Document of The World Bank

FOR OFFICIAL USE ONLY

Report No. 39410-WS

PROJECT PAPER

ON A

PROPOSED ADDITIONAL FINANCING

CREDIT IN THE AMOUNT OF SDR 2.712 MILLION

AND

GRANT IN THE AMOUNT OF SDR 2.712 MILLION

TOTAL AMOUNT OF SDR 5.424 MILLION

(US$8.27 MILLION EQUIVALENT)

TO THE

INDEPENDENT STATE OF SAMOA

FOR THE

SECOND INFRASTRUCTURE ASSET MANAGEMENT PROJECT (SIAM-2)

CREDIT NUMBER 3848-WSO

May 23,2007

Transport, Energy and Mining Sector Sustain able Development Department East Asia and Pacific Region

This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not otherwise be disclosed without World Bank authorization

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS (Exchange Rate Effective April 30,2007)

AGO AMs CERP CIMP COEP

D C DO EA EIA EMP FM FMR GIs GOS GST IAPSO I A M P I A M - 1 I C B IDA IERR

CQS

CurrencyUnit = SDR SDR1 = US$1.52493 Tala 1 = US$0.36

FISCAL YEAR

January 1 - December 31

ABBREVIATIONS AND ACRONYMS

Attorney General's Office Asset Management System Cyclone Emergency Recovery Project Coastal Infrastructure Management Plans Codes o f Environmental Practice Consultants' Qualifications Development Consent Development Objectives Environmental Assessment Environmental Impact Assessment Environmental Management Plan Financial Management Financial Management Report Geographic Information System Government o f Samoa Goods and Services Tax Inter-Agenc y Procurement Services Office Infrastructure Asset Management Program Infi-astmchre Asset Management Project (Phase-I) International Competitive Bidding International Development Association

ILS KPI LARAP LARF LTA MNREM MOF MWTI N C B PAD PEAR PIU PMU PUMA QCB S S A A SBD SIAM-2 SPG sss WB

Internal Economic Rate o f Return W C R

Instrument Landing System K e y Project Indicators Land Acquisition and Resettlement Action Plan Land Acquisition and Resettlement Framework Land Transport Authority Ministry o f Natural Resources, Environment and Meteomlogy Ministry o f Finance Ministry o f Works, Transport and Infrastructure National Competitive Bidding Project Appraisal Document Preliminary Environment Assessment Report Project Implementation Un i t Project Management Unit Planning and Urban Management Agency Quality Cost Based Selection Samoan Airport Authority Standard Bidding Documents Second Infrastructure Asset Management Project South Pacific Games Single Source Selection Wor ld Bank West Coast Road

Vice President James W. Adams Country Director Nige l Roberts

Sector Manager Junhui Wu Task Leader Thakoor Persaud

FOR OFFICIAL USE ONLY

I . I1 *

I11 . IV . V . V I . VI1 .

VI11 .

SECOND INFRASTRUCTURE ASSET MANAGEMENT PROJECT (SIAM-2) CREDIT NUMBER 3848-WSO

PROPOSED ADDITIONAL FINANCING (CREDIT AND GRANT)

PROJECT PAPER

TABLE OF CONTENTS

Introduction ............................................................................................................. 1

Background and Rationale for Additional Financing ............................................. 3

Proposed Changes ................................................................................................... 8

Consistency with the CAS or CPS .......................................................................... 8

Economic Analysis o f Cost Overrun and Scaled-up Activities .............................. 9

Expected Outcomes .............................................................................................. 10

Benefits and Risks ................................................................................................. 10

Financial Terms and Conditions for the Additional Financing ............................ 13

Annex 1:

Annex 2:

Annex 3:

Annex 4:

Annex 5:

Annex 6:

Annex 7:

Annex 8:

Annex 9:

Project Cost by Sub-component ..................................................................... 15

Implementation Progress o f On-Going Project ............................................... 18

Critical Loan Covenants Compliance as at October 3 1. 2006 ........................ 23

Financial Management Assessment Note ....................................................... 24

Procurement Arrangements (Technical Annex) ............................................. 25

Environmental and Safeguard Issues .............................................................. 32

Key Performance Indicators ........................................................................... 34

Project Outcome Indicators ............................................................................. 35

Total Project Cost by Component .................................................... 36

PROJECT PAPER DATA SHEET

Project Name: Second Infrastructure Asset Management Project

Borrower: Government o f the Independent State of Samoa

Country Director: Nigel Roberts Environmental Category: B (Partial

Responsible agency: Ministry o f Works, Transport and Infrastructure; Ministry of Natural Resources, Environment and Meteorology

Revised estimated disbursements (Bank FY/US$ million)

Current closing date: December 31, 2008 (Credit) Revised closing date: June 30, 2010 (Credit and Grant)

Does the restructured or scaled-up project require any exceptions f rom Bank I policies? Have these been approved by Bank management?

oYes X N o o Y e s o N o

I s approval for any policy exception sought from the Board? Revised project development objectives/outcomes [Zf applicable]

I oYes X N o

N/A

Does the scaled-up or restructured project trigger any new safeguard policies? I f so, click here to indicate which one(s) [selection box like the one in the new ISR] NO

For Additional Financing [ ] Loan [X ] Credit [XI Grant For Loans/Credits/Grants:

Total Bank financing (US$ million): 8.27 Proposed terms: IDA (Grace period: 10 years; Years to maturity: 40; Grant: 50%)

Financing Plan (US$ mill ion)

I. INTRODUCTION

1.1 Financing (Credit and Grant) in an amount of SDR 5.424 mi l l ion (US$8.27 mi l l ion equivalent) to the Independent State o f Samoa Second Infrastructure Asset Management Project (P075523) (Cr. No. 3848-WSO).

This Project Paper seeks the approval o f the Executive Directors to provide Additional

1.2 to be financed under the additional Credit and Grant. These activities were subjected to a full IDA review and feasibility analysis in terms of the economic, environmental and institutional resources aspects. This review showed that i t w i l l be feasible for all of the works to be ful ly implemented within three years, i.e., with an 18-month extension (to June 30, 2010) from the existing Credit Closing Date (December 3 1, 2008). The type o f activities to be financed, along with some associated explanations are presented below. As indicated in Annex 1, all of these works and activities are within the scope of the original project and most o f them were identified and appraised during preparation o f the original project.

Utilization o f Proposed Funding: Annex 1 provides a detailed summary o f the activities

1.3 Vaitele Street (works o f US$5.45 million, associated design and supervision fees of US$0.44 mill ion and land compensation for right-of-way access (US$0.077 million); for improving the drainage of the West Coast Road (WCR) (works of US$2.56 mi l l ion and associated design and supervision fees o f US$0.3 million) and for ongoing TA costs up to end December 2008 (US$0.257 million) and implementing a computerized Asset Management System (AMS) for the Samoa Airport Authority (SAA) after reviewing available options.

Financing Gap: (US$9.14 million or 79pevcent of total costs') for the road widening o f

1.4 Reasons for Financing Gap: During project implementation, significant differences became apparent between the original appraisal estimates and actual bid prices. For example, for the design, supervision and works listed below, the total cost was originally estimated to be about US$15.4 mi l l ion whereas the current estimated cost i s about US$46.6 million). One result of this i s that at appraisal, the IDA Grant was expected to finance 57 percent o f the total project costs, currently, i t i s only expected to finance about 35 percent o f such costs.

PAD Estimate Lowest Evaluated Bid

(WST million) (WST million) Activity (Dec. 2003) Received

Road design services 0.70 1.15

West Vaitele Street widening 7.10 22.40 Central Vaitele Street widening 6.20 20.99

Total 15.40 46.56

Road supervision services 1.40 2.02

1.5 Reportedly, one of the main reasons for this wide gap was due to the limited comparators for project costing during appraisal. In addition, some consultant services and works which had not been fully financed under the previous (IAM-1) project were postponed and subsequently financed under SIAM-2.2 Other reasons include increased petroleum-based product prices; a

Excluding GST and contingencies. An amount of SDR 850,000 (US$1.2 million) or 10 percent of the SIAM-2 Credit.

1

small number of local contractors with limited capacity; unattractive size and location o f the market for foreign contractors; project works scale and technology; high transportation costs and foreign content o f inputs; and more recently, competing demands from South Pacific Games (SPG) construction. Some special design features (e.g., underground utilities for originally- appraised works) also contributed to the higher cost.

1.6 can be done by the government to mitigate the outcome. However, for many o f the others, the Government of Samoa (GOS) and project team applied several measures to address the increase in costs. For example, repackaging o f the works (geographically and b y size with the option o f bidding for all or part of the package), wider bid publicity, contractor orientation and design modifications were all initiated and have led to greater local competition and lowering o f bid prices without affecting the work quality. Nonetheless, despite actions taken to reduce costs, Additional Financing w i l l s t i l l be needed under this project for gap financing for some o f the important sub-projects which could not be funded under the original SIAM-2 Credit and which are s t i l l economically and socially justified.

For some o f these factors (e.g., high petroleum prices and high import content), not much

1.7 impact o f the project works. The GOS proposes to use part o f the proceeds of the Additional Finance to carry out complementary works within the project area in order to enhance project impact. These additional works include upgrading a bridge and a culvert in order to improve traffic f low and safety and ease congestion within the original project area. GOS wi l l also procure goods and services aimed at implementing, monitoring and enforcing sustainable operation and maintenance practices for i t s transport and coastal infrastructure assets (including: enforcement o f EIA regulations; public dissemination and training for all villagers in Upolu and Savaii on Tsunami awareness; establishing vertical controls for a Geodetic survey carried out under the project; reviewing the national natural hazards early warning system; assessing the national earthquake risk; and continued support for the use o f Coastal Infrastructure Management Plans (CIMP). Under the original Credit a small grants facility for community sub-projects was included (PAD, p. 24-25) and was largely successfully implemented. The Government has indicated that i t wishes to continue financing the grants but from alternative sources. However in the event that the need arises in the future, the component for Grants to communities remains under the Project. In such a case, the communities w i l l continue to receive their funds as small grants irrespective of whether the larger Project component i s being financed b y either Credit or Grant.

