TEMPLATE FOR PROJECT CONCEPT NOTE (PCN) - World Bank



Document ofThe World BankReport No: 62561-SLRestructuring PAPERON APROPOSED Project restructuring of TheSIERRA LEONE INFRASTRUCTURE DEVELOPMENT PROJECT(GRANTs H1910-SL, and H4050-SL, And CREDIT 4469-SL)board approval date: December 6, 2005 and June 19, 2008 TO THEREPUBLIC OF SIERRA LEONESeptember 21, 2011Transport SectorCountry Department AFCF1Africa RegionABBREVIATIONS AND ACRONYMSAADT Annual Average Daily TrafficAfDB African Development BankCAS Country Assistance StrategyCMU Coordination and Monitoring UnitEC European CommissionFTLFreetown Terminal LimitedGoSL Government of Sierra LeoneICAO International Civil Aviation OrganizationICB International Competitive BiddingIDP Infrastructure Development ProjectIDA International Development AssociationIERR Internal Economic Rate of ReturnIRMF Independent Road Maintenance FundISR Implementation Status ReportMARPOL International Convention for the Prevention of Marine Pollution from ShipsNBF Not Bank FinancedNCB National Competitive BiddingNCP National Commission for PrivatizationNPV Net Present ValuePADProject Appraisal DocumentPDOProject Development ObjectivesPFM Public Finance ManagementPPF Project Preparation FacilityPRSP Poverty Reduction Strategy PaperSALWACOSierra Leone Water CompanySDRSpecial Drawing RightsSLAA Sierra Leone Airports AuthoritySLPA Sierra Leone Ports AuthoritySLRA Sierra Leone Roads AuthorityTSP Transport Sector ProjectUK United KingdomUSUnited StatesRegional Vice President:Obiageli K. EzekwesiliActing Country Director:Sergiy KulykSector Director:Jamal SaghirSector Manager:Supee TeravaninthornTask Team Leader:Kavita SethiREPUBLIC OF SIERRA LEONESIERRA LEONE —INFRASTRUCTURE DEVELOPMENT projectP078389 Grants H1910-SL, H4050-SL, and Credit 4469-SL P087004Contents TOC \o "1-1" \h \z \u A. Summary PAGEREF _Toc303679334 \h 1B. Project Status PAGEREF _Toc303679335 \h 1Annex 1: Revised Results Framework and Monitoring4ANNEX 2: REALLOCATION OF PROCEEDS……………………………...…. ….10SIERRA LEONE —INFRASTRUCTURE DEVELOPMENT projectP078389 Grants H1910-SL, H4050-SL, and Credit 4469-SL Data Sheet RestructuringStatus: DraftRestructuring Type: Level 2Last modified on date : 09/13/20111. Basic InformationProject ID & NameP078389: SL-IDP Transp (FY06)CountrySierra LeoneTask Team LeaderKavita SethiSector Manager/DirectorSupee TeravaninthornActing Country DirectorSergiy KulykOriginal Board Approval Date12/06/2005Original Closing Date:09/30/2011Current Closing Date09/30/2011Proposed Closing Date March 31, 2013EA CategoryB-Partial AssessmentRevised EA CategoryEA Completion Date09/01/2004Revised EA Completion Date2. Revised Financing Plan (US$m)SourceOriginalRevised BORR5.795.79 IDA55.0055.00 Total60.7960.793. BorrowerOrganizationDepartmentLocation Republic of Sierra LeoneSierra Leone4. Implementing AgencyOrganizationDepartmentLocationOffice of the Vice President Sierra Leone 5. Disbursement Estimates (US$m)Actual amount disbursed as of 9/09/201144.81Fiscal YearAnnualCumulative 20125.049.8120135.255.00 Total 6. Policy Exceptions and Safeguard PoliciesDoes the restructured project require any exceptions to Bank policies?NDoes the restructured project trigger any new safeguard policies? If yes, please select from the checklist below and update ISDS accordingly before submitting the package.N7a. Project Development Objectives/OutcomesOriginal/Current Project Development Objectives/OutcomesThe overarching PDO is: to rehabilitate selected priority roads, port and airport facilities of the Recipient; and to support the regulatory and institutional reform and effective management of the Recipient's road, port and airport sectors. 