SUDAN MULTI-DONOR TRUST FUND – NATIONAL PROJECT PROPOSAL...

WORKING DRAFT 4/14/2009 1

SUDAN

MULTI-DONOR TRUST FUND – NATIONAL

PROJECT PROPOSAL DOCUMENT

FOR A

PROPOSED GRANT

IN THE AMOUNT OF US$ 15.339 MILLION

TO BLUE NILE STATE, SUDAN

FOR THE

BLUE NILE STATE START-UP EMERGENCY PROJECT

October 7, 2007


ABBREVIATIONS AND ACRONYMS

CFCI Child Friendly Community Initiative ICRD Integrated Community Recovery and Development CIFA Country Integrated Fiduciary Assessment CPA Comprehensive Peace Accord DHSDP Decentralized Health System Development Project (MDTF) DJAM Darfur Joint Assessment Mission ERW Explosive Remnants of War FMFA Financial Management Framework Agreement FRESH Focused Resource School Health GONU Sudan Government of National Unity ICB International Competitive Bidding IDP Internally Displaced Person IDPs Internally Displaced People ITN Insecticide-treated Net JAM Joint Assessment Mission JAM UN-World Bank Joint Assessment Mission JIU Joint Implementation Unit LLINs Long-Lasting Insecticidal (Bed-) Nets MDTF Multi Donor Trust Fund MOFE Ministry of Finance and Economy (State) MOFNE Ministry of Finance and National Economy (Federal) MOU Memorandum of Understanding MPPPU Ministry of Physical Planning and Public Utilities NCB National Competitive Bidding NCP National Congress Party NGO Non Governmental Organization NMAC National Mine Action Center OP/BP Operational Policy / (World) Bank Policy PER Public Expenditures Review PFM Public Financial Management PCU Project Coordination Unit PSC Project Steering Committee PTC Parent Teacher Committee QCBS Quality- and Cost-Based Selection SA Special Account SOE Statement of Expenditures SPLM Sudan Peoples’ Liberation Movement TA Technical Assistance UN United Nations UNICEF United Nations Children’s Emergency Fund UNIDO United Nations Industrial Development Organization UNMIS United Nations Mission to Sudan UXO Unexploded Ordnances VHC Village Health Committee WASH Water, Sanitation and Hygiene WES Water & Environmental Sanitation


Sudan Multi Donor Trust Fund National

Start-Up/Emergency Project for Blue Nile State

SUMMARY Applicant: Federal Ministry of Finance and National Economy (MoFNE), Sudan Government

of National Unity Brief Description:

The project is the first1 (Start-Up/Emergency) phase of the recovery and development program for Blue Nile State. It intends to contribute to peace and stability through, both, i) the delivery of much needed services to a segment of the population that is largely underserved and ii) supporting decentralization by starting a process of defining the capacity building needs of local authorities, which is critical for the successful implementation of the CPA. It will address a number of emergency needs in basic services and start the preparations for capacity building programs in the second phase (yr2-5).

Project Development Objective:

To initiate the recovery of basic infrastructure and social services provided to the poor people in the conflict-affected area of the Blue Nile State and to lay the foundations for a program addressing capacity building needs in key state ministries in order to ensure future improvements in service delivery especially at the local (decentralized) level. The project would achieve this objective by providing safe drinking water to 71,000 people, improve the safe mobility along selected key rural roads, enhance education facilities for around 100,000 children, improve agricultural productivity in 10 villages, improve malaria prevention for 50,000 rural households and carry out institutional assessments for four Ministries.

Performance Indicators (mid 2008):

Basic services: 71,000 people with access to an improved water source Increased user satisfaction with improved water sources; including increased

usage and a decrease in time taken for water collection. (Source: Survey of target population)

Improvement of the secondary road network through construction of eight bridges and ten box culverts, and clearing of 60 km and grading of 20 km of roads.

Accelerated demining, with 14 high priority suspected or mined areas and roads cleared or verified in about 33 communities, affecting a population of more than 54,000. Reduction in accidents and mine related casualties. (baseline data available)

Basic education tools & equipment provided: o 100,000 primary school aged children, including 9,000 nomadic children

having access to both safe drinking water and sanitation facilities.

1 It should be noted that the next phase will be a longer-term (Recovery & Development) project. Depending on the outcome of the institutional assessments done in this start-up phase as well as the experiences during the implementation, of one or more comprehensive follow-up programs can be considered, either sectoral (such as Rural Roads, Water, etc.) or more cross-cutting (Capacity Building).


o 30 schools introduced to FRESH school health program. o Parent-teacher associations, communities and school administrations in

Geisan and El Kurmuk localities are made aware of hygiene, sanitation and environmental hazards.

o 140,000 primary school aged children provided with student kits and school recreation facilities.

o 1,300 teachers receiving training in hygiene and sanitation. 80% of the targeted population show correct usage of the provided bed nets.

(Source: survey of target population) Of the targeted population (if measurable) the malarial incidence shows a

significant decrease. Rural Household Livelihoods Support (Agriculture):

Within the agricultural season covered within the project, there is an improvement in the agricultural productivity in the 10 villages targeted (if measurable/feasible)

Targeted communities show correct and significant usage of the tools provided. Governance

The institutional capacity of 4 State ministries assessed and programs formulated to improve management and implementation capacity for 4 state ministries: Finance & Economy, Local Government, Education, Public Planning and Public Utilities (responsible for water, rural roads and offices/housing).

Visible and more effective local administrations through the equipping of local authorities with minimum living and working facilities for civil servants: simple housing, offices, (computer) equipment, transport, electricity (solar panels), water supply and sanitation. Numbers envisaged are 20 offices, 10 living quarters, and requisite office furniture and equipment.

Four capacity building programs are developed and agreed upon.

Sector: Multi-Sectoral Location: Blue Nile State, Sudan Total Project Costs and Financing

Total : $ 15.339 million MDTF-N : $ 7.324 million GONU : $ 8.016 million

Implementing Agencies

State Ministry of Finance & Economy, Blue Nile State, UNICEF and UNIDO, relevant line ministries.

Implementing Period:

Components of this Start-up Phase have been planned to end on 30 April 2009. To allow certain activities to finalize and allow final payments, the closing date is fixed at 30 September 2009. The three-year second phase is expected to start on 1 October 2008.

Contact for further information

1. Mr. Babiker Mohamed Ahmed, State Minister of Finance and Economy, Blue Nile State


TABLE OF CONTENTS Start-Up/Emergency Project for Blue Nile State

1. ABBREVIATIONS AND ACRONYMS........................................................................... 2 2. SUMMARY ....................................................................................................................... 3 3. STRATEGIC CONTEXT AND RATIONALE................................................................. 6

a. Key development issues .....................................................................................................6 b. Rationale for MDTF involvement ......................................................................................7

4. PROJECT DESCRIPTION ................................................................................................ 7 a. Project Development Objectives and Key Performance Indicators ...................................7 b. Project Components............................................................................................................8 c. Project Costs by Component............................................................................................16

5. IMPLEMENTATION ...................................................................................................... 16 a. Institutional and implementation arrangements ...............................................................16 b. Procurement arrangements ...............................................................................................19 c. Financial management arrangements ...............................................................................20 d. Monitoring and reporting..................................................................................................21 e. Sustainability and critical risks .........................................................................................22

6. SOCIAL ISSUES ............................................................................................................. 24 7. ENVIRONMENTAL ISSUES ......................................................................................... 24

ANNEXES 1. Country and Sector Background 2. Major Related Projects Financed by the MDTF-N 3. Results Framework and Monitoring 4. Detailed Project Description 5. Project Costs 6. Implementation Arrangements 7. Financial Management and Disbursement Arrangements 8. Procurement 9. Economic and Financial Analysis 10. Safeguards Policy Issues 11. Letters of Endorsement by MoFNE of the GONU


1. STRATEGIC CONTEXT AND RATIONALE a. Key development issues Almost two years after the signing of the historic Comprehensive Peace Agreement (CPA), Sudan is still slowly transitioning from managing conflict to pursuing pro-poor development, which is characterized by high needs, limited and uneven capacity, and rapidly increasing oil revenues. A controversial Darfur Peace Agreement, with intensive efforts on security and political fronts, is taxing the efforts of the international community to engage with the Government of National Unity (GoNU). In the last year, much of the donor community’s attention was oriented towards the Darfur Joint Assessment Mission (DJAM), and the UN’s efforts elsewhere have been crowded out by the humanitarian imperative in Darfur. The 2005 CPA makes a provision for 70 percent of National Development Reconstruction Funds to be targeted to the least developed states in North Sudan, reflecting the recovery and development needs of these areas as well as their pivotal role in sustained peace and security. Within this group of least developed states, the particular status of the Three Areas – Abyei, Blue Nile, and South Kordofan – was recognized in the CPA through specific protocols. These protocols establish a special status under the Presidency for Abyei, and the Blue Nile and South Kordofan states with their own constitution and legislative bodies. The first Sudan Consortium, held in Paris on March 9-10, 2006, noted that since the signing of the CPA, the three transitional areas of Abyei, Blue Nile and South Kordofan had not received the expected resources, which can aggravate the existing political instability in the region. The quick formulation and start-up of a recovery project – including quick impact interventions – is therefore expected and desirable. This will require particular attention from, and coordination and interaction between, the national authorities, the international community (donors), the MDTF-N, the UN, and NGOs. Implementation of the CPA in all Three Areas is behind schedule, but in some areas recovery is moving rapidly. Internally Displaced People (IDPs) are returning, and humanitarian and development agencies are scaling up activities. Opportunities for households to invest more in agriculture have increased; there is a significant increase in food and cash income derived mainly from the benefits of increased stability and movement. However, there remain significant disparities between the Three Areas and the national average, and significant internal disparities between the more and less war-affected areas. The key development issues being addressed by this project and the planned follow-on Development Phase project can be divided into three categories. The political aspect will provide assistance to the implementation of the CPA in terms of encouraging fiscal transfers to the Three Areas. The socio-economic aspect will encompass the greater part of the project, and includes interventions addressing the access to basic services (water, education), infrastructure, and some support to the economic development of the population. Finally, the institutional component will provide support to and capacity building for government institutions, civil society, and other key actors. It will also assist with the development of a comprehensive data collection system for development planning.


b. Rationale for MDTF involvement The MDTF-N will target its support towards a range of sectors in Blue Nile that are consistent with its comparative advantage relative to other development agencies (e.g. UN agencies, EC, NGOs, and bilateral donors) that have a firm presence on the ground in implementing projects. To this end, MDTF funds will be used as much as possible to bolster projects that the state ministries implement together with these agencies. As a number of other agencies and donors are currently active in these sectors and feature specialized expertise, the MDTF will play a complementary role or provide funding for expansion of activities. In those priority fields where existing activities are limited or nonexistent, the MDTF can take a more active role in designing and implementing projects. For all activities, project design will take place on the basis of state government priorities and the work plans that the respective state authorities have developed together with the UN in a consultative manner. 2. PROJECT DESCRIPTION a. Project Development Objectives and Key Performance Indicators The PDO is to initiate the recovery of basic infrastructure and social services provided to the poor people in the conflict-affected area of the Blue Nile State and to lay the foundations for a program addressing capacity building needs in key state ministries in order to ensure future improvements in service delivery especially at the local (decentralized) level. The project would achieve this objective by providing safe drinking water to 71,000 people, improve the safe mobility along selected key rural roads, enhance education facilities for around 100,000 children, improve agricultural productivity in 10 villages, improve malaria prevention for 50,000 rural households and carry out capacity assessments in four Ministries. It should be noted that this project is a start-up project. Depending on the outcome of the institutional assessments done in this start-up phase as well as the experiences during the implementation of the different components with the various stakeholders, of one or more comprehensive follow-up programs can be considered, either sectoral (such as Rural Roads, Water, etc.) or more cross-cutting (Capacity Building). Progress towards the achievement of the above-mentioned objectives would be measured and monitored based on the following key performance indicators: Basic services:

71,000 people with access to an improved water source Increased user satisfaction with improved water sources; including increased usage and a

decrease in time taken for water collection. (Source: Survey of target population) Improvement of the secondary road network through construction of eight bridges and ten

box culverts, and clearing of 60 km and grading of 20 km of roads. Accelerated demining, with 14 high priority suspected or mined areas and roads cleared or

verified in about 33 communities, affecting a population of more than 54,000. Reduction in accidents and mine related casualties. (baseline data available)

Basic education tools & equipment provided: o 100,000 primary school aged children, including 9,000 nomadic children having access to

both safe drinking water and sanitation facilities. o 30 schools introduced to FRESH school health program. o Parent-teacher associations, communities and school administrations in Geisan and El

Kurmuk localities are made aware of hygiene, sanitation and environmental hazards.


o 140,000 primary school aged children provided with student kits and school recreation facilities.

o 1,300 teachers receiving training in hygiene and sanitation. 80% of the targeted population show correct usage of the provided bed nets. ((if

measurable/feasible) Of the targeted population (if measurable) the malarial incidence shows a significant

decrease.

Rural Household Livelihoods Support (Agriculture): Within the agricultural season covered within the project, there is an improvement in the

agricultural productivity in the 10 villages targeted (if measurable/feasible) Targeted communities show correct and significant usage of the tools provided.

Governance

The institutional capacity of 4 State ministries assessed and programs formulated to improve management and implementation capacity for 4 state ministries: Finance & Economy, Local Government, Education, Public Planning and Public Utilities (responsible for water, rural roads and offices/housing).

Visible and more effective local administrations through the equipping of local authorities with minimum living and working facilities for civil servants: simple housing, offices, (computer) equipment, transport, electricity (solar panels), water supply and sanitation. Numbers envisaged are 20 offices, 10 living quarters, and requisite office furniture and equipment.

Four capacity building programs are developed and agreed upon. b. Project Components2 The proposed project will have seven (7) components that deal with development activities, each implemented in parallel. Besides this, a Project Coordination Unit (PCU) will be established (component 8). The latter will have mainly a coordination responsibility, including the compilation of progress reports (for all components), but also assist, if requested, the MPPPU in the implementation of their (sub-)components. Component 1: Water Supply US$2.775 million This component will support the construction and rehabilitation of improved water sources throughout Blue Nile State, with the objective of increasing access to potable water on a reasonable per capita per day rate (20 liters) as well as increasing awareness on hygiene and environmental issues for 71,000 IDPs, returnees and host/receiving community members. Communities, including women and women’s groups, will be consulted at the planning stage of all activities. At the village level, Village Health Committees, consisting of five men women each, will be established to manage the water systems. Women’s and youth groups will also be trained as part of the hygiene promotion subcomponent. The implementing agency, UNICEF, which has been working in Blue Nile for nearly 15 years, has undertaken a survey to determine the priority zones and communities for these interventions. The UNICEF Water and Environmental Sanitation Program (WES), launched in 1992, operates within the State Water Corporation, which falls under the State Ministry of Physical Planning and Public Utilities (MPPPU). The combined development and humanitarian WES budget in the UN Work Plan 2007 for Blue Nile State is US$2,498,047. The activities funded by the MDTF would cover the total cost of the WES response in Blue Nile in addition to support for the capacity 2 More detailed information on the implementation of these components is found in annex 6.


building, furthering what UNICEF would be able to achieve in this critical area in Sudan. The component will consist of the following:

Water Supply Cost (USD x 1000) Rehabilitation of 50 hand pumps 25 Rehabilitation of 2 water yards 70 Improvement of 5 hafirs/dams 175 Drilling/installation of 54 new hand pumps 297 Drilling/installation of 5 new water yards 375 Establishment of 1 hafir 150 Procurement spare parts of drilling rig and trucks 25 Procurement of one new drilling rig 550 Procurement of two trucks 200 Geophysical study, training, Supervision and monitoring, technical assistance 404

Cross-sectoral / Indirect costs 504 Total 2,775

Justification: Access to safe drinking water is severely limited in Blue Nile, with current levels of only 40 percent. Most of Blue Nile was seriously affected by the North-South war, with infrastructure and basic services, including water points, in poor condition. The increasing number of returnees will place further strains on the limited water supply points, and will aggravate the acute shortage of drinking water in productive areas. Access to water for human and productive uses is a key point of contention between nomads and sedentary farmers, and provision of additional or improved water sources can help to reduce tensions between these groups. Women and girls bear the primary responsibility for gathering water for the family. Increased accessibility to water not only reduces the time spent traveling to and from water sources, but also increases their security and safety – as some water sources are far from their homes and protective environments. The time saved also often means that girls are allowed to go to school. Finally, there is a clear need for rehabilitation of non-functioning water points, which currently stand at 40 percent for hand pumps, 28 percent for water yards, 20 percent for hafirs, and 50 for sloe sand filters. The weak implementing capacity of the state with regards to maintenance and management of water supply must be improved in order to bring sustainable improvements to water points. Component 2: Rural Roads Maintenance & Spot improvements: US$3.725 million This component will support the construction of eight small one-lane bridges and ten box culverts, as well as clearing of 60 km and grading of 20 km of roads. Given the urgency of this intervention, private (local) contractors will be engaged under supervision of a consultant. This consultant will also prepare the necessary detailed designs, locations and budgets for the works to be implemented at the start of the project. Heavy equipment (graders, bulldozers, etc.) will also be leased from major national hardware companies that will handle the maintenance and running of these machines. A consultant will assess the added value of existing heavy equipment in need of repair before engaging in their rehabilitation. Capacity building will be integrated into this intervention as staff from the Blue Nile State Ministry of Physical Planning and Public Utilities (MPPPU) will participate in all phases of the project. Furthermore purchase of some equipment is also included in this component: two trucks, six vehicles (4x4), one tanker, one excavator, and one grader. In addition, the MPPPU will also


rehabilitate two trucks, one bulldozer (D8), one grader, and one tanker. The purchase and rehabilitation of this equipment is not meant to be used in the construction activities under this component (bridges, culverts, clearance/grading), but to re-establish in the medium term minimum capacity for emergency situations (in terms of equipment) and for monitoring ongoing works, routine activities, etc. All these purchases will be procured like other goods and equipment on the government side by the PCU together with the respective line ministry.