Scaled-up Activities: (US$2.43 million or 21 percent of total costs3) to enhance the

1.8 50-50 basis, there w i l l be no attempt made to differentiate ab initio, specific project expenditures to be financed out o f Credit or Grant funds. As with the ongoing project, the Project Implementation Unit (PIU) w i l l submit annual work programs which will, among other things, clearly identify which of the agreed priority works are to be implemented over the period under review. These w i l l continue to be sent for IDA’S N o Objection and progress w i l l be monitored during implementation.

It i s expected that while the Credit and Grant funds would be tracked and disbursed on a

Excluding GST and contingencies.

2

1.9 this Additional Finance. I t w i l l bear 35 percent of Baseline Total Project Cost (including contingencies but excluding GST), through budget allocations. For the proposed Additional Finance, the same disbursement percentages b y category w i l l be used as under the original Credit.

Partnership Arrangements: The GOS continues to be the primary financing partner for

11. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING

2.1 SIAM-2 Profile: The Infrastructure Asset Management Program (IAMP) i s a two-phased APL operation. Infrastructure Asset Management Project (IAM-1), the f i r s t Credit (1999-2003) was for approximately US$14.4 mi l l ion o f a US$18.7 mill ion project and was aimed at meeting vital priorities and strengthening management in the transport and coastal infrastructure sector. SIAM-2 i s the second phase (2003-2008). I t i s for approximately US$12.8 mill ion4 of a US$22.6 mill ion project and i s aimed at investing in sustainable growth and protection o f those assets and management systems. SIAM-2 was negotiated in November 2003, signed in January 2004 and declared effective in June 2004. With a closing date of December 3 1,2008, the project has reached i t s mid-point in terms o f implementation time. Following the March 2006 implementation status review, the GOS decided to seek additional funding.

2.2 enhance the economic, environmental and social sustainability of transport and coastal infrastructure assets; and (ii) to manage those assets and natural resources and respond to national emergencies, through an effective partnership with private sector stakeholders.

As cited in the Project Appraisal Document (PAD), the objectives o f the project are (i) to

2.3 Components: The above objectives are to be achieved through the following five components: (a) airport infrastructure, including the provisjon and installation o f instrumented landing system and maintenance and improvement o f selected infrastructure; (b) specific rehabilitation and construction to upgrade the road transport system, improve the road network capacity in Apia and environs, provide access to remote villages and improve resilience o f infrastructure to natural hazards; (c) strengthen the capacity, through TA and equipment, o f the Ministry o f Natural Resources and Environment (MNREM) and stakeholders in environmental management, natural risk management and emergency management, upgrading the geodetic survey control network, revising related regulations and developing alternatives for the land administration system; (d) institutional development in transport and infrastructure stakeholders (primarily the Ministry o f Works, Transport and Infrastructure (MWTI); and (e) strengthen the capacity of the Ministry o f Finance (MOF), MWTI and MNREM to implement the project and i t s components.

2.4 The MWTI and MNREM are the main implementing agencies under the project, responsible for implementing Components B and C, respectively. The S A A i s responsible for implementing Component A.5 M O F provides overall coordination and oversight o f the project and i s assisted in i t s day-to-day project management functions b y a Project Management Unit (PMu).

SDR9 million, equivalent in January 2007 to approximately US$l3.37million. The equipment was totally funded by the GOS but i t utilized a guarantee through the Samoa Provident Fund thus

altering somewhat the funding method for this component. Assistance for an Asset Management Needs Assessment under the current Credit i s s t i l l being considered.

4

5

3

2.5 Status: Annex 2 shows the implementation progress o f the ongoing project by sub- project completion rates. In terms o f physical and TA activities, the number o f componentshb- projects has increased from the originally appraised 43 to 63, as a result o f a repackaging o f sub- projects under Part B o f the project and additional activities introduced under Part C.' As discussed above (para 1.6), these repackaged works helped increase competition and lower cost. All activities s t i l l fal l within the original description of the project (Schedule 2 of the DCA) and do not require any project modification.

2.6 As discussed above (paras 1.3-1.6), early in the process, i t was determined that the funds were not going to be enough to finance all of the original project works. The Vaitele and Fugalei Street widening (Component B.4) were then postponed until a decision could be made on how to proceed. Also, because o f the poor condition o f the Fagaloa Bay Road and the urgent need for improving it, the government decided to finance this upgrading work (part o f Component B.5), with i t s own funds.

2.7 the project (including those fully-funded b y GOS), 28 are physically complete. There are a further 15 sub-projects successfully procured, with works well underway or the technical assistance activity i s complete or almost complete with some associated draft legislation at various stages o f approval. The remaining 8 sub-projects are all expected to be procured b y June 2008.

The chart below shows that o f the 51 sub-projects involving procurement actions under

Status of Contracts Under Original Credit (as at January 31,2007)

100% Complete 61 Procured and underway 0 To be procured 1 2.8 (about 48.5 percent o f Credit) to US$7.77 mi l l ion (about 58.1 percent), wi th a total of US$13.4 mill ion (35.3 percent o f total project costs) committed under signed contracts as of January 31, 2007. Project D O and Implementation Progress indicators continue to be satisfactory. The issue of cost overrun has already been discussed (paras 1.5 and 1.6 above). In addition, the March 2006 national elections, a backlog o f pending bills and ongoing preparations for Samoa's hosting of the August 2007 SPG have all had an impact upon project activities. For example, there are several legislative actions to be submitted to Parliament to facilitate implementation o f

Between January and December 2006, total disbursements rose from US$6.5 mi l l ion

Survey and GIS equipment to complement the on-going project. 6

4

recommendations from the project studies. Also, with the staff constraint of the MWTI, i t has been sometimes difficult to find skilled staff to simultaneously review procurement and contract management o f both the SPG and project activities. However, in a letter of October 24,2006, GOS reiterated i t s strong commitment to the project and i t s efforts to resolve such problems by fill ing vacancies and calling upon private sector sources. Subsequently, in i t s letter o f December 13,2006, the GOS undertook to prioritize several key legislative actions involving valuation, survey, land registration and spatial information. The Disaster Management Bill and the LTA Bill were recently approved (March 2007).

Performance Indicator

Samoa Airport Authority cost recovery for air transport infrastructure assets Asset management system operational for airport infrastructure assets Staffing and effective functional capacity of MWTI

Annual portion of road network under preservation treatment

Service quality ratings by road users and affected groups

Cost recovery of road maintenance (est WST 25 million)

Competitive price savings for works and services

Staffing and effective functional capacity of MNRE

Coastal communities protected/covered by CIM Plans

Compliance with EIA provisions

Available cadastral land plans digitized and validated

2.9 Performance Indicators: Project performance has consistently been satisfactory since effectiveness. The latest performance indicators are shown in Table 1 below. As i t indicates, except for those components awaiting legislation, project achievement i s slightly ahead o f planned targets. The average cost-savings benefit to date i s 25 percent (compared to 2003 prices), with asphalt overlay decreasing b y 6-29 percent, reconstruction costs decreasing b y 38 percent and rehabilitation costs decreasing by 11 percent. Resealing has however increased by 169 percent due primarily to petroleum price increase since 2002 and limited local competition (only two sealing contractors in Samoa).

Table 1 : Key Performance Indicators Baseline 1 End of Projec

Unit (Dec. 03 November 2006 (EOP) Target Actual Target

0x3 60 , 70 69 80

N ~ I ’ Operational Partial * Operational I

60 75 71 85 %tech & mgt positions filled

% primary road krn 9 ~ 10 9 4 10 ~

% good ~ - 60 65 80

50 60 61 80 User chargeS/road ~

needs % 5 1 % below 2003 avg

cosVkm ~ 2o

l o 15 ‘ 25

60 75 1 73 1 90 %tech & mgt positions filled

% District 35 70 72 100

0x3 40 ’ 60 100 80

% titles 0 30 1 30 100

*’ SAA has a comprehensive asset register, which w i l l be expanded to a full asset management system under the

3/ Based on 2003 organization structure. 4’ Based upon visual/roughness assessment o f roads. No mechanism was established for user-group assessment

’’ The Road Maintenance Budget wi l l be used in lieu of User Charges (which Samoa currently does not have)

6’ Maintenance limited to pot-hole patching, shoulder repairs, edge repairs, drainage clearance and verge mowing.

additional financing.

and the Government has requested replacing this by an International Roughness Indicator index.

until current legislation i s approved and in place.

5

2.10 purchase. However, i t continues to provide cost recovery information under the project and i t recently completed a diagnostic study for an AMS and for TA which i s being reviewed b y government for further implementation under the project.

As explained (footnote 5), the SAA decided to use alternative funding for i t s equipment

2.1 1 Performance has been satisfactory. Sustainability prospects improved substantially wi th recruitment of an Asset Engineer in the Asset Management Unit and renewed attempts to update the data base. In addition, all critical legal covenants are being met as shown in Annex 3 and the project demonstrates sound financial management systems (Annex 4) wi th well-established arrangements in place. Apart f rom some clarifications to the indicators, as noted above, no other changes are being proposed in relation to the Additional Financing. There are no overdue audit reports. Procurement management has also been satisfactory (Annex 5).

