Doooeumt of

The World Bank

FOR OMcL4L uSE ONLY

Rqf t Ne. P-5878-N&U

UU0(RAUU AU» T

OF TUE

PRESIDENT OF TEE

INTERNATIOUAL DEVOPEJ ASSOCITOU

TO THE

EMTIvE DIIEcRS

ou A

PROPOSED CREDIT

lU THE AMlOT EQUIVALENT TO US$12 MIION

TO

TiEE ISLAMC REPUIC OP llITASIA

FOR A

CONSTRUCTION C&pACIT AUD ENPLOXUT PROJECT

JA1UARY 7, 1993

MICP(.FICHE COPY

Report Nc-J :P- 5878 MAU TyPe: (P)Title: CONST,TICTI ON CAPACITY AND EMELAuthor: JEAN-MAPIE LANTPANExt. ::34769 Raci:i 39- 125 Dept. :AFr!JN

Tbis dochm«ot bas a restrcted distribution asd may be ued by recipients oaly Je the p«formmoe ofthdr ofcia duteL It routents .May not otherwise be doseld wltbout World Bak ol sstiou.

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Currency EquivsriCurrency Unit = Ouguiyas (UM)US$1.0 5 112.7 (December, 1992)SDR . = US$1.38612

System of Weights and MeasuresMetrie System

Fiscal eaJanuary 1 - December 31

List of Aerp.ymsÇTranslated into English)

AGETIP Agency for the oxecution of Public Agence d'xécution des TravauxWorks Md Employment d'bntérê Public et pour l'Emploi

AMEXTIPE Maurtanian Agency for the Exccution of Agence Mauritanienne d'Exécution desPublio Worlcs and for Employaient Travaux d'Int6rt Public pour rEmpoi

BGR Road Management Unit Bureau de Gestion RoutièreDEF Direction of PrimaMr Educadon Direcdon de l'Enseignement FondamentalDPN National Enviroenta Protection Service Direcion de la Protection d la NatureDTP Public Works Department Direction des Travaux PublicsEC European Community Communauté EuropéenneCDP Gross Domstio Product Produit national brutGIE Groupements dintérêt EconomiqueGRIM Goverment of the Islamic Republic Gouvernement de la République slamque

of Maurthania de MauritanieHDM tligway Design Model Programme infonaique de gesdon routièreIAPN Immediate Action Plan for Nouakchott Plan d'action immédiate pour Nouakchott5CB Intmational Competiive Bidding Appel d'offres intnationalLCB Local Competitve Bidding Appel d'offres localMDRE Ministry of Rural Development Ministère du Développement Rural et de

amd Enviromnt l'EnvironnementMET Mnistry of Equipment and Transport Ministère de l'Equipement et des TrnsportsMOP Minitry of Fmance Ministère des FuiancesMOI M;isty of Inteior Ministère de IlntérieurMON Municlpality of Nouakchott Mairie de NoualcchottMP Ministry of Planning Ministère du PlanNGO Non Governmentat Organi2aton Organisation non gouverementalePCR Project Comploion Report Rapport de d'évaluation rétrospectivePPAR Project Performance Audit Report Audit d'évaluation rétrospecdvePPF Project Pmrparation Facllity Facilité pour la préparation des projetsRMI Road Maintenance Iniatve Initiative d'entretien routierSDA Social Dimension of Adjutment Dimension sociale de l'ajustementSDR Standard Drawing Rights Droits de tirage spéciauxSOE Swatement of Expenditures Eats de ddpensesUNDP United Nations Development Programme Programme des Nations Unies

pour le DéveloppementUNSO United Nations Sudano-Sahsean Office Office Sabélien des Nations UniesWPP World Food Program Programme d'Alimentation Mondial

FOR OFFICUL USE ONLY

ISLANIC REPUBLIC OF MAURITANIA

CONSTRUCTION CAPACITY AND EMPLOYMENT PROJECT

CRED1T AND PROIECT SUMMARY

Borrower: Islamic Republic of Mauritania

Beaeficiaries: Municipalities of MauritaniaMinistry of Equipment and Transport

.Ampount: SDR 8.7 million (US$12 million equivalent)

lerms: Standard IDA terms, with 40 years maturity

Qnlendinjg Tm: Not applicable

Finacing1Pan: Government/Beneficiaries US$3.20 millionIDA US$12.00 millionCofinancing US$4.80 million

