AMI 3 s a ,VZ - World Bank · 2016-07-09 · AMI 3 s a -/ ,VZ Report No. 8954-UNI STAFF APPRAISAL...

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AMI 3 s a / - ,VZReport No. 8954-UNI

STAFF APPRAISAL REPORT

FEDERAL REPUBLIC OF NIGERIA

NATIONAL WATER REHABILITATION PROJECT

APRIL 25, 1991

Infrastructure Operations DivisionCountry Department IVAfrica Region

Tb s document ha a reicted dJbutIo_ ad may be used by redpwsn oniy in the performee ofdther olc duies Its cents may no otbewise be dslosed Word Bank authorion.

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CURRENCY EQUIVALENTS(As of July 31, 1990)

Currency Unit Naira (N) = 100 Kobo (k)US$1 m N8.0Naira (N) = tS$0.122

MEASURES AND EQUIVALENTS

Metric System (SI Units)

ABBREVIATIONS AND ACRONYMS

DWSQC - Department of Water Supply and Quality ControlERR - Economic Rate of ReturnFCT - Federal Capital TerritoryFGN - Federal Government of NigeriaFMWR - Federal Ministry of Water Resourceslcd - liters per capita per dayNEPA - National Electric Power AuthorityNTCWR - National Technical Committee on Water ResourcesNWRP - National Water Rehabilitation ProjectNWRI - National Water Resources InstitutePMC - Project Management ConsultantRBDA - River Basin Development AuthorityRC - Regional ConsultantSOE - Statement of ExpendituresSWA - State Water Agency

FISCAL YEAR

January 1 - December 31

FOR OMCIAL USE ONLY



Table of Contents

Page No.

LOAN AND PROJECT SUMMARY .................... .......... . - ii

I. INTRODUCTION AND BACKGROUND .............................. 1

II. THE SECTOR. .... 1

A. Vater Resources . . .. 1B. Sector Organization.. .. 2C. State Water Agencies.. .. 3D. National Sector Institutions. . 3E. Levels of Service. . .. 4F. Manpower and Training .... 4G. Operation and Maintenance of Water Systems . . 5H. The Bank's Involvement in the Urban Water Supply

Sub-Sector .... 5I. Sector Strategy. ... 5J. Rationale for Bank Involvement . . . 6

1TI. THE PROJECT . .... . 6

A. Project Objectives . . ... 6B. Project Description ..... 6C. Project Implementation .. ... 7D. Project Costs and Financing ..... 9E. Financing Plan ..... 9F. Procurement ..... 10G. Disbursements ...................................... 12H. Project Accounting and Auditing ..... 14I. Project Monitoring and Supervision ..... 14J. Environmental Aspects ..... 14

IV. FINANCIAL ANALYSIS .. 15

A. Financial Performance of State Water Agencies .15B. Tariffs, Billing and Collection .17

This report is based on the findings of an appraisal mission which visitedNigeria in May 1990, comprising Mmes. Elaine Patterson (Mission Leader andSr. Financial Analyst) and Anita Artaza (Operations Assistant) and Messrs.David Henley (Sanitary Engineer), Uche Mbanefo (Sr. Financial Analyst),Iraj Talai (Consultant Economist) and Peter Ware (Consultant Engineer).Mr. Alfred Heron (Financial Advisor) was the peer reviewer for thefinancial aspects of the operation. Mmes. Dawn Jones, Mary Fisher andElizabeth Novatny provided secretarial support in the preparation of the%report. Mr. James Wright, Jr. and Mr. Edwin Lim are the managing DivisionChief and the Department Director, respectively for the operation.

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

V. ECONOMIC ANALYSIS ................ .. ....................... 18

A. Project Justification and Benefits ......... ........... 18B. Poverty Xmpact ................................................... isC. Economic Rate of Return ... .. *................. ... 19D. Project Risks ................................................. 19

VI. AGREEMENTS REACHED AND RECOMMENDATION ..................... 20

A. Agreements Reached .......... .. ....................... 20B. Conditions of Loan Effectiveness *................... 20C. Conditions of Disbursement ........................... 21D. Recommendation ........... ...................................... 21

ANNEXES

3-1 List of Investments Eligible for Financing3-2 Description of a Typical Sub-project (Gongola State)3-3 Manpower and Training3-4 Project Management Consultancy - Outline Terms of

Reference3-5 Criteria of State Eligibility for Sub-Loans3-6 Sample Letter of Commitment (Benue State)3-7 Implementation Schedule3-8 Project Cost Profile3-9 Loan Disbursement Profile3-10 State Water Agency Performance Indicators3-11 Supervision Plan

4-1 State Water Agencies - Analysis of Operating Cash Flows4-2 Water Tariffs

5-1 Economic Analysis

6-1 Documents Available in the Project File

Mapt IBRD No. 20709R

PEDERAL REPUBLIC OF NIGERIA

NATIONAL WATER REA2BILITATION PROJECT

LOAN AND PROJECT SUMMARY

Borrowers Federal Government of Nigeria (VON)

Beneficiaries: Federal Ministry of Water Resources (PMWR) andWater Agencies (SWAs) of State Governments andthe Federal Capital Territory (FCT)

Amounts US$256 million equivalent

Term8s Twenty years, including a five-year grace period,at the Bank's standard variable interest rate.

Onlending Tenms: The Federal Government of Nigeria will onlend upto US$220 million to participating states at thestandard IBRD variable interest rate. Maturitiesand grace period would be the same as applicableto the IBRD loan. Participating stategovernments and the Federal Capital Territorywould bear the foreign exchange risk.

Project Descriptions The National Water Rehabilitation Project willprovide a source of credit to finance state levelsub-projects to address the highest priorityrehabilitation needs of urban water supplysystems. Sub-projects will focus onrehabilitating existing facilities, leakagedetection and repair and institutionalstrengthening to improve operation andmaintenance as well as financial, personnel andstores management of the participating SWAs. TheProject would also support measures to strengthenthe PMWR to fulfill its role as an advisory andcoordinating agency for the water supply sector.

Proiect Benefits and By increasing the supply of potable water, theRisks: Project will have a positive impact on the

quality of life of the population in a largenumber of urban and semi-urban centers throughoutNigeria. Institutional strengthening will enablethe SWAs to sustain the higher level of watersupply service achieved after rehabilitating thesystems, and it will also reduce the SWAs'dependence on state governments for recurrentoperating subvention. Project risks relateprimarily to FMWR's ability to manage anoperation of this size and to the stategovernments' ability and covditment to provideadequate counterpart funds to support their sub-projects and to comply with the Bank's

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procurement guidelines. The role andresponsibilities of a project managementconsultant, to assist PMWR in administering theProject, have been carefully defined to minjj zethe risks associated with project management andprocurement. Participating states will authorizededuction at source from the Federation Accountof their counterpart fund contributions.

Economic Rate of Returns 22Z (for a sample of 5 sub-projects)

Maps IBRD No. 20709R

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X of TotalEstimated Project Cost: a/ Local ForeiRn Total Base Costs

------- US$ Million------

Equipment and Materials 23.0 70.6 93.6 47

Civil and Building Works 16.5 36.7 53.2 26

Operational Support 1.0 16.9 17.9 9

Project Management 0.9 5.2 6.1 3

Engineering, Studies andTechnical Assistance 9.6 20.1 29.7 1S

Refinancing of PPF Advance - 0.4 0.4 -

Total Base Costs 51.0 149.9 200.9 100Physical Contingencies 7.3 20.9 28.2Price Contingencies 19.4 41.7 61.1

Subtotal 77.7 212.5 290.2

Duties 16.5 - 16.5

Total Costs 94.2 212.5 306.7

Financing Plan:

State Governments 38.8 bl - 38.8 13FGN 7.4 - 7.4 2Government of Japan 0.5 4.0 4.5 1IBRD 47.5 208.5 256.0 84

Total 94.2 212.5 306.7 100

Estimated Disbursements:

IBRD Fiscal Year 92 93 94 95 96 97 98 99-------------------…US$ millionn--------------------

Annual 8.7 24.1 45.0 56.5 50.9 38.3 23.3 9.2Cumulative 8.7 32.8 77.8 134.3 185.2 223.5 246.8 256.0

a/ Columns may not add due to rounding.

bl Of this amount, an estimated US$16.5 million equivalent is for dutiesand taxes.


NATIONAL WATER REBILITATION PROJECT

I. INTRODUCTION AND BACKGROUND

1.01 With a population of around 117 million, Nigeria is the mostpopulous country in Africa. The form of government is a federationcomprising 21 states plus the Federal Capital Territory (FCT) of Abuja.Under the Constitution, provision of potable vater supply is theresponsibility of the state governments. Within each state, responsibilityfor providing potable water in urban and semi-urban areas is usuallyassigned to a water board or corporation.

1.02 Over the last ten years, the states have made substantialinvestments in water supply infrastructure. However, the absence of amaintenance culture coupled with economic constraints has led to severedeterioration of even relatively new systems. The recent depreciation ofthe Naira relative to other world currencies has resulted in difficultiesin servicing foreign loans for water supply projects incurred before thedevaluation, in implementing new projects, and in importing the necessaryspare parts and replacement equipment to keep existing public water supplysystems in good order.

1.03 A study (the lNationwide Study") was carried out in 1987 onbehalf of the then Federal Department of Water Resources to assess thescope of the need for rehabilitation of urban water supply worksnationwide 1/. This study concluded that the total cost of rehabilitatingall existing urban and semi-urban systems, together with technicalassistance to improve manpower planning and development as well asfinancial management, would amount to about US$814 million (at December1987 prices). The Federal Government of Nigeria (FGN) has requested IBRD'sassistance to undertake an operation to support a program forrehabilitating selected water supply systems throughout the Federation.

II. THE SECTOR

A. Water Resources

2.01 Nigeria is located between latitudes 4°N and 13°N and has anarea of approximately 925,000 km2. The climate varies between semi-arid inthe north and humld in the south. In the north, the terrain is flat withsparse natural vegetation; across the center, there are hills and graniteoutcrops with savannah type vegetation; in the south, the terrain is

11 Nationwide Water SuPglV and Sanitation Rehabilitation Study -Final Report, Diyam Consultants in association with Binnis andPartners and British Water International, 1988.

generally flat with tropical forest vegetation. Average rainfall over thecountry ranges from about 500 am/year in the northern areas to over 2,000mn/year in the south. Most rainfall occurs in wvel defined rainy seasonsof four to five months (tMay - September) in the north and six to sevenmonths (April - October) in the south and is typically concentrated instorms with high intensity rainfall and runoff rates.

2.02 The main rivers (Benue and Niger) and their major tributariesare perennial, as are other rivers in the south of the country. Somerivers in the northern states draining into the Benue/Niger system and intothe Chad Basin are seasonal, and often do not have any significant flow inyears of low rainfall. In these northern areas the exploitation of surfacewater for water supply and irrigation relies on the construction ofimpounding reservoirs. Because of the prevailing high temperatures,evaporation losses are high. In the central and southern areas of thecountry, major perennial rivers are frequently exploited for water supplyby direct abstraction. The wide variations in rates of flow and waterlevel, and the meandering low flow channels in many places, tend toincrease the costs of construction of water intake works. High intensityrainstorms cause soil erosion, and the resulting highly turbid waterresults in high treatment costs. Use of surface water for drinking watersupply always requizes full treatment which usually includes clarification,rapid sand filtration and disinfection.

2.03 Parts of the country are underlain by sedimentary depositscontaining aquifers, which are tapped by boreholes for water supply. Someof these are capable of sustaining high yields, although over-abstractionin places is causing water levels to decline. Crystalline rock formationsoccur in other parts of the country and fracture zones in these formationscan be exploited by boreholes with relatively low yields suitable for ruraland semi-urban supplies. Although some of the larger towns and cities havebeen supplied from boreholes in the past, most major cities will bedependent on surface water sources, possibly supplemented by groundwater,within the next few years. Groundwater usually requires only disinfection;however, in some places, groundwater is very corrosive and has a high ironcontent, necessitating additional treatment.

B. Sector Organization

2.04 Under Nigeria's federal system of government, the 21 individualstates (IBRD Map No. 20709R) have the primary responsibility for thedevelopment of water supplies in both urban and rural areas. However, theFederal Government through the Federal Ministry of Water Resources (FMW)is responsible for national and international aspects of water resourceallocation and for approving large water resource development projects.PMWR oversees the activities of the 11 River Basin Development Authorities(RBDAs), created in 1976 by Federal Decree (as amended in River BasinDevelopment Authorities Decree 1987 No. 35), and is responsible for theplanning and development of water resources at the national level.

C. State Water ARencles

2.05 In each of the 21 states and the FCT, responsibility for allpotable water supply is assigned either to a state water board orcorporation or to a public utilities board which is also responsible forrural electrification. State water agencies (SWAs) have, however, for themost part concentrated on urban snd semi-urban areas. Each SWA iscontrolled by a Board comprising a number of members appointed by the stategovernment, one of whom is designated chairman, and a number of ex-officiomembers designated by title (e.g.. Commissioner, State Ministry ofFinance). The chief executive is normally given the title of GeneralManager and is usually a professionally qualified engineer.