For the past thirty months, the project achievement in DO and Implementation

2.12 The Land Acquisition and Resettlement Framework (LARF) was updated in November 2003 and a Land Acquisition and Resettlement Plan (LARAP) for road widening works along Vaitele Street (now to be financed under the additional Credit) was prepared by M W T I and endorsed by MNREM in November 2003. In compliance with the IDA-approved LARAP, the government, through i t s Taking ofLands Act (1964) initiated, on September 1, 2006, a consultative process to acquire the small parcels of land required for rights- of-way for Vaitele Street widening and a few intersection works which partially affect the boundaries o f a total 158 plots. This has been the largest exercise o f i t s type in the country so far and, understandably, i t has taken time to review and address the issues that have arisen. The Cabinet has approved the total compensation payment amount (WST5.57 million), based on land valuations carried out by independent valuation consultants (consistent wi th the IDA-approved LARAP) and the government has made 3 1 percent o f payments to date. I t i s now in the final stages o f the payment process, but i t has documented 93 cases (of the 158) where, for various legal reasons, payments w i l l take some time to f i n a l i ~ e . ~ So as not to delay the works, the GOS placed all compensation funds in an escrow account, created on June 3,2005 (Special Purpose “IAMP-2 Land Compensation” Account under the Ministry o f Finance) and, as individual cases are reviewed and finalized, payments are being made from the dedicated account. The current arrangements have been reviewed b y the Bank’s Resettlement Specialist and found to be satisfactory.

2.13 owners for the government to have access to install the needed drainage systems along the roads and affected areas to prevent damage to the road and personal property f rom floods. To assist with such arrangements, the GOS has passed the Public Drains Regulation, 2007. In the event that any further unforeseen land acquisition i s done under the Additional Finance works, the current LARAP wi l l apply.

For the West Coast drainage works, appropriate arrangements are being made with land

’ These include: Customary Land where ownership yet to be confirmed by the Land and Titles Court (15); Freehold Land that i s the subject of deceased estates in the process of being finalized (43); owners thought to reside outside o f the country (13); lands with mortgage where commercial banks have not yet decided if payment i s to go to owner or banks (1 1); owner challenging compensation in court (1); owners negotiating equal exchange o f lands (2); and owners still undecided on the form of compensation (8).

6

2.14 funding source.

Table 2 below shows the Additional Finance total costs by project component and

Table 2: Additional Finance Total Costs by Project Component and Funding Source

Funding (Add'l Cr.) Funding (Add'l Cr.) Component Govt. IDA Govt. IDA

US$ million Eqv. %

Airport Infrastructure 0.0 0.0 0.0 Road and other Infrastructure 3.79 5.68 40.0 60.0 Sustainable Management 0.08 0.14 37.0 63.0 Institutional Development 0.21 0.53 28.4 71.6 Project Management 0.27 0.62 30.5 69.5 Total Baseline Cost 4.45 7.1 1 38.5 61.5 Physical Contingencies 0.58 0.0 100.0 Price Contingencies 0.58 0.0 100.0 Total Cost (excl. GST) 4.45 8.27 35.0 65.0 Total Financing Required 4.45 8.27 35.0 65.0

2.15 Disbursement under the Additional Finance w i l l be combined insofar as some contracts and activities w i l l be partially funded by both the original Credit, the Additional Finance Credit and Grant and, in some cases, out of counterpart funds. Table 3 below shows the original funds allocation along with the Additional Finance proceeds and the new total figures by category. The figures in different tables may show some variation to the extent that (a) the U.S. dollar value of the SDR has fluctuated over time since the original Credit was approved and these figures (at different rates) are added together and (b) there are some rounding o f f o f the numbers.

Table 3: Allocation of Proceeds of Additional CrediUGrant

Financing (%)

100% foreign expenditures, 100% local expenditures (ex- factory), 90% local expenditures

2 Goods for other items procured locally 80% foreign indiv, 75% local firms and local indiv, 67%

80% foreign indiv, 75% local firms and local indiv, 67%

Consultants Services (Parts B

Consultants Seivices (Parts C

3A andE)

38 and D) 4 Training

5 Incr Op Costs

6 Grants 100% o f Grant amount disbursed

Note: [l] Based on SDR:US$ exchange rate as at March 31,2007 (SDRl=US$l.51326)

7

111. PROPOSED CHANGES

3.1 provide about US$1.06 mill ion to assist the SAA to acquire an Instrument Landing System (ILS), along with some equipment and TA for an AMS and to assist i t develop strategies for achieving financial sustainability.* During the course o f the SIAM-2 project, government financing to the SAA was provided through the Provident Funds for i t s I L S purchase (see footnote 5). Under the Additional Finance, no further funds wi l l be provided under Component A but an amount w i l l be financed through Component D6.01, Transport and Infrastructure Strengthening, to assist SAA review options for assessing and implementing the computerized AMs. There w i l l be some additional expenditure for a vehicle and other goods (para 1.7 above) needed to help in dissemination and monitoring o f some environmental components. With limited funds, the Fugalei Street works (part of Component B.4) w i l l not be financed under this project. The Fagaloa Bay upgrade (part of Component B.5) has been fully financed from counterpart funds and there w i l l be two bridges (under Component B. 1) constructed. Appropriate adjustments to the legal document have been made to reflect these changes. In addition, under the Additional Finance, further Small Grants w i l l not initially be funded, as the government i s able to finance these using funds from the Cyclone Emergency Recovery Project (Cr. 3885- WSO; Grant H-083-WSO) and from a UNDP-funded project. However, if, as the project progresses, there i s need for further funding for small Grants and some funds become available, i t may be possible to reallocate funds to this category.

At appraisal of the original Credit, for Component A, i t was envisaged that the GOS wi l l

3.2 going project would be carried out in accordance with the World Bank’s Guidelines: Procurement Under IBRD Loans and IDA Credits, dated May 2004 and revised in October 2006; and Guidelines: Selection and Employment of Consultants by World Bank Borrowers, dated May 2004 and revised in October 2006, and the provisions stipulated in the Financing Agreement. The general description o f various items under different expenditure categories i s described in Annex 5. For each contract to be financed b y the Credit or the Grant, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank project team in the Procurement Plan. The Procurement Plan w i l l be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. Procurement activities would continue to be carried out by MWTI, MNREM and MOF, all assisted by the PMU. Recent supervision missions have confirmed that their performance continues to be satisfactory. In addition, staff from all project organizations received training in procurement in February 2007. The overall project risk for procurement remains average, which i s consistent with the latest OPR (May 2006).

Procurement for the activities to be financed under the Additional Finance and the on-

IV. CONSISTENCY WITH THE CAS OR CPS

4.1 the Pacific and the shared nature o f many o f the problems facing countries in the region, a Pacific Regional Strategy has been prepared for the Pacific countries (Fiji, Micronesia,

RePional Assistance Strategy: Given the relatively small size o f the Bank’s operations in

Under the f irst S IAM-1 project, among other actions, SAA complied with agreements to improve operations, close 8

an inefficient local airport and take other actions in line with international regulations.

8

Kiribati, Marshall Islands, Palau, Solomon Islands, Samoa, Tonga, and Vanuatu). The government’s request for Additional Finance i s consistent wi th the Bank’s recent Pacific Regional Strategy as presented in the Regional Engagement Framework FY2006-2009 for Pacific Zdands (May 2005). The Strategy states that the Bank w i l l continue to assist GOS in consolidating i t s “f irst generation” reforms o f public expenditure management wi th a focus on key MDG areas, including the infrastructure sector. In terms o f the strategy, the Bank also w i l l increasingly seek to inform and advance government’s “second generation” reforms aimed at supporting the domestic business climate and private sector development.

4.2 under the strategic pillar and focal area o f “improving the public expenditure management of infrastructural assets” with i t s expected output of key infrastructure assets performing satisfactorily with increased resilience to natural r i sks and managed through an effective partnership with private sector stakeholders.

The SIAM-2 project (both original Credit and proposed Additional Finance) falls directly

V. ECONOMIC ANALYSIS OF COST OVERRUN AND SCALED-UP ACTIVITIES

5.1 original project works. I t includes: the assumptions and sources o f data used in the analyses; actual and forecasted data on traffic volumes; economic project costs; vehicle operating costs and benefits to transport users. Also included are benefits over a 20-year period; origin- destination traffic counts; traffic growth rates assumptions; capital investments and maintenance costs; savings in vehicle operating cost and in travel time.

Annex 4 o f the PAD contains details of the Cost-Benefit analyses conducted for the

5.2 Investments were assessed from a technical as well as economic, environmental and financial perspective for the Additional Financing of (a) Vaitele Street widening; (b) Togafuafua Bridge; (c) Vaimoso-Uta Ford; and (d) West Coast Road Drainage Improvement. Since the Vaitele Street was evaluated under the original project components, the Internal Economic Rate o f Return (IERR) was re-estimated and compared to the original figure to ensure that i t i s s t i l l economically viable.

5.3 Using the same methodology employed in the PAD analysis, the original and re- estimated IERR for the Vaitele Street works are as indicated below. These results are consistent with the new and more representative (higher) cost figures. The increased value of land adjacent to the improved works i s not taken into account in this or other analyses. Because most of these are customary land with no representative market value, i t i s not easy to quantify and include such benefits. However, based upon experience in other countries, such benefits are expected to be significant. Sti l l , when compared with a 12 percent opportunity cost o f capital, the re- estimated IERR of 22 percent net o f any land improvement value, demonstrates that the Vaitele Street work i s economically viable.

