Dociumt of -- The World Bank FOR OmCUL USE ONLY t-'1LCRU :C7Hh COPY R tep No. P-5529-ANG ki:Xe-. r N.-. V- 55l;::94-A.NU. TIy> : ( i1- ALUVAI'EZ. C/ X;4 31,, J724 3/ AlI:-;1N MEMORANDUM AND RECOMMENDATION OF THE PRESIDENTOF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVEDIRECTORS ON A PROPOSED CREDIT OF SDR 28.3 MILLION TO THE PEOPLE'S REPUBLICOF ANGOLA FOR AN INFRASTRUCTURE REHABILITATION ENGINEERING PROJECT JUNE 20h 1991 This documehatas * resicted ditsibuion and may be and by recpiens only In the peonmne of their oidalues cIotnsts may not oterwie be disclosed witho World Bank athodzation. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
This documehatas * resicted ditsibuion and may be and by recpiens only In the peonmne oftheir oidalues cIotnsts may not oterwie be disclosed witho World Bank athodzation.
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CURRENCY EQUIVALENT(as of March 31, 1991)
Currency Unit - New Kwanza (NKa)
Official Rates USS 1.00 8 NRa 60.0
FISCAL YEAR
January 1 - December 31
WEIGHTS AND MEASURES
1 meter (m) 8 3.2808 feet (ft)1 kilometer (km) a 0.6214 miles (mi)
1 metric ton (tonnes) 8 1.023 short tons
GLOSSARY OF ABBREVIATIONS
AfDB Q African Development BankCFB O Benguela Railway CompanyCFL Luanda Railway CompanyCPM Mocamedes Railway CompanyDANIDA = Danish International Development AgencyDNA N National Directorate of WatersDNCF - National Directorate for Railways. MINTECDNMMP National Directorate for Merchant Marine and Ports,
MINTECDNOE Q National Directorate for Engineering Works, MINCONSDPOE Q Provincial Directorate for Engineering WorksDTM 8 Directed Track MaintenanceEEC European Economic CommunityERAS G National Water and Sanitation CompanyEPAL 8 Luanda Provincial Water CompanyERR Economic Rate of ReturnETP 8 Public Transport CompanyFINIDA - Finnish International Development AgencyGOA Q Government of AngolaGPL Luanda Provincial GovernmentHDM 8 Highway Design and Maintenance ModelICB International Competitive BiddingINE Angolan National Statistical InstituteiNEA Angolan Highway Institute, MINCONSINP - National Institute for Physical Planning, MINPLANIRI - International Roughness IndexLPTS - Luanda Port Transport SystemMINCONS 8 Ministry of Public Vorks and Urban Developmentl!
I/Formerly the Ministry of Construction
MINFIN - Ministry of FinanceMINPLAN Ministry of PlanningMINTEC - Ministry of Transport and Communications
- - man-mnortheMusseques = Human Settlements on the Fringes of Urban AreasN.A. Not ApplicableNBHN R National Basic Highway NetworkNORAD 8 Norwegian Agency for Development CooperationNPTS Namibe Port Transport SystemODA Overseas Development Administration (U.K.)p.a. = per annumPER - Public Expenditure ReviewPIP - Priority Igvastment ProgramPPF - Project Preparation FacilityPRE - Economic Recovery Program (1989-1990)SADOC - Southern Africa Development Coordination ConferenceSATTC 8 Southern Africa Transport and Telecommunications
CommissionTA a Technical AssistanceTEU - Twenty-foot equivalent unitsTOR T Terms of ReferenceUICL - Urban Infrastructure of the City of LuandaUNCTAD - United Nations Conference on Trade and DevelopmentUNDP - United Nations Development ProgrammeVOC - Vehicle Operating CostVPD * Vehicles Per Day
A. Summary Project Cost and FinSUcing Plan . . . . . . . . 15B. Procurement Hethods and Disbursements .. . . . 16C. Timetable of Key Project Processing Events . . . 18D. Status of Bank Group Operations in Angola . . . 19
This document has a stcd disibution and may be ued by reipients only in theperforMINreof their offial dutie its contents may not othrwe be dilosd without Wodd ank authorization.
TECHNICAL JNNE TO Tog DllRAMM OP THE . . . . 20
overviewr .... * 21
Detailed Pro,1ect Descrfption
A.1. Project Components
a. The Namibe Transport System
(i) Port of Namibe . . . . . . . . . . . . . 23(ii) Caminho de Ferro de Mocamedes (CPM) . . . . 29
b. The National Basic Highway Network . . . . . . . 37
c. The Luanda Transport System
(M) Port of Luanda . . . . . . . . . . . . . . 43(ii) Caminho de Ferro de Luanda (CFL) . . . . . 50
d. Urban Infrastructure
(i) Water Supply, Sewerage, Storm Drainage andSolid Wastes Disposal of Luanda . . . . . . 58
(ii) Land Use Strategy Plan and MussequeUpgrading . . . . . . . . . . . . . . . . . 63
A.2 Technical Assistance and Training . . . . . . . . . . 68
Beneficiaries: The Ministry of Planning, the Ministry of Transport andCommunications, the Ministry of Public Vorks and UrbanDevelopment, the State Secretariat for Energy and Water,and the Luanda Provincial Government.
Amount: SDR 28.3 million (USS 37.7 million equivalent)
Termst Standard IDA terms, with 35 years maturity
Onlendinx Terms: Standard IDA
Financing Plans Local Foreign Total a of Total
(US&million)
Government 4.8 - 4.8 11.3IDA - 37.7 37.7 88.7
Total 4.8 37.7 42.5 100.0mm- mm
Economic Rate of Return: Not Applicable
Staff Appraisal: None
Mao: IBRDt 22945
oW tEl ITEAONL DEVELOUDIT ASSOCIATQONTO TM mEECUTIE DIRCSRS
ON A PROPOSED CREDITtO ANGOLA
_10A AN IMMALUMMUR REULITATIOK ETNINEERIif CREDIT
1. The following memorandum and recommendation on a proposedengineering credit to Angola for SDR 28.3 million (US$ 37.7 millionequivalent) is submitted for approval. The proposed credit would be onstandard IDA terms with 35 years maturity. It would help to finance anengineering technical assistance project. Part I of the present documentdescribes the country's policies and the Bank's assistance strategy. Itdraws upon the latest Country Brief for Angola, which was distributed to theExecutive Directors in January 1991, as well as an Introductory EconomicReview (Report No. 7283-ANG) which was distributed to the Executive Directorsin June 1990. Part II describes the credit, the rationale for IDAinvolvement, project objectives, agreements reached and the risks of theoperation.
PAR? I - COUNTRY POLICIES AND UANR GROUP ASSISTANCE STRA5DGY
Backaround
2. Angola, with a population of about 10 million, growing at anannual rate of about 2.8 perceAt, is one of the richest countries in Africain terms of natural resource endowment (e.g., oil, diamoads, and fertileland). At the same time, its economy is one of the most distorted of thecontinent.- Since independence in 1975, the country has developed an economyhighly dependent on income from oil. Available statistics on Angola are poorand should be treated with caution. GNP per capita, which is estimated atUS$620 in 1989, is closely linked to oil prices. The oil sector representsabout half of the GDP. In 1991, oil export earnings were about US$3 billion,or about US$300 per capita. The oil industry, developed as an enclave, hasgrown rapidly since 1975, and by early 1991, oil production reached about460,000 barrels per day. By contrast, the non-oil sector's performance hasbeen poor since independence. It is estimated that non-oil sector's outputgrowth per capita has been negative since the early 1980's. Angola, whichwas an important net exporter of agricultural products before independence,has in recent years been increasingly dependent on food imports (and foodaid) to supply its urban population. The capacity utilization of existingand the development of new manufacturing industries has been severelyaffected by the lack of inputs, spare parts and maintenance services, as wellas by a distorted policy environment.
S. The Government's failure to revive the economy after independenceis largely explained by three factorsi (i) a fifteen-year old civil war,which has made much of the countryside too insecure for agriculturalproduction and transport, has required heavy military expenditures(contributing to chronically large fiscal deficits, despite substantialrevenues from oil), and has destroyed a substantial part of the economic andsocial infrastructures (ii) unusually severe hbman resource constraints, due
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to the massive exodus of Portuguese settlers at independence; and (iii)misguided economic policies which have created a highly distorted system witha formal economy (largely public) managed by administrative controls, and alarge parallel economy (mostly private).
Ebconomic. Financial and Social Performance
4. Since independence, the Angolan economy has been ravaged by a long andcostly civil war and by severe distortions commonly observed in centrally-planned economies. The fall of domestic production and agricultural exportsthat occurred after independence was primarily caused by the destruction ofthe country's stock of human and physical capital, and aggravated bymacroeconomic policies which favored consumption. In response to adversedomestic conditions and external shocks which reduced the country'sresources, the Government resorted to rigid price controls and a system ofadministratively allocated foreign exchange, instead of appropriate pricepolicies (exchange rate adjustments, corrections in relative prices) andfiscal adjustments. An expansionary monetary policy maintained the level ofdomestic consumption, mostly in the urban areas, at the expense ofinvestments to Increase the productive base of the economy.
5. In many cases, official prices have not been changed sinceindependence, and the few price adjustments which have taken place have beenvery modest when compared with increases in the nominal purchasing power ofthe population. As a consequence of these pricing policies, the domesticproduction of many goods has been discouraged, relative prices have beenseverely distorted, waste in the consumption of some goods has beenstimulated, and wide gaps have appeared between the demand and the supply ofpractically all goods and services. The exchange rate, which has been peggedto the US$. was unchanged at 29.92 Kx per USS between 1975 and March 1991,when it was adjusted to 60.00 NKx per US$. Exchange rates prevailing in theparallel market have, however, sometimes been as high as a hundred times the6fficial rate. In the absence of adequate adjustments, the exchange ratebecame overvalued and excess demand for foreign exchange was curtailedthrough administrative controls. As a result of these nolicies and thehostilities, investment in the non-oil sector droppel substantially,traditional agricultural exports practically disappeared, non-oil domesticoutput per capita declined, and the country became almost exclusivelydependent on oil and diamond exports for its foreign exchange earnings.
la.o To compensate for the shrinking d-m "'ic fnon-oil) production percapita, growing imports financed by oil income supplied the country withconsumption goods. Government policies encouraged consumption throughwidespread consumer price subsidies, the accumulation of sizeable fiscaldeficits and a system of remuneration 'in kind" to Government personnel.More specifically, to protect the purchasing power of workers in the formalsector, particularly civil servants, the Government introduced a system of'buying rightss in official shops (supplied with imported consumer goods) inpartial lieu of cash payments of wages. Through this system, a relativelysmall portion of the population has access to the bulk of the country'simported consumer goods, at prices that are substantially below thoseprevailing in the parallel market. Government employees, in turn, trade partof these goods in the parallel market for food and consumption goods whichare unavailable in official shops (e.g., vegetables, fish, etc).
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Manufacturing enterprises also sell part of their producrion at low prices totheir own ewployees, who also trade on the parallel narket.
7. Lack of financial discipline is a serious problem at all levelsof public administration and enterprises. A growing part of the formaleconomy has been financed through oil revenues, which in recent years haveprovided over 80 percent of government income. In spite of the rapid growthof oil revenues since 1986, the budget has consistently been in deficit asnon-oil revenue declined continuously, while expenditures remained at highlevels. A large share of government expenditure, including most of themilitary expenditure, is outside the budget. It is estimated that militaryexpenditures represer.' about 25 percent of GDP. In 1988-90, the overallbudget deficit (including extra budgetary expenditure) was on averageequivalent to about one quarter of GDP at official ices. However, theunderlying deficit valued at more realistic prices i stimated to be lower(about 12 percent).
8. Throughout the post-independence period, an accommodatingmonetary policy fully monetized the country's sizeable fiscal deficits. Asa result, a growing excess liquidity rapidly emerged but its inflationarylmpact did not show up in the official price indices because of theadministratively controlled official prices. These policies led to theemergence of widespread parallel marketss price differentials between theofficial and parallel markets rapidly attained 2,0002 to 10,0002. This, inturn, reinforced the existing incentives to divert resources from theofficial to the parallel economy. Money substitutes (such as imported beer)and barter took On an increasing role in internal trade, further complicatingthe management of monetary policy. Annual inflation in the parallel marketis estimated to have reached three-digit levels during 1987-90.
9. Foreign and domestic trade have been hampered by rigid andpervasive Government regulations and restrictions. There is a predominanceof inefficient public enterprises, not only in manufacturing, but also inforeign trade, wholesaling, and in the retail network. Although there aresome private ent, -rises, their role in providing competition to the publicsector is weak, because of the administrative allocation of imports and fixedprofit margins imposed by the Government. Agricultural production has beenparticularly affected by the war, the shortcomings of the trade system, andthe disappearance of bush traders. In the earlier period of its economichistory, when the country was not engulfed in armed conflicts, bush tradershad played an important role in the marketing and distribution system bypro-iding consumer goods in exchange for agricultural products.
10. Angola's external debt at end-1989 is estimated at over US$7billion (including US$1 billion in interest arrears), of which about US$3.5billion was owed to the Soviet Union, US$2.8 billion to Paris Club and otherWestern creditors (mainly Brazil and Portugal), and the remainder to EasternEuropean countries and Cuba. External debt represents about 100 percent ofGDP. About one-third of the total debt is military. In June 1989. theSoviet Union rescheduled its loans on favorable terms (10 yeaz.s and 3percent), including arrears and maturities falling due through 1990. In July1989, the Paris Club rescheduled almost US$0.5 billion in arrears andmaturities falling due through September 1990; the other Western creditorsrescheduled their own debt on the same terms, The remaining maturity profile
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is unfa:orable, with payments bunched over the period 1991-93. Thus,scheduled debt service would absorb about one-third of projected exports ofgoods and services in 1991-93. Assuming further Soviet rescheduling atterms comparable to those of 1989, and "Toronto terms" for Western creditors,overall debt-servicing capacity of the existing debt could be sufficient tohandle the flow of debt-service payments in the medium term, withoutcompromising the long-term debt profile of the country. However, the problemof arrsars will in itself require an orderly resolution. Given the above,Angola's capacity to service additional debt at non-concessional terms isvery limited.
11. The social conditions prevailing in Angola are poor by Africanstandards. This is the combined result of the civil war, inappropriatepolicies, rapid migration to the cities and emigration of skilled manpower.Life expectancy at birth has been estimated at 44 years, the izifant mortalityrate is 288 per thousand, less than 30 percent of the population has accessto health services and safe water, and despite the Government's achievementsin the field of education, the adult literacy rate is still 41 percent.Disparity in social conditions among various regions are substantial, as aresult of the war-induced destruction. Poverty in the rural areas is acute.In addition to the stagnation in economic activity, the main contributingfactors for rural poverty are: the interruption of normal links to the cities, the drastic decline of inter-regional trade, lack of incentive goods, andthe lack of access to social services.
12. These factors particularly affect women, considering theirpredominant involvement in agricultural activities, and their greaterrelative need for social services. Nevertheless, womelln access to basiceducational opportunities has been expanded and the current level of literacyamong women, although still low at 33 percent, is substantially higher thanin earlier years. Also, the Government has adopted a more meritocraticapproach to the assignment of responsibilities by gender than is the case inmost other Sub-Saharan African countries. Vomen figure prominently in thecivil service, including in high-level positions.
Atteunts at Econoic Reform
13. Recognizing that Angola's economic distortions and imbalances aredue in large part to inapDropriate economic policies, the Governmentannounced in 1987 an ambitious program of Economic and FinancialRestructuring (SEP). The basic objectives of the program were to stabilizethe economy and Improve production incentives by adjusting price levels(including the exchange rate) in the formal economy. The proposed reforms,had they been implemented, would have constituted a major departure from theway the economy had been managed and included: Ci) a limited adjustment ofthe exchange rate, which would have still left a wide margin between theofficial and the parallel exchange rates; (ii) a reduction in the budgetdeficit, and a corresponding reduction in inflationary financing; (iii) aprogram for restructuring public enterprises through divesture andliquidation; (iv) reform of the financial sector by encouraging theestablishment of comuercial banks and ensuring greater availability of creditto the private sector; and (v) limiting price controls to only selectedessential goods.
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14. Whlile ths overall direction of proposed reforms was appropriate,the measures generally did not go far enough to address the main structuraldistortions, notably in the area of the exchange rate. In any event, withthe exception of a more accommodating attitude towards parallel marketactivities, there has been little progress to date in implementing theprogram. Since 1988, several laws were audpted that attempted to provide abroad framework for structural refonm, but most of them have not beenapplied. A new package of measures, including a 100 percent devaluation,combined with wage increases and price liberalization was announced in early1990 as part of a New Action Plan. The exchange rate adjustment, however,was postponed for over a year and the decontrol of most prices is yet to beimplemented.
15. A recent 'currency reform' in September 1990 (creation of a newcurrency aid tight limits on convertibility from the old currency)temporarily brought down the prices on the pArallel market. Hovever, thisattempt to reduce excess liquidity proved unsustainable. The experience withthis 'reform" further undermined the public's already shaky confidence in theGovernment's management of the economy. Inflation is accelerating and thegap between official and parallel exchange rates is widening to the rangewhich existed prior to the 'currency reform". Yet another attempt to putforth a more consistent and comprehensive set of stabilization measures wasmade recently as part of the annual plan for 1991. While reaffirming theGovernment's coumitment to adjustment and reform, this plan still does notrepresent the kind of comprehensive and credible package of reforms whichwould be needed to address the fundamental economic distortions of theAngolan economy. For example, the 100 percent devaluation implemented inMarrch 1991, is insufficient to address the substantial overvaluation of theNew Kwanza.
16. The absence of concrete and coherent economic reform measures todate may be attributed to various factors, including3 (i) the Government'spreoccupation with the war and, more recently, with an intensifying peaceprocess (see paras. 18 and 19); (ti) the strong vested interests in theexisting system; (iii) the uncertainty with regard to the political impact ofreforms; and (iv) weaknesses in economic management, especlally the limitedcapacity for designing and executing detailed action programs within aconsistent macroeconomic framework, and the inadequate coordination betweenthe principal actors in the policy making process.
17. A table summarizing Angola's economic performAnce since 1986 ispresented below. As has already been noted, however, it is based onstatistical information whose accuracy is suspect. After decades of warfare,it is highly likely, for instance, that the data for the non-oil sector ismisleadingly high. Strengthening the statistical bass is one of theobjectives of the Economic Management and Capacity Building Project presentedto the Board on June 19, 1991.
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anvilo
Seleted EconoMIc Indicatoro
.... .... . _ -.. (se.) (Pr°oj.)
REAL MM RATES CDA Rp 12.1 12.1 15.2 1.5 2.6oil 28.2 28.1 24.7 0.8 4.7non-otl 2.6 -0.5 2.6 2.2 0.4GDPIc.itO 9.8 9.8 12.4 -1.8 0non-0 I DP/cxplta a -8.8 0 40.6 -2.4
t>INL MM RklUE !/Expott RAt E -40 0 8 21 -8Import onto -1? 8 48 -0 -44
Govt revenue/GOP c 48 84 2 29Govt *xpendituro so 46 60 S4Overall deficit/GOP -10 -12 -26 -26
Current account (s lliIon) -808 449 -409 -20Current account/ODP -4 8 -5 a
INDICES g/Consuer price j 108.0 108.0 127.7 127.7Ral exchange rat .. . ..
