for official use only - world bank · 2016. 7. 13. · 12 ismail abaza street, cairo, arab republic...

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 58890-EG

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN

IN THE AMOUNT OF

US$200 MILLION

TO THE

ARAB REPUBLIC OF EGYPT

FOR THE

SECOND INTEGRATED SANITATION AND SEWERAGE INFRASTRUCTURE PROJECT

June 6, 2011

Sustainable Development Department

Middle East and North 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.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective April 13, 2011)

Currency Unit = Egyptian Pound

LE1 = US$0.173

US$1 = LE 5.96

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

ARP

ASBR

Abbreviated Resettlement Plan

Advanced Sequential Batch Reactors

BD Bidding Document

BOD Biological Oxygen Demand

DA Designated Account

DO Dissolved Oxygen

EC European Commission

EEAA Egyptian Environmental Affairs Agency

ERR Economic Rate of Return

ESAF Environmental and Social Assessment Framework

ESMMF Environmental & Social Management & Monitoring Framework

ESW Economic Sector Work

EU European Union

EWRA Egyptian Water Regulatory Agency

FC Fecal Coli form

FM Financial Management

FMS Financial Management Specialist

FY Fiscal Year

GDP Gross Domestic Product

GOE Government of Egypt

GIZ German Society for International Cooperation

HCWW Holding Company for Water and Wastewater

IBRD International Bank for Reconstruction and Development

ICB International Competitive Bidding

IDA International Development Association

IFR Interim Financial Report

ISSIP Integrated Sanitation and Sewerage Infrastructure Project

IWSP

JSDF

Improved Water and Sanitation Program

Japan Social Development Fund

LAU Local Administrative Unit

LE Egyptian Pound

M&E Monitoring and Evaluation

MOHP Ministry of Health and Population

MOHUUD Ministry of Housing, Utilities and Urban Development

MOPIC Ministry of Planning and International Cooperation

MWRI Ministry of Water Resources and Irrigation

NCB National Competitive Bidding

NOPWASD National Organization for Potable Water and Sanitary Drainage

O&M Operation and Maintenance

OP Operational Policy

PAD Project Appraisal Document

PAP Project Affected Persons

PFS Project Financial Statement

PIC Public Information Center

PID Project Information Document

PIM

PIU

PMCF

Project Implementation Manual

Project Implementation Unit

Program Management Consulting Firm

PMU Project Management Unit

PS Pumping Station

QA Quality Assurance

RBC

RAP

Rotating Biological Contractor

Resettlement Action Plan

RPF Resettlement Policy Framework

RSU Rural Sanitation Unit

SA Social Assessment / Special Account

SBD Standard Bidding Documents

SIL Specific Investment Loan

TA Technical Assistance

TOR Terms of Reference

TSS Total Suspended Solids

TTL Task Team Leader

UASB Up flow Anaerobic Sludge Blanket

UNICEF The United Nations Children‟s Fund

WQ Water Quality

WSC Water and Sanitation Company

WUA Water Users‟ Association

WWTP Wastewater treatment plant

Vice President: Shamshad Akhtar

Country Director: A. David Craig

Sector Director Laszlo Lovei

Sector Manager: Francis Ato Brown

Task Team Leader: Parameswaran Iyer

Table of Contents

I. Strategic Context .................................................................................................................... 1

II. Project Development Objectives............................................................................................ 4

III. Project Description................................................................................................................. 4

IV. Implementation ...................................................................................................................... 6

V. Key Risks ............................................................................................................................... 8

Annex I: Results Framework and Monitoring .............................................................................. 15

Annex II: Detailed Project Description......................................................................................... 18

Annex III: Implementation Arrangements .................................................................................... 22

Annex IV: Operational Risk Assessment Framework (ORAF) .................................................... 30

Annex V: Implementation Support Plan ...................................................................................... 34

Annex VI: Team Composition ...................................................................................................... 36

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.

PAD DATA SHEET


THE SECOND INTEGRATED SANITATION AND SEWERAGE

INFRASTRUCTURE PROJECT

PROJECT APPRAISAL DOCUMENT

MIDDLE EAST AND NORTH AFRICA

Sustainable Development Department

Date: June 6, 2011

Country Director: A. David Craig

Sector Director: Laszlo Lovei

Sector Manager: Ato Brown

Team Leader: Parameswaran Iyer

Project ID: P120161

Lending Instrument: SIL

Sectors: Sanitation (20%); Sewerage (80%)

Themes: Rural Services and Infrastructure (P)

Environmental Assessment

Screening Category: B

Project Financing Data:

Proposed terms:

[X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other:

Source Total Amount (US$M)

Total Project Cost:

Cofinancing:

Total Bank Financing:

IBRD

IDA

New

Recommitted

Others

310

110

200

Borrower:

Arab Republic of Egypt

Implementing Agency:

Ministry of Housing, Utilities and Urban Development,

12 Ismail Abaza Street, Cairo, Arab Republic of Egypt

Responsible Sub-Agencies:

1. National Organization for Potable Water and Sanitary Drainage (NOPWASD)

Arab Republic of Egypt.

Contact Person: Eng. Samia M. Saleh Badr El Din

Telephone No.: +202-33042922

ii

2. Holding Company for Water and Waste Water (HCWW)

Arab Republic of Egypt.

Contact Person: Eng. Mamdouh Raslan

Telephone No.: +202-24583591

Estimated Disbursements (Bank FY/US$ m)

FY 2012 2013 2014 2015 2016 2017

Annual 0 25 40 60 60 15

Cumulative 0 25 65 125 185 200

Project Implementation Period: Start: January 2012 End: December 2016

Expected effectiveness date: January 1, 2012

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:

Does the project require any exceptions from Bank policies?

Have these been approved by Bank management?

Is approval for any policy exception sought from the Board?

○ Yes No

○ Yes ○ No

○ Yes No

If yes, please explain:

Does the project meet the Regional criteria for readiness for

implementation?

Yes ○ No

Project Development Objective:

The Project Development Objective is to provide targeted populations in the Governorates of Menoufia,

Sharkeya, Assiut and Sohag with increased access to improved sanitation and sewerage services.

Project description

The Project consists of the following parts:

Component 1: Construction of wastewater infrastructure systems in selected village clusters in the

Governorates of Menoufia and Sharkeya, including wastewater treatment plants, collection networks,

customer connections, and decentralized treatment systems.

Component 2: Construction of wastewater infrastructure systems in selected village clusters in the

Governorates of Assiut and Sohag, including wastewater treatment plants, collection networks, customer

connections, and decentralized treatment systems.

Component 3: Support HCWW and NOPWASD in project implementation, monitoring and evaluation and

management, including construction supervision and environmental management services.

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)

Yes ○ No

○ Yes No

○ Yes No

○ Yes No

iii

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 Waters (OP/BP 7.50)

Projects in Disputed Areas (OP/BP 7.60)

○ Yes No

○ Yes No

Yes ○ No

○ Yes No

○ Yes No

○ Yes No

Conditions and Legal Covenants:

Loan Agreement

Reference Description of Covenant When Due

1. Schedule 2 Section

I A. 4

An interagency agreement has been executed between the

National Organization for Potable Water and Sanitary

Drainage (NOPWASD) and the Holding Company for

Water and Wastewater (HCWW) in form and substance

acceptable to the Bank.

45 days after

effectiveness

2. Schedule 2 Section

I A. 4

The Borrower has adopted the updated Project

Implementation Manual (PIM), in form and substance

acceptable to the Bank.

45 days after

effectiveness

3. Section IV. B 1 No withdrawal shall be made (a) for payments prior to the

date of the Loan Agreement; or (b) for works under the

project until the Borrower has acquired and installed

accounting software for the Project, acceptable to the Bank.

Disbursement

condition

4. Schedule 2, Section

I B 1

The Borrower shall:

(a) prepare and disclose, prior to the commencement of

any construction works requiring land acquisition

under the Project, a Resettlement Action Plan,

acceptable to the Bank, in accordance with the RPF;

(b) Implement the Resettlement Action Plan, including,

unless otherwise agreed with the Bank, payment in

full of compensation to all affected people prior to

commencing of any related works. Except as

mutually agreed upon between the Borrower and the

Bank, the Borrower shall not amend, suspend or

abrogate any of the provisions of the Resettlement

Action Plan.

Implementation

1

I. Strategic Context

A. Country Context

1. Egypt is undergoing a process of in-depth political and social transformation in the

aftermath of the January 2011 revolution. Experience in other countries suggests that this

process may unfold over a relatively long period of time, during which the situation will remain

fraught with significant risks and uncertainties - and during which external assistance can yield

disproportionate social returns. Indeed, poverty, living conditions, citizen participation, and

governance have come to the forefront of the political and social debate, with most of the

discussions focused on "how to" effect rapid change. In spite of the political turmoil, Egypt

retains its solid administrative capacity, including the capacity to implement externally financed

operations.

2. With a population of 80 million people of which about half live in rural areas, Egypt has

achieved steady economic growth over the past decade. The recent international economic

slowdown has reduced the country‟s GDP growth rate from over 7 percent in 2006-2008 to 4.5

percent in 2009, but the economy was showing positive signs of recovery from the mild effects

of the global crisis, the GDP registering a 5.6 percent increase in the first half of FY2011, up

from 5.1 percent in FY10. Growth is expected to stand at 2 percent for FY2011, reflecting the

short-term impact of the political events. It is expected to rebound to 4 percent in FY2012, as

tourism receipts recover and business and financial activities resume. Egypt is expected to face,

however, a large fiscal deficit in FY2011, in excess of 10 percent of GDP from 8.1 percent of

GDP in FY2010 and significant pressures on its balance of payments.

3. Regional disparities have marked Egypt‟s development, with greater poverty and less

economic development in Upper Egypt compared to the heavily populated Delta region. Rural

Upper Egypt has the highest incidence of poverty (34 percent) in the country. While poverty fell

between 1995/96 and 1999/2000 for the rest of Egypt, it increased in rural Upper Egypt, clearly

indicating that the overall economic growth in the country has not resulted in poverty reduction

in Upper Egypt.

