Dkontof'.O'

The World Bank

FOR OFFTCIAL USE ONLY

Rept Ne. P-5263-KAG

MEMORANDUM AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL DEVELOPMENT ASSOCIATION

Tc THE

EXECUTIVE DIRECTORS

ON A

PROPOSED CREDIT

0F SDR 23.0 MILLION

TO THE

DEMOCRATIC REî`'- 'IC OF MADAGASCAR

FOR AN

ANTANANARIVO PLAIN DEVELOPMENT PROJECT

FEBRUARY 23, 1990

MaIs documem bas a rescted dllbuto ud may be used by reciplents oely lu the perfoeumae ofterolffeiia dudes. Its contenu maay ot otberiws be disclosed without Worid Bk authoadon.

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CURRENCY EQu!A[Lvm

Curr.ncy Unit - Malagasy Franc (FMg)us$1.00 - mWg 1,600Fils 1,000 US$0.62

'WË IGRT AJ )ZSURES

1 Hectaro (ha) - 10,000 m21 S4uare Kilometer - 100 hal14etric Ton (mt) - 1,000 kg

FISCAL YEAR

Jamzary 1- December 31

GLOSSARY OF ABBR3EIATI0KS AN> ACRONYHS

CCCE Caisse Centrale de Coopiration EconomiqusFAC Fonds t'Aide et de Coopération (France)1Fg y Mlagasy Franc

.

FOR OFFICIAL USE ONLY

MAAGASCAR

ANTANARIVO PLAIN DEEOPM P0JEC?

DIT * PROAD CT s mW

Borrovert Democratie Republic of Madagascar

Beneficiaries: Ministry of Agriculture, Province of Antananarivo andMunicipality of Antananarivo

Amount: SDR 23.0 million (US$ 30.5 million equivalent)

Termes Standard IDA Terme, with 40 years maturity

FinancinR Plans

US $ million

Total of Total

IDA 30.5 52.2CCCE 21.5 36.8FAC 0.8 1.4Government 5.7 9.7

Sub Total 58.4 100.0

Taxes and Duties 10.2

TOTAL 68.6

Economic Rate of Returns 18%

Staff Aipraisal Report: Madagascar Antananarivo Plain Developlrnt ProjectReport No. 8152-MAG

!M!!± IBRD No. 21918

I This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorzation.

MEMORANDUM AND RECOMMENDATION OF THE PRESIDENTOF THE INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE EXECUTWE DIRECTORSON A PROPOSED CREDIT

TO THE DENOCRATIC REPUBLIC OF MADAGASCARFOR AN ANTANANARIVO PLAIN DEVELOPMENT PFOJECT

1. The folloving memorandum and recommendation on a proposedAntananarivo Plain Development Gredit to the Democratic Republic ofMadagascar for SDR 23.0 millior. (US$ 30.5 million equivalent) i8submitted for approval. The proposed credit vould be on standardIDA terme vith 40 years' maturity and would support implementationof the Gov*rnment's strategy for the urban, water supply andsanitation sectors. The project vould be cofinanced by CCCE(US$ 21.5 million equivalent) and FAC (US$ 0.8 million equivalent)(France).

2. Backtround. The city of Antananarivo vas originally builton hills located at the eastern border of thé Plain of Antananarivo.The flat area of about 180 km2 at the foot of the hills is a floodplain of the Ikopa River and its tributaries. With the growth ofAntananarivo suburbs, the low-lying flood pl&iLn has beensubstantially developed, mainly vith lov-standard dvellings lackingmodern infrastructure. In the past, thls plain has been subject toserious floeding, resulting in diaruption in oconomic activities andbo0s of humau llfe.

3. Under the Antananarivo Water and Sanitation Project (Cr.1002-MAG) approved In 1980, IDA intended among other objectives tofinance detalled engineering and vorks for surface drainage ands&nitation. In October 1984, however, because of lengthy delays,these components vere cancelled from the project. It vas understoodwith the Government, at that timo, that these coemponents w>uld formpart of a new project that vould cover the pretection anddevelopment of the Antananarivo plain in a br,ader context.Preliminary studies on the Antananarivo flood protection andagricultural devlopment aspects were alr.ady underway under thePlain of Antananarivo Technical Assistance Credit (1086-MAG),approved in 1980 to define a least-cost investment progr.m for thePlain. The final report of thei. studies vas completed In November1986. Additional studies and experience relevant to the urbanelements of the project have been gathared in connection with theon-going Urban Development Project (1497-MAG).

