX 3A: DETAILED DESCRIPTION OF ACTIVITIES MOZAMBIQUE: Roads and Bridges Management and Maintenance Project Phase 2 - Additional Financing 1. The second Additional Financing (AF2) activities are divided into four different components, all of them to be incorporated into component 1 of the Project. The first component includes emergency works in the Limpopo River Basin of approximately US$153 million; the Bank will contribute with US$29.4 million. The second component (detailed description is presented in the Annex 3B) will address the development of climate resilient road infrastructure with a total cost of approximately US$15.75 million. The third component supports the incremental operating costs and training of Road Fund (RF) and Administração Nacional de Estradas (National Road Administration) (ANE) staff with a total cost of US$5 million. A fourth component supports the establishment of an Immediate Response Contingency Fund to provide immediate response in the events of natural disaster. 2. The support to the incremental operating costs and training of Road Fund and ANE staff will include the preparation of the Integrated Strategy of Human Resources Development in the Road Sector as well as create a capacity building program which includes training. 3. The emergency works, under the first component, are divided into two categories of works: (a) immediate emergency works that need to be implemented immediately, and (b) medium-term rehabilitation works, which will be implemented using Design-Build-Transfer (DBT) methodology. The immediate emergency works will be financed by the DfID funds through GFDRR in an amount of US$15 million. The medium-term rehabilitation works will be financed by the Bank in an amount of US$29.4 million and GoM in an amount of US$40 million. The currently estimated demand (as indicated in Table 3) is about US$155.5 million (excluding overall contingencies of US$10 million). Therefore, the selection of road infrastructure to be rehabilitated will follow the multi-criteria analysis for prioritizing the medium-term emergency works presented in Annex 6. Table 1 presents the summary cost for the emergency works. There is a financing gap of US$73.6 million for the medium-term works. The nature of the works as explained in the following paragraphs, and implementation timelines (Table 4) is such that the financing gap is unlikely to impact the project activities until middle of 2014, when the contracts for civil works will be procured. It is anticipated that the financing gap will be covered by that time either by additional funds from other donors or from IDA (IDA 16 reallocation if possible, or IDA 17 country allocation). Table 1: Cost Summary of Emergency works Civil Contingencies Estimated Total Works Number for Works Consultancy Estimated Type of Contracts Estimated of Lots Values Values Values Values 3 (103*USD) (103*USD) (103*USD) (10 *USD) Price Based "Bill of 8 11,350.00 2,270.00 1,135.00 14,755.00 Quantities" Price Based "Design and 6 105,000.00 21,000.00 11,960.00 137,960.00 Build" 35 Total 14 116,350.00 23,270.00 13,095.00 152,715.00 4. The immediate and DBT type of works were grouped in lots based on the nature and geographical location. This type of arrangement is to avoid having different Contractors working in the same area and sometimes very close to each other. Also it will simplify the management of the works as well as the supervision. Detailed Immediate Emergency Works 5. The Immediate Emergency Works were grouped in eight lots. Table 2 presents the lots and roads grouped in each lot. Table 2: Immediate Emergency Works Civil Contingen Estimated Total LOT Works cies (20%) Consultanc Estimated Num Description Details Estimated for Works y Values Values ber Values Values (103*USD) (103*USD) (103*USD) (103*USD) Major re- N/C- Xai- gravelling, ripping, Lot Xai/Chilaulene re-compaction and 1 12 (18 km) drainage improvement. 600.00 120.00 60.00 780.00 Sub-Total 600.00 120.00 60.00 780.00 Major re- R441- gravelling, ripping, Chinhacanine/ re-compaction and Nalazi (64 km) drainage improvement. 600.00 120.00 60.00 780.00 Lot 2 Major re- N/C- gravelling, ripping, Ndindiza/Nhan re-compaction and ale (50 km) drainage improvement. 1,200.00 240.00 120.00 1560.00 Sub-Total 1,800.00 360.00 180.00 2,340.00 Major re- N/C- gravelling, ripping, Ndonga/Ndindi re-compaction and Lot 3 za (54 km) reconstruction of box culverts. 1,500.00 300.00 150.00 1,950.00 Sub-Total 1,500.00 300.00 150.00 1,950.00 Major re- N/C- gravelling, ripping, Lot 4 Mahambe/Maq re-compaction and ueze (52 km) reconstruction of 1,750.00 350.00 175.00 2,275.00 12 For each lot, the works and consultancy services shall be procured separately. 