TOTAL US$20.00 million

Economic Rateof ReXtn: 12% minimum for sub-projects for which an economic rate of return

can be calculated

StaffApraisalReport: Report No. 11166-MTA

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

MEMORANDUM AND RECOMMENDATION 0F THE PRESIDENTOF THE IDA TO THE EXECUTIVE DIRECTORS

ON A PROPOSED CREDIT TO THE ISLAMC REPUBLIC OF MAURITANIAFOR A CONSTRUCT1ON CAPACITY AND EMPLOYMENT PROJECT

1. I submit for your approval the following report and recommendation on a proposeddevelopment credit to the Islamie Republie of Mauitana for SDR 8.7 million, the equivalent ofUS$12 million, on standard IDA terms with a maturity of 40 years to help finance a project forconstruction capacity and employment, which fits into the country assistance strategy discussed onNovember 19, 1991.

COUITRY ECONOMIC BACKGROUND

2. Faced with a deepening economic and ftinancial crisis, the Mauritanian Governmentadopted, in 1985, a comprehensive Economic and Financial Recovery Program (PREF) for 1985-88which was followed in 1989 by a Consolidation Progeam (PER) for 1989-91. An IDA structuraladjustment credkt (SAL 1) supported the second phase of the PREF (1987-88), emphasizing policyreforms in seven key areas: public administration, banldng, public enterprise, energy, food policy,fisheries and private sector promotion. Ibese adjustment efforts have been pursued and deepenedtbrough two Sectoral Adjustment operations for the agriculture and public entexprise sectors approvedby the Board in FY89. Mauritania's adjustment efforts and indebtedness made it eligible for theSpecial Program of Assistance.

3. After the initiation of the adjustment program, macroeconomic performance improvedconsiderably tbrough 1989. Real GDP growth rose to 3.4% per year during 1985-89. In parlelwith macroeconomic measures, several key structural reforms were put in place with the result thatthe Mauritanian economy has become more market-oriented.

4. However, in 1990-91, the Mauritanian economy suffered a series of externad shocks, theeconomic and financial impact of which have been severe. Unfavorable weather conditions affectedoutput in the agricultural sector, anu the iron-ore and fishing sectors both suffered as a result ofexternal conditions. In addition, a sharp cut-back in external financing occurred as a consequenceof the Persian Gulf crisis. lbhe shocks were compounded by intea factors, including inadequateresponsiveness of macroeconomic policies and institutional deficiencies in the agricultural and flishingsectors.

5. Recognizing the need to restore competitiveness and encourage diversification of Mauritania'sexport base in order to move toward a viable medium-term extanal position, the Govermmentdepreciated the exchange rate of the Ouguiya by 27% in terms of US dollars on October 4, 1992.TIe adjustment of the exchange rate is being supported by restrictive fiscal and monetary policieswhich are expected to strengthen the competitiveness of the export sector.

6. The adjustment program undertaken by the Government has succeeded in liberalizing muchof the Mauritanian economy, and encouraging the private sector to expand its activities in all sectors.However, the economy remains fragile and its medium-term prospects are difficult. The Govermmentis therefore determined to intensify its adjustment efforts so as to ensure that the economy attains itsfuil growth potential. The Government's main macroeconomic objectives for the period 1992-1995are as follows: a) to achieve an average real GDP growth rate of 3.5% a year; b) to reduce the

amnuai inflation rate to 3.5% by 1995; and c) to reduce the external current account deficit (excludingofficial transfers) from 14.4% of GDP in 1991 to 7.5%.

7. 'Ie Governmegt is comwitted to pursuing its adjustment program, lncluding the liberatizationof the .conomy. For the next few years, tihe focus will be on continued strengthening of publicresource management, furiuer enhancement of the enabling environment for private sector investmentand growth, and an acceleration in its program to develop the country's human resources. Futureeconomic reforms would include completion of the ongoing reforms of the banking system, a majorreform of the fisheries sector and a series of actions to strengthen the incentives framework, theabolition of ail remaining monopolies, the elimination of all price controls and the restructuring ofthe banking and fisheries sectors. la the area of public resource management, policies would bedesigned to ensur maximum eMciency in the use of scarce public resources, including, inter alla,(») iproved articulation of macroeconomic and sectoral development priorities enabling better projectsecection on economic criterla and strengthened and streuamlined procedures for planning andmonitoring public expenditures; (ii) greater emphasis on human resource development; and (iii) theprovision of adequate basic infastructre required for economie development.