2.06 The SWAs are responsible to their state governments, generallythrough the Ministries of Worics or Water Resources, although in a fewstates they report through a Commissioner for Parastatals or Special Dutiesor other special assistant to the Military Governor. The SWAs have, ingeneral, been established under well conceived legislation to develop andmanage water supply facilities within their respective states, and to meetsound financial objectives. However, all SWAs depend on subvention fromthe state government to cover at least part of their recurrent operatingcosts. In addition, all SWAs are dependent on funds for any major newconstruction work, either from state government sources or from externallending agencies channeled through the state government system. Thus, mostSWAs have little autonomy to decide on vital policy matters affecting theirfinancial position, such as staffing levels, staff compensation, tariffsand procurement.

D. National Sector Institutions

2.07 The Federal Minist r of Water Resources (FMWR) is the technicaland professional arm of the Federal Government that advises on all aspectsof water resources development in Nigeria. It has eight departments, eachof which is headed by a Directors (i) hydrology and hydrogeology; (ii)irrigation and drainage; (iii) water supply and quality control; (iv) damsand reservoirs; (v) flood and erosion control; (vi) planning, research andstatistics; (vii) finance and supplies; and (viii) personnel management.The Department of Water Supply and Quality Control (DWSQC) has beenestablished to carry out advisory and monitoring functions in connectionwith water supply, sanitation and water quality control.

2.08 FMWR is responsible for overseeing the 11 RBD&s and the NationalWater Resources Institute in Kaduna. It is also responsible for monitoringboth the hydrological networks throughout the country and water useactivities of SWAs, the National Electric Power Authority (NEPA), theInland Waterway and others.

2.09 The National-Technical Committee on Water Resources (NTCWR) isthe main link between organizations involved in water resources developmentand urban water supply. The Committee which meets about four times a year,is chaired by the Director General of the FMWR and members of the Committeeare representatives of SWAs, RBDAs, NEPA, Nigerian universities with waterresources facilities, the meteorological services, Inland WaterwaysDepartment and the Nigerian Society of Engineers. Inputs to the NTCWR are

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provided by five working level sub-committees, namelys irrigation anddrainage; manpower development; hydrology and hydrogeology; water supplyand sanitations and dame. The NTCWR advises the National Council on WaterResources, which is chaired by the Minister of Water Resources.

2.10 The River Basin Develooment Authorities (RBDAs) were establishedduring the 1970s to develop water resources for multi-purpose use withintheir respective river catchment areas and to enhance agriculturalproduction. In 1985, the Federal Government decided that the role of theRBDAs would be limited to water resource development and irrigation works.RBDAs are also responsible for the collection of relevant hydrological,hydrogeological and meteorological data. The main involvement of the RBDAsin the water supply sector has been the construction of multi-purpose damswhich provide water for irrigation as well as for some of the major urbanwater systems.

2.11 The National Water Resources Institute (NWRI), which is underthe direction of FMWR, was established to train middle level manpowerinvolved in the fields of water resources development, irrigation, watersupply and related activities. The qualifications conferred by theInstitute are recognized by the education authorities of Nigeria. Thecurricula of the Institute should be designed to satisfy an increasing needfor training in practical skills at the middle management level.

E. Levels of Service

2.12 Although accurate data are not available, it is clear fromobservation of the areas receiving piped water and from inspection of worksin operation, that most of the existing urban water supply systems are notcapable of meeting normally accepted requirements. Due to failure ofpumps, generators or other equipment, fewer than 10 percent of all watersupply systems are reported to be capable of operating at their designcapacities. In addition, the output of some systems is limited by fuelshortages as a result of insufficient funds. In general, it appears thatthe average piped water supply to urban and semi-urban populations is inthe range of 10-40 lcd. Many semi-urban communities do not have access toany public water supply. It is estimated that only aboutt 50? of the urbanand semi-urban population have access to reliable water supplies ofacceptable quality.

F. Manpower and Training

2.13 In the aggregate, the SWAs account for employment of some 25,000staff nationwide. In general, the staffing patterns of SWAs arecharacterized by too many low level staff with minimal or no qualifications(high rates of illiteracy in these cadres are reported In some states), andtoo few technically or professionally qualified persomnel. There is a lowlevel of management awareness on the part of midile and higher management,with little emphasis on management training for technical specialists whoenter and move up the management ranks. Many of the staff who areacademically well qualified have not had the opportunity to gain workexperience in a supervised professional environment and may, therefore, beunable to provide appropriate technical support to the SWAs. Thesupervisory skills of line managers are often weak, with significant impact

on operating practices and the state of maintenance of water supplyfacilities.

2.14 Urgent review of staffing profiles and training needs isrequired in most SWAs to define where staff need to be recruited orretrained, and where shedding of unskilled and unqualified staff isrequired to improve SWA management, supervision and operation andmaintenance efficiency. In addition, state governments need to free SWAsfrom civil service regulations regarding staff grading, promotion andremuneration to enable them to compete effectively in the open market inrecruiting qualified, experienced and skilled staff for management,supervision and technical duties.

G. Operation and Maintenance of Water Systems

2.15 Most water treatment works are unreliable due to frequentfailures of mechanical and electrical equipment. The quality of waterdelivered to consumers is, in most cases, unlikely to comply with WorldHealth Organization (WHO) guidelines, although sampling and testing areseldom carried out to determine actual water quality. The performance ofwater supply works and systems operated by SWAs is generally unsatisfactoryresulting in inadequate supplies and in many cases, a poor quality product,for which consumers are reluctant to pay. This is the result of inadequateresources in terms of finance, personnel and equipment, as well as poormanagement.

H. The Bank's Involvement in the Urban Water Supply Sub-Sector

2.16 Past assistance by the World Bank to the SWAs has been mainlydirected toward the provision of funding for major new water supplysystems, usually for state capitals, and associated technical assistancefor project planning and institution strengthening. The Bank has beeninvolved in lending for four major urban water supply projects, three ofwhich, Anambra, Borno and Lagos, are in the process of execution and one ofwhich, Kaduna, has been completed. Lessons learned frcm the Kaduna WaterSupply Project (PCR No. 8961), particularly with respect to the need toinsure a reliable flow of counterpart funds, to clearly define technicalassistance needs and to provide support for programs to reduce unaccountedfor water, have been taken into account in designing the Project.

I. Sector Stratezy

2.17 In common with most sectors of Nigeria's economy, the imediateneeds in the water supply and sanitation sector, particularly in urban andsemi-urban areas, are the rehabilitation of existing systems and associatedimprovements in operation and maintenance arrangements. These measureswould inevitably provide the highest economic return. Rehabilitation wouldlogically be followed by programs of carefully planned expansion andimprovement of existing systems, to provide acceptable levels of service toa rapidly increasing population. Such programs, if accompanied byeffective Institutional strengthening and revenue collection improvements,would enable higher levels of service to be sustained in the longer term.The proposed project would be the first in a series of operations in linewith the sector strategy to rehabilitate existing systems and provide for

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institutional improvements. This operation, which targets a comparativelylarge area, would be complemented by multi-state operations which are ableto deal in greater depth with institutional reforms.

J. Rationale for Bank Involvement

2.18 The ability to provide an adequate supply of safe water ataffordable rates is essential to maintaining an acceptable standard ofliving for the population. In addition, provision of reliable publicinfrastructure and services is fundamental to economic and industrialdevelopment. SWAs are responsible for all large public water supplies inNigeria, and, therefore, have a pervasive impact on human well-being andeconomic development in general. Because the provision of potable watersupply is a state-level responsibility in Nigeria, there are as manyvariations as there are states. However, the most severe sector problemsrecur in varying degrees throughout most, if not all, states. Thaexperience gained on previous state-specific water supply projects (para2.16) can be generalized to address sector issues on a broader basis. Inthe medium term, through its sector lending operations, the Bank willencourage commercialization of the SWAs, as well as improved operationalefficiency and rational investment planning. In addition, through itscontacts with other donor agencies, the Bank can assist in mobilizing andcoordinating support from the donor community.

_II. THE PROJECT

A. Proiect Obiectives

3.01 The National Water Rehabilitation Project (NWRP) will provide amechanism for financing sub-projects in individual states. The objectiveof each sub-project will be to improve the level of water supply service inselected urban and semi-urban areas by meeting the highest priorityrehabilitation needs. Another major objective is to begin to address themost significant institutional weaknesses of the SWAs in order to improvetheir capability to efficiently operate and maintain water supply systems.

D. Proiect Descrintion

3.02 Under the auspices of FMWR (para 3.04), the Project will providea source of financing for the highest priority rehabilitation needs ofstate water supply systems. Each of the 21 states and the FCT are eligibleto apply for a sub-loan of up to US$10 million equivalent for this purpose.The physical components of each sub-project will focus on rehabilitatingexisting facilities by repair or replacement of civil works, plant andequipment with the objective of restoring the output of water supplysystems to their original design capacities, wherever possible. Neitherexpansion of existing systems nor construction of new systems will beeligible for financing. A proposed list of investments eligible forfinancing under NWRP was agreed during loan negotiations (para 6.01 (a)),sad is presented in Annex 3-1. In addition to the physical rehabilitationcomponents, in order to sustain the physical improvements realized underthe program, each state sub-project would comprise a leakage detection and

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repair program and institutional strengthening components to improveoperation and maintenance, financial management, staffing and storesmanagement of the participating SWAs. A description of a typical sub-project for Gongola State is presented in Annex 3-2.

3.03 To provide better support to the SWAs, the Project will Alsoinclude a component for strengthening the Department of Water Supt andQuality Control (DWSQC) of PMWR. This component would comprise:

(a) developing policy guidelines for design and maintenance of watersupply systems, water quality standards, equipmentstandardization, standards for water treatment chemicals,improved tariff structures and cost recovery, and manpowerdevelopment;

(b) establishing and maintaining a data base to monitor keyperformance indicators of SWAs;

(c) establishing and maintaining a water resources and water qualitydata base for both surface and groundwater sources used fordomestic and industrial purposes;

(d) identifying the most critical training needs in the sector andassessing the capability of local training institutions to meetthose needs (Annex 3-3); and

(e) carrying out special studies of general interest to the sector,such as pollution and water quality studies, review of tariffstructures, fixed assets valuations, etc.

C. Project Implementation

3.04 FMWR, through DWSQC, will be responsible for projectimplementation. Since project implementation is not a recurrent functionof DWSQC, FMWR has appointed a Project Management Consultant (PMC) to actas its agent to manage project implementation. This will involve fourmajor areas of activity: (i) overall management of the Project; (ii)monitoring sub-project implementation; (iii) institutional development ofparticipating SWAs; and (iv) support to FMWR to enable DWSQC to moreeffectively fulfill its role in providing sector policy advice to PGN andtechnical advice and guidelines to the SWAs. The PMC will also beresponsible for day-to-day operation of a Special Account (para 3.17) andmaintaining project accounting records (para 3.18). The overall success ofNWRP is heavily dependent on the performance of the PMC, whose outlineterms of reference are presented in Annex 3-4. Staff from FMWR will beseconded to the PMC to be trained in the various areas of projectmanagement. Counterpart staff will be assigned to the PMC as soon as PMC'smobilization is complete; such assignment will be a condition of loaneffectiveness (para 6.02 (a)).

3.05 The states through their SWAs will be responsible forimplementing sub-projects financed under NWRP. Although in principle all21 states and FCT are eligible to participate, in order to qualify for asub-loan, each state/SWA must enter into a sub-loan agreement which

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confirms its commitment to carry out programs of operational andinstitutional reforms and annual tariff increases (pars 4.03). Proposedconditions for state participation in NWRP were atroed during loannegotiations (pars 6.01 (a)) and are outlined in Annex 3-5.

3.06 Engineering consultants working under the direction of FMR haveassisted the states to identify suitable components for funding under theguideline that funds would be used to bring maximum benefits to the mostpeople (para 3.10). This sub-project identification in the field has beencompleted and the resulting reports reviewed during pre-appraisal andappraisal. In order to further assist the states in preparing sub-projects, FMWR will appoint up to seven Regional Consultants (RCs) tos (i)carry out detailed engineering design for identified sub-projects; (ii)prepare procurement documents; (lit) provide site supervision forrehabilitation works; (iv) prepare and supervise leakage detection programsfor water supply systems which are being rehabilitated; (v) prepare aprogram for safety inspection and environmental assessment of all dams andreservoirs involved in the sub-projects; and (vi) provide assistance inimplementing improved stores management procedures. Each RC will work inup to three states. All proposals for the regional engineeringconsultancies ".ave been received and are being evaluated. PMWR's signingof at least two of the contracts with Regional Consultants will be acondition of loan effectiveness (para 6.02 (b)).

3.07 States' participation in NWRP is voluntary. All 21 states andPCT have now submitted formal letters of commitment, a sample of which isincluded as Annex 3-6, indicating their interest in participating and theirendorsement of the Project's objectives.

3.08 Each participating state will be eligible for a sub-loan of upto US$10 million equivalent. If, however, some states should choose not toparticipate in NWRP, any loan funds which remain unallocated as of January1, 1994, will be re-allocated to states which make appropriate requests andwhich have: (i) committed 75 percent of the funds allocated; (ii) made allrequired counterpart fund payments; (iii) achieved an acceptable level ofcoverage of cash operating costs out of internally generated revenues 2/;and (iv) undertaken effective leakage detection and repair programs. Eachstate may qualify for an additional allocation of up to US$10 millionequivalent if sufficient funds are available. During negotiationsagreement was reached that by December 31, 1991, FMWR will inform theparticipating states of the specific evaluation criteria that will be usedto determine their eligibility for additional funding (para 6.01 (b)).These criteria would have been discussed and agreed in advance with theBank. To ensure adequate time for implementing approved sub-projects,during negotiations it was also aLreed that June 30, 1994 would be theterminal date for approval of sub-loans under NWRP (para 6.01(c)).

