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Source: World Bank
23 April 1996

Project Name West Bank and Gaza-Municipal Infrastructure Development Project

Region Middle East and North Africa

Sector Urban Development

Project ID XOPA43339

Borrower The Palestine Liberation Organization for
the Benefit of the Executive Authority of
the Palestinian Council

Implementing Agency The Ministries of Local Government,
Transport and Works; the Municipalities
of Nablus, Jenin, Hebron, Rafah and Gaza
City; and the Palestinian Economic
Council for Development and
Reconstruction (PECDAR).

Environmental Category "B"

Date PID Prepared April 23, 1996

Appraisal February 1, 1996

Projected Board Date May 28, 1996

A. Background
Country and Sector Background

1. Historically, local governments have been the foundation of
Palestinian governance. They have also been key providers of public
goods and services in the West Bank and Gaza (WBG). However, years of
economic and political dislocation, the neglect of these institutions
and under-investment in the public sector have contributed significantly
to the present inadequate level of infrastructure and services, which
are now far below the levels in countries with comparable per capita
GNP. In many areas water quality is low; system losses are high; many
villages are unserved; and few municipalities have adequate wastewater
collection, treatment or disposal systems. The road network has
deteriorated to the point where, without immediate rehabilitation, past
investments may be completely lost. Some 50 percent of the roads in
Gaza are unpaved, and it is estimated that 40 percent of the road system
in the West Bank is below acceptable service levels. Given the
important role that municipalities play in infrastructure and service
delivery, these conditions cannot be significantly and sustainably
improved unless urgent attention is paid to rationalizing and
strengthening of the local government (LG) system.

B. Objective

2. The overall objectives of the proposed project are to continue the
thrusts began under the Emergency Rehabilitation Project to rehabilitate
basic, high-priority infrastructure and services, relieve critical
infrastructure bottlenecks, relieve unemployment and deliver wide-spread
benefits as quickly as possible. This project would also seek to
initiate institutional reform and capacity building in the LG sector
particularly by helping to clarify the legal and institutional
framework, reform the LG fiscal and financial system, and strengthen LG
management, maintenance and service delivery capacity.

C. Description

3. The proposed project would have two main parts. Part 'A', the
Infrastructure Rehabilitation and Improvement component, would support:
(i) the rehabilitation and improvement of vital high priority road,
water, wastewater and sanitation networks, systems, structures, plant
and facilities; (ii) the establishment of a maintenance program, (iii)
the establishment of an urban Upgrading program (basic infrastructure
and community facilities); and (iv) technical assistance and studies for
sub-project preparation and supervision. (Intervention in the water,
wastewater and sanitation sectors would be limited to the West Bank
since Gaza would be served by complementary Bank-supported project.)
Part B, the Local Government Development component, would help initiate
and support institutional, financial and managerial reforms in the local
government system. This would include support to the Ministry of Local
Government (MLG) to initiate studies, workshops and, in due course,
actions aimed at: (i) clearly defining and rationalizing the relative
roles and responsibilities of the various levels of government; and (ii)
developing an efficient, equitable and sustainable system of inter-
governmental revenue sharing. Also, this component would help support
the technical assistance, studies, training and equipment necessary for
preparing and implementing the proposed reforms. Supplementing the two
main components outlined above would be a third, a Managerial and
Incremental Operating Costs component (Part 'C') which would help
finance the establishment of essential project management and monitoring
capacity, including operating costs and critical vehicles, equipment,
materials and spares for implementing agencies.

D. Financing

4. The preliminary estimated total project cost is US$45 million which
would be financed by: an IDA Credit (from the Trust Fund for Gaza and
West Bank) of US$40 million; and US$5 million in local funding. This
financing plan has yet to be confirmed during negotiations. In order to
help support an emergency employment program, retroactive financing of
up to a maximum 20 percent of the credit amount has been provided for.


E. Sustainability

5. Through this project a start would be made on systemic reform and
building sustainable capacity at both local and central levels of
government. Several measures are contemplated. First, at the municipal
level, the project would help support steps to mobilize revenues on a
sustainable basis, improve cost recovery, and strengthen municipal
financial and asset management. Second, at the central level, the
project would help support steps to rationalize roles and
responsibilities; establish an efficient, equitable and sustainable
system of inter-governmental revenue sharing; strengthen LG investment
programming; and strengthen MLG's planning and policy making capability.
Third, sub-project selection criteria would include consideration of
recurrent cost implications, and would help eliminate sub-projects with
unsustainable future recurrent cost commitments.