4. The Government of Egypt (GoE) has ambitious plans for economic development to

improve living standards in the country. The Introduction to the Sixth Five Year Plan1 specifies

the “prioritizing of public policies and investments and channeling them into two venues”: (a)

intensifying investments in infrastructure projects, where investments on potable water and

sanitation would exceed a quarter of total investments; and (b) achieving regional balance by

allocating 42 percent of local public investments to fostering development in Upper Egypt

Governorates as part of the national program for the region's development.

1 Preface to Sixth Five Year Plan, Ministry of Economic Development , Government of Egypt website

2

B. Sectoral and Institutional Context

Sanitation in Egypt

5. With almost full coverage of water supply in urban as well as rural areas, the safe

disposal of wastewater in Egyptian villages now represents a major challenge to the environment

and to public health. While at least 85 percent of rural households have some type of sanitary

facility (usually a septic tank), only a limited percentage of villages have facilities for safe

collection, conveyance, and treatment of wastewater. Currently, wastewater is discharged

(usually without treatment) to agricultural drains and sometimes to canals. Such water pollution

in drains and canals is a grave threat to public health. Further, higher subsurface water levels,

especially in the Delta, make most septic tanks an ineffective means of safe disposal of

wastewater.

6. GoE attaches high priority to safe disposal of wastewater in rural areas and has prepared

a “National Rural Sanitation Master Plan”2, which targets comprehensive sanitation coverage to

the populations of all rural Governorates by 2037, with a required investment of LE62 billion. In

addition, the Government‟s 2008 “National Rural Sanitation Strategy”3 seeks to prioritize sector

investments and provide a roadmap to comprehensive coverage of rural sanitation. Thus, in

recent years, significant investments have been made to bridge the gap between supply and

demand for wastewater treatment in rural areas, with the Government committing to invest LE20

billion in the period 2007-2012 exclusively for rural sanitation. Despite these efforts, there is still

a significant gap between urban and rural sanitation coverage, which are estimated at 70 percent

and 25 percent respectively.

7. As part of the Government‟s sector reform agenda, the Holding Company for Water and

Wastewater (HCWW) was created in 2004, followed by the Egypt Water and Wastewater

Regulatory Agency (EWRA). Twenty three Water and Sanitation Companies (WSCs) have

subsequently been established at the Governorate level as subsidiaries of HCWW. The reform

agenda was taken forward recently with the approval and announcement of “Development

Policies: Water and Wastewater Sector in Egypt”43

in September 2010, which provides a

framework and direction for further sector development and as a guide for institutions operating

in the sector.

8. One of the principal objectives of the new policy is “to achieve financial sustainability of

the service providers, so as to enable them to improve their efficiencies and increase their levels

of service”. The Egyptian water and wastewater sector has operated “under a regime of

restricted pricing policies, limited investment programs, and under-financing of operational

activities”. The Policy envisages that HCWW‟s subsidiary WSCs will submit business plans to

EWRA, indicating, inter alia, when they will achieve financial sustainability. EWRA will

permit periodic tariff increases to enable the sector to gradually move towards full cost recovery.

Until such time full cost recovery is achieved, government will provide annual subsidies to the

2 National Strategy for Water Supply and Sanitation: Compilation of Water and Sanitation Master Plans, HCWW report for the

European Commission, May 2009. 3 Egypt National Rural Sanitation Strategy, Holding Company for Water and Wastewater, September 2008 4”

Development Policies for the Water and Waste Water Sector in Egypt” MOHUUD, policy paper, September 2010

3

WSCs to cover funding gaps to meet operating expenses, as well as new capital investments and

replacement of assets.

9. In support of GoE‟s sector reform agenda, the Bank is supporting the Integrated

Sanitation and Sewerage Infrastructure Project (ISSIP Loan No. 7512-EGT, for US$120 million)

for improvements in sanitation in three Governorates in the Delta region. The proposed project

will continue Bank support to the sector in priority Governorates identified by government.

Institutional Framework

10. The main institutional players in the water and sanitation sector are:

The Ministry of Housing, Utilities and Urban Development (MOHUUD) is in charge

of the water and sanitation sector and is primarily responsible for policy formulation,

monitoring and coordination.

The National Organization for Potable Water and Sanitary Drainage (NOPWASD) is the government agency under MOHUUD responsible for the planning, design and

implementation of water and wastewater infrastructure throughout the country, with the

exception of Greater Cairo and Alexandria.

The Holding Company for Water and Wastewater (HCWW) is the owner of the 23

subsidiary WSCs. It was established by a Presidential Decree to purify, desalinate,

distribute and sell drinking water, and collect, treat and safely dispose of wastewater.

Water and Sanitation Companies (WSCs) are responsible for service delivery of water

and wastewater in their respective Governorates, including construction of water and

wastewater networks and operation and maintenance (O&M) of water supply and

wastewater facilities.

Donor Activity in Egypt

11. A number of donors are active in the sector, including the European Union (EU) and the

Governments of Switzerland, Germany, United States and Japan. An EU led consortium is

implementing the Second Improved Water and Wastewater Services Project (IWSP, Euro300

million) in the Governorates of Qena, Assiut, Sohag and Minya, to be followed by another

investment support program in additional Governorates. The United States, Germany, Holland

and Japan mainly focus on providing TA support to GoE at the central and Governorate levels.

ISSIP2 will coordinate closely with other donor efforts in the water and sanitation sector at both

the central and project Governorate levels. Following the aftermath of the January 2011

revolution, most donor agencies are working closely with the Egyptian government and have

indicated their intent to provide support to the new authorities.

4

A. Higher Level Objectives to which the Project Contributes

12. The proposed project is fully consistent with GoE national priorities of increasing rural

sanitation coverage and accelerating development in Upper Egypt, as well as the World Bank

Country Assistance Strategy (CAS, FY 2006-FY 2009) goals of: (a) reducing disparities between

Upper and Lower Egypt; (b) enhancing the provision of public goods through expanded supply

and improved efficiency of infrastructure services; and (c) strengthening the accountability of

public sector agencies such as those in the water and sanitation sector.

II. Project Development Objectives

A. PDO

13. The Project Development Objective is to provide targeted populations in the Governorates

of Menoufia, Sharkeya, Assiut and Sohag with increased access to improved sanitation and

sewerage services.

B. Beneficiaries

14. The beneficiaries of ISSIP2 will be about 1.2 million people (half of whom are estimated

to be women) in the project villages in Menoufia, Sharkeya, Assiut and Sohag.

C. PDO Level Results Indicators

15. The PDO level results indicators are:

Increased number of people connected to improved sanitation and sewerage services

in the project areas.

Number of wastewater treatment plants meeting Egyptian effluent treatment

standards.

Volume of wastewater treated.

III. Project Description

A. Project components

16. The three components of ISSIP2 are:

Component 1: Wastewater infrastructure systems in rural areas in Menoufia and Sharkeya

(Estimated cost US$149.75 million). Construction of wastewater infrastructure systems in

selected village clusters in the Governorates of Menoufia and Sharkeya, including wastewater

treatment plants, collection networks, customer connections, and decentralized treatment

systems.

5

Component 2: Wastewater infrastructure systems in rural areas in Assiut and Sohag


selected village clusters in the Governorates of Assiut and Sohag, including wastewater


systems.

Component 3: Project Management (Estimated cost US$10 million). Support HCWW and

NOPWASD in project implementation, monitoring and evaluation and management, including

construction supervision and environmental management services. This component will be

financed entirely out of counterpart funds.

A. Lending Instrument

17. The lending instrument is a Specific Investment Loan (SIL) for US$200 million through a

Variable Spread Loan (VSL) with a 28.5 year maturity and a seven-year grace period. The Loan

will be denominated in US Dollars.

B. Project Financing Table

18. Table 1 indicates the project cost by component and the financing plan. Project financing

is structured such that should any of the project Governorates lag significantly behind others

during project implementation, funds can be reallocated to other project Governorates where

implementation is progressing well.

Table 1. Project Cost by Component

(US$ Million)

Component Total World

Bank

GoE

Component 1: Wastewater infrastructure systems in Menoufia and Sharkeya

A. WWTPs

B. Network Clusters

44.75

105.00

29.75

70.00

15.00

35.00

Component 2: Wastewater infrastructure systems in Assiut and Sohag

A. WWTPs

B. Network Clusters

19.75

130.00

12.75

87.00

7.00

43.00

Component 3: Project Management

A. Construction Supervision

B. Project Management Unit Staff

C. Training and Utility Strengthening

D. ESMMF Implementation

6.00

2.00

1.00

1.00

0

0

0

0

6.00

2.00

1.00

1.00

Total Project Cost

Front-End Fee

Total Financing Required

309.50

0.50

310.00

199.50

0.50

200.00

110.00

0

110.00

Estimates include contingencies and taxes at the Feasibility Stage

Components 1 and 2 represent co-financing with a cost sharing ratio of 2/3 World Bank and 1/3 GoE

Component 3 is financed entirely out of counterpart funds

6

Lessons Learned and Reflected in the Project Design

19. The project approach and design draws on the experience of the on-going ISSIP and that

of GoE and the various donors in implementation of sanitation projects in Egypt over the past

two decades. The key lessons learned are listed below:

Benefit of detailed designs. For a more realistic estimate of project costs and scope, and

to enable potential contractors to submit better bids, it is important to include detailed

engineering designs in the bid documents of network cluster packages. This approach is

being adopted in ISSIP2.

Smaller procurement packages. Use of large procurement packages restricts bidding to

a limited number of larger contractors, and limits competition. ISSIP2 proposes to

package network cluster contracts in relatively smaller procurement packages so that

smaller contractors are eligible to bid.

Decentralized systems. Bids received for three “GIZ-model” schemes of

smaller/decentralized wastewater treatment systems were three times the estimated costs

in ISSIP. As ISSIP2 preliminary feasibility studies also indicated that

smaller/decentralized wastewater systems are more expensive compared to the cluster

approach, they are currently excluded from ISSIP2. Decentralized systems will be

considered for inclusion in ISSIP2 Phase 2, subject to their being successfully piloted in

ISSIP and after detailed cost evaluations.