Works PAD IERR Re-estimated IERR

Vaitele Street widening 74% 22%

9

5.4 The additional works comprise one bridge and a culvert. These two works have a combined estimated cost of US$1.47 mi l l ion and are key structures for the roads they connect. They are in urgent need of repairs. I f they collapse, they would cause severe hardship to residents and other users since there are no easily accessible alternative routes and users would have to utilize improvised pedestrian structures. Because i t i s rather difficult to quantify and estimate benefits attributable to these structures b y themselves, least cost assessments, consistent with national construction norms and standards, have been used in deciding the best design option. All the works w i l l be consistent with prevailing safety and construction norms and standards as well as the maintenance capacity of the MWTI.

VI. EXPECTED OUTCOMES

6.1 under the original project and the other works complement these project works, the expected project output and outcomes do not change. The SIAM-2 key outputs l isted in the PAD (page 3) are as follows:

8

8

Since 79 percent of the funds are to be used for gap financing for works already defined

Air transport infrastructure i s consolidated and managed sustainably;’

Land transport and road system assets are restructured with sustainable management and financing;

Access, capacity and safety of road system assets are enhanced for remote communities and Apia;

Management o f environment, natural resources and disasters are restructured in partnership with c iv i l society; and

There i s environmentally and economically sustainable protection o f infrastructure assets in coastal and other areas.

For most of the above, there has been good progress toward achievement of the expected

a

8

8

6.2 output and impact. In instances where there have been some delays in the past (e.g., land transport and land registration systems), the required legislation i s currently in parliament. I t i s expected that once these are approved, the necessary actions w i l l be taken and key outputs and impact w i l l be achieved.

VII. BENEFITS AND RISKS

7.1 road transport costs through reduction o f life-cycle road infrastructure costs; (b) reduction o f accident costs; (c) lower road costs; (d) roadside communities and road users benefiting from improved safety; (e) improved access b y rural communities served b y the feeder roads within the project to basic services leading to improvements in livelihoods; (0 public and private assets in the coastal hazard zones having improved resilience to natural disasters; (8) village communities in the coastal hazard zones having lower risk to their livelihoods and assets; (h) general socio- economic benefits and fiscal savings derived from a streamlined public service; (i) strengthened

Benefits: Among the main benefits l isted in the PAD are (a) real resource savings in total

As explained in para 3.1, the SAA did not use project funds for i t s I L S equipment, but i t has had SIAM-1 financing 9

and it i s seeking TA for i t s asset management program.

10

and expanded private sector; 0) increased community participation; (k) ready access to high quality land- and asset-related information; (1) strengthened land ownership procedures; and (m) sustainable management o f and investment in infrastructure. Since most o f the new funding goes to financing gap and related activities, the components and associated benefits are expected to remain unchanged.

7.2 Risks: The PAD rates overall r i s k s for the ongoing operation as Moderate. This rating i s also expected to continue for the additional funding, primarily because it i s for the same package o f activities dealing with the same institutions under s imi lar circumstances. During the original appraisal of the ongoing project, land acquisition delay was mentioned as the only high-risk item. While there were delays for this activity, this i s understandable in light o f this being among the largest land acquisition exercise carried out in Samoa affecting about 158 plots. This i s combined with added issues o f init ial unfamiliarity with the Bank's Guidelines, difficulty o f ascertaining ownership and boundaries in an environment of unsurveyed Customary Land plus some privately-owned plots, wi th many owners dead or absent from the country or in litigation amongst themselves. After some init ial problems (e.g., determining land value in a country where only 4 percent i s privately owned, ascertaining who i s the legitimate head to negotiate on behalf of groups owning communal land, locating absentee owners, determining boundaries, etc.), the procedures are now well underway with about one third o f the affected families compensated and adequate provisions in place (dedicated account in Treasury) to compensate the remaining owners as they sort out the wide range of problems listed (footnote 7).

7.3 Moderate r isks identified in the PAD include: (a) aviation related revenues or restructuring measures imposed on SAA; (b) inadequate budget allocation for road and bridge preservation; (c) inadequate measures to apply and enforce risk management plans, environmental conservation and controls on land use and behaviors; (d) deferment of establishing LTA beyond i t s currently proposed date o f establishment of July 1,2008; (e) road user charges not implemented or structured to achieve substantial cost recovery; and (f) legislation for major improvements to land registration and titling not being authorized.

7.4 operations and these show improved financial performance and sustainability. As already noted (para 3.0 1) the aviation I L S equipment was purchased under an alternative government-financing arrangement but the SAA i s s t i l l seeking project assistance for TA and asset maintenance.

Evaluating these r i sks so far, under the project, SAA has provided information about i t s

7.5 In terms of the other r isks, while the government has so far shown strong commitment to the reform measures being proposed under the project, a backlog of pending draft legislation and high-profile cases in the Attorney General Office (AGO) i s competing for attention with several project-related legislation. Among these are pending legislation on land registration and EIA. Many of them have been placed on a priority l i s t and are currently with parliament. Approvals within the next few months appear likely. Notwithstanding these positive signals, the r isks mentioned above are s t i l l present although recent commitments of the government in letters to the Bank indicate that they may be lessened b y the keen interest o f the GOS in the proposed reforms.

7.6 experts with the necessary s k i l l s and experience required to establish, operate and maintain such

After parliamentary approval, the next challenge w i l l be to find the resources, including

11

entities as the new LTA and to convert the existing land Cadastral titling registration system to the new Torrens-based system. I t i s expected that many o f the follow-up actions envisaged under the ongoing project w i l l help to mitigate these r isks.

7.7 other key project output relate to protecting natural resources, guarding against disasters and protecting the coastal infrastructure. The Samoa MNREM i s a well-established entity wi th adequate professional staff and systems in place to manage these areas. As explained in Annex 6, the MNREM and the Planning and Urban Management Agency (PUMA) have incorporated several of the elements used under the I A M - 1 as well as the ongoing SIAM-2 projects into their normal sector operations, building on these in several ways. In the ongoing works done so far, all major works of the MWTI have undergone a Preliminary Environment Assessment Report (PEAR) while general maintenance and small works are following the National Codes o f Environment Practice (COEP). In the preparation of Designs as prescribed in the RFPs for all works, an environmental assessment either in the form of a PEAR or full EIA (whichever i s applicable) needs to be conducted and integrated in the design. An Environment Management Plan (EMP) i s also prepared as the main documentation to be attached to the Development Consent (DC) application from MWTI to the PUMA. DCs are also sought f rom community development works implemented as part of the Small Grants scheme.

In para 6.1 above, apart from environmental aspects related to the land transport works,

7.8 appraised for the ongoing project, provisions are already in place for monitoring any environmental impacts. For the additional bridge, culvert and other activities, existing provisions also apply because these are similar to other works already done under the project. The required Environment Management Plan sets out the approaches proposed b y the selected design and supervision consultants on behalf o f the MWTI, to mitigate or avoid adverse environment impacts. Design and supervision tenders clearly indicate how they w i l l complete these requirements while tenders for construction also have similar requirements. A DC i s issued only after PUMA i s satisfied with the proposals.

Since about 79 percent o f the Additional Finance funds goes to works originally

7.9 PUMA has the powers under i t s Act to stop the construction at any time where they see that a condition o f the D C i s not being met by the Contractor. During construction, the PUMA officers conduct at least two monitoring evaluations to ensure that the D C requirements (and any attached conditions), are strictly adhered to. The construction supervisors are also required to follow the EMP requirements and DC conditions during the monitoring o f specific project activities. The SAA, MWTI, and MNREM history in relation to these environmental requirements i s highly satisfactory, wi th all project activities going through the D C process. While there have been cases where PUMA has had to intervene to ensure compliance with environmental plans, in most cases, i t s regular site presence has been enough to ensure compliance.

7.10 prepared in November 2003 to address land-acquisition issues. Nationally, with over 90 percent of the land being customary land held in the name of village heads and with most not formally registered or surveyed to establish boundaries, ownership disputes are common.

Resettlement Plan: Annex 11 of the PAD contains details of the LARF, which was

12

7.11 Within the project area, work on the Vaitele Street widening and a few intersections have triggered preparation of a LARAP to compensate those owners who have to cede small strips of land for these works. The LARAP was prepared by the MNREM and submitted to IDA on April 5 , 2005, with approval given by IDA on April 19, 2005. I t shows that 158 owners were affected. Of the affected plots, 32 were under customary ownership, nine were owned by government and the others were under freehold ownership. Clause 14 o f the Constitution stipulates that the government has to pay market rates promptly wi th the right o f appeal to the Supreme Court i f owners do not agree with the compensation package. In the case of the Vaitele Street widening and associated works, no owner had to be resettled as a result of loss o f the land they were asked to cede for the works. However, there were two owners (of the total 158) whose remaining plots were too small for their subsistence needs and they requested a comparable value exchange of land at other locations.

7.12 and the process of getting the LARAP prepared and approved took time because o f the issues already discussed in paragraph 2.10 above. For the West Coast drainage works, the residents realize the importance o f needed structures in reducing flooding o f their lands and property loss and damage and they are providing access to the MWTI (without land acquisition being triggered) to facilitate installation o f drainage structures.

As indicated earlier, this has been one of the largest single exercise of i t s type in Samoa

VIII. FINANCIAL TERMS AND CONDITIONS FOR THE ADDITIONAL FINANCING

8.1 Grant (50 percent). A new Legal Agreement w i l l be entered into to reflect the Additional Financing. At the same time, a corresponding amendment to the original Development Credit Agreement w i l l be signed. Table 3 (in the main text) shows the additional activities to be financed. As indicated, there i s no new disbursement categories envisaged since all of the activities are already accounted for under the existing project. No new Financial Management (FM) considerations are therefore needed with this Additional Financing.

