SCCD : N.G.

AFRICAN DEVELOPMENT FUND MAD/PAAI/2001/01Language: EnglishOriginal: French

APPRAISAL REPORT

THE GRAND SUD RURAL POTABLE WATER AND SANITATION PROJECT

REPUBLIC OF MADAGASCAR

COUNTRY DEPARTMENT OCDEEAST REGION MARCH 2001

TABLE OF CONTENTS

PROJECT BRIEF, CURRENCIES AND MEASUREMENTES, LIST OF TABLES, LISTOF ANNEXES, LIST OF ABBREVIATIONS, BASIC DATA, PROJECT LOGICALFRAMEWORK, ANALYTICAL SUMMARY

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1. PROJECT GENESIS AND BACKGROUND 1

2. THE WATER AND SANITATION SECTOR 2

2.1 Water Resources 22.2 Sectoral Policies 22.3 Sectoral Organization and Constraints 22.4 Gender Equality 32.5 The Poverty Situation 42.6 Other Donors’ Intervention 4

3. THE RURAL POTABLE WATER SUPPLY ANDSANITATION SUB-SECTOR 4

3.1 Potable Water Supply 43.2 Sanitation, Health and Health Education 5

4. THE PROJECT 6

4.1 Project Design and Rationale 64.2 Project Zone and Beneficiaries 84.3 Strategic Context 104.4 Project Objective 104.5 Project Description 104.6 Impact on the Environment 124.7 Social Impact 134.8 Project Cost 134.9 Sources of Finance and Expenditure Schedule 14

5. PROJECT IMPLEMENTATION 15

5.1 Executing Agency 155.2 Institutional Provisions 155.3 Implementation and Supervision Schedule 165.4 Procurement Arrangements 175.5 Disbursement Provisions 185.6 Follow-up and Evaluation 185.7 Financial and Audit Reports 195.8 Assistance Coordination 19

TABLE OF CONTENTS (cont’d)

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6. PROJECT SUSTAINABILITY AND RISKS 19

6.1 Recurrent Expenditure 196.2 Project Sustainability 206.3 Major Risks and Accommodating Measures 20

7. PROJECT BENEFITS 20

7.1 Economic Analysis 207.2 Social Impact Analysis 217.3 Sensitivity Analysis 22

8. CONCLUSIONS AND RECOMMENDATION 22

8.1 Conclusions 228.2 Recommendations and Loan Conditions 22

This report was prepared by Mr. A. KIES (Principal Transport Economist), Mr. M.COULIBALY (Senior Health Officer) and two consultants following their mission toMadagascar in December 2000. Questions on the project should be addressed to oneof the authors or Mr. G. MBESHERUBUSA, Division Manager, OCDE.4 (Ext.4131).

AFRICAN DEVELOPMENT BANK01 BP 1387, ABIDJAN 01

Tel.: (225) 20 20 44 44Fax: (225) 20 21 77 53

Telex: 23717

PROJECT BRIEFDate: January 2001

The information given hereunder is intended to provide some guidance to prospectivesuppliers, contractors, consultants and all persons interested in the procurement of goods andservices for projects approved by the Board of Directors of the Bank Group. More detailedinformation may be obtained from the Borrower’s executing agency.

1. COUNTRY : Republic of Madagascar

2. PROJECT NAME : Grand Sud Rural Potable Water Supply and Sanitation

3. LOCATION : Finarantsoa and Tulear Provinces

4. BORROWER : Republic of Madagascar

5. EXECUTING AGENCY : Ministry of Energy and Mines/Directorate of WaterServices

6. PROJECT DESCRIPTION : The project comprises the following components:

i) Potable water supply;ii) Sanitation and drinking troughs;iii) Community health support;iv) Community mobilization and training;v) Institution building.

7. PROJECT COST : UA 8.92 million

i) Foreign exchange : UA 5.89 millionii) Local currency : UA 3.03 million

8. BANK GROUP FINANCING

ADF loan : UA 7.93 million

9. OTHER SOURCES OF FINANCE

Government of Madagascar : UA 0.90 millionBeneficiaries : UA 0.09 million

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10. LOAN APPROVAL DATE : April 2001

11. ESTIMATED START-UP DATEAND DURATION : November 2001/5 years

12. PROCUREMENT OF GOODS, WORKS AND SERVICES

- International competition for borehole works, pump supply and installation;

- Local competition for the supply of cement, iron and accessories needed forpreparing insecticide-treated bednets;

- Local shopping for the procurement of molds, computer hardware, hydro-geological,communication and office equipment;

- Recruitment on the basis of a short list of consultants for PIU management staff,community mobilization and training activities, borehole location and workssupervision, short-term project audit experts;

- Others: procurement of vehicles through IAPSO (Inter Agency Procurement ServiceOffice).

13. CONSULTANCY SERVICES REQUIRED

Consultancy services for:

- The project implementation unit;- Community mobilization and training;- Works location and supervision;- Ad-hoc support missions;- Project audit.

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CURRENCY EQUIVALENTS(December 2000)

National currency = Malagasy Franc (FMG)UA 1 = FMG 9213.85

WEIGHTS AND MEASUREMENTS

1 kilometre (km) = 0.62 mile1 metre (m) = 3.28 feet1 m3 = 1000 litresl/s/m = litre per second per metre of falling levelm3/d = cubic metre per dayl/d/inh. = litre per day per inhabitant

FINANCIAL YEAR

1 January - 31 December

LIST OF TABLES

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Table 4.1 : Project Cost by Component 13Table 4.2 : Project Cost by Expenditure Category and Source of Finance 14Table 4.3 : Sources of Finance 14Table 4.4 : Expenditure Schedule by Source of Finance 14Table 4.5 : Yearly Expenditure Schedule by Component 15Table 5.1 : Project Implementation Schedule 16Table 5.2 : Estimated Supervision Schedule 16Table 5.3 : Procurement of Goods and Services 17

LIST OF ANNEXES

Number of Pages

1 Country Map and Project Location 12 MEM Organization Chart 13 Environmental Assessment 34 Detailed Cost by Component 15 Provisional List of Goods and Service 16 Project Implementation Planning Manual 27 Project Implementation Schedule 18 Economic Analysis 19 Summary of Bank Operations 2

10 List of Project Documents 1

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LIST OF ABBREVIATIONS

ADB : African Development BankADF : African Development FundAIDS : Acquired Immune Deficiency SyndromeANDEA : National Water and Sanitation Authority

(Autorité nationale de l’eau et l’assainissement)CNEA : National Water and Sanitation Committee

(Comité national de l’eau et l’assainissement)CREA : Regional Water and Sanitation Committee

(Comité régional de l’eau et l’assainissement)CTM : Community Training and MobilizationDDS : Demand-Driven StrategyDEA : Directorate of Water Services (Direction de l’exploitation de l’eau)FMG : Malagasy FrancIAPSO : Inter Agency Procurement Service OfficeIEC : Information – Education - CommunicationINSTAT : National Institute of StatisticsJIRAMA : National Water and Electricity CorporationMEM : Ministry of Energy and MinesNGO : Non-Governmental OrganizationORSEA : Water and Sanitation Regulation Agency

(Organe de régulation de l’eau et l’assainissement)PIU : Project Implementation UnitPRSP : Poverty Reduction Strategy PaperPWS : Potable Water SupplyPWSS : Potable Water Supply and SanitationSSAP : Sectoral Strategy and Action PlanUA : Unit of AccountUNDP : United Nations Development ProgrammeUNICEF : United Nations Children’s FundWB : World BankWHO : World Health Organization

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MADAGASCARGRAND SUD RURAL PWSS PROJECTPROJECT LOGICAL FRAMEWORK

Narrative Description Objectively Verifiable Indicators Means of Verification Assumptions and Risks

1 Sectoral Aim:Considerably increase the water andsanitation cover, with a view to povertyreduction

Access to potable water and sanitationinfrastructure for 80% of the Malagasy populationby 2015

Mechanism to follow-up/evaluate Madagascar’sPoverty Reduction StrategyPaper (PRSP)

2. Project ObjectiveGuarantee sustainable potable watersupply and improved sanitation in Ihosy,Iakora, Ivohibe and Betroka

3. Achievements

3.1 Water demand by satisfied beneficiaries;

3.2 Implementation of a pilot sanitationprogramme;

3.3 Improvement of beneficiary healthindividually and collectively

3.4 Villagers trained and water pointcommittees set up

3.5 Artisan repairers trained

3.6 Maintenance of the managementstructure put in place

2.1 Access to potable water for 50% of dwellers of theproject zone by 2006;

2.2 Nearly 40% of the beneficiaries benefit fromimproved sanitation infrastructure by 2006;

2.3 The rate of water-borne diseases drops by 30% by2006.

3.1 700 positive boreholes equipped with hand pumpsdrilled by 2005, and a two-year stock of spare partsfor 700 boreholes available from 2005;

3.2 5000 latrines and 1500 drinking troughs built by2005;

3.3 The population of the impact zone (125 000)benefits from health education and sanitationactivities by 2005;

3.4 700 village committees trained on water pointmanagement and women make up at least half themembership of the committees;

3.5 About twenty artisan repairers trained;

3.6 A functional water point management structure putin place.

2.1 Annual reports of the Tulear andFianarantsoa regionaldirectorates;

2.2 Project review reports;2.3 Social management chart

published by INSTAT.

3.1 Project activity reports

3.2 Bank supervision reports

3.3 Project audit reports

3.4 Project review reports

3.5 Project completion report

3.6 Operations

2.1 Sectoral reforms successfullyconducted

2.2 Appropriate financing obtained

3.1 Project components implemented onschedule.

3.2 Same as 3.1.

3.3 Dwellers of the project zone notsignificantly affected by extremehealth constraints.

3.4 The borrower and the ADF considerthe reports acceptable.

3.5 Report recommendationsimplemented within the time frame.

3.6 Meeting minutes.

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Narrative Description Objectively Verifiable Indicators Means of Verification Assumptions and Risks

4. Activities

A. Potable water supply

B. Sanitation and watering troughs

C. Community health support

D. Community mobilization and training

E. Institution building

INPUT/RESOURCES

(in UA million)

Project Cost (in UA million)

F.E. L.C. Total

A 3.19 1.50 4.69B 0.77 0.14 0.91C 0.03 0.03 0.06D 0.34 0.43 0.77E 0.48 0.13 0.61

Contingen. 0.48 0.22 0.70Inflation 0.60 0.58 1.18

Total 5.89 3.03 8.92

Financing (in UA million)

F.E.. L.C. Total

ADF 5.89 2.04 7.93GVT -- 0.90 0.90Beneficiaries -- 0.09 0.09

Total 5.89 3.03 8.92

4.1 Progress reports and supervisionmissions

4.2 Scheduled evaluation

4.3 Accounts audited

4.4 Status of disbursements

4.1 Loan conditions fulfilled on time.

4.2 Adequate resources released to allowfor respect of the implementationschedule

4.3 Progress reports submitted on time topermit prompt decision-making.

4.4 Effective community mobilization.

4.5 Procurement procedures respected.

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ANALYTICAL SUMMARY

1. Project Genesis and Background

1.1 The Republic of Madagascar covers an area of 587 000 km2, divided into sixprovinces. Estimated at 15.1 million, its population grows by 3% yearly. Madagascar isamong the world’s poorest countries, notwithstanding what classification indicator is used.

1.2 In the potable water supply and sanitation (PWSS) sector, most Madagascans lackaccess to improved services. The situation is worse in the rural area where 87% and 75% ofthe population has no access to potable water and improved sanitation infrastructure,respectively. This state of affairs explains the prevalence of water-borne diseases and therecurring cholera epidemic.

1.3 Aware of the pressing need to improve these basic services, the Government initiatedan ambitious sectoral reform programme in 1994 through the Sectoral Strategy Action Plan(SSAP). By 2010, the aim of the strategy for the rural water and sanitation sector is to meet56% of the potable water supply needs of rural dwellers, compared with the current 13%, and60% of the sanitation needs against the current 25%.

