document of the world bank for official use only · 2011-03-29 · document of. the world bank ....
TRANSCRIPT
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 60005-KE
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED CREDIT IN THE AMOUNT OF
SDR 190.80 MILLION
(US$300 MILLION EQUIVALENT)
TO THE
REPUBLIC OF KENYA
FOR THE
TRANSPORT SECTOR SUPPORT PROJECT
March 29, 2011
Transport Sector Country Department AFCE2 Africa Region
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
CURRENCY EQUIVALENTS
(Exchange Rate Effective March 2011)
Currency Unit = Kenya Shilling (KES) KES 80.95 = US$1.0
US$ 1.0 = SDR 0.6357
FISCAL YEAR
July 1 – June 30
ABBREVIATIONS AND ACRONYMS
AFD Agence Française de Developpement (French Development Agency) AGI Actionable Governance Indicator CASOA Civil Aviation Safety Oversight Agency CEO Chief Executive Officer CM Centimeter COMESA Common Market for Eastern and Southern Africa CSO Civil Society Organization CPS Country Partnership Strategy CRC Constituency Roads Committee DIR Detailed Implementation Review EA Environmental Assessment EAC East African Community EATTFP East Africa Trade and Transport Facilitation Project EIA Environmental Impact Assessment EIB European Investment Bank EMP Environmental Management Plan ERB Engineers’ Registration Board ERD External Resources Department ERR Economic Rate of Return EU European Union FAA Federal Aviation Administration FM Financial Management GAP Governance Action Plan GDP Gross Domestic Product GoK Government of Kenya GPN General Procurement Notice HDM-4 Highway Design Management Model Version Four HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome IA Implementing Agency IASA International Aviation Safety Assessment IBRD International Bank of Reconstruction and Development ICAO International Civil Aviation Organization ICB International Competitive Bidding
ICT Information and Communications Technology IDA International Development Association IFMIS Integrated Financial Management and Information System IMO International Maritime Organization INT Department of Institutional Integrity IRI International Roughness Index JICA Japan International Cooperation Agency JKIA Jomo Kenyatta International Airport KAA Kenya Airports Authority KCAA Kenya Civil Aviation Authority KENAO Kenya National Audit Office KeNHA Kenya National Highways Authority KeRRA Kenya Rural Roads Authority KfW Kreditanstalt Fur Wiederaufbau KIHBT Kenya Institute of Highways and Buildings Technology KM Kilometer KMA Kenya Maritime Authority KR Kenya Railways KRA Kenya Revenue Authority KRB Kenya Roads Board KTSSP Kenya Transport Sector Support Project KURA Kenya Urban Roads Authority LIB Limited International Bidding LVSR Low Volume Sealed Road M&E Monitoring and Evaluation MIA Moi International Airport MoF Ministry of Finance MoR Ministry of Roads MoT Ministry of Transport NCA National Construction Authority NCB National Competitive Bidding NCTIP Northern Corridor Transport Improvement Project NMT Non Motorized Transport NPV Net Present Value ORAF Operational Risk Assessment Framework PAD Project Appraisal Document PAP Project Affected Persons PC Project Coordinator PDO Project Development Objective PIT Project Implementation Team POC Project Oversight Committee PPDA Public Procurement and Disposal Act PPIAF Public Private Infrastructure Advisory Facility PPOA Public Procurement Oversight Authority PPP Public-Private Partnership PS Permanent Secretary
QCBS Quality and Cost Based Selection RACECA Roads and Civil Engineering Contractors Association RAP Resettlement Action Plan RFP Request for Proposal RMLF Road Maintenance Levy Fund RPF Resettlement Policy Framework RSIP Road Sector Investment Program RVR Rift Valley Railways SIL Specific Investment Loan SPN Specific Procurement Notice TA Technical Assistance TEU Twenty-Foot Equivalent Units ToR Terms of Reference TSA Transport Security Administration UoN University of Nairobi US United States US$ United States Dollar VAT Value Added Tax VPD Vehicle Per Day
Regional Vice President: Obiageli Katryn Ezekwesili Country Director: Johannes Zutt
Sector Director: Sector Manager:
Jamal Saghir Supee Teravaninthorn
Task Team Leader: Josphat O. Sasia
KENYA TRANSPORT SECTOR SUPPORT PROJECT
CONTENTS
I. STRATEGIC CONTEXT ............................................................................................. 1
A. Country Context ............................................................................................................... 1
B. Sectoral and Institutional Context .................................................................................... 1
C. Rationale for Bank Involvement .................................................................................... 10
D. Higher-Level Objectives to which the Project Contributes ........................................... 11
II. PROJECT DEVELOPMENT OBJECTIVES............................................................. 11
A. Project Development Objectives (PDO) ........................................................................ 11
1. Project Beneficiaries ...................................................................................................... 12
2. PDO Level Results Indicators ........................................................................................ 12
III. PROJECT DESCRIPTION ......................................................................................... 12
A. Project Components ....................................................................................................... 13
B. Project Financing ............................................................................................................ 15
1. Lending Instrument ........................................................................................................ 16
2. Project Financing Table ................................................................................................. 16
C. Lessons Learned and Reflected in the Project Design ................................................... 16
IV. IMPLEMENTATION ................................................................................................. 17
A. Institutional and Implementation Arrangements ............................................................ 17
B. Results Monitoring and Evaluation ................................................................................ 18
C. Sustainability .................................................................................................................. 19
V. KEY RISKS ................................................................................................................ 19
VI. APPRAISAL SUMMARY ......................................................................................... 20
A. Economic and Financial Analysis .................................................................................. 20
B. Technical ........................................................................................................................ 21
C. Financial Management ................................................................................................... 21
D. Procurement ................................................................................................................... 23
E. Social (including safeguards) ......................................................................................... 24
F. Environment (including safeguards) .............................................................................. 25
Annex 1: Results Framework and Monitoring ............................................................................. 26
Annex 2: Detailed Project Description ........................................................................................ 30
Annex 3: Implementation Arrangements ..................................................................................... 44
Annex 4: Operational Risk Assessment Framework (ORAF) ..................................................... 73
Annex 5: Implementation Support Plan ....................................................................................... 76
Annex 6: Team Composition ....................................................................................................... 79
Annex 7: Economic and Financial Analysis ................................................................................. 80
Annex 8: Status of Implementation of the Road Sector Governance and Integrity Action Plan under NCTIP ................................................................................................................ 91
Annex 9: Roads Sub Sector Investment Plan .............................................................................. 98
Annex 10: Kenya Map No. IBRD 38484................................................................................... 102
i
PAD DATA SHEET
KENYA
KENYA TRANSPORT SECTOR SUPPORT PROJECT
PROJECT APPRAISAL DOCUMENT
AFRICA
TRANSPORT SECTOR
Date: March 29, 2011 Country Director: Johannes Zutt Sector Director: Jamal Saghir Sector Manager: Supee Teravaninthorn Team Leader(s): Josphat O. Sasia Project ID: P124109 Lending Instrument: Specific Investment Loan
Sector(s): Roads (78%); Transport Policy and Institutional Building (7%); Aviation (15%) Theme(s): Infrastructure Services for Private Sector Development (93%); Institutional and Policy Reform for Service Delivery (7%) EA Category: B-Partial Assessment
Project Financing Data: Proposed terms: [ ] Loan [ x ] Credit [ ] Grant [ ] Guarantee [ ] Other:
Source Total Amount (US$M) Total Project Cost:
Cofinancing: Borrower: Total Bank Financing:
IBRD IDA
New Recommitted
477.76 97.54 80.22 300.00
- 300.00 300.00
-
Borrower:
Republic of Kenya Office of the Deputy Prime Minister and Ministry of Finance The Treasury P.O. Box 30007-00100 Nairobi, Kenya
Tel: (254-20) 2252299 Fax: (254-20) 2240045
Contact Person: Mr. Joseph Kinyua, Permanent Secretary, Office of the Deputy Prime Minister and Ministry of Finance
ii
Responsible Agency: Ministry of Roads, Ministry of Transport, Kenya National Highways Authority, Kenya Airports Authority and Kenya Civil Aviation Authority Contact Person: Eng. Michael S. M. Kamau, Permanent Secretary, Ministry of Roads Telephone No: 254-20-2723155/88 Fax No: 254-20-2719658 Email: [email protected] [email protected]
Estimated Disbursements (Bank FY/US$ m)
FY 2012 2013 2014 2015 2016 2017
Annual 35.0 50.0 75.0 72.0 50.0 18.00
Cumulative 35.0 85.0 160.0 232.0 282.0 300.00
Project Implementation Period: April 22, 2011 – December 31, 2016 Board: April 21, 2011 Expected effectiveness date: August 20, 2011 Expected closing date: December 31, 2016
Does the project depart from the CAS in content or other significant respects?
○ Yes ●No
If yes, please explain: N/A
Does the project require any exceptions from Bank policies? Have these been approved/endorsed (as appropriate by Bank management?) Is approval for any policy exception sought from the Board?
○ Yes ●No N/A N/A
If yes, please explain: N/A
Does the project meet the Regional criteria for readiness for implementation?
●Yes ○ No
If no, please explain: N/A
Project Development objectives: The Project Development Objectives are to: (a) increase the efficiency of road transport along the Northern Corridor and the Tanzania-Kenya-Sudan road corridor; (b) enhance aviation safety and security to meet international standards; and (c) improve the institutional arrangements and capacity in the transport sector.
iii
Project description: Component A: Rehabilitation and Improvement of Roads, Roadside Facilities and Road Safety
Interventions. Component B: Institutional Strengthening and Capacity Building in the Transport Sector. Component C: Support to the Kenya Airports Authority. Component D: Support to the Kenya Civil Aviation Authority.
Safeguard policies triggered? Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60)
● Yes ○ No ○ Yes ● No ○ Yes ● No ○ Yes ● No ● Yes ○ No ○ Yes ● No ● Yes ○ No ○ Yes ● No ○ Yes ● No ○ Yes ● No
Conditions and Legal Covenants: Financing Agreement Reference Description of Condition/Covenant Date Due Schedule 2 Section I(E) The Recipient shall implement the Project in compliance
with the Safeguard Instruments and except as IDA shall otherwise agree in writing.
Continuous
Article III 3.03 (b) and Article V 5.01 (a)
The Recipient shall deposit into the Project Account an initial amount of KES 285 million (“Initial Deposit”), and thereafter replenish the Project Account at quarterly intervals during the Project implementation, by depositing therein an amount equal to the amount of the Initial Deposit or such other amount as may be agreed from time to time between the Recipient and the Association.
Effectiveness
Article V 5.01 (b) The Subsidiary Agreements have been executed on behalf of the Recipient and the Project Implementing Entities.
Effectiveness
Schedule 2, Section IV B 1(a) An aggregate amount not to exceed US$15 million equivalent may be used (reimbursed) for payments made prior to the signing of the Financing Agreement (retroactive financing) but on or after September 30, 2010, for Eligible Expenditures
Retroactive Financing
Schedule 2 Section I A(1) The Recipient has appointed or recruited a Project Coordinator with qualifications and experience under terms of reference satisfactory to the Association.
July 31, 2011
iv
Schedule 2, Section I G The Recipient has restructured the KCAA in accordance with the KCAA Strategic Plan including separating its service provision responsibilities from its regulatory oversight functions.
December 31, 2014
Schedule 2 Section IV B 2(b) No withdrawals shall be made against IDA funds under category 1(c) [rehabilitation of the runway, apron and taxiways and installation of the ground airfield lighting system, at Moi International Airport, Mombasa] unless and until the: (i) the Association shall have received satisfactory evidence that the Co-financing Agreement between AFD and the KAA in connection with the Co-financing provided by AFD has been executed and delivered and all conditions precedent to its effectiveness or to the right of the KAA to make withdrawals under it have been fulfilled: or (ii) the Recipient has identified alternative sources of financing under terms acceptable to the Association.
Disbursement condition
1
I. STRATEGIC CONTEXT A. Country Context 1. The Kenyan economy witnessed low growth over 2008-2009, but expects stronger growth over the next decade. Growth fell from 7.1 percent in 2007 to 1.6 percent in 2008, due to the global financial crisis, post-election violence following the 2007 elections, the international food and fuel price increases, and an extended period of drought. During 2009-10, the economy rebounded, and it is expected to grow at five percent annually over 2010-2014 and beyond. In the near term, the government plans to continue deepening economic reforms. The service industry, including transport, is expected to continue to dominate the economy and earnings from exports are expected to recover, with the biggest proportion coming from the East African Community (EAC) and larger Common Market for Eastern and Southern Africa (COMESA) markets.
2. Vision 2030, Kenya’s long term development plan, focuses on transforming Kenya from a low- to a middle-income country by 2030. Modern and efficient infrastructure facilities are required to support the achievement of Vision 2030, which calls for rehabilitating and upgrading the road and rail networks, improving urban public transport, and expanding access to electricity as well as safe water. The World Bank’s March 2010 Country Partnership Strategy (CPS), its 2008-09 Multi-Donor Infrastructure Diagnostic for Kenya, and its 2006 Poverty Assessment support this agenda, showing that improved infrastructure is associated with the movements out of poverty, and that with improved water supply and sanitation, it would dramatically improve human health, the environment, and the economy.
3. The governance record in Kenya is improving. Actionable Governance Indicators (AGIs), as provided in the World Governance Indicators1
, indicate that Kenya scores well on microeconomic and budgetary management, citizen voice and accountability, public administration, regulatory quality, and revenue mobilization, but below the average for low-income countries and sub-Saharan Africa on the rule of law and control of corruption. Recently, there have been some changes that will improve these results: (a) a new Constitution was approved in August 2010, separating the powers of the executive, judiciary and legislature; subjecting the judiciary to a full review and renewal; and (in Chapter 6) significantly enhancing the integrity expectations of civil servants; (b) police reforms are underway, based on an independent review; and (c) key legislations to combat corruption, such as public officer ethics act, anti-money laundering law and an economic crimes act, have been endorsed by Parliament. Moreover, Kenya has leveraged technical assistance from the Bank’s Stolen Asset Recovery Initiative to overcome its obstacles to recovery of proceeds of corruption in the safe havens abroad.
B. Sectoral and Institutional Context 4. The transport sector in Kenya has comparatively better infrastructure, operators and services than other countries in the region but until recently the network has been neglected for years and managed by comparatively inefficient institutions. A draft national transport sector 1 Worldwide Governance Indicators (www.govindicators.org)
2
policy has been approved by Cabinet and sent to Parliament, and a road sub-sector policy was approved by Parliament in 2006. The national transport sector policy lays down modalities for connecting the large segments of Kenya’s population that are isolated in the rural areas and also supports government efforts to transform the economy from a producer of primary commodities and basic manufactures for domestic and regional consumption, to a more modern and diversified economy. 5. Kenya’s road sub-sector is relatively large, with a total classified network of 160,886 km (of which 11,197 km are paved and 149,689 km are gravel or earth) and over 60,000 km of unclassified community roads (with corridors typically less than nine meters wide). This provides a reasonable network of roads in the densely-populated parts of the country and some access throughout the rest. Unlike its neighbors, which have major areas without all-weather roads, the key challenge for Kenya is to bring the network in poor condition (56 percent) to good condition (currently just 11 percent), while ensuring that adequate maintenance is carried out on the rest. 6. Road transport carries about 93 percent of all freight and passenger traffic in Kenya, but costs are high. The road transport industry includes large companies and individual owner-operators; it is highly competitive and rates are determined by the market; the industry responds quickly to changes in demand, road conditions and regulations. Even so, weak legal and regulatory framework has impacted negatively on the quality and reliability of services and on safety to the users.
7. The railway system is inefficient and carries less than six percent of the traffic between Mombasa port and the hinterland. Kenya’s limited rail system, comprising 1,939 km, links the major population and production centers, provides access to the port of Mombasa, and (though narrow gauge) allows the use of standard locomotives with 18 ton axle-loads. However, poor maintenance and management over decades turned this major economic asset into a severe financial liability to the government and an impediment to regional economic growth.
8. Kenya’s major seaport, Mombasa, handled about 20 million tons of cargo in 2010. For many years, there has been limited investment in the port, which is now experiencing serious capacity constraints. In 2009, it handled 650,000 Twenty-Foot Equivalent Units (TEUs), compared to a design capacity of 250,000 TEUs annually leading to long delays and high handling costs. In addition to conventional and bulk liquid berths, the port has a dedicated container terminal with a 600-meter berth length. While Mombasa could provide international-quality services for the East African region and rapid transfers to/from the global shipping services, the repeated postponement of required investments is rapidly making the port a major infrastructure constraint in Kenya. While there have been improvements recently, a legacy of poor management and cumbersome procedures has added to the high level of congestion, high charges and slow services, all of which require immediate attention.
9. Air transport has become increasingly important to Kenya’s economy, as it sustains the tourist industry and has facilitated entry into the global fresh flower and horticulture markets. Fresh produce exports industry has shown that Kenya can develop world-class logistics chains, when given the opportunity and incentives. Kenya Airways has become a market leader in
3
Africa and Nairobi’s Jomo Kenyatta International Airport (JKIA) a regional hub. That said, the civil aviation infrastructure and aviation safety inspection capacity has not kept pace with the quality of the air transport services and JKIA is now facing serious capacity constraints (for instance, it handled over five million passengers in 2009, double its design capacity of 2.5 million). 10. The public sector owns, maintains and manages Kenya’s transport infrastructure and provides some transport services (the port and some railway), while the private sector provides most transport services (road passenger and freight transport, urban transport, air transport services, and some bulk cargo port services). Private sector participation has risen over time, due to the public sector’s decisions to withdraw from active participation in some areas or due to its failure to perform. All new road construction, rehabilitation and periodic maintenance works are contracted out; routine maintenance by force account is being phased-out; and the provision of airport cargo facilities is increasingly financed and managed by the private sector.
Key Development Issues 11. During the period 1984-2000, Kenya saw very little by way of development in the productive sectors and worse still, the transport sector remained mostly stagnant. The poor state of infrastructure in general, and transport infrastructure in particular, was commonly rated as a major constraint by investors (often one of the top three constraints). Roads were also rated as one of the major problems by the ordinary citizens, particularly those residing in the rural areas. The rural population felt isolated from economic opportunities as well as health, education and other social services. 12. The Kenyan press abounded with complaints regarding the state of the infrastructure, roads in particular, although the railways, aviation and the port of Mombasa were also subject to frequent criticisms. The complaints were raised by politicians as well as civil society and business interests. However, the complaints were not simply directed toward the infrastructure but also the misuse of resources, the corruption in the award of contracts, the corruption in the enforcement of axle-load controls, the poor quality work by contractors, etc. The fuel levy generated substantial funding but there was a general feeling that road users did not receive value for money.
13. The transport sector has experienced significant policy and institutional reform over the last five years, with assistance from the International Development Association (IDA) and other development partners. Over recent years, three new road authorities were created, Kenya National Highways Authority (KeNHA), Kenya Rural Roads Authority (KeRRA), and Kenya Urban Roads Authority (KURA), to separate policy formulation from execution of programs and provision of oversight and regulatory functions and to provide greater transparency and accountability in the use of allocated resources. New policies have been enacted. The fuel levy now funds road maintenance without interruption and across all parts of the country, and Kenya Roads Board now acts as the custodian of the Road Maintenance Levy Fund (RMLF) and manages and allocates these funds to the road implementing agencies. In addition, an inventory of the road network was completed to help clarify ownership, responsibilities and priorities in the sector. These and other reforms (detailed in Table 1) have resulted in readily-visible improvements in
4
road connectivity across Kenya, for instance on the Northern Corridor, which is the gateway from the port of Mombasa to Kenya’s interior and its landlocked neighbors to the east.
Table 1: Key Reforms in the Transport Sector
Policy Reforms/Commitments Status in 2010 Enactment of a new road subsector policy. High priority placed on maintenance of existing road network. Establishment of three autonomous road authorities (KeNHA, KURA, and KeRRA) for managing national, urban and rural roads.
The authorities are new and require strengthening. The roles of KURA and KeRRA need to be clarified in light of the new constitution, under which power is devolved to 47 counties.
Strengthening Kenya Roads Board capacity to manage the road maintenance fund (Road Fund).
The Road Fund in FY10 collected US$300 million, distributed as provided by the Roads Act 2007.
Public dissemination of overall road programs and opportunities in the road sub-sector.
This has improved accountability and transparency and public perception of the sector. Information is available on the websites of transport sector institutions.
Adoption of post-qualification to help prevent collusion.
Post-qualification was adopted, resulting in competitive bids slightly below estimates for recent NCTIP works contracts.
Truck Overloading and Control – lack of enforcement and corruption.
Operation and management of three weigh stations contracted out to the private sector; use of four-axle trucks configuration is banned; and penalties for overloading increased.
Maintenance manuals developed. JICA is providing implementation support. Re-classification of the road network; road inventory and condition survey completed.
Road network size and condition are known, and classification of the unclassified network is nearing completion.
Road contractors form a Roads and Civil Engineering Contractors Association (RACECA).
RACECA will be a self regulating oversight body to dialogue with Government on matters related to construction.
KAA is autonomous, retains revenues, takes responsibility for security management, and seeks private financing for capital investment.
Improved financial and operational performance, airport security has improved; JKIA cargo facilities are financed and developed by the private sector.
KCAA is autonomous, retains revenues and managed by an independent Board of directors.
KCAA enhanced capacity to develop aviation safety regulations and inspections materials, established a registry of aviation personnel and aircraft. However, KCAA still faces the challenges in retaining skilled flight safety operational personnel; it requires restructuring, separating regulation of air navigation from its air traffic control services.
14. But challenges remain, including: the poor condition of much of the road network; periodic allegations of governance malpractices; public sector inefficiency; capacity constraints at airports and the seaport; weaknesses in aviation safety and security oversight; and poor road safety (see Table 2). In addition, following the August 2010 promulgation of the new constitution, which will devolve power to 47 counties, it will be necessary to determine whether, and if so how, rural and urban roads ownership will shift from the central government to the counties and municipalities. This project will facilitate a review of the options.
Table 2: Key Outstanding Reforms in the Transport Sector
Key Reforms Status
Complete the preparation of a Road Sector Investment Program (RSIP), with appropriate priorities.
The RSIP 2010-24 was prepared and presented to stakeholders; on MoR approval it will be made public.
Establish the National Construction Authority A draft NCA Bill has been approved by Cabinet and will be
5
Key Reforms Status (NCA). discussed by Parliament; the act will have provisions for
registering contractors, monitoring their performance and publishing names of poor performers.
Strengthening of the Engineers’ Registration Board (ERB).
Cabinet has approved the draft ERB Bill, which will be discussed by Parliament. The ERB will have the mandate to register professionals and engineering firms, assess their qualities, monitor their performance, and exercise rights to sanction poor performance or unethical behavior and approve engineering degree programs.
Internal restructuring KCAA by December 31, 2012 and eventual separation of its service provision from its oversight function by December 31, 2014.
The KCAA Board of Directors has approved internal restructuring, which is now awaiting GoK endorsement.
Operationalize Kenya Maritime Authority (KMA).
The KMA was recently established, to coordinate, regulate and oversee maritime affairs. It needs strengthening and capacity building.
Approval of the integrated national transport policy.
A draft national transport policy has been prepared, approved by Cabinet and awaits Parliamentary discussion and adoption.
Redefine the roles of KURA, KeRRA and KRB under the new constitution.
With devolution of power to counties, the ownership and management of roads other than national highways needs to be redefined. A study will be undertaken to look at options.
Revision of road design manuals. Under preparation with the support from the European Union. 15. The Road Sector Investment Plan (RSIP) has been developed on the basis of economic justifications, using the Highway Development and Management Model (HDM-4) moderated to incorporate social and political considerations. Interventions in order of priority are for routine maintenance, periodic maintenance, rehabilitation, reconstruction, upgrading, expansion and development. Also included are interventions to deal with road safety, provision of non-motorized transport facilities, bypasses, and missing links in urban areas and bridges.
Table 3: Distribution of Kenya’s Road Network by Agency (in Km unless specified)
Agency Paved Unpaved Total % share Kenya National Highways Authority (KeNHA) 6,783 6,904 13,687 9 Kenya Rural Roads Authority (KeRRA) 2,268 127,799 130,067 81 Kenya Urban Roads Authority (KURA) 2,140 10,409 12,549 8 Kenya Wildlife Service (KWS) 6 4,577 4,583 3 Total 11,197 149,689 160,886 100 Percentage share (%) 7 93 100
Source: Road Inventory and Condition Survey, Ministry of Roads, 2009 16. The RSIP consists of three Phases: Phase 1 (2010-14), Phase 2 (2015-19) and Phase 3 (2020-24) (see Table 4). Priority roads are identified on the basis of economic and social justifications for improvement, rehabilitation and maintenance. Phase 1 aims to maintain and improve 14,644 km of roads, involving: capacity improvements (dualling and additional lanes) of 182 km; construction of 173 km of new roads; rehabilitation of 3,425 km of paved roads; upgrading 4,004 km to bitumen standards; upgrading 1,486 km to Low Volume Seal Roads; routine maintenance of all road networks totaling 160,886 km; completing backlog maintenance on the paved class A, B, and C roads; and by 2014, reducing backlog maintenance on the paved
6
road network to KES46 billion. The development of the RSIP is a major step forward, as funds have been allocated to lower-priority roads in the past, while the core and strategic network was neglected. According to RSIP, about US$6.7 billion is required over the next five years (Phase 1), with the government of Kenya (GoK) contributing US$4.3 billion leaving a shortfall of US$2.4 billion and the GoK is exploring various options of filling the gap including mobilizing domestic resources such as infrastructure bonds. The details are contained in Annex 8.
Table 4: Road Sector Investment Program 2010-2024 (KES millions)
Source of Funds
2010-2014 (Phase 1)
2015-2019 (Phase 2)
2020-2024 (Phase 3)
KES Km KES Km KES Km Road Maintenance Levy Fund (RMLF) 153,178 167,267 258,930 174,450 326,561 183,512 Development 381,693 9,436 423,367 11,565 544,253 14,644 Public Private Participation 10,000 10,000 Grand Total 534,871 176,703 692,297 186,015 880,814 198,156 Source: Road sector Investment Plan 2010-2024 17. While road construction and maintenance efforts have delivered mixed results in the past, there is significant improvement on policy and institutional reforms. In the past, inadequate funds were allocated for maintenance of heavily trafficked roads; variable contractor and supervision performance; unsatisfactory outcomes regarding cost control and cost effectiveness; over-commitment of available funding, such that contracts were awarded in excess of the budgetary availability leading to contractors not being paid in a timely manner; significant expenditure on interest and compensation for equipment idle time, arising from delayed payments to contractors. The situation has improved recently. In particular, Kenya Roads Board (KRB) distributes the RMLF in accordance with the Roads Act and on the basis of approved work programs and carries out financial and technical audits. The challenge now is to strengthen the capacities of the newly-established road authorities (KeNHA, KURA and KeRRA); establish and build the capacities of the National Construction Authority (NCA) and the Engineers’ Registration Board (ERB) to oversee the construction industry; address the backlog in rehabilitation and reconstruction; and strengthen the Ministry of Road’s (MoR’s) capacity for effective monitoring and evaluation of RSIP implementation. In this context, the road agencies will implement the RSIP through contracting out works, goods and services. Parliament has approved a Public-Private Partnership (PPP) policy for financing, managing and implementing public projects, and some components of RSIP will be delivered through PPP arrangements.
18. Kenya has three international airports—at Nairobi (JKIA), Mombasa (Moi International Airport - MIA), and Eldoret. Domestic air services improved significantly after liberalization and the Civil Aviation industry remains vibrant under private sector operation. JKIA, Kenya’s main international airport, has become a regional hub, with connections to most of Africa and the world, and now operates above its design capacity, though the private sector has provided adequate cargo infrastructure. Capacity expansion at both JKIA and Kisumu airport is moving forward with the support of European Investment Bank, French Development Agency and the World Bank under Northern Corridor Transport Improvement Project (NCTIP). Even so, the rapid increase in traffic levels is exerting further pressure on the planned expansions. For instance, while parking space for aircraft has increased by 50 percent at JKIA, more is required
7
to cater for airline expansion plans as well as growing cargo traffic. Meanwhile, the runway at MIA requires immediate rehabilitation to improve its condition. The Kenya Airports Authority (KAA), a parastatal, is responsible for managing Kenya’s airports, and Kenya Civil Aviation Authority (KCAA) is responsible for ensuring that the aviation safety and security in Kenya meet International Civil Aviation Organization (ICAO) standards and, where applicable, International Aviation Safety Assessment (IASA) category 1 standards. Both KAA and KCAA face critical challenges and require considerable reforms and capacity improvements. 19. The demand for KAA services is growing rapidly (see Table 5). Kenya’s air transport services have outstripped those of many countries in sub-Saharan Africa. Passenger capacity constraints are growing serious, as traffic surged from 3.1 million passengers in 2002 to 5.1 million in 2009 (a 65 percent increase) against a design capacity of 2.5 million at JKIA. MIA, the second most important airport in Kenya, handling 1.1 million passengers and 60 percent of all tourist traffic in 2009, is also facing constraints; the runway is in poor condition and the power supply requires upgrading as it often fails, leading to flight cancellations. With rapid expansion, Kenya Airways is rivaling the services provided by major airlines in Africa notably South African Airways and Ethiopian Airlines. However, Kenya Airways cannot make direct flights to the United States (US) due to issues that are beyond the airport’s control. By contract, the private sector has added capacity to handle fresh produce exports out of JKIA, keeping pace with growing demand (263,000 tons in 2009 compared to 169,000 tons in 2002). KAA’s operational performance is shown in Table 5.
