pages de senegal - ar dakar-diamniadio highway[1]

8/8/2019 Pages de Senegal - AR Dakar-Diamniadio Highway[1]

1/34

AFRICAN DEVELOPMENT FUNDLANGUAGE : ENGLISHORIGINAL : FRENCHDISTRIBUTION : LIMITED

PROJECT : Dakar-Diamniadio Highway Project

COUNTRY : Republic of Senegal

PROJECT APPRAISAL REPORT

PreparationTeam

Team Leader : Mr. Bamory TRAORE, Chief Transport Engineer, OINF.1, Extension 2223Team Members : Mr. Moctar MBODJ, Principal Transport Economist, OINF.1, Extension 2348

Mr. Roger GAILLARD, Lead Infrastructure & PPP, OINF.0, Extension 2132Mr. Leckram JOOTTUN, Environmentalist, OINF.1, Extension 2256Mr. Mamady SOUARE, Principal Transport Engineer, SNFOMrs. Mamouna SIDIBE-DIOUF, Infrastructure Specialist, SNFO,Mrs. S. BARA, Gender Specialist, OWAS.1, Extension 2397Mr. S. AMADOU, Legal Counsel, GECL, Extension 3333

Mr. M. DOUMBIA, Consultant, ORPF, Extension

Division Manager : Mr. A KIES, OINF.1, Extension 2282Sector Director : Mr. Gilbert MBESHERUBUSA, OINF, Extension 2034Regional Director : Mr. Frank PERRAULT, ORWB, Extension 2036

Mr. Massamba DIENE, ORQR.3, Extension 3395M M l k AMARA OINF 1 E i 2497


2/34

TABLE OF CONTENTSPages

CURRENCY EQUIVALENTS, ACRONYMS AND ABBREVIATIONS, PROJECT INFORMATION SHEET, LISTS OF ANNEXES

AND TABLES, BASIC DATA, PROJECT LOGICAL FRAMEWORK, IMPLEMENTATION SCHEDULE, EXECUTIVESUMMARY ..................... .......................... ......................... .......................... .............................. ......................... ....... i to viii

1 STRATEGIC ORIENTATION AND OBJECTIVES 11.1 Project links with country strategy and objectives 11.2 Justification for Bank intervention 11.3 Donor coordination 2

2 DESCRIPTION OF PROPOSED PROJECT 3

2.1 Project objectives 32.2 Project components 32.3 Technical options chosen and considered 42.4 Project type 52.5 Project cost and financing arrangements 52.6 Project area and beneficiaries 92.7 Participatory approach to project identification, design and implementation 9

2.8 Consideration of the Banks experience and lessons learnt in the project design 10

2.9 Key performance indicators 11

3 PROJECT FEASIBILITY 113.1 Economic and financial performance 113.2 Environmental and social impact 12

4 PROJECT IMPLEMENTATION AND MONITORING-EVALUATION 144.1 Implementation arrangements 144.2 Monitoring-evaluation 16

4.3 Governance 164.4 Sustainability 174.5 Risk management 174.6 Knowledge Development 18

5 LEGAL FRAMEWORK 185.1 Legal Instrument 185.2 Conditions for Bank Intervention 195.3 Compliance with Bank policies 20

6 CONCLUSIONS AND RECOMMENDATIONS 206.1 Conclusions 206.2 Recommendations 20

ANNEX I C ti i i i di t f th C t


3/34

CURRENCY EQUIVALENTS(April - 2009)

UA 1 = CFAF 736.928

UA 1 = US$ 1.49507UA 1 = EUR 1.12344US$1 = CFAF 492.906EUR 1 = CFAF 655.957

FISCAL YEAR1 January - 31 December

WEIGHTS AND MEASURES1 kilogramme (kg) = 2.205 lbs

1 metre (m) = 3.28 feet1 kilometre (km) = 0.621 mile1 square kilometre (km2) = 0.3861 sq mile1 hectare (ha) = 2.471 ares

ACRONYMS AND ABBREVIATIONSAATR Autonomous Road Works AgencyADB African DevelopmentADF African Development FundAFD French Development Agency

AGETIP Public Interest Works Implementation AgencyAPIX APIX Public Limited CompanyBG Bituminous GravelBOT Build Operate TransferCETUD Dakar Urban Transport Study CentreCFAF Franc of the African Financial CommunityCG Crushed GravelCIB Consolidated Investment BudgetDDTH Dakar Diamniadio Toll Highway

DPA Highway Project DepartmentDPS Forecasts and Statistics DepartmentEU European UnionIDA International Development AssociationIRI International Roughness IndexIRR Internal Rate of ReturnMCA/MCC Millennium Challenge Account /Millennium Challenge CorporationMEF Ministry of Economy and FinanceNEPAD New Partnership for Africas Development

Niayes Marshlands

ORB Open Road BarrierPAD Autonomous Port of DakarPAP Persons Affected by the ProjectPAST Transport Sector Adjustment ProgrammePIA Direct Project Influence AreaPIS Pikine Irrgulier Sud (shanty town)PRSP Poverty Reduction Strategy Paper


4/34

ii

1. Project Information SheetCOUNTRY : Senegal

PROJECT NAME : Dakar-Diamniadio Highway ProjectLOCATION : Dakar RegionBORROWER : SenegalEXECUTING AGENCY : APIX -SA

52-54 rue Mohamed V, BP 430, CP 18524, Dakar-Senegal; Tel (221) 338490555; Fax: (221)338239489;

2. Financing Plan

Source Amount in UA Million Instrument

ADF 45.00 Project Loan

CONCESSIONARY COMPANY 75.15

GOV/OTHER DONORS 47.31

IDA 70.23 Loan

AFD 53.41 Grants

GOV 44.49

Total 335.60

3. Important Financial InformationADF LOAN Currency Unit of Account (UA)

Interest Type Not ApplicableInterest Rate Margin Not applicable

Service Charge 0.75% per year on disbursed loan amount outstanding

Commitment Fee 0.5% on undisbursed loan amount 120 days after the signing of the LoanAgreement

Other Charges Not Applicable

Maturity 50 yearsGrace Period and Repayment ofADF Loan

The Borrower shall repay the loan principal after a 10-year grace periodfrom the date of signature of Agreement over a forty (40)-year period at arate of one percent (1%) per year between the eleventh and twentieth yearsof the said period and three percent (3%) per year thereafter.

FRR, NPV (baseline scenario) 20.16% and CFAF 66.13 billion

ERR (baseline scenario) CFAF 29.28% and CFAF 275.50 billion

4. Time Frame Key Stages (expected)Activities Beginning End

Project Preparation Mission 23/03/2008 07/04/2008

Approval of Project Concept Note 09/10/2008 22/10/2008Joint Pre-Appraisal Mission with the Other Donors 23/11/2008 07/12/2008

Procurement Process Review 08/02/2009 04/04/2009

ADF Project Appraisal Mission 09/04/2009 27/04/2009

Internal Appraisal Report Review 21/04/2009 31/05/2009

ADF Loan Negotiation 08/06/2009 08/06/2009

Translation, Distribution and Approval of the Project by the ADF Board 24/05/2009 08/07/2009


5/34

iii

LIST OF ANNEXES

Annexes

I. Comparative Socio-Economic Indicators of the CountryII. Table of the Banks Portfolio in the CountryIII. Map of Project Area

LIST OF TABLES

No. TITLE Page

Table 1.1 : Impact of Transport Sector in GDP 2Table 2.1 : Summary of Project Components 3Table 2.2 : Alternative Routes Considered 4Table 2.3 : Technical Options Chosen by Section

5Table 2.4 : Summary Cost Estimate by Component for Entire Project 6Table 2.5: Summary Cost Estimate of ADF Component 6Table 2.6 : Summary Cost by Expenditure Category for Entire Project 6Table 2.7 : Summary Cost by Expenditure Category for ADF Component 7Table 2.8: Sources of Finance for Entire Project 7Table 2.9: Sources of Finance for ADF Component 7Table 2.10 : Expenditure Schedule by Component for Entire Project 8Table 2.11 : Expenditure Schedule by Component for ADF Component 8Table 2.12 : Expenditure Schedule by Source of Finance for Entire Project 8Table 2.13 : Expenditure Schedule by Source of Finance for ADF Component 9Table 2.14 : Expenditure Schedule by Source of Finance for ADF Component 9Table 3.1 : Summary Outcomes of Economic and Financial Analysis 12


6/34

iv

EXECUTIVE SUMMARYProject Overview

1. The Dakar-Diamniadio Highway Construction Project concerns a length of 31.60

km. In the first phase, the Government, using its budget, financed the works on the MalickSy-Patte dOie-Pikine section (12 km) which should be completed by December 2009.Subsequently, it initiated a process for the construction of the last 20 km between Pikineand Diamniadio under a Public-PrivatePartnership (PPP) with public and private funds onthe basis of a 30-year concession with the installation of toll stations. The route of thehighway runs across irregular, unserviced and flood-prone districts. The project will: (i)restructure these districts, as well as develop and build houses and public utilities andcommercial infrastructure over a 165 ha resettlement area which will be fully serviced; and

(ii) close the uncontrolled refuse tip at Mbeubeuss in the Dakar region after identifying aninterim refuse disposal site and conducting studies on the construction of a waste burialcentre. Most of the people affected by the project (3350 families) will be rehoused in thisnew resettlement area. The remaining 30% will receive cash compensation, as they haverequested.

