TANZANIA

SECOND NATIONAL SITES AND SERVICES PROJECT

Currency Equivalents

Currency Unit Shilling (T Sh)Tanzania Cent 100 = T Sh 1T Sh 1 US$0.12

US$ = T Sh 8.30

Measurement Equivalents and Abbreviations

1 meter (m) = 39.4 inches = 3.28 feet

1 kilometer (km) = 0.62 mile

1 square kilometer (km2) = 0.386 square mile

1 cubic meter (m 3 ) = 35.3 cubic feet (cu ft)

1 liter = 0.26 US gallon1 cubic meter per day

(m3/day) = 35.3 cubic feet per dayI cd - liters per capita per day1 hectare (ha) 2.47 acres

Other Abbreviations and Acronyms

Ardhi = Ministry of Lands, Housi-ng and Urban DevelopmentTreasury = Ministry of Finance and PlanningECC = Economic Committee of CabinetTHB = Tanzania Housing BankNBC = National Bank of CommerceSIDO = Small Industries Development OrganizationRDD Regional Development DiriectorADDD = Assistant District DevelDpment DirectorRLDO = Regional Land Development OfficerDLDO = District Land Development OfficerTANESCO = Tanzania Electricity Supply CompanyMCH = Mother and Child HealthCCM = Chama Cha MapinduziSSI = Small Scale Industry

Government's Fiscal Year: July 1 - June 30

FOR OFFICIAL USE ONLY

TANZANIA


TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS .................. ... ... ... . i-iii

I. INTRODUCTION .. *.................................... 1

II. BACKGROUND ......................... ............ 2

A. The Urban Sector ..... ......................... 2B. The National Sites and Services Program ....... 5

III. THE PROJECT .. ... ........ ...... 8

A. Objectives .................... ... .. 0..................... 8B. Main Components ..... ................... ....... 8C. Detailed Features 9.......................... 9D. Implementing Schedule ... .... .. ..... .... ....... 14

IV. COST ESTIMATES AND PROJECT FINANCING .............. ... 15

A. Cost Estimates .............. ......... ........ 15B. Financing .................... 15C. Land Rent and Service Charge .................. 19D. Accounts and Auditing ...................... 20E. Procurement and Disbursements ................. 20

V. ORGANIZATION AND MANAGEMENT ....... . . ...................... . 22

A. Ministry of Lands, Housing andUrban Development (Ardhi) .................. 22

B. Regional and District Administration .......... 23C. Tanzania Housing Bank (THB) ................... 24D. Small Industries Development

Organization (SIDO) ........................ 25

VI. PROJECT JUSTIFICATION AND ECONOMIC BENEFITS ........ 27

VII. AGREEMENTS REACHED AND RECOMMENDATIONS ............. 30

This report was prepared by the mission, Ms. Nassau, Ms. Garrity andMs. Mayne-Nicholls.

This document hIs a etricted distribution aed may be usd by recipients only in the peirfamsmeof their olcWl dutie. Its contents may not otherwie be disclosed without World Bnk uthorization.

ANNEXES

ANNEX 1 Squatter Settlements and Project Towns

ANNEX 2 Community Facilities

ANNEX 3 House Improvement and Construction Loans Program

ANNEX 4 Small-Scale Industry Program

ANNEX 5 Implementing Agencies and Project Organizationand Management

ANNEX 6 Design Standards and Cost Estimates

ANNEX 7 Cost Recovery of Urban Infrastructure

ANNEX 8 Technical Assistance

ANNEX 9 Economic Evaluation:Squatter Upgrading and Surveyed Plot Program

ANNEX 10 Monitoring and Evaluation

ANNEX 11 Estimated Schedule of Disbursement

CHART 1

IBRD 16747 Implementation Schedule

MAPS

IBRD 12572 Tanzania - Project TownsIBRD 12573 Dar es Salaam - Site LocationsIBRD 12574 Tanga - Site LocationsIBRD 12575 Tabora - Site LocationsIBRD 12576 Iringa - Site LocationsIBRD 12577 Morogoro - Site LocationsIBRD 12595 Typical Upgrading Layout - Hanna Nassif (DAR)

SUMMARY AND CONCLUSIONS

i. The proposed project is the second IDA financed project in supportof Tanzania's National Sites and Services Program. Like the currently on-goingfirst project (Credit 495-TA), it is aimed at enhancing the living conditionsof the urban poor through basic improvements in their environment and creationof economic opportunities. The most important objectives underlying IDA sup-port of Tanzania's urban sector are (a) to demonstrate a replicable approachwhich responds effectively to the shelter and employment problems of theurban poor and (b) to strengthen the institutional and financial capabilityof Government to implement such an approach on a continuing basis.

ii. Tanzania's cities are characterized by rapid population growth,a deteriorating employment situation, and proliferation of inadequatelyserviced squatter settlements. The urban population, currently growing atan estimated 9% per annum, increased from 5% to about 9% of the nationaltotal during 1967-76, with the bulk of the growth contributed by migrantsfrom the countryside. The economic situation of urban residents has beenworsening. Average household cash incomes in urban areas fell by about50% between 1969 and 1976 as unemployment more than doubled to its presentlevel of about 17% of the urban labor force. The rapid growth of the citieshas not been planned or accompanied by a corresponding expansion of urbanservices. Consequently, between 40 to 70% of the residents of Tanzania'smain towns are now living in uncontrolled, inadequately serviced squattersettlements.

iii. Prior to the adoption in 1972 of the National Site and ServicesProgram as official policy and the subsequent implementation of the programwith IDA assistance, little was done to improve the living conditions ofthe urban poor. Government generally ignored the squatter population orwhen political pressure mounted, razed specific squatter settlements andrelocated the residents. Low-cost housing programs sponsored by Governmentwere inadequate and, because of high standards, priced the poorer groups outof public housing.

iv. Under the first project, about 9,000 sites and services plotsand improvements affecting 9,000 houses in existing squatter settlementsare being provided to benefit approximately 160,000 low-income residentsin Dar es Salaam, Mwanza and Mbeya. The execution of the physical aspectsof the first project has been proceeding satisfactorily. There are, however,deficiencies in the social aspects, financial management and cost recoveryarrangements in the project. The second project will address these defici-encies in the context of broader, sector-wide policy measures.

v. The project components to be financed under the proposed IDA creditare:

(a) Squatter Upgrading: Provision of secure tenure and basicurban infrastructure including water supply, drainage androads to about 16,000 houses in existing squatter neighborhoods;

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(b) Basic Surveyed Plots: Preparation of about 19,000 sur-veyed plots in planned residential layouts to be allocatedto low-income applicants in the five towns;

(c) Community Facilities: Primary schools, health and nutritioncenters, and markets for each of the neighborhoods to beupgraded;

(d) House Improvements and Construction Loans: Continuationof the lending program established under the first projectfor building materials loans for housing improvements inupgrading areas and construction of new housing or surveyedplots;

(e) Small-Scale Industry: An experimental program of assistanceto small-scale industries in Tabora and Tanga. The programwould provide infrastructure for industrial clusters, creditfor equipment, and management and technical assistance toselected small enterprises;

(f) Equipment and Vehicles: Provision of the equipment andvehicles needed for project implementation, the surveyedplot program, maintenance and garbage collection; and

(g) Technical Assistance: Financing for consultants' servicesfor detailed engineering and construction supervision;training of Tanzanian personnel in executing agencies;management support; monitoring and evaluation of the project;a study of pricing and taxation of land and shelter servicesin urban areas; and preparation of a follow-up project.

vi. The project has been designed with minimal standards that willmake it affordable by very low-income households. The estimated cost ofinfrastructural improvements in the squatter upgrading areas is T Sh 3,500(US$422) per plot. For surveyed plots, the cost per plot (including pre-paration, surveying and provision of minimal access to water) is approximatelyT Sh 210 (US$25). With household size averaging nine persons, the per capitacosts are approximately T Sh 390 (US$47) and T Sh 23 (US$3) respectively.

vii, Based on preliminary engineering of the upgrading sites, totalproject costs are estimated at T Sh 243 million (US$29.3 million) includ-ing T Sh 6 million for land acquisition. The direct and indirect foreignexchange content of the project cost will be approximately 36%. It is proposedthat IDA finance 70% of the cost of infrastructure and community facilities,75% of the technical assistance costs and 100% of the costs for equipment,vehicles and imported cement for THB's Materials Loans Program. The balancewould be financed by Government and THB. Accordingly, an IDA credit amountingto T Sh 100 million (US$12 million) is recommended.

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viii. The Ministry of Lands, Housing and Urban Development (Ardhi) willcontinue to be the principal executing agency, responsible for the infra-structure works and day-to-day management of the national program. Ardhi willbe assisted in this task by the respective regional administrations and otherconcerned ministries and parastatals. Ardhi's planning and execution capa-bilities will be enhanced through actions agreed by Government as well astechnical assistance provided under the project. The Tanzania Housing Bank(THB) and the Small Industries Development Organization (SIDO) which will beresponsible for the housing loans and small industries components will alsoreceive technical assistance support.

ix. The project will be executed over four and a half years, 1977-1981.Contracts for civil works totaling T Sh 59.7 million (US$7.2 million beforecontingencies) will be awarded after international competitive bidding inaccordance with Bank/IDA Guidelines for Procurement. Local contractors willbe allowed 7.5% preference over foreign bidders. Lesser works comprisingmainly community facilities worth about T Sh 7.8 million (US$0.95 million)will be awarded on the basis of local competitive bidding in accordance withGovernment procedures acceptable to the Bank. Equipment, vehicles and cementworth T Sh 16.6 million (US$2.0 million) will be procured according to Govern-ment' s normal procedures acceptable to the Bank.

x. The proposed project will benefit more than 315,000 low-incomeurban dwellers (26% of Tanzania's urban population in 1976) providingimprovements to over 40% of the existing squatter houses and satisfying75% of the need for new plots in five major towns. With the benefits beingprovided under thd first project, the population affected would be some475,000 people--almost 40% of the country's current urban population. Ex-pected benefits of the project include (a) increased productivity resultingfrom improvements in living conditions and health standards; (b) increasedemployment; and (c) increased housing production. Technical assistanceprovided under the project is expected to result in significant improvementin public policies of urban taxation for land, shelter and infrastructure;employment (through assistance to the urban informal sector); and health(preventive health care and nutrition). The economic rate of return isestimated at 23% for the squatter upgrading and surveyed plots programs.

xi. The project is suitable for an IDA credit of US$12 million onstandard IDA terms subject to conditions set forth in para 7.01.

TANZANIA


I. INTRODUCTION

1.01 The project for which the Government of Tanzania is seeking anIDA credit is the second phase of the National Sites and Services Program.The first Tnase, involving new serviced plots and improvements in squattercommunities in Dar es Salaam and two regional centers, is being implementedwith the assistance of an IDA credit approved in 1974 (Credit 495-TA).The second project will extend the program to four other regional centersas well as to new sites in Dar es Salaam. The primary emphasis of the projectwill be on upgrading; support will also be provided for surveying plotswhich will be serviced as settlement occurs. Implementation capabilitiesdeveloped in the first project will be expanded and innovations introducedin project design based on lessons of the first project.

1.02 The Ministry of Lands, Housing and Urban Development (Ardhi) beganplanning the project in 1975 using project preparation funds included inthe first credit. Missions visited Tanzania in March and July 1976 to assistand review project preparation and in October 1976 to appraise the project.This report is based on the findings of the appraisal mission consistingof Messrs. P. Patel (Chief of Mission), C. Goldfinger, B. Rush, D. Coyaud,and Ms. N. Barry (Bank), and Messrs. G. Hughes and F. Temple (Consultants).

II. BACKGROUND

A. The Urban Sector 1/

Urbanization Trends

2.01 Although one of the world's poorest, least urbanized countries,Tanzania has been experiencing a rapid rate of urbanization. The urbanpopulation is currently estimated to be growing at 9% per annum and theproportion of the population living in urban centers increased from 5% in1967 to about 9% in 1976. Both census and survey data indicate that therapid growth of Tanzania's towns has been the result of migration ratherthan natural population increase. Dar es Salaam (590,000) is by far thelargest city in the country, followed by Tanga and Arusha (94,000 each).Data on the growth of Tanzania's urban centers are presented in Annex 1and their locations are indicated in Map IBRD 12572.

2.02 Unplanned squatter settlements have proliferated. Official esti-mates of the number of squatter houses in Dar es Salaam imply an averageannual increase of 16.6% during 1963-73 and a growth rate of 24% per annumduring the last half of the decade. Between 40% and 70% of the residentsof Tanzania's main towns now live in squatter settlements. Although thesesettlements are not dense by international standards and much of the housingis sound or improvable, the infrastructure in these communities is ofteninadequate or completely lacking, and their residents have less access tocommunity facilities than other urban dwellers.

2.03 Another consequence of the rapid growth of Tanzania's towns hasbeen an increase in urban unemployment. Population growth has considerablyexceeded the creation of new employment opportunities. Regular wage employ-ment, which accounted for just over two-thirds of the employment opportunitiesin the urban sector in 1969, grew less than 6% a year during 1969-1976.Average real earnings for this type of employment declined slightly duringthis period. Informal opportunities (casual and self-employment) grew at some11% per annum, but because low-income self-employment accounted for much ofthe growth, average real earnings in this sector were more than halved. Asa result of these changes and growth in the labor force, average per capitareal earnings fell by about 50% during this period and unemployment rose fromapproximately 8% to 17% of the labor force in urban areas. Furthermore, urbandwellers' purchasing power has been sharply reduced by increases in producerprices for key agricultural goods as well as inflation. Data for 1976 suggestthat between one-third and two-fifths of Tanzania's urban households havecash incomes below the minimum wage of T Sh 380 (US$46) per month.

Urban Sector Initiatives During the 1970s

2.04 Tanzania's socialist strategy of economic development, articulatedin the 1967 Arusha Declaration, focuses primarily on agriculture and emphasizes

1/ More information on the sectoral background can be found in chapter II ofthe appraisal of the first project (Report No. 337a-TA of May 12, 1974).

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social equality and self-reliance. Implementation of this strategy hasled to more equitable income distribution but has also affected the overallrate of economic growth. The villagization program contributed to a declinein agricult:uzal production; commitment to costly social programs such asuniversal water supply and universal primary education strained public re-sources, while nationalization of key economic sectors limited the flowof private investment funds. Administrative decentralization initiated in1972 resulted in overextension of scarce administrative resources. Thesedifficulties were exacerbated by the global recession of 1974. Faced with theeconomic crisis in 1974, the Tanzanian Government took a series of drasticmeasures aimed at increasing agricultural production, reducing the growthof recurrent expenditures, and freezing wages and salaries. As a result ofthese measures, agricultural production increased and economic prospectsimproved. Nevertheless, budgetary and manpower constraints on public policiesare likely to remain severe in the foreseeable future.

2.05 The national development strategy assigns low priority to urbanareas and the urban sector. Since a comprehensive urban policy has not asyet been explicitly formulated, specific measures and initiatives affectingthe urban sector have evolved mainly as a result of broader policy actions.Four aspects of the urban sector have been particularly affected: urbanrents and incomes; land development and housing programs; industrial andadministrative decentralization; and urban administration and finance.

2.06 Urban Rents and Incomes. In order to reduce the gap between urbanwage earners and rural farmers, the Government has tried to restrain wageincreases for better-paid workers and raised producer prices for key cashcrops. As a part of this policy, since 1969 rents paid by public sectoremployees living in publicly owned housing have been determined on the basisof their incomes rather then the characteristics of the units. The policy hashad the effect of redistributing real incomes more equitably among publicsector employees. Since Government is the country's main employer, the policyalso has had a considerable impact on the urban income distribution. Thenationalization of rental buildings and the imposition of rent controls furtherequalized the distribution of wealth in urban areas, but also discouraged newprivate investment in construction and adequate maintenance of existingbuildings. As a result of pricing, income and taxation policies, the esti-mated differential in consumption expenditure between the highest and lowestpaid public sector employees has been reduced from 60 to 1 at Independence(1961) to 13 to 1 today.

2.07 Land Development and Housing Programs. The Government's presentshelter policies 1/ emphasize improvement of existing squatter settlementsand development of new residential areas through surveyed plot programs. The

1/ Based on Ardhi papers on National Housing Policy and on the National Sitesand Services Program, designed to meet the shelter needs of 13 regionalcenters over a ten-year period. These papers were endorsed by theEconomic Committee of the Cabinet (ECC) in 1972.

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improvement program provides security of tenure in existing settlements andbasic environmental improvements. The surveyed plots program uses limitedcapital resources to provide a planned context for self-help residentialconstruction, offering an affordable alternative to squatting. 1/ Althoughno services (except minimal access to water) are provided initially, theregional authorities are expected to respond to demands for services generatedby settlement on the plots.

2.08 Industrial and Administrative Decentralization. The Second Develop-ment Plan (1969-74) designated eight towns outside Dar es Salaam for preferen-tial industrial development. The third plan (1975-80) currently under reviewwill emphasize the development of all 20 regional capitals. However, thelack of transport and communication facilities in peripheral regions continuesto favor industrial location in established growth centers.

2.09 Administrative decentralization appears to have been more success-ful. Initiated in 1972, it shifted 40% of the central establishment fromDar es Salaam to the regions. In 1973, the Government decided to move thenational capital to Dodoma and the office of the Prime Minister has alreadybeen transferred there. Given the huge investment required to develop accessand services infrastructure and the severe budgetary constraints, it is doubt-ful whether the original construction program can be completed on schedule.

2.10 Urban Administration and Finance. Far reaching changes in thepolitical-administrative structure have been introduced by the decentraliza-tion reform of 1972. 2/ Independent local authorities were abolished andreplaced by districts and subdistricts grouped into regions. Although somedistricts and subdistricts correspond roughly to urban areas, there is now nourban government per se. While substantial decision-making powers weretransferred to the regions, the public finance system was centralized. Sinceall fiscal revenues are now collected and decisions a-bout regional budgetaryallocations are made by the Treasury, the link between revenue collection andexpenditure in urban areas has been broken.

2.11 Tanzania's fiscal system uses taxation to redistribute incomebetween income groups and between rural and urban areas. The tax structure ishighly progressive and favors general rather than specific forms of taxationin order to minimize differences in tax burdens due to location. An effort toreduce the share of local taxation in total tax intake has been undertakensince 1969. In line with its general policy, in 1974 Government abolished avariety of local property taxes and rates, replacing them with a single levy,the Land Rent and Service Charge. This is an annual charge equal to 10% ofthe economic value of unimproved land as determined periodically by Ardhivaluers (See para 4.08)

1/ Government owns the land needed for implementation of this program as aresult of the nationalization of land in 1963.

2/ For an extensive discussion of decentralization see Bank Report No. 587-TA"Tanzania: Fiscal Aspects of Decentralization." (See also Annex 7).

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2.12 Since the revenues from the Land Rent and Service Charge are notearmarked for any specific use, their level is not determined by urban infra-structure expenditure needs but by general budgetary considerations andby the pace of Ardhi's valuation. The latter is slow, hampered by a lackof resources and manpower and somewhat cumbersome valuation methods. Thereare also delays in transmitting updated valution rolls from Ardhi to Treasury.Furthermore, because of the equivocal wording of the Land Rent and ServiceCharge Act of 1974, the charge has not been levied at all in squatter areas.Consequently, the potential revenues of the charge are considerably under-estimated. The collection of charges is poor: only slightly more than halfof the estimated revenues are being collected and arrears are large (see Annex7).

2.13 While the 1972 reform specifically sought to transfer public ex-penditures from urban to rural areas, its impact on the former was accentuatedby the general budgetary crisis and lower than expected yield of subsequentlyintroduced new levies such as the Land Rent and Service Charge. The resultwas a heavy decline in the resources available to urban areas in absolute aswell as in real terms. The lack of funds for maintenance and new infrastruc-ture investment caused a large-scale deterioration of urban infrastructure,necessitating stop-gap remedial measures. Recently, for example, the Ministryof Works had to undertake a large program (T Sh 25 million or US$3 million) ofroad repairs in Dar es Salaam.

2.14 In recent months the Government has become increasingly aware ofthe shortcomings of the present administrative and financial arrangementsfor urban areas and the Economic Committee of the Cabinet (ECC) has initiateda review intended to produce recommendations to alleviate the problems con-fronting the towns. As a part of the review, Ardhi has undertaken a studyof the Land Rent and Service Charge to be financed under the project whichwill produce recommendations for improving the policy of taxation of urbanland, shelter and infrastructure (para 2.21 and 4.08-4.09).

B. The National Sites and Services Program

Review of the First Project

2.15 The performance of Bank projects in Tanzania has been uneven,hampered by shortage of local administrative and technical manpower and severebudgetary constraints. Given this context, the performance of the firstproject has been adequate and in many respects quite satisfactory. A workableapproach to low-cost, low-standard shelter has been developed. The executionof physical infrastructure for the sites and services and squatter upgradingareas has been carried out on schedule. The design and implementation capa-bility of Ardhi has been strengthened. In the second project, this approachwill be continued and the scope of the project will be expanded to includeemployment and income generation for poor urban dwellers. The design of spe-cific project components will be modififed to overcome deficiencies. To assistArdhi, greater emphasis will be given to the financial management and social

aspects of project implementation, where problems were encountered in thefirst project. The issue of plot charges will be addressed in a broadercontext of public policies of taxation of urban land, shelter and infras-tructure.

2.16 The composition of the second project will emphasize squatterupgrading and provision of surveyed rather than serviced plots. This willpermit extension of the benefits of the project to a larger number of house-holds in more towns so that more families in lower income groups can bereached. The proposed project will benefit almost twice as many people asthe first project, although infrastructure expenditures in the two projectswill be approximately equal in real terms.

2.17 The standards for the education and health community facilititesoriginally planned for the first project were higher than facilities currentlybeing provided elsewhere. In the second project, plans for the constructionof community education centers, including workshops, assembly hall and dis-pensary as well as classroom, have been revised and emphasis is being givento the provision of classrooms (para 3.08). Medical facilities in the firstproject have high capital and recurrent costs and reinforce the emphasistraditonally given to curative care in Tanzania's urban areas. The proposedproject will emphasize preventive care at Mother and Child Health Clinics(MCHs) and support an MCH extension program focused on nutrition and environ-mental sanitation (see para 3.09).

2.18 Early experience with house construction and improvement loansindicated that prdject allotees were discouraged by THB's application pro-cedures and fees and that THB was reluctant to incur the risks associatedwith lending to relatively poor households with informal sources of income.To reduce bureaucratic barriers to lending THB agreed to open part-timeoffices in project areas and to reduce valuation fees for project applicants.Furthermore, in order to make loans accessible to applicants from upgradingareas, THB has begun applying lending procedures used in its rural operationswhich do not require mortgages as security. Another problem confronting pros-pective low-income households desiring to build or improve their houses islimited access to building materials, particularly cement, at reasonableprices. In the second project materials supply through on-site depots will be

introduced to complement cash lending (see para 3.10-12).

2.19 Implementation of the first project was handled by Ardhi's Sitesand Services Section in collaboration with regional administrations. Inthe second project, this arrangement will be continued and an effort willbe made to improve specific aspects of implementation. The financial man-agement capability of Ardhi will be strengthened and more emphasis will begiven to social aspects of project implementation, particularly in communitydevelopment and assistance to project beneficiaries. A more formal, system-atic approach to coordination between Ardhi, regional administration andlocal project management will be introduced (see para 5.02-5.08).

2.20 Cost recovery has been a critical problem in the first project.At the time of appraisal of that project Government did not have any coherentpolicies or guidelines on cost recovery that could be reconciled with theBank's requirements. A special formula was therefore worked out to be appliedexclusively to project areas. Charges calculated according to this formulawere intended to recover the full costs of on-site infrastructure over 25years at 9% interest. This proved difficult to implement because the level ofcharges set by the formula were much higher than in comparably servicedadjacent areas where plot charges are grossly under-assessed by the Land Rentand Service Charge Act of 1974 (para 2.11). This situation resulted inpolitical controversy and allottees refused to pay the fees required to obtaintitle to their plots. The Government therefore requested an amendment of thecredit agreement in order to bring charges for project areas within thepurview of the Land Rent and Service Charge Act. Plot charges resulting fromthis amendment will allow recovery of 75% of the capital costs assignable toproject beneficiaries amortized over 25 years at 9% interest. The proposedamendment was approved by IDA in February 1977 (see Annex 7).

2.21 In the second project, the question of plot charges will be addressedin the broader, sectoral context of a review of fiscal policies toward urbanland, shelter and infrastructure. A reform of the Land Rent and Service Chargewill be undertaken to improve its effectiveness, equity and yield. The long-term goal of the reform will be to increase the revenues from the urban sectorto a level that would cover investment and operating expenditures for urbaninfrastructure. An in-depth study of the Land Rent and Service Charge wasinitiated in February 1977. At negotiations the inception report of the studywas reviewed and short-term measures as well as guiding principles for the re-form of the Land Rent and Service Charge were agreed upon (see para 4.08-4.11).

Selection of Project Towns

2.22 The first project included components in Dar es Salaam and twoup-country towns, Mwanza and Mbeya. Ardhi's principal criteria in selectingtowns for the second project were the magnitude of the squatter settlementsand demand for plots as determined by the number of applications at theDistrict Land Offices. Other factors such as potential compensation costs fordisplaced squatters, direct requests from regions, geographical balance andavailability of assistance from other sources were also given consideration.

2.23 On the basis of Ardhi's recommendations, Dar es Salaam and fourmore up-country towns are included in the second project: Tanga, Morogoro,Tabora and Iringa. The five towns had an estimated combined populationof 860,000 in 1976, 60% of the total urban population of Tanzania. The numberof squatter houses in these towns is estimated at 51,500, about 73% of theestimated national total of urban squatter housing. The two projects willserve seven of the ten largest urban centers in mainland Tanzania, containing70% of the national urban population and 84% of the squatter housing.

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III. THE PROJECT

A. Objectives

3.01 The project will continue IDA assistance to Tanzania's urban sectorstarted under the National Sites and Services Project (Credit 495-TA). Basedon the experience gained in the first project, this project will providefinancial and technical support necessary for the implementation of thecountry's National Site and Services Program over the next four years (1977-1981). The most important objectives underlying IDA assistance to Tanzania'surban sector are: (i) to demonstrate a replicable approach which respondseffectively to the problems of improving existing slums and controlling rapidnew growth; and (ii) to strengthen the institutional and financial capabilityof the Government to implement such an approach.

3.02 The project will provide basic infrastructure and community facil-ities to 160,000 low-income residents of eleven squatter areas in five towns.The program of surveyed plots for low-income housing will provide about 19,000plots satisfying 75% of the estimated five-year demand for new plots inproject towns. House improvement and construction loans, on-site technicalassistance for self-help housing consolidation and support for communitydevelopment will complement the provision of infrastructure and communityfacilities. The project will also initiate a pilot program of assistance tosmall-scale industry in the urban informal sector. Technical assistanceprovided under the project will support detailed engineering and constructionsupervision; training of Tanzanian personnel; management support for theimplementing agencies; preparation of a follow-up project; and monitoring andevaluation. Assistance will also be provided to Government's efforts torationalize its policies of taxation of urban land, shelter and infrastructureand to increase its revenues from the Land Rent and Service Charge.

B. Main Components

3.03 The project comprises the following interrelated components inDar es Salaam, Tanga, Tabora, Morogoro and Iringa:

(a) Squatter Upgrading: Provision of secure tenure and basicurban infrastructure including water supply, drainage,footpaths, roads and street lighting to about 15,800houses in existing squatter neighborhoods;

(b) Surveyed Plots: Preparation of about 19,000 surveyed plotsin planned residential layouts to be allocated with legaltitles to low-income applicants in the five towns;

(c) Community Facilities: Provision of community facilities in-cluding primary schools, health centers, and markets to theupgraded neighborhoods;

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(d) House Improvement and Construction Loans: Assistanceto the THB for continuation and improvement of the lendingprogram established under the first project for buildingmaterials for self-help housing improvements in upgradingareas, construction of new housing on surveyed plots, andconstruction of worksheds for the small-scale industryprogram;

(e) Small-Scale Industry: An experimental program of assistanceto existing and new small-scale industries in Tabora andTanga. The program would provide serviced sites for about150 workshops, credit for equipment and technical assistanceto selected small enterprises, cooperatives and artisans;

(f) Equipment and Vehicles: Provision of the equipment andvehicles needed for project implementation, the surveyedplot program, maintenance and garbage collection; and

(g) Technical assistance: Financing for consultants' servicesfor detailed engineering and construction supervision;training of Tanzanian personnel in executing agencies;management support; monitoring and evaluation of the project;a study of pricing and taxation of land and shelter servicesin urban areas; and preparation of a follow-up project.

C. Detailed Features

Squatter Upgrading

3.04 A simple and inexpensive approach to infrastructure upgrading,developed and tested under the first project, will be applied in the proposedproject with appropriate modifications. Selection of viable neighborhoodswas determined by several criteria such as location, economic and transportlinkages, technical feasibility and need for services (see Annex 6). Thesites selected for upgrading are identified on maps of each project town (seeMaps IBRD 12573-7).

3.05 Functional standards for infrastructure, described in Annex 6, areas low as possible initially so that the per family costs can be affordedby households at the lower end of the income scale (see Annex 6, Table 4).However, provision is made in the planning for future upgrading of standardsas household incomes increase. Layouts and preliminary engineering for allsites have been completed by consultants (see IBRD Map 12595 and Annex 6,Table 5, for typical examples). Each site will have a network of collector,primary, secondary and pedestrian roads. Collector roads will be macadam sur-faced, as required for bus traffic, whereas primary roads will be gravelled,providing vehicular access to the neighborhoods. Secondary and pedestrianroads servicing inner areas will be compacted dirt roads. Carriage-way widthson the surfaced roads will be kept to a minimum, although the rights-of-way

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will be wider for future upgrading. Water kiosks with two or four standpipeswill provide one standpipe for every 50-70 houses within a maximum walkingdistance of 250 m. Sewage disposal will be provided by owner-installed tra-ditional pit latrines where soil conditions permit. Where groundwater condi-tions are unsuitable, house owners will be provided technical assistance andTUB loans to install alternative drycell systems. The initial power distri-bution system will provide street lighting on the main roads and electricityfor the community facilities and small industries workshops. The drainagesystem, designed to carry storm water and domestic waste water other than fromlatrines, consists of open earth ditches along roads. Garbage disposal serv-ice will be provided in the Dar es Salaam sites (where the problem is mostacute) by trucks financed under the credit.

Surveyed Plots

3.06 Under the program for providing new plots for low-income housingArdhi will prepare sufficient surveyed sites to satisfy 75% of the estimateddemand in the five towns (see Annex 1). The sequence of planning and imple-mentation of the program would be as follows:

(a) site selection (see Annex 6 for criteria);

(b) layout design (see Annex 6 for criteria);

(c) site clearance and surveying of plots;

(d) installation of skeletal water supply through standpipes;

(e) allocation of plots (see Annex 5 for criteria);

(f) settlement and house construction by allottees; and

(g) provision and upgrading of basic infrastructure instages.

Financial and technical assistance for (a) - (f) will be included underthe project; (g) would be initiated by residents with assistance from regionalauthorities and Ardhi.

3.07 The layouts for surveyed sites will be designed for the same even-tual standards as serviced sites (Annex 6), but unlike the typical sites andservices project, all on-site services except water supply will not be sup-plied until after settlement has occurred. This approach will enable theproject to reach a greater proportion of the target population because of thelower initial capital requirements. It affords one of the few practicaloptions available for policy action before squatting occurs.

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Community Facilities

3.08 In each of the communities to be upgraded a careful evaluationof the needs for community facilities over and above those existing wasmade to determine the range and number of facilities to be included underthe project. The criteria used in the evaluation are discussed in Annex2 and standards and cost estimates are shown in Annex 6. Twelve primaryschools will be constructed to meet the needs of project areas in conformitywith Tanzania's program of universal primary education. The schools will bebuilt to minimum standards and provide only classrooms in view of the severeproblem of recurrent financing and stated preference of local educationofficers.

3.09 Health facilities under the second project will be designed witha greater emphasis on preventive care and will focus on the groups most inneed of it: mothers and small children. Two new Mother and Child HealthClinics (MCHs) and a medical outpost will be constructed and three existingMCHs upgraded. The Ministry of Health will prepare guidelines to developan urban MCH program similar to the existing MCH program for rural areas.Particular attention will be given to extension work in which nutritionofficers and nurses will visit the homes of families with malnourishedchildren and give courses in the community on nutrition and environmentalsanitation. The Tanzanian maternal and child health care program includespre- and post-natal care for the mother, immunization services, and childspacing advice and services.