SECTORAL BACKGROUND

8. Urban Labor Market and Employmen. Serious imbalances exist between labordemand and supply in urban areas: i) th. public sector, which used to provide guarantd employmentfor graduates, is being downsized in the context of adjustment programs; il) the formal private sectorcontinues to rely on capital intensive production techniques, even for tasks which could be carriedout manualiy at a lower cost; and lWi) many of the newoomers entering the urban labor market areunsklled laborers lacklng the training and education that would make them attractive to employers.'Me labor force was estlmated, in 1989, at 630,000 people (270,020 in urban areas, 360,000 In rwalreas); of which 180,000, or 29%, were unemployed. 'Ie modem sector employed 60,000 persons.

'ie infrmal sector was estimated to provide employment .a about 180,000 persons; a recent estimateincreased this number to 250,00W. 'Ie current average monthly wage is ItM 7,000 (formal andinformai sectors).

9. lIe Highwa Sector. Prom independence to the late 1980s, Government policy wasoriented towards allocating resources to tie constuction of new roads and neglectlng periodic androutine road mântenance. Ibis policy resulted in a general deterioration of the road network, whichconista of 1750 km of paved roads, 700 km of modem gravel roads and 5,000 km of earth roads.In addition to progressive wear and tear on the road network, mobile sand dunes have become agrowing threat to roads and important resources (about UM 200 million or US$2.5 million in 1991,almost half of the current expenditures for roads) mumt be used merely to keep roads open to traffle.By late 1989, a sectoral roform program started but quickly stopped due to lack of resources. In thelast two yeara, foreign aid has been very limited (only the EC and France have continued theirsupport), most of which has been used for removing sand from roads. Consequently, MET hasstopped its efforts at setting up a comprehensive road management policy.

10. lhe Urban Sector. hie urban sector could be ciaracterized by four main issues: 1)the extremely rapid urbanization trend which resulted in high unemployment; il) the growing scarcityof public resources during tihe last decade which reaulted lu a steady decline in per capita urbaninvestment, mosdy in the Nouakchott area; iii) the poor performance of tihe main goverament bodiesresponsible for urban development and housing, in part becauase especially advantageous flinanclag

conditions were no longer available; and iv) the poor implementation of the decentralization process,which transferred the bulk of the responsibility for maintaining infrastructure and services to the localcommunities, without increasing their resources and autiority. Acting against this backgrcund, thecurrent Government's strategy emphasizes the need for the promotion of a new urban managementsystem. As a result, GRIM is eager to withdraw, a Ieast partially, from direct support to urbanservices, urban infrastructure development and provision of shelter. These functions should be takenover, to the extent possible, by the local governments and the private sector. Within the overallobjective of laying the foundation for sustained growth through development of private initiatives,the Government strategy for the urban sector aims to improve the support that efficient cities can giveto the creation of economic activities and to the generation of employment opportunities.

11. Mhe Construction Induwy. The domesc constuction industry, which had developedsince independence, has been deeply hurt by both the sharp drop in funding of the investmentprogram and the 1990 conflict with Senegal. In addition, all but a few of the foreign constructionfirms (French and Brazilian) which carried out most of the major works have left the country. Thehiring and employing of nationals is hampered by the fact that few training schemes are offered inthe construction sector. But, under the current harsh economic conditions, there is no reluctance onthe part of national workers to accept hard labor-intensive works, and businessmen are available tocontract these works. Whgle recently normalized relations between Senegal and Mauritania may resultin a progressive and partial returm of Senegalese specialists, the process is likely to be slow. Tieneed and potential for educating/training Mauritanians in construction trades remains considerable.

THE CONSTRUCII_ i CAPACITY AND EMPLOYMENT PROJECr

12. Projea Objectaes. Tie Project has the following objectives: a) project objectiveswhich are: (i) to create, at least temporarily, new employment opportunities in urban areas; and (ii)to undertake subprojects that are economically and socially useful; b) development objectives whichare: (i) to demonstrate the feasibility of labor-intensive projects; (il) to test the procedures that willenable th. public sector to commission such projects, and in particular the délégadon de marsed'ourage (delegated contract management); and (iii) to improve, through the execution of the worksflnanced by the project, the individual skills of the workers who wil be employed, and the corporatecompetitiveness of the firms that will carry out works so as to develop their capacity to respond toincreased opportunities for sustained activity after project completion; and c) associated objectiveswhich include. (i) avoiding the need to increase the civil service; (Hi) combining the benefits ofimplementation methodologies that feature low cost, high visibiity and impact; (iii) supporting otherdevelopment programs by efficiently executing (but not financing) their subprojects related toinfrastructure; (iv) using transparent but expeditious and flexible procedures for subproject proposals,appraisals, procurement and disbursements; and (v) providing sustainable technical and managerialassistance to contractors.