1.4 Within the framework of efforts to develop the water and sanitation sector, donorsincluding UNICEF, the World Bank, the UNDP, Japanese and Swiss Cooperation, showedtheir preference for rural PWSS funding, especially in Madagascar’s Grand Sud region.

1.5 The Government of Madagascar forwarded a request to the Bank in April 2000 tofund a PWSS project in Fianarantsoa and Tulear provinces. The project reflects the realneeds of the dwellers in Madagascar’s South and is in sync with the Bank’s povertyreduction strategy. It also accords with the Country Strategy Paper on Madagascar whichgives priority to Bank operations in the rural area.

1.6 This report was prepared following a Bank appraisal mission to Madagascar inDecember 2000.

2. Loan Proposal

The ADF UA 7.93 million loan represents 89% of the project cost proposed for Bankfinancing.

3. Project Objectives

3.1 The sectoral objective is to considerably increase the cover of water and sanitationneeds with a view to poverty reduction.

3.2 The project objective is to sustainably supply potable water and enhanced sanitationservices in Ihosy, Iakora, Ivohibe and Betroka districts.

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4. Project Achievements

To meet its objectives, the project will focus on the following components:

i) Potable water supply;ii) Sanitation and drinking troughs;iii) Community health support;iv) Community mobilization and training;v) Institution building.

5. Project Cost

The project cost estimate net of taxes amounts to FMG 82.52 billion or UA 8.92million, comprising UA 5.89 million (66%) and UA 3.03 million (34%) in foreign exchangeand local currency, in that order.

6. Sources of Finance

The ADF, the Government of Madagascar and the beneficiary population will jointlyfinance the project. ADF contribution stands at UA 7.93 million or 89% of the total projectcost. The Government will provide UA 0.90 million. The beneficiaries will contribute inkind by providing local materials and labour for the construction of civil engineering works,all estimated at UA 0.09 million or 1% of the project cost.

7. Project Implementation

The Directorate of Water Services in the Ministry of Energy and Mines will be theproject executing agency. It will delegate implementation to a Unit set up for the purpose.The project will last five years.

8. Conclusion and Recommendations

8.1 Conclusion

The PWSS project in the rural areas of Madagascar’s Grand Sud is in line with thepolicy thrust outlined by the Government of Madagascar and falls within the framework ofthe Bank’s Country Strategy Paper for the 1999-2001 period which aims at povertyreduction. It is economically viable and socially justifiable. Its design took into accountlessons drawn from similar projects and current efforts to adopt the participatory approachwith regard to water and sanitation. From the environmental angle, it will have a minornegative impact.

8.2 Recommendations

It is recommended that a loan not exceeding UA 7.93 million from ADF resourcesbe granted the Government of the Republic of Madagascar to implement the projectdescribed in this report, subject to the conditions set forth in the loan agreement.

1. PROJECT GENESIS AND BACKGROUND

1.1 The Republic of Madagascar covers 587 000 km2 and is divided into six provinces orFaritany: Antananarivo, Toamasina, Antsiranana, Mahajanga, Fianarantsoa and Tulear. Itspopulation estimated at 15.1 million grows yearly by 3%. Compared with the African average(38.2%), the country’s urbanization rate is low (30.9%) but is growing annually by 5.5%.

1.2 In the potable water supply and sanitation sector, most of the population has no access toimproved services. The situation is worse in the rural areas where 87% and 75% lack access topotable water and improved sanitation infrastructure, respectively. Not surprisingly, water-bornediseases are prevalent and cholera epidemic recurrent, further worsening the situation in rural areaswhere malaria and acute respiratory infections are the major causes of mortality, especially ofinfants (76.8 per 1000 in 1998).

1.3 Aware of the pressing need to improve the supply of these basic services, theGovernment initiated an ambitious sectoral reform programme in 1994 through the SectoralStrategy Action Plan (SSAP). The sectoral policies and strategies have already been prepared andsectoral reorganization is nearing completion. The sectoral thrusts were confirmed in theGovernment’s Sectoral Policy Declaration (1998) and the Interim Poverty Reduction StrategyPaper (PRSP). By 2010, the aim of the strategy for the rural water and sanitation sector is to meet56% of the potable water supply needs of rural dwellers, compared with the current 13%, and 60%of the sanitation needs against the current 25%.

1.4 As part of efforts to develop the water and sanitation sector, donors including UNICEF,the World Bank, the UNDP, Japanese and Swiss Cooperation, showed their preference for ruralpotable water supply and sanitation funding, especially in Madagascar’s Grand Sud region.

1.5 The Bank received a request in April 2000 to finance the PWSS project in Fianarantsoaand Tulear Provinces in the Grand Sud. Previously, an identification mission visited Madagascarand in concert with the authorities, donors and NGOs mapped out the extent of potable water needsin the Grand Sud, the rationale behind the request and conditions for a successful project. Theappraisal mission which discussed with various partners, locally elected officials and dwellers ofthe project zone helped to identify the PWSS needs, in addition to assessing Government and thepeople’s support for the project.

1.6 The project translates the real needs of the population of Madagascar’s South and is insync with the Bank’s poverty reduction strategy. It also accords with the Country Strategy Paperon Madagascar which gives priority to Bank operations in the rural area with a view to increasingaccess to such basic health services as potable water supply and sanitation.

1.7 This document was prepared based on recommendations of the identification mission. Italso drew from several studies on potable water and sanitation conducted by donors operating inthe Grand Sud. The report also factored in experiences from ongoing or completed PWSS projects(see Section 2.6) contacted by the Bank’s appraisal mission to Madagascar in December 2000.

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2. THE WATER AND SANITATION SECTOR

2.1 Water Resources

2.1.1 Despite average rainfall estimated at 1632 mm, several Madagascar regions suffer watershortage attributable to climatic and geological differences. For most water courses, surface waterdistribution closely corresponds with the country’s climatic conditions and relief. The quantity andquality of ground water resources range from the coastal plains to the central high plateaux.Ground water resources are unevenly distributed throughout the country.

2.1.2 Several rivers flowing from their sources on the high plateaux westwards, southwardsand eastwards water the country. The North contrasts sharply from the South: rainfall in the formeris above 1500 mm yearly on the hills, with as much as 3300 at the summit. In the South, theclimate is arid with annual rainfall of between 350 mm and 600 mm. Given Madagascar’scontrasting ground water characteristics, flow from boreholes varies considerably depending on theregion (between 0.7 l/s/m and 35 l/s/m).

2.2 Sectoral Policies

2.2.1 Before 1991, Government strategy was based on a 1974 edict which, without any timeline, aimed at: (i) gradually extending the PWS infrastructure cover to the whole country inaccordance with the national economic and social development policies; (ii) finding all possiblemeans of putting water at the disposal of the nation and under the best possible conditions; and (iii)gradually standardizing the operating modalities. It is also worthy of note that the said policyhighlighted no cross-cutting issues with regard to the water sector. Although efforts by theauthorities helped to extend the urban water cover between 1974 and 1990 to stand at 70% in 1991,the rural area remained at a disadvantage (12% in 1991). Even in the urban area, other constraintsemerged, including the obsolescence and poor state of systems installed.

2.2.2 The sectoral reform in the wake of a process initiated in 1994 is based on the need forintegrated water resource management through the definition of an adequate legal framework,institutional provisions and accountability of all parties. The 1994 sectoral study within the SSAPframework enabled the Government to redefine the major water and sanitation thrusts. Thestrategic essence was set forth and confirmed in the Water and Sanitation Sectoral PolicyDeclaration that the Government approved in 1998. The strategy is based on seven key concepts:(i) institutional development and accountability of the parties; (ii) increased private sectorparticipation and State divestiture; (iii) balanced decentralization; (iv) community participation andmobilization; (v) training and professionalism; (vi) protection of water resources and theenvironment; and (vii) health information and education. The passing of Edict 98-029 establishingthe Water Code and the PRSP reaffirm these ideas.

2.2.3 The objectives set in the PRSP for 2015 include increasing the potable water access rateto 84% against the current 27%, and the sanitation cover to more than 80% compared with thecurrent 39%. In the urban area, there should be a 100% access to potable water and sanitation,against the current 83% and 62%, respectively. In the rural area, the potable water access would beincreased from 13% to 80%, and the sanitation cover from 25% to 80%.

2.3 Sectoral Organization and Constraints

2.3.1 The high number of operators and the dispersal and fragmentation of their operationsencumber sectoral development.

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2.3.2 Six ministerial departments share in water resource management. However, the keyactors remain the Ministry of Energy and Mines (MEN) through the Directorate of Water Services(Direction de l’Exploitation de l’Eau, DEA), which is responsible for implementing the potablewater supply policy and use of water resources for hydro-electricity purposes, and the Ministry ofTransport and Meteorology which manages surface water. To ensure the coordination, orientationand monitoring of water and sanitation-related activities, a National Water and SanitationCommittee (Comité National de l’Eau et de l’Assainissement, CNEA) was set up in 1989 andbrought under the supervision of the Ministry of Budget and Decentralization. The Committeeoperates nation-wide and is represented at the Faritany (provincial) level by Regional Water andSanitation Committees (Comités Régionaux de l’Eau et de l’Assainissement, CREA).

2.3.3 JIRAMA is the largest parastatal in the sector. Operating under the oversight of theMinistry of Energy and Mines, it was established in 1975 to help attain the national water andelectricity objectives. With regard to water, JIRAMA, on behalf of the State (which owns all itsshares), now manages 65 facilities comprising the initial infrastructure (resulting fromnationalization) and amenities in urban centres whose operations the Government transferred toJIRAMA in 1975.

2.3.4 JIRAMA developed within the ambiguity of two incompatible constraints: a socialmission, on the one hand, and profitability, on the other. That ambiguity, added to JIRAMA’sbicephalism (water and electricity) was at variance with the development of the sector and the needto mobilize resources.

2.3.5 Various studies demonstrated that the poor sectoral performance was attributable to theabsence of a clear-cut sectoral policy. In the face of that limitation, the Government of Madagascarfrom 1994 sought to review the institutional and regulatory framework. The reorganization of thesector pursuant to the Water Code and the Water Sectoral Policy Declaration led to theestablishment of new structures, including the Water and Sanitation Regulation Agency (Organe deRégulation du Secteur de l’Eau et l’Assainissement, ORSEA) and the National Water andSanitation Authority (Autorité Nationale de l’Eau et de l’Assainissement, ANDEA). ORSEA isresponsible for designing the water and sanitation tariff policy and ensuring its correct application.ANDEA’s responsibilities are considerable, of which: (i) planning the optimum use of thecountry’s water resources; (ii) establishing a legal and institutional structure that allows for thedevelopment of the sector within a decentralization and privatization framework; and (iii)coordinating activities of all sectoral operators, including development partners. The establishmentof these structures forms part of the ongoing JIRAMA privatization study.

2.3.6 Overall, the almost-completed reorganization only concerns the urban centre. The newstructures hardly have any impact on the rural area since they focus on the urban area.

2.4 Gender Equality

2.4.1 In Madagascar as in most African countries, women play a key role in the water supplyand sanitation sector. Although task-sharing varies depending on usage and custom in a givencommunity, women generally perform most of the work, be it water-fetching, its use for familyhygiene or sanitation infrastructure maintenance.

2.4.2 The situation is worse in the rural area where women are at times constrained to go longdistances on foot to fetch water from rivers, streams or unprotected wells. Such a labouriousactivity which takes a significant part of their time also impacts on women’s health. WithinMadagascar’s poverty context, the overall delicate health environment and household livingconditions amplify these risks.

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2.5 The Poverty Situation

2.5.1 Madagascar is among the world’s poorest countries, irrespective of what classificationindicator is used. According to the Human Development Index, it is ranked 147th out of 174countries; the country occupies the 168th position among 174 countries on the GDP scale. In 1999,the poverty threshold was estimated at US $ 106 per capita yearly1. Based on these considerations,nearly 67.3% of Madagascans are poor and 55% extremely so. In 1997, the relative gap betweenthe income of the average poor and the poverty threshold stood at 30%, demonstrating thedistressful situation in which the country’s poor find themselves.