The Additional Financing w i l l be in the form o f an IDA Credit (50 percent) and IDA

8.2 below, the government has actually been pre-financing the project works. Several finance- related issues are discussed below with greater details presented in Annex 4.

Counterpart funding has been provided in a timely fashion at all times. As indicated

8.3 categories were derived from IDA’S desire to ensure a reasonable level of commitment to the project from GOS. Although CFP’s have now been set for Samoa (which gives the opportunity for more flexibility in setting disbursement percentages) i t i s proposed that there be no change to the disbursement percentages for the Additional Financing.

Disbursement Arranpements: The disbursement percentages set for the various loan

8.4 discussed in Annex 4, the GOS has pre-financed payments from i t s own resources, periodically replenishing the Special Account. For the Additional Financing, the same Special (Designated) Account w i l l be used and the Legal Agreements provide to the extent practical that (a) the original Credit to be fully disbursed before utilization of the Additional Financing; and (b) the Grant funds under the Additional Financing be drawn down before the Additional Financing Credit i s used.

While the ongoing project i s financed through a Special Account, for various reasons

13

8.5 arrangement has not been entirely successful. The Bank has been flexible in allowing advances to the Special Account in line wi th cash flow forecasts, but the acquittal o f these advances has been on the basis of traditional documentation (Summary Sheets and SoE). This was allowed because of a timing difference between the GOS cycle and quarterly acquittals in the FMR’s plus some delays in WA preparation b y the project staff. In light of the above factors, for the Additional Financing i t i s proposed to revert to a traditional model with an authorized allocation of US$1 million. Amendments to the Credit Agreement w i l l be made so as harmonize both Agreements.

The existing Credit Agreement does provide for report based disbursements, however this

14

ANNEX 1. PROJECT COST BY SUB-COMPONENT Table 1: Proposed Use of Additional Finance

Category Component Planned Amount (US$) Componen t

NO.

1 1 I WORKS

2

B1.11A Togafuafua two lane multiple box culvert 736,364 B1.11B Vaimoso-Uta ford upgrade 736,364 B2.07 West Coast Road drainage improvement 2,545,455

B4.03 Vaitele Street road widening 5,454,545 Sub-Total 9,472,727

GOODS I A6.01 I SAA Asset Management Software 60,000 I C4.0301 I Vehicle for MNREWUMA " 36,364

3 3a

10,909

15,273

Sub-Total 122,546

MNREM EIA Regns enforcement and monitoring

Microfi lm cards to complete MNREM digital c4c5 (computers and software)

c5.02 library (Molesi)

CONSULTANTS' SERVICES Under Parts B and E of Proiect

B 1.10 I Design and SPN. for bridge structures 176,727 I B2.0201 I Design and supvn. West Coast drainage 305,455

E4.0102

436,364 1 Limited re-design and SPN for Vaitele St. road I B4.0202 widening Project Support Team 272,727

Sub-Total 1,191,273

3b Under Parts C and D of Project D6.0201 Contracts Engineer extn. (MWTI) 76,000 D6.0202 Assets Engineer extn. (MWTI) 76.000

I C4.01 1 Environmental Resource and Risk Management 2' 18 1,818

C5.01 D6.0102

Land Administration and Survey Services '' TISRRS extension (transitional Phase TA)

166,182 18 1.8 18

4 TRAINING

22,000 Project information dissemination for all villagers, E4.04 Upolu and Savaii 4'

5

15

INCREMENTAL OPERATING COSTS 0

6 Sub-Total 0

Small Grants 0 Sub-Total 0

GRANTS

Cat ego ry

PROFESSIONAL SERVICES LAND ACQUISITION

Vaitele Street 76,727

Sub-Total 76,727

I Total 11.567.091

Component Planned Amount (US$) Component No.

7 7

Total (excl. GSTNAT) 12,723,800 GSTIVAT 1,908,570

Physical Contingencies (5%) 57 8,35 5 Price Contingencies (5%) 578,355

14,632,370 Total Add. Finance Project Costs (incl. GSTNAT)

- Notes:

One vehicle to support PUMA enforcement of environmental regulations (one vehicle to support vertical ground control survey work to be hired through ground control consultants). Scoping of early warning systems for coastal villages (US$30,000); National earthquake risk assessment and raising awareness (US$55,000); Schools Education Program for disaster preparedness (US$65,000); Review of CIM Plan Sustainability (US$32,000). Vertical control o f Geodetic survey; refresher training and supervision of conversion of new Land Registration system , digital level and associated local transportation costs. Early warnings national awareness villagers’ workshops.

New ActivitiesIScaling up US$ Financing Gap US$

2,545,455 West Coast Road drainage (works) Togafuafua Culvert (works) 736,364

Vaimoso-Uta Ford (works) 7 3 6,364 305,455 Design and supvn. West Coast drainage

Design and SPN for bridges 176,727 Vaitele Street widening (works) 5,454,545

Vehicle for MNREMPUMA 36,364

MNREM EIA Regulations enforcement and monitoring 10,909 (computers and software)

181,818 Environmental Resource and Risk Management Land Administration and Survey Services 166,182

181,818 TISRRS extension (transitional PhaseTA) .

436,364 Limited re-design and SPN for Vaitele West St. road widening

Professional fee associated with Vaitele Street land acquisition

Mic ro f i lm cards to complete MNREM digital library

76,727

15,273

S A A Asset Management Software

Project Support Team (33%)

60,000

90,000

76,000 Tsunami national awareness

w/shops for al l villagers, Upo lu 22,000 (MOWTI) and Savaii Project Support Team (67%) 182,727 Assets Engineer extn. (MOWTI) 76,000

Total US$ 2,431,273 Total US$ 9,135,818 Total % 21 Total % 79

Contracts Engineer extn.

PROJECT TOTAL US$ (excl. contingencies and GST) 11,567,091

16

Table 2: Original SIAM-2 Detailed Project Cost by Sub-Component

A. Airport Infrastructure

B. Road & Other fnfrasrructure

P 6 4rr Traffic 'or 10

8.1 Bridge Upgrading

b ' Falpfa Eridpe 6' 07 W J .<&I Bndjr

8: 01 :+ER Caistricuan S,ipe?isiofi 8: 03 Ass* Cnast R m 1 - E2 04 k k s t Coast Koae - B 52 05 *Zest ccast Yoad - t

8.3 Road Safety and Traffic E3 05 La 17x8 St re 's €I? 05 kp B Taaffi: Uaiiagelren'

134 07 D r s i y ~ I;enices BC 02 sYps""ls131~

8.4 Rood Network Developriient

6 4 05 F L ; ~ e St Bi: 0B Land Conyet bairn

8.5 Remote Access

8.6 lnfiastructuie Risk Mitigation BE 01 IW Cesspr

85 03 wu I lb l %E 04 Iu~asono~F80ib: 3: 05 /%%I P w p n 2:04%5

t. Sustaiimble Maitagen~ent rid resources B Emergency t a a ~ ~ a ~ e i ? ~ e ~ t

1^4 CS &ehic e% 2 4 ;.I lv"'*%E icrerental Oceru'rp :ofti

C5 ;1 L * I EPqLiormt

C.6 Risk Atlaptotion Meeastires

D. ittstitutiorial CLevelopnietit

E. Project Managerneat E.4 Ptoject Management

EL 01 Frqect Mwa;enan: Wit Pro ect Mwa;ers hPvZ-l

EL 03 Project Manngeir. MFIRE E.5 Project Aud,?

Contingencies

Totirt Project Cost (excluding VAT)

USD Million Base Cost Bnse Cost Tote! w! IDA G O W .

Tala Total Canlrngencaes Total Total

3.00 ? 0.3

41.39 2.85

C 65 0 6:. 1 0.3

G 55 2 1 3 7.30 r .% : ' 5 2 "5

3.25 2 43 3 85

23.00 ? i-a 1 43 7 $0 5 :o 4 BO 3 l3J

2 49 " l y

2 29 2.50 c t o

Y i

1 n3 2 3

6.23 4.f% 14'3 G 401 : 20 c * Y 1.75 145 $ 3 0 0.30

3.96 3.66 2 83 2 72 :: or; 0.30

5.30

3 20 2 90 2 90

5.00

0 . w

5.80

65.50

1.04 1 cr,

14.28 0.98 D 22 0 22 0 35

0 " 2

2.52 0 " 9 0 7.: D 74 0 74 0 ' 3 1.12 0 e3 0 2s 7.94 0 24 L7 4s 1 4 5 2 14 1 5 3 1 [I

0 13 bi 75 0.86 *> e 3 0 €7 0 33 $3 36 3 ' J

2.95 1.44 1 * 7

0 "d

0 07- 0 08 0.60 0 53 c. " P 0.10

1.37 1.26 0 39 c 25 $2 c:

n.86

0.10

1.76 1.73 1 *ii 13 91 0 31 0.03

200

22.60

1.06 1 0E

16.06 1.10

c 2E 0 4 i

c 1:: 0 07 2.83 2 2: 5 84 F 84

84 3 'E 'I 2 6 c 9: c 32 8.93 z 29 C 5; : 6C 2 47 1 d I 1 O f

0.97 ".'I c 86 0.99 207 2 07 Z 34 c. 4: 3 *2

2.23 1.50 I 2 2 rr " 4

: 07 c 07 0.63

- 7.z j. -.

