World Bank Document...111 S1lih W»te hM~gemt 0.80 3.30 4.10 IY Limo ,f Creait 0.00 4.90 4.90 Y latittieml DV,lepSmt 0.10 3.30 3.40 vi Pr.ject Admiistratiem 0.40 2.70 3.10 BASE COST

Document of

The World Bank

FOR OFYICIAL USE ONLY

Rq»rt No. 7279-MOZ

STAFF APPRAISAL REPORT

MOZAMBIQUE

URBAN REHABILITATION PROJECT

July 1, 1988

Southern Africa DepartmentInfrastructure Operations Division

1T»b doc t h«s a red d1bud amd may be used by rodpints only Ia the perfornmace of| etr ofI does. IS esteos may . herwise be disdosed wt Wodd Dauk 9mthoriZatDo.

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CURRENCY EQUIVAT.ENTS

Currency Unit - Metical (plural Meticais)US$1 = 450 Meticais (Mts)

Mt 100 = US$0.22

MEASURES AND EQUIVALENTS

1 Meter (m) = 3.28 Feet1 Square Mleter (m.sq) = 10.76 Square Feet1 Hectare = 2.47 Acres1 Kilometer = 0.62 Miles

ABBREVIATIONS AND ACRONYMS

A de M = Agua de MaputoA da B = Agua da BeiraAfDB African Development BankAPIE 5 Administracao do Parque Immobiliario do

EstadoBPD = Banco Popular de DesenvolvimentoBM - Banco de MocambiqueCECB = Conselho Executivo da Cidade da Beira

CECM = Conselho Executivo da Cidade de Maputo

DCU - Direccao de Construcao e UrbanizacaoDFP = Direccao da Funcao PublicaDNA = Direccao Nacional de Aguas

DEC = Direccao de Economia e de Construcao

DNEP = Direccao Nacional de Estradas e Pontes

DSU = Direccao de Servicos Urbanos

ERP = Economic Rehabilitation ProgramFINNIDA = Government of Finland Development Agency

GPE Gabinete de Promocao de Emprego

HABITAR = Housing Management and Supervision Unit

INPF = Instituto Nacional de PlaneamentoFísico

MCA = Ministerio da Construcao e ..-uas

MAE = Ministerio da Administracao Escatal

MT = Ministerio do TrabalhoPIU = Project Implementation Unit (MCA)

PROHABITA = Gabinete de Programas de HaDitacao

FOR OYICIAL USE ONLY

MOZAMBIQUE

URBAN REHABILITATION PROJECT

TABLE OF CONTENTS

Page No.

CREDIT AND PROWTECT SUMMARY ........... ........... o .... . i iíi

I. PROJECT BACKGROUND . . . 1A. Introduction . . 1B. Sectoral Context...... ... . .. ....... . 2C. Ratior.ale for Bank Group Involvement . .6

II. THE PROJECT ..... 7A. Project Objectives .... 7B. Project Descríption ... ...... . . 7C. Project Cost and Financing Plan .................. 10D. Cost Recovery ........... * ................ ....... . 10E. Relocation and Resettlementns ......de...se t e....me .nt 13F. Employment Generation .... 14G. Justification, Benefits and Risks .... 14

III. PROJECT IMPLEMENTATION .. ...... . ........... . 15A. Institutional Arrangements ........... ............ 15B. Action Plan ...... ****... ..O ...................... *......* .... 17C. Procurement ........ o........... * .............. .. . 18D. Disbursement. **.. ......... .... *.......... ... * . 35E. Accounting and Auditing......................... 21F. Technical Assistance and Consulting Services ..... 23

IV. AGREEMENTS, CONDITIONS AND PECOMMENDATIGNS . .24A. Agreements and Conditions ........................ 248. Recommendations ............. . .... ....... *.............. * . 25

This report is based on the findings of an appraisal mission to Mozambiquein Apríl, 1988, consisting of World Bank staff Mr. D. Graham (MissionLeader), Mr. R. Chavez, Ms. T. Genta Fons and Ms. S. Brebion andconsultants Messrs. Echeverria, Fontanals, Gatuelas, Homanen and Nankman.Ms. L. Iacono was responsible for report processing.

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

Table of Contenta (Cont'd)

ANNEXEo

1 Selected Documenta Available on the Project File2 Infrastructure R*habilitation3 Housing Rehabilítation4 Sclid Waste Management5 Lineas of Credit6 Institutional Development7 Detailed Project Costs8 Economic Analysis9 Employment Generation

MAPS IBRD No. 20914 (Mozambique)IBRD No. 2Q915 (Maputo)IBRD No. 20916 (Beira)

MOZAMBIQUE

URBAN REHABILITA'PION PROJECT

CREDIT AND PROJECT SUMMRY

Borrower: Peopl.'s Republic of Mozambique

Beneficiarles: Ministry of Construction and Water (MCA), Ministry ofLabour (NT), Ministry of State Administration (MAE)Conselho Executivo da Cidade de Maputo (CECM), ConcelhoExecutivo da Cidade da Beira (CECB), Agua de Maputo(AdeM), Agua da Beira (AdaB), small and micro-enterprises.

Amounts SDR 44.0 million (US$60.0 míllion equivalent).

Termss Standard with 40 years maturity.

ProjectDescriítion: Within the context of Mozambique's Ecosnomic

Rehabilitation Program, the project would rehabilitatekey elements of urban infrastructure to enhance theefficiency of the urban sector and to help offset thesocial costa of strue-tural adjustment through thegeneration of some 35,000 jobs in productive employmentduring the project's szx year implementation period.The project would also atrengthen the institutionsresponsible for planning, operation eand mainterance ofurban services and assist their efforta to achievefinancial viability through resource mobilization atthe local level and with the introduction of affordablecost recovery mechanisma for urban services andhousing. The project consista of inter-relatedelemento constituting a unified and comprehensiveresponse to the decline in the country's infrasture byfocusing on the rehabilitation of vital infrastructureand housing in conjunetion with demonstration ofpolicies that would make possible the provision of thephysical, human and financial resources for futuremaintenance. To deliver this, it brings together thefollowing aspectas (i) the rehabilitation ofinfrastructure networks, housing and municipal servicesin Maputo and Beira; (ii) demonstration of policies forcost recovery and replicability in rehabilitation; and(iii) training and technical assistance to provide thehuman resources and institutional strengthening to

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carry through and replicate these programs. Anintegral part of the project would be (iv) the creatil>oof employment thr>ugh labour intensive methods ofrehabilitation and lines of credit to small and micro-enterprises with training and technical assistance.

Benefitsand Risks: The expenditure of relatively small amounts on

infrastructure rehabilitation will save the need formuch larger future investments in reconstruction andwill yield relatively high economic rates of return,estimated at 39%. The investments in Beira areessential to the development of the Beira transportcorridor which will be one of the country's mainforeign exchanpe earners, while much of the investmentin Maputo will assist in foreign exchange earnings orsavings. Risks are that the project may exceedimplementing capacity and that the security situationmay impede the completion of some project components.The project's restriction to the two principal citiesis intended to minimize the risks associated withlimited implementation capacity and the securitysituation. The Government's demonstrated strongcommitment to the objectives and approach proposed andthe careful consideration given to the appropriatelevel and type of implementation assistance andmanpowe. development provided by the project will alsohelp to minimize these risks.

AF6INJune, 1988

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r rBlquEUrem Rmbeb.littima Projcet

Semm rg Prej.ct C.sts ai Fl"e mi a Piam

PROJECT COMPONENTS LOCAL FOREIGN TOTAL-$---- - SUS Million---------

1 lfretructur. Rffbelltatie 7.00 24.30 31.30

11 Iuim, lRela tlitati.m 4.20 19.00 23.20

111 S1lih W»te hM~gemt 0.80 3.30 4.10

IY Limo ,f Creait 0.00 4.90 4.90

Y latittieml DV,lepSmt 0.10 3.30 3.40

vi Pr.ject Admiistratiem 0.40 2.70 3.10

BASE COST 12.50 57.50 70.00

Physical Contingencies 1.20 5.00 6.20PriceContingencies 1.40 6.20 7.60

TOTAL COST 15.10 68.70 83.00

FIIMANCIM PIAM LOCAL FOREIGN TOTAL------- tUS Mtllion------

~overnment 6.00 0.00 6.00IDA 6.OC 54.00 60.00Paralell Fin ncing, Finnnida & Spain 3.10 14.70 17.80

TOTAL 15.10 68.70 83.80

IDA DISBURSEIEMTS -------------------US$ million-----------------

IDA Ficel Yeur 1989 1990 1991 1992 1993 1994 1995

Annuol Amount 1.00 7.00 14.00 16.00 14.00 6.00 2.00Cummulatlve 1.00 8.00 22.00 38.00 52.00 58.00 60.00%of Total 1.7 13.3 36.7 63.3 86.7 96.7 100

MOZAMBIQUE

URBAN REHABILITATION PROJECT

I. BACKGROUND

A. Intr. uction

1.01 The EconomIc Rehabil±tation Program (ERP) implemented by theGovernment of Mozambique has brought about much needed economic reforms andhas helped to reverse the economic decline of previous years. The successof the ERP at the macro-level has highlighted the need to rehabilítate thecountry's rundown infrastructure in order to increase efficiency andfacilitate a supply response. Particularly at risk is the provision ofservices essential to the effective fun.,tioning of the main transportcorridora, which used to be the country's principal foreign exchangeearners. At the same time, the economic stringencies of the EP.P in the formof higher prices and public sector lay-offs have, at least temporarily,exacerbated an already cr-.tical situation of urban unemployment and lowincome levels. Government's growing concern with these issues and itsdesire to rapidly develop a program to alleviate the situation, led toidentification of an Urban Rehabilitation Project that would rehabilitatekey elements of the country's infrastructure and, in so doing, also help tomitigate the social impacta of structural adjustment through the rapidcreation of jcbs, in both public and private kectors.

1.02 To respond to this urgent situation, ID.A has assisted In theaccelerated preparation of a project (identified in October, 1987) which,although not classified as an 'Emergeney Project", contains many of theelements of such a project, including a simplified and shortenedimplementation schedule under a tightly defited action plan (see paras 3.03- 3.06). The- project combines actions to address immediate issues,including:

(a) immediate rehabilitation of infrastructure to avoid morecostly reconstruction later;

(b) provision of essential urban services to enable the transittrade - MHzambiqueis principal foreign exchange earner - tofunction; and

(c) generation of productive employment;

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with the initiation of actions to address medium to longer term issues,including:

(d) introduction of affordable standards and cost recovery t>ensure replicabílity;

(e) strengthening of the capacity of local governmentinstitutions to plan, operate and maintain infrastructure andservices with training, technical assistance and resourcemobilízation: and

(f) development of a housing strategy to address the pressingproblems posed by rapi. urban growth.

1.03 Progress in e'Jdressing these medium to longer term issues would bemonitored closely during the implementation of the proposed project and theresults incorporated in sector policies and future investment pzograms.

B. Sectoral Context

Population and Urbanization

1.04 Mozambique, one of the poorest countries in the world, with a percapita GDP of US$150 (1986), has an area of nearly 800,000 squarekilometers and a population of approximately 14 million. Between 1970 and1985, total population grew from 9.25 million to 13.85 million, an averageannual growth rate of 2.7%. During the same period, urban population grewfrom 0.8 million (9% of total population) to 2.2 million (16% of totalpopuleslon), an average annual growth rate of 7.0%. At these rates, aboutone quarter of the total population of 21 million projected for the turn ofthe century would be living in urban areas.

1.05 About half of the urban population lives in Maputo, whichincreased in population from 385,000 in 1970 to over one million today.The other major city, Beira, has a population of about 300,000. Someestimates indicate that Maputo's population is growing by more than 8% perannum. With the revival of Beira's transit trade, that city is alsoexpected to experience very rapid growth. The current urban growth hasbeen fuelled by the war in the countryside, where continued attacks byarmed bandits, which have intensified since the early eighties, have causedlarge sections of the population to move, cither into cities or intoneighbouring countries.

Sector Issues

1.06 The urban sector is currently in a state of disarray, withseverely deteriorated infrastructure, límited or non existant serviíes,weakened institutions and virtually no independent financial resources.This is not to say that Government is not taking action to remedy thesituation, but a number of difficult issues need to be resolved, some ofwhich are described below.

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1.07 Trained Personnel ShortaRe - Prior to independence in 1975, mostof the urban infrastructure and services were managed and operated byPortuguese, with very little training of Mozambicans. Thus, when all but ahandful of the Portuguese left at independence, there were virtually notrained personnel left to run the cities. This problem extended to privatebusinesses involved in constructíon and the supply of building materials,most of which were abandoned by their owners and which, for lack of anyalternative management, were taken over by the S+ate. Despite progress ineducation since independence, the shortage of skilled personnel attechnical and managerial levels is still 'ne of the most critical issuesfacing the country today. The proposed ptoject would help to address thislsst;e in the urban sector by providing assistance to the local governmenttraining institute and direct technical assistance for the management ofthe cities of Maputo and Beira.

1.08 Deteriorated Infrastructure - Despite the rapid rate of urbangrowth since independence, urban infrastructure and services have scarcelybeen extended, while the existing systems have deteriorated with lack olmaintenance. In Maputo, the water distribution system has deteriorated tosuch an extent that unaccounted for water is now estimated to amount tobetween 45% and 65% of water produced, a proportion that is likely to risewhen pressure increases as new supplies are brought into operation later in1988. New production and treatment schemes will bring supply into balancewith demand for a brief period in 1990, after which new source developmentwill be required. In Beira, where electric power is out for more than halfthe year on average, the water distribution system is in a worse conditionend the sewerage system is blocked, causing a considerable health risk. Inboth cities, the municipal servie?'s are unable to cope with mountingquantities of solid waste. In summary, conditions are such that, of thetwo main transport corridor cities, which are the main potential earners offoreign exchange, Beira is scarcely habitable and Maputo is facing severeinfrastructure and service deficiencies. The proposed project wouldaddress these issues with infrastructure rehabilitation programs (see para2.02 (a) and (c»j and strengthening of cost recovery programs (para 2.07).

1.09 Nationalized Housinz - Rental housing was nationalized inFebruary, 1976, while owner occupied housing remained in private hands. AState Housing Agency (APIE) was set up to administer the nationalizedhousing stock, which consists of some 80,000 apartments - about a quarterof the urban housing stock. However, the notional rental of 2% of incomecharged by APIE has been quite inadequate to provide even the mostrudimentary maintenance and in many buildings the electrical systems,plumbing and sewerage are falling to pieces, some being uninhabitable andposing serious health hazards. In April, 1988, Government announcedsubstantial increases in rents (about 2-5 times their previous levels) toat least cover maintenance costs. While this action begins to solve theproblem of inadequate maJi,tenance, it also raises the practical issuee offinding alternative acconmodation fnr the thousands of families who are nowunable to afford the rent of their exlsting apartment and will need torelocate. The housing rehabilítation schemes and relocation schemesproposed under the project (see paras 2.02 (b) and 2.09) are intended to

demonstrate a means of addressing this issue, while progresa towards thedevelopment of a national housing strategy, including policíes for costrecovery and rehabilitation and maintenance of the public sector housingstock, would be reviewed annually by GOM and IDA during projectimplement.tion. During negotiations, the Government províded assuranceathat it would:

(a) not later than Juno 30, 1989; and

(b) not later than June 30, of each year, thereafter, reviewjointly with the Association progress achieved in designingand adopting a National Housing Strategy, including policiesof rehabilítation and maintenance of the existing publicsector housing stock and the achievement of full costrecovery (para 4.01).

1.10 The low level of new residential construction during the lastdecade, together with a high rate of urban population growth, are creatinga large urban housing shortage. To keep pace with demand, increased supplyof sites and services together with assistance to self-help housing and theprovision of credit facilities will be necessary including plot developmenton a cost-recovery basis, as an alternative to subsidized housing providedby the StaLe. In this respect, the development of realistic and affordablestandards in terms of infrastructure, plot sizes and housing is critical.

1.11 Local Resource Mobilization - There is an urgent need to generatemunicipal revenues to finance urban infrastructure and services. A largeproportion of local government expenditures sre financed from transfersfrom central government. There are no substantial land or property taxesand no municipal taxes, although local governments are empowered to levycharges for some services, theae user charges are very low and have notbeen adjusted in many years. More effective local resource mobilization isenvisaged as a result of the on-going IDA assisted lo0al government financeand administration study (see para 1.12).

1.12 Weak Instítutions - After independence, the former Camaras(municipal councila) were abolished, as were most forma of local taxation,and the lo( 1 authoritles, the Conselhos Executivos das Cidades (CECs),became larg -y dependent on the Central Government. This situation is nowbeginning to be reversed; in 1983 the Fourth Congress condemned over-centralisation and called for a greater role for the private sector in thenation's economic development. In 1986 the Ministr> of StateAdministration was created, with one of its three areas of responsibilitybeing to develop local administration, and a special task force wasestablished to review the atructure of the Cliy Government of Maputo. Mostrecently, in December 1987, the Government requested World Bank assistancein the restructuring of local government administration and finance, thusproviding an opportunity to revitalise local institutions. A Bank assistedstudy of local government administration and finance is underway and isexpected to be completed by August 1988. It will be followed by a seminaron local government operations, management and finance in September, 1988.

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Durin& neRotiations the Government provided assurances that the action planbased on the recommendations of the study to strengthen local govern=entinstitution' and fir.ances would be sent to IDA by March 31, 189 andreviewed with IDA by June 30, 1989. Progress in implementation would bereviewed annually thereafter. The strengthening of local government bodieswould be aided by technical assistance and traíning to be prov4ded underthe project through thc center for Urban Management (see para 2.02 (e) (ii)and Annex 6).

1.13 Financial Constraints - Lack of financial resources, particularlyforeign exchange, has frequently prevented local institutions frompurchasing apares and equípment needed to keep services fune.tioning. Forexample,in Maputo and Beira the municipal workshops are devoid of apareparts. The transít trade that flows through the ports of Mapuco, Beira andNacala is expected to become a growing source of foreign exchange, as itwas in the past, part of which needs to be reserved for the essential urbanservíces of these cities, on which the efficiency of this transit tradedepends.

International Aid

1.14 With the proposed project, IDA would be one of several donorsproviding assistance to rehabilitate Mozambique's key urban centeraservícing the transit trade: Maputo, Beira and Nacala. Precise figures onthe amount of these investments are not readily available, but they can beestimated to have amounted to about US$30 - 40 million per year over thepast few years, almost entirely in the water, sewerage and drainage sectorand mostly in Maputo. Extensive drainage works and rehabilitation of thesewerage network in Maputo have been assisted by the Netherlands, wnilewater production and transmission mains have been finan ced by Italy and theAfrican Developmanli R-1 'AfDB). In Beira, rehabilitation of the watertreataent plaur. and pumping stations are being financed by the ItalianGovernment and rehabilitation of sewage pumping stations by theNetherlands. Finland is financing the rehabilitation of the waterdistribution network in Beira (see para 2.04) and, with the Netherlands,the provision of technical assistance to the water company (AdaB). Finlandis also assisting in the reh?hilitation of the city of Nacala and, togetherwith IDA, will be aponsoring the local government seminar in September,1988. One of the aims of the proposed project is to complete therehabilitation of the remaining essential paris of the infrastructurenetwork in Maputo and Beira and develop a programmatic approach to futurerehabilitation and maintenance efforts. To achieve this, improved donorcoordination is essential, and the project envisages exchange ofinformation between Government and IDA and the calling of donor meetings asneeded.

Sector Oblectives

1.15 The Government's main objectives for the sector are:

(a) to rehabilitate the existing infrastructure in ordez to prcserveand make full use of investments that have been made in the past;

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(b) to strengthen local Rovernment particularly the plan.iing,operatiorn and maintenance of urban services by municipalities,which are to be reinforced and made more fiscally independent;

(c) to reduce subsidies for housinz and municipal services through theestablishment of cost based pricing systems and encouragement ofprivate ownership;

(d) to extend affordable services to low income areas hithertounservíced; and

(e) stimulate the growth of small and micro-enterprises to createproductive employment.

C. Rationale for Bank Group Involvement

1.16 The Government of Mozambique has been working closely with IDA indeveloping and implementing its Economic Rehabilitation Program, for whichtwo IDA credita have been provided and a third is under preparation. Insupport of these initiatives, IDA is also developing a program of project-based credita to atrengthen the adjustment process. The interventionproposed under thís project is an integral part of this process in that itwould directly assist in offsetting some of the social costs encountered inthe transitional phase of adjustment and at the same time improve theenvironnent in the two key urban centera, creating conditions for broad-based economic development through rehabilitation of infrastructuro andservices and institutional strengthening, particularly of local government.These activities would coaplement existing and proposed IDA interventionain other sectors, including education, health, industry, transport andagriculture. The cost recovery aspects of the project, in conjunetion withmore affordable housing standards, are an important step towards morerational pricing of urban services. These, and the introduction of moreeffective user charges and possibly new local government taxes, willprovide a significant impetus to local resource mobilisation.

1.17 IDA intervention is also appropriate to complement the investmentsof bilateral donora in the sector and to help ensure an overall coherencyto sector development. Finally, IDA's extensive experience in the sectorwill provide technical support to GOM for the adoption of appropriate tndreplicable solutions.

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II. THE PROJECT

A. Prolect Oblectives

2.01 The primary objectives of the project are to assist Government inachieving its objectives (se. para 1.15), i.e. to stem the deterioration inbasic urban infrastructure and services and to mitigate the social costa ofatructural adjustment through the implementation of a program c.f urbanrehabilitation and employment generation. This program would, through anintegrated approach to infrastructure rehabilitation, employment generationand institutional development, aim to:

(a) rehabilitate key elements of urban infrastructure andhousing;

(b) provide employment through labor-intensive constructionmethods and stimulation of small and micro-enterprises;

(c) strengthen the local institutions responsible for provisionand maintenance of urban infrastructure and services and theofforts towards becoming more financially independent throughcost r<covery and stimulatíng local resource mobilization;and

(d) support initiatives already being undertaken by theGovernment in cost recovery, institutional reform and newpolicy directions.

In addition, the project is intended to complement a number of bilaterallysupported investments already underway, and it incorporates othercomponents to be carried out through parallel financing by other donors.

B. Prolect Description

2.02 The project would include the following components:

(a) Rehabilitation of Infrastructure (Annex 2): Rehabilitationand limited extensions of infrastructure systems in Maputoand Beira, including (i) roads -- resurfacing orreconstruction and maintenance of key primary roads in bothcities plus, in Maputo, reconstruction of the Costa do Solbridge and upgrading of the access road to the sites andservices area; (ii) water, sewerage and storm drainaze --leak detectíon and emergency repaira of the secondary waterdlstribution system and the extension of a water main toMahotas and the sites and services area, including theassociated distribution network, construction of stormdrainage for a critical traffic circle (Praca 16 Junho) inMaputo, a study of the long-terrn sources of water for Maputo

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of the long-term sources of water for Maputo and therehabilitation of the water distribution network (to beparallel financed by Finland) and the main sewage collectorand the secondary sewage system in Beira; and (iii) coastalprotection -- priority repairs to erosion control groynes andsea walls and construction of some new groynes and sea wallsin both cities.

(b) Housing Rehabilitation (Annex 3): will be effected throughinter-related solutions, including: (1) the completion ofthree unfinished highrise buildings in Maputo and one inBeira covering about 249 residential apartments and 26,OOC m2of office space, most of which would be made available forrental in foreign currency; (2) the rehabilitation of 7apartment complexes in Maputo (about 775 residential units)and 11 in Beira (about 220 apartments), which are currentlyin an advanced stage of deterioration due to lack ofmaintenance. Three hundred of the Maputo> apartment unitswould be made available for rental in foreign currency; (3)new sites and services areas as well as infrastructureupgrading in existing low-income settlements, for about 2,285plots ia four different locations in Maputo, and for about1,500 plots in one location in Beira. The legal documentassigning all project sites to MCA has been reviewed atnegotiations. The Government of Finland will finance in Beirathe provision of 1,150 serviced plots on the Inhamizua 1 site(1,000 of which would be provided with core houses andallocated to CFM workers), and the upgrading ofinfrastructures in the existing but only partly occupiedMuchatazínha housing project (where most of the approximately250 unoccupied plots would be provided with core houses andmade available to CFM workers); (4) relocation,resettlement and integration of existing occupants: (i)households occupying apartments earmarked for rehabilitationand unable to afford the new rents (Para 1.09) will berelocated on sites and b -vices plots provided with corehouses under the project. About 300 households in Maputo and80 in Beira would be involved. Rental revenues in foreigncurrency from the buílding completion and rehabilitation sub-components would be used to cross-subsidize the core houses;(ii) about 25 squatter households to be displaced by therehabilitation of the Praca de 16 Junho in Maputo will beresettled on sites and services plots provided under theproject; (iíi) about 90 existing dwellings on two of thetown sites ín Maputo and 300 households on the Beira sitewill be maintained on these sites and accomodated within thenew site lay-outs.

(c) Solid Waste Management (Annex 4): Upgrading of the solidwaste management services of Maputo and Beira, includingvehicles, equipment, spare parts and technical assistance andtraining for the garbage collection systems and municipal

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vehicle and equipment maintenance workshops (to be parallelfinanced by Spain, see para 2.04). The approach to beadopted would include involvement of prívate sectorcooperatives in the solid waste collection process.