2. The project will contribute to: (i) improvement in the overall operation of thetransport system to support the accelerated growth strategy put in place by Senegal; and

(ii) strengthening regional integration through better competitiveness of Dakar Port andimplementation of the sub-regional rules concerning facilitation of transport. Since theDakar-Diamniadio section forms part of the Dakar-Bamako-Ouagadougou-Niamey trans-West African highway, it is the gateway to Dakar Port for trade with Mali and parts of theother hinterland countries and Guinea. Specifically, the project will create a rapid linkbetween the heart of Dakar and Diamniadio, which is the gateway to the new economicdevelopment pole, and will improve the living conditions of people living near the road aswell as those affected by the project

3. The project has 4 components, and will be implemented from July 2009 to May2014. For Component A Highway Construction proposed for Bank financing, theprocurement process which, in February 2009, led to the selection of a concessionarycompany, was considered acceptable by the Bank. The total project cost is estimated at UA335.60 million, comprising UA 231.40 million in foreign exchange and UA 104.20 million inlocal currency. For the financing of Component A (PPP), the contribution expected from theprivate concessionary company is about 42% of the cost of the works, excluding

expropriation costs. The remaining 48% of the cost will be contributed by the Governmentand donors (see Annex B1, which gives details on the sections as well as the logicalframework and key factors of the PPP). ADF contribution stands at UA 45 million.

4. The direct beneficiaries of the project will be the transport users of the Dakar regionand the inhabitants (300,000) of the Pikine Irrgulier Sud (PIS) district. The project willreduce overall transport costs and improve urban mobility It will improve the living


7/34

v

Needs Assessment

5. The extremely rapid increase in Dakars population and the development of districtshave not been accompanied by any significant decentralization of economic and social

activities and an integrated transport strategy. This has an increasingly negative impact onthe countrys economic development given the importance, on GDP formation, of theservices and industrial sectors, which are mainly concentrated in Dakar (85% of economicactivity is concentrated in Dakar). The major projects initiated by the SenegaleseAuthorities (new airport, special economic zone, Diamniadio industrial platform, the mineralport, etc.) to support the accelerated growth strategy are mainly located in the DakarRegion. The reduced travel time on entering and exiting Dakar will contribute to theachievement of the objectives of this strategy.

Value Added for the Bank

6. This project is one of the first PPP projects in the road sub-sector. It is therefore inkeeping with the objectives of NEPAD which consist in promoting private sectorparticipation in the financing of infrastructure. Since this is the Banks first experience in anoperation involving private and public financing, the project will serve as a model to giveimpetus to the PPP mechanism.

Knowledge Management

7. To effectively draw lessons from this project, a consultant (Egisroute) has alreadybeen financed to provide project management assistance. For specific issues relating to thelegal and financial aspects of the PPP, the consultant will rely on the appropriatespecialized APIX advisers (Norton Rose and Benjamin de Rothschild firm). In order toestablish the key impact indicators prior to project start up and their assessment during,

and at the end of the project, a consultant will be recruited. Information and knowledge willbe managed by the Monitoring-Evaluation Unit of APIX and will be disseminated throughthe Websites of APIX and the donors (AFD, ADB and WB) and in sensitization workshopsorganized by APIX.


8/34


9/34


10/34

viii

Implementation Schedule


11/34

1 STRATEGIC ORIENTATION AND OBJECTIVES

1.1 Project Links with Country Strategy and Objectives

1.1.1 The principal objectives of the countrys PRSP II (2006-2010) are broken downinto the following four priority areas: (i) create wealth through growth required to reducepoverty; (ii) improve access to basic social services; (iii) provide social security andmanage risks and disasters; and (iv) promote good governance and decentralized andparticipatory development. The four prime levers emerging from these four strategicpriority areas are: (i) wealth creation; (ii) capacity-building and promotion of basic socialservices; (iii) improved living conditions for vulnerable groups; and (iv) promotion of goodgovernance.

1.1.2 One of the reasons for the failure to achieve accelerated economic growth is therelatively high level of production costs, as well as the poor development of infrastructureto support economic activity, with the exception of telecommunications. The persistingproblems of urban mobility in Dakar, resulting in significantly longer travel times, areundermining the competitiveness of the economy. This project will help to remove theconstraints related to traffic congestion at the entry to Greater Dakar. In this respect, it is inkeeping with the countrys development strategy and objectives, in particular pillar 1 of thePRSP and levers (i) and (iii) of the strategy.

1.2 Justification for Bank Intervention

1.2.1 The Banks strategy for Senegal for the 2005-2009 period is based on two pillars:(i) improvement of the business environment with a view to achieving accelerated growth;and (ii) improved access to basic infrastructure. This is reflected in the pursuance ofongoing operations, the preparation of new operations under ADF XI in the areas ofimprovement of the business environment, water, sanitation, transport (roads and

railway). This highway project is consistent with this strategy. It will help to improve themobility of goods and persons in the region of Dakar (thereby improving the businessenvironment), as well as the living environment of people in the vicinity of the road.Furthermore, as part of its policy to integrate and open up the hinterland countries, theBank has, with cofinancing from other donors, undertaken the improvement andrehabilitation of the Dakar-Bamako highway by the South, of which this project is the firstsection. Thus, from 2000 to 2004, the Bank financed the rehabilitation of the Diamniadio-Mbour-Fatick-Kaolack road with the European Union (EU) and is currently financing the

Kdougou-Saraya and Saraya-Mali border sections in cofinancing with the WADB, IDB,JBIC and JICA, while the EU is financing the Birkilane-Tambacounda section.

1.2.2 The project will have a very significant impact on the implementation of theGovernments accelerated growth strategy. Indeed, by its developmental nature for theCape Verde peninsula, it is a prerequisite for the implementation of the major


12/34

2

1.3 Donor Coordination

1.3.1 In Senegal, the coordination and monitoring of PRSP implementation are carried

out by a National Steering Committee (CNP) which, at sector level, is supported byMinisterial Committees (CM), including the Transport Sector Committee. Periodicmeetings are organized with the donors. To finance this project, the Governmentcontacted several donors (World Bank, ADF, AFD, JICA, South Korea, the Nigeria TrustFund and the OPEP Fund). The World Bank, ADF and AFD confirmed their interest in theproject. The Bank fielded joint missions with the World Bank (WB) and the FrenchDevelopment Agency (AFD) for project preparation (from 23 March to 7 April 2008), thenfor project appraisal (24/11/2008 to 05/12/2008). However, in view of the time taken by

the Government to recruit the concessionary company, the Bank had to field a missionfrom 9 to 24/04/2009 to finalize the project appraisal. Following each of the joint missions,the financing plan, the loan conditions, the Aide Memoire and performance indicators ofthe project were jointly prepared by the donors involved. Furthermore, the different projectdesigns were reviewed jointly by the donors, who also shared their experiences on similarprojects. Such coordination will continue through the dialogue platforms in which theBanks Dakar Regional Office (SNFO) participates and through joint supervision missionsby the donors of this project.

1.3.2 The following table gives an indication of the share of the transport sector in GDPformation, as well as the levels of donor contributions. It shows that the Government, with52.81% of total investments, is the most important contributor to the financing of thesector from 2000 to 2006.

