world bank document of the world bank for official use only report no: 74139 - gh restructuring...

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 74139 - GH

RESTRUCTURING PAPER

ON A

PROPOSED PROJECT RESTRUCTURING

OF

GHANA URBAN TRANSPORT PROJECT

CREDIT NO. 4334-GH

GLOBAL ENVIRONMENT FACILITY

GRANT NO. TF090550

Board Approval Date: June 21, 2007

TO THE

REPUBLIC OF GHANA

DECEMBER 7, 2012

Urban Development and Services Practice

Country Department AFCW1

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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ABBREVIATIONS AND ACRONYMS

AFD French Agency for Development

BRT Bus Rapid Transit

CBD Central Business District

DA Designated Account

Dir. F&A Director of Finance and Administration

DUR Department of Urban Roads

FM Financial Management

GAPTE Greater Accra Passenger Transport Executive

GEF Global Environment Facility

GoG Government of Ghana

GUTP Ghana Urban Transport Project

IFR Interim Financial Report

MLGRD Ministry of Local Government and Rural Development

MMDA Metropolitan and Municipal District Assemblies

MRH Ministry of Roads and Highways

PAO Project Advisory Office

PDO Project Development Objectives

SCUT Steering Committee for Urban Transport

SOE Statement of Expenditure

UPTU Urban Public Transport Unit

UTP Urban Transport Project

Regional Vice President: Makhtar Diop

Country Director: Yusupha Crookes

Sector Manager: Alexander Bakalian

Task Team Leader: Kavita Sethi

3

REPUBLIC OF GHANA

URBAN TRANSPORT PROJECT

CONTENTS

Page

A. SUMMARY ........................................................................................................................... 6

B. PROJECT STATUS .............................................................................................................. 7

C. PROPOSED CHANGES ...................................................................................................... 9

ANNEX 1: RESULTS FRAMEWORK AND MONITORING .............................................. 12

ANNEX 2: REVISED IDA ALLOCATIONS (US$) MILLION............................................. 18

ANNEX 3: ACTION PLAN ....................................................................................................... 19

ANNEX 4: FINANCIAL MANAGEMENT ASSESSMENT ................................................... 21

ANNEX 5: PROCUREMENT ASSESSMENT ........................................................................ 25

4

Restructuring Status: Draft Restructuring Type: Level two Last modified on date : 12/04/2012

1. Basic Information Project ID & Name P100619: GH-Urban Transport Project SIL (FY07)

Country Ghana

Task Team Leader Kavita Sethi

Sector Manager/Director Alexander E. Bakalian

Country Director Yusupha B. Crookes

Original Board Approval Date 06/21/2007

Original Closing Date: 12/31/2012

Current Closing Date 12/31/2012

Proposed Closing Date [if applicable] 12/15/2014

EA Category A-Full Assessment

Revised EA Category A-Full Assessment

EA Completion Date 08/31/2005

Revised EA Completion Date

2. Revised Financing Plan (US$m) Source Original Revised

AFD 20.00 20.00

BORR 18.00 18.00

IDA 45.00 45.00

Total 83.00 83.00

3. Borrower Organization Department Location

Republic of Ghana, Ministry of

Finance and Economic Planning

Ghana

4. Implementing Agency Organization Department Location

5

5. (a) Disbursement Estimates (Bank FY/US$m) Actual amount disbursed as of 12/04/2012 25.19

Fiscal Year Annual Cumulative

2012 25.19

2013 2.5 2.5

2014 12.0 14.5

2015 5.31 19.81

Total 45.00

(b) Disbursement Estimates (GEF FY/ US$m)

Actual amount disbursed as of 12/04/2012 5.74

Fiscal Year Annual Cumulative

2012 5.74

2013 0.60 0.60

2014 0.66 1.26

2015 0.00 1.26

Total 7.00

6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N

Does the restructured projects trigger any new safeguard policies? If yes, please select

from the checklist below and update ISDS accordingly before submitting the package.

N

7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes

The key objective of the project is to: Improve mobility in areas of participating metropolitan, municipal

or district assemblies (MMDAs) through a combination of traffic engineering measures, management

improvements, regulation of the public transport industry, and implementation of a Bus Rapid Transit

(BRT) system.

The Global Environment Facility (GEF) objective is to promote a shift to more environmentally

sustainable urban transport modes and encourage lower transport-related Greenhouse Gas (GHG)

emissions along the pilot BRT corridor in Accra

7b. Revised Project Development Objectives/Outcomes [if applicable]

6

GHANA URBAN TRANSPORT PROJECT

RESTRUCTURING PAPER

A. SUMMARY

1. The Ghana Urban Transport Project has been under implementation for over 5

years and has mixed results to date. A substantial amount of civil works has been

completed but there has been limited progress to date in establishing a suitable

metropolitan public transport planning and regulatory body which is essential for the

purposes of advancing the restructuring of bus services, including the provision of

improved vehicle standards and restructured bus routes. As a result there is no agreement

in place with the private sector bus operators to provide the proposed higher quality bus

services. These operators constitute the dominant majority of bus services in metropolitan

Accra. Beyond this shortcoming there have been substantial cost increases, following

design reviews, in the first phase of civil works and hence a need to reassess the total cost

of the remaining civil works.