(d) Credit Lines (Annex 5): Provision of employment-generatingcredit programs in support of the project components,including: (í) assistance to small and micro-enterprises --to finance equipment, spare parts, and working capital, aswell as technical assistance, particularly for theconstruction related sectors; loans would be made availablethrough the Banco Popular de Desenvolvimento (BPD) to micro-enterprises employing ten or less people (up to 50 peoplewhere building materials industries are concerned) on theBPD's current terms which range from 18-24% for up to to 5years (a review of interest rate structures is currentlyunderway). (ii) building materials credita -- for individualsor groups of families for rehabilitation of dwellings andconstruction of core units or pit latrines, in connectionwith the housing rehabilitation component (para 2.02 'b)).These loans would be made available through BPD to sites andservices residents under existing terms, i.e. 25 years at aminimum of 9% interest (para 2.08).

(e) Institutional Development and Prolect Administration (Annex6): Funding for appropriate technical assistance andtraining to strengthen project execution capability, as wellas to assist in strengthening local governments, would beprovideds (i) to the Project Implementation Unit (PIU) in theMinistry of Construction and Water (MCA) and HABITAR, forproject coordination, as well as for developing investmentplanning capacity; (ii) to the Ministry o£ StateAdministration (MAE) through the Direccao da Funcao Publica(DFP) for strengthening the Center for Urban Management fortraining local government officials; and (iii) to theMinistry of Labor (MT) for the Gabinete de Promocao deEmprego (GPE) and (iv) to the CECs in Maputo and Beira forinstitutional strengthening. Technical assistance forimplementation and administration of all individual projectcomponents would be provided to each of the respectiveexecuting units (see para 3.01 for detailed description ofproject ímplementation arrangements).

2.03 In all the components, the use of labour intensive methods ofimplementation, operation and maintenance would be emphasized in order tocreate the maximum amount of employment consistent with sound engineeringpractices and the overall financial and management constraints. Inaddition, the proposed housing rehabilitation scheme (para 2.02 (b) above)is intended to test an approach to solving the problem of the deterioratingatock of apartments throughout the country, through financially viablerehabilitation schemes coupled with arrangementa for improved maintenanceand periodic reviews by GOM and IDA of levels of rents and the adequacy ofmaintenance provisivas.

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C. Prolect Costs and Financing Plan

Prolect Costs

2.04 The total cost of the project is estimated at US$83.8 millionequivalent, with a foreign exchange component of at US$68.6 millionequivalent. A sumnary of project costa and the financing plan is shown inTable 2.1, below (and in more detail in Annex 7). Base costa have beenestimated in Meticais in June 1988 prices, and converted to US Dollara atUS$1 - Mt 450. Physical contingencies have been estimated at 30% for allitema except institutional development and project management. Pricecontingencies have been calculated for all costs on the basis of estimatedforeign prico increases of 5.6% for 1988, 5.4% for 1989, and 1% a yearthereafter, based on the region's best estimates for the period of projectexecution. The project would be implemented over a six year period endingDecember 31, 1994 (see para 3.07).

Financing Plan

2.05 The financing plan foz the project is shown in Table 2.1. An IDAcredit of US$60 million would finance 72% of total project costs. Thecredit would be on standard IDA terms for 40 years with a 10 year graceperiod. GOM would directly contribute US$6 million equivalent, or 7% ofproject costs. The project is being closely coordinated with theGovernment of Finland which undertook the study of infrastructure in Beiraand is planning to parallel finance the water distribution rehabilitation(US$6.1 million, base costs) and low income housing components (US$6.2million, base costs) in Beira. Spain will parallel finance equipment andtechnical assistance for solid waste management in Maputo (US$3.9 millioa,base costs) as part of the project under a twinning arrangement between thecities of Barcelona and Maputo.

2.06 Flow of Funds. The Government of Mozambique would pass on the IDAcredit to the Ministries responsible for project implementation in the form-f budget allocations.

D. Cost Recovery

2.07 Government poiicy is to move toward full cost recovery whereverpossible and this policy has been carried out in a number of recentactions, including the removal of food subsidies, increases in rents andwater tariffs. The project would assist the Government in making progresstowards this goal through strengthening cost recovery measures ininfrastructure, housing and urban services. About 63% of project costswould be recovered directly from beneficiaries for water and seweragerehabilitation, housing rehabilitation and línes of credit, while recoveryof a further 30% of costs, mainly for roads and drainage and municipalsergices, would fall within the purview of local taxes and fees which willbe established through the ongoing local government finance andadministration study, the ímplementation of which would be reviewed by GOMand IDA. Given the precarious economic situation of Mozambique and the

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Urbe. Rehebilitetiem Prpject

$-merg Prsject Cets aeS Flmmctmg Piem

PROJE;. COMPONENTS LOCAL FOREIGN TOTALMillion- …---

1 Ifretructure Reumbilitetfem 7.00 24.30 31.30

11 H.simg ReIebilitetie 4.20 19.00 23.20

111 Solid Wmte le egFmt 0.80 3.30 4.10

IY Limes of Crudit 0.00 4.90 4.90

Y Imstttimeml Deveispmeut 0.10 3.30 3.40

Vi Preject Amimistretica 0.40 2.70 3.10

BASE COST 12.50 57.50 70.00

Physical Contingencies 1.20 5.00 6.20Price Contingencies 1.40 6.20 7.60

TOTAL COST 15.10 60.70 83e00

FIINCING PIAM LOCAL FOREIGN TOTAL------- SUS Million------

Government 6.00 0.00 6.00IDA 6.00 54.00 60.00Pareleli Financing, Finnida&Spaln 3.10 14.70 17.80

TOTAL 15.10 68-71 83.80

IDA DISBURSEMENTS -------------------US$ rnlion-----------------

IDAFiaxal YVor 1989 1990 1991 1992 1993 1994 1995

Annual Amunt 1.00 7.00 14.00 16.00 14.00 6.00 2.00Cummuletive 1.00 8.00 22.00 38.00 52.00 58.00 60.00% of Totll 1.7 13.3 36.7 63.3 86.7 96.7 100

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wid.spread price increases associated with the economic rehabilitationprogram, socio-economic surveys are being undertaken to determine theimpact of recent price increases on the target groups. Durinzn.gotiations, the Government provided assurances that the results of thesesurveys would be furnished to IDA by March 31, 1988 and be reviewed withIDA by June 30, 1989, when an *ction plan to address their findings and atimetable would be drawn up.

2.08 The achievement of full cost recovery for maintenance andreplacement of buildings would be reviewed by GOM and IDA as part of theannual review the national of housing strategy (para 1.09). Each of theprovincial capital cities has a separate water utility which, foradministrative and financial purpose, comes under ckc control of theDirecao Nacional de Aguas (DNA), which determines che control of thenational water tariff. The national tariff for water supply is set in sucha way as to yield a surl-Lus to Agua de Maputo (AdeM) which is used tocross-subsidize the amaller towns (the 15Z sanitation surcharge, on theother hand, is insufficient to cover the cost of the service). Agua daBeira (AdaB) is unable to provide an adequate servíce and does not coverits costs. AdeM and AdaB are receiving substantial technical assistancefrom bilateral donors which should help to improve their operatlonal andfinancial performance (including their accounting systems - see Annex 2).Both water and sanitation tariffs would be studied under the project andwould be reviewed by GOM and IDA with the objective of enabling the waterand sanitation agencies in Maputo and Beira to achieve financial viabilityby 1993. The proposed cost recovery mechanisms, on which the Governmentprovided assurances at negotiations, are outlined below:

(a) sites and services: on-site project costs would berecovered directly from beneficiaries through plotallocation fees; recovery of off-site electricalinfrastructure costs is included in the existing tariffsof the utility company, while recovery of off-site waterinfrastructure would be the subject of the tariff study.

(b) cost of completed buildings, rehabilitated apartments andcore houses would be recovered through rental or leasepurchase of the units, in local or foreign currency; theannual review of housing strategy would include a reviewof the adequacy of these charges to recover costs (para1.09);

(e) water and sewerage and storm drainage investments andmaintenance would be recovered through user charges andfees. During negotiations, the Government providedassurances that a study of water and sanitation tariffswould be completed by December 31, 1989 and reviewed withIDA by June 30, 1990, wlen an action plan to implement itsfindings would be agreed upon and targets set for thewater and sanitation agencies in Maputo and Beira toachieve financial viability by FY-1993.

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(d) recovery of the costa of road and storm drainageinvestments and maintenance would be through taxes *nduser charges to be determined as a result of the study tostrengthen local government institutions and finances(para 1.12);

(e> garbage collectíon operations and maintenance would berecovered through the introduction of local governmenttaxes, which are being reviewed (se. para 1.12);

(f) building materials credita and small and micro-enterprisecredits, would be recovered from beneficiar$es through theintermediary banking institution, Banco Popular deDesenvolvimento (BPD). Existing rates of interest appliedby BPD would be applicable to the small and micro-enterprise credits, that is 18-24% per annum, while aminimum rate of 9% per annum would be applicable forbuilding materiala credits (see Annex 5). During thecurrent period of structural adjustment, inflation is highin Mozambique (estimated at 35% in 1988) as prices adjust,but is expected to reduce in the future. Interest rateson 9he línea of credit would be reviewed at the annualproject reviews to ensure that they are consistant withnational credit policies.

E. Relocation and Resettlement

2.09 As indicated in para 1.09, Mozambique faces a serious issue inrelation to maintenance of the public sector housing atock. As a firststep towarda resolving this problem, the Government has raised rents verysubstantially effective from April, 1988, changing the basis of assessmentfrom a percentage of income to floor area and location of the dwelling(thus the mount of the inerease varies according to the income of theinhabitant and the floor arca of the house, but on average may rangebetween 100% and 4002). Although a more appropriate method of assessment,the change is likely to lead to (a) a large relocation of population in thecities, as people move to smaller, lesa well lotated dwellings that theycan afford; and (b) greater density as families double up to be able toafford the rent.

2.10 The housing rehabilitation components are intended to serve as apilot means of addressing this issue through the provision of alternativelow-income housing suitably located in central arcas for çhose unable toafford existing rents. In the first phase of the project, 300 core unitawould be buílt in inner city locations in Maputo and 80 in Beira, wh$chwould then be used to house families moved from decaying apartment blockswhich are to be rehabilitated. Surveys carried out amongst the residentsof apartment blocks to be rehabílitated show that over 60% of them wouldprefer to move to the more traditional ground level core unit to beprovided under the project, which would offer the possibílity of hceownership.

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2.11 To make such a scheme replicable, a proportion of the 990apartments to be rehabilitated (about one third) would be rented in hardcurrency at rate; that are very much higher (US$3.60 per m2 per month) thanthose applicable in Meticaís (US$0.2 per m2 per month). This would enablethe scheme to benef't from the great demand for housing from expatriatesand others with the means to pay in hard currency. At the same time, itwould contribute to resolving the critical shortage of housing fortechnical assistance facing all aid projects in Mozambique. The surplusgenerared by this arrangement would be used to cross-subsidize about two-thirds of the cost of housing provided for the lowest income groups to berelocated from apartments. It would also be used to ensure that thebuildings are adequately maintained in future and to replicate the schemeon a wider basis (Annex 3 describes in more detail the concepts underlyingthe housing rehabilitation component and the modalities of itsimplementation). The resettlement plan was reviewed by IDA atnegotiations, when assurances from the Government were obtained concerningits implementation (para 4.01 (i)). Assurances were also obtained thatGovernment would enforce the agreement by the State Housing Agency (APIE)to rent a proportion of rehabilitated apartments in hard currency, whichwas also reviewed at negotiations.

F. Employment Generation

2.12 About 35,000 man years of employment would be supported directlyand indirectly by the rroject over a six year period, at an average costper job of about US$1,800 equivalent. Direct employment is estimated atabout 24,000 man years or 4,000 jobs in construction over the six years.The infrastructure rehabilitation components would generate about 11,700man years of employment during the construction period and then wouldrequire about 500 permanent jobs in the city council of Beira and 1,100 lnthat of Maputo, for the ongoing maintenance of the rehabilitatedinfrastructure systems. The housing rehabilitation components wculdrequire about 8,500 man years for the completion of buildings, therehabilitation of apartments and the construction of the serviced plots.In addition, about 2,000 man years of employment would be generated throughthe use of the materials loane and micro-enterprise credits. Only about200 additional jobs would be added in garbage collection as staff of therespective departments are largely already in place; their productivity,however, would be significantly increased through the introduction ofappropriate equipment and vehicles.

G. Justification, Benefits and Risks

2.13 The expenditure of relatively small amounts on infrastructurerehabilitation will save the need for much larger future investments inreconstruction and can be expected to yield relatively high economic ratesof return. The investments in Beira are essential to the development ofthe Beira Transport Corridor, which will be one of the country's mainforeign exchange earners, while much of the investment in Maputo will alsoassist in foreign exchange earnings or savings. Direct benefits tohouseholds include improved water, sanitation, shelter and transportation.

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There would be significant decreases in working days lost for healthreasons, and reductions in health costs, as well as tlme savings associatedwith improved transportation. From an environmental point of view, theimproved sanitation of low income housing areas and of high-rise buildings,as well as better solid waste managemer.t and coustal erosion protection areconsidered to be direct benefits to the urban environment.

2.14 The components for which the ERR was calculated consist primarilyof infrastructure and housing rehabilitation and amount to 38% and 33Zrespectively of total project costs. Their average ERRs are estimated at38% and 40% respectívely (for details see Annex 8). No estimate isavaílable of the benefits from the lines of credit to small and micro-enterprises, but the additional employment likely to be generated isconsidered to be significant (see para 2.12 above).

2.15 Risks are that the project may exceed the implementing capacity ofthe executing agencies and that the security situation may impede thecompletion of some project components. The project's restriction to thetwo principal cities is intended to minimize the risks associated withlimited implementation capacity and the security situation. TheGovernment's demonstrated strong coimítment to the objectives and approachproposed and the carefui consideration given to the appropriate level andtype of implementation assistance to be provided will also help to minimizethese risks. Experience during project preparation has shown thatGovernment has a highly competent management team in place and this sameteam will be strengthened with technical assistance, including a projectcoordinatoc, procurement adviser and financial controller, tc. ensure timelyimplementation of the project (see para 3.01 and Annex 6).

III. PROJECT IMPLEMENTATION

A. Institutional ArranZements

3.01 Responsibility for implementation of most of the project wouldreside with the Ministry of Construction and Water (MCA), with smallcomponents being the responsibility of the Ministry of State Adminístration(MAE) and the Ministry of Labour (MT). Within MCA, the overall policy andstrategic planning will remaín with each of MCA's National Directoratesinvolved, while a Project Implementation Unit (PIU) has been establishedwithin MCA for project coordination (see proposed Organization Chart 3.1).The Director of the PIU will report directly to the Minister ofConstruction and Water under the advise of MCA's Steering Committee, which4i made up of the National Directors of the Economy and ConstructionDirectorate (DEC), the National Water Directorate (DNA) and the NationalRoada and Bridges Directorate (DNEP . The legal instrument establishingthe PIU was reviewed at negotiations. Through technical assistance and a

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MOZAMBIQUEUrban Rehabilltation Project CHART 3.1

Prmgot Progmt Implnentatin Units Orlzan

| tntMsn ofCo«ruction " ftWer

St.rIng CommtttssDEC, DNEP, DN

Projot lmphmntstto.Un1t Dirntor

.

Prwurumet Pro_ct _ Fl_cblAdviur Icuortnato

IPro. sPr es met

PROHABITA Directo[ (MCA)

Director

[ ProJect _ FtnicblCort tor Ocntrolbor

Fleld Implomentetion | Fisld !mplementattonTem MAPUTO T"m BEIR

Potudil to h flct pubrto al dracm "*hown ln bd««.

- 17 -

limited number of internationally recruited conaultants, the financialcontrol and construction cost control would be províded along withsupervision of procurement, bidding and contracting actívities as shown inthe draft organization chart of the PIU. The appointment of key staff ofthe PIU is a condition of credit effectiveness. DNEP will be responsiblefor road rehabilítation and th. DNA for drainago rehabilitation and,through the Maputo Water Company (AdeM), for the water supply component inMaputo, and through the Beira Water Company (AdaB) for the water andsewerage components in Beira. DNEP would be responsible for the emergencyerosion control component. The rehabilitation of the apartments and thecompletion of buildings would be the responsibility of the Gabinete deProgramas de Habitacao (PROHABITA), the Housing Planning Department of DEC,within which a Housing Management and Supervision Unit (HABITAR) has beenestablished to implement these components of the project. The sites andservices upgrading and core units and buílding materials components wouldbe the responsibility of the City Councils' (CECs) Departments ofConstruction and Urbanization (DCU) with the assistance of HABITAR. Legalagreementa between MCA and the CECs and between DNA and the watercompanies, specifying their mutual obligations for project implementation,were reviewed at negotiations. The funds for small and micro-enterprisesand the buílding materials credits componenta would be channeled throughthe state-owned Banco Popular de Desenvolvimento (BPD) to eligibleapplicants. In accordance with national banking regulationa, financialagreements would be entered into between BPD and MCA. for the buildingmaterials credita and between BPD and MT's Gabinete de Promocao de Emprego(GPE) for small and micro-enterprise credits. Execution of theseagreements would be a condition of Credit effectiveness (para 4.02). IDAapproval of the model Loan Agreementa to be entered into by BPD andeligible beneficiaries in accordance with the elígibility criteria to beincluded in the fii.ancial agreementa would be a condition of disbursementfor thiz component (para 4.03). a condition of credit effectiveness.

3.02 To maximize the employment generated by the project, MCA'sSteering Committee and the PIU would also monitor the manpower requirementaof each of the civil works components and ensure that the works maintainthe most appropriate labor-intensive constructior. methods, as proposed inthe engineering documenta. A careful accounting of employment generationwould be maintained during projet^t implementation through quarterlyemployment budgeta and reporta as part of PIU normal quarterly projectreporting responsibilities.

B. Action Plan

3.03 To achieve the immediate objectUves of the rehabilitation of thetwo major cities, the project implementation schedule of most of the civilworks is planned over a four-year period with some of the sites and1services and upgrading schemes, lines of credit, atudies and policymeasures extending over a further two years. The contract approvalprocedures have been carefully a;nalyzed to identify critical stepa toreduce the processing time to minimum achievable time frames. The PIU

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within MCA would monitor the progresa on each component and coordinate theoverall project. A series of action plans have been developed for eachcomponent which would be updated on a quarterly basis. Work schedulesbased on these plans would be overlayed to determíne the critical path forthe implemer.tation of the project as follows:

Datail.d Engin..ring Execut onPhastna Documnntation A Blddlno of Works

Plan I, Infrastructur. Rehab. - UtilIti6s 4/88 - 8/88 10/88 - 12/90PIan II. Infrestructur. R.hab. - Roads 6/88 - 0/88 12/88 - 6/91Pian III. Houuing R*hab. a) APT R.hab. 4/8e - 9/88 11/88 - 3/91

b) upgrading, S & S & Core Unita 4/88 - ô/88 9/88 - 9/94c) completion of bidg. 4/88 - 6/88 10/88 - 9198

Plan IV Municipal Service Support 4/88 - 6/88 10/88 - 9/91

3.04 Plan I and II, Infrastructure Rehabilitation Works, would bephased to ensure coordination of the rehabilitation of the utility networksand their installation prior to paving and surfacing drainage works.

3.05 Plan III, Housing ReSh4bil1tation. The success of the housingrehabilitation of the low-income apartment buildings depends on an earlystart of the urban infill sites and servíces with core units. About 300families of the 1,000 occupying the Maputo apartments to be rehabilitatedwill not be able to pay the new rent and will need the alternativeaccommodation referred to above. The Habitar team will coordinate theseactivities with the CECs.

3.06 Early Project effectiveness is expected for October 1988, and thecompletion date for the project would be December 1994, with a closing dateone year thereafter. The six year project implementation period compareswith seven years for similar projects in the region and is consideredrealistic in view of the close attention paid to project management and thepreparation of tightly defined action plans.

C. Procurement

3.07 All goods and services to be financed by IDA will be procured inaccordance with the Bank's procurement guidelines. Table 3.1 summarizesthe procurement procedures to be applied to the various components. Therehabilitation of the infrastructure - major roads, water, sanitary sewerand drainage networks and marine structures for coastal erosion control,(US$27.7 million) as well as the completion of buildings (US$9.5 million)would beprocured through international competitive bidding (ICB). Thetotal ICB for the project would be US$41.2 million of which US$37.1 millionwould be disbursed from the IDA credit. Parallel financing by other donorawould provide US$17.8 million to finance parta of the water networks, sitesand services and solid waste management using procurement procedures fromeach donor country.

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TABLE 3.21

11=MUIQUEUrbe. Rel.ItlmtIt.a Prjuet

PROCURE MEIT ARRANSEIIEENT

ln US$ milllon

C'mponnts ICC LCS LocOl P rull.l Other TotalShooiru Financino Procedum Cost

e) Iertra turs kh.bil.l»1. Roed & Drinqoe ReIubilttaton 13.99 13.99

12.59 12.592. Watr & Svarae Rahubilitation 13.70 6.72 (a) 20.42

12.33 12.333. Emsrgency Erosion Control 3.05 3.05

2.75 2.75h) IHwi.g Rhbehlitmtiem

1. Rehsb. Liw InomApartnunts 6.21 0.71 6.925.59 0.64 6.23

2. Upgruing & Sltw & Servlcas 4.39 0.69 6.72 (b) 1 1.803.95 0.62 4.57

3. Complstton of Butidingp 9.52 9.521___ =___ ==______________ _8.57 0.57

1. Gorbog Collocthn Equtp. I puto 4.35 (e) 4.55

2. Grbep Collactton Equi p. Beira 0.97 0.97.________________________ 0.87 0.87

d) Lil cf Credit1. Suli & Micro Enterpris 3.32 3.32

2.99 2.992. ingq Improvement/ ornstr. 2.!2.

1.90 1.90e> Ialtutteusl Dw.1.p..t

1. TA. & Tr. and Project Mnqem.nt 1.15 1.151.15 1.15

2. Studios and Enrnwori ng(incl. PPF) 2.75 2.75__________________________ _2.75 2.75

f) Pr,ejt Admiltratlem1. YetMcls and Equtpment 2.80 2.80

2.80 2.802.0portng9Costa 0.51 0.51

. ______________________ 0.51 0.51Toblt 44.03 10.60 6.83 17.79 4.41 83.66

Amue te e disburu bg IBRD 39.91 9.54 6.15 0.00 4.41 60.00

(a) and (b) to beco-finoncd by FINNIDA; (c) te beco-finencad bySpatn.

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3.08 Because there are geograph$cally scattered, of amall size andinvolve labor intenslve works, the housing rehabilitation contracta(US$5.59 miliíon) will be packaged into 6 lots for Maputo and 3 lota lnBeira for local competitive bidding (LCB). Since work can not start untilthe oecupants are temporarily relocated I-"- core houses (which are thefirst priority), the construction sta: be staggered over threeyears. This process precludes ICB prot a. The average value of thesecontract lots is US$660,000 while the average value per site is US$165,000.Similar reasons would apply to limiting the upgrading and sites andservices contracts (<S$3.95 million) to LCB. The 4.'l LCB would beUS$10.6 million of which US$9.5 million would be disbursed from the IDAcredit. There remains a number of small tasks such as flushing the sanitarynetworks out to the street sewers and cleaning of water supply systemswhich would be packaged for local shopping (LS) (US$0.7 million) along withsmall drainage works in the upgrading and site development component(US$0.7 million). The average value of these amall works would be aboutUS$20,000 and works and itema or groups of items estimated to cost lesathan the equivalent of US$50,000 per contract, up to an aggregate amountnot to exceed US$1.5 million would be procured under contracts awarded onthe basis of comparison of price quotations solicited from a list of atleast three suppiíers eligible under the Guidelines, in accordance withprocedures acceptable to IDA. In addition, the goods and materials to beprocured under the lines of credit, with an average credit value of aboutUS$1,000 would slso be procured through Local Shopping (LS) procedures up

to an aggregate amount not to exceed US$5.0 million. The total LS would beUS$6.8 million of which US$6.2 million would be disbursed from the !DAcredit.

3.09 Draft standard LCB and LS contracta were reviewed at negotiationsand referred to the Bank's Procurement Unít for detaíled review. Theequipment, vehicles and imported materials would be packaged into lotaprocured through ICB procedures. Lccal building materials costing lessthe.s US$50,000 per component would be procured through LCB procedure.However, the aggregate amount so procured would not exceed US$1.5 million.Consultants would be contracted locally and internationally ín accordancewith Bank guidelines. Quarterly updating of unit costs and materials andequipment will be maintained along wilh close and continued on-sitesupervision which will facilitate timely procurement. MCA will have theresponsibility for having contracts reviewed by ita existing Bid EvaluationCommittee. The Ministry of Finance and the Bank of Mozambique will approvethe financial terms of contracts after vetting by PIU. The first LCBcontract would be reviewed and cleared by IDA to ensure compliance with theBank's procurement guidelines. For all contracts with an estimated valueof US$750,000 or more, IDA will review and approve procurement documenta,specifications and awarda prior to the signing of the contracts. Othercontracts will be subject to post award review by IDA supervision missions.Assurances on procurement arrangements were obtained from Government atnexotiations.