36 Civil Contingen Estimated Total LOT Works cies (20%) Consultanc Estimated Num Description Details Estimated for Works y Values Values ber Values Values (103*USD) (103*USD) (103*USD) (103*USD) box culverts. Sub-Total 1,750.00 350.00 175.00 2,275.00 Localized repairs N/C- and reconstruction. Zinhane/Maxai Lot 5 Drainage and la (57 km) protection works. 1,600.00 320.00 160.00 2,080.00 Sub-Total 1,600.00 320.00 160.00 2,080.00 Localized repairs N222- and reconstruction. Mapai/Maxaila Lot 6 Drainage and (62 km) protection works. 1,200.00 240.00 120.00 1,560.00 Sub-Total 1,200.00 240.00 120.00 1,560.00 Localized repairs R441- and reconstruction. Maxaila/Massa Drainage and ngena (47 km) protection works. 1,000.00 200.00 100.00 1,300.00 Lot 7 Localized repairs R456- and reconstruction. Massangena/M Drainage and avue (56 km) protection works 400.00 80.00 40.00 520.00 Sub-Total 1,400.00 280.00 140.00 1,820.00 Localized repairs R443- and reconstruction. Manjacaze/Ma Reconstruction of cuacua (54 km) embankments and protection works. 750.00 150.00 75.00 975.00 Major re- R450- gravelling, ripping, Malehice/Manj re-compaction and Lot 8 acaze (28 km) drainage improvement 500.00 100.00 50.00 650.00 Localized repairs R450- and reconstruction. Manjacaze/Chi Reconstruction of denguele (39 culverts and km) protection works 250.00 50.00 25.00 325.00 Sub-Total 1,500.00 300.00 150.00 1,950.00 Total 11,350.00 2,270.00 1,135.00 14,755.00 Medium-term Rehabilitation Works - DBT methodology 37 6. The DBT methodology includes all Medium-term Rehabilitation Works which require conceptual design for its implementation. Detailed engineering designs will be provided by a contractor during implementation and verified by Monitoring Supervision consultant acting on behalf of the Employer. The selected roads are presented in the Table 3 that are currently grouped in six lots. These works will use OPRC type of contracts. Table 3: Medium-term Rehabilitation Works - DBT Methodology Civil Contingen Estimated Total LOT Works cies (20%) Consultan Estimated Num Description Details Estimated for Works cy Values Values ber Values Values (103*USD) (103*USD) (103*USD) (103*USD) Construction of wing walls, reconstruction of N1 – abutments, protection Chicumbane/Xa works and construction 10,000.00 2,000.00 1,000.00 13,000.00 Lot 1 i-Xai (24 km) of new bridge to enhance the water crossing. Sub-Total 10,000.00 2,000.00 1,000.00 13,000.00 Resurfacing or treatment N/C-3 de of existing roadway, Fevereiro/CrzN 2,100.00 420.00 210.00 2,730.00 surface patching and 220 (18 km) restoration of culvert. Major re-gravelling, R452- ripping, re-compaction Mapapa/Chilem 2,000.00 400.00 200.00 2,600.00 and drainage Lot 2 bene (18 km) improvement. Major re-gravelling, R859- ripping, re-compaction, Chilembene/Ma localized repairs, edge 2,500.00 500.00 250.00 3,250.00 niquenique (32 breaks repairs and km) drainage improvement. Sub-Total 6,600.00 1,320.00 660.00 8,580.00 Major re-gravelling, R856- ripping, re-compaction Chókwè/Tlhaw 5,000.00 1,000.00 500.00 6,500.00 and drainage ene (31 km) improvement. Reconstruction of R890- drainage structures and Chókwè/Guijá fills of the embankment. 3,500.00 700.00 350.00 4,550.00 Lot 3 (4.5 km) Full re-gravelling and compaction. Resurfacing or treatment R448- of existing roadway, Chókwè/Macarr 2,500.00 500.00 250.00 3,250.00 surface patching and etane (25 km) localized repairs. Sub-Total 11,000.00 2,200.00 1,100.00 14,300.00 38 Civil Contingen Estimated Total LOT Works cies (20%) Consultan Estimated Num Description Details Estimated for Works cy Values Values ber Values Values (103*USD) (103*USD) (103*USD) (103*USD) Major re-gravelling, fill of erosions, resurfacing or treatment of existing roadway, surface patching, shape N220- correction, restoration of Chissano/Chibu 25,000.00 5,000.00 2,500.00 32,500.00 Lot 4 skid resistance, to (41 km) installation of new culverts and box culvert. Fill of abutments, reconstruction of bridges. Sub-Total 25,000.00 5,000.00 2,500.00 32,500.00 R442- Major re-gravelling, Chibuto/Alto ripping, re-compaction 7,000.00 1,400.00 700.00 9,100.00 Lot 5 Changane (52 and reconstruction of the km) bridge. Sub-Total 7,000.00 1,400.00 700.00 9,100.00 Major re-gravelling, fill of erosions, resurfacing or treatment of existing N221-Chibuto roadway, reconstruction 60,000.00 12,000.00 6,000.00 78,000.00 Lot 6 /Guijá (60 km) of abutments and reconstruction of the bridge. Sub-Total 60,000.00 12,000.00 6,000.00 78,000.00 Total 119,600.00 23,920.00 11,960.00 155,480.00 7. The immediate works, which are based on input type contracts, will involve day to day supervision through consultants. For the medium term rehabilitation works, which use OPRC contract format, monitoring, instead of day to day supervision, will be undertaken through monitoring consultant/s who will prepare the conceptual designs and bidding documentation for implementation. 