2.5.2 Poverty is worse in the rural area where it affects 72% of the population, compared with51% in the urban area. Households whose head is principally involved in farming, especiallysmall-scale farming, are among the poorest. Poverty is at its worst in households headed bywomen.

2.5.3 Poverty varies among the country’s six Faritany (provinces). In terms of monetarypoverty, the Antananarivo Province is the least poor with a rate of 60.6% compared with 70% forFianarantsoa and Tulear provinces. The two provinces (called Madagascar’s Grand Sud) whichmakes up the project zone are the worst affected both in terms of monetary poverty and humandevelopment indicators.

2.6 Other Donors’ Intervention

Various donors have conducted operations within the SSAP context. The World Bankand the UNDP are assisting the Government in setting up the new policy and legal framework.While awaiting its finalization and due to the severe rural poverty in the Grand Sud, physicaloperations are concentrated in the region (Annex 1). Currently, there are several ongoing ruralPWS projects. For instance, 150 rural boreholes were drilled by the UNICEF in the country’sextreme South, another 150 are underway in the South-East coastal plains with UNDP support; 500boreholes funded by the World Bank will be drilled in the South, while Japanese cooperation isactive in the South-West. In addition, there are current simplified, gravitational or pumpingsystems under construction in several regions. These efforts notwithstanding, only 20% of therural population will have access to potable water by 2005.

3. THE RURAL POTABLE WATER SUPPLY AND SANITATION SUB-SECTOR

3.1 Potable Water Supply

3.1.1 As stated in the previous chapter, the MEM through the DEA oversees the potable watersupply sub-sector (Annex 2). The directorate defines policies, plans and conducts project studies,implementation and follow-up. Although it has 127 staff including 11 engineers, the DEA lacks:(i) qualified human resources; (ii) adequate operational procedures; and (iii) sufficient financialresources to fulfill its mission. Other public institutions and agencies from various ministries,especially the Ministries of Transport and Meteorology, Environment, Agriculture, Health,Scientific Research, Physical Development, Budget and Development of Autonomous Provinces,Water and Forest Resources, as well as the South Water Supply Operation also operate in thepotable water sub-sector.

1 National Institute of Statistics (INSTAT): Household Survey, 1999.

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3.1.2 Rural PWS is cause for concern. The service rate is very low. Nearly 87% of thepopulation obtains supply from sink holes and water courses of doubtful salubrity. Hence potablewater supply infrastructure in the rural area with a 13% population cover rate mostly comprisegravitational supply in the North and Central regions owing to the availability of sources, andsupply via pumping from wells and boreholes in the Southern regions. There are nearly 2144facilities, of which 1204 boreholes and wells and 940 simplified gravitational networks.

3.1.3 The precarious water infrastructure especially affects rural communes where thenetworks are poorly managed and maintained by local authorities whose technical and financialresources fall far short of the required capacity. Although the new sectoral decentralization andreform context favours increasing potable water management skills transfer to the provinces andcommunes, the effective appropriation of these new responsibilities is necessarily contingent on thestrengthening of the technical, financial and management capacity of those decentralized structures.

3.1.4 Within the purview of its new strategy, the Government of Madagascar prepared anambitious programme to rapidly develop infrastructure with a view to improving the ruralpopulation’s access to potable water. Hence in 2005, it plans to increase the number of boreholesand wells in the rural area to 2345, i.e. by nearly 100% compared with now. The total cost of theprogramme over the 2000-2005 period stands at FMG 425 billion. In view of projects (completed,ongoing or programmed) funded by development partners (UNICEF, Japanese Cooperation,UNDP, World Bank, ADF and NGOs), the objective is technically feasible.

3.2 Sanitation, Health and Health Education

3.2.1 As with the PWS sector, several actors share in sanitation management, hence theattenuation of performance. The Ministry of Town Planning and Development has implemented afew urban sanitation projects. The Ministry of Interior has oversight over communes directlyconcerned by the public sanitation service. Other departments (e.g. the Ministry of Health) managerural sanitation, while the Ministry of Energy and Mines puts together the waste water regulatorytexts.

Sanitation

3.2.2 The is no overall scale on which to evaluate the performance of the sanitation sub-sector.Related information remains fragmentary, gleaned from a few ad-hoc studies of limited scope.That situation is a reflection of the institutional, financial, technological and social weaknessesaffecting the sub-sector. Although communes are responsible for waste water evacuation,sanitation infrastructure managed by decentralized local authorities are, very much like potablewater supply works, obsolete, hardly operational and limited to downtown areas. The nationalwaste water sanitation service rate is estimated at 49% for urban areas and 5% in rural areas.Furthermore, several households lack human waste evacuation infrastructure (septic tanks,latrines). Only one of two households has an excreta evacuation facility, with pronounceddifferences between provinces: Antananarivo is the best equipped (86%) and Tulear the least with amodest 13.5%. That situation, coupled with the unsure water quality, is partly responsible fordiarrhoea and other water-borne diseases which are the main causes of morbidity and mortality inMadagascar.

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Health and Health Education

3.2.3 Although the Government restated its priority for the social sectors in 1991, the effectiveaccess rate to basic health services remains low (38%), with a marked contrast between the urban(81%) and rural areas (19%). In the rural area, 37.2% of the consultation facilities are located morethan ten kilometres from villages2. Cholera has become endemic in certain localities. Thus therecent cholera epidemic that struck Madagascar from March 13 to April 21, 1999 affected 29 128persons and caused 1 669 deaths. It spread to 53 districts, exposing nearly 8 million people.

3.2.4 The new National Health Policy approved in 1997 is based on the establishment ofhealth districts which henceforth will serve as the linchpin of the country’s health development3.That strategic option was confirmed in the 1998-2000 Health Master Plan which sought todecentralize the national health system by strengthening the health districts, improving drugavailability and introducing a cost recovery system. Thanks to the master plan, higher budgetaryallocations were set aside to gradually improve the resources assigned to the health sector. Theportion of public expenditure on health in the overall budget increased from 4.6% in 1994 to 9.19%in 19994, very close to the WHO-recommended level (10%).

3.2.5 The Government plans to focus its efforts on two aspects: revitalize infrastructure andimprove mother/child conditions. To attain the objective of reducing maternal mortality, the healthmechanism will provide family planning services alongside control of sexually transmitteddiseases, including AIDS, through intensified prevention and sensitization activities thanks toinformation and communication campaigns.

3.2.6 By 2015, Government estimates show that the number of units needed to cover thehousehold sanitation needs will stand at 1 437 274 in the rural area and 220 930 in the urban area.Although the infrastructure to be put in place may be based on simple and appropriate technology,their efficiency requires a high degree of health education, especially since the inadequatesanitation situation is also the result of socio-cultural resistance. Indeed, in some regions of thecountry in general and in the project zone in particular, certain customs are averse to the existenceof latrines. Therefore, information, education and communication (IEC) activities are necessary toget the population involved in all sanitation infrastructure development projects.

4. THE PROJECT

4.1 Project Design and Rationale

4.1.1 Lessons drawn from the “Review of Bank’s Potable Water and Sanitation Experience inAfrica”5, as well as experience gained during past or ongoing implementation of similar projects inMadagascar provided inspiration for the design of the project under consideration. Among thelessons, the key factors behind successful projects may be summarized as follows: (i) whenbeneficiaries were well informed and involved right from project start-up, they demonstrated theircommitment and actually participated: water point committees were formed, operating andmaintenance costs were covered with funds set up; (ii) works operation and maintenance weregenerally the weak link, compromising project sustainability. That situation has often been

2 Source: 1996-2000 Health Master Plan, and Interim Poverty Reduction Strategy Document (October 2000)3 Source: The district health system comprises a limited population living within a specific administrative unit, i.e. the Fivondronana.

Madagascar has 111 health districts.4 Source: INSTAT: Proportion of the Ministry of Health’s budget in the general budget.

5 See: “Synthesis Report on the Review of Bank Experience in Rural and Urban Water Supply and Sanitation Projects in RMCs”, OPEV, Dec.2000.

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attributable to a rather late concern about sustainablility. Based on the experience from otheroperations, the project will fund the training of artisan repairers and set up a spare partsdistributors’ network; (iii) it would also seem that only IEC activities conducted within the contextof long-term follow-up including sensitization, beneficiary organization and training of artisanhand pump repairers can guarantee the sustainability of achievements; (iv) it is necessary to takeinto account social and cultural considerations, e.g. customary usage in the selection of locationsfor boreholes and latrines; and (v) latrines should be located to target youths principally, since theyare more amenable to change their behaviour than adults.

4.1.2 The project under consideration is the Bank’s third operation in the sector inMadagascar. Its design drew inspiration from two previous experiences: the South PWS projectand the PWSS project feasibility and implementation study in eight centres. Given the DEA’sinstitutional weakness, the South PWS project fell far behind schedule, leading to its cancellationin 1996 (the study itself was completed five years behind schedule). To overcome the problem, thecurrent project has made provision for an “institution building” component.

4.1.3 The project concept is based on the beneficiary Demand-Driven Strategy (DDS)6. Fourfundamental principles underlie that approach: (i) water should be managed as an economic andsocial asset; (ii) water should be managed as close to the base as possible; (iii) there should be aglobal approach to the use of water resources; and (iv) women should play a key role in watermanagement. The DDS is a departure from previous approaches used in PWSS projects (supply-driven).

4.1.4 Such a participative approach has been successfully used in other ongoing projects in theregion. Beneficiaries were associated in all project stages: preparation, implementation andoperation. Through a training and community mobilization campaign (TCM), beneficiaries werefully informed about the possibilities open to them in terms of health, access to potable water andhygiene, as well as benefits to and obligations of each party. The people demonstrated theirsupport for the project through: (i) the establishment of water point committees to managebeneficiary participation; (ii) the collection of financial contributions and the establishment offunds for water point management, operational costs and maintenance under the supervision of thesaid committees; and (iii) an undertaking to contribute to works by providing available localproducts, labour, equipment protection and housing for the technicians during worksimplementation and follow-up.

4.1.5 The project is simple and proposes an appropriate technology which will be suit localdemand and the physical environment. The option presented (boreholes equipped with handpumps) finds justification as follows: (i) the beneficiaries have already shown their preference forsuch works during similar projects implemented in the region; (ii) boreholes are more suitable tothe physical characteristics of the zone where the few water resources available are unsuitable forother systems (e.g. gravitational); (iii) wells may not guarantee potable water since they draw theirsupply from the ground water table only, which is subject to potential pollution; (iv) for the depthsconcerned, borehole drilling is less onerous and the works easy to maintain; and (v) boreholes arean adequate technological option and do not rule out progress towards the construction of stand-pipes and mini-networks.

6The concept (SID) applied to the water and sanitation sector is a logical extension of the principles that the International Community adopted

in 1992 at Dublin. Social Intermediation (SI) is a process that facilitates the application of the Demand-Driven Approach (DDA) or theResponsible Demand Approach (RDA).

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4.1.6 The population’s access to modern water points will enhance the production capacity inthe zone (characterized by livestock farming). Hence, the project will build drinking troughs.Apart from potable water, the project also comprises a sanitation and health component. Latrineconstruction comes under the sanitation component, backed by training and communitymobilization activities. Problems related to cholera, bilharzia and malaria which are very acute inthe project zone require a health component. Furthermore, in view of the zone’s reputation as riskyin terms of sexually transmitted diseases, provision has been made to extend the Health/IECcomponent to cover HIV/AIDS prevention, in line with the Bank’s sectoral policy on HIV infectioncontrol.

4.1.7 The Government of Madagascar considers the development and integrated managementof water resources in the Grand Sud a national priority, falling naturally within the confines of thepoverty control programme. Hence several donors have implemented or are in the process ofimplementing similar projects in the South of the country where water needs are great. The ADFoperation which drew inspiration from those experiences, complements existing facilities in a zonewhere demand expressed has not yet been met.