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D. Disbursement

3.10 Disbursements by IDA at the rate of 70% would be made againsteligible local project expenditures net of taxes and duties for civilworks, materials and equipment. Disbursementa would be 1002 againsteligible foreign expenditures. Amounts to be disbursed by IDA areindicated in Table 3.2 Disbursement Arrangementa. Disbursement forconsultant services, training, atudies and surveys would be made at therate of 100% of total expenditures. Disbursements would be made againststatementa of expenditures (SOEs` for the following items: (a) contractafor works and goods valued at lesa than US$250,000 equivalent; (b)contracts for consultants' services valued at less than US$100,000equivalent; (c) local training programs; (d) operating costs; and (e) linesof credit. Documentation in support of the SOEs would be retained by theexecuting agencies for inspection by IDA's supervision missions. If theexperience in the first year of project implementation confirms that SOEsare being used correctly, IDA could consider raising the SOE limit to matchthe prior review limit. All other disbursements would be fully documented.

3.11 In order to help accelerate project implementation and Creditdisbursements, a single special account would be established to serve allproject components. This account would be opened in a commercial bank, andoperated through the Bank of Mozambíque (BM) lr. accordance with exlstingGovernment regulations which require that ali foreign currency payments beauthorized through BM. The Financial Controller in the PIU would approveall payments from the Special Account and would be made responsible foraggregation of documents, reconciiation of bank atatements as required byIDA and preparation of replenishment applications for signature byofficials designated by BM. Assurances on disbursement arrangementa wereobtained from the Governêent at negotiations.

E. Accountina and Auditing

3.12 The PIU would maintain consolidated accounts for the entireproject. The responsibility of the detaíled accounting for roads would bew$th the DNEP and for water and sewers with Aguas de Maputo (AdeM) and Aguada Beira (AdaB). HABITAR would maintain accounta for all housing-relatedand resettlement plan accounts and GPE would maintain aeccounts for thelines of credit to small and micro-enterprises. For urban services, theDSU of the CECs of Maputo and Beira would maintain detailed accounts. ThePIU would be required to recruit a qualified financial analyst fcr the postof Financial Controller with an accounting support staff that would prepareconsoiídated expenditure accounts, quarterly reporta, annual financialplans and internal audita. The appoíntment of PIU's key staff (Director,Project Coordinator, Procurement Advisor and Financial Controller), wouldbe a condition of Credit effectiveness (para 4.02).

3.13 The Project Coordinator of the PIU would supervise and monitor thesystems of cost control, critical path and monitoring. Technicalassistance and consulting services would be provided under the project tothe ímplementing and operating agencies - DEC, DNA, DNEP, AdeM, AdaB, the

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Urne Rebmhilitatism Pr.jet

Dislursmet Arreapgm ts

Tht IDA credit vil] be disburud on the folloving beis:

Catsrg Item am.mt Hlmaermenmt(US$ million)

1 Civil Works

a) Infrastructure Relbtblltation, 19.70 1 00% of forelgn and 70% ofExtenuion and Miantenence,inciuding loal expenditures.labor, miteriais and tools for vorks

1) Custel Protection Works 2.20 100% of foreign and 70% oflocal expenditures.

c) figh and Low Income 1170 100% of foreignand 70% ofApartmentRehabtlitatfon and local expendltures.Buulding Completion

d) Upgrading and Sites & Services 3.50 1 00% of foreign and 70% ofloal expendKitures.

2 Umos f Credit

a) For Nemo Improverent and 1.80 1 00% of foreign and 70% ofConstruction local expenditures.

b> For Small & Micro Enterpris 2.60 100% of foreign expenditures.

3 VYlielo, Eq pmomt, 2.80 100%C of foreign and 705 ofOffice Equi pmmnt, Supplies local expenditure.and Spare Parts

4 Co.ltoat $srvls. 6.10 100%Training, Studies,and Surveujs.

5 Opsr Rtim Cot 2.10 100% of lcalexpenditures.

6 PPF Rofimi 1 50 Amiunt Due

7 UNlloeti 6.00

Total 60.00

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DSUs and MAE (DFP) and MT (GPE). Short-term technical assistance wouldalso be made available at the end of each fiscal year to ensure thatproject accounts are in order, that the financial statements suitable forauditing are drawn up, and that the project is audited by independentauditora acceptable to IDA. During negotiations, the Govern=ent providedassurances that audited financial statements acceptable to IDA would beaubmitted to IDA within six months of the end of each financial year.Statements of expenditures (SOEs) would be included in the audit andmpecifically addressed in the audit report.

3.14 Quarterly Reportinz. In addition to their annual accounting andaudit reporting responsibilities, the PIU of MCA would prepare quarterlyprogress reports which shall include budget reports for each component(including employment budgets) on actual and projected expenditures anddisbursement categories. These reports would be due within one month ofthe close of each quarter.

F. Technical Assistance and Consulting Services

3.15 Assistance would be provided under each of the project components(see Estimated Cost Table Annex 7, Page 1), in order to accomplish thefollowing:

(a) strengthen the capacity of ímplementing agencies to executethe project and to provide for on-going maintenancet}.ereafter, such as in the case of the road rehabilitation,vater rehabilitation and solid waste management components;

(b) provide a project administration capability, were there isnone, within the existing institutional structure, such asín the case of the PIU and HABITAR; and

(c) for developing the institutional capacity in areas relatedto, but not directly involvíng implementation, such as inthe case of development planning in DEC and landregistration or management of housing in ".oth the citycouncils of Maputo and Beira.

3.16 About 320 man months of assistance would be required forconsultants to assist in the detailed final design and contractdocumentation, and mainly, in contract supervision of the civil workscomponenta. In addition, about 140 man months of technical assistance wouldbe provided to improve and manage project financing, budgetary, accounting,auditing, and reporting activities. The cost of technical assistance andconsulting services, as well as that of the related equipment and operatingexpenses are shown in Annex 6. The Table also shows where and what type oftechnical assistance or other consulting services are provided. In view ofthe shortage of housing for expatriate technical assistance, care has beentaken to ensure *hat housing will be available when needed under theproject. The agreement of the State Housing Agency (APIE) to make thishousing available was presented at nezottations (when the Governmentprovided assurances concerning its implementation.

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IV. AGREEMENTS, CONDITIONS AND RECOMMENDATIONS

A. Agreements and Conditions

4.01 DurinR negotiations assurances were obtained from the Governmenton the following matters:

(a) an action plan based on the recommendations of the study tostrengthen local government institutions and finances wouldbe sent to IDA by March 31, 1989 and reviewed with IDA byJune 30 t x,hen a timetablc f.r implementation of therecommendations, including cost recovery mechanisms, would beagreed. Progress on implementing the action plan tostrengthen local government bodies would be reviewed with IDAannually thereafter under the proposed project (para 1.12);

(b) The on-going socio-economic sample surveys under the buildingrehabilitation component to assess the impact of recent priceincreases, should be sent to IDA by March 31, 1989 and bereviewed with IDA by June 30, 1989, when an action plan toaddress their findings would be drawn up (para 2.07);

(c) A study of water and sanitation tariffs would be completed byDecember 31, 1989 and revíewed with IDA by June 30, 1990 whenan action plan to address its findinga would be agreed uponand targets set for the water and sanitation agencies inMaputo and Beira to achieve financial viability by FY-1993(para 2.08).

(d) GOM to review with IDA progress on the development of ahousing strategy by June 30, 1989 and annually thereafterwith the objective of achieving full cost recovery for publicsector housing. These reviews to include policies forrehabilitation and maintenance of the existing public sectorhousing stock (para 1.09);

(e) cost recovery arrangementa for project components(paras 2.06 - 2.08);

(f) the institutional arrangements for project implementation andthe action plans, including the timing of appointment of keystaff to the PIU and the housing units (paras 3.01 - 3.06);

(g) employment of technical assistance and consulting services,including provision of counterpart staff (paras 3.15 - 3.16);

(h) provision of housing for project consultants (para 3.16); and

(i) implementation of the resettlement plan for persons to berelocated under the project (para 2.11).

- 25 -

4.02 Conditions of effectiveness would be:

(a) the execution of the financial agreements between BPD and MCAand between BPD and MT's GPE (para 3.01); and

(b) appointment of key staff to the PIU (paras 3.01 and 3.12).

4.03 Condition of Disbursement would be IDA approval of the model loanagreements to be used under the lines of credit for amall and micro-enterprises and for building materials loans (para 3.01).

B. Recommendations

4.04 On the basis of the above actions and agreements, the proposedproject would be suitable for an IDA credit of US$60 million equivalent onstandard terms.

AF6INJune, 1988

- 26 -

ANNEX 1Page 1 of 3

MOZAMBIQUE

URBAN REHABILITATION PROJECT

SELECTED DOCUMENTS AVAILABLE ON THE ?LAOJECT FILE

Reporte on Urban Infrastructure, Housing and Municipal Services inBe'ra by Plancenter of Finland, October 1987 (23 volumes).

Engineering and Economic Feasibility reports on roada in Maputoand Beira by Roughton and Partners, February and April 1988.

Inception Report and Detailed Engineering Report, on Maputo WaterDistribution Extension and Rehabilitation and Report on MaputoControl Erosion by Sir M. MacDonald and Partners, January andMarch 1988.

First phase viability study on building rehabilitation andcompletion by Bratex, January 3988, plus detailed engineeringatudies for each building, March 1988.

E'easibility reporta and Final Designs of Beira SewerageRehabilitation, Beira Control Erosion and Drainage of the Praca 16Junho in Maputo by DHV, March 1988.

Feasibility reporta on the Laulane-Mahotas (Maputo) sites andservices component by UNCHS-Habitat, January and March 1988.

Preliminary report on the Inhamuize (Beira) sites and servicescomponent by Comiassao Provincial do Planeamento Fisico, December1987.

Reports on small scale enterprises in Maputo and Beira by Fion deVletter, February and March 1988.

Projetos de Ceramicas da Maputo by MCA, February 1988.

Extracts from the Constitution of the Popular Republic ofMozambique.

Lei de Terras (effective as of September 25, 1979), withintroduction and explanatory notes, in 4a Sessao, AssembleiaPopular, Documentos No.l.

Lei do Arrendamento, with introduction and explanatory notes, in:4e Sessao, Assembleia Popular, Documentos No.3.

- 27 -

ANNEX 1Page 2 of 3

Lei das Cooperativas, No.9179 de 10 de Julho, in: Sa Sessao,Assembleia Popular, Documentos, No.l.

Estatuto do Ministerio da Construcao e Aguas, Diploma Ministerializ: Boletim da Republica, 21 de Janeiro 1987.

DDecreto No.24/87 de 27 de Outubro; determinacao da renda dosimoveis que constituem o Parque Imobiliario do Estado ins Boletimda Republica, 30 de Outubro de 1987. (With explanatory note).

la Reuniao Nacional sobre cidades e bairros comunais, Doc. No.l;Resolucao Geral, 1979.

la Reuniao Nacional sobre cidades e bairros comunais, Doc. No.3tResolucao sobre as zonas verdes, 1979.

la Reuniao nacional sobre cidades e bairros comanais, Doc. No.5:Resolucao sobre o urbanismo, 1979.

Problemas Habitacionais na cidade de Maputo; o fornecimento demateriais de construcao, by Dominique Raynauld, DCU of CECM,January, 1984.

O Sector Foral da D.C.U., April 1984. (Paper on situation up to1984 by Titus Pereira and Paul Jenkins).

O Cadastro Predial na Cidade de Maputo, March 1984. (Paper onsituation up to 1984, by Titus Fereira and Paul Jenkins).

DCU of Conselho Executivo de Maputo - administrative forms:Various forms used for land requests.Normas para distribucao de terrenosForm for survey of occupation of plots.Request for building license.

Cidade de Maputo - Plano de Estrutura, (1985)

(Selected photocopies from the document).

NGO shelter activities in MozambiqueIYSH, SINA (Settlements Information Network Africa, December,1986.

Territorial Dilemmas; Urban Plannin; and HousinR in IndependentMozambique, by Barry Pinsky, with Jens Svendsen and ErikGregersen, June 1983.

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ANNEX 1Page 3 of 3

NO:

In 1984-85, INPF prepared a series of internal discussion documento onurban land use and its control. As a result of the modifications ofinstitutional responsibilities for Planning and Housíng at that time, thesedocuments were never approved or elaborated upon. Although veryinformatíve, they could not be photocopied. This series includes thefollowing paperss

Orientacoes para uso dos terrenos urbanos:O controlo de utilisacao dos terrenos urbanos:

lo Cadernos O planeamento urbano

2o Caderno: Normas e regulamentos

3o Caderno: Metodos e processos de atribucao de terrenosa novo ocupacao.

4o Caderno: Metodos e processos de atribucao de terrenos(2) legalizacao da ocupacao existente.

5o Caderno^ Cadastro urbano e registo da ocupacao.

AFMINJune, 1988

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ANNEX 2

Page 1 of 9

MOZAMBIQUE

URBAN REHABILITATION PROJECT

REHABILITATION OF INFRASTRUCTURE NETWORKS

Oblectives

1. Over the past decade the urban population of Mozambique has grownfrom 0.8 million to 2.2 million. During that period the urbaninfrastructure networks practically were not extended as the operating andmaintenance capacity of systems gradually broke down. As a result of over-utilization and deferred maintenance urban infrastructure networks havedeteriorated to a level were major elements of the systems are in danger ofuúIng totally lost. The priruary objectives of this component are to atemthe deterioration of basic infrastructure networks, and extend them werenecessary, in order to bring them back to basic operating levels which inturn would permit user charges to be collected and thus ensure the ongoingmaintenance of the systems.

Description

2. This component would include the rehabilitation and límitedextension of priority sections of the road, storm drainage, water supplyand sewerage networks, and of coastal protection works for the urban areasof Maputo and Beira. The proposed investments are intended to complementinitial efforts already being unlertaken by the government with support ofother multilateral or bilateral 4gencies. Water transmission and treatmentfacilities in Maputo, financed by the African Development Bank (ADB), arenearing complUtion; sewerage and drainage projecta, finarzed by theNetherlands are also nearly completed; in Beira, water transmission isbeing financed by Italy while the water distribution component included inthis project would be parallel financed by Finland; sewerage pumpingetation rehabilitation is being financed by the Netherlands. The proposedproject would include the following components, organized by systems:

a) Priority Road and Storm DrainaRe Network Rehabilitation. InMaputo the proposed project would provide for:

i) rehabilitation and maintenance of priority sections ofthe primary toad network;

ii) reconstruction of the Costa do Sol bridge, toconsolidate direct access to fishing and agriculturalproduction areas for Maputo;

iii) drainage of the June 16th circle, which provides accessto the city and is subject to serious periodicflooding;

iv) in Beira, the project would include rehabilitation ofthe main highway serving the industrial areas, andmaintenance of the primary road and storm drainagenetwork.

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ANNEX 2Page 2 of 9

b) Priorit, Water and Sewerage Rehabilitation. This componentwould include:

i) design and execution of the emergency waterdistribution network rehabilitation and priorityextension program, for Maputo;

ii) in Beira, a similar water distribution networkrehabilitation program, (to be parallel financed byFinnida), plus,

iii) the rehabilitation of the water-borne sewerage network;and,

c) Coastal Erosion Control. This component would includes

i) design and rehabilitation of erosion control works(groynes, sea walls etc.) in Maputo, and,

ii) similar urgent works in Beira.

Costs

3. The estimated direct (base) costs for the component are as follows(see cost tables in Annex 7 for detailed cost and contingencies):

Subcomponente USS Million

a) Priority Road and Storm Drainage Rehabilitation:

1) rohabilItation of road network, Maputo .. 6.. .... ô.99

11) reconstruction of Costa do Sol bridge, Maputo ........ 0.S

111) drainago of tho June lôth cirole, M*puto ... . 0.94

iv) r.habiltation of road n-twork, Beira .. 4. . 45

b) Priority Water and Sewerage Rehabilitation

1) wat.r network rehabilitation and ext.nsion, Maputo 8.44

Ui) water network rohabilitation, Beira . .13

i11) rehabliltation aeweraga network, Beira .. .... . 2.2

e) Em.rgoncy Erosion Control

1) rehabilitation of *rosion control works, Maputo ... 0.86

11) rehabilitation of *rosion control works, Beira . 1.68

Subtotal ... . 31.83

- 31 -

ANNEX 2Page 3 of 9

Financing and Cost Recovery

4. Parallel financing would be provided by Finnida for the waterdistribution network rehabilitation for Beira. The remaining costs wouldbe financed by the IDA credit and the government counterpart (see FinancingPlan, Table 1). To the extent possible, costs of the different componentswould be recovered from the project beneficiaries in order to allow for thereplication of the varíous programs. The cost recovery mechanisms to beused are:

a) water and sewerage investments and maintenance would bepartially recovered through user charges and fees;

b) road and storm drainage investments and maintenance would bepartially recovered through the vehicie regístration feca andpetrol user tax and other charges as necessary; and,

c) there is no direct cost recovery foreseen for the coastalprotection works.

Implementation

5. The overall coordination of project implementation would be underthe responsibility of the Ministry of Construction and Water (MCA). Thewater supply component for the capital would be done by the Maputo WaterCompany (AdM), while the sewerage component for Beira would be carried outby the Beira Water Company (AdB). Road upgrading and erosion protectionworks would fall under the responsibility of the National Roads and BridgesAuthority (DNEP), through ita regional offices. Once rehabilitated, theongoing maintenance of these works would devolve to the respective CityCouncils. Technical assistance for institutional development would beprovided to the Ministry of Construction and Water at the central level,directly to the local City Councils, and to the executing agencies. Civilworks administered by the various agencies would be carried out, asappropriate, by small or large private enterprises, in accordance withprocurement procedures acceptable to the Bank (see chapter on procurement).

Status of Prolect Preparation

6. Maputo Road Rehabilitation. With the present low level truckflows, of which 75% are empty, their pattern is not critical today;however, truck routes should be established with appropriate enforcementregulationas for both cities to reduce damage to the residential streets inthe near future. Given the high volumes of pedestrians and carts mixingwith automotive traffic, there is a need for including low-speed vehiclepatha from Laulane-Mahotas to the city center, and on the proposed Maputo-Machava road. The complete Draft Engineeríng and Economic FeasibilityReport (February 1988) have been reviewed, together with the revised listof road sections to be rehabilitated (125,530 m) for an estimated US$5.4million (base-cost). The final bílls of quantities and specification andcontract documents will be completed by June 1988. Further detailedtesting will be undertaken in phase II to ensure that only the prioritysections will be included. This component will include a fu.l1 slow-moving

- 32 -

ANNEX 2Page 4 of 9

traffic and pedestrian lane to extend from the northern and of Av. VladimirLenine to the junction of Av. Julius Nyerere using concrete pavíng blockswith retaining curbs. In addition, consultants will design four road testsections of 75 m using concrete pavers along Av. Mariana M'Gouabi, to bebullt during the first 9ix months of the project, ao that their performanc-can be evaluated, and if favorable, the use of concrete block pavera can beincreased along that road, or others. The cost of emergency repairs andresurfacing/maintenance is estimated at US$0.5 million and US$1.08 million(base cost), respectively. MCA has employed local consultants to designthe slow-moving trafflc 2.1 km access road to serve the Mahotas sites andservices project and the adjoining agricultural area, with a 5.5 mcarriageway, using concrete blocks.

7. Beira Road Rehabilitation. As with Maputo, the road prioritieswere revised to rehabilitate 6.6 km of the EN6 for US$2.55 million (basecost). The possibility of includíng a slow-moving traffic lane forbicycles, carts and pedestrians along this road is being reviewed. The GOMwill determine if there is any overlap of this road with the proposedimprovements to the Beira-Harare highway, financed by the AfDB. Theaccompanying emergency repairs and resurfacing/maintenance suas of US$0.25million, and US$0.65 million, respectively, have been retained. The finalBills of Quantities specification and control documents will be completedby June 1988.

8. Drainage of the June 16th Circle. The proposed design solution ofsealing the box culvert to withstand a 5m hydrostatic head has been adoptedwhich includes open channel draans on the inside of the circle. Pedestriancirculation and water standpipes would be located accordingly. Thepreliminary estimated costs is US$710,000 plus US$170,000 for the road linkwhich would be provided in the last phase. Coordination and approval ofthe railway, AdM and CECM have been obtained and the detailed engineeringwill be completed by June 1988.

9. Costa do Sol Bridge. The reinforced concrete single lane bridgeon piling has been adopted, since there will be no adverse ecologicaleffects on the salt water marsh. The alternative embankment solution wouldrequire extensive sand dune protection works (not included in the initialcost estimates) to keep the outfall channel open, and high operation andmaintenance costa for the sluice gates. The estimated cost is US$660,000.The ERR is estimated at 28% assuming a traffic growth of 6% per annum toserve the thriving fishing village and tourism as well. DNEP has reviewedthis proposal with the Zonas Verdes and other relevant authorities dealingwith the land use for the salt ponds, etc., before proceeding with thefinal designs.

Priority Water and Sewerage Rehabilitation - Beira Sewerage

10. Background. The sanitation of Beira city is organized basicallyon three different levels depending on the availability of water and waterborne sewer systems.

- 33 -

ANNEX 2Page 5 of 9

i) Pit latrines are used in those areas which are serviced onlyby standposts or shallow wells.

ii) Septic tanks are used 3n areas where houses are connected tothe piped water supply systotm, but where there are longdistances to the existing sêwer system. Also the industrialarea and the port are served by septic tanks.

iii) Water borne sewerage ís used especially in the "cement city".The newtwork was constructed in the late 1960'8.

Because it was known at the early stages of project identifícationthat very limited amounts of funds were available, the main efforts wereconcentrated on identifying the problems of the existing sewer system, andto find areas which could (at low cost and with existing housa connection5to water supply system) be easily connected to the existing sewer system,because the development of the water distribution network will be based onplot or public tapa for some years to come due to the dífficult economicsituation.

11. Problems with the Existing System. The Beira water borne sewerserves about 85,000 people mainly líving in the cement city. The systemconsista basically of four different components: 1) secondary seweragecollectora; 2) small underground pumping stations; 3) elevation atations;4) main transmission línes.

1) The secondary system is badly clogged because of the lowamount of water flushed into the system, but there is no need.for rehabilitation.

2) The amall underground pumping atations have beenrehabilitated (new pumps and electrical installations) withthe assistance of the Netherlands during 1984 - 1987.Because of minimu supervision most of the puzping atatíons(70Z) are agaín out of order. Most of the damage is due tofaulty electrical installations.

3) The rehabilitation of the elevation stations is also going onwith the assistance of the Netherlands, although only apareparts are provided for three stations and only three out offour new pumps will be installed in a fourth atation.

4) The main sewerage transmission line is collapsed in oneplace, is severely corroded in two places, and the pressuremain of elevation station No. i'J is collapsed. In total,approximately 1,100 metera of the 9,000 metera should berehabilitated.

12. Extension of the Sewer System. Because of the high investmentcosts of the water borne sewer system only the areas with septic tanks andwith house connections to pipe water supply system were investigated underthis project. The major areas served with septic tanks are Manga. TheIndustrial Zone, Matacuana/Esturro, Munhava Central, Macurungo and

- 34 -

ANNEX 2Page 6 of 9

Matacuana North. Of these, Matacuana/Esturro ia situated near the existingsewer network and can be connected by gravity. Only this component isproposed to be included in the pzoject.

13. Management Issues. The management of Aguas de Beira, which i8also responsible for the sewerage system, is suffering from lack ofmanagerial and technical staff. The Government of Finland and theGovernment of the Netherlands are committed to support AdB by providingequipment and materials and large technical assistance programs. Finlandwill concentrate its assistance in the water supply system (at least 4persons) and the Netherlands in overall management and the sanitationsector (at least 4 persons).

14. Other Issues. Because of the lack of maintenance, the connectionsof individual houses to the sewer system are functioning unsatisfactorilycausing obvious he41th hazards. Because the connections (inspection wellsof septic tanks) are owned by the houses and in most cases by APIE, all theproblems cannot be solved by supporting the AdB. The project would providea lump sum to be used for the rehabilitation and for cleaning of septictanks and house connections. Also equipment for cleaning the sewer hasbeen included.

BEIRA SEWERAGE REHABILITATIONx 106 USD

Foreign Local Total1. C-'vil Works

i) Main sewer 1100 200 1300ii) Extension (Esturro) 100 100 200iii) Repair of house connections 100 100 200

1300 400 1700

2. Equipmenti) Trucks (2 pcs) 200 200ii) Tractor-trailer 28 28iii) Equipment (tools pick-up) 52 52

300 300

3. Technical Assist_.nceSupervision of construction 200 200

TOTAL 1 - 3 1800 400 2200

15. Cost Recovery. Tihe Government of Mozambique has allowed the watercompanies and other authorities responsible for the sewer and drainagesystems to charge a surcharge of 15% of water tariff to cover the cost ofthe systems. The cost calculations and financial analysis have beenreviewed and it is obvious that the approved tariff is far lesa than theactual costa. The issues related to tariff structure will be reviewedseparately.