_. -- - a - c '1 0.10

1.42 1.31 1 0.: 2 2 0:

0.11

1 .a3 2.80 1 * z

,, r _ J-

0.114

22.60

9.11 0.68 Q 15 D 15 0 24

0 03 a e5 1.73 0 1: c E l 3 f l 5 5: D 3F 0.76 n ES 0 ?? 4.73 0 15 D 3:

s a * 43 * 11

11.60 c 23 a 52 0.59 c 03 0 0:

2: 5 14 c 51

1.39 0.91 a 33 0 34 D W 0 05 0.38 n 31 e 35 0.10

0.95 0.84 i 82 c 2c C O f 0.11

1.35 1.35 c ;e c 24 z 24

12.80

1 .06 .ie

6.96 0.42 P " 2 7 * ^ c: 'E

i. or 2 0: 1.10 c us : 34 ? 32 c 34 : 04 0.49 : 3€ : * s

4.20 - * I L .

3 22 t ' 1 .: 95 5 7 1

f 38 (3.3% c 03 2 3: 8.37 3 01 2 0:

2 - e z UE

0.84 6.59 : $5 c 0% : O? : 0: 0.25 : 21 : OL

" > 1 3

0.47 0.47 2 4 1 ::OF c 01

n da 0.45

2 OP :ne 0.04

~

Y -_

9.81

17

ANNEX 2: IMPLEMENTATION PROGRESS OF ON-GOING PROJECT

X = In

Loan Contract No.

X B 1.05

X B 1.06

X B1.07 B 1.09

X B1.09

X B1.10

X B2.03

X B2.04

X B3.05

X B3.06

XB4.01 I J--- B4.03

B4.0302 B

W

W

W

S

W

Component Task Description

Fagali'i W Bridge works Falefa Bridge works Talimatau and Mulivai Bridge Works Engineering designs Construction supervision West Coast Road Rehabilitation Faleolo to Fasitoo contract 1 West Coast Road Rehabilitation Fasitoo to Leauvaa contract 2 West Coast Road Rehabilitation Leauvaa to Fasitoo contract 3 Lelata Streets Works Apia Traffic Management Existing Traffic Signals Upgrade Works

Design services

Vaitele West from Vaimoso to Vailoa works Vaitele St Bridge and Pavement Preservation Package A Vaitele St Bridge and Pavement Preservation Package B Vaitele St Bridge and Pavement

100%

100%

100%

100%

0%

100%

100%

100%

100%

100%

100%

30%

0%

100%

100%

0%

0%

0%

0%

0%

Planned or Actual Completion Date

Completed Feb 2005

Completed Feb 2005

Planned Completion Jan 2008

Planned Completion May 2008

Completed Jul2005

Completed SeDt 2005

Completed Sept 2005 Completed Mar 2004 Completed Feb 2007

Completed Dec 2006

Deferred to Add Fin. Cancelled due to

insufficient available funds - Re-Packaged

Planned Completion June 2007

Planned Completion June 2007

Planned Completion June 07

18

S = In I' A D Contract No. Type Loan Category

100%

100%

- - T - - l B4.04

Completed (SOPAC funded)

Completed Jan 2006

X B4.05 W

X 4.06

X B5.01 S

X B5.02 W

X B6.01 S

X B6.03 W

100%

X B6.04 W

Completed April 2005

X B6.05 W

SUB-TOTAL WORKS CAT 1

Physical Complete

31/12/06

Component Task Description

Preservation I Package C Vaitele Central from Vaimoso to Falealili Street works

Fugalei Street widening works Land Compensation Engineering design & supervision

Fagaloa Bay Road works 1 50%

I R M Design Mulinuu Coastal Protection 100% Fasito'o- uta&Manono-uta 100%

Forward Program

Air Traffic I Control System ERRM Equipment Computer Goods, Fitout & Furnitures, Satelite Radio Communication

Vehicles L A S Equipment GPS & Survey & Specialist LAS Software Goods SAMs Upgrade Equipment

Vehicle

EauiDment I

To

Completion as at

31/12/06

Planned or Actual Completion Date

Deferred Indefinitely Deferred to GOS

Program for Additional Finance

Completed Nov 2004

I

Planned Completion Jun 2006

Completed

0% I 100% GOS funded

Completed 100%

24/06/2007 Completed

100% Julv 2005

19

$120,000

X ($70,000)

X

x

$28,000

0

$240,000

0

Contract KO.

E4.0301

E4.0302

Goods CAT 2 SUB-TOTAL

B 1.07

B1.08

B2.02

B2.06

B 3.0502

B3.0601

B4.01

B4.0101 & 02 & 03

S

Physical Complete

31/12/06

Component Task Description

Vehicle I

E ui ment + Mobilized

Mulivai, Talimatau and Overhead Pedestrian Bridge Design and Supervision 19/9/06 Fagali'i & Falefa Supervision West Coast Road (WCW Rehabilitation supervision Planning & Design West Inland Route Services Lelata Streets

Existing Traffic Signals Assessment & Desinn

Supervision 100%

Improvements - Design (Vaitele West, Vaitele Central, Traffic Mng t & Fugalei Land Acquisition for Vaitele Street, Apia Town Intersection and Fagaloa Road (100% funded by GOS). - Contracts B4.0101 Survey Services, B4.0102 LARAP Administration Officer and B4 .O 103, Building Alterations Design and

100%

100%

100%

100%

0%

100%

100%

0%

100%

100%

100%

Planned or Actual Completion Date

Completed June 2005 Completed April 2005

Planned Completion Aun 2007 Completed M a r 2005

Completed Jul2005

Planned Completion April 2008 Completed June 2004

Planned Completion Jul2007

Completed June 2005

Completed Dec 2006

20

X = I n PAD Contract No. Loan Category

B4.02

~

B4.0201

$57.000 B5.01

$43,000 B5.0102

X B6.02

D6.0204

X E4.01

X E4.02

X E4.03 X E5

SUB-TOTAL CAT

C4.01

X C5.01

S

S

S

S

Physical Complete

31 /12/06

Component Task Description

Supervision

Vaitele West from Vaimoso to Vailoa F a l e a l i l i Supervision. Vaitele Centra1,Vaimoso to Falealili St., Fugalei Amendment No. 1 Vaitele St Repackaging Supervision Services Amendment No. 2 Vaitele St Repackaging Design Services Fagaloa Bay Road design

I

2%

50%

Fagaloa Bay Road Supervision 70% IRM Manono-uta, Mulinuu & Fasito'o-uta Supervision WCR Pavement SDecialist

100%

8% Project

MWTI Project Component Manager MNREM Project I Component Manager I Audit

Environmental Management 55%

Survey and Geographic Information

0% Refer to B4.0201

Planned Completion 0% Jul2007

Completed 0% Aue 2006

Completed 100% Nov 2004

Completed( 100%GoS funded)

0% Oct 2006

Completed 100% May 2004

Completed 0% Sept 06

Planned Completion 68% Feb 09

Planned Completion Sept 07

Change to D6.04 99% 100% GOS funded

99% 0% 100% GOS funded

Planned Completion Jan 2008

Completed

21

Component Tusk Description

Transport & Infrastructure

X LTA D6.01 s Strengthening Contracts

X D6.0201 s Engineer

X D6.0202 s Assets Engineer MWTI Project

I I I Component D6.04 I s I Manager

I SUB-TOTALCAT 1 3 ( B ) C & D

X D7 .O 10 1 s Training SUB-TOTAL CAT 4 TRAINING

MNREM Incr OD X C4.04 s cost

MWTI Incr Op X D6.03 I s I cost

I SUB-TOTALCATS I INCREMENTAL

Risk Adaptation

SUB-TOTAL CAT 6 GRANT

UNALLOCATED I Contingencies I I I

TOTAL

Planned or Actual Completion Date as at

Planned Completion

Planned Completion

Planned Completion

80% June 2007

47 % 47 % Oct 2007

45 % 45 % Nov 2007

Planned Completion 100% SeDt 2007

Planned Completion Dec 2008

Planned Completion Dec 2008 Completed

80% Dec 2006

Planned Completion June 2007

22

ANNEX 3: CRITICAL LOAN COVENANTS COMPLIANCE AS AT OCTOBER 31,2006

Critical Legal Covenants

Credi t Agreement Descript ion of Covenant Date Due Status

Reference ,

Sch 4, Clause 15(b) Adopt regulations on EIA and 01/3 1/2005 C

Sch 4, Clause 16(b) Adopt COEP for c iv i l works and enforce 01/31/2005 C

Sch 4, Clause 15 (c) Enforce Coastal Infrastructure 06/30/2005 CP”

environmental management and retain staff to implement regulations.

codes.

Management Plans (CIMP), implemented b y the borrower.

Sch 4, Clause 15(d) Monitor natural hazards zones and 0313 112005 CP2’

Sch 4, Clause 14 Prepare time-bound action plan to 06/30/2004 CP3‘

changes in baseline conditions; publish results every 3 years.

implement transport sector reform (sustainability, cost recovery, LTA and consolidation o f reforms at MWTI); carry out plan.

(thereafter 03/3 1/2008)

06/30/2004

1 1 /3 0/2004 (and every year thereafter)

Sch 4, Clause 13

Sch 4, Clause 8

Establish an environmental compliance monitoring system and operate it. Samoa Airport Authority to maintain corporate business plan; review its financial performance, operations, infrastructure rationalization and submit report to IDA and subsequently implement.

C

C

Status options: C=Complied with; CD=Complied with after delay; CP=Partially complied with; NC=Not complied with; NYD=Not yet due; UNKN=Unknown.

Notes: - In parallel with CIMPs, Borrower has statutory Structure Master Plans, applied in urban areas. The Borrower requested amendment o f this covenant under the additional Credit to better reflect the assessment and enforcement procedures. The revised covenant w i l l be reflected in the amendment to the Development Credit Agreement to be signed together with the Additional Financing Agreement.

Detailed implementation schedule prepared, legislation to establish LTA currently (February 2007) at Parliament.