2. Recognizing these issues, the Bank team discussed with the Client, during the last

mission, a proposed Action Plan which was subsequently confirmed and forwarded to the

Bank by the Government. The principal features of this action plan (see Annex 3) are (a)

steps to create a suitable metropolitan public transport regulatory body, the Greater Accra

Passenger Transport Executive (GAPTE), (b) steps toward implementing an operational

plan that is accepted by the operating bus companies, and (c) reaching agreement with the

Recipient on the content and estimated costs of remaining civil works needed to complete

the project. The Recipient has commenced implementing the Action Plan and has already

established and staffed the pre-GAPTE unit which will assume responsibility for

implementing the Action Plan outside the steps related to the civil works.

3. Based on these concrete steps the Restructuring Paper seeks the approval of the

Country Director to restructure the Ghana Urban Transport Project (GUTP) (Credit

Number 4334-GH) and the Global Environment Facility (Grant Number TF090550). The

proposed restructuring includes: (i) reallocation of credit proceeds across existing

components; (ii) a 23.5 months extension of the current closing date from December 31,

2012 to December 15, 2014; and (iii) revision and fine-tuning of the results framework.

During this 23.5 months extension period the Recipient will be expected to meet all the

outlined steps of the action plan (except formal adoption of legislation creating GAPTE)

and implement outstanding works. The execution of the outstanding civil works will be

recommended when the remaining steps of the action plan (except formal adoption of

legislation creating GAPTE) are accomplished as the works are designed to

accommodate bus rapid transit (BRT) and other restructured bus services. These

investments would be of questionable merit at best without the proposed passenger

transport reforms.

4. The overall project development objectives (PDO) of the Credit and the Global

Environment Facility (GEF) will remain unchanged as will the original safeguard

category. The implementing entities are in compliance with the Bank’s financial

management requirements. Currently, there are no overdue audit reports or outstanding

7

interim financial reports from the implementing entities. The proposed extension is

consistent with OP 13.30 and BP 13.30 and complies with all the requirements.

B. PROJECT STATUS

5. The GUTP was approved by the Board on June 21, 2007, with a credit amount of

twenty nine million eight hundred thousand Special Drawing Rights (SDR 29,800,000)

and a Grant from the GEF in an amount of seven million dollars (USD 7,000,000) and

became effective on October 19, 2007. Disbursements have reached 56.0 percent of the

credit and 82.1 percent of the Grant while commitments stand at stand at 57.8 percent and

86.3 percent respectively.

6. The project comprises mainly institutional reforms in the planning, management

and regulation of the public transport industry, and civil works for a pilot BRT route

where higher level bus services will be introduced. The institutional reforms are critical

to the improvement of passenger transport services which directly impact the

achievement of the project development objective. Though the civil works are the bulk of

the project expenditures, they will not have a significant impact on passenger transport

services without the restructuring and operational improvement of current passenger

transport arrangements. These investments would be questionable at best without the

attendant passenger transport reforms. Till recently, project implementation focus has

been on civil works with critical institutional activities lagging substantially behind. The

creation of the key planning and management entity for urban passenger transport,

GAPTE, for example, has been delayed by about three years and remains to be

established. Correcting the implementation pace of institutional reforms is imperative to

avoid a situation where the civil works are completed but without the necessary improved

bus service contracts in place. Towards this, an Action Plan (Annex 3) has been agreed

with government incorporating essential institutional reform activities which, when

completed, would restore the balance of progress on the institutional and civil works

elements, and trigger procurement of the next phase of the civil works.

7. The civil works in support of the BRT system were split into three packages: Lot

1 covered the expansion of a bridge over the Odaw river and an additional bridge over a

railway track. These works were completed on October 31, 2012, albeit with substantial

time and cost overruns. Lot 2 includes the construction of the pilot BRT route starting in

Accra Central Business District (CBD). The bidding process for Lot 2 has been

completed but the contract could not go forward as the contract completion date fell

outside the project closing date and the contract value came in higher than funds available

within the project. In addition to Lot 2, construction of terminals, depots, and tributary

route improvements required for implementation of the BRT system and improved

services on additional routes (called Type 2 routes) is included in Lot 3 which is funded

under the ongoing Transport Sector Project.

8. In view of the time elapsed since the BRT works were designed and costed,

changes in the urban road network since then, and the need to confirm compatibility of

the designs with the Ministry of Transport’s policy on handicapped access, updating of

the design and cost of the works within Lots 2 and 3 is necessary. The review and update

of both lots is now under way and results expected to be available at the end of December

8

2012. The findings will be discussed and agreement reached with government on the final

design, cost, financing, and procurement of the two lots. The agreements reached will

reflect the proposed, new closing date of the GUTP of December 15, 2014.

