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Document of The World Bank FOR OFFICIAL USE ONLY Report No: 67350-KE PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 193.5 MILLION (US$300 MILLION EQUIVALENT) TO THE REPUBLIC OF KENYA FOR A NATIONAL URBAN TRANSPORT IMPROVEMENT PROJECT July 9, 2012 Transport Sector Country Department AFCE2 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

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Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 67350-KE

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 193.5 MILLION

(US$300 MILLION EQUIVALENT)

TO THE

REPUBLIC OF KENYA

FOR A

NATIONAL URBAN TRANSPORT IMPROVEMENT PROJECT

July 9, 2012

Transport Sector

Country Department AFCE2

Africa Region

This document has a restricted distribution and may be used by recipients only in the

performance of their official duties. Its contents may not otherwise be disclosed without World

Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective April 30, 2012)

Currency Unit = Kenya Shillings (KES)

KES 85.15 = US$1

US$ 1.5506 = SDR 1

FISCAL YEAR

July 1 – June 30

ABBREVIATIONS AND ACRONYMS

AADT Average Annual Daily Traffic

ADT Annual Daily Traffic

AFD Agence Française de Developpement (French Development Agency)

AfDB

BRT

African Development Bank

Bus Rapid Transit

CBD Central Business District

CCN City Council of Nairobi

CEO Chief Executive Officer

CO Country Office

CPS Country Partnership Strategy

DG Director General

EASA East African School of Aviation

EATTFP East Africa Trade and Transport Facilitation Project

EIA Environmental Impact Assessment

EIRR Economic Internal Rate of Return

ERR Economic Rate of Return

ESIA Environmental and Social Impact Assessment

ESMP Environmental and Social Management Plan

EU European Union

GAP Governance Integrity Improvement Action Plan

GDP Gross Domestic Product

GHG Green House Gas

GoK Government of Kenya

GPN General Procurement Notice

HDM-4 Highway Development and Management Model

HIV

/AIDS

Human Immunodeficiency Virus/Acquired Immune Deficiency

Syndrome

IA Implementing Agency

IBRD International Bank for Reconstruction and Development

ICB International Competitive Bidding

ICT Information Communication Technology

IDA International Development Association

IFMIS Integrated Financial Management Information System

IFR Interim Financial Report

INT Department of Institutional Integrity

INTP Integrated National Transport Policy

IT Information Technology

JICA Japan International Cooperation Agency

JKIA Jomo Kenyatta International Airport

KACC Kenya Anti Corruption Commission

KCAA Kenya Civil Aviation Authority

KENAO Kenya National Audit Office

KeNHA Kenya National Highways Authority

KeRRA Kenya Rural Roads Authority

KES Kenya Shillings

KM Kilometer

KRC Kenya Railways Corporation

KTSSP Kenya Transport Sector Support Project

KURA Kenya Urban Roads Authority

LIB

LRT

Limited International Bidding

Light Rail Transit

M&E Monitoring and Evaluation

MD Managing Director

MoF Ministry of Finance

MoR Ministry of Roads

MoT Ministry of Transport

MRT Mass Rapid Transit

MRTS Mass Rapid Transit Study

MTR Mid Term Review

NAMSIP Nairobi Metropolitan Services Improvement Project

NCB National Competitive Bidding

NCTIP Northern Corridor Transport Improvement Project

NMT Non Motorized Transport

NMTA Nairobi Metropolitan Transport Authority

NPV Net Present Value

NUTRIP National Urban Transport Improvement Project

NUTRP Nairobi Urban Toll Road Project

ORAF Operational Risk Assessment Framework

PAD Project Appraisal Document

PAP Project Affected Persons

PC Project Coordinator

PDO Project Development Objective

PIT Project Implementation Team

POC Project Oversight Committee

PPDA Public Procurement Disposal Act

PPOA Public Procurement and Oversight Authority

PPP Public-Private Partnership

PS Permanent Secretary

QCBS Quality and Cost Based Selection

RAP Resettlement Action Plan

RTSA National Road Transport and Safety Authority

RSIP Road Sector Investment Plan

RVR Rift Valley Railways

SBD Standard Bidding Documents

SOE Statement of Expenses

SIL Specific Investment Loan

STC Short-Term Consultant

SPN Specific Procurement Notice

TA Technical Assistance

ToR Terms of Reference

UoN University of Nairobi

US$ United States Dollar

VPD Vehicles per day

Regional Vice President: Makhtar Diop

Country Director: Johannes Zutt

Sector Director: Jamal Saghir

Sector Manager: Supee Teravaninthorn

Task Team Leader: Josphat O. Sasia

REPUBLIC OF KENYA

National Urban Transport Improvement Project

TABLE OF CONTENTS

Page

I. STRATEGIC CONTEXT .................................................................................................1

A. Country Context ............................................................................................................ 1

B. Sectoral and Institutional Context ................................................................................. 2

C. Higher Level Objectives to which the Project Contributes ........................................ 13

II. PROJECT DEVELOPMENT OBJECTIVES ..............................................................14

A. Project Development Objectives................................................................................. 14

B. Project Beneficiaries ................................................................................................... 14

C. PDO Level Results Indicators ..................................................................................... 15

III. PROJECT DESCRIPTION ............................................................................................15

A. Project Components .................................................................................................... 15

B. Project Financing ........................................................................................................ 18

C. Lessons Learned and Reflected in the Project Design ................................................ 19

IV. IMPLEMENTATION .....................................................................................................20

A. Institutional and Implementation Arrangements ........................................................ 20

B. Results Monitoring and Evaluation ............................................................................ 22

C. Sustainability............................................................................................................... 23

V. KEY RISKS AND MITIGATION MEASURES ..........................................................23

A. Risk Ratings Summary Table ..................................................................................... 23

B. Overall Risk Rating Explanation ................................................................................ 23

VI. APPRAISAL SUMMARY ..............................................................................................24

A. Economic and Financial Analyses .............................................................................. 24

B. Technical ..................................................................................................................... 24

C. Financial Management ................................................................................................ 24

D. Procurement ................................................................................................................ 25

E. Social (including safeguards) ...................................................................................... 26

F. Environment (including safeguards) ........................................................................... 27

Annex 1: Results Framework and Monitoring .........................................................................31

Annex 2: Detailed Project Description .......................................................................................33

Annex 3: Implementation Arrangements ..................................................................................51

Annex 4: Operational Risk Assessment Framework (ORAF) .................................................79

Annex 5: Implementation Support Plan ....................................................................................83

Annex 6: Economic and Financial Analysis ..............................................................................86

Annex 7: Environmental and Social Safeguards ......................................................................96

Annex 8: Map .............................................................................................................................113

i

PAD DATA SHEET

REPUBLIC OF KENYA

NATIONAL URBAN TRANSPORT IMPROVEMENT PROJECT (P126321)

PROJECT APPRAISAL DOCUMENT .

AFRICA

AFTTR

.

Basic Information

Date: July 9, 2012 Sectors: Urban Roads and Highways (85%), Railways (5%),

General transportation sector (10%)

Country Director: Johannes Zutt Themes: Infrastructure services for private sector development

(20%), other urban development (10%), city-wide

infrastructure and service delivery (70%) Sector

Manager/Director:

Supee Teravaninthorn/

Jamal Saghir

Project ID: P126321 EA

Category:

B - Partial Assessment

Lending Instrument: Specific Investment Loan

Team Leader(s): Josphat O. Sasia

Joint IFC: No

Borrower: Republic of Kenya

Ministry of Finance

The Treasury

P. O. Box 30007-00100

Nairobi, Kenya

Tel: (254-20) 2252299 Fax: (254-20) 2240045

Responsible Agency: Kenya National Highways Authority (KeNHA)

Contact: Eng. Meshack Kidenda Title: Director General

Telephone No.: 254208013842 Email: [email protected]

Responsible Agency: Kenya Urban Roads Authority (KURA)

Contact: Eng. Joseph N. Nkadayo Title: Director General

Telephone No.: 254202508033 Email: [email protected]

Responsible Agency: Kenya Railways Corporation (KRC)

Contact: Mr. Nduva Muli Title: Managing Director

Telephone No.: 254202210111 Email: [email protected]

Responsible Agency: Ministry of Roads (MoR)

Contact: Eng. Michael S. M. Kamau Title: Permanent Secretary

Telephone No.: 254202723155 Email: [email protected]

ii

Responsible Agency: Ministry of Transport (MoT)

Contact: Dr. Cyrus Njiru Title: Permanent Secretary

Telephone No.: 254202729800 Email: [email protected]

Project Implementation

Period:

Start Date: August 3, 2012 End Date: December 31, 2018

Expected Effectiveness

Date: December 3, 2012

Expected Closing Date: December 31, 2018

Project Financing Data(US$M)

[ ] Loan [ ] Grant Term:

Standard IDA terms, with a maturity of 40 years, including a grace period

of 10 years [X] Credit [ ] Guarantee

For Loans/Credits/Others

Total Project Cost (US$M): 413.11

Total Bank Financing (US$M): 300.00

Financing Source Amount(US$M)

BORROWER/RECIPIENT 113.11

International Development Association (IDA) 300.00

Total 413.11

Expected Disbursements (in USD Million)

Fiscal Year 2013 2014 2015 2016 2017 2018

Annual 7.00 30.00 60.00 70.00 75.00 58.00 0.00 0.00 0.00

Cumulative 7.00 37.00 97.00 167.00 242.00 300.00 0.00 0.00 0.00

Project Development Objective(s)

The Project Development Objectives (PDO) are to: (a) improve the efficiency of road transport along the Northern

Corridor; (b) improve the institutional capacity and arrangements in the urban transport sub-sector; and (c) promote the

private sector participation in the operation, financing and management of transport systems.

Components

Component Name Cost (USD Millions)

A. Support to Kenya National Highways Authority (KeNHA) to Upgrade

the Urban Road Transport Infrastructure.

223.26

B. Support to Kenya Urban Roads Authority (KURA) and Kenya Railways

Corporation (KRC) to Develop Selected Mass Transit Corridors.

59.70

iii

C. Institutional Strengthening and Capacity Building. 17.04

Compliance

Policy

Does the project depart from the CPS in content or in other significant respects? Yes [ ] No [ X ]

Does the project require any waivers of Bank policies? Yes [ ] No [ X ]

Have these been approved by Bank management? Yes [ ] No [ ]

Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ]

Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ]

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 X

Natural Habitats OP/BP 4.04 X

Forests OP/BP 4.36 X

Pest Management OP 4.09 X

Physical Cultural Resources OP/BP 4.11 X

Indigenous Peoples OP/BP 4.10 X

Involuntary Resettlement OP/BP 4.12 X

Safety of Dams OP/BP 4.37 X

Projects on International Waterways OP/BP 7.50 X

Projects in Disputed Areas OP/BP 7.60 X .

Legal Covenants

Name Recurrent Due Date Frequency

Subsidiary Agreement

Financing Agreement Reference Article IV 4.01 (a)

Effectiveness

Description of Covenant

A Subsidiary Agreement has been executed on behalf of the Recipient and each of the Project Implementing Entities.

Name Recurrent Due Date Frequency

Counterpart Funds Account

Financing Agreement Reference Article IV 4.01(b); and

Schedule 2 Section I G (2)

Effectiveness

Description of Covenant

The Recipient has opened and deposited into the Project Counterpart Funds Account: (a) an initial amount equivalent to

KES 30,000,000; and (b) thereafter, prior to the commencement of each calendar quarter, the amount of counterpart

funding agreed with the Association to be provided for such quarter pursuant to the quarterly interim unaudited financial

report for the Project provided by the Recipient for the preceding quarter.

iv

Name Recurrent Due Date Frequency

Project Implementation Manual

Financing Agreement Reference Article IV 4.01 (c); and

Schedule 2 Section I.H(1)

Effectiveness

Description of Covenant

The Recipient has prepared a Project Implementation Manual satisfactory to the Association.

Name Recurrent Due Date Frequency

Retroactive Financing

Financing Agreement Reference Schedule 2 Section IV B(1)

Retroactive Financing

Description of Covenant

No withdrawal shall be made for payments made prior to the date of the Financing Agreement except that withdrawals up

to an aggregate amount not to exceed SDR 3,300,000 equivalent may be made for payments made prior to this date but on

or after November 30, 2011 for Eligible Expenditures.

Name Recurrent Due Date Frequency

Project Coordinator

Financing Agreement Reference Schedule 2 Section 1 A(2)

December

31, 2012

Dated Covenant

Description of Covenant

The Recipient, through MoR, shall appoint or recruit a Project Coordinator with qualifications and experience and under

terms of reference satisfactory to the Association.

Name Recurrent Due Date Frequency

National Road Transport and Safety Authority and

the Nairobi Metropolitan Transport Authority

Financing Agreement Reference Schedule 2 Section

V (1)

December

31, 2014 Dated Covenant

Description of Covenant

The Recipient shall establish and thereafter maintain the National Road Transport and Safety Authority and the Nairobi

Metropolitan Transport Authority, both under terms of reference and with resources satisfactory to the Association,

supported by qualified and experienced staff in adequate numbers.

Name Recurrent Due Date Frequency

Budgetary Modules

Financing Agreement Reference Schedule 2 Section

V (2)

March 31,

2013 Dated Covenant

Description of Covenant

The Recipient shall ensure that KeNHA‘s and KURA‘s budgetary modules are customized to move from a manual to an

automated budgetary control system under terms of reference and in a manner satisfactory to the Association.

Team Composition

Bank Staff

Name Title Specialization Unit

Josphat O. Sasia Lead Transport Specialist Team Leader AFTTR

v

Farida Khan Operations Analyst Operations Analyst AFTTR

Dahir Elmi Warsame Senior Procurement Specialist Procurement Specialist AFTPC

Gibwa A. Kajubi Senior Social Development Specialist Social Development Specialist AFTCS

Felly Akiiki Kaboyo Operations Analyst Operations Analyst AFTTR

Noreen Beg Senior Environmental Specialist Environmental Specialist AFTEN

Nightingale Rukuba-Ngaiza Senior Counsel Counsel LEGAF

Wolfgang Chadab Senior Finance Officer Finance Officer CTRLA

Shamis Salah Operations Analyst Operations Analyst AFCE2

Svetlana Khvostova Operations Analyst Environmental Specialist AFTSG

Solomon Muhuthu Waithaka Senior Highway Engineer Senior Highway Engineer AFTTR

Josphine Kabura Ngigi Financial Management Specialist Financial Management AFTFM

Peter Warutere Senior Communications Specialist Communications Specialist AFRSC

Lucy Kang'arua Program Assistant Program Assistant AFCE2

Charlene D'Almeida Team Assistant Team Assistant AFTTR

Victor Mengot Transport Specialist Road Safety AFTTR

Vasile Nicolae Olievschi Railway Specialist Railway Expert AFTTR

Paul Guitink Transport Specialist BRT Expert (Consultant) AFTTR

Consultant Traffic Engineer Traffic Engineer AFTTR

Consultant PPP Specialist PPP Expert AFTTR

Consultant Urban Specialist Urban Transport Expert AFTTR

Non Bank Staff

Name Title Office Phone City

Locations

Country First

Administ

rative

Division

Location Planned Actual Comments

Kenya

1

REPUBLIC OF KENYA

National Urban Transport Improvement Project

PROJECT APPRAISAL DOCUMENT

I. STRATEGIC CONTEXT

A. Country Context

1. Kenya has recorded a comparatively higher economic growth after two decades of low

growth. In 2010, the Kenyan economy grew by 5.7 percent, arising mainly from a recovery in

agriculture and industrial outputs and a relatively balanced growth across all the sectors. Growth

prospects have improved. Inflation declined to below five percent in 2010 and investor

confidence grew rapidly, contributing to the doubling of the level of activity at the Nairobi Stock

Exchange. However, a recent rise in inflation, averaging 14 percent in 2011 compared to 3.9

percent in 2010, and the impact of drought slowed this growth to 4.3 percent in 2011.

2. The total population of Kenya has increased rapidly over the last 30 years, and it is

continuing to urbanize. The population was 15 million in 1979 and increased to 38.6 million in

2009, with an average annual growth rate of 2.5 percent in the recent past. The population in

urban areas is now 32 percent, up from 15 percent in 1979, and it is projected to reach 19.1

million or 37 percent in 2020 and 29.8 million or 47 percent in 2030 (Table 1). Similarly, the

population of the city of Nairobi was 828,000 in 1979 and now stands at over three million or 25

percent of the urban population, and it is projected to reach 5.2 million in 2020. The high

population growth experienced in urban centers is due to several economic and social factors.

The number of urban dwellers increased in search of employment and schooling opportunities as

market forces attracted labor to the urban areas from rural areas, where the returns to labor are

considered relatively lower. The higher standard of living and relative better access to basic

public services in urban areas compared to rural areas has worked as a catalyst for urban

migration. This has placed a tremendous strain on urban services, including transport, ultimately

affecting both economic productivity and citizens‘ quality of life. In parallel, the transport sector

is rife with externalities such as traffic accidents, noise and pollution associated with fuel

emissions.

Table 1: Kenya’s Population (in millions)

Category

Actual Projected

1979 1989 1999 2009 2020 2030

Rural 13.0 17.6 18.7 26.1 32.9 33.4

Urban 2.3 3.9 10.0 12.5 19.1 29.8

Total 15.3 21.5 28.7 38.6 52.0 63.0

Urban (percentage) 15% 18% 35% 32% 37% 47%

Source: Kenya National Bureau of Statistic, Census Reports, Various

2

3. Vision 20301, Kenya‘s long-term development strategy, aims at transforming Kenya into

a middle-income country. Under its economic pillar, gross domestic product (GDP) is expected

to grow at 10 percent per annum. This calls for the removal of bottlenecks for growth through

reforms and increased investment in infrastructure, including Information Communications

Technology, to unlock existing potential and productivity, promote competitiveness, and

improve access to public services, all of which are necessary to transform Kenya from a low- to a

middle-income country by 2030. Urban areas, as the engines of economic growth, would play a

crucial role in the realization of this vision. The World Bank‘s Country Partnership Strategy

(CPS), its 2008-09 Multi-Donor Infrastructure Diagnostic for Kenya, and its 2006 Poverty

Assessment all support this agenda, given that improved infrastructure is associated with the

movement out of poverty.

4. Significant growth in GDP (about 75 percent) is attributed to economic activities in

Kenya‘s urban areas, mainly through the growth of manufacturing and services. Poverty in

urban areas has, on the other hand, increased with the mushrooming of informal settlements in

major towns. Hence, establishing a medium- to long-term vision on the role of urban areas in

supporting Kenya‘s effort to develop to a middle-income country will inevitably become a policy

priority.

5. Much of the effort of the Government of Kenya (GoK) to accelerate economic

development is focused on geographical ―growth poles‖ such as Nairobi, Kisumu, Mombasa,

Eldoret and Nakuru - the largest urban centers with the highest industrial activity. They are all

located along the Northern Corridor, Kenya‘s most important transport route, and a crucial artery

for its land-locked neighbors. Most of the Northern Corridor road has either been recently

improved or improvement is underway. This corridor forms part of the main arteries in major

towns. The main challenge is that the sections of this corridor adjoining major towns and often

passing through them are heavily congested and require capacity expansion. In Nairobi, the GoK

attempted to respond to this challenge by offering a section of the corridor to the private sector

for expansion and tolling, through a concession, under the Nairobi Urban Toll Road Project

(NUTRP), which was to be supported by the World Bank Group. Unfortunately, this offer

attracted limited interest from the private sector, and the concessioning process took an

inordinate time (about eight years), during which period circumstances changed significantly

both at the project and country level, leading the GoK to cancel the process. The congestion in

the Northern Corridor through Nairobi remains one of the major bottlenecks on the flow of

traffic to Nairobi‘s Central Business District (CBD), Jomo Kenyatta International Airport (JKIA)

and neighboring countries.

B. Sectoral and Institutional Context

6. Transport in Kenya, as in other countries performs two key roles: (a) it connects Kenya

to the world economy; and (b) it links people to economic and social activities within Kenya.

Kenya can only compete effectively, if its international gateways and associated infrastructure

1 The Kenya Vision 2030 is the national long-term development blue-print that aims to transform Kenya into a

newly industrializing, middle-income country providing a high quality of life to all its citizens by 2030 in a clean

and secure environment.

3

are of international standards. The quality of Kenya‘s transport infrastructure and services has

been improving over the last five years, after many years of under-investment. Its continued

improvement, as well as the enhancement of policy reforms, should be a priority. Reversal of

the policy reforms, existing policies and approaches can only lead to failure of the sector, as the

basic institutional structure is undergoing major transformation. New approaches are needed,

including utilizing the private sector much more extensively and much more effectively.

(a) Institutional and Policy Reforms

7. Major policy and institutional reforms have been implemented in the transport sector.

These include, among others: (a) the creation of three new autonomous road authorities by

clarifying the ownership of national, rural and urban roads; (b) separation of policy formulation

from execution of programs; (c) creation of oversight and regulatory capability in aviation and

maritime sub-sectors; (d) provision of greater transparency and accountability in the use of

designated resources such as the over US$300 million generated annually from a fuel levy for

road maintenance; (e) enactment of new policies (e.g. a roads policy, which did not exist

previously); (f) the enhancement and management of the fuel levy funds for road maintenance

without interruption and across all parts of the country; (g) provision of financial autonomy to

the aviation sub-sector entities; and (h) the development and adoption of a 15-year road sector

investment plan (RSIP). In recognition of the importance of the provision of quality

infrastructure to support economic growth prospects, the GoK in its RSIP 2010–2024 has

allocated significant resources toward improvement of transport infrastructure. For instance,

transport sector budgetary allocation as a share of total GoK expenditure increased from 9.5

percent in FY2004 to 14 percent in FY2010.

8. Although the GoK is implementing a number of reforms across the transport sector

(including in roads, aviation, railways, and maritime, with the support of the Bank) in an effort to

improve sector performance, the urban transport has lagged behind the other sub-sectors. Urban

areas now face institutional challenges, insufficient staff capacity, and an inadequate framework

for transport policy and planning, lack of transport corridor management, and inadequate

operations and maintenance budgets. This has contributed to the inadequate attention paid to

urban transport issues, including the existing complex and weak institutional oversight and

regulatory capacity and inadequate investments in urban transport infrastructure and services in

Kenya‘s major towns for over two decades.

9. The current institutional framework for urban transport involves several entities with

partial and sometimes overlapping and contradictory mandates and responsibilities, posing

serious coordination challenges. Table 2 lists several institutions involved in urban transport

matters fragmented among as many as 15 organizations.

4

Table 2: The Current Institutional Arrangements for Urban Transport

No. Organization Responsibility

1. Ministry of Transport (MoT) Formulation of the national transport policy and

transport sector administration

2. Ministry of Roads (MoR) Formulation of the national road policy and road sub-

sector administration

3. Ministry of Local Government Administering and supporting the Local Authorities

and formulating the national policy on urban

development

4. Ministry of Nairobi

Metropolitan Development

Administering and formulation of the development

polices for the Nairobi metropolitan area

5. Ministry of Lands Land administration and supporting the Local

Authorities

6. Traffic Police Enforcement of traffic regulations

7. Kenya National Highways

Authority (KeNHA)

Development and maintenance of national roads

8. Kenya Urban Roads Authority

(KURA)

Development and maintenance of city and municipal

roads

9. Kenya Rural Roads Authority

(KeRRA)

Development and maintenance of rural and small

towns roads

10. Kenya Railways Corporation

(KRC)

Development and oversight of railways

11. Rift Valley Railways (RVR) Operational management of railways (concessionaire)

12. Kenya Revenue Authority Registration of vehicles

13. Local Authorities Development and management of local and urban

areas

14. Transport Licensing Board Licensing and route allocation of public transport

15. Kenya Roads Board Administration of the Road Maintenance Levy Fund

10. The draft Integrated National Transport Policy (INTP) of 2004, which has been approved

by Cabinet and sent to Parliament for discussion and endorsement (but is not yet adopted),

supports reforms in the urban transport management structure by, among other things: (a) setting

up a National Road Transport and Safety Authority (RTSA) and increased support for the

National Road Safety Plan; (b) setting up a Nairobi Metropolitan Transport Authority (NMTA);

and (c) establishing the legal and regulatory framework for railways. Both the proposed

National Urban Transport Improvement Project (NUTRIP) and Nairobi Metropolitan Services

Improvement Project (NaMSIP) will support the implementation of these efforts.

11. The road transport industry in Kenya includes large companies and individual owner-

operators; it is competitive and tariffs are determined by market forces. The industry responds

quickly to changes in demand, road conditions and regulations. However, private bus and matatu

(mini-bus) operators numbering over 16,000 in Nairobi, have operated in an environment with

minimal regulation to the extent that at present there is indiscipline and disregard for safety and

the environmental regulations. While the intention is not to over-regulate the public transport

sector, there will be an urgent need by NMTA to bring more discipline and enforcement of safety

5

and environmental regulations for matatu operations, thereby creating resistance to this change.

Similarly, the City Council of Nairobi (CCN), which currently manages traffic and parking in the

city, stands to lose that authority once this responsibility is transferred to NMTA, and may resist

such changes. Resistance to change could slow down the pace of transformation.

12. Existing urban transport arrangements (as discussed above) are likely to evolve in the

short- to medium-term as the new constitution (2010) and the agreed reforms are implemented,

thereby affecting the institutional and implementation arrangements of NUTRIP. Modifications

may be required to respond to these changes as they ensue. Notwithstanding these challenges

and pending changes, urgent action is needed now to tackle the highly congested situation in

Nairobi and other towns. Hence, some degree of acceptable flexibility for adjustments to be

made during implementation is allowed in the design of the project.

13. The draft INTP and the new constitution provide the long-term vision on the likely

governance structure in the urban transport subsector. Even though the INTP can be seen as

contributing to the establishment of even more entities, including the RTSA and the NMTA that

will be supported by NUTRIP, the existence of these new institutions will improve the

governance structure in urban transport. For instance, the objective of the proposed NMTA, in

the case of Nairobi, is to place all the public transport issues such as licensing, regulating public

transport, and traffic management under one agency, while all national road safety matters will

be placed under the proposed RTSA. The new constitution recognizes two categories of roads,

national and county, which calls for further changes in governance structures based on a

devolved rather than a centralized system of government (as was the case under the old

constitution), implying a further realignment of the mandates of Kenya National Highways

Authority (KeNHA), Kenya Rural Roads Authority (KeRRA) and Kenya Urban Roads Authority

(KURA) since most of the urban and rural roads could fall under the category of county roads.

14. The new constitution (2010) does not specify the requisite organizational structures for

GoK institutions and agencies, and there is likely to be some consolidation of ministries at the

national level and devolution of some powers and responsibilities to the county governments.

NUTRIP recognizes these uncertainties and makes provision for possible restructuring at or

before the Mid-Term Review (MTR) to adjust the implementation arrangements when the need

arises. In readiness for the implementation of the new constitution and the looming changes, the

GoK has responded by establishing an inter-ministerial committee for the transport sector to

review and recommend a governance structure consistent with the new constitution, and to

harmonize and rationalize the current institutional arrangements and functions, taking into

account the recommendations of the draft INTP and the roads policy, and other relevant policy

documents. The committee has started its work, facilitated under the Bank-financed Kenya

Transport Sector Support Project (KTSSP). Even if changes are recommended, the transition is

likely to take three to four years before capacity is built in the counties and new institutions take

over their responsibilities. Having recognized this risk, the project allows for any restructuring

that may be needed during implementation.

6

(b) Road Transport

15. The basic urban road network is still the one designed in the 1970s. For instance, in

Nairobi, the road network was designed for less than one million inhabitants, but it is now

contending (largely unsuccessfully) to handle three times that number of inhabitants in the city.

The urban road network, excluding those sections of national highways which traverse urban

areas, is about 12,549 km, or eight percent of the total road network (Table 3), which supports 32

percent of the total population and the generation of 75 percent of GDP in the country. The result

is massive congestion, and frequent episodes of serious gridlock, which will render Nairobi

unsuitable as a business destination unless it is addressed.

Table 3: Distribution of Kenya’s Road Network by Agency (in km unless specified)

Agency Paved Unpaved Total % share

Kenya National Highways Authority (KeNHA) 6,783 6,904 13,687 8.5

Kenya Rural Roads Authority (KeRRA) 2,268 127,799 130,067 80.8

Kenya Urban Roads Authority (KURA) 2,140 10,409 12,549 7.8

Kenya Wildlife Service (KWS) 6 4,577 4,583 2.9

Total 11,197 149,689 160,886 100

Percentage share (%) 7 93 100 Source: Road Inventory and Condition Survey, Ministry of Roads, 2009

16. Decongestion of the main artery (Northern Corridor) that passes through the middle of

Nairobi and the development of new infrastructure surrounding the city is critically important to

Nairobi‘s future as a modern growth-generating urban capital. Achieving decongestion would

help to achieve that vision. The 2006 Japan International Cooperation Agency (JICA)-financed

Nairobi master plan study estimates the cost of sub-performance of intersections at KES 22.59

billion annually (2006 prices). This is a major cost to the economy.

17. Similarly, the draft INTP of 2004 indicates that 91.8 percent of Nairobi‘s road transport

arteries operate over their design capacities, resulting in frequent day-long traffic jams. It

recommends encouraging a shift to large capacity vehicles by public transport operators and to

redesign the urban traffic flows and create dedicated infrastructure for the exclusive use of large

capacity buses, i.e., a Bus Rapid Transit (BRT) system. The Mass Rapid Transit Study (MRTS)

of 2011, financed by the African Development Bank (AfDB), identified nine corridors as

potential BRT routes, based on travel demand forecasts for 2030 consistent with Vision 2030.

The proposed NUTRIP will finance the preparatory work, feasibility and detailed designs,

including Environmental and Social Impact Assessments (ESIAs), for selected BRT corridors,

covering both the engineering and operational features that constitute a BRT system. Upon

completion, the designed BRT system would lay the ground work for a successor urban transport

operation, possibly to be supported by the Bank and other development partners.

18. Poor town planning serves to exacerbate the urban transport problem. For instance, on an

ordinary day, it takes an average of more than one hour for commuters living less than 10 km

away to reach the CBD of Nairobi. Motorization is increasing, with about 1.62 million vehicles

in 2011 compared to 591,000 in 2000 on Kenyan roads (an average growth rate of about nine

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percent per annum), of which over 40 percent are private cars, most of them used in urban areas.

Public transport vehicles such as buses and mini-buses registered a growth rate of about five

percent per annum during this period. Vehicle ownership rates, congestion, and emissions are

expected to increase significantly through the next 20 years, with average travel speeds and

accessibility continuing to decline. Poor drainage system leads to roads flooding for long periods

of time, causing congestion and mobility difficulties, particularly for the vulnerable groups

including pedestrians, children, women and other road users. Without immediate investment in

urban transport infrastructure, traffic management and services, the average trip speed (all

modes) will decline and also the average roundtrip journey time to work will increase.

Accordingly, the economic cost of a ―do-nothing‖ scenario is likely to run into billions of

shillings per annum in terms of opportunity cost and lost productivity, due to time wasted in

traffic jams.

19. Urban entities face institutional weaknesses such as insufficient staff capacity, inadequate

framework for transport policy and planning, lack of transport corridor management, and

inadequate operations and maintenance budgets. Yet, mobility and accessibility provided through

efficient and affordable urban transport is recognized as a catalyst for higher productivity, greater

access to economic opportunities, and social inclusion. Across urban transport modes in low-

and medium-income countries, public transport plays a pivotal role to enhance city efficiency—

hence the provision of an efficient public transport infrastructure becomes critical.

20. The ineffective institutional structures and weak legal and regulatory framework have

impacted negatively on the quality, reliability and safety for the public transport users,

particularly in urban areas. In addition to poor public transport services, the inter-modal linkages

and connectivity are minimal, if any at all. The highly unregulated matatus (mini-buses) are the

backbone of the public mass transport system. Studies indicate that matatus carry about 33

percent of urban commuter traffic, while about 47 percent of residents of Nairobi walk to their

places of work (MTRS, 2011). In the Nairobi metropolitan area, it is estimated that public buses

carry about 350,000 - 400,000 passengers per day (about 19 percent) and the balance is

commuter rail.

(c) Rail Transport

21. The railway network is skeletal and offers negligible public transport services at present.

The draft INTP of 2004 summarizes the rail transport in Kenya as manifesting the following

features: (a) weak corporate governance and lack of managerial independence; (b) comparatively

high operational costs; (c) inadequate investments in infrastructure and operations; (d) outdated

railway technology; and (e) political interference in resource allocation and loss of commercial

customers. In 2006, Kenya Railway Corporation (KRC) concessioned the rail services to Rift

Valley Railways (RVR), giving RVR the exclusive right to operate rail freight and commuter

services, thereby shifting the operational function and risks to the concessionaire. In accordance

with the concession agreement, RVR was to operate the commuter rail services until June 30,

2012. Recently, the GoK approved an extension of this agreement for RVR to operate passenger

trains for an additional period of three years.