Sustainable Operation and Maintenance (O&M). From international experience, many

water and sanitation systems have failed to continue operating efficiently due to lack of

adequate O&M funding and limited management capacity at the local level. ISSIP2

design builds on the GoE commitment to continue subsidies for WSC O&M costs and

includes a training and capacity building component to strengthen management capacity.

Implementation and loan disbursements take time. As investment projects in the

water sector in Egypt require significant start-up time, as demonstrated in ISSIP, ISSIP2

disbursements have been appropriately staggered. In addition, the procurement process

for civil works for Phase 1 of the project will commence well in advance of loan

effectiveness, so that contracts can be signed and disbursements made as soon as possible

after loan effectiveness. Loan funds may also be reallocated between the project

Governorates based on their demonstrated ability in implementing the project in a timely

manner.

IV. Implementation

A. Institutional and Implementation Arrangements

20. The project will be implemented through the following institutions at the national and

local levels:

The existing ISSIP Project Steering Committee will provide coordination, oversight,

and overall direction to ISSIP2 as well. It is headed by the Minister of Housing, Utilities,

and Urban Development or his delegate, and comprises representatives of HCWW,

NOPWASD, EWRA, MWRI, MOPIC and MOHP. Representatives of the project WSCs

7

and the local popular councils from each of the four Governorates will be added to the

Committee. The Director of the Project Implementation Unit in HCWW will act as the

Secretary of the Project Steering Committee.

The existing HCWW Project Implementation Unit (PIU), which is responsible for

ISSIP, will also act as the PIU for ISSIP2. Its current team of a PIU Director, supported

by specialist staff from HCWW, will be enlarged, both through staff and additional long-

term and short-term technical assistance specialists. The HCWW PIU will work closely

with NOPWASD and the four WSCs. HCWW will be responsible for the construction of

pump stations, sewer networks and force mains.

The existing NOPWASD ISSIP Unit will be responsible for the design and

implementation of all new wastewater treatment plants under the project.

Rural Sanitation Units (RSUs) have been established within each of the four WSCs,

comprising engineering, financial management, procurement, environmental/social and

monitoring and evaluation specialists, and will be supported by long and short-term

technical assistance in different fields.

Local Administrative Units (LAUs), the lowest level in the local administration system

in Egypt, will provide forums and venues for engagement with local communities.

B. Results Monitoring and Evaluation

21. The project‟s M&E system will build on the extensive monitoring of all WSCs already

carried out by HCWW through the use of over 60 standard indicators, as well as the existing

ISSIP M&E system. Annex I provides details on the proposed responsible entities and the overall

M&E framework.

C. Sustainability

22. MOHUUD‟s recently issued development policies for the sector demonstrate

government‟s strong commitment to the development of the sector in a sustainable manner. At

the project level, sustainability will depend on the ability of the four project WSCs to operate and

maintain project financed assets in an efficient and effective manner. Project WSCs are

relatively young commercial organizations, with adequate qualified and experienced staff.

HCWW will provide focused technical and commercial training under the project to staff of the

WSCs. Government has confirmed that the practice of providing annual operating and capital

subsidies to the WSCs will be applicable to the project WSCs, until they achieve full cost

recovery.

23. RSUs in each WSC will be involved in project implementation and will be trained under

the project on operation of the facilities financed by the project. This will ensure institutional

sustainability of the project.

8

V. Key Risks

24. The overall project risks are rated Medium - Impact and considered manageable with the

mitigation measures in place. Potential risks and mitigation measures are summarized in the

Operational Risk Assessment Framework (see Annex IV). The main risks are: (a) implementing

agency risks, which are rated High; and (d) delivery capacity risks, which are rated Medium –

Impact.

25. The principal mitigation measures include: (a) strengthening the HCWW PIU and

establishing RSUs in each project WSC with appropriate staffing; (b) provision of technical

assistance on project management, detailed designs and preparation of bid documents, and

construction supervision; (c) issue of a comprehensive Project Implementation Manual,

acceptable to the Bank; (d) provision of technical, procurement, financial management and

safeguards implementation training to relevant staff; and (e) regular confirmation with MOHUUD

on the timely provision of counterpart funding and operations and maintenance subsidies to the

WSCs in accordance with the Development Policy and the loan agreement.

26. The Bank task team will provide implementation support through regular half yearly

missions as well as through on-going as needed guidance and problem solving support. Country

office based staff will be utilized for key aspects of implementation support (technical,

procurement, financial management, environmental and social safeguards) to ensure speedy

response to project implementation issues.

VI. Appraisal Summary

A. Economic and Financial Analysis

Financial Analysis

27. Project WSCs. As discussed in paragraph 7, as part of the sector reform agenda,

HCWW was established in 2004 to provide rural and urban sanitation services, with WSCs as

subsidiary companies responsible for these activities in the respective governorates. The

Sharkeya and Menoufia WSCs are a little over five years old, while the Assiut and Sohag WSCs

are less than three years old. At the time of their establishment, the WSCs took over existing

assets (generally in poor condition) and staff from the governorates and MOHUUD. Under the

direction of HCWW these WSCs are now beginning to operate in a more commercial manner;

commercial accounting is now in place with standardized accounting software in use. Accounts

are audited annually.

28. Tariffs. Water and wastewater tariffs are set at the national level, and comprise tariffs

for four customer categories: domestic, economic (commercial and industrial), government and

institutions. The tariff for domestic customers includes a “social tariff” for the first 10 cubic

meters of consumption each month. Wastewater tariffs are a 35% surcharge on the water tariff.

The current tariff levels covered less than 60% of the 2009 operating costs; in Sohag the cost

recovery was as low as 29%.

9

29. Key Financial and Operational Results. Audited accounts for the year ended June 30,

2009 indicate that only Assiut achieved cost recovery under the „with grant‟ scenario; Sohag had

the lowest cost recovery of 64% with grants. The financial performance of the four project

WSCs is similar to that of nearly all WSCs in the country.

30. In terms of operational performance, the 2010 unaudited results indicate that there

continues to be scope for considerable operational improvement in all four WSCs, more so in the

case of the Upper Egypt WSCs of Assiut and Sohag. Three of the four WSCs have staffing

ratios of between five and seven staff per 1,000 water connections, while the ratio is in excess of

ten in the case of Assiut. Non-revenue water was less than 30% in two WSCs, while it was a

little over 35% in Sohag and even higher in Assiut. In general, collection of water and

wastewater bills had improved in some utilities: Assiut and Menoufia had arrears at around four

months‟ billing, while Sharkeya and Sohag still had arrears exceeding two years‟ billing.

31. Financial Sustainability. Government has confirmed that consistent with the policy to

achieve financial sustainability in the sector, it will provide each of the four project WSCs

subsidies/grants to:

(a) Meet operating cash shortfalls;

(b) Meet counterpart funding requirements for project implementation in a timely manner;

and

(c) Carry out replacement of existing assets which are required for acceptable functioning of

the system, but which are no longer functioning adequately.

This undertaking is set out in the Interagency Agreement executed among MOHUUD,

NOPWASD and HCWW. In addition, Government will provide the Bank, each year, the audited

financial statements for each WSC within six months of the end of each financial year. It will

also provide the Bank the annual budget for the current year for each WSC, within one month of

its approval.

32. Improvements in WSC Performance. HCWW monitors the performance of all WSCs

in the country on an on-going basis through a standard set of over 60 parameters. Each year,

Government will provide the Bank data on some of the more important indicators for each

project WSC, i.e., uncollected bills (arrears) in number of months‟ billing, staffing per 1,000

water connections, and the percentage of non-revenue water.

33. Financial rate of return (FIRR). Given the low tariff levels and poor financial results,

the FIRRs were not computed. As discussed below, the project is justified on economic

considerations.

Economic Analysis

34. Overall economic justification. The project addresses an important basic human need

of safe sanitation, as highlighted by the inclusion of sanitation in the Millennium Development

Goals. As highlighted in paragraph 5, only a limited percentage of villages have facilities for

safe sanitation. Safe disposal of wastewater in rural areas is a high priority for GoE, as

highlighted by the National Rural Sanitation Master Plan, which aims to provide comprehensive

10

sanitation coverage to the population of all rural Governorates by 2037. The project is consistent

with the Government‟s 2008 “National Rural Sanitation Strategy”, which seeks to prioritize

sector investments. It builds on the predecessor project (Integrated Sanitation and Sewerage

Project, Ln. 7512-EGT) and supports sector investments in priority Governorates identified by

Government.

35. Given the difficulties of quantifying the economic benefits in a reliable manner (see

paragraph below on Benefits), the economic analysis of the project is based on an overall

economic justification (see above) and a cost effectiveness approach, based on cost optimization,

as discussed in the subsequent paragraphs.

36. Options proposed and alternatives considered. The proposed investments are based on

the cluster approach adopted under ISSIP. Under the cluster approach, several villages are

equipped with shallow, small diameter simplified sewers and connected to a central treatment

plant. The size of each cluster and the location of the treatment plant are determined so as to

optimize the combined collection and treatment cost, with special attention paid to limiting the

number of canal and drain crossings which involve significant additional costs.

37. Alternatives to the proposed cluster approach include: (a) improved on site sanitation; (b)

use of decentralized treatment systems (such as the GIZ model); and (c) construction of

conventional sewer networks. Feasibility studies for the proposed clusters confirm that on site

sanitation is not a feasible option in the Project villages due to high population densities and high

groundwater levels. Based on bids received for the GIZ model pilots to be implemented as part

of ISSIP, as well as preliminary costing carried as part of ISSIP2 feasibility, the GIZ model,

which is land intensive due to the anaerobic nature of treatment required, appears to present

higher unit costs compared to the proposed cluster approach and has been excluded from the first

phase of ISSIP2. Possible use of the GIZ model will be reconsidered for ISSIP2 Phase 2 based

on lessons learned during first phase of implementation. Finally, conventional sewers were not

considered a viable option due to the higher investment costs and more complex operation and

maintenance requirements involved, as well as due to the constraint of high water tables in many

of the project villages, which would further challenge construction, operation and maintenance.