3.09 Annex 3-7 presents the project implementation program for NWRP.Sub-projects to be initially funded, are scheduled for completion by

2/ Since cost recovery levels vary widely from state to state,acceptable levels will be evaluated on a case by case basis.

December 31, 1996. Vhere states qualify for additional funding, these sub-projects are scheduled for completion by December 31, 1998. The proposedloan closing date is June 30, 1999.

D. Proiect Costs and Financing

3.10 The total cost of the FMWR component and all state level sub-projects is estimated at US$290.2 million equivalent, exclusive of customsduties and taxes, of which the foreign exchange component is US$212.5million (73? of the total). Utilizing groat financing provided by theOverseas Development Administration (ODA - U.K.), FM(R has appointed aconsultant to assist SWAs to identify sub-projects which could beconsidered for financing under NWRP. The consultant's field inspections ofthe components to be rehabilitated, and identification of further studiesrequired to select optimum rehabilitation methods, form a basis for thecost estimates which are based on July 1990 prices and exchange rates andinclude physical and price contingencies. Physical contingencies are basedon the followings rehabilitation and leakage detection and repair - 152;operational support, billing and collection - 102; project management andtraining - 5?. Price contingencies have been calculated as follows:

Local ForeignYear 2 a

July-December 1990 12.5 2.51991 - 1995 10.0 4.91996 - 1998 10.0 3.7

The project cost profile, presented in Annex 3-8, has been developed on theassumption that 15 states would qualify to undertake sub-projects to befunded initially under the project, and the remaining US$70 millionequivalent of IBRD loan funds would be allocated subsequently, based on theperformance of project states (para 3.08).

E. Financina Plan

3.11 An IBRD loan of US$256 million equivalent to FGN is proposed atthe Bank's standard variable interest rate for 20 years including fiveyears of grace with a commitment charge of 0.75?. Up to US$220 millionequivalent of the loan would be onlent to participating states for approvedsub-projects. During negotiations, agreement was reached that onlendingwould be on the same terms as the IBRD loan, and participating states wouldbear the foreign exchange risk (para 6.01(d)). There will be a sub-loanagreement between FGN and each participating state which will specifyconditions for state participation in NWRP. Signing of at least two sub-loan agreements will be a condition of effectiveness of the IBRD loan (para6.02 tc)). The Government of Japan has provided a grant of Yen 675 million(US$4.5 million equivalent) to assist with project management andpreparation of sub-projects for financing under NWRP.

w 10 .

Financing Plan(in US$ million equivalent)

Z ofLocal Foreign Total Total

State governments -counterpart funds 38.8 a/ -- 38.8 13

FGN - counterpart funds 7.4 -- 7.4 2Government of Japan 0.5 4.0 4.5 1IBRD 47.5 208.5 256.0 84

94.2 212.5 306.7 100

a/ Of this amount, an estimated US$16.5 million equivalent is forcustoms duties and taxes.

F. Procurement

3.12 Procurement of goods and services for the F MR-implementedcomponents will be the responsibility of FMWR, with assistance from PMC inpreparing requests for consultants' proposals and bidding documents and inevaluating proposals and bids. SWAs will be responsible for procurementrelated to individual state sub-projects, but all procurement will bereviewed by the PMC to ensure compliance with the World Bank guidelines.The PMC will prepare standard pre-qualification and bidding documents foruse by SWAs. Prior to their being issued to the SWAs, these standardprocurement documents will be reviewed for compliance with World BankGuidelines for procurement of goods and civil works. The RegionalConsultant will assist the SWAs in bid evaluation. The final bidevaluation report and recommendations for awards will be submitted to thePMC for review. Prior Bank review of advertisements, bidding documents,evaluations and recommendations for awards will be required for all FMWRand SWA implemented contracts above US$200,000 equivalent. Preliminaryestimates indicate that about 85 percent of procurement financed under NWRPwould be subject to prior Bank review. Projected procurement arrangementsare summarized in the table on page 11.

3.13 Rehabilitation works, which include civil works and items ofreplacement plant and equipment, will be grouped into procurement packagesby state and procured under international competitive bidding (ICB) usingstandard prequalification and bidding documents prepared in accordance withWorld Bank Guidelines. For contracts subject to ICB procedures, a domesticpreference of 15? or duties (whichever is less) will apply for theprocurement of goods. A preference of 7.52 will apply for civil workscontracts. Where ICB will not be practical, (i) goods costing not morethan US$25,000 equivalent per contract with an aggregate not to exceedUS$2,500,000 equivalent could be procured by local shopping by obtaining atleast three price quotations from reputable suppliers; and (ii) goodscosting not more than US$100,000 equivalent per contract with an aggregatenot to exceed US$9,500,000 equivalent could be procured by internationalshopping by obtaining at least three price quotations from reputablesuppliers from at least two different countries.

- 11 -

PROCUREMENT ARRANGEMENTS a/ hi(US$ million)

ICB LCE Other N.A. Total

Equipment and Materials(a) Water Treatment Systems 40.9 1.7 4.0 46.6

(34.9) (1.4) (3.4) (39.7)

(b) Pumping Plant 23.8 1.0 4.0 28.8(22.0) (0.9) (3.6) (26.5)

(c) Electrical Plant and 56.8 2.3 4.0 63.1Equipment (52.2) (2.1) (3.6) (57.9)

Civil and Building Works(a) Water Source Works 22.9 22.9

(18.9) (18.9)

(b) Leakage Repairs 25.2 25.2 50.4(22.7) (22.7) (45.4)

(c) Building Repairs 2.5 2.3 4.8(1.8) (1.7) (3.5)

Services(a) Project Management 7.8 7.8

(6.9) (6.9)

(b) Engineering and Leakage 36.7 36.7Detection (30.2) (30.2)

'c) Training 2.3 2.3(0.8) (0.8)

(d) Billing and Collection 1.4 1.4Improvements (1.4) (1.4)

(e) Studies and Project 0.6 0.6Preparation (0.6) (0.6)

Operational Support 19.4 5.0 24.4(19.0) (4.8) (23.8)

Refinancing of PPF Advance 0.4 0.41(0.4) (0.4)

Total 191.5 37.5 60.8 0.4 290.2(171.5) (33.6) (50.5) (0.4) (256.0)

______________________

a/ Figures in parentheses are the respective amounts financed by IBRD.bI Columns may not add due to rounding.

- 12 -

3.14 Some relatively small contracts, such as for leakage or buildingrepairs, supplying small lots of equipment, or operational support itemssuch as vehicles, tools and office equipment, will not be of interest toforeign contractors and suppliers not already established in Nigeria andmay be procured on the basis of local competitive bidding (LCB), locallyadvertised, and conducted in accordance with procedures satisfactory to theBank, including appropriate advertisement, public bid opening, and award tothe lowest evaluated responsive bidder based on evaluation criteriaspecified in the bid documents. Foreign contractors and suppliers, ifinterested, would not be precluded from participating. LCB will bepermitted only by those SWAs vhich have submitted documentation of thestate's procurement regulations in sufficient detail to enable the Bank toconfirm that the essential elements cited above are, in fact, present inlocal procurement practices. The first LCB document of each participatingSWA would be reviewed and cleared by the Bank before being released tobidders. Approximately 50 contracts would be awarded under LCB, with thevalue of individual contracts estimated at between US$100,000 and US$1million equivalent. The aggregate value of LCB for procurement of goods isexpected to be US$10 million and US$27.5 million equivalent for procurementof works, i.e., less than US$2 million equivalent per participating state.

3.15 Consultants for project management were appointed under advancedcontracting arrangements and in accordance with World Bank Guidelines forthe Use of Consultants. The amount of advanced contracting is US$7,000,000equivalent. Other consultancy contracts will be awarded in accordance withBank guidelines. Proposals for seven engineering services (RegionalConsultants) contracts (approximate value US$5 million each) are beingevaluated by FMWR with the assistance of the PMC.

3.16 Engineering consultants, working under the direction of FMWR,have assisted the states to identify components for funding under theproject. Regional consultants will carry out detailed surveys of therehabilitation needs of these components, study alternative options forrepairs and replacements and complete detailed designs and bid documents.It is envisaged that the works will be grouped into two or three largecontracts per state. However, only after part of this detailed work iscompleted, will it be possible to estimate the number, value or schedulingof these rehabilitation contracts.

G. Disbursements

3.17 The proposed IBRD loan would be disbursed over seven and a halfyears, on the following basist

- 13 -

Allocation and Disbursement of ILRD Loan

Category Amount X to Be DisbursedCUSS million) from IBRD Loan

1. Equipment and materials 130.0 10O1 of foreign and 60S of(including installation) local expenditures

2. Civil works 65.0 1002 of foreign and 602 oflocal expenditures

3. Consultants' services, 35.6 1002 of foreign and 402 oftraining, studies local expendituresand engineering

4. Refunding of project 0.4preparation advance

S. Unallocated 25.0

Total 256.0S=CW

Disbursements would be completed by June 30, 1999. The projectdisbursement profile is presented in Annex 3-9. Cost overruns includingany extra costs associated with extension of the implementation schedulewould be borne by the implementing agencies, FMWR or SWAs, or their stategovernments. A Special Account in foreign currency of US$10 millionequivalent (estimated to finance four months' eligible expenditures) willbe established in a commercial bank on terms and conditions acceptable toIBRD. The Special Account would be used for disbursements against alleligible expenditures and it will be replenishable on application by PMWR.All disbursements from the Special Account will be processed by the PMC andsigned by two authorized signatories from FMWR. Applications for thewithdrawal of IBRD loan proceeds to replenish the Special Account can onlybe authorized by the Minister of FMWR. Project Accounts in local currencywill be opened for FMWR and each participating SWA. Disbursements from theproject accounts for FMWR and the states would be processed by PMC with alldisbursements authorized by a designated official in FMWR. Disbursement ofthe IBRD loan would be fully documented except under contracts of less thanUS$50,000 equivalent which may be disbursed against Statements ofExpenditures (SOEs). Supporting documents for the SOEs would be retainedby FMWR for review during IBRD supervision missions. As conditions ofdisbursement for project states: (i) a sub-loan agreement must be enteredinto on terms and conditions satisfactory to the Bank; and (ii) for therehabilitation of water supply systems, a contract must be entered intothat adequately provides for a leakage detection and repair program (para6.03).

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H. Proiect Accountin_ and Auditini

3.18 The PMC will, on behalf of FMWR, establish separate accounts inaccordance with generally accepted accounting principles, to record allproject expenditures and to maintain records on commitments, reimbursementsand the status of project funds. During negotiations, agreement wasreached that, by June 30 each year, FMWR will submit to IBRD the financialstatements of the Special Account, Project Accounts and SOEs for thepreceding calendar year (para 6.01 (e)), audited by an independentaccountant acceptable to the Bank. Audited annual financial statements ofparticipating SWAs would be submitted to FMWR (para 4.06) by September 30of the following year.

I. Project Monitoring_and Supervision

3.19 Because of its broad geographic coverage and the large number ofagencies involved in sub-project implementation, NWRP will requireextensive supervision. Even with substantial inputs from the PMC inmonitoring procurement, sub-project implementation and operatingperformance of the participating SWAs (Annex 3-10), it is estimated thatthe Bank will have to provide approximately double the normal level ofsupervision required to monitor a specific investment water supply projectin a single state in Nigeria. The PMC will prepare comprehensive quarterlyprogress reports for review by FMWR and IBRD. The PMC will also organizeannual reviews of sub-project implementation in the form of aseminar/workshop to be attended by FMWR and all participating SWAs(Annex 3-4). IBRD participation in these annual reviews would be a majorelement of the project supervision plan (Annex 3-11). During negotiations,aareement was reached on the agenda, timing and format for a mid-termreview of project implementation (para 6.01(f)). The mid-term review wouldcover inter alia SWA performance as measured by the monitoring indicatorsas well as progress on physical implementation of sub-projects.

J. Environmental Aspects

3.20 While providing opportunities for improved health and hygiene,restoring the production and distribution capacities of the water supplysystems will also moderately increase the volumes of wastewater dischargedby domestic, commercial, institutional and industrial consumers. Althoughin some areas facilities for the disposal of wastewater are inadequate, nosignificant detrimental environmental impact is anticipated by thedischarge of these increased quantities. Since a large part of the countryis arid or semi-arid, much of the wastewater from bathing, washing clothesand cooking will infiltrate or evaporate; some will be discharged tonatural water courses by way of road side drains. No increase in otherwastes would result from the project, and there is, therefore, little riskof more seriouo pollution of surface or groundwater than at present. Thesecomments do not imply that the need for safe disposal of wastewater is inany way diminished. To the contrary, health aspects of living in urban andsemi-urban areas would be greatly enhanced by the provision of acceptablesanitation systems for all members of the community. Such programs wouldwarrant high priority in competition with other urban infrastructure needs.

- 15 -

3.21 Some of the water systems to be rehabilitated may be suppliedfrom existing dam and reservoir sources. Planning and engineering designof the works to be rehabilitated will be the responsibility of RegionalConsultants (para 3.06) whose terms of reference for these assignmentsinclude environmental assessments for those dams and reservoirs associatedwith works to be rehabilitated.