Rural Roads Maintenance & Spot improvements Cost (USD x1000) Clearing & grading of roads 700 Construction of bridges 1,200 Construction of culverts 225 Equipment Rehabilitation New Purchase

420

1,000 Tools and accessories (Computers and survey set) 60 Technical assistance 30 Design and Supervision (Consulting firm) 90

Total 3,725 Justification: Blue Nile State suffers severely from lack of secondary roads. The state lacks both proper links with other states as well as linkages between major towns in its nine localities. Because of its climatic nature and topographical features, vast regions of the state are inaccessible during the rainy season. Hence a large number of culverts, bridges and improved all-weather roads are needed. Recently, oil development companies have started construction of limited roads – but these are confined to oil development fields. The road department of the MPPPU, which is responsible for design and construction of roads and bridges within the state, suffers from an acute shortage of equipment and trained staff (even for the core tasks of the ministry). More than 60 percent of the limited equipment that it owns is not in working order. Component 3: Basic Education: US$2.780 million This component will be implemented by UNICEF, which together with NGO partners has been working with the Blue Nile State Government and SPLA in education, teacher training, rehabilitation of girls schools, and alternative education programs, including an accelerated learning program that has been introduced to accommodate and encompass education activities for children associated with fighting forces who were demobilized. The project will fund student and teacher kits, classroom equipment for primary schools. The MoE and UNICEF will provide a more detailed project document, including the targeted communities and locations, before the start of the project. The component will aim to make education more accessible to children through the following interventions:

Basic Education Cost (USD x 1000) 30 hand pumps in 30 schools 165 30 latrines in 30 schools 30 Supplies of hygiene facilities and soap to 30 schools in three localities 9

Establishment of FRESH in 30 schools 90 Capacity building of 1,300 teachers in 45 workshops and training sessions 225

Tables & benches (with capacity for 4 students each) for 48,000 students 949


School kits for 140,000 students (bags with notes, pencils, pens, erasers, sharpeners) 272

350 Classroom bags (chalk, correction pens, rulers, teachers’ notebooks) 280

3,500 cabinets for 1,255 schools 155 Distribution and supervision 100 Cross-sectoral and indirect support 505

Total 2,780 Justification: Both Geisan and Kurmuk localities in Blue Nile State were SPLA strongholds during the war and are in dire need of education facilities. Kurmuk, particularly, was almost destroyed during the war. In Geisan, schools ceased functioning in 1997 with the escalation of hostilities, and classes began to resume only in 2003. In other localities, schools are yet to open. Due to the long breakdown in the education system in the area, the schools that opened in 2003 had to enroll children aged 7-15 years in grade one. In Kurmuk, of the three brick schools built by Relief Organization of Fasugli (ROOF), a local NGO, only one is not in need of rehabilitation. The other schools in the area – some 23 straw and bamboo structures – were built and are run by the community. There are no teaching materials and poor facilities for children. Education infrastructure and administration is weak in these areas, so student numbers and figures for school-aged children are unreliable. Component 4: Demining: US$1.599 million This component will be implemented by the National Mine Action Center (NMAC) as part of its urgently-needed work on demining suspected roads and other high priority suspected areas in Blue Nile State. Where possible, registered and accredited local mine action NGOs will undertake clearance operations for mines, Unexploded Ordnances (UXO) and Explosive Remnants of War (ERW) in high priority suspected mined areas. The clearance operations will include detailed technical surveys, location, and destruction of mines, UXO and ERW; certification; and handover to the local communities. All mine/ERW clearance operations will be undertaken in accordance with International Mine Action Standards (IMAS) by registered and accredited mine action organizations. Areas to be cleared are as follows: • Kurmuk Locality roads:

Elkili-Mias- Karan Karan Bulang Elkili- Halima- Kashkiro- Geissan Elkurkuk to Anigro – Blatoma – Elbong Yaboose – Maban (Elbong) Elkurkuk – Blatoma – Elkili Kurmuk Gate – Elshimi (North Kurmuk) Kurmuk Gate – Garoat (South Kurmuk)

• Geissan Locality: Ed Damazin – Bakuri – Geissan road Geissan town Geissan Mugran Tamat Bakuri – Marmaz – Kashankiro

• South Roseires roads: Roseires - Wad Elmahi – Um Darfa – Bambodi Mienza- Kanqwa Mienza – Elmahal Elhidoudeyya


Related activities to be undertaken along with mine and UXO clearance include: • Physical rehabilitation and social integration of mine and ERW victims • Provision of Mine Risk Education to the at-risk population in about communities where

suspected mined areas are located.

Demining Cost (USD x 1000) UXO clearance program 257 Physical rehabilitation and social integration of mine ERW victims

157

Mine risk education 313 BN mine clearance team 872

Total 1,599 Justification: Sudan is one of the most heavily landmine/Explosives Remnants of War-affected countries in the world. Current assessments indicate that as of December 2006, 1,490 dangerous areas have been identified in Sudan out of which 523 of have been cleared, with more than 950 dangerous areas still remaining to be cleared. The landmine/ERW problem is especially concentrated around garrison towns and along the North-South border in the Three Areas. Landmines and ERW contamination threaten daily lives of civilians in the affected communities; since 2002, mines and UXO have killed or maimed over 2,300 people in Sudan, with a disproportionate number of victims in the Three Areas, including Blue Nile State. While during hostilities, members of the military were most likely to be victims of mines and other UXOs, the return to peace means that victims will more likely be those pursuing livelihoods such as collecting water and firewood, farming, or tending livestock. Furthermore, as many key travel routes were mined, travel remains dangerous and trade between towns is thus impeded. In addition, the landmine/ERW contamination impedes the safe return of IDPs and refugees to their hometowns, and as a result, constrains reconstruction and development efforts in mine/ERW and war-affected areas. The return of refugees and internally displaced people (IDPs) to their pre-war homes is a priority established under the Comprehensive Peace Agreement signed in January 2005. While other concerns such as education, poor infrastructure, uncertainty and the lack of livelihood opportunities hinder returns, landmines are also considered in the decision-making process if and when a family should leave their current domicile and return home. Based on interviews with communities in Blue Nile, it is estimated that 61,431 refugees and IDPs are planning to return to 31 of the 33 mine-impacted communities; more than 80 percent of these potential returnees are from Baw and Kurmuk localities. The population in the mine-impacted communities totals 54,629, or an average of 1,655 per impacted community. Component 5: Rural Households Livelihoods Support (Agriculture): US$0.380 million Since 2004, UNIDO has been assisting villages through its Community Livelihoods and Rural Industry Support (CLARIS) program in South Kordofan by providing appropriate training and intermediate technology for soil preparation and weeding. In these villages, agricultural productivity has doubled. In addition, the food quality has improved and the role of women has been strengthened through the use of food processing and other machineries with potential of income generation. As a result of the successful implementation of the project “Community Livelihoods and Rural Industry Support (CLARIS) Programme – Phase I (TF/SUD/03/001) in South Kordofan, UNIDO has been asked to extend its CLARIS programme also to Blue Nile State.


The Project will be implemented using the existing UNIDO’ CLARIS - Phase I resources and staff in operation as a PCU in Dilling (South Kordofan) since 2004. However, an additional sub-office in Damazine, Blue Nile State, should be put in place. The sub-off infrastructure will make use of support staff already available and will be used to carry out the selection and organization of target groups training as required, existing blacksmiths for the production of hand tools, and its production facility utilized for the production of the Nuba hoes and ox carts. In Blue Nile State, this new phase of the CLARIS program will benefit a minimum of 2,000 households (including returnees and IDPs) for a total estimated population of 20,000 with the distribution of kits of locally-produced agricultural hand tools. These tools are produced by 20 blacksmiths trained by the project and selected from within the targeted communities. In addition, 200 farmers will benefit from distribution of animal traction tools as well as training on use and maintenance. The beneficiaries are poor and marginalized rural communities in ten villages in Blue Nile State. In line with UNIDO’s approach, adequate representation of women will be ensured through their appointment in relevant positions in village committees and the support to the formation of women’s groups for their active participation/contribution. This six-month emergency phase will serve as the start-up of the more comprehensive Phase II UNIDO CLARIS program in Blue Nile. Under this more extensive program, other villages will be further involved in the project. In particular, women’s groups in the additional villages will be further provided with technology, equipment and management training for agro-processing productive activities and other income-generating activities.

Rural Households Livelihoods Support (Agriculture) Cost (USD x 1000) Supply of tools, training/extension 215 Set-up of sub-offices in Ed Damazin, staff and support costs 165

Total 380 Justification: The supply of agricultural hand tools will allow the targeted populations to re-engage in agricultural production to assure their immediate livelihood needs. The distribution of appropriate technology (the Nuba hoe) will allow surplus production beyond subsistence needs and will contribute towards restoring a sense of responsibility and pride by providing the population with perspectives and choices. Component 6: Capacity Building for State & Local Government: US$ 2.310 This component will support the Blue Nile State government in developing in the medium term capacity needed to plan, develop, and implement programs and projects, as well as capacity in financial management and procurement. a. Institutional Assessment and formulation of follow-up programs. For four state ministries –

Finance & Economy, Local Government, Education, Physical Planning and Public Utilities (responsible for water, rural roads and offices/housing) – the project will fund technical assistance and diagnostic studies to assess the capacity of the respective ministries to plan and implement roles and responsibilities in the framework of their mandate at state and lower levels. These diagnostic assessments will allow the development of one or more comprehensive follow-up programs, either sectoral (such as Rural Roads, Water, etc.) or more cross-cutting (Capacity Building). Consultants will be contracted to formulate these follow-up programs. Although per OP/BP 8.00, this project can be processed under simplified procedures regarding the safeguards policies, a number of actions are envisaged to develop specific safeguard policies and procedures in order to handle social and environmental issues prudently. Local consultants familiar with Bank policies (or provided training therein) will be


recruited to address these aspects, and Bank supervision will focus on ensuring safeguards compliance for all components. The implementation of these programs will be taken up in the next phase (2008/2009).

b. Construction, equipment and vehicles. Construction of a number of basic office facilities and housing for authorities at the locality level is envisaged. The aim is to make local authorities more visible and to provide them with basic physical means to function. This component will support provision of 20 furnished offices in six towns (localities). Ten houses for medium government officials or teachers in six localities will be rehabilitated. Given the urgency of this intervention, private contractors will be engaged under supervision of a consultant. This consultant will also prepare the necessary detailed designs and budgets for the works to be implemented. Furthermore, supporting equipment and vehicles will also be procured to facilitate the work of the authorities at the locality level. This includes: computers, stationery, photocopiers and 18 cars (Hilux 4x4). An additional two cars will be purchased to support the MoFE in its work.

Capacity Building for State & Local Government Cost (USD x 1000) Institutional Assessment and formulation of follow-up programs

Consultants

600 Construction/equipment & vehicles

Works 20 offices in different localities Rehabilitation of 10 houses

Consulting services (TA, Design and Supervision) Goods

Office furniture Office equipment 20 cars (Hilux DC 4x4)

500 180 60

100 120 750

1,710 Total 2,310

Justification: Just emerging from a post conflict situation, the state government and local authorities face low capacities for planning, implementation, M&E and fiduciary functions. Until that capacity is built up, for an interim period of one to two years, there is a need to recruit an accounting firm to provide project management, fiduciary assurance and planning support. This firm will take the lead for those components not implemented by a UN agency (which would undertake these fiduciary functions). The state government does not currently have the capacity to carry out the day-to-day procurement activities or develop the international commercially-compliant procurement procedures necessary to ensure transparency and accountability in the procurement process. Recruitment of this firm is critical given the pipeline of MDTF-supported programs. Component 7: Anti-malaria Bednets: US$ 0.400 million This component was not included in the MDTF Three Areas strategy; however, given its high impact and quick start-up, it has been added to the project. The component will support the marketing and distribution of 65,000 long-lasting insecticidal nets (LLINs). This subcomponent is part of a larger LLIN program within the ongoing MDTF Decentralized Health System Development Project (DHSDP) also covering South Kordofan, Kassala, and Red Sea State. The DHSDP will distribute another 30,000 LLINs (USD 200,000). The total of 95,000 bednets will be distributed to around 50,000 households, which covers around 80 percent of rural households in


Blue Nile. Insecticide-treated nets (ITNs) are a very effective malaria control intervention, shown to significantly reduce child mortality. Long-lasting insecticidal nets (LLINs) have been developed to retain their effectiveness for an estimated 3-4 years. Insecticide-treated nets (ITNs) lose their effectiveness after several washings and so need to be re-treated with insecticide approximately every six months, which has been the major bottleneck to sustaining the impact of ITNs. Recently, LLINs that incorporate insecticide in their fibers have been developed, so that their effectiveness is maintained through at least 20 washes, or for an estimated three to four years. Three types of LLINs have been approved by WHO to date. With the aim of achieving high coverage among entire communities, populations are targeted on the basis of the following criteria, determined on the basis of the situation analysis above: 1. Malaria endemic; 2. Co-existence of visceral leishmaniasis and/or lymphatic filariasis (other mosquito-borne

diseases); 3. Rural population; 4. Current low coverage of LLINs; and 5. Conflict-affected and poor.

Anti-malaria bednets Cost (USD x 1000) Purchase of LLINs 320 In -country delivery, distribution and communication 80

Total 400 Justification: Malaria is among the most prevalent causes of illness and death in Sudan, particularly among children and pregnant women. It is endemic in most of Blue Nile, and is more widespread in rural areas than urban areas. Under-five mortality (1999 estimate) was 172 per 1,000 in Blue Nile State, and estimates of fever and malaria prevalence suggest that around 4,000 children die of the disease in Blue Nile and South Kordofan every year. Malaria also has a significant impact on maternal and neonatal health, associated with anemia, low birth-weight and maternal and neonatal mortality. It is also associated with malnutrition, increased risk of HIV/AIDS, and other diseases. Mass distribution like this either gives one net per household or one per under-five child. Such distributions are however, so far, rare given the cost of the nets. Target group are the vulnerable (under-fives and pregnant women) rather than households as a whole, since the former are much more vulnerable to the disease than older children and (non-pregnant) adults. More concrete, ITNs have been observed to reduce the incidence of malaria episodes by 50 to 62 percent. Several studies have indicated that high coverage of ITNs lead to a "community effect" whereby mass coverage of nets succeeds in interrupting disease transmission, protecting even those who do not sleep under a bednet. It is this maximalist strategy that the Sudan malaria program has adopted (ie. mass distribution, aiming at very high coverage). Thus, two nets per households, distributed with the expectation that most household members would be covered (particularly among poor households in small dwellings) is, in the context of such programs, a high number. ITNs for pregnant women are similarly effective in preventing illness, fetal loss, anemia, and low birth-weight. Component 8: Project Coordination Unit US$0.640 million The project will fund technical assistance for the coordination of the project. A Project Coordination Unit (PCU) will be established within the State Ministry of Finance and Economy (MoFE). Besides overall coordination responsibilities (including the preparation of the quarterly


reports for all components), the PCU has also a role to play for those (sub-) components that are not implemented by a UN agency. If the respective line ministries as well as their representatives at the locality level, do not have the necessary capacity, the PCU will then assure/assist in the field of financial management and procurement services (the design and preparation of bidding documents, evaluation of offers, and awarding of contracts). A group of consultants with accounting, procurement and project management expertise will be recruited to work together with a group of appointed young MoFE staff to operate the Project Coordination Unit (PCU). For funds routed through the unit, the group of consultants will provide overall management and the full range of accounting and procurement services, including reporting based upon global best practice and international accounting standards. Capacity building for staff and monitoring of self-managed financial management and procurement responsibilities will form a key part of this support.

Project Coordination Unit (PCU) Cost (USD x 1000) Project Coordination Unit (4 persons, 14 months) Office Equipment Transport (2 vehicles 4x4)

490 75 75

Total 640

c. Project Costs by Component The total cost for this project is $ 15.339 million. Of this amount, $7.324 million will come from the MDTF-N and $8.016 million in counterpart funds will be provided by the GONU.

Table 1: Project Costs and Financing (US$ millions) For Grant Purposes

Component MDTF-N GONU Total

Cost 1. Water Supply 2.775 2.775 2. Rural Roads Maintenance & Spot Improvements 3.725 3.725 3. Basic Education 2.780 2.780 4. Demining 1.599 1.599 5. Rural Households Livelihoods Support (Agriculture) 0.380 0.380 6. Capacity Building for State & Local Government

a. Institutional Assessments & formulation follow-up b. Construction/equipment/vehicles

0.400

0.200 1.710

2.310 7. Anti-Malaria Bednets 0.400 0.400 8. Project Coordination Unit 0.640

Total 6.975 7.634 14.609 Contingency 5% 0.349 0.382 0.730

Grand Total 7.324 8.016 15.339 3. IMPLEMENTATION a. Institutional and implementation arrangements I. At the level of the State a Project Coordination Unit (PCU) will be established that has,

besides overall coordination responsibilities (including the preparation of the quarterly reports for all components), also a role to play for some of the components if the respective


line ministries as well as their representatives at the locality level do not have the necessary capacity. Depending on their capacity, the PCU will then assure/assist in the field of financial management and procurement services (the design and preparation of bidding documents, evaluation of offers, and awarding of contracts). The components to be handled by the PCU are:

1. Component 2 (Rural Roads Maintenance & Spot Improvements) 2. Component 6a (the studies), 6b (construction of offices/housing for localities,

procurement of equipment and vehicles for these localities) and 8 (PCU itself), If the respective line ministries do not have the necessary capacity to implement activities under their jurisdiction in a timely manner, they should formally request the PCU to assist them in (and if necessary become responsible for) the design and preparation of bidding documents, evaluation of offers, and awarding of contracts. The PCU will be situated within the State Ministry of Finance and Economy. To ensure effective functioning of the PCU, a team of external professionals will be recruited externally as an interim arrangement to take on the above-mentioned tasks and responsibilities. The MoFE will assign young staff to the PCU who will be trained on these tasks and responsibilities.