8

22. Commuter rail has been providing some morning and evening peak-hour passenger

services since 1992, carrying about one percent of passenger traffic. However, the rail system is

rapidly deteriorating, due to inadequate funding, unclear management structures and poorly

defined service provision (especially passenger services), resulting in serious infrastructure

maintenance backlogs and overage and worn-out rolling stock. Development of a comprehensive

and coherent urban transport system is therefore, required including good inter-agency

coordination. NUTRIP and NaMSIP, also financed by World Bank, seek to address some of

these issues.

23. Urban rail commuter passenger services in Nairobi city are offered on three routes with

all the trains terminating at the central railway station. Most people are not linked to railways.

Motive power for passenger services is provided from the concessionaire’s (RVR) pool of aged

diesel locomotives that are poorly suited for the purpose.

24. Furthermore, locomotives are shared with freight services that take priority in rail access

and locomotive power allocation, resulting in frequent cancellation of passenger services. Thus,

the reliability and quality of passenger operations are limited by the condition of the

infrastructure network, the lack of adequate rolling stock, and the higher priority given to the

potentially profitable freight rather than the passenger services. This is one of the risks to be

addressed and is the basis of further reforms in the rail sub-sector, requiring the establishment of

modalities that will facilitate equitable access for freight and passenger services. On top of this,

commuters still spend a lot of time changing from one mode of transport to another because of a

lack of intermodal terminals that would facilitate rapid and convenient change of transport

modes. As a result, railway modal share in urban passenger transport stands at 22,000 passengers

per day (one percent of public transport demand), despite the potential demand for rail services

in densely-populated urban areas served by the core network. The development of a regulatory

framework for railways is in progress under the Bank-financed KTSSP.

25. KRC operations are governed by the KRC Act and its operations are also subject to the

provisions in the State Corporations Act and the Exchequer and Audit Act. Therefore, guidelines

that are issued from time to time on the operations of the State Corporations by the GoK

influence the management and operation of the KRC and occasionally inhibit management‘s

decision-making process through directions from various GoK agencies.

26. Although the KRC Act does not limit further privatization of railway operations, the

Kenya Concession Agreement between the GoK, KRC and RVR works against it. The

Agreement is not based on the principle of open access to newcomers in the commuter rail

market. Since RVR is responsible for rail freight operations and maintaining the infrastructure, it

is inevitable that priority will be given to the freight trains, the more profitable business.

Assuming access is granted to a new private service provider, RVR, as the provider of track

maintenance, will set the maintenance priorities and grant the right for accessing the track at a

fee. The Bank-financed KTSSP is therefore providing assistance for reforming the railways sub-

sector, by developing a legal and regulatory framework that will encourage the development of a

competitive, efficient railway system anchored in a transparent contractual relationship between

the GoK and KRC for services to be provided, directly or via concession contracts, covering

9

(multi-annual) infrastructure maintenance contracts, public service contracts and compensatory

mechanisms for the procurement of passenger rolling stock.

(d) Bus Transport

27. BRT systems are emerging all over the world, including in the United States of America,

Latin America and Europe, because of their relatively low implementation costs. For instance,

construction costs for BRT are estimated at about 10 percent of metropolitan rail construction

costs and 30-50 percent of light rail (tram) construction costs, with passenger volumes between

10,000–40,000 passengers per hour in each direction, depending on the system layout

characteristics. However, it should be emphasized that successful introduction of BRT systems,

based on Bank experience elsewhere, requires strong political commitment to deal with deep

vested interests linked to the provision of conventional, inefficient transport services.

28. Studies aimed at addressing urban public challenges have been carried out in Nairobi in

the recent past. For instance, the MRTS for the Nairobi metropolitan region (2011) and a study

on the master plan for urban transport in the Nairobi metropolitan area (2006), financed by JICA,

highlight some of the main transport-related challenges facing major towns and cities in Kenya,

which include: worsening traffic congestion; institutional segregation and inadequate financial

resources; poor public road transport systems; noise and air pollution (greenhouse gas emissions)

from vehicles in the major towns; and high accident rates (with Nairobi recording over 2,000

fatal accidents annually over the last four years and about 3,000 people dying annually from all

road crashes on Kenyan roads). Mass transit systems, building capacity, and streamlining

institutional arrangements could help address part of this challenge. The relevant activities will

be supported under NUTRIP.

29. The MoT has been building support for the establishment of NMTA through

consultations, such that the Cabinet has approved the INTP. The INTP calls for the creation of

NMTA and RTSA and introduction of high-capacity buses (phasing-out matatus), among other

recommendations. Component B under the project (Support to KURA and KRC to Develop

Mass Transit Corridors) includes preparatory work for the introduction of BRT systems and

measures to involve the matatu owners and private bus operators in participating in the provision

of these services. The measures would include franchises to run larger buses on BRT routes

while focusing mini-buses on feeder routes, learning from the experience of similar efforts in

Dar es Salaam, Tanzania; South Africa; and Nigeria among other African countries. In order to

develop an integrated urban public transport system, the GoK has plans to reform further the

railway subsector, particularly with regard to the establishment of a clear regulatory framework

to support and deepen private sector participation over and above the current railway concession.

The process of selecting a consultant to support the implementation of this decision has begun,

with financing from the Bank-financed KTSSP.

30. Given the experience on BRT systems elsewhere, and in an effort to improve urban

public transport, the GoK has decided to incorporate mass transit systems measures

recommended by various studies in the improvement of roads in Nairobi, such as the Northern

Corridor through Nairobi (part of Component A of NUTRIP). For this reason, the consultant

carrying out the detailed designs, with GoK financing, for upgrading of the JKIA-Rironi road

10

section has been instructed to include BRT systems in the detailed designs. The upgrading

works will be financed under NUTRIP. It is probable therefore that the JKIA-Rironi BRT

corridor will be ready for development much earlier than the rest, calling for possibly additional

financing under NUTRIP. In addition, KURA is preparing short-term traffic management

measures for the Nairobi CBD that could be implemented as part of the BRT preparation, which

could include the provision of sidewalks, pedestrian crossings and direct and safe pedestrian and

bicycle routes, and could also encompass the establishment of a CBD traffic management control

center.

(e) Road Concessions and Tolling

31. In an effort to promote private sector participation in financing and managing road

infrastructure, the GoK offered a section of the Northern Corridor road passing through Nairobi

for tolling. The Bank financed the advisory services for this concession under NCTIP. The

process began in 2003 and it was not until 2007 when the bids were invited, under another IDA-

financed project. This followed the outcome and recommendations of feasibility studies

conducted by internationally recruited consultants. While three firms were pre-qualified, only

one consortium submitted a bid. The sponsors had requested the World Bank Group, among

others, for partial financing of the capital investment and provision of guarantees against political

risks. However, the World Bank Group could not support the consortium after it emerged that

significant changes had occurred over the intervening period (nine years) at both project and

country level, rendering the implementation of the project untenable. As a result, the GoK

decided to terminate the concessioning process.

32. An important lesson learned from the ―failed‖ concession is the risk involved in

structuring Public Private Partnerships (PPPs) for toll roads on a single project-by-project basis.

It took three years to undertake the initial pre-feasibility studies, a further four years to prepare

and invite bids for the concession and another two years to do the due diligence on the sponsors,

yet in the end, the concession agreement was not signed. If the same process is used on the next

toll road to be constructed, the risk is high that it could also fail and a significant amount of time

and effort would be lost.

33. KeNHA is mandated through the Kenya Roads Act (2007) to charge tolls, to establish or

acquire subsidiary corporations and enter into agreements with any state-owned or other entities

to promote its business of delivering road infrastructure and services. It is therefore suggested

that the initial effort be spent to: (a) carry out an option study on private sector participation in

managing and financing road investments; and (b) implement the recommendation of the option

study and prepare the requisite bidding documents. The study will inform the GoK of the

preferred option after examining the alternative ways to enhance KeNHA‘s capacity in

mobilizing private sector financing and structuring PPPs in an expeditious and efficient manner.

For this purpose, NUTRIP provides for selection of a consulting firm with experience to support

KeNHA to develop the concept and formulate alternative strategies to create such a capacity in

KeNHA. Thereafter, NUTRIP will support KeNHA to implement the selected strategy, drawing

on the lessons from and recent experiences of other road authorities tasked with similar

responsibilities, such as the South African National Roads Agency, Rajasthan Infrastructure

Development Corporation of India, Thailand Expressway Authority and others focused on

11

raising private sector financing for viable toll roads and tendering competitive contracts for

construction of the high speed facilities and managing toll collection.

34. In parallel to the above effort, the ongoing KTSSP supports a comprehensive study of the

entire Northern Corridor in Kenya from Mombasa to Malaba, including aerial mapping, with the

aim of: (a) identifying a suitable alignment for a multi-lane high speed facility (preferably a

controlled access expressway); (b) estimating costs on the basis of preliminary designs; (c)

packaging suitable sections for PPP; and (d) developing a timetable for completing the entire

highway in a fixed time period. As the strategy for enhancing KeNHA‘s capacity for developing

PPPs and mobilizing private sector is adopted, delivering the Mombasa-Malaba multi-lane

expressway in stages could become the first priority.

(f) Governance

35. Governance in the transport sector has been challenging, but significant improvements

have been made in the recent past. Risks included complex institutional arrangements; unclear

responsibility and ownership arrangements of the road networks; collusion and other forms of

bid rigging; fraud during implementation; and overloading of vehicles that destroyed the road

infrastructure, among others. To mitigate the risks and enhance integrity, the Bank and the GoK,

with the guidance of the Integrity Vice Presidency (INT), agreed on a Roads Sector Governance

and Integrity Improvement Action Plan (GAP), which is being implemented under NCTIP, and

where appropriate, has been adopted for the ongoing KTSSP financed by the Bank.

36. The GoK has implemented or is implementing the agreed GAP actions. For instance, new

autonomous road authorities have been established, thereby clarifying the institutional

arrangements in the road sub-sector. There is now public dissemination of road programs and

opportunities. Contract awards are published; and international standards of practice for

management of large contracts are gradually being adopted, even for GoK-funded contracts (e.g.

an independent consultant is appointed as the ―Engineer‖ on all major construction works). In

addition, reinforcement of procurement regulations and road maintenance manuals have been

developed and are in use.

37. The oversight functions are also being strengthened. Parliament has approved the

establishment of a regulatory body for the construction industry (National Construction

Authority) with powers to register contractors, monitoring their performance and publishing

names of poor performers and those that are debarred. Similarly, Parliament has approved the

strengthening of the regulatory body for consulting and practicing the engineering profession

(Engineers Board of Kenya), with powers to register professionals and engineering firms, assess

their qualifications, monitor their performance, and exercise the right to sanction poor

performance or unethical behavior. Transparency and accountability are also improving, such

that a new road policy was enacted that clarified the institutional arrangements in the road sub-

sector and adopted a long-term road sector investment plan. Lastly, in-depth analysis of the cost

of road construction is improving. Cost estimation manuals have been developed and launched;

construction unit costs are investigated and estimated more rigorously; and bids under both

Government- and donor-funded projects are subjected to much higher levels of scrutiny than

before, and bids are invited without pre-qualification to reduce chances of collusion.

12

38. Implementing a combination of these GAP measures in the road sub-sector has therefore

resulted in improving the business environment, increasing competition, and the GoK obtaining

comparatively more competitive bids than before (from two to three bids to over nine on

average), with some final prices below the engineer‘s estimates. Similarly, NUTRIP, where

appropriate, will adopt relevant aspects of the GAP: in particular unit costs will be rigorously

investigated and estimated; stringent due diligence will be done of bidders, consultants and

suppliers; bids and qualifications will be subjected to much higher levels of scrutiny; use of post-

qualification of bidders for large works contracts will be continued; and the ―Engineer‖ will be

the independent works supervision consultants.

(g) Sector Investments Plans

39. The urban public transport services currently offered do not cater to the needs of the

majority, who still walk to their places of work. To improve delivery of transport services in the

country, a 15-year (2010-2024) Road Sector Investment Plan (RSIP) has been developed and

adopted with clear priorities, and a 50-year transport master plan (involving all modes of

transport with a specific 10-year investment plan) is proposed to be prepared to complement the

agreed institutional and policy reforms. The selection of a consultant to develop the 50-year

transport master plan is underway and the assignment will be funded through the Bank-financed

NCTIP. In addition, targeted studies have been carried out, including feasibility of mass transit

systems and a road network master plan for Nairobi.

40. These studies have recommended priority interventions, such as improving existing road

corridors; constructing critical complementary missing road links; developing mass transit

corridors, including commuter rail and BRT systems; addressing the poor drainage system in

urban areas; and providing safe and direct facilities for Non-Motorized Transport (NMT). The

studies are focused on, but not limited to, improvement of public transport access which is

required to address the high traffic congestion that is having serious economic consequences on

reducing labor productivity, leading to losses in GDP and contributing to an already deteriorating

situation of air pollution. The Bank supports the implementation of the 15-year RSIP, which

includes urban transport investments such as those proposed under the NUTRIP. However, there

is no coherent urban transport sector strategy to support the development of an efficient urban

transport system, including BRT systems and commuter rail services. NUTRIP will therefore

support its development.

Rationale for Bank Involvement

41. The urban transport subsector has received little attention for almost three decades.

Accordingly, the myriad and complex issues related to the provision of urban public transport

services and infrastructure remain largely unaddressed, compared to the other transport sub-

sectors where the World Bank has been engaged for a longer period and significant reforms have

been carried out, leading to improvement of delivery of services. The recent re-engagement by

the World Bank in the urban transport sub-sector has enhanced the momentum of the GoK in

addressing urban public transport issues, including agreeing to implement reforms that have

posed a significant challenge in the past. This will also consolidate and build on the benefits

achieved in other sub-sectors in Kenya‘s transport sector, notably roads and aviation, with World

13

Bank assistance.

42. The World Bank has experience from other countries in developing mass transit corridors

such as BRT and Light Rail Transit (LRT) systems, particularly in creating the requisite

implementation and regulatory capacity, and this experience could be shared and offer relevant

lessons. Furthermore, to enhance network continuity and consistency, construction works are

ongoing to upgrade some of the major road arteries in Nairobi, such as: (a) the Thika road, (b)

the eastern bypass, (c) the northern bypass, (d) the southern bypass, and (e) the junction on

Airport North Road/Outer Ring Road. It is therefore critical that the adjoining section of the

Northern Corridor through Nairobi (namely JKIA turnoff–Rironi, which forms the main road

artery) is improved, complemented by improvement of other junctions and effective traffic

management measures. The NUTRIP will support expansion of this corridor.

C. Higher Level Objectives to which the Project Contributes

43. The proposed project will support Kenya‘s economic development strategy, and address

the mounting pressures on the major urban centers (mainly Nairobi) as well as road and related

transport infrastructure, while also laying the foundation for developing an efficient urban public

transport system (see map for the project area in Annex 8). This will help to: (a) increase

capacity of the urban road network, rationalize the use of scarce road space, and improve traffic

flows and reduce traffic accidents along the key road artery, partly caused by heavy vehicles

travelling to and from the port of Mombasa; (b) promote the development of Nairobi‘s economy,

focusing on satisfying the transportation demands going in and out of the city, including proper

management of trucks in the city; (c) connect efficiently with the other urban traffic

infrastructure systems currently under construction (Thika road to the north, and the eastern and

southern bypasses); (d) prepare a model mass transport system aimed at providing affordable and

efficient public transport services in urban areas, particularly for serving the low-income

populations, especially in the CBD of Nairobi and along the developed high density corridors;

and (e) build the operational and managerial capacity and efficiency of urban transport agencies

in dealing with urbanization and transportation.

44. The project is also aligned well with the Bank‘s Africa Strategy,2 which is built on the

foundation of governance and public sector capacity. The proposed institutional reforms and

technical assistance interventions will significantly improve governance in the urban transport

sector, especially by consolidating the various fragmented functions under one autonomous

institution, namely the proposed NMTA. It will be further enhanced by the adoption of the INTP

as the main framework for public sector investments in transport; capacity will be enhanced

through the provision of targeted technical assistance to improve the delivery of public transport

services. Furthermore, the project supports the key pillar of the Africa Strategy, namely,

competitiveness and employment, by improving the business environment in Nairobi and other

urban areas through reduction of traffic congestion and transport costs in addition to creation of

jobs, not only during the construction phase but also as a result of the multiplier effect of an

improved economy.

2 Africa‘s Future and the World Bank‘s Support to It, The World Bank, March 2011

14

45. The proposed NUTRIP will build on recent positive changes in the transport sector and

will deepen and support the implementation of the ongoing policy and institutional reforms; the

implementation of the 15-year investment program in the road sub-sector and mass transit

systems; implementation of the INTP; and implementation of the Bank‘s Country Partnership

Strategy for Kenya, which emphasizes developing an efficient transport system needed for a

modern economy.

II. PROJECT DEVELOPMENT OBJECTIVES

A. Project Development Objectives

46. The Project Development Objectives (PDO) are to: (a) improve the efficiency of road

transport along the Northern Corridor; (b) improve the institutional capacity and arrangements in

the urban transport sub-sector; and (c) promote private sector participation in the operation,

financing and management of transport systems.

47. Objective (a) would be achieved by financing the improvement of the Northern Corridor

road section from the JKIA turnoff through Westlands to Rironi road, i.e., through central

Nairobi, as well as associated service roads and major junctions; by improving the access road to

JKIA; and by building the Kisumu bypass.

48. Objective (b) would be achieved by helping to establish and build the capacity of a public

urban transport authority, with responsibility for coordinating and regulating public transport,

recommending policies on pricing and investments, financing equipment and related traffic

management systems to rationalize the use of urban road space, and facilitating smoother traffic

flows in Nairobi (including traffic signaling systems). The authority will also be responsible for

conducting the feasibility and detailed engineering and operational designs for selected pilot

BRT corridors in Nairobi, including their integration with other public transport modes

(predominantly feeder buses and commuter rail) and improved accessibility to public transport

stations and stops for NMT; and for preparatory work for improving selected commuter rail lines

and congested road sections in urban areas.

49. Objective (c) would be achieved by the GoK offering one BRT corridor and one

commuter line for operation to the private sector, and KeNHA developing and adopting a

preferred option of building its capacity in private sector participation in managing and financing

road investments.

50. The improvement of public urban transport would support the mobility of the low-income

populations in urban areas who comprise the main users of public transport; reduce traffic

congestion, reduce transport costs, travel time, air pollution and improve service delivery to

citizens.

B. Project Beneficiaries

51. The improvement of parts of the Northern Corridor road through Nairobi will support

decongestion of Nairobi, facilitate improved road access to Nairobi‘s international airport,

facilitate regional and international trade, and lay the foundation for the development of mass

15

transit systems that would benefit the low-income populations in the project area and beyond.

The major road corridors serve high potential, productive and populous areas, particularly

Nairobi, with a population of over three million and home to the largest industrial base in the

country. The Northern Corridor is also the main transport backbone for Eastern Africa, linking

Uganda, Tanzania, South Sudan, Rwanda, Burundi and Eastern Democratic Republic of Congo

to the port of Mombasa.

52. The main beneficiaries of the identified road, public transport and traffic management

improvements are the road users, including businesses, and local communities in the project area.

Based on the 2006 traffic figures, about 300,000 direct beneficiaries, of which about 40 percent

are female (road users excluding bicycle riders), use these road sections per day. The travel time

along these road sections is expected to fall by at least 30 percent and vehicle operating costs are

expected to be reduced by 25 percent with the proposed improvements; and the provision of

road-side amenities, including bicycle tracks, pedestrian crossings, service roads along the

selected road sections, and improvement of junctions will enhance road safety. Finally,

strengthening the capacities of the institutions in the transport sector will enhance the delivery of

services to all Kenyans.

C. PDO Level Results Indicators

53. The PDO results indicators are as follows:

(i) Reduction in average travel time from the junction for Jomo Kenyatta International

Airport (JKIA) to Rironi road;

(ii) Reduction in vehicle operating costs from the junction JKIA to Rironi road;

(iii) Number of road users per day (of which % female) directly benefitting from the

project;

(iv) Improved institutional capacity in the urban transport sub-sector through establishment

of the NMTA, RTSA and development and use of urban public transport rules and

regulations;

(v) PPP promotion and development of private sector opportunities in the transport sector;

and

(vi) Number of road crashes reduced along the road from JKIA to Rironi road.

III. PROJECT DESCRIPTION

A. Project Components

54. The project activities will support: (a) the implementation of policy and institutional

reforms in transport, particularly urban public transport; (b) the creation of institutional capacity

to provide oversight and regulatory functions to support the delivery of urban public transport

services; (c) the preparation of appropriate investment interventions that would promote urban

public mass transit systems; and (d) financing infrastructure improvements to decongest major

towns necessary to support Kenya‘s long term development strategy (see Annex 2 for details).

16

55. Component A: Support to KeNHA to Upgrade the Urban Road Transport

Infrastructure (total cost US$311.15 million, of which IDA US$223.26 million). The selected

road sections are among the top priorities in the RSIP. This component will involve:

(a) Expanding and upgrading the Northern Corridor road section through Nairobi from

JKIA turnoff to Rironi road, as well as associated service roads and access roads; all

through provision of goods, works and services.

(b) Constructing the Kisumu northern bypass road.

(c) Constructing and rehabilitating non-motorized transport facilities, including foot paths,

cycle tracks, pedestrian bridges and underpasses.

(d) Carrying out feasibility and detailed engineering design studies of roads adjoining

major towns and studies for improvement of traffic flows through provision of

technical advisory services.

(e) Strengthening the capacity of KeNHA by: (i) supplying and installing a management

information system; (ii) developing a safeguards framework for the road sector; (iii)

carrying out an option study on private sector participation in managing and financing

road investments; (iv) implementing the recommendation of the option study and

preparing the requisite bidding documents; and (v) improving its capacity for contract

management, monitoring and evaluation through training and provision of technical

advisory services.

(f) Strengthening the capacity of the External Resources Department and the State Law

Office to support effective management of the Project, through training and provision

of technical advisory services.

(g) Supervising road works constructed under Component A of the Project and provision of

technical advisory services.

(h) Establishing a program to address Human Immunodeficiency Virus/Acquired Immune

Deficiency Syndrome (HIV/AIDS) in all the roads contracts, through provision of

goods and services.

56. Component B: Support to KURA and KRC to Develop Selected Mass Transit

Corridors (total cost US$80.46 million, of which US$59.70 million IDA). The activities under

this component of the project--which include carrying out feasibility studies and detailed

engineering designs and preparation of bidding and contract documents for works and associated

facilities as well as selection of private sector operators to provide large capacity buses for a

BRT system and rolling stock for a commuter rail system—are a precursor for a successor

project. The follow-on activities could materialize in the short to medium term. This therefore

requires (i) the GoK simultaneously to prepare an urban public transport development strategy

and address the associated regulatory and oversight issues associated with the provision of urban

public transport; as well as (ii) flexibility in the financing plan, including a possibility of

additional financing.

57. Under this component, the feasibility studies on the proposed BRT systems will include

an ESIA which will evaluate environmental issues associated with direct and indirect impacts

during the planning, construction, and operation phases, and outline its implementation in

relation to other aspects of project preparation, design, and implementation. Similarly the

feasibility studies on the proposed commuter rail lines will include an ESIA for the construction

17

of the high-density commuter railway line and its associated facilities. The EIA will address

environmental impacts which may arise from construction and operation activities and provide a

mitigation plan to prevent or minimize adverse impacts. This component will comprise two sub

components, B1 and B2.

58. Sub-component B1. KURA (sub-total cost US$64.83 million, of which US$47.77

million IDA). This component will involve:

(a) Carrying out a range of feasibility studies, including detailed designs, and preparing

bidding documents for selected Bus Rapid Transit (BRT) road corridors through

provision of technical advisory services.

(b) Providing public transport and associated services through provision of technical

assistance.

(c) Developing and implementing a scheme to decongest major urban areas through

provision of goods, services and works.

(d) Carrying out activities to improve traffic management, including construction of traffic

control centers, provision of traffic management Information Communication

Technology (ICT) solutions, all through the provision of goods, works and services.

(e) Implementing regulatory reforms to rationalize the provision of public transport

services and strengthen the management of public transport operations, through

provision of services.

(f) Constructing the Meru bypass roads.

(g) Strengthening the capacity of KURA to implement urban transport reforms through

training and provision of goods, services and technical assistance.

(h) Building the capacity of KURA‘s staff in traffic planning, management, regulation and

involvement of private sector in financing urban transport infrastructure and relevant

services, through provision of services and training.

(i) Carrying out: (i) feasibility and detailed engineering design studies of missing road

links in major towns, (ii) a study and also developing an urban transport plan for the

city of Mombasa, and (iii) a study for the improvement of traffic flows of major towns,

all through provision of technical advisory services.

(j) Supervising road works construction in Sub component B1 of the project, through

provision of technical advisory services.

(k) Establishing a program to address HIV/AIDS in all the roads contracts, through

provision of goods and services.3

59. Sub-component B2. KRC (sub-total cost US$15.63 million, of which US$11.93 million

IDA). This component will involve:

(a) Carrying out feasibility studies and detailed designs; and preparing the necessary

bidding documents for construction of selected commuter rail systems in Nairobi and

other major towns through provision of technical advisory services.

(b) Preparing bidding and contract documents for the selection of private sector operators

providing commuter rail operations and associated services; through provision of

advisory services.

3 The HIV/AIDs program is for all road contracts under Component A and Sub-component B1 in the project.

18

(c) Supplying and installing information systems (IT) and building the capacity of KRC in

IT, management of private sector involvement, planning, management of contracts

including for concessionaires; and other oversight functions; all through provision of

goods, training and services.

60. Component C: Institutional Strengthening and Capacity Building (total cost

US$21.50 million, of which US$17.04 million IDA): This component will support and deepen the

implementation of reforms in the transport sector with a major focus on urban transport. This

component has two sub components, C1 and C2.

61. Sub-component C1. Ministry of Transport (sub-total cost US$16.90 million, of which

US$13.44 million IDA). This component will involve:

(a) Implementing selected activities in the Integrated National Transport Policy agreed

with the Association, including establishing and developing the capacity of the

proposed National Road Transport and Safety Authority to carry out its functions, all

through provision of goods, works, and services.

(b) Establishing and strengthening the capacity of the proposed Nairobi Metropolitan

Transport Authority to carry out its functions through provision of goods and services.

(c) Strengthening the capacity of the East Africa School of Aviation, and promoting private

sector participation in the aviation sub-sector, through provision of technical advisory

services.

(d) Carrying out urban transport sub-sector studies, and providing technical advisory

services.

(e) Building the capacity of MoT staff to carry out their responsibilities, through training

and provision of technical advisory services.

62. Sub-component C2. Ministry of Roads (sub-total cost US$4.60 million, of which

US$3.60 million IDA). This component will involve:

(a) Strengthening the capacity of MoR staff to carry out its responsibilities, including

monitoring and evaluation of the Project, through training, provision of goods and

services.

(b) Building the capacity of the newly established National Construction Authority and

preparing the implementing regulations for the National Construction Authority Act

(2011), through provision of goods and services.

(c) Building the capacity of the newly established Engineers Board of Kenya and

developing the implementing regulations for the Engineers Act (2011), through

provision of goods and services.

B. Project Financing

63. The GoK is financing fully the project preparatory feasibility and detailed designs and

associated environmental and social assessments related to the road works contracts. It will also

finance the incremental operating costs for implementing the project, as well as the expenditures

related to any resettlement, land acquisition, compensation and relocation of public utilities to

pave the way for construction works along the selected corridors. The rest of the activities of the

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project will be financed jointly by IDA (80%) and GoK (20%), as summarized in Table 4 and

detailed in Annex 2, Table 2.

1. Lending Instrument

64. The lending instrument chosen for this project is a Specific Investment Loan, because it

will support rehabilitation of specific economic, social and institutional infrastructure. The

activities against which funds are to be disbursed are well-defined and specific.

2. Table on Project Costs and Financing Plan

Table 4: Project Cost and Financing (Preliminary Cost Estimates)

Project Component Estimate

Cost

(US$m)

IDA Financing GoK*

(US$m) US$m (% of

total)

A. Support to KeNHA to Upgrade the Urban Road Transport

Infrastructure

Sub-total for Component A 311.15 223.26 74.4 87.89

B. Support to KURA and KRC to Develop Selected Mass

Transit Corridors

B1. KURA 64.83 47.77 15.9 17.06

B2. KRC 15.63 11.93 4 3.70

Sub-Total for Component B 80.46 59.70 19.9 20.76

C. Institutional Strengthening and Capacity Building

C1. MoT 16.90 13.44 4.5 3.46

C2. MoR 4.60 3.60 1.2 1.00

Sub-Total for Component C 21.50 17.04 5.7 4.46

Total Costs and Financing Required 413.11 300.00 100 113.11

Of which: Physical Contingencies

Price Contingencies

23.90

28.84

17.51

20.68

5.8

6.9

6.38

8.17 Note * Overall, GoK will finance 27 percent of the total cost of the project, which include expenditures associated with

implementation of the RAPs and relocation of services on road corridors to be expanded and or rehabilitated.

C. Lessons Learned and Reflected in the Project Design

65. Experience with Bank financed projects in the transport sector and their implementation

record in Kenya presents a number of useful lessons:

(a) The choice of project activities should reflect the priorities of the Government, potential

beneficiaries and other stakeholders to ensure ownership. Under the KTSSP, the GoK

financed project preparation, including the feasibility and detailed designs and associated

environmental and social assessments; while under the NCTIP, a GoK-established inter-

ministerial committee steered the reform process successfully;

(b) Under NCTIP and KTSSP, project preparation and implementation are mainstreamed

within the operations of the entities responsible for the roads and aviation functions. This

20

has helped build institutional capacity and ownership, thereby assuring sustainability

after completion of the projects. NCTIP and KTSSP benefited from this approach, which

will be replicated in the proposed NUTRIP;

(c) The necessary policy, institutional, procurement and financial management reforms

implemented or underway in the sector have arisen from sustained dialogue and

consultations in defining and agreeing on them under the leadership of GoK. Therefore,

follow-on operations, appropriately timed, are required to bolster the gains from policy

and institutional reforms that have been initiated under previous operations and require

completion or enhancement;

(d) Project preparation, design and supervision effort need to reflect sustained dialogue

between IDA and GoK. Reporting, auditing and accountability measures should begin

early to ensure timely detection and remedy of implementation problems; and

(e) NCTIP was the first major transport project financed by the Bank after a long break in its

lending program to the transport sector, and it was necessary to build capacity in the

implementing agencies to manage externally financed major projects. However, key

success factors that have been incorporated from the experience of NCTIP and KTSSP

are: (i) advance preparation of design and bidding documents for the major civil works

contracts; (ii) involvement of INT advisory services during preparation of the project; and

(iii) more intensive and continuous implementation support from the Bank‘s Country

Office in Kenya to resolve issues and constraints in a timely fashion.

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

66. Project execution will be carried out by five implementing agencies (Annex 3, figure 1

for a schematic illustration), namely, KeNHA, KURA, KRC, MoT and MoR. Except for KURA,

the four other agencies are currently implementing Bank-financed projects, though a number of

the project staff in KURA also have working experience on Bank-funded operations. The MoR

will be responsible for overall project coordination and each implementing agency will be

responsible for the implementation of its respective component or subcomponent of the project.

The project will be mainstreamed into the operations of these institutions and form an integral

part of their operations and investment programs.

67. The project will be implemented as follows:

(a) Component A: KeNHA

(b) Sub-component B1: KURA

(c) Sub-component B2: KRC

(d) Sub-component C1: MoT

(e) Sub-component C2: MoR

68. Project Oversight Committee (POC): The GoK has established the POC to (a) provide

strategic and policy guidance for Project implementation; (b) liaise with the Mass Rapid Transit

(MRT) Consultative Committee; (c) review and approve annual work plans for the Project; and

(d) review project financial reports. The POC will comprise the Permanent Secretary (PS) of

MoT, a representative of the Ministry of Finance, Chief Executive Officers (CEOs) of all the

21

project implementing entities and the Permanent Secretary of MoR, who shall also be chair of

the POC. The process of establishing the POC falls under the administrative procedures of the

GoK. Accordingly, the PS, MoR, has written to all the members comprising the POC formalizing

this arrangement.

69. Project Coordinator (PC): To promote effective implementation, oversight and

coordination of the project, the GoK will by December 31, 2012, appoint or recruit for MoR a

PC with qualifications and experience under terms of reference satisfactory to the Association.