38. Costs. Based on lessons learned from the implementation of ISSIP (cf. para. 19) costs of

the proposed cluster-based investments were optimized by:

(a) Continuing the cluster approach adopted in ISSIP, whereby a treatment plant in an

optimal location serves the maximum number of villages;

(b) Connection of project-financed networks to existing pumping stations and wastewater

treatment plants to minimize costs and maximize coverage with existing resources; and

(c) Optimizing treatment costs by permitting the contractors to submit a technology selection

from a menu of treatment technologies appropriate for rural settings with flow rates in the

range of 1,000 m3/day to 30,000 m

3/day.

39. In addition, project implementation is being phased, so that experience of the first phase

(covering the investment program of the first two years) can be incorporated into the plans for

Phase 2. In a similar vein, implementation of decentralized systems has been deferred to Phase 2

11

to enable the lessons of experience under ISSIP in implementation of such systems to be

incorporated into ISSIP2.

40. Costs vary between clusters: they are high (in relation to the number of beneficiaries)

where the investments cover the entire spectrum from house connections, sewer networks,

pumping stations and treatment plants, as well as adverse topographical conditions; and they are

lower, where project investments in the cluster take advantage of unutilized treatment plant and

pumping station capacity, and have favorable topographical conditions. Costs are also affected

by the distances of individual villages from the “mother village” (see Technical below). In

addition, treatment costs are significantly higher, where higher technology treatment plants are

expected to be used (e.g., in Menoufia and in Sharkeya, as well as in some of the clusters in

Assiut).

41. Benefits. The principal expected benefits are: (a) the avoided direct negative impacts to

households associated with use of on-site systems (e.g. risk of flooding, cost and inconvenience

of septage removal); (b) health and environmental benefits (e.g., health hazards due to infiltration

of ground water with septage, and degradation of water quality in nearby canals and drains),

which could not be quantified so as to allow full cost-benefit analysis.

42. A rapid survey carried out by the Project preparation team provides an indicative range of

the costs associated with the current use of trenches as on-site sanitation systems. Information

provided by the households indicates that the operation of the current systems requires 2 to 4

haulings a month due to infiltration of groundwater in the trench, in addition to a desludging

once every three months. The reported expenses of households who use private operators for

hauling and desludging ranges from LE120 per month in the Delta governorates to LE150 per

month in the Upper Egypt governorates. Households which cannot afford to hire the services of

private companies have to carry out the emptying themselves, which involves significant health

risks. Negative direct impacts of the on-site systems currently used also include time spent by the

households and degradation of houses due to percolation of wastewater from the trenches.

43. Significant health and environmental benefits are also expected. The use of permeable

trenches to dispose of wastewater in areas with high groundwater levels directly leads to the

contamination of local groundwater resources and to the subsequent pollution of drains and

canals used for agriculture. In addition to this pollution through groundwater, canals and drains

are also directly contaminated due to the current practice of hauling and desludging of trenches

through the disposal of wastewater and sludge into drains and canals.

Technical

44. The project builds on the on-going ISSIP, which is the first large-scale effort to provide

networked rural sanitation services in Egypt. The design therefore presents an approach that is

tailored to serving a large number of small settlements, emphasizing intermediate and low cost

options. Planning and design criteria of the wastewater system will follow recognized

international standards, as well as local regulations and codes of practice.

12

45. Cluster approach. The planning and implementation methodology will build on the

cluster approach adopted under ISSIP. Each ISSIP2 cluster is centered around one treatment

plant located at an optimal central location to serve the maximum number of villages. In Upper

Egypt, one mother village per cluster is appropriate, whereas in the Delta the approach is often

one mother village for every two clusters.

46. Phased implementation. The project will be implemented in two phases. Phase I of the

project (investment program for the first two years) will consist of network connections and

wastewater treatment plants for a total of four clusters, one in each of the project Governorates.

Phase II will cover years 3 to 5, and will allow for incorporation of lessons learned from Phase I

implementation and adaptation of the final plan according to the results on the ground. This

includes: (a) inclusion of decentralized systems, if feasible; and (b) assessing the efficiency of

the adopted institutional setting and adjusting the allocation of works and funds among the

implementing agencies, if needed. Detailed network designs will be prepared for inclusion in

bidding documents.

47. Sewer networks. Sewers will be built as close as possible to houses to reduce connection

costs. Special efforts will be made to minimize the depth of sewers, as the groundwater table is

high, often less than two meters. During detailed design options such as shallow and small-bore

sewers will be considered where applicable.

48. Wastewater treatment. An output based approach will be adopted for design and

implementation of wastewater treatment plants and contractors will be required to submit a

technology selection based on a menu of appropriate technologies and detailed designs. It is

anticipated that in the Delta, where land is more limited, mechanical systems are likely to be

constructed; in Upper Egypt, where there are fewer land constraints, stabilization ponds are more

likely.

49. Construction supervision. As in the ongoing ISSIP, NOPWASD will finance the

construction supervision of all project infrastructure activities by contracting one construction

supervision firm in each project governorate.

B. Financial Management

50. NOPWASD and HCWW will be responsible for the financial management (FM) of the

respective activities of the project that will be implemented by them. HCWW will coordinate the

FM work in the four project WSCs, which will be responsible for the FM of project activities

implemented by them.

51. A financial management assessment was conducted for the WSCs of Sharkeya,

Menoufia, Assiut and Sohag to determine the adequacy of their financial management capacity

for the project. The capacity of NOPWASD was assessed during the 2007 appraisal of ISSIP,

and was updated based on its current performance in implementing ISSIP. The assessment

concluded that, with the implementation of agreed-upon actions, the proposed financial

management arrangements will satisfy the Bank‟s minimum requirements under OP/BP10.02.

13

52. The following actions will be taken to mitigate the risks identified in the FM assessment:

(a) a Project Implementation Manual (PIM), which will describe the roles and responsibilities of

the implementing agencies with respect to financial management, and is acceptable to the Bank,

will be adopted (45 days after the effective date); (b) a functioning computerized accounting and

reporting software will be installed (installation of the accounting software, acceptable to the

Bank, is a disbursement condition); and (c) provide training to WSC financial management staff

on Bank financial management requirements.

53. Disbursement of loan funds will be based on reimbursements or direct payments to

contractors and/or advances to designated accounts if opened by NOPWASD and HCWW.

NOPWASD will make funds available to HCWW on a grant basis to implement its affiliates‟

respective activities under ISSIP2.

C. Procurement

54. Procurement for the project will be carried out by NOPWASD and the four project

WSCs. A procurement capacity assessment (PCA) was carried out for NOPWASD at the time of

ISSIP appraisal in 2007. Annex III provides additional information on the risks identified and

the recommended mitigation measures.

53. A PCA was carried out for the WSCs of Sharkeya, Menoufia, Assiut and Sohag

Governorates. The principal risks identified were: (a) lack of procurement specialists with

experience of procurement in international donor financed projects; (b) lack of experience in the

procurement of output-based performance contracts; (c) lack of computerized systems; and (d)

bidding documents based on incomplete designs and without clear evaluation criteria.

54. Risk mitigation measures include: (a) preparation of a Project Implementation Manual

(PIM), listing procurement procedures in accordance with Bank Procurement Guidelines (45

days after effective date); (b) appointment of qualified procurement staff in the RSUs of the four

WSCs; (c) training of procurement staff on Bank procurement in the class room and on the job;

(d) appointment of consultants for project management, including procurement, at WSCs; and (e)

preparation of Standard Project Bidding Documents for National Competitive Bidding, taking

into account ISSIP experience.

55. An acceptable Procurement Plan has been furnished by the Borrower for the first 18

months of the project. This procurement plan will be updated annually (or as appropriate) to

reflect the latest project requirements.

D. Social

56. The overall social impact of the project is considered positive as it will improve access to

sanitation and sewerage services for residents of rural areas, many of whom are poor. The

project will have a direct positive impact on women and children in the target villages, as they

are the most affected by the poor sanitary conditions. It will also create employment and

business opportunities for the local population, especially unskilled labor, during the

construction phase.

14

57. OP/BP 4.12 Involuntary Resettlement has been triggered because some land acquisition

is expected; a Resettlement Policy Framework (RPF) has therefore been prepared. Negative

social impacts during construction are associated with temporary and/or permanent land

acquisition, temporary disturbances in circulation and access, noise, air quality (associated with

odor and pollution), and influx of temporary workers, while public health and safety issues are

important during post-construction operation. These impacts are in general limited and

considered manageable through the mitigation measures detailed in the Environmental and

Social Assessment Framework (ESAF) and the RPF.

E. Environment

58. The proposed project falls under World Bank Environmental Category B classification,

according to the Bank's Operational Policy OP 4.01 on Environmental Assessment. The project

will have major positive environmental impacts when sanitation/sewerage services are provided

to the village clusters. Negative impacts during construction and post-construction operation will

be addressed through a monitoring plan, consistent with national standards and good practice.

59. An Environmental and Social Management and Monitoring Framework (ESMMF)

prepared by the Borrower was appraised (as detailed designs had not yet been prepared) and

found to be consistent with Bank requirements. It includes mitigation measures, a monitoring

plan, and institutional aspects, and will be followed by site-specific scoped Environmental and

Social Impact Assessments (ESIAs) of the fully designed clusters before each of the two project

implementation phases.

60. Consultations and Disclosure. Consultations were held in the four project target

Governorates with the participation of key local stakeholders, including community members,

local authority leaders, community development associations, WSC staff, and government

authorities. In accordance with Bank policies, the ESAF and RPF were disclosed in Egypt (in

Cairo and in the project Governorates) and in the InfoShop on January 13, 2011, prior to

Appraisal and re-disclosed in-country on February 22, 2011 and in the InfoShop on February 28,

2011 and on April 14, 2011.

15

Annex I: Results Framework and Monitoring

Project Development Objective (PDO):

The Project Development Objective is to provide targeted populations in the Governorates of Menoufia, Sharkeya, Assiut and Sohag with increased

access to improved sanitation and sewerage services.