7b. Revised Project Development Objectives/Outcomes [if applicable] SIERRA LEONE —INFRASTRUCTURE DEVELOPMENT projectP078389 Grants H1910-SL, H4050-SL, and Credit 4469-SL Restructuring PaperA. SummaryThis Restructuring Paper seeks the approval of the Country Director to restructure the Sierra Leone Infrastructure Development Project (SL-IDP) (Original Grant Number H191-SL; Additional Grant Number H405-SL; and Additional Grant Number 4469-SL). The proposed restructuring includes: (i) the reallocation of grant and credit proceeds across categories; (ii) an 18-month extension of the original closing date from September 30, 2011 to March 31, 2013; (iii) the revision and fine-tuning of the results framework, and (iv) cancellation of Project activities. The proposed restructuring will help complete ongoing activities and implement remaining activities, which are critical for the attainment of the project development objectives (PDOs), as per the attached letter from the Government of Sierra Leone (GoSL).B. Project StatusThe SL-IDP was approved on June 12, 2005 with a grant amount of Special Drawing Rights (SDR) 30,400,000 and became effective on May 19, 2006. An additional Grant and an Additional Credit in the amounts of SDR 3.2 million and SDR 3.7 million respectively, were approved on June 19, 2008, and became effective on November 14, 2008, bringing total International Development Association (IDA) financing for the Project to SDR 37.3 million. As of September 9, disbursements have reached about 73 percent of the total proceeds. Meanwhile, commitments stand at 84.6 percent of total project funds, with another about ten percent expected to be committed by December 2011. After an initial slow start, the project has picked up significantly since the mid-term review in April 2009. This is seen in the progress on implementation of the activities under the various components. Project achievements thus far include: (i) signing of the Concession Agreement between the government of Sierra Leone and Bollore Africa Logistics for the container terminal operation on November 25, 2010, and handover of the terminal to the concessionaire, Freetown Terminals Limited (FTL) on March 1, 2011; (ii) completion of the negotiations for the license of the break bulk operations at the port; (iii) completion of the rehabilitation and strengthening of the Lungi Airport runway on April 14, 2011; (iv) successful completion of the rehabilitation of the Makeni-Matotoka and Bo-Kenema Highways and handover of both roads to GoSL by the contractor; and (v) separation of the Road Maintenance Fund from the Sierra Leone Road Authority and establishment of the Independent Road Maintenance Fund under the Ministry of Finance. The main outstanding activity is the improvement of feeder roads in the four districts of Bonthe, Kono, Koinadugu and Kailahun (estimated at US$6.7 million equivalent in the Project Appraisal Document (PAD)). The designs and the bid documents for feeder roads works are currently being finalized under the oversight of the Sierra Leone Roads Authority (SLRA). The remaining main activities which are under implementation are: (i) the installation and commissioning of the Navigational Aids and Communications Equipment for the Airport (US$3.4 million equivalent), and (ii) supply and installation of the navigational aids at the sea port. The procurement processes for the ancillary civil works (estimated at US$2.18 million) and the environment reception facilities (estimated at US$250,000) have also been completed and contract signature is pending finalization of the reallocation; capacity building and training activities are also ongoing. The ratings for Project Implementation Performance and achievement of Development Objectives are satisfactory, as documented in the last archived Implementation Status Reports (ISRs) dated September 13, 2011. The project development objectives continue to be achievable and will be further supported by the proposed re-allocation of project funds.Furthermore, overall safeguards compliance is satisfactory and there are no unresolved legal or safeguard issues. The existing financial management procedures and guidelines for the Project will remain unchanged in substance, based on the continuing adequacy and reliance of the financial management systems for the project (staffing, budgeting, accounting, internal controls, financial reporting and audit arrangements), having met the minimum requirement for Financial Management under OP/BP10.02. There are no outstanding audit reports and the interim unaudited financial reports have met fiduciary compliance. The proposed restructuring will have the same disbursement categories as the original project. Monitoring of expenditures will continue to be done through