13. Projea Description. The Project has three components: (a) a program of labor-intensive subprojects consisting of: (i) a public works program of public facility and infrastructurerehabilitation and maintenance, in urban areas as well as on the highway setwork, to be carried outunder labor-intensive schemes by local contractors; (ii) a public services program to be carried outunder labor-intensive schemes by local private frms; (b) a oackage of technical and managerialassistance and training including: (i) a package of training services related to work organization,

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management, and technical skills training, to be offered on a voluntary basis to loca contractors whowill be awarded contracts under component (a); and a training program for local engineering ffrmsand individual consultants on the preparation of feasibility studies and technical project proposads forcomponent (a); (1i) a training program for poteitial beneficiaries of subprojects of component (a), forhelping them pre-evaluate the feasibllity and soundness of such subprojects; (iii) a program aimed atincreasing grassroots participation ln urban infrastructure maintenance; and (iv) a package of servicesaimed at project monitoring; and (c) a pakg of sector udies and related technical assistanceincluding: (1) studies in the highway sector and assistance to the Ministry of Public Works andTransporte (ME) which wlll help setup ;ppropriate programming and funding procedures for roadmaintenance and enhance MET's management structure and procedures; (il) studies in the urbansector and assistance to the Municipality of Nouakchott (MON), the Ministry ef Finance (MOF) andthe Ministy of Interior (MOI) aiming at enhancing city management through improved collection oflocal taxes, adequate matching procedures with funds allocated by the central govement, andthrorgh more cost-effective use of available resources; and (iîi) preparation of an action plan fordeveloping the domestic construction industry.

14. Project Implementation. The Project will be implemented through: (a) the recentlycreated non-governmental agency (AMEXTIPE) designed to function as a mattre d 'ouvrage ddlguE(owner's agent); arA (b) extensive use of local consultants and contractors. It would include a

_triing program for civil servants, consultants and contractors. All AMEXTIPE's legal documents(statutes, by-laws, articles of agreement, manual of procedures) have been approved by Governmentand by IDA. Between now and the date of effectiveness, siX pilot subprojects will be carried out totest procedures, consultants and contractors. The selection of AMEXTIPE's Generai Manager hasbeen made. AMEIPE's statutes are designed to provide broad operational autonomy, but aquarterly tehnical and financial audit will monitor strict compliance with agreed procedures, as wellas thorough annual reviews and annual agreements on the portfolio of subprojects. The projectimplementation period is estimated at four years, with an annual volume of works and services ofabout US$5 million equivalent The Agency's operating costs will be held under 10% of total projectcosts.

15. Financing of Subprojects. In order to promote local ownership, a local contributionwill be made for each subproject-10% in the first year and 20% thereafter. These contributions willbe flnanced out of Government budgetary resources, municipal budgets and contributions from NGOsor community groups. To ensure that AMEXTIPE does not get involved in projects for whichfunding is not complete, no sub-project would be started until the beneficiary has deposited irscontribution in AMEXTIPE's bank account. 'Me Government contribution is already included in the1993 budget. 'Me first deposit by Government into the AMEXTIPE account is a condition ofeffectiveness. As an additional safeguard, should the local counterpart funds fail to materialize, IDAwould have the right to delay the approval of the next year's batch of subprojects. Given the highdegrse of political visibiity of AGETIP-type projects, the above procedures should effectivelyminimize the risk of slow project implementation due to the unavailability of counterpart funds.

16. Project Sustainability. The Project is ilkely to have a sustainable effect because: (a)it will help strengthen and promote small-sized and medium-sized construction firms, the labor force,and the local consulting industry, thus enabling them to respond to future demand for their services;(b) it will demonstrate the feasibility of efficient public works execution and encourage thedevelopment of private contract management services, thus helping increase the efficiency of publicsector expenditure;. The project management profession promoted in the private sector will besustainable if the search for efficiency, not political pressures, becomes preponderant in sllocating

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projeat management responsibilites; and (c) it will show tihe possibulity of using labor-intensivetechnologies in the context of puhlic works execut;on, thus contributing to a red3ctlon in the levelof unemployment.