Soure:t Planninn Mlnitnry. Dank and IMF Staff Estioate..
Baegd on onstant 1986 Kwanza prices.Based on current US$ priesr.
:/ Current revenue, excluding grant.Total expenditure. Howvor, the large differen betwen official and oarket pries make.It difficult to iterprt these, number. after adjusting for prleo distortions in 1986, thedeficit would be 12 percent of GOP.
¢11986=M0Luandb Official Prics
Recent Political Dewelogments
2.. War, be it to seek independence from Portugal or between theGovernment and UNITA (National Union for the Total Independence of Angola) inthe post-independence period, has been the dominant fact of life in Angolafor decades. The Governmmnt has, in March 1991, opened the door for amultiparty system through a revision of the constitution. In May 1991, acease-fire between MPLA (People's Movement for the Liberation of Angola - theGovernment party) and UNITA forces was initialled, and so far, respected.The cease-fire is part of a comprehensive agreement setting up a detailedtimetable for the integration of the two armies into a national Angolan army,for the opening of the political system, and for the organization ofmultiparty elections at all levels of government before the end of 1992. Theimplementation of both the military and political aspects of the agreementwould be monitored by a "Political-Military Coomission' comprising, besides
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the Government and UNITA, representatives from Portugal (which acted asmediator) and the US and the Soi.&et Untion (both acted as observers). Itwould be assisted by a United Nations force of about 600. Signature of thepeace agreement was finalized on May 31, 1991.
19. These developments clearly constitute a major breakthrough. Forthe first tina since independence, an end to the civil war is clearly athand. Tf successful, this process would also significantly improve theprospects for better economic management, including the reallocation of alarge amount of public resources from the mi1Ltary to development uses. Overthe short term, a number of remaining military and political issues will haveto be solved. Among these, the orderly demobilization of about 150,000soldiers from both armies is likely to constitute a major challenge.
Central Develonment Issues and Prosnects
20. The medium-term economic prospects of Angola depend on fivefactors. First, the conclusion of the civil war, which, in addition to theheavy human cost, absorbs large amounts of financial resources and interfereswith economic activity. Second, the speed and determination with whicheconomic policy reforms are undertaken, is crucial to restoring confidence inthe government's ability to manage the economy. Third, the urgentrehabilitation of the economic and social infrastructure, which has beenheavily damaged by decades of war. Fourth, there is a need to get theeconomy -- especially its non-oil productive sectors (e.g., agriculture) backon its feet. And finally, there is a need to overcome the constraints onlonger-term development imposed by the shortage of skilled personnel and byenvironmental degradation. With peace and an appropriate policy environment,Angola has considerable growth potential in the medium term, in view of itsabundant natural resource endowment.
21. There is still, however, considerable uncertainty about theprospects for economic recovery in the short term. Even if the war comes toan end, it will likely take some time before the countryside is secure and.hero 4t wn affective transition to a peacetime economv. In addition, duringthe 18 months pre-electoral period which is expected to follow the formalceasefire, the prospect that the GoverAment will be able to concentrate onimproving economic management is uncertain. The end of the war may also notresult in lmmediate savings of resources; demobilization will take time, theintegration of the Government and UNITA forces into a national army mayrequire additional spending, and there are substantial costs associated withthe resettlement of displaced people. Moreover, while there are largebenefits to be gained from the rehabilitation of Infrastructure, realizingthem will take time and require large investments. Finally, despite theGovernment's renewed commitment to economic reform, weak economic managementis a serious constraint. Therefore, capacity building &ad technicalassistance .. of the sort the proposed project would provide -- will becrucial in strengthening policy formulation and implementation.
22. In view of these uncertainties and the Bank's limited countryknowledge at this stage, growth prospects and external resource requirementsare difficult to assess with any degree of accuracy. However, given thee=pected substantial reconstruction needs and skilled manpower constraints,it is clear that international assistance will be crucial during the post war
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reconstruction phase. This asslstance would have to consist mainly ofeconomic pollcy advice, technical assLstance in general and pre-investmentstudies In particular, and financial aid for infrastructure rehabilitationand development, as wvll as for facilitating the transition to a peacetimeeconomy.
Iank Groun Countrr Assistance Stratezi and Onerations
23. Angola joined the Bank Group in September 1989 and the proposedInfrastructure Rehabilitation Engineering Project would be the secondoperation in the country. The relationship between the Pank and Angola is,therefore, still at an incipient state, and has not yet reached the scope andintensity that is rrevalent in the case of long-standing members of theinstitution. The Bank's first strategic priority is, therefore, to furthernurture this relatlonship over the coming months by broadening the dialogueon the country's development needs with the Angolan authorities and the non-governmental sectors through lending operations, economic and sector work,and aid coordination. As contact between the Bank Group and Angola expands,confidence will grow and the dialogue can mature into the type of partnershiptypical of other Borrowers.
24. A broader dialogue would pave the way for the Bank to pursue theobjective of promoting economlc growth with equity in Angola. To achievethese objectlves, the Bank would follow an assistance strategy based on: (i)building capacity in economlc management and helping prepare pre-investmentstudies; (ii) facilitating the transition to a peacetime economy; (iii)helping rehabilitate the devastated economLc and social infrastructure; and(iv) supporting the process of economic reform by helping in the design andimplementation of macroeconomic and sector policies needed to stabilize theeconomy and restore production incentives. The Bank vould use considerableflexibility in desigaLng lts lending and economic and sector work programs inAngola, in view of the uncertainty surrounding the economic and politicalsltuation in the country. The volume of lending and the number of operationswill depend on the Government's progress in implementing the needed economicpolicy reforms, on the restoration of peace, securlty and politicalstability, and on the ability of the country to effectively absorb Bankassistance.
25. Lend4na Strate&v. The lending program for the period FY91-93comprises an average of two operatlons per year. The lending strategyrevolves around three elements. The inltial focus will be on technicalassistance and pre-investment operations. Subsequently, the program wouldexpand to high-priority rehabilitation and investment projects, particularlyin Infrastructure and the social sectors. Eventually, if the Governmentimplements appropriate policy reforms, the Bank would also consideradjustment lending, lf the country needs quick-disbursement assLstance.
26. The first two operations in the Angola lending program wouldprovide technical assistance, training and engineering services. Theyinclude the Economic Management Capacity Building project already approvedand the proposed Infrastructure Engineering project to provide assistance informulating policies, strategies and detailed pre-investment studies for therehabilitation of key transport and urban infrastructure systems. Technlcalassistance components are also included in other proposed projects, notably
support to Improve planning and Implementation capacity In the socialsectors.
27. The second element of the Bank's lending strategy involvesassistance for rehabilitation and reconstruction of the economic and socialinfrastructure and development of the productive sectors. Building onexperience to be gained with the planned social sector rehabilitation projectand proposed sector work in education and related fields, several operationsfocussing on human resource development (especially of women) will beconsidered. Rehabilitation projects are being prepared in the urban, energyand transport sectors, where the need for immediate rehabilitation can beclearly identified. This includes improvement of essential urbaninfrastructure (e.g., water, sanitation and solid waste) in theLobito/Benguela area to reduce severe public health hazards, and to ensurethe viability of other Lobito corridor investments. Based on the completedenergy assessment and a follow-up review of the power sector investmentprogram, a proposed operation in the energy sector would help to rehabilitatehigh priority power infrastructure and support the financial rehabilitationof the power utilities. In transport, in addition to the pipeline ofinvestment projects which would emerge from this operation, the Bank wouldfocus on the Lobito/Benguela rail corridor by rehabilitating present corridorinfrastructure to enable the system to handle medium-term transit andnational traffic demand, and establish the basis for future upgrading andexpansion of the network.
28. The third element of the Bank's lending strategy consists offinancial support, if needed, for the Government's economic adjustmentprogram, once the authorities have demonstrated a clear commitment tocomprehensive reforms by making sufficient progress in adopting key policymeasures.
29. Performance MonitorinA. The size of the Investment operations,as well as the speed at which they could be processed would depend on theevolving security situation, and on the Government's progress in adoptingsectoral reforms and improving implementation capacity. lhen the incentiveframework in the productive sectors improves, the Bank would undertakecatalytic investments in these sectors through Industrial restructuring andagricultural rehabilitation operations. Greater security in the rural areaswvould be an essential condition for agricultural operations, includingprotection of the environment. Government performance in implementing theEconomic Management Capacity Building project would also be an element takeninto account to determine the size and composition of future lending.Performance in macroeconomic management will be evaluated with respect toactions designed to correct the overvaluation of the exchange rate,liberalize prices, stabilize public finances, improve production incentives,and disengage the State from productive and commercial activities. Thevolume of eventual quick-disbursing assistance would depend on the country'sfinancing requirements, which would themselves be highly dependent on theevolution of the price of oil.
30. Economic and Sector Work. The key objectives of the economic andsector work program are to support the policy dialogue with the Governmentand to provide the intellectual underpinnings for the Bank's lendingoperations. As executing agency for UNDP, the Bank undertook, in 1989-90, an
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Introductory Economic Review of Angola and an Energy Assessment. Followingthe completion of these reports, the Bank's economic work has focussed onselected issues of economic reform, which has provided an input to theEconomic Management Capacity Building Project. A major report on Trade,Pric~e, and Wage Reform has been discussed with the Government in March 1991,and will be distributed to the Executive Directors shortly. In the future.the Bank plans to deepen its macroeconomic dialogue (including through jointmissions with the IMF) by initiating reviews of public expenditure and ofpublic enterprises. Sector work will focus on acquiring and broadening theBank's sector knowledge (in the productive and social sectors), thuscontributing to an expanding lending program and dialogue on sectoral policyissues.
31. Donor Coordination and Relations with the IMF. Many donors havebeen providing assistance to Angola for some time. As the Bank builds up itspresence in Angola, however, it can be expected to play a coordinating rolebecause of its multisectoral experience, as well as the overview provided byits economic and sector work. In parallel with the potential build-up of thelending program and the deepening of the understanding of Angola's economy,the Bank also plans to intensify its aid coordination efforts. One of theobjectives of the Economic Management Capacity Building Project is to helpcoordinate, where necessary, the various donor efforts in certain key areasof technical assistance. A central concern of this coordination effort is toavoid duplication of technical assistance activities. The Bank has also beencoordinating closely with the IMF in carrying out its initial policy dialoguewith the Government, and with the UNDP and bilateral donors in preparing thecomponents of the capacity building project.
32. Summary Assessment. Angola has made little progress in realizingits considerable development potential because of: (i) a destructive, costly,and-protracted civil war; (ii) a severe lack of skilled personnel, and (iii)misguided policies and weak economic management, as well as an inadequatelegal and regulatory framework. The Bank's strategy is to *spring open" arelationship with this new member by engaging the authorities in a dialogueon the country's development needs, supporting capacity building, helping torehabilitate the devastated economic and social infrastructure, facilitatingthe transition to a peacetime economy, and supporting the process of economicreform. The pace and scope of the Bank's assistance program will depend onAngola's progress towards peace and security, implementation of economicreforms and improvements in absorptive capacity. The initial focus wil.l beon an active economic and sector work program and technical assistancelending operations focussing on capacity building, notably in economicmanagement, and preparation of pre-investment studies. If the securitysituation improves significantly, a wider range of activities ininfrastructure rehabilitation would be supported. If the Government improvesthe incentive framework in the productive sectors, the Bank would expand itsoperations and bring forward investments in sectors such as agriculture andindustry. Finally, the Bank would consider adjustment lending, depending onthe progress in implementing comprehensive macroeconomic policy reforms aswell as on the country's financing requirements, which would largely hinge onthe price of oil.
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PART 11 - MEE CREDI
33. A recent economic review of Angola (Report No. 8906-ANG of June29. 1990) has defined the actions and priorities for the economic recovery ofAngola. Studies by the Southern Africa Transport and TelecoummnicationsCommission (SATTC) have further identified the problems of the transportinfrastructure sector. The need for rehabilitation of the infrastructuresector is one of the main areas of concern. The task would require long leadtimes and careful preparation of the necessary actions. The proposed creditsupports the objectives of the country strategy and the Economic ManagementCapacity Building Technical Assistance Credit (Report No. P-5525-ANG)recently approved by the Executive Directors, by addressing the need toformulate within the infrastructure sector, a Priority Investment Program(PIP), and enabling sector institutions to participate in Public ExpenditureReviews (PER).
34. The infrastructure sector is one of the major casualties of thelong lasting civil strife and economic mismanagement of Angola. The lack ofadequate funding for the maintenance, rehabilitation and expansion ofexisting facilities led to deterioration of the infrastructure. Controlledprices, absence of effective cost recovery and unclear institutionalresponsibilities resulting in loss of local technical and managerial capacitymade the situation worse. Decay and decapitalization are widespread in thesector. Inadequacies in infrastructure have become a major bottleneck to thedevelopment of Angola's economy and to improvements in the quality of dailylife. Thus, it is urgent to restore capacity and to build a pipeline ofprojects aimed at the rehabilitation and cost effective operation of theinfrastructure sector in Angola.
35. $ The.. adequacy. and,reliability of Angola's basic infrastructure,such as highways, ports, railways, and that of major population centers likethe capital city of Luanda, are fundamental to the country's economicrecovery. Before independence in 1975, Angola's transport and urbaninfrastructure supported and fostered the development of significantagricultural production and processing, and other industrial and comercialactivity. An example of good construction and maintenance before the onsetof the civil war is the continued existence of much of the basicinfrastructure in 1991, although it is deteriorating rapidly because of yeatsof low maintenance, war-related damage and severe overcrowding in major urbancenters such as Luanda. Deferred maintenance is the consequence ofn-sufficLent institutional capacity coupled with minimal allocation ofphysical and financial resources over the last 15 years. Rehabilitationrather than outright reconstruction is still possible with a substantial costadvantage. The country needs lmmediate assistance through sizablerehabilitation investments, organizational restructuring, human resourcedevelopment, management and operations improvement, and other related inputs.
36. The severe problems of Angola's infrastructure sector are notrelated solely to the lack of investments, equipment and spare parts, orinstitutional capacity. The macroeconomic and sector policLes in force inAngola since independence have aggravated the difficulties. The over-valuedlocal currency, for instance, cheapens imports, depresses exports, andcreates a scarcity of foreign exchange. Demand for foreign exchange far
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exceeds its supply, leading to forced allocations which do not reflect realeconomic priorities. This is one of the main reasons for the lack of spareparts which, In the long term, has rendered Inoperable substantialinvestments in equipment within the sector. Trucking companies have solvedthis problem in part by entering the parallel market to obtain spares whichallow them to operate, also In the parallel market, so they can recuperatetheir costs and turn a profit.
37. The lack of institutional capacity requires financing oftechnical assistance to prepare and program investments, study the policychanges required and develop the necessary capacity. On-the-job training oflocal staff, augmented by formal training on specific topics, also calls fortechnical assistance and skills currently In short supply In Angola.
Ratlonale for IDA Involvement
38. This project would be a key element in the Government's programof economic and financial restructuring. IDA's involvement In its financingwould provide badly needed leadership in promoting Institutional reform,Introducing cost recovery, strengthening infrastructure agencies, andcoordinating potential donor support to transport and urban rehabilitation.As a result of IDA participation, the process of capacity building In theform of institutional, manAgement and operational improvement and trainingwould support investment programming in the sector and would precederehabilitation.
Project Obsective
39. The primary objective of the project would be to support theeconomic recovery and further development of Angola infrastructure by mesansof the -rehabilitation of key transport and urban systems, and assistance inthe formulation of policies, strategies, rehabilitation plans, and programsof continuing maintenance.
Prolect Descriotion
40. The project would consist of the following principal elements:(1) economic and financial feasibility and basic engineering studies andenvironmental assessments for the rehabilitation and maintenance of theNational Basic Hihway Network (1511), the Namibe Port Transport System(MPTS), comprising the Port and the Mocamedes Railway, the UrbanInfrastrueture of the City of Luauda (UICL) and the tu:-n P*rt ° r^- --eportSystem (LPTS), comprising the Port and the Railway; (2) final design andpreparation of tender documents for selected priority investments identifiedin the above studies; (3) technical assistance for the Ministry of Planningand Luanda Provincial Government (urban), the Ministry of Transport &Communications (ports and railways) and the Ministry of Public Works andUrban Development (highways); (4) human resource development and initialtraining programs in critical categories for public and private sector(contractors) personnel; (5) repair or replacement of some equipment elementsof the systems; and (6) provision of office and residential facilities,including office equipment, vehicles, spare parts and supplies forconsultants and government agencies involved in the project. The project wasdesigned taking Into account lessons from experience under technical
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asistece (TA) projects Ln Aftica as reported to the Boardlf. (Detaileddescription of project components is provided la the Technical Annex (PartA)).
Ptoject Cost mod Timtbl
41. Total estimated costs of the project would be US$42.5 millionequivalent, of which US$37.7 million would be In foreign exchange. Becauseof the internal situation of Angola, a significant physical contingencyallowance has been included. The project cost sumary and the financing planare in Schedule A. Amounts and methods of procurement and disbursement, aswell as a disbursement schedule are In Schedule B. A time-table of keyproject processing events ti In Schedulo C. A project Implementation plan Isin the Technical Annex (Part B).
Aareeaments
42. Conditions of effectiveness ares (1) execution by the Governmentof implementation agreements setting outt (a) the specific ministries andagencies responsible for execution of project components, (b) necessarycoordination mechnisms, and (c) countorpart to be made available for workand training on the projectl and (2) compltion of satisfactory arrangementsfor project coordinatiog, Including the establishment of a project unit,selection and controlling of Its key staff (Annex B-3), and a plan andtimetable for the provision of housing and offlies that project consultantsvould use. Section 3.3 of the Technical Annex on project execution givesdetails of coordination and managerial aspocts. Project covenants include:(1) preparation of an action plan to implement cost-based tariffo, deregulateand privatize truasport; (2) formulation of an Investment program for theinfrastructure sector; (3) identification of initial policy, organisation andfunding mechaAisms necessary for the futuro development of the sector; and(4) auditing, monitoring and reporting requirements; and (5) opening of aproject account in US$ for government contrlibution to project finances. Ata required mid-term review, no later than eighteon montha after crediteffectiveness and prior to further disbursementa, the Government and IDA willevaluate and agreo ont (1) carrying-out ffnal designs based on completedfeasibility studiea, and (2) status of covenants above and identification ofadditional steps required.
*,. TX. need to establish full cost recovery in the infrastructuresector is a crucial requirement for Its effective operation and maintenance.This is reflected In all terms of refrence for the studies to be financed bythis operation. An action plan will addrses the deregulation of tariffs andplacement of all operations in the sector on firm comercial basis.Training, capacity building, and Institutional development will improve theperformance of sector agencies. Development of an investment program for theinfrastrueture sector will follow. The rehabilitation investments preparedunder this project will correspond to a first time-slice of the investment
ZJO1D Report 08573: Free-standing Technical Assistance for InstitutionalDevelopment In Sub-Saharan Africa, April 1990.
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program. The combined benefits of these undertakings are I (1) to contributeto the cost effectiveness and control of public expenditure In theInfrastructure sector; (2) to assist in the development of priorities in theInfrastructure rehabilitation process; and (3) to initiate the restorationand development of institutional capacity in the sector.