9. The Action Plan includes actions to initiate the extension of the project closing

date. These are government commitment to the Action Plan and creation of an interim

GAPTE unit with core staffing, both of which have been completed. Pre-GAPTE now

assumes responsibility for institutional reforms and implementation of the activities

triggering movement on the civil works. An acceptable implementation plan to complete

outstanding activities, within the proposed closing date, has been received from pre-

GAPTE.

10. The implementing agency for the project is the Department of Urban Roads

(DUR) which also manages the civil works under the project. The institutional reform

activities under the project have been managed first by the Project Advisory Office

(PAO), overseen by DUR, and subsequently by the Center for Urban Transport (CUT).

DUR and CUT, however, have mandates for civil works and knowledge management

respectively but not for operationalization of bus transport services. The obligation to

plan, regulate and manage passenger transport services is decentralized, and belongs to

the MMDAs and to their parent ministry, Ministry of Local Government and Rural

Development (MLGRD). It is vital therefore that going forward, implementation of

institutional reforms and operationalization of improved bus services is assigned where it

belongs, at the metropolitan level, with the GAPTE unit in charge. The restructured

project will therefore have a second implementing agency, the MLGRD, to advance the

institutional reform agenda for improved bus services. The DUR will continue to be

responsible for implementing the civil works.

11. While key institutional reforms remain to be completed as noted above, the

project has successfully established urban public transport units (UPTUs) in the majority

(eight of eleven) of MMDAs, bye-laws for transport regulation have been endorsed, and a

data base of routes and operators, a critical element in formalizing (planning, monitoring

and enforcement) public transport operations has been developed. In addition, the CUT,

a knowledge institute for urban transport, has been established, is staffed and functional.

Lot 1 of the civil works has also been completed.

12. The achievement of the PDO and Implementation Progress in the most recent

Implementation Status Report (ISR) dated December 4, 2012, were assessed as

moderately satisfactory due to delays observed in implementation of institutional reforms

and activities in support of improved bus services as well as slow progress on the civil

works. In the meanwhile, the government has adopted and initiated action as per the

Action Plan discussed during the Implementation Support mission of June 2012.

13. The procurement rating remains moderately satisfactory. Though the procurement

capacity of the implementing agency is adequate, the client has been very slow in

implementing procurement actions and preparation of technical evaluation and bid

evaluation reports has been especially long. Preparation of cost estimates for works

packages has also been weak leading to substantial gaps between estimated and actual

costs which result in further delays while funding gaps are resolved. These issues are

9

being addressed through regular procurement clinics organized by the Bank and updates

of cost estimates as mentioned above.

14. The financial management (FM) aspects as well are rated moderately satisfactory

due to gaps in the interim financial reports (IFRs) which do not reflect information by

components and activities as required. The record keeping system of the project is also

weak with limited linkages between contract management and accounts. An action plan

has been agreed with the DUR to address these issues through targeted training and

reactivation of DUR’s computerized accounting system.

C. PROPOSED CHANGES

15. Component 1: Institutional Development. An agency to plan and regulate

passenger transport operations in the Greater Accra Metropolitan Area, the GAPTE is

required to be established under the project. This entity will be in charge of awarding and

enforcing bus service contracts as well as handling the management of the BRT system.

The creation of this agency has been delayed and has stalled progress on prior actions

required for improved bus services on the BRT corridor and other project routes (Type B

routes). To avoid further delays, MLGRD has set up an interim unit, pre-GAPTE,

pending completion of the legal steps required to establish GAPTE. Pre-GAPTE will

assume responsibility for completion of activities as per the agreed Action Plan. .

16. Activities to be implemented by pre-GAPTE are:

Component 1. Institutional Development.

Sub-component 1B: Support to MLGRD in regulation of urban passenger

transport and outreach through the creation of pre-GAPTE.

Sub-component1C: Support Accra MMDAs for planning and developing the

bus network, support for strengthening capacity in planning, route

concessioning, operations and monitoring and evaluation aspects of BRT.

Sub-component 1F: Support to Bus operators

Component 2: Traffic Engineering, Management and Safety

Sub-components 2A, B and E. Support for traffic management in the Accra

MMDAs; area-wide traffic signal control in the Accra MMDA area; and

enforcement of traffic rules and education.

Component 3. Development of a Bus Rapid Transit System (funded by GEF).

Sub-component 3C: BRT consultation, Communications and Media Strategy.

Sub-component 3D: Overall management and operationalization of the BRT

system

17. Sub-component 1D. The project called for creation of a Center for Urban

Transport (CUT) to provide advisory services in planning, management and regulation of

urban passenger transport. The Center has been established and is functional since

December 2011. Financial support for the CUT was provided by the project on a

declining basis with 75 percent of the CUT’s expenses to be borne by Government of

Ghana (GoG) in 2012. GoG has, however, been constrained in providing its share of

CUT’s budget thus far and has requested continuation of IDA support as the Center

consolidates its capacity to function as a knowledge center. The project will, therefore,

10

provide 100 percent funding for operational expenses of CUT during the first year of the

extension and 75 percent in the second year, with financial responsibility for CUT

devolving fully to GoG thereafter. The Center will be responsible for (i) update of the

project monitoring and evaluation indicators, and (ii) assessing urban transport conditions

and compiling relevant data for the two to three cities; expenditures related to these

activities only will be supported by the project. As CUT is a Public Specialized

Institution, its budget and staff salaries will conform to the salaries and budgets of other

Specialized Public Sector Institutions.