The PC will be responsible for the overall coordination of and reporting on the project, providing

strategic oversight and preparation of project reports and acting as the secretary for both the POC

and MRT Consultative Committee. Until such a time as the PC for NUTRIP is selected, the one

currently coordinating the activities of both the Bank-financed NCTIP and KTSSP will act in this

position during the intervening period.

70. Mass Rapid Transit Consultative Committee. The development and oversight of urban

public transport systems such as the MRT and BRT is multi-disciplinary, with a myriad of

transport-related activities to be completed concurrently. Thus, a strong institutional structure to

deal with these issues is imperative to facilitate inter-ministerial coordination on technical and

decision-making levels, so that consistency between engineering and associated construction

works, operational and regulatory aspects is created. For this reason, the GoK has established a

MRT Consultative Committee, with the responsibility for providing such technical and policy

advice to the POC on matters related to urban public transport like MRT, including BRT. The

committee will include, inter alia, the Roads Secretary (as chair), representatives of MoT, the

Ministry of Local Government, KeNHA, KURA, KRC, the Matatu Owners Association, the

Matatu Welfare Association, private bus operators, the Director of City Planning of the City

Council of Nairobi, the Chairman of the Nairobi Central Business District Association, the

Director of Physical Planning, the Traffic Commandant, the Kenya Private Sector Alliance, and

the City Engineer of the City Council of Nairobi. The MRT Consultative Committee may co-opt

other key stakeholders if need arises. As is the case with the process of establishing the POC, the

PS MoR, as the Chair of the POC, has written to all the organizations that are represented on the

MRT Consultative Committee to nominate officials.

71. Project Implementation Teams (PITs). Each implementing agency will appoint a PIT,

which will be empowered to manage the day-to-day activities of its components of the project.

All the PITs will comprise regular staff of the implementing agencies. Each PIT will be headed

by a Team Leader and will comprise members with the appropriate skills and adequate

experience and qualifications. The Team Leader will report directly to the Chief Executive

Officer (CEO) of KeNHA, KURA and KRC, or to the PS of MoT, as appropriate. The members

of all PITs have already been appointed, and the World Bank will be consulted prior to any

changes in PIT membership. PIT duties and responsibilities are elaborated in Annex 3.

72. These implementation arrangements take into account the experience learnt from other

World Bank financed projects in Kenya. Adequate capacity building on operational BRT

components will be provided to the KURA PIT through internationally-recruited technical

assistance and training. Keeping infrastructure and operations components in one agency

facilitates good coordination in the preparation of the various BRT components. Once the

22

proposed NMTA is established, the KURA PIT could be transformed into the Public Transport

Department as part of the Authority.

73. The impact of implementing the new constitution and agreed reforms: The

implementation arrangements are likely to change in the short- to medium-term as the new

constitution and agreed reforms are implemented, which could also lead to delays as the new

Government reorganizes itself, including by consolidating ministries and departments.

Modifications are therefore likely to arise to respond to these changes. The changes that are

likely may involve merging or changing roles or having new institutions altogether, such as the

proposed NMTA, that could be involved in the implementation of the project. These

uncertainties are noted and therefore possible restructuring at or before the MTR may have to be

carried out to adjust the implementation arrangements accordingly.

B. Results Monitoring and Evaluation

74. Monitoring of project performance will be carried out by a consultant (an accredited

university consulting unit) and some of the risks identified in the Operational Risk Assessment

Framework will be assessed and taken into account. This will be complemented with the results

framework and monitoring arrangements provided in Annex 3. The main outcome indicators

will be the reduction of travel time and transport costs on the Northern Corridor road traversing

Nairobi and creation of institutional and regulatory capacity in the urban transport sub-sector.

Baseline information is already available for some of the indicators. Other performance and

outcome indicators that will be closely monitored are related specifically to the institutional

reforms to be achieved in the urban transport sub-sector.

75. The Government has proposed to engage one of the accredited universities in Kenya with

adequate experience as the monitoring and evaluation (M&E) consultant under a contract with

MoR, but working in close collaboration with KeNHA, KURA, KRC and MoT. This

arrangement has worked well under NCTIP, with the University of Nairobi (UoN) as the M&E

consultant. In the process of collecting and analyzing data, the country has benefited enormously

by assigning this task to UoN. So far, 33 students have utilized the information for their

academic work, and graduated at post-graduate level, while another 26 students are in the

process of doing so. The task has built local M&E capacity and also strengthened the link

between academia and the road construction industry. Meanwhile, KeNHA, KURA, KRC, MoT

and MoR have M&E and Communications units in their organizational structures, that will

complement these efforts and work closely with the selected university.

76. The Communications Specialists from KeNHA, KURA, KRC, MoT and MoR in

conjunction with the Communications specialist on the Bank‘s task team, based in the country

office in Kenya, have developed a communications strategy, similar to the case for NCTIP and

KTSSP, which will be rolled out before the start of execution of works (details in Annex 5). The

communications teams have fielded a recognizance visit to the project sites, and have planned

subsequent visits to record interviews and initiate dialogue with potential beneficiaries. This is

particularly important for sub-component B (Support to KURA and KRC to Develop Mass

Rapid Transit Systems) as an engagement-feedback mechanism for regular dissemination of

information on the progress of these activities to the public.

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C. Sustainability

77. The GoK has set aside resources in carrying out preparatory work, including the

feasibility studies, environmental and social assessments and detailed engineering designs for the

road contracts. The activities of the project will be mainstreamed in the operations of the

implementing agencies and the project implementation team will comprise in-house staff. These

actions have reinforced Government‘s ownership of the project - hence ensuring sustainability.

Furthermore, the benefits of the project are likely to be sustained in light of the recent reforms in

the transport sector, which already are showing encouraging results, including clear ownership

and institutional arrangements in the road sub-sector; establishment of a regulator for the

construction industry and strengthening of the regulatory function of the engineering profession.

The establishment of the proposed NMTA will streamline further the provision of urban public

transport infrastructure and services, while creation of the RTSA will streamline the road safety

matters thereby creating sustainable capacity to address these challenges.

78. All the above factors contribute extensively to ensuring that the benefits of the project

will be sustained. Moreover, maintenance of the improved roads infrastructure under the project

is assured through the regular funding from the Road Maintenance Fund managed by the Kenya

Roads Board which has benefitted extensively under the Bank financed NCTIP and KTSSP in

strengthening its role and capacity.

V. KEY RISKS AND MITIGATION MEASURES

A. Risk Ratings Summary Table

Risk Rating

Stakeholder Risk High

Implementing Agency Risk

- Capacity Substantial

- Governance Substantial

Project Risk

- Design Moderate

- Social and Environmental Moderate

- Program and Donor Moderate

- Delivery Monitoring and Sustainability Moderate

Overall Implementation Risk High

B. Overall Risk Rating Explanation

79. The overall implementation risk is rated high because of the potential risks that include

the uncertainties regarding the possible changes in the institutional set up in the transport sector

and implementation arrangements arising from the execution of the newly adopted Constitution;

the forthcoming elections and the transition to a new Government accompanied with

24

reorganization of the institutional setting of the public sector thereafter; and likely resistance

from transporters and bus operators to the introduction of any new regulatory framework for

public transport, phasing out matatus and CCN required to cede its current responsibility of

traffic management and parking management to the proposed NMTA. These risks could slow

down the implementation of the project. The risk mitigation measures are explained in the

Overall Risk Assessment Framework (ORAF) in Annex 4.

VI. APPRAISAL SUMMARY

A. Economic and Financial Analyses

80. Detailed studies of the various road sections to be rehabilitated or improved under the

project are underway. The total length of the major roads to be constructed, namely, JKIA

Turnoff-Westlands-Rironi and associated service roads, Kisumu bypass and Meru bypasses,

amount to about 93 km of which some road sections have six lanes and include construction of

multi-lane fly-overs. Based on existing studies, the traffic levels range from about 1,700

vehicles per day (vpd) to over 8,000 vpd with one section (12 km) having nearly 80,000 vpd

along JKIA to Nairobi city centre. Most of the road sections are those previously earmarked for

improvement under the defunct NUTRP, which was dropped, and their economic justification is

sound, while the rest are sections of roads adjoining major towns, with comparatively high levels

of traffic. According to the previous economic feasibility studies done for each road section,

albeit at different times, the economic rates of return (ERR) ranged from about 17 to 65 percent

and the estimated net present value (NPV) at 12 percent discount rate was about US$80 million

for road works costing about US$200 million (details in Annex 6). Given that the economic

growth in the country has been in the range of 5 to 7 percent per annum in the last five years and

is expected to grow between 5 and 7 percent per annum in the future, the traffic volumes are

likely to grow at around 7 to 10 percent per annum.

B. Technical

81. The road design standards being applied under the project will conform to the latest

design practices. The standards and specifications compare well with international practice.

Where traffic levels are expected to exceed the generally-accepted capacity of the existing lanes,

the road sections would be widened (see details in Annex 6, Table 2). The BRT operational

designs and proposed PPP financing structure will take into consideration the lessons learned and

best practices from successful BRT projects in other major cities (e.g. Curitiba, Bogota and

Lima).

C. Financial Management

82. A financial management assessment of KeNHA, KURA, KRC, MoT and MoR, the

entities implementing the project, was conducted. MoT, MoR, KeNHA and KRC are currently

implementing the NCTIP, EATTFP, and the KTSSP with a total IDA contribution of US$960

million. There are no overdue audit reports. The financial management residual risk rating for

MoT, MoR, KeNHA, KURA is assessed as moderate whereas that of KRC is assessed as

substantial. Details on the Financial Management arrangements for this project are included in

Annex 3.

25

83. On the basis of the assessment, it is recommended that both KeNHA and KURA address

the system challenges experienced in generation of financial reports by customizing their

budgetary modules by moving from a manual to an automated budgetary control system by

March 31, 2013.

84. To ensure that funds are available during project implementation, the credit effectiveness

condition will require the GoK to deposit an initial amount of KES30 million of the GoK

counterpart funding into the project operating account for component A of the project and

thereafter to replenish the account on a quarterly basis throughout the project implementation

period. The other Financial Management actions to be taken during project implementation are

included in the Financial Management action plan shown in Annex 3.

85. The PITs will oversee the Designated and Project Accounts, verify invoices, and approve

payments. The PITs will also prepare all financial management reports, financial statements,

reimbursement requests and other relevant documentation as required by their respective

management and IDA. The PITs will ensure that the respective agencies‘ financial statements

are audited as required and that contracting, procurement, disbursement and financial

management is carried out and reported efficiently. Documentation supporting project-related

disbursement and financial transactions would be maintained by each PIT for inspection by IDA,

the GoK, and the Kenya National Audit Office (KENAO) (see Annex 3 for details).

86. Retroactive financing: A provision of up to US$5 million has been made to cover

eligible expenditures incurred on or after November 30, 2011 (i.e., during the 12-month period

before signing of the Credit, which is expected by the end of September 2012).

D. Procurement

87. A Procurement Risk Assessment has been completed. Procurement activities will be

carried out by the five implementing agencies, of which two are GoK ministries and three are

state-owned institutions, namely MoR, MoT, KeNHA, KURA, and KRC. KeNHA, KURA and

KRC are state-owned institutions. Each of the five implementing agencies has constituted a PIT,

which reports to the CEO of its respective agency. A PIT includes among other professional staff

a PIT leader and a procurement officer. With the exception of KURA, the other four agencies

are implementing three ongoing IDA-funded projects (NCTIP, EATTFP, and KTSSP) through

the same PITs. Because KURA is an offshoot of MoR, most of its technical staff and especially

members of the PIT of the proposed project are staff that have gained experience in project

implementation under the three ongoing projects before they were moved to the road agencies.

88. Being cognizant of the experience gained by the implementing agencies from the ongoing

projects, and deployment of the same PITs of the ongoing projects for the implementation of the

proposed project, the overall project risk for procurement is ―moderate‖.

89. A first General Procurement Notice (GPN) for the project was published in the

DgMarket website on May 3, 2012. The GPN will be updated annually for any outstanding

International Competitive Bidding (ICB) and large consultancy services contracts, as

appropriate. Specific Procurement Notices (SPN) for goods and works to be procured under ICB

and National Competitive Bidding (NCB) and for consultant services will be advertised in at

26

least one national newspaper of wide circulation and internationally for ICB contracts. Wherever

needed, training will be offered to enhance the skills of the PIT procurement staff. Procurement

plans for the first 18 months have been prepared (details in Annex 3) and will be updated at least

annually. In addition, a project implementation manual will be prepared by Credit effectiveness,

a draft of which has been submitted to the Bank and is under review.

90. Procurement will be carried out in accordance with the World Bank‘s Guidelines,

particularly, Guidelines: Procurement of Goods, Works, and Non-Consulting Services under

IBRD Loans and IDA Credits and Grants by World Bank Borrowers, dated January 2011; and

Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and

Grants by World Bank Borrowers, dated January 2011. Kenya‘s public procurement law, the

Public Procurement and Disposal Act of 2005 (PPDA), that governs purchase of works, goods

and services using public resources by central Government entities, local authorities, state

corporations, education institutions, and other Government institutions, will also be taken into

account. It should be noted that some provisions of PPDA are not fully consistent with the

World Bank procurement guidelines and Consultants Guidelines, and therefore these provisions

of PPDA will not be applied for the implementation of this project (details in Annex 3). The

Anti-Corruption Guidelines, namely, the ―Guidelines on Preventing and Combating Fraud and

Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants‖, dated October

15, 2006 and revised in January 2011, shall apply.

91. Procurement methods to be applied to the purchase of all project goods, services and

works will be specified in the Procurement Plan, including the circumstances under which the

methods may be used. The methods for works and goods will include ICB, Limited International

Bidding (LIB), NCB, Shopping, and Direct Contracting. In case of consulting services, the

methods will include Quality and Cost Based Selection (QCBS), selection under Fixed Budget,

Consultants Qualifications, Least Cost Selection, Single Source Selection, and Selection of

Individual Consultants, consistent with procedures provided in paragraphs 5.2 and 5.3 of the

Consultant Guidelines. World Bank review of procurement decisions will be provided in the Plan

for those contracts that shall be subject to Prior Review.

92. Training: Each of the implementing agencies will prepare and endorse their respective

annual training program for financing under the project and submit it to the Bank for review and

clearance. The program will identify, inter alia: (a) the training envisaged; (b) the personnel to

be trained; (c) the selection methods of institutions or individuals conducting such training; (d)

the institutions conducting the training (if already selected); (e) the duration of the proposed

training; and (f) the cost estimate of the training. Reports by each trainee upon completion of

training would be mandatory.

E. Social (including safeguards)

93. Social and environmental benefits. In addition to social and environmental impacts

requiring mitigation, the project will generate significant social and environmental benefits. The

social benefits will accrue from opportunities for short-term employment during construction,

but there will also be long-term benefits from increases in road safety and time saved. The travel

time along road sections contained in the project is expected to fall by 30 percent and vehicle

27

operating costs are expected to be reduced by 25 percent with the proposed improvements; and

the provision of road-side amenities, including bicycle tracks, pedestrian crossings, service roads

along the selected road sections, and improvement of junctions will enhance road safety. The

details on social aspects of the project are in Annex 7.

94. Road safety issues are a major concern in Kenya that claims a total of nearly 3,000 lives

annually. This project will complement the efforts under NCTIP and KTSSP, where a National

Road Safety program has been developed and approved by the GoK. Under the project, attention

will be given to increasing awareness of road safety through information provision and education

of adults as well as children along the selected road corridors. The design of the project will

include widening of the existing road in critical places to allow for bicycle paths and pedestrian

sidewalks to enhance safety in selected areas.

95. The reduction in traffic congestion along the JKIA – Nyayo Stadium route will reduce the

current practice of motorists taking shortcuts along residential roads adjacent to the Nairobi

National Park, which increases air pollution in the Park and causes distress to wildlife. Smooth

traffic flow also has strong greenhouse gas reduction benefits and reduces local air pollution.

Nitrogen oxide4, carbon dioxide, and carbon monoxide emissions are likely to be reduced by a

factor of two or three due to the reduction of repetitive stop-starts and the duration of idling.

F. Environment (including safeguards)

96. The project‘s anticipated social and environmental impacts have triggered Bank

Operational Policy OP 4.01 (Environmental Assessment), as well as OPs 4.12 (Involuntary

Resettlement) and 4.11 (Physical Cultural Resources). The environment category of the project

is B – Partial Assessment – as the proposed activities, which for the most part involve

rehabilitation/expansion of existing roads within the right of way (in addition to some relatively

short bypasses that will not traverse natural habitats), will have moderate and reversible impacts.

Overpasses will be constructed largely within the existing right of way. Detailed descriptions of

environmental and social compliance measures are provided in Annex 7.

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Pest Management (OP 4.09) X Indigenous Peoples (OP/BP 4.10) X Physical Cultural Resources (OP/BP 4.11) X Involuntary Resettlement (OP/BP 4.12) X Forests (OP/BP 4.36) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X

4 Nitrogen oxides (NOx) act as indirect greenhouse gases by producing the tropospheric greenhouse gas 'ozone' via

photochemical reactions in the atmosphere. Carbon dioxide is a primary greenhouse gas. Chronic exposure to

carbon monoxide is associated with increased risk for adverse cardiopulmonary events.

28

Environmental Characteristics of Project Areas

97. Component A (a): JKIA Turnoff-Westlands-Rironi Road Improvement. The project area is

mainly built up, and so there will be minimal or no animal species that will be displaced.

Although a 2 km section of the road expansion from JKIA to Nyayo Stadium does run parallel to

the Nairobi National Park, there is a buffer provided by an industrial estate between the road and

the boundaries of the Park. Therefore, the road works will not impose additional stress on

wildlife, though construction waste should be disposed off well outside the vicinity of the

National Park.

98. Component A (b): Kisumu bypass. The escarpment occurs in the form of rounded shapes

on the east side of the Kisumu-Kakamega (A1) Road, at which point they taper into piedmont

plains that form a gentle Kanyakwar valley that meets the bulk-hill on which Kisumu city is

built. The hills do not have a gazetted forest except at Scarp 9 near Jans Senior Academy, where

a small area is set aside for arboreal practice. Bush and shrubs occupy the scarps along which

the bypass road corridor is planned.

99. Component B1 (f): The Meru bypass road generally traverses through rolling topography

with a general altitude of 1,700 meters at the Western bypass and 1,500 meters at the Eastern

bypass. Both bypasses cross River Kathita and several small perennial streams. The river and the

streams originate from Mount Kenya and intersect the project road, flowing eastwards as

tributaries of the River Tana. The project is in the vicinity of the Imenti Forest, which is one of

many small remnant patches of the forest in which fragmented elephant herds shelter, threatened

by a burgeoning human population of agriculturalists who are not sympathetic to their presence.

The Imenti Forest lies east of Mount Kenya between the towns of Embu and Meru and today a

small herd of elephants (probably no more than about 50) shelters within, surrounded by human

settlement and isolated from their Mount Kenya brethren. Illegal logging within the forest itself

is inflicting further pressure on this small band of surviving elephants, whose future is

questionable unless safe passage for them can be arranged by way of a corridor so that they can

reach the Mount Kenya forests. The proposed bypass does not traverse the forest but follows the

edge of the forest for about 2 km around Gitoro area before joining B6 road - hence not affecting

the forests, or coming close to the wildlife sensitive sites. The Kenya Forestry Service has an

electric fence which prevents access to the Imenti Forest.

100. Environmental Impacts. Potential environmental impacts may include soil erosion and

disturbance of water flows, water pollution, traffic disruption, noise, gaseous and dust pollution

and temporary disturbance of flora and fauna (mainly during the construction phase). In the case

of the improvement of the Northern Corridor road (namely JKIA Turnoff-Westlands-Rironi road

section through Nairobi and associated service roads and major junctions) some mature trees

(though not indigenous species) will be lost as a result of road widening. The magnitude of tree

cutting in these urban areas is not sufficient to necessitate the preparation of a Forest

Management Plan, or to trigger the Bank‘s Operational Policy on Forests, OP 4.36.

Nevertheless, it is important to undertake replacement tree planting liaising with Kenya Forestry

Service and local municipality authorities with responsibility for maintaining roadside verges

and vegetation.

29

101. Mitigation measures. KeNHA will liaise with the Kenya Forestry Service, CCN and

Kisumu Municipality on replacement tree-planting activities. Since the expected negative

impacts will relate to the construction phase of the project, mitigation and support measures will

be incorporated in the relevant clauses in the contract documents for the road sections. Such

clauses include, among others, provisions for appropriate measures for storage, handling,

transportation and disposal of all waste material; provision of adequate sanitary facilities;

rehabilitation and surface restoration of borrow pits; basic training in construction health and

mitigation measures against spread of Human Immunodeficiency Virus/Acquired Immune

Deficiency Syndrome (HIV/AIDS); and sustainable seeding and tree growing to restore

vegetation to its original condition; and extraction of water. A matrix of environmental impacts

and mitigation measures is provided in Annex 7.

102. In the case of road rehabilitation, OP 4.11 (Physical Cultural Resources) is also being

triggered. Construction will take place in proximity to areas of cultural, historical, and religious

significance (the museum at Provincial Commissioner‘s House, Uhuru Park, and the Nairobi

Synagogue). Guidelines for ―chance finds‖ procedure will be integrated into the contracts for

construction. These include development of a cultural property management plan if physical

cultural resources are found or adversely affected (although this is not expected to be the case,

and consultations have already been held with stakeholders and their concerns about the

construction process have been noted and addressed).

103. Disclosure of Safeguards Documents. All the Environmental and Social Impact

Assessments (ESIAs) and Resettlement Action Plans (RAPs), including an Environmental Social

Management Plan (ESMP) for roads sections to be rehabilitated or constructed, have been

cleared by the World Bank and were disclosed in the Bank‘s InfoShop and in-country (details in

Annex 7, Table 10). The draft terms of reference for the ESIAs for development of the BRT

corridor and the commuter rail network were also prepared and disclosed in the Bank‘s InfoShop

and in-country on KURA‘s and KRC‘s websites. The implementing agencies have staff with

adequate experience and qualifications to manage environmental and social matters associated

with their respective infrastructure expansion and rehabilitation components. All construction

projects will adhere to the rules and regulations of National Environmental Management

Authority, and all necessary permits will be obtained prior to construction.

104. Borrower’s Capacity to Implement Safeguards. KeNHA has substantial experience in

the preparation and implementation of ESMPs and RAPs in compliance with previous Bank

standards, conducted under earlier Bank-financed projects, including NCTIP, KTSSP and

EATTFP. KeNHA has qualified Social Specialists with experience in implementing OP 4.12.

The Environmental Specialist has undertaken preparation and monitoring of ESIAs for Bank-

financed projects at both KeNHA and previously at the Kenya Power and Light Company.

Although KURA has less in-house experience, they have recently hired an Environmental

Specialist, and the ESIA submitted and cleared for the Meru bypass was of a high standard.

105. Stakeholder consultations. Stakeholder consultations were conducted for Project

Affected Persons (PAPs) as well as local businesses, farms, and public institutions (schools, care

homes, etc.) along the route. Dates of consultations are provided in Annex 7, Table 7. Key

concerns were: dust pollution from construction; construction waste disposal; loss of customers

30

due to limited accessibility to shops, petrol stations, and hotels during construction; limited

accessibility to a religious institution (Nairobi Synagogue); road safety during construction; and

adequate compensation for land acquisition. Monitoring will be undertaken to ensure proper

environmental impact mitigation measures are in place (frequent watering of roads; disposal of

waste away from residential and market areas; adequate safety signs and safe crossing points;

provision of access points to businesses, institutions, and houses of worship). Compensation

issues will be addressed through the implementation of the RAPs.

31

Annex 1: Results Framework and Monitoring

KENYA: National Urban Transport Improvement Project

Results Framework

Project Development Objectives (PDO): The Project Development Objectives are to: (a) improve the efficiency of road transport along the Northern Corridor; (b) improve the institutional capacity and

arrangements in the urban transport sub-sector; and (c) promote the private sector participation in the operation, financing and management of transport systems.

PDO Level Results Indicators

Co

re

Unit of Measure Baseline

2012

Cumulative Target Values

Frequency

Data Source/

Methodology

Responsibility

for Data

Collection

Description

(indicator

definition

etc.) 2013 2014 2015 2016 2017 2018

Indicator One: Reduction in

average travel time from

Junction Jomo Kenyatta

International Airport (JKIA)-

Rironi road.

Time in hours 3 3 3 2.5 2.4 2.2 2.1 Quarterly Quarterly and

Annual

progress

reports/Field

survey

Supervision

Consultant/

M&E

consultant

Average

travel time

by saloon car

during

morning and

evening rush

hour.

Indicator Two: Reduction in

vehicle operating costs on

Junction JKIA-Rironi road.

Cost per km (US$)

for a heavy truck

1.5 1.5 1.5 1.4 1.3 1.2 1.1 Quarterly Quarterly and

Annual

progress

reports/Field

survey

Supervision

Consultant/

M&E

consultant

As

determined

using the

HDM-4

model.

Indicator Three: Direct

beneficiaries:

Road users per day (of which %

female)

Number in thousands

(% female)

300

(40%)

300

(40%)

300

(40%)

300

(40%)

350

(40%)

380

(40%)

380

(40%)

Quarterly Quarterly and

Annual

progress

reports/Field

survey

Supervision

Consultant/

M&E

consultant

Based on the

ADT, type

of vehicles

and average

occupancy

rate.

Indicator Four: Improved

institutional capacity in the

urban transport sub-sector

1) Nairobi Metropolitan

Transport Authority

(NMTA) established and

functional;

2) National Road Transport

and Safety Authority

(RTSA) established and

Yes/No

1) No

2) No

3) No

No

No

No

No

No

No

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Quarterly Quarterly

progress

reports

MoT/

M&E

consultant

32

Project Development Objectives (PDO): The Project Development Objectives are to: (a) improve the efficiency of road transport along the Northern Corridor; (b) improve the institutional capacity and

arrangements in the urban transport sub-sector; and (c) promote the private sector participation in the operation, financing and management of transport systems.

PDO Level Results Indicators

Co

re

Unit of Measure Baseline

2012

Cumulative Target Values

Frequency

Data Source/

Methodology

Responsibility

for Data

Collection

Description

(indicator

definition

etc.) 2013 2014 2015 2016 2017 2018

functional;

3) Urban public transport rules

and regulations developed

and in use.

Indicator Five: PPP promotion

and opportunities in the

transport sector developed.

1) Offer one Bus Rapid Transit

(BRT) corridor for Public

Private Partnerships (PPP);

2) Offer one commuter rail line

for PPP.

3) Institutional setup within

KeNHA (Kenya National

Highways Authority) for the

promotion of PPP in

financing and management of

road infrastructure and

services developed and

adopted.

Yes/No

1) No

2) No

3) No

No

No

No

No

No

No

No

No

No

Yes

No

No

Yes

Yes

Yes

Yes

Yes

Yes

Quarterly

Quarterly and

Annual

progress

reports/Field

survey

MoR/MoT/

M&E

consultant

Indicator Six: Number of road

crashes reduced along Junction

JKIA-Rironi Road*

Percentage reduction

(%)

To be

collected

0 0 10 12 14 15 Annually KeNHA

progress

report

M&E

Consultant

INTERMEDIATE RESULTS

Intermediate Result (Component A): Support to KeNHA to Upgrade the Urban Road Transport Infrastructure

Intermediate Result indicator

One: Length of roads

rehabilitated (non-rural)

Km 0.0 0.0 0.0 18.0 80.0 100.0 118.0 Annually KeNHA/

Kenya Urban

Roads

Authority

(KURA)

progress

M&E

consultant

33

Project Development Objectives (PDO): The Project Development Objectives are to: (a) improve the efficiency of road transport along the Northern Corridor; (b) improve the institutional capacity and

arrangements in the urban transport sub-sector; and (c) promote the private sector participation in the operation, financing and management of transport systems.

PDO Level Results Indicators

Co

re

Unit of Measure Baseline

2012

Cumulative Target Values

Frequency

Data Source/

Methodology

Responsibility

for Data

Collection

Description

(indicator

definition

etc.) 2013 2014 2015 2016 2017 2018

report

Intermediate Result indicator

Two: Length of roads

constructed (non-rural)

Km 0.0 0.0 0.0 5.0 20.0 30.0 38.0 Annually KeNHA/

KURA

progress

report

M&E

consultant

Intermediate Result indicator

Three: Road length in good and

fair condition as a percentage of

the total classified network in

the project area [non-rural,

Northern Corridor (Mombasa –

Malaba/Busia) 930 km

Cumulative

Percentage (%)

60.0

60.0

65.0

70.0

75.0

80.0

80.0

Annually KeNHA/

KURA

progress

report

M&E

consultant

Intermediate Result (Component B): Support to KURA and KRC to Develop Mass Rapid Transit Corridors

Intermediate Result indicator

One: Draft Bill for NMTA

presented to parliament, and

rules and regulation for urban

public transport developed

Yes/No No Yes Annually KeNHA/

KURA

progress

report

M&E

consultant

Intermediate Result (Component C): Institutional Strengthening and Capacity Building

Intermediate Result indicator

One: Draft legal, institutional

and regulatory framework for

PPP in transport developed

Yes/No No No Yes Annually KeNHA/

KURA

progress

report

M&E

consultant

Intermediate Result indicator

Two: Feasibility and

engineering designs studies

completed to acceptable

standards

Number

(a) BRT

(b) Commuter rail

line

No

No

No

No

No

No

No

No

1

2

1

2

1

2

Annually KeNHA/

(KURA)

Progress

report

M&E

consultant

*Baseline data will be collected by the M&E consultant by March 31, 2013

34

Annex 2: Detailed Project Description

KENYA: National Urban Transport Improvement Project (NUTRIP)

1. The Government of Kenya (GoK) has developed a long-term investment plan for

the road sub-sector, the Road Sector Investment Plan (RSIP). The plan includes identified

priority interventions which are needed to support the achievement of Vision 2030. One

of the priority areas is to address the high traffic congestion that is having serious

economic consequences, including losses in Gross Domestic Product (GDP), and

contributing to increases in the cost of doing business in the country. The priority

interventions include improving existing road corridors; constructing critical

complementary missing road links; and developing and expanding the commuter rail and

Bus Rapid Transit (BRT) systems to improve urban public transport.

Urban Infrastructure and Services

2. Urbanization in Kenya has been growing rapidly since independence, but without

being met with commensurate urban infrastructure and services. In major cities,

availability and efficiency of urban transport is an important factor in development of

social and economic activities. Currently, urban transport is facing challenges of fast

rates of population and spatial growth, a low and unstable revenue base, low and uneven

income levels among the inhabitants and high rate of growth in vehicle ownership among

a small but significant minority, while the majority remains captive to poorly provided

public transport and Non- Motorized Transport (NMT). Motorization in Kenya increased

to about 1.62 million vehicles in 2011, compared to 591,000 in 2000 (Table 1). Private

cars represent over 40 percent of this growth, and private vehicles are predominantly used

in urban areas. In response to this rapid growth in motor vehicles, the Government‘s

Road Sector Investment Plan (RSIP) 2010-2024 allocates significant resources towards

urban road infrastructure expansion and improvement in an attempt to build a way out of

frequently occurring traffic gridlocks.

Table 1: Number of Registered Vehicles by Type (in ‘000s)

Vehicle type 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Motor cars 245 255 270 286 308 329 373 411 450 500 553 596

Vans, picks-

ups 159 163 167 173 180 184 195 203 210 220 227 234

Lorries, Truck

and heavy

vans 58 59 60 62 64 66 70 75 81 91 96 102

Buses and

mini-buses 39 43 47 50 56 60 50 56 62 85 90 92

Motor and

auto-cycles 45 46 47 49 54 57 63 79 130 253 370 510

Trailers and

tractors 13 14 14 15 16 17 40 42 43 27 31 34

Other motor

vehicles 32 32 33 33 34 35 28 31 33 45 50 55

Total 591 611 638 669 711 750 819 897 1,009 1,221 1,418 1,623

Source: Kenya National Bureau of Statistics, Statistical Abstracts, Various (for 2000-2009 figures) and Kenya

Economic Survey, 2012 (for 2010-2011 figures)

35

3. The most important road-based public transport services are provided by

privately-owned overcrowded, over-aged and unreliable buses and matatus (mini buses)

that operate in a virtually „laissez-faire‟ environment. These unregulated services form

the backbone of the Nairobi public transport system, with matatus carrying about 33

percent of commuter traffic while public buses cater for only about 3 percent. There are

in Nairobi in excess of 16,000 matatus and larger buses, many of which are individually

owned and operated (mostly with hired drivers). This largely unregulated public transport

environment has led to an unsustainable cut-throat competition that compromises vehicle

and passenger safety and comfort, environmental conditions, as well as reliability of

services. The use of large numbers of low-capacity matatus along the main transport

corridors has further resulted in a daily battle for scarce road space. This inefficient use

of road space is further aggravated by a lack of traffic management; interventions are

piecemeal and poorly coordinated between stakeholder agencies.