3.22 Regular inspection and maintenance of some of these dams andreservoirs have not been carried out in recent years due to lack of bothmanpower and financial resources. With resources made available under theProject, FMWR and SWAs have agreed to cause the dams and reservoirsassociated with water supply systems to be rehabilitated under NWRP andsuch other dams as FMWR or SWAs may designate, to be periodically inspectedand maintained in accordance with sound engineering practice, and underarrangements acceptable to the Bank, in order to determine whether thereare deficiencies in the condition of such structures, or in the quality andadequacy of maintenance or method of operation of the same which mayendanger their safety or constitute a risk to environmental health(Annex 3-5). Based on the findings of these inspections, FMWR and SWAsshall formulate and implement dam and reservoir maintenance programs,acceptable to the Bank, to ensure the safety of the structures on acontinuous basis and the environmental integrity of the reservoirs andtheir environments.

IV. FINANCIAL ANALYSIS

A. Financial Performance of State Water Agencies

4.01 Because of their status as parastatals wholly-owned by theirstate governments, the financial performance of SWAs, which has never beengood, has further worsened as a by-product of structural adjustment. SWAsno longer have preferential access to the foreign exchange needed tosupport their operations. The effect of exchange rate liberali:at4nn hasbeen particularly pronounced because water supply is a capital intensivesector, heavily dependent on imported equipment. Operation of large watersupply systems is also import intensive, as most supplies of watertreatment chemicals and spare parts are imported. Therefore, both capitaland operating costs have risen precipitously since 1986. Furthermore,because of the highly visible social impact of structural adjustment, stategovernments, the owners of the SWAs, are reluctant to compound thehardships already being suffered by the population by levying increasedcharges for water, even though the operating costs of SiAs have increaseddramatically. In addition, a long overdue increase in electricity tariffsfinally implemented in 1989 has resulted in a six- to twelve-fold(depending on the level of consumption) increase in the cost of powersupplied by NEPA to the SWAs.

4.02 Consequently, all SiAs are dependent on external financing forany major new construction work, whether from state government sources orfrom external lending agencies channeled through the Federal or stategovernment. In addition, SWAs depend on subvention from the stategovernments to cover at least part of their recurrent operating costs. As

- 16 -

a result, SWAs generally have little autonomy to decide on vital policymatters affecting their financial position, such as staffing levels, staffremuneration, tariff levels or procurement matters.

4.03 While all 21 states have indicated their commitment toparticipate in NWRP, at the time of appraisal (May 1990), only 12 SWAs wereable to provide consolidated accounts for 1988, and only nine of the 12 hadbeen audited. Although the information available is limited, and incomeand expenditure levels and composition (Annex 4-1) vary from state tostate, some very alarming patterns clearly emerge. In recent years, stategovernments have, on average, provided 40 to 50 percent of SWAs' operatingcash flows in the form of recurrent subvention. This dependency on stategovernments militates heavily against operational autonomy for the SWAs andcreates a tenuous situation where abrupt withdrawal of subvention couldcause water supply operations in major urban areas to collapse. One of theconditions for states to participate in NWRP is to implement a program ofphased tariff increases which would eliminate the need for recurrentsubvention within five years (Annex 3-5).

4.04 Whereas it might be argued that five years is too long and thattariff conditionality based only on operating cash flow considerations doesnot give sufficient regard to conceptually sound cost recovery principles,the enormous gap between the SWAs' current financial performance and theideal must be recognized and dealt with pragmatically. SWAs in Nigeria arecurrently living a very hand-to-mouth existence. The level of operationsand the amount of water supplied are limited not only by the poor physicalcondition of their systems, but also by the amount of cash available toSiAs to defray operating costs. It is, therefore, reasonable, perhaps evenambitious, that, in the first phase of financial recovery, SWAs concentrateon fully meeting cash operating costs through internally generatedrevenues.

4.05 On the expenditure side, personnel costs represent the largestsingle item of cash expenditure, accounting for anywhere from 25 to 70percent of total operating expenditures, with an average around 50 percent.Reducing personnel expenditures, or making them more efficient by employingfewer, but better qualified staff, will also be addressed under themanpower development component (Annex 3-3) of NWRP.

4.06 Improving financial management within the SWAs will bedifficult, if not impossible, unless the quality and timeliness offinancial information are considerably improved. For that reason,conditions for state participation in NWRP require maintenance of separateaccounts for water supply activities by those utilities boards whichprovide public services other than water supply and timely submission ofaudited annual financial statements of all SWAs' water supply accounts toFMWR (Annex 3-5).

4.07 SWA accounts often do not include either interest or capitalrepayments on foreign loans for new works or technical assistance,negotiated either by the Federal Ministry of Finance or state governments.Due to the continued depreciation of the Naira relative to other worldcurrencies, it is clearly beyond the SWAB' abilities to generate sufficientadditional income from consumers to cover all such costs in the short term.

- 17 -

As an initial step in recapitalizing the SWAs, it will be necessary forthese to continue to be met by subvention from general state revenues untilservice to consumers improves and more realistic charges can be made.However, in order that the overall financial position of SWAs can beassessed, such foreign loan payments and subventions should be included andclearly identified in the SWAs' accounts.

4.08 While most SWAs do make a provision for depreciation in theiraccounts (Annex 4-1), in most cases the amounts are meaningless, as fixedassets have generally not been revalued to reflect the actual replacementvalue in current Naira terms. If assets were properly revalued, it isestimated that depreciation might account for as much as 50 percent oftotal operating costs. Given the dire financial situation of the SWAs andthe virtual impossibility of their achieving full cost recovery in theshort term, a major program to revalue fixed assets is outside the scope ofNWRP and should be deferred until accounting systems have been sufficientlyimproved so that the revalued fixed asset data base can be maintained andappropriately updated.

B. Tariffs. Billing and Collection

4.09 Tariff structures and rates vary considerably from state tostate (Annex 4-2). Because of the political sensitivity of charging for aservice provided by the government, rates are reviewed infrequently andbear little relationship to the cost of providing service, with the resultthat the disparity between production costs and tariffs grows with thepassage of time. SWAs which participate in NWRP will, therefore, berequired to effect annual tariff adjustments (Annex 3-5) so that, onceacceptable tariff levels have been reached, SWAs can sustain cost recoveryby modest but regular tariff increases.

4.10 The SWAs' poor financial performance also stems from theirfailure to fully collect revenue which is due for service provided, as aresult of inefficient billing systems and procedures, inadequate consumerrecords, numerous illegal connections, nearly universal flat rate billing,and generally poor supervision of billing and collection staff. UnderNWRP, SWAs, with the assistance of local consultants, will be required toimplement efficient billing and collection systems (Annex 3-5). Whileincreased production and consumer metering will be encouraged and meterscould be financed under the Project (Annex 3-1), expanded consumer meteringwill be encouraged, but will not be required for participation in NWRP, asthis would greatly increase the complexity of sub-projects, would not beappropriate in some areas and may be beyond the operation and maintenancecapability of some SWAs.

4.11 The SWAs' inferior performance in providing a reliable supply ofwater in sufficient quantity also contributes significantly to poorcollection performance and leads to inadequate income generation to meetoperating costs and improve standards of maintenance and works operation.These, in turn, are followed by ever greater consumer resistance to payingassessed water tariffs. Unless the chain can be broken, the financialposition of most SWAs in respect of recurrent operating losses is unlikelyto improve. State governments will, therefore, need to continue to support

- 18 -

their SWAs by subvention until water supply services are seen to improve inquantity, quality and reliability.

V. ECONOMIC ANALYSIS

A. Project Justification and Benefits

5.01 NWRP is expected to have a positive impact on the quality oflife of the population in a large number of urban and semi-urban centersthroughout Nigeria. The Project would provide a source of financing toenable SWAs to address their highest priority, most urgently requiredrehabilitation needs. The definition of investments eligible for financingunder the Project (Annex 3-1) ensures a least-cost approach to restoringexisting urban and semi-urban water supply systems to their original designcapacity, as well as to improving the quality and reliability of watersupplied to consumers.

5.02 Direct project benefits, therefore, comprise increasing thequantity, quality and reliability of water supplied, thereby reducing watershortages and improving the SWAs' image and performance, a pre-requisite toeliciting consumer co-operation in paying for water supply (para 4.12).Indirect benefits include improved health profiles of the population servedby systems rehabilitated under the Project and reduced dependence on stategovernments to provide financial support to SWAs as a result of theinstitutional strengthening components of the sub-projects. Anotherindirect benefit would be reduction of those constraints on economicdevelopment in general, and industrial development in particular, usuallyascribed to inadequate public infrastructure.

B. Poverty Impact

5.03 Although up-to-date demographic data for Nigeria are generallyunavailable, there is no doubt that improving the overall availability ofpublic water supply Will have a noticeable beneficial impact on the qualityof life of all but those at the highest income levels, for whom the highcost of vendor-supplied water is not a major constraint. By eliminatingcertain anomalies in the economy, the Structural Adjustment Program hasresulted in a disproportionate reduction of the incones of urban dwellersrelative to their rural counterparts. Fifty percent of the urbanpopulation are estimated to fall within the poverty group. Therefore, thepoverty group in areas in which vater systems are to be rehabilitated,comprising 50 percent of the population of those areas, would benefit fromIWRP. The lower income segment of the urban population who use public tapswould receive maximum benefits from the rehabilitation works since waterquality, pressure, reliability and hours of service would all be improvedat no extra cost to these consumers and with considerably reduced relianceon the more expensive service by private vendors.

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C. Economic Rate of Return

5.04 The findings of the economic analysis are summarized inAnnex 5-1. The economic rate of return (ERR) was calculated for fiverepresentative state level sub-projects which had been identified at thetime of pre-appraisal and for which there were sufficient data to computean ERR. Using estimated tariffs as a proxy for economic benefits, the ERRwas calculated based on incremental costs and benefits. This is anextremely conservative approach which does not capture consumers' surplus,which is difficult to estimate based on the limited data available. Theoverall weighted average ERR for the five sub-projects is 22 percent.Sensitivity analysis to assess the downside risk indicates that ERR is mostsensitive to reduction in benefits (either incremental quantities of waterdistributed to consumers or lower than expected water tAriffs); a 10percent reduction in estimated benefits results in an ERR of 13 percent.ERR is less sensitive to increases in investment and operating costs.Increases of 10 percent in each of these result in ERRs of 19 and 16percent, respectively. Only in a worst-case scenario, where a 10 percentreduction in benefits is accompanied by a 10 percent increase in bothcapital and operating costs would the weighted average ERR decline to 6percent.

5.05 Given the type of operation that is proposed, these ERRcalculations cannot be considered conclusive, but serve to indicate thatthe nature of investments to be financed under NWRP are justified on aneconomic basis and will produce acceptable rates of return.

D. Project Risks

5.06 Although simple in concept, NWRP may be complicated by the largenumber of implementing agencies likely to participate in the Project. Asindicated previously, the PMC (para 3.04) will play a crucial role inassisting PMWR to achieve the objectives of NWRP (para 3.01) and in aidingSWAs to implement sub-projects successfully. FMWR has already awarded andsigned the project management consultancy contract. During negotiations,agreement was reached that PNWR would continue to employ a PMC acceptableto the Bank throughout the period of project 5.t.lementation (para 6.01(g)).

5.07 Other significant risks relate to giar.ric problems which havetended to adversely affect project implementation in Nigeria in recenttimes, in particular unsatisfactory procurement practices and failure toprovide adequate counterpart funding. With respect to the former, the PMCwould assist PMWR in ensuring compliance with the Bank's procurementguidelines (para 3.12), which should substantially reduce delays caused byinappropriate procurement practices. on the issue of counterpart funds,during loan negotiations aSreement was reached that the conditions forstate participation in NWRP would include each participating state makingan initial deposit of Ml million into its Project Account and makingmonthly counterpart fund payments of M300,000 thereafter. Participatingstates would authorize counterpart funds to be provided by direct deductionat source from the Pederation Account should counterpart fund payments falltwo months in arrears. These provisions would be included in theapplicable sub-loan agreements (Annex 3-5).

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VI. AGREEMENTS REACHED AND RECOMMENDATION

A. Agreements Reached

6.01 During negotiations, agreement was reached with the FederalGovernment of Nigeria that it would:

(a) approve loans for sub-projects only in accordance with theagreed list of eligible investments (para 3.02 and Annex 3-1)and only to states which meet the agreed conditions forparticipating in the Project, including inter alia action plansand programs of annual tariff increases to allow the SWAs tomeet all cash operating costs from revenues within five years(paras 3.05 and 4.03 and Annex 3-5);

(b) by December 31, 1991, inform states participating in NWRP of thecriteria that will be applied in determining eligibility foradditional funding (para 3.08);

(c) finalize processing of all NWRP sub-loans by June 30, 1994 (para3.08);

Cd) onlend NWRP funds to participating states on the same terms asthe IBRD loan with participating states bearing the foreignexchange risk (para 3.11);

(e) submit to IBRD annually audited financial statements of theSpecial Account, Project Accounts, and SOEs by June 30 of thefollowing year (para 3.18);

(f) conduct a mid-term review of project implementation by December31, 1993 (para 3.19); and

(g) employ a PMC acceptable to the Bank throughout the period ofimplementation of the Project (para 5.06).

B. Conditions of Loan Effectiveness

6.02 The following are conditions of loan effectiveness:

(a) assignment of counterpart staff to the PMC (para 3.04);

(b) signing of at least two regional engineering consultancycontracts (para 3.06); and

(c) signing of at least two sub-loan agreements(para 3.11).