II. At the level of the line ministries, if there is not already a similar project management

structure in place (with the support of an UN agency involved), a Project Manager (PM) will be appointed with responsibility for implementation of the respective (sub-) project.

III. Wherever a state ministry and a UN agency have a joint program and fiduciary systems in

place, these institutions will be used to save time and avoid the creation of an extra parallel system. In these cases, the respective State Ministry and UN agencies will have already a formal agreement/contract dealing with the joint program. The UN agency will sign a specific Grant Agreement with the World Bank to manage these components, including their fiduciary aspects. This Grant Agreement will be based on the Financial Management Framework Agreement between the World Bank and the United Nations3 dated March 10, 2006 (the “Financial Management Framework Agreement”). The components under this arrangement are: 1. Component 1 (Water Supply): UNICEF 2. Component 3 (Basic Education): UNICEF 3. Component 5 (Rural Households Livelihoods Support - Agriculture): UNIDO

IV. Two special cases are Component 4 (Demining), which will be implemented directly by the

National Mine Action Center with federal funding, and Component 7, Anti-Malaria Bednets, for which the DHSDP procurement systems (within the Federal Ministry of Health) are already in place and will thus allow for rapid implementation of the program.

V. A monitoring agent, PricewaterhouseCoopers, has been selected by the MDTF-N at the

national level (Khartoum) to monitor and report on the fiduciary and implementation aspects of the project.

VI. Interim Implementation Arrangements (if any): NA

3 Signed by Christoper Burnham, Under Secretary-General for Management, United Nations; Robert Patterson, Officer-in-Charge, Food and Agricultural Organization of the United Nations; and James Adams, Vice President, Operations Policy and Country Services, World Bank.

VII. Strategic Oversight: To provide overall strategic orientation and oversight as well as inter-ministerial and (other) donor coordination, a Program Steering Committee (PSC) will be established. The PSC will be headed by the State Minister of Finance and Economy with representatives of the MDTF-N Technical Secretariat, the federal MoFNE, all concerned implementing ministries, UN agencies and other important stakeholders (like CDF, NGO’s). The PSC will approve the annual work plan and budgets, and will review audit reports and quarterly progress reports. In addition, the PSC will coordinate the roles and funding of various participating donors and government counterparts, resolve inter-agency issues, and conduct monthly reviews of project progress and fund utilization. Figure 1 describes the oversight and implementation structure of the project.

Figure 1. Oversight and implementation structure

Grant Agreement (GA)

MOFE

Other partners (UN agencies, NGOs)

Federal Ministry of Finance and national Economy

Activities Activities

Line Ministry

Project Manager

Line Ministry UN

agency- supported

project

UN Agency

Grant Agreement (GA)

PMU

Other partners: EC, NGO’s, etc

UN Agencies

Chair: Minister of

MOFEState Line Ministers

State Program Steering Committee (PSC)

W O R L D B A N K

Subsidiary Agreement (SA)

Federal MoFNE



VIII. Role of Other Partners: The project will collaborate with government entities and other donors/implementing organizations such as EC, UNMIS and WHO which are not routing their assistance through the MDTF but could in certain cases support the project in-kind or through parallel financing.

b. Procurement arrangements I. For this program the provisions in the World Bank‘s Guidelines for Procurement and for the

Selection of Consultants, as well as the Operational Policy statement on Rapid Response to Crises and Emergencies (OP/BP 8.00) apply. Detailed procurement procedures are described in Annex 8. Procurement under the project will be implemented by the State government based on fast-track procurement procedures consistent with World Bank Guidelines of OP/BP 8.00.

II. For project components implemented by UN agencies, the procurement will be carried out

under a specific Grant Agreement between the World Bank and that UN agency, which again is based on the Financial Management Framework Agreement between the World Bank and the United Nations,4 dated March 10, 2006 (the “Financial Management Framework Agreement”).

III. Given the scarce management and procurement capacity of State government, procurement

will be carried out, as an interim measure, by either the PCU or the UN agencies involved. The aim is to speed up the delivery of the project services to the population through efficient yet transparent procurement practices. As mentioned above, the PCU will also work on increasing the procurement capacity of the State ministries. • Under Component 1, Water Supply, UNICEF will procure the project equipment and

material and will sub-contract to private entities where appropriate. The overall value of the package is US $2.775 million. In addition, six vehicles will be procured by the MoFE/PCU (together with other vehicles to be purchased).

• Under Component 2, Secondary Roads Maintenance & Spot Improvements, the sub-

contracting and the purchase of hardware and equipment for road improvements will be undertaken by the PCU in collaboration with the Project Manager within the Ministry of Physical Planning and Public Utilities. The technical staff of the MPPPU, together with a selected infrastructure consultant, will be responsible for setting the specifications for the contracts as well as for the hardware to be purchased with the allocated budget. The overall value of the package for this component is $3.725 million.

• Under Component 3, Basic Education, UNICEF will procure the proposed project

equipment and goods. The overall value of the package is $2.78 million. • Under Component 4, Demining, NMAC will implement the activities. NMAC will,

where suitable, subcontract to local NGOs for undertaking various components, in accordance to federal rules and regulations. The overall value of the package is about US $1.599 million.

4 Signed by Christoper Burnham, Under Secretary-General for Management, United Nations; Robert Patterson, Officer-in-Charge, Food and Agricultural Organisation of the United Nations; and James Adams, Vice President, Operations Policy and Country Services, World Bank.


• Under Component 5, Rural Households Livelihoods Support (Agriculture), UNIDO will implement the project (CLARIS), and all procurement will follow UNIDO procedures. Procurement from local suppliers will be arranged where possible, specifically for the Nuba hoes. The overall value of the package is US $0.380 million.

• Under Component 6, Capacity Building for State & Local Government, there are 2 sub-

components: a. Institutional Assessment & Strengthening. Consultants will be recruited by the

PCU/State Ministry of Finance and Economy (with assistance of the MDTF-TS) to undertake this activity. The value of the package is US $0.600 million.

b. Basic office facilities, equipment and vehicles. The PCU in collaboration with the Project Manager of the MPPPU will sub-contract the construction works. The technical staff of the MPPPU, together with a selected infrastructure consultant, will be responsible for setting the specifications for the contracts. Regarding the purchase of equipment (office furniture, e.g.), the PCU will procure this together with the Ministry of Local Governance. Finally, the PCU will undertake the procurement of the vehicles. The value of the package is $ 1.710 million.

• Under Component 7, Anti-Malaria Bednets, the DHSDP procurement system already in

place (within Federal Ministry of Health) will allow rapid implementation of this program. The international competitive tender for supply and delivery of the LLINs has already been issued, and it is expected that the contract will be signed and delivery and distribution begun soon after funds are available. Results are thus expected to be rapidly evident on the ground. The overall value of the package for this component is $ 0.4 million.

• Component 8 is the establishment of a Project Coordination Unit (PCU). Local

professionals will be recruited by the State Ministry of Finance and Economy (with assistance of the MDTF-TS) to staff the PMU. Office equipment and vehicles will also be procured and housing arranged. The value of the package is US $0.640 million.

c. Financial management arrangements I. National Financial and Procurement systems do exist within the government at national and

state level, but so far no country fiduciary assessment for Sudan has been done. A Country Integrated Fiduciary Assessment (CIFA) is underway following the recent Public Expenditure Review (PER 2006) which revealed that in general the Public Financial Management (PFM) system is reasonably well functioning in the North but needs to be substantially revamped and modernized. At state level, the public financial management capacity remains weak.

II. The Federal Ministry of Finance and National Economy (MoFNE) on behalf of the Republic of Sudan will be the recipient of the MDTF grant. The World Bank will also sign a Project Agreement with the State government (MoFE) that governs issues of project implementation by the latter. The MoFNE will in turn sign a Subsidiary Agreement with the State Ministry of Finance and Economy (MOFE) of Blue Nile State, which will handle overall coordination of the program. Within the MoFE, a State Project Coordination Unit (PCU) will be established that has, besides overall coordination responsibilities (including the preparation of the quarterly reports for all components), also a role to play for some of the components if the respective line ministries as well as their representatives at the locality level do not have the necessary capacity. In the medium term (yr2-5), it should build the capacity of all state ministries involved and their representatives at the locality level. Depending on their


capacity, the PCU will then assure/assist in the field of financial management and procurement services (the design and preparation of bidding documents, evaluation of offers, and awarding of contracts). The components to be handled by the PCU are:

• Component 2 (Rural Roads Maintenance & Spot Improvements) on request of the MPPPU.

• Component 6a (the studies) and 6b (construction of offices/housing for localities, procurement of equipment and vehicles for these localities) on request by the MPPPU.

• Component 8 (PCU itself)

III. While the MOFE, line ministries of Blue Nile State and locally-based UN agencies are demonstrating strong commitment to support the project, clear coordination and monitoring will be needed to limit the risks of diffuse accountability and the potential for lack of ownership. MOFE lacks both experience in managing development projects and exposure to World Bank procedures. Furthermore, a considerable part (5 of 7 components) of the project will be implemented at the decentralized level in Ed Damazin where, according to COWI Assessment, fiduciary capacity is extremely weak. Accordingly, the financial management risk on the State government side is considered high. To mitigate these risks a Project Coordination Unit (PCU) will be installed to handle fiduciary functions and monitor the implementation of the project on behalf of the State MoFE. Furthermore UN agencies, namely UNIDO and UNICEF, will implement certain components, including fiduciary aspects as per the general Financial Management Framework Agreement (FMFA) between the Bank and each UN agency.

Given the emergency natures of this project and the presence of the risk-mitigating measures mentioned above, disbursement conditions can be limited to (1) a national counterpart Project Coordinator being appointed by the MoFE; (2) a subsidiary agreement being signed between the federal MoFNE and the state MoFE, and (3) a designated account being opened at the Central Bank and project account opened in an acceptable commercial bank in Ed Damazin.

IV. The project unit will be required to maintain accounting records and prepare project financial statements in line with International Accounting Standards and have them audited by the Auditor-General in accordance with International Standards on Auditing. The audit reports will be submitted to IDA not later than six months after the end of each fiscal year. Within 45 days following the end of each quarter, a consolidated progress report will be submitted to IDA according to the format adopted for MDTF-N projects, including components directly implemented by UN agencies.

d. Monitoring and reporting The implementing agencies (UN agencies, state ministries) will prepare quarterly Progress Reports which cover outputs, implementation progress, financial statements, as well as results against monitoring indicators. The project will make use of existing data sources, supplemented by regular routine project data collection. Monitoring will focus on positive changes in key indicators such as:

• A total of 12 suspected or mined areas in about 33 communities successfully cleared or verified from mines and ERWs and returned to the local population for productive use or safe passage.

• Increase in number of functioning improved water sources. • Number of students provided with school kits.


• Etc. The PCU will compile the reports received from the implementing agencies into one overall Quarterly Report. e. Sustainability and critical risks Sudan has just emerged from almost 25 years of civil war. As with most conflict-affected countries there will be continuing concerns for security, political and economic leadership capacity and possible corruption. The economy, governance and the peace agreement are fragile and the Multi Donor Trust Fund, administered by the World Bank, has been facing considerable pressure to disburse funds more quickly, while experience with World Bank operations and quality assurance procedures is limited at the federal as well as the state level. In preparing this project, the Team has taken the above concerns into account. The Three Areas remain a high-risk area for conflict, both local and political. The CPA provides a balanced power-sharing arrangement for the Three Areas. Thus without agreement by both parties, decisions and actions can be delayed. In addition, there is a high percentage of IDPs in the Three Areas, and additional pressure of being “model” states. These risks are inherent to the region and indeed justify the need for a start up/emergency project. By addressing the need for basic services, especially among the most war-affected and marginalized populations, the project can help to mitigate some of the instability caused by the influx of IDPs. In addition, with the economy, governance, and peace agreement fragile, the newly established Multi Donor Trust Fund, administered by the World Bank, has been facing considerable pressure to facilitate a faster disbursement of funds, while Government experience with World Bank operations is limited. In terms of security and political stability, Blue Nile State should therefore still be considered as a risky environment for project implementation. Also the existing capacity in the state government, and in particular lack of experience in program implementation, may present a challenge. Also experience with other MDTF projects suggests that transfer of counterpart funds from the GoNU may not occur in a timely manner. Other factors that can delay the start/implementation of the project, are:

• Although there is an agreed-upon standard Grant Agreement between the UN and World Bank, finalization of individual contracts will nevertheless take time. UN-World Bank contracts need to be agreed upon. However, as the agreements under this project are very similar to the ones for South Kordofan, signing can be expected more quickly.

• Procurement of goods may encounter unexpected delays, such as customs or transport hurdles for imported goods or limited availability of locally-sourced goods.

• The availability of contractors capable of implementing the requested activities with the required quality may be limited.

The project has been designed to minimize these risks through: 1. Diversifying the implementation agencies. The project has 3 types of implementation:

a. 100% MDTF-funding, implemented by UN agencies (component 1,3,5) b. 100% GoNU-funding, implemented by state (component 2, 6c) or federal (component 4

and 7) institutions. c. Components with 100% MDTF-funding, implemented by State MoFE/PCU (6a, 6b and

8).


This set-up allows certain components to start even if other components are not yet ready or are encountering problems. For example the start of the UN-implemented components does not need to wait for the recruitment of the Project coordinator and the other PCU-staff or the signing of a subsidiary agreement or the opening of a designated account. This has resulted in the application of conditions of Disbursement only: (1) a national counterpart Project Coordinator being appointed by the MoFE; (2) a subsidiary agreement being signed between the federal MoFNE and the state MoFE, and (3) a designated account being opened at the Central Bank and project account opened in an acceptable commercial bank in Ed Damazin.

2. Delegation to UN-agencies. In three components (water, education and agricultural tools), the

project finances the implementation of existing programs/work plans of two UN-agencies (UNICEF and UNIDO) with experience in their respective fields.

3. Activities are kept simple. Certain components (not implemented by UN-agencies) undertake

the construction of a limited number of (standard-type) works and buildings for which an external consultant will be recruited to assist in the design and monitoring. Other (sub-) components are only procurement: office equipment, vehicles and spare parts. The Health-component consists of giving extra funding to an activity (purchase and distribution of malaria bednets) of the federal Ministry of Health (MoH) assisted by another MDTF-funded project (DHSDP). The MoH has already started the procurement of a first batch of malaria bednets, which can be copied or expanded to cater for the extra funding.

4. Recruitment of a team of professionals. With regard to the risks for the components that are

not implemented by a Un-agency, the project has included the recruitment of experienced national professionals for the Project Coordination Unit, who will provide or facilitate the necessary technical assistance, when required. For technical work (like construction, road works), consultants will be recruited to bring the required know-how.

For the longer term capacity building, the project will allocate resources to begin a process of undertaking in-depth institutional assessments of key state ministries that should result in longer term follow-up programs focusing on improving the capacity in the state ministries concerned. Below are the detailed risk assessment ratings and mitigation measures.

Critical Risk Risk Rating

Mitigation

Capacity (implementation, financial management and procurement)

High Through the delegation of the implementation of some of the components to UN agencies specialized in the specific sector of activity; Furthermore, the recruitment of a team of professionals for the Project Coordination Unit (PCU) of MoFE-BN is envisaged to assist state agencies functions if needed. For the longer term capacity building, the project will allocate resources to begin a process of undertaking in-depth institutional assessments of key state ministries that should result in longer term follow-up programs focusing on improving the capacity in the state ministries concerned.

Procedural delays Medium As this project is very similar to the one for South Kordofan, the experience gained in the latter to reach approval and signing of the GA can be used to speed up the process.

Project Complexity Low Activities are kept simple especially for the components that are not


implemented by an UN-agency: a limited number of (standard-type) works and buildings for which an external consultant will be recruited to assist in the design and monitoring. Other (sub-) components are only procurement: office equipment, vehicles and spare parts.

Technological Risk Low The technologies employed are standard-type. Implementing agencies (UN and national) have experience with these for quite some time.

Political Will Medium Although in terms of security and political stability, the Blue Nile State is considered, as a risky environment for project implementation, partners of the CPA (GoNU and SPLM have staed their commitment to bring social services to the State. The project in itself is considered a mitigating measure that once started and showing its outputs, will increase the political stability.

Fiduciary Risks Substantial Through the mentioned actions: 1. Delegation to UN agencies 2. Recruitment of fiduciary professionals in the PCU. 3. Simplicity of activities.