4.2 Project Zone and Beneficiaries

General Description of the Project Zone

4.2.1 The project is located in Fianarantsoa and Tulear Provinces (known as Madagascar’sGrand Sud). The project zone straddles three districts (Ihosy, Iakora and Ivohibe) of FianarantsoaProvince and the Betroka District of Tulear Province. The four districts cover an area of 41 275km2 with a population of 300 000, 87% of them rural dwellers. On project completion, nearly 125000 people could directly benefit from its achievements. In all, 44 communes with more than 1050villages may potentially participate in the project.

Physical Characteristics and Natural Resources

4.2.2 The region’s climate is hot and arid, with annual rainfall ranging from 500 mm to 1200mm and temperature averaging 240C. Given the low rainfall level and arid climate, surface waterreserves are limited. There is little sustainable flow and most rivers hardly run at all during the dryseason which can last eight months of one year. The few surface water resources easily accessibleto people and animals are highly polluted by organic matter.

4.2.3 As earlier stated (paragraph 2.1.2), water resources in the South, including the projectzone, are less abundant than in other regions of Madagascar. Runoff water refurbishes 11% to 13%of the ground water. Pumping tests conducted in the zone showed good permeability value (7m/d),although the storage capacity is only average (0.017 for the storage coefficient, reflecting the watercontent percentage in the ground water tables). All the data favour the tapping of the ground watertable with low-flow equipment, e.g. boreholes equipped with hand pumps. The potential dailyresources are generally equal to or above 7.5 m3/d, considered enough to supply at least 500persons per water point for a daily consumption of 15l/d/inh.

4.2.4 The ground water quality from several wells in the project zone was tested. The mineralsalt content is generally below 500 mg/l, well below the WHO authorized level and demonstratingthat the water is soft indeed. In the light of its temperature and chemical composition, the saidwater is strongly linked with rainfall, as a result of which the replenishment could reach 6.25% ofexisting reserves. Furthermore, chemical analyses show that the water need not be treated beforehuman use. Hence the resource quantity and quality are acceptable for PWS in villages in theproject zone.

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Socio-Economic Activities

4.2.5 The four districts in the project zone share similar socio-economic activities. Food(paddy, maize, cassava, sweet potato, pepper) and cash crops (coffee, clove, tobacco, cotton) arecultivated. In particular, the zone boasts vast ranches for extensive cattle rearing.

4.2.6 Dwellers of the project zone are mostly livestock farmers. Hence, 83.3% are involved inagriculture (livestock farming, farming, fishing) compared with the national average of 79.3%. Ithas been noted that households with heads whose principal activity is agriculture are the country’spoorest, especially small-scale farmers. In the project zone, the poverty ratio is 71.5%, against anational average of 67.3%. Average annual per capita expenditure is estimated at FMG 495 000,compared with a national average of FMG 599 000.

4.2.7 Zebu, sheep and goat rearing is the principal activity. However, livestock farming isseen more as a sign of wealth, consideration, social and economic success. The nearly-mysticalperception which considers the sale of livestock as a sign of impoverishment gives rise to acontemplative kind of livestock farming. Sale of livestock to meet food or health care needs onlycomes into play during extreme emergency. The IEC could contribute to significantly change suchmentality.

4.2.8 The precarious health conditions are mostly attributable to poor feeding and hygiene.The steadily critical PWS situation is the cause of several health problems facing the population7.For its water supply, the population is highly dependent on surface water sources where mosquitoes(disease vectors) also breed. Hence suspected malaria, acute respiratory infections and diarrheaaccount for 63% of consultations in the project zone. Sexually transmitted diseases come fifth onthe list. These figures only reflect declared cases. Although the pathology level is very high, thereare only few under-equipped and poorly supervised health facilities. Even though the populationdensity is low in the project zone (average of 6.7 inh./km2), there are only 1.5 doctors per 10 000inhabitants, with major disparities between districts. Nearly 25% of the basic health centres are notoperational. Furthermore, several community pharmacies are closed due to lack of drug suppliesand high management costs. In addition, the overall school infrastructure is inadequate, resultingin a low enrollment rate (barely 60%, against a national average of 91.6%).

Current Water Supply and Sanitation System

4.2.9 The most frequent water supply (75% of cases) involves daily digging of holes on riversand. Ponds and rivers continue to be used for body hygiene and washing of utensils and laundry.Furthermore, water points are generally located between 0.4 km and 10 km from villages. Currentconsumption per household stands at nearly 9 litres per person.

4.2.10 With regard to sanitation, available statistics show no figures for the regions anddistricts. However, the two provinces which the project straddles (Fianarantsoa and Tulear) areconsidered as having the highest number of households without human waste evacuation facilities.Rural sanitation, already hampered due to water shortage, is further complicated by the refusal(cultural taboo) to build latrines within compounds. In view of the current practice of defecating inopen spaces, especially on high ground, rains during the wet season frequently wash human wasteinto streams from where humans and animals draw water, leading to recurrent health problems.The situation is as precarious in most health centres and schools since those facilities have noaccess to potable water and sanitation infrastructure. Under those conditions, it is easily

7For instance, of the 17 communes in Ihosy district, only one has a modern water point; according to our interlocutors, cholera and bilharzia have

become endemic. Source: Discussions between the ADB mission with the authorities, locally elected officials and technicians during theappraisal mission, 1-17 December, 2000.

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understandable why the water and sanitation infrastructure level in the project zone is far lower(7.5%) than the national average for rural areas (13% for water and 25% for sanitation).

4.3 Strategic Context

4.3.1 The national water priority in the Grand Sud as set forth by the Government falls withinthe context of the poverty reduction programme which advocates people-focused developmentactivities through the provision of basic social services and improvement of the living standard.The issues surrounding water in the project zone are three-fold: the PWSS project will contributesignificantly to increasing productivity, attenuating food shortages and community healthproblems. International commitments by the Government to reduce poverty to 45% by 2015 iscontingent on access to basic health care, generalization of universal education, and increase in thewater and sanitation cover rate. The project which falls within the framework of those strategicoptions is equally in sync with the Bank’s operating strategy (1999-2001) whose focus is the ruralarea where poverty is highest and most acute.

4.3.2 To accompany the decentralization process, the PWSS organization is based on theprinciple of shared service by all the communes. The Government defines the national policy, thecommunes own the works while public or private operators develop and/or manage and maintainthe systems. A new cost recovery strategy will be put in place. Lastly, the effective participationof all, especially women, will be encouraged through the establishment of decision-makingmechanisms.

4.4 Project Objective

The aim of the project is to sustainably provide potable water and improved sanitation inIhosy, Iakora, Ivohibe and Betroka districts. Located in Madagascar’s Grand Sud where water is apriority, the project will contribute to the fulfillment of the intermediate objectives of the povertycontrol strategy prepared by the Government, the purpose of which is to considerably increase thewater and sanitation cover in the medium and long term.

4.5 Project Description

4.5.1 The project involves the drilling of 700 boreholes equipped with hand pumps,construction of 1050 drinking troughs and 5000 latrines, hygiene and health. It also containsprovisions for accommodating measures to sustain project achievements. The major componentsinclude:

i) Potable water supply;ii) Sanitation and drinking troughs;iii) Community health support;iv) Community mobilization and training;v) Institution building.

Potable Water Supply

4.5.2 The component involves input needed to drill 700 positive boreholes equipped with handpumps. It will require various activities, including the location of future boreholes and workssupervision, borehole drilling, pump supply and installation.

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Location and Supervision

4.5.3 A consultant will be recruited to oversee the location of boreholes and supervise works.In that regard, he will provide the following services:

i) Hydro-geological survey and photo-interpretation of 700 positive wells on thebase;

ii) Geo-physical prospection;

iii) Works supervision and monitoring: boreholes, development and pumping tests,chemical analyses of water samples, pump installation, construction of super-structures, latrines and drinking troughs.

Borehole Drilling and Equipment

4.5.4 There are plans under the project to drill 700 positive boreholes on the base, i.e.boreholes with flow equal to or above 1m3/h. Average borehole depth will be about 10 m. Theywill be piped with PVC tubes averaging about 10 m, equipped with a filtering column. In order toguarantee clean surroundings around the water point, a mud slab will be built around the borehole.Certain surveys that revealed spots (minimum of six) where resources are not enough to support aborehole will be equipped with piezometres. Three borehole workshops will be required to carryout all works within 36 months.

Pump Supply and Installation

4.5.5 The 700 boreholes will be equipped with hand pumps. The purpose of the component isto supply and install pumps, in addition to supplying spare parts for two years, to be injected intothe market as the need arises. The project will train “maintenance attendants” appointed by thevillagers, as well as artisan repairers. Selection of the pump type will be conducted incollaboration with the beneficiaries, depending mostly on the technical viability and simplicity ofmaintenance operations, enabling the villagers and artisan repairers to cater for routinemaintenance and major repairs.

Sanitation and Drinking Troughs

4.5.6 This component is to improve the health conditions of dwellers of the project zone andserve livestock. The latrines and drinking troughs will be built exclusively at villagers’ request, inthe wake of information and sensitization campaigns. The existing structures in the project zone(schools, health centres, etc.) will be the priority sites for the construction of latrines. Plans havebeen made to build 5000 latrines and 1050 drinking troughs. The number could increasedepending on the demand. The project will supply cement and iron needed to construct the worksin question. Moreover, the project will put molds at the disposal of artisans/masons, as well asassistance through training.

Community Health Support

4.5.7 The project zone is malaria and bilharzia-endemic, and records frequent bouts of choleraand acute respiratory infections. These diseases are linked with insalubrity and lack of hygiene.Therefore, the project will distribute insecticide-treated bednets and through the CMT promotecommunicable disease (infectious and parasitic) prevention methods. The prevention andreduction of endemo-epidemic communicable diseases will involve breaking the transmission

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chain through adequate prevention measures. Specific HIV/AIDS/STD, malaria, diarrheic andacute respiratory infection control programmes will be associated with the preparation of CMTcomponents in their respective fields. The project will fund the supply of input and train womenon the preparation of insecticide-treated bednets.

Community Mobilization and Training

4.5.8 Villager mobilization and participation are primordial for project success. Hence it hasa key community mobilization and training (CMT) component. Conducted by a consultant, theaim of the component is to: (i) enable the beneficiary communities to make their request andforward it to the parties; (ii) give the beneficiaries the possibility of taking initiative in buildingtheir facilities and bearing responsibility for running and maintaining them; and (iii) contributingmodestly to the capital expenditure, mostly in kind.

4.5.9 Through that approach, every effort will be made to obtain women’s opinion. Accountwill be taken of the way in which women view and live with water-related problems, watermanagement and its final use, hygienic practices and sanitation service/equipment, before anyproject decision is made.

Institution Building

Project Implementation Unit

4.5.10 The DEA will be the project executing agency. Constraints facing the DEA wereidentified in paragraph 3.1.1. To palliate those difficulties and attain project objectives, a projectimplementation unit (PIU) will be set up. The PIU will be based at Fianarantsoa and comprise theproject manager (appointed by the DEA), a hydro-geologist, a CMT expert, an accountant andsupport staff (driver, guard, secretary). Depending on need, the unit will be provided with short-term staff and equipment indispensable for project management, technical and financial follow-up:3 all-terrain vehicles, 4 PCs with printers, a kit to measure water level and quality, officeequipment and means of communication.

Project Audit

4.5.11 An independent consultant will audit the project accounts yearly. Four missions areplanned.

4.6 Impact on the Environment

4.6.1 The project is classified under Category II according to the Bank’s environmentalguidelines. By its very nature, implementation will require small-scale works using technicalmethods adapted to the zone and capitalizing on the experiences and achievements of similarprojects. Detailed information on the project impact and accommodating measure are given inAnnex 3. The project zone and its physical characteristics are described in paragraph 4.2.

4.6.2 The accommodating measures mainly concerning the construction of mud slabs, soak-aways, protection walls and relevant CMT activities were integrated into the project cost. Thebeneficiaries will also be associated through bi-annual meetings of the consultative committees andfour seminars.

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4.7 Social Impact

4.7.1 The project will bring about significant changes by improving the living standard ofpeople dwelling in the impact zone and contributing to poverty reduction. Adequate andsustainable potable water supply, the convenience offered by improved sanitation facilitiescoupled with the decline in water-borne diseases will have a positive effect on beneficiaryproductivity and health condition.