Rehabilitation and Extension of Maputo Water Distribution Network

16. Background. The water supply services in Maputo are inadequatefor the present population, which has grown more rapidly than expected due

- 35 -

ANNEX 2Page 7 of 9

to the difficult economic and security problems of the country. In someareas population growth has been very much higher than indicated. Thedistributior. system is badly suffering from deferred inaintenance.Unaccounted for water is estimated to amount to 45-65% of the watersupplied. About 50% of the population served by the existing distributionsystem have house connections and 40% are served by standpipes; the resthave boreholes and shallow wells. The system is also affected by the lackof source water. However, through ongoing construction and furtherextension work of the Umbeluzi treatment works, the demand anid productionwill be in balance by the year 1990. Further source development is neededshortly after that. The planned project proposed for financing by IDAwould (i) solve the major leakage problems in the existing distributionnetwork, (íi) strengthen and to extend the distribution network to theareas where the need is most urgent; and (iii) study the long-term watersources for the city:

i) Rehabilitation of the existing network (leaKage control).DNA has not yet received all the necessary equipment to startthe detailed network analysis. The estimated rehabilitationneeds - particularly for the distribution mains - must stillbe considered as estimates.

ii) Rehabilitation of the distribution network.- 50 km large mains (Cli + 150 mm) cleaning/relining;- 30 km small mains (Cli - 150 mm) renewal/cleaning;- rehabilitation of valves;- 10,000 water meter connections.

iii) Extension of the distribution network would include:- 6,75 km of transmission líne Chamanculo-Mahotas;- Extension of Mahotas pumping station and reservoirs;- Extension of Chamanculo pumping station;- 105 km of new distribution mains in Mahotas;- 7 km of reinforcement of the distribution systemin Malhangalane Coop and Alto Mae.

17. Conclusions

i) Rehabílitation of the existing networks. The leakage atudyis proceeding well although the programme is a líttle latefrom what had been originally planned because of the latemobilization of the resident staff. The interim report isaccording to agreed TOR. During the mission, the consultantsubmitted the statement of AdeM profits and losses andprojection up to 1992. The installation of water metera (inopen places) is in many places causing a situation wheremeters are easily damaged, perhaps deliberately. Carefulrethlnking and designing is needed before replacing of watermeters is started on a large scale. The matter should besolved in collaboration with the appropriate constructionauthorities, APIE and ALM. The consultant will continue theunaccounted water study to be able to submit the draft finalreport by the end of September as well as necessary tenderdocuments for the rehabilitation works.

- 36 -

ANNEX 2Page 8 of 9

ii) Extension of the dístribution network. The general pianninghas beon finaliíed and only some minor modifications will bemade in this atage. The detailed design will b- startad only*fter the agreement has been aigned.

COST ESTIMATES

A. Rehabilitation of the existing networks

x 106 USDForeign Local Total

1. Civil Worksi) Cleaning/relining (int. contr. 289 434 723ii) Rehabilitation (local contr.+adn) 438 356 794iii) District meters 29 46 75

75c 836 1592

2. Equipment and Materiaisi) Water meters 142 90 232ii) Equipment (cara, tools, etc.) 210 11 221iii) DI-pipes 7 7iv) AC-pipes 328 328V) Valves 35 30vi) Fittings 30 30

752 101 853

3. Maintenance Programmei) Leak detection study,

t,aining, detailed engineering,supervision 200 200

TOTAL 1 - 3 1708 937 2645

B. Extension of Network:

1. Civil Worksi) Mahotas distrib. center,

Chamanculo & Transmissian main. 858 410 1268ii) Extension of the network 1005 813 1818

1863 1223 3086

2. Ecuipment and Materialsi) Pumps (includes installation) 441 10 451ii) Equipment (cars, tools, etc.) 38 2 40iii) DI-pipes 782 782iv) AC-pipea 655 655v) Valves 91 91vi) HOPE-fitting 36 _36

2043 12 2055

3. Design and Supervisioni) Supervision 300 300ii Detailed design of extension 350 350

TOTAL 1 - 3 4556 1235 5791u3=u uma=

- 37 -

ANNEX 2Page 9 of 9

The execution of the extension programme for Mahotas is highly dependent onthe amount and tim$ng of water avaílable at Chamanculo. The two projectseffecting that are the extension of the water treatment plant and at theUmbaluzi (financíng by France) and the transmission main from Chamanculo toMahotas (f$nancing by Italy); in general, the coordination among thevarious bilateral and raltilateral investment programmes as well as amongthe road and water components in the proposed project is very critical.

18. Coastal Erosion Control Maputo. The proposals for fencing andground cover of sensitive areas, with controlled pedestrian access havebeen adopted along with the relocation of vehicle parking areas to theopposite side of the road. Grazing, specifically of goats, would beprohibited. For protection of beach and dune erosion, the construction of10 groynes of 100 m lengths has been adopted similar to the three existingones (1 km south of the Club Maritimo) in the critical areas: (i) thedesígn of the groynes would utilize local rock of 50 kg and includeconcrete atructures as well as interlocking stabilized sand-cement bags;(ii) for the severe erosion above the Costa do Sol bridge, km 6.3 andabove, mortared masonry revetments would be placed upon a geotextile fabricat strategic locations. The revised: estimated for this component is aboutUS$0.86 million. Final contract documents will be prepared by June 1988.

19. Emergency Erosion Control Beira. A reduction in the longitudinalprotection of the dune alopes by interlocking stabilized sand-cement bagshas been adopted. About half of the existing groins would be extended tobelow low-tide at one end and above high-tide at the other. As part of thedynamic defense system, the interlocking stabilized sand-cement bags wouldprotect the groyne system and other devices. The main drainage channel andaluice gates have severe problems at the sea outfall; the protection ofthese is to be financed by West Germany.

AF6INMay, 1988

- 38 -

ANNEX 3Page 1 of 19

MOZAMBIQUE

URBAN REHABILITATION PROJECT

HOUSING COMPONENT

Introduction

1. Oblectives: A double objective has been assigned to the sheltercomponent:

(a) To address urgent shelter needs in the two main urban areasthrough three inter-related sub-components:

- completion of unfinished state-owned office andresidential buildings;

- rehabilitation of state-owned residential buildings;

- sites and services, including effective development ofexisting sub-divisions, new servdced plot developmentand upgrading of existing settlements.

2,775 new dwelling units and 2,529 upgrade ones (includingapartments and plots in both cases) would thus be madeavailable.

(b) To address policy issues in the fielda of housing and urbandevelopment. In the changing urban context in Mozambique,policy issues are coming up that will require answers inthe near future. By selectir.g shelter sub-components thatoffer opportunities to tackle some of these iesues, thoughon a amall scale, the project will provide the Governmentwith a testing ground where new approaches can be workedout for future application on a wider scale.

2. Urgent Shelter Needa: The building completion sub-componentconcerns buildings that were started before independence (1975), then cameunder Government control, but were never completed due to shortage of fundeand of buildín4g materials. They represent considerable investments, nowimmobilized, but that can be made productive at only a fraction of theirreplacement cost. Since there is an increasing demand for office space andhousing from expatriates in both cities, it is proposed that all of theoffices and most of the apartments in the buildings be made available forrental in foreign currency. This would produce surplus revenues to berecycled into other shelter sub-components benefitting mainly Nozambicanhouseholds. About 26,230 sq.m. of office space and 153 apartments wouldthus become available.

- 39 -

ANNEX 3Page 2 of 19

3. The building rehabilitation sub-component applies to residentialbuildings (some of whích were abandoned by the Portuguese at independence)that were nationalized in 1976 and rented to Mozambican households atsubsidized rates. They are managed by APIE, but lack of maintenance hascaused extensive deterioration. In order to preserve the investment thebuíldings represent, their rehabilitation (at only a fraction of theirreplacement cost) is proposed, as well as their future management on thebasis of full recovery of investment and maintenance costs. This fits inwith the Government's recent decision to raise rental rates and to fixthese in function of dwelling characteristics and not, as previously, ofthe tenant's income. Sitting tenants unable to afford the new rents wouldbe relocated to state-owned apartments of lower standards or to servicedplots with core houses. Part ot the vacated apartments would be rented outto foreigners to produce foreign currency revenues. About one thousandapartments would thus be rehabilitated in Maputo and Beira.

4. The sites and Services sub-component addresses housing supplythrough plot development, in two different ways:

(a) New sites and services areas laid out in urban extensionzones as well as in infill sites within the buílt-up areas.The latter type of plots is to be provided with core housesand is specifically intended for households relocated fromrehabilitated apartment buildings; and

(b) Effective develpment of existing sub-divisions that haveremained largely unoccupied because of insufficientinfrastructure and services, shortage of building materialsand credit, and tenure problems.

5. Building materials and credit facilities would be available tobeneficiaries under another component of the project. Rental revenues fromthe building completion and rehabilitation sub-component would be used forcross-subsidy. Approximately 1,540 existing plota w'ould thus be serviced,and 2,530 new serviced plots provided.

6. As a whole, the shelter component would achieve full costrecovery, as vell as a better balance in allocation of housing as afunetion of income and affordability. Completed or rehabilitatedapartments of high standards would be allocated to the higher incomegroups, including expatriates; rehabilitated apartments of lower standardswould be allocated to middle income groups including some of the sittingtenants; and sites and servíce plots would be allocated to sitting tenantsunable to afford the new rents, as well as to lower income households fromthe general public. Surplus rental revenues in foreign and local currencyfrom offices and high-standard apartments would be recycled within thecomponent to cross-subsidize the plots with core houses for relocatedhouseholds.

7. Policy Issues: Some of the general policy issues that would beaddressed through the preparation and implementation of the differentshelter sub-components are outlined below:

- 40 -

ANNEX 3Page 3 of 19

Management of the State-owned housing stock on a cost-recovery basis, with re-allocation of dwelling units infunction of affordability, and the generation of surplusrevenues for cross-subsidization. Ultimately, this couldlead the way to partial divestiture of the State-ownedhousing stock to the private sector, which may be envisagedat some future time.

Relocation of Households on a large scale is expected as aresult of the recent rent increases. The project wouldaddress the issue by providing affordable alternatives tohouseholds wishing to relocate.

Plot development on a cost-recovery basis, as analternative to subsidized housing provided by the State.The low level of new residential construction during thelast decade, together with a high rate of urban populationgrowth, are creating a large urbani housing shortage.Increased supply of sites and services together withassistance to self-help housing and the provision of creditfacilities may be necessary to keep pace wiíth demand.

In this respect, the development of realistic andaffordable standards in terms of infrastructure, plot sizesand housing is critical.

Urban land administration raises a number of importantissues. All land is nationalized and allocated free ofcharge (except administrative fees) and, in the absence ofa legal private land market, there are inefficiencies inthe allocation of urban land, which lead to land banking byinstitutions as well as individuals, and to discontinuousand inefficient urban development.

There is an urgent need to generate municipal revenues tofinance urban infrastructure and servíces. Land isallocated practically free of charge and there are no landor property taxes and no municipal taxes. The introductionof municipal taxes is envisaged as a result of the on-goinglocal government finance and administration study.

- 41 -

ANNEX 3Page 4 of 19

BUILDING COMPLETION SUB-COMPONENT

A. Oblectives

1. The completion of unfinished residential and office buildingaowned by the State, in order to (a) preserve and make full use of earlierinvestments; (b) alleviate the present shortage of housing and officespace; and (c) to generate income in foreign currency through rental ofapartments and offices to foreign organizations and individuals.

B. Descríption

2. The buildings carmarked for completion were started beforeindependence in 1975 and if not already owned by the State, they were takenover at that time. Designs were revised to reduce standards and costs.After a few years the works were continued but had to be interrupted againbecause of the shortage of funds and building materials. The followingbuildings are included in this component:

Maputo:

(a) The "33 Andares" Buildnjzg

Of the 37 floor levels of this building, the 26 upperfloors are already completd and occupied and only theeleven lowest (including sub-grade) levels would beincluded in the project. These comprise 11,390 sq.m. cffloor area, including 2,600 sq.m. of shops and 8,790 sq.m.of offices. The building is located along the main avenuein downtown Maputo. The total cost of completion isestimated at US$1.77 million for civil construction works,electrical installation and elevators and related design,or US$155 per sq.m. Most of the office space would be madeavailable for rental in foreign currency.

(b) Tower 'A" of the "Torres Vermelhas" Complex

This complex is situated in a prime residential location inthe south east of the city. Construction started in 1971and vas interrupted twice for five year periods. Around1975, the original plans were revised and the apartmentssubdivided to produce more units. The complex comprisestwo towers one of which is ready to be occupied. Only theremaining Tower "A" would be included in the project. Ithas 25 storeys with a total floor area of about 18,600sq.m. and 153 apartments, most of which range from 70 to115 sq.m., with one to three bedrooms. The estimated cost

- 42 -

ANNEX 3Page 5 of 19

of completion is US$2.16 million or US$133 per 3q.m.Since these apartments will not be available for occupationby foreigners, inclusion of Tower "A" in the project isdependant on agreement by CECM/APIE to release 50 houses,which will be vacated by people moving into Tower "A", forrental. ín foreign currency, and to recycle the rentalproceeds within the project.

(c) The BCCI - Central Bank Building

This building, also situated in downtown Maputo, comprises12,250 Sq.m. of office space distributed over 21 floors.The cost of completion is estimated at US$2.16 million forcivil construction works, electrical installation,elevators, water supply and sewerage, air conditioning,telephones and related design, or US$177 per sq.m. Infuture, the building would be entirely occupied by theBanco de Mocambique, which would transfer part of itsservices and 650 of its 1,100 employees to the newbuilding, thus releasing part of the office space presentlyspread over several buildinga in downtown Maputo, part ofwhich wculd be rented out. The gross floor area per BMemployee would increase from a low 10 sq.m. at present to20 sq.m. because of the move. Although no direct benefitsin the form of rental revenues in foreign or local currencywould be produced, certain indirect benefits can beexpected that would justify completion of the buildingunder the project. The additional floor space would enableBM to effectively implement the scheduled separation of itscentral banking and commercial functions and to increaseefficiency in both. In particular, improved service to its13,000 clients would produce estimated yearly savings of upto US$0.9 million in reduced waiting time, and managementof the increasing amounts of foreign aid would besignificantly improved.

Beira:

The ATCM Building

Construction of this building located in the central partof the town proceeded in two periods 1972-1975 and 1978-1984. In 1978, the original plans were revised, the heightof the building was reduced from 21 to 15 floors, and thenumber of apartments was increased by subdividing theoriginal ones. The total floor area is 12,450 Sq.m.,including 96 apartments totalling 10,040 Sq.m., 1,000 Sq.m.of shops and 1,410 Sq.m. of offices. The cost ofcompletion is estimated at US$1.24 million for civil works,electrical installations, elevators, pumps, telephones,site development and related design costs or US$99 perSq.m. Part of the apartment and office space would bemade available for rental in foreign currency.

- 43 -

ANNEX 3Page 6 of 19

C. Financing and Cost Recovery

3. The completion of the four buíldings is economically justifiedbecause the cost of completion is only a fraction of the cost of newconstruction. For commercial buildings, completion costs per sq.m. rangefrom US$100 to 200, while the cost of new construction is estimated atUS$400 tc 600. Completion costs per sq.m. for residential buildings varyfrom US$100 to 130, as compared to US$400 to 450 for new construction.

4. About 80% of the total cost of the component would be financedfrom the IDA credit and the remainder from other sources, including rentaldownpayments in foreign currency by prospectiíe tenants.

5. For the "33 Andares" building in Maputo and the ATCM building inBeira, full cost recovery would be achieved through rental in foreign andlocal currency at rates fixed in accordance with the council of Ministera'Decree No. 24187 dated October 27, 1987 (regarding the determination ofrental rates in local and foreign currency for properties owned by theState). The rates currently are as follows:

Rental Rates Per Sq.m. Per Month

0ffices and Shops Apartments

Foreign Currency Rents (US$) 5.4 3.6Local Currency Rents (MT) - 90 Approx.

6. In the case of Tower "A" of the Torres Vermelhas complex, which isnot available for rental in foreign currency, cost recovery will beeffected indirectly through rental proceeds in foreign currency from 50houses to be made avaílable for payment in foreign currency. Anundertaking by CECM/APIE to this effect is a condition of negotiation.

Rental revenues would be recycled in the following mannert

(a) part of the revenues in foreign and local currency wouldenter into a revolving fund for the completion of otherbuildings;

(b) part of the revenues in foreign and local currency wouldenter into a fund for maintenance of the completedbuildings; and

(c) part of the revenues would be used to cross-subsidize othersub-components of the shelter component, specifically theprovision of core houses to relocated households.

- 44 -

ANNEX 3Page 7 of 19

D. Summary of BuildinR Comiletion Component

~Ar _ _ _ _ _____;n_____ Complto;n 1v R.nt.I R-v..-n- i UStNuob- Ertanta Ofice-.Shor,- TpT gaIj 53 za r uinv riinCrs

38 Andares - O 11,6 11.388 1,767.290 o 737,94S

Tr_-r A 158 16.18 o 16,185 2.159.030 43.704 600,000 jjIlCCIntre l bnk - o 12 248 12 248 2 164 219 n/v n/a

total- 18.188 23,6 39,S21 6,090.539

ATOl 9A 10.039 2412 12.451 1,2óJ!00 17.706 294 984

Orand Total: 249 28,224 26.048 52.272 7.327,339 61.410 1.632.927

Suparvyiaor (4%) - - - - 293.093 - -

lb. Cost: - - - - 7.620,432 -

1/ R*ntal revenu. froo 80 hou ea to bh r.l.aesd for rental to foraignora.. oti.t1d on the basi. oftJ5I.000 por .onlh por houes.

- 45 - ANNEX 3Page 8 of 19

HOUSING REHABILITATION SUB-COMPONENT

A. Oblectives

(a) Urgently needed preservatlon of the existing State-ownedhousing stock that has been deteriorating as a result ofdeferred maintenance;

(b) To assist the Government in gradually phasing out housingsubsidies, by rental (and possible future sale) ofapartments at economically justified rates; and

(c) To generate income through rental of apartments in foreigncurrency, for cross-subsidy within the housing component.

B. Descríption

The buildings to be rehabiitated were constructed during the last25 years of colonial rule and came under State control in February 1976,when nati`onalization of all rental properties, mostly abandoned by thedeparted Portuguese, was proclaimed. APIE was entrusted with the managementof the properties, and rental rates were fixed as a (low) percentage oftenants' incomes. Lack of maintenance as a result of APIE's limitedresources and occupation by lower-income households with little or noprevious experience in apartment living, have caused extensivedeterioration. Because the buíldings' systems (water supply, sewerage,elevators, electricity, garbage evacuation) are in most cases out of order,they constitute a health hazard to the occupants.

In addition to gradual increases of utiíity rates, the Governmenthas recently decided to determine rental rates in function of the buildings'characteristics and floor area and not, as previously, on the basis oftenants' incomes (Council of Ministers' Decree No. 24/87 dated October 27,1987).

These steps mark a policy shift towards the reduction of housingsubsidies and towards management of the Government-owned housing stock on acost recovery basis. In this context, 2,100 apartments in 142 Governmant-ow.ed buildings in Maputo and Beira were selected for rehabilitation. Alittle less than half of thes would be rehabilitated under tL2 presentproject.

In order to provide temporary accomodation to households vacatingtheir apartments during the rehabilitation works, about 380 serviced plotswith core houses (300 in Maputo and 80 in Beira) would be made availableunder the sites and services sub-component. After completion of therehabilitation works, these core units would serve to permanently relocate

- 46 -

ANNEX 3Page 9 of 19

households who cannot afford the new rentals and who prefer to move to theseuníts. Part of the rehabilitated apartments would be rented to foreigneraand rental revenues in foreign currency from this and the previous (buildingcompletion) sub-components would be used to subsidize these core units.

Maputo

A total of 774 apartments ranging in size from about 50 to 120Sq.m. and located in seven different high-rise buildings or walk-upapartment complexes, were selected for rehabilitation. The works wouldinclude repair or renewal of sewerage, water supply, electricity systems andof elevators as appropriate, replacement of fixtures, doors, windows wherenecessary, as well as refinishing of the buildings. The total estimatedcost is US$3.88 million or an average of US$60 per Sq.m.

Beira

A total of 216 apartments ranging in size from 65 to 120 Sq.m. anddistributed over eleven high-rise buildings or walk-up apartment complexeswould be rehabilitated in a similar manner. The total cost is estimated atUS$1.53 million or an average of US$68 per Sq.m.

C. Financing and Cost Recovery

About 80% of the cost would be financed from the IDA crediít and theremainder from other sources such as enhanced rental downpayments by foreigntenants.

Because rehabilitation costs are low in comparison to the cost ofnew residential construction (US$60 to 68 against US$400 to 450 per Sq.m.),full cost recovery will be achieved through rental. Housing renta fixed inaccordance wiíth Decree No. 24187 are currently US$3.60 per Sq.m. for rentalin foreign currency and about MT 90 per Sq.m. for rental in local currency.In Maputo about 39% of the rehabilitated apartments (i.e. 300) and in Beiraa. ut 21% (i.e. 45) will be rented in foreign currency.

Rental revenues would be re-cycled in the following ways:

(a) part of the revenues in foreign and local currency will beused to give a subsidized core house on a serviced plot tothe 345 permanently relocated households;

(b) part of the rental revenues in foreign and local currencywill enter into a revolving fund for the zehabilitation ofother buildings; and

(c) part of the revenues in local currency will enter into afund for maintenance of the rehabilitated buildings.

- 47 -

ANNEX 3Pago 10 of 19

D. Summary of BuildinR Rehabilitation Sub-Component

Numb-r of Nunb-r of 4sJkr of R.habiltateon _ riv Runtal Raenu ;n JSSBuildinfa o,r Croup of silIdinnla Iuijd;na Flor ant in U rr fi e ur n

~tuO

A. 25 de Setembro 1123 -Cardoa' 1 14 82AV. Marl Marc* 501 1 1 7 55 881.894 18,042 184,560Av. Karl Marx 939 1 13 70

Av: Kar' Mar* 1462 #Zlab.zo" 1 9 52 316.466 7,32S 74,906Bai rro Maiang, 47 3 141 523,031 19.807 199.s48Bairro Acto MNa 3 14-56 79 780.163 15,549 159,054Ebairro M'ilhangalena LIZ1LJ7Z32 4.4s46

Totel Maputo: 130 - 774 3.878.426 104,946 1,073,533

Supervieion (6S) 232,705

Ba* Coat - Maputo 4.111,131

Rua Cap. P. Raaoz 'Nicola' 1 12 49 )'Tudor' 1 9 14 ) 417,206

Rua N. Albuquerque 'Cooperativa' 1 12 aO 776.214

Corroia de Brito 80 1 4 12 )Rua Padre Aaauncao 54 1 2 8aRua Coa. Caivao 578 1 3 10 ) 47,727 202.990-- o R. Baptiat.a 489 1 2 6)Rua P. Nuna. 183 1 4 24 ) 232,361Rua N. Caolho 54 1 6Rua e. Cpeio 5842 2 3Rua R.aid.ncia 841 1 _ 4 )

| ToaI Baizi 11 - 216 1,823,781 47.727 202.990

Superviaion (68) 91 546Bage Coat Buira 1.617.327

Crand Total: 141 - 990 5,728,458 152.673 1,27r"523

- 48 - ANNEX 3Page 11 of 19

SITES AND SERVICES SUB-COMPONENT

A. Oblectives

(a) To provide alternative accomodation in the form of servicedplots and core .louses to households relocated fromrehabilitated apartments (see previous sub-components);

(b) To provide serviced plots to households in the lower-middleincome groups; and

(c) To provide a framework in which new approaches to housingand urban development can be developed f:om practicalexperience.

B. General Description

Types of Plot Development

The essential aím of this sut-component is to increase housingsupply through development of servicec plots, in several ways:

(a) New sites and services in peri-urban semi-agricultural areasthat have been occupied spontaneously at low densities(Mahotas in Maputo; Inhamizua in Beira);

(b) New sites and services on small infill sites within thebuilt-up areas of the towns. (Polana Canico and BairroFerroviario in Maputo). These sites have remainedundeveloped for reasons related to inefficiencies in theurban land allocation process and it is desirable that theybe developed before further extensions of the town areconsidered. These sites are intended for more urban-oriented households, specifically those relocated fromrehabilitated apartments; and

(c) Upgrading of existing sub-divisions that have remainedlargely unoccupied because of the absence of essentialinfrastructures, the shortage of building materials andinefficiencies in the plot allocation system. By addressingeach of these problems, the project would encourageeffective occupation of these areas (Laulane D in Maputo;Muchatazinha in Beira).

- 49 -

ANNEX 3Page 12 of 19

Standards and Levels of Service

Because in the present context incomes are low and constructioncosts high, the standards of infrastructure and housing proposed under theproject are low with some variations:

(a) All sites will be provided with basic infrastructuresincluding a paved main aecess road for public transportationand storm water drainage, where necessary, graded localaccess roads, a water distribution network generally withstandpipes, individual pit latrines, a power distributionnetwork with basic sheetlighting and mostly optionalindividual connections;

(b) A limited number of plots, mainly on infill sites, would beequiped to higher standards including individual water andelectricity connections and a 32m2 3-room core house inbasic finish. These plots are intended for householdsrelocated from rehabilitated apartments.

(c) Building materials kits corresponding to a basic 2-roomhouse and related credit facilities will be made availableunder a separate project component to some of the otherbeneficiaries; and

(d) Plot sizes will range from 150 Sq.m. on infill sites in thebuílt-up areas to 450 Sq.m. in the peri-urban sites.