4. Prclect oblectives. The main objectives of the proposedproject vill be to (a) provide 100-year flood protection that vouldestablsih conditions for long-term growth in the Antananarivosuburbs; (b) rohabilitate and expand the drainage and sanitationfacilities in the Plain; (c) rehabilitate the irrigation schemes onthe Ikopa rigit bank to develop agriculture in the northern part ofthe Plain; (d) initiate the establishment of an economically viableurbanisation program to develop housing and employment in thesouthern part of the Plain; (e) Improve the.local governments

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revenues at the regional level; and (f) improve land use planningand investment programngia ln the Antananarivo Metropolitan region.The project would al80 strengthen the inatitutional framework forintegrated aud controlled development of the Plain.

5. Prolect description. The project vould include thefollowing componentss (a) rehabilitation and construction of dikesalong the Ikopa and Nomba Rivers to reinforce flood protection; (b)construction of drainage structures including a pumping station toevacu&te rain and vaste vater from the plain; (c) construction of anirrigation channel and rehabilitation of Irrigation achemes; (d)rehabilitation and expansion of the existing sewerage system; (e)drainage in the southern part of the Plain in the perspective of afuture urbanization; (g) updating of the cadastre ln theAntananarivo Region; Ch) tuprovement of local finances and resourcesmobilisation; (i) creation of an Authority responsible for operationand maintenance of flood control and drainage facilities, andprivatization of the severage system and of the collection andtreatment of solid vastes; and (j) studies, technical assistanceand training.

6. Total project costs have been estimated at about US$68.6million equivalent, with a foreign exchange component of US$39.1million (57.0 percent`. A breakdown of costs aad the financing planare shown la Schedule A. Amounts and methods of procurement and ofdisbursements, and the disbursement schedule, are ahown in ScheduleB. A timetable of key project processing events and the statue ofBank Group operations in Madagascar are given ln schedule C and D,respectively. A map is alse attachod. The Staff Appraisal ReportNo.8152-MAG, dated February 23, 1990 is being distributedseparately.

7? Rationale for IDA involvement. The Government's urbandevelopment strategy foeuses primarily on maintenance andrehabilitation, which la fully consistent vith the IDA countrystrategy. In this project, IDA emphasis vill be on Lmprovedfinancial and techaical capabilities of municipalities,strengthening urban management and institution building,privatization of municipal services and establishment of costrecovery mechanisms through improvement of existing taxation, andimplementation of a new vater tax. Without IDA involvement, therewould be a serious risk that political pressures would lead to theadoption of a program that does not provide for any institutionalstrengthening.

8. Actions axreed. The Government and the AntananarivoMunicipality have agreed to privatize operation and maintenance ofthe severage system, as vell as collection and treatment of solidvastes. They alseo agreed to create, by December 31, 1992, anautonomous agency for operation and maintenance of the flood control

-3-

sud drainage faciliti es, aud to control urbanisation in the southernpart of theo Plain during project execution. Conditions ofeffectiveness vill be. ML) decision to protect the irrigated areasagainst urbanisation ln the part of the Plain where irrigation vouldb. r.habilitated; and (iL) decision on a system to cover operationand maintoenance cost of flood control and drainage facilitges.Conditions of diabursement vill b.: (Ij mendment to the existingland legislation to makoe mndatory the recording of any transfer ofovn.rship of land; (ii) transfer of urban sewerage and solid vastescollection and disposal activities to private companies, andestablishment of a vater ta%; (Mii) promulgation of measures tocontrol urbanisation in the southern part of the Plain; and (iv)execution of the resettlement plan.

9. Environment. A brief environmental assessment has beencarried out. Its overall conclusion is that the proposed projectvuld have a very positive enviroumental Tmpact on the environmentof the poor suburbs of the capital city, which are periodicallyflooded, vith a severage system out of service and significanthealth hazards. The project vould alse finance erosioncontrollreforestation studies for vatersheds protection.

10. Benefits. The project vould lmprove the living conditionsof the poorest population of the city and of its suburbs, and vouldpermit an environmentally safe and economically rational developmentof this Plain which i. adjacent to the city center.

11. Risks. Tho main risik faced by the project are thosederived from the ecenomic situation of the country, since thecapacity of the population, particularly the urban poor, to pay forimproved services depends on the macroeconomic enviroument. Thisrisk is presently small as definite signa of economic recovery haveappeared in 1989 as a result of a nov vell eatablished economicadjustment program. Other risks are related to the capacity tomanage the project. This however is minimized through projectdesign by privatising part of municipal activities (severage andsolid vaste), having one coordinating agency for the flood controlsystem and adequate technical assistance and training.

12. Recommendation. I am satisfied that the proposed ci ditvould comply vith the Articles of Agreement of the Association andrecommend that the Executive Directors approve the proposed credit.