18. Revised Results/Indicators are summarized in Annex 1: Results Framework and

Monitoring. Following the mid-term review, the results framework has been revised to

include mandatory core sector indicators and refined wording of certain indicators to

better capture the logic of and results of the project –these changes are reflected in Annex

1.

Institutional Implementation Arrangements

19. The project remains a fully blended project with GEF where GEF funded

activities continue to complement IDA funded activities. French Agency for

Development AFD will also continue co-financing the project and support the

institutional development, traffic engineering, management and safety components.

20. At present, DUR is the implementing Agency for the project. It is proposed to

add the MLGRD as a second implementing agency. Activities related to planning,

management and regulation of urban passenger transport, as specified above, will be

implemented by pre-GAPTE, a unit overseen by MLGRD. The staff and operating costs

of this unit will be funded by the project through a separate designated account.

Closing Date

21. The current project closing date is December 31, 2012, and the proposed revised

closing date is December 15, 2014. The proposed extension period offers adequate time

to complete the outstanding activities and prior actions required to trigger the

procurement of the remaining civil works.

Financial Management

22. The restructured project will have a second implementing agency, the MLGRD.

This will be in addition to the DUR. The arrangements under the DUR will remain the

same and no changes are expected. The FM arrangements under DUR have been assessed

and found to be satisfactory for the restructured period going forward. In line with the

guidelines stated in the Financial Management Manual issued by the Financial

Management Sector Board on March 1, 2010, a FM assessment was conducted at the

MLGRD. The assessment concludes that there are adequate systems in place that satisfy

the Bank’s minimum requirements under OP/BP10.02 and the overall FM risk has been

assessed as Medium-I (medium driven by impact).

11

23. The Pre-GAPTE unit will be located in the MLGRD and will have the authority to

undertake procurement and financial transactions working within the systems of the

ministry. Project management and coordination, including financial management, would

largely rely on existing GoG institutions and structures and capacities of the MLGRD

which has prior experience of implementing Bank and donor financed projects. Further

details are provided in Annex 4.

Procurement

24. The restructured project does not intend to implement any new contracts besides

the ones originally intended and captured in the approved procurement plan, as at the last

implementation support mission in June 2012. However, for contracts for which

procurement processes are yet to start prior to the restructuring, procurement will be

carried out in accordance with World Bank’s: (i) "Guidelines: Procurement of Goods,

Works and Non-Consulting Services under IBRD Loans and IDA Credits and Grants by

World Bank Borrowers" dated January 2011; (ii) "Guidelines: Selection and

Employment of Consultants under IBRD Loans and IDA Credits and Grants by World

Bank Borrowers” dated January 2011, and the provisions stipulated in the Legal

Agreement; and (iii) “Guidelines on Preventing and Combating Fraud and Corruption in

Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006,

as revised in January 2011.

25. Implementation Plan. An acceptable implementation plan has been submitted

and is attached as Annex3.

http://go.worldbank.org/XH679K5M60


http://go.worldbank.org/1M27MNVLZ0



ANNEX 1: Results Framework and Monitoring

Project Development Objective (PDO):

o Improve mobility in areas of participating MMDAs through a combination of traffic engineering measures, management improvements, regulation of the public transport industry, and

implementation of a BRT system.

o GEF Objective: Promote a shift to more environmentally sustainable urban transport modes and encourage lower transport-related GHG emissions along the pilot BRT corridor in Accra.

PDO Level Results

Indicators* Co

re

D=Dropped

C=Continue

N= New

R=Revised Unit of Measure

Baseline

(2007)

Cumulative Target Values**

Frequency Data Source/

Methodology

Responsibility

for Data

Collection YR 1

YR 2

YR 3 YR4

Indicator One:

Av. travel time by bus (min)

on BRT pilot corridor

Average travel time by bus

from Mallam Junction to CBD

R

Minutes

44

Indicator Two:

Av. Travel speed (km/hr) on

BRT pilot corridor

Average travel speed by other

vehicles on BRT pilot corridor

from Mallam Junction to CBD

R

Km/hr

Bus – 29

Trotro –

20.7

Passenger

car – 30.6

Indicator Three: Passenger

share of bus (large) %

CO2 emissions in BRT

corridors1

D

N

(%)

Tons per annum

15

1 This indicator is a GEO indicator, but will be unchanged by project until BRT is fully functioning. Therefore, there is no need / use for interim measurements to be

tracked during project implementation.