Relocation. Resettlement and Present Site Occupants

Relocation. For the first implementation stage of the buildingrehabilitation program to start, it is critical that about 380 of theapartments earmarked for rehabilitation in both towns be vacated at an earlystage. In order to provide temporary accomodation for households vacatingtheir apartments, a corresponding number of plots with core houses will beprovided early on, including 300 in Maputo (on the Polana Canico and BairroFerroviario infill sites) and 80 'n Beira (on the Macurungo infill site).Ultimately, 345 of these plots (300 in Maputo and 45 in Beira) will be usedto permanently relocate households who cannot afford the apartment rentalsProvision of core houses to these households will be subsidized with rentalrevenues from the building completion and rehabilitation comoonents.

Resettlement. Rehabilitation of the June 16th Circle in Maputo,under another project component, requires resettlement of about 25 squatterhouseholds. These will be resettled in one of the sites and services areasin accordance with CECM rules (Municipal Decree dated May 17, 1982).

- 50 -

ANNEX 3Page 13 of 19

Present Site Occupants. All Sites selected for sites and servicesdevelopment, except the Polana Canico infill site, are at present occupiedby small numbers of semi-rural settlers (about 95 households in Maputo and300 ín Beira). These households will be accomodated on the sites anid wherepossible, layout plans will be adapted to maintain their present locationsand preserve their houses. They will further be treated as projectbeneficiaries.

FINNIDA's Workers' Housing Project (Beira)

FINNIDA is planning to finance a housing project which would mainlybenefit CFM workers. It includes the provision of serviced plots, corehouses and community facilities on two sites. Other components of theFINNIDA project are: estabiíshment of hardware, brickmaking and carpentrycooperatives, self-helf housing assistance, building materials credits andinstitutional support to CFM's housing cooperative as well as to CECB/DPCA.

This project would be implemented through BCA and DPCA, while theIDA financed project would be implemented through DPCA/CECB. Coordinationbetween the two projects is being achieved in the following ways:

- Simultaneous appraisal in April, 1988;- Topographic survey of one of the FINNIDA sites to be

financed under the IDA credit;3 Future coordiration in terms of site development housing

standards as well as institutional aspects.

C. Description of the Project Sites

Maputo

(a) Mahotas (10 km North of the city center).

The bairro Mahotas is a spontaneously settled peri-urbanagricultural zone. Most of the 81 existing dwellings are ofnon-permanent nature and the present density is low (2-3dwellings/ha). The area is partially serviced with waterfrom privately-owned boreholes and electricity and there isa small bairro center with an administrative office and afew shops. In the Structure Plan of Maputo, the area isearmarked for low-density peri-urban residential development(10-15 dwellingslha). The total project area is 51.4 ha.The following is proposed under the project:

Roads: A 2 km paved road from Avenue Julius Nyerere throughthe Laulane D site will give access to the site. All otherroads to be of consolidated earth constructio-..

Water: Until 1993 when connection to the city mains isexpected, water will be supplied from on-site ground waterresource. The distribution network will be designed in sucha manner that it cah later be connected to the city mains.Out of the 628 plots, 200 will be equipped with individual.rrnn Fr

- 51 -

ANNEX 3Page 14 of 19

Sanitation: All plots to be provided with pit latrines.

Electricity: A power distribution network with basic streetllghting, and 200 of the 628 plots equipped with individualconnections.

Plots: 828 plots ranging in size from 312.5 to 450 Sq.m.;200 of these with individual water and electricityconnections.

Materials Kits/Credits and Self-Help Housinz Assistance:For about 500 of the 828 plot beneficiaries.

Beneficiaries: (i) Present site occupants; (ii) householdsre-settled from 16th of June Circle; (iii) others asselected by CECM

(b) Laulane "D" (9 km from the city center).

Situated immediately South of Mahotas, this 130 ha site wassubdivided in 1984 by CECM into about 2,330 plots with atarget density of 90 persons/ha. However, most of the plotsremain undeveloped because of the non-availability ofinfrastructures, the general shortage of building materialsand land administration problems. The following is proposedunder the project, which would cover 66 ha in the northernpart of the site.

Roads: Main access from Avenue Julius Nyerere over a 4 mwide double asphalt surface road and all other roads ofconsolidated earth construction.

Water: As in Mahotas, but no individual connections.

Sanitation: Individual pit latrines to be provided if notalready available.

Electricity: As in Mahotas, but only optional individualconnections.

Plots: 1,144 existing plots of 344 Sq.m. each.

Materials Kits/Credits and Sel-Help Housing Assistance: Forabout 520 of the 1,144 beneficiaries.

Beneficiaries: The present plotholders; the plots ofabsentee plotholders not effectively developing andoccupying their plots withln a given period would be re-allocated by CECM.

(c) Bairro Ferroviario: (Infill site at 6.5 km from the citycenter)

- 52 -

ANNEX 3Page 15 of 19

Two small tracts of land totalling 4.2 ha were identífiedhere. They are situated immediately next to an existingsuburban nucleus which includes railway staff housing builtbefore independance as well as row houses and walk-upapartments built around 1980. This zone :s relatively wellprovided with infrastructures, social equipment and publictransportation. The existing density is of the order of 120personslha or 24 dwlha. The following is proposed under theproject:

Roads: Internal access roads of consolidated earthconstruction, to be connected to existing road networks.

Water: Distribution network connected to nearby city mainawith individual connections to all plots.

Sanitation: All plots to be provided with individual pitlatrines.

Electricity: Distribution network connected to nearbytransmission lines, with basic sheetlighting and individualconnections to all plots.

Plots: 153 plots ranging from 200 to 250 Sq.m.

Core Houses: All plots to be equipped with a core house.

Beneficiaries: Households temporarily or permanentlyrelocated from rehabilitated apartments.

(d> Bairro Polana Canico B (Infil3 site at 3 km from the citycenter).

This site consists of about 60 ha of land situated betweenthe university complet and a low-income settlement (BairroPolana Canico B) that was partly upgraded in 1977-79. About17.3 ha are occupied by squatters and the remainder isvacant. No infrastructures exist on the site but they areavailable nearby. Existing densities in the squattersettlement and in Polana Canico B are at least 250persons/ha (or 50 dwlha) and the average plot size is 150Sq.m. or lesa. The following is proposed under the project:

A plan will be drawn-up for the whole 60 ha site in order toensure its adequate integration into the urban context.This plan sh,uld form a guideline for future developments onthe site, -hich could possibly iLclude upgrading of the 17.3ha squatter site, new sites and services and/or otherhousing development, new social equipment and newinfrastructures.

A vacant area of 3.6 ha situated between the universitycomplex and the squatter area will developed immediately asan infill-site, with tne following characteristics:

- 53 -

ANNEX 3Page 16 of 19

Roads, Water, Sanitation, Electricity, Core Houses,Beneficiaries: As in Bairro feriiovario.

Plots: 160 plots of 150 Sq.m. each.

Beira:

(a) Inhamizua II (At 12 km North of the town center).

Situated on the northern side of the main road, this 79 haperi-urban site is presently occupied by a semi-ruralpopulation of about 300 households. Most of the existingconstructions are of a non-permanent nature and noinfrastructures are available. Parts of the site aresubject to occasional fiooding. The following is proposedunder the project:

Storm Water Drainage and Roads: Site grading will belimited to the local access roads cut hollow in order todouble-function as drains, and gravelled. An unlined maindrainage canal will be dug through part of the site. Nomain access road is required since the site is bordered ontwo sides by existing roads.

Water: Water distribution network with public standpipesonly, connected to the city maíns.

Sanitation: Owner-built individual pit latrines.

Electricity: Distr'bution network with basic streetli'"...ingand optional individual connections, connected to nearbytransmission línes.

Plots: About 1,700 plots.

Materials Kits and Credits and Assistance to Self-HelpHousing: For all plot beneficiaries.

Beneficiaries: Present sites occupants and other householdsas selected by CECB.

(b) 80 Plots with Core Houses for Relocated Households

Eight plots at Macurungo would initially serve to providetemporary accomodation to 80 households vacating theirapaLxments during implementation of the buildingrehabilitation component of the project. Eventually, 45 ofthese core houses would serve to permanently relocate 45householda unable to afford the new rents and who have aprefe-rence to move to these core houses.

(c) The CFM workers' housing project to be financed in parallelby FINNIDA includes:

- 54 -ANNEX 3

Page 17 of 19

Muchatazinha (3 km from the town center).

In this existing 15 ha sub-division of about 335 plots, only60 of which have been occupied due to lack ofinfrastructures and of building materials, theinfrastructures would be completed and about 250 core housesbuilt.

Inhamizua I (About 10 km North of the town Center).

This 175 ha site across the road from the Inhamizua II sitewould be sub-divided into about 1,150 agro-based plots andequipped with basic infrastructures. About 750 plots wouldbe allocated to CFM workers and the remainder to members ofthe public.

(d) Financing and Cost Recovery

80% of the project costs would be financed from the IDAcredit and the remainder from Government contributions andother sources. The topographical survey of the Inhamizua IIsite and infrastructures and core houses for 80 plota on theMuchatazinha site in Beira, to be allocated to householdsrelocated from rehabilitatad apartments, would also befinanced by IDA.

The main access road to the Laulane D/Mahotas areas would befinanced under the Road Rehabilitation component.

Recovery of Site Development and Infrastructure Costs

The cost of land demarcation and roads (excluding the mainaccess road to Laulane/Mahotas), drainage and sanitation(latrines) as well as part of the project management costwould be directly recovered from the beneficiaries.

At least part of the investment cost of water supply wouldbe recovered through the usual connection fees and rates inthe case of individual connections and, in the case ofcollective access to standpipes, through systems which arebeing studied by DNA.

The present electricity tariff includes capital andrecurrent costs and therefore no separate charge would bemade to the beneficiaries.

Recovery of the site development and infrastructure costwould be effected in the following way:

(i) 20% of the cost to be recovered per plot would bepaid as an "allocation fee' (or downpayment) whenthe provisional land title is given to thebeneficiary;

- 55 -

ANNEX 3Page 18 of 19

(Ui) the remaining 80% would be recovered through annualfees over a period of 20 years. In time, thisannual fee may be transformed into an "urbanizationtax', the amount of which would be proportional tothe level of infrastructure offered and which wouldbe introduced city-wide.

Both fees would be collected by CECM and CECB anddeposited in a revolving fund, supervised by MCA,for the financing of similar projects.

Recovery of the Cost of Core Houses

In order to pay for their core house, the 345 householdsrelocated from rehabilitated apartments would benefit from acredit scheme which would be subsidized with rental proceedsfrom the building completion and rehpbilitation components,in order to match their affordability level. The amountscolected would be deposited ia a special fund.

Recovery of the Cost of Materials Kits

Recovery of these costs and operation of the correspondingcredit system would be through mutual loan associations tobe created. Beneficiary-members would make a downpayment of20% and repay the remaining 80% at 9% interest rate over 25years (see also Annex 5).

- 56 -

ANNEX 3Page 19 of 19

E. Summary of Sites and Services Component

i_______________ D-r Iru M Kit/Credit& TotalTown A Site &uLIm rhl Po 05DOt(B áN"erKt OtSI

Makota. 51.4 828 <1) 500MauIag= D -66.0 1,14 <2)1 520Farro serio 4.2 153 <3) 153Polana Canico 3,õ 160 2

Sub-Total: 125.2 2,285 1.10 313 1.88 1,020 1.18 4.16

BEIR

Inhaizua JI 79.0 1,700 1,700Cor- Hou-e- (6) 80 Q

Sub-Total: Ld17 (4) 027 õO 0 70 1.84

TOTAL: 206.7 4,065 1.37 393 2.60 2.720 2.03 6.00

Inhaminzua 1 175 1,150 n/, ',150 n/. n/& n/.Mnhetazi nl a 15,- j (5) n/a 250 n/: n/. n/.

TOTAL. 190 1,485 n/. 1,400 n/. n/a n/.

NOTES Ali costa incude the coat of aupervieion, but not *al.. tax.

1) Includint about 81 preaent occupantU to be accomodat.d *n-Cita.(2) Plota in *n *xisting eub-dcivjion, oniy part of whêch ia *ffectively occup;ai.<8) Includ;ng *bout 14 proa*nt occupanta to bh accomodat.d on--ite.<4) Including abeut 300 prea*nt occupanta to b. accaodt.d on-oite.<5) Includhng abaut 60 plote *lr.ady occupi;d.(6) No *et* eelct.d ao y*t, *eti,ate of ar-a ne.d-d.

- 57 -ANNEX 4

Page 1 of 7

MOZAMBIQUE

URBAN REHABILITATION PROJECT

A. IMPROVEMENT OF SOLID WASTE AND OTHER URBAN SERVICES IN MAPUTO

SUMMARY AND CONCLUSIONS

The Present Situation in Maputo

1. Garbage is accumulating on the streets, building yards, and vacantlots of the city of Maputo for a variety of reasons:

- The fleet of garbage trucks is under utilized.- The maintenance workshop can not repair the vehicles due to

lack of equipment, spare parts, and enough personnel withgood mechanical skills.

- Rented trucks are too expensive for the available budget ofthe D.S.U. and totally inadequate for urban garbagecollection.

- Street cleaning is badly organized and is too inefficientdue to the lack of human and material resources.

- Companies in charge of drainage laying act independentlywithout obeying Municipal regulations.

2. The solid waste disposal system contaminates the environment andsurface water and groundwater. Hospital wastes and dead animals are dumpedwithout treatment.

3. The prospects of finding a solution within the municipality's owrresources are at present remote. The current cost of garbage collection is2.914 MtITm. but it could be done satisfactorily for 2.000 MtITm.

4. There are about 2.000 Tonnes of garbage accumulated in the city,increasing at a rate of about 30 Tonnes daily.

- 58 -

ANNEX 4Page 2 of 7

Summary Cost of Equipment and TA Needed

5. The estimated cost of equipment and TA needed is as follows:

TOTAL COST US DOLLARS (xlOOO)

- 6 Compactor trucks 15 m3 @ $80,000 480- 5 Roll-on roll-of trucks with hooked

10 m3 container @ $65,000 325- 2 1 m3 mechanical shovels @ $85,000 170- 2 Tank trucks for emptying septic tanks

($75,000 + $80,000) 155- 60 10 m3 containers @ $2,500 150

- 800 1 m3 containers @ $350 280- Spare parts 195

- Tools, clothing, and cleaning material 165- Repair shop equipment 270

- Tow trruck, mobile shop 80

- Civil works, containers, and shop 80- Platform and fenced disposal area 50- Compost manufacture (see annex) plant 580- Material manufacturing containers fib-e 80- Technical assistance 370

- Plus contingencies 370

TOTAL 3,800COSTS BY PHASE1 Phase 500II Phase 1700III Phase 1600

TOTAL 3,800

Ptoposal for Organization and Management of Urban Servíces

6. After analyzing the existing constraints, a solution along thefollowing broad lines is proposed:

* Evaluate the potential for involvement of the people.* Develop an independent system with the structure of a

cooperative for garbage collection.* Develop ways of recycling scrap, paper, and glass and open a

compost plant.* Increase control over the cleaning brigades.* Provide productivJtv incentives.* Train personnel for municipal services at the local level.

- 59 -

ANNEX 4Page 3 of 7

7. All these measures are consistent with a policy of minímizing theatructure of the D.S.U. and strengthening independent initiatives withinthe municipal control systems. It is hoped to gen,rate approximately 200new permanent jobs not attached directly to the structure of the D.S.U.The compost plant would absorb 95 people and urban and selective collectionwould comprise about 105 people.

8. The organization and implementation of the proposed scheme duringthe following two years would be managed by three technical advisors, oneof them an expert on organizing cleaning and collection systems (2 years),another, an expert in maintenance of vehicles and equipment (2 years) andthe thírd, an expert in compost plants (1 year). These technicians wouldbe supported by the Municipal Government of Barcelona, in the event that aspecial relation be established between the two cities. Also techniciansfrom Maputo will be trained in Barcelona, through a course in garbagecollection and disposal, with 9 months duration.

9. The garbage would be collected in the central area by 5 compactingtrucks of 15 m3. and 1 truck in reserve. It would be deposited in 45containers of 10 m3., (expandable to 55 containers) grouped in transfercentres located in each neighborhood close to the markets. Hospital wasteand dead animals would go through a system of special disposal and would becollected in 5 containers of 10 m3. The compost plant would produce 11,000Tm./year of fertilizer, the sale proceeds of which would contribute towardsfinancing garbage collection services.

10. A detailed consultants' report reviews the financial aspects ofthe proposed cooperative system. Included among the recommendations areproposals that Business companies would pay 2.000 Mt per Tm. of collectedgar.age and 4.000 Mt. per container of 10 m3 transported.

Prolect Implementation Phases

11. The project will be executed in 3 phases of 2 years and 2 months.

(a) I Phase 1: Urzent Plan for Urban Cleaning

During 1 112 months there would be a disposal ofapproximately 6.000 Tm. of urban waste accumulated in themiddle of the city. Equipment and other needs are asfollows:- 2 front-end loaders- 3 self-loading trucks with hook- 30 containers of 10 m3.- 50 employees to clean the 15 areas of the city.Plus Technical Assistance to support the management of theoperation for 2 months.Total cost, US$500.000.

(b) II Phase 2: Minimal Pick-up and Disposal Plan

Provision of 700 containers of 1 m3. in the middle of thecity and 50 contaíners of 10 m3. in the periphery andhospitals.

- 60 -ANNEX 4

Pago 4 of 7

The containera of 1 m3. will be emptied 5 compactor trucks,keeping one truck ín reserve. The containera of 10 m3. villbe transported by 5 self-loadíng trucks with hook, ke.pingone in reserve.

Total requirements would bê as follows:- 800 containera of 1 m3. (700 + 100 reserve)- 50 containers of 10 m3.- 6 compactor trucks.- 6 aelf-loading trucks (5 new + 1 rebuilt) will transport

the 231 Tm. of daily produced garbage.

The workshop will be equipped to perform all types ofrepairs.At the disposal site, a partially fenced platform would beinstalled.Equipment would be provided for tne cleaning brigades.Technical assistance w$ii be provided by two professionalsfor one year: a technician in organization of cleaning andcollecting, and ore technician in maintenance. Governmentwould have líne management positions as well as timing ofcounterparts sta:f.Training: 9 months for municipal technicians in Barce!ona.Duration of plans 1 year.Total costs $1.700.000.

(c) III Phase 3: Urban Services Development Plan

Will cover the following objectives:- Organizational consolidation of the collection system.- Consolidation of collection with containera.- Production in Maputo of new containers of fiberglass.- Establish and opening of a plant of 11.000 Tm/year of

compost.- Recovery of the scrap material, paper, and glass.- Rationing of the disposal arca.- Consolidation of the repair shop.- Self-financing of urban services through the

establishment of local taxes to be determined by theongoing local government study.

- There will be technical assistance of 3 professionals,2 extending the functions of thk 2nd phase and a thírdone to establish and functionin& of the compost plant.

The aid package would include:- Compost plant.- Material plant of fiberglass.- Repair shop equipment.- One towíng truck shop.- One container washing truck.- 10 containers of 10 m3.- Tools and cleaning material.- Spare parts.

There will be a gain of about 200 employment slots.The duration of the plan will be of 1 year.Total cost of necessary aid: $1.600.000.

- 61 -

ANNEX 4Pago 5 of 7

Self-Financinf System ThrouRh Taxation

12. The costs of cleaning services, collection and disposal ofgarbage, once the system is established, at 1988 prices, is estimated tobe:

Collection of garbage ... 170 M. Mt/yearStreet cleaning ......... 130 M. Mt/yearDisposal ............ self-financingOverhead .....*.......... 60 M.Mtlyear

TOTAL . ....... 360 M.Mtlyear

The local government finance servíces will consider means of costrecovery.

- 62 -ANNEX 4

Page 6 of 7

MOZAMBIQUE

URBAN REHABILITATION AND EMPLOYMENT GENERATION PROJECT

B. IMPROVEMENT OF SOLID WASTE AND OTHER URBAN SERVICES IN BEIRA CITY

SUMMARY AND CONCLUSIONS

Present Sítuation in Beira

1. The D.S.U. of the city of Beira has insufficient material andpersonnel to be able to offer appropriate services to the citizens ofBeira. This lack of resources causes not only a deterioration in theappearance of the city, but also serious sanitary problems. Thesedeficiencies are compounded by the fact that:

(a) The repair shop has great difficulty in repairing vehiclesdue to the lack of essential spare parts.

(b) Street cleaning is badly organized, with a high level ofabsenteeism and lack of adequate materials.

(c) Enterprises dedicated to construction of infrastructure donot obey the regulations of repaving working zones afterrepairing.

(d) The present system of disposing of garbage in dumping areasis contaminating the environment and the surface andgroundwaters.

(e) The high rate of population growth accentuate the lack ofmunicipal services.

(f) No efforts are currently being made to organize the proceasof decentralization and autonomy of the D.S.U.

(g) The possibilities of finding solutions from themunicipalities own resources are limíted.

- 63 -

ANNEX 4Page 7 of 7

Summary Cost of Equipment

2. The estimated cost of equipment is as follows:

- 2 Compactor trucks 14 m3. ($80.000 each) 160.000- 2 Trucks with hooked 10 m3. containers ($65.000 one) 130.000- 20 10 m3. containers (20 x 2.500) 50.000- Material for the manufacturing of 3.750 buckets of 60 liters 10.000- 1 1 m3. Bulldozer 70.000- Spare parts for vehicles 40.000- Technical advisor-organizer (1 year) 70.000- Tools and material 20.000

GARBAGE COLLECTION TOTAL 550.000

- 1 Tank truck 75.000- 1 Tow trvck 30.000- Spare parts 15.000- Tools and plant equipment 30.000- Workshop equipment 50.000

TOTAL CLEANING 200.000

TOTAL 750.000

There should also be technical assistance in the form of an advisor to helpimprove the organization and structuring of Urban Services. Provisionshould also be made for the training of a technician of the Municipality ofBeira in Spain with the Spanish TA program.

3. Estimated costs for cleaning services, collection and disposal ofsolid waste are as follows:

Garbage collection 60 M. Mt/yearCleaning 45 M. MtlyearDisposal 5 M. MtlyearOverheads 20 M. Mtlyear

TOTAL 130 M. Mtlyear

- 64 -

ANNEX 5

MOZAMBIQUE

URBAN REHABILITATION PROJECT

LINES OF CREDIT

1. This annex describes the two different types of lines of creditthat would be made available under the project:

(a) building materials loans; and(b) loans for small and micro-enterprises.

BuildinR Materials Loans

2. The loans for the purchase of building materials form an importantpart of the sites and services componenta in both Maputo and Beira, in thatthey would enable plot holders to finance the materials they need to buildtheir homes by self-help methods. An integrated approach to the provisionof technical assistance, building materials and loans is envisaged, asoutlined in Annex 5(a).

Loans for Small and Micro-Enterprises

3. The loans for small and micro-enterprises (SMEs) would contributeto employment generation in the urban areas, particularly ín constructionrelated activities. While they are intended to assist SMEs on a city widebasis, they would in some cases integrate with the project's sheltercomponents at the Bairro level.

4. In concept, this component would provide small loans averagingleoas than US$1,OOO to micro-enterprises, mostly with lesa than 10 workers,to purchase sparts and equipment to enable the enterprise to function. Itwould complement existing micro-enterprise assistance achemes, which aremainly concentrated in rural areas, and the proposed IDA assisted small andmedium acale enterprise project which would follow shortly after (appraisalenvisaged towards the end of 1988). The latter would cater for largerenterprises in the more formal sector with larger loans.

5. The líne of credit for small and micro-entreprises would alsoprovide loans for larger (but still small) enterprises in the buildingmaterials industry, to enable these enterprises to purchase apare parta andsmall items of equipment and thus begin functioning again. This wouldprovide an adequate supply of building materials, which is essential to theimplementation of the proposed project and other projects underpreparation/lmplementation in Mozambique. A more detaíled description ofthe component follows in Annex 5(b).

AFWINMv 1 Q°°

- 65 -

ANNEX 5<A)Page 1 of 4

MOZAMBIQUE

URBAN REHABILITATION PROJECT

BUILDING MATERIALS LOANS

AND THE SELF-HELP HOUSE CONSTRUCTION MECHANISM

1. The proposed levels of support for self-help house constructionare as follows:

Technical Support

- Provision of technical documents "Plantas Tipos"- Possible construct4on of "Show Houses"- Overall technical supervision- Construction training courses- On-site technical supervision of construction, with building

control linked to material supply.

Material Support

- On-site provision of building materials- On-site fabrication of building components- On-site availability of equipment and tools

Financial Support

- Building loans through the BPD to cover material and/orconstruction cost.

Organizational Support

- Formation of collective groups for buildíng loan applications- Training of collective groups inc. administration and

accounts.

2. This programme is based on that initiated in 1982 within theDireccao de Construcao e Urbanizacao of the Maputo City Council, throughthe Sector de Apoio a Auto-construcao. The programme is presentlysupplying support to a construction "Intercooperativa" including two smallhousing cooperatives and a carpentry cooperative, and 13 constructioncooperatives engaged in prefabrication of dry pit latrine componente underthe nation-wide bas.ic sanitation programme.