Overall Risk Rating Substantial

4. SOCIAL ISSUES As per OP/BP 8.00 concerning emergency projects, this project can be processed under simplified procedures regarding social safeguards policies. There are a number of post-conflict issues of concern such as a lack of government institutions, procedures, and legally defined rights; continuing conflicts in some areas; and grievances arising from perceived lack of inclusiveness and equity that have the potential to undermine project activities and affect the implementation of sub-projects. Social risks largely arising from differential access to benefits, traditional rights and entitlements, adequacy of targeting mechanisms, and varying public perception of benefits will be addressed through continuous monitoring of agreed social indicators. The borrower’s capacity for safeguard policies is limited. However, the project will be closely supervised and will be implemented in cooperation with a Project Coordination Unit knowledgeable about World Bank procedures (including use of the Africa Region’s Environmental Guidelines for Community-Driven Development projects5) and by UN agencies with environmental and social procedures and policies acceptable to the Bank. However, within the institutional support (Component 6a&b) to restructure and enhance the capacity of a number of ministries, the development of safeguard policies and procedures to handle social and environmental issues prudently will be included. The implementation of these programs will be taken up in the next phase (2008/2009). 5. ENVIRONMENTAL ISSUES As per OP/BP 8.00 concerning emergency projects, this project can also be processed under simplified procedures also regarding environmental safeguards policies. The borrower’s capacity for implementing environmental safeguard policies is limited. However, as noted above, the project will be closely supervised and will be implemented in cooperation with a Project 5 As expressed in the Environmental Guidelines for the Community Development Fund (CDF) Project for Northern Sudan


Coordination Unit knowledgeable about World Bank procedures (including use of the Africa Region’s Environmental Guidelines for CDD Projects6) and by UN agencies with environmental and social procedures and policies acceptable to the Bank. Given the emergency conditions of the project, the most tractable way of achieving sound environmental management is through the adoption of the following actions: (a) immediate application of World Bank Africa Region’s Environmental Guidelines for CDD Projects (b) for the water supply component 1, precautions should be taken for assuring the hygiene at the waterpoints (human and livestock) and that drawdown of the water table in the region will be monitored. This component, however, will be implemented under the "Water & Environmental Sanitation” (WES) program of UNICEF, which has (as the name says) a particular focus on water quality and resources protection. Under the (Partner) Grant Agreement with UNICEF, UNICEF will implement this component using its own guidelines and procedures, (c) appropriate disposal of mines and other UXOs as part of the demining component. Furthermore, within the institutional support (Component 6a) to restructure and enhance the capacity of a number of ministries, the development of safeguard policies and procedures to handle environmental issues prudently will be included. The implementation of these programs will be taken up in the next phase (2008/2009). It is anticipated that the environmental and social impacts of the project will be minimal and with the adoption of mitigation measures following the “Environmental Guidelines for the Community Development Fund (CDF) Project for Northern Sudan”, will result in sustainable outputs. Below is a table showing the possible impacts and mitigation interventions. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Cultural Property (OPN 11.03) X Indigenous Peoples (OD 4.20) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X The components of the proposed project likely to generate any environmental impacts include: rehabilitation of roads, the construction of culverts and bridges, and the demining of villages and roads. Based upon available information, the impacts are likely to be minimal, local in extent and readily assessed, mitigated and managed. In the case of the rural roads, the work will be done on existing roads. Accordingly, the project is allocated a B impact category. Given the emergency conditions of the project, the most tractable way of achieving sound environmental management is through the adoption of the following actions: (a) immediate

6 As expressed in the Environmental Guidelines for the Community Development Fund (CDF) Project for Northern Sudan


application of World Bank Africa Region’s Environmental Guidelines for CDD Projects (b) appropriate disposal of mines and other UXOs as part of the demining component. However, within the institutional support (Component 6a) to restructure and enhance the capacity of a number of ministries, the development of safeguard policies and procedures to handle environmental issues prudently will be included. The implementation of these programs will be taken up in the next phase (2008/2009/2010).


Annex 1 Country and Sector Background

Overview

Blue Nile State (BNS) covers an area of approximately 385,000 sq km and is located in southeastern part of Sudan. It borders Sennar State to the North, Upper Nile State to the West and Ethiopia to the East and comprises five localities: Roseires, Damazin, Bau, Geissan and Kurmuk. Blue Nile State was established by Presidential Decree No. 3 in 1992, and the State Legislative Assembly was formed and the constitution drafted during 2006. The state is divided into GoS (Northern Blue Nile State-NBNS) and SPLM (Southern Blue Nile State-SBNS) zones. The estimated population is 850,000, of which 74.3 percent live in rural areas while the rest reside in urban areas such as Damazin, Roseires, Kurmuk and Bau. The average household size is 8.2, and the annual population growth is estimated at 3 percent. BNS is classified as rich savannah with heavy rainfall, averaging 700 mm annually. The landscape is undulating and hilly, characterized by fertile cotton-soils. Streams run across the state creating valleys for farming. Apart from the Blue Nile river, Khor Yabus in the South is the only perennial river. Eastward-flowing khors (dry streams) have wide beds and carry flood waters. Water is usually found in their beds throughout the year within ten feet of the surface in the dry season. The westwards-flowing khors are lost in the swamps and underground water is limited. Climatically, BNS falls within the low rainfall woodland savannah. Rainfall is lower towards the North and heavier towards the South, mainly falling between the end of April and the end of October. The vegetation is thorn land that alternates with grassland in the North and savannah woodland alternating with grass in the South. The state has 19 forest reserves covering a total of 955,519 hectares which accounts for 33.9 percent of the total land of the state. The establishment of rain-fed schemes since 1960 has led to the clearing of most of the woodlands in BNS. Forests also provide firewood and building materials and are a source of income for the population. BNS is rich in minerals, particularly in the Ingessana Hills, where gold, chromite and magnetite are found. Small quantities of gold are mined along riverbeds in the southern part of SBNS. Social & Economic Indicators

Health: Malaria and tuberculosis are endemic in the state. Malaria prevalence is 145 per 1,000 and it accounts for 8.5 percent of morbidity and 17.9 percent of mortality in NBNS. Data from SBNS is unavailable. Treatment for TB is undertaken in Damazin. Similar facilities are not available in rural areas, particularly in SBNS. Other diseases include lower and upper respiratory infections, diarrhea, skin diseases and, to a lesser extent, Kala Azar (visceral leishmaniasis). Infant and under-five mortality rates are 101 and 172 per 1,000 live births. Blue Nile has the lowest life expectancy for women (51.2) in Northern Sudan. There are ten hospitals in NBNS in addition to 14 health care centres, 35 dispensaries, 78 dressing stations, and two pharmacies. Health staff include 28 physicians (four specialists), 3 dentists, 30 technicians, 88 medical assistants, 146 nurses, and 24 health workers.


Basic health infrastructure in SBNS is severely limited. Most patients have to walk for several hours to reach a health facility. The outposts are staffed by community health workers who are trained to administer first aid services. There is a hospital in Kurmuk, supported by the Church Ecumenical Action in Sudan (CEAS) and Samaritan’s Purse (SP), providing inpatient and outpatient services. Health personnel include three doctors, 26 nurses, several medical assistants, midwives and TBA who mainly work in the hospital. HIV/AIDS: HIV/AIDS is one of the major concern and in the southern part of the state it is feared that the prevalence rate may well exceed 10 percent. Surveys carried out in NBNS indicate that awareness among women is low, at 36.3 percent, and even lower on knowledge of preventive methods (80.4 percent unaware). It is feared that the high population concentration in the IDP camps and their proximity to the Ethiopian border may increase the spread of HIV/AIDS. Nutrition: A nutritional survey conducted by GOAL in Kurmuk in February 2005 indicated the prevalence of malnutrition, with Global Acute Malnutrition (GAM) at 9.1 percent (95% CI: 7.1% - 11.1%) and Severe Acute Malnutrition (SAM) at 1.0 percent (95% CI: 0.4% - 1.7%). The whole area of SBNS is considered vulnerable to malnutrition. For child under five, approximately 13 percent suffer from moderate malnutrition and 2 percent are affected by severe malnutrition. In Kurmuk and Geissan Localities, rates rose above emergency levels (3.3 percent SAM and 16 percent GAM in Kurmuk and 2.8 percent SAM and 18.3 percent GAM in Geissan). Water & Sanitation: With the exception of those settlements on the banks of the Blue Nile, the main water sources for the rest of the population in the state are rain-fed hafirs, seasonal khors (dry streams) or the shallow waterholes dug in the beds of the khors during the dry season. Water access for those living at a distance from the Nile becomes difficult during the dry season. While access to water is available to less than 25 percent of the population in NBNS, improved sanitation is available for some 40 percent. Little data is available from SBNS, but indications are that access rates are to safe drinking water are around 10 percent. Education: Enrolment in NBNS is estimated at 47 percent of school-age children, with less than 10 percent estimated enrolment in SBNS. There are 152 primary schools in NBNS with a total of 47,500 pupils and 2,457 teachers. The estimated ratio of girls to boys is 0.69:1. CARE, Islamic Relief Worldwide and UNICEF are working in this area. In SBNS, there are 12 functional schools, four of which are in Kurmuk. All lack qualified teachers, textbooks and school supplies. The total number of students is 2,218, of whom 487 are girls, with 52 untrained teachers. A major constraint in this sector is the absence not only of qualified teachers but also of educated individuals who can be trained as teachers. The SPLM policy is to use the “New Sudan” curriculum, which is taught in English, whereas the majority of the population speak Arabic. Consequently, there is reliance on teachers brought in from other SPLM areas or from Kenya and Uganda. The majority of the population (55 percent) is illiterate or traditionally educated; 34.4 percent have completed primary education or currently in primary schools. Only 2.0 percent are in intermediate schools and 5.2 percent in secondary schools, while 2.2 percent have finished or are still studying at the university level There is a newly established university in the State, the Blue Nile University, which is located in Damazin. It has faculties of Education and Science and works closely with local communities on capacity building and awareness building.


Infrastructure: The building of the Roseires Dam marked the growth of Damazin. A hospital was built and modern housing with good facilities constructed. The dam is the main source of power generation serving the entire country. Communications links between Damazin and other areas exist, although they are of poor quality. Damazin was also connected to Khartoum by rail. However, this line fell into disrepair and was carried away by floods. The distance from Khartoum is 525 kilometres, and the tarmac road is in good condition from Khartoum to Sennar. From Sennar to Singa, the road is under repair, and from Singa to Damazin the road is in poor condition. During the rainy season, most of the areas are inaccessible and access to rural areas, and particularly to the border with Ethiopia, is limited. Rehabilitation of infrastructure is frequently cited as the most pressing need for BNS, particularly for roads that become completely inaccessible in the 6-month rainy season. The lack of an effective transportation network is exacerbated by the fact that even roads in reasonable condition are contaminated with UXOs and mines. Effective state transportation routes are not only invaluable in re-establishing the state’s trading system and therefore development of the private sector, but also for humanitarian access to the most vulnerable communities. The poor road system also prohibits access to communities mostly in the South during the rainy season. In addition, return of refugees and IDPs are hindered in many cases for the same reasons. The clearance of mines and rehabilitation of roads is an urgent priority and one that is required to provide conditions conducive for other priority interventions, primarily relating to the provision of basic services. Economy: The Roseires dam was built in 1969 and its power-generating facilities installed in 1971. Both water and power were needed to implement the Rahad River Agricultural Project. The first irrigation water began flowing in 1977 and by 1981 more than 80 percent of the targeted area was reported to be irrigated. Crop production, however, has been on the decline in NBNS since 1997 when mechanised farming had to be stopped due to the intensity of the conflict. Despite this, the population of NBNS is reportedly able to produce enough grain for household consumption. In SBNS, recurrent instability coupled with poor rains during the last years negatively affected crop production and worsened the difficult situation. The war led to displacement and loss of land and livestock, rendering the population poorer. NBNS is characterized by a cash economy, while SBNS works under a barter system of trade. Livelihoods: The population of BNS is largely dependent on land and water for their livelihoods. Those residing near sources of water practice cultivation of different crops for subsistence. Villagers in the central plains suffer from lack of water sources and must relocate during the dry season to areas where water is available, then return to their lands during the rainy season to start cultivation of crops for subsistence. While away, they engage in a number of activities, mainly as hired labour in the villages to which they attach themselves. The major resources of the pastoral groups are livestock, grazing lands, and cultivation of small plots, which part of the household members return to harvest during the livestock migration. Wood cutting, charcoal production, artisanal gold mining, mat products, collection of wild food and honey, collection of stock and hay, and fishing are the major economic activities during the dry season (off-farm activities). Women play a significant role in securing the livelihood of households by participating in different economic activities. They fully participate in agriculture and sometimes in animal husbandry. Using hand tools (Kadanka, Mantobab, Axes, Malod), most women cultivate very small plots of agricultural land within the vicinity of the household. Other activities carried out by women include household chores, water and firewood collecting, feeding and milking goats, and craft-making for local markets. A key role is that of child rearing.


The daily income of 82.9 percent of households in BNS is less than SD 1,500 (approximately US$ 7.50). This means that all households in Blue Nile State live under the poverty line (given the World Bank's income poverty rate of US$10 per day per household). Background and Population

The Funj region, which is presently known as BNS, takes its name from the Sultanate of Sennar in the Nile valley. Before its disintegration by the Turco-Egyptians invaders in 1821, its hegemony reached south deep into the region between the Blue and White Niles. Funj institutions persisted (and still persist) long after the demise of the Sultanate. On the Ethiopian side of the border, the rulers of Gubba and Beni Shangul at various times acknowledged allegiance to powers in Sudan or Ethiopia depending on political expediency. These rulers originated from the Nile valley and acquired their domains by subordinating the indigenous population through marriage, clientship and frequently by enslavement. A characteristic of Blue Nile State is the cultural heterogeneity as a result of its diverse indigenous ethnic groups and the influx of immigrants from all parts of the country. More than 40 different ethnic groups inhabit the state. They can be divided into three main categories: the indigenous population, the non-indigenous who arrived in the state generations ago, and those who came more recently, after 1950s. The indigenous population includes at least ten major groups each with its own language and system of livelihood ranging from hunter-gatherers to farming communities. The social organization and power relations are governed by traditional rules. Chief among these groups are the Berta/Ragrage, who live along the Ethiopian Highlands; the Ingessana, who occupy the hills named after them; the Hill Buruns, who are divided into the Sillak and Tornassi; and the central groups which are of Nilotic descent. To the west are the Jum Jum and Maban groups whose dialects are Nilotic, and in the South the Uduk, Koma and Ganza, each with its own dialect. The non-indigenous but long established population are mainly Muslim Arabic-speaking groups whose arrival to the region dates back to the Funj sultanate. They came as traders and are referred as Gellaba. This group also includes the West African-named Fellata who settled on the banks of the Blue Nile, and the pastoral nomadic groups of the Rufa’a al Hoi and the Kenama. The non-indigenous inhabitants are those from different groups who were attracted to the area after the expansion of the agricultural schemes and the increasing need for labour force. They included groups from West Sudan who eventually settled in the region, established themselves and gained access to land, as well as groups from South Sudan displaced by the civil war. Lastly, the most significant among these groups is the Fullani, cattle-herders who moved into the area in the 1950s and rely on the same grazing resources as the Rufa’a al Hoi and Kenana. Current Situation

The Comprehensive Peace Agreement (CPA) signed in 2005 considered BNS as one of the Three Areas where power should be shared between SPLM and GoS during the six-year transitional period. According to the CPA, the SPLM share should be 45% of the power in the state while GoS share should be 55%.


The state’s administrative structure begins with the state, which is the divided into provinces and then into districts or localities. The provinces in BNS are Damazin (state capital), Roseires, Kurmuk and Bau. Population Displacement

Population displacement in BNS began in 1987. While parts of the population were displaced to Northern states, some became IDPs within the state, mainly in Damazin and Roseires. Others fled to Ethiopia. According to state officials, an estimated 165,000 people have been displaced inside and outside BNS, representing about 17 percent of the entire state’s population.

In NBNS, settled IDPs have made considerable progress in restarting their livelihoods. Up to 88 percent of the IDP and returnee population farm their own land. Those who arrived in 2002, however, have limited access to land and rely on working as agricultural labourers or on relief assistance. In SBNS income and employment opportunities are limited. The population is predominantly agriculturalist and relies on neighbouring Ethiopia as the source of more than 90 percent of their food and NFIs. Mining is a notable source of income for about 30 percent of the population. The poorest and more recently displaced remain vulnerable to food insecurity. They have little if any access to land, own no livestock and rely on kinship and seasonal labour to survive. The total number of IDPs and refugees who could be returning to Blue Nile State is estimated in the range of 165,000-200,000. Many are returning spontaneously and likely in the form of mass movement. A potential draw for returnees is the belief that deposits of gold, uranium and chrome are thought to be present in the localities of Kurmuk, Geissan and Bau. There are also fears that concessions might be granted to mining firms to develop mineral industries on indigenous Ingessana land while inhabitants are away in refugee and IDPs locations. Similar fears apply to the expansion of large-scale mechanized farming businesses.

Potential for Conflict

Land and water resource usage are both the main sources of competition as well as the major sources from which livelihoods are derived. Most economic activity is based in primary industries – agriculture and livestock – with some activity starting in mineral exploitation. Provided an enabling environment, economic potentials exist in these and other sectors with cross-boarder trade with neighboring Ethiopia and the rest of Sudan. BNS is a resource-rich region of Sudan, but lacks both a strong policy base in the area of trade and business regulation and an enhanced public/private partnership framework.

Historically, the relationship between the farming communities and the pastoralists was one of complementarity. This relationship, however, deteriorated and became competitive during the conflict. Due to the transformation of grazing lands to the mechanised rain-fed schemes, pastoralists not only encroached on existing village farms but also compete with each other for available pasture land. Newer pastoralists groups like the Fulani and Nile Baggara also rely on the grazing lands. Until recently, there was a mechanism in place that facilitated co-existence between pastoralists and farmers by way of exchanging grain and animal products. With the arrival of the new pastoralists groups like the Fulani, the competition for access to land and water has exacerbated


tensions and clashes have been reported. The situation for pastoralists has worsened as their traditional migratory routes are encroached upon by increasing agricultural activities and the growth of farming communities. A continuous movement of population in the region over years has changed the demographic picture of the state. The indigenous inhabitants – settled or pastoralist – have now become a minority. The Fellata, who arrived in the region in the 1920s, have become dominant in the banks of the Blue Nile. Recently, a new pattern has emerged by which the pastoralist Fulani have settled and claimed access to land, competing with the old settlers. Years of drought and the conflict in Darfur have also seen large numbers of Masalit arriving and settling in the region. Blue Nile State has potential for risk and conflict, but with the southern region emerging from war and with the experience of decades of interaction between a myriad of ethnic groups, the state also has the potential for becoming a model of integration and coexistence. Priority Intervention Areas in Blue Nile State

In spite of the CPA and establishment of a legislative assembly and draft constitution (in advance of the other contested areas), political set-up and civil service administration in the state needs still to be improved. This is having a negative impact on the nature, volume and pace of delivering support to socio-economic recovery. Of significance is that there is no presence for the ministries of Health, Education and WES in the southern areas of the state (Kurmuk and surrounding environs), where basic services are most limited. In addition, SPLM authorities are overstretched and do not have the absorptive capacity to take on new programs independently. Furthermore, all technical government departments remain poorly resourced. Enhancing governance capacity in the state is a priority.