Table 5: KAA’s Eight Year Profile of Operational Performance
Source: Kenya Airports Authority 20. A master plan for developing Kenya’s airports is being prepared and will indicate KAA’s investment requirements. Working with the Public Private Infrastructure Advisory Facility (PPIAF), KAA plans to re-organize and restructure, as well as to expand the role of commercial finance in meeting its capital development requirements, including possible International Bank for Reconstruction and Development (IBRD) enclave loans. A loss-making entity in 2002, KAA became profitable after a 2005 GoK decision to allow it to retain operational revenues. KAA’s Board is currently finalizing a proposal to re-organize and manage Kenya’s airports, including possibly scaling down the number of airports that will fall under its mandate and increasing the participation of the private sector in delivery and management of services.
Year 2002 2003 2004 2005 2006 2007 2008 2009 Aircraft movements (‘000) 192 177 201 188 192 215 195 201 Passengers (million) - JKIA 3.10 3.50 4.00 4.20 4.50 4.90 4.80 5.10
Passagers (million) – MIA 0.89 0.82 0.98 1.10 1.20 1.35 0.87 1.11 - Other airports 0.51 0.38 0.52 0.60 0.60 0.75 0.73 0.69 - All airports 4.50 4.70 5.50 5.90 6.30 7.00 6.40 6.90 Freight (‘000 tons) all airports 222.30 217.60 241.40 273.70 280.00 307.40 321.80 282.70 Revenue Generated (KES billion) 2.40 2.50 3.00 4.00 5.20 5.60 5.30 5.9 Net Profit/(Loss) (KES billion) (0.63) (0.422) (0.18) 0.91 1.29 1.79 1.25 0.99
8
21. As air traffic grows, KCAA’s mandate to provide regulatory, safety and security oversight of all aviation-industry stakeholders, consistent with international conventions and protocols, has become more demanding. In particular, KCAA is required to provide aviation navigation services and develop air traffic management systems to facilitate the safe movement of aircraft in Kenya’s airspace. The number of aircrafts registered in Kenya increased from 757 in 2002 to 1,015 in 2009 (up by 34 percent) while licensed aviation personnel (including pilots, cabin crew, and aircraft maintenance personnel) increased from 1,740 to 5,543 (a 219 percent increase). Because it can only provide relatively low remuneration packages, KCAA finds it difficult to recruit and retain qualified and experienced flight safety inspection personnel, and this in turn makes it difficult for it to provide effective oversight. To function as an autonomous regulator, KCAA needs to resolve potential conflicts of interest by moving the location of its headquarters out of KAA premises and by separating its responsibility to regulate air navigation services and management of the East African School of Aviation from its responsibility to provide such services. According to the strategic plan for KCAA, internal restructuring will be completed by December 31, 2012 and eventual separation of regulatory functions from service provision by December 31, 2014, thereby enabling KCAA to function as an autonomous regulator, and resolving potential conflicts of interest. In addition, KCAA needs to upgrade its air navigation systems. To date, it has harmonized and adopted aviation safety and security regulations within the EAC framework, including agreement on sharing resources, particularly flight safety inspectors. The EAC has established the Civil Aviation Safety Oversight Agency (CASOA) to facilitate this initiative.
Table 6: KCAA’s Eight Year Profile of Operational Performance
Year 2002 2003 2004 2005 2006 2007 2008 2009 Aviation Personnel Licenses* na** 1,740 2,365 2,908 3,938 4,526 5,131 5,543 Total Aircraft in register 757 806 817 877 910 920 959 1,015 Total aircraft maintenance organizations 49 52 59 72 75 86 91 93 Air operator certificates 72 85 103 126 133 141 150 175 Training Simulators na Na 20 25 33 39 44 44 Air Service Licenses and clearances 2,039 2,391 2,675 2,992 2,948 3,105 3239 3,478 Ground Inspections Activities 280 360 434 759 834 993 1080 1,242 Revenue Generated (KES million) 1,279 1,381 1,381 1,584 1,781 1,902 1,930 2,197 Net Income (KES million) 384 599 (96) 789 265 58 397 197 Note: * Relates to Personnel licenses for Air Transport Pilot licenses, Commercial Pilot license, Private Pilot License, Student Pilot License, Cabin Crew License and Aircraft Maintenance License **na – figures not available (KCAA was established in 2002) 22. KCAA is reforming to enable it to address these challenges. Its Board has approved a proposal to restructure it to create incentives for efficiency, enhance remuneration for flight safety operations staff, retrench 200 non-core staff (funded by GoK), and prepare the authority for separating service provision from regulatory and oversight functions over the next two-three years. Strengthening the regulatory function is key-aviation safety and security oversight capacity is currently inadequate. Enabling KCAA to obtain regulator status will also allow it to offer better remuneration to its staff than is currently possible. While KCAA is allowed to retain generated revenue, it is currently not generating enough to meet its growing needs, due to the low level of its current charges (among the lowest in the region); its net operating profit fell from KES384 million in 2002 to KES 197 million in 2009 (see Table 6). In this context, KCAA
9
has submitted a proposal to the Minister for Transport (MoT) to raise its user charges, without compromising the competiveness of Kenya as an aviation hub. 23. Kenya has operated railway services for over 100 years, and in the 1970s it carried 60 percent of long-distance freight across the country, but today it accounts for less than six percent. In 2006, the Kenya-Uganda railway was concessioned to a private sector operator, Rift Valley Railways (RVR), but the concessionaire failed to invest and services deteriorated further. Having carried 4.2 million tons annually on the Northern Corridor in the 1970s, today it carries about 1.2 million. Key factors contributing to underperformance include underinvestment in upgrading the lines, poor management structures, inadequate quality and quantity of rolling stock, and strong competition from the trucking industry. In 2010, the shareholding structure within the concession was changed and a new partner was introduced, with indications that a long-awaited injection of new capital would be forthcoming. With this combination of new management and new capital, the performance of the railway is expected to improve in the medium term, though it is likely to take many years before it is restored to its full potential.
24. The port of Mombasa is the main gateway to eastern Africa and possibly the single most important infrastructure asset in Kenya. Given that East African economies are expected to grow at about five percent per year, the port will have to handle much more traffic in the near future, but it is already operating at full capacity and inefficiently, resulting in high costs that negatively impact regional manufacturing and import-related activities. The use of off-port container storage facilities has somewhat eased congestion within the port itself, but clearing processes remain burdensome and the physical capacity of the port has not been improved. The GoK decided to transform Mombasa into a landlord port years ago, but has not implemented that decision—even though it is probably the most effective way to introduce efficiency improvements and attract resources for expansion. A decision to put berths 11 to 14 under private-sector management has met with local resistance and is pending re-engineering. As a consequence, the many external investors who have expressed interest in the port have largely stayed on the sidelines, awaiting clarity on the GoK’s preferred way forward.
Governance in the Transport Sector
25. Governance in the transport sector has been challenging, but significant improvements have been made over recent years. Risks include collusion and other forms of bid rigging, fraud during implementation, and corruption that allows overloaded vehicles to destroy the road infrastructure. To mitigate the risks and enhance professional integrity, the Bank and the GoK, with the Department of Institutional Integrity (INT) guidance, agreed on a Roads Sector Governance and Integrity Improvement Action Plan (GAP), which is being implemented under NCTIP (see Annex 7), and where appropriate adopted for the Kenya Transport Sector Support Project (KTSSP). 26. The GAP includes policy and institutional reforms that support the enhancement of transparency and accountability in the transport sector. For instance, in the aviation sub-sector, KAA and KCAA management both report to independent Boards; and MoR has been reformed to separate policy formulation from the execution of works, which has been transferred to the autonomous and independently managed KeNHA, KURA and KeRRA. In addition, KTSSP will
10
facilitate establishment of the proposed NCA (which will register contractors, monitor their performance and publish the names of poor performers and those that are debarred) as well as the ERB (which will register professionals and engineering firms, assess their qualities, monitor their performance, and exercise rights to sanction poor performance or unethical behavior); both bodies have been approved by Cabinet and await a parliamentary discussion. In parallel, road contractors have formed and registered a road-builders association, which is committed to self-regulation and oversight and which provides a common platform for dialogue with the government on construction issues. 27. The GAP also aims to prevent collusion, bid-rigging and other forms of corruption that have plagued past road construction efforts. To this end, road construction decisions are publicly reviewed and consulted; unconditional performance bonds are required as a standard; construction unit costs are more rigorously investigated and estimated; bids and qualifications are subject to much higher levels of scrutiny (e.g. the NCTIP road contracts); post-qualification has been used for large contracts; and an independent qualified procurement specialist, financed by the Bank, has reviewed NCTIP bids as received, to identify and address any major anomalies or “red flags”. Where red flags are found, project teams work more closely with INT and with the Kenya Anti-Corruption Commission (KACC) to determine their significance and an appropriate response. Through these and other measures, recent road construction contracts supported by the Bank have received more qualified bids as well as prices that are below or closer to Engineer’s estimates. 28. Work is also underway to enhance social accountability in the road sector. To enhance demand driven good governance, the Bank in collaboration with MoR is currently preparing to undertake, through the participation of selected Civil Society Organizations (CSOs), an independent audit of on-going and recently completed contracts and to conduct a first road user satisfaction survey (GAC Squad has provided some funding for piloting these tasks, as such funding has not yet been secured from other independent sources). A communication strategy as well as an internet-based complaint lodging system for all sectors has also been developed.
C. Rationale for Bank Involvement
29. KTSSP will help to implement and deepen transport sector reforms and investment plans that have been endorsed by the GoK and the EAC. Most policy and institutional reforms have entered critical stages of implementation. A key aim is to strengthen new institutions including KeNHA, KURA, KeRRA, and KCAA. Experience has shown that medium-term support is required to operationalize new institutions, build their capacity and equip them appropriately to discharge their duties and enable them to become effective. The KTSSP will also support the GoK to develop and manage the road sector, in accordance with the RSIP and the Kenya Roads Act 2007. TheGoK completed feasibility and detailed design and environmental and social impact assessments of the Kisumu-Kitale and Bachuma Gate-Maji ya Chumvi road sections in 2009-10, utilizing its own resources. In December 2010, KeNHA invited bids and received on March 10, 2011 for three contracts on the Kisumu-Kitale (147 km) road section, which serves one of the most densely-populated and high-poverty parts of Kenya. Rehabilitation of these road links is expected to reduce travel time on that road. Currently it takes five hours for a truck to cover the 147 km distance (at a cost of about US$2 per km). The rehabilitation will reduce travel
11
time by about 40 percent, to about three hours (and a cost of US$1.50 per km); it will also support to enhance food transport in this area, where availability is highly variable. In addition, further work on restoring the northern corridor road, in this case in the former Coast province, will contribute to reduce travel times on this vital artery into East Africa even more. Restoration to date has reduced travel time along the corridor by five hours between Mombasa and Timboroa, a distance of about 750 km. Further improvements in governance, accountability and transparency will also be supported, including: the establishment of the proposed NCA to regulate the conduct and development of contractors in Kenya; strengthening the ERB to regulate the conduct of engineers; restructuring KCAA to improve its regulatory function; strengthening the Kenya Maritime Authority to improve its oversight functions; facilitating the development of an urban transport strategy; establishing the Nairobi Metropolitan Transport Authority; and setting up a Maritime Search and Rescue Unit under MoT. D. Higher-Level Objectives to which the Project Contributes 30. The proposed rehabilitation of road and airport infrastructure as well as support to the implementation of policy and institutional reforms and capacity-building under the project are consistent with Kenya’s Vision 2030 and the CPS. Modern and efficient infrastructure facilities are required to support the expansion of Kenya’s productive sectors. Under-investment in infrastructure development and maintenance has been identified as one of the main contributors to the high cost of doing business, undermining competitiveness and adversely affecting trade. The KTSSP will help to build the capacities of the recently-established transport sector institutions, (KeNHA, KeRRA, and KURA) and proposed new ones, including NCA and ERB, to enable them to handle their mandates effectively; and it will involve restructuring KCAA to address its challenge of ensuring it has adequate aviation safety oversight capability. Finally, it will support the implementation of Kenya’s 15-year RSIP, by financing critical priority road sections and addressing the capacity constraints at Kenya’s major airports.
II. PROJECT DEVELOPMENT OBJECTIVES
A. Project Development Objectives (PDO) 31. The Project Development Objectives are to: (a) increase the efficiency of road transport along the Northern Corridor and the Tanzania-Kenya-Sudan road corridor; (b) enhance aviation safety and security to meet international standards; and (c) improve the institutional arrangements and capacity in the transport sector.
12
1. Project Beneficiar ies 32. This is a national project with regional dimensions. The improvement of parts of the northern corridor road (in the former Coast province) and of the Kisumu-Kitale road section that links Tanzania-Kenya-Sudan with branches to Uganda and Ethiopia will facilitate trade and regional integration, benefiting a large population in the project area, in Kenya and East Africa. These two road corridors serve high potential, productive and populous areas: in particular, the Tanzania-Kenya-Sudan road corridor serves about 19.8 million people in western Kenya, while the Northern Corridor traverses all parts of Kenya (except for the former North Eastern province), serving about 70 percent of Kenya’s population and businesses that contribute about 80 percent of gross domestic product (GDP). The Northern Corridor is also the main transport backbone for East Africa, linking Uganda, Tanzania, Sudan, Rwanda, Burundi and Eastern Democratic Republic of Congo to the port of Mombasa. 33. The main beneficiaries of the identified road improvements are the road users, including businesses, farmers, and local communities in the project area. Based on the current level of traffic, it is estimated that about 147,000 direct beneficiaries of which 40 percent are female (road users excluding bicycle riders) use these road sections per day, while about one million passengers of which 30 percent are female use MIA annually. The travel time from Kitale to Kisumu is expected to fall by 40 percent and vehicle operating costs is expected to be reduced by 25 percent with the proposed improvements, and the provision of road-side amenities, including bicycle tracks, pedestrian crossings, access roads to markets and public institutions along the selected road sections, and improvement of junctions will enhance road safety. In addition, the rehabilitation of the runway at MIA in Mombasa, which is the main gateway by air to Kenya’s Coastal region, will support the vital beach tourism sector in Kenya. Finally, building the capacities of the institutions in the transport sector will enhance the delivery of services to all Kenyans.
2. PDO Level Results Indicators 34. The PDO-level results indicators are as follows, with details in Annex 1:
(a) A reduction in travel time on the selected road sections; (b) A reduction in vehicle operating costs; (c) Kenya meets ICAO standards and recommended practices and KCAA is cleared
for IASA Category 1 safety status; (d) Improved institutional arrangements and capacity in the transport sector; and (e) A reduction in road crashes along the Kisumu-Kitale road section.
III. PROJECT DESCRIPTION
35. Project activities will support: (a) deepening of policy and institutional reforms in the transport sector; (b) enhancing the capacity of institutions providing oversight and regulatory functions to support the delivery of transport services; (c) supporting governance, accountability
13
and integrity improvements in transport sector; and (d) financing infrastructure improvements necessary to support Kenya’s long-term development strategy (see Annex 2 for details). A. Project Components 36. Component A: Rehabilitation and improvement of roads, roadside facilities and road safety interventions (total US$264.85 million, of which IDA US$201.44 million). The project area is indicated on a map in Annex 9. The selected road sections are among the top priorities in the RSIP. This component will comprise:
(a) Rehabilitating the Kisumu - Kakamega - Kitale section (147 km including 10 km of new second carriageway) of the Tanzania-Kenya-Sudan road corridor by widening the road carriageway and constructing service roads and non-motorized traffic facilities at market centers to improve road safety;
(b) Constructing a second carriageway on Athi River-Machakos road section (21 km) on the Northern Corridor as well as service roads (originally to be done under NCTIP but dropped due to inadequate funds and later transferred to the proposed Nairobi Urban Toll Road project which has since not materialized);
(c) Rehabilitating the Maji ya Chumvi–Bachuma Gate road section (53 km) on the Northern Corridor, including strengthening and widening of the existing road carriageway, provision of service roads and non-motorized traffic facilities;
(d) Constructing the four interchanges at Nakuru-Nyahururu turnoff; Nakuru-Njoro turnoff; Mau Summit-Kisumu turnoff and Ahero-Kisii Turnoff; and
(e) Supervising the construction works. 37. The rehabilitation works will include: (a) provision of roadside facilities, including lorry and bus parking, seasonal markets, and road-user services; (b) enhancement of road safety through improvement of hazardous locations, traffic calming measures, pedestrian crossings, improvement of major junctions, and so forth; (c) provision of measures to address Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS); and (d) access roads to public facilities. 38. Component B: Institutional strengthening and capacity building in the transport sector. (total US$69.70 million, of which IDA US$62.48 million):
Sub Component B-1: Support to KeNHA, KURA and KeRRA (total US$41.70 million, of which IDA US$36.47 million). This will involve: (a) Strengthening of various institutions including KeNHA, KURA and KeRRA,
through acquisition of equipment, vehicles, modernization of management information systems, financial planning, contract management and related operational capacities, to enhance delivery of services;
(b) Training road-sector manpower, particularly in areas related to management information systems and private sector participation in service delivery;
14
(c) Construction of a single office block for the headquarters of road sub sector institutions including KeNHA, KeRRA, KURA, ERB, KRB and the proposed NCA and provision of services to supervise the construction works;
(d) Carrying out feasibility and detailed engineering designs and sector studies for managing the road network, including particularly: (i) the Mombasa Western By-pass; (ii) conversion of the Northern Corridor Road into a multi-lane facility; (iii) the Nakuru-Loruk-Marich Pass; (iv) the Lake Victoria ring-road; (v) the Ahero-Kisii-Isebania road-segment; (vi) the Nakuru-Nyahururu-Nyeri road segment; (vii) the Kisian-Busia road segment; and (viii) Malindi-Garsen-Madogo-Garissa road segment; and
(e) Marking the boundaries for the Right of Way and to secure KeNHA’s road assets. Sub component B-2: Support to the KRB and MoR (total US$8.90 million, of which IDA US$8.54 million). This will involve: (a) Study of the impact of the new constitution on the responsibilities and functioning
of KeNHA, KeRRA and KURA, and the role of KRB; (b) Support to enhance the operational capacities of NCA and ERB; (c) Study of the role of MoR, and provision of technical assistance to implement its
new functions and strengthen the Material Department, Mechanical Transport Department, Kenya Institute of Highways and Buildings Technology (KIHBT) and External Resources Department (ERD) of the Ministry of Finance (MoF);
(d) Inventory of unclassified roads and recommendations for their maintenance and management;
(e) Conducting monitoring and evaluation of the performance of the project and sector coordination; and
(f) Training of manpower in KRB, ERD, State Law Office, and MoR.
Sub component B-3: Support to the Ministry of Transport (MoT) (total US$19.10 million, of which IDA US$17.47 million). This will involve: (a) Support for implementing the integrated national transport sector policy,
including the: (i) setting up of the National Transport and Safety Authority and support for the National Road Safety Program; (ii) setting up of Nairobi Metropolitan Transport Authority; (iii) establishing the legal and regulatory framework for Railways; and (iv) setting up the Maritime Search and Rescue Unit within MoT;
(b) Support for strengthening oversight functions in the maritime sub-sector; (c) Strengthening of air accident investigation capacity, including construction of a
hangar at JKIA and provision of services to supervise the construction works; (d) Development of navigation charts for the Kenyan Coastline, and enhancing search
and rescue capability of Kenya on Lake Victoria; (e) Improvement of the maritime training facilities at the Port of Kisumu; (f) Transport sector studies, including, among others, the development of an urban
transport sector strategy; a study on the development of airstrips and air transport
15
services at the county and regional levels and participation of the private sector in the management of the port of Kisumu; and
(g) Training of manpower in MoT.
39. Component C: Support to KAA (total US$120.14 million, of which IDA US$15.04 million). This component will comprise of the following:
(a) Rehabilitation of MIA’s runway, taxiways and apron, and modernization of its airfield ground lighting systems;
(b) Upgrading and modernizing power supply to MIA, and connection to KCAA facilities and equipment;
(c) Provision of a new baggage-handling system at JKIA; (d) Capacity building and training of manpower in safety, security and airports
management; (e) Augmenting water supply to JKIA and MIA; and (f) Supervision of construction of works.
40. Component D: Support to the KCAA (total US$23.07 million, of which IDA US$21.05 million). This component will involve the following:
(a) Provision of technical assistance for aviation safety and oversight capacity; (b) Technical assistance to support the restructuring of KCAA and separation of its
regulatory responsibilities from its service provision functions; (c) Construction of an office block for KCAA headquarters at JKIA; (d) Supervision of construction of works; (e) Upgrading KCAA’s ICT facilities; (f) Provision of equipment to upgrade and modernize air navigation systems; and (g) Training manpower in safety, security and oversight in the civil aviation industry.
B. Project Financing 41. The Agence Francaise de developpement or French Development Agency (AFD) has confirmed to KAA, its willingness to provide partial financing for Component C of the project in a letter dated February 18, 2011 to the Managing Director and copied to the World Bank and European Investment Bank among others. Based on the experience under NCTIP, it is expected that the loan agreement between KAA and AFD would be concluded in about 12 months (by January 2012) once the KAA and the GoK agree on the proposed terms and conditions of the AFD financing. The European Investment Bank (EIB) has also expressed interest, though formal discussions have not commenced with KAA. IDA funds for Component C will finance the supervision costs and co-finance the rehabilitation works costs associated with the runway at MIA. The rest of the activities of Component C will be financed independently under parallel financing arrangements. Accordingly, no withdrawals shall be made against IDA funds towards the rehabilitation of the runway, apron and taxiways and installation of the ground airfield lighting system, at MIA, Mombasa unless and until: (a) the IDA will have received satisfactory evidence that the Co-financing Agreement between the French Development Agency (AFD) and the KAA has been executed; or (b) the GoK shall have identified alternative sources of financing
16
under terms acceptable to the IDA. If in the event KAA does not obtain suitable external financing, it will consider borrowing in the local capital markets or financing the balance from its own resources after increasing user charges as appropriate. 1. Lending Instrument 42. The lending instrument will be a Specific Investment Loan (SIL), chosen for this project because it will support rehabilitation of specific economic, social and institutional infrastructure. The activities against which funds are to be disbursed are well-defined and specific. 2. Project Financing Table
Table 7: Project Costs and Financing
Project Component
Estimated Cost
(US$m)
IDA Financing GoK* AFD/ KAA
(US$m) (% of total)
(US$m) (US$m)
A. Rehabilitation and improvement of roads, roadside facilities and road safety interventions.
264.85 201.44 67.15 63.41 0.00
B. Institutional strengthening and capacity building in the transport sector
B1. Support to KeNHA, KURA and KeRRA 41.70 36.47 12.16 5.23 0.00
B2. Support to the KRB and MoR 8.90 8.54 2.85 0.36 0.00 B3. Support to MoT 19.10 17.47 5.82 1.63 0.00
Sub Total for Component B 69.70 62.48 20.83 7.22 0.00 C. Support to KAA 120.14 15.04 5.00 7.56 97.54 D. Support to KCAA 23.07 21.05 7.02 2.02 0.00 Total Costs and Financing Required 477.76 300.00 100.00 80.22 97.54 Of which: Physical Contingencies Price Contingencies
31.70 32.89
19.75 20.76
6.58 6.92
6.55 5.46
6.84 5.23
Note * Overall, GoK will finance 17% of the total cost of the project.
C. Lessons Learned and Reflected in the Project Design 43. Previous and current experience with projects in the transport sector and their implementation record in Kenya hold a number of useful lessons:
(a) The choice and design of project activities should reflect the intent, interests and priorities of the Government, potential beneficiaries and other stakeholders to ensure ownership. Under NCTIP, a GoK-established Inter-ministerial Committee steered the reform process well.
17
(b) Project preparation and implementation by entities responsible for the roads and aviation industries can help to integrate project activities within these organizations. Specifically, it is helpful for all implementing agencies to establish at the project preparation stage Project Implementation Teams (PITs) with the right skills mix, adequate experience and qualifications, and clear terms of reference (ToR). NCTIP benefited from this approach, which will be replicated in KTSSP.
(c) Explicit provision of adequate domestic funding for maintenance must be made for project-financed infrastructure to ensure sustainability after project completion. KRB, which collects user RMLF, and manages a Road Fund dedicated to road maintenance, helps to ensure that this occurs.
(d) Sustained project impact depends less on the physical works and more on well-managed and adequately financed executing agencies. The project needs to build capacity in project agencies that are weak; training by Bank staff in Bank procedures is crucial.
(e) Sustained sector dialogue is required to define and implement the necessary policy, institutional, procurement and financial management reforms. Follow-up operations, appropriately timed, are required to bolster the gains from policy and institutional reforms that have been initiated under previous operations and require completion or enhancement.
(f) Project preparation effort and project design need to reflect sustained dialogue between IDA and GoK, and implementation of reporting, auditing and accountability measures should begin early to ensure early detection and remedy of implementation problems.
IV. IMPLEMENTATION
A. Institutional and Implementation Arrangements
44. There will be five implementing agencies for KTSSP: KeNHA, MoR, MoT, KAA and KCAA. About 97 percent of the project will be implemented by parastatals (KeNHA, KAA, and KCAA) with independent Boards outside the central government; the remaining three percent by MoR and MoT. The project will be mainstreamed into the operations of these institutions and form an integral part of their investment program. All PITs will be comprised of regular staff of the implementing agencies. The project will be implemented as follows:
(a) Component A and Sub component B1: KeNHA (b) Sub component B2: MoR (c) Sub component B3: MoT (d) Component C: KAA (e) Component D: KCAA
45. Each implementing agency will appoint a PIT who will be empowered to manage the day-to-day activities of its components of the project. Each PIT will be headed by a Team Leader and will comprise members with the appropriate skills mix and adequate experience and qualifications. The Team Leader will report directly to the Chief Executive Officer (CEO) of
18
KeNHA, KAA and KCAA, or to the Permanent Secretary (PS) of MoR or MoT, as appropriate. The members of all PITs have already been appointed, and the World Bank will be consulted prior to any changes in PIT membership. PIT duties and responsibilities are elaborated in Annex 3. 46. There will be a Project Coordinator (PC) and Project Oversight Committee (POC). The PC, which will report to the PS, MoR, will be responsible for overall project reporting and coordination and will raise any issues that may hamper smooth preparation and implementation to the POC. The PC will be appointed by July 31, 2011. The POC will be responsible for steering, oversight and strategic guidance to project implementation, and will resolve bottlenecks particularly of a policy nature. MoR will be responsible for the appointment of the PC and provide the secretariat. The POC will comprise the PS, MoR; PS, MoT; CEOs of KeNHA, KAA, and KCAA; a representative of the MoF: and the PC. The PS, MoR, will chair the POC. The PC will be the Secretary to the POC (see Annex 3). MoR will have responsibility for driving the project, given that road related activities account for 80 percent of the total project scope. To assist in the restructuring of KCAA, an inter-ministerial taskforce will be formed to steer the process and will report to the POC. B. Results Monitoring and Evaluation
47. The Operational Risk Assessment Framework (ORAF) will provide the basic tool for monitoring project performance, alongside the results framework and monitoring arrangements provided in Annex 3. The main outcome indicators will be the reduction of travel time and transport cost on the Northern Corridor and the Tanzania-Kenya-Sudan road corridor. Baseline information is already available. There are other performance and outcome indicators specifically related to the institutional reforms in the transport sector. 48. Results will be monitored by a team of experts from a public university under a contract with MoR but working in close collaboration with KeNHA, KCAA, KAA and MoT. The government has proposed to engage one of the public universities as the monitoring and evaluation (M&E) consultant. Under NCTIP, the GoK engaged the University of Nairobi (UoN) on a single source basis, with agreement of IDA, and the country has benefited enormously by assigning this task continuously to UoN. In the process of collecting and analyzing data, thirty-three students have utilized the information, produced theses and obtained or almost obtained Masters Degrees—with three among them candidates for Doctorate degrees. This work has helped to build local M&E capacity, provided an opportunity for continuity and sustainability in long-term monitoring of the results and their impact on the economy, and also strengthened the link between academia and the road construction industry—a link which is weak currently. KeNHA, KAA, MoR and KCAA have established M&E and Communications Units in their organizational structures, and these units work closely with UoN. 49. To supplement the M&E work, a Communication Strategy for the project has been prepared (see Annex 3). The execution of the strategy will be facilitated by a Communications Specialist from the Bank office in Nairobi, in conjunction with counterparts from KeNHA, KAA, KCAA, MoR, and MoT. To date, these communications teams have visited project sites, recorded interviews, collected baseline information, and initiated a dialogue with potential
19
beneficiaries. This will help the PITs to build in-house capacity to engage with the public and to design an engagement-feedback mechanism that will regularly disseminate information and progress to the public. C. Sustainability 50. Project implementation is likely to be completed in a timely way. Many lessons have been learned from the on-going NCTIP, which faced numerous problems during implementation, including: teething problems and intensive training requirements of the newly established implementation teams, delayed payments, unexpected Detailed Implementation Review (DIR) by INT, post-election crisis and budgetary constraints. For KTSSP, the stakeholders, including counterpart project teams, have been involved upfront during project identification and preparation. The GoK is expected to provide counterpart funds on time, given the high priority and regional significance of the project’s road segments. The GoK has included the project in its fiscal budget and invested substantial amount of resources in carrying out preparatory work, including the feasibility studies, environmental and social assessments and detailed engineering designs for Bachuma Gate-Maji ya Chumvi and Kisumu-Kakamega-Kitale road sections and rehabilitation of the runway at MIA. 51. The benefits of the project are likely to be sustained in light of the recent reforms in the transport sector, which are showing encouraging results. KeNHA is now responsible for a road network of 13,687 km (nine percent of the network), which includes the KTSSP roads. KAA and the KCAA now retain user charges, which will allow them to continue to maintain the high standard of safety and security required for continuous growth in international air traffic. In addition, the activities of the project are mainstreamed within the operations of the respective organizations, and regular staff will be responsible for the day-to-day project management. The staff will also be trained under the project to ensure continuity and sustainability of project benefits.