8. The timeline for implementation of two categories of works is presented in Table 4. Table 4: Implementation Timeline Type of Works Expected Start Date Expected Completion Date Immediate Emergency Works October 2013 September 2014 Medium Term Rehabilitation July/August 2014 December 2016 Works 39 40 41 42 43 ANNEX 3B: CLIMATE INVESTMENT FUND FINANCED COMPONENT MOZAMBIQUE: Roads and Bridges Management and Maintenance Project Phase 2 - Additional Financing 1. Severe and extreme weather events are frequent in Mozambique and future climate change projections suggest increasing levels of variability and, in the case of rainfall, a gradual increase in the severity of intense rainfall events. Floods in 2002, intense widespread cyclonic activity in 2012, and now Limpopo river basin floods are likely to be more frequent in future. Such extreme weather events have a direct impact on the population and also cause extensive damage to physical infrastructure. Road infrastructure is particularly vulnerable to climate change especially to increased heavy intensity rainfalls and inland flooding, recent economic analysis of climate adaptation options identified investments in climate proofing roads as offering one of the highest priority options available to Mozambique in terms of economic impacts 13. Expanded flood zones reveal a significant increase in risk for sizable part of the road network. In order to avoid repetitive losses to road infrastructure, there is a clear need for defined strategy to build and manage roads better in an integrated manner with other physical infrastructure especially dykes and dams on various rivers. 2. Managing the increased risk and direct consequences of ongoing climate change requires increased resiliency at all levels - social, economic, physical infrastructure, the government institutions and community capacities. Government’s policy priorities on climate change are set- out in the National Climate Change Adaptation and Mitigation Strategy14 – approved by the Council of Ministers in November 2012. In support of climate change adaptation and in order to contribute to the Government’s strategy of inclusive growth and rural development, World Bank funding is delivered within the framework of the Strategic Program on Climate Resilience (SPCR, approved in June 2011) through a range of policy lending, investment and technical assistance instruments. • Policy lending: Reforms in seven sectors – including roads infrastructure, are supported by a programmatic Development Policy Operation (DPO) series on climate change - comprising three cycles, the first of which (DPO 1) was approved by the World Bank board of directors on January 24, 2013. Possible reforms are under discussion for DPO 2, which is scheduled for the Board presentation in Q1 of FY15. These include a proposed reform that would involve the Ministry of Public Works and Housing (MoPWH) adopting revised/new design standards and maintenance approaches that strengthen the climate resilience of roads. • Investment support: World Bank support also includes project level support that would build climate resilience into the unpaved roads network at piloting level. This support is funded by the Pilot Program on Climate Resilience (PPCR) and is being integrated into the RBMMP APL2 as part of this Additional Financing. • Technical assistance: Grant support from the PPCR is also being used to support surveys of the vulnerability of unpaved roads at provincial level that will determine 13 World Bank (2010). The Economics of Adaptation to Climate Change: Mozambique. World Bank, Washington DC. 14 República de Moçambique. National Climate Change Adaptation and Mitigation Strategy 2013-2025. Approved during the 39th Session of the Council of Ministers, Maputo, November 13, 2012. 