Annex 2 Major Related Activities Financed by the MDTF

Activity Name

Year

Economic and Sector Work Export Marketing of Gum Arabic from Sudan Study 2007 Livestock Marketing in Eastern and Central Sudan Study 2007 Projects 1. Rapid Impact Emergency Project. MDTF-South Sudan 2006 2. Community Development Fund Project (CDF). MDTF-National Sudan 2006 3. Decentralized Health System Development Project (DHSDP). MDTF-National

Sudan 2006

4. National Emergency Transport Rehabilitation Project (NETREP). MDTF-National Sudan.

2006

5. South Kordofan Emergency/Start-Up Project. MDTF-National Sudan. 2007


Annex 3 Results Framework and Monitoring

Project Development Objective Indicators Assumptions

The PDO is to initiate the recovery of basic infrastructure and social services provided to the poor people in the conflict-affected area of the Blue Nile State and to lay the foundations for a program addressing capacity building needs in key state ministries in order to ensure future improvements in service delivery especially at the local (decentralized) level. The project would achieve this objective by providing safe drinking water to 71,000 people, improve the safe mobility along selected key rural roads, enhance education facilities for around 100,000 children, improve agricultural productivity in 10 villages, improve malaria prevention for 50,000 rural households and carry out capacity assessments in four Ministries.

Component 1: Water Supply: • 71,000 people with access to an

improved water source • Increased user satisfaction with

improved water sources; including increased usage and a decrease in time taken for water collection. (Source: Survey of target population)

Component 2 & 5: Demining and Roads: • Reduction in accidents and mine related

casualties. (baseline data available) Component 3: Basic Education: • 100,000 primary school aged children,

including 9000 nomadic children, have access to safe drinking water and sanitation facilities in schools

Component 4: Rural Households Livelihoods Support: • Within the agricultural season covered

within the project, there is an improvement in the agricultural productivity in the 10 villages targeted (if measurable)

• Targeted communities show correct and significant usage of the tools provided.

Component 6: Capacity building for state government: • Four capacity building programs are

developed and agreed upon. Component 7: Anti-Malarial Bed Nets: • 80% of the targeted population show

correct usage of the provided bed nets (if measurable)

• Of the targeted population (if measurable) the malarial incidence shows a significant decrease.

• A competent Project Coordination Unit acceptable to the World Bank is operational in time.

• The Counterpart (MoFNE) funding, necessary for the respective components, is released in time.

• The assigned UN agencies implement their respective components.

• No major socio-political (security) problems arise in the State.


Outcomes Indicators for each component Monitoring progress Component 1. Water Supply: Improved access to and usage of water sources at a distance less than 1 km for up to 71,000 people (20 liters per capita per day). o Ensure continued use of existing

community hand pumps o Increase number of hand pumps,

water yards and hafirs available to community;

o Enable community to maintain and

ensure usage of existing water points; o Increase and maintain the capacity of

relevant State Authorities to improve the access to water for the population in the State:

o Train and educate communities on

management of water sources and on hygiene promotion as first step towards improving community health

50 existing hand pumps rehabilitated that can serve a maximum of 12,500 persons.

54 new hand pumps constructed to serve a

maximum of 13,500 persons. 5 new water yards constructed to serve a

maximum of 25,000 persons. 1 new hafir constructed with filtration unit to serve

a maximum of 10,000 persons. 2 existing water yards rehabilitated that can serve

a maximum of 10,000 persons. 5 hafirs/dams fenced/improved to improve water

quality (for around 50,000 persons). Provision of new drilling rig, two trucks and

required spare parts for rigs and trucks.

Community members trained on operation,

maintenance and management of water sources and on hygiene promotion

Successful training of 70 percent of the targeted population in personal and environmental hygiene (hand washing and safe excreta disposal).

Hygiene-related household visits and hygiene/cleaning campaigns conducted

• Data to be provided by UNICEF in quarterly reports.

• Periodic field visits by PCU and MDTF-TS.

Component 2 (Secondary Roads) and 5 (Demining): Begin process to increased levels of mobility and security: o Start improving a number of priority

spots of the secondary road network o Accelerate demining priority zones of

the State

• Construction of eight bridges and ten box

culverts, and clearing of 60 km and grading of 20 km of roads.

• 14 high priority suspected or mined areas and

roads cleared or verified in about 33 communities, affecting a population of more than 54,000.

• Data regarding

secondary road construction to be provided by MPPPU in quarterly reports.

• Data regarding

demining to be provided by NMAC in quarterly reports.

• Periodic field visits

by PCU and


MDTF-TS. Component 3. Basic Education: Improve the quality of basic education facilities through investing in tools & equipment: 1. Improve the access to both safe

drinking water and sanitation for primary school nomadic children

2. Introduce a significant number of

schools to health, hygiene, sanitation and environmental training programs.

3. Provide school aged children with

student kits and school recreation facilities.

• 100,000 primary school aged children, including

9,000 nomadic children have access to both safe drinking water and sanitation facilities. SINCE

• Water and sanitation facilities improved at schools for around 100,000 primary school aged children, including 9,000 nomadic children

• 30 schools introduced to FRESH school health

program. • Parent-teacher associations, communities and

school administrations in Geisan and El Kurumk localities are made aware of hygiene, sanitation and environmental hazards.

• 1,300 teachers receiving training in hygiene and sanitation.

• 140,000 primary school aged children provided with pupil kits and school recreation facilities.

• Data to be provided by UNICEF in quarterly reports. • Periodic field visits by PCU and MDTF-TS.

Component 4. Rural Households Livelihoods Support: Improve the agricultural productivity of rural communities o provide agricultural and animal

traction tools and give training on use and maintenance provided to a significant number of households

o Train blacksmiths in the production of

these tools.

• Tools provided and training given on use and

maintenance provided in 10 villages (2000 households provided with tools

• 200 blacksmiths trained.

• Data to be provided by UNIDO in quarterly reports.

• Periodic field visits by PCU and MDTF-TS.

Component 6. Capacity building State government: Work towards (start the preparations for) improving the institutional capacity of 4 State ministries that will be assessed: Finance & Economy, Local Government, Education, Public Planning and Public Utilities (responsible for water, rural roads and offices/housing). o Assess the institutional capacity of

these 4 state ministries and formulate programs to help improve management and implementation capacity:

• Programs formulated taking into account

assessment of present capacity of these ministries and offering a tailored approach to work towards the desired institutional capacity in fields of planning, design, data collection & analysis, budgeting, monitoring, and coordination.

• Data to be

provided by MPPPU/PCU in quarterly reports

• Ad random field


Help increase the visibility of the local administrations and start to improve its effectiveness by addressing some of their basic needs that have yet to be provided. o equip a number of local

administrations with the minimum required living and working facilities for civil servants: simple housing, offices, (computer) equipment, transport, electricity (solar panels), water supply and sanitation.

• 20 offices and 10 living quarters built, and • requisite office furniture and equipment

provided. • 20 vehicles purchased, 18 for the authorities at

the locality level and 2 for the MoFE.

visits by PCU and MDTF-TS

• Data to be provided by MoFE/PCU in quarterly reports

• Ad random field

visits by PCU and MDTF-TS

Component 7. Anti-Malaria bed nets : Improved Primary Health Contribute to improved primary health o provide long-lasting insecticidal

bednets to rural households, including training of the recipients as to its correct usage.

• long-lasting insecticidal bednets provided to 80

percent of rural households and training of its use given

• Data to be provided by DHSDP in quarterly reports

• Ad random field visits by PCU and MDTF-TS

Component 8. Project Coordination Unit (PCU) Contribute to the Coordination and Management capacity of the State regarding the implementation of projects o Install the PCU and support it with

training and guidance

• PCU installed and trained

• Data on progress

to be provided by MoFE/PCU in quarterly report


Annex 4 Detailed Project Description

As most components have only a limited set of activities, there is little added value for an extensive project description. For Components 1 (Improved Water Sources) and 3 (Basic Education), UNICEF will handle the procurement of a limited list of items and will supervise implementation. For component 5 (Rural Households Livelihoods Support) which has a broader intervention and development scope, a project proposal elaborated by UNIDO is available. For Component 2 (Rural Roads) and sub-component 6b (construction for government capacity building), more detailed design and budgeting will be undertaken at the start of the project. With regard to the installation of the Project Coordination Unit (PCU, component 8), it is agreed that this will be undertaken according to World Bank standards.


Annex 5 Project Costs

The total cost for this project is $15.339 million. Of this amount, $7.324 million will come from the MDTF-N and in addition to $8.016 million in counterpart funds from the GONU.

Table 1: Project Costs and Financing (US$ millions) Disbursements % Component MDTF GONU Total

1. Water Supply 2.775 2.775 19.00 2. Rural Roads 3.725 3.725 25.50 3. Basic Education 2.780 2.780 19.03 4. Demining 1.599 1.599 10.95 5. Rural Households Livelihoods

Support (Agriculture) 0.380 0.380 2.60

6. Capacity Building for State & Local Government a. Institutional Assessments &

formulation of follow-up b. Construction/equipment/vehicles

0.400

0.200

1.710

2.310

15.81 7. Anti-Malaria Bednets 0.400 0.400 2.74 8. Project Coordination Unit (PCU)

Project Coordination Unit (4 persons, 18 months) Office Equipment Transport (2 vehicles 4x4)

490 75 75

0.640

4.38 Total 6.975 7.634 14.609 100.00

Contingency 5% 0.349 0.382 0.730 5.00 Grand Total 7.324 8.016 15.339


Annex 6 Detailed Implementation Arrangements

The implementation arrangements for executing the Start Up/Emergency Project for Blue Nile State have been designed to cater to the following key requirements of the proposed project:

• Accelerated implementation which in turn would require: i. A simplified institutional arrangement for project coordination and oversight. ii. Simple decision-making procedures and work-planning and procurement procedures

to avoid delays. iii. Rapid contracting of UN agencies to procure and implement relevant components. iv. Engagement of a Project Coordination Unit with expertise in World Bank

procurement practices and international accounting standards.

• Building partnerships: i. Implementation arrangements designed to promote strong linkages with participating

donors, and development arrangements allowing shared implementation of various project components.

ii. Sharing of best practice with partners.

Institutional and Implementation Arrangements Project implementation period: Components of this Start-up Phase have been planned to end on 30 April 2009. To allow all activities to be finalized and final payments to be processed, the closing date is fixed at 30 September 2009. Project Organization and Management: The Government of National Unity of Sudan will be the recipient of the grant. The State Ministry of Finance and Economy of Blue Nile State will be responsible for the overall coordination of the project. The PCU will be responsible for overall management, including providing procurement and accountancy services as well as fiduciary assurance regarding use of funds for specific components (2,6a, 6b and 8). UN agencies (UNICEF and UNIDO) will take on this responsibility for Components 1, 3 and 5. For Component 7 (anti-malaria bednets), the DHSDP (within the Federal Ministry of Health) will handle the fiduciary aspects as well as the organization and implementation of the activity. The financial management arrangements are described in greater detail in Annex 5 below. The World Bank will sign separate Grant Agreements with UNICEF and UNIDO to implement their components of the project. The table below shows the proposed implementation arrangements for each component.

Table 1: Project Component and Implementing Agency Project Component Implementation Agencies Estimated

Value (USD millions)

1. Water Supply State Ministry of Public Planning and Public Utilities (MPPPU), UNICEF, WES

2.775

2. Rural Roads Maintenance & Spot Improvements

State Ministry of Physical Planning and Public Utilities (MPPPU), PCU

3.725

3. Basic Education State Ministry of Education, UNICEF 2.780 4. Demining National Mine Action Center (NMAC), State 1.599


Ministry of Humanitarian Affairs, State Level Office of the National Mine Action Center, registered local NGOs.

5. Rural Households Livelihoods Support (Agriculture)

Ministry of Agriculture, UNIDO 0.380

6. Capacity Building for State & Local Government: a. Institutional Assessment

& Building b. Construction of basic

office facilities

State Ministry of Finance and Economy (with assistance of the MDTF-TS)

State Ministry of Physical Planning and

Public Utilities (MPPPU), PCU

2.310 7. Anti-Malaria Bednets DHSDP, Federal Ministry of Health, State

Ministry of Health 0.400

8. Project Coordination Unit State Ministry of Finance and Economy (with assistance of the MDTF-TS)

1.040

Contingency (5%) 0.730 TOTAL 15.339

Implementation Arrangements for each component: Component 1: Improved Water Sources Project organization & management: UNICEF and State Ministry of Public Planning and Public Utilities (MPPPU) Timeframe: The activities that UNICEF can implement during the rainy season are procurement, training and formation of technical teams. Although most activities can be finalized by 31 July 2008, some will take longer but will surely be finalized before 31 December 2008. Community Selection, Mobilization & Organization Most areas have been surveyed and needs have been identified. Based on agreed criteria at state level, villages are/will be selected. The main criteria is no or inadequate water supply in the village. Once the village is selected, the community will be oriented and mobilized as part of the project implementation. The community is involved in the planning and implementation of all WES interventions. Once the community is identified – based on assessment and agreed criteria – they are mobilized to form Village Health Committee (VHC) who identify pump caretakers and mechanics. They will be trained during the implementation of the project. The VHC is involved in the mobilization of community to participate in the project as part of choosing technology option, place of construction and contribution to capital cost, etc. Although, no separate budget line is given for capacity building of community, all above mentioned activities will be undertaken. For example, drilling and installation of hand pumps includes all training activities related to hand pump. Equipment such as tools and spare parts will be provided only in those areas, where water schemes have been established or rehabilitated. Coordination & collaboration A multi-sectoral convergence is developed in UNICEF’s Integrated Community Recovery & Development (ICRD) approach bringing together education, WASH, HIVAIDS, health, Nutrition and child protection activities in one integrated framework. UNICEF has mobilized several UN


agencies, NGOs and other programs (like CDF) to broaden this convergence outside of UNICEF-assisted programs for piloting in South Kordofan and Blue Nile State. The WES -team has consulted with the CDF project team and agreed to coordinate together to avoid duplication and to follow the same strategies. Already UNICEF is reviewing and providing inputs for the documents that are being produced by CDF for the implementation of their project and some of these documents will also be used by UNICEF and other partners. The proposed steering committee at the ministry level in Blue Nile will further enhance the coordination between these two projects and follow one set of standards. CDFs of Roseires Locality and Damazine Locality are members of Blue Nile WASH Coordination Forum and they have attended two meetings. Although water activities are ranked low in the list of service needs prioritize by the selected communities of CDFs their representation in the forum was very useful. Maintenance and sustainability The main reasons for estimated 40% of water systems not functioning are: a) lack of spare parts at local level; b) lack of tools and mechanics at local level; c) damaged during civil conflict; and d) lack of government resources to monitor and provide support to community for maintenance. UNICEF has been addressing these constraints by establishing spare parts centers at Mahalia Locality, training mechanics at community level and provide complete set of tools, establishing WES Unit at Mahalia Locality to provide support to the community and monitor water facilities and undertake regular training. With the advocacy of UNICEF, now state governments are allocating more resources for maintenance of equipments such as rig and vehicles, and also providing funds to establish and operate WES Units. Component 2: Rural Roads Maintenance & Spot Improvements Project organization and management: State Ministry of Physical Planning & Public Utilities, with support from the PCU and MDTF-N TS. At the start of the project, a consultant will prepare the necessary detailed designs and budgets that will be used for the contracts (private sector). This consultant will also supervise the works. Capacity building will be integrated into this activity as staff from respective departments of the ministry will participate in all phases of the project. Planning/Timeline. Actions Time Calendar Comments Selection of consultants and signature of contracts for conducting studies of works

3 months November 2007-January 2008

Government components will be run using national procedures, which could already start before the PCU is present.

Studies-designs-plans done by consultants

2 months February-March 2008

Procurement process for civil works

2 months April-May 2008


Execution of civil works contracts 8 months June 2008-January 2009

Although the construction works are very limited in quantity and complexity.

Handing over of works and finalization of contractual obligations issues

1month February 2009

Component 3: Basic Education


Project organization and management: UNICEF and State Ministry of Education. Activities include procurement of basic tools and equipment, which can take place during the rainy season. While some supplies may be delivered during the rainy season, it should be noted that delivery cannot be guaranteed during this time. However, it is reasonable to expect that the supplies will all be delivered to schools by the end of July 2008. Accessibility will depend on the selection of localities. Community Selection Mobilization & Organization The schools are usually identified by State and NGO partners based on the lowest enrolment rates. Communities are then consulted at the planning stage facilitated by established and legally recognized Parent Teacher Committees (PTC). Experiences in education project implementation in various states in Sudan has shown strong evidence of the high level of commitment and ownership that can accrue from building partnerships with PTCs for school-based activities. This approach will be scaled up to all 10 focus States in 2008 including Blue Nile through the Child-Friendly Community schools and Focused Resource School Health (FRESH) initiatives UNICEF has in 2008 planned to support capacity development of PTCs among CBOs and has a mechanism to channel resources directly to schools and PTCs through block grants for school improvement and small grants schemes to catalyze demand generation. Coordination & collaboration Building synergies is important for education related projects. This multi-sectoral convergence is developed in UNICEF’s Integrated Community Recovery & Development (ICRD) approach bringing together education, Water-Sanitation-Hygiene (WASH), HIVAIDS, health, Nutrition and child protection activities in one integrated framework. UNICEF has mobilized several UN agencies, NGOs and other programs (like CDF) to broaden this convergence outside of UNICEF-assisted programs for piloting in South Kordofan and Blue Nile State. Component 4: Demining Under the umbrella National Mine Action Authority (NMAA, by Presidential Decree No. 299), the National Mine Action Center (NMAC) will implement this component. NMAC will subcontract to registered and accredited local NGOs for undertaking various components of the project. NMAC will retain responsibility for the coordination, monitoring, supervision, quality assurance, and reporting of its local implementing partners. Component 5: Rural Households Livelihoods Support (Agriculture) Project organization and management: UNIDO, State Ministry of Agriculture through Federal Ministry of Industry. A detailed project proposal is available. For all components, administration and supervision will be provided by UNIDO. The proposed emergency intervention consists of three project inputs: a) The Project will be implemented using the existing UNIDO’ CLARIS resources and staff in

operation since 2004 as a PCU in Kadugli. However, an additional sub-office in Blue Nile will be put in place.

b) Supply of agricultural hand tools for returnees for the forthcoming agricultural season and the restoration of the productive capacity for the production of these tools in selected villages.

c) Promotion of agricultural production on a pilot/demonstration basis beyond subsistence needs for returnees using animal traction and appropriate cultivation implements.