13

38,259

Indicator Four: GHG

Emissions from vehicles in

Accra along the pilot BRT

corridor

Direct project beneficiaries

(number), of which are female

(%)

D

N

(MTCO2/Yr)

No. of passngrs

(of which

%female)

1,200,000

100,000

(estimate

51%, to be

verified)

INTERMEDIATE RESULTS

Intermediate Result (Component One):

Revised Intermediate Result (Component One): Improved regulation of the public transport sector

Intermediate Result indicator

One: Set up CUT

GAPTE established

D

N

Yes/No

No

No


Two: Bye-Laws established to

regulate UPT in participating

MDAs

D

Yes/No

No


Three: UPTUs developed in

participating MMDAs

D

Yes/No No


Four: Share of Registered bus

and minibus services

D

%

0


Five: Number of contracted

BRT and feeder routes:

D

Number

0


Six: Number of bus

companies formed by a group

C

Number

0

2. Direct project beneficiaries estimate from ITP.

14

of current operators to bid for

route licenses.


Seven : Public Transport and

BRT Options Study for greater

Kumasi Metropolitan area.

D

Yes/No

No


Eight : Route services

contracts (Pilot Type B

licenses) issued

(disaggregated: Accra,

Kumasi)

N

Number

0


Nine: Total operators in Accra

and Kumasi holding type A

licenses

N % 0

Intermediate Result (Component Two):

Revised Intermediate Result (Component Two): Improved traffic management and safety in targeted urban areas


One: Number of intersections

improved in AMA, TMA,

GEDA, GWDA

C

Number

0


Two: Number of intersections

improved in KMA, EJDA

C

Number

0


Three: Traffic Signals

Systems developed at

intersections in KMA

D


Four: Set up Traffic control

centre in AMA

D


Four: Set up Traffic control

centre in KMA

D

15


Five: Functional traffic lights

supporting bus priority along

BRT and Type B routes

N

%

0

Intermediate Result (Component Three):

Revised Intermediate Result (Component Three): BRT along Graphic and Winneba Road corridor from Mallam Junction to the CBD is successfully established


One: Length of BRT Corridor

Developed

D

km

0


Two: Length of integrated

feeder routes to corridor

D

km

0


Three: Length of sidewalks

improved

D

km

0


Four: Number of contracted

BRT and feeder routes

D

Number

0


Four: Number of passenger

shelters and terminal facilities

built

D

Number

0


Five: BRT functioning

N

Yes/No

No


Six: Passenger share of large

%

0

16

buses along BRT corridor

Intermediate Result (Component Four):

Revised Intermediate Result (Component Four): Improved environmental monitoring


One: Structural Plan Updated

D

Yes/No

No


Two: SEA on urban

development and transport

planning carried out

D

Yes/No

No


Three: Permanent monitoring

of particulate and gaseous

pollutant concentrations along

the BRT corridor is in place

Yes/No

No

Intermediate Result (Component Five):

Revised Intermediate Result (Component Five): Improved data support for urban transport sector management


One:

Transport and Social Impact

Indicators

Bus

Passengers

Peak hour public transport

flow vehicle flow

Av. Walking time to/from

bus

D

Bus-km/bus/day

Pax/bus/day

Number

Min

40


Two:

17

Environmental Impact

Indicators

System in place for ambient

air quality monitoring and

vehicle emissions inventory

Ambient air pollution along

BRT corridor

D

Yes/No

ug/m3 (monthy

average)

Basic

equipment

and

software

exists

120


Three:

Capacity Development

Indicators

No of traffic police trained

No of training programs for

staff from TCPD, EPA,

MMDAs

D

Number

Number

0

0


Four: Urban transport sector

M&E plan developed and

implemented

N

Yes/No

No

*Please indicate whether the indicator is a Core Sector Indicator (see further http://coreindicators)