Traffic Management Interventions for Nairobi

4. The convergence of road networks in the Central Business District (CBD) of

Nairobi; poor road networks; the increasing number of vehicles; poor timing of traffic

signals; and attitudes of road users create overwhelming traffic jams. Consequently, the

traffic demand frequently exceeds the capacity of roads to handle the traffic. Low-cost

traffic management tools are required to improve the existing roadway capacity. The City

of Nairobi has some form of traffic management in place. To date, the emphasis has been

on traffic signalized junctions, junction improvements, and one-way traffic lanes, which

provide benefits to the motorized vehicular traffic.

5. Traffic management studies and activities: The institutions responsible for traffic

management in the City of Nairobi have inadequate capacity in planning and executing

measures (such as installing traffic lights, cabling, and a control room) to deal with

congestion. In this regard, a consultancy to assist KURA is intended to explore the

prospect of introducing short- to medium-term and long-term traffic management

interventions to facilitate the smooth flow of traffic within the extended CBD of Nairobi.

Some short-term interventions proposed include minor junction improvements,

rehabilitation of existing traffic lights, slip roads construction, installing a control room,

cabling and associated works.

6. Improvement of traffic management systems: Enhancement of traffic

management measures through the acquisition of goods and services such as the control

centre, traffic management Information Communication Technology (ICT) solutions and

traffic signalization are required urgently. A study on traffic management for the

extended CBD of Nairobi is necessary to determine the scope of implementation of the

many types of traffic management interventions required (e.g., junction improvements,

one-way operations, traffic signal coordination, and ICT integration in various aspects of

traffic management).

36

Commuter Rail

7. Commuter rail is providing peak-hour passenger services in the morning and

evening since 1992, carrying about one percent of passenger traffic. However, the

system is loss-making and faced with enormous challenges and unclear management

structures and poorly defined service provision expectations, resulting in serious

infrastructure maintenance backlogs and over-aged and dilapidated rolling stock.

Non-Motorized Transport

8. The Mass Rapid Transit Study estimates that 47 percent of Nairobi residents walk

to their places of work while only about four percent use bicycles. Bicycle traffic,

popularly known as ―Boda Boda‖, is used more in the smaller towns and in rural areas,

where the terrain permits, because without appropriate bicycle infrastructure, it is

relatively safer to use it in areas with low motorized traffic volumes. In addition to poor

and deteriorating road conditions in the urban centers, there is lack of other road

infrastructural facilities like footpaths for pedestrians to make walking safer, separate

lanes for cyclists or other immediate means of transport, or fly-overs and bypasses to

improve traffic flows. In recent years, motorcycle taxis have gained popularity on non-

arterial roads situated away from the city centre.

Drainage

9. Major towns experience serious flooding almost on an annual basis during the

long rains, and at times even during the short rains. This is mainly because of the

blockage during long dry spells coupled with inadequate maintenance and low capacity

of such drains. There is need therefore to provide for adequate storm water drainage

under all the road works components as well as stand-alone components for trunk storm

water drainage. This will alleviate the problems encountered during the periods when

roads get flooded for long spells of time, causing congestion and mobility problems for

vulnerable groups including pedestrians, children, women and mobility-constrained road

users.

10. When flooding occurs on urban roads, accidents are frequent and sometimes

fatalities result from such episodes, which could be prevented with a working drainage

system. The use of open drains in built-up areas, which is one of the main causes of storm

water drainage-related accidents, should be addressed. Where closed drains are used,

such drains should be so designed as to be able to carry the flow for the entire design life

of the road.

11. Some of the reasons for drainage problems include: non-provision of adequate

discharge points, encroachment by formal and informal businesses operating over open

drains and thus causing blockage and inadequate way leaves for storm water drains.

Separation of storm water and foul water sewers would also be desirable where they have

been connected.

37

12. Trunk storm water drainage has been recognized as an important feature in the 15

year (2010-2024) RSIP and is considered in the short-, medium- as well as long-term

program. All the components with an activity on road construction, rehabilitation or

improvement under the project will pay attention to drainage.

Urban Transport Development

13. Given the serious congestion in Nairobi and the need to address it urgently, the

Government offered a section of the Northern Corridor road adjoining Nairobi for tolling.

The Bank financed the advisory services under the Northern Corridor Transport

Improvement Project (NCTIP). The process began in 2003 and it was not until 2007

when the bids were invited, under the defunct Nairobi Urban Toll Road Project

(NUTRP). This followed the outcome and recommendations of feasibility studies

conducted by internationally-recruited consultants. The scope of works consisted of

improving six road sections, including Uhuru Highway (total of 77 km), and constructing

a bypass (29 km) as an alternative to a tolled urban stretch of 25 km. The scope of works

comprised the rehabilitation of the existing multi-lane dual carriageways, construction of

an elevated four lane highway over Uhuru Highway, and construction of a new two-lane

bypass which would be upgraded to a four-lane dual carriageway over time. While three

firms were pre-qualified, only one consortium submitted a bid. The sponsors had

requested the World Bank Group, among others, for partial financing of the capital

investment and provision of guarantees against political risks. The World Bank Group

could not support the consortium after it emerged that prevailing circumstances had

changed significantly and that executing the project as designed was no longer tenable.

As a result, the Government decided to terminate the process of concessioning and

thereafter approached the World Bank for assistance to finance some of the critical road

infrastructure investments that were envisaged under the concession.

14. The circumstances surrounding the planned concession investments have changed

significantly, given the long period (nine years) the whole process took before its ultimate

termination. For instance, the traffic level has continued to increase; some sections of the

roads under NUTRP have been constructed with alternative sources of finance, including

from China; new road corridors and missing links have either been constructed or are

nearing completion with financial support from the European Union (EU), Japan

International Cooperation Agency (JICA) and China, such as the eastern and northern

bypasses; and new commercial and industrial development areas have come up which

require new configurations of access.

15. Accordingly, it became prudent to re-assess the impact of all these changes,

including updating the economic analysis to establish whether there are better alternatives

to constructing an elevated highway along the section of the Northern Corridor over

Uhuru Highway from the Nyayo Stadium roundabout to the Westlands roundabout

(approximately 7 km), including expansion and rehabilitation of the existing road

sections, and whether construction of an overpass (or underpass) at the critical

roundabouts is still the most appropriate option, along with investing in the balance of

interventions identified earlier to address the congestion problem along the main road

38

artery through Nairobi. This will be verified by undertaking a traffic study of Nairobi

and its environs, taking into account all the other investments currently ongoing or

planned on the Nairobi urban road network.

16. While a reliable accident data collection and analysis system does not exist, the

number of road accidents, injuries and fatalities in Kenya is high and increasing. Recent

data does not exist, but in 2001, Kenya counted 44 fatalities per 10,000 vehicles,

compared to 1.4 in Great Britain, while West African countries at a similar stage of

development were at the 25 per 10,000 vehicles range.

17. Given the complexity and time that is required to prepare for the improvement of

urban public transport systems, the National Urban Transport Improvement Project

(NUTRIP) will initially focus on improvement of transport infrastructure that is critically

a bottleneck and at the same time finance the preparatory work for the provision of

efficient public transport services, focusing on mass transit systems that can provide

affordable mobility and accessibility to the majority of the urban low income population.

NUTRIP will comprise the following components, with the details shown in Table 2.

18. Component A: Support to KeNHA to Upgrade the Urban Road Transport

Infrastructure (total cost US$311.15 million, of which IDA US$223.26 million). The

selected road sections are among the top priorities in the RSIP and were part of the

defunct NUTRP. This component will involve:

(a) Expansion and upgrading of the Northern Corridor road section through Nairobi

from Jomo Kenyatta International Airport (JKIA) turnoff to Rironi and the

associated service roads and access roads, all through provision of goods, works

and services.

(b) Construction of the Kisumu Northern Bypass road.

(c) Construction and rehabilitation of non-motorized transport facilities, including

foot paths, cycle tracks, pedestrian bridges and underpasses.

(d) Carrying out feasibility and detailed engineering design studies of roads

adjoining major towns and studies for improvement of traffic flows, through

provision of technical advisory services.

(e) Strengthening the capacity of KeNHA by: (i) supplying and installing a

management information system; (ii) developing a safeguards framework for

the road sector; (iii) carrying out an option study on private sector participation

in managing and financing road investments; (iv) implementing the

recommendation of the option study and preparing the requisite bidding

documents; and (v) improving its capacity for contract management, monitoring

and evaluation, through training and provision of technical advisory services.

39

(f) Strengthening the capacity of the External Resources Department and the State

Law Office to support effective management of the Project, all through training

and provision of technical advisory services.

(g) Supervision of road works constructed under Component A of the Project and

provision of technical advisory services.

(h) Establishment of a program to address Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS) in all the roads

contracts, all through provision of goods and services.5

19. Component B: Support to KURA and Kenya Railways Corporation (KRC)

to Develop Selected Mass Transit Corridors (total cost US$80.46 million, of which

US$59.70 million IDA). The activities under this component of the project will comprise

carrying out feasibility studies and detailed engineering designs and preparation of

bidding and contract documents for works and associated facilities as well as selection of

private sector operators to provide large capacity buses for a BRT system and rolling

stock for a commuter rail system. The details are as follows:

(a) Bus Rapid Transit (BRT) Systems

20. BRT systems involve comparatively low construction costs, and so they are

springing up all over the world, including the USA and Europe. Successful introduction

of BRT systems requires strong political will and a clear and enforceable legal and

regulatory framework to deal with the vested interests, indiscipline, and disregard to

safety often manifested in the provision of transport services. In this context, the

identification of a strong leader or champion who can overcome resistance and reconcile

various interests is very important (e.g., Mayor in Curitiba or Mayor in Bogota) is

critical. Furthermore, implementing agencies must design comprehensive consultative

processes with all urban (transport) stakeholders, disseminating empirical information

that can educate the public and other key stakeholders on the potential benefits and cost

effectiveness which mass transit systems such as BRTs offer. Sufficient time is required

for dialogue and to reach consensus, and to prepare adequately the identified

interventions before implementation.

Main Characteristics of the Proposed BRT system in Nairobi

21. Feeder routes: The general concept for the proposed Nairobi BRT system is

anchored in a trunk-feeder system, similar to the successful BRT systems in Curitiba,

Bogota and Quito. High-capacity buses will provide services on segregated bus-lanes in

the median of trunk corridors, complemented by feeder buses (which can be normal buses

or matatus) transferring passengers at terminals or other designated stops. Successful

identification and integration into the BRT system of feeder bus routes requires a

meaningful consultation process with bus and matatu owners/operators that must be

initiated at the early stages of BRT system design.

5 The HIV/AIDs program is for all road contracts under Component A and Sub-component B1 in the

project.

40

22. Main design features: Incorporating lessons learned and best practices from

BRT systems in other countries, the Nairobi BRT will include the following criteria,

among others:

Fully segregated and exclusive BRT lanes, predominantly in the median of major

transport corridors.

Predominant use of high-capacity buses with low green house gases emissions.

System design capacity of a minimum of 20,000 passengers per hour per direction

(which can be expanded by adding bus overtaking lanes and upgraded system

management information).

High performance board/alight specifications for buses.

Access to station platforms only with valid fare-card.

Stations with central platforms and at-level boarding of buses, thus reducing

stopping time and increasing access comfort.

Pre-board fare collection.

Average speeds between 20-40 km/h

Overtaking lanes at stops and stations, allowing express services.

Bus lane features that restrict vehicle breakdown delays to a minimum.

23. Proposed BRT corridors: The MRTS has identified nine BRT corridors which,

if developed, will serve the most densely populated and low income parts of the larger

Nairobi. The eastern part of Nairobi is one such area. The main corridors identified to

serve this area include Jogoo road, Outering road, Juja road and Thika road. These

corridors form a network. For instance, the Jogoo road corridor (traversing Kaloleni,

Umoja and Kayole) with a length of about 21 km has the densest traffic and passenger

demand in Nairobi, with a forecast travel demand of 424,680 persons in 2030; and it is

connected to the Juja Road corridor, Outering and Thika corridors in Nairobi. The other

key corridors include Mombasa road, that would partly serve Jomo Kenyatta

International Airport (JKIA) and the southern part of Nairobi, the key ‗growth pole‘ for

greater Nairobi.

24. The BRT corridors that will be considered under this project include Juja road

and Mombasa-Uhuru Highway-Waiyaki Way road segment. Since the expansion works

on Mombasa Road-Uhuru Highway-Waiyaki Way will be financed under the project, it is

prudent to incorporate the BRT system in the designs at this stage rather than later.

Meanwhile, most of the traffic on Juja road joins Jogoo road, Thika Highway, and Uhuru

Highway-Waiyaki Way, and it is logical that this network is developed simultaneously

for integration of the system. African Development Bank (AfDB) will finance the designs

for Jogoo road, while the EU, Agence Francaise de Developpement (AFD) and JICA

have expressed interest in participation under parallel financing.

25. The design of the proposed BRT corridors will be based on the concept of a fully

separated BRT dual carriageway to be located in the median of the existing roadway,

with overtaking lanes at stations and stops. Passenger facilities will include an inter-

modal terminal at Central Railway Station, an intra-modal BRT/feeder terminal, and a

BRT bus depot and workshop with refueling facilities for which the location(s) will be

41

determined at detailed engineering stage. On the operational side, the BRT system will be

designed as a closed system, using high-capacity articulated buses, and prepaid access

only (via prepayment at terminals, stations and stops).

26. The geometric design of the first BRT corridors described above will provide

segregated bus lanes, NMT facilities, and improvement to adjacent traffic lanes to

enhance the BRT image. Because of differences in right-of-way at various sections,

geometric designs and features may differ. The designs will provide adequate drainage

facilities to prevent environmental degradation through erosion. To maximize

uninterrupted operation along the BRT corridor, in particular at intersections, the

engineering designs will optimize traffic flows along the corridor

27. Along the BRT corridor, new stops will be constructed at 500 to 600 meter

intervals, featuring raised platforms to allow bus entry/alighting at level and to reduce

stopping time for boarding/alighting. Terminals will be constructed at the endpoints of

the BRT corridors and at locations where passenger demand and/or inter-modal transfers

require additional services. Tickets will be purchased upon entering the stops/stations and

the stops/stations will protect passengers from weather influences (sun, rain) by means of

a canopy. Pedestrian access to terminals, stations and stops will be facilitated via secured

at-level crossings or footbridges with due attention to the needs of mobility constrained

persons (handicapped, elderly) and children. Pedestrian walkways at station access routes

will also be improved. The nature and scope of pedestrian (access) facilities and

walkways will be determined in the detailed designs.

28. NUTRIP will support the preparation of the first comprehensive BRT route and

will involve carrying out feasibility and detailed (engineering) design and studies,

including the associated Environmental and Social Impact Assessment (ESIAs), on

Mombasa/Waiyaki Way and Juja roads in Nairobi. It will also support the preparation of

draft contracts and bid packages for the BRT operator(s), the fare collector and the funds

manager, including provision of the specifications for high-capacity (articulated) buses

and fare collection equipment concurrently.

29. Regulatory Framework for a BRT system: NUTRIP will support the

identification of regulatory reforms that are necessary to structure and rationalize the

provision of public transport services. The modalities of conducting the BRT engineering

and operational design studies will be based on the most beneficial approach to the

country, taking into account the existing capacity and expertise to coordinate the

concurrent preparation of the various inter-linked activities required to design a BRT

system. For instance, by opting for an all-inclusive multi-disciplinary study to be

conducted by a consortium of international and local firms that combine all required BRT

expertise, managerial skills to coordinate all activities into a coherent and consistent BRT

system design will largely rest with the consortium. The assignment could cover: (i)

preparation of a roadmap for public transport development as the foundation for a

comprehensive BRT system; (ii) passenger and revenue forecasting; (iii) detailed

engineering and operational designs; (iv) BRT system management and delivery

planning; (v) financial and economic appraisal; (vi) environmental/social impact

42

assessments; and (vii) preparation of bid documents for civil works and operational

component, which will include contracts for BRT services such as supply and operation,

fare collector, fund manager, and technical specifications for fare collection system.

30. Planning for future BRT infrastructure must be anchored in the transport master

plan for Nairobi. Preparation of such a plan will be essential. The plan will provide the

basis for all planned and future transport services and infrastructure activities. More

specifically, new transport services and all designs for construction/rehabilitation of

transport infrastructure must incorporate compatibility with (future) transport components

included in the Master plan (e.g. extension of BRT lanes, new commuter rail services,

development of pedestrian and bicycle routes, etc). The Ministry of Nairobi Metropolitan

has commissioned a traffic management study and it is recommended that KURA takes

stock of the scope of this study. Contingent upon KURA‘s findings, further support for

strengthening traffic management in Nairobi may be defined, possibly including traffic

modeling within the context of BRT operations to optimize the use of scarce road space.

(b) Commuter Rail Services

31. Kenya Railways Corporation (KRC) operations are governed by the KRC Act and

its operations are also subject to the provisions of the State Corporations Act and the

Exchequer and Audit Act. Therefore guidelines that are issued from time to time on the

operations of the State Corporations by the GoK influence the management and operation

of the KRC and occasionally could inhibit decision-making processes through directions

from various GoK agencies.

32. In 2006, the GoK concessioned the operations of its national railway network to

Rift Valley Railways (RVR), a private operator. The term of the concession is 25 years

for freight and five years for passenger services. The concessionaire is expected to

operate freight and passenger services and maintain the full network, whereby the

mainline is to be maintained at least to class-three track standards. The passenger

services concession was due to expire on June 30, 2012 but has been extended by an

additional three years. In support of creating an efficient commuter rail network as

stipulated in Vision 2030, KRC has initiated the process of modernizing, developing and

expanding the existing network in the Greater Nairobi Metropolitan Area.

33. Urban rail commuter passenger services are offered during morning and evening

peak hours in Nairobi city on three routes (central station to Dagoretti; Ruiru; and Stoney

Athi) with all the trains terminating at the central railway station. The services currently

offered do not cater for the needs of the majority, who still walk to their places of work.

Most people are not linked to railways and the rail infrastructure on the core commuter

network is in poor/fair condition with clear maintenance backlogs. Passenger services are

provided using over-aged and worn-out coaches with seats falling to pieces, no lighting

and in some cases no glass in windows. Motive power is provided from the

concessionaire’s (RVR) pool of aged diesel locomotives that are poorly suited for the

purpose. Furthermore, these locomotives are shared with freight services that take

priority in allocation resulting in cancellation of passenger services. Thus, the reliability

43

and quality of operations is limited by the condition of the infrastructure network and the

lack of adequate rolling stock.

34. In addition, commuters still spend a lot of time changing from one mode of

transport to another because of a lack of intermodal terminals that would facilitate rapid

and convenient change transport modes. As a result, railway modal share in urban

passenger transport stands at 22,000 passengers/day (one percent of public transport

demand), despite the potential demand for rail services in densely populated urban areas

crossed by the core network.

35. RVR‘s Annual Report for 2010/2011 notes an increase in the number of

passengers transported during this period, both mainline and commuter, amounting to 29

percent, with the number of passenger kilometers increasing by 11 percent. Whereas

mainline passenger transport noted a drop of three percent in the number of passengers

during this period, commuter transport noted a growth of 32 percent, amounting to

6,679,786 passengers annually as compared to 5,059,179 in 2009/2010. Revenue

generated by passenger transport amounted to US$3.3 million, about six percent of total

revenue, while freight transport accounted for US$53 million or 93 percent of total

revenue. In FY2010/2011 RVR recorded a total loss of US$17.9 million, with an

accumulated loss on June 30, 2011 of US$92 million.

36. Even without counting on a transparent contractual framework for services to be

provided, careful attention must be given to the engineering of the financial architecture

for the rail commuter services, including the development of a realistic business model

for rail commuter operations.

37. Despite the low levels of service noted above, rail commuter transport in Nairobi

grew in 2010/2011 due to an increase in trains run from eight to 14 daily, using the

existing resources; opening of a new route to Stony Athi; and an increase in the number

of coaches from 50 in 2009/2010 to 62. Hence, rail commuter transport in Nairobi has

proven to have growth potential, but the poor financial performance of RVR and the lack

of transparent service contracts (both for maintenance and passenger operations) between

the Government and KRC (or the concessionaire) are likely to raise concerns within the

private sector regarding the financial viability of embarking on the provision of rail

commuter services. This is likely to result in potential operators requesting additional

financial compensations to cover their risks, such as compensation for public service

obligations and/or compensation for the purchase of new rolling stock that the operator

must provide. Therefore, KRC will require contract passenger rail business (financial)

expertise to assess commuter rail financial performance and viability in full detail, and a

legal and regulatory framework that would allow for open access to the track and support

the existence of a competitive railways sub-sector.

38. A market demand analysis study on the improvement of the existing rail network

for commuter services is being supported by InfraCo6. Preliminary results indicate that

6 InfraCo is a subsidiary of Private Infrastructure Development Group (PIDG), supported by Development

Partners, including UK, Germany, World Bank, IFC and others.

44

certain sections of the core rail network that are critical to providing a comprehensive

geographic coverage are not viable without injection of public sector financing. The

study concludes further that, out of the existing lines, the Thika line has the highest actual

ridership and potential demand, and is therefore a priority for upgrading.

39. To make commuter rail services viable, significant public sector contribution to

the capital costs will be required, in particular for upgrading of the rail infrastructure on

the three routes including signaling. As for the provision of the rolling stock, the study

sees several opportunities (e.g., a leasing agreement with rolling stock providers instead

of buying outright the rolling stock). Comprehensive feasibility and detailed engineering

designs and studies of both the infrastructure and operations of a commuter rail service

have not been carried out. Accordingly, the GoK has requested the involvement of the

Bank to finance some of these activities.

40. The KRC/Infraco 2010 report provides preliminary information for commuter rail

modernization in Nairobi. The plan involves expanding the rail commuter network in

Nairobi and its environs and identifies a ―core network‖ covering about 100 km and an

expanded system that will cover another 82 km. The activities that have been identified

by KRC for possible Bank support include feasibility and detailed engineering designs

and studies of the existing lines and stations; provision and installation of a new

signaling system enhancing line capacity; provision and installation of a communication

system for train control; provision and installation of a fare collection system; capacity

building and training of KRC staff; and procurement of a track recording car for

monitoring of track quality in operation.

41. NUTRIP will support some of these activities. The proposed Component B of the

project (Support to KURA and KRC to Develop Mass Transit Corridors) will involve

carrying out feasibility studies and detailed engineering designs for selected commuter

rail lines, and preparation of bidding and contract documents for works and associated

facilities as well as selection of private sector operators to provide large capacity buses

for a BRT system and rolling stock for a commuter rail system are a precursor of a

proposed follow on activities that would possibly be financed by the Bank.

(c) Environmental and Social Impact Assessments (ESIAs) on the proposed BRT

systems and Commuter rail lines

42. It should be noted that the feasibility studies and detailed engineering designs for

both the proposed BRT systems and commuter rail lines will include an evaluation of

environmental issues associated with direct and indirect impacts during the planning,

construction, and operation phases, and outline its implementation in relation to other

aspects of project preparation, design, and implementation. These feasibility studies on

the proposed commuter rail lines will include assessing the construction of the high

density railway line and its associated facilities. Therefore, the ESIA will address

environmental impacts which may arise from construction and operation activities and

provide a mitigation plan to prevent or minimize adverse impacts.

45

43. On the basis of the foregoing background, this component will include two sub-

components as follows:

44. Sub-component B1. KURA (sub-total cost US$64.83 million, of which

US$47.77 million IDA). This component will involve:

(a) Carrying out a range of feasibility studies including detailed designs and

preparing bidding documents for selected Bus Rapid Transit (BRT) road

corridors, through provision of technical advisory services.

(b) Providing public transport and associated services, through provision of

technical assistance.

(c) Developing and implementing a scheme to decongest major urban areas,

through provision of goods, services and works.

(d) Carrying out activities to improve traffic management, including construction

of traffic control centers, provision of traffic management Information

Communication Technology (ICT) solutions, all through provision of goods,

works and services.

(e) Implementing regulatory reforms to rationalize the provision of public

transport services and strengthen the management of public transport

operations, through provision of services.

(f) Constructing the Meru bypass roads.

(g) Strengthening the capacity of KURA to implement urban transport reforms

through training and provision of goods, services and technical assistance.

(h) Building the capacity of KURA‘s staff in traffic planning, management,

regulation and involvement of private sector in financing urban transport

infrastructure and relevant services, through provision of services and

training.

(i) Carrying out: (i) feasibility and detailed engineering design studies of missing

road links in major towns, (ii) a study and developing an urban transport plan

for the city of Mombasa, and (iii) a study for the improvement of traffic flows

of major towns, all through provision of technical advisory services.

(j) Supervising road works construction in sub-component B1 of the project,

through provision of technical advisory services.

(k) Establishing a program to address HIV/AIDS in all the roads contracts, all

through provision of goods and services7.

45. Sub-component B2. KRC (sub total cost US$15.63 million, of which US$11.93

million IDA). This component will involve:

(a) Carrying out feasibility studies and detailed designs, and preparing the

necessary bidding documents for construction of selected commuter rail

systems in Nairobi and other major towns, through provision of technical

advisory services.

7 The HIV/AIDs program is for all road contracts under Component A and Sub-component B1 in the

project.

46

(b) Preparing bidding and contract documents for the selection of private sector

operators providing commuter rail operations and associated services, through

provision of advisory services.

(c) Supplying and installing information systems (IT) and building the capacity of

KRC in IT, management of private sector involvement, planning, management

of contracts including for concessionaires; and other oversight functions; all

through provision of goods, training and services.

46. Component C: Institutional Strengthening and Capacity Building (total cost

US$21.50 million, of which US$17.04 million IDA): This component will support and

deepen the implementation of reforms in the transport sector with a major focus on urban

transport. This component has two sub-components, C1 and C2.

Institutional and Policy Reform

47. The institutional framework for urban transport provision involves several entities

with partial and sometimes overlapping and contradictory mandates and responsibilities.

These fragmented institutional mandates contribute to a dilution of scarce financial

resources, leading to under-investment in transport facilities. The various entities

involved in urban transport include: the Ministry of Roads (MoR), responsible for

formulation of the national road policy and road sub-sector administration; the Ministry

of Local Government, responsible for administering and supporting the Local Authorities

(LAs) and formulating the national policy on urban development; the Ministry of

Transport (MoT), responsible for formulation of the national transport policy and

transport sector administration; the Ministry of Nairobi Metropolitan Development; the

Ministries of Lands, and Housing, responsible for administering and supporting the Local

Authorities; the Kenya National Highways Authority (KeNHA), responsible for

development and maintenance of national roads; the Kenya Urban Roads Authority

(KURA), responsible for development and maintenance of urban roads; the City Council

of Nairobi (CCN) and local councils; the Kenya Railways Corporation (KRC) and Rift

Valley Railways (RVR). With urban transport mandates and responsibilities spread

across a multiplicity of institutions with overlapping or even contradictory policies, urban

transport management is fragmented and often not transparent.

48. New constitution and governance structure. The current set up is likely to

change as the new constitution (2010) and the agreed reforms are implemented, thereby

altering the institutional and implementation arrangements of NUTRIP. Amendments to

the project design may be required during implementation to reflect these changes. The

draft INTP and the new constitution provide a framework for the governance structure

that is likely to emerge in the foreseeable future for the urban transport sub-sector. The

proposed NMTA, in the case of Nairobi, will allow for placing all public transport issues

such as licensing, regulating public transport and traffic management under one agency,

and similarly all national road safety matters will be under the proposed RTSA.

49. NUTRIP will support the development of an effective framework of management

and control that requires an organizational structure that clarifies responsibilities and

47

accountability through a clear separation between regulator, manager and operator. The

regulator sets the policy and operational guidelines (through regulation) but carries little

or no operational risk. The manager is in charge of ‗system management‘, ensuring

compatibility of road based public transport and commuter rail transport, and it takes the

operational risk, contracting service providers (operators) using transparency and

affordability as guiding principles (e.g. public service contracts). The operator runs the

services and usually bears some risks, as agreed in the contract.

50. Government policy principles for urban transport reform: Confronted with

the rapidly deteriorating urban (transport) environment, the GoK has identified the

institutional principles necessary to address arrangements for relationships between

various levels of Government, as well as the structure for non-governmental or statutory

bodies and the private sector.

51. The traditional way of organizing public transport services is through regulation

of operators through permits or licenses, aiming at the creation of a level playing field

that facilitates fair intra- and intermodal competition. The large number of operators that

provide public transport services in Nairobi, for instance, makes public transport

regulation, management and enforcement a daunting challenge. Therefore, successful

implementation of an efficient mass urban transport system will hinge on structural

reforms of the actual urban transport sector, aiming at intra-and intermodal integration

and the creation of a level playing field that facilitates fair competition between modes.

In this context, the main institutional and regulatory constraints for establishing and

managing an integrated and sustainable urban traffic and public transport system should

focus on addressing the following:

(a) Lack of a comprehensive urban traffic and transport strategy. Development of

such a strategy originates in the consolidation of various urban traffic and

transport policies. The urban transport strategy must prioritize mass public

transport and intermediate means of transport and will provide guidance to the

Nairobi Metropolitan Transport Authority in formulating short, medium and long

term actions;

(b) Incomplete legal and regulatory framework. Strengthening and consolidation of

the legal and regulatory framework is indispensable for the establishment of

adequate technical, institutional, financial and socio-environmental conditions for

the concessioning and operation of separated bus-corridors, feeder routes, and rail

commuter services. This includes re-regulation of matatu services and careful

consideration of affordable public service obligations for BRT and commuter rail

service providers;

(c) Weak institutional capacity of public agencies and weak professional capacity of

operators involved in public transport provision. Strengthening of institutional

capacity and training of public and private urban transport professionals will

facilitate the proposed reforms and rationalization of the sector; and

(d) Lack of sufficient enforcement and control capacity within the metropolitan

structure. Compliance with laws, regulations and route concessions to be

introduced depends on reliable enforcement and control mechanisms.

48

52. Operational set up of public transport. Whereas the central government has to

take the lead in formulating a comprehensive urban traffic and transport strategy, the

other issues call for a structural reform of the urban transport sector. Urban transport

sector reforms must be anchored in a clear separation of the roles of owner, regulator,

manager and operators. Such separation is best based on the principle that responsibilities

are assigned according to what each entity does best.

53. Under such circumstances, therefore, the GoK will be the owner of the public

transport system assets and make sure the assets are maintained and utilized to their

optimum capacity. The regulator will provide operational guidelines, based on the

Government‘s transport strategic policy, and ensure that funding mechanisms are in place

(budgets, subsidies, public service contracts). This task is to be conducted by the Nairobi

Metropolitan Transport Authority (NMTA), being the Government‘s representative for

implementation of the urban transport component of the INTP.

54. The formation of the proposed NMTA will have to ensure that all urban transport

stakeholder interests are represented at the board level so as to guide the line agencies

(road, rail) responsible for system management and operations appropriately.

Clarification on the operational set up will be required. For instance, the manager will be

either that of a ‗BRT business manager‘ or ‗commuter rail business manager‘ or, if a

wider network is managed (e.g. feeder services), that of a ‗system manager‘. Guided by

the strategic policy set by the NMTA, the manager will develop tactical policies to

manage the business of public transport efficiently and effective. The system manager

will contract the operation of the public transport mode (BRT, commuter rail service)

through a performance-based contract to operators who perform services according to the

contract specifications. The manager will have the end responsibility for the performance

of the business and as such will monitor and enforce the conditions of the contract. The

role of the operator will be to perform the services according to the specifications and

standards of the contract. The contract will also define the responsibilities and duties of

both the principal (manager) and the client (operator) and so will provide the basis for

investments.

55. The GoK is implementing a number of reforms across the transport sector

including in roads, aviation, railways, and maritime, with the support of the Bank, in an

effort to improve sector performance, though urban transport is lagging behind the other

sub-sectors. The institutional strengthening component under NUTRIP will therefore

address the regulatory, monitoring, and control functions of the urban public transport.

Building upon the Government‘s urban traffic and transport strategy, the project will

support: (a) the development and implementation of an integrated public transport policy

that covers all modes and that includes the required regulatory and policy framework, its

administration, operation, monitoring and control; (b) the formal creation, technical

assistance and training of the Nairobi Bus Rapid Transport entity under the proposed

NMTA as the responsible entity for the BRT operations; (c) technical assistance and

training of the NMTA entities responsible for public transport regulations, public

49

transport monitoring, control and enforcement; and (vi) capacity building/strengthening

for monitoring and evaluation of the project and all its components.