Risks
44. Little coordination exists between Government agencies and stateenterprises responsible for the project components. This lack ofcoordination and limited institutional capacity constitute the main source ofrisk for the project. However, the project's infrastructure systems wereoperational and relatively cost-effective until 1975. They have thepotential to becom so again once the internal security situation improves.Their future economic and flnancial viast lity depends upon flexibility in theformulation and adoption of comprehensive rehabilitation strategies throughfeasibility studies, technical assistance, and cost recovery policies. Stafftraining, provision of basic equipment and support services will help Improvethe local capability for planning and execution, but donor coordination willbe required during their implementation. Full attainment of projectobjectives will depend on: (1) the pace of capacity development; (2) theclose supervision and follow-up of the project by IDA; and (3) the effectivemanagement of tochnical assistance. The emphasis on technical assistance(section A.2 of Technical Annex) and the implementation agreements, necessaryto the preparation and coordination of the rehabilitation program, willgreatly reduce project risks. The potential benefits outweigh the risksdiscussed above.
Enviromeantal Aspeats
45. All project components have provisions for carrying outonvironmental assessments of the rehabilitation works to be studied. Aspecialist working at the central coordiating office at the planningdminstry will coordinate environmental aspects of the project. The projectwill also finance the expertise necessary to review existing legal andregulatory framewrk, and to propose modifications necessary to enhance thelegal foundations for future work in defense of the environment in Angola.The actions to be studied under this project will have a positiveenvironmental impact (section B.2 of the Technical Annex).
Reccuiendation. I am satisfied that the proposed credit would comply with theArticles of Agreement of the Association and recommend that the ExecutiveDirectors approve the proposed credit.
Barber S. ConablePresident
AttachmentsWashington, D.C.June 20, 1991
1s -
Schedule APape 1 of I
INFRASTRUCTURE REHABILITATION ENGINEERING CREDIT
Summary Proiect Cost and Financing Plan
Estimated CostProiects Categaries Local Loreian Total
(US$million)
1. Studies 0.92 6.59 7.51
2. Final Design 0.3S 3.75 4.10
3. Technical Assistance 1.08 8.36 9.45
4. Initial Training 0.16 1.52 1.68
5. Basic Equipment and Spares 0.71 7.15 7.86
6. Administration & Logistics Support
A. Office Equipment and Supplies 0.23 0.9S 1.18B. Vehicles 0.08 0.68 0.76C. Housing O.36 1.46 1.82
Notel The flgure. In pronthes ar t rtspeotlve amouns f inaned by IDA.N.A. i Not applicable.\a Contract for consulOtng service and tchnill asss"ltane.
/ A portion to be dtoermln during projet ImplOntation may use local shopping mthode.
V/ Housln eponditure will .. tly finance lports of prefabricated unlts and thelrsubsequeti Installation. Only smat construction Items ore expeabed. Dlosurascnt I will bconditioned to oeldence of 1epa title to the land by the spncies concerned.
Mac Nair (Urban Planning Consultant), Bernero (GOA Consultant).
4. Reviewers: Gattoni, Kohriki, Nayak (AFTIN).
5. Logistic support in Angolat United Nations Development Programme, LobitoCorridor Authority.
6. Managing Division Chief. M. BlancDepartment Directors F. Aguirre-Sacasa.
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Schedule DPage 1 of 1
SOWMS OP UKB GROX_PSASONS
(May 31, 1991)
The proposed credit which follows the Econoamic ManagementCapacity Building presented to the Executive Directors on June 19, 1991,vould be the second Bank Group operation in Angola.
"uazsuu S'R a o iMa www
MIl ox INW EY5n
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SIl IMIRASRC?h SECTOR
An Overview
?g'aneuort
1. Angola's basic infrastructure has strong colonialantecedents and is present configuration, though not its condition, isessentially unchanged since independence. In 1975, the system had acomprehensive modal mix which included rail, highway, air, cabotage andshipping, and provided an excellent opportunity for potential transitfacilities to match or facilitate economic development. A distinctive,lateral three rail-port corridor system -- north, central and southern -- supported by feeder road networks dominated the modal pattern.Additional highways provided very basic north-south provincial links, aswell as access to national borders. The air sector, which then linkedall key provincial cities, subsequently has become the only dependablemeans of passenger and light freight transit over much of the country,because of the security situation.
2. In 1987, Angola's transport infrastructure comprised 75,000km of roads, 2,500 km of railways, 3 international and 3 cabotage portsand a hierarchy of 31 airports. An estimated 12,000 non-military trucksand 400 buses, 40 locomotives, 11 long distance ships, 10 cabotagevessels and 21 aircraft operated infrequent modal services at low levelsof efficiency. Rail and port systems form distinctive corridors, whichpreviously ran eastwards from Luanda to Malange (a distance of 430 km)in the north, Lobito to Luau (1,350 km), a point close to the Zairianborder in the central heartland, and Namibe to Menongue (750 km) in thesouth. Regions are linked to these corridors by 8,000 km of pavedhighway and 67,000 km of secondary and feeder roads, which, togetherwith the air services, provide the main means of north-south travel.Cabotage currently accounts for 180,000 tons of freight between the fourmain ports and has potential for substantial growth. The Cabindaenclave is dominated by the oil industry and the non-petroleuminfrastructure is small.
3. Statistics on the system under the Ministry of Transport andCommunications (MINTEC) show total freight traffic for 1986 amounting toapproximately 3 million tons, about three quarters of the volume for1985, with the road and maritime sectors compensating to a limiteddegree for the continuing decline In rail traffic. In 1987, the numberof passengers carried fell below 25 million, following a decline in busservices which offset improvements in rail and air transit demand. Thetotal value of M1NTEC-controlled transport and communications servicesin 1987 was an estimated Km 17,631 million, of which S12 came from roadservices, 302 from air and the remainder divided fairly evenly among theother modes and communications.
4. Patterns of urban development in Angola since independencehave been determined mainly by the disruptive effects of the war.Guerrilla warfare and economic sabotage, including the widespread use ofantipersonnel mines, have destabilized agricultural activities and
- 22 -forced the rural population to seek safety in protected urban sites.Rural urban migration in response to economic factors is thus heavilydistorted by these war-induced population movements. The urbanpopulation has risen from an estimated 151 of the total population in1970 to 23Z In 1985, although no recent censue dta are available at thenational level. However, most observers agree that urban populationgrowth has been rapid since 1974. This growth is particularly evidentin the capital city of Luanda, where the population has risen from450,000 in 1975 to 1.3 million In 1985.
5. The large influx of migrants has overburdened the capacityof urban Infrastructure and public utility systems leading to a markeddecline in both service standards and service coverage. Lack ofmanagerial and technlcal cadres, limited equipment, and the precariousfinancial condition of public utility companies have resulted indeterioration of the systems inherited from the Portuguese In 1975.These same factors, combined with rapid and unplanned urban settlement,have caused service coverage to fall. With only limited investmentsince inependeace and grossly lnadequate maintenance, the basic urbanservices of water supply, sewage, sanitation, and refuse collection aremow in a critical state. The vlrtual absence of any urban planning orsites and services provision exacerbates this situation. Much of theurban expansion since 1975 has consisted of a proliferation of self-built housing In unplanned and largely unimproved communities(musseques) on the fringes of the main urban centers.
6. In sum, the infrastructure of Angola is In need ofrehabilitation, maintentace, and upgrading. Otherwis, it will become amajor bottleneck to economlc development.
1. The comercial port of Nsamibe is the third-ranking port ofAngola and the principal fishing harbor. It to located In the south-eest corner of Baia do Namibe. The minerals and oil port of Sacomarlies in the north-east corner. Sacomar port Is under the soame portadministration as Namibe. A Director General administers the Port ofNamibe assisted by managerial and technical officers in differentsections and departments. The port employs a staff of about 1,500poople. The anchorage in Baia de Namibe is good, with easy approachfrom the sea. Minimum depth in the approach is 10.5 a to the camercialquay.
2. The main port facilities include a total of 875 m gravitywall stone quay with depths varying from 10.3 a for the deep sea trafficto 6.0-3.0 m for coastal traffic and small local craft. Two cargoshads, together 7,1200 m2, are situated behind the deep-sea wharf. Openstorage areas are available behind the coastal wharf and between thesheds. The inland boundary of the port area iS, however, restricted bya continuous sandstone cliff about 40 a high, virtually limiting thewidth of the back-up areas.
3. In .1990, Port of Nadibe handled 206,700 tons of generalcargo, mainly Imports (902), for the Namibe hinterland. Trafficthroughput of the port has been growing at about 7X a year, on average,from 1980 to 1990. In 1973 the coastal traffic amounted to less than202 of the total imort-export traffic. In 1988 and 1989 the share was53 anGd dropped to 321 during iift. Container triffic hu. increasedfrom 8S in 1986 to 152 in 1990, equivalent to 27,200 tons of importedcargo. Containerisation has increased by almost 302 a year during thepost 5 years that the port has handled containers. This growth, inturn, has caused substantial operational difficulties in the port.
4. A major problem affectiag the quay operations Is thesettlement appearing on considerable portions of the apron surface,particularly under the Lner rails of the shore cranes. Pavement on theport roads and storage aroas has worn badly because of neglectedmaintenance and beavy loads stemning from the icreased containertraffic.
5. The cargo handling equipment ls old and has lacked propermaintainanes. The management cited technical inadequacies, shortcomingsIn the engineering department, and the lack of spare parts as maincauses of these problem. Equipment availability io currently less then202. Due to this extremely low equipment availability the port does nothave enough equipment to handle the current traffic, particularly the
- 24 - Annex Al-aCt)
Page 2 of 6
increasing numbers of containers. There is one ship-to-shore crane,which can lift 22 tons, to handle containers at the quayside, butsettlement of the quay apron hampers Its perfotmance. The port has onlyone container handling machine, which cean lift and transport thecontainers from the quay to the yard, but this equipment Is now out ofoperation and needs major rehabilitation. Fortunately, a privatetrucking company in Namibe operates one 42-ton forklift truck, and theport hires it to handle containers.
6. Increased container traffic and shortage of equipment havecompletely congested the port at the open storage areas. The containerdwell time is extremely high, more than 300 days, on average, forImports and exports. The port is holding more than 3,000 containers,which is beyond its storage capacity, and containers are scatteredthroughout the port wherever space can be found.
7. With the exception of 1983, the port of Namibe has operatedat a nominal profit since independence. However, the positive netoperating income recorded may be misleading because depreciation doesnot reflect the present value of assets. Additionally, few Investmentshave gone into the port during the period, creating a rather run-downimpression in the port's Infrastructure and equipment. Besides, theinstitution has not developed Its staff enough to ensure efficientmanagement of port operations, equipment, maintenance and furtherexpansion.
LONG-TERM OBJECTIVES OF PORT OF NANIBS
8. The Namibe Transport System, comprising the ports of Namibeand Sacomar. the Mloamedes Railway and the road from. Lubango to theAngolan/Namibla border at St.Clara/Oshikango, is fundamental to thedevelopment of Southern Angola or the Nsmibe hinterland. This regionincludes the provinces of Namibe, Huila, Cunene and Cuando-Cubango, one-third of the area of Angola with great potential for mining andagriculture. The Namibe Transport System also offers a shorter, andpossibly more economical rail cum road route for imports and exports forNorthern Namibia. The northern section is the most densely populatedregion of Namibia and offers a substantial potential for the developmentof agriculture and agro-industries.
9. The long terms goals and objectives of the port of Namibeare (1) to optimize the use of existing facilities and (2) to developthe port infrastructure, acquisitions and management to cater toexisting traffic as well as anticipated growth. The strategy to attainthese goals relies on increased productivity and cost effectiveness withthe generation of sufficient revenues to cover costs. Cost control alsois a major Input in evolving a competitive tariff vis-a-vis otherregional ports to sustain the market and lncreseo earnings.
- 25 - Aniex A2-a(i2Page 3 of 6
IRE PROJECT CONPONENT OBJECTIVES AND STRATEGY
10. The first step in achieving these objectives io to evolve along-term plan comprisang (1) investments for rehabilitation of existingfacilities and acquisition of new assets; (2) operations improvementstorganization restructuring; (3) introduction of a cost-based tariffstructure; (4) human resource development; and (5) systems improvementsthrough a development study. The study recomnendations would form thebasis for preparation, appraisal, and eventual approval of a portrehabilitation and modernlzation project. The IRE project would includetechnical assistance to improve port operations and equipmentmaintenance and repairs and to train human resources. The project wouldlay the basis for a more effective planning and implementation of themain rehabilitation and modernization program.
COMPONENT DESCRIPTION
11. The proposal for IRE for port of Namibe contains thefollowing components:
(1) Study
A feasibility and basic engineering study with an environmentalassessment for the rehabilitation nd Wmaintonance of port ofNamibe. The study will define the minimum short-term measures --maagerial, operational, investment -- onabling the port tooptimize the use of existing facilities. The study also willexplore how to create a commercially viable entity free fromreliance on Government support, and will propose developmentoptions for the port'. infrastructure to bandle existing trafficas well as anticipated growth for the period 1991-1995. The studywill furthor determine the feasibility and the optimm program ofinvestments In further upgrading and possibly expansion of theport facilities up to the year 1004. The study will give specialemphasis to traffic forecasts, strategies, £wman resourcedevelopment as well a tariff structure, foreign exchangerequirement and allocation. The TOR for the port study iscombined with the required study for the Mocamedes railway inorder to prepare a development programme for the Nadibe Transportsystem.
Estimated cost of the combined study for the railway and the portis US$ 0.86 million inel. US$ 0.375 million for the portcomponent.
(2) Technical Assistance
Operations and maintenance shortcomings are evident in all portactivities. In some categories, particularly mechanical equipment,the problems have become serious. Although lack of spare partsand skilled staff is the main cause, the root problem appears tolie in the institutional, administrative and managerial aspects ofport operations. Control and regulation, formulation of policies
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Page 4 of 6
*nd objectives, organisational structures and planning mechanismsare less effective than they would othemwis be. The Importanceof maintenane and Its costs reo not fully recognised. Budgets atthe goverment and port level have failed co provide sufflcientfunds to cover these costl, although this has resulted, in part,from lack of accurate information on costs. Furthermore excessivecontrol from government ministries $mpa$rs the port's ability tomanage its operational and maintoenaee functions This is mostevident In the approval of purchase orders for spare orreplacement parts, where it very often takes soveral months, orlonger, before an order eventually can be placed. Technicalassistance Is necessary for port operations, equipment maintenanceand port administration In ordor to lmprove the skills of staffwithin tbese departments and to introduce improved operational andadministrative systemS. The technical ssistance experts willIdentify urgently needed spare parts and effective ways to procurethem as well, discussing taproved methods to supervise repairs andto maintain equipment.
The project provides 60 man-months of technical assistance in thefollowing areasI
The port does not have enough sWkilled personnel for an enterpriseseeking to modernize its equipment and to Introduce new operatingtechniques. The initial training will be on-the-job sossionsconducted by technical assistanco experts. The consultant for thefeasibility study will develop a detailed training plan, based onthe manlyiss of existing personnel propared by the port of Namibecooperating with the tochnlcal assistanc expetrts. The generalobjective of the training plan would bet (1) to Improve the__~p tc-les of staff who can benefit fos fnvrther training; (2)
to train new staff to either replace those who will retire orncrease the lovel in accordance with port of NamLbe's development
plan for the concerned pteriod; and (3) to improve the managementand organization skills of managers and supervisors. The mosturgent training need will be implemented during the first phase ofthe ITE-project.
Estimated cost US$ 0.13 million.
(d) Xgui,mentls,,are parts
RadLo-communication equipmnt is the only major item proposed forpurchase under this component. Urgently required spare parts and
- 27 - Annex Al-&LI.Pasg 5 of 6
om* essential work-shop tools havo been lncluded to rehablltate4 fork lift trucks, one container handler, one tug boat end theweigh bridge connected to on of tho rail tracks In the port whichare Lmportant for granite exports. The technical assistantoxperts together with the port'o technical personnel willestablish final Identification of these itets. The technical
ssistanee xperts will *lso a*lot In preparing appropriateprocurement documents for approval by IDA.
Estimated cost Us$ 1.06 million.
(e) Loatstics Suisort
An acute shortag of houses exLste in amib. to accommodate thetechniSal assistance exprts and the consultant for thefeasibility study. Port of amibe has managed to make availableone 4 bedroom house for the project period. The house, however,has to be equipped with furniture and kitchen oquipment as well assome upgrading of the water supply system. Furthenmore, fourvehicles and some basic office equipment are needed for thetecbnlcal assistants and consultant.
Estiated cost US$ 0.23 million.
CONPONENT COST
12. The sumary of the cost for the port project would be asfollows:
(US$ million)you Local Total
- Study (0.375 ml In railway study) 0 0- TechnLcal Assistance 0.90 0.09 0.99- Trainin 0.12 0.01 0.13- Equipmeantspare parts 0.96 0.10 1.06- Logistics support 0.20 0.03 0.23
13. The credit for the IRE project io expected to be effectiveby Occober 1991. Terms of Reference for the feasibility study havealready been agreed to and a short list of potential consultants as wella. letter of Invitation io under preparation for Bank approval. It isanticipated that the study will be completed within 7-8 months after thecontract with the selected consultant i awarded. Procurement ofequipment and spare parts and technical assistance and training would
-28 -Annex Al-aCi)Page 6 of 6
begin two to four months after the credit is effective and continue fortwo years.
COMPONENT 5E ITS
14. The Port of Namibe has currently exceeded the storagecapacity of containers because of the poor equipment availability andthe extremely high dwell time of more than 70 days for imported fullcontainers and 300 days for empties.
15. High dwell time is expensive. Each additional day that afull import container spends in the port costs the economy an estimatedUSS 5, the capital cost of the goods, and another US$ 3-4 in demurragecharges to the container owner (assuming the container is not returnedwithin 21 days of discharge): i.e. a total of US$ 8.50. With currentimport volume of 2,250 twenty-foot equivalent units (TEUs), and theextremely high dwell time, this represents a cost to the Angolan economyof US$ 1.4 million per nnum. More importantly in the long run, highdwell time reduces the effective operation and capacity of the port.Ship's waiting time and freight costs would both rise and, once the porthas reached full capacity, it would lose all additional traffic.
16. It is anticipated that the IRE project will contribute to areduction of container dwell time by 502 over the project period of twoyears, which would allow the port to receive increased container trafficand reduce the annual cost to the Angolan economy from the US$ 700,000 ayear that it experiences now.
17. A major benefit would also derive from the IRE project inthe reduction in the total number of ship berth days and the number ofdays that ships spend waiting for a berth. Although the Angolan economywill not receive immediately the full benefit of the savings in ship'stime, ultimately it will be passed on in the form of lower freight ratesand demurrage charges.
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Annex Al-s(ii)Page 1 of 8
INFRASTRUCTURE REHABILITATION ENGINEERING (IRE) PROJECTCAMINHO DE FERRO DE KOCA_4EDES (CFRO COMPONENT
INTRODUCTION
1. The Namibe Port Transport System, comprising the ports of Namibe andSacomar and the Mocamedes Railways (CFM), is fundamental to the development ofsouthern Angola or the Namibe hinterland including the provinces of Namibe,Huila, Kunene and Ruando-Kubango. This area is about a third of the country and,has deposits of many minerals and stones such as copper, lead, zinc, marble,granite and kaolin. The area also offers great potential for (1) development ofagriculture, (2) establishment of agro-industries, and (3) export of agriculturalproducts to other regions of Angola and overseas.