44 cost-estimates and investment needs for climate-resilient district roads networks (approval of which is currently included as a DPO 3 reform for FY16). These surveys are currently being undertaken in Gaza province as part of efforts 15 to build resilience into post-flood reconstruction efforts. Similar work is also underway in Niassa province with the support of the Nordic Development Fund through the African Development Bank. 3. Climate Investment Fund through the Pilot Program for Climate Resilience (PPCR) will support the second Additional Financing (AF2) activities seeking to ensure that: (a) Flood impacted road reconstruction activities in the Gaza province are informed by climate change risks, and (b) that experience gained from these efforts is integrated into the development of improved national design standards and maintenance approaches – the roll-out of which could then be assessed objectively as part of sector monitoring. If successful, this could have a transformative impact on the roads sector as a whole. 4. PPCR proposed AF2 activities will include: (a) Development of climate resilient design standards: Review of existing design standards and construction and maintenance approaches to ensure these better address climatic risks – from planning through design, construction and maintenance. This will be followed by the development of improved standards and maintenance approaches for the paved and unpaved classified road network. This activity will build on an ongoing survey and inventory of climate risks to the unclassified roads network in Gaza province – currently being funded by PPCR Phase 1 funds. The review of design standards will also take on board the lessons emerging from a forthcoming provincial level pilot in Niassa and Nampula provinces 16. The development of climate resilient roads standards is considered a national priority which could have a transformative impact on building climate resilience into the roads sector. It was identified as a priority in the National Climate Change Strategy and GoM has also included their development and approval as a policy action in the programmatic Climate Change Development Policy Operation series – currently at second cycle stage. (b) Piloting of climate resilient road designs: This activity shall support piloting of improved designs for rural unclassified roads and associated hydraulic structures as well as improved methodologies for their maintenance and monitoring - providing for more responsive repairs by local contractors and local communities. Piloting will include designs that improve resilience of roads and associated hydraulic structures to flooding, as well as enhancing their potential benefits for dry season water retention (droughts and water shortages are a major climate risks to livelihoods in the lower Limpopo). The development and piloting of improved 15 At the last DPO dialogue meeting in September 2013 between the road sector and the Bank team, it was decided to drop this activity due to insufficient time left until the closure of the Phase 1 PPCR grant. Other options of including this activity under different programs are being discussed. 16 This work is supported by the Nordic Development Fund through the African Development Bank. 45 maintenance approaches will include capacity-building programs for local contractors and service providers. 5. PPCR-supported activities to build climate resilience in the lower Limpopo Valley will be complemented by the deployment of Laser Interferometry Detection and Radar (LIDAR) surveys and geospatial Decision Support Systems to improve flood modeling and predicting increased flood zones. This technology should greatly assist in planning and prioritizing reconstruction works and in the longer-term should help improve selection of road alignments and related design features. The first two phases of LIDAR analysis have already been undertaken, as part of an ongoing program being implemented by the Institute for Disaster Management (INGC) and the National Water Directorate (DNA) and a further phase of analysis will be supported by RBMMP (APL 2) and by activities supported by the United Kingdom Department for International Development (DfID). APL 2 funding shall be limited to survey of all remaining roads not covered by first two phase of LIDAR survey. Lessons will be distilled on the cost-effectiveness of wider application of this technology in the roads sector as well as improved use of hydro-meteorological data at field level. 