PDO Level

Results

Indicators* Core

Unit of

Measure Baseline

Cumulative Target Values** Frequency

Data Source/

Methodology

Resp. for

Data

Collection

Description

2012 2013 2014 2015 2016

Indicator One:

Increased number

of people in the

project areas

connected to

improved

sanitation and

sewerage

services.

„000

0 0

600 600 1,200 Annual Progress

Report

RSU/PIU

Indicator Two:

Number of

wastewater

treatment plants

meeting Egyptian

effluent treatment

standards.

# 0 0

0 10 15 15 Monthly Lab.

Reports

RSU/PIU BOD

DO

FC

TSS

Indicator Three:

Volume of

wastewater

treated

„000

m3/d

0 0 0 60 60 120 Annual Progress

Reports

RSU/PIU

16

Component 1: Wastewater infrastructure systems in Menoufia and Sharkeya

% of total number

of additional

working

wastewater

connections.

% 0 0

0 75 75 100 Six months Progress

Reports

RSU/

PIU

% of WWTPs

operating at 2016

design flow rate

% 0 n/a n/a n/a n/a 100 Six months Progress

Reports

RSU/

PIU

Total number of

pumping stations

constructed

# 0 0


Reports

RSU/

PIU

Total kms of

sewerage

pipelines laid

kms 0 0


Reports

RSU/

PIU

Component 2: Wastewater infrastructure systems in Assiut and Sohag

% of total number

of additional

working

wastewater

connections.

% 0 0


Reports

RSU/

PIU

% of WWTPs

operating at 2016

design flow rate

% 0 n/a n/a n/a n/a 100 Six months Progress

Reports

RSU/

PIU

Total number of

pumping stations

constructed

# 0 0


Reports

RSU/

PIU

17

Total kms of

sewerage

pipelines laid

kms 0 0


Reports

RSU/

PIU

Component Three: Project Management

Works contracts

awarded

# 0 10 22 55 55 90 Six months Project

Progress

Reports

Progress

reports of

WSCs

% of ESMMF

training delivered

% 0 20 40 60 80 100 Six months Project

Progress

Reports

HCWW/

WSC

Number of

construction

supervision

contracts signed

for treatment

plants


Progress

Reports

RSU/WS

C

Number of

Project

Management and

Technical

Training Courses

Completed in PIU

and RSUs


Progress

Reports

RSU

18

Annex II: Detailed Project Description

1. ISSIP2 will be implemented in two contrasting parts of the country - Upper Egypt and

the Delta - which have significant differences in terms of overall development, climate and

topography, hydrology, and basic infrastructure, with Upper Egypt generally having more

adverse conditions. The project area falls within the Governorates of Assiut and Sohag in Upper

Egypt, and Menoufia and Sharkeya in the Delta, which together have a total population of about

18 million. The project area represents the first priority for sanitation services in the rural areas

of these Governorates, based on multi-criteria ranking undertaken as part of the feasibility study

and Governorate priorities. It covers 18 village clusters, with a total of about 76 villages and

hamlets, and a target population of about 1.2 million people.

2. The table below provides details of the population of each project Governorate, as well as

current rural sanitation coverage.

Population and Rural Sanitation Coverage4

Population

(million)

%

Rural

% Rural Sanitation

Coverage

Networked/On-site

Menoufia 3.3 75 0 / 90

Sharkeya 5.2 79 19 / 63

Assiut 3.8 70 0 / 80

Sohag 3.7 78 0 / 76

3. Networked rural sanitation coverage in both Assiut and Sohag is officially classified as

0%, while the corresponding coverage in Menoufia and Sharkeya in the Delta Region is 0% and

19% respectively. While most rural households in both Upper Egypt and the Delta Region have

latrines or flush toilets connected to infiltration trenches or septic tanks, most of the sewage is

discharged directly into nearby water canals and drains, leading to environmental and health

hazards in the vicinity. The comparatively higher poverty levels in Upper Egypt have also led to

worse health and hygiene conditions at both the community and household levels.

4. Project Components. The project comprises three components, as described below.

Component 1: Wastewater infrastructure systems in rural areas in Menoufia and Sharkeya


selected village clusters in the Governorates of Menoufia and Sharkeya, including wastewater


systems. The initial scope of the component is about 36 villages in about 8 clusters;

decentralized treatment systems may be incorporated into the project design subject to their

being successfully piloted in ISSIP.

4 National Strategy for Water Supply and Sanitation: Compilation of Water and Sanitation Master Plans, HCWW report for the

European Commission, May 2009.

19

Component 2: Wastewater infrastructure systems in rural areas in Assiut and Sohag


selected village clusters in the Governorates of Assiut and Sohag, including wastewater


systems. The initial scope of the component is about 40 villages in about 10 clusters;

decentralized treatment systems may be incorporated into the project design subject to their

being successfully piloted in ISSIP.

Component 3: Project Management (Estimated cost US$10 million). Support to HCWW and

NOPWASD in project implementation, monitoring and evaluation and management, including

construction supervision and environmental management services. This component will be

financed entirely out of counterpart funds. It will finance: (a) project management support,

including the costs of the HCWW PIU and the four RSUs, construction supervision consultants

to each WSC, focusing on construction quality and adherence to all aspects of the contract,

including technical, timeliness, safety aspects, environmental and social aspects, etc; (b)

implementation of the ESMMF, including training of environmental and social staff, preparing

ESIA for all phases of the project, water quality monitoring, and equipment purchase; (c)

training to the PIU and the RSUs on all aspects of project implementation, including

procurement and contract management, financial aspects of utility management, environmental

matters - e.g., laboratory testing, regulations - technical training - e.g., sludge handling,

hazardous materials, operating wastewater treatment equipment, pipe maintenance, and utility

management..

5. Table below summarizes the project scope, coverage, and outputs.

Project Scope, Coverage, and Outputs

Governorate Cluster Population

(2050)

Pumping

Stations

(units)

Networks &

Force Mains

(km)

New

WWTPs

Number of

Villages

Served

Menoufia

Tanbasha 95,853 7 65 1 5

Mit Berah 17,231 3 18 - 2

Danasour 64,365 4 45 1 4

Talia 94,175 5 62 1 5

Sharkeya

Derb

Negm 29,294 4 50 1 4

Zagzig 120,672 10 148 2 8

Faqus 102,292 6 137 1 4

Hihya 59,410 4 101 1 4

Sohag

Gerga 142,990 9 88 - 10

El.Baliana 66,981 3 73 - 3

Sohag 47,771 3 24 - 3

20

Tema 35,481 3 32 - 3

Tahta 48,738 4 46 1 4

Assiut

Dairoot 13,186 1 16 1 1

Qusiya1 7,950 1 14 1 1

Qusiya2 20,598 3 40 - 2

Al.Badary 59,403 3 63 1 3

Sidfa 94,237 5 91 1 6

Ghanayim 47,119 3 62 1 3

Total 19 1,167,746 81 1,175 14 75

6. Planning and implementation principles. The ISSIP2 planning and implementation

methodology will build on the cluster approach adopted under ISSIP. Each ISSIP2 cluster is

centered around one treatment plant located at an optimal central location to serve the maximum

number of villages. In Upper Egypt, one mother village per cluster is appropriate, whereas in the

Delta the approach is often one mother village for every two clusters. In general the average

distance between the selected villages and the central wastewater treatment plant in Upper Egypt

is also greater than in the Delta Region.

7. Most existing treatment facilities are oversized and are receiving wastewater only to

about half of their design capacity. Where feasible, therefore, the project envisages the

connection of project-financed networks to an existing Government financed WWTP. This will

minimize costs and maximize coverage with existing resources, e.g., in Sohag and Menoufia. In

other cases, treatment facilities will be designed such that they adequately treat wastewater flows

predicted for 2030, but can be easily expanded to treat wastewater flows predicted for 2050.

8. The project will be implemented in two phases. Phase I of the project (investment

program for the first two years) will consist of network connections and wastewater treatment

plants for a total of four clusters, one in each of the project Governorates. Phase II will cover

years 3 to 5, and will allow for incorporation of lessons learned from Phase I implementation and

adaptation of the final plans based on results on the ground. This includes: (a) inclusion of

decentralized systems, if feasible; and (b) assessing the efficiency of the adopted institutional

setting and adjusting the allocation of works and loan funds among the implementing agencies, if

needed. Detailed network designs will be prepared for inclusion in bidding documents, whereas

for wastewater treatment plants, a Design-Build approach will be adopted.

9. Technical standards. Planning and design criteria of the wastewater system will be

based on recognized international standards, as well as the local regulations and codes of

practice. These include, but are not limited to:

(a) The Egyptian Code of Practice for the Design and Construction of Water and Wastewater

Networks - Ministerial Decree No. 286 / 1990; and

(b) The Egyptian Code of Practice for Plumbing, 1993 - Ministerial Decree No. 359 /1990.

21

10. Sewer networks. Sewers will be built as close as possible to houses to reduce connection

costs. Special efforts will be made to minimize the depth of sewers, as the groundwater table is

high, often less than two meters. Options such as shallow and small-bore sewers will be

considered where applicable, during detailed design. The condominial system in Brazil will be

used as a reference for coupling low cost technical design with consumer demand management

to arrive at the best sewer routes and enhance community ownership.

11. The table below summarizes the key design parameters for sewers under the project.

These will be reconfirmed by the design engineers.

Parameter Current standard Comments and agreed modification if any Minimum Cover 600 mm 550 mm, based on an agreed depth to invert of 700 mm.

Minimum Slope 1 in 167 for 150 mm.

1 in 250 for 200 mm.

1 in 300 at critical lengths at the head of the system to minimize

pumping (to be verified during detailed sewer design).

Use of interceptors will be investigated to allow for flatter slopes.

Minimum diameter 200 mm 150 mm

100 mm for connections serving one household or one building

with up to 5 apartments.

12. Wastewater treatment. Various treatment technologies are suitable for rural settings

with flow rates in the range of 1,000 to 30,000 m3/day: stabilization ponds, oxidation ditches,

rotating biological contactors (RBCs), and advanced sequential batch reactors (SBRs).