Barber B. ConablePresident

AttachmentsWashington, DCFebruary 23, 1990.

-4-- Schedule A

ESTIM&TED COST AND FINANCING PLANSumaay Coet aint

<UJS S l.iio..

,,__cu._ e LoaJ 1/ Votegaleti Totd oal V.wetga*.* .. e...m O**.* e..., __

R.a.ttlat 0.5 0.8 1.2 1.8 60.9rampa .a UOnt Dik i.*6 2.4 4.0 5.8 60.9Floo Vicutus Syetm 0.4 0.5 0.9 1.3 51.0Ogalauge Cacale 1.4 2.2 3.6 5.3 60..Pw*pto StatL.a 1.1 1.5 2.6 3.8 57.1Itrrga tion Cam 2.6 3.9 6.S 9.5 59.6Irritgatio Rlabaltataoa 1.5 2.4 3.9 5.6 61.0Smrag. 3.4 5.2 8.6 12.J 60.6Sol4 Viste 0.1 0.2 0.3 U.4 57.3Droiage South Plaa 1.2 1.9 3.2 4.7 60.9LaadqittSom 3.5 0.0 3.5 5.1 0.0Lad 1.LtUry 1.9 1.4 3.3 4.8 41.4Land Téx Offlc. 0.6 0.7 1.3 1.9 54.9Imuctsut:toa But4"sg 1.0 1.5 2.5 3.6 61.3Studis 0.4 1.4 1.8 2.6 78.5Vogk 5fft.tos 0.8 1.2 2.0 . 3.0 60.9pgojae. Un%t 0.7 1.1 1.9 2.7 61.0PI? & CC8 "vaae 0.0 1.4 1.4 2.0 100.0

Total ls. Coati 22.8 29.7 S S 76.5 56.5

physiSel CoutSngencaS 2.3 3.3 5.6 8.2 59.5Pwoe. Coatmgea 4.5 6.0 10.5 U.l 57.5

TOL 29.5 39.1 68.6 100.0 54.9

1/ of wbLoh taxs Us8 Millon 10.S

Igtie value, Dot 1989.

Financing Plan

us 3 Million..............................

LOcl Forelfon etotl of to*

IDA 8.4 22.1 80.6 62.2%CCCE 6.8 16.2 21.6 86.8%FAC 1.8 0.8 1.4%Covernmnt

Investoant 1.9 1.9 8.2%L. Lnd aequiition 3.8 3.8 6.6%

Sub Total 19.4 -W 68.4 140.4

Tex.. end duties 10.2 10.2........................................

TOTAL 29.C 39.1 418.ô

Schedule B

NADAGASCAR Page 1 of 2

ANTANANARIVO PLAIN DEVELOPMENT PROJECT

PR9CUREMENT AND DISBURSSNEST5

PROCUREHNUT ARRANGEMENTS-----(US $ million)…

Project Element ICB LCB Other ai LA. Total Cost S

Civil Vorks 34.8 8.0 42.8(19.4) (1.5) (20.9) 492

Equipmeant 5.6 4.4 10.0(1.0) (2.0) (3.0) 302

Techrdcal Assistance 2.9 2.9(1.8) (1.8) 3S

Training 0.5 0.5(0.2) (0.2) 502

Operating expenses 2.6 2.6(2.2) (2.2) 872

Consulting Services 4.7 4.7(1.2) (1.2) 25£

Land acquisition 3.8 3.8(0.0) (0.0) 0%

Refinancing of PPF 1.1 1.1(1.1) (1.1) 100X

Refinancing of CCCE advance 0.3 0.3(0.0) (0.0) ci

40.4 12.4 8.0 7.8 68 6IDA (20.5) (3.5) (3.2) (3.3) (30.5) 45S2 512 28S 402 43% 45Z

…_____________________________.____________________… __________________

Note z Figures in pareantheses are the respective amounts financed by IDA.a/Contracts avards for technical assistance and consulting services.b/Figures shown above are rouaded and include contingencies.