V. KEY RISKS Table 8: Risk Matrix
Risk Risk Mitigation Measure To PDO: Elections in 2012 and also a new government could slow down implementation
Most members of the Bank’s task team are based in Nairobi; the team is in close engagement with GoK and will monitor the project and resolve emerging issues quickly. The PDOs and investment priorities have full endorsement of the coalition government and will be entrenched in the legal documents.
KCAA is not able to recruit enough qualified aviation safety inspectors to meet IASA requirements for Category 1 clearance.
Restructuring KCAA and separating service provision from regulatory functions and upgrading its categorization as a regulator will enable KCAA to offer competitive remuneration packages.
To component results: Adequate counterpart funds are not allocated in a timely fashion.
Advance assurance from GoK, followed by quarterly joint reviews with MoF, implementing agencies and the Bank, will help ensure the timely availability of counterpart funds.
Procurement of contracts is not done in a satisfactory manner
Sustained training of implementing-agency staff, and intensive reviews of all steps within the procurement process by Bank
20
Risk Risk Mitigation Measure officials, will mitigate this risk.
Execution of civil works contracts by poorly qualified contractors (and also consultants), leading to construction delays, low quality and cost overruns.
Stringent due diligence of bidders/consultants before contract award, supervision during construction by experienced, internationally qualified and independent consultants, and also extensive implementation support by the project and Bank teams will mitigate this risk.
Bid rigging, collusion and fraud leads to serious loss of value for money and governance issues.
A number of recommendations made under the on-going project for improving governance and integrity in the road sector, together with an action plan to implement these recommendations agreed with GoK, have reduced collusion, fraud and governance risks, particularly: (a) use of post qualification criteria instead of pre-qualification has increased competition (KeNHA obtained respectively 9, 11 and 11 bids for Lot1, Lot2 and Lot3 contracts for the Kisumu – Kitale road section, with lowest bids being lower than the Engineer’s estimates); (b) the bid evaluation report will be subjected to an independent review by a Procurement Specialist; (c) with the help of the Bank’s GAC Squad, a pilot system is being put in place to conduct and build local capacity within selected professional CSOs to conduct independent audits of on-going or recently completed road projects and also undertake road user satisfaction surveys.
Leadership and key staff of the PITs are not maintained throughout the project period.
The GoK has committed at the highest levels to ensure appropriate staffing from the start to the end of the project.
Inability to mobilize additional funds to meet the financing shortfall.
Discussions with potential financiers, incl. AFD and EIB, are underway, and an increase in GoK financing is also under consideration (possibly through a local bond offer).
Delays in enacting the NCA and ERB Laws or approving KCAA restructuring, leading to delays in improved oversight in the sector.
The NCA and ERB Bills are prepared, awaiting Parliamentary deliberations while the proposal to restructure KCAA has been submitted to the GoK for approval. The Bank is monitoring progress closely (in the results matrix)
VI. APPRAISAL SUMMARY
A. Economic and Financial Analysis 52. The various road sections to be rehabilitated or reconstructed under the project have been studied at a detailed design level. The total length of the major roads to be constructed, namely, Kisumu-Kakamega-Kitale, Athi River – Machakos Junction, and Bachuma Gate – Maji ya Chumvi, amount to about 250 km of two lane equivalent highway. The traffic levels range from about 1,200 vpd to over 8,000 vpd with one section (10 km) with nearly 13,000 vpd outside Kisumu requiring the addition of two new lanes. Given that the economic growth in the country has been in the range of five to seven percent per annum in the last five years and expected to grow between five and seven percent per annum in the future, the traffic volumes are likely to grow in the range of seven to ten percent per annum. However, for economic analysis, a more conservative assumption of traffic growth rates between four and ten percent per annum depending on the vehicle type have been assumed for the first ten years and 60 percent of the rates for the next 10 years. Economic feasibility studies have been done for every road section, albeit at different times. The economic rates of return (ERR) vary from about 20 to 63 percent and the estimated net present value (NPV) at a 12 percent discount rate is about US$60 million for road works costing about US$235 million (including supervision) - representing about 50
21
percent of the total project costs (see Annex 7). Sensitivity analysis shows that the ERRs for various road sections are robust, with worst case scenario of a 20 percent increase in costs plus 20 percent reduction in benefits leading to economic rates of return (ERRs) in the range of 15-50 percent and NPV of US$45 million. 53. Investments in the aviation sector are required mainly for rehabilitation of MIA’s runway. The investment cost is estimated at US$60 million, including supervision (representing another about 13 percent of total project costs). Based on the feasibility study updated in 2011, the economic rate of return is about 21 percent and estimated NPV of US$47.7 million at 12 percent discount rate (see Annex 7). Sensitivity analysis with a 25 percent increase in costs and 25 percent decrease in benefits, shows the ERR drop to 15.5 percent and NPV reducing to US$18.9 million. The analysis also shows that even with 25 percent increase in costs, the benefits would have to decrease by more than 45 percent to reduce the NPV to zero. B. Technical 54. The road design standards being applied under the project conform to the latest design practices. The standards and specifications compare well with international practice. Where traffic levels are expected to exceed the generally-accepted capacity of two-lane roads, those sections will be widened to four lanes (this will pertain to roads adjoining major towns such as Kisumu, Kakamega and Nairobi). With respect to the runway rehabilitation and extension, the minimum-acceptable and cost-effective designs have been adopted and brought into conformity to local architectural and building codes after comparing the economics of several options. C. Financial Management
55. A financial management capacity assessment for all proposed implementing agencies has been done. It concluded that the financial management arrangements meet the Bank’s minimum requirements under OP/BP10.02. The overall residual risk rating is moderate (Medium-L) for KAA, KeNHA and KCAA, and substantial (Medium-I) for MoT and MoR. The project will have on-field supervision at least twice a year for components at substantial risk and once a year for components at moderate risk. The financial management action plan (Annex 3) outlines the mitigating measures which, if implemented, would strengthen the financial management arrangements. Accordingly MoT is expected to deploy an additional accountant to the MoT PIT by July 31, 2011. Each PIT will be responsible for the financial management of its respective components under the project, in accordance with guidelines acceptable to IDA. The PITs will oversee the special and project accounts, verify invoices and approve payments. The PITs will also prepare all financial management reports, financial statements, refund reimbursement requests and other relevant documentation as required by its respective management and IDA. The PITs will ensure that the respective agencies’ financial statements are audited as required and that contracting, procurement, disbursement and financial management is carried out and reported efficiently. Documentation supporting project-related disbursement and financial transactions would be maintained by each PIT for inspection by IDA, the GoK, and independent auditors (see Annex 3). 56. Special (Designated) Accounts, Operating Accounts, and Project Accounts: The GoK will establish five US dollar special accounts—one each for KeNHA, KAA, KCAA, MoR
22
and MoT—which will receive the proceeds of the Credit for their respective components. The special accounts would receive the dollar deposits/transfers from the IDA authorized credit account. Separate periodic financial reports will be prepared by each PIT. In addition, five local currency operating accounts would be opened, one each for KeNHA, KAA, KCAA, MoR and MoT. These will form the primary source of finance for project activities and will be managed directly by the respective implementing agencies. As the operating accounts will be denominated in the local currency, requirements for foreign currency payments will be met using the Payment Authority system, under which funds will be remitted by CBK on the instruction of the MoF. The GoK will also open a Project Account in local currency, where advance counterpart funding will be deposited for the specific needs of Component A and Sub-component B1 (managed by KeNHA). KeNHA, KAA and KCAA will be responsible for processing of payments directly through MoF and providing copies of the documentation to their respective parent ministries. 57. Counterpart Funds: The government will cover 25 percent of civil works, and two percent for consulting services and goods acquisition costs. The counterpart requirements will be deposited in the project account quarterly and at the beginning to cover the requirement for that period. The total estimated government contribution, excluding KAA and KCAA contributions, over the five year implementation period is about KES5.7 billion (or an average annual contribution of KES1.14 billion) which means an initial deposit to cover one quarter will amount to about KES285 million.
58. Disbursements: The direct payment method will be used for large contracts. In addition, special commitments and reimbursement methods of disbursements can be used by the project. The transaction-based method will be the mode of payment for the designated accounts. 59. Project Auditing: The Auditor General of the Kenya National Audit Office (KENAO) will be responsible for auditing the entire project including resources of KAA, KeNHA and KCAA on annual basis during the life of the project. 60. Subsidiary Agreements: KAA and KCAA would be required to enter into subsidiary loan agreements for the funds that will be made available to finance airport and civil aviation related activities, in accordance with prevailing government practice. The GoK will make part of the proceeds of the credit available to KeNHA as a grant under a Subsidiary Grant Agreement. 61. Taxes and Duties: In general, the project expenditures are not exempt from payment of value added tax (VAT). However, for fiscal convenience, implementing agencies will be exempt from paying VAT and duties under the project. In case of works and other supply contracts, contractors/suppliers will be eligible for refund of the 16 percent VAT paid on inputs should they have no VAT receipts on outputs, and therefore bidders shall not include VAT as a cost in the bid prices. However, the bid prices will include all other indirect taxes and duties on all materials and services that may be incurred for the matter of the contract, including for supply of goods, either available locally or manufactured or assembled in Kenya, including those originally imported.
62. Retroactive financing: The procurement process is advanced with major road contracts let out for bidding. Bids for three road contracts with an estimated value of US$144 million
23
were received on March 10, 2011. The credit will provide for US$15 million retroactive financing to finance expenditures incurred before signing of the financing agreement (expected by July 31, 2011), but after September 30, 2010. D. Procurement 63. The proposed implementing agencies are currently executing the NCTIP (which has total financing of about US$1.0 billion), and the same PITs of NCTIP will be responsible for the implementation of KTSSP. Procurement Risk Assessment was carried out during appraisal (February 2011) on all the five implementing agencies and the overall procurement risk is rated moderate. The technical staff in the PITs of the five project implementation agencies are qualified and experienced in the procurement procedures of Development Partners. The PITs of KeNHA, KAA, KCAA, MoR and MoT will manage their procurement activities. Procurement plans for the first 18 months have been prepared and reviewed by the World Bank, and these will be updated at least annually. Procurement risk is rated as moderate. A first General Procurement Notice (GPN) for the project was published in the DgMarket website in September 2010; the GPN will be updated annually for any outstanding International Competitive Bidding (ICB) and large consultancy services contracts, as appropriate. Specific Procurement Notices (SPN) for goods and works to be procured under ICB and National Competitive Bidding (NCB) and for consultant services will be advertised in at least one national newspaper of wide circulation and internationally for ICB contracts. The GAP-procurement related aspects will be adopted for the project, such as invitation of bids (works) without prequalification, stringent due diligence of contractors, among others. 64. Procurement will be carried out in accordance with the World Bank’s Guidelines, including particularly, Guidelines: Procurement under IBRD Loans and IDA Credits, dated May 2004 and revised October 2006 and May 2010; and Guidelines: Selection and Employment of Consultants by World Bank Borrowers, dated May 2004 and revised October 2006 and May 2010. In addition, Kenya has a public procurement law, the Public Procurement and Disposal Act of 2005 (PPDA), that governs purchase of works, goods and services using public resources by central government entities, local authorities, state corporations, education institutions, and other government institutions. Under the PPDA, the Public Procurement Oversight Authority (PPOA) has been established in addition to the Procurement Department in the MoF. The PPDA sets out the rules and procedures of public procurement and provides a mechanism for enforcement of the law. Some provisions of PPDA are not fully consistent with the World Bank procurement guidelines and Consultants Guidelines, and therefore these may not be applied for the implementation of this project without the modifications specified in the Financing Agreement (see Annex 3). “Anti-Corruption Guidelines” means the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 and revised in January 2011, shall apply. 65. Procurement methods to be applied to all project goods and works will be specified in the Procurement Plan, including the circumstances under which the methods may be used. The methods will include ICB, Limited International Bidding (LIB), NCB, Shopping, and Direct Contracting. In case of consulting services, the methods will include Quality and Cost Based Selection (QCBS), selection under Fixed Budget, Consultants Qualifications, Least Cost
24
Selection, Single Source Selection, and Selection of Individual Consultants, consistent with procedures provided in paragraphs 5.2 and 5.3 of the Consultant Guidelines. World Bank review of procurement decisions will be provided in the Plan for those contracts that shall be subject to Prior Review. 66. Training: Each of the implementing agencies will prepare and submit to the POC their respective annual training program for financing under the project for endorsement before submitting to the Bank for review and clearance. The program will identify, inter alia: (a) the training envisaged, (b) the personnel to be trained, (c) the selection methods of institutions or individuals conducting such training, (d) the institutions conducting the training (if already selected), (e) the duration of the proposed training, and (f) the cost estimate of the training. Report by the trainee upon completion of training would be mandatory. E. Social (including safeguards)2
67. The project will address the social impacts of resettlement and loss of property, HIV/AIDS transmission along the road corridors, road safety, and overall participation of key stakeholders in this project. Potential social impacts include permanent and/or temporary land acquisition, the disturbance of landscapes and of roadside vendors, and in a very few cases loss of property. The Resettlement Policy Framework (RPF) approved by the World Bank in March 2004 for NCTIP has been updated, to cover the road sections and construction of two office blocks and a hangar at JKIA proposed for financing under KTSSP. The RPF provides and clarifies the key principles underlying mitigation and compensation to those who might be affected adversely by relocation or loss of property due to the road works. In particular, it outlines how project affected persons (PAPs) will be compensated for loss of wages and assets (at replacement costs) and be given the opportunity to share project benefits. All identified cases of relocation enumerated in the Resettlement Action Plan (RAP) will receive assistance on resettlement. Bidding documents for all civil works will be based on the Bank models and will include the necessary provisions for temporary resettlement. All six RAPs associated with the project including for the rehabilitation of Kisumu-Kakamega; Kakamega-Webuye; Webuye-Kitale; Athi River-Machakos Turn off; and Bachuma Gate-Maji Ya Chumvi, and the RPF, have been disclosed to the public, both in country and at the Bank’s InfoShop. 68. In addition to the above measures, the project has a roadside amenities and social and economic enhancement sub component (including HIV/AIDS mitigation) to support improvement of livelihoods of the communities along the road corridors. The sub component will spur social and economic activities that will benefit local communities as well. The project also presents opportunities for local communities to be involved in road works through provision of manual and skilled labor where appropriate, and especially when the construction commences (see Annex 3). 69. The project will also address road safety issues. Road safety is a major concern in Kenya, where road accidents claim a total of nearly 3,000 lives annually. KTSSP will
2 The Safeguard Instruments employed for social safeguard compliance under this project are comprised of: (a) a Resettlement Policy Framework; and (b) the Resettlement Action Plans for the Rehabilitation of Kisumu-Kakamega Road; Rehabilitation of Kakamega-Webuye Road; Rehabilitation of Webuye-Kitale Road; Rehabilitation of Maji ya Chumvi-Bachuma Gate; and the Construction of two new lanes along Athi River and Machakos Turn off Road.
25
complement efforts under NCTIP, where a National Road Safety program has been developed and is under implementation. Under KTSSP, attention will be given to increasing awareness of road safety through information provision along the selected road corridors. Project design will include widening the existing road in critical places to allow for bicycle paths and pedestrian sidewalks to enhance safety in selected areas. F. Environment (including safeguards)3
70. The project is rated category B for environment as most of the project financed activities either have moderate impacts or involve the rehabilitation of existing infrastructure. Potential environmental impacts may include soil erosion and disturbance of water flows, water pollution, traffic disruption, noise, gaseous and dust pollution and disturbance of flora and fauna (see Annex 3). Environmental assessments (EA) for the five road sections and for the rehabilitation of MIA’s runway have been reviewed by the World Bank and found to be acceptable. The Environmental Management Plans (EMPs) consistent with Kenyan law will apply to constructing the proposed office blocks and hangar, since impacts are localized. All EAs and EMPs have been disclosed to the public, both in country and at the Bank’s InfoShop. Any other infrastructure rehabilitation or works that will take place during project implementation that has not already been subjected to an environmental and social impact assessment will be subject to the same safeguard policies and procedures, which include all relevant safeguard instruments to be prepared, approved and disclosed prior to execution of works. KeNHA and KAA have staff with adequate experience and qualification to manage environmental matters associated with their infrastructure rehabilitation components.
71. In the case of road rehabilitation, OP 4.11 (Physical Cultural Resources) is being triggered. Guidelines for “chance finds” procedure will be integrated into the contracts for construction. These include development of a cultural property management plan (CPMP) if physical cultural resources are found.
3 The Safeguard Instruments employed for environmental safeguard compliance under this project are comprised of: (a) The Environmental Impact Assessments for the Rehabilitation of Kisumu-Kakamega Road; Rehabilitation of Kakamega-Webuye Road; Rehabilitation of Webuye-Kitale Road; Rehabilitation of Maji ya Chumvi-Bachuma Gate Road; Rehabilitation of the runway at Moi Airport, Mombasa; Construction of two new lanes along Athi River and Machakos Turnoff Road; and Construction of four Interchanges at Nakuru/Nyahururu, Nakuru/Njoro, Mau Summit/Kisumu and Ahero/Kisii; and (b) the Environmental Management Plans for the Construction of Hangar at JKIA for Air Accident Investigations; Construction of an Office Block at JKIA for KCAA Headquarters; and the Construction at JKIA of an Office Block for road sub-sector institutions including KENHA.
26
Annex 1: Results Framework and Monitor ing
KENYA: Transport Sector Support Project
Results Framework
Project Development Objective (PDO): The Project Development Objectives are to: (a) increase the efficiency of road transport along the Northern Corridor and the Tanzania-Kenya-Sudan road corridor; (b) enhance aviation safety and security to meet international standards; and (c) improve the institutional arrangements and capacity in the transport sector.
PDO Level Results Indicators
Cor
e
Unit of Measure Baseline 2011
Cumulative Target Values Frequency Data Source/
Methodology
Responsibility for Data
Collection
Description (indicator definition
etc.) 2012 2013 2014 2015 2016
Indicator One: Reduction in average travel time from Kisumu to Kitale.
Time in hours 5 5 5 4.5 4 3 Quarterly Quarterly and Annual progress reports/Field survey
Supervision Consultant/ M&E consultant
Indicator Two: Reduction in vehicle operating costs on Kisumu – Kitale road.
Cost per km (US$) for a heavy truck
2 2 2 2 1.75 1.5 Quarterly Quarterly and Annual progress reports/Field survey
Supervision Consultant/ M&E consultant
Indicator Three: Direct beneficiaries: (i) Road users per day (of which female) (ii) Passengers p.a.(MIA) in million (of which female)
Number (thousands) % female Number (million) % female
147 40% 1.1 30%
147 40% 1.1 30%
147 40% 1.1 30%
147 40% 1.2 30%
149 40% 1.3 30%
150 40% 1.4 30%
Quarterly Quarterly and Annual progress reports/Field survey
Supervision Consultant/ M&E consultant
Indicator Four: Kenya meets ICAO standards and recommended practices and KCAA cleared for IASA Category 1 safety status
IASA Category ICAO standards
None No
None None None None CAT1 Yes
Quarterly Quarterly progress reports/FAA, TSA and ICAO inspections
KAA/KCAA
27
Indicator Five: Improved institutional arrangements and capacity in the transport sector 1) NCA established and
functional; 2) Engineer’s Act passed and
effective; 3) Maritime rules and
regulations developed and in use;
4) National Transport Safety Authority established and functional
5) KCAA restructured 6) Maritime Search and Rescue
Unit established 7) Regulatory framework for
railway sub sector developed 8) Search and rescue capability
on L. Victoria enhanced
Yes/no 1) No 2) No 3) No 4) No 5) No 6) No 7) No 8) No
No No No No No No No No
No No Partial No No No No No
Yes Yes Yes No Yes No No No
Yes Yes Yes Yes Yes Yes Yes Yes
Yes Yes Yes Yes Yes Yes Yes Yes
Quarterly Quarterly and Annual progress reports/Field survey
MoR/MoT/ KMA/UoN
Indicator Six: Number of road crashes reduced along Kisumu-Kitale corridor*
Percentage reduction (%)
0 0 0 10 15 20 Annually KeNHA progress report
M&E Consultant
INTERMEDIATE RESULTS
Intermediate Result (Component A): Improved road infrastructure on 231km of selected priority road sections along the Tanzania-Kenya-Sudan and Northern Corridor and junctions
Intermediate Result indicator One: Roads rehabilitated (non-rural)
Km 0.0 0.0 50.0 100.0 147.0 200.0 Annually KeNHA progress
report M&E consultant
Intermediate Result indicator Two: Roads constructed (non-rural)
Km 0.0 0.0 0.0 10.0 20.0 31.0 Annually KeNHA progress
report M&E consultant
Intermediate Result indicator Three: Road length in good and fair condition as a percentage of the total classified network in the project area [non-rural, Northern Corridor (Mombasa – Malaba) 930 km and Tanzania-Kenya-Sudan Corridor (Isebania – Nadapal) 894 km in Kenya)]
Cumulative Percentage (%)
Annually KeNHA progress report
M&E consultant
28
1)Northern Corridor 2) TZ-Kenya-Sudan
1)
2)
60.0
5.0
60.0
5.0
65.0
5.0
75.0
5.0
80.0
5.0
80.0
21.0
Intermediate Result (Component B): Management and governance improved in the local construction and maritime sub sector Intermediate Result indicator One: Draft Bill for NCA and ERB presented to parliament, and rules and regulation for KMA developed
yes/no No Yes Quarterly MoR MoR
Intermediate Result indicator Two: Feasibility and engineering designs studies completed to acceptable standards and covering 1,150 km
Number (7) of design studies of road sections cumulative
No No 2 4 5 7 Quarterly KeNHA KeNHA
Intermediate Result indicator Three: Studies on impact and roles of (new) institutions completed
Number (3) of Study reports cumulative
No
No
1
2
3
3
Quarterly MoR/KRB MoR/KRB Studies on the impact of new constitution on KURA, KeRRA and role of KRB; inventory of unclassified roads; and the roles of MTD, Materials Department and KIHBT completed to acceptable standards
Intermediate Result indicator Four: Marking the boundaries for Right of Way and secure KeNHA’s road assets (Class A roads) -3,500 km completed
Yes/No
No
No
No
No
Yes
Yes
Quarterly MoR/KRB MoR/KRB
Navigational charts for Kenyan Coast developed to acceptable international standards and in use
Yes/No No No No No No Yes
Air accident investigation Yes/No No No No No Yes Yes
29
hangar constructed, equipped and staff trained Intermediate Result (Component C): Improved quality of runway and power supply upgrade at Moi International Airport Intermediate Result indicator One: Area on the runway, aprons and taxiways completed to international standards
Cumulative Percentage (%)
0.0 0.0 15.0 50.0 100.0 100.0 Quarterly KAA KAA
Intermediate Result indicator Two: Electrical cabling for power supply and lighting system at MIA completed and power supply to MIA secured
Cumulative Percentage (%)
0.0 0.0 25.0 65.0 100.0 100.0 Quarterly KAA KAA
Intermediate Result (Component D): Improved operating capacity of KCAA Intermediate Result indicator One: Aviation Safety Inspectors in compliance with ICAO standards and IASA category 1 safety status
Number (consultants) Number (KCAA recruited staff)
1)None 2) None
6 10
6 20
6 38
38
38
Annually KCAA KCAA
Intermediate Result indicator Two: Construction of KCAA Office block
Cumulative Percentage (%)
0.0 5.0 55.0 80.0 100.0 Quarterly KCAA KCAA
* Baseline Data will be collected by M&E Consultant by August 2011 at the start of construction.
30
Annex 2: Detailed Project Descr iption
KENYA: Transport Sector Support Project
I. Project Components 1. The Project Development Objectives are to: (a) increase efficiency of road transport along the Northern Corridor and the Tanzania-Kenya-Sudan road corridor; (b) enhance aviation safety and security to meet international standards; and (c) improve the institutional arrangements and capacity in the transport sector. 2. The selected activities of the project will support: (a) deepening of policy and institutional reforms in the transport sector; (b) enhancing the capacity of institutions providing oversight and regulatory functions to support the delivery of transport services; (c) governance, accountability and integrity improvements in transport sector; and (d) financing infrastructure improvements necessary to support Kenya’s long-term development strategy. The project underpins these policy and institutional reforms and priority investments identified by the government of Kenya (GoK) for implementation. The project will comprise four components:
(a) Component A: Rehabilitation and improvement of roads, roadside facilities and road
safety interventions. (b) Component B: Institutional strengthening and capacity building in the transport sector,
with three sub components: (i) Sub Component B.1: Support to Kenya National Highway Authority (KeNHA),
Kenya Urban Roads Authority (KURA), and Kenya Rural Roads Authority (KeRRA); ;
(ii) Sub component B.2: Support to the Kenya Roads Board (KRB) and Ministry of Roads (MoR); and
(iii) Subcomponent B.3: Support to the Ministry of Transport (MoT). (c) Component C: Support to the Kenya Airports Authority (KAA) (d) Component D: Support to the Kenya Civil Aviation Authority (KCAA)
3. Background on road sub sector components: The road sub sector has undergone significant transformation over the last six years which includes institutional and policy reforms, mobilization of domestic resources for infrastructure and management improvement, separation of policy formulation and financing from execution of programs. These changed circumstances demand that the necessary regulatory and oversight mechanisms are established and strengthened. These changes are recent and close monitoring and support is required to consolidate and deepen these gains. These and other reforms (detailed in Table 1 of the main text) have contributed to the noticeable improvements in the condition of the road network in Kenya including on the major road corridors such as the Northern Corridor. A number of areas remain either incomplete or require support to move to the next level, as discussed below:
(a) The Kenya Roads Board: the creation of the KRB is one of the major changes in the road sub sector. This has been supplemented by:
31
(i) the development of the 15-year Road Sector Investment Program (RSIP) with clear road investment priorities based on economic, social and political considerations. Its implementation would be a major success in the road sector as it is designed to address road transport needs;
(ii) the clear division of responsibilities and ownership of the road network with the creation of KeNHA, KeRRA and KURA – separating policy from execution;
(iii) requiring realistic and prioritized work programs from road authorities, based on the RSIP;
(iv) monitoring financial and technical compliance through external auditing; and (v) ensuring transparency through the publication of all work programs and audit
reports.
(b) Assured Road Maintenance Funding from the Road Maintenance Levy Fund (RMLF): the level and regular flow of road maintenance funding in Kenya is a major achievement. While the present level of funding may not be sufficient to meet all maintenance needs, the equivalent of US$300 million annually should provide the basis for meeting most of the maintenance requirements of the network, if targeted appropriately, especially if there is additional substantial funding for the rehabilitation of the network.
(c) Decentralization of Funds, Decision Making and Implementation: the role and composition of Constituency Roads Committees (CRCs) may not be ideal, but they have introduced an important level of local decision making, monitoring and accountability for local roads which was clearly lacking. Like the KRB, the CRCs have the potential to play a key role in the revitalization of the sector at the local level. However, unless CRCs’ responsibilities and perceived ownership can be better aligned, critical constraints and discontinuities will become increasingly evident and prevent the introduction and implementation of RSIP. Nevertheless, one major advantage of incorporating Members of Parliament into the system, through the CRCs, is that it has created a powerful constituency to ensure that the level and flow of fuel levy funds is not disturbed by financial problems elsewhere in the public sector. The expectation is that with the new constitution and devolution of power to the counties, this will significantly improve.