Contractors will submit a technology selection for treatment plants, based on a menu of

appropriate technologies and detailed designs. It is anticipated that in the Delta, where land is

more limited, mechanical systems will be constructed; in Upper Egypt, where there are fewer

land constraints, stabilization ponds will be constructed.

22

Annex III: Implementation Arrangements

Project Administration Mechanisms

1. The project will be implemented through the coordinated efforts of six agencies: the

Holding Company for Water and Wastewater (HCWW) and its four subsidiary water and

sanitation companies (WSCs) in Assiut, Sohag, Menoufia, Sharkeya, as well as the National

Organization for Potable Water and Sanitary Drainage (NOPWASD). All of these agencies are

under the Minister of Housing, Utilities, and Urban Development (MOHUUD). As in the case of

ISSIP, the division of implementation responsibilities between NOPWASD and HCWW will be

detailed in an Interagency Agreement between the two institutions to be executed within 45 days

of loan effectiveness.

2. The Steering Committee for ISSIP, which is in place to provide coordination, oversight,

and direction to the project implementing agencies, will also be responsible for ISSIP2. It is

headed by the Minister of Housing, Utilities, and Urban Development or his designee, and

comprises representatives of all agencies which are directly involved in ISSIP implementation or

which have a legal or regulatory stake in the project. These agencies include:

HCWW, responsible for implementation of project contracts for sewer networks, pump

stations and force mains, and supervision of WSC operations.

EWRA, responsible for monitoring the quality and cost of public wastewater services and

advising the Minister of HUUD on tariffs.

NOPWASD, responsible for State Budget-funded planning and implementation of water

and wastewater treatment plants in Egypt‟s rural Governorates.

MWRI, responsible for monitoring canal and drain water quality and for setting and

enforcing effluent quality standards.

MOHP, responsible for sampling and testing drinking water and effluent from publicly-

owned treatment plants.

Representatives from the WSCs of Assiut, Sohag, Menoufia and Sharkeya and a representative

from the local council of each of the Governorates will be added to the Steering Committee.

3. The Bank Task Team Leader will participate in Steering Committee meetings as an

observer whenever necessary. Embassy representatives and representatives of related donor

projects in the project area may also be invited to attend meetings as circumstances warrant.

4. The HCWW Project Implementation Unit (PIU), which is responsible for ISSIP, will

have the same responsibilities for ISSIP2 as well. The PIU is headed by a PIU Manager, who is

supported by engineering, financial management, procurement and social/environmental

specialists who work closely with appropriate HCWW and WSC counterparts to manage ISSIP,

monitor progress and build capacity for rural sanitation programming. The PIU‟s current staffing

will be strengthened through additional procurement staff and an M & E specialist; an FM

specialist will also be added at a later date based on operational needs.

23

5. The HCWW will be responsible for the construction of pump stations, sewer networks

and force mains, and will, inter alia: prepare model tender documents and terms of reference for

consulting services; develop standard operating procedures and maintenance planning guidelines

for the various wastewater system components (such as treatment unit processes, pump stations,

sewers, force mains, sludge removal trucks); design cost accounting and billing system

improvements, etc. The PIU will also manage the preparation of the ISSIP2 Phase 2 investment

program, in coordination with the WSCs and NOPWASD, and under the guidance of the

Steering Committee. A Project Implementation Manual (PIM), acceptable to the Bank, detailing

the above procedures and processes, will be issued within 45 days of loan effectiveness.

6. The existing NOPWASD ISSIP Unit will also be responsible for the implementation of

all new ISSIP2 wastewater treatment plants. This unit is headed by a senior NOPWASD official,

and is supported by a team of specialists: a wastewater treatment project engineer, a procurement

officer, and a financial manager. This team of specialists will work closely with counterpart

NOPWASD staff.

7. A Rural Sanitation Unit (RSU) has been established in each of the four WSCs, with

responsibility for implementation of centralized wastewater collection systems, and for O&M of

the completed systems. The RSUs are headed by a Unit Head (Engineer) and will include a team

of six additional full-time dedicated specialists: social specialist; environmental specialist; M&E

specialist; procurement specialist; wastewater engineer; and financial management specialist.

Unit personnel will work closely with all counterpart WSC staff.

8. Local administrative units (LAUs), i.e., local village council units, which are the lowest

level in the local administration system in Egypt, will provide forums and venues for

engagement with local communities. The Social Specialist in the RSU will liaise with the local

authorities, village heads (omdas), and communities to ensure that customer concerns are

addressed.

ISSIP Steering Committee

HCWW PIU

Menoufia

WSC/RSU

Sharkeya

WSC/RSU

Assiut

WSC/RSU

Sohag

WSC/RSU

LAUs

NOPWASD

ISSIP Unit

24

Financial Management, Disbursement and Procurement

Financial Management

9. NOPWASD and HCWW will be responsible for the financial management of the respective

activities of the project that will be implemented by them. The four project WSCs will be

responsible for the financial management of project activities implemented by them, under the

overall guidance of HCWW. HCWW will be responsible for coordinating the FM work and for

consolidating the financial data.

10. A financial management assessment of the WSCs of Sharkeya, Menoufia, Assiut and

Sohag was conducted to identify the adequacy of their FM capacity. The financial management

assessment for NOPWASD built on the 2007 appraisal of ISSIP, taking into account

NOPWASD‟s current performance in implementing ISSIP.

11. The assessment identified the following FM risks for ISSIP2: (a) NOPWASD‟s inadequate

financial management system, which relies on manual recording systems; (b) WSCs‟ lack of

experience in implementing a Bank project, and hence their lack of familiarity with Bank FM

requirements; (c) lack of coordination between HCWW and NOPWASD; and (d) lack of

Government counterpart funds. The overall FM risk for the project, pre-mitigation, is therefore

rated high.

12. The following steps have been taken to mitigate FM-related risks to satisfy the Bank‟s

minimum requirements under OP/BP10.02:

(a) Inclusion of detailed FM policies and procedures, as well as roles and responsibilities of

all implementing entities, in the Project Implementation Manual, which should be

finalized within 45 days of loan effectiveness;

(b) A functioning computerized accounting and reporting software for NOPWASD that will

produce consolidated financial reports for all project components (this is a disbursement

condition for works); and

(c) Training will be provided to WSC financial management staff on Bank financial

management requirements.

In addition, it has been proposed that the ISSIP auditor be also engaged to audit ISSIP2 project

financial statements based on terms of reference acceptable to the Bank.

13. Budgeting. NOPWASD will be responsible for the overall budgeting and counterpart

funding arrangements for the project. As in the case of ISSIP, each project WSC will develop its

own budget and disbursement plan in accordance with the project procurement plan, forecasted

dates for activities, as well as completion and timing of payments. These will be consolidated at

the HCWW PIU level. The financial management team in each WSC will be responsible for

entering the cost estimates, along with the disbursement timeline, into the project accounting

information system. This information will be used to compare actual performance with estimates,

monitor deviations, and prepare periodic reports to management and to the Bank. Similar

25

arrangements (as in the case of ISSIP) will apply to NOPWASD for project activities

implemented by NOPWASD.

14. Accounting System. As in the case of ISSIP, NOPWASD will retain overall

responsibility for all project accounts. The accounting and reporting system developed under

ISSIP will be used to record ISSIP2 accounting transactions, both in NOPWASD and in the four

project WSCs. The system will link the WSCs with the HCWW PIU. NOPWASD and HCWW

have agreed to extend the application of ISSIP software to the four ISSIP2 WSCs.

15. Internal Control. Project internal controls include ex-ante and ex-post reviews on

project progress and the validity of payments through site engineers, supervision consultants, and

the HCWW review committee. Site engineers and supervision consultants will provide ex-ante

controls through the review of physical progress and approval of contractors‟ invoices/billing. In

addition, post reviews of network contracts will be conducted at the HCWW level through

review committees, which would include technical and financial representatives from HCWW

and NOPWASD.

16. The Project Implementation Manual will incorporate the FM arrangements under ISSIP2

which will include, inter alia: budget preparation procedures; the update of project disbursement

plans; accounting policies to be adopted; project chart of accounts, main accounting treatments,

procedures and steps for the flow of funds between NOPWASD, HCWW and WSCs;

management of the two designated accounts and the four WSC sub-accounts (signatories, criteria

for advances and replenishments, periodic reconciliation and reporting); filing system and

retention of supporting documents; and audit terms of reference tailored to the specific needs of

the project.

17. Financial Reporting. Each of the four project WSCs will prepare reports for their

respective parts of the project, which will then be consolidated at HCWW. The following table

summarizes the different required financial reports under the project:

Report Frequency Due Date By Sent to Language

Financial

Reports

Monthly 10 days from

end of month.

WSCs/RSUs Internally to

management

Arabic or

English

Interim

Financial

Report

Quarterly 45 days from

end of quarter

WSCs/RSUs

and HCWW

PIU

Bank through

HCWW

English

Project

Financial

Statement

Annually One month

from end of

fiscal year

(FY).

WSCs/RSUs

and HCWW

PIU

Bank through

HCWW

English

18. Project Audit. Annual audits for the project will be conducted by independent private

auditors acceptable to the Bank. To minimize cost, it is recommended that the same auditor will

cover all project parts implemented under both ISSIP and ISSIP2. The audit will be performed

for the project as a whole (i.e., all components and sources of funds). The audit report,

accompanied by a management letter, will cover the project‟s financial statements, reconciliation

26

and use of the DAs, use of direct payments, and withdrawal based on SOEs. The report should

be submitted by HCWW PIU to the Bank no later than six months following the closing of the

fiscal year (fiscal year July 1 to June 30). The external audit report should be in accordance with

Bank auditing requirements/TOR and in compliance with acceptable auditing standards. The

auditor‟s terms of reference will include field visits, with clear mandates to verify physical

progress, as well as a limited review of the quarterly project IFRs.

19. Continuing Entities’ Audits. Certified copies of the annual financial statements of

NOPWASD and HCWW and their respective audit reports (prepared by the Egyptian Central

Audit Organization) will be submitted to the World Bank within six months after the closing of

the fiscal year.