House Improvement and Construction Loans

3.10 The Tanzania Housing Bank (THB) will continue its lending programfor house improvement (in upgrading areas) and low-cost housing construction(in overspill and surveyed plot areas) under the second project. The programwill incorporate modifications designed to address two major problems encoun-tered in the first project: (i) availability of key building materialsto project beneficiaries; and (ii) access to credit for squatter inhabitants.

3.11 In order to improve the access to and supply of building materialsto project beneficiaries, THB will establish on-site offices and materialsdepots. Critical building materials including cement, corrugated iron roofingsheets and joinery will be stocked at the depots by THB. Most of the materialswill be purchased locally by THB using its own resources. However, due to asevere shortage, cement will be imported until 1980 when two new cement plantsin Tanzania should start production. Foreign exchange required for importingcement for the first three years is therefore included in the project. Inorder to minimize dependence on imported materials new building materials andtechniques will be introduced through demonstration houses (see Annex 3,Figure 3, for alternative housetypes to be developed).

3.12 In order to encourage lending in squatter areas THB will step uppublicity on the availability of loans in project areas and establish on-siteoffices for distribution and collection of application forms. Furthermore,lending criteria and procedures will be less stringent than those normallyemployed by THB (see para 5.12).

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3.13 Materials loans averaging T Sh 4,000 (US$482) for house improvementsin upgrading areas and T Sh 13,000 (US$1,556) for construction of new housesin surveyed plot areas will be offered to project participants (see para 4.05for terms). Borrowers will have the option of taking their loans in cashand/or vouchers redeemable at THB materials depots on project sites. Inaddition, loans for construction of worksheds up to T Sh 120,000 (US$14,500)will be offered to participants in the small-scale industry program in Tangaand Tabora. THB will finance about 90% of the projected lending out of itsown resources (see Annex 3, para 15). Consequently, the Government and IDAcontributions in this component are marginal and directed at special problems:about US$1,075,000 for importation of cement, loans for worksheds, developmentand construction of demonstration houses and staff training and equipmentnecessary to operate the lending program effectively.

Small-Scale Industry

3.14 The Small Industries Development Organization (SIDO) will administerthe experimental program of assistance to the informal sector in Taboraand Tanga included in the project. The program, described in detail in Annex4, will comprise three major elements:

(a) expansion of SIDO's management training and technicalassistance program at the regional level;

(b) financing of SIDO's hire-purchase program for productionequipment and critical raw materials for industriesselected under the project; and

(c) infrastructure for industrial clusters (to be provided by Ardhi)and provision of THB loans for building about 150 workshops andsheds.

3.15 The basic objective of this component is to increase the economicand employment potential of the project areas and to diversify their economicbase. To accomplish this, the program will build upon existing technical andmarketing skills in the informal sector. The program will provide its partici-pants with (i) assistance in management, accounting, marketing and qualitycontrol in order to help them expand their productive and marketing capabil-ities; and (ii) specialization and diversification opportunities throughsupply of new equipment. A preliminary list of new product lines to besupported by the project has been established. 1/ Their selection was basedon an analysis of local raw materials resources, technical skills of thetarget groups and demand potential within the region. Particular emphasiswas placed on strengthening industries that would serve surrounding ruralareas and on developing the building materials industry.

1/ This list will be revised on the basis of more detailed feasibilitystudies to be conducted by SIDO (see Annex 4, paras 6-7, and Table 1 and2). By September 30, 1977, SIDO will prepare at least ten feasibilitystudies for review by IDA.

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3.16 Grouping of existing enttepreneurs into larger cooperatives tofacilitate bulk purchase of in?pts, isternaZ. opecialization and joint market-ing will be encouraged. Industries that wouid benefit from concentrationof production facilities and requiring large energy and water inputs willbe encouraged to relocate in clusters near the project area. The projectwill finance basic infrastructure for the clusters and construction of shedsand worksheds (through THB). Low-cost building technique will be encouragedto minimize the repayment burden.

Technical Assistance

3.17 The project provides the following technical assistance:

(a) consultants' services to Ardhi for (i) detailed engineer-ing and design for the upgrading projects; (ii) tenderingand supervision of infrastructure; and (iii) on-the-jobtraining of engineering assistants;

(b) eight man-years of management support services to Ardhiincluding financial management (Financial Analyst), pre-paration of management manual (Management Specialist),community development (Community Development Specialist),training (Engineering Instructor) and monitoring andevaluation (Researcher);

(c) five man-years to SIDO for project implementation,management training and preparation of operating manual(Project Technical Adviser); and marketing and subprojectpreparation (Specialist);

(d) three man-months of management support for THB to assistin developing procedures for implementing the materialslending program (Procurement Consultant);

(e) eighteen man-months of consultants' services for con-ducting a study of the Land Rent and Service Charge; and

(f) six man-years of consultants' services for the preparationof future projects.

3.18 To the extent possible, the use of local consultants from withinEastern Africa will be encouraged. At least 30% of the technical assistanceneeds are expected to be met through local consultants. However, provision ismade in the project to cover potential foreign exchange costs of expatriateconsultants.

3.19 Annex 8 contains a detailed breakdown of the technical assistanceincluded in the project. During negotiations assurances were obtained thatconsultants to be employed would be acceptable to IDA and would be retained onterms and conditions satisfactory to it.

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D. Implementing Schedule

3.20 Overall project implementation will take about four years (seeChart 1). Detailed design and engineering will begin in the third quarterof 1977. Upgrading works are expected to be completed by mid-1979. Thetarget for the surveyed plot program would be reached by mid-1980. All otherconstruction components fall within this timetable. THB's lending programand project monitoring, both on-going activities, will not require IDA dis-bursements after December 1981. Accordingly, the project's closing datewill be December 31, 1981. A Project Completion Report will be submittedto IDA within three months of the closing date (see Annex 10).

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IV. PROJECT COSTS, FINANCING AND COST RECOVERY

A. Cost Estimates

4.01 The project cost is estimated at T Sh 243 million (US$29.3 mil-lion), of which about 36% are foreign exchange costs. The cost estimatesare detailed in Annex 6 and summarized in the table on the next page.

4.02 All costs are expressed in mid-1977 prices. Cost estimates forthe infrastructure component are based on preliminary engineering designsby consultants (Messrs. J. Burrows and Partners) and include a locationallowance for upcountry civil works. 1/ Other costs are appraisal missionestimates based on data provided by the agencies concerned. Physical con-tingencies of 15% on civil works have been included for infrastructure,community facilities and demonstration houses. In accordance with Bankguidelines, price escalation for civil works is based on estimated inflationrates of 10% in 1976 and 9% in 1977, 1978, and 1979. Price escalation forequipment and services is based on estimated inflation rates of 8% in 1976and 7.5% in 1977, 1978, and 1979.

4.03 Equipment and materials imported directly for the project areassumed exempt from custom duties and taxes. However, some equipment andmaterials will be purchased in the local market and hence would be taxed.The import duties and sales taxes for locally purchased materials andequipment are estimated at T Sh 5 million (US$0.6 million) or 2% of thetotal project cost.

B. Financing

4.04 Of total estimate project costs, about 40% would be financed withproceeds from the proposed IDA credit of US$12 million to cover 100% of theforeign exchange costs as well as approximately 5% of local costs. The bal-ance of T Sh 143.4 million (US$17.3 million) would be financed by Government,of which T Sh 39 million (US$4.7 million) will be from its normal budgetary

1/ To account for the additional transportation costs and difficult workingconditions compared to Dar es Salaam (see Annex 6).

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resources and T Sh 104.5 million (US$12.6 million) from THB's own resources.The financing plan is summarized in the table below.

---------------------US$ Thousand--------------------Estimated GovernmentCost ment % THB % IDA %

1. Compensation 723 723 100.0 - - -

2 Infrastructure 7,615 2,284 30.0 - - 5,331 70.0

3. Community Facilities 1,125 338 30.0 - - 787 70.0

4. Technical Assistanceand Consultants 1,593 160 10.0 - - 1,433 90.0

5. Vehicles and Equipment 414 41 10.0 - - 373 90.0

6. House Improvement andConstruction Loans(THB) 12,311 - - 11,236 91.0 1,075 9.0

7. Small Scale IndustryDevelopment (SIDO) 1,445 145 10.0 - - 1,300 90.0

8. Contingencies 4,054 1,003 25.0 1,350 33.0 1,701 42.0

TOTAL 29,280 4,694 16.0 12,586 43.2 12,000 41.0

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PROJECT COST ESTDIATES

T Sh '000 Us$ '000 Foreign ExchangeLocal Foreign Total Local Foreign Total as % of Total

1. COMPENSATION 6,ooo - 6,0oo 723 - 723 0

2. INFRASTRUCTURE

a. Roads and Surface Water Drainage A 20,295 16,605 36,900 2,445 2,001 4,446 45b. Water Supply /1 12,226 8,151 20,377 1,473 982 2,455 40c. Electricity /1 602 1,806 2,408 72 218 290 75d. Surveyed Plots Infrastructure 1,612 1,074 2,686 195 129 324 40e. Demonstration Houses 664 166 830 80 20 100 20

Subtotal 35,399 27,802 63,201 4,265 3,350 7,615 44

3. COMMUNITY FACILITIES

a. Schools 3,922 1,307 5,229 473 157 630 25b. Mother and Child Health Centers (MChs) 1,343 447 1,790 162 54 216 25c. Markets 664 166 830 80 20 100 20d. Furniture and Equipment 1,115 371 1,486 134 45 179 25

Subtotal 7,044 2,291 9,335 849 276 1,125 25

4. TECHNICAL ASSISTANCE AND CONSULTANTS

a. Detailed Engineering 1,644 4,936 6,580 198 595 793 75b. Urban Finance Study 75 675 790 9 81 90c. Management Assistance 756 1,134 1,890 91 137 228 tod. Training 250 750 1,000 30 90 120 75e. Project Preparation 1,500 1,500 3,000 181 181 362 50

Subtotal 4,225 8,995 13,220 509 1,086 1,593 68

5. VEHICLES AND EQUIPMENT /2

a. Ministry of Lands - 640 640 - 77 77 100b. Surveyed Plots 57 510 567 7 61 68 90c. Sanitary Vehicles - 1,400 1,400 - 169 169 100d. Maintenance 623 207 830 75 25 100 25

Subtotal 680 2,757 3,437 82 332 414 80

6. HOUSE I24PROVEMENT AND CONSTRUCTION LOANS (THB)

a. Development and Promotion 310 310 620 38 37 75 50b. Materials Loans 74,100 24,700 98,800 8,927 2,976 11,903 25c. Worksheds Loans 2,070 690 2,750 250 83 333 25

Subtotal 76,480 25,700 102,180 9,215 3,096 12,311 25

7. SMALL SCALE INDUSTRY DEVELOPMENT (SIDO)

a. Management Assistance 1,142 2,218 3,360 138 267 405 66b. Hire-Purchase Program 1,173 6,647 7,820 141 801 942 85c. Infrastructure 454 356 810 55 43 98 44

Subtotal 2,769 9,221 11,990 334 1,111 1,445 77

TOTAL 132,597 76,766 209,363 15,977 9,249 25,226 36

8. CONTINGENCIES

a. Physical /3 6,358 4,419 10,777 766 532 1,298 41b. Price /4 15326 7.5 22,874 1,847 909 2,756 33

GRAND TOTAL 154,281 88,733 243.016 18,590 10,690 29 280 36

A Including location allowance at 30% of the basic infrastructure cost for Tabora, 25% for Iringa, 12.5% for Tanga and 7.5% forMorogoro.

/2 Excluding THB and SIDO.3 15% on Items 2 (with location allowance), 3abc, and 7c.

, 12% on Items 2abc, 6bc, 7c; 14% on 3abcd; and 9% on 2d, 7b (after physical contingencies).

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4.05 The Borrower will be the Government of Tanzania which will pass onthe proceeds of the proposed IDA credit to Ardhi, THB and SIDO for theirrespective project components through arrangements acceptable to IDA. ForArdhi, Treasury will channel funds for the project through Government's normalbudgetary procedures as in the first project. Ardhi in turn will makefunds available to agencies other than THB and SIDO involved in implementationof sub-components (see para 5.01). The arrangements for channeling funds werefinalized during negotiations. For THB and SIDO the terms will be as follows:

(a) THB. The funds for purchase of imported cement and workshoploans will be on-lent to THB at 3% interest over 20 yearsincluding a five year grace period. THB's terms to bene-ficiaries of materials loans for housing will be at 6%interest up to 20 years with a 1 year grace period, in ac-cordance with current terms for such loans. Workshop loanswill be at 8% over 15 years with up to 2 years grace period.Staff development and training expenditures will be madeavailable to THB as a Government contribution.

(b) SIDO. The funds for the hire purchase program will beon-lent to SIDO at 3% interest over ten years includinga three year grace period. SIDO will recover the fundsfrom project beneficiaries at 8% interest over eight yearswith up to two years grace period. SIDO's current rate ofinterest for the program is 5%. The proposed increasewill bring the rate in line with the interest rate struc-ture of the National Bank of Commerce (NBC), the mainsource of working capital credit to small-scale industry.This increase in interest rate was confirmed duringnegotiations. Funds for management training and assis-tance will be provided to SIDO through usual budgetaryprocedures, while funds for infrastructure for industrialclusters will be channeled through Ardhi.

4.06 THB will use its own funds to finance the balance of the lendingprogram for house improvement and construction totalling (before contingen-

cies) approximately T Sh 93.4 million (US$11.2 million) over five years (see

Annex 3). Incremental credit needs for working capital of the small-scale

industries, estimated at T Sh 4 million, will be covered by NBC through its

normal lending procedures. During negotiations, assurances were obtained

from THB and Government that these funds would be made available to project

beneficiaries.

4.07 Incremental recurrent expenditures for governmental agencies at

the central and regional level (excluding THB and SIDO) are estimated at

T Sh. 3.5 million (US$0.4 million) annually. During negotiations, assurances

were obtained that these expenditures would be financed through normal budget-

ary channels.

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C. Land Rent and Service Charge

4.08 Experience in the first project demonstrated the infeasibility ofcost recovery arrangements in project areas which differ from those in otherurban areas (para 2.20). Charges for other areas as applied previously didnot meet IDA criteria, which call for consistent fiscal policies to recoverthe economic cost of providing and maintaining the infrastructure. TheTanzania Government does not have a clearly articulated policy on cost re-covery in urban areas. Until 1974 legislation concerning charges in urbanareas was governed by five different ordinances. In 1974 the newly enactedLand Rent and Service Charge Act repealed previous legislation and establisheda single, consolidated charge for all urban plotholders. The basis for levy-ing charges was to be the economic value of land as assessed by Ardhi. Intheory the economic value of land should reflect the full costs of capitalinfrastructure investment and hence it should be possible to set charges at alevel sufficient to recover full costs. In practice, however, this is impos-sible under the present circumstances: valuation rolls used by Ardhi areoutdated and new land valuation is seriously behind schedule; the Land Rentand Service Charge Act itself is unclear on many of the issues involved; andthe collection machinery is not effective. The Government recognizes theseproblems and the broader need to rationalize its fiscal policy toward urbanland, shelter and infrastructure. It has already engaged a team of consult-ants to carry out an in-depth study of the Land Rent and Service Charge (para2.14 and 2.21).

4.09 The purpose of the study is twofold: (a) to analyze the existingsituation regarding the assessment and collection of the Land Rent and ServiceCharge; and (b) to propose specific measures to increase its effectiveness,yield and equity. Terms of reference for the study were agreed upon by theBank and Government during appraisal (see Annex 7, Attachment 1). The studyis expected to result in reforms that would introduce valuation methodswhich relate the level of charges to urban infrastructure investments andmaintenance expenditures, and improve valuation, collection and enforcementprocedures. The long-term goal of these reforms is to increase the revenuesfrom the Land Rent and Service Charge to a level sufficient to cover invest-ment and operating expenditures for urban infrastructure.

4.10 Detailed cost recovery arrangements for the project will be for-mulated in conjunction with the study )J. During negotiations the inceptionreport for the study was reviewed and agreement reached on short-term measures,guiding principles for the long-term reform of the Land Rent and ServiceCharge and arrangements for the cost recovery in the project. As a short-termmeasure, Government agreed to progressively introduce the Land Rent andService Charge in all squatter areas in Tanzania. This introduction will belinked to the program of house registration (see para 5.09). The charge willbe set initially at T Sh 100, which is 33% higher than the current level ofcharges in areas that have not been revalued since 1969.

1/ The study commenced on February 14, 1977.

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4.11 Specific recommendations of the study and the agreement betweenIDA and the Government on cost recovery arrangements for urban infrastructure

expenditure in the project will be guided by three main principles:

(a) self-sufficiency of the urban sector;

(b) close relationship between expenditure on and revenuesfrom urban land development and service infrastructure;and

(c) simplicity of the Land Rent and Service Charge Structure.

Recommendations of the Study will be reviewed and agreement between IDA andGovernment on level and composition of plot (house) charges as well as revision

and collection procedures for the project areas reached by December 31, 1977.

D. Accounts and Auditing

4.12 Procedures established in the first project have been revised to

overcome auditing problems. Separate project accounts would be maintainedfor all civil works by Ardhi. The Management Section of the Sites andServices Division will be responsible for maintaining accurate records and

preparing annual statements. Ardhi's Internal Auditor who reports directlyto the Principal Secretary will monitor project accounts. For the THB andSIDO components the two agencies will also maintain separate accounts for

all project expenditures in their respective components. Assurances wereobtained during negotiations that annually audited records of projectaccounts would be submitted to IDA no later than six months following the

close of the fiscal years of Ardhi, THB and SIDO.

E. Procurement and Disbursement

4.13 Infrastructure works totalling about T Sh 59.7 million (US$7.2 mil-lion) before contingencies will be procured through international competitive

bidding in accordance with Bank/IDA Guidelines for Procurement. While the

relatively small size, scattered locations and staging of the contracts makeit unlikely that foreign firms will be attracted, a number of establishedcontractors in Eastern Africa should be interested in bidding. Tenders will

be advertised in Eastern Africa and embassies of Bank member countries andSwitzerland in Dar es Salaam notified. There will be prequalifications offirms so that the Government can assess the firms' experience, financialstanding and performance on similar construction in Tanzania. Local contractswill be accorded a preferential margin of 7.5% over foreign contractors in the

evaluation of bids.

4.14 Contracts for construction of community facilities totalling T Sh7.8 million (US$0.95 million) before contingencies will be awarded on the basis

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of competitive bidding advertised locally in accordance with standard pro-cedures of the Ministry of Works and satisfactory to IDA. Efforts to attractsmall contractors from project towns will be made by grouping contracts to bewithin their range.

4.15 Equipment/vehicles totalling T Sh 16.6 million (US$2 million) willbe procured in accordance with Government's standard procedures which werereviewed at negotiations. Cement totalling T Sh 5.4 million (US$0.65 million)will be procured by international competitive bidding in accordance with Bankguidelines. Other building materials totalling T Sh 93.4 million (US$11.2million) will be procured by local competitive bidding following proceduressatisfactory to IDA. SIDO will follow its usual procedures which were reviewedat negotiations for procuring hire-purchase equipment totalling T Sh 7.8million (US$0.9 million).

4.16 Disbursement of funds from the credit would be made on the followingbasis:

(a) 70% of expenditures for civil works against paymentcertificates endorsed by consultants and Ardhi;

(b) 100% of foreign expenditures if directly imported or75% of expenditures for locally purchased furniture,equipment materials and vehicles; and

(c) 100% of foreign exchange expenditures and 75% of localexpenditures for consultant services.

4.17 In view of the urgency and importance of the Land Rent and ServiceCharge Study, Government requested approval to appoint consultants to beginthe study in February 1977. Approval of retroactive financing is recommendedfor consultants' fees paid prior to credit signing. Retroactive financing isalso recommended to cover consultants' services for detailed design andengineering from May 1, 1977. A total sum of up to US$200,000 would berequired to cover expenditures incurred for these two items from February 1 tothe date of signing.

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V. ORGANIZATION AND MANAGEMENT

5.01 Responsibility for project execution will be shared between Ardhi,

the principal implementing agency, and the decentralized administrationsin each project town. The specialized components involving power supply,housing loans and small industry will be handled by Tanzania Electric Supply

Company (TANESCO), THB and SIDO, respectively. Because of Tanzania's severe

manpower constraints, adjustments in central and local project management to

overcome problems experienced in the first project will emphasize more effec-

tive use of existing personnel rather than new recruitment.

A. Ministry of Lands, Housing and Urban Development (Ardhi)

5.02 Ardhi's Sites and Services Unit will have operational responsibility

for the planning and implementation of the project, as it did for the first

project. The unit will be restructured to strengthen its project management

and community development capabilities and its status within the Ministryupgraded. Government has already approved the proposed reorganization which

will become effective at the beginning of the fiscal year, July 1, 1977. The

project includes T Sh 1.5 million (US$0.2 million) for technical assistance to

Ardhi for the development of financial and management systems and communitydevelopment capability.

5.03 The physical planning, detailed engineering and supervision of con-

struction contracts for the infrastructure and community facilities in theproject areas will be the responsibility of the unit's Planning and Engineer-

ing Sections with assistance from consultants. The community' facilities will

be planned and designed in consultation with appropriate ministries and

regional officials. Consultants were hired to prepare preliminary engineering

designs, and detailed engineering and some supervision will also be handled by

consultants. As in the first project, the engineering consultancy contracts

will supplement on-the-job engineering training through secondment of traineesto work with the consultants. The capabilities developed through the training

program will enable the Engineering Section to assume responsibilities, such

as the engineering for community facilities and the supervision of contractors

at some sites, handled by consultants in the first project.

5.04 The Sites and Services Unit will be responsible for the overall

scheduling and coordination of the surveyed plot program. The PlanningSection will liaise with zonal and regional planning officials to select sites

and prepare layouts. The section will prepare detailed site selection and

planning guidelines as well as model layouts and as much of the planning workas local staffing permits will be done locally. The surveys will be carried

out by an Ardhi mobile survey crew based in Dar es Salaam. As part of the

reorganization of the Sites and Services Unit, the crew will be transferred to

the Surveys and Mapping Division, which is better able to provide the manage-

rial and professional support it requires.

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5.05 Management and community development capabilities relatively ne-glected during the first project will be expanded under the proposed project.Financial management will be strengthened by recruitment of a FinancialAnalyst to be financed by project technical assistance funds. In order tofamiliarize local administrators with the process of project implementation,the unit will prepare a management handbook and conduct an orientation seminarin Dar es Salaam for local officials. Community development and land officersin the unit will be responsible for the non-physical aspects of the project,including publicity, allocations, registration of squatter houses and pre-paration of titles, on-site assistance to residents in project areas, and theformation of housing cooperatives. The unit will prepare guidelines andinformation materials for the social components of the project and work withlocal officials during their implementation.

B. Regional and District Administrations

Local Project Management

5.06 Teams of local officials under the direction of Project Coordinatorsdesignated by the Regional Development Directors (RDD) will be responsiblefor local implementation. The Coordinator's responsibilities will be to planlocal project implementation with assistance from the Sites and ServicesDivision, to coordinate the activities of the various local officials involvedin the projects, and to monitor progress and submit periodic reports to Ardhi.One Site Officer (a junior official with technical skills in construction)will be appointed in each project town to assist the Coordinator and to insurea continuous administrative presence in the project communities. Other localofficials such as the relevant Land Officers and Engineers will be responsiblefor their normal administrative functions in the project areas.

5.07 Considerable attention will be given to explaining the projectto community residents and to providing on-site assistance. The Site Officerswill work closely with the new ward councils mandated by the Urban Wards(Administration) Act, 1976. Demonstration houses built in the project areaswill be used as offices by both THB and the Site Officers as well as todemonstrate low-cost building materials and techniques. Transportation willbe provided for households displaced by the improvement works to help themrelocate.

5.08 The regional and district administrations will assume responsibilityfor the recurrent operations of the community facilities and the maintenanceof infrastructure. Budgetary allocations for these services will begin infiscal 1978/79. Road maintenance has been a problem in Tanzanian cities dueto budgetary constraints. An experiment in community maintenance of roads anddrains using manual equipment to be supplied through the project will beconducted in a few project sites to be selected by Ardhi. The equipment willbe given to the local engineers who will loan it to the ward councils andprovide technical supervision.

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Allocations and Tenure

5.09 In order to provide security of tenure in the upgrading areas,titles based on house rather than plot occupation will be introduced. Thetitle form was reviewed during negotiations and revisions were agreed.The titles will be issued for five year periods and renewed automatically onexpiration. They will also specify the level of Land Rent and Service Charge,which can be revised with six months advance notice. The registration ofexisting houses in the squatter communities will be the responsibility of theDistrict Land Development Officers (DLDO's). Maps based on the most recentaerial photographs available showing the location of existing units will beprepared by the Sites and Services Division. The DLDO's will update thesemaps and work with the Site Officers and local CCM leaders to identify thehouse-owners.

5.10 The DLDO's will also be responsible for soliciting and processingapplications for the surveyed plots. A points system taking into accounthousehold income, number of dependents, employment status and length of timeon the waiting list will be used to rank applicants. The system willbe weighted to give preference to households with monthly incomesbelow T Sh 1,000 (US$120). However, because of the Government's policyof encouraging mixed-income communities and the scarcity of other housingopportunities, there will be no income eligibility limit. At negotiations theallocation system was reviewed and agreed. The existing District AllocationCommittees consisting of administrators, elected representatives and CCMofficials will select the allottees after review of ranked application filesprepared by the Land Offices. Allottees will be issued long-term leases(normally for 33 years) which can be mortgaged and serve as security for THBloans.

C. Tanzania Housing Bank (THB)

5.11 The Tanzania Housing Bank (THB) will administer the house improve-ment and construction lending component. As in the first project, the lendingprogram will be run by the Sites and Services Section of THB's OperationsDepartment. The day-to-day administration of the program will be handled byregional offices in Tabora, Tanga, Morogoro and Iringa. 1/ Expansion of THB'slending operations in squatter areas and establishment of the on-site materialsdepots will necessitate increases in THB staff at headquarters and in theregions. The addition of a Procurement Officer to manage the materials opera-tions will be particularly important. A Procurement Consultant will beappointed to design and oversee the establishment of material loans operations(see Annex 3, Attachment 1, for the terms of reference). THB has agreed tohire the additional staff necessary to implement the program. Project fundswill be provided for short-term training for the staff involved in the program.

1/ The THB Sites and Services Section will assume the day-to-day managementof Dar es Salaam program.

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5.12 For the loans in the surveyed plot areas, THB will apply its normallending procedures. For loans in the squatter upgrading areas, lendingprocedures will be patterned after THB's rural lending program. The majordifferences between the two types of loan are: I/

(a) loans in squatter areas do not have to be secured by mortgages;

(b) THB does not charge valuation fees for such loans; and

(c) loans in these areas can be made for smaller amounts forpartial home improvement.

In order to reach the target population more effectively, part-time siteoffices will be established in project areas for distribution and receptionof loan applications. Depots for storage and distribution of materials will bebuilt in Dar es Salaam, Tabora and Morogoro. In Iringa and Tanga, storagespace will be leased. THB will offer standard house-type plans (see Annex 3,Figure 3) to prospective borrowers and build demonstration houses in theupgrading areas.

D. Small Industries Development Organization (SIDO)

5.13 The small-scale industry (SSI) program will be implemented by SIDO,the parastatal responsible for assisting SSIs in Tanzania. Established in1973 under the Ministry of Commerce and Industry, SIDO has set up an extensionservice in each region, usually staffed by a Promotion Officer, an Economistand an Engineer. SIDO operates a hire-purchase program for equipment and rawmaterials, eight production-cum-training centers and an industrial estate.

5.14 SIDO will hire a local Project Implementation and Training Coordina-tor and a Project Economist for each project town. The Coordinator will beresponsible for selecting and providing assistance to participants in thehire-purchase program and for coordinating and supervising the industrialcluster and network schemes. Cooperatives, partnerships, sole artisans andDistrict Development Corporations would be eligible for SIDO support. TheCoordinator will also organize and implement apprenticeships, exchanges,courses and individual training in accounting, technical skills, market organ-ization and cooperative organization. The Project Economist will preparefeasibility studies and financial packages and insure links between projectparticipants and lending institutions--NBC (working capital), THB (sheds) andSIDO's hire-purchase program (equipment)--facilitating the processing andrepayment of credit.

1/ See Annex 3.

- 26 -

5.15 Consultants, probably from outside Tanzania, will assist in develop-ing management training programs, initiating the industrial clusters and net-works and, if necessary, assisting in subproject preparation. Two ProjectTechnical Advisers will spend up to two years in Tanga and Tabora assisting inthe initiation of the clusters and networks and development of trainingprograms. The consultants will also develop an operating manual for this kindof program which could then be applied in other regions. Additional consultingassistance will be made available for subproject preparation, market organiza-tion and financial management as needed.

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VI. PROJECT JUSTIFICATION AND ECONOMIC BENEFITS

6.01 The project is expected to generate a wide range of direct benefitsto more than 315,000 low-income urban dwellers, some 26% of the total urbanpopulation of Tanzania. Provision of essential infrastructure, regulariza-tion of tenure and supply of credit for house improvement aim at improvingliving conditions for some 160,000 inhabitants of squatter settlements.Additional schools, market and health facilities will raise the standards oftheir community facilities. The project will also meet the demand for newshelter by providing 19,000 new surveyed plots.

Institutional and Sectoral Objectives

6.02 In addition to direct benefits to a significant proportion oflow-income urban dwellers of Tanzania, the proposed project will also con-tribute to the development of more effective urban shelter policies and tostrengthening public institutions responsible for their implementation. Theproject will further demonstrate the feasibility and replicability of alow-cost approach to upgrading of squatter settlements. The surveyed plotprogram of the project will introduce and test a novel response to the demandfor new plots, which combines minimal infrastructure investment with a plannedresidential framework for building low-cost shelter. If successful, theprogram will reduce the proliferation of squatter settlements and allow morerational planning and provision of urban services. A broader approach willalso be followed in the implementation of the health community facilities. Inaddition to the provision of facilities, guidelines will be developed for anurban HICH program, similar to the existing MICH program for rural areas, witha strong emphasis on community extension work focussed on preventive medicineand nutrition education.

6.03 Particular attention in project implementation will be paid to thebroader fiscal and administrative contexts of urban policies. The projectwill help define a program to reform the Land Rent and Service Charge, theprincipal urban land use and shelter tax (para 4.07-4.10). In connectionwith the reform, a dialogue with Government on other aspects of the presentsystem for financing urban investment and maintenance and of the administra-tion of urban areas will be pursued. The technical assistance component ofthe project has been designed to strengthen existing institutions responsiblefor different aspects of urban policies at both central and regional levels.Institution-building assistance will also be provided to SIDO and THB.

Squatter Upgrading and Surveyed Plot Program

6.04 A cost-benefit analysis based on comparison of "with project" and"without project" situations has been used to evaluate the economic rate ofreturn for squatter upgrading and surveyed plots program. 1/ The analysis

1/ The shadow prices used in the analysis were derived from a number ofkey primary factors, the most important of which are (i) tradable goods;(ii) taxes and Government revenues; (iii) labor, skilled, semi-skilled,unskilled urban and unskilled rural; and (iv) non-traded goods includingfoodstuffs.

- 28 -

takes into account only those benefits that are easily quantifiable inmonetary terms such as higher rental income from better quality housing.However, the project will also generate less tangible external benefits suchas better health, lower infant mortality, and a higher level of education.The quantification of these benefits is generally difficult due to the lackof adequate comparative data on the levels of health, education and relatedvariables. Therefore, the analysis based on higher rental income providesonly a partial indication of the economic return on the project.

6.05 Costs. Project costs used in the economic analysis included allconstruction, equipment and maintenance costs of infrastructure for squatterupgrading and surveyed plots net of taxes and duties. Physical contingencies,administration and detailed engineering were also included as well as houseimprovement, new construction and resulting maintenance expenditures incurredby project beneficiaries. The cost of schools, clinics and health programswere omitted (see para 6.04 above).

6.06 Benefits. Project benefits were measured by the increase in totalrent payments generated by the project. Rents may increase because existinghouses are improved, new ones are built or higher rents are paid for the sameaccommodation as a result of improvement of urban services and security oftenure. Values for differentials in the levels of new construction, houseimprovements and rents between "with-the-project" and "without project" sit-uations were based on survey evidence collected by Ardhi.