4.7.2 Children who in particular are exposed to water-borne diseases will benefit from theproject’s health impact. It has been noted that 40% of consultations in the project zone are due todiarrheic diseases affecting children aged 0 to 4 years. The acute vulnerability of that age groupis intrinsically linked with the water issue.

4.7.3 The presence of a modern water point is a major asset to the village community. Thereduction in the time used in fetching water enables women to focus their attention on moreprofitable ventures, especially income-generating activities. Furthermore, women’s participationin the management committee gives them greater responsibility and enhances their well-being.Lastly, women’s active participation also contributes to changing men’s mentality andstrengthening local community dynamics.

4.8 Project Cost

4.8.1 The project cost estimate, exclusive of taxes, amounts to FMG 82.25 billion or UA 8.92million, of which UA 5.89 million (66%) and UA 3.03 million (34%) in foreign exchange and localcurrency, respectively.

4.8.2 The works estimate was arrived at using recent bid unit prices for similar projects andquantities estimated by the appraisal mission. A 10% provision for physical contingencies wasfactored into the cost estimate. Based on the local market trends, a 3% and 6% provision was madefor inflation in foreign exchange and local currency, respectively. Annexes 4 and 5 show a detailedcost breakdown by component and category, both of which are summarized in Tables 4.1 and 4.2below.

Table 4.1Project Cost by Component

FMG(billion)

UA(million)

Components

F.E. L.C. Total F.E. L.C. Total

Potable water supply 29.43 13.77 43.20 3.19 1.50 4.69

Sanitation and drinking troughs 7,14 1.26 8.40 0.77 0.14 0.91

Community health support 0,28 0.28 0.56 0.03 0.03 0.06

Community mobilization and training 3,13 3.96 7.09 0.34 0.43 0.77

Institutional support 4,45 1.19 5.64 0.48 0.13 0.61

Base cost 44.43 20.46 64.89 4.81 2.23 7.04Contingencies 4.44 2.05 6. 49 0.48 0.22 0.70

Inflation 5.53 5.34 10.87 0.60 0.58 1.18

Total 54.40 27.85 82.25 5.89 3.03 8.92

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Table 4.2Project Cost by Expenditure Category and Sources of Finance

FMG(billion)

UA(million)

Sources (in UA)Categories

F.E. L.C. Total F.E. L.C. Total ADF Gvt Benef. Total

1.Civil engineering works 22.81 9.72 32.53 2.48 1.06 3.54 3.11 0.38 0.05 3.542. Goods 8.46 1.64 10.10 0.90 0.18 1.08 0.97 0.11 - 1.083. Consultancy services 11.36 8.87 20.23 1.23 0.96 2.19 1.97 0.22 - 2.194. PIU operations 1.80 0.23 2.03 0.20 0.03 0.23 0.21 0.01 0.01 0.23Base cost 44.43 20.46 64.89 4.81 2.23 7.04 6.26 0.72 0.06 7.04Contingencies 4.44 2.05 6.49 0.48 0.22 0.70 0.62 0.07 0.01 0.70Inflation 5.53 5.34 10.87 0.60 0.58 1.18 1.05 0.11 0.02 1.18

Total 54.40 27.85 82.25 5.89 3.03 8.92 7.93 0.90 0.09 8.92

4.9 Sources of Finance and Expenditure Schedule

4.9.1 The ADF, the Government of Madagascar and the beneficiaries will jointly finance theproject. As shown in Table 4.3 below, the ADF contribution will amount to UA 7.93 million or89% of the total project cost. The amount will fund all the foreign exchange and 67.3% of the localcurrency cost. Government contribution of UA 0.90 million will cover the remainder of the localcurrency cost (29.7%). The beneficiaries will supply local materials and labour for theconstruction of civil engineering works (fence around boreholes, soak-away, latrines and drinkingtroughs) all worth an estimated UA 0.09 million or 1% of the project cost.

4.9.2 ADF participation in financing the local currency cost is justified by: (i) the expectedproject impact on poverty reduction; (ii) the high proportion of the local currency cost (34%) owingto the nature of works; (iii) the weak gross internal savings compared with investment needs; and(iv) other donors’ support to Government’s economic reform programme.

Table 4.3Sources of Finance (in UA million)

Source F.E. L.C. Total %

ADF 5.89 2.04 7.93 89Gvt. of Madagascar ----- 0.90 0.90 10Beneficiaries ----- 0.09 0.09 1Total 5.89 3.03 8.92 100

Table 4.4Expenditure Schedule by Source of Finance (in UA million)

Source 2001 2002 2003 2004 2005 2006 Total

ADF 0.16 0.45 2.14 2.42 2.00 0.76 7.93Gvt. of Madagascar 0.01 0.07 0.24 0.26 0.22 0.10 0.90Beneficiaries ----- ----- 0.03 0.03 0.03 ----- 0.09Total 0.17 0.52 2.41 2.71 2.25 0.86 8.92

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Table 4.5Yearly Expenditure Schedule by Component (in UA million)

Components 2001 2002 2003 2004 2005 2006 Total

Potable water supply 0.18 1.76 2.08 1.61 0.33 5.96Sanitation and drinking trough 0.32 0.28 0.30 0.27 1.17Community health support 0.05 0.02 0.07Community mobilization and training 0.26 0.17 0.20 0.21 0.12 0.96Institution building 0.17 0.08 0.11 0.13 0.13 0.14 0.76

Total 0.17 0.52 2.41 2.71 2.25 0.86 8.92

5. PROJECT IMPLEMENTATION

5.1 Executing Agency

The Directorate of Water and Sanitation (DEA) in the Ministry of Energy and Mines willbe the project executing agency. The technical and financial constraints facing the DEA as statedin Chapter 3 underlie the recommended option to set up a unit (PIU) which will implement theproject by delegation.

5.2 Institutional Provisions

5.2.1 The DEA will appoint a project manager to head the PIU. The project will fund the PIU,with headquarters at Fianarantsoa. The Unit will oversee the project’s routine management andcoordinate its activities. Under the direction of the project manager, the Unit will work in closecollaboration with the regional water technical directorates in Fianarantsoa and Tulear provinces.In view of the importance of the health and water quality control component, the inter-regionalhealth development directorates in both provinces will assist the project. The said directorates haveregional sanitation and health engineering brigades. Appointment of the project manager whoseexperience and qualification the ADF would have considered acceptable is a condition precedent tofirst disbursement.

5.2.2 At the village level, the consultant in charge of community mobilization and training willsupervise the water points management committee. While maintaining their autonomy, the villagecommittees will be assisted in setting up a structure to strengthen the negotiating powers of thebeneficiaries and sustain project achievements. The structure in question will comprise 4 to 5members drawn from the water point management committee, with an obvious interest insustaining the works. Although appointment will be by election, women will be strongly soughtafter and encouraged to participate, with a view to attaining the objective of having them make upat least 50% of committee membership. Mechanisms to provide incentives for the private sectorwill also be introduced via the establishment of a network of actors (spare part suppliers, resellersand artisan repairers).

5.2.3 A project consultative steering committee will be established to strengthen consultationand provide follow-up. The committee will comprise representatives from the central and regionaladministration of Fianarantsoa and Tulear provinces, locally elected officials and beneficiaries(through the association of water point committees). The steering committee will meet in twoordinary sessions yearly to review project progress and constraints, and facilitate coordinationbetween various operators. The undertaking to set up a consultative steering committee is acondition precedent to first disbursement. Its establishment not later than December 2002 shall beanother loan condition. The project also makes provision for four seminars to sensitize variousactors on the set objectives, highlight performance and evaluate activities undertaken.

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5.2.4 Details of the project implementation process will be set forth in the implementationmanual that a consulting expert will prepare during the first phase of the project, under PIUsupervision. Annex 6 shows the manual outline.

5.3 Implementation and Supervision Schedule

5.3.1 Project implementation will span five years, counting from the establishment of the PIUscheduled for November 2001. The detailed implementation schedule is given in Annex 7.

Table 5.1Project Implementation Schedule

Activities Agency Responsible Date

Loan approval ADF April 2001Entry into force ADF/MDG September 2001

PIU- Approval of the short list- Activities begin- Activities end

ADF/MEMMEM/PIUMEM

July 2001November 2001December 2006

Community mobilization and training- Approval of the bidding document- Activities begin- Activities end

ADF/PIUPIUPIU

January 2002April 2002June 2006

Works implementation and supervision- Approval of bidding documents- Activities begin- Activities end

ADF/PIUPIUPIU

April 2002October 2002March 2006

Pump supply and installation- Approval of bidding documents- Activities begin- Activities end

ADF/PIUPIUPIU

April 2002December 2002December 2005

Support to community health- Start of procurements- End of procurements

ADF/PIUPIU

January 2003March 2004

Boreholes- Approval of bidding documents- Activities begin- Activities end

ADFPIUPIU

April 2002January 2003December 2005

Project completion PIU/MEM/ADF December 2006

5.3.2 Right from loan approval, the Bank will conduct a project start-up mission. Thereafter,it will undertake two supervision missions yearly. Moreover, provision has been made for a mid-term review during the project’s third year. The projected mission schedule is given below:

Table 5.2Projected Supervision Schedule

Date/Month/Year Activities Required Profile Duration(m/weeks)

05/ 2001 Start-up mission Project officer/FLAD/FPRU/AUDIT 4 x 2

2 and 10/ 2002 Supervision mission Project officer/consultant 4 x 2

2 / 2003 Supervision mission Project officer/consultant 2 x 210 / 2003 Mid-term review mission Project officer/2 consultants 3 x 22 and 10/ 2004 Supervision mission Project officer/consultant 4 x 22 and 10/2005 Supervision mission Project officer/consultant 4 x 2

2 et 10/ 2006 Supervision mission Project officer/consultant 4 x 2

3/2007 PCR preparation mission Project officer/hydro-geological engineer/poverty reduction expert

3 x 2

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5.4 Procurement Arrangements

5.4.1 The procurement arrangements are summarized on the general procurement tablebelow. All ADF-funded goods, works and services shall be procured in conformity with ADF rulesof procedure for the procurement of goods and works, or ADF rules of procedure for the use ofconsultants, as the case may be, using the appropriate standard Bank dossiers.

Table 5.3Procurement of Goods and Services (in UA million)

Categories ICB LCB Others Short List Total1.CIVIL ENGINEERING WORKS1.1 Boreholes1.2 Pump supply and installation

3.71 (3.29)0.77 (0.64)

3.71 (3.29)0.77 (0.64)

2.GOODS2.1 Cement/iron2.2 Molds2.3 Computer hardware2.4 Vehicles2.5 Hydro-geological equipment2.6 Communication equipment2.7 Office equipment2.8 Insecticide-treated bednets

1.14 (1.02)

0.08 (0.07)

0.01 (0.01)0.01 (0.01)0.10 (0.09)0.01 (0.01)0.01 (0.01)0.01 (0.01)

1.14 (1.02)0.01 (0.01)0.01 (0.01)0.10 (0.09)0.01 (0.01)0.01 (0.01)0.01 (0.01)0.08 (0.07)

3.CONSULTANCY SERVICES3.1 Community mobilization and training3.2 Implementation and supervision3.3 Audit3.4 PIU management staff3.5 Short-term experts

0.98 (0.89)1.47 (1.32)0.10 (0.10)0.17 (0.15)0.06 (0.05)

0.98 (0.89)1.47 (1.32)0.10 (0.10)0.17 (0.15)0.06 (0.05)

4. PIU OPERATIONS4.1 Operating expenses 0.29 (0.26) 0.29 (0.26)

Total 4.48 (3.93) 1.22 (1.09) 0.44 (0.40) 2.78 (2.51) 8.92 (7.93)

Figures highlighted and in brackets represent amounts financed by the ADF under each category.

Civil Engineering Works

5.4.2 Civil engineering works for boreholes amounting to UA 3.71 million and the supply andinstallation of pumps for UA 0.77 million will be procured through international competition. Twoseparate contracts will be awarded following the bidding.