DESCRIPTION OF 1THE NETWORK
2. CFM has a total route length of 907 km of which 756 km comprises themain line between Namibe and Menongue. Construction of the 756 km long main linecommenced in 1905 and was finally completed, along with the branch line fromLubango to Chiange, in 1961. Rails at first were 600 mm gauge but builders laterchanged the trackage to 1067 mm. To exploit the iron-ore mines at Jamba andCassinga, a branch line was constructed in 1966-67. The branch line connectedEntrocamento, a main line station 525 km from Namibe, to Jamba (17 km fromEntrocamento) and th_n extended to Tchamina (96 km), a station close to theCassinga mines.
3. In order to carry the predicted high volume of Iron ore traffic andoperate special purpose wagons with an axle load of about 20 tons, the track wasrelaid from the mines to the Sacomar port with 45 kglm rails. The line was alsoregraded, curve alignments were carried out and the Chela variant, connectingChela to Chanja by passing Lubango, was constructed resulting in a saving of adistance of 33 km. As a result of these changes, 595 km of track is fitted with45 kg/m rails and the rest, 312 km, with 60 lb/yd rails.
4. Originally steel sleepers were provided, but during relaying of themain line, these have been changed to wooden sleepers. The wooden sleepers have%AzLV&Ma&ad wit,h age and in, critical sectluus, have been replaced with usedsteel sleepers. The line is ballasted to varying depths with local granite. Allbridges are designed for 20-ton axle loads. Bridges on Namibe - Lubango - Jambaroute are in good condition. Four bridges on Menongue line and one on theCassings branch line have been sabotaged.
5. CFM has 35 main line and 8 shunting locomotives. Sixteen of the mainline locomotives are diesel electric of U-20-C type supplied by General Electricand 19 are diesel hydraulic of H 1500 type supplied by Krupp. Of the GElocomotives, six are in service, six can be repaired and four may have to bescrapped. Seventeen of the Krupp locomotives require overhauling. All shuntinglocomotives are diesel electric. CFM has a total of 1,416 wagons of which 94iare special purpose wagons for transporting iron ore. Approximately 1,040
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Annex Al-a(ii)Page 2 of 8
wagons, out of a total of 1,416, are tn service. Out of a total of 33 passengercoaches, 29 ore in service although tho condition of 17 coaches is very poor.With the paoenger traffic growing, the shortage In th. supply of coaches isposing a serious problem.
6. The main workshop at Lubango Is well-equipped. The workshop has goodfacilities for machining, casting and forging. The workshop can be geared tomanufacture for other enterprises. There is an acute shortage of trained staff.The large variety of deigns of locomotives used on CNN has added to the problemof maintenance. Exchange of Xrupp locomotives with GE locomotives of the LuandaRailway (CFL) can work to the advantage of both railways. The diesel shed atNamibe is well-equipped. CFN has a total staff strength of 1600.
7. Overhead open line wire circuit is used for communications. Traincontrol is centralized at the control office at Lubango station. The posts andline wire on the Sacomar - Lubango - Jamba and Cassinga routes were completelyreconstructed in 1966 with a three-pair circuit which Is used for block working,train control, inter-station and line side coumunications. The circuits areworking offectively except in the Carvalhais - Ceasinga Mine section, where theline has been sabotaged. The old open wire circuit on the section fromEntrocamento to Menongue is not operational.
OPERATIONAL AND FINANCIAL PERFOUNANC
8. Details of operatinSg and financial performance of CFN for the lastten years, i.e., 1981 to 1990, are given in Table 1. The operating ratio betweencost and income has, since 1984, been less than 100, indicating a surplus ofincome over cost. The ratio Wa as low as 502 during 1989 but deteriorated to752 during 1990, mainlr because of a decline in passenger traffic after thecurrency reform of 1989 . Part of the surplus resulted, however, from: (1) verylow allocation, only about two percent of the total ewponditure, for maintenancespares as a result of which major assets - locomotives, track, passenger coachesand maintenance equipment - are In a totally run-down condition; and (2) very lowcharge to depreciation due to not revaluing assets. Appropriate allocations onthese two components of cost coupled with heavy capital costs, such as debtservice charges, dividend on equity and increased depreciation', that would needto be incurred subsequent to undertaking heavy investments for rehabilitating therailway system, are likely to place CFMs' future profitability under considerablestrain,
9. Passenger traffic - around 2 million a year since 1986 - dropped to1.4 million during 1990. Freight traffic, also around 0.2 million tons and 45million net-ton-km (ntkm) since 1986, droppod to 0.15 million tons and 35 millionatkm In 1990. As a result, the revenues a well as the operating ratio dropped
S Cumwcyrm. axtigo CaM, sftdhIntpomyrduunhftotmonyhdmuAanndpurchsfgpow
a Cuwny, Mm b no ouWsadn ba ad no Iably fr debte or pament of ddeds.
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Annex Al-afii)Page 3 of 8
sipgificantly. More effective operations planning and aggressive marketing forreturn export freight traffic can enable the system to surpass substantially theprevious traffic levels. The incremental cost for such marketing would be quitelow". CFM also needs to plan to transport container traffic, currently almostnil. Partly as a result of this constraint, CFK carried only 202 of the cargohandled by the port during 1990. The level of accounts receivable is, currently,quite high, with heavy amounts due from government departments and publicenterprises.
10. Serious constraints to CPm's utilization of its full capacity andincreasing its share of freight and passenger traffic include: (1) pooravailability and reliability of its main line locomotives and passenger coaches;(2) systems and procedures falling Into disuse; and (3) most important,substantial dilution in the skill level and competence of staff at all levels --managerial, supervisory and operating. CPM's current staff strength of 1904 (32managerial, 150 supervisory and 1722 workers) is higher than necessary on thebasis of reasonable productivity and efficiency norms but the percentage ofcompetent staff is quite low. Human resource and organization development, andreestablishment of systems and procedures should Set the highest priority in anystrategy to enhance the commercial viability of CFM.
LONQ4UEM OEJEC2IVEB O? CPM
I1. Efficient and cost-effective transport capability is crucial to theeconomic growth of the southern region. Identifying and developing the right mixof transport modes for various types of traffic li absolutely essential toachieve this goal. With the inter-modal competition increasing, CFM's share oftraffic, both passenger and freight, would depend upon the extent to which CIMcan provide efficient and cost-effective service. An intensive program ofefficiency improvement and cost reduction by CPM is essential. In the long-tenm,CPH needs to pursue two main, though liter-related, objectivest (1) establishingadequate c-ap.CILy to enable CP4 to carry its due share of local and transit --to and from Namibia -- traffic by implementing a plan comprLesng rehabilitationof existing assets, marginal new investments, and improved operating efficiency;and (2) evolving and implementing a strategy and a plan for CFM to operate as acommerciall,' viable entity.
iP r.- i kOIIINEN? OC$WQN=R A3D 5
12. CFM component of IRS project aims at (1) understanding CFM's futurerole in the transportation sector; (2) establishing the basis for preparation,appraisal and eventual implementation of a project for the restructuring of CPRtand (3) concentrating upon human resource and organizational development andsystems improvement. A feasibility study will attempt to establish the techno-economic feasibility of various transport options and the task of evolving along-term action plan. For human resource and institutional development duringthe project period -- while the feasibility study is being carried out -- a
a CFMU ts eady negotfn to eor ftat of0 wnlwh sern fom a WMe of tonnereknt has a po*ia ofmadh a WMvlof 110 n*mnh
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Annex Al-a(ii)Page 4 of 8
program of training, technical assistance, computerization and logistical andadministrative support would be implemented. Equipment rehabilitation andlocomotive maintenance elements, also a part of the CPM component of the IREproject, would help CRM to increase its capacity to carry more traffic. Suchimprovements also would help in reestablishing systems pertaining to qualityassurance, spare parts management, procurement of materials and services,maintenance management, and costing, as well as providing opportunity for staffto get training in real work situations. IRE project also would lay the basisfor a more effective and speedier implementation of the main rehabilitationproject by exposing the organization to the complexities of project management.
COMPQ%N?N DESCRIPTION
13. The IRE project pertaining to CFM has six main components: (1)feasibility study; (2) technical assistance; (3) training; (4) equipmentrehabilitation, including locomotive overhaul and maintenance; (5)computerization; and (6) logistical and administrative support.
Feasibility Study
14. The major objectives of comprehensive feasibility study for CFM wouldinclude (1) forecasting the total demand for the transport of short and longdistance passenger and freight traffic in the southern region of Angola; (2)estimating CPM's logical share of each type of traffic, based on comparativeeconomic costs of competing modes of transport under different scenarios ofefficiency and productivity; (3) evolving a long-term strategy and an action planto enable CRH become commercially viable at some reasonable point in the future,(such a strategy would focus on operations restructuring and improvement, costreduction, rehabilitation of existing assets, new investments, human resourcedevelopment, organization redesign, optimal pricing linked to traffic forecastsand traffic demand elasticity, and capital restructuring): and (4) establishingthe framework of a Memorandum of Understanding between CFH and GOA setting forththeir respective authority and obligations for meeting the objective ofcommercial viability. This understanding would address issues pertaining topricing, foreign exchange allocation, reorganization, staff changes, implementingschemes for motivating staff, and creating rules and procedures for the efficientrunning of the railways. (The same study will cover the operation of the portof Namibe as described in section Al-a(i)).
Technical Assistance (TA)
15. Since independence CFM did not have the advantage of technicallyqualified and experienced personnel. As a result, systems and procedures inalmost all the departments require review, and updating. Common responsibilitiesof different experts under TA program would include: (1) improving systems andprocedures and implementing them; (2) establishing improved nomse of performanceand recommending measures for achieving them; (3) training the staff at themanagement level; (4) undertaking detailed training needs analysis to encouragepreparation of appropriate training programs; (5) computerization of the processof operations planning and performance monitoring; and (6) implementing theaccepted recomendations of the commercial viability study. Six experts Pre
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Annex Al-a(11)Page S of a
proposed to participate in the TA program. The extent and scope of theairspecific responsibilities, in addition to those mentioned above, would be asfollows$
(1) Locomotive and Rollinz Sto¢k Maintenances (a) establishing andImplementing optimal preventive maintenance schedules; (b)introducing system of quality assurance;(c) undertaking equipmentand process audit and initiating improvements; (d) and resolvingrecurrent maintenance problems; (18 months).
(2) Locomotlve and Rollint Stock Maintenances Same as above pertainingto electrical systems on locomotives and rolling stock; (9 months).
(3) Onerations: (a) establishing and implementing optimal train runningschedules and yard management practices; (b) Improving the levels ofvagon turnaround and locomotive utilizationg and (e) facilitatingImprovement In infrastructure and methods of handling cargo throughdiscussion with users; (18 months).
(4) Track Maintenance: (a) introducing system of Directed TrackMaintenance; (b) undertaking equipment and process audit andinitiating improvements; and (c) undertaking analysls of derailmentsand initiating measures for lmprovement including better maintenanceof sharp curves; (18 months).
(5) Suipl1es Devartments (a) undertaking a survey of all non-moving,slow-moving and obsolete item and recommend action; (b) introducingpreparation of a stores budget in discussion with user departments;and (c) undertaking equipment and process audit and initiatingImprovment; (9 months).
(6) Finance Departments (a) facilitating preparation of annualdepartmentall activity budgets; (b) introducing systems for eostcontrol; and (c) undertaking assets inventory and revaluation; (9months).
Trainin
16. Four training experts are proposed for employmeent f^-r nne m"onthseach. Their responsibilities would include: (1) designing specific trainingprogramv and preparation of course material for different groups of staff,grouped on the basis of education and experience level, age and training needs;(2) preparing training material for selected staff to act as traiters and conducttraining progrsms for them; (3) conducting pilot training programs along with theselected staff to act as trainers; (4) based on the feod-back, refine andfitalize the training programs; and (5) recommending advanced training programsand modes of training for specialized staff. Staff groups to be included fortraining under this program arot (1) operating staff, such sas, train staff,station masters, train control staff, and train checking staff; (2) locomotive
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maintenance, both in the workshop and the depotg, and operating staff; (3)rolling stock maintenance staffJ and (4) staff for msaitenance of track and trackequipment.
Eauiument Rohabilitation
17. New Ecuioment: No new equipment is proposed for purchase under thisproject. However, the agreement provide for procureme_t of spare parts toree.8oo1ioun (1) an induction furnace; (2) locomotive testing equipment; and (3)calibration equipment. A few sets of tools also will be Included.
18. Loeowotive Maintenance: Four of the 16 main line General Electriclocomotives are currently out of co.idesion, two because of accidents and twofor major defects. These locomotives are of U-20-C type fitted with an engineof 2150 H.P. The comierial viability study, under Its terms of reference, wouldmake recomuendations concerning the fealbility and modality of recomissioningthese locomotives. The mount of US$1.25 million has been set side for theoverbaul of some or all of these ocomotives if t (1) the overhaul is consideredfeasible both technically and economically; and (2) traffic growth trends areconsiatent with forecats.
19. Four personal cemputer *ystie n, wlth appropriate extenions, printersand software, are proposed for inetallation to improve the process of planningand to monitor prformance in the following departmentst (1) locomotive androlling stock maittensace workshop; (2) operations; (3) suppliesI and (4) civilengineering.
l-o1is0ca1 and Administrative Buoot
20. ?or Implementation of the project components of the commereialviabilt- setudy, TA and training, 12 to 15 erpetz et-- be In plate at one timIn Lubango, the headquarters of C0M. Boeuse of the auto shortage of housingIn the city, C01 will have to undertake construction of prefabricated houses andequip them with furniture and flttings. Use of pro-fabricated house should beconsidered to save til Moreover, for these exports also would need renovatedoffices. C0 Manbnageom- would determin details of the number of houses to bebuilt and equipped. A provision of US$ 0.45 million has boen made for houaingand a provision of US$0.1 millon for vehiclos.
21. The total base foreign cost of the component would be US$4.79 millionincluding the cost of the feasibility study for both CFM and the port of Namibeand US$5.93 million including of physical and price contingoncles. Thecorresponding local costs would amount to US$0.68 as bsoe cost and US$0.88million including contingencels. (Details of costs of vatious elements and thebais of procurement are In Table 2).
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Annx A1-a(AiiPage I of 8
22. The credit for the IRE project o eoxpected to be effective by October1991. Angolan counterparts already have prepared terms of reference of thecomercial viability study for the Namibe Port Transport System acceptable toIDA. After obtaining the necessary Bank approval for short list of consultantsand the Letter of Invitation, 4INTEC c"A invite offers and complete technicalevaluation and prepare to negotiate the final contract. Consislering thomobilisation period, the study Can begin by November 1991 and finih by June1992. TA and tradaing components could begin by Karch 1992 and end by September1993.
23. Even before the comencement of IRE, CFM has agreed to increase thelocomotive assignment for freight traffic from the current two to four and thuslncrease the freight-carrying capacity from 150,000 tons a year to 250,000 tonsa year, assuming the traffic is avaiLable. CF1 also would be in a position tocommence the return traffic of granite for export at a level of 3000 ton a mothand gradually increas It to 10000 tons a month by Deemiber 1991.
24. Implementation of the IRE project s oxpected to result In thefollowing benefIts i (1) sustain freight-carrying capaioty of SSO,000 tons a yearof Uports and 180,000 tons a year of exportsl (2) neraseo passenger trafftc by252 as a result of mproved aintenance and availability of locomtives andcoaches and prevento of tickt-leo travelling' (3) improve performanoresulting In an increas of revenue and decrease I unit operating costs andreduction in the operating ratio from the 1990 figure of 752 to about 602'; (4)begin to reestablish systm and procedures, computerisation of performancemonitoring, and training of staff; and (5) most mportant, establish a strategyand a clear plan for CFM to becom a coamercially viable entity.
UftthsmesWabsd CfenF&Fud (11A) - PAetoftis6IUWetaleMng&lWff fafamfmtfeMon ed euiaflUmWnb9udle (o)heb pa
' mnS m,iooepalU. wufieounnrdasn wumouemrlomlorivau ud beu jnelkn us aparWsuunder Oi Sprouot. Hort4ow esmeravmli _aonio
uqir _m nelah h*ms 3l *r4_pmsmteednm_r hbhlm m bo -n meows
1. Angola's basic highway infrastructure remains essentiallyunchanged since independence in 1975. The civil strife in subsequentyears caused the departure of the majority of the skilled Portuguesehighway personnel and resulted in a continuing decline of the highwaynetwork condition.
2. In 1987, Angola's highway network consisted of an estimated75,000 km, of which 8,000 were asphalt and 4,000 were surfaced withgravel. The paved and gravel portions of the network, together withapproximately 18,000 kmn of earth roads, provide the basic economic,administrative, and strategic links between the national capital, Luanda,and the provincial capitals and municipal centers. These roads alsoprovide access to railroads, port and airport facilities, and toInternational border crossings. In the future, this 30.000-km network,known as the "National Basic Highway Network* (NUN), will probably be thescope of respoAsibility of a new national highway agency recentlyorganized with the assistance of international consultants. The newagency resembles the general structure of the former autonomous highwaycommission of Angola (JAXA) which was abolished in 1975. Since then,responsibility for highways in Angola shifted between several departments
ud *~~~-- -~~ ttS.1.~ .. L- can- .** 4 ~rrud Ua.IViL;e.j. 01. the go-wer"ment. ... ' St S-5
throughout the country, the government made little or no effort to managethe overall highway sector. The new Angola Highway Institute (IDEA) beganoperations in November 1990.
3. The staff of INEA currently consists of one graduate engineer,a tecanical specialist, a secretary, amd an" epatriate te &a-±c±n.
Additional personnel, consisting of nine engineers, a geologist, aneconomist, a lawyer, nine technicians and nineteen administrative supportstaff, has been requested in the proposed INEA operating budget from Aprilto the end of Fiscal Year 1991. These personnel are available within theexisting staff of the Ministry of Public Works and Urban Development tlMINCONS) and other government agenciesienterprises.
4. As part of a short study for the creation of INEA, aPortuguese consulting firm retained by MINCONS surveyed the location andcondition of highway equipment belonging to MINCONS. The survey
I Formerly the MinLstry of Construction
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Annex Al-bPage 2 of 6
determined that, of 736 pieces of equipment identified, 21% were usable,61S were not operational, and the operational condition of 182 of theunits was not known. Information obtained from INEA indicates that alarge number of MINCONS' road equipment fleet was purchased new in 1980-81, but that a significant *umber of units did not function more than1,500 bours, because of improper operation or lack of maintenance, orboth.
5. The consultant also surveyed the position oce'pied, location,years In present position, and qualifications of highway personnel workingwithin tho MINCONS. The results indicated that of 973 individualssurveyed In tbhrteen of the eighteen provinces, 812 were qualifieds and192 were not qualified for the positions they held.
6. The consultant concluded that for new highway agency tound-rtake road rehabilitation and maintenance with its own forces, itwould require a total of 2,570 employes. They would consist of 150 forthe Luanda headquarters, 280 for regional offices and 2,140 for provincialoffices. The survey found that existing qualified candidates could fillonly 750 of the needed positions. This lack of quallfied candidates tofill current and future requiremnts for qualified highway personnel isbeyond the reach of a human resource development effort and an alternativeapproach is needed (para. 8).