21 Seven out o f 52 sites have been monitored to date. 31

23

ANNEX 4: FINANCIAL MANAGEMENT ASSESSMENT NOTE

Financial Management Assessment Note

1. adequate financial management arrangements in l ine wi th Additional Financing stipulations regarding: (a) Financial Management (FM) arrangements existing in the current project; and (b) The nature o f the additional activities to be financed and whether these give rise to the need for alternate financial managements to be considered.

This Financial Management Assessment note confirms that the Project has in place

FM Arrangements in the Current Project

2. o f regular supervision. Three FM supervision missions occurred since November 2005 and all ratings have been satisfactory.

The existing arrangements are set out in the Legal Agreements and have been the subject

a) Audit: As with all projects in Samoa the audit i s undertaken by the Office of Auditor General. Financial statements have been prepared in a timely fashion and submitted for Audit within three months of the financial year end. Some minor delays (weeks rather than months) have been experienced in the receipt o f audit reports by the Bank but this has not undermined the generally sound audit arrangements. Audit opinions have been unqualified and Management Letters have not revealed matters requiring any special IDA monitoring and follow up actions.

b) Accounting Systems: As a condition o f effectiveness, the borrower was required to install accounting software, acceptable to the Association. This was done but after the software was found to be defective and not easily fixed, subsequent FM supervision missions agreed with a GOS proposal to use work-around solutions and the project now largely relies on Excel spreadsheets for reporting purposes (reconciled to the underlying government accounting system). The nature o f the Additional Financing i s that i t w i l l not need to be reported on separately and therefore no changes are envisaged to the accounting and reporting systems.

c) Reporting: Quarterly Financial Monitoring Reports have been produced and sent to IDA regularly. The reports are comprehensive and meet the obligations as set out in the Legal Agreements inasmuch as they (i) present actual sources and applications of funds for the Project, both cumulatively and for the period covered b y the report, and projected sources and applications of funds for the Project; (ii) describe physical progress in Project implementation, both cumulatively and for the period covered and explains variances between the actual and previously forecast implementation targets; and (iii) present the status o f procurement under the Project and expenditures under contracts financed out of the proceeds o f the Loan.

3. basis o f disbursement; however, the problems referred to in Section VI1 above, coupled with the difficulty o f synchronizing government accounting records wi th those o f the project (essentially a timing difference between payment and drawdown from the special account) means that this method o f disbursement has never been ful ly employed.

The original Credit provided for the use of Financial Management Report (FMR) as a

24

ANNEX 5: PROCUREMENT ARRANGEMENTS (TECHNICAL ANNEX)

A. General

1. Bank’s Guidelines: Procurement Under IBRD Loans and IDA Credits dated May 2004 and revised in October 2006; and Guidelines: Selection and Employment of Consultants by World Bunk Borrowers dated May 2004 and revised in October 2006, and the provisions stipulated in the Financing Agreement. The general description o f various items under different expenditure category i s described below. For each contract to be financed by the Credit or the Grant, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank project team in the Procurement Plan. The Procurement Plan w i l l be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

Procurement for the proposed project would be carried out in accordance with the World

I. Procurement of Works (US$5.6 million, Credit and Grant): Works procured under this project, would include mainly road works, including road widening and bridge and culvert upgrading in order to improve traffic flow. The procurement w i l l be done using the Bank’s Standard Bidding Documents (SBD) for all I C B and National SBD already in use and agreed with the Bank.

(a) International Competitive Bidding (ICB): The project i s expected to include six I C B civ i l works contracts (i.e., contracts estimated to cost more than US$l,OOO,OOO per contract), which would basically involve road widening and bridge and culvert upgrading. The estimated aggregate amount under this method i s US$4.6 million.

(b) National Competitive Bidding (NCB): Contracts estimated to cost US$l,OOO,OOO or less but more than US$50,000 are expected to be procured under NCB. The estimated aggregate amount under this method i s US$O.9 million.

(c) Shopping: Contracts estimated to cost less than US$50,000 are expected to be procured under shopping and would be applied for simple works. The estimated aggregate amount under this method i s US$O.l million.

11. Procurement of Goods (US$O.l million, Credit and Grant): Goods procured under this project, would include vehicles and equipment, such as cameras, needed to help in dissemination and monitoring of some environmental components.

(a) Shopping: There are three contracts that may be procured through shopping. All three are estimated to cost less than US$50,000. The estimated cost o f goods to be procured through this method i s US$O.l million.

(b) Procurement from the Inter- Agency Procurement Services Office (IAPSO) of the United Nations: Vehicles, computers, and related equipment may be procured

‘ through IAPSO.

111. Selection of Consultants (US$1.2 million, Credit and Grant): the main consultants’ services would consist o f the services to be provided by consulting f i r m s regarding civ i l works design and supervision.

25

Quality Cost Based Selection (QCBS): for the design and supervision of road and bridge construction, qualified consultant f i r m s shall be selected through QCBS at an estimated cost o f US$0.6 million.

Selection Based on Consultants’ Qualifications (CQS): regarding small assignments (below US$200,000) of a routine nature, such as training and/or facilitation, a qualified consultant firm may be selected through CQS method.

Single Source Selection (SSS): four contracts would involve continuation o f ongoing activities, and consideration would be given for SSS. For the PMU assignment this method would be appropriate so as to ensure continuity for the project’s implementation. The PMU’s assignment includes development of the annual work programs, procurement assistance, preparation progress reports, maintaining internal financial controls for the project, and preparation o f the project implementation completion report. The Consultant’s performance has been rated as satisfactory. The estimated amount under this method i s contract i s US$O.Gmillion.

Individual Consultants: international advisors as well as local consultants may be appointed assist in project implementation and to provide technical assistance. They should be selected through a comparison o f qualifications o f at least three qualified consultants among those who have expressed interest in the assignments or have been approached directly In addition, with appropriate justifications and after concurrence by the Bank, individual consultants may be selected on a sole-source basis in exceptional cases, such as: tasks that are continuation o f previous work that the consultants have carried out and for which the consultants were selected competitively; assignments lasting less than six months; and when the individual consultant i s the only consultant qualified for the assignment.

Short l i s t s composed entirely of national consultants w i l l not be applicable.

IV. Community Participation (Credit and Grant): under the ongoing project, a small grants program (for activities up to the value o f US$lOO,OOO) was used for works strengthening the resilience of local coastal communities to withstand the impact o f natural hazards, which often require a m ix of structural measures as well as non- structural solutions that are low-cost, small scaled and low tech. Under this program, grants to local communities and NGOs were selected via a community-based participatory process, according to procedures outlined in a Grants Operational Manual. This manual, prepared under the original project as a condition for effectiveness, defines eligibility criteria, application procedures and the implementation guidelines (including procurement) for the supported activities. I f this component i s continued with Additional Financing funds, the existing Grants Operation Manual w i l l be used.

Other: Training, Conferences, and Workshops (US$0.02 million, Credit and Grant): training (domestic and overseas) may be necessary to the development of key competencies in staff involved in project-supported functions in selected stakeholders under the Project.

V.

B. Assessment o f the agency’s capacity to implement procurement

2. all assisted by the PMU. Recent supervision missions have confirmed that their performance has

Procurement activities would continue to be carried out b y MWTI, MNREM and MOF,

26

been satisfactory. In addition, staff from all organization has received training in procurement in February 2007. The overall project r i s k for procurement remains average, which i s consistent with the latest OPR (May 2006).

C. Procurement Plan

3. which provides the basis for the procurement methods. This plan has been agreed between the Borrower and the Project Team and w i l l be available at PMU’s office. I t w i l l also be available in the Project’s database and in the Bank’s external website. The Procurement Plan w i l l be updated in Agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

The implementing agencies developed a Procurement Plan for project implementation

D. Frequency of Procurement Supervision

4. supervision missions w i l l continue to visit the field to carry out post review o f procurement actions would be appropriate.

In addition to the prior review supervision to be carried out from Bank offices, yearly

E. Prior Review Thresholds

Civil Works will include: (a) contracts estimated to cost US$200,000 or more awarded on the basis o f ICB; and (b) first three contracts awarded on the basis of NCB. The remaining contracts w i l l be subject to post review on a sample basis.

Goods will include: contracts estimated to cost US$200,000 or more awarded on the basis of ICB. All other contracts would be subject to post review on a sample basis.

Consultant services will involve: (a) contracts greater than US$lOO,OOO equivalent for consultant services provided by f i rms ; (b) all consulting f i r m s selected through Single-Source Selection; and (c) all Individual consultants selected through Sole Source, regardless o f value. All other procurement of consultant services w i l l be subject to post review on a sample basis.

All the prior review contracts w i l l be stated in the Procurement Plan.

27

ATTACHMENT 1

Details of the Procurement Arrangement involving International Competition

1, Works: L i s t of contract Packages which wi l l be procured following ICB.

Estimate Bank’s Bid Ref. No. Contract Description (US$) Method Review Opening I

Bid Receipt

24-Jul-08 Togafuafua and Vaimoso-uta Prior

Bl.ll(AE3) Bridge Two Lane Bridge 19472’727 ICB Review

B2.07 WCR Drainage Improvements 2,545,455 ICB Prior Review 10-Jd-08

B4.03lB4.041 Vaitele St West & Central Road 5,454,545 Prior 21-Jun-07 B4.06 Widening ICB Review

2. Consulting Services: L i s t o f Consulting Assignments with short-list of international f i rms.

Expected

. , Ref. No.