56. The proposed project will support further the development of an effective

framework of management and control, which requires an organizational structure that

clarifies responsibilities and accountability through a clear separation between regulator,

manager and operator. The regulator will set the policy and operational guidelines

(through regulation) but carry little or no operational risk. The manager will be in charge

of ‗system management‘ (e.g. road based public transport, commuter rail transport) and

take the operational risk, contracting service providers (operators) using transparency and

affordability as guiding principles (e.g. public service contracts). The operator will run

the services and will usually bear some risks, as agreed in the contract.

The East African Aviation School (EASA)

57. The project will support enhancing further the capacity of the EASA, which is

currently a directorate of the Kenya Civil Aviation Authority (KCAA), in an effort to

transform it into a stand-alone self-sustaining institution. This is part of the planned

restructuring of KCAA, which involves separating the regulatory function from its

service provision responsibilities. EASA is responsible for providing training for

aviation personnel not only within Kenya but also for a number of countries across

Africa. The support EASA has received through the Bank-financed NCTIP has enabled it

to offer new and advanced courses in aviation, which has generated demand from all over

Africa that the school is unable to meet. The proposed support under this project of US$6

million toward EASA is not only to enable it respond to the growing training needs in the

aviation sub-sector but also to prepare it for eventual de-linking from KCAA. The US$6

million will finance the acquisition of training equipment such as air traffic control

training simulators and expanding and equipping its library, to cater for both students and

the teaching staff.

58. Component C will therefore support and deepen the implementation of reforms in

the transport sector, with a major focus on urban transport, and will involve two sub-

components:

59. Sub-component C1. MoT (sub-total cost US$16.90 million, of which US$13.44

million IDA). This component will involve:

(a) Implementing selected activities in the Integrated National Transport Policy

agreed with the Association, including establishing the proposed National

Road Transport and Safety Authority and building its capacity to carry out its

functions, all through provision of goods, works, and services.

(b) Establishing the proposed Nairobi Metropolitan Transport Authority and

building its capacity to carry out its functions, through provision of goods and

services.

50

(c) Strengthening the capacity of the East Africa School of Aviation and

promoting private sector participation in the aviation sub-sector through

provision of technical advisory services.

(d) Carrying out urban transport sub-sector studies and provision of technical

advisory services.

(e) Strengthening the capacity of MoT staff to carry out their responsibilities,

through training and provision of technical advisory services.

60. Sub-component C2. MoR (sub-total cost US$4.60 million, of which US$3.60

million IDA). This component will involve:

(a) Strengthening the capacity of MoR staff to carry out its responsibilities,

including monitoring and evaluation of the Project, through training and

provision of goods and services.

(b) Building the capacity of the newly-established National Construction

Authority and preparing the implementing regulations for the National

Construction Authority Act (2011), through provision of goods and services.

(c) Building the capacity of the newly established Engineers Board of Kenya and

developing the implementing regulations for the Engineers Act (2011),

through provision of goods and services.

51

Table 2: Preliminary Costs (including contingencies) and Financing

Financing Proportions IDA GOK

Civil works 80% 20%

Consulting services 80% 20%

Goods/Equipment 80% 20%

Training 100% 0%

Category

Base

Cost

Contin-

gencies Total IDA GoK

Works 37.18 6.82 44.00 35.20 8.80

Works 114.08 20.93 135.00 108.00 27.00

Works 54.08 9.92 64.00 51.20 12.80

4. Kisumu Northern Bypass (9 km) Works 8.45 1.55 10.00 8.00 2.00

213.79 39.22 253.00 202.40 50.60

5. Updating Designs and Supervision of works

(a) JKIA junction-Southern Bypass Cons 1.84 0.16 2.00 1.60 0.40

(b) Southern Bypass-James Gichuru junction Cons 3.68 0.32 4.00 3.20 0.80

(c) James Gichuru junction-Rironi Cons 1.66 0.14 1.80 1.44 0.36

(d) Kisumu Northern Bypass Cons 0.64 0.06 0.70 0.56 0.14

7.82 0.68 8.50 6.80 1.70

6. Promotion of Private Sector participation in Road sub-sector Cons 3.68 0.32 4.00 3.20 0.80

7.36 0.64 8.00 6.40 1.60

8. Capacity Building and Technical Assistance Cons 3.40 0.30 3.70 2.96 0.74

Training 1.38 0.12 1.50 1.50 0.00

15.82 1.38 17.20 14.06 3.14

Activities Funded fully by GoK

10. Operating costs Op 1.45 - 1.45 0.00 1.45

5.00 - 5.00 0.00 5.00

26.00 - 26.00 0.00 26.00

32.45 - 32.45 - 32.45

269.88 41.27 311.15 223.26 87.89

Cost Est& Financing Plan (US$M)

9. Training of KeNHA, External Resources Department (MoF)

and State Law Office staff

11. Feasibility and detailed designs studies of JKIA junction-

Southern Bypass-junction; Southern Bypass-James Gichuru

junction; James Gichuru-Rironi; Kisumu Bypass and Machakos

Turnoff-Konza ICT City

12. Implementation of RAPs and relocation of public utilities

associated with works contracts

Sub-total: Activities funded fully by GoK

A.    Support to KeNHA to Upgrade the Urban Road Transport Infrastructure

Component

Total for component A (KeNHA)

Sub- total: Construction works

1. JKIA junction-Southern Bypass junction (7 km, 6 lanes) and

associated interchanges, service and access roads (8 km)

2. Southern Bypass junction-James Gichuru road junction (12 km)

including 9 interchanges and elevated highway (4 km)

3. James Gichuru junction-Rironi (26 km of which 7 km 6 lanes and

19 km 4 lanes)

Sub-total: Supervision of works

Sub-total: Other consulting services

7. Feasibility and detailed design and studies for improvement of

road arteries adjoining major towns

52

Category

Base

Cost

Contin

gencies

Total IDA GoK

Cons 8.45 1.55 10.00 8.00 2.00

Cons 6.76 1.24 8.00 6.40 1.60

Goods/

works 15.21 2.79 18.00 14.40 3.60

(d) Construction of Meru Bypass roads (21 km) Works 12.68 2.33 15.00 12.00 3.00

Cons 0.92 0.08 1.00 0.80 0.20

Cons 1.84 0.16 2.00 1.60 0.40

Cons 1.84 0.16 2.00 1.60 0.40

Cons 2.58 0.22 2.80 2.24 0.56

Training 0.67 0.06 0.73 0.73 0.00

(j) Operating costs Op 0.90 - 0.90 0.00 0.90

(k) Implementation of RAP associated with works contract (GoK) 4.40 - 4.40 0.00 4.40

56.24 8.59 64.83 47.77 17.06

Cons 9.20 0.80 10.00 8.00 2.00

Cons/

goods 3.68 0.32 4.00 3.20 0.80

Training 0.67 0.06 0.73 0.73 0.00

(d) Operating costs Op 0.90 - 0.90 0.00 0.90

14.45 1.18 15.63 11.93 3.70

70.69 9.77 80.46 59.70 20.76

1. MoT

Cons

/Goods/

works 6.90 0.60 7.50 6.00 1.50

Cons 3.68 0.32 4.00 3.20 0.80

(c) Road safety interventions

Cons/

Works 4.42 0.38 4.80 3.84 0.96

(d) Training and capacity building Training 0.37 0.03 0.40 0.40 0.00

(e) Operating Costs 0.20 - 0.20 0.00 0.20

15.56 1.34 16.90 13.44 3.46

2. MoR

Cons 2.76 0.24 3.00 2.40 0.60

Cons/

Goods 0.92 0.08 1.00 0.80 0.20

0.37 0.03 0.40 0.40 0.00

(d) Operating Costs Op 0.20 - 0.20 0.00 0.20

4.25 0.35 4.60 3.60 1.00

19.81 1.69 21.50 17.04 4.46

Grand Total Components (A, B, C) 360.39 52.72 413.11 300.00 113.11

(i) Training of KURA Staff

2.     KRC

(h) Traffic management studies and activities

(b) Capacity building and Technical Assistance and support

implementation of NCA Act and Engineers Act

(c) Training

(a) Feasibility and detailed design and studies for selected

Commuter and Light rail routes in Nairobi and other major towns

Sub-total: Sub component B1 (KURA)

Sub-total: Sub component C1 (MoT)

(a) Project Monitoring and Evaluation and sector coordination

(b) Institutional Building, TA and advisory services

(e) Supervision of construction of Meru Bypass (21 km)

(f) Study and developing an urban Transport Master Plan for

Mombasa

(g) Institutional Strengthening, Technical Assistance (TA) and

modernizing management information systems and ICT

(b) Feasibility and design studies of selected missing road links

in Nairobi and other major towns

Component

Sub-total: Sub component C2 (MoR)

Total for Component C

C. Institutional Strengthening and Capacity Building

Total for Component B

(b) Urban Transport sector studies, including, among others, the

development of an urban transport sector strategy; and

promotion of PPP in the provision of transport services

(c) Training of KRC staff

(a) Feasibility and design studies of selected Bus Rapid Transit

(BRT) Corridors & preparation of bidding documents for BRT

services operations

(a) TA for strengthening: (i) the National Road Transport and

Safety Authority and the National Road Safety Program; (ii) the

Nairobi Metropolitan Transport Authority; (iii) the East African

School of Aviation; and (iv) support PPP activities in aviation

industry

Sub-total: Sub component B2 (KRC)

B. Support to KURA and KRC to Develop Selected Mass Transit Corridors

1.    KURA

(c) Improvement of Traffic Management systems

53

Annex 3: Implementation Arrangements

KENYA: National Transport Improvement Project (NUTRIP)

Project Institutional and Implementation Arrangements

A Project Administration Mechanisms

1. The Kenya National Highways Authority (KeNHA), Kenya Urban Roads

Authority (KURA), Kenya Railways Corporation (KRC), the Ministry of Transport

(MoT) and the Ministry of Roads (MoR) will be responsible for implementing the

project. KeNHA is responsible for the management of all national roads in Kenya;

KURA is responsible for all urban roads, KRC is responsible for the development and

oversight of railways, MoR is responsible for policy and technical standards pertaining to

roads sub-sector issues; and MoT is responsible for other transport matters. A significant

scope of the project covers the road sub-sector comprising mainly of improvement of

road infrastructure and related facilities. KeNHA, KURA, and KRC, parastatals with

independent Boards of Directors outside the central Government, will implement 95

percent (in terms of cost) of the project and the balance (five percent) will be

implemented by MoR and MoT.

2. The overall project implementation arrangements are illustrated in figure 1 and

the details are provided in section IV of the main text. The MoR will be responsible for

the overall project coordination and each implementing agency will be responsible for the

implementation of its respective component or subcomponent of the project. Except for

KURA, the four other agencies are currently implementing Bank-financed projects,

though a number of its project staff have working experience on Bank funded operations.

The project will be mainstreamed into the operations of these institutions and form an

integral part of their operation and investment program.

3. The project will be implemented as follows:

(a) Component A: Support to KeNHA to Upgrade Urban Road Transport

infrastructure.

(b) Component B: Support to KURA and KRC to Develop Selected Mass transit

Corridors as follows:

Sub-Component B1: KURA

Sub-Component B2: KRC

(c) Component C: Institutional Strengthening and Capacity Building Assistance as

follows:

Sub-Component C1: MoT

Sub-Component C2: MoR

54

Coordination and Oversight Arrangements of the Project

Figure 1: Implementation Arrangements

NUTRIP PROJECT OVERSIGHT COMMITTEE

MINISTRY OF ROADS

PIT

MINISTRY OF TRANSPORT

PIT

KENYA URBAN ROADS AUTHORITY

PIT

KENYA NATIONAL HIGHWAYS

AUTHORITY

PIT

KENYA RAILWAYS CORPORATION

PIT

PROJECT COORDINATOR

MASS RAPID TRANSIT

CONSULTATIVE COMMITTEE

55

4. Lessons Learned. The implementation arrangements incorporate the lessons learnt

from other World Bank financed projects in Kenya. For instance, NCTIP was a first

major transport project financed by the Bank after a 10-year break in its lending program

to the transport sector and it was imperative to build capacity in the implementing

agencies to manage major projects. Therefore, adequate capacity building on operational

BRT components will be provided to the KURA PIT through internationally recruited

Technical Assistance (TA) and training. Keeping infrastructure and operations

components in one agency facilitates good coordination in the preparation of the various

BRT (sub-) components. Once the proposed NMTA is established, the KURA PIT could

be transformed into the Public Transport Department as part of the Authority.

Composition of the Project Implementation Teams (PITs)

5. As regards implementation of Component A, the Director General (DG) of

KeNHA has appointed a Team Leader for the PIT with experience and successful track

record in implementation and management of Bank financed projects. The KeNHA-PIT

Team Leader will report to the DG of KeNHA. The members of the team who will

manage the day-to-day activities of the KeNHA components will include: Team Leader;

Pavement/Materials Specialist; Social Development Specialist; Engineering/Design;

Environmental Specialist; Procurement Specialist; Financial Specialist; Construction

Specialist; Economist; BRT Specialist; and Public Private Partnership (PPP) Specialist.

6. To implement Sub-component B1, the DG of KURA has appointed a Team

Leader for the PIT with experience in implementation and management of Bank financed

projects. The KURA-PIT Team Leader will report to the DG of KURA. The members

of the team who will manage the day-to-day activities of the KURA sub component will

include: Team Leader; Pavement/Materials Specialist; Social Development Specialist;

Engineering/Design; Environmental Specialist; Procurement Specialist; Financial

Specialist; Urban Transport Specialist; Institutional Specialist/Economist; and Private

Public Partnership (PPP) Specialist. An experienced international BRT Specialist will be

contracted to advise the team on the preparation of the BRT system operational activities,

to be done concurrently with the engineering designs.

7. As for the implementation of Sub-component B2, the Managing Director (MD)

of KRC has appointed a Team Leader for the PIT with experience in implementation and

management of Bank financed projects. The KRC-PIT Team Leader will report to the

MD of KRC. The members of the team who will manage the day-to-day activities of the

KRC sub component will include: Team Leader; Social Development Specialist;

Engineering/Design; Environmental Specialist; Procurement Specialist; Financial

Specialist; and Railway Planning Specialist; Institutional Specialist/Economist, and PPP

specialist. The PPP specialist can possibly be shared with KURA, as several of the issues

to be tackled overlap.

8. As regards the Sub-component C1, the PS, MoT will appoint a Team Leader for

the PIT. The MoT PIT Team Leader will report to PS of MoT and will manage the day-

to-day activities of Sub component C1. The members of the team will include: Team

56

Leader; Procurement Specialist; Financial Management Specialist; Transport Economist;

Institutional Specialist; Principal, East Africa School of Aviation; an Economist from

Kenya Civil Aviation Authority (KCAA); and Road Safety Specialist.

9. To implement Sub-component C2, the PS, MoR will appoint a Team Leader for

the PIT. The MoR PIT Team Leader will report to the PS of MoR. The members of the

PIT will include: Team Leader; Procurement Specialist; Financial Management

Specialist; Economist/Monitoring and Evaluation Specialist; and Civil Engineer

(Planning).

The Terms of Reference (ToR) for the Project Coordinator

10. The PC will be responsible for the following:

(a) Provide overall project coordination and reporting;

(b) Ensure timely production of joint overall project implementation progress

reports and dissemination of necessary information;

(c) Report to the POC all projects related matters, any difficulties/bottlenecks and

policy; matters that may hinder smooth project preparation and

implementation;

(d) Convene meetings, chaired by Roads Secretary (MoR) with Team Leaders on

a quarterly basis during project implementation;

(e) Ensure that adequate coordination exists with all other PITs and MoF as

required; and

(f) Secretary to the POC and MRT Consultative Committee.

The Terms of Reference (ToR) for the Team Leaders

11. The Team Leaders will provide the overall leadership of their respective

component(s) of the project, and will be responsible for the following:

(a) Manage the day-to-day operations of their respective component(s);

(b) Plan, direct, control and coordinate activities of the project under their

management;

(c) Monitor the commitment of their respective organizations to the project;

(d) Monitor the performance of consultants and contractors in accordance to

agreed contractual obligations;

(e) Implement the project in accordance to the overall plan of operations and

activity schedules and report changes thereto;

(f) Ensure that there is structured and consistent monitoring of progress of

implementation, including the regular reports, and audit reports; and

(g) Ensure project progress reports are submitted to the Project Coordinator (PC)

in a timely manner.

57

The ToR of the Project Implementation Teams

12. The PITs will carry out the following pre-contract and project management

activities:

Pre-award Activities

(a) Prepare the project implementation plan;

(b) Follow up on all actions agreed with the World Bank related to project

preparation;

(c) Invite bids according to World Bank procedures;

(d) Select consultants according to World Bank procedures;

(e) Prepare project contractual documents;

(f) Prepare bidding documents and or request for proposals as appropriate;

(g) Conduct evaluation of bids and or proposals;

(h) Undertake contract negotiations;

(i) Facilitate issuing of letters of awards; and

(j) Liaise with World Bank as well as other PITs and other key stakeholders as

part of coordination role.

Project Management Activities

(a) Discuss and agree with the consultants, suppliers, contractors, and key

stakeholders, where appropriate (e.g. matatu associations, bus operators, City

Council of Nairobi (CCN), etc.) detailed project activities;

(b) Facilitate the mobilization of contractors and consultants and delivery of

goods;

(c) Facilitate import clearance;

(d) Supervise and monitor consultants and contractors;

(e) Supervise project implementation at all levels;

(f) Draw up procedures for receiving, verification and payment of invoices on

timely basis;

(g) Ensure timely payments to consultants, contractors and suppliers;

(h) Preparation and submission of progress reports;

(i) Ensure that financial audits are carried out in time;

(j) Ensure all safeguard policies are adhered to; and

(k) Keep and maintain all project records, reports and information.

The ToR for the Oversight Committee (POC)

13. Responsible for overseeing the overall project preparation and implementation,

the POC will:

(a) Provide strategic and policy direction on matters relating to project

preparation and implementation;

58

(b) Ensure the effective performance of the MRT Consultative Committee on

public transport and facilitate the establishment of the proposed NMTA and

National Road Transport and Safety Authority; and

(c) Provide support and resolve any constraints that may hamper project

implementation and which would require interventions from other ministries

or arms of the Government.

14. The POC will meet at least quarterly and MoR will provide the secretariat.

A. Financial Management, Disbursements and Procurement

(a) Financial Management

15. The Bank‘s financial management team conducted a financial management

assessment of KeNHA, MoT, MoR, KRC and KURA - the entities implementing the

Project. MoR, MoT, KRC and KeNHA are currently implementing the NCTIP, EATTFP,

and KTSSP. There are no overdue audit reports. The objective of the financial

management assessment was to determine whether the financial management

arrangements (a) are capable of correctly and completely recording all transactions and

balances relating to the project; (b) facilitate the preparation of regular, accurate, reliable

and timely financial statements; (c) safeguard the project‘s entity assets; and (d) are

subject to auditing arrangements acceptable to the Bank. The assessment complied with

the Financial Management Manual for World Bank-Financed Investment Operations that

became effective on March 1, 2010 and the Banks FM Unit (AFTFM) Financial

Management Assessment and Risk Rating Principles. The overall residual risk rating is

moderate for KeNHA, KURA, MoT and MoR hence the project will have an on-field

supervision at least once a year, while substantial risk for KRC and hence an on-field

supervision of at least twice in a year.

The following are the financial management arrangements for the project.

Budgeting arrangements

16. KeNHA: The budgeting process is deemed adequate. The budgeting process

follows the GoK procedures titled; Government Financial Regulations and Procedures. In

addition, KeNHA has its own procedures manual entitled ‗Financial Policies, Guidelines

& Procedures Manual dated July 1, 2009‘. The Finance Committee of the Board reviews

the budget before forwarding to the full Board for adoption and approval. It is then

submitted to the MoR for inclusion in the mainstream budget before it is submitted to the

MoF for inclusion in the National Budget. KeNHA uses SAGE Pastel accounting

system; however, the budgetary controls module is not fully operational and they have to

do it manually in excel. Currently, there is a consultant on the ground that is fine-tuning

the uncompleted or the partially completed modules. KeNHA should ensure that the

budgetary module is operationalized by March 31, 2013. This is a dated covenant.

59

17. MoR and MoT: The budgeting process is deemed adequate. The budgeting

process follows the GoK procedures titled; Government Financial Regulations and

Procedures. The budget for 2012/13 was prepared on two platforms; the old system and

the Hyperion and was uploaded into the re-engineered Integrated Financial Management

System (IFMIS) supported by the Bank. The re-engineering of IFMIS started in February

2011 and is being driven by the directorate of IFMIS at Treasury. A consultant has been

selected following Bank‘s no objection and the contract is being finalized before signing.

The assessment of the budgeting module for adequacy can only be assessed thereafter.

18. KURA: The budgeting system will be consistent with the GoK‘s budgeting

system and integrated in the parent Ministry‘s budget cycle. The Authority‘s budget is

prepared and approved by the full board before it is submitted to the MoR for inclusion in

the mainstream budget before it is submitted to the MoF for inclusion in the National

Budget. Any adjustment to the budget is done through the Revised Estimates. Budget

monitoring at the Authority is done through the capture of all vote heads in the Excel

work sheet and manual commitment done on any payment being done. This manual

system is subject to errors and omissions. Further, budget execution is monitored through

the monthly expenditure reports compiled by the Authority for each vote head and

reviewed by the responsible managers. The budget system is deemed adequate for

purposes of the Project.

19. KRC: Budgeting at KRC is done by departmental managers. Budgeting

guidelines are documented in the Government Financial Regulations and Procedures

manual. Budgeting is done manually in excel. The budget process starts with the project

coordinator/head of department who comes up with the budget for the project for the

coming year and forwards to the budget committee in the KRC. The budget committee

(members are the heads of department) consolidates the budget into a single corporation

budget and forwards to the KRC board for approval. After the board‘s approval the

budget is forwarded to the MoT. The MoT will review and forward it to the MoF where

the budget is moderated based on estimated revenues and then it is consolidated with the

Kenya National Annual budget for approval by the National Assembly.

20. The budget is broken into quarterly budgets and actual expenditure is compared

with the budget and any variances explained. These revised budgets are incorporated into

the GoK supplementary budget. After the budgets are approved these are loaded into

Navision (an Enterprise Resource Planning system used by KRC since 2009). The

budgeting arrangements are considered adequate for this project.

Accounting arrangements

21. KeNHA: Accounting staff are adequate in terms of numbers, qualification and

experience. The current designated project accountant for NCTIP will also handle the

proposed National Urban Transport Improvement Project (NUTRIP). KeNHA uses both

the GoK procedures and own developed procedures entitled ‗Financial policies,

Guidelines & Procedures Manual‘. These are considered adequate. KeNHA is currently

using SAGE Pastel accounting system. However, the financial reports for the projects

60

cannot be generated directly from SAGE; the system captures KeNHA transactions as a

whole. Manual intervention is required to come up with project reports. A system‘s

consultant is on board customizing the system to enable them generate project reports

directly without manual intervention.

22. MoR and MoT: These line ministries use GoK procedures titled; Government

Financial Regulations and Procedures which are considered adequate. The staffing is

considered adequate. MoR has an External Resources section that deals with donor

funded projects. The Accountant General at Treasury has plans of revamping all External

Resources Sections in all ministries to make them more effective. The current designated

project accountants for KTSSP will also handle the NUTRIP. The new Chart of

Accounts will enable ministries generate project accounts directly from the re-engineered

IFMIS.

23. KURA: The accounting department at the Authority is not adequately staffed.

However, the Authority is having a phased employment to strengthen the staffing level.

The department is headed by the General Manager, Finance and Administration assisted

by the Manager (Finance). The Authority also has 13 Senior Accountants with 10

heading the Accounting of the 10 Regional Offices and three in the headquarters. All the

staffs are graduates with the relevant professional qualifications. KURA has appointed a

senior accountant who will handle all the financial aspects of NUTRIP.

24. The Authority has an approved Financial Policies and Procedures Manual

developed in June 2009. The manual is considered adequate for the project.

25. KURA is currently using SAGE Partner 2009 for accounting and financial

reporting. However, the system has challenges in generation of financial reports as it is a

lower version. It also lacks important modules such as budgetary module. KURA will

be expected to address the system challenges by March 31, 2013. This will be a dated

covenant. These arrangements together with the mitigation measures on identified

weaknesses are considered adequate for the project.

26. KRC: There is adequate accounting staff capacity. Of the eight staff in

accounting department based at headquarters, one has a post graduate qualification, six

are CPAs (K), and two have intermediary accounting qualifications. In addition, there are

more accounting staff at Railway Training Institute and the regional accountants in

charge of the contracts in the regions. All the staff in accounting have at least five years

of experience. Navision (an Enterprise Resource Planning system) is in full use for

accounting process.

27. KRC has appointed project accountants who will handle all financial aspects of

NUTRIP.

61

Internal control and internal auditing arrangements

Internal Auditing

28. KeNHA, KURA, MoT and MoR all have a strong internal audit function with

audit committees in place to address issues raised by both internal and external audit

reports but the audit committee of MoR and MoT are ineffective due to factors like

membership (drawn from staff), regularity of meetings, follow up of audit findings, and

ownership of the Committees by the line ministries. This is expected to change with the

new Public Financial Management bill. In KRC, the internal auditors have been pre-

auditing but the management has implemented phase 1 of the exit plan. The pre-auditing

impairs the auditors‘ independence and may be a sign of ineffectiveness of internal

control systems.

Internal Control Systems

29. KeNHA, KURA, KRC, MoT and MoR have adequate financial management

manuals documenting the internal control systems to be used under the project. From the

latest audit report of KRC, it is evident that the internal control system is weak. The

auditor issued a qualified opinion on the following grounds that point to weak internal

control systems: technical insolvency due to accumulated losses; inability to fairly

ascertain the value of property, plant and equipment; illegal allocation of various parcels

of land by the Commissioner of Lands, inability to confirm the receivables balance as at

June 30, 2010, long outstanding debts whose recoverability is in doubt and failure to

include investment of shares in the financial statements as required by Generally

Accepted Accounting Principles.

30. The accounts of KRC have been prepared on a going concern basis given the

decision by GoK to convert the outstanding long debts and accrued interest into equity

vide a letter dated February 15, 2012.

31. KRC is a public enterprise established by an Act of Parliament and mandated to

provide rail and inland waterways transport. An amendment of the Act in 2005 saw KRC

concede railway operations to Rift Valley Railways (RVR) from November 1, 2006 for

25 years for freight services and five years for passenger services in a private capacity as

a concession.

Governance and Accountability issues

32. All the entities have existing policies on Governance and Anti-corruption. In

addition, the new constitution has devoted a chapter on governance issues. Staff and

stakeholders in these entities are guided by these policies in combating corruption and

unethical business conduct.

62

Funds flow and disbursement arrangements

33. Banking arrangements: The Ministry of Finance (MoF/Treasury) will be required

to open five Designated Accounts denominated in United States Dollars while the

KeNHA, KURA, KRC, MoR and MoT will each open a Project Account denominated in

Kenyan Shillings. Both accounts will be opened in a Central Bank of Kenya or

commercial banks acceptable to International Development Association (IDA). Details of

these accounts once opened and the signatories are to be submitted to the Bank.

Counterpart funding from the GoK is to be remitted into separate project operating

accounts which entities receiving counterpart funding will be required to open.

34. Funds Flow Arrangements: The project will adopt the transaction based

Statement of Expenditure (SOE) method of documentation and disburse through the

reimbursement to the designated account. The Bank will give an initial advance with a

ceiling. Subsequently, the implementing entities will submit their SOE and the Bank will

process the withdrawal applications and deposit funds into the Designated Account.

Funds will then be transferred from the Designated Account at MoF into the project

accounts at the KeNHA, KURA, KRC, MoR and MoT and payments in relation to

project eligible expenditures can be made from these accounts. Each of these

implementing entities will be submitting their own withdrawal application to the Bank

through the MoF.

35. Retroactive financing: The GoK has advanced the preparation and

implementation of some activities of the project. Therefore, a provision of up to US$5

million has been made to cover eligible expenditures incurred on or after November 30,

2011.

36. Risks in the funds flow process. The Kenya portfolio has been facing delays in the

transfer of funds from the Designated Account held at the MoF to the project accounts

held by the implementing entities due to the many approval levels the payment request

has to go through. In addition, there have been delays in the transfer of Government

counterpart funds especially for infrastructure projects and this is likely to affect this

project too. In NUTRIP, Government counterpart funding is about US$113 million of

the project while IDA is financing US$300 million. As a condition of effectiveness, the

GoK will be required to remit into the project operating account an initial amount

equivalent of KES 30 million for Component A. Subsequently, the GoK should remit the

rest of the funds on a quarterly basis for the duration of the project. This will be

monitored by the Financial Management Specialist through the quarterly Interim

Financial Report (IFR).

63

Funds Flow Chart

Figure 2: Funds Flow for the Implementing Entity

37. Disbursement arrangements: The transaction based disbursement SOE will be

used for the project. Other methods of disbursements particularly Direct Payments and

Special Commitments (letters of credit) are encouraged in cases of huge contracts.

Details concerning disbursements will be spelt out in the project‘s disbursement letter

that will be issued by the Bank.

Financial Reporting Arrangements

38. KeNHA, KURA, KRC, MoR and MoT will prepare quarterly un-audited IFRs for

the project in form and content satisfactory to the Bank, which will be submitted to the

Bank within 45 days after the end of the quarter to which they relate. The contents and

format of the IFRs have already been agreed between the Bank and the implementing

entities.

39. The main schedules in the IFR will include: (a) Statement of Sources and Uses of

Funds; and (b) Statement of Uses of Funds by Project Activity/Component.

40. The project will also prepare the projects annual accounts/financial statements

within three months after the end of the accounting year in accordance with accounting

standards acceptable to the Bank. The audited financial statements and management

letter should be submitted to the Bank within six months after the end of the accounting

year. The entities will prepare their accounts in accordance with International Public

Sector Accounting Standards.

WORLD BANK (IDA)

DESIGNATED

ACCOUNT in

USD at Central

Bank of Kenya or

Commercial

Banks (MoR,

MoT, KURA,

KRC, KeNHA)

PROJECT

ACCOUNT

in KES in

Central

Bank of

Kenya/ or

Commercial

Banks

(MoR, MoT,

KURA,

KRC,

KeNHA)

Project transactions paid in both local and foreign currency

Exchequer

(Central

Bank of

Kenya)

KES

GoK Counterpart

Funding

Project Operating

Account in KES in

Central Bank or

Commercial Banks (MoR,

KenHA, KURA, KRC,

KenHA)

64

Auditing Arrangements

41. The office of the Auditor General (previously KENAO) is primarily responsible

for the auditing of all Government projects. The standard audit terms of reference with

Auditor General‘s Office are sufficient for this project. Kenya National Audit Office

(KENAO) will audit NUTRIP annual financial statements prepared by MoT, MoR,

KURA, KRC and KeNHA using the International Standards on Auditing. The audited

financial statements will be submitted to the Bank within six months after the end of the

fiscal year along with the management letter and management response thereto.

42. KeNHA/MoR: There are no overdue audit reports. The audit reports for NCTIP

MoT for fiscal year (FY) 2011 received an unqualified opinion while that of KeNHA was

qualified. The qualification for NCTIP KeNHA was on commitment fee charged on IDA

undrawn funds, though this is a normal charge as long as the Credit remains undisbursed.

All the same, a clearance certificate has been received from KENAO. The other key

issues raised in the management letter of KeNHA relate to interest on delayed payments

attributable to funds flow delays, under expenditure on Nyamasaria-Kericho- Mau

Summit road and maintenance of two project accounts for MoR (which implemented the

component before KeNHA took over) and KeNHA. The reconciliations between MoR

and KeNHA were done and the inactive MoR bank account closed.

43. Meanwhile, the EATTFP KeNHA received a qualified opinion on grounds of

inaccuracies in the Financial Statements. Other issues raised by the auditor included

deficit in budgeted expenditure explained by long procurement procedures and

incomplete project implementation framework of participating countries, maintenance of

two project accounts for MoR (which implemented the component before KeNHA took

over) and KeNHA. KeNHA submitted the required reconciliations to KENAO and a

clearance certificate issued, and the inactive MoR bank account closed.