**Target values should be entered for the years data will be available, not necessarily annually.

Annex 2: REVISED IDA ALLOCATIONS (US$) million

Component TOTAL GOG

IDA GEF AFD

Original Revised

1. Institutional Development 15.8 1.2 11.0 13.2 0.0 1.4

A. Support to MOT 0.8 0.0 1.3 0.8 0.0 0.0

B. Support to MLGRDE 1.5 0.0 1.5 1.5 0.0 0.0

C. Support to MMDAs 1.8 0.4 0.0 0.0 0.0 1.4

D. Support to PAO/CUT 6.8 0.8 3.2 6.0. 0.0 0.0

E. Support to Kumasi MMDAs 1.2 0.0 2.0 1.2 0.0 0.0

F. Support to Bus Operators 0.4 0.0 1.0 0.4 0.0 0.0

G. Support to DUR 1.5 0.0 1.5 1.5 0.0 0.0

H. Support to MTTU 0.2 0.0 0.5 0.2 0.0 0.0

I. Support to pre-GAPTE 1.6 0.0 0.0 1.6 0.0 0.0

0.0

2. Traffic Engineering, Management and Safety 25.8 4.5 3.8 2.7 0.0 18.6

A. Traffic mgmt. in Accra MMDAs 11.2 0.9 0.0 0.0 0.0 10.3

B. Area-wide TSC, Accra 8.0 0.7 0.0 0.0 0.0 7.3

C. Traffic mgmt. in Kumasi MMDAs 2.5 2.5 0.0 0.0 0.0 0.0

D. Area-wide TSC, Kumasi 2.0 0.0 2.5 2.0 0.0 0.0

E. Traffic Enforcement and Education 0.9 0.2 1.3 0.7 0.0 0.0

F. Design and Supervision 1.2 0.2 0.0 0.0 0.0 1.0

0.0

3. Development of a BRT System 46.0 12.3 28.2 28.2 5.5 0.0

A. BRT infrastructure including interchange and

traffic management 40.5 12.3 28.2 28.2 0.0 0.0

B. Design and Supervision 4.0 0.0 0.0 0.0 4.0 0.0

C. BRT Public Consultation 1.0 0.0 0.0 0.0 1.0 0.0

D. Operationalizing BRT 0.5 0.0 0.0 0.0 0.5 0.0

4. Integration of Urban Development and

Transport Planning 1.5 0.0 1.0 0.5 1.0 0.0

5. Outcome Monitoring 0.9 0.0 1.0 0.4 0.5 0.0

A. Transport and Social Impact Indicators 0.2 0.0 0.8 0.2 0.0 0.0

B. Environmental Impact Indicators 0.5 0.0 0.0 0.0 0.5 0.0

C. Capacity Development Indicators 0.2 0.0 0.2 0.2 0.0 0.0

TOTAL 90.0 18.0 45.0 45.0 7.0 20.0

19

Annex 3: Action Plan

1. Steps and Benchmarks to activate the loan extension, procurement and award of

civil works.

i. Commitment to establish a pre-GAPTE organization with

suitable staffing and authority, located in and reporting to

Ministry of Local Government and Rural Development

(MLGRD) for administrative matters, including consultant

contracts, and to the Steering Committee for Urban Transport

(SCUT) for operational oversight.

Completed

ii. Create and staff the pre-Greater Accra Passenger Transport

Executive (pre-GAPTE) unit with the agreed powers listed and

with suitable minimal staffing. This minimal staffing shall

include the following 4-6 professional staff (head of unit,

regulations, contract management, and transport planning

experts) who will be full time employees of pre-GAPTE.

Completed

iii. Signed memorandum of understanding with the operator

representative body and SCUT /pre-GAPTE July 5, 2013

iv. Approval by SCUT of the operational plan for the Bus Rapid

Transit (BRT) system, which includes form of service contract,

method of fare collection, fare structure, and fares setting and

reviewing process.

January 21, 2013

v. Determination of what operational control technology

will be required, its cost and how traffic signal control will

be provided.

February 1, 2013

vi. Draft GAPTE legislation with appropriate powers and

authority, for formal approval by the appropriate authority. April 25, 2013

vii. Completion of a design review and revised costs

estimates of lots 2 and 3 taking into account any possible

needed changes in design that might be required or

appropriate to complete the project subject to “no

objection” by the World Bank.

December 30, 2012

viii. Formal creation of operator entities that will be able to

enter into legal bus service contracts. May 31, 2013

ix. Commencement of contract negotiations with all

selected bus entities for BRT and three pilot Type B route

service based on detailed route service contract documents

ready for signature.

April 26, 2013

x. Adoption of legislation formally approving the creation

of GAPTE with appropriate powers and authority July 25, 2013

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i. Benchmarks for proceeding with civil works procurement. Completion of steps i

through vii will allow proceeding with the tendering process for Lot 3 and re-tendering

for Lot 2, if needed, subject to Bank review and agreement on the design review (step

vii), and financing plan.

ii. Benchmarks for offering Bank’s no objection to awarding contracts for civil

works (lots 2 and 3). The mission will recommend to Bank management offering the no

objection for awarding contracts for works when steps i through ix are completed.

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Annex 4: Financial Management Assessment

1. The restructured project will have a second implementing agency, the MLGRD.

This will be in addition to the DUR. The arrangements under the DUR will remain the

same and no changes are expected. The FM arrangements under DUR have been assessed

during FM missions and found to be satisfactory for the restructured period going

forward. In line with the guidelines as stated in the Financial Management Manual issued

by the Financial Management Sector Board on March 1, 2010, a financial management

(FM) assessment was conducted at the MLGRD. The assessment concludes that there are

adequate systems in place that satisfy the Bank’s minimum requirements under

OP/BP10.02 and the overall FM risk has been assessed as Medium-I (medium driven by

impact).

2. The Pre-GAPTE unit will be located in the MLGRD and will have the authority to

undertake procurement and financial transactions working within the systems of the

ministry. Project management and coordination, including financial management, would

largely rely on existing GoG institutions and structures and capacities of the MLGRD

which has prior experience of implementing Bank and donor financed projects. Further

details are provided in Annex 4.

3. To the extent feasible the project’s financial management arrangements will

follow the country systems and as such the Director of Finance and Administration (Dir.

F&A) of MLRGD will have overall financial management responsibility. The

responsibility of the Dir. F&A is to ensure that throughout implementation there are

adequate financial management systems in place at all levels of project implementation

which can report adequately on the use of project funds. Specifically for the pre-GAPTE

unit, the daily transactional processing and related activities (verifying and authorizing

payments for all contracts and activities) will be assigned to a dedicated Project

Accountant who will work under the direct supervision of the Dir. F&A until such a time

that the full complement of GAPTE staff is recruited. Due to the importance and urgency

of advancing the institutional aspects of improved bus services, retroactive financing will

be allowed in respect of financing the operational costs of pre-GAPTE.