approval and monitoring of implementation of Annual Work Plans (procedure in place during the original project will continue during the extended period).C. Proposed Changes Results indicators: are summarized in Annex 1: Results Framework and Monitoring. Although the PDO remains unchanged, the results framework is being revised to include mandatory core sector indicators and refine the wording of the monitoring indicators. Cancelled Activities. The proposed changes include a change in the funding for the following activities within Component C: Freetown International Airport Rehabilitation and Airport Management Support: (i) water supply system and (ii) power supply system. The bid price for the civil works at the airport was substantially higher than the engineer’s estimate and the Client chose to re-scope the works included in the contract. The water supply and power supply systems at Lungi International Airport have been supported under government funded projects and are no longer part of the funding under this Project. Indeed, the piped water supply system at Lungi has already been expanded by the Sierra Leone Water Company (SALWACO) with dedicated supply lines for the airport. The paving of the container area at the port has been included in the terminal development activities of the Concessionaire for the Container Terminal and is funded by the Concessionaire, Freetown Terminals Limited. The Concession was part of the institutional reforms supported by the project. FinancingThe current allocation of proceeds is as shown in Annex 2, Table 1 and the proposed changes in the project costs by components and reallocation of proceeds between categories of expenditures are presented in Annex 2, Table 2. Funds from savings on the civil works under the roads (on main roads) and airport components are being reallocated to areas with shortfalls, mainly civil works and consultant services for SLPA, and goods and consultant services for SLAA. There are some savings on the training component as training related to operation of the navigational aids, at both the airport and port, has been incorporated in the supply and installation of these contracts with SLPA and SLAA. The restructured project includes increased allocations for expenditures (local and foreign) to finance: (i) cost overrun in works under Component B-SLPA Reorganization and Freetown Port Infrastructure Development; (ii) cost overrun for the supply, installation, testing and commissioning of the navigational aids and communications equipment under Component C-Freetown International Airport Rehabilitation and Airport Management Support; (iii) cost overruns for consultants’ services for Components B and C mentioned above; and (iv) consultant services and operating costs of the Coordination and Monitoring Unit (CMU) under Component D- Project Coordination. Closing date: This is the first extension of the original closing date of the Project. While most project activities have been completed, others are being implemented or remain to be implemented, as detailed in paragraph 5 of this paper. To allow for completion of the ongoing activities and rehabilitation of the feeder roads, the government has requested an 18 month extension of the project closing date. It is recommended that the project closing date be extended from September 30, 2011, to March 31, 2013.Implementation schedule: The implementation schedule will be revised to reflect the extended project closing date of March 31, 2013.Annex 1: Revised Results Framework and MonitoringSierra Leone Infrastructure Development ProjectTable 1: Revised Results FrameworkRevisions to the Results FrameworkComments/Rationale for ChangePDOCurrent (PAD)ProposedRehabilitate selected priority roads, port and airport facilities; and to support the regulatory and institutional reform and effective management of the road, port and airport sectors.Unchanged.PDO indicatorsCurrent (PAD)Proposed change*Reduction in travel time on project roads;Increase in usage of the project road;Average distance traveled increasesNumber of person-days of employment generated by Project Road Construction and Maintenance;Prioritized programmed maintenance is established.Roads in good and fair