Major activities under a) include:

Assessment of available unit office to be rented/refurbished. Procurement of office equipment. Installation of office equipment.

Major activities under b) include: • Provision of a set of hand tools for 2,000 returnees in 10 villages. • Training of 20 blacksmiths trainees from 10 villages and provision of tool kits and scrap

steel for. the production of agricultural hand tools.

Major activities under c) include: • Production and distribution of 50 Nuba hoes together with yokes, chains and fittings. • Production and distribution of 10 ox carts with accessories. • Financing of 100 Oxen. • Community Development Work (village selection, awareness and information meetings,

interest group formation meetings). • Training of farmers in the use of oxen and of cultivation with the Nuba hoe. • Training of work oxen.

Training, manufacturing and support The existing training, manufacturing infrastructure and support staff already available In South Kordofan will be used to start up the project in Blue Nile State: carry out trainings and the production of hand tools and the Nuba hoes and ox carts. Community Selection, Mobilization & Organization The Project will be carried out in cooperation with the Ministry of Agriculture of Blue Nile for selecting rural communities and possibly provided with infrastructure for the set up of a sub-office/guesthouse in the site. UNIDO is already in the process to field a mission to do preparatory field work in terms of building the network, pre select villages and mobilize communities to ensure proper involvement of the communities and representing CBOs. Selection criteria are women headed households, IDPs, returnees, and other vulnerable groups. The UNIDO CLARIS approach is participatory; community empowerment and encouragement to form community development structures are important project activities. When approaching a potential community for the project, we first meet the key persons such as local leaders to discuss the program. This is followed up by public meetings, in which the program is explained and discussed to the entire community, including women and youth. In those communities that already have established Community Development Committee’s (CDC) project staff will work closely with them during implementation. Those without CDCs will be assisted with the (legal) steps needed in their formation. It is important that CDCs represent their whole communities and not just special interest groups within the community. Distribution The distribution of tools is done by the Community Development Committees formed at the beginning of the project. UNIDO assists in the selection of beneficiaries (criteria are women headed households, IDPs, returnees, and other vulnerable groups) Component 6: Capacity Building for State & Local Government


• Improved management and implementation capacity within 4 state ministries (Finance, Local Government, Education, and Public Works). The PCU in collaboration with the relevant ministries will organize the work to be done.

Planning/Timeline.

Actions Time Calendar Comments Selection of consultants and signature of contracts for conducting assessments and formulation of follow-up

4 months November 2007-February 2008

Start of studies (teams in the field)

2 months March-April 2008

Studies and formulations done

4 months May-August 2008

Finalization of contractual obligations

2 months September-October 2008

• Basic office facilities, furniture/equipment and vehicles. The PCU, in collaboration with the

respective Project manager in the line ministry, will sub-contract the construction works, including a consultant to undertake the design and supervision. The technical staff of the MPPPU, together with a selected infrastructure consultant, will be responsible for setting the specifications for the contracts.

Planning/Timeline. Actions Time Calendar Comments Selection of consultants and signature of contracts for conducting studies construction of buildings

2 months November-December 2007


Studies-designs-plans done by consultants

2 months January-February 2008

Procurement process for civil works

2 months March-April 2008

Government components will be run using national procedures.

Procurement process office equipment

3 months September-November 2008


Procurement vehicles 3 months November 2007-January 2008


Execution of civil works contracts

8 months May 2008-January 2009

Although the construction works are very limited in quantity and complexity.

Delivery of office equipment which requires completion of civil works

2 month February-March 2009


Handing over of works and finalization of contractual obligations issues

1month April 2009

Under this subcomponent, the project will fund technical assistance for the management of the project. In addition to overall management, this includes financial management and procurement activities for the State Ministry of Finance and Economy (MoFE) and other state ministries involved in the project for those (sub-) components that are not implemented together with a UN agency. A team of professionals will be recruited to work together with a team of MoFE staff to operate the Project Coordination Unit (PCU), including a project accounting and procurement unit. The PCU, which must possess accounting, procurement and project management expertise, will be recruited though the World Bank’s Consultants Guidelines using the Quality and Cost-Based Selection (QCBS) procedures. The team recruited under the project for the PCU and acceptable to the World Bank will, under close supervision of the Bank, be responsible for the day-to-day management of the project at the state level, including the procurement process and accounting functions. Given the relevance of the assignment for future procurement and accounting functions in Blue Nile State, the assignment will be widely advertised and will be subject to Bank prior review at all recruitment stages. Regarding the institutional assessments and the formulation of follow-up programs, consultants will be contracted to undertake this work. Regarding the construction of offices and housing, a consultant will prepare the necessary detailed designs and budgets that will be used for the contracts (private sector). This consultant will also supervise the works. Capacity building will be integrated into this intervention as staff from respective departments of the ministry will participate in all phases of the project. Procurement of equipment (office furniture, etc.) and vehicles will be handled according to International Standards. Component 7: Anti-malaria bednets Project management: Federal Ministry of Health, DHSDP, State Ministry of Health A limited number of transactions are necessary for these operations, and financial management will be handled by the DHSDP, which has already established procurement capacity (within Federal Ministry of Health) that will allow rapid implementation of this component. The international competitive tender for supply and delivery of the LLINs has already been issued, so it is expected that the contract can be signed and delivery and distribution started soon after funds are available. Results should thus be rapidly evident on the ground. By far the bulk of the financing will be devoted to one contract for supply and delivery of the LLINs, which will be paid directly to the international supplier from the MDTF-NS funds managed by the World Bank. Other transactions, to be handled by the DHSDP-PIUs, will be for the operational expenses of the government teams implementing the LLIN distribution and monitoring and evaluation. The LLINs will be supplied and delivered to the target locations by a single contractor selected under International Competitive Bidding (ICB) procedures. Work on this procurement has started with an initial draft of the tender documents based on the World Bank’s standard bidding documents for health sector goods, guided by a toolkit for malaria-related procurement and similar documents for LLIN procurement by World Bank projects in Zambia and Democratic Republic of Congo (DRC). Customs clearance and storage at intermediate points, notably Port


Sudan, will be the responsibility of the contractor, while state and local authorities will ensure storage at the delivery locations. From these locations to final distribution points in the villages, transport will be arranged by the State Malaria Control Programs and budgeted and financed as an operational expense. Suppliers will provide LLINs approved to meet WHO standards, most notably the requirement that they retain effectiveness after at least 20 washes. Currently, three LLINs are WHO/ WHOPES-approved, and the average price of a standard size (160 x 180 x 150 cm) is around US$ 4.50-4.90. Once the LLINs are delivered to each location, the State Malaria Control Program, with the support of the National Program, will organize distribution, involving the following steps:

i) A high profile ceremony involving the state governor (Wali) and minister of health, the locality governor and community leaders, with accompanying publicity in the press and radio, will introduce the program to the population and emphasize the usefulness of LLINs in protecting against malaria and other diseases.

ii) One or two volunteers from each community will receive one day of training and provided with vests and bibs. They will carry out a pre-distribution census, provide education on LLIN use before and after distribution, and produce a distribution report.

iii) Five to seven teams will be composed of staff from the National and State Malaria Control Programs, other disease control programs, the State Ministry of Health, local authorities and local health workers. These teams will organize distribution at the village level with the assistance of volunteers, attendance by community leaders, and guidance from the pre-distribution census. The teams will provide distribution reports to the Malaria Control Program.

iv) A sheet of instructions will be distributed with each LLIN.

v) Utilization will be monitored by the village volunteers, who will continue to provide education on how to use the nets.

Component 8: Project Coordination Unit Regarding the PCU, local professionals will be recruited by the State Ministry of Finance and Economy (with assistance of the MDTF-TS) to undertake this activity. The same procedure will be used regarding the contracting of consultants for the institutional assessments and formulation of follow-up programs.

Planning/Timeline. Actions Time Calendar Comments

Selection of individuals for PCU, contract signature and start/set-up of a State Project Coordination Unit (PCU),

2 months November-December 2007

Procedures will start by beginning of August 2007

Procurement of office equipment and furniture for the PCU

2 months November –December 2007

Example of South Kordofan can be used. Can be started even before FMU is in place by host Ministry of Finance and Economy


Strategic oversight: To provide overall strategic orientation/oversight and inter-ministerial and (other) donor coordination, a Project Steering Committee (PSC), headed by the State Minister of Finance and Economy with representatives of the federal Ministry of Finance and National Economy, MDTF-N Technical Secretariat, and representatives of all concerned implementing ministries, UN agencies and other relevant implementing actors (like EC, Intern. NGO’s, other MDTF-N projects) will be established. The PSC will approve the annual work plan and budgets, and review audit reports and quarterly progress reports. In addition, the PSC will provide coordination with respect to the roles and funding of various participating donors and government counterpart funding, resolve inter-agency issues, conduct monthly reviews of project progress and fund utilization. Figure 1 describes the oversight and implementation structure of the project. Role of UN Agencies: As indicated above, UN agencies will implement a number of components of the project. While the Blue Nile State MOFE will be responsible for the coordination of the overall program, UN agencies will lead implementation of specific components. Together with the respective state ministries, UNICEF will be responsible the Water and Basic Education components and UNIDO will lead the Livelihoods subcomponent.


Annex 7

Financial Management and Disbursement Arrangements Scope and objective of the assessment 1. The financial management assessment is conducted in line with the Financial Management

Practice Manual issued by the FM Board on 3 November 2005. The objective of the assessment is to determine whether the implementing entities have acceptable financial management arrangements, which will ensure: (1) the funds are used only for the intended purposes in an efficient and economical way, (2) the preparation of accurate, reliable and timely periodic financial reports, and (3) safeguard the entities’ assets.

Executive Summary 2. So far there is no country fiduciary assessment in Sudan. A Country Integrated Fiduciary

Assessment (CIFA) is underway following recent the Public Expenditures Review (PER 2006) which revealed that in general the Public Financial Management (PFM) system is reasonably well functioning in the North but needs to be substantially revamped and modernized. At state level, the public financial management capacity remains weak.

3. The Federal Ministry of Finance and National Economy on behalf of the Republic of Sudan

will be the recipient of the MDTF-grant. The World Bank will also sign a Project Agreement with the State government (MoFE), that governs issues of project implementation by the latter. The MoFNE will again sign a Subsidiary Agreement with the State Ministry of Finance and Economy (MOFE) of Blue Nile State. Within the MoFE, a State Project Coordination Unit (PCU) will be established that has, besides overall coordination responsibilities (including the preparation of the quarterly reports for all components), also a role to play for some of the components if the respective line ministries as well as their representatives at the locality level do not have the necessary capacity. In the medium term (yr2-5), it should build the capacity of all state ministries involved and their representatives at the locality level. Depending on their capacity, the PCU will then assure/assist in the field of financial management and procurement services (the design and preparation of bidding documents, evaluation of offers, and awarding of contracts). The components to be handled by the PCU are: • Component 2 (Rural Roads Maintenance & Spot Improvements) on request of the

MPPPU. • Component 6a (the studies) and 6b (construction of offices/housing for localities,

procurement of equipment and vehicles for these localities) on request by the MPPPU. • Component 8 (PCU itself) If the respective line ministries do not have the necessary capacity to implement activities under their jurisdiction in a timely manner, they should formally request the PCU to assist them in (and if necessary become responsible for) the design and preparation of bidding documents, evaluation of offers, and awarding of contracts. To ensure effective functioning of the PCU, a team of external professionals will be recruited externally as an interim arrangement to take on the above-mentioned tasks and responsibilities. The MoFE will assign young staff to the PCU who will be trained on these tasks and responsibilities.

4. While MOFE, line ministries of Blue Nile State and locally-based UN agencies are

demonstrating strong commitment to support the project, clear coordination and monitoring will be needed to limit the risks of diffuse accountability and lack of ownership. MOFE lacks


both experience in managing development projects and exposure to World Bank procedures. Furthermore, the project will be implemented at decentralized level in Ed Damazin where the fiduciary capacity is said to be extremely weak according to COWI Assessment. Accordingly the financial management risk on the State government side is considered high. To mitigate these risks the Project Coordination Unit (PCU) will handle, where necessary, fiduciary functions and monitor the implementation of the Government-funded and implemented components of the project on behalf of the State MoFE. Furthermore UN agencies, namely UNIDO and UNICEF will implement certain components, including fiduciary aspects as per the general Financial Management Framework Agreement (FMFA) between the Bank and each UN agency.

Given the emergency natures of this project and the presence of the risk-mitigating measures mentioned above, effectiveness conditions can be limited to (1) a subsidiary agreement being signed between the federal MoFNE and the state MoFE, and (2) a designated account being opened at the Central Bank and project account opened in an acceptable commercial bank in Ed Damazin.

5. The project unit will be required to maintain accounting records and prepare project financial

statements in line with International Accounting Standards and have them audited by the Auditor-General in accordance with International Standards on Auditing. The audit reports will be submitted to IDA not later than six months after the end of each fiscal year. Within 45 days following the end of each quarter, a consolidated progress report will be submitted to IDA according to the format adopted for MDTF-N projects including components directly implemented by UN agencies.

Summary of Project Description 6. This is a start-up/emergency project funded jointly by the donors (MDTF-N) and the

Government of National Unity (GoNU). The objective of the project is to contribute on the one hand to the supply of much needed basic services and facilities to the respective conflict-affected populations; and to start the preparations for a capacity building program for a limited number of key state ministries to enable it to more effectively execute its mandate, especially at the local (decentralized) level.

Risk Analysis 7. Country issues: So far there is no country fiduciary assessment in Sudan. A Country

Integrated Fiduciary Assessment (CIFA) is underway following recent the Public Expenditures Review (PER 2006) which revealed that in general the Public Financial management (PFM) system is reasonably well functioning in the North but needs to be substantially revamped and modernized. Main challenges faced by the federal government PFM systems are: (i) the entire accounting and financial system is manual (ii) the budget classification needs to be in line with the international standards, (iii) improvements needed in commitment controls, debt management, cash and revenue management, reconciliation of accounts, and limited capacity of staffs (accountants, financials, auditors…etc). Besides, the economy, governance and the peace agreement are fragile and the newly established Multi Donor Trust Funds, administered by the World Bank, has been facing considerable pressure to disburse funds more quickly, while Government experience with World Bank operations is limited. As a result, the risks are estimated high at country level.

8. Entity level (State of Blue Nile). At the level of the State, the Ministry of Finance and

Economy (MoFE) is the key ministry for this project. The MOFE is a ministry that lacks


institutional capacity and experience in managing development project. Besides the COWI assessment report concluded that the public financial management in Blue Nile State is extremely weak. Consequently the risks at entity level are considered high. To mitigate these risks, the Project Coordination Unit (PCU) will handle where necessary and requested fiduciary functions and monitor the implementation of the Government-funded and implemented components of the project on behalf of the State MoFE. However, the PCU is yet to be set up from scratch at locality level without any experience in World Bank procedures. Another risk-mitigating approach is that UN agencies, namely UNIDO and UNICEF will implement certain components, including fiduciary aspects as per the general Financial Management Framework Agreement (FMFA) between the Bank and each UN agency.

9. Project level: The performance of the project will depend on the quality of coordination

between the different stakeholders, e.g. the State Ministry of Finance and Economy (MOFE), the line ministries and local government, the Project Coordination Unit and the UN agencies. Furthermore, though the Federal government is committed to support the project to provide peace dividends in the “Three Areas”, the GoNU may face some difficulties in releasing its contributions in a timely manner that impact negatively on the project’s implementation. For these two reasons, the project inherent risks are estimated substantial. To mitigate these risks, clear coordination and monitoring mechanisms should be agreed between the different stakeholders within the Steering Committee. Government contributions could also be released in- kind but an initial deposit of 6-month expenditures should be released for the cash portion.

Risk Assessment and Mitigation Below are the detailed risk assessment ratings and mitigation measures.

Risk Risk rating Risk Mitigating Measures Incorporated into Project

Design

Effectiveness Conditions

(Y/N)

Remarks

Inherent risk H Country level H None N The ongoing CIFA will set the

framework to address the country PFM issues.

Entity level (Blue Nile State State)

H (i) Delegate fiduciary functions to a team of professionals (Project Coordinator, Procurement specialist, Financial Management specialist) familiar with WB guidelines; (ii) UN agencies will be accountable for the component handled by them according to FMFA.

N COWI assessment report concluded that the public financial management in Blue Nile State is extremely weak. MOFE and other government apparatus are yet being re-organized, thus they lack minimum institutional capacity to run adequately a emergency project. Recruitment of Project Co-coordinator is a condition for disbursement!

Project level S (i) Agree on clear coordination and monitoring mechanism between different stakeholders; (ii) ensure strong commitment to release counterpart contributions to avoid delays.

N Though the MOFE will have the overall coordination of the project, the involvement of several actors could diffuse the overall accountability. Thus clear coordination and monitoring mechanism should be agreed within the Project Steering Committee. Above the level of the project, a State


Risk Risk rating Risk Mitigating Measures Incorporated into Project

Design

Effectiveness Conditions

(Y/N)

Remarks

Development Coordination Meeting (chaired by the governor) will coordinate all implementing actors.

Control Risk H Budgeting L N A detailed budget has been prepared

and will be monitored. Accounting S Given the weak PFM

system in Blue Nile State, a private firm will be contracted out to handle accounting and financial functions.

N The PCU will have the overall responsibility of ensuring that an acceptable accounting system is in place and maintained during project implementation. Acceptable finances officer and accountant will be recruited to maintain the accounting but will not be a condition for disbursement !