3. Detailed proposals for the self-help house construction programewould be developed by the Direccao de Construcao e Urbanizacao, Sector deApoio a Auto-construcao. Detailed proposals for the credit mechanism would

- 66 -

ANNEX 5(A)Paga 2 of 4

be developed by the Coordination Unit for the project within the Direccaode Construceo e Urbanizacao together with the Banco Popular deDesenvolvimento. Detailed proposals for the collective group formationprograme would be developed by the Direccao de Construcao e Urbanizacao,Sector de Apoio a Auto-construcao on the basis of the existing experiencewithin the sector with cooperatives.

4. For self-help house construction it is suggested that a contractfor direct material distribution from a local depot be let on a localcompetitive tender basis, uith preference given to already existing amallbuilders merchants. The conditions of the contract would includeguaranteed material supply, and fixed price mark-ups for transport. Thewinner of the contract should be eligible for assistance under the GPE-UMFscheme, and this should include loans for purchase of adequate transportand construction of a depot. The mechanism for payment of mate-ial byhouseholds is suggested below.

5. For component fabrication - maiíly latrine slabs, sand-cementblocks and possibly prefabricated lintels, doors and windows - it issuggested that this be undertaken by direct contract with a newconstruction cooperative, or an extension of tn existing coop., as thesehave specific expertise in latrine slab construction. Conditions should beas above, and the coop. should 'ue guaranteed support from the Sector deApoio a Auto-construcao, Direccao de Construcao e Urbanizacao, and theNational Programme for Basic Sanitation.

6. For equipment assistance, it is necessary firstly to decide whattype of equipment should be available, but it is suggested that tools forconstruction be sold, and heavier equipment - for material transport to theplot, block making and scaffolding, be hired. It would seem logical tolink this to the direct material distributor.

7. It is suggested that the construction of the buildings for theabove activities be a local competitively tendered contract, financed fromthe GPE-SI4E Scheme, and possíbly administered by DCU, as would be theconstruction of the Project Site Office, financed out of project funds.

8. The type of mechanism suggested for self-help house constructionis as follows:

(a) On allocation of a plot within the area proposed to benefitftom the self-help house progra=me, the plot beneficiary willbe informed by the DCU when receiving his/her land allocationdocument, via a printed leaflet of the possibility of abuilding loan, and what this may entail, and where advice canbe sought - at the Direccao and Site Office. All plotbeneficiaries should be chosen from plot applicants wboaccept me"bership of mutual savings associations.

(b) The personnel at the site office should be two permanent landcor.trol monitors, and two permanent construction controlmoritors, with previous experience in the DCU Seccao Externa,

- 67 -

ANNEX 5(A)Page 3 of 4

and basic training, which should be undertaken in the firstyear of the project. These should be supervised by a mediumlevel construction technician and a medium level trainedurban planner, based at DCU Sector de Apoio a Auto-construcao, and Sector de Planeamento Urbano, respectively,where they wíll be assisted and supervised by professionalstaff in charge of the project implementation.

(c) Information on "Plantas Tipos", costs and bank loans shouldbe pernianently available at the site office and Direccao forconsultation. As the project gets under way, communalmeetings of plot holders could be held to better advertiseand explain the self-help house construction mechanism. Itis envisaged that some families may be relocated to theproject area from Bairro Ferroviario infill site, and thesefamilies and their houses should be initiated first and serveas models for other new and existlng plot holders.

(d) On decision to apply for a bank loan, individuals may beformed into collective groups for mutual savings of, ifpossible, approximately similar income levels and locations,including instruction in basic collective organization, to beundertaken by the Cooperative organization staff (1professional, 1 medium technical level accountant, 2mobiíizers). These group formations could be at specifictime intervals. On formation of a group, of a suggested 50families, the group should either elect or employ someonewith sufficient schooiíng to be trained in basic accountingfor the group. All families will be ínformed of the bankloan mechanism and its implications, but the accounts clerkwill have specific training.

(e) After formation the group should be assisted in itsappiícation for building licenses (which should be anextremely simplified, almost automatic process, as it isbased on DCU plan types), and after concession of this, itsapplication for a collective bank loan - the BPD acceptingthe collectivity of the group as collateral.

(f) The applications should be collected by th. DCU, and proposedto the BPD, who should meet with the grout, collectively, toexplaín the implications, and individually, to independentlyassess savings capacity, which will be an integral part ofthe application. On appzoval by the BPD, a líne of creditwould be opened for the collective grouS, subject to regularpayments, with details of each individual credit limit andrespective material kit. These details *ould be registeredin an individual credit book, which should include detaila ofmonthly group account credits and material debits. Both theindividual and the collective group would have copies of thisbook, and the cooperative suppor-. unit within the DCU Sectorde Apio a Auto-construcao should meet regularly with bothindividuals and famílies and check these.

- 68 -

ANNEX 5(A)Page 4 of 4

(g) The individual plotholder and collective groups can decidewhether to build collectively, semi-collectively (e.g.sharing heavy tasks only) or individually. Material can be"bought" from the Construction Coop. or Retailer onproduction of the credit book, when they will be entered asdebits. Material kits should be divided in phases,representing phases of construction, and the DCU constructionmonitor should sign approval of completion of each atagebefore the next phase can be started. The phases suggestedare:

(i) excavation of foundations and latrine (to check layouton plot and depth);

(ii) completed foundations and footing walls;(iii) completed walls;(iv) roofing and doors and windows;(v) completion (inc. plaster and floor slab);

Labour costs would be paid out of collective group funda.

(h) On completion of his/her dwelling, the house owner should begiven the final land title and building license. Thecollective groups will continue to exist until bank loans arerepaid, and could be used as a basis for future requests forassistance for house extensions.

(i) The rate of interest to be applied to building materialsloans would be the existing rate applied by BPD which is 9%per annum, subject to review by GOM and IDA as part of theannual review of housing strategy.

AF6INJune, 1988

- 69 -

ANNEX SBPage 1 of 9

MOZAMBIQUE

URBAN REHABILITATION PROJECT

LOANS FOR SMALL & MICRO-ENTERPRISESTHROJGH THE GABINETE DE PROMOCAO DE EMPREGO

(MINISTRY OF LABOUR)

Background and Justification

Loans for Small and Micro-enterprises (SME) will be provided tofacilitate the attainment of several important goals within the generalstrategy of urban rehabiitation and employment generation. The findingsof a recent report on small enterprises in Maputo and Beira found that amajor constraint inhibiting the operation or expansion of these firms wasthe lack of foreign exchange needed to purchase basic reqttirements (i.e.spare parts, replacement equipment or new equipment for expansion).Furthermore, credit facilities have, to date, not focussed on the needs ofurban businessmen, concentrating almost exclusively on the promotion ofrural production. Where credit is available, stringent collateralrequirements make loans impossible for most small firmas. At the s--e time,with substantial rationaiízation of the state sector, greater hopes arebeing pinned on the private sector to create more employment opportunities.Finally, many of the inputs for the urban rehabilitation programme will beprovided by small construction firms needing assistance in acquiringequipment. the provision of credit and basic business training.

The recently established Gabinete de Promocao de Emprego (GPE) ofthe Ministry of Labour, whose principal mandate is to seek ways ofresolvíng the growing unemployment problem through initiating employment-generating schemes, will be the executing agent for loans to SMEs. The GPEwill be expected to stimulate interest amongst small entrepreneurs intaking advantage of the support funds while also providing assistance(often through other existing structures) in management training, technicaladvice and general adminístrative procedures. The key component of thisinitiative will be the USS3.Om foreign currency fund provided under theproject which will be used for buying imported goods.

The fund will focus its attention on those micro-enterprisesemploying about ten or less employees through labour intensive methods, butwill also be available to larger amall scale enterprises employing up toabout 50 employees in the building materials sector. Many ot the smallerfirms will be operating in the informal sector and are likely to beinitially unregistered. It has been recognized that these firms hold greatpotential for employment creation as well as a capacity to significantlycontribute to the urban rehabiiitation program. Foreign currency loanawill generally be small amounta ranging from a few hundred dollars toUS$10,000 (but may be up to US$100,000 for larger firms in the buildingmaterials sector, which would be subject to more rigorous standards ofappraisal than the micro-.enterprises).

- 70 -

ANNI:X 5BPage 2 of 9

Operation of the Lines of Credit

Figure 1 offers a simplified diagrammatic representation of themain eleronts comprising the operation of the lines of credit.

Through the World Bank's Urban Rehabilitation Project's specialaccount with the Bank of Mozambique a line of credit of US$3.5m will beopened with the GPE. Of this, about US$3.Om will be earmarked for thepurchase of import requirements of small and mícro-entrepeneurs and US$0.5mfor technical assistance to the GPE.

Countervalue meticais must be pledged initially against thetechnical assistance component. The meticais countervalue for funds usedfor imports only have to be paid against each foreign currency payment toimport agents and will be guaranteed by the Banco Popular deDesenvolvimento (BPD).

The GPE, responsible for executing a strategy of employmentpromotion in conjunction with a program for supporting urban micro-enterprises through the SME lines of credit, will define the criteria forthe selection of borrowers, prioritize sectors of support (largelydetermined by the needs of the overall rehabilitation project) and setconditions for lending. The BPD, operating on behalf of the GPE in itscapacity as a financial institution, will manage the fund and administerthe loan accounts as well as participate in the selection of successfulloan applicants.

Bearing in mind that one of the main objectives for establíshingthis special fund is to allow for easier lending terms than normallyavailable to entrepreneurs, the increased risk will be borne by the GPE.To reduce and shift the onus of the risk, the GPE will seek to promote loanguarantees through groups of borrowers such as trade associations.Recognizing the SME loans will not generally conform to the stricterselection requirements of commercial BPD loans, the BPD will be paid amanagement fee for its involvement, while the GPE will be held responsiblefor all aspects outside of the management and administrative functionsallocated to the BPD.

SME loan application forms will be made available at and besubmitted to all Maputo and Beira branches of the BPD and the offices ofthe GPE. All applications will, however, be first processed and assessedby the GPE. Applications felt to need more careful analysis of creditworthiness or technical inputs may be passed on to the BPD or consultantsfor further consideration. (It should be noted that the GPE will drawextensively on the technical and management services offered by suchagencies as the Institute for the Development of Light Industries (IDIL)for which consultancy fees may sometimes be charged).

Applications deemeá to qualify for loans will then be consideredperiodically (as determined by demand) by a committee composed of seniorofficers of the GPE and at least one official of the BPD (at the chief ofservice level or above). Those applications approved by the committee

- 71 -

ANNEX 5BPage 3 of 9

would then be submitted to the BPD. The BPD would subsequently verify thatapplicants have no outstanding loans within the Mozambican banking system.Once cleared, loan agreements could be negotiated with the applicants. TheBPD would determine the rate of interest, repayment schedules and otherrelevant conditions for which it may be held responsible.

Loans will generally consist of two components: (i) the meticaiscountarvalue of imported gooda purchased through the GPE's foreign currencyaccount with the BM; and (ii) a meticais loan for the purchase ofdomestically available resources. The rate of interest applicable would bethat currently applied by the BPD for similar loans, wh'ch ranges from 18to 242 per annum according to the size and duration of the loan and thesector. The rate would be subject to revision by GOM to ensure consistencywith national policies for credit as these are developed. Where a clientcan immediately repay the meticais countervalue of the imported goods, hewill not be subject to any interest fee.

The acquisition of imported gcods as requested by loan applicantswill be processed by the GPE through an import agent and paid for by theBank of Mozambique. On receipt of the imported goods, the import agentwill inform the BPD who will then issue a clearance certificate to theclient to receive the good. On accepting the clearance certificate, theclient has a period of ten days to lodge a complaint if goods were receivedin unsatisfactory condition. If no complaints is lodged, the client willbe debited the meticais countervalue against his loan account.

The BPD will treat SME loans similarly to other commercial loansin terms of monitoring and collection of payment. The GPE, as part of itsrole in supporting micro-enterprises and promoting employment, will providea type of extension servíce, monitoring the developments of SME clients andoffering them advisory services. Repayments of loans including interest,less the administrative fee levied by the BPD, will be deposited into theSME revolving fund.

A Note on the Role of the Import Agent

There are some 260 registered import agents of which about 40% areoperated by the state sector. The GPE will be al'rowed to choose any ofthese for the acquisition of materials. There are no fixed rules as yotabout engaging import agents and no standard contractual arrangements. TheUnit for the Coordination of Import Programs (UCPI) is currently working onregulations which would establish conditions for tendering, etc.

Currently, import agents are expected to conform with the basicWorld Bank procedures such as obtaining three separate quotes fromsuppliers before placing orders. In certain cases (sítuations which areunlikely to affect SMIE loans), a tendering process will have to beundertaken to select an import agent for a particular order.

- 72 -

ANNEX 5BPage 4 of 9

FIGURE 1

PROPOSED INSTITUTIONAL ARRANGEMENTS TO ESTABLISH GPE'SSMALL AND MICRO-ENTERPRISE LINES OF CREDIT

IDA

Banco de MocaubiqueBM

s9 _

23

4o-port nbinet e Ptroaocao de Empreg nistry of

Agent Ban Finance

Ban o Popur de DsenvolvimentoBPD

- 73 -

ANNEX SBPage 5 of 9

Key to Institutional Framework Represented in Figure 1

1 - 2. IDA - BM - GPE. Standard procedural arrangements between theWorld Bank, the Bank of Mozambique representing the Government ofMozambique and the GPE for a loan agreement establishing the GPE small andmicro-enterprise line of credit.

3. BM - GPE. The BM estabiíshes a credit line of US$3.5m from thespecial account of the IDA Urban Rehabilitation Project. US$3.Om is to beused for purchaslng imported requirements and US$0.5m .for technicalassistance to the GPE.

4. GPE - Minístry of Finance. The GPE, through an agreement withMinistry of Finance, will be províded with countervalue meticais fund tocover the technical support for the GPE as we?l as contingency funds tocover loan defaults.

5. GPE - BPD. The GPE through an agreement with the BPD willestablish mechanisms for operating the SME líne of credít.

6. BPD - Client. The BPD will administer all loans to the clientaonce final approval has been given by the joint GPEIBPD selectioncommittee.

7. GPE - Client. The GPE will determine the types of beneficiariesand sectors which would he given priority. It wilI promote the micro-onterprise support fund amongst potential clienta. It will estabiishcriteria to be used for selecting categories of borrowers. The GPE will beexpected to work in close collaboration with other bodies dealing withother aspects of small scale business development such as GAPI, IDIL andthe DPIE.

8. GPE - Import Agent. Engagement by the GPE of ímport agent(s) topurchase materials through the BM credi líne.

9. Import ARent - BM. The import agent, working on the basis oforders submitted by the GPE (compiled from clíent applications), will bepaid by the BM through letter of credit or goods in advance of payment.

10. Import ARent - Client. The import agent will supply the client(who will be informed by the GPD of arrival of goods) with the importedmaterials.

Proposed BudRet for the GPE Small and Micro-Enterprise Line of Credit

I. Technical Assistance (Non-recoverable costs)

(i) 1 Consultant with specialization in small scaleenterprises, preferably with degree in economics andbusiness administration as well as experience in Africa.

24 months at US$10,OO0 per month: US$240,000

- 74 -

ANNEX 5BPage 6 of 9

(ii) Equipment:

1 computer, 1 printer, software,1 photocopier, 2 typewriters,4 filing cabinets, room dividers (1) OS$25,000

2 vehicles (one each for Maputo and Beira) US$40,000

operation and maintenance of vehicles USS50,000

(iii) Training of GPE Staff

4 staff travelling overseas for an averageof 3 months (travel 4 x US$2,000;per diems 4 x 90) US$40,000

(iv) Basic Skílls TraininR for Micr',-entrepreneurs

Provision of materials, printed documents andtuition costs to supplement ILO-IDIL managementtraining sec-inars (3) US$20,000

(v) Sub-Contracts to IDIL and other technical unitsto provide technical advice on feasibiity ofloan applications and on appropriateness ofimported requirements (over 3 years) US$25,000

Total non-recoverable costs: US$440,000

Notes:

(1) This assumes that the GPE will receive equipment allocatedto it under the PPF agreement.

(2) Two vehicles are essential for the project as much of thesupport for micro-enterprises will consist of "extensionuvisits by GPE staff to loan beneficiaries.

(3) A management training program has recently been initiatedby the ILO through IDIL. Course material is relevant tothe naeds of micro-enterprenaurs and it has been agreedthat IDIL would provide seminars to entrepreneursidentified by the GPE who in return would fund some of thecosts of mouniting such seminars.

- 75 -ANNEX 5B

Pag. 7 of 9

II. Recoverable Costs

(i) SME Lines of Credit US$3,000 000

Total Project Cost: US$3,440,000

Staffing Reauirements of the OPE Small and Micro-Enterprise Lines of Credit

Director-General

Duties. In addítíon to the normal duti.es associated with theoperations of the GPE, the Director will be expected to undertake thefollowing activities:

- coordinating the activíties of the SME line of credit;

- workíng ín close collaboration with the SME consultant indetermining general procedures, policy and selectioncriteria for SME loans;

- maintaining elose contact with the relevant atructureslikely to be associated with the SME line of credit (e.g.BPD, Bank of Mozambique, IDIL, DPIE and GAPI);

- presidíng over the joínt GPE-BPD commisslon which willregularly meet to evaluate loan applications -as processedby GPE staff;

- deciding on the engagement of consultants to analyzecertain loan appiícation.

Consultant

Duties:

- esteblíshing, in close collaboration with the Director-General, SME loan policy, selection criteria for loanapplications and conditions for lending;

- teaching staff how to evaluate loan applications with GPEselection criteria;

- developing an extension program (training and monitoring)to be administered by the GPE with all SME clients;

- establishing a computerized records system for the GPE andto familiarize staff with the use of computera;

- 76 -

ANNEX SBPage 8 of 9

- liaising closely with all the relevant bodies concernedwith the operation of the SME lines of credit and to ensuresmooth liaison between coordinating structures;

- advising the Director-General *jout other issues affectingthe operation of the GPE which may fall within the theconsult,nt's field of competence.

Qualifications. The consultant should hold a post-graduate degreein economics or business administration, having experience in bothdevelopment problems and small-scale businesses. Working experience inAfrica would be essential, preferably with some knowledge of the Mozambicaneconomy. The consultant should also be able to work and communicate inPortuguese and be familiar with data base computer systems.

Administrator

Duties:

- working in close collaboration with the Director and theconsultant, being responsible for executing their decisionsand orders;

- responsible for the day-to-day administration of the SMElines of credit;

- administering the documentation and records system for theSME lines of credit;

- coordinating the scheduling of appiicant Interviews andextension visits by GPE staff;

- responsible for all routine correspondence not requiringintervention by the Director or Consultant.

Qualifications. The Administrator should have an educationallevel of Standard 11 or Standard 9 with equivalent supplementaryprofessional qualifications, while holding a government grade of "Tecnico"B" or 'C" or Administrative Officer "A" with at least ten years ofexperience. Working experience should have been at least at the level of"Director" or "Chief" in the central or provincial governments or 3 yearsof management experience in a business. The administrator should have aworking knowledge of English.

2 Economists

Duties:

- interviewing applicants and issisting them in the fillingout of SME loan app$ications forms;

assessing application forms in terms of GPE selectionczitería;

- 77 -

ANNEX SBPago 9 of 9

applying economic feasibility analysis to applicationswhere possible;

preparing reports on potentially suitable candidates forthe joint coímission of the GPE;

regularly visiting SME loan clients to monitor activitiesof the enterprises and to give advice where possiblQ onbasic management and accounting principles as well aspractical information about more specialized sources ofinformation;

- maintaining regular visits and consulting when necessarywith relevant structures such as IDIL, DPIE and GAPI;

- organizing s;inars for entrepreneurs;

- promoting the SME lines of credit amongst potentialclients.

Qualifications. The Economists should hold a bachelor's degree ineconomics or business administration and have at least 3 years of workingexperience in either the civil service or business. The Economist shouldbe familiar with project appraisal techniques and basic business concepts.They should also have a working knowledge of English, while some experiencewith computers would be an average.

1 Accountant

Duties:

- undertaking cash flow analysis of projects;

- advising entrepreneurs on the maintenance of basicbookkeeping procedures and other elementary businessapplications;

- assisting with applicant interviews;

- assisting other staff in undertaking basic calculations;

- maintaining the general accounts of the GPE.

Qualifications. The Accountant should have an educational levelof Standard 9 (basic) at commercial scho ,l with specialization inaccountancy plus 3 years of relevant wor; experience in the state orprivate sector.

AF6IN,Juni.n 1988

- 78 -ANNEX 6

Page 1 of 7

MOZAMBIQUE

URBAN REHABILITATION PROJECT

INSTITUTIONAL DEVELOPMENT

Obhectives

1. One of the risks of the proposed project lies in exceeding thelocal implementing capacíty, given the limited number of technicallyqualified personnel available, from government officials and projectmanagers, to skilled construction workers and equipmer.t operators, andparticularly in view of the numerous other projects being undertaken thatwill place simultaneous demanda on the pool of human resources. To counterthis risk, the main objective of this component is to provide theinstitutional support, training and technical assistance to ensure thecapability of project execution, operation and maintenance. In additionthe component also ais to support the implementation of the agreed localgovernment restructuring and financial strengthening, issuing from thestudy of local administration and finances.

2. More specifically, consultant services or technical assistance,training, vehicles and equipment, and operating expense would be providedfor central government and local authorities (see Table A):

(a) to strengthen the capacity of the implementing agencies toexecute the project and to provide on-going maintenancethereafter, such as in the case of the road and waterrehabílitation and the solid waste management components;

(b) to provide a project administration capacity were there isnone, such as in the case of establishing the ProjectImplementation Unit (PIU) and HABITAR (Housing Managementand Supervision Unit) in the MCA; and

(c) to develop institutional capacity in areas supportive of,but not directly involved in project execution, such as inthe case of the land registration and titling andmanagement and maintenance of the housing stock.

- 79 -

TABLE A ANNEX 6Page 2 of 7

11AIBQUE

Urben Rbebtlitatton Project

l"ft§tleml Dnelepmad

Projot Tecklleal Troimtq Eq.ip.& Oporotig --- USS mlili.- - -

UIogmmt alst. v*lIid Cta Lesel Florn Toal

MIE DHFP DNFP DNFP DNFP 0.00 0.60 0.60

1ff GPE OPE GPE GPE GPE 0.00 0.44 0.44

MC/DNIEC PIU PIU PIU PIU 0.03 1.20 1.50

DMEP/Mpeto IPrP.MonutJ PM I PM I PM 0.71 1.09 1.80

DNEPBIr. P .Mmnut PM1 PM IP 0.45 0.70 1.15

DNEC/PMHNA IU.-s-t.b. IIUGH UGH 0.05 0.45 0.50

CECM/DCU IA.Auton EZ I AAC Ii 0.14 0.10 0.24

CMDCU/DU IXAECdnt 0.02 0.10 0.12

CECn/DIU Tr.t.LtXO TL TLI 0.71 3.16 3.87

C ME.*1". 1 E IE/O& 0.01 0.07 0.08

CEC8fDPCA UGti.HI UGH IUGH 0.03 0.31 0.34

CEC8/DCU I A.AUtaCo IZMhZIZ 0.12 0.08 0.20

CECB/DUrI. MAE/CUil 0.02 0.10 0.12

CECI/hIU [jT:rGjj-Li I TL TL 0.16 0.74 0.90

CECI/APIE CE l 0.01 0.07 0.08

Tota 2.46 9.21 11.94

- 80 -

ANNEX CPage 3 of 7

Description

3. Under the component funds would be provided for the agencieslisted in Table A. At each of these levels the emphasis would be on directoperational involvement, institutional building and in-service training ofHozambican counterparts:

(i) the Ministry of State Administration (MAE), would channelUS$1 million in technical assistance, funding for training,vehicles, equipment and operating costs to the Center forUrban Management. The Center will provide financial andadministrative management training for municipalities, andasaistance in management reform to local government, withthe support of the Eduardo Mondlane Universit" and IBAM(Institute Brasileiro de Administracao Municipal), andfunding from the EEC (about 550,000 Ecu). About US$400,000would be specifically targetted for land registrationtraining and technical assistance for the Directorate ofUrbanism of Maputo and for the Directorate of Constructionand Urbanism of Beira, as well as for housing managementtraining for the APIEs of both City Councíls;

(ii) the Ministry of Labour will provide US$440,000 to theGabinete de Promocao de Emprego (GPE) for projectmanagement, technical assistance, training and equipment,vehicles and operating costs to run the small scale andmicro-enterprise credit scheme (see Annex 5B);

(iií) the DEC within the Ministry of Construction and Water,vould receive about US$2 million for project management,technical assistance, training, and vehicles, equipment andoperating costs for the overall pcoject coordination andtracking, for project implementation management (by thePIU, page 5 of this annex, and HABITAR page 7 of thisannex), and for the development of a country-wideinvestment programming capacity; and to the MCA's regionaloffices for the execution of the building completion andapartment rehabilitation componenta;

(iv) the city councils of Beira and Maputo would receive aboutUS$3.77 million in technical assistance, vehicles andoperating costs for the DSU's (Urban Services Directorates)for the solid waste management components, and aboutUS$240,000 for project management vehicles and operatingcosts to the DCUs (Construction and Urbanism Directorates)for the respective sites and servíces and upgrading self-help programs, aside from the training provided by theInstitute (MAE), and the housing management units providedby MCA; and

- 81 -

ANNEX 6Pago 4 of 7

(v) the agencies responsible for the implementation o>f the roadrehabilitation and coastal protection works, DNEP/Beira *ndDNEP/Maputo, would receive about US$2.95 míllion intechnical assistance, training and vehicles, equipment andoperating costa for establishment of the on-goingmaintenance programs, which would eventually devolve to themunicipalities upon project completion.