condition as a share of total classified roads (%) (core indicator);Share of rural population with access to an all-season road (%) (core indicator); [Supplemental information: Number of rural people with access to an all-season road]Second Generation Road Maintenance Fund is created and functioning (yes/no). The proposed change includes the mandatory, core transport sector indicators. These indicators are also more suitable to capture impact on PDOImproved port performance n handling Port Container;Increase in port break-bulk ships daily handling performance;Mandatory environmental and safety measures as agreed under the International Convention for Prevention of Maritime Pollution are addressed;Significant reduction in SLPA staff;Increase in financial surplus for SLPA after depreciation and financial charges and before tax.Port Container handling capacity (TEUs/day);Port Break-bulk handling capacity (T/day);SLPA Staff cost to annual expenditure ratio (%).Streamlined wording of indicators.Airport complies with ICAO mandated standards.Unchanged.Direct project beneficiaries (number), of which female (%).Mandatory CORE indicator.Intermediate Results indicatorsCurrent (PAD)Proposed change*Component 1: Roads106km of primary road rehabilitation contracted out by mid-term;400 km of rural/feeder road rehabilitation contracted out by midterm;mobilization of contractors 100% complete by mid-term;quality of works satisfactory (from technical audit);Progress satisfactory against program, with acceptable projected completion date.legalities completed by midterm;members of the IRMF recruited by mid-term;First year prioritized maintenance program agreed by mid-term;MSU operating on a totally commercial basis by midterm;Fuel Levy increased and maintained at not less than US$0.10 per liter to support prioritized programmed maintenance by mid-term.Roads rehabilitated Non-Rural (km);Roads rehabilitated Rural (km);Dropped;Dropped;Dropped;Dropped;Dropped;Km of Roads maintained compared to planned maintenance (%);Dropped;Road Fund annual budget (US$ or local currency).Replace with core indicators which are more streamlined;Replace with core indicators which are more streamlined;No longer relevant;No longer relevant;No longer relevant;No longer relevant;No longer relevant;To better capture the performance of Road Agency;No longer relevant;Measuring the annual budget will show if the Road Fund is provided with adequate funding. Component 2: Freetown PortAgreed reorganization Action Plan implemented by mid-term; Legalities completed for restructuring SLPA as a Landlord Port by mid-term;Cargo handling services concessioned and licensed by mid-term;Bidding underway for civil works associated with concessioning, by midterm;All selected Navigation and Environmental equipment procured and installed by mid-term.NAVAIDS installed and functioning (yes/no);Environment and Safety equipment installed and functioning (yes/no);Quay rehabilitated (including bollards, ladders, and fenders) (yes/no);Landlord Port Bill approved by parliament (yes/no);Concessioning agreement signed (yes/no).Streamlined wording of ponent 3: Freetown International AirportAll civil works, Goods and Services contracts awarded by mid-term;mobilization of contractors 100% complete by mid-term;quality of works satisfactory (from technical audit);Progress satisfactory against program, with acceptable projected completion date.Runway rehabilitation satisfactorily completed (yes/no);NAVAIDS installed and functioning (yes/no);Streamlined wording of indicators.Table 2: REVISED PROJECT RESULTS FRAMEWORK AND MONITORINGProject Development Objective (PDO): Rehabilitate selected priority roads, port and airport facilities; and to support the regulatory and institutional reform and effective management of the road, port and airport sectors.PDO Level Results IndicatorsCoreUnit of MeasurementBaselineOriginal ProjectStart(2008)Progress To Date(2011)Cumulative Target ValuesFrequencyData Source/MethodologyResponsibility for Data CollectionComments201120122013 Roads in good and fair condition as a share of total classified roads (core network) 1 FORMCHECKBOX %60%annualIRI survey and road databaseSLRAShare of rural population with access to an all-season road (Supplemental information:Number of rural people with access to an all-season road). FORMCHECKBOX %Number 28%(987,631)annualsurveySLRASecond Generation Road Maintenance Fund is created and functioning. FORMCHECKBOX (yes or no)noyes (IRMFCreated) yes--CMUPort Container handling capacity. 