(d) Rural Roads Strategy and Labor Based Technology: Kenya adopted the Roads 2000
approach for the rehabilitation and maintenance of the rural road network over 10 years ago. This is an eminently rational response to the needs of the rural sector within Kenya’s financial constraints and resource endowment. It adopts a network approach, at relatively low cost, to providing the roads required for agricultural development and access for the rural population to social and economic infrastructure as well as income generating opportunities. Moreover, the approach has the potential directly to generate substantial levels of paid employment in areas where income earning possibilities are limited. The creation of KeRRA has seen more emphasis placed on the implementation of this strategy than before. Labor-based road works need not, however, be confined to the rural environment. The hand pitching of stones as the base course on urban roads has proved extremely successful in Nairobi.
32
(e) The stock of Engineers in both Public and Private Sectors: Kenya has a stock of engineers who are as well qualified and experienced as those to be found anywhere else. The engineers know what should be done and what they should be doing. However, for some time now, there has been inadequate training. Further training may help introduce new ideas regarding road management, contract formulation and control, complemented by re-oriented systems, incentives and sanctions.
(f) Significant Construction and Consulting Sectors: Unlike its neighbors, Kenya has
significant local construction and consulting sectors able to undertake substantial engineering works. Performance by the local industry can be extremely good and equivalent to that by any international contractor or consultant. Similarly, at the local level, there is no significant shortage, in most districts, of small contractors willing to undertake road works, nor does there appear to be any difficulty in sourcing equipment from the private sector when required. Kenya has a relatively large and dynamic private sector which has demonstrated its ability to respond positively to new opportunities. These elements could form the basis for not only much greater involvement of the private sector in the management and maintenance of the assets in the transport sector, at both the national and local levels but also justifying the need for a strong and effective regulatory and oversight framework.
(g) Axle-Load Control: Kenya has demonstrated that axle-load control can be effective,
and an immediate reduction in overloading was achieved when four axle configuration trucks were banned from Kenyan roads. Empowering the user to participate in ensuring non-discriminatory control would be a major step and prove very effective. Enforcement is by no means perfect, and monitoring by the private sector should be deepened as there are signs that most of the gross overloading has been reduced with the involvement of private sector operators in the management of four weighbridges.
(h) Inadequate Capital Funding: The fuel levy provides a reasonable flow of funds but, quite visibly to any road user, major capital funding is also required to rehabilitate or reconstruct large parts of a deteriorated road network. The volume of major capital works declined during the late 1980s and 1990s partly because available funding from external sources declined significantly. During this period, there was minimal capital funding, the Fuel Levy was practically the sole source for all road activities - both capital and recurrent. The consequences of this lack of capital funding were:
(i) funds were diverted from recurrent to capital works, thus providing inadequate funding for maintenance with consequent additional capital requirements in the future; and
(ii) funds diverted for capital works were inadequate for full remedial works and the interventions therefore insufficient to remedy the underlying structural defects. Under this scenario, often the objective is to hold the road together until more substantial funding is available. Though rational under the circumstances, the benefits of the interventions are relatively short-lived and achieved at high cost.
33
(i) Road Sector Investment Plan (RISP): The project will support the implementation of the RSIP. The RSIP contains a list of priority key roads identified on the basis of economic and social justification for improvement, rehabilitation and maintenance. According to the program, about US$6.7 billion is required over the next five years out of which GoK is committed to provide about US$5 billion and the balance arranged from external or alternative local sources. Priority setting is a major step forward and will ensure that the core and strategic network receives attention over less non-core roads. This will be a major shift in allocating resources in the road sub sector. It will restore and mainstream the planning and setting of priorities for the use of scarce resources available in the sub sector. It will also support the implementation of the Kenya Roads Act (2007).
(j) Absence of Management and Planning Systems: It is evident that all management information and planning systems have been inadequate, in some of the agencies. In the past, systems have been established but they were not functioning well. Perhaps they were overwhelmed over time as the network grew. Timely production of management and other reports is still a challenge. Management information systems are required for systematic management and monitoring. With the adoption of the RSIP and steady flow of funds from KRB, forward maintenance management is inevitable. A reactive firefighting approach to management of the sub sector has to be eliminated consistent with the Kenya Roads Act (2007). The KRB is required, under the Act, to monitor the use of the RMLF while the road authorities need to implement detailed workplans. This will necessarily require a reliable and efficient management and information system. Such a system must encompass KRB, MoR, and other road institutions.
(k) Inadequate Financial Control: The adoption of RSIP will also help address instances
where works were initiated without sufficient regard for the level of funding available. The delays in payments to contractors, downtime of equipment, suspension of works, interest charges witnessed in the past is gradually being addressed by embracing adequate financial systems. Otherwise, without such controls, there will be no safeguard against a repetition of the over-commitment. However, this is not unique to the road sub sector but it covers overall government budget administration.
(l) Perceptions in Kenya regarding the construction industry and level of Supervision:
The perception of the public regarding the performance of the road sub sector has improved significantly lately. In the past, there has been a widespread perception within Kenya that the road problem is not a shortage of funds alone but also a problem of contractors and engineers not adhering to professionalism on contracts. Complaints were abundant about roads failing well before their expected design life and poorly performing contractors continuing to be awarded contracts with no-one being held accountable for inadequate supervision. It is extremely difficult to gauge precisely the extent of poor performance, malpractice and corrupt practice in the sector. Not all road failures can be attributed to the contractors and supervising engineers, poor designs have also played a part. Inadequate and ineffective supervision cannot only be attributed to engineers in the public sector, there are plenty of reports regarding poorly performing consultants. The real issues lie in accountability. It is expected that with the establishment of the NCA and strengthening of ERB under the project this challenge will be addressed.
34
(m) Non-Enforcement of Traffic Regulations: the enforcement of axle-load regulations may be having an impact, but the effective enforcement of other traffic regulations needs improvement. There are a number of traffic enforcement agents but insignificant traffic enforcement is evident. With no effective enforcement of vehicle condition standards, vehicle speeds, or observing other traffic regulations, the high number of road fatalities and injuries annually is inevitable. Road safety issues are a major concern in Kenya with over 3,000 deaths annually. Attention should be given to increasing awareness of road safety through information provision and education of adults as well as children along the selected road corridors, including widening of the existing road in critical places to allow for bicycle paths and pedestrian sidewalks to enhance safety.
(n) Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome
(HIV/AIDS) presents a major social issue in Kenya today, and all interventions are carried out within the framework of the National Kenya Government HIV/AIDS Strategic Plan under the National HIV/AIDS Control Council. In case of road transport, the specific interventions target the road users and the local communities along the corridors who are in constant danger particularly in the rest stop areas. These among other interventions will be incorporated under the project.
4. On the basis of this background, the details of the road sub sector components are: Component A: Rehabilitation and Improvement of roads, roadside facilities and road safety Interventions (Total US$264.85 million of which IDA US$201.44 million) 5. The selected road sections are amongst the top priorities in the RSIP. The Kisumu-Kakamega-Webuye road section traverses the Western Region in Kenya which borders Tanzania to the south, Uganda to the west and Sudan and Ethiopia to the north. This road section cuts across, the former Nyanza and Western and parts of the Rift Valley provinces. Western Kenya includes the most populous parts of Kenya. These three former provinces have a population of about 20 million according to the 2009 Census. The region is endowed with great potential in agriculture, fisheries and water related resources, and tourism - but has recorded only modest economic growth over the last 20 years. It remains one of the poorest and least integrated regions of Kenya. The main road network in the region is in poor condition. Movement of goods and people is constrained by the poor condition of the roads. The primary road corridor in Western Kenya runs from Isebania (on Kenya-Tanzania border in the south) through Kisii, Kisumu, Kakamega, Webuye, Kitale and Lodwar to Nadapal on the Kenya-Sudan border in the north. This road section is part of the East African Road Network Corridor (Corridor No.3) that runs from Mwanza in Tanzania, around Lake Victoria through Kisumu, Kakamega, Kitale and Nadapal to Juba in South Sudan. Improvement of this road corridor has been identified also as a high priority by the East Africa Community. 6. Most of this road corridor (95 percent) is in poor condition with the section between Kisumu and Kitale in a situation of total disrepair. Kisumu is an inland port and also the main industrial town in the region. Manufactured goods from the few industrial towns in the region e.g. Kisumu and Eldoret, though mainly sold in the local market, are also exported to Uganda, Northern Tanzania and Southern Sudan. The road links between Kisumu and other major towns
35
in the region including Kakamega, Kisii, Webuye, Eldoret, Kitale and Busia among others, are also in poor condition which has impeded access to intra and inter regional markets and resulted in the under development of this region. Due to the poor state of the road, it takes over five hours to travel from Kisumu to Kitale, a distance of about 147 km.
7. The GoK is carrying out improvements on the Northern Corridor road with the support of the European Union (EU), Nordic Development Fund and the World Bank. Most of the corridor is now in good condition except for a few sections some of them including Maji ya Chumvi-Bachuma Gate, construction of second carriageway between Athi River-Machakos Turnoff (are proposed for inclusion under this project). In addition traffic levels on some sections of the corridor have increased dramatically and their improvement is imperative. Some junctions have become a major bottleneck to the flow of traffic and worsened road safety standards and requires attention Photos: Sections of the Kisumu-Kakamega-Webuye-Kitale road are full of potholes and shoulders have been completely worn out, making motoring dangerous and a nightmare.
8. This component will comprise:
(a) Rehabilitating the Kisumu-Kitale section (147 km of which 10 km is to have a dual carriageway) of the Tanzania-Kenya-Sudan road corridor by strengthening and widening the carriageway and constructing service roads and non-motorized traffic facilities at market centers to improve road safety;
(b) Constructing a second carriageway on Athi River-Machakos road section (21 km) on the Northern Corridor as well as service roads (originally to be done under NCTIP but dropped due to inadequate funds and later shifted under the proposed Nairobi Urban Toll, which did not materialize);
(c) Rehabilitating the Maji ya Chumvi–Bachuma Gate road section (53 km) on the Northern Corridor, including strengthening and widening of the existing road carriageway, provision of service roads and non-motorized traffic facilities;
(d) Constructing the four interchanges at Nakuru-Nyahururu turnoff; Nakuru-Njoro turnoff; Mau Summit-Kisumu turnoff and Ahero-Kisii Turnoff; and
(e) Supervising the construction works.
9. The rehabilitation works will include: (a) widening of the road carriageway to seven meters with two meters wide shoulders on both sides, including climbing lanes in those sections
36
of the road that have hilly terrain; (b) construction of facilities for socio-economic enhancement and roadside amenities including lorry and bus parking, seasonal markets, and road-user services; (c) enhancement of road safety through improvement of hazardous locations and major junctions, traffic calming measures, pedestrian crossings, and so forth; (d) provision of measures to address HIV/AIDS; and (e) access roads to public facilities. Component B: Institutional strengthening and capacity building in the transport sector. (Total US$69.70 million of which IDA US$62.48 million) 10. Major reforms have been witnessed in the management and delivery of road infrastructure in the country. For instance, the policy and institutional reforms have resulted in more clarity with regard to ownership of the road network. In addition, there is a separation of policy formulation from execution of works, which was lacking. There is now greater attention paid to all the three categories of roads (national, rural and urban). As reported in the newspapers, the public for once, has commended the improvement of roads being seen in the country. 11. The challenge is to strengthen the capacities of the newly established road authorities (KeNHA, KURA and KeRRA) and support the establishment and capacity building of NCA and ERB that will provide the much needed oversight in the Kenyan construction industry. Furthermore, devolution of power to counties is likely to have an impact on how the ownership of the three categories of roads namely, national, rural and urban will be distributed. Most likely KeNHA, in charge of national roads, will remain a national body under Ministry of Roads, while KRB, will also remain a national body with the overall responsibility of managing the RMLF. The study on the role of the MoR and its institutions in the new constitution dispensation, under the project, will recommend in which ministry(ies) KURA, and KeRRA will fall. 12. Similarly, the Kenya Maritime Authority (KMA) has been established recently. The Northern Corridor Transport Improvement Project (NCTIP) supported part of the startup activities including consulting services in the drafting of the rules and regulations for its oversight function particularly those related to the Shipping Merchant Act of the International Maritime Organization (IMO) and International Ship and Port Facility Security code (ISPS). The KMA now enters a critical stage of exercising its mandate which requires that it be well equipped and enhanced in its capacity to carry out its mandate.
13. This component will comprise three sub components:
Sub Component B-1: Support to KeNHA, KURA and KeRRA (Total US$41.70 million of which IDA US$36.47 million) involving:
(a) Strengthening of various institutions including KeNHA, KURA and KeRRA, through acquisition of equipment, vehicles, modernization of management information systems, financial planning, contract management and related operational capacities, to enhance delivery of services;
(b) Training of road-sector manpower, particularly in areas related to management information systems and private sector participation in service delivery;
37
(c) Construction of a single office block for the headquarters of road sub sector institutions including KeNHA, KeRRA, KURA, ERB, KRB and the proposed NCA and provision of services to supervise the construction works;
(d) Carrying out feasibility and detailed engineering designs and studies for developing and managing the road network, including particularly: (i) the Mombasa Western By-pass; (ii) conversion of the Northern Corridor Road into a multi-lane facility; (iii) the Nakuru-Loruk-Marich Pass; (iv) the Lake Victoria ring-road; (v) the Ahero-Kisii-Isebania road-segment; (vi) the Nakuru-Nyahururu-Nyeri road segment; (vii) the Kisian-Busia road segment; and (viii) Malindi-Garsen-Madogo-Garissa road segment; and
(e) Marking the boundaries of the right of way to secure KeNHA’s road assets. Sub component B-2: Support to the KRB and MoR (Total US$8.90 million of which IDA US$8.54 million). This will involve:
(a) Study of the impact of the new constitution on the responsibilities and functioning of KeNHA, KeRRA and KURA and the role of KRB;
(b) Support to enhance the operational capacities of NCA and ERB; (c) Study of the role of MoR and provision of technical assistance to implement its new
functions and strengthen the Material Department, Mechanical Transport Department and Kenya Institute of Highways and Buildings Technology (KIHBT) and External Resources Department of the Ministry of Finance;
(d) Inventory of unclassified roads (typically less than nine meters corridor) and recommendations for their maintenance and management;
(e) Conducting monitoring and evaluation of the performance of the Project and sector coordination; and
(f) Training of manpower in KRB, ERD, State Law Office, and MoR.
Subcomponent B-3: Support to the Ministry of Transport (MoT) (Total US$19.10 million of which IDA US$17.47 million). This comprises:
(a) Support the implementation the new integrated national transport sector policy, including the: (i) Setting up of the National Transport and Safety Authority and support for the National Road Safety Program; (ii) setting up of Nairobi Metropolitan Transport Authority; (iii) establishing the legal and regulatory framework for Railways; and (iv) setting up the Maritime Search and Rescue Unit;
(b) Support to strengthen the oversight functions in the maritime sub-sector; (c) Strengthening of air accident investigation capacity, including construction of a hangar at
JKIA and provision of services to supervise the construction works; (d) Develop navigation charts for the Kenyan Coastline and enhance the search and rescue
capability of Kenya on Lake Victoria; (e) Improve the maritime training facilities at the Port of Kisumu; (f) Transport sector studies, including, among others, the development of an urban transport
sector strategy; and a study on the development of air transport services at the county and regional levels, including a network of viable air strips; and participation of the private sector in the management of the port of Kisumu; and
(g) Training of manpower in MoT.
38
Component C: Support to the Kenya Airports Authority (Total US$120.14 million of which IDA US$15.04 million) 14. The aviation sub sector has recorded major growth over the last eight years. For instance, in 2002 about 4.5 million passengers were handled at Kenyan airports; this figure rose to 6.9 million in 2009, an increase of about 53 percent. In terms of profitability, KAA has moved from loss to profit making partly due to the decision to allow the Authority to retain the revenue generated instead of remitting the collections to the Exchequer as before. For instance, in 2002, KAA recorded a loss of KES630 million compared to a profit of about KES1.8 billion in 2007, which reduced to KES990 million in 2009 due to the impact of the post elections crisis and the global financial downturn. 15. The enhancement of aviation safety and security, and expansion of major airports under the NCTIP assistance has been critical to the rapidly growing aviation industry, and the attainment, by KAA, of the United States clearance by Transport Security Administration (TSA) for direct flights to/from US airports. The assistance provided so far has supported the growth of the Kenya’s horticultural industry, tourism industry and the national airline, Kenya Airways, which has contributed to transforming JKIA into a hub serving the entire African continent. The expansion of Kisumu airport, originally envisaged under NCTIP to serve the domestic market, has now been transformed to serve as an international airport. Some airlines have commenced operations from the airport to overseas destinations (Jetlink now operates flights from Kisumu to Mwanza, Tanzania), while others have shown interest to follow suit shortly. Furthermore, experience has shown that further support is required to restructure KCAA for it to be able to attain International Aviation Safety clearance. Otherwise, further support without separating the service provision function from the oversight function is unlikely to yield expected results. 16. The runway at Moi International Airport (MIA) is in poor condition, while the power supply to the airport requires upgrading. The airport often experiences power outages leading to cancellation of flights to the airport. The poor state of the runway requires immediate rehabilitation otherwise it will soon become a major bottleneck to the tourism industry. MIA is the second most important airport in Kenya after Jomo Kenyatta International Airport (JKIA). It handled 980,000 passengers in 2004, the number increased to 1.1 million in 2009. Furthermore, it receives about 60 percent of tourist traffic in Kenya. Therefore, investments to rehabilitate the runway and upgrade the power supply are critical to the Kenyan economy. 17. The Authority has to respond and meet the needs of the growing industry. However, KAA is experiencing infrastructural capacity constraints in addition to deterioration of the existing infrastructure at major airports. Capacity expansion at both JKIA and Kisumu airport are going on with the support of European Investment Bank, French Development Agency, the World Bank and KAA’s own internally generated revenues under the NCTIP. However, the rapid increase in traffic levels is exerting further pressure on the planned expansion. For instance, parking space for aircrafts has been increased by 50 percent at JKIA under the NCTIP, yet more parking spaces are required to cater for the expansion plans of Kenya Airways, the interests of other airlines that intend to start their operations at JKIA, and the growing horticultural and related traffic. Meanwhile the basic infrastructure at the major airports managed by KAA requires improvements. The runway at MIA, Mombasa is in a poor state and
39
requires rehabilitation. Rehabilitation of the runway will support the tourism industry which is the main economic activity in the Coastal region of Kenya. 18. Hence, this component will comprise the following:
(a) Rehabilitation of MIA’s runway, taxiways and apron, and modernization of its airfield
ground lighting systems; (b) Upgrading and modernizing power supply to MIA, and connection to KCAA facilities
and equipment; (c) Provision of a new baggage-handling system at JKIA; (d) Capacity building and training of manpower in safety, security and airports management; (e) Augmenting water supply to JKIA and MIA; and (f) Supervision of construction works.
19. Rehabilitation of MIA’s runway, taxiways and apron will involve milling the top 50 mm and laying a uniform 50 mm thick new asphalt concrete wearing course on the runway, apron and taxiways; and modernization of the airfield ground lighting systems. Component D: Support to the Kenya Civil Aviation Authority (Total US$23.07 million of which IDA US$ 21.05 million). 20. The aviation sub sector continues to grow with the number of registered aircrafts, licensed pilots, Aircraft Maintenance Organizations and other civil aviation activities in Kenya increasing each year, which creates both opportunities and also poses challenges to KCAA. For instance, the total number of aircraft registered in Kenya increased from 757 in 2002 to 1,015 in 2009 (or 34 percent increase) while in case of personnel licenses (pilots), the increase was from 1,740 in 2003 to 5,543 in 2009, recording a dramatic increase of over 218 percent. 21. In terms of financial viability, KCAA recorded a net income of KES384 million in 2002. This reduced to KES 197 million in 2009, due to the rapid growth in operating costs compared to revenues. As part of the reforms in the transport sector, KCAA has been allowed by GoK to retain the revenue generated and not to remit to the Exchequer as was the case in the past. The revenues being collected currently are insufficient to meet its growing needs. The charges are relatively low, and among the lowest in the region. KCAA has submitted a proposal to MoT recommending a revision of the charges upwards, without compromising the competiveness of Kenya as an aviation hub.
22. The KCAA has its headquarter offices located in KAA’s premises, which is not consistent with the International Civil Aviation Organization’s (ICAO’s) requirements for an autonomous regulator. A new office block is required for KCAA. However, because of the low charges, KCAA is not getting adequate revenues to cover these costs, hence the support is required. 23. As regards delivery of service, the oversight and regulatory functions require strengthening. The main challenge for KCAA is to provide effective oversight of the civil aviation sector, which currently it is not in a position to do because of its inability to recruit and
40
retain qualified and experienced flight safety inspection personnel due to comparatively low remuneration packages it offers for this cadre of staff. Furthermore, KCAA is faced with a number of potential areas of conflict of interest that require to be addressed immediately to allow it to function truly as an autonomous regulator. This includes: (a) separation of the location of its headquarter offices outside the KAA’s premises, which it also regulates; and (b) separation of its responsibility to regulate air navigation services and East African School of Aviation from its responsibility to provide the same services. 24. To address these issues, KCAA Board has approved restructuring of the Authority. The restructuring involves: (a) immediate internal corporate restructuring of KCAA to create incentives for efficiency; (b) enhancement of remuneration to attract experienced and qualified flight safety inspectors; (c) retrenchment of about 200 non-core staff; and (d) preparing KCAA for eventual (one to two years) separation of service provision function from regulatory and oversight functions. KTSSP will support some of these efforts. Strengthening the regulatory function requires immediate attention. There is inadequate aviation safety and security oversight capacity. The oversight function requires 79 flight safety and operation licensing specialists while KCAA has 41, hence a shortfall of 38 specialists. This poses a serious threat to the growth and existence of the entire aviation industry in Kenya. 25. This component will involve the following:
(a) Provision of technical assistance for aviation safety and oversight capacity building; (b) Technical assistance to support the restructuring of KCAA and separation of its
regulatory responsibilities from its service provision functions; (c) Construction of an office block for KCAA headquarters at JKIA and provision of
services to supervise the construction works; (d) Upgrading the Information and Communications Technology (ICT) facilities; (e) Provision of equipment to upgrade and modernize air navigation systems; and (f) Training of manpower in safety, security and oversight in the civil aviation industry.
41
Table 1: Preliminary Costs (including contingencies) and Financing
Category Base Cost
Contin-gencies Total IDA GoK AFD*
A. Rehabilitation and Improvement of Roads, roadside facilities and road safety.1. Kisumu-Kakamega (47km of which 10 km is dual) Works 51.93 9.52 61.45 46.09 15.362. Kakamega-Webuye (40km) Works 29.24 5.36 34.60 25.95 8.653. Webuye-Kitale (60km) Works 39.72 7.29 47.00 35.25 11.754. Athi-River-Machakos Turnoff (21km) Works 24.51 4.50 29.00 21.75 7.255. Maji ya Chumvi - Bachuma Gate (53km) Works 42.25 7.75 50.00 37.50 12.506. Interchanges - - (a) Nakuru-Njoro Turnoff Works 4.23 0.78 5.00 3.75 1.25(b) Nakuru-Nyahururu Turnoff Works 4.23 0.78 5.00 3.75 1.25(c) Mau Summit-Kericho Turnoff Works 4.23 0.78 5.00 3.75 1.25(d) Ahero-Kisii Turnoff Works 4.23 0.78 5.00 3.75 1.257. Roadside amenities and Road safety Works 8.96 1.64 10.60 7.95 2.65
213.49 39.16 252.65 189.49 63.168. Supervision of works(a) Kisumu-Webuye-Kitale (147km) Cons 6.44 0.56 7.00 6.86 0.14(b) Athi-River-Machakos Turnoff (21km) Cons 1.38 0.12 1.50 1.47 0.03(c) Maji ya Chumvi - Bachuma Gate (53km) Cons 2.30 0.20 2.50 2.45 0.05(d) Interchanges (No. 4) Cons 1.10 0.10 1.20 1.18 0.02
11.22 0.98 12.20 11.96 0.24224.71 40.14 264.85 201.44 63.41
B1. Institutional Strengthening and Capacity Building in the Road Sub Sector.1. HQ Complex for Road subsector Institutions Works 12.68 2.33 15.00 11.25 3.752. Supervision of works Cons 0.92 0.08 1.00 0.98 0.02
Cons 13.80 1.20 15.00 14.70 0.30
Cons 4.60 0.40 5.00 4.90 0.10
Cons 1.10 0.10 1.20 1.18 0.026. Purchase of equipment, goods and vehicles Goods 1.84 0.16 2.00 1.96 0.047. Capacity building and Training of staff in KeNHA Training 1.38 0.12 1.50 1.50 0.008. Operating costs Op 1.00 - 1.00 0.00 1.00
37.32 4.38 41.70 36.47 5.23262.03 44.52 306.55 237.91 68.64
Cost Est& Financing Plan (US$M)Component
Sub total for sub component B1Sub total Componets (A&B1) - KeNHA
5. Marking boundaries for RoW and Securing KeNHA's road assets
Sub total
Sub totalTotal for component A
3. Feasibility and Design Studies and TA (a) Isebania-Kisii-Ahero (b) Nakuru-Nyahururu-Nyeri (c) Mombasa Western Bypass (d) Lake Victoria Ring Road (e) Nakuru-Loruk-Marich Pass (f) Kisian - Busia (g) Mapping of entire Northern Corridor from Msa - Malaba and formulation of bid documents for concessioning of selected sections (h) Malindi-Madogo-Garissa4. Institutional strengthening/TA - Strengthening the capacity of KeNHA, KURA and KeRRA
42
Category Base Cost
Contin-gencies Total IDA GoK AFD*
B2. Support to the Kenya Roads Board and MoR
Cons 0.46 0.04 0.50 0.49 0.01
Cons 1.84 0.16 2.00 1.96 0.043. Inventory of unclassified roads (KRB) Cons 2.76 0.24 3.00 2.94 0.06
Train/Goods 0.46 0.04 0.50 0.49 0.01
5.Project monitoring and sector coordination (MoR) Cons 2.02 0.18 2.20 2.16 0.046. Training and capacity building (KRB, MoR) Training 0.46 0.04 0.50 0.50 0.007. Operating costs Op 0.20 - 0.20 0.00 0.20
8.20 0.70 8.90 8.54 0.36270.24 45.21 315.45 246.45 69.00
B3. Support to the Ministry of Transport
Cons 1.84 0.16 2.00 1.96 0.04
Cons 1.84 0.16 2.00 1.96 0.04
3. Strengthening maritime oversight function Cons/Goods 1.38 0.12 1.50 1.47 0.03
Goods 1.84 0.16 2.00 1.96 0.04
Works 0.42 0.08 0.50 0.38 0.13
Cons/Goods 1.38 0.12 1.50 1.47 0.03
Cons 1.84 0.16 2.00 1.96 0.04
Works 3.89 0.71 4.60 3.45 1.15
9. Supervision of works (hangar) Cons 0.64 0.06 0.70 0.69 0.01
10. Equipment for hangar Goods 1.20 0.10 1.30 1.27 0.03
Training 0.83 0.07 0.90 0.90 0.00
12. Operating Costs Op 0.10 - 0.10 0.00 0.10
17.20 1.90 19.10 17.47 1.64
6. Provision of equipment and training staff for Marine Training at Kisumu
Component
1. Technical Assistance to support implementation of National Integrated Transport Sector Policy, including: (a) Setting up of the National Transport and Safety Authority and support for the National Road Safety Program; (b) setting up of Nairobi Metropolitan Transport Authority; (c) establishing the legal and regulatory framework for Railways; and (d) setting up the Maritime Search and Rescue Unit.
Sub total for sub component B2 - MoR
Cost Est& Financing Plan (US$M)
Sub total for sub component B3 - MoT
2. Transport sector studies, including, among others, the development of an urban transport sector strategy; and a study on the development of air transport services at the county and regional levels, including a network of viable air strips; and PPP in management of the port of Kisumu.