44. KRC: In the audit of FY June 2010, KRC received a qualified opinion on

grounds of technical insolvency due to accumulated losses; inability to fairly ascertain the

value of property, plant and equipment; illegal allocation of various parcels of land by the

Commissioner of Lands, inability to confirm the receivables balance as at June 30, 2010,

long outstanding debts whose recoverability is in doubt and failure to include investment

of shares in the financial statements as required by Generally Accepted Accounting

Principles (GAAPS). The accounts of KRC were however prepared on a going concern

basis on the support from Government and creditors. In particular, GoK has converted the

outstanding long debts and accrued interest into equity (conveyed by GoK to KRC in a

letter dated February 15, 2012). Furthermore, KRC has prepared a time bound action plan

on how it intends to address the issues raised in the audit report to their conclusion.

45. KURA: In the financial year (FY) June 2010, KURA received an unqualified

audit opinion.

46. The GoK regularly discloses the project audit reports to the public in the spirit of

being transparent.

65

47. The audit reports that will be required to be submitted by the implementing

entities and the due dates for submission are shown in the table below.

Table 1: Audit Reports and Due Dates

Audit Report Due Date

MoT, MoR, KURA, KRC and KeNHA Annual audited financial statements and Management Letter for

the project (including reconciliation of the Designated Accounts

with appropriate notes and disclosures and management letter

responses).

Within six months after the

end of each fiscal/financial

year.

Financial Management Action Plan

The following actions need to be taken in order to enhance the financial management

arrangements for the Project.

Table 2: Important Due Dates

(b) Procurement Arrangements

A. General

48. Procurement for the proposed project would be carried out in accordance with the

World Bank‘s “ Guidelines: Procurement of Goods, Works, and Non-Consulting Services under

IBRD Loans and IDA Credits and Grants by World Bank Borrowers, dated January 2011; and

Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and

Grants by World Bank Borrowers, dated January 2011” and the provisions stipulated in the

Legal Agreement. The various items under different expenditure categories are described

below. For each contract to be financed by the Credit, the different procurement methods

or consultant selection methods, the need for post-qualification, estimated costs, prior

review requirements, and time frame are agreed between the Borrower and the Bank in

the procurement plan. The procurement plan will be updated at least annually or as

required to reflect the actual project implementation needs and improvements in

Action Date due by Responsible

1. Preparation of the Project Implementation Manual Effectiveness GoK

2. GoK remitting into the project account initial

deposit of KES 30 million for Component A

(KeNHA) as counterpart funding.

Effectiveness GoK

3. KURA budgetary modules are customized to move

from a manual to an automated budgetary control

system in a manner satisfactory to the IDA.

March 31, 2013 KURA

4. KeNHA budgetary modules are customized to

move from a manual to an automated budgetary

control system in a manner satisfactory to the IDA.

March 31, 2013 KeNHA

66

institutional capacity. In addition, an overall project implementation manual will be

prepared before the effectiveness of the Credit.

49. Procurement of Works: Works procured under this project would include:

construction of roads along the Northern Corridor and Meru bypass at an estimated total

cost of US$268 million of which 80 percent will be financed from the Credit. The

procurement will be done using the Bank‘s Standard Bidding Documents (SBD) for all

International Competitive Bidding (ICB) and National SBD agreed with or satisfactory to

the Bank. Post-qualification will be carried for all civil works ICB contracts unless

agreed otherwise between the Borrower and IDA and reflected in the respective annual

procurement plan. Bids for large works contracts will be invited without pre-

qualification, consistent with the Governance Action Plan (GAP). Some small works to

improve urban public transport may be undertaken and the use of the framework

agreements could apply. The type and cost for such works will be defined and agreed

between the Borrower and IDA prior to their inclusion in the updated annual procurement

plan.

50. Procurement of Goods: Goods procured under this project would include:

Information Communication Technology (ICT) goods (hardware and software), and

traffic management-related equipment. The procurement will be done using the Bank‘s

SBD for all ICB and National SBD agreed with or satisfactory to the Bank. The project

proposes to introduce new initiatives in the provision of an efficient urban public

transport and the use of framework agreements may be used to implement some actions

such as traffic management measures on an urgent basis. The nature and budget for such

goods will be defined and agreed between the Borrower and IDA prior to their inclusion

in the updated annual procurement plan.

51. Procurement of non-consulting services: Non-consulting services are envisaged

under the project. The type and budget for such services will be defined and agreed

between the Borrower and IDA prior to their inclusion in the updated annual procurement

plan.

52. Selection of Consultants: Consulting firms will be hired for feasibility studies,

designs and supervision of construction contracts while individual consultants will be

employed for technical assistance (TA) services. Shortlists of consultants for services

estimated to cost less than US$200,000 equivalent per contract may be composed entirely

of national consultants in accordance with the provisions of paragraph 2.7 of the

Consultant Guidelines. Public universities will be competitively selected for monitoring

and evaluation (M&E) activities under the project. The project includes some complex

issues and new initiatives that will be piloted in Kenya including BRT. Therefore

procurement under public private partnerships; services of public universities; and

Indefinite Delivery Contracts (IDCs) or Price Agreements (PAs) are likely to be used.

The specific method of procurement to be used and more detailed cost estimates for such

services will be defined and agreed between the Borrower and IDA prior to their

inclusion in the updated annual procurement plan.

67

53. Operating Costs: The GoK will finance operating costs from its own

contribution to the project and will follow its national procurement and administrative

procedures for acquiring goods and services required for the implementation of the

project. The GoK will also pay for costs associated with any resettlement, land

acquisition, compensation and relocation of services.

54. The procurement procedures and SBDs to be used for each procurement method,

as well as model contracts for works and goods procured, are presented in the

procurement plan.

B. Assessment of the agency’s capacity to implement procurement

55. Procurement activities will be carried out by five implementing agencies: two

Government ministries and three state-owned institutions, namely MoR, MoT, KeNHA,

KURA, and KRC. KeNHA, KURA and KRC are state-owned institutions. Each of the

five implementing agencies has constituted a PIT which reports to the CEO of their

respective agencies. A PIT staff includes among other professional staff a PIT leader and

a procurement officer. With the exception of KURA, the other four agencies are

implementing three ongoing IDA-funded projects which are: the NCTIP, East Africa

Trade and Transport Facilitation Project (EATTFP), and KTSSP through the same PITs.

Because KURA is an offshoot of MoR, most of its technical staff and especially members

of its PIT of the proposed project are former MoR staff that have gained a vast experience

in project implementation under the three ongoing projects.

56. An assessment of the capacity of the implementing agencies to implement

procurement actions for the project was carried out by the Procurement Specialist on the

team. The assessment reviewed the organizational structure for implementing the project

and the interaction between the project‘s staff responsible for procurement duties and

management of their respective agencies.

57. Being cognizant of the experience gained by the implementing agencies from the

ongoing projects, and deployment of the same PITs of the ongoing projects for the

implementation of the proposed project, the overall project risk for procurement is

―moderate‖.

58. The key issues and risks concerning procurement for implementation of the

project have been identified and require enhancement include systemic weaknesses in the

areas of: (a) accountability of procurement decisions; (b) procurement record keeping; (c)

capacity of procurement staff; (d) procurement planning; (e) procurement process

administration including award of contracts; (f) contract management; and (g)

procurement oversight. The corrective measures which have been agreed upon are:

(a) Prepare a Procurement Guide that: (i) defines the roles and responsibilities of all

offices that will be involved in any aspect of procurement implementation of the

project; (ii) set out the sequence and timeframe for the completion of procurement

decisions of all individual players as well as for coordination of the contribution

68

of the players in procurement implementation; and (iii) establish service standards

for processing of payments to contractors and suppliers.

(b) Develop and agree with the Bank by September 30, 2012 a procurement training

plan for the PIT.

(c) Align the preparation processes of procurement plans, work plans and budget

estimates.

(d) Establish separate effective tracking systems of: (i) Procurement plan

implementation and (ii) processing of payments to contractors and suppliers.

(e) In consultation with the Public Procurement and Oversight Authority (PPOA) and

KENAO, ensure that procurement audits by PPOA and financial audits by

KENAO are conducted jointly.

59. Kenya has a public procurement law, the Public Procurement and Disposal Act of

2005 (PPDA) that governs purchase of works, goods and services using public resources

by the central Government entities, local authorities, state corporations, education

institutions, and other Government institutions. Under the PPDA, the PPOA has been

established in addition to the Procurement department in the MoF. The PPDA sets out

the rules and procedures of public procurement and provides a mechanism for

enforcement of the law. Some provisions of PPDA are not fully consistent with the

World Bank procurement guidelines and Consultants Guidelines, and therefore these may

not be applied for the implementation of this project without modification. These

provisions and their respective modifications are:

(a) PPDA 55(2): instead, the tender submission date shall be set so as to allow a

period of at least 30 days from the later of: (i) the date of advertisement, and (ii)

the date of availability of the tender documents.

(b) PPDA 4(2)(c): instead, Recipient‘s Government-owned enterprises shall be

allowed to participate in the tendering only if they can establish that they are

legally and financially autonomous, operate under commercial law and are an

independent agency of the recipient‘s Government.

(c) The Recipient shall use, or cause to be used, bidding documents and tender

documents (containing, inter alia, draft contracts and conditions of contracts,

including provisions on fraud and corruption, audit and publication of award) in

form and substance satisfactory to the Association.

(d) PPDA 61(4): instead, extension of tender validity shall be allowed once only, and

for not more than thirty (30) days, unless otherwise previously agreed in writing

by the Association.

(e) PPDA 66 (3)(b): instead, evaluation of tenders shall be based on quantifiable

criteria expressed in monetary terms as defined in the tender documents. It shall

not be based on a merit points system.

(f) PPDA 39: instead, no domestic preference shall be used in the evaluation of

tenders. Therefore, as a result of the non application of PPDA 66(3)(b) and 39,

contracts shall be awarded to qualified tenderers having submitted the lowest

evaluated substantially responsive tender.

(g) PPDA 67: instead, notification of contract award shall constitute formation of the

contract. No negotiation shall be carried out prior to contract award.

69

(h) PPDA 91: instead, shopping procedure will apply for each low value contracts, in

lieu of Direct Procurement, except as otherwise previously agreed in writing by

the Association.

(i) Regulations 47: instead, the two envelope bid opening procedure shall not apply.

C. Procurement Plan

60. The implementing agencies prepared, at appraisal, 18-months procurement plans

for project implementation which provide the basis for the procurement methods. The

plans were consolidated and discussed and agreed between the Borrower and the Project

Team and will be posted in the Bank‘s external website. The procurement plan will be

updated in agreement with the project team annually or as required to reflect the actual

project implementation needs and improvements in institutional capacity. The review by

World Bank of procurement decisions will be provided in the procurement plan for those

contracts that shall be subject to Prior Review.

D. Frequency of Procurement Supervision

61. Based on the capacity assessment of the implementing agencies, it was

recommended that two supervision missions would carry out post-review of the

procurement actions, as most of the contracts are large and will be subject to the Bank‘s

prior review.

70

KENYA NATIONAL URBAN TRANSPORT IMPROVEMENT (NUTRIP)

PROCUREMENT PLAN (THE FIRST 18 MONTHS)

I. GENERAL

1. Project information:

Country: Kenya

Borrower: Republic of Kenya

Project Name: National Urban Transport Improvement Project (NUTRIP)

Project ID: P126321

2. Bank‘s approval Date of the procurement Plan: May 23, 2012

3. Date of General Procurement Notice: May 3, 2012

4. Period covered by this procurement plan: Fiscal Year 2012-2014 (18 months)

II. WORKS

1. Prior Review Thresholds

No Procurement Method

Threshold for

Procurement Method

(US$)

Prior Review

1. ICB 5,000,000 All

2 LIB All values All

3. NCB < 5,000,000 None

4. Direct Contracting All values All

5. Shopping <100,000 None

Note:

ICB = International Competitive Bidding

LIB = Limited International Bidding

NCB = National Competitive Bidding

2. Post-qualification of bidders: Post-qualification will be carried out for all civil

works contracts unless specified otherwise.

3. Framework Agreements: The use of Framework Agreements will apply. The

type and cost of works will be defined and agreed between the Borrower and IDA

prior to their inclusion in the procurement plan.

71

4. Procurement Packages with Methods and Time Schedules

Ref.

No.

Contract

(Description)

Proc.

Method

Pre- or

Post

qualif.

Domestic

Preferen

ce

(yes/no)

Review

by Bank

(Prior /

Post)

Expected

Bid-

Opening

Date

Comments

COMPONENT A (SUPPORT TO KeNHA TO UPGRADE URBAN ROAD INFRASTRUCTURE

ALONG THE NORTHERN CORRIDOR: IMPLEMENTED BY KeNHA)

1.

Capacity enhancement of

A104 from Southern

Bypass- James Gichuru

road (12 km)

ICB Post No Prior Jan 2013

Bidding

documents

expected to

be ready in

Nov 2012.

2.

Capacity enhancement

from JKIA-Southern

Bypass road (15 km)

ICB Post No Prior April

2013

Bidding

documents

expected to

be ready in

Feb 2013.

3.

Capacity enhancement of

A104 from James Gichuru

road Junction- Rironi

(25 km)

ICB Post No Prior April

2013

Bidding

documents

expected to

be ready in

Feb 2013.

4.

Kisumu Northern Bypass

(9 km)

ICB Post No Prior Jan 2013

Bidding

documents

expected to

be ready in

Nov 2012.

SUB-COMPONENT B1 (SUPPORT TO KURA: IMPLEMENTED BY KURA)

5.

Construction of Meru

Bypass roads (21 km) ICB

(1) Post No Prior Oct 2012

Bidding

documents

expected to

be ready in

June 2012.

III. GOODS AND NON-CONSULTING SERVICES.

1. Prior Review Thresholds:

No Procurement Method Threshold for Procurement

Method (US$) Prior Review

1. ICB 500,000 All

2 LIB All values All

3. NCB < 500,000 >70,000

None

4. Shopping <70,000 None 5. Direct Contracting All values All 6. Framework Agreements All values All

72

Note:

ICB = International Competitive Bidding

LIB = Limited Competitive Bidding

NCB = National Competitive Bidding

2. Framework Agreements: The use of Framework Agreements will apply. The

type and cost of goods will be defined and agreed between the Borrower and IDA prior to

their inclusion in the procurement plan.

Ref.

No.

Contract

(Description)

Proc.

Method

Pre or

Post

qualific

ation

Domestic

Preferen

ce

(yes/no)

Review

by Bank

(Prior /

Post)

Expected

Bid-

Opening

Date

Comments

SUB-COMPONENT B1 (SUPPORT TO KURA: IMPLEMENTED BY KURA)

1.

Traffic signaling

equipment

ICB Post No Prior Oct 2012

Bidding

documents

expected to

be ready in

Aug 2012.

2.

ICT software and

hardware

ICB Post No Prior Jan 2013

Bidding

documents

expected to

be ready in

Nov 2012.

SUB-COMPONENT B2 (SUPPORT TO KRC: IMPLEMENTED BY KRC)

3. ICT software and

hardware NCB Post No Prior Dec 2013

Bidding

documents

expected to

be ready in

June 2013.

4.

Track recording car

LIB* Post No Prior Dec 2013

Bidding

documents

expected to

be ready in

June 2013.

SUB-COMPONENT C1 (SUPPORT TO MoT: IMPLEMENTED BY MoT)

5.

ICT software and

hardware for NMTA and

RSA

ICB Post No Prior March

2014

Bidding

documents

expected to

be ready in

Dec 2013.

6.

Supply and installation of

3-D Air Traffic Control

simulators for East Africa

School of Aviation

(EASA) equipment

ICB Post No Prior Feb 2013

Bidding

documents

expected to

be ready in

Nov 2012.

73

Ref.

No.

Contract

(Description)

Proc.

Method

Pre or

Post

qualific

ation

Domestic

Preferen

ce

(yes/no)

Review

by Bank

(Prior /

Post)

Expected

Bid-

Opening

Date

Comments

7.

Supply for assorted

equipment for EASA

Library

NCB Post No Prior Oct 2013

Bidding

documents

expected to

be ready in

Aug 2013.

SUB-COMPONENT C2 (SUPPORT TO MoR: IMPLEMENTED BY MoR)

8.

ICT software and

hardware for National

Construction Authority

and Engineers Registration

Board.

ICB Post No Prior Nov

2012

Bidding

documents

expected to

be ready in

Sept 2012

* LIB will be used in respect of specialist software and other proprietary items for which there are only a few known

suppliers

III. SELECTION OF CONSULTANTS

1. Prior Review Threshold:

Selection Method

Threshold for

Proc. Method

(US$)

Prior Review

1. Quality and Cost Based Selection

(QCBS) (Firms) No Limit ≥ 200,000

2. Least Cost Selection (LCS) No Limit ≥ 200,000

3. Fixed Budget Selection (FBS) No Limit ≥ 200,000

4. Quality Based Selection (QBS) No Limit ≥ 200,000

5. Consultants qualification (CQS) ≤ 300,000 ≥ 200,000

6. Single Source (Firms) No Limit All

7. Single Source (Individual) No Limit All

Note :

QCBS = Quality and Cost Based Selection.

LCS = Least Cost Selection

CQS = Consultant Qualification Selection

FB = Fixed Budget Selection

SSS = Single Source Selection

IC = Individual Consultant

1. Shortlist comprising entirely of national consultants: Shortlist of

consultants for services, estimated to cost less than US$200,000 equivalent

per contract, may comprise entirely of national consultants in accordance with

the provisions of paragraph 2.7 of the Consultant Guidelines.

74

2. Accredited universities in Kenya: One of the accredited universities will be

selected to provide monitoring and evaluation (M&E) services.

3. Public Private Partnerships: Procurement under PPPs will apply for

activities related to the provision of transport infrastructure and services. The

cost for such services will be defined and agreed between the Borrower and

IDA prior to their inclusion in the updated annual procurement plan.

4. Indefinite Delivery Contracts or Price Agreements: The services for which

contracts will apply will be defined and agreed between the Borrower and

IDA prior to their inclusion in the updated annual Procurement Plan.

5. Procurement Packages with Methods and Time Schedules

Ref

No.

Description of Assignment

Selection

Method

Review

by Bank

(Prior /

Post)

Expected

Proposals

Submission

Date

Comments

COMPONENT A (SUPPORT TO KeNHA TO UPGRADE URBAN ROAD INFRASTRUCTURE

ALONG THE NORTHERN CORRIDOR: IMPLEMENTED BY KeNHA)

1.

Consultant Services for Design Review,

Works Supervision;

Southern Bypass- James Gichuru road

Junction

QCBS Prior Feb 2013

RFPs to be

issued in Dec

2012

2.

Consultant Services for Design Review,

Works Supervision;

JKIA-Southern Bypass

QCBS Prior April 2013

RFPs to be

issued in Feb

2013

3.

Consultant Services for Design Review,

Works Supervision;

James Gichuru road Junction -Rironi

QCBS Prior April 2013

RFPs to be

issued in Feb

2013

4. Feasibility and design studies for four

major towns‘ arterial connections QCBS Prior Dec 2012

RFPs to be

issued in Nov

2012

5. Kisumu Northern Bypass QCBS Prior Dec 2012

RFPs to be

issued in Nov

2012

6. Detailed design of Mombasa - Malaba QCBS Prior July 2012 TOR under

preparation

SUB-COMPONENT B1 (KURA: IMPLEMENTED BY KURA)

7.

Consultant Services for Feasibility

detailed Engineering design and studies

(including traffic management studies for

Nairobi CBD), BRT Operations Plan for

a Bus Rapid Transit System Route for

Nairobi starting at Haile Selasie Avenue

through Ring Road Pumwani, Ring Road

QCBS Prior Sept 2012

RFPs to be

issued in August

2012

75

Ref

No.

Description of Assignment

Selection

Method

Review

by Bank

(Prior /

Post)

Expected

Proposals

Submission

Date

Comments

Ngara, Juja Road, Komarock Road and

ends at the junction of Kangundo Road

and Komarock Road. Also included is

part of Outering Road from Kangundo

Road Junction to Juja Road Junction (25

km).

8. Consultancy services for works

supervision for Meru bypass (21km) QCBS Prior Aug 2012

RFPs to be

issued in August

2012

9.

Consultancy services for Urban

Transport Master Plan Study of

Mombasa municipality. The project

study area is in Mombasa and comprises

the Island, Mainland North, South and

West.

QCBS Prior Sept 2012

RFPs to be

issued in Aug.

2012

SUB-COMPONENT B2 (KRC: IMPLEMENTED BY KRC)

11.

Feasibility and detailed engineering

designs and studies

(a) Existing commuter rail lines routes in

Nairobi and preparation of bidding

documents for both works and commuter

rail operator.

(i) Nairobi to Limuru, 48.2 km line

(ii) Makadara to Thika, 56 km line

(iii) Makadara to Embakasi village, 8

km line

(iv) Embakasi to Lukenya, 30 km line

(b) Metro and light rail in Nairobi

QCBS Prior March

2013

RFPs to be

issued in Dec.

2012

12.

Feasibility and detailed engineering

designs and studies of Nairobi Freight

corridor bypass from Embakasi station to

Dagoretti station 35 km line

QCBS Prior March

2013

RFPs to be

issued in Dec

2012

13.

Feasibility and detailed engineering

designs and studies for:

(a) proposed commuter rail line routes in

Mombasa

(i) Mombasa station to Moi

international airport; airport line (5

km)

(ii) Mombasa to Mtwapa line (20 km)

(iii) Mombasa to Diani line (35 km)

QCBS Prior July 2013

RFPs to be

issued in March

2013

76

Ref

No.

Description of Assignment

Selection

Method

Review

by Bank

(Prior /

Post)

Expected

Proposals

Submission

Date

Comments

(iv) Mombasa to Mariakani line (40

km)

(b) Metro and light rail system

14.

Feasibility and detailed engineering

designs and studies for proposed

commuter rail line routes in Kisumu

QCBS July 2013 RFPs to be issued

in March 2013

15.

Technical assistance and advisory

services related to the selection of private

sector operators and associated service –

Nairobi, Mombasa and Kisumu

Commuter rail

QCBS Prior July 2013

RFPs to be

issued in March

2013

SUB-COMPONENT C1 (MoT: IMPLEMENTED BY MoT)

16. Consulting services for the development

of urban transport strategy QCBS Prior Dec 2012

RFPs to be

issued in Oct

2012

17. Development of a strategy on PPPs in

financing airport infrastructure QCBS Prior Dec 2012

RFPs to be issued

in Oct 2012

SUB-COMPONENT C2 (MoR: IMPLEMENTED BY MoR)

18. Monitoring & Evaluation consultant QCBS Prior Aug 2012 RFPs to be issued

in August 2012

62. Training: Each of the implementing agencies will prepare its annual training

program as part of the project annual work plan before submission to the Bank for

concurrence. The program will identify, inter alia: (a) the training envisaged; (b) the

personnel to be trained; (c) the selection methods of institutions or individual conducting

such training; (d) the institutions conducting the training, if already selected; (e) the

duration of the proposed training; and (f) the cost estimate of the training. Report by the

trainee upon completion of training would be mandatory.

B. Environmental and Social (including safeguards)

63. The project‘s anticipated social and environmental impacts are provided in detail

in Annex 7.

64. The Annex also includes, among others, the Bank‘s Operational Policy triggered,

the description of project location, and the resettlement and compensation anticipated

under the project. Details on the total project affected persons, stakeholder consultations,

potential environmental impacts, proposed mitigation measures and the social impact of

the Resettlement Action Plans, Borrower‘s capacity to implement safeguards and an

update on disclosure of safeguard documents are also provided.

77

C. Monitoring & Evaluation (M&E)

65. Results will be monitored by a team of experts from one of the accredited

universities in Kenya. The selected university will sign a contract with MoR and will

work in close collaboration with KeNHA, KURA, KRC and MoT. The indicators and

results for monitoring including the reduction of travel time and transport cost on the

proposed road corridors are provided in the Results Framework. The baseline

information will be available before the beginning of construction, in case those

indicators for which the information is not available. The consultants will provide both

semi and annual reports.

66. The works contracts will be supervised by independent consultants selected

competitively. The consultants will oversee the day-to-day progress of works on the site

and to certify each payment invoice, including compliance by the contractor with all

technical specifications, environmental and social mitigation plans, and contractual

provisions.

67. Communications Strategy: To supplement the work of the M&E consultant

(accredited university in Kenya), the communications specialist on the task team, based at

the Country office, in collaboration with the relevant units in the project implementing

entities have prepared a communications strategy for the project. The key aspects of the

strategy include:

(a) Communication Needs Assessment

The core communications team comprising of World Bank and the implementing

agencies will conduct a communications needs assessment among stakeholders,

beneficiaries, agencies and partners of NUTRIP. This will be necessary to receive

critical feedback for developing a strategic communication program. The assessment

will be carried out during the period June – August 2012.

(b) Strategy Plan and Design

The Communication Strategy will focus on the project‘s deliverables that reflect the

strategic pillar of creating efficient infrastructure services that will increase Kenya‘s

regional competitiveness, achieve high and equitable growth, and create quality jobs

especially for the fast growing urban population. These expectations are aligned

specifically with Kenya‘s transport sector objectives, and more broadly with Kenya‘s

Vision 2030, the Bank‘s Country Partnership Strategy for Kenya and the Bank‘s

Africa Strategy.

(c) Institutional Implementation Arrangements

The Coordinator for the project in MoR will oversee the implementation of the

Communications Strategy during the life of the project and beyond.

(d) Monitoring and Evaluation

The Coordinator for the project will regularly monitor progress on the

implementation and effectiveness of the strategy, and work with the inter-agency

78

oversight committee in addressing critical issues identified in the course of the project

implementation. The committee will regularly brief all the agencies involved in the

project.

(e) Budget

This strategy will initially be implemented over a three year period (2012-2015) at an

estimated cost of US$75,000 and at Mid-Term Review of the project, an assessment

on the progress will be carried out to determine if additional funds will be needed to

scale up the strategy.

79

Annex 4: Operational Risk Assessment Framework (ORAF)

KENYA: National Urban Transport Improvement Project (NUTRIP)

Project Stakeholder Risks Rating High

Description: Private bus and matatus (mini-buses) operators operated in an environment with minimal regulation to date, to the extent that at present there is indiscipline and disregard for safety and environment. These operators are likely to resist introduction of stringent enforcement of the traffic rules; phasing-out of matatus; introduction of large capacity buses; and corridor exclusivity that will be required for successful operation of a sustainable mass transit system. CCN which currently manages traffic and parking in the city, stands to lose that authority once this responsibility is ceded to Nairobi Metropolitan Transport Authority (NMTA), and may resist this change.

Risk Management: Adequate measures will be included in the project to involve the matatu owners in participating through franchises to run larger buses on BRT routes and focusing mini-buses on feeder routes, learning from the experience of similar efforts in Dar-es-salaam, Tanzania, Johannesburg , South Africa, Lagos and Nigeria, among others. Ministry of Transport (MoT) is building support for NMTA through consultations, such that already the Cabinet has approved the Integrated National Transport Policy (INTP), now before Parliament for approval, which calls for the creation of NMTA. The new constitution also offers opportunities as it introduces devolved governance structures that will support the establishment of NMTA. Project stakeholders, in urban areas and other users of the identified transport corridors want them improved given the high economic, environmental and social cost of traffic congestion and the likely benefits to be accrued following successful completion of the project. Resp: Government and Bank

Stage: All Due Date: Continuous

Status: Ongoing

Implementing Agency Risks (including fiduciary) Capacity Rating: Substantial

Description: The implementation of the new constitution and agreed reforms may change the institutional set up and implementation of the project. Some of the implementing agencies could be merged or change roles or new entities introduced creating some uncertainties in the short and medium term. Kenya Urban Roads Authority (KURA) has recently been established (2007) and has not implemented a Bank funded project. This may pose moderate risk related to implementation capacity.

Risk Management: In case drastic changes in the institutional arrangements occur much earlier than Mid Term Review, an early restructuring will be warranted, though, going by past experience - when Kenya National Highways Authority (KeNHA) was established after reforming the Ministry of Roads (MoR) - the changes resulting from the new constitution are likely to be implemented over an extended period with sound arrangements for the transition. In addition the PITs involved in MoT, MoR, KeNHA, KURA, the key implementation agencies, are likely to remain more or less intact and move into any new structure, should there be some consolidation of ministries. The proposed implementing agencies KeNHA, MoR and MoT, with few exceptions, Kenya Railways Corporation (KRC) and KURA are well staffed and experienced in implementing donor financed projects requiring only some further capacity building effort in specialized

80

areas. Internationally qualified consultants will be engaged to carry out detailed design and supervision of works, and where necessary to enhance the capacity of the implementing agencies. Resp: KeNHA, KURA, KRC, MoR, MoT and Bank’s Task Team.

Stage: All Due Date: Continuous

Status: Ongoing

Governance Rating: Substantial Description: Governance in the transport sector has been challenging. Risks in the sector include unclear institutional arrangements; collusion and other forms of bid rigging; fraud during implementation; weak oversight and regulatory capacity for urban transport (details in the agreed Governance Action Plan (GAP) being implemented under NCTIP). Road authorities are currently developing their internal monitoring, control and compliance systems. The current approval procedures still involve the MoR and MoT which poses a risk of delays, duplicity of accountability and temptation to revert to old bureaucratic ways of conducting business unless monitored closely.

Risk Management: The results of implementing the GAP measures in the road sub-sector seem to contribute to improving the business environment, increasing competition and GoK obtaining comparatively more bids than before (from two-three bids to over nine), with some prices below the Engineer’s estimates. Therefore, the relevant aspects of the GAP will be adopted, in particular unit costs will be rigorously investigated and estimated; stringent due diligence of bidders, consultants and suppliers; bids and qualifications will be subjected to much higher levels of scrutiny; and use of post qualification for large works contracts; and the “Engineer” will be the works supervision consultant and not the “Employer”. The implementation of the GAP has raised the necessary attention of the importance of governance and integrity issues in the transport sector. Stringent due diligence measures during procurement will be undertaken including the use of post-qualification criteria, independent review by a procurement specialist of large works contracts and intensified Bank supervision. Procurement and financial management systems continue to be strengthened through ongoing Bank financed projects in Kenya. The probability is declining due to execution of sector policy, institutional reforms to enhance transparency, accountability and sector performance. This has contributed to greater public scrutiny and recent results from a number of contracts illustrate increased competition and competitive prices offered by bidders.

Resp: Bank’s project team

Stage: All stages Due Date: Continuous

Status: Ongoing

81

Project Risks Design Rating: Moderate

Description: Inadequate data and information on urban transport systems and multiplicity of agencies involved in urban public transport lead to less than optimum designs and delays in decision-making.

Risk Management: Technical assistance will be used to facilitate generation of the required data, where necessary. Creation of the NMTA will reduce the number of decision-making points and enhance stakeholder coordination. The proposed project has diverse implementing agencies with different levels of experience and capacities. Standard practice of using internationally qualified consultants to do feasibility studies and detailed designs of major project components and use of familiar technology in civil works makes the likelihood of design failure very low. Resp: Government and Bank

Stage: All Due Date: Continuous

Status: Ongoing

Social & Environmental Rating: Moderate Description: Project Affected Persons not satisfied with compensation arrangements impede site handover and construction schedules, thereby delaying project benefits.

Risk Management: Resettlement Action Plans (RAP) with adequate provisions on grievance redress mechanism will be prepared consistent with the Bank’s guidelines. Implementation will also draw on recent country and Bank experience in applying OP4.12 Involuntary Resettlement in Kenya drawing from recent urban and transport projects, which worked well. The Environmental Impact Assessments (EIA) that have been carried out for some of the road sections show there are no significant and irreversible impacts of major civil works largely because they are rehabilitation or reconstruction of existing assets and confined largely to the existing right of way. Resp: KeNHA, KURA and KRC

Stage: Implementation

Due Date: Continuous

Status: Ongoing

Program & Donor Rating: Moderate Description: The forthcoming general elections divert attention of project implementing agencies and key staff and priorities change when the new Government takes over. Insufficient coordination among development partners that are supporting activities in urban public transport initiatives in Kenya lead to duplication and conflicting directions on policy and institutional reform matters.

Risk Management: Infrastructure and decongesting major urban areas is the stated priority of both coalition partners in the Government of Kenya (GoK). The project is a high priority for the GoK. The GoK had shown commitment and offered part of the road sections for tolling with bi-partisan support in parliament. Through the existing donor coordination arrangements, the Bank will maintain a close dialogue throughout project preparation and implementation to ensure that development partner support is consistent with the Government’s vision. Resp: Government and Bank

Stage: All Due Date: Continuous

Status: Ongoing

82

Delivery Monitoring & Sustainability Rating: Moderate Description: Counterpart funds are not released in a timely manner and in adequate amounts. Monitoring and Evaluation (M&E) capacity is still weak leading to delays in taking corrective actions in a timely manner.