6.07 Internal rates of return for the squatter upgrading and surveyedplot program are as follows:

Dar es Salaam 24%

Tabora 19%

Tanga 22%

Morogoro 22%

Iringa 28%

All towns 23%

All towns 20%(squatter up-grading only)

All towns 35%(surveyed plotsonly)

- 29 -

6.08 Sensitivity Tests. The results of the evaluation were relatively

insensitive to changes in assumptions used in the analysis. In the evalua-tion of squatter upgrading and surveyed plots, the critical parameters werethe differential in rent levels and housebuilding and improvement ratesbetween improved and unimproved areas. The total value of benefits wouldhave to decrease 60% for the internal rate of return to fall below 10%.

Small-Scale Industry Development

6.09 Urban unemployment and limited industrial activity are major prob-lems of Tanzanian towns which the proposed SSI component would address.The component would bring direct and tangible benefits by creating about870 new jobs, including 350 skilled and semi-skilled workers at a unit in-vestment cost of US$650 (US$1,000 if working capital needs and technicalassistance are included). The potential annual output of the 150 new pro-duction units is valued at about US$2.7 million. The component would also

demonstrate a feasible and low-cost approach to assisting the urban informalsector and strengthen SIDO's financial, management and technical assistanceprograms, especially at regional levels.

Risks

6.10 Risks involved are primarily institutional and financial. Theproject's scattered locations combined with a general shortage of qualifiedpersonnel contribute to the institutional risks. Specific provisions forstrengthening the management capability of the institutions implementing theprojects and for improving coordination between them are made in the projectto limit this kind of risk. Financial risk is associated with the reformof the Land Rent and Service Charge. While the Government expressed itswillingness to undertake the reform, its complete implementation may provedifficult in the context of continuing budgetary constraints and scarcity ofqualified personnel. Flexibility, careful timing and continuing monitoringwill be required. However, even partial implementation of the reform willrepresent a significant improvement over the existing situation. Financialrisk is also involved in THB lending program in the squatter areas, givenits novelty and lending criteria and procedures less stringent than thosenormally employed by THB. During negotiations, assurances were obtainedfrom the Government that the Treasury would closely monitor the progressof the program and, if required, take the necessary steps to protect THB'sfinancial integrity.

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VII. AGREEMENTS AND RECOMMENDATIONS

7.01 The following agreements were reached with the Government duringnegotiations:

(a) Land Rent and Service Charge. Assurances were obtained that theLand Rent and Services Charge Study will be completed in accord-ance with the inception report and an implementing plan includingshort-term measures agreed. Agreement on final cost recoveryarrangements for the project will be reached by December 31, 1977(para 4.10-4.11);

(b) Allocation and Tenure

(i) the legal title form to be used in squatter upgrading areaswas agreed (para 5.09);

(ii) assurances were obtained regarding the collection ofLand Rent and Service Charge in squatter areas (para 4.10and 5.09); and

(iii) the allocation system to be used for the surveyed plotprogram giving preference to the target populationwas agreed upon (para 5.10).

(c) Ardhi. An approved plan and details for the reorganization ofArdhi's Sites and Services Section were submitted at negotiations(para 5.02);

(d) Community Facilities. Assurances were obtained that the guidelinesfor the urban MCH program will be prepared by the Ministry of Healthby December 31, 1977 (para 3.09);

(e) House Improvement and Construction Loans Program

(i) assurances were obtained that THB will appoint theadditional staff required to implement its lendingprogram by September 30, 1977 (para 5.11);

(ii) THB confirmed Government approval for importation ofcement for the materials loans (para 3.11);

(iii) THB submitted approved proposals for meeting its shareof project costs for the lending program (para 4.06); and

(iv) interest rates and terms of lending to beneficiariesproposed were agreed (para 4.05).

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(f) Small-Scale Industry Development

(i) assurances were obtained from SIDO on the timelyappointment of additional staff and consultants re-quired (para 5.14);

(ii) procedures and criteria for selecting SSI projectparticipants were agreed with eligibility opento cooperatives, partnerships and individuals inTanga or Tabora (Annex 4);

(iii) ten feasibility studies will be completed and sub-mitted for IDA review by September 30, 1977 (para.3.15); and

(iv) interest rates and terms of lending to beneficiariesproposed were agreed (para. 4.05).

(g) Recurrent Expenditures. Government agreed to provide allrecurrent costs for components financed under the project (para

4.07);

(h) Financial Records and Auditing. Government agreed to main-tain separate records and accounts for the project (including THBand SIDO components) which will be audited (following proceduresacceptable to IDA) annually and submitted to IDA within sixmonths of the close of the financial years of Ardhi, THB andSIDO (para 4.12); and

(i) Project Completion Report. Government agreed to submit acompletion report within three months of the project's closingdate (para. 3.20).

7.02 Subject to the above assurances and agreements, the project issuitable for an IDA credit of US$12 million.

ANNEX 1Page 1

TANZANIA


Squatter Settlements and Project Towns

1. This Annex describes the characteristics of the housing and

residents of squatter communities in two project towns and provides abrief sketch of each project town. Its final section summarizes theanalysis used to determine the demand for surveyed plots in each town.

A. Characteristics of Squatter Housing and Residents

2. Detailed studies of housing characteristics in project communitiesare available for Dar es Salaam and Tabora (Table 4). The characteristics

of squatter housing in the two towns are quite similar, and analogous studiesin the other three towns are likely to produce comparable results. Localvariations in typical building materials are discussed in the profiles of

the project towns.

3. In both cities the model squatter dwelling had four rooms andhoused four to eight people, although over a quarter had ten or moreresidents. Squatter houses often follow the traditional Swahili house plan,illustrated in Figure 1, which is characterized by a front verandah, acentral corridor and four to six rooms.. The rooms often have externalaccess and, therefore, can be rented easily. Monthly room rents in Dar esSalaam tended to fall in the T Sh 20-29 range; those in Tabora were somewhat

lower.

4. Physically, the model squatter house type is a mud and pole structurewith a corrugated iron roof; roughly half have cement floors. Two-thirds of

the houses in Dar es Salaam had no foundations, compared to 39% in Tabora (ahigh water table in one of the Tabora settlements may encourage residents toinstall foundations and floors). Pit latrines were by far the most commonform of sanitation in both cities. The more detailed information availablefor the Dar es Salaam settlements indicates that 54% of the houses had open

pits or pits with only temporary structures. 16% of the houses in Tabora and4% of those in Dar es Salaam had piped water on the plot. In Tabora, where amore detailed question was asked, almost 20% of the houses had no access tolocal standpipes, and another 45% were more than 100m from a standpipe. Data

about effective plot size coverage and use wer! also collected in Tabora.

Seventy percent of the plots were 200 to 300 m ; 81% of the informants feltthat their plots were large enough. Slightly more than half of the plots had

50% to 74% coverage, with the majority having around 50%. Almost 90% of theplots had gardens and 9% had businesses.

5. A large survey of Dar es Salaam residents in 1971 permits comparison

of the characteristics of people living in squatter settlements and plannedareas of the city (Table 5). The survey indicated that 69% of the squatterswere migrants, compared to 66% of the non-squatters. There were also no major

ANNEX 1Page 2

differences between the groups in the reasons given for coming to Dar esSalaam. Residents in squatter areas were somewhat more likely to be home-owners, 17% claiming to own a home in Dar es Salaam compared to 7% of thoseliving in planned areas of the city.

6. Residents in the planned areas tended to have more education andhigher incomes than the squatters. Half of the squatter respondents had noformal education, compared to just over a quarter of the non-squatters.At the other end of the educational spectrum, only 5% of the squatters hadreached Form I or higher, compared to 23% of the non-squatters. Incomeis closely related to education, and the squatters had lower incomes. Athird of them had incomes below T Sh 200 (US$24) a month, while only 15% ofthe other respondents had comparably low incomes. At the other end of theincome distribution, 41% of the non-squatters had monthly incomes of T Sh 400(US$48) or more, compared to only 15% of the squatters. Educational attain-ments were associated with income among both squatters and non-squatters;however, even when education was statistically controlled, the non-squattershad somewhat higher incomes. Self-employment and casual labor were somewhatmore common among residents of squatter areas. Unemployment rates werecomparable for the two groups, with about 20% of each group indicating thatthey were unemployed or seeking work.

7. These comparisons indicate that differences between the residentsof squatter settlements and planned residential areas in Dar es Salaam arerelatively small. Far from being marginal areas populated by economicallymarginal residents, the squatter settlements are an integral part of thecity. Other squatter settlements chosen for upgrading in the proposed projectare comparably integrated in the socio-economic structure of their cities.

B. Project Town Profiles

8. Maps IBRD 12573-7 show land-use patterns and the locations of theproject sites in each town. The criteria used to select the sites and thechracteristics of each site are discussed in Annex 6.

Dar es Salaam

9. Dar es Salaam is by far the largest city in Tanzania, more thansix times larger than the second biggest city, and accounts for 42% of thenational urban population. As the colonial capital and principal port,Dar es Salaam was the administrative and commercial hub of the TanganyikaColony. During the past decade the Government has endeavored to decentral-ize both the economy and the administration. The regionalization of theTanzanian Government during the early 1970's led to the dispersion of over40% of the Government's central establishment from Dar es Salaam, a trendwhich will continue with the development of Dodoma as the new nationalcapital. Economic decentralization has been far less successful, and thecompletion of the TAZARA railway line from Dar es Salaam to Zambia has re-inforced Dar es Salaam's importance as a transportation center.

ANNEX 1Page 3

10. Dar es Salaam's 1977 population is estimated to be 630,000,based on an average growth rate of 8.5% a year during the past decade.At its current estimated annual growth rate of 7%, the city will reach onemillion inhabitants by 1985. Approximately two-thirds of the populationnow lives in squatter housing. During 1963-73, a period for which reliabledata are available, squatter housing expanded at an average rate of 16.6%a year. Mianzese and Mtoni-Tandika, upgrading areas in the first and secondprojects respectively, are the largest squatter settlements in the country.(The characteristics of the housing in Manzese are described in para 3-4and Table 4). Although Dar es Salaam provides over 40% of the country'surban wage employment, unemployment and low incomes are major problems forits residents. For example, a recent survey in Manzese suggested that 10%of the household heads and much larger proportions of other household memberswere unemployed. A Bureau of Statistics budget survey in Manzese and Mtoni-Tandika during 1975-76 indicated that almost a quarter of the householdshad incomes below the minimum wage (TSH380 or US$46 a month).

Tanga

11. For the past two decades Tanga has experienced relative stagnationcompared to other towns and is being eclipsed by Arusha as Tanzania's secondlargest city. Prior to World War II, Tanga prospered as a port serving therich northern agricultural region and its settler population. Its lastspurt of growth occurred during 1952-57 when the population nearly doubled,largely because of rises in world market prices for sisal. Since then,however, its economy has expanded sluggishly and the population has grown moreslowly than in other principal cities. Efforts to divert port traffic toTanga from Dar es Salaam may provide some economic stimulus in the future.

12. In 1976, Tanga's population was estimated to be 90,000 based on astable growth rate of 5% a year. The town's economic problems are indicatedby the fact that wage labor grew at an average rate of only 1% a year between1962 and 1972. The Tanga Master Plan 1975-1995 pointed to unemployment andunderemployment as severe problems. A survey conducted in 1974 as part of themaster planning exercise indicated that the bottom 50% of the households hadmonthly incomes of T Sh 300 (US$36) or less. According to budget surveysconducted by the Bureau of Statistics during 1975-76, over half of the house-holds in selected low-income communities had incomes below the minimum wage.Housing conditions in Tanga generally appear to be worse than in other projectcities. The Master Plan categorized 45% of the housing as in "bad" conditionin 1974. 1/ Squatter housing has been expanding rapidly particularly alongthe main southern access route. Ardhi estimates that 40% of the populationcurrently lives in squatter housing. The prevalence of thatch roofs whichcatch fire frequently suggests that the availability of materials loans forcorrugated iron sheets should be stressed in the upgrading program in Tanga.

1/ Ardhi's Urban Planning Department uses a standard house rating system.The lowest rating is assigned to units "built of temporary or semi-temporary materials and those incapable of rehabilitation." Master Planfor Morogoro (1974), p. 6.

ANNEX 1Page 4

Morogoro

13. Morogoro, located 180 km southwest of Dar es Salaam, has promisinggrowth prospects. It is an important transportation center, situated onthe Tanzam Highway, the Eastern African Railways central line and the roadfrom Dar es Salaam to Dodoma. Morogoro was selected as a site for a Bank-financed industrial estates project which will provide 3,000 new jobs.It is also an educational center with four secondary schools, a teachertraining college, the National Institute of Development Management, andthe agricultural faculty of the University of Dar es Salaam.

14. Morogoro's 1977 population is estimated at 45,000 and the town isgrowing at an estimated rate of 6% a year. Table 6 indicates that Morogorohas the highest wage employment per capita and, proportionately, the largestmanufacturing sector among the project towns. However, sisal and tobaccoprocessing industries account for much of this emp'loyment, and average wageearnings per job are below the national urban average. More than 40% ofthe population lives in squatter settlements. The Master Plan for Morogoroprepared in 1974 classified 80% of the housing in Msamvu, a project upgrad-ing site, as "poor", but the proportion of "good" housing in the town'sother squatter settlements (36%) was comparable to the rest of the town.The potential for house improvement in Morogoro's squatter settlements thusappears high.

Iringa

15. Iringa is located about 400 km southwest of Dar es Salaam on theTanzam Highway. It is a commercial and trading center for one of the mostfertile agricultural areas in the country. Although it is strategicallylocated for the development of agricultural processing industries, the citycurrently does not have any major industries, and the tertiary sector isproportionately more important than in the other cities (Table 6). A short-age of piped water is an impediment to economic expansion as well as a poten-tial health hazard.

16. The city's population of 56,000 is estimated to be expanding at8% a year. During 1967-75, planned areas grew at an average annual rateof 6% compared to 14% for the squatter areas; the proportion of squattersin the total population rose from 26% to 49%. Soil conditions are appropriateand firewood is available for burnt bricks in Iringa. Therefore, much ofthe housing in the squatter settlements is structurally very sound. TheBureau of Statistics' pilot household budget survey in 1974 included a smallsample (59) in Kihesa, one of the communities to be upgraded. Approximately45% of the households sampled had incomes below the minimum wage.

Tabora

17. Tabora, 520 km west of Dar es Salaam, was an important Arab tradingtown which was developed as an administrative center by the Germans. The EastAfrican Railways line from Dar es Salaam and Dodoma branches in Tabora and theEAR has a servicing yard there. Tabora is also a national educational center,with six secondary schools, teacher training and secretarial colleges, a SIDO

ANNEX 1Page 5

cottage industry school, and EAR vocational training school. However, thetown lacks major manufacturing and processing industries, and its narroweconomic base poses a major problem for its future growth.

18. Tabora's estimated 1977 population is 69,000; it is growing at thecomparatively low rate of 5% a year. Data presented in the Master Plan forTabora indicate that in 1967-72, the population of squatter areas grew at 6%a year, compared to 3% per annum in other areas. Ardhi estimates that about70% of the population now lives in squatter areas. The characteristics ofthe housing in two squatter settlements are described in paras 3-4 and Table4. The regional administration undertook an improvement program affecting500 houses in one squatter settlement on its own in 1972. The gravity of theemployment situation in Tabora is indicated by Table 6; among the projecttowns Tabora had the least employment per capita and proportionately thesmallest secondary sector (manufacturing and construction). Average incomesin Tabora are substantially below the national urban sector average.

C. Size of the Surveyed Plot Program

19. The analysis used to determine the number of plots to be surveyedin the project is summarized in Table 7. Detailed data about populationcharacteristics, household formation and effective demand for housing inTanzania's cities are not available. Therefore, a simple approach basedprimarily on projected population growth was adopted. The population andgrowth rate estimates presented in Table I were used as the starting pointfor the analysis. It was assumed that a population equivalent to the increasedue to natural growth would be accommodated in existing housing. The estimatedgrowth rates were therefore deflated to remove the impact of natural increase,estimated at 1.8% a year based on analysis of data from the last census. Theresulting rates were then used to project the number of people who will neednew housing during the project implementation period, 1977-1981. The result-ing figures were reduced by 25% to reflect infilling and extension of housesin existing squatter communities and the very limited availability of otherhousing opportunities for better-off households (e.g., NHC and THB houses andmedium-and low-density plots prepared by the regions).

20. The estimated net demand for new housing was then divided by theaverage number of people per plot in low-incomes communities to determinethe required number of plots. Although Ardhi uses seven people per plot asa planning guideline, nine was chosen as a more realistic figure reflectingprevailing conditions in existing high-density settlements. The estimatedtotal need for surveyed plots for all five towns is 18,977. 1/ It should

1/ This is 19% fewer plots than Ardhi originally estimated would be needed.Ardhi's projections took into account the number of households on thedistrict allocation waiting lists as well as population growth over athree year period. The mission chose not to take the waiting lists intoaccount because they are not consistently kept up to date.

ANNEX 1Page 6

be noted that this estimate does not take into account the backlog of demanddue to the small size of the surveyed plot program in the past. Because ofthe unreliability of the data and parameters on which the estimates arebased, the phasing of allocations of surveyed plots will be planned to beginslowly and to increase in relation to the volume of applications received.If the application rate is lower than anticipated, the allocations can bephased over a longer period.

ANNEX 1Table 1

TANZANIA


Growth of Urban Centers in Mainland Tanzania

Urban Centers Growth 1/ Estimated Estimated 4/(With Populations of Rate 1967 2/ Current 1975

5,000 or More in 1967) 1948-67 Population Growth Rate 3/ Population

Dar es Salaam 7.5% 272,821 7% 550,000*Tanga 5.9% 61,058 5% 89,000*Mwanza 6.1% 34,961 n.a. 60,000Arusha 10.0% 32,451 n.a. 89,000*Moshi 6.5% 26,864 n.a. 69,000*Morogoro 6.1% 25,262 6% 40,000*Dodoma 4.9% 23,559 n.a. 50,000Iringa 7.3% 21,746 8% 56,000*Kigoma 7.3% 21,369 n.a. 30,000Tabora 2.7% 21,012 5% 62,000*Mtwara 2.7% 20,413 n.a. 30,000Musoma 9.1% 15,412 n.a. 30,000Lindi 2.4% 13,352 n.a. 20,000,beya 7.5% 12,479 n.a. 50,000Singida n.a. 9,478 n.a. 20,000Wete n.a. 8,469 n.a. n.a.Bukoba 5.0% 8,141 n.a. 10,000Mwadui n.a. 7,383 n.a. n.a.Korogwe n.a. 6,675 n.a. n.a.Songea n.a. 5,430 n.a. 10,000Shinyanga n.a. 5,135 n.a. 10,000Bagamoyo n.a. 5,112 n.a. n.a.

Total 6.8% 658,483 7%

1/ Claes-Fredrik Claeson and Bertil Egero, Migration and the UrbanPopulation, University of Dar es Salaam, Bureau of Resource Assess-ment and Land Use Planning, 1972.

2/ 1967 Population Census, Volume 2, Statistics for Urban Areas, Dares Salaam, 1970. Tables la and lb.

3/ Mission estimates.

4/ Ministry of Lands, Housing and Urban Development or mission (*)estimates.

ANNEX 1Table 2

TANZANIA


Squatter Housing in Urban Centers of Tanzania

Estimated 2/Estimated 1/ ExistingPopulation Squatter Squatter Houses per

City/Town 1975 Houses 1,000 Population

Dar es Salaam 550,000 40,000 73

Tanga 89,000 3,000 34

Arusha 89,000 6,000 67

Moshi 69,000 2,000 29

Tabora 62,000 4,000 65

Mwanza 60,000 3,000 50

Iringa 56,000 3,000 54

Mbeya 50,000 5,000 100

Morogoro 40,000 1,500 38

Mtwara 30,000 500 17

Musoma 30,000 500 17

Kigoma 30,000 1,000 33

Bukoba 10,000 1,000 100

1/ Table 1.

2/ Ministry of Lands, Housing and Urban Development.

ANNEX 1Table 3

TANZANIA


IDA - Financed Sites and Services and Squatter Upgrading Projects

First Project Second ProjectServiced Houses in Up- Surveyed Houses in Up-

Cities Plots grading Areas Plots grading Areas

Dar es Salaam 6,182 7,600 14,150 9,138

Mwanza 1,900 - - -

Mbeya 850 1,200 - -

Iringa - - 1,770 1,088

Morogoro - - 810 2,069

Tabora - - 925 2,784

Tanga - - 1,330 732

TOTAL 8,932 8,800 18,985 15,811

ANNEX ITable 4

TANZANIA

SECOND NATIOIIAL SITES AND SERVICES PROJECT

Characteristics of Squatter Housing in Dar es Salaam and Tabora

Dar es Dar esCharacteristic Tabora Salaam Characteristic Tabora Salaam

Number of Rooms Floor

I - 2 9% 11% Cement 61% 50%3 - 4 60% 59% Earth 37% 50%5 - 6 19% 28% Cow Dung Plaster 2% -7+ 12% 2%

WallsNumber of Occupants

Grass and Poles 1%1- 5 27% 35% Mud and Poles 68% 67%6 - 9 46% 30% Mud Bricks 28% -10 - 13 14%) Soil-Cement 2% 2%14 - 17 11%) 35% Sand-Cement - 30%18+ 2%) Concrete Blocks 1% -

Other - 1%Number of Rooms Rented

Roof0 42% 44%1 6% 6% Corrugated Iron Sheets 94% 83%2 15% 16% Beaten Tin 5% 10%3 15% 11% Grass 1% 7%4 13% 15%5+ 7% 10% Toilet

Average Rent per Room (T Sh per Month) W.C. 4% 2%Pit Latrine 92%

1 - 15 1 - 14 28% - Perm. Structure 28%15 - 19 ) 16% Temp. Structure 23%20 - 24 ) 53% 33% Open Pit 31%

16 - 30 25 - 29 ) 32% Dry System 1%

30 - 34 ) 11% None 3% 14%31 - 45 35 - 39) 15% 4%

40 - 49 ) 3% Water

46+ 4% -Tap on Plot 16% 4%

Foundation Tap < 100 m) 20%Tap > 100 m) 45% 96%

None 39% 66% None ) 18%Stones ) 39%)Bricks ) Yes 15%) 34% ElectricityConcrete) 8%)

On Plot 33% 3%None 67% 97%

Source: Ardhi Sites and Services and RLDO. Tabora.

ANNEX 1Table 5

TANZANIA


Characteristics of Households in Squatter and Non-Squatter Areas,Dar es Salaam, 1971

Respondents in: Respondents in:Squatter Non-Squatter Squatter Non-SquatterAreas Areas Areas Areas

Reasons Cited for Migrating 1/to Dar es Salaam Nigration Status

Employment-Related Migrant 69% 66%To look for work 24% 19% Non-Nigrant 31% 34%To take job obtained

prior to arrival 2% 4% House OwnershipGovernment transfer 2% 3%Employer Transfer 1% 2% House Owner 17% 7%

29Z 28% Non-Owner 83% 93%

Accompany family Employment StatusTo accompany parents 17% 16%To accompany spouse 23% 20% Casual/"kibarua" 9% 5%

40% 36% Regular Wage 26% 19%Salaried Staff 21% 38%

To Attend School 3% 6% Senior Management 0% 2%Self-Employed/

Miscellaneous Non-Wage 21% 16%To visit 10% 9% Unemployed orOther 5% 4% seeking work 22% 20%Do not know/not stated 14% 17%

29% 30% Monthly Income (T Sh) 2/

Level of Education Under 100 10% 4%100- 199 24% 11%

None 50% 28% 200- 299 34% 26%Standards I-IV 21% 18% 300- 399 17% 18%Standards V-VIII 23% 31% 400- 499 5% 8%Forms I-IV 5% 21% 500- 749 6% 13%Forms V-VI 0% 1% 750- 999 1% 4%University 0% 1% 1000-1499 1% 7%

1500 and over 2% 9%

1/ More than one response possible.

2/ Includes wage and non-wage income.

Data Source: National Urban Mobility, Employment and Income Survey.Sample Size: 1,873 in squatter areas; 1,417 in non-squatter areas.Source: Richard E. Stren, Urban Inequality and Housing Policy in Tanzania

(Berkeley: Institute of International Studies, University ofCalifornia, 1975), Tables 11, 13, 15, 16, 19, and 23.

ANNEX 1Table 6

TANZANIA


Wage Employment in Project Towns, 1974

Dar es Salaam Iringa Morogoro Tabora Tanga

Total Employment 96,053 7,960 11,131 8,179 13,332

Employment per1,000 Population 187 154 295 139 147

Sectoral Distributionof Employment

Agriculture 4% 5% 5% 5% 0%

Manufacturing 23% 5% 30% 16% 24%Public Utilities 3% 6% 3% 12% 5%Construction 11% 20% 16% 7% 15%Commerce 8% 13% 3% 3% 12%Transport 25% 14% 18% 32% 21%Finance 5% 2% 1% 1% 1%Services 21% 35% 24% 24% 22%

Source: Bureau of Statistics.

ANNEX 1Table 7

TANZANIA


Surveyed Plot Requirements

Dar es Salaam Tanga Tabora Morogoro Iringa

1. Estimated 1976Population 1/ 588,500 93,450 65,100 42,400 60,480

2. Estimated AnnualGrowth Rate 1/ 7% 5% 5% 6% 8%

3. Estimated Growth Rate 2/Due to Migration 5.2% 3.2% 3.2% 4.2% 6.2%

4. Population to beHoused 1977-81 169,772 15,940 11,104 9,684 21,222

5. .75 x #4 127,329 11,955 8,328 7,263 15,917

6. Average Number ofPeople Per Plot 3/ 9 9 9 9 9

7. Number of Plots Required1976-81 14,148 1,328 925 807 1,769

Sources:

1/ Table 1.

2/ Demographic analysis of the 1967 Census indicated that the rate of naturalincrease in urban areas was 1.8% per annum. This rate has been applied toall five towns. Claes-Fredrik Claeson and Bertil Egero, Migration andthe Urban Population (Bureau of Resource Assessment and Land Use Planning,University of Dar es Salaam, 1972), p. 20.

3/ Estimate based on Tanga Master Plan, 1975-95 and housing surveys in squat-ter communities in Dar es Salaam.

ANNEX 1

TANZANIA Figure 1SECOND NATIONAL SITES AND SERVICES PROJECT

A TYPICAL TRADITIONAL HOUSE

W.C. BATH SR KITCHEN _______

Front Elevation

18.29 Plot Boundary

ROOM ROOM X4.16x3.35 3.66x3.35 3

ROOM ROOM 3.66x3.35 ;4.16x3.35 3

t l I n ,////////////////I C/// 0CL

< l I tsw t o /Z/v///////zoo v 20

-t I I z m o Xo//z////v//v/s X0I I | L_lc | X zov///vovowoI -

ROOM 6

ROOM44.16x3.35..I

3.66 '/ '/9.14'.-'-",/ 2.73

1 7 1 VERANDAH \_1 Entrance Plot Boundary

L _ ____ .-----. "-II STREET

Ground Plan Site PlanScale: 1: 100 Scale: 1: 200

World Bank-16745

ANNEX 2

TANZANIA


Community Facilities Program

INTRODUCTION

1. To raise the level of community services in each site to nationalstandards, the project will provide primary schools, Mother and Child Health(MCH) Clinics, and markets. The number and location of these facilities issummarized in Table 1. This Annex reviews the sectoral context, first projectexperience and the proposed approach in the second project for each category

of community facility.

SCHOOLS

2. Background. In 1974, the Tanzanian Government established anambitious program of universal primary education aiming at 100 percent enroll-ment by 1977. Despite considerable progress, it has since become apparentthat achievement of this target would entail severe pressure on the nationalbudget and take a longer time. 1/

3. Due to the severe shortage of funds, school construction in theregions has been falling behind schedule. The cost of classrooms constructedby contractor is currently estimated at T Sh 20,000 for upcountry towns andT Sh 40,000 in Dar es Salaam. However, on the assumption self-help is avail-able, Government allocates each region amounts sufficient to buy only buildingmaterials. Over the past two years, this has been cut back from T Sh 8,000per classroom to T Sh 5,000 for upcountry towns, and from T Sh 20,000 to T Sh

5,000 in Dar es Salaam. Local officials have repeatedly commented on thedifficulty of obtaining self-help labor in urban areas. As a result, funds tofinance classrooms are transferred from other budgets and/or the funds pooledand fewer classrooms built. In the Dar es Salaam region, for example, only 74of the 101 classrooms scheduled to be constructed in 1975/1976 were actuallycompleted. In the town of Morogoro, seven of the ten classrooms planned wereconstructed. Typically, a one stream (seven years) school is opened with oneclassroom for the entering Standard I pupils. A class room is added each yearto allow the intake of new students as the first year students advance. The

1/ For detailed information see "Fiscal Implications of Universal PrimaryEducation and Universal Rural Water Supply", report of World BankSpecial Mission, March 1976. The achievement of UPE would requirealmost doubling the number of classrooms in order to accommodatethe increase of school population from 433,000 in 1975/1976 to841,000 in 1977.

ANNEX 2Page 2

school is _orirleted at the end of six years. Building standards are low:concrete floors, unpainted cement block or burnt brick walls, corrugatediron roofing, no ceilings, and screens for windows.

4. To date, urban schools have had no shortage of staff and sufficientfunds for the teachers' salaries have been provided by the Government. How-ever, severe shortages exist for supplies. In 1975 the Ministry of Educationrecommended an annual average expenditure of T Sh 80 per primary school pupilfor supplies. In fact, the Dar es Salaam region received only about T Sh 15per pupil in 1975-76. 1/

5. First Project Experience. Phase I primary schools were originallydesigned as complete "Community Education Centers", with six classrooms,teachers' offices, kitchen, dining hall, craft workshops and dispensary.Their cost is presently estimated at T Sh 1.2 million per school. In lightof the financial constraints, the proposed standards are unrealisticallyhigh. Furthermore, the provision of workshops and technical workshopsattached to primary schools is still an experimental program, aimed at asmall number of schools, funded by Danish aid and therefore not generallyapplicable at this time.

6. Second Project. Phase II schools will basically provide classroomspace. As shown in Table 8, Annex 6, a one stream school will include sixclassrooms, 2/ a small administration block, and a toilet block. Buildingstandards will be as low as possible: concrete floors, burnt brick orcement block walls, corrugated iron roofing, and screens for windows.Ceilings will be included if funds allow. Space will be provided on thesite for additional streams and workshops that could be constructed inthe future. The cost estimate of T Sh 43,000 (US$5,180) per classroom inDar es Salaam is based on the 1975 contract price of a classroom updated tomid-1977 level. For upcountry towns, the cost of a classroom is estimatedat T Sh 33,000 (US$3,976). 3/ The project will also provide T Sh 5,500(US$663) per classroom for furniture and T Sh 40 per pupil to partiallycover initial expenditure on books and supplies. Anticipated recurrentstaffing and supply expenses are presented in Table 4.

7. To determine the number of schools to be provided (see Table 2),the school-age population and existing facilities in and adjacent to the

1/ The Dar region received T Sh 944,000 for supplies in 1974-75, 850,000in 1975-76, and is expected to receive only 835,000 in 1976-77. Dueto inflation and the increase in enrollment both current and realper pupil expenditures have decreased substantially.

2/ As Standard I and II operate on double shifts, only six classroomsare needed for the seven standards.

3/ On the basis of information supplied by regional education officers,it is assumed that a 25 percent saving can be achieved in theconstruction of upcountry classrooms with contracts tendered locally.

ANNEX 2Page 3

project areas were taken into consideration (see Table 2). Most of theexisting schools are not completed because of the staged expansion describedin para 3. It was assumed, however, that the regions will find the resources,as they have in the past, to add classrooms each year and gradually equalizethe number of streams per standard.

8. The Bank supports the goal of UPE, although it remains concernedwith the overall costs of the program and would prefer to see the targetreached over a longer time span. On the basis of a one stream school for315 children or approximately 225 families and in conjunction with plannedregional efforts, the project would help to meet the demand for new class-rooms required for close to 100% enrollment of the current school-age popu-lation in project areas by 1981.

HEALTH AND NUTRITION

9. Background. Tanzania's health problems are severe. In 1967,infant mortality was at 165/1,000, with life expectancy at birth only 41years. Most sickness results from poverty-linked infectious and parasiticdiseases, such as malaria, measles, and gastroenteritis, and from variousanemias and protein malnutrition. These diseases affect both urban and ruralareas.