Roads sub sector Componets total(A, B1 & B2)
2.Study on the role of MoR and MTD, Materials Branch & KIHBT plus TA
1. Study on impact of new constitution on the role of KRB, KeRRA and KURA
7. Development of Navigation Charts for Kenya's Coastline 8. Strengthen Air Accident Investigation Capacity (Construct Hangar and fence)
11. Training and capacity building (MoT) including Air Accident Investigations Dept
4. Training & capacity building -ERD &State Law Office
4. Development of search and rescue capability at Lake Victoria5. Rehabilitation of Marine Training Facilities at Kisumu
43
Financing Proportions IDA GOK Civil works* 75% 25% Consulting services** 98% 2% Goods/Equipment*** 98% 2% Training 100% 0%
*Except for the rehabilitation of the runway at Moi International airport which is 20% **Estimated on the basis of IDA financing 100% of foreign and 94% of local expenditures ***Estimated on the basis of IDA financing 100% of foreign and 90% of local expenditures
Category Base Cost
Contin-gencies Total IDA GoK AFD*
C. Support to the Kenya Airports Authority 1. Rehab. of runway at Moi Inter. Air. incl. Airfield Groun Works 47.32 8.68 56.00 11.10 0.00 44.902. Supervision of rehabilitatin works Cons 2.76 0.24 3.00 2.94 0.063. Power supply up-grade Moi Inter. Airport Mombasa Works 10.14 1.86 12.00 0.00 0.00 12.004. Supervision of power up-gradeworks Cons 1.49 0.13 1.62 0.00 0.00 1.625. Baggage Handling System at JKIA Goods 34.04 2.96 37.00 0.00 0.00 37.00
Cons 1.36 0.12 1.48 0.00 0.00 1.487. Augment Water supply to JKIA Works 4.23 0.78 5.00 0.00 5.008. Augment water supply to MIA Works 1.69 0.31 2.00 0.00 2.009. Design & supervision of water supply & reticulation a Cons 0.50 0.04 0.54 0.00 0.00 0.5410. Training and capacity building Training 0.92 0.08 1.00 1.00 0.0011. Operating costs Op 0.50 - 0.50 0.00 0.50
104.94 15.20 120.14 15.04 7.56 97.54D. Support to the Kenya Civil Aviation Authority 1. TA for aviation oversight capacity Cons 2.58 0.22 2.80 2.74 0.062. Construction of KCAA Headquarters Works 5.07 0.93 6.00 4.50 1.503. Construction Supervision of KCAA Headquarters Cons 0.46 0.04 0.50 0.49 0.014. Equipment for upgrading Air Navigation systems Goods 10.86 0.94 11.80 11.56 0.245. ICT upgrade Goods 0.71 0.06 0.77 0.75 0.026. Training and capacity building (KCAA) Training 0.92 0.08 1.00 1.00 0.007. Operating costs Op 0.20 - 0.20 0.00 0.20
20.79 2.28 23.07 21.05 2.02Grand Total Compponets (A, B, C, D) 413.17 64.59 477.76 300.00 80.22 97.54*AFD has confirmed to co-finance the project while EIB has also expressed interest.
Cost Est& Financing Plan (US$M)Component
Total for component C - KAA
Total for component D - KCAA
6. Supervision of installation of Baggage Handling system
44
Annex 3: Implementation Arrangements
KENYA: Transport Sector Support Project Institutional and implementation arrangements for Project administration mechanisms
A. Project Administration Mechanisms 1. The Kenya National Highway Authority (KeNHA), the Ministry of Roads (MoR), the Ministry of Transport (MoT), the Kenya Airports Authority (KAA) and the Kenya Civil Aviation Authority (KCAA) will be responsible for implementing the project. KeNHA is responsible for the management of all national roads in Kenya; KAA is responsible for airports, KCAA is responsible for the provision of air navigation services and safety; and MoR is responsible for policy and technical standards pertaining to roads sub sector issues; and MoT is responsible for other transport matters. The project covers two sub sectors, roads and aviation. The roads related activities will be implemented by MoR and KeNHA while the aviation sub sector activities will be implemented by MoT, KAA and KCAA. A significant scope of the project covers the road sub sector comprising mainly of road rehabilitation. KeNHA, KAA, and KCAA, parastatals with independent Boards of Directors outside the central government, will implement 97 percent (in terms of cost) of the project and the balance (three percent) will be implemented by MoR and MoT. 2. The project will be mainstreamed within the operations of these institutions, and form an integral part of their investment program. All Project Implementation Teams (PITs) will comprise regular staff of the implementing agencies. The project will be implemented as follows:
(a) Component A, Rehabilitation and improvement of roads, roadside facilities and road safety Interventions, and Sub component B1, Institutional strengthening and capacity building in the road subsector – KeNHA
(b) Sub component B2, Support to the Kenya Roads Board and Ministry of Roads – MoR (c) Sub component B3, Support to the Ministry of Transport – MoT (d) Component C, Support to the Kenya Airports Authority – KAA; and (e) Component D, Support to the Kenya Civil Aviation Authority - KCAA
3. Each implementing agency (IA) will appoint a PIT empowered to manage the day-to-day activities of their respective components of the project. Each PIT will be headed by a Team Leader and will comprise members with adequate experience and qualifications and appropriate skills mix. Members of the PITs will include among others, financial management specialists, procurement specialists, technical specialists, and where civil works are involved, environmental specialists, and social development specialists. The government of Kenya (GoK) and the World Bank will agree on the list of members of all the PITs. 4. Specifically, Team Leaders will report directly to the respective Chief Executive Officers (CEOs) in case of KeNHA, KAA and KCAA, while to the Permanent Secretaries (PSs), in case of MoR and MoT. All the PITs shall have staff in adequate numbers with qualifications and experience satisfactory to the GoK and the World Bank, and shall be maintained at all times
45
during the life of the project. The World Bank will be consulted prior to any change in the membership of the PITs.
Composition of the Project Implementation Teams (PITs) 5. As regards implementation of Component A and Subcomponent B1, the Director General (DG) of KeNHA has appointed a Team Leader for the PIT with experience and successful track record in implementation and management of Bank financed projects. The KeNHA-PIT Team Leader will report to the DG of KeNHA. The members of the team who will manage the day-to-day activities of the KeNHA components will include: Team Leader; Pavement/Materials Specialist; Social Development Specialist; Engineering/Design; Environmental Specialist; Procurement Specialist; Financial Specialist; and Construction Specialist. 6. To implement Sub component B2 (MoR), the PS, MoR will appoint a Team Leader for the PIT. The MoR-PIT Team Leader will report to the PS of MoR. The members of the PIT will include: Team Leader; Procurement Specialist; Financial Management Specialist; Economist/ Monitoring and Evaluation Specialist; and Civil Engineer (Planning). 7. As regards the Sub component B3 (MoT), the PS, MoT will appoint a Team Leader for the PIT. The MoT-PIT Team Leader will report to PS of MoT and will manage the day-to-day activities of Sub component B3. The members of the team will include: Team Leader; Procurement Specialist; Financial Management Specialist; Transport Economist; Maritime and Port Sector Specialist; Air Accident Investigation Specialist; and Road Safety Specialist. 8. As regards the implementation of Component C (KAA), the Managing Director (MD) of KAA has appointed a Team Leader for the PIT. The Team Leader will report directly to the MD for project related activities. The KAA-PIT will manage the day-to-day activities of the KAA component. The members of the team include: Team Leader; Construction Engineer; Electrical Engineer; Airport Operations Specialist; Airport Security Specialist; Procurement Specialist; an Economist; Environmental Specialist; and Financial Management Specialist. 9. For implementation of Component D (KCAA), the DG KCAA will appoint a Team Leader. The KCAA-PIT Team Leader will report to the DG of KCAA and the team will be comprised of a: Team Leader; Civil Engineer; Flight Operations Specialist; Air Navigation Specialist; Economist; Procurement Specialist; and Financial Management Specialist. The Terms of Reference (ToR) for Team Leaders 10. The Team Leaders will provide the overall leadership of their respective component(s) of the project, and will be responsible for the following:
• Manage the day-to-day operations of their respective component(s), • Plan, direct, control and coordinate activities of the project under their management, • Monitor the commitment of their respective organizations to the project,
46
• Monitor the performance of consultants and contractors in accordance to agreed contractual obligations,
• Implement the project in accordance to the overall plan of operations and activity schedules and report changes thereto,
• Ensure that there is structured and consistent monitoring of progress of implementation, including the regular reports, and audit reports, and
• Ensure project progress reports are submitted to the Project Coordinator (PC) in a timely manner.
The ToR of the Project Implementation Teams (PITs) 11. The PITs will carry out the following pre-contract and project management activities: Pre-award Activities
• Prepare the project implementation plan; • Follow up on all actions agreed with the World Bank related to project preparation; • Invite bids according to World Bank procedures; • Select consultants accordingly to World Bank procedures; • Prepare project contractual documents; • Prepare bidding documents; • Conduct evaluation of bids; • Undertake contract negotiations; • Facilitate issuing of letters of awards; and • Liaise with World Bank as well as other PITs as part of coordination role.
Project Management Activities
• Discuss and agree with the consultants, suppliers and contractors detailed project activities;
• Facilitate the mobilization of contractors and consultants; • Facilitate import clearance; • Supervise and monitor consultants and contractors; • Supervise project implementation at all levels; • Draw up procedures for receiving, verification and payment of invoices on timely basis; • Ensure timely payments to consultants and contractors; • Preparation and submission of progress reports; • Ensure that financial audits are carried out in time; • Ensure all safeguard policies are adhered to; and • Keep and maintain all project records, reports and information.
Coordination and Oversight Arrangements of the Project 12. There will be a PC and Project Oversight Committee (POC). The PC will be responsible for overall reporting and coordination of the project and will raise any issues that may hamper
47
the smooth preparation and implementation of the project to POC. The PC will be appointed by July 31, 2011. The POC will report directly to the PS, MoR on a day-to-day basis. The POC will be responsible for the steering, providing oversight and strategic guidance to the implementation of the project, and resolve any bottlenecks particularly of a policy nature that would otherwise hinder smooth execution of the project. MoR will be responsible for the appointment of the PC and will provide the Secretariat. The POC will ensure that an inter-ministerial task force on restructuring of KCAA has been established to steer this process. The task force will report to the POC. 13. The Members of the POC will include the PS of MoR; PS of MoT; CEOs of KeNHA, KAA, KCAA; a representative of the Ministry of Finance (MoF); and the PC. The PS MoR will chair the POC. The PC will be the Secretary to the POC, as the roads component accounts for over 80 percent of the total project scope.
The ToR for the Project Coordinator (PC) 14. The PC will be responsible for the following:
• Provide overall project coordination and reporting; • Ensure timely production of joint overall project implementation progress reports; • Report to the POC all projects related matters, any difficulties/bottlenecks and policy;
matters that may hinder smooth project preparation and implementation; • Convene meetings with Team Leaders on a quarterly basis during project
implementation; • Ensure that adequate coordination exists with all other PITs and MoF as required; and • Secretary to the POC.
The TOR for the Oversight Committee (POC) 15. Responsible for overseeing the overall project preparation and implementation, the POC
will: • Provide strategic and policy direction on matters relating to project preparation and
implementation; and • Provide support and resolve any constraints that may hamper project implementation and
would require interventions from other ministries or arms of the government.
16. The POC will meet at least quarterly and MoR will provide the Secretariat. B. Financial Management, Disbursements and Procurement
(a) Financial Management 17. The Bank’s financial management team conducted a financial management assessment of the KeNHA, MoT, MoR, KCAA, and KAA in accordance with the Financial Management Manual for World Bank-Financed Investment Operations dated March 1, 2010 and Financial Management Assessment and Risk Rating Principles.
48
18. The following are the financial management arrangements for the project. Budgeting ar rangements 19. KAA: KAA has qualified staff who undertake budgeting and monitoring. Budgeting procedures are documented under ISO 9001:2000 procedure titled Finance Standard Operating Procedures supported by the Finance Work Instructions which covers the entire process from budget preparation, budget control, monthly variance analysis, and management reports and is considered adequate. This is also supplemented by the Treasury guidelines issued annually on budget preparation. After KAA’s Board approval, the budget is forwarded to Treasury for approval. At the moment KAA is preparing the budget manually but plans are underway to computerize its operations. This can be funded from the project. 20. KCAA: Budgeting is done using the bottom up approach. The budgeting procedures are documented in the draft Finance Policy and Procedures Manual which is awaiting Board approval. KCAA uses Navision accounting system which is being run parallel with the SAGE accounting system that is being phased out. Navision has a budgeting module. Once the data migration is fully done and tested, KCAA will go live on Navision.
21. KeNHA: The budgeting process is deemed adequate. The budgeting process follows the Government of Kenya procedures titled; Government Financial Regulations and Procedures. In addition, KeNHA has its own procedures manual entitled Financial Policies, Guidelines & Procedures Manual dated July 1, 2009. The Finance Committee of the Board reviews the budget before forwarding to the full Board for adoption and approval. The new SAGE Pastel accounting system has a module for budgeting but previously the budget was done manually. Staff has been trained on the SAGE but are yet to go live.
22. MoR: The budgeting process is deemed adequate. The budgeting process follows GoK procedures titled; Government Financial Regulations and Procedures. The budget is done manually using excel as an Integrated Financial Management and Information System (IFMIS) module for budgeting is not operational. In addition, not all accountants have been trained on IFMIS especially the ones in External Resources Section of MoR who deal with donor projects. The financial management (FM) proposal is that the accountants be trained in IFMIS and the e-IFR training that the GoK is rolling out by April 2011.
23. MoT: The budgeting process is deemed adequate. The budgeting process follows the GoK procedures titled; Government Financial Regulations and Procedures. The budget is done manually using excel as IFMIS module for budgeting is not operational. The GoK is however rolling e–IFR by April 2011 and MoT staff will be trained on it. Accounting ar rangements 24. KAA: The Company has no accounting information system, and uses excel. The staff is qualified and experienced. The Financial Management Manual, i.e. the Finance Standard Operating Procedures and Finance Work Instructions are adequate to be utilized for the project.
49
25. KCAA: KCAA has been using SAGE pastel accounting software which is considered adequate for the project. This has however been upgraded to Navision, which is being run parallel to the SAGE. The staff is qualified and experienced. The Finance Policy & Procedures Manual in use is awaiting Board approval and is considered adequate.
26. KeNHA: Accounting and internal audit staff are adequate in terms of numbers, qualification and experience. However, since the Ministry of Roads has to get involved at some point in the KeNHA payment process- for Direct Payments only, any staffing challenge at the MoR affects KeNHA especially when it comes to efficiency.
27. They use both GoK procedures and own developed procedures entitled Financial policies, Guidelines & Procedures Manual. These are considered adequate.
28. KeNHA has just acquired SAGE Pastel accounting system. The staff has been trained and implementation has just started. Previously they were on manual accounting system.
29. MoR: MoR uses GoK procedures titled; Government Financial Regulations and Procedures which are considered adequate. The staffing is considered adequate. MoR has an External Resources Section that deals with donor funded projects. A project accountant has been designated for the KTSSP. MoR is using Microsoft excel but it is expected that by the end of April 2011, the GoK will have procured an accounting software for the project.
30. MoT: MoT uses GoK procedures titled; Government Financial Regulations and Procedures which is considered adequate. The staffing is considered adequate. Though MoT has already designated an accountant, there is need to designate an additional project accountant for the Kenya Transport Sector Support Project (KTSSP) due to the many projects that the accountant will be handling i.e. the East African Trade and Transport Facilitation Project (EATTFP), the Northern Corridor Transport Improvement Project (NCTIP) and KTSSP. MoT will deploy an additional accountant by July 31, 2011. MoT is using Microsoft excel but it is expected that by the end of April 2011, the GoK will have procured an accounting software for the project.
Internal control and internal auditing ar rangements Internal Auditing 31. KAA, KCAA, KeNHA, MoT, and MoR all have a strong internal audit function with audit committees in place to address issues raised by both internal and external audit reports but the audit committee of MoR and MoT are weak and needs capacity building to enable them carry out their responsibility effectively. There is also high turnover of staff at KCAA including the internal audit staff. KCAA Board has approved restructuring of KCAA and the proposal is now with MoF for endorsement. The pay packages will be improved and the issue of turnover resolved.
50
Internal Control Systems 32. KAA, KCAA, KeNHA, MoT and MoR have adequate financial management manuals documenting the internal control systems to be used under the project. KCAA Finance Policy & Procedures manual is still in draft awaiting Board approval. Review of Internal Control Systems 33. A review of the external audit reports and the management letters flagged some internal control issues in KCAA, KeNHA/MoR and MoT, which are being addressed by the respective entities and will be monitored during project implementation by the Bank using agreed upon action plans with the entities. 34. KCAA: The Management Letter for fiscal year 2009 noted that the fixed asset register was not being updated. A firm has been awarded a contract to tag the assets and is expected to complete the process of tagging by the end of March 2011.
35. MoR: The audited accounts for fiscal year 2009 were qualified and internal control issues related to MoR were inaccuracies in financial statements; unsupported and ineligible expenditure; and pending bills from suppliers and contractors not settled at the end of the financial year and not disclosed in the notes to the financial statements. Internal control issues relating to KeNHA related to missing laptops not accounted for. MoR has received a clearance letter from Kenya National Audit Office (KENAO) after satisfactory resolution of these issues.
36. MoT: Arising out of the FY2009 audited accounts for NCTIP implemented by MoT, the ministry needs to improve on the monitoring and recording of fixed assets and monitoring of cash imprests to avoid audit qualifications related to these issues.
(b) Disbursements
Funds flow and disbursement ar rangements 37. Banking arrangements: The Ministry of Finance (treasury) will be required to open five Designated Accounts denominated in United States Dollars while the KAA, KCAA, KeNHA, MoR and MoT will each open a Project Account denominated in Kenyan Shillings. Both accounts will be opened in acceptable commercial banks to IDA based in Kenya. Details of these accounts once opened and the signatories are to be submitted to the Bank. Counterpart funding from the GoK for activities implemented by KeNHA is to be remitted in the project account. 38. Funds flow arrangements: The project will adopt the transaction based Summary of Expenditure (SOE) method of disbursement. The Bank will give an initial advance with a ceiling. Subsequently, the implementing entities will submit their SOE and the Bank will process the withdrawal applications and deposit funds into the Designated Account. Funds will then be transferred from the Designated Account at Ministry of Finance into the project accounts at the KAA, KCAA, KeNHA, MoR and MoT. Each of these implementing entities will be
51
submitting their own withdrawal application to the Bank through the MoF. KeRRA and KURA will carry out procurement activities that will be paid by KeNHA while KRB will carry out procurement activities that will be paid by MoR.
39. Risks in the funds flow process: The Kenya portfolio has been facing delays in the transfer of funds from the Designated Account held at the Ministry of Finance to the project accounts held by the implementing entities. In addition, there have been delays in the transfer of government counterpart funds especially for infrastructure projects and this is likely to affect this project too. However, the GoK has undertaken to remit quarterly in the project account counterpart requirements to cover that period. The initial deposit is KES285 million for the quarter subsequent to effectiveness. 40. Disbursement arrangements: The transaction based disbursement procedures will be used. Other methods of disbursement will include direct payments, special commitments and reimbursements. Details concerning disbursements will be spelled out in the project’s Disbursement Letter that will be issued by the Bank.
Figure 1: Funds Flow Diagram
Financial repor ting ar rangements 41. KAA, KCAA, KeNHA, MoR and MoT will prepare quarterly un-audited Interim Financial Reports (IFRs) for the project in form and content satisfactory to the Bank, which will be submitted to the Bank within 30 days after the end of the quarter to which they relate. All the entities have been producing satisfactory IFRs under the ongoing NCTIP and should have no difficulty developing the formats for this project. 42. The contents of the IFR will include a section to report on the accountability of funds utilized and a section to access funds using the report based method of disbursement. The reporting section includes: • Statement of Sources and Uses of Funds; and • Statement of Uses of Funds by Project Activity/Component.
WORLD BANK (IDA)
DESIGNATED ACCOUNTS in US$ at Treasury (MoR,
MoT, KCAA, KAA, KeNHA)
PROJECT ACCOUNTS in KES in a Local Commercial Bank (MoR, MoT, KCAA, KAA,
KeNHA)
Payments to project activities including activities for KERRA, KURA and KRB
52
43. The project will also prepare the projects annual accounts/financial statements within three months after the end of the accounting year in accordance with accounting standards acceptable to the Bank. The audited financial statements should be submitted to the Bank within six months after the end of the accounting year. KAA, KCAA and KeNHA will prepare their accounts in accordance with International Financial Reporting Standards while MoT and MoR will prepare their accounts in accordance with International Public Sector Accounting Standards. Auditing ar rangements 44. KENAO will audit KTSSP annual financial statements prepared by KAA, KCAA, MoT, MoR and KeNHA using the International Standards on Auditing. The audited financial statements will be submitted to the Bank within six months after the end of the fiscal year along with the management letter and management response thereto. The audit terms of reference (ToR) already agreed with KENAO under the NCTIP are sufficient to audit this project too. There are no overdue audit reports. The audit report will be disclosed in accordance with the Bank’s disclosure policy. However, KENAO’s capacity to conduct value for money audits needs to be strengthened and as an interim measure they can hire specialists to conduct these audits. Value for money audits could be required depending on the fiduciary risk during project implementation. 45. KCAA, KAA, MoT and KeNHA are currently implementing the NCTIP. Their audit reports for FY 2009 received qualified opinions. KCAA, KAA, MoT and MoR have since cleared their audit issues with KENAO and received clearance certificates which have been submitted to the Bank. MoT under the EATTFP audit report for FY09, had a qualification regarding ineligible expenditure of KES 16,776,327 but this has been refunded to the Bank.
46. The Bank also received the recently audited reports for the period ended June 30, 2010 for NCTIP. KAA and KCA had unqualified (clean) audit opinions. The audit reports for KeNHA and MoT were qualified on internal controls issues but not ineligible expenditure. MoT qualification related to transfers to KCAA and KAA from special accounts that still need to be explained to KENAO and noncurrent assets not disclosed in receipts and payments statements while KeNHA qualifications have subsequently being cleared by KENAO except for pending explanations on bank reconciliations. EATTFP audited reports for the year ended June 30, 2010 were also qualified for MOT and KeNHA but no ineligible expenditure was found. Qualification issues relate to pending explanations yet to be provided to KENAO on counterpart funds, special accounts statements and prior year adjustments. The above issues will be followed up by the Bank during the implementation of these projects using an action plan.
53
Table 1: Audit Reports and Due Dates
Audit Report Due Date
KAA, KCAA, MoT, MoR and KeNHA- Annual audited financial statements and Management Letter for the project (including reconciliation of the Designated Accounts with appropriate notes and disclosures) for each entity.
Within six months after the end of each fiscal/financial year.
Financial Management Action Plan 47. The following actions need to be taken in order to enhance the financial management arrangements for the Project:
Table 2: Action Items for Financial Management Arrangements
Action Date due by Responsible 1. Designation of an additional accountant for MoT July 31, 2011 MoT 2. • Ensure MoR, MoT and KAA have accounting
information systems to produce the project books of accounts.
• Strengthen audit committees in MoT and MoR by ensuring compliance with Treasury circular 16/2005 on establishment and operationalisation of audit committees in the Public Service.
• MoT, KeNHA/MoR and KCAA to address internal control issues raised by KENAO.
• Follow up on funds flow delays between the Designated Account held by the Ministry of Finance and the project account held by the implementing entities to ensure that GoK has an efficient funds flow process.
• Strengthen the capacity of KENAO to conduct value for money audits which could be required for this project depending on the fiduciary risk of the project during implementation.
• MoT and KeNHA to submit an action plan to the Bank on how and when to address the issues raised by KENAO in the June 30, 2010 audit reports.
During implementation KENAO, MoF, KeNHA, MoR, MoT KCAA and KAA
(c) Procurement
48. Total project cost is estimated at US$477.76 million. IDA will contribute about US$300 million towards the financing of works, goods, and consultant services, and training as detailed in Table 1 found in Annex 2. Out of the total estimated cost of the Project, KeNHA will be responsible for 64 percent, KAA for 25 percent, KCAA for 5 percent, MOT 4 percent and MOR
54
for 2 percent. Implicitly the procurement expenditures of the five PIAs will more or less be in the same proportion of their budgetary allocations. A Procurement Risk Assessment carried out during appraisal (February 2011) on the five project implementing agencies revealed common and agency-specific procurement risks. The common risks are attributable to systemic weaknesses in the areas of (i) accountability of procurement decisions, (ii) procurement record keeping; (iii) capacity of procurement staff; (iv) procurement planning; (v) procurement process administration including award of contracts; (vi) contract management; and (vii) procurement oversight. In addition to the common weaknesses, the turnover of the procurement staff of the Ministries of Roads and Transport and KCAA is high making the probability of strengthening and sustainability of their procurement capacity slim. Although the technical members of the Implementation Team of KeNHA are the same members of the PIT as for the on-going NCTIP, the project procurement officer is new and has had no experience in Bank procurement procedures. 49. KeNHA and KAA which are designated to implement 89 percent (in monetary terms) of the project activities are semi autonomous public entities. They have strong technical teams who have acquired vast experience from the on-going Bank-funded NCTIP including in the area of procurement. In view of this, the procurement risk in these two project implementing agencies is rated moderate. The other three project implementation agencies [two government ministries (MOR, MOT) and a state-owned entity (KCAA)] will implement 11 percent of project activities. Their procurement risk is substantial. Considering the share of responsibilities in project implementation and institutional capacity of the five project implementing agencies, the overall procurement risk is rated “moderate”.
50. The recommended measures for the mitigation of the procurement risks for each project implementation agency are:
(a) By Project Effective Date, prepare a Procurement Guide that: (i) defines the roles and responsibilities of all offices that will be involved in any aspect of procurement implementation of the project; (ii) set out the sequence and timeframe for the completion of procurement decisions of all individual players as well as for coordination of the contribution of the players in procurement implementation; and (iii) establish service standards for processing of payments to contractors and suppliers;
(b) Develop and agree with the Bank by the Project Effective Date a procurement training plan for the PIT;
(c) Align the preparation processes of Procurement Plans, Work Plans and budget estimates; (d) Establish separate effective tracking systems of: (i) Procurement Plan implementation,
and (ii) processing of payments to contractors and suppliers; and (e) In consultation with the Public Procurement & Oversight Authority (PPOA) and
KENAO, ensure that procurement audits by PPOA and financial audits by KENAO are conducted jointly.
51. For the improvement and sustainability of the procurement capacity in MOR, MOT and KCAA, establish and agree with the Bank a staffing plan that will minimize or eliminate the risk associated with the current trend of staff turnover.
55
52. A General Procurement Notice (GPN) was published in the DgMarket website on September 24, 2010. The GPN will be updated annually for all outstanding ICB and large consultancy services contracts, as appropriate. Specific Procurement Notices (SPN) for goods and works to be procured under ICB and NCB and for consultant services will be advertised in at least one national newspaper of wide circulation and internationally for ICB contracts. Procurement will be carried out in accordance with the World Bank’s Guidelines: Procurement Under IBRD Loans and IDA Credits dated May 2004 revised October 2006 and may 2010; and Guidelines: Selection and Employment of Consultants by World Bank Borrowers’ dated May 2004 revised October 2006 and May 2010. 53. Kenya has a public procurement law, the Public Procurement and Disposal Act of 2005 (PPDA) that governs purchase of works, goods and services using public resources by the central government entities, local authorities, state corporations, education institutions, and other government institutions. Under the PPDA, the PPOA has been established in addition to the Procurement Department in the MoF. The PPDA sets out the rules and procedures of public procurement and provides a mechanism for enforcement of the law. Some provisions of PPDA are not fully consistent with the World Bank procurement guidelines and Consultants Guidelines, and therefore these may not be applied for the implementation of this project without modification. These provisions and their respective modifications are:
(a) PPDA 55(2): instead, the tender submission date shall be set so as to allow a period of at least 30 days from the later of: (i) the date of advertisement, and (ii) the date of availability of the tender documents.
(b) PPDA 4(2)(c): instead, Recipient’s Government-owned enterprises shall be allowed to participate in the tendering only if they can establish that they are legally and financially autonomous, operate under commercial law and are an independent agency of the Recipient’s Government.
(c) the Recipient shall use, or cause to be used, bidding documents and tender documents (containing, inter alia, draft contracts and conditions of contracts, including provisions on fraud and corruption, audit and publication of award) in form and substance satisfactory to the Association.
(d) PPDA 61(4): instead, extension of tender validity shall be allowed once only, and for not more than thirty (30) days, unless otherwise previously agreed in writing by the Association.
(e) PPDA 66(3)(b): instead, evaluation of tenders shall be based on quantifiable criteria expressed in monetary terms as defined in the tender documents. It shall not be based on a merit points system.
(f) PPDA 39: instead, no domestic preference shall be used in the evaluation of tenders. Therefore, as a result of the non application of PPDA 66(3)(b) and 39, contracts shall be awarded to qualified tenderers having submitted the lowest evaluated substantially responsive tender.
(g) PPDA 67: instead, notification of contract award shall constitute formation of the contract. No negotiation shall be carried out prior to contract award.
(h) PPDA 91: instead, Shopping procedure will apply for each low value contracts, in lieu of Direct Procurement, except as otherwise previously agreed in writing by the Association.
(i) Regulations 47: instead, the two envelope bid opening procedure shall not apply.
56
54. Procurement Methods that will be applicable to all Goods and Works required for the project will be specified in the Procurement Plan including the circumstances under which the methods may be used. The methods will include:
(a) International Competitive Bidding (ICB); (b) Limited International Bidding (LIB); (c) National Competitive Bidding (NCB); (d) Shopping; and (e) Direct Contracting.