Internal Control

H The institutional capacity of MOFE is very weak; thus the Internal Audit Department of MoFNE will assure that the existing procedures are complied with to ensure internal controls

N The PCU will develop simplified procedures where minimum internal control mechanisms are described.

Funds Flow H (i) Open a local bank account to channel funds from the designated account in Khartoum; (ii) Initial deposit equivalent to 6-month expenditures released by GoNU besides in-kind contributions.

N As a decentralized project, the channeling of funds to Ed Damazin will be closely monitored. Opening a local bank account by GoNU is a condition of disbursement

Financial Reporting

S A consolidated quarterly progress report will be required (including UN agencies’ transactions) and monitored closely

N The PCU may experience some delays in submitting progress report in a timely manner.

Auditing S Audit arrangements set up within 6 months after effectiveness and monitored closely to avoid delays in submitting audit reports

N The ToR should specify that the audit should take place at local level and will include transactions managed UN agencies.

Overall risks H The FM overall risk is High. H-High, S-Substantial, M-Moderate, L-Low The overall financial management risk for this project is considered High. The residual risk would be moderate only if the mitigation measures are implemented satisfactorily and in a timely manner. Strengths


9. MOFE, line ministries and UN agencies are all committed to support this emergency project given the specific context of the “Three Areas” particularly in Blue Nile State.

Weaknesses and Action Plan Significant Weaknesses Action Responsible body Completion

Lack of exposure to World Bank procedures at MOFE.

Immersion training in WB procedures provided to PCU staff.

WB and MOFE Within 3 months after effectiveness

Pressure for quick delivery in a weak environment that could compromise fiduciary quality.

Contract a team of professionals to handle fiduciary functions.

MOFE and WB Before effectiveness

Implementing entity 10. A State Project Coordination Unit (PCU) will be established within the MOFE with overall management and co-ordination responsibility, such as planning, monitoring & evaluation (PME), and preparation of quarterly reports. The PCU will comprise at minimum a Project Coordinator, a Financial Officer, a Procurement Officer, an Accountant and supporting staff. Budgeting 11. A detailed budget has been prepared and reflected in the cost table. The different steps of budget management - preparation, revision, adoption and execution/monitoring- will be detailed in the manual of procedures that will be set up by the PCU. It is agreed that the budget will be closely monitored and execution reports reflected in each quarterly progress report. 12. MOFE will ensure that the portion to be funded by GoNU is approved, secured under the national budget and released to the project in a timely manner. Accounting 13. The PCU will establish an acceptable accounting system to record the transactions directly managed by the PCU. Cash-basis accounting system could be used at the beginning then convert to accrual when a computerized accounting system is installed and well functioning. The PCU accountant and financial management specialist will have the overall responsibility of the accounting system. Internal Control and Internal Auditing 14. Internal control comprises the whole systems of control, financial or otherwise, established by management in order to (a) carry out the project activities in an orderly and efficient manner, (b) ensure adherence to policies and procedures and (c) safeguard the assets of the project and secure as far as possible the completeness and accuracy of the financial and other records. 16. The PCU will set up an acceptable internal control system which should help the management of the project in achieving the development objectives in orderly and efficient manner. Thus, the main focus of the internal control is placed on the following: (i) Segregation of duties, (ii) Physical control of assets, (iii) Authorization and approval, (iv) Clear channels of command, (vi) Arithmetic and accounting accuracy, (vii) Integrity and performance of staff at all


levels, (viii) Supervision. Besides, the project implementation manual (PIM) will provide more details in terms of segregation of duty. 17. The Internal Audit Department (IAD) of the MoFNE will ensure that the procedures and regulations set up for the project are effective. The staff of the Internal Audit Unit in Ed Damazin will include the review of the project operations in their annual audit program. Fund Flows and Disbursement Arrangements Flow of funds 18. A project account will be opened in an acceptable commercial bank in Ed Damazin for the

payment of local expenses directly managed by PCU. This local bank account will be managed by the PCU coordinator and the financial officer.

19. A Designated Account (DA) in EURO will be opened at the Central Bank of Sudan to

receive MDTF funding to be released by IDA. The DA will be replenished by the World Bank on the basis of Withdrawal Application supported by relevant documents cleared by the Monitoring Agent.

20. It is estimated that UN agencies, e.g. UNICEF and UNIDO, will manage nearly $6.5 million

through their own procedures. Only a remaining portion of around $1.3 million ($1.04 + $0.2 million + 5% contingencies) will be managed by the PCU through the designated account.

21. As per OP 8.00, retroactive financing of up to 40 percent of the grant amount may be made

for payments made by the borrower not more than 12 months prior to signing of the Grant Agreement, subject to provision of supporting documentation.

Disbursement Methods 19. The project will start with the transaction-disbursement method based on Designated Account Advance, Direct Payment and Special Commitment. At the beginning of the project, the designated account will be replenished on the basis of statements of expenditures. It would be possible to use the interim financial reports for the replenishment of the DA if considered satisfactory by the World Bank. A Blanket request will be submitted by each UN agency to withdraw at once their respective allocation according to the direct implementation agreement. Minimum Value of Applications 20. The minimum value for Direct Payment and Special Commitment will be USD 50,000 Reporting on Use of Grant Proceeds 21. The supporting documentation for reporting eligible expenditures paid from the designated account should be a summary report of the Statements of Expenditure (SOEs) and records evidencing eligible expenditures for payments against contracts valued above USD 100,000 for work, USD 50,000 for consulting firms and USD 30,000 for individual consultants. 22. The supporting documentation for requests for direct payment should be records evidencing eligible expenditures (copies of receipt, supplier’s invoices, etc). 23. The project will submit Bank statement and a reconciliation of the designated account and the project account together with the withdrawal application on a quarterly basis.


24. All supporting documentation for SOEs will be retained at the PCU and must be made available for review by periodic World Bank review missions and Monitoring Agent and external auditors. 25. The standard format of quarterly progress report adopted for MDTF-N operations will apply; a sample will be attached to the disbursement letter. Designated Account 26. MOFE in liaison with MoFNE will delegate officials to manage the Designated Account to be opened in the Central Bank. The currency for Designated Account will be the United States dollar. Counterpart contributions 27. The Government will make all arrangements necessary to ensure the timely mobilization of the counterpart contributions required for project implementation. These contributions are estimated at $6.4 millions and could be released partially in cash or in-kind given the short time span of the project implementation and the emergency nature of the project. Financial Reporting 29. The PCU will record and report on project transactions directly managed by the PCU. Accordingly the project will have its own ledgers extracted from its accounting system capable of generating the financial reports. Each UN agency will submit its quarterly progress reports including the financial reports to the PCU for consolidation. 30. The PCU will produce consolidated quarterly progress reports including Interim Financial Monitoring Reports (IFRs) to be submitted to the World Bank not later than 45 days after the end of each quarter. At a minimum, the financial reports must include the sources and uses of funds, expenditures by main expenditure classifications, beginning and ending cash balances and other supporting schedules. Auditing 31. The movement of the Designated Account and the Project Account should be reflected in the project financial statements separately. The project accounts and operations excluding those implemented by UN agencies will be audited by the Auditor-General according to International Standards on Auditing. One lifetime audit report and financial statements, along with the management letter, will be submitted to IDA not later than six months after the project closing date. 32. At the time of writing this report, there is no overdue audit report from MDTF portfolio. The terms of reference and other arrangements for the audit will be agreed upon not later than 6 months after project effectiveness. Supervision plan 34. This is decentralized project that will be managed by a PCU under the supervision of the State Ministry of Finance and Economy in Blue Nile State. The Bank’s supervision will be as intensive as possible during the project implementation to ensure that the funds are used for the intended purposed and also provide support when need be. For the 1st year, we will carry out a supervision mission on quarterly basis.


Annex 8 Procurement Arrangements

Procurement Environment 1. A Joint Assessment Mission (JAM) by the UN, the World Bank, the Government of Sudan and the SPLM included an assessment report on public procurement. The JAM concluded that the current public procurement system of the National Government of Sudan is deficient to meet the country’s needs for transparency and achievement of value for money. The Assessment recommended procurement reforms which would include capacity building and logistical support. The current regulatory system of the GOS7 could be easily modernized in the short-term while a more comprehensive legal framework is developed. 2. The main weaknesses of the current system are improper application of the existing regulations and the lack of oversight mechanisms. The public service has deteriorated seriously during the war time and recent reform efforts have not yet taken hold. There is lack of information on how funds are spent at the decentralized levels, so it is difficult to evaluate volume and efficiency of public procurement in Sudan. Procurement capacity has been lost due to the many years of conflict and low budget for non-defense activities. This includes a lack of capacity to manage donor-funded procurement. The private sector has also lost its ability to perform and meet the demands of government procurement, which currently is perceived as reserved for a handful of enterprises. Restoring confidence in the system is a major challenge. 3. To facilitate the financing of reconstruction needs by the international community, donor funds have been contributed into Multi Donor Trust Funds (MDTF), part of which will be used for this project. The World Bank also provided Trust Funds to finance activities in critical areas in capacity building including in the area of Public Sector Management, Public Financial Management and Public Procurement. This capacity building is to support the systems for use of funds under the MDTF as well as for Government own resources. But this capacity building in public procurement has have not yet taken hold. The Donors agreed that all funds in the MDTF pool will follow World Bank Procurement Guidelines. Furthermore, under the Sudan portfolio, the Bank has agreed that UN agencies will use their own procurement procedures under direct grant agreements. To assist the Bank in monitoring the MDTF Projects, two Monitoring Agents (one for the North and one for the South) have been appointed. Capacity Assessment and mitigation of risk 4. The procurement capacity of the key Sudanese institutions that will implement this project8 is very weak in terms of technical personnel and application of procedures. There is no specific staff to carry out procurement functions. Any procurement functions are diffused into ad-hoc procurement committees (established to process specific contracts for goods and/or works). The Procurement capacity of the national institutions is therefore assessed as very low and the overall project risk for procurement is high.

7 Finance and Accounting procedures ordinance 1995 – Chapter 8 8 State Ministries of Blue Nile State for: (i) Finance and Economy; (ii) Local Government; (iii) Education: (iv) Physical Planning and Public Utilities.


5. To mitigate this risk, the proposed project will take a two pronged approach: (a) reduce the procurement workload for the State agencies involved by delegating the implementation of some of the components to UN agencies specialized in the specific sector of activity; and (b) the Project Coordination Unit (PCU) of MoFE-BN would be staffed with an experienced Procurement Specialist to be responsible for managing procurement functions under the project. The Procurement Specialist would be provided with appropriate support of assistants and logistics (office equipment etc). The TOR of the Procurement Specialist will include on-the-job training of line Ministries staff to gradually improve their procurement capacity Requirement for a Procurement Plan 6. PCU will prepare a schedule of all the works, goods and services required for the project as part of the annual work plans and budget. These schedules will be used by the Procurement Specialist to prepare annual procurement plan in the format provided by the Project Operational Manual. For each contract to be financed by the Grant, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements (if applicable), and time frame will be agreed between the PCU and the line Ministries in the Procurement Plan. In addition, the procurement plan for the activities to be financed (see Para. 7 below) by GONU will be submitted to the Bank for review and comments. Similarly, the Grant agreements with UN agencies include provisions granting the Bank sufficient information on the activities implementation plans and progress thereof. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. Detailed Arrangements 7. Only procurement of a limited amount of goods and of consulting services under Component 6a, Capacity Building, will be carried out in accordance with the World Bank “Guidelines, Procurement under IBRD Loans and IDA Credits”, May 2004, revised October 2006, and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated May 2004, revised October 2006; and the provisions stipulated in the Grant Agreement.

8. The financing arrangements for the project, either parallel co-financing by GONU or implementation by UN agencies under the Financial Management Framework Agreement (see Table 1), will result in most of the procurement being carried out in accordance with those entities’ procurement procedures. In the case of activities cofinanced by GONU, the Bank supervision will ensure that the Provisions of Para 1.5 of the Procurement Guidelines are satisfied. Activities implemented by UN agencies will be carried out in compliance with separate sub-grant agreements with each agency. The procurement section of these sub-grant agreements entitles the agency to carry out procurement in accordance with its own procurement guidelines and procedures, but with due regard to economy and efficiency. It also includes specific provisions and remedies in the case of corrupt, fraudulent, collusive or coercive practices, in line with Bank policies. The GONU and UN agencies responsible for the implementation of the various components have a proven record of good performance and their comparative advantage as implementing agencies is detailed in the description of each component.

Scope of Procurement 9. Goods: a limited amount of goods will be required to equip the PCU with vehicles, office equipment and office furniture. The total cost of goods is estimated at about US$115,000.


a. Shopping will be used for the procurement of all the goods, because of the relatively small amounts involved and the need for equipping the PCU in a short time. It is anticipated that the largest contract would be for two 4x4 pick up trucks, estimated at about US$ 75,000. The other contracts, for office equipment and furniture, will include off the shelf items available locally.

10. Consultant Services: the project will require technical assistance to support MOFE and most of the line agencies and ministries in project management and implementation, institutional assessment and governance, and procurement. The project will finance directly only a few consultancy contracts with individuals for the provision of: Project Coordination Unit (PCU) services and one with a firms for Institutional Assessment and formulation of Follow-up Programs. The total cost is estimated at about US$ 1,240,000 equivalent of which the PCU accounts for an estimated US$640,000. The balance of the funds will be used for a number of contracts, yet to be defined in scope and cost, with firms and individuals. (i) Quality- and Cost-Based Selection (QCBS) in accordance to Section II of the consultants Guidelines will be used for all major contracts under the project and for all contracts estimated to cost US$ 200,000 or more. Shortlists for contracts estimated to cost less than US$200,000 may consist of national firms and NGOs, where available. (ii) Consultants Qualifications (CQ) may be used for assignments estimated to cost less than US$200,000 and for which the need for proposing and evaluating competitive proposals would not be justified. This applies similarly to the threshold above which advertising in UNDB/DG market is required. In case there are repetitive assignments under emergency conditions a long list of good performing consultants can be prepared and the State Government can draw from that list according to a mechanism which would ensure equal opportunity to good performers. (iii) Single-Source Selection. In accordance with paragraphs 3.8 to 3.11 of the Guidelines for the Selection and Employment of Consultants in the case of firms; and with Section V Selection of Individual Consultants in accordance with paragraphs 5.1 to 5.3 of the Guidelines, Single Source Selection may be used for contracts for situations of emergency, a natural continuation of a previous assignment, small assignments and situations when only one firm is qualified. Because of the emergency nature of the project, the provisions of BP 8.00 for the employment of pre-qualified procurement and project management agents through sole-source or qualification-based selection are also applicable. (iv) Individual Consultants. Services for assignments that meet the requirements set forth in the first sentence of paragraph 5.1 of the Consultant Guidelines may be procured under contracts awarded to individual consultants in accordance with the provisions of paragraphs 5.2 through 5.3 of the Consultant Guidelines. Under the circumstances described in paragraph 5.4 of the Consultant Guidelines, such contracts may be awarded to individual consultants on a sole-source basis. Prior Review Thresholds: the following contracts will be subject to Bank’s prior review:

(i).Each contract for goods under shopping method estimated to cost the equivalent of US$20,000 or more;

(ii).All terms of reference for consultants’ services and training;


(iii).Each contract with a consulting firm estimated to cost the equivalent of $50,000 or more, each contract with individual consultants estimated to cost the equivalent of $20,000 or more; and

(iv).All contracts awarded under the Single Source Selection method or awarded to United Nations Agencies.

11. All other contracts will be subject to post-review and procurement audit by the Bank. The project staff will maintain accurate records of all procurement activities and documents related to the Project. The procurement files will be maintained for review by the Bank's supervision missions and independent auditing. The project staff will also consolidate procurement activities into Quarterly and Annual Progress Reports. 12. Advertising: Immediately after negotiations, a General Procurement Notice (GPN) will be published online in dgMarket and UN-Development Business and in at least two national news papers of wide circulation. The GPN will provide a description of the Project and an indication of consultants’ services estimated at more than US$100,000. EOI will be advertised for consulting services above US$100,000 on national newspapers, and online in dgMarket and UN-Development Business when expected to cost more than US$200,000. 13. Frequency of Procurement Supervision: Bank supervision missions will be carried out every 6 months. A Monitoring Agent, currently employed by the Bank, will report regularly on the status of procurement and project implementation and conduct independent procurement post reviews for the project once a year.


Procurement Plan

I. General

1. Project information: Country: Sudan Beneficiary: Blue Nile State, Sudan Project Name: Blue Nile State Start-Up Emergency Project Grant No: ????? Project Implementing Agency (PIA): State Ministry of Finance and Economy, relevant line Ministries, UNICEF and UNIDO 2. Bank’s approval Date of the procurement Plan [Original :……; Revision 1:…]

3. Date of General Procurement Notice: ……………….. 4. Period covered by this procurement plan: Initial twelve months out of a total

project duration of eighteen months.

II. Goods and Works and non-consulting services. 1. Prior Review Threshold: Procurement Decisions subject to Prior Review by the

Bank as stated in Appendix 1 to the Guidelines for Procurement:

Procurement Method Prior Review Threshold Comments 1. ICB and LIB (Goods) Not Applicable 2. NCB (Goods) Not Applicable 3. ICB (Works) Not Applicable 4. NCB (Works) Not Applicable 5. ICB (Non-Consultant Services) Not Applicable 6. Shopping = > 20,000$

2. Prequalification : Not applicable

3. Proposed Procedures for CDD Components (as per paragraph. 3.17 of the Guidelines: Not applicable

4. Reference to (if any) Project Operational/Procurement Manual: 5. Any Other Special Procurement Arrangements: Advance procurement of

vehicles and office equipment and furniture for the PCU is expected to be carried out under retroactive financing.


6. Procurement Packages with Methods and Time Schedule

1 2 3 4 5 6 7 8 9

Ref. No.