6. Preparation of National Design and Construction Standards for unpaved and paved classified road network (US$4.0 million). Mozambique Government spends in excess of US$300 million per annum on improving and maintaining its road infrastructure. As with all Civil Engineering projects, the road investment program should follow exacting standards adapted to local conditions to ensure that network is capable of carrying the traffic loads and have anticipated life-spans that justify the massive public expenditure in this sector. Mozambique has a significant limitation in terms of availability of quality stone aggregates necessary for road construction in large part of the country. Simple adoption of prevalent standards like Southern African Development Community (SADC) or COLTAS has proved to be risky and probably not optimal. The road network must be designed and built in such a way that it ensure comfort, safety and all weather year round connectivity and also built in a manner that makes the most effective use of available natural resources including materials, construction plans and labor. Development of National Design and Construction Standards that also help to improve the climate resilience of the roads network in the light of climate change will help benchmark the best practice suitable for different regions of the country. 7. Piloting of improved road designs of unclassified road and development of improved local arrangements for their maintenance (US$11.75 million): This activity is timely and should lower levels of risk to climatic events in the medium to long term. Initial plan was to include this particular component under next phase of APL i.e. Phase 3. However, in view of changed circumstance following Limpopo floods and likely delay of APL3 program, this component is now proposed under APL2. Separately, mapping of unclassified road network in Gaza province for defining provincial level vulnerability assessments is going on with grant support from the PPCR. This mapping will also prepare inventories of climate risks highlighting the hydraulic vulnerabilities of the unclassified network. The project will finance engineering studies for developing this component. The studies will: (a) identify sections of road and associated structures most vulnerable to rupture following adverse weather activity; (b) design and implement as a pilot project based on appropriate and cost-effective engineering and maintenance approaches; and (c) develop a rapid response mechanism to road ruptures and 46 bridge washouts to restore use of affected roads as quickly as possible – where possible through the development of local contractor capacity for maintenance responses. The outcomes of the pilot will be compared with results from a control set of similar roads where traditional approaches and interventions are used. New approaches, once validated, will be subsequently scaled through RF’s initiatives to develop and implement provincial/district roads strategies and increase local employment in roads works through the Government of Mozambique and other Development Partner financing. Sub-project pilots, to be funded from the Pilot Program for Climate Resilience (PPCR), will target the rural road network in the Gaza province. 8. The estimated disbursements by fiscal year with cumulative totals are broken down as follows: Table 1: Estimated Disbursement Schedule of PPCR Funds FY14 FY15 FY16 FY17 Annual 1.0 million 3.0 million 10.0 million 1.75 million Cumulative 1.0 million 4.0 million 14.0 million 15.75 million 47 ANNEX 4: ESTIMATE OF THE REVISED PROJECT COSTS MOZAMBIQUE: Roads and Bridges Management and Maintenance Project Phase 2 - Additional Financing Updated Costs by Component (in US Dollars) N Component Original cost Changes with Changes with AF2 Revised cost o. (Credit 4308) AF1 in SDR (SDR) 100% disbursed (Credit 4892) (approximate) 1 Goods, Works (except as 34,569,200** 3,950,000 45,000,000 83,519,200 covered by Category 2 below), services (other than consultants’ services), consultants’ services (except as covered by Category 3 below), Training and Operating Costs for Part A and Part B of the Project 2 Works for Part C (a) of the 51,900,000 31,500,000 0 83,400,000 Project 3 Consultants’ services for Part C 3,100,000 5,550,000 0 8,650,000 (b) of the Project 4 Unallocated/Contingency 10,000,000 0 10,000,000 20,000,000 5 Works and Consultants’ services 15,000,000 15,000,000 under Parts D (a) of the Project. 6 Works and Consultants’ services 24,400,000 24,400,000 under Parts D (b) of the Project. 