1 FORMCHECKBOX TEU/day8.2TEU/hr7TEU/hrannualreportsSLPAPort Break-bulk handling capacity.1 FORMCHECKBOX T/day850T/day895T/dayannualreportsSLPASLPA Staff cost to annual expenditure ratio.1 FORMCHECKBOX % annualreportsSLPAAirport complies with ICAO mandatory standards. FORMCHECKBOX (yes or no)noyesyes--SLAABeneficiariesDirect Project Beneficiaries, Of which female. 1 FORMCHECKBOX Number%0End of ProjectstudyCMUIntermediate Results and IndicatorsIntermediate Results IndicatorsCoreUnit of MeasurementBaselineOriginal ProjectStart(2008)Progress To Date(2011)Target ValuesFrequencyData Source/MethodologyResponsibility for Data CollectionComments201120122013RoadsRoads Rehabilitated Non-Rural. FORMCHECKBOX (km)0106106106106AnnualreportsSLRARoads Rehabilitated Rural. FORMCHECKBOX (km)000200400AnnualreportsSLRAKm of Roads maintained compared to planned maintenance. 1 FORMCHECKBOX %-AnnualreportsSLRA/IRMFRoad Fund Annual Budget. FORMCHECKBOX US$-AnnualreportsIRMFFreetown PortNAVAIDS installed and functioning. FORMCHECKBOX (yes or no)noyesnoyesEnd of projectreportsSLPAEnvironment and Safety equipment installed and functioning. FORMCHECKBOX (yes or no)noUnder implementationnoyesEnd of projectreportsSLPAQuay rehabilitated (including bollards, ladders, and fenders). FORMCHECKBOX (yes or no)nononoyesEnd of projectreportsSLPALandlord Port Bill approved by parliament. FORMCHECKBOX (yes or no)noyesnoyes--SLPAConcession agreement signed FORMCHECKBOX (yes or no)noyes--yes--SLPAFreetown International AirportRunway rehabilitation satisfactorily completed. FORMCHECKBOX (yes or no)noyesyesyesEnd of projectreportsSLAAWorks progressing with 35% completed; Intended completion date revised for 31/03/2011.NAVAIDS installed and functioning. FORMCHECKBOX (yes or no)noUnder implementationnoyesEnd of projectreportsSLAAProcurement process almost completed.Note 1: Revised or core indicators: Values to be obtained / updated post restructuring.ANNEX 2:Reallocation of ProceedsSierra Leone Infrastructure Development ProjectTable 1: Current Allocation of Proceeds CategoryAmount of the Original Grant (H1910-SL) Allocated (Expressed in SDR Equivalent)Amount of the Additional Grant (H4050-SL) Allocated (Expressed in SDR Equivalent)Amount of the Additional Credit (44690-SL) Allocated (Expressed in SDR Equivalent)% of Expenditures to be Financed1Works(a) SLRA(b) SLPA(c) SLAA13,996,000600,0008,650,0003,200,000001,100,0002,500,0000100%80%90%2Goods(a) SLRA(b) SLPA(c) SLAA(d) CMU0430,0001,500,00060,00000000000100%80%90%3Consultants’ services, including audits(a) SLRA(b) SLPA(c) SLAA(d) CMU2,004,000650,000515,000859,00000000100,00000100%4Training650,00000100%5Operating Costs (CMU)270,00000100%6Refunding of Project Preparation Advance216,00000Amount due pursuant to Section 2.02 (c) of this Agreement7 Unallocated000Sub-totals30,400,0003,200,0003,700,000TOTAL: 37,300,000 ========Table 2: Proposed Re-Allocation of ProceedsCategoryCategory DescriptionOriginal Grant (H1910-SL) After Reallocation (XDR)Additional Grant (H4050-SL) After Reallocation (XDR)Additional Credit (44690-SL) After Reallocation (XDR)Revised Amount After Reallocation (XDR)% of Expenditures to be Financed1-ACivil Work- SLRA 12,796,000 2,644,512 1,100,000 16,540,512 100%1-BCivil Work- SLPA 621,000 555,488 2,500,000 3,676,48880%1-CCivil Work- SLAA 8,016,000 - - 8,016,000 90%2-AGoods - SLRA - - - - 100%2-BGoods - SLPA 334,000 - - 334,000 80%2-CGoods- SLAA 2,066,000 - - 2,066,000 90%2-DGoods- CMU 162,000 - - 162,000 3-AConsultancy-SLRA 1,995,000 - - 1,995,100 100%3-BConsultancy-SLPA 1,835,000 - 100,000 1,935,000 100%3-CConsultancy -SLAA 654,000 - - 654,000 100%3-DConsultancy- CMU 1,006,000 - - 1,006,000 100%4Training 405,000 - - 405,000 100%5Operating Cost CMU 294,000 - - 294,000 100%6PPF 216,000 - - 216,000 7Unallocated - - - - Totals? 30,400,000 3,200,000 3,700,000 37,300,000 ................
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