Risk Management: Keep counterpart funding requirement to a reasonable level for all activities. Budgetary allocation and releases would be closely monitored and reported in the quarterly Financial Monitoring Reports. The proposed implementing agencies are reasonably experienced in managing complex projects and would be further strengthened under the project. The project will support the strengthening of M&E functions in the implementing agencies and will be complemented by an M&E consultant (one of the accredited universities). Resp: Government and Bank

Stage: All Due Date: Continuous

Status: Ongoing

Overall Risk Rating Implementation Risk Rating: High

Comments: Risks include the uncertainties regarding the possible changes in the institutional set up in the transport sector and also implementation arrangements arising from the execution and aligning them to the newly adopted Constitution ; the forthcoming general elections and the transition to a new Government thereafter could slow down implementation; and likely resistance from transporters and bus (or mini-bus) operators to introduction of any new regulatory framework for public transport, phasing out matatus and CCN resistance to cede its current responsibility of traffic management and parking management to the proposed NMTA.

83

Annex 5: Implementation Support Plan

KENYA: National Urban Transport Improvement Project (NUTRIP)

Focus of Supervision

1. Implementation support will focus on actions that are critical for project success.

In particular, emphasis will be placed on quality of works; technical compliance; timely

payment to contractors, suppliers and consultants; timely award of contracts; and

adherence to implementation schedules. Continuous supervision will be encouraged

given that most of the Bank‘s task team members are based in the Kenya country office.

This will therefore enable continuous and cost-effective supervision of the project.

2. Upstream reporting, auditing and accountability, and technical compliance

measures to ensure early detection and remedy of problems through ongoing oversight of

the project implementation activities will be emphasized. For civil works contracts, there

will be speedy review of project implementation progress reports prepared by the

engineering supervision firms that will perform the day to day independent certification

of the quality of work, payment certificates and compliance with contract terms.

3. In case of procurement documents subject to prior review, these will be carefully

reviewed by both the technical expert(s) and the Senior Procurement Specialist on the

team to ensure that they comply with the project‘s technical requirements and the Bank‘s

procurement and consultants guidelines.

4. The Financial Management Specialist will carry out periodic reviews of the

project‘s five implementing agencies‘ financial management systems and controls and

where necessary will conduct reviews of statements of expenditure and monitor the

availability and adequacy of the counterpart funds as reported in the quarterly Financial

Monitoring Reports/Interim Financial Reports. These reviews will be utilized for

improving the implementing agencies‘ systems and performance in these areas.

5. Before each supervision mission, the project implementing agencies will submit

to the Bank, a detailed consolidated project implementation progress report which will

provide the status of the project activities and identify all implementation issues facing

the project. These reports combined with site visits will be the basis for reaching

agreement with the client on the activities for the upcoming period and resolution of

implementation issues facing the project.

Mode of Supervision

6. The Task Team will undertake supervision as follows:

(a) Where necessary, provide technical, procurement and financial management

support to the project‘s implementing agencies from the country based team;

(b) Quarterly supervision reviews of the project, including visits to the project

sites. The review teams will comprise an engineer, procurement specialist,

84

financial management specialist, communications specialist, environmental

specialist, transport specialist Bus Rapid Transit (BRT), railways specialist,

social development specialist and the task team leader;

(c) Annual fully fledged supervision missions involving all the key task team

members;

(d) The communications specialist on the team will prepare a brief on the

implementation status of the project and post it on the external country office

website semi-annually; and

(e) Similarly, the communications specialist on the team will assist the Kenya

National Highways Authority, Kenya Urban Roads Authority, Kenya

Railways Corporations, Ministry of Transport and Ministry of Roads to

prepare brief implementation progress reports of the project, and post them on

their websites.

Monitoring

7. On the side of the Government of Kenya (GoK), the capacity of the

implementation agencies is augmented by technical assistance and consultant services,

particularly in the areas of designs, supervision, project coordination, monitoring and

evaluation, and user surveys. The annual Monitoring and Evaluation (M&E) reports

produced by the M&E consultants (an accredited university in Kenya) will be discussed

at workshops with stakeholders, both during their preparation and on finalization. This

will be particularly important for engaging the matatu and private bus operators regarding

the proposed reforms in the urban public transport systems.

Budget

8. The above activities would require both the Bank and the GoK‘s management to

allocate adequate resources for their staff to be able to carry out comprehensive project

supervision. Inadequate resources will hamper the implementation of the proposed

intensive follow up and monitoring required for mitigating the potential risks identified.

(a) What would be the main focus in terms of support during implementation:

Time Focus Skills Needed Resource Estimate Partner Role

First

twelve

months

Technical review

of bidding

documents,

proposals and bid

and technical

evaluation reports

and review of

technical reports

(feasibility and

design study

reports)

Civil engineering,

urban transport,

institutional, railways,

PPP, financial

management,

procurement, an

independent

technical/procurement

specialist and

communication

45 staff-weeks of Bank

staff plus 26 staff-

weeks of Short Term

Consultant (STC).

Approx.US$250,000

No partner

involved but the

information will

be share by other

development

involved in urban

transport in

Kenya

85

12-48

months

Technical review

of bidding

documents,

proposals and

supervision of

works, and

technical reports

Civil engineering,

urban transport,

financial management,

M&E, social

development, railways,

procurement and

communication

Annually, 30 staff-

weeks of Bank staff

plus 18 staff-weeks of

STC.

Approx. US$190,000

per annum

Other

(b) Skills mix required.

Skills Needed Number of Staff

Weeks/annum

Number of

Trips/annum

Comments

Team Leadership 26 4 site visits (local) Country Office (CO) staff

Civil engineering 10 4 site visits (local) STC [International]

Urban transport 8 2 site visits STC (International)

Procurement 5 2 site visits CO

Social Development 2 2 site visits CO staff

M&E 2 2 site visits STC (local)

Financial management 5 2 site visits CO staff

Environmental 3 2 site visits HQs staff

Railways 6 2 site visits STC (International)

Communications 2 4 site visits CO staff

(c) Partners

Name Institution/Country Role

JICA AfDB, French

Development Agency (AFD)

and European Union (EU)

Japan, France, AfDB,

and EU

Other development partners are interested in

supporting urban transport activities in Kenya under

parallel financing. There is therefore need for

appropriate coordination and harmonization of

assistance to avoid duplication.

86

Annex 6: Economic and Financial Analysis

KENYA: National Urban Transport Improvement Project (NUTRIP)

I. Economic and Financial Analysis

Road Sections

Rehabilitation of the Jomo Kenyatta International Airport (JKIA) –Westlands-

Rironi; Kisumu Bypass and Meru Bypasses

1. The economic analysis was carried out on the above road sections. These road

sections have low capacity and are in a poor condition and are scheduled for

reconstruction/ rehabilitation/upgrading under this project. Table 1 shows the existing

situation and pavement structure and road conditions for the respective road sections.

Table 1: Existing Pavement Structure and Road Conditions Package Name Package

Constituents

Road

Length

Kilometer

(Km)

Current Condition

Package 1:

JKIA Junction

to Southern

Bypass Junction

and associated

roads

Mombasa road

from JKIA

Interchange to

Nairobi Southern

Bypass junction

(A104)

7.3 Pavement geometric cross section poor (no paved

shoulders), access to roadside buildings unsafe

Pavement structural strength inadequate for long

term usage

Facilities for non motorized traffic crossing highway

non-existent

Airport South

Road (C59)

2.8 Pavement structure in advanced state of

deterioration due to exhaustion of service life

Pavement geometric cross section inadequate for

traffic

Facilities for non motorized traffic non existent

Access road from

Mombasa Road

to JKIA

Passenger

Terminal (B10)

3.6 Existing pavement in need of periodic maintenance

intervention

Road service levels low during peak traffic periods

due to congestion

Facilities for non motorized traffic poor

Access road from

Mombasa Road

to Nairobi Inland

Container Depot

2.0 Existing access lanes in poor condition and layout

poses hazard

Package 2:

Southern

Bypass junction

to James

Gichuru Road

Mombasa road

from Nairobi

Southern Bypass

junction to

Langata Road

3.0 Pavement geometric cross section poor (no paved

shoulders)

Pavement structural strength inadequate for long

term usage

Facilities for non motorized traffic crossing highway

inadequate

Mombasa

Road/Uhuru

Highway from

Langata Road

Roundabout to

3.8 For traffic load, severe congestion

Pavement geometric cross section poor in relation to

function

Pavement structural strength inadequate for long

term usage

87

Package Name Package

Constituents

Road

Length

Kilometer

(Km)

Current Condition

Museum Hill

interchange Facilities for non motorized traffic crossing highway

inadequate

Chiromo Road

from Museum

Hill Interchange

to Westlands

Roundabout

1.6 Pavement geometric cross section poor in relation to

function

Pavement structure in advanced state of

deterioration due to exhaustion of service life

Facilities for non motorized traffic crossing highway

inadequate

Waiyaki Way

from Westlands

Roundabout to

James Gichuru

Road

3.1 Pavement structure in advanced state of

deterioration due to exhaustion of service life

Facilities for non motorized traffic crossing highway

inadequate

Package 3:

James Gichuru

Road to Rironi

Waiyaki Way

from James

Gichuru Road to

Southern Bypass

junction at Gitaru

13.0

Pavement structure in advanced state of

deterioration due to exhaustion of service life

Facilities for non motorized traffic crossing highway

inadequate

A104 from

Southern Bypass

junction at Gitaru

to Rironi

12.2

Pavement structure in advanced state of

deterioration due to exhaustion of service life

Facilities for non motorized traffic crossing highway

inadequate

Package 4:

Construction of

Kisumu

Northern

Bypass

Kisumu Northern

Bypass

9.0 Missing bypass for Kisumu City

Package 5:

Meru Bypasses

Western 11 Pavement structure is earth

Eastern 10 Pavement structure is earth

2. The above road sections are currently unfit to serve their intended purposes and

are scheduled for reconstruction/rehabilitation under this project. Table 2 shows the

projected traffic pavement load classes for different sections of the project road in

accordance with the Kenya Road Design Guidelines.

88

Table 2: Traffic Load Classes Package Name Package Constituents Road

Length

(Km)

Pavement Traffic Load Classes

Package 1: JKIA

Junction to

Southern Bypass

Junction and

associated roads

JKIA Interchange to

Nairobi Southern

Bypass junction

(A104)

7.3 Class T O: over 60 million cumulative equivalent

standard axles in 15 years

Airport South Road

(C59)

2.8 Class T O: over 60 million cumulative equivalent

standard axles in 15 years Access road from

Mombasa Road to

JKIA Passenger

Terminal (B10)

3.6 Class T O: over 60 million cumulative equivalent

standard axles in 15 years

Access road from

Mombasa Road to

Nairobi Inland

Container Depot

2.0 Class T 2: 3- 10 million equivalent standard axles in 15

years

Package 2:

Southern Bypass

junction to James

Gichuru Road

Junction

Mombasa road from

Nairobi Southern

Bypass junction to

Langata Road

3.0 Class T O: over 60 million cumulative equivalent

standard axles in 15 years

Mombasa Road/Uhuru

Highway from Langata

Road Roundabout to

Museum Hill

interchange

3.8 Class T O: over 60 million cumulative equivalent

standard axles in 15 years

Chiromo Road from

Museum Hill

Interchange to

Westlands Roundabout

1.6 Class T O: over 60 million cumulative equivalent

standard axles in 15 years

Waiyaki Way from

Westlands Roundabout

to James Gichuru Road

3.1 Class T O: over 60 million cumulative equivalent

standard axles in 15 years

Package 3: James

Gichuru Road

Junction to Rironi

Waiyaki Way from

James Gichuru Road to

Southern Bypass

junction at Gitaru

13.0

Class T O: over 60 million cumulative equivalent

standard axles in 15 years

A104 from Southern

Bypass junction at

Gitaru to Rironi

12.2

Class T O: over 60 million cumulative equivalent

standard axles in 15 years

Package 4: Kisumu

Northern Bypass

Kisumu Northern

Bypass

9.0 Class T 2: 3- 10 million equivalent standard axles in 15

years Package 5: Meru

Bypasses

Western 11 Class T 3: 1-3 million equivalent standard axles in 15

years

Eastern 10 Class T 3: 1-3 million equivalent standard axles in 15

years

3. The proposed interventions for each of the road section comprises of the

following:

89

Table 3: Proposed Interventions Package Name Package Constituents Road

Length

(Km)

Proposed Interventions

Package 1:

JKIA Junction

to Southern

Bypass junction

and associated

roads

Mombasa road from JKIA

Interchange to Nairobi

Southern Bypass junction

(A104)

7.3 Provision of facilities for non motorized traffic

Increase in number of lanes from current six (2

carriageways x 3 lanes)

Strengthening of existing pavement

Reconfiguration of access to roadside buildings

and Inland Container Depot

Airport South Road (C59) 2.8 Reconstruction of existing pavement

Construction of second carriageway within

existing ROW

Grade separation where Airport South Road

meets access road to JKIA Passenger Terminal

Provision of facilities for non motorized traffic

Access road from Mombasa

Road to JKIA Passenger

Terminal (B10)

3.6 Periodic maintenance of existing pavement

Widening from four (2 lanes x 2 carriageways)

to six lanes (2 carriageways x 3 lanes)

Provision of facilities for non motorized traffic

Improvement of facilities for securing access to

the airport

Access road from Mombasa

Road to Nairobi Inland

Container Depot

2.0 Reconfiguration and reconstruction of access

road network leading from A104 to the Nairobi

Inland Container Depot

Package 2:

Southern

Bypass junction

to James

Gichuru Road

Junction

Mombasa road from

Nairobi Southern Bypass

junction to Langata Road

3.0 Provision of facilities for non motorized traffic

Increase in number of lanes from current six (2

carriageways x 3 lanes) without land acquisition

Strengthening of existing pavement

Grade separation for Popo Road junction

Reconfiguration of access to roadside buildings

Mombasa Road/Uhuru

Highway from Langata

Road Roundabout to

Museum Hill interchange

3.8 Construction of overpasses/viaduct with down

ramps and access ramps as necessary

Provision of facilities for non motorized traffic

Chiromo Road from

Museum Hill Interchange

to Westlands Roundabout

1.6 Provision of facilities for non motorized traffic

Increase in number of lanes from current six (2

carriageways x 3 lanes)

Reconstruction of existing pavement

Reconfiguration of access to roadside buildings

Overpass/viaduct at Westlands Roundabout

Waiyaki Way from

Westlands Roundabout to

James Gichuru Road

3.1 Provision of facilities for non motorized traffic

Increase in number of lanes from current six (2

carriageways x 3 lanes) where practical without

land acquisition

Reconstruction of existing pavement

Overpass/viaduct at Westlands Roundabout

Grade separation for James Gichuru junction

Reconfiguration of access to roadside buildings

90

Package Name Package Constituents Road

Length

(Km)

Proposed Interventions

Package 3:

James Gichuru

Road Junction

to Rironi

Waiyaki Way from James

Gichuru Road to Southern

Bypass junction at Gitaru

13.0

Provision of facilities for non motorized traffic

Increase in number of lanes from current six (2

carriageways x 3 lanes) where practical without

land acquisition

Reconstruction of existing pavement

Reconfiguration of access to roadside buildings

A104 from Southern Bypass

junction at Gitaru to Rironi

12.2

Provision of facilities for non motorized traffic

Reconstruction of existing pavement including

service roads

Package 4:

Kisumu

Northern

Bypass

Kisumu Northern Bypass 9.0 Construction of bypass

Construction of facilities for non motorized

traffic

Installation of grade separated interchange at

junction with B1

Package 5:

Meru Bypasses

Western and Eastern 21 Construction of a bypass.

4. Benefits expected to accrue from improvement activities include savings to be

made by motorists on vehicle operating costs, travel time costs and environmental costs.

Assumptions

5. Net benefits were computed using the Highway Development and Management

Model (HDM-4), which simulates highway cycle and vehicle operation condition and

costs for multiple road design and maintenance alternatives. The discount rate was set to

12 percent and the evaluation period to 20 years. Maintenance and reconstruction costs

were estimated in financial and economic terms (net of taxes and subsidies), economic

cost being on average 80 percent of financial costs. Vehicle fleet characteristics and

economic unit costs were defined for six vehicle classes reflecting 2010 costs which are

given in Table 4.

Table 4: Typical Unit Road User average Costs (US$/vehicle-km 2008) Roughness IRI Car Light

Truck

Medium

Truck

Heavy

Truck

Matatu Buses

2 0.313

0.351 0.583 1.083 0.318 0.635

4 0.310.

0.370

0.615

1.142

0.328

0.635

6 0.329

0.400 0.667 1.249 0.345 0.728

8 0.346 0.428 0.715 1.350 0.366 0.796

10 0.372 0.460 0.771 1.470 0.395 0.887

12 0.401 0.497 0.833 1.601 0.429 0.989

14 0.432

0.536 0.899 1.735 0.466 1.094

16 0.464 0.577 0.965 1.871 0.504 1.202

Typical Unit Road User Costs composition for Roughness =2.0 IRI (US$/vehicle-km)

91

RUC component Car Light

Truck

Medium

Truck

Heavy

Truck

Matatu Buses

Fuel and Oil 0.083

0.120 0.179 0.346 0.110 0.219

Tires 0.003 0.023 0.023 0.039 0.003 0.023

Parts and Labor 0.049 0.127 0.245 0.389 0.108 0.157

Depreciation and Interest 0.162

0.064 0.100 0.269 0.043 0.078

Crew time 0.000 0.017 0.035 0.038 0.017 0.094

Passenger and cargo time 0.017 0.000 0.000 0.002 0.037 0.139

Total 0.313 0.351 0.583 1.083 0.318 0.635

*Matatu =mini-bus with 14 passengers

Working Time

6. The value of working time for a car passenger was estimated considering an

average economic annual income of KES 180,000 per annum and 2000 working hours

per year (250 days at eight hours), and the value of working time for a public transport

passenger was estimated as twice the minimum wage rate. The value of non-working

time was considered as 25 percent of working time and the percentage of work journeys

to be 35 for cars and 25 for public transport. The value of cargo time has been estimated

on the basis of an average cargo value of US$400 per ton and cost of working capital of

15 percent. The following table presents typical road user costs of different roughness

levels, in US$ per vehicle-km, and typical road user costs composition for road roughness

equal to two International Roughness Index (newly constructed asphalt surface).

Road Maintenance Unit Costs

7. Table 5 shows the typical road maintenance costs which were considered in the

HDM-4 analysis.

Table 5: Maintenance Unit Costs Road Work Units Economic

Cost (USD)

5 cm overlay M2 20

Patching M2 20

Other Routine maintenance Cost per year 500

Road Sections

8. Five packages were formulated each of which comprises a number of

homogenous sections. Table 6 presents the road section lengths, the proposed road works

and estimated financial base investment costs (2008 prices for which an update is

underway).

92

Table 6: Road Section Characteristics Secti

on

No.

Road Section

Name

Section

Length

(km)

Work Description Base

Cost (M

US$)*

Base Unit

Cost (M

US$/ km)

Package 1: JKIA junction-Southern Bypass and associated roads

1. Mombasa road

from JKIA

Interchange to

Nairobi Southern

Bypass junction

(A104)

7.3 Provision of facilities for non motorized

traffic

Increase in number of lanes from current six

(2 carriageways x 3 lanes)

Strengthening of existing pavement

Reconfiguration of access to roadside

buildings and Inland Container Depot

37.18 2.4

2. Airport South Road

(C59)

2.8 Reconstruction of existing pavement

Construction of second carriageway without

land acquisition

Grade separation where Airport South Road

meeting access road to JKIA Passenger

Terminal

Provision of facilities for non motorized

traffic

3. Access road from

Mombasa Road to

JKIA Passenger

Terminal (B10)

3.6 Periodic maintenance of existing pavement

Widening from four (2 lanes x 2

carriageways) to six lanes (2 carriageways

x 3 lanes)

Provision of facilities for non motorized

traffic

Improvement of facilities for securing

access to the airport

4 Access road from

Mombasa Road to

Nairobi Inland

Container Depot

2.0 Reconfiguration and reconstruction of

access road network leading from A104 to

the Nairobi Inland Container Depot

Package 2: Southern Bypass Junction to James Gichuru Road Junction

1. Mombasa road

from Nairobi

Southern Bypass

junction to Langata

Road

3.0 Provision of facilities for non motorized

traffic

Increase in number of lanes from current six

(2 carriageways x 3 lanes) without land

acquisition

Strengthening of existing pavement

Grade separation for Popo Road junction

Reconfiguration of access to roadside

buildings

114.08 9.92

2. Mombasa

Road/Uhuru

Highway from

Langata Road

Roundabout to

Museum Hill

interchange

3.8 Construction of overpass/viaduct with

downramps as necessary

Provision of facilities for non motorized

traffic

3. Chiromo Road

from Museum Hill

Interchange to

Westlands

Roundabout

1.6 Provision of facilities for non motorized

traffic

Increase in number of lanes from current six

(2 carriageways x 3 lanes)

Reconstruction of existing pavement

93

Secti

on

No.

Road Section

Name

Section

Length

(km)

Work Description Base

Cost (M

US$)*

Base Unit

Cost (M

US$/ km)

Grade separation for Riverside Drive

junction

Reconfiguration of access to roadside

buildings

Overpass/viaduct at Westlands Roundabout

4. Waiyaki Way from

Westlands

Roundabout to

James Gichuru

Road

3.1 Provision of facilities for non motorized

traffic

Increase in number of lanes from current six

(2 carriageways x 3 lanes) where practical

without land acquisition

Reconstruction of existing pavement

Overpass/viaduct at Westlands Roundabout

Grade separation for James Gichuru

junction

Reconfiguration of access to roadside

buildings

Package 3: James Gichuru Road Junction to Rironi

1. Waiyaki Way from

James Gichuru

Junction to

Southern Bypass

junction at Gitaru

13.0 Provision of facilities for non motorized

traffic

Increase in number of lanes from current six

(2 carriageways x 3 lanes) where practical

without land acquisition

Reconstruction of existing pavement

Reconfiguration of access to roadside

buildings

54.08 2.14

2. A104 from

Southern Bypass

junction at Gitaru

to Rironi

12.2 Provision of facilities for non motorized

traffic

Reconstruction of existing pavement

including service roads

Package 4: Kisumu Northern Bypass

1. Kisumu Northern

Bypass

9.0 Construction of bypass

Construction of facilities for non motorized

traffic

Installation of grade separated interchange

at junction with B1

8.45 0.94

Package 5: Meru Bypasses

1. Meru Bypass

Western

11 Construction of a bypass to bitumen

standards.

25 0.51

2. Meru Bypass

Eastern

10 Construction of a bypass to bitumen

standards.

*Updating of costs underway

Traffic Data

9. Table 7 shows the projected traffic data for the project roads. The growth rates

used were derived from historical and economic data and are shown in Table 7.

94

Table 7: Projected Average Annual Daily Traffic (AADT) 2012 No. Road Section AADT (vpd)

Package 1: JKIA junction-Southern Bypass

1. JKIA – Southern Bypass (2005=48913)* 73547

2. JKIA Airport Access (2006=5480) 7773

3. Airport South Road (2006=8940) 12682

Package 2: Southern Bypass to James Gichuru Road Junction

1. Southern Bypass – Langata (2005=58471) 87919

2. Langata – Museum (2005=80890) 121629

3. Museum – Westlands (2005=53774) 80856

4. Westlands James Gichuru (2005=27163) 40843

Package 3: James Gichuru Road Junction to Rironi

1. James Gichuru – Naivasha Road (2005=27163) 40843

2. Naivasha Road – Rironi (2005=11463) 17236

Package 4: Kisumu Northern Bypass

1. A1/B1 to Mamboleo (2009=6963) 8293

2. Kisumu Northern Bypass (2009=1770) 2108

Package 5: Meru Bypasses

1. Western Bypass (2010=800) 899

2. Eastern Bypass (2010=766) 861

Note: Figures in parentheses refer to the AADT by road section and respective year the data was collected.

Table 8: Adopted Future Growth Rates Vehicle Category Growth Rate (%)

JKIA-Rironi Kisumu

Bypass

Meru

Bypasses

Saloon cars 6 6 6

Station wagons 6 6 6

Pick-up, Vans 6 6 6

Matatu, Minibus 6 6 6

Bus 5 5 5

Light Goods Vehicles 5 5 5

Medium Goods Vehicles 5 5 5

Heavy Goods Vehicles 5 5 5

Economic Evaluation

10. HDM-4 analysis was carried out for two different works. These include:

(a) ―Without‖ project case basically involving minor routine and periodic

maintenance such as grass clearance, pavement patching and crack sealing; and (b) ―With

base case scenario‖ basically involving widening and construction of a new pavement

and subsequent routine and periodic maintenance.

11. Sensitivity Analysis was undertaken for each of the sub-sections and compared

with the ―base case scenario‖ as follows:

95

(a) High capital cost scenario assuming that the cost of capital and that of

recurrent works will be 20 percent higher than the base case scenario costs;

(b) Low benefits scenario assumes that accrued benefits will be 20 percent lower

than the base case scenario benefits; and

(c) High capital cost and low benefits scenario which assume that the cost capital

and that of recurrent works will be 20 percent higher than the base case

scenario and accrued benefits will be 20 percent lower than the base case

scenario benefits.

12. The Net Present Value (NPV) and the Economic Internal Rate of Return (EIRR)

for the reconstruction are shown in Table 9.

Conclusion

13. These results show that each of the five road sections are economically viable

(positive NPVs and EIRR>12%), even under the worst situation when both costs go up

by 20 percent and the benefits go down by 20 percent.

Table 9: Summary of NPV and EIRR

Road Section Benefits (US $ M) NPV(US$ M) EIRR (%) Package 1: JKIA junction to Southern

Bypass

Base Case 469.97 65.4

Costs up by 20% 454.7 57.7

Benefits down by 20% 390.57 58.7

Costs up by 20% and

Benefits down by 20%

375.3 51.6

Package 2: Southern Bypass to James

Gichuru Road Junction

Base Case 190.5 36.6

Costs up by 20% 170.1 30.7

Benefits down by 20% 132 29.5

Costs up by 20% and

Benefits down by 20%

111.6 24.7

Package 3: James Gichuru Road Junction

to Rironi

Base Case 148.6 33.9

Costs up by 20% 132.1 28.8

Benefits down by 20% 102.3 27.7

Costs up by 20% and

Benefits down by 20%

85.8 23.3

Package 4: Kisumu Northern Bypass Base Case 53.3 23

Costs up by 20% 44.4 20.2

Benefits down by 20% 33.7 19.6

Costs up by 20% and

Benefits down by 20%

24.9 16.9

Package 5: Meru Bypasses Base Case 11.6 17.2

Costs up by 20% 7.1 14.8

Benefits down by 20% 5.6 12.4

96

Annex 7: Environmental and Social Safeguards

Operational Policy (OP) 4.01, OP /Bank Procedure (BP) 4.11 and OP/PB 4.12

Environmental Safeguards

1. The Project‘s anticipated social and environmental impacts have triggered Bank

Operational Policy (OP) 4.01 (Environmental Assessment), as well as OPs 4.12

(Involuntary Resettlement), and 4.11 (Physical Cultural Resources). The environment

category of the project is B – Partial Assessment – as proposed activities, which for the

most part involve rehabilitation/expansion of existing roads within the right of way (in

addition to some relatively short bypasses that will not traverse natural habitats) will

have moderate and reversible impacts. Overpasses will be constructed largely within the

existing right of way.

Table 1: Safeguard Policies Triggered by the Project

Yes No

Environmental Assessment (OP/BP 4.01) [ X] [ ] Natural Habitats (OP/BP 4.04) [ ] [ X] Pest Management (OP 4.09) [ ] [ X] Indigenous Peoples (OP/BP 4.10) [ ] [ X] Physical Cultural Resources (OP/BP 4.11) [ X] [ ] Involuntary Resettlement (OP/BP 4.12) [ X] [ ] Forests (OP/BP 4.36) [ ] [ X] Safety of Dams (OP/BP 4.37) [ ] [ X] Projects on International Waterways (OP/BP 7.50) [ ] [ X] Projects in Disputed Areas (OP/BP 7.60) [ ] [ X]

Description of Project Locations and Resettlement/Compensation

2. Component A (a). Construction of additional lanes on Jomo Kenyatta

International Airport (JKIA)-Likoni-James Gichuru-Rironi road (A104).

3. The proposed project shall have several components that include providing

additional lanes, dualling of an existing road, constructing a new access roads and

rehabilitation of existing road. The specific components of the project include the

following:

Construction of additional two (2) lanes from JKIA-Nyayo Stadium (approx.

12 km).

Construction of an elevated roadway with two (2) lanes on either side from

Nyayo Stadium to Museum Hill Roundabout (approx. 4 km).

Construction of additional two (2) lanes from Museum Hill Roundabout to

Uthiru (approx. 12 km).

Rehabilitation of the existing carriageway from Uthiru to Rironi (approx. 18

km).

Dualling of Airport South Road (approx. 3 km).

Construction of access road to the proposed Barabara Plaza (approx. 2 km).

97

Construction of access road to Inland Container Depot (approx. 2 km)

Widening of access to JKIA Airport (approx. 2 km).

4. The additional lanes will largely use the available space in between the roads of

the Highway from JKIA to Uthiru covering a total distance of approximately 28km. The

various selected roads earmarked for either construction, expansion, provision of an

elevated roadway or rehabilitation have been identified by Kenya National Highways

Authority (KeNHA) as important sections that require urgent attention in order to reduce

the frequent, unpleasant and the high cost of traffic congestion.

5. Project Affected Persons (PAPs). The census was conducted in the project area

and the cut-off date was March 2, 2012. The total number of vendors in the census that

will be compensated is 344. These vendors have 238 spouses and 740 children who are

dependents and not vendors, resulting in a total number of 1,322 Project Affected Persons

(PAPs). None of the PAPs have any recognizable legal right or claim to the land they are

occupying as they are carrying out business on public land (road reserve). These

informal businesses at the roadside include vending fruits, vegetables, soft drinks,

magazines, second hand clothes and shoes, plants and toys. The majority of these vendors

have temporary wooden stands for their businesses while some place their merchandise

on plastic paper or mobile hand carts that are quickly taken away for safe keeping at the

end of each day‘s activities Only a few PAPs have properly constructed kiosks which

they securely close at night with merchandise inside them.

6. There will be no land acquisition for this section. Works will be within highway

way leave. No residential or permanent business premises shall be affected by the

proposed project. Refer to Table 2.

Table 2: Summary of the Location, Vendors, Affected Structures and PAPs Location

No of

Vendors

Commercial

Structures

Type of Businesses PAPs

Total

PAPs

Adults Children

1. Westlands Area 29 6 Car Park, Car Wash, Taxi

Bay, Bus Park

46 30 76

2. Kangemi Bridge 189 5 Vending fruits, vegetables,

clothes, transport, shoe

shiners, soft drinks, eggs,

potatoes, onions, grocery

330 486 816

3. Uthiru Junction

(Uthiru-Naivasha

Road Junction)

18 18 Vendors selling fruits,

vegetables, soft drinks and

confectionery

22 21 43

4. Uthiru

Corporation near

Footbridge

23 23 Vending fruits, vegetables,

electrical, clothes, fish

(omena), tailoring, cereals

41 55 96

5. 87 Junction 4 4 Vendors selling shoes

clothes, soft drinks, plants

and confectionery

7 5 12

6. Stage 87 9 9 Vending shoes, clothes,

fruits, vegetables, sweets,

cigarettes, sodas

14 15 29

7. Kinoo 56 59 Vending fruits, vegetables,

charcoal and clothes

93 96 189

98

8. Gitaru 9 9 Vending sodas, snacks,

cigarettes, sweets, calling

cards, water, fruits and

vegetables

16 14 30

9. Airport South

Road at junction

with North

Airport Road

7 Mobile trolley

/ temporary

stand / Motor

bikes

Vendors selling fruits, soft

drinks, confectionery and

motorbike transport

13 18 31

10. Nyayo Stadium Few

Mobile

Hawkers

Mobile

Hawkers &

newspaper

vendors

Temporary Hawkers

selling, magazines &

newspapers, fruits,

accessories and toys

- - -

Total 344 133 582 740 1322

7. Income Restoration. There shall only be one main type of income restoration,

namely Non-Land Based (arising from loss of business structures and businesses).

Displacement of persons will be largely at locations next to the highway. For the wooden

stands and kiosks, valuation has been done at Full Replacement Cost, plus the cost of

transporting building materials to an alternative site where the PAPs may work, as well as

the cost of any labor and contractors‘ fees. GoK has also included the loss of income for

a period of six months before business picks up at the alternative site. Those without

stands (who display their goods on the ground), movable carts, and taxis, will be

compensated for loss of business for a period of six months before business picks up at

the alternative site.