In case of Consulting services, the methods will include:
(a) Quality and Cost Based Selection (QCBS); (b) Selection under Fixed Budget; (c) Consultants Qualifications; (d) Least Cost Selection; (e) Single source Selection; and (f) Selection of Individual Consultants consistent with procedures provided in paragraph 5.2
and 5.3 of the Consultant Guidelines. 55. The review by World Bank of procurement decisions will be provided in the Procurement Plan for those contracts that shall be subject to Prior Review. 56. Training: each of the implementing agencies will prepare and submit to the POC for its endorsement an annual training program, as part of the project annual work plan before submission to the Bank for concurrence. The program will identify, inter alia: (a) the training envisaged; (b) the personnel to be trained; (c) the selection methods of institutions or individual conducting such training; (d) the institutions conducting the training, if already selected; (e) the duration of the proposed training; and (f) the cost estimate of the training. Report by the trainee upon completion of training would be mandatory.
57
KENYA TRANSPORT SECTOR SUPPORT PROJECT (KTSSP) PROCUREMENT PLAN
1. GENERAL 1.1. Project information:
Country: Kenya Borrower: Republic of Kenya Project Name: Kenya Transport Sector Support Project (KTSSP) PROJECT ID:
P124109
1.2. Bank’s approval date of the Procurement Plan: 1.3. Date of General Procurement Notice: DG Market 24th September 2010. 1.4. Period covered by this procurement plan: Fiscal Year 2010 –2012 (18 months) 2. WORKS 2.1. Prior Review Thresholds
No. Procurement Method Threshold for
Procurement Method (US$)
Prior Review (US$)
1 ICB ≥ 5,000,000 All 2 LIB All values All 3 NCB < 5,000,000
>100,000 None
4 Direct Contracting <100,000 All 5 Shopping < 100,000 None
Note:
ICB = International Competitive Bidding LIB = Limited International Bidding
NCB = National Competitive Bidding
2.2. Post-qualification of bidders: Post-qualification will be carried out for all civil works contracts unless specified otherwise.
2.3. Proposed Procedures for CPP Components (as per paragraph. 3.17 of the Guidelines: N/A
2.4. Reference to (if any) Project Operational/Procurement Manual: Procurement Guide 2.5. Any Other Special Procurement Arrangements: N/A
58
2.6. Procurement Packages with Methods and Time Schedule
Ref. No. Contract (Description)
Proc. Method
Pre or Post qualif.
Domestic Preference
(yes/no)
Review by Bank (Prior / Post)
Expected Bid-Opening
Date
PART A (REHABILITATION AND IMPROVEMENT OF ROADS, ROADSIDE FACILITIES AND ROAD SAFETY): IMPLEMENTED BY KeNHA
1 Rehabilitation of the Kisumu – Kakamega Road (A1), 47km
ICB (1)4 Post Yes Prior Mar 2011
2 Rehabilitation of the Kakamega – Kaburengu (Webuye) Road (A1), 40km
ICB (1) Post Yes Prior Mar 2011
3 Rehabilitation of the Webuye – Kitale Road (A1), 59
ICB (1) Post Yes Prior Mar 2011
4 Rehabilitation of the Bachuma Gate – Maji ya Chumvi Road (A109), 53km
ICB(1) Post Yes Prior Aug 2011
5
Construction of a second carriageway on the Athi River – Machakos Turnoff – Ulu Road (A109), 21km
ICB (1) Post Yes Prior Jan 2012
6
Construction of Grade Separated Interchanges: Junction of Nakuru-Nairobi Road (A104) with Nakuru – Nyahururu Road (B5) at Kunste
ICB (1) Post Yes Prior Oct 2011
7
Construction of Grade Separated Interchanges: Junction of Nakuru-Eldoret Road (A104) with Nakuru – Njoro Road (C56) at Njoro Turnoff
ICB (1) Post Yes Prior Oct 2011
8
Construction of Grade Separated Interchanges: Junction of Nakuru-Eldoret Road (A104) with Mau Summit – Kericho Road (B1) at Mau Summit
ICB (1) Post Yes Prior Oct 2011
4 Figures in parentheses are numbers of expected contracts. Where figure not indicated, it means one contract.
59
Ref. No. Contract (Description)
Proc. Method
Pre or Post qualif.
Domestic Preference
(yes/no)
Review by Bank (Prior / Post)
Expected Bid-Opening
Date
9
Construction of Grade Separated Interchanges: Junction of Kericho – Ahero Road (B1) with Kisii- Kisumu Road (A1) at Ahero
ICB (1) Post Yes Prior Oct 2011
PART B1( INSTITUTIONAL STRENGTHENING AND CAPACITY BUILDING): IMPLEMENTED BY KeNHA
10 HQ complex for KeNHA, KURA, KeRRA, KRB, ERB & NCA.
ICB (1) Post Yes Prior Feb 2012
11
Roadside amenities and road safety: (i) market at Kaburengu , HIV resource centre at Khayega ; (ii) Non Motorized Transport Facilities at Kakamega, Webuye, Majengo, Luanda (iii) enhancement of national road safety plan works component.
LIB/ NCB (3)
Post No Prior n/a
PART B3 (SUPPORT TO THE MINISTRY OF TRANSPORT): IMPLEMENTED BY MoT 1 Strengthen air accident
investigation by construction of hangar including perimeter fencing
NCB Prior No Yes Apr-2013
2 Rehabilitation of marine training facilities in Kisumu
NCB Prior No Yes Feb-2012
PART C (SUPPORT TO THE ) KENYA AIRPORTS AUTHORITY: IMPLEMENTED BY KAA 1 Rehabilitation of runway,
pavements and airfield ground lighting at Moi International Airport.
ICB Prior Yes Prior May 2011
2 Electrical Distribution system upgrade at Moi International Airport Mombasa.
ICB Prior NO Prior July 2011
3 Improvement of water supply and reticulation at Moi International Airport Mombasa.
NCB Post NO Post Oct 2011
4 Improvement of water supply and reticulation at JKIA.
ICB Post NO Prior Oct 2011
PART D (SUPPORT TO THE KENYA CIVIL AVIATION AUTHORITY): IMPLEMENTED BY KCAA
60
Ref. No. Contract (Description)
Proc. Method
Pre or Post qualif.
Domestic Preference
(yes/no)
Review by Bank (Prior / Post)
Expected Bid-Opening
Date
1 Construction of KCAA Headquarters ICB Prior Yes Prior
Review Nov-11
3. GOODS AND NON-CONSULTING SERVICES. 3.1. Prior Review Thresholds:
No Procurement Method
Threshold for Procurement Method (US$) Prior Review
1. ICB ≥ 500,000 All 2 LIB All values All 3. NCB < 500,000
>70,000 None 4. Shopping <70,000 None 3. Direct Contracting All values All
Note:
ICB = International Competitive Bidding LIB = Limited Competitive Bidding NCB = National Competitive Bidding
3.2. Procurement Packages with Methods and Time Schedule
Ref.No.
Contract
(Description)
Procureme
nt Method
Pre or Post
qualif.
Domestic
Preference (Yes/No)
Review by Bank
(Prior / Post)
Expected
Bid-Opening Date
PART B1( INSTITUTIONAL STRENGTHENING AND CAPACITY BUILDING): IMPLEMENTED BY KeNHA
1 Purchase of vehicles for KeNHA, KURA & KeRRA
NCB Post No Prior Nov 2011
2 Purchase of technical equipment for KeNHA, KURA & KeRRA
NCB Post No Prior Nov 2011
3 Purchase of specialist software for KeNHA, KURA & KeRRA
LIB Post No Prior Nov 2011
PART B2 (SUPPORT TO KENYA ROADS BOARD AND MOR): IMPLEMENTED BY MoR 1 Vehicles for MOR, ERD NCB (2) Post No Prior Dec 2011
2 Purchase of publications and reference materials
Shopping Post No Post Jul 2011
61
Ref.No.
Contract
(Description)
Procureme
nt Method
Pre or Post
qualif.
Domestic
Preference (Yes/No)
Review by Bank
(Prior / Post)
Expected
Bid-Opening Date
3 Computers, computer accessories and office equipment for MOR, ERD
NCB (2) Post No Prior Mar 2012
PART B3 (SUPPORT TO THE MINISTRY OF TRANSPORT: IMPLEMENTED BY MoT 1 Equipment for Hangar ICB Post Yes Prior Sep-12
2 Equipment for Search and Rescue, and Pollution Response Capability
ICB Post Yes Prior Sep-12
3 Equipment For Maritime Training Institute Kisumu
ICB Post Yes Prior Oct-12
4 Equipment for Strengthening Maritime Oversight Functions
ICB Post Yes Prior Nov-12
PART C (SUPPORT TO THE ) KENYA AIRPORTS AUTHORITY: IMPLEMENTED BY KAA
1 Supply and install of baggage handling system at JKIA.
ICB Post Yes Prior June ‘12
PART D (SUPPORT TO THE KENYA CIVIL AVIATION AUTHORITY): IMPLEMENTED BY KCAA
1
Purchase of examination questions Shopping
Prior No Post Jul-11
2
Purchase of computers and equipping of the examination centre
NCB Post No
Post May-11
3
Purchase of motor vehicles NCB
Post No Post Jun-11
4
Equipment for Aviation Laboratory ICB
Post Yes Post May-11
5
Purchase of a server NCB
Post No Post May-11
6
Purchase of binoculars & digital cameras Shopping
**
Post No Post Apr-11
7
Aviation security screening equipment LIB*
Post No Prior Apr-11
8
Library equipment NCB
Post No Prior Nov-12
9
Supply and Installation of Communication System ICB
Post
Yes Prior May-11
62
Ref.No.
Contract
(Description)
Procureme
nt Method
Pre or Post
qualif.
Domestic
Preference (Yes/No)
Review by Bank
(Prior / Post)
Expected
Bid-Opening Date
10
Supply and Installation of ATS Message Handling System
ICB
Post Yes Prior
May-11
11
Supply and Installation of NAVAIDS System ICB
Post
Yes Prior May-11
12
Procurement of PAN-OPS Software LIB*
No Prior May-11
13
Human Resources and Document Management Systems NCB
Post No
Post Aug-11
14
Establishment of disaster recovery centre. NCB
Post No Post
Nov-11
15
Supply and Installation of PABX, Computers and Cabling.
NCB Post No Post
Oct-11
16
Installation of e-mail and Collaboration Suite NCB
Post No Post
Nov-11
17
GPS Motor Vehicle Tracking System NCB
Post No Post
Sep-11
18
Furniture for exam centre NCB
Post No Post
Nov-11 * LIB will be used in respect of specialist software and other proprietary items for which there are only a few known suppliers ** Shopping method is proposed for binoculars and digital cameras, given their cost is under $70,000 and are available locally.
63
4. SELECTION OF CONSULTANTS 4.1. Prior Review Threshold:
Selection Method
Threshold for Proc. Method
(US$) Prior Review
1 QCBS (Firms) ≥200,000 All 2 Least Cost Selection (LCS) <200,000 ≥100,000 3 Consultants qualification (CQS) <100,000 Nil 4 Single Source (SSS - Firms) ≤100,000 All
5 Single Source (SSS - Individual) <50,000 All 6 Individual Consultant (IC) <50,000 All 7 Fixed Budget Selection (FBS) <200,000 ≥100,000
Note :
QCBS = Quality and Cost Based Selection. LCS = Least Cost Selection CQS = Consultant Qualification Selection FB = Fixed Budget Selection SSS = Single Source Selection IC = Individual Consultant
4.2. Short list comprising entirely of national consultants: Short list of consultants for services, estimated to cost less than US$200,000.00 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.
4.3. Any Other Special Selection Arrangements: N/A
4.4. Procurement Packages with Methods and Time Schedule
Ref. No.
Description of Assignment
Estimated Cost US$ million
Selection Method
Review by Bank (Prior / Post)
Expected Proposals
Submission Date
PART A (REHABILITATION AND IMPROVEMENT OF ROADS, ROADSIDE FACILITIES AND ROAD SAFETY): IMPLEMENTED BY KeNHA
1
Consultant Services for Design Review, Works Supervision; (i) Kisumu – Kakamega Road (ii) Kakamega – Webuye Road (iii) Webuye – Kitale Road
QCBS (3) Prior Apr 2011
2 Consultant Services for Design Review, Works Supervision (for Bachuma Gate – Maji ya Chumvi Road)
QCBS (1) Prior Jul 2011
64
Ref. No.
Description of Assignment
Estimated Cost US$ million
Selection Method
Review by Bank (Prior / Post)
Expected Proposals
Submission Date
3 Consultant Services for Works Supervision (for Athi River – Machakos turnoff Road) QCBS
(1) Prior Oct 2011
4 Consultant Services for Works Supervision (for Grade Separated Interchanges at A104/B5, A104/C56 and A104/B1).
QCBS (1) Prior Sep 2011
PART B1 ( INSTITUTIONAL STRENGTHENING AND CAPACITY BUILDING): IMPLEMENTED BY KeNHA
5 Supervision of works for office complex QCBS (1) Prior Jun 2011
6
Feasibility, engineering design for selected roads a) Isebania – Kisii – Ahero b) Nakuru – Nyahururu - Nyeri c) Mombasa Western Bypass d) Lake Victoria Ring Road e) Nakuru – Loruk – Marich Pass f) Kisian – Busia g) Mapping of entire Northern Corridor
from Mombasa – Malaba and formulation of bid documents for concessioning of following sections (i) Voi – Mariakani – Mombasa &
Mombasa Northern Bypass (ii) ICT City - Kibwezi (iii)Rironi – Naivasha – Nakuru – Mau
Summit & Nakuru Bypass
QCBS (7) Prior Jan 2012
7 Technical Assistance for strengthening KeNHA, KURA and KeRRA QCBS
(2-3) Prior Nov 2011
8 Securing of road assets
QCBS
Prior Nov 2011
PART B2 (SUPPORT TO KENYA ROADS BOARD AND MOR): IMPLEMENTED BY MoR 1 Study on impact of new constitution on the
role of KeNHA, KeRRA, KURA QCBS Prior Sep 2011
2 Study on role of MOR, MTD, Materials & KIHBT plus TA
QCBS
Prior Dec 2011
3 Inventory of unclassified roads (KRB) QCBS Prior Mar 2010 PART B3 (SUPPORT TO THE MINISTRY OF TRANSPORT): IMPLEMENTED BY MoT
1 Technical Assistance and Implementation of transport policy: Capacity Building for National Road Transport and Safety Authority
QCBS Prior Jan-12
65
Ref. No.
Description of Assignment
Estimated Cost US$ million
Selection Method
Review by Bank (Prior / Post)
Expected Proposals
Submission Date
2 Transport Sector Studies and Implementation of transport policy: Capacity Building for Nairobi Metropolitan Transport Authority
QCBS Prior Jan-12
3 Transport Sector Studies and Implementation of transport policy :Capacity Building for Railway Regulatory Authority
QCBS Prior Jan-12
4 Transport Sector Studies and Implementation of transport policy: Setting up of a Maritime Search and Rescue Unit
QCBS Prior Jan-12
5 Transport Sector Studies including urban transport strategy and strategy for airstrips
QCBS Prior Jan-12
6 Development of Navigation Charts for Kenyan Coastline
QCBS Prior Prior
7 Strengthening Maritime Oversight Functions QCBS Prior Jan-12
8 Design and Supervision of Building a Hangar
QCBS Prior Sep-11
PART C (SUPPORT TO THE) KENYA AIRPORTS AUTHORITY: IMPLEMENTED BY KAA 1 Supervision services for reconstruction of
aircraft pavement at Moi international airport Mombasa runway
SSS* Prior N/A
2 Design and supervision services for Electrical Distribution system upgrade at Moi international airport Mombasa
QCBS Prior N/A but subject to advice by
Bank. PART D (SUPPORT TO THE KENYA CIVIL AVIATION AUTHORITY): IMPLEMENTED BY KCAA
1 Flight Safety Inspector Consultants
IC (six contracts) Prior May-11
2 Review and update of syllabus and examinations IC Prior Jul-11
3 Design, drawings and Supervision of Construction of KCAA Headquarters QCBS Prior May-11
* Single Source Selection (SSS): The Consultants have already been selected competitively with KAA’s own financing for design and construction supervision, but the scope has now increased with availability of IDA financing. The cost represents additional cost of an addendum.
66
(iii) Environmental and Social (including safeguards)5
A. Environmental Assessment
Environmental Safeguards 53 According to the environmental safeguards classification, the project is a Category B as most of the project financed activities either have moderate impacts or involve the rehabilitation of existing infrastructure. Potential environmental impacts may include soil erosion and disturbance of water flows, water pollution, traffic disruption, noise, gaseous and dust pollution, and disturbance of flora and fauna. The project involves preparing and disclosing documents including Environmental Impact Assessments (EIAs) and Environmental Management Plans (EMPs). All the 10 environmental assessments and management documents have been prepared and reviewed by the World Bank and found to be acceptable. The details are in Table 4. Any other infrastructure rehabilitation or works that may take place during project implementation which has not already been subjected to an environmental and social impact assessment will be subject to the same safeguard policies and procedures, which include EIAs and EMPs to be prepared, approved and disclosed prior to execution of works. 57. The details and the views of the consultations are contained in the respective EIAs. The findings of the environmental assessment (EA) of the various road works subprojects suggest that overall impact is positive on the socio-economic environment of the area. Positive impacts largely comprise reduction in people’s transport costs, travel time savings, increased employment opportunities – not only during the construction period but also in the long-term due to increased economic activities, better access to medical clinics and hospitals especially for a variety of activities engaged mainly by women and children, and better access to schools and social amenities. The findings are similar for Moi International airport since the project will be limited to rehabilitation of the existing runway. 58. Nevertheless, there are negative impacts that have been identified in the EA reports with recommendations for appropriate measures to mitigate their effects. The negative impacts, which are likely to occur mainly during the construction phase, include: soil erosion and disturbance of water flows, water pollution, traffic disruption, noise, vibration, gaseous and dust pollution, disturbance of flora and fauna, permanent and/or temporary land acquisition and landscape disturbance. No large scale, significant and irreversible impacts have been identified. During construction, a number of borrow pits and stone quarries will be opened up. The GoK 5The Safeguard Instruments employed for this project are comprised of: (a) the Environmental Impact Assessments for the Rehabilitation of Kisumu-Kakamega Road; Rehabilitation of Kakamega-Webuye Road; Rehabilitation of Webuye-Kitale Road; Rehabilitation of Maji ya Chumvi-Bachuma Gate Road; Rehabilitation of the runway at Moi Airport, Mombasa; Construction of two new lanes along Athi River and Machakos Turnoff Road; and Construction of four Interchanges at Nakuru/Nyahururu, Nakuru/Njoro, Mau Summit/Kisumu and Ahero/Kisii; (b) the Environmental Management Plans for the Construction of Hangar at JKIA for Air Accident Investigations; Construction of an Office Block at JKIA for KCAA Headquarters; and the Construction at JKIA of an Office Block for road sub-sector institutions including KENHA; (c) a Resettlement Policy Framework; and (d) the Resettlement Action Plans for the Rehabilitation of Kisumu-Kakamega Road; Rehabilitation of Kakamega-Webuye Road; Rehabilitation of Webuye-Kitale Road; Rehabilitation of Maji ya Chumvi-Bachuma Gate; and the Construction of two new lanes along Athi River and Machakos Turnoff Road.
67
will ensure that suitable locations of such quarries and borrow pits are identified, which will be free of homesteads, buildings, and other environmentally sensitive structures. 59. Since most of the negative impacts identified in the EA reports relate to the construction phase of the project, mitigation and support measures have been incorporated in the relevant clauses in the contract documents, for the road sections, bids have been invited and will also be done for the rest of the road sections before tendering of the works contracts starts. Such clauses include, among others, provisions for appropriate measures for storage, handling, transportation and disposal of all waste material; provision of adequate sanitary facilities; rehabilitation and surface restoration of borrow pits; basic training in construction health and mitigation measures against spread of Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS); and sustainable seeding and tree growing to restore vegetation to its original condition; and extraction of water. The project also provides for specific measures under the roadside amenities and road safety activities to minimize negative environmental and social impacts and enhance social welfare and positive impacts.
Social Safeguards 60. KeNHA mobilized Consultant services to assist in the Resettlement Action Plans (RAPs) for all road sections under the project. A RAP is not required for the rehabilitation of the runway at Moi International airport since no resettlement is envisaged. Key social issues relevant to project objectives are: Safeguarding in relation to social impacts of resettlement and loss of property, HIV /AIDS and its negative consequences, Road safety and overall participation of key stakeholders in this project. 61. The potential social impacts may include permanent and/or temporary land acquisition and landscape disturbance, disturbance of roadside vendors and in very few cases loss of personal property. No cumulative impacts are anticipated at this point.
62. The road sub sector developed a Resettlement Policy Framework (RPF), which was approved by the World Bank under NCTIP. This framework will be adopted for this project. The framework provides and clarifies the key principles underlying mitigation and compensation to local communities and others who will be adversely affected by relocation or loss of property due to the road works and in general for the affected persons. This framework outlines how the affected people will be compensated for loss of wages, loss of assets at replacement costs and also given the opportunity to share project benefits. All identified cases of relocation enumerated in the RAP will receive assistance on resettlement. The RPF has been updated, reviewed and cleared by the Bank for disclosure. 63. All the six social safeguard documents have been prepared, reviewed and cleared for disclosure by the Bank (Table 4). Bidding documents for all civil works will be based on the Bank models and will include the necessary provisions for temporary resettlement as well as chance finding of archeological items or cultural properties. 64. With regard to the Athi-Machakos Turnoff- road section, KeNHA had prepared a RAP in 2004 with a cut-off date of January 21, 2004 under NCTIP. Compensation payments have been
68
made to the respective RAPs and a completion report prepared. There is minimal encroachment into the road reserve since 2004 (only three permanent structures which had encroached on the road) and several traders with kiosks. 65. KeNHA commissioned a report describing how the project plans to deal with new encroachers (post cut-off date) and the decision of KeNHA and the Resettlement Committee on how they will be treated. Since this occurred after the cut-off date, and the RAP was consistent in disclosing the cut-off date throughout the inventory, census-taking, KeNHA may decide to provide disturbance and moving allowances and allow sufficient time for them to move out of the RoW and that be allowed to avail of the grievance mechanism. Otherwise in case there are any further consultations:
(a) the minutes should be included into the safeguard documents as an Annex; (b) other changes and revisions to the safeguard documents should be made at this time, and
the documents should be re-disclosed locally and in Bank InfoShop prior to project effectiveness; and
(c) as regards consultations and grievance mechanism, a consultation and disclosure approach will continue to be applied including on the grievance mechanism.
66. In addition to the above measures, the project has a roadside amenities and social and economic enhancement component (including HIV/AIDS mitigation) to support improvement of livelihoods of the communities along the road corridors. The component will also spur social and economic activities that will benefit the local communities as well. The corridor also presents opportunities for the local communities to be involved in road works through provision of manual and skilled labor where appropriate, and especially when the construction commences. 67. Road safety issues are a major concern in Kenya that claims a total of nearly 3000 lives annually. This project will complement the efforts under NCTIP, where a National Road Safety program has been developed and approved by the GoK. Its implementation begins in January 2011. Under the project attention will be given to increasing awareness of road safety through information provision and education of adults as well as children along the selected road corridors. The design of the project will include widening of the existing road in critical places to allow for bicycle paths and pedestrian sidewalks to enhance safety in selected areas.
69
Table 4: Environment and Social Safeguards Reports
Item no. Document Clearance by the Bank
Disclosed in InfoShop
Disclosed in-country
Environmental Impact Assessment 1 Rehabilitation of Kisumu –Kakamega
Road February 9, 2011 February 18, 2011 February 18, 2011
2 Rehabilitation of Kakamega-Webuye Road
February 9, 2011 February 18, 2011 February 18, 2011
3 Rehabilitation of Webuye-Kitale Road February 9, 2011 February 18, 2011 February 18, 2011 4 Construction of Athi and Machakos
Turnoff road February 25, 2011 February 28, 2011 February 28, 2011
5 Rehabilitation of Maji ya Chumvi-Bachuma Gate road
February 9, 2011 February 21, 2011 February 21, 2011
6 Rehabilitation of the runway at Moi International Airport
February 9, 2011 February 18, 2011 February 18, 2011
7 Construction of four Interchanges at Nakuru/ Nyahururu; and Nakuru/Njoro; Mau Summit/Kisumu; and Ahero/Kisii junctions
February 19,2011 February 21, 2011 February 21, 2011
Resettlement Action Plan 1 Rehabilitation of Kisumu –Kakamega
Road February 19, 2011 February 22, 2011 February 22, 2011
2 Rehabilitation of Kakamega-Webuye Road
February 19, 2011 February 22, 2011 February 22, 2011
3 Rehabilitation of Webuye-Kitale Road February 19, 2011 February 22, 2011 February 22, 2011 4 Construction of Athi and Machakos
Turnoff road January 2004 (updated February 25, 2011)
March 2, 2004 March 2, 2004
5 Rehabilitation of Maji ya Chumvi-Bachuma Gate road
February 19, 2011 February 21, 2011 February 21, 2011
6 Construction of four Interchanges at Nakuru/ Nyahururu; and Nakuru/Njoro; Mau Summit/Kisumu; and Ahero/Kisii junctions
March 1, 2011 March 2, 2011 March 2, 2011
Environmental Management Plan 1 Construction of a hangar at JKIA for
accident investigation February 15, 2011 February 24, 2011 February 24, 2011
2 Construction of an office block at JKIA for KCAA Headquarters
3 Construction of an office block at JKIA for road sub sector institutions
February 22, 2011 February 25, 2011
February 24, 2011
Resettlement Policy Framework 1 Updated to cover the rehabilitation of
the road sections, construction of interchanges and office blocks
March 7, 2011 March 7, 2011 March 7, 2011
70
(iv) Monitoring & Evaluation (M&E)
68. The ORAF provides the framework for monitoring the project performance. The main outcome indicator will be the reduction of travel time and transport cost on the Northern Corridor and the Tanzania-Kenya-Sudan road corridors. The baseline information is available. There are other performance and outcome indicators specially related to the policy and institutional reforms in the transport sector. 69. Results will be monitored, by a team of experts from the University of Nairobi (UoN) under contract with MoR but working in close collaboration with KeNHA and MoT. The reason for assigning this task to the University of Nairobi is to permit continuity in long term monitoring of the results and their impact on the economy. The government has proposed to engage UoN on a single source basis. The UoN is the M&E consultant under NCTIP, and the country has benefited enormously by assigning this task to the UoN. In the process of collecting and analyzing the data for M&E, thirty three students have utilized the information, produced theses and attained or about to graduate with Masters Degrees and also three Doctorate students. This decision has helped to create and build local capacity in M&E, and also provided an opportunity for continuity and sustainability in long term monitoring of the results and their impact on the economy; and linking the academia with the industry in Kenya, which is weak. KeNHA, KAA, MoR and KCAA have established M&E and Communications Units in their organization structures. These units will work closely with UoN.
70. The works contracts will be supervised by independent consultants selected competitively. The consultants will oversee the day–to-day progress of works on the site and to certify each payment invoice, including compliance by the contractor with all technical specifications, environmental and social mitigation plans, and contractual provisions.
71. Communications Strategy: To supplement the UoN work, a draft Communication strategy for the project has been prepared. This will be overseen by Bank’s Communications Specialist on the task team, based in the Kenya Country Office in conjunction with communication counterparts from KeNHA, KCAA, MoT, MoR and KAA. Already, a reconnaissance of the project sites has been made and interviews carried out and recorded, baseline information collected and a dialogue with potential beneficiaries initiated. An engagement-feedback mechanism that will be used throughout the life of the project is being finalized.
72. Communication will be an integral part of the project, not only in terms of updating the stakeholders about implementation progress of the physical works, but also on how the project is supporting GoK efforts in entrenching increased transparency and accountability in public investments, and fight against corruption and fraud. It will also demonstrate the government’s commitment to finance priority projects to support the implementation of Vision 2030, inform the public the development objectives of the project and demonstrate its benefits to the Kenyan people and appeal for their support and facilitation during the implementation of the project. The Communications Specialist at the Kenya Country Office will work closely with the MoR, KeNHA, KAA, KCAA and MoT to hold joint public workshops and briefing sessions, and assist
71
these institutions develop their own websites where information on progress such as award of contracts, commencement of works, social issues related with recruitment of workers by contractors for works and also any challenges faced during implementation would be available online for public comment. 73. Furthermore, the project’s communication strategy will seek to create awareness about the project’s contribution to infrastructure improvement and efficiency in the transportation system of Kenya, and the neighboring countries that depend on Kenya for international trade and exchange. It will focus on the economic and social benefits to the people of Kenya and the neighboring countries in terms of job creation, market efficiency, and the welfare benefits of better equity in the distribution of income and creation of economic opportunities in the medium and long-term. The Kenya Country Office will attempt to mobilize the support and communicate the benefits of the project to diverse audiences, including the project’s development objectives and how the project contributes to institutional reforms in the transport sector. 74. The strategic communication framework and outreach efforts will involve a series of internal and external activities and include key activities as follows:
Table 5: Outreach Activities
Activity Description Dissemination
Stakeholder mapping Identify stakeholders and how to engage them Channels, products and key messages relevant to each stakeholder established.