Implementation

4. MCA would be responsible for reviewing Terms of Reference anddirecting all technical assistance. The project coordinator of the PIUwould ensure that the two HABITAR field implementation teams (for Beira andMaputo) establish appropriate and compatible accounting and reportingsystems. The technical assistance and consulting services would bechanneled to the executing and operating agencies mentioned above - DNEP,the DCU's and the DSU's. In addition, short-term assistance would beprovided at the end of each fiscal year to ensure that all project accountsare in order and that suitable financial statements are drawn up forexternal auditora acceptable to the Bank.

5. The total cost of technical assistance, training (includingtravel), equipment and vehicles and operating expenses under the overallheading of institutional development is of about US$11.9 million.Technical assistance and atudies, i.e. consultant services, amounts toabout US$4.6 million or the equivalent of 460 man/months of consultantservices, excluding work already undertaken with PPF funds . It isestimated that about 320 man-months would be required for completingdetaíled final design, contract documentation, and contract supervision ofthe works component. In addition, about 140 man-months of assistanca wouldbe provided to improve and manage project financing, budgetary, accounting,auditing and reporting activíties. Detaíled Terms of Reference for theprovision of the technical assistance and consultant services, as well aseach of the action plans for their respective set of components, are underpreparation by the MCA.

- 82 -

ANNEX 6Page 5 of 7

PROJECT IMPLEMENTATION UNIT (PIU)

1. The PIU, established in the MCA shall be responsible for theoverall coordination and supervision of project implementation, reportingdirectly to the Minister of Construction and Water under the advíce of theMCA Steering Committee.

2. The PIU shall be headed by a full-time director withqualifications and managerial experience acceptable to IDA.

3. The PIU's Director shall be responsible inter alia for thefollowing:

(i) coordination of all project activíties among MAE, MT, MCA,DNA, DNEP, the Conselhos Executivos, the Banco deMocambique, the Ministry of Finance and other governmentagencies, official entities and IDA;

(iii) preparation of project evaluation, progress reports andphasing of major components;

(iv) meeting regularly with operating agencies to overseeproject implementation activities; and

(v) ensuring appropriate compilation and ma!.ntenance of projectdocumentation and files.

4. The PIU will include ín addition to its Director, the followingkey staff:

(i) Prolect Coordinator wIho shall assist the Director indischarging his responsabilities, and shall be responsible,inter alia, for supervising the overall implpmentation ofthe project, participating in the selection andappointments of engineering, planning and architecturalconsultants, reviewing designa and other technical studies,preparing systems of cost control and critical path,monitoring of the physical progress of each component oftbe project, and establishing an appropriate communicationnetwork with the field supervision staff for Maputo andBeira. The Project Coordinator must have a BS in CivilEngineering with ten years experience in field supervisionin construction of urban infrastructure, housing andcommunity facilities valued at US$50 miLlion or more, witha thorough knowledge of quantity surveying. He or she musthave a working level of Portuguese or Spanish;

- 83 -

ANNEX 6Page 6 of 7

(ii) the Financial Controller, whc shall be responsible, interalia, for keeping financial accounta and project accounts,preparing withdrawal applications for signature by the Bankof Mozambique, liaison with the appropriate office in theMinistry of Finance, approving payments on bills with fieldsupervision certifications, preparing expenditure accounts,quarterly reports, and annual financial plans andsubmission of accounta for audit. He will also, assist theoperating agencies and the CEs of Beira and Maputo in theirfinancial management programs. The Pinancial Controllermust have the equivalent of a BS in Business Administrationor Management with ten years experience in FinancialControl concerned with construction and/or municipalmanagement. He or she must also have a working level ofPortuguese or Spanish; and

(iii) the Procurement Advisor, who shall be responsible, interalia, for preparing appropriate procurement arrangementsfor the project implementation, packaging procurement lotsfor civil works, equipment, furnishing, etc, and reviewingcertification of contract awards. He will also maintainguarterly updatlng of unit costs of materials and equipmentand continued close liaison with field supervision staff ofMaputo and Beira, and maintain weekly snhedules ofprocurement. The Procurement Director must have a BS inEngineering and Accounting with ten years experience inpurchasing and contract administration.

HABITAR (HousinR Management Supervision Unit)

S. HABITAR, to be established under DEC, shall be responsible for:

(i) coordinating the implementation of all the housing relatedproject components; and

(ii) the overall management of the resettlement plan under PartB (f) of the Project.

6. HABITAR shall be staffed as follows:

(i) a full-time Director, with qualificatiors and experienceacceptable to the Association, and who shall reportdirectly to PROHABITA's Director. The Director shall beresponsible for, inter alia: coordination of theresettlement plan and al' Project evaluation and progressreporta, and ensuring appropriate compilation andmaintenance of Project files;

(ii) Prolect Coordinator (Engineer) -who shall report to theDirector and be responsible, inter alia, for the following:supervising (including contracting supervision of) theconstruction and technical aspects of the housing related

- 84 -ANNEX 6

Pago 7 of 7

Project components and the resettlement plan; preparingcost control and crítical path systems; reviewingprocurement arrangementa, calling for international orlocal shopping and certifying of contracz awards;

(iií) Financial Controller (Economist) who shall report to th.Director and be responsible for keeping financial accountofor all the housing related Project components and th-resettlement plan, preparing expenditure accounts,quarterly reporta, annual financial plans and submission ofaccounts for audit, submitting for approval to PIU andprocessing certifications. He shall also review socio-economic and affordability aspects of housing relatedProject components and the resettlement plan; and

'iv) Field Implementation Teams (one for Beira consisting of acivil engineer and an architect, and one for Maputoconsisting of a civil engineer) who shall be responsiblefor, inter alia, monitoring physical progresa of ali thehousing related Project components and the resettlementplan, coordinating the activities of APIE and DCU of theCECB and CECM, reviewing the field supervision reporte,maintaining weekly progress charts, coordinating the civilworks with those of road, water and storm drainagerehabilitat$on, Project components as necessary.

AF6INJune, 1988

- 85 -MOZAMBIQUE A~ 7

URBAN REHABILITATION PROJECT Pa-e 1 of 16

ESTIMATED PROJECT COSTS AND FINANCING PLAN

H~ ro»olté fO H l O t i 0.9I Iulurlr , Ss&s M Ibtlah

Mwul ha Is44IIu lZ SI 141mêmi tWIas *.20 8 30 1.56

Ir_dmp ISéJua 0.1 0.75 0.14MnC~34*4 r 017 0.49 0.64kin em _Iltah 062 1.94 2.55hin b uoi M.s 0.75 0.10

w~ & srm bl tiia 3.559 3.1 16.77f_se Wur 0Itsl 0.94 1.71 3.5n» w~ CdW~ 1.24 456 5.7SOIft1Oê.sBoftflS. 0.40 1.80 2.20b^.7»brrin <fV 1.02 5.11 6.13

Cmtst tBnIC r 0.49 2.13 2.52§ara 0.33 1.33 1."6tho* 016 0.70 066

7.04 24.39 51.55

11 Wautw ebeIltd1onmmebttíílebdlulmmuu. 1.09 4.64 5.72

0.78 .34 4.11kIn 0.31 1.30 1.61

uegrUmgauiSIla&~rvhos 1.04 7.17 9.72Iisgiis 0.23 1.11 1.41IisguICutOb 0.28 1.18 1.46*len .05 0.17 0.23hinãn v ib Core mu0.08 0.34 0.42

1.20 5.0 6.20

CamMsfhfSoidwm 1.34 6.45 7.79fim.~ 1.10 5.33 6.42

0.25 1.12 1.374.27 18.16 23.25

tII SslUi WnseHboguat* 4'J 04i? 2.74 S.43

0.8-4 0.4 40.60.83 3.28 4.11

Imil lr E~Itorrl Sot 0.00 3.00 3.00Cnotr MC.tr. 000 190 190

0.0o 4.90 4.90

v lutttleuoMl Dsislog.uatIA&T.hrMuui.*r tPlOSl 0.07 0.42 0.40TA.T. arS idiWb/oSIhS)A0A 0.00 0.51 0.51TAAI.*rMoklguli~nmg.um It> 0.00 1.00 1.00TA& T.fr SIl & nre "trrwle (1PE) 0.00 0.44 0.44SuIst~ fa ommmnIf(8.1PPV> 0.05 0.90 095

0.12 3.27 5.30

vi Prejult itmwm tTA.T. rlt9 AMU 0.06 1.44 1.50TA~O001M03rSM&JRshm 029 1 29 1 Se

0.35 2.73 3.08

USEi T 12.61 57.43 70.03

Plyslw a4fifibnhgem 1.23 497 6.20Prl.Csf,tIgmulss 81.39 6.17 7.56

TOTAL «OST 15.23 68.57 03.79

flMICIG PUM LEAL fREIGi TOTAL----- US iaMllZa-----_-_-__-

iwram.ut 6.01 0.00 6.01IDA 6.14 53.86 60.00ib- tmeciw * 3.08 14.71 17.79

ro"la 2.32 11.12 13.44S80m 0.76 5.59 4.55

TOTAL 15.23 *8.57 835.8

- 86 -

ANNEX 7Page 2 of 16

MOZAMBUQUEURBAN REHABILITATION PROJECT

ESTIMATED PROJECT COSTS

~CICOT POWNT5 0 ..e..... ....... o.... . ....... . 1---- -------Ml------- ------- FM ...... 1 993 ........ TOtAL.L~a Fuw TGd L~ F~ Toi L" Fug Tol tL F~ T_ L~ Fo T~ L Fo. T~ Loi F T*S

AoadSD,i.sgeRh~~~~0Ib0oi 000 .1 mIm 9 sim 7 06? 4 2051 11.1 4.70 . .1. 41 0.0 2.0 14 tio mui,t0_dRP __ em0 0em 21 00 li eu l5 225 0em 142 te? Ia lu ,41_Ib. Miiid_i O 0* 0 10 em 1.1t12 e.l? 044 15% 120 l. 1.1

lifiidaDM 8 000e em 0.14 SI OU 005 010 023 ou sim ms 1._z»*d00I sie 0 02 02 1 o 7 0 47 0 u O 07 1 L4 1

IRo5.e e.3 003 121 074 0095 04 11 1.n 6 9 *.1 1on 4 tUS, Ro ,0 D.U1 010 040 OU S0 0.24 0.31 &.1 13 0.

wd_ a s_ SU 0 45 .Ut 5.30 1.00 2T1 1.3» 44S 1S 077 1t34 1.11 0s. 1.11 1.03 ao013.10 to.7* - _ 004 0.25 030 1.34 097 1.32 130 928.05 0e25 023 0.4 104 1.71 LU

t4 W~.hE _. 0ee 030 031 07n 3.14 .00 1I 1.11 1.3 1.24 4k sDs.Sswqghh 020 020 004 052 0sq 03 1 144 o O0U 1.0 t t2

~ AR _f O« 0.00 10 1Z 1.2 S11 ali

Co~ Em~ dn ILO? ail? 1.0710 .0 1 0.7 11.11.1 1.31 0.2 0.0 1.11 1.42 L04 L26coo ee00 e .11 0.44 0.QS 0.22 e0ts 1.11 133 1.33 1.U

_gp~ 107 0.0? 000011 0.1o.e74 00" ag e_c e.u ea e zIe 171 10L0.04 171 e .75 e.n 3.14 4.79 3.10 .31 13.0 1.04 4n2 e.1t 7.4 4. 31.34.

1ahiOmm~a olImh~ A4uh 00000041111 1.111 - O.00.0 0.30 1.00 2.001 0.00 20 1.04 1.0 4.00 6.7M~ o a oo0 0.2s 1.65 0a4 2t0 2.56 170 134 411e~h 000 0.00 010 0.44 0 54 0210 000i 1.0 131 1.11 1.02

Upgu~ tdS s~ a en 1 0.0 0.0 0.11 1e.39 1.72 t.n 000 1e1 tt 0.20 8.34 8.00 0.20121 1.00 7.017 0.nm~ BOI 0.01 0.11 0Q47 o.5 O 02 0.21 024 0.05 0.20 834 0. 0s 0.20 0.25 123 1.10 1.41

m_Cwews oc0 0o. 0.1 0.5 n 0. 014 e.0s 0.73 o.00 12. t.t1 1.eet 9.01 0.01 0.05 0Q16 0.22 0Q00 0o.S 0.5 0 .7 L1

0.00 0.04 01.7 0.21 0.04 0L.7 0.21 0.00 00 134 14OU9 000 0.00 0Qe 1.20 LU er --

o g edh9lb0s 0.10 .17 a '? 0.0 47 5.LU Q35 1.67 1.t3 0U.40011000 1.34 0.40 L .7tMbMs o0 -0 e0 0.2 401 484 027 1.23 16.0 0ee l1 1.33 .42

aeS Oeel 017 000 u11 oU 0.35 0.41 cee _21 1.12 1.171.e .2 e.2t 1.14 S.ee 7.41 e.ts 424 1.10 e.74 3.25 3.00 10.01 1.201 0.5 100! e. u- .0 4127 10.0 ii

_to 000 0.00 0.00 ee 0.00 o.74 3.em 0ee 0.14 0s4 0u6 0at 0.0 114 164 e1

100.000 .0 0. 14 0.64 L.U 10.0 .*.0t 0 1.00.00 0.0 £20 4tu t

B~JIM~ I _' SI 1 .1 0.60 5 7 0.75 *.7 175 *.a1 1a 1.0 11 0.0 3.0 o4 twHomu e4I 1.0 e.se .5 U 0ese Qa e0 . .u .rt 1210 120 1LU 1.0 t.Sr 1.

8.m m L Mj 99111 t «ltJ . lt 1.r i,S t .2 1 21r tS0170 t.. t.7t0 .0i 4.UI 4.0

T.ÃLT,.|SP2brP/DtD 0.D0 000 |04 024 12t 03 e0.l1 1.7 Q4 Q1TA4T.^8.OdT./00U s(8pI8E)A 0.00 10? 0.07 007 107 O. 100 161 a1T.A.LT.MIwiiqad2 _?auiq4AE> 0ee 140 0.40 0.I 0.30 0e.3e 0.3 1*0 1 t.0 a .T.Ku m. OE 4-11 0.U4 104 0.20 0.20 0.1- 0.10 0.1e el 100 L44 1.4

ShBE.uue udPW Dos 04e 0.45 0." e.1e ooO 0.25 0.2s 0.25 0.25 10, 10 1a0.0, 0.44 0.4 0.0 0S.7 0.87 104 0.711 .1 0.03 .03 4.i 0.S 0.26 0_ 2 3.21 3-.0

TÂI8T.1ír ~ 103 0.03 .02 0.47 411 002 0.47 14 .02 0.47 040 10 1.44 1.T.I O1MI lEfCy SlSfsap~ 0.03 O03 0.00 0.42 0.o1 0.10 0.42 0.62 L.O 042 0.52 e_2r 1.20 1m.!

1U0 10.00 e.11 0.N 1.n e.12 11.01 0.12 e.n 1.01 ___ 2.. 1.00

e~C1OST LU 1.4t t.u 2.S4 13.12 116.s 4317.11t4 2t.71t t U.S21.3 13.21 CLCS| t.151 1.20 | .70 0Lt| L.7t tLC1 17.42 7111103

p'qsi - COgm 0. 0.21 0.94 116 0.34 122 1.16 121 e.c6 0.s7 101 1.131 Q1t 100 0.00 1a 1.23 4?7 .20Rlb>gm 100 hIs 1 7e o. 0O2 210 2.s3 O.UC 133 176 e.1l tl i el 110 lu1 120 7.6

TOTAL COST 100 t.4 t.U 2.01 ;4.74 17.U5 a.12.21S.0 _ -35 t 2.UtC.57 1*.? 8.111 t.u1 1.14 L«1 L @1.22 00.» f.

- 87 -

ANNEX 7Page 3 of 16

MOZAHBIQUEURBAN REHABILITATION PROJECT

MAPUTO WATER REHABILITATION AND EXTENSIONtIn US$0o00)

Natverk blllto 190- 989----1- ----- 1990 -1991----- ----- TOTAL-----Lotal Forolgn Total ^.cel foruígn Total Local Forelgn Total Locel Forelgn Total Loalí Forgign Total

I CvIl WertsClaanig/Relintno O 145 96 241 145 96 241 144 97 241 434 289 723Natwork lalntenenct 35 44 79 106 132 238 106 132 230 107 132 239 354 440 79Distriet Met.rs O O 46 29 75 O 46 29 75

11 Equi"aatWatar Mters O 90 142 232 O O 90 142 232Whicl & quipmant o 158 166 3 52 55 O O tl 210 221Dl PipeToolb O 7 7 O O 0 7 7AC Pip O 328 328 O O O 328 328Valvas O 35 35 O O o 35 35Fltmn, O 30 O O o 30 30

elo Praofóni*l Servi.MalntonanceProgram 50 50 150 150 O O 0 200 201

lASE cOST 43 252 295 344 972 1316 297 257 554 251 229 480 935 1710 2645

Phglscl Contpngens 4.3 25.2 29.5 34.4 97.2 131.6 29.7 25.7 55. 25.1 22.9 48 93.5 171 264.5Pric Contingncloes 2.58 15.12 17.7 20.64 58.32 78.96 17.82 15.42 33.2 15.06 13.74 28.8 56.1 102.6 158.7

TOTAL COST 49.88 292.3 342.2 399 1128 1527 344.5 298.1 642.61 291.2 265.6 5568 1085 1984 3068

Natvark Exteasalm ----- 1988------ -----1989------ -----1990------ -----TOTAL-----Loal Forelgn Total Locl Foralgn Total Local Forelgn Total Loual Forelgn Total

I Civil W.rksilahotas Dist./Chamanc. Llne O 307 644 951 102 215 317 4091 059 1268Network Extenuion O 406 502 908 407 503 910 813 1005 e188

11 EqtupirtWeter Pumps O 5 220 225 5 221 226 10 441 451

hiecles &Equiptent 2 28 30 1 9 10 3 3.7 40Di PipaToola O 782 782 o O 782 782AC Pipe o 655 655 O O 655 655valves O 91 91 O o 91 91HDPE Flttlngs O 36 36 o O 36 36

111 Pratsalemal SrvceaDet. Eng. & Sup*rMlion 275 275 200 200 175 175 O 650 650

lASE COST 2 303 305 719 3139 3858 514 1114 1628 1235 4556 5791

Phjsical Contlngmncia 0.2 30.3 30.5 71.9 313.9 385.8 51.4 111.4 162.8 123.5 455.6 579.1Pric*ContingoncIu 0.12 10.18 18.3 #3.14 188.3 231.5 30.e4 66.84 97.68 74.1 273.4 347.5

TOTAL COST 2.S2 351.5 353.1 834 3641 4475 596.2 1292 1881 1433 52S5 6718

NOZAMEBIQUURBAN REHABILITATION PROJECT

BEIRA SEWERAGE RERABILITATION(In Us$'*OO)

PROJECT SUBCOMPONENTS - ----- 1988 - - ----- 1989------ ---- 1- 990 ------ -- TOTAL-----Local Foreign Total Locel Foreign Total Local Foreign Tetal Local foreign Total

I Civil WorksMal n Sewer Reconstructio n 40 220 260 160 880 1040 200 1100 1300Externsion Secondary Network 100 100 200 100 100 200Dwelli ng Connection Repai rs 100 100 200 100 100 200

1I EquipmentTrucks (2) 220 220 220 220Tractor Trailer 28 28 28 28Tools 52 52 52 52

111 Professional Services .Supervision (covered by Dut h eid)Studies & Engineering (PPF') 200 200 200 200

BASE COST 200 200 40 520 560 360 1080 1440 400 1800 2200

Physical Contingencies 24 108 132Price Conti ngencies 40 180 220

TOTAL COST __ 464 2088 2552

Ioa'1-

URE&N RE&BILITATION PROJECT

ESTIMATED PROJECT COSTS2 DRAINAGE JUNE 16 CIRCLE(In US$'000)

PROJECTSUBCOMPONENTS ---- 1988------ 1---i989------ - 1990 ------ ----- TOTAL-----Local Foreign Total Local Foreign Total Local Foreign Total Local Forcign Total

1 Civil WorkcsRoad 47 151 198 47 151 198Drai nage 143 429 572 143 429 572

Il Professiosol ServicmsSupervision 82 82 28 28 110 110Studies& Engineering 54 54 54 54

BASE COST 54 54 190 744 934

Physical Contiíencies 10 10 26 85 111 8 28 36 34 123 157Price Conti ngencles 3 3 9 44 53 4 lS 19 13 62 75

TOTAL COST 67 67 178 640 818_ 59 222 281 237 929 1166

o 1

0%'

- ól ú

àwm 7Paga 6 of lu

liOZUAIQllu1al REAIITÂTION PROJECT

ROADS REAIILITATION - NAPUTO(Cost Ia U.S. Dollar.)

COMPONENT FOREIGN LOCAL TOTAL__-___________ -------- - ---------------------------

General provision:Laboratorv and office 300.000Operation lab. and off. 368.000Vehicles 45,00oOperation of vehicles 27.00oGeneral provision total 345.,000 63.000 408,000

Karl Marx 138, 000 66,000 204, 000Guerra Popular 39,000 17.000 56,000Tanzania 114,000 49,,00 163,000Paulino S. Gil 36,000 18,000 54,000Mao Tse Tung 195,000 85.000 280.000O.A.U. 183.000 78,000 261,000Eduardo Mondlane 263,000 130.000 393,000Vladimir Lenine 124.000 56°000 1825000Marien NQaubi 200<),000 106,000 306,000Trabalho 240 * 000 125.000 365.000Antol a 20 1 ! , 000 1 0.3000 30400 ooVolcano 191 .000 107,000 298,000.16 de Junho (roundabout) 28,000 12,000 40,00024 de Julho 164,00:0o 70t 000 234 * 000Non--mottrised lane 117,000 65,000 202,000Mi sc<, llaneoun items 174. 000 70.000 244.000Surf. treat.& emerQ. rep. 667,C00 277, 00<0 944"000Supervisi on:1 Site Enaineer 186000<1 Quantity Surveyor 120,0002 Inspectors 8 .<-,C)Air- travels 30. 000Housing 486000Supervision total 378,000 8 * 000 386,000

Maintenance 1,3739, 000 237 ,000 1.576.000

GRAND TOTAL MAPUTO: 5! 136, 000 1 , 764, 000 6, 900, 000

DNEP 22.04.88

-n -AUU 7Po 7 of 16

NOZAEIQtUSU l~ REILITATION PROJECT

ROADS REIIILITATION - BEIRA(C.t Ia U.S. Dollar.)

COMPONENT FOREIGN LOCAL TOTAL

General provision:Laboratory and office 150,000Operation lab. and off. 24,000Vehicles 39,000Operation of vehicles 16,000General provision total 189.000 40.000 2299000Rehabilitation EN6 1,066,000 416,000 1,482,000Miscellaneous items . 29,000 9.000 38.000Surf. treat.& emerg. rep. 3986000 142,000 540,000Supervision:1 Site Engineer 120,0001 Quantity Surveyor 80,0002 Inspectors 8,100Air travels 155000Housing 32,000Supervision total 247.000 8.000 255.000Maintenance 755,000 155.000 910,000

GRAND TOTAL BEIRA: 2,684.000 770,000 3,454,000.

DNEP 22.04.88

92 - -~~~~A~E 7- 92 - Pas8 of 16.

IOAD REHAILITMTOI4-IEl111 MUIILITATIOII NOJS

(Cost lu U.S. DoDlar.)