7 Goods, Works, and Consultants’ 15,750,000 15,750,000 Services for Part E of the Project 8 Goods, Works, Consultants’ 0 services, Training and Operating Costs under Part F of the Project 99,569,200 41,000,000 110,150,000 250,719,200 TOTAL *Note: the value of Category 1 in the original credit reflects the cancelation of SDR 277,106 (US$430,800 equivalent) 48 ANNEX 5: DETAILED PROCUREMENT ARRANGEMENTS MOZAMBIQUE: Roads and Bridges Management and Maintenance Project Phase 2 - Additional Financing 1. The project is implemented by National Directorate of Roads (ANE). The procurement is handled by the central unit in charge of procurement functions (UGEA) under supervision of the Director General. The Director General authorizes the procurement processes and signs all contracts irrespective of the amount. The project has a procurement manual. 2. The ANE’s procurement capabilities require significant and demonstrable improvement in terms of technical quality, planning, time management and coordination with shared responsibilities among all participants in the procurement process. The measures that should be considered shall include: (a) immediate recruitment of procurement technical assistance to provide emergency portfolio hands-on support, training and hand-holding support to the ANE’s and decentralized UGEAs (procurement units) satisfactory to IDA; (b) revision of the ANE procurement manual, e.g. including OPRC procurement, in a form satisfactory to IDA, prior to the Board presentation; (c) preparation of the procurement training plan aimed at strengthening technical quality, planning, time management and coordination among all participants in procurement, enhancing technical quality and reducing implementation delays, to be implemented prior to the Board presentation. The overall project risk for procurement at the ANE is Substantial. 3. Procurement for the proposed Project will be carried out in accordance with the World Bank’s “Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011, and “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011; and the provisions stipulated in the Legal Agreement. “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 shall apply to this Project. Particular Methods of Procurement of Goods, Works and Non-consulting Services 1. International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods, works and non-consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding. 2. Other Methods of Procurement of Goods, Works and Non-consulting Services. The following methods, other than International Competitive Bidding, may be used for procurement of goods, works and non-consulting services for those contracts specified in the Procurement Plan: Procurement Method (a) National Competitive Bidding, subject to the provisions of paragraph 3 (b) below (b) Shopping 49 (c) Direct Contracting 3. Additional Procedures for National Competitive Bidding (NCB): (a) General The procedures to be followed for NCB shall be those set forth in the “Regulamento de Contratação de Empreitada de Obras Públicas, Fornecimento de Bens e Prestação de Serviços ao Estado” of the Republic of Mozambique of May 24, 2010 (“the Regulation”), as per Decree No. 15/2010, with the modifications described in the following paragraphs. (b) Eligibility No restriction based on nationality of bidders and/or origin of goods shall apply. Foreign bidders shall be allowed to participate in NCB without restriction and shall not be subject to any unjustified requirement which will affect their ability to participate in the bidding process such as, but not limited to, the proof that they are not under bankruptcy proceedings in the Recipient’s territory; have a local representative; have an attorney resident and domiciled in the Recipient’s territory; form a joint venture with a local firm In cases of joint ventures, they shall confirm joint and several liability. Prior registration, obtaining a license or agreement shall not be a requirement for any bidder to participate in the bidding process. Recipient’s government-owned enterprises or institutions shall be eligible to participate in the bidding process only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not dependent agencies of the Recipient. (c) Bidding Documents Standard bidding documents acceptable to the Association shall be used for any procurement process under NCB. (d) Preferences No domestic preference shall be given for domestic bidders and/or for domestically manufactured goods. (e) Applicable Procurement Method under the Regulation Subject to these NCB exceptions, procurement under NCB shall be carried out in accordance with the Regulation’s public competition (Concurso Público) method. (f) Bid Preparation Time Bidders shall be given at least twenty-eight (28) days from the date of the invitation to bid or the date of availability of bidding documents, whichever is later, to prepare and