Table 1.1Impact of Transport Sector in GDP

Sector or Sub-sector Importance

in % GDP in % of Exports in % of Labour

2004 2005 2006 2004 2005 2006 2004 2005 2006Transport Sector 4.3% 4.2% 4.1% 4.4% 5.4% 5.5% 1.1% 1.1% 1.1%

Road Sub-sector 1.6% 1.5% 1.6% NA NA NA

Rail Sub-sector 0.4% 0.3% 0.3% 1.1% 1.4% 1.5% NA NA NA

Air Transport Sub-sector 0.8% 0.8% 0.8% 3.0% 3.6% 3.6% NA NA NA

Maritime sub-sector 0.03% 0.03% 0.03% 0.01% 0.00% 0.00% NA NA NA

Ancillary Transport Services 1.5% 1.5% 1.3% 0.3% 0.4% 0.4% NA NA NA

Stakeholders Annual Public Expenditure of Transport Sector (averages in CFAF million)

Donors

Years Total Govt. ADF IDA EU AFDWADB

Arab Fundand Others

(Private atPAD port)

2000 to 2003 in MCFAF 105 689 70 367 3 675 10 449 13 384 2 537 0 5 142 136

in% 100.00% 66.58% 3.48% 9.89% 12.66% 2.40% 0.00% 4.86% 0.13%

2004 in MCFAF 68 482 32 961 8 903 10 795 9 655 2 973 0 537 2 658

in% 100.00% 48.13% 13.00% 15.76% 14.10% 4.34% 0.00% 0.78% 3.88%


13/34

3

Level of Coordination

Existence of Thematic Groups Yes/No

Existence of an Overall Sector Programme Yes (PST1 2nd PST being prepared)/No

Role of ADB in Aid Coordination Lead/Member/No. Give name of lead donor* Source : PST Coordination; Arab Funds (IDB, Kuwait Fund, OPEC Fund, Saudi Fund) and other funds (ECOWAS

Fund, Nordic Fund)

2 DESCRIPTION OF PROPOSED PROJECT

2.1 Project Objectives

2.1.1 The project objectives are to: (i) improve the overall operation of the transport

system so as to support the accelerated growth strategy and promote regional integration;and (ii) provide a rapid link between the heart of Dakar and Diamniadio, gateway to a neweconomic development pole, and improve the living environment of people living in thevicinity of the road.

2.2 Project Components

2.2.1 The components of the entire project are summarized below.

Table 2.1Summary of Project Components

N. Component Name Estimated Costin MUA

Description of Components

A - CONSTRUCTION OFHIGHWAY WITH TOLLSTATIONS

214.41 A.1 -Installation of toll station on the Patte dOie Pikine section (5 km)A.2 -Construction of the 2x3 lane highway section on a 33 m right-of-way between

Pikine and Thiaroye (2.8 km) with the construction of junctions, interchangesand toll stations

A.3 -Construction of the dual carriageway section of highway on a 33km right-of-way between Thiaroye and Diamniadio (17.6 km) with the construction ofjunctions, interchanges and toll stations

A.4 -Construction of stormwater drainage structures and installation of signs and ahighway protection system

A.5 -Environmental protection works and measuresA.6 -Clearing the highway rights-of-way

B - DEVELOPMENT OFTHE TIVAOUANEPEULRESETTLEMENTSITE

75.86 B.1 -Clearing the rights-of-way in the resettlement zoneB.2 -Development of the resettlement zone (earthworks, parcelling, full servicing,

construction of more than 2000 dwellings, places of worship, social services,wastewater treatment stations, etc) and operation to move the people to thesite.

B.3 -Construction of primary roads connecting this zone to the road networkB.4 -Closure of the Mbeubeuss refuse tip (find a temporary site, close to the

Mbeubeuss tip and conduct a study on the construction of a final Waste BurialCentre (CET) at Bargny and for the long-term treatment of the Mbeubeussrefuse tip) ;

B.5 -Works and environmental protection measures, particularly as regards MBAOforest;

B.6 -Works control and supervision


14/34

4

D - MANAGEMENT ANDMONITORING OFPORJECT

IMPLEMENTATION

6.73 D.1 - Operating costs (personnel, materials, supplies, external services)D.2 - Project management assistance APIX (AGETIP, Consulting firm)D.3 - Monitoring-evaluation of impact indicators

D.4 - Accounting and financial audit and technical auditD.5 - Sensitization on STD/AIDS, road safety and environmental protection including

transport and climate change, as well as opportunities for Clean DevelopmentMechanisms (CDM) and Sustainable Development Mechanisms (SDM) in thecontext of the controlled refuse tip and the road project (carbon credits).

2.3 Technical Options Chosen and Considered

2.3.1 Four route options were considered and their costs and social and environmentalimpacts examined. These are: (i) extension of the North Exit Road (VDN), (ii) enlargement

of the Niayes road; (iii) the 1978 Electrowatt route; (iv) the raised section of the RNI. Adetailed multiple criteria analysis, based on technical, social, economic, financial,environmental and mobility criteria, was conducted in order to select the optimal route.This analysis showed that the best route retained is Route 3 which is the 1978 Electrowattroute slightly modified to provide an alternative to users not wishing to pay the toll asindicated in the following table.

Table 2.2Route Options Considered

Route 1 (VDN) Route 2 (Niayes Road) Route 3 (1978Electrowatt) (Retained)

Route 4 (raised RN1)

(i) runs along the coast in anarea with poor soilgeotechnical characteristicsand consequently difficultiesand high construction andmaintenance costs; (ii) entailssignificant expropriations; (iii)route 6km longer than routes 3and 4; (iv) outlying route,therefore no impact on urbanmobility; (v) traffic and tollrevenue not high enough for agood PPP (CFAF 14.20 billionper year).

(i) Fully serviced area withhighly dense urban fabricand a lot of commercialactivity; (ii) majorthoroughfare for publictransport, thereforenecessary to construct manypedestrian passageways; (iii)entails highly significantexpropriations; (iv) route 6km longer than route 3 and 4;and (v) traffic and tollrevenues not high enough fora good PPP (about CFAF 16billion per year).

(i) crosses 6 km ofunserviced irregulardistricts subject to frequentflooding; (ii) a restructuringplan of the area isunderway with thepossibility of landregularization; (iii) entailssignificant expropriations;(iv) major impact on urbanmobility; (v) suitable for aPPP, toll revenues are thehighest (about CFAF 24.5billion per year).

(i) Very highconstruction costs andharms the environment ;(ii) entails fewerexpropriations but hasno positive impacts onthe precarious districtscrossed; (iii) traffic andtoll revenues not highenough for a good PPP(about CFAF 18 billionper year).

2.3.2 Two options were considered (highway or expressway) and the highway was

retained given the weak impact on speed of an expressway in a highly dense urbanizedenvironment. The highway requires a special site marked off by an enclosure wall on themost urbanized part of the route. Regarding the size of the roadway and lanes, severaloptions (all asphalt structure, mixed structure and semi-rigid structures with bases treatedwith hydrocarbon binders) were considered taking into account the soil characteristics, theavailability of materials (laterite, crushed gravel), future traffic and its intensity, the impact


15/34

5

Table 2.3Technical Options Chosen for each Section

Between PIKINE and the THIAROYE BPV. THIAROYE BPV and DIAMNIADIO(i) 2.8 km long, 33 m platform in standard

sections; (ii) 2 x 3 lane roadways each witha 4m central reservation, two 3m pavedemergency lanes, and two 1m berms ; (iii)public lighting. The roadway structure iscomposed of 6cm of semi-granularbituminous concrete (SGBC) as a wearingcourse, 12 cm of bituminous gravel (BG) forthe base course and 25 cm of crushedgravel (CG) for the sub-base. The

thicknesses for the junction slip roads are 6SGBC/9BG/20CG

(i) length 17.6 km, 33 m platform ; (ii) roadway 3.5 m lane dual

carriageway with an 11 m unpaved central reservation, two 3 memergency lanes and two 1.00 m berms; (iii) the Thiaroye diamond-shaped interchange, the Keur Massar, Rufisque Ouest, Rufisque Estand Diamniadio trumpet interchanges; (iv) the two 3.5 m laneconnecting road to Diamniadio and the RN1 connecting interchange,(v) 19 overpasses and underpasses, and one underpass crossing therailway line; and (vi) six open and/or closed pay-toll systems andlighting over 2.70 km. The structure is composed of 6 cm of semi-granular bituminous concrete (SGAC) as a wearing course, 12 cm of

bituminous gravel (BG) as a base course and 25cm of crushed gravel(CG) as a sub-base. The thicknesses of the junction slip roads are6SGBC/9BG/20CG. It should be noted that this section is two-lanebecause of the traffic which , early in the year, is less than on the firstsection.