-6-Schedule B

'age 2 of 2

D jburset« t

_ _

ee......~ US ullieu -- a

Uofua of Ce.dLt 2 of esedi:turtCa.go#y Allocated te b. f Lnaod

1 Civil iwotk 1002 of foega "sd 90Sof local wweuiturg

ta) S.vwas 6.8(b) Sold Vaste 0.2«c) Dr:aisge South PleiA 2.7td) àfdt" t 440l a"

mb. dtka 1.0(>) Othe» 4.2

Tots 14.92 Eqpat lOozot foisa or of local

oxa.fctoci epeditucs Md 90S(a) Sold Vaste 0.1 of local pSadtur. for oteWr(b) Laud regstacy item presued locally.(c>) oth 1.1

Total 2.3

3 Techuical AsJ taswe, TraLaUicouUlting Seivicas 2.8

4 Opett 4"p aau 90 S

(a) !ad fegutgy 1.2<b) othetr 0.5

Total 1.7

5 Rflnacinag of PrF 1.1 Amouat due

6 Uuallocated 7.7

TOTAL 30.5_ece. …… ____ ............ __.--- -----------------------------------------------------

Estimated Disbursements

IDA FY FY91 FY92 FY93 FY94 FY9S FY96 FY97

Annual - 4-400 5.4. 4.8 3.2 6.1 4.4 0.5

Cumulative 9.4 14.2 19.5 25.6 30.0 30.5

Schedule B

MADAGASCAR Page 1 of 2

ANTANAARIVO PLAIN DEVKLOPMIET PROJECT

PFOCURENEMT AND DISBURSEMENTS

PROCUREMENT ARRANGEMENTS-----(US $ million)-----

Project Elesent ICB LCB Other ai N.A. Total Cowt z

Civil Works 34.8 8.0 42.8(19.4) (1.5) (20.9) 49S

Equipm.nt 5.6 4.4 10.0(1.0) (2.0) (3.0) 302

Technical Assistance 2.9 2.9(1.8) (1.8) 632

Training 0.5 0.5(0.2) (0.2) S02

Operating expenses 2.6 2.6(2.2) (2.2) 872

Consulting Services 4.7 4.7(1.2) (1.2) 252

Land acquisition 3.8 i38(0.0) (0.0) OS

Refinancing of PPF 1.1 1.111)(1.1) 100S

Refinancing of CCCE advane. 0.3 0.3(0.0) (0.0) OS

40.4 12.4 8.0 7.8 68.6IDA (20.5) (3.5) (3.2) (3.3) (30.5) 452S 512 282 40S 432 452

Note i Flgures in parentheses are the respective amouats financed by IDA.a/Contre.4ts awards for technical assistance and consulting services.b/Figurts shown above are rounded and include contingencies.

-6- ~~~~~~~Schedul,

Page 2 of 2

Disburs.ments

e._..n.. S S lu @eo....

Amout of Crtdlt 2 of expondlturesCategory Al4c.îed to bc filaacd

_._,-- --------- . .... .................... . ...___

1 Civtl vorke lOOS .1 for.La .ad 902*f local expealdtur

<a> S.vatag ..(b) Solld vaste 0.2(c) Drgajase South P11e 2.7(d) Aadritas-ay caal and

Imbe dLk. 1.0(*) othg 4.2

Total 14.92 Squlypnea lOOZof for4t&a or tof loel

ex.faetory .puditure aMd 90S(a> Solld vaste 0.1 of local xp ndt=re fu ethoe(b) tend rogltry 1.1 Itmsc procur e locelly.(c) others 1.1

Total 23

3 Techaical Assstmnc, Trainln. lOOSCon.ultlag Services 2.8

4 Operatang espense 90 S

(a) Land reglstry 1.2(b> othe«r 0.5

Total l.t

S.5 hinsaina of ?r 1.1 Amount due

6 uallc"teé 7.7

TOTAL 30.5

Estimated Disbursements

US$ millon ---

IDA FY FY91 FY92 FY93 FY94 FY9S FY96 FY97

Anznual - 4.00 5.4 4.8 5.2 6.1 4.4 0.5

Cu-lative 9.4 14.2 19.5 25.6 30.0 30.5

-7.

AN?API !O PtLAfI DEVTLO=;T PROJ?

T?a.tbl. of k.y projeot proceasLs8 eventat

(a) Tté taok te pres rt S y ors(b) Ppau 4 gi b>t oov.gnt O K(4) Vtrst DA *tstions Deçber 1984(4) ~t^App:aU must depa:tiaces Jis 1989(e) N g@otattoa*a Febtuay 1990(5) Plmd date f *ff etLv.ns October 1990<g) Lit o5 relevanct Mes Avtsr Md SeaiiatUa,

Pcojest(Cr. 1002 -G)PCR tornad La July 1989

-8-Schedule D

_______________________or__GASC_a page I of 1S.J.S 0F 9AN GtOtP OPtRÂ:O!%S

A. Stat.atof tank Lans a~d DACt.dLcs Co fSewtf 3.98;a;

Usa.gn; USa'

Tun* .*e .'ih mmd * c201WteArdi p~lt en ie an

,%= = fui y dl bUup^c.