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C. Conditions o& Disbursement

6.03 The following are conditions of disbursement for project states(pars 3.1?):

(a) a sub-loan agreement must be entered into on terms andconditions satisfactory to the Bankg and

(b) for the rehabilitation of water supply systems, a contract mustbe entered into that adequately provides for a leakage detectionand repair program.

D. Recommendation

6.04 Subject to agreement on the above, the proposed National WaterRehabilitation Project is suitable for an IBRD loan of US$256 millionequivalent to the Federal Republic of Nigeria.

An4NyJanuary 1991

- 22 -

ANNEX 3-1Page 1 of 2



List of Investments Elisible for Financing

1. The underlying objective of the Project is to increase thesupply of potable water throughout the Federation by rehabilitatingexisting water supply systems to restore them to design capacity and tosustain the increased water supply through institutional strengthening ofthe participating state water boards/corporations. Institutionalstrengthening would emphasize improving staffing, financial management,operation and maintenance and stores management.

2. Initially a maximum of up to US$10 million equivalent of loanfunds will be made available to qualifying states to finance high priorityinvestments such as:

(a) repair or replacement of:

Mi) weirs, intakes, boreholes;

(ii) pumping units;

(iii) electrical equipment and generator sets;

(iv) chemical preparation and dosing equipment;

(v) clarifiers and filters;

(vi) concretelsteel storage tanks;

(vii) rising mains; and

(viii) leaking transmission or distribution mains.

(b) minor building works, such as replacement of roofs, constructionof generator houses, etc.

(c) leakage detection and reduction programs;

(d) spare parts (not to exceed two years' requirements);

(e) connection of water supply systems to the NEPA grid;

(f) studies to assess communications and vehicle requirements andopportunities to increase private sector involvement in watersupply activities;

- 23 -AN=X 3-1Page 2 of 2

(g) consultant services to assist in Implementing programs forcustomer enumeration, upgrading financial systems andestablishing manpower development and trainingg

(h) production and consumer meters;

(i) voltage and lightning protection equipment;

(j) stand-by generator capacity, where water supply systems dependon diesel generators;

(k) workshop tools and equipment;

(1) laboratory equipment;

(m) service vehicles; and

(n) essential communications equipment.

3. Subsequently, any unallocated loan funds could be allocated tostates which have performed well under the project. Qualified states couldreceive an additional allocation of not more than US$10 million equivalentto finance more investments of the type eligible for financing outlined inpara. 2 above. In addition, the following investments could also beconsidered:

(a) communications equipment;

(b) vehicles;

5C) additional spare parts;

(d) consultant services to assist in preparing a medium-terminvestment program;

(e) aerial photographylmapping; and

(f) hydrogeological investigations.

AF41NJanuary 1991

- 24 -ANNEX 3-2Page 1 of 5



Description of a Typical Sub-project (Gongola State)

A. Implementation Procedures

1. One of the underlying objectives of each sub-project is toincrease the supply of potable water by restoring existing water supplysystems to perform at their original design capacities. In thisconnection, investments eligible for financing are listed in Annex 3-1 andcriteria under which participating states would be eligible for sub-loans,to assist in carrying out rehabilitation works, are described inAnnex 3-5.

2. Sub-project implementation would be monitored by the FederalMinistry of Water Resources (FMWR) assisted by a Project ManagementConsultant (PMC) in accordance with terms of reference outlined inAnnex 3-4. State water agencies (SWAs) would be directly assisted byRegional Consultants who would provide the following services in connectionwith the rehabilitation workt studies; detailed engineering design; andsupervision of construction. In addition, the Regional Consultants wouldassist SWAs to improve management of existing workshops, which are used inmaintaining and operating existing water supply systems, and wouldimplement a pilot leakage detection and reduction program in a selectedarea in each state.

3. Seven regional consultancy contracts would be awarded, one foreach of six groups of three states and one for a group comprising threestates and the Federal Capital Territory. The rehabilitation works to beimplemented by each state have been identified as a result of two studies;the first comprised a general survey of the condition of urban water supplysystems and the second provided schedules of rehabilitation works to beundertaken, as agreed upon by each SWA. The program of work will deal withonly a part of the water supply rehabilitation needs of the Federation,concentrating on those works chosen to provide the greatest impact in termsof quantity, quality and reliability of supply to consumers. Theseimprovements would also enhance the opportunity for SWAs to collectrevenue.

4. In most cases, physical components of each sub-project compriserehabilitation of existing facilities by overhaul, repair or replacement ofplant and equipment to restore the output of some water supply systems tooriginal design capacities. Provision of spare parts and improvement ofmaintenance facilities have also been included. In addition toimprovements in workshop management, other activities associated withoperational support and institutional strengthening include improved


operation and maintenance, financial management, staffing and training(Annex 3-3).

5. The Regional Consultants will be required to reassess in detailthe rehabilitation needs of each water supply system and, in particular, toconsider, on an item by item basis, whether rehabilitation or replacementis appropriate. The SWAs will be encouraged by means of a pilot leakagedetection and repair program (to be prepared, organized and supervised bythe Regional Consultants) to rectify deficiencies in the distributionnetworks to ensure that the increased water supply reaches the consumer.As a condition of disbursement of sub-loans, SWAs are required to enterinto contracts for leakage detection and repair in distribution networksserved by water supply systems rehabilitated under the project.

6. Each sub-project would be implemented in three stagescomprising: i) preparation studies and plinning; ii) detailed engineeringdesigns, further studies (if needed) and prequalification of contractors;and iii) bidding, contract award and construction. The contents of thesestages are summarized as follows2

Stage I- Formulation of detailed work program.- Detailed study of rehabilitation needs.- Definition of the extent and nature of each work item.- Formulation of design criteria and approval by PMC.- Implementation of engineering, physical and hydrological

surveys to permit selection of economic methods forrehabilitation or replacement of systems or components.

- Preparation of outline drawings.- Inspection of dams and reservoirs (where applicable) and

review of procedures for periodic inspection of dams andenvironmental effects of reservoirs.

- Inspection and testing of mechanical and electrical plantand equipment.

- Completion of studies and selection of preferred solutionsfrom optional alternatives.

- Preparation of schedules and justifications for provisionof operational support facilities such as vehicles,workshop equipment and tools and laboratory equipment.

- Preparation of a Stage I system planning report andsubmission to FMWR and PMC.

State II(On approval of recommendations in the State I planning report)

- Completion of detailed engineering design and costestimates of those items requiring no additional studies.

- Completion of further studies and investigations includingexploratory drilling and pump tests, where needed, andcompletion of detailed engineering designs and costestimates.


Preparation of suvuary reports containing recomunndationsfor all rehabilitation works and submLssion to PMIR/PMC forapproval.Prequalification of contractors for the rehabilitationworks and preparation of bid documents (to World Bankguidelines) based on a ?4odel Bid Document (prepared duringproject preparation).Implementation of a pilot program of pipeline mapping, leakdetection and repair and an associated on-the-job trainingprogram of SWA operatives.

Stage III- Execution of contracts for leakage detection and repair.- Evaluation of bids for rehabilitation works and award of

contracts.- Supervision of construction of rehabilitation works.

B. Works Included in a TYical Sub-2roject

7. Water supply systems in each state have been developed to meetthe water needs of individual urban areas, exploiting to the best advantagethe water resources of each area. All of the systems have uniquecharacteristics and rehabilitation needs. There are, however, certainsimilarities between systems and the proposed works in Gonsola State havebeen selected as forming a typical sub-project.

8. High priority works proposed under this sub-project have a totalestimated base cost of about US$7.4 million and comprise surface watersystems serving four urban centers, a groundwater system serving one urbancenter and operational support in the form of service vehicles. However,lower priority works have also been identified to qualify for an additionalallocation of funds in the event that any loan funds remain unallocated ata later stage in the project. These lower priority works would includerehabilitation of three groundwater systems, total estimated cost US$2.7million.

9. The first of the surface water systems, Jimeta was built in1977, design capacity 22.7 Mld, and extended to 29.5 Mld in 1983. Atpresent its output is 9.1 Mld. Since new works to serve Jimeta areplanned, rehabilitation of the existing works will be limited to itemsessential to keeping the plant in service for a limited period. Such itemswill primarily comprise the rehabilitation or replacement of mechanical andelectrical plant and equipment (pumps, diesel generators, air compressors,clarifiers and filters, chemical feed equipment, mixers). Much of thisequipment may be transferred to other works when this system is phased out.Benefits realized by these works would be increased reliability and waterquality and an increase in the supply to about 19.0 Mld.

10. The second surface water system Yola was completed in 1988,capacity 22.7 Mld. The source is the Benue River and water is treated at aconventional rapid gravity plant. Partly due to a recently completed dam


upstream of the works, difficulty is experienced in obtaining sufficientwater at the water intake. A study and river training works are proposedto overcome this difficulty. In addition, electrical works are needed tomodify the system to permit use of the newly provided NEPA power supply.Studies are also needed to identify the cause of poor operation of theclariiiers and to identify suitable remedial measures. Several minormodifications to the works are necessary in addition to the provision ofadditional spare parts. Benefits will include a more secure water supply,reduced maintenance requirements, better quality water and savings in theuse of chemicals.

11. The third surface water source, Gembu, is a small (2.25 MUd)"package" or prefabricated unit completed in 1979 as a temporary measure.A study is now needed to determine future water needs of the commmnity andto improve the design of some components of the system. Rehabilitationworks would includes improvement of the river water intake structure andpumping plant; repair of the filters and sedimentation system; repair ofthe chemical feed and electrical systems; provision of new power generatorsand laboratory equipment; replacement or repair of a booster pumpingstation; and miscellaneous pipeline and building repairs. Benefits willinclude a more secure water supply, and improved water quality.

12. The fourth surface water source, Numan, is a comparatively newsystem completed in 1988 with a capacity of 13.4 Mld. Water is drawn fromthe Benue River and treated in a relatively conventional rapid gravitytreatment plant. To reduce operation and maintenence costs the plant wouldbe converted to operate on the NEPA power supply which has only recentlybeen extended to the area. This would also allow operation on a 24-hourbasis. Studies will be made to identify the cause of ineffectiveperformance of the clarifier system and remedial measures will be taken.Additional spare parts will also be made available. On completion of theseimprovements the output of the system will be secured, reliability will beimproved and maintenance requirements reduced. The 24-hour working regimeand improvement of the clarifier performance will improve water quality andreduce chemical use.

13. The groundwater system serving the town of Takum comprises some35 boreholes drilled in 1975, of which some 19 were put into use. Atpresent, only 4 boreholes are in working order. Proposed works under theproject include:

- Inspection, testing and rehabilitation of the boreholes,with additional redrilling where necessary.

- Provision of borehole pumps, pipes, flowmeters and valves.- Repair and replacement of power generators.- Provision of chlorination systems.- Repair of pipelines, buildings and storage tanks.

Benefits will include a considerable increase in the quantity of wateravailable and improvements in quality and reliabilit.

- 28 -ANNEX 3-2Page 5 of S

C. Operational SuDDort and Institutional Strenathening

14. Although the Gongola SWA has not requested assistance to Improveworkshop facilities other than staff training, under the project theRegional Consultants will review workshops, operating procedures andtraining needs and will make recommendations for review by the SWA, PMRand PMC.

15. Service vehicles would be provided to supplement the presentfleet which is old and depleted. Transport related difficulties areparticularly acute in Gongola which is one of the largest states in Nigeriawith widely scattered centers of population.

16. Laboratory facilities would be improved by future provision of acentral laboratory in conjunction with the expansion of the Yola works. Inthe meantime the laboratories at treatment plants (Yola, Jimeta, Numan andothers), which have limited capability, would continue to be usedsupplemented by Yola hospital laboratory. Training needs of laboratorystaff would be reviewed by the Regional Consultant.

17. Monthly billing and revenue collection at local offices usingmanual billing procedures is reasonably efficient although, because ofinadequacies of the water supply, consumers are reluctant to pay for theservice. Under the project, FMWR with the assistance of PMC would appointlocal consultants to study the billing and collection procedures with theobjective of improving revenue collection and would assist the SWA toimplement the study recommendations.

18. FMWR. with the assistance of PMC, would also assist SWA toimplement a manpower audit and a trainina needs analysis and to implementmanpower improvement and training programs resulting from these studies.Under the project, the SWA would be required to appoint a manager in chargeof human resources development.

AP4INJanuary 1991




Manpower and Trainint

1. Any attempt to analyze the reasons why State Water Agencies(SWAs) in Nigeria have come to operate so much below their design capacitywill, without any doubt, find that "lack of trained personnel' isidentified as one of the main causes. Without ignoring that there areseveral other reasons such as lack of spare parts, inappropriate staffingpatterns, and low staff motivation due to low salaries and poorprofessional incentives, it must be acknowledged that many deficiencies andmuch of the deterioration could have been prevented if adequately trainedpersonnel had been in place to operate and maintain the water supplysystems.

2. One of the objectives of the National Water RehabilitationProject (NWRP) is to rehabilitate the water supply systems to restore themto be operated at their design capacity level. An equally importantobjective is to strengthen the SWAs' capacity to sustain the achievementsrealized under this project. It would not be acceptable for therehabilitated systems to continue to be operated and maintained at the samelow standards that had brought them to the present state of deterioration.To help achieve this objective, a manpower plan and training anddevelopment program will be prepared.