10. To combat these problems, Tanzania has been committed to a rapidextension of its health care system, particularly over the past six years.Foreign assistance has been crucial in this expansion; 90% of the 1975/76health development budget of T Sh 97 million was supplied by outside donors,up from 70% the year before. For fiscal year 1977/76, the recurrent publicsector expenditures, financed from internal sources, were about T Sh 400million (US$48 million), an expenditure of T Sh 27 per capita. At 2.4% ofGNP, this represents a stronger public sector commitment to health care thanis shown by other countries of similar per capita incomes. The 1975/80 FiveYear Plan calls for public health care to expand to 4.5% of GNP. Such anexpansion, however, would generate further pressure on the public budget. Inview of present budgetary constraints its achievement appears unlikely.

11. Most of the health sector investment is going to the rural areas.By 1980, the Five Year Plan calls for one 4-room rural dispensary for every8,000 people and a larger rural health center for every 50,000. The emphasisis placed on preventive care to the two groups in greatest need--pregnantwomen and children under the age of five. One of the rooms of the ruraldispensary serves as a Mother and Child Health (MCH) Clinic, staffed by aspecially trained MCH aide and providing basic pre-natal and post-natalexaminations, innoculations, medicine, nutrition education and food supple-ments if necessary.

12. The program has been well established in rural areas, followingMinistry of Health guidelines. With the cooperation of USAID and UNICEF,

ANNEX 2Page 4

twenty centers to train MCH aides have been set up which will be supplying450 MCH aides per year by 1980. The standards for the program have been keptlow: a simple MCH aide kit is distributed to all facilities and the aidesare given only a basic 18-month course.

13. Urban Health and First Project Experience. Urban populationshave traditionally had greater access to medical care than rural families,with most cities served by a district or regional hospital and outpatientclinics or dispensaries. However, the availability of care is unevenlydistributed, with facilities adjacent to squatter areas severely overcrowded.1/ Designed to serve 20,000-30,000 people, urban dispensaries are usuallylarge (about 400 square meters), with high physical standards. Curativetreatment is emphasized, although some preventative care, such as innocula-tions, is given. These facilities have high recurrent costs, due particularlyto the large expense for drugs and other supplies. 2/ Recurrent funding hasbeen inadequate and severe shortage of simple equipment, such as sterilizers,clamps and beds, often prevents the staff from carrying out simple operationswhich the facilities are designed to handle. As a result, many patients muststill be referred to the hospitals.

14. Designs of health facilities in the first project, based onmodel Health Ministry plans, conformed to the traditional pattern of urbanmedicine and emphasized curative care and high construction standards.

15. Second Project Program. The second project will extend theemphasis on preventive medicine from rural to urban areas by financing theconstruction and/or expansion of MCH clinics. The program should help holddown recurrent expenses, relieve the overcrowding of existing facilities,and improve the access to health care for pregnant mothers and smallchildren in squatter areas.

16. In selecting the location and type of MCI facility, complete clinicor extension, existing medical facilities were taken into account (seeTable 3). Although a few clinics already operate in some towns, no specificguidelines have been established to indicate the changes required for thelarge-scale implementation of the MCH program in urban areas. The Ministryof Health has agreed to prepare such guidelines which will specify the serv-ices to be offered, the number of patients to be served, organization of thefacility, staffing, equipment, layout and estimated capital and recurrent

1/ Dispensaries near the project sites in Dar es Salaam were designedto handle 500 patients a day; they currently handle 1,000-1,500 perday.

2/ In the current Five Year Plan, it is projected that 40% of a clinic'stotal expenses, including salaries, should be allocated for supplies.However, in two Dar es Salaam dispensaries, supplies equal 60-70%of total costs.

ANNEX 2Page 5

costs. Emphasis will be placed on the efficient utilization of staff,reducing physical standards, and limiting recurrent expenses.

17. An urban MCH should serve about 30,000 people and accommodatea daily flow of 250-350 mothers and children. Table 8 of Annex 6 pre-sents a tentative list of functions and specifications for a completeMCH, based on a well-functioning clinic in Dar es Salaam. A type designfor the clinics will be included in the guidelines. To lower capitalcosts, two construction standards should be used: a low standard, similarto that used for school classrooms, for the waiting and registration areas;and a higher standard for medical facilities, i.e., the rooms where actualtreatment or injections are given. Recurrent costs and staffing levelare given in Table 4.

18. The guidelines for urban MCH program will also include a communityextension program focussing on nutrition education, and which should becomeone of the standard functions of the clinic. The current MCH nutritioneducation program offers short lessons on nutrition and other subjects whilethe women are waiting for consultation; however, mothers' attendance isonly sporadic. There is little effort to follow up on children identifiedin the clinic as malnourished. Mothers are encouraged to return to receivefurther guidance, but home visits are rarely made. In an attempt to over-come these problems, nutrition and MCH aides based at the clinic will beassigned to work in adjacent communities, visiting houses of particularlymalnourished families and providing regular courses in family hygiene,nutrition and environmental sanitation at community centers. UNICEF guidanceand assistance will be sought in improving the nutrition education program.

19. The program should begin with at least two extension workersassigned to each clinic, with the possibility that more may be added asthe country meets its health manpower requirements. The project willfinance bicycles, motorbikes, and other equipment necessary for startingthe program. The guidelines for the extension service will be preparedwith the assistance of the local UNICEF office, which has agreed tofinance a field work orientation seminar providing MCH aides. The exten-sion workers will be placed under the supervision of the MCH clinic director.

MARKETS

20. Design, construction and management of markets is the responsibilityof the regions. Most towns have one or two large markets and a few smallerneighborhood markets. These smaller markets may have some high standard,formally constructed stalls, but are primarily made of informal wooden stalls,built by the vendors themselves and frequently strung out along the roadside.It has been difficult for the regions to raise funds to improve these markets,as all revenues collected from stall rents are channeled to the centralTreasury.

ANNEX 2Page 6

21. In the first project, markets were designed to provide some higherquality, more hygienic stalls, particularly for meat and fish selling. Itis anticipated they will serve a population of 15-20,000. Standards forthe second project will be similar. As outlined in Table 8, Annex 6, theproposed markets would include eight vegetable stalls, built to low standardsof unfinished concrete block walls and no water, and four meat stalls, builtto higher standards of fully enclosed space, washable concrete surfaces, andpiped water. A porch in front of the stalls and toilet block are included.Recurrent expenses for the market are shown in Table 4.

ANNEX 2Table 1

TANZANIA


Community Facilities Program

No. of Medical FacilitiesNumber of Schools MCH Extension/ Number of Markets

city Site 1 Stream 2 Stream MCH Clinic Outpost New Extension

Tabora Isebya 1 1 1

Kiloleni 1 1

Tanga Gofu Juu 1 1 I

Mwakizaro 1

Morogoro Kichangani 1 1 1

Msamvu 1

Iringa Kihesa 1

Dar es Salaam Mtoni 2 1 1

Tandika 2 1 1

Hanna Nassif 1 1

Total 6 6 2 4 4 2

TANZANIA


Community Facilities - Projected School Enrollments and Classroom Demand

Estimated School Streams Required 2/or Existing Streams Streams ProvidedCity Site Age Population 100% Enrollment - (completed or begun) In Project

Dar es Salaam Hanna Nassif 1,590 5 4 1

Mtoni 7,000 21 8 (11) 3/ 4

Tandika 4,200 14 0 (15) 4

Morogoro Msamvu 1,620 5 0 (5) 1

Kichangani 630 2 1 1

Tanga Gofu Juu 590 2 1 1

Mwakizaro 560 2 0 (1) 1

Tabora Isebya 2,380 8 5 3

Kiloleni 1,680 5 2 (1) 2

Iringa Kihesa 1,540 5 6 0

18

1/ 20% of the estimated total population in the project areas.

2/ Based on 315 students per one stream school, 45 students per standard for seven standards.

3/ Figures in parenthesis represent school streams in adjacent areas that children in project sitesattend.

tD >4

ANNEX 2Table 3

TANZANIA


Existing and Planned Medical Facilities

Existing Project to Provide

Dar es Salaam

Hanna Nassif 1 dispensary, small MCH near Extension of MCH

Mtoni ( Both sites, plus the planned MCH 1/( area of Temeke, served by

Tandika ( 1 MCH, and 1 dispensary MCH

Morogoro

Msamvu Downtown MCH

Kichangani No services Medical Outpost (smalldispensary/MCH)

Tanga

Gofu Juu No'dispensary for west side MCH Extension, withof city, existing small MCH some dispensary ser-

vices

Mwakizaro Dispensary nearby

Tabora

Isebya Existing 2-room MCH Expansion of MCH

Kiloleni Nearby dispensary now beingconstructed

Iringa

Kihesa 2 dispensaries

1/ Will also serve overspill area of Mbagala - 1,000 houses.

ANNEX 2Table 4

TANZANIA


Community Facilities - Staffing and Recurrent Expenses(in TSh)

Salary/MonthFacility Category Per Position Total Per Year

School 1. Personnel

1 Principal 1,500 18,0006 Teachers 700 50,4002 Watchmen, custodians 500 12,000

Subtotal 80,400

2. Supplies 1/ 12,600

Total 93,000

MCHClinics 1. Personnel

1 Staff Nurse 2,500 30,0002 Grade A 1,500 36,0005 Grade B/Midwife 800 48,0003 Grade C 600 21,6002 Nutrition ExtensionOfficers 800 19,200

Subtotal 154,800

2. Supplies 200,000

Total 354,800

Markets 1 Watchman 600 7,2001 Custodian 600 7,200

Total 14,400

1/ TSh 40 per pupil.

ANNEX 3

TANZANIA


House Improvement and Construction Loans Program

1. Under this project, house improvement and construction loans toproject beneficiaries will be made by the Tanzania Housing Bank (THB). Thiswill be an extension of the program established under the first project withmodifications designed to address problems encountered. This annex discussesrecent developments in the organization and management of THB, 1/ reviews theexperience of the first project and describes the proposed lending programfor the second project.

A. THB--Recent Developments

2. Since 1974 THB has embarked upon an ambitious program of regional-ization. It currently has ten Regional Branches as well as a Zonal Office inMoshi (covering Kilimanjaro, Arusha and Tanga regions). In the near futureTHB plans to establish branches in eight remaining regions of the mainland,where Regional Cooperative Unions presently act as THB agents. In early 1976the heads of Regional Branches were promoted to Manager levels. However, alllending operations still have to be approved by the Head Office. THB Manage-ment is currently considering an experimental delegation of lending responsi-bility to the Zonal Office in Moshi.

3. The THB staff has grown rapidly from 100 persons in mid-1974 to 270in mid-1976. As a parastatal, THB offers better promotion and career develop-ment possibilities than most other government employment and is therefore ableto attract qualified personnel. However, difficulties are experienced in twoareas: accounting and architecture. These are due to the general shortage ofqualified Tanzanians and the length of formal training in those fields.Currently ten members of THB staff are being trained locally and abroad. 2/

4. THB has diversified its operations. It administers the Workers'and Farmers' Housing Development Fund, created in mid-1974 and financedby a monthly levy of 2% of the wage bill of every employer of ten ormore persons. The Fund is likely to become one of the main sources of

1/ For a detailed description of THB's functions, purpose, organiza-tion and management see the appraisal report for the first project(Report 337-TA).

2/ One architect, six accountants, one insurance specialist, onebanking specialist and one statistician.

ANNEX 3Page 2

THB's financing for low cost housing in both urban and rural areas. Onthe other end of its lending activities spectrum, THB set up a subsidiary,THB Estates, which builds and sells high standard housing estates andcommercial buildings.

5. The balance sheet of THB as of 31 December 1975 is shown inTable 1. Since its creation THE has considerably improved its financialsituation. Between 1974 and 1975, and despite a 58% increase in its admin-istrative and overhead expenses due primarily to regionalization, profit(before taxes) increased from T Sh 0.4 million to T Sh 2.4 million. Thevolume of lending increased 58% to T Sh 177.6 million (US$21.4 million).The majority of those loans was made for medium-cost housing, priced atT Sh 35,000 or more. The average interest charged is 7% per annum. Thelending policies of THB are sound, if anything somewhat conservative,stressing the link between the income of prospective borrowers and theirhousing plans. THB's building inspectors follow-up the loans in orderto ensure that the loan money is not misused. The rate of default is lowand the enforcement is fairly rigorous.

6. A vigorous savings mobilization campaign across the country in1975 was very successful and resulted in a 71.5% increase in depositsover the 1974 level from T Sh 74.6 million to T Sh 127.8 million. Withinthose deposits the share of fixed term two-year deposits increased from7.3% in December 1974 to 24% in December 1975. The average interestrate on public deposits is 5.4%. 1/

7. Despite the spectacular increase in public deposits, there wasstill need in 1975 to find complementary sources to finance THB's lendingoperations. The main source was the Workers' and Farmers' Housing Develop-ment Fund which provided T Sh 31.5 million at 3.5%. THB management believesthat it will be able to finance the future demand for mortgages out of itsown resources (including Workers' and Farmers' Rousing Development Fund).The present spread between the average cost of money from all sources andincome from lending operations -- estimated at 2% -- is judged satisfactory.

There is a concern however that a greater share of fixed terms depositswhich are paid a higher interest rate than the short term deposits, combinedwith an increased emphasis on low-cost housing loans, which carry lowerinterest rates than medium and high-cost housing, might result in a reduc-tion of the spread. The interest rates on deposits and loans have not beenadjusted since early 1974. An upward adjustment appears desirable in themiddle term, but it should take place in the context of an overall review ofthe interest rate structure of the banking sector.

1/ The effective rate is lower (about 5%) due to the short maturity(less than a year) of the majority of deposits.

ANNEX 3Page 3

B. Experience of the First Project

8. It is still too early to draw definitive conclusions about theeffectiveness of the lending program in the first project. There are, how-ever, indications that the program did not work as well as expected. In thesite and services areas, the proportion of project beneficiaries who appliedfor loans was lower and the loan amounts higher than originally anticipated.Until mid 1976 no loans have been made in improvement areas. This was duemainly to the fact that in dealing with project beneficiaries, THB was apply-ing its normal lending procedures which are rather stringent and not gearedtoward the means and expectations of the target population. There was alsoa lack of coordination between THB and Ardhi.

9. A number of steps were taken during recent supervision missionsto increase the effectiveness of the program. Formal coordination of THBand Ardhi programs has been established. THB has agreed to adopt a moreaggressive posture in project areas. A publicity campaign advertisingthe availability of loans has been undertaken. Lending criteria havebeen relaxed somewhat and application procedures simplified. A demonstra-tion houses program was started in late 1976 and part-time site officesopened in the project areas.

10. In the second project further effort will be made to simplify lend-ing procedures and establish THB's presence in the project areas (see para16 below). This should help to overcome the reluctance of the inhabitants whooften tend to perceive THB as a remote, somewhat aloof and hardnosed institu-tion lending mostly for large projects. In addition, the problem of access tobuilding materials encountered in the first project will be addressed moredirectly in the second project.

11. The problem of access to building materials has two facets. First,building materials, particularly cement, are scarce; second, the existingdistribution system is inefficient and does not reach the target population ona systematic basis. Therefore, in the absence of specific measures aimed atensuring an adequate supply of building materials to project areas, manyproject beneficiaries are unlikely to obtain them at reasonable prices.

C. The Lending Program in the Second Project

12. Under the project, three categories of loans for house improvementand construction will be made:

(a) Loans for improvement of existing houses in upgradingareas. The average size of these loans, which will beused primarily for building materials, is estimated atT Sh 4,000 and the estimated take-up rate for thiscategory is 20% of the eligible population.

ANNEX 3Page 4

(b) Loans for construction of new houses for householdsto be relocated as a result of squatter upgradingworks. The average size of these loans is estimatedat T Sh 14,500. The estimated take-up rate for thiscategory is 60%.

(c) Loan for construction of new houses in surveyed plotareas. The average size of these loans is estimatedat T Sh 13,000. The estimated take-up rate for thiscategory is 30%.

13. Given the novelty of lending in upgrading and surveyed plot areas,no firm data exist on the take-up rate for these categories. The proposedrates are mission estimates based on discussion with THB and Ardhi staff.The average size of loans is based on estimated costs of improvement andconstruction of houses (see Annex 9 for details). It was assumed that thehouses in surveyed plots areas, where the level of services will be verylow initially, will be of somewhat lower quality than new houses in betterserviced areas. The size and volume of the lending program is summarizedbelow:

House Improvement and Construction Lending Program--1978-1982

No. of Take-up No. of loans (AmountCategory Households rate to be made T Sh '000)

1. Upgrading Areas 14,293 20% 2,860 11,440

2. Relocation 1,519 60% 920 13,340

3. Surveyed Plots Area 18,977 30% 5,700 74,100

Total 34,797 9,480 98,880

14. In addition to the house improvement and construction loans, THBwill also make loans for construction of worksheds to the participants in thesmall-scale industry programs in Tanga and Tabora. The maximum size of theseloans will be T Sh 120,000 (US$14,500). The size of the workshed constructionprogram is estimated at T Sh 2.8 million (US$0.34 million).

15. Under the first project, IDA and the Government were to supply fundsto THB for the total estimated demand for loans from project beneficiaries.In the second project, IDA and Government contributions will focus on thoseaspects of the program that appear as likely impediments to its effective im-plementation. No major difficulties are anticipated for financing of thelending program for house construction and improvement. IDA will provideT Sh 8.9 million (US$1.075 million) to cover the foreign exchange costs forimporting cement for the first three years (see para 19 below), loans for work-sheds, staff training and equipment necessary to operate the lending programeffectively. THB will finance the balance before contingencies of T Sh 93.4

ANNEX 3Page 5

million (US$11.2 million). Assuming that the lending program will be spreadover five years, the average annual lending volume between 1978 and 1982 wouldbe T Sh 18.6 million (US$2.2 million). This represents 10.6% of currentTHB lending. In the past, THB has been able to finance considerably largerexpansion of its operations. Assurances were obtained at negotiation thatTHB will supply the funds for the local currency balance of the lendingprogram.

Lending Procedures

16. The lending procedures and terms for surveyed plots areas willbe similar to those normally applicable to low-cost housing. Loans willbe secured with a first mortgage which can be obtained only for plots heldunder long-term right of occupancy. Letters of intent from Ardhi indi-cating that preparation of a long-term right-of-occupancy title has beeninitiated are to accompany the loan application. The applicant has to showhis ability to repay and is required to put down 5% of the total construc-tion cost. This sum however includes different fees to be paid in connec-tion with the loan.

17. For loans in squatter upgrading areas, THB will use proceduressimilar to those used in its rural lending program. These loans do nothave to be secured with mortgages and fees are considerably lower. Theapplication process for the loans will be administered from offices housedin THB demonstration houses to be constructed in the upgrading areas. Theapplication form will have to be signed by the District and TANU officialsin order to confirm the information supplied by the applicant. Rentalincome will be considered in determination of the applicant's ability to pay.Loan applications will be sent to THB's Sites and Services Section for finalapproval.

18. Procedures and lending terms (interest rates, grace period, and downpayment requirements) for loans to small-scale industry program participantsfor workshed construction will be less stringent than those normally appliedby THB in its lending for commercial operations. SIDO's Project Economist willplay a crucial role as a link between program participants and THB. He willassist the participants in preparing the loan applications. His feasibilitystudies will be used by THB to determine applicant's ability to pay.

Materials Loans

19. Borrowers will have a choice of taking their loans in cash orvouchers redeemable against specific quantities of cement, corrugated ironsheets or other building materials. These materials will be available toproject borrowers at THB materials depots to be built on project sites. THEBwill procure locally available materials using its own resources and maintainadequate stocks at on-site depots. Cement, however, is a scarce commodity inTanzania; the current production of cement by the Wazo Hill factory in Dar es

ANNEX 3Page 6

Salaam satisfies only about two-thirds of the existing demand. The shortageis unlikely to be alleviated before 1980 when two new plants under construc-tion in Tanga and Mbeya will begin production. Thus, it is expected that theincremental demand generated by the project estimated at 12,360 tons overthree years will have to be covered by imports. Foreign exchange to cover theneeds of the first three years are therefore included in the project. Table2 provides an estimate of the cement requirements for the program.

20. Figure 1 presents a simplified flow chart for cement procurement.The purchase, storage and transportation arrangement will be the responsi-bility of the Procurement Officer in THB's Sites and Services Section. Inorder to design and oversee the implementation of the materials loan opera-tions a Procurement Consultant will be hired for three months (see AttachmentI for the Terms of Reference). Bulk purchases from the Saruji Corporation,which is responsible for importing cement will be made on a periodic basis.The materials will be transported by truck or railway--whichever is cheaper--and by hired rather than purchased vehicles. The initial distribution ofmaterials among project towns and sites will be based on the estimates ofdemand shown in Table 2. Subsequent shipment will be adjusted to reflect theactual pace of lending. Depots for storage of the materials will be built inthree towns where the demand is likely to be the greatest, Dar es Salaam,Tabora and Morogoro. In Tanga and Iringa storage space will be leased. Theprice for materials charged to borrowers will reflect the full cost of pur-chasing and transporting the materials and operating the depots.

THB Staffing Requirement for Project Implementation

21. In order to implement this component THB will have to increase itsstaff both in its Sites and Services Section in Dar es Salaam and in the otherproject towns. Table 3 indicates the existing staffing pattern and the newstaff necessary to carry out the program. A Procurement Officer responsiblefor ordering materials and arranging for their transportation will be added tothe headquarters staff in addition to the existing positions. A BuildingInspector and Bank Clerk will be added to the operational staff in Tabora,Tanga and Morogoro, and a Bank Clerk added in Iringa where the project lendingoperation will be modest. Staff to manage the materials depots in Dar esSalaam, Tabora, and Morogoro will also be needed. The estimated annual salarycosts for the new staff are approximately T Sh 355,000. No serious difficul-ties are expected in finding qualified Tanzanian nationals for the new posts.As part of the loan agreement THB will undertake to hire the additional staffnecessary to implement and operate the program.

ANNEX 3Attachment I

TANZANIA


Procurement Consultant - Draft Terms of Reference

Job Description

The Procurement Consultant will be appointed for a period of threemonths by THB. He (she) will be responsible for establishing the materialloan operations of THB to be implemented as a part of the Second NationalSites and Services Project. In particular he (she) will:

(a) determine the location of material storage facilities (wholesaleand retail), and the appropriate form of establishing thesefacilities (new construction, or renting of existing facilities),

(b) review the procurement arrangements for different materials, 1/determine specific procedures 2/ to be used in the program, andindicate the necessary legal and administrative steps to initiatethe procurements,

(c) review the transportation requirements of the program, determinethe appropriate mode of transport (truck or railway) anddetermine the necessary administrative and legal arrangements toensure an efficient and cheap transportation of materials,

(d) prepare an operating manual for the material loan operation whichwould detail procurement, transportation, storage and disbursementprocedures of the program, and

(e) organize the necessary training activities for THB staff (fieldand headquarters) which will operate the materials loan program.

The Procurement Consultant will report to the Managing Director ofTHB. A counterpart Procurement Officer from THB staff will be assigned towork closely with the Consultant. The Procurement Officer will be responsiblefor overseeing the implementation and operation of the material loan operation.

Qualifications

An MBA with experience in procurement and transportation planningand operations. Familiarity with building materials industry, prior experiencein east Africa, preferably in Tanzania. Proven ability to communicate quicklyand to devise solutions in situations of scarce resources.

1/ Cement, corrugated iron, bricks, joinery products.

2/ Consistent with Bank procurement guidelines and legal agreements betweenIDA and the Government regarding the project.

Table 1

TANZANIA


THB Balance Sheet as of December 31, 1975 /1

Authorried Issued & Paid 1974 Cod Acc. Net Book 1974Depreciation Valus

7. Sb.. T. She. T. Sb.. - ~~~~~~~~ ~~~~~T. Shs. T. Shs. T. She. T. Shs.T. She. T. Sbs. T. Shs. FIXED ASSETS

SHARE CAPITAL Lsnd *nd Buildings 8,247.796 972.087 7.276.708 3.733.835

100 Ordinary Shares of Shs. 1 million eXch 10000,000 28,33.178 18.720000 Pictures. Fumiture and Equipment 1.161,329 521.378 639.951 571.999- -rSroS Imlo c 100 2837 7 Motor Vehicles 393.967 167.890 226.077 119.668

-3,803.091 1.661355 8141.736 4.425,502RFSERVES Contribution to I.F.M.

C~pital 15.225 15.225 Capital Development Programme 900.000 90.000

General 887.585 646,683

Proltt rnd Loss Account 1.278.579 240.902 MORTGAGE AND OTHER LOANSTanzania Mainland 177.610.341 112.331.497

2.181,389. 902,810 Zanzibar 2.756,463 2.537.466

GRANTS: Government Revolving House Loans 4.196.055 5.001.171

German Government 450,.000 4,500.000 184,562.859 115.870.134

SIDA 2.0000D0 2,000.000 Less Provision for louses for Zanzibar Mortgages 2.020.309 1807.081

6.5D0000 5 650.000 182 542,55 11&0D3053LOAN CAPITAL 193.549.550 S

8%. Commonwalth Development Corporation 3.388.725 4195,50S THB Houahn Estats z Sal ft.109,35't

21% Cnadman Commodity 14000.000 14.000000 FNxed Term end Short Temm Deposits - 5,000.000

3j-- Workers and Fa mers Housing DevelopmentFund 31.500.000 - Debtors and Prepayments 1.491,717 566.388

Treasury (World Ba-k. credit) B00.000 -Cash at Bank and in Hand 18.764.989 477.574

Government Revolving House Loan Fund 855.800 7.852,800

Tanzania Government (Unsecured) 1,013.789 1.013,789 20.256,706 6.043.962- LESS CURRENT LIABILITIES

51.554.314 27.062.09Creditors and Accrued charges 1,068.960 1.42328

Public Deposits 127,838,777 74.614.771 Provision for Cortoration Tax 1.110.703 210,514

Housing Deposits 4,339,023 - 2.179.663 , 1.632,842

- - -Net Current Assets 18.077.043 4.411.120220,770.682 127.799,675 220.770.i82 127.799.675

8ibi Z. Fadiili. MIP. Director L. A. Sazia, M.P. Exc. Chairman

/1 Source: THB Annual Report, 1975

ANNEX 3Table 2

TANZANIA


Home Improvement and Construction Loans - Cement Requirements 1/

Number Estimated Total Amount 2/ Yearly Cement 2/of Number of Cement Requirements

Citv Loan Category Households of Loans (in tons) (in tons)

Improvement Loans 8,113 1,625 1,950 390

Dar es Salaam) Relocation Loans 1,024 615 2,310 462

Surveyed Plots Loans 14,150 4,245 10,190 2.038Subtotal 2,890

Improvement Loans 2,600 520 625 125

Tabora ) Relocation Loans 180 110 415 83

Surveyed Plots Loans 925 280 675 135Subtotal 343


Morogoro ) Relocation Loans 215 130 490 98

) Surveyed Plots Loans 810 245 590 118Subtotal 306


Iringa ) Relocation Loans 30 20 75 15

Surveyed Plots Loans 1,770 530 1,275 255Subtotal 322

Improvement Loans 660 135 165 33

Tanga ) Relocation Loans 70 45 170 34

Surveyed Plots Loans 1,330 400 960 192Subtotal 259

Summary

Improvement Loans 14,293 2,870 3,450 690

Relocation Loans 1,519 920 3,460 692

Surveyed Plot Loans 18,985 5.700 13,690 2.738

Total 34,797 9.490 20.6j0 4.120

1/ Figures rounded to nearest five.2/ See attached explanatory note for details on estimation of cement requirements.

ANNEX 3Table 2(a)

Explanatory Note on Cement Estimation

1. The figures are derived by the following calculation:

(a) in order to build a Swahili house of 100 m with concretefloor 3.75 tons of cement are required. This is obtainedas follows:

(i) floors - 100 m x .15 m = 15 m of concrete mix;assuming 1:123mix cement/sand and specific gravityof 1.6 tons/m = 2.0 tons (15 x 0.083 x 1.6);

(ii) walls = (10 m x 2.52m) = 25 m - 3 m (for doo5sand windows) = 22 m x 4 = 88 m x .15 = 13.2 m;assuming mix 1:4:8 cement/sand/gravel and specificweight as in (i) = 1.75 tons (13.2 x 0.083 x 1.6);and

(iii) floor and walls = 3.75 tons of cement.

(b) the amount of cement required for improvement is assumed toequal 1/3 of the amount needed for new conssruction or 1.2tons (based on the assumption th5t only 5 m of concretewill be required instead of 15 m in the new house); and

(c) the amount required for surveyed plots is assumed to equal2/3 of the amount required for the new house or 2.4 tons(it is assumed that, in the absence of services, inhabitantsof surveyed plots will not proceed immediately to build high-standard houses).

2. It is assumed that the total amount of cement will be supplied overa 5 year period. Hence column (4) = column (3)/5.

ANNEX 3Table 3

TANZANIA


House Improvement and Construction Loans - Staff Requirement

Salaries forExisting New New Staff

City Position Staff Staff (In T Sh/Month)

Dar es Salaam Senior Operations Officer 1 1 2,500Operation Officer 1 1 2,000Procurement Officer - 1 2,000Valuer 1 2 1,130Store Manager - 1 1,260Assistant Store Manager - 1 750Handler/Watchmen - 4 1,800

Subtotal 11 11,440

Tabora Regional Manager 1 - -Building Inspector 1 1 1,500Bank Clerk 1 1 1,130Store Manager - 1 1,260Assistant Store Manager - 1 750Handlers/Watchmen - 4 1,800

Subtotal 8 6,440

Morogoro Regional Manager 1 - -Building Inspector 1 1 1,500Bank Clerk 1 1 1,130Store Manager - 1 1,260Assistant Store Manager - 1 750Handlers/Watchmen - 4 1,800

Subtotal 8 6,440

Tanga Regional Manager 1 - -Building Inspector 1 1 1,500Senior Operation Clerk 1 - -Bank Clerk - 1 1,130

Subtotal 2 2,630

Iringa Regional Manager 1 - -Building Inspector 1 1 1,500Senior Operations Clerk 1 - -Bank Clerk 1 1 1,130

Subtotal 2 2,630

Total 31 29,580

Figure 1

TANZANIASECOND NATIONAL SITES AND SERVICES PROJECT

Flow Chart for Cement

StePs

1. Procurement order from THB to Saruji Co.

2. Delivery of cement by Saruji Co. To THB's Central Depot.3. De;ivery ot cement to on-site depots in project towns.4. Customer signs loan comnnittment and obtains cement vouchers.5. Customer takes possession of cement.6. Voucher are forwarded to THB's regional branch.7. Vouchers are forwarded to THB's headquarters.8. Adjistments ir shipment to different project towns are made.

World Bank-16847

TANZANIA HOUSING BMINK HEADQUARTERSORGANIZATION CHART PREPARED IN 1976

I EXECUTIVE CHAIRMAN

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PROi CFSS;ING l DIVISIONnGENERAL SERVICES VALUATION BANKING ECONOMIC

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ANNEX 4

TANZANIA


Small-Scale Industry Program

1. The second project will include an experimental program of assis-tance to the small-scale industry sector in Tabora and Tanga. This programwill be implemented by the Small Industries Development Organization (SIDO).It would be the Bank group's first venture into the urban informal sector inTanzania and its first involvement with SIDO. The objectives of the programare two-fold: first, to directly increase production and employment in theproject areas, diversifing the economic base; second, to strengthen SIDO'sprograms and implementation capabilities in the urban sector, particularly atthe regional level. Total costs of the recommended program including loansfor worksheds and cluster infrastructure will be T Sh 14.8 million or approx-imately US$1.8 million before contingencies. The program includes managementtraining and technical assistance, funds for hire-purchase of equipment, in-frastructure for small industry clusters, and loans for construction of work-sheds. Approximately 75% of project costs will be required in foreign exchangesince nearly all the equipment would have to be imported. This annex discussesthe program concept and institutional arrangements, program components,expected benefits and SIDO's performance and prospects.

A. Program Concept and Institutional Arrangements

2. SIDO will be the major intermediary for the small-scale industryprogram, building upon its present role as the government parastatal providingintegrated support to small industries, including management and technicalassistance through its regional staff and financial support through itsequipment hire-purchase scheme. The program will focus on increasing SIDO'sregional implementation and management capabilities, and developing projectpromotion, preparation, technical and financial assistance capability that,once refined, could later be applied in other regions throughout Tanzania.