Com~IENT 1M9 1 l990 1 MUTL1 ÇWfE! LOCAL TOTAL 1 FOIIl LOCAL TOAL 1 FUI1N LOCAL TOTA

l isian:Láuatory ud affice 150,000q"ration lab. Wd off. 24,000Ydicln: 39,000t, ation of weiicls 14,000hwal ision total 140,000 20,000 liO,QQO 29,000 20,000 49,00 199,000 40,000 229,00O

.háilitation o% 352,000 137,000 49,000 714,O0 279,000 m o 93M,'0 1,066,000 416,000 1,482,000lmisllaI its 15,000 5,000 20,000 14,000 4,000 18,000 29,000 9,O0 39,000

&W '. treat.& eerg. rep. 128,000 47,000 175,000 .270,000 :95,00 365,000 398,000 142,000 4,ki sian:1 Site Egineer 120,0001 .amtity 9urvw 90,0002 In rctai 8,000Air travs 15,0M0IHminq 32,0%&~§rvisia" total 80,000 2,000 82,090 167,000 6,000 173,000 247,000 9,000 255,050

uintitenmce 520,00 77,000 597,000 :35,n0O 78,00 31'"000 755,000 155,000 910,000

gNi) TOTAL lEIRA: 1,255,0M0 288.000 1,543,000 1,429,000 4E2,000 1.911,000 2,684,000 770,000 3.454,000

NE 25.04.99

- *3 -

una IAILVTATIOI M p KT OINATIOUM f=CT

b »SO R~IIITATI01 - Nou 1(Cout lu 11.1. L 11.ra)

I 198 1 19S0 1 191 1 0992 I TOTUem~ f 31 El; LU MAL íIU TaTOTALL IG 1 UUIS5 ÇQ< IOTAL O FII L IGlI. 1 FU.1 7 0T0U lTOIW

L.'.twy md cOocn 300,t000*iVt1. lá. md elf. 26,000

- dat of voh6cl v7,0%-w-ço.' total 300,0» 15,000 315.000 15,000 16,0 31,0 l1,00 lé, 31,0 15,0 1,0 J01,00 345,00 03,00 *

*1308,00 a,000 2^4,000 18,000 6,0 200,00-- .. ,ral# 39,G~0 07,843 6,o0 39,00 17,000 6,0

1a..ía ~~~~~~~114,00 49,00 165,00. 114,000 49,000 l03,00PmI,o 5. 6f1 36,00 18,000 54,11 36^,00 00,000 54,000

Im m Tg,q 195,00 e5,0 296000 095,00 115,00 MI,M0... 103,1a 78,1a0 1,W00D 0a3,00 78,00 26 ooofEhwo Im41 r*. 263. 1e».000 ao3,000 I,M 993,9Y1.iir Lu- mc 124,00l> SO.,M IEC,00 i24,000 10,00 IE,f O

10,000 70,noo 210,1 1(,001 3b,0 la ,0eo 2e0,00e 206,0003h. 240,00- 125,UO0 305,000 240,000 1250,00 305,00

_.v.1 2o1,DD 103,0DO 304,000 201,000 108 3O 4,0m046lcao 190,001. 107,0 208,000 141,000 107,00 20,00014 de Jr aro ~ ?t 26,000 u2,000 40,000 29,00 12,000 40,00024 do Jho 064, 000 7D,VO 234,0O 164,000 70,000 234,000I~otVíu1d 1 117,00 40 5,0 202,000 117,000 65,000 202,000Y ,llyd ltm I Fmiw a 40,000 01,000 62,000 44,000 1I,OD0 S2,000 G,ODO 17,000 6O,000 4Z,J 17,000 60,00 174,0DO 70,DO 244,000

3k0,. treat.Q ewq. (0. S4,Q00 2,000 S0,0>7 503, 2cs,051 7QS,0aO 1o0,000 46,000 .146,000 667, 2,Q00 944,000

O Soto inqiuv 19),000I 0 ity 9s, 12D,O2 T~tw s 12,000#ir trawí 70, O0

-rq nT48,007-rInin total 63,QOD 2, 05,000 126,000 4,DOD 130,000 126,ODD I oo0 020,000 ',o 2,QOD o5,DM r.8,002 12,00D0 390,0DObintu oc901 ,0r 119.000 1,0201 *38,000 010,000 5ss,0on i,rg9, u 237,0W l,s57,00

lUTO. lT 1 S6990 ,0OQ 2,024,000 2,701.00 7"2,'n 2,9go,000 1,014,V» 4b,6 1,424,001 4>:,000 1w0,u4 59.,000 55,1U6,O 1,70,000 6,904,000_ _ - = - - _ -. -

iiP 2s.04.00

- 94 - ANEX 7Page 10 of 16

MOZAMBIQUEURBAN REHABILITATION PROJEC-

ROADS REHABILITATION - IAPUTO(Maíntenance Costs in U.S. Dollars)

FIRST YEAR------------------------------------------------------------. _----__---

LOCAL FOREIGN TOTAL LOCAL AID -RESOURCE FUNDS

-------------------------------------------------------------- __------

Equipuent 39,450 420,550 460,000 O 460,000Tech. ass3st. 19,250 120,000 139,250 19,250 .120,000Materials 27,902 164,637 192,539 27,539 165,000Hand tools 2,915 6,657 9,572 5,572 4,000Sal. & wages 47,454 o 47,454 47,454 . OVeh. & eqpt. op. cost 24,930 192,837 217,767 172,767 45,000Roaduarklng 885 16,825 17,710 17,710 o

…--_---------__--__-__--__------------------------------------------_

Subtotal 162,786 921,506 1,084,292 290,292 794,000------------------------------------------------------------ __----__--

Overhead 15,613 57,143 72,756 72,756 o

TOTAL 178,399 978,649 1,157,048 363,048 794,000'3______________________________________________________________-------

SECOND YEAR

LOCAL FOREIGN TOTAL LOCAL AIDRESOURCE FUNDS

Tech. assist. 13,250 87,500 100,750 13,250 87,500materials 27,902 164,637 192,539 27,539 165,000Nand tools 2,915 6,657 9,572 5,572 4,000Sal. & vages - 47,454 o 47,454 47,454 oVeh. 8 eqpt. op. cost 24,930 192,837 217,767 172,767 45,000Roadaarking 885 16,825 17,710 17,710 O

______________________________________________________________________

Subtotal 117,336 468,456 585,792 284,292 301,500------------------------------------------------------------- __-------

Overhead 15,613 57,143 72,756 72,756 o-------------------------------------------------------------------- _

TOTAL 132,949 525,599 658,548 357,048 301,500…------------------__ ---------------------------------------- __ -____

FIRST + SECOND YEAR 1,815,596 1,095,500

Hereof:Equlpnent 460,000Tech. assíst. 207,500Materials 330,000Hand tools 8,000Veh..& eqpt. op. cost 90,000

DNEP 22.04.88

-95 - ANNEX 7Page 11 of 16

MOZAMBIQUEURBAN REHABILITATION PROJECT

ROADS UHABILITATION - BEIRA(Maíntenane. Costs in U.S. Dollara)

FIRST YEAR

…------------------------------------------------.----------------__---

LOCAL FOREIGN TOTAL LOCAL AIDRESOURCE FUND:

…------------------------------------------------------------__ -------

Equipuent 25,500 259,500 285,000 O -285,000Tech. assist. 19,250 120,000 139,250 19,250 120,000Materials 16,005 69,918 85,923 15,923 70,000Hand tools 2,204 3,563 5,767 3,767 2,000Sal. & vage3 31,776 o 31,776 31,776 - OVeh. 8 eqpt. op. cost 16,590 124,945 141,535 107,535 34,000Roadaarking 330 6,270 6,600 6,600 0.----------------------------------------------------------------------

Subtotal 111,655 584,196 695,851 184,851 511,000______________________________________________________________________

Overhead 10,036 30,704 40,740 40,740 o______________________________________________________________________

-TOTAL 121,691 614,900 736,591 225,591 511,000

SECOND YEAR

LOCAL FOREIGN TOTAL LOCAL AIDRESOURCE FUNDS

Tech. assist. 13,250 87,500 100,750 13,250 87,500Materials 16,005 69,918 85,923 15,923 70,000Hand toola 2,204, 3,563 5,767 3,767 2,000Sal. L wages 31,77.6 o 31,776 31,776 oVeh. 8 eqpt.-op. cost 16,590 124,945 141,535 107,535 34,000Roadaarking 330 6,270 6,600 6,600 o

------------------------------------------------ __------------------

Subtotal 80,155 292,196 372,351 178,851 193,500

Overhead 10,036 30,704 40,740 40,740 o

TOTAL 90,191 322,900 413,091 219,591 193,500

FIRST + SECOND YEAR 1,149,682 704,500

H.roaf:Equlpment 285,000Tech. assist. 207,500M&terials 140,000Hand tools 4,000Veh. 8 eqpt. op. cost 68,000

DNEP 22.04.88

- 96- ANNEX 7Page 2 of 16

HOZAMBIQUSURBAN REHABILITATION PROJECT

UPGRADING, SIM S SERVICES AND HOUSING

globa l es

TOTAL Foreign Local Seles T.xCurrencg Curreney

1. OU SITE CIYIL WORKS 793805 637745 120691 35369

1.1 Site PreparationCompensation 22750 o 22750 oPlot Demerketion 28296 24529 3767 o

1.2 Roed 9261 6174 2646 4411.3 Senitation 59981 57125 o 28561.4Water Dfstribution 203178 163700 29804 96751.6 Water Connection 163506 127622 28098 77861.7 Electrical Distribution 222202 177995 33626 105811.8 Electrical Connction 84630 80600 o - 4030

2. PROFESSIONAL SERVICES 1050474 912604 137869 o

2.1 Project Management 620000 520000 100000 O2.2 TA.&T. Self-Help 120000 120000 0 o2.3 Superviston Infr&Shelter 310474 272604 37869 o

3. SHELTER 2463615 2088300 258000 117315

3.1 Core Units 1354500 1032000 258000 645003.2MlterinlCredit - 1109115 1056300 o 5281t

BASE PROJECT COSTS 4307893 3638649 516560 152684

Phoical Conttngencies 430789 363865 51656 15268Prices Escalation 646184 545797 77484 22903

TOTAL PROJECT COSTS 5384866 4548311 645700 190855

4. ASSOCIATED PROJECTS

4.1 Ac Road 187605 134003 44668 89344.2 Support S.S. Entreprises 700000 700000 o o

BASE ASSOCIATED COSTS 887605 834003 44668 8934

Phgsical Contingencies 88760 83400 4467 893Prices Escahlton 133141 125101 6700 1340

TOTAL ASSOCIATED COSTS 1109506 1042504 55835 11167

- 97 -

ANNEX 7Page 13 of 16

MOZAMBIQUEURBAN REHABILITATION PROJECT

UPGRADING. SITES. SERVICES AND HOUSING

Mia Iu_ Ia. i_ tata f_ MM i$_ Wa í.t Mm taU f_i

i u_em" V~ t_4s I_i 13 _ _ mi _ _

mo10 4$111I o 3 5 ou .3 13P41 e J . tE 134* eteu M 40 7 34 tlt? 4 1 $~ 1313 _7 lo us 315 i_ 5

t.rtt P O404 3 i7tt "lE _i O7 3 45M 4175 Ot 353_7t tI4WB*fr,db t aio um, tu, suo missa em ai: vmn ts um mi. vumo site _ W oLI V~~ouo. mIl M 1011 m u?u m as u~Mame o 1

Z._m~~~"& *7 X _|_ em"§" -7X ~E- *_ _ *

I3~td5 11 0t tO mS 37 *t t_

1. meu *?? UI SS a ~ um *M m a eM um Mt s_ _ _m

ou. ~tsim 81040w lism na e usu iu'i simum o ssumim ,,i *. o. íu.m 14 gm, sOismtt i Ett m _U t0 07 O 7 t _i 2# O b SM <I *0W *~ lit Ifl

15140 MB? _UI StOt «1810 1811 4040 OS mSO_ _33 *UO 40_ _ UO 8181 <SB-* OO ttlNt7 t<iate im

- 98 -

ANNEX 7Page 14 of 16

MOZAMBIQUFURBAN REHABILITATION PROJECT

UPGRADING, SITES, SERVICES AND HOUSING

vim -í. vim -a- v am s-wr10I r ~ ls hIm roo I . L li 1#A fup a

tunu Cw>u I= Cng Cor~ Ia eCalm C leu,

o. mmii av tem 03a6 43 I tosam 24~ 18818 1 1*11 8414 usas 817 a st71 * 1s

*-| n7R U751 7UUu0s 3 31 337410

_ m $ *leu 430 4000 3e0 3601 810 18 3n1 mn lia1.4wl4_ 307 170 304 1nMw_Cn0a 18678n 38845 0703 34t 1137 00 51 1838 7n

8. PUiUUOL UU C 8710 310031t 7U0I0 Ot 1 1118 1 0 aO 3l7sU 10 3

3.1 u _ 333 Im3 100 11001 1n3 31000 19335 17 310 203.3?AA1.1sI<-IMp 30 300 45000 40 41 40

3.8~~,*InMrUM~r 111726 #a% 3800 1142 la11am 14L0 1613 1413 o o

8.LE 873 4100 s1300 83 12_38100 10 l44110 1300 581 1111 1311 O 3

3.Ir.I 67131 8160 1320 8*1 4731 1120 300 311_t@0ltn11 Cr 5550 8316 36400 154518 5311 50

PIOdIU? 31511 1104631 144160J 8088 1431221 108113£ 115111 108 6ft0 081141 04010 3 308

a=PPI B 4 124418 30333 1I41 083 183114 100» 6IS 033 04000 3 n00 3036 2SPnIaIIaIn 32406t 106741 4841 U47 2714" 38307 81 10317 l1400I 131011710 438

SUTL ~*.t ali 2308l0 18833 8»157 70889 3232147 1141N917 a831 0141 49 11161 lOsI 51310 f1183

41 hmnh 10760 18003 44688,034442.3 .. 9t8 ~ ro ío 400 400 t0000 li0000

IlIOCUStI 31618 817488 234N01 44 e134 40000 460080 a a 17,0 117980 a a

4CuiluOsIIms 31761 23400 4447 08 400 4w000 o a 1000 17tO! O OPilem 47441 81600 67 o 10 6 6 O O 31 3W O o

SUIL _3870 8884 111 1111681 10 00 aO * 318 3 m a

- 99 -

ANNEX 7Page 15 of 16

!4OZAMBIQUEURBAN REHABILITATION PROJECT

HOUSING COMPLETION AND REMABIl!TATION

GLOBAL. COSTS

( U.S.DOLLAPS ) :=====:~----====~====_=-=======' TOTALS:

: : ~~~~~~-- - ------ -- - ----- -- - - - -- - -- - - -- -- --

DKSCRl-;ION : TOTAL FOREIGH % OF LOCAL : XO :: : : ~~~~~~~~~CURRENCY TOTAL :CURRENCY :TOTAL:

1.- CIVIL WORKS 12 731 546 : 10 37 926 80,96 : 2 423 620: 19,04 :

1.1.- RKRABILITATION 5 404 207 4 323 366 : 80,00 1 080 841 20,00

:1.1.1.-- aputo 3 878 426 3 102 741 : 80,09 775 685 : 20,001.1.2.- Beira : 1 525 781 1 220 625 80,00 305 156 : 20,00 t

-- - - - - -- - - - - - :- - - - - - -- - -- - - -- - - - -- - -- - - -- - - - :1.2.- COHPLKTION : 7 327 339 5 984660 5 81,67 : 1 342 779 : 18,33 :

-- - -- - - -- - -- - - -- - -- - - -- - -- - - ---------…1.2.1.- Maputo 6 090 539 4 995 120 : 82,01 1 95 419 : 17,99

' 1.2.2.-Beira : ...... 1 236 800 989 440 : 80,00 247 360 : 20,00

2.- SUPERVISION 617 347 : 617 347 : 100,00 O 0,00

2.1.- RflEBILITATZON : 324 253 324 253 l 100,00 , O : O,002.1e. apeo oe e

: 2.1.1.- Naruto : 232 706 232 706 1Ce,00 : O : O,O0:2.1.2.- Beira 91 547: 91 547: 100,00: O: O,eO :2.2.- CONPLETION 293 994 : 293 094 : 100,00 : e : 0,00

2.2.1.- Naputo 243 622 5 243 622 : 100,00 O : 0,002.2.2.- Beira : 49 472 : 49 472 : 100,00 o 0 0,00 :

B:EA PROJECT COSTS 13 348 893 10 925 273 1 81,84 1 2 423 6201 18,16

Phyuieal Contingencios 1 334 889 1 087 400 : 81,46 ' 247 489 : 18,64 ePrice lscalation ., 2 002 335 1 631 099 : 81,46 371 236 1 18,54

TOTAL PROJWCT COSTS : 16 686 117 13 643 772 81,77 W 3 042 345 18,23

3.- PROWCT NANAGKNKNT 1 0000 0 1 000000 100,00 0 e 0,00

T O T A L :17 686 117 : 14 643 772: 82,80: 3 042 345 1 17,20:

NOTE: 'B.C.C.I." and Torre 'A' included

- 100 -

ANNEX 7Page 16 of 16

MOZUMBIOUEURBAN REHABILITATION PROJECT

HOUSING COMPLETION AND REHABILITATION

GLOBAL COSTS

< U.S.Nm.LIA 1 t - - ----- -|: ~~~~ ~~19.1 : 20.191 1 30.I19 1

t IE! ;I 1 N 1 T t -1 t t FRIO$ 1 t E|1 U Iu. 1t~ 1 SD. O Fl:Yt á I:i a t o~ 17c. 1RNEIU 1

l 1.-CIVIL w 1 5413911 4494w51 9151 39t5711 307331t 74t2171 3436fI 2451 67311

1.lrl-IlUTATIO 1 41 41 e: 17M 577791 334431 34U61 27495971 69751

11.1.1.-Nhpa 91ei o 1, 1 451 374 1 1167 51 291 9741 2419 t1 11 2411 4 381 111.1.2.-bira -I CI 01 o1 5479491 46t279 101 591 14171321 9143 6 21M5971

5 1.21- E[Ill t S739f 1 4 49 1 I 9 1 1 339 1I * t 1 1m t1 t1 t1

11.2.1.- 1& 1 49641451 30Z51 124ff1 14410 I 1 I169 762 1 271 3211 t 1 41 411 1.2.2.-lleir 1 94541 6596271 164471 4122 66 329113 9 62f43 1 *í t1 41

1 2r- 19UVISIO 1 218 961 21990 1 o t 1521681 1921681 t 206 219 1 2 216 2 11

1 2.1.- I1tLtttiT 5 01 4 1 41 1191341 lí 11911 4 1 2062191 206211 41"21. flUAI 1 01 #I 1 li u1 liR1 01 M 1 2 11 $1

1 2.1.1r-l0O 1 1 1 t1 97563 1 97t51 t1 145143 451431 11 2.1.2.- kira 1 1 t 1 3 4711 3 4711 U t1 61476 1 61 476 41

1 2.2.-OIITIO0N 1 219901 21890 t C 74 11 74 1341 41 41t 4 41

1 2.2.1.-ua-a - 1 1859791 15S791 t1 576 t1 5764 31 *1 41 41 *11 2.2.2.- kira 32191 3211 45 * 16491. 1649111 *I 41 *1 41|_^@1 t St -Itr-1-i- t-1- - - -1 lP1E CT SIS : 562-9151 47139401 199151 44127391 3265n1 747217m 36432041 209061 OM3:9|

PicCmtinqi 561295- 474351 s 9101 412741 324241 7lMI 364321 2955911 6897311 picsE,ala ti 1 9513 715921t 149 351 1 1911:1 482 97 11 111775 5t6 4911 0t 371 1131141

1 TUL F WaJSS 1 7116 131 1 5 P 952 1 2!& 2i1 5 415 92Z 4069 O 946 9 1 4 55 1 t 3694M1 02471

1 3rT1 1N 30I Z*0W t1 tt 1t 3%4 1 1 3 00 1 3044 t1 41

TOTAL 1 7466181 6291321 1236251 5 95241 441M12 9469421 41154M1 3947511 9524711 1---1 t t tt

lMIEi .C.C.1. ad Trw #4 IncliÉd

- 101 -

ANNEX 8

MOZAMBIQUE

URBAN REHABILITATION PROJECT

ECONOMIC ANALYSIS

1. The overall Economic Rate of Return (ERR) for those componenta forwhich it could be measured, representing ;:ome 70% of total project cost, isapproximately 39% Tnese componenta, which consist primarily ofi.ifrastructure and shelter rehabilitation, are described below. Items forwhich the ERR was not calculated include emergency erosion oontrol (basecost US$2.5 million), solid waste management (base cost US$4.1 million),lines of credit (base cost US$4.9 million), institutional development (basecost US$3.4 million) and project management (base cost US$3.1 million).The benefits for these items are not easily quantifiable, although therewould clearly be benefits to infrastructure and amenities from erosioncontrol, to health and environ=ent from municipal servíces and toproductive employment from the lines of credit.

Infrastructure Rehabilitation

2. The following ERRs are estimated for the main project cowponents:

CostComponent (US$ million) ERRa (%)

Maputo Road Rehabilitation (a) 6.99 85%Maputo Drainage (b) 0.94 20%Maputo Costa do Sol Bridge (a) 0.66 28%Beira Road Rehabilitation (a) 3.45 52%Maputo Water Rehabilitation (c) 8.44 20%Beira Water Rehabilitation 6.13 15%

Total: 26.61 Average 38%

Notes:

(a) For methodology, see "Draft Engineering and Economic FeasibilityReport", February 1988, Roughton and Partners.

(b) For methodology, see "Drainage Praca 16 Junho, preliminarydesign, April 1988, DHV.

(c) For mrthodology see "Inception Report", January 1988, Sír M.MacDonald and Partners.

- 102 -

ANNZX e

Housina Rqhabilitatlon

3. Th- following ERRa are *stimat-d for the main project componente:

CostComponent (US$ million) ERR M

BuElding Reh-bilítation and 13.51 732Completion (a)

Sites and Services 9.72 182

Total: 23.23 402

(a) For methodology see Bratex report on rehabilitation andcompletior of buildings.

AF6INJune, 1988

- 103 -

ANNEX 9

MOZAHBIQUE

URBAN REHABILITATION PROJECT

ESTIMATED DIRECT SKILLED AND UNSKILLED EMPLOYWENT GENERATED

BY PROJECT IN CONSTRUCTION INDUSTRY

Total Comt Total Labor SaiaryProi ct Com~Ontnts USI Hl?Iion % Labor US HMililon US/IMo. Man-Monthu Man-Y*9rs

1. Infrastructura RehabilItation 81.88 18X 5.0 46 140,000 11,700

I1. Houmins Rehabilit.ation 28.28 221 5.10 »0 102,000 8,500

III. Municipal S.rvic. Support 4.11 16 0.00 40 16,000 1,801

IV. Llno of Cr dit 4.90 201 1.00 40 24.500 2,0

Sub-Total: ô8.67 19% 12.8 281,S00 28,610

V. Indirect E.ployment 11 700(at 5% of Dlr.ct EL-,:Oyunt)

lotal: 85,200

AF0INJune, 1988

l

M{AP SECTION

q ,<", F » , {~/ \ ~640 42

-;1 « « / \ / f > t o Mocimboa da Praia

12,

MeCUbUri MOur l

war. ÓLrsoX{l~ ~ ~ un Cua<NIASn,X ê

Fingoe ~~~~~~~~~~~~~~~~~~~~~~~~-Mocambique

l M A L A W I t ,, A J t, MoMOI ue

16' olne r

-LILONGWEógA 240 \ B Ma Z IA

Hs° ARBAR 2u a a <)1

Z~ 1r M B A J W E

20ARENR O000 0KLE

VZsa O Z A M E W E U E7oungaberaK

\ t ) \~~~~N URBAN REHABILITATION PROJECTg 2 ) ~~~~~~Mambnon

/ r r ~~~~~~~~~~~~~~~~~~~~ ~~PRCtJECT CITIES

/ | j _ \ ~~~~~~~~~~~~~~~~~OTHER BANK SUPPORTED PROJECTS:

22° OVIbanculos // BEIRA CORRIDOR

_ /° Chicu~~~~~al.cuala INDUSTRIAL REHABIUITATION CREDIT ÁREA

/ X > fl % g ~~~~~~~~~~~~~PAVED ROADS

\ às \% X 57 ~~~~~~~~~~~~~------- PAVED ROADS. UNDER CONSTRUCTIOIN

\ \ G A ~Z A ) EARTH ROAOS\ > \ <_ \ _ -< ~~~~~~~~~~RAILWAVS{ 5 > * Q~~~~~~~~~~~~~~~TERNATIONAL AIRPORTS

% \ 1 ~~~~~~~~~~) t ~~~~ OTHER AIRPORTS

t F / @ i) INHAMBANE ~~~~~~~~~~RIVERS, PORTS

-24° Mss ngi( INHAMBANE SWAMPS24

> > > i / t3 ~~~~~~~~~~~~~~~~~~~~PROVINCE CAPITALS 4

SOU T H l,. hó ij / i NATIONAL CAPITALS

A F R I C A |4'!; :)QUscoPROVINCE BOUNDARIESMasudeO ~~~~~~~~~~~~~INTERNATIONAL BOUNDARIFS

X \ tAI-XAI

26 ( \ APT

SYAZ ILAN D.|MBABANEf rS s;dos SS-> f!^ O ° 10D 200 300 KILOMETERS

IBRD 209 15

M O Z A M B I O U EURBAN REHABILITATION AND

EMPLOYMENT GENERATION PROJECT4, BEIRA PROJECT SITES\ s

PROJECT:\ * Apartment buildings rehabilitated

\ z.L3 Housing sitos

Coastal protection works

EXISTING:

Rice and ot+iar intensivo lowground cultivation

Built-up arcas

Main roads

/NHA MIZA 11 Raliroad

Rivers

International boundarles

\ (~~~- N v e

V/HA M/ZUV f

*«-fb >|tg w , f ty /<; j» ; % t)\ v~~~~AIRPORT

ZAMBIA

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MAY 1988

IBRD 2091 6

T ZANIA M O Z A M B I O U E

ZAMPIA LAE& MÁLAW/ URBAN REHABILITATION ANDEMPLOYMENT GENERATION PROJECT

M-ALAWI _> ) MAPUTO PROJECT SITES

PROJECT:

Apartmont bulidings rehabftltat.d/) S ,fz ~~~~~~~~~~~~~~Housing sitos

.. 7 rL I Coastal protection works

June 16th circis

22 \ 22 EXISTING:

.PÓCDIA N Low int-nsity r.sidentíal/agricultural

SOUTHX y Intensivo cultivation

26 _? 26 1 - _ 1 BuilIt-up ar-as

Main roads

To Moamba and Swaziland RailroadsRlvers

International boundaries

Casta do sol1

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.~~~~~~~~~~~~~~~~~~~~f resetti ment)

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/0en/ MAn 19?8

MAY 1988