3. To reinforce the importance that trained personnel have insustaining the rehabilitation effort, NWRP will assist in establis;'=gHuman Resources Development Units within FMWR and in each SWA to providecoordination for training activities and staff development.

4. Funding will be made available under the Project to implementthe training program and training related activities described below.

(a) Man wower Audit and Training Needs Analysis. As recommendedby the "Nationwide Study" of 1988 an "urgent review ofstaffing profiles and training needs is required in mostSWAs to establish a meaningful manpower reform and aneffective training program." To this end, under thesupervision of FMWR, consultants will conduct a manpoweraudit and training needs analysis in each of theparticipating SWAs, following terms of reference preparedby the PMC. These consultants will also assist indeveloping meaningful curricula and courses and will definea preferred staffing profile and an action program to helpSWAs bring their staffing into conformity with suchprofile. It has been proposed that this study should bedone under a single contract to ensure uniform criteria are


employed in analyzing and developing recommendations whichare consistent and applicable to SWAs in most states.

(b) Training Courses. Although the detailed training programwill not be fully defined until the manpower audits andtraining needs analyses are completed, funds have beenallocated to finance approximately 1,000 trainee-weeks foreach participating SWA. Taking into consideration that theaverage number of personnel per SWA is 1,100, the number ofemployees that the training program intends to reach isquite ambitious. On average, each SWA should be able toorganize some 24 courses, each to train 20 people for twoweeks throughout the implementation period of NWRP.

(c) Supoort to National Rater Resources Institute (NWRI). NWRIwas established to train middle level manpower involved inthe fields of water resources, irrigation, water supply andrelated activities. Lately, the work of the Institute hastended to move away from the initial focus, so theirprograms now tend to duplicate those offered bypolytechnice and universities, whereas there is anincreasing need for training in practical skills at the lowand middle level personnel. Assistance to be providedunder NWRP will enable NWRT to better meet this need.

(d) Support to MGM1K. NWRP will provide assistance to PMWR tostrengthen its advisory capacity to help SWAs deliver theirwater supply services more efficiently by assuming aleading role in the effort to sustain the improvementseffected under NWRP financing. With respect to training,1MWR should assume the on-going responsibility foradvising, supporting and coordinating SWA trainingactivities. To leave all training initiatives exclusivelyin the hands of each individual state could becomeinefficient and wasteful, and PHUR can help satisfy SWAs'common training needs in a more efficient manner.Furthermore, because of the nature of its functions, FMWRmay have better access to information and better means ofcommunication with all SKAs and be able to help formulatenationwide training policies, preferred staff profiles, andmanpower development targets. PMWR can organize activitiessuch as seminars, surveys, systems evaluation, data bankImplementation, coordination vith training institutions anduniversities, etc.

S. Training will be given to staff at all levels, from operators tomanagers, and emphasis will be placed ons (i) ensuring course relevancein connection with the training objectives; (ii) enforcing the applicationof rigorous selection criteria to make sure that training is given to thestaff that really need and deserve it; and (iii) using effective methods ofevaluation to verify whether the intended objectives are being met and toapply corrective measures when necessary.


6. In pursuing the maximum use of local training capability andresources, the National Water Resources Institute (NMI) and theIndustrial Training Fund (ITF) are expected to actively participate inorganizing courses at their facilities as well as at the job sites. Thetraining programs to be orgaaized under NWRP will rely to a large extent onNWRI capability to provide effective training to SWA staff, especially inthe areas of equipment operation and preventive maintenance. Projects willbe allocated to strengthen NWRI in developing training courses andacquiring teaching materials and equipment needed to train operators inactivities such as leakage detection, pump and water meter installation,operation and repair, maintenance of electrical systems, cperation andmaintenance of dams, etc.

7. Training Component Cost Estimate. The estimated total base costof the training component is US$1.9 million equivalent, and it has beenallocated as followst

Local Foreign Total------------ US$ Thousands --------

Manpower Audits and Training 150 150 300Needs Analyses

Staff Training 990 110 1,100

Support to NWRI 36 84 120

Support to PMWR _ 36 324 360

Total 1,212 668 1.880

AP4INDecember 1990




Proiect Management Consultancl - Outline Terms of Reference

1. The Project Management Consultant (PWC) will act as the FederalMinistry of Water Resources' (FKWR's) agent for overall management of theNational Water Rehabilitation Project (NWRP) and for monitoring theimplementation of state level sub-projects. The PMC will be involved infour major areas of activities as followss

(a) Overall management of NWRP, comprising:

si) developing and operating an accounting system for theProject and the sub-projects financed thereunder;

(iU) preparing terms of reference for the annual audit ofall NWRP accounts and statements of expenditures(SOEs);

(iii) processing all applications for disbursement ofproject funds, including disbursements from theSpecial Account 1/, counterpart fund project accounts,and withdrawal applications for direct disbursementsto contractors and suppliers; and

(iv) preparing the project completion report.

(b) Monitoring sub-project implementation, comprisingt

(i) developing and maintaining a sub-project monitoringsystem, including a system for monitoring contractsfinanced under NWI?;

(ii) issuing standard procurement documents to be adaptedby Regional Consultants (RCs);

(iii) overseeing the work of RCs, including review oftechnical engineering specifications and procurementdocuments;

(iv) reviewing all procurement decisions for compliancewith World Bank guidelines; and

11 The Minister, FMWR, will be the signatory for the withdrawal of Bankfunds used to replenish the account.


(v) organizing and participating in the annual and mid-term sub-project implementation reviews;

(c) Institutional development of participating SWAs, comprising:

(i) assistance in preparing an action program forimplementing tariff reviews and manpower developmentprograms and achieving revenue and expendituretargets;

(iU) collecting and analyzing data on performanceindicators and reviewing performance against theaction program;

(iii) developing guidelines for leakage detection andpreventive maintenance;

(iv) developing a standardized water utility billing andcollection system, including terms of reference forconsultants to assist in its implementation andoverseeing the technical assistance provided by theconsultants;

(v) developing standardized accounting and budgetingsystems and stores procedures for water utilities; and

(vi) preparing terms of reference for manpower audits andtraining needs analyses of all SWAs.

(d) Support to FMW, comprisings

Ci) developing sector policy and technical guidelines forFederal and State Governments In such areas as: waterquality and effluent standardst design criteria;equipment standardization; water treatment chemicalstandards; tariffos and human resources development;

(it) creating and maintaining a water resources and waterquality data bases

(iii) advising on sector training needs and capabilities oflocal training institutions;

(iv) preparing tenms of reference for special studies insuch areas as pollution/water quality; tariffs; andfixed assets valuation; and

(v) developing a training program and providing on-the-job training in project management for P1WRcounterpart staff.

AF4IJDecember 1990

- 34 -AIMEX 3-5Page 1 of 2

PEDERAL REPUBLIC OF NIGERIA


Criteria of State Eligibility for Sub-Loans

1. Each participating State will enter into a sub-loan *areementwith PGN the terms of which would provide that the State/State Water Agency(SWA) would undertake tos

(a) implement leakage detection and repair program for all watersupply systems to be rehabilitated under the Project;

(b) cause all state owned dams and reservoirs associated with watersupply systems to be rehabilitated under NWRP to be periodicallyinspected and maintained in accordance with sound engineeringand environmental practice;

(C) implement preventive maintenance and adequate stores procedures;

(d) develop a comprehensive training program for SWA staff;

(e) maintain separate accounts for water supply activities,including appropriate allocation of overheads;

(f) implement a program of phased tariff increases which would bebased on annual tariff adjustments sufficient to enable the SWAto meet all cash operating costs from Internally generatedrevenue within a five-year periodt

(g) implement an efficient billing and collection system with theassistance of local consultants;

(h) make adequate budgetary provisions for maintenance of lts watersupply facilities and training for its staff;

(i) submit to PMWR SWA's audited financial statements and managementreports for each year by September 30 of the following year;

(j) submit to FMWR monitoring data on a timely basis as requested;and

Ck) submit to FMWR annually the SWA's rolling three-year investmentprogram, including identification of sources of financitg.

2. In additLon, each particLpating SWA ould notify PHiR of theliaison officer responsible for coordinating its participation in NWM?.Each participating SWA would also assign one civil and one


mechanicallelectrical engineer as counterpart staff to work with theirRegional Consultant.

3. Furthermore, each State would agree to make monthly counterpartfund payments of approximatoly N300,000 into a project account administeredby PMWR. At any time when at least two monthly payments are in arrears,direct deduction at source (from the Federation Account) of the counterpartfund contribution would be effected as authorized by the State Ministry ofFinance in the sub-loan agreement.

4. The conditions of disbursement of the sub-loans would bet

(a) submission of the SWA's audited financial statements for 1989;

(b) submissioz of an action plan with target dates for achievingagreed operational, financial and manpower development targets;

(c) appointment of a manager in charge of human resourcesdevelopment for the SWA; and

(d) establishment of the state's project account with an initialdeposit of N1,000,000.

5. A special condition precedent to disbursing funds forrehabilitation of water supply systems would be the signing of a leakagerepair contract.

6. The action plan (para 4(b)) would take the form of a side letterto the sub-loan agreement, and noncompliance with the action plan wouldconstitute a condition for suspension of-disbursements by IGN.

AF4INOctober 1990

- 36 - ANNEX 3-6Page I of 2


NATIONAL WATER RENABILITATION PROJECT

Sample Letter of Comitment

SELKET

GOVESNMVt.f Wq ji UtAU 'W NU

1Mf1SmY OF FINA AND ^ ICOt4OMC KAMM

Ad.4..t..! 6'A IPl. ..............

.4f ________ISMP. N. n. an

........... .. !!.t|.......The Hnourable Minister,Federal Ninistry of Water ResoLrces,Department of water Resources,PJ5. 135,kVEA 11 aakl - Abuja,AJa - iNigeria.

PARTICIFATICh CF 3; lE STATE In THEhAT WhAL WAT. REHABI3LJiT'TC-N FU1O

Please refer to your letter Ref.No.FDkRMW S.173.3/VGl.V of 1st September, 1laS in connection with the abowvesubject uetter, and the decisicns taken at the sqntworkshoF nelcd on the Fund between 23rd and 26th Gctobr, 19.

2. 1 am happy to inform you that Benue State has decidedto participate in the FunC an.'. to this effect, I wish to confirmthe followir. as rec*uired:

(t) Tnet the Benue State has nrAorsed the objecttiof the ieationol '..ater 'Ab1ilitaticn Fund;

(11) That we prco =iltted to the State Public UtilitiesBoard's recovery of all tee opmtini costs thohmore efficient oner2tioos, including appropriewater tariffs, efficient billit.. tPao collection,improved utilisetion of anpowr, preventivemaintenance, leakece detection and reduction;

(iii) Thet as the introduction of econoitc triffs will

I W

- 37 -


be phased ovr a period of time, adectupte operatingsubvention will be notified in advance end providedto the Sttts 'ater Utility until fell racovery ofoperting costs can be achieved;

(iv) That adequate counterpart funds will be providedthroughout project implewetation (UO,O pop monthover 3642 mnths);

tv) That provision will oe made for sprat acc ts tobe mintained for the water spply function;

(vi) That specified deta requested by FDI throuhout projectiuplntation period will be proided ona tiaelybais; and

(vii) The undrstand1nc that conditions for assessing ;;...Fwill cver areas sai a tariffs, investmnt programe,operating procedures, unor planning and developmet,t

3. Also enclosed in this letter of intunt, as ttportry

mesure, is t my of the st?tebet of 4sets and Liabilities of ow

State Public Utilities Bowa as at 31st Leetooa, 1988. Efforts re

hower being made to produce t;e audited or unaudited accounts of

the ioard for final submission to you later. The process for the

selection of the consultants to be considered as Regional Consultants

is in progress and it is hoped thAt our list itted to you

soon for consideration alone with others se.o,

C /

hoourable CoWssioner for Financeand Ecomic Planning.