Disbursement arrangements

4. Disbursement arrangements and use of funds: The original project had a single

Designated Account being managed by the Financial Controller, Ministry of Roads and

Highways (MRH), with supervision from the Director of Finance, MRH. Given the

changes under this restructuring, it is proposed that two Designated Accounts (DA)

(denominated in US dollars) will be used as follows: the original DA will be maintained

as DA 1 under the direct responsibility of the Director of Finance, MRH, for MRH; and

DA 2 will be under the Director of Finance, MLGRD, for the CUT and pre-GAPTE

components.

5. Based on this an assessment of financial management systems for MLGRD was

conducted and found to be acceptable for the purposes of managing project funds. The

proceeds of the credit for both DAs will be administered using transaction based

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reporting - Statement of Expenditure (SOE) for reporting on the uses of project funds and

also for requesting for subsequent funds.

6. Proceeds of the credit will be used by MRH and MLGRD (CUT and GAPTE) for

eligible expenditures as defined in the financing agreement and further detailed in the

respective annual work plans and budgets. Disbursement arrangements have been

designed in consultation with the Recipient after taking into consideration the

assessments of financial management and procurement arrangements, the procurement

plan, cash flow needs of the operation and the MLGRD’s prior disbursement experience.

7. Reporting on use of Financing: Supporting documentation will be requested along

with withdrawal applications as specified in the disbursement letter. This will comprise

summary reports (SOE) for payments made by the Recipient from the DA and requests

for reimbursements for eligible expenditure. Copies of original documents or records

shall be requested only for certain categories of expenditures above financial thresholds

specified in the disbursement letter. Additional instructions for disbursements will be

provided in a disbursement letter issued for this project.

Budgeting Arrangements

8. The Ministry of Local Government and Rural Development (MLGRD)/Greater

Accra Passenger Transport Executive (GAPTE), as a government agency follows the

budget preparation guidelines as per the Financial Administration Act (2003), the

Financial Administration Regulation (2004) and also the annual budget guidelines issued

by the Ministry of Finance. Generally, the budgeting arrangements at MLGRD are

satisfactory and derive from the IDA allocations which serve as a basis for determining

the allocations and preparing the Annual Work Plan incorporating the activities to be

undertaken under the various components.

9. Once the budgets are approved copies will be provided to the Dir. F&A to enable

monitoring and adequate budgetary controls over expenditure. Project management will

ensure that all component activities are correctly reflected in the work plans and budget.

The current budgetary control processes used mostly for the government’s discretionary

budget are capable of monitoring commitments and outstanding balances and this helps

to reduce any fiduciary risk. The assessment indicates that budgeting processes are

satisfactory and can be relied upon to support implementation.

Accounting Arrangements

10. The Dir. F&A has responsibility for maintaining the accounting records and

books of the MLGRD. Accounting and financial reporting for the proceeds of the credit

will follow the existing accounting policies and rely on the existing systems including,

internal approval processes, payment vouchers, and authorization limits. Currently, a

combination of manual cash books and general ledger, supplemented by excel

spreadsheets are used for periodic returns and these are considered adequate to support

the GAPTE.

Internal Control and Internal Auditing

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11. Consistent with the decision to adopt some aspect of the use of country systems

for implementation, the project’s internal controls will rely on the government established

accounting and internal control guidelines as documented in the Financial Administration

Act (2003) and the Financial Administration Regulation (2004), and informed by the

Internal Audit Agency Act (2003). In addition the expenditure initiation and related

controls will follow the authorization and approval processes as pertains within the

MLGRD. The MLGRD has a functioning internal audit unit which helps to ensure a

sound control environment for transaction processing. The role of the internal audit will

be regularly assessed during supervision missions by reviewing their reports and

management responsiveness to their findings. This is to ensure that the role is not limited

to transactional reviews (pre-auditing) but adds value to the overall control environment.

Funds Flow Arrangements

12. Funds for implementing pre-GAPTE activities will be disbursed to a segregated

designated account managed and operated by the Dir. F&A, in line with their approved

activities, work plans and budgets under the components. Proceeds of the financing will

follow the standard Bank procedures for Investment Lending, for use by the Recipient for

eligible expenditures as defined in project financing agreements.

13. Disbursement arrangements and use of funds: The proposed arrangement is to use

a single Designated Account for pre-GAPTE (denominated in US dollars) under the

direct responsibility of the Dir. F&A. Based on the assessment of financial management,

the proceeds of the Credit and Grant will be administered using transaction based

disbursement SOE returns for reporting on the uses of project funds and also for

requesting for subsequent funds.

14. Proceeds of the Credit and Grant will be used by the pre-GAPTE for eligible

expenditures as defined in the financing agreement and further detailed in the respective

annual work plans and budgets. Disbursement arrangements have been designed in

consultation with the Recipient after taking into consideration the assessments of

financial management and procurement arrangements, the procurement plan, cash flow

needs of the operation and the MLGRD’s prior disbursement experience. Additional

instructions for disbursements will be provided in a disbursement letter issued for this

project.