8. Since the majority of the vendors have temporary structures (refer to Table 3)

where they carry out their business activities, KeNHA will negotiate with the vendors for

appropriate relocation to an area as close as possible to where they are currently carrying

out their businesses. For those with slightly bigger kiosks, KeNHA will assist with

appropriate relocation of such structures within the area to allow for project

implementation. All the vendors support the proposed road project and request for timely

notice and assistance for relocation to any appropriate site within the area.

Table 3: Informal Business Structures to be Affected by the Road sections Site Location Type of Commercial Structures/Facility Total Number

of Structures

1. Westlands Area Bus Stage, Matatu Stage, Taxi Bay, Public

Toilet, Billboards

6

2. Kangemi Bridge Metal shelter, wooden 5

3. Uthiru Junction (Naivasha Road Junction) Temporary Sheds 18

4. Uthiru Corporation (Near Footbridge) Temporary Wooden Stands 23

5. 87 Junction Temporary Sheds 4

6. Stage 87 Wooden sticks with polythene sheet 9

7. Kinoo Wooden Stand, wooden stand with

polythene sheet, Wooden Kiosk, Metallic

Stand

59

8. Gitaru Wooden sticks with polythene sheet 9

9. Airport South Road at Junction with Airport

North Road

Temporary Sheds. Mobile trolley and

motor bikes

-

10. Nyayo Stadium Mobile Hawkers and Newspaper Vendors -

11. Middle space between the two roads of the

highway from JKIA to Uthiru

Billboards and Trees

Total 133

99

9. The project will greatly improve road usage, reduce traffic congestion, minimize

the losses associated with excess use of fuel during hold-ups and also significantly reduce

accidents. The introduction of the proposed additional lanes and grade separation will

improve traffic flow, enhance road safety and reduce/eliminate inconveniences which

currently are commonplace in the Nairobi Central Business District (CBD) and its

immediate environs.

10. JKIA – Rironi RAP Estimate (Table 4). The RAP is estimated to cost KES106,

577,400 (approximately $US1,268,778.5).

Table 4: Resettlement Cost Estimates

Nr Structure Valuation Cost

(KES)

1. Structures 2,714,000.00

2. Loss of business profit (for six months) 34,830,000.00

3. Trees 23,000,000.00

4. Relocating billboards, road signs, bus stop 2,400,000.00

5. Relocating street lights 14,000,000.00

6. Cost of Monitoring & Evaluation (5%) 3,000,000.00

Sub-Total 1 77,230,000.00

Contingency (15%) 11,584,500.00

Sub-Total 2 88,814,500.00

Inflation (20%) 17,762,900.00

Grand-Total 106,577,400.00

11. Component A (b). The 9 km Kisumu Northern Bypass. Kenya National

Highways Authority (KeNHA) is planning to construct a new road to link Mamboleo to

Otonglo (approximately 9 km). The bypass starts at Mambo Leo Junction of Kisumu-

Kakamega (A1) Highway. After Mambo Leo Junction, the bypass goes through a quarry

field, and then heads towards Kanyakwar Hills at Riat Tor (Hill). Then it curves around

the Kogony Hill, passes in front of Jans Senior Academy and runs for about 1 km. After

curving out westward after Tor 9, it crosses Riat-Paradise Murram road 100 meters to the

south of Abuson Shop. After avoiding the eastern flank of the Abuson River, the bypass

then runs southwards in a straight line. It crosses Kisumu – Butere rail line before ending

on an Intersection on Kisumu-Kisian (B1) Road at a point about 400 meters to the east of

Kotetni Primary School fence. The new alignment will traverse private land that is mostly

used for agricultural purposes.

12. A total of 1,441 PAPs will be affected along this road 9 km section (refer to

Tables 5 and 6). The bulk of the compensation will be acquisition of small pieces of land

to attain the right of way required for the 9 km long, 110m wide reserve for the brand

new road. The 1441 persons are impacted through the purchase of 99 Ha of land. The

purchase is therefore for small parcels of land belonging to PAPs. 249 PAPs with 1124

dependents will need to move permanently off the land. The balance of 46 landowners

and 22 dependents are only affected through partial loss of land. No PAPs will be moved

temporarily. Since the road is on a new alignment passing through virgin settled land,

temporary loss of business will not be experienced. There are no roadside temporary

structures affected and there are no squatters. The PAPs will be compensated (i) at full

100

market replacement values for loss of land and all non-land assets, such as

houses/structures, trees, crops, and other immovable assets that are situated on the

acquired land; and, (ii) for costs of physical location in cases of homestead loss; loss of

temporary income by business operators and their employees; and, loss of rental income

from houses/structures built on acquired private land.

Table 5: Summary of Project Affected Persons by the Mamboleo to Otonglo Road

Item Description No.

1. Number of affected persons on the 9

km Mamboleo to Otonglo road

Male:

Female:

Institutions:

Unknown:

Total

174

87

13

21

295

2. Affected Land Parcels Hectarage 99 Ha.

3. Number of persons whose structures

are affected:

Male:

Female:

Learning Institutions:

Total:

133

52

3

188

4. Number and types of structures

affected

Permanent

Semi-Permanent:

Temporal:

Total:

150

242

165

557

5. Number of businesses affected and

owned by:

Male

Female

Total:

43

20

63

13. There were a total of 295 households (refer to Table 6) affected as follows:-.

PAPs enumerated were 1441. These consisted of PAPs who are land owners, land and

structures owners, tenants of businesses, employees of businesses, residential tenants and

dependants.

Table 6: Summary of Households Affected by the Mamboleo to Otonglo Road

Item Total

Number Disaggregation

1. Households whose head was identified by name

and the size household established 130 Male

Female Institutions Total

86 41 3 130

2. Household whose head was identified by name but

whose household size was not established 144 Male

Female Institutions Total

88 46 10 144

3. Households whose head was not identified by name

nor household size established 21 Unknown

4. The total number of households established in

individual parcels of land along the 9 km road 295

5. Of the 130 Households in (a) plus the 144

household heads in (b), the total number of PAPs

established

1,441

101

14. Component B (e). The Meru town bypass roads (Western B6-C482-B6 and

(Eastern B6-C92-D482-C91) is approximately 21 km long of single carriageway, two-

lane 6.5 meters wide, and bitumen surfaced road with 1.0 meters shoulders on each side.

The existing road is a narrow gravel road averaging 4 meters wide that will be upgraded

to bituminous standards. It will traverse Ntakira, Mpuuri and Ntima locations on the

Western bypass and Igoki and municipality location on the Eastern bypass in Imenti

North district of Eastern Province of Kenya. The major items of works to be executed

under the contract include the following:

Setting out, referencing and taking cross sections;

Site clearance and removal of top soil;

Earthworks;

Constructing drainage structures (box and pipe culverts including protection

works);

Construction of pavement comprising bitumen surfacing, cement stabilised base

and improved material sub-base;

Works necessary for the safe and convenient passage of traffic through the

works;

Provision of road furniture e.g., signs, guardrails, marker posts, wire fencing,

etc.; and

Operations ancillary to the main works, such as the construction of offices,

laboratories and staff housing, accommodation works, relocation of services, the

operations in quarries and borrow areas, the provision of water supply, the

diversion of existing services.

15. The design of the road includes facilities such as lay-bays, bus bays and widening

at market centres along the road. PAPs enumerated were 823 (refer Table 7). These

consisted of PAPs who are land owners, land and structures owners, tenants of

businesses, employees of businesses, residential tenants and dependants.

Table 7: Census of PAPs for Meru Bypass

Category Unit Number

Land PAP 440

Land and structures PAP 60

Business tenants PAP 15

Employees of business PAP 2

Residential tenants PAP 9

Subtotal, number of PAPs to be compensated 526

Dependants PAP 297

Total PAP 823

16. The bulk of the compensation will be for small pieces of land to expand the road

on each side. Thirteen land parcels out of 500 will be fully acquired necessitating eight

families to be fully relocated and five will lose full pieces of land. The household

members for the eight families to be fully displaced are 36. 440 land parcels will be

102

acquired partially for compensation since the remaining land portions can still be utilized

productively and economically.

17. Five public meetings were organized by the Consultant in collaboration with the

local administration and the Kenya Urban Rural Authority (KURA) Upper Eastern

Regional Office. These consultations along with dates, venue and attendance sheets are

recorded in the Resettlement Action Plan (RAP).

18. Failure to understand and manage social issues can have enormous economic

costs, cause significant damage to the reputations of organizations involved and even put

entire investments at risk. Some of the common social risks that can impact on project

outcomes are summarized as follows:

Social support systems are left behind.

Loss of social/business network e.g. Loss of contacts for procurement of business

materials.

While new business opportunities may be found, such opportunity may pose risks

such as disruption of way of life to host community, emergent new ways of life

such as rise in prostitution, drug use and crime rate.

The proposed RAPS are designed to mitigate these social risks.

Environmental Characteristics of Project Areas

19. Component A (a). The project area is mainly built up therefore there will be

minimal or negative animal species that will be displaced. Although a 2 km section of the

road expansion from JKIA to Nyayo Stadium does run parallel to the Nairobi National

Park, there is a buffer provided by an industrial estate between the road and the

boundaries of the Park. Therefore the road works will not impose additional stress on

wildlife, though construction waste should be disposed of well outside the vicinity of the

National Park.

20. Component A (b). The escarpment occurs in the form of rounded shapes on the

east side of Kisumu-Kakamega (A1) Road at which point they taper into piedmont plains

that form a gentle Kanyakwar valley that meet the bulk-hill on which Kisumu city is

built. The hills do not have gazette forest except at Scarp 9 near Jans Senior Academy

where a small area is set aside for arboreal practice. Bush and shrubs occupy the scarps

along which the bypass road corridor is planned.

21. Component B (e). The road generally traverses through rolling topography with a

general altitude of 1,700 meters at the Western Bypass and 1,500 meters at the Eastern

Bypass. Both bypasses cross River Kathita and several small perennial streams. The

river and the streams originate from Mt Kenya and intersect the project road, flowing

eastwards as tributaries of the River Tana. The project is in the vicinity of the Imenti

Forest, which is one of the many small remnant patches of the forest in which fragmented

elephant herds shelter, threatened by a burgeoning human population of agriculturalists

103

who are not sympathetic to their presence. The Imenti Forest lies east of Mount Kenya

between the towns of Embu and Meru and today a small herd of elephants (probably no

more than about 50) shelters within, surrounded by human settlement and isolated from

their Mount Kenya brethren. Illegal logging within the forest itself is inflicting further

pressure on this small band of surviving elephants, whose future is uncertain unless safe

passage for them can be arranged by way of a corridor so that the elephants can reach the

Mount Kenya forests. The proposed bypass does not traverse the forest but follows the

edge of the forest for about 2 km around Gitoro area before joining B6 road - hence not

affecting the forests, or coming close to the wildlife sensitive sites. The Kenya Forestry

Service has an electric fence which prevents access to the Imenti Forest.

22. In addition to the Environmental and Social Impact Assessment (ESIAs) prepared

for the investment components, ToRs for environmental and social studies of the Bus

Rapid Transit (BRT) and Commuter Rail Technical Assistance components have been

prepared and disclosed May 6, 2012 in the InfoShop and May 28, 2012, in-country. The

summary is provided in Table 10.

Environmental Impacts

23. Potential environmental impacts may include soil erosion and disturbance of

water flows, water pollution, traffic disruption, noise, gaseous and dust pollution and

temporary disturbance of flora and fauna (mainly during the construction phase). In the

case of the improvement of the Northern Corridor road (namely JKIA-Turnoff-

Westlands-Rironi road section through Nairobi and associated service roads and major

junctions) some mature trees (though not indigenous species) will be lost as a result of

road widening.

Mitigation measures

24. KeNHA will liaise with the Kenya Forestry Service on replacement tree planting

activities. The magnitude of tree cutting in these urban areas is not sufficient to

necessitate the preparation of a Forest Management Plan, or to trigger the Bank‘s

Operational Policy on Forests, OP 4.36. Nevertheless, it is important to undertake

replacement tree planting liaising with Kenya Forestry Service and local municipality

authorities with responsibility for maintaining roadside verges and vegetation.

25. Since the expected negative impacts will relate to the construction phase of the

project, mitigation and support measures will be incorporated in the relevant clauses in

the contract documents, for the road sections. Such clauses include, among others,

provisions for appropriate measures for storage, handling, transportation and disposal of

all waste material; provision of adequate sanitary facilities; rehabilitation and surface

restoration of borrow pits; basic training in construction health and mitigation measures

against spread of Human Immunodeficiency Virus/Acquired Immune Deficiency

Syndrome (HIV/AIDS); and sustainable seeding and tree growing to restore vegetation to

its original condition; and extraction of water.

104

26. In the road rehabilitation sites, OP 4.11 (Physical Cultural Resources) is also

being triggered. Construction will take place in proximity to areas of cultural, historical,

and religious significance (the museum at Provincial Commissioner‘s House, Uhuru

Park, and the Nairobi Synagogue). Guidelines for ―chance finds‖ procedure will be

integrated into the contracts for construction. These include development of a cultural

property management plan if physical cultural resources are found or adversely affected

(although this is not expected to be the case, and consultations have already been held

with stakeholders and their concerns about the construction process have been noted and

addressed). Table 8 below summarizes the project‘s potential environmental impacts and

proposed mitigation measures.

27. Component A (b). The escarpment occurs in the form of rounded shapes on the

east side of Kisumu-Kakamega (A1) Road at which point they taper into piedmont plains

that form a gentle Kanyakwar valley that meet the bulk-hill on which Kisumu city is

built. The hills do not have gazetted forest except at Scarp 9 near Jans Senior Academy

where a small area is set aside for arboreal practice. Bush and shrubs occupy the scarps

along which the bypass road corridor is planned.

28. Component B (e). The road generally traverses through rolling topography with a

general altitude of 1,700 meters at the Western Bypass and 1,500 meters at the Eastern

Bypass. Both bypasses cross River Kathita and several small perennial streams. The

river and the streams originate from Mt Kenya and intersect the project road, flowing

eastwards as tributaries of the River Tana. The project is in the vicinity of the Imenti

Forest, which is one of the many small remnant patches of the forest in which fragmented

elephant herds shelter, threatened by a burgeoning human population of agriculturalists

who are not sympathetic to their presence. The Imenti Forest lies east of Mount Kenya

between the towns of Embu and Meru and today a small herd of elephants (probably no

more than about 50) shelters within, surrounded by human settlement and isolated from

their Mount Kenya brethren. Illegal logging within the forest itself is inflicting further

pressure on this small band of surviving elephants, whose future is uncertain unless safe

passage for them can be arranged by way of a corridor so that the elephants can reach the

Mount Kenya forests. The proposed bypass does not traverse the forest but follows the

edge of the forest for about 2 km around Gitoro area before joining B6 road - hence not

affecting the forests, or coming close to the wildlife sensitive sites. The Kenya Forestry

Service has an electric fence which prevents access to the Imenti Forest.

29. In addition to the ESIAs prepared for the investment components, ToRs for

environmental and social studies of the BRT and Commuter Rail Technical Assistance

components have been prepared and disclosed May 6, 2012 in the InfoShop and May 28,

2012, in-country. The summary is provided in Table 10.

105

Table 8: Potential Environmental Impacts and Proposed Mitigation Measures

Nature of Impact Mitigation measure taken or to be taken

Slope failure o In sections with high filling along the roadside, all slopes to be cut at

the natural angle of repose and bush grass planted.

o Extremely steep hillsides to be protected by terracing, gabions, stone

pitching and planting of ground cover vegetation

o Side drains to be lined

Altered

topography and

landscape

o Re-vegetate with original vegetation as much as practical when the

construction is over

o To the extent possible, the engineering design to as much as practical

blend with the natural landscape.

o Material sites to be rehabilitated.

o Plant trees 2-3 meters from road to provide shade and stabilize

roadsides and river banks. Trees should not be planted on the inside of

a curve where they might block the view of oncoming vehicles.

Contamination of

land and water

from hazardous

materials and

petroleum products

o Regular servicing and maintenance of construction equipment

o All applicable laws, regulations and standards for the safe use,

handling, storage and disposal of hazardous waste will be followed.

o Hazardous materials will be stored within dedicated areas at work

camps and marshalling yards in full compliance with regulatory

requirements. Temporary storage of hazardous materials at remote

sites must be located at a minimum of 100 meters from a waterway.

o Areas dedicated for hazardous material storage shall provide spill

containment and facilitate clean up through measures such as:

maximum separation from sensitive features, e.g., rivers; clear

identification of the materials present; access restricted to authorized

personnel and vehicles only, and dedicated spill response equipment.

o Storage sites for petroleum products shall be secured and signs will be

posted which include hazard warnings, who to contact in case of a

release (spill), and access restrictions and under whose authority the

access is restricted will be posted.

Establishment of

Quarries and

Borrow Pits

o The contractor should prepare (for approval by the Engineer) a borrow

pit rehabilitation plan.

o Upon acquisition of all borrow sites, these should be fenced with

wooden posts and an access gate erected.

o Rehabilitate quarry sites and other material sites to discourage

pounding which are mosquito breeding grounds. Exposed sites are

also sites of water-borne disease transmission for both human and

animals.

o Upon decommissioning, site to be rehabilitated to the satisfaction of

the Engineer.

106

Nature of Impact Mitigation measure taken or to be taken

o Top soil (30 cm) should be piled up for use in rehabilitation of the

diversion routes.

o Waste excavated materials should be disposed off in a manner that

ensures protection of waterways.

o Re-vegetation of these sites with the previously existing vegetation.

o The contractor to submit to the road engineer a camp and site office

plan defining all facilities to be created. These include human waste

disposal facilities and solid waste management facilities.

o Ensure that all waste materials at the point of construction are

transported to a place of safe disposal.

Health impacts/

HIV/AIDS o Sensitise workers and the surrounding community on awareness,

prevention and management of HIV/AIDS through staff training,

awareness campaigns, multimedia, and workshops or during

community Barazas.

o Ensure that all construction machines and equipment are in good

working conditions to prevent occupational hazards; lighting devices

and safety signal device will be installed for night-time operations.

o Contractor to provide all workers with appropriate protective clothing

such as helmets and dust masks while working in dusty environment.

o Work to minimize or altogether eliminate mosquito breeding sites.

Non-critical

natural habitat and

biodiversity loss

o Liaise with wildlife and forestry officials and wildlife organizations,

civil society, and community representatives to avoid ecological hot

spots, and to be sensitive to breeding and migration seasons, along

road works (particularly along Imenti Forest).

o Protect against poaching and theft of precious woods at camp sites.

Water Pollution in

natural water

courses/Water

conservation

o Avoid construction, especially heavy earthworks during heavy rains.

o Install grease traps for surface run-off in market centres.

o Implement water use management and conservation plans at

construction and camp sites.

o Installation of soil erosion control devices, e.g., gabions and planting

ground cover vegetation.

Run-off

sedimentation o Grit traps will be incorporated as part of the drainage system.

o Planting of grass on the verges to reduce soil erosion and transport of

suspended matter.

Air pollution

generated through

construction

activity,

construction

o In filling sub grade, water spraying is needed to solidify the material.

After compacting, water spraying should be regular to prevent dust.

o The location and operation of asphalt batch plants need to be as far as

possible from residential areas- at least 500 meters from downward

wind direction of asphalt mixing sites.

107

Nature of Impact Mitigation measure taken or to be taken

machinery and

vehicular traffic o Operators should use personal protective equipment (PPE) such as

dust masks, boots, and protective eye wear.

o Vehicles and construction machinery will be required to be properly

maintained and to comply with relevant emission standards.

o Surface dressing of diversions through population centres.

o Regular dust collection, removal and water sprinkling at the asphalt

mixing and cement stabilization yards.

o Water should be sprayed during the construction phase, in the line and

earth mixing sites, asphalt mixing site, and diversion roads.

o Monthly maintenance of asphalt and stabilization plants.

o Speed controls by temporary speed pumps on diversions where

necessary.

o Planting trees in the road reserve will help to filter out particulate

matter emitted from exhaust fumes and dust.

o Avoid night time construction when noise is loudest.

Noise pollution o Operators should use protective personal equipment (PPE) such as

helmets and ear mufflers.

o Monthly maintenance of construction machinery.

o Cleared vegetation, earth and stone will be properly disposed of so as

not to block the water-ways.

Change in natural

drainage pattern o Avoid construction during heavy rains.

o Planting of conservation vegetation to control erosion and

consequently sedimentation.

o The drainage facilities will be periodically cleared so as to ensure

water flow.

Roads pass near

areas of cultural,

historic, and

religious

significance

o As necessary, consult with National Museums of Kenya about Right

of Way of the proposed project. Chance finds procedures clauses will

be inserted into all construction contracts, with the Supervising

Engineer retaining responsibility for the enforcement of such clauses,

and notification of appropriate cultural authorities in the event of

archaeologically and/or culturally significant finds.

Increased Traffic

accidents o At the start of construction of the road, it will be necessary to start a

sustained road safety campaign incorporating strict enforcement of the

Traffic Act (e.g., driver training, removal of broken-down vehicles

from the road, etc.)

o Clearing of vegetation on the road reserve to improve sight distance

and visibility.

o Proper signage to warn motorists and others of any hazards.

o The pavement of road shoulders within the sand harvesting areas will

108

Nature of Impact Mitigation measure taken or to be taken

be designed to full-strength and to extra width for frequent trafficking

and parking of tractors.

o Guard rails will be provided in sections with steep slopes.

o Installing clear road signs especially while approaching bends,

junctions, bridges, and roadside settlements.

o Appropriate road markings should be designed in locations where

standards are compromised to warn drivers of safety hazards.

Social and environmental benefits

30. In addition to social and environmental impacts requiring mitigation, the project

will generate significant social and environmental benefits. The social benefits will

accrue from opportunities for short-term employment during construction, but there will

also be long-term benefits from increases in road safety and time saved. The travel time

along road sections under the project is expected to reduce by 30 percent and vehicle

operating costs are expected to be reduced by 25 percent with the proposed

improvements; and the provision of road-side amenities, including bicycle tracks,

pedestrian crossings, service roads along the selected road sections, and improvement of

junctions will enhance safety on roads.

31. Road safety issues are a major concern in Kenya that claims about 3,000 lives

annually. This project will complement the efforts under the Northern Corridor Transport

Improvement Project (NCTIP) and the Kenya Transport Sector Support Project (KTSSP),

where a National Road Safety program has been developed and approved by the GoK.

Under the project, attention will be given to increasing awareness of road safety through

information provision and education of adults as well as children along the selected road

corridors. The design of the project will include widening of the existing road in critical

places to allow for bicycle paths and pedestrian sidewalks to enhance safety in selected

areas.

32. The project will greatly improve road usage, reduce traffic congestion, minimize

losses associated with excess use of fuel during hold-ups and also significantly reduce

accidents. The introduction of the proposed additional lanes and grade separation will

improve traffic flow, enhance road safety and reduce/eliminate inconveniences which

currently are commonplace in the Nairobi CBD, Kisumu and Meru and their immediate

environs. The reduction in traffic congestion along the JKIA –Nyayo Stadium route will

reduce the current practice of motorists taking shortcuts through the Nairobi National

Park or along residential roads adjacent to the park, which increases air pollution in the

Park and causes distress to wildlife. Smooth traffic flow also has strong greenhouse gas

reduction benefits and reduces local air pollution. Nitrogen oxide8, carbon dioxide, and

8 Nitrogen oxides (NOx) act as indirect greenhouse gases by producing the tropospheric greenhouse gas

'ozone' via photochemical reactions in the atmosphere. Carbon dioxide is a primary greenhouse gas.

109

carbon monoxide emissions are likely to be reduced by a factor of 2-3 due to the

reduction of repetitive stop-starts.

Chronic exposure to carbon monoxide is associated with increased risk for adverse cardiopulmonary

events.

110

Table 9: Summary of Social Impacts Covered in the RAPs

Nature of works Land

acquisition

No of PAPs Cost of RAP

(million)

Consultations

1

JKIA-Likoni - James Gichuru-Rironi

Road (A104): The proposed project shall

have several components that include

providing additional lanes, dualling of an

existing road, construction of a new access

roads and rehabilitation of the existing

road. The additional lanes will largely use

the available space in between the roads of

the highway from JKIA to Uthiru.

Approximate 51 kms of road sections.

No

Mostly informal traders

Total 344 vendors to be compensated and

133 temporary structures affected.

The 344vendors have 238 spouses and 740

children (dependents). There will be no land

acquisition. Works will be within highway

way leave

KES106.6

(US$1.3 equivalent)

Three

consultations on

February 29th

and

March 2, 2012.

Minutes and

attendance

included in the

RAP

2

KISUMU Bypass: KeNHA is planning to

construct a new road to link Mamboleo to

Otonglo (approximately 9 km).

Construction of the Kisumu Northern

bypass along the Northern Corridor.

New road 9 km.

Yes 1,441 PAPs

KES1,055.3

(US$12.87

equivalent)

Consultations

held during

census on April

23 through April

30, 2012.

3

Meru Bypass: Construction of Meru

bypasses to decongest the town. The

existing road is a narrow gravel road

averaging 4m wide that will be upgraded

to bituminous standards. The works to be

executed under the contract comprise the

construction of approximately 21 km of

single carriageway, two-lane 6.5 meters

wide, bitumen surfaced road with 1.0

meters shoulders on each side.

500 land

parcels with

estimated

area of

19.1ha will

be acquired.

The affected population will be 526 persons

to be compensated as follows: 440 to be

compensated for land only; 60 for land and

structures; and 26 are tenants to be paid a

disturbance allowance.

There are 297 are dependents.

13 land parcels will be acquired fully

whereby 8 families with a population of 36

people will be fully resettled and 5 full

pieces acquired. The bulk of compensation is

for acquiring small pieces of land on either

side of road for expansion.

KES372.0

(US$4.4 equivalent)

Five (5) public

meetings

organized by the

Consultant and

KURA on March

10, and March

11th

, 2012

TOTAL COSTS OF RAPS KES1,533.9

(US$18.6 equivalent)

111

Borrower’s Capacity to Implement Safeguards

33. KeNHA has substantial experience in the preparation and implementation of

Environmental and Social Management Plans (ESMPs) and RAPs in compliance with

previous Bank standards, conducted under earlier Bank-financed projects, including

among others, the Northern Corridor Transport Improvement Project, and the Kenya

Transport Sector Support Project. KeNHA has experienced social specialists with

experience in implementing OP 4.12 on staff. The environmental specialist has

undertaken preparation and monitoring of ESIAs for Bank financed projects at both

KeNHA and previously at Kenya Power and Lighting Company. Although KURA has

less in-house experience, they have recently hired an environmental specialist, and the

Environmental and Social Impact Assessment (ESIA) submitted and cleared for the Meru

bypass was of a high standard.

Stakeholder consultations

34. Stakeholder consultations were conducted for all PAPs as well as local

businesses, farms, and public institutions (schools, care homes, etc) along the route

(roads). Dates of consultations are provided in Table 9. Key concerns were: dust

pollution from construction; construction waste disposal; loss of custom due to limited

accessibility to shops, petrol stations, and hotels during construction; limited accessibility

to a religious institution (Nairobi Synagogue); road safety during construction; and

adequate compensation for land acquisition. Monitoring will be undertaken to ensure

proper environmental impact mitigation measures are in place ( frequent watering of

roads; disposal of waste away from residential and market areas; adequate safety signs

and safe crossing points; provision of access points to businesses, institutions, and houses

of worship). Compensation issues will be addressed through the implementation of the

RAPs consistent with Bank policy and standards.

Disclosure of Safeguards Documents

35. All the ESIAs and RAPs including an Environmental and Social Management

Plan (ESMP), has been cleared by the World Bank and was disclosed in the Bank‘s

InfoShop and in-country (Table 10). The draft Terms of Reference for the ESIAs for

development of Bus Rapid Transit corridor and the Commuter Rail network were

prepared and also disclosed both in the Bank‘s InfoShop and in-country. The

implementing agencies have staff with adequate experience and qualifications to manage

environmental and social matters associated with their respective infrastructure

rehabilitation components. All construction projects will adhere to the rules and

regulations of the National Environmental Management Authority (NEMA), and all

necessary permits will be obtained prior to construction.

112

Table 10: Environmental and Social Safeguards Reports

Item

no.

Road section/Commuter rail Clearance by the

Bank

Disclosed in

InfoShop

Disclosed in-

Country

Environmental and Social Impact Assessments (ESIAs)

1.

Expansion and improvement of the

Northern Corridor road section

through Nairobi starting from JKIA

turnoff-Westlands-Rironi

May 4, 2012 May 9, 2012 May 9, 2012

2. Kisumu Northern Bypass May 4, 2012 May 9, 2012 May 8, 2012

3.

Meru Bypasses. Construction of

approximately 20 km of single

carriageway, two-lane 6.5 m wide,

and bitumen surfaced road with 1.0

m shoulders on each side.

April 23, 2012 April 24, 2012 April 24, 2012

Resettlement Action Plans (RAPs)

1.

Expansion and improvement of the

Northern Corridor road section

through Nairobi starting from JKIA

turnoff-Westlands-Rironi

April 26, 2012 May 3, 2012 May 2, 2012

2.

Kisumu Northern Bypass: new road

to link Mamboleo to Otonglo

(approx. 9 km).

May 6, 2012 May 9, 2012 May 9, 2012

3.

Meru Bypasses. Construction of

approximately 21 km of single

carriageway, two-lane 6.5 meters

wide, and bitumen surfaced road

with 1.0 meter shoulders on each

side.

May 7, 2012 May 9, 2012 May 9, 2012

Terms of Reference (ToRs)

1.

Environment and Social Impact

Assessments for development of Bus

Rapid Transit Systems and

Commuter Rail network

May 6, 2012 May 11, 2012

May 28, 2012

(disclosed on the

websites of KURA

and KRC)

Wajir

Turkana

Marsabit

Garissa

Isiolo

Kitui

Tana River

Mandera

Kajiado

Narok

Samburu

Mwingi

Taita Taveta

Kwale

Moyale

Laikipia

Kilifi

Baringo

Malindi

Lamu

Nakuru

Makueni

West Pokot

Nyeri

Machakos

Nandi

Thika

Meru North

Migori

NyandaruaKericho

Mbeere

Uasin Gishu

Siaya Koibatek

Buret

Keiyo

Trans Mara

Meru Central

Bomet

Bungoma

Trans Nzoia

Busia

Tharaka

Suba

Kiambu

Marakwet

Kirinyaga

Kisii

NyandoBondo

ButereKakamega

Embu

Kisumu

Teso

Kuria

Homa Bay

Lugari

Nyamira

Mt Elgon

Muranga

Gucha

Nairobi

Maragua

Meru South

Vihiga

Rachuonyo

Lamu

Suba

Mombasa

LamuLamu

Suba

MombasaMombasa

A2

A1

A109

A3

A23

A14

A104

A109

A1

A109

A1

A104

A104

A104

A3

A104

A104

A3

A3

A109

A104

A1

A3

B9

B3

B1

B8

6B

B4

B5

B7

B2

B5 B6

B2

B9

B3

B1

B1

B9

B9

B7

B3

B4B4

B9

B8

B7

B4

B9

B9

B5

B7

B7

B9

B4

B8

B5

WOTE

LAMU

EMBU

HOLA

MERU

MAUA

ITEN

KWALE

KITUI

THIKAKENOL

BOMET

KISII

NAROK

SINDO

CHUKA

AWASIBONDO

SIAYA

BUSIA

IJARA

WAJIR

TAVETA

KILIFI

KIAMBU

OGEMBO

MIGORI

LITEIN

MWINGI

VIHIGA

NAKURU

BUTERE

KITALE

ISIOLO

MOYALE

LODWAR

MALINDI

KAJIADO

NAMANGA

MURANGA

NYAMIRA SIAKAGO

KERICHO

AMAGORO

NANYUKI

BUNGOMAELDORET

GARISSA

MARALAL

MANDERA

KERUGOYA

WUNDANYI

ISEBANIA

KILGORIS

MACHAKOS

HOMA BAY

MASALANI

OL KALOU

KAPSABETKAKAMEGA

KAPSOWAR

KABARNET

MARSABIT

MARIMANTI

KAPSAKWONY

KAPENGURIA

OLOITOKITOK

NANDI HILLS

OL JORO OROK

Legend DISTRICT HQ

PROVINCIAL HQ

Clsfd_RoadsRoadClass

AB

KenyaDistrictBounndaries

ATHI RIVER

KISUMUNORTHERNBYPASS

MERUBYPASSES

RIRONI JOMOKENYATTA INTLAIRPORT (JKIA)

ROADS TO BE IMPROVED UNDER NUTRIP

NATIONAL URBAN TRANSPORT IMPROVEMENT PROJECT

LAPSSET CORRIDOR