7. An efficient highway system is critical for the economicrecovery and further development of Angola. During 1987 the highwaysector carried approxztately 1.1 million tons of cargo, representing 382'of nationwide cargo movments. During the some period,g more than 16.2mIlLion passengers, equivalent to 692 of all passenger movementsnationwide traveled by road. The end of the war will enable GOA toapl_ment Its economic restructuring programs, and Intensify operating and
finaiael& activity in all sectors. !IOwvar; m'. voahahS41tation andmainteance of the highwy frastructure lead the improvement process,the country's economic and financial perfomane will be severelyhampered. fighway rehabilitation and maintenance, together with thenecessary highway Institutional and mangnt improvements, are keyingredients to Angola's recovery.
LOG-Tym OIJZCTMSIV
8. The purpose of organising INSA was to manage the planning,design, constructlon, rehablitation and maintenance of Angola's highwaynetwork. The long torm goal is for the Institute to become an autonomousorganisation fully deriving its financial resources from user chargescollected through a "highway fund" echanism under consideration by GOA.Since policy makers also antlcaipat that most highway maintenance andrehabilitation work will be performed by contract, INEA would not hiremore staff, nor buy equipment for direct in-house operations. However,until the contractor industry develops sufficiently in Angola, INEA wouldhave to contract vork to foreign organisations. Some basic routinemaintenance may continue to be the responsibility of in-house labor and
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Annex Al-bPage 3 of 6
equipment under the direct supervision of INEA. Ultimately, INtA's staffwould consist only of ongineors and other professionals, surveyors,laboratory techniciamn, aid materials and construction inpectors.
IRE PROJECT COPONENT 0lJECTIVES
9. Considering these operatioal constraints for INtA, the proposedInfrastructure Rehabilitation Engineering Project (IRE) plans consultingservices to conduct a highway management study and prepare a highwyrehabilitation and maintenance program for the National Basic HighwayNetwork (NB3N). The project also will provide support and advice to thenewly formed INEA in settlng up the basic organisational andadministrative departments it requires. The consulting firm will furtheridentify ares" where INEA can make management and operational improvementswith available resources. Another objective will be to develop andinitiate a staff development program to train INEA personnel and highwaystaff of local road contractors. The consultant will make an assessmentof existing potential training facilities, lncluding the NationalUniversity and other technical education training institutions and presentrecomendations. The IRS component for the NBHN also envisions finaldesign and preparation of tender documents for th, highest priority roadsections -- estimated at 600 km. -- to be identified in the rehabilitationprogram.
COMPONENT DESCRIPTION
Manatemnt Study
10. The highway maagemnt study element of consulting serviceswill* (1) develop the necessary uanagement structure for lmplemntationand flnanaing of the rehabilitation and maintenance program; (2) reviewand recommend Improvements to the technical, economic, and financialresponsibilities and control mechanism. (3) review and recomendliprovements to existing staffLng plans, as well as other physical andfinancial resource requirements for INlA; (4) review and recommndimprovements as necessary for the implementation of INEA's policies,practices and procedureo, including design, construction and maintenancestandards and specifications, environmental assessments, hlghwaymaintenance program linked to the highway condirionas ;raiCic surveys saaprojections, user costs, and procedures for technical, economic andfinancial asessment of road projects; (5) develop procedures for locationand condition surveys of all highway construction ntd aintenanceequipment purchsed by GOA since 1975, including analysis of potentialrehabilitation, end alternatives for selling or leasing such equipment;and (6) review and recommend Improvements in the procedures forprocurement of consulting services, and for tendering of rehabilitationand maintenance contracts in complince with applicable Governmentregulations and international lending agencies' guldelines. This studywill require an ostimated 20 man-months of expatriate consulting services.
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Annex Al-bPage 4 of 6
Hixhwav Rehabilitation Study
11. The rehabilitation program development element of consultingservices wills (1) carry out a comprehensive survey of highwayrehabilitation requirements in Angola; and (2) develop a technically andeconomically feasible, environmentally sound, highway and bridgerehabilitation master plan for the NBHN, together with the necessaryhighway maintenance program. This will ensure that proper and continuousmaintenance will begin on rehabilitated roads lmuediately upon completionof the rehabilitation work. This element will require an estimated 30man-months of expatriate consultant services.
Maintenance Manatement System Implementation and Trainint
12. Computerized data base management systems are not presently usedin the national highway department. As part of the scope of work to beaccomplished under this component of the IRE project, local counterpartswill receive on-the-job training in the use of computers and in highwaymanagement systems and procedures.
13. The consulting services also will further: (1) design and guidethe implementation of a comprehensive maintenance management system forINEA, including policies, practices, procedures and standards forplanning, budgeting and supervising routine and periodic maintenanceoperations; (2) based on the overall rehabilitation and maintenanceprogram, conduct a training needs assessment and formulate and guide theimplementation of a continuous staff development and training program;(3) design and assist in the implementation of a program of technical andmanagerial assistance and trailnng for local consultants and contractors;(4) provide continuous assistance to INEA during the period of thecontract in the overall management of the Institute and the NBHN, and inpresenting the rehabilitatio-n program to international lending agenciesfor potential financial support. This component will require an estimated70 man-months of expatriate technical assistance in the followingfunctional areass
i ghway engineering. organization and management,. planning and budgeting:. environnental assessments,
14. In order for INEA to absorb the maximum amount of management,planning, and supervision skills from the expatriate consultants duringtheir contract period, local counterparts will work with the consultant ona daily basis. (A list of the planned local counterparts to be assigned
- 41 -Annex Al-bPage 5 of 6
by INEA has already been prepared). An estimated US$100,000 has beenincluded in this component to cover the cost of short overseas trainingcourses -- lasting six to twelve weeks, probably in Portugal -- of thefollowing INEA personnels
. one planning engineer,
. on economist,
. one financial analyst,
. one mechanical engineer,
. one computer programmer,
. one field project inspector,
. two secretaries.
Basic Eauitment and Administrative/Lotistic SuPport
15. The critical shortage of adequate housing for expatriateconsultant staff, and anticipated difficulties in obtaining equipment --delays of four to six months -- will require efforts to acquire theseelements before consulting services begin. A provision of US$560,000 hasbeen included in this component for consultant housing. Costs of basicequipment for traffic counts, weight control, communications, as well asfor office equipment and vehicles for consultants -- including operatingcosts -- amount to an estimated US$1.44 million. Since local procurementof spare parts and supplies is difficult, the foreign currency portion ofthis component's estimated cost includes an amount designed to make itpossible to purchase and import these items from outside the country.Principal types of equipment -- and spare parts and supplies -- include:
V vehicles,office equipment such as computers and coplers,traffic counters,weight control scales,communications such as telex, fax, radio.
COMPONENT COST
16. Costs of the highways component of the IRE Project will amountto an estimated base cost of US$8.47 million (US$0.90 million in localcurrency, with US$7.57 million in foreign currency) (see details inSection A3 and the suimmary below).
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Annx Al-bPsg. 6 of 6
ozeat EgtLmted Cost(Us$ million)
1. Studis 0 872. finl Desgn 4.103. TSchnical Assistance 1.404. Initial Tratnia 0.105. B"Sa Equipment & Spares 0.696. Admin.ILog$stlc Support
A. Office Equipmt, Speres & Supplies 0.58D. Vehicles 0.17C. Housin for Conmultants O.S6
1. Port of Luanda is the main port of Angolg ond is known aS 'one ofthe finest harbors on the West Coast of Africa'. Depths In the wideentrance from the Atlantic Ocean vary from 24 m to 33 m, and In thelarge anchorage from 15 to 30 a. It is vell protected on its seavardside by Ilh de Cabo, a low narrow island about 6,5 km long, joined tothe mainland at Lts south-west end by a causewy.
2. A Director GOneral, assisted by managerlal and technical officersIn different sections and departmemts, heads the Port of Luanda. Theport employed about 3,600 peopli as of January 1991, but plans to reducethe staff to approximately 1,0 0. TSh port curretly is negotiating acontract with a private steve ring company for operating actlvities.The contract probably will b. effective in the near future.
S. The main existing port facilities Include a total of 2,262 a quaylength with a total of 55,000 m2 covered storage areas In 18 cargo sbhdsand warehouses.
4. Angolan authorities have used the year 1973 as a reference yearwhen they compare port traffic development after Independence. lI 1973,Port of Luanda bandled 1,414,000 tons of general cargo, 602 for export.Average traffic from 1977 to 1980 was about 750,000 tons a year. Thetraffic from 1960 to 1090 has been volatile. Dry cargo declined up to1982 but then ton"ge increased with a growth rate of about 72 a yearfrom 1984 to 1990. To 1990 the port handled 1,124,500 tons of generalcargo, mainly imgorte (987,800 tonnes or 882). In 1973 the coastaltraffic amountod to approximately 332 of the total traffic(import/export). Tn 1988 the share was 72, and increased to 1 during1990. The composition of traffic also has changed. The increase incontainerisation has beon particularly strong, increasing from less than151 in 1984 to S52 in 1990, equivalent to 322,000 tons of imported cargo(23,515 TWBs). Container export consists mainly of empties.
5. Uhereas overall dry cargo -- excluding cabotage, oil and cement --has Increased at about 72 a year since 1984, container traffic has growaby more than 251 a year. This growth rate has caused substantialoperational difficulties in ship-to-shore actlvities as well as storageat the container yard, resulting in extremely high dwell time ofcontainers in the port. The numbers of containers In the port,averaging 10,000 In January, 1991, already exceeded the storagecapacity. Excess containers are scattered throughout the port whereverspace can be found. The figures obtained during the appraisal missionindicate that lmport/export containers spend 80 days or more, onaverage, In the port. The total number of containers on hand to
44 - Annex Al-c i)Page 2 of 7
considerably higher than the technical/operational capacity of theterminal and extremely high by international standards.
6. The main causes of the high container dwell time for importcontainers seem to be: (1) importers' shortage of funds to pay customsduties and handling/storage charges; (2) cumbersome customs clearanceprocedures; (3) slow onward shipment by truck and/or rail; and (4)delays in cargo handling by the port of Luanda, including searching forspecific containers resulting from a shortage of proper equipment andlack of a container tracking system.
7. The cargo handling equipment is old and has lacked propermaintenance for many years, mainly because of a shortage of spare partsand skilled mechanics. The port's statistics indicate that by January1991 less than 30 2 of the total equipment was operational. The mainreason why the port has been able to continue operating current traffic,particularly container traffic, is that the shipping lines have providedtheir own shore handling equipment to operate their vessels.
8. Civil structures -- quays, buildings, sheds, storage areas, roads,water supply, drainage, sewerage, electrical installations -- bearstriking signs of neglected maintenance. Signs of neglect areparticularly evident in the old parts of the port but also arenoticeable in the container stacking yard and along the container quays.
9. Accumulated waste all around the port is hampering cargo handlingand storage. Scrap, including scrapped or damaged cargo and handlingequipment, tend to remain in the port area, because no organizedprocedure exists for removal of these obstacles.
10. Port of Luanda's income statements for 1987-1990 show that theport is operating at a net profit, increasing from Rz 280 million in1987 to Kz 562 million in 1990. However, the net income is misleadingsince the depreciation -- Kz 30 million per annum -- does not reflectthe actual value of all operational assets. The tariffs, similar forall ports in Angola, are from 1985 and do not reflect the actual cost ofservices. Port of Luanda has elaborated a new tariff structure, but theGovernment has not yet approved it.
LONG-TEE)( OBJECTIVES OF THE PORT OF LUAOFA
11. The long term goals and objectives of the port of Luanda are (1)to optimize the use of existing facilities and (2) to develop the portinfrastructure, acquisitions and management to cater for existingtraffic as well as anticipated growth. The strategy to attain thesegoals depends on increased productivity and generation of sufficientrevenues to recover costs. Cost control also is u major input inevolving a competitive tariff to sustain the market and hence to improveearnings.
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Page 3 of 7
IRE PROJECT COMPONENT OBJECTIVES AND STRATEGY
12. The first step in achieving these objectives is to evolve a long-term plan. This plan should include (1) investments for rehabilitationof existing assets and acquisition of new assets; (2) operationsimprovements; (3) organization restructuring; (4) introduction of a costbased tariff structure; (5) human resource development; and (6) systemsimprovements through a development study. The study recommendationswould form the basis of preparation, appraisal and eventual approval ofa port rehabilitation project. The IRE project would further includetechnical assistance to help making badly needed improvements in portoperations and equipment maintenance as well as training of humanresources. Such assistance would lay the basis for more effectiveplanning and implementation of the main rehabilitation project.
COMPONENT DESCRIPTION
13. The proposal for the IRE project for port of Luanda contains thefollowing componentss
(a) Study
The overriding goals of the port of Luanda are to optimize the useof existing facilities and to develop the port infrastructure,acquisitions and management to cater for existing traffic as wellas anticipated growth. Over the past 15 years no major effortshave occurred to improve systems in the port operation andmanagement to cater to the changing environment, particularlyconcerning containerized traffic. The port of Luanda authoritiesintend to re-examine the current infrastructure and equipment andto evaluate the expected increase in demand for port services toplan comprehensive development of the port of Luanda.
& a4.lor^ffi^+ A+t-,y!Xse+^r ptt *e teeeA, z, i 'dc: re tc: (X)prepare an overall port development program for the period from1991 to 2004; (2) prepare a program for improvement in operations;and (3) recommend an appropriate financial strategy to expand portof Luanda's profitability.
The study will undertake detailed traffic forecasts, operationalanalysis, final engineering of emergency rehabilitation vorkrequired, and preliminary engineering investigations. The studyalso will make a finamcial and economic assessment of variousdevelopment options available to port of Luanda in order todetermine the improvements necessary to enable the port to handlethe traffic anticipated to the year 2004. the study will alsoexplore the possibility for diversification with the view toensuring financial stability.
Estimated cost for the study is US$ 0.66 million.
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(b) Technical Assistance
Operations and maintenance shortcomings are evident in all portactivities. In some categories, particularly equipment and civilmaintenance, the problems have become serious. Authorities saidlack of spare parts and skilled staff was the main cause, but theroot appears to lie in institutional, administrative andmanagerial problems in port operations. Control and regulation,formulation of policies and objectives, organizational structuresand planning mechanisms are less effective than they should be.The importance of maintenance and its costs are not fullyrecognized. Budgeta at the government and port level have failedto provide appropriate funds to cover these costs, although thishas resulted, in part, from lack of accurate Information oan costs.Purthermore excessive control from government ministries Impairsthe port's ability to manage its operational and maintenancefunctions. This is most evident In the approval of purchaseorders for spare or replacement parts, where it often takesseveral months, or longer, before an order eventually can beplaced.
Technical assistance is essential for port administration/operations, equipment maintenance, and civil works maintenance.Another goal of such assistance should be to improve the skills ofstaff within these departments as well as to introduce improvedoperational and administrative systems which would aim at higherproductivity of cargo handling and lower cargo dwell tine. Thetechnical assistance experts will help to Ldentify urgentlyrequired spare parts and assist in procuring them as well assupervise-repairs -and maintenance of equipmeut. Twelve man-monthsof proposed technical assistance for this port component has beentabled as unallocated. The rationale for this is to make itpossible to call oan short term experts during the Implementationof the project to help meet special requirements. Some exampleswould include electrical engineering for ship-to-shore cranes, orhiring specialists in stores and supply, finance andcommunication.
The Port of Luanda will provide qualified local counterparts towork with the foreign experts. The counterpart and the foreignexpert, with the support of the management, will work towards theeventual phasing out of the technical assistance position and thefull assumption by the counterpart of the responsibilities relatedto the job position. The counterparts should be nominated and inplace before the foreign experts will begin their services.Overseas training of counterparts might be advisable so thatcounterparts and technical assistants are not separated for morethan 202 of the period of assistance.
The component provides 70 man-months of technical assistance inthe following areas:
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- port administrationloperations 24 months- equipment maintenance 22 months- civil works maintenance 12 months- unallocated 12 months
Estimated cost US$ 1.25 million.
c) Trainint
The port has too few skilled personnel for an enterpris, seekingto modernize its equipment and introduce new operating techniques.Technical assistants will provide on-the-job training and theconsultant for the development study will develop a training plan.Data for the plan will come from analyses of existing personnelprepared by the port of Luanda in liaison with the technicalassistance experts. General objectives of the training plan willbes (1) to improve the competencies of staff who can benefit fromfurther training; (2) to train new staff to either replace thosewho will retire or increase the level in accordance with port ofLuanda's development plan for the concerned period; and (3) toimprove the management and organization skills of managers andsupervisors. The most urgent traainig need identified during thefirst year of implementation will be carried out during the secondyear of the IRE-project.
Estimated cost US$ 0.22 million.
(d) Eauipmentlsnare narts
The total need for spare parts and equipment for the port ofLuanda must be carefully assessed. This component thereforeincludes requirements (1) to keep the heavy fork lift trucksneeded to handle containers at a reasonable high operationalavailability and (2) to rehabilite two Jones mobile cranes, whichhave been in the port since 1985 without being commissioned. Theport of Luanda has agreed to put the mobile cranes into operationbefore any further rehabilitation begins. If necessary,authorities could transfer cranes to Namibe port. Technicalassistants, working with port staff, will identify workshop toolsand equipment, civil maintenance equipment, spare partrequirements and communication equipment before they submit thelist to the Bank for approval. A consultant engaged by the portof Luanda completed a study on computerization of severaldepartments within the port and issued it in 1990. This studywill be reviewed by the consultant assigned to carry out the firstphase of the development study. The mid-term review may includefurther discussions of financing initial stage of thecomputerization oroject.
Estimated cost USS 1.29 million.
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(s) Loaistice Su Dort
There is an acute shortage of houses in Luanda to accommodate thetechnical assistance experts and the consultant for thedevelopment study. Port of Luanda has agreed to arrange for threefully f'2rnished prefabricated houses, to be erected at a plotowned by the port adjacent to the port area. The port also willprovide six vehicles to transport the consultant for the study andtechnical assistance experts during the project implementation.The port also will provide basic office equipment.
Estimated cost US$ 0.46 million.
COMPONENT COST
14. The summary of the cost for the port project would be as follows:
(US$ million)Foreian Local Total
_ Development study 0.60 0.06 0.66- Technical Assistance 1.14 0.11 1.25- Training 0.20 0.02 0.22- Equipment/spare parts 1.18 0.11 1.29- Logistics support 0.42 0.04 0.46
Sub-total 3.54 0.34 3.88Physical and price contingencies 0.94 0.01 0.95
TOTAL 4.48 0.35 4.83
COMPONENT SCHEDULE
15. The credit for the IRE project is expected to be effective byOctober 1991. Terms of Reference for the development study as well asletter of invitation and short list of consultants have been preparedand agreed on during negotiations for the credit. Plans call forcompletion of the development study within seven to eight months afterthe contract with the selected consultant is awarded. Procurement ofeauipment and spare parts and technical amsistan.e and tralning wouldbegin twvo to four months after the credit is effective and wouldcontinue for two years.
COMPONENT BENEPITS
16. The Port of Luanda currently has exceeded its storage capacity ofcontainers because of low productivity and the extremely high dwell timeof more than 80 days on average for imports/exports. The lowproductivity stems from (1) shortage of equipment, (2) poor maintenanceof the infrastructure, and (3) an inefficient tracking system.
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17. High dwell time is expensive. Bach additional day that a fullImport container spends in the port costs the economy an estimated US$5, the capital cost of the goods, and another US$ 3-4 in demurragecharges to the container owner if the container is not returned within21 days of discharge, a total of USS 8,50. With current import volumeof 23,515 TEUs, and the extremely high dwell time, this represents acost to the Angolan economy of about US$ 16 million per annum. MoreImportantly in the long run, high dwell time reduces the effectiveoperation and capacity of the port. Ship's waiting time and freightcosts vould both rise and, once the port has reached full capacity, itwould lose all additional traffic.
18. A target for the IRS project would be to reduce the containerdwell time by at least 301 over the project period of 2 years. Thiswould allow the port to receive anticipated increased container trafficand reduce the cost to the Angolan economy by US$ 4,800,000.
19. Another major benefit of the IRE project would be a reduct!on inthe total number of ship berth days and the number of days that shipsspend waiting for a berth. Although the Angolan economy would notreceive immedic.tely the full benefit of the savings in ship's time,lover freight rates and demurrage charges would help the country in thelong tern.
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IXnnMCSWRR MAMTATION lSllllNe nX? ¢
DITASLUD PECS DISCIIP!IO
CGM=H DI RM Di LN (Cgm) UMtN
1. Luanda is the capital of Angola and a busy port with considerablepotential for growth. The hinterland of Luanda includes the provinces of Zaire,Uige, Bongo, KEanaa-Norte, Maloage, Luanda-Norte and Luanda-Sul. The LuandaRailway (Cfl) comprises a main line and 4 branch lines totalling a length of 537km. The main line links Luanda to the city of Malange, 424 km inland and 1153 mabove sea level, is the inland terminal of CnL, a center of a rich agriculturalarea producing coffee, sisal, cereals, cotton, tobacco and bee wax. Coffee growsmainly In igse, Kvanza-Norte, Jwanza-Sul and Bongo Provinces. The branch linesconnect Luanda to Cacuaco (18 km), Maceques to Xikolo (9 km), Zenma to Dondo (55ka), and Canhoca to Golungo (31 km).
2. In 1974 about 220,000 tons of coffee were exported through the portof Luanda, but because of war, production has fallen to less than 102. However,in 1984, coffee exports earned close to US$ 80 million. Other agriculturalproducts exported at that time included cotton -- 120,000 tons in 1973 and 30,000tons in 1984 -- and sisal -- 67,000 tons in 1974 and 20,000 tons In 1984. Amongminerals, iron and manganese ores have been mined in Malange Province and knowndeposits of copper and uranium also exist. Before independence, scantdevelopment took place in the Angolan Industrial sector. only food processingindustry in the Luanda, Catete, Dondo and Malano areas and after 1966 the textileindustry in Luanda and Dondo were permitted to produce, mainly for domesticconsumption. Now, considerable industrial development can be expected.
S. A Special Assistance Programm for Angola, including one for LuandaPort Transport System (LPTS), comprising CFL and the port of Luanda was preparedin 1988 by the Southern Africa Transport Communications Commission (SATCC). Inthe Special Assistance Programme for Angola, the rehabilitatLon projects for therailways and the hinterland road network amounted to US$ 180 million.
DISCaPTIOB OP THE UtWORK
4. Construction of a 600 mu gauge railway from Luanda Port to Fuda, 45km inland, was completed In 1888; later the gauge was changed to 1 m and the lineextended to Lucala (364 km) by 1899 and eventually to Malangc (424 km) by 1909.A 600 an gauge branch line was constructed from Canhoca to Golungo Alto in 1915.This 31 km branch climbs 511 m, the last 17 km at an average of 1 in 38. Twoother small branch lines were built from Luanda to Cacuaco (18 km) and fromMueeques to Klcolo (9 km). In 1944, a 5S km branch line was built to connectDondo to the main line at Zenza. In 1960 the track gauge was changed from 1 ato 3..6' (1067 mm).
5. All sleepers are steel, some dating from 1906 and many have beenrepressed and punched with new belt holes to accommdate the change of gauge.
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Annex Al-c(ii)Page 3 of 8
about 2500 is higher than necessary on the basis of reasonable productivity andefficiency norms but the percentage of competent staff is quite low. lumanresource and organization development. Rnd reegtablisbment of systems andprocedures, would require the highest priority in designing any strategy forturning around CFL.
LOpGTS -OJETS F O
9. Efficient and cost-effective transport capability is crucial to theeconomic growth of the area of influence of Luanda and defining the right mix oftransport modes for various types of traffic is absolutely essential. Withinter-modal competition increasing, CFL's share of traffic, both passenger andfreight, would depend upon the extent to which the railroad can provide efficientand cost-effective service. Implementing an intensive program of efficiencyimprovement and cost reduction by CFL is, therefore, of immediate importance.In the long-term CFL should pursue two major inter-related, objectivess (1)establishing adequate capacity to carry its due share of local traffic byimplementing a plan comprising rehabilitation of existing assets, marginal newinvestments, and improved operating efficiency; and (2) evolving and implementinga strategy and a plan to operate as a commercially viable entity.
IRt P!_J* CT COHPONENT OBJECTIVES ANDSTRATEGY
10. The CFL component of the IRE project aims at defining CFL's futurerole in the transportation sector. One goal is to establish the basis forpreparation, appraisal, and eventual implementation of a project forrestructuring CFL, concentrating upon human resource and organizationaldevelopment and systems improvement. A- feasibility study is designed toestablish the techno-economic feasbillity of various transport options and toevolve a long-term action plan. A program of training, technical assistance,computerization and logistical and administrative support will encouragedevelopment of human resources and instructions during the project period.Equipment rehabilitation and locomotive maintenance, also elements of the CFLcomponent of the IRE project, wll help CPL to increase its capacity to carrymore traffic. These activities also will help to reestablish systems related toquality assurance, spare parts management, procurement of materials and services,maintenance management, and costing, and will provide opportunities for staff toget training in real work situations. The IRE project also would lay the basisfor R more effective and speedier implementation of the main rehabilitationproject by exposing the organization to the complexities of project management.
CONPONENT DKSCRIPTIOI
11. The IRE project pertaining to CFL has six main componentst (1) afeasibility study; (2) technical assistance; (3) training; (4) equipmentrehabilitation including locomotive overhaul and maintenance; (5)computerization; and (6) logistical and administrative support.
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Annex Al-c(iL)Page 4 of 8
Feasibility Study
12. A comprehensive feasibility study for CFL is aimed ats (1)forecasting the total demand for the transport of short and long distancepassenger and freight traffic in the area of influence of the capital of Angolaand estimating CFL's logical share of each type of traffic, based on comparativeeconomic cost8 of competing modes of transport under different scenarios ofefficiency and productivity; (2) evolving a long-term strategy and an action planto enable CFL to become commercially viable at some reasonable point in thefuture. Such a strategy should focus on operations restructuring andimprovement, cost reduction, rehabilitation of existing assets, new investments,human resource development, organization redesign, optimal pricing linked totraffic forecasts, traffic demand elasticity, and capital restructuring; and (3)establishing the framework of a Memorandum of Understanding between CFL and GOAsetting forth their respective authority and obligations for meeting theobjective of commercial viability specifically with respect to the issuespertaining to pricing, foreign exchange allocation, reorganization, staffchanges, implementing schemes for motivating staff, and creating rules andprocedures for the efficient running of the railways.
Technical Assistance (TA)
13. Since independence CFL did not have the advantage of technicallyqualified and experienced personnel. As a result systems and procedures inalmost all the departments need review, updating and reestablishment. Commonresponsibilities of different experts under TA program would includes (1)iproving systems and procedures and implementing them; (2) establishing improvedtorms of performance and initiating measures for achieving them; (3) training theStaff at the management level; (4) undertaking detailed training needs analysisto facilitate preparation of appropriate training programs; (5) computerizationof the process of operations planning and performance monitoring; and (6)implementing the accepted recommendations of the commercial viability study.Your experts are recommended under the TA program. Extent and scope of theirspecific responsibilities, in addition to those mentioned above, would includes
(a) Locomotive and Rollina Stock Maintenances (1) establishing andimplementing optimal preventive maintenance schedules; (2)introducing a system of quality assurance; (3) undertaking equipmentand process audit and initiating improvements; and (4) and resolvingrecurrent maintenance problems (18 months).
(b) Onerations: (1) establishing and implementing optimal trainrunning schedules and yard management practices; (2) improving thelevels of wagon turnaround and locomotive utilization; and (3)facilitating improvement in infrastructure and methods of handlingcargo through discussion with users (18 months).
(c) Track Maintenance: (1) introducing a system of Directed TrackMaintenance (DTM), linking this with the purchase of track trolleys;(2) undertaking equipment and process audit and initiatingmprovements; and (3) undertaking analysis of derailments and
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Amnex Al-c lW)Page 5 of 8
initiating measures for improvement including better maintenance ofoharr curves (18 monthe).
(4) Protect Documentatlions (1) setting up a section for keeping recordsof all studies, investigations, reports, and action plans; (2)computerization of all records pertaining to progress Inimplementation of all action plans and recomendations; (3) settingup a system of monitoring progress of projects and programsl and (4)finally facilitating the development of a project planning andmonitoring section (6 months).
Trainina
14. The training program envisions employment of four training expertsfor 6 months each. Their responsibilities would Include, for their reopectiveareass (1) designing specific training programs and preparation of coursematerial for different groups of staff, grouped on the basis of education andexperience level, age and training neods; (2) preparing training material forselected staff to act as trainers and conduct training programs for thems (3)conducting pilot training programs along vith the selected staff to act astrainers; (4) based on the foed-back, refining and finalising the trainingprograms; and (5) recommending advanced training programs and mode of trainingfor specialized staff. staff groups agreed for training under this program aret(1) operating staff, such as train staff, station masters, train control staff,and train checking stafft (2) locomotive maintenance, both in the workshop andthe depots, and operating staff; (3) tariff and pricing; and (4) staff formaintenance of track and track equipment.
Basic Equiment and Spares
15. New -auipments New equipment to improve the quality of maintenancewill be purchased under this project. The equipment Includes (1) one locomotivetesting stand; (2) two numbers of calibration equipment; and (3) one test standfor performing running tests on traction motors. Track trolleys are alsoproposed to enable CIL to switch over to the system of DTM.
16. Locomotive Maintenance; Eight of the 17 main line General Electricand General Motor locomotives currently are out of commission. These locomotivesare the U 20 C type, fitted with an engine of 2150 H.P. and are about 20 yearsold. The commercial viability study, under its terms of reference, would offerrecommendations concerning the feasibillity and the modality of recommissioningthese locomotives. A total of US$1.2 million has been provided for the overhaulof up to four of these locomotives on condition that locomotive overhaul isconsidered techno-economically feasible and traffic grows as anticipated. Spareparts costing up to US$0.6 million have been proposed to enable CFL to maintaina high availability of locomotives.
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Annex Al-c(Ui)Page 6 of S
Comouterization
17. The project proposes installation of four personal computer systems,with appropriate extensions, printers and software. the goal is to improve theprocess of planning and to monitor performance in the following departmentst (1)locomotive and rolling stock maintenance workshop; (2) operations; (3) civilengineering; and (4) project documentation section.
Loglstical and administrative SupDort
18. To implement project components of the commercial viability study,TA and training, 12 to 15 experts can be in place at one time in Luanda, theheadquarters of CFL. Because of the acute shortage of housing in the city, CFLhas undertaken to build new houses on railway land presently lying vacant. Thecompany also will provide furniture and fittings. CFL would need to use pre-fabricated houses to build them in a short time. Offices for these experts alsowould require renovation. CFL management would work out details of the numberof houses to be built and equipped. A total of US$.l million has been providedto furmish houses and offices and US$0.05 million to purchase vehlcles.
COMPONENT COST
19. The total base foreign cost of the CFL component of the IRE projectwould be US$4.51 million and US$5.59 million including physical and pricecontingencies. The corresponding local costs would amount to US$0.61 as basecost and US$0.75 million including contingencies. (Details of costs of variouselements and the basis of procurement are in Table 2.)
COMPONNT SCEDL
20. The credit for the IRE project is expected to be effective by October1991. Terms of Reference of the commercial viability study for the Luanda PortTransport System are under preparation. After obtaining the necessary Bankapproval for a short list of consultants and the Letter of Invitation, MINTEC caninvite offers, complete technical evaluation, and prepare to negotiate and signthe contract. Considering the mobilization period, the study can commence byNovember 1991 and finish by June 1992. TA and training components could beginby March 1992 and end by September 1993.
COMPONENT BENEPITS
21. Even before the comnencement of IRE, CFL has agreed to increase thelocomotive assignment for freight traffic from the current one to three enablingthe additional container train to Dondo via Zenza to begin service and raisefreight-carrying capacity from 53,000 tons a year to 140,000 tons a year.
22. Implementation of the component would result in the followingbeuefites (t) sustained freight-carrying capacity of 190,000 tons a year ofimports and equivalent return container traffic; (2) a 252 increase in revenueearnings from passenger traffic as a result of a sustained program of preventing
- 56 -Amnex Al-ctii)Page 7 of 8
ticket-less travelling, estimated currently at about 50Z; (3) improvedperformance resulting in an increase of revenue and decrease in unit operatingcosts and reduction in the operating ratio from the 1990 figure of 1182 to lessthan 10OZ4s (4) a strong impetus toward reestablishing systems and procedures.computerization of performance monitoring, and training of staff; and (S) mostimportant, the availability of a strategy and a clear plan for CFZ to become acomuercially viable entity.
9 noTe m m a tshd en Ikude. (a) stretenng the 1the ougt (b) fncinhe uon imb " anwdegImId e n*be/u (o) ncesng th bWl of penates r paMWge caugt tut tk and enfrcg t mW
tow cumwr au woud be undewsn a a sepwat shady und te tain pointL Hobwsethe oxmeIl vibitydeinitonwud require te ntruleofinanc al fume elaeenand maor ehbllainfrmsown mour
Annex A1-c(LL)
57 Page Pofa
Table 1 Operadonal and Finanel Pesormmnea of CFL
Year Freilg tfif Passne tra.i Inom cost WaU 6pwITonno Tonne_i Passenger Passlkm KZ KZ KZ Ratlo
MA -8R SUPPLY. S .raGL STN( NM BLl WSnS bISPOSAL OF ,W
C:urrent Situation
1. The city of Luanda has experienced significant population growth in thelast 20 yeara. From a population of about 450,000 inhabitants at independencein 1975, the number grew to an estimated 1.5 million in 1988. with a per annumgrowth rate of about 102 in recent years. Serious health and environmentalproblems are counon. The city covers today an area of approximately 140 km2, andthe urban density varies from about 100 to more than 1,000 inhabitants perhectare.
2. The water supply system, under the responsibility of the Luanda ProvincialWater Company (EPAL), delivers water to the city from Rio Bengo. The system hastwo transmission and treatment facilities with a total nominal capacity of200.000 m3 per day, and an average production of 100,000 - 140,000 m3 per day.A third small facility, located to the west of the city, provides water to themunicipality of Viana, with a nominal capacity of 17,200 m3 per day and an actualproduction estimated at about 10,000 m3 per day. The total available storagecapacity is about 130,000 m3. Nearly half of it is not operating because of alack of pressure In the network or other operational problems. The distributionnetwork is about 520 km long. No lay-out or as-build drawings of the network areavailable with EPAL. The number of official house connections amounted to 61,000in 1989, with a total annual estimated consumption of 34 millions m3. Noinformation is available on illegal connections, water losses or unaccounted-forwater volumes. The general efficiency of the water distribution network is verypoor. As per accounting and cost-recovery, out of a total value of water billsoi Sid million Ex in 1969, EPAL has recovered only Z22 million Xz. Out of 310official public stsad pipes existing in 1990, only 96 are functioning while theremaining 214 are out of service for various reasons. A large part of thepopulation is served by parallel, public and private, systems of truck-distributed water.
3. Sewerage and storm drainage system are the responsibility oi 4beProvincial Government of Luanda (GPL). The networks are limited and in poorcondition. Severs and drains are generally out of order, clogged by soliddomestic wastes and all kinds of urban litter. Effluents discharge directly intothe sea or natural drains without any sewage treatment. Individual sanitationsystems, ranging from septic tanks to dry pit latrines, are spread widely overall areas of the city.
4. The solid wastes collection and disposal system also ie the responsibilityof the GPL. Managoment of the wastes collection and disposal system is presentlysub-contracted to a foreign private company. The system should be improved inthe urbanized area and extended in the suburbs. A new sanitary landfill shouldbe studied for final disposal of solid wastes.
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Annex Al-d(i)Page 2 of S
5. During the last 15 years, to improve the above described situation, GOA haspromoted an important set of studies. Implementation has been limited andpartial, hindered by lack of funds and management capability. Consultants shouldreview, evaluate, &t t update all available studies.
6. Furthermore, GOA recently has launched several investment co-operationprograms which are operating or scheduled to begin operating during the firstsemester of 1991. Other more limited programs are being considered orimplemented by the African Development Bank (AfDB), UN Organizations (UNICEF,'WHO, etc.), bilateral cooperation programs and NGOs. All these programs shouldbe considered and taken into account by the consultants for preparation of thestudies described hereafter.
Long-term Obiectives of Luanda Water Sunpiw. SeweraLe. Storm Drainaae and SolidWastes Disnosal Systems
7. The main long-term objective of Luanda water supply, sewerage, stormdrainage and solid wastes disposal systems should be attainment of an appropriatelevel of service for the whole urban commnity. The basis for the service shouldbe equity criteria, cost recovery, and consumers participation systems. Thefirst step to achieve these objectives is to elaborate a set of rehabilitationstudies comprising the overall inastitutional and organizational structure,comprehensive plans for the upgrading and extension of the systems, and anemergency program to be implemented in the immediate future.
IRS Proiect Sub-comnonent Obiectives and Strate.w
8. The rehabilitation study of the water supply, sewerage, storm drainage andsolid wastes disposal systems of the city of Luanda will have the followingobjectives:
sl) to improve the sector's institutional and organizational structureand provide the necessary overall coordination of all ongoing andfuture programs;
(2) to prepare a co-ordinated rehabilitation program of the sector'sinfrastructure;
(3) to execute the preliminary studies for a comprehensive appraisal ofa rehabilitation investment project;
(4) to promote the capacity-building and the institutional developmentof the related agencies; and
(5) to help establish appropriate cost recovery for the sector.
Bub-com_oneMt Deecrintio
I. The general coordination authority of the project, which is a component ofthe broader Infrastructure Rehabilitation Engineering Project (IRE), will be
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Annex Al-d(i)Page 3 of 5
vested In the Coordination Unit within the National Directorate for Investmentsand Construction (DNIC) of the Hlnistry of Plan (MP). The technical managementauthority of the project will be with the National Directorate of Waters (DNA).whlch, in this capacity. will act in strict coordinatioa with GPL and hPAL.
10. The sub-component will comprise the following elements:
(1) a study of the general institutional and organizational set-up ofthe sectors
(2) short term master plans for the rehabilitation and expansion of thesystems, including an emergency rehabilitation programs
(3) preliminary engineering and feasibility studies for the identifiedpriority camponents of the emergency rehabilitation program forsewerage, storm drainage and solid wastes disposal;
(4) preliminary engineering and feasibility studies for therebabilitation and extension of the water supply system;
(5) financial and budget management, tariff structure, accountingsystem, human resources management and development studies,formulation of by-laws for EPALs
(6) elaboration of Terms of Reference for final design and tenderdocuments;
(7) technical assistance to DNA and EPALs and
(8) initial training and basic equipment procurement for DNA and EPAL.
The technical assistance mentioned above under 10(7) will comprise thefollowing:
- one assistant to DNA for 24 months, for the general co-ordination andimplementation of the project, preparation of a country-wide sector study,and formulation of a national water codes
- two assistants to EPAL for 42 months, one to the General Director andone to the Technical Director (respectively for 24 and 18 months), forgeneral management and institution building, technical management,operation and maintenance organizations
- specialists in hydrology, hydrogeology, technical, and administrativespecific fields for 18 months, in several missions of about one montheach.
GOA will provide for the above technical assistance five furnished andequipped office spaces, four vehLcles, and all related support staff and servicesfor 24 months.
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Annes Al-dPage 4 of 5
Sub-coMnoent Cost
11. The total base cost of the foreign element is estimated at about US$ 5.50million, and at US$ 6.96 million including of physical and price contingencies.The corresponding local cost element would amount to US$ 0.63 million includingphysical and price contingencies. (Details of costs of various elements asuamary of the costs and the basis of procurement, are in Table 1, Annex Al-d(i)).
MSu-egW2no t Schedule
12. Terms of Reference for the studies and technical assistance comprisedwithin the sub-component are under preparation. After obtaining the necessarybank approval for a short list of consultants and the Letter of Invitation, DNAcan invite the offers, complete technical evaluation, and prepare to negotiateand sign the contract. Considering the mobilization period, the project cancormence by November 1991 and finish by October 1993.
Sub-comwoaent lensflts
13. Implementation of the IRS project ohould result in the following benefits:
(1) improved institutional, organizational and financial set-up of thesector,
(2) overall coordination of all ongoing and expected co-operationprograms in the sector,
(3) rehabilitation of the components retained in the emergency plan,after elaboration of the necessary master plan for each sub-sector,
(4) improvements of DNA and EPAL managerial perfonmance, and
(5) improvement of general health and sanitation conditions of thepopulation of Luanda.
1. The population of Luanda estimated at 2 million people in1990 represents one-fifth of Angola's 10 million people and about 45 ofthe total urban inhabitants. The rapid growth of Luanda, averagingabout 10 a year in the last decade, has overwhelmed the capacity of anurban infrastructure designed for a colonial elite of 250,000 persons.Some 701 of the present population live in overcrowded, informalsettlements without piped water, adequate means of human waste disposal,adequate storm drainage, electricity, solid waste collection, andsufficient housing, schools and other urban services.
2. A recent study found 761 of Luanda households depend onpublic fountains, vendors, and means of water supply other than pipedwater although in some neighborhoods, this dependency reaches 100?. Onaverage, water costs an estimated USS 1.00 ocr 200 liters.
*. The disposal of human excreta in Luanda was inadequate andpresented a serious problem as early as the 19509. There is no seversystem. Roughly 13S of the population disposes sewage by connection tothe storm drain network ending in the Atlantic. Another 162,reportedly, have septic tanks. The remaining 702 of the urbanpopulation use shallow pit latrines prone to flooding in the rainyseason. On averase, as many as 11 people share the use of a singlelatrine. The number of households with pit latrines varies from 502 to952 by barrio. Storm drainage in the musseques does not exist. Kitchenand bath sullage are disposed In the yards and passageways, creatingeatendiw'g black water ponds in soaw areas lacking drain outlet.
4. The first plan for Luanda in 1943 addressed only thesettlement needs of the colonial population. The native population wasestablished in informal and un-serviced settlements called musseques.The 1973 Master Plan recognized the requirement for new nativesettlement by designating barrio populares on the South African townshipmodel. The plan provided urban services, separate from the colonialcity, in the few sites that were built. This plan did not extendservices to the existing musseques. With the pressure of rapidurbanization and informal subdlvision of plots, the barrios populareshave grown. as have the older musseques, beyond the original populationdensities. They now resemble each other with haphazard subdivision oflots and poorly maintained infrastructure.
5. A 1979 master plan proposed clearing the musseques andreplacing them with medium and high rise apartments organized in
- 64 - Annex Al-dii)
Page 2 of 5
superblock configurations. Overly ambitious in their use of financialand other resources, these proposals remain unrealized. Basic urbanservices coverage remains the same to it was at the time ofIndependence. Subsequently in the early 1980s, the governmentencouraged new housing construction and urban expansion by returning theresponsibility for building to the prospective householder. Termedauto construgSoO by the law of the same name, this program provided
building sites with regular streets and lots, and, for those whoqualified, the right to buy construction materials at official prices.Largely appropriated by the middle class and those with influentialconnections, this program did not provide essential services such aswater and sanitation.
6. Effectively, urban planning and lnformed development ofurban services are non-existent. The 1979 plan policy of eradicatingthe musseques emphasised public buildings and the aesthetics of designInstead, overlooking the Importance of enviromental and financialresources. The result is a costly urban development pattern forinfrastructure servicing and one which is environmentally precarious.
7. The Goverament of the Province of Luaud (GPL) has limitedcapability for planning. Local development planning is a centralgovernment actlvity for the alleged reason that scarce personnel shouldbe used efficiently. Devolution of the responsibility for planning toGPL, and understandings achieved In discussions during the appraisalmission, are a first step. There ls nusufflcient professional staff tocarry out planning. More critically, there is a lack of knowledge ofthe uses and procedures of land use planning, that would create a demandfor it. These defiiencies can be remedied by beginniag to develop thecapabilities of professionals and technicians by means of on-the-jobtraining and work experience. The government has agreed to assign 10professionals and 26 techbicians to the study. They will come from theGPL, the National Institute for Physical Planning, and the GCodeol.c andCartographic Institute.
Urban Plannint in Luanda
8. The l13 Project will help reorient planning efforts InLuanda tot (1) improve lnformation and data about urban land fordevelopments (2) develop awareness of environmntal prthlo,w and needfor their corrections (3) improve planning skills including surveydesign and analytic skills; (4) transfer planning technology for theefficient assignment of land to uses; (5) anticipate infrastructureneeds and provide capacities to plan for those needs; (6) introducemethods of urban upgrading; and (7) develop institutional capability.
- 65 - Aox Al-dti¢)
Page 3 of 5
233 Protect Comgonent Obiectives and Strate&S
9. The objectives of the urban component of IRE are tot
(1) develop an approach to the future urban expansion ofLuanda, which will manage land use while enhancing theenvironment and minimising infrastructure costs;
(2) provide methods for the delivery of affordableservices aud upgrading of existing settlements withfull cost recovery;
(3) carry out a feasibility and final engineering studyand prepare an urban upgrading projects
(4) create awareness of the need to correct urbanonvironmental problems to improve living conditlonsand enhance public healths and
(5) help establsh a sustainAble urban upgrading process.
10. The urban infrastructure component for the city of Luandawill finance a study whlch will prepare a lnd development plan, anurbma upgradLog pilot project, and a priority list of projects forsubsequent project developmt work. Coordinated with water andsanitation master plan elements of the Lu anai 23 component, thecomponent consists of a two-year study which vlll Include institutionaldevelopment and provlde traintig to government personnel at the nationaland provlncLal levels.
11. The urban land use and Infrastructure plan will, (1) definepolicies to guide future urban expansion and configure streets andother Infrastructures (2) project future population settlements and landuses (3) determine the extent of the needs for basic urban services; (4)desLgnate ways to enhance, or protect, publle health and theeavironments and (5) minimize the costs of provlding urbaninfrastructure.
12. The pilot muhseque upgrading project to be prepared underthe study will demonstrate vays to lmprove the health, envlronmental,and living conditLons of the musseque inhabitants and designate ways torecover the costs of proposed investment. It will demonstrate that theimprovement of existing urban settlements is poseLble and affordable,enlarging possLbilities for greater application of upgrading in Luanda.The study will propose litegrated actions to Improve condLtions for Soto 40 thousand persons.
1. All training of approximately 40 counterpart staffconteplated will be on-the-job training. The consultant responsiblefor the study will train the counterpart staff by integrating them intothe study team. The conoultant w1il attend to the formal trainLng needs
- 66 - Annex Al-dtii)Page 4 of 5
which may become apparent. The only separate technical assistanceconsidered under this component is for environmental expertise totallingabout twenty-eight man-months. (Described in section B.2).
Datu Organization and ComDuterization
14. the use of computers is not widespread in the GPL. TheIntroduction of computers, and on-the-job training in the use ofsoftware, will increase analytic capabilities and achieve increasedproductivity which will help relieve some of the problems posed byinsufflcient numbers of qualified personnel. The study will assess thebest ways to organize study data, records, reports, and other documents,lncluding the need for computer application for information management.
Logistics Sunoort
15. Cost estimates allow for three pre-fabricated houses for thefive to six expatriate staff who will carry out the studies. This willprevent delays in establishing the team In housing-short Luanda. Theamount totals US$ 180,000.
Comnonent C0ot
Cost in Millions US8
ITEM LOCAL POREIGN TOTAL
1. Studies 0.20 1.60 1.80
2.a. AdmLnistration& Logistics 0.50 0.03 0.08
9.h. Vbtelo 0.t1 004 0.05
2 c. Housing 0.00 0.20 0.20
Base Cost 0.26 1.87 2.13mo _
Cgmgonent Schedule
16. After mobilisation of the consultants, the land capabilLtyand environmental analysis will be completed In six monthst collectionof general lad use and Infrastructure data for land use planning.definLtion and appraisal of alternative land developmeat strategies, andpreliminary development of the selected plan will take 12 monthst thecad8stral, income and other surveys for the upgrading will be completedin 6 months; the feasibility study of the musseque upgrading projectwill be completed in 12 months; completion of all work, includingdetailed engineering for the upgrading project, will be achieved withthe submLision of the draft final report at the end of 22 monthss and
Am ex Al dfi=- 67 - Page S of 5
final documents and reports will be received at the end of 24 monthsfrom the stact of the study. The mid-term review will review all workperformed during the first twelve months from the moment of deploymentof the consultants.
,Comonent Benef its
17. Major benefits anticipated by the study are:
(1) generation of population projections and other data,including mapping of infrastructure conditions for land useand other planning vork, assembly of information in oneplace for efficient referral for the study, and for otherstudies and projects being conducted in Luanda;
(2) development of a land use plan taking into considerationland-carrying capability to assist the coordination ofgovernment units and international agenciest
(3) preparation of a project of urban infrastructure upgradingIn a low income urban areas
(4) increased awareness oft (a) concepts of environmentalprotection or enhancementg (b) cost recovery and ability topay; (c) linkage of infrastructure improvements to publichealth improvements; and (d) on-the-job training of publicofficials;
(5) institutional and procedural change, or recommendations forsuch change.
18. Implementation of the urban plan and the upgrading project,would contribute to increases in urban incomes due to individual savingsof time, lower morbidity, reduction of days of work lost and incomeforegone, lower health costs, and diminished exposure to environmentalhazard. Construction of the infrastructure for musseque upgrading wouldcreate jobs, directly and indirectly, producing income for bothindividuals and local government. The infrastructure improvements wouldsupport creation of small enterprises, or make existing enterprises morecompetitive. The institutions brought into play by the component andtheir responsibilities are detailed in aectil- 3.3 o^ project executlon.
1. The IRS Project conceived as a TechnLeal Assistance Projectto prepare priorLty rehabilltatlon work of the Infrastructure sector inAngola, rests on the realization by IDA and the GOA that there is aneed to build instLtutional capacity pari-pasu with the preparatlon ofthe civil works requlred. Project desLgn has taken into account thefindings of ORD Report No. 8573 on TA projects in Africa.
2. The lack of institutional capacity calls for expertassistance on the engineering design and feasLbility study phases of theworks to be undertaken. The preparation work itself gives a uniqueopportunity to address the lack of capabillty issue. Most components ofthe project include, in addition to the consultants who will do thestudies, technical assistance to set up the procedures and mechanismsnecessary to the follow-up and analysis required within the miaistriesand sector agencles involved. Such technical asositance alone, will notbe sufficLent to build-up the capacity of these instLtutions,andtraining elements, both formal and on-the-job training, have been builtinto the project.
S. The careful definition of the technLcal assLstance aspectsof the project requires, nevertheless, a further ingredient to increaseits chance of success,i.e., regular IDA supervlslon as well as countrydialogue in the course of future economLc and sector ork. This sectionaddresses the areas to which special attention has been paid, theresources applied to the task, and administration and coordLnationaspects of the technlcal assistance and training included under theproject. Section B.4 shows the supervisLon plan of the IRE project.
Areas of SDecial locus
4. In bringLng forth the IRE project, IDA paid particularattention to the need tot
(1) brLig to bear relevant sector experience on theintegratLon of project preparation with technicalassiLtance, lnstitutional development, and staffdevelopment aspects of the project;
(2) plan for a substantial supervision Input to helpdetect as early as possible implementatLondifficultles and propose corrective actionst
-69- Annox A-2Page 2 of 2
(3) link the project to future sector work underdiscussion with GOA, reflected in the project'.conditionality which orients the sector institutionsto the most pressing sector issues and to the bestpossible use of technical ssistanc.l
(4) have terms of reference fully discussed for all keypositions for technical assistance In the course oftechnical discuwsions at the time of negotiations; and
(5) ensure that reporting associated to the project willallow the analysis of the contributions made by theexperts during project Implementation.
5. On the part of GOA, the salient features aret (1) a fitmcomuitment to the transformation of the Angolan economy; (2) desire toadopt a long term strategy to introduce cost effectiveness andliberaliation of the infrastructure sector; (3) interest inestablishing full cost recovery for all services as means to achievecost effectiveness; and (4) full acceptance of the need to Import --and borrow for -- the required expertise and skills.
Resources Allocated
6. The section A3 gives the resources allocated under theproject to technical assistance and training for a total of US$ 14.26million. This does not include estimates for the resource cost of on-the-job training when performed as part and parcel of the consultantswork in carrying out studies. The actual figures will be known at thetime of consultant selection. The costs of on-the-job training have beenconsidered in the estimation of the study cost when this has been chosenas the best vehicle for such training. The total above underestimatesio&ewvaat the actuwa resources devoted to technical assistane andtraining within IRE.
Coordination and Administration
7. Responsibility for each component's technical assistance andtraining will rest with the component's coordinator. A training andstaff development specialist will be part of the central coordinatingteam (Annex B-3 gives project execution arrngements) to assist Inmatters concerning the organization and monitoring of planned activitiesto avoid duplication and benefit from the complementarities which mayexist. The staff development specialist will be also responsible for theformulation of the staff development plan necessary across agencies forthe eventual preparation of sectoral Investment programs and expenditurereviews. This teak will be performed In close coordination with thework to be carried out under the Economic Management TechnicalAssistance Project.
Annex A-3- 70- Page 1 of 2
IWPRASIRUCIR RUABUTATIUN EGiN I CREDITDETAILE ESTIMATED COST
Estimated CoatProjec Elements Local Forelon Toal Iemarke
(US$ a IIIon)1. Studios
1. NM 0.18 0.O9 0.87It. NT O. Port 0.00 S." 0.00 Combined with CPU
b. Reilway 0.11 0.76 0.80I11. LPTS *. Port 0.05 0.6 S."
v. Railay a 0.07 0.45 0.52iv. UICL a. Watr Supply &
i. NMN 9.9 *.56 0.60i1. NMTS a. Port 0.91 9.09 9.06
b. Railey 9.96 9.46 0.50ill. LPTS a. Port 0.96 0.89 O."
b. Ra ilway .02 0.19 9.12iv. UICL a. Water pply &
Snltationb. Urban Planning 0.20 0.00 0.20
9.95 9.00 .96Sub-Total 9.80 1.46 1.02
7. Be Coat 0.97 81.89 85.27Physie l Contingenieso 0.46 8.40 0.59Pr1o ontin noae 0.87 8.00 8.87
Total Projet Cost 4.69 87.70 42.59
as teatuiwe of tx nd duties
Annex B-1- 72 - PPage of 3
ZIUPRAhCTURE URBUIXLTATION ENGDhhhRIN3 PROJECT
,JE CT AIHTANDt iOuNND MARNTA=
Procurement
1. Procurement capabilities would be assured by the centralcoordination offico in the Ministry of Planning and technical assistance(Annix B-3, para. 1). Procurement la expected to take place Inagreement with the implementation schedule of the project. Nearly 702of project procuremet will be subject to prior IDA review. No lesethan six contracts for an aggregate value of US$10.62million equivalent,Including contingencies, would be awarded on the basis of internationalcompetitive bidding (ICB), In accordance with the Bank's guidelines forprocurement associated with consulting services and equipment. To theextent practical, contracts would be grouped in bid paekages estimatedto cost the equivalent of US$500,000 or more to permit efficientprocurement. For the purposes of evaluation and comparison of bidsunder ICB, a preference of 152 or the value of the applicable customsduties, whichever is lower, would be allowed for material and equipmentmanufactured in Angola. Review of bid documents prior to contract wouldbe required for all consulting services contracts and for equipmentcontracts above US$75,000.
2. A number of small aiso contracts of leos than US$500,000 toimport prefabricateod. housing units. and 8$100,000. for goods-and notlikely to attract foreign suppliero, way be awarded on the basis ofcompetitive bids advertised locally, but also open to foreign firms.Agreement was reached during negotiations that a procurement seminarwould be held in Angola before credit effectiveness and Bank staff wouldteole t ohet epr ty to review the borreoer'e procedures foradvertising, public bld opening, clarity of evaluation criteria, awardto lowest bidder, non-exclusion of foreign bidders from participation,and need to obtain IDA's agreement the first time this procedure ioutilized. These contracts would cover malnlys (1) office equipment,furniture and furnishings for consultants end project coordination; and(2) minor rehabilitation of housing and office fel-rtt.,'consultants. In addition, loel shopping for contracts under $10,000will be allowed (para. 6 below).
3. The Bank's guidelines Including IDA review of short listswould be used to select the consultants for teachalcal assistance,training sad studies financed under the credit.
4. Locally procured goods as part of operating expenses, arenot eligible for IDA procurement. These would be procured from dealerson the basis of quotations obtained locally.
Annex B-1- 73 - Page 2 of 3
Disbursements
5. The categories to be finaced out of the IDA credit and theamount and the percentage to be financed in each category are asfollowst
OiSSEIMT ST CATEGoRIESp15.lion)
Prolect Eleme-n. unt of cdit X of Eloible LsEditute*
I.
1. Studies 6.Ce s (Of tot 1)
2. Flnal Dsign 8.75 9 (of total)
it.
1. Tschnicsl Assistance 0.80 ao1 (of tot I)
2. Initial Training 1.52 268 (oi' total)
III.
1. 9auIC Equipment & Spreo 7.15 100 (of foreign)
2. Administration & Logietice Support
a. Offie Equipment A SUppi.eel/ 0.s 100 (of foreign)
b. Vehicleos 0.8 IN (of foreign)
c. H4oueig/ 0.28 100 (of forelin)
IV.
1. Refinancing of PFP 1.60 Amount due
2. unellocated 7.24
Tota I Cot 87.70
6. Disbursements would be asgainst a statement of expenditures(SOE) for: (1) any contracts valued under US$10,000; (2) operatitgcosts; and (3) local training. Supporting documentation will beretained by the implementing agency and made available for review by theBank during supervision. The anual audits of the project accountswould Include a separate opinion on the disbursements made under the SOEprocedures. All other disbursements would be made against nonmaldocumentation submitted to the Bank. The schedule of creditdisbursements, given in schedule C, is based on disbursement profilesfor technical assistance projects In Africa, Including the adjustmentsnecessary to reflect refinancing of the PPF. The proposed completiondate would be December 31, 1995, and the closing date June 30, 1996.
l/Financed in part by PPF
- 74 - Annex B-1Page 3 of 3
7. Disbursements for the project will be made without recourseto a special account (revolving fund). To ensure availability ofcounterpart funds, GOA will open a project account in U8 dollars twomonths after effectiveness at a comorcial bank, with an initial depositof US$500,000 to be replenished every six months, and to be managedexclusively by the projoct coordination office. In the case of paymentsfor techical assistance and consultants contracts, procedure III of theBank Guidelines will be followed (Sank Guidelines, Annex II, pars11(i)). Monitoring, accounting and reporting will be done as indicatedin section B.3 on project execution.
VWLA
POSSBE ~ OF CWLT 1ES FMR eo PrOS£S
TI of Pcum
Task C£". Pt1 mdiv. Con..
1. Study o National alsc Hiohay Networkincluding technlicl assietance and trainng
2. Study of Nalbe Port/RalI Tran"sort System eIncluding technical assita nce and training
8. Study of Luanda Port includino technical aassntance and training
4. St"d% of Luand Railway tneluding technical a="siourls N 1trntaing
S. Study of Water SuppIly, Sewerae, Store aDrain&r a nd Solid Wasto Clapooal In Luanda1neuin technical au Sltace and training
0. Study of a Land Use nd Mussque Upgrading eStrtegy Including tochnieal alssstance andtraining
7. Technical Asistance to Project Unlt 5Including general advisor traintigadvisor *duInistrativ/ffnanclcal advlorand endironeantal advisor.
S. Legal advisor on environmental etters
- 75 - Page I of 2
INFRASTRUCUI$RE IMILITATION ENGIN NG PROJECT
BVIRONKEVTAL ASPECTS
1. Improvement of the urban envirorment and comervation ofAngola's natural environmet will be on inherent part of the IREProjects' objectives. Environmental rehabilitation should be a goal ofeach Project's component with a view to solutions based on bothenvlronmentally sound practices and sustasnable development.
2. The IRE Project refers only to rehabilitation of existingsystems. Nowever, such rehabilitation sbould provide for correction ofnegative environmental impacts Incurred during prior implementation ofthe system rather than perpotuating the resulting problems. EachProject component contains provisions for environmental ssesmentconsidering the rehabilitatlon vork both during and after theconstruction period.
3. RebabilLtation studies, upgrading and/or extension ofexisting systems -- ports-rallway, highway, solid waste,sanitationlsewege and drainage, urban core -- shall either re-design orpresent alternatives to elements containing a negative effect on theenvironment. The proposed solutions should consider the degree to whichdlrect and indirect negative impects justify such changes on the basisof long-term benefits to the Angolan society.
4. The Consultants for each Project component should identifyany such areas. Identlfication of altornativo and/or corrections forexisting systems hould follow, stressing long-term sustatnability ofthe system with speocal focus on low cost, easy saintenance solutions,local labor, and local materials. Consultants should evaluateenvLronomental and safety conslderations in the extension and/orestablisbment of process" necessary to the various rehabilitationrequirements.
Tochnical Assistance
S. Angola ha a weak logal and regulatory framework, data orapplicable information, and trained personnel to carry-on theonvironmental studies, coordination ad monitoring that the IRE Projectrequires. Technical asistane and training will be provided to buildthe Angolan capacity to perform environmental analyses, planalng andmonitoring, and set the bae for updating environmental legislation andregulations.
6. A consultant will direct development of the data base tosupport nvironmental assessments, planning and monitoring, and trainthe IMP? (National Institute for Physical Planning) counterparts. Thesecounterparts, In turn, will develop the ame environmnatal capacity for
Annex 8-276 - Page 2 of 2
the Provincial governments. PFinanced by the UICL component for twoyears, the consultant will also guide development of the lend managementand environmaetal analysis elements.
7. A second consultant, financed under the UICL component forsix months, will be stationed at the Ministerio do Plano (PlanningMinistry) as part of the IRE Project coordination team. He will assistthe GOA in the review of existing environmental legislation, propose andassist ln its update and in strengthening the institutional framework asnecessary to the rehabilitation and conservation of the Angolanenvironment. The consultant also will provide guidelines and the legaland regulatory framework for support of the MI's components and assureadequate supervision, coordination and long-term environmentalmonitoring of the Project.
-7 77 --
Annex B-3Page 1 of 5
llNF UWrnlDtUR"IAIULITATIONS &sIGINURING PROJECT
PROJEC= EXMCUTION
COORDINATION AND EMECUTION
1. There are seventeen ministries, national directorates, stateenterprises and other governmental units that will benefit from the IRE Projectin Angola, and will be involved in the coordination and execution of its fourprincipal components. They are listed under Reporting and Monitoring in para.6. Direct charge for general coordination and specific project components restswith the following ministriesothe Ministry of Planning (MINPLAN) as projectcoordinator; the Ministry of Public Works and Urban Development1 (MINCONS) andthe Luanda Provincial Commissariat (CPL), for the Urban Infrastructure of theCity of Luanda (UICL)I the Ministry of Transport and Communcations (MINTEC) forthe Namibe and Luanda Port Transport Systems (NPTS and LPTS)I and MINCONS for theNational Basic Highway Network (ElHN). Each project component will be theresponsibility of a specifically designated component coordinator. MINPLAN'sNational Directorate of Investments and Construction (DNIC) will be responsiblefor overall groiect coordination, and will chair a urolect steering committee.The committee will include the three component coordinators as well anrepresentatives designated by the Ministry of Finance and the Angolan CentralBank. It will meet twice a month to guide and direct the execution of theproject during its period of effectiveness. Each component coordinator willdevelop action plans and schedules for each component, submit them for review by-the Steering Committee, -and- forward them to IDA for comments.
2. Implementation Agreements will be signed before effectiveness. Theseagreements will stipulate that CPL and responsible ministries will giveindividual component coordinators ample powers to manage, monitors, audit andreport on the execution of their respectiv6 individual components. GUA hasdesignated the Ministry of Planning (MINPLAN) as its official representative inconnection with projects supported by the International Development Association(IDA). For purposes of the IRE Project, MINPLAN will grant ample powers to DNICfor overall coordination, monitoring, auditing and reporting operational andfinancial performance to GOA and IDA as frequently *ad In the level of detail tobe agreed upon at IRE credit agreement negotiations and included in theimplementation agreements. While urolect execution is scheduled for 30 montbs.a 42-month disbursement neriod has been retained. A mid-term review will takeplace eighteen months after effectiveness to examine the implementation of theproject, decide on the items which should be retained in the investment programfor the sector and select from these the projects for which final engineeringwill be carried out. At this time, project finances will be reviewed andreallocation of funds available to the project may take place as a result.
t Pormerly the Ministry of Construction.
- 78 -Annex B-3Page 2 of 5
3. A urolect u_it will be established to provide overall technical andadministrative upport to the overall project coordintor sai to the projectsteering coumittee. Members will Include a noneral advisor, a traisn advisor,an administrativelfinancig advisor, and an enviroggletal advisor. A singleconsulting fim would provide the personnel following applicable IDA guidelines.The specific responsibilities and operating procedures of the project unit, andthe terms of reference (TOR) for these consulting services were agreed upon atnegotiations. The project unit will be in place and Its general advisor andadministrative/financial advisor selected and contracted, prior to effectiveness.It will operate on a regular basis from the headquarters of DNIC in Luanda.However, the environmental advisor probably will devote at least 501 of his timewith MINPLAN's National Institute of Physical Planning (114W) to the developmentof environmental policy, procedures and guidelines for the overall transport andurban infrastructure sector. The general advisor will be responsible forcoordination and monitoring of all technical and managerial aspects of theproject, with particular emphasis on monitoring compliance with component actionplans and schedules, on procurement, and on overall supervision of all studiesand technical assistance. The training advisor will oversee all capacitybuilding studies, assure uniformity and efficiency in all programs, and Identifyand ensure application of local and external staff training resources availablefor the project. The Adminlstrativelfivancial advisor will develop andlmplement a system for maintaining records and accounts within the Individualcomponents and for the overall project, end will establish reporting proceduresand periodic auditing arrangements as agreed between GOA and IDA.
CONSULTING !R=ICES
4. OCA will recruit consulting services for studies and technicalassistance under Individual contracts or through consulting firms. Shortlists,letters of lnvitations and TOR, as well as the qualifications, experience,terms and conditions of contract for all specialists and consulting firms willbe In accordace with IDA guidelines and subject to prior approval by IDA (seesection B.2).
ACCOUNTING AND AUDITS
5. GOA will establish consolidated project accountlng, together withindividual component accounting. DNIC *nd the Project Unit will maintain recordsand accounts for all project components, while the component coordiastors willmaintain records and accounts for every element within each individual z=ronant.Accounting should adhere to accepted accounting principles and should record a'.1project expenditures, commitments, reimbursements and status of project funds.Accounts and statements of expenditure will be subject to annual audit byindependent auditors acceptable to IDA and submitted to IDA no later than sixmonths after the close of the financial year. The audit report will include aseparate paragraph on the auditors' opinion concerning the smounts withdrawn onthe basis of statments of expenditure. Accounting and auditing arrangementswere agreed upon at negotiations.
- 79 -
Amm J:Page 3 of 5
ORSING N-D MOITORI
6. 1Ea component coordintor should suit to the Chairma of theProject Steering c=mittee on a quarterly basis project component executionreports siarising progres attained, problems encounter", solutions proposed,and changes or adjustments to be made. The Comittee Wil review progr"s
gainst plans an take appropriate corrective action. Agenda an minutes ofComittee metis will be prepared by the Project Unit and transitted to IDAto facilitae project superison. Rorti a auting art ndprocedures have bee agreed upon at negotiations.
6.1. Ministris. directoratesz ad stote enterurlss directlyS loLved In theIRE uroect b G orsationl unit) }
(i) ministry of Pu1lai
- ^ational Directorate of Investments and Construction,In Project Coordiator
National Institute of Physical Planning
(ii) Mimistry Of Tr_aport a C
- tureen of Planning, Luenda Port Troaport System sadWulb. Port Trnporct System Componet Coordinator
- *-Rational- Directorate of Railways
- _Luand" Railway
Ihomades Railway
National Directorate of Merchant MIarne end Ports
- Porct of Nlmibe
- Port of Luada
(iii) MifNistry of Public Vock Urba Devlpmet'
- Angola Nighway Institute, National Blate HighwayNotwok Component Coordinator
'Foertly the Ministry of Construction.
- 80 -Annex B-3Page 4 of 5
(iv) LAtIud ?r1o0vInl Go'rm.rent
- Office of the Deputy Governor for Technical Affairs,Urban Infrastructure of the City of Luanda, ComponentCoordinator
- Luanda Provincial Water Enterprise
(v) State Sewretarlat for Energy and Water
- National Directorate of Water
6.2. GQA ministries. diLrectoratea and state enterprises to be involved In theIRE yroiect (by iroiect component):
($) National B ic igbeay Network (NME)
- MINISTRY OF PUBLIC WORKS AND URBAN DEVELOPMENT
= Angola Highway Institute, Coordinator
(iL) Xmibe Port Transport tystem (NPTS)
- MINISTRY OF TRANSPORT & COMHUNICATIONS
- Bureau of Planning, Coordinator
- National Directorate of Railvays
- National Directorate of Merchant Marine & Ports
- Mocamedes Railway
- Port of Namibe
(iii) Luanda Port Transport System (LPTS)
- MINISTRY OF TRANSPORT & COMHUNICATIONS
- Bureau of Planning, Coordinator
- National Directorate of Railways
- National Directorate of Merchant Marine & Ports
- Luanda Railways
- Port of Luanda
- 81 - Anex B-3
Page 5 of 5
Uiv) Ur"a Infr.atzctaz of the City of Luanda (UICL)
- LUANDA PROVINCIAL GOVERDMEN
_ Office of the Dleputy Governor for TechnicalAffairs, Coordinator
- Luanda Provincial Water Enterprise
-MINISTRY OF PLANNING
- Natioal Institute of Physical Planning
STATE SECRETARIAT FOR ENERGY AND WATER
Natioal Directorate of Water
(v) IEIR Project Coordinatio
- MINISTRY OF PLNNING
- Nationl Directorate of Investmerts andConstruction, Co
- MINIST OF TRANSPORT & COHMNXCATIONS
- Bureau of Planning, LPTS and NPTS Coordinator
- MINISTRY OF PUBLIC WORKS AND URBAN DEVELOPMENT
- wAgolp Highway Institute, MMN Coordinator
- LUAIIDA PROVINCIAL GOVERNME
- Office of the Deputy Governor, UICL Coordinator
- STATE SECRETT FOR ENERGY AND WATER
- MINIsY OF NANCE
- GOLA CENTRAL sAN
A==s B-4- 82 PasP 1 of 2
SUPERVISION PLAN
1. IDA SuDervision Inout Into Rev Actlvities. The total staffinput of 72 staff weeks Indicated in the table below is in addition toregular supervision needs for the review of progress reports, procurementactions, correspondence, etc. (estimated for this project to require fourstaff weeks per year for the duration of the project).
2. Borrower's Contributlon to Su2ervision. The borrower willcontribute to the supervision effort as follows:
(1) Progress reports are to be submitted as follows:
(a) in the form to be discussed during the first IDAsupervision mission$
(b) at the end of March and September of each yearg and
,c) by the project coordinator who will consolidate thereports prepared by the component coordinators assistedby the various contractors in charge of monitoring theimplementation of the project.
(2) Project review and monitoring will be the responsibility of theproject steering commlttee chaired by the Minister of Plannfingor his representative. in addition, day to day coordination ofthe project will be the responsibllity of the projectcoordinator and the component coordinators.
(5) The project coordination office will be responsible for makingall errangements necessary for IDA supervision missions and forproviding information required by missions. For mLisionsconcentrating on specific components specialist staff may bemade available by the component coordinator and the agenclesconcerned.
(4) Mission briefings on arrival and wrap-up meetings, normallywill be chaired by the Minister of Planning or hisrepresentative, with the participation of all componentcoordinators and the ministries concerned.
9-10191 Project start-up mission/ Task Manager, areview of letters of ProcMt.PAcctg,invitation to consiultants ?in. Repxttangsnd time-table for further end componentcontract processing specialists
11-12191 Procurement review and Task Manager, 6procurement seminar Procmt., Specialist
3-4/92 Review of contractors work Task Manager, 6on all components, set-up comp. specialists.time-table for completion Country Officerof studies, ant action plansfor covenant compliance
9-10192 Review of Draft Sector Task Manager, 6Investment Program sad comp. specialistsadvance of studies Country Officer
3-4/93 Mid-term review. Review of Task Manager, 14- al -contracts t-required comp. specialists
governmental decisions, Disb.Off. ,Countrydecision on elements to Officer, Lawyerundergo final eng. design,allocation of project funds
7-8/93 Procurement review, Review Task Manager, 6Sector Investment Program, cop. specialistsDe-control and DeregulationPlan, and privatisation time-tables
11-12/93 Review of progress in all 6componets
1994-1995 Three supervision missions Task Manager, 10per year, review implemen- comp. speciallsts each yrtation of project's leststages, follow-up on covenants,and Identify/prepare Investmentprojects in the sector.
TOTAL 72am
- 84 -
Annex B-5Page 1 of 1
RWIAATO PLAN1. World Bank Apprai"al Woaton - Angola February 9 - 28, 19
2. Revision of Terms of Reforence (TOR's), andLeters of Invitation Apri 1 -12, lf91
8. Revised TOR'* and LI'n submitted to the Ministryof Planning, Luands April 12 -19, 1l9
4. TORe and LOX's submitted to World Bank Apil 19, 1991
6. TOR's and LOI's rceived by World Sank April 28. 1991
a. IRE Project N 1 otaiotlono with World Sank InWash I ngtn, D.MC. way 22 - 29, 1991
7. Approval of IRE Project Credit Agreemnt by theOovernment of Angola June 9, 19S1
8. Letters of Invitation to Project CoordinationConsultants June 15, 1991
9. Letters of Invitatlon to IRE Consultants July 22, 1to1
10. Reception of proposals Projoct Coordination August 1. 1991
11. Evaluation of proposals for Project Coordinatton Septemer I$ 191
12. Rceive proposals from IRE Consultants October 20, 1991
18. Ngotiation of contract for Project Coordination October 15, 1991
14. Credlt Effectiveness October 21, 1991
15. Signature ot contract for Project Coordination October 80, 1991
10. Eveluation of IRE projoet proposals by Government ofAngola, and reniew/opprovel by the World Bank Oct 21 - ODc 15, 1991
17. tosotiations with IRE project Consultants In Luands Jan 10 - FPe 29, 19(of days maximum)
18. Government of Angola - Final IS/slan IRE projectcontracts with Consultants March 1 - 15, 1992(so days maxim4m)
19. Start of IRE project Consultants In Angola Apetl UI, 1992
26. Complotion of Studies Jan - Jun, 199S
21. mid-tsr Revlew July 1998
22. Preosntatlon to IDA of an action plan to implement: Ocember 1998
J i) Cost-based tariffs;tt) Deregulation and privatizatton of the
Transport Sector
28. Implementation of cost-bae*d tariffs may 1994
24. Start of Privatization of the sector September 1994
25. tnvestment Program for the Secor submitted to IDA November 1994
26. Import of equi and spares, and carrylng outoft fInaI dsgOn JulI. 199 - D0". 19
27. PrQoect Completion December 81, 19M
IBRD 22945
---'-6A80 5 / RANGOLA
INFRASTRUCTURE REHABILITATION ENGINEERING PROJECTCONGO TANZANIA PROJECT COMPONENTS
0 * MLAW PROJECT COMPONENTS- 0 SELECTED TOWNS
ANGOA - MAIN ROADS 0 PROVINCE CAPITALS
4 )5TT N & n ATION1AL CAPTAL
,, | ~~~~ZAMBIA *J-*- RAILWAYS MAIN ROADS
ZIOIRM00 tWA URBAN INFRASTRUCTURE *-9- RAtLROADS
, | ec01540A w } "~ .&. AIRPORTSAUL PtRJECT COMPONNtS SHOWN IN BID. A
12 a 4, PORTS
PR.OF ~~~~~~~~~~~~~~~~~PROVINCE BOUNDARIES
IAUNBR / , , , o T H E CO = IN1TERNATIONAL BOUNDAPES
I0LtOlAETERS 0 100 200 300 400 S00
M'BANZA ~ ~ ~ ZIR
LUCAPAP * S
tC". SUt ( < t~~~~~UNDA U
WA11DA NORTE MALAHJE
to OALATANDOLUANDA" ~~~~~~~MALANJE
SULIr4ft ~~~~~~~~~~~~~~~~~LUNDA UL T~ Wb.-b.0h0
,I NAN A LU t. 6
*~h , 16\ (
, \'12 T.7Whek + NAMBIA K.M4'd'( 1991
IBRD 22945
GABON Fit 4A ANGOLAdR 7 INFRASTRUCTURE REHABILITATION ENGINEERING PROJECT