15. Reporting on use of Financing: Supporting documentation will be requested

along with withdrawal applications as specified in the disbursement letter. This will

comprise summary reports (SOE) for payments made by the Recipient from the DA and

requests for reimbursements for eligible expenditure. Copies of original documents or

records shall be requested only for certain categories of expenditures above financial

thresholds specified in the disbursement letter.

Financial Reporting Arrangements

16. The MLGRD/GAPTE will be required to prepare and submit separate quarterly

IFRs to account for activities funded and also request for funding under this credit. It is

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expected that the unit will maintain adequate filing and archival system of all relevant

supporting documents for review by the Bank’s FM team during supervision mission and

also for audit purposes. IFRs for the project are expected to be submitted not later than 45

days after the end of each quarter. The financial reports will be designed to provide

relevant and timely information to the project management, implementing agencies, and

various stakeholders monitoring the project’s performance. The formats and content of

the quarterly IFRs will be provided by the Bank’s FM team and agreed during

negotiations.

Auditing

17. The Auditor General (Ghana Audit Services) is solely responsible for the auditing

of all government ministries, agencies and departments and historically has been

undertaking the audit of MLGRD. Audit of the ongoing Urban Transport Project has been

carried out by private audit firms with the approval of the Ghana Audit Service. The

Bank’s FM team would work with the project to engage an auditor subject to the Bank’s

necessary procurement and technical clearance of the terms of reference for the

engagement of the audit firm.

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Annex 5: Procurement Assessment

1. The restructured project does not intend to implement any new contracts besides

the ones originally intended and captured in the approved procurement plan, as at the

last implementation support mission in June 2012. However, for contracts for which

procurement processes are yet to start prior to the restructuring, procurement will be

carried out in accordance with World Bank’s: (i) "Guidelines: Procurement of Goods,

Works and Non-Consulting Services under IBRD Loans and IDA Credits and Grants by

World Bank Borrowers" dated January 2011; (ii) "Guidelines: Selection and

Employment of Consultants under IBRD Loans and IDA Credits and Grants by World

Bank Borrowers” dated January 2011, and the provisions stipulated in the Legal

Agreement; and (iii) “Guidelines on Preventing and Combating Fraud and Corruption in

Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15,

2006, as revised in January 2011..

2. The implementation and associated procurement of the operational aspects of the

Type B and BRT route services and pre-GAPTE activities have now been reassigned to

be implemented by Ministry of Local Government for effective results. Consequently,

the Bank has undertaken a procurement assessment of the Ministry to ensure that the

MLGRD has procurement systems, structures, and capacity to administer procurement,

to support the pre-GAPTE unit in compliance with the Bank’s Procurement and

Consultants’ Guidelines. The approach of the assessment was to quickly (a) evaluate the

capacity of the executing agency and the adequacy of procurement and related systems

in place, to administer procurement; (b) assess the risks (institutional, political,

organizational, procedural, etc.) that may negatively affect the ability of the agency to

carry out procurement; and (c) develop an action plan to address the deficiencies

detected by the capacity analysis and to minimize the risks identified by the risk

analysis, if any.

3. The assessment concludes that MLGRD is in compliance with the Ghana

Procurement Act and has enormous experience in implementing World Bank-financed

projects, with three of such projects currently ongoing. It also has an entity tender

committee and a review board in its permanent organization as final decision making

authorities in procurement issues. In addition, it has adequate internal technical and

administrative controls and anti-corruption procedures to ensure compliance. Finally,

there exists a satisfactory appeals mechanism for bidders.

4. In terms of staffing, MLGRD has a number of staff with knowledge and

experience in procurement, managing three World Bank funded projects. Most of these

staff are very proficient in World Bank procurement and have been implementing Bank-

funded projects over a long period. While two of such projects are managed by stand-

alone Project Implementation Unit, the Local Government Capacity Support Project is

being implemented through mainstream structures, and supported by the Ministry’s

procurement unit. The procurement unit has been strengthened with two procurement

consultants with engineering background and vast experience in World Bank

procurement procedures. They work under the instructions of, and report directly

through the civil servant head of the unit, who also understands Bank procurement.






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5. Given that the major procurement activities under the pre-GAPTE

implementation only consists of consultants selection contracts, of which about 85

percent are for individual consultants, the Bank finds the Ministry’s procurement unit

qualified to manage the procurement aspects of the pre-GAPTE activities in a timely

manner.

6. The overall risk assessment is rated low. The only key risk for procurement is the

possible lack of coordination and communication between the Pre-GAPTE Unit and the

Ministry’s procurement unit which can lead to delays in carrying out procurement

actions. To mitigate this, the Pre-GAPTE shall meet with the Director of Procurement to

discuss all contracts to be implemented under the sub-component after which the

procurement plan will be updated to be initiated by the procurement unit. The

Coordinator for the Pre-GAPTE unit will liaise with the procurement unit from time to

time to monitor progress and or receive regular progress report.

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