CR I11- 190t Madagascfr Aceumtm à A1t 11.60 0.0Ci 1211-U Ulm U2 .pe. Village Lsvetc SS 8.14 0.07

CM 1200-O UIM Madegc T*iu'cp. évy 011 g,pi*Sentl 1." 0.'51

CR 187"- lu 1t2 Ud«oàer lut AI sdtne 10.0- 4.20CR 1îsO-UO ts m e su ii:»wtY 28.06 0.80C1.01144A4 11 l à -$mage * 20.00 0.1:Cit 148-A 1068 Mmo#or. Cnor. 0.wIomlo_ 7.00 0.70CI.P0-11AO lm Umdegm ca' 5 *U e.0 Ci.11010UA 100l WMdmgmuc Ur O.2 .08

Ce 13il620-Mé 10 èes4ur Cye d.ilo Ihblilmtati 11.00 0.1?

Cri 1Us14 lm Madagascar A wst.mmc 1111I.M 4.71CR.Aut,-éAo 1lm8 Mmdégmenh * (CeA) 20.« 0.10

Ci t10. 1000 Madagmee IruignmoI i..ltIIOUOIS 10.8 0.0Ci10-AS t 100 Umdmgssch ACCseu;m*ie Ugw tfSAIOi 10.0 11.02ci18-1.* 100 tdU o9 c« Cyclem Suppioa8 3 1 @*ci iS9t-NAS lm6 tmdmgmmecm Ag. s5etor Adjumt. CrOdtt 21. 0..,I

CR *0104*4 lm0 0 tq o 0 aee a 1 .00 49.14

CR 1084-uoA lm0 Umt«pgmm Tht 'bd *ai 1 my adt4i 11,70011014 Um mdmm r Secord Ai. etttutlIo*e 1L.09 6.21

CR %17u2-»* 1ui macdgmscr p.so habif l!ta%tion 1U.09 18.29

CR 1707.0*4 1907 Oudagacef c ntfry 26.0 20.92

Ci 10-04s l 10 vélodgtsteut s"4ec Agnk.iIbuteI C.« dt.00 6.00

CR 184040 lm0 lEumdgs Imdustry end ?twer PRIscy 071.0 2ôèIsCR *024* 10lu moue * * * * 1.00 210.1

CR 1î78-A lm U ForeM.e fom% Ug. & Pnroet* on 7." S.11

co 10-"A 1000 fidmgccm 5vertmh migI1umy 40.00 30.ô?Ci 1 9251* 1'M *mg of Itmmml Uelg cas. 0.06 6.94

CR 141L-lU* 1011 utd _ #r Public Sectof Adjus%Sol 126.00 03.80Cit 1941-19 10 Medemc a * a (Su l) 1.40 0.0e

Cll 107-04 19" 9bdgmece' 8eoo..;c mnmega.st à Sociil Action 22.00 20S3

CR 2042-*4 g/ 1999 md$PgmCm r Nmt'l *grcultnlui otmërmch 24.00 23.e3

TOTAL 32.67 947.72 129.1Sof *b;ot h omo roid ll.Sl 9.40

TOTAL mm. o.uttad in 21.00 980.20

fAmeI1I no 0.0of mch bas bhC .;m. -é0.

TOTAL aw heid by Sonm *-id I0A 21.00 939.2n

TOTAL gedi chur~d 329 3S

ne pitua of pro;cit listod ;A Pot A is d«cribod ÎA a s*oDtfOe .oforC on cO 9pnk':A.fl;mm«d pe.olS ctA ir cxcuioi, *h;ch ic ;potmla t;wco y*omly ont cipc.amted to tno £atc.t -

Drcr«t',r oe , Aar4 30 and Oc4tb r :1 T! s* wd;gbgeed bmolnc* of :0A 6 mmd 7 n USt ses calci.Ited t :so SOR -t* of 9/311sa9.

SJ Not yot *tffectv4.

9

Schedule D

page 2 of 2

S. Statmat of t,EC tflvosstm! n< a of SDeosb. 30. :989>

Loan t4ui ,.... e......(USS iilon. - ......-

19?? Sotéma - Textile Mi1l at Majunga 11.000 0.2991980 $t - Shoe xufacturing in

Anttnurivo 1.250 L.2501903 Plcherles de NfomsL-1e 2.570 0.099 2.GI91985 Coton^. S. A. at Antsirabe 9.Z91 0.184 9.st51907 Sotema * TextiLe Mill et Majunga 3.717 0.009 3.720

Total 2-t.82 0 28. 19.

Total couitmnusnov hold by rFc 13C69L 0.591 14.209

MADAGASCARANTANANARIVO PLAIN PROJECT

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