3. The National Bank of Commerce (NBC) will not receive projectfinance; rather, it will continue in its present role, offering com-plementary working capital finance once SIDO has prepared, appraised, andapproved a small industry as eligible under SIDO's hire-purchase scheme.The small industry clients will continue to deal almost exclusively withSIDO staff in acquiring equipment, construction, and working capital loanssince NBC and THB would rely on SIDO's feasibility studies and financialpackages. Since working capital funds required would be about T Sh 4 mil-lion, no special Bank-NBC agreement will be necessary; this initial par-ticipation equals less than .01% of NBC's annual lending, and NBC's head-quarters management has stated that there would be no difficulty in extending

ANNEX 4Page 2

this amount of working capital in Tanga and Tabora nor need for a special

project agreement. The project will fund appointment of a Regional SIDOCredit Officer to do the promotion and preparation work for SIDO hire-purchase,NBC working capital and (when necessary) THB construction loans; this personcould be transferred to NBC at the point that a specialized field staff wereorganized within NPC. However, all indications from NBC Headquarters andRegional Managers are that NBC will continue to rely on SIDO to do the promo-

tional, technical and supervisory work. NBC has strong interest in sim-plifying procedures for lending to small industries and would be willing tointroduce new procedures as part of the project in Tabora and Tanga Towns.

4. Regional Focus. Since this project would represent the Bank group's

first experience working with SIDO and on small industries in Tanzania, the

small industry component will limit its scope to two project towns, Tangaand Tabora. A limited regional approach is necessary and appropriate atthis stage. Decentralized government administrative structure and the poor

internal communications make it necessary to improve regional programs andstaff. In SIDO as in most other government agencies, the regions constitutethe basic operating unit. The small-scale industry program is designed toincrease SIDO's regional and implementation capacity and develop procedureswhich later would be applied throughout Tanzania. Experiences gained from

specific training and extension methods developed and used in Tanga andTabora will be transferred through an operating manual developed as partof the program, to be used by all the regions. Improved procedures forsupervision, collections and financial controls for the hire-purchase schemewill be installed and later implemented in other regions. Low-cost workshedmodels will be designed by Ardhi in collaboration with SIDO for SSIs on andoff the clusters in Tanga and Tabora; these low-cost models could be copied inother zones to transform the costly industrial estate approach into an econom-ically viable scheme for work space.

5. In urban areas, financial and technical assistance under the programwill be available to cooperatives, associations, sole artisans, and DistrictDevelopment Corporations. The project would emphasize cooperative formationbuilding upon existing technical and marketing skills in the project areas.Cooperative groups and individuals from other areas will also be eligible. The

main emphasis of the program will be on the upgrading of managerial, accountingand marketing skills. The project will also provide new specialization and

diversification opportunities through the supply of equipment under hire-purchase program. Grouping of artisans and productive units into largerpartnerships and cooperatives that would facilitate bulk purchase of inputs,internal specialization and joint marketing will be encouraged.

6. Priority Industries. In selecting the priority subsectors,preference has been given to industries utilizing local resources; employ-ing labor-intensive technology; building upon existing technical skills

ANNEX 4Page 3

while increasing specialization and/or market reach; developing forwardand backward linkages with existing larger industries in project towns;and meeting regional demand for items traditionally imported into the region.Particular emphasis was placed on industries that would enhance urban-rurallinks and seLve surrounding rural areas and on the development of the buildingmaterials industry.

7. The detailed list of selected industries is shown in Tables 1 and 2of this Annex. Selection was done in cooperation with SIDO's staff and isbased on an analysis of the regional potential of Tanga and Tabora. BySeptember 30, 1977, SIDO will prepare at least ten feasibility studies forreview by IDA. These feasibility studies will give special emphasis tomarket potential and channels, raw material sourcing, criteria for selectionof participants, and organization aspects. Consultants support for additionalproject preparation is available under technical assistance (see para 29below).

8. Some of the priority industries will be located in clusters nearthe project areas; in Tanga the designated small industrial zone is betweenthe two project areas of Gofu Juu and Mwakizaro, while in Tabora the smallindustry area is in the project area of Kiloleni (see para 18-20 below).Other selected small industries will be scattered throughout the wards ofeach town, but organized into cooperatives or joint ventures, forming networkswith common facilities for storage of raw materials and finished products aswell as for specialized machinery which individual small industry cooperativescannot afford.

9. The priority industries provisionally selected for Tanga will:

(a) use waste or by-products from the parastatals (e.g.shorts from the steel rolling mill for nuts, bolts,hinges, and structural steel; gypsum board and plasterof paris from wastes of the fertilizer plant; and edu-cational equipment from the shorts from the sawmill;

(b) process some agricultural products (e.g. salt refining,coir and sisal mats or ropes) and other natural resources(wood industries, lime-based construction materials);

(c) manufacture products and implements needed by agriculture,e.g., sisal knives, husking blades; and

(d) provide construction material and hardware materials,e.g., nuts, bolts, hinges, lime building material,joinery products.

ANNEX 4Page 4

10. In Tabora, the proposed priority industries would:

(a) specialize in products utilizing local resourcesof cotton, wood and lime;

(b) supply needed services such as general engineeringworkshops and garage;

(c) respond to the local demand for educational supplies,agricultural implements and packaging.

B. Program Components

11. The small scale industry program for Tabora and Tanga will involvethree major components: (a) expansion of SIDO Management Training and Tech-nical Assistance programs and staff at the regional level to increase imple-mentation capacity in the towns without diverting resources from the develop-ment of rural industries; (b) funds for SIDO's program for hire-purchase ofproduction equipment and purchase of critical raw materials for participatingsmall industries; and (c) infrastructure for the industrial clusters as wellas provision for credit from THB for loans for low-cost industrial structuresand sheds. The costs of the program are summarized in Annex 6, Table 12.

Management Training and Technical Assistance

12. Management and technical apprenticeships and training materials forshort, practical courses, e.g., on accounting or financial management, willbe funded under the project. In Management Apprenticeships, a prospectiveindustry manager or cooperative chairman could spend one to three months witha successful industry with similar product lines and ownership structures tolearn the general management methods and problems in getting raw materials,finding markets, managing money, organizing the work, costing products, etc.The project will pay the participants' transportation and subsistence costsas well as a stipend to the industry offering the the training.

13. Project Implementation and Training Coordinators in each town willbe responsible for identifying and organizing productive groups which wouldparticipate in the industrial clusters and networks. The Coordinator willalso be responsible for the start-up of the industries and for on-going manage-ment assistance to the industries in Tanga and Tabora towns promoted under theproject. Working with Ardhi and appropriate regional and national administra-tions, he will oversee the orderly settlement on the clusters and insure thatthe service and facilities provided are properly maintained. In addition, hewill work with the Technical Adviser developing training programs and super-vising management apprenticeships, short practical courses and exchanges amongartisans. Project Technical Advisers will be hired (probably from outsideTanzania) in both Tanga and Tabora towns for a period of up to two years.They will assist the Coordinator in starting new production cooperatives and

ANNEX 4Page 5

other industries and will focus on developing management assistance andtraining programs for cooperatives and SSI networks. In addition, they willbe responsible for developing an operating manual for technical assistance andtraining program which could be used in other regions to assist small-scaleindustry activities.

Hire Purchase of Equipment

14. This component will build upon SIDO's existing Equipment Hire-Pur-chase and Raw Material Bank Programs (see para 27(d) below). Over 85% of T Sh7.8 million worth of equipment and raw materials made available under theproject will require foreign currency. About 60% of these funds have beenallocated to specific priority industries within the industry clusters andnetworks (see Section A), while 20% will be available for incremental equip-ment for existing small industries and for other subprojects (whose feasibil-ity would be determined during the course of project implementation) and 20%for critical raw materials difficult to obtain through normal distributionchannels. In addition, funds will be provided for contracting to installequipment and provide critical technical training on the more unfamiliarmachinery. While most of the industries involve labor-intensive technologies,nearly all of the equipment is imported and about half of the industries inthe clusters would require assistance by the equipment suppliers in installingand technical training. SIDO has positive experience contrating foreignmachinery suppliers for this role.

15. SIDO and its predecessor, the National Small Scale Industry Cor-poration, have had hire-purchase schemes. With the one to two years graceperiod, collections to date have been limited; however, analysis of theportfolio shows that arrears rates are below 10%. Funds for the hire-pur-chase program have recently been made available from various outside sources(see para 28 below), and there is a need to formalize and standardize lendingand repayment procedures and terms and to establish a revolving hire-purchasefund within SIDO. The project will provide assistance for this task.

16. Project Coordinators in each town will be responsible for iden-tifying and organizing new productive groups which would participate in theIndustrial Clusters and networks. They will also be responsible for coordi-nating the start-up of the industries and providing on-going managementassistance to the new industries promoted in Tanga and Tabora under theproject. They will be assisted by Project Implementation Advisers instarting new production cooperatives and other industries.

17. Project Economist within SIDO's Tanga and Tabora offices will beresponsible for preparing feasibility studies and financial packages includingnecessary equipment, credit and construction financing. The Project Economistwill be the project participants' link with NBC and THB, facilitating theprocessing and repayments of credit.

ANNEX 4Page 6

Infrastructure for Industrial Clusters

18. To provide the needed space and infrastructure for small indus-tries, three hectares (adjacent to the project areas) have been set asideas small industries zones; in Tanga the designated small industrial zone isbetween the two project areas of Gofu Juu and Mwakizaro, while in Tabora,the allotted small industry area is in the project area of Kiloleni. Theproject will provide funds for basic infrastructure--preparation of land,roads, electricity, water supply and sewerage. Cost per hectare would beabout T Sh 110,000 (US$13,000) before contingencies. The infrastructure willbe supplied as a part of the upgrading works in project towns. Services onand off clusters will be maintained by appropriate regional and nationalagencies (Ardhi, Tanesco, Comworks, Regional Water Supply).

19. Traditional industrial estates often involve expensive buildingswith costs exceeding the price of machinery and equipment. It is estimatedthat building costs could be reduced to T Sh 700 (US$84) per square meter byusing a combination of traditional building materials and earthern floors,with cement floors as needed for machinery. In several industries plannedfor industrial clusters, basic infrastructure, combined with constructionof basic workshops and sheds with security are all that are needed. Inorder to minimize costs, project participants will assume the responsibi-lity for actual construction of sheds.

20. T Sh 2.8 million (US$330,000 million) will be available to financelow-cost sheds in Tabora and Tanga towns, on and off the clusters. Loans ofup to T Sh 120,000 will be made to program participants at interest rates of8% with maturities of 15 years and up to two years' grace. Security and downpayments will be lower than THB's normal requirements for commercial under-takings given the reduced size and new nature of the enterprises. Ardhi willprovide low-cost designs to meet the needs of various types of industries.Local Project Coordinators will supervise construction with the assistance ofSIDO's staff.

C. Expected Benefits

21. The small industry component will provide benefits in increasingemployment, incomes and production in Tanga and Tabora Towns. The component'sincremental employment of 870 people over 3 years would cost US$650 in fixedinvestment per position created and less than US$1,000 including initialworking capital needs and technical assistance. This employment figureincludes those who were previously seriously underemployed. The majorityof the priority industries represent new product lines in these regions andoften in Tanzania as a whole; however, they build upon existing skills andresource base. Many of the industries use local resources as inputs process-ing them into finished products which were formerly imported; therefore, theprogram will result in savings of foreign exchange for inputs and increaselocal value added.

ANNEX 4Page 7

22. One major objective of the program is to strengthen SIDO's regionalimplementation capacity and to develop methods in Tabora and Tanga which canbe applied elsewhere. The institution building benefits would include devel-opment of:

(a) new, improved training and extension methods, transmittedto other regions through manuals and seminars;

(b) regional management and implementation capabilities inurban areas through addition of staff to perform keyfunctions;

(c) financial management under the hire-purchase scheme;

(d) low cost workshop clusters and networks to replace thecapital intensive industrial estate approach formerlyfavored;

(e). coordination among SIDO, ARDHI, NBC and THB.

D. SIDO's Performance and Prospects

23. SIDO - Background and Organization. The small scale industryprogram will be implemented by the Small Industries Development Organization(SIDO). SIDO is a parastatal under the Ministry of Commerce and Industry.It replaced the national Small Industries Corporation (NSIC), establishedin 1966 as a subsidiary of the National Development Corporation (NDC).According to a 1974 directive on small-scale industries, SIDO should notrun or own any industries. Rather, its role should be to render servicesto new and existing small scale industries. Consequently, SIDO attemptsto assist all forms of the small-scale industry from simple self-employedartisans to small factories, during all stages of their activities.

24. SIDO is headed by a Director General who reports to a Board ofDirectors headed by a Chairman who at present also serves as the JuniorMinister of Industries. The Director General is assisted by three Depart-mental Directors of Research and Planning, Training and Marketing and Admini-strative and Account Section. A small extension service has been estab-lished in each region, staffed by one Small Industry Promotion Officer (SIPO)and one Training Officer. Complementing the regional staff, there are ZonalEconomists covering three to four regions. The organization of SIDO is shownin Figure 1.

25. SIDO's Performance. SIDO has been in operation for too short aperiod to permit a definitive judgement on its performance and effectiveness.Assistance to the small-scale industries is an experimental area in which fewcountries have accumulated solid and transferable experience. Establishmentof programs and staff to assist small-scale industries is a long process.

ANNEX 4Page 8

At present, large variations exist among regions in the quality of programsand considerable improvements in SIDO strategic planning and staff are neededto increase its impact on SSI development in urban and rural areas. Untilrecently, physical development has been emphasized with 70% of SIDO's budgetin 1974/75 allocated to construction of industrial estates and urban workshopsin some regions. Additional attention is needed in initial organization ofindustries, their management, quality control and marketing of final products.Coordnation with other agencies and regional authorities is often insufficient.Project preparation skills are generally satisfactory, although more attentionshould be given to problems of marketing and organization.

26. These problems can be partially attributed to the scarcity of quali-fied manpower and resources. They also reflect the ambiguities of the originalstrategy of SIDO and its evolution. One of the main ambiguities concerns theownership of industries. In ujamaa villages small industries can only beoperated by cooperatives, while in urban areas individuals and small partner-ships as well as cooperatives are eligible for assistance. A related problemis the role of small-scale industry in the national development strategy;large parastatals are often promoted to meet the same demand as are the smallindustries promoted by SIDO. Furthermore, no clear choice appears to havebeen made between the view of small-scale industry as a social servicewhich provides employment and education, but whose economic viability issecondary and which is to be subsidized; and a view of small-scale industry asan economic viable entity, which has to satisfy the vigorous test of competi-tion and which is not to be subsidized beyond a short start-up period.

27. The services SIDO is providing include:

(a) Industrial consultancy and marketing services providedby Regional SIDO staff.

(b) Training. Eight training-cum-production centers are presentlyin operation, including one in Tabora, Muhezg and Tanga. Theyserve as training and industrial extension nuclei, whileproducing goods for local consumption. In addition SIDOprovides basic training of long duration and short refreshercourses for its staff. Until 1975, 55 engineering staffhave been sponsored abroad (mainly in India) for specialisttraining.

(c) Industrial Estates and Clusters. SIDO is presently engaged inthe implementation of several industrial estate and production-cum-training projects and has plans to take up five moreprojects during the Third Five-Year Plan. A T Sh 4 millionestate in Dar es Salaam has been recently completed, as wellas a smaller estate in Songea. In Tanzania's Five-YearPlan, SIDO is committed to developing industrial clusters ofestates in each regional center. These and other expansionplans of SIDO would require continued external as well asinternal financing.

ANNEX 4Page 9

(d) Hire-Purchase Programs for Machinery. SIDO has asmall hire-purchase program. SIDO's budget for 1975/76included about T Sh 20,000 per region for hire-purchaseto small-scale industry but internal and externalfunding has since increased. An initial deposit of 10% isrequired prior to delivery. The balance is lent at 5%for three to seven years (with up to one year grace period)depending on the size of the loan and type of machines. Therepayment record appears satisfactory with arrears to dateless than 10%.

(e) Government Purchase Program. Government departments andparastatal organizations are the largest buyers of indus-trial products. Following a 1974 directive, SIDO arrangeda program in which government agencies are encouraged togive preference to purchases from small industry producers.In 1974, over T Sh 3.2 million worth of goods produced bysmall-scale industries were purchased through SIDO.

(f) Raw Materials Supply. At present SIDO supplies its work-shop network with raw materials and plans to extendthis service to other small-scale industries, using theoutlets of the Regional Trading Companies as well asdeveloping one or two Raw Material Banks for scarce items.

28. SIDO has a variety of funding sources (including Treasury, India andScandinavian countries), each with a different perception of needed programsof small industries and making funds available at different costs. SIDO facesa major challenge in developing an integrated strategy and standardizedinterest rates for its hire-purchase program.

29. While the proposed program will be on too limited a scale to allowfor short term, direct impact on SIDO's national strategy, policies andorganization, the program will be used as an instrument of dialogue withSIDO on these matters and regional approaches can form the basis for overallreform in policies and procedures. Efforts will be made to strengthen SIDO'scapability in these areas where weaknesses have been acknowledged. Theproject will focus on the regional level of SIDO operations and place strongemphasis on managerial assistance and the process of project identificationand selection of participants. Assistance will also be provided to SIDO'sheadquarters:

(a) to develop effective methods of management assistance to thesmall-scale industry especially to cooperatives, on industrialclusters, and off clusters, to decentralized networks ofindustries;

(b) to improve the procedures, structure and performance of thehire-purchase program and to formulate guidelines on lendingto small-scale industry; the interest rate will be increasedfrom 5% to 8% in order to bring it in line with interestrates charged by NBC;

ANNEX 4Page 10

(c) to formulate a policy on the development of ancillaryindustries; and

(d) to reinforce its marketing and management assistancecapabilities.

30. Toward a Small-Scale Industry Project in Tanzania. SIDO wouldalmost certainly be the prime mover if the Bank group eventually decided tofund a nationwide small industries project in Tanzania. The major financialintermediary could be NBC with SIDO providing project promotion, preparation,evaluation, technical, management, and marketing advice and organization.SIDO's management has stated that it would be amenable to the eventual estab-lishment of a small industry fund within NBC. In this case, SIDO's hire-purchase would most likely be maintained for use by small industries whichrequire small amounts of equipment to complement new product developmentor product upgrading efforts.

31. Several major changes would be required in NBC's strategy, staffingand procedures before it could be expected to function as the major financialintermediary for small industries. Until now, NBC has little commitment toand experience in lending to small industries. Until 1975, NBC had lent lessthan US$10,000 to small industries; in 1975-76 NBC's lending to small indus-tries increased, but the amount was about US$1 million, less than .O1X of itstotal annual lending. Most of NBC's small enterprise clients are retailoutlets which require standard working capital, usually keep books and requirelittle active involvement by NBC.

32. A major limitation of NBC is its charter to lend only for workingcapital needs; there was a small hire-purchase fund, which has been discon-tinued in the regions visited due to lack of promotion. The headquartersand regional managers claim that at present they would not be able to lendfor equipment or worksheds. Board-level discussions had been held on thepossible request for a change in NBC's mandate to include investment andworking capital, but no quick decision was foreseen.

33. NBC has no specialized small industry staff or program; the accountsdepartment at both headquarters and regional branches handles agriculture,commerce, large and small industry loans. In small industries, NBC reliesalmost completely on the project appraisals of SIDO staff, with NBC providingcomplementary working capital to SIDO's hire-purchase clients. Recognizingtheir lack of personnel with experience in small industry lending, NBC'smanagement recently sent one member of their technical staff to India tostudy small industries. This lack of specialization precludes NBC's activepromotion or information dissemination about the availability and terms ofcredit to small industries. It also hinders the development of the projectpreparation, technical and management assistance and loan supervision capa-bilities that are needed to develop small industries in Tanzania. While SIDOcan do most of the extension work, some specialized small industry unit wouldbe needed within NBC to appraise projects SIDO prepares, provide some super-vision and act as a link between SIDO and NBC.

ANNEX 4Table 1

TANZANIA


Small Scale Industry Development--Some Selected Priority Industries

TANGA

No. of Equipment IncrementalUnits Investment Employment

(T Sh '000)

CLUSTERED INDUSTRIES

Metal workshop, AgriculturalImplement Specialization 1 220 14

Nuts and Bolts 1 250 10Building Hardware (e.g. hinges) 1 110 20Steel Structures 1 150 18Gypsum Board 1 120 15Plaster of Paris 1 100 10Chalk 1 110 20Pencils 1 170 12Salt Refining 1 110 15Joinery products, furniture 1 90 15

Subtotal 10 1,430 149

INDUSTRY NETWORKS AND OTHERDECENTRALIZED INDUSTRIES

Readymade childrens' clothes 10 200 50Coir ropes, sisal mats etc. 20 270 100Blacksmith units specializing

in sisal knives, husking blades 6 180 30Building materials 3 100 30

Subtotal 39 750 210

INCREMENTAL EQUIPMENT FOREXISTING INDUSTRIES

Leather 5 110 20Mechanics 4 120 16Carpenters 5 110 20Others 15 550 60

Subtotal 29 890 116

TOTAL 78 3,070 475

ANNEX 4Table 2

TANZANIA


Small-Scale Industry Development--Some Selected Priority Industries

TABORA

No. of Equipment IncrementalUnits Investment Employm-ient

(T Sh '000)

CLUSTERED INDUSTRIES

General Engineering + Garage 1 220 12

with foundrySawdust Briquettes 1 100 15

Poultry feed 1 100 12Wooden Bobbins 1 220 20

Wooden Products - Ed. Supplies 1 70 15

Joinery Products 1 70 15

Cotton Surgical Bandages 1 40 12

Lime Kilns, Lime Building materials 1 70 20Groundnut Oil 1 110 20Building Hardware (hinges, ect.) 2 120 25

Sheetmetal - tins, stoves, 1 130 20

(and others)Thread Reels 1 40 5

Subtotal 13 1,290 191

NETWORK AND HOME INDUSTRIES

Handloom weaving 10 220 50

Powerloom 5 300 25

Hand Knitting 5 130 25

Readymade Garments 10 230 50

Woodworking specific products(e.g., Beehives) and educationalsupplies 10 160 60

Subtotal 40 1,040 210

TOTAL 53 2,330 401

TANZAN IA

SECOND NATIONAL SITES AN. SERVICES PROJECT

Sn'2a1-Scale Indust-' DeveloDmer.t

Organizetion of SIDO

BOARD OF DIRECTORS

Administretive Manager

__ D I RECTOR:5ENERAL tAccountant

DIRECTOR OF DIRECTOR DIRECTOR OFRESEARCH AND ACCOUNTS OF MARKETING

PLANN I NG DEPARTMENT TRA IN ING SERVICES

Manager F anager Manager Marae r cManager ManagerEcornomi c Technical Development Recurrent Staff Client Handicrafts of ofServices Services Accounts Acccunts Developnt Development Development Marketing Supplies

REGIONAL EXTENSICI SERVICES (20)(SllALL INCUSTRIES PROMOTIGN GFFICES) SIFO)

(DI

_ _ _ _ _ . _ .. _ _ _ . . . _ _ . . _~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~H

ANNEX 5

TANZANIA


Implementing Agencies andProject Organization and Management

1. This Annex provides a brief overview of the principal implement-ing agencies and describes the administrative arrangements for the proposedproject. The distribution of responsibility for various administrativefunctions described in the Annex is summarized in Figure 1 and an implemen-tation schedule is presented in Figure 2.

2. Responsibility for project implementation will be shared betweenthe Ministry of Lands, Housing and Urban Development (Ardhi), which will bedesignated as the Executing Agency with overall responsibility for theproject, and the decentralized administrations in each project town.

A. Central Project Administration

Ministry of Lands, Housing and Urban Development

3. Ardhi has overall responsibility for formulating and implementingpolicies for urban development, particularly with regard to land use andhousing. It also assists the Prime Minister's Office in administering landdevelopment in rural areas. In 1973 Ardhi was reorganized and some of itsstaff decentralized as part of the regionalization of the Tanzanian Govern-ment. Ardhi's current organization is indicated in Figure 3 and recent ex-penditure patterns are shown in Table 1. 1/

4. The ministry is confronted with a severe shortage of trained staff(see Table 2). Less than two-thirds of the ministry's approved non-adminis-trative posts in the technical grades are currently filled. The ArdhiInstitute, which began as a Survey Training Center, has been expanded toprovide training in urban and rural planning and land economics as wellas surveying. The institute currently has 21 faculty members. In 1976approximately 75 students received professional diplomas after three yearsof study, while another 100 earned subprofessional certificates in surveyingafter a two-year course. The first diplomas and certificates in housingdesign, construction and management will be granted in 1979. The instituteplans to train 342 diploma graduates and 520 certificate-holders by 1980.The first project includes US$280,000 for expansion of the institute'sfacilities.

1/ The reorganization of the ministry and its current organization arediscussed in Annex 2 of the appraisal report for the first project.

ANNEX 5Page 2

Sites and Services Unit

5. The Sites and Services Unit will have operational responsibility forthe planning and implementation of the project, as it did for the firstIDA-financed project. Although it has handled the design and construction ofthe physical components of the first project satisfactorily, there have beendeficiencies in other aspects of project implementation. First, the socialaspects of the project have been given inadequate attention. At least par-tially because they were not given assistance in relocating, a substantialproportion of the families whose units were demolished because of upgradingworks have squatted elsewhere or become renters rather than moving to theserviced plots allocated to them.

6. Secondly, the Project Manager has been over-burdened. Althoughthe unit is responsible for almost half of the ministry's developmentexpenditure, it had only sectional status and was headed by a fourth-tiermanager. The Project Manager was frequently given assignments not relatedto the project and did not have authority for independent action commen-surate with his units' responsiblities.

7. Thirdly, insufficient attention has been paid to financialmanagement. Records have not been adequately maintained. The turnoverof accountants has been high and currently the position is filled by anaccounts assistant, who lacks qualification.

8. Fourthly, insufficient guidance and support has been given tolocal project administrators. A systematic approach to local projectmanagement has not been developed, and there are no well established linesof communication between Ardhi and local administrators. Consequently,problems have had to be dealt with on a sporadic, ad hoc basis.

9. Finally, although the Monitoring and Evaluation Team has provideduseful feedback about project implementation, problems of communicationand unclear responsibility have arisen because the team is supposed toreport to the Principal Secretary rather than to the Project Manager.Furthermore, they cannot act as the Manager's representatives to recom-mend remedial actions when problems are identified during site visits.

10. In order to overcome these deficiencies in the proposed project theSites and Services Unit will be restructured and upgraded to divisional statuswithin the ministry (see Figure 4). Project management and community develop-ment capabilities will be strengthened primarily by shifting established postsinto the new sections and converting a few of them into more senior positions.The reorganization was approved by the Ministry of Manpower Development forthe beginning of the 1977/78 fiscal year. The organization plan adds onlythree new technical positions to the unit, but will increase recurrent expen-diture by 15-20% due to the upgrading of some posts.

ANNEX 5Page 3

11. The Division's Planning Section will function much as the existingunit does. The section prepared preliminary site layouts and has been review-ing the consultants' preliminary engineering and making appropriate modifica-tions. Plans for the community facilities in the upgrading areas will beprepared in consultation with the appropriate ministries and regional offi-cials. The section will also work with local officials to select sites andprepare layouts for the surveyed plot program.

12. Because of the Engineering Section's limited capability, consult-ants (John Burrow and Partners) were hired to prepare preliminary engineer-ing designs for the proposed project, and the detailed engineering and somesupervision will also be handled by consultants. The engineering consult-ancy contracts have been used to supplement on-the-job training begun underthe first project. Five of the first six trainees were seconded to work onpreliminary engineering and supervision with consultants, and the contractfor detailed engineering will incorporate similar opportunities for someof the twelve remaining trainees. The capabilities developed through thetraining program will enable the Engineering Section to assume some of theresponsibilities, such as the engineering for communities facilities andthe supervision of contractors at a few sites, handled by consultants inthe first project.

13. Management and community development functions relatively neglectedduring the first project will be strengthened under the second project. Threemanagement functions will be given particular attention. First, financialmanagement will be strengthened through recruitment of a Financial Analystusing project technical assistance funds. The Financial Analyst will beresponsible for the maintenance of project accounts and preparation of reports,budgets and cash flow projections and will be supported by a Tanzanian AccountsAssistant.

14. Secondly, more attention will be devoted to systematic monitoringof project implementation and identification of problems needing specialattention. (see Annex 11) Effective performance of this function willdepend on the development of a simple management information system to provideinformation to Ardhi and guide local administrators in planning and implement-ing the project. In order to familiarize local administrators with projectimplementation, the section will prepare a brief management handbook, includ-ing standardized planning and reporting forms, and conduct an orientationseminar in Dar es Salaam for local project administrators. The first draft ofthe handbook was prepared between the appraisal mission and negotiations. Theunit will prepare periodic reports on the progress of project implementationin each city based on standardized reports prepared by local administratorsand occasional visits to the cities.

15. Finally, research studies will be conducted on specific topics whichcannot be monitored adequately through normal procedures. In order to carryout these studies funds will be provided for hiring temporary interviewers,reproducing questionnaires, and processing data.

ANNEX 5Page 4

16. The community development and lands staff will be responsible forthe social aspects of the project and will work closely with local officialsto ensure their effective implementation. Their specific responsibilitieswill include publicity for the project, allocations and titles for the sur-veyed plots, registration of squatter houses and preparation of titles, thevarious forms of on-site assistance to be provided to residents in the projectareas, and the formation of housing cooperatives. During the planning phaseof the project, they will develop guidelines and prepare information materialsfor the social components and work with local officials to plan their imple-mentation. They will also visit the towns periodically to monitor progressand provide assistance.

17. On-Site Assistance. Considerably more attention will be givento explaining the project to community residents and to providing on-siteassistance than in the first project. The Sites and Services Unit willprepare guidelines and standard information materials and work with localofficials to develop integrated service programs consisting of some or all ofthe following elements:

(i) publicity about the project, emphasizing provision ofcompensation and relocation assistance to householdsdisplaced by the improvements, procedures to be followedin the registration of houses and the availability ofTHB house improvement loans;

(ii) type plans for house improvement and construction, whichwill be sold at the site offices at prices set to recoverreproduction costs;

(iii) three to five demonstration houses, including scale modelsshowing different stages of construction, in each city;

(iv) technical assistance in house improvement and constructionto be provided by artisans;

(v) relocation assistance to households displaced by upgradingworks, including early payment of compensation and selectionof an alternative site, assistance in applying for.a THB loan,and transportation for moving possessions; 1/ and

(vi) assistance in the formation of housing cooperatives, to beprovided by local Cooperative Officers following guidelinesdeveloped by Ardhi.

These forms of assistance will be available through site offices inthe demonstration houses.

1/ A truck to be purchased by Ardhi for transporting the Mobile SurveyCrew from town to town will also be used to relocate displacedhouseholds.

ANNEX 5Page 5

18. S;veying for the surveyed plot program will be done by an ArdhiMobile SUGVz7 Crew consisting of three surveyors and ten technical assis-tants. Field assistants will be supplied by the Regional Surveyors or hiredlocally, and survey students from Ardhi Institute will gain field experienceworking with the program. The crew will be organized in two teams, eachconsisting of 5 technical assistants and 20 field assistants under a sur-veyor. It will alternate between trips of two to three months to the regionalcapitals and periods of work in Dar es Salaam. As indicated in para 5.04 ofthe report the Sites and Services Unit will be responsible for the overallscheduling and coordination of the surveyed plot program.

B. Local Project Management

19. In 1974 Tanzania's administrative and political structures weredecentralized in an effort to shift important decision-making power to localbodies. The structure now consists of the Central Government, 20 regions,over 70 districts and sub-districts in some localities. Among projectcities, Dar es Salaam is a separate region with three districts, Tangais a district, and Tabora, Iringa and Morogoro are sub-districts.

20. Figure 5 provides a schematic overview of the national administra-tive structure. At both the regional and district levels teams of functionalofficers operate under the leadership of Development Directors. Sub-districtteams are led by Assistant District Development Directors (ADDD's) and havefewer functional officers. Planning Officers responsible for financialplanning and administrative coordination assist the Development Directors.Although the functional officers follow policies set by their ministries,they are responsible to their Development Directors for local administrativematters.

Local Project Management: Overview

21. In the first project primary responsibility for local project ad-ministration was assigned to the Regional Land Development Officers (RLDO's).These offices are part of the regional administrations under the RegionalDevelopment Directors (RDD's) and are responsible for physical planning,surveying, land valuation, and allocations. Experience with the localadministration of the first project has indicated two general shortcomingsof this arrangement. First, no single local official has explicit overalloperational responsibility for the local implementation of the project,resulting in ambiguities about responsibility for solving problems andcommunication difficulties locally and with Ardhi. Second, there is noformal mechanism for ensuring that the various local officials who needto be involved in the project make the required inputs on schedule.