FEDERAL REPUBUC OF NIGERIANATIONAL WATER REHABILITATION PROJECT

Implementation Schedule

Catens Yeaw 1990 19 12 99 19 1Q 19 17 199"____JIL LI IL LI I LE lI Yllllll JIt0-r r- rT LL-ffi s r M _ [ rI

PROIECT MANAGEMENT ~mguCONSULANT

ENEERMRT BY REG1OM _ _ _ .m _ __ M_CONSULANTS

REHABIITATION OFSYSTEMS:

INITIAL TION _SECOND ALLOCATION 8. 4 .*r"". .*.._, _t -t -t_-msUNG COLLECTION _

LEAKAGEDETECTION E

INIIAL TALATION - _m __ __ _

SECOND ALLocTION -=n

NTES: LEGEND* PROJECT EFFECTWE AUG 1 1991 *g .. * ,*.,...i* _ t. r.. P 9r &* SECUO ALLOCATION SECINS JANUARY 1094 M-__ 313 o SUB-LOAN CONITMENT CUTOFF EqsSW*y ad _oason

DATE JUNE4530.1994 te* WORtKS COMPLETI OEC 31.1098 e lOA4 CLOSESJUNIE30JtOim MabSona ts Pm

EVW47491

- 39 -

ANNEX 3-8

ImI P-lw UbI Lint -w Tsui Vt gm

PAW I Itat1ai ls4m On id ellfla - l llfla)

wxtsbw ft WN 6*3 L.0 3. OA 71. 23. 6

**o Tea*" 11o=.1 IL1 u.2 Om 23.0 28 a

Puplfv Pis* Lo 2I.0 .5 3.2 29.1 23* 5

ElIstri Pie* ad SPPA LS 3*A 4.0 NA5 a". LI. a

SaI 1Id.W PAPfro 2O 1.1 L. b.1 .

tillleB10- -S 11- - -i dl-

S.AotI U* 1*2.0 W57. W1 * 1,13.? 15

Xtst1amg S nw & L IL M

-Ja b,T 0. . .1 7.2 4. #

Tqink 1.2 0.7 1.9 8A LS .0 I

elI I to W ICMh ot'laromot~ 0.0 0 Li. Ls5 2.1 I*

Ibdiat ad PiMist PrqauWJ. 0.2 0* 0.A 1* 2. 4.0 0

Qlamdi Smwtps.t 1.0 I.0 V7 7.7 INS 16* 0

Mobl 21 4.1 U.S SLY 23.4 4W* v

W lt"flsWeo 0.0 0.4 0. 0.0 8. 8 0

Total Be" c* MA0 146.0 mu. 4W*0 1.23* 10w5. 10

PI0plel C.ut1.n 7* as 3.2 S.i W 23.Prsia Cut1nle 16.4 4.? 6.1 N.I m". aus0

utntZ a77.7 2.5 go" 0. 2,4. 20 S

Dil. NJ 0.0 5. 23.7 0.0 19.7

T6l C& Su au LT mi Ima km

Total ___ PU 32.5 10.? 38*_2,1_3* _ ,_3_

a/cow NWMt sdoto X, *,"

AF4IN4May 1990

FEDERAL REPUBLIC OP NIGERIA

NATIONAL WATER ttI3ILITATION PRO3ECT

Loan Disbursefhnt Profile

0.01 SW

F- ~ ~ ~~~~~~~~~o-0.41

_ e.4~~~~~~~~~~~~~4

6.0 M

m .~~~~~~X0.

A_ 20__ 3. o

F- w -i 4 /

^~~m Sm 0 1

fw~~~w

JAW

_~~~~~~~~~~d Slo 1.lo

# _*0b_S30* 13f4lZ~~~~~~~~~~~~~2

t~~~~~~~~~~~~~~~~~~~~

- 41 -MMNE 3-10Page I of 2


NATIOMAL WATER REHABILITATION PROJECT

State Water AMencv Performance Indicators

Each SWA will be required to supply the following information toFMWR throughout the project implementation period.

Unit

1. Te al Number of WaterI stems in SWA number

2. Number of Water Systems to beRehabilitated Under NWRP number

3. Vater Production Per Year in thousand cubicSystems Rehabilitated Under NWRP meters

4. Water Production Per Year in All thousand cubicUrban and Semi-urban Systems meters

5. Water Sales Per Year in Systems thousand cubicRehabilitated Under NMMP meters

6. Water Sales Per Year in All thousand e:''cUrban and Semi-urban Systems meters

7. Non-revenue Water in SystemsRehabilitated Under NWRP 2

8. Non-Revenue Water inAll Urban and Semi-urban Systems X

9. Revenue Per Year from All Urban Naira millionand Semi-urban Systems

10. Collections per Year in All Naira millionUrban and Semi-urban Systems

11. Collectionstrevenue 2

12. Months Revenue Outstanding months

13. Cash Operating Ratio 2

- 42 -ANNEK 3-10Page 2 of 2

Unit

15. Leakage Surveys Implemented(as percentage of distribution area) X

16. Number of SWA Employees number

17. Number of SWA Professional TechnicalAdminstration Employees number

18. Number of Consumer Connections thousands

19. Number of Employees per 1000 Connections number

20. Cumulative Disbursements Under NWRP haira thousands

21. Total Number of Water SystemsOperating Under PreventiveMaintenance Programs number

22. Cumulative Number of Weeks of Stafftraining Under Formal Programs sumber

AF4INAugust 1990

- 43 -amNBX 3-11Page 1 of 3

FEDEAI. REPUBLIC OF N16ERIA


Supervision Plan

1. Bank Suvervision Input into Key Activities. The staff inputindicated in the table below is in addition to regular supervision needsfor the review of progress reports, procurement actions, correspondence,etc. (estimated for the Project to require 12 staff-weeks during the firstproject year, 16 staff-weeks per year during the following three projectyears, and eight staff-weeks per year thereafter).

2. Borrower's Contribution to Su_ervision.

(a) The Borrower has agreed to appoint a Project ManagementConsultant (PMC) acceptable to the Bank vho will be primarilyresponsible for overall project management monitoring andcoordination. The PMC mobilized in early 1991 in order toassist interested states to meet the conditions forparticipating in the Project and to oversee the award of thecontracts for Regional Consultants.

(b) The PWC will prepare quarterly progress reports which will besubmitted to the Bank by the end of the month following the endof each calendar quarter, i.e., January, April, July andOctober. The fonm and content of the quarterly progress reportswill be agreed during the initial Bank supervision mission.

(c) The PMC will organize annual sub-project Implementation reviewsin the form of a seminariworkshop to be attended by the FederalMinistry of Water Resources (PMWR) and all participating StateWater Agencies (SiAs) which will normally be held in June/July.In addition, the PMC will arrange to mest individually withrepresentatives of each participating SWA at least once eachyear, normally in January/Pebruary, and more often if projectimplementation considerations so dictate.

(d) The Department of Water Supply and Quality Control (DWSQC) ofVMWR will be responsible for coordinating arrangements for Bank

supervision missions. Staff of the PMC would be made availableas needed to accompany supervision missions on field visits toparticipating states.

Ie) Mission briefing meetings on arrival will normally be chaired bythe Director, DWSQC, and wrap-up meetings by the DirectorGeneral, FMR. All such meetings would be attended by the PMCand, as and if necessary, representatives of SWAs.

- 44 -

AE 3-11Page 2 of 3

BanX Subervision InPut into Ket Activities

ApproximateDatesinput Expected Skill Staff(molvr) Activitv Requirements (Staff Weeks)

6191 Spervision Mission Task Manager, Engineer, 9.0(Project Launch Accounting/FinancialWorkshop) Reporting, Procurement,

Training Specialists

11191 Review of FMWR proposed Task Manager, Engineer, 3.0criteria for SWAs to Financial Analystqualify for Phase II

12/91 Review of SWA manpower ManpowerlTraining 2.0audits and training Specialistneeds analyses

2192 Supervision Mission Task Manager, Engineer, 6.0(to coincide with Financial Analystselected PMCISWAproject reviewmeetings)

3-4192 Review of dam safety Engineer, Dam Expert 4.0inspections

6-7J92 Supervision Mission Task Manager, Engineer, 8.0(to coincide with Financial Analyst,annual project Training Specialistimplementation workshop)

1993 Two Supervision Task Manager, Engineer, 18.0Missions (one to Financial Analyst,coincide with mid-term Training Specialistproject review)

- 45 -ANNEX 3-lIPage 3 of 3

1994 Two Supervision Task Manager, Engineer 16.0Missions (one to review Financial Analyst,SWAs' eligibility for Training Specialistadditional funding andone to coincide withannual projectimplementation workshop)

1995-98 Two Supervision Task Manager and Other 16.0Missions (one to Specialists as Neededcoincide with annualimplementationworkshop)

1999 Two Supervision Task Manager and Other 6.0Missions (including Specialists as Neededone to prepare PCR)

AP4INJanuary 1991

MAIIU AuSm AOCaMs

OMM- - - M - mM M iMA 36 W WM ENS OMWMa OM OM Go fIAtL MM a Taft

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- 48 -




Economic Analysis

Introduction

1. The NWRP is expected to overcome the shortfalls created by lackof maintenance of the existing water supply systems in urban and semi-urban areas in Nigeria. Although the data are incomplete and unreliable,it is generally accepted that the average water delivery by SYAs in theareas visited by the appraisal team and/or consultants, is very low (as lowas 16 lcd in som areas), and considerable quantities of water are sold byprivate vendors at prohibitive prices. Because of the population increaseand deterioration in the systems, if no rehabilitation is implementedwithin a reasonable time, this quantity will drop to unacceptable levels(possibly as low as 8 lcd). NVRP is expected to improve the safety,quality, and reliability, as well as to increase the quantity of waterproduced to the level of design capacities, in participating states. Aspart of the conditions for eligibility, the participating states will berequired to reduce water losses through leakage detection and repair. Therehabilitation program together with leakage detection and repair will,therefore, have a relatively high economic return and social benefits.Since information on willingness to pay, cost of production and otherrequired data are either unavailable or unreliable, in this analysisextremely conservative assumptions and approach have been used. Theanalysis is based on sub-projects for five representative states. Inaddition to the costs and benefits of sub-projects, the economic analysisalso considers: (i) tariffs and willingness to pay; (ii) affordability;(iii) ERRs; and (iv) risks.

Costs

2. The investment cost of the studied representative statespresjtpd in Table 1 -ae in July 1990 j,oa4er prices. For the purpose of V

economic analysis, these figures exclude the cost of improvements forbilling and collections as well as duties, taxes and other directtransfers. Local costs are converted into border prices using a standardconversion factor of 0.85 and imported components are in CIF prices.

- 49 -


Table 1 InvestMent Cost(in US$'000)

Financial Costs Economic Costs

Anambra 7,799 7,549Cross River 7,899 7,509Imo 6,689 6,392Kano 6,818 6,636Sokoto 10.288 9.886

Total 39,493 37,972

3. Available data are not sufficient to accurately estimateincremental operating cost. The current average cost per unit ofproduction, vhich includes fixed overheads and is, therefore, higher thanthe cost at the margin, has been conservatively chosen as a substitute forthe incremental cost of production. This implies that the incrementaloperating cost stream is directly proportionate to the incremental waterproduction for each year. For conversion of financial into economicvalues, a similar approach to that used to convert investment costs (para2) has been used.

Benefits

4. In the water sector, calculation of the benefits is usuallybased on incremental revenues from water sales and the consumers' surplusbenefits. Only the incremental revenues arising from additional waterdelivered to consumers are considered to represent economic benefits;improved billing and collections, although generating additional revenue,are excluded in computing economic benefits. Due to insufficiency of data,this economic analysis excludes consumers' surplus benefits and onlyquantifies the additional water delivered resulting from the proposed sub-projects (Table 2).

'""rable 2: Incr*mettal Water Delivered (in 000 m3ffav}

Year 5Year . Year 2 Year 3 Year 4 and after

Anambra 6.6 24.4 32.4 33.6 33.6Cross River 2.4 8.0 17.6 24.4 24.4Imo 3.5 9.9 19.2 24.6 24.6Kano 7.9 32.4 62.3 83.1 97.5Sokoto 2.1 6.2 11.9 14.8 17.1

Total 22.5 80.9 143.4 180.5 197.2

- 50 -


5. Although operating costs have drastically increased in recentyears, tariffs have not been reviewed regularly and bear no relation to thecost of production. Under NWRP, the participating SWAs are required toadjust the tariffs to fully recover recurrent costs (Annex 3-5). Tocalculate the expected average tariff rate, recurrent cash costs per unitof delivered water in 1986 have been inflated in order to obtain the July1990 figure. Even though such tariff is still below the cost ofalternative sources of water in those areas (see paras 11 and 12), theadditional water supply has been valued at this estimated average rate.

Economic Rate of Return

6. Economic rate of return (ERR) calculations for the sub-projectsevaluated are based on incremental costs and revenues. In situationssimilar to the Nigerian water supply and demand, it is generally assumedthat the additional water produced and delivered will substitute for themost expensive (similar quality) water from other sources of supply and,therefore, generates economic benefits for consumers (see para 11). Sincereliable data are not available to calculate the consumers' surplus(arising from the difference between the suggested tariffs and the privatevendors prices), these benefits have not been included in the computationof ERRs.

7. ERRs are estimated to range between 16 and 372 for four statesand 62 for the sub-project involving the smallest systems. This low rateis due to diseconomies of scale as well as difficulty in quantification ofbenefits in smaller systems.

8. The costs and benefits of the sub-projects base case arepresented in Tables 3 and 4. The previously mentioned assumptions havebeen taken into account and operating cost and benefits have been built upin proportion to the production increase. The production increase is, withone year lag, directly related to percentage of completion of leakagedetection and repair and rehabilitation works. The table below presentsthe summary of costs and benefits, at a 122 discount rate, and theaggregate rate of return estimated at 22S.

-O US**000

PV capital cost 25,115PV operating cost 71,901

Total cost 97,016

PV of benefits 109,740NPV at 122 12,724

Benefit I cost ratio 1132ERR 222

- 51 -ANOU% 5-1Page 4 of 4

Sensitvlity Analysis

9. The ERR for sub-projects is more sensitive to changes inbenefits. A reduction of 10X in benefits will reduce the aggregate rate ofreturn to 132. An increase of 102 in investment costs or operating costswill reduce this rate to 192 and 162, respectively. Assuming asimultaneous reduction of 10X in benefits and a 102 increase in costs, theERR vill be reduced to 62.

Affordability

10. In the present situation most of the urban dwellers are forcedto either devote a considerable amount of time or to pay prohibitive pricesto private vendors to obtain vater for their basic needs. There is nodoubt that improving the overall availability of public water supply willhave a beneficial impact on the quality of life as well as a reduction inspending for water in families' budgets. It is expected that thequantitative and qualitative improvements will reduce the use ofalternative sources by consumers (purchase of water from vendors) and,therefore, generate economic benefits for consumers.