F. Poverty Category

6. The project would support the Palestinian effort to alleviate
poverty, build institutional capacity, improve the environment, preserve
public assets and create an enabling environment for sustainable private
sector development. Specifically, in the short run, the infrastructure,
rehabilitation and improvement component and, within this, the
maintenance sub-program particularly, will generate a significant number
of lower skilled jobs at the municipal and village levels where poverty
is most widespread.

G. Environmental Aspects

7. Implementation of the proposed project would result in significant
improvements in the management of water and wastewater in the West Bank.
Because of past experiences, the project would not support construction
of new wastewater treatment plants or sludge disposal facilities prior
to a detailed environmental examination of the interventions in this
area. Rehabilitation of the road network would include improvements to
drainage, thus reducing flooding in municipalities and erosion; in
addition, the resulting efficiencies in travel operations would reduce
air pollution. Proposed activities to be supported under the project
would be subject to environmental screening and review process which
would be coordinated by the environmental specialist assigned to the
staff of PECDAR, in coordination with representatives of the
Environmental Planning Directorate of the Ministry of Planning and
International Cooperation and the Palestinian Department of Antiquities
of the Ministry of Tourism and Antiquities and IDA. Environmental
mitigation and monitoring measures would be included as appropriate.
The project presently is classified under environmental category B.

H. Project Benefits

8. The project would have a particularly positive impact on
employment: an estimated 3,500 man-years of direct employment in
construction would be created. Further, by helping to improve the
delivery of essential infrastructure services, the project would provide
other significant and widespread social and economic benefits.
Specifically, it would help: protect and conserve sensitive and limited
water resources, and reduce the losses due to network inadequacies and
inefficient utility operations; make a start in improving roads,
reducing traffic congestion, travel time, and vehicle operating costs;
and improve the general quality of life for broad segments of the
population. The project would also help rationalize and strengthen both
central and local institutions; mobilize local initiative and resources;
improve resource allocation and open up opportunities for private sector
participation and development through consulting, contracting, and
manufacturing inputs; and help lay the foundation for sustainable
development. The benefits would accrue to virtually all citizens of WBG
and particularly to low income families through increased employment
opportunities and construction.

Contact Point: Task Manager
Mr. Kingsley Robotham
The World Bank
West Bank And Gaza Resident Mission
Telephone No: (011 972) 2 5747151
Fax No: (011 972) 2 5747150

or

Mr. Suhail Jme'an
The World Bank
1818 H Street, N.W.
Washington D.C. 20433
Telephone No: (202) 473-2991
Fax No: (202) 477-0348

Note: This is information on an evolving project. Certain components
may not necessarily be included in the final project.




7 February 1996
Project Name West Bank and Gaza-Municipal...
Infrastructure Development Project


Region Middle East and North Africa

Sector Infrastructure

Project ID XOPA43339

Borrower The Palestine Liberation Organization
(PLO) for the Benefit of the
Palestinian
Authority (PA)


Implementing Agency The Ministries of Local Government,
Transport and Works; the
Municipalities of
Nablus, Jenin, Hebron, Rafah and Gaza
City; and the Palestinian Economic
Council
for Development and Reconstruction.


PID Date February 7, 1996

Appraisal Date 01/96

Board Date May 1996


Sector Background. Historically, local governments have been
the
foundation of Palestinian governance. They have also been key
providers of public goods and services in the West Bank and Gaza
(WBG). However, years of economic and political dislocation, the
neglect of these institutions and under-investment in the public
sector have contributed significantly to the present inadequate
level
of infrastructure and services, which are now far below the levels
in
countries with comparable per capita GNP. In many areas water
quality
is low; system losses are high; many villages are unserved; and few
municipalities have adequate wastewater collection, treatment or
disposal systems. The road network has deteriorated to the point
where, without immediate rehabilitation, past investments may be
completely lost. Some 50 percent of the roads in Gaza are unpaved,
and it is estimated that 40 percent of the road system in the West
Bank is below acceptable service levels. Given the important role
that municipalities play in infrastructure and service delivery,

these
conditions cannot be significantly and sustainably improved unless
urgent attention is paid to rationalizing and strengthening of the
local government (LG) system.


Project Objectives. The overall objectives of the proposed
project are to continue the thrusts began under the Emergency
Rehabilitation Project to rehabilitate basic, high-priority
infrastructure and services, relieve critical infrastructure
bottlenecks, relieve unemployment and deliver wide-spread benefits
as
quickly as possible. This project would also seek to initiate
institutional reform and capacity building in the LG sector
particularly by helping to clarify the legal and institutional
framework, reform the LG fiscal and financial system, and
strengthen
LG management, maintenance and service delivery capacity.