Goods

5.4.3 Cement and iron supplies worth UA 1.14 million for building latrines and drinkingtroughs (see paragraph 4.5.6) will be procured in several packages of between UA 50 000 and UA100 000, spread over three years. That, in addition to procurement of products and accessories formaking insecticide-treated bednets (UA 0.08 million), will be through local competition. Theprocedure is justifiable in view of the existence of enough qualified local suppliers to guaranteecompetition. Vehicles will be procured through IAPSO (Inter Agency Procurement ServiceOffice).

5.4.4 Molds (UA 0.01 million), computer hardware (UA 0.01 million), office equipment (UA0.01 million), hydro-geological equipment (UA 0.01 million) and communication equipment (UA0.01 million) will be procured through local shopping. Since the packages involve small amounts,payments will be made from the PIU’s special operating account.

18

Consultancy Services

5.4.5 Consultancy services will be procured in line with Bank rules of procedure for the use ofconsultants. All consultants will be recruited on the basis of a short list. In connection withborehole drilling and supervision services, the short list will be preceded by a pre-selection sincethe contract amount is above UA 1 million. The same procedure shall apply in connection withconsultancy for community mobilization and training on account of the expected complexity ofservices. Consultancy selection will be based on technical evaluation, taking into account thefinancial proposals.

PIU Operations

5.4.6 Procurements for running the PIU will be through local shopping (fuel, office suppliesand consumables) or direct negotiation (vehicle insurance and maintenance, equipment,telephone/fax, mail stamping, etc.). The project will pay an allowance to masons during theirtraining. However, during the construction of latrines and drinking troughs, villages that requestsuch facilities will pay the fees charged by the masons.

General Procurement Information Note

5.4.7 The text of the general procurement information note was discussed with the DEA andwill be submitted for publication in Development Business following the loan appraisal.

Review Procedure

5.4.8 The following documents will be submitted to the Fund for review and appraisal beforepublication:

i) Bidding documents or Letters of Invitation to consultants;

ii) Bid analysis reports from firms or suppliers, or proposals from consultantscomprising recommendations on contract award;

iii) Draft contracts in case of amendments to drafts contained in the biddingdocuments or letters of invitation to consultants.

5.5 Disbursement Provisions

The direct disbursement method will be used for works, consultancy services andprocurement of goods. Funds for PIU operations will be paid into a special account. The accountwill only be used for project purposes. The borrower will repay all ineligible expenditure beforethe Bank replenishes the account. The account will receive ADF contributions for PIU operations.Replenishment will be subject to proof by the borrower of use of at least 50% of the fundspreviously disbursed. The opening of the account in a commercial bank acceptable to the ADFshall be one of the conditions precedent to disbursement to the PIU.

5.6 Follow-up and Evaluation

5.6.1 The PIU will monitor, supervise and coordinate project components. Quarterly activityreports prepared in line with the existing Bank format will be forwarded to the headquarters of theexecuting agency. Furthermore, the Bank will follow-up and supervise the project via two annualmissions.

19

5.6.2 The Unit will be charged with preparing disbursement requests and presenting justifyingdocuments. The Unit accountant will keep the project accounts. An independent consultant willaudit the project yearly and forward his report to the Bank. The audit reports will be sent to theBank within six months of closure of the financial year.

5.6.3 A consultative committee will be set up for project implementation follow-up. TheCommittee whose composition is outlined in paragraph 5.2.3 will monitor the status of variouscomponents. Moreover, provision has been made for the organization of 4 seminars during theproject cycle.

5.6.4 The Unit will prepare a project follow-up indicator mechanism comprising a preliminarybase evaluation through a sampling of villages, and annual surveys to assess project impact on thebeneficiaries. A mid-term evaluation of all project components will be conducted during the thirdyear. The results of the review will indicate what activities to pursue and allow for necessaryadjustments in order to attain the set objectives. Within six months of project completion, the Unitwill prepare a completion report using the Bank’s existing format.

5.7 Financial and Audit Reports

The accountant recruited for the project will, in concert with the Project Manager, keepaccounts and financial statements in accordance with Bank procedures. The project accounts willbe audited yearly by an independent auditing firm. The loan resources will be used to fund theauditing.

5.8 Assistance Coordination

5.8.1 As stated in Chapters 2 and 3, various ministerial departments, agencies and localauthorities jointly manage the PWSS sector. That situation makes DEA’s coordination difficult.However, the establishment of ANDEA within the new reform framework will, at the central level,provide development partners with a single interlocutor for fund mobilization and allocation to thewater and sanitation sector. The Government is in the process of reviewing the enforcement edictsestablishing ANDEA. Another loan condition is that the Government should approve the edicts notlater than 31 December 2002.

5.8.2 Despite the current institutional weaknesses, donors will maintain close contacts with aview to: (i) supporting ongoing reforms; (ii) ensuring optimum use of resources to avoidduplication; and (iii) concentrating activities in areas affected by acute poverty.

6. PROJECT SUSTAINABILITY AND RISKS

6.1 Recurrent Expenditure

6.1.1 Retrospective studies conducted in the project zone permitted an evaluation of therecurrent charges under real operating conditions. The charges are considered low and accessibleto households. Each borehole is designed to supply about thirty households, corresponding to thesize of an average village (150 inhabitants) in the project zone.

6.1.2 The recurrent charges were calculated on the basis of expenditure on works operation andmaintenance, and stand at FMG 312 000 per borehole per annum or about 1.7% of the householdincome. On reviewing current practices in similar projects in the Grand Sud, the said amount iscompatible with the people’s financial possibilities and can be easily covered by village funds.

20

Such funds are managed by the water point committees and financed with contributions from thebeneficiaries. The establishment of water point committees, village funds and an undertaking tocontribute to works are conditions for cooperation between the beneficiaries and the project.

6.2 Project Sustainability

6.2.1 By its very concept which is based on a demand-driven approach, and drawing lessonsfrom similar projects, the project was designed to be sustainable. The beneficiaries will be fullyresponsible for operating and maintaining the water points, as well as contributing to the costrecovery through the establishment of village funds.

6.2.2 To sustain health infrastructure and assets, intensive IEC campaigns will be accompaniedwith construction and operation of works meant to win beneficiary support. In order to win theirfull support, the strategy will seek to inform the beneficiaries on the health and hygienepossibilities open to them, time availability, environmental preservation and development.

6.2.3 Capacity building will be of benefit to the village water point committees. Thecommittees will be organized and trained to manage and take decisions in connection with waterand sanitation, operation and maintenance and social intermediation with regard to healtheducation. Women will form the majority of committee membership, given the role they play insupplying water to households. For latrine construction, artisans will be trained and given moldswith which to work. The health component will draw support from community health officers whowill promote insecticide-treated bednets and assist those in charge of village health committees.

6.3 Major Risks and Accommodating Measures

6.3.1 The key project risk concerns the sustainability of project achievements. As with similarprojects in the same area, the risk could be accommodated through the social mobilization ofbeneficiaries to enable them to participate in all project phases. Another risk factor is inadequateimplementation, attributable to the weak institutional capacity leading to failure to respect theimplementation schedule. The Unit members will devote all their energy to the project. Animplementation manual will be prepared and training provided right from project start up toimprove the PIU capacity.

6.3.2 The CTM components also constitute a risk. The sensitization campaigns are neitherproperly designed nor adequately implemented. That risk will be mitigated through regularsupervision by project experts and ad hoc support missions by consultants.

7. PROJECT BENEFITS

7.1 Economic Analysis

7.1.1 The economic benefits were evaluated on the basis of a cost-benefit analysis of majorproject components. The calculation took into account the investment, operating and maintenancecost and profit to evaluate the project’s cost-effectiveness, based on: (i) the current cost ofsupplying water to dwellers of the project zone, reflecting resource savings (time and money spentto obtain water); (ii) surplus consumption and consumers owing to water accessibility; and (iii)reduction in private and public health expenditure.

21

7.1.2 Similar experiences in the region show that average time spent to fetch water will dropfrom 3.4 h to 0.9 h for an average consumption of 3 buckets8 of water daily per household, whenthe beneficiaries move from a traditional source to boreholes. With an improved supply systemcloser to habitations, the time savings amount to 2.5 h daily. The time-value thus saved iscalculated against the minimum household agricultural income, i.e. FMG 50 000 monthly or FMG277 per hour. The same studies demonstrated that a 75% reduction in the time used in fetchingwater induces additional consumption of 33%. The surplus water value was evaluated at FMG115.4 gain per household.

7.1.3 It is difficult to estimate the health expenditure gains of PWS projects. However, it wasreasoned that better access to potable water, health education and hygiene, preventive and curativecare, will lead to a 30% fall in water-borne diseases. In Fianarantsoa and Tulear provinces, healthcentre statistics show that water-borne diseases account for a quarter to a third of consultations.These health benefits will lead to a reduction in public and household health expenditure.

7.1.4 Based on these assumptions, the economic analysis shows that with a 25 year life, theproject’s economic rate of return will be 11.54%. The said rate, arrived at solely based on thequantifiable benefits, is acceptable for a social project. Assumption details may be found in theproject documents; calculations are given in Annex 8.

7.2 Social Impact Analysis

7.2.1 As main benefit, the project will meet the potable water needs of beneficiaries andimprove social well-being through enhanced community sanitation and health. Obviously, theproject has other benefits relating to time savings. The project will permit the economy of otherpriority resources. It will generate an automatic compensation system in terms of time andresource savings.

7.2.2 By increasing the quantity and quality of water, the project will reduce the risk ofdiseases, resulting in increased productivity and reduction of public and private health expenditure.The fall, if not eradication, of water-borne diseases will have a positive impact by reducing themorbidity and mortality rate. It is common knowledge that such diseases account for more than50% of reasons for consultation in the project zone.

7.2.3 By fixing the population and livestock around certain water points, the project willpromote an integrated operational approach. Sanitation activity through the construction oflatrines and health education will considerably improve rural living standard and open newactivities for artisans to exercise innovative vocational pursuits.

7.2.4 Lastly, structural activities at the village level will contribute to increasing the capacityof rural dwellers to organize themselves, strengthen community dynamics and social cohesion.The participatory approach used in setting up the water point management committees will permitwomen’s active participation in decision-making bodies, giving them access to positions ofresponsibility. The project could have other induced impact, e.g. introduction of literacy, trainingand nutrition programmes, encouraging women to initiate income-generating activities(gardening, market-garden farming, etc.) as has been observed in similar projects.

8 1 bucket = 15 litres

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7.3 Sensitivity Analysis

Based on certain identified risks (paragraph 6.3.1), two sensitivity tests were conducted.A delay in project implementation will have an impact on the project cost. Therefore, a 20%increase in the project cost will reduce the rate of return to 8.86%. Inefficient CTM campaigns willcause stagnation in the health status in the project zone, thus limiting the health impact. In thatcase, the project’s rate of return would drop to 11%.

8. CONCLUSIONS AND RECOMMENDATION

8.1 Conclusions

8.1.1 The PWSS project in the rural areas of Madagascar’s Grand Sud is in line with thepolicy thrust outlined by the Government of Madagascar and falls within the framework of theBank’s Country Strategy Paper for the 1999-2001 period which aims at poverty reduction. Bysupplying enough water to and improving health in the four districts of Fianarantsoa and Tulear,the project will significantly contribute to concretizing the country’s water policy, makingimprovement of water supply in the Grand Sud a sectoral priority. With 700 positive boreholes,the project will increase the potable water cover rate in the project zone to 53% in 2006, comparedwith the current 13%.

8.1.2 In designing the project, account was taken of lessons from similar projects and currentefforts to use the participatory approach with regard to water and sanitation. Furthermore, issuesconcerning effective beneficiary participation and their full support for the works were alsoconsidered. CTM activities will help in structuring the community and permit full womenparticipation in managing the water points.

8.1.3 Lastly, the project has several benefits. Apart from time gained and reduction in healthexpenditure in connection with water-borne diseases, the latrine and drinking trough componentswill help improve the living standard and further settle the agro-pastoral population around modernwater points, enhancing their productivity and livestock security. Furthermore, women will,through the project, find ways of reducing their tasks and use time saved as a result for incomegenerating activities. By addressing the people’s real and priority needs, the project will contributesignificantly to poverty reduction.