Disbursement Arrangements

20. Disbursement of ISSIP2 loan funds will be based on reimbursement or direct payments to

contractors/consultants and/or advances to designated accounts if opened by NOPWASD (the

legal counterpart entitled to receive the loan funds). NOPWASD will make funds available to

HCWW on a grant basis to implement its affiliates‟ respective activities.

21. Disbursement from the loan will only be made for civil works contracts. The loan will

disburse 67% (for Components 1 and 2) against the value of each contract, subject to a

consolidated ceiling of US$199.50 million.

Procurement

22. Procurement activities will be carried out by NOPWASD and the four WSCs.

NOPWASD is currently responsible for some of the procurement activities under ISSIP, which

are similar to its procurement responsibilities envisaged under ISSIP2. A Procurement Capacity

Assessment (PCA) was carried out for NOPWASD in 2007 prior to ISSIP appraisal.

23. A PCA for the WSCs of Assiut, Sohag, Sharkeya, and Menoufia determined that the

procurement risks to achieving the project development objectives are high; however, there is

some variability in procurement capacity between the four WSCs. The principal risks identified

were: (a) lack of procurement specialists with experience of procurement in international donor

and Bank projects; and (b) lack of computerized systems.

24. The principal risk mitigation measures that are being adopted include: (a) adoption of a

Project Implementation Manual (PIM), listing procurement procedures to be used, in accordance

with Bank Procurement Guidelines (within 45 days of loan effectiveness); (b) appointment of

qualified procurement staff in the RSUs of the four WSCs; (c) training of procurement staff on

Bank procurement in the class room and on the job (on-going); (d) appointment of consultants at

WSCs for project management, including procurement (project implementation); (e) preparation

of draft bidding documents by the Feasibility Study consultants (already in place) for wastewater

treatment plants; and (f) finalization of Standard Bidding Documents for National Competitive

Bidding, taking into account ISSIP experience.

27

25. Procurement for the proposed project will be carried out in accordance with the World

Bank‟s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated May 2004 and

revised October 2006 and May 2010, as well as the provisions stipulated in the Legal

Agreement.

26. Procurement Plan. The project currently envisages use of loan funds for procurement

of about 90 civil works packages; there are no goods packages or consulting contracts financed

by the loan. The implementing agencies have prepared a Procurement Plan acceptable to the

Bank for the first 18 months of the project. The Procurement Plan will be updated at least

annually or as required to reflect project implementation needs and improvements in institutional

capacity. The Procurement Plan will be posted on the appropriate Bank‟s web page and the

project‟s website. Each WSC will prepare the first bid package by October 31, 2011.

27. Project Standard Bidding document (PSBD). All Works packages will be issued under

National Competitive Bidding process using the PSBD reviewed by and acceptable to the Bank.

A PSBD in Arabic will be prepared by NOPWASD for WWTP procurement contracts (as used

for ISSIP) and include lessons learned in ISSIP. Contractors will propose a treatment technology

and provide detailed designs for the WWTP. Similarly, another PSBD in Arabic will be prepared

by the HCWW PIU for use by the four WSCs for the network packages. This PSBD will also be

based on Bank‟s model document, which is currently used for ISSIP, and will incorporate

lessons from ISSIP. The standard bidding documents developed and agreed for ISSIP2 will be

used for all World Bank financed projects in the water and sanitation sector in Egypt.

28. Prior and Post-reviews. The prior review threshold for NCB civil works contracts will

be $5 million per package. However, the first three contracts from each WSC, irrespective of

value, will be subject to prior review. The post-review ratio will be one in five contracts.

Environmental and Social Aspects (Including Safeguards)

29. Environmental Impacts. As the potential environmental and social impacts of the

project are expected to be limited, short-lived, and reversible, the project has been classified as

Category “B”, which requires a partial assessment. As detailed designs were not available at

appraisal, a “framework” assessment was carried out. This will be followed by scoped and site-

specific Environment and Social Impact Assessments (ESIAs) before each phase of project

implementation. The ISSIP2 Environmental and Social Impact Assessment Framework (ESAF),

which is an update of the ISSIP ESAF (and which includes the updated ESMMF), is acceptable

to the Bank.

30. Social Impacts. Two social assessments were carried out as part of the Environmental

and Social Assessment Framework (ESAF) to reflect the geographical and cultural differences in

Upper Egypt (Sohag and Assiut) and the Delta Region (Menoufia and Sharkeya). The overall

social impact of the project is considered positive as it will improve access to sanitation and

sewerage services as well as improve environmental conditions in rural areas, where a substantial

number of poor people live. The project will have a direct positive impact on the livelihoods and

health of the populations in the target villages, particularly of women and children, who are the

most affected by the poor sanitary conditions.

28

31. Potential positive indirect socio-economic impacts of the project on the communities

include: (a) improved health conditions as a result of a cleaner environment; (b) improved

quality of life for the community; (c) improved maintenance of public buildings and homes

through elimination of wastewater overflows; (d) increased business opportunities in the project

area; and (e) employment opportunities for local labor.

32. Negative impacts of the project are associated with temporary and/or permanent land

acquisition, temporary disturbances in circulation and access, noise, air quality (associated with

odor and pollution), public health and safety issues during operation, and influx of temporary

workers. These impacts are in general limited and considered manageable through the

establishment of necessary mitigation measures as detailed in the ESAF and the RPF.

33. Land Acquisition. A Resettlement Policy Framework (RPF), acceptable to the Bank,

has been prepared to address potential involuntary land acquisition and resettlement issues since

the specific project sites are yet to be determined. The RPF: (a) documents the categorization of

project-affected persons (PAPs), eligibility criteria for compensation, methods for valuation and

delivery of entitlements to PAPs, grievance mechanisms, and the implementation and monitoring

processes; (b) includes measures to ensure that PAPs are informed about their options and rights;

and (c) offers alternative types of compensation that are in compliance with Bank policies.

Should resettlement become necessary once specific project sites are identified, resettlement

action plans, acceptable to the Bank, will prepared and implemented prior to commencement of

works.

34. Mitigating Measures for Environmental and Social Impacts. The ESAF includes an

Environmental and Social Management and Monitoring Framework (ESMMF), which proposes

a set of mitigation measures, monitoring plans, and institutional arrangements to mitigate the

potential negative environmental and social impacts during project implementation and

subsequent operation. It includes responsibilities for the implementation and supervision of the

plan, verification, monitoring and training requirements, record keeping and documentation

requirements, and provides proper grievance handling procedures as well as the level of funding

required for implementing the plan.

35. Cultural Heritage. Districts that possess archeological artifacts will require clearance

from the Ministry of Culture to proceed with construction. OP 4.11 Cultural Heritage is not

triggered, as the project does not involve construction in areas where there are known cultural

artifacts. All bid documents will include the “chance find” clause. In case cultural artifacts are

found, construction will come to an immediate halt and OP 4.11 will become applicable.

36. Community Participation and Public Consultations. Consultations were held in the

four target Governorates with the participation of key local stakeholders, including community

members, local authority leaders, community development associations, WSC staff, and

government authorities. In Upper Egypt consultations were held on November 8, 2010 in Assiut

and on November 9, 2010 in Sohag. Consultations in the Delta were held on December 30, 2010

in Sharkeya and November 22, 2010 in Menoufia. The dates of these consultations were

advertised in the local newspapers in advance to elicit participation. Consultations confirmed

the willingness of communities to participate and support the project. Issues raised included the

29

transparency of the village selection process and potential implementation delays. These were

addressed during the meetings and will be kept in mind during project implementation.

37. Disclosure. The ESAF and RPF were disclosed in Egypt (in Cairo and in the project

Governorates) and in the InfoShop on January 13, 2011 in accordance with Bank policies and re-

disclosed in-country on February 22, 2011 and on InfoShop on February 28, 2011 and on April

14, 2011.

38. Capacity for Safeguard Implementation. An Environmental and Social Specialist in

the PIU will be in charge of coordination, monitoring, and supervision of the ESMMF as well as

land acquisition and resettlement activities. The PIU will, in coordination with various direct

stakeholders, implement the capacity building and training program stipulated in the ESMMF.

30

Annex IV: Operational Risk Assessment Framework (ORAF)

Project Development Objective(s)

Description: The Project Development Objective is to provide targeted populations in the Governorates of Menoufia, Sharkeya,

Assiut and Sohag with increased access to improved sanitation and sewerage services.

PDO Level Results

Indicators: Increased number of people connected to improved sanitation and sewerage services in the project

Number of wastewater treatment plants meeting Egyptian effluent treatment standards

Volume of wastewater treated per day (m3/day)

Risk Category Risk Rating Risk Description Proposed Mitigation Measures

Project Stakeholder Risks

Stakeholder Risks

Low

Continued Government

commitment to the project.

Potential mis-alignment with the

programs of the many other donors

active in the sector.

Opposition from residents of the

project governorates, NGOs, and

civil society in general.

On-going high level sector dialogue

with key Government

ministries/agencies regarding the

sector and the project.

Continued frequent meetings with all

donors to exchange information as

well as conducting joint missions for

related operations.

Local consultations incorporated into

the planning and design process. Local

Administrative Units will be used for

consultation and engagement with

communities on an on-going basis.

31

Implementing Agency Risks

(Including FM & PR Risks)

High Weak technical, procurement

and FM capacity in WSCs.

Absence of continued senior

level Government commitment

to the project objectives and

scope.

Implementing a large

investment project by four

inexperienced WSCs provides

opportunities for fraud and

corruption.

Establishment of RSUs, with

qualified staff – technical,

procurement, and FM – in each

WSC.

Technical assistance for: project

preparation, including

preparation of bidding documents

based on detailed designs; project

management; and construction

supervision.

Inclusion of procurement and FM

policies and procedures in the

Project Implementation Manual.

Training of RSU staff on technical,

procurement, and FM aspects related

to the project.

Regular dialogue with key officials

in MOHUUD, NOPWASD and

HCWW, in particular when there are

changes in key senior staff.

Increased transparency through

disclosure of project information in

the HCWW website.

On-going guidance from Project

Management Consultants.