Project Description. The proposed project would have two main
parts. Part þAþ, the Infrastructure Rehabilitation and Improvement
component, would support: (i) the rehabilitation and improvement of
vital high priority road, water, wastewater and sanitation
networks,
systems, structures, plant and facilities; (ii) the establishment
of a
maintenance program, (iii) the establishment of an urban Upgrading
program (basic infrastructure and community facilities); and (iv)
technical assistance and studies for subproject preparation and
supervision. (Intervention in the water, wastewater and sanitation
sectors would be limited to the West Bank since Gaza would be
served
by complementary Bank-supported project.) Part þBþ, the Local
Government Development component, would help initiate and support
institutional, financial and managerial reforms in the local
government system. This would include support to the Ministry of
Local Government (MLG) to initiate studies, workshops and, in due
course, actions aimed at: (i) clearly defining and rationalizing

the
relative roles and responsibilities of the various levels of
government; and (ii) developing an efficient, equitable and
sustainable system of inter-governmental revenue sharing. Also,
this
component would help support the technical assistance, studies,
training and equipment necessary for preparing and implementing the
proposed reforms. Supplementing the two main components outlined
above would be a third, an Incremental Operating and Managerial
Costs
component (Part þCþ) which would help finance the establishment of
essential project management and monitoring capacity, including
operating costs and critical vehicles, equipment, materials and
spares
for implementing agencies.


Project Financing. The preliminary estimated total project
cost
is US$80 million which would be financed by: (a) an IDA Credit
(from
the Trust Fund for Gaza and West Bank) of US$20 million; (b)
cofinancing of about US$55 million; and (c) US$5 million in local
funding. This financing plan has yet to be confirmed.


Project Sustainability. Through this project a start would be
made on systemic reform and building sustainable capacity at both
local and central levels of government. Several measures are
contemplated. First, at the municipal level, the project would
help
support steps to mobilize revenues on a sustainable basis, improve
cost recovery, and strengthen municipal financial and asset
management. Second, at the central level, the project would help
support steps to rationalize roles and responsibilities; establish
an
efficient, equitable and sustainable system of inter-governmental
revenue sharing; strengthen LG investment programming; and
strengthen
MLGþs planning and policy making capability. Third, subproject
selection criteria would include consideration of recurrent cost
implications, and would help eliminate subprojects with
unsustainable
future recurrent cost commitments.


Program Objective Categories and Poverty Category. The
project
would support the Palestinian effort to alleviate poverty, build
institutional capacity, improve the environment, preserve public
assets and create an enabling environment for sustainable private
sector development. Specifically, in the short run, the
infrastructure, rehabilitation and improvement component and,
within
this, the maintenance sub-program particularly, will generate a
significant number of lower skilled jobs at the municipal and
village
levels where poverty is most widespread.


Environmental Aspects. Implementation of the proposed project
would result in significant improvements in the management of water
and wastewater in the West Bank. Because of past experiences, the
project would not support construction of new wastewater treatment
plants or sludge disposal facilities prior to a detailed
environmental
examination of the interventions in this area. Rehabilitation of
the
road network would include improvements to drainage, thus reducing
flooding in municipalities and erosion; in addition, the resulting
efficiencies in travel operations would reduce air pollution. All
activities would be subject to environmental review by the
environmental specialist in the Palestinian Environmental
Protection
Authority and IDA. Environmental mitigation and monitoring
measures
would be included as appropriate. The project presently is
classified
under environmental category B.


Benefits. The project would have a particularly positive
impact
on employment. Further, by helping to improve the delivery of
essential infrastructure services, the project would provide other
significant and widespread social and economic benefits.
Specifically, it would help: protect and conserve sensitive and
limited water resources, and reduce the losses due to network
inadequacies and inefficient utility operations; make a start in
improving roads, reducing traffic congestion, travel time, and
vehicle
operating costs; and improve the general quality of life for broad
segments of the population. The project would also help
rationalize
and strengthen both central and local institutions; mobilize local
initiative and resources; improve resource allocation and open up
opportunities for private sector participation and development
through
consulting, contracting, and manufacturing inputs; and help lay the
foundation for sustainable development. The benefits would accrue
to
virtually all citizens of WBG and particularly to low income

families.


Contact Point: Public Information Center
The World Bank
1818 H Street N.W.
Washington D.C. 20433
Telephone No.: (202)458-5454
Fax No.: (202)522-1500
________


Note: This is information on an evolving project. Certain
components
may not necessarily be included in the final project.


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