8.2 Recommendation and Loan Conditions

Recommendation

It is recommended that a loan not exceeding UA 7.93 million from ADF resources begranted to the Government of the Republic of Madagascar to implement the project describedherein, subject to the fulfillment of conditions set forth in the loan agreement.

A. Conditions Precedent to Entry into Force

8.2.1 Entry into force of the loan shall be subject to the borrower fulfilling to the Fund’ssatisfaction, the general conditions applicable to loan agreements and guarantee agreements of theFund.

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B. Conditions Precedent to First Disbursement

8.2.23 Apart from meeting the conditions precedent to entry into force of the loan agreement,the Fund shall only commence disbursement after the Borrower would have satisfactorily fulfilledthe following conditions:

i) shown proof of establishing the project implementation unit (paragraph 5.1);

ii) shown proof of appointing the head of the project implementation unit whoseexperience and qualification the ADF would have considered acceptable(paragraph 5.2.1);

iii) undertake to set up the consultative steering committee (paragraph 5.2.3);

iv) show proof to the Fund of opening a special account in a commercial bankacceptable to the ADF into which the PIU operating funds will be paid(paragraph 5.5).

C. Other Conditions

Moreover, the Government shall:

i) set up a consultative steering committee not later than 31 December 2002(paragraph 5.2.3);

ii) adapt not later than 31 December 2002 the enforcement texts of the NationalWater and Sanitation Authority (paragraph 5.8.1) ;

ANNEX 1

REPUBLIC OF MADAGASCARGRAND SUD RURAL PWSS PROJECT

MAP OF THE COUNTRY AND OF THE PROJECT ZONE

Scale

This map has been drawn by the African Development Bank Group exclusively for the use of readers of the report which it isattached. The names used and the borders shown do not simply on the part of the Bank Group and its members any judgementconcerning the legal status of a territory nor any approval or acceptance of these borders.

ADB

World Bank

AEPSPE/UNICEF Programme

UNDP

Swiss Cooperation

Japanese Cooperation

MO

ZA

MB

IQU

EC

AN

AL

IND

IAN

OC

EA

N

Annex 2

REPUBLIC OF MADAGASCAR

GRAND SUD RURAL PWSS PROJECT

ORGANIZATION CHART

A. MINISTRY OF ENERGY AND MINES

B. DIRECTORATE OF WATER SERVICES

MINISTER

GENERAL SECRETARIAT

DIRECTORATE OFADMINISTRATION AND

FINANCE

GENERALDIRECTORA

TE

SUPERVISORY AGENCIESATTACHED AGENCIES

DIRECTORATEOF MINES AND

ENERGY

DIRECTORATE OF ENERGY

DIRECTORATE OFWATER

OPERATIONS

REGIONALDIRECTORAT

ES

CABINET

DIRECTOR

S.R.E. S.A.E. S.B.D.H.H. U.G.F.P.

C.E.P.

S.R.E : Water Resource DepartmentS.A.E : Water Supply DepartmentS.B.D.H.H : Hydraulic and Hydro-Geological Data Bank DepartmentU.G.F.P : Project Financial Management UnitP.I.U : Project Implementation Unit

Annex 3Page 1 of 3

REPUBLIC OF MADAGASCARGRAND SUD RURAL PWSS PROJECT

ENVIRONMENTAL ASSESSMENT

1. Introduction

The project involves the drilling of 700 boreholes equipped with hand pumps, and theconstruction of 1050 drinking troughs and 5000 latrines. Since the environmental impact isattenuable through the implementation of appropriate measures, the project was classified underCategory 2. The assessment of environmental conditions during the field trip showed that thedirect impact would be limited to the villages concerned and their immediate surroundings.Project implementation will only require small-scale works, and measures to accommodatespecific and locally circumscribed environmental impact will be taken into account.

2. Institutional Framework

2.1 The Ministry of Environment is in charge of implementing the country’s environmentalprotection policy and improving living standard. It casts technical oversight over the executingagencies of the National Environmental Action Plan (e.g. the National Environmental Agency, theNational Association for Environmental Activities and other related public agencies).

2.2 The “Malagasy Conservation and Development Strategy” was prepared in 1984. Thestrategy provided the foundation for preparing the “Environmental Charter” which is theframework law regulating environmental protection in Madagascar. Decree 99-954 sets the rulesand procedures to follow to put investments in line with environmental requirements. The State isresponsible for the environmental follow-up of projects as stated in Articles 8 and 9 of the Charter.

2.3 The National Environmental Charter sets out the general principles for protecting andenhancing the environment, as well as the general measures and provisions to render operationalthe National Environmental Policy. The Charter provides for the implementation of the NationalEnvironmental Action Plan through three successive environmental projects: the first (1990-1995)was to lay the institutional and operational foundations for environmental management, the second(1996-2000) would focus on field operations, while the third (2001-2005) would render automaticall environmental actions and procedures at the ministerial, community and NGO level.

3. The Physical and Biological Environment

3.1 The project is located in Fianarantsoa and Tulear provinces, also known as the GrandSud. The project zone straddles three districts (Ihosy, Iakora and Ivohibe) of FianarantsoaProvince and the Betroka district of Tulear Province. The four districts of the project zone areidentical in terms of socio-economic activities, food (paddy, maize, cassava, sweet potato, pepper)and cash crops (coffee, clove, tobacco, cotton) cultivated. Most especially, the region has vastranches where extensive livestock farming is practiced.

Annex 3Page 2 of 3

3.2 The soil is marlacious, often with high proportions of chalk. The vegetation is shrubbywith rare and compact forest rising to not more than 5 m. Although confined, these forest speciescontinue to deteriorate owing to charcoal production. During the wet season, the vegetationbecomes herbaceous, turning into grassland suitable for livestock farming. Sometimes mango,guava, tamarind and eucalyptus plants grow especially around water courses. On several spotsnear flooding rivers, rice farming is practiced.

4. Positive Impact

The opportunity to the beneficiaries to have enough quality and regularly monitoredpotable water should reduce such water-borne diseases as diarrhea, cholera, bilharzia, malaria, etc.The project will also contribute to improving rural living conditions through access to sanitationand health care infrastructure.

5. Negative Impact

The formation of stagnant water around boreholes is a potential niche for mosquitoes andother parasites to breed, thus reducing the positive impact of the set health objectives. Furthermore,the nearness of livestock drinking troughs carries the risk of contaminating potable waterinfrastructure meant for human consumption, especially since humans and livestock currently oftendrink from the same water source. There is no risk of depleting the ground water table in view oftheir significant replenishment. Since farming makes no massive use of agro-chemicals, there islittle risk of pollution of the ground water table. However, the conditions in which water iscollected, transported and stored could be a source of water contamination, calling into question thepotability, hence certain project benefits. Moreover, lack or non-maintenance of latrines couldincrease pollution within compounds and engender a return to old habits.

6. Accommodating Measures

Provision has been made for accommodating measures. The construction of protectionaround water points ensures sound waste water drainage and prevents the formation of puddles.Within the framework of Community Training and Mobilization activities (CTM), the beneficiarieswill be mobilized around the need to maintain clean the infrastructure. They will also be sensitizedon the dangers of having livestock share the same water storage facilities as humans. Generally,health education will focus on the water/food chain. In the same vein, the location of latrines willbe carefully studied to avoid dumping of effluents and contamination of potable water.

Annex 3Page 3 of 3

7. Follow-up

The consultant in charge of locating and monitoring the boreholes in accordance with theenvironmental charter will oversee the environmental follow-up. The beneficiaries will also beassociated through bi-annual meetings of the consultative committee and four seminars planned.The health units of the regional technical directorates based in Fianarantsoa and Tulear and theNational Environmental Agency will jointly monitor the water quality. The accommodatingmeasures mostly involve the construction of mud slabs, soak-away, conservation zones andnecessary CTM activities, all of which were factored into the project cost.

8. Conclusion

The project is designed to protect water resources and the people’s health. It should notcause any significant negative environmental impact. On the contrary, it will contribute toimproving the living standard of the rural population concerned.

Annex 4

Annex 5

Annex 6Page 1 of 2

REPUBLIC OF MADAGASCARGRAND SUD RURAL PWSS PROJECTPROJECT IMPLEMENTATION PLAN

1. Introduction

The aim of the project implementation manual is to provide the detail of various projectimplementation procedures to follow. The manual defines the role of parties and showsthe follow-up and review criteria during and after implementation. Hence it covers allstages from the request, identification of eligible villages, various methods for procuringgoods and services and works operation.

2. Project Description

2.1 Objective2.2 Description2.3 Results2.4 Contributions2.5 Impact on the environment and accommodating measures2.6 Cost estimates2.7 Financing plan2.8 Performance indicators

3. Project Implementation/Institutional Provisions

3.1 PIU3.2 Consultative committee3.3 MEN3.4 Ministry of Health3.5 Water point committees

4. Demand Generation Process

4.1 Community mobilization4.2 Community organization and training4.3 Resource mobilization

5. Preparation and Submission of Requests for Assistance

5.1 Request processing5.2 Step-wise criteria5.3 Selection criteria

6. Project Implementation Procedures

6.1 Training/recruitment of implementation unit staff6.2 Establishment of water point committees6.3 Training of trainers, communities and local staff6.4 Health education

Annex 6Page 2 of 2

7. Procurement of Goods and Services

7.1 Procedures, guidelines and regulations7.2 Responsibility for procurement and approval procedures7.3 Recruitment of consultants7.4 Procurement of equipment7.5 Procurement of vehicles7.6 Procurement of contractor services7.7 Procurement of materials: cement, gravels, pipes, spare parts, etc.

8. Follow-up and Evaluation

8.1 Follow-up and evaluation methods, roles and responsibilities, meeting records;8.2 Key follow-up and evaluation indicators

9. Operation and maintenance

9.1 Role of the water point committee9.2 Availability of spare parts9.3 Financing of maintenance activities: community contribution, accounts keeping and

operations

10. Financial Statements and Minutes of Meetings

10.1 Statements10.2 Responsibility for minutes of meetings10.3 Progress report10.4 Financial/account statements/ settlement/disbursement procedures, requests and

procedures10.5 Project audit10.6 Project follow-up and evaluation10.7 Project completion reports

Annex 7

Annex 8

Annex 9Page 1 of 2

REPUBLIC OF MADAGASCARGRAND SUD RURAL PWSS PROJECT

SUMMARY OF BANK GROUP OPERATIONS (UA)Status as at 29 December 2000

SECTOR/OPERATION Fund Origin Approval Date Signature Date Date of EntryInto Force

Loan/GrantAmount

Amount Cancelled Net Loan/GrantAmount

AmountDisbursed

AmountUndisbursed

%Disbursed

Status

I/ AGRICUTURAL SECTOR

1. Irrigated Rice Development Project ADF 16/08/77 23/09/77 02/03/79 5,618,417.00 985,259.50 4,633,157.50 4,633,157.50 100.00 Completed

2. Line of Credit to BTM ADF 23/03/79 17/05/79 28/02/81 4,605,260.00 633,559.32 3,971,700.68 3,971,700.68 100.00 Completed

3. Rice Development Project, Phase ADF 30/10/81 14/12/81 08/11/82 9,210,520.00 9,210,520.00 9,091,046.27 119,473.73 98.70 Completed 1/

4. Emergency Assistance Programme ADF 07/09/82 22/09/82 04/08/82 10,748,677.00 1.28 10,748,675.72 10,748,675.72 100.00 Completed

5. Analaiva Sugar Complex Project, Phase II ADB 16/03/83 11/04/83 16/12/83 16,730,000.00 268,309.44 16,461,690.56 16,461,690.56 100.00 Completed

6. Agro-Industrial Complex Cashew Production Project ADB 15/12/83 08/03/84 19/09/84 9,950,000.00 1,345,929.56 8,604,070.44 8,604,070.44 100.00 Completed