17. Lessons Learnedfrom PrevWous IDA Invlvemen. Five projet similar to the oneproposed here are cuntly bein8 implementd in Senegal, Niger, Burkina Faso, Mali and Benin.lbo Public Works and Employment Project in Senegal (Cr. 2075-SE) has been under implementationfor over three years. and the experience derived from it has facilitated the preparation of more recentprojects. 'Ie sucs of the Senegal project is evidenced in, among other things, the fact that: (a)contc unt prices quoted by contractors are 15% lower than anticipated as contractors take intoaccount the fact that they recelve payments ten days after submitting their invoicec; and (b) about37% of total amounts paid to contractors are in turn paid out by them to workers in ternis of salariesand wages. Tne lessons leed from the implementation of the Senegal project which are beingaddressed in this projeat include: (a) in the procurement area, post-qualification was introduced totalce into account the residual capacity of the contractors in contract. award as well as to provideexplanations for bids that are 15% lower than the reference price; (b) as experience has shown thatgovernment has been slow in dlsbursing counterpart funding, a dated covenant has been insertedrelating the review of subproject batches to the disbursement of Government and Beneficiarycounterpart funding; (c) the training oomponent for contractors has been prepared eatly enough fort to be available right from effectiveness so that contractors have immediate acces to training; (d)a grasroots parcipation progran has been iLcorporated; (e) that proposed subprojects must nothave a negative environmental Impact has been lntroduced as a criterion of subproject eligibility andselection.

18. Raonae forBankInvolvem . This public works and employment project fits theCountry Strateg as it would help address the current high level of unemployment and would havea developmental effect on the private sector Ln tihe medium term. It will maintain infrastructure assetswiiich might disappear for lack of maintenatne, due to current sever', financl constrais. Byreopening the dialogue on infrastructre management policies, k will facilitate correcting theinappropriate resource allocation policies of Goverment in both the road and urban sectors. MDAis also expected to have a catalytic role in the mobilization of other donors' resources.

19. Adreed Acgs.

(a) Agreements Reached during Negotiations

During negotiations, agreement was reached concerning:

i) fina agreement on AMEXTIPE's Convenlon (framework agreement) withGRIM, and Manual of Procedures;

ii) agreements on periodicity and Terms of Reference of fiscal, technical,managerial, and enviroumental audits; agreement on the short-listof potentialauditing firms or joint-ventures; agreements on scopes and dates for theannual and the mid-term reviews;

Hi) agreement on :he scope and time-schedule of the study on the highwaymanagement strategy;

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iv) agreement on the scope and tims-schedule of the preparatory studies for anurban development strategy;

v) agreement on the scope and time-schedule of the action plan for thedevelopment of the construction industry;

vi) agreement on the training program for beneficiaries, consultants andcontractors for the pilot operations;

vii) agreement on the size and the payment procedures of the government's andthe beneficiaries' financial contributions; and

viii) agreement on a primary list of contractors and consultants prequalified forthe pilot operations.

(b) Conditions of Effectiveness

Conditions of effectiveness are that:

i) the Pramework Agreement (Convention) has been signed by AMEXTIPE andGRIM; GRIM has agreed upon Statutes, By-Laws, and changes to theProcedures Manual as agreed during negotiations;

ii) AMEXTIPE's General Manager, Technical Manager, andAdministrative/Financial Manager, all acceptable to the Bank have beenappointed;

iii) AMEXTIPE has submitted the Bank of a first batch of subprojects forimplementation during the first year amounting to a total of US$1 million(UM 113 million); and a short-list of preselected contractors and consultants;

iv) GRIM has deposited into AMEXTIPE's account at least US$250,000equivalent;

v) AMEXTIPE bas submitted an action plan for the execution of the 1993training program for the beneficiaries and for grassroots participationprogram;

vi) an operational accounting system consistent with the Procedures Manual andacceptable to the Bank has been set up; and

vii) the auditors have been appointed for a period of three years.

(c) Assurances Reflected in the Legal Documents:

'Me following assurances are reflected in the legal documents:

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i) at all times during project imp ementation, the Statutes of Agreement of theAgency and the Procedures Manual will be acceptable to the Bank;

il) at all times during project implementation, the Generai Manager, theTechnical Manager, and the Administrative Manager of the Agency will beacceptable to the Bank, and the Agency will be operated in an efficientmanner;

iii) the Agency wil1 submit to IDA the action plan for the 1993 training programfor contractors and consultants, no later than three months after crediteffectiveness. The agreed action plan will be updated annually during thefourth quarter to reflect the needs identified during site supervision of projectexecution;

lv) the Agency will submit to the Bank the second, third, and fourth annual workprograms inciuding that f}nanced by IDA, the municipalities and 'o-financiers, totalling at least US$3 million (UM 339 million) no later thanSeptember 30, 1993, US$4 million (UM 451 million) no later thanSeptember 30, 1994, and US$4 million (UM 451 million) no later thanSeptember 30, 1995 respectively;

v) AMEXTIPE will submit periodically to the Bank proposal to update theroster of consultants and contractors; and

vi) Government and Beneficiaries will have actualiy paid for their financialcontribution as stipulated in the Manual of procedures.