ANNEX 5

Page 6

22. A more formal, systematic approach to local project managementwill be employed in the proposed project. Teams of local officials underthe direction of Project Coordinators designated by the RDD's will beresponsible for local implementation. The Assistant Development Officer,District Planning Officer or one of Ardhi's decentralized staff members willbe designated Project Coordinator. The Coordinators' responsibilities will beto plan local project implementation with assistance from the Sites andServices Unit, to coordinate the activities of the various local officialsinvolved in the project, and to monitor progress and submit periodic reportsto their RDD's and Ardhi. The Coordinators will either establish formalProject Committees or rely on less formal coordination mechanisms.

23. The Project Coordinators are not expected to devote full timeto the projects; their involvement is likely to vary from a few hours toseveral days a week. A Site Officer (a junior official with technicalskills in construction) will be appointed in each project town to assistthe Coordinator and to ensure a continuous administrative presence in theproject communities. The Site Officers (as well as other officials) willwork out of demonstration houses to be built on the sites. The Site Officersrepresent the only increment to the local administrations planned for thelocal management of the projects. Other officials will participate inproject execution as part of their regular administrative duties.

24. The success of this approach to local project administration willbe heavily dependent on the guidance and support provided by the Sites andServices Unit. The orientation seminar in Dar es Salaam for local projectadministrators will provide an opportunity to familiarize them with adminis-trative requirements of the project. The management materials prepared forlocal administrators will identify the major tasks in project execution,indicate their interrelationships, and suggest simple management tools such asplanning and monitoring charts. A project implementation schedule worked outbetween the local administrators and Ardhi will indicate specific targetswhich can be used to plan local activities and to monitor progress. Themanagement assistance to be provided to Ardhi under the project is describedin Annex 8.

Upgrading Program

25. Tenure. House-owners in the upgrading areas will be issued titlesbased on house rather than plot occupation. 1/ The titles will be issuedfor five years and normally be renewed automatically. They will specify

1/ Tanzania's land tenure system is described in Annex 6 of the appraisalreport of the first project. The most salient features of the systemare that land was nationalized in 1963 and that land use is normallygoverned by short (usually annual) or long-term (usually 33 years)rights of occupancy issued by Ardhi.

ANNEX 5

Page 7

annual charges which can be revised with six months advance notice. Title-holders will be obligated not to erect additional buildings or transfertheir holdings without permission from the District Land Office. The titleswill be convertible to standard rights of occupancy if the holder arrangesfor the effective plot on which the house stands to be surveyed and registered.House-owners will be required to pay fees of approximately T Sh 90 for titlepreparation and registration and stamp duty in order to obtain a title. Thelegal title form to be used to grant tenure in the upgrading areas was re-viewed and revisions agreed at negotiations. 1/

26. The Site Officers will work closely with local leaders to ensurecommunity involvement in the project. CCM is organized in ten-house cellsat the local level and is particularly strong in some of the projectcommunities. In 1977 Ward Assemblies and Councils will be elected accordingto the Urban Wards (Administration) Act, 1976. These bodies are intendedto complete the process of decentralization by creating popular bodieswhich can participate in decision-making at the grassroots level in theurban areas. Either the Construction and Transportation Committee whicheach Ward Council must establish or a specifically constituted projectsubcommittee will serve as the principal formal link between the communityand the project administration. Working relationships will be developedwith key local leaders.

Surveyed Plot Program

27. Allocation of Plots. The RLDO's are responsible for the allocationof surveyed plots. Arrangements for allocation of the plots included in theprogram will begin before completion of the surveying. Because the program

will involve a substantial number of new plots, their availability will bepublicized in existing low-income communities, and information about house-holds on the waiting list will be updated. Final decisions about alloca-tions are made by District Allocation Committees consisting of administrators,elected representatives and CCM officials on the basis of files preparedby the RLDO's.

28. Allocations will be made on the basis of a point system weightedto favor households with monthly incomes below T Sh 1,000 (US$120) a month.It is Government policy to promote mixed-income communities and housingopportunities are scarce for even better-off households in Tanzania becauseof the weakness of the private sector. Therefore, although applicants in the

1/ The legal form will be called an "Offer of a Right of Occupation andUse". This type of instrument is normally used for land which can beadequately identified even though it has not been surveyed. R.W. Jamesnotes that "the expression 'offer of a right of occupancy' is misleadingbecause the document is not a mere offer, but it is a final documentembodying agreed terms" (Land Tenure and Policy in Tanzania, p. 122).

ANNEX 5Page 8

target group will be given preference, households with monthly incomesover T Sh 1,000 will not be absolutely excluded. Other criteria to beconsidered, but given lower weightings in the point system will includenumber of dependents, employment status and length of time on thewaiting list for plots. Assurances were obtained from Government atnegotiations that the allocation procedures will give strong preferenceto households in the target income group.

29. Tenure. Following Government policy, long-term rights of occupancyissued for 33 years will be employed in the surveyed plot areas. Responsibil-ity for the issuance of rights will be shared between the Land Offices andArdhi following standard procedures. Allottees are informed of their selec-tion and receive a Letter of Offer specifying fees which must be paid toobtain title. Based on annual Land Rent and Service Charges of T Sh 75 forunserviced plots, these fees typically amount to about T Sh 130 plus the LandRent and Service Charge due for the remainder of the year (Table 3). However,Ardhi has agreed to revise the survey fee schedule during 1977 to recover theactual average cost of surveying plots and the review of the Land Rent andService Charge is likely to result in higher annual charges. Therefore thelevel of the initial fees will also increase. If the fees are not paid withina month, the Government is entitled to reallocate the plot.

30. After being notified that an allottee has paid the required fees,Ardhi's Land Development Division in Dar es Salaam assigns a Land OfficeNumber to the newly opened plot file, secures a deed plan from the SurveyDivision and prepares a Certificate of Occupancy. The certificate is thensent to the Land Office and the allottee is notified to report to sign it.The signed certificate is then returned to Dar es Salaam for the signatureof the Director of Land Development Services and forwarded to the Registrarof Titles who registers it and returns a copy to the allottee.

ANNEX 5Table 1

TANZANIA


Ministry of Lands, Housing and Urban DevelopmentRecurrent and Development Expenditure (TSh'000)

1973-74 1974-75 1975-76 1976-77 1/

Recurrent Expenditure

1. Administration and General 2/ 2,334.7 3,401.1 4,588.1 6,299.5

2. Surveys and Mapping 4,139.1 4,969.4 4,396.2 4,265.73. Land Development Services 2,800.3 3,283.1 3,430.3 3,715.44. Urban Planning 601.0 1,031.1 1,475.3 2,082.8

5. Housing Development 256.6 459.8 862.6 1*441.06. Housing and Building

Research Unit 183.7 452.8 582.0 783.4

TOTAL 10,315.4 13,597.3 15,334.5 18,587.8

Development Expenditure

1. Surveys and Mapping 15,455.2 10,007.7 4,601.6 9,000.0

2. Economic Infrastructure,Dar es Salaam & Arusha 11,526.0 2,041.8 4,993.0 13,550.0

3. Urban Planning 171.6 286.1 330.4 1,400.04. National Sites and

Services Program 3,409.1 10,397.5 27,009.0 33,120.05. Expansion of Ardhi Institute 1,031.5 2,837.0 9,219.9 3,040.06. Housing and Building

Research Unit 785.0 729.1 827.8 940.07. National Housing Corporation 5,120.0 - 6,144.6 7,100.08. Registrar of Buildings - - - 5,800.0

TOTAL 37,498.4 26,299.3 53,126.2 73,950.0

1/ Approved expenditure. During 1973-76 the average deviation between

approved and actual recurrent expenditure was 1%; actual developmentexpenditure averaged 16% less than planned.

2/ Includes Ardhi Institute, which accounted for 80% of the increase inrecurrent expenditure for this category between 1973-76.

Source: Ardhi.

TANZANIA

SECOND NATIONAL SITE AND SERVICES PROJECT

Ministry of Lands, Housing and Urban DevelopmentStaffing Patterns, 1976

~~~~~~~~~~~Snon 8 Senior TechnicalOteTos

tion mlitB Ap~~~Aproved Actual Approved &tI Approved Actual Approved Actual Approved -Actual koproved Actual

Administration and Ceneral 1I114 126

Planning Unit I 1 4 3Manpower Development 3 2 6 5 4 4 2 1Otber 1 1 10 7 25 23 87 78

Survey and Mapping 1 1 2 1 82 61 176 168 113 87 374 318

Land Development Services 1 1 309 210

Legal Section 2 1 42 9 31 20 26 24Land Economics Section 1 1 18 3 31 19 19 18Land Registry 1 1 15 13 17 11 19 15Customary Land Tribunal 1 1 2 3 5 2 30 22Rental Tribunal 3 1 4 4 41 41

Urban Development 1 1 179 132

Urban Planning Division 1 1 2 2 37 34 6 8 29 15Housing Development Division 1 1 3 1 44 32 17 9 38 28

TOTAL 6 6 17 12 263 171 316 268 404 329 1,006 786

Actual as I of Approved 100Z 71% 65% 85% 81% 78Z

Note: Ardhi. Institute and Housing and Building Research Unit excluded.

Source: Ardhi..

ANNEX 5Table 3

TANZANIA


Fees for Rights of Occupancy for Surveyed Plots(T Sh)

Fee Method of Calculation

LR & SC Fee

Preparation Fee < 250 40251 - 500 100501 - 1,000 300

> 1,000 500

Duty for Duty for EachLR & SC Original Duplicate (4 Req.)

Stamp Duty < 100 5 2.5101 - 200 8 4201 - 400 10 5

Plot Size (Sq ft) Fee

Survey Fee < 7,500 257,501 - 20,000 125

> 20,000 225

Fee for Deed Plans 7 per copy (6 copies required)

Registration Fee Round [(LR & SC x 20)/1,000] to wholenumber; multiply result by 5

Advance LR & SC Advance payment for remainder of first year

(LR & SC = Annual Land Rent & Service Charge.)


RESPONSIBILiTY MATRIX: PROJECT MANAGEMENT AND SOCIAL COMPONENTS

TRAL ADMINISTRATION LOCAL ADMINISTRATION

AROHI SITES &SERVICES

~~~r _ l __ _ __ __s"-~I7:~:~7~A::v~FUNCTION*S c 'i ~ . O ~& ? ,

ARDHI: SITES AND SERVICESPreparation of title form for upgrading areas 0Preparation of management handbook 1 0 0 * 0Preparation of community development guidelines & materials O

Planning for & condu^t of orientation seminar 00 0 0 0Review of type plans for demonstration houses 0 0Preparation of periodic progress reports 00 0Conduct of small research studies -

LOCAL ADMINISTRATIONDesignation of Project CoordinatorsAppointment of Site Officers * 0Preparation of local implementation schedule l * I O 0 0 0 00 0

UPGRADING COMPONENTPublicity in communities . 0 0Registration of squatter houses o * OPreparation of titles 0 0 0 0@ 0

Compensation of displaced households 0 0 * 0

Relocation assistance to displaced households 0 * 0Management of site offices * 0 0 0Construction of demonstration houses * 0 0Sale of demonstration houses * OTechnical assistance (artisans) 0 * 0Formation of cooperatives _

SURVEYED PLOT COMPONENTSite selection *0 O

Base map and layout preparation * OPlanning review Allocations survey *Title preparation O

Construction of demonstration houses -

COMMUNITY FACILITIESOperation of schools e

Operation of MCH'sOperation of markets 0Budgetary planning for recurrent expenses _ -

MAINTENANCEMaintenance of roads and drainsExperimental community maintenance program o World e15748

* Primary direct responsibility

C Secondary responsibilitY or responsibility for inputs


IMPLEMENTATION SCHEDULE: PROJECT MANAGEMENT AND SOCIAL COMPONENTS

1976 1977 1978 1979 1980 1981

A1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 3Preparation of title form for upgrading areas _Restructuring & upgrading of Sites & Services Section _Preparation of management handbookPreparation of community development guidelines & materialsPreparation for and conduct of orientation seminarReview of type plans for demonstration housesPreparation of periodic progress reports _ - _ - _ _ _ _ _

LOCAL ADMINISTRATION

Designation of Project CoordinatorsAppointment of Site OfficersPreparation of local implementation schedules _

UPGRADING COMPONENT

Publicity in communities

Registration of squatter houses & preparation of titles _ _ _ _ _Compensation & relocation of displaced householdsConstruction of demonstration housesOperation of site offices -_ _ _ _Sale of demonstration housesTechnical assistance (artisans) _ _ _ _ _ _THB lending program _ _ _ _ _ -_ _ _ _ _ -

SURVEYED PLOTS

Allocations _ _ _ _ _ _ _ _ _ _Preparation of titles _ _ _ _ _ _ _ _ _ _ _ _ = = _THB lending programConstruction of demonstration houses

COMMUNITY FACILITIESBudgetary planning for recurrent operations _Recurrent operations

MAINTENANCEMaintenance of infrastructure

Experiment in community maintenance of roads & drains _ _ _ L -

World Bank-16746CHART No. World Bank-16747 shows the implementation schedule for the physical components of the project.

Li r~~~~~~~~~~~~~~~~~~~~~~~~~~~ Tv~~~~~~~~~~~~~~~~

ANNEX 5CURRENT SITES AND SERVICES SECTION Figure 4

Housingl ~~~~~~~~Devlelopment

Monitoring &Evaluation

Physical Survey Grew | Egineering Estate HousingPlan -ing Trainees Management Cooperatives

PROPOSED SITES AND SERVICES UNIT

PrincipalSecretary

ProjectManager

Planning Engineering FinanceSection Section Section

TANZANIA

SECOND NATIONAL SITES h SERVICES PROJECTOVERVIEW OF TANZANIA'S ADMINISTRATIVE STRUCTURE

PRESIDEN NTj

-- - -- - -- - -- - -- - -- - -- - -- - -- -I

r-I i____UR 5 E ~l MIITROF FINANCEj RIME MINISTER ... M.NSE OF MAR.

ANOSPLANNING E POWE DEVELOLME,

[ I_ I1 OF

MINISER OFMINISER OfMINISER OfMINISMINISTER INISTER OF M NISERO MI-NIST' OF INITERO MMINISTER .OFMINSTER OF

[AGRIUTUECMMREINDUSTES, hEALTH ORSAERLFQEOINGNOM AOl&SOILCULTURE

INISTER OF INATURLFOUCATION RESOURC6S

REGIONAL F- - - - -- '-AI ---I DEVEPENT COMMISSIONER I

IEGIONAL *PLANNING &

.||NANCE OFFICER I

H~~~~~~~~~~~~~~~ I

- COOPERATIVES 7l NATURA. C L .L S W OCRLzE S M. UR

_ MARC O

SUBDISI A.DISRIT PANTN

V ILLAGES

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II,.II.1

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ANNEX 6

TANZANIA


Design Standards and Cost Estimates

A. Physical Planning

Squatters Upgrading

1. Settlement selection. A detailed evaluation of existing squatterareas in the five project towns was carried out before selecting the ninesettlements for upgrading under the project. The selection criteriaincluded:

(a) Socio-economic Characteristics of the Community and HousingConditions

- socio-economic vitality of the community;- permanency, quality of building materials and general

condition of dwellings; and- potential for upgrading and housing improvement.

(b) Availability of Off-Site Infrastructure

- proximity of existing trunk roads, primary andsecondary distributors;

- proximity of existing water supply reticulation,storage and treatment works;

- proximity of existing storm culverts, streams andditches; and

- proximity of existing power and telephone lines.

(c) Extent and Condition of Existing On-Site Infrastructure

- pattern of existing circulation network and accessreserves, if any; and

- types of sanitary facilities, water supply anddrainage.

(d) Physical Characteristics of the Site and Land-Use Patterns

- topography, ground conditions and natural drainage ofsite;

- scale or size of the site and patterns of land use:space available for infrastructure and communityfacilities;

- density of dwellings.

ANNEX 6Page 2

(e) Access to Employment Opportunities

- extent and potential of informal sector within site;and

- distance, availability and cost of transport to existingemployment areas.

(f) Relationship to General Planning Framework

- conformity with existing patterns of development; and- development potential and constraints within planning

context for future growth.

2. Squatter settlements were ranked according to these criteriaand areas most in need of improvement and with the best opportunitiesfor successful implementation were identified.

3. Site Plans. For each of the selected settlements Ardhi plannerscarried out surveys and designed circulation layouts on aerial photographs,conforming as far as possible to existing patterns of development. Adequateprovision of space has been made for community facilities at convenientlocations in each settlement. The consultants prepared engineering designsfor infrastructure on the basis of these site plans using standards describedin Section B of this Annex.

Surveyed Plots

4. Site Selection. The process of selecting suitable sites forsurveyed plots will be critical to the program's success. A systematicand rational approach to the evaluation of available sites will be developedand employed by Ardhi. Table 1 lists the criteria to be considered in theevaluation. Sites with the greatest potential will be identified throughthis process.

5. The Physical Planning Section of Ardhi's Sites and Services Divi-sion will be responsible for providing guidelines and assistance to regionalurban planning offices for preparing site plans for the selected sites.The site plans will incorporate the following planning and design considera-tions:

(a) adequate land use planning to ensure maximum locationalconvenience of housing areas, community facilities areasand circulation networks in terms of access, safety andsocial interaction and to minimize costs;

(b) adequate provision of land for community facilities, i.e.,schools, clinics, community centers, markets, day carecenters, etc.;

ANNEX 6Page 3

(c) grouping of plots for community facilities to form anattractive, viable nucleus for community activities andto permit multiple uses of building and play areas;

(d) provision of a safe, convenient system of pedestriancirculation linking lots to future bus lines, play areasand community facilities;

(e) provision of vehicular circulation within the area whichwill allow access to residential lots, commercial andpublic areas and permit an easy flow of traffic whileprotecting the neighborhoods from through traffic;

(f) provision of limited car parking and access for garbagepick-up facilities;

(g) designing of lot layouts to reflect local social preferencesand life styles, and to minimize disturbances such as trafficnoises, industrial activities and natural nuisances;

(h) efficient physical planning to comply with desirable rangesof population density 1/ and land use percentages 2/ forcirculation, public areas, private areas and lot coverage--all features of a sound physical layout which is the primarydeterminant of subsequent commitment in terms of cost ofland, infrastructure networks, administration and maintenance;

(i) convenient location of the initial standpipe cluster forprovision of potable water; and

(j) planning and design provision for staged installation ofbasic services in the future. The requirements of eachutility will be considered individually (i.e., roads,footpaths, stormwater drainage, water supply, power supplyand security lighting) and allowance made for incrementalupgrading from initial levels of service which may be lowerthan desirable minimums.

1/ Defined in this instance as the number of persons divided by totalusable area. Desirable/effective gross population density range insuch projects is 250-500 persons per ha.

2/ Based on standards developed by several international agencies,academic institutions and public planning agencies, these rangesare: 20-30% for circulation areas, 50-60% for private areas,and 15-30% for other public areas.

ANNEX 6Page 4

B. Infrastructure Standards

6. In designing the infrastructure, standards employed in the firstproject (see Annex 5 of Report 337a-TA) were utilized with appropriatemodifications. As in the first project, minimum functional requirementswere considered in determining initial levels of services and provisionwas made in the engineering plans for future upgrading as needed. Infra-structure cost estimates for the various sites are summarized in Tables 3and 4. Detailed breakdown of cost estimates for a typical site, Kiloleni(Tabora), are shown in Table 5 for reference.

7. Roads. Each site will have a network of collector, primary,secondary and pedestrian roads. To the extent possible, layouts of thenetworks conform to existing patterns of circulation and housing. Designspecification for the four different roads will be as follows:

(i) Collector Roads (Class A) are designed to serve as the mainaccess routes linking the sites with the urban road network.They would accommodate heavy vehicles including bus trafficwhich will be provided after upgrading works are completed.Class A roads will have an overall reservation of 36 meterswith an initial carriageway width of six meters. The carriage-way construction comprises a treated dry macadam surfacing(20 mm double surface dressing on 150 mm base course) onmechanically stabilized gravel base (200 mm sub-base). Theedges of the pavement will be strengthened with concreteborder curbs. 4.5 m wide shoulders are provided on bothsides for pedestrians and cyclists and for future expansionof the carriageway.

(ii) Primary roads (Class B) will serve as the main vehicularaccess to dwelling groups for taxis, garbage trucks, cesspitemptiers, fire engines as well as private cars. These roadswill have an overall reservation of 24 meters with a 4.5 mwide carriageway of rolled gravel on mechanically stabilizedgravel (150 mm base course). 3.25 m shoulders are providedon both sides.

(iii) Secondary Roads (Class C) are dirt roads which will serve asvehicular access to inner areas for light traffic and occasionalservice and emergency vehicles. The road has a 12 m reservewith a 5 m carriageway of compacted earth.

(iv) Pedestrian Paths (Class D) will function as pedestrian andcyclist accesses to houses as well as emergency vehicles.The D-roads will have a road reserve of six meters.

ANNEX 6Page 5

8. vat2r Supply. 1/ Potable water will be supplied throughstandpipes 'n all project areas. The design of on-site distributionsystems for squatter upgrading areas is based on the assumption that thepercentage of population served through public standpipes will decreaseover time from 100% in 1976 to 70% in 1986. Accordingly, the primarydistribution reticulation comprising pipes of diameter 75 mm or more,is designed to meet the water demand of 1986. Water velocity is aboutone m/sec in the primary distribution pipes. The secondary distributionlines comprising pipes of diameter less than 75 mm are designed to meetthe demand from standpipes. The number of taps in one standpipe is limitedto four to avoid crowding. A 4-tap standpipe is expected to serve 50 plots.Fire hydrants are provided only around community facilities and are spacedat 300 m intervals.

9. The specific water demand criteria adopted were 40 liters percapita (lcd) for people served through pjblic standpipes, 100 lcd for peopleserved thrSugh private connections, 30 m /ha/day for community facilitiesand 17.5 m /day per school. Water losses totalling 12% of consumption havebeen taken into account to calculate the total water demand. Peak waterdemand factors have been estimated at 1.20 for the peak day and 2.9 forthe peak hour. The future annual population growth adopted in the squatterareas was assumed to be 5%, except in Mtoni-Tandika and Hanna Nassif in Dares Salaam where 2% growth only was adopted. These figures are based ongrowth records of the various towns and particularities of each projectarea.

10. For the surveyed plots the standards of water supply distributionsystems would be limited to the simplest. Full on-site water supplyreticulation would not be laid. Provision is made in the project for water

mains, designed for an average per capita consumption of 40 liters/day, of0.5 mile maximum length which would supply water to each project site throughpublic standpipes only. The number of standpipes would be limited to oneper 350 plots. The other criteria used to design the water main would bethe same as for squatter areas.

11. Surface Water Drainage. The drainage system is designed to carrystorm water and domestic waste water other than sewereage from latrines.The system is designed for peak storm frequency of five years and consistsof unlined open ditches along the roads and through culverts at vehicularcrossings. On steep gradients lining will be provided to prevent erosion.

1/ The status of off-site water supply networks and general waterinfrastructure for each town is summarized in Table 2 of thisAnnex.

ANNEX 6Page 6

12. Sanitary Sewerage. As in the first project, the traditionalpit latrine will be used for sanitary sewerage. In the upgrading areas,pit latrines already exist in the majority of houses. Constructionand maintenance of pit latrines is the responsibility of project bene-ficiaries. Technical assistance is provided by Ardhi for this. Whenthe pit latrine is full, it either has to be emptied or a new one built.Cesspit emptiers provided under the project would empty pit latrines inproject areas in Dar es Salaam and Tabora. Where soil conditions andground water tables are unsuitable, house-owners would be encouraged toinstall an alternative drycell system for which technical assistance andloans from THB would be provided.

13. Power Supply. A system of street lighting and security lightingat major communal areas will be installed. The center-to-center spacingfor street lighting will vary within a maximum spacing of about 50 m onClass A and B roads. The distribution system will be designed to allowfor future individual metered connections which would be installed byTANESCO on application.

Cost Estimates

14. Detailed cost estimates for infrastructure, community facilities,vehicles and equipment, technical assistance, house improvement and con-struction loan program and the small-scale industries component are shownin Tables 3, 7, 9, 10, 11 and 12, respectively. Table 4 describes unitcosts for infrastructure works for squatter upgrading. Table 5 containsthe detailed costs of infrastructure works for a typical upgrading site(Kiloleni, Tabora--the total project infrastructure costs for squatterupgrading were aggregated from similar data on each site). Table 6 showscost estimates for basic infrastructure (water) for surveyed plots andTable 8 describes unit costs and space standards for community facilities.All costs are expressed in mid-1977 prices.

ANNEX 6Table 1

SITE EVALUATION CRITERIA FOR SURVEYED PLOT PROGRAM

CRITERIA EVALUATION FACTORS RATING

A. Land Availability - size (at least 50 ha. to accommodatesuitability for proposed the larger plot sizes and pit latrines

use traditionally used in Tanzania)

- acquisition costs (compensationfor exisitng crops and buildings)

B. Physical Characteristics - topography (ridge, valley, slope)suitability for proposeddevelopment - ground conditions (soil type, rock)

- natural drainage and groundwatertable (swampy, well drained grasslandsor high groundwater table)

C. Off-Site Infrastructure - water supply reticulation, storageavailability and proximity water treatment worksof existing and feasibilityfor required trunk infra- - trunk roads, primary and districtstructure distributors

- trunk sewers, pumping stations andsewerage treatments works (forsites where applicable)

- storm culverts, streams and ditches

- power lines, transmission plants

- telephone lines

D. Employment Linkages - accessibility of the site to existingAccess to job opportunities employment sources (distance, availability

and cost of transport)

- future employment potential in thevicinity of the site (committed withintimeframe of proposed development)

E. General Planning Framework - conformity with existing developmentrelationship of site withplanning context of its - potential for expansion to accommodateurban area future growth (short term and long term)

- relationship to proposed or adopteddevelopment plans or structure plans

- relationship to other similar areasincluding upgrading projects.

ANNEX 6Table 2

TANZANIA


General Water Supply Infrastructure for Project Sites

Project Town Status of Water Supply

Dar es Salaam: The lower Ruvu River scheme financed by the CanadianInternational Development Agency (CIDA) has increasedthe production and transmisSion capacity of t1e watersupply system from 95,000 m /day to 263,000 m /day.The new facilities were commissioned at the end of 1976.In addition, KfW has recently financed the expansionof distribution reservoir capacity and transmissionmains in the town. No off-site mains would have to belaid to supply the project areas except for the (Mbagala)area where an off-site water main has been included underthe project to strengthen the supply of the on-sitedistribution system.

Tanga: The Siggi River scheme financed by KfW will make up forthe deficit in water production capacity of the bore-holes presently supplying the town. The new T Sh 165(US$20) million scheme consists of a dam, raisingmains, a treatment plant and new storage tanks. Therewill be more than sufficient capacity to supply theproject areas. The scheme is presently under imple-mentation and will be substantially completed beforeconstruction of the reticulations of the presentproject begins.

Tabora: A new T Sh 83 (US$10) million extension scheme financedalso by KfW will make up for the deficit in water pro-duction capacity of the Iyembe River Scheme presentlysupplying the town. The new scheme includes capacityfor development in upgrading areas of the project. Itis under implementation and will be completed beforecommissioning the reticulations to be built under theproject.

Morogoro: New production, transmission and distribution facilitieshave just been financed mainly by the Bank (Urban WaterSupply Project). The new T Sh 125 (US$15) millionscheme will increase the peak production capacity of the

ANNEX 6Table 2 (Cont'd)

Project Town Status of Water Supply

water supply system from 2,300 m /day to 27,300 m /day.It includes the construction of an 1,650 m long earthdam across tqe Ngerengere River for storage of up to10 million m of water, transmission pipelinS a treat-ment plant and a pumping station of 25,400 m /daycapacity. It also includes the 3construction of dis-tribution reservoirs of 5,450 m total capacity andthe extension of the main distribution networks tobring it up to an efficient state by early 1979. Thenew facilities are expected to be commissioned byOctober 1979.

Iringa: A feasibility study for expansion of the water supplysystem in Iringa has been completed (and appraised by-the Bank in conjunction with six other urban watersupplies) but financing has not been found to date.Existing production facilities are incapable of meetingpresent needs 3(water production has levelled off at2,200-2,500 m /day since 1971) and average per capitaconsumption in the town is very low (45 lcd). Thepresent system is therefore incapable of serving addi-tional reticulation without the risk of reducingpressure in the pipes which would cause networkcontamination and health hazards. The squattersettlement included for upgrading under the project,Kihesa, has some water service -- through 93 privateconnections and 7 public standpipes. Therefore, alimited strengthening only is proposed under theproject until funds (US$4.7 million) are availableto finance increased production and transmissionfacilities in the town.

TANZANIA


Cost Estimates - Infrastructure(in '0000 T Sh)

(1) (2) (3) (4) (5) (6) (7) (o) (9) (10) (11) (12)

No. of Houses To No. of Houses Rods Water PysiaL rie /5City Site Area (ha) Re Upgraded To Re Upgraded SWD) X Supply Electricity Preliinaries Subtotal Allouance Cantingeneies CcttinPSncies Total

Tabora Isebya 114.5 1,445 140 4,693 1,351 264 631 6,939 2,082 1,353 1,245 11,619

Kiloleni 72.9 1,159 40 2,394 1,269 74 374 4,111 1,233 802 737 6,883

Taizga Gofu Juu 21.6 397 43 1,372 271 81 172 1,896 237 320 294 2,T47

Mwakizaro 21.8 265 27 942 115 53 111 1,221 153 206 190 1,770

Morogoro Kichangani 16.8 413 63 894 1,224 63 218 2,399 180 387 356 3,322

Msamvu 72.7 1,443 150 2,170 821 188 318 3,497 262 564 519 4,842

Iringa Kihesa 66.4 1,058 30 2,075 146 91 231 2,543 636 477 439 4,095

Dar esSalsa. Mtoni/Tandika 470.6 7,115 885 L 12,383 10,084 704 2,317 25,488 - 3,823 3,517 32,828

Ranna Nassif 43.3 998 140 888 1,091 180 216 2,375 356 328 3,059

Mbagala 50.0 _ - 3,046 668 316 403 4,433 - 665 612 5,710

TOTAIS 950.6 14,293 1,518 30,857 17,040 2,014 4,991 54,902 4,783 8,953 8,237 78,875

/1 SWD - Surface Water Drainage.Z2 10% of the sum of (4), (5) and (6).L Experience of the First Project indicated significant differences in the cost of infrastructure works between Dar es Salsm and

upcountry towns. These difference reflect higher transportation costs and generally higher costs of construction in upcountrytowns -- lack of skilled manpower, inadequate maintenance facilities and poor cammunication with Dar es Salaam. In the absenceof reliable data or unit construction costs in upcountry towns, a location allowance expressed as a percentage of infrastructurecost for Dar es Salaam was derived for each of the upcountry towns (30% for Tabora, 12.5% for Tanga, 7.5% for Morogoro and 28%for Iringa) on the basis of consultants' and Ardhi's experience. 415% of the amef (8) and (9).

/ 12 of the s of (8), (9) a (10).6 To be resettled in lbagala alte.

TANZANIA

SE(XED NATI(NAL sITES AND SERVICES PJEcT

Cost Estimtes - Unit Costs for Infrastroctbre

(In T Sh'000)

Area Number of Cost 2ar Nectare _oCt percity Site (ha) Households Total Cost Road & SW]h / Water Supply Eleotricity Total Household

Tabora Ieebyn 114.5 1,585 6,939 (9,021) 45 (58.5) 13 (16.8) 2.6 (3.14) 60.5 (78.7) 4.4 (5.7)

Kiloleni 72.9 1,199 4,111 (5,3114) 36.1 (47 ) 19.1 (24.9) 1.1 (1.4) 56.3 (73.3) 3.4 (4.4)Tanga Goru Juu 21.6 440 1,896 (2,133) 69.8 (78.5) 13.7 (15.5) 4.2 (4.7) 87.7 (98.7) 4.3 (4.8)

)wakJzaro 21.8 292 1,221 (1,374) 47.5 (53.5) 5.8 ( 6.6) 2.6 (3) 55.9 (63.1) 4.2 (14.7)Morogoro Klcehangani 16.8 476 2,399 (2,579) 58.5 (6Q,9) 80.2 (86.1) 4.1 (4.4) 142.8 (153.4) 5 (5.4)

Msamvu 72.7 1,593 3,497 (3,759) 32.8 (35.3) 12.4 (13.3) 2.9 (3.1) 48.1 (51.7) 2.2 (2.3)Iringa Xlhesa 66.4 1,088 2,543 (3,179) 32 (12.!5) 2.4 (3.) 1.9 (2.4) 36.3 (147.9) 2.3 (3)IDr as Salaam xtod/Tndikab/Magala 520.6 8,000 29,921 32.6 22.7 2.2 57.5 3.7

Hans Nasif U5 1 .1 § 2.. 75.. 2B-& - IL - L -

Total 950.6 15,811 54,902 (59,685) A*^lP 35.7 (38.8) 19.7 (21.5) 2.3 (2.5) 57.7 (62.8) 3.5 (3.7)

3/ Surface Water Drainage

Note: Unit costs are given before cotingancies.Figures in parenthesis include the location allowance (30% for Tabora, 12-1/2% for Tanga, 7-1/2% for Nozogoro nd 25% for IrIlWa).