Project Factsheet Describe the Project objectives, key components, funding, expected outcomes and timelines during preparation and implementation.
Disseminate to media, stakeholder and partner networks, and post to Bank and partner websites; update regularly.
Q&A, 10 things about the project
10 most important themes about the project, focused on implementation, partnerships and results.
Flyers, post on Bank and other websites.
Media engagement Press releases, features, op-eds and structured print, broadcast and social media interviews with CD, TTL and counterparts on key aspects of the project and emerging transport sector issues focused impact and results.
Local and international media; post news, video clips and slide shows on websites and blogs.
Third party voices Encourage media and social networks to provide feedback and objectively talk about the project and transport sector issues.
Media, social networks, websites, discussion forums.
Workshops/roundtables Schedule regular workshops with partners and other stakeholders to discuss emerging issues/outcomes.
Summary of outcomes disseminated through networks, media, websites.
Project visits Involve media and social accountability networks in Bank missions to project areas.
Independent news and analysis of project outcomes in media, Bank, partners and social networks.
72
1. Partnership
The Bank will lead in establishing a network of transport sector communication partners including the ministries of transport and roads, KeNHA, and development partners. It will also encourage social accountability mechanisms with communities and nongovernmental organizations active in the transport sector and the project areas. These partners will engage in regular discussions and constructively address emerging issues during the life of the project
2. Budget The activities will require an estimated budget of US$25,000 over the next five years for the Bank team while GoK and the respective implementing agencies will determine and provide their own budget with the assistance of the communication specialist on the team. The details will be worked out.
3. Expected Outcomes The implementation of this communication program will increase awareness about the benefits of the project and improve the networking and consensus between the Bank, government, implementing agencies, partners, communities and other stakeholders in the project areas in particular and the transport sector in general
4. Monitoring and Evaluation The communication teams of the Bank and the implementing agencies will regularly monitor and respond to press reports, queries and discussions about the project. The communications team will evaluate the progress achieved at the end of the first six months period in June 2011.
73
Annex 4: Operational Risk Assessment Framework (ORAF)
KENYA: Transport Sector Support Project Project Development Objective(s) To (a) increase efficiency of road transport along the Northern Corridor and the Tanzania-Kenya-Sudan road corridor; (b) enhance aviation safety and security to meet international standards; and (c) improve the institutional arrangements and capacity in the transport sector.
PDO Level Results Indicators:
1. A reduction in travel time from Kisumu to Kitale 2. A reduction in vehicle operating costs on Kisumu to Kitale road 3. Increase in the number of direct beneficiaries (road users on Kisumu-Kitale and passengers at
Moi International Airport, Mombasa) 4. Kenya meets ICAO standards and recommended practices and KCAA cleared for IASA
Category 1 safety status 5. Improved institutional arrangements and capacity in transport sector 6. A reduction in road crashes along Kisumu-Kitale road section
Risk Category
Risk Rating
Risk Description Proposed Mitigation Measures
Project Stakeholder Risks
Low Local communities doubtful that the road sections will be improved, given similar promises in the past by GoK and may not cooperate before actual construction commences and progress recorded.
Stakeholder consultations held, and a communication strategy including an engagement-feedback mechanism with stakeholders is under preparation for use during the life of the project.
Implementing Agency Risks
Medium-L KeNHA, KAA, KCAA, MoR and MoT are implementing a US$1billion IDA-financed project currently. KCAA staff will require capacity building in managing a civil
Project will support further capacity building with emphasis on accountability, MIS and public reporting.
74
Risk Category
Risk Rating
Risk Description Proposed Mitigation Measures
works contract, while MoR and MoT in the use of ICT. KeNHA will require further capacity enhancement in MIS Late release of counterpart funding was experienced on NCTIP road component only soon after the post elections crisis in 2008-2009. MoF would release the funds to MoR, which determined the allocation of the funds among its many projects covering national, rural and urban roads. This issue has been resolved, partly due to the transfer of the management of the national roads to KeNHA and agreement that the counterpart funds related to works on national roads is channeled directly to KeNHA.
KeNHA/GoK will make the counterpart funds for each quarter available at the beginning of that financial quarter. This information will be reported in the quarterly Financial Monitoring Reports.
Project Risks • Design
Low The number of diverse implementing
agencies (5) and the large number of different sub-components (about 30) pose a special coordination and implementation risk that could delay project completion and impose additional costs.
The implementing agencies have experience in managing WB funded projects (currently implementing US$ 1 billion project with IDA part financing). Strengthen project management and coordination through local technical assistance; ensure regular follow up of recommendations of an independent M & E entity, and extensive supervision and implementation support by WB.
• Social and Environmental
Medium-L Execution of land acquisition, compensation payments, and ensuring adequate measures to mitigate environmental impacts are in place.
Extensive consultations have taken place in preparing EIA/RAPs and the environmental management plan and any new land or property being acquired is done by competent authorities in accordance with the
75
Risk Category
Risk Rating
Risk Description Proposed Mitigation Measures
applicable laws and procedures. • Program and Donor
Low GoK runs short of funds due to the
impending elections in 2012 and priorities change when the new government takes over.
Legal documents have a provision that GoK will provide adequate counterpart funds during implementation. Infrastructure is the stated priority of both the coalition partners in the Government.
• Delivery Quality
Low Poor M&E system leads to delays in timely actions to rectify deficiencies. Counterpart funds are not released in a timely and in adequate amounts.
Strengthen M&E capacity within KeNHA, KAA and KCAA, at the same time as an external agent (a public University) will be used to complement the M&E effort. Kept counterpart funding requirement to a minimum (25% or less for civil works) and monitor releases in the quarterly Financial Monitoring Reports.
Overall Risk Rating at Preparation
Overall Risk Rating During Implementation Comments
Medium -L High Rating by IL Task Team and Project Task Team
76
Annex 5: Implementation Suppor t Plan
KENYA: Transport Sector Support Project Focus of Supervision 1. Implementation support will focus on those activities that are critical for project success, particularly quality of works; technical compliance; timely payment to contractors, suppliers and consultants; timely award of contracts; and adherence to implementation schedules. The Bank’s team members of the project implementation have adequate skill mix and most of them are based in the Country Office. This will therefore enable continuous and cost-effective supervision of the project. 2. Emphasis will be placed on upstream reporting, auditing and accountability, and technical compliance measures to ensure early detection and remedy of problems through on-going oversight of the project implementation activities. In case of civil works contracts, there will be prompt review of project implementation progress reports prepared by the international engineering supervision firms that will perform the day to day independent certification of the quality of work, payment certificates and compliance with contract terms.
3. The World Bank project team will comprise experts with appropriate skills that will review the project’s main technical documents/reports, conduct site visits for verification of the progress as noted in the reports, and provide advice to the client on various aspects of the project. The experts are based at the Kenya Country Office and are knowledgeable in procurement, financial management, highway construction and contracts management, social development, transport economics, and monitoring and evaluation (M&E), supported by staff in the Headquarters (environmental specialist, urban transport specialist, aviation safety and security). The Bank experts will be further supported by consultant specialists in selected areas (architecture, mechanical engineering, maritime engineering, and airports planning, electrical and information systems, and construction). The engineering team in the Country Office will monitor progress and supervise the project on a continuous basis, with site visits planned every three months. Supervision in selected areas (such as environment, social development, procurement and financial management) will be planned as needed, but at least twice a year, and Specialist Consultant visits would be planned at least once a year or as needed. 4. Procurement documents subject to prior review will be carefully reviewed by both the technical expert(s) and the senior procurement specialist on the team to ensure that they comply with the project’s technical requirements and the Bank’s procurement and consultants guidelines. For those contracts that exceed the limits of approval by the procurement Accredited Staff on the team, the procurement will be subject to review and clearance by the Regional Procurement manager and the Bank’s Operations Policy and Country Services committee as appropriate. For large road works contracts, bid evaluation reports will be reviewed by an independent procurement specialist as an additional step towards greater due diligence. Furthermore, to ensure compliance, random reviews of the submitted bids/proposals against the submitted bid/proposal evaluation reports will be carried out. For procurement actions subject to post reviews, annual assessments will be carried out by the procurement team in the Country Office.
77
5. The Financial Management specialist will carry out periodic reviews of the project’s five implementing agencies’ Financial Management systems and controls and where necessary will conduct reviews of statements of expenditure and monitor the availability and adequacy of the counterpart funds as reported in the quarterly Financial Monitoring reports/Interim Financial reports. These reviews will be utilized for improving the implementing agencies’ systems and performance in these areas. 6. Before each supervision mission, the project implementing agencies will submit to the Bank a detailed consolidated project implementation progress report which will provide the status of the project activities and identify all implementation issues facing the project. These reports combined with site visits will be the basis for reaching agreement with the client on the activities for the upcoming period and resolution of implementation issues facing the project. 7. Annual audit reports with accompanying management letters will be submitted to the Bank for its review. It is anticipated that a further independent audit of the major works will be conducted, as is the case with contracts funded by the government of Kenya (GoK).
Mode of Supervision 8. The Task Team will undertake supervision as follows:
(a) On-going technical, procurement and financial management support to the project’s implementing agencies from the country based team;
(b) Quarterly supervision reviews of the project, including visits to the project sites. The review teams will comprise an engineer, procurement specialist, financial management specialist, social development specialist and Task Team Leader;
(c) Annual fully fledged supervision missions involving all the key Task Team members; (d) The Communications Specialist on the team will prepare a brief on the
implementation status of the project and post it on the external Country Office website semi-annually; and
(e) Similarly, the Communications Specialist on the team will assist the: Kenya National Highway Authority (KeNHA), Kenya Airports Authority (KAA), Kenya Civil Aviation Authority (KCAA), Ministry of Transport (MoT) and Ministry of Roads (MoR) to prepare brief implementation progress of the project, and post it on their websites.
Monitoring 9. On the side of the GoK, the capacity of the implementation agencies is augmented by technical assistance and consultant services, particularly in the areas of designs, supervision, project coordination, monitoring and evaluation, and user satisfaction surveys (local consultant or civil society organization to be engaged). The annual M&E reports produced by the M&E consultants (a public University) will be discussed at workshops with stakeholders, both during their preparation and on finalization. Budget
78
10. The above activities would require both the Bank and the GoK’s management to allocate adequate resources for their staff to be able to carry out comprehensive project supervision. Inadequate resources will hamper the implementation of the proposed intensive follow up and monitoring required for mitigating the potential risks identified.
I. What would be the main focus in terms of support to implementation during:
Time Focus Skills Needed Resource Estimate Partner Role
First twelve months
Technical review of bidding documents, proposals and bid and technical evaluation reports
Civil engineering, electrical engineering, financial management, procurement, architect, mechanical engineering , an independent technical/procurement specialist and communication
45 staff-weeks of Bank staff plus 26 staff-weeks of STC. Approx.US$250,000
Joint supervision with AFD on MIA component
12-48 months Technical review of bidding documents, proposals and supervision of works
Civil engineering, electrical engineering, financial management, M&E, social development, architect, procurement and communication
Annually, 30 staff-weeks of Bank staff plus 18 staff-weeks of STC. Approx. US$190,000 per annum
--- Ditto ---
Other
II. Skills Mix Required Skills Needed Number of Staff
Weeks/annum Number of
Trips/annum Comments
Team Leadership 26 4 site visits (local) CO staff Civil engineering 10 4 site visits (local) STC (International) Electrical engineering 4 2 site visits STC (International) Procurement 5 2 site visits CO Social Development 2 2 site visits CO staff M&E 2 2 site visits STC (local) Financial management 5 2 site visits CO staff Environmental 3 2 site visits HQs staff Architect 6 4 site visits STC (local) Mechanical engineering 4 2 site visits STC (local) Communications 2 4 site visits CO staff
III. Partners Name Institution/Country Role AFD France Co-financier
79
Annex 6: Team Composition
KENYA: Transport Sector Support Project
World Bank staff and consultants who worked on the project:
Name Title Unit
Josphat Sasia Lead Transport Specialist and Team Leader
AFTTR
Dahir Warsame Senior Procurement Specialist AFTPC Josphine Ngigi Financial Management Specialist AFTFM Gibwa Kajubi Senior Social Development Specialist AFTCS Noreen Beg Senior Environmental Specialist AFTEN Peter Warutere Communications Specialist AFREX Anil Bhandari Senior Adviser, Consultant AFTTR Nightingale Rukuba-Ngaiza Senior Counsel LEGAF Rajiv Sondhi Senior. Finance Officer CTRFC James Karuiru Highway Engineer, Consultant AFTTR Solomon Waithaka Sr. Highway Engineer AFTTR Felly Kaboyo Operations Analyst AFTTR Farida Khan Operations Analyst AFTTR Ann Raynal May Information Specialist AFTTR Shalonda Robinson Program Assistant AFTTR Lucy Kang’arua Program Assistant AFCE2 Lucy Musira Team Assistant AFCE2 Tekie Sium Cofinancing Assistant AFTTR Architect Consultant Local Mechanical Engineer Consultant Local Electrical Engineer Consultant International M&E Consultant Local
80
Annex 7: Economic and Financial Analysis
KENYA: Transport Sector Support Project I. Economic and Financial Analysis
Road Sections REHABILITATION OF THE KISUMU-KAKAMEGA-WEBUYE-KITALE; ATHI RIVER-MACHAKOS TURNOFF; AND BACHUMA GATE-MAJI YA CHUMVI
1. The economic analysis carried out on Kisumu – Kakamega, Kakamega – Kaburengu, Webuye – Kitale road and Athi River – Machakos Road. The existing pavement structure for the section between Kakamega and Kitale comprises of;
A: Kisumu (Junction A1/C34) – (Kaburengu/Webuye) A104 Junction: (a) wearing course: 50 – 75 mm AC; (b) base, 125 mm improved gravel: and (c) sub base: 175 mm Lime improved gravel. B: Kaburengu/Webuye (A104) Junction–Kitale: (a) wearing course: double surface dressing; (b) base: 130 mm GCS improved with cement; and (c) sub base: neat gravel
2. These road sections are in a very poor condition and are scheduled for reconstruction under this project. Table 1 shows the recommended traffic load classes for different sections of the project road in accordance with the Kenya Road Design Guidelines.
Table 1: Traffic load classes
Road Section Traffic Load Class Kisumu – Kakamega T2 Kakamega Town T2 Kakamega - Webuye T3 Webuye - Kitale T3
3. The proposed pavement structure comprises of A: Kisumu (Junction A1/C34) – Kiboswa: (a) wearing course: 100 mm AC Type I; (b) base: 150 mm GCS; and (c) sub base: 125 mm Cement and lime improved gravel. B: Kiboswa – Kakamega: (a) wearing course: 100 mm AC Type I; (b) base: 150 mm GCS; and (c) sub base: 125 mm Cement and lime improved gravel. C: Kakamega – Webuye: (a) wearing course: 50 mm AC; (b) base: 150 mm Cement improved gravel; and (c) sub base: 175 mm improved gravel. D: Webuye – Kitale: (a) wearing course: 50 mm AC; (b) base: 150 mm Cement improved gravel; and (c) sub base: 175 mm improved gravel.
81
E: Athi River – Machakos Turn Off Athi River – Machakos Turn Off comprises of a seven meter wide two lane-two way road. The existing pavement is in good condition except for two bridges which are currently under construction. The proposed project comprises of construction of a new two lane road for the entire 21 km stretch from the Athi River interchange to Machakos Turn Off. The newly constructed two lane road together with the existing two lane road will provide a four lane – two way road (dual carriageway). 4. Benefits expected to accrue from rehabilitation activities include savings to be made by motorists on vehicle operating costs, road maintenance costs and travel time costs. F: Bachuma Gate – Maji Ya Chumvi 5. This is a 53 km section of the Northern Corridor road that remains to be reconstructed between Mombasa and Nairobi. The traffic volume is 4,280 vpd and the road has never been upgraded or strengthened since its initial construction in the 1960’s except for an occasional resurfacing. Its pavement is therefore incapable of carrying the heavy traffic that is now flowing on the Nairobi – Mombasa highway. Although detailed designs are still under preparation, it is expected that the existing pavement will be scarified and remixed with fresh gravel and compacted as improved subgrade and sub-base, followed by a graded crushed stone base course (150-200mm) and asphalt concrete wearing course (80-100 mm) and a single surface seal. The pavement width will be widened to seven meters with shoulders at least 1.5 meters wide. Expected benefits comprise net savings in vehicle operation costs and travel time savings as well as savings in future maintenance costs. Assumptions 6. Net benefits were computed using the Highway Development and Management Model (HDM-4), which simulates highway cycle and vehicle operation condition and costs for multiple road design and maintenance alternatives. The discount rate was set to 12 percent and the evaluation period to 20 years. Maintenance and reconstruction costs were estimated in financial and economic terms (net of taxes and subsidies), economic cost being on average 78 percent of financial costs. Vehicle fleet characteristics and economic unit costs were defined for six vehicle classes reflecting 2008 costs, which are given in Table 2.
82
Table 2: Vehicle Fleet Characteristics, Economic Unit Costs (2008)
Car Light
Trucks Medium Trucks
Heavy Trucks Matatu Buses
Vehicle characteristics service life (years) 6 10 8 8 6 7 Km driven per year 20,000 60,000 80,000 60,000 100,000 150,000 Hours driven per year 400 1,300 2,500 2,500 1,600 3,000 Number of passengers 2 0 0 0 12 40 Gross vehicle weight (tons) 1.60 5.00 12.30 25.00 3.20 12.60 ESA loading factor 0.00 0.03 4.30 4.60 0.10 120.00 Economic unit costs
New vehicles price (US$) 19,300 34,783 65,217 135,263 24,325 New tire price (US$) 55 397 397 58 298 298
Fuel cost (US$/liter) 0.78 0.78 0.78 0.78 0.78 0.78 Lubricants cost (US$/liter) 2.08 2.08 2.08 2.08 2.08 2.08 Maintenance labor (US$/hr) 7.38 7.38 9.53 9.53 7.38 7.38 Crew cost (US$/crew-hr) 0.00 1.63 3.29 3.29
1.63
Passenger working time (US$/pa-hr) 1.80 0.67 0.67 0.67 0.67 0.67 Passenger non-working time (US$/pa-hr) 0.45 0.18 0.18 0.18 0.18 0.18 Cargo Time (US$/hr) 0.00 0.02 0.04 0.13 0.00 0.00 Annual interest rate (%) 12 12 12 12 12 12
*Matatu =mini-bus with 14 passengers Working Time 7. The value of working time for a car passenger was estimated considering an average economic annual income of KES 275,000 per annum and 2000 working hours per year (250 days at eight hours), and the value of working time for a public transport passenger was estimated as twice the minimum wage rate. The value of non-working time was considered as 25 percent of working time and the percentage of work journeys to be 35 for cars and 25 for public transport. The value of cargo time has been estimated on the basis of an average cargo value of US$400 per ton and cost of working capital of 15 percent. The following table presents typical road user costs of different roughness levels, in US$ per vehicle-km, and typical road user costs composition for road roughness equal to two International Roughness Index (IRI) (newly constructed asphalt surface).
83
Table 3: Typical Unit Road User average Costs(US$/vehicle-km 2008)
Roughness IRI
Car Light Medium Heavy Truck Truck Truck Matatu Buses
2 4 6 8 10 12 14 16
0.313 0.351 0.583 1.083 0.318 0.635 0.319 0.370 0.615 1.142 0.328 0.635 0.329 0.400 0.667 1.249 0.345 0.728 0.346 0.428 0.715 1.350 0.366 0.796 0.372 0.460 0.771 1.470 0.395 0.887 0.401 0.497 0.833 1.601 0.429 0.989 0.432 0.536 0.899 1.735 0.466 1.094 0.464 0.577 0.965 1.871 0.504 1.202
Typical Unit Road User Costs composition for Roughness =2.0 IRI (US$/vehicle-km RUC Component
Car Light Medium Heavy Truck Truck Truck Matatu Buses
Fuel and Oil Tires Parts and Labor Depreciation and Interest Crew time Passenger and cargo time
0.083 0.120 0.179 0.346 0.110 0.219 0.003 0.023 0.023 0.039 0.003 0.023 0.049 0.127 0.245 0.389 0.108 0.157 0.162 0.064 0.100 0.269 0.043 0.078 0.000 0.017 0.035 0.038 0.017 0.094 0.017 0.000 0.000 0.002 0.037 0.139
Total 0.313 0.351 0.583 1.083 0.318 0.635 *Matatu =mini-bus with 14 passengers
Road Maintenance Unit Costs 8. Table 4 shows the typical road maintenance costs which were considered in the HDM-4 analysis
Table 4: Maintenance Unit Costs
Road Work Cost per Km (M KES/Km)
Cost per Km (M US$/Km)
5 cm overlay Double surface Treatment Routine maintenance
5.00 3.00 0.07
0.071 0.043 0.001
Road Sections 9. Six homogeneous sections, between Kisumu (Junction A1/C34) and Kakamega, in terms of traffic and road condition were evaluated. The section between Kakamega and Webuye comprised of two homogeneous sections whereas the section between Webuye and Kitale comprised of five homogeneous sections. Table 5 presents the road section lengths, the proposed road works and estimated financial base investment costs. The road sections are currently in poor condition.
84
Table 5: Road section characteristics Section No.
Road Section Name Section Length (km)
Work Description Base Cost (M US$)
Base Unit Cost (M US$/ km)
Kisumu – Kakamega 1. Mamboleo Junction –
Kiboswa 6.1 Rehabilitation
57 1.234
2. Kiboswa to Majengo 9.6 Rehabilitation 3. Majengo to Stendikisa 7.6 Rehabilitation 4. Stendikisa to Chavakali 2.1 Rehabilitation 5. Chavakali to Amalemba 19.1 Rehabilitation 6. Amalemba to Stadium 1.7 Rehabilitation
Kakamega – Kaburengu 1. Kakamega - Malava 23.8 Rehabilitation
28.5 0.699 2. Malava - Kaburengu 17.0 Rehabilitation
Kaburengu – Kitale 1. Webuye to Misikhu 12.7 Rehabilitation
38.5 0.623 2. Misikhu to Kimilili 8.4 Rehabilitation
3. Kimilili to Kiminini 21.1 Rehabilitation 4. Kiminini to Kitale Jn with B2 17.2 Rehabilitation 5. Kitale Jn with B2 to Kitale Jn
with C48 2.4 Rehabilitation
Athi River – Machakos Turn-off 1. Athi River - Machakos 22 Upgrading 29
1.318 Bachuma Gate – Maji Ya Chumvi
1. Bachuma Gate – Maji Ya Chumvi
53.4 Rehabilitation 54.6 1.022
Traffic Data 10. Table 6 shows the projected traffic data for 2010 from those collected in April 2008 for the project road, for the Kisumu – Kakamega – Webuye – Kitale road; march 2010 data for the Athi River – Machakos turn-off; and 2003 data for the Bachuma Gate – Maji Ya Chumvi road section. The growth rates used were derived from historical and economic data and are shown in Table 7.
85
Table 6: 2010 AADT No. Road Section 2010 AADT (vpd) Kisumu – Kakamega 1. Mamboleo Junction – Kiboswa 3,791 2. Kiboswa to Majengo 2,430 3. Majengo to Stendikisa 2,430 4. Stendikisa to Chavakali 2,364 5. Chavakali to Amalemba 3,897 6. Amalemba to Stadium 3,897 Kakamega – Kaburengu 1. Stadium to Malava 1,199 2. Malava to Kaburengu 2,205 Webuye – Kitale 1. Webuye to Misikhu 2,372 2. Misikhu to Kimilili 2,372 3. Kimilili to Kiminini 1,148 4. Kiminini to Kitale Jn with B2 4,826 5. Kitale Jn with B2 to Kitale Jn with C48 4,826 Athi River – Machakos turn-off 8,639 Bachuma Gate – Maji Ya Chumvi 4,281
Table 7: Adopted growth rates Vehicle Category Growth Rate (%) Kisumu – Kakamega – Webuye
- Kitale Athi River – Maji Ya Chumvi
Saloon cars 10.5 6.9 Station wagons 8.6 Pick-up, Vans 9.2 Matatu, Minibus 5.1 4.0 Bus 4.0 Light Goods Vehicles 7.7 6.6 Medium Goods Vehicles 7.5 Heavy Goods Vehicles 7.5 Note: These growth rates were applied from 2010 to 2020 and thereafter assumed to reduce to 60 percent for the next 10 years. This is to cater for the redistribution of traffic/cargo to other roads within the transport corridors. Economic Evaluation 11. HDM-4 analysis was carried out for two different works. These include;
(a) “Without” project case basically involving minor routine and periodic maintenance such as grass clearance, pavement patching and crack sealing; and
(b) “With” project case also known as “base case scenario” basically involving widening and construction of a new pavement and subsequent routine and periodic maintenance.
12. Sensitivity Analysis was undertaken for each of the sub-sections and compared with the “Base Case” for the following scenarios:
86
(a) High capital cost scenario assuming that the cost of capital and that of recurrent works will be 20 percent higher than the base scenario costs;
(b) Low benefits scenario assumes that accrued benefits will be 20 percent lower than the
base scenario benefits; and
(c) High capital cost and low benefits scenario which assumes that the cost capital and that of recurrent works will be 20 percent higher than the base scenario and accrued benefits will be 20 percent lower than the base scenario benefits.
13. The Net Present Value (NPV) and the Economic Internal Rate of Return (EIRR) for the reconstruction are shown in Table 8. Conclusion 14. These results show that each of the four road sections will be economically viable (positive NPVs and EIRR>12), even under the worst situation when both costs go up by 20 percent and the benefits go down by 20 percent.
Table 8: Summary of NPV and EIRR
Road Section Benefits (US $ M) NPV(US$ M) EIRR (%) Kisumu – Kakamega Base Case 1.798 19.9
Costs up by 20% 1.844 18.5 Benefits down by 20% 1.581 19.1 Costs up by 20% and Benefits down by 20%
1.532 16.9
Kakamega – Webuye Base Case 30.664 63.3 Costs up by 20% 30.281 56.8 Benefits down by 20% 24.531 60.3 Costs up by 20% and Benefits down by 20%
23.766 50.0
Webuye – Kitale Base Case 10.643 42.3 Costs up by 20% 10.324 37.5 Benefits down by 20% 8.195 36.5 Costs up by 20% and Benefits down by 20%
7.956 34.2
Athi River – Machakos Turn Off Base Case 15.071 60.1 Costs up by 20% 14.729 52.7 Benefits down by 20% 11.715 51.2 Costs up by 20% and Benefits down by 20%
11.372 45.3
Bachuma Gate – Maji Ya Chumvi Base Case 1.91 25.0 Costs up by 20% 1.35 20.5 Benefits down by 20% 0.97 19.5 Costs up by 20% and Benefits down by 20%
0.41 15.1
Overall (roads) Base Case 60.09 20-63 %
87
REHABILITATION OF THE RUNWAY AND ASSOCIATED FACILITIES AT MOI INTERNATIONAL AIRPORT (MIA), MOMBASA 15. The economic evaluation has been carried out on the basis of social cost benefit analysis, with the objective to maximize the returns on investment in economic terms of this of this public expenditure. 16. The economic analysis has been based on incremental costs and incremental benefits, i.e. comparing the total costs “with the project” with “without the project” which is the base case or the do minimum case. All costs and benefits are valued in monetary terms and expressed in economic prices for avoiding distortion in the input prices of labor, materials and equipment due to market imperfection. The comparison has been worked on an annual basis for the entire analysis period, where the natural growth of all the related revenue streams will be restored, or else, it will freeze after a certain time span, without the project investment. Thus it is considered that in the without project situation certain value addition to the economy will be foregone. In the improved scenario there are also savings in the time value of both passengers and cargo. The results have been expressed in terms of EIRR and NPV. 17. The Economic Analysis has been carried out using spreadsheet analysis using the economic cost and benefit streams and computing the EIRR and NPV for economic evaluation of the project. The fundamental considerations for the economic analysis are presented as follows. 18. Assumptions
(a) It is considered that without the improvement proposal the natural growth of the airport activities will be at a depressed growth rate of three percent per annum. However, with the improved option the traffic will grow with the natural growth process;
(b) The standard conversion factor for the economic analysis is considered as 0.85; (c) The annual maintenance cost is considered as 1.5 percent of the capital cost; (d) The periodic maintenance cost, that is, every five years after completion of the project, is
considered as five percent of the capital cost; (e) With the improvement strategy, there will be savings in maintenance costs in the tune of
25 percent of the existing maintenance cost; (f) Construction period is three years and the analysis period is considered 20 years
including construction for EIRR estimation. Thus the analysis period is inclusive of construction period as well as benefit period; and
(g) A discount rate of 12 percent has been considered to determine NPV. Project Costs 19. The project costs include costs of main and secondary runway, taxiways, asphalt apron pavement, rigid apron pavement, drainage and slope stability and other general items. The project cost is found as KES4.75 billion in financial term. By applying the standard conversion factor the economic cost of the project stood as KES4.05 billion (or US$50 million excluding the cost of electrical works).