submit bids. 50 (g) Bid Opening Bids shall be opened in public, immediately after the deadline for their submission in accordance with the procedures stated in the bidding documents. (h) Bid Evaluation (i) Qualification criteria shall be clearly specified in the bidding documents, and all criteria so specified, and only such criteria so specified shall be used to determine whether a bidder is qualified; the evaluation of the bidder’s qualifications should be conducted separately from the technical and commercial evaluation of the bid. Qualification criteria shall be applied on a pass or fail basis. (ii) Evaluation of bids shall be made in strict adherence to the criteria declared in the bidding documents; criteria other than price shall be quantified in monetary terms. (iii) A contract shall be awarded to the qualified bidder offering the lowest- evaluated and substantially responsive bid. (iv) Bidders shall not be eliminated on the basis of minor, non-substantial deviations. (i) Rejection of All Bids and Re-bidding All bids shall not be rejected and new bids solicited without the Association’s prior concurrence. (j) Complaints by Bidders and Handling of Complaints The Recipient shall establish an effective and independent complaint mechanism allowing bidders to complain and to have their complaint handled in a timely manner. (k) Right to Inspect/Audit In accordance with paragraph 1.16(e) of the Procurement Guidelines, each bidding document and contract financed from the proceeds of the Financing shall provide that: (i) the bidders, suppliers, and contractors and their subcontractors, agents, personnel, consultants, service providers or suppliers, shall permit the Association, at its request, to inspect their accounts, records and other documents relating to the submission of bids and contract performance, and to have them audited by auditors appointed by the Association; and (ii) the deliberate and material violation by the bidder, supplier, contractor or subcontractor of such provision may amount to obstructive practice as defined in paragraph 1.16(a)(v) of the Procurement Guidelines. (l) Fraud and Corruption Each bidding document and contract financed from the proceeds of the Financing shall include provisions on matters pertaining to fraud and corruption as defined in paragraph 1.16(a) of the Procurement Guidelines. The Association may 51 sanction a firm or individual, at any time, in accordance with prevailing Association sanctions procedures, including by publicly declaring such firm or individual ineligible, either indefinitely or for a stated period of time: (i) to be awarded an Association-financed contract; and (ii) to be a nominated sub- contractor, consultant, supplier or service provider of an otherwise eligible firm being awarded an Association-financed contract. (m) Debarment under National System The Association may recognize, if requested by the Recipient, exclusion from participation as a result of debarment under the national system, provided that the debarment is for offenses involving fraud, corruption or similar misconduct, and further provided that the Association confirms that the particular debarment procedure afforded due process and the debarment decision is final. C. Particular Methods of Procurement of Consultants’ Services 1. Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2 below, consultants’ services shall be procured under contracts awarded on the basis of Quality and Cost-based Selection. 2. Other Methods of Procurement of Consultants’ Services. The following methods, other than Quality and Cost-based Selection, may be used for procurement of consultants’ services for those contracts which are specified in the Procurement Plan. Procurement Method (a) Quality-Based Selection (b) Least Cost Selection (c) Selection Based on Consultants’ Qualifications (d) Single Source Selection (e) Selection of Individual Consultants (f) Single-source procedures for the Selection of Individual Consultants D. Review by the Association of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Association’s Prior Review. All other contracts shall be subject to Post Review by the Association. Prior Review Threshold: Procurement Decisions subject to Prior Review by the Bank as stated in Appendix 1 to the Guidelines for Procurement, and Selection decisions subject to Prior 52 Review by Bank as stated in Appendix 1 to the Guidelines Selection and Employment of Consultants: Immediate Response Mechanism (IRM) Contract value Contracts subject to prior Procurement Method threshold review