ANNEX 6TANZA.NLZ Table 5

Page 1SE0DND NATIONAL SITES AND SERVICES PROWJCT

Breskdom f Infrastrctue Comonets and CostsFor Typical Site

Location: TADORA Area: IKILOLERI (Upgrading)

Item Specifications Quantity Unit Rate CostT Shs T Sh '000

1. Site Preparation

(i) site clearance Lump sum 322.30

(ii) site office withfurniture, etc. Lump sum 82.50

(iii) vehicles to site engineer Lump sum 110.00Sub-total 511,.O

2. Roads

(i) roads-type B Gravel surface 4.5 m wide, 2,130 m n.a. n.a.24 m or 36 m road reserve

(ii) roads- Gravel surface 3.5 a wide, 1,705 a n.a. n.&.type C-1 12 m road reserve

(iii) roads-- Earth roads 5 m wide, 4,125 m n.a. n.a.type C-2 10 m or 12 m road reserve

Sub-total 909.00

3. Storm WaterDrainage

(i) ditch-type I Unlined ditch with 12,500 m 22 302.50triangular section 0.75s depth, 1:2 side slopes

(ii) ditch-type II Unlined ditch with 1:1 side 700 a 30 23.10slopes, 0.5 m base width,1.0 m depth

(iii) ditch- Same as above with 1.0 m 310 m 40 13.64type III base width

(iv) ditch- Same as type II but with 320 a 50 17.60type IV 1:2 side slopes

(v) ditch- Ssme as type II with 2.0 m - D -type V base width

(vi) ditch- Same as type II but with 1:2 - atype VI aide slopes, 2.0 m base width

(vii) ditch- Same as type II but with 1:2 - mtype VII side slopes, 1.5 m base width,

1.5 a depth

(viii) ditch- Unlined ditch with triangular - mtype A section, 0.75 m depth and 1:1

side slopes -

(ix) ditch-type B As type A but 1.0 a depth - a -

Extra Items LU sum 26.72Sub-total 626.56

4. Culverts

(i) Culverts-45 cm 20 a 220 4.84(ii) " -60 cm 120 m 350 4s6.20(iii) " -75 cm 120 m 450 59 10(iv) -90 cm 65 m 550 39.32(v) " -400 cm - m(vi) -120 cm - a(vii) Provision for Lump sum 193.6

outfalle ,headwallsetc .

Sub-total 343.36

ANNEX 6Table 5Page 2

TANZANIA


Breakdown of Infrastructure Components and Costsfor Typical Site

Location: TABORA Area: KILOLENI (Upgrading)

Item Specifications Quantity Unit Rate 'CostT She T Shs '000

5. Water Supply

(i) Pipes-900 mm c.i Including excavation, - m(ii) -- 800 mm laying and jointing of - m(iii) " -400 mm pipes, backfilling - m(iv) " -250 mm 1,970 m 418 823.50

P.V.C.(v) Pipes-200 mm -- m(vi) -150 mm 1,230 m 180 243.10(vii) " -100 mm - m(viii) "- 75 mm - m(ix) " -- 50 mm - m(x) " -- 38 mm 1,870 m 40 62.30

Sub-total 1 ,1L48.90

6. Fire Hydrants 90 mm hydrants on 1 No - 6.20various pipe sizes

7. Public Stand Pipes 4 tap stands 23 No _ 113.85

2 tap stands - No

Sub-total 113.85

8. Power Supply

(i) High Voltage 11 KV - Km -(ii) Transformers - No --(iii) Low Voltage 250 V 0.5 Km 25,000 13.75(iv) Street Lights 45 No 1,000 49.5O(v) Miscellaneous Lump mu 10.97

Sub-total 74. 22

Total 3,736.89

Preliminaries 10% 374. 00

Grand total 4,110.89

TANZANIA


Cost Estimates - Basic Infrastructure for Surveyed Plots Program

(In T Sh'OO0)

Number of Physical I/Price 2/

City Plots Mains Excavation Sluice Valves Standpipe Total Contingencies Contingencies Total

Dar es Salaam 1 4 ,14 8 1 ,417 1fl 126 154 1,882 282 195 2,359

Tabora 925 - 101 13 9 11 1 34 20 14 168

Tanga 1,328 202 26 18 22 268 40 28 336

Iringa 1,769 202 26 18 22 268 40 28 336

Morogoro 807 101 13 9 11 1 34 20 14 168

Total 18,977 2,023 263 180 220 2,686 402 279 3,367

Note:

Costs were derived on a basis of the following assumption and standards:

(1) Maximum length of mains - 1/2 mile or 805 m.(2) Mains diameter - 120 mm(3) Two sluice valves per main.(4) Two 4-tap water kiosk for 1,000 plots approximately.

1/ 15% of basic cost.29 5% of basic cost plus physical contingencies.

HimP

ANNEX 6Table 7

TANZAZUA


Cost Estimates - Community Facilities

(In T Sh '000)

____ Site Facility Units Capital Cost Furniture/Equipment Total

Dar es Salaam Hanna Nasuif School (1 stream) 1 323 461/ 369

MCH Extensiicn 1 220 82 302

Mtoni Schools (2 stream) 2 1 .292 181/ 1,476

MCH 1 455 165 620

Market 1 163 - 163

Tandika Schools (2 stream) 2 1,292 1d112/ 1,1.76

MCH 1 455 165 620

Market 1 166 163

Subtotal h,3-63 u 5,189

Morogoro Msami'u School (1 stream) 1 258 4J 304Kichongani School (1 stream) 1 258 h61 304

Medical Outpost 1 220 82 302

Market 1 163 - 163Subtotal 899 1 7h 1,073

Tanga Gafi Juu School (1 stream) 1 258 46l/ 304

MCH Extension 1 220 82 302

Market Extension 1 89 - 89

Mwakizaro School (1 stream) 1 1 h6-/ 30hSubtotal o25 1 17 995

Tabora Isebya School (l stremn) 1 258 461 304

School (2 stream) 1 516 921/ 608

MCH Extension 1 220 82 302

Kiloleni School (2 stream) 1 516 922./ 608

Market 1 163 163Subtotal 1,673 312 1 ,985

Iringa Kihesa Market E:xtension 1 89 - 89Subtotal 89 0 89

TOTAL 7,849 1 ,h86 9,335Contingencies:- Physical (15%) 1,177 - 1,177- Price Contingencies (1h%) 1,263 ?08 !:?

GRAND TOTAL 10,287 1 ,69L 11

1 Includes T Sh 40 per pupil to partially cover initial expenses on books and supplies.

ANNEX 6Table 8

TANZANIA


Cost Estimates - Unit Costs and Space Standards for Community Facilities

(In T Sh)

Description of Facilities Area in Total Construction Equipmentand Fbnctional Spaces Sq.Meter Cost per Sq.Meter Cost Cost Total Cost

1. School (1 stream)ia.Classrooms (6 x 60 sq.m) 360 715 (550)Wb. Administration Block 30 715 (550)

(Office, Staffroom, Store)c. Toilet Block 20 2,200

Total 410 322,850 (258,500) 33,000 355,850 (291,500)

2. MCH Clinica. Registration 50 715b. Waiting/Lecture Roam 150 '715c. Office 9 715d. Staff 12 715e. Family Planning 9 715f. Dispensary 12 2,200g. Injection 12 2,200h. Observation 15 2,200i. Laboratory 9 2,200J. Examinations 40 2,200k. Stores 12 2,2001. Kitchen 12 2,200m. Toilet Block 20 2,200

Total 362 4L54,850 165,000 619,850

3. Marketa. Block for meat, fish

(4 stalls; 6 x 3 sq.m) 72 935k. Block for vegetables, fruits

(8 stalls; 3 x 3 sq.m) 72 715c. Toilet Block 20 2,2XO

Total 1 54 162,800 162,800

]/ Figure in parenthesis is for upcountry towns and is based on construction costs of recent contracts forschool building.

ANNE 6Table 9

TANZANIA


Cost Estimates - Vehicles and quIpment

(In T Sh'OOO)

Category Unit Cost Units Total Cost

1. Ministry of lands

a) Land Rover 80 5 400

b) Motorcyles 15 8 120

c) Truck 120 1 120

Subtotal 640

2. Sanitary Vehicles

a) Refuse Truck 200 3 600

b) Cesspool Emptier 400 2 800

Subtotal 1,400

3. Surveyed Plots Program

a) Truck 120 1 120

b) Land Rover 80 2 160

c) Survey Equipment Lump sum 221

d) Camping Equipment Lump sum - 66

Subtotal 567

4. Maintenance Lump sum - 830

TOTAL 3,437

ANNEX 6Tatle 106

TANZANIA


Cost Estimates - Technical Assistance and Consultant Service /1

(In T Sh '000)

Man Rate TotalCategory Month per Month Cost

1. Detailed Engineering and Supervision n.a. Lump Sum /2 6,580

2. Urban Finance Study 18 41.5 750

3. Management Assistance

a. Financial Analyst 24 33.2 800b. Management Assistance /3 6 41.5 540c. Community Development 6 41.5 250d. Monitoring and Evaluation 36 8.3 300

4. Training 24 41.5 1 ,000

5. Project Preparation 72 41.5 3,000

TOTAL 13,220

/1 Consultant services for SIDO and THB are shown in the cost estimatesfor house improvement and construction loans and small-scale industrydevelopment components respectively (Tables 11 and 12 below).

/2 9% of value of infrastructure works including surveyed plots program(based on actual bids for detailed engineering and supervision ofconstruction) plus 10% of value of community facilities before contingencies.

/3 Includes about T Sh 290,000 for development of management handbook andother management support materials.

ANNEX 6Table 11

TANZANIA


Cost Estimates--House Improvement and Construction Loan Program

(In T Sh '000)

(1978-1982)

Category Cost

1. Development and Promotion

a. Procurem2 t Consultant 125b. Vehicles- 220c. Training 200d. Office Equipment 75

Subtotal 620

a/ 2. Materials Loans 98,800

3. Worksheds Loans 2,760

Total 102,180

4/JPrice Contingency 12,187

Grand Total 114,367

l/ 3 man montis x TJS$5,0002/ 2 Land Rovers, and 4 motorcycles3/ Includes T Sh 5.4 million to cover foreign exchange Cost

of importing 12,360 tons of cement for the first three years.i/ 12% on items 2 and 3

ANNE 6Table 12

TAN ZANIA


Cost Estimates - Small Soale Industry Development

(In T ShI '000)

TownCategory Tanga Tabora Total

1 Manaement Tralnn andTechnical Aselstanee

a. Project Technical Adviser /I 1,000 1,000 2,000b. Implementation Team Salarios /2 150 150 300c. Vehicles /3 30 30 60d. ManagemenTApprenticeship 200 200 400e. Training Material 50 50 100f. Management Assistanoe to

Headquarters /4 - - 500

Subtotal 1,,430 1,430 3,360

2. Hire Purchase Program

a. Cluster Industries Equipment 1,430 1,290 2,720b. Network Industries Equipment 1 ,640 1,O40 2,680c. Raw Materials 840 480 1,320d. Equipment Installation & Training 550 550 1,100

subtotal 4,460 3,360 7,820

3. Cluster Infrastructure 405 405 810

Total 6,295 5,195 11,990

Contingencies

Physical /5 120Price /6 700

aRAND TOTAL 12,810

/1 Two man-years for each towns x T Sh 500,000 (us$60,000)./2 Six man-years for each towns x T Sh 25,000 (US$3,012)./3 Two motorcycles x T Sh 15,000 (US$1,800).__ One man-year x T Sh 500,000 (US$60,000). Additional consultancy support

for the preparation of future SSI project (up to two man-years) would beavailable from project preparation funds under technical assistance.

/5 15% of item 3./6 12% of item 3 and 9% of item 2.

ANNEX 7

TANZANIA


Cost Recovery of Urban Infrastructure

1. This annex discusses the approach to recovery of urban infra-structure investment and maintenance costs from its direct beneficiaries,to be adopted in the second project. After a review of present fiscalarrangements in Tanzania, in particular of the Land Rent and ServiceCharge, and the experience of the first project, the proposed approachto the cost recovery in the second project is discussed.

A. Background

2. Fiscal Policies in Tanzania. The present fiscal system wasestablished in the context of decentralization reform introduced in May 1972.Its principal characteristics are:

(a) the preference for general rather than specific forms oftaxation, in order to ensure a near uniformity and greaterprogressivity in tax burdens across the territory;

(b) the centralization of assessment and collection machineryin the hands of the Treasury. 1/

An effort to reduce the share of local taxation in the total tax burden andequalize local tax burdens began in 1969. Between 1970 and 1972, theshare of local taxes (principally Urban House Tax and Vehicle Tax) as aproportion of central government revenue fell from 5Z to 1.4%. A varietyof local taxes were abolished and/or consolidated into single levies suchas the Land Rent and Service Charge (see para 3 below). In may 1972, localgovernments were abolished and regional and district administrations whichtook their place have no taxing powers. Money collected locally for anypurposes (even market dues) goes to the center where broad expendituresdecisions are made and spending authorization given. Any geographicallink between revenues and expenditures has thus been broken. In sucha system, which deliberately seeks to use taxation as a direct distribu-tion tool, user charges become an exception rather than the rule asfew public services have the necessary fiscal autonomy. Consequently,the notion of cost recovery does not appear to play a significant rolein the design of fiscal policies.

1/ For a more detailed discussion of the fiscal system after decentrali-zation see Bank Report No. 587-TA "Tanzania: Fiscal Aspects ofDecentralization."

ANNEX 7Page 2

3. Land Rent and Service Charge. In line with its general policies,in July 1974 the Government abolished a variety of local property taxes andland rates, replacing them with a single levy called the Land Rent and ServiceCharge. The Land Rent and Service Charge is assessed on the economic value ofthe unimproved land, which should reflect several criteria (location, level ofservices, land use, etc.). However, as no specific official formula exists,the economic value is determined by the valuers of the Land Valuation Sectionof Ardhi on a case-by-case basis. In the absence of up-to-date valuations,the 1969 valuation rolls are increased by 25% and used. The responsibilityfor collection of the Land Rent and Service Charge lies, as for other taxes,with the Treasury.

4. The level of revenue from the Land Rent and Service Charge isnot determined by urban infrastructure financing needs but by generalbudgetary considerations and by the pace of Ardhi's valuation. Thelatter is slow, hampered by the lack of resources and manpower andsomewhat cumbersome and time-consuming valuation methods. Furthermore,there are delays in transmitting the updated valuation rolls from Ardhito Treasury. Finally, because of the equivocal wording of the Act, thecharge is not levied at all in unsurveyed areas. All this leads toconsiderable underestimation of the potential revenues of the Land Rentand Service Charge. Thus, for example, the 1974/75 Land Rent andService Charge revenues for Dar es Salaam were estimated at T Sh 20million. A recent evaluation of property values for just one street inDar es Salaam put them at T Sh 18.6 million. The total revenue for LandRent and Service Charge was estimated at T Sh 40 million in 1974/1975,T Sh 30 million in 1975/1976, and T Sh 50 million in 1976/77.

5. The collection of the Land Rent and Service Charge is very poor.In FY 1975, out of the estimated revenues of T Sh 40 million, only aboutT Sh 23 million were collected. Arrears are big and growing. The poorrecord is due to the inefficient collection machinery, inadequate recordkeeping, understaffing and lack of simple enforcement procedures as wellas the attitude of many urban dwellers, who are not accustomed to payingfor public services.

6. While the 1972 reform specifically sought to transfer publicexpenditures from urban to rural areas, its impact was accentuated by thegeneral budgetary crisis and lower than the expected yield of new leviessuch as Land Rent and Service Charge. The result was a heavy fall inresources available for urban areas, in real as well as in absolute terms.Thus, the annual recurrent expenditures for building works in Dar esSalaam dropped from T Sh 3.9 million in 1973 to T Sh 1.5 million in 1975.The lack of funds for maintenance and low urban infrastructure investmentcaused a large-scale deterioration of urban infrastructure. Costly stop-gap remedial measures became necessary. Recently, for example, theMinistry of Works had to undertake a costly program (T Sh 25 millionor US$3 million) of road repairs in Dar es Salaam.

ANNEX 7Page 3

B. First Project Experience

7. In the first project, an attempt was made to introduce thepractice of capital cost recovery from direct beneficiaries of projectinvestment. The formula agreed between the Government and the Bank wasdesigned to recover on a site-per-site basis the assignable capital costof the infrastructure investments over 25 years at 9% interest. 1/

8. The implementation of the formula encountered serious difficul-ties. The major problem was that the proposed formula applied only to thesites financed under the project, while plot charges for other sites weredetermined by the Land Rent and Service Charge Act, enacted in mid-1974.In effect, a distinct fiscal regime was proposed for the project. Further-more, there was a considerable disparity in the level of charges under thetwo regimes, with charges for project areas being considerably higher thancharges for comparably serviced areas outside the project. This provoked agenerally negative reaction from potential project beneficiaries. Its con-sequences were a sluggish take-up pace for the payments of project plots feesand political pressures on Ardhi to reduce the charges to a level comparablewith other urban areas.

9. In October 1976, at the request of the Government, a Bank super-vision mission reviewed the cost recovery formula for the first project inorder to bring the plot charges in line with the Land Rent and Service ChargeAct. In February 1977 IDA approved an amendment to the Credit Agreement whichwould allow the recovery of 75% of the capital costs over 25 years at 9%interest. Details of the proposed charges for each project area as well ascost recovery coefficients are shown in Table 1. For the sites and servicesareas those charges are based on the charges levied in comparably servicedareas recently revalued by the Land Valuation Section of Ardhi. For thesquatter upgrading areas, the charge was set at T Sh 100, which is 33% higherthan the current charge for unserviced areas. This level of charges isconsidered an interim solution to be modified after the overall review of theLand Rent and Service Charge (see para 12 below).

C. Proposed Approach for the Second Project

10. The experience of the first project plainly indicates the in-feasibility of a cost recovery formula which applies only to projectareas. Furthermore, such a formula is not acceptable to the Government.

1/ Further details can be found in the appraisal report of the firstproject (Report No. 337a-TA of May 12, 1974).

ANNEX 7Page 4

Charges in project areas will therefore be determined by the Land Rent andService Charge Act of 1974 as amended and specified following recommendationsof the study discussed below (see para 12).

11. While the interim solution, adopted for the First Project, repre-sents a considerable improvement over the existing situation (see para 9above), it is not fully satisfactory as it does not address the larger problemof financing capital and maintenance expenditures of urban infrastructure.There is growing concern in Government about these matters in view of recentdeterioration of urban infrastructure. A review of the existing system offinancing urban investment and financing costs has been recently initiated bythe Government.

12. The necessary upward revision of the charges under the Land Rentand Service Charge Act should take place in the context of this review forwhich IDA's assistance was sought by Ardhi. As a part of the review, anin-depth study of the Land Rent and Service Charge is being conducted. Sincethe Land Rent and Service Charge is the principal tax on urban land useand services as well as the instrument of cost recovery in the first project,the study provides both a suitable vehicle for a dialogue with Government onthe financing of urban infrastructure and maintenance costs and a deter-mination of specific arrangements for the second project. The study is re-viewing all aspects of the Land Rent and Service Charge: valuation, assess-ment, collection and enforcement. Its emphasis is practical: How to define asimple, workable formula for valuation, which would reflect the value ofservices provided? How to update valuation rolls? How to improve the collec-tion process? What are the costs of shifting from annual to monthly collec-tion? Its recommendations would apply to all urban areas in Tanzania. Thestudy was conceived as a short-term undertaking to be completed in six months.Government has already engaged consultants who began work in February 1977.The terms of reference for the study which were approved by IDA are shown asAttachment 1. Financing for the study is included under the project. Aretroactive financing for the study under the project is recommended (see para4.17).

13. An inception report for the study, prepared by consultants, wasreviewed during negotiations. Agreements were reached regarding short-termmeasures, guiding principles for the long-term reform of the Land rent andService Charge and arrangements for the cost recovery in the project. As ashort-term measure, Government agreed to progressively introduce the Land Rentand Service Charge in all squatter areas in Tanzania. This introduction wouldbe linked to the program of house registration and tenure regularization (seepara 5.09 and Annex 5, para 25). The charge would be set initially at T Sh100 annually and revised upward periodically.

14. The specific recommendations of the study for the reform of theLand Rent and Service Charge and then review by IDA and the Government willbe guided by the following three principles:

ANNEX 7Page 5

(a) Sai-f-sufficiency of the urban sector. The cost of providingan? maintaining urban land development and service infrastruc-ture should be borne to the extent feasible by the urbanpopulation in order to avoid having the rural populationsubsidize these costs.

(b) Close relationships between expenditures on, and revenuesfrom, urban land development and service infrastructure.The Land Rent and Service Charge should be closely relatedto the cost of the provision and maintenance on regional/local basis of urban land development and service infra-structure. The charge should be flexible in order to meetthe incremental cost resulting from new programs.

(c) Structure of the Land Rent and Service Charge. The structureof the Land Rent and Service Charge should be simple in orderto expedite the valuation process. However, the Land Rentand Service Charge should also differentiate between differentusers in order to permit a control of demand and supply ofurban services and effect a better allocation of resourcesand activities. The valuation and differentiation of thecharge should be based on the following three main criteria:(i) plot size; (ii) land use; and (iii) level of services.

15. The final report, to be completed in August 1977, will be reviewedjointly by IDA and the Government. Before December 30, 1977, an agreementwill be reached regarding the cost recovery arrangements for the urbaninfrastructure expenditures in the project--level and composition of plot(house charges) as well as applicable revision and collection procedures.

ANNEX 7Attachment 1

TANZANIA


Land Rent and Service Charge StudyTerms of Reference

1. The broad purpose of the proposed study is two-fold: (a) toanalyze the existing situation regarding the assessment and collection ofthe Land Rent and Service Charge (LR & SC) and (b) to propose specificmeasures that would increase its effectiveness, yield and equity. Itwill also review other local taxes associated with LR & SC.

2. More specifically, the study will deal with the followingtopics:

(a) Existing LR & SC system

(i) assessment - review of present valuation proceduresand program of valuation; estimate of time requiredto complete this program with existing resources;estimate of funds and manpower needed to completethe revaluation program in the next two years;

(ii) collection - review of linkages between assessmentand collection agencies, between Ardhi's Directorateof Land Development and the Commissioner of InternalRevenues, and, on the local level, between the DistrictLand Officer (DLO) and the Internal Revenue Officer(IRO); review of recording and payment notificationprocedures; review of enforcement mechanisms; and

(iii) performance - review of the effectiveness of Central-local, assessment-collection linkages, analysis ofpresent arrears; estimate of the shortfall of publicrevenues due to the deficiencies in assessment,collection, enforcement and lack of coordinationbetween those three components of the system;identification of major bottlenecks affecting theeffectiveness of the system.

(b) Improvement measures

(i) analysis of the broad rationale of the present valuationsystem based on the estimated market value of the land;review of possible modification of this rationale inorder to introduce the level of services provided and,

ANNEX 7Attachment 1Page 2

cost of their maintenance as factors in setting upthe amount of LR & SC: discussion of ways and meansof equalizing the charges among inhabitants of urbanareas; detailed outline of proposed modifications andreforms of the present system in line with considerationsdiscussed above: necessary institutional adjustments andincremental manpower and costs of the improved system;estimates of potential revenues to be collected under thenew system; and

(ii) analysis of advantages and feasibility of decentralizingthe responsibility for collection to the local author-ities; analysis of feasibility of establishing a monthlycollection system; of linking the collection of LR & SCwith collection of utility charges; a detailed outlineof other modifications necessary to improve the collec-tion-enforcement component; estimate of institutionaladjustments required (between central ministries andlocal authorities, and between functional managers),and of the incremental manpower and costs of the improvedcomponent.

(c) Other local taxes associated with LR & SC - review of otherlocal taxes (registration fees, user charges for municipalfacilities such as markets and slaughter houses) estimateof their yield and required collection system; analysis offeasibility (social, economic and administrative) of improve-ment of the present valuation collection system of those taxes.

3. The final outcome of the study will be a detailed outline of animproved LR & SC system, including specific recommendations and implementationschedule as well as an analysis of costs and benefits of the proposed system.

4. The responsibility for the study will be shared by Ardhi andTreasury. A steering committee will be established comprising concernedsenior officials of both ministries. In addition to guidance and supervision,the steering committee will ensure the coordination between the proposed studyand other efforts to improve local administration. The study will be carriedby a team comprising three full-time staff internationally recruited, special-ist in land taxation, local public finance and local administration. Twocounterparts, one from Ardhi, one from Treasury will be designated to assistthe team and liaise with relevant authorities. Ardhi and Treasury will sharethe responsibility of the logistics support for the team. The appropriateduration will be six months:

ANNEX 7Attachment 1Page 3

- one month to prepare a detailed brief- two months for the analysis of the existing situation- three months for formulation of modification and

reform proposals

5. It is expected that the implementation of study recommendation asapproved by the steering committee and other relevant authorities will con-stitute an integral part of the Second National Sites and Services project.IDA will finance 18 man-months of consultant services (T Sh 747,000 orUS$90,000) to carry out the study.

TANZANIA


Comparison of Plot Charges

(1 (2) (3) (4) (5) (6) (7) (8) (9) (lo) (11)Capital Assignable Maintenance Capitalized Number of Charges Under Charges Under Yearly Amounit Amount to be Percentage of Cost RecoveryCity Site Costs Capital Costa Costs Capital Plots Project Land Rent and to be Collected Without Maintenance With Maintenance

Costs Agreement Service Charge Collected Over 25 years Cost CostAct

- In T Sh/Year- - In T ShOOO -

Dar es Salaam Kijotonyama 8,455 6,341 3,171 16,139 1,672 296 240 401 10,025 62.1 51.9

Sinza 8,120 6,o0o 3,045 15,500 3,800 161 186 608 15,200 98.1 82

Manzese A & B 13,962 10,472 5,236 26,653 7,600 115 100 760 19,000 71.3 59.6

Mikocheni 2,917 2,188 1,094 5,569 710 513 279 204 5,100 91.6 76.6

Mbeya Mwanjelwa 5,051 3,788 1,894 9,641 1,200 (850) 131 100 (125) 226 5,650 58.6 49

Mwanza Nyakato 4.501 3,376 1,688 8,592 1,900 142 155 294 7.350 85.5 71.5

Totals 43,oo6 32,255 16,128 82,o94 2,493 62,325 75.9 63.4

Explanatory Note:

Column (I) Capital Costs are actual contract costs for infrastructure works. Power supply cost were excluded because they are recovered through electricity tariffs.The cost of providing individual water connections for Mikocheni site was excluded for similar reasons.

Colums (2) 75% of column (1).Column (3) Estimated at 50% of the assignable capital costs (2% of capital costs per year for 25 years).Column (4) Over 25 years at 9% interest.Column (5) For Mwanjelwa figures in parenthesis indicate the number of new plots.Column (7) For Mwanjelwa figures in parenthesis indicate the charges for the new plots.

ANNEX 8

TANZANIA


Technical Assistance

The technical assistance included in the project is intended tostrengthen Ardhi's capabilities in implementing the National Sites andServices Program. Besides funds for engineering consultants' servicesArdhi will receive assistance for management support, training and studies.Assistance will also be provided to SIDO and THB for specific expertiserequired in their components. The breakdown of technical assistance inthe project is given below:

No. of Duration Total %Agency Technical Assistance Experts (Years) (Man-Months) Local

Ardhi A. Project Design and 1/Supervision

Detailed engineering n.a. n.a. n.a. 30Construction supervision

B. Management Support

Financial Analyst 1 2 24 -

Management Specialist 1 0.5 6 50Community Development

Specialist 1 0.5 6 50Monitoring and Evaluation

Researcher 1 3 36 80

C. Training

Engineering Instructor 1 2 24 -

DD. Studies

Land Rent and Service ChargeStudy Team 3 0.5 18 25

Project Preparation Team 6 1 72 50

SIDO E. Management Support

Project TechnicalAdviser 2 2 48 -

Marketing Specialist 1 1 12 -

THB F. Management Support

Procurement Specialist 1 0.25 3 -

TOTAL 249

1/ Not expressed in man-months as the amount for this category isnormally determined on the basis of percentage of value of worksinvolved (9% for infrastructure and 10% for community facilitiesin this case).

ANNEX 9

TANZANIA


Economic Evaluation

Squatter Upgrading and Surveyed Plot Program

1. The squatter upgrading and surveyed plot programs in Dar es Salaamand the four upcountry towns will substantially improve the quality of urbanservices provided to low-income households in the areas affected. In responseit is expected that the rate and quality of new housebuilding will increase,while existing housing will be improved more rapidly. The provision ofmaterials loans by the Tanzania Kousing Bank for both new building and houseimprovements will enhance the stimulus provided by the new services andfacilities.

2. In evaluating the project the social costs of infrastructure,housebuilding and recurrent expenditures were estimated using shadow pricesderived from an analysis of the composition of input costs and expendituresin the Tanzanian economy. Benefits generated by the project are measured bythe additional rents paid by households for existing and new housing improvedor built in response to the project. Rent payments, however, provide only apartial indication of the project's economic rate of return. The improvementin urban services provided in squatter areas and the construction of variouscommunity facilities should also generate indirect benefits in the form ofbetter health, lower infant mortality, and better education for more childrenwhich are not necessarily reflected in higher rental values. It was notpossible to quantify these indirect benefits because of the lack of adequatedata on levels of health, education and related variables in improved andunimproved squatter areas. Therefore they (and the associated costs) werenot considered. Nonetheless, it is generally assumed that the benefitsderived from basic health and education facilities in low-income areas willat least equal the cost of their provision.

A. Project Benefits

3. Benefits generated by the project are measured by the increase intotal rent payments--either actual or imputed--for housing in the projectareas. Total rents may increase because new houses are built, existing onesimproved, or higher rents are being paid for the same accommodation reflectingthe improvement in services. It is assumed that as a result of the project,more new houses will be built and more existing houses improved than wouldhave been the case without the project. To estimate the magnitude of increasedrental values alternative projections for the rates of housebuilding, housingimprovements and rent differentials were made for each project area to comparethe with and without project pattern of these variables.

ANNEX 9Page 2

4. On the basis of evidence gathered by Ardhi, the following assump-tions were made regarding housebuilding and improvement in project areas. 1/

(a) In improved squatter areas new housebuilding will increasethe housing stock by 8% p.a. in Dar es Salaam and 10% p.a.,in upcountry towns as compared with 5% p.a. in unimproved areas.This housebuilding activity is subject to a limit on the overalldensity of housing in a given area. A maximum feasible housingstock was estimated for project sites. Furthermore, the composi-tion of the new housing stock will differ: the proportion ofhigher quality houses will be higher in improved than in theunimproved areas (70% vs 40%). The rate of improvement of exist-ing houses in improved areas will be twice that of unimprovedareas. The assumed values for the rate of improvement, rate andcomposition of new building, as well as maximum housing stocksfor combined projects areas in each town are shown in Table 1.It was assumed that construction periods for house improvementand new housebuilding are one and two years respectively.

(b) For the surveyed plot areas a growth rate of 10% p.a. (subjectto overall density limit) was used since expansion and infillingmay be expected to take place more rapidly in new areas of devel-opment with an organized layout. The composition of the newhousebuilding in these areas is shown in Table 1. It was assumedthat the houses are built in two years following the year of surveyand allocation of plots and that the survey program is phasedgradually over four years, as follows:

Year 1 - 10% of plotsYear 2 - 20% of plotsYear 3 - 30% of plotsYear 4 - 40% of plots

It was also assumed that the infrastructure ensuring a levelof services similar to that of improved squatter areas willbe provided in years 9 and 10 of the project. As beneficiariesof the program will anticipate this provision, it was assumedthat it would not affect the rate and composition of house-building but only the rent levels.