7. Lower Betsiboka Pre-Project Study TAA 19/11/84 15/12/84 08/07/85 300,263.00 138.35 300,124.65 300,124.65 100.00 Completed

8. Antalaha Oil Palm Agro-Industrial Complex ADB 12/12/84 05/09/85 01/01/85 4,650,000.00 1,999,375.91 2,650,624.09 2,650,624.09 100.00

ADF 5,553,944.00 332.30 5,553,611.70 5,553,611.70 100.00 Completed

9. Tsiribihina Irrigation Development Project, Phase I ADF 26/06/87 03/03/88 18/12/88 9,763,151.00 6,695.80 9,756,455.20 9,756,455.20 100.00 Completed

10. Lower Betsiboka Rice Farm Rehabilitation Project ADF 27/05/88 28/05/89 27/09/90 11,052,624.00 11,052,624.00 7,514,704.66 3,537,919.34 67.99 Ongoing

11. Fiherenana River Tulear Protection Regulation Study TAF 27/05/88 28/05/89 08/06/90 1,528,946.00 1,528,946.00 1,528,946.00 100.00 Completed

12. National Maize Project ADF 18/04/89 28/05/89 03/04/90 7,580,258.00 7,580,258.00 3,176,567.95 4,403,690.05 41.91 Ongoing

13. DIR Institution Building Project ADF 23/08/89 28/09/89 06/11/90 2,799,998.00 2,799,998.00 2,111,289.51 688,708.49 75.40 Completed

TAF 23/08/89 28/09/89 06/11/90 2,256,577.00 62.43 2,256,514.57 2,256,514.57 100.00

14. DPRA Institution Building ADF 29/10/91 13/05/92 03/05/93 9,671,046.00 9,671,046.00 9,671,046.00 100.00 Loan reallocated

15. Dairy Production Project ADF 29/10/92 13/05/92 27/04/94 7,230,258.00 258.00 7,230,000.00 7,230,000.00 100.00 Loan reallocated

16. Environmental Programme, Phase I ADF 24/08/92 01/12/93 09/08/93 11,052,624.00 2,624.00 11,050,000.00 11,050,000.00 100.00 Loan reallocated

17. Andakana d'Ikalamavony Plains Development Studies TAF 17/07/93 ` 680,000.00 680,000.00 Grant cancelled

18. Mananara and Andronomera Plain Studies Balance Rice II Completed

19. Young Rural Entrepreneurs Programme ADF 12/11/98 17/12/98 05/10/99 7,350,000.00 7,350,000.00 143,709.21 7,206,290.79 Ongoing

20. Lower-Mangoky Rehabilitation Project ADF 20/10/99 17/12/99 28/09/99 10,000,000.00 10,000,000.00 10,000,000.00 Ongoing

SECTOR SUB-TOTAL 148,332,563.00 5,922,545.89 142,410,017.11 116,453,934.71 25,956,082.40 81.77

II/ TRANSPORT SECTOR

1. Bealanana – Antsahabe Road Project ADF 04/04/77 05/04/77 22/11/78 3,407,892.00 8,328.33 3,399,563.67 3,399,563.67 100.00 Completed

FSN 23/02/77 05/04/77 31/12/79 6,650,000.00 779,318.51 5,870,681.49 5,870,681.49 100.00

2. Pangalanes Canal Development ADB 15/12/83 03/08/84 09/03/84 11,000,000.00 458,450.70 10,541,549.30 10,541,549.30 100.00 Completed

(Northern Trunk) ADF 25/01/84 03/08/84 09/03/84 18,421,040.00 11,206.67 18,409,833.33 18,409,830.33 100.00

3. RN7 Rehabilitation Project ADB 22/04/83 03/08/84 11/12/84 19,660,000.00 1,499.74 19,658,500.26 19,658,500.26 100.00 Completed

(Antananarivo-Ankaramena) ADF 11/10/83 03/08/84 14,736,832.00 38,370.45 14,698,461.55 14,698,461.55 100.00

4. Malaimbandy – Mahabo Road Development Project ADF 17/12/84 09/02/85 15,473,674.00 6,451,571.87 9,022,102.13 9,022,102.13 100.00 Completed

5. RN6 Rehabilitation Study CAT 03/12/85 05/09/85 18/02/86 663,157.00 134,379.92 528,777.08 528,777.08 100.00 Completed

6. Road Maintenance and Rehabilitation Project ADF 15/05/90 30/11/90 11/04/91 6,493,417.00 6,493,417.00 469,300.02 6,024,116.98 7.23 Ongoing

NTF 6,000,000.00 6,000,000.00 121,285.15 5,878,714.85 2.02

Annex 9Page 2 of 2

7. Panagalanes Canal Development Studies (Southern Trunk) TAF 27/11/92 13/05/92 1,842,104.00 1,842,104.00 Grant cancelled

8. RN34/RN35/RN41 Studies TAF 02/12/98 17/12/98 1,340,000.00 1,340,000.00 1,340,000.00 Ongoing

9. RN6 and RN1 Studies bis TAF 07/07/99 13/07/99 1,335,000.00 1,350,000.00 1,350,000.00 Ongoing

10. Project to Repair Damage Caused by Cyclones ADF 31/10/00 18/12/00 6,520,000.00 6,520,000.00 6,520,000.00 Ongoing

SECTOR SUB-TOTAL 113,543,116.00 9,725,230.19 103,832,885.81 82,720,050.98 21,112,831.83 79.67

III/ MULTISECTOR

1. Structural Adjustment Programme ADF 17/01/89 02/10/89 06/09/89 27,631,560.00 27,631,560.00 27,631,559.79 100.00 Completed

2. Social Action Programme within the SAP Framework ADF 26/02/91 05/09/91 13/08/93 1,381,578.00 1,578.00 1,380,000.00 1,380,000.00 100.00 Loan reallocated

TAF 26/02/91 05/09/91 13/08/93 921,052.00 921,052.00 Grant cancelled

3. Second Structural Adjustment Programme ADF 17/09/97 02/10/97 23/12/97 21,740,000.00 21,740,000.00 21,740,000.00 100.00 Completed

4. Emergency Assistance Programme/Gretelle ADF 16/07/97 05/08/97 05/10/97 6,235,000.00 6,235,000.00 6,135,690.92 99,309.08 98.41 Ongoing

TAF 16/07/97 05/08/97 05/10/97 188,000.00 188,000.00 125,331.61 62,668.39 66.67

5. Supplementary Finance Mechanism 1998 ADF 02/12/98 17/12/98 1,418,000.00 1,418,000.00 1,418,000.00 100,00 Completed

6. Supplementary Finance Mechanism 1999 ADF 01/07/99 13/07/99 1,561,000.00 1,561,000.00 1,561,000.00 Completed

7. Third Structural Adjustment Programme ADF 27/04/00 20/05/00 04/10/00 16,000,000.00 16,000,000.00 12,000,000.00 4,000,000.00 75.00 Ongoing

SECTOR SUB-TOTAL 77,076,190.00 922,630.00 76,153,560.00 71,991,582.32 4,161,977.47 94.53

IV SOCIAL SECTOR

1. Intermediate Health Infrastructure Strengthening Project ADF 31/03/81 05/11/81 19/11/81 7,368,416.00 7,368,416.00 7,368,416.00 100.00 Completed 2/

2. Health Sector Pre-Investment Study TAA 29/10/86 02/04/87 19/11/87 580,263.00 262.93 580,000.07 580,000.07 100.00 Loan reallocated

3. Institution Building in the Health Sector TAA 29/10/86 02/04/87 19/11/87 727,631.08 727,631.00 Loan cancelled

4. Educational Structure Strengthening Project ADF 27/11/86 16/12/86 09/02/88 13,382,886.00 13,382,886.00 12,347,589.20 1,035,296.80 92.26 Completed

5. Education Project II ADF 15/12/92 03/03/93 5,213,154.00 5,213,154.00 Loan cancelled

TAF 15/12/92 03/03/93 939,473.00 939,473.00 Grant cancelled

6. Education III ADF 02/12/98 17/12/98 08/11/00 16,000,000.00 16,000,000.00 16,000,000.00 Ongoing

TAF 02/12/98 17/12/98 08/11/00 500,000.00 500,000.00 500,000.00

7. Health II ADF 07/07/99 13/07/99 15/05/00 12,440,000.00 12,440,000.00 12,440,000.00 Ongoing

TAF 07/07/99 13/07/99 750,000.00 750,000.00 750,000.00

SECTOR SUB-TOTAL 57,901,823.08 6,880,520.93 51,021,302.07 20,296,005.27 30,725,296.80 39.78

V/ UTILITIES SECTOR

1. Emergency Infrastructure Repairs TAA 19/11/84 12/05/84 06/05/85 1,040,789.00 263.65 1,040,525.35 1,040,525.35 100.00 Completed

2. Potable Water Supply in the South ADF 22/12/86 02/04/87 09/02/88 7,184,206.00 2,082,566.26 5,101,639.74 5,101,639.74 100.00 Completed

3. PWSS Feasibility and Implementation Studies in 8 Centres TAF 18/12/89 08/02/90 30/06/92 855,657.00 855,657.00 822,309.81 33,347.19 96.10 Completed

4. Tulear Town Protection Project ADF 12/11/97 05/12/97 28/01/99 6,440,000.00 6,440,000.00 6,440,000.00 Ongoing

SECTOR SUB-TOTAL 15,520,652.00 2,082,829.91 13,437,822.09 6,964,474.90 6,473,347.19 51.83

VI° BANKING AND INDUSTRY

1. Feasibility and Engineering Studies on a Fertilizer Production Project ADF 25/05/92 08/12/92 19/03/93 5,710,522.00 90,729.78 5,619,792.22 5,619,792.22 100.00 Completed

TAF 25/05/92 08/12/92 19/03/95 921,052.00 921,052.00 Grant cancelled

SECTOR SUB-TOTAL 6,631,574.00 1,011,781.78 5,619,792.22 5,619,792.22 100.00

TOTAL 419,005,918.08 26,545,538.70 392,475,379.30 304,045,840.40 88,429,535.69 77.47

1/ Project completed but balance being sued to finance the Mananara North and Andronomena Plains Development Studies

2/ After completion, the UA 4 275 676.88 was reallocated

Annex 10

REPUBLIC OF MADAGASCARGRAND SUD RURAL PWSS PROJECT

LIST OF PROJECT DOCUMENTS

1. Prime Minister’s Office: National Poverty Control Strategy (2000-2015), January. 2000– Provisional Version.

2. Ministry of Energy and Mines: Water Code (Edict No. 98-029) ,20 January 1999.

3. World Bank: Appraisal Report on the Pilot Rural Water and Sanitation Project(PAEPAR), Nov.1997.

4. UNDP: Establishment of a National Water and Drainage Authority (Autorité Nationalede l’Eau et de l’Assainissement, ANDEA), Legal and Institutional Aspects, MissionReport, December 1999.

5. UNCEF/AFVP: Project Appraisal Report on 150 boreholes in the South, January 2000

6. UNDP: Report on Test Boreholes in the Coastal Plain and Alongside Mahafaly Plateau,July 2000

7. South Reconnaissance Research Group: Water in the South (Socio-economic andCultural Aspects), UNDP/GRECS, 1996.

8. CHAPERON P., DANLOUX J., FERRY L.: Major Natural Hydrologic Units inMadagascar.

9. RAKONTRODRAINIBE J.H.: Madagascar’s Ground Water Tables, April 1983

10. Draft enforcement decrees on “Water Resource Management”, “Operation andOrganization of the Public Potable Water and Domestic Waste Water DrainageServices” and “Organization, Operation and Financing of Public Water ServiceRegulating Agencies”, September 2000

11. UNDP: Poverty Reduction and Sustainable Methods Promotion ProgrammeMAG/97/008 – Water Component for the Grand Sud, October 2000.

12. World Bank: Republic of Madagascar – Review of the Urban Potable Water Supply andSanitation: Strategy for Future IDA Assistance, October 2000.

13. RAKOTONDRAINIBE J.H. Water and Sanitation Indicator Study, Ministry of Energyand Mines, September 2000.

14. Economic Assumptions