Contract

(Description)

Estimated

Cost US$ ‘000

Procurement

Method

Prequalific

ation (yes/no)

Domestic

Preference (yes/no)

Review by Bank (Prior / Post)

Expected

Bid-Opening

Date

Comment

s

V-1 Pick-up 4x4 (2 No.) 75 Shopping No No Prior Nov 15, 2007

OF-1

Office furniture 11 Shopping No No Post Nov 15, 2007

OE-1

Office equipment 29 Shopping No No Prior Nov 15, 2007

WS Rehabilitation of 50 hand pumps 25 UNICEF

Procedures Not Applicable

Not Applicable

N.A.

WS Rehabilitation of 2 water yards 70 UNICEF


N.A. N.A.

WS Improvement of 5 hafirs/dams 175 UNICEF


N.A. N.A.

WS Drilling/installation of 54 new hand pumps 297 UNICEF


N.A. N.A.

WS Drilling/installation of 5 new water yards 375 UNICEF


N.A. N.A.

WS Establishment of 1 hafir 150 UNICEF


N.A. N.A.

WS Spare parts of drilling rig and trucks 25 UNICEF


N.A. N.A.

WS One new drilling rig 550 UNICEF Procedures

Not Applicable

N.A. N.A.

WS Two trucks 200 UNICEF Procedures

Not Applicable

N.A. N.A.

RR Clearing & grading of roads

700 GOBNS Procedures

Not Applicable

N.A.

RR Construction of bridges 1,200 GOBNS Procedures

Not Applicable

N.A.

RR Construction of culverts

225 GOBNS Procedures

Not Applicable

N.A.

RR Equipment Rehabilitation New Purchase

420 1,000

GOBNS Procedures

Not Applicable

N.A.

RR Tools and accessories (Computers and survey set)

60 GOBNS Procedures

Not Applicable

N.A.

ED 30 hand pumps in 30 schools 165

UNICEF Procedures

Not Applicable

N.A. N.A.

ED 30 latrines in 30 schools 30

UNICEF Procedures

Not Applicable

N.A. N.A.

ED Supplies of hygiene facilities and soap to 30 schools in three localities

9

UNICEF Procedures

Not Applicable

N.A. N.A.

ED Capacity building of 1,300 teachers in 45 workshops and training sessions

225

UNICEF Procedures

Not Applicable

N.A. N.A.


1 2 3 4 5 6 7 8 9

Ref. No.

Contract

(Description)

Estimated

Cost US$ ‘000

Procurement

Method

Prequalific

ation (yes/no)

Domestic

Preference (yes/no)


Expected

Bid-Opening

Date

Comment

s

ED Tables & benches (with capacity for 4 students each) for 48,000 students

949

UNICEF Procedures

Not Applicable

N.A. N.A.

ED School kits for 140,000 students (bags with notes, pencils, pens, erasers, sharpeners)

272

UNICEF Procedures

Not Applicable

N.A. N.A.

ED 350 Classroom bags (chalk, correction pens, rulers, teachers’ notebooks)

280

UNICEF Procedures

Not Applicable

N.A. N.A.

ED 3,500 cabinets for 1,255 schools 155

UNICEF Procedures

Not Applicable

N.A. N.A.

DM De-mining 1,600 NMAC force account/NGO

Not Applicable

N.A. N.A.

RH Agricultural Implements and Tools

215 UNIDO Procedures

Not Applicable

N.A. N.A. Including TA

RH Offices and office equipment

165 UNIDO Procedures

Not Applicable

N.A. N.A. Including TA

AM LLIN (65,000) 320 ICB Implemented by FMoH

Abbreviations: WS: Water Supply; RR: Rural Roads; ED: Education; DM: De-mining; RH: Rural Household Livelihood Support; AM: Anti-malaria Bed Nets

III. Selection of Consultants

1. Prior Review Threshold: Selection decisions subject to Prior Review by Bank as stated in Appendix 1 to the Guidelines Selection and Employment of Consultants:

Selection Method Prior Review Threshold Comments 1. Competitive Methods (Firms) => 50,000$ 2. Single Source (Firms and Individuals) All 3. Individuals = > 20,000$ 4. UN Agencies All

2. Short list comprising entirely of national consultants: Short list of consultants

for services, estimated to cost less than $200,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

3. Any Other Special Selection Arrangements: Advance procurement of the individual consultants for the PCU is expected under retroactive financing.


4. Consultancy Assignments with Selection Methods and Time Schedule

1 2 3 4 5 6 7

Ref. No.

Description of

Assignment

Estimated

Cost (US$’000)

Selection Method


Expected Proposals

Submission Date

Comments

CF-1

Institutional Assessments and Follow Up Programs 600 QCBS Prior

Dec. 6, 2007

CI-1 PCU Coordinator 48 IC Prior

Nov. 1, 2007

CI-2 Financial Mgmt. Spec. 36 IC Prior

Nov. 1, 2007

CI-3 Procurement Specialist 36 IC Prior

Nov. 1, 2007

CI-4 Accountant 30 IC Post Nov. 1, 2007

WS Geophysical study, training, Supervision and monitoring, technical assistance

404 UNICEF procedures

N.A. N.A

RR Technical assistance

30 GOBNS Procedures N.A.

RR

Design and Supervision (Consulting firm)

90 GOBNS Procedures

Not Applicable

N.A.

ED

Establishment of FRESH in 30 schools

90 UNICEF Procedures

Not Applicable

N.A.

Note: Cost of individual consultants for PCU includes housing at 1,000$/month.

IV. Implementing Agency Capacity Building Activities with Time Schedule

1. In this section the agreed Capacity Building Activities (some items could be from CPAR recommendation) are listed with time schedule

No.

Expected outcome / Activity Description

Estimated Cost

Estimated Duration

Start Date

Comments


Annex 9 Economic and Financial Analysis

Per OP 8.00, an Economic and Financial Analysis is not required.


Annex 10 Social and Environmental Safeguards

A grant in the amount of US$15.339 million equivalent is being sought to finance a Start-Up/Emergency Project (the Project) for Blue Nile State State, Sudan. This ESSAF aims to describe the approach and principles to be followed to ensure due diligence in managing the potential adverse environmental and social impacts and risks associated with the Project. 1. Background Blue Nile State, as one of the Three Areas most affected by Sudan’s 20-year civil war, faces both a lack of key infrastructure and a weakened public service charged with providing basic services. Lack of funds, limited training opportunities, and limited staff capacity have restricted the ability of the state and locality governments to provide needed infrastructure and services for the population. This strategically-located state is now facing the challenge of developing institutional capacity, including improved data collection systems, for the delivery of the peace dividend in the form of improved infrastructure and access to basic services, thus creating conditions for economic growth with equity and reduction of poverty. The key development issues being addressed by this project and the planned follow-on Development Phase project can be divided into three categories. The political aspect will provide assistance to the implementation of the CPA in terms of aid and recovery for this war-affected state. The socio-economic aspect will encompass the greater part of the project, and includes interventions addressing the access to basic services (water, education), infrastructure, and some support to the economic development of the population. Finally, the institutional component will provide support to and capacity building for government institutions, civil society, and other key actors. It will also assist with the development of a comprehensive data collection system for development planning. The MDTF-N will target its support towards a range of sectors in Blue Nile State that are consistent with its comparative advantage relative to other development agencies (e.g. UN and via the UN the NGOs) that have a firm presence on the ground in implementing projects). To this end, MDTF funds will be used as much as possible to bolster projects that the State ministries implement together with these agencies. As a number of other agencies and donors are currently active in these sectors and feature specialized expertise, the MDTF will play a complementary role or provide funding for expansion of activities. Only in those priority fields where activities are limited or nonexistent, the MDTF can take a more active role in designing and implementing projects. For all activities, project design will take place on the basis of priorities of the State government and the work plans that the respective state authorities have developed together with the UN in a consultative manner. 2. The Project The Project Development Objective is to contribute on the one hand to the supply of basic services and facilities to the respective conflict-affected populations; and to start the preparations for a capacity building program of the State government to enable it to more effectively execute its mandate, especially at the local (decentralized) level. The project will include eight (8) components.


• Six components aimed at restoring access to basic services and needed infrastructure particularly for conflict-affected populations in Blue Nile State. In line with OP8.00, these components finance targeted expenditure and were selected on the basis of their expected quick impact and the possibility to partner with existing programs managed by UN agencies.

Component 1: Water Supply (US$ 2.775 million). This component will support the construction and rehabilitation of improved water sources (hand pumps and water yards) throughout Blue Nile State state, with the objective of providing access to potable water on a reasonable per capita per day rate for both human use and livestock watering needs. This work will be managed by UNICEF, which has an ongoing water project in Blue Nile State.

Component 2: Rural Roads Maintenance & Spot improvements (US$3.725 million). This component will support the construction of eight small one-lane bridges and ten box culverts, as well as clearing of 60 km and grading of 20 km of roads. Given the urgency of this intervention, private (local) contractors will be engaged under supervision of a consultant. This consultant will also prepare the necessary detailed designs, locations and budgets for the works to be implemented at the start of the project. A consultant will also assess the added value of existing heavy equipment in need of repair before engaging in rehabilitating them. Capacity building will be integrated into this intervention as staff from respective departments of the ministry will participate in all phases of the project. Heavy equipment (graders, bulldozers, etc.) will also be leased from major national hardware companies that will handle the maintenance and running of these machines. A consultant will assess the added value of existing heavy equipment in need of repair before engaging in their rehabilitation

Component 3: Basic Education (US$2.780 million). This component will build on efforts of the Blue Nile State government to improve and expand access to primary schools. This component will be implemented by UNICEF, which together with NGO partners has been working with the Blue Nile State Government and SPLA in education, teacher training, rehabilitation of girls schools, and alternative education programs, including an accelerated learning program that has been introduced to accommodate and encompass education activities for children associated with fighting forces who were demobilized.

Component 4: Humanitarian Demining (US$ 1.599 million). This component will be implemented by the National Mine Action Center (NMAC) as part of its urgently-needed work on demining suspected roads and other high priority suspected areas in Blue Nile State. Where possible, registered and accredited local mine action NGOs will undertake clearance operations for mines, Unexploded Ordnances (UXO) and Explosive Remnants of War (ERW) in high priority suspected mined areas. The clearance operations will include detailed technical surveys, location, and destruction of mines, UXO and ERW; certification; and handover to the local communities. All mine/ERW clearance operations will be undertaken in accordance with International Mine Action Standards (IMAS) by registered and accredited mine action organizations.

Component 5: Rural Households Livelihoods Support (Agriculture) (US$0.380 million). In Blue Nile State, this new phase of the CLARIS program will benefit a minimum of 2,000 households (including returnees and IDPs) for a total estimated population of 20,000 with the distribution of kits of locally-produced agricultural hand tools. These tools are produced by 20 blacksmiths trained by the project and selected from within the targeted communities. In addition, 200 farmers will benefit from distribution of animal traction tools as well as training on use and maintenance. The beneficiaries are poor and marginalized rural communities in ten villages in Blue Nile State. In line with UNIDO’s approach, adequate representation of women will be ensured through their appointment in relevant positions in village committees


and the support to the formation of women’s groups for their active participation/contribution. This six-month emergency phase will serve as the start-up of the more comprehensive Phase II UNIDO CLARIS program in Blue Nile. Under this more extensive program, other villages will be further involved in the project. In particular, women’s groups in the additional villages will be further provided with technology, equipment and management training for agro-processing productive activities and other income-generating activities.

Component 7: Anti-malaria bednets (US$ 0.4 million). The component will support the marketing and distribution of long-lasting insecticidal nets (LLINs) with the objective of raising coverage to 80 percent of rural households in Blue Nile State. Insecticide-treated nets (ITNs) are a very effective malaria control intervention, shown to significantly reduce child mortality. This $0.4 million subcomponent is part of a larger LLIN program also covering South Kordofan, Kassala and Red Sea State. It is envisaged that the MDTF-N Three Areas Program will also contribute $1.0 million to the South Kordofan State Bednets program. The total of $2.52 million would finance the supply and distribution of an estimated 420,000 LLINs, covering most of the population in Blue Nile State and South Kordofan as well as targeted groups in Red Sea State and Kassala.

• One component aimed at building capacity to manage and implement development programs in a transparent, effective, efficient manner and according to international standards for accounting and procurement.

Component 6: Capacity Building for State & Local Government (US$ 2.950 million). This component will support the Blue Nile State state government in developing capacity needed to plan, develop, and implement programs and projects, as well as capacity in financial management and procurement. It also envisages the provision of basic office and housing facilities for local authorities in those localities where they are most needed. The support in this Start-Up/Emergency phase will consist of three elements: o Implementation Capacity. For four ministries – Finance & Economy, Local

Governance, Education and Physical Planning & Public Utilities (MPPPU (responsible for Water, Rural Roads amd offices/housing), the project will fund technical assistance and diagnostic studies to assess the capacity of the respective ministries to plan and implement roles and responsibilities in the framework of their mandate at state and lower levels. These diagnostic assessments will allow the development of one or more comprehensive follow-up programs, either sectoral (like Rural Roads, Water, etc.) or more cross-cutting (Capacity Building). Consultants will be contracted to formulate this follow-up program(s).

o Construction, equipment and vehicles. Construction of a number of basic office facilities and housing for authorities at the locality level is envisaged. The aim is to make local authorities visible and to provide them with basic physical means to function. This component will support provision of 20 furnished offices with verandas and zinc roofing in 6 towns (localities). Ten houses for medium government officials and or teacher rest in six localities will be rehabilitated. Given the urgency of this intervention, private contractors will be engaged under supervision of a consultant. This consultant will also prepare the necessary detailed designs and budgets for the works to be implemented. Furthermore, supporting equipment and vehicles are also accounted for to facilitate the work of the authorities at the locality level. This include: computers, stationeries, photocopying machines and 18 cars (Hilux 4x4). Another 2 cars will be purchased to support the MoFE in its work.


• The establishment of a project Coordination Unit. Under this component, the project will fund technical assistance for the management of the project. In addition to overall management, this includes financial management and procurement activities for the State Ministry of Finance and Economy (MoFE) and other state ministries involved in the project for those (sub-) components that are not implemented together with a UN Agency. A team with accounting, procurement and project management expertise will be recruited to work together with a team of MoFE staff to operate the Project Coordination Unit (PCU). For funds routed through the unit, the firm will provide overall management and the full range of accounting and procurement services, including reporting based upon global best practice and international accounting standards. Capacity building for staff and monitoring of self-managed financial management and procurement responsibilities will form a key part of this support.

Funding. The total cost for this project is $ 15.339 million. Of this amount, $ 7.324 million will come from the MDTF-N and $ 8.016 million in counterpart funds will be provided by the GONU. 3. Compliance with Safeguard Policies As per OP/BP 8.00, this project can be processed under simplified procedures also regarding the safeguards policies. 4. Environment and Social Screening and Planning Procedures The Project triggers one safeguard policy, OP4.01 on environmental assessment, which will apply for Components 1 (Water Supply), 2 (Rural Roads Maintenance and Spot Improvements) and 4 (Humanitarian Demining). Screening procedures will be applied in each of these components, as described below, to ensure that no environmental or social risks arise that would require more detailed environmental or social assessment: • Component 1 (Water Supply): investments under this component will be screened to ensure

that groundwater resources are sustainably utilized, and that waterpoints are hygienically designed to protect the health of humans and livestock. This will be achieved by application of the guidelines for the Water & Environmental Sanitation (WES) program of UNICEF, which will implement this component under a (Partner) Grant Agreement. The relevant guidelines used are "The Sphere Handbook9, 2004 revised edition".

• Component 2 (Rural Roads Maintenance and Spot Improvements): investments under this component will be screened to ensure that they include only (i) construction of small one-lane bridges, (ii) construction of box culverts, and (iii) clearing and grading to rehabilitate existing roads. Further, these investments will be screened to ensure that they do not entail either (i) activities within protected areas, or (ii) involuntary resettlement. Preparation of the design studies for these works will include development of EMPs to address potential temporary environmental impacts during the construction phase, and will also document any voluntary land acquisition, temporary or permanent, that may be necessary. Works contracts will be screened to ensure that these EMPs are incorporated. These screening procedures will be included in the Terms of Reference of the supervision consultant who will be contracted to work with MPPPU, and will be monitored by the PCU.

9 "The Sphere Project - Humanitarian Charter and Minimum Standards in Disaster Response, www.sphereproject.org"


• Component 4 (Humanitarian Demining): to ensure that demining operations do not cause unnecessary soil erosion, removal of vegetation, pollution, or damage to cultural property, these operations will be undertaken in compliance with UN-approved International Mine Action Standards (IMAS). These standards will be incorporated in the contracts for these operations, which will only be awarded to registered and accredited mine action organizations.

5. Environment and Social Management Capacity The borrower’s capacity for implementation of safeguard policies is very limited. This shortcoming will be addressed by: • Establishment of a Project Coordination Unit with experience in the application of Bank

policies and procedures, responsible for overall supervision of the Project, including implementation of the environmental and social screening and planning procedures described above;

• Implementing Component 1, Water Supply, through UNICEF, who will ensure application of WES program guidelines;

• Contracting a supervision consultant familiar with Bank safeguard requirements to work with MPPPU for the implementation of Component 2, Rural Roads Maintenance and Spot Improvements;

• Contracting only registered and accredited mine action organizations under Component 4, Humanitarian Demining, who’s contracts will include safeguard procedures compliant with IMAS.

In order to help establish more permanent institutional capacity, including for the management of environmental and social risks, Component 6aims to restructure and strengthen a number of ministries. In particular, this component will help establish environmental and social safeguard policies and procedures in MPPPU, which will provide the foundation for more extensive physical investment under the proposed Recovery and Development phase of the reconstruction program. 6. Implementation Support The first of the regular reviews will be carried out in April 2008 (end of dry season) and then every 12 months to assess progress, achievement of overall objectives, as well as the role of the different partners and to eventually reorient the Project if needed to ensure achievement of objectives. The reviews will involve visits by specialists to selected sites for first-hand assessment of executing entities’ performance.


Annex 11 Letters of Endorsement by Sector Ministry and MOFNE

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