(c) Rents in Tanzania, subject to strict governmental controls, havebeen practically frozen since 1972 while the general price levelhas increased by over 60% during the same period. This situationhas resulted in a distortion of the rental market, under-the-table or in-kind payments for living accommodations, and a sharpreduction in the rate of housebuilding. If the housebuilding

1/ Some of the evidence used is discussed in Annex 1.

ANNEX 9Page 3

and improvement are to be encouraged, the rents must rise toa level that would assure an adequate return on investment.For the purpose of the analysis, rents were estimated by ad-justing 1972 rents (last year before rent controls) to mid-1976price level. Differentials between different categories ofhouses and between unimproved and improved areas were based onsurvey evidence on variations in rents in function of locationand level of services. The annual rents for a typical five-room house that were used in the evaluation are shown in Table1.

B. Costs

5. All costs are expressed in mid-1976 prices. Infrastructurecosts include physical contingencies, location allowance, detailed engineer-ing and supervision and are net of taxes and duties. Infrastructure costsfor surveyed plots (other than initial provision of water kiosks) were esti-mated using per hectare cost of squatter improvement for particular town(see Annex 6, Table 4). Annual maintenance cost for infrastructure was takenat 2% of capital costs. The administrative costs of implementing and adminis-tering the project--Ardhi and THB personnel, surveying, title preparation--were also included. The marginal costs of water consumption induced by theproject was estimated to be T Sh 50 per house per year.

6. For the purpose of the analysis, housing stock was divided intothree categories, reflecting major quality differences. Table 1 showscapital costs of building a house in each category as well as costs of im-provements, i.e. the cost of upgrading a house from lower to higher category.

7. Shadow prices for major items of project expenditure were estimatedby analyzing the cost of each item in terms of direct or indirect expenditureson a limited number of key primary factors. The most important of thesewere:

(a) traded goods;

(b) taxes and government revenue;

(c) labor, which was divided into two categories--skilledand unskilled; and

(d) non-traded goods, including basic foodstuffs.

Accounting ratios, i.e., the ratios of shadow prices to market prices, wereestimated for each of these primary factors by examining their opportunitycost to the Tanzanian economy. Working back from these accounting ratiosit was then possible to estimate the full range of shadow prices for majorexpenditures items.

ANNEX 9Page 4

C. Project Evaluation

8. Internal Rate of Return. Using the above assumptions, the internalrate of return for squatter upgrading and surveyed plots programs in eachproject town range from 19.4% to 27.8% with an overall rate of return forthe project's shelter component of 22.9%. Detailed results of the analysisare shown in Table 3-10.

9. Sensitivity Analysis. A number of parameters used in the evalua-tion were estimated on the basis of limited evidence. The effect of variationin values taken by these parameters was therefore investigated. The resultsof this sensitivity analysis are shown in Table 2 for the five most importantcases investigated. The internal rate of return appears relatively insensi-tive to changes in assumptions.

ANNEX 9Table 1

TANZANIA


Economic Analysis

Housebuilding and Improvement Data

I. Construction Costs and Rents (in T Sh '000)

BuildingCosts Rents 1/

Improved UnimprovedAreas Areas

Category A. Sand/Soil-Cement Block House 17 3.6 2.4

Category B. Improved Mud and Pole House 13 3.0 1.8

Category C. Basic Mud and Pole House 10 2.4 1.2

II. Improvement Costs Costs

From Category C to B 3

From Category B to A 6

III. Maximum Housing Stocks (in '000 houses)

Squatter ImprovedAreas Surveyed Plots

Dar es Salaam 15.0 21

Tabora 6.4 2

Tanga 1.5 2

Morogoro 2.9 1.2

Iringa 2.4 2.7

Total 28.2 28.9

IV. Rate of House Improvement (in % p.a.)

With the Project Without the Project

Type C to B 20 10

Type B to A 5 2.5

V. Composition of New Building Stock (%)

Without the Project With the ProjectSquatter Upgrading Areas Surveyed Plots Areas

Dar es Upcountry Dar es Upcountry Dar es Upcountry

Salaam Towns Salaam Towns Salaam Town

Category A 20 10 40 20 25 15

Category B 20 30 30 50 35 45

Category C 60 60 30 30 40 40

1/ Per annum for a five room house.

ANNEX 9Table 2

TANZANIA


Sensitivity Analysis - Internal Rates of Return(in %)

Dares

Salaam Tabora Tanga Morogoro Iringa All

I. Standard Parameters 23.7 19.5 21.5 22.1 27.9 22.9

II. Parameter Variations

A. Increased Infra-structure Costs

1. by 25% 21.1 17.3 19.4 19.7 24.5 19.6

2. by 50% 19 15.6 17.6 17.8 22.0 18.3

B. Equal Growth Rates 23.5 19.2 21.3 22.4 26.5 22.9

C. Loxrer RentDifferential 15.8 14.5 15.3 14.9 21.4 16.0

D. Lower Rents andRent Differential 15.9 13.7 14.6 15.2 20.0 15.8

810D9D 8LT10O6L IXT18 AM8 834VcaS P0jICT

CpOt 9.-.itt 711.. - p..wttr pa nr.dtnn "n Surottd ]tI.t. ft..in Dr 8to Balm-j

(? 86 '000)

1... I 2 5 7 8 0 t0 it 12 1s 14 is 16 17 18 19 20 21 22 23 24 is 26 27 28 29 20

Knfn... C-n.r. SM6 2.475 24.104 11.856 726 226 724 t.116 2,306 28.786 14.156 1.476 1,476 1.476 1.474 1,476 1.476 1.476 1,476 1.476 1.476 1.476 1.476 1.476 1.476 1.476 1.476 1.476 1.476 1.467Adndi..t-ti-l 200 530 744 614 924 1.311 689 688 697 731 774 354. 320 230 320 '.00 400 400 400 400 4.00 400 400 400 400 '.0 400 400 400 600)

8*O.tti ...0 0 '92 984 7.312 6.529 -984 . 84-984 -698 4 -964 -984 - O " -984 -984 .984A-984-484 .684 984 -.984 -989. 984 984 -984 -984 98' -984 -984 -984 - 984 - 984 -984IIo,,*buildim COfl*

I.P - t. 0 0 565 730 1.481 1.2)6 1.050 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 08.. Co..t ...ctiO 0 0 242 2.SSI 5.210 6,674. 1,999 11,610 15.700 11.768 20.074 7.065 0 0 0 a a 0 0 0 0 0 0 0 0 0 0 0 0 0

W.In...... 0 0 0 5 61 137 321 "81 682 994 1,352 1,753 1,894 1,561 1,269 1.060 929 917 917 917 917 912 907 917 917 917 917 917 917 917

5"Oftes

bxi.iln K ...1ng 0 0 2.042 4.084 8.169 8,410 8,425 9,140 9.231 9,042 8,471 8,500 8,0O0 8.500 8.500 8.2B0 S.2M' 8.280 8.280 8.2n0 8,280 8.280 8,290 8.280 8.280 8.280 8,280 8.280 8,280 26,560N.. II...1.g 0 0 0 264 1.6 46,589 8.658 13,615 18.221 22.528 26.920 '3.43.2 63.821 57.736 55,143 46.548 41.720 41.0864 41.064 41.064 41.064 41.064 41.064 41,064 '.1,064 41,044 41.064 41,064 41,064 32,126

iis - 22.4n

a2201 30T2016 51r8 AS OYICO PRWTOJ

Zoooclt AosO,S1.

CoSt hoset pIt lo - 8Q..tt., upwsA. med b.n.ed Plot ftoac.a - o.

(T Sh 'aDD)

To" 1 2 3 1. 3 6 7 8 9 10 11 12 13 11. 13 16 17 I8 19 20 21 22 23 21. 25 26 27 28 29 30

lor .. t,,.-, 32 251 2715 1289 79 79 79 107 192 1996 1038 130 71. 71. 71. 7' 7. 71. 71 74. 7. 71. 71. 71. 7. 71. 71. 71 71. 7

Ad1n.i t.t-to- 0 78 109 11.3 179 I66 136 131. 136 138 III 102 101 101 101 101. 106 110 110 110 110 110 110 110 110 110 110 110 110 110

h*S.ttl..ut 0 38 16 662 51. -76 -76 .76 -76 -76 -76 -76 -76 -76 -76 -76 -76 -76 -76 -76 -76 -76 -76 -76 -76 -76 -76 -76 .76 -iw2

IIO..b.otldtog Cost.

1.r'o .ot 0 0 30 59 119 101 86 0 0 0 0 23 00 is.8 0 0 0 0 0 0 0 0 0 0 0 0 o a 0

ll,SCos',.olon 0 0 23 296 61.2 768 911 126*. 1683 1901 2158 1568 83 0 0 0o 0 0 0 0 0 0 0 0 0 0 0 0 0 0

N14,1t.,s,,. 0 0 1 1 6 18 33 31 76 110 11.8 191 213 213 178 11.3 9,3 77 69 69 69 69 69 69 69 9, 69 69 69 73

Doefit.

.o1t1,.g St-ok 0 0 i66 333 666 687 701. 71. 753 737 708 671 671. 68D 680 680 68D 680 680 680 680 680 680 660 680 680 68j 680 6930 136.0

Mw *-oa Ing 0 0 0 25 169 1.63 880 131.7 1771. 2202 2660 .396 33,30 6611. 61.6 6039 5369 3003 A.306 1.018 1.018 1.018 1.. 4.018 100. ha0s. .01.8 1.068 1.01.3 1196

in 21.hm5

Table -5

noon MU=01* $13= AME 32023U fOICT

Cost D.fwit Pl.. - squatter Uporsdlsa *d Ssvy*d Plot ProffM- T.1os

tes.u 2I 1 3 6 9 10 11 12 13 11. 15 16 It 18 19 20 21. 22 23 21. 25 26 ?7 2 9 3

G-.osn Cost.

Iofr.stmo.oos- 203 81.9 9,921 4.,89 279 17 9 79 318 1.36 3.0sA 3,608 358 331. 351. 33. 331 33. 331. 351.. 331. 351. 331. 33. 331. 351. 351. 351. 351. 351. 331.

Admi.istr.t too 80 120 11 200 161 166 11.3 11.5 11.3 11.7 11.9 132 133 133 118 113 112 112 112 III 110 110 112 111 120 120 120 120 120 120

mo..ttlsnt 0 86 172 1.1.91 1,23 . -172 -172 -172 -172 -172 -172 -172 -172 -172 -172 -172 .172 -172 -172 -172 -172 -172 -172 -172 -172 -172 -172 -172 -172 -172

II Olsh&ldtng CoSt.

umov..to 0 0 117 231. WS6 397 337 0 0 a 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

k. Co.t,otlm. 0 0 16 92111.921 2.195 2,5153,00533,574. 4.,031 1.31. 5.109 5.728 93 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

80tst..ss,. ~~0 0 0 1 19 37 100 130 210 281 361 1.33 533 670 688 661. 618 35.6 1.69 389 301. 216 197 178 169 169 169g 169 169 16i9

Uolstilq Stock 0 0 635 1.311 2.622 2.701 2,769 2,931. 2.963 2,902 2.78a. 2,730 2,730 2,73,0 2,660 2,660 2,660 2,660 2,660 2,660 2,660 2,660 2.660 2,660 2,660 2.660 -'660 2.660 2,660 %.320

II,,, Is~.sl..~g c 0 0 18 31.7 1,030 1,8r 2,833 3,838 4.81.1 3,9.5 8,01.7 9,1.71 u,o8l 12,831. 13,939 13,039 135,126 11.,378 11.,231. 13,798 9,930 9,727 9,101 ,67 8.61 1 8,617 8,617 8,617 17,231.

- 9.41.

TAJIZAMIA

Sac=l 84T105 8212T AnD IZIlicZ PIIOJI

loool Al .ys81

0.51 Blin t Floss - 8q-.tt., UP44Ir.A And 281w,u6 Flat Pr.wi - N"4woso

(T 84 'OO)

7.0, I 3 6. 1 8a 10 11 12 13 11. 13 16 17 18 19 20 21 22 23 26. 23 26 27 28 29 3

laftv*m tmn61. 96. 4o3 Mu68 1 131 13 131 16.8 201 1383 730 166 128 126 128 128 128 X238 126 128 128 128 126 126 128 128 126 128l '76 328

4881 0 1.tr.tios 70 107 167 x86 11.3 130 132 131 132 133 133 116. 108 109 113 116 116 116 116 116 116 16 116 116 116 116 116 16 16 116

*...ttlmost 0 10t 203 1739 16.33 .203 .803 -903 .203 .903 -90 1203 4903 .203 -203 .803 .203 -203 .203 -203 -203 .203 .203 .,203 -203 -203 -703 .2o3 -203 -203

flaunbuldAim. CoitS

uw~~t 0 0 24 168 316 84 5s.i 0 0 0 0 65 38 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

NW' CmstWuS'lCO 0 0 16. 668 1380 1366 1801 8139 55 652 76. 226. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

w.1tn1.ms 0 0 1 a 13 6.6 7? 116 166 1-76 150 166 137 131 137 137 137 137 137 137 137 137 137 137 137 137 137 137 137 137

841.1105 81001 0 0 6.70 360 MD8 133 1986. 2102 2123 207 1395 189 1899 1908 1906 1906 1908 1906. 1908 1906 1906. 1901. 1906. 1906. 1906. 1906. 1908 1901. 1906 324

No, H'o..111 0 0 a 13 53 137 1380 2091 9735 5087 3279 373 4 629 6.39 6353 6.05 3652 366.3 3843 366.3 366.3 3663 361.3 364.3 366.3 366.3 361.3 366.3 361.3 7216

288 . 22.058

Table 7

C... lhosill ls 8.0. NMr.d0,e d 8. Flog. so. -11

8.9,1 2 3 ~~ ~~ ~ ~ a 8 t0 11 12 Is 14 11 18 17 is it 20 21 la 23 24 28 38 -27 28 29 10

kl..989tOato. 47 43u 2.478 1.178 73 73 72 118 I"83148.149 .46 180 SG 18 43 40 8 0 4 8 4 0 8 I m a *a 8 .

£A1RIst9Uti.S 72 as 100 s0 De le 78 i 73 73 72 3 73 13 1 72 73 23 73 73 13 73 73 73 73 73 73 23 73 71

8.S.tti11 0 14 28 347 .28n - - as2 .28 - 28 2 2 -9-s - -28 .28 -28 -28 -25 -28 2 -28 -28 -28 -28 -29 -225 -e28 -8 2 2 28

wp-.~.ts 0 0 47 Os 1w0 181 128 a 0 0 0 3? 33 28 0 0 a 0 0 0 0 0 0 0 0 0 a 0 0 0

M" Coo.rwt11 0 8 31 49? 887 1.170 1.379 1.870 2.454 1,773 3.141 2.380 133 0 0 0 a 0 0 0 0 0 0 0 0 0 0 0 0 0

W.1sa.t fo. a 0 0 1 10 28 39 78 118 144 180 30 318 343 2"2 247 20 173 147 -4 -44 .6 -44 - 44 4 -4-44 44 48 -48

aI*tlIs 1oeIq 0 0 263 530 1.880 1.084 1.121 1.188 1.280 1.173 1.12? 1.048 1.073 1.078 1.078 9.078 1.076 1.078 1.078 1.018 1.078 1.078 1,078 1.078 1.078 1,074 906 1.07 8 .7 I,0m 2.132

M.- MO.Iq 0 0 0 13 241 878 1.3*3 1.818 2.381 3.213 2.802 8.188 8.883 8.80 8,223 8.041 8.823 7,831 8.881 1.748 3.748 5.748 S.748 3.240 1.748 1.740 3.748 1.748 3.740 11 .446

lu8- 2VAR5

Table 8

3ZG0N NATIO3AL 32173 UP0 $EVIC&S PIWET

CW. SentiE. Ft-, - 1o.att.t DnrodLo -- T-Ia Protect

(T 3lb '0OO)

0.orl 2 3 ~ ~~ ~ 3 6 2 4 9 10- 11 12 13 14 Is 14 17 to 19 20 21 22 23 24. 23 26 27 26 39 20

1.l,..trocI..r. " 3.621 42.636 20.303 t.169 1.t69 t.169 1.269 1.149 1.169 1,169 1,169 1.169 1.169 1.169 1.169 1,169 1,169 1.169 1.169 1.169 1,169 1.169 1,169 1.169 1.169 1.149 1.169 2.169 1.149

Ad.2l.Cr.1100i 440 620 630 930 690 690 690 690 690 690 690 690 690 690 690 490 690 690 690 690 690 690 60 690 690 690 690 690 690 190

I.S.tti-.t 0 721 1.662 12,631 10,40 1.4 -1.442 -1.442 -1.462 -1.442 -1.462 -1,662 -1.462 -1,462 -1.462 -1.462 -.1.42 .1,462 -1.662 -1.462 -1.462 -1,442 -1.462 -1.462 -1.462 -1.462 -1.462 -1.462 -1.462 -

2.proo. 0 0 643 1.36 2.572 2.176 1.930 0 0 0 0 49? 644 Sol 0 0 0 0 0 a 0 0 0 0 a 0 0 0 0 0

a." C...tfl.t210 0 9 0 2.769 1.791 3,392 9.706 10.996 10.116 9.303 12.346 10.120 444 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

lut.to--. 0 0 0 0 74 230 402 394 791 964 1.171 1.464 1.647 1.06 1.014 1,426 1.333 1.235 1.133 1.049 932 916 916 916 916 916 916 916 916 916

blo.tlin St..k 0 0 3.393 2.196 14.392 14.627 13,197 16.105 16.162 12.932 11.373 13.99? 14.551 14.551 14.600 14.600 14.600 t4.600 14.400 14.600 14.600 14.600 14.600 14.600 14,600 14,600 14.600 24.600 14,400 29.300

ft. "-is& 0 0 0 0 1.291 3.964 6,933 10,234 13.820 17.240 20.S33 24.395 30.334 3L.630 32.367 32.031 31.644 31.242 .39,702 20.236 27.S74 24.039 26.090 24.089 24,039 24,039 24.089 24.039 24,ug6 43,173

Table 9?AiNAEIA

83000 3612036 *.. AM MVIiCn OJCT

U-OOiLO AmlYnli

offw,.4 Mlts - Total 99oj.t

Yomn 3 3 Al s 6 7 8 9 10 2. 1L2 13 .14 11 16 17 18 29 20 21 22 23 74 25 26 27 28 29 30

OmerOl Coot.

iufret,WtOr 600 60 182. 930 126 633 633 2209 37198 17906 U119 197 16, 141 261 67 67 67 67 67 67 67 67 67 67 67 61 67 67

Ad0oist-ti:.1 383 405 606 836i 939 301 h3 303 52.1 300 3 37 16 12 I20 129 in9 la 22 12 7 i 26 128 130 130 130 130 130 130 130

NW *,AN.cmOtVOctt - 326 U68 2278 3796 4919 9051 13801 1572 793 6036 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

-- 9 36 206 176 276 415 73D 2057 1I0 1529 132.0 1083 826 652 614 597 580 561 52.0 521 502 2.93 .93 193 493 2.93 2.3,

9.0 H-. --- 355 1423 3554 719 11561 iszi8 18360 21-710 161923 5.1(77 564.06 35787 49263 2.1935 2.0566 240500 40429 4W2!8 4M072. 2.071 392.51 38961 30961 3096 38561 34961 n72W

160 - 31..82.'

go*

TANZAN IA

MEOND) IEATIONAL SITES AND SRtVICES Pi6OJECT

C.ot B ... fit VI-,. - SpoOcter UIpa.rdLo. od Sureyed Plot Prora.. - Tot.1 Prol..t

(T Sh '500)

Star t 2 3 4 5 6 7 8 9 10 Il 12 13 14. 19 16 17 16 19 20 21 22 23 21. 25 26 27 29 30

toe.IC-ts

InI.c-t-to.- 904 4.221 42.746 22.123 2.099 1.215 1.802 1,802 3.378 38.867 19,075 2,286 1.366 1,316 1.310 1.310 1.236 1.236 1.236 1.236 1.236 1,236 1.236 1,236 1,236 1.236 1,236 1.236 1.236

Ad.ie.tolCl.tt 440 1,003 1,235 1.536 1,524 1.629 1.191 1.173 1.193 1.231 1,190 749 722 706 702 610 819 619 818 818 617 816 816 820 820 620 630 820) 820R ..eCtI- - - 0 731 1.442 12.615 10,463 -1,462 -1.462 -1,66 ,62 -1,4 42 -1, 482 -1.462 41,462 -1" 14.62 -1,412 .1,462 41,462 41,462 -1.462 41.462 -1.462 -1,462 4,6462 4,6462 -1.462 41,462 -1,462 41.462 -2,S:6

I.P-ov.eot 0 0 643 1.286 2,572 2,178 1,650 0 0 0 0 697 444 391 0 0 0 0 0 0 . 0 0 0 0 0 0 0 0 0

Or.. Conetroctlon0 0 326 2,414 10,069 12.383 14,623 19,847 23.937 21.078 20,262 16,156 444 0 0 a 0 0 0 0 0 0 0 0 0 0 0 0 0N.InC.n.,.o. ~0 0 0 9 110 332 178 870 1.236 1.714 2,228 2.846 2,140 2,926 7,191 2,242 1,983 1,649 1.730 1.629 1,544 1.455 1,437 1,418 1,409 1.409 1.409 1.409 1,809

Wo.rI.. 1 ock 0 0 3.598 7,196 14,39.3 14,027 15,197 16.101 16,261 13,93.2 11.278 13,997 16,131 14,511 14,600 14,600 14,600 14.600 14.600 14,600 16,600 14,600 14,600 16,630 14,600 14,600 14,600 16.600 ZO2200

8,,. HonSing 0 0 0 311 3.863 7,528 15,288 21.861 29.108 35.608 62,248 44.318 62,479 88.111 88.154 81,284 73,579 71,613 70,202 68,687 68,102 64,363 " .160 63,140 63.050 63,010 61,050 63,090 17.922

Il*22.611

ANNEX 10

TANZANIA


Monitoring and Evaluation

Background

1. In the first urban project the monitoring unit produced threekinds of reports: reviews of on-site progress, based on personal interviewswith contractors, consultants, and local officials; occasional papers on aparticular problem, such as the difficulty of issuing occupancy licensesto squatters; and one general socioeconomic survey of a community to beupgraded. While helpful, these studies were frequently ad hoc, with theunit too small to carry on systematic recordkeeping of key indicators thatproject management needed to know for each site. Furthermore, it remainedunclear whether the unit was to serve primarily as an outside evaluator ofthe project, reporting directly to the Principal Secretary, or more asproject management support, providing information regularly to the Sitesand Services division.

Proposed Program

2. For the second project, the function and content of the monitoringhas been modified to overcome the difficulties encountered in the firstproject. As outlined in the report (para 5.05), monitoring will be one ofthe responsibilities of the management support unit, located directly underthe head of the Sites and Services Division (see Figure 4, Annex 5). Forthis particular project, there is greater need for monitoring to be ofdirect service to project management rather than to remain as an outsideevaluator of the project.

3. Within the Management Section, two staff members will be assignedfull time to the monitoring unit: one researcher with a background in socialsciences and an assistant with some field work experience. Efforts will bemade to find Tanzanian nationals for both positions, but funds have beenprovided to hire an expatriate researcher, if necessary. Other members ofthe section will also provide assistance. Overall, the monitoring willinvolve two tasks:

4. First, the unit will be responsible for the up-to-date maintenanceof a basic management information system. Forms to facilitate the collec-tion of this data will be prepared by the unit, filled out by the regionaladministrators responsible for execution in the field and then collectedand analyzed by the unit on a regular basis. Information will be collectedon the following topics:

(a) known socioeconomic characteristics of the communityto be upgraded and the applicants for surveyed plots;

ANNEX 10Page 2

(b) number of applications received for surveyed plotprogram, number actually allotted plots, and charac-teristics of accepted and restricted applicants;

(c) existing level and quality of infrastructure andutilities in areas to be upgraded;

(d) pace of construction of the project infrastructure;

(e) pace of housing consolidation or improvement to bedone on an annual basis;

(f) degree of participation in the housing loan programand repayment record;

(g) collection of Land Rent and Service Charge;

(h) inventory of small-scale industries and their problems;and

(i) use of community facilities.

5. To the extent suitable, the recording of this data should followthe format suggested in the Bank's "Manual for Information and MonitoringData in Urban Projects." Prior to the implementation of this record system,the monitoring staff will assist in conducting a management training seminarfor local administrators from the regions during which the system will befully explained.

6. Secondly, the monitoring unit will, from time to time, do specialsurveys to research particular problems in greater depth. Possible topicsinclude: the functioning of particular community facilities, 1/ the successof community orientation for the project, current house construction costs,and the experiences of households displaced by the upgrading process. Abudget of T Sh 300,000 is included for hiring temporary researchers andinterviewers to collect the data, purchase supplies and hire temporaryoffice help.

7. The monitoring unit will be responsible for compiling quarterlyreports which include, inter alia, the results of the unit's surveys andresearch. The quarterly reports will be submitted to IDA. A final respon-sibility of the monitoring unit will be the preparation of a Project Comple-tion Report for submission to Government and IDA within three months of thelast disbursement, i.e. by March 31, 1982.

1/ Monitoring and evaluation of the effectiveness of the nutrition-cum-health services offered under the MCH component is to be carried outby the Ministry of Health in collaboration with UNICEF.

ANNEX 11

TANZANIA


Estimated Schedule of Disbursement(US$ '000)

Cumulative % of

Quarter Quarter Ending Amount Disbursement Total

1 March 31, 1978 250 250 2

2 June 30, 1978 300 550 6

3 Sept. 30, 1978 970 1,520 13

4 Dec. 31, 1978 1,400 2,920 24

5 March 31, 1979 1,510 4,430 37

6 June 30, 1979 1,745 6,175 51

7 Sept. 30, 1979 1,510 7,685 64

8 Dec. 31, 1979 1,720 9,405 78

9 March 31, 1980 1,200 10,605 88

10 June 30, 1980 255 10,860 90

11 Sept. 30, 1980 305 11,165 93

12 Dec. 31, 1980 300 11,465 95

13 March 31, 1980 210 11,675 97

14 June 30, 1981 110 11,785 98

15 Sept. 30, 1981 110 11,895 99

16 Dec. 31, 1981 105 12,000 100


IMPLEMENTING SCHEDULE

1976 1977 1978 1979 1980 1981

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

SQUATTER UPGRADINGPreliminary designAppointment of consultant for detail designDetail design & engineeringTenderingConstruction of infrastructure _ _ _

COMMUNITY FACILITIESDesign & engineeringTenderingConstruction

SURVEYED PLOTSSite selectionPlannina & designSurveying m- m

THB-LENDING PROGRAMSurveyed plots _ _ _ _ _ _ _ _ _ _ _ _ _ _UPgrading areas

Ii i i Development of demonstration houses

SIDO-SMALL INDUSTRIESInfrastructure St workshop constructionLending program _ _ _ _ _ _ _Management assistance & training- - m - - -

TECHNICAL ASSISTANCE: ARDHIManagement support _ _ _Development of demonstration housesStudy of land rent & service chargeMonitoring & evaluation I I I I I I - m l l m

World Bank-16747

IBRD 12572

N",Q-R'7 A R A

to rirn

�ZER V �4, WD, k"'

RENGET L4KE

VA rR

mb

7urLi Oiduwal M)NCUL

ya MonduAFRICA

d N Y GA M s nyonga bfANYAR

I y A N G A u uN b KIL

4 sKiomboi

A A S

Kasulu ala '7

b idaJrambos N 0 1 Oa

t,G 0 M A

Kiberashi

B A N nA 8 0 R A cinyon

0 0

CYO

panda M A N Y 0 w

A N D Aw A w

UngWO o a r

U N I 'Al

lri'n

AtREumba 9 ete

yo 0

o ba M 8 E Y A N D X he

u up I A I G AK t L W A

IIEJE Om N A C H N G W E A

N J EN D

Liwaleu I

N G E A ac n weaN W E A

MG

5 geoR U V U I

A S A G I Nen uru

T ggg-Bo No

'7 ., >7 -Di g= 1 ,)

__ ^ S B 7 _ veAi r.

;. T m , St(

| |d* c,|i ; ' ' 7 0i;

b~~~~~~~ 47 -7 777& X- t 3> t&_

-- - - -- - - - -- -~~- A

-~~~~~~~~~~~~~~~~~~~~~2 ~~~~ ~ ~ ~ ~ C

-V -'~~~~~~~~~~~~~~~R

xK M%

IFRD 12575tnMnwoa ~~~~~~~~~~~~~~~~~~~~~~~~~~FEBRUARY 1977

N ~~~~~~~~~~~MTNI[TANZANIAN N MITENUINI ~~~~~~~~~~~Second National Sites & Services Project

'I N ~~~~~~~~~~~~~~~~~~TABORASecond Project locations.

N ~~~~~~~~~~~~~~~~~~~~~~~O-espill ser,iced sitesSquatter upgrading areas

___Project roadsEoisting features:

]~ rCentral areaHigh density residential areas,

includling squatter areas'Lo. density r-sideetial area

7 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Industrial area

-Main roads-Other roads

,f~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~' ----- To-eship boundaryI S E a A --- ~~~~~~~~~~~~~Enisting water pipelines

- --- PProposed water maies (Project)

UYUI~~~~~~~~U IOUU 2000 3000 4000

ToldU,& id,!,, -ar/du d

N -- Lu~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~IA

NN&Skw --~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~c

(C0CD

X~~~~~~~~~~~~~~~C, oC 0

7~~~~~~~~~~0 0 g00a o I )_o8D°v

~~~~~~~~ ~~~~~~~~~~~T

X ; :~~~~~~~~~~~~~~~~~~~~~~~~~~~~8 ('Cg w

<~~~~~~~~~~~~~~~~~~~~~~~~~~0 /'- >V I0

_~~~~~~~<~ x /__

/ j | . TANZANIAI' I Second National Sites & Services Project/ \ ;,UMOROGORO

/ S~~~~~~~~~~~~~~~~~~~~~~~~~~~~econd Project locations:Overspill sersiced sitesSquattr upgradinqg areasProlect roads

Enisting feateres-44\Central areaonHigh density residentialI areas,

including squate areasI ~~~~~~~Low dnnsity rnsidential area

/ I = < ~ ndustriol area-Main roads

Other roads2-~~~~ Ž~~~~- --- u--u- ~~~~~~~~~~~Railways

- I - ~~~~~~~~~~~~~~~~~~~~~~~~~~Rivers- - ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~A Painting primrary schools

</g7- \0 - I - 0 Proposed pri-mary schools-'/N 0 Enisting markets

A I N ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Proposed macrketN f Enisting health center

- ( N ~~~~~~~~~~~~Proposed health center

N''K ~ ~ ~ Et,i ~trpipelines4 is ~~~S A MV UN- Proposed water pipelines (Proiect)

KIICHANdGAN I

yui,-k Oa'L,jlAg;r as ls | 1 /ue

L eta'j /-k

earn/wi N ° u - rSow O misCuiln2.5uk m

d ioke ,< X \- $;;; Onwndwi,= ; 'ilr ,inr . FEc t; g - M^Exi 8 X .r i n, amedzel Jw ter fAs d To unversltOu Cooe\

0 WZM3QE= 2 w>ld d"akse.uuu/rgu,u drd'.r nlku : , ER

TO - psi-g {\ \ | TANZANIA(distonce 30cm]Xt ~-Pawieg rCoa Second National Sites & Services Project

)wirJ--Eoistng miorrocco roodTYPICAL UPGRADING LAYOUT

HANNA NASSIFRoads: DAR-ES-SALAAM Water supply

Class C- 2 150-IO pipes and aboveClass D 100 er pipes -nd below

Electric power EX: Mair valvesE.isting high tension power lines 0 Fire hydrants

E..sfitg low tension power hnes _ Standpipes

| -f | K -_ Proposed high tension power Ines --[E E-istmg standpipes

- - t Proposed low tension power Ines. Main surfoce wa.er drainoge systemti Proposed transformers - Major os,s(all

Eeisfi,,g boosing C Cloert

Plyg-ro-d

600 mm pipeline =

,. W 1 ~~g ' <* ETR

0 200 O0 200

cv,idOwik vs~~~~ 0 vfji200ivi=6r

. '\ \ \ '-i-WA ' ll! W 5 ~~~~~~~~~~~~~~~~~~~FEET

_" ,, . s v W{l, _ , i '' W3' ;g ~~~~~~~~~~~TA NZ A NI A S.S

Lr Ww W ?g- ; > Dar es Salar.

IsL 0411 Nyas,i,~~~~~~~~~~~~~~~~~~~~~~~~~~~O

public disclosure authorized sites and services project...

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