Bid Receipt

B1.10

Estimate Bank’s Bid (US$) Method Review Opening / Assignment’s Description

Prior 27-sep-07 QCBS Design and Supervision Services 176,727 for Bridges

305,455 QCBS Prior 23-NOV-07 Design and Supervision Services for WCR Drainage Improvement Supervision for Vaitele St Rd Widening

B2.0201

B4.0202 Prior 3 1-Jul-07 QCBS 436,364

C4.0 10 1

C5.0101

D6.0102

sss Prior 19-May-07

sss Prior 13-May-07

ERREM Services (feasibility and 181,818 workshop) Land Administration & Survey 66, 82 Services Reform Transitional Phase Technical Assistance 18 1,818 sss Prior 9-Jul-07

E4.0102 Additional Services for P M U 272,727 sss Prior 15-Jul-07

28

5 5;;

w

a M

d: a

29

rri h Q a

yl .-

E E k pa 0

30

I

6 z I 1

3 1

ANNEX 6: ENVIRONMENTAL AND SAFEGUARD ISSUES

1 I created under the PUMA Act 2004 within Ministry o f Resources, Environment and Meteorology (MNREM). The statutory processes and institutions stipulated under the PUMA Act codifies a wide range of formal environment and planning consent processes under which all ongoing and planned activities, including the SIAM-2, are implemented in close consultation and review b y PUMA in the preparation of Environmental Impact Assessment (EIA) documents and comparative environmental and social evaluations. PUMA i s currently well-staffed with in- house expertise Environmental Assessments (EA), Spatial Planning, Geographic Information System (GIs), Building Standards and Codes, Community Development and related areas. Overseas volunteers are also providing assistance to PUMA’S three units: Sustainable Development, Strategic Planning, and Urban Management.

The Planning and Urban Management Agency (PUMA) i s a new government agency

2. The P U M A staff have been actively involved in various project planning and implementation activities. The 1989 EIA Regulations under the Lands, Survey and Environment Act were revised under PUMA to facilitate the EA aspects of development control and best practice under the D C process. EA procedures established under the I A M - 1 and SIAM-2 projects have been incorporated into the PUMA Act and related instruments and are being applied to all project works. Additionally with project assistance, an updated set o f regulations has been prepared. The draft EIA Regulation 2006, i s currently with the Attorney General’s Office (AGO) and i ts approval by the Head o f State, acting upon the advice of Cabinet, i s expected soon.

3. water and run-off disposal and management along the alignment; (b) public road safety; and (c) traffic noise and control. Construction impact includes: (a) quarrying and sand mining, material preparation and storage, equipment maintenance and disposal sites; (b) transport, soil erosion, and sedimentation control and management o f impact on water quality o f surface watercourses, (c) dust and noise control during construction period, (d) soil disposal and management; and (e) waste management, for both solid waste and hazardous liquid waste and used lubricants. Since most of the construction works are relatively small and the system in place for monitoring compliance i s worlung well, there have been very few problems so far and this i s expected to continue.

The environmental issues being monitored under the project include: (a) adequate storm

4. As part o f this process, designs for all Component B sub-components (roads and infrastructure) are required to comply wi th interim Codes o f Environmental Practice (COEP) 200 1 which form the basis of safeguarding the environment from adverse environmental impacts. A Preliminary Environment Assessment Report (PEAR) i s required for each project activity under Component B. All o f Component B sub-components designs require an Environmental Management Plan (EMP) which detail mitigation measures to counter anticipated environmental impacts involved in the projects (both site and off-site impacts). The associated PEAR also forms part o f the works specifications supported by Conditions o f Contract. Penalties are imposed for noncompliance with these agreed conditions.

5. Under the current program, a “no surprises approach” i s facilitated through close liaison with the PUMA staff during the design phase for each sub-component. This i s used to develop

32

the PEAR and on this basis, the specific EMP for each project. The established EMP template i s developed in the design phase and forms part of the bidding document specifications. This assists contractors to develop an EMP that i s project specific. These plans are reviewed and approved b y M W T I before Possession of Site i s given to the contractors. Environmental compliance monitoring i s integrated as part of the supervision services during the construction phase. The contract also ensures that MWTI supervisors carry out regular monitoring during project implementation. This i s being done through empowering the Consultant Supervisor under provisions o f the contract, to impose monetary penalties and issue suspension orders for noncompliance to the EMP. T o date, there have been two cases where interventions were necessary. The works were suspended for two weeks while the contractors implemented the recommended remedial actions.

6. Since the main Additional Financing works for Vaitele Street i s for gap financing, all o f the safeguard issues affecting i t are already covered in the original PAD. The additional bridge, culvert works and footpath are relatively minor items which are very similar to works already being done under the project elsewhere and they w i l l not require any additional measures.

7. of the guidelines that have arisen from Coastal Infrastructure Management Plans (CIMP). For instance, PUMA and MNREM personnel have undergone training (some in Japan) in plan development as well as consultation techniques to prepare for consultative negotiations with village communities during determination of strategies to follow the CIMP Guidelines. With the help of consultants, there i s an ongoing orientation program with all o f the villages, aimed at ensuring that such practices as sand mining and quarrying activities are not done on unauthorized beaches. Some instances o f consultations with villagers have already resulted in design changes and other modifications to planned (non-SIAM) investments. For example, the height o f a proposed seawall was lowered in response to complaints by villagers and there have been some cases of village enforcement o f prohibitions against sand mining f rom beach nourishment programs.

MWTUPUMA have carried out further institutional strengthening on the implementation

8. (MOU) dated January 3 1,2002. This M O U ensured that the COEPs are specified in contract documents as the required operating procedures for environmental practices in all c iv i l works undertaken by MTWI. The recent revision o f the COEP 2006 has expanded topics covered in the interim version and incorporated current administrative procedures. Workshops for increasing awareness amongst Contractors, government authorities, and other key stakeholders of the COEP were conducted from January 29 to February 2, 2007.

The COEP was adopted by MWTI and MNREM through a Memorandum o f Agreement

9. Within the first quarter of 2007, there w i l l be a full review of recent environmental laws and regulations and an assessment o f the effectiveness o f both the project specific environmental requirements as well as the way in which PUMA, MNREM, MWTI, and others are monitoring and enforcing the environmental regulations nationally and long prospects for i t s sustainability.

33

ANNEX 7: KEY PERFORMANCE INDICATORS

Percent below 0 15 25 20 Competitive price savings 2003 avg. for works and services maintenance

cost/kmG1 Staffing and effective Percent tech functional capacity o f and mgt 60 75 73 90 MNREM positions filled Coastal communities

Plans Districts

provisions Available cadastral land Percent titles 0 30 30 30 plans digitized and validated

protected/ covered by C I M Percent o f 35 7 0 72 100

Compliance with EIA % 40 60 100 100

34

ANNEX 8: PROJECT OUTCOME INDICATORS

Status of Agreed Outcomes Indicators: Measurement

Progress To Date Baseline Value End-of-Project Target

Value Indicators

Date Number o r Text Date Number or

Text Date

Number or Text

75%

r %

MNREM Plan

*"*

2/3 1/2006 e " '

)O% 12/3 1/2008 protection infrastructure in good-

2. Reformed management structures in place for Land Transport, Natural resources and Environment, and Emergency Management

2/3 1/2006

- x

2/3 1/2006

1 04 ,TA iperational, 7uel levy mplemented; VDMO iperational, VlNREiM Jlan iperational.

100%

100%

100%

12/3 1/2008

12/3 1/2008

1213 1/2008

12/3 1/2008

ipproved by )arliament. Fuel evy not yet mplemented. YINREM plan for Zmergenc y YIanagement in dace. NDM Bill tlready gone

Intermediate outcome indicator@) Component A. Airport Infrastructure: Fagalii airport closed. TA under procurement.

0% )6/01/2005 jagalii Airport :losed. Airport k s e t Management Study TA :ompleted.

90% 0%

0%

)6/0 1/2005

)6/01/2005

)6/01/2005

213 1/2006

2/3 1/2006

006

0/3 1/2006

Bridges: B.l, B.2, B.3 works advanced B.4 land acquisition in progress, bid documents prepared B.5 Works under bidding B.6 3

Resources and Risks: C.4, C.5 consultancies began 2/05 C . Instituti Development: D.5, D.6 contracts

Component E. Project Management: All contracts in

ess.

C4 - 90% c 5 -100%

0% 100%

0%

-

)6/0 1/2005 100%

progress ~

35

ANNEX 9: TOTAL PROJECT COSTS BY COMPONENT

Original Projwt .4dditional CreditKrant Combined Total Component Local Foreign Total Local Foreign Total 1,wal 1:oreign I'otaI

US$ kf. Eqv. L-:s$.\l. Kqv. US$ hi. Kqv. Airport Infrastructure 1.04 0 1.04 0.00 0.00 0.00 1.04 0.00 I O 4

Sustainable Management 1.16 0.99 2.15 0.08 0.14 0.22 1.24 1.13 2.37 Instittitionrtl Dcwlopment 0.72 0.64 1.36 0.21 0.53 0.74 0.93 1.17 2 I O

Road and othcr 9.20 5.02 14.25 3.79 5.68 9.17 13.05 10.70 23.75 Inf'rastructure

Project hlanagement 1.06 0.7 1.70 0.27 0.62 0.89 1.33 1.32 1.65 Total Baseline Cost 13.24 7.35 20.59 4.45 7.1 1 11.57 17.69 14.46 32.16 Physical Contingcncics 0.71 0.47 1.18 0.00 0.58 0.S8 0.71 I .05 I .76 Price Contingencies 0.52 0.31 0.83 0.00 0.58 0.58 0.52 0.89 1 . 1 1 Total Project Costs (excl. 14.47 8.13 22.6 4.45 8.27 12.72 18.92 16.40 3532 GST) Total Financing Required 14*47 22.6 4.45 8.27 12.72 18.92 16.40 35.32

36