2.4 Project Type

2.4.1 In view of the significant financial resources to be mobilized and the toll

acceptability studies for an average daily traffic of nearly 40,000 vehicles, the Governmenthas decided to implement this project on the basis of a public-private partnership (PPP).To do so, in the first phase, it constructed the first two sections (Malick Sy-Patte dOie andPatte dOie-Pikine) with its own resources, and has contacted the donors to finance thethird and last section (Pikine-Diamniadio) with the private sector. The contributionexpected from the private sector is about 42% of the cost of the component relating to theconstruction of the highway, excluding expropriation costs. The remaining 58% will comefrom the Government and donors (see details of the sections in Annex B.1).

2.5 Project Cost and Financing Arrangements

Estimated Cost

2.5.1 The estimated costs (net of taxes and customs duties) of the entire project and ofthe ADF component (Component A- part of project jointly financed by ADF, AFD, theconcessionary company and the Government) are based on the final design and

finalization of the concessionary companys draft contract which was prepared in March2009. A comparative analysis of the cost of the concession has been conducted on thescenario of implementing the project with public financing or of constructing the KeurMassar-Diamniadio section with public financing and the Pikine-Keur Massar under PPP.This analysis concluded that continuing with the PPP as designed is more advantageous.A combined physical contingencies/financial contingencies coefficient of 5.85% has been

li d C B C d D F C A i h i h h


16/34

6

Table 2.4Summary Cost Estimate by Component for Entire Project

COMPONENT CFAF Million UA Million US$ Million

FE LC. Total FE LC. Total FE LC Total

A. CONSTRUCTION AND EQUIPPING OFHIGHWAY 106 644.67

51361.17

158005.83 144.72 69.70 214.41 216.36 104.20 320.56

B- DEVELOPMENT OF RESETTLEMENT

ZONE 39 495.20

13

521.30 53 016.51 53.59 18.35 71.94 80.13 27.43 107.56

C RESTRUCTURING OF PIKINE

IRREGULIER SUD (PIS) 18 141.82 8 971.61 27 113.43 24.62 12.17 36.79 36.81 18.20 55.01

D PROJECT MANAGEMENT AND

MONITORING 2 870.50 2 090.86 4 961.36 3.90 2.84 6.73 5.82 4.24 10.07

BASE COST 167 152.19

75

944.94

243

097.13 226.82 103.06 329.88 339.12 154.08 493.19

Physical contingencies 922.19 230.55 1 152.74 1.25 0.31 1.56 1.87 0.47 2.34

Price escalation 2 447.78 611.94 3 059.72 3.32 0.83 4.15 4.97 1.24 6.21

Total 170 522.16

76

787.43

247

309.59 231.40 104.20 335.60 345.95 155.79 501.74

Table 2.5Summary Cost Estimate for ADF Component

COMPONENTS CFAF Million UA Million US$ Million

FE LC Total FE LC. Total FE LC. TotalA HIGHWAY CONSTRUCTION AND

EQUIPMENT- Road works 76 800.00 19 200.00 96 000.00 104.22 26.05 130.27 155.81 38.95 194.76

- Work on structures 13 854.40 3 463.60 17 318.00 18.80 4.70 23.50 28.11 7.03 35.13

- Works and equipment of toll stations 15 319.83 3 829.96 19 149.79 20.79 5.20 25.99 31.08 7.77 38.85

- Environmental protection works 670.43 167.61 838.04 0.91 0.23 1.14 1.36 0.34 1.70

- Compensation and clearing of

highway area (cash) 24 700.00 24 700.00 33.52 33.52 50.11 50.11

BASE COST 106 644.67 51 361.17 158 005.83 144.72 69.70 214.41 216.36 104.20 320.56

Physical contingencies

Price escalation

Total 106 644.67 51 361.17 158 005.83 144.72 69.70 214.41 216.36 104.20 320.56

2.5.2 The summary costs by expenditure category for the entire project as well as forthe ADF Project are presented in Tables 2.6 and 2.7 below respectively:

Table 2.6Summary Cost by Expenditure Category for the Entire Project

Expenditure Category CFAF Million UA Million US$ Million

FE LC Total FE LC Total FE LC Total

A Goods

B Works/PPP* 156 787.01 39 196.75 195 983.76 212.76 53.19 265.95 318.09 79.52 397.61C Consultancy Services 8 387.04 3 470.00 11 857.03 11.38 4.71 16.09 17.02 7.04 24.06

D Miscellaneous

D.1- Expropriation 32 783.66 32 783.66 44.49 44.49 66.51 66.51

D.2- Others 1 978.14 494.54 2 472.68 2.68 0.67 3.36 4.01 1.00 5.02

BASE COST 167 152.19 32 783.66 32 783.66 226.82 103.06 329.88 339.12 154.08 493.19

Physical contingencies 922.19 230.55 1 152.74 1.25 0.31 1.56 1.87 0.47 2.34


17/34

7

Table 2.7Summary Cost by Expenditure Category for ADF Component

Expenditure Category CFAF Million UA Million US$ Million

FE LC Total FE LC Total FE LC Total

A - GoodsB Works (PPP) 106 644.67 26 661.17 133 305.83 144.72 36.18 180.89 216.36 54.09 270.45

C Consultancy Services

D - Miscellaneous

D.1- Expropriation 24 700.00 24 700.00 33.52 33.52 50.11 50.11

D.2- Others

BASE COST 106 644.67 51 361.17 158 005.83 144.72 69.70 214.41 216.36 104.20 320.56

Physical contingencies

Price escalation

Total 106 644.67 51 361.17 158 005.83 144.72 69.70 214.41 216.36 104.20 320.56

Financing Arrangements2.5.3 The project will be cofinanced by ADF, AFD, the Government and theconcessionary company and through parallel financing with other donors (IDA and AFD).ADFs current contribution of UA 45 million represents 13.41% of the total project cost, netof taxes and customs duties. This contribution is intended to finance Component A.Components B, C and D will be financed by the other donors, as well as the Government.The source of finance known as GOVT/Donors has been introduced to indicate

possibilities of intervention to donors who have been requested to participate and haveagreed (JICA, NTF, and South Korea) and/or ADF if the allocation in 2010 allows forintervention of more than UA 45 million. However, if other donors do not accept tointervene, the Government will bear this part of the financing. The source of financeentitled GOVT indicated the part of financing which only the Government can bear,namely cash compensations for expropriation. Evidence of the commitment of otherdonors (AFD and WB) to financing the project, as well as securing the Governmentcounterpart funds are conditions for the ADF loan for this project.

2.5.4 The financing plans by source for the entire project and for the ADF componentare presented in Tables 2.8 and 2.9 below.

Table 2.8Sources of Finance for Entire Project

(In UA million)

Source FE LC Total %

ADF LOAN 36.00 9.00 45.00 13.41%

CONCESSIONARY 60.12 15.03 75.15 22.39%GOVT/OTHER DONORS 37.85 9.46 47.31 14.10%

IDA 54.70 15.54 70.23 20.93%

AFD 42.73 10.68 53.41 15.92%

GOV 0.00 44.49 44.49 13.26%

Total 231.40 104.20 335.60 100%


18/34

8

2.5.5 The expenditure schedules by component for the entire project and for the ADFComponent are presented in Tables 2.10 and 2.11 below:

Table 2.10Expenditure Schedule by Component for Entire Project

(in UA million)Components 2009 2010 2011 2012 2013 2014 Total

A. CONSTRUCTION ANDEQUIPMENT OF THE HIGHWAY 34.94 54.12 46.39 49.86 29.11 214.41

B. DEVELOPMENT OF THERESETTLEMENT AREA (RA) 5.48 32.69 26.26 6.97 0.54 0.00 71.94C. RESTRUCTURING OFPIKINE IRREGULIER SUD (PIS) 0.80 9.84 11.64 8.63 5.89 36.79

D. PROJECT MANAGEMENTAND MONITORING 0.67 1.35 1.35 1.35 1.35 0.67 6.73

BASELINE COST 41.90 97.99 85.63 66.80 36.88 0.67 329.88Physical Contingencies 0.09 0.61 0.55 0.22 0.09 0.00 1.56

Price Escalation 0.24 1.62 1.45 0.60 0.25 0.00 4.15

TOTAL COST 42.23 100.23 87.63 67.62 37.22 0.67 335.60

Total in % 12.58% 29.87% 26.11% 20.15% 11.09% 0.20%100.00

%

Table 2.11Expenditure Schedule by Component for ADF Component

(in UA million)

Components 2009 2010 2011 2012 2013 2014 Total

A. CONSTRUCTION ANDEQUIPMENT OF HIGHWAY

- Works/PPP 17.97 45.84 38.11 49.86 29.11 180.89- Compensation and

clearing of highway area (cash) 16.96 8.28 8.28 33.52

BASE COST 34.94 54.12 46.39 49.86 29.11 214.41Physical contingenciesPrice escalation

TOTAL COST 34.94 54.12 46.39 49.86 29.11 214.41Total in % 16.29% 25.24% 21.63% 23.25% 13.58% 100.00%

2.5.6 The expenditure schedules by source of finance for the entire project and for theADF Component are presented in Tables 2.12 and 2.13 below.