20. Envlronmental Aspects. As this is a category B project, a review of its potentialimpact on the environment was carried out during appraisal. The results of the study are availablehi the project file. The Project is expected to have a positive impact by repairing and cleaningdrainage systems, repairing bridges, collecting waste, and controlling sand dunes. Two studies arecurrently under way under the Norwegian-funded Sahelian Operation Review program, to provideguidance on environmental protection In road maintenance works. A third study financed by theUnited Nations Sudo-Sahelian Office has developed a manual of good practices for sand encroachmentcontrol which can be used also in other Sahelian countries. This project will provide forimplementation experience on the mneasures to be proposed by these three studies.

21. Program Objective Cauegories. The Project's employment creation aspects,emphasizing labor-intensive technologies, will contribute to immediate as well as longer term povertyalleviation. This positive effect will be amplified by the involvement of "informal sector" firms usingunskilled workers and by cooperating with food security programs mainly oriented towards women.

22. Project Benefits. TIe Project will have several direct benefits: (a) employmentcreation; (b) high economic rates of return of rehabilitation operations; (c) a positive environmentatimpact; (d) the long-term benefit of enhancing the efficiency of the public sector, which would havea spill-over effect on other IDA projects (such as edue tion) by improving the efficiency of Uieconstruction sector; and (e) enhanced sustainability of future infrastructure and urban projects throughbetter use of municipal resourus.

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23. RIs. Tn.e risk of slow implementadon will be reduced by the sotting up of anAGQEF-type agency and by promoting the delegation of contract management. Ihe risk ofsupporting unsuitable operatioris will be reduced by closely monitoring the implementation of theManual of Procedures with strict selection critria. TMe rlsk of the works being poorly executed willbe reducea by the development of the training program and through the quarterly technical andfinanc!al audits.

24. Recommendowos. I am satisfled that the proposed credit would comply with theArticles of Agreement of the Association and recommend that the Executive Directors approve it.

Lewis T. PrestonPresident

Attahments

Washington, D.C.lanuary 7, 1993

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Schedule APage 2 of 2

ISLAMIC REPUBL1C OF MAURITANIA

CONSTRUCTION CAPACITY AND EMPLOYMENT PROJECT

Project Financing Plan(US$ million)

Total Projeot Cost % of Projeot Cost

Government 1.0 S

Benofciaries 2.2 il

IDA 12.0 60

Other donors 4.8 24

Total Cout 20.0 100

Not: Tlhe table assuma that bcneficiaies would contribute financially to sub-procote undcrparallc financiagas thoy do to IDA financed sub-projeots.

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Page t of 3ISLAMIC REPUBLIC OF MAUR!rANIA

CONSTRUCTION CAPACInY AND EMPLOYME PRMOIZC

SUMMARY OF PROPOSED PROCUREMENT ARRANGEMENTS(US$ '000)

Projeot Procu=ent Meffiod Not TotalBlement IDA Cost

ICB LCB Other Pjmmned

1. Public Works/evices 9,470 3,800 13,270(6,913) (6,913)

2. GoodsAMEXTIPE 100 100

(100) (100)Highway Agency and MON 300 300

(300) (300)

3. Conulting Servicesa) DesignlSupervision 714 304 1,018

(509) (509)b) TA/Training + other + 900 900

Grassroots Participation+ (900) (900).o) Sectoral studies 900 900

(900) (900)d) Accounting/Auditing 200 200

_ _ _ _ _ _ _ _ _ _ _ (200) (200)

4. Agency Openg CXxs 1,045 570 1,615(733) (733)

5. Miscellaeousa) Non alcated 759 113 872

(provision for Winaion) (620) (620)b) Refinancing PPF 825 825

(825) _ (825)

TOTAL 9,470 5,647 4,787 20,000(6,913) (5,087) (12,000)

Figures in parenthesea show IDA amount

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Schfdule BPage 3 of 3

ISLAMIC REPUBLIC OF MAURITANIA

CONSTRUCTION CAPACITY AND EMPLOYMENT PROJECT

Estimated Schedule of Disbursements(US$ millions)