11. Except for Lagos and two cities in Anambra state, there is nostudy available on willingness to pay and vendors prices. However, thesestudies and team/consultants' observations confirm the economic benefits ofsub-projects and affordability of suggested tariffs. The Anambra studyalso revealed that:

(a) the population was paying vendor prices of as high as 391m3 indry season and M71m3 in rainy season;

(b) considerable quantities of water were sold by vendors; and

(c) at least 702 of the interviewed population is willing to pay upto 32 to 32.51.3 if SWAs provide reliable service.

12. Considering the above mentioned points and taking into accountthat only 60 to 802 of the estimated population of the five states underanalysis are served with water, it is apparent that the expected averagetariff used for computation of benefits (para 5) is considerably lower thanthe willingness to pay and the cost of alternative sources of water.

13. The risks of the project relate not to its economic desirabilitybut to constraints that may be placed on SWAs by State Governmentinterventions which could adversely impact sustainability of theimprovements achieved under the project. Such constraints could reducerevenues, through tariff controls, and increase costs throughimplementation delays. However, all of the unquantified benefits, such ashealth improvements and alleviation of hardship of many urban and semi-urban dwellers throughout Nigeria would still be realized.

A741NJanuary 1991

TAKE a. sawc CAnTAL Cast (ci USS0oo)

3 I 01*A STATIE C.1r1V STATE VA SAUT n STATE. Sso STATE TaTALLocal foelp Loeal Folgp Local rftnp Lo"$l F.lp LoAal Fatip Lcal F..l r

~~~ - - -

1100-16 07.4 M01.1 104.0 2.0 70.6 224.0 400 30.5 1.4 8.5 40.5 85.8 134.*

1068-16 111.1 114.4 404.2 1162.3 16.4 IOS.0 223.5 12M.0 60.2 1 .0 10.4 4. 032.0

I100-1 406.6 1141. M.1 1061.0 60.7 140.1 M.* 160.0 0. 26.4 0.1 105.6 aM.?106-son 4W.4 1O .? 670.1 1"1.0 1.7 1440.7 81.8 15.t M.5 1 .5 260.1 s01.1 10.2

-_ - -_ - - _ - - -

1020.6 SM.? SM.& 400.0 1SU.? 486.4 040.0 $18.0 n116.7 70.1 76.1 219.6 sm.0

go TOTAL 00.t 06.0 66.1 8126.4 9 1.0 "077.0

PCUT TO AT L 18i u1 26 713 34 1 0i 3on to "S 1o M low

PUS1T 10 TOTAL to 1 1 13 s6o 1a0.

1)L53 1066 SKUlh RATN EhTIWI AT M30.0 a US I1.2)UMUD1 t, omm , UWMm

&)TRAM5 on3 DeILlIS AT 533t MICS.4)WAE OF _1AO MS CWMUU DllO 133 PRICES USDIO51STAM CUlJIW FAT OF 0.0 .

S)EMU. UIIT CST PO Ur06 OF *ILLM AND CQLKTIU.

it~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~rt

ANONEX 5-,-53 - Table 4

TABLE 4. AGGEGAT¢E ECOWMIC CASH-FLOW(in U56'000)

Agr"ogt lre.m" AIl convore. itersssta I HMID YEA TO D YEAR Iveet. water before feter ocon recurp Ecenoet

coot WJS cesvres benefIts cost SeeefIt

1161-1998 1604.6 6.2 2.81 0.68 2000 6ao e4861968-1994 68T7.9 29. 1.8t 0.." 7t47 47" -50471004-1995 18168.7 62.4 1.61 0." 1216 6515 e923

t1"-166 11601.2 05.1 2.81 0.65 1t610 10469 -Sao1990-1997 72.0 1.81 0.65 17676 11714 59621097-1990 72.0 2.81 0.65 17670 11714 59621990-199 7n.0 1.81 0.46 17676 11714 $9621090-000 71.0 1.81 0.65 17676 11714 50622000-2001 71.0 1.81 O." 17076 11714 59622001-2002 72.0 1.81 60.6 17670 11714 60612001-2008 72.0 2.81 0.6" 17676 11714 5062

008-1004 71.0 1.01 0.65 1T767 11714 96021004-2006 71.0 1.81 0.65 17676 11714 59062005-2006 72.0 2.81 0.36 17607 11714 59821o00-lo7 71.0 1.81 0.66 17676 11714 5661

2007-toot ~~71.0 2.61 0.66 17676 11714 50611006-2000 72.0 2.81 0.65 17676 11714 696212000-110 71.0 2.`1 0." 17676 11714 f806010-ol1 1.0 2.81 0.65 17676 11714 5061

1011-2012 72.0 1.81 0.65 17676 11714 $5021011-2018 71.0 1.sl 0.65 17076 11714 6g0t1018-1014 71.0 2.81 0.95 17676 11714 59621014-2016 71.0 1.81 0.65 17676 11714 5061

-=-_------_--------- - ----------------- . ... _._.__...._ .___ _... _..

Present value at as discount 2171 154087 101601 15210Praeat valuse *t 0s5 dIscunt 46447 129507 04076 16SPresent volue at 123 discount 25115 1o0040 71001 11274

SENSITIVITY ANALYSISt1) 103 tIEAS IN INVETEN CT 1is2) 10 INCEAE IN OPERATING COST loxS) 0x REDUCTION tN BENEFITS 1ax4) COMBINATION OF 10o INCREAS IN 9EEITS AND ON AND TWO 1215) ONE, TWO AND THRE TOOIEI T62

- 54 -




Documents Available in the Proiect File

A. Institution and Sector Document No.

1. Federal Republic of Nigeria, (Draft) Water Supply B271UNISector Memorandum (February 1990)

2. Nationwide Water Supply and Sanitation D36146Rehabilitation Study, Diyam Consultants inassociation with Binnie and Partners and BritishWater International (Final Report 1988)

3. Reports and Studies Related to the Prolect

1. Proposed Water Supply Rehabilitation Fund Project in D42625Nigeria, Study of the Appropriate Role for theFederal Department of Water Resources, SshwedAssociates (March 1988)

2. Draft Report of the Workshop on the National Water D42626Rehabilitation Fund geld in Abuja, October 23 - 26,1989, Federal Department of Water Resources(December 1989)

3. Natlonal Water Rehabilitation Fund, Pre-EngineeringStudy, Final Report (June 1990) on

Akwa Ibom State D36785Anambra State D36793Bauchi State D36725Bendel State D42627Benue State D36792Bormo State D36723Cross River State D36791Federal Capital Territory D36786Gongola State D36724Imo State D36789Kaduna State D42629Kano State D36784Katsina State D42630Rwara State D42631Lagos State D42633Niger State D36787Ogun State D42634


Ondo State D42635Oyo State D42637Plateau State D36726Rivers State D36790Sokoto State D36788

4. National Water Rehabilitation Fund, Pre-EngineeringStudy, Final Report State Summaries (June 1990)

5. National Water Rehabilitation Fund, Pre-Engineering D42638Study, Final Report (June 1990)

6. National Water Rehabilitation Fund, (Draft) Standard D42639Bid Documents for Execution Contracts (June 1990)

7. National Water Rehabilitation Fund, Request for D42641Proposals for Consulting Services for EngineeringDesign and Supervision of Construction

8. Federal Republic of Nigeria, Ministry of Water D42642Resources, National Water Rehabilitation Fund,Fund Management Consultancy, ?echnical Proposaland Financial Proposal (2 volumes), LavalinInternational in association with Sshwed Associates(March 1990)

9. Letter to the Federal Ministry of Water Resources D42671re: National Water Rehabilitation Fund, Proposalfor Fund Management Consultancy, Lavalin Inter-national (June 1990)

10. Federal Republic of Nigeria, National Water D42672Rehabilitation Project, Supervision Plan, A1411(August 1990)

C. Financial and Economic Analysis

1. Akwa lbom State Water Corporation D42673

Draft Accounts for the Year Ended 31stDecember, 1989 (unaudited)

Accounts for the Year Ended 31st December,1988, Robert Obot & Co., Chartered Accountants

2. Anambra State Water Corporation, Accounts for the D42674Year Ended 31st December, 1988, Obiora Monu & Co.,Chartered Accountants (March 1990)

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3. Bauchi State Planning and Urban Utilities Board, D42676(Draft Audited) Accounts for the Year Ended 31stDecember, 1987

4. Bendel State Public Utilities Board, Statement of D42677Accounts for the Year Ended 31st December, 1987,V. Okia-Anie & Co., Chartered Accountants(March 1989)

5. Benue State Public Utilities Board D42678

Accounts for the Year Ended 31st December,1988, lyornumbe Ime & Co., CharteredAccountants (June 1990)

Accounts for the Year Ended 31st December,1987, lyornumbe Ine & Co., CharteredAccountants (June 1990)

6. Borno State Water Board D42679

Draft Accounts for the Year Ended 31stDecember, 1988

Accounts for the Year Ended 31st December,1987, Patrick Uwakwe & Co., CharteredAccountants (March 1989)

7. Gongola State Utilities Board D42680

(Draft Audited) Accounts for the Year Ended31st December, 1988, Onwufuju, Giva-Osagie & Co.Chartered Accountants

(Draft AudLted) Accounts for the Year Ended 31stDecember, 1987, Onwufuju, Giva-Osagie & Co.,Chartered Accountants

8. lmo State Water Board D42681

Audited Statements of Account for the YearEnded 31St December, 1988, Ray Okoroh,Uchegbu & Co., Chartered Accountants(August 1989)

Audited Statements of Account for the YearEnded 31st December, 1987, Ray Okoroh, Uchegbu& Co., Chartered Accountants (July 1988)

9. Kaduna State Water Board, Draft Accounts for the D42682Yaer Ended 31st December, 1988

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ANE -1Page 4 of 5

10. Kano State Water Resources and Construction Agency, D42684Draft Accounts for the Year Ended 31st December 1987

11. Katsina State Water Board, (Draft Audited) Accounts D42685for the Year Ended 31st December, 1988, Mu'Allahyidi& Co., Chartered Accountants

12. Kwara State Utility Board D42686

(Draft Audited) Balance Sheet and Accounts,Year Ended 31st December, 1988, AdebowaleOyawoye & Co., Chartered Accountants(November 1989) -

Balance Sheet and Accounts, Year EndedSlat December, 1987, Adebowale Oyawvye &Co., Chartered Accountants (September 1988)

13. Lagos State Water Corporation, Accounts, 31st D42687December, 1986, Coopers & Lybrand, CharteredAccountants (December 1989)

14. Niger State Water Board D42688

Audited Accounts for the Year Ended 31stDecember, 1988, Olusola Adekanola & Co.,Chartered Accountants (October 1989)

Audited Accounts for the Year Ended 31stDecember, 1987, Olusola Adekanola & Co.,Chartered Accountants (November 1988)

15. Ogun State Water Corporation, (Draft Audited) D42689Accounts for the Year Ended 31st December, 1987,Akinmade and Company, Chartered Accountants(August 1989)

16. Ondo State Water Corporation D42690

Accounts for the Year Ended 31st December,1988, Adebisi Oguneye, Chartered Accountants(September 1989)

Accounts for the Year Ended 31st December,1987, Adebisi Oguneye, Chartered Accountants(June 1989)

17. Water Corporation of Oyo State D42691

Accounts for the Year Ended 31st December,1988 Olagunju Adesakin & Co. and Rafunke

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mmEF 6-1Page 5 of 5

Ajose-Adeogun & Co., Chartered Accountants(March 1990)

Accounts for the Year Ended 31st December,1987 Olagunju Adesakin & Co. and BafunkeAjose-Adeogun & Co., Chartered Accountants(March 1990)

18. Plateau Utilities Board D42693

(Draft) Statement of Accounts for the YearEnded December 31st, 1988

Annual Report, Balance Sheet and Accounts asat 31 December, 1987, Pannell Kerr Forster,Chartered Accountants

19. Rivers State Utilities Board, Accounts for the Year D42695Ended 31st December, 1987, Harold Danajumbo & Co.,Chartered Accountants (July 1989)

20. Sokoto State Water Board, Audited Accounts for the D42696Year Ended 31St December, 1987, Olusola Adekanola &Chartered Accountants (November 1988)

21. Memos to Piles, Nigeria National Water D42698Rehabilitation Project, Economic Analysis -Assumptions and Methodology, AF41I (August 1990)

AP41NOctober 1990

NIIGERIA CHADADMINISTRATIVE DIVISIONS

t. BURKINA ( - T N I G E R tBUR OINA NI'RFASO)

K'-, SOKOTO KA '-A

B P (* N 9 0 MAIDUGURI

,~ ~ ~ BRN00BENIN KAUN^)A

r K asXitNIGEF 0 ADUNA' ~ BAUCHI

I--/ @m_ < 1 MtNNA W }, @ t 4 \4< ( 110RIN {FCTg pLATEa\% j ffi YOtA 0 )PLATEAU

i-_<A '(-)N('3> /G(I)NGOL

f XgUEz7 t VtABAR Cm' - State BouJndaries

QGulf of Guinea 0w 0^ IntertionI alk R A G f) Nt ,

040 LA 120 10

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AMI 3 s a ,VZ - World Bank · 2016-07-09 · AMI 3 s a -/ ,VZ Report No. 8954-UNI STAFF APPRAISAL...

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Transcript of AMI 3 s a ,VZ - World Bank · 2016-07-09 · AMI 3 s a -/ ,VZ Report No. 8954-UNI STAFF APPRAISAL...