Effective internal and external audit

32

arrangements.

Effective supervision by Bank

fiduciary specialists.

Project Risks

Design Risk

Medium –

Likelihood

Inaccurate project costing

based on feasibility studies.

Different geographic terrains

(Upper Egypt and the Delta)

may affect design quality.

Project cost estimates will be based

on detailed engineering designs.

Preparation of feasibility studies and

detailed engineering designs based

on site specific requirements.

Safeguards Risk

Medium –

Likelihood

Lack of capacity to prepare an

acceptable ESMMF and ESIA,

and implement the management

and monitoring plan.

Project affected persons (PAPs)

may not be fully compensated

(as per OP 4.12) for land

acquired and/ or involuntary

resettlement.

Consultant support to prepare

safeguards documents

(environmental and social) to meet

Bank requirements and to monitor

implementation.

Environmental training for staff in

RSUs.

Regular supervision of safeguards

aspects during Bank missions and

guidance from Bank specialists on

an on-going basis, as required.

Program and Donor Risk

Low Potential conflicts with the

projects of other donors in

Assiut and Sohag.

On-going dialogue with the other

donors operating in the same

geographic areas as ISSIP2.

33

Delivery Quality Risk

Medium –

Impact

Inadequate funding for

Operation and Maintenance

(O&M).

Lack of managerial/technical

capacity for Operation and

Maintenance (O&M).

Inability to manage large

number of contracts effectively.

Confirmation from MOHUUD that

grants will be provided to the project

WSCs in accordance with the

Development Policy. Annual review

of, and dialogue on, O&M funding

status between Bank missions and

MOHUUD/HCWW.

Provision of technical and utility

management training by HCWW.

Support from Project Management

and Construction Supervision

consultants.

Supervision by Bank technical and

procurement staff.

Overall Risk: Preparation Risk Rating: Implementation Comments

Medium – Impact Medium – Impact This is a follow-on project to ISSIP. However, ISSIP has

recently begun implementation and the lessons are not yet

fully known. The project is underpinned by the sector

Development Policy, to whose development the Bank and

other donors contributed. The project addresses the needs of

priority areas identified by Government. Project Agencies

are fully committed to the project. However, ISSIP2 WSCs

have no experience of Bank projects.

34

Annex V: Implementation Support Plan

Strategy and Approach for Implementation Support

1. The strategy for implementation support has been developed based on the nature of the

project and its risk profile. It will aim at making implementation support to the client more

flexible and efficient, and will focus on implementation of the risk mitigation measures defined

in the ORAF for implementing agency risks (rated “high”) and delivery quality risk (rated

“medium-impact”).

2. Implementing Agency risks. Bank missions will confirm that the PIU and the RSUs are

fully staffed, with qualified technical, procurement and FM specialists and that appropriate

training in their respective fields of expertise has been provided, including refresher training,

where required. Missions will also review the staffing and the work of consultants supporting

the implementing agencies on project management, detailed engineering and design, construction

supervision, and environmental and social aspects. Bank technical specialists will confirm that

the detailed designs of sewer networks and wastewater treatment plants are technically sound

and are appropriately reflected in the bidding documents.

3. The Task Team Leader will maintain regular contact with key officials of MOHUUD,

NOPWASD, HCWW, and the WSCs to exchange views on strategic issues of project

implementation and address any critical issues, e.g., potential or actual non-compliance with

important project covenants.

4. Bank FM and procurement specialists will provide training to relevant PIU and RSU

staff before commencement of project implementation. They will review the efforts of HCWW

and NOPWAD in implementing financial management and procurement in accordance with the

PIM. In particular they will monitor disclosure of project information on the HCWW website,

the effectiveness of internal control arrangements to address possible fraud and corruption, and

review the auditor‟s reports regarding weaknesses in controls and cases of fraud and corruption.

The financial management specialist and the procurement specialist will both be based in the

country office to provide timely support. Supervision of financial management and procurement

will be carried out semi-annually as part of the project supervision plan and additional support

will be provided on an as needed basis in response to client needs.

5. The environment specialist and the social specialist will ensure that site specific ESIAs

and RAPs are prepared, consistent with the ESAF and the RPF, based on detailed designs, and

confirm that they are acceptable to the Bank. They will confirm that the required safeguard

staffing is in place at the PIU and the RSUs, and staff has been provided the requisite training to

carry out their responsibilities. They will make field visits on a semi-annual basis to ensure that

the ESMMF and the RAPs are being implemented in a satisfactory manner. The social and

environmental specialists will both be country office based.

6. Delivery Quality Risks. The Bank technical specialists will confirm that Project

Supervision consultants have adequate staff in place to review contract management, in

35

particular construction quality. They will conduct site visits, jointly with the PIU, the RSUs, and

the consultants, on a semi-annual basis throughout project implementation.

7. A financial specialist will conduct periodic (at least annual) reviews of the financial

status of the WSCs to assess their progress towards achieving financial sustainability and to

confirm that adequate subsidies are being provided as per the Development Policy and

agreements with the Bank. S/he will review financial matters with key officials of MOHUUD

and HCWW, in particular the timely provision of counterpart funding for the project and the

adequacy of subsidies for O&M.

8. Use of Country Office Based Staff. In order to ensure that the mitigation measures to

address the principal risks are being implemented in a satisfactory manner and to provide on-

going implementation support to the implementing agencies, key members of the Bank Task

Team (technical, procurement, financial management, environmental and social safeguards) will

be country office based staff.

Implementation Support Plan

9. Staff skill mix required is summarized below.

Skills Needed Number of Staff Weeks Number of Trips Comments

Water and Sanitation

Engineer

Six staff weeks (SWs) first

year, and two SWs

annually thereafter.

Two each year.

Process Engineer Six SWs first year, then

two SWs annually

thereafter.

Two each year.

Procurement Four SWs annually Fields trips as

required.

Country office-based

Monitoring and

Evaluation Specialist

Four SWs annually Fields trips as

required.

Social Specialist Four SWs annually Fields trips as

required.

Environment Specialist Four SWs annually Fields trips as

required.


Financial Management

Specialist

Two SWs annually Fields trips as

required.


Sector Financial Analyst Two SWs annually One per year.

Task Team Leader Six SWs annually Two each year.

36

Annex VI: Team Composition

World Bank staff and consultants who worked on the project:

Name Title Unit

Parameswaran Iyer Task Team Leader, Senior Water and

Sanitation Specialist MNSWA

Claire Kfouri Water and Sanitation Specialist MNSWA

T. Mpoy Kamulayi Lead Counsel LEGEM

Danielle Malek Roosa Senior Counsel LEGEM

Brenda Morata Paralegal LEGEM

Augustin Maria Economist SASDU

Maged Hamed Senior Environmental Specialist MNSEN

Mariana Felicio Social Development Specialist MNSSD

Badr Kamel Senior Procurement Specialist MNAPR

Hyacinth Brown Senior Finance Officer CTRFC

Akram El-Shorbagi Senior Financial Management Specialist MNAFM

Wael Elshabrawy Financial Management Specialist MNAFM

Raja Iyer Operation Adviser/Consultant MNSWA

Luz Maria Gonzalez Financial Analyst (Consultant) MNSWA

Heba Yaken Operations Analyst MNSWA

Zaileen Rahim Engineering Consultant MNSWA

Ahmed Atta Engineering Consultant MNSWA

Zakia Chummun Language Program Assistant MNSSD

Enas Mahmoud Program Assistant MNCO3

37

MAP SECTION

A L WA D IA L J A D I D

MARSA MATRUH

ASWAN

QENA

SOUTHERNSINAI

NORTHERNSINAI

SUEZ

HELWAN

G I Z A

AL BAHR

AL AHMARASSIUT

EL FAYOUM

BENI SUEF

AL MINYA

SOHAG

1

89

1011

1213

2

3

4

5

6 7

Luxor

Kom Ombo

Halaib

Marsa 'Alam

Salum

Siwa

Qara

Mut.

Quseir.

Bir Seiyala

Ras Gharib

Taba

Abu Zenima

Giza

Marsa Matruh

Qena

Suez

Helwan

Aswan

Sohag

Assiut

Benha

Tanta

Damietta

El Tur

Zagizig

Al Minya

Ismailia

Damanhur

El'Arish

El-Kharga

Beni Suef

El Fayoum

Port SaidEl Mansura

Alexandria

Al Ghurdaqah

Shibin el Kom

Kafr elSheikh

CAIRO

A L WA D IA L J A D I D

MARSA MATRUH

ASWAN

QENA

SOUTHERNSINAI

NORTHERNSINAI

SUEZ

HELWAN

G I Z A

AL BAHR

AL AHMARASSIUT

EL FAYOUM

BENI SUEF

AL MINYA

SOHAG

1

89

1011

1213

2

3

4

5

6 7

S U D A N

SAUDIARABIA

JORDANISRAEL

LIBYA

WEST BANKAND GAZA

Aswan Dam

Nile

River

LakeNasser

Gulf of Suez

Gul

f of

A

qaba

Red

Sea

M e d i t e r r a n e a n S e a To Tel Aviv

To Port SudanTo

BerberTo

Dongola

To Jalu

To Darnah

25°E 30°E

30°N

25°N

20°N

30°N

25°N

20°N

35°E

25°E 30°E 35°E

ARAB REPUBLICOF EGYPT

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 50 100 150

0 50 100 150 Miles

200 Kilometers

IBRD 38342

JANUARY 2011


SECOND INTEGRATED SANITATION ANDSEWERAGE INFRASTRUCTURE PROJECT

PROJECT GOVERNORATES

SELECTED CITIES AND TOWNS

GOVERNORATE CAPITALS

NATIONAL CAPITAL

MAIN ROADS

RAILROADS

GOVERNORATE BOUNDARIES

INTERNATIONAL BOUNDARIES

GOVERNORATES IN NILE DELTA:

1234567

KAFR EL SHEIKHDAMIETTAPORT SAIDALEXANDRIABEHEIRAGHARBIYADAGAHLIYA

MENOUFIYASHARGIYAHQALIUBIYAISMAILIACAIROGIZA

89

10111213