FY and semester Disburscmentporiod Cumulative Percentago

PYN 1994PPP 0.8 0,8 72nd semeaer 0.8 1.6 13

FY 1995lot sester 1.1 2.7 232ad semser 1.4 4.1 34

FY 1996lot semeer 1.6 5.7 462nd smester 1.7 7.4 62

PY 1997lst semeuer 1.7 9.1 762nd semester 1.4 10.5 88

FPY 1998lt sumaester 1.0 11.5 96-. 2nt _ O.S 12.0 100

'Mes fiscal years are IDA fiscal years (FY 93= luly 1, 1992 to luae 30, 1993)

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SchcMue C

ISLAMIC REPUBLIC OF MAURITANIA

CONSTRUCTION CAPACITY AND EMPLOYMENT PROJECT

Timetable of Key Proiect Processing Events:

(a) Time taken to prepare: 9 months

(b) Prepared byl/: Government with IDA assistance

(c) First IDA mission: March 1992

(d) Appraisal mission departure: June 27, 1992

(e) Negotiations: December 10 to 15, 1992

(fl Planned Date of Effectiveness: May 31, 1993 (tentative)

(g) Relevant PCRslPPARs: None

J/ This project was prepared by Mr. Jean-Marie Lantran, Sr. Construction Industry Specialist,and Mr. Robert Maurer, Municipal Finance Specialist, AF5IN, with the assistance of Mr. RogerNignon, consultant.

Schdub DPage 1 of S

CONSTRUCTION CAPiACrltY AND YEN PROJEU

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._.__............. ------ _ ------ . . . -- ...... _ ._.-....____.____

20 Cr.i ltc<) cio*.d 134.12

c18070-MTA 198 AtAURITANIA PUIILC UOT TA à RUA 10.40 2.0' 42/31/2(R)0s1IO-NtA 19e8 IAURITANIA 14ALL SCA&iA ft10*1i 7.t0 4.10 o 0s/30/CSt720-NtrA Io"1 MAIRZTANIA sW ss 8.28 4.04 12/31/11c1080-NTA 1900 NAURITANIA LuV$T0c0 ss 7.00 0.04 00/30/98(R)c08080t-NA 1900 NAuRIITANA OOvELOP. mmNT 10.00 2.78 12/11/94C19430-NiA 1ot9 NAURITANZA 0OUc.SEcTR RilSTRIUCT 1S.20 ô.12 04/0/*4520CtO0.NTA"S>) 190 AURStANIA A0 SOCALISRRO tNPRO 28.00 18.09 12/81/98C21Ct0-NTA(S) 1990 NAURITANIA P.E. sEcTeR ADJ 40.00 23.ô2 12/s1/92C21070-NTA 1990 NAURITANIA P.8. St£CTOR St«T Oiu 10.00 48.2 00/30/98021662-NTA<8) 1992 NAU*ZTANIA P.E. SI£c t4 ADJ 2.80 2.08 12/31/92c23t%0-1NTA 1992 NAURITANIA POP ItEA.TR 18.70 18,03 08/30/98C2 0840-NTA 1992 NAURITANZA VATt SUPPLY 10.30 10. 00/1307

TOTAL eusber CeJdilu - e12 108.0 100.77

3 Loesn(*) *10e d 148.00

A11 cle .d fo- NAURSTANZA

TOTAL cu ebe LOuet n O

TOTAL... 148.00 309.77of uhi.h r.c.id 128.07 7.11

TOTAL thdlJ bU etk à MiA 22.38 298.44A..Oz Ott.0Id 08.88

of o.11. elJ .d 08.38

TOTAPL undibt*ied 100.77

* Toti gi .ff..lt.8* M.l Ju .tue.d*uu Telsi A.ureved R.*.yscii. ce O."i.uedte Iimzee r.ercceet beUh uclige sud inuliv Loe. ued Ciedilu.(8> ledicsi. forully *1-ue CI.ct..e Ou.(S) laedct -i SAL/SICAL Leone end Ciedil..

Net. MN POVed and Iail Ruoeuguee" re. h ioe.icl v*ut. »I e*h*re* or. moi-bu vci..

The Stigeia. e888.1 .ve. end Cl.ele* delta ore b-ed upes il. Lue. Depoptata.e effleci dute Mud ure sel **beof t e e b.Tek S*u46e file.