Table 2.12Expenditure Schedule by Source of Finance for Entire Project

(in UA million)

Source 2009 2010 2011 2012 2013 2014 TotalADF LOAN 7.78 20.72 16.50 45.00


19/34

9

Table 2.13Expenditure Schedule by Source of Finance of ADF Component

(In UA million)Source 2009 2010 2011 2012 2013 2014 Total

ADF LOAN 7.78 20.72 16.50 45.00CONCESSIONARY COMPANY 2.06 9.30 18.48 25.63 19.68 75.15GOVT/OTHER DONORS 2.22 24.23 9.43 35.88AFD 8.14 15.82 0.91 24.86GOVT 16.96 8.28 8.28 33.52Total 34.94 54.12 46.39 49.86 29.11 214.41

% 16.29% 25.24% 21.63% 23.25% 13.58%100.00

%

Table 2.14Expenditure Schedule by Source of Finance of ADF Component

(In CFAF million)

Source 2009 2010 2011 2012 2013 2014 TotalADF LOAN 5 730.74 15 269.26 12 162.49 33 162.49

CONCESSIONARY COMPANY 1 514.41 6 855.65 13 615.98 18 889.49 14 505.05 55 380.58GOVT/OTHER DONORS 1 636.77 17 853.91 6 949.20 26 439.88

AFD 6 000.00 11 654.77 668.12 18 322.89GOVT 12 500.00 6 100.00 6 100.00 24 700.00

Total 25 745.14 39 879.68 34 183.36 36 743.39 21 454.26 158 005.83% 16.29% 25.24% 21.63% 23.25% 13.58% 100.00%

2.6 Project Area and Beneficiaries

2.6.1 The direct project area is the Dakar Region, but the project impact reachesbeyond this region to the whole of Senegal and ECOWAS. Indeed, since the project is thefirst link in the Dakar-Lagos Trans-African Highway, its impact will be felt in the ECOWAScountries, in general, and in Mali, Guinea, Guinea Bissau and the Gambia, in particular.The main beneficiaries are: (i) transport users who will have an alternative to improve theirmobility; (ii) the 300,000 inhabitants of the PIS who will benefit from a restructured andimproved district; (iii) the 3000 families of the PIS who will be resettled in Tivaouane Peul ;(iv) export manufacturers and economic operators involved in regional transport; (v) theinhabitants of Dakar Region who will be less exposed to pollution caused by theuncontrolled Mbeubeuss refuse tip; and (vi) the Government of Senegal, which couldattract more private investments by demonstrating the feasibility of PPP.

2.7 Participatory Approach to Project Identification, Design and Implementation

2.7.1 A participatory approach was adopted for the conduct of the project studies.Several meetings and sessions were organized with the beneficiary and/or affected localpopulations (local administrative and local authorities, local associations, governmenttechnical services religious authorities representatives of the civil society local NGOs


20/34

10

2.8 Consideration of the Banks Experience and Lessons Learnt in the ProjectDesign

2.8.1 The lessons learnt from the Banks experience in the country concern, inparticular, the risks of additional costs due to the quality of the studies, the technicalmodifications after project approval, and time frames for fulfillment of the conditions fordisbursement and procurements. Lessons were also drawn from execution of works onthe Malick Sy-Patte dOie-Pikine section of the highway, particularly difficulties related toexpropriation and clearing of highway areas and the fact that deep patchings not initiallyforeseen were made as a result of the poor quality of soils.

2.8.2 This project benefited from high quality basic studies in its design; for the conductof these studies and preparation of the bidding documents, APIX used several experts inthe technical, legal, financial, economic, social and environmental areas, etc. The pricedbill of quantities of the highway works has been updated by APIX and the concessionarycompany, taking into account the technical problems encountered during works on theearlier sections of the highway. An institutional and communication mechanism has beenput in place to monitor the expropriation and resettlement. Regarding procurements, theBank will only finance the component concerning the PPP component for which the

concessionary company has already been selected. Furthermore, the Project ExecutingAgency (APIX) received initial training on the Banks procedures during the differentmissions fielded by the Bank as part of the project preparation and for SNFO staff. Thistraining will be deepened during project launching. For the components financed by theother project donors involved from the design studies phase, APIX and AGETIP arealready acquainted with their procurement procedures.

2.8.3 As regards the project implementation monitoring component, adequate

institutional arrangements were made through APIX and its Highway Project Department.The project will therefore benefit from the quality of the work carried out by APIX and itsadvisers, as well as the Governments support for financing the parts already constructedor under construction and for future financing.

2.9 Key Performance Indicators

Impact and Implementation Performance Indicators

2.9.1 The key indicators concern: (i) the rate of the national road network in good state,the trend of the urban mobility index in Dakar and the port traffic growth rate for theneighbouring countries; and (ii) improvement of transport conditions by reducing the traveltime between Dakar and Diamniadio, the percentage of economic operators who considertransport as a major obstacle, and the number of people and families or persons resettled


21/34

11

2.9.2 In addition to the impact indicators, implementation performance indicators will bedetermined and monitored, in particular: (i) the time frames for effectiveness and fulfilmentof the disbursement conditions of the loan; (i) the time frames for the award of contracts

financed by the other donors on whom the progress of the highway works depends; and(iii) assessment of the disbursement rates on the basis of the expenditure schedule.

Mechanisms for Assessing Project Effectiveness

2.9.3 A Steering Committee has been established to ensure the overall monitoring ofproject implementation; the Committee organizes periodic meetings and seminars whichare open to the civil society. The meetings will use summary reports and monitoring-evaluation indicators prepared by APIX.

3 PROJECT FEASIBILITY

3.1 Economic and Financial Performance

3.1.1 The economic analysis of the highway construction was carried out using theHDM4 model based on a cost/benefit analysis of the with and without project situations.The costs taken into consideration: (i) the investment costs (net of taxes and customs

duties) of constructing the highway (from Patte dOie to Diamniadio) and installing the tollequipment, including amounts paid in cash to compensate affected people located on thehighway area; and (ii) the operation and maintenance costs, as well as costs for renewalof investments and equipment of the highway and toll stations. The benefits lies in thereduction of overall transport costs (savings on time and the operating costs of vehiclesusing the highway and vehicles that continue to use the alternative roads which will beless congested as a result of the diverted traffic) and savings on maintenance costs of thealternative roads. The traffic and toll acceptability study concluded on variable diverted

traffic from the entry into service of the highway of between 7,000 and 40,000vehicles/day, depending on the sections. The residual value of the investments for theconstruction of the highway represents 66.60% after a life span of 25 years. Theeconomic analysis did not take into account the climate risk and the sale of carboncredits, due to lack of data. It did not also take into account the intangible benefits (difficultto convert into currency) as a result of improvement of the living environment of thepopulations.

3.1.2 The financial analysis was conducted on the basis of the toll revenue and theshare of the investment costs borne by the private concessionary company for thehighway construction works, excluding expropriation and operating and maintenancecosts, as well as costs for renewal of infrastructure and equipment of the highway whichwill be borne by the concessionary company. Details of these analyses, presented inAnnex A.6, are summarized below.


22/34

12

Table 3.1Summary of Outcomes of the Economic and Financial Analysis

Financial Rate of Return (FRR) in % 20.16%

Net Present Value in million CFAF (NPV) 275.50Economic Rate of Return (ERR) in % 29.28%

ERR for economic benefits reduced by 54% and investment,maintenance and operating costs increased by 98% 12%

Discount Rate 12%

Residual Value of Investment after 25 years 66.60%

3.2 Environmental and Social Impact

Environment

3.2.1 From the environmental standpoint, the project is classified in Category 1 becauseof its potential direct and indirect impacts. Between 2005 and 2007, an environmental andsocial impact assessment (ESIA) was conducted, and the different resettlement actionplans (RAP) and environmental and social management plans (ESMP) were prepared.The ESIA and RAP summaries were placed in the Banks Public Information Centre (PIC)

and distributed to the Board on 16/02/2009 and 09/01/2009. The major negative impactsconcern: (i) the displacement of 3,350 families and economic and commercial activities toa new fully serviced and built up resettlement area; (ii) nuisances during the works phase;and (iii) environmental impacts related to the crossing of the Mbao classified forest andthe possibility of worsening flooding in the marshlands located in some sectors ofThiaroye.