88
Routine and Periodic Maintenance Costs 20. The annual and periodic maintenance cost for the project is presented in the following Table 9. Both routine and periodic maintenance costs have been converted into economic costs by applying the standard conversion factor of 0.85.
Table 9: Periodic & Routine maintenance Cost: With project scenario (KES million) Maintenance Strategy
Financial Cost
Economic Cost
Routine Maintenance 54.62 46.43 Periodic Maintenance 182.07 154.76
Project Benefits 21. The project benefits considered in the economic analysis are: (a) Savings in time value of cargo; (b) Savings in time value of passengers; and (c) Value addition to the economy due to increase in international passengers.
22. The increased revenues due to higher level of domestic passengers are not considered as they are not adding to the economy and only a case of transfer price. In addition, the savings of fuel due to decreased delay of landing of aircrafts is not considered as it is difficult to segregate the part that is a real benefit to the Kenyan economy. Moreover, any additional benefit due to savings in the aircraft operating cost, which is not included in the analysis, will increase the robustness of the project.
Economic Internal Rate of Return (EIRR) and Net Present Value (NPV) 23. The spreadsheet model has been used for economic analysis and the following results have been found. The EIRR and the NPV at 12 per cent discount rate are determined using the model. The results obtained for the most likely scenario (base case) are presented in Table 10.
Table 10: Results of Economic Analysis (Base case), EIRR (%)
24. The economic internal rate of return is about 21 percent and the NPV at 12 percent discount rate is $47.7 million. A sensitivity analysis was carried out on the results as shown in Table 11 below. The EIRR for the worst case scenario with 25 percent reduction in benefits plus 25 percent increase in costs is 15.5 percent. Table 12 gives the annual cost and benefit stream for the base case scenario.
Activity EIRR (%) NPV KES Million @ 12% Runway rehabilitation 20.7 3,909 (or US$ 47.7 million)
89
Table 11: Results of Sensitivity Analysis
Sensitivity Cases EIRR (%) NPV KES Million @ 12%
Base Case 20.7 3909.0 Cost Increase by 25% 18.7 3332.5 Benefit Decrease by 25% 17.3 2124.9 Cost Increase by 25% & Benefit Decrease by 25% 15.5 1548.4
Table 12: The Cost and Benefit Streams, KES(M)
Year Capital Cost
Savings in Maintenance
Cost
Savings in Cargo Time Value
Savings in Passenger
Time Value
Value of addition
International Passenger Movement
Total Net Benefit
2009 1141.8 0 0.0 -1141.8 2010 1613.7 0 0.0 -1613.7 2011 1294.9 0 0.0 -1294.9 2012 159.9 159.9 159.9 2013 15.5 0.78 9.80 211 237.1 237.1 2014 15.5 0.87 10.28 404 430.9 430.9 2015 15.5 0.97 10.86 630 657.4 657.4 2016 15.5 0.97 11.45 892 919.5 919.5 2017 51.6 1.07 12.13 1195 1259.3 1259.3 2018 15.5 1.16 12.71 1545 1574.4 1574.4 2019 15.5 1.26 13.48 1757 1787.2 1787.2 2020 15.5 1.36 14.26 1989 2020.3 2020.3 2021 15.5 1.46 15.04 2242 2273.9 2273.9 2022 51.6 1.55 15.91 2518 2587.0 2587.0 2023 15.5 1.75 16.78 2819 2853.2 2853.2 2024 15.5 1.84 17.65 3099 3133.6 3133.6 2025 15.5 1.94 18.62 3399 3435.5 3435.5 2026 15.5 2.04 19.69 3725 3762.2 3762.2 2027 51.6 2.23 20.76 4075 4149.5 4149.5 2028 15.5 2.33 21.92 4453 4492.4 4492.4
Switching Value 25. The switching value of the project is estimated in conjunction with 25 percent higher costs. It is found that the project can withstand up to 45.2 percent reduction in benefit before the NPV reduces to zero at 12 percent discount rate.
90
Conclusion
26. The following conclusions can be drawn from the result of the economic analysis in terms of EIRR: (a) The rehabilitation of the runway is economically viable with an estimated EIRR of 21 percent; (b) Sensitivity analysis shows that the EIRR is robust even with 25 percent increase in costs and 25 percent reduction in benefits; and (c) The switching value analysis shows that the benefits would have to reduce by more than 45.2 percent before the project becomes unviable, even with 25 percent increase in costs.
91
Annex 8: Status of Implementation of the Road Sector Governance and Integr ity Action Plan under NCTIP
Kenya: Transport Sector Support Project6
6 Actions adopted for KTSSP are highlighted in bold.
Risk Control/Action Status 1. Collusion and bid rigging.
Client: (a) Use post-qualification, instead of pre-qualification, to avoid advance knowledge of the firms invited to bid.
Client: (a) Post-qualification has been used for three road contracts (also for one airport works contract). Two contracts have been awarded and contractor has commenced work (also the airport contract). The bid prices were competitive, slightly below the Engineer’s estimates. Road contracts attracted 3-4 qualified bids while airport contract had 7 bids. This is significantly more than the average number of bids received under pre-qualification method. Post-qualification has been adopted for works contracts under KTSSP
(b) Public dissemination of the overall roads program and business opportunities in the road sector, and reinforcement of the government’s and Bank’s commitment to fight corruption. This will also include publication of the project’s detailed and updated procurement plan on the website.
(b) The Client has held public dissemination workshops involving contractors and consulting firms. The Bank organized one with contractors and consulting firms. KeNHA has agreed to hold such regular public meetings. KRB publishes the annual road program financed through the Road Fund, has established a website, www.krb.go.ke and advertizes in both the print and electronic media the major contracts that are financed with Road Fund, many of which have been completed. (c) The latest road sector investment program (RSIP), discussed at a stakeholders meeting and endorsed it with minor comments. The RSIP will be published upon adoption by GoK.
Bank: (i) Engage an independent procurement specialist charged with reviewing bid specifications and bid evaluation reports for Bank-funded contracts, and report the findings directly to the Bank which the Bank may share with MoR and MoF as appropriate. (ii) Include the Bank’s audit rights in the works contracts. (iii) Ensure works contracts are large enough to attract international and large domestic firms to bid. (iv) Ensure that contracts are not deliberately split to circumvent the Bank’s prior review thresholds or to limit
Bank: (i) An independent qualified procurement specialist, financed by the Bank as an adviser to the Bank’s team, reviewed all the bid evaluation reports as received (no major anomalies or “red flags” were identified) under the on-going NCTIP. Based on his final report, additional control measures have been incorporated into the project activities, including carrying out stringent due diligence on the bidders before award of contracts. (ii) The Bank’s audit rights are in SBDs which were applicable to these contracts (hence included in the contracts) (iii) All major civil works contracts were more than US$30-US$40 million each and were sliced and packaged together which were too large for domestic firms. Only international firms were attracted.
92
competition.
(iv) All major works contracts under KTSSP are over US$25 million
Key monitoring indicator: Increase in the number of qualified bids obtained [Target 4-5] Baseline: 2-3 bids.
Current Status under KTSSP: Already, (a) use of post qualification criteria instead of pre-qualification has increased competition (KeNHA obtained respectively 9, 11 and 11 bids for Lot1, Lot2 and Lot3 contracts for the Kisumu – Kitale road section, with lowest bids being lower than the Engineer’s estimates); (b) the bid evaluation report will be subjected to an independent review by a Procurement Specialist; (c) with the help of the Bank’s GAC Squad, a pilot system is being put in place to conduct and build local capacity within selected CSOs to conduct independent audits of on-going or recently completed road projects and also undertake road user satisfaction surveys.
2. Fraud and Corruption in the Road Construction Industry.
Client: (a) Establish a transparent, well documented and consistently implemented local system for debarment of poor performers and contractors engaged in fraudulent and corrupt practice through NCA.
Client: (a) (i) This is also part of the function of the Public Procurement Oversight Authority (PPOA). (ii) The NCA to be established under the project will have specific provisions for legal registration of contractors, monitoring their performance and publishing names of poor performers and those that are debarred (without prejudice to World Bank’s own policies and procedures). The Cabinet has approved the establishment of both the NCA and strengthening the Engineers Registration Board (ERB). ERB will have the legal mandate to register professionals and engineering firms, assess their qualities, monitor their performance, and exercise rights to sanction poor performance or unethical behavior. The NCA Bill has been published awaiting Parliamentary discussion while the one for ERB is under preparation. (iii) Road contractors have formed and registered an association of road builders which is also committed to self regulation and oversight, and provides a common platform for dialogue with Government on construction issues.
(b) Strengthen the Recipient’s capacity to design and supervise the construction of roads, with particular emphasis on quality and contract management.
(b) The project has a training component and a technical assistance component to strengthen the capacity of KeNHA and road sector staff.
(c) Review on-going or recently completed contract(s) to check for fraud such as unbalanced bid, use of substandard materials, lower quantities used than paid for, and other non-compliance with specifications. (d) Determine through an independent survey why some
(c) and (d). Discussions are underway with a qualified consultant to undertake an independent audit of on-going and recently completed contracts, and with the help of an NGO/CSO conduct road user satisfaction survey. However, independent funding for these tasks has yet to be secured. The EC has been approached to consider funding this activity. Meanwhile, Bank’s GAC Squad has provided some seed money to conduct a pilot audit
93
bidders who buy bid documents choose not to submit bids.
and user satisfaction survey in collaboration with a CSO.
Bank: (i) A technical audit to be conducted independently of the implementing agency on all contracts.
Bank: With funding from Bank’s GAC Squad a pilot independent audit of the major works and supervision contracts is planned (see comment above) which will serve both the Bank and the Borrower by creating local capacity with a CSO/NGO and enhance the demand side of good governance.
(ii) Strengthen use of contractual remedies, such as performance bonds, in case of project delays and poor performance.
Performance bonds are now required to be unconditional and would be invoked along with other remedies should the contractor perform poorly.
Key monitoring indicator: Percentage of government-funded projects completed on time, within budget, and in compliance with specifications (measured by periodic review of random sample of large projects). Target: >60% Baseline: Less than 40percent completed on time and within budget.
KTSSP will support capacity building of the NCA and ERB to monitor Government funded projects.
3. Truck Overloading – lack of enforcement and corruption.
Client: (a) Review current efforts to address corruption in control of axle loads, recommend appropriate measures to mitigate such risks, and examine need for additional weight control infrastructure, preferably automated.
Client: (a) The private sector operators are managing 3 weigh stations on a pilot basis. Lessons learnt will be incorporated in the planned long term management contracts. In addition, through an Administrative Order, the use of four-axle trucks is banned and the Order has been effectively implemented.
(b) Ensure that road designs are commensurate with the prevailing traffic and axle load projections.
(b) All recent road pavement designs are based on prevailing traffic and axle loads as measured through physical surveys and projected through the design life. In addition design manuals have been developed with the assistance of EC. KeNHA has also developed road maintenance manual and both are in use.
(c) Institute a fine that is commensurate with damages to the roads plus additional deterrent measures to ensure compliance.
(c) The penalty scheme has been reviewed and legislation passed that prescribes considerable increases in penalties (Traffic Act). The government will periodically revise the regulations as needed and enforce the rules.
(d) Establish quarterly and random independent reviews of the weigh stations’ activities including fines imposed and collected.
(d) A survey of the three pilot weigh stations managed by the private sector is yet to be undertaken.
Key monitoring indicator: At least 50 percent decrease in
94
the percentage of overloaded trucks traveling on Northern Corridor. Baseline: Will be established once the first automated axle-load weighing station is constructed and functioning – expected in one year from credit effectiveness.
4. Delays in Value Added Tax (VAT) refunds, causing inflated prices in construction bids.
Client: (a) Assess the amount of VAT outstanding for reimbursement to contractors and liaise with MoF and KRA to put in place a system to minimize delays. (b) Provide guidance notes and instructions to the contractors on VAT procedures and timeline Key monitoring indicator: Time elapsed between receipt of required VAT documentation by KRA and issue of refund to contractors decreased by at least 50 percent. Baseline: To be established by MoR after survey of local contractors (within 3-6 months of effectiveness).
Client: KRA mounted regular workshops for contractors to explain procedures and resolve any issues. This is bearing fruit as the contractors have presented their grievances and under the latest budget, Government has agreed to reduce VAT on works contract by half and also instituted a strict policy of refunds by KRA within 120 days.
5. Weak due diligence on bidders. The integrity and past performance of contractors is a key determinant of fraud and corruption risks.
Client: (a) Recipient must increase its efforts in conducting due diligence of bidders, particularly with regard to past performance, financial and technical capacity, equipment holding, and compliance with tax laws and site safety regulations.
(a) Greater scrutiny of bidders is being carried out than before. This has raised the awareness within Government for the importance of this exercise and has contributed toward better contract documentation and fairer bids than the case in the past.
(b) Undertaking performance reviews to ensure poor performers are identified.
(b) The NCA and ERB will augment scrutiny of civil works bidders and consulting firms/engineers.
Key monitoring indicator: Extra due diligence in verifying qualifications and past performance is carried out by the Recipient on all preferred bidders, as verified in the bid evaluation reports. Baseline: Insufficient due diligence on companies bidding for roads contracts.
6. Absence of robust cost estimates.
Client: (a) Cost estimates should be developed from first principles and adjusted for prevailing market conditions and, if possible, also comparable to markets in the region (i.e., East Africa).
Client: The report on road construction unit costs prepared by an international consultant now provides a basis on preparing cost estimates by KeNHA, KeRRA and KURA. JICA has provided support for two experts working with KeNHA in implementing the report.
95
(b) Hire a consultant to develop new, robust cost-estimates and regularly update the cost methodology and estimates as necessary to reflect prevailing market conditions. (c) Exercise the audit rights under the contract to review true cost structure of recently completed project. Key monitoring indicators: Robust cost estimates developed; capacity developed in National Highway Authority to monitor actual costs obtained in the field.
The Government recently organized and conducted, with the help of an international consultant, a training workshop on Value Engineering at the Kenya Institute of Highway and Building Technology to benefit senior and middle level road sector staff. The Institute plans to conduct similar workshops on a regular basis in the future to sensitize participants on concepts and principles of Value Engineering.
Baseline: There is no systematic monitoring of unit costs by the Ministry of Roads and Public Works.
7. Weak capacity to detect and deal with fraud and corruption.
Bank: (a) Facilitate training workshops focused on identifying red flags and establishing controls in procurement, financial management, and human resource management particularly in the road sector, including prevention of fraud in works contracts.
Bank: Kenya Anti-Corruption Commission conducts regular workshops for selected sectors. The Bank team is working with the Preventive Services Unit of INT to organize a specific training workshop for the road sector staff focusing on “red flags” and preventing fraud in works contracts.
Key monitoring indicators: At least three (3) key people from each of the four (4) Project Technical Teams have participated in the training workshops. Baseline: No training has taken place.
8. Weak complaint handling mechanisms
Client: (a) Strengthen systems to handle and effectively respond to complaints in a timely manner.
Client: With the support of KfW (Germany) Kenya Anti-Corruption Commission is rolling out an internet based complaint lodging system for all sectors. The project will facilitate establishment of the NCA and support building capacity in that Board and ERB. KTSSP will augment capacity building of NCA and ERB.
(b) Establish and implement a communications strategy to build awareness of fraud and corruption and provide the means for all parties to register their complaints.
96
(c) Encourage the appropriate authority to institute strong whistleblower protection regulations.
Key monitoring indicators: (1) Internet-based complaint lodging system established. (2) NCA established and functioning satisfactorily as judged from its annual reports. Baselines: (1) There is no Internet-based complaint lodging system. (2) There is no Construction Authority to register and monitor contractors.
9. Weak roads management capacity.
Client: (a) Strengthen planning, programming, budgeting, execution, monitoring and evaluation capacity of the road agency.
Client: Three autonomous roads authorities - KeNHA, KeRRA and KURA have been established and MoR has transferred the management of the entire road network to them. The authorities have attracted qualified professionals from the open market. Project will finance a TA and training as needed. All key positions in the management structure of the three authorities, including the Chief Executives, were selected competitively.
(b) Ensure the key positions for the three roads authorities are selected through a competitive process based on their qualifications against the established TOR.
Key monitoring indicators: (1) Key staff in the National Roads Authority, Rural Roads Authority, and Urban Roads Authority is in place, and trained in work program and budget planning, execution, monitoring and evaluation. (2) Annual work programs, budgets and progress reports are prepared and published. Baseline: The three Roads Authorities are not yet fully functional.
10. Overall transparency and social monitoring of the road construction
Client, Bank, Civil Society: (a) Take additional practical steps to foster a culture of transparency and probity in the road sub-sector. (b) Establish a communications strategy through radio programs and talk shows where the issues facing the road sector are discussed and the general public is asked to participate through expressing their views and comments.
A Marketing Research Consultant has been approached to prepare a draft proposal for conducting a road user satisfaction survey which will involve an NGO/Civil Society Organization. The project has been selected to be one of the pilots in the Africa Region for which over and above the intended enhancement of disclosure, beneficiary feedback will be sought particularly on the impact of the project. The funding was not secured in time before the close of FY10. Alternative source of financing is being explored. The ministry of Roads is now publishing a quarterly report regularly for
97
public dissemination and awareness. KeNHA has established a Communication Unit, and it is adequately staff. This Unit has organized talk shows on TV and including profiling the activities KeNHA is/plans to undertake. Kenya Roads Board has set for itself a performance standard of responding satisfactorily within 14 days any inquiry from the public, and this is part of its performance contract with the Government.
Key monitoring indicator: (i) Communication strategy in place and (ii) at least two road-user satisfaction surveys carried out during project implementation, by NGO/Civil Society Organization. Baseline: No system in place for transparency and social monitoring of road construction outside of Ministry or Roads.
98
Annex 9: Roads Sub Sector Investment Plan
KENYA: Transport Sector Support Project
1. The Roads sub-sector has undergone tremendous reforms over the last decade aimed at providing a high quality road network to support Kenya economic development. Several key reforms have been achieved, but there has been no road investment plan in place to guide investment decisions. 2. The Roads Sub Sector Investment Plan (RSIP) is a legal requirement. The Kenya Roads Act 2007 requires that every five years the Minister responsible for roads to prepare a road investment program. 3. Preparation of the RSIP. An inter-ministerial committee was established in 2007 to prepare the country’s first comprehensive RSIP. The preparation of the RSIP was slowed down due to inadequate critical road network data, which revealed an urgent need to develop strong road management information systems. The RSIP was developed through a consultative process including stakeholders’ participation to create ownership and form a basis for future evaluation on accountability to the taxpayer. The road maintenance and development programs contained in the RSIP have been prioritized on economic considerations using the internationally recognized Highway Development Module (HDM-4) and further moderated to incorporate social and political considerations, consistent with roads sub sector policy. The model was calibrated to Kenyan conditions. The RSIP Table 4 and Table 1 in Annex 8 includes: (a) an outline 15 year investment plan; and (b) a detailed five year implementation program, and covers all road works from construction of new roads to rehabilitation and maintenance utilizing all resources that are expected to be made available.
4. The total road network in the country totals 160,886 km and has all been considered under this RSIP. Of this total length, 61,945 km are classified roads while 98,941 km are unclassified. Currently, 11,197 km are paved, while 149,689 km are of earth or gravel standard. According to the Road Inventory and Condition Survey 2009, 11 percent, 33 percent and 56 percent of the roads are in good, fair and poor condition respectively.
5. Financing of the Road Sub-Sector. Presently, funding for the road sub-sector is obtained from six sources, namely: (a) the Exchequer or national budget, (b) the Road Maintenance Levy Fund (RMLF); (c) transit tolls; (d) Local Government Transfer Fund (LGTF); (e) Agricultural Cess; and (f) Development Partners. Total funding of the Road sub-sector has improved greatly increasing from KES46.02 billion in the FY07 to KES104.2 billion in FY11. The funding to the Road sub-sector is projected to continue increasing, to reach KES123 billion in FY15.
6. Expenditure requirements. The projected expenditure for the first five years of the RSIP is KES534.6 billion. Of this amount, committed and ongoing projects will cost KES252.7 billion. Allocation has been made of KES14.5 billion to cater for road management issues (capacity building, road safety, axle load enforcement, environmental sustainability, monitoring and evaluation, feasibility and design studies); public transport facilities; non motorized transport
99
(NMT); and drainage. The implementation of the first five-year RSIP will improve 14,644 km that will involve the following:
(a) Capacity improvements (dualling and lane additions) of 182km at KES 31billion. (b) Construction of 173km of new roads at KES 24 billion. (c) Upgrading 4,004km to bitumen standards at KES 158 billion. (d) Upgrading 1,486km to Low Volume Seal Roads at a cost of KES 20 billion. (e) All network routine maintenance - 160,866 km. (f) All backlog maintenance shall be addressed on the paved ABC roads. (g) By 2014, the backlog maintenance on the paved road network will have been reduced to
KES 46 billion.
7. Delivery of RSIP. The implementation of the RSIP will be carried out by the road agencies and through private sector participation. The road agencies are expected to outsource from the private sector most of the works, goods and services. 8. A monitoring and evaluation (M&E) framework has been developed, to enhance transparency and accountability in the delivery of the program. The findings of the M&E exercise will be disseminated to all key stakeholders including the government, the people of Kenya and development partners. 9. Findings and Recommendations:
(a) Funds for maintenance are inadequate. Current allocation for maintenance is KES20 billion annually against a requirement of KES 40 billion. In Phase I of RSIP, approximately 40 percent of the funds have been allocated to clear current commitments while the balance is to address routine, periodic and backlog maintenance. There are therefore no resources to address critical infrastructure needs particularly traffic congestion in urban areas.
(b) Over 93 percent of cargo and passenger are transported by road leading to high transport costs and damage to the road infrastructure. A deliberate effort to revamp the railway system is required.
(c) The current local contracting capacity is inadequate for sustainability of delivery of works. A deliberate effort to increase the capacity of local contractors, consultancy firms and Road Agencies, train and empower them to fully participate in road development and maintenance, is required.
(d) M&E is crucial to tracking the progress of implementation of the RSIP, and will be useful in implementing the second phase of the RSIP.
(e) Each Road Agency has to build capacity to collect its own data for planning and designing.
(f) Research and development on suitable/alternative construction materials and technologies is important for achievement of objectives of RSIP.
100
Table 1: Road Sector Investment Plan 2010-2024 Source of
Funds
Work Type Surface
Class
2010-2014
(Phase 1)
2015-2019
(Phase 2)
2020-2024
(Phase 3)
Road Maintenance Levy Fund
(RMLF)
KES (m)
Km KES (m)
Km KES (m)
Km
Routine Paved 12,645 11,197 3,982 16,854 6,713 32,143
Unpaved 48,434 149,689 61,726 144,205 59,802 133,331
Periodic Paved 73,661 4,769 120,705 8,047 239,175 15,945
Unpaved 7,363 1,613 18,492 4,623 8,372 2,093
Rehab. Paved 41,526 721
Unpaved
Road Management 11,075 12,500 12,500
Total RMLF 153,178 167,267 258,930 174,450 326,561 183,512
Development Budget
Rehabilitation Paved 126,478 3,425
Unpaved
Upgrade to bitumen Unpaved 155,866 4,004 165,590 4,115 228,459 5,711
Upgrade to LVSR Unpaved 5,163 1,479 95,156 6,344 108,075 7,205
Capacity Improv. Paved 31,020 182 103,475 556 140,265 754
Construction Unpaved 24,194 173 29,000 550 39,000 800
Bridges Unpaved 896 1,205
Public Trans. Fac. 850
NMT facilities 700 750 750
Storm water drainage 650 1,500 1,500
Proposed Devt 16,771 25,000 25,000
Total Development 361,692 9,263 421,367 11,565 544,253 14,471
PPP Public Trans. Fac. 10,000 10,000
PPP Total 10,000 10,000
Grand Total 534,871 176,530 692,297 186,015 880,815 197,983
Source: Road sector Investment Plan 2010-2024
101
10. RSIP and Allocation of Funds: The details with respect to allocation of funds by category of road are provided in Table 2.
Table 2: Road Fund Distribution by Road Category
Funds Source Road Sub network Phase 1 2010-2014
Phase 2 2015-2019
Phase 3 2020-2024
Development National
63%
39%
40% Rural
21%
39%
40%
Urban
11%
11%
12% Game Park roads
0%
5%
4%
Other Development projects
5%
6%
4% Total
100%
100%
100%
RMLF National
39%
32%
36% Rural
36%
28%
41%
Urban 23,139 15%
28%
14% Game Park roads
2%
7%
5%
Road Management Issues
7%
5%
4% Total
100%
100%
100%
Source: Roads Sector Investment Plan 2010-2024
102
Annex 10: Map No. IBRD 38484
KENYA: Transport Sector Support Project
EASTERNEASTERN
RIFT VALLEYRIFT VALLEY
COASTCOAST
NORTHNORTHEASTERNEASTERN
NYANZANYANZAKarunguKarungu
LodwarLodwar
LokicharLokichar
KangatetKangatet
KitaleKitale
EldoretEldoret
ButereButere NyahururuNyahururuFallsFalls
KerichoKericho
LolgorienLolgorien
MagadiMagadi
NamangaNamanga
KonzaKonza
MachakosMachakos
KibweziKibwezi
VolVol
TsavoTsavo
KwaleKwale
GarsenGarsen
BodheiBodhei
KolbioKolbioBuraBura
NguniNguni
IkuthaIkutha
KituiKitui
MackinnonMackinnonParkPark
LokichokioLokichokio
KarunguKarungu
KakumaKakuma
EmbuEmbu
NanyukiNanyuki
ThikaThika
GilgilGilgil
MbalambalaMbalambala
Garba Garba TulaTula
MandoMandoGashiGashi
WajirWajir
El WakEl Wak
TarbajTarbaj
RamuRamu
BunaBuna
MoyaleMoyaleSololoSololo
MarsabitMarsabit
North HorrNorth Horr
South HorrSouth Horr
MaralalMaralalKapedoKapedo
MarigatMarigat
Archer’sArcher’sPostPost
IsioloIsiolo
ManderaMandera
KisumuKisumu NakuruNakuru
GarissaGarissaNyeriNyeri
KakamegaKakamega
CENTRALCENTRAL
WESTERNWESTERN
NaivashaNaivasha
NAIROBI AREANAIROBI AREANAIROBINAIROBI
Karungu
Lodwar
Lokichar
Kangatet
Kitale
Eldoret
Butere NyahururuFalls
Kericho
Lolgorien
Magadi
Namanga
Konza
Machakos
Naivasha
Kibwezi
Vol
Tsavo
Kwale
Shimoni
Malindi
Garsen Lamu
Bodhei
KolbioBura
Nguni
Ikutha
Kitui
MackinnonPark
Lokichokio
Karungu
Kakuma
Embu
Nanyuki
Thika
Gilgil
Mbalambala
Garba Tula
MandoGashi
Wajir
El Wak
Tarbaj
Ramu
Buna
MoyaleSololo
Marsabit
North Horr
South Horr
MaralalKapedo
Marigat
Archer’sPost
Isiolo
Mandera
Kisumu Nakuru
Garissa
Mombasa
Nyeri
Kakamega
NAIROBI
CENTRAL
NAIROBI AREA
EASTERN
RIFT VALLEY
COAST
NORTHEASTERN
NYANZA
WESTERN
ETHIOPIA
SOMALIA
TANZANIA
UGANDA
SUDAN
Ng’iro
Milgis
Suam
Turk
wel
Tana
Mara
Galana
Athi
Ewaso
Thua
Tsavo
Loga Bogal
Lak Dera
Lak Bor
INDIANOCEAN
Lake
Victor ia
LakeTurkana
L. Naivasha
To Juba
To Dila
To Imi
To Kismayo
To Dar Es Salaam
To Moshi
To Arusha
To Musoma
To Kampala
34°E 36°E 38°E 40°E 42°E
34°E 36°E 38°E 40°E 42°E
2°S
0°
2°N
4°N
4°S4°S
2°S
0°
2°N
4°N
Mt. Kenya (5,199 m)
More Detail BelowMore Detail Below
KENYA
0 40 80 160120
0 40 80 120 Miles
200 Kilometers
IBRD 38484
APRIL 2011
KENYA
TRANSPORT SECTOR SUPPORT PROJECTCLASS A ROADS
CLASS B ROADS
PROVINCE BOUNDARIES
INTERNATIONAL BOUNDARIES
CITIES AND TOWNS
PROVINCE CAPITALS
NATIONAL CAPITAL
RIVERS
This map was produced by the Map Design Unit of The World Bank.The boundaries, colors, denominations and any other information shownon this map do not imply, on the part of The World Bank Group, anyjudgment on the legal status of any territory, or any endorsement oracceptance of such boundaries.
Rehabilitation ofMombasa Airport
Rehabilitation ofMaji Ya Chumvi–Bachuma Gate
Construction ofMachakos Turnoff–
Athi River
Rehabilitation ofKitale–Kisumu
Construction ofInterchanges