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Page 2 of 5

Statue Of Sanh Cerup OCprblene la NAURITANIAPFOIR2SB - LIS% et Cloa*d SAL. sud $ocela

Sy Couai'yCouniry$ MAURITANIA

A...ah la USe Mlilleu

t.asn er' fl-eal Undie- CloeingCrndit Ne. Ynnr Borroe-r Purpo. Saak ZOfi buv.4 0Sie

CA02S0-NTA 1987 1^URIYANIA BAL I 27.40 .00 1*/81/fl<R1C18120-NTA 1907 NMAIMITANIA SAL I 14.74 .00 12/81/08 (R)C21661-MTA 1991 NAURITANIA P.E. SEctOR ADJ 4.00 .00 11/90191L26480-NTA 1988 NAURITANIA SNIN REHAB 20.00 .00 12/81/88

Total NAURTANiA_0.00 41.14 .00

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Page 3 of SISLAMCI(:REPUBI^IC OF MAUR1TANI

CONT-RUCTION CAPAfrll,^ND ,EMPLQYMENT PROlECT

STATUS OF IFC OPERATIONS

Amount Comimitted for IFC'sAccount at JuIy 30,1992

Eiu Oblimaor Type of usins EQUit LMa I talin MORAK Golde nm 1.1 30 4

1990 MORAK Gold extraction 1.1 3.0 4.1

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Sceule DPage 4 of 5

ISLAMI REPUBLIC 0E MAURITANIA

CONSTRUCTION CAA£ AD EPLOY - NT Q

STATUS 0F DISBURSEMENIS

1. Background: Mauritania cont}nues to face difficult economic and financialrcmtncs. Economic performance continues to be poor. (IMe difficulties of the fisheries and

banking sectors, in particular, are a major concern). Until 1989 Maurita's adjustmentperformancewas stong. It met macroeconormic objectives and took all strucural measures agreed in the frst,second and third PFPs. A first SAL was closed in December 1989. Two IDA-supported hybridoperations are currendy underway. One covers the public enterprise sector and the other agriculture.In 1990-91, tihe Mauritanian economy suffered a series of externat shocls, the economic and finacialimpact of which was not appropriately offset through macroeconomic adjustment measures. Tierewas a slowdown li growth. The factors contributing to tds decline were unfavorable weatherconditions, institutionat deficiencies in the agricultural sector, and the weak performance of the iron-ore and flshing sectors. 'Ie Mauritanian economy is fragile, and its medium-term prospects remaingloomy given the limited natural and human resource base, a high degree of vulnerabDiity toexogenous factors (climatic conditions and commodity prices), an inelastic revenue base, and anextremely heavy debt service burden (34.8 percent of GDP in 1991). The experience of the pastyears ihas made it clear that without macroeconomic stability and access to sufficient externatfiancing, sustainable growth will be difficult to attain. The operations chmracterized by slowdisbursement are noted below:

2. AGSECAL. This credit of US$25 million become effective on April 27, 1990 andthe account is scheduled to be closed on December 31, 1995. Disbursement lag is due to the facttiatthe second tranche release has been withbeld as a result of delays in implementing the agreedmeasures on land tenure reform, agricultural credit debt recovery, and reorganization of the Minstryof Rural Development and Sonader. lbe second tranche is expected to be released in the first halfof 1993.

3. PESCAL. Tbis credit of US$40 million became effective on August 29, 1990 andthe account was scheduled to be closed on December 31, 1992. Despite the fact that all theconditions of the second tranche release were met, the tranche release bas been delayed because oftihe lack of a PFP. This has been recently solved and, consequently, the release of the second trancheis expected to proceed in the next few months.

4. IDF Il. Ibis credit of US$5.3 million became effective on Febnuay 28, 1986.Although the project closed on December 31, 1991, the project's accounts are not yet closed pendingthe refunding by the government of amounts disbursed on two special accounts that have not yet beendocumented. The line of credit was virtually suspended in 1987 (no commitment made since) whenBMDC, its original beneficiary, was as part of the banking sector restructuring, merged with FND

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Schedule D2Page 5 of 5

to croate UBD. UBD did not meet eligibilty criterià to the benefit of the linH of credit, which wascanceled on December 31, 1991. UBD itself was liquidated in 1992.

5. Livestock II. Ife credit of US$7.6 million was signed on April 24, 1986. It bscameeffct ia May 30, 1987. A recent supervision mission resulted in substial changes in projectmanagemem and finciial procedures aimed at ensrlng stricter fnncial control aid transparency(udgetlzation of Livestock Department operating resources d phaslug out of the Bureau desEntrants de l'Evelage). Several inactive componeuts have receutly been set lu motion(sla terose, rural water supply and pastoral association miui-projects). 'Te project bas beenextendod to lune 1995. If recent progress ls mantuined, the project could be futdy disbursed by theclolng date. lu any event, no fiurher extensions are envisaged.

6. Deeopment Management. TIb disbursement does not have any significant lag. lueirevocable commitments on the project account indicate that the project could be closed by December1993, six months before scheduled closing date, lune 1994.