3.2.2 The impact mitigation costs are estimated at CFAF 109.04 billion comprising: (i)

CFAF 32.78 billion cash expropriation compensation; (ii) CFAF 51.76 billion for thedevelopment of the resettlement area, including the required studies and works for theclosure of the Mbeubeuss refuse tip; (iii) CFAF 23.51 billion for development of the refusedump and sanitation network in the floodable area of PIS, and (iv) CFAF 0.99 billion forthe implementation of the ESMP in terms of sensitization and capacity building inmonitoring. In addition, the activities included in the concessionary companys contract willalso be carried out; the activities comprise the building of a noise protection wall,replanting of green spaces, improved sanitation and protection of the Mbao classifiedforest. The project implementation will have positive impacts such as thee restructuringand development of the unhealthy PIS district, the significantly reduced risks and lossesdue to flooding and difficulties in refuse collection on the health and safety of the 300,000inhabitants. The closure of the Mbeubeuss uncontrolled refuse tip will have a positiveimpact on air quality and the risk of soil contamination.


23/34

13

Climate Change

3.2.3 The effects of climate change are already perceptible in Senegal, even though theimpact of human activities on the concentration of greenhouse gas is low, in view of thelevel of development of the country. The two challenges facing the country are thestructural irregularity of rainfall which makes farming systems vulnerable, as well asatmospheric pollution. Climate trends show an increase in temperatures by about 1.2Csince the beginning of the century and 35% reduction in rainfall within the space of ageneration. In 1993, Senegal ratified the Vienna Convention and the Montreal Protocolrelating to the protection of the ozone layer. It subsequently developed initiatives toprotect the ozone layer and signed in June 1992 the Convention on climate change andratified it in June 1994. Furthermore, it has implemented the 2001Dakar Declaration onthe phasing-out of leaded fuel in Africa by 31/12/2005. A number of sector policies havealso be implemented, including the Second Transport Sector Programme (TSP 2) and theUrban Mobility Programme one of whose objectives is to enhance the performance of thesector so as to significantly reduce greenhouse gas emissions.

3.2.4 The road traffic in Dakar is highly congested, and has an ageing vehicle fleet thatgenerates high greenhouse gas emissions, especially on the Dakar-Diamniadio highway.The design retained for the highway includes various considerations to mitigate the impact

of climate change, such as: (i) the draining of sections of roads to be developed andsizing of hydraulic structures taking into account the rainfall; (ii) the PIS and TivaouanePeul zones for which sanitation plans have been prepared to address any increase incontamination of the groundwater; (iii) the closure of the Mbeubeuss uncontrolled refusetip and establishment of a waste burial centre are likely to eliminate emissions of smokeand toxic gas from the tip; and (iv) the planting of trees along the highway, in theresettlement area and in the restructured PIS. The Climate Change Committee of theAfrican Development Bank has selected this highway project as the pilot project and will

therefore support it for the monitoring of key performance indicators (KPI) of climatechange.

Gender

3.2.5 The direct project area has about 532,000 inhabitants, 50% of whom are women.Between 40.6% and 45.8% of the population of the project area are considered to bepoor, and women represent 51.8% of these poor people. Of the estimated 64,000

households in the project area, 23% are headed by women who have full responsibility fortheir families. Of the remaining 77%, women play important roles despite the presence ofmen. These communities live in a socio-cultural environment strongly marked by thedevelopment of interrelationships, the significant participation of both men and women inthe production of resources and frequent use of the services made available to them.Activities related to trade and foodstuffs are chiefly the responsibilities of women, who


24/34

14

such as catering, sewing and the sale of vegetables and fishery products, or buildingmaterials or fruits. The jobs generated by the toll highway (collection of toll levies, refusecollection and periodic cleaning of highway) could be filled by women and youths. Thehighway will facilitate trade and the rapid transportation of their produce countrywide andwithin the sub-region.

Social

3.2.7 The main negative impact of the project concerns the displacement of theinhabitants of the PIS zone. However, the positive impacts largely outweigh this impact.Indeed, 70% of the 3,350 families affected by the project will benefit from modern housingin a healthier environment, title deeds for their dwelling plots, and modern facilities. It is

expected that the PIS district will become an autonomous urban sector capable ofstimulating its own economic and social development. Alternatively, this transformedurban centre will provide additional impetus to the future development of the Dakarmetropolitan centre with its job-creating potential.

Compulsory Resettlement

3.2.8 For the 3,350 project affected families (3,000 on the highway area and 350 on the

PIS restructuring roads), there will be no compulsory resettlement. Indeed, nearly 70% ofthese families have expressed the wish to be resettled, and the remainder have agreed toa cash payment as expropriation compensation. This payment or the deposit of theamounts in a dedicated account will be one of the conditions precedent to firstdisbursement of the ADF loan.

4 PROJECT IMPLEMENTATION AND MONITORING-EVALUATION

4.1 Implementation Arrangements

Executing Agency

4.1.1 The Ministry of the Economy and Finance (MEF) and the Ministry in charge ofRoads will jointly assume the role of Project Executing Agency and Concession GrantingAuthority as stipulated in Decree 2007-170 of 13 February 2007. APIX-SA has beendesignated as Delegated Concession Granting Authority to organize, coordinate and

monitor the preparation and implementation of BOT- type projects. It will be mainlyresponsible for ensuring the accounting and financial monitoring of the project.

4.1.2 APIX is a public limited company with majority public capital, and with thestrategic mission of promoting major investments. It comprises several Departments,including the Administrative and Financial Department (DAF) responsible for the financial


25/34

15

operate them with its own resources. Similarly, it will ensure the proper delivery of allthese services. On this component, APIX will play only a monitoring role.

Institutional Arrangements

4.1.4 The operation to clear the rights of way and resettle the persons affected by theproject lies on the project implementation critical path. Given the sensitive nature of thisoperation, a Resettlement and Social Communication Unit (URCS) will be set up in theDPA. The URCS, which will be headed by a sociologist and an urban specialist, will havean office on the project site to communicate with the District Committees, the UrbanResettlement Committees (local representatives of the communities to be resettled orcompensated), and to coordinate the activities of the NGOs, government departments and

agencies, and other actors involved in the resettlement issues. The URCS will bestrengthened by technical assistance financed by the World Bank.

4.1.5 Monitoring and management of the implementation of the public works activities ofcomponents B and C, financed by AFD and the World Bank, will be delegated to AGETIPwhich has proved to be an efficient structure for controlling contracts of this type indifferent sectors with WB financing. The Fondation Droit la Ville (FDV) [Rights to theCity Foundation], a specialized operator in Urban Restructuring and Land Regulation will

be contacted for issues relating to land registration and the issuance of surface ownersrights (SR) to eligible persons in the restructured PIS and resettlement area.

Procurement

4.1.6 Under the project, the Bank will finance only the Government subsidy to theconcessionary company which will carry out the highway works and manage the tollsystem. The concessionary company selection process started in 2007 prior to the Banks

involvement and, in December 2008, led to the selection of the EIFFAGE Group. Inaccordance with its Rules of Procedure, the Bank carried out an ex post review of thisprocess and noted certain shortcomings in the pre-qualification phase and with regard tosome of the provisions of the bidding documents finally approved by the Bank. Followingits overall analysis, the Bank concluded that the shortcomings noted had not significantlyaffected the selection process and therefore considered the process acceptable on thewhole. The concessionary company selection process is described in detail in Annex A.4.

Disbursement

4.1.7 The direct disbursement method has been retained for the works financed by theADF loan. In other words, the concessionary company will present its invoices to APIXwhich will submit them to the Debt and Investments Department (DDI) or to any otherstructure with the required delegated authority, a payment request made out according to

16


26/34

16

Audit

4.1.8 The project accounting will be maintained by APIX through its Administrative andFinancial Department. This Department has adequate accounting and financial monitoringcapacity. An external audit of accounts will be conducted annually by an audit firm to berecruited by APIX on World Bank financing. The TOR will take into account the specificrequirements of the ADF as regards project auditing. The audit reports will be submitted tothe donors no later than 6 months after the end of each accounting year.

National Laws and Regulations

4.1.9 The project was formulated in such a way as to rely as far as possible on existing

structures and regulations for its implementation. The financial and procurementmanagement capacities were assessed and considered, overall, to be satisfactory. Thusfor BOT-type contracts and to guarantee transparency of the procedure and the balanceof power between the concession grantor and the potential concessionary companies, theInfrastructure Council (CI) was established by Law No. 2004-14 of 1 March 2004. The CIis required to give its opinion on the bidding procedure and the preparation of biddingdocuments at each stage of the process. Similarly, a Procurements Commission has beenestablished to rule on the final choice of concessionary company. The financial

management will be carried out by the Administrative and Financial Department of APIX,which has a financial management manual and its statements are audited in conformitywith international audit standards.

Implementation and Supervision Schedule

4.1.10 The project will be implemented from July 2009 to May 2014 in accordance withthe implementation schedule at the beginning of this report. Upon approval of the loan,

the ADF will launch the project and subsequently field supervision missions, the indicativeschedule and composition of which are presented in Annex A.8.

4.2 Monitoring-Evaluation

4.2.1 Monitoringevaluation will comprise internal and external monitoring, joint donorsupervision missions, a mid-term review and a final evaluation, including the completionreports. Quarterly status reports will be prepared by the consultants responsible for

providing project management assistance to APIX. APIX will, within three months of theend of project implementation, prepare the Borrowers Completion Report on the basis ofa format to be communicated by the donors. Furthermore, on WB financing, a consultingfirm will be recruited for the annual monitoring-evaluation of project impact indicators,through regular surveys on beneficiaries.

17


27/34

17

ensure that the compensation and resettlements are smoothly conducted. The fact thatthe actual works will be carried out by the private concessionary company partly from itsown resources, will also mitigate the corruption risk. As regards the procedure for theselection of the Concessionary Company, the WB and AFD monitored and supportedAPIX by financing its technical, legal and financial counseling services. The Bankconducted an ex-post review of the selection process, and deemed it to be acceptable.

4.4 Sustainability

4.4.1 Project sustainability will depend on the quality of the works, the availability ofresources to pay the recurrent maintenance costs, road operating conditions and thecapacity of contractors to carry out the maintenance works. The technical construction

options retained were determined on the basis of the intensity of existing and future traffic.The concession formula adopted means that the concessionary company will have to takethe greatest care in building the structure in order to limit the risk of interventions forrepairs. The installation of axle scales and control of axle loads will be carried out by theConcessionary Company which thereby reduces the risk at its expense related to repairsnecessitated by premature deterioration of the road. During the period of the concession,routine and periodic maintenance will be carried out by the Concessionary Companyusing the toll revenues, part of which could be paid as levy to the Concession Authority

depending on the amount of revenues. Beyond that period, maintenance will be carriedout through the Autonomous Road Maintenance Fund (FERA), a second generation roadfund established in 2007 by the Government and which is already operational. FERAskey staff are already in place since 1 April 2009. The Government has taken measuresfor the resources from the road user charges to be paid directly into the FERA accounts.A schedule has been determined for the quarterly payment of budgetary provisions. Thebudgetary allocation for road maintenance for 2009 amounts to CFAF 21 billion and themaximum amount of road user tax for that year is CFAF 16 billion, making a total of CFAF

37 billion for road maintenance in 2009.

4.5 Risk Management

4.5.1 The major sector risks are non-consolidation of TSP2 outputs, delays in theimplementation of projects in the Urban Mobility Programme (PAMU) and non-applicationof regional regulations on facilitation of transport and control of axle load. As regards theproject, the main risks are : (i) the problem of mobilizing counterpart resources for the

payment of expropriation compensation; (ii) continuing support of the population for theresettlement and district restructuring processes which may affect the implementationperiod; (iii) an increase in costs after competitive bidding or during works execution and achange in the level of available financing depending on exchange rate trends; and (iv) tollavoidance and its impact on the management of the concession during the operationalphase.

18


28/34

18

control of axle load on the highways. Sensitization campaigns are currently beingorganized for transport operators to ensure effective implementation of these decisionsbefore the end of 2009.

4.5.3 Concerning mobilization of the counterpart funds, it should be noted that theGovernments strong commitment toward this project has already led to the financing ofthe first two sections of the highway from the national budget, and that the expectedannual contribution of CFAF 12.5 billion from the Government will be borne by the budget.Furthermore, in view of the impact of this project, the Government can, after IMFsapproval, implement a specific market borrowing mechanism (bond issue) to finance thisproject. The continuing support of the population for the resettlement process isguaranteed by: (a) the benefits of better situation in the future than now due to the

selected option of building houses with donor financing on a fully serviced site andassigning them to displaced persons following land regularization; and (b) heightenedvisibility of implementation of the resettlement process by allocating plots, as from 2010,for the houses to be built by BPW enterprises, which is a different mechanism from thefirst restructurings/regularizations carried out in Senegal.

4.5.4 The risks related to an increase in the cost of works will be limited because: (i) asregards Component A, the Concessionary Companys financial bid includes coverage of

this risk and the concession contract is firm and non reviewable; (ii) as for Components Band C with concern the building of houses, the costs estimates are based on recent pricesand, in view of the division of the works into lots, there will be keen competition because inSenegal there are many SMEs in the building sub-sector which are competent and haveadequate skilled labour. Regarding the impact of toll avoidance, it should be noted that tollrevenues are estimated at between CFAF 20 billion and CFAF 24 billion per annum andthe toll sensitivity studies have shown that, even with a drop in traffic of 20% to 30%, thefinancial yield would always be guaranteed. The impact of flooding as a result of climatic

risks will be mitigated through the construction of storm-and wastewater drainage,collection and disposal structures under this project.

4.6 Knowledge Development

4.6.1 The establishment of real PPPs in the road transport sector in Africa is slow inmaterializing despite the desire expressed by the States under NEPAD to attract privateinvestments. Implementation of the project will therefore serve as an example to stimulate

the PPP mechanism. The concession monitoring reports will constitute the maininformation media. This experience will be shared and compared with other similarexperiences in the world through seminars organized by the project donors.

5 LEGAL FRAMEWORK

19


29/34

19

5.2 Conditions for Bank Intervention

A. Conditions Precedent to Effectiveness

5.2.1 The loan agreement to be signed between the ADF and Senegal will becomeeffective when the Borrower has fulfilled Section 12.01 of the General Conditionsapplicable to Loan Agreements and Guarantee Agreements.

B. Conditions Precedent to the First Disbursement

5.2.2 In addition to effectiveness of the Loan Agreement, the first disbursement of theloan resources shall be subject to fulfillment by the Borrower, to the satisfaction of the

Fund, of the following conditions:

(i) Provide the Fund with evidence that APIX has opened and will maintain forthe project duration in a bank acceptable to ADF, a CFAF account (ProjectAccount) to receive the counterpart funds that shall be paid promptly on thebasis of the expenditure schedule for the entire project.

(ii) Provide the Fund with evidence of the payment or lodging in a separate

account (Expropriation Account) acceptable to the Fund, of the resources tocompensate the displaced persons affected by the works on the Malick-Sy-Pikine and Keur-Massar-Diamniadio sections, as well as on the TivaouanePeulh resettlement area.

(iii) Provide the Fund with evidence of the written commitment by the otherdonors to participate in the financing of the public part of the project; and

(iv) Provide the Fund with evidence of the signing of the concession contractduly authorized or ratified and transferred to the project company under theterms of the law, as well as evidence of the signing of the external financingagreements required under the Concession Contract.

C. Other Loan Conditions

5.2.3 In order to avoid the suspension of disbursements during project implementation,

the Borrower shall also fulfill the following conditions:

(i) Regularly replenish the Project Account with counterpart funds inaccordance with the expenditure schedule;

(ii) No later than 31 December 2011, effect payment of, or lodge in the

20


30/34

20

5.3 Compliance with Bank Policies

Does this project complywith all the applicable

Bank rules?

YES. With regard to the process for the procurement of the services ofthe Concessionary company which had been initiated prior to the

Banks involvement in the project, the pre-selection and biddingdocuments used are those prepared at national level in conformity withthe BOT (build operate and transfer) national law. In accordance withthe provisions of its Rules of Procedure relating to the PPP contract,the Bank carried out an ex post review of the process which it hasdeemed acceptable on the whole.

6 CONCLUSIONS AND RECOMMENDATIONS

6.1 Conclusions

6.1.1 As it stands, the project should, after implementation, facilitate entry to and exitfrom Dakar City and strengthen regional economic integration, particularly with Mali andGuinea. In this respect, it is in keeping with the TSP and pillars of Senegals PRSP andRBCSP for 2007-2009.

6.1.2 Technically, the project is well designed. The negative environmental impactshave been identified, and mitigation measures incorporated in the project. It iseconomically viable, with an average economic rate of return of 29.28% which is abovethe opportunity cost of capital estimated at 12%. The project is financially profitable with afinancial rate of return of 20.16%. The sustainability of the investments will be ensured bythe PPP formula, which makes the concessionary company responsible for themaintenance of the highway and toll equipment.

6.2 Recommendations

6.2.1 In light of the foregoing, it is recommended that the ADF should grant to theGovernment of Senegal a loan of UA 45 million. The loan will be used to implement theproject as designed and described in this report. It will be subject to fulfilment of theconditions specified in the Loan Agreement.

Annex I

SENEGAL: DAKAR DIAMNIADIO HIGHWAY CONSTRUCTION PROJECT


31/34

SENEGAL: DAKAR-DIAMNIADIO HIGHWAY CONSTRUCTION PROJECT

Comparative Socio-Economic Indicators of the CountrySenegal - Development Indicators

Senegal

Social Indicators

1990 2008 *

AfricaDeveloping

countries

Area ( '000 Km) 197 30 323 80 976Total Population (millions) 7,9 12,7 985,7 5 523,4

Population growth (annual %) 2,9 2,5 2,3 1,4

Life expectancy at birth, total (years) 57 63 55 66

Mortality rate, infant (per 1,000 live births) 91,3 65,1 83,9 53,1

Physicians per 100,000 People 5,1 5,2 39,6 78,0

Births attended by skilled health staff (% of total) 51,9 51,2 59,0

Immunization, measles (% of children ages 12-23 months) 57,0 84,0 83,1 81,0

School enrollment, primary (% gross) 59,0 83,5 99,6 106,0

Ratio of girls to boys in primary education (%) 74 100 92 100,0

Illiteracy rate, adult total (% of people ages 15 and above) 57,4 33,2 26,6

Access to Safe Water (% of Population) 67,0 77,0 64,3 84,0Access to Sanitation (% of Population) 26,0 28,0 37,6 53,0

Human Develop. (HDI) Rank (Over 179 Countries) 153

Human Poverty Index (% of Population) 41,1 38,7

Senegal

Economy 2000 2007 2008 2009**

GNI per capita, Atlas method (current US$) 450 820

GDP (current Million US$) 4 681 11 169 12 602 12 120

GDP growth (annual %) 3,2 4,8 3,7 3,5Per capita GDP growth (annual %) 0,6 2,2 1,2 1,1

Gross Domestic Investment (% of GDP) 20,5 27,1 28,2 26,2

Inflation (annual %) 0,7 5,9 5,8 4,0

Budget surplus/deficit (% of GDP) 0,5 -3,8 -4,5 -4,3

Trade, External Debt & Financial Flows 2000 2007 2008 2009**

Export Growth, volume (%) -13,5 -0,1 8,9 11,2

Import Growth, volume (%) -1,0 7,6 7,9 9,2

Terms of Trade (% change from previous year) 3,3 -9,8 -9,1 14,7

Trade Balance ( mn US$) -417 -2 329 -2 936 -2 057

Trade balance (% of GDP) -8,9 -20,9 -23,3 -17,0

Current Account ( mn US$) -332 -1 259 -1 788 -1 057

Current Account (% of GDP) -7,1 -11,3 -14,2 -8,7

Debt Service (% of Exports) 13,8 6,5 5,8 6,7

External Debt (% of GDP) 76,2 42,8 44,0 50,6

Net Total Inflows ( mn US$) 475,7 964,6

Net Total Official Development Assistance (mn US$) 425,1 842,8

Foreign Direct Investment Inflows (mn US$) 62,9 78,0

External reserves (in month of imports of goods & services) 2,6 4,3 2,6

Private Sector Development & Infrastructure 2000 2006 2007 2008

Time required to start a business (days) 58 58 8

Annex II


32/34

SENEGAL: DAKAR-DIAMNIADIO HIGHWAY CONSTRUCTION PROJECT

Table of ADB Portfolio in the Country as at 25/03/2009

Project NameApproval

Date.

Signature

Date

Effect.

Date

Closure

Date

Net

approved

amount

(MUA)

Amount

Disb.

(M. UC)

Disb.

Rate.

%

Age

duration

ratioRisk

Agriculture Sector

Livestock Project - Phase II (PAPEL) 17-May-00 14-Jul.-00 1-Feb.-02 30-June-09 10.0 9.9 98.8 1.19 PPP

Anambe Rur. Dev. Support

Project(PADERBA)25-April.-01

26-Oct.l.-

0113-Feb.-02 31-Dec.-08 7.2 4.9 67.6 1.19 PPP

Rural Infrastructure Project (PPC/PNIR) 3-April.-02 6-May-02 4-Feb.-03 30-Dec.-08 11.9 11.1 94.0 1.53 NO

Local Small-scale Irrigation Support Project

(PAPIL)22-Oct.-03 18-Dec.-03 7-Sept.-04 31-Dec.-10 14.3 4.3 30.4 0.91 NO

Casamance Rural Development Support

Project (PADERCA)19-Oct.-05 11-Nov.-05 22-mars-06 21-Dec.-12 20.0 1.6 8.2 0.60 PPP

5 Operations 63.3 31.9 50.3 0.93

Infrastructure SectorRural Electrification Project 13-Oct..-04 29-Nov.-04 8-Aug.-06 31-Dec.-10 9.6 0.1 1.6 0.53 PP

Road Maintenance Project (PER) 29-June-05 20-July-05 21-June-06 31-Dec.-09 29.0 13.7 47.1 0.83 NO

2 Operations 38.6 13.8 35.8 0.65

Water and Sanitation

Dakar City Sanitation Project (PAVD) 12-July-01 26-Oct..-01 22-Aug.-02 30-Dec.-08 11.9 11.3 94.9 1.65 PPP

Rural DWSS Sub-Programme (PEPAM)21-Sept.-

0526-Oct.-05 23-Jan.-06 31-Dec.-11 25.0 16.5 66.0 0.79 NO

Ziguinchor Sanitation Study (FAE) 22-Dec.-06 25-June-07 9-Aug.-07 31-May-09 0.8 0.4 49.8 0.93 NO

Implementation of Senegal PAGIRE (FAE) 31-Aug.-07 10-Oct..-07 15-May-08 30-Nov.-09 1.4 0.9 62.0 0.43 NO

Second DWSS Sub-Programme (PEPAM II) 18-Feb.-09 26-Feb.-09 31-Dec.-13 30.0 0.0 0.0 0.00 NO

5 Operations 69.2 29.1 42.1 0.97

Social Sector

Health Project II (loan) 18-June-03 21-July-03 22-April.-04 31-Dec.-09 10.0 4.5 45.5 0.99 PPP

Health Project II (grant) 18-June-03 21-July-03 22-April.-04 31-Dec.-09 1.4 0.9 66.7 0.99 PPP

Education Project IV (loan) 25-June-03 21-July-03 15-Oct.-04 31-Dec.-09 13.8 5.9 42.3 0.89 PPP

Education Project IV (grant) 25-June-03 21-July-03 15-Oct..-04 31-Dec.-09 1.0 0.4 44.3 0.89 PPP

2 Operations 26.2 11.7 44.9 0.94

Multisector

Statistics Directorate Support Project 12-Dec.-02 7-Feb.-03 5-July-04 31-Dec.-08 1.6 1.2 75.9 1.57 PPP

Cadastral Survey Modernization Project

(PAMOCA)22-April.-05 17-May-05 12-Aug.-05 31-Dec.-09 2.5 1.9 75.1 1.45 NO

Poverty Reduction Support Project (PASRP) 22-Dec.-08 22-Dec.-08 23-Dec.-08 31-Dec.-10 30.0 20.0 66.7 0.08 NO3 Operations 34.1 23.1 67.7 1.01

TOTAL 17 OPERATIONS 231.3 109.6 47.4 0.93


33/34

ANNEX IIISENEGAL: DAKAR-DIAMNIADIO HIGHWAY CONSTRUCTION PROJECT

PROJECT MAP


34/34

Cette carte a t fournie par le personnel de la Banque Africaine de Dveloppement exclusivement lusage des lecteurs du rapport auquel elle est jointe. Les dnominations utilises et les frontires figurant sur cette carte nimpliquent de

la part du Groupe de la BAD et de ses membres aucun jugement concernant le statut lgal dun territoire ni aucune approbation ou acceptation de ses frontires

pages de